10-Q/A

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q/A

Amendment No. 3

(X) QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)

OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended January 31, 2012

( ) TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)

OF THE SECURITIES EXCHANGE ACT OF 1934

Commission File No.:      Blue Ridge 0-28-44

                                       Big Boulder 0-28-43

BLUE RIDGE REAL ESTATE COMPANY

BIG BOULDER CORPORATION

(exact name of Registrants as specified in their charters)

State or other jurisdiction of incorporation or organization: Pennsylvania

I.R.S. Employer Identification Number:     24-0854342 (Blue Ridge)   

                                                                24-0822326 (Big Boulder)   

          Address of principal executive office:   Route 940 and Moseywood Rd, Blakeslee, Pennsylvania

Zip Code:   18610                         

Registrants’ telephone number, including area code:   (570) 443-8433                                                                         

     Indicate by check mark whether the registrants (1) have filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such period that the registrants were required to file such reports) and (2) have been subject to such filing requirements for the past 90 days.

x YES         o NO

     Indicate by check mark whether the registrants have submitted electronically and posted on their corporate Web sites, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrants were required to submit and post such files).  

x YES         o NO

     Indicate by check mark whether the registrants are large accelerated filers, accelerated filers, non-accelerated filers or smaller reporting companies.  See definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.

Large Accelerated filer o

            Accelerated Filer o                

Non-Accelerated filer  x    (Do not check if smaller reporting company)

Smaller reporting company o

     Indicate by check mark whether the registrants are shell companies (as defined in Rule 12b-2 of the Exchange Act).

o YES          x NO

     The number of shares of the registrants’ common stock outstanding as of the close of business on March 14, 2012 was 2,450,424 shares.*

*Under a Security Combination Agreement between Blue Ridge Real Estate Company ("Blue Ridge") and Big Boulder Corporation ("Big Boulder") (together, the "Companies") and under the by-laws of the Companies, shares of the Companies are combined in unit certificates, each certificate representing the same number of shares of each of the Companies.  Shares of each Company may be transferred only together with an equal number of shares of the other Company.  For this reason, a combined Blue Ridge/Big Boulder Form 10-Q/A is being filed.  Except as otherwise indicated in this Quarterly Report on Form 10-Q/A, all information applies to both Companies.

EXPLANATORY NOTE

Blue Ridge Real Estate Company and Big Boulder Corporation are filing this Amendment No. 3 on Form 10-Q/A (the “Third Amendment”) to amend and restate the quarterly report on Form 10-Q of the Companies for the period ended January 31, 2012 as originally filed with the Securities and Exchange Commission  (the “SEC”) on March 15, 2012 (the “Original Filing”) and the Form 10-Q/A Amendment No. 1 (the “First Amendment”) filed on March 15, 2012, and the Form 10-Q/A Amendment No. 2 filed on November 29, 2012 (the “Second Amendment”) to furnish Exhibit 101 to the Form 10-Q/A, as required by Rule 405 of Regulation S-T. Exhibit 101 to this Third Amendment provides the following items from the Form 10/A Second Amendment formatted in Extensible Business Reporting Language (XBRL): (i) the Combined Balance Sheets; (ii) the Combined Statements of Operations; (iii) the Combined Statements of Changes in Shareholders’ Equity; and (v) the Combined Statements of Cash Flows and related notes.

This Third Amendment does not amend or update any other item or disclosure contained in the Original Filing, the First Amendment or the Second Amendment. This Form 10-Q/A is presented as of the filing date of the Original Filing and does not reflect events occurring after that date, or modify or update disclosures in any way other than as specifically noted above. Accordingly, this Form 10-Q/A should be read in conjunction with the Company’s other filings made with the Securities and Exchange Commission subsequent to the date of the Original 10-Q.

- 1 -

Item 6.  EXHIBITS

Exhibit Number	Description
10.1	$4,600,000 Amended and Restated Term Note, dated July 29, 2011, between Big Boulder Corporation, Blue Ridge Real Estate Company, BBC Holdings, Inc., BRRE Holdings, Inc., Northeast Land Company, Lake Mountain Company, Jack Frost Mountain Company, Boulder Creek Resort Company, Moseywood Construction Company, Jack Frost National Golf Course, Inc. and Manufacturers and Traders Trust Company. (filed August 12, 2011 as Exhibit 10.1 Form 8-K and incorporated herein by reference.)
10.2	$4,600,000 Amended and Restated Open-End Mortgage, dated July 29, 2011, between Blue Ridge Real Estate Company and Manufacturers and Traders Trust Company. (filed August 12, 2011 as Exhibit 10.2 Form 8-K and incorporated herein by reference.)
10.3	$4,600,000 Amended and Restated Open-End Mortgage, dated July 29, 2011, between Big Boulder Corporation and Manufacturers and Traders Trust Company. (filed August 12, 2011 as Exhibit 10.3 Form 8-K and incorporated herein by reference.)
10.4	$4,600,000 Amended and Restated Open-End Mortgage, dated July 29, 2011, between Northeast Land Company and Manufacturers and Traders Trust Company. (filed August 12, 2011 as Exhibit 10.4 Form 8-K and incorporated herein by reference.)
10.5	Purchase and Sale Agreement, dated October 31, 2011, between Blue Ridge Real Estate Company and JFBB Ski Areas, Inc.  (filed November 4, 2011 as Exhibit 10.1 to Form 8-K and incorporated herein by reference.)
10.6	Purchase and Sale Agreement, dated October 31, 2011, between Big Boulder Corporation and JFBB Ski Areas, Inc. (filed November 4, 2011 as Exhibit 10.2 to Form 8-K and incorporated herein by reference.)
10.7	Agreement of Sale, Phase 3, dated February 17, 2011 between Blue Ridge Real Estate Company and The Conservation Fund for the purchase of 376 acres located in Thornhurst Township, Lackawanna County, Pennsylvania. (filed February 18, 2011 as Exhibit 10.1 to Form 8-K and incorporated herein by reference.)
31.1*	Principal Executive Officer’s Rule 13a-14(a)/15d-14(a) Certification
31.2*	Principal Financial Officer’s Rule 13a-14(a)/15d-14(a) Certification
32.1*	Principal Executive Officer’s Section 1350 Certification
32.2*	Principal Financial Officer’s Section 1350 Certification
101.INS**	XBRL Instance Document
101.SCH**	XBRL Taxonomy Extension Schema Document
101.CAL**	XBRL Taxonomy Extension Calculation Linkbase Document
101.DEF**	XBRL Taxonomy Extension Definition Linkbase Document
101.LAB**	XBRL Taxonomy Extension Label Linkbase Document
101.PRE**	XBRL Taxonomy Extension Presentation Linkbase Document

