(6)

OTHER LIABILITIES AND DEFERRED REVENUE; OTHER REVENUES

Refer to Note 9 to the consolidated financial statements contained in the 2017 Form 10-K for detail about the settlement agreement entered into between Palm Coast and the State of Florida in the first quarter of 2018. As a result of the settlement agreement, in the first quarter of 2018, Palm Coast reduced its previously recorded liability of $3,000,000 and a related $26,000 interest accrual by $1,620,000 to $1,406,000 by recognizing a pre-tax gain of $1,318,000 and recording a deferred gain of $302,000. In connection with the settlement, Palm Coast made a payment of $163,000 to the State of Florida during the first quarter of 2018 thereby reducing its remaining liability to $1,243,000. The $1,318,000 pre-tax gain is included in Other revenues in the accompanying financial statements. The deferred gain of $302,000 was reduced to $282,000 during the first quarter of 2018 with the $20,000 reduction being a non-cash credit to operating expenses. The remaining deferred gain of $282,000 will be recognized over a period of approximately eight years from July 31, 2017.

In addition, refer to Note 10 to the consolidated financial statements contained in the 2017 Form 10-K for detail about the Oil and Gas Lease and the Addendum thereto with Thrust Energy, Inc. and Cebolla Roja, LLC. No royalties under the Lease were received during the first quarter of 2018. Revenue from this transaction is being recorded over the lease term and approximately $57,000 was recognized during the first quarter of each of 2018 and 2017. At July 31, 2017, there was $246,000 of deferred revenue remaining to be recognized in future periods.

During the first quarter of 2017, a subsidiary of AMREP Southwest sold a single tenant retail commercial building in Rio Rancho, New Mexico, which resulted in a pre-tax gain of $1,496,000 that was included in Other revenues for that quarter.

Other revenues for the first quarter of 2018 and 2017 consist of:

	First Quarter of 2018		First Quarter of 2017
	(in thousands)
Settlement gain	$	1,318	$	-
Sale of commercial building		-		1,496
Deferred revenue and other		88		164
	$	1,406	$	1,660