PURE CYCLE CORPORATION Overview
The discussion and analysis below includes certain forward-looking statements that are subject to risks, uncertainties and other factors, as described in "Risk Factors" and elsewhere in this Annual Report on Form 10-K, that could cause our actual growth, results of operations, performance, financial position and business prospects and opportunities for this fiscal year and the periods that follow to differ materially from those expressed in, or implied by, those forward-looking statements. Readers are cautioned that forward-looking statements contained in this Annual Report on Form 10-K should be read in conjunction with our disclosure under the heading "FORWARD-LOOKING STATEMENTS" on page 1. The following Management's Discussion and Analysis (MD&A) is intended to help the reader understand the results of operations and our financial condition and should be read in conjunction with the accompanying consolidated financial statements and the notes thereto included in Part II, Item 8 of this Annual Report on Form 10-K.
Executive Summary
We saw tremendous growth in each of our business lines in fiscal 2022. Our land development segment was positively impacted by the continued development of ourSky Ranch Master Planned Community (Phase 1 complete and Phase 2A nearly 80% complete with Phase 2B on the horizon). We expanded our water assets by completing a$3.0 million well and pipeline extension in theBox Elder Creek basin and through the acquisition of 370 acre-feet of water in theLost Creek basin and had a record year for commercial water sales to oil and gas operators. We launched our single-family home rental business with the completion and rental of three homes and construction commenced on the next eleven units. Our notable financial highlights from fiscal 2022 include the following:
Total revenues were
? driven by the recognition of revenue related to lot sales at Sky Ranch and
record level water sales to oil and gas operators for use in their drilling
operations;
? Revenue from commercial water sales, which includes selling water to oil and
gas operators, was
Recorded lot sales for 2022 were
? 2021, which is due to the completion of Phase 1 and the focus on getting Phase
2A finished lots delivered by year end, despite the delays in permitting at the
county;
Pre-tax income was
2021. This is largely attributable to 2021 being positively impacted by the
? recognition of a note receivable related to public improvement reimbursables
allowing us to record
fees and interest income in 2021;
In 2022 we posted
? down from
recording of the reimbursables in 2021 as noted above;
? Total assets continue to increase to
? Total equity increased to
atAugust 31, 2021 . Recent Developments The housing market deteriorated rapidly in the third quarter of calendar 2022 as theFederal Reserve remained aggressive in its actions to combat inflation. As a result, 30-year fixed mortgage rates continued to rise and ended the quarter at their highest level in over 15 years. The magnitude and speed of these recent rate increases has caused many buyers to pause and reconsider a home purchase. We believe several long-term land development and housing market fundamental factors remain positive, including favorable demographics, a lot and housing supply-demand imbalance resulting from a decade-plus underproduction of new
homes in relation to
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population growth, and low resale home inventory. While we remain confident in the long-term growth prospects for the industry given these factors, the current demand for new homes is subject to continued uncertainty due to many factors. The combination of sharply higher mortgage interest rates since early 2022, several years of rising housing prices, elevated inflation, and various other macroeconomic and geopolitical concerns, is moderating housing demand which is expected to continue into 2023. Given current conditions, we plan to continue to monitor market dynamics and surrounding community performance to determine timing of additional construction expenditures at Sky Ranch. we believe our reasonably priced lots and the low inventory of entry level housing in theDenver market will help Sky Ranch navigate the changing market better than other surrounding and significantly higher priced communities. Our future performance and the strategies we implement (and adjust or refine as necessary or appropriate) will depend significantly on prevailing economic, homebuilding industry and capital, credit and financial market conditions and on a fairly stable and constructive political and regulatory environment (particularly regarding housing and mortgage loan financing policies). TheFederal Reserve's aggressive raising of the federal funds interest rate and other measures during the first nine months of 2022 to moderate persistentU.S. inflation, and the further actions it has stated it intends to take, are expected to be an ongoing headwind for the housing market in 2022 and beyond, as they have elevated mortgage loan interest rates, and created macroeconomic uncertainty and volatility across financial markets. In addition, we and our homebuilding partners continue to experience services and supply constraints and rising and volatile raw material prices. Prolonged supply chain disruptions and other production-related challenges could extend or delay our construction cycle times and intensify construction-related cost pressures beyond our experience in fiscal 2022. In addition, consumer demand for our homes, and our ability to grow our scale, revenues and returns in fiscal 2023 could be materially and negatively affected by the above-described monetary policy impacts or other factors that curtail mortgage loan availability, employment or income growth or consumer confidence in theU.S. or in theColorado markets. The potential extent and effect of these factors on our business is highly uncertain, unpredictable and outside our control, and our past performance, including in fiscal 2022, should not be considered indicative of our future results.
