10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

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

For the quarterly period ended June 30, 2012

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

Commission File Number 1-31905

CKX Lands, Inc.

(Exact name of registrant as specified in its charter)

Louisiana		72-0144530
(State or other jurisdiction of incorporation or organization)		(I.R.S. Employer Identification No.)
700 Pujo Street, Suite 200
Lake Charles, LA		70601
(Address of principal executive offices)		(Zip Code)
	(337) 493-2399
	(Registrant’s telephone number)

Indicate by check mark whether the registrant (1) has 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 shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.    Yes  x   No  o

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every

Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).    Yes  x   No  o

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company.  See the 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      o              Smaller reporting company         x

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).   Yes  o  No  x

Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date: 1,942,495

CKX Lands, Inc.

Form 10-Q

For the Quarter ended June 30, 2012

Table of Contents

		Page
Part I. Financial Information
Item 1.	Financial Statements
a.	Balance Sheets as of June 30, 2012 and December 31, 2011 (Unaudited)	1
b.	Statements of Income and Comprehensive Income for the quarter and six months ended June 30, 2012 and 2011 (Unaudited)	2
c.	Statements of Changes in Stockholders’ Equity for the six months ended June 30, 2012 and 2011 (Unaudited)	3
d.	Statements of Cash Flows for the six months ended June 30, 2012 and 2011 (Unaudited)	4
e.	Notes to Financial Statements (Unaudited)	5-6
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	7-8
Item 4.	Controls and Procedures	8
Part II. Other Information
Item 6.	Exhibits	9
	Signature	10

Part I – Financial Information

Item 1.               FINANCIAL STATEMENTS

CKX Lands, Inc.

Balance Sheets

June 30, 2012 and December 31, 2011

(Unaudited)

	2012			2011
Assets
Current Assets:
Cash and cash equivalents	$	4,628,568		$	4,124,908
1031 trust account		159,003			--
Certificates of deposit		501,384			495,625
Accounts receivable		219,774			276,217
Prepaid expense and other assets		109,060			20,828
Total current assets		5,617,789			4,917,578
Securities available for sale		--			--
Certificates of deposit		480,000			480,000
Property and equipment:
Building and equipment less accumulated depreciation of $74,162 and $70,818, respectively		16,270			19,614
Timber less accumulated depletion of $691,823 and $691,436, respectively		1,150,522			1,146,743
Land		4,396,034			4,431,034
Total property and equipment, net		5,562,826			5,597,391
Total assets	$	11,660,615		$	10,994,969
Liabilities and Stockholders’ Equity
Current Liabilities:
Trade payables and accrued expenses	$	54,435		$	58,662
Income tax payable:
Current		--			87,419
Deferred		3,976			5,153
Total current liabilities		58,411			151,234
Deferred income tax payable		181,818			181,818
Total liabilities		240,229			333,052
Stockholders’ Equity:
Common stock, no par value: 3,000,000 shares authorized; 2,100,000 shares issued		72,256			72,256
Retained earnings		11,723,646			10,965,177
Accumulated other comprehensive income		--			--
Less cost of treasury stock (157,505 shares)		(375,516	)		(375,516	)
Total stockholders’ equity		11,420,386			10,661,917
Total liabilities and stockholders’ equity	$	11,660,615		$	10,994,969

The accompanying notes are an integral part of these financial statements.

1

CKX Lands, Inc.

Statements of Income and Comprehensive Income

Quarter and Six Months Ended June 30, 2012 and 2011

 (Unaudited)

