CKX LANDS, INC. - Quarter Report: 2011 September (Form 10-Q)

FORM 10-Q

 

x

QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

 

 

Louisiana		72-0144530
(State or other jurisdiction of		(I.R.S. Employer Identification No.)
incorporation or organization)
700 Pujo Street, Suite 200
Lake Charles, LA		70601
(Address of principal executive offices)		(Zip Code)

 

 

 

 

Part I.   Financial Information				Page
Item 1.		Financial Statements
	a.	Balance Sheets as of September 30, 2011 and December 31, 2010 (Unaudited)		1
	b.	Statements of Income for the quarter and nine months ended September 30, 2011 and 2010 (Unaudited)		2
	c.	Statements of Changes in Stockholders’ Equity for the nine months ended September 30, 2011 and 2010 (Unaudited)		3
	d.	Statements of Cash Flows for the nine months ended September 30, 2011 and 2010 (Unaudited)		4
	e.	Notes to Financial Statements (Unaudited)		5-6
Item 2.		Management’s Discussion and Analysis of Financial Condition and Results of Operations		7-8
Item 4.		Controls and Procedures		8
Part II.   Other Information
Item 6.		Exhibits		9
		Signature		10

 

Part I – Financial Information

 

Item 1.

FINANCIAL STATEMENTS

 

		2011				2010
Assets
Current Assets:
Cash and cash equivalents		$	4,933,135			$	5,182,316
Certificates of deposit			735,625				240,000
Accounts receivable			235,539				149,795
Prepaid expense and other assets			125,026				114,232
Total current assets			6,029,325				5,686,343
Securities available for sale			--				783,772
Certificates of deposit			480,000				250,000
Property and equipment:
Building and equipment less accumulated depreciation of $78,257 and $72,794, respectively			12,380				17,193
Timber less accumulated depletion of $678,609 and $632,565, respectively			775,884				557,253
Land			3,526,288				3,192,491
Total property and equipment, net			4,314,552				3,766,937
Total assets		$	10,823,877			$	10,487,052
Liabilities and Stockholders’ Equity
Current Liabilities:
Trade payables and accrued expenses		$	68,855			$	58,520
Income tax payable:
Current			85,972				469
Deferred			--				--
Total current liabilities			154,827				58,989
Noncurrent Liabilities:
Deferred income tax payable			181,818				181,818
Total liabilities			336,645				240,807
Stockholders’ Equity:
Common stock, no par value: 3,000,000 shares authorized; 2,100,000 shares issued			72,256				72,256
Retained earnings			10,790,492				10,543,924
Accumulated other comprehensive income			--				5,581
Less cost of treasury stock (157,505 shares)			(375,516	)			(375,516	)
Total stockholders’ equity			10,487,232				10,246,245
Total liabilities and stockholders’ equity		$	10,823,877			$	10,487,052

 

		Quarter Ended September 30,								Nine Months Ended September 30,
		2011				2010				2011				2010
Revenues:
Oil and gas		$	565,573			$	287,867			$	1,200,186			$	1,028,629
Timber			83,193				18,717				86,632				132,842
Agriculture			22,124				26,408				46,588				69,975
Total revenues			670,890				332,992				1,333,406				1,231,446
Costs and Expenses:
Oil and gas			38,794				25,807				90,208				81,541
Timber			17,778				3,374				32,414				14,067
Agriculture			2,258				1,542				5,220				6,323
General and administrative			99,712				98,769				319,387				301,317
Depreciation and depletion			30,210				25,047				51,507				94,292
Total cost and expenses			188,752				154,539				498,736				497,540
Income from operations			482,138				178,453				834,670				733,906
Other Income / (Expense):
Interest income			9,817				9,797				30,286				28,190
Dividend income			3,854				10,403				13,381				35,700
Gain/(Loss) on securities available-for-sale			10,688				(42,341	)			10,688				(13,814	)
Gain on sale of land and other assets			--				--				306				255
Net other income / (expense)			24,359				(22,141	)			54,661				50,331
Income before income taxes			506,497				156,312				889,331				784,237
Federal and state income taxes:
Current			160,247				32,199				259,779				222,747
Deferred			863				(2,579	)			(11,565	)			(17,909	)
Total income taxes			161,110				29,620				248,214				204,838
Net Income		$	345,387			$	126,692			$	641,117			$	579,399
Per Common Stock (1,942,495 shares):
Net Income		$	0.18			$	0.07			$	0.33			$	0.30
Dividends		$	0.07			$	0.07			$	0.21			$	0.21

 

 

 

 