* Filed herewith

**Furnished herewith

-2-

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrants have duly caused this report to be signed on their behalf by the undersigned thereunto duly authorized:

BLUE RIDGE REAL ESTATE COMPANY

BIG BOULDER CORPORATION

(Registrants)

Dated:   December 3, 2012

                        /s/ Bruce Beaty

Bruce Beaty

Chief Executive Officer and President

Dated:   December 3, 2012

                        /s/ Cynthia A. Van Horn

Cynthia A. Van Horn

Chief Financial Officer and Treasurer

(Principal Financial Officer)

- 3 -

EXHIBIT INDEX

Exhibit Number	Description
10.1	$4,600,000 Amended and Restated Term Note, dated July 29, 2011, between Big Boulder Corporation, Blue Ridge Real Estate Company, BBC Holdings, Inc., BRRE Holdings, Inc., Northeast Land Company, Lake Mountain Company, Jack Frost Mountain Company, Boulder Creek Resort Company, Moseywood Construction Company, Jack Frost National Golf Course, Inc. and Manufacturers and Traders Trust Company. (filed August 12, 2011 as Exhibit 10.1 Form 8-K and incorporated herein by reference.)
10.2	$4,600,000 Amended and Restated Open-End Mortgage, dated July 29, 2011, between Blue Ridge Real Estate Company and Manufacturers and Traders Trust Company. (filed August 12, 2011 as Exhibit 10.2 Form 8-K and incorporated herein by reference.)
10.3	$4,600,000 Amended and Restated Open-End Mortgage, dated July 29, 2011, between Big Boulder Corporation and Manufacturers and Traders Trust Company. (filed August 12, 2011 as Exhibit 10.3 Form 8-K and incorporated herein by reference.)
10.4	$4,600,000 Amended and Restated Open-End Mortgage, dated July 29, 2011, between Northeast Land Company and Manufacturers and Traders Trust Company. (filed August 12, 2011 as Exhibit 10.4 Form 8-K and incorporated herein by reference.)
10.5	Purchase and Sale Agreement, dated October 31, 2011, between Blue Ridge Real Estate Company and JFBB Ski Areas, Inc.  (filed November 4, 2011 as Exhibit 10.1 to Form 8-K and incorporated herein by reference.)
10.6	Purchase and Sale Agreement, dated October 31, 2011, between Big Boulder Corporation and JFBB Ski Areas, Inc. (filed November 4, 2011 as Exhibit 10.2 to Form 8-K and incorporated herein by reference.)
10.7	Agreement of Sale, Phase 3, dated February 17, 2011 between Blue Ridge Real Estate Company and The Conservation Fund for the purchase of 376 acres located in Thornhurst Township, Lackawanna County, Pennsylvania. (filed February 18, 2011 as Exhibit 10.1 to Form 8-K and incorporated herein by reference.)
31.1*	Principal Executive Officer’s Rule 13a-14(a)/15d-14(a) Certification
31.2*	Principal Financial Officer’s Rule 13a-14(a)/15d-14(a) Certification
32.1*	Principal Executive Officer’s Section 1350 Certification
32.2*	Principal Financial Officer’s Section 1350 Certification
101.INS**	XBRL Instance Document
101.SCH**	XBRL Taxonomy Extension Schema Document
101.CAL**	XBRL Taxonomy Extension Calculation Linkbase Document
101.DEF**	XBRL Taxonomy Extension Definition Linkbase Document
101.LAB**	XBRL Taxonomy Extension Label Linkbase Document
101.PRE**	XBRL Taxonomy Extension Presentation Linkbase Document

* Filed herewith

** Furnished herewith

-4-

EX-31

EXHIBIT 31.2

RULE 13a-14(a)/15d-14(a) CERTIFICATION

I, Cynthia A. Van Horn, certify that:

1. I have reviewed this Quarterly report on Form 10-Q/A for the period ended January 31, 2012 of Blue Ridge Real Estate Company and Big Boulder Corporation (together, the “Registrants”);

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the Registrants as of, and for, the periods presented in this report;

4. The Registrants’ other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f))for the Registrants and have:

(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the Registrants, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c) Evaluated the effectiveness of the Registrants’ disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d) Disclosed in this report any change in the Registrants’ internal control over financial reporting that occurred during the Registrants’ most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, the Registrants’ internal control over financial reporting; and

5. The Registrants’ other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the Registrants’ auditors and the audit committee of the Registrants’ boards of directors (or persons performing the equivalent functions):

(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the Registrants’ ability to record, process, summarize and report financial information; and

(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the Registrants’ internal control over financial reporting.

/s/ Cynthia A. Van Horn

Cynthia A. Van Horn

Chief Financial Officer and Treasurer

(Principal Financial Officer)

Date:  December 3, 2012

EX-31

EXHIBIT 31.1

RULE 13a-14(a)/15d-14(a) CERTIFICATION

I, Bruce Beaty, certify that:

1. I have reviewed this Quarterly report on Form 10-Q/A for the period ended January 31, 2012 of Blue Ridge Real Estate Company and Big Boulder Corporation (together, the “Registrants”);

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the Registrants as of, and for, the periods presented in this report;

4. The Registrants’ other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f))for the Registrants and have:

(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the Registrants, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c) Evaluated the effectiveness of the Registrants’ disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d) Disclosed in this report any change in the Registrants’ internal control over financial reporting that occurred during the Registrants’ most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, the Registrants’ internal control over financial reporting; and

5. The Registrants’ other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the Registrants’ auditors and the audit committee of the Registrants’ boards of directors (or persons performing the equivalent functions):

(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the Registrants’ ability to record, process, summarize and report financial information; and

(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the Registrants’ internal control over financial reporting.

/s/ Bruce Beaty

Bruce Beaty

Chief Executive Officer and President

Date:  December 3, 2012

EX-32

EXHIBIT 32.2

CERTIFICATION PURSUANT TO

18 U.S.C. SECTION 1350

I, Cynthia A. Van Horn, Chief Financial Officer and Treasurer of Blue Ridge Real Estate Company and Big Boulder Corporation (together, the “Registrants”), certify, pursuant to 18 U.S.C. §1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, to the best of my knowledge,that:

(1)

The Registrants’ Quarterly report on Form 10-Q/A for the period ended January 31, 2012, as filed with the Securities and Exchange Commission on the date hereof (the ”Report”), fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and

(2)

The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Registrants.

