What changed in this filing

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Item 8. Financial Statements and Supplementary Data

2022-12-22 compared with 2022-01-10 · 344 added, 400 removed, 988 unchanged (43% of the section changed)

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Opinion on the Financial Statements

We have audited the accompanying consolidated balance sheets of Limoneira Company and subsidiaries (the "Company") as of October 31, 2021 and 2020, the related consolidated statements of operations, comprehensive (loss) income, stockholders' equity and temporary equity, and cash flows, for each of the three years in the period ended October 31, 2021, and the related notes (collectively referred to as the "financial statements").

We have audited the accompanying consolidated balance sheets of Limoneira Company and subsidiaries (the "Company") as of October 31, 2022 and 2021, the related consolidated statements of operations, comprehensive loss, stockholders' equity and temporary equity, and cash flows, for each of the three years in the period ended October 31, 2022, and the related notes (collectively referred to as the "financial statements").

In our opinion, based on our audits and the report of the other auditors, the financial statements present fairly, in all material respects, the financial position of the Company as of October 31, 2022 and 2021, and the results of its operations and its cash flows for each of the three years in the period ended October 31, 2022, in conformity with accounting principles generally accepted in the United States of America.

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The financial statements of LLCB were audited by other auditors whose report has been furnished to us, and our opinion, insofar as it relates to the amounts included for the Company’s equity investment and equity earnings in LLCB, is based on the report of the other auditors.

We have also audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the Company's internal control over financial reporting as of October 31, 2021, based on the criteria established in Internal Control — Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission and our report dated January 10, 2022, expressed an unqualified opinion on the Company's internal control over financial reporting.

We have also audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the Company's internal control over financial reporting as of October 31, 2022, based on the criteria established in Internal Control — Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission and our report dated December 22, 2022, expressed an unqualified opinion on the Company's internal control over financial reporting.

Basis for Opinion

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Critical Audit Matter Description

The Company’s evaluation of real estate development, as held by the Company or as included specifically within its investment in Limoneira Lewis Community Builders, LLC (“LLCB”) , for impairment involves an initial assessment of each real estate

development to determine whether events or changes in circumstances exist that may indicate that the carrying amounts of, or investment in, real estate development are no longer recoverable.

The Company’s evaluation of real estate development, as held by the Company or as included specifically within its investment in LLCB, for impairment involves an initial assessment of each real estate development to determine whether events or changes

in circumstances exist that may indicate that the carrying amount of, or investment in, real estate development are no longer recoverable.

Possible indications of impairment may include events or changes in circumstances affecting the entitlement process, zoning, government regulation, geographical demand for new housing or commercial property, and market conditions related to pricing of residential or commercial land lots.

When events or changes in circumstances exist, the Company further evaluates the real estate development for impairment by a) comparing undiscounted future cash flows expected to be generated over the life of the real estate development to the respective carrying amount for its own real estate development or b) determining if its equity in investment has incurred an other-than-temporary decline.

When events or changes in circumstances exist, the Company further evaluates the real estate development for impairment by a) comparing undiscounted future cash flows expected to be generated over the life of the real estate development to the respective carrying amount for its own real estate development or b) determining if its equity investment in LLCB has incurred an other-than-temporary decline.

The Company makes significant judgments in evaluating real estate development for possible indications of impairment.

These judgments may relate to the identification of appropriate and comparable market prices, the consideration of changes to legal factors or the business climate, the likelihood of successfully completing the entitlement process, changes in zoning or government regulation, and demand for new housing.

Changes in these judgments could have a significant impact on real estate development.

Real estate development assets were $22,828,000, and equity in investment in LLCB was $60,216,000 as of October 31, 2021.

For the year ended October 31, 2021, no impairment loss has been recognized on any real estate development and no other-than-temporary-impairment has been recognized on the Company’s equity in LLCB.

We identified the management judgments used in the determination of impairment indicators for real estate development as a critical audit matter due to their significance and because of the subjectivity used by management when determining whether events or changes in circumstances have occurred indicating that the carrying amounts of, or investment in, real estate development may not be recoverable.

Changes in these judgments could have a significant impact on real estate development or equity investment in LLCB.

Real estate development assets were $9,706,000, and equity investment in LLCB was $61,154,000 as of October 31, 2022.

For the year ended October 31, 2022, no impairment loss has been recognized on the real estate development and no other-than-temporary-impairment has been recognized on the Company’s equity investment in LLCB.

We identified management judgments used in the determination of impairment indicators for real estate development as a critical audit matter because of the subjectivity used by management when determining whether events or changes in circumstances have occurred indicating that the carrying amount of, or investment in, real estate development may not be recoverable.

This required a high degree of auditor judgment when performing audit procedures to evaluate whether management appropriately identified impairment indicators.

How the Critical Audit Matter Was Addressed in the Audit

Our audit procedures related to the evaluation of real estate development for possible indications of impairment included the following, among others:

• We tested the effectiveness of the controls over management’s identification of possible circumstances that may indicate that real estate development is no longer recoverable, including controls over management’s evaluation of the entitlement process, litigation, changes in zoning, government regulation, geographical demand for new housing or commercial property and market conditions related to pricing of residential or commercial land lots.

Our audit procedures related to the evaluation of real estate development and equity investment in LLCB for possible indications of impairment included the following, among others:

• We tested the effectiveness of the controls over management’s identification of possible circumstances that may indicate that real estate development or equity investment in LLCB is no longer recoverable, including controls over management’s evaluation of the entitlement process, litigation, changes in zoning, government regulation, geographical demand and market conditions.

▪ We evaluated management’s impairment analysis by:

◦ Searching for adverse asset-specific and/or market conditions by reviewing publicly available information on home values and land values in the surrounding regions of the development, periodicals and news information relating to the Southern California housing market, other independent market data, including considerations of the demand for housing in the market and changes to comparable home prices

◦ Obtaining information from legal counsel and performing inquiries with management in order to evaluate any changes in the status of litigation matters affecting the development properties and the potential impact on the ability to recover the accumulated costs, including any relevant government regulations and/or other matters impacting the entitlement process

◦ With the assistance of our fair value specialists, we evaluated comparable land sales for both commercial and residential lots in the area as well as cost to develop residential lot information and compared it to information used by management

◦ Searching for adverse asset-specific and/or market conditions by reviewing publicly available information on land values in the surrounding regions of the development, periodicals and news information relating to the Southern California real estate market

◦ Obtaining information from legal counsel and performing inquiries with management in order to evaluate any changes in the status of litigation matters affecting the development property and the potential impact on the ability to recover the accumulated costs, including any relevant government regulations and/or other matters impacting the entitlement process

◦ Obtaining comparable land sales in the area and comparing such data to information used by management with the assistance of our fair value specialists

◦ Developing an independent expectation of impairment indicators and comparing such expectation to management’s analysis

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Los Angeles, California

January 10, 2022

December 22, 2022

We have served as the Company’s auditor since 2019.

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Receivables/other from related parties 3,888 5,958

Income taxes receivable — 5,911

Total current assets 37,535 42,089

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Series A Junior Participating Preferred Stock – $ 0.01 par value ( 20,000 shares authorized:

zero issued or outstanding at October 31, 2021 and 2020)

zero shares issued or outstanding at October 31, 2022 and 2021)

Common Stock – $ 0.01 par value ( 39,000,000 shares authorized:

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Other operations 4,438 4,332 4,504

Loss (gain) on disposal of assets 109 502 ( 1,069 )

(Gain) loss on disposal of assets ( 4,500 ) 109 502

Selling, general and administrative 21,815 19,427 21,280

Total costs and expenses 182,404 172,360 183,567

Operating loss ( 6,333 ) ( 19,008 ) ( 5,514 )

Other income (expense):

Operating income (loss) 2,201 ( 6,333 ) ( 19,008 )

Other (expense) income:

Interest income 53 379 362

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— — ( 6,299 )

Other income, net 89 219 129

Total other income (expense) 2,170 ( 7,427 ) ( 1,049 )

Loss before income tax benefit ( 4,163 ) ( 26,435 ) ( 6,563 )

Income tax benefit 266 8,494 1,097

Other (expense) income, net ( 955 ) 89 219

Total other (expense) income ( 1,852 ) 2,170 ( 7,427 )

Income (loss) before income tax (provision) benefit 349 ( 4,163 ) ( 26,435 )

Income tax (provision) benefit ( 823 ) 266 8,494

Net loss ( 474 ) ( 3,897 ) ( 17,941 )

Loss (income) attributable to noncontrolling interest 456 1,506 ( 477 )

Loss attributable to noncontrolling interest 238 456 1,506

Net loss attributable to Limoneira Company ( 236 ) ( 3,441 ) ( 16,435 )

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Net loss $ ( 474 ) $ ( 3,897 ) $ ( 17,941 )

Other comprehensive income (loss), net of tax:

Other comprehensive (loss) income, net of tax:

Foreign currency translation adjustments ( 2,430 ) ( 685 ) ( 707 )

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( 183 ) 2,500 274

Pension settlement cost, net of tax of $ 169 , $ 0 and $ 0

Residual state tax effects on sale of equity securities — — 140

Total other comprehensive income (loss), net of tax 1,815 ( 293 ) ( 1,710 )

Total other comprehensive (loss) income, net of tax ( 2,175 ) 1,815 ( 293 )

Comprehensive loss ( 2,649 ) ( 2,082 ) ( 18,234 )

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Preferred Series B-2

Shares Amount Capital Earnings Income (Loss) Stock Interest Total Stock Stock

Shares Amount Capital Earnings (Loss) Income Stock Interest Total Stock Stock

Balance at October 31, 2019

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Exchange of common stock ( 11,314 ) — ( 213 ) — — — — ( 213 ) — —

Acquired noncontrolling interest — — — — — — 14,410 14,410 — —

Net (loss) income — — — ( 5,943 ) — — 477 ( 5,466 ) — —

Noncontrolling interest adjustment — — — — — — ( 145 ) ( 145 ) — —

Treasury shares ( 250,977 ) — — — — ( 3,493 ) — ( 3,493 ) — —

Net loss — — — ( 16,435 ) — — ( 1,506 ) ( 17,941 ) — —

Other comprehensive loss, net of tax — — — — ( 293 ) — ( 30 ) ( 323 ) — —

Reclassification of unrealized gain on marketable securities upon adoption of ASU 2016-01 — — — 15,921 ( 15,921 ) — — — — —

Reclassification upon adoption of ASU 2018-02 — — — ( 1,411 ) 1,411 — — — — —

Balance at October 31, 2020

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Noncontrolling interest adjustment — — — — — — ( 1,331 ) ( 1,331 ) — —

Treasury shares ( 250,977 ) — — — — ( 3,493 ) — ( 3,493 ) — —

Net loss — — — ( 3,441 ) — — ( 456 ) ( 3,897 ) — —

Other comprehensive loss, net of tax — — — — ( 293 ) — ( 30 ) ( 323 ) — —

Other comprehensive income, net of tax — — — — 1,815 — 11 1,826 — —

Balance at October 31, 2021

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Exchange of common stock ( 105,316 ) ( 3 ) ( 1,527 ) — — — — ( 1,530 ) — —

Noncontrolling interest adjustment — — — — — — ( 1,331 ) ( 1,331 ) — —

Net loss — — — ( 236 ) — — ( 238 ) ( 474 ) — —

Other comprehensive (loss) income, net of tax — — — — 1,815 — 11 1,826 — —

Other comprehensive loss, net of tax — — — — ( 2,175 ) — ( 118 ) ( 2,293 ) — —

Balance at October 31, 2022

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Depreciation and amortization 9,798 9,812 10,097

Loss (gain) on disposal of assets 109 502 ( 1,069 )

(Gain) loss on disposal of assets ( 4,500 ) 109 502

Stock compensation expense 2,732 2,582 2,044

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Loss on stock in Calavo Growers, Inc.

— 6,299 2,117

Other, net 1,831 335 671

Changes in operating assets and liabilities, net of business combinations:

Changes in operating assets and liabilities:

Account receivable and receivables/other from related parties 1,845 ( 5,076 ) ( 309 )

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Net proceeds from sales of real estate development assets 7,917 — —

Agriculture property acquisition — — ( 397 )

Business combination — — ( 15,000 )

Cash distribution from Trapani Fresh 122 — —

Net proceeds from sale of stock in Calavo Growers, Inc.