Results of Operations
The results of our operations for the fiscal years ended
Year Ended
(In thousands, except for water
deliveries and taps sold) August 31, 2022 August 31, 2021 $ Change % Change
Water and wastewater resource
revenue $ 10,051 $ 9,656 $ 395 4 %
Land development revenue
Lot sales 12,187 5,840 6,347 109 %
Project management fees 683 1,629 (946) (58) %
Single-family rental 82 - 82 100 %
Total revenue 23,003 17,125 5,878 34 %
Water and wastewater resource cost
of revenue 4,440 3,867 573 15 %
Land development cost of revenue 2,166 2,535 (369) (15) %
Single-family rental cost of
revenue 23 - 23 100 %
Total cost of revenue 6,629 6,402 227 4 %
General and administrative expense
and depreciation 6,278 5,454 824 15 %
Operating income 10,096 5,269 4,827 92 %
Other income, net 2,609 21,321 (18,712) (88) %
Income from operations before
income taxes 12,705 26,590 (13,885) (52) %
Income tax expense (3,086) (6,480) (3,394) (52) %
Net income $ 9,619 $ 20,110 $ (10,491) (52) %
Basic EPS $ 0.40 $ 0.84 $ (0.44) (52) %
Diluted EPS $ 0.40 $ 0.83 $ (0.43) (52) %
Water delivered (thousands of
gallons) 404,947 257,776 147,171 57 %
Water and wastewater taps sold 159 167 (8) (5) %
Lots delivered - Phase 1 - 22 (22) (100) %
Lots delivered - Phase 2A 67 152 (85) (56) %
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Fiscal 2022 vs. Fiscal 2021
Revenue - Total revenue increased in 2022 as compared to 2021, primarily due to
increased revenue from lot sales due to Phase 1 being completed early in fiscal
2022 and the recognition of revenue from the development of Phase 2A.
Additionally, commercial water sales, mainly to oil and gas operators for use in
their drilling operations, increased from $3.3 million in 2021 to $4.1 million
in 2022, as oil and gas operators increased drilling operations throughout the
front range of Colorado . These increases are partially offset by decreased tap
fees (from $5.2 million in 2021 to $4.9 million in 2022) due to timing of when
Phase 2A started in relation to when Phase 1 was completed, and project
management revenue (from $1.6 million in 2021 to $0.7 million in 2022). Project
management revenue declined from 2021, due to the recording of the cumulative
project management fees in 2021 which have been earned since the start of
development at the Sky Ranch community, which was booked in 2021 because of the
removal of the contingency of the collection of the fees. As Sky Ranch continues
to grow we expect lot sales to generate significant revenue in the future, and
increasing water and wastewater usage fees as we continue to add customers to
our water resource development segment.
Cost of revenue - Total costs of revenue increased marginally in 2022 as
compared to 2021, primarily due to water usage costs increasing due to the
significant increase in water sales to oil and gas operators, offset by a
decrease in land development costs that are expensed due to a change in how the
public improvements are accounted for as detailed further below and in Note 5 to
the accompanying financial statements.
General and administrative expense - General and administrative expense
increased in 2022 as compared to 2021, primarily due to the increased number of
employees and increased compensation for existing employees as operations and
development continue to expand.
Other income, net - Other income, net decreased in 2022 as compared to 2021,
primarily due to the 2021 recognition of outstanding reimbursable costs and
interest income totaling $20.2 million as the collection of these amounts was
deemed probable. Additional information on the reimbursables can be found in
Notes 5 and 15 to the accompanying consolidated financial statements.
Additionally, in fiscal 2022 we recognized $0.1 million of interest expense
related to two notes payable we entered into with our primary lender for the
financing of the rental units and the Lost Creek Water purchase, both of which
are described in greater detail in Note 8 to the accompanying consolidated
financial statements.
Income tax expense - Income tax expense decreased in 2022 as compared to 2021,
due to lower pre-tax income primarily from the impact related to the recognition
of reimbursable costs due from the Sky Ranch CAB recognized in fiscal 2021. Our
effective tax rate remained relatively consistent year over year.
