Segment Reporting

12 Months Ended

Dec. 31, 2011

Segment Reporting [Abstract]

Segment Reporting

SEGMENT REPORTING:

PICO Holdings, Inc. is a diversified holding company. The goal of the Company is to build and operate businesses where significant value can be created from the development of unique assets, and to acquire businesses which have been identified as undervalued and where its participation can aid in the recognition of the business's fair value. The Company accounts for its segments consistent with the significant accounting policies described in Note 1.

During the year ended December 31, 2011, the insurance in run off segment paid a dividend to the corporate segment, consisting of cash, a publicly traded equity security, and a subsidiary holding various investments in publicly traded equity securities, changing the composition of both segments. As a result, all prior period segment results, including total assets, revenues, and income or loss before taxes for the insurance in run off segment and corporate segment have been restated to reflect the change in the segment composition as of the beginning of the earliest period presented in this report.

Currently, the major businesses that constitute operating and reportable segments are owning and developing water resources and water storage operations through Vidler; owning and developing real estate through UCP; “running off” the property and casualty and workers’ compensation loss reserves of Citation and the medical professional liability loss reserves of Physicians; building and operating a canola oil processing plant through Northstar, and the acquisition and financing of businesses.

Segment performance is measured by revenues and segment profit before income tax.  In addition, assets identifiable with segments are disclosed as well as capital expenditures, and depreciation and amortization.  The Company has operations and investments both in the U.S. and abroad.  Information by geographic region is based upon the location of the subsidiary.  Consequently, international revenues in the segment information by significant geographic region are revenues earned by the foreign subsidiary.

Water Resources and Water Storage Operations

Vidler is engaged in the following water resources and water storage activities:

• The development of water for end-users in the southwestern United States, namely water utilities, municipalities, developers, or industrial users.  Typically, the source of water is from identifying and developing a new water supply, or a change in the use of an existing water supply from agricultural to municipal and industrial; and

• The construction and development of water storage facilities for the purchase and recharge of water for resale in future periods, and distribution infrastructure to more efficiently use existing and new supplies of water.

Real Estate Operations

PICO is engaged in real estate development operations through its subsidiary UCP, which operates primarily in California.  Until the final sale in fourth quarter of 2011, the segment results included sales of real estate from Nevada Land and Resource Company, which sold real estate in Nevada. The final acres of real estate owned were sold for $31 million. The ongoing revenues will be primarily from sales in UCP, although the Company does have other real estate holdings that could be sold from time to time.

Insurance Operations in Run Off

This segment is composed of Physicians and Citation.  In this segment, revenues come from investment holdings of the insurance companies.  Investments directly related to the insurance operations are included within those segments.  As expected during run-off, the majority of revenues is net investment income and realized gains.

Until 1995, Physicians and its subsidiaries wrote medical professional liability insurance, primarily in the state of Ohio.  The Company ceased writing new business and is in “run off.”  Run off means that the company is processing claims arising from historical business, and selling investments when funds are needed to pay claims.  Citation wrote commercial property and casualty insurance in California and Arizona and workers’ compensation insurance in California.  Citation ceded all its workers’ compensation business in 1997, and ceased writing property and casualty business in December 2000 and is also in run off.

Corporate

This segment consists of cash and fixed-income securities, a 30% equity interest in Spigit, deferred compensation assets and liabilities held in trust for the benefit of several officers and non-employee directors of the Company, and other parent company assets and liabilities.

The Company seeks to acquire businesses and interests in businesses which are undervalued based on fundamental analysis, that is, the assessment of what the business is worth, based on the private market value of its assets, earnings, and cash flow.  Typically, the business will be generating free cash flow and have a low level of debt, or, alternatively, strong interest coverage ratios or the ability to realize surplus assets.  As well as being undervalued, the business must have special qualities such as unique assets, a potential catalyst for change, or be in an industry with attractive economics.  The Company also acquires businesses and interests in businesses where there is significant unrecognized value in land and other tangible assets.

Agribusiness Operations

This segment is comprised of the 88% interest in the operations of Northstar. Northstar's business is to construct and operate a canola seed processing plant near Hallock, Minnesota.  It is anticipated that construction will be complete, and that the plant will commence production of canola oil and canola meal, in the third quarter of 2012. The plant will have initial crushing capacity of 1,000 tons per day.  Pending the completion of additional environmental permitting, it is estimated that the capacity can be increased to 1,500 tons per day at a cost of approximately $10.5 million.

During 2011 and 2010, the segment reported a loss from expenses and no operational revenues as the plant is still being built. The expenses represent primarily salaries and benefits, various overhead and other miscellaneous expenses for personnel.

Segment information by major operating segment follows (in thousands):

	Real Estate Operations			Water Resources and Water Storage Operations			Insurance Operations in Run Off			Corporate			Agribusiness Operations			Consolidated
2011
Total revenues	$	57,085		$	1,349		$	20,313		$	6,395		$	9		$	85,151
Net investment income	$	483		$	169		$	1,136		$	2,352		$	2		$	4,142
Depreciation and amortization	$	36		$	1,182		$	20		$	216		$	10		$	1,464
Income (loss) before income taxes	$	3,550		$	(22,231	)	$	18,973		$	(10,553	)	$	(5,424	)	$	(15,685	)
Equity in loss of unconsolidated affiliate										$	(5,293	)				$	(5,293	)
Total assets	$	131,788		$	207,385		$	88,048		$	134,266		$	122,664		$	684,151
Capital expenditure	$	99		$	230					$	508		$	91,031		$	91,868
2010
Total revenues	$	5,284		$	3,066		$	10,627		$	13,197					$	32,174
Net investment income	$	774		$	688		$	1,764		$	3,367					$	6,593
Depreciation and amortization	$	59		$	1,168		$	4		$	124					$	1,355
Income (loss) before income taxes	$	(3,340	)	$	(18,240	)	$	8,817		$	(7,075	)				$	(19,838	)
Equity in loss of unconsolidated affiliate										$	(3,717	)				$	(3,717	)
Total assets	$	146,897		$	226,496		$	114,872		$	125,789		$	78,448		$	692,502
Capital expenditure	$	113		$	399		$	3		$	521		$	5,838		$	6,874
2009
Total revenues (charges)	$	12,436		$	4,334		$	(3,225	)	$	2,487					$	16,032
Net investment income	$	960		$	408		$	1,626		$	2,945					$	5,939
Depreciation and amortization	$	43		$	1,076		$	3		$	168					$	1,290
Loss before income taxes	$	(1,156	)	$	(16,850	)	$	(3,214	)	$	(19,522	)				$	(40,742	)
Equity in loss of unconsolidated affiliate										$	(277	)				$	(277	)
Total assets	$	149,217		$	207,565		$	114,875		$	215,960					$	687,617
Capital expenditure	$	61		$	325		$	21		$	43					$	450

Segment information by significant geographic region (in thousands):

	United States			Europe			Consolidated
2011
Total revenues	$	85,151					$	85,151
Net investment income	$	4,142					$	4,142
Loss before income taxes	$	(15,685	)				$	(15,685	)
Long-lived assets	$	442,684					$	442,684
2010
Total revenues	$	32,173		$	1		$	32,174
Net investment income	$	6,593					$	6,593
Loss before income taxes	$	(19,735	)	$	(103	)	$	(19,838	)
Long-lived assets	$	368,160					$	368,160
2009
Total revenues	$	16,013		$	19		$	16,032
Net investment income	$	5,933		$	6		$	5,939
Income (loss) before income taxes	$	(40,590	)	$	(152	)	$	(40,742	)
Long-lived assets	$	301,161					$	301,161