UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(X) QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)

OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended ~~January~~April 3130, 2013

( ) TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)

OF THE SECURITIES EXCHANGE ACT OF 1934

Commission File No.: Blue Ridge 0000-~~28-44~~02844

Big Boulder 0000-~~28-43~~02843

BLUE RIDGE REAL ESTATE COMPANY

BIG BOULDER CORPORATION

(exact name of Registrants as specified in their charters)

State or other jurisdiction of incorporation or organization: Pennsylvania

I.R.S. Employer Identification Number: 24-0854342 (Blue Ridge)

24-0822326 (Big Boulder)

Address of principal executive office: Route 940 and Moseywood Rd, Blakeslee, Pennsylvania

Zip Code: 18610

Registrants’ telephone number, including area code: (570) 443-8433

Indicate by check mark whether the registrants (1) have filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such period that the registrants were required to file such reports) and (2) have been subject to such filing requirements for the past 90 days.

x YES o NO

Indicate by check mark whether the registrants have submitted electronically and posted on their corporate Web sites, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrants were required to submit and post such files).

x YES o NO

Indicate by check mark whether the registrants are large accelerated filers, accelerated filers, non-accelerated filers or smaller reporting companies. See definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.

Large Accelerated filer o

Accelerated Filer o

Non-Accelerated filer x (Do not check if smaller reporting company)

Smaller reporting company o

Indicate by check mark whether the registrants are shell companies (as defined in Rule 12b-2 of the Exchange Act).

o YES ~~x NO~~ xNO

The number of shares of the registrants’ common stock outstanding as of the close of business on ~~March~~June 1513, 2013 was 2,450,424 shares.*

*Under a Security Combination Agreement between Blue Ridge Real Estate Company ("Blue Ridge") and Big Boulder Corporation ("Big Boulder") (together, the "Companies") and under the by-laws of the Companies, shares of the Companies are combined in unit certificates, each certificate representing the same number of shares of each of the Companies. Shares of each Company may be transferred only together with an equal number of shares of the other Company. For this reason, a combined Blue Ridge/Big Boulder Form 10-Q is being filed. Except as otherwise indicated in this Quarterly Report on Form 10-Q, all information applies to both Companies.

INDEX

Page No.

PART I - FINANCIAL INFORMATION

Item 1. Financial Statements

Combined Balance Sheets –

~~January~~April 3130, 2013 (Unaudited) and October 31, 2012

Combined Statements of Operations (Unaudited) –

Three and Six Months ended ~~January~~April 3130, 2013 and 2012

Combined Statements of Comprehensive Loss (Unaudited) –

~~Three~~Six Months ended ~~January~~April 3130, 2013 and 2012

Combined Statement of Changes in Shareholders’ Equity (Unaudited) –

~~Three~~Six months ended ~~January~~April 3130, 2013

Combined Statements of Cash Flows (Unaudited) –

~~Three~~Six Months Ended ~~January~~April 3130, 2013 and 2012

Notes to Combined Financial Statements (Unaudited)

Item 2. Management's Discussion and Analysis of Financial Condition

and Results of Operations

1516

Item 3. Quantitative and Qualitative Disclosures About Market Risk

2123

Item 4. Controls and Procedures

2124

PART II - OTHER INFORMATION

Item 1. Legal Proceedings

2224

Item 1A. Risk Factors

2224

Item 4. Mine Safety Disclosures

2224

Item 6. Exhibits

2324

PART I – FINANCIAL INFORMATION

Item 1. FINANCIAL STATEMENTS

BLUE RIDGE REAL ESTATE COMPANY and SUBSIDIARIES

BIG BOULDER CORPORATION and SUBSIDIARIES

COMBINED BALANCE SHEETS


COMBINED BALANCE SHEETS
	(UNAUDITED)
ASSETS	04/30/13	10/31/12
Land and land development costs (1,433 and 3,012 acres per land ledger, respectively)	$15,904,071	$20,352,066
Land improvements, buildings and equipment, net	19,859,880	21,043,068
Land held for investment, (8,289 and 10,404 acres per land ledger, respectively)	6,399,468	6,848,390
Long-lived assets held for sale (4,068 and 377 acres per land ledger, respectively)	1,660,757	846,174
Cash and cash equivalents	376,073	497,409
Cash held in escrow	142,903	205,493
Prepaid expenses and other assets	275,286	468,828
Accumulated deferred tax asset	1,321,367	0
Accounts receivable and mortgages receivable	120,319	143,382
Assets of discontinued operations (1 acre per land ledger)	166,682	166,682
Total assets	$46,226,806	$50,571,492

LIABILITIES AND SHAREHOLDERS’ EQUITY
LIABILITIES:
Debt	$16,775,403	$16,880,416
Accounts payable	217,919	140,956
Accrued liabilities	223,586	311,097
Deferred income	301,889	695,981
Accumulated deferred income taxes	0	481,633
Accrued pension expense	4,387,612	4,240,964
Total liabilities	21,906,409	22,751,047

COMBINED SHAREHOLDERS’ EQUITY:
Capital stock, without par value, stated value $0.30 per combined share, Blue Ridge and Big Boulder each authorized 3,000,000 shares, each issued 2,732,442 shares	819,731	819,731
Capital in excess of stated value	19,829,475	19,829,475
Earnings retained in the business	8,703,777	12,203,825
Accumulated other comprehensive loss, defined benefit pension plan	(2,947,179)	(2,947,179)
Shareholders’ equity before capital stock in treasury	26,405,804	29,905,852
Less cost of 282,018 shares of capital stock in treasury	2,085,407	2,085,407
Total shareholders’ equity	24,320,397	27,820,445
Total liabilities and shareholders’ equity	$46,226,806	$50,571,492

