We seek to opportunistically acquire new agricultural assets from time to time that we believe would complement our business. For example, (i) in fiscal year 2015, we acquired three Florida citrus properties, including Orange-Co and Silver Nip Citrus, which resulted in our citrus division being one of the largest citrus producers in the United States.States, and (ii) in October 2020 we acquired another Florida citrus property. While we expect that our past and future acquisitions will successfully complement our business, we may fail to realize all of the anticipated benefits of these acquisitions, which could reduce our anticipated results. We cannot assure that we will be able to successfully identify suitable acquisition opportunities, negotiate appropriate acquisition terms, or obtain any financing that may be needed to consummate such acquisitions or complete proposed acquisitions. Acquisitions by us could result in accounting changes, potentially dilutive issuances of equity securities, increased debt and contingent liabilities, reduce the amount of cash available for dividends, debt service payments, integration issues and diversion of management’s attention, any of which could adversely affect our business, results of operations, financial condition, and cash flows. We may be unable to successfully realize the financial, operational, and other benefits we anticipate from our acquisitions and our failure to do so could adversely affect our business, results of operations, financial condition and cash flows.

We also routinely evaluate the benefits of disposing of certain of our assets which could include the exit from lines of business. For example, in November of 2014, we sold significant sugarcane assets and we are no longer involved in the sugarcane business and, in January of 2018, we sold our breeding herd and no longer engage in cattle operations. Most recently, we sold certain ranch acres to the State of Florida because these acres would have been critically important for carrying out the Company’s planneddispersed water storage project, the Company is no longer are pursuing permit approval relating to this dispersed water storage project. While such dispositions increase the amount of cash available to us, it could also result in a potential loss of significant operating revenues and income streams that we might not be able to replace, makes our business less diversified and could ultimately have a negative impact on our results of operations, financial condition and cash flows.

From time to time we dispose of properties in transactions that are intended to qualify as Section 1031 Exchanges.Exchanges under the federal income tax law. It is possible that the qualification of a transaction as a Section 1031 Exchange could be successfully challenged and determined to be currently taxable and we could also be required to pay interest and penalties. As a result, we may be required to borrow funds in order to pay additional income taxes, and the payment of such taxes could cause us to have less cash available. Moreover, it is possible that legislation could be enacted that could modify or repeal the laws with respect to Section 1031 Exchanges, which could make it more difficult or not possible for us to dispose of properties in the future on a tax deferred basis.

We continuously evaluate the acquisition or disposition of operating businesses and assets and may in the future undertake one or more significant transactions. Any such acquisitive transaction could be material to our business and could take any number of forms, including mergers, acquisitions, joint ventures and the purchase of equity interests. The consideration for such acquisitive transactions may include, among other things, cash, common stock or equity interests in the Company or our subsidiaries, or a contribution of property or equipment to obtain equity interests, and in conjunction with a transaction we might incur additional indebtedness. We also routinely evaluate the benefits of disposing of certain assets. Such dispositions could take the form of asset sales, mergers or sales of equity interests.

These transactions may present significant risks such as insufficient assets to offset liabilities assumed, potential loss of significant operating revenues and income streams, increased or unexpected expenses, inadequate return of capital, regulatory or compliance issues, the triggering of certain financial covenants in our debt instruments (including accelerated repayment) and unidentified issues not discovered in due diligence. In addition, such transactions could distract management from current operations. As a result of the risks inherent in such transactions, we cannot guarantee that any such transaction will ultimately result in the realization of its anticipated benefits or that it will not have a material adverse impact on our business, financial condition, results of operations or cash flows. If we were to complete such an acquisition, disposition, investment or other strategic transaction, we may require additional debt or equity financing that could result in a significant increase in our amount of debt and our debt service obligations

Our citrus groves produce the majority of our annual operating revenues and the citrus business is seasonal because it is tied to the growing and picking seasons. Historically, the second and third quarters of our fiscal year generally produce the majority of our annual revenues, and our working capital requirements are typically greater in the first and fourth quarters of our fiscal year coinciding with our planting cycles. Because of the seasonality of our business, results for any quarter are not necessarily indicative of the results that may be achieved for the full fiscal year or in

future quarters. If our operating revenues in the second and third quarters are lower than expected, it would have a disproportionately large adverse impact on our annual operating results.

We face significant competition in our agricultural operations both from domestic and foreign producers and do not have any branded products. Foreign growers generally have an equal or lower cost of production, less environmental regulation and in some instances, greater resources and market flexibility than us. Because foreign growers have greater flexibility as to when they enter the U.S. market, we cannot always predict the impact these competitors will have on our business and results of operations. The competition we face from certain foreign suppliers of orange juice is mitigated by a governmentally imposed tariff on orange imports. Accordingly, a reduction in the government’s orange juice tariff could adversely impact our results of operations.

Excess supplies often cause severe price competition in our industry. Growing conditions in various parts of the world, particularly weather conditions such as windstorms, floods, droughts and freezes, as well as diseases and pests, are primary factors affecting market prices because of their influence on the supply and quality of product.

Fresh produce is highly perishable and generally must be brought to market and sold soon after harvest. Many of the items involved in our business, such as oranges, must be sold more quickly than other produce our competitors may produce, such as lemons. As such, our competitors may be able to maintain certain items they produce in inventory for longer periods than we are able to maintain our inventory which may offer our competitors strategic advantages when they respond to fluctuations in market supply and demand that are not available to us.

In addition, general public perceptions regarding the quality, safety or health risks associated with particular food products could reduce demand and prices for some of our products. To the extent that consumer preferences evolve away from products that we produce for health or other reasons, and we are unable to modify our products or to develop products that satisfy new consumer preferences, there will be a decreased demand for our products. If excess supplies do exist, this could result in reduced pricing or unusable inventory which could adversely impact our results of operations.

There is growing concern that carbon dioxide and other greenhouse gases in the atmosphere may have an adverse impact on global temperatures, weather patterns, and the frequency and severity of extreme weather and natural disasters. In the event that such climate change has a negative effect on the productivity of our citrus groves, it could have an adverse impact on our business and results of operations. The increasing concern over climate change also may result in more regional, federal, and/or global legal and regulatory requirements to reduce or mitigate the effects of greenhouse gases. In the event that such regulation is enacted, we may experience significant increases in our costs of operations. In particular, increasing regulation of fuel emissions could substantially increase the distribution and supply chain costs associated with our products. As a result, climate change could negatively affect our business and operations.

We primarily utilize labor contractors to harvest and deliver our fruit to outside packing facilities. Our employees and contractors are in demand by other agribusinesses and other industries. Shortages of labor, particularly as a result of the recent low unemployment rate in the United States and in Florida in particular, could delay our harvesting or orange processing activities or could result in increases in labor costs.

We and our labor contractors are subject to government mandated wage and benefit laws and regulations. In addition, current or future federal or state healthcare legislation and regulation, including the Affordable Care Act, may increase our medical costs or the medical costs of our labor contractors that could be passed on to us.

Many factors may affect the cost and supply of citrus, including external conditions, commodity market fluctuations, changes in governmental laws and regulations, tariffs, agricultural programs, severe and prolonged weather conditions and natural disasters. Increased costs for products can negatively impact our operating results and there can be no assurance that they will not adversely affect our operating results in the future.

We depend on third party providers of transportation and have no control over such third parties. An extended interruption in our ability to harvest and haul our products could have a material adverse effect on our business, financial condition and results of operations. Similarly, any extended disruption in the distribution of our products could have a material adverse effect on our business, financial condition and results of operations.

While we believe we are adequately insured and would attempt to transport our products by alternative means if we were to experience an interruption due to strike, natural disasters or otherwise, we cannot be sure that we would be able to do so or be successful in doing so in a timely and cost-effective manner.

In the fiscal years ended September 30, 2020, 2019 2018 and 20172018 we paid approximately $2,714,000, $2,755,000, $3,089,000 and $3,106,000$3,089,000 in real estate taxes, respectively. These taxes were based upon the agricultural use (“Green Belt”) values determined by the county property appraisers in which counties we own land, of approximately $87,976,000, $91,312,000, and $104,017,000 and $105,496,000 for each of the fiscal years ended September 30, 2020, 2019 2018 and 20172018, respectively, which differs significantly from the fair values determined by the county property appraisers of approximately $463,799,000, $514,330,000, $537,183,000 and $539,790,000,$537,183,000, respectively. Changes in state law or county policy regarding the granting of agricultural classification or calculation of "Green Belt" values or average millage rates could significantly impact our results of operations, cash flows and/or financial position.

Our agricultural business involves the use of herbicides, fertilizers and pesticides, some of which may be considered hazardous or toxic substances. We may be deemed liable and have to pay for the costs or damages associated with the improper application, accidental release or the use or misuse of such substances. Our insurance may not be adequate to cover such costs or damages, or may not continue to be available at a price or under terms that are satisfactory to us. In such cases, if we are required to pay significant costs or damages, it could materially adversely affect our business, results of operations, financial condition and cash flows.

We are subject to various laws and regulations relating to the operation of our properties, which are administered by numerous federal, state and local governmental agencies. We face a potential for environmental liability by virtue of our ownership of real estate property. If hazardous substances (including herbicides and pesticides used by us or by any persons leasing our lands) are discovered emanating from any of our lands and the release of such substances presents a threat of harm to the public health or the environment, we may be held strictly liable for the cost of remediation of these hazardous substances. In addition, environmental laws that apply to a given site can vary greatly according to the site’s location, its present and former uses, and other factors such as the presence of wetlands or endangered species on the site. Management monitors environmental legislation and requirements and makes every effort to remain in compliance with such regulations. Furthermore, we require lessees of our properties to comply with environmental regulations as a condition of leasing. We also purchase insurance for environmental liability when it is available; however, these insurance contracts may not be adequate to cover such costs or damages or may not continue to be available at prices and terms that would be satisfactory. It is possible that in some cases the cost of compliance with these environmental laws could exceed the value of a particular tract of land, make it unsuitable for use in what would otherwise be its highest and best use, and/or be significant enough that it would materially adversely affect us.

We depend to a large extent on the services of certain key management personnel. These individuals have extensive experience and expertise in the business lines and segments in which they work. The loss of any of these individuals could have a material adverse effect on our businesses. We do not maintain key-man life insurance with respect to any of our employees. Our success will be dependent on our ability to continue to attract, employ and retain skilled personnel in our business lines and segments.

Inflation can have a major impact on our citrus operations. The citrus operations are most affected by escalating costs and unpredictable revenues and very high irrigation water costs. High fixed water costs related to our citrus lands will continue to adversely affect earnings. Prices received for many of our products are dependent upon prevailing market conditions and commodity prices. Therefore, it is difficult for us to accurately predict revenue, just as we cannot pass on cost increases caused by general inflation, except to the extent reflected in market conditions and commodity prices.

As a company with publicly traded securities, we have incurred, and will continue to incur, significant legal, accounting and other expenses. In addition, the Sarbanes-Oxley Act of 2002 and the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010, as well as rules promulgated by the SEC and Nasdaq, requires us to adopt corporate governance practices applicable to U.S. public companies. These laws, rules and regulations may increase our legal and financial compliance costs, which could adversely affect the trading price of our common stock.

To service our debt, we require a significant amount of cash. Our ability to generate cash, make scheduled payments or refinance our obligations depends on our successful financial and operating performance. Our financial and operating performance, cash flow and capital resources depend upon prevailing economic conditions and various financial, business and other factors, many of which are beyond our control. These factors include among others:

•

economic and competitive conditions

•

changes in laws and regulations

economic and competitive conditions

•

operating difficulties, increased operating costs or pricing pressures we may experience; and

changes in laws and regulations

•

delays in implementing any strategic projects

operating difficulties, increased operating costs or pricing pressures we may experience; and

delays in implementing any strategic projects

If our cash flow and capital resources are insufficient to fund our debt service obligations, we may be forced to reduce or delay capital expenditures, sell material assets or operations, obtain additional capital or restructure our debt. If we are required to take any actions referred to above, it could have a material adverse effect on our business, financial condition and results of operations. In addition, we cannot assure investors that we would be able to take any of these actions on terms acceptable to us, or at all, or that these actions would enable us to continue to satisfy our capital requirements or that these actions would be permitted under the terms of our various debt agreements.

Some of our debt is based on variable rates of interest, which could result in higher interest expenses in the event of an increase in the interest rates.

Our credit facility and certain of our term loans that we have currently bear interest at variable rates, which will generally change as interest rates change. We bear the risk that the rates we are charged by our lenders will increase faster than the earnings and cash flow of our business, which could reduce profitability, adversely affect our ability to service our debt, cause us to breach covenants contained in our credit facility and term loans, any of which could materially adversely affect our business, financial condition, results of operations and cash flows.

Risks Related to our Common Stock

Our common stock has low trading volume and the distribution of all of the shares of our common stock owned by 734 Investors to its members has the effect of increasing the Company’s public float and such increase may have a material adverse effect on the market price of our common stock.

Although our common stock trades on the Nasdaq Global Select Market, it is thinly traded and our average daily trading volume is low compared to the number of shares of common stock we have outstanding. The low trading volume of our common stock can cause our stock price to fluctuate significantly as well as make it difficult for a stockholdershareholder to sell their common shares quickly. As a result of our stock being thinly traded and/or our low stock price, institutional investors might not be interested in owning our common stock.

stock, which in turn could have a material adverse effect on our ability to obtain future funding, if needed, as well as create a potential market overhang.

On November 12, 2019, 734 Investors effected a distribution of all of the shares of our common stock owned by 734 Investors to its members. The distribution of Alico shares of common stock by 734 Investors to its members has the effect of increasing the Company’s public float and such increase, although it may increase the trading volume and thus reduce some of the trading volume risk described above, may at the same time over the short term have a material adverse effect on the market price of the common stock which in turn could haveif too many members of 734 Investors seek to liquidate their shares over a material adverse effect on our ability to obtain future funding, if needed, as well as create a potential market overhang.

short period.

We may not be able to continue to pay or maintain our cash dividends on our common stock and the failure to do so may negatively affect our share price.

We have historically paid regular quarterly dividends to the holders of our common stock. Our ability to pay cash dividends depends on, among other things, our cash flows from operations, our cash requirements, our financial condition, the degree to which we are/or become leveraged, contractual restrictions binding on us, provisions of applicable law and other factors that our Board of Directors may deem relevant. There can be no assurance that we will generate sufficient cash from continuing operations in the

future, or have sufficient cash surplus or net profits to pay dividends on our common stock. Our dividend policy is based upon our directors’ current assessment of our business and the environment in which we operate and that assessment could change based on business developments (which could, for example, increase our need for capital expenditures) or new growth opportunities. Our Board of Directors may, in its discretion, decrease the level of cash dividends or entirely discontinue the payment of cash dividends. The reduction or elimination of cash dividends may negatively affect the market price of our common stock.

There can be no assurance that we will resume the repurchase of shares of our common stock.

In fiscal year 2017, our Board of Directors authorized the repurchase of up to $7,000,000 of the Company’s common stock in two separate authorizations. In March 2017, our Board of Directors authorized the repurchase of up to $5,000,000 of the Company’s common stock beginning March 9, 2017 and continued through March 9, 2019. In May 2017, our Board of Directors authorized the repurchase of up to an additional $2,000,000 of the Company’s common stock beginning May 24, 2017 and continued through May 24, 2019. There can be no assurance that we will repurchase shares in the future in any particular amounts or at all. A reduction in, or elimination of, share repurchases could have a negative effect on our share price.

If we were to conduct aanother tender offer or engage in aan additional share repurchase program, holders of our securities would be subject to certain risks associated with a decrease in the outstanding number of shares of our common stock.

In September 2018 the Company announced the commencement of the Tender Offer. During the Tender Offer the Company repurchased an aggregate of 752,234 shares at a price of $34.00 per share aggregating $25,575,956. These shares represented approximately 9.2% of the total number of shares of the Company’s common stock issued and outstanding as of October 2, 2018. While we have no plans to conduct another tender offer at this time, we may conduct another tender offer or engage in the repurchase of our shares in the future. Shareholders could be adversely affected by a reduction in our “public float,” that is, the number of shares owned by outside shareholders and available for trading in the securities markets, if the Company makes future tender offers or private or open market repurchases of its shares. Although the Company is not currently pursuing a tender offer or repurchase program, there are no assurances that our Board of Directors will not authorize the Company to do so in the future. Engaging in a tender offer or repurchase program in the future could have a negative effect on our share price.

Item 1B. Unresolved Staff Comments

None.

Item 2. Properties

As of September 30, 2019,2020, Alico owned 111,40199,760 acres of land located in eight counties in Florida. Acreage in each county and the primary classification with respect to the present use of these properties is shown in the following table:

		Total				Hendry				Polk				Collier				DeSoto				Glades				Charlotte				Hardee				Highlands
Alico Citrus:
Citrus Groves			45,485				5,485				7,107				7,166				21,386				—				2,543				574				1,224
Citrus Nursery			22				—				—				—				22				—				—				—				—
Total Citrus Groves			45,507				5,485				7,107				7,166				21,408				—				2,543				574				1,224
Land Management and Other Operations			52,807				48,785				—				4,022				—				—				—				—				—
Mining			526				—				—				—				—				526				—				—				—
Other			920				920				—				—				—				—				—				—				—
Total			99,760				55,190				7,107				11,188				21,408				526				2,543				574				1,224

	Total		Hendry		Polk		Collier		DeSoto		Glades		Charlotte		Hardee		Highlands
Alico Citrus:
Citrus Groves	45,151		5,485		6,773		7,166		21,386		—		2,543		574		1,224
Citrus Nursery	22		—		—		—		22		—		—		—		—
Total Citrus Groves	45,173		5,485		6,773		7,166		21,408		—		2,543		574		1,224
Water Resources and Other Operations	64,782		60,760		—		4,022		—		—		—		—		—
Mining	526		—		—		—		—		526		—		—		—
Other	920		920		—		—		—		—		—		—		—
Total	111,401		67,165		6,773		11,188		21,408		526		2,543		574		1,224

Approximately 51,00051,300 acres of the properties listed are encumbered by credit agreements totaling approximately $163,000,000$151,000,000 as of September 30, 2019.2020. For a more detailed description of the credit agreements and collateral please see Note 6. “Long-Term Debt and Lines of Credit” to the Company’s fiscal year 20192020 consolidated financial statements.

The Company currently collects mining royalties on approximately 526 acres of the land included in the table above and located in Glades County, Florida. These royalties do not represent a significant portion of operating revenues or gross profits.

Item 3. Legal Proceedings

Florida Litigation

On November 16, 2018, 734 Agriculture, RCF 2014 Legacy LLC, Delta Offshore Master II, LTD. and Mr. Remy W. Trafelet (the “Trafelet Parties”), who was at the time the Company's President and Chief Executive Officer and a member of the Board of Directors, filed a lawsuit against Messrs. George R. Brokaw, Henry R. Slack, W. Andrew Krusen and Greg Eisner, members of the Board of Directors, in the Circuit Court (the “Circuit Court”) for Hillsborough County, Florida (the “Florida Litigation”). The Trafelet Parties sought, among other things, a declaration that (1) a purported stockholder action by written consent, delivered to the Company in the name of 734 Investors and the plaintiffs in the Florida Litigation on November 11, 2018 (the “Purported Consent”) was valid and binding, (2) the resolutions passed at a meeting of the Board of Directors on November 12, 2018, to, among other things, constitute an ad hoc committee of the Board of Directors to consider, evaluate and make any and all determinations, and to take any and all actions, on behalf of the Board of Directors, in connection with the Purported Consent were null and void and (3) the four defendants in the Florida Litigation were properly removed from the Board of Directors by the Purported Consent. On November 27, 2018, the Circuit Court denied without prejudice plaintiffs’ motion for a temporary restraining order and an affirmative injunction restoring Mr. Trafelet from administrative leave to active status in his capacity as President and CEO of the Company.

On November 28, 2018, the parties in the Florida Litigation stipulated to an order which provided pending the resolution of the Delaware Litigation (as defined below), that (1) the record date for the Purported Consent was stayed indefinitely, and (2) Mr. Trafelet and the Company’s Board of Directors should not take any action out of routine day-to-day operations conducted in the ordinary course of business, including any action to change the corporate governance of Alico or removing any corporate officers or directors from positions held as of November 27, 2018.

On December 6, 2018, the Trafelet Parties filed an amended complaint in the Florida Litigation which added the Company and Benjamin D. Fishman, a member of the Board of Directors, as defendants. On December 21, 2018, the Trafelet Parties filed a

renewed motion for a preliminary injunction restoring Mr. Trafelet from administrative leave to active status in his capacity as President and CEO of the Company. On January 14, 2019, the defendants in the Florida Litigation filed an opposition to plaintiffs’ renewed motion for a preliminary injunction. On January 18, 2019, the defendants in the Florida Litigation filed a motion to dismiss the plaintiffs’ amended complaint.

On February 11, 2019, the parties to the Florida Litigation entered into a settlement agreement (the “Alico Settlement Agreement”) wherein the parties agreed to promptly dismiss all claims in the Florida Litigation. Pursuant to the Alico Settlement Agreement, Mr. Trafelet agreed to voluntarily resign as President and Chief Executive Officer and as a member of the Board of Directors, effective upon the execution of the Alico Settlement Agreement.

As contemplated by the Alico Settlement Agreement, on February 11, 2019, the Company entered into a consulting agreement (the “Consulting Agreement”) with Mr. Trafelet and 3584 Inc., an entity controlled by Mr. Trafelet (the “Consultant”). Pursuant to the Consulting Agreement, Mr. Trafelet agreed to make himself available to provide consulting services to the Company through the Consultant for up to 24 months. In exchange for the consulting services, the Consultant is receiving an annual consulting fee of $400,000. If the Company terminates the consulting period (other than in certain specified circumstances), the Company will continue to pay the consulting fees described in the immediately preceding sentence through the balance of the 24-month term. As such, the Company recorded the $800,000 as expense in the quarter ended March 31, 2019.

In addition, on February 11, 2019, as contemplated by the Alico Settlement Agreement, the Company entered into a Registration Rights Agreement (the “Registration Rights Agreement”) with Mr. Trafelet, relating to the shares of the Company’s common stock directly held by the Trafelet Parties as of February 11, 2019 (the “Registrable Securities”). The Registration Rights Agreement required the Company to, among other things and subject to the terms and conditions thereof, use reasonable best efforts to file with the SEC a registration statement on Form S-3 covering the resale of the Registrable Securities. On October 10, 2019, Mr. Trafelet executed a waiver whereby he waived the S-3 Registration Rights but maintained all other rights arising under the Registration Rights Agreement and all rights arising under Section 14 of the Alico Settlement Agreement.

Delaware Litigation

On November 20, 2018, members of 734 Investors filed a lawsuit against 734 Agriculture and Mr. Trafelet, who was at the time the Company's President and Chief Executive Officer and a member of the Board of Directors in the Delaware Court of Chancery (the "Delaware Court"), captioned Arlon Valencia Holdings v. Trafelet, C.A. No. 2018-0842-JTL (the “Members’ Delaware Litigation”). The plaintiffs sought, among other things, a declaration that (1) 734 Agriculture was validly replaced as the managing member of 734 Investors pursuant to the Amended and Restated Limited Liability Company Operating Agreement of 734 Investors (the “LLC Agreement”) and the November 19, 2018 resolution by written consent to remove 734 Agriculture as managing member of 734 Investors, and to designate Arlon Valencia Holdings, LLC as the new managing member of 734 Investors (the “734 Consent"), and (2) the Purported Consent was invalid under the LLC Agreement.

Also, on November 20, 2018, 734 Agriculture filed a lawsuit contesting the 734 Consent in the Delaware Court, captioned 734 Agriculture v. Arlon Valencia Holdings, LLC, C.A. No. 2018-0844-JTL (the “734 Delaware Litigation”). On November 27, 2018, the Delaware Court entered a stipulated order consolidating the Members’ Delaware Litigation and the 734 Delaware Litigation into a single lawsuit, captioned In re 734 Investors, LLC Litigation, Consol. C.A. No. 2018-0844-JTL (the consolidated suit, the “Delaware Litigation”).

On December 5, 2018, the Delaware Court entered a stipulated status quo order which provided, among other things, that 734 Agriculture was to serve as the managing member of 734 Investors during the pendency of the Delaware Litigation. The status quo order also provided that 734 Agriculture would not be permitted to take any actions outside of the ordinary course of business of 734 Investors without the consent of two-thirds of the membership interests of 734 Investors, including exercising any voting rights with respect to any shares of the Company’s common stock beneficially owned by 734 Investors.

On February 11, 2019, Mr. Trafelet, 734 Agriculture, 734 Investors, and certain members of 734 Investors entered into a settlement agreement (the “734 Investors Settlement Agreement”) wherein the parties agreed to promptly dismiss all claims in the Delaware Litigation. Pursuant to the 734 Investors Settlement Agreement, 734 Agriculture resigned as Managing Member of 734 Investors and Arlon Valencia Holdings, LLC was confirmed as Managing Member of 734 Investors.

From time to time, Alico may be involved in litigation relating to claims arising out of its operations in the normal course of business. There are no other current legal proceedings to which the Company is a party or of which any of its property is subject that it believes will have a material adverse effect on its financial position, results of operations or cash flows.

Item 4. Mine Safety Disclosures

Not Applicable.

PART II

Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities

Common Stock

Our common stock is traded on the Nasdaq Global Select Market under the symbol ALCO.

Holders

On December 2, 20194, 2020, our stock transfer records indicated there were 220216 holders of record of our common stock. TheA greater number of registered holders includes banks and brokers who act as nominee forof our common stock are “street name” or beneficial holders, each of whom may represent more than one stockholder.

whose shares are held by banks, brokers and other financial institutions.

Dividend Policy

The declaration and amount of any actual cash dividend are in the sole discretion of our Board of Directors and are subject to numerous factors that ordinarily affect dividend policy, including the results of our operations and financial position, as well as general economic and business conditions.

The following table presents cash dividends per share of our common stock declared in fiscal years ended September 30, 2020, 2019 2018 and 2017:2018:

Declaration Date		Record Date		Payment Date		Per Common Share
November 6, 2017		December 29, 2017		January 16, 2018		$	0.06
March 14, 2018		March 30, 2018		April 13, 2018		$	0.06
June 11, 2018		June 29, 2018		July 13, 2018		$	0.06
September 4, 2018		September 28, 2018		October 12, 2018		$	0.06
December 14, 2018		December 28, 2018		January 11, 2019		$	0.06
March 15, 2019		March 29, 2019		April 12, 2019		$	0.06
June 14, 2019		June 28, 2019		July 12, 2019		$	0.06
September 13, 2019		September 27, 2019		October 11, 2019		$	0.06
December 5, 2019		December 27, 2019		January 10, 2020		$	0.09
March 13, 2020		March 27, 2020		April 10, 2020		$	0.09
June 11, 2020		June 26, 2020		July 10, 2020		$	0.09
September 11, 2020		September 25, 2020		October 9, 2020		$	0.09

Declaration Date	Record Date	Payment Date	Per Common Share
November 30, 2016	December 30, 2016	January 16, 2017	$0.06
February 23, 2017	March 31, 2017	April 14, 2017	$0.06
May 23, 2017	June 30, 2017	July 15, 2017	$0.06
September 15, 2017	September 29, 2017	October 16, 2017	$0.06
November 6, 2017	December 29, 2017	January 16, 2018	$0.06
March 14, 2018	March 30, 2018	April 13, 2018	$0.06
June 11, 2018	June 29, 2018	July 13, 2018	$0.06
September 4, 2018	September 28, 2018	October 12, 2018	$0.06
December 14, 2018	December 28, 2018	January 11, 2019	$0.06
March 15, 2019	March 29, 2019	April 12, 2019	$0.06
June 14, 2019	June 28, 2019	July 12, 2019	$0.06
September 13, 2019	September 27, 2019	October 11, 2019	$0.06

Stock Performance Graph

The graph below represents our common stock performance, comparing the value of $100 invested on September 30, 20142015 in our common stock, the S&P 500 Index, the S&P Agricultural Products Index and a Company-constructed peer group, which includes Forestar Group, Inc., Limoneira Company, The St. Joe Company, Tejon Ranch Co. and Texas Pacific Land Trust.

						INDEXED RETURNS
		Base Period				Years Ending
Company Name / Index		Sept 15				Sept 16				Sept 17		Sept 18		Sept 19				Sept 20
Alico, Inc.			100			66.71				85.51		85.29		86.54				73.67
S&P 500 Index			100			115.43				136.91		161.43			168.30				193.80
S&P Agricultural Products Index			100				115.30			118.08		133.04		112.52				133.78
Peer Group			100			121.43				163.75		267.21			212.60			173.86

				INDEXED RETURNS
		Base Period Sept 14
				Years Ending
Company Name / Index				Sept 15		Sept 16		Sept 17		Sept 18		Sept 19
Alico, Inc.		100		107.08		71.44		91.56		91.33		92.66
S&P 500 Index		100		99.39		114.72		136.07		160.44		167.27
S&P Agricultural Products Index		100		86.00		99.15		101.54		114.41		96.77
Peer Group		100		82.07		99.66		134.39		219.29		174.48

(Includes reinvestment of dividends)

Recent Sale of Unregistered Securities

None.

Issuer Repurchases of Equity Securities

In fiscal year 2017, Alico's Board of Directors authorized the repurchase of up to $7,000,000 of the Company’s common stock in two separate authorizations (the "2017 Authorization"). In March 2017, Alico's Board of Directors authorized the repurchase of up to $5,000,000 of the Company’s common stock beginning March 9, 2017 and continued through March 9, 2019. In May 2017, Alico's Board of Directors authorized the repurchase of up to an additional $2,000,000 of the Company’s common stock beginning May 24, 2017 and continued through May 24, 2019. There can be no assurance that the Company will repurchase shares in the future in any particular amounts or at all. A reduction in, or elimination of, share repurchases could have a negative effect on the Company's share price.

In fiscal year 2016, Alico's Board of Directors authorized the repurchase of up to 50,000 shares of the Company’s outstanding common stock beginning February 18, 2016 and continued through February 17, 2017 (the "2016 Authorization"). For the fiscal year ended September 30, 2017, the Company did not purchase any shares in accordance with the 2016 Authorization.

We adopted Rule 10b5-1 share repurchase plan under the Securities Exchange Act of 1934 (the “Plan”) in connection with share repurchase authorizations. The Plan allows us to repurchase our shares of common stock at times when it otherwise might be prevented from doing so under insider trading laws or because of self-imposed trading blackout periods. Because repurchases under the Plan are subject to certain pricing parameters, there is no guarantee as to the exact number of common shares that will be repurchased under the Plan or that there will be any repurchases pursuant to the Plan.

		(a)				(b)				(c)		(d)
Period		Total number of shares (or units) purchased (1)				Average price paid per share (or unit)				Total number of shares (or units) purchased as part of publicly announced plans or programs		Maximum number (or approximate dollar value) of shares (or units) that may yet be purchased under the plans or programs
10/01/2019 - 10/31/2019			7,000			$	33.95			—		—
Total			7,000			$	33.95			—		—

(1)

On October 10, 2019, the Board of Directors authorized the repurchase of up to 7,000 shares of the Company's common stock from 734 Investors in a privately negotiated repurchase of shares. The Company entered into a repurchase agreement with 734 Investors to repurchase 7,000 shares of the Company's common stock on October 15, 2019.

There were no purchases of common stock for the 4^th quarter in fiscal year 2019 under the 2017 Authorization or otherwise. As a result of the 2017 Authorization expiring on May 24, 2019, there is no availability to repurchase shares of common stock under the 2017 Authorization.

The Company purchased 72,266 shares of common stock in the open market in fiscal year 2018 under the 2017 Authorization at a weighted average price of $30.65 per common share.

On October 3, 2018, the Company completed a tender offer of 752,234 shares at a price of $34.00 per share aggregating $25,575,956. 734 Investors, Alico's largest stockholder from 2013 until November 12, 2019, participated in the tender offer by selling a small percentage of its holdings.

Item 6. Selected Financial Data

The following tables present selected historical consolidated financial information as of and for each of the fiscal years in the five-year period ended September 30, 2019.2020. The Consolidated Financial Statements as of and for the fiscal years ended September 30, 2020, 2019, 2018, 2017 2016 and 2015 include combined financial statement balances with Silver Nip Citrus, as a result of our common control acquisition in February 2015.

2016.

The selected historical financial data presented below should be reviewed in conjunction with our Consolidated Financial Statements and the accompanying Notes thereto, included elsewhere in this Annual Report on Form 10-K.

(in thousands, except per share amounts)		September 30,
		2020				2019				2018				2017				2016
Selected Statements of Operations Information:
Operating revenues		$	92,507			$	122,251			$	81,281			$	129,829			$	144,196
Income (loss) from operations		$	6,921			$	45,214			$	10,535			$	(6,094	)		$	21,846
Net income (loss) attributable to common stockholders		$	23,662			$	37,833			$	13,050			$	(9,451	)		$	6,993
Basic earnings (loss) per common share		$	3.16			$	5.06			$	1.59			$	(1.14	)		$	0.84
Diluted earnings (loss) per common share		$	3.16			$	5.05			$	1.57			$	(1.14	)		$	0.84
Cash dividends declared per common share		$	0.36			$	0.24			$	0.24			$	0.24			$	0.24
Selected Balance Sheet Information:
Cash and cash equivalents and restricted cash		$	19,687			$	23,838			$	32,260			$	3,395			$	6,625
Property and equipment, net		$	350,061			$	345,648			$	340,403			$	349,337			$	379,247
Total assets		$	423,937			$	417,388			$	423,422			$	419,182			$	455,445
Current portion of long-term debt		$	9,145			$	5,338			$	5,275			$	4,550			$	4,493
Long-term debt, net of current portion		$	139,106			$	158,111			$	169,074			$	181,926			$	192,726
Total Alico, Inc. stockholders' equity		$	216,341			$	194,303			$	172,117			$	160,641			$	173,490
Noncontrolling interest		$	5,441			$	5,095			$	5,478			$	4,728			$	4,773

(in thousands, except per share amounts)	September 30,
	2019			2018			2017			2016			2015
Selected Statement of Operations Information:
Operating revenues	$	122,251		$	81,281		$	129,829		$	144,196		$	153,126
Income (loss) from operations	$	45,214		$	10,535		$	(6,094	)	$	21,846		$	18,964
Net income (loss) attributable to common stockholders	$	37,833		$	13,050		$	(9,451	)	$	6,993		$	13,214
Basic earnings (loss) per common share	$	5.06		$	1.59		$	(1.14	)	$	0.84		$	1.64
Diluted earnings (loss) per common share	$	5.05		$	1.57		$	(1.14	)	$	0.84		$	1.64
Cash dividends declared per common share	$	0.24		$	0.24		$	0.24		$	0.24		$	0.24
Selected Balance Sheet Information:
Cash and cash equivalents and restricted cash	$	23,838		$	32,260		$	3,395		$	6,625		$	5,474
Property and equipment, net	$	345,648		$	340,403		$	349,337		$	379,247		$	381,099
Total assets	$	417,388		$	423,422		$	419,182		$	455,445		$	460,088
Current portion of long-term debt	$	5,338		$	5,275		$	4,550		$	4,493		$	4,511
Long-term debt, net of current portion	$	158,111		$	169,074		$	181,926		$	192,726		$	200,970
Total Alico, Inc. stockholders' equity	$	194,303		$	172,117		$	160,641		$	173,490		$	170,704
Noncontrolling interest	$	5,095		$	5,478		$	4,728		$	4,773		$	4,807

For the fiscal year ended September 30, 2015, net income includes the gain on sale of assets of approximately $13,590,000 related to the sale of real estate, approximately $8,366,000 of interest expense, approximately $1,051,000 loss on extinguishment of debt related to the refinancing of our debt obligations, approximately $1,145,000 gain on bargain purchase related to acquisition of citrus business and an impairment charge of approximately $541,000 on an asset held for sale.

For the fiscal year ended September 30, 2016, net income includes the gain on sale of assets of approximately $618,000 related to the sale of real estate and approximately $9,893,000 of interest expense.

For the fiscal year ended September 30, 2017, net loss includes inventory casualty loss and net realizable adjustment of approximately $14,688,000 as a result of Hurricane Irma, additional asset impairments of long-lived assets of approximately $9,346,000, and interest expense of approximately $9,141,000. The net loss was partially offset by a gain on sale of assets of approximately $2,181,000.

For the fiscal year ended September 30, 2018, net income includes the gain on sale of assets of approximately $11,041,000 related to the sale of real estate, property and equipment and assets held for sale, and insurance proceeds received in the amount of approximately $9,429,000 relating to damages from Hurricane Irma. Net income also includes a one-time non-cash deferred income tax benefit of approximately $9,847,000, which resulted from the remeasurement of the Company's net deferred tax liabilities due to the 21% corporate tax rate that was enacted December 22, 2017, and the expiration of a capital loss carryforward, which expired at September 30, 2018, of approximately $5,634,000, resulting in an additional income tax expense. Additionally, net income includes approximately $8,561,000 of interest expense and $3,349,000 of impairments relating to net realizable adjustment on inventory and long-lived assets.

For the fiscal year ended September 30, 2019, net income includes a gain on sale of assets of approximately $13,166,000 related to the sale of real estate, property and equipment and assets held for sale. Net income also includes insurance proceeds received of approximately $486,000 in additional property and casualty claims reimbursement relating to Hurricane Irma and federal relief proceeds of approximately $15,597,000 under the Florida Citrus Recovery Block Grant (“CRBG”) program relating to Hurricane Irma. Additionally, net income includes approximately $7,180,000 of interest expense and $1,204,000 relating to net realizable adjustment on inventory and impairments of long-lived assets.

For the fiscal year ended September 30, 2020, net income includes a gain on sale of assets of approximately $30,424,000 related to the sale of real estate, property and equipment and assets held for sale. Net income also includes federal relief proceeds of approximately $4,629,000 under the Florida CRBG program relating to Hurricane Irma. Additionally, net income includes approximately $5,981,000 of interest expense and $1,321,000 relating to impairments of long-lived assets.

Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations

The following discussion and analysis should be read in conjunction with the accompanying Consolidated Financial Statements and related Notes thereto.

