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Operating Leases

6 Months Ended

Jan. 31, 2020

Operating Leases

Lessor

The Company leases office and retail space to tenants under operating leases in commercial buildings. The rental terms range from approximately 5 to 49 years. The leases provide for the payment of fixed base rent payable monthly in advance as well as reimbursements of real estate taxes and common area costs. The Company has elected to account for lease revenues and the reimbursements of common area costs as a single component included as rental income in our condensed consolidated statements of operations and retained earnings.

The following table disaggregates the Company's revenues by lease and non-lease components:

	Three Months Ended				Six Months Ended
	January 31				January 31
	2020		2019		2020		2019
Base rent - fixed	$	4,515,930	$	4,776,605	$	9,052,029	$	9,475,490
Reimbursements of common area costs		163,775		199,485		313,435		364,073
Non-lease components (real estate taxes)		359,355		300,609		709,511		598,308
Rental income	$	5,039,060	$	5,276,699	$	10,074,975	$	10,437,871

	Future minimum non-cancelable rental income for leases with initial or remainint terms of one year or more is as follows:

	Under ASC 842
	As of January 31, 2020
	Company
	Owned		Leased
Fiscal Year	Property		Property		Total
For the remainder of 2020	$	5,019,356	$	3,060,142	$	8,079,498
2021		9,521,380		5,009,044		14,530,424
2022		7,878,165		4,039,069		11,917,234
2023		7,399,288		3,270,666		10,669,954
2024		6,483,940		2,987,050		9,470,990
2025		7,727,830		2,409,346		10,137,176
After 2025		44,904,996		12,433,194		57,338,190
Total	$	88,934,955	$	33,208,511	$	122,143,466

	Under ASC 840
	As of July 31, 2019
	Company
	Owned		Leased
Fiscal Year	Property		Property		Total
2020	$	10,038,712	$	6,120,283	$	16,158,995
2021		9,521,380		5,009,044		14,530,424
2022		7,878,165		4,039,069		11,917,234
2023		7,399,288		3,270,666		10,669,954
2024		6,483,940		2,987,050		9,470,990
After 2024		52,632,826		14,842,540		67,475,366
Total	$	93,954,311	$	36,268,652	$	130,222,963

Lessee

The Company’s real estate operations include leased properties under long-term, non-cancelable operating lease agreements. The leases expire at various dates through 2073, including options to extend or terminate the lease when it is reasonably certain the Company will exercise that option. Certain leases provide for increases in future minimum annual rental payments as defined in the lease agreements.

Operating lease costs for leased real property was exceeded by sublease rental income from the Company’s real estate operations as follows:

	Three Months Ended			Six Months Ended
	January 31, 2020			January 31, 2020
Sublease income	$	1,766,609		$	3,521,861
Operating lease cost		(760,191	)		(1,510,057	)
Excess of sublease income over lease cost	$	1,006,418		$	2,011,804


	The following is a maturity analysis of the annual undiscounted cash flows of the operating lease liabilities as of January 31, 2020:

January 31, 2020	$	1,954,899
January 31, 2021		2,066,205
January 31, 2022		2,100,129
January 31, 2023		2,116,031
January 31, 2024		2,134,695
Thereafter		14,420,464
Total undiscounted cash flows		24,792,423
Less: present value discount		(5,253,894	)
Total Lease Liabilities	$	19,538,529

Other information:
Operating cash flows from operating leases	$	950,809
Weighted-average remaining lease term - operating leases		12.16 years
Weighted-average discount rate - operating leases		3.90	%


	The following table represents future minimum lease payments under non-cancelable operating leases at July 31, 2019 as presented in the Company's Annual Report on Form 10-K:

	Operating
Fiscal Year	Leases
2020	$	1,897,318
2021		1,941,494
2022		2,057,814
2023		2,072,000
2024		2,086,697
After 2024		11,701,293
Total required*	$	21,756,616


	* Minimum payments have not been reduced by minimum sublease rentals of $36,268,652 under operating leases due in the future under non-cancelable leases.

Rent payments related to an affiliate principally owned by a director of the Company totaled $246,812 and $493,624 for the three and six months, respectively, for each of the periods ending January 31, 2020 and 2019. The rental payments are for two leases which expire May 31, 2029 and April 30, 2031, respectively.