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<br />Wyoming Real Estate -This propertywas acquired in 2001 for $25.0,000 plus retriodel <br />costs in 2001 of $83,782. Additional improvement costs in 2002 of $92,374 brought the .total <br />,, cost of the property to $426,156. Because of the close proximity to the 2003 valuation date,..we <br />used the cost in the property of $426,156 as the estimated value for the 2003 valuation. The <br />appraised value at March 31, 2007 as determined by Christopher. Brown, MAI was-$615,000. <br />We used this value for the October 31, 2006 value- <br />Timnath Real Estate -This property was acquired in 1992 for $885,000. The property <br />was appraised as of June 19, 2007 at $400,000 by Foster Valuation Company, LLC. The <br />property declined in value a total of $445,000 from 1992 to 2007, primarily due to gravel mined <br />from the state during that period. We have the task of allocating this reduction in value to the <br />years between the acquisition date and the final valuation date in order to estimate the value of <br />the property at each interim valuation date. We have spread the decline in value of $445,000 <br />evenly over the 14 yeaz period for purposes of estimating property values, which results in a <br />reduction in value of $34,600 each year. The Timnath real estate carries with it a substantial <br />future cost for reestablishing and maintaining wetlands. The Foster Valuation report estimates <br />costs to complete required wetlands at the site at $2 million. This cost has been factored into the <br />appraised value of the site. <br />The estimated values of the Timnath property and the Wyoming property on each valuation date <br />are shown at Appendix 7. <br />Construction Equipment and' Vehicles -The equipment and vehicles were appraised. by <br />Ritchie Brothers Auctioneers as of February 26, 2007. The appraised value was $10,501,000. In <br />order to apply the asset approach to the valuation dates prior to 2006, we must estimate <br />equipment values for those earlier dates. In order to do this, we used three methods to. estimate <br />equipment values. <br />First, we divided the February 2007 appraised value of the equipment by the most recent <br />fiscal year's sales. The resulting percentage of 80% was then multiplied by the sales for each <br />vahuation date. This method assumes that a given level of sales requires an investment in <br />equipment commensurate with the level of sales. <br />The second method was to divide the .appraised value of the equipment into the cost of <br />the equipment as stated on the balance sheet.. The resulting percentage of 44% was multiplied by <br />the cost of the equipment on the subject company's balance sheet on each valuation date. This. <br />method assumes that the relationship between cost and appraised value have a reasonably <br />constant relationship. <br />The third method was to use the Replacement Cost less Normal Depreciation which is the <br />method used to value equipment for personal property tax assessments in Colorado. For this <br />method we relied on the report dated May 14, 2007 prepazed by-Lloyd St. Croix, CPA in which <br />he applied the replacement cost and per cent good from the Colorado Property Tax <br />administrator's office to the cost of the equipment acquired. each year. by the Company. <br />~R Disn <br />Page 13 S~l~~e <br />