Cautionary Statement Regarding Forward-Looking Information

We provide forward-looking information in this Annual Report on Form 10-K, particularly in this Management’s Discussion and Analysis of Financial Condition and Results of Operations, pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995, Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). Any statements in this Annual Report on Form 10-K that are not historical facts are forward-looking statements. Forward-looking statements include, but are not limited to, statements that express our intentions, beliefs, expectations, strategies, predictions or any other statements relating to our future activities or other future events or conditions. These statements are based on our current expectations, estimates and projections about our business based, in part, on assumptions made by our management and can be identified by terms such as “plans,” “expect,” “may,” "anticipate,” “intend,” “should be,” “will be” “is likely to,” “believes,” and similar expressions referring to future periods. Alico believes the expectations reflected in the forward-looking statements are reasonable but cannot guarantee future results, level of activity, performance or achievements. Actual results may differ materially from those expressed or implied in the forward-looking statements. Therefore, Alico cautions you against relying on any of these forward-looking statements. Factors which may cause future outcomes to differ materially from those foreseen in forward-looking statements include, but are not limited to: changes in laws, regulation and rules; weather conditions that affect production, transportation, storage, demand, import and export of fresh product and their by-products; increased pressure from diseases including citrus greening and citrus canker, as well as insects and other pests; disruption of water supplies or changes in water allocations; market pricing of citrus; pricing and supply of raw materials and products; market responses to industry volume pressures; pricing and supply of energy; changes in interest rates; availability of financing for land development activities and other growth and corporate opportunities; onetime events; acquisitions and divestitures; seasonality; our ability to achieve the anticipated cost savings under the Alico 2.0 Modernization program; labor disruptions; inability to pay debt obligations; inability to engage in certain transactions due to restrictive covenants in debt instruments; government restrictions on land use; changes in agricultural land values; marketimpact of the COVID-19 outbreak and pricingcoronavirus pandemic on our agriculture operations, including without limitation demand for product, supply chain, health and availability of our labor force, the labor force of contractors we engage, and the labor force of our competitors; other risks duerelated to concentrated ownershipthe duration and severity of stock marketthe COVID-19 outbreak and pricing risks duecoronavirus pandemic and its impact on Alico’s business; the impact of the COVID-19 outbreak and coronavirus pandemic on the U.S. and global economies and financial markets; access to concentrated ownership of stock; the Company's receipt of future funding from the state of Florida in connection with water retention projects; any Federal relief received in the future by the Company in connection with Hurricane Irma;governmental loans and incentives; any reduction in the public float resulting from the 2018 tender offer or any subsequent repurchases of common stock by the Company; recentAlico; changes in the Equity Planequity awards to Employees; continuation ofemployees; whether the Company's dividend policy;policy, including its recent increased dividend amounts, is continued; expressed desire of certain of our stockholdersshareholders to liquidate their shareholdings by virtue of past market sales of common stock, by sales of common stock or by way of future transactions; political changes and economic crises; competitive actions by other companies; changes in dividends; increased competition from international companies; changes in environmental regulations and their impact on farming practices; the ability to secure permits for the Water Storage Contract and Project from the South Florida Water Management District; the land ownership policies of governments; changes in government farm programs and policies and international reaction to such programs; changes in pricing calculations with our customers; fluctuations in the value of the U. S.U.S. dollar, interest rates, inflation and deflation rates; length of terms of contracts with customers; and changes in and effects of crop insurance programs, global trade agreements, trade restrictions and tariffs; and soil conditions, harvest yields, prices for commodities, and crop production expenses. These assumptionsforward-looking statements are not guarantees of future performance and involve risks, uncertainties and assumptions that are difficult to predict. Therefore, actual outcomes and results may differ materially from what is expressed or forecasted in the forward-looking statements due to numerous factors, including those Risks Factors included in Part I, Item 1A and elsewhere in this Annual Report on Form 10-K.

Introduction

Introduction

Alico, Inc. (“Alico”), together with its subsidiaries (collectively, the “Company", "we", "us" or "our”), is a holding company with assets and related operations in agriculture, land management and natural resources. We are a Florida agribusiness and land management company with a legacy of achievement and innovation in citrus, cattle and resource conservation. We own approximately 111,000100,000 acres of land in eight Florida counties, which includesholding mineral rights on approximately 90,000 acres of mineral rights.those owned acres. Our principal lines of business are now citrus groves and water storageland management and other operations, which include land conservation, encompassing environmental services, land leasing and related support operations. Prior to the sale of certain ranch land to the State of Florida in September 2020, the Company’s business line also included Water Resources. Prior to the sale of our breeding herd in January 2018, the Company’s business line also included cattle ranching. Our mission is to create value for our customers and stockholdersshareholders by managing existing lands to their optimal current income and total returns. Alico opportunistically acquires new agricultural assets and produces high quality agricultural products while exercising responsible environmental stewardship.

Management's Discussion and Analysis of Financial Condition and Results of Operations (“MD&A”) is intended to help provide an understanding of results of operations, financial condition and changes in financial condition for the periods presented. This MD&A is organized as follows:

•	Business Overview.This section provides a general description of our business, as well as other matters that we believe are important in understanding our results of operations and financial condition.

•	Consolidated Results of Operations.This section provides an analysis of our results of operations for each of the three fiscal years ended September 30, 2019.2020. Our discussion is presented on a consolidated basis and includes discussion on future trends by segment.

•	Liquidity and Capital Resources. This section provides an analysis of our cash flows for each of the three fiscal years ended September 30, 20192020 and our outstanding debt, commitments and cash resources as of September 30, 2019. 2020.

•

Critical Accounting Policies.This section identifies those accounting policies that we consider important to our results of operations and financial condition, require significant judgment and involve significant management estimates. Our significant accounting policies, including those considered to be critical accounting policies, are summarized in Note 2, "Summary“Summary of Significant Accounting Policies,"” to the accompanying Consolidated Financial Statements.

Business Overview

Business Description

Alico, Inc., together with its subsidiaries (collectively, “Alico”, the “Company”, “we”, “us” or “our”) generates operating revenues primarily from the sale of its citrus products and grazing and hunting leasing. The Company operates as two business segments and all of its operating revenues are generated in the United States. DuringFor the fiscal year ended September 30, 2019,2020, the Company generated operating revenues of approximately $122,251,000,$92,507,000, income from operations of approximately $45,214,000,$6,921,000, and net income attributable to common stockholders of approximately $37,833,000.$23,662,000. Cash provided by operating activities was approximately $48,832,000 during$1,049,000 for the fiscal year ended September 30, 2019.

2020.

Fiscal Year Highlights and Other Developments

Alico 2.0 Modernization Program

The COVID-19 Pandemic

On November 16, 2017, we announcedMarch 11, 2020, the Alico 2.0 Modernization ProgramWorld Health Organization declared the current novel coronavirus outbreak (“Alico 2.0”COVID-19”). This program was intended to transform three legacy businesses (Alico, Orange Co.,be a global pandemic. In response to this declaration and Silver Nip) into a single efficient enterprise, Alico Citrus, so we would remain onethe rapid spread of COVID-19 within the United States, federal, state and local governments throughout the country have imposed varying degrees of restrictions on social and commercial activity to promote social distancing in an effort to slow the spread of the leadersillness. These measures have had a significant adverse impact upon many sectors of the economy, including certain agriculture businesses.

During March 2020, as a precautionary measure to ensure financial flexibility and maintain maximum liquidity in response to the COVID-19 pandemic, the Company implemented several measures that we believe would help ensure sufficient liquidity for the next several months, including drawing down an aggregate of $70,000,000 on its revolving credit facilities. This decision was made to safeguard the Company’s liquidity and to increase available cash on hand in the U.S. citrus industry. This initiative wasevent that a more protracted COVID-19 outbreak were to explore every aspect of Alico’s citrus and ranch operations, including corporate and operational cost structures, grove costs, purchasing and procurement, non-performing and under-performing assets, professional fees, and human resources efficiency.

Under this program, Alico expected to reduce its operating costs. Alico has executedput a significant strain on the efficiencies identifiedfinancial institutions and their ability to loan funds. As of September 30, 2020, the Company, believing that despite the protracted COVID-19 outbreak, the financial institutions industry was experiencing less negative impact from the outbreak than originally expected, proceeded to pay down the majority of the amounts drawn under its revolving credit facilities.

Additionally, for the protection of our employees per the Centers For Disease Control and Prevention (CDC) guidelines, the Company arranged to have the majority of office personnel work remotely, has taken steps to allow and encourage greater separation for our employed and contracted field workers and has improved margins through better purchasing, more precise application of selected fertilizersworked with its harvesters, haulers and chemicals, outsourcing work such as harvesting, hauling, and certain caretaking tasks, and by streamlining grove management. We have also deployed a more efficient labor model that is consistent and uniform for field staffing and grove operations and is aligned with the geographical footprint of the citrus groves. This effort has helpedsuppliers to transition us to a high-quality, low-cost producer of citrus which we anticipate will continue for future years to come.

In combination with these efforts, the Company worked to maintain operational efficiencies and deploy its resources to solidify the Company's position as a leader in the recovering citrus industry.

Under Alico 2.0, we also decided to divest assets that generated low rates of return and shut down parts of our operations that were not profitable. Alico Citrus has generated cash of $57,800,000, under Alico 2.0 through September 30, 2019. This has been facilitated through (i) the shut down and sale of its nursery in Gainesville, Florida, (ii) the sale of certain underperforming groves, (ii) the sale of its breeding herd, (iv) the sale of certain parcels of land on its Ranch, (v) the sale of certain trailers related to our logistics division, and (vi) the sale of certain real estate assets that were not strategic to our business plan.

In January 2018, the Company sold its breeding herd and leased grazing rights on the Ranch to a third party operator. However, theminimize interactions. The Company continues to ownassess the property and continues to conduct its long-term dispersed water program and wildlife management programs.

Alico 2.0 also included an enhanced program to plant more citrus trees. The Company planted over 400,000 trees in both fiscal year 2019 and 2018 to help positionsituation on a routine basis.

To date, the Company has experienced no material adverse impacts from this pandemic.

Citrus Grove Management Agreement

On July 16, 2020, the Company executed an agreement with an affiliated group of third parties to provide citrus grove caretaking and harvest and haul management services for future production growth.

Tender Offer

On September 5, 2018,approximately 7,000 acres owned by such third parties. Pursuant to this agreement, the Board of Directors approved and Alico announcedCompany is to be reimbursed by the commencement of an issuer offer (the “Tender Offer”) to purchase up to $19,999,990 in value of sharesthird parties for all of its common stock at a purchase price of $34.00 per share. On October 3, 2018, upon the terms and subject to the conditions described in the Offer to Purchase dated September 5, 2018, including the ability to increase the aggregate value of shares purchased, Alico repurchased an aggregate of 752,234 shares at a price of $34.00 per share aggregating $25,575,956. These shares represented approximately 9.2% of the total number of shares of the Company’s common stock issued and outstanding as of October 2, 2018. Included in the 752,234 shares were 163,999 shares that the Company elected to purchase pursuant to its right to purchase up to an additional 2% of its outstanding shares of common stock. 734 Investors, LLC, Alico’s largest stockholder from 2013 until November 12, 2019, participated in the Tender Offer by selling a small percentage of its holdings of the Company’s common stock. Members of neither the management team nor the Board of Directors sold any shares directly in the Tender Offer.

Termination Proceedings against Mr. Remy W. Trafelet

On November 19, 2018, Alico, with unanimous approval of the members of the Board of Directors, other than Remy W. Trafelet, notified Mr. Trafelet, who was at the time the Company's President and Chief Executive Officer and a member of the Board of Directors, that it intended to consider terminating his employment for “cause” pursuant to the terms of his employment agreement with the Company and option agreements entered into under the Company's Stock Incentive Plan of 2015 (collectively, the “Compensation Documents”). On November 28, 2018, the parties in the Florida Litigation (as defined below) stipulated to an order which provided, among other things, that pending the resolution of the Delaware Litigation (as defined below), the Board of Directors would not take any action out of the routine day-to-day operations conducted in the ordinary course of business, including removing any corporate officers or directors from positions held as of November 27, 2018.

As described in “Note 16. Commitments and Contingencies” to the condensed consolidated financial statements in Part II Item 8, of this Annual Report on Form 10-K, on February 11, 2019, the parties to the Florida Litigation entered into the Alico Settlement Agreement wherein the parties agreed to promptly dismiss all claims in the Florida Litigation, including thosecosts incurred related to the termination proceedings against Mr. Trafelet,providing these services and Mr. Trafelet agreedalso is to voluntarily resign as Presidentreceive a management fee based on acres covered under this agreement.

Agreements with Tropicana

On each of May 18, 2020 and Chief Executive Officer and a member of the Company’s Board of Directors, effective upon the execution of the Alico Settlement Agreement.

As contemplated by the Alico Settlement Agreement, on February 11, 2019,May 20, 2020, the Company entered into a new agreement to supply Tropicana, its largest customer, with citrus fruit. These new agreements are effective October 1, 2020, conclude on July 31, 2024, and succeed an existing agreement that expired at the Consulting Agreement with Mr. Trafelet and 3584, Inc. (the "Consultant"). Pursuant to the Consulting Agreement, Mr. Trafelet agreed to make himself available to provide consulting services to the Company through the Consultant for up to 24 months. In exchange for the consulting services, the Consultant is receiving an annual consulting feeend of $400,000. If the Company terminates the consulting period (other than in certain specified circumstances), the Company will continue to pay the consulting fees described in the immediately preceding sentence through the balance of the 24-month term.

In addition, as contemplated by the Alico Settlement Agreement, the Company entered into the Registration Rights Agreement with Mr. Trafelet, relating to the Registrable Securities. The Registration Rights Agreement required the Company to, among other things and subject to the terms and conditions thereof, use reasonable best efforts to file with the SEC a registration statement on Form S-3 covering the resale of the Registrable Securities. On October 10, 2019, Mr. Trafelet executed a waiver whereby he waived the S-3 Registration Rights but maintained all other rights arising under the Registration Rights Agreement and all rights arising under Section 14 of the Alico Settlement Agreement.

Management and Board Changes

On April 11, 2019, the Board of Directors announced the appointment of Mr. John E. Kiernan as President and Chief Executive Officer and Mr. Richard Rallo as Chief Financial Officer, both effective July 1, 2019. Additionally, Mr. Benjamin D. Fishman, the Company’s current Interim President, agreed to resign from this position effective July 1, 2019. In addition, on April 11, 2019, Mr. Henry A. Slack, the current Executive Chairman of the Board, informed the Board that he agreed to step down as Executive Chairman of the Board, effective July 1, 2019. Mr. Slack’s decision to step down as Executive Chairman of the Board was not the result of any disagreement with the Company on any matter relating to the Company’s operations, policies or practices. Mr. Slack will remain a member of the Board of Directors. The Board appointed Mr. Benjamin D. Fishman, the Company’s current Interim President, to the role of non-employee Executive Chairman of the Board, effective July 1, 2019.

On April 29, 2019, the Board of Directors appointed Mr. Toby K. Purse as a member of the Board of Directors, to serve until the 2020 annual meeting of the Company’s shareholders or until his earlier death, resignation, or removal in accordance with the Amended and Restated Bylaws of the Company. The Board of Directors has affirmatively determined that Mr. Purse qualifies as an independent director under the rules of the Nasdaq Stock Exchange and as defined under applicable law. Mr. Purse has also been appointed to serve as a member of the audit committee of the Board of Directors.

September 2020.

Federal Relief Program

The Company is eligible for Hurricane Irma federal relief programs for block grants that are being administered through the State of Florida. During the fourth quarter of 2019 and for the fiscal year ended September 30, 2020 and 2019, the Company received approximately $4,629,000 and $15,597,000, respectively, under the Florida Citrus Recovery Block Grant (“CRBG”) program. This represents the Part 1 and a portion of the Part 2 reimbursement under a three-part program. Subsequent to fiscal year end 2019, the Company received additional proceeds of approximately $4,136,000 under the Florida CRBG program. This represents another portion of the Part 2 reimbursement under a three-part program. The timing and amount to be received under the remaining portion of Part 2 and Part 3 of the program, if any, has not been finalized.

Distribution of Shares by 734 Investors

On November 14, 2019, 734 Investors filed a Form 4 and an amendment to Schedule 13D with the SEC disclosing that on November 12, 2019, it distributed all of its shares of Company common stock previously held by it, consisting of 3,173,405 shares, on a pro rata basis, to its members. Prior to such distribution, 734 Investors was the Company’s largest shareholder.

Employee and Board of Directors Matters

On August 6, 2020, the Board of Directors increased the number of its directors by two and appointed Mr. Adam Putnam and Ms. Kate English as directors, each to serve until the 2021 annual meeting of the Company’s shareholders or until his or her earlier death, resignation, or removal in accordance with the Amended and Restated Bylaws of the Company.

In December 2019, Mr. George R. Brokaw, the then Executive Vice Chairman, informed the Board of Directors that he would voluntarily step down as Executive Vice Chairman effective December 31, 2019 and that change has taken effect. After the effectiveness of this change, Mr. Brokaw has remained a member of the Board of Directors.

Effective February 27, 2020 (which was immediately after the 2020 Annual Meeting of Shareholders), by way of action that has been taken by and at the direction of the Board of Directors, Benjamin D. Fishman, the non-employee Executive Chairman, became the Chairman of the Board. Mr. Fishman has remained a non-employee director.

Condensed Consolidated Results of Operations

The following discussion provides an analysis of Alico's results of operations and should be read in conjunction with the accompanying Consolidated Statements of Operations for the fiscal years ended September 30, 2020, 2019 2018 and 2017:2018:

(in thousands)		Fiscal Year Ended																Fiscal Year Ended
		September 30,								Change								September 30,								Change
		2020				2019				$				%				2019				2018				$				%
Operating revenues:
Alico Citrus		$	89,369			$	119,031			$	(29,662	)			(24.9	)%		$	119,031			$	78,121			$	40,910				52.4	%
Land Management and Other Operations			3,138				3,220				(82	)			(2.5	)%			3,220				3,160				60				1.9	%
Total operating revenues			92,507				122,251				(29,744	)			(24.3	)%			122,251				81,281				40,970				50.4	%
Gross profit (loss):
Alico Citrus			17,088				59,437				(42,349	)			(71.3	)%			59,437				26,412				33,025				125.0	%
Land Management and Other Operations			831				923				(92	)			(10.0	)%			923				(819	)			1,742			NM
Total gross profit			17,919				60,360				(42,441	)			(70.3	)%			60,360				25,593				34,767				135.8	%
General and administrative expenses			10,998				15,146				(4,148	)			(27.4	)%			15,146				15,058				88				0.6	%
Income from operations			6,921				45,214				(38,293	)			(84.7	)%			45,214				10,535				34,679			NM
Total other income, net			24,456				5,019				19,437			NM					5,019				2,655				2,364				89.0	%
Income before income taxes			31,377				50,233				(18,856	)			(37.5	)%			50,233				13,190				37,043			NM
Income tax provision			7,663				12,783				(5,120	)			(40.1	)%			12,783				390				12,393			NM
Net income			23,714				37,450				(13,736	)			(36.7	)%			37,450				12,800				24,650				192.6	%
Net (income) loss attributable to noncontrolling interests			(52	)			383				(435	)		NM					383				250				133				53.2	%
Net income attributable to Alico, Inc. common stockholders		$	23,662			$	37,833			$	(14,171	)			(37.5	)%		$	37,833			$	13,050			$	24,783				189.9	%

(in thousands)	Fiscal Year Ended															Fiscal Year Ended
	September 30,								Change							September 30,								Change
	2019				2018				$				%			2018				2017				$				%
Operating revenues:
Alico Citrus	$	119,031			$	78,121			$	40,910			52.4	%		$	78,121			$	123,441			$	(45,320	)		(36.7	)%
Water Resources and Other Operations	3,220				3,160				60				1.9	%		3,160				6,388				(3,228		)		(50.5	)%
Total operating revenues	122,251				81,281				40,970				50.4	%		81,281				129,829				(48,548		)		(37.4	)%
Gross profit (loss):
Alico Citrus	59,437				26,412				33,025				125.0	%		26,412				11,494				14,918				129.8	%
Water Resources and Other Operations	923				(819		)		1,742				(212.7	)%		(819		)		(2,564		)		1,745				(68.1	)%
Total gross profit	60,360				25,593				34,767				135.8	%		25,593				8,930				16,663				186.6	%
General and administrative expenses	15,146				15,058				88				0.6	%		15,058				15,024				34				NM
Income (loss) from operations	45,214				10,535				34,679				329.2	%		10,535				(6,094		)		16,629				(272.9	)%
Total other income (expense)	5,019				2,655				2,364				89.0	%		2,655				(7,248		)		9,903				(136.6	)%
Income (loss) before income taxes	50,233				13,190				37,043				280.8	%		13,190				(13,342		)		26,532				(198.9	)%
Income tax provision (benefit)	12,783				390				12,393				NM			390				(3,846		)		4,236				(110.1	)%
Net income (loss)	37,450				12,800				24,650				192.6	%		12,800				(9,496		)		22,296				(234.8	)%
Net loss attributable to noncontrolling interests	383				250				133				53.2	%		250				45				205				455.6	%
Net income (loss) attributable to Alico, Inc. common stockholders	$	37,833			$	13,050			$	24,783			189.9	%		$	13,050			$	(9,451	)		$	22,501			(238.1	)%

NM - Not meaningful

The following table presents our operating revenues, by segment, as a percentage of total operating revenues for the fiscal years ended September 30, 2020, 2019 2018 and 2017:2018:

		Fiscal Year Ended
		September 30,
		2020				2019				2018
Operating revenues:
Alico Citrus			96.6	%			97.4	%			96.1	%
Land Management and Other Operations			3.4	%			2.6	%			3.9	%
Total operating revenues			100.0	%			100.0	%			100.0	%

	Fiscal Year Ended
	September 30,
	2019			2018			2017
Operating revenues:
Alico Citrus	97.4	%		96.1	%		95.1	%
Water Resources and Other Operations	2.6	%		3.9	%		4.9	%
Total operating revenues	100.0	%		100.0	%		100.0	%

The following discussion provides an analysis of the Company's operating segments:

Alico Citrus

(in thousands, except per box and per pound solids data)
		Fiscal Year Ended																Fiscal Year Ended
		September 30,								Change								September 30,								Change
		2020				2019				Unit				%				2019				2018				Unit				%
Operating Revenues:
Early and Mid-Season		$	31,303			$	39,574			$	(8,271	)			(20.9	)%		$	39,574			$	24,309			$	15,265				62.8	%
Valencias			50,060				73,480				(23,420	)			(31.9	)%			73,480				48,865				24,615				50.4	%
Fresh Fruit			2,321				3,629				(1,308	)			(36.0	)%			3,629				2,054				1,575				76.7	%
Grove Management Services			4,599				1,342				3,257			NM					1,342				1,808				(466	)			(25.8	)%
Purchase and Resale of Fruit			850				943				(93	)			(9.9	)%			943				809				134				16.6	%
Other			236				63				173			NM					63				276				(213	)			(77.2	)%
Total		$	89,369			$	119,031			$	(29,662	)			(24.9	)%		$	119,031			$	78,121			$	40,910				52.4	%
Boxes Harvested:
Early and Mid-Season			3,146				3,114				32				1.0	%			3,114				1,811				1,303				71.9	%
Valencias			4,165				4,790				(625	)			(13.0	)%			4,790				2,891				1,899				65.7	%
Total Processed			7,311				7,904				(593	)			(7.5	)%			7,904				4,702				3,202				68.1	%
Fresh Fruit			267				210				57				27.1	%			210				125				85				68.0	%
Total			7,578				8,114				(536	)			(6.6	)%			8,114				4,827				3,287				68.1	%
Pound Solids Produced:
Early and Mid- Season			17,947				16,873				1,074				6.4	%			16,873				9,194				7,679				83.5	%
Valencias			25,631				29,854				(4,223	)			(14.1	)%			29,854				17,319				12,535				72.4	%
Total			43,578				46,727				(3,149	)			(6.7	)%			46,727				26,513				20,214				76.2	%
Pound Solids per Box:
Early and Mid-Season			5.70				5.42				0.28				5.2	%			5.42				5.07				0.35				6.9	%
Valencias			6.15				6.23				(0.08	)			(1.3	)%			6.23				5.99				0.24				4.0	%
Price per Pound Solids:
Early and Mid-Season		$	1.74			$	2.35			$	(0.61	)			(26.0	)%		$	2.35			$	2.64			$	(0.29	)			(11.0	)%
Valencias		$	1.95			$	2.46			$	(0.51	)			(20.7	)%		$	2.46			$	2.82			$	(0.36	)			(12.8	)%
Price per Box:
Fresh Fruit		$	8.69			$	17.28			$	(8.59	)			(49.7	)%		$	17.28			$	16.43			$	0.85				5.2	%
Operating Expenses:
Cost of Sales		$	52,492			$	52,037			$	455				0.9	%		$	52,037			$	46,477			$	5,560				12.0	%
Harvesting and Hauling			19,897				22,079				(2,182	)			(9.9	)%			22,079				12,821				9,258				72.2	%
Grove Management Services			3,817				774				3,043			NM					774				1,177				(403	)			(34.2	)%
Purchase and Resale of Fruit			704				788				(84	)			(10.7	)%			788				662				126				19.0	%
Other			(4,629	)			(16,084	)			11,455				(71.2	)%			(16,084	)			(9,428	)			(6,656	)			70.6	%
Total		$	72,281			$	59,594			$	12,687				21.3	%		$	59,594			$	51,709			$	7,885				15.2	%
Gross Profit		$	17,088			$	59,437			$	(42,349	)			(71.3	)%		$	59,437			$	26,412			$	33,025				125.0	%

The table below presents key operating measures for the fiscal years ended September 30, 2019, 2018 and 2017:

(in thousands, except per box and per pound solids data)
	Fiscal Year Ended															Fiscal Year Ended
	September 30,								Change							September 30,								Change
	2019				2018				Unit				%			2018				2017				Unit				%
Operating Revenues:
Early and Mid-Season	$	39,574			$	24,309			$	15,265			62.8	%		$	24,309			$	45,999			$	(21,690	)		(47.2	)%
Valencias	73,480				48,865				24,615				50.4	%		48,865				67,146				(18,281		)		(27.2	)%
Fresh Fruit	3,629				2,054				1,575				76.7	%		2,054				5,735				(3,681		)		(64.2	)%
Purchase and Resale of Fruit	943				809				134				16.6	%		809				2,331				(1,522		)		(65.3	)%
Other	1,405				2,084				(679		)		(32.6	)%		2,084				2,230				(146		)		(6.5	)%
Total	$	119,031			$	78,121			$	40,910			52.4	%		$	78,121			$	123,441			$	(45,320	)		(36.7	)%
Boxes Harvested:
Early and Mid-Season	3,114				1,811				1,303				71.9	%		1,811				3,215				(1,404		)		(43.7	)%
Valencias	4,790				2,891				1,899				65.7	%		2,891				4,044				(1,153		)		(28.5	)%
Total Processed	7,904				4,702				3,202				68.1	%		4,702				7,259				(2,557		)		(35.2	)%
Fresh Fruit	210				125				85				68.0	%		125				328				(203		)		(61.9	)%
Total	8,114				4,827				3,287				68.1	%		4,827				7,587				(2,760		)		(36.4	)%
Pound Solids Produced:
Early and Mid-Season	16,873				9,194				7,679				83.5	%		9,194				17,950				(8,756		)		(48.8	)%
Valencias	29,854				17,319				12,535				72.4	%		17,319				24,661				(7,342		)		(29.8	)%
Total	46,727				26,513				20,214				76.2	%		26,513				42,611				(16,098		)		(37.8	)%
Pound Solids per Box:
Early and Mid-Season	5.42				5.07				0.35				6.9	%		5.07				5.58				(0.51		)		(9.1	)%
Valencias	6.23				5.99				0.24				4.0	%		5.99				6.10				(0.11		)		(1.8	)%
Price per Pound Solids:
Early and Mid-Season	$	2.35			$	2.64			$	(0.29	)		(11.0	)%		$	2.64			$	2.56			$	0.08			3.1	%
Valencias	$	2.46			$	2.82			$	(0.36	)		(12.8	)%		$	2.82			$	2.72			$	0.10			3.7	%
Price per Box:
Fresh Fruit	$	17.28			$	16.43			$	0.85			5.2	%		$	16.43			$	17.48			$	(1.05	)		(6.0	)%
Operating Expenses:
Cost of Sales	$	52,037			$	46,477			$	5,560			12.0	%		$	46,477			$	84,909			$	(38,432	)		(45.3	)%
Harvesting and Hauling	22,208				12,921				9,287				71.9	%		12,921				21,520				(8,599		)		(40.0	)%
Purchase and Resale of Fruit	659				562				97				17.3	%		562				2,134				(1,572		)		(73.7	)%
Other	(15,310		)		(8,251		)		(7,059		)		85.6	%		(8,251		)		3,384				(11,635		)		(343.8	)%
Total	$	59,594			$	51,709			$	7,885			15.2	%		$	51,709			$	111,947			$	(60,238	)		(53.8	)%
Gross Profit	$	59,437			$	26,412			$	33,025						$	26,412			$	11,494			$	14,918

NM - Not meaningful

Our citrus groves produce the majority of our annual operating revenues and the citrus grove business is seasonal because it is tied to the growing and harvest season. Historically, the second and third quarters of Alico's fiscal year produce the majority of the annual revenues and working capital requirements are typically greater in the first and fourth quarters of the fiscal year, coinciding with the growing cycles.

The Company sells its Early and Mid-Season and Valencia oranges to processors that convert the majority of the citrus crop into orange juice. They generally buy the citrus on a pound solids basis, which is the measure of the soluble solids (sugars and acids) contained in one box of fruit. Fresh fruit is generally sold to packing houses that purchase the citrus on a per box basis. Other revenues consist of third-party grove caretaking and the purchase and reselling of fruit.

Alico's operating expenses consist primarily of cost of sales and harvesting and hauling costs. Cost of sales represents the cost of maintaining the citrus groves for the preceding calendar year and does not vary in relation to production. Harvesting and hauling costs represent the costs of bringing citrus product to processors and varies based upon the number of boxes produced. Other expenses include the period costs of third-party grove caretaking and the purchase and reselling of fruit.

The decrease in revenue for the fiscal year ended September 30, 2020, compared to the fiscal year ended September 30, 2019 was due to a decrease in the price per pound solids as well as a decrease in aggregate processed box production. The decrease in the price per pound solids in the market place was a result of excess supply from domestic and international growers. The decrease in aggregate processed box production was the result of greater fruit drop and smaller fruit size of Valencias in the current harvest season as compared to the prior harvest season, offset in part by an increase in processed box production of the Early and Mid-season fruit.

As previously disclosed, the Company anticipated a reduction in the market prices throughout the 2019-20 harvest season as a result of the excess supply from domestic and international growers. However, due to an increase in the consumption of Not from Concentrate Orange Juice ("NFC"), as indicated in the published Nielsen data, since March 2020, inventory levels have decreased and, as a result, the Company anticipates that market pricing will improve in the 2020-21 harvest season.

The Company completed its harvest season in the middle of May 2020 and was able to complete the harvest without any negative impact from the COVID-19 pandemic.

The increase in revenues for the fiscal year ended September 30, 2019, compared to the fiscal year ended September 30, 2018, was primarily related to the negative impact of Hurricane Irma on the prior fiscal year harvest. As a result of Hurricane Irma, which occurred in September 2017, the Company experienced a greater amount of fruit drop and consequently harvested approximately 3,202,000 fewer boxes in fiscal year 2018, as compared to the fiscal year 2019. The Company also saw an overall increase in pound solids per box in the fiscal year 2019, which was 5.91 as compared to 5.64 for the fiscal year 2018. In addition, the increase in revenue, to a smaller extent, was due to a greater number of boxes of fresh fruit being sold for thein fiscal year 2019.

The decrease in revenues for the fiscal year ended September 30, 2018, compared to the fiscal year ended September 30, 2017, was primarily due to the impact of Hurricane Irma. The Company experienced a greater amount of fruit drop from the impact of Hurricane Irma and consequently harvested approximately 2,557,000 fewer

Total processed boxes harvested in fiscal year 2018,2020 decreased by approximately 7.5%, as compared to the same period in fiscal year 2017. The Company also saw an overall decrease in pound2019. Pound solids per box which went from 5.87 in the fiscal year ended September 30, 2017 to 5.64 in the fiscal year ended September 30, 2018. The Company did experience a smaller fruit drop with respect to its Valencia fruit which is harvested later in the year as compared toincreased by approximately 6.4% and decreased by approximately 14.1% for the Early and Mid-Season variety and as such realized a smaller overall reductionValencia oranges, respectively. The combination of these items resulted in boxes produced. In addition, the decreaseapproximately 3,149,000 fewer pound solids sold in revenue, to a smaller extent, was due to fewer boxes of fresh fruit being sold for the fiscal year ended September 30, 2018. The decrease in revenues from purchase and resale of fruit and other revenues reflects the Company’s decision2020, as compared to reduce third party fruit purchases and third party caretaking services.

fiscal year 2019.

Total processed boxes harvested in fiscal year 2019 increased by approximately 68.1%, as compared to fiscal year 2018. Pound solids per box increased by approximately 6.9% and approximately 4.0% for the Early and Mid-Season and Valencia oranges, respectively. The combination of these items resulted in approximately 20,214,000 of additional pound solids sold in fiscal year 2019, as compared to fiscal year 2018.

Total processed boxes harvested in fiscal year 2018 declined by approximately 35.2%, as compared to fiscal year 2017. Pound solids per box decreased by approximately 9.1% and approximately 1.8% for the Early and Mid-Season and Valencia oranges, respectively. The combination of these items resulted in approximately 16,098,000 less pound solids sold in fiscal year 2018, as compared to fiscal year 2017.

The USDA, in its November 8, 201910, 2020 Citrus Crop Forecast for the 2019-202020-21 harvest season, indicated its expectation that the Florida orange crop will increasedecrease from approximately 71,600,000 boxes for the 2018-19 crop year to approximately 74,000,00067,300,000 boxes for the 2019-20 crop year an increaseto approximately 57,000,000 boxes for the 2020-21 crop year, a decrease of approximately 3.4%15.3%. While theAs production is estimated to be slightly higherlower than in the prior year, the Company anticipates there will be a continued reductionan increase in the market prices in the 2019-202020-21 harvest season primarily driven by an increase in demand for NFC orange juice, which will more than offset the negative impact from the estimated decline in production.

The increase in operating expenses for the fiscal year 2020, as a result of excess supply from domestic and international growers.

The Company originally estimated itscompared to the fiscal year 2019, processed boxes would increase by approximately 31%-37% comparedprimarily relates to processed boxes for fiscal year 2018. Based on the harvesting of fruit, the Company increased processed box production for fiscal year 2019 by approximately 68% compared to processed boxes for fiscal year 2018. The improvement isreceiving less federal relief proceeds through the result of both the Early & Mid-season and Valencia variety fruit experiencing less fruit drop then was anticipated upon making the estimate in production.

The increase in gross profit for fiscal year 2019, as compared to fiscal year 2018, was primarily a result of (i) increased citrus revenue and (ii) proceeds received underFlorida CRBG program relating to Hurricane Irma, which wasare recorded as a reduction of operating costs.expenses, during fiscal year 2020, as compared to fiscal year 2019. The increaseCompany received proceeds of approximately $4,629,000 and $15,597,000 through the Florida CRBG program relating to Hurricane Irma during the fiscal years ended September 30, 2020 and 2019, respectively. Additionally, the Company recorded additional grove management services expense of approximately $3.0 million. Partially offsetting this decrease in operating expenses was due to the increaseda reduction in harvesting and hauling costs which isexperienced by the directCompany as a result of increased citrusfewer processed box production and (ii)boxes being harvested during the Company allocating a greater amount of its accumulated costs to its cost of goods sold. Partially offsetting this increase in operating expenses was the Company received a greater amount of funds through the CRBG

and insurance claim reimbursement relating to Hurricane Irma in fiscal year 2019,ended September 30, 2020 as compared to the same period in fiscal year 2018.

Thethe prior year.

On July 16, 2020, the Company executed an agreement with an affiliated group of third parties to provide citrus grove caretaking and harvest and haul management services for approximately 7,000 acres owned by such third parties. Under the terms of this agreement, the Company is to be reimbursed by the third parties for all of its costs incurred related to providing these services and also is to receive a management fee based on acres covered under this agreement. As the Company provides these citrus grove caretaking management services, the Company will be recording both an increase in gross profit for fiscal year 2018, as compared to fiscal year 2017, was primarily driven by a decrease inrevenues and expenses. For the fourth quarter ended September 30, 2020, the Company recorded approximately $3,300,000 of operating revenue, including the management fee, and approximately $3,000,000 of operating expenses which was partially offset by a reduction in revenues. The decrease in operating costs is due to (i) the Company allocating a smaller amount of accumulated costs to cost of goods sold, (ii) less harvesting and hauling costs incurred due to fewer boxes being harvested, and (iii) the Company receiving approximately $9,429,000 of insurance proceeds. Partially offsetting this decrease in operating expenses, along with the reduction in revenue, was impairment charges of approximately $3,349,000 relating to net realizable adjustment on inventory and long-lived assets. The decrease in revenue is primarily a result of the impact of Hurricane Irma.this arrangement.

Water ResourcesLand Management and Other Operations

The table below presents key operating measures for the fiscal years ended September 30, 2020, 2019 2018 and 2017:2018:

(in thousands)		Fiscal Year Ended																Fiscal Year Ended
		September 30,								Change								September 30,								Change
		2020				2019				$				%				2019				2018				$				%
Revenue From:
Land and other leasing		$	2,683			$	2,787			$	(104	)			(3.7	)%		$	2,787			$	2,595			$	192				7.4	%
Sale of calves and culls			—				—				—			NM					—				57				(57	)			(100.0	)%
Other			455				433				22				5.1	%			433				508				(75	)			(14.8	)%
Total		$	3,138			$	3,220			$	(82	)			(2.5	)%		$	3,220			$	3,160			$	60				1.9	%
Operating Expenses:
Land and other leasing		$	955			$	1,047			$	(92	)			(8.8	)%		$	1,047			$	1,072			$	(25	)			(2.3	)%
Cost of calves sold			—				—				—			NM					—				1,075				(1,075	)			(100.0	)%
Water conservation			1,346				1,206				140				11.6	%			1,206				1,619				(413	)			(25.5	)%
Other			6				44				(38	)			(86.4	)%			44				213				(169	)			(79.3	)%
Total		$	2,307			$	2,297			$	10				0.4	%		$	2,297			$	3,979			$	(1,682	)			(42.3	)%
Gross Profit (loss)		$	831			$	923			$	(92	)			(10.0	)%		$	923			$	(819	)		$	1,742			NM

(in thousands)
	Fiscal Year Ended															Fiscal Year Ended
	September 30,								Change							September 30,								Change
	2019				2018				$				%			2018				2017				$				%
Revenue From:
Land and other leasing	$	2,787			$	2,595			$	192			7.4	%		$	2,595			$	2,294			$	301			13.1	%
Sale of calves and culls	—				57				(57		)		(100.0	)%		57				3,732				(3,675		)		(98.5	)%
Other	433				508				(75		)		(14.8	)%		508				362				146				40.3	%
Total	$	3,220			$	3,160			$	60			1.9	%		$	3,160			$	6,388			$	(3,228	)		(50.5	)%
Operating Expenses:
Land and other leasing	$	1,047			$	1,072			$	(25	)		(2.3	)%		$	1,072			$	466			$	606			130.0	%
Cost of calves sold	—				1,075				(1,075		)		(100.0	)%		1,075				3,527				(2,452		)		(69.5	)%
Water conservation	1,206				1,619				(413		)		(25.5	)%		1,619				1,794				(175		)		(9.8	)%
Other	44				213				(169		)		(79.3	)%		213				3,165				(2,952		)		(93.3	)%
Total	$	2,297			$	3,979			$	(1,682	)		(42.3	)%		$	3,979			$	8,952			$	(4,973	)		(55.6	)%
Gross Profit (loss)	$	923			$	(819	)		$	1,742						$	(819	)		$	(2,564	)		$	1,745

NM - Not meaningful

Land and other leasing includesinclude lease income from a leaseleases for grazing rights, hunting leases, a farm lease, a lease to a third party of an aggregate mine, and leases of oil extraction rights to third parties, and farmother miscellaneous income.