		Quarter Ended June 30,						Six Months Ended June 30,
		2012			2011			2012			2011
Revenues:
Oil and gas	$	520,682		$	338,834		$	1,425,324		$	634,613
Agriculture		284,510			16,738			310,043			24,464
Timber		70			--			5,005			3,439
Total revenues		805,262			355,572			1,740,372			662,516
Costs and Expenses:
Oil and gas production		57,939			28,256			122,979			51,244
Agriculture		1,047			2,455			1,854			2,962
Timber		6,057			4,986			14,226			14,637
General and administrative		115,493			128,187			216,969			219,843
Depreciation and depletion		1,615			738			3,731			21,298
Total cost and expenses		182,151			164,622			359,759			309,984
Income from operations		623,111			190,950			1,380,613			352,532
Other Income / (Expense):
Interest income		4,706			10,276			5,244			20,469
Dividend income		55			4,664			55			9,527
Gain on sale of land and other assets		--			--			124,000			306
Net other income / (expense)		4,761			14,940			129,299			30,302
Income before income taxes		627,872			205,890			1,509,912			382,834
Federal and state income taxes:
Current		255,026			54,537			485,325			99,531
Deferred		(45,800	)		(12,575	)		(5,831	)		(12,427	)
Total income taxes		209,226			41,962			479,494			87,104
Net Income		418,646			163,928			1,030,418			295,730
Other Comprehensive Income, Net of Taxes:
Change in unrealized net holding gains occurring during period, net of taxes of $1,813 and $2,321, respectively for 2011		--			2,718			--			3,481
Other comprehensive income		--			2,718			--			3,481
Comprehensive Income	$	418,646		$	166,646		$	1,030,418		$	299,211
Per Common Stock (1,942,495 shares):
Net Income	$	0.22		$	0.08		$	0.53		$	0.15
Dividends	$	0.07		$	0.07		$	0.14		$	0.14

The accompanying notes are an integral part of these financial statements.

2

CKX Lands, Inc.

Statements of Changes in Stockholders’ Equity

Six Months Ended June 30, 2012 and 2011

(Unaudited)

Six Months Ended June 30, 2012:
	Total			Retained Earnings			Accumulated Other Comprehensive Income		Capital Stock Issued		Treasury Stock
December 31, 2011 Balance	$	10,661,917		$	10,965,177		$	--	$	72,256	$	375,516
Net income		1,030,418			1,030,418			--		--		--
Other comprehensive income		--			--			--		--		--
Dividends		(271,949	)		(271,949	)		--		--		--
June 30, 2012 Balance	$	11,420,386		$	11,723,646		$	--	$	72,256	$	375,516

Six Months Ended June 30, 2011:
	Total			Retained Earnings			Accumulated Other Comprehensive Income		Capital Stock Issued		Treasury Stock
December 31, 2010 Balance	$	10,246,245		$	10,543,924		$	5,581	$	72,256	$	375,516
Net income		295,730			295,730			--		--		--
Other comprehensive income		3,481			--			3,481		--		--
Dividends		(271,949	)		(271,949	)		--		--		--
Dividend reversion		13,375			13,375			--		--		--
June 30, 2011 Balance	$	10,286,882		$	10,581,080		$	9,062	$	72,256	$	375,516

The accompanying notes are an integral part of these financial statements.

3

CKX Lands, Inc.

Statements of Cash Flows

Six Months Ended June 30, 2012 and 2011

(Unaudited)

	2012			2011
Cash Flows From Operating Activities:
Net Income		1,030,418			295,730
Less non-cash (income) expenses included in net income:
Depreciation, depletion and amortization		3,731			21,298
Deferred income tax expense		(5,831	)		(12,427	)
Less non-operating activities:
Gain from sale of land and other assets		(124,000	)		(306	)
Change in operating assets and liabilities:
Increase in current assets		(27,135	)		(88,587	)
Decrease in current liabilities		(91,646	)		(9,290	)
Net cash provided from operating activities		785,537			206,418
Cash Flows From Investing Activities:
Certificates of deposit:
Maturity proceeds		255,625			--
Purchases		(261,384	)		(5,625	)
Securities:
Purchases		--			(9,470	)
Land, timber, equipment and other assets:
Sales proceeds		159,000			167
Purchases		(4,166	)		(532,944	)
Proceeds held in 1031 trust account		(159,003	)		--
Net cash used in investing activities		(9,928	)		(547,872	)
Cash Flows From Financing Activities:
Dividends paid, net of reversion		(271,949	)		(258,574	)
Net cash used in financing activities		(271,949	)		(258,574	)
Net increase (decrease) in cash and cash equivalents		503,660			(600,028	)
Cash and cash equivalents:
Beginning		4,124,908			5,182,316
Ending		4,628,568			4,582,288
Supplemental disclosures of cash flow information:
Cash payments for:
Interest		--			--
Income taxes		606,641			112,160
Supplemental schedule of non-cash investing and financing activities:
Net change in recognized and unrecognized unrealized gains (losses) on available-for-sale securities		--			5,802

The accompanying notes are an integral part of these financial statements.

4

CKX Lands, Inc.