— 11,048 4,785

Loan to Limoneira Lewis Community Builders, LLC — — ( 1,800 )

Collection on loan and note receivable 25 1,800 150

Collection on loan and notes receivable 2,755 25 1,800

Equity investment contributions ( 48 ) — ( 2,800 )

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Investments in mutual water companies and water rights ( 506 ) ( 653 ) ( 64 )

Net cash (used in) provided by investing activities $ ( 10,237 ) $ 3,846 $ ( 23,654 )

Net cash provided by (used in) investing activities $ 19,433 $ ( 10,237 ) $ 3,846

LIMONEIRA COMPANY

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Repayments of long-term debt ( 173,755 ) ( 95,140 ) ( 104,066 )

Principal paid on finance lease ( 18 ) — —

Proceeds from equipment financings 1,020 — —

Principal paid on finance lease and equipment financings ( 377 ) ( 18 ) —

Dividends paid - common ( 5,315 ) ( 5,303 ) ( 5,356 )

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Payments of deferred financing costs — — ( 66 )

Net cash provided by financing activities 534 7,361 22,433

Net cash (used in) provided by financing activities ( 33,517 ) 534 7,361

Effect of exchange rate changes on cash ( 328 ) 36 ( 5 )

Net (decrease) increase in cash ( 62 ) ( 115 ) 7

Net increase (decrease) in cash 418 ( 62 ) ( 115 )

Cash at beginning of year 439 501 616

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Cash paid during the year for interest, net of amounts capitalized $ 2,064 $ 1,503 $ 1,865

Cash (received) paid during the year for income taxes, net $ ( 5,911 ) $ ( 1,235 ) $ 130

Cash paid (received) during the year for income taxes, net $ 83 $ ( 5,911 ) $ ( 1,235 )

Non-cash investing and financing activities:

Decrease in real estate development and sale-leaseback deferral $ — $ — $ ( 58,330 )

Non-cash reduction of note receivable $ — $ — $ 89

Contribution of real estate development to equity investment $ 7,975 $ — $ —

Reduction of net payables to related parties $ 2,392 $ — $ —

Reduction of note receivable $ 388 $ — $ —

Capital expenditures accrued but not paid at year-end $ 430 $ 657 $ 4,269

In December 2018, the Company terminated its lease agreement with LLCB (as defined herein) that is developing the East Area I real estate development project.

As a result, the Company reduced its sale lease-back deferral and corresponding real estate development by $ 58,330,000 and reclassified $ 33,353,000 of the Company’s basis in the joint venture from real estate development to equity in investments as further described in Note 7 - Real Estate Development and Note 8 - Equity in Investments of the notes to consolidated financial statements included in this Annual Report.

See Notes to Consolidated Financial Statements.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Limoneira Company (together with its consolidated subsidiaries, the “Company”) engages primarily in growing citrus and avocados, picking and hauling citrus, and packing, marketing and selling lemons.

The Company is also engaged in residential rentals and other rental operations and real estate development activities.

The Company markets and sells lemons directly to food service, wholesale and retail customers throughout the United States, Canada, Asia, Europe and other international markets.

The Company markets and sells citrus directly to food service, wholesale and retail customers throughout the United States, Canada, Asia, Europe and other international markets.

The Company is a member of Sunkist Growers, Inc.

(“Sunkist”), an agricultural marketing cooperative, and sells its oranges, specialty citrus and other crops to Sunkist-licensed and other third-party packinghouses.

The Company sells the majority of its avocado production to Calavo Growers, Inc.

(“Sunkist”), an agricultural marketing cooperative, and sells a portion of its oranges, specialty citrus and other crops to Sunkist-licensed and other third-party packinghouses.

Through fiscal year 2021, the Company sold the majority of its avocado production to Calavo Growers, Inc.

(“Calavo”), a packing and marketing company listed on the NASDAQ Global Select Market under the symbol CVGW.

Calavo’s customers include many of the largest retail and food service companies in the United States and Canada.

Calavo packs the Company's avocados, which are then sold and distributed under Calavo brands to its customers.

In February 2022, the Company terminated its Avocado Marketing Agreement and the associated Letter Agreement Regarding Fruit Commitment with Calavo to pursue opportunities with other packing and marketing companies.

Summary of Significant Accounting Policies

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Concentrations and Geographic Information

The Company sells the majority of its avocado production to Calavo.

The Company sells the majority of its avocados, oranges and specialty citrus and other crops to third-party packinghouses and processors.

Prior to fiscal year 2022, the Company sold a majority of its avocado production to Calavo.

Sales of avocados to Calavo were $ 6,594,000 and $ 8,806,000 in fiscal years 2021 and 2020, respectively.

The Company sells the majority of its oranges and specialty citrus to a third-party packinghouse.

Concentrations of credit risk with respect to revenues and trade receivable are limited due to a large, diverse customer base.

Two customers each represented 10 % of revenue for the year ended October 31, 2021 and one customer represented 10 % of revenue for the year ended October 31, 2020.

No individual customer represented more than 10% of accounts receivable, net as of October 31, 2021 and one customer represented more than 10% of accounts receivable, net as of October 31, 2020.

Concentrations of credit risk with respect to revenues and accounts receivable are limited due to a large, diverse customer base.

One customer represented 11 % of revenue for the year ended October 31, 2022 and two customers each represented 10 % of revenue for the year ended October 31, 2021.

No individual customer represented more than 10% of accounts receivable, net as of October 31, 2022 and 2021.

Lemons procured from third-party growers were approximately 52 %, 52 % and 60 % of the Company's lemon supply in fiscal years 2022, 2021 and 2020, respectively.

One third-party grower was 46 % and 39 % of grower payable at October 31, 2021 and 2020, respectively.

One third-party grower was 21 % and 46 % of growers and suppliers payable at October 31, 2022 and 2021, respectively.

The Company maintains its cash in federally insured financial institutions.

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("San Pablo").

During fiscal years 2021, 2020 and 2019, the Company had approximately $ 3,633,000 , $ 14,150,000 and $ 14,651,000 , respectively, of total sales in Argentina by Trapani Fresh.

During fiscal years 2022, 2021 and 2020, the Company had approximately $ 673,000 , $ 3,633,000 and $ 14,150,000 , respectively, of total sales in Argentina.

The majority of the Company's avocados, oranges and specialty citrus and other crops are sold to packinghouses and processors located in the United States.

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Orchards and vineyards 20 – 40

Costs of planting and developing orchards are capitalized until the orchards become commercially productive.

Planting costs consist primarily of the costs to purchase and plant nursery stock.

Orchard development costs consist primarily of maintenance costs of orchards such as cultivation, pruning, irrigation, labor, pest control and fertilization, and interest costs during the

LIMONEIRA COMPANY

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Property, Plant and Equipment (continued)

Costs of planting and developing orchards are capitalized until the orchards become commercially productive.

Planting costs consist primarily of the costs to purchase and plant nursery stock.

Orchard development costs consist primarily of maintenance costs of orchards such as cultivation, pruning, irrigation, labor, pest control and fertilization, and interest costs during the development period.

development period.

The Company ceases the capitalization of costs and commences depreciation when the orchards become commercially productive and orchard maintenance costs are accounted for as cultural costs as described above.

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Equity Securities

The Company’s equity securities, are stated at fair value with unrealized gains (losses) reported in net income.

The Company had no equity securities as of October 31, 2022 and 2021.

In fiscal year 2020, the Company sold all 200,000 shares of Calavo common stock for a total of $ 11,048,000 , recognizing a loss of $ 6,299,000

Long-Lived and Intangible Assets

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There is uncertainty around the breadth and duration of the Company's business disruptions related to the COVID-19 pandemic.

The decline in demand for the Company's products beginning the second quarter of fiscal year 2020, which it believes was due to the COVID-19 pandemic, negatively impacted its sales and profitability for the last three quarters of fiscal year 2020 and all of fiscal year 2021.

The Company also expects COVID-19 to have some impact to its sales and profitability in future periods.

The COVID-19 pandemic may impact its sales and profitability in future periods.

The duration of these trends and the magnitude of such impacts are uncertain and therefore cannot be estimated at this time, as they are influenced by a number of factors, many of which are outside management’s control.

The full impact of the COVID-19 pandemic on the Company's results of operations, financial condition, or liquidity, including its ability to comply with debt covenants, for fiscal year 2022 and beyond, is driven by estimates that contain uncertainties.

The full impact of the COVID-19 pandemic on the Company's results of operations, financial condition, and liquidity, including its ability to comply with debt covenants, for fiscal year 2023 and beyond, is driven by estimates that contain uncertainties.

Goodwill is tested for impairment on an annual basis or when an event or changes in circumstances indicate that its carrying value may not be recoverable.

Goodwill impairment is tested at the reporting unit level, which is defined as an operating segment or one level below the operating segment.

The annual, or interim, goodwill impairment test is performed by comparing

LIMONEIRA COMPANY

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Summary of Significant Accounting Policies (continued)

Goodwill is tested for impairment on an annual basis or when an event or changes in circumstances indicate that its carrying value may not be recoverable.

Goodwill impairment is tested at the reporting unit level, which is defined as an operating segment or one level below the operating segment.

The annual, or interim, goodwill impairment test is performed by comparing the fair value of a reporting unit with its carrying amount.

Goodwill (continued)

the fair value of a reporting unit with its carrying amount.

An impairment charge is recognized for the amount by which the carrying amount exceeds the reporting unit’s fair value;

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Fair Values of Financial Instruments

Accounts receivable, note receivable, accounts payable, growers and suppliers payable and accrued liabilities reported on the Company’s consolidated balance sheets approximate their fair values due to the short-term nature of the instruments.

Accounts receivable, accounts payable, growers and suppliers payable and accrued liabilities reported on the Company’s consolidated balance sheets approximate their fair values due to the short-term nature of the instruments.

Based on the borrowing rates currently available to the Company for bank loans with similar terms and maturities, the fair value of long-term debt is approximately equal to its carrying amount as of October 31, 2022 and 2021.

Business Combination and Asset Acquisition

Business combinations are accounted for under the acquisition method in accordance with ASC 805, Business Combinations .

The acquisition method requires identifiable assets acquired and liabilities assumed and any noncontrolling interest in the business acquired be recognized and measured at fair value on the acquisition date, which is the date that the acquirer obtains control of the acquired business.

The amount by which the fair value of consideration transferred as the purchase price exceeds the net fair value of assets acquired and liabilities assumed is recorded as goodwill.

Acquisitions that do not meet the definition of a business are accounted for as asset acquisitions.

An asset acquisition is accounted for by allocating the cost of the acquisition to the individual assets acquired and liabilities assumed on a relative fair value basis.

Goodwill is not recognized in an asset acquisition with any consideration in excess of net assets acquired allocated to acquired assets on a relative fair value basis.

Transaction costs are expensed in a business combination and are considered a component of the cost of the acquisition in an asset acquisition.

Comprehensive Loss

Comprehensive loss represents all changes in a company’s net assets, except changes resulting from transactions with stockholders.

Comprehensive (Loss) Income

Comprehensive income or loss represents all changes in a company’s net assets, except changes resulting from transactions with stockholders.

Other comprehensive income or loss primarily includes foreign currency translation items, defined benefit pension items and unrealized gains or losses on available-for-sale securities.

Accumulated other comprehensive income (loss) is reported as a component of the Company's stockholders' equity.

The following table summarizes the changes in other comprehensive income (loss) by component (in thousands):

Accumulated other comprehensive loss is reported as a component of the Company's stockholders' equity.