The slight decrease in revenues from Land Management and Other Operations for the fiscal year ended September 30, 2020 is primarily due to a reduction in the leased acreage relating to a cattle grazing lease. The reduction in the leased acreage was due to certain acres, which were included under this lease revenue.

arrangement, having been sold in September 2019.

On September 11, 2020, the Company sold approximately 10,700 acres on the western part of Alico Ranch to the State of Florida. Because the acres involved in the sale would have been critical to our planned dispersed water storage project, the Company has decided to no longer pursue permit approval activities for this particular project. As a result of this decision, the Company wrote-down approximately $598,000 of assets relating to this project during the fourth quarter of the fiscal year ended September 30, 2020. The Company anticipates that it will have no further expenses incurred relating to the dispersed water storage project moving forward.

The slight increase in revenues from Water ResourcesLand Management and Other Operations for the fiscal year ended September 30, 2019 is primarily due to the Company recording a full year of grazing lease revenue in fiscal year 2019, while only recording nine months of revenue as the lease for these grazing rights was executed on January 8, 2018, at the time of the sale of the cattle herd. Partially offsetting this increase was a decrease in farm lease revenue as a result of a lease not being renewed in fiscal year 2019. The Company continues to own the property and conduct its dispersed long-term water program and wildlife management programs.

The decrease in revenues from Water Resources and Other Operations for the fiscal year 2018, as compared to fiscal year 2017, was primarily due to selling of Alico's cattle herd in January 2018. All inventory costs that were accumulated at the date of sale were expensed. As part of this transaction, the Company entered into a long-term leasing arrangement with the purchaser for the grazing rights on the Ranch that provides an annual revenue stream of approximately $1,200,000. As a result of these changes, Alico renamed this division to Water Resources and Other Operations to reflect its focus on water storage and nutrient reduction. Alico believes that its dispersed water storage project is the largest and most cost-effective project of its kind in the United States, and believes, once permits from state and federal agencies have been approved, the project will store and prevent large volumes of water from entering the Caloosahatchee River, will remove substantial amounts of nitrogen from the watershed, and will help to rehydrate natural systems that eventually flow south into the Everglades.

Water storage and conservation

In December 2012, the South Florida Water Management District ("SFWMD") issued a solicitation request for projects to be considered for the Northern Everglades Payment for Environmental Services Program. In March 2013, the Company submitted its response proposing a dispersed water management project on a portion of its Ranch land to reduce harmful discharges to the Caloosahatchee Estuary.

On December 11, 2014, the SFWMD approved a contract with the Company. The contract term is eleven years and allows up to one year for implementation (design, permitting, construction and construction completion certification) and ten years of operation, whereby the Company will provide water retention services. Payment includes an amount not to exceed $4,000,000 of reimbursement for implementation. In addition, it provides for an annual fixed payment of $12,000,000 for operations and maintenance costs, as long as the project is in compliance with the contract and subject to annual District Board approval of funding. The contract specifies that the District Board has to approve the payments annually and there can be no assurance that it will approve the annual fixed payments. On September 19, 2018, the SFWMD issued a press release announcing the issuance of an Environmental Resource Permit for Alico. The SFWMD release also stated that (i) the issuance of the permit cleared the path for Alico to deliver a regional dispersed water storage project in the Caloosahatchee Watershed that has the opportunity to significantly reduce excessive Lake Okeechobee releases and storm water runoff to the Caloosahatchee Estuary, (ii) Alico has all necessary state approvals to proceed, and (iii) the project is expected to be operational within one year from the start of construction, which is contingent on Alico securing additional local and federal approvals. These approvals include a compatible use agreement from the Natural Resources Conservation Service, as well as approvals from the local water control districts. The project has made substantial progress toward receiving federal authorization from the US Army Corps of Engineers which includes consultation with US Fish & Wildlife Service and the Tribes of Florida. The approved Florida budget for the state’s 2019/2020 fiscal year included funding for the Program. Operating expenses were approximately $1,206,000, $1,619,000 and $1,794,000 for each of the three fiscal years ended September 30, 2019, 2018 and 2017, respectively.

General and Administrative

General and administrative expenses for the fiscal year ended September 30, 20192020 was approximately $15,146,000,$10,998,000, compared to approximately $15,058,000$15,146,000 for the fiscal year ended September 30, 2018.2019.

The decrease in general and administrative expenses for the fiscal year ended September 30, 2020, as compared to the fiscal year ended September 30, 2019, was primarily due to professional fees, relating to a corporate litigation matter, of approximately $2,300,000 being incurred for the fiscal year ended September 30, 2019. This litigation was settled and no further expenses were incurred relating to this matter during the fiscal year ended September 30, 2020.Additionally, as part of this settlement, the Company recorded consulting and separation fees of $800,000 during the fiscal year ended September 30, 2019. The Company also experienced a reduction due to (i) a one-time pension expense related to its deferred retirement benefit plan of approximately $965,000 in fiscal year 2019, (ii) a reduction in payroll expenses for the fiscal year ended September 30, 2020 of approximately $331,000 relating to one of the senior managers resigning in December 2019 and a reduction in bonuses granted to senior management, (iii) a decrease in stock compensation expense of approximately $204,000 as a result of certain stock options expense being accelerated in fiscal year ended September 30, 2020 and (iv) other smaller decreases in rent, consulting and Board of Director fees aggregating approximately $445,000. Partially offsetting these decreases was a lower amount of stock compensation expense of $823,000 recognized in fiscal year ended September 30, 2019 as a result of a former senior executive forfeiting his stock options as part of the settled litigation and an increase in Directors and Officers insurance of approximately $247,000.

The slight increase in general and administrative expenses for the fiscal year ended September 30, 2019, as compared to the fiscal year ended September 30, 2018, was primarily due to an increase in professional fees, relating to a corporate litigation matter, of approximately $2,300,000 during the fiscal year ended September 30, 2019. This litigation has been resolved with a settlement being reached on February 11, 2019. The Company does not anticipate further professional fees relating to this litigation. Additionally, as part of this settlement, the Company recorded consulting and separation fees of $800,000 during the fiscal year ended September 30, 2019. The Company also recorded a one-time pension expense related to its deferred retirement benefit plan of approximately $965,000 in fiscal year 2019. Partially offsetting these increases were decreases in expenses relatingdue to (i) a reduction in stock compensation expense of $823,000 as a result of a former senior executive forfeiting his stock options as part of the settled litigation, (ii) a reduction in rent expense of approximately $450,000 as a result of the Company not renewing its lease for office space in New York City, (iii) an acceleration of stock compensation expense in fiscal year 2018 of approximately $782,000 as a result of two senior executives forfeiting a portion of their stock options, and (iv) a reduction in payroll costs of approximately $1,261,000. The reduction in payroll costs was primarily from (i) a reduction in separation expenses of approximately $388,000; (ii) a reduction in accrual for paid-time-off of approximately $100,000; and (iii) a reduction in executive compensation expense of approximately $725,000 relating to the resignation of a former senior executive.

Other Income, net

Other income, net, for the fiscal years ended September 30, 2020 and 2019 was approximately $24,456,000 and approximately $5,019,000, respectively. The slight increase in generalother income, net was primarily due to the Company recording a higher gain on sale of real estate, property and administrative expensesequipment and assets held for sale in fiscal year 2018,2020, as compared to fiscal year 2019.In fiscal year 2020, the same periodCompany recorded a gain of approximately $30,424,000, which was generated primarily from the sale of land on its West Ranch in September 2020 to the State of Florida. For the fiscal year ended September 30, 2019, the Company recorded a gain of approximately $13,166,000, which was generated primarily for the sale of land on its West Ranch in September 2019. Additionally, the Company recognized a reduction of approximately $1,199,000 in interest expense in fiscal year 2017, primarily relates to increases in (i) bonus awards provided to senior executives and managers, (ii) an acceleration of stock compensation expense2020 as a result of two senior executives forfeiting a portion(i) the reduction of their stock options, (iii) costs relatedits long-term debt attributable to the Tender Offer which commenced in September 2018 and (iv) an increase in rent, which commenced October 30, 2017, as a result ofmaking its mandatory principal payments, (ii) the Company sellingprepaying approximately $4,455,000 on its office building in Fort Myers, FL,debt obligations and leasing back a portion of the space. These items resulted in an aggregate increase in general and administrative expenses of approximately $2,700,000. These increases were offset by decreases primarily attributable to salary and stock compensation expenses incurred with respect to employment agreements executed for new executives in the fiscal year 2017 which did not occur in the fiscal year 2018, a reduction of expenses incurred relating to separation and consulting arrangements, as well as(iii) a reduction in bad debt expense and recruiting fees.

Other (Expense) Income

interest rates.  

Other income, net for the fiscal years ended September 30, 2019 and 2018 was approximately $5,019,000 and approximately $2,665,000,$2,655,000, respectively. The increase in other income, net was primarily due to the Company recording a higher gain on sale of real estate, property

and equipment and assets held for sale in fiscal year 2019, as compared to fiscal year 2018. In fiscal year 2019, the Company recorded a gain of approximately $13,166,000, which was generated primarily for the sale of land on its West Ranch in September 2019. For the fiscal year ended September 30, 2018, the Company recorded a gain of $11,041,000 on the sale of real estate, property and equipment and assets held for sale, which included its corporate office building in Fort Myers, Florida, its Gal Hog property and a land parcel within its East Ranch resulting in gains of approximately $1,751,000, $6,709,000 and $1,759,000, respectively. Additionally, the Company incurred less interest expense of approximately $1,400,000$1,381,000 in fiscal year 2019, as compared to fiscal year 2018, primarily due to the Company recording imputed interest expense during the fiscal year ended September 30, 2018 relating to its Sugarcane transaction, which was terminated in fiscal year 2019.

Other income (expense), net, for the fiscal year ended September 30, 2018 and 2017 was approximately $2,655,000 and approximately $(7,248,000), respectively. The shift from other expense, net to other income, net is primarily due to recording a higher gain on sale of real estate, property and equipment and assets held for sale. For the fiscal year ended September 30, 2018, the Company sold certain properties and equipment which included its corporate office building in Fort Myers, Florida, its Gal Hog property and a land parcel within its East Ranch resulting in gains of approximately $1,751,000, $6,709,000 and $1,759,000, respectively. During the fiscal year ended September 30, 2017, the Company sold land and facilities in Hendry County, Florida, which resulted in a gain of approximately $1,371,000. Additionally, the Company incurred less interest expense of approximately $580,000 due to the continued pay-down of its long-term debt, as well as a prepayment made on a loan of approximately $4,453,000 with the proceeds from the asset sales.

Income Taxes

For the fiscal years ended September 30, 2020, 2019 2018 and 2017,2018, the provision (benefit) for income taxes was approximately $7,663,000, $12,783,000 $390,000 and $(3,846,000),$390,000, respectively, and the related effective income tax rates were approximately 25.45%24.50%, 2.96%25.45% and 28.83%2.96%, respectively. The change in the tax provision for the fiscal year ended September 30, 2020 is the result of the Company generating less net income during the current fiscal year as compared to the prior fiscal year.

The change in the tax provision for the fiscal year ended September 30, 2019 iswas the result of the Company generating greater net income during the current fiscal year 2019, as compared to the prior fiscal year. Additionally, a one-time non-cash deferred income tax benefit of approximately $9,847,000 was recorded in fiscal year 2018 which resulted from the remeasurement of the Company's net deferred tax liabilities due to the 21% corporate tax rate that was enacted December 22, 2017, and an effect of the expiration of its capital loss carryforward, which expired at September 30, 2018, of approximately $5,634,000 which was recorded in fiscal year 2018, thus resulting in an additional income tax expense.

The change in the provision for income taxes for the fiscal year ended September 30, 2018, as compared to fiscal year 2017, primarily resulted from (i) the Company generating net income, (ii) a one-time non-cash deferred income tax benefit of approximately $9,847,000 resulting from the remeasurement of the Company's net deferred tax liabilities due to the 21% corporate tax rate that was enacted December 22, 2017, and (iii) the expiration of its capital loss carryforward, which expired at September 30, 2018, of approximately $5,634,000, resulting in an additional income tax expense.

Seasonality

The Company is primarily engaged in the production of fruit for sale to citrus markets, which is of a seasonal nature, and subject to the influence of natural phenomena and wide price fluctuations. Historically, the second and third quarters of Alico's fiscal year produce the majority of the Company's annual revenue. Working capital requirements are typically greater in the first and fourth quarters of the fiscal year, coinciding with harvesting cycles. Because of the seasonality of the business, results for any quarter are not necessarily indicative of the results that may be achieved for the full fiscal year.

Liquidity and Capital Resources

A comparative balance sheet summary is presented in the following table:

(in thousands)		September 30,
		2020				2019				Change
Cash and cash equivalents and restricted cash		$	19,687			$	23,838			$	(4,151	)
Total current assets		$	51,899			$	61,977			$	(10,078	)
Total current liabilities		$	21,158			$	28,951			$	(7,793	)
Working capital		$	30,741			$	33,026			$	(2,285	)
Total assets		$	423,937			$	417,388			$	6,549
Principal amount of term loans and lines of credit		$	148,251			$	163,449			$	(15,198	)
Current ratio		2.45 to 1				2.14 to 1

(in thousands)	September 30,
	2019				2018				Change
Cash and cash equivalents and restricted cash	$	23,838			$	32,260			$	(8,422	)
Total current assets	$	61,977			$	71,061			$	(9,084	)
Total current liabilities	$	28,951			$	21,476			$	7,475
Working capital	$	33,026			$	49,585			$	(16,559	)
Total assets	$	417,388			$	423,422			$	(6,034	)
Principal amount of term loans and lines of credit	$	163,449			$	177,034			$	(13,585	)
Current ratio	2.14 to 1				3.31 to 1

Alico's business has historically generated positive net cash flows from operating activities. Sources of cash primarily include cash flows from operations, sales of under-performing land and other assets, amounts available under the Company's credit facilities and access to capital markets. Access to additional borrowings under revolving lines of credit is subject to the satisfaction of customary borrowing conditions. As a public company, Alico may have access to other sources of capital. However, access to, and availability of, financing on acceptable terms in the future will be affected by many factors, including (i) financial condition, prospects and credit rating, (ii) liquidity of the overall capital markets and (iii) the state of the economy. There can be no assurance that the Company will continue to have access to the capital markets on acceptable terms, or at all.

The principal uses of cash that affect Alico's liquidity position include the following: operating expenses including employee costs, the cost of maintaining the citrus groves, harvesting and hauling of citrus products, capital expenditures, stock repurchases, dividends, and debt service costs including interest and principal payments on term loans and other credit facilities.

facilities and acquisitions.

Management believes that a combination of cash-on-hand, cash generated from operations, asset sales and availability under the Company's lines of credit will provide sufficient liquidity to service the principal and interest payments on its indebtedness, and will satisfy working capital requirements and capital expenditures for at least the next twelve months and over the long term. Alico has a $70,000,000 working capital line of credit, of which approximately $69,540,000$66,659,000 is available for general use as of September 30, 2019,2020, and a $25,000,000 revolving line of credit, all of which is available for general use as of September 30, 20192020 (see Note 6. “Long-Term Debt and Lines of Credit" to the accompanying Consolidated Financial Statements). If the Company pursues significant growth and other corporate opportunities, it could have a material adverse impact on its cash balances, and may need to finance such activities by drawing down monies under its lines of credit or by obtaining additional debt or equity financing. There can be no assurance that additional financing will be available to the Company when needed or, if available, that it can be obtained on commercially reasonable terms. Any inability to obtain additional financing could impact Alico's ability to pursue different growth and other corporate opportunities.

The level of debt could have important consequences on Alico's business, including, but not limited to, increasing its vulnerability to general adverse economic and industry conditions, limiting the availability of cash flow to fund future investments, capital expenditures, working capital, business activities and other general corporate requirements, and limiting flexibility in planning for, or reacting to, changes in its business and industry.

Cash Management Impacts 

Cash and cash equivalents and restricted cash decreased from approximately $23,838,000 as of September 30, 2019 to approximately $19,687,000 as of September 30, 2020. Cash and cash equivalents and restricted cash decreased from approximately $32,260,000 as of September 30, 2018 to approximately $23,838,000 as of September 30, 2019. Cash and cash equivalents and restricted cash increased by approximately $28,865,000 as of September 30, 2018, as compared to September 30, 2017. The components of these changes are discussed below.

Consolidated Statements of Cash Flows

The following table details the items contributing to the changes in cash and cash equivalents and restricted cash for fiscal years ended September 30, 2020, 2019 2018 and 2017:2018:

(in thousands)		Fiscal Year Ended September 30,
		2020				2019				2018
Net cash provided by operating activities		$	1,049			$	48,832			$	18,578
Net cash provided by (used in) investing activities			9,489				(4,960	)			22,924
Net cash used in financing activities			(14,689	)			(52,294	)			(12,637	)
Net (decrease) increase in cash and cash equivalents and restricted cash		$	(4,151	)		$	(8,422	)		$	28,865

(in thousands)	Fiscal Year Ended September 30,
	2019				2018				2017
Net cash provided by operating activities	$	48,832			$	18,578			$	27,481
Net cash (used in) provided by investing activities	(4,960		)		22,924				(9,337		)
Net cash used in financing activities	(52,294		)		(12,637		)		(21,374		)
Net (decrease) increase in cash and cash equivalents and restricted cash	$	(8,422	)		$	28,865			$	(3,230	)

Net Cash Provided By Operating Activities

(in thousands)		Fiscal Year Ended September 30,												Fiscal Year Ended September 30,
		2020				2019				Change				2019				2018				Change
Net income		$	23,714			$	37,450			$	(13,736	)		$	37,450			$	12,800			$	24,650
Deferred gain on sale of sugarcane land			—				—				—				—				(967	)			967
Depreciation, depletion and amortization			14,520				13,924				596				13,924				13,756				168
Deferred income tax expense (benefit)			7,603				3,267				4,336				3,267				(1,955	)			5,222
Cash surrender value			(10	)			11				(21	)			11				(27	)			38
Deferred retirement benefits			(5,226	)			829				(6,055	)			829				(41	)			870
Gain on sale of real estate, property and equipment and assets held for sale			(30,424	)			(13,166	)			(17,258	)			(13,166	)			(10,281	)			(2,885	)
Inventory net realizable value adjustment		—					808				(808	)			808				1,115				(307	)
Loss on disposal of property and equipment			659				—				659				—				207				(207	)
Change in fair value of derivatives		—					989				(989	)			989				—				989
Impairment of long-lived assets			1,321				396				925				396				2,234				(1,838	)
Impairment of right-of-use asset			87				—				87				—				—				—
Non-cash interest expense on deferred gain on sugarcane land			—				—				—				—				1,361				(1,361	)
Insurance proceeds received for damage to property and equipment			—				(486	)			486				(486	)			(477	)			(9	)
Stock-based compensation expense			1,306				824				482				824				2,613				(1,789	)
Other			—				—				—				—				29				(29	)
Change in working capital			(12,501	)			3,986				(16,487	)			3,986				(1,789	)			5,775
Net cash provided by operating activities		$	1,049			$	48,832			$	(47,783	)		$	48,832			$	18,578			$	30,254

The following table details the items contributing to Net Cash Provided By Operating Activitiesdecrease in net cash provided by operating activities for the fiscal yearsyear ended September 30, 2020, as compared to the same period in fiscal year 2019, 2018was primarily due to (i) an increase in gain on sale of real estate, property and 2017:

(in thousands)	Fiscal Year Ended September 30,												Fiscal Year Ended September 30,
	2019				2018				Change				2018				2017				Change
Net income (loss)	$	37,450			$	12,800			$	24,650			$	12,800			$	(9,496	)		$	22,296
Deferred gain on sale of sugarcane land	—				(967		)		967				(967		)		(538		)		(429		)
Depreciation, depletion and amortization	13,924				13,756				168				13,756				15,226				(1,470		)
Loss on breeding herd sales	—				13				(13		)		13				337				(324		)
Deferred income tax expense (benefit)	3,267				(1,955		)		5,222				(1,955		)		(3,948		)		1,993
Cash surrender value	11				(27		)		38				(27		)		(15		)		(12		)
Deferred retirement benefits	829				(41		)		870				(41		)		(102		)		61
Magnolia Fund undistributed loss (earnings)	—				(8		)		8				(8		)		202				(210		)
Gain on sale of real estate, property and equipment and assets held for sale	(13,166		)		(10,281		)		(2,885		)		(10,281		)		(1,373		)		(8,908		)
Inventory net realizable value adjustment	808				1,115				(307		)		1,115				1,199				(84		)
Inventory casualty loss	—				—				—				—				13,489				(13,489		)
Loss on disposal of property and equipment	—				207				(207		)		207				—				207
Change in fair value of derivatives	989				—				989				—				—				—
Impairment of long-lived assets	396				2,234				(1,838		)		2,234				9,346				(7,112		)
Non-cash interest expense on deferred gain on sugarcane land	—				1,361				(1,361		)		1,361				1,413				(52		)
Insurance proceeds received for damage to property and equipment	(486		)		(477		)		(9		)		(477		)		—				(477		)
Bad debt expense	—				24				(24		)		24				312				(288		)
Stock-based compensation expense	824				2,613				(1,789		)		2,613				1,653				960
Change in working capital	3,986				(1,789		)		5,775				(1,789		)		(224		)		(1,565		)
Net cash provided by operating activities	$	48,832			$	18,578			$	30,254			$	18,578			$	27,481			$	(8,903	)

equipment and assets held for sale in the fiscal year ended September 30, 2020, relating to the sale of certain sections of the West Ranch, (ii) a decrease in net income, which was primarily driven by decreased citrus sales, (iii) a decrease in the deferred retirement benefit as a result of the Company terminating its pension plan and paying all participants on August 30, 2020 and (iv) a decrease in working capital as a result of the payment of income taxes and an increase in accounts receivable related to the Company’s grove management services whereby the Company pays all growing costs and then is reimbursed in the future from proceeds of fruit sales of the third-party.  

The increase in net cash provided by operating activities for the fiscal year ended September 30, 2019, as compared to the same period in fiscal year 2018, was primarily due to (i) an increase in net income which was primarily driven by increased citrus sales and the receipt of federal disaster relief funds relating to Hurricane Irma, and (ii) an increase in working capital, which is due to a decrease in accounts receivable and an increase in income taxes payable.

The decrease in net cash provided by operating activities for the fiscal year ended September 30, 2018, as compared to the same period in the fiscal year 2017, was primarily due to the effect of the Company recognizing a greater gain on the sale of real estate,

property and equipment and assets held for sale as a result of the Company’s decision to divest itself from several non-core and underperforming assets during the fiscal year 2018. Additionally, the Company experienced a decrease in working capital as compared to the previous fiscal year. This is primarily the result of the Company having a smaller increase in accounts receivable due to lower revenues earned, and experiencing a smaller decrease in inventory levels due the Company taking an impairment on its inventory levels at September 30, 2017, which directly impacted the change for the fiscal year ended September 30, 2018. This decrease was partially offset by an increase in net income.

Due to the seasonal nature of Alico's business, working capital requirements are typically greater in the first and fourth quarters of its fiscal year. Cash flows from operating activities typically improve in the second and third fiscal quarters, as sales of its harvested citrus are made.

Net Cash Provided By (Used In) Provided By Investing Activities

The following table details the items contributing to Net Cash Provided By (Used In) Provided By Investing Activities for the fiscal years ended September 30, 2020, 2019 2018 and 2017:2018:

(in thousands)		Fiscal Year Ended September 30,												Fiscal Year Ended September 30,
		2020				2019				Change				2019				2018				Change
Purchases of property and equipment		$	(21,705	)		$	(20,000	)		$	(1,705	)		$	(20,000	)		$	(16,352	)		$	(3,648	)
Net proceeds from sale of real estate, property and equipment and assets held for sale			31,541				14,602				16,939				14,602				39,780				(25,178	)
Insurance proceeds received for damage to property and equipment		—					486				(486	)			486				477				9
Change in deposits on purchase of citrus trees			(458	)			(108	)			(350	)			(108	)			(431	)			323
Advances on notes receivables, net			136				60				76				60				(575	)			635
Other			(25	)			—				(25	)			—				25				(25	)
Net cash provided by (used in) investing activities		$	9,489			$	(4,960	)		$	14,449			$	(4,960	)		$	22,924			$	(27,884	)

(in thousands)	Fiscal Year Ended September 30,												Fiscal Year Ended September 30,
	2019				2018				Change				2018				2017				Change
Purchases of property and equipment	(20,000		)		(16,352		)		(3,648		)		(16,352		)		(13,353		)		(2,999		)
Return on investment in Magnolia Fund	—				25				(25		)		25				324				(299		)
Net proceeds from sale of property and equipment and assets held for sale	14,602				37,969				(23,367		)		37,969				760				37,209
Net proceeds from sale of real estate	—				1,811				(1,811		)		1,811				2,184				(373		)
Insurance proceeds received for damage to property and equipment	486				477				9				477				—				477
Change in deposits on purchase of citrus trees	(108		)		(431		)		323				(431		)		748				(1,179		)
Advances on notes receivables, net	60				(575		)		635				(575		)		—				(575		)
Net cash (used in) provided by investing activities	$	(4,960	)		$	22,924			$	(27,884	)		$	22,924			$	(9,337	)		$	32,261

The shift from net cash used in investing activities for the fiscal year ended September 30, 2019 to net cash provided by investing activities for the fiscal year ended September 30, 2020 was primarily due to an increase in proceeds received on the sale of certain assets sold during fiscal year 2020, as compared to fiscal year 2019. This is due to the Company divesting of more acres of land in fiscal year 2020, as compared to fiscal year 2019 (see Note 4. “Assets Held for Sale” and Note 5. “Property & Equipment, Net” to the accompanying Consolidated Financial Statements).

The change from net cash provided by investing activities for the fiscal year ended September 30, 2018 to net cash used in investing activities for the fiscal year ended September 30, 2019 was primarily due to a decrease in proceeds received on the sale of certain assets sold during fiscal year 2019, as compared to fiscal year 2018. This is due to the Company divesting of several more assets in fiscal year 2018, as compared to fiscal year 2019 (see Note 4. “Assets Held for Sale” and Note 5. “Property & Equipment, Net” to the accompanying Consolidated Financial Statements). In addition, the shift, to a smaller extent, was due to an increase in capital expenditures which was driven by the purchase of certain land blocks within its existing grove location.

The increase in net cash provided by (used in) investing activities for the fiscal year ended September 30, 2018, as compared to the fiscal year ended September 30, 2017, was primarily due to proceeds received from the sale of certain assets during the fiscal year 2018. This increase was partially offset by greater capital expenditures in the fiscal year 2018, as compared to the same period in the prior fiscal year, as a result of the Company’s decision to plant more trees.

Net Cash Used In Financing Activities

The following table details the items contributing to Net Cash Used In Financing Activities for the fiscal years ended September 30, 2020, 2019 and 2018:

(in thousands)		Fiscal Year Ended September 30,												Fiscal Year Ended September 30,
		2020				2019				Change				2019				2018				Change
Repayments on revolving lines of credit		$	(114,581	)		$	(89,231	)		$	(25,350	)		$	(89,231	)		$	(25,600	)		$	(63,631	)
Borrowings on revolving lines of credit			117,523				86,546				30,977				86,546				28,285				58,261
Principal payments on term loans			(15,198	)			(10,900	)			(4,298	)			(10,900	)			(12,127	)			1,227
Treasury stock purchases			(238	)			(25,576	)			25,338				(25,576	)			(2,215	)			(23,361	)
Payment on termination of sugarcane agreement		—					(11,300	)			11,300				(11,300	)			—				(11,300	)
Deferred Financing costs			(23	)			—				(23	)			—				—				—
Dividends paid			(2,466	)			(1,833	)			(633	)			(1,833	)			(1,972	)			139
Capital contribution received from noncontrolling interest			294				—				294				—				1,000				(1,000	)
Capital lease obligation payments		—					—				—				—				(8	)			8
Net cash used in financing activities		$	(14,689	)		$	(52,294	)		$	37,605			$	(52,294	)		$	(12,637	)		$	(39,657	)

The decrease in net cash used in financing activities for the fiscal year ended September 30, 2020, as compared to the fiscal year ended September 30, 2019, was primarily due tothe Company repurchasing its common shares through a tender offer in October 2018 for an aggregate approximate amount of $25,576,000 and 2017:the termination of its 2014 Post-Closing Agreement in March 2019 pursuant to which the Company paid $11,300,000. Partially offsetting this shift was a prepayment of one of its long-term debt obligations in November 2019 in the amount of $4,455,000.

(in thousands)	Fiscal Year Ended September 30,												Fiscal Year Ended September 30,
	2019				2018				Change				2018				2017				Change
Repayments on revolving lines of credit	$	(89,231	)		$	(25,600	)		$	(63,631	)		$	(25,600	)		$	(70,770	)		$	45,170
Borrowings on revolving lines of credit	86,546				28,285				58,261				28,285				65,770				(37,485		)
Principal payments on term loans	(10,900		)		(12,127		)		1,227				(12,127		)		(10,743		)		(1,384		)
Treasury stock purchases	(25,576		)		(2,215		)		(23,361		)		(2,215		)		(3,064		)		849
Payment on termination of sugarcane agreement	(11,300		)		—				(11,300		)		—				—				—
Dividends paid	(1,833		)		(1,972		)		139				(1,972		)		(1,987		)		15
Capital contribution received from noncontrolling interest	—				1,000				(1,000		)		1,000				—				1,000
Capital lease obligation payments	—				(8		)		8				(8		)		(580		)		572
Net cash used in financing activities	$	(52,294	)		$	(12,637	)		$	(39,657	)		$	(12,637	)		$	(21,374	)		$	8,737

The increase in net cash used in financing activities for the fiscal year ended September 30, 2019, as compared to the fiscal year ended September 30, 2018, was primarily due to the Company purchasing 752,234 common shares through a tender offer, for an aggregate amount of approximately $25,576,000, terminatingthe termination of its 2014 Post-Closing Agreement relating to sugarcane transaction pursuant to which the Company paid approximately $11,300,000, and payinga pay down, net of borrowings, of its revolving line of credit by approximately $2,265,000.

The decrease in net cash used in financing activities for the fiscal year ended September 30, 2018, as compared to the fiscal year ended September 30, 2017, was primarily due to decreased repayments on the revolving line of credit, which was partially offset by less borrowings being made on the revolving lines of credit. Additionally, greater principal payments were made on the term loans of approximately $4,453,000 from a portion of the proceeds from the sale of assets, which was offset by the Company electing not to make its scheduled principal payment on certain other term loans for the first and second quarter of fiscal year 2018 of approximately $3,100,000, as it utilized its prepayment to satisfy its payment requirement.

Alico had no amountapproximately $2,942,000 outstanding on its revolving lines of credit as of September 30, 2019.

2020 and approximately $91,659,000 remaining availability.

The WCLC line of credit agreement provides for Rabo Agrifinance, Inc. to issue up to $2,000,000 in letters of credit on the Company’s behalf. As of September 30, 2019,2020, there was approximately $460,000$399,000 in outstanding letters of credit, which correspondingly slightly reduced Alico's availability under the line of credit.

Off Balance

Off-Balance Sheet Arrangements

None

Contractual Obligations

Alico has various contractual obligations which are fixed and determinable. The following table presents the Company's significant contractual obligations and commercial commitments on an undiscounted basis as of September 30, 20192020 and the future periods in which such obligations are expected to be settled in cash.

(in thousands)		Payments Due by Period
		Total				<1 Year				1-3 Years				3-5 Years				5+ Years
Long-Term Debt		$	148,251			$	9,145			$	21,070			$	21,070			$	96,966
Interest on Long-Term Debt			33,964				5,235				9,254				7,634				11,841
Consulting/Non-Compete Agreement			146				146			—				—					—
Operating Leases			891				519				324				48				—
Tree Purchase Commitments			3,014				3,014			—				—					—
Total		$	186,266			$	18,059			$	30,648			$	28,752			$	108,807

(in thousands)
	Payments Due by Period
	Total			<1 Year			1-3 Years			3-5 Years			5+ Years
Long-Term Debt	$	163,449		$	5,338		$	25,745		$	21,510		$	110,856
Interest on Long-Term Debt	48,117			6,764			12,120			10,188			19,045
Retirement Benefits	5,876			5,876			—			—			—
Consulting/Non-Compete Agreement	546			400			146			—			—
Operating Leases	550			191			344			15			—
Tree Purchase Commitments	1,603			1,603			—			—			—
Total	$	220,141		$	20,172		$	38,355		$	31,713		$	129,901

Purchase Commitments

The Company enters into contracts for the purchase of citrus trees during the normal course of its business. As of September 30, 2019,2020, the Company had approximately $1,603,000$3,014,000 relating to outstanding commitments for these purchases, which will be paid upon delivery.

Impact of Inflation and Changing Prices

Our financial statements included in this Annual Report on Form 10-K have been prepared in accordance with U.S. GAAP, which requires us to measure financial position and operating results primarily in terms of historic dollars. Changes in the relative value of money due to inflation or recession generally are not considered. The primary effect of inflation on our operations is reflected in increased operating costs. In our management’s opinion, changes in interest rates affect the financial condition to a far greater degree than changes in the inflation rate. While interest rates are greatly influenced by changes in the inflation rate, they do not necessarily change at the same rate or in the same magnitude as the inflation rate. Interest rates are highly sensitive to many factors that are beyond our control, including changes in the expected rate of inflation, the influence of general and local economic conditions and the monetary and fiscal policies of the United States government, its agencies and various other governmental regulatory authorities.

Critical Accounting Policies

Alico's Consolidated Financial Statements are prepared in accordance with U.S. GAAP, which requires management to make estimates, judgments and assumptions that affect the amounts reported in those financial statements and accompanying notes. Management considers an accounting policy to be critical if it is important to the Company's financial condition and results of operations and if it requires significant judgment and estimates on the part of management in its application. Alico considers policies relating to the following matters to be critical accounting policies:

Revenue Recognition

The Company recognizes revenue at the amount it expects to be entitled to be paid, determined when control of the products or services is transferred to its customers, which occurs upon delivery of and acceptance of the fruit by the customer and the Company has a right to payment. For grove management services, the Company recognizes operating revenue, including a management fee, when services are rendered and consumed. The Company recognized revenues from cattle sales at the time the cattle were delivered. Management reviews the reasonableness of the revenue accruals quarterly based on buyers’ and processors’ advances to growers, cash and futures markets and experience in the industry. Adjustments are made throughout the fiscal year to these estimates as more current relevant industry information becomes available. Differences between the estimates and the final realization of revenues can be significant and can be either positive or negative. During the periods presented in this Annual Report on Form 10-K, no material adjustments were made to the reported revenues from our crops.

Alico Fruit Company ("AFC") operations primarily consist of providing supply chain management services to Alico, as well as to other citrus growers in the state of Florida. AFC also purchases and resells citrus fruit; in these transactions, AFC (i) acts as a principal; (ii) takes title to the products; and (iii) has the risks and rewards of ownership, including the risk of loss for collection, delivery or returns. Therefore, AFC recognizes revenues based on the gross amounts due from customers for its marketing activities. Supply chain management service revenues are recognized when the services are performed.

Inventories

The costs of growing crops, including but not limited to labor, fertilization, fuel, crop nutrition and irrigation, are capitalized into inventory throughout the respective crop year. Such costs are expensed as cost of sales when the crops are harvested and are recorded as operating expenses in the Consolidated Statements of Operations. Inventories are stated at the lower of cost or net realizable value. The cost for unharvested citrus crops is based on accumulated production costs incurred during the period from January 1 through the balance sheet date.

Property and Equipment

Property and equipment are stated at cost, net of accumulated depreciation and amortization. Major improvements are capitalized while maintenance and repairs are expensed in the period the cost is incurred. Costs related to the development of citrus groves, through planting of trees, are capitalized. Such costs include land clearing, excavation and construction of ditches, dikes, roads and reservoirs among other costs. After the planting, caretaking costs or pre-productive maintenance costs are capitalized for four years. After four years, a grove is considered to have reached maturity and the accumulated costs are depreciated over 25 years, except for land clearing and excavation, which are considered costs of land and not depreciated.

The breeding herd consisted of purchased animals and animals raised on the Company’s ranches. Purchased animals were stated at the cost of acquisition. The cost of animals raised on the Ranch was based on the accumulated cost of developing such animals for productive use. The breeding herd was sold in January 2018.

Income Taxes

The Company uses the asset and liability method of accounting for deferred income taxes. The provision for income taxes includes income taxes currently payable and those deferred as a result of temporary differences between the financial statements and the income tax basis of assets and liabilities. Deferred income tax assets and liabilities are measured using enacted income tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect of a change in income tax rates on deferred income tax assets and liabilities is recognized in income or loss in the period that includes the enactment date. A valuation allowance is provided to reduce deferred tax assets to the amount of future tax benefit when it is more likely than not that some portion or all of the deferred tax assets will not be realized. Projected future taxable income and ongoing tax planning strategies are considered and evaluated when assessing the need for a valuation allowance. Any increase or decrease in a valuation allowance could have a material adverse or beneficial impact on the Company’s income tax provision and net income or loss in the period the determination is made. For the fiscal years ended September 30, 2020, 2019 2018 and 2017,2018, the Company recorded valuation allowances of $0, $5,634,000$0, and $0,$5,634,000, respectively, relating to the unutilized capital

loss carryforwards which expired. The Company recognizes interest and/or penalties related to income tax matters in income tax expense.

The Company recognizes the effect of income tax positions only if those positions are more likely than not of being sustained. Recognized income tax positions are measured at the largest amount that is greater than 50% likely of being realized. Changes in recognition or measurement are reflected in the period in which a change in judgment occurs. The Company records interest related to unrecognized tax benefits in income tax expense.

Impairment of Long-Lived Assets

The Company reviews its long-lived assets for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset or asset group may not be recoverable. The Company records impairment losses on long-lived assets used in operations, other than goodwill, when events and circumstances indicate that the asset or asset group might be impaired and the estimated cash flows (undiscounted and without interest charges) to be generated by those assets or asset group over the remaining lives of the assets are less than the carrying amounts of those assets. In calculating impairments and the estimated cash flows, the Company assigns its asset groups by determining the lowest level for which there are identifiable cash flows that are largely independent of the cash flows of the other Company assets. The net carrying values of assets or asset groups not recoverable are reduced to their fair values. Our cash flow estimates are based on historical results adjusted to reflect our best estimates of future market conditions and operating conditions. As of September 30, 20192020 and 2018,2019, long-lived assets were comprised of property and equipment.

Fair Value Measurements

The carrying amounts in the balance sheets for operating accounts receivable, accounts payable and accrued liabilities approximate fair value because of the immediate or short termshort-term maturity of these items. The carrying amounts reported for our long-term debt approximates fair value as our borrowings with commercial lenders are at interest rates that vary with market conditions and fixed rates that approximate market rates for comparable loans.