Water delivered - Water deliveries increased in 2022 as compared to 2021,
primarily due to increased sales to oil and gas operators, new Sky Ranch
customers and increased landscaping and irrigation water usage as more parks and
public spaces were completed at Sky Ranch. Oil and gas operations are highly
variable and dependent on oil prices, demand for gas, and timing of other leases
in our service areas; therefore, we cannot provide any assurances that we will
realize this level of sales to oil and gas customers in the future. As Sky Ranch
continues to develop, we anticipate continued growth in our residential water
and wastewater service revenues.
Water and wastewater tap sales - Water and wastewater tap sales decreased in
2022 as compared to 2021 due to the timing of closings at Sky Ranch. The
decrease in tap sales was offset by an increase in the rate per water tap sold
in 2022. Tap sales are driven by the issuance of building permits and the timing
of these are not contractually established with the home builders. During fiscal
2022, we sold 41 taps in Phase 1 and 113 taps in Phase 2A. We expect to sell the
remaining 116 taps in Phase 2A at Sky Ranch in fiscal 2023.
Lots delivered - The number of lots delivered (which refers to when title passed
on a lot to the homebuilder) decreased in 2022 compared to 2021 due to all lots
in Phase 1 of Sky Ranch having been delivered as of the first quarter of fiscal
2021, and 152 of the lots in Phase 2A having been delivered in the fourth
quarter of fiscal 2021. During fiscal 2022, we delivered 67 finished lots to the
one builder in Phase 2A that is buying finished lots versus making milestone
payments as construction progresses. Despite the lots being transferred to the
homebuilders, we still have various construction activities to complete Phase 2A
and to turn over the completed infrastructure to the applicable governmental
agency for maintenance.
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Water and Wastewater Resource Development Results of Operations
Year Ended
(In thousands, except for
water deliveries) August 31, 2022 August 31, 2021 $ Change % Change
Metered water usage from:
Municipal water usage $ 440 $ 339 $ 101 30 %
Commercial water usage 4,107 3,299 808 24 %
Wastewater treatment fees 248 199 49 25 %Water and wastewater tap fees 4,922 5,163
(241) (5) %
Other revenue 334 656 (322) (49) %
Total segment revenue 10,051 9,656 395 4 %
Water service costs 1,910 1,546 364 24 %
Wastewater service costs 501 371 130 35 %
Depreciation 1,740 1,457 283 19 %
Other 289 494 (205) (41) %
Total expenses 4,440 3,868 572 15 %
Segment operating income $ 5,611 $ 5,788 $ (177) (3) %
Water deliveries (thousands
of gallons)
On Site 5,786 10,652 (4,866) (46) %
Export - Commercial 23,976 25,489 (1,513) (6) %
Sky Ranch 50,471 42,965 7,506 17 %
Wild Pointe 32,278 24,014 8,264 34 %
O&G operations 292,436 154,656 137,780 89 %
Total water deliveries 404,947 257,776 147,171 57 %
Municipal water usage - Municipal water usage increased in 2022 compared to 2021, primarily due to new Sky Ranch customers in our water and wastewater resource development segment as well as increased water usage due to landscaping and irrigation usage. We anticipate these revenues to continue to increase in the future as more customers are added to our system as Sky Ranch continues to develop. Commercial water usage - The main component of commercial water usage is from sales to oil and gas operators for use in their drilling process. Commercial water sales increased during fiscal 2022, primarily due to increased oil and gas prices and new fracking permits obtained by our oil and gas customers. Because oil and gas is cyclical in nature as demand and prices fluctuate, we have no way of knowing if water provided to oil and gas operators will increase or decrease in the future. Commercial revenues in fiscal 2021 also included$0.4 million of revenue recognized when a deposit on water from an oil and gas operator expired unused and the deposit was forfeited. Wastewater treatment fees - Wastewater treatment fees increased in 2022 compared to 2021, primarily due to new Sky Ranch customers in our water and wastewater resource development segment. We anticipate these revenues to continue to increase in the future as more customers are added to our system as Sky Ranch continues to develop. Water and wastewater tap fees -Water and wastewater tap fees decreased in 2022 compared to 2021, primarily due to a decrease in the number of taps sold due to timing on completion of Phase 1 and the start of Phase 2A, which was partially offset by a price increase of water and wastewater taps. Water and wastewater taps are sold to home builders at the time a building permit is issued and are dependent on when the home builder constructs homes and not contractually driven in terms of timing; therefore, timing of tap sales fluctuate with demand for new construction. During the fiscal year ended 2022, the average price of a Sky Ranch water and wastewater tap was$33,000 compared to$31,000 per tap for the fiscal year 2021. Other revenue - Other revenue decreased in 2022 as compared to 2021, primarily due to a 2021 agreement to construct a special facility for WISE, for which$0.2 million and$0.4 million of revenue was recognized in fiscal 2022 and 2021. The project recognized revenue on a percent of completion basis and was completed during fiscal 2022. 42 Table of Contents
Water service costs - Water service costs increased in 2022 as compared to 2021, primarily due to increased water usage associated with our oil and gas customers and additional purchases of WISE water.