	(UNAUDITED)
ASSETS	01/31/13	10/31/12
Land and land development costs (3,011 and 3,012 acres per land ledger)	$20,325,604	$20,352,066
Land improvements, buildings and equipment, net	20,271,488	21,043,068
Land held for investment (10,404 acres per land ledger)	6,848,390	6,848,390
Long-lived assets held for sale (377 acres per land ledger)	494,323	846,174
Cash and cash equivalents	419,353	497,409
Cash held in escrow	179,558	205,493
Prepaid expenses and other assets	271,592	468,828
Accounts receivable and mortgages receivable	106,238	143,382
Assets of discontinued operations (1 acre per land ledger)	166,682	166,682
Total assets	$49,083,228	$50,571,492
LIABILITIES AND SHAREHOLDERS’ EQUITY
LIABILITIES:
Debt	$16,709,235	$16,880,416
Accounts payable	219,679	140,956
Accrued liabilities	205,388	311,097
Deferred income	148,644	695,981
Accumulated deferred income taxes	188,633	481,633
Accrued pension expense	4,360,788	4,240,964
Total liabilities	21,832,367	22,751,047
COMBINED SHAREHOLDERS’ EQUITY:
Capital stock, without par value, stated value $0.30 per combined share, Blue Ridge and Big Boulder each authorized 3,000,000 shares, each issued 2,732,442 shares	819,731	819,731
Capital in excess of stated value	19,829,475	19,829,475
Earnings retained in the business	11,634,241	12,203,825
Accumulated other comprehensive loss, defined benefit pension plan	(2,947,179)	(2,947,179)
Shareholders’ equity before capital stock in treasury	29,336,268	29,905,852
Less cost of 282,018 shares of capital stock in treasury	2,085,407	2,085,407
Total shareholders’ equity	27,250,861	27,820,445
Total liabilities and shareholders’ equity	$49,083,228	$50,571,492

See accompanying notes to unaudited combined financial statements.

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BLUE RIDGE REAL ESTATE COMPANY and SUBSIDIARIES

BIG BOULDER CORPORATION and SUBSIDIARIES

COMBINED STATEMENTS OF OPERATIONS


COMBINED STATEMENTS OF OPERATIONS FOR THE THREE AND SIX MONTHS ENDED APRIL 30, 2013 and 2012
(UNAUDITED)	Three Months Ended		Six Months Ended
	04/30/13	04/30/12	04/30/13	04/30/12
Revenues:
Real estate management revenue	$241,854	$247,491	$470,915	$454,534
Land resource management revenue	298,195	1,037,506	752,869	1,990,091
Rental income revenue	451,090	450,121	888,015	898,343
Total revenues	991,139	1,735,118	2,111,799	3,342,968
Costs and expenses:
Real estate management costs	244,730	233,736	521,795	509,314
Land resource management costs	4,258,009	1,306,234	4,967,624	2,318,383
Rental income costs	216,853	239,316	441,947	471,723
General and administrative expense	462,125	434,619	975,322	969,088
Gain on sale of assets	(3,100)	0	(3,100)	0
Total costs and expenses	5,178,617	2,213,905	6,903,588	4,268,508
Operating loss from continuing operations	(4,187,478)	(478,787)	(4,791,789)	(925,540)

Other income and expense:
Interest and other income	57	203	2,286	2,941
Interest expense	(255,468)	(274,919)	(515,966)	(599,210)
Total other income and expense	(255,411)	(274,716)	(513,680)	(596,269)

Loss from continuing operations before income taxes	(4,442,889)	(753,503)	(5,305,469)	(1,521,809)

Credit for income taxes	(1,511,000)	(255,000)	(1,804,000)	(517,000)

Net loss before discontinued operations	(2,931,889)	(498,503)	(3,501,469)	(1,004,809)

Discontinued operations (including $82 gain on disposals in 2012)	2,425	(7,916)	2,421	(3,039)

(Credit) provision for income taxes on discontinued operations	1,000	(3,000)	1,000	(1,000)

Net income (loss) from discontinued operations	1,425	(4,916)	1,421	(2,039)

Net loss	($2,930,464)	($503,419)	($3,500,048)	($1,006,848)

Earnings (loss) per combined share:
Net loss before discontinued operations	($1.20)	($0.20)	($1.43)	($0.41)
Income (loss) from discontinued operations, net of tax	0.00	0.00	0.00	0.00
Basic loss per weighted average combined share	($1.20)	($0.20)	($1.43)	($0.41)

FOR THE THREE MONTHS ENDED JANUARY 31, 2013 and 2012
(UNAUDITED)
	2013	2012
Revenues:
Real estate management revenue	$229,061	$207,043
Land resource management revenue	454,674	952,585
Rental income revenue	436,925	448,222
Total revenues	1,120,660	1,607,850
Costs and expenses:
Real estate management costs	277,065	275,578
Land resource management costs	709,615	1,012,149
Rental income costs	225,094	232,407
General and administrative expense	513,197	534,469
Total costs and expenses	1,724,971	2,054,603
Operating loss from continuing operations	(604,311)	(446,753)
Other income and expense:
Interest and other income	2,229	2,738
Interest expense	(260,498)	(324,291)
Total other income and expense	(258,269)	(321,553)
Loss from continuing operations before income taxes	(862,580)	(768,306)
Credit for income taxes	(293,000)	(262,000)
Net loss before discontinued operations	(569,580)	(506,306)
Discontinued operations (including $82 gain on disposals in 2012)	(4)	4,877
Provision for income taxes on discontinued operations	0	2,000
Net (loss) income from discontinued operations	(4)	2,877
Net loss	($569,584)	($503,429)
Loss per combined share:
Net loss before discontinued operations	($0.23)	($0.21)
Income (loss) from discontinued operations, net of tax	($0.00)	$0.00
Basic loss per weighted average combined share	($0.23)	($0.21)

See accompanying notes to unaudited combined financial statements.

