Document and Entity Information
Document and Entity Information - shares | 9 Months Ended | |
Sep. 30, 2016 | Oct. 28, 2016 | |
Document and Entity Information [Abstract] | ||
Entity Registrant Name | PICO HOLDINGS INC /NEW | |
Entity Central Index Key | 830,122 | |
Current Fiscal Year End Date | --12-31 | |
Entity Filer Category | Accelerated Filer | |
Entity Common Stock, Shares Outstanding | 23,069,381 | |
Document Fiscal Year Focus | 2,016 | |
Document Fiscal Period Focus | Q3 | |
Document Type | 10-Q | |
Amendment Flag | false | |
Document Period End Date | Sep. 30, 2016 |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets - Unaudited - USD ($) $ in Thousands | Sep. 30, 2016 | Dec. 31, 2015 |
Assets | ||
Cash and cash equivalents | $ 37,953 | $ 56,462 |
Investments ($24,870 and $22,590 measured at fair value at September 30, 2016 and December 31, 2015, respectively) | 28,352 | 26,072 |
Real estate and tangible water assets, net | 439,401 | 424,235 |
Intangible assets, net | 126,919 | 126,533 |
Other assets | 16,996 | 19,990 |
Assets held-for-sale | 10,900 | 8,793 |
Total assets | 660,521 | 662,085 |
Liabilities and equity | ||
Debt | 157,785 | 155,966 |
Accounts payable and accrued expenses | 36,553 | 34,458 |
Deferred compensation | 26,744 | 25,493 |
Other liabilities | 13,193 | 11,556 |
Liabilities held-for-sale | 903 | 608 |
Total liabilities | 235,178 | 228,081 |
Commitments and contingencies | ||
Common stock, $0.001 par value; authorized 100,000 shares, 23,125 issued and 23,069 outstanding at September 30, 2016, and 23,116 issued and 23,038 outstanding at December 31, 2015 | 23 | 23 |
Additional paid-in capital | 493,744 | 494,207 |
Accumulated deficit | (164,466) | (151,366) |
Accumulated other comprehensive income | 6,502 | 4,961 |
Treasury stock, at cost (common shares: 55 and 78 at September 30, 2016 and December 31, 2015, respectively) | (927) | (1,413) |
Total PICO Holdings, Inc. shareholders’ equity | 334,876 | 346,412 |
Noncontrolling interest in subsidiaries | 90,467 | 87,592 |
Total equity | 425,343 | 434,004 |
Total liabilities and equity | $ 660,521 | $ 662,085 |
Condensed Consolidated Balance3
Condensed Consolidated Balance Sheets - Unaudited (Parentheticals) - USD ($) $ in Thousands | Sep. 30, 2016 | Dec. 31, 2015 |
Liabilities and equity | ||
Investments at fair value | $ 24,870 | $ 22,590 |
Common stock, par value (in dollars per share) | $ 0.001 | $ 0.001 |
Common stock, shares authorized (in shares) | 100,000,000 | 100,000,000 |
Common stock, shares issued (in shares) | 23,125,000 | 23,116,000 |
Common stock, shares outstanding (in shares) | 23,070,000 | 23,038,000 |
Treasury stock, common shares held (in shares) | 55,000 | 78,000 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Operations and Comprehensive Income or Loss - Unaudited - USD ($) shares in Thousands, $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2016 | Sep. 30, 2015 | Sep. 30, 2016 | Sep. 30, 2015 | |
Revenues and other income: | ||||
Sale of real estate and water assets | $ 95,816 | $ 77,044 | $ 247,009 | $ 175,718 |
Impairment loss on investment in unconsolidated affiliate | (20,696) | |||
Other income, net | 892 | 1,047 | 2,445 | 3,501 |
Total revenues and other income | 96,708 | 78,091 | 249,454 | 158,523 |
Cost of sales and expenses: | ||||
Cost of real estate and water assets sold | 78,977 | 60,626 | 202,157 | 142,566 |
General, administrative, and other | 10,098 | 10,168 | 34,867 | 33,661 |
Sales and marketing | 4,963 | 4,818 | 14,061 | 13,373 |
Impairment loss on intangible and long-lived assets | 4,615 | 727 | 7,012 | 2,090 |
Depreciation and amortization | 302 | 653 | 1,193 | 1,649 |
Total cost of sales and expenses | 98,955 | 76,992 | 259,290 | 193,339 |
Income (loss) from continuing operations before income taxes and equity in loss of unconsolidated affiliates | (2,247) | 1,099 | (9,836) | (34,816) |
Benefit (provision) for federal and state income taxes | 406 | (22) | 372 | 2,949 |
Equity in loss of unconsolidated affiliate | (1,942) | (3,422) | ||
Loss from continuing operations | (1,841) | (865) | (9,464) | (35,289) |
Loss from discontinued agribusiness operations, net of tax | (18) | (10,225) | (102) | (29,520) |
Income (loss) on sale of discontinued agribusiness operations, net of tax | 2 | (1,348) | (1,858) | (18,251) |
Net loss from discontinued agribusiness operations, net of tax | (16) | (11,573) | (1,960) | (47,771) |
Net loss | (1,857) | (12,438) | (11,424) | (83,060) |
Net (income) loss attributable to noncontrolling interests | (1,043) | (1,654) | (1,676) | 2,373 |
Net loss attributable to PICO Holdings, Inc. | (2,900) | (14,092) | (13,100) | (80,687) |
Other comprehensive loss: | ||||
Net loss | (1,857) | (12,438) | (11,424) | (83,060) |
Unrealized gain on securities, net of deferred income tax and reclassification adjustments | 954 | 12 | 1,484 | 295 |
Foreign currency translation | 31 | (48) | 57 | (85) |
Total other comprehensive income (loss), net of tax | 985 | (36) | 1,541 | 210 |
Comprehensive loss | (872) | (12,474) | (9,883) | (82,850) |
Comprehensive (income) loss attributable to noncontrolling interests | (1,043) | (1,654) | (1,676) | 2,373 |
Comprehensive loss attributable to PICO Holdings, Inc. | $ (1,915) | $ (14,128) | $ (11,559) | $ (80,477) |
Net loss per common share – basic and diluted: | ||||
Loss from continuing operations ($ per share) | $ (0.13) | $ (0.11) | $ (0.48) | $ (1.51) |
Loss from discontinued agribusiness operations ($ per share) | (0.50) | (0.09) | (2) | |
Net loss per common share – basic and diluted ($ per share) | $ (0.13) | $ (0.61) | $ (0.57) | $ (3.51) |
Weighted average shares outstanding (number of shares) | 23,068 | 23,017 | 23,049 | 23,010 |
Condensed Consolidated Stateme5
Condensed Consolidated Statements of Shareholders' Equity - Unaudited - USD ($) shares in Thousands, $ in Thousands | Total | Common Stock | Additional Paid-in Capital | Accumulated Deficit | Accumulated Other Comprehensive Income | Treasury Stock | Noncontrolling Interest |
Beginning balance (shares) at Dec. 31, 2014 | 23,083 | ||||||
Beginning balance at Dec. 31, 2014 | $ 511,545 | $ 23 | $ 491,662 | $ (69,508) | $ 4,717 | $ (1,413) | $ 86,064 |
Beginning balance, treasury stock (shares) at Dec. 31, 2014 | 78 | ||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||
Stock-based compensation expense | 3,053 | 2,379 | 674 | ||||
Exercise of restricted stock units (shares) | 12 | ||||||
Withholding taxes paid on vested restricted stock units at UCP, Inc. | (370) | (211) | (159) | ||||
Distribution to noncontrolling interest | (16) | (16) | |||||
Net loss | (83,060) | (80,687) | (2,373) | ||||
Unrealized gain on investments, net of deferred income tax and reclassification adjustments | 295 | 295 | |||||
Foreign currency translation | (85) | (85) | |||||
Ending balance (shares) at Sep. 30, 2015 | 23,095 | ||||||
Ending balance at Sep. 30, 2015 | $ 431,362 | $ 23 | 493,830 | (150,195) | 4,927 | $ (1,413) | 84,190 |
Ending balance, treasury stock (shares) at Sep. 30, 2015 | 78 | ||||||
Beginning balance (shares) at Dec. 31, 2015 | 23,116 | 23,116 | |||||
Beginning balance at Dec. 31, 2015 | $ 434,004 | $ 23 | 494,207 | (151,366) | 4,961 | $ (1,413) | 87,592 |
Beginning balance, treasury stock (shares) at Dec. 31, 2015 | 78 | 78 | |||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||
Stock-based compensation expense | $ 2,050 | 1,730 | 320 | ||||
Exercise of restricted stock units (shares) | 9 | ||||||
Exercise of restricted stock units | 0 | ||||||
Withholding taxes paid on vested restricted stock units at UCP, Inc. | (46) | (26) | (20) | ||||
Changes in ownership of noncontrolling interest | 1 | (1,898) | 1,899 | ||||
Acquisition of interests held by noncontrolling owners | (1,000) | (1,000) | |||||
Distribution of treasury stock to deferred compensation plan participants | 217 | (269) | $ 486 | ||||
Distribution of treasury stock to deferred compensation plan participant (shares) | (23) | ||||||
Net loss | (11,424) | (13,100) | 1,676 | ||||
Unrealized gain on investments, net of deferred income tax and reclassification adjustments | 1,484 | 1,484 | |||||
Foreign currency translation | $ 57 | 57 | |||||
Ending balance (shares) at Sep. 30, 2016 | 23,125 | 23,125 | |||||
Ending balance at Sep. 30, 2016 | $ 425,343 | $ 23 | $ 493,744 | $ (164,466) | $ 6,502 | $ (927) | $ 90,467 |
Ending balance, treasury stock (shares) at Sep. 30, 2016 | 55 | 55 |
Condensed Consolidated Stateme6
Condensed Consolidated Statements of Shareholders' Equity - Unaudited (Parenthetical) - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2016 | Sep. 30, 2015 | |
Statement of Stockholders' Equity [Abstract] | ||
Deferred income tax on unrealized gain on securities | $ 799 | $ 159 |
Reclassification adjustments netted against unrealized gain on securities | $ 278 | $ 581 |
Condensed Consolidated Stateme7
Condensed Consolidated Statements of Cash Flows - Unaudited - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2016 | Sep. 30, 2015 | |
Operating activities: | ||
Cash used in operating activities - continuing operations | $ (17,798) | $ (58,060) |
Cash used in operating activities - discontinued agribusiness operations | (508) | (17,462) |
Net cash used in operating activities | (18,306) | (75,522) |
Investing activities: | ||
Purchases of investments | (1,136) | (1,782) |
Proceeds from sale of investments | 623 | 7,055 |
Proceeds from maturity of investments | 18 | 1,343 |
Purchases of property, plant and equipment | (249) | (1,999) |
Increase in restricted cash | (650) | |
Other investing activities, net | 667 | 79 |
Cash provided by (used in) investing activities - continuing operations | (727) | 4,696 |
Cash provided by investing activities - discontinued agribusiness operations | 8 | 100,098 |
Net cash provided by (used in) investing activities | (719) | 104,794 |
Financing activities: | ||
Repayment of debt | (105,488) | (174,533) |
Proceeds from debt | 106,663 | 125,294 |
Payment of withholding taxes on exercise of restricted stock units | (46) | (370) |
Debt issuance costs | (113) | (698) |
Purchases of stock of consolidated subsidiary | (1,000) | |
Distribution to noncontrolling interests | (16) | |
Cash provided by (used in) financing activities | 16 | (50,323) |
Decrease in cash and cash equivalents | (19,009) | (21,051) |
Cash and cash equivalents, beginning of the period | 57,400 | 62,978 |
Cash and cash equivalents, end of the period | 38,391 | 41,927 |
Less cash and cash equivalents of discontinued agribusiness operations at the end of the period | 438 | 1,773 |
Cash and cash equivalents of continuing operations, end of the period | 37,953 | 40,154 |
Supplemental cash flow information: | ||
Payments (refunds) of federal and state income taxes | 187 | (72) |
Interest paid, net of amounts capitalized (primarily in discontinued agribusiness operations) | 3,295 | |
Unpaid liability incurred for development costs | 1,332 | |
Distribution of debt and equity securities in satisfaction of deferred compensation liability (including 22,644 shares of treasury stock) | 856 | |
Issuance of common stock for vested restricted stock units | $ 274 | $ 680 |
Condensed Consolidated Stateme8
Condensed Consolidated Statements of Cash Flows - Unaudited (Parenthetical) | 9 Months Ended |
Sep. 30, 2016shares | |
Statement of Cash Flows [Abstract] | |
Issuance of treasury stock to satisfy liability (shares) | 22,644 |
Basis of Presentation and Summa
Basis of Presentation and Summary of Significant Accounting Policies | 9 Months Ended |