The following table summarizes the changes in other comprehensive (loss) income by component (in thousands):

2022 2021 2020

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Minimum pension liability adjustments:

Other comprehensive gain (loss) before reclassifications 3,440 ( 940 ) 2,500 205 69 274 ( 859 ) 252 ( 607 )

Other comprehensive (loss) income before reclassifications ( 254 ) 71 ( 183 ) 3,440 ( 940 ) 2,500 205 69 274

Amounts reclassified to earnings included in "Other (expense) income, net" 607 ( 169 ) 438 — — — — — —

Available-for-sale securities:

Amounts reclassified to earnings included in "Selling, general and administrative" — — — — — — — 140 140

Other comprehensive income (loss) $ 2,755 $ ( 940 ) $ 1,815 $ ( 502 ) $ 209 $ ( 293 ) $ ( 1,962 ) $ 252 $ ( 1,710 )

LIMONEIRA COMPANY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

Summary of Significant Accounting Policies (continued)

The following table summarizes the changes in accumulated other comprehensive income (loss) by component (in thousands):

Foreign Currency Translation Loss Defined Benefit Pension Plan Available-for-Sale Securities Other Accumulated Other Comprehensive Income (Loss)

Other comprehensive (loss) income $ ( 2,077 ) $ ( 98 ) $ ( 2,175 ) $ 2,755 $ ( 940 ) $ 1,815 $ ( 502 ) $ 209 $ ( 293 )

The following table summarizes the changes in accumulated other comprehensive (loss) income by component (in thousands):

Foreign Currency Translation Loss Defined Benefit Pension Plan Available-for-Sale Securities Accumulated Other Comprehensive (Loss) Income

Balance as of October 31, 2019

( 2,362 ) ( 4,753 ) ( 140 ) ( 7,255 )

Adoption of ASU 2016-01 — — ( 15,921 ) — ( 15,921 )

Adoption of ASU 2018-02 ( 2 ) ( 908 ) 2,346 ( 25 ) 1,411

Balance as of November 1, 2018

( 1,259 ) ( 4,146 ) ( 140 ) — ( 5,545 )

Other comprehensive loss ( 1,103 ) ( 607 ) — — ( 1,710 )

Other comprehensive (loss) income ( 707 ) 274 140 ( 293 )

Balance as of October 31, 2020

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Their balance sheets are translated to U.S.

dollars at exchange rates in effect at the balance sheet date and their income statements are translated at average exchange rates during the reporting period.

The resulting foreign currency translation adjustments are recorded as a separate component of accumulated other comprehensive income (loss).

Aggregate foreign exchange transaction losses realized for the Company's foreign subsidiaries was approximately $ 646,000 for fiscal year 2021 and are included in selling, general and administrative expenses in the consolidated statements of operations.

dollars at exchange rates in effect at the balance sheet date and their income statements are translated at average exchange rates during the reporting

LIMONEIRA COMPANY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

Summary of Significant Accounting Policies (continued)

Foreign Currency (continued)

The resulting foreign currency translation adjustments are recorded as a separate component of accumulated other comprehensive (loss) income.

Aggregate foreign exchange transaction losses realized for the Company's foreign subsidiaries were approximately $ 204,000 and $ 646,000 for fiscal years 2022 and 2021, respectively, and are included in selling, general and administrative expenses in the consolidated statements of operations.

Revenue Recognition

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The Company has elected to treat any shipping and handling costs incurred after control of the goods has been transferred to the customer as agribusiness costs.

LIMONEIRA COMPANY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

Summary of Significant Accounting Policies (continued)

The Company’s avocados, oranges, specialty citrus and other specialty crops are packed and sold by Calavo and other third-party packinghouses.

The Company’s avocados, oranges, specialty citrus and other specialty crops are packed and sold by third-party packinghouses.

The Company’s arrangements with its third-party packinghouses are such that the Company is the producer and supplier of the product and the third-party packinghouses are the Company’s customers.

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Revenue from crop insurance proceeds is recorded when the amount can be reasonably determined and upon establishment of the present right to payment.

The Company recorded agribusiness revenues from crop insurance proceeds of $ 2,311,000 in fiscal year 2019.

No proceeds were received in fiscal years 2021 and 2020.

We recorded agribusiness revenues from crop insurance proceeds of $ 449,000 in fiscal year 2022.

There were no proceeds received in fiscal years 2021and 2020.

Advertising Expense

Advertising costs are expensed as incurred.

Advertising costs were $ 178,000 and $ 239,000 in fiscal years 2021 and 2020, respectively, and were not material in fiscal year 2019.

Accounting for Leases as a Lessee - In its ordinary course of business, the Company enters into leases as a lessee generally for agricultural land and packinghouse equipment.

Advertising costs were $ 165,000 , $ 178,000 and $ 239,000 in fiscal years 2022, 2021 and 2020, respectively.

Accounting for Leases as a Lessee - In its ordinary course of business, the Company enters into leases as a lessee generally for agricultural land and packinghouse facilities and equipment.

The Company determines if an arrangement is a lease or contains a lease at inception.

Operating and finance leases are included in other assets, accrued liabilities and other long-term liabilities on its consolidated balance sheets.

Operating and finance leases are included in other assets, accrued liabilities and other long-term liabilities on

LIMONEIRA COMPANY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

Summary of Significant Accounting Policies (continued)

Leases (continued)

its consolidated balance sheets.

Lease right-of-use (“ROU”) assets represent the right to use an underlying asset for the lease term and lease liabilities represent the obligation to make lease payments arising from the lease, measured on a discounted basis.

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Basic and Diluted Net Loss per Share

Basic net loss per common share is calculated using the weighted-average number of common shares outstanding during the period without consideration of the dilutive effect of preferred stock.

Basic net loss per common share is calculated using the weighted-average number of common shares outstanding during the period without consideration of the dilutive effect of conversion of preferred stock.

Diluted net loss per common share is calculated using the weighted-average number of common shares outstanding during the period plus the dilutive effect of conversion of unvested, restricted stock and preferred stock.

The Series B and Series B-2 convertible preferred shares were anti-dilutive for fiscal years ended October 31, 2021, 2020 and 2019.

Diluted net loss per common share is calculated using the more dilutive method of either the two-class method or the treasury stock method.

Unvested stock-based compensation awards that contain non-forfeitable rights to dividends as participating shares are included in computing earnings per share using the treasury stock method.

Unvested stock-based compensation awards that contain non-forfeitable rights to dividends as participating shares are included in computing earnings per share.

The Company’s unvested, restricted stock awards qualify as participating shares.

LIMONEIRA COMPANY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

Summary of Significant Accounting Policies (continued)

Defined Benefit Retirement Plan

The Company sponsors a defined benefit retirement plan that was frozen in June 2004, and no future benefits have been accrued to participants subsequent to that time.

The Company sponsors a defined benefit retirement plan (the "Plan") that was frozen in June 2004, and no future benefits have been accrued to participants subsequent to that time.

Ongoing accounting for this plan under FASB ASC 715, Compensation – Retirement Benefits, provides guidance as to, among other things, future estimated pension expense, pension liability and minimum funding requirements.

2 unchanged sentences

In fiscal year 2021, the Company decided to terminate the Plan effective December 31, 2021.

The liabilities disclosed as of October 31, 2021, reflect an estimate of the additional cost to pay lump sums to a portion of the active and vested terminated participants and purchase annuities for all remaining participants from an insurance company.

During 2021, the Society of Actuaries (SOA) released a new mortality improvement scale table, referred to as MP-2021, which is believed to better reflect mortality improvements and is to be used in calculating defined benefit pension obligations.

In addition, during fiscal year 2021, the assumed discount rate to measure the pension obligation decreased to 2.6 %.

The Company used the latest mortality tables released by the SOA through October 2021 to measure its pension obligation as of October 31, 2021 and combined with the assumed discount rate and other demographic assumptions, its pension liability decreased by approximately $ 2,699,000 as of October 31, 2021.

Further changes in any of these estimates could materially affect the amounts recorded that are related to the Company's defined benefit retirement plan.

The liabilities disclosed as of October 31, 2022 and 2021, reflect an estimate of the additional cost to pay lump sums to a portion of the active and vested terminated participants and purchase annuities for all remaining participants from an insurance company.

The Company used the latest mortality tables released by the Society of Actuaries through October 2022 to measure its pension obligation as of October 31, 2022 and combined with the assumed discount rate and other demographic assumptions, its pension liability increased by approximately $ 1,425,000 as of October 31, 2022.

On November 4, 2022, the Company entered into an agreement with Principal Life Insurance Company for the purchase of an annuity contract in connection with the Plan termination.

On November 10, 2022, the annuity contract was purchased for $ 12,617,000 , payable with Plan assets and a $ 2,500,000 cash payment from the Company.

LIMONEIRA COMPANY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

Summary of Significant Accounting Policies (continued)

Recent Accounting Pronouncements

FASB ASU 2016-13, Financial Instruments-Credit Losses (Topic 326):

Measurement of Credit Losses on Financial Instruments and related ASUs

This amendment requires the measurement of all expected credit losses for financial assets held at the reporting date based on historical experience, current conditions, and reasonable and supportable forecasts.

Financial institutions and other organizations will now use forward-looking information to better inform their credit loss estimates.

Many of the loss estimation techniques applied today will still be permitted, although the inputs to those techniques will change to reflect the full amount of expected credit losses.

ASU 2016-13 is effective for SEC filers for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2019.

The Company adopted this ASU effective November 1, 2020 and the adoption did not have a material impact on its consolidated financial statements.

FASB ASU 2020-06, Debt—Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging—Contracts in Entity’s Own Equity (Subtopic 815-40):

Financial Accounting Standards Board ("FASB") Accounting Standards Update ("ASU") 2020-06, Debt—Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging—Contracts in Entity’s Own Equity (Subtopic 815-40):

Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity

This amendment simplifies accounting for convertible instruments by removing major separation models currently required under current GAAP.

This amendment simplifies accounting for convertible instruments by removing major separation models currently required under GAAP.

Consequently, more convertible debt instruments will be reported as a single liability instrument and more convertible preferred stock as a single equity instrument with no separate accounting for embedded conversion features.

3 unchanged sentences

Early adoption is permitted for fiscal years beginning after December 15, 2020.

The Company is evaluating the effect this ASU may have on its consolidated financial statements.

Agriculture Property Acquisition

In January 2019, the Company purchased land for use as a citrus orchard for a cash purchase price of $ 397,000 .

The acquisition was for 26 acres of agricultural property adjacent to the Company’s orchards in Lindsay, California.

This agriculture property acquisition is included in property, plant and equipment on the Company’s consolidated balance sheet.

LIMONEIRA COMPANY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

Acquisitions (continued)

Trapani Fresh Business Combination

On May 30, 2019, the Company acquired a 51 % interest in a joint venture, Trapani Fresh, formed with FGF Trapani ("FGF"), a multi-generational, family owned citrus operation in Argentina.

To consummate the transaction, the Company formed a subsidiary under the name Limoneira Argentina S.A.U.

(“Limoneira Argentina”) as the managing partner and acquired a 51 % interest in an Argentine Trust that held a 75 % interest in Finca Santa Clara (“Santa Clara”), a ranch with approximately 1,200 acres of planted lemons.

Trapani Fresh controls the trust and grows fresh citrus.

Total consideration paid for the Company’s interest in Trapani Fresh was $ 15,000,000 and transaction costs of approximately $ 654,000 were included in selling, general and administrative expense during fiscal year 2019.

The Company consolidated Trapani Fresh and accounted for the acquisition of Trapani Fresh as a business combination, resulting in FGF’s 49 % interest in Trapani Fresh being accounted for as a noncontrolling interest.

In February 2020, FGF agreed to a decrease in the purchase consideration of $ 152,000 to reflect profits that Limoneira Argentina would have received had the transaction been consummated at the beginning of the 2019 lemon export season.

The Company recorded a receivable from FGF, a decrease in noncontrolling interest and a decrease in goodwill.

Below is a summary of the fair value of the net assets acquired on the acquisition date based on a third-party valuation which was updated during the second quarter of fiscal year 2020 (in thousands):

Cultural costs $ 3,270

Land and land improvements 9,520

Buildings and building improvements 870

Orchards 8,410

Customer relationships, trademarks and non-competition agreement ( 10 year useful life)

Total assets acquired 29,113

Noncontrolling interest ( 14,265 )

Net cash paid $ 14,848

Goodwill of $ 123,000 relates to synergies of the operations, was allocated to the fresh lemons segment and was not deductible for tax purposes.

Revenue of $ 14,651,000 and net income of $ 999,000 of Trapani Fresh were included in the Company’s consolidated statement of operations from the acquisition date to the period ended October 31, 2019.

The unaudited, pro forma consolidated statement of operations as if Trapani Fresh had been included in the consolidated results of the Company for the year ended October 31, 2019 would have resulted in revenues of $ 177,625,000 and net loss of $ 6,092,000 .

In June 2021, the Company entered into an agreement, effective March 1, 2021, to sell and license certain assets of Trapani Fresh to FGF.

These assets consist of packing supplies and certain intangible assets related to the packing, marketing, and selling business of Trapani Fresh.

The total consideration to be received is approximately $ 3,900,000 over an 8-year term in 16 equal installments.

Payments to be received are secured by FGF’s interest in land parcels at the Santa Clara ranch and consist of a $ 1,200,000 note receivable and $ 2,700,000 of royalty payments.

There was no material gain or loss recognized on the transaction.

In August 2021, the Company entered into several additional agreements whereby the additional 25 % interest in Santa Clara was transferred into the trust resulting in the trust now holding a 100 % interest in Santa Clara.