Fair value is defined as the price that would be received upon the sale of an asset or paid to transfer a liability (i.e., exit price) in an orderly transaction between market participants at the measurement date. Assets and liabilities measured at fair value are categorized into one of three different levels depending on the assumptions (i.e., inputs) used in the valuation. Assets and liabilities are classified in their entirety based on the lowest level of input significant to the fair value measurement. The fair value hierarchy is defined as follows:

Level 1- Valuations are based on unadjusted quoted prices in active markets for identical assets or liabilities.

Level 2- Valuations are based on quoted prices for similar assets or liabilities in active markets, or quoted prices in markets that are not active for which significant inputs are observable, either directly or indirectly.

Level 3- Valuations are based on prices or valuation techniques that require inputs that are both unobservable and significant to the overall fair value measurement. Inputs reflect management’s best estimate of what market participants would use in valuing the asset or liability at the measurement date.

Impact of Accounting Pronouncements

See Item 8. "Financial Statements and Supplemental Data" - Note 1. "Description of Business and Basis of Presentation" for additional information about the impact of accounting pronouncements.

Subsequent Events

On November 14, 2019, 734 Investors filed a Form 4 and an amendment to Schedule 13D with the SEC disclosing that on November 12, 2019, it distributed all of its shares of Company common stock previously held by it, consisting of 3,173,405 shares, on a pro rata basis, to its members. Prior to such distribution, 734 Investors was the Company’s largest shareholder.

On December 5, 2019,2, 2020, the Board of Directors of the Company declared a cash dividend for the first quarter of fiscal year 2020 cash dividend2021 of $0.09$0.18 per share on its outstanding common stock to be paid to shareholders of record as of December 27, 2019,24, 2020, with payment expected on January 10, 2020.

8, 2021.

In November 2020, the Company awarded 5,885 shares of restricted stock to certain officers and managers under the 2015 Plan.

Compensatory Arrangements of Certain Officers.

On December 2, 2019, the Company entered into a new employment agreement (the “Rallo Employment Agreement”) with Richard Rallo. Mr. Rallo serves as Chief Financial Officer of the Company. The Rallo Employment Agreement provides for an annual base salary of $275,000. Mr. Rallo is eligible for an annual incentive compensation award with an annual target opportunity in an amount equal to 40% of his annual base salary.

The Rallo Employment Agreement also provides that, if Mr. Rallo’s employment is terminated by the Company without “cause” or Mr. Rallo resigns with “good reason” (as each such term is defined in the Rallo Employment Agreement), then, subject to his execution, delivery, and non-revocation of a general release of claims in favor of the Company, Mr. Rallo will be entitled to (i) cash severance in an amount equal to 12 months of the annual base salary, (ii) the Accrued Obligations (as defined in the Rallo Employment Agreement) in a cash lump sum within 30 days after the date of termination, (iii) any rights or payments that are vested benefits or that Mr. Rallo is otherwise entitled to receive at or subsequent to the date of termination under any employee benefit plan or any other contract or agreement with the Company, and (iv) any Annual Bonus (as defined in the Rallo Employment Agreement) that has been earned but not paid as of the date of termination.

The Rallo Employment Agreement includes various restrictive covenants in favor of the Company, including a confidentiality covenant, a non-disparagement covenant, and 12-month post-termination noncompetition and customer and employee non-solicitation covenants.

In addition to his position as Chief Financial Officer, Mr. Rallo retains his position as the Company’s Principal Accounting Officer.

The foregoing description of the Rallo Employment Agreement does not purport to be complete and is qualified in its entirety by reference to the complete text of the Rallo Employment agreement, which is attached hereto as Exhibit 10.37 to this Annual Report on Form 10-K and is incorporated herein by reference.

Item 7A. Quantitative and Qualitative Disclosures about Market Risk

Market Risk - Market risk represents the potential loss resulting from adverse changes in the value of financial instruments, either derivative or non-derivative, caused by fluctuations in interest rates, foreign exchange rates, commodity prices, and equity security prices. The Company handles market risks in accordance with its established policies; however, Alico does not enter into derivatives or other financial instruments for trading or speculative purposes. The Company does consider, on occasion, the need to enter into financial instruments to manage and reduce the impact of changes in interest rates; however, the Company entered into no such instruments during the three-year period ended September 30, 2019.2020. The Company held various financial instruments as of September 30, 20192020 and 2018,2019, consisting of financial assets and liabilities reported in the Company’s Consolidated Balance Sheets and off-balance sheet exposures resulting from letters of credit issued for the benefit of Alico.

Interest Rate Risk - The Company is subject to interest rate risk from the utilization of financial instruments such as term loan debt and other borrowings. The Company’s primary long-term obligations are fixed rate debts subject to fair value risk due to interest rate fluctuations. The Company believes that the carrying value of our long-term debt approximates fair value given the stability of market interest rates.

The Company is also subject to interest rate risk on its variable rate debt. A one-percentage-point increase in prevailing interest rates would have increased interest expense on our variable rate debt obligations by approximately $3,475,000$424,000 for the fiscal year ended September 30, 2019.

2020.

Foreign-Exchange Rate Risk - The Company currently has no exposure to foreign-exchange rate risk because all of its financial transactions are denominated in U.S. dollars.

Commodity Price Risk - The Company has no financial instruments subject to commodity price risk.

Equity Security Price Risk - None of the Company’s financial instruments have potential exposure to equity security price risk.

Item 8. Financial Statements and Supplementary Data

Index to Consolidated Financial Statements

			Page
	Page
Report of Independent Registered Public Accounting Firm		4442
Consolidated Financial Statements:
	Consolidated Balance Sheets		4643
	Consolidated Statements of Operations		4744
	Consolidated Statements of Changes in Equity		4845
	Consolidated Statements of Cash Flows		4946
	Notes to Consolidated Financial Statements		5147
All schedules are omitted for the reason that they are not applicable or the required information is included in the financial statements or notes.

Report of Independent Registered Public Accounting Firm

To the Stockholders and the Board of Directors of Alico, Inc.

Opinions on the Financial Statements and Internal Control Over Financial Reporting

We have audited the accompanying consolidated balance sheets of Alico, Inc. and subsidiaries (the Company) as of September 30, 20192020 and 2018,2019, and the related consolidated statements of operations, changes in equity and cash flows for each of the three years in the period ended September 30, 2019,2020, and the related notes (collectively, the financial statements). We also have audited the Company’s internal control over financial reporting as of September 30, 2019,2020, based on criteria established in Internal Control - Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission in 2013.

In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of the Company as of September 30, 20192020 and 2018,2019, and the results of their operations and their cash flows for each of the years in the three-year period ended September 30, 2019,2020, in conformity with accounting principles generally accepted in the United States of America. Also in our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of September 30, 2019,2020, based on criteria established in Internal Control - Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission in 2013.

Basis for Opinions

The Company's management is responsible for these financial statements, for maintaining effective internal control over financial reporting, and for its assessment of the effectiveness of internal control over financial reporting, included in the accompanying Management’s Report on Internal Control Over Financial Reporting. Our responsibility is to express an opinion on the Company's financial statements and an opinion on the Company's internal control over financial reporting based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Company in accordance with U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud, and whether effective internal control over financial reporting was maintained in all material respects.

Our audits of the financial statements included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. Our audit of internal control over financial reporting included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. Our audits also included performing such other procedures as we considered necessary in the circumstances. We believe that our audits provide a reasonable basis for our opinions.

Definition and Limitations of Internal Control Over Financial Reporting

A company's internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company's internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of the company's assets that could have a material effect on the financial statements.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

/s/ RSM US LLP

We have served as the Company's auditor since 2007.

Orlando, Florida

December 5, 20198, 2020

ALICO, INC.

CONSOLIDATED BALANCE SHEETS

(in thousands, except share amounts)

		September 30,
		2020				2019
ASSETS
Current assets:
Cash and cash equivalents		$	3,163			$	18,630
Accounts receivable, net			4,347				713
Inventories			40,855				40,143
Income tax receivable			781				—
Assets held for sale			1,366				1,442
Prepaid expenses and other current assets			1,387				1,049
Total current assets			51,899				61,977
Restricted cash			16,524				5,208
Property and equipment, net			350,061				345,648
Goodwill			2,246				2,246
Other non-current assets			3,207				2,309
Total assets		$	423,937			$	417,388
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable		$	3,533			$	4,163
Accrued liabilities			7,095				7,769
Long-term debt, current portion			9,145				5,338
Deferred retirement obligations, current portion			—				5,226
Income taxes payable		—					5,536
Other current liabilities			1,385				919
Total current liabilities			21,158				28,951
Long-term debt:
Principal amount, net of current portion			139,106				158,111
Less: deferred financing costs, net			(1,151	)			(1,369	)
Long-term debt less current portion and deferred financing costs, net			137,955				156,742
Lines of credit			2,942				—
Deferred income tax liabilities, net			39,728				32,125
Other liabilities			372				172
Total liabilities			202,155				217,990
Commitments and Contingencies (Note 15)
Stockholders' equity:
Preferred stock, no par value, 1,000,000 shares authorized; 0ne issued			—				—
Common stock, $1.00 par value, 15,000,000 shares authorized; 8,416,145 shares issued and 7,492,524 and 7,476,513 shares outstanding at September 30, 2020 and September 30, 2019, respectively			8,416				8,416
Additional paid in capital			19,685				19,781
Treasury stock, at cost, 923,621 and 939,632 shares held at September 30, 2020 and September 30, 2019, respectively			(30,779	)			(31,943	)
Retained earnings			219,019				198,049
Total Alico stockholders' equity			216,341				194,303
Noncontrolling interest			5,441				5,095
Total stockholders' equity			221,782				199,398
Total liabilities and stockholders' equity		$	423,937			$	417,388

	ALICO, INC. CONSOLIDATED BALANCE SHEETS (in thousands, except share amounts)
		September 30,
		2019				2018
	ASSETS
	Current assets:
	Cash and cash equivalents	$	18,630			$	25,260
	Accounts receivable, net	713				2,544
	Inventories	40,143				41,033
	Assets held for sale	1,442				1,391
	Prepaid expenses and other current assets	1,049				833
	Total current assets	61,977				71,061
	Restricted cash	5,208				7,000
	Property and equipment, net	345,648				340,403
	Goodwill	2,246				2,246
	Other non-current assets	2,309				2,712
	Total assets	$	417,388			$	423,422
	LIABILITIES AND STOCKHOLDERS' EQUITY
	Current liabilities:
	Accounts payable	$	4,163			$	3,764
	Accrued liabilities	7,769				8,881
	Long-term debt, current portion	5,338				5,275
	Deferred retirement obligations, current portion	5,226				345
	Income taxes payable	5,536				2,320
	Other current liabilities	919				891
	Total current liabilities	28,951				21,476
	Long-term debt:
	Principal amount, net of current portion	158,111				169,074
	Less: deferred financing costs, net	(1,369		)		(1,563		)
	Long-term debt less current portion and deferred financing costs, net	156,742				167,511
	Lines of credit	—				2,685
	Deferred income tax liabilities, net	32,125				25,153
	Deferred gain on sale	—				24,928
	Deferred retirement obligations	—				4,052
	Other liabilities	172				22
	Total liabilities	217,990				245,827
	Commitments and Contingencies (Note 16)
	Stockholders' equity:
	Preferred stock, no par value, 1,000,000 shares authorized; none issued	—				—
	Common stock, $1.00 par value, 15,000,000 shares authorized; 8,416,145 shares issued and 7,476,513 and 8,199,957 shares outstanding at September 30, 2019 and September 30, 2018, respectively	8,416				8,416
	Additional paid in capital	19,781				20,126
	Treasury stock, at cost, 939,632 and 216,188 shares held at September 30, 2019 and September 30, 2018, respectively	(31,943		)		(7,536		)
	Retained earnings	198,049				151,111
	Total Alico stockholders' equity	194,303				172,117
	Noncontrolling interest	5,095				5,478
	Total stockholders' equity	199,398				177,595
	Total liabilities and stockholders' equity	$	417,388			$	423,422

See accompanying notes to the consolidated financial statements.

ALICO, INC.

CONSOLIDATED STATEMENTS OF OPERATIONS

(in thousands, except per share amounts)

		Fiscal Year Ended September 30,
		2020				2019				2018
Operating revenues:
Alico Citrus		$	89,369			$	119,031			$	78,121
Land Management and Other Operations			3,138				3,220				3,160
Total operating revenues			92,507				122,251				81,281
Operating expenses:
Alico Citrus			72,281				59,594				51,709
Land Management and Other Operations			2,307				2,297				3,979
Total operating expenses			74,588				61,891				55,688
Gross profit			17,919				60,360				25,593
General and administrative expenses			10,998				15,146				15,058
Income from operations			6,921				45,214				10,535
Other income (expense):
Investment and interest income, net			98				49				39
Interest expense			(5,981	)			(7,180	)			(8,561	)
Gain on sale of real estate, property and equipment and assets held for sale			30,424				13,166				11,041
Change in fair value of derivatives		—					(989	)			—
Other (expense) income, net			(85	)			(27	)			136
Total other income, net			24,456				5,019				2,655
Income before income taxes			31,377				50,233				13,190
Income tax provision			7,663				12,783				390
Net income			23,714				37,450				12,800
Net (income) loss attributable to noncontrolling interests			(52	)			383				250
Net income attributable to Alico, Inc. common stockholders		$	23,662			$	37,833			$	13,050
Per share information attributable to Alico, Inc. common stockholders:
Earnings per common share:
Basic		$	3.16			$	5.06			$	1.59
Diluted		$	3.16			$	5.05			$	1.57
Weighted-average number of common shares outstanding:
Basic			7,484				7,472				8,232
Diluted			7,496				7,493				8,301
Cash dividends declared per common share		$	0.36			$	0.24			$	0.24

ALICO, INC. CONSOLIDATED STATEMENTS OF OPERATIONS (in thousands, except per share amounts)
	Fiscal Year Ended September 30,
	2019				2018				2017
Operating revenues:
Alico Citrus	$	119,031			$	78,121			$	123,441
Water Resources and Other Operations	3,220				3,160				6,388
Total operating revenues	122,251				81,281				129,829
Operating expenses:
Alico Citrus	59,594				51,709				111,947
Water Resources and Other Operations	2,297				3,979				8,952
Total operating expenses	61,891				55,688				120,899
Gross profit	60,360				25,593				8,930
General and administrative expenses	15,146				15,058				15,024
Income (loss) from operations	45,214				10,535				(6,094		)
Other income (expense):
Investment and interest income (loss), net	49				39				(148		)
Interest expense	(7,180		)		(8,561		)		(9,141		)
Gain on sale of real estate, property and equipment and assets held for sale	13,166				11,041				2,181
Change in fair value of derivatives	(989		)		—				—
Other (loss) income, net	(27		)		136				(140		)
Total other income (expense)	5,019				2,655				(7,248		)
Income (loss) before income taxes	50,233				13,190				(13,342		)
Income tax provision (benefit)	12,783				390				(3,846		)
Net income (loss)	37,450				12,800				(9,496		)
Net loss attributable to noncontrolling interests	383				250				45
Net income (loss) attributable to Alico, Inc. common stockholders	$	37,833			$	13,050			$	(9,451	)
Per share information attributable to Alico, Inc. common stockholders:
Earnings (loss) per common share:
Basic	$	5.06			$	1.59			$	(1.14	)
Diluted	$	5.05			$	1.57			$	(1.14	)
Weighted-average number of common shares outstanding:
Basic	7,472				8,232				8,300
Diluted	7,493				8,301				8,300
Cash dividends declared per common share	$	0.24			$	0.24			$	0.24

See accompanying notes to the consolidated financial statements.

ALICO, INC.

CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY

(in thousands)

		Common stock								Additional Paid-In				Treasury				Retained				Total Alico, Inc.				Non- controlling				Total
		Shares				Amount				Capital				Stock				Earnings				Equity				Interest				Equity
September 30, 2017			8,416			$	8,416			$	18,694			$	(6,502	)		$	140,033			$	160,641			$	4,728			$	165,369
Net income (loss)			—				—				—				—				13,050				13,050				(250	)			12,800
Dividends			—				—				—				—				(1,972	)			(1,972	)			—				(1,972	)
Treasury stock purchases			—				—				—				(2,215	)			—				(2,215	)			—				(2,215	)
Capital contribution received from noncontrolling interest funding			—				—				—				—				—				—				1,000				1,000
Stock-based compensation:
Directors			—				—				(322	)			1,181				—				859				—				859
Executives			—				—				1,754				—				—				1,754				—				1,754
September 30, 2018			8,416				8,416				20,126				(7,536	)			151,111				172,117				5,478				177,595
Net income (loss)			—				—				—				—				37,833				37,833				(383	)			37,450
Dividends			—				—				—				—				(1,792	)			(1,792	)			—				(1,792	)
Treasury stock purchases			—				—				—				(25,576	)			—				(25,576	)			—				(25,576	)
ASC 610-20 adoption			—				—				—				—				10,897				10,897				—				10,897
Stock-based compensation:
Directors			—				—				(300	)			1,169				—				869				—				869
Executives			—				—				778				—				—				778				—				778
Executive forfeiture			—				—				(823	)			—				—				(823	)			—				(823	)
September 30, 2019			8,416				8,416				19,781				(31,943	)			198,049				194,303				5,095				199,398
Net income			—				—				—				—				23,662				23,662				52				23,714
Dividends			—				—				—				—				(2,692	)			(2,692	)			—				(2,692	)
Treasury stock purchases			—				—				—				(238	)			—				(238	)			—				(238	)
Capital contribution received from noncontrolling interest funding			—				—				—				—				—				—				294				294
Stock-based compensation:
Directors			—				—				(669	)			1,402				—				733				—				733
Executives and managers			—				—				573				—				—				573				—				573
September 30, 2020			8,416			$	8,416			$	19,685			$	(30,779	)		$	219,019			$	216,341			$	5,441			$	221,782

ALICO, INC.
CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY
(in thousands)
	Common stock						Additional Paid-In				Treasury				Retained				Total Alico, Inc.				Non-controlling				Total
	Shares		Amount				Capital				Stock				Earnings				Equity				Interest				Equity
Balance at September 30, 2016	8,416		$	8,416			$	18,155			$	(4,585	)		$	151,504			$	173,490			$	4,773			$	178,263
Net loss	—		—				—				—				(9,451		)		(9,451		)		(45		)		(9,496		)
Dividends	—		—				—				—				(1,987		)		(1,987		)		—				(1,987		)
Treasury stock purchases	—		—				—				(3,064		)		—				(3,064		)		—				(3,064		)
Stock-based compensation:
Directors	—		—				(374		)		1,147				—				773				—				773
Executives	—		—				880				—				—				880				—				880
Other	—		—				33				—				(33		)		—				—				—
Balance at September 30, 2017	8,416		8,416				18,694				(6,502		)		140,033				160,641				4,728				165,369
Net income (loss)	—		—				—				—				13,050				13,050				(250		)		12,800
Dividends	—		—				—				—				(1,972		)		(1,972		)		—				(1,972		)
Treasury stock purchases	—		—				—				(2,215		)		—				(2,215		)		—				(2,215		)
Capital contribution received from noncontrolling interest funding	—		—				—				—				—				—				1,000				1,000
Stock-based compensation:
Directors	—		—				(322		)		1,181				—				859				—				859
Executives	—		—				1,754				—				—				1,754				—				1,754
Balance at September 30, 2018	8,416		8,416				20,126				(7,536		)		151,111				172,117				5,478				177,595
Net income (loss)	—		—				—				—				37,833				37,833				(383		)		37,450
Dividends	—		—				—				—				(1,792		)		(1,792		)		—				(1,792		)
Treasury stock purchases	—		—				—				(25,576		)		—				(25,576		)		—				(25,576		)
ASC 610-20 adoption	—		—				—				—				10,897				10,897				—				10,897
Stock-based compensation:
Directors	—		—				(300		)		1,169				—				869				—				869
Executives	—		—				778				—				—				778				—				778
Executive forfeiture	—		—				(823		)		—				—				(823		)		—				(823		)
Balance at September 30, 2019	8,416		$	8,416			$	19,781			$	(31,943	)		$	198,049			$	194,303			$	5,095			$	199,398

See accompanying notes to the consolidated financial statements.

	ALICO, INC. CONSOLIDATED STATEMENTS OF CASH FLOWS (in thousands)
		Fiscal Year Ended September 30,
		2019				2018				2017
	Net cash provided by operating activities:
	Net income (loss)	$	37,450			$	12,800			$	(9,496	)
	Adjustments to reconcile net income (loss) to net cash provided by operating activities:
	Deferred gain on sale of sugarcane land	—				(967		)		(538		)
	Depreciation, depletion and amortization	13,924				13,756				15,226
	Loss on breeding herd sales	—				13				337
	Deferred income tax expense (benefit)	3,267				(1,955		)		(3,948		)
	Cash surrender value	11				(27		)		(15		)
	Deferred retirement benefits	829				(41		)		(102		)
	Magnolia Fund undistributed loss (earnings)	—				(8		)		202
	Gain on sale of real estate, property and equipment and assets held for sale	(13,166		)		(10,281		)		(1,373		)
	Inventory casualty loss	—				—				13,489
	Inventory net realizable value adjustment	808				1,115				1,199
	Loss on disposal of property and equipment	—				207				—
	Change in fair value of derivatives	989				—				—
	Impairment of long-lived assets	396				2,234				9,346
	Non-cash interest expense on deferred gain on sugarcane land	—				1,361				1,413
	Insurance proceeds received for damage to property and equipment	(486		)		(477		)		—
	Bad debt expense	—				24				312
	Stock-based compensation expense	824				2,613				1,653
	Changes in operating assets and liabilities:
	Accounts receivable	1,531				1,718				142
	Inventories	82				(6,554		)		3,724
	Prepaid expenses	(211		)		177				(604		)
	Income tax receivable	15				(15		)		1,013
	Other assets	288				23				(415		)
	Accounts payable and accrued liabilities	(1,113		)		2,987				(2,895		)
	Income tax payable	3,216				2,320				—
	Other liabilities	178				(2,445		)		(1,189		)
	Net cash provided by operating activities	48,832				18,578				27,481
	Cash flows from investing activities:
	Purchases of property and equipment	(20,000		)		(16,352		)		(13,353		)
	Return on investment in Magnolia Fund	—				25				324
	Net proceeds from sale of property and equipment and assets held for sale	14,602				37,969				760
	Net proceeds from sale of real estate	—				1,811				2,184
	Insurance proceeds received for damage to property and equipment	486				477				—
	Change in deposits on purchase of citrus trees	(108		)		(431		)		748
	Advances on notes receivables, net	60				(575		)		—

ALICO, INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS

(in thousands)

		Fiscal Year Ended September 30,
		2020				2019				2018
Net cash provided by operating activities:
Net income		$	23,714			$	37,450			$	12,800
Adjustments to reconcile net income to net cash provided by operating activities:
Deferred gain on sale of sugarcane land		—					—				(967	)
Depreciation, depletion and amortization			14,520				13,924				13,756
Deferred income tax expense (benefit)			7,603				3,267				(1,955	)
Cash surrender value			(10	)			11				(27	)
Deferred retirement benefits			(5,226	)			829				(41	)
Gain on sale of real estate, property and equipment and assets held for sale			(30,424	)			(13,166	)			(10,281	)
Inventory net realizable value adjustment		—					808				1,115
Loss on disposal of property and equipment			659				—				207
Change in fair value of derivatives		—					989				—
Impairment of long-lived assets			1,321				396				2,234
Impairment of right-of-use-asset			87				—				—
Non-cash interest expense on deferred gain on sugarcane land		—					—				1,361
Insurance proceeds received for damage to property and equipment		—					(486	)			(477	)
Stock-based compensation expense			1,306				824				2,613
Other		—					—				29
Changes in operating assets and liabilities:
Accounts receivable			(3,634	)			1,531				1,718
Inventories			(712	)			82				(6,554	)
Prepaid expenses			(135	)			(211	)			177
Income tax receivable			(781	)			15				(15	)
Other assets			(839	)			288				23
Accounts payable and accrued liabilities			(1,530	)			(1,113	)			2,987
Income tax payable			(5,536	)			3,216				2,320
Other liabilities			666				178				(2,445	)
Net cash provided by operating activities			1,049				48,832				18,578
Cash flows from investing activities:
Purchases of property and equipment			(21,705	)			(20,000	)			(16,352	)
Net proceeds from sale of real estate, property and equipment and assets held for sale			31,541				14,602				39,780
Insurance proceeds received for damage to property and equipment		—					486				477
Change in deposits on purchase of citrus trees			(458	)			(108	)			(431	)
Advances on notes receivables, net			136				60				(575	)
Other			(25	)			—				25
Net cash provided by (used in) investing activities			9,489				(4,960	)			22,924
Cash flows from financing activities:
Repayments on revolving lines of credit			(114,581	)			(89,231	)			(25,600	)
Borrowings on revolving lines of credit			117,523				86,546				28,285
Principal payments on term loans			(15,198	)			(10,900	)			(12,127	)
Treasury stock purchases			(238	)			(25,576	)			(2,215	)
Payment on termination of sugarcane agreement		—					(11,300	)			—
Dividends paid			(2,466	)			(1,833	)			(1,972	)
Deferred financing costs			(23	)			—				—
Capital contribution received from noncontrolling interest			294				—				1,000
Capital lease obligation payments		—					—				(8	)
Net cash used in financing activities			(14,689	)			(52,294	)			(12,637	)
Net (decrease) increase in cash and cash equivalents and restricted cash			(4,151	)			(8,422	)			28,865
Cash and cash equivalents and restricted cash at beginning of the period			23,838				32,260				3,395
Cash and cash equivalents and restricted cash at end of the period		$	19,687			$	23,838			$	32,260
Supplemental disclosure of cash flow information:
Cash paid for interest, net of amount capitalized		$	5,614			$	6,940			$	6,721
Cash paid for income taxes		$	6,403			$	6,285			$	25
Supplemental disclosure of non-cash investing and financing activities:
Dividend declared but unpaid		$	674			$	449			$	492

Net cash (used in) provided by investing activities	(4,960		)		22,924				(9,337		)
Cash flows from financing activities:
Repayments on revolving lines of credit	(89,231		)		(25,600		)		(70,770		)
Borrowings on revolving lines of credit	86,546				28,285				65,770
Principal payments on term loans	(10,900		)		(12,127		)		(10,743		)
Treasury stock purchases	(25,576		)		(2,215		)		(3,064		)
Payment on termination of sugarcane agreement	(11,300		)		—				—
Dividends paid	(1,833		)		(1,972		)		(1,987		)
Capital contribution received from noncontrolling interest	—				1,000				—
Capital lease obligation payments	—				(8		)		(580		)
Net cash used in financing activities	(52,294		)		(12,637		)		(21,374		)
Net (decrease) increase in cash and cash equivalents and restricted cash	(8,422		)		28,865				(3,230		)
Cash and cash equivalents and restricted cash at beginning of the period	32,260				3,395				6,625
Cash and cash equivalents and restricted cash at end of the period	$	23,838			$	32,260			$	3,395
Supplemental disclosure of cash flow information:
Cash paid for interest; net of amount capitalized	$	6,940			$	6,721			$	7,240
Cash paid (refunded) for income taxes	$	6,285			$	25			$	(911	)
Supplemental disclosure of non-cash investing and financing activities:
Dividend declared but unpaid	$	449			$	492			$	494

See accompanying notes to the consolidated financial statements.

ALICO, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Note 1. Description of Business and Basis of Presentation

Description of Business

Alico, Inc., together with its subsidiaries (collectively, “Alico”, the “Company", "we", "us" or "our”), is a Florida agribusiness and land management company owning approximately 111,000100,000 acres of land throughout Florida, includingholding mineral rights on approximately 90,000 acres of mineral rights.those owned acres. The Company manages its land based upon its primary usage, and reviews its performance based upon 2 primary classifications: (i) Alico Citrus and (ii) Water ResourcesLand Management and Other Operations. Financial results are presented based upon its 2 business segments (Alico Citrus and Water ResourcesLand Management and Other Operations). 

Basis of Presentation

The Company has prepared the accompanying financial statements on a consolidated basis. These accompanying Consolidated Financial Statements, which are referred to herein as the “Financial Statements”, have been prepared in accordance with Generally Accepted Accounting Principles in the United States of America (“U.S. GAAP”) and pursuant to the rules and regulations of the U.S. Securities and Exchange Commission (the “SEC”). All significant intercompany transactions and account balances between the consolidated businesses have been eliminated.

Segments

Operating segments are defined in the criteria established under the Financial Accounting Standards Board - Accounting Standards Codification (“FASB ASC”) Topic 280 as components of public entities that engage in business activities from which they may earn revenues and incur expenses for which separate financial information is available and which is evaluated regularly by the Company’s chief operating decision maker (“CODM”) in deciding how to assess performance and allocate resources. The Company’s CODM assesses performance and allocates resources based on 2two operating segments: (i) Alico Citrus and (ii) Water ResourcesLand Management and Other Operations.

Principles of Consolidation

The Financial Statements include the accounts of Alico and the accounts of all the subsidiaries in which a controlling interest is held by the Company. Under U.S. GAAP, consolidation is generally required for investments of more than 50% of the outstanding voting stock of an investee, except when control is not held by the majority owner. The Company’s subsidiaries include: Alico Land Development, Inc., Alico-Agri, Ltd., Alico Plant World, LLC, Alico Fruit Company, LLC, Alico Citrus Nursery, LLC, Alico Chemical Sales, LLC, 734 Citrus Holdings, LLC and subsidiaries, Alico Fresh Fruit, LLC, Alico Skink Mitigation, LLC and Citree Holdings 1, LLC (“Citree”). The Company considers the criteria established under FASB ASC Topic 810, “Consolidations”in its consolidation process. All significant intercompany balances and transactions have been eliminated in consolidation.

Use of Estimates

The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates, judgments and assumptions that affect the reported amounts of assets and liabilities as of the date of the accompanying Financial Statements, the disclosure of contingent assets and liabilities in the Financial Statements and the accompanying Notes, and the reported amounts of revenues and expenses and cash flows during the periods presented. Actual results could differ from those estimates. The Company evaluates estimates on an ongoing basis. The estimates are based on current and expected economic conditions, historical experience, the experience and judgment of the Company’s management and various other specific assumptions that the Company believes to be reasonable.

Noncontrolling Interest in Consolidated Subsidiary

The Financial Statements include all assets and liabilities of the less-than-100%-owned subsidiary the Company controls, Citree. Accordingly, the Company has recorded a noncontrolling interest in the equity of such entity. Citree had net income of $107,051 for the fiscal year ended September 30, 2020 and net losses of approximately $781,783, $511,854 and $91,432$511,854 for the fiscal years ended September 30, 2019 2018 and 2017,2018, respectively, of which $54,596 of net income and $398,709 and $261,046 and $46,630of net losses was attributable to the Company for the fiscal years ended September 30, 2020, 2019 and 2018, and 2017, respectively.

The shift to net income for the fiscal year ended September 30, 2020 was the result of reimbursements received under the federal relief program relating to Hurricane Irma, aggregating approximately $493,000.

Recent Accounting Pronouncements

In February 2016, the FASB issued Accounting Standards Update (“ASU”) 2016-02, “Leases (Topic 842).” This guidance will require entities that enter into leases as a lessee to recognize right-of-use assets and lease liabilities for those leases classified as operating leases under previous U.S. GAAP. The accounting applied by a lessor is largely unchanged from that applied under previous U.S. GAAP. The Company anticipates recording a Right of Use Asset (“ROU”) and related liability of approximately $511,000 upon the adoption of the new standard on October 1, 2019. Additionally, the Company will record an impairment to the ROU for approximately $87,000. Topic 842 becomes effective for Alico beginning October 1, 2019.

In January 2017, the FASB issued ASU 2017-04, “Intangibles-Goodwill and Other” (Topic 350), which simplifies the accounting for goodwill impairment. The updated guidance eliminates Step 2 of the impairment test, which requires entities to calculate the implied fair value of goodwill to measure a goodwill impairment charge. Instead, entities will record an impairment charge based on the excess of a reporting unit’s carrying amount over its fair value, determined in Step 1. This guidance will become effective for us in the fiscal years beginning after December 15, 2019, including interim periods within those reporting periods. We will adopt this guidance using a prospective approach. Earlier adoption is permitted for interim or annual goodwill impairment tests performed on testing dates after January 1, 2017. The Company does not expect the adoption of ASU 2017-04 will have a material impact on its consolidated financial statements and will adopt the standard effective October 1, 2020.

In August 2018, the FASB issued ASU 2018-13, “Fair Value Measurement (Topic 820): Disclosure Framework - Changes to the Disclosure Requirements for Fair Value Measurements” (“ASU 2018-13”), which aims to improve the overall usefulness of disclosures to financial statement users and reduce unnecessary costs to companies when preparing fair value measurement disclosures. ASU 2018-13 is effective for annual and interim periods in the fiscal years beginning after December 15, 2019. Early adoption is permitted. Retrospective adoption is required, except for certain disclosures, which will be required to be applied prospectively for only the most recent interim or annual period presented in the initial fiscal year of adoption. The Company does not expect the adoption of ASU 2018-13 will have a material impact on its consolidated financial statements and will adopt the standard effective October 1, 2020.

In November 2018, the FASB issued ASU 2018-19, “Codification Improvements to Topic 326, Financial Instruments-Credit Losses.” ASU 2018-19 clarifies that receivables arising from operating leases are not within the scope of Subtopic 326-20. Instead, impairment of receivables arising from operating leases should be accounted for in accordance with Leases (Topic 842). The standard is effective for usthe Company on October 1, 2020, with early adoption permitted. The Company does not expect the adoption of ASU 2018-19 to have a material impact on the unaudited consolidated financial statements of the Company. Information regarding

In December 2019, the FASB issued ASU 2019-12, which simplifies the accounting for income taxes by removing certain exceptions to the general principles in the existing guidance for income taxes and making other minor improvements. The amendments in the ASU are effective for the Company on October 1, 2021. The Company does not expect the adoption of ASU 2016-022019-12 will have a material impact on its consolidated financial statements and will adopt the standard effective October 1, 2021.

In March 2020, the FASB issued ASU 2020-04, Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting, which provides temporary optional expedients and exceptions for applying generally accepted accounting principles to contracts, hedging relationships and other transactions affected by reference rate reform. The Company’s floating rate notes and variable funding notes bear interest at fluctuating interest rates based on LIBOR. If LIBOR ceases to exist, the Company may need to renegotiate its loan agreements and the Company cannot predict what alternative index would be negotiated with its lenders. ASU 2020-04 is described above.

currently effective and upon adoption may be applied prospectively to contract modifications made on or before December 31, 2022. The Company is currently assessing the impact of adopting this standard and the impact on its consolidated financial statements.

The Company has reviewed other recently issued accounting standards which have not yet been adopted in order to determine their potential effect, if any, on the results of operations or financial condition. Based on the review of these other recently issued standards, the Company does not currently believe that any of those accounting pronouncements will have a significant effect on its current or future financial position, results of operations, cash flows or disclosures.

Recently Adopted Accounting Pronouncements

In May 2014, the FASB issued ASU 2014-09, “Revenue from Contracts with Customers”, and subsequently issued several supplemental and/or clarifying ASU’s (collectively, “ASC 606”), which prescribes a comprehensive new revenue recognition standard that supersedes previously existing revenue recognition guidance. The new model provides a five-step analysis in determining when and how revenue is recognized. The core principle of the new guidance is that a company should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. The standard also requires new, expanded disclosures regarding revenue recognition. The standard allows initial application to be performed retrospectively to each period presented or as a modified retrospective adjustment as of the date of adoption. ASC 606 also provides for certain practical expedients, including the option to expense as incurred the incremental costs of obtaining a contract, if the contract period is for one year or less, and policy elections regarding shipping and handling that provides the option to account for shipping and handling costs as contract fulfillment costs. The Company adopted ASC 606 effective October 1, 2018, the first day of ourits 2019 fiscal year, using the modified retrospective method. The implementation of ASC 606 did not require an adjustment to the opening balance of retained earnings as of October 1, 2018 (see Note 2. “Revenue Recognition”).

In February 2017, the FASB issued ASU 2017-05, “Other Income - Gains and Losses from the Derecognition of Nonfinancial Assets”(ASC (ASC 610-20): Clarifying the Scope of Asset Derecognition Guidance and Accounting for Partial Sales of Nonfinancial Assets. This standard clarifies the scope and application of ASC 610-20 on the sale, transfer, and derecognition of nonfinancial assets and in substance nonfinancial assets to non-customers, including partial sales. It also provides guidance on how gains and

losses on transfers of nonfinancial assets and in substance nonfinancial assets to non-customers are recognized. The standard also clarifies the derecognition of businesses is under the scope of ASC 810. The standard was required to be adopted concurrently with ASC 606, however an entity did not have to apply the same transition method as ASC 606. The Company adopted ASC 610-20 (“ASC 610-20”) effective October 1, 2018, the first day of ourits 2019 fiscal year, using the modified retrospective method. The implementation of ASC 610-20 resulted in an adjustment to increase the opening balance of retained earnings by $10,897,000, net of taxes, as of October 1, 2018 (see Note 8. “Deferred Gain on Sale”).2018. As a result of the ASU 610-20, guidance specific to real estate sales in ASC 360-20 will be eliminated. As such, sales and partial sales of real estate assets will now be subject to the same derecognition model as all other nonfinancial assets.

The ASU 610-20 will also impact the accounting for partial sales of nonfinancial assets (including in substance real estate). When an entity transfers its controlling interest in a nonfinancial asset, but retains a noncontrolling ownership interest, the entity will measure the retained interest at fair value. This will result in full gain/loss recognition upon the sale of a controlling interest in a nonfinancial asset. Current guidance generally prohibits gain recognition on the retained interest.

The ASU 610-20 was effective for fiscal years beginning after December 15, 2017, and interim periods within those years and thus was effective for the Company for our fiscal year beginning October 1, 2018. The ASU 610-20 will be applied prospectively to any transaction occurring from the date of adoption. The Company adopted ASU 360-20 effective October 1, 2018. The new guidance did not have a material impact on ourthe Company’s consolidated financial statements as it relates to the deferred gain on the sale of the Company’s sugarcane lands (see Note 8. “Deferred Gain on Sale”).

In May 2017, the FASB issued ASU 2017-09, “Compensation-Stock Compensation” (Topic 718) which clarifies when changes to the terms or conditions of a share-based payment award must be accounted for as modifications. ASU 2017-09 will reduce diversity in practice and result in fewer changes to the terms of an award being accounted for as modifications. Under ASU 2017-09, an entity will not apply modification accounting to a share-based payment award if the award's fair value, vesting conditions and classification as an equity or liability instrument are the same immediately before and after the change. ASU 2017-09 will be applied prospectively to awards modified on or after the adoption date. The guidance was effective for annual periods, and interim periods within those annual periods, beginning after December 15, 2017 and thus was effective for the Company for our fiscal year beginning October 1, 2018. The Company adopted ASU 2017-09 effective October 1, 2018. The new guidance did not have a material impact on our consolidated financial statements

In May 2017, the FASB issued ASU 2016-18, “Statement of Cash Flows (Topic 230): Restricted Cash” which clarifies the diversity in the classification and presentation of changes in restricted cash on the statement of cash flows under Topic 230, Statement of Cash Flows. Under ASU 2016-18, an entity will be required within the statement of cash flows to explain the change during the period in the total of cash, cash equivalents, and amounts generally described as restricted cash or restricted cash equivalents. The Company adopted ASU 2016-18 effective September 30, 2018 and has properly presented restricted cash within the statement of cash flows. The guidance is effective for annual periods, and interim periods within those annual periods, beginning after December 15, 2017 and thus is effective for the Company for our fiscal year beginning October 1, 2018. Early adoption is permitted and the Company, as such, has adopted this guidance as of October 1, 2017.