Sep. 30, 2016 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Basis of Presentation and Summary of Significant Accounting Policies | Basis of Presentation and Summary of Significant Accounting Policies The accompanying unaudited condensed consolidated financial statements of PICO Holdings, Inc. and subsidiaries (collectively, the “Company” or “PICO”) have been prepared in accordance with the interim reporting requirements of Form 10-Q, pursuant to the rules and regulations of the United States Securities and Exchange Commission (the “SEC”). Accordingly, they do not include all of the information and notes required by accounting principles generally accepted in the United States of America (“U.S. GAAP”) for complete consolidated financial statements. In the opinion of management, all adjustments and reclassifications considered necessary for a fair and comparable presentation of the financial statements presented have been included and are of a normal recurring nature. Operating results presented are not necessarily indicative of the results that may be expected for the year ending December 31, 2016 . These condensed consolidated financial statements should be read in conjunction with the Company’s audited consolidated financial statements and notes thereto contained in the Company’s Annual Report on Form 10-K for the year ended December 31, 2015 filed with the SEC. Use of Estimates in Preparation of Financial Statements: The preparation of condensed consolidated financial statements in accordance with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent liabilities at the date of the condensed consolidated financial statements and the reported amounts of revenues and expenses for each reporting period. The significant estimates made in the preparation of the Company’s condensed consolidated financial statements relate to the assessment of other-than-temporary impairments, the application of the equity method of accounting, goodwill and intangibles, real estate and water assets, deferred income taxes, stock-based compensation, and contingent liabilities. It is reasonably possible that actual results could differ from the estimates upon which the carrying values were based. Noncontrolling Interest Re-allocation The Company allocates UCP, Inc. (“UCP”) Class A common stock issued in connection with the vesting of UCP restricted stock units (“RSU”) and stock-based compensation expense between additional paid-in-capital and noncontrolling interest within its condensed consolidated statements of equity. The equity allocations for the UCP, LLC operating partnership are based on the economic and voting interest percentages of the Company and its noncontrolling interest in UCP. Issuances of UCP Class A common stock for UCP RSUs affect the economic and voting interest percentages, which accordingly are adjusted at the end of each issuance period. The economic and voting interest percentages prevailing during the period are used to determine the current period equity allocations for the operating partnership. Recently Issued Accounting Pronouncements: In August 2016, the Financial Accounting Standards Board (“FASB”) issued guidance on classification of certain cash receipts and cash payments in the statement of cash flows. The amendments in this update clarify guidance on the following eight specific cash flow issues: debt prepayment or debt extinguishment costs, settlement of zero-coupon debt instruments or other instruments with coupon rates that are insignificant in relation to the effective interest rate, contingent consideration payments made after a business combination, proceeds from the settlement of insurance claims, proceeds from the settlement of company-owned life insurance policies, distributions received from equity method investees, beneficial interests in securitization transactions and separately identifiable cash flows and application of the predominance principle For public business entities, the guidance is effective for fiscal years beginning after December 15, 2017, and interim periods within those fiscal years. Early adoption is permitted, including adoption in an interim period. The guidance should be applied using a retrospective transition method to each period presented. The Company is currently evaluating the effect this guidance will have on the consolidated financial statements. In April 2015, the FASB issued guidance on simplifying the presentation of debt issuance costs, which requires that debt issuance costs related to a recognized debt liability be presented in the balance sheet as a direct deduction from the carrying amount of that debt liability. For public business entities, the guidance was effective for financial statements issued for fiscal years beginning after December 15, 2015, and interim periods within those fiscal years. Entities are to apply the new guidance on a retrospective basis, wherein the balance sheet of each individual period presented should be adjusted to reflect the period-specific effects of applying the new guidance. The Company adopted the guidance effective January 1, 2016. Prior to adoption, the Company included debt issuance costs in other assets on its condensed consolidated balance sheets. Beginning with the Form 10-Q for the three months ended March 31, 2016, the Company changed its presentation of debt issuance costs for all periods presented and the Company reclassified $1.5 million of debt issuance costs at December 31, 2015 as a direct deduction from the carrying amounts of its debt liabilities both on the condensed consolidated balance sheets and in the notes to the condensed consolidated financial statements. |
Real Estate and Tangible Water
Real Estate and Tangible Water Assets | 9 Months Ended |
Sep. 30, 2016 | |
Real Estate [Abstract] | |
Real Estate and Tangible Water Assets | Real Estate and Tangible Water Assets The costs assigned to the various components of real estate and tangible water assets were as follows (in thousands): September 30, 2016 December 31, 2015 Real estate and improvements held and used, net of accumulated depreciation of $11,996 and $11,778 at September 30, 2016 and December 31, 2015, respectively $ 9,477 $ 9,694 Residential real estate and home construction inventories 382,219 362,056 Other real estate inventories completed or under development 5,207 9,971 Tangible water assets 42,498 42,514 Total real estate and tangible water assets $ 439,401 $ 424,235 Impairment Losses for the Nine Months Ended September 30, 2016 : During the nine months ended September 30, 2016 , the Company recorded an impairment loss of $2.4 million on real estate located in Bakersfield, California, reducing the carrying value to $5.6 million . The Company entered into a contract to sell the remaining lots in the real estate for less than its carrying value at a future date and as a result, the real estate was written down to its fair value, less selling costs. The loss was reported in the condensed consolidated statements of operations and comprehensive income or loss within impairment loss on intangible and long-lived assets and was included in the results of operations of the real estate operations segment. Impairment Losses for the Year Ended December 31, 2015 : During the year ended December 31, 2015 , the Company recorded an impairment loss of $923,000 on real estate located in Kern County, California, reducing the carrying value to $6 million . The loss was reported in the consolidated statements of operations and comprehensive income or loss within impairment loss on intangible and long-lived assets and was included in the results of operations of the real estate operations segment. During the year ended December 31, 2015 , the Company accepted an offer for $3.4 million for real estate owned near Fresno, California. As a result, an impairment loss of $274,000 was recorded that reduced the carrying value of the real estate to the offer price. The loss was reported in the condensed consolidated statements of operations and comprehensive income or loss within impairment loss on intangible and long-lived assets and was included in the results of operations of the real estate operations segment. |
Intangible Assets and Goodwill
Intangible Assets and Goodwill | 9 Months Ended |
Sep. 30, 2016 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Intangible Assets and Goodwill | Intangible Assets and Goodwill The Company owns the following intangible assets, which primarily represent indefinite-lived intangible water assets within its water resource and water storage operations segment (in thousands): September 30, 2016 December 31, 2015 Pipeline rights and water credits at Fish Springs Ranch $ 83,897 $ 83,897 Pipeline rights and water rights at Carson-Lyon 25,569 24,831 Other, net of accumulated amortization 17,453 17,805 Total intangible assets $ 126,919 $ 126,533 Impairment Losses for the Nine Months Ended September 30, 2016 : There were no impairment losses recognized on intangible assets during the nine months ended September 30, 2016 . Impairment Losses for the Year Ended December 31, 2015 : As a result of the Company’s annual review of indefinite-lived intangible assets, using a discounted cash flow model, the Company recorded an impairment loss of $269,000 , reducing the carrying value to $3 million , which is included in the table above within other, net of accumulated amortization. The loss was recorded in the consolidated statements of operations and comprehensive income or loss within impairment loss on intangible and long-lived assets and was reported in the water resource and water storage operations segment results. Goodwill: The Company had a goodwill balance of $4.2 million at December 31, 2015 . During the three and nine months ended September 30, 2016 , the Company recorded an impairment loss of $4.2 million on goodwill related to the Citizens Homes, Inc. (“Citizens”) acquisition due to revised financial forecasts for the Southeast operations as a result of items including weather that delayed new community openings, abandonment of certain opportunities to open new communities as the opportunities did not meet UCP’s underwriting criteria, and lower margins on older communities still in existence from the land purchased as part of the Citizens acquisition. The loss was reported in the Company’s Real Estate operations reducing the balance of the goodwill to zero . The revised forecasts also reduced the contingent consideration liability related to the Citizens acquisition by $2.4 million leaving a balance of $307,000 at September 30, 2016 . There were no acquisitions, disposals, or impairments of goodwill during the year ended December 31, 2015 . The Company estimates the fair value of goodwill based on applying the income approach by determining the present value of the estimated future cash flows at a discount rate. When estimating future cash flows, the Company makes various assumptions, including, but not limited to: (i) forecast adjusted pre-tax net income over a ten year period; (ii) weighted average cost of capital; (iii) terminal growth; and (iv) revenue growth and operating profit margin. The risk adjusted discount rate of 14.5% and terminal growth rate of 2.0% were applied to forecast adjusted pre-tax net income. |
Investments
Investments | 9 Months Ended |
Sep. 30, 2016 | |
Investments, Debt and Equity Securities [Abstract] | |
