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