Wastewater service costs - Wastewater service costs increased in 2022 as compared to 2021, primarily due to the Sky Ranch water reclamation facility increasing its production and requiring more staff to run.
Other costs of revenue - Other costs of revenue decreased in 2022 as compared to 2021, primarily due to fewer expenses remaining for the completion of the special facilities for WISE.
Water delivered - Water deliveries increased in 2022 as compared to 2021, primarily due to increased oil and gas operations, new Sky Ranch customers and increased landscaping and irrigation water usage.
Land Development Results of Operations
Year Ended
(In thousands) August 31, 2022 August 31, 2021 $ Change % Change
Lot sales $ 12,187 $ 5,840 $ 6,347 109 %
Project management revenue 683 1,629 (946) (58)
Total revenue 12,870 7,469 5,401 72 %
Land development construction and project management costs 2,166 2,535 (369) (15) % Segment operating income $ 10,704 $ 4,934$ 5,770 117 % Lots delivered - Phase 1 - 22 (22) (100) % Lots delivered - Phase 2 67
152 (85) (56) %
Lot sales - Lot sales increased in 2022 as compared to 2021, primarily due to Phase 1 being complete early in fiscal 2022 and Phase 2A revenue being recognized throughout the year as construction progressed, with Phase 2A lot delivery completed by the end of summer 2022. Project management revenues - Project management revenues decreased in 2022 as compared to 2021, which was due to the determination in 2021 that reimbursable costs due from the Sky Ranch CAB are deemed probable of collection based on projections showing the Sky Ranch CAB will generate sufficient funds from its tax and fee income to repay us, resulting in the recognition of$1.5 million of cumulative project management fees being recorded in 2021. We earn a 5% project management fee on certain costs for managing the construction of public improvements at Sky Ranch. Land development construction and project management costs - Land development construction costs decreased in 2022 as compared to 2021, primarily due to Phase 1 being completed and Phase 2A construction progressing. The Phase 2A costs that are expensed are lower than Phase 1 due to the treatment of public improvement costs being added to the note receivable - related party versus being expensed as they were during a portion of fiscal 2021, until collectability was deemed probable. Lots delivered - The number of lots delivered (which refers to when title is passed to the homebuilder) decreased in 2022 compared to 2021 due to all lots in Phase 1 of Sky Ranch having been delivered as of the first quarter of fiscal 2021, and 152 of the lots in Phase 2A having been delivered in the fourth quarter of fiscal 2021. During fiscal 2022, we delivered 67 finished lots to the one builder in Phase 2A who is buying finished lots instead of making milestone payments as construction progresses. Despite the lots being transferred to the homebuilders, we still have various construction activities to complete Phase 2A to turn over the completed infrastructure to the applicable governmental agency that will maintain the infrastructure. Because we record lot sales as construction progresses, the timing of revenue and lot deliveries are not necessarily correlated. 43 Table of Contents
General and Administrative Expenses
The table below details significant items and changes included in our General
and Administrative Expenses (G&A Expenses) as well as the impact that
share-based compensation has on our G&A Expenses for the fiscal years ended
Summary of G&A Expenses
Year Ended
(in thousands) August 31, 2022 August 31, 2021 $ Change % Change
Significant G&A Expense items:
Salary and salary-related expenses $ 3,368 $ 2,820 $ 548 19 %
Share-based compensation 603 497 106 21 %
Professional fees 601 610 (9) (1) %
Public entity-related expenses, 484 362 122 34 %
including director fees
Corporate insurance 233 85 148 174 %
All other combined 604 765 (161) (21) %
G&A Expenses as reported $ 5,893 $
5,139
Salary and Salary-Related Expenses - Salary and salary-related expenses increased in fiscal 2022 compared to fiscal 2021 due to a larger employee base to manage the development of our Sky Ranch property and our water and wastewater systems, additional administrative staff, and increased compensation costs for employees to continue to attract and retain top talent. During fiscal 2022, we increased our staff by four employees. Share-based compensation expense increased due to option grants in fiscal 2022 and the fair value of unrestricted stock granted to non-employee board members in fiscal 2022.
