Vidler Water Resources (VWTR) 10-Q 8 May 20 2020 Q1 Quarterly report Financial data

Document and Entity Information

Document and Entity Information - shares	3 Months Ended
	Mar. 31, 2020	Apr. 30, 2020
Document and Entity Information [Abstract]
Document Type	10-Q
Amendment Flag	false
Document Fiscal Period Focus	Q1
Document Period End Date	Mar. 31, 2020
Document Fiscal Year Focus	2020
Current Fiscal Year End Date	--12-31
Entity Registrant Name	PICO HOLDINGS INC /NEW
Entity Central Index Key	0000830122
Entity Current Reporting Status	Yes
Entity Interactive Data Current	Yes
Entity Filer Category	Accelerated Filer
Entity Emerging Growth Company	false
Entity Small Business	true
Entity Shell Company	false
Entity Common Stock, Shares Outstanding		19,313,489

Condensed Consolidated Balance

Condensed Consolidated Balance Sheets - Unaudited - USD ($) $ in Thousands	Mar. 31, 2020	Dec. 31, 2019
Assets
Cash and cash equivalents	$ 11,623	$ 18,169
Real estate and tangible water assets, net	39,392	39,398
Intangible assets	122,337	122,343
Right of use assets, net	76	166
Other assets	1,109	1,013
Total assets	174,537	181,089
Liabilities and equity
Lease liabilities	76	166
Other liabilities	1,078	2,359
Accounts payable and accrued expenses	93	309
Total liabilities	1,247	2,834
Commitments and contingencies
Preferred stock, $0.001 par value; authorized 10,000 shares, none issued
Common stock, $0.001 par value; authorized 100,000 shares, 19,430 issued and 19,385 outstanding at March 31, 2020, and 20,067 issued and 19,783 outstanding at December 31, 2019	19	20
Additional paid-in capital	339,444	345,234
Accumulated deficit	(165,821)	(164,010)
Treasury stock, at cost (common shares: 45 at March 31, 2020 and 284 at December 31, 2019)	(352)	(2,989)
Total shareholders’ equity	173,290	178,255
Total liabilities and shareholders’ equity	$ 174,537	$ 181,089

Condensed Consolidated Balanc_2

Condensed Consolidated Balance Sheets - Unaudited (Parenthetical) - $ / shares	Mar. 31, 2020	Dec. 31, 2019
Preferred stock
Par value (in dollars per share)	$ 0.001	$ 0.001
Shares authorized (in shares)	10,000,000	10,000,000
Shares issued (in shares)	0	0
Common stock
Par value (in dollars per share)	$ 0.001	$ 0.001
Shares authorized (in shares)	100,000,000	100,000,000
Shares issued (in shares)	19,430,000	20,067,000
Shares outstanding (in shares)	19,385,000	19,783,000
Treasury stock
Common shares held (in shares)	45,000	284,000

Condensed Consolidated Statemen

Condensed Consolidated Statements of Operations - Unaudited - USD ($) shares in Thousands, $ in Thousands	3 Months Ended
	Mar. 31, 2020	Mar. 31, 2019
Revenues and other income:
Sale of real estate and water assets	$ 40	$ 11,982
Other income, net	189	138
Total revenues and other income	229	12,120
Cost of sales and expenses:
Cost of real estate and water assets sold	13	2,582
General, administrative, and other	1,925	2,749
Depreciation and amortization	102	105
Total cost of sales and expenses	2,040	5,436
Net income (loss)	$ (1,811)	$ 6,684
Net income (loss) per common share – basic and diluted (in dollars per share)	$ (0.09)	$ 0.33
Weighted average shares outstanding (in shares)	19,654	20,539