Notes to Financial Statements

June 30, 2012

(Unaudited)

Note 1:      Basis of Presentation

The accompanying unaudited financial statements of CKX Lands, Inc. (“Company”) have been prepared in accordance with United States generally accepted accounting principles for interim financial information.  They do not include all information and footnotes required by United States generally accepted accounting principles for complete financial statements.  Except as described herein, there has been no material change in the information disclosed in the notes to the financial statements included in our financial statements as of and for the year ended December 31, 2011.  In the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation have been included in the accompanying financial statements.

Interim results are not necessarily indicative of results for a full year.  These financial statements and accompanying notes should be read in conjunction with the Company’s Form 10-K for the year ended December 31, 2011 and Form 10-Q for the quarterly period ended June 30, 2011.

Note 2:      Recently Adopted Accounting Pronouncements

In 2012, we adopted Accounting Standards Update (ASU) 2011-05 which requires the presentation of the components of net income and other comprehensive income and other comprehensive income either in a single continuous statement or in two separate but consecutive statements. This update eliminates the option to present the components of other comprehensive income as part of the statement of shareholders’ equity.

Note 3:      Disclosures about Fair Value:

Securities available for sale and certificate of deposits (securities held to maturity) are valued at fair value.  The Company’s estimated fair values of securities are as follows.

	June 30, 2012
	Current				Non-Current				Total
	Fair Value		Unrealized Gain/(Loss)		Fair Value		Unrealized Gain/(Loss)		Fair Value		Unrealized Gain/(Loss)
Certificate of Deposits	$	501,384		--		480,000		--		981,384		--
Mutual Funds		--		--		--		--		--		--
Equity Securities		--		--		--		--		--		--
Total	$	501,384		--		480,000		--		981,384		--

	June 30, 2011
	Current				Non-Current				Total
	Fair Value		Unrealized Gain/(Loss)		Fair Value		Unrealized Gain/(Loss)		Fair Value		Unrealized Gain/(Loss)
Certificate of Deposits	$	495,625		--		--		--		495,625		--
Mutual Funds		--		--		799,044		13,078		799,044		13,078
Equity Securities		--		--		--		--		--		--
Total	$	495,625		--		799,044		13,078		1,294,669		13,078

5

CKX Lands, Inc.

Notes to Financial Statements

June 30, 2012

(Unaudited)

Fair value measurements disclosure for securities is as follows.

	June 30, 2012
	Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
Certificate of Deposit	$	981,384		--		--
Mutual Funds		--		--		--
Equity Securities	$	--		--		--

	June 30, 2011
	Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
Certificate of Deposit	$	495,625		--		--
Mutual Funds		799,044		--		--
Equity Securities	$	--		--		--

Note 4:      Income Taxes:

In accordance with generally accepted accounting principles, the Company has analyzed its filing positions in federal and state income tax returns for the tax years ending December 31, 2008 through 2011 that remain subject to examination.  The Company believes that all filing positions are highly certain and that all income tax filing positions and deductions would be sustained upon a taxing jurisdiction’s audit. Therefore, no reserve for uncertain tax positions is required.  No interest or penalties have been levied against the Company and none are anticipated.

Note 5:      Land Sale:

During the first quarter of 2012, the Company sold 80 acres of land for $160,000 and reported a gain of $124,000.  At March 31, 2012, this transaction was structured as a “deferred exchange using a qualified intermediary” pursuant to Paragraph 1031 of the Internal Revenue Code (1031 Exchange) for income tax purposes and as such the gain of $124,000 was deferred for income tax purposes.  During July, 2012, the Company determined that it would not be able to complete the 1031 Exchange and the $159,000 held by the intermediary was returned to the Company.  At June 30, 2012, the Company recorded the $124,000 gain as current for income tax purposes

6

Item 2.              MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

Results of Operations

Revenue

Revenues for the first six months of 2012 increased by $1,077,856 from the revenues for the first six months of 2011 to $1,740,372.

Oil and gas revenues increased by $790,711 to $1,425,324 in 2012.  Oil and gas revenues consists of royalty, lease rental and geophysical revenue.  Royalty revenue increased by $767,816 and lease rentals decreased by $6,970 from 2011.  Geophysical revenues increased by $29,864 from 2011.

Gas production increased by 10,203 MCF, and the average gas sales price per MCF decreased by 26.80% resulting in a decrease in gas revenue of $5,944. Revenue from oil production increased by $684,365, due to an increase of 9.17% in the average barrel sales price and a increase in production of approximately 5,924 barrels.  Revenues from plant products increased by $89,395 from 2011 revenues.

The following schedule summarizes barrels and MCF produced and average price per barrel and per MCF.

