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. Annual costs associated with these contracts are expensed each quarter.

Purchased water assets consist of the following:



(in acre feet)	March 31, 2013	December 31, 2012
Banked water and water for future delivery
AVEK water bank	11,616	11,478
Company water bank	8,818	8,700
AVEK water for future delivery	2,362	2,362
Total Company and AVEK banked water	22,796	22,540
Transferable Water with AVEK	14,786	14,786
SWP contracts	3,444	3,444
Total purchased water - third parties	41,026	40,770
WRMWSD - Contracts with Company	15,547	15,547
TCWD - Contracts with Company	5,278	5,278
TCWD - Banked water contracted to Company	38,945	38,945
Total purchased and contracted water sources in acre feet	100,796	100,540



($ in thousands)	March 31, 2013			December 31, 2012
Banked water and water for future delivery - Company and AVEK	$	4,492		$	4,448
Transferable water	8,988			8,988
SWP Contracts (net of accumulated amortization of $2,198 and $2,021 at March 31, 2013 and December 31 2012, respectively)	15,737			15,837
Total water assets	29,217			29,273
Less: current portion	(708		)	(708		)
Long-term water assets	$	28,509		$	28,565