maybe4less

Skanjete, can you help me understand the accounting for plantation development? In the 2012 annual report, it looks like they are valuing all biological assets, including development-stage plantations, using a discounted cash flow analysis. This would seem to suggest they are not capitalizing maintenance costs for developing plantations. Although then they have a contradictory section in the accounting stating that they do capitalize these costs. Have you been unable to untangle this?

What are you getting for the earnings of the canola plant? If I annualize the expenses from Q1, I get $34.7M. But even at $90 crush margins, processing 365,000 tons of canola seed per year only gets you $32.85M in gross margin. Maybe there is a mistake in my calculations, but it seems unbelievable that they wouldn't be making money at such high crush margins. Are there large one-time expenses in Q1? I don't see anything obvious in the 10-q or press release to suggest that is the case.

Note that the Pico is not getting the cash from the IPO; UCP is keeping the majority of it. When I account for the cash, I calculate that the IPO price is really ~1.30x UCP's book value, not >2.0x.

Dazel, Do you have a link to what crush margins are currently at? ICE appears to only quote it using soybean oil and soybean meal prices. I'm having trouble finding what actual canola crush margins are, let alone up-to-date canola oil and canola meal prices. Thanks

I'm planning on going.