/s/ Cynthia A. Van Horn

Cynthia A. Van Horn

Chief Financial Officer

and Treasurer

(Principal Financial Officer)

December 3, 2012

EX-32

EXHIBIT 32.1

CERTIFICATION PURSUANT TO

18 U.S.C. SECTION 1350

I, Bruce Beaty, Chief Executive Officer and President of Blue Ridge Real Estate Company and Big Boulder Corporation (together, the “Registrants”), certify, pursuant to 18 U.S.C. §1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, to the best of my knowledge,that:

(1)

The Registrants’ Quarterly report on Form 10-Q/A for the period ended January 31, 2012, as filed with the Securities and Exchange Commission on the date hereof (the ”Report”), fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and

(2)

The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Registrants.

/s/ Bruce Beaty

Bruce Beaty

Chief Executive Officer and President

December 3, 2012

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Note 1. Basis of Combination

3 Months Ended

Jan. 31, 2012

Notes

Note 1. Basis of Combination

1. Basis of Combination

The accompanying unaudited combined financial  statements  include the accounts of Blue Ridge Real Estate Company and its wholly-owned  subsidiaries  (Northeast Land Company, Jack Frost Mountain Company, Boulder Creek Resort Company, Moseywood Construction Company, Jack Frost National Golf Course, Inc., Blue Ridge Acquisition Company, BRRE Holdings, Inc., Coursey Commons Shopping Center, LLC, Coursey Creek, LLC, Cobble Creek, LLC, Flower Fields Motel, LLC, Blue Ridge WNJ, LLC and Blue Ridge WMN, LLC) (collectively “Blue Ridge”) and Big Boulder Corporation and its  wholly-owned  subsidiaries  (Lake  Mountain  Company and BBC  Holdings, Inc.) (collectively “Big Boulder” and, together with Blue Ridge, the “Companies”).

The combined balance sheet as of October 31, 2011, which has been derived from audited financial statements, and the combined financial statements as of and for the three month periods ended January 31, 2012 and 2011, which are unaudited, are presented pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”). Accordingly, these combined financial statements should be read in conjunction with the combined financial statements and notes thereto contained in the Companies’ 2011 Annual Report on Form 10-K. In the opinion of management, the accompanying combined financial statements reflect all adjustments (which are of a normal recurring nature) necessary for a fair statement of the results for the interim periods.  All significant intercompany accounts and transactions are eliminated.

Due to intermittent revenues from land resource management, the results of operations for any interim period are not necessarily indicative of the results expected for the full fiscal year.

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COMBINED STATEMENTS OF CASH FLOWS (USD $)	3 Months Ended
	Jan. 31, 2012	Jan. 31, 2011
Cash Flows Provided By (Used In) Operating Activities:
Net loss		$ (460,652)
Unaudited
Cash Flows Provided By (Used In) Operating Activities:
Net loss	(503,429)	(460,652)
Adjustments to reconcile net loss to net cash provided by (used in) operating activities:
Depreciation and amortization	318,342	351,306
Net book value of properties sold	2,086,150	0
Deferred income taxes	(260,000)	(238,000)
Changes in operating assets and liabilities:
Cash held in escrow	(150,711)	109,064
Accounts receivable and mortgages receivable	(257,283)	(175,118)
Prepaid expenses and other current assets	1,112,135	93,462
Land and land development costs	(5,414)	27,971
Long-lived assets held for sale	592,098	283,837
Accounts payable and accrued liabilities	(560,980)	(617,145)
Deferred revenue	(10,055)	121,319
Net cash provided by (used in) operating activities	2,360,853	(503,956)
Cash Flows Provided By (Used In) Investing Activities:
Additions to properties	(44,318)	(190,316)
Payments received under direct financing lease arrangements	7,788,195	2,149
Net cash provided by (used in) investing activities	7,743,877	(188,167)
Cash Flows (Used In) Provided By Financing Activities:
Proceeds from debt	1,153,497	1,511,288
Payment of debt	(11,275,310)	(1,010,344)
Net cash (used in) provided by financing activities	(10,121,813)	500,944
Net decrease in cash and cash equivalents	(17,083)	(191,179)
Cash and cash equivalents, beginning of period	377,158	389,962
Cash and cash equivalents, end of period	$ 360,075	$ 198,783

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COMBINED BALANCE SHEETS (USD $)	Jan. 31, 2012 Unaudited		Oct. 31, 2011 Audited
ASSETS
Land and land development costs	$ 20,648,201	[1]	$ 20,642,787	[1]
Land improvements, buildings and equipment, net	22,530,633		22,613,121
Land held for investment principally unimproved	6,905,668	[2]	6,905,668	[3]
Long-lived assets held for sale	2,157,513		2,941,148
Cash and cash equivalents	360,075		377,158
Cash held in escrow	362,592		211,881
Prepaid expenses and other assets	267,177		483,434
Accounts receivable and mortgages receivable	417,573		160,290
Assets of discontinued operations	0		10,770,222
Total Assets	53,649,432		65,105,709
LIABILITIES:
Debt	18,001,691		27,113,120
Accounts payable	138,996		437,783
Accrued liabilities	267,666		415,935
Deferred income	723,679		733,734
Amounts due to related parties	0		24,792
Accumulated deferred income taxes	2,043,708		2,303,708
Accrued pension expense	3,223,184		3,312,316
Liabilities of discontinued operations	0		1,010,384
Total liabilities	24,398,924		35,351,772
COMBINED SHAREHOLDERS' EQUITY:
Capital stock	819,731		819,731
Capital in excess of stated value	19,829,475		19,829,475
Earnings retained in the business	12,959,030		13,462,459
Accumulated other comprehensive loss	(2,272,321)		(2,272,321)
Shareholders' equity before capital stock in treasury	31,335,915		31,839,344
Less cost of 282,018 shares of capital stock in treasury	2,085,407		2,085,407
Total shareholders' equity	29,250,508		29,753,937
Total liabilities and shareholders' equity	$ 53,649,432		$ 65,105,709

[1] 3,394 acres per land ledger

[2] 10,407 acres per land ledger

[3] 10,719 acres per land ledger

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COMBINED STATEMENT OF CHANGES IN SHAREHOLDERS' EQUITY (USD $)	Capital Stock	Capital in Excess of Stated Par	Earnings Retained in the Business	Accumulated Other Comprehensive Loss	Capital Stock in Treasury	Total	Unaudited	Audited
Balance, shareholders' equity beginning of period at Oct. 31, 2011	$ 819,731	$ 19,829,475	$ 13,462,459	$ (2,272,321)	$ (2,085,407)			$ 29,753,937
Balance, shares issued beginning of period at Oct. 31, 2011	2,732,442
Comprehensive loss:
Net loss			(503,429)				(503,429)
Balance, shareholders' equity end of period at Jan. 31, 2012	$ 819,731	$ 19,829,475	$ 12,959,030	$ (2,272,321)	$ (2,085,407)		$ 29,250,508
Balance, shares issued end of period at Jan. 31, 2012	2,732,442

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Note 15. Subsequent Events

3 Months Ended

Jan. 31, 2012

Notes

Note 15. Subsequent Events

15. Subsequent Events

The Companies have evaluated and disclosed subsequent events from January 31, 2012 through the issuance date of this Form 10-Q.