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BLUE RIDGE REAL ESTATE COMPANY and SUBSIDIARIES

BIG BOULDER CORPORATION and SUBSIDIARIES

COMBINED STATEMENTS OF COMPREHENSIVE LOSS


COMBINED STATEMENTS OF COMPREHENSIVE LOSS FOR THE SIX MONTHS ENDED APRIL 30, 2013 and 2012 (UNAUDITED)
	2013	2012

Net loss	($3,500,048)	($1,006,848)

Other comprehensive loss, net of tax
Defined benefit pension
Deferred actuarial loss, net of deferred tax expense	0	0

Other comprehensive loss	0	0

Total comprehensive loss	($3,500,048)	($1,006,848)

FOR THE THREE MONTHS ENDED JANUARY 31, 2013 and 2012

(UNAUDITED)

	2013	2012
Net loss	($569,584)	($503,429)
Other comprehensive loss, net of tax
Defined benefit pension
Deferred actuarial loss, net of deferred tax expense	0	0
Other comprehensive loss	0	0
Total comprehensive loss	($569,584)	($503,429)

See accompanying notes to unaudited combined financial statements.

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BLUE RIDGE REAL ESTATE COMPANY and SUBSIDIARIES

BIG BOULDER CORPORATION and SUBSIDIARIES

COMBINED STATEMENT OF CHANGES IN SHAREHOLDERS' EQUITY


COMBINED STATEMENT OF CHANGES IN SHAREHOLDERS' EQUITYFOR THE SIX MONTHS ENDED APRIL 30, 2013(UNAUDITED)
	Capital Stock (1)		Capital inExcess of	EarningsRetained in	AccumulatedOtherComprehensive	CapitalStock in
	Shares	Amount	Stated Par	the Business	Loss	Treasury (2)	Total
Balance, October 31, 2012	2,732,442	$819,731	$19,829,475	$12,203,825	($2,947,179)	($2,085,407)	$27,820,445

Net loss				(3,500,048)			(3,500,048)

Balance, April 30, 2013	2,732,442	$819,731	$19,829,475	$8,703,777	($2,947,179)	($2,085,407)	24,320,397

FOR THE THREE MONTHS ENDED JANUARY 31, 2013

(UNAUDITED)

	Capital Stock (1)		Capital in Excess of	Earnings Retained in	Accumulated Other Comprehensive	Capital Stock in
	Shares	Amount	Stated Par	the Business	Loss	Treasury (2)	Total
Balance, October 31, 2012	2,732,442	$819,731	$19,829,475	$12,203,825	($2,947,179)	($2,085,407)	$27,820,445
Net loss				(569,584)			(569,584)
Balance, January 31, 2013	2,732,442	$819,731	$19,829,475	$11,634,241	($2,947,179)	($2,085,407)	$ 27,250,861

(1) Capital stock, at stated value of $0.30 per combined share

(2) 282,018 combined shares held in treasury, at cost

See accompanying notes to unaudited combined financial statements.

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BLUE RIDGE REAL ESTATE COMPANY and SUBSIDIARIES

BIG BOULDER CORPORATION and SUBSIDIARIES

COMBINED STATEMENTS OF CASH FLOWS

COMBINED STATEMENTS OF CASH FLOWS

FOR THE SIX MONTHS ENDED APRIL 30, 2013 and 2012 (UNAUDITED)

Six Months Ended

04/30/13

04/30/12

  Cash Flows Provided By (Used In) Operating Activities:

      Net loss

($3,500,048)

($1,006,848)

      Adjustments to reconcile net loss to net cash provided by (used in) operating activities:

          Depreciation and amortization

581,522

629,669

          Impairment

3,700,000

70,700

          Deferred income taxes

(1,803,000)

(518,000)

          Gain on sale of assets

(3,100)

(9,402)

          Changes in operating assets and liabilities:

                    Cash held in escrow

62,590

(99,720)

                    Accounts receivable and mortgages receivable

23,063

(333,744)

                    Prepaid expenses and other current assets

193,542

1,147,169

                    Land and land development costs

(9,630)

31,085

                    Long-lived assets held for sale

612,851

1,196,872

                    Accounts payable and accrued liabilities

136,100

(567,579)

                    Deferred income

121,539

144,366

       Net cash provided by operating activities

115,429

684,568

  Cash Flows Provided By (Used In) Investing Activities:

       Proceeds from disposition of assets

3,100

2,287,187

       Additions to properties

(134,852)

(58,199)

       Payments received under direct financing lease arrangements

0

7,788,195

       Net cash provided by (used in) investing activities

(131,752)

10,017,183

  Cash Flows Provided By (Used In) Financing Activities:

       Proceeds from debt

1,202,761

1,782,909

       Payment of debt

(1,307,774)

(12,600,587)

       Net cash used in financing activities

(105,013)

(10,817,678)