Condensed Consolidated Statem_2

Condensed Consolidated Statements of Equity - Unaudited - USD ($) $ in Thousands	Total	Common Stock	Additional Paid-in Capital	Accumulated Deficit	Treasury Stock
Beginning balance (in shares) at Dec. 31, 2018		20,848,000
Beginning balance at Dec. 31, 2018	$ 176,624	$ 21	$ 353,250	$ (175,536)	$ (1,111)
Beginning balance, treasury stock (in shares) at Dec. 31, 2018					121,000
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Stock-based compensation expense	22		22
Purchases of treasury stock (in shares)					420,000
Purchases of treasury stock	(4,340)				$ (4,340)
Retirement of treasury stock (in shares)		(529,000)			(529,000)
Retirement of treasury stock	0	$ (1)	(5,328)		$ 5,329
Net income (loss)	6,684			6,684
Ending balance (in shares) at Mar. 31, 2019		20,319,000
Ending balance at Mar. 31, 2019	$ 178,990	$ 20	347,944	(168,852)	$ (122)
Ending balance, treasury stock (in shares) at Mar. 31, 2019					12,000
Beginning balance (in shares) at Dec. 31, 2019	20,067,000	20,067,000
Beginning balance at Dec. 31, 2019	$ 178,255	$ 20	345,234	(164,010)	$ (2,989)
Beginning balance, treasury stock (in shares) at Dec. 31, 2019	284,000				284,000
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Stock-based compensation expense	$ 475		475
Purchases of treasury stock (in shares)					398,000
Purchases of treasury stock	(3,629)				$ (3,629)
Retirement of treasury stock (in shares)		(637,000)			(637,000)
Retirement of treasury stock	0	$ (1)	(6,265)		$ 6,266
Net income (loss)	$ (1,811)			(1,811)
Ending balance (in shares) at Mar. 31, 2020	19,430,000	19,430,000
Ending balance at Mar. 31, 2020	$ 173,290	$ 19	$ 339,444	$ (165,821)	$ (352)
Ending balance, treasury stock (in shares) at Mar. 31, 2020	45,000				45,000

Condensed Consolidated Statem_3

Condensed Consolidated Statements of Cash Flows - Unaudited - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2020	Mar. 31, 2019
Operating activities:
Cash provided by (used in) operating activities	$ (2,875)	$ 8,966
Net cash provided by (used in) operating activities	(2,875)	8,966
Investing activities:
Purchases of property, plant and equipment	(66)	0
Proceeds from sale of property, plant and equipment	24	0
Net cash used in investing activities	(42)	0
Financing activities:
Purchases of treasury stock	(3,629)	(4,340)
Net cash used in financing activities	(3,629)	(4,340)
Increase (decrease) in cash and cash equivalents	(6,546)	4,626
Cash and cash equivalents, beginning of the period	18,169	12,550
Cash and cash equivalents, end of the period	$ 11,623	$ 17,176

Basis of Presentation and Summa

Basis of Presentation and Summary of Significant Accounting Policies	3 Months Ended
	Mar. 31, 2020
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 generally accepted accounting principles 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, 2020 . 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, 2019 filed with the SEC. Smaller Reporting Company The Company qualifies as a smaller reporting company (“SRC”) under the SEC’s definition and therefore certain disclosures that are no longer required have been removed in accordance with the SEC’s disclosure requirements for SRCs. 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 intangibles, real estate and water assets, deferred income taxes, stock based compensation and contingent liabilities. While management believes that the carrying value of such asset and liabilities were appropriate as of March 31, 2020 and comparative periods, it is reasonably possible that actual results could differ from the estimates upon which the carrying values were based. Recent Accounting Pronouncements In February 2016, the Financial Accounting Standards Board (“FASB”) issued guidance which establishes a right-of-use model that requires a lessee to record a right-of-use (“ROU”) asset and a lease liability on the balance sheet for all leases with terms longer than twelve months. Leases will be classified as either "finance" or "operating," with classification affecting the pattern of expense recognition in the income statement. This update requires a modified retrospective transition as of the beginning of the earliest comparative period presented in the financial statements. This update is effective for fiscal years beginning after December 15, 2018, and interim periods within those fiscal years. Early adoption is permitted. The Company adopted this lease standard effective January 1, 2019, applying an optional transition method that will allow the Company to continue to apply the current guidance of ASC 840 in the comparative periods in the year of adoption. The Company has elected the “package of practical expedients,” which permits the Company not to reassess prior conclusions about lease identification, lease classification and initial direct costs. The Company has also made an accounting policy election to not recognize ROU assets or lease liabilities for leases with terms of 12 months or less. The adoption of this guidance has resulted in the recording of additional ROU assets and lease liabilities for operating leases of $522,000 as of January 1, 2019. The adoption of this guidance did not have an impact on net income.

Tangible Water Assets and Real

Tangible Water Assets and Real Estate, Net	3 Months Ended
	Mar. 31, 2020
Real Estate [Abstract]
Tangible Water Assets and Real Estate, Net	Tangible Water Assets and Real Estate, Net The costs assigned to the various components of tangible water assets and real estate, net, were as follows (in thousands): March 31, 2020 December 31, 2019 Real estate and improvements held and used, net of accumulated depreciation of $12,003 at each of March 31, 2020 and December 31, 2019 $ 9,469 $ 9,469 Other real estate inventories 3,359 3,359 Tangible water assets 26,564 26,570 Total real estate and tangible water assets $ 39,392 $ 39,398