Investments | Investments The cost and carrying value of available-for-sale investments were as follows (in thousands): September 30, 2016 Cost Gross Unrealized Gains Gross Unrealized Losses Carrying Value Debt securities: corporate bonds $ 4,331 $ 91 $ (22 ) $ 4,400 Marketable equity securities 10,463 10,052 (45 ) 20,470 Total available-for-sale investments $ 14,794 $ 10,143 $ (67 ) $ 24,870 December 31, 2015 Cost Gross Unrealized Gains Gross Unrealized Losses Carrying Value Debt securities: corporate bonds $ 4,458 $ 46 $ (51 ) $ 4,453 Marketable equity securities 10,339 7,879 (81 ) 18,137 Total available-for-sale investments $ 14,797 $ 7,925 $ (132 ) $ 22,590 The amortized cost and carrying value of investments in debt securities, by contractual maturity, are shown below. Actual maturity dates may differ from contractual maturity dates because borrowers may have the right to call or prepay obligations with or without call or prepayment penalties (in thousands): September 30, 2016 December 31, 2015 Amortized Cost Carrying Value Amortized Cost Carrying Value Due in one year or less $ 38 $ 37 Due after one year through five years $ 4,331 $ 4,400 2,603 2,566 Due after five years 1,817 1,850 Total $ 4,331 $ 4,400 $ 4,458 $ 4,453 Debt Securities The Company owns corporate bonds and other debt securities, which are purchased based on the maturity and yield-to-maturity of the bond and an analysis of the fundamental characteristics of the issuer. At September 30, 2016 , and December 31, 2015 , there were unrealized losses on certain bonds in the portfolio. The Company does not consider those bonds to be other-than-temporarily impaired because the Company expects to hold, and will not be required to sell, these particular bonds, and it expects to recover the entire amortized cost basis at maturity. There were no impairment losses recorded on debt securities during the three and nine months ended September 30, 2016 and 2015 . Marketable Equity Securities The Company’s investment in marketable equity securities at September 30, 2016 principally consisted of common stock of publicly traded small-capitalization companies in the U.S. and select foreign markets. At September 30, 2016 , the Company reviewed its equity securities in an unrealized loss position and concluded certain of such securities were not other-than-temporarily impaired as the declines were not of sufficient duration and severity, and publicly-available financial information, collectively, did not indicate impairment. The primary cause of the loss on those securities was normal market volatility. No material impairment losses were recorded during the three and nine months ended September 30, 2016 and 2015 . Other Investments The Company owned the following investments at September 30, 2016 and December 31, 2015 that were not classified as available-for-sale (in thousands): Carrying Value Voting Interest Investment in Synthonics $ 2,170 18.2 % Investment in Mindjet 1,312 19.3 % Total $ 3,482 Investment in Synthonics: Synthonics, Inc. (“Synthonics”) is a private company co-founded by a former member of the Company’s board of directors. The Company’s investment consists of preferred shares as discussed in Note 9 “Related-Party Transactions.” Investment in Mindjet: During the third quarter of 2015 , the Company determined it no longer had significant influence over the operating and financial policies of Mindjet, Inc. (“Mindjet”) and therefore discontinued the equity method of accounting. The remaining carrying value of the investment, including a convertible note receivable and associated interest, at September 30, 2016 and December 31, 2015 was $2.3 million and $2.2 million , respectively. The note and interest receivable is expected to be converted into additional preferred stock during 2016 . As a result of previously using the equity method of accounting for the investment in common stock, the Company recorded a loss within equity in loss of unconsolidated affiliate in the condensed consolidated statement of operations and comprehensive income or loss of $1.9 million and $3.4 million for the three and nine months ended September 30, 2015 , respectively. The Company’s share of the losses reported by Mindjet during 2015 was allocated to the carrying value of the common stock investment until it reached zero , and then to the preferred stock and convertible debt. During the three and nine months ended September 30, 2015 , the Company recorded a $20.7 million impairment loss on the investment in Mindjet common and preferred shares as the estimated fair value was less than the carrying value due to significantly increased, and continuing operating losses and resulting liquidity issues, actual financial results significantly less than projections, and decreased market conditions that had adversely affected the value of Mindjet. Such loss was recorded in impairment on investments in the condensed consolidated statement of operations and comprehensive income or loss. The fair value of the investment in Mindjet was based on an analysis of the financial and operational aspects of the company, including consideration of business enterprise value-to-revenue ratios for comparable public companies to current revenue metrics for the company. Determination of the business enterprise value based on the foregoing was then considered in an analysis of the distribution of equity value to the various classes of debt and equity issued by Mindjet in order to reflect differences in value due to differing liquidation preferences, dividend and voting rights. The fair value approach relied primarily on Level 3 unobservable inputs, whereby expected future cash flows were determined using revenue multiples that included assumptions regarding an entity’s assumptions about risk and uncertainties. The estimates were based upon assumptions believed to be reasonable, but which by their nature are uncertain and unpredictable. It is reasonably possible that the Company’s ownership percentage in Mindjet will continue to decline as other shareholders fund the ongoing operations with additional equity capital and upon conversion of outstanding notes. The Company does not anticipate investing any additional capital into Mindjet. The carrying value of the Company’s investment in Mindjet is subject to impairment testing at each reporting period, or more frequently if facts and circumstances indicate the investment may be impaired. It is reasonably possible that circumstances may continue to deteriorate which could require the Company to record additional impairment losses on the remaining investment balances. |
Disclosures About Fair Value
Disclosures About Fair Value | 9 Months Ended |
Sep. 30, 2016 | |
Fair Value Disclosures [Abstract] | |
Disclosures About Fair Value | Disclosures About Fair Value Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants under current market conditions at the measurement date. The level within the fair value hierarchy in which the fair value measurements are classified include measurements using quoted prices in active markets for identical assets or liabilities (Level 1), quoted prices for similar instruments in active markets or quoted prices for identical or similar instruments in markets that are not active (Level 2), and significant valuation assumptions that are not readily observable in the market (Level 3). Recurring Fair Value Measurements Assets and liabilities measured at fair value are classified in their entirety based on the lowest level of input that is significant to the fair value measurement. The Company’s assessment of the significance of a particular input to the fair value measurement in its entirety requires judgment and considers factors specific to the asset or liability. The Company’s policy is to recognize transfers between levels at the end of the reporting period. The following tables set forth the Company’s assets and liabilities that were measured at fair value, on a recurring basis, by level within the fair value hierarchy. There were no significant transfers between Level 1 and Level 2 during the nine months ended September 30, 2016 or during the year ended December 31, 2015 . At September 30, 2016 (in thousands): Quoted Prices In Active Markets for Identical Assets (Level 1) Significant Other Observable Inputs (Level 2) Significant Unobservable Inputs (Level 3) Balance at September 30, 2016 Assets Available-for-sale equity securities (1) $ 12,611 $ 7,859 $ 20,470 Available-for-sale debt securities (1) 4,400 4,400 Total $ 17,011 $ 7,859 $ 24,870 Liabilities Contingent consideration (2) $ 307 $ 307 At December 31, 2015 (in thousands): Quoted Prices In Active Markets for Identical Assets (Level 1) Significant Other Observable Inputs (Level 2) Significant Unobservable Inputs (Level 3) Balance at December 31, 2015 Assets Available-for-sale equity securities (1) $ 10,685 $ 7,452 $ 18,137 Available-for-sale debt securities (1) 4,453 4,453 Total $ 15,138 $ 7,452 $ 22,590 Liabilities Contingent consideration (2) $ 2,707 $ 2,707 (1) Where there are quoted market prices that are readily available in an active market, securities are classified as Level 1 of the valuation hierarchy. Level 1 available-for-sale investments are valued using quoted market prices multiplied by the number of shares owned and debt securities are valued using a market quote in an active market. All Level 2 available-for-sale securities are one class because they all contain similar risks and are valued using market prices and include securities where the markets are not active, that is where there are few transactions, or the prices are not current or the prices vary considerably over time. Inputs include directly or indirectly observable inputs such as quoted prices. Level 3 available-for-sale securities would include securities where valuation is based on unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets. This includes certain pricing models, discounted cash flow methodologies and similar techniques that use significant unobservable inputs. (2) Included in this caption is the contingent consideration arrangement that the Company entered into as part of the acquisition of Citizens. The contingent consideration arrangement requires the Company to pay up to a maximum of $6 million of additional consideration based upon achievement of various pre-tax net income performance milestones of the new business (“performance milestones”) over a five year period commencing on April 1, 2014. Payout calculations are made based on calendar year performance, except for the sixth payout calculation, which will be calculated based on the achievement of performance milestones from January 1, 2019 through March 25, 2019. Payouts are to be made on an annual basis. The potential undiscounted amount of all future payments that the Company could be required to make under the contingent consideration arrangement is between zero and $6 million . The estimated fair value of the contingent consideration was estimated based on applying the weighted probability of achievement of the performance milestones. The measurement is based on significant inputs that are not observable in the market, which are defined as Level 3 inputs. Key assumptions include: (1) forecast adjusted pre-tax net income over the contingent consideration period; (2) revenue appreciation; (3) cost inflation; and (4) sales and marketing and general and administrative costs. The estimated revenue appreciation of 4.5% , cost inflation of 1.5% , and sales and marketing and general and administrative costs were applied to forecast adjusted net income over the contingent consideration period. Non-Recurring Fair Value Measurements Assets and liabilities measured at fair value are classified in their entirety based on the lowest level of input that is significant to the fair value measurement. The Company’s assessment of the significance of a particular input to the fair value measurement in its entirety requires judgment and considers factors specific to the asset. The following tables set forth the Company’s non-financial assets that were measured at fair value, on a non-recurring basis, by level within the fair value hierarchy. Nine months ended September 30, 2016 (in thousands): Asset Description Quoted Prices In Active Markets for Identical Assets (Level 1) Significant Other Observable Inputs (Level 2) Significant Unobservable Inputs (Level 3) Total Loss Goodwill (1) $ — $ 4,223 Real estate and development costs (2) $ 5,645 $ 2,397 Real estate and development costs (3) $ 1,066 $ 191 Oil and gas wells (4) $ — $ 201 (1) The Company had non-recurring fair value measurements of goodwill discussed in Note 3, “Intangible Assets and Goodwill.” (2) The Company had non-recurring fair value measurements of real estate assets discussed in Note 2, “Real Estate and Tangible Water Assets.” (3) The Company had non-recurring fair value measurements of real estate assets in its Southeast homebuilding division. The loss was reported in the condensed consolidated statements of operations and comprehensive income or loss within impairment loss on intangible and long-lived assets