In August 2016, the FASB issued ASU 2016-15, “Statement of Cash Flows (Topic 230).” This ASU will provide guidance on the presentation and classification of specific cash flow items to improve consistency within the statement of cash flows. This ASU is effective for the Company for our fiscal year beginning October 1, 2019 with early adoption permitted. The Company adopted ASU 2016-15 effective September 30, 2019 and the impact under this ASU is that the Company reported certain proceeds from insurance claims relating to property and equipment in the statement of cash flows as investing activities in the Consolidated Statement of Cash Flows.

Leases

In February 2016, the FASB issued ASU 2016-02, “Leases (Topic 842).” This guidance requires entities that sign leases as a lessee to recognize right-of-use assets and lease liabilities for those leases classified as operating leases under previous U.S. GAAP. The accounting applied by a lessor is largely unchanged from that applied under previous U.S. GAAP. The Company adopted ASU 2016-02 on October 1, 2019.

The Company determines whether an arrangement is a lease at inception. The Company’s leases consist of operating lease arrangements for certain office space, tractor leases and IT facilities. When these lease arrangements include lease and non-lease components, the Company accounts for lease components and non-lease components (e.g. common area maintenance) separately based on their relative standalone prices.

Any lease arrangements with an initial term of 12 months or less are not recorded on the Company’s Condensed Consolidated Balance Sheets, and it recognizes lease cost for these lease arrangements on a straight-line basis over the lease term. Many lease arrangements provide the options to exercise one or more renewal terms or to terminate the lease arrangement. The Company includes these options when it will be reasonably certain to exercise them in the lease term used to establish the right-of-use assets and lease liabilities. Generally, lease agreements do not include an option to purchase the leased asset, residual value guarantees or material restrictive covenants.

As most of our lease arrangements do not provide an implicit interest rate, the Company applies an incremental borrowing rate based on the information available at the commencement date of the lease arrangement to determine the present value of lease payments.

No lease costs associated with finance leases and sale-leaseback transactions occurred and our lease income associated with lessor and sublease arrangements are not material to our Consolidated Financial Statements.

Our operating leases are reported in our Consolidated Balance Sheets as follows:

(in thousands)
				September 30,
Operating lease components		Classification		2020
Right-of-use assets		Other non-current assets		$	774
Current lease liabilities		Other current liabilities		$	512
Non-current lease liabilities		Other liabilities		$	356

Our operating leases cost components are reported in our Consolidated Statements of Operations as follows:

(in thousands)
				September 30,
Operating lease components		Classification		2020
Operating lease costs		General and administrative expenses		$	246
Operating lease right-of-use asset impairment		Other expense		$	87

Future maturities of our operating lease obligations as of September 30, 2020 by fiscal year are as follows:

(in thousands)
2021				$	519
2022					324
2023					48
Total noncancelable future lease obligations				$	891
Less: Interest					(24	)
Present value of lease obligations				$	867

The weighted-average remaining lease term and weighted-average discount rate for our operating leases are as follows:

				September 30, 2020
Weighted-average remaining lease term				1.61 years
Weighted-average discount rate				3.1	%

Cash flow information related to leases consists of the following:

(in thousands)
				September 30, 2020
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows from operating leases				$	247
Right-of-use assets obtained in exchange for lease obligations:
Operating leases				$	1,095

The COVID-19 Pandemic

On March 11, 2020, the World Health Organization declared the current novel coronavirus outbreak (“COVID-19”) to be a global pandemic. In response to this declaration and the rapid spread of COVID-19 within the United States, federal, state and local governments throughout the country have imposed varying degrees of restrictions on social and commercial activity to promote social distancing in an effort to slow the spread of the illness. These measures have had a significant adverse impact upon many sectors of the economy, including certain agriculture businesses. To date, the Company has experienced no material adverse impact from this pandemic.

Reclassifications

Certain prior year amounts have been reclassified in the accompanying Financial Statements for consistent presentation to the current period. These reclassifications had no impact on net income, equity, cash flows or working capital as previously reported.

Seasonality

The Company is primarily engaged in the production of fruit for sale to citrus markets, which is of a seasonal nature, and subject to the influence of natural phenomena and wide price fluctuations. Historically, the second and third quarters of Alico's fiscal year produce the majority of the Company's annual revenue. Working capital requirements are typically greater in the first and fourth quarters of the fiscal year, coinciding with harvesting cycles. Because of the seasonality of the business, results for any quarter are not necessarily indicative of the results that may be achieved for the full fiscal year.

Note 2. Summary of Significant Accounting Policies

Revenue Recognition

Revenues are derived from the sale of processed fruit, fresh fruit, other citrus revenue, leasing revenue and other water and resource revenues. The majority of the revenue is generated from the sale of citrus fruit to processing facilities, and fresh fruit sales. Thesales and grove management services.

For fruit sales, the Company recognizes revenue at the amount it expects to be entitled to be paid, determined when control of the products or services is transferred to its customers, which occurs upon delivery of and acceptance of the fruit by the customer and the Company has a right to payment.

The Company has identified one performance obligation as the delivery of fruit to the processing facility (or harvesting of the citrus in the case of fresh fruit) of the customer for each separate variety of fruit identified in the contract. The Company initially recognizes revenue in an amount which is estimated based on contractual and market prices, if such market price falls within the range (known as “floor” and “ceiling” prices) identified in the specific contracts. Additionally, the Company also has a contractual agreement whereby revenue is determined based on applying a cost-plus structure methodology. As such, since these contracts contain elements of variable consideration, the Company recognizes this variable consideration by using the expected value method. On a quarterly basis, management reviews the reasonableness of the revenues accrued based on buyers’ and processors’ advances to growers, cash and futures markets and experience in the industry. Adjustments are made throughout the year to these estimates as more current relevant industry information becomes available. Differences between the estimates and the final realization of revenues at the close of the harvesting season can result in either an increase or decrease to reported revenues. During the periods presented, no material adjustments were made to the reported citrus revenues.

Receivables under contracts, whereby pricing is based on contractual and market prices, are primarily paid at the floor amount and are collected within seven days after the harvest week. Any adjustments to pricing as a result of changes in market prices are collected or paid thirty to sixty days after final market pricing is published. Receivables under contracts, whereby pricing is based off a cost-plus structure methodology, are paid at the final prior year rate. Any adjustments to pricing as a result of the cost-plus calculation are collected or paid upon finalization of the calculation and agreement by both parties. As of September 30, 2019,2020 and 2018,2019, the Company had total receivables relating to sales of citrus of $160,000$584,000 and $1,912,000,$160,000, respectively, recorded in Accounts Receivable, net, in the Condensed Consolidated Balance Sheets.

For grove management services, the Company has identified one performance obligation relating to the management of the third party’s groves. Grove management services include caretaking of the citrus groves, harvesting and hauling of citrus, management and coordination of citrus sales and other related activities. The Company is reimbursed for expenses incurred in the execution of its management duties and the Company receives a per acre management fee. The Company recognizes operating revenue, including a management fee, and corresponding operating expenses when services are rendered and consumed.

Disaggregated Revenue

Revenues disaggregated by significant products and services for the fiscal years ended September 30, 2020, 2019 2018 and 20172018 are as follows:

(in thousands)		Fiscal Year Ended September 30,
		2020				2019				2018
Alico Citrus
Early and Mid-Season		$	31,303			$	39,574			$	24,309
Valencias			50,060				73,480				48,865
Fresh fruit			2,321				3,629				2,054
Grove management services			4,599				1,342				1,808
Other			1,086				1,006				1,085
Total		$	89,369			$	119,031			$	78,121
Land Management and Other Operations
Land and other leasing		$	2,683			$	2,787			$	2,595
Sale of calves and culls			—				—				57
Other			455				433				508
Total		$	3,138			$	3,220			$	3,160
Total Revenues		$	92,507			$	122,251			$	81,281

(in thousands)	Fiscal Year Ended September 30,
	2019				2018				2017
Alico Citrus
Early and Mid-Season	$	39,574			$	24,309			$	45,999
Valencias	73,480				48,865				67,146
Fresh Fruit	3,629				2,054				5,735
Other	2,348				2,893				4,561
Total	$	119,031			$	78,121			$	123,441
Water Resources and Other Operations
Land and other leasing	$	2,787			$	2,595			$	2,294
Sale of calves and culls	—				57				3,732
Other	433				508				362
Total	$	3,220			$	3,160			$	6,388
Total Revenues	$	122,251			$	81,281			$	129,829

During the time that Alico was engaged in the business of raising and selling cattle, Alico recognized revenues from cattle sales at the time the cattle were delivered.

Alico Fruit Company, LLC ("AFC") operations primarily consist of providing supply chain management services to Alico, as well as to other citrus growers and processors in the state of Florida. AFC also purchases and resells citrus fruit; in these transactions, AFC (i) acts as a principal; (ii) takes title to the products; and (iii) has the risks and rewards of ownership, including the risk of loss for collection, delivery or returns. Therefore, AFC recognizes revenues based on the gross amounts due from customers for its marketing activities. Supply chain management services revenues are recognized when the services are performed.

Fair Value of Financial Instruments

The carrying amounts of the Company’s financial instruments, including cash and cash equivalents, restricted cash, accounts receivable, accounts payable and accrued liabilities approximate their fair values due to the short term and immediate nature of these financial instruments. The carrying amounts of ourthe Company’s debt approximates fair value as the debt is with commercial lenders at interest rates that vary with market conditions or have fixed rates that approximate market rates for obligations with similar terms and maturities (see Note 9.8. “Fair Value Measurements”).

Cash and Cash Equivalents

The Company considers cash in banks and highly liquid instruments with an original maturity of three months or less to be cash and cash equivalents. At various times throughout the fiscal year, and as of September 30, 2019,2020, some accounts held at financial institutions were in excess of the federally insured limit of $250,000. The Company has not experienced any losses on these accounts and believes credit risk to be minimal.

Restricted Cash

Restricted cash is comprised of certain cash receipts from the sale of property which was being held specifically for the purpose of deferring a tax impact on the gain on sale of the property and other cash received from the sale of certain assets in which the use of funds iswere restricted.

In September 2020, the Company sold certain sections of the West Ranch, from which a portion of the net cash proceeds amounting to $16,524,000 were being held by a qualified intermediary in coordination to purchase a like-kind asset and defer a portion of the gain on sale of the ranch land. Such funds were included in restricted cash. In October 2020, the Company closed on a purchase of a like-kind asset and used all of these net cash proceeds which was being held by the intermediary (see Note 17. “Subsequent Events”).

For certain sales transactions, the Company sells property which serves as collateral for specific debt obligations. As a result, the sale proceeds canare only permitted to be used to purchase like-kind citrus groves acceptable to the debt holder or to pay down existing debt obligations. Duringobligations and thus are included in restricted cash. For the fiscal year ended September 30, 2019, the Company utilized restricted cash of $1,800,000 towards the purchase of citrus groves. Such purchases are included as part of the collateral under certain debt obligations. IfAdditionally, in November 2019, the Company utilized restricted cash to pay down existing debt, including outstanding interest on such debt, in the amount of $4,489,000. In July 2020, the remaining restricted cash is not used as of September 30, 2020, it will be usedapproximately $719,000 relating to pay down principal on Company debt. Based oncollateral property under debt obligations, including interest earned in the contractual uses of restricted cash, these amounts have been classified as non-current.account, was released without further obligation to the Company.

Accounts receivable

Accounts receivable from customers are generated from revenues based on the sale of citrus, grove management, leasing and other transactions. The Company grants credit in the course of its operations to third party customers. The Company performs periodic credit evaluations of its customers’ financial condition and generally does not require collateral. The Company provides an allowance for doubtful accounts for amounts which are not probable of collection. The estimate, evaluated quarterly by the Company, is based on historical collection experience, current macroeconomic climate and market conditions and a review of the current status of each customer’s account. Changes in the financial viability of significant customers and worsening of economic conditions may require changes to its estimate of the recoverability of the receivables. Such changes in estimates are recorded in the period in which these changes become known. The bad debt expense is included in general and administrative expenses in the Consolidated Statements of Operations.

The following table presents accounts receivable, net as of September 30, 20192020 and 2018:2019:

(in thousands)		September 30,
		2020				2019
Accounts receivable		$	4,384			$	746
Allowance for doubtful accounts			(37	)			(33	)
Accounts receivable, net		$	4,347			$	713

(in thousands)	September 30,
	2019				2018
Accounts receivable	$	746			$	2,577
Allowance for doubtful accounts	(33		)		(33		)
Accounts receivable, net	$	713			$	2,544

Concentrations

Accounts receivable from the Company’s major customer as of September 30, 20192020 and 20182019 and revenue from such customers for the fiscal years ended September 30, 2020, 2019 2018 and 2017,2018, are as follows:

(in thousands)		Accounts Receivable								Revenue												% of Total Revenue
		2020				2019				2020				2019				2018				2020				2019				2018
Tropicana		$	—			$	—			$	80,388			$	108,318			$	70,396				86.9	%			88.6	%			86.6	%

(in thousands)	Accounts Receivable							Revenue										% of Total Revenue
	2019			2018				2019			2018			2017				2019		2018		2017
Tropicana	$	—		$	1,797			$	108,318		$	70,396		$	111,197			88.6	%	86.6	%	85.6	%

The citrus industry is subject to various factors over which growers have limited or no control, including weather conditions, disease, pestilence, water supply and market price fluctuations. Market prices are highly sensitive to aggregate domestic and foreign crop sizes, as well as factors including, but not limited to, weather and competition from foreign countries.

Real Estate

In recognizing revenues from land sales, the Company applies specific revenue recognition criteria, in accordance with U.S. GAAP, to determine when land sales revenues can be recorded. For example, in order to fully recognize a gain resulting from a real estate transaction, the sale must be consummated with a sufficient down payment of at least 20% to 25% of the sales price depending upon the type and timeframe for development of the property sold and any receivable from the sale cannot be subject to future subordination. In addition, the seller cannot retain any material continuing involvement in the property sold. When these criteria are not met, the Company recognizes a gain proportionate to collections utilizing either the installment method or deposit method as appropriate.

Inventories

The costs of growing crops, including but not limited to labor, fertilization, fuel, crop nutrition, irrigation, and depreciation, are capitalized into inventory throughout the respective crop year. Such costs are expensed as cost of sales when the crops are harvested and are recorded as operating expenses in the Consolidated Statements of Operations. Inventories are stated at the lower of cost or net realizable value. The cost for unharvested citrus crops is based on accumulated production costs incurred during the period from January 1 through the balance sheet date.

Property and Equipment

Property and equipment are stated at cost, net of accumulated depreciation, depletion and amortization. Major improvements are capitalized while expenditures for maintenance and repairs are expensed when incurred. Costs related to the development of citrus groves through planting of trees are capitalized. Such costs include land clearing, excavation and construction of ditches, dikes, roads, and reservoirs, among other costs. After the planting, caretaking costs or pre-productive maintenance costs are capitalized for 4 years. After 4 years, a planting is considered to have reached maturity and the accumulated costs are depreciated over 25 years, except for land clearing and excavation, which are considered costs of land and not depreciated.

Real estate costs incurred for the acquisition, development and construction of real estate projects are capitalized.

Depreciation is provided on a straight-line basis over the estimated useful lives of the depreciable assets, with the exception of leasehold improvements and assets acquired through capital leases, which are depreciated over their estimated useful lives if the lease transfers ownership or contains a bargain purchase option, otherwise the term of the lease.

The estimated useful lives for property and equipment are primarily as follows:

Citrus trees		25 years
Citrus trees	25 years
Equipment and other facilities		3-20 years
Buildings and improvements		25-39 years

Changes in circumstances, such as technological advances or changes to our business model or capital strategy could result in the actual useful lives differing from the original estimates. In those cases where the Company determines that the useful life of property and equipment should be shortened, Alico depreciates the asset over its revised estimated remaining useful life, thereby increasing depreciation expense (see Note 5. “Property and Equipment, Net”).

Impairment of Long-Lived Assets

The Company reviews its long-lived assets for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset or asset group may not be recoverable. The Company records impairment losses on long-lived assets used in operations, or asset group, when events and circumstances indicate that the assets might be impaired and the estimated cash flows (undiscounted and without interest charges) to be generated by those assets or asset group over the remaining lives of the assets or asset group are less than the carrying amounts of those assets. In calculating impairments and the estimated cash flows, the Company assigns its asset groups by determining the lowest level for which there are identifiable cash flows that are largely independent of the cash flows of the other Company assets. The net carrying values of assets or asset group not recoverable are reduced to their fair values. Alico's cash flow estimates are based on historical results adjusted to reflect best estimates of future market conditions and operating conditions. For fiscal years ended September 30, 2020, 2019 2018 and 2017,2018, the Company recorded impairments to its long-lived assets (see Note 5. “Property and Equipment, Net”). As of September 30, 2019, 20182020 and 2017,2019, long-lived assets were comprised of property and equipment.

Goodwill and Intangible Assets

Goodwill represents the excess of the purchase price of acquired businesses over the fair value of the assets acquired less liabilities assumed in connection with such acquisition. In accordance with the provisions of ASC 350, Intangibles-Goodwill and Other, goodwill and intangible assets with indefinite useful lives acquired in an acquisition are not amortized, but instead are tested for impairment at least annually, on the same date, or more frequently should an event occur or circumstances indicate that the carrying amount may be impaired. Such events or circumstances may be a significant change in business climate, economic and industry trends, legal factors, negative operating performance indicators, significant competition, changes in strategy or disposition of a reporting unit or a portion thereof.

In the evaluation of goodwill for impairment, Alico has the option to perform a qualitative assessment to determine whether further impairment testing is necessary or to perform a quantitative assessment by comparing the fair value of a reporting unit to its carrying amount, including goodwill. Under the qualitative assessment, an entity is not required to calculate the fair value of a reporting unit unless the entity determines that it is more likely than not that its fair value is less than its carrying amount. If, under the quantitative assessment, the fair value of a reporting unit is less than it'sits carrying amount, then the amount of the impairment loss, if any, must be measured under step two of the impairment analysis. In step two of the analysis, Alico would record an impairment loss equal to the excess of the carrying value of the reporting unit’s goodwill over its implied fair value, should such a circumstance arise. As of September 30, 20192020 and 2018,2019, no impairment was required.

Other Non-Current Assets

Other non-current assets primarily include investments owned in agricultural cooperatives, cash surrender value on life insurance, and deposits on the purchase of citrus trees. Investments in stock related to agricultural cooperatives are carried at cost.

Income Taxes

The Company uses the asset and liability method of accounting for deferred income taxes. The provision for income taxes includes income taxes currently payable and those deferred as a result of temporary differences between the financial statements and the income tax basis of assets and liabilities. Deferred income tax assets and liabilities are measured using enacted income tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect of a change in income tax rates on deferred income tax assets and liabilities is recognized in income or loss in the period that includes the enactment date. A valuation allowance is provided to reduce deferred tax assets to the amount of future tax benefit when it is more likely than not that some portion or all of the deferred tax assets will not be realized. Projected future taxable income and ongoing tax planning strategies are considered and evaluated when assessing the need for a valuation allowance. Any increase or decrease in a valuation allowance could have a material adverse or beneficial impact on the Company’s income tax provision and net income or loss in the period the determination is made. For the fiscal years ended September 30, 2020, 2019 2018 and 2017,2018, the Company recorded valuation allowances of $0, $5,634,000$0, and $581,000,$5,634,000, respectively, relating to the unutilized capital loss carryforwards which expired. The Company recognizes interest and/or penalties related to income tax matters in income tax expense.

The Company recognizes the effect of income tax positions only if those positions are more likely than not of being sustained. Recognized income tax positions are measured at the largest amount that is greater than 50% likely of being realized. Changes in recognition or measurement are reflected in the period in which a change in judgment occurs. The Company records interest related to unrecognized tax benefits in income tax expense.

Earnings per Share

Basic earnings per share for ourthe Company’s common stock is calculated by dividing net income attributable to Alico common stockholders by the weighted average number of shares of common stock outstanding for the period. Diluted earnings per common share is similarly calculated, except that the calculation includes the dilutive effect of the assumed issuance of shares of common stock issuable under equity-based compensation plans in accordance with the treasury stock method, or any other type of securities convertible into common stock, except where the inclusion of such common shares would have an anti-dilutive effect.

The following table presents a reconciliation of basic to diluted weighted average common shares outstanding for fiscal years ended September 30, 2020, 2019 2018 and 2017:2018:

(in thousands)		Fiscal Year Ended September 30,
		2020				2019				2018
Weighted Average Common Shares Outstanding - Basic			7,484				7,472				8,232
Effect of dilutive securities - stock options and unrestricted stock			12				21				69
Weighted Average Common Shares Outstanding - Diluted			7,496				7,493				8,301

(in thousands)	Fiscal Year Ended September 30,
	2019			2018			2017
Weighted Average Common Shares Outstanding - Basic	7,472			8,232			8,300
Effect of dilutive securities - stock options and unrestricted stock	21			69			—
Weighted Average Common Shares Outstanding - Diluted	7,493			8,301			8,300

For the fiscal years ended September 30, 2020, 2019 and 2018, and 2017,respectively, the Company issued 118,000, 10,000, 300,000 and 750,000,300,000, respectively, stock options to certain executives and managers of the Company. Non-vested restricted shares of common stock entitle the holder to receive non-forfeitable dividends upon issuance and are included in the calculation of diluted earnings per common share. For the fiscal year ended September 30, 2017, the Company had stock options that were excluded from the diluted earnings per share because they were anti-dilutive.

Stock-Based Compensation

Stock-based compensation is measured based on the fair value of the equity award at the grant date and is typically expensed on a straight-line basis over the vesting period. Upon the vesting of restricted stock, the Company issues common stock from common shares held in treasury.

Total stock-based compensation expense for the three years ended September 30, 2020, 2019 and 2018 in general and administrative expense was as follows:

(in thousands)		Fiscal Year Ended September 30,
		2020				2019				2018
Stock-based compensation expense:
Executives		$	497			$	778			$	1,754
Management			76				—				—
Executive forfeitures			—				(823	)			—
Board of Directors			733				869				859
Total stock-based compensation expense		$	1,306			$	824			$	2,613

(in thousands)	Fiscal Year Ended September 30,
	2019				2018				2017
Stock compensation expense:
Executives	$	778			$	1,754			$	880
Executive forfeitures	(823		)		—				—
Board of Directors	869				859				773
Total stock compensation expense	$	824			$	2,613			$	1,653

Note 3. Inventories

Inventories consist of the following at September 30, 20192020 and 2018:2019:

(in thousands)		September 30,
		2020				2019
Unharvested fruit crop on the trees		$	40,265			$	39,276
Other			590				867
Total inventories		$	40,855			$	40,143

(in thousands)	September 30,
	2019				2018
Unharvested fruit crop on the trees	$	39,276			$	39,888
Other	867				1,145
Total inventories	$	40,143			$	41,033

The Company records its inventory at the lower of cost or net realizable value. For the fiscal yearsyear ended September 30, 2019, and 2018, the Company recorded adjustments of approximately $808,000 to reduce inventory to net realizable value of approximately $808,000 and $1,115,000 respectively. These adjustmentsvalue. This adjustment to inventory areis included in operating expenses in the Consolidated StatementsStatement of Operations.

In September 2017, the State of Florida’s citrus business, including the Company’s unharvested citrus crop, was significantly impacted by Hurricane Irma. The impact of Hurricane Irma resulted in the premature drop of unharvested fruit and damage to citrus trees, which will impact fruit production until such time as the citrus trees recover, potentially through the 2018/2019 harvest season. The Company undertook a process to estimate the amount of inventory casualty loss as of the date of Hurricane Irma. Such process included a number of factors including: (1) touring all of the citrus groves by operational personnel to assess the estimated fruit drop by grove and the impact of damage to the citrus trees; (2) consideration of independent estimates of the reduced citrus production for the State of Florida; and (3) an estimate of fruit the Company expects to produce for the 2017/2018 harvest season after Hurricane Irma. As a result, the Company recorded a casualty loss to reduce the carrying value of unharvested fruit crop on trees inventory by approximately $13,489,000.

During the fiscal year ended September 30, 2019, the Company received insurance proceeds relating to Hurricane Irma of approximately $486,000 in additional property and casualty claims reimbursement. There are no further property and casualty or crop insurance claims pending relating to Hurricane Irma. During the fiscal year ended September 30, 2018, the Company received insurance proceeds relating to Hurricane Irma of approximately $477,000 for property and casualty damage claims and approximately $8,952,000 for crop claims. These insurance proceeds are included as a reduction to operating expenses in the Consolidated Statements of Operations.

trees.

The Company is eligible for Hurricane Irma federal relief programs for block grants that are being administered through the State of Florida. During the fourth quarter of fiscal year 2019 and for the fiscal year ended September 30, 2019, the Company received approximately $15,597,000 under the Florida Citrus Recovery Block Grant (“CRBG”) program. This represents the Part 1 and a portion of the Part 2 reimbursement under the three-part program. For the fiscal year ended September 30, 2020, the Company received additional proceeds of approximately $4,629,000 under the Florida CRBG program. This represented the remaining portion of Part 2 reimbursement under the three-part program. The timing and amount to be received under the remaining portion of the Part 2 and the Part 3 of the program has not been finalized. These federal relief proceeds are included as a reduction to operating expenses in the Consolidated Statements of Operations.

On November 7, 2019 and November 18,

For the fiscal year ended September 30, 2019, the Company received additionalinsurance proceeds relating to Hurricane Irma of approximately $163,800$486,000 in additional property and casualty claims reimbursement. For the fiscal year ended September 30, 2018, the Company received insurance proceeds relating to Hurricane Irma of approximately $477,000 for property and casualty damage claims and approximately $3,973,000, respectively, under$8,952,000 for crop claims. These insurance proceeds are included as a reduction to operating expenses in the Florida CRBG program. This represents another portionConsolidated Statements of the Part 2 reimbursement under the three-part program.

Operations. There are no further property and casualty or crop insurance claims pending relating to Hurricane Irma.

Note 4. Assets Held for Sale

In accordance with its strategy to dispose of non-core and under-performing assets, the following assets have been classified as assets held for sale as of September 30, 20192020 and September 30, 2018:2019:

(in thousands)		Carrying Value
		Fiscal Year Ended September 30,
		2020				2019
East Ranch		$	1,366			$	1,442
Total Assets Held For Sale		$	1,366			$	1,442

(in thousands)	Carrying Value
	Fiscal Year Ended September 30,
	2019				2018
East Ranch	$	1,442			$	759
Trailers	—				456
Frostproof Parcels	—				176
Total Assets Held For Sale	$	1,442			$	1,391

During

On September 10, 2020, the State of Florida purchased, under the Florida Forever program, approximately 10,702 acres of the Alico Ranch for approximately $28,500,000 pursuant to an option agreement entered between the State of Florida and the Company. The Company recognized a gain of approximately $27,470,000, which is included in Gain on sale of real estate, property and equipment and assets held for sale in the Consolidated Statements of Operations. The Company subsequently used a portion of the net cash proceeds to purchase a like-kind asset in October 2020, which allowed the Company to defer a portion of the tax impact of the gain on sale of the ranch land (see Note 17. “Subsequent Events”).

On March 27, 2020, the Company sold certain sections at the East Ranch for approximately $2,980,000 and realized a gain of approximately $2,748,000. The Company subsequently used substantially all of the net cash proceeds to purchase a like-kind asset in May 2020, which will allow the Company to defer substantially all of the tax impact of the gain on sale of the ranch land.

For the fiscal year ended September 30, 2019, the Company sold certain trailers for approximately $47,000, and reclassified the remaining Assets Held for Sale to property and equipment, as management has determined not to offer for sale the remaining trailers.

trailers for sale.

On October 30, 2018, the Company sold certain parcels at Frostproof for approximately $206,000 and realized a gain of approximately $12,000.

On May 2, 2018, the Company sold its Gal Hog property for approximately $7,300,000 and recognized a gain of approximately $6,709,000.

On February 12, 2018, the Company sold its property at Chancey Bay for approximately $4,200,000 and realized a loss of approximately $51,000. As part of the transaction, the Company agreed to pay the purchaser rent of $200,000 in exchange for Alicothe Company retaining the rights of harvesting and selling of the fruit in the 2017/2018 harvest season.

On February 9, 2018, the Company sold its nursery located in Gainesville for approximately $6,500,000 and realized a gain of approximately $111,000.

On January 25, 2018, the Company sold its breeding herd to a third party for approximately $7,800,000 and realized a gain of approximately $1,759,000. As part of this transaction, the purchaser is also leasing from the Company grazing and other rights on the Alico Ranch from the Company at a rate of $100,000 per month. Upon the sale of a parcel within the East Ranch, the lease rate was adjusted to $98,750 per month.

On January 19, 2018, the Company sold certain trailers to a third party for $500,000. The Company received $125,000 and the remaining portion is to be paid in accordance with a promissory note, which bears interest at 5%, over three years.

On October 30, 2017, the Company sold its corporate office building in Fort Myers, Florida for $5,300,000 and realized a gain of approximately $1,751,000. The sales agreement provides that the Company lease back a portion of the office space for five years.  Such lease is classified as an operating lease.

The Company recorded 0 impairment loss during the fiscal year ended September 30, 2020. The Company recorded an impairment loss of approximately $152,000 and $150,000 for the fiscal years ended September 30, 2019 and 2018, respectively. These impairments areimpairment losses were included in operating expenses on the Consolidated Statements of Operations.

The Company has already used a portion of the proceeds from these various asset sales to pay down debt (see Note 6. "Long-Term Debt and Lines of Credit") and repurchase common sharesto purchase citrus groves and plans to use the remaining cash proceeds from the sale of these assets to purchase other citrus groves, pay down other debt and to fund future working capital requirements and for other corporate purposes.

Note 5. Property and Equipment, Net

Property and equipment, net consists of the following at September 30, 20192020 and September 30, 2018:2019:

(in thousands)		September 30,
		2020				2019
Citrus trees		$	296,012			$	281,149
Equipment and other facilities			55,593				54,622
Buildings and improvements			8,128				8,224
Total depreciable properties			359,733				343,995
Less: accumulated depreciation and depletion			(115,440	)			(104,169	)
Net depreciable properties			244,293				239,826
Land and land improvements			105,768				105,822
Property and equipment, net		$	350,061			$	345,648

(in thousands)	September 30,
	2019				2018
Citrus trees	$	281,149			$	264,714
Equipment and other facilities	54,622				53,544
Buildings and improvements	8,224				8,052
Total depreciable properties	343,995				326,310
Less: accumulated depreciation and depletion	(104,169		)		(91,858		)
Net depreciable properties	239,826				234,452
Land and land improvements	105,822				105,951
Property and equipment, net	$	345,648			$	340,403

During

On June 1, 2020, the Company sold approximately 30 ranch acres to an employee for approximately $122,000 and recognized a gain of approximately $83,000.

On May 4, 2020, the Company purchased 334 citrus acres for approximately $2,850,000. This acquisition complements the Company’s existing citrus acres as these acres are located adjacent to existing groves in the Frostproof area. Additionally, this purchase was part of a like-kind exchange transaction, which allowed the Company to defer taxes relating to the sale of certain sections of the East Ranch.

For the fiscal year ended September 30, 2019, the Company purchased 203 acres of citrus blocks for approximately $1,950,000. These purchases were made from grove owners from within the Company’s existing grove locations. In April 2019, the lender, PGIM Real Estate Finance, LLC (“Prudential”), agreed to accept those purchases completed through April 2019 as substitute collateral and release $1,800,000 from restricted cash, which was completed in the fourth quarter of fiscal year 2019. Subsequent toAfter April 2019, there were 2 additional purchases of Citrus blocks for approximately $100,000 that are not included as part of the substitution collateral.

On September 27, 2019, the Company sold approximately 5,500 acres from its West Ranch for approximately $14,775,000 and realized a gain on sale of approximately $13,033,000. Upon the sale of these acres, the lease rate pertaining to the grazing and other rights was adjusted from $98,750 to $80,000 per month, as this space on these acres was previously being leased to a third party.

On September 29, 2018, the Company sold its property at Island Pond for $7,900,000. As the Island Pond property was collateralized under one of the Company’s loan documents, $7,000,000 of the proceeds was restricted in use.

On September 28, 2018, The Company sold a parcel within the East Ranch for approximately $1,920,000 and realized a gain of approximately $1,759,000.

On March 30, 2018, the Company sold property located on its WinterhavenWinter Haven location for approximately $225,000 and recognized a loss of approximately $50,000.

On March 15, 2018, the Company sold certain parcels comprised of citrus trees and land located on its Ranch One grove for approximately $586,000 and recognized a loss of approximately $87,000.

On February 2, 2017, the Company sold 49 acres of land and facilities in Hendry County, Florida, to its former tenant for $2,200,000, resulting in a gain of approximately $1,371,000.

During

For fiscal yearyears ended September 30, 2020, 2019 and 2018, the Company recorded impairments of approximately $723,000, $244,000 and $2,084,000, respectively, relating to the loss of citrus trees. During

As a result of the sale of a portion of the Alico Ranch to the State of Florida comprising approximately 10,700 acres on the western part of the ranch and because the sale of those acres affected the proposed dispersed water management project, the Company decided to suspend all permit approval activities for its dispersed water management project and the Company wrote-down approximately $598,000 of assets relating to this project during the fourth quarter of the fiscal year ended September 30, 2018, the Company recorded impairments aggregating to approximately $2,084,000, which consisted of $1,032,000 relating to Island Pond and $1,052,000 relating to certain citrus trees damaged by Hurricane Irma and from other natural attrition.

2020.

Note 6. Long-Term Debt and Lines of Credit

The following table summarizes long-term debt and related deferred financing costs, net of accumulated amortization at September 30, 20192020 and September 30, 2018:2019:

		September 30, 2020								September 30, 2019
(in thousands)		Principal				Deferred Financing Costs, Net				Principal				Deferred Financing Costs, Net
Long-term debt, net of current portion:
Met Fixed-Rate Term Loans		$	83,438			$	621			$	89,688			$	724
Met Variable-Rate Term Loans			40,969				286				43,844				334
Met Citree Term Loan			4,512				36				4,750				40
Pru Loans A & B			15,097				207				16,257				224
Pru Loan E			4,235				1				4,455				9
Pru Loan F			—				—				4,455				38
			148,251				1,151				163,449				1,369
Less current portion			9,145				—				5,338				—
Long-term debt		$	139,106			$	1,151			$	158,111			$	1,369

	September 30, 2019								September 30, 2018
(in thousands)	Principal				Deferred Financing Costs, Net				Principal				Deferred Financing Costs, Net
Long-term debt, net of current portion:
Met Fixed-Rate Term Loans	$	89,688			$	724			$	95,938			$	836
Met Variable-Rate Term Loans	43,844				334				46,719				385
Met Citree Term Loan	4,750				40				4,925				44
Pru Loans A & B	16,257				224				17,417				241
Pru Loan E	4,455				9				4,675				17
Pru Loan F	4,455				38				4,675				40
	163,449				1,369				174,349				1,563
Less current portion	5,338				—				5,275				—
Long-term debt	$	158,111			$	1,369			$	169,074			$	1,563

The following table summarizes lines of credit and related deferred financing costs, net of accumulated amortization at September 30, 20192020 and September 30, 2018:2019:

		September 30, 2020								September 30, 2019
(in thousands)		Principal				Deferred Financing Costs, Net				Principal				Deferred Financing Costs, Net
Lines of Credit:
RLOC		$	—			$	141			$	—			$	8
WCLC			2,942				—				—				—
Lines of Credit		$	2,942			$	141			$	—			$	8

	September 30, 2019								September 30, 2018
(in thousands)	Principal				Deferred Financing Costs, Net				Principal				Deferred Financing Costs, Net
Lines of Credit:
RLOC	$	—			$	8			$	—			$	58
WCLC	—				—				2,685				78
Lines of Credit	$	—			$	8			$	2,685			$	136

Future maturities of long-term debt and lines of credit as of September 30, 20192020 are as follows:

(in thousands)		September 30, 2020
Due within one year		$	9,145
Due between one and two years			10,535
Due between two and three years			10,535
Due between three and four years			13,477
Due between four and five years			10,535
Due beyond five years			96,966
Total future maturities		$	151,193

(in thousands)
Due within one year	$	5,338
Due between one and two years	14,990
Due between two and three years	10,755
Due between three and four years	10,755
Due between four and five years	10,755
Due beyond five years	110,856
Total future maturities	$	163,449

Interest costs expensed and capitalized were as follows:

(in thousands)		Fiscal Year Ended September 30,
		2020				2019				2018
Interest expense		$	5,981			$	7,180			$	8,561
Interest capitalized			1,228				1,019				933
Total		$	7,209			$	8,199			$	9,494

(in thousands)	Fiscal Year Ended September 30,
	2019				2018				2017
Interest expense	$	7,180			$	8,561			$	9,141
Interest capitalized	1,019				933				294
Total	$	8,199			$	9,494			$	9,435

Debt

The Company's credit facilities consist of $125,000,000 in fixed interest rate term loans (“Met Fixed-Rate Term Loans”), $57,500,000 in variable interest rate term loans (“Met Variable-Rate Term Loans”), a $25,000,000 revolving line of credit (“RLOC”) with Metropolitan Life Insurance Company and New England Life Insurance Company (collectively “Met”), and a $70,000,000 working capital line of credit (“WCLC”) with Rabo Agrifinance, Inc. (“Rabo”).

The term loans and RLOC are secured by real property. The security for the term loans and RLOC consists of approximately 38,200 gross acres of citrus groves and 5,800 gross acres of Ranch land. The WCLC is collateralized by the Company’s current assets and certain other personal property owned by the Company.

The term loans, collectively, are subject to quarterly principal payments of $2,281,250, and mature November 1, 2029. The Met Fixed-Rate Term Loans bear interest at 4.15% per annum, and the Met Variable-Rate Term Loans bear interest at a rate equal to 90 day LIBOR plus 165 basis points (the “LIBOR spread”). The LIBOR spread is subject to adjustment by Met beginning May 1, 2017 and is subject to further adjustment every two years thereafter until maturity. No adjustment in the LIBOR spread was made at May 1, 2019. Interest on the term loans is payable quarterly. The interest rates on the Met Variable-Rate Term Loans were 3.91%1.91% per annum and 3.99%3.91% per annum as of September 30, 20192020 and September 30, 2018,2019, respectively. 

The Company may prepay up to $8,750,000 of the Met Fixed-Rate Term Loan principal annually without penalty, and any such prepayments may be applied to reduce subsequent mandatory principal payments. The maximum annual prepayment was made for calendar year 2015. During the first and second quarter of fiscal year 2018, the Company elected not to make its principal payment and utilized a portion of its 2015 prepayment to satisfy its principal payment requirements for such quarters. At September 30, 2019,2020, the Company had $5,625,000, remaining available from its 2015 prepayment to reduce future mandatory principal payments should the Company elect to do so. The Met Variable-Rate Term Loans may be prepaid without penalty.