Trapani Fresh owns and operates the 1,200 -acre Santa Clara ranch and now sells the lemons it grows to FGF, who packs, markets, and sells the fruit to its export customers.

As a result of this transaction, Trapani Fresh now recognizes lemon revenues at the market price less packinghouse charges to harvest, pack and market the fruit.

Fair Value Measurements

Under the FASB ASC 820, Fair Value Measurements and Disclosures , a fair value measurement is determined based on the assumptions that a market participant would use in pricing an asset or liability.

A three-tiered hierarchy draws distinctions between market participant assumptions based on (i) observable inputs such as quoted prices in active markets (Level 1), (ii) inputs other than quoted prices in active markets that are observable either directly or indirectly (Level 2) and (iii) unobservable inputs that require the Company to use present value and other valuation techniques in the determination of fair value (Level 3).

LIMONEIRA COMPANY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

Fair Value Measurements (continued)

At October 31, 2019, the Company owned equity securities consisting of marketable securities in Calavo common stock of 200,000 shares representing approximately 1.1 % of Calavo’s outstanding common stock at a stock price of $ 86.73 per share.

These securities were measured at fair value by quoted market prices and changes in fair value were included in the statement of operations.

In fiscal year 2020, the Company sold all 200,000 shares of Calavo common stock for a total of $ 11,048,000 , recognizing a loss of $ 6,299,000 .

In fiscal year 2019, the Company sold 50,000 shares of Calavo common stock for a total of $ 4,785,000 , recognizing a loss of $ 2,117,000 .

The Company adopted this ASU effective November 1, 2021 and the adoption did not have a material impact on its consolidated financial statements.

Prepaid Expenses and Other Current Assets

4 unchanged sentences

Sales tax receivable 475 909

Lemon supplier advances and other 2,298 1,708

Lemon supplier advances 1,188 —

Other 1,205 2,298

$ 8,496 $ 10,709

5 unchanged sentences

Equipment 61,615 62,598

Orchards 63,454 61,098

Orchards and vineyards 60,657 63,454

Construction in progress 28,489 22,477

4 unchanged sentences

In August 2020, the Company sold property located in Lindsay, California.

The Company received net proceeds of $ 6,011,000 after transaction and other costs, and recorded a loss of approximately $ 424,000 , which is included in loss (gain) on disposal of assets in the consolidated statements of operations.

In September 2019, the Company sold its multi-use Mercantile property consisting of a retail convenience store, gas station, car wash and quick serve restaurant located in Santa Paula, California.

The Company received net proceeds of $ 4,000,000 and recognized a gain of approximately $ 586,000 , which is included in loss (gain) on disposal of assets in the consolidated statement of operations.

The Company received net proceeds of $ 6,011,000 after transaction and other costs, and recorded a loss of approximately $ 424,000 , which is included in (gain) loss on disposal of assets in the consolidated statements of operations.

In October 2022, the Company sold the Oxnard Lemon property and packing facility located in Ventura County, California.

The Company received net proceeds of $ 19,144,000 and recognized a gain of approximately $ 846,000 , which is included in (gain) loss on disposal of assets in the consolidated statements of operations.

Concurrent with the closing of the sale, the

LIMONEIRA COMPANY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

Property, Plant and Equipment (continued)

Company entered into a lease agreement to continue use of the property as a lessee for a period of 36 months from the closing date , with extension options for an additional 24 months.

Real Estate Development

3 unchanged sentences

$ 9,706 $ 22,828

LIMONEIRA COMPANY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

Real Estate Development (continued)

East Area I, Retained Property and East Area II

1 unchanged sentence

In November 2015 (the "Transaction Date"), the Company entered into a joint venture with The Lewis Group of Companies (“Lewis”) for the residential development of its East Area I real estate development project.

To consummate the transaction, the Company formed Limoneira Lewis Community Builders, LLC (“LLCB”) as the development entity, contributed its East Area I property to LLCB and sold a 50 % interest in LLCB to Lewis for $ 20,000,000 .

The Company and the joint venture also entered into a Retained Property Development Agreement on the Transaction Date (the "Retained Property Agreement").

Under the terms of the Retained Property Agreement, the joint venture will transfer certain contributed East Area I property, which is entitled for commercial development, back to the Company (the "Retained Property") and arranged for the design and construction of certain improvements to the Retained Property, subject to certain reimbursements by the Company.

The Company and LLCB also entered into a Retained Property Development Agreement on the Transaction Date (the "Retained Property Agreement").

Under the terms of the Retained Property Agreement, LLCB transferred certain contributed East Area I property, which is entitled for commercial development, back to the Company (the "Retained Property") and arranged for the design and construction of certain improvements to the Retained Property, subject to certain reimbursements by the Company.

The balance in Retained Property and East Area II includes estimated costs incurred by and reimbursable to LLCB of $ 3,444,000 and $ 5,771,000 at October 31, 2022 and 2021, respectively, which is included in payables to related parties.

4 unchanged sentences

The Loan contains certain customary default provisions and LLCB may prepay any amounts outstanding under the Loan without penalty.

The joint venture had an outstanding balance of zero as of October 31, 2021.

The Loan had an outstanding balance of $ 4,500,000 as of October 31, 2022.

The Loan has a one year extension option through February 22, 2024 subject to terms and conditions as defined in the agreement, with the maximum borrowing amount reduced to $ 35,000,000 during the extension period.

In December 2022, LLCB exercised the extension option.

In February 2018, certain principals from Lewis and by the Company guaranteed the obligations under the Loan.

The guarantee shall continue in effect until all of the Loan obligations are fully paid and the guarantors are jointly and severally liable for all Loan obligations in the event of default by LLCB.

The guarantors are jointly and severally liable for all Loan obligations in the event of default by LLCB.

The guarantee continues in effect until all of the Loan obligations are fully paid.

The $ 1,080,000 estimated value of the guarantee was recorded in the Company’s consolidated balance sheets and is included in other long-term liabilities with a corresponding value in equity in investments.

The extension had no impact on the Company's guarantee value.

Additionally, a Reimbursement Agreement was executed between the Lewis guarantors and the Company, which provides for unpaid liabilities of LLCB to be shared pro-rata by the Lewis guarantors and the Company in proportion to their percentage interest in the joint venture.

In February 2020, the Company and Lewis each loaned $ 1,800,000 to LLCB at an interest rate of 4.6 %, which was repaid in June 2020.

Through October 31, 2021, the joint venture has closed sales of the initial residential lots representing 586 residential units.

Other Real Estate Development Projects

The remaining real estate development parcel within the Templeton Santa Barbara, LLC project is described as Sevilla.

In fiscal year 2020, the Company entered into an agreement to sell its Sevilla property for $ 2,700,000 , which is expected to close in the second quarter of fiscal year 2022.

After transaction and other costs, the Company expects to receive cash proceeds of approximately $ 2,550,000 and recognize an immaterial gain upon closing.

At October 31, 2021 and 2020, the $ 2,543,000 carrying value of the property was classified as held for sale and included in prepaid expenses and other current assets.

During December 2017, the Company sold its Centennial property with a net book value of $ 2,983,000 for $ 3,250,000 .

The Company received cash and a $ 3,000,000 promissory note secured by the property for the balance of the purchase.

The promissory note was originally scheduled to mature in December 2019 but has been periodically extended with principal payments totaling $ 400,000 received through October 31, 2021.

In November 2021, the promissory note was further extended to June 30, 2022 upon making a principal paydown of $ 250,000 , which was paid in November 2021, and revising the interest rate to 4.00 % per annum, with an option to further extend the maturity date of the promissory note to September 30, 2022 upon making an additional principal paydown of $ 250,000 .

At October 31, 2021, the net carrying value of the note was $ 2,600,000 and classified in prepaid expenses and other current assets.

In October 2022, the Company entered into a joint venture with Lewis for the development of the Retained Property.

The Company formed LLCB II, LLC ("LLCB II") as the development entity, contributed the Retained Property to the joint venture and sold a 50 % interest to Lewis for $ 7,975,000 .

After transaction costs, the Company received net proceeds of $ 7,917,000 and recorded a gain on the transaction of $ 4,652,000 , of which $ 465,000 was deferred and $ 4,187,000 is included in (gain) loss on disposal of assets in the consolidated statements of operations.

The joint venture partners will share in the capital contributions to fund project costs until loan proceeds and/or revenues are sufficient to fund the project.

In connection with the closing, the Company and Lewis amended LLCB’s Limited Liability Company Agreement to provide that LLCB is to include the processing of final approval for additional residential units to be developed and constructed on the Retained Property.

Through October 31, 2022, LLCB has closed sales of the initial residential lots representing 586 residential units.

LIMONEIRA COMPANY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

Real Estate Development (continued)

Other Real Estate Development Projects

In fiscal year 2020, the Company entered into an agreement to sell its Sevilla property for $ 2,700,000 , which closed in the first quarter of fiscal year 2023.

After transaction and other costs, the Company received cash proceeds of approximately $ 2,577,000 .

During fiscal year 2022, the Company incurred additional costs to prepare the asset for sale, of which $ 127,000 were capitalized and $ 153,000 were recorded in (gain) loss on disposal of assets.

The carrying value of the property at October 31, 2022 and 2021, was $ 2,670,000 and $ 2,543,000 , respectively, and was classified as held for sale and included in prepaid expenses and other current assets.

In December 2017, the Company sold its Centennial property with a net book value of $ 2,983,000 for $ 3,250,000 .

The Company received cash and a $ 3,000,000 promissory note secured by the property for the balance of the purchase.

The promissory note was originally scheduled to mature in December 2019, but was periodically extended with principal payments totaling $ 400,000 received through October 31, 2021.

In fiscal year 2022, the promissory note was paid in full and the deferred gain of $ 161,000 was recorded in (gain) loss on disposal of assets.

Equity in Investments

6 unchanged sentences

Del Mar markets lemons through the Company pursuant to its customary marketing agreements and the amount of lemons procured from Del Mar was $ 1,568,000 , $ 1,681,000 and $ 1,037,000 in fiscal years 2022, 2021 and 2020, respectively.

Fruit proceeds due to Del Mar were $ 694,000 and $ 334,000 at October 31, 2021 and 2020, respectively, and are included in grower’s payable in the accompanying consolidated balance sheets.

Fruit proceeds due to Del Mar were $ 703,000 and $ 694,000 at October 31, 2022 and 2021, respectively, and are included in growers and suppliers payable in the accompanying consolidated balance sheets.

Romney Property Partnership

4 unchanged sentences

Net profits, losses and cash flows of Romney are shared by the Company, which receives 75 % and the individual, who receives 25 %.

The Company currently has a 47 % equity interest in Rosales S.A, (“Rosales”) of which 35 % was acquired in fiscal 2014 and an additional 12 % interest was acquired with the purchase of PDA in fiscal 2017.

The Company currently has a 47 % equity interest in Rosales S.A, (“Rosales”) of which 35 % was acquired in fiscal year 2014 and an additional 12 % interest was acquired with the purchase of PDA in fiscal year 2017.

Rosales is a citrus packing, marketing and sales business located in La Serena, Chile.

6 unchanged sentences

An additional $ 925,000 of basis differences were identified with the February 2017 PDA acquisition, including $ 143,000 of equity method goodwill.

The $ 2,122,000 in basis differences exclusive of goodwill is being amortized over the estimated life of the underlying intangible assets as a reduction in the equity investment and an expense included in equity in earnings (losses) of investments.

Amortization amounted to $ 180,000 , $ 180,000 and $ 298,000 for fiscal years 2021, 2020 and 2019, respectively, and is estimated to be approximately $ 118,000 $ 87,000 and $ 76,000 per year for years ending October 31, 2022 through October 31, 2024, respectively, and immaterial thereafter.

The Company recognized $ 3,405,000 , $ 3,975,000 and $ 3,741,000 of lemon sales to Rosales in fiscal years 2021, 2020 and 2019, respectively.

In fiscal years 2021, 2020 and 2019, the aggregate amount of lemons and oranges procured from Rosales was $ 5,304,000 , $ 3,190,000 and $ 4,315,000 , respectively.

Amounts due from (to) Rosales were $ 1,570,000 and $( 954,000 ) at October 31, 2021 and 2020, respectively, and are included in receivables/other from related parties and payables to related parties, respectively.

Amortization amounted to $ 118,000 , $ 180,000 and $ 180,000 for fiscal years 2022, 2021 and 2020, respectively, and is estimated to be approximately $ 87,000 and $ 76,000 per year for years ending October 31, 2023 and 2024, respectively, and immaterial thereafter.