and was included in the results of operations of the real estate segment. (4) The Company recorded an impairment loss to write down the value of certain oil and gas wells. The loss was reported in the condensed consolidated statements of operations and comprehensive income or loss within impairment loss on intangible and long-lived assets and was included in the results of operations of the corporate segment. Year Ended December 31, 2015 (in thousands): Asset Description Quoted Prices In Active Markets for Identical Assets (Level 1) Significant Other Observable Inputs (Level 2) Significant Unobservable Inputs (Level 3) Total Loss Intangible water assets (1) $ 3,023 $ 269 Oil and gas wells (2) $ 2,542 $ 1,816 Real estate and development costs (3) $ 3,400 $ 274 Real estate and development costs (3) $ 5,960 $ 923 Investments in unconsolidated affiliates (4) $ 2,163 $ 20,696 (1) The Company had a non-recurring fair value measurement for intangible assets that resulted in an impairment loss discussed in Note 3, “Intangible Assets and Goodwill.” (2) The Company recorded an impairment loss to write down the value of capitalized development costs related to its oil and gas wells. The estimated fair value of the wells was determined using a discounted cash flow model. The loss was reported in the condensed consolidated statements of operations and comprehensive income or loss within impairment loss on intangible and long-lived assets and was included in the results of operations of the corporate segment. (3) The Company had non-recurring fair value measurements of real estate assets discussed in Note 2, “Real Estate and Tangible Water Assets.” (4) The Company had a non-recurring fair value measurement of an investment in an unconsolidated affiliate’s equity securities held at cost discussed in Note 4, “Investments.” Estimated Fair Value of Financial Instruments Not Carried at Fair Value As of September 30, 2016 and December 31, 2015 , the fair values of cash and cash equivalents, accounts payable, and accounts receivable approximated their carrying values because of the short-term nature of these assets or liabilities. The estimated fair value of the Company’s investments in unconsolidated affiliates approximated their carrying values. The estimated fair value of the Company's debt was based on cash flow models discounted at the then-current interest rates and an estimate of the then-current spread above those rates at which the Company could borrow, which are Level 3 inputs in the fair value hierarchy. The estimated fair value of certain of the Company’s other investments, which included investments in preferred stock of private companies, cannot be reasonably estimated on a recurring basis. The following table presents the carrying value and estimated fair value of the Company’s financial instruments which are not carried at fair value (in thousands): September 30, 2016 December 31, 2015 Carrying Amount Estimated Fair Value Carrying Amount Estimated Fair Value Financial assets: Investments in unconsolidated affiliates’ equity securities $ 3,482 $ 3,482 $ 3,482 $ 3,482 Financial liabilities: Debt $ 157,785 $ 167,376 $ 155,966 $ 166,769 |
Debt
Debt | 9 Months Ended |
Sep. 30, 2016 | |
Debt Disclosure [Abstract] | |
Debt | Debt The following table details the Company’s outstanding debt (in thousands): September 30, 2016 December 31, 2015 No stated interest, payments through 2017 $ 1,935 3% to 4.75% payments through 2018 $ 68,705 67,336 5% to 5.5% payments through 2017 9,372 7,636 8% payments through 2018 3,982 3,975 Senior Notes: 8.5% payments through 2017 74,122 73,480 10% payments through 2017 1,604 1,604 Total debt $ 157,785 $ 155,966 At September 30, 2016 , and December 31, 2015 , the Company’s real estate debt had a weighted average interest rate of 6.5% and 6.4% , respectively. As of September 30, 2016 , and December 31, 2015 , the Company had approximately $228.2 million and $232.6 million , respectively, available in loan commitments to draw upon, of which approximately $69.6 million and $75.1 million , respectively, was available. Debt Provisions, Restrictions, and Covenants on Real Estate Debt: Certain debt agreements of UCP, Inc. (“UCP”) contain various significant financial covenants, each of which UCP was in compliance with at September 30, 2016 and December 31, 2015 . The $75 million of senior notes issued in 2014 by UCP limit UCP’s ability to, among other things, incur or guarantee additional unsecured and secured indebtedness (provided that UCP may incur indebtedness so long as UCP’s ratio of indebtedness to its consolidated tangible assets (on a pro forma basis) would be equal to or less than 45% and provided that the aggregate amount of secured debt may not exceed the greater of $75 million or 30% of UCP’s consolidated tangible assets); pay dividends and make certain investments and other restricted payments (including purchasing UCP stock); acquire unimproved real property in excess of $75 million per fiscal year or in excess of $150 million over the term of the notes, except to the extent funded with subordinated obligations or the proceeds of equity issuances; create or incur certain liens; transfer or sell certain assets; and merge or consolidate with other companies or transfer or sell all or substantially all of UCP’s consolidated assets. Other: The Company incurred and capitalized $3.2 million and $9.3 million of interest during the three and nine months ended September 30, 2016 , respectively, and $3.1 million and $8.5 million of interest during the three and nine months ended September 30, 2015 , respectively, related to construction and real estate development costs. Due to debt covenants and other restrictions, the total restricted net assets of the Company’s consolidated subsidiaries were $128.9 million at September 30, 2016 . |
Commitments and Contingencies
Commitments and Contingencies | 9 Months Ended |
Sep. 30, 2016 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | Commitments and Contingencies The Company leases some of its offices under non-cancelable operating leases that expire at various dates through 2021 . Rent expense for office space was $469,000 and $1.5 million for the three and nine months ended September 30, 2016 , respectively, and was $511,000 and $1.7 million for the three and nine months ended September 30, 2015 , respectively. Future minimum payments under all operating leases are as follows (in thousands): Year ended December 31, 2016 $ 372 2017 1,230 2018 936 2019 413 2020 213 Thereafter 18 Total $ 3,182 Neither PICO nor its subsidiaries are parties to any potentially material pending legal proceedings. The Company is subject to various litigation matters that arise in the ordinary course of its business. Because litigation is inherently unpredictable and unfavorable resolutions could occur, assessing contingencies is highly subjective and requires judgments about future events. When evaluating contingencies, the Company may be unable to provide a meaningful estimate due to a number of factors, including the procedural status of the matter in question, the presence of complex or novel legal theories, and/or the ongoing discovery and development of information important to the matters. In addition, damage amounts claimed in litigation against the Company may be unsupported, exaggerated or unrelated to possible outcomes, and as such, are not meaningful indicators of the potential liability. The Company regularly reviews contingencies to determine the adequacy of accruals and related disclosures. The amount of ultimate loss may differ from these estimates, and it is possible that the financial statements could be materially affected in any particular period by the unfavorable resolution of one or more of these contingencies. Whether any losses finally determined in any claim, action, investigation, or proceeding could reasonably have a material effect on the Company’s business, financial condition, results of operations, or cash flows will depend on a number of variables, including: the timing and amount of such losses; the structure and type of any remedies; the significance of the impact any such losses, damages or remedies may have on the Company’s condensed consolidated financial statements; and the unique facts and circumstances of the particular matter that may give rise to additional factors. |
Accumulated Other Comprehensive
Accumulated Other Comprehensive Income | 9 Months Ended |
Sep. 30, 2016 | |
Equity [Abstract] | |
Accumulated Other Comprehensive Income | Accumulated Other Comprehensive Income The components of accumulated other comprehensive income are as follows (in thousands): September 30, 2016 December 31, 2015 Net unrealized gain on available-for-sale investments $ 6,549 $ 5,065 Foreign currency translation (47 ) (104 ) Accumulated other comprehensive income $ 6,502 $ 4,961 The unrealized gain on available-for-sale investments is net of a deferred income tax liability of $3.5 million at September 30, 2016 and $2.8 million at December 31, 2015 . The following table reports amounts that were reclassified from accumulated other comprehensive income or loss and included in earnings (in thousands): Three Months Ended September 30, Nine Months Ended September 30, 2016 2015 2016 2015 Beginning balance $ 5,517 $ 4,963 $ 4,961 $ 4,717 Unrealized loss reclassified and recognized in net loss, net of tax (1) (95 ) (71 ) (181 ) (377 ) Foreign exchange reclassified and recognized in net loss, net of tax (1) 2 342 Total reclassified and recognized in net loss, net of tax (95 ) (69 ) (181 ) (35 ) Unrealized gain on marketable securities, net of tax 1,049 83 1,665 672 Accumulated currency, net of tax 31 (50 ) 57 (427 ) Net change in other comprehensive income, net of tax 985 (36 ) 1,541 210 Accumulated other comprehensive income $ 6,502 $ 4,927 $ 6,502 $ 4,927 (1) Amounts reclassified from this category are included in other income, net in the condensed consolidated statement of operations and comprehensive income or loss. |
Related-Party Transactions
Related-Party Transactions | 9 Months Ended |
Sep. 30, 2016 | |
Related Party Transactions [Abstract] | |
Related-Party Transactions | Related-Party Transactions Deferred Compensation The Company has agreements with certain officers and employees to defer compensation into Rabbi Trust accounts held in the name of the Company. The total value of the deferred compensation obligation for all participants at September 30, 2016 and December 31, 2015 , was $26.7 million and $25.5 million , respectively, and is included in the accompanying consolidated balance sheets. These totals include a fair value of $653,000 and $805,000 of the Company’s common stock, for each of the respective periods, with the balance in various publicly traded equities and bonds. Deferred compensation expense included in general, administrative, and other costs in the accompanying condensed consolidated statements of operations and comprehensive income or loss for the three months ended September 30, 2016 and 2015 was $ 1.8 million and $90,000 , respectively and for the nine months ended September 30, 2016 and 2015 was $2.8 million and $1.1 million , respectively. During the three and nine months ended September 30, 2016 , the Company distributed 22,644 shares of the Company’s common stock out of its deferred compensation Rabbi Trusts in satisfaction of the related liability. The distribution was reported as a reduction of treasury stock in the condensed consolidated statements of equity for the nine months ended September 30, 2016 . In connection with the termination of the Company’s former Chief Executive Officer, John R. Hart, which was effective as of October 12, 2016 , the Company will be required to distribute to Mr. Hart his deferred compensation balance in April 2017. At September 30, 2016 , Mr. Harts deferred compensation balance was valued at approximately $22.8 million . See Note 12, “Subsequent Events,” for additional information. Investment in Synthonics The Company has an investment in preferred stock of Synthonics, a company co-founded by Mr. Slepicka, formerly a non-employee director of the Company, who is currently the Chairman, Chief Executive Officer and acting Chief Financial Officer of Synthonics. As of September 30, 2016 , the Company had invested $2.2 million for 18.2% of the voting interest in Synthonics. Mr. Slepicka resigned as a member of the Board of Directors effective July 27, 2016 . |