	Six Months Ended 06/30/12		Six Months Ended 06/30/11
Net gas produced (MCF)		42,868		32,665
Average gas sales price (per MCF)(1)	$	3.47	$	4.74
Net oil produced (Bbl)(2)		9,988		4,064
Average oil sales price (per Bbl)(1,2)	$	109.22	$	100.05

Notes to above schedule:

(1) Before deduction of production and severance taxes.

(2) Excludes plant products.

Timber revenue increased from $3,439 to $5,005 in 2012.  Generally, timber prices have been depressed for the last several years and the Company has elected to only harvest timber for internal maintenance programs for age class timber and storm protection measures.

Agriculture revenue increased from $24,464 to $310,042 in 2012, primarily due to a pipeline right of way fee.

Costs and Expenses

Oil and gas production costs, primarily severance taxes, increased by $71,735 in 2012 due to increased oil and gas revenues.

Other costs and expenses incurred for the six months ended December 31, 2012 were generally flat from 2011 reported amounts.

7

Financial Condition

Current assets less restricted cash and non-current certificates of deposit totaled $5,938,786 and total liabilities equaled $240,229 at June 30, 2012.  Management believes available cash and investments together with funds generated from operations should be sufficient to meet operating requirements and provide funds for strategic acquisitions.

The Company declared and paid another seven cents per common share during the quarter ended June 30, 2012. It is anticipated that the Company will be able to continue paying a seven cents per common share dividend each quarter.  From time to time, the Company may elect to pay an extra dividend.  In determining if an extra dividend will be declared, the Board of Directors will take into consideration the Company’s current liquidity and capital resources and the availability of suitable timberland that has mineral potential.

Issues and Uncertainties

This Quarterly Report contains forward-looking statements.  These statements are based on current expectations and assumptions that are subject to risks and uncertainties.  Actual results could differ materially because of issues and uncertainties such as those discussed below, which, among others, should be considered in evaluating the Company’s financial outlook.

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

Item 3.              Not applicable.

Item 4.              CONTROLS AND PROCEDURES

Evaluation of Disclosure Controls and Procedures

The Company has evaluated the effectiveness of the design and operation of its disclosure controls and procedures pursuant to Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934 as of the period covered by this report. Based on the evaluation, performed under the supervision and with the participation of the Company’s management, including the Chief Executive Officer (“CEO”) and Chief Financial Officer (“CFO”), the Company’s management, including the CEO and CFO, concluded that the Company’s disclosure controls and procedures were effective as of the end of the period covered by the report.

Changes in Internal Control Over Financial Reporting

There were no significant changes with respect to the Company’s internal control over financial reporting or in other factors that materially affected, or are reasonably likely to materially affect, our internal control over financial reporting during the quarter covered by this report.

8

Part II.  Other Information

Item 1 – 5.        Not Applicable

Item 6.              EXHIBITS

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

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

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

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

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

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

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

101.INS**	XBRL Instance
101.SCH**	XBRL Taxonomy Extension Schema
101.CAL**	XBRL Taxonomy Extension Calculation
101.DEF**	XBRL Taxonomy Extension Definition
101.LAB**	XBRL Taxonomy Extension Labels
101.PRE**	XBRL Taxonomy Extension Presentation

** XBRL Information is furnished and not filed or a part of a registration statement or prospectus for purposes of sections 11 or 12 of the Securities Act of 1933, as amended, is deemed not filed for purposes of section 18 of the Securities Exchange Act of 1934, as amended, and otherwise is not subject to liability under these sections.

9

Signature

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

	CKX Lands, Inc.
Date: August 9, 2012	/s/ Joseph K. Cooper
	Joseph K. Cooper
	President and Chief Executive Officer
Date: August 9, 2012	/s/ Brian R. Jones
	Brian R. Jones
	Treasurer and Chief Financial Officer

10

EX-31.1

CKX Lands, Inc.

Exhibit 31.1

I, Joseph K. Cooper, certify that:

1. I have reviewed this quarterly report on Form 10-Q of CKX Lands, Inc.;

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 small business issuer as of, and for, the periods presented in this report;

4. The small business issuer’s other certifying officer(s) 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)) for the small business issuer 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 small business issuer, 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 my 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 small business issuer’s 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 small business issuer’s internal control over financial reporting that occurred during the small business issuer’s most recent fiscal quarter (the small business issuer’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the small business issuer’s internal control over financial reporting; and

5. The small business issuer’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the small business issuer’s auditors and the audit committee of the small business issuer’s board 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 small business issuer’s 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 small business issuer’s internal control over financial reporting.