  Net decrease in cash and cash equivalents

(121,336)

(115,927)

  Cash and cash equivalents, beginning of period

497,409

377,158

  Cash and cash equivalents, end of period

$376,073

$261,231

FOR THE THREE MONTHS ENDED
JANUARY 31, 2013 and 2012
(UNAUDITED) 01/31/13 01/31/12
Cash Flows Provided By (Used In) Operating Activities:
Net loss ($569,584) ($503,429)
Adjustments to reconcile net loss to net cash provided by (used in) operating activities:
Depreciation and amortization 291,211 318,342
Deferred income taxes (293,000) (260,000)
Gain on sale of assets 0 (9,402)
Changes in operating assets and liabilities:
Cash held in escrow 25,935 (150,711)
Accounts receivable and mortgages receivable 37,144 (257,283)
Prepaid expenses and other current assets 197,236 1,112,135
Land and land development costs (3,932) (5,414)
Long-lived assets held for sale 382,245 592,098
Accounts payable and accrued liabilities 92,838 (560,980)
Deferred revenue (31,706) (10,055)
Net cash provided by operating activities 128,387 265,301
Cash Flows Provided By (Used In) Investing Activities:
Proceeds from disposition of assets 0 2,095,552
Additions to properties (35,262) (44,318)
Payments received under direct financing lease arrangements 0 7,788,195
Net cash (used in) provided by investing activities (35,262) 9,839,429
Cash Flows Provided By (Used In) Financing Activities:
Proceeds from debt 539,789 1,153,497
Payment of debt (710,970) (11,275,310)
Net cash used in financing activities (171,181) (10,121,813)
Net decrease in cash and cash equivalents (78,056) (17,083)
Cash and cash equivalents, beginning of period 497,409 377,158
Cash and cash equivalents, end of period $419,353 $360,075
See accompanying notes to unaudited combined financial statements.

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NOTES TO UNAUDITED COMBINED FINANCIAL STATEMENTS

1. Basis of Combination

The accompanying unaudited combined financial statements include the accounts of Blue Ridge Real Estate Company and its wholly-owned subsidiaries (Northeast Land Company, Jack Frost Mountain Company, Boulder Creek Resort Company, Moseywood Construction Company, Jack Frost National Golf Course, Inc., Blue Ridge Acquisition Company, BRRE Holdings, Inc., Coursey Commons Shopping Center, LLC, Coursey Creek, LLC, Cobble Creek, LLC, Flower Fields Motel, LLC, Blue Ridge WNJ, LLC and Blue Ridge WMN, LLC) (collectively “Blue Ridge”) and Big Boulder Corporation and its wholly-owned subsidiaries (Lake Mountain Company and BBC Holdings, Inc.) (collectively “Big Boulder” and, together with Blue Ridge, the “Companies”).

The combined balance sheet as of October 31, 2012, which has been derived from audited financial statements, and the combined financial statements as of and for the three and six month periods ended ~~January~~April 3130, 2013 and 2012, which are unaudited, are presented pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”). Accordingly, these combined financial statements should be read in conjunction with the combined financial statements and notes thereto contained in the Companies’ 2012 Annual Report on Form 10-K. In the opinion of management, the accompanying combined financial statements reflect all adjustments (which are of a normal recurring nature) necessary for a fair statement of the results for the interim periods. All significant intercompany accounts and transactions are eliminated.

Due to intermittent revenues from land resource management, the results of operations for any interim period are not necessarily indicative of the results expected for the full fiscal year.

2. Significant Accounting Policies

Use of estimates and assumptions:

The preparation of financial statements and related disclosures in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. For example, unexpected changes in market conditions or a continued or further downturn in the economy could adversely affect actual results. Estimates are used in accounting for, among other things, land development costs, asset fair value calculations, accounts and mortgages receivables, legal liability, insurance liability, depreciation, employee benefits, taxes, and contingencies. Estimates and assumptions are reviewed periodically and the effects of revisions are reflected in the combined financial statements in the period in which the revisions are made.

Management believes that its accounting policies regarding revenue recognition, land development costs, long lived assets, deferred income and income taxes among others, affect its more significant judgments and estimates used in the preparation of its combined financial statements. For a description of these critical accounting policies and estimates, see “Management’s Discussion and Analysis of Financial Condition and Results of Operations”. There were no significant changes in the Companies’ critical accounting policies or estimates since the Companies’ fiscal year ended October 31, 2012 (“Fiscal 2012”). Material subsequent events are evaluated and disclosed through the issuance date of this Quarterly Report on Form 10-Q.

Cash held in escrow:

Cash held in escrow consists of deposits held by the Companies for interest payments on lines of credit, golf course memberships and real estate transactions and other funds placed into escrow with a third party intermediary for the purpose of a tax deferred exchange under section 1031 of the Internal Revenue Code of 1986, as amended (the “IRC”).

Discontinued operations:

A component of the Companies is classified as a discontinued operation when (i) the operations and cash flows of the component of the Companies can be clearly distinguished and have been or will be eliminated from our ongoing operations; (ii) the component has either been disposed of or is classified as held for sale; and (iii) we will not have any significant continuing involvement in the operations of the component of the Companies after the disposal transactions. Significant judgments are involved in determining whether a component meets the criteria for discontinued operations reporting and the period in which these criteria are met.

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we will not have any significant continuing involvement in the operations of the component of the Companies after the disposal transactions. Significant judgments are involved in determining whether a component meets the criteria for discontinued operations reporting and the period in which these criteria are met.