On February 8, 2012, the Companies entered into an employment agreement (the “Agreement”) with Mr. Bruce Beaty, pursuant to which Mr. Beaty serves as President of the Companies.  The initial term of the Agreement is effective January 1, 2012 and expires January 1, 2013.  Thereafter, the Agreement continues in effect indefinitely until either party gives notice of termination to the other party.  The Agreement provides   Mr. Beaty will receive a $120,000 base annual salary, will receive a bonus of not less than $30,000, is eligible to participate in the Companies’ 401(k) plan and will be reimbursed for his health care costs incurred under his existing personal health insurance policy.  Mr. Beaty will perform such duties and fulfill such assignments as may be assigned by the Boards of Directors or its designee and devote a majority of his time, energy, attention and skill to the performance of his duties and to the promotion and advancement of the Companies’ business and interests.

On February 20, 2012 the Companies entered into a second amendment (the “Second Amendment”) to the Phase 3 Agreement of Sale dated February 17, 2011 with The Conservation Fund (the “Purchaser”) for 376 acres in Thornhurst, Lackawanna County for the purchase price of $1,600,000.  The Second Amendment extended the inspection period during which the Purchaser may perform due diligence from February 16, 2012 to November 30, 2012, and specified a closing date of December 31, 2012.  The second amendment also provides that, if prior to the expiration of the Inspection Period, the parties are unable to reach an agreement on the terms under which the Companies will retain and exercise gas and oil rights on the property following closing, then either party may terminate the Agreement on ten days written notice and the $5,000 deposit under the Agreement will be refunded to the Purchaser. 

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COMBINED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY (PARENTHETICAL) (USD $)	Jan. 31, 2012	Oct. 31, 2011	Jan. 31, 2011
Capital stock, without par value, per combined share (in dollars)	$ 0.30	$ 0.30	$ 0.30
Treasury stock, at cost	282,018	282,018	282,018
Unaudited
Capital stock, without par value, per combined share (in dollars)	$ 0.30		$ 0.30
Treasury stock, at cost	282,018		282,018
Audited
Capital stock, without par value, per combined share (in dollars)		$ 0.30
Treasury stock, at cost		282,018

XML

COMBINED BALANCE SHEETS (PARENTHETICALS) (USD $)	Jan. 31, 2012	Oct. 31, 2011
Capital stock, without par value, per combined share (in dollars)	$ 0.30	$ 0.30
Capital stock, authorized	3,000,000	3,000,000
Capital stock, shares issued	2,732,442	2,732,442
Treasury stock, at cost	282,018	282,018
Unaudited
Capital stock, without par value, per combined share (in dollars)	$ 0.30
Capital stock, authorized	3,000,000
Capital stock, shares issued	2,732,442
Treasury stock, at cost	282,018
Audited
Capital stock, without par value, per combined share (in dollars)		$ 0.30
Capital stock, authorized		3,000,000
Capital stock, shares issued		2,732,442
Treasury stock, at cost		282,018

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Note 10. Pension Benefits

3 Months Ended

Jan. 31, 2012

Notes

Note 10. Pension Benefits

10.  Pension Benefits

           Components of Net Periodic Pension Cost:

	Three Months Ended
	01/31/12		01/31/11
Service Cost	$12,276		$14,000
Interest Cost	96,235		98,000
Expected return on plan assets	(102,812)		(95,500)
Net amortization and deferral:
Amortization of accumulated loss		83,568		50,250
Net amortization and deferral		83,568		50,250
Total net periodic pension cost		$89,267		$66,750

           The Companies expect to contribute $545,687 to their pension plan in Fiscal 2012.  As of January 31, 2012, the Companies made contributions totaling $178,400 and anticipate contributing an additional $367,287 to fund their pension plan in Fiscal 2012.

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Document and Entity Information	3 Months Ended
	Jan. 31, 2012	Mar. 14, 2012
Document and Entity Information
Entity Registrant Name	Blue Ridge Real Estate Company
Document Type	10-Q
Document Period End Date	Jan. 31, 2012
Amendment Flag	true
Entity Central Index Key	0000012779
Current Fiscal Year End Date	--10-31
Entity Common Stock, Shares Outstanding		2,450,424
Entity Filer Category	Non-accelerated Filer
Entity Current Reporting Status	Yes
Entity Voluntary Filers	No
Entity Well-known Seasoned Issuer	No
Document Fiscal Year Focus	2012
Document Fiscal Period Focus	Q1
Amendment Description	Amendment to furnish Exhibit 101 XBRL files as required

XML

Note 11. Investment in Direct Financing Leases

3 Months Ended

Jan. 31, 2012

Notes

Note 11. Investment in Direct Financing Leases

11.  Investment in Direct Financing Leases (Included in assets of discontinued operations at October 31, 2011)

During Fiscal Year 2011, the Companies leased the Jack Frost and Big Boulder ski areas to a third party under direct financing leases that extended through 2034.  The Companies net investment in direct financing leases consisted of the following as of October 31, 2011:

	10/31/11
Minimum future lease payments	$7,426,946
Unguaranteed residual value of lease properties	8,430,879
Gross investment in lease	15,857,825
Unearned income	(7,567,630)
Valuation allowance	(502,000)
Net investment in direct financing leases	$7,788,195

On December 15, 2011, the Jack Frost and Big Boulder ski areas were sold to the previous third party lessee, therefore the operating activity for the three months ended January 31, 2012 and 2011 is being reported as discontinued operations.  The transaction resulted in a loss of approximately $502,000 primarily related to the reversal of the accrued rent receivable based on the straight line amortization of the lease.  The valuation allowance was recorded as impairment at October 31, 2011.  The interest income which resulted from the direct financing lease is reported as a portion of discontinued operations.