 

 

		2011				2010
Cash Flows From Operating Activities:
Net Income		$	641,117			$	579,399
Less non-cash (income) expenses included in net income:
Depreciation, depletion and amortization			51,507				94,292
Deferred income tax expense			(11,565	)			(17,909	)
Less non-operating activities:
Unrealized (gain) loss on securities			--				--
(Gain) loss from securities sales			--				13,814
Gain from sale of land and other assets			(306	)			(255	)
Change in operating assets and liabilities:
(Increase) decrease in current assets			7,724				(12,880	)
Increase (decrease) in current liabilities			11,551				19,945
Net cash provided from operating activities			700,028				676,406
Cash Flows From Investing Activities:
Certificates of Deposit:
Maturity proceeds			--				480,000
Purchases			(725,625	)			(250,000	)
Securities:
Sales proceeds			787,841				199,053
Purchases			(12,560	)			(312,174	)
Proceeds from dissolution of partnership			--				255
Land, timber, equipment and other assets:
Sales proceeds			167				--
Purchases			(604,483	)			(601,079	)
Net cash provided from (used in) investing activities			(554,660	)			(483,945	)
Cash Flows From Financing Activities:
Dividends paid, net of reversion			(394,549	)			(407,924	)
Net cash used in financing activities			(394,549	)			(407,924	)
Net increase (decrease) in cash and cash equivalents			(249,181	)			(215,463	)
Cash and cash equivalents:
Beginning			5,182,316				3,977,106
Ending		$	4,933,135			$	3,761,643
Supplemental disclosures of cash flow information:
Cash payments for:
Interest		$	--			$	--
Income taxes		$	139,660			$	212,500
Supplemental schedule of non-cash investing and financing activities:
Net change in recognized and unrecognized unrealized gains (losses) on available-for-sale securities		$	(9,302	)		$	96,525

 

 

 

 

 

 

 

 

 

		Nine Months Ended 09/30/11				Nine Months Ended 09/30/10
Net gas produced (MCF)			48,372				49,430
Average gas sales price (per MCF)(1)		$	5.05			$	5.57
Net oil produced (Bbl)(2)			7,279				8,657
Average oil sales price (per Bbl)(1,2)		$	103.15			$	67.36

 

Notes to above schedule:

(1) Before deduction of production and severance taxes.

(2) Excludes plant products.

 

 

Revenues from oil and gas provide most of the Company’s income.  All of these revenues come from wells operated by other companies from property belonging to CKX Lands, Inc.  Consequently, these revenues fluctuate due to changes in oil and gas prices and changes in the operations of the other companies.

 

Item 3.

Not applicable.

 

Item 4.

CONTROLS AND PROCEDURES

 

 

 

 

Item 1 – 5.

Not Applicable

 

Item 6.

EXHIBITS

 

3.1

Restated/Articles of Incorporation of the Registrant are incorporated by reference to Exhibit (3)-1 to Form 10 filed April 29, 1981.

3.2

Amendment to Articles of Incorporation of the Registrant is incorporated by reference to Exhibit (3.2) to Form 10-K for year ended December 31, 2003.

3.3

By-Laws of the Registrant are incorporated by reference to Exhibit (3.3) to Form 10-K for year ended December 31, 2003.

10.1

Contract to Purchase and Sell approximately 3,495 acres in Cameron Parish, Louisiana effective July 3, 2007 is incorporated by reference to Exhibit (10) to Form 10-QSB filed August 13, 2007.

10.2

Contract to purchase eight separate tracts of land, 800 acres, all of which are located in Beauregard Parish, Louisiana effective October 7, 2011.

31.1

Certification of Joseph K. Cooper, President and Chief Executive Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 filed herewith.

31.2

Certification of Brian R. Jones, Treasurer and Chief Financial Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 filed herewith.

32

Certifications of Chief Executive Officer and Chief Financial Officer Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 filed herewith.

 

101.INS**

XBRL Instance

 

101.SCH**

XBRL Taxonomy Extension Schema

 

101.CAL**

XBRL Taxonomy Extension Calculation

 

101.DEF**

XBRL Taxonomy Extension Definition

 

101.LAB**

XBRL Taxonomy Extension Labels

 

101.PRE**

XBRL Taxonomy Extension Presentation

 

 

 

 

		CKX Lands, Inc.
Date: November 10, 2011		/s/ Joseph K. Cooper
		Joseph K. Cooper
		President and Chief Executive Officer

Date: November 10, 2011		/s/ Brian R. Jones
		Brian R. Jones
		Treasurer and Chief Financial Officer