If a component of the Companies is reported as a discontinued operation, the results of operations through the date of sale, including any gain or loss recognized on the disposition, are presented on a separate line of the statement of operations.

Reclassification

The Companies report the results of discontinued operations as a separate component of income on the combined statements of operations under the caption discontinued operations. As previously disclosed, this reporting presentation resulted in certain reclassifications of the 2012 financial statement amounts. Accordingly, certain amounts in the Fiscal 2012 combined financial statements have been reclassified to conform to the reclassified presentation.

New Accounting Pronouncements:

In January 2010, the FASB issued ASU No. 2010-06, “Fair Value Measurements and Disclosures (“Topic 820”): Improving Disclosures about Fair Value Measurements” (“ASU 2010-06”). ASU 2010-06 requires certain new disclosures and clarifies some existing disclosure requirements regarding fair value measurement as set forth in Accounting Standards Codification (“ASC”) Subtopic 820-10. ASU 2010-06 amends ASC Subtopic 820-10 to now require that (1) a reporting entity disclose separately the amounts of significant transfers in and out of Level 1 and Level 2 fair value measurements and describe the reasons for the transfers; (2) in the reconciliation for fair value measurements using significant unobservable inputs, a reporting entity present separately information about purchases, sales, issuances, and settlements, and (3) a reporting entity provide disclosures about the valuation techniques and inputs used to measure fair value for both recurring and nonrecurring fair value measurements. ASU 2010-06 is effective for interim and annual reporting periods beginning after December 15, 2009, except for the disclosures about purchases, sales, issuances, and settlements in the roll forward of activity in Level 3 fair value measurements. Those disclosures are effective for fiscal years beginning after December 15, 2010, and for interim periods within those fiscal years. The adoption of ASU No. 2010-06 did not have a material impact on the Companies’ combined financial statements.

In May 2011, the FASB issued Accounting Standards Update No. 2011-04, “Fair Value Measurement (Topic 820): Amendments to Achieve Common Fair Value Measurement and Disclosure Requirements in U.S. GAAP and IFRS”, which clarifies several aspects of the guidance in ASU No. 2010-06 “Fair Value Measurements and Disclosures”. ASU 2011-04 is effective for interim and annual reporting periods beginning after December 15, 2011. The adoption of ASU No. 2011-04 did not have a material impact on the Companies combined financial statements.

In June 2011, the FASB issued Accounting Standards Update No. 2011-05, “Statement of Comprehensive Income” (“ASU 2011-05”), which requires entities to present net income and other comprehensive income in either a single continuous statement or in two separate, but consecutive, statements of net income and other comprehensive income. ASU 2011-05 was effective for the Companies’ fiscal year beginning November 1, 2012. In December 2011, the FASB issued Accounting Standards Update No. 2011-12 (ASU 2011-12) which is a deferral of the effective date for the amendments to the presentation of reclassifications of items out of accumulated other comprehensive income in Accounting Standards Update No. 2011-05 effective for fiscal years and interim periods within those years beginning after December 1, 2011. The adoption of this guidance, which relates to presentation only, did not have a material impact on the Companies’ combined financial statements.

In February 2013, the FASB issued ASU No. 2013-02, “Reporting of Amounts Reclassified Out of Accumulated Other Comprehensive Income” (ASU 2013-02), requires entities to provide information about the amounts reclassified out of accumulated other comprehensive income by component. In addition, an entity is required to present significant amounts reclassified out of accumulated other comprehensive income by the respective line items of net income, but only if the amount reclassified is required under U.S. GAAP to be reclassified to net income in its entirety in the same reporting period. For other amounts an entity is required to cross reference to other disclosures required under U.S. GAAP that provide additional details about these amounts. ASU 2013-02 is effective for fiscal years beginning after December 15, 2012.

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3. Discontinued operations

On November 30, 2011, the Jack in the Box located in Wallisville, Texas was sold and as a result the operating activity for the three and six months ended ~~January~~April 3130, 2012 is being reported as a discontinued operation. The operating results of Jack in the Box were previously reported in the Rental Operations of the combined statements of operations. At October 31, 2012, there were no remaining assets or liabilities related to Jack in the Box.

On December 15, 2011, the Jack Frost Mountain and Big Boulder ski areas were sold and as a result the operating activity for the three months ended January 31, 2012 is being reported as a discontinued operation. The operating results of the ski areas were previously reported in the Rental Operations of the combined statements of operations. At October 31, 2012, there were no remaining assets or liabilities related to the Jack Frost Mountain and Big Boulder ski areas.7

On ~~September~~December 1715, ~~2012~~2011, the ~~Companies~~Jack ~~signed~~Frost anMountain ~~agreement~~and ofBig ~~sale~~Boulder ~~regarding~~ski ~~Lot~~areas 5were ~~Maple~~sold ~~Terrace~~and ~~located~~as ina ~~Saylorsburg,~~result ~~PA. A~~the ~~deposit~~operating ~~was~~activity ~~received~~for ~~and~~ the ~~transaction~~three isand ~~expected~~six tomonths ~~close~~ended ~~October~~April 130, ~~2013. As~~2012 is being reported as a ~~result~~discontinued operation. The operating ~~activity~~results ~~for~~of the ~~property~~ski isareas ~~being~~were previously reported asin ~~discontinued operations for~~ the ~~three~~Rental ~~months~~Operations ~~periods~~of ~~ending~~the ~~January~~combined ~~31,~~statements ~~2013~~of ~~and 2012~~operations. At ~~January 31, 2013 and~~ October 31, 2012, there were no remaining assets or liabilities related to the ~~Maple~~Jack ~~Terrace~~Frost ~~property~~Mountain ~~totaling $166,682 included in assets of discontinued operations~~ and ~~there~~Big ~~were~~Boulder noski ~~liabilities~~areas.