Segment Reporting
Segment Reporting | 9 Months Ended |
Sep. 30, 2016 | |
Segment Reporting [Abstract] | |
Segment Reporting | Segment Reporting PICO is a diversified holding company engaged in the following operating and reportable segments: Water Resource and Water Storage Operations, Real Estate Operations, Corporate, and Discontinued Agribusiness Operations. The accounting policies of the reportable segments are the same as those described in the Company’s 2015 Annual Report on Form 10-K filed with the SEC. Management analyzes segments using the following information: Segment assets (in thousands): September 30, 2016 December 31, 2015 Assets: Water resource and water storage operations $ 185,380 $ 185,037 Real estate operations 426,751 421,411 Corporate 41,879 46,844 Discontinued agribusiness operations 6,511 8,793 Total assets $ 660,521 $ 662,085 Segment revenues and loss before taxes (in thousands): Three Months Ended September 30, Nine Months Ended September 30, 2016 2015 2016 2015 Revenue and other income: Water resource and water storage operations $ 553 $ 3,468 $ 813 $ 4,191 Real estate operations 95,567 73,777 246,731 172,243 Corporate 588 846 1,910 (17,911 ) Total revenue and other income $ 96,708 $ 78,091 $ 249,454 $ 158,523 Income (loss) before income taxes: Water resource and water storage operations $ (1,029 ) $ 834 $ (4,263 ) $ (1,907 ) Real estate operations 2,876 3,839 4,713 (1,661 ) Corporate (4,094 ) (3,574 ) (10,286 ) (31,248 ) Income (loss) from continuing operations before income taxes and equity in loss of unconsolidated affiliates $ (2,247 ) $ 1,099 $ (9,836 ) $ (34,816 ) |
Discontinued Agribusiness Opera
Discontinued Agribusiness Operations and Other Assets Held for Sale | 9 Months Ended |
Sep. 30, 2016 | |
Discontinued Operations and Disposal Groups [Abstract] | |
Discontinued Agribusiness Operations and Assets Held for Sale | Discontinued Agribusiness Operations and Other Assets Held for Sale During the third quarter of 2015, the Company sold substantially all of the assets used in its agribusiness segment to CHS Inc. (“CHS”) for a net selling price of $105.3 million . After repayment of $80.9 million of outstanding debt and $5.9 million in selling and other related costs of the sale, the Company received net proceeds of $18.4 million on the date of close. The Company was required to deposit $10.2 million of such net proceeds in escrow accounts, $6 million of which secures general indemnification obligations through January 2017, and $4.2 million of which was associated with specified operational matters related to air quality and waste water permit issues (“operational escrow”). The Company resolved the air quality issue and received $2.4 million of the operational escrow amount in October 2015. However, in February 2016, the Company was notified that the relevant regulatory authorities had not approved the waste water permit at the levels required under the sale agreement. Consequently, the remaining $1.8 million of the operational escrow amount was released to CHS in full satisfaction of the matter, resulting in the Company recording the amount as additional loss on the sale of discontinued operations for the nine months ended September 30, 2016 . Remaining amounts in escrow are reported as accounts receivable in the table below. The Company also guaranteed up to $8 million for any indemnification claims in excess of the $6 million general indemnification escrow pursuant to the terms of a guaranty agreement with CHS, which was executed at the closing. This guaranty will remain in force for five years from the date of sale. The guaranty has been recorded at estimated fair value that reflects the Company’s expectation that no significant amounts will be paid out under the guaranty. However, any amounts paid by the Company to CHS in excess of the estimate will result in additional loss on the sale. Any assets in excess of the resolution of the outstanding matters, and after payment of remaining liabilities, are available to the Company for any corporate purposes. The Company’s agribusiness segment has been classified as discontinued agribusiness operations in the accompanying condensed consolidated financial statements as of the earliest period presented. Consequently, prior periods presented have been recast from amounts previously reported to reflect the agribusiness segment as discontinued agribusiness operations. The following table presents the details of the Company’s results from discontinued agribusiness operations included in the condensed consolidated statement of operations and comprehensive income or loss (in thousands): Three Months Ended September 30, Nine Months Ended September 30, 2016 2015 2016 2015 Revenue and other income: Sales of canola oil and meal $ 9,600 $ 82,267 Other 18 (50 ) Total revenue and other income 9,618 82,217 Cost of goods sold: Cost of canola oil and meal sold 8,738 79,763 Depreciation 18 4,360 Other direct costs of production 1,155 5,938 Total cost of goods sold 9,911 90,061 Depreciation 95 Impairment loss on intangible and long-lived assets 1,875 Interest 428 3,259 Plant costs and overhead $ 18 9,504 $ 102 16,447 Segment total expenses 18 19,843 102 111,737 Loss from discontinued agribusiness operations, net of tax (18 ) (10,225 ) (102 ) (29,520 ) Income (loss) on sale of discontinued agribusiness operations, net of tax 2 (1,348 ) (1,858 ) (18,251 ) Net loss from discontinued agribusiness operations, net of tax (16 ) (11,573 ) (1,960 ) (47,771 ) Net (income) loss from discontinued agribusiness operations attributable to noncontrolling interests (16 ) 1,730 Net loss from discontinued agribusiness operations attributable to PICO Holdings, Inc. $ (16 ) $ (11,589 ) $ (1,960 ) $ (46,041 ) The following table presents the details of the Company’s assets and liabilities classified as held-for-sale in the condensed consolidated balance sheets (in thousands): September 30, 2016 December 31, 2015 Assets Cash and cash equivalents $ 438 $ 938 Accounts receivable 5,991 7,800 Other assets 82 55 Total agribusiness assets held-for-sale 6,511 8,793 Real estate (1) 3,400 Oil and gas assets (1) 989 Total assets held-for-sale $ 10,900 $ 8,793 Liabilities Total agribusiness liabilities held-for-sale 276 608 Oil and gas liabilities (1) 627 Total liabilities held-for-sale $ 903 $ 608 (1) See Note 12 “Subsequent Events.” |
Subsequent Events
Subsequent Events | 9 Months Ended |
Sep. 30, 2016 | |
Subsequent Events [Abstract] | |
Subsequent Events | Subsequent Events Termination of PICO’s CEO and Other Related Changes in Executive Management: On October 10, 2016 , John R. Hart’s employment as President and Chief Executive Officer of the Company was terminated, effective as of October 12, 2016 . Mr. Hart will receive the severance benefits set forth in Section 4(b) of his Amended and Restated Employment Agreement with the Company, dated March 11, 2016 and filed with the SEC on March 14, 2016 (the “Employment Agreement”). Such benefits include certain severance and vacation differential payments totaling approximately $10.4 million , certain medical benefits, and immediate vesting of the outstanding RSU and Performance Based Options (“PBO”) previously granted. Mr. Hart was also entitled to the balance of his accrued vacation and personal days valued at $339,000 which was paid to him in October 2016 . The Company will accrue the $10.4 million in severance benefits and vacation differential, remaining stock-based compensation, and related expenses in the fourth quarter of 2016 . In accordance with applicable regulations, payment of the severance benefits and vacation differential, stock settlement of the vested RSU, and distribution of Mr. Hart’s deferred compensation balance, will be made to Mr. Hart no earlier than six months and a day after the effective date of the termination. In connection with Mr. Hart’s termination, the Company’s board of directors appointed Maxim C.W. Webb as President and Chief Executive Officer and to serve as a class III director of the Company, effective as of October 12, 2016 , with a term that expires at the Company’s 2017 Annual Meeting of Stockholders, and John T. Perri as Chief Financial Officer. Additionally, each of Mr. Webb and Mr. Perri irrevocably and unconditionally waived their right to receive any bonus payment that would otherwise be payable pursuant to the terms of the Company’s executive bonus plan. Mr. Hart currently continues to serve as a member of the board of directors of the Company and UCP. However, in October 2016, the Company filed a consent solicitation statement seeking written consents of the shareholders of the Company to remove Mr. Hart as a director of the Company. Asset Sales: In August 2016 , the Company entered into a purchase and sale agreement to sell the majority of the assets used in its oil and gas operations effective October 1, 2016 for gross proceeds of $10.2 million . After consideration of liabilities assumed by the buyer and escrow holdback of approximately $587,000 for lease title defects that the Company has the right to cure within one year of the date of sale, cash proceeds to the Company were $9.2 million . The purchase and sale agreement provides for a Company guarantee of $1 million for any indemnification claims made by the buyer within one year of the sale. As the carrying value of the assets sold was reduced significantly in prior periods due to impairment losses and depletion charges, the Company will record a gain on sale before income taxes of $8.6 million during the fourth quarter of 2016 that will be reported within the Company’s corporate segment results. In October 2016 , the Company completed a sale of 32 acres of real estate in Fresno, California for cash of $3.4 million . The transaction did not result in any gain or loss as the real estate was previously written down to the estimated sale price during the year ended December 31, 2015 , which is further discussed in Note 2 “Real Estate and Tangible Water Assets.” |
Real Estate and Tangible Wate21
Real Estate and Tangible Water Assets (Tables) | 9 Months Ended |
Sep. 30, 2016 | |
Real Estate [Abstract] | |
Components of Real Estate and Water Assets | The costs assigned to the various components of real estate and tangible water assets were as follows (in thousands): September 30, 2016 December 31, 2015 Real estate and improvements held and used, net of accumulated depreciation of $11,996 and $11,778 at September 30, 2016 and December 31, 2015, respectively $ 9,477 $ 9,694 Residential real estate and home construction inventories 382,219 362,056 Other real estate inventories completed or under development 5,207 9,971 Tangible water assets 42,498 42,514 Total real estate and tangible water assets $ 439,401 $ 424,235 |
Intangible Assets and Goodwill
Intangible Assets and Goodwill (Tables) | 9 Months Ended |
Sep. 30, 2016 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of Indefinite-Lived Intangible Assets | The Company owns the following intangible assets, which primarily represent indefinite-lived intangible water assets within its water resource and water storage operations segment (in thousands): September 30, 2016 December 31, 2015 Pipeline rights and water credits at Fish Springs Ranch $ 83,897 $ 83,897 Pipeline rights and water rights at Carson-Lyon 25,569 24,831 Other, net of accumulated amortization 17,453 17,805 Total intangible assets $ 126,919 $ 126,533 |
Investments (Tables)
Investments (Tables) | 9 Months Ended |
Sep. 30, 2016 | |
Investments, Debt and Equity Securities [Abstract] | |
