LONG TERM WATER ASSETS

Long term assets consist of water and water contracts held for future use or sale. The water is held at cost which includes the price paid for the water and the cost to pump and deliver the water from the California aqueduct into the water bank. Water is currently held in a water bank on Company land in southern Kern County. Company banked water costs also include costs related to the right to receive additional acre feet of water in the future from the Antelope Valley East Kern Water Agency, or AVEK. The Company has also banked water within an AVEK owned water bank.

The Company also owns additional transferable water as well as holding State Water Project, or SWP contracts with the Tulare Water Storage and Dudley-Ridge Water Storage Districts to supply water through 2035. These contracts are being amortized using the straight line method over that period. Annual amortization for the next five years will be $708,000 per year. Water contracts with the Wheeler Ridge Maricopa Water Storage District, or WRMWSD, and the Tejon-Castac Water District, or TCWD, are also in place, but were entered into with each district at inception of the contract and not purchased later from third parties, and do not have a related financial value on the books of the Company. Therefore there is no amortization expense related to these contracts. Water assets consist of the following:



(in acre feet, unaudited)	December 31, 2012	December 31, 2011
Banked water and water for future delivery
AVEK Water Bank	11,478	8,900
Company Water Bank	8,700	6,700
AVEK water for future delivery	2,362	2,362
	22,540	17,962
Transferable water	14,786	14,786
SWP Contracts	3,444	3,444
	40,770	36,192



($ in thousands)	December 31, 2012			December 31, 2011
Banked water and water for future delivery	$	4,448		$	3,546
Transferable water	8,988			8,988
SWP Contracts (net of accumulated amortization of $2,021 and $1,317 at December 31, 2012 and December 2011, respectively)	15,837			16,510
Total long-term assets	29,273			29,044
less: Current portion	(708		)	(708		)
	$	28,565		$	28,336