~~The~~On ~~combined~~September ~~assets~~17, ~~and~~2012, ~~liabilities~~the asCompanies signed an agreement of ~~January~~sale ~~31,~~regarding ~~2013~~Lot ~~and~~5 ~~October~~Maple ~~31,~~Terrace ~~2012~~located in Saylorsburg, PA. A deposit was received and the ~~results~~transaction ofis ~~operations~~expected ofto ~~the~~close ~~properties~~October 1, ~~including~~2013. As ~~interest~~a ~~expense~~result ~~incurred,~~operating ~~classified~~activity for the property is being reported as discontinued operations infor the three ~~months~~and six month periods ending ~~January~~April 3130, 2013 and 2012. At April 30, ~~are~~2013 ~~summarized~~and asOctober ~~follows:~~31, 2012, there were assets related to the Maple Terrace property totaling $166,682 included in assets of discontinued operations and there were no liabilities.

BALANCE SHEET	1/31/13	10/31/12
ASSETS
Land improvements, buildings & equipment, net	$124,790	$124,790
Land held for investment, principally unimproved	42,892	41,892
Total assets of discontinued operations	$166,682	$166,682

The combined assets included in discontinued operations as of April 30, 2013 and October 31, 2012 are summarized as follows:

STATEMENT OF OPERATIONS	1/31/13	1/31/12
BALANCE SHEET	4/30/13	10/31/12
Revenues:
ASSETS
Jack in the Box	$0	$10,971
Land improvements, buildings & equipment, net	$124,790	$124,790
Jack Frost Mountain Ski Area	0	5,097
Land held for investment, principally unimproved	41,892	41,892
Big Boulder Ski Area	0	5,097
Total assets of discontinued operations	$166,682	$166,682
Maple Terrace	3,750	5,750
Total Revenue	3,750	26,915
Expenses (excluding interest):
Jack in the Box	0	136
Jack Frost Mountain Ski Area	0	0
Big Boulder Ski Area	0	303
Maple Terrace	3,754	14,295
Total Expenses	3,754	14,734
Interest expense(calculated on debt related to the property):
Jack in the Box	0	7,386
Jack Frost Mountain Ski Area	0	0
Big Boulder Ski Area	0	0
Maple Terrace	0	0
Total Interest	0	7,386
Gain (Loss) on Disposal:
Jack in the Box	0	9,402
Jack Frost Mountain Ski Area	0	(4,803)
Big Boulder Ski Area	0	(4,517)
Maple Terrace	0	0
Total Gain on Disposal	0	82
Income (loss) from discontinued operations before income taxes	($4)	$4,877

- Operating 8results, -including interest expense incurred, of the discontinued operations in three and six months ending April 30, 2013 and 2012 are as follows:


	Three months ended		Six months ended
	4/30/13	4/30/12	4/30/13	4/30/12
Revenues:
Jack in the Box	$0	$0	$0	$10,971
Jack Frost Mountain Ski Area	0	0	0	5,097
Big Boulder Ski Area	0	0	0	5,097
Maple Terrace	3,750	0	7,500	5,750
Total Revenue	3,750	0	7,500	26,915

Expenses (excluding interest):
Jack in the Box	0	0	0	136
Jack Frost Mountain Ski Area	0	7,730	0	7,730
Big Boulder Ski Area	0	186	0	489
Maple Terrace	1,325	0	5,079	14,295
Total Expenses	1,325	7,916	5,079	22,650

Interest expense(calculated on debt related to the property):
Jack in the Box	0	0	0	7,386
Jack Frost Mountain Ski Area	0	0	0	0
Big Boulder Ski Area	0	0	0	0
Maple Terrace	0	0	0	0
Total Interest	0	0	0	7,386

Gain (Loss) on Disposal:
Jack in the Box	0	0	0	9,402
Jack Frost Mountain Ski Area	0	0	0	(4,803)
Big Boulder Ski Area	0	0	0	(4,517)
Maple Terrace	0	0	0	0
Total Gain on Disposal	0	0	0	82

Income (loss) from discontinued operations before income taxes	$2,425	($7,916)	$2,421	($3,039)

4. Segment Reporting

The Companies currently operate in two business segments, which consist of Real Estate Management / Rental Operations and Land Resource Management.

5. Income Taxes

The benefit for income taxes for the three and six months ended ~~January~~April 3130, 2013 and 2012 is estimated using the estimated annual effective tax rate for the fiscal years ending October 31, 2013 and 2012. The effective income tax rate for the first ~~three~~six months of the Companies’ fiscal year ending October 31, 2013 (such fiscal year “Fiscal 2013”) and Fiscal 2012 was estimated at 34%.

The Companies’ practice is to recognize interest and/or penalties related to income tax matters as income tax expense in its combined financial statements. As of and for the ~~three~~six months ended ~~January~~April 3130, 2013, no interest and penalties have been accrued in the combined balance sheet and no expense is reflected in the combined statement of operations. At ~~January~~April 3130, 2013, federal and state tax returns for fiscal years ending October 31, 2009 and later are subject to future examination by the respective tax authorities.

