Quarterly report pursuant to Section 13 or 15(d)

INVESTMENTS IN WATER, WATER SYSTEMS, LAND AND IMPROVEMENTS

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INVESTMENTS IN WATER, WATER SYSTEMS, LAND AND IMPROVEMENTS
 3 Months Ended
Nov. 30, 2013
Investments In Water Water Systems Land And Improvements  
INVESTMENTS IN WATER, WATER SYSTEMS, LAND AND IMPROVEMENTS

NOTE 3 – INVESTMENTS IN WATER, WATER SYSTEMS, LAND AND IMPROVEMENTS

 

The Company’s water rights and current water and wastewater service agreements are more fully described in Note 4 – Water Assets to the 2013 Annual Report. There have been no significant changes to the Company’s water rights or water and wastewater service agreements during the three months ended November 30, 2013.

  

The Company’s water, water systems, land and improvements consist of the following costs and accumulated depreciation and depletion at November 30, 2013 and August 31, 2013:

 

 

    November 30, 2013   August 31, 2013
    Costs   Accumulated Depreciation and Depletion   Costs   Accumulated Depreciation and Depletion
Arkansas River Valley assets   $ 69,112,300     $ (1,488,600 )   $ 69,112,300     $ (1,487,700 )
Rangeview water supply     14,515,700       (7,800 )     14,667,000       (7,700 )
Sky Ranch water rights and other costs     3,929,300       (87,100 )     3,915,100       (79,800 )
Fairgrounds water and water system     2,899,900       (644,600 )     2,899,900       (622,600 )
Rangeview water system     167,700       (74,000 )     167,700       (72,800 )
Water supply – other     655,900       (34,400 )     43,200       (22,400 )
Totals     91,280,800       (2,336,500 )     90,805,200       (2,293,000 )
Net investments in water and water systems   $ 88,944,300             $ 88,512,200          

 

Capitalized terms in this section not defined herein are defined in Note 4 – Water Assets to the 2013 Annual Report.

 

Depletion and Depreciation. The Company recorded $100 of depletion charges during each of the three month periods ended November 30, 2013 and 2012, respectively. This related entirely to the Rangeview Water Supply. No depletion is taken against the Arkansas River water or Sky Ranch Water Supply because the water located at these locations is not yet being utilized for its intended purpose as of November 30, 2013.

 

The Company recorded $48,500 and $77,600 of depreciation expense during the three months ended November 30, 2013 and 2012, respectively.

 

Land and Water Shares Held for Sale. During fiscal 2012, management decided to sell certain farms in order to have cash flows sufficient to acquire the notes defaulted upon by HP A&M and to meet the future obligations on the promissory notes the Company issued to purchase the defaulted notes owed by HP A&M. The Company has entered into agreements to sell 1,603 acres of land along with 3,397 FLCC shares associated with this land. The assets held for sale total $5.7 million, which is the lower of cost or fair value less cost to sell.