Date: August 9, 2012	/s/ Joseph K. Cooper
	Joseph K. Cooper
	President and Chief Executive Officer

EX-31.2

CKX Lands, Inc.

Exhibit 31.2

I, Brian R. Jones, certify that:

1. I have reviewed this quarterly report on Form 10-Q of CKX Lands, Inc.;

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 small business issuer as of, and for, the periods presented in this report;

4. The small business issuer’s other certifying officer(s) 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)) for the small business issuer 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 small business issuer, 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 my 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 small business issuer’s 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 small business issuer’s internal control over financial reporting that occurred during the small business issuer’s most recent fiscal quarter (the small business issuer’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the small business issuer’s internal control over financial reporting; and

5. The small business issuer’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the small business issuer’s auditors and the audit committee of the small business issuer’s board 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 small business issuer’s 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 small business issuer’s internal control over financial reporting.

Date: August 9, 2012	/s/ Brian R. Jones
	Brian R. Jones
	Treasurer and Chief Financial Officer

EX-32

CKX Lands, Inc.

Exhibit 32

CERTIFICATION PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

(18 U.S.C. SECTION 1350)

In connection with the Quarterly Report of CKX Lands, Inc., a Louisiana corporation (the “Company”), on Form 10-Q for the quarter ended June 30, 2012 as filed with the Securities and Exchange Commission (the “Report”), I, Joseph K. Cooper, Chief Executive Officer of the Company, and Brian R. Jones, Chief Financial Officer of the Company, respectively, do each hereby certify, pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:

(1) The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

(2) The information contained in the Report fairly presents, in all material respects, the financial condition and result of operations of the Company.

Date: August 9, 2012	/s/ Joseph K. Cooper
	Joseph K. Cooper
	President and Chief Executive Officer

Date: August 9, 2012	/s/ Brian R. Jones
	Brian R. Jones
	Treasurer and Chief Financial Officer

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Note 2 - Recently Adopted Accounting Pronouncements

6 Months Ended

Jun. 30, 2012

New Accounting Pronouncements and Changes in Accounting Principles [Text Block]

Note 2:      Recently Adopted Accounting Pronouncements

In 2012, we adopted Accounting Standards Update (ASU) 2011-05 which requires the presentation of the components of net income and other comprehensive income and other comprehensive income either in a single continuous statement or in two separate but consecutive statements. This update eliminates the option to present the components of other comprehensive income as part of the statement of shareholders’ equity.

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Note 1 - Basis of Presentation

6 Months Ended

Jun. 30, 2012

Organization, Consolidation and Presentation of Financial Statements Disclosure [Text Block]

Note 1:      Basis of Presentation

The accompanying unaudited financial statements of CKX Lands, Inc. (“Company”) have been prepared in accordance with United States generally accepted accounting principles for interim financial information.  They do not include all information and footnotes required by United States generally accepted accounting principles for complete financial statements.  Except as described herein, there has been no material change in the information disclosed in the notes to the financial statements included in our financial statements as of and for the year ended December 31, 2011.  In the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation have been included in the accompanying financial statements.

Interim results are not necessarily indicative of results for a full year.  These financial statements and accompanying notes should be read in conjunction with the Company’s Form 10-K for the year ended December 31, 2011 and Form 10-Q for the quarterly period ended June 30, 2011.

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Balance Sheets (Unaudited) (USD $)	Jun. 30, 2012	Dec. 31, 2011
Current Assets:
Cash and cash equivalents	$ 4,628,568	$ 4,124,908
Accounts receivable	219,774	276,217
Prepaid expense and other assets	109,060	20,828
Total current assets	5,617,789	4,917,578
Securities available for sale
Total assets	11,660,615	10,994,969
Liabilities and Stockholders’ Equity
Trade payables and accrued expenses	54,435	58,662
Current		87,419
Deferred	3,976	5,153
Total current liabilities	58,411	151,234
Deferred income tax payable	181,818	181,818
Total liabilities	240,229	333,052
Stockholders’ Equity:
Common stock, no par value: 3,000,000 shares authorized; 2,100,000 shares issued	72,256	72,256
Retained earnings	11,723,646	10,965,177
Less cost of treasury stock (157,505 shares)	(375,516)	(375,516)
Total stockholders’ equity	11,420,386	10,661,917
Total liabilities and stockholders’ equity	11,660,615	10,994,969
Property And Equipment Net [Member] | Deposit Current [Member]
Current Assets:
Total Property and Equipment, net	16,270	19,614
Total Property And Equipment Net [Member] | Deposit Current [Member]
Current Assets:
Total Property and Equipment, net	5,562,826	5,597,391
Deposit Noncurrent [Member]
Current Assets:
1031 trust account	159,003
Certificates of deposit	501,384	495,625
Deposit Current [Member]
Current Assets:
Certificates of deposit	480,000	480,000
Timber less accumulated depletion of $691,823 and $691,436, respectively	1,150,522	1,146,743
Land	$ 4,396,034	$ 4,431,034