Available-for-sale Securities | The cost and carrying value of available-for-sale investments were as follows (in thousands): September 30, 2016 Cost Gross Unrealized Gains Gross Unrealized Losses Carrying Value Debt securities: corporate bonds $ 4,331 $ 91 $ (22 ) $ 4,400 Marketable equity securities 10,463 10,052 (45 ) 20,470 Total available-for-sale investments $ 14,794 $ 10,143 $ (67 ) $ 24,870 December 31, 2015 Cost Gross Unrealized Gains Gross Unrealized Losses Carrying Value Debt securities: corporate bonds $ 4,458 $ 46 $ (51 ) $ 4,453 Marketable equity securities 10,339 7,879 (81 ) 18,137 Total available-for-sale investments $ 14,797 $ 7,925 $ (132 ) $ 22,590 |
Investments Classified by Contractual Maturity Date | The amortized cost and carrying value of investments in debt securities, by contractual maturity, are shown below. Actual maturity dates may differ from contractual maturity dates because borrowers may have the right to call or prepay obligations with or without call or prepayment penalties (in thousands): September 30, 2016 December 31, 2015 Amortized Cost Carrying Value Amortized Cost Carrying Value Due in one year or less $ 38 $ 37 Due after one year through five years $ 4,331 $ 4,400 2,603 2,566 Due after five years 1,817 1,850 Total $ 4,331 $ 4,400 $ 4,458 $ 4,453 |
Fair Value, by Balance Sheet Grouping | The Company owned the following investments at September 30, 2016 and December 31, 2015 that were not classified as available-for-sale (in thousands): Carrying Value Voting Interest Investment in Synthonics $ 2,170 18.2 % Investment in Mindjet 1,312 19.3 % Total $ 3,482 |
Disclosures About Fair Value (T
Disclosures About Fair Value (Tables) | 9 Months Ended |
Sep. 30, 2016 | |
Fair Value Disclosures [Abstract] | |
Schedule of Fair Value, Assets and Liabilities Measured on Recurring Basis | The following tables set forth the Company’s assets and liabilities that were measured at fair value, on a recurring basis, by level within the fair value hierarchy. There were no significant transfers between Level 1 and Level 2 during the nine months ended September 30, 2016 or during the year ended December 31, 2015 . At September 30, 2016 (in thousands): Quoted Prices In Active Markets for Identical Assets (Level 1) Significant Other Observable Inputs (Level 2) Significant Unobservable Inputs (Level 3) Balance at September 30, 2016 Assets Available-for-sale equity securities (1) $ 12,611 $ 7,859 $ 20,470 Available-for-sale debt securities (1) 4,400 4,400 Total $ 17,011 $ 7,859 $ 24,870 Liabilities Contingent consideration (2) $ 307 $ 307 At December 31, 2015 (in thousands): Quoted Prices In Active Markets for Identical Assets (Level 1) Significant Other Observable Inputs (Level 2) Significant Unobservable Inputs (Level 3) Balance at December 31, 2015 Assets Available-for-sale equity securities (1) $ 10,685 $ 7,452 $ 18,137 Available-for-sale debt securities (1) 4,453 4,453 Total $ 15,138 $ 7,452 $ 22,590 Liabilities Contingent consideration (2) $ 2,707 $ 2,707 (1) Where there are quoted market prices that are readily available in an active market, securities are classified as Level 1 of the valuation hierarchy. Level 1 available-for-sale investments are valued using quoted market prices multiplied by the number of shares owned and debt securities are valued using a market quote in an active market. All Level 2 available-for-sale securities are one class because they all contain similar risks and are valued using market prices and include securities where the markets are not active, that is where there are few transactions, or the prices are not current or the prices vary considerably over time. Inputs include directly or indirectly observable inputs such as quoted prices. Level 3 available-for-sale securities would include securities where valuation is based on unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets. This includes certain pricing models, discounted cash flow methodologies and similar techniques that use significant unobservable inputs. (2) Included in this caption is the contingent consideration arrangement that the Company entered into as part of the acquisition of Citizens. The contingent consideration arrangement requires the Company to pay up to a maximum of $6 million of additional consideration based upon achievement of various pre-tax net income performance milestones of the new business (“performance milestones”) over a five year period commencing on April 1, 2014. Payout calculations are made based on calendar year performance, except for the sixth payout calculation, which will be calculated based on the achievement of performance milestones from January 1, 2019 through March 25, 2019. Payouts are to be made on an annual basis. The potential undiscounted amount of all future payments that the Company could be required to make under the contingent consideration arrangement is between zero and $6 million . The estimated fair value of the contingent consideration was estimated based on applying the weighted probability of achievement of the performance milestones. The measurement is based on significant inputs that are not observable in the market, which are defined as Level 3 inputs. Key assumptions include: (1) forecast adjusted pre-tax net income over the contingent consideration period; (2) revenue appreciation; (3) cost inflation; and (4) sales and marketing and general and administrative costs. The estimated revenue appreciation of 4.5% , cost inflation of 1.5% , and sales and marketing and general and administrative costs were applied to forecast adjusted net income over the contingent consideration period. |
Fair Value Measurements on a Non-Recurring Basis | The following tables set forth the Company’s non-financial assets that were measured at fair value, on a non-recurring basis, by level within the fair value hierarchy. Nine months ended September 30, 2016 (in thousands): Asset Description Quoted Prices In Active Markets for Identical Assets (Level 1) Significant Other Observable Inputs (Level 2) Significant Unobservable Inputs (Level 3) Total Loss Goodwill (1) $ — $ 4,223 Real estate and development costs (2) $ 5,645 $ 2,397 Real estate and development costs (3) $ 1,066 $ 191 Oil and gas wells (4) $ — $ 201 (1) The Company had non-recurring fair value measurements of goodwill discussed in Note 3, “Intangible Assets and Goodwill.” (2) The Company had non-recurring fair value measurements of real estate assets discussed in Note 2, “Real Estate and Tangible Water Assets.” (3) The Company had non-recurring fair value measurements of real estate assets in its Southeast homebuilding division. The loss was reported in the condensed consolidated statements of operations and comprehensive income or loss within impairment loss on intangible and long-lived assets and was included in the results of operations of the real estate segment. (4) The Company recorded an impairment loss to write down the value of certain oil and gas wells. The loss was reported in the condensed consolidated statements of operations and comprehensive income or loss within impairment loss on intangible and long-lived assets and was included in the results of operations of the corporate segment. Year Ended December 31, 2015 (in thousands): Asset Description Quoted Prices In Active Markets for Identical Assets (Level 1) Significant Other Observable Inputs (Level 2) Significant Unobservable Inputs (Level 3) Total Loss Intangible water assets (1) $ 3,023 $ 269 Oil and gas wells (2) $ 2,542 $ 1,816 Real estate and development costs (3) $ 3,400 $ 274 Real estate and development costs (3) $ 5,960 $ 923 Investments in unconsolidated affiliates (4) $ 2,163 $ 20,696 (1) The Company had a non-recurring fair value measurement for intangible assets that resulted in an impairment loss discussed in Note 3, “Intangible Assets and Goodwill.” (2) The Company recorded an impairment loss to write down the value of capitalized development costs related to its oil and gas wells. The estimated fair value of the wells was determined using a discounted cash flow model. The loss was reported in the condensed consolidated statements of operations and comprehensive income or loss within impairment loss on intangible and long-lived assets and was included in the results of operations of the corporate segment. (3) The Company had non-recurring fair value measurements of real estate assets discussed in Note 2, “Real Estate and Tangible Water Assets.” (4) The Company had a non-recurring fair value measurement of an investment in an unconsolidated affiliate’s equity securities held at cost discussed in Note 4, “Investments.” |
Fair Value of Financial Instruments | The following table presents the carrying value and estimated fair value of the Company’s financial instruments which are not carried at fair value (in thousands): September 30, 2016 December 31, 2015 Carrying Amount Estimated Fair Value Carrying Amount Estimated Fair Value Financial assets: Investments in unconsolidated affiliates’ equity securities $ 3,482 $ 3,482 $ 3,482 $ 3,482 Financial liabilities: Debt $ 157,785 $ 167,376 $ 155,966 $ 166,769 |
Debt (Tables)
Debt (Tables) | 9 Months Ended |
Sep. 30, 2016 | |
Debt Disclosure [Abstract] | |
Schedule of Company's Consolidated Debt | The following table details the Company’s outstanding debt (in thousands): September 30, 2016 December 31, 2015 No stated interest, payments through 2017 $ 1,935 3% to 4.75% payments through 2018 $ 68,705 67,336 5% to 5.5% payments through 2017 9,372 7,636 8% payments through 2018 3,982 3,975 Senior Notes: 8.5% payments through 2017 74,122 73,480 10% payments through 2017 1,604 1,604 Total debt $ 157,785 $ 155,966 |
Commitments and Contingencies (
Commitments and Contingencies (Tables) | 9 Months Ended |
Sep. 30, 2016 | |
Commitments and Contingencies Disclosure [Abstract] | |
Schedule of Future Minimum Rental Payments for Operating Leases | Future minimum payments under all operating leases are as follows (in thousands): Year ended December 31, 2016 $ 372 2017 1,230 2018 936 2019 413 2020 213 Thereafter 18 Total $ 3,182 |
Accumulated Other Comprehensi27
Accumulated Other Comprehensive Income (Tables) | 9 Months Ended |
Sep. 30, 2016 | |
Equity [Abstract] | |
Schedule of Accumulated Other Comprehensive Income (Loss) | The components of accumulated other comprehensive income are as follows (in thousands): September 30, 2016 December 31, 2015 Net unrealized gain on available-for-sale investments $ 6,549 $ 5,065 Foreign currency translation (47 ) (104 ) Accumulated other comprehensive income $ 6,502 $ 4,961 The following table reports amounts that were reclassified from accumulated other comprehensive income or loss and included in earnings (in thousands): Three Months Ended September 30, Nine Months Ended September 30, 2016 2015 2016 2015 Beginning balance $ 5,517 $ 4,963 $ 4,961 $ 4,717 Unrealized loss reclassified and recognized in net loss, net of tax (1) (95 ) (71 ) (181 ) (377 ) Foreign exchange reclassified and recognized in net loss, net of tax (1) 2 342 Total reclassified and recognized in net loss, net of tax (95 ) (69 ) (181 ) (35 ) Unrealized gain on marketable securities, net of tax 1,049 83 1,665 672 Accumulated currency, net of tax 31 (50 ) 57 (427 ) Net change in other comprehensive income, net of tax 985 (36 ) 1,541 210 Accumulated other comprehensive income $ 6,502 $ 4,927 $ 6,502 $ 4,927 (1) Amounts reclassified from this category are included in other income, net in the condensed consolidated statement of operations and comprehensive income or loss. |
Segment Reporting (Tables)
Segment Reporting (Tables) | 9 Months Ended |
Sep. 30, 2016 | |
Segment Reporting [Abstract] | |
Reconciliation of Assets from Segment to Consolidated | Segment assets (in thousands): September 30, 2016 December 31, 2015 Assets: Water resource and water storage operations $ 185,380 $ 185,037 Real estate operations 426,751 421,411 Corporate 41,879 46,844 Discontinued agribusiness operations 6,511 8,793 Total assets $ 660,521 $ 662,085 |