LIMONEIRA COMPANY

1 unchanged sentence

Equity in Investments (continued)

Rosales (continued)

The Company recognized $ 3,615,000 , $ 3,405,000 and $ 3,975,000 of lemon sales to Rosales in fiscal years 2022, 2021 and 2020, respectively.

In fiscal years 2022, 2021 and 2020, the aggregate amount of lemons and oranges procured from Rosales was $ 3,821,000 , $ 5,304,000 and $ 3,190,000 , respectively.

Amounts due from Rosales were $ 270,000 and $ 1,570,000 at October 31, 2022 and 2021, respectively, and are included in receivables/other from related parties.

Limoneira Lewis Community Builders, LLC (“LLCB”)

1 unchanged sentence

In addition to the assessment performed by the Company of its investment in LLCB under the requirements of Regulation S-X Rule 4-08(g), the Company also assessed its investment in LLCB under the requirements of Regulation S-X Rule 3-09(b).

LLCB was deemed significant for the years ended October 31, 2021 and 2019 but was not deemed significant for the year ended October 31, 2020.

LLCB was not deemed significant for the years ended October 31, 2022 and 2020 but was significant for the year ended October 31, 2021.

Therefore, the audited financial statements of LLCB for the years ended October 31, 2022, 2021 and 2020 are provided as exhibits to this document to comply with this rule.

3 unchanged sentences

The Company's share of LLCB's net income for fiscal years 2022, 2021 and 2020 prior to basis amortization was $ 1,015,000 , $ 4,508,000 and 1,386,000 , respectively.

LLCB II, LLC (“LLCB II”)

As described in Note 5 - Real Estate Development, in October 2022, the Company formed a joint venture with Lewis for the residential development of its Retained Property.

Control is shared with Lewis, therefore the Company's investment in LLCB II is accounted for using the equity method of accounting.

The following is financial information of the equity method investees for fiscal years 2022, 2021 and 2020 (in thousands):

2021 Del Mar Romney Rosales LLCB

2022 Del Mar Romney Rosales LLCB LLCB II

Current assets $ 654 $ — $ 3,478 $ 116,596 $ 16,051

10 unchanged sentences

Revenues $ 2,059 $ 17 $ 9,862 $ 42,853 $ —

Operating (loss) income $ ( 109 ) $ ( 2 ) $ 1,216 $ 2,615

Net (loss) income $ ( 109 ) $ ( 2 ) $ 476 $ 2,615

Operating income (loss) $ 1,052 $ ( 4 ) $ 438 $ 9,087 $ —

Net income (loss) $ 1,052 $ ( 4 ) $ 35 $ 9,087 $ —

Revenues $ 930 $ 20 $ 10,097 $ 25,906 $ —

5 unchanged sentences

The Company’s investment and equity in earnings (losses) of the equity method investees are as follows (in thousands):

Del Mar Romney Rosales LLCB Total

Del Mar Romney Rosales LLCB LLCB II Total

Investment balance October 31, 2019 $ 1,950 $ 512 $ 1,745 $ 54,016 $ — $ 58,223

Equity earnings (losses) ( 30 ) ( 1 ) 44 326 — 339

Cash distributions ( 351 ) — ( 283 ) — ( 634 )

Investment contributions — — — 2,800 — 2,800

Capitalized interest adjustment — — — ( 267 ) ( 267 )

Reclassification of sale and leaseback deferral — — — 33,353 33,353

Foreign currency adjustments — — ( 148 ) — — ( 148 )

Investment balance October 31, 2020 1,920 511 1,641 57,142 — 61,214

Equity earnings (losses) 296 ( 3 ) ( 164 ) 3,074 — 3,203

Investment contributions — — — 2,800 2,800

Cash distributions ( 219 ) — ( 106 ) — — ( 325 )

Foreign currency adjustments — — ( 20 ) — — ( 20 )

2 unchanged sentences

Cash distributions ( 483 ) — — — — ( 483 )

Investment contributions — — — — 8,023 8,023

Foreign currency adjustments — — ( 98 ) — — ( 98 )

4 unchanged sentences

Balance at October 31, 2020 $ 1,535

Trapani Fresh purchase price adjustment ( 297 )

Foreign currency translation adjustment ( 8 )

2 unchanged sentences

Balance at October 31, 2022 $ 1,506

See Note 3 - Acquisitions for additional information regarding the Trapani Fresh purchase price adjustment.

Goodwill is tested for impairment on an annual basis or when an event or changes in circumstances indicate that its carrying value may not be recoverable.

7 unchanged sentences

Goodwill and Intangible Assets, Net (continued)

Intangible assets consisted of the following as of October 31, 2021 and 2020 (in thousands):

October 31, 2021 October 31, 2020

Intangible assets consisted of the following as of October 31 (in thousands):

Gross Carrying Amount Accumulated Amortization Net Carrying Amount Weighted Average Useful Life in Years Gross Carrying Amount Accumulated Amortization Net Carrying Amount Weighted Average Useful Life in Years

15 unchanged sentences

Property taxes 664 676

Lemon and orange supplier payables — 1,346

Operating expenses 2,341 1,203

8 unchanged sentences

The interest rate of the revolving line of credit is variable based on the one-month London Interbank Offered Rate (“LIBOR”), which was 3.12 % at October 31, 2022, plus 1.85 %.

The interest rate for the $ 40.0 million outstanding balance of the non-revolving line of credit was fixed at 4.77 % through July 1, 2022, 3.57 % through July 1, 2025 and variable interest thereafter.

The interest rate for the $ 40.0 million outstanding balance of the non-revolving line of credit was fixed at 4.77 % through July 1, 2022, is 3.57 % through July 1, 2025 and variable thereafter.

Interest is payable monthly and the principal is due in full on July 1, 2026.

1 unchanged sentence

Farm Credit West term loan:

Effective July 1, 2020, the interest rate was fixed at 2.48 %.

The loan is payable in quarterly installments through November 2022.

The loan was repaid in September 2022.

Farm Credit West term loan:

Effective July 1, 2020, the interest rate was fixed at 3.24 %.

The interest rate is fixed at 3.24 %.

The loan is payable in monthly installments through October 2035.

Farm Credit West term loan:

Effective July 1, 2020, the interest rate was fixed at 3.24 %.

The interest rate is fixed at 3.24 %.

The loan is payable in monthly installments through March 2036.

Farm Credit West term loan:

Effective July 1, 2020, the interest rate was fixed at 2.77 % until July 1, 2025, becoming variable for the remainder of the loan.

The loan is payable in monthly installments though March 2036.

Wells Fargo term loan:

The loan was repaid in August 2021 with proceeds from the Farm Credit West term loan.

The interest rate is fixed at 2.77 % until July 1, 2025, becoming variable for the remainder of the loan.

The loan is payable in monthly installments through March 2036.

Farm Credit West term loan:

Effective August 2, 2021, the interest rate was fixed at 3.19 %.

The interest rate is fixed at 3.19 %.

The loan is payable in monthly installments through September 2026.

3 unchanged sentences

Note Payable:

The interest rate ranges from 5.00 % to 7.00 % and was 6.50 % at October 31, 2021.

The loan includes interest-only monthly payments and principal is due in February 2023.

The Note Payable was repaid in October 2022.

Banco de Chile COVID-19 loans:

The interest rates are fixed at 3.48 %.

The loans are payable in monthly installments beginning February 2021 through September 2024.

The loans are payable in monthly installments through September 2024.

Banco de Chile COVID-19 loans:

The interest rates are fixed at 3.48 % and 4.26 %.

The loans are payable in monthly installments beginning September 2021 through September 2026.

The loans are payable in monthly installments through September 2026.

Subtotal 105,902 132,956

3 unchanged sentences

Long-term debt, less current portion $ 104,076 $ 130,353

In August 2021, the Company entered into an equipment finance agreement (the "FCW term loan") with Farm Credit West, PCA (the “Lender”) and used the proceeds to pay off the Wells Fargo term loan.

The FCW term loan has a fixed interest rate of 3.19 % and is payable in monthly installments through September 2026.

There were no unamortized debt financing costs related to the Wells Fargo term loan and no capitalized financing costs related to the FCW term loan.

In June 2021, the Company entered into a Master Loan Agreement (the “MLA”) with Lender dated June 1, 2021, together with a revolving credit facility supplement (the “Revolving Credit Supplement”), a non-revolving credit facility supplement (the “Non-Revolving Credit Supplement,” and together with the Revolving Credit Supplement, the “Supplements”) and an agreement to convert to fixed interest rate for a period of time as described in the table above ("Fixed Interest Rate Agreement").

The Company entered into a Master Loan Agreement (the “MLA”) with Farm Credit West, PCA (the "Lender") dated June 1, 2021, together with a revolving credit facility supplement (the “Revolving Credit Supplement”), a non-revolving credit facility supplement (the “Non-Revolving Credit Supplement,” and together with the Revolving Credit Supplement, the “Supplements”) and an agreement to convert to a fixed interest rate for a period of time as described in the table above ("Fixed Interest Rate Agreement").

The MLA governs the terms of the Supplements.

The MLA amends and restates the previous Master Loan Agreement between the Company and the Lender, dated June 19, 2017 and extends the principal repayment to July 1, 2026.

Debt financing costs related to the MLA agreement were immaterial.

LIMONEIRA COMPANY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

Long-Term Debt (continued)

In June 2020, the Company and Farm Credit West entered into a Conversion Agreement to convert the term loans noted above to fixed interest rate loans effective July 1, 2020.

No changes were made to the outstanding principal balances on the term loans and the Company made no cash repayments of principal.

The rates were subject to a prepayment restriction period for a portion of the fixed rate term that expired on January 1, 2021.

The Company may prepay any amounts without penalty.

In March 2020, the Company entered into a revolving equity line of credit promissory note and loan agreement with Farm Credit West for a $ 15,000,000 Revolving Equity Line of Credit (the "RELOC") secured by a first lien on the Windfall Investors, LLC property.

The MLA amends and restates the previous Master Loan Agreement between the Company and the Lender and extends the principal repayment to July 1, 2026.

In March 2020, the Company entered into a revolving equity line of credit promissory note and loan agreement with the Lender for a $ 15,000,000 Revolving Equity Line of Credit (the "RELOC") secured by a first lien on the Windfall Investors, LLC property.

The RELOC matures in 2043 and features a 3 -year draw period followed by 20 years of fully amortized loan payments.

The interest rate is variable with monthly interest-only payments during the 3 -year draw period and monthly principal and interest payments thereafter.

The Supplements and RELOC provide aggregate borrowing capacity of $ 130,000,000 comprised of $ 75,000,000 under the Revolving Credit Supplement, $ 40,000,000 under the Non-Revolving Credit Supplement and $ 15,000,000 under the RELOC.

As of October 31, 2021, the Company's outstanding borrowings under the revolving and non-revolving lines of credit were $ 111,293,000 and it had $ 18,707,000 of availability.

For amounts outstanding under both Supplements, interest will begin to be charged on the date the Lender disburses principal and will continue until the outstanding indebtedness under the Supplements is paid in full with interest.

The initial interest rate in effect under the Revolving Credit Supplement was 1.69 % per annum, and was automatically adjusted commencing July 1, 2021 and on the first day of each month thereafter.

The interest rate for any amount outstanding under the Revolving Credit Supplement will be based on the one-month LIBOR rate plus or minus an applicable margin.

The applicable margin will range from 1.75 % to 2.35 % depending on the ratio of current assets, plus the remaining available commitment divided by current liabilities.

On July 1, 2022, and on each one-year anniversary thereafter, the Company has the option to convert the interest rate in use under the Revolving Credit Supplement from the preceding LIBOR-based calculation to a variable interest rate.

Any amounts outstanding under the Revolving Credit Supplement will be due and payable in full on July 1, 2026.

As of October 31, 2022, the Company's outstanding borrowings under the revolving and non-revolving lines of credit were $ 88,521,000 and it had $ 41,479,000 available to borrow.

The interest rate in effect under the Revolving Credit Supplement automatically adjusted commencing July 1, 2021 and on the first day of each month thereafter.

The interest rate for any amount outstanding under the Revolving Credit Supplement is based on the one-month LIBOR rate plus or minus an applicable margin.

The applicable margin ranges from 1.75 % to 2.35 % depending on the ratio of current assets, plus the remaining available commitment divided by current liabilities.