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Statements of Changes in Stockholders Equity (Unadited) (USD $)	Retained Earnings [Member]	Accumulated Other Comprehensive Income (Loss) [Member]	Common Stock [Member]	Treasury Stock [Member]	Total
Balance at Dec. 31, 2010	$ 10,543,924	$ 5,581	$ 72,256	$ 375,516	$ 10,246,245
Net income	295,730				295,730
Other comprehensive income:		3,481			3,481
Dividends	(271,949)				(271,949)
Dividend reversion	13,375				13,375
Balance at Jun. 30, 2011	10,581,080	9,062	72,256	375,516	10,286,882
Balance at Dec. 31, 2011	10,965,177		72,256	375,516	10,661,917
Net income	1,030,418				1,030,418
Dividends	(271,949)				(271,949)
Balance at Jun. 30, 2012	$ 11,723,646		$ 72,256	$ 375,516	$ 11,420,386

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Statements of Cash Flows (Unaudited) (USD $)	6 Months Ended
	Jun. 30, 2012	Jun. 30, 2011
Net Income	$ 1,030,418	$ 295,730
Depreciation, depletion and amortization	3,731	21,298
Deferred income tax expense	(5,831)	(12,427)
Gain from sale of land and other assets	(124,000)	(306)
Increase in current assets	(27,135)	(88,587)
Decrease in current liabilities	(91,646)	(9,290)
Net cash provided from operating activities	785,537	206,418
Maturity proceeds	255,625
Purchases	(261,384)	(5,625)
Purchases		(9,470)
Sales proceeds	159,000	167
Purchases	(4,166)	(532,944)
Proceeds held in 1031 trust account	(159,003)
Net cash used in investing activities	(9,928)	(547,872)
Dividends paid, net of reversion	(271,949)	(258,574)
Net cash used in financing activities	(271,949)	(258,574)
Net increase (decrease) in cash and cash equivalents	503,660	(600,028)
Beginning	4,124,908	5,182,316
Ending	4,628,568	4,582,288
Income taxes	606,641	112,160
Net change in recognized and unrecognized unrealized gains (losses) on available-for-sale securities		$ 5,802

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Balance Sheets (Unaudited) (Parentheticals) (USD $)	Jun. 30, 2012	Dec. 31, 2011
Common stock, par value (in Dollars per share)	$ 0	$ 0
Common stock shares authorized (in Shares)	3,000,000	3,000,000
Common stock shares issued (in Shares)	2,100,000	2,100,000
Treasury stock, shares (in Shares)	157,505	157,505
Accumulated Depreciation [Member] | Deposit Current [Member]
Accumulated depreciation, building and equipment (in Dollars)	$ 74,162	$ 70,818
Accumulated Depletion [Member] | Deposit Current [Member]
Accumulated depreciation, building and equipment (in Dollars)	$ 691,823	$ 691,436

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Document And Entity Information	6 Months Ended
	Jun. 30, 2012
Document and Entity Information [Abstract]
Entity Registrant Name	CKX LANDS, INC.
Document Type	10-Q
Current Fiscal Year End Date	--12-31
Entity Common Stock, Shares Outstanding	1,942,495
Amendment Flag	false
Entity Central Index Key	0000352955
Entity Current Reporting Status	Yes
Entity Voluntary Filers	No
Entity Filer Category	Smaller Reporting Company
Entity Well-known Seasoned Issuer	No
Document Period End Date	Jun. 30, 2012
Document Fiscal Year Focus	2012
Document Fiscal Period Focus	Q2