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COMBINED STATEMENTS OF OPERATIONS (USD $)	3 Months Ended
	Jan. 31, 2012	Jan. 31, 2011
Revenues:
Real estate management revenue		$ 221,167
Land resource management revenue		671,302
Rental income revenue		451,441
Total Revenues		1,343,910
Costs and expenses:
Real estate management costs		255,792
Land resource management costs		904,631
Rental income costs		241,014
General and administrative expense		447,246
Total costs and expenses		1,848,683
Operating loss from continuing operations		(504,773)
Other income and expense:
Interest and other income		9,445
Interest expense		(357,850)
Total other income and expense		(348,405)
Loss from continuing operations before income taxes		(853,178)
Credit for income taxes		(290,000)
Net loss before discontinued operations		(563,178)
Discontinued operations		154,526
Provision for income taxes on discontinued operations		52,000
Net income from discontinued operations		102,526
Net loss		(460,652)
Net (loss) before discontinued operations		$ (0.23)
Income from discontinued operations		$ 0.04
Basic loss per weighted average combined share		$ (0.19)
Unaudited
Revenues:
Real estate management revenue	207,043	221,167
Land resource management revenue	952,585	671,302
Rental income revenue	453,972	575,195
Total Revenues	1,613,600	1,467,664
Costs and expenses:
Real estate management costs	275,578	255,792
Land resource management costs	1,012,149	904,631
Rental income costs	246,702	261,230
General and administrative expense	534,469	447,246
Total costs and expenses	2,068,898	1,868,899
Operating loss from continuing operations	(455,298)
Other income and expense:
Interest and other income	2,738	89,862
Interest expense	(324,291)	(387,279)
Total other income and expense	(321,553)	(297,417)
Loss from continuing operations before income taxes	(776,851)
Credit for income taxes	(265,000)	(238,000)
Net loss before discontinued operations	(511,851)
Discontinued operations	13,422
Provision for income taxes on discontinued operations	5,000
Net income from discontinued operations	8,422
Net loss	$ (503,429)	$ (460,652)
Net (loss) before discontinued operations	$ (0.21)
Income from discontinued operations	$ 0.00
Basic loss per weighted average combined share	$ (0.21)	$ (0.19)

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Note 4. Restatement

3 Months Ended

Jan. 31, 2012

Notes

Note 4. Restatement

4. Restatement

     In the fourth quarter of Fiscal 2012 Management determined to restate the financial statements for the fiscal years ended October 31, 2011, 2010 & 2009, the three months ended January 31, 2012 and 2011, the six months ended April 30, 2012 and 2011 and the nine months ended July 2012 and 2011.  The restatement is to reclassify the financial results from certain properties sold or held for sale by the Companies in 2011 or 2012 which should have been, but were not, reported in discontinued operations for the periods prior to the respective dates of their disposition.  The properties include:

1.      approximately 1 acre of land in Fort Collins, Colorado on which an Applebee’s restaurant was located, sold by Blue Ridge on September 30, 2011;

2.      1.2 acres of land in Wallisville, Texas on which a Jack in the Box restaurant was located, sold by Blue Ridge on November 30, 2011;

3.      201 acres of land comprising the Jack Frost Mountain Ski Area, sold by Blue Ridge on December 15, 2011; and

4.      approximately 110 acres of land comprising the Big Boulder Ski Area, sold by Big Boulder on December 15, 2011.

   The restatement did not impact the Companies’ total net loss for the relevant periods.  The following are the previously reported and restated balances on the combined balance sheet as of October 2011 and the combined statement of operations for the three months ended January 31, 2012 and 2011:

COMBINED BALANCE SHEET

	October 31, 2011
ASSETS	As Previously Reported	Reclassified	As Restated
Land improvements, buildings and equipment, net	$22,881,409	($268,288)	$22,613,121
Land held for investment, principally unimproved	6,943,374	(37,706)	6,905,668
Long-lived assets held for sale	4,721,303	(1,780,155)	2,941,148
Net investment in direct financing leases	7,788,195	(7,788,195)	0
Prepaid expenses and other assets	1,379,312	(895,878)	483,434
Assets of discontinued operations	0	10,770,222	10,770,222
LIABILITIES:
Debt	28,123,504	(1,010,384)	$27,113,120
Liabilities of discontinued operations	0	1,010,384	1,010,384

COMBINED STATEMENTS OF OPERATIONS

	For the three months ended January 31, 2012
	As Previously Reported	Reclassified	As Restated
Revenues:
Land resource management revenue	$11,864,004	($10,911,419)	$952,585
Rental income revenue	475,137	(21,165)	453,972
Total revenues	12,546,184	(10,932,584)	1,613,600
Costs and expenses:
Land resource management costs	11,923,486	(10,911,337)	1,012,149
Rental income costs	247,141	(439)	246,702
Total costs and expenses	12,980,674	(10,911,776)	2,068,898
(Loss) profit from continuing operations	(434,490)	(20,808)	(455,298)
Other income and (expense):
Interest expense	(331,677)	7,386	(324,291)
Total other income and expense	(328,939)	7,386	(321,553)
(Loss) from continuing operations before income taxes	(763,429)	(13,422)	(776,851)
Credit for income taxes on continuing operations	(260,000)	(5,000)	(265,000)
Net loss before discontinued operations	(503,429)	(8,422)	(511,851)
Discontinued operations	0	13,422	13,422
Provision (credit) for income taxes on discontinued operations:
Deferred income taxes on discontinued operations	0	5,000	5,000
Net income from discontinued operations	0	8,422	8,422

COMBINED STATEMENTS OF OPERATIONS

	For the three months ended January 31, 2011
	As Previously Reported	Reclassified	As Restated
Revenues:
Rental income revenue	$575,195	($123,754)	$451,441
Total revenues	1,467,664	(123,754)	1,343,910
Costs and expenses:
Rental income costs	261,230	(20,216)	241,014
Total costs and expenses	1,868,899	(20,216)	1,848,683
Loss (profit) from continuing operations	(401,235)	(103,538)	(504,773)
Other income and (expense):
Interest and other income	89,862	(80,417)	9,445
Interest expense	(387,279)	29,429	(357,850)
Total other income and expense	(297,417)	(50,988)	(348,405)
(Loss) from continuing operations before income taxes	(698,652)	(154,526)	(853,178)
Provision for income taxes on continuing operations	(238,000)	(52,000)	(290,000)
Net loss before discontinued operations	(460,652)	(102,526)	(563,178)
Discontinued operations	0	154,526	154,526
Provision for income taxes on discontinued operations:	0	52,000	52,000
Net income from discontinued operations	$0	$102,526	$102,526

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Note 3. Discontinued Operations

3 Months Ended

Jan. 31, 2012

Notes

Note 3. Discontinued Operations

3.  Discontinued operations

   On September 30, 2011, the Applebee’s located in Fort Collins, Colorado was sold and as a result the operating activity for the three months ending January 31, 2011 is being reported as a discontinued operation.  The operating results of Applebee’s were previously reported in the Rental Operations of the combined statements of operations.  At January 31, 2012 there were no remaining assets or liabilities related to Applebee’s.