On each one year anniversary of July 1, the Company has the option to convert the interest rate in use under the Revolving Credit Supplement from the preceding LIBOR-based calculation to a variable interest rate.

The Company may prepay any amounts outstanding under the Revolving Credit Supplement without penalty.

The initial interest rate in effect under the Non-Revolving Credit Supplement is a fixed interest rate of 4.77 % through July 1, 2022 and then will convert to a fixed interest rate of 3.57 % per year until July 1, 2025 (the “Fixed Rate Term”).

Thereafter, the interest rate will convert to a variable interest rate established by the Lender corresponding to the corresponding interest rate group.

Any amount outstanding under the Non-Revolving Credit Supplement is due and payable in full on July 1, 2026.

LIMONEIRA COMPANY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

Long-Term Debt (continued)

The initial interest rate in effect under the Non-Revolving Credit Supplement was a fixed interest rate of 4.77 % through July 1, 2022 and then converted to a fixed interest rate of 3.57 % per year until July 1, 2025 (the “Fixed Rate Term”).

Thereafter, the interest rate will convert to a variable interest rate established by the Lender corresponding to the applicable interest rate group.

The Company may not prepay any amounts under the outstanding Non-Revolving Credit Supplement during the Fixed Rate Term.

Thereafter, the Company may prepay any amounts outstanding under the Non-Revolving Credit Supplement, provided that a fee equal to 0.50 % of the amount prepaid and any other cost or loss suffered by the Lender must be paid with any prepayment.

All indebtedness under the MLA and RELOC, including any indebtedness under the Supplements, is secured by a first lien on Company-owned stock or participation certificates, Company funds maintained with Lender, Lender’s unallocated surplus, and certain of the Company’s agricultural properties in Tulare and Ventura counties in California and certain of the Company’s building fixtures and improvements and investments in mutual water companies associated with the pledged agricultural properties.

The interest rate in effect under the RELOC is a variable interest rate established by the Lender corresponding to the applicable interest rate group, which was 5.50 % as of October 31, 2022.

The interest rate may be adjusted automatically under the provisions of the Lender's variable interest rate plan.

The Company may prepay any amounts outstanding under the RELOC without penalty.

All indebtedness under the MLA and RELOC, including any indebtedness under the Supplements, is secured by a first lien on Company-owned stock or participation certificates, Company funds maintained with the Lender, the Lender’s unallocated surplus, and certain of the Company’s agricultural properties in Tulare and Ventura Counties in California and certain of the Company’s building fixtures and improvements and investments in mutual water companies associated with the pledged agricultural properties.

The MLA includes customary default provisions that provide should an event of default occur, the Lender, at its option, may declare all or any portion of the indebtedness under the MLA to be immediately due and payable without demand, notice of nonpayment, protest or prior recourse to collateral, and terminate or suspend the Company’s right to draw or request funds on any loan or line of credit.

The MLA subjects the Company to affirmative and restrictive covenants including, among other customary covenants, financial reporting requirements, requirements to maintain and repair any collateral, restrictions on the sale of assets, restrictions on the use of proceeds, prohibitions on the incurrence of additional debt and restrictions on the purchase or sale of major assets of the Company’s business.

The Company is also subject to a financial covenant that requires it to maintain compliance with a specified debt service coverage ratio on an annual basis.

In December 2021, the Lender modified the covenant to defer measurement at October 31, 2021 and revert to a debt service coverage ratio of 1.25 :1.0 measured as of October 31, 2022.

The Company received annual cash patronage dividends from Farm Credit West of $ 1,170,000 , $ 1,566,000 and $ 853,000 in fiscal years 2021, 2020 and 2019, respectively.

In August 2021, PDA and San Pablo entered into term loan agreements for an aggregate amount of approximately $ 652,000 .

These small business loans are guaranteed by the Chilean government in response to economic instability caused by the COVID-19 pandemic.

The unsecured loans mature in August 2025 and September 2026, bear interest at fixed rates of 3.48 % and 4.26 %, respectively, and are payable in monthly installments beginning September 2021.

LIMONEIRA COMPANY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

Long-Term Debt (continued)

In July and September 2020, PDA and San Pablo entered into term loan agreements for an aggregate amount of approximately $ 522,000 .

These small business loans are guaranteed by the Chilean government in response to economic instability caused by the COVID-19 pandemic.

The unsecured loans mature in July 2024 and September 2024, bear interest at fixed rates of 3.48 % and are payable in monthly installments beginning February 2021 and April 2021, respectively.

The Company is also subject to a financial covenant that requires it to maintain compliance with a specific debt service coverage ratio greater than or equal to 1.25 :1.0 when measured at October 31, 2022 and annually thereafter.

We were in compliance as of October 31, 2022.

The Company received annual cash patronage dividends from the Lender of $ 1,582,000 , $ 1,170,000 and $ 1,566,000 in fiscal years 2022, 2021 and 2020, respectively.

Interest is capitalized on non-bearing orchards, real estate development projects and significant construction in progress.

6 unchanged sentences

Thereafter 9,476

LIMONEIRA COMPANY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

Other Long-Term Liabilities

Other long-term liabilities consist of the following at October 31 (in thousands):

Minimum pension liability $ 2,272 $ 847

Loan guarantee 1,080 1,080

Leases 5,062 2,532

Other 1,393 42

$ 9,807 $ 4,501

Lessor Arrangements

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The following table presents the components of the Company’s operating lease portfolio included in property, plant and equipment, net as of October 31 (in thousands):

Land $ 3,516 $ 3,522

Land and land improvements $ 13,619 $ 3,516

Buildings, equipment and building improvements 19,983 18,712

Orchards 8,410 —

accumulated depreciation ( 7,912 ) ( 6,331 )

6 unchanged sentences

Total lease revenue $ 5,324 $ 4,646

LIMONEIRA COMPANY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

Leases (continued)

Lessor Arrangements (continued)

The future minimum lease payments to be received by the Company related to these operating lease agreements as of October 31, 2022 are as follows (in thousands):

1 unchanged sentence

Total $ 4,174

The Company’s rental operations revenue included contingent rental revenue of $ 355,000 for fiscal year 2019.

Lessee Arrangements

1 unchanged sentence

These lease contracts are classified as either operating or finance leases.

The Company’s lease contracts are generally for agricultural land and packinghouse equipment with remaining lease terms ranging from one to 16 years, with various term extensions available.

The Company’s lease contracts are generally for agricultural land and packinghouse facilities and equipment with remaining lease terms ranging from one to 15 years, with various term extensions available.

The Company’s lease agreements do not contain any residual value guarantees or material restrictive covenants.

Leases with an initial term of 12 months or less are not recorded on the balance sheet and the Company recognizes lease expense for these leases on a straight-line basis over the lease term.

Operating lease costs were $ 606,000 and $ 559,000 and variable lease costs were $ 288,000 and immaterial, for the fiscal years 2021 and 2020, respectively, which are primarily included in agribusiness costs and expenses in the Company’s consolidated statements of operations.

Finance lease costs and short term lease costs were immaterial for both years.

Leases with an initial term of

LIMONEIRA COMPANY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

Leases (continued)

Lessee Arrangements (continued)

12 months or less are not recorded on the balance sheet and the Company recognizes lease expense for these leases on a straight-line basis over the lease term.

Operating lease costs were $ 537,000 and $ 606,000 and variable lease costs were $ 242,000 and $ 288,000 , for the fiscal years 2022 and 2021, respectively, which are primarily included in agribusiness costs and expenses in the Company’s consolidated statements of operations.

Finance lease costs and short term lease costs were $ 154,000 and $ 212,000 for fiscal year 2022, respectively, and were immaterial for fiscal year 2021.

Supplemental balance sheet information related to leases consists of the following as of October 31 (in thousands):

7 unchanged sentences

Non-current finance lease liabilities Other long-term liabilities 715 884

Total operating lease liabilities $ 3,269 $ 2,131

$ 7,222 $ 3,269

Weighted-average remaining lease term (in years):

4 unchanged sentences

Finance leases 3.5 % 3.3 %

LIMONEIRA COMPANY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

Leases (continued)

Lessee Arrangements (continued)

Supplemental cash flow information related to leases consists of the following (in thousands):

6 unchanged sentences

Leased assets obtained in exchange for new finance lease liabilities $ 68 $ 1,151

LIMONEIRA COMPANY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

Leases (continued)

Lessee Arrangements (continued)

Future minimum lease payments under non-cancellable leases for each of the subsequent five fiscal years and thereafter are as follows (in thousands), which excludes $ 470,000 of operating lease payments for leases that have been signed but not commenced:

9 unchanged sentences

Present value of lease liabilities $ 6,239 $ 983 $ 7,222

In addition to operating and finance lease commitments, the Company also has a contract for pollination services which does not meet the definition of a lease, with minimum future payments of $ 307,000 and $ 51,000 in fiscal years 2022 and 2023, respectively.

Total lease expense for fiscal year 2019 was $ 733,000 , which was included in agribusiness costs and expenses in the Company’s consolidated statements of operations.

In addition to operating and finance lease commitments, the Company also has financing transactions and a contract for pollination services, which do not meet the definition of a lease, with minimum future payments of $ 275,000 in fiscal year 2023, $ 224,000 in fiscal years 2024, 2025 and 2026 and $ 37,000 in fiscal year 2027.

Earnings Per Share

3 unchanged sentences

The computations for basic and diluted net loss per common share are as follows (in thousands, except per share amounts):

LIMONEIRA COMPANY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

Earnings Per Share (continued)

Year ended October 31,

12 unchanged sentences

Diluted net loss per common share $ ( 0.04 ) $ ( 0.23 ) $ ( 0.96 )

LIMONEIRA COMPANY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

Earnings Per Share (continued)

Diluted net loss per common share is calculated using the more dilutive method of either the two-class method or the treasury stock method.

1 unchanged sentence

The Company’s unvested, restricted stock awards qualify as participating shares.

The Company excluded 117,000 , 164,000 and 119,000 , unvested, restricted shares, as calculated under the treasury stock method, from its computation of diluted losses per share for the fiscal years ended October 31, 2021, 2020 and 2019, respectively.

Diluted net loss per common share was calculated under the two-class method for the fiscal year ended October 31, 2022.

The Company excluded 117,000 and 164,000 , unvested, restricted shares, as calculated under the treasury stock method, from its computation of diluted net losses per share for the fiscal years ended October 31, 2021 and 2020, respectively.

Related-Party Transactions

The Company has transactions with equity method investments and various related-parties summarized in Note 8 - Equity in Investments and in the tables below (in thousands):

The Company has transactions with equity method investments and various related-parties summarized in Note 5 - Real Estate Development, Note 6 - Equity in Investments and in the tables below (in thousands):

October 31, 2022 October 31, 2021

2 unchanged sentences

2 Mutual water companies $ — $ 506 $ 133 $ — $ — $ 432 $ 40 $ —

3 Cooperative association $ — $ — $ 19 $ — $ — $ — $ 123 $ —

5 Cadiz / Fenner / WAM $ — $ 1,288 $ 446 $ 1,198 $ — $ 1,386 $ 273 $ 1,297

6 Colorado River Growers $ — $ — $ — $ — $ 81 $ — $ — $ —

8 FGF $ 2,965 $ 2,652 $ 837 $ — $ 4,598 $ 980 $ 832 $ —

9 LLCB $ 66 $ — $ 3,444 $ — $ — $ — $ 5,771 $ —

11 Third party growers $ — $ — $ 41 $ — $ — $ — $ — $ —

LIMONEIRA COMPANY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

Related-Party Transactions (continued)

Year Ended October 31, 2022 Year Ended October 31, 2021

Consolidated Statement of Operations Consolidated Statement of Operations

Ref Related-Party Net Revenue Agribusiness Net Revenue Rental Operations Agribusiness Expense and Other Dividends Paid Net Revenue Agribusiness Net Revenue Rental Operations Agribusiness Expense and Other Other Income, Net Dividends Paid

1 Employees $ — $ 869 $ — $ — $ — $ 814 $ — $ —

8 unchanged sentences

11 Third-party growers $ — $ — $ — $ — $ — $ — $ 147 $ —

12 Principal owner $ — $ — $ — $ 593 $ — $ — $ — $ —

Year Ended October 31, 2020

9 unchanged sentences

8 FGF $ 10,338 $ — $ 13,478 $ — $ —

11 Third party growers $ — $ — $ 10 $ — $ —

LIMONEIRA COMPANY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

Related-Party Transactions (continued)

(1) Employees - The Company rents certain of its residential housing assets to employees on a month-to-month basis and recorded rental income from employees.

