Note 9 - Discontinued Operations

12 Months Ended

Dec. 31, 2020

Notes to Financial Statements

Disposal Groups, Including Discontinued Operations, Disclosure [Text Block]

9. DISCONTINUED OPERATIONS

In

December 2019,

the Company entered into an Asset Purchase Agreement to sell the PUC-regulated assets of Kapalua Water Company, Ltd. and Kapalua Waste Treatment Company, Ltd. located in the Kapalua Resort for a purchase price of approximately

$4.3

million, including a Capital Expenditures Adjustment, as defined in the agreement, to be determined at closing. The sale is subject to certain closing conditions, including PUC approval. As part of the agreement, the purchaser commits to serve the future expansion areas of Kapalua as they are developed. Furthermore, the Company agrees to deliver water from its wells and ditches to certain delivery points at defined rates over an initial period of

20

years from the date of closing.

Under terms of the agreement, the purchase price will

not

include approximately

$3.6

million of water system infrastructure and other related assets conveyed to the Company by the owner of a

125

-acre portion of the Kapalua Mauka project. Accordingly, upon classification of the Kapalua Water Company, Ltd. and Kapalua Waste Treatment Company, Ltd assets as held for sale, these assets were written down to fair value and included as part of the Company's discontinued operations for the year ended

December 31, 2019.

The fair value of the assets is measured using Level

3

inputs.

The results related to the operation of these assets have been reported as discontinued operations in

2020

and

2019

as follows:

	2020			2019
	(in thousands)
Operating revenues	$	2,646		$	3,125
Operating costs and expenses		(2,787	)		(2,585	)
Depreciation expense		-			(283	)
Impairment loss		(196	)		(3,614	)
Loss from discontinued operations	$	(337	)	$	(3,357	)

There were

no

capital expenditures in discontinued operations during

2020.

Capital expenditures were

$0.6

million in

2019.