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Statements of Income and Comprehensive Income (Unaudited) (USD $)	3 Months Ended		6 Months Ended
	Jun. 30, 2012	Jun. 30, 2011	Jun. 30, 2012	Jun. 30, 2011
Revenues:
Oil and gas	$ 520,682	$ 338,834	$ 1,425,324	$ 634,613
Agriculture	284,510	16,738	310,043	24,464
Timber	70		5,005	3,439
Total revenues	805,262	355,572	1,740,372	662,516
Costs and Expenses:
Oil and gas production	57,939	28,256	122,979	51,244
Agriculture	1,047	2,455	1,854	2,962
Timber	6,057	4,986	14,226	14,637
General and administrative	115,493	128,187	216,969	219,843
Depreciation and depletion	1,615	738	3,731	21,298
Total cost and expenses	182,151	164,622	359,759	309,984
Income from operations	623,111	190,950	1,380,613	352,532
Other Income / (Expense):
Interest income	4,706	10,276	5,244	20,469
Dividend income	55	4,664	55	9,527
Gain on sale of land and other assets			124,000	306
Net other income / (expense)	4,761	14,940	129,299	30,302
Income before income taxes	627,872	205,890	1,509,912	382,834
Federal and state income taxes:
Current	255,026	54,537	485,325	99,531
Deferred	(45,800)	(12,575)	(5,831)	(12,427)
Total income taxes	209,226	41,962	479,494	87,104
Net Income	418,646	163,928	1,030,418	295,730
Other Comprehensive Income, Net of Taxes:
Change in unrealized net holding gains occurring during period, net of taxes of $1,813 and $2,321, respectively for 2011		2,718		3,481
Other comprehensive income		2,718		3,481
Comprehensive Income	$ 418,646	$ 166,646	$ 1,030,418	$ 299,211
Per Common Stock (1,942,495 shares):
Net Income (in Dollars per share)	$ 0.22	$ 0.08	$ 0.53	$ 0.15
Dividends (in Dollars per share)	$ 0.07	$ 0.07	$ 0.14	$ 0.14

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Note 5 - Land Sale

6 Months Ended

Jun. 30, 2012

Retail Land Sales, Description [Text Block]

Note 5:      Land Sale:

During the first quarter of 2012, the Company sold 80 acres of land for $160,000 and reported a gain of $124,000.  At March 31, 2012, this transaction was structured as a “deferred exchange using a qualified intermediary” pursuant to Paragraph 1031 of the Internal Revenue Code (1031 Exchange) for income tax purposes and as such the gain of $124,000 was deferred for income tax purposes.  During July, 2012, the Company determined that it would not be able to complete the 1031 Exchange and the $159,000 held by the intermediary was returned to the Company.  At June 30, 2012, the Company recorded the $124,000 gain as current for income tax purposes

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Note 4 - Income taxes:

6 Months Ended

Jun. 30, 2012

Income Tax Disclosure [Text Block]

Note 4:      Income Taxes:

In accordance with generally accepted accounting principles, the Company has analyzed its filing positions in federal and state income tax returns for the tax years ending December 31, 2008 through 2011 that remain subject to examination.  The Company believes that all filing positions are highly certain and that all income tax filing positions and deductions would be sustained upon a taxing jurisdiction’s audit. Therefore, no reserve for uncertain tax positions is required.  No interest or penalties have been levied against the Company and none are anticipated.

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Note 3 - Disclosures About Fair Value: (Detail) - Fair value measurements disclosure for securities is as follows. (USD $)	Jun. 30, 2012	Jun. 30, 2011
Fair Value Measurements	$ 981,384	$ 1,294,669
Certificate Of Deposits [Member] | Fair Value, Inputs, Level 1 [Member]
Fair Value Measurements	981,384	495,625
Mutual Funds [Member] | Fair Value, Inputs, Level 1 [Member]
Fair Value Measurements		$ 799,044

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Note 3 - Disclosures About Fair Value: (Tables)

6 Months Ended

Jun. 30, 2012

Schedule of Cash, Cash Equivalents and Short-term Investments [Table Text Block]

	June 30, 2012
	Current				Non-Current				Total
	Fair Value		Unrealized Gain/(Loss)		Fair Value		Unrealized Gain/(Loss)		Fair Value		Unrealized Gain/(Loss)
Certificate of Deposits	$	501,384		--		480,000		--		981,384		--
Mutual Funds		--		--		--		--		--		--
Equity Securities		--		--		--		--		--		--
Total	$	501,384		--		480,000		--		981,384		--