In March 2020, as a precautionary measure, the Company drew down an aggregate of $70,000,000 on its revolving credit facilities; $20,000,000 on its RLOC and $50,000,000 on its WCLC. This decision was made to safeguard the Company’s liquidity and to increase available cash on hand in the event of a more protracted COVID-19 outbreak. As of September 30, 2020, the Company had paid back a majority of the balances on these credit facilities.

The RLOC bears interest at a floating rate equal to 90 day LIBOR plus 165 basis points, payable quarterly. The LIBOR spread was adjusted by the lender on May 1, 2017 and is subject to further adjustment every two years thereafter. No adjustment in the LIBOR spread was made at May 1, 2019. In October 2019, the RLOC agreement was modified to extend the current maturity of November 1, 2019 to November 1, 2029. The RLOC is subject to an annual commitment fee of 25 basis points on the unused portion of the line of credit. The RLOC is available for funding general corporate needs. The variable interest rate was 3.91%1.91% per annum and 3.99%3.91% per annum as of September 30, 20192020 and September 30, 2018,2019, respectively. Availability under the RLOC was $25,000,000 as of September 30, 2019.

2020.

The WCLC is a revolving credit facility and is available for funding working capital and general corporate requirements. The interest rate on the WCLC is based on the one month LIBOR, plus a spread, which is adjusted quarterly, based on the Company's debt service coverage ratio for the preceding quarter and can vary from 175 to 250 basis points. The rate is currently at LIBOR plus 175 basis points. The variable interest rate was 3.85%1.90% per annum and 3.85% per annum as of September 30, 20192020 and September 30, 2018,2019, respectively. The WCLC agreement was amended on September 20, 2018,August 25, 2020, and the primary terms of the amendment were an extension of the maturity to November 1, 2021.2023. There were no changes to the commitment amount or interest rate. Availability under the WCLC was approximately $69,540,000$66,659,000 and $57,015,000$69,540,000 as of September 30, 20192020 and September 30, 2018,2019, respectively.

The WCLC is subject to a quarterly commitment fee on the daily unused availability under the line computed as the commitment amount less the aggregate of the outstanding loans and outstanding letters of credit. The commitment fee is adjusted quarterly based on Alico's debt service coverage ratio for the preceding quarter and can vary from a minimum of 20 basis points to a maximum of 30 basis points. Commitment fees to date have been charged at 20 basis points.

There were 0 amountswas approximately $2,942,000 outstanding on the WCLC at September 30, 2019.2020. The WCLC agreement provides for Rabo to issue up to $2,000,000, reduced from $20,000,000 during fiscal year 2019, in letters of credit on the Company’s behalf. As of September 30, 2019,2020, there was approximately $460,000$399,000 in outstanding letters of credit, which correspondingly reduced the Company's availability under the line of credit.

In 2014, the Company capitalized approximately $2,834,000 of debt financing costs related to the refinancing. These costs, together with approximately $339,000 of costs related to the retired debt, are being amortized to interest expense over the applicable terms of the loans. Additionally, approximately $133,000$23,000 and $123,000$133,000 of financing costs were incurred for the fiscal yearyears ended September 30, 20192020 and 2018,2019, respectively, in connection with letters of credit. The costs incurred during fiscal year 2019 are included in other noncurrent assets and will be moved to deferred financing and amortized to interest expense over the applicable terms of the obligations upon completion of the modified agreements, which was in October 2019. All previous costs are included in deferred financing costs and being amortized to interest expense over the applicable terms of the obligations. The unamortized balance of deferred financing costs related to the financing above was approximately $1,066,000$1,048,000 and approximately $1,357,000$1,066,000 at September 30, 20192020 and September 30, 2018,2019, respectively.

These credit facilities noted above are subject to various covenants including the following financial covenants: (i) minimum debt service coverage ratio of 1.10 to 1.00, (ii) tangible net worth of at least $160,000,000 increased annually by 10% of consolidated net income for the preceding years, or approximately $163,522,000$167,336,000 for the year ended September 30, 2019,2020, (iii) minimum current ratio of 1.50 to 1.00, (iv) debt to total assets ratio not greater than .625 to 1.00, and, (v) solely in the case of the WCLC, (v) a limit on capital expenditures of $30,000,000 per fiscal year. As of September 30, 2019,2020, the Company was in compliance with all of the financial covenants.

Credit facilities also include a Met Life term loan collateralized by 1,200 gross acres of citrus grove owned by Citree ("Met Citree Loan"). This is a $5,000,000 credit facility that bears interest at a fixed rate of 5.28% per annum. Principal and interest payments are made on a quarterly basis. At September 30, 20192020 and 2018,2019, there was an outstanding balance of $4,750,000$4,512,000 and $4,925,000,$4,750,000, respectively. The loan matures in February 2029. The unamortized balance of deferred financing costs related to this loan was approximately $40,000$36,000 and $44,000$40,000 at September 30, 2020 and 2019, and 2018, respectively.

Transition from LIBOR

The Company is currently evaluating the impact of the transition from LIBOR as an interest rate benchmark to other potential alternative reference rates. Currently, the Company has debt instruments in place that reference LIBOR-based rates. The transition from LIBOR is estimated to take place in 20212022 and management will continue to actively assess the related opportunities and risks involved in this transition.

Silver Nip Citrus Debt

There are 2 fixed-rate term loans, with an original combined balance of $27,550,000, bearing interest at 5.35% per annum (“Pru Loans A & B”). Principal of $290,000 is payable quarterly, together with accrued interest. On February 15, 2015, 734 Citrus Holdings, LLC d/b/a Silver Nip Citrus (“Silver Nip Citrus”) made a prepayment of $750,000. In addition, the Company made prepayments of approximately $4,453,000 in the

second fiscal quarter of 2018 with proceeds from the sale of certain properties, which were collateralized under these loans. The Company may prepay up to $5,000,000 of principal without penalty. As such, the Company exceeded the allowed $5,000,000 prepayment by approximately $203,000 and was required to make a premium payment of approximately $22,000. The loans are collateralized by approximately 5,700 of citrus groves in Collier, Hardee, Highlands and Polk Counties, Florida and mature on June 1, 2029 and June 1, 2033, respectively.

Silver Nip Citrus entered into 2 additional fixed-rate term loans with Prudential to finance the acquisition of a 1,500 acre citrus grove on September 4, 2014. Each loan was in the original amount of $5,500,000. Principal$5,500,000 with principal of $55,000 per loan isbeing payable quarterly, together with accrued interest. One loan bears interest at 3.85% per annum (“Pru Loan E”), while the other bearsbore interest at 3.45% per annum (“Pru Loan F”). The interest rate on Pru Loan E is subject to adjustment on September 1, 2019 and every year thereafter until maturity. No adjustment was made at September 1, 2019. Both loans arewere collateralized by approximately 1,500 gross acres of citrus groves in Charlotte County, Florida. Pru NoteLoan E matures September 1, 2021, and Pru NoteLoan F matureswas scheduled to mature September 1, 2039.

In November 2019, the Company prepaid one of its fixed-rate term loans with PrudentialPru Loan F in full inby paying the amountthen existing principal balance of $4,455,000. As a result of this prepayment, the Company’s required annual principal payments will beon its Pru Loans was reduced by $220,000 per annum.

The Silver Nip Citrus credit agreements are subject to a financial covenant whereby the consolidated current ratio requirement is 1.00 to 1.00. Silver Nip Citrus was in compliance with the current ratio covenant as of September 30, 2019.

2020.

The unamortized balance of deferred financing costs related to the Silver Nip Citrus debt was approximately $271,000$208,000 and $298,000$271,000 at September 30, 2020 and 2019, and 2018, respectively.

Note 7. Accrued Liabilities

Accrued liabilities consist of the following at September 30, 20192020 and September 30, 2018:2019:

(in thousands)		September 30,
		2020				2019
Ad valorem taxes		$	2,057			$	2,117
Accrued interest			1,020				1,110
Accrued employee wages and benefits			2,214				2,525
Accrued dividends			674				448
Accrued contractual obligation associated with sale of real estate		—					402
Consulting and separation charges			146				400
Accrued insurance			636				544
Other accrued liabilities			348				223
Total accrued liabilities		$	7,095			$	7,769

(in thousands)	September 30,
	2019				2018
Ad valorem taxes	$	2,117			$	2,196
Accrued interest	1,110				1,191
Accrued employee wages and benefits	2,525				3,115
Inventory received but not invoiced	—				726
Accrued dividends	448				492
Accrued contractual obligation associated with sale of real estate	402				—
Consulting and separation charges	400				—
Accrued insurance	544				223
Accrued tender offer consulting charges	—				274
Other accrued liabilities	223				664
Total accrued liabilities	$	7,769			$	8,881

Note 8. Deferred Gain on Sale

Deferred gain on sale consists of the following at September 30, 2019 and September 30, 2018:

(in thousands)	September 30,
	2019				2018
Deferred gain on sale	$	—			$	26,167
Annual guarantee payment, net	—				(1,239		)
Total deferred gain on sale	$	—			$	24,928

On November 21, 2014, the Company completed the sale of approximately 36,000 acres of land used for sugarcane production and land leasing in Hendry County, Florida to Global Ag Properties, LLC (“Global”) for approximately $97,900,000 in cash.

The sales price was subject to post-closing adjustments over a ten year period. The Company realized a gain of approximately $42,753,000 on the sale. Initially, $29,140,000 of the gain was deferred due to the Company’s continuing involvement in the property pursuant to a post-closing agreement and the potential price adjustments. The deferral represented the Company’s estimate of the maximum exposure to loss as a result of the continuing involvement. A net gain of approximately $13,613,000 was recognized at the time of the sale.

On October 1, 2018, the Company adopted ASC 610-20 and reevaluated the original post closing agreement under the guidance of ASC 610-20. As such, the Company recorded a derivative asset and derivative liabilities, which resulted in an increase to retained earnings of $10,897,000, net of taxes. This adjustment consisted of recording a derivative asset in the amount of $3,553,000 relating to potential payments due Alico from Global Ag Properties USA, LLC (“Global Ag”) and a derivative liability of $13,864,000 relating to potential payments due Global Ag from Alico. In the first quarter ended December 31, 2018, the Company recorded a loss of $956,000, which reflects the change in fair value of the derivative asset and derivative liabilities. In the three months ended March 31, 2019, the Company recorded an additional loss of $33,000.

On December 7, 2018, the Company and Global Ag entered into a Termination of Post Closing Agreement (the “2018 Post Closing Agreement”), pursuant to which the parties thereto agreed to certain terms and conditions under which a Post Closing Agreement, dated as of November 21, 2014 (the “2014 Post Closing Agreement”), may be terminated prior to the expiration of its stated term and with the payment of certain termination payments. The 2014 Post Closing Agreement was entered into in connection with the November 21, 2014 closing (the “Land Disposition”) of the sale by Alico to Global Ag of certain land used for sugarcane production and land leasing in Hendry County, Florida (the “Land”).

The 2014 Post Closing Agreement contained obligations, including possible payments by Alico and by Global Ag to each other over a ten year period following the closing of the Land Disposition, with the payments each year being based on the difference,

if any, between certain computed amounts. Since the time of the closing of the Land Disposition and up through March 11, 2019, the computations have resulted in payments being made each year by Alico to Global Ag., which have aggregated approximately $6,518,000.

The 2018 Post Closing Agreement provided for (i) the termination of the 2014 Post Closing Agreement following the satisfaction of certain terms and conditions set forth in the termination agreement and (ii) the deposit by wire transfer into escrow of an aggregate of $11,300,000 following notification by Global Ag to Alico of the closing date of a sale of the Land by Global Ag to a third party. The conditions to the termination of the 2014 Post Closing Agreement and the payment of funds to Global Ag included (a) Global Ag’s assignment to the third party buyer, and such third party buyer’s assumption, of certain specified water management obligations, irrigation and drainage easement obligations, access easements obligations and obligations under a certain option to purchase certain railroad property owned by Alico, (b) delivery to the escrow agent of all instruments and consideration required to consummate the closing by Global Ag of the sale of the Land to the third party buyer, and (c) delivery to the escrow agent of copies of a water management project cooperation agreement running in favor of Alico and signed by Global Ag and the third party buyer.

On March 11, 2019, the 2018 Post Closing Agreement was completed. As such, all the conditions of the termination of the 2014 Post Closing Agreement, mentioned above, were met with the sale of the sugarcane land to a third party. As a result, the Company does not have any future liabilities or commitments to Global Ag in connection with the 2014 Post Closing Agreement.

Note 9.8. Fair Value Measurements

The Company complies with the provisions of FASB ASC 820 “Fair Value Measurements” for its financial and non-financial assets and liabilities. ASC 820 defines fair value, establishes a framework for measuring fair value and expands disclosure for each major asset and liability category measured at fair value on either a recurring or nonrecurring basis.

ASC 820 clarifies that fair value is an exit price representing the amount that would be received upon the sale of an asset or paid to transfer a liability in an orderly transaction between market participants. As such, fair value is a market-based measurement that should be determined based on assumptions that market participants would use in pricing an asset or liability. As a basis for considering such assumptions, ASC 820 establishes a three-tier fair value hierarchy which prioritizes the inputs used in measuring fair value as follows:

•

Level 1- Observable inputs such as quoted prices in active markets;

•

Level 2- Inputs, other than the quoted prices in active markets, that are observable either directly or indirectly; and

Level 1- Observable inputs such as quoted prices in active markets;

•

Level 3- Unobservable inputs in which there is little or no market data, such as internally developed valuation models which require the reporting entity to develop its own assumptions.

Level 2- Inputs, other than the quoted prices in active markets, that are observable either directly or indirectly; and

Level 3- Unobservable inputs in which there is little or no market data, such as internally developed valuation models which require the reporting entity to develop its own assumptions.

As of September 30, 2020 and 2019, the Company did 0t have any assets held for sale that had been measured at fair value on a non-recurring basis.

The

Management Security Plan

During August 2020, the Company paid out a lump sum of approximately $5,175,000 to all beneficiaries in the Management Security Plan, following table represents certain assets held for sale as of September 30, 2018, which have been measured at fair value on a non-recurring basis (see Note 4. "Assets Held for Sale"):

	Fair Value Hierarchy	Carrying Value			Adjustment to Fair Value			Fair Value
Trailers	Level 3	$	606		$	150		$	456

the equivalent annuity approach. The Company usesused a third-party service providersprovider to assist in the evaluation of investments.investments in this plan. For prior year investment valuations, the Company used current market interest rates, quality estimates by rating agencies and valuation estimates by active market participants were usedin order to determine values. DeferredAs of September 30, 2020, due to the lump sum payment made in August 2020, the deferred retirements benefit was 0. As of September 30, 2019, deferred retirement benefits were valued based on actuarial data, contracted payment schedules and an estimated discount rate of 4.08% and 4.08% as of September 30, 2019 and 2018, respectively.

.

Note 10.9. Common Stock and Options

Effective January 27, 2015, the Company’s Board of Directors adopted the 2015 Stock Incentive Plan (the “2015 Plan”) which provides for up to 1,250,000 common shares available for issuance to provide a long-term incentive plan for officers, employees, directors and/or consultants to directly link incentives to stockholder value. The 2015 Plan was approved by the Company’s stockholders in February 2015. The Company’s 2015 Plan provides for grants to executives in various forms including restricted shares of the Company’s common stock and stock options. Awards are discretionary and are determined by the Compensation Committee of the Board of Directors. Awards vest based upon service conditions. Non-vested restricted shares generally vest over requisite service periods of one to six years from the date of grant.

Restricted Stock

In November 2017, a senior executive was awarded 5,000 restricted shares of the Company’s common stock (“Restricted Stock”) under the 2015 Plan at a weighted average fair value of $31.95 per common share, vesting over 2.5 years.

The following table represents a summary of the status of the Company’s nonvested shares:

Nonvested Shares		Shares				Weighted- Average Grant Date Fair Value
Nonvested Shares at September 30, 2017			5,334			$	49.39
Granted during fiscal year 2018			5,000				31.95
Vested during fiscal year 2018			(3,001	)			39.70
Forfeited during fiscal year 2018			—				—
Nonvested Shares at September 30, 2018			7,333				41.46
Granted during fiscal year 2019			—				—
Vested during fiscal year 2019			(1,667	)			31.95
Forfeited during fiscal year 2019			—				—
Nonvested Shares at September 30, 2019			5,666				44.26
Granted during fiscal year 2020			—				—
Vested during fiscal year 2020			(5,666	)			44.26
Forfeited during fiscal year 2020			—				—
Nonvested Shares at September 30, 2020			—			$	—

Nonvested Shares	Shares			Weighted-Average Grant Date Fair Value
Nonvested Shares at September 30, 2016	10,267			$	49.49
Granted during fiscal year 2017	—			—
Vested during fiscal year 2017	(4,933	)		49.58
Forfeited during fiscal year 2017	—			—
Nonvested Shares at September 30, 2017	5,334			49.39
Granted during fiscal year 2018	5,000			31.95
Vested during fiscal year 2018	(3,001	)		39.70
Forfeited during fiscal year 2018	—			—
Nonvested Shares at September 30, 2018	7,333			41.46
Granted during fiscal year 2019	—			—
Vested during fiscal year 2019	(1,667	)		31.95
Forfeited during fiscal year 2019	—			—
Nonvested Shares at September 30, 2019	5,666			$	44.26

Stock compensation expense related to the Restricted Stock totaled approximately $69,000, $104,000, $137,000 and $264,000$137,000 for the fiscal years ended September 30, 2020, 2019 2018 and 2017,2018, respectively. There was approximately $69,000$0 and $172,000$69,000 of total unrecognized stock compensation costs related to unvested stock compensation for the Restricted Stock grants at September 30, 20192020 and September 30, 2018,2019, respectively. The total unrecognized compensation cost is expected to be recognized over

For the fiscal year ended September 30, 2020, 5,666 shares with a weighted-average periodgrant date fair value of 0.75 years.

Duringapproximately $251,000 became fully vested.

For the fiscal year ended September 30, 2019, 1,667 shares vested aggregatingwith a grant date fair value of approximately $53,000.$53,000 became fully vested.

Stock Option Grant

Stock option grants of 118,000 options to certain Officers and Managers of the Company (collectively the “2020 Option Grants”) were granted on October 11, 2019. The option exercise price was set at $33.96, the closing price on October 11, 2019. The 2020 Option Grants will vest as follows: (i) 25% of the options will vest if the price of the Company’s common stock during a consecutive 20-trading day period exceeds $35.00; (ii) 25% of the options will vest if the price of the Company’s common stock during a consecutive 20-trading day period exceeds $40.00; (iii) 25% of the options will vest if the price of the Company’s common stock during a consecutive 20-trading day period exceeds $45.00; and (iv) 25% of the options will vest if the price of the Company’s common stock during a consecutive 20-trading day period exceeds $50.00. If the applicable stock price hurdles have not been achieved by (A) the date that is 18 months following the termination of employment, if the employment is terminated due to death or disability, (B) the date that is 12 months following the termination of employment, if the employment is terminated by the Company without cause, by the employee with good reason, or due to the employee’s retirement, or (C) the date of the termination of employment for any other reason, then any unvested options will be forfeited. In addition, if the applicable stock price hurdles have not been achieved by December 31, 2022 then any unvested options will be forfeited. The 2020 Option Grants will also become vested to the extent that the applicable stock price hurdles are satisfied in connection with a change in control of the Company. As of September 30, 2020, the Company’s stock closed at $28.62 per share. For the fiscal year ended September 30, 2020, the Company’s common stock traded above $35.00 per share for twenty consecutive days. Accordingly, 25% of the 2020 Option Grants are vested at September 30, 2020 and the corresponding stock option expense was recognized during the fiscal year ended September 30, 2020.

Stock option grants of 10,000 options to Mr. John Kiernan (the “2019 Option Grants”) were granted on October 25, 2018. The option exercise price for these options was set at $33.34, the closing price on October 25, 2018. The 2019 Option Grants will vest as follows: (i) 3,333 of the options will vest if the price of the Company’s common stock during a consecutive 20-trading day period exceeds $40.00; (ii) 3,333 of the options will vest if the price of the Company’s common stock during a consecutive 20-trading day period exceeds $45.00; (iii) 3,334 of the options will vest if the price of the Company’s common stock during a consecutive 20-trading day period exceeds $50.00. If the applicable stock price hurdles have not been achieved by (A) the date that is 18 months following the Executive’s termination of employment, if the Executive’s employment is terminated due to death or disability, (B) the date that is 12 months following the Executive’s termination of employment, if the Executive’s employment is terminated by the Company without cause, by the Executive with good reason, or due to the Executive’s retirement, or (C) the date of the termination of the Executive’s employment for any other reason, then any unvested options will be forfeited. In addition, if the applicable stock price hurdles have not been achieved by December 31, 2021 then any unvested options will be forfeited. The 2019 Option Grants will also become vested to the extent that the applicable stock price hurdles are satisfied in connection

with a change in control of the Company. As of September 30, 2019,2020, the Company’s common stock was trading at $34.02$28.62 per share, and during the fiscal year ended September 30, 2019,2020, the stock did not trade above $40.00 per share; accordingly, NaN0ne of the stock options are vested at September 30, 2019.

2020.

Stock option grants of 210,000 options to Mr. Remy Trafelet and 90,000 options to Mr. John Kiernan (collectively, the “2018 Option Grants”) were granted on September 7, 2018. The option exercise price for these options was set at $33.60, the closing price on September 7, 2018. The 2018 Option Grants will vest as follows: (i) 25% of the options will vest if the price of the Company’s common stock during a consecutive 20-trading day period exceeds $35.00; (ii) 25% of the options will vest if the price of the Company’s common stock during a consecutive 20-trading day period exceeds $40.00; (iii) 25% of the options will vest if the price of the Company’s common stock during a consecutive 20-trading day period exceeds $45.00; and (iv) 25% of the options will vest if the price of the Company’s common stock during a consecutive 20-trading day period exceeds $50.00. If the applicable stock price hurdles have not been achieved by (A) the date that is 18 months following the Executive’s termination of employment, if the Executive’s employment is terminated due to death or disability, (B) the date that is 12 months following the Executive’s termination of employment, if the Executive’s employment is terminated by the Company without cause, by the Executive with good reason, or due to the Executive’s retirement, or (C) the date of the termination of the Executive’s employment for any other reason, then any unvested options will be forfeited. In addition, if the applicable stock price hurdles have not been achieved by December 31, 2021 then any unvested options will be forfeited. The 2018 Option Grants will also become vested to the extent that the applicable stock price hurdles are satisfied in connection with a change in control of the Company. As of September 30, 2019,2020, the Company’s common stock was trading at $34.02$28.62 per share, and duringshare. For the fiscal year ended September 30, 2019,2020, the stock did not tradetraded above $35.00 per share;share for a consecutive twenty days; accordingly, NaN25% of the stock optionsMr. Kiernan's 2018 Option Grants are vested at September 30, 2019.2020 and the corresponding stock option expense was recognized during the fiscal year ended September 30, 2020. As set forth below, more than a majority of the 2018 original Option Grants issued to Mr. Trafelet were forfeited and the vesting conditions of the remainder were modified, all pursuant to the Alico Settlement Agreement, as defined below.

below, and the remaining 2018 original Option Grants, both vested and unvested, have since been forfeited or expired.  

A stock option grant of 300,000 options in the case of Mr. Trafelet and 225,000 options in the case of each of Mr. Henry Slack and Mr. George Brokaw (collectively, the “2016 Option Grants”) were granted on December 31, 2016. The option price was set at $27.15, the closing price on December 31, 2016. The 2016 Option Grants will vest as follows: (i) 25% of the options will vest if the price of the Company’s common stock during a consecutive 20-trading day period exceeds $60.00; (ii) 25% of the options will vest if such price exceeds $75.00; (iii) 25% of the options will vest if such price exceeds $90.00; and (iv) 25% of the options will vest if such price exceeds $105.00. If the applicable stock price hurdles have not been achieved by (A) the second anniversary of the Executive’s termination of employment, if the Executive’s employment is terminated due to death or disability, (B) the date that is 18 months following the Executive’s termination of employment, if the Executive’s employment is terminated by the Company without cause, by the Executive with good reason, or due to the Executive’s retirement, or (C) the date

of the termination of the Executive’s employment for any other reason, then any unvested options will be forfeited. In addition, if the applicable stock price hurdles have not been achieved by the fifth anniversary of the grant date (or the fourth anniversary of the grant date, in the case of the tranche described in clause (i) above), then any unvested options will be forfeited. The 2016 Option Grants will also become vested to the extent that the applicable stock price hurdles are satisfied in connection with a change in control of the Company. As of September 30, 2019,2020, the Company’s stock was trading at $34.02$28.62 per share, and duringsince the fiscal year ended September 30, 2019,date of grant the Company’s common stock did not trade above $60.00 per share; accordingly, NaN0ne of the stock options2016 Option Grants are vested at September 30, 2019.2020. As set forth below, all of the 2016 Option Grants issued to Mr. Trafelet were forfeited pursuant to the Alico Settlement Agreement, as defined below.

Additionally, 187,500 shares of the 2016 Option Grants made to each of Messrs. Slack and Brokaw were forfeited on September 5, 2018 and no replacement options were granted. As such, the remaining unrecognized expense associated with these options of approximately $783,000 was accelerated and recorded for the fiscal year ended September 30, 2018.

Pursuant to a Settlement Agreement (described in Note 15.14. “Related Party Transactions”), which was unanimously approved by the Board of Directors, Mr. Trafelet agreed to voluntarily resign from his roles as President and Chief Executive Officer and a director of the Company. Under the Settlement Agreement, Mr. Trafelet forfeited (i) all of the 2016 Option Grants granted to him and (ii) all of the 2018 Option Grants granted to him in September 2018, other than 26,250 stock options that willwould vest if the minimum price of Alico's common stock over 20 consecutive trading days exceeds $35.00 per share and 26,250 stock options that willwould vest if the minimum price of Alico's common stock over 20 consecutive trading days exceeds $40.00 per share (“2019 Modified Option Grant”), but, in each case, only if such conditions were satisfied by the first anniversary of the date of the Settlement Agreement (collectively, the "Retained Options"). Any Retained Options that vestvested in accordance with their terms will expire on the date that is six months following the date on which the Retained Option vests, and any Retained Options that dodid not vest by the first anniversary of the Alico Settlement Agreement willwould be forfeited as of such first anniversary. As a result of September 30, 2020, the forfeitedCompany’s stock options,was trading at $28.62 per share. During the Company reversed $823,000 of previously recorded stock compensation expense during thefiscal year ended September 30, 2020, the Company’s common stock traded above $35.00 per share for a consecutive twenty days; accordingly, 26,250 stock options from the 2019 Modified Option Grants vested, however, since these Modified Options were not exercised within six monthsfollowing the date on which is recorded asthe Retained Option vested, they were forfeited. Additionally, since the Company’s common stock did not trade above $40.00 per share for a reductionconsecutive twenty days by the first anniversary of General and Administrative expense.

the date of the Alico Settlement Agreement, the other 26,250 stock options from the 2019 Modified Option Grants were forfeited.  

Forfeitures of all stock options were recognized as incurred.

The following table represents a summary of the Company’s stock option activity:

		Number of Options				Weighted Average Exercise Price				Weighted Average Remaining Contractual Term (years)				Aggregate Intrinsic Value
Balance - September 30, 2018			675,000			$	30.02			2.22					—
Granted during fiscal year 2019			10,000				33.34			2.25					—
Forfeitures/expired during fiscal year 2019			(457,500	)			29.37			1.78					—
Exercised during fiscal year 2019			—				—				—				—
Balance - September 30, 2019			227,500				31.46				1.22				—
Granted during fiscal year 2020			118,000				33.96			2.25					—
Forfeitures/expired during fiscal year 2020			(52,500	)			33.60				—				—
Exercised during fiscal year 2020			—				—				—				—
Balance - September 30, 2020			293,000				32.09				1.79				—

								Weighted Average
				Weighted				Remaining			Aggregate
	Number of			Average Exercise				Contractual Term			Intrinsic
	Options			Price				(years)			Value
Balance - September 30, 2017	750,000			$	27.15			2.58			—
Granted during fiscal year 2018	300,000			33.60				3.25			—
Forfeitures/expired in fiscal year 2018	(375,000	)		27.15				1.86			—
Exercised during fiscal year 2018	—			—				—			—
Balance - September 30, 2018	675,000			30.02				2.22			—
Granted during fiscal year 2019	10,000			33.34				2.25			—
Forfeitures/expired in fiscal year 2019	(457,500	)		29.37				1.78			—
Exercised during fiscal year 2019	—			—				—			—
Balance - September 30, 2019	227,500			$	31.46			1.22			—

Stock compensation expense related to the options totaled approximately $504,000, $674,000 $1,617,000 and $616,000$1,617,000 for the fiscal years ended September 30, 2020, 2019 and 2018, and 2017, respectively.

At September 30, 20192020 and September 30, 2018,2019, there was approximately $502,000$376,000 and $2,174,000,$502,000, respectively, of total unrecognized stock compensation costs related to unvested share-based compensation for the option grants. The total unrecognized compensation cost as of September 30, 2020 is expected to be recognized over a weighted-average period of 1.291.72 years.

The fair value of the 2020, 2019, 2018 and 20162018 Option Grants was estimated on the date of grant using a Monte Carlo valuation model that uses the assumptions noted in the following table. The expected term of options granted is derived from the output of the option valuation model and

represents the period of time that options granted are expected to be outstanding; the range given below results from different timeframes for the various market conditions being met.

2020 Option Grant

Expected Volatility			26.0	%
Expected Term (in years)			3.61
Risk Free Rate			1.60	%

The weighted-average grant-date fair value of the 2020 Option Grant was $3.20.

2019 Modified Option Grant

Expected Volatility			25.0	%
Expected Volatility	25.0	%
Expected Term (in years)	1.50	1.50
Risk Free Rate	2.52		2.52	%

The weighted-average grant-date fair value of the 2019 Modified Option Grant was $1.40.

2019 Option Grants

Expected Volatility			30.0	%
Expected Volatility	30.0	%
Expected Term (in years)	4.09	4.09
Risk Free Rate	2.95		2.95	%

The weighted-average grant-date fair value of the 2019 Option Grants was $7.10.

2018 Option Grants

Expected Volatility			30.0	%
Expected Volatility	30.0	%
Expected Term (in years)	3.32	3.32
Risk Free Rate	2.80		2.80	%

The weighted-average grant-date fair value of the 2018 Option Grants was $7.40.

2016 Option Grants

Expected Volatility	32.2	%
Expected Term (in years)	2.6 - 4.0
Risk Free Rate	2.45	%

The weighted-average grant-date fair value of the 2016 Option Grants was $3.53. There were no additional stock options granted or exercised for the fiscal year ended September 30, 2019.

As of September 30, 2019,2020, there remained 1,005,000939,500 common shares available for issuance under the 2015 Plan.

Note 11.10. Treasury Stock

In fiscal year 2017, the Board of Directors authorized the repurchase of up to $7,000,000 of the Company’s common stock in two separate authorizations (collectively, the "2017 Authorization"). In March 2017, the Board of Directors authorized the repurchase of up to $5,000,000 of the Company’s common stock beginning March 9, 2017 and continuing through March 9, 2019. In May 2017, the Board of Directors authorized the repurchase of up to an additional $2,000,000 of the Company’s common stock beginning May 24, 2017 and continuing through May 24, 2019. The stock repurchases made under this repurchase were made through open market transactions at times and in such amounts as the Company’s broker determined subject to the provisions of SEC Rule 10b-18.

During fiscal year 2018, the Company purchased 72,266 shares at a cost of $2,214,756 under the 2017 Authorization. As of June 29, 2018, the Company suspended its stock repurchase activity. For the fiscal year ended September 30, 2019, the Company did not purchase any shares under the 2017 Authorization. As the 2017 Authorization expired in May 2019, the Company has no funds available under this plan to repurchase stock.

On October 3, 2018, the Company completed a tender offer of 752,234 shares at a price of $34.00 per share aggregating $25,575,956. 734 Investors, Alico's largest stockholder from 2013 until November 12, 2019, participated in the tender offer by selling a small percentage of its holdings.

On October 10, 2019, the Board of Directors authorized the repurchase of up to 7,000 shares of the Company’s common stock from 734 Investors in a privately negotiated repurchase of shares. On October 15, 2019, the Company entered into a repurchase agreement to repurchase a total of 7,000 shares of the Company’s common stock from 734 Investors, effective October 15, 2019.

In September 2013, the Board of Directors authorized the repurchase of up to 105,000 shares of the Company’s common stock beginning in November 2013 and continuing through April 2018. In fiscal year 2016, the Board of Directors authorized the repurchase of up to 50,000 shares of the Company’s outstanding common stock beginning February 18, 2016 and continuing through February 17, 2017 (the "2016 Authorization"). In fiscal year 2015, the Board of Directors authorized the repurchase of up to 170,000 shares of the Company’s common stock beginning March 25, 2015 and continuing through December 31, 2016.

The following table illustrates the Company’s treasury stock purchases for the fiscal years ended September 30, 2020, 2019 2018 and 2017:2018:

(in thousands, except share amounts)		Total Number of Shares Purchased				Average Price Paid Per Share				Total Shares Purchased as Part of Publicly Announced Plan or Program				Total Dollar Value of Shares Purchased
Fiscal Year Ended September 30,:
2020			7,000			$	33.95				1,481,640			$	238
2019			752,234			$	34.00				1,474,640			$	25,576
2018			72,266			$	30.65				722,406			$	2,215

(in thousands, except share amounts)	Total Number of Shares Purchased			Average Price Paid Per Share				Total Shares Purchased as Part of Publicly Announced Plan or Program			Total Dollar Value of Shares Purchased
Fiscal Year Ended September 30,:
2019	752,234			$	34.00			1,474,640			$	25,576
2018	72,266			$	30.65			722,406			$	2,215
2017	104,145			$	29.42			650,140			$	3,064

The following table outlines the Company’s treasury stock transactions during the past three fiscal years:

(in thousands, except share amounts)		Shares				Cost
Balance at September 30, 2017			177,315			$	6,502
Purchased			72,266				2,215
Issued to Employees and Directors			(33,393	)			(1,181	)
Balance at September 30, 2018			216,188				7,536
Purchased			752,234				25,576
Issued to Employees and Directors			(28,790	)			(1,169	)
Balance at September 30, 2019			939,632				31,943
Purchased			7,000				238
Issued to Employees and Directors			(23,011	)			(1,402	)
Balance at September 30, 2020			923,621			$	30,779

(in thousands, except share amounts)	Shares			Cost
Balance at September 30, 2016	100,610			$	4,585
Purchased	104,145			3,064
Issued to Employees and Directors	(27,440	)		(1,147		)
Balance at September 30, 2017	177,315			6,502
Purchased	72,266			2,215
Issued to Employees and Directors	(33,393	)		(1,181		)
Balance at September 30, 2018	216,188			7,536
Purchased	752,234			25,576
Issued to Employees and Directors	(28,790	)		(1,169		)
Balance at September 30, 2019	939,632			$	31,943

Note 12.11. Income Taxes

On December 22, 2017, the U.S. Tax Cuts and Jobs Act (the “Act”) was signed into law. The Act contains significant changes to corporate taxes, including a permanent reduction of the U.S. corporate tax rate from 35% to 21% effective January 1, 2018. The Company’s statutory rate for the fiscal year ended September 30, 2018 was 24.5%, based on a fiscal year blended rate calculation. The 21% U.S. corporate tax rate is fully applicable to the fiscal year ended September 30, 2019 and each year thereafter.

The Act required a one-time remeasurement of certain tax related assets and liabilities. During the first quarter ended December 31, 2017, the Company made certain estimates related to the impact of the Act including the remeasurement of deferred taxes at the new expected tax rate and a revised effective tax rate for the year ended September 30, 2018. For the fiscal year ended September 30, 2018, the Company has recorded a tax benefit of approximately $9,847,000 to account for these deferred tax impacts.

In October 2019, the Internal Revenue Service concluded their audit of the September 30, 2015 tax year with no changes. The Federal and stateState filings remain subject to examination by tax authorities for tax periods ending after September 30, 2015.

The income tax provision (benefit) for the years ended September 30, 2020, 2019 2018 and 20172018 consists of the following:

(in thousands)		Fiscal Year Ended September 30,
		2020				2019				2018
Current:
Federal income tax		$	131			$	7,314			$	1,961
State income tax			(71	)			2,202				384
Total current			60				9,516				2,345
Deferred:
Federal income tax			6,151				2,995				(3,917	)
State income tax			1,452				272				1,962
Total deferred			7,603				3,267				(1,955	)
Income tax provision		$	7,663			$	12,783			$	390

(in thousands)	Fiscal Year Ended September 30,
	2019				2018				2017
Current:
Federal income tax	$	7,314			$	1,961			$	102
State income tax	2,202				384				—
Total current	9,516				2,345				102
Deferred:
Federal income tax	2,995				(3,917		)		(3,286		)
State income tax	272				1,962				(662		)
Total deferred	3,267				(1,955		)		(3,948		)
Income tax provision (benefit)	$	12,783			$	390			$	(3,846	)

Income tax provision (benefit) attributable to income (loss) before income taxes differed from the amount computed by applying the statutory federal income tax rate of 21%, 24.53%21% and 35%24.53% to income (loss) before income taxes for the fiscal years ended September 30, 2019,2020, September 30, 20182019 and September 30, 2017,2018, respectively, as a result of the following:

(in thousands)		Fiscal Year Ended September 30,
		2020				2019				2018
Income tax at the statutory federal rate		$	6,568			$	10,587			$	3,198
Increase (decrease) resulting from:
State income taxes, net of federal benefit			1,217				1,947				857
Permanent and other reconciling items, net			170				166				221
Expiration of capital loss carryforward			—				—				5,634
Reduction in deferred tax liability resulting from the Act			—				—				(9,847	)
State rate change			(156	)			—				—
Stock option cancellation			—				—				347
Other			(136	)			83				(20	)
Income tax provision		$	7,663			$	12,783			$	390

(in thousands)	Fiscal Year Ended September 30,
	2019				2018				2017
Income tax (benefit) at the statutory federal rate	$	10,587			$	3,198			$	(4,670	)
Increase (decrease) resulting from:
State income taxes, net of federal benefit	1,947				857				(402		)
Permanent and other reconciling items, net	166				221				548
Expiration of capital loss carryforward	—				5,634				581
Reduction in deferred tax liability resulting from the Act	—				(9,847		)		—
Stock option cancellation	—				347				—
Other	83				(20		)		97
Income taxes provision (benefit)	$	12,783			$	390			$	(3,846	)

The tax effects of temporary differences that give rise to significant portions of the deferred tax assets and deferred tax liabilities as of September 30, 2019,2020, and 20182019 are presented below:

(in thousands)		September 30,
		2020				2019
Deferred tax assets:
Deferred retirement benefits		$	—			$	1,325
Goodwill			16,304				18,244
Inventories			813				930
Stock compensation			314				237
Intangibles			508				565
Other			203				168
Total deferred tax assets			18,142				21,469
Deferred tax liabilities:
Property and equipment			56,707				52,551
Investment in Citree			1,016				909
Prepaid insurance			147				134
Total deferred tax liabilities			57,870				53,594
Net deferred income tax liabilities		$	(39,728	)		$	(32,125	)

(in thousands)	September 30,
	2019				2018
Deferred tax assets:
Deferred retirement benefits	$	1,325			$	1,114
Investment in Citree	—				89
Deferred gain recognition	—				6,318
Goodwill	18,244				20,095
Inventories	930				711
Stock compensation	237				261
Accrued bonus	—				612
Tax credits	—				28
Intangibles	565				620
Other	168				190
Total deferred tax assets	21,469				30,038
Deferred tax liabilities:
Revenue recognized from citrus and sugarcane	—				162
Property and equipment	52,551				54,925
Investment in Citree	909				—
Prepaid insurance	134				104
Total deferred tax liabilities	53,594				55,191
Net deferred income tax liabilities	$	(32,125	)		$	(25,153	)

Note 13.12. Segment Information

Segments

Operating segments are defined in the criteria established under the Financial Accounting Standards Board - Accounting Standards Codification (“FASB ASC”)ASC Topic 280 as components of public entities that engage in business activities from which they may earn revenues and incur expenses for which separate financial information is available and which is evaluated regularly by the Company’s chief operating decision maker (“CODM”) in deciding how to assess performance and allocate resources. The Company’s CODM assesses performance and allocates resources based on 2 operating segments: Alico Citrus and WaterLand Management and Other Operations (see name change explanation below).

