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LOWER ARKANSAS WATER MANAGEMENT ASSOCIATION <br />Financial Report for the Annual Meeting <br />November 17, 2011 <br />Your Association owns water rights assets that are appreciating in value every year. While we have <br />spent over eleven million dollars to acquire these assets over the past seventeen years, they are <br />worth considerably more today. The Association has long -term liabilities of $ 9.45 million, which is <br />approximately $ 461 per share. <br />Projected total income and funds available for 2011 total $ 1,218,892. Projected expenses for the <br />year are $ 974,099. This figure includes $ 490,948 for loan payments, $ 232,059 for legal and <br />engineering expenses, $ 113,859 for supplemental water and water assessments, $27,000 for <br />outside well testing and $ 110,233 for regular operations. <br />The Association was able to purchase over 2500 acre -feet of supplemental water this year to <br />provide additional pumping to those members that desired to lease additional shares. We continue <br />to monitor new change cases on the river, to negotiate with the opposers in our new cases, pursue <br />revegetation of dry-up lands, investigate additional replacement water, remain in compliance with <br />changing rules, and refine the replacement plans. A great deal of additional effort will be required <br />to protect our water rights in the various cases that we must monitor in future years. <br />The Board of Directors recommends that the assessment for 2012 be set at $32.00 per common <br />share ($73.60 per preferred share), which is a three dollar increase from last year. Assuming that <br />the stockholders approve the Board of Directors recommendation for assessment at $ 32.00 per <br />share, we expect to have 2012 assessment income and carryover funds of approximately <br />$1,101,736 total. Budgeted expenditures for 2012 are projected at approximately $ 855,683. This <br />would leave a balance in our reserve fund of $ 246,053 to start the next year. <br />The proposed expenditures for 2012 are depicted in the chart below <br />LAWMA Proposed Expenditures 2012 <br />- -- ❑ $111,735 - -i <br />0 $100,00 <br />❑ $490,948 -__� -❑ $80,000 <br />-- — ❑ $46,000 <br />� $27,000 <br />Do pe ratio ns <br />■engineering <br />legal <br />13su pplem a ntal water <br />=well testing <br />oloan payments <br />