Reconciliation of Operating Profit (Loss) from Segments to Consolidated | Segment revenues and loss before taxes (in thousands): Three Months Ended September 30, Nine Months Ended September 30, 2016 2015 2016 2015 Revenue and other income: Water resource and water storage operations $ 553 $ 3,468 $ 813 $ 4,191 Real estate operations 95,567 73,777 246,731 172,243 Corporate 588 846 1,910 (17,911 ) Total revenue and other income $ 96,708 $ 78,091 $ 249,454 $ 158,523 Income (loss) before income taxes: Water resource and water storage operations $ (1,029 ) $ 834 $ (4,263 ) $ (1,907 ) Real estate operations 2,876 3,839 4,713 (1,661 ) Corporate (4,094 ) (3,574 ) (10,286 ) (31,248 ) Income (loss) from continuing operations before income taxes and equity in loss of unconsolidated affiliates $ (2,247 ) $ 1,099 $ (9,836 ) $ (34,816 ) |
Discontinued Agribusiness Ope29
Discontinued Agribusiness Operations and Other Assets Held for Sale (Tables) | 9 Months Ended |
Sep. 30, 2016 | |
Discontinued Operations and Disposal Groups [Abstract] | |
Schedule of Disposal Groups, Including Discontinued Operations, Income Statement, Balance Sheet and Additional Disclosures | The following table presents the details of the Company’s results from discontinued agribusiness operations included in the condensed consolidated statement of operations and comprehensive income or loss (in thousands): Three Months Ended September 30, Nine Months Ended September 30, 2016 2015 2016 2015 Revenue and other income: Sales of canola oil and meal $ 9,600 $ 82,267 Other 18 (50 ) Total revenue and other income 9,618 82,217 Cost of goods sold: Cost of canola oil and meal sold 8,738 79,763 Depreciation 18 4,360 Other direct costs of production 1,155 5,938 Total cost of goods sold 9,911 90,061 Depreciation 95 Impairment loss on intangible and long-lived assets 1,875 Interest 428 3,259 Plant costs and overhead $ 18 9,504 $ 102 16,447 Segment total expenses 18 19,843 102 111,737 Loss from discontinued agribusiness operations, net of tax (18 ) (10,225 ) (102 ) (29,520 ) Income (loss) on sale of discontinued agribusiness operations, net of tax 2 (1,348 ) (1,858 ) (18,251 ) Net loss from discontinued agribusiness operations, net of tax (16 ) (11,573 ) (1,960 ) (47,771 ) Net (income) loss from discontinued agribusiness operations attributable to noncontrolling interests (16 ) 1,730 Net loss from discontinued agribusiness operations attributable to PICO Holdings, Inc. $ (16 ) $ (11,589 ) $ (1,960 ) $ (46,041 ) The following table presents the details of the Company’s assets and liabilities classified as held-for-sale in the condensed consolidated balance sheets (in thousands): September 30, 2016 December 31, 2015 Assets Cash and cash equivalents $ 438 $ 938 Accounts receivable 5,991 7,800 Other assets 82 55 Total agribusiness assets held-for-sale 6,511 8,793 Real estate (1) 3,400 Oil and gas assets (1) 989 Total assets held-for-sale $ 10,900 $ 8,793 Liabilities Total agribusiness liabilities held-for-sale 276 608 Oil and gas liabilities (1) 627 Total liabilities held-for-sale $ 903 $ 608 (1) See Note 12 “Subsequent Events.” |
Basis of Presentation and Sum30
Basis of Presentation and Summary of Significant Accounting Policies (Details) $ in Millions | Dec. 31, 2015USD ($) |
Accounting Standards Update 2015-03 | |
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |
Debt issuance cost | $ 1.5 |
Real Estate and Tangible Wate31
Real Estate and Tangible Water Assets (Details) - USD ($) $ in Thousands | 9 Months Ended | 12 Months Ended |
Sep. 30, 2016 | Dec. 31, 2015 | |
Real Estate and Tangible Water Assets [Line Items] | ||
Real estate and improvements | $ 9,477 | $ 9,694 |
Residential real estate and home construction inventories | 382,219 | 362,056 |
Other real estate inventories completed or under development | 5,207 | 9,971 |
Tangible water assets | 42,498 | 42,514 |
Total real estate and tangible water assets | 439,401 | 424,235 |
Accumulated depreciation | 11,996 | 11,778 |
Loss on real estate | 2,397 | 274 |
Real estate | $ 5,600 | |
CALIFORNIA | ||
Real Estate and Tangible Water Assets [Line Items] | ||
Loss on real estate | 274 | |
Real estate | 3,400 | |
UCP | ||
Real Estate and Tangible Water Assets [Line Items] | ||
Loss on real estate | 923 | |
Real estate | $ 6,000 |
Intangible Assets and Goodwil32
Intangible Assets and Goodwill (Details) - USD ($) | 3 Months Ended | 9 Months Ended | 12 Months Ended |
Sep. 30, 2016 | Sep. 30, 2016 | Dec. 31, 2015 | |
Indefinite-lived Intangible Assets [Line Items] | |||
Intangible assets, net | $ 126,919,000 | $ 126,919,000 | $ 126,533,000 |
Intangibles impairment | 269,000 | ||
Goodwill | 0 | 0 | 4,200,000 |
Change in contingent consideration | 2,400,000 | ||
Loss on goodwill | 4,200,000 | 4,223,000 | |
Pipeline and Water Rights | |||
Indefinite-lived Intangible Assets [Line Items] | |||
Intangibles impairment | 0 | 269,000 | |
Fair value of intangibles | 3,000,000 | ||
Fish Springs Ranch | Pipeline and Water Rights | |||
Indefinite-lived Intangible Assets [Line Items] | |||
Intangible assets, net | 83,897,000 | 83,897,000 | 83,897,000 |
Carson-Lyon | |||
Indefinite-lived Intangible Assets [Line Items] | |||
Intangible assets, net | 25,569,000 | 25,569,000 | 24,831,000 |
Other Properties | |||
Indefinite-lived Intangible Assets [Line Items] | |||
Intangible assets, net | 17,453,000 | 17,453,000 | 17,805,000 |
Fair Value, Measurements, Recurring | |||
Indefinite-lived Intangible Assets [Line Items] | |||
Contingent consideration | 307,000 | 307,000 | 2,707,000 |
Fair Value, Measurements, Recurring | Fair Value, Inputs, Level 3 | |||
Indefinite-lived Intangible Assets [Line Items] | |||
Contingent consideration | $ 307,000 | $ 307,000 | $ 2,707,000 |
Income Approach Valuation Technique | Goodwill | |||
Indefinite-lived Intangible Assets [Line Items] | |||
Period | 10 years | ||
Discount rate | 14.50% | ||
Growth rate | 2.00% |
Investments (Details)
Investments (Details) - USD ($) $ in Thousands | Sep. 30, 2016 | Dec. 31, 2015 |
Schedule of Available-for-sale Securities | ||
Debt securities, Cost | $ 4,331 | $ 4,458 |
Debt securities, Carrying Value | 4,400 | 4,453 |
Total, Cost | 14,794 | 14,797 |
Total, Gross Unrealized Gains | 10,143 | 7,925 |
Total, Gross Unrealized Losses | (67) | (132) |
Total, Carrying Value | 24,870 | 22,590 |
Available-for-sale Securities, Debt Maturities [Abstract] | ||
Due in one year or less, Amortized Cost | 38 | |
Due after one year through five years, Amortized Cost | 4,331 | 2,603 |
Due after five years, Amortized Cost | 1,817 | |
Due in one year or less, Carrying Value | 37 | |
Due after one year through five years, Carrying Value | 4,400 | 2,566 |
Due after five years, Carrying Value | 1,850 | |
Corporate Bond Securities | ||
Schedule of Available-for-sale Securities | ||
Debt securities, Cost | 4,331 | 4,458 |
Debt securities, Gross Unrealized Gains | 91 | 46 |
Debt securities, Gross Unrealized Losses | (22) | (51) |
Debt securities, Carrying Value | 4,400 | 4,453 |
Equity Securities | ||
Schedule of Available-for-sale Securities | ||
Marketable equity securities, Cost | 10,463 | 10,339 |
Marketable equity securities, Gross Unrealized Gains | 10,052 | 7,879 |
Marketable equity securities, Gross Unrealized Losses | (45) | (81) |
Marketable equity securities, carrying value | $ 20,470 | $ 18,137 |
Investments - Schedule for Cost
Investments - Schedule for Cost and Equity Method Investments (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2016 | Sep. 30, 2015 | Sep. 30, 2016 | Sep. 30, 2015 | Dec. 31, 2015 | |
Schedule of Equity Method Investments [Line Items] | |||||
Other investments | $ 3,482 | $ 3,482 | $ 3,482 | ||
Equity in loss of unconsolidated affiliate | $ 1,942 | $ 3,422 | |||
Impairment on preferred shares | 20,696 | ||||
Synthonics | |||||
Schedule of Equity Method Investments [Line Items] | |||||
Cost method investments | $ 2,170 | $ 2,170 | $ 2,170 | ||
Cost method, ownership percentage | 18.20% | 18.20% | 18.20% | ||
Mindjet | |||||
Schedule of Equity Method Investments [Line Items] | |||||
Other investments | $ 2,300 | $ 2,300 | $ 2,200 | ||
Impairment on preferred shares | 20,700 | 20,700 | |||
Equity Securities | Mindjet | |||||
Schedule of Equity Method Investments [Line Items] | |||||
Cost method investments | $ 1,312 | $ 1,312 | $ 1,312 | ||
Voting interest percentage | 19.30% | 19.30% | 19.30% | ||
Equity method investments | $ 0 | $ 0 |
Disclosures About Fair Value -
Disclosures About Fair Value - Fair Value of Assets and Liabilities on a Recurring Basis (Details) - USD ($) | 9 Months Ended | |
Sep. 30, 2016 | Dec. 31, 2015 | |
Assets | ||
Available-for-sale Securities | $ 24,870,000 | $ 22,590,000 |
Citizens Homes, Inc. | ||
Liabilities | ||
Contingent consideration, maximum | $ 6,000,000 | |
Performance period for achievement of contingent consideration related milestones | 5 years | |
Contingent consideration, minimum | $ 0 | |
Growth rate | 4.50% | |
Cost inflation | 1.50% | |
Fair Value, Measurements, Recurring | ||
Assets | ||
Available-for-sale equity securities | $ 20,470,000 | 18,137,000 |
Available-for-sale debt securities | 4,400,000 | 4,453,000 |
Available-for-sale Securities | 24,870,000 | 22,590,000 |
Liabilities | ||
Contingent consideration | 307,000 | 2,707,000 |
Fair Value, Measurements, Recurring | Quoted Prices In Active Markets for Identical Assets (Level 1) | ||
Assets | ||
Available-for-sale equity securities | 12,611,000 | 10,685,000 |
Available-for-sale debt securities | 4,400,000 | 4,453,000 |
Available-for-sale Securities | 17,011,000 | 15,138,000 |
Fair Value, Measurements, Recurring | Significant Other Observable Inputs (Level 2) | ||
Assets | ||
Available-for-sale equity securities | 7,859,000 | 7,452,000 |
Available-for-sale debt securities | ||
Available-for-sale Securities | 7,859,000 | 7,452,000 |
Fair Value, Measurements, Recurring | Significant Unobservable Inputs (Level 3) | ||
Liabilities | ||
Contingent consideration | $ 307,000 | $ 2,707,000 |
Disclosures About Fair Value 36
Disclosures About Fair Value - Fair Value Measurements on a Non-Recurring Basis (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | 12 Months Ended |
Sep. 30, 2016 | Sep. 30, 2016 | Dec. 31, 2015 | |
Fair Value Measurements, Recurring and Nonrecurring, Valuation Techniques [Line Items] | |||
Loss on intangible assets | $ 269 | ||
Loss on goodwill | $ 4,200 | $ 4,223 | |
Loss on oil and gas wells | 201 | 1,816 | |
Loss on real estate | 2,397 | 274 | |
Loss on real estate | 191 | 923 | |
Loss on investments in unconsolidated affiliates equity securities held at cost | 20,696 | ||
Fair Value, Measurements, Nonrecurring | Fair Value, Inputs, Level 3 | |||
Fair Value Measurements, Recurring and Nonrecurring, Valuation Techniques [Line Items] | |||
Intangible water assets | 3,023 | ||
Goodwill | 0 | 0 | |
Oil and gas wells | 0 | 0 | 2,542 |
Real estate and development costs | 5,645 | 5,645 | 3,400 |
Real estate and development costs | $ 1,066 | $ 1,066 | 5,960 |
Investment in unconsolidated affiliates equity securities held at cost | $ 2,163 |
Disclosures About Fair Value 37
Disclosures About Fair Value - Carrying Values and Estimated Fair Values (Details) - USD ($) $ in Thousands | Sep. 30, 2016 | Dec. 31, 2015 |
Carrying Amount | ||
Financial assets: | ||
Investments in unconsolidated affiliates’ equity securities | $ 3,482 | $ 3,482 |
Financial liabilities: | ||
Debt | 157,785 | 155,966 |
Estimated Fair Value | ||
Financial assets: | ||
Investments in unconsolidated affiliates’ equity securities | 3,482 | 3,482 |
Financial liabilities: | ||
Debt | $ 167,376 | $ 166,769 |
Debt (Details)
Debt (Details) - USD ($) | 3 Months Ended | 9 Months Ended | ||||
Sep. 30, 2016 | Sep. 30, 2015 | Sep. 30, 2016 | Sep. 30, 2015 | Dec. 31, 2015 | Dec. 31, 2014 | |
Debt Instrument [Line Items] | ||||||
Debt | $ 157,785,000 | $ 157,785,000 | $ 155,966,000 | |||
Interest costs capitalized | 3,200,000 | $ 3,100,000 | 9,300,000 | $ 8,500,000 | ||
Restricted net assets | 128,900,000 | 128,900,000 | ||||
Real estate operations | ||||||