As a result of the Company selling approximately 10,700 acres on the western part of Alico Ranch to the State of Florida and because a sale of those acres affected the proposed dispersed water management project, the Company decided to suspend all permit approval activities for its dispersed water management project. This has resulted in a change in the financial reporting to the CODM. Therefore, the Company has renamed the “Water Resources and Other Operations.

Operations” segment to “Land Management and Other Operations”.

Total revenues represent sales to unaffiliated customers, as reported in the Consolidated Statements of Operations. Goods and services produced by these segments are sold to wholesalers and processors in the United States who prepare the products for consumption. The Company evaluates the segments’ performance based on direct margins (gross profit) from operations before general and administrative expenses, interest expense, other income (expense) and income taxes, not including nonrecurring gains and losses.

Information by operating segment is as follows:

(in thousands)	Fiscal Year Ended September 30,
	2019				2018				2017
Revenues:
Alico Citrus	$	119,031			$	78,121			$	123,441
Water Resources and Other Operations	3,220				3,160				6,388
Total revenues	122,251				81,281				129,829
Operating expenses:
Alico Citrus	59,594				51,709				111,947
Water Resources and Other Operations	2,297				3,979				8,952
Total operating expenses	61,891				55,688				120,899
Gross profit (loss):
Alico Citrus	59,437				26,412				11,494
Water Resources and Other Operations	923				(819		)		(2,564		)
Total gross profit	60,360				25,593				8,930
Capital expenditures:
Alico Citrus	20,000				15,968				11,738
Water Resources and Other Operations	—				304				646
Other Capital Expenditures	—				80				969
Total capital expenditures	20,000				16,352				13,353
Depreciation, depletion and amortization:
Alico Citrus	12,935				12,546				14,054
Water Resources and Other Operations	173				219				652
Other Depreciation, Depletion and Amortization	816				991				520
Total depreciation, depletion and amortization	$	13,924			$	13,756			$	15,226

(in thousands)		Fiscal Year Ended September 30,
		2020				2019				2018
Revenues:
Alico Citrus		$	89,369			$	119,031			$	78,121
Land Management and Other Operations			3,138				3,220				3,160
Total revenues			92,507				122,251				81,281
Operating expenses:
Alico Citrus			72,281				59,594				51,709
Land Management and Other Operations			2,307				2,297				3,979
Total operating expenses			74,588				61,891				55,688
Gross profit (loss):
Alico Citrus			17,088				59,437				26,412
Land Management and Other Operations			831				923				(819	)
Total gross profit			17,919				60,360				25,593
Capital expenditures:
Alico Citrus			21,705				20,000				15,968
Land Management and Other Operations			—				—				304
Other Capital Expenditures			—				—				80
Total capital expenditures			21,705				20,000				16,352
Depreciation, depletion and amortization:
Alico Citrus			13,822				12,935				12,546
Land Management and Other Operations			185				173				219
Other Depreciation, Depletion and Amortization			513				816				991
Total depreciation, depletion and amortization		$	14,520			$	13,924			$	13,756

(in thousands)		September 30,
		2020				2019
Assets:
Alico Citrus		$	406,763			$	401,212
Land Management and Other Operations			15,367				15,332
Other Corporate Assets			1,807				844
Total Assets		$	423,937			$	417,388

(in thousands)	September 30,
	2019				2018
Assets:
Alico Citrus	$	401,212			$	405,752
Water Resources and Other Operations	15,332				15,904
Other Corporate Assets	844				1,766
Total Assets	$	417,388			$	423,422

Note 14.13. Employee Benefits Plans

Management Security Plan

The management security plan (“MSP”) iswas a nonqualified, noncontributory defined supplemental deferred retirement benefit plan for a select group of management personnel. The MSP provideswas set up to provide a fixed supplemental retirement benefit for 180 months. The MSP was frozen as of September 30, 2017. As a result, no new participants arewere being added to the MSP and no further benefits arewere accumulating.

The MSP benefit expense and the projected management security plan benefit obligation arewere determined using assumptions as of the end of the respective year. The weighted-average discount rate used to compute the obligation was 4.08% and 4.08% in fiscal years 2019 and 2018, respectively.

year 2019.

Actuarial gains or losses arewere recognized when incurred; therefore, the end of year benefit obligation iswas the same as the accrued benefit costs recognized in the Consolidated Balance Sheets.

The amount of MSP benefit expense charged to costs and expenses was as follows:

(in thousands)		Fiscal Year Ended September 30,
		2020				2019				2018
Service cost		$	—			$	—			$	—
Interest cost			195				171				293
MSP termination adjustments			—				985				—
Recognized actuarial gain (loss) adjustment			12				13				16
Total		$	207			$	1,169			$	309

(in thousands)	Fiscal Year Ended September 30,
	2019				2018				2017
Service cost	$	—			$	—			$	200
Interest cost	171				293				140
MSP termination adjustments	985				—				—
Recognized actuarial gain (loss) adjustment	13				16				(78		)
Total	$	1,169			$	309			$	262

The following provides a roll-forward of the MSP benefit obligation:

(in thousands)		September 30,
		2020				2019
Change in projected benefit obligation:
Benefit obligation at beginning of year		$	5,226			$	4,397
Interest cost			195				171
Benefits paid			(258	)			(340	)
MSP termination adjustments		—					985
MSP termination benefits payment			(5,175	)			—
Recognized actuarial gain adjustment			12				13
Benefit obligation at end of year		$	—			$	5,226
Funded status at end of year		$	—			$	(5,226	)

(in thousands)	September 30,
	2019				2018
Change in projected benefit obligation:
Benefit obligation at beginning of year	$	4,397			$	4,438
Interest cost	171				293
Benefits paid	(340		)		(350		)
MSP termination adjustments	985				—
Recognized actuarial gain adjustment	13				16
Benefit obligation at end of year	$	5,226			$	4,397
Funded status at end of year	$	(5,226	)		$	(4,397	)

Effective September 30, 2018, the Company terminated the MSP. Under the MSP termination, payout for benefits covered underutilizing the applicable Internal Revenue Code regulations cannot commencewere not able to be commenced until at least twelve months following plan termination decision, but mustneeded to be fully paid out within twenty-four (24) months following plan termination. TheDuring August 2020, the Company hascaused the MSP to pay the lump sum termination benefits of approximately $5,175,000 to all MSP beneficiaries.

During the fiscal year ended September 30, 2019, the Company determined to pay out a lump sum under the Equivalent Annuityequivalent annuity approach, whereby the payout under this approach wouldwas designed to mitigate participants tax burden. In essence,Under this approach, the Company would be coveringcover the amount needed to purchase an annuity providing the same after-tax benefit as if the plan was notnever terminated. As a result, the Company recorded an additional liability of approximately $720,000.

The Company hashad established a “Rabbi Trust” to provide for the potential funding of accrued benefits under the MSP. According to the terms of the Rabbi Trust, funding iswas voluntary until a change of control of the Company as defined in the Management Security Plan Trust Agreement occurs. Upon a change of control, funding iswould be triggered. As of September 30, 2019,2020, the Rabbi Trust had no assets, and no change of control had occurred.

Profit Sharing and 401(k) Plans

The Company maintains a 401(k) employee savings plan for eligible employees, which provides up to a 4% matching contribution payable on employee payroll deferrals. The Company’s matching funds vest to the employee immediately, pursuant to a safe harbor election effective in October 2012. The Company’s contribution to the plan was approximately $397,000, $380,000 $342,000 and $445,000$342,000 for the fiscal years ended September 30, 2020, 2019 and 2018, and 2017, respectively.

The Company also maintains a Profit Sharing Plan (“Plan”) that is fully funded by contributions from the Company. Contributions to the Plan are discretionary and determined annually by the Company’s Board of Directors. Contributions to employee accounts are based on the participant’s compensation. The Company’s paid contributionCompany did not contribute to the Profit Sharing Plan was $0, $0 and $378,000 for the fiscal years ended September 30, 2020, 2019 and 2018, and 2017, respectively.

Note 15.14. Related Party Transactions

Clayton G. Wilson

The Company entered into a Separation and Consulting Agreement with Clayton G. Wilson (the “Separation and Consulting Agreement”), pursuant to which Mr. Wilson stepped down as Chief Executive Officer of the Company effective as of December 31, 2016. Under the Separation and Consulting Agreement, Mr. Wilson also acknowledged and agreed that he would continue to be bound by the restrictive covenants set forth in his Employment Agreement with the Company. The Separation and Consulting Agreement provided that, subject to his execution, delivery, and non-revocation of a general release of claims in favor of the Company, Mr. Wilson would be entitled to vesting of any unvested portion of the restricted stock award granted to him under his Employment Agreement. In addition, the Separation and Consulting Agreement provided that Mr. Wilson serve as a consultant to the Company during 2017 and would receive an aggregate consulting fee of $750,000 for such services (payable $200,000 in an initial lump sum, $275,000 in a lump sum on July 1, 2017, and $275,000 in 6 equal monthly installments commencing July 31, 2017 and ending December 31, 2017). As of December 31, 2017, the Company satisfied its obligation to Mr. Wilson in full. The Company expensed approximately $0, $187,500$0 and $562,500$187,500 under the Separation and Consulting Agreement for the fiscal years ended September 30, 2020, 2019 2018 and 2017,2018, respectively. Mr. Wilson resigned as a member of the Company’s Board of Directors effective February 27, 2017.

Henry R. Slack and George R. Brokaw

On December 31, 2016, the Company entered into new employment agreements (collectively, the “Employment Agreements”) with Henry R. Slack, and George R. Brokaw. Mr. Slack previously served as the Executive Chairman of the Company, and Mr. Brokaw currently servespreviously served as the Executive Vice Chairman of the Company, and each of them continues to serve on the Company’s Board of Directors. The Employment Agreements provided for an annual base salary of $250,000 in the case of Mr. Slack and provides for an annual base salary of $250,000 in the case of Mr. Brokaw.

Beginning June 26, 2017, both Messrs. Slack and Brokaw agreed to waive payment of their salaries.

Effective July 1, 2019, Mr. Slack resigned his employment with the Company as Executive Chairman. Effective December 31, 2019, Mr. Brokaw resigned his employment with the Company as Executive Vice Chairman. Mr. Slack continuesand Mr. Brokaw continue to serve on the Board of the Company.

Remy W. Trafelet

As described above, on February 11, 2019 and as contemplated by the Alico Settlement Agreement, Mr. Trafelet submitted to the Board his resignation as President and Chief Executive Officer of the Company and a member of the Board, effective upon the execution of the Alico Settlement Agreement. Also, on February 11, 2019, as contemplated by the Settlement Agreement, the Company entered into a consulting agreement (the "Consulting Agreement") with Mr. Trafelet and 3584 Inc., an entity controlled by Mr. Trafelet (the "Consultant"). Pursuant to the Consulting Agreement, Mr. Trafelet will make himself available to provide consulting services to the Company through the Consultant for up to 24 months. In exchange for the consulting services, the Consultant will receive an annual consulting fee of $400,000. AsThe Company recorded an expense of September 30,$800,000, representing the full amount due under the agreement, in fiscal year 2019 upon the execution of the agreement. The Company has paid approximately $400,000 and $254,000 towards thesein consulting fees.fees for the fiscal years ended September 30, 2020 and 2019, respectively. If the Company terminates the consulting period (other than in certain specified

circumstances), the Company will continue to pay the consulting fees described in the immediately preceding sentence through the balance of the 24-month term.above.

Ken Smith

On March 20, 2015, Ken Smith tendered his resignation as Chief Operating Officer, and as an employee of the Company. Mr. Smith’s resignation included a waiver of any rights to any payments under his Change-in-Control Agreement with the Company. On March 20, 2015, the Company and Mr. Smith also entered into a Consulting and Non-Competition Agreement under which (i) Mr. Smith will provide consulting services to the Company during the three-year period after the resignation date, (ii) Mr. Smith agreed to be bound by certain non-competition covenants relating to the Company’s citrus operations and non-solicitation and non-interference covenants for a period of two years after the resignation date, and (iii) the Company paid Mr. Smith $925,000 for such services and covenants. The Company expensed approximately $0, $0 and $100,000 under the Consulting and Non-Competition Agreement for fiscal years ended September 30, 2019, 2018 and 2017, respectively.

Shared Services Agreement

The Company had a shared services agreement with Trafelet Brokaw Capital Management, L.P. (“TBCM”), whereby the Company reimbursed TBCM for use of office space and various administrative and support services. The agreement expired December 31, 2018 and was not extended or renewed. The annual cost of the office and services was approximately $618,000. The Company expensed approximately $0, $155,000 $592,000 and $564,000$592,000 for the fiscal years ended September 30, 2020, 2019 2018 and 2017,2018, respectively. As of September 30, 20192020 and 2018,2019, the Company haddid 0t have any outstanding amounts due of approximately $0 and $163,000, respectively.

with TBCM.

Capital Contribution

On April 16, 2018,September 10, 2020, all operating partners of Citree received a funding notice relating to an additional Cash Capital Contribution (“Contribution”) requirement of approximately $600,000 as a result of trees producing limited revenue because they are still in early stage development, a reduction in market price for citrus fruit for the 2019/20 harvest season due to excess inventories and the adoption of a more extensive caretaking plan focused on limiting the impact of citrus greening. The Company’s portion of the Contribution was approximately $306,000 and was funded on September 24, 2020. The remaining portion of the Contribution of $294,000 was funded by the noncontrolling parties.

On April 16, 2018, all operating partners of Citree received a funding notice relating to an additional Cash Capital Contribution requirement of approximately $2,041,000 as a result of Hurricane Irma, which reduced the amount of crop available for sale in the 2017-20182017/2018 harvest season and the Company’s adoption of a more extensive caretaking plan focused on limiting the impact of citrus greening. The Company’s portion of the Contribution was approximately $1,041,000 and was funded on April 27, 2018. The remaining portion of the Contribution of $1,000,000 was funded by the noncontrolling parties.

Distribution of Shares by Alico’s Largest Shareholder

On November 12, 2019, 734 Investors, the Company’s largest shareholder, distributed the 3,173,405 shares of Company common stock held by it, on a pro rata basis, to its members. We understandThe Company understands that this share distribution was made in anticipation of thea subsequent dissolution of 734 Investors later this year.Investors. Transfers of these shares are not registered on any current Alico registration statement, but the shares are potentially transferable pursuant to Rule 144, subject to certain customary restrictions.

Note 16.15. Commitments and Contingencies

Operating Leases

The Company has obligations under various non-cancelable long-term operating leases primarily for office space and equipment. In addition, the Company has various obligations under other equipment leases of less than one year.

Total rent expense was approximately $308,000, $450,000 $1,062,000 and $725,000$1,062,000 for the fiscal years ended September 30, 2020, 2019 and 2018, and 2017, respectively.

The future minimum annual rental payments under non-cancelable operating leases are as follows:

(in thousands)
2021		$	519
2022			324
2023			48
Total		$	891

(in thousands)
2020	$	191
2021	169
2022	175
2023	15
Total	$	550

Purchase Commitments

The Company enters into contracts for the purchase of citrus trees during the normal course of its business. As of September 30, 2019,2020, the Company had approximately $1,603,000$3,014,000 relating to outstanding commitments for these purchases that will be paid upon delivery of the remaining citrus trees.

Letters of Credit

The Company had outstanding standby letters of credit in the total amount of approximately $460,000$399,000 and $10,300,000$460,000 at September 30, 20192020 and September 30, 2018,2019, respectively, to secure its various contractual obligations. Upon the completion of the 2018 Post Closing Agreement (and corresponding termination of the 2014 Post Closing Agreement), the Company terminated its $9,800,000 standby letter of credit associated with the Global Ag Land Disposition transaction (see Note 8. “Deferred Gain on Sale”).

Legal Proceedings

Florida Litigation

On November 16, 2018, 734 Agriculture, RCF 2014 Legacy LLC, Delta Offshore Master II, LTD. and Mr. Remy W. Trafelet (the “Trafelet Parties”), who was at the time the Company's President and Chief Executive Officer and a member of the Board of Directors, filed a lawsuit against Messrs. George R. Brokaw, Henry R. Slack, W. Andrew Krusen and Greg Eisner, members of the Board of Directors, in the Circuit Court (the “Circuit Court”) for Hillsborough County, Florida (the “Florida Litigation”). The Trafelet Parties sought, among other things, a declaration that (1) a purported stockholder action by written consent, delivered to the Company in the name of 734 Investors and the plaintiffs in the Florida Litigation on November 11, 2018 (the “Purported Consent”) was valid and binding, (2) the resolutions passed at a meeting of the Board of Directors on November 12, 2018, to, among other things, constitute an ad hoc committee of the Board of Directors to consider, evaluate and make any and all determinations, and to take any and all actions, on behalf of the Board of Directors, in connection with the Purported Consent were null and void and (3) the four defendants in the Florida Litigation were properly removed from the Board of Directors by the Purported Consent. On November 27, 2018, the Circuit Court denied without prejudice plaintiffs’ motion for a temporary restraining order and an affirmative injunction restoring Mr. Trafelet from administrative leave to active status in his capacity as President and CEO of the Company.

On November 28, 2018, the parties in the Florida Litigation stipulated to an order which provided, pending the resolution of the Delaware Litigation (as defined below), that (1) the record date for the Purported Consent was stayed indefinitely, and (2) Mr. Trafelet and the Company’s Board of Directors should not take any action out of routine day-to-day operations conducted in the ordinary course of business, including any action to change the corporate governance of Alico or removing any corporate officers or directors from positions held as of November 27, 2018.

On December 6, 2018, the Trafelet Parties filed an amended complaint in the Florida Litigation which added the Company and Benjamin D. Fishman, a member of the Board of Directors, as defendants. On December 21, 2018, the Trafelet Parties filed a renewed motion for a preliminary injunction restoring Mr. Trafelet from administrative leave to active status in his capacity as President and CEO of the Company. On January 14, 2019, the defendants in the Florida Litigation filed an opposition to plaintiffs’ renewed motion for a preliminary injunction. On January 18, 2019, the defendants in the Florida Litigation filed a motion to dismiss the plaintiffs’ amended complaint.

On February 11, 2019, the parties to the Florida Litigation entered into a settlement agreement (the “Alico Settlement Agreement”) wherein the parties agreed to promptly dismiss all claims in the Florida Litigation. Pursuant to the Alico Settlement Agreement,

Mr. Trafelet agreed to voluntarily resign as President and Chief Executive Officer and as a member of the Board of Directors, effective upon the execution of the Alico Settlement Agreement.

As contemplated by the Alico Settlement Agreement, on February 11, 2019, the Company entered into a consulting agreement (the “Consulting Agreement”) with Mr. Trafelet and 3584 Inc., an entity controlled by Mr. Trafelet (the “Consultant”). Pursuant to the Consulting Agreement, Mr. Trafelet agreed to make himself available to provide consulting services to the Company through the Consultant for up to 24 months. In exchange for the consulting services, the Consultant is receiving an annual consulting fee of $400,000. If the Company terminates the consulting period (other than in certain specified circumstances), the Company will continue to pay the consulting fees described in the immediately preceding sentence through the balance of the 24-month term. As such, the Company recorded the $800,000 as an expense for the fiscal year ended September 30, 2019.

In addition, on February 11, 2019, as contemplated by the Alico Settlement Agreement, the Company entered into a Registration Rights Agreement (the “Registration Rights Agreement”) with Mr. Trafelet, relating to the shares of the Company’s common stock directly held by the Trafelet Parties as of February 11, 2019 (the “Registrable Securities”). The Registration Rights Agreement required the Company to, among other things and subject to the terms and conditions thereof, use reasonable best efforts to file with the SEC a registration statement on Form S-3 covering the resale of the Registrable Securities. On October 10, 2019, Mr. Trafelet executed a waiver whereby he waived the S-3 Registration Rights but maintained all other rights arising under the Registration Rights Agreement and all rights arising under Section 14 of the Alico Settlement Agreement.

Delaware Litigation

On November 20, 2018, members of 734 Investors filed a lawsuit against 734 Agriculture and Mr. Trafelet, who was at the time the Company's President and Chief Executive Officer and a member of the Board of Directors in the Delaware Court of Chancery (the "Delaware Court"), captioned Arlon Valencia Holdings v. Trafelet, C.A. No. 2018-0842-JTL (the “Members’ Delaware Litigation”). The plaintiffs sought, among other things, a declaration that (1) 734 Agriculture was validly replaced as the managing member of 734 Investors pursuant to the Amended and Restated Limited Liability Company Operating Agreement of 734 Investors (the “LLC Agreement”) and November 19, 2018 resolution by written consent to remove 734 Agriculture as managing member of 734 Investors, and to designate Arlon Valencia Holdings, LLC as the new managing member of 734 Investors (the “734 Consent”), and (2) the Purported Consent was invalid under the LLC Agreement.

Also, on November 20, 2018, 734 Agriculture filed a lawsuit contesting the 734 Consent in the Delaware Court, captioned 734 Agriculture v. Arlon Valencia Holdings, LLC, C.A. No. 2018-0844-JTL (the “734 Delaware Litigation”). On November 27, 2018, the Delaware Court entered a stipulated order consolidating the Members’ Delaware Litigation and the 734 Delaware Litigation into a single lawsuit, captioned In re 734 Investors, LLC Litigation, Consol. C.A. No. 2018-0844-JTL (the consolidated suit, the “Delaware Litigation”).

On December 5, 2018, the Delaware Court entered a stipulated status quo order which provided, among other things, that 734 Agriculture was to serve as the managing member of 734 Investors during the pendency of the Delaware Litigation. The status quo order also provided that 734 Agriculture would not be permitted to take any actions outside of the ordinary course of business of 734 Investors without the consent of two-thirds of the membership interests of 734 Investors, including exercising any voting rights with respect to any shares of the Company’s common stock beneficially owned by 734 Investors.

On February 11, 2019, Mr. Trafelet, 734 Agriculture, 734 Investors, and certain members of 734 Investors entered into a settlement agreement (the “734 Investors Settlement Agreement”) wherein the parties agreed to promptly dismiss all claims in the Delaware Litigation. Pursuant to the 734 Investors Settlement Agreement, 734 Agriculture resigned as Managing Member of 734 Investors and Arlon Valencia Holdings, LLC was confirmed as Managing Member of 734 Investors.

From time to time, Alico may be involved in litigation relating to claims arising out of its operations in the normal course of business. There are no other current legal proceedings to which the Company is a party or of which any of its property is subject that it believes will have a material adverse effect on its financial position, results of operations or cash flows.

Note 16. Selected Quarterly Financial Data (unaudited)

Summarized quarterly financial data for the fiscal years ended September 30, 2020, and 2019 are computed independently each quarter, therefore, the sum of the quarter amounts may not equal the total amount for the respective year due to rounding as follows:

(in thousands, except per share amounts)		Fiscal Quarter Ended
		December 31,								March 31,								June 30,								September 30,
		2019				2018				2020				2019				2020				2019				2020				2019
Total operating revenues		$	11,005			$	14,779			$	50,515			$	48,521			$	26,122			$	57,565			$	4,865			$	1,386
Total operating expenses			5,391				11,597				43,898				32,207				19,902				31,561				5,397				(13,474	)
Gross profit (loss)			5,614				3,182				6,617				16,314				6,220				26,004				(532	)			14,860
General and administrative expenses			2,760				3,450				2,953				4,654				2,556				2,682				2,729				4,360
Other (expense) income, net			(1,595	)			(2,864	)			1,398				(1,972	)			(1,405	)			(1,623	)			26,058				11,478
Income (loss) before income taxes			1,259				(3,132	)			5,062				9,688				2,259				21,699				22,797				21,978
Income tax (benefit) expense			361				(629	)			1,496				2,228				171				5,483				5,635				5,701
Net (loss) income			898				(2,503	)			3,566				7,460				2,088				16,216				17,162				16,277
Net (income) loss attributable to noncontrolling interests			(107	)			36				5				87				8				28				42				232
Net income (loss) attributable to Alico Inc. common stockholders		$	791			$	(2,467	)		$	3,571			$	7,547			$	2,096			$	16,244			$	17,204			$	16,509
Earnings (loss) per share:
Basic		$	0.11			$	(0.33	)		$	0.48			$	1.01			$	0.28			$	2.17			$	2.29			$	2.21
Diluted		$	0.11			$	(0.33	)		$	0.48			$	1.01			$	0.28			$	2.17			$	2.29			$	2.21

Total operating expenses for the fiscal quarter ended September 30, 2019 includes insurance proceeds received of approximately $486,000 in additional property and casualty claims reimbursement relating to Hurricane Irma (see Note 3. “Inventories”) and block grants of approximately $15,597,000 under the Florida Citrus Recovery Block Grant (“CRBG”) program relating to Hurricane Irma. General and administrative expenses for the fiscal quarter ended September 30, 2019 include pension expense of $935,000 relating to termination of employee benefit plan (see Note 13. “Employee Benefit Plans” for further detail). Other income for the fiscal quarter ended September 30, 2019 includes a gain on sale of assets of approximately $13,166,000 (see Note 4. “Assets Held For Sale” and Note 5. “Property and Equipment, Net” for further information). Operating revenues and operating expenses for the fiscal quarter ended September 30, 2020 include approximately $3,246,000 and approximately $2,951,000, respectively, relating to the grove management services being provided to a third-party.  Other income for the fiscal quarter ended September 30, 2020 includes a gain on sale of assets of approximately $27,470,000 (see Note 4. “Assets Held For Sale” and Note 5. “Property and Equipment, Net” for further information).

Note 17. Subsequent Event

On December 5, 2019,2, 2020, the Board of Directors of the Company declared a first quarter of fiscal year 20202021 cash dividend of $0.09$0.18 per share on its outstanding common stock to be paid to shareholders of record as of December 27, 2019,24, 2020, with payment expected on January 10, 2020.

Note 18. Selected Quarterly Financial Data (unaudited)

Summarized quarterly financial data for8, 2021.

In November 2020, the fiscal years ended September 30, 2019,Company awarded 5,885 shares of restricted stock to certain officers and 2018 are computed independently each quarter, therefore, the sum of the quarter amounts may not equal the total amount for the respective year due to rounding as follows:

(in thousands, except per share amounts)	Fiscal Quarter Ended
	December 31,							March 31,							June 30,							September 30,
	2018			2017				2019			2018				2019			2018				2019			2018
Total operating revenues	$	14,779		$	17,533			$	48,521		$	35,600			$	57,565		$	26,517			$	1,386		$	1,631
Total operating expenses	11,597			16,951				32,207			27,767				31,561			14,603				(13,474		)	(3,633		)
Gross profit	3,182			582				16,314			7,833				26,004			11,914				14,860			5,264
General and administrative expenses	3,450			3,886				4,654			3,073				2,682			2,955				4,360			5,144
Other (expense) income, net	(2,864		)	(375		)		(1,972		)	(2,140		)		(1,623		)	5,074				11,478			96
Income (loss) before income taxes	(3,132		)	(3,679		)		9,688			2,620				21,699			14,033				21,978			216
Income tax (benefit) expense	(629		)	(12,417		)		2,228			8,150				5,483			4,941				5,701			(284		)
Net (loss) income	(2,503		)	8,738				7,460			(5,530		)		16,216			9,092				16,277			500
Net loss attributable to noncontrolling interests	36			8				87			16				28			8				232			218
Net income (loss) attributable to Alico Inc. common stockholders	$	(2,467	)	$	8,746			$	7,547		$	(5,514	)		$	16,244		$	9,100			$	16,509		$	718
Earnings per share:
Basic	$	(0.33	)	$	1.06			$	1.01		$	(0.67	)		$	2.17		$	1.11			$	2.21		$	0.09
Diluted	$	(0.33	)	$	1.05			$	1.01		$	(0.67	)		$	2.17		$	1.09			$	2.21		$	0.09

Total operating expenses for the fiscal quarter ended June 30, 2018 include insurance proceeds relating to Hurricane Irma of $477,000 for property and casualty damage claims and $3,726,000 for crop claims. Total operating expenses for the fiscal quarter ended September 30, 2018 included insurance proceeds relating to the Hurricane Irma of $5,226,000 for crop damage claims. Total operating expenses for the fiscal quarter ended September 30, 2019 includes insurance proceeds received of approximately $486,000 in additional property and casualty claims reimbursement relating to Hurricane Irma and block grants of approximately $15,597,000managers under the Florida Citrus Recovery Block Grant (“CRBG”) program relating to Hurricane Irma. General and administrative expenses2015 Plan.

On October 30, 2020, the Company purchased approximately 3,280 gross citrus acres located in Hendry County for the fiscal quarter ended September 30, 2019 include pension expensea purchase price of $935,000 relating to termination of employee benefit plan (see Note 14. “Employee Benefit Plans” for further detail). Other income for the fiscal quarter ended September 30, 2019 includes a gain on sale of assets of approximately $13,166,000 (see Note 3. “Inventories”, Note 4. “Assets Held For Sale” and Note 5. “Property and Equipment, Net” for further information).$16.5 million.

Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure

None.

Item 9A. Controls and Procedures

(a)	Evaluation of Disclosure Controls and Procedures.

Our Principal Executive Officer and Chief Financial Officer have evaluated the effectiveness of the our disclosure controls and procedures as such term is defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended, (the “Exchange Act”) as of the end of the period covered by this report. Based on this evaluation, our Principal Executive Officer and Chief Financial Officer have concluded that, as of the end of the period covered by this report, our disclosure controls and procedures were effective.

(b)	Changes in Internal Control over Financial Reporting.

During the fourth fiscal quarter ended September 30, 2019,2020, there were no changes in our internal controls over financial reporting that have materially affected or are reasonably likely to materially affect, our internal control over financial reporting.

(c)	Management Report on Internal Control Over Financial Reporting

Management of the Company is responsible for establishing and maintaining adequate internal control over financial reporting as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act. The Company’s internal control over financial reporting is designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. The Company’s internal control over financial reporting includes those policies and procedures that:

(i)	pertain to the maintenance of records, that in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the Company;

(ii)	provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the Company are being made only in accordance with authorizations of management and directors of the Company; and

(iii)	provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of the Company’s assets that could have a material effect on the financial statements.

Management assessed the effectiveness of the Company’s internal control over financial reporting as of September 30, 2019.2020. In making this assessment, management used the criteria described in Internal Control - Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (“COSO”).

Based on our assessment and those criteria, management concluded that our internal control over financial reporting was effective as of September 30, 2019.2020. Management reviewed the results of their assessment with our Audit Committee. The effectiveness of our internal control over financial reporting as of September 30, 20192020 has been audited by RSM US LLP, an independent registered public accounting firm, as stated in their attestation report which is included herein.

Item 9B. Other Information

Item 5.02 Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers;

Compensatory Arrangements of Certain Officers.

(e)

On December 2, 2019, the Company entered into a new employment agreement (the “Rallo Employment Agreement”) with Richard Rallo. Mr. Rallo serves as Chief Financial Officer of the Company. The Rallo Employment Agreement provides for an annual base salary of $275,000. Mr. Rallo is eligible for an annual incentive compensation award with an annual target opportunity in an amount equal to 40% of his annual base salary.

The Rallo Employment Agreement also provides that, if Mr. Rallo’s employment is terminated by the Company without “cause” or Mr. Rallo resigns with “good reason” (as each such term is defined in the Rallo Employment Agreement), then, subject to his

None.

execution, delivery, and non-revocation of a general release of claims in favor of the Company, Mr. Rallo will be entitled to (i) cash severance in an amount equal to 12 months of the annual base salary, (ii) the Accrued Obligations (as defined in the Rallo Employment Agreement) in a cash lump sum within 30 days after the date of termination, (iii) any rights or payments that are vested benefits or that Mr. Rallo is otherwise entitled to receive at or subsequent to the date of termination under any employee benefit plan or any other contract or agreement with the Company, and (iv) any Annual Bonus (as defined in the Rallo Employment Agreement) that has been earned but not paid as of the date of termination.

The Rallo Employment Agreement includes various restrictive covenants in favor of the Company, including a confidentiality covenant, a non-disparagement covenant, and 12-month post-termination noncompetition and customer and employee non-solicitation covenants.

In addition to his position as Chief Financial Officer, Mr. Rallo retains his position as the Company’s Principal Accounting Officer.

The foregoing description of the Rallo Employment Agreement does not purport to be complete and is qualified in its entirety by reference to the complete text of the Rallo Employment agreement, which is attached hereto as Exhibit 10.37 to this Annual Report on Form 10-K and is incorporated herein by reference.

PART III

Certain information required by Part III is omitted from this Annual Report on Form 10-K because we will file a definitive Proxy Statement for the 20202021 Annual Meeting of StockholdersShareholders pursuant to Regulation 14A of the Securities Exchange Act of 1934, (the “Proxy Statement”), not later than 120 days after the end of the fiscal year covered by this Annual Report on Form 10-K, and the applicable information included in the Proxy Statement is incorporated herein by reference.

Item 10. Directors, Executive Officers and Corporate Governance

Information concerning our directors and nominees and other information as required by this itemItem 10 are hereby incorporated by reference from our Proxy Statement to be filed with the SEC pursuant to Regulation 14A.

Code of Ethics

We have adopted a Code of Business Conduct and Ethics that is intended to serve as a code of ethics for purposes of Item 406 of Regulation S-K. Our Code of Business Conduct and Ethics is posedposted on our website http://www.alicoinc.com (at the Investor homepage under "Corporate Governance") and we intend to disclose on our website any amendments to, or waiver from, such code.

Item 11. Executive Compensation

The information required by Item 11 regarding executive compensation is included under the headings “Compensation Discussion and Analysis,” “Compensation Committee Report” and “Compensation Committee Interlocks and Insider Participation” in ourthe Proxy Statement to be filed with the SEC pursuant to Regulation 14A.

Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters

Information concerning the ownership of certain beneficial owners and management and related stockholder matters as required by this Item 12 is hereby incorporated by reference to ourthe Proxy Statement to be filed with the SEC pursuant to Regulation 14A.

Equity Compensation Arrangements

Effective January 27, 2015, the Board of Directors adopted the 2015 Stock Incentive Plan (the “2015 Plan”) which provides for up to 1,250,000 shares of the Company’s common stock to be available for issuance to provide a long-term incentive plan for officers, employees, directors and/or consultants to directly link incentives to stockholders' value. The 2015 Plan was approved by stockholders in February 2015.

The following table illustrates the common shares remaining available for future issuance under the 2015 Plan as of September

30, 2019:2020:

		Number of securities to be issued upon exercise of outstanding options, warrants and rights				Weighted-average exercise price of outstanding options, warrants and rights				Number of securities remaining available for future issuance under equity plans
Plan Category:
Equity compensation plans approved by security holders			293,000			$	32.09				939,500
Equity compensation plans not approved by security holders		—				N/A				—
Total			293,000			$	32.09				939,500

	Number of securities to be issued upon exercise of outstanding options,  warrants and rights		Weighted-average exercise price of outstanding options, warrants and rights			Number of securities remaining available for future issuance under equity plans
Plan Category:
Equity compensation plans approved by security holders	227,500		$	31.46		1,005,000
Equity compensation plans not approved by security holders	—		N/A			—
Total	227,500		$	31.46		1,005,000

In November 2017, the Company awarded 5,000 restricted shares to one senior executive under the 2015 Plan.

In September 2018, the Company awarded 300,000 stock options to two senior executives under the 2015 Plan. Additionally, in September 2018, two other senior executives forfeited an aggregate of 375,000 stock options, which were originally issued under the 2015 Plan and no replacement options were granted.

In October 2018, the Company awarded 10,000 stock options to one senior executive under the 2015 Plan.

In October 2019, the Company awarded 118,000 stock options to senior managers and certain other managers under the 2015 Plan.  Additionally, in each of February 2020 and August 2020, one former senior executive forfeited 26,250 stock options, aggregating 52,500 in total, which were originally issued under the 2015 Plan and no replacement options were granted.

In February 2019, pursuant to a settlement agreement, a senior executive of the Company forfeited an aggregate of 457,500 stock options, which were originally issued under the 2015 Plan and no replacement options were granted.

Item 13. Certain Relationships and Related Transactions and Director Independence

The information concerning relationships and related transactions as required by this Item 13 is hereby incorporated by reference to our Proxy Statement to be filed with the SEC pursuant to Regulation 14A.

Item 14. Principal Accountants Fees and Services

Information concerning principal accounting fees and services as required by this Item 14 is hereby incorporated by reference to ourthe Proxy Statement to be filed with the SEC pursuant to Regulation 14A.

PART IV

Item 15. Exhibits, Financial Statement Schedules

(a)	Documents filed as part of this report

(1)	Financial Statements:

Our Consolidated Financial Statements are included in Part II, Item 8 of this Annual Report on Form 10-K.

(2)	Financial Statement Schedules:

Financial statement schedules are omitted as the required information is either inapplicable or the information is presented in our Consolidated Financial Statements or notes thereto.

(3)	Exhibits

The exhibits listed in the Exhibit Index in (b) below are filed or incorporated by reference as part of this Annual Report on Form 10-K.