Intangible Assets

Intangible Assets	3 Months Ended
	Mar. 31, 2020
Goodwill and Intangible Assets Disclosure [Abstract]
Intangible Assets	Intangible Assets The Company owned the following intangible assets, which primarily represent indefinite-lived intangible water assets (in thousands): March 31, 2020 December 31, 2019 Pipeline rights and water credits at Fish Springs Ranch $ 81,719 $ 81,724 Pipeline rights and water rights at Carson-Lyon 25,643 25,644 Other 14,975 14,975 Total intangible assets $ 122,337 $ 122,343

Leases

Leases	3 Months Ended
	Mar. 31, 2020
Leases [Abstract]
Leases	Leases The Company has operating leases for two offices (Carson City, Nevada and La Jolla, California) which include monthly rental payments. Leases consisted of the following (in thousands): Leases March 31, 2020 December 31, 2019 Assets Operating lease ROU assets, net (1) $ 76 $ 166 Liabilities Operating lease liabilities $ 76 $ 166 Weighted Average Remaining Lease Term 0.2 years 0.5 years (1) Operating lease ROU assets are recorded net of accumulated amortization of $446,000 and $ 356,000 as of March 31, 2020 and December 31, 2019 respectively. Supplemental cash flow information related to leases is as follows (in thousands): Three Months Ended March 31, 2020 Three Months Ended March 31, 2019 Cash paid for amounts included in the measurement of lease liabilities: Operating cash flows for operating leases $ 90 $ 88

Commitments and Contingencies

Commitments and Contingencies	3 Months Ended
	Mar. 31, 2020
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 2020. Rent expense for office space was $90,000 and $88,000 for the three months ended March 31, 2020 and 2019 respectively. Future minimum payments under all operating leases are as follows (in thousands): Year ending December 31, 2020 $ 76 2021 — Total $ 76 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.

Subsequent Events

Subsequent Events	3 Months Ended
	Mar. 31, 2020
Subsequent Events [Abstract]
Subsequent Events	Subsequent Events On May 1, 2020 the Company closed the sale of 470 acre feet of groundwater rights in Dodge Flat, Nevada for sale proceeds of $3.1 million and this transaction will be recorded and reported in our second quarter, 2020 results of operations.

Basis of Presentation and Sum_2

Basis of Presentation and Summary of Significant Accounting Policies (Policies)	3 Months Ended
	Mar. 31, 2020
Organization, Consolidation and Presentation of Financial Statements [Abstract]
Use of Estimates in Preparation of Financial Statements	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 intangibles, real estate and water assets, deferred income taxes, stock based compensation and contingent liabilities. While management believes that the carrying value of such asset and liabilities were appropriate as of March 31, 2020 and comparative periods, it is reasonably possible that actual results could differ from the estimates upon which the carrying values were based.
Recent Accounting Pronouncements	Recent Accounting Pronouncements In February 2016, the Financial Accounting Standards Board (“FASB”) issued guidance which establishes a right-of-use model that requires a lessee to record a right-of-use (“ROU”) asset and a lease liability on the balance sheet for all leases with terms longer than twelve months. Leases will be classified as either "finance" or "operating," with classification affecting the pattern of expense recognition in the income statement. This update requires a modified retrospective transition as of the beginning of the earliest comparative period presented in the financial statements. This update is effective for fiscal years beginning after December 15, 2018, and interim periods within those fiscal years. Early adoption is permitted. The Company adopted this lease standard effective January 1, 2019, applying an optional transition method that will allow the Company to continue to apply the current guidance of ASC 840 in the comparative periods in the year of adoption. The Company has elected the “package of practical expedients,” which permits the Company not to reassess prior conclusions about lease identification, lease classification and initial direct costs. The Company has also made an accounting policy election to not recognize ROU assets or lease liabilities for leases with terms of 12 months or less. The adoption of this guidance has resulted in the recording of additional ROU assets and lease liabilities for operating leases of $522,000 as of January 1, 2019. The adoption of this guidance did not have an impact on net income.

Tangible Water Assets and Rea_2

Tangible Water Assets and Real Estate, Net (Tables)	3 Months Ended
	Mar. 31, 2020
Real Estate [Abstract]
Costs Assigned to Various Components of Tangible Water Assets and Real Estate, Net	The costs assigned to the various components of tangible water assets and real estate, net, were as follows (in thousands): March 31, 2020 December 31, 2019 Real estate and improvements held and used, net of accumulated depreciation of $12,003 at each of March 31, 2020 and December 31, 2019 $ 9,469 $ 9,469 Other real estate inventories 3,359 3,359 Tangible water assets 26,564 26,570 Total real estate and tangible water assets $ 39,392 $ 39,398

Intangible Assets (Tables)