Professional Fees - Professional fees consist mainly of legal and accounting fees, which remained consistent year over year.
Public Entity-Related Expenses, including director fees - Costs associated with being a corporation and costs associated with being a publicly traded entity consist primarily of XBRL and EDGAR conversion fees, stock exchange fees, and press releases. These costs fluctuate from year to year but remained relatively consistent from 2021 to 2022. Fees paid to our board increased in fiscal 2022 compared to fiscal 2021, due to the determination to increase director fees in 2022.
Corporate insurance - Corporate insurance costs increased as our operations continue to expand which is due to adding additional construction and rental home policies, and overall insurance rate increases.
All other - All other expenses include typical operating expenses related to the maintenance of our office and equipment, business development, travel, property taxes, and funding provided to theRangeview District and the Sky Ranch Districts. Other expenses decreased during fiscal 2022 compared to fiscal 2021. The changes were primarily the result of decreased equipment maintenance and the timing of various expenses, which will fluctuate year over year.
Liquidity, Capital Resources and Financial Position
We believe we are well-positioned to navigate the ever-evolving market conditions given our strong financial position. AtAugust 31, 2022 , our working capital, defined as current assets less current liabilities, was$27.0 million , which includes$34.9 million in cash and cash equivalents. We believe that as ofAugust 31, 2022 , and as of the date of the filing of this Annual Report on Form 10-K, we have sufficient working capital to fund our operations for the next 12 months. We have completed Phase 1 and have completed nearly 80% of the work required to deliver Phase 2A at Sky Ranch. Phase 2B is anticipated to begin during fiscal 2023. We have sold 219 lots in Phase 2A at Sky Ranch and have just over 20% of the construction related activities remaining for Phase 2A to be finished, which we anticipate completing during our fiscal 2023. We expect to spend$5.0 million in the next twelve months completing the construction of Phase 2A (of which we estimate$4.3 million will be reimbursable by the Sky Ranch CAB). We expect to begin Phase 2B during our fiscal 2023 and expect to spend$17.5 million in the next twelve months on remaining Phase 2A and Phase 2B construction activities. We anticipate receiving$19.0 million in milestone payments and$3.1 million of water and wastewater taps fees from the homebuilders over the same period. We believe we can fund such capital expenditures from cash and cash equivalents on hand, phased payments from our lot sales agreements, and payments from the Sky Ranch CAB for reimbursement
of
public improvements.
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Summary Cash Flows
Year Ended
(In thousands) August 31, 2022 August 31, 2021 $ Change % Change
Cash (used) provided by:
Operating activities $ 17,454 $ 3,456 $ 13,998 405 %
Investing activities (6,668) (2,896) (3,772) (130) %
Financing activities 3,992 87 3,905 4,489 %
Net Change in cash $ 14,778 $ 647 $ 14,131 2,184 %
Changes in Operating Activities - Operating activities include amounts we receive from the sale of wholesale water and wastewater services, costs incurred in the delivery of those services, the sale of lots, the costs incurred in completing and delivering finished lots, and G&A Expenses.
Cash provided by operations in fiscal 2022 increased substantially as compared to fiscal 2021, primarily related to the reimbursement of capitalized reimbursable costs and interest of$24.1 million in 2022 and cash collections from lot sales, partially offset by the timing differences on payments of payables and accrued liabilities, deferred revenue, and federal and state income taxes payable. The Sky Ranch CAB made payments to us totaling$24.1 million in fiscal 2022 from funds received in the second bond offering issued by the Sky Ranch CAB as well as excess funds from higher fees and property taxes collected by the Sky Ranch CAB. Changes in Investing Activities - Investing activities in fiscal 2022 consisted primarily of the investment in our land and water system of$5.5 million . Investing activities in fiscal 2021 consisted of the investment in our land and water system of$2.5 million , and the purchase of equipment of$0.4 million . We capitalize costs associated with obtaining, defending, enhancing, and developing our water rights. We capitalize costs incurred to construct infrastructure required to deliver water and wastewater services to our customers, and we capitalize costs to develop our land assets that are not sold to home builders.