There were no rental payments due from employees at October 31, 2021 and 2020.

(2) Mutual water companies - The Company has representation on the boards of directors of the mutual water companies in which the Company has investments, refer to Note 10 - Other Assets.

There were no material rental payments due from employees at October 31, 2022 and 2021.

(2) Mutual water companies - The Company has representation on the boards of directors of the mutual water companies in which the Company has investments, as well as other water districts.

Refer to Note 8 - Other Assets.

The Company recorded capital contributions, purchased water and water delivery services and had water payments due to the mutual water companies.

(3) Cooperative association - The Company has representation on the board of directors of a non-profit cooperative association that provides pest control services for the agricultural industry.

The Company purchased services and supplies from and had payments due to the cooperative association.

(4) Calavo - The Company had an investment in Calavo through March 2020 and has representation on the board of directors and Calavo has an investment in the Company.

The Company recorded dividend income on its investment in Calavo, paid dividends to Calavo and had avocado sales to Calavo.

Additionally, the Company leases office space to Calavo and purchases storage services from Calavo.

The Company purchased services and supplies from and had no payments due to the cooperative association.

(4) Calavo - Through January 2022, the Company had representation on the board of directors of Calavo.

Calavo owned common stock of the Company and the Company paid dividends on such common stock to Calavo.

Additionally, the Company leases office space to Calavo.

As of February 2022, Calavo is no longer a related party.

(5) Cadiz / Fenner / WAM - A member of the Company’s board of directors serves as the CEO, President and a member of the board of directors of Cadiz, Inc.

2 unchanged sentences

In 2016, Cadiz assigned this lease to Fenner Valley Farms, LLC (“Fenner”), a subsidiary of Water Asset Management, LLC (“WAM”).

An entity affiliated with WAM is the holder of 9,300 shares of Limoneira Company Series B-2 convertible preferred stock.

Upon the adoption of ASC 842, the Company recorded a ROU asset and corresponding lease liability.

LIMONEIRA COMPANY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

Related-Party Transactions (continued)

An affiliate of WAM is the holder of 9,300 shares of Limoneira Company Series B-2 convertible preferred stock.

Upon the adoption of ASC 842, the Company recorded a right-of-use, or ROU, asset and corresponding lease liability.

(6) Colorado River Growers, Inc.

3 unchanged sentences

(7) Yuma Mesa Irrigation and Drainage District (“YMIDD”) - The Company has representation on the board of directors of YMIDD.

The Company purchased water from YMIDD and had amounts payable to them for such purchases.

(8) FGF - The Company advances funds to FGF for fruit purchases, which are recorded as an asset until the sales occur and the remaining proceeds become due to FGF.

The Company purchased water from YMIDD and had no amounts payable to them for such purchases.

Additionally, the Compnay received fallowing revenue from YMIDD.

(8) FGF - In June 2021, the Company entered into an agreement, effective March 1, 2021, to sell and license certain assets of Trapani Fresh to FGF.

These assets consist of packing supplies and certain intangible assets related to the packing, marketing, and selling business of Trapani Fresh.

The total consideration to be received is approximately $ 3,900,000 over an 8-year term in 16 equal installments.

Payments to be received are secured by FGF’s interest in land parcels at the Santa Clara ranch and consist of a $ 1,200,000 note receivable and $ 2,700,000 of royalty payments.

There was no material gain or loss recognized on the transaction.

Trapani Fresh owns and operated the 1,200 -acre Santa Clara ranch and sold the lemons it grew to FGF, who packed, marketed, and sold the fruit to its export customers.

As a result of this transaction, Trapani Fresh recognized lemon revenues at the market price less packinghouse charges to harvest, pack and market the fruit.

Effective November 1, 2021, the Company leases Finca Santa Clara to FGF and records rental revenue related to the leased land.

The Company advances funds to FGF for fruit purchases, which are recorded as an asset until the sales occur and the remaining proceeds become due to FGF.

Additionally, FGF provided farming, packing, by-product processing and administrative services to Trapani Fresh.

The Company had a receivable from FGF for lemon sales and the sale of packing supplies and a payable due to FGF for fruit purchases and services.

Effective March 1, 2021, Trapani Fresh sells the lemons it grows to FGF, who packs, markets, and sells the fruit to its customers.

The Company also records revenue related to the licensing of intangible assets to FGF.

The Company records revenue related to the licensing of intangible assets to FGF.

(9) LLCB - Refer to Note 5 - Real Estate Development.

(10) Freska - A member of the Company's board of directors is a majority shareholder of Freska Produce International, LLC ("Freska").

The Company had avocado sales to Freska.

(11) Third party growers - A member of the Company’s board of directors markets lemons through the Company and the Company had payments due to the member of such lemon procurement.

A reconciliation of income before income taxes for domestic and foreign locations for the years ended October 31, 2021, 2020 and 2019 are as follows (in thousands):

(10) Freska - A former member of the Company's board of directors is a majority shareholder of Freska Produce International, LLC ("Freska").

The Company had avocado sales to Freska and corresponding receivables for such sales.

The former board member resigned effective June 14, 2022 and Freska is no longer a related-party.

(11) Third-party growers - A former member of the Company's board of directors marketed lemons through the Company.

The former board member resigned effective June 14, 2022 and is no longer a related-party.

LIMONEIRA COMPANY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

Related-Party Transactions (continued)

(12) Principal owner - The Company has one principal owner with ownership shares over 10% and paid dividends to such owner.

A reconciliation of income (loss) before income taxes for domestic and foreign locations for the years ended October 31, 2022, 2021 and 2020 are as follows (in thousands):

2022 2021 2020

1 unchanged sentence

Foreign ( 1,562 ) ( 2,704 ) ( 3,240 )

Income before income taxes $ ( 4,163 ) $ ( 26,435 ) $ ( 6,563 )

Income (loss) before income taxes $ 349 $ ( 4,163 ) $ ( 26,435 )

The components of the provisions for income taxes for fiscal years 2022, 2021 and 2020 are as follows (in thousands):

3 unchanged sentences

Foreign ( 4 ) — 194

Total current benefit (provision) 77 6,361 324

Total current (provision) benefit ( 275 ) 77 6,361

Federal ( 477 ) ( 17 ) 640

1 unchanged sentence

Foreign 56 79 316

Total deferred benefit 189 2,133 773

Total income tax benefit $ 266 $ 8,494 $ 1,097

Deferred income taxes reflect the net of temporary differences between the carrying amount of the assets and liabilities for financial reporting and income tax purposes.

The components of deferred income tax assets at October 31, 2021 and 2020 are as follows (in thousands):

Total deferred (provision) benefit ( 548 ) 189 2,133

Total income tax (provision) benefit $ ( 823 ) $ 266 $ 8,494

LIMONEIRA COMPANY

1 unchanged sentence

Income Taxes (continued)

Deferred income taxes reflect the net of temporary differences between the carrying amount of the assets and liabilities for financial reporting and income tax purposes.

The components of deferred income tax assets at October 31, 2022 and 2021 are as follows (in thousands):

Deferred income tax assets:

3 unchanged sentences

Minimum pension liability adjustment 621 231

Amortization — 325

Other assets 151 240

21 unchanged sentences

The Company has recorded a valuation allowance of $ 1,536,000 on the net deferred tax assets of its subsidiaries in Argentina and Chile as of October 31, 2022 as the Company does not believe it is more likely than not that these deferred tax assets will be realized due to the recent history of cumulative pre-tax book losses and lack of objectively verifiable future source of taxable income.

LIMONEIRA COMPANY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

Income Taxes (continued)

At October 31, 2022, the Company has recorded a deferred tax asset of $ 5,917,000 related to its federal, state, and foreign net operating loss carryforwards.

7 unchanged sentences

Argentina 1,670 10/31/2025

LIMONEIRA COMPANY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

Income Taxes (continued)

At October 31, 2021, the Company had disallowed federal and state interest expense carryforwards of approximately zero and $ 2,065,000 , respectively, that do not expire.

Because of the change of ownership provisions of the Tax Reform Act of 1986, use of a portion of the domestic net operating loss and disallowed interest expense carryforwards may be limited in future periods.

Further, a portion of the carryforwards may expire before being applied to reduce future income tax liabilities.

The provision for income taxes differs from the amount of income tax determined by applying U.S.

statutory federal income tax rate to pretax income as a result of the following differences (in thousands):

2022 2021 2020

4 unchanged sentences

Meals and entertainment — — % — — % ( 18 ) 0.1 %

Transaction costs — — — — ( 137 ) 2.1 %

Shared-based compensation ( 110 ) ( 31.2 ) % ( 217 ) 5.2 % — — %

6 unchanged sentences

Other permanent items ( 12 ) ( 3.5 ) % 235 ( 5.7 ) % 110 ( 0.4 ) %

Total income tax benefit $ 266 ( 6.4 ) % $ 8,494 ( 32.2 ) % $ 1,097 ( 17.1 ) %

Tax credit and others ( 73 ) ( 20.7 ) % — — % — — %

Total income tax (provision) benefit $ ( 823 ) ( 234.8 ) % $ 266 ( 6.4 ) % $ 8,494 ( 32.2 ) %

At October 31, 2022 and 2021, the Company had no unrecognized tax benefits.

3 unchanged sentences

There was no accrued interest or penalties associated with uncertain tax positions as of October 31, 2022.

On March 27, 2020, the Coronavirus Aid, Relief, and Economic Security Act (“CARES Act”) was signed into law.

The CARES Act includes numerous tax provisions and other stimulus measures, including temporary changes regarding the prior and future utilization of net operating losses, temporary changes to the prior and future limitations on interest deductions, temporary suspension of certain payment requirements for the employer portion of Social Security taxes, the creation of certain refundable employee retention credits, and technical corrections from prior tax legislation for tax depreciation of certain qualified improvement property.

The Company evaluated the impact of the CARES Act and recorded a tax benefit of $ 1,948,000 and an income tax refund of $ 5,801,000 due to its ability to carryback and obtain federal tax refund by utilizing net operating losses under the provisions of the CARES Act at October 31, 2021, of which $ 841,000 and $ 4,960,000 were received in October 2020 and December 2020, respectively.

An additional $ 948,000 of California state refunds were received in the third quarter of fiscal year 2021.

LIMONEIRA COMPANY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

Retirement Plans

2 unchanged sentences

Effective June 2004, the Company froze the Plan and no additional benefits accrued to participants subsequent to that date.

The Plan is administered by Wells Fargo Bank and Mercer Human Resource Consulting.

In fiscal year 2021, the Company decided to terminate the Plan effective December 31, 2021.

The Plan is funded consistent with the funding requirements of federal law and regulations.

The Plan is administered by Principal Bank and Mercer Human Resource Consulting.

In fiscal year 2021, the Company terminated the Plan effective December 31, 2021.

The Plan was funded consistent with the funding requirements of federal law and regulations.

There were no funding contributions during fiscal years 2022 or 2021.

Plan assets are invested in a group trust consisting primarily of pooled funds, mutual funds, short-term investment funds and cash.

LIMONEIRA COMPANY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

Retirement Plans (continued)

Plan assets are invested in a group trust consisting primarily of cash.

The investment policy and strategy has been established to provide a total investment return that will, over time, maintain purchasing power parity for the Plan’s variable benefits and keep the Plan funding at a reasonable level.

The long-term target asset allocations are Cash 1 % and Fixed Income 99 %.

The target asset allocation is 100 % cash.

The following tables set forth the Plan’s net periodic cost, changes in benefit obligation and Plan assets, funded status, amounts recognized in the Company’s consolidated balance sheets, additional year-end information and assumptions used in determining the benefit obligations and net periodic benefit cost.