6. Land and Land Development Costs

Land and improvements in progress held for development consist of the following:

	01/31/2013	10/31/2012
	04/30/2013	10/31/2012
Land unimproved designated for development	$109,~~563~~635,~~084~~834	$10,593,519
Residential development	5,084,~~262~~521	5,084,262
Infrastructure development	41,~~678~~183,~~258~~716	4,674,285
	$20,325,604	$20,352,066
	$15,904,071	$20,352,066

The decrease in land unimproved designated for development was the result of the reclassification of ~~Lot~~1,577 4acres inof ~~Saylorsburg~~raw land on River Road, Buck Township Pennsylvania to an asset held for sale. The ~~increase~~decrease in infrastructure development was related to an impairment expense taken against the ~~Big~~remaining ~~Boulder~~126 ~~wastewater~~units ~~facility~~of ~~and~~the ~~Lakeshore~~Boulder ~~development~~Lake ~~projects~~Village condominium project.

7. Land Held for Investment

	01/31/2013	10/31/2012
	04/30/2013	10/31/2012
Land held for investment
Land – Unimproved	$21,~~245~~796,~~214~~292	$2,245,214
Land – Commercial rental properties	4,603,176	4,603,176
	$6,848,390	$6,848,390
	$6,399,468	$6,848,390

A portion of the decrease in land-unimproved was the result of a reclassification of 2,114 acres of raw land in Bear Creek and Buck Townships, Pennsylvania, to an asset held for sale. The remaining portion of the decrease was related to an impairment expense taken on 2.9 acres of land known as the Flower Field parcel.

8. Pension Benefits

Components of Net Periodic Pension Cost:

	Three Months Ended				Six Months Ended
	01/31/13			01/31/12
	04/30/13			04/30/12	04/30/13		04/30/12
Service Cost	$14,231			$12,276	$28,462		$24,552
Interest Cost	87,653			96,235	175,306		192,470
Expected return on plan assets	(109,836)			(102,812)	(219,672)		(205,624)
Net amortization and deferral:
Amortization of accumulated loss	127,775	~~127,775~~	83,568		~~83,568~~	255,551	167,136
Net amortization and deferral	127,775	~~127,775~~	83,568		~~83,568~~	255,551	167,136
Total net periodic pension cost	$119,823	~~$119,823~~	$89,267		~~$89,267~~	$239,647	$178,534

The Companies expect to contribute $279,000 to their pension plan in the fiscal year ending October 31, 2013 (“Fiscal 2013”). As of January 31, 2013, the Companies have not made any contributions and anticipate contributing the $279,000 to fund their pension plan in the remaining nine months of Fiscal 2013.9

-The 9Companies -expect to contribute $279,000 to their pension plan in the fiscal year ending October 31, 2013 (“Fiscal 2013”). As of April 30, 2013, the Companies made contributions totaling $93,000 and anticipate contributing an additional $186,000 to fund their pension plan in Fiscal 2013.

9. Accumulated Other Comprehensive Loss

The following table presents the changes in the accumulated other comprehensive loss for the ~~three~~six months ended ~~January~~April 3130, 2013 and the twelve months ended October 31, 2012:

	1/31/13		10/31/12
	4/30/13		10/31/12
	Defined Benefit Pension Plan	Accumulated Other Comprehensive Loss	Defined Benefit Pension Plan	Accumulated Other Comprehensive Loss
Beginning balance	$2,947,179	$2,947,179	$2,272,321	$2,272,321
Current period other comprehensive loss	0	0	674,858	674,858
Ending balance	$2,947,179	$2,947,179	$2,947,179	$2,947,179

The other comprehensive loss is reported net of tax.

10. Fair Value of Financial Instruments and Impairment

The ~~company~~Companies ~~uses~~use ASC 820, “Fair Value Measurements ~~and Disclosures~~” (“ASC 820”), to measure the fair value of certain assets and liabilities. ASC 820 provides a framework for measuring fair value in accordance with GAAP, establishes a fair value hierarchy which requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value and requires certain disclosures about fair value measurements.

The fair value hierarchy is summarized below:

Level 1:

Fair value determined based on quoted prices in active markets for identical assets or liabilities.

Level 2:

Fair value determined using significant observable inputs, generally either quoted prices in active markets for similar assets or liabilities or quoted prices in markets that are not active.

Level 3:

Fair value determined using significant unobservable inputs, such as pricing models, discounted cash flows, or similar techniques.

The estimated recurring fair values of the Companies' financial instruments at ~~January~~April 3130, 2013 and October 31, 2012 are as follows:

	1/31/13		10/31/12
	4/30/13		10/31/12
	Carrying Amount	Fair Value	Carrying Amount	Fair Value
ASSETS:
Cash and cash equivalents	$~~598~~518,~~511~~976	$~~598~~518,~~911~~976	$702,902	$702,902
Accounts and mortgages receivable	~~106~~120,~~238~~319	~~106~~120,~~238~~319	143,382	143,382
LIABILITIES:
Accounts payable	~~219~~217,~~679~~919	~~219~~217,~~679~~919	140,956	140,956
Accrued liabilities	~~205~~223,~~388~~586	~~205~~223,~~388~~586	311,097	311,097
Debt	$16,~~709~~775,~~235~~403	$16,~~824~~898,~~674~~378	$16,880,416	$16,988,594

Fair Values were determined as follows:

Cash and cash equivalents, accounts and mortgages receivable, accounts payable and accrued liabilities: The carrying amounts approximate fair value because of the short-term maturity of these instruments.