   On November 30, 2011, the Jack in the Box located in Wallisville, Texas was sold and as a result the operating activity for the three months ending January 31, 2012 and 2011 is being reported as a discontinued operation.  The operating results of Jack in the Box were previously reported in the Rental Operations of the combined statements of operations.  At October 31, 2011, there was $1,814,573 of assets related to Jack in the Box included in assets of discontinued operation and $1,010,384 of debt included in liabilities of discontinued operations on the Companies’ combined balance sheet.  At January 31, 2012 there were no remaining assets or liabilities related to Jack in the Box.

   On December 15, 2011, the Jack Frost Mountain and Big Boulder ski areas were sold and as a result the operating activity for the three months ending January 31, 2012 and 2011 is being reported as a discontinued operation.  The ski areas had been leased to an operator and a portion of the leased premises had been capitalized as net investment in direct financing leases. Therefore a portion of the operating results were previously reported in the Rental Operations and a portion of the operating results were previously reported in the Interest and Other Income line of the combined statements of operations.  At October 31, 2011, there was $8,955,649 of assets related to the two ski areas included in assets of discontinued operations on the Companies’ combined balance sheet and there were no liabilities.  At January 31, 2012 there were no remaining assets or liabilities related to the Jack Frost Mountain and Big Boulder ski areas.

The combined assets and liabilities as of October 31, 2011 are summarized as follows:

BALANCE SHEET	10/31/11
ASSETS
Land improvements, buildings & equipment, net	$268,288
Land held for investment, principally unimproved	37,706
Long-lived assets held for sale	1,780,155
Net investment in direct financing leases	7,788,195
Prepaid expenses and other assets	895,878
Total assets of discontinued operations	$10,770,222
LIABILITIES
Debt	$1,010,384
Total liabilities of discontinued operations	$1,010,384

   Operating results, including interest expense incurred, of the discontinued operations in three months ending January 31, 2012 and 2011 are as follows:

STATEMENT OF OPERATIONS	1/31/12	1/31/11
Revenues:
Applebee’s	$0	$29,000
Jack in the Box	10,971	33,246
Jack Frost Mountain Ski Area	5,097	40,007
Big Boulder Ski Area	5,097	21,501
Total Revenue	21,165	123,754
Expenses (excluding interest):
Applebee’s	0	2,179
Jack in the Box	136	12,511
Jack Frost Mountain Ski Area	0	2,684
Big Boulder Ski Area	303	2,842
Total Expenses	439	20,216
Interest and other income (interest income related to ski area net investment in direct financing lease):
Applebee’s	0	0
Jack in the Box	0	0
Jack Frost Mountain Ski Area	0	31,668
Big Boulder Ski Area	0	48,749
Total Interest and Other Income	0	80,417
Interest expense(calculated on debt related to the property):
Applebee’s	0	11,725
Jack in the Box	7,386	17,704
Jack Frost Mountain Ski Area	0	0
Big Boulder Ski Area	0	0
Total Interest	7,386	29,429
Gain (Loss) on Disposal:
Applebee’s	0	0
Jack in the Box	9,402	0
Jack Frost Mountain Ski Area	(4,803)	0
Big Boulder Ski Area	(4,517)	0
Total Gain (Loss) on Disposal	82	0
Income from discontinued operations before income taxes	$13,422	$154,526

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Note 12. Per Share Data

3 Months Ended

Jan. 31, 2012

Notes

Note 12. Per Share Data

12.  Per Share Data

Earnings per share (“EPS”) is based on the weighted average number of common shares outstanding during the period.  The calculation of diluted EPS assumes weighted average options have been exercised to purchase shares of common stock in the relevant period, net of assumed repurchases using the treasury stock method. For the three months ended January 31, 2012 and 2011, all outstanding unexercised stock options would be excluded from the calculation of diluted EPS because the exercise price of all such options exceeded the market price of the Companies’ common stock.  As a result, the calculation of diluted EPS has been excluded from the table below since diluted EPS for these periods is equal to EPS.

     Weighted average basic shares, taking into consideration shares issued, weighted average options used in calculating EPS and treasury shares repurchased, and basic loss per weighted average combined share for the three months ended January 31, 2012 and January 31, 2011 are as follows:

	Three Months Ended
	01/31/12	01/31/11
Weighted average combined shares of common stock outstanding used to compute basic earnings per combined share	2,450,424	2,450,424
Basic loss per weighted average combined share is computed as follows:
Net loss before discontinued operations	($511,851)	($563,178)
Weighted average combined shares of common stock outstanding	2,450,424	2,450,424
Basic loss per weighted average combined share	($0.21)	($0.23)
Net income from discontinued operations	$8,422	$102,526
Weighted average combined shares of common stock outstanding	2,450,424	2,450,424
Basic earnings per weighted average combined share	$0.00	$0.04
Net loss	($503,429)	($460,652)
Weighted average combined shares of common stock outstanding	2,450,424	2,450,424
Basic loss per weighted average combined share	($0.21)	($0.19)

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Note 7. Stock Based Compensation

3 Months Ended

Jan. 31, 2012

Notes

Note 7. Stock Based Compensation

7.  Stock Based Compensation

During the three months ended January 31, 2012 and January 31, 2011 no stock options were issued or exercised.

Option activity during the three month period ended January 31, 2012 is as follows:

	Shares	Weighted Average Exercise Price	Aggregate Intrinsic Value	Weighted Average Remaining Useful Life (in years)
Outstanding at October 31, 2011	14,000	$39.00	$546,000	0.42
Granted	0	0	0
Exercised	0	0	0
Expired	0	0	0	0
Outstanding at January 31, 2012	14,000	$39.00	$546,000	0.17
Options exercisable at January 31, 2012	14,000	$39.00
Option exercise price range	$39.00

           All options are vested, therefore the Companies do not expect to recognize any compensation expense related to non-vested awards during Fiscal 2012.

The Companies’ policy regarding the exercise of options requires that optionees utilize an independent broker to manage the transaction, whereby, following the option exercise the broker sells the exercised shares on the open market.

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Note 5. Segment Reporting

3 Months Ended

Jan. 31, 2012

Notes

Note 5. Segment Reporting

5. Segment Reporting

The Companies currently operate in two business segments, which consist of Real Estate Management/Rental Operations and Land Resource Management.

For the three months ended January 31, 2012 we had two property sales totaling revenue of $10,911,419 which was 87% of total revenue, one sale for $9,000,000 to JFBB Ski Areas, Inc. and one sale for $1,911,419 to Phyllis Enfield Trust.