	June 30, 2011
	Current				Non-Current				Total
	Fair Value		Unrealized Gain/(Loss)		Fair Value		Unrealized Gain/(Loss)		Fair Value		Unrealized Gain/(Loss)
Certificate of Deposits	$	495,625		--		--		--		495,625		--
Mutual Funds		--		--		799,044		13,078		799,044		13,078
Equity Securities		--		--		--		--		--		--
Total	$	495,625		--		799,044		13,078		1,294,669		13,078

Fair Value, Assets Measured on Recurring Basis [Table Text Block]

	June 30, 2012
	Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
Certificate of Deposit	$	981,384		--		--
Mutual Funds		--		--		--
Equity Securities	$	--		--		--

	June 30, 2011
	Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
Certificate of Deposit	$	495,625		--		--
Mutual Funds		799,044		--		--
Equity Securities	$	--		--		--

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Note 3 - Disclosures About Fair Value: (Detail) - The Company’s estimated fair values of securities are as follows (USD $)	6 Months Ended
	Jun. 30, 2011	Jun. 30, 2012
Fair Value	$ 1,294,669	$ 981,384
Unrealized Gain/(Loss)	13,078
Certificate Of Deposits [Member] | Current [Member]
Fair Value	495,625	501,384
Certificate Of Deposits [Member] | Noncurrent [Member]
Fair Value		480,000
Certificate Of Deposits [Member]
Fair Value	495,625	981,384
Mutual Funds [Member] | Noncurrent [Member]
Fair Value	799,044
Unrealized Gain/(Loss)	13,078
Mutual Funds [Member]
Fair Value	799,044
Unrealized Gain/(Loss)	13,078
Current [Member]
Fair Value	495,625	501,384
Noncurrent [Member]
Fair Value	799,044	480,000
Unrealized Gain/(Loss)	$ 13,078

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Note 5 - Land Sale (Detail) (USD $)	1 Months Ended	6 Months Ended
	Jun. 30, 2012	Jun. 30, 2012	Jun. 30, 2011	Jul. 31, 2012	Mar. 31, 2012 acre
Acres Of Land (in Acres)					80
Retail Land Sales Gross Amount Of Sale				$ 159,000	$ 160,000
Retail Land Sales Gain Loss On Sale Of Land					124,000
Deferred Gain on Sale of Property					124,000
Gain (Loss) on Sale of Property	$ 124,000	$ 124,000	$ 306

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Statements of Income and Comprehensive Income (Unaudited) (Parentheticals) (USD $)	3 Months Ended		6 Months Ended
	Jun. 30, 2012	Jun. 30, 2011	Jun. 30, 2012	Jun. 30, 2011
Change in unrealized net holding gains, taxes (in Dollars)	$ 508	$ 508	$ 508	$ 508
Per Common Share (in Shares)	1,942,495	1,942,495	1,942,495	1,942,495

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Note 3 - Disclosures About Fair Value:

6 Months Ended

Jun. 30, 2012

Fair Value, Measurement Inputs, Disclosure [Text Block]

Note 3:      Disclosures about Fair Value:

Securities available for sale and certificate of deposits (securities held to maturity) are valued at fair value.  The Company’s estimated fair values of securities are as follows.

	June 30, 2012
	Current				Non-Current				Total
	Fair Value		Unrealized Gain/(Loss)		Fair Value		Unrealized Gain/(Loss)		Fair Value		Unrealized Gain/(Loss)
Certificate of Deposits	$	501,384		--		480,000		--		981,384		--
Mutual Funds		--		--		--		--		--		--
Equity Securities		--		--		--		--		--		--
Total	$	501,384		--		480,000		--		981,384		--

	June 30, 2011
	Current				Non-Current				Total
	Fair Value		Unrealized Gain/(Loss)		Fair Value		Unrealized Gain/(Loss)		Fair Value		Unrealized Gain/(Loss)
Certificate of Deposits	$	495,625		--		--		--		495,625		--
Mutual Funds		--		--		799,044		13,078		799,044		13,078
Equity Securities		--		--		--		--		--		--
Total	$	495,625		--		799,044		13,078		1,294,669		13,078

Fair value measurements disclosure for securities is as follows.

	June 30, 2012
	Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
Certificate of Deposit	$	981,384		--		--
Mutual Funds		--		--		--
Equity Securities	$	--		--		--

	June 30, 2011
	Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
Certificate of Deposit	$	495,625		--		--
Mutual Funds		799,044		--		--
Equity Securities	$	--		--		--