5 unchanged sentences

Amortization of net loss 398 737

Settlement loss recognized 607 $ —

Net periodic benefit cost $ 1,777 $ 742

LIMONEIRA COMPANY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

Retirement Plans (continued)

Following is a summary of the Plan’s funded status as of October 31 (in thousands):

2 unchanged sentences

Administrative expenses 718 277

Plan settlements ( 3,604 ) —

Interest cost 520 550

Benefits paid ( 1,327 ) ( 1,210 )

Actuarial (gain) loss ( 858 ) 1,236

Expenses paid ( 643 ) ( 240 )

Actuarial gain ( 2,474 ) ( 858 )

Benefit obligation at end of year $ 14,607 $ 21,417

2 unchanged sentences

Actual return on plan assets ( 2,661 ) 2,668

Plan settlements ( 3,604 ) —

Benefits paid ( 1,327 ) ( 1,210 )

Expenses paid ( 643 ) ( 240 )

Fair value of plan assets at end of year $ 12,335 $ 20,570

12 unchanged sentences

Net deficit recognized in statements of financial position $ ( 2,272 ) $ ( 847 )

LIMONEIRA COMPANY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

Retirement Plans (continued)

Presented below are changes in accumulated other comprehensive income, before tax, in the Plan as of October 31, (in thousands):

Changes recognized in other comprehensive income:

Net (gain) loss arising during the year $ ( 2,658 ) $ 579

Net loss (gain) arising during the year $ 697 $ ( 2,658 )

Amortization of prior service cost ( 45 ) ( 45 )

1 unchanged sentence

Total recognized in other comprehensive income $ ( 353 ) $ ( 3,440 )

Total recognized in net periodic benefit and other comprehensive income $ ( 2,699 ) $ 508

Total recognized in net periodic benefit and other comprehensive loss (income) $ 1,424 $ ( 2,699 )

LIMONEIRA COMPANY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

Retirement Plans (continued)

The following assumptions, as of October 31, were used in determining benefit obligations and net periodic benefit cost ($ in thousands):

Weighted-average assumptions used to determine benefit obligations:

Discount rate 2.58 % 2.50 %

Discount rate NA 2.58 %

Assumptions used to determine net periodic benefit cost:

5 unchanged sentences

Fair value of plan assets $ 12,335 $ 20,570

Benefit payments are expected to be paid over the next 10 fiscal years as follows (in thousands):

2024 - 2026 —

Next five years —

Employer contributions of $ 2,500,000 and benefit payments of $ 14,607,000 are expected to be paid in fiscal year 2023.

The following table sets forth the Plan’s assets as of October 31, 2022, segregated by level using the hierarchy established by FASB ASC 820, Fair Value Measurements and Disclosures (in thousands):

1 unchanged sentence

Cash and cash equivalents $ 12,302 $ — $ — $ 12,302

Pooled funds — 20,320 — 20,320

Accrued income — 33 — 33

$ 12,302 $ 33 $ — $ 12,335

4 unchanged sentences

During fiscal years 2022, 2021 and 2020, the Company contributed to the plan and recognized expenses of $ 445,000 , $ 546,000 and $ 1,107,000 , respectively.

LIMONEIRA COMPANY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

Commitments and Contingencies

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Legal claims are inherently uncertain, however, and it is possible that the Company’s business, financial condition, liquidity and/or operating results could be adversely affected in the future by legal proceedings.

The Company is party to a lawsuit, initiated on March 27, 2018, against Southern California Edison in Superior Court of the State of California, County of Los Angeles whereby the Company is claiming unspecified damages, attorneys' fees and other costs, as a result from the Thomas Fire in fiscal year 2018.

While the outcome of this lawsuit is uncertain, the Company believes its claim for damages is valid.

Series B and Series B-2 Preferred Stock

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Such dividends are payable quarterly on the first day of January, April, July and October in each year.

LIMONEIRA COMPANY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

Series B and Series B-2 Preferred Stock (continued)

Series B Convertible Preferred Stock (continued)

Voting Rights:

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Because the Series B Stock may be redeemed by holders of the shares at their discretion beginning July 1, 2017, the redemption is outside the control of the Company and accordingly, the Series B Stock has been classified as temporary equity.

During fiscal years 2015 thru 2017, a total of 15,210 shares of Series B preferred stock were converted into 190,124 shares of common stock.

Series B-2 Convertible Preferred Stock

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Such dividends are payable quarterly on the first day of January, April, July and October in each year.

LIMONEIRA COMPANY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

Series B and Series B-2 Preferred Stock (continued)

Series B-2 Convertible Preferred Stock

Liquidation Rights:

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Because the Series B-2 Preferred Stock may be redeemed by WPI at its discretion with the exercise of the Option Agreement, the redemption is outside the control of the Company and accordingly, the Series B-2 Preferred Stock has been classified as temporary equity.

LIMONEIRA COMPANY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

Series B and Series B-2 Preferred Stock (continued)

Series B-2 Convertible Preferred Stock (continued)

In connection with the sale of the Series B-2 Preferred Stock, Associated Citrus Packers, Inc.

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Stock-based compensation

The Company has a stock-based compensation plan (the “Stock Plan”) that allows for the grant of common stock of the Company to members of management, key executives and non-employee directors.

The Company has a stock-based compensation plan that allows for the grant of common stock of the Company to members of management, key executives and non-employee directors.

The fair value of such awards is based on the fair value of the Company's stock on the date of grant and all are classified as equity awards.

In fiscal year 2022, the 2010 Stock Plan terminated and was replaced by the 2022 Stock Plan (both plans collectively the “Stock Plans”) with 500,000 authorized shares.

The Stock Plan has 450,769 remaining shares available to be issued as of October 31, 2022.

Performance Awards

Certain restricted stock grants are made to management each December under the Stock Plan based on the achievement of certain annual financial performance and other criteria achieved during the previous fiscal year (“Performance Awards”).

Certain restricted stock grants are made to management each December under the Stock Plans based on the achievement of certain annual financial performance and other criteria achieved during the previous fiscal year (“Performance Awards”).

The performance grants are based on a percentage of the employee’s base salary divided by the stock price on the grant date once the performance criteria has been met, and generally vest over a two-year period as service is provided.

During December 2022, 79,972 shares of common stock with a per share price of $ 13.19 were granted to management under the Stock Plan for fiscal year 2022 performance, resulting in total compensation expense of approximately $ 1,055,000 , with $ 365,000 recognized in the fiscal year ended October 31, 2022 and the balance to be recognized over the next two years as the shares vest.

During December 2021 and 2020, there were no Performance Awards of restricted stock granted for fiscal year 2021 or 2020 performance because the financial performance and other criteria were not met.

LIMONEIRA COMPANY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

Stockholders’ Equity (continued)

Stock-based compensation

Executive Awards

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The related compensation expense of approximately $ 725,000 will be recognized equally over the next three years as the shares vest.

In fiscal year 2022, the Company entered into Retention Bonus Agreements with key executives (collectively, the “Retention Bonus Agreements”) whereby the executives will be eligible to receive cash and restricted stock grants.

During December 2022, subsequent to fiscal year 2022, the Company granted 11,317 shares of common stock with a per share price of $ 13.19 to key executives related to the Retention Bonus Agreements.

The related compensation expense of approximately $ 149,000 had

LIMONEIRA COMPANY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

Stockholders’ Equity (continued)

Stock-based compensation (continued)

$ 122,000 recognized in the fiscal year ended October 31, 2022 and the balance will be recognized over the next year as the shares vest.

Director Awards

The Company issues shares of common stock to non-employee directors under the Stock Plan on an annual basis that vest upon grant (“Director Awards”).

The Company issues shares of common stock to non-employee directors under the Stock Plan on an annual basis that generally vest upon grant or over a one-year period (“Director Awards”).

Summary of Awards

A summary of the Performance, Executive, and Director awards granted under the Stock Plan during fiscal years 2022, 2021 and 2020, and the weighted average grant price is as follows:

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The total fair value of shares vested during the years ended October 31, 2022, 2021 and 2020 was $ 1,856,000 , $ 2,951,000 and $ 2,365,000 respectively.

The Company has unrecognized stock-based compensation expense of $ 1,963,000 as of October 31, 2021, which is expected to be recognized over the next two years as the shares vest.

The Company has unrecognized stock-based compensation expense of $ 1,208,000 as of October 31, 2022, which is expected to be recognized over the next one to two years as the shares vest.

All unvested shares are expected to vest.

During fiscal years 2022, 2021 and 2020, respectively, members of management exchanged 105,316 , 46,993 and 11,314 shares of common stock with fair values of $ 1,530,000 , $ 701,000 and $ 213,000 , at the dates of the exchanges, for the payment of payroll taxes associated with the vesting of shares under the Company’s stock-based compensation programs.

A summary of the status of the Company’s nonvested shares as of October 31, 2021, and changes during the year ended October 31, 2021, is presented below:

A summary of the status of the Company’s nonvested shares as of October 31, 2022, and changes during the fiscal year ended October 31, 2022, is presented below:

Number of Shares Weighted-Average

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Vested ( 106,334 ) $ 17.46

Forfeited ( 15,000 ) $ 14.96

Nonvested at October 31, 2022 110,897 $ 14.40

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In fiscal year 2021, the Company's Board of Directors approved a share repurchase program authorizing it to repurchase up to $ 10,000,000 of its outstanding shares of common stock through September 2022;

no shares have been repurchased under this program.

no shares were repurchased under this program.

In fiscal year 2020, the Company repurchased 250,977 shares for $ 3,493,000 under a program which expired in March 2021.

2 unchanged sentences

Stockholders’ Equity (continued)

On December 14, 2021, the Company declared a $ 0.075 per share dividend payable on January 14, 2022, in the aggregate amount of $ 1,328,000 to common shareholders of record as of December 27, 2021.

Fruit Growers Supply Cooperative

The Company is a member of Fruit Growers Supply (“FGS”), a cooperative supply corporation.

FGS is the manufacturing and supply affiliate of Sunkist and allocates after-tax earnings derived from non-member business to members.

The Company records allocations disbursed by FGS as reductions of agribusiness expenses.

The Company had been allocated $ 729,000 , of which the Company received dividends of $ 216,000 , $ 513,000 and zero in fiscal years 2021, 2020 and 2019, respectively, and there are no remaining allocations outstanding as of October 31, 2021.

On December 20, 2022, the Company declared a $ 0.075 per share dividend payable on January 13, 2023, in the aggregate amount of $ 1,326,000 to common stockholders of record as of January 3, 2023.

Segment Information

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The reportable operating segments of the Company are strategic business units with different products and services, distribution processes and customer bases.

The fresh lemons segment includes sales, farming and harvesting expenses and third-party grower and supplier costs relative to fresh lemons.

The fresh lemons segment includes sales, farming and harvest costs and third-party grower and supplier costs relative to fresh lemons.

The lemon packing segment includes packing revenues and shipping and handling revenues relative to lemon packing.

3 unchanged sentences

The avocados segment includes sales, farming and harvest costs.

The other agribusiness segment includes sales, farming and harvest costs of oranges, specialty citrus and other crops.

The other agribusiness segment includes sales, farming and harvest costs and brokered fruit costs of oranges, specialty citrus and other crops.

Revenues related to rental operations are included in “Corporate and Other.”

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The Company does not allocate selling, general and administrative expense, total other income (expense) and income taxes, or specifically identify them to its operating segments.

The Company earns packing revenue for packing lemons grown on its orchards and lemons procured from third-party growers and suppliers.

The Company earns packing revenue for packing lemons grown on its orchards and lemons procured from third-party growers.

Intersegment revenues represent packing revenues related to lemons grown on the Company’s orchards.

21 unchanged sentences

Operating (loss) income $ 9,331 $ 7,133 $ — $ 2,573 $ 2,478 $ 12,889 $ ( 19,222 ) $ ( 6,333 )

LIMONEIRA COMPANY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

Segment Information (continued)

Segment information for fiscal year 2020 (in thousands):

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Depreciation and amortization — — — — — 8,943 1,154 10,097

Operating income (loss) $ 13,344 $ 8,063 $ — $ 2,241 $ ( 1,848 ) $ 14,177 $ ( 19,691 ) $ ( 5,514 )

Operating (loss) income $ ( 1,155 ) $ 7,670 $ — $ 3,638 $ 1,446 $ 2,656 $ ( 21,664 ) $ ( 19,008 )

LIMONEIRA COMPANY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

Segment Information (continued)

The following is a detail of other agribusiness revenues for fiscal years 2022, 2021 and 2020 (in thousands):

5 unchanged sentences

Subsequent Events

The Company has evaluated events subsequent to October 31, 2021 through the date of this filing, to assess the need for potential recognition or disclosure in this Annual Report.

Based upon this evaluation, except as disclosed in the notes to consolidated financial statements, it was determined that no other subsequent events occurred that require recognition or disclosure in the consolidated financial statements.

The Company evaluated events subsequent to October 31, 2022 through the date of this filing, to assess the need for potential recognition or disclosure in this Annual Report.

Based upon this evaluation, except as described in the notes to consolidated financial statements, it was determined that no other subsequent events occurred that require recognition or disclosure in the consolidated financial statements.

Changes in and Disagreements with Accountants on Accounting and Financial Disclosure.

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 8. Financial Statements and Supplementary Data