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Note 6. Income Taxes

3 Months Ended

Jan. 31, 2012

Notes

Note 6. Income Taxes

6. Income Taxes

The benefit for income taxes for the three months ended January 31, 2012 and 2011 is estimated using the estimated annual effective tax rate for the fiscal years ending October 31, 2012 and 2011.  The effective income tax rate for the first three months of Fiscal 2012 and Fiscal 2011 was estimated at 34%.

The Companies’ practice is to recognize interest and/or penalties related to income tax matters as income tax expense in its combined financial statements. As of and for the three months ended January 31, 2012, no interest and penalties have been accrued in the combined balance sheet and no expense is reflected in the combined statement of operations.    At January 31, 2012, federal and state tax returns for years ending October 31, 2008 and later are subject to future examination by the respective tax authorities.

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Note 9. Land

3 Months Ended

Jan. 31, 2012

Notes

Note 9. Land

9.  Land

	01/31/2012	10/31/2011
Land held for investment
Land – Unimproved	$2,302,492	$2,340,198
Land – Commercial rental properties	4,603,176	4,603,176
	$6,905,668	$6,943,374

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Note 14. Business Segment Information

3 Months Ended

Jan. 31, 2012

Notes

Note 14. Business Segment Information

14. Business Segment Information

   The following information is presented in accordance with the accounting pronouncement regarding disclosures about segments of an enterprise and related information.  The Companies’ business segments were determined from the Companies’ internal organization and management reporting, which are based primarily on differences in services. 

   Real Estate Management/Rental Operations

   Real Estate Management/Rental Operations consists of: investment properties leased to others located in Eastern Pennsylvania, New Jersey, Minnesota, Louisiana, Colorado and Texas; recreational club activities; services to the trusts that operate resort residential communities; sales of investment properties; and rental of land and land improvements, which includes the leasing of our two ski areas located in the Pocono Mountains of Northeastern Pennsylvania.  The investment property located in Colorado was sold September 30, 2011, the investment property in Texas was sold November 30, 2011 and the Jack Frost Mountain and Big Boulder Ski Areas were sold December 15, 2011.

   Land Resource Management

     Land Resource Management consists of: land sales; land purchases; timbering operations; the Jack Frost National Golf Course; and a real estate development division.  Timbering operations consist of selective timbering on our land holdings.  Contracts are entered into for parcels that have had the timber selectively marked.  We rely on the advice of our forester, who is engaged on a consulting basis and who receives a commission on each stumpage contract, for the timing and selection of certain parcels of land for timbering.  Our forester gives significant attention to protecting the environment and retaining the value of these parcels for future timber harvests.  The Jack Frost National Golf Course is managed by Billy Casper Golf, LLC, an unaffiliated third party.  The real estate development division is responsible for the residential land development activities which include overseeing the construction of single and multi-family homes and development of infrastructure.

     Funds expended to date for real estate development have been primarily for infrastructure improvements and home construction in the Laurelwoods II and Boulder Lake Village communities.  Construction of 22 single family homes and four duplex homes in Laurelwoods II has been completed.  The construction of 18 condominium units within Building J at Boulder Lake Village on Big Boulder Lake has been completed as well.  Other expenditures for our development projects in the planning phases include fees for architects, engineers, consultants, studies and permits.

     Information by business segment is as follows:

	Three months ended
	1/31/12	1/31/11
Revenues from continuing operations:
Real estate management/rental operations	$661,015	$672,608
Land resource management	952,585	671,302
Total revenues from continuing operations	$1,613,600	$1,343,910
Operating profit (loss) from continuing operations, excluding general and administrative expenses:
Real estate management/rental operations	$138,735	$175,802
Land resource management	(59,564)	(233,329)
Total operating profit, excluding general and administrative expenses	$79,171	($57,527)
General and administrative expenses:
Real estate management/rental operations	$218,946	$223,840
Land resource management	315,523	223,406
Total general and administrative expenses	$534,469	$447,246
Interest and other income, net:
Real estate management/rental operations	$1,097	$4,680
Land resource management	1,641	4,765
Total interest and other income, net	$2,738	$9,445
Interest expense:
Real estate management/rental operations	$315,412	$344,255
Land resource management	8,879	13,595
Total Interest expense	$324,291	$357,850
Loss from continuing operations before income taxes	($776,851)	($853,178)

     Identifiable assets, net of accumulated depreciation at January 31, 2012 and October 31, 2011 and depreciation expense and capital expenditures for three months ended January 31, 2012 and the fiscal year ended October 31, 2011 by business segment are as follows:

January 31, 2012	Identifiable Assets	Depreciation and  Amortization Expense	Capital Expenditures
Real estate management/rental operations	$27,473,759	$207,543	$2,544
Land resource management	26,007,918	86,826	0
Other corporate	167,755	23,973	41,774
Discontinued operations	0	0	0
Total Assets	$53,649,432	$318,342	$44,318

October 31, 2011	Identifiable Assets	Depreciation and  Amortization Expense	Capital Expenditures
Real estate management/rental operations	$20,861,471	$632,556	$761
Land resource management	33,251,319	382,559	225,105
Other corporate	222,697	109,991	203,691
Discontinued operations	10,770,222	229,724	0
Total Assets	$65,105,709	$1,354,830	$429,557

During the three months ended January 31, 2011, no one customer represented more than 10% of total revenues.  During the three months ended January 31, 2012, the Companies had two material property sales, the revenue from which totaled $10,911,419: one sale for $9,000,000 to JFBB Ski Areas, Inc. and one sale for $1,911,419 to Phyllis Enfield Trust.

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COMBINED STATEMENTS OF OPERATIONS (PARENTHETICAL) (Unaudited, USD $)	3 Months Ended
	Jan. 31, 2012	Jan. 31, 2011
Unaudited
Interest expense, capitalized interest	$ 0	$ 58,294
Gain on disposals, discontinued operations	$ 82	$ 0

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Note 2. Significant Accounting Policies

3 Months Ended

Jan. 31, 2012

Notes

Note 2. Significant Accounting Policies

2. Significant Accounting Policies

Use of estimates:

The preparation of financial statements and related disclosures in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period.  Actual results could differ from those estimates.  For example, unexpected changes in market conditions or a continued or further downturn in the economy could adversely affect actual results.  Estimates are used in accounting for, among other things, land development costs, accounts and mortgages receivables, the unguaranteed residual value of assets under direct financing leasing arrangements, legal liability, insurance liability, depreciation, employee benefits, taxes, and contingencies.  Estimates and assumptions are reviewed periodically and the effects of revisions are reflected in the combined financial statements in the period they are determined to be necessary.