(b)

Exhibit Index

Exhibit Number		Exhibit Index
(b)     2.1***		Asset Purchase Agreement, dated as of December 1, 2014, by and among Alico, Inc., Orange-Co, LP, and, solely with respect to certain sections thereof, Orange-Co, LLC and Tamiami Citrus, LLC. (incorporated by reference to Exhibit Index2.1 of Alico’s filing on Form 8-K dated December 5, 2014)
2.2***		Agreement and Plan of Merger, dated as of December 2, 2014, by and among Alico, Inc., 734 Sub, LLC, 734 Citrus Holdings, LLC, and, solely with respect to certain sections thereof, 734 Agriculture, LLC, Rio Verde Ventures, LLC and Clayton G. Wilson (incorporated by reference to Exhibit 2.2 of Alico’s filing on Form 8-K dated December 5, 2014)
3.1		Restated Certificate of Incorporation, dated February 17, 1972 (incorporated by reference to Exhibit 3.1 of Alico's filing on Form 10-K dated December 11, 2017)
3.2		Certificate of Amendment to Certificate of Incorporation, dated January 14, 1974 (incorporated by reference to Alico’s Registration Statement on Form S-8, dated December 21, 2005, Registration No. 333-130575)
3.3		Amendment to Articles of Incorporation, dated January 14, 1987 (incorporated by reference to Alico’s Registration Statement on Form S-8, dated December 21, 2005, Registration No. 333-130575)
3.4		Amendment to Articles of Incorporation, dated December 27, 1988 (incorporated by reference to Alico’s Registration Statement on Form S-8, dated December 21, 2005, Registration No. 333-130575)
3.5		By-Laws of Alico, Inc., amended and restated (incorporated by reference to Exhibit 3.5 of the Company’s quarterly report on Form 10-Q, filed with the SEC on August 6, 2019)
4.1		Description of Securities
10.1		Credit Agreement dated as of December 1, 2014, by and between Alico, Inc., Alico-Agri, Ltd., Alico Plant World, L.L.C., Alico Fruit Company, L.L.C., Alico Land Development, Inc., and Alico Citrus Nursery, L.L.C., as Borrowers and Rabo Agrifinance, Inc., as Lender (incorporated by reference to Exhibit 10.2 of Alico's filing on Form 8-K dated December 5, 2014)
10.2		Purchase and Sale Agreement dated August 7, 2014 (incorporated by reference to Exhibit 10.10 of Alico’s filing on Form 10-K dated December 12, 2014)
10.3*		Form of Indemnification Agreement (incorporated by reference to Exhibit 10.5 of the Company’s quarterly report on Form 10-Q filed with the SEC on May 6, 2013)
10.4*		Management Security Plan(s) Trust Agreement (incorporated by reference to Exhibit 10.6 of the Company’s quarterly report on Form 10-Q filed with the SEC on May 6, 2013)
10.5		Agricultural Lease Agreement dated May 19, 2014 between Alico, Inc. and United States Sugar Corporation. (incorporated by reference to Exhibit 10.1 of the Company’s quarterly report on Form 10-Q filed with the SEC on August 11, 2014)
10.6***		First Amended and Restated Credit Agreement, dated as of December 1, 2014, by and among Alico, Inc., Alico Land Development, Inc., Alico-Agri, Ltd., Alico Plant World, L.L.C., Alico Fruit Company, LLC, Metropolitan Life Insurance Company, and New England Life Insurance Company (incorporated by reference to Exhibit 10.1 of Alico’s filing on Form 8-K dated December 5, 2014)
10.7***		Credit Agreement dated as of December 1, 2014, by and between Alico, Inc., Alico-Agri, Ltd., Alico Plant World, L.L.C., Alico Fruit Company, LLC, Alico Land Development, Inc., and Alico Citrus Nursery, LLC, as Borrowers and Rabo Agrifinance, Inc., as Lender (incorporated by reference to Exhibit 10.2 of Alico’s filing on Form 8-K dated December 5, 2014)

10.8		Shared Services Agreement by and between Alico, Inc. and Trafelet Brokaw Capital Management, L.P. dated July 23, 2018 (incorporated by reference to Exhibit 10.1 of Alico's filing on Form 10-Q dated August 6, 2018)
10.9		Loan Agreement, dated December 31, 2012, by and among 734 Citrus Holdings, LLC, 734 LMC Groves, LLC, 734 Co-Op Groves, LLC, 734 BLP Groves, LLC, 734 Harvest LLC and Prudential Mortgage Capital Company, LLC (the "Prudential Loan Agreement") (incorporated by reference to Exhibit 10.16 of Alico’s filing on Form 10-K dated December 10, 2015)
10.10		Promissory Note A, dated December 31, 2012, by and among 734 Citrus Holdings, LLC, 734 LMC Groves, LLC, 734 Co-Op Groves, LLC, 734 BLP Groves, LLC, 734 Harvest LLC and Prudential Mortgage Capital Company, LLC (incorporated by reference to Exhibit 10.17 of Alico’s filing on Form 10-K dated December 10, 2015)
10.11		Promissory Note B, dated December 31, 2012, by and among 734 Citrus Holdings, LLC, 734 LMC Groves, LLC, 734 Co-Op Groves, LLC, 734 BLP Groves, LLC, 734 Harvest LLC and Prudential Mortgage Capital Company, LLC (incorporated by reference to Exhibit 10.18 of Alico’s filing on Form 10-K dated December 10, 2015)
10.12		Promissory Note C, dated December 31, 2012, by and among 734 Citrus Holdings, LLC, 734 LMC Groves, LLC, 734 Co-Op Groves, LLC, 734 BLP Groves, LLC, 734 Harvest LLC and Prudential Mortgage Capital Company, LLC (incorporated by reference to Exhibit 10.19 of Alico’s filing on Form 10-K dated December 10, 2015)
10.13		First Amendment to Loan Agreement, dated March 26, 2013 (Prudential Loan Agreement) (incorporated by reference to Exhibit 10.20 of Alico’s filing on Form 10-K dated December 10, 2015)
10.14		Promissory Note D, dated March 26, 2013, by and among 734 Citrus Holdings, LLC, 734 LMC Groves, LLC, 734 Co-Op Groves, LLC, 734 BLP Groves, LLC, 734 Harvest LLC and Prudential Mortgage Capital Company, LLC (incorporated by reference to Exhibit 10.21 of Alico’s filing on Form 10-K dated December 10, 2015)
10.15		Loan Agreement, dated September 4, 2014, by and among 734 Citrus Holdings, LLC, 734 LMC Groves, LLC, 734 Co-Op Groves, LLC, 734 BLP Groves, LLC, 734 Harvest LLC and Prudential Mortgage Capital Company, LLC ("Loan E and F") (incorporated by reference to Exhibit 10.22 of Alico’s filing on Form 10-K dated December 10, 2015)
10.16		Promissory Note E, dated September 4, 2014, by and among 734 Citrus Holdings, LLC, 734 LMC Groves, LLC, 734 Co-Op Groves, LLC, 734 BLP Groves, LLC, 734 Harvest LLC and Prudential Mortgage Capital Company, LLC (incorporated by reference to Exhibit 10.23 of Alico’s filing on Form 10-K dated December 10, 2015)
10.17		Promissory Note F, dated September 4, 2014, by and among 734 Citrus Holdings, LLC, 734 LMC Groves, LLC, 734 Co-Op Groves, LLC, 734 BLP Groves, LLC, 734 Harvest LLC and Prudential Mortgage Capital Company, LLC (incorporated by reference to Exhibit 10.24 of Alico’s filing on Form 10-K dated December 10, 2015)
10.18		First Amendment to Loan Agreement, dated April 23, 2015 (Loan E and F) (incorporated by reference to Exhibit 10.25 of Alico’s filing on Form 10-K dated December 10, 2015)
10.19		Second Amendment to the Loan Agreement, dated September 4, 2014 (Prudential Loan Agreement) (incorporated by reference to Exhibit 10.26 of Alico’s filing on Form 10-K dated December 10, 2015)
10.20		Third Amendment to the Loan Agreement, dated April 23, 2015 (Prudential Loan Agreement) (incorporated by reference to Exhibit 10.27 of Alico’s filing on Form 10-K dated December 10, 2015)
10.21		Cancellation and Termination of Note D, dated April 23, 2015, by and among 734 Citrus Holdings, LLC, 734 LMC Groves, LLC, 734 Co-Op Groves, LLC, 734 BLP Groves, LLC, 734 Harvest LLC and Prudential Mortgage Capital Company, LLC (incorporated by reference to Exhibit 10.28 of Alico’s filing on Form 10-K dated December 10, 2015)
10.22		First Amendment to Credit Agreement and Consent with Rabo Agrifinance, Inc. dated February 26, 2015 (incorporated by reference to Exhibit 10.29 of Alico’s filing on Form 10-K dated December 10, 2015)
10.23		Second Amendment to Credit Agreement with Rabo Agrifinance, Inc. dated July 16, 2015 (incorporated by reference to Exhibit 10.30 of Alico’s filing on Form 10-K dated December 10, 2015)
10.24		Amendment to First Amended and Restated Credit Agreement with Metropolitan Life Insurance Company and New England Life Insurance Company, dated February 1, 2015 (incorporated by reference to Exhibit 10.31 of Alico’s filing on Form 10-K dated December 10, 2015)
10.25		Second Amendment to First Amended and Restated Credit Agreement with Metropolitan Life Insurance Company and New England Life Insurance Company dated August 12, 2015 (incorporated by reference to Exhibit 10.32 of Alico’s filing on Form 10-K dated December 10, 2015)
10.26***		Third Amendment to First Amended and Restated Credit Agreement with Metropolitan Life Insurance Company and New England Life Insurance Company dated November 4, 2019 (incorporated by reference to Exhibit 10.26 of Alico’s filing on Form 10-K dated December 5, 2019)
10.27		Fourth Amendment to First Amended and Restated Credit Agreement with Metropolitan Life Insurance Company and New England Life Insurance Company dated October 2, 2019 (incorporated by reference to Exhibit 10.27 of Alico’s filing on Form 10-K dated December 5, 2019)
10.28		Renewal Promissory Note by Alico, Inc., Alico-Agri, Ltd., Alico Plant World, L.L.C., Alico Fruit Company, LLC, Alico Land Development Inc., and Alico Citrus Nursery, LLC in favor of Rabo Agrifinance, LLC (f/k/a Rabo Agrifinance, Inc.) dated September 30, 2016 (incorporated by reference to Exhibit 10.34 of Alico's filing on Form 10-K dated December 6, 2016)
10.29		Second Renewal Promissory Note by Alico, Inc., Alico-Agri, Ltd., Alico Plant World, L.L.C., Alico Fruit Company, LLC, Alico Land Development Inc., and Alico Citrus Nursery, LLC in favor of Rabo Agrifinance, LLC (f/k/a Rabo Agrifinance, Inc.) dated September 6, 2017 (incorporated by reference to Exhibit 10.39 of Alico's filing on Form 10-K dated December 11, 2017)

10.30		Third Renewal Promissory Note by Alico, Inc., Alico-Agri, Ltd., Alico Plant World, L.L.C., Alico Fruit Company, LLC, Alico Land Development Inc., and Alico Citrus Nursery, LLC in favor of Rabo Agrifinance, LLC (f/k/a Rabo Agrifinance, Inc.) dated September 26, 2018 (incorporated by reference to Exhibit 10.40 of Alico’s filing on Form 10-K dated December 6, 2018)
10.31*		Employment Agreement dated June 1, 2015 between Alico, Inc. and John Kiernan (incorporated by reference to Exhibit 10.1 of the Company’s Form 8-K filed with the SEC on June 1, 2015)
10.32*		Separation and Consulting Agreement dated December 31, 2016 between Alico, Inc. and Clayton G. Wilson (incorporated by reference to Exhibit 10.1 of the Company’s Form 8-K filed with the SEC on January 4, 2017)
10.33*		Employment Agreement dated December 31, 2016 between Alico, Inc. and Remy W. Trafelet (incorporated by reference to Exhibit 10.2 of the Company’s Form 8-K filed with the SEC on January 4, 2017)
10.34*		Employment Agreement dated December 31, 2016 between Alico, Inc. and Henry R. Slack (incorporated by reference to Exhibit 10.3 of the Company’s Form 8-K filed with the SEC on January 4, 2017)
10.35*		Employment Agreement dated March 27, 2013 between Alico, Inc. and George R. Brokaw (incorporated by reference to Exhibit 10.4 of the Company’s Form 8-K filed with the SEC on January 4, 2017)
10.36*		Employment Agreement dated December 2, 2019 between Alico, Inc. and Richard Rallo (incorporated by reference to Exhibit 10.37 of Alico’s filing on Form 10-K dated December 5, 2019)
10.37		Supplement No. 1 dated as of September 30, 2016, to the Security Agreement dated as of December 1, 2014 by and among Alico, Inc., Alico-Agri, Ltd., Alico Plant World, L.L.C., Alico Fruit Company, LLC, Alico Land Development Inc., Alico Citrus Nursery, LLC and Rabo Agrifinance, LLC (f/k/a Rabo Agrifinance, Inc.) (incorporated by reference to Exhibit 10.35 of Alico's filing on Form 10-K dated December 6, 2016)
10.38		Third Amendment to Credit Agreement by and among Alico, Inc., Alico-Agri, Ltd., Alico Plant World, L.L.C., Alico Fruit Company, LLC, Alico Land Development Inc., Alico Citrus Nursery, LLC and Rabo Agrifinance, LLC (f/k/a Rabo Agrifinance, Inc.) dated September 30, 2016 (incorporated by reference to Exhibit 10.33 of Alico's filing on Form 10-K dated December 6, 2016)
10.39		Fourth Amendment to Credit Agreement by and among Alico, Inc., Alico-Agri, Ltd., Alico Plant World, L.L.C., Alico Fruit Company, LLC, Alico Land Development Inc., Alico Citrus Nursery, LLC and Rabo Agrifinance, LLC (f/k/a Rabo Agrifinance, Inc.) dated September 6, 2017 (incorporated by reference to Exhibit 10.38 of Alico's filing on Form 10-K dated December 11, 2017)
10.40		Fifth Amendment to Credit Agreement by and among Alico, Inc., Alico-Agri, Ltd., Alico Plant World, L.L.C., Alico Fruit Company, LLC, Alico Land Development Inc., Alico Citrus Nursery, LLC and Rabo Agrifinance, LLC (f/k/a Rabo Agrifinance, Inc.) dated October 30, 2017 (incorporated by reference to Exhibit 10.37 of Alico’s filing on Form 10-K dated December 6, 2018)
10.41		Sixth Amendment to Credit Agreement by and among Alico, Inc., Alico-Agri, Ltd., Alico Plant World, L.L.C., Alico Fruit Company, LLC, Alico Land Development Inc., Alico Citrus Nursery, LLC and Rabo Agrifinance, LLC (f/k/a Rabo Agrifinance, Inc.) dated July 18, 2018 (incorporated by reference to Exhibit 10.38 of Alico’s filing on Form 10-K dated December 6, 2018)
10.42		Seventh Amendment to Credit Agreement by and among Alico, Inc., Alico-Agri, Ltd., Alico Plant World, L.L.C., Alico Fruit Company, LLC, Alico Land Development Inc., Alico Citrus Nursery, LLC and Rabo Agrifinance, LLC (f/k/a Rabo Agrifinance, Inc.) dated September 26, 2018 (incorporated by reference to Exhibit 10.39 of Alico’s filing on Form 10-K dated December 6, 2018)
10.43		Eighth Amendment to Credit Agreement by and among Alico, Inc., Alico-Agri, Ltd., Alico Plant World, L.L.C., Alico Fruit Company, LLC, Alico Land Development Inc., Alico Citrus Nursery, LLC and Rabo Agrifinance, LLC (f/k/a Rabo Agrifinance, Inc.) dated August 29, 2019 (incorporated by reference to Exhibit 10.44 of Alico’s filing on Form 10-K dated December 5, 2019)
10.44		Ninth Amendment and Waiver to Credit Agreement by and among Alico, Inc., Alico-Agri, Ltd., Alico Plant World, L.L.C., Alico Fruit Company, LLC, Alico Land Development Inc., Alico Citrus Nursery, LLC and Rabo Agrifinance, LLC (f/k/a Rabo Agrifinance, Inc.) dated June 26, 2020 (incorporated by reference to Exhibit 10.1 of Alico’s filing on Form 10-Q dated August 6, 2020)
10.45		Tenth Amendment and Waiver to Credit Agreement by and among Alico, Inc., Alico-Agri, Ltd., Alico Plant World, L.L.C., Alico Fruit Company, LLC, Alico Land Development Inc., Alico Citrus Nursery, LLC and Rabo Agrifinance, LLC (f/k/a Rabo Agrifinance, Inc.) dated August 25, 2020
10.46		Settlement Agreement and Release, dated as of February 11, 2019, by and among Alico, Inc., George R. Brokaw, R. Greg Eisner, Benjamin D. Fishman, W. Andrew Krusen, Henry R. Slack, Remy W. Trafelet , 734 Agriculture, LLC, RCF 2014 Legacy LLC and Delta Offshore Master II, LTD (incorporated by reference to Exhibit 10.1 to the Current Report on Form 8-K filed with the SEC on February 11, 2019.)
10.47		Registration Rights Agreement, dated as of February 11, 2019, by and between Alico, Inc. and Remy W. Trafelet (incorporated by reference from Exhibit C to Exhibit 10.1 to the Current Report on Form 8-K filed with the SEC on February 11, 2019).
10.48		Consulting Agreement, dated as of February 11, 2019, by and among Alico, Inc., 3584 Inc., and Remy W. Trafelet (incorporated by reference from Exhibit B to Exhibit 10.1 to the Current Report on Form 8-K filed with the SEC on February 11, 2019).
10.49*		Alico, Inc. Stock Incentive Plan of 2015 (incorporated by reference from Appendix A to the Company’s Definitive Proxy Statement on Schedule 14A filed with the SEC on January 28, 2015).
10.50*		Form of NonqualifiedStock Option Agreement
10.51*		Form of Incentive Stock Option Agreement
10.52*		Form of Restricted Stock Agreement
10.53+		Alico, Inc. Orange Purchase Agreement R512 - May 20, 2020 (incorporated by reference to Exhibit 10.1 to the Current Report on Form 8-K filed with the SEC on May 21, 2019)

10.54+		Alico, Inc. Orange Purchase Agreement R514 - May 18, 2020 (incorporated by reference to Exhibit 10.2 to the Current Report on Form 8-K filed with the SEC on May 21, 2019)
10.55		Option Agreement for sale and purchase (incorporate by reference to Exhibit 10.4 of Alico’s filing on Form 10-Q dated August 6, 2020)
21.0		Subsidiaries of the Registrant
23.0		Consent of Independent Registered Public Accounting Firm
31.1		Certification of Principal Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 Rule 13a-14(a) certification
31.2		Certification of Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 Rule 13a-14(a) certification
32.1		Certification of Principal Executive Officer pursuant to 18 U.S.C. Section 1350
32.2		Certification of Chief Financial Officer pursuant to 18 U.S.C. Section 1350
101.INS**		Inline XBRL Instance Document
101.SCH**		Inline XBRL Taxonomy Extension Schema Document
101.CAL**		Inline XBRL Taxonomy Calculation Linkbase Document
101.DEF**		Inline XBRL Taxonomy Definition Linkbase Document
101.LAB		Inline XBRL Taxonomy Label Linkbase Document
101.PRE		Inline XBRL Taxonomy Extension Presentation Linkbase Document
104		The cover page for the Company’s Annual Report on Form 10-K for the year ended September 30, 2020, has been formatted in Inline XBRL

*	Denotes a management contract or compensatory plan, contract or arrangement.

**

In accordance with Rule 406T of Regulation S-T, these XBRL (eXtensible Business Reporting Language) documents are furnished and not filed or a part of a registration statement or prospectus for purposes of Sections 11 or 12 of the Securities Act of 1933 or Section 18 of the Securities Exchange Act of 1934 and otherwise are not subject to liability under these sections.

***	Certain schedules and exhibits have been omitted from this filing pursuant to Item 601(b) (2) of Regulation S-K. The Company will furnish supplemental copies of any such schedules or exhibits to the SEC upon request.

+	Pursuant to Item 601(b)(10)(iv) of Regulation S-K promulgated by the SEC, certain portions of this exhibit have been redacted. The Company hereby agrees to furnish supplementally to the SEC, upon its request, an unredacted copy of this exhibit.

Item 16. Form 10-K Summary

Not applicable.

Exhibit Number		Exhibit Index
2.1	***	Asset Purchase Agreement, dated as of December 1, 2014, by and among Alico, Inc., Orange-Co, LP, and, solely with respect to certain sections thereof, Orange-Co, LLC and Tamiami Citrus, LLC. (incorporated by reference to Exhibit 2.1 of Alico’s filing on Form 8-K dated December 5, 2014)
2.2	***	Agreement and Plan of Merger, dated as of December 2, 2014, by and among Alico, Inc., 734 Sub, LLC, 734 Citrus Holdings, LLC, and, solely with respect to certain sections thereof, 734 Agriculture, LLC, Rio Verde Ventures, LLC and Clayton G. Wilson (incorporated by reference to Exhibit 2.2 of Alico’s filing on Form 8-K dated December 5, 2014)
3.1		Restated Certificate of Incorporation, dated February 17, 1972 (incorporated by reference to Exhibit 3.1 of Alico's filing on Form 10-K dated December 11, 2017)
3.2		Certificate of Amendment to Certificate of Incorporation, dated January 14, 1974 (incorporated by reference to Alico’s Registration Statement on Form S-8, dated December 21, 2005, Registration No. 333-130575)
3.3		Amendment to Articles of Incorporation, dated January 14, 1987 (incorporated by reference to Alico’s Registration Statement on Form S-8, dated December 21, 2005, Registration No. 333-130575)
3.4		Amendment to Articles of Incorporation, dated December 27, 1988 (incorporated by reference to Alico’s Registration Statement on Form S-8, dated December 21, 2005, Registration No. 333-130575)
3.5		By-Laws of Alico, Inc., amended and restated (incorporated by reference to Exhibit 3.5 of the Company’s quarterly report on Form 10-Q, filed with the SEC on August 6, 2019)
10.1		Credit Agreement dated as of December 1, 2014, by and between Alico, Inc., Alico-Agri, Ltd., Alico Plant World, L.L.C., Alico Fruit Company, L.L.C., Alico Land Development, Inc., and Alico Citrus Nursery, L.L.C., as Borrowers and Rabo Agrifinance, Inc., as Lender (incorporated by reference to Exhibit 10.2 of Alico's filing on Form 8-K dated December 5, 2014)

10.2		Purchase and Sale Agreement dated August 7, 2014 (incorporated by reference to Exhibit 10.10 of Alico’s filing on Form 10-K dated December 12, 2014)
10.3	*	Form of Indemnification Agreement (incorporated by reference to Exhibit 10.5 of the Company’s quarterly report on Form 10-Q filed with the SEC on May 6, 2013)
10.4	*	Management Security Plan(s) Trust Agreement (incorporated by reference to Exhibit 10.6 of the Company’s quarterly report on Form 10-Q filed with the SEC on May 6, 2013)
10.5		Agricultural Lease Agreement dated May 19, 2014 between Alico, Inc. and United States Sugar Corporation. (incorporated by reference to Exhibit 10.1 of the Company’s quarterly report on Form 10-Q filed with the SEC on August 11, 2014)
10.6	***	First Amended and Restated Credit Agreement, dated as of December 1, 2014, by and among Alico, Inc., Alico Land Development, Inc., Alico-Agri, Ltd., Alico Plant World, L.L.C., Alico Fruit Company, LLC, Metropolitan Life Insurance Company, and New England Life Insurance Company (incorporated by reference to Exhibit 10.1 of Alico’s filing on Form 8-K dated December 5, 2014)
10.7	***	Credit Agreement dated as of December 1, 2014, by and between Alico, Inc., Alico-Agri, Ltd., Alico Plant World, L.L.C., Alico Fruit Company, LLC, Alico Land Development, Inc., and Alico Citrus Nursery, LLC, as Borrowers and Rabo Agrifinance, Inc., as Lender (incorporated by reference to Exhibit 10.2 of Alico’s filing on Form 8-K dated December 5, 2014)
10.8		Shared Services Agreement by and between Alico, Inc. and Trafelet Brokaw Capital Management, L.P. dated July 23, 2018 (incorporated by reference to Exhibit 10.1 of Alico's filing on Form 10-Q dated August 6, 2018)
10.9		Loan Agreement, dated December 31, 2012, by and among 734 Citrus Holdings, LLC, 734 LMC Groves, LLC, 734 Co-Op Groves, LLC, 734 BLP Groves, LLC, 734 Harvest LLC and Prudential Mortgage Capital Company, LLC (the "Prudential Loan Agreement") (incorporated by reference to Exhibit 10.16 of Alico’s filing on Form 10-K dated December 10, 2015)
10.10		Promissory Note A, dated December 31, 2012, by and among 734 Citrus Holdings, LLC, 734 LMC Groves, LLC, 734 Co-Op Groves, LLC, 734 BLP Groves, LLC, 734 Harvest LLC and Prudential Mortgage Capital Company, LLC (incorporated by reference to Exhibit 10.17 of Alico’s filing on Form 10-K dated December 10, 2015)
10.11		Promissory Note B, dated December 31, 2012, by and among 734 Citrus Holdings, LLC, 734 LMC Groves, LLC, 734 Co-Op Groves, LLC, 734 BLP Groves, LLC, 734 Harvest LLC and Prudential Mortgage Capital Company, LLC (incorporated by reference to Exhibit 10.18 of Alico’s filing on Form 10-K dated December 10, 2015)
10.12		Promissory Note C, dated December 31, 2012, by and among 734 Citrus Holdings, LLC, 734 LMC Groves, LLC, 734 Co-Op Groves, LLC, 734 BLP Groves, LLC, 734 Harvest LLC and Prudential Mortgage Capital Company, LLC (incorporated by reference to Exhibit 10.19 of Alico’s filing on Form 10-K dated December 10, 2015)
10.13		First Amendment to Loan Agreement, dated March 26, 2013 (Prudential Loan Agreement) (incorporated by reference to Exhibit 10.20 of Alico’s filing on Form 10-K dated December 10, 2015)
10.14		Promissory Note D, dated March 26, 2013, by and among 734 Citrus Holdings, LLC, 734 LMC Groves, LLC, 734 Co-Op Groves, LLC, 734 BLP Groves, LLC, 734 Harvest LLC and Prudential Mortgage Capital Company, LLC (incorporated by reference to Exhibit 10.21 of Alico’s filing on Form 10-K dated December 10, 2015)
10.15		Loan Agreement, dated September 4, 2014, by and among 734 Citrus Holdings, LLC, 734 LMC Groves, LLC, 734 Co-Op Groves, LLC, 734 BLP Groves, LLC, 734 Harvest LLC and Prudential Mortgage Capital Company, LLC ("Loan E and F") (incorporated by reference to Exhibit 10.22 of Alico’s filing on Form 10-K dated December 10, 2015)
10.16		Promissory Note E, dated September 4, 2014, by and among 734 Citrus Holdings, LLC, 734 LMC Groves, LLC, 734 Co-Op Groves, LLC, 734 BLP Groves, LLC, 734 Harvest LLC and Prudential Mortgage Capital Company, LLC (incorporated by reference to Exhibit 10.23 of Alico’s filing on Form 10-K dated December 10, 2015)
10.17		Promissory Note F, dated September 4, 2014, by and among 734 Citrus Holdings, LLC, 734 LMC Groves, LLC, 734 Co-Op Groves, LLC, 734 BLP Groves, LLC, 734 Harvest LLC and Prudential Mortgage Capital Company, LLC (incorporated by reference to Exhibit 10.24 of Alico’s filing on Form 10-K dated December 10, 2015)
10.18		First Amendment to Loan Agreement, dated April 23, 2015 (Loan E and F) (incorporated by reference to Exhibit 10.25 of Alico’s filing on Form 10-K dated December 10, 2015)
10.19		Second Amendment to the Loan Agreement, dated September 4, 2014 (Prudential Loan Agreement) (incorporated by reference to Exhibit 10.26 of Alico’s filing on Form 10-K dated December 10, 2015)

10.20		Third Amendment to the Loan Agreement, dated April 23, 2015 (Prudential Loan Agreement) (incorporated by reference to Exhibit 10.27 of Alico’s filing on Form 10-K dated December 10, 2015)
10.21		Cancellation and Termination of Note D, dated April 23, 2015, by and among 734 Citrus Holdings, LLC, 734 LMC Groves, LLC, 734 Co-Op Groves, LLC, 734 BLP Groves, LLC, 734 Harvest LLC and Prudential Mortgage Capital Company, LLC (incorporated by reference to Exhibit 10.28 of Alico’s filing on Form 10-K dated December 10, 2015)
10.22		First Amendment to Credit Agreement and Consent with Rabo Agrifinance, Inc. dated February 26, 2015 (incorporated by reference to Exhibit 10.29 of Alico’s filing on Form 10-K dated December 10, 2015)
10.23		Second Amendment to Credit Agreement with Rabo Agrifinance, Inc. dated July 16, 2015 (incorporated by reference to Exhibit 10.30 of Alico’s filing on Form 10-K dated December 10, 2015)
10.24		Amendment to First Amended and Restated Credit Agreement with Metropolitan Life Insurance Company and New England Life Insurance Company, dated February 1, 2015 (incorporated by reference to Exhibit 10.31 of Alico’s filing on Form 10-K dated December 10, 2015)
10.25		Second Amendment to First Amended and Restated Credit Agreement with Metropolitan Life Insurance Company and New England Life Insurance Company dated August 12, 2015 (incorporated by reference to Exhibit 10.32 of Alico’s filing on Form 10-K dated December 10, 2015)
10.26***		Third Amendment to First Amended and Restated Credit Agreement with Metropolitan Life Insurance Company and New England Life Insurance Company dated November 4, 2019
10.27		Fourth Amendment to First Amended and Restated Credit Agreement with Metropolitan Life Insurance Company and New England Life Insurance Company dated October 2, 2019
10.28		Renewal Promissory Note by Alico, Inc., Alico-Agri, Ltd., Alico Plant World, L.L.C., Alico Fruit Company, LLC, Alico Land Development Inc., and Alico Citrus Nursery, LLC in favor of Rabo Agrifinance, LLC (f/k/a Rabo Agrifinance, Inc.) dated September 30, 2016 (incorporated by reference to Exhibit 10.34 of Alico's filing on Form 10-K dated December 6, 2016)
10.29		Second Renewal Promissory Note by Alico, Inc., Alico-Agri, Ltd., Alico Plant World, L.L.C., Alico Fruit Company, LLC, Alico Land Development Inc., and Alico Citrus Nursery, LLC in favor of Rabo Agrifinance, LLC (f/k/a Rabo Agrifinance, Inc.) dated September 6, 2017 (incorporated by reference to Exhibit 10.39 of Alico's filing on Form 10-K dated December 11, 2017)
10.30		Third Renewal Promissory Note by Alico, Inc., Alico-Agri, Ltd., Alico Plant World, L.L.C., Alico Fruit Company, LLC, Alico Land Development Inc., and Alico Citrus Nursery, LLC in favor of Rabo Agrifinance, LLC (f/k/a Rabo Agrifinance, Inc.) dated September 26, 2018 (incorporated by reference to Exhibit 10.40 of Alico’s filing on Form 10-K dated December 6, 2018)
10.31*		Employment Agreement dated June 1, 2015 between Alico, Inc. and John Kiernan (incorporated by reference to Exhibit 10.1 of the Company’s Form 8-K filed with the SEC on June 1, 2015)
10.32*		Separation and Consulting Agreement dated December 31, 2016 between Alico, Inc. and Clayton G. Wilson (incorporated by reference to Exhibit 10.1 of the Company’s Form 8-K filed with the SEC on January 4, 2017)
10.33*		Employment Agreement dated December 31, 2016 between Alico, Inc. and Remy W. Trafelet (incorporated by reference to Exhibit 10.2 of the Company’s Form 8-K filed with the SEC on January 4, 2017)
10.34*		Employment Agreement dated December 31, 2016 between Alico, Inc. and Henry R. Slack (incorporated by reference to Exhibit 10.3 of the Company’s Form 8-K filed with the SEC on January 4, 2017)
10.35*		Employment Agreement dated March 27, 2013 between Alico, Inc. and George R. Brokaw (incorporated by reference to Exhibit 10.4 of the Company’s Form 8-K filed with the SEC on January 4, 2017)
10.36*		Offer of Employment Letter dated June 16, 2017 between Richard Rallo and Alico, Inc. (incorporated by reference to Exhibit 10.1 of the Company’s Form 8-K filed with the SEC on August 7, 2017)
10.37*		Employment Agreement dated December 2, 2019 between Alico, Inc. and Richard Rallo
10.38		Supplement No. 1 dated as of September 30, 2016, to the Security Agreement dated as of December 1, 2014 by and among Alico, Inc., Alico-Agri, Ltd., Alico Plant World, L.L.C., Alico Fruit Company, LLC, Alico Land Development Inc., Alico Citrus Nursery, LLC and Rabo Agrifinance, LLC (f/k/a Rabo Agrifinance, Inc.) (incorporated by reference to Exhibit 10.35 of Alico's filing on Form 10-K dated December 6, 2016)

10.39		Third Amendment to Credit Agreement by and among Alico, Inc., Alico-Agri, Ltd., Alico Plant World, L.L.C., Alico Fruit Company, LLC, Alico Land Development Inc., Alico Citrus Nursery, LLC and Rabo Agrifinance, LLC (f/k/a Rabo Agrifinance, Inc.) dated September 30, 2016 (incorporated by reference to Exhibit 10.33 of Alico's filing on Form 10-K dated December 6, 2016)
10.40		Fourth Amendment to Credit Agreement by and among Alico, Inc., Alico-Agri, Ltd., Alico Plant World, L.L.C., Alico Fruit Company, LLC, Alico Land Development Inc., Alico Citrus Nursery, LLC and Rabo Agrifinance, LLC (f/k/a Rabo Agrifinance, Inc.) dated September 6, 2017 (incorporated by reference to Exhibit 10.38 of Alico's filing on Form 10-K dated December 11, 2017)
10.41		Fifth Amendment to Credit Agreement by and among Alico, Inc., Alico-Agri, Ltd., Alico Plant World, L.L.C., Alico Fruit Company, LLC, Alico Land Development Inc., Alico Citrus Nursery, LLC and Rabo Agrifinance, LLC (f/k/a Rabo Agrifinance, Inc.) dated October 30, 2017 (incorporated by reference to Exhibit 10.37 of Alico’s filing on Form 10-K dated December 6, 2018)
10.42		Sixth Amendment to Credit Agreement by and among Alico, Inc., Alico-Agri, Ltd., Alico Plant World, L.L.C., Alico Fruit Company, LLC, Alico Land Development Inc., Alico Citrus Nursery, LLC and Rabo Agrifinance, LLC (f/k/a Rabo Agrifinance, Inc.) dated July 18, 2018 (incorporated by reference to Exhibit 10.38 of Alico’s filing on Form 10-K dated December 6, 2018)
10.43		Seventh Amendment to Credit Agreement by and among Alico, Inc., Alico-Agri, Ltd., Alico Plant World, L.L.C., Alico Fruit Company, LLC, Alico Land Development Inc., Alico Citrus Nursery, LLC and Rabo Agrifinance, LLC (f/k/a Rabo Agrifinance, Inc.) dated September 26, 2018 (incorporated by reference to Exhibit 10.39 of Alico’s filing on Form 10-K dated December 6, 2018)
10.44		Eighth Amendment to Credit Agreement by and among Alico, Inc., Alico-Agri, Ltd., Alico Plant World, L.L.C., Alico Fruit Company, LLC, Alico Land Development Inc., Alico Citrus Nursery, LLC and Rabo Agrifinance, LLC (f/k/a Rabo Agrifinance, Inc.) dated August 29, 2019
10.45		Settlement Agreement and Release, dated as of February 11, 2019, by and among Alico, Inc., George R. Brokaw, R. Greg Eisner, Benjamin D. Fishman, W. Andrew Krusen, Henry R. Slack, Remy W. Trafelet , 734 Agriculture, LLC, RCF 2014 Legacy LLC and Delta Offshore Master II, LTD (incorporated by reference to Exhibit 10.1 to the Current Report on Form 8-K filed with the SEC on February 11, 2019.)
10.46		Registration Rights Agreement, dated as of February 11, 2019, by and between Alico, Inc. and Remy W. Trafelet (incorporated by reference from Exhibit C to Exhibit 10.1 to the Current Report on Form 8-K filed with the SEC on February 11, 2019).
10.47		Consulting Agreement, dated as of February 11, 2019, by and among Alico, Inc., 3584 Inc., and Remy W. Trafelet (incorporated by reference from Exhibit B to Exhibit 10.1 to the Current Report on Form 8-K filed with the SEC on February 11, 2019).
10.48	*	Alico, Inc. Stock Incentive Plan of 2015 (incorporated by reference from Appendix A to the Company’s Definitive Proxy Statement on Schedule 14A filed with the SEC on January 28, 2015).
21.0		Subsidiaries of the Registrant
23.0		Consent of Independent Registered Public Accounting Firm
31.1		Certification of Principal Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 Rule 13a-14(a) certification
31.2		Certification of Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 Rule 13a-14(a) certification
32.1		Certification of Principal Executive Officer pursuant to 18 U.S.C. Section 1350
32.2		Certification of Chief Financial Officer pursuant to 18 U.S.C. Section 1350
101
101.INS	**	XBRL Instance Document
101.SCH	**	XBRL Taxonomy Extension Schema Document
101.CAL	**	XBRL Taxonomy Calculation Linkbase Document
101.DEF	**	XBRL Taxonomy Definition Linkbase Document
101.LAB		XBRL Taxonomy Label Linkbase Document
101.PRE		XBRL Taxonomy Extension Presentation Linkbase Document
*	Denotes a management contract or compensatory plan, contract or arrangement.

**	In accordance with Rule 406T of Regulation S-T, these XBRL (eXtensible Business Reporting Language) documents are furnished and not filed or a part of a registration statement or prospectus for purposes of Sections 11 or 12 of the Securities Act of 1933 or Section 18 of the Securities Exchange Act of 1934 and otherwise are not subject to liability under these sections.
***	Certain schedules and exhibits have been omitted from this filing pursuant to Item 601(b) (2) of Regulation S-K.  The Company will furnish supplemental copies of any such schedules or exhibits to the SEC upon request.

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

		ALICO, INC. (Registrant)
December 5, 20198, 2020		By:	/s/ John E. Kiernan
			John E. Kiernan
			President and Chief Executive Officer (Principal Executive Officer)

Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the date indicated:

December 5, 20198, 2020	President and Chief Executive Officer (Principal Executive Officer)	/s/ John E. Kiernan
		John E. Kiernan

December 8, 2020
December 5, 2019	Senior Vice President and Chief Financial Officer (Principal Financial and Accounting Officer)	/s/ Richard Rallo
		Richard Rallo

December 8, 2020	Director: Executive Chairman	/s/ Benjamin D. Fishman
		Benjamin D. Fishman

December 5, 20198, 2020	Director: Executive Chairman Director	/s/ Benjamin D. FishmanGeorge R. Brokaw
		Benjamin D. Fishman George R. Brokaw

December 5, 20198, 2020	Director	/s/ George R. Brokaw Greg Eisner
		George R. BrokawGreg Eisner

December 5, 20198, 2020	Director	/s/ Henry R. Greg Eisner Slack
		Henry R. Greg EisnerSlack

December 5, 20198, 2020	Director	/s/ Henry R. SlackW. Andrew Krusen
		Henry R. Slack W. Andrew Krusen

December 5, 20198, 2020	Director	/s/ W. Andrew Krusen
		W. Andrew Krusen

December 5, 2019	Director	/s/ Toby K. Purse
		Toby K. Purse
December 8, 2020	Director	/s/ Katherine English
		Katherine English
December 8, 2020	Director	/s/ Adam Putnam
		Adam Putnam

89

82