Intangible Assets (Tables)	3 Months Ended
	Mar. 31, 2020
Goodwill and Intangible Assets Disclosure [Abstract]
Intangible Assets	The Company owned the following intangible assets, which primarily represent indefinite-lived intangible water assets (in thousands): March 31, 2020 December 31, 2019 Pipeline rights and water credits at Fish Springs Ranch $ 81,719 $ 81,724 Pipeline rights and water rights at Carson-Lyon 25,643 25,644 Other 14,975 14,975 Total intangible assets $ 122,337 $ 122,343

Leases (Tables)

Leases (Tables)	3 Months Ended
	Mar. 31, 2020
Leases [Abstract]
Leases Recorded on the Balance Sheet	Leases consisted of the following (in thousands): Leases March 31, 2020 December 31, 2019 Assets Operating lease ROU assets, net (1) $ 76 $ 166 Liabilities Operating lease liabilities $ 76 $ 166 Weighted Average Remaining Lease Term 0.2 years 0.5 years (1) Operating lease ROU assets are recorded net of accumulated amortization of $446,000 and $ 356,000 as of March 31, 2020 and December 31, 2019 respectively.
Supplemental Cash Flow Information Related to Leases	Supplemental cash flow information related to leases is as follows (in thousands): Three Months Ended March 31, 2020 Three Months Ended March 31, 2019 Cash paid for amounts included in the measurement of lease liabilities: Operating cash flows for operating leases $ 90 $ 88

Commitments and Contingencies (

Commitments and Contingencies (Tables)	3 Months Ended
	Mar. 31, 2020
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 ending December 31, 2020 $ 76 2021 — Total $ 76

Basis of Presentation and Sum_3

Basis of Presentation and Summary of Significant Accounting Policies (Details) - USD ($) $ in Thousands	Mar. 31, 2020	Dec. 31, 2019	Jan. 01, 2019
New Accounting Pronouncements or Change in Accounting Principle [Line Items]
ROU assets	$ 76	$ 166
Lease liabilities	$ 76	$ 166
ASU 2016-02
New Accounting Pronouncements or Change in Accounting Principle [Line Items]
ROU assets			$ 522
Lease liabilities			$ 522

Tangible Water Assets and Rea_3

Tangible Water Assets and Real Estate, Net (Details) - USD ($) $ in Thousands	Mar. 31, 2020	Dec. 31, 2019
Real Estate [Abstract]
Real estate and improvements held and used, net of accumulated depreciation of $12,003 at each of March 31, 2020 and December 31, 2019	$ 9,469	$ 9,469
Other real estate inventories	3,359	3,359
Tangible water assets	26,564	26,570
Total real estate and tangible water assets	39,392	39,398
Accumulated depreciation on real estate and improvements held and used	$ 12,003	$ 12,003

Intangible Assets (Details)

Intangible Assets (Details) - USD ($) $ in Thousands	Mar. 31, 2020	Dec. 31, 2019
Indefinite-lived Intangible Assets [Line Items]
Intangible assets	$ 122,337	$ 122,343
Pipeline rights and water credits at Fish Springs Ranch
Indefinite-lived Intangible Assets [Line Items]
Intangible assets	81,719	81,724
Pipeline rights and water rights at Carson-Lyon
Indefinite-lived Intangible Assets [Line Items]
Intangible assets	25,643	25,644
Other
Indefinite-lived Intangible Assets [Line Items]
Intangible assets	$ 14,975	$ 14,975

Leases - Leases Recorded on the

Leases - Leases Recorded on the Balance Sheet (Details) - USD ($) $ in Thousands	Mar. 31, 2020	Dec. 31, 2019
Assets
Operating lease ROU assets, net	$ 76	$ 166
Liabilities
Operating lease liabilities	$ 76	$ 166
Weighted Average Remaining Lease Term	2 months 12 days	6 months
Accumulated amortization related to operating lease ROU assets	$ 446	$ 356

Leases - Supplemental Cash Flow

Leases - Supplemental Cash Flow Information Related to Leases (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2020	Mar. 31, 2019
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows for operating leases	$ 90	$ 88

Commitments and Contingencies -

Commitments and Contingencies - Narrative (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2020	Mar. 31, 2019
Commitments and Contingencies Disclosure [Abstract]
Rent expense	$ 90	$ 88

Commitments and Contingencies_2

Commitments and Contingencies - Future Minimum Payments Under Operating Leases (Details) $ in Thousands	Mar. 31, 2020USD ($)
Commitments and Contingencies Disclosure [Abstract]
2020	$ 76
2021	0
Total	$ 76

Subsequent Events (Details)

Subsequent Events (Details) - Dodge Flats Groundwater Rights - Subsequent Event $ in Millions	May 01, 2020USD ($)a
Subsequent Event [Line Items]
Area of property (in acres) | a	470
Proceeds from sale of groundwater rights | $	$ 3.1