Management believes that its accounting policies regarding revenue recognition, land development costs, long lived assets, deferred income and income taxes among others, affect its more significant judgments and estimates used in the preparation of its combined financial statements.  For a description of these critical accounting policies and estimates, see “Management’s Discussion and Analysis of Financial Condition and Results of Operations”. There were no significant changes in the Companies’ critical accounting policies or estimates since the Companies’ fiscal year ended October 31, 2011 (“Fiscal 2011”), except for presentation of discontinued operations as disclosed in Notes 3 and 4.  Material subsequent events are evaluated and disclosed through the issuance date of this Quarterly Report on Form 10-Q.

 Cash held in escrow:

Cash held in escrow consists of deposits held by the Companies for interest payments on lines of credit, golf course memberships and real estate transactions and other funds placed into escrow with a third party intermediary for the purpose of a tax deferred exchange under section 1031 of the Internal Revenue Code of 1986, as amended (the “IRC”).

 Discontinued Operations:

   A component of the Companies is classified as a discontinued operation when (i) the operations and cash flows of the component of the Companies can be clearly distinguished and have been or will be eliminated from our ongoing operations; (ii) the component has either been disposed of or is classified as held for sale; and (iii) we will not have any significant continuing involvement in the operations of the component of the Companies after the disposal transactions.  Significant judgments are involved in determining whether a component meets the criteria for discontinued operations reporting and the period in which these criteria are met.

   If a component of the Companies is reported as a discontinued operation, the results of operations through the date of sale, including any gain or loss recognized on the disposition, are presented on a separate line of the income statement.

Reclassification

In the second quarter of 2011, Land held for recreation was reclassified to Land held for investment, principally unimproved.  The 311 acres that were reclassified house our ski areas which were leased to a third party operator during Fiscal 2011 and sold on December 15, 2011.  Operating activities relating to this land are part of discontinued operations.

The Companies report the results of discontinued operations as a separate component of income on the combined statements of operations under the caption Discontinued operations.  This reporting resulted in certain reclassifications of the 2012 and 2011 financial statement amounts.

Certain amounts in the Fiscal 2011 combined financial statements have been reclassified to conform to the Fiscal 2012 presentation.

 New Accounting Pronouncements:

In January 2010, the FASB issued ASU No. 2010-06, “Fair Value Measurements and Disclosures (“Topic 820”): Improving Disclosures about Fair Value Measurements” (“ASU 2010-06”). ASU 2010-06 requires certain new disclosures and clarifies some existing disclosure requirements regarding fair value measurement as set forth in Accounting Standards Codification (“ASC”) Subtopic 820-10. ASU 2010-06 amends ASC Subtopic 820-10 to now require that (1) a reporting entity disclose separately the amounts of significant transfers in and out of Level 1 and Level 2 fair value measurements and describe the reasons for the transfers; (2) in the reconciliation for fair value measurements using significant unobservable inputs, a reporting entity present separately information about purchases, sales, issuances, and settlements, and (3) a reporting entity provide disclosures about the valuation techniques and inputs used to measure fair value for both recurring and nonrecurring fair value measurements. ASU 2010-06 is effective for interim and annual reporting periods beginning after December 15, 2009, except for the disclosures about purchases, sales, issuances, and settlements in the roll forward of activity in Level 3 fair value measurements. Those disclosures are effective for fiscal years beginning after December 15, 2010, and for interim periods within those fiscal years. The adoption of ASU No. 2010-06 did not have a material impact on the Companies’ combined financial statements.

In December 2009, the FASB issued ASU No. 2009-16, “Accounting for Transfers of Financial Assets” (“ASU 2009-16”), which is an amendment of ASC 860, “Transfers and Servicing.”  ASU 2009-16 requires more information about the transfers of financial assets.  More specifically, ASU 2009-16 eliminates the concept of a “qualified special purpose entity”, changes the requirements for derecognizing financial assets, and enhances the information reported to users of financial statements.  ASU 2009-16 is effective for fiscal years beginning on or after November 15, 2009. ASU 2009-16 is effective for the Companies’ financial statements for fiscal years beginning November 1, 2010. The adoption of ASU 2009-16 did not have a material impact on the Companies’ combined financial statements.

In December 2009, the FASB issued ASU No. 2009-17, “Improvements to Financial Reporting by Enterprises Involved with Variable Interest Entities” (“ASU 2009-17”). ASU 2009-17 changes how a reporting entity determines when an entity that is insufficiently capitalized or is not controlled through voting (or similar rights) should be consolidated. The determination of whether a reporting entity is required to consolidate another entity is based on, among other things, the other entity’s purpose and design and the reporting entity’s ability to direct the activities of the other entity that most significantly impact the other entity’s economic performance. The new standard will require a number of new disclosures, including additional disclosures about the reporting entity’s involvement with variable interest entities and any significant changes in risk exposure due to that involvement. A reporting entity will be required to disclose how its involvement with a variable interest entity affects the reporting entity’s financial statements. ASU 2009-17 is effective for fiscal years beginning after November 15, 2009. The adoption of ASU 2009-17 did not have a material impact on the Companies’ combined financial statements.

In June 2011, the FASB issued Accounting Standards Update No. 2011-05, “Statement of Comprehensive Income” (“ASU 2011-05”), which requires entities to present net income and other comprehensive income in either a single continuous statement or in two separate, but consecutive, statements of net income and other comprehensive income.  The adoption of this guidance, which relates to presentation only, is not expected to have a material impact on the Companies’ combined financial statements.  ASU 2011-05 will be effective for the Companies’ fiscal year beginning November 1, 2012.  In December 2011, the FASB issued Accounting Standards Update No. 2011-12 (ASU 2011-12) which is a deferral of the effective date for the amendments to the presentation of reclassifications of items out of accumulated other comprehensive income in Accounting Standards Update No. 2011-05 effective for fiscal years and interim periods within those years beginning after December 1, 2011.

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Note 13. Supplemental Disclosure To Statements of Cash Flows

3 Months Ended

Jan. 31, 2012

Notes

Note 13. Supplemental Disclosure To Statements of Cash Flows

13.  Supplemental Disclosure to Statements of Cash Flows

The following are supplemental disclosures to the statements of cash flows for the three months ended January 31, 2012 and 2011:

	2012	2011
Cash paid during the period for:
Interest	$345,774	$443,121
Income taxes	$2,400	$3,282
Non cash operating activities:
Reclassification of assets from long-lived assets held for sale to       land improvements, buildings and equipment, net	$191,537	$0