Debt Instrument [Line Items] | ||||||
Line of credit | 228,200,000 | 228,200,000 | 232,600,000 | |||
Line of Credit | Real estate operations | ||||||
Debt Instrument [Line Items] | ||||||
Unused capacity | $ 69,600,000 | $ 69,600,000 | $ 75,100,000 | |||
Mortgage debt | ||||||
Debt Instrument [Line Items] | ||||||
Weighted average interest rate | 6.50% | 6.50% | 6.40% | |||
No stated interest, payments through 2017 | Mortgage debt | ||||||
Debt Instrument [Line Items] | ||||||
Stated interest rate (percent) | 0.00% | 0.00% | ||||
Mortgages | $ 1,935,000 | |||||
3% to 4.75% payments through 2017 | Mortgage debt | ||||||
Debt Instrument [Line Items] | ||||||
Mortgages | $ 68,705,000 | $ 68,705,000 | 67,336,000 | |||
3% to 4.75% payments through 2017 | Mortgage debt | Minimum | ||||||
Debt Instrument [Line Items] | ||||||
Stated interest rate (percent) | 3.00% | 3.00% | ||||
3% to 4.75% payments through 2017 | Mortgage debt | Maximum | ||||||
Debt Instrument [Line Items] | ||||||
Stated interest rate (percent) | 4.75% | 4.75% | ||||
5% to 5.5% payments through 2016 | Mortgage debt | ||||||
Debt Instrument [Line Items] | ||||||
Mortgages | $ 9,372,000 | $ 9,372,000 | 7,636,000 | |||
5% to 5.5% payments through 2016 | Mortgage debt | Minimum | ||||||
Debt Instrument [Line Items] | ||||||
Stated interest rate (percent) | 5.00% | 5.00% | ||||
5% to 5.5% payments through 2016 | Mortgage debt | Maximum | ||||||
Debt Instrument [Line Items] | ||||||
Stated interest rate (percent) | 5.50% | 5.50% | ||||
8% payments through 2018 | Mortgage debt | ||||||
Debt Instrument [Line Items] | ||||||
Stated interest rate (percent) | 8.00% | 8.00% | ||||
Mortgages | $ 3,982,000 | $ 3,982,000 | 3,975,000 | |||
8.5% Senior Notes Due in 2017 | Senior Notes | ||||||
Debt Instrument [Line Items] | ||||||
Debt issued | $ 75,000,000 | |||||
8.5% Senior Notes Due in 2017 | Mortgage debt | ||||||
Debt Instrument [Line Items] | ||||||
Stated interest rate (percent) | 8.50% | 8.50% | ||||
Mortgages | $ 74,122,000 | $ 74,122,000 | 73,480,000 | |||
8.5% Senior Notes Due in 2017 | UCP | Senior Notes | ||||||
Debt Instrument [Line Items] | ||||||
Maximum debt to tangible assets ratio allowed per covenant (percent) | 45.00% | |||||
Maximum secured debt allowed per covenant | $ 75,000,000 | |||||
Maximum secured debt to tangible assets ratio allowed per covenant (percent) | 30.00% | |||||
Maximum annual acquisition of unimproved real property allowed per covenant | $ 75,000,000 | |||||
Maximum acquisition of unimproved real property allowed per covenant over the term of debt agreement | $ 150,000,000 | |||||
10% payments through 2017 | Mortgage debt | ||||||
Debt Instrument [Line Items] | ||||||
Stated interest rate (percent) | 10.00% | 10.00% | ||||
Mortgages | $ 1,604,000 | $ 1,604,000 | $ 1,604,000 |
Commitments and Contingencies -
Commitments and Contingencies - Lease Commitments (Details) $ in Thousands | Sep. 30, 2016USD ($) |
Commitments and Contingencies Disclosure [Abstract] | |
2,016 | $ 372 |
2,017 | 1,230 |
2,018 | 936 |
2,019 | 413 |
2,020 | 213 |
Thereafter | 18 |
Total | $ 3,182 |
Commitments and Contingencies40
Commitments and Contingencies - Rent Expense (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2016 | Sep. 30, 2015 | Sep. 30, 2016 | Sep. 30, 2015 | |
Leases [Abstract] | ||||
Rent | $ 469 | $ 511 | $ 1,500 | $ 1,700 |
Accumulated Other Comprehensi41
Accumulated Other Comprehensive Income (Details 1) - USD ($) $ in Thousands | Sep. 30, 2016 | Jun. 30, 2016 | Dec. 31, 2015 | Sep. 30, 2015 | Jun. 30, 2015 | Dec. 31, 2014 |
Equity [Abstract] | ||||||
Net unrealized gain on available-for-sale investments | $ 6,549 | $ 5,065 | ||||
Foreign currency translation | (47) | (104) | ||||
Accumulated other comprehensive income | $ 6,502 | $ 5,517 | $ 4,961 | $ 4,927 | $ 4,963 | $ 4,717 |
Accumulated Other Comprehensi42
Accumulated Other Comprehensive Income (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2016 | Sep. 30, 2015 | Sep. 30, 2016 | Sep. 30, 2015 | Dec. 31, 2015 | |
Equity [Abstract] | |||||
Deferred income tax liability | $ 3,500 | $ 3,500 | $ 2,800 | ||
Accumulated Other Comprehensive Income (Loss), Net of Tax [Roll Forward] | |||||
Beginning balance | 5,517 | $ 4,963 | 4,961 | $ 4,717 | |
Unrealized loss reclassified and recognized in net loss, net of tax | (95) | (71) | (181) | (377) | |
Foreign exchange reclassified and recognized in net loss, net of tax | 2 | 342 | |||
Total reclassified and recognized in net loss, net of tax | (95) | (69) | (181) | (35) | |
Unrealized gain on marketable securities, net of tax | 1,049 | 83 | 1,665 | 672 | |
Accumulated currency, net of tax | 31 | (50) | 57 | (427) | |
Total other comprehensive income (loss), net of tax | 985 | (36) | 1,541 | 210 | |
Accumulated other comprehensive income | $ 6,502 | $ 4,927 | $ 6,502 | $ 4,927 |
Related-Party Transactions (Det
Related-Party Transactions (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||||
Sep. 30, 2016 | Sep. 30, 2015 | Sep. 30, 2016 | Sep. 30, 2015 | Oct. 12, 2016 | Dec. 31, 2015 | |
Related Party Transaction [Line Items] | ||||||
Deferred compensation | $ 26,744 | $ 26,744 | $ 25,493 | |||
Fair value of common stock | 653 | 653 | 805 | |||
Deferred compensation expense | $ 1,800 | $ 90 | $ 2,800 | $ 1,100 | ||
Issued (in shares) | 22,644 | 22,644 | ||||
Synthonics | ||||||
Related Party Transaction [Line Items] | ||||||
Cost method investments | $ 2,170 | $ 2,170 | $ 2,170 | |||
Cost method, ownership percentage | 18.20% | 18.20% | 18.20% | |||
Chief Executive Officer | Subsequent Event | ||||||
Related Party Transaction [Line Items] | ||||||
Deferred compensation to be paid out | $ 22,800 |
Segment Reporting - Assets and
Segment Reporting - Assets and Liabilities (Details) - USD ($) $ in Thousands | Sep. 30, 2016 | Dec. 31, 2015 |
Segment Reporting, Asset Reconciling Item | ||
Assets | $ 660,521 | $ 662,085 |
Water resource and water storage operations | ||
Segment Reporting, Asset Reconciling Item | ||
Assets | 185,380 | 185,037 |
Real estate operations | ||
Segment Reporting, Asset Reconciling Item | ||
Assets | 426,751 | 421,411 |
Corporate | ||
Segment Reporting, Asset Reconciling Item | ||
Assets | 41,879 | 46,844 |
Discontinued agribusiness operations | ||
Segment Reporting, Asset Reconciling Item | ||
Assets | $ 6,511 | $ 8,793 |
Segment Reporting - Revenue (De
Segment Reporting - Revenue (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2016 | Sep. 30, 2015 | Sep. 30, 2016 | Sep. 30, 2015 | |
Segment Reporting, Revenue Reconciling Item | ||||
Revenues | $ 96,708 | $ 78,091 | $ 249,454 | $ 158,523 |
Income (loss) from continuing operations before income taxes and equity in loss of unconsolidated affiliates | (2,247) | 1,099 | (9,836) | (34,816) |
Water resource and water storage operations | ||||
Segment Reporting, Revenue Reconciling Item | ||||
Revenues | 553 | 3,468 | 813 | 4,191 |
Income (loss) from continuing operations before income taxes and equity in loss of unconsolidated affiliates | (1,029) | 834 | (4,263) | (1,907) |
Real estate operations | ||||
Segment Reporting, Revenue Reconciling Item | ||||
Revenues | 95,567 | 73,777 | 246,731 | 172,243 |
Income (loss) from continuing operations before income taxes and equity in loss of unconsolidated affiliates | 2,876 | 3,839 | 4,713 | (1,661) |
Corporate | ||||
Segment Reporting, Revenue Reconciling Item | ||||
Revenues | 588 | 846 | 1,910 | (17,911) |
Income (loss) from continuing operations before income taxes and equity in loss of unconsolidated affiliates | $ (4,094) | $ (3,574) | $ (10,286) | $ (31,248) |
Discontinued Agribusiness Ope46
Discontinued Agribusiness Operations and Other Assets Held for Sale - Narrative (Details) - Agribusiness - Discontinued Operations, Disposed of by Sale $ in Millions | 3 Months Ended |
Sep. 30, 2015USD ($) | |
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |
Gross selling price | $ 105.3 |
Debt | 80.9 |
Selling and other related costs | 5.9 |
Net proceeds | 18.4 |
Escrow deposit | 10.2 |
Indemnification Agreement | |
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |
Escrow deposit | $ 6 |
Period of guarantee | 5 years |
Performance Guarantee | |
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |
Escrow deposit | $ 4.2 |
Performance Guarantee, Air Quality | |
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |
Escrow deposit | 2.4 |
Performance Guarantee, Waste Water | |
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |
Escrow deposit | 1.8 |
Maximum | Indemnification Agreement | |
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |
Indemnification claims guaranteed in excess of escrow | $ 8 |
Discontinued Agribusiness Ope47
Discontinued Agribusiness Operations and Other Assets Held for Sale - Tables (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2016 | Sep. 30, 2015 | Sep. 30, 2016 | Sep. 30, 2015 | Dec. 31, 2015 | |
Cost of goods sold: | |||||
Loss from discontinued agribusiness operations, net of tax | $ (18) | $ (10,225) | $ (102) | $ (29,520) | |
Income (loss) on sale of discontinued agribusiness operations, net of tax | 2 | (1,348) | (1,858) | (18,251) | |
Net loss from discontinued agribusiness operations, net of tax | (16) | (11,573) | (1,960) | (47,771) | |
Assets | |||||
Cash and cash equivalents | 438 | 1,773 | 438 | 1,773 | |
Total assets held-for-sale | 10,900 | 10,900 | $ 8,793 | ||
Liabilities | |||||
Liabilities held-for-sale | 903 | 903 | 608 | ||
Agribusiness | Discontinued Operations, Disposed of by Sale | |||||
Revenues and other income: | |||||
Sales of canola oil and meal | 9,600 | 82,267 | |||
Other | 18 | (50) | |||
Total revenue and other income | 9,618 | 82,217 | |||
Cost of goods sold: | |||||
Cost of canola oil and meal sold | 8,738 | 79,763 | |||
Depreciation | 18 | 4,360 | |||
Other direct costs of production | 1,155 | 5,938 | |||
Total cost of goods sold | 9,911 | 90,061 | |||
Depreciation | 95 | ||||
Impairment loss on intangible and long-lived assets | 1,875 | ||||
Interest | 428 | 3,259 | |||
Plant costs and overhead | 18 | 9,504 | 102 | 16,447 | |
Segment total expenses | 18 | 19,843 | 102 | 111,737 | |
Loss from discontinued agribusiness operations, net of tax | (18) | (10,225) | (102) | (29,520) | |
Income (loss) on sale of discontinued agribusiness operations, net of tax | 2 | (1,348) | (1,858) | (18,251) | |
Net loss from discontinued agribusiness operations, net of tax | (16) | (11,573) | (1,960) | (47,771) | |
Net (income) loss from discontinued agribusiness operations attributable to noncontrolling interests | (16) | 1,730 | |||
Net loss from discontinued agribusiness operations attributable to PICO Holdings, Inc. | (16) | $ (11,589) | (1,960) | $ (46,041) | |
Assets | |||||
Cash and cash equivalents | 438 | 438 | 938 | ||
Accounts receivable | 5,991 | 5,991 | 7,800 | ||
Other assets | 82 | 82 | 55 | ||
Total assets held-for-sale | 6,511 | 6,511 | 8,793 | ||
Liabilities | |||||
Liabilities held-for-sale | 276 | 276 | $ 608 | ||
Real estate operations | Disposal Group, Held-for-sale, Not Discontinued Operations | |||||
Assets | |||||
Total assets held-for-sale | 3,400 | 3,400 | |||
Oil and gas | Disposal Group, Held-for-sale, Not Discontinued Operations | |||||
Assets | |||||
Total assets held-for-sale | 989 | 989 | |||
Liabilities | |||||
Liabilities held-for-sale | $ 627 | $ 627 |
Subsequent Events (Details)
Subsequent Events (Details) - Subsequent Event $ in Thousands | Oct. 01, 2016USD ($) | Oct. 31, 2016USD ($)a | Dec. 31, 2016USD ($) | Oct. 12, 2016USD ($) |
Subsequent Event [Line Items] | ||||
Selling price | $ 10,200 | |||
Escrow deposit | 587 | |||
Proceeds from sale of assets/business | 9,200 | |||
Gain on sale | $ 8,600 | |||
Chief Executive Officer | ||||
Subsequent Event [Line Items] | ||||
Severance | $ 10,400 | |||
Vacation | $ 339 | |||
Fresno, California | ||||
Subsequent Event [Line Items] | ||||
Area (in acres) | a | 32 | |||
Proceeds from sale of land | $ 3,400 | |||
Indemnification Agreement | ||||
Subsequent Event [Line Items] | ||||
Indemnification | $ 1,000 |