Changes in Financing Activities - Financing activities in 2022 consisted of
proceeds from debt of
Critical Accounting Estimates
Our consolidated financial statements have been prepared in accordance with accounting principles generally accepted inthe United States . Our discussion and analysis of our financial condition and results of operations are based on these consolidated financial statements. The preparation of our consolidated financial statements requires the application of these accounting principles in addition to certain estimates and judgments based on current available information, engineering estimates, historical results, and other assumptions believed to be reasonable. These estimates, assumptions and judgments are affected by our application of accounting policies, which are discussed in Note 2 in the accompanying consolidated financial statements. Estimates are used for, but not limited to, determining the recoverability of notes receivable, measure of progress related to our land development activities, and accrued liabilities. Actual results could differ from these estimates. Accounting estimates are considered critical if both of the following conditions are met: (1) the nature of the estimates or assumptions is material because of the levels of subjectivity and judgment needed to account for matters that are highly uncertain and susceptible to change and (2) the effect of the estimates and assumptions is material to the financial statements. The following provides a summary of the two critical estimates we identified. Collectability of the Notes Receivable from the Sky Ranch CAB - The notes receivable from the Sky Ranch CAB are comprised of amounts we incurred and provided to the Sky Ranch CAB for costs related to the construction of public improvements which are reimbursable to us, along with related project management fees and accrued interest associated with those costs. Collectability of the notes is based on the Sky Ranch CAB generating sufficient cash flows to repay us prior to certain contractual dates, which is deemed probable based on a mill levy increase resulting from the remainder of Sky Ranch being in a different taxing district than Phase 1, higher than projected assessed values of completed homes, and additional houses from the start of the next development phase at Sky Ranch. The notes are reviewed for impairment whenever events or changes in circumstances indicate the carrying amount of the note may not be recoverable. Management applies judgment to assess whenever events or changes in circumstances indicate the carrying amount of the notes may not be recoverable giving rise to the requirement to conduct an impairment test. Circumstances
which could trigger an
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impairment test include, but are not limited to: significant decreases in the
market price of houses which generate tax payments to the Sky Ranch CAB;
significant adverse changes in the business climate or legal factors including
significant decreases in housing sales or assessments; significant increase in
costs and accumulation of costs significantly in excess of the amount originally
expected for the construction of the associated public improvements; and current
period cash flow or operating losses combined with a history of losses or a
forecast of losses. Recoverability of these notes is measured by comparing the
carrying value to the future cash flows expected to be generated by the Sky
Ranch CAB which can be used to repay us. When the carrying value of an asset
exceeds the related undiscounted cash flows, an impairment loss is recorded by
writing down the carrying value of the related asset to its estimated fair
value, which is determined using discounted future cash flows or other measures
of fair value.
Revenue recognition on lot sales under the percentage-of-completion method - We
recognize lot revenue over time as construction progresses for most of our lot
development contracts. This involves an estimation of the total project costs
which are incurred over several months or even years. This requires management
to estimate labor and material costs which could change materially over the life
of that construction project and have a material impact on the timing of revenue
recognition. Under the percentage of completion method, revenues and related
costs from lots sold pursuant to lot development contracts requiring milestone
payments as construction occurs are recognized over the course of the
construction period based on the completion progress of that project phase (i.e.
Phase 2A). In relation to each phase or subphase, revenue is determined by
calculating the ratio of incurred construction costs, including construction
costs related to public improvements subject to reimbursement, to total
estimated costs and applying that ratio to the contracted sales amounts. Current
period amounts are calculated based on the difference between the life-to-date
project totals and the previously recognized amounts. Cost of sales is the cost
incurred related to construction of lots. Any changes in significant judgments
and/or estimates used in determining construction and development revenue could
significantly change the timing or amount of construction and development
revenue recognized. Changes in estimated costs or losses, if any, are recognized
in the period in which they are determined.
Off-Balance Sheet Arrangements
None
Recently Adopted and Issued Accounting Pronouncements
See Note 2 to the accompanying consolidated financial statements for recently adopted and issued accounting pronouncements.
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