~~Amounts~~Debt: ~~due~~The tofair ~~related~~value ~~parties:~~of ~~Estimating~~debt ~~the~~is ~~fair~~estimated ~~value~~using ofdiscounted ~~these~~cash ~~instruments~~flows isbased ~~not~~on ~~practicable~~current ~~because~~borrowing rates available to the ~~terms~~Companies offor ~~these~~similar ~~transactions~~types ~~could~~of ~~not~~borrowing bearrangements ~~duplicated~~- inLevel ~~the~~2 ~~market~~hierarchy.

~~Debt:~~As ~~The~~of ~~fair~~April ~~value~~30, 2013, the carrying amount net of ~~debt~~prior isperiod ~~estimated~~impairments ~~using~~for ~~discounted~~land ~~cash~~and ~~flows~~land ~~based~~development oncosts ~~current~~is ~~borrowing~~$19,404,071, ~~rates~~less ~~available~~impairment toexpense of $3,500,000, recorded in the ~~Companies~~six months ended April 30, 2013 for ~~similar~~a ~~types~~revised carrying value of ~~borrowing~~$15,904,071. A ~~arrangements~~126 unit development project had a carrying value of $4,610,965 which was written down by an impairment charge of $3,500,000. Management reassessed the carrying value of the project following its evaluation of trends in the local real estate market, which management determined were not reflecting the recovery

As of January 31, 2013, the carrying amount net of prior period impairments for land and land development costs are $20,325,604. The carrying amount net of prior period impairments for land improvements, buildings and equipment is $20,271,488. An adjustment of $515,631 was recorded to both land improvements, buildings and equipment and deferred income due to notification received from the PA Department of Transportation stating the proposed safety rest area project along Interstate 80 has been abandoned. This 10

-recently 10experienced nationally. In determining the amount of the impairment, management performed a discounted cash flow analysis based on reduced estimates regarding the timing of unit sales and the prices to be realized. Certain quantitative inputs utilized in the analysis for this impairment are detailed below. The carrying amount net of prior period impairments for land improvements, buildings and equipment is $19,859,880. A reclassification of $515,631 was recorded to both land improvements, buildings and equipment and deferred income due to notification received from the PA Department of Transportation stating the proposed safety rest area project along Interstate 80 has been abandoned. This reclassification had $0 impact on the Combined Statement of Operations. The carrying amount net of prior period impairments for land held for investment is $6,599,468 less impairment expense of $200,000 recorded in the six months ended April 30, 2013 for a revised carrying value of $6,399,468. A certain lot included in land held for investment had a carrying value of $500,431 which was written down by an impairment charge of $200,000. The quoted listing price less selling and closing costs provided by the broker for this 2.9 acre parcel of land was the input used in determining the fair value of this property (Level 2). The carrying amount net of prior period impairments for long-lived assets held for sale as of April 30, 2013 is $1,660,757. The assets of discontinued operations as of April 30, 2013 had a carrying value net of prior period adjustments for impairment of $166,682. There was a total of $3,700,000 impairment expense in the six months ended April 30, 2013.

~~adjustment~~ As ~~had~~part $0of ~~impact~~its onongoing methodology to review the ~~Combined~~carrying ~~Statement~~value of ~~Operations. The~~certain ~~carrying~~of ~~amount~~its ~~net~~properties, management reviewed the carrying values of ~~prior~~the ~~period~~Jack ~~impairments~~Frost ~~for~~National Golf Course and adjacent land ~~held~~approved for ~~investment~~use isas $6a planned residential development. Based on,~~848~~ among other factors,~~390.~~ ~~The~~trends ~~carrying~~in ~~amount~~the ~~net~~local ofreal ~~prior~~estate ~~period~~market, ~~impairments~~management ~~for~~has ~~long-lived~~determined ~~assets~~it ~~held~~is ~~for~~likely ~~sale~~that asthe carrying value of ~~January~~the ~~31,~~properties ~~2013~~has isbeen ~~$494,323~~impaired. ~~The~~However, ~~assets~~management ofis ~~discontinued~~currently ~~operations~~unable asto estimate the amount of ~~January~~the 31impairment, ~~2013~~and ~~have~~is aundertaking ~~carrying~~additional ~~value~~measures ~~net~~to ofprovide ~~prior~~such ~~period~~an ~~adjustments~~estimate. ~~for~~Management ~~impairment~~anticipates ofthat ~~$166~~it will complete this process,~~682. There~~ ~~was~~and nothat ~~impairment~~the ~~expense~~Company inwill recognize the ~~three~~applicable ~~months~~impairment loss, if any, during the quarter ended ~~January~~July 31, 2013.

As of October 31, 2012, the carrying amount net of prior period impairments for land and land development costs ~~are~~were $20,359,066 less impairment expense of $7,000 in Fiscal 2012 for a revised carrying value of $20,352,066. A certain lot included in the land and land development costs had a carrying value of $37,394 which was written down in Fiscal 2012 by an impairment charge of $7,000 due to the sale of a similar lot in Fiscal 2012, to its fair value of $30,394. The carrying amount net of prior period impairments for land improvements, buildings and equipment ~~are~~is $21,043,068. There was no impairment expense for land improvements, buildings and equipment in Fiscal 2012. The carrying amount net of prior period impairments for land held for investment is $6,848,390. There was no impairment on land held for investment in Fiscal 2012. The carrying amount net of prior period impairments for long-lived assets held for sale as of October 31, 2012 was $846,174. There was no impairment expense on long-lived assets held for sale in Fiscal 2012. The assets of discontinued operations as of October 31, 2012 ~~have~~had a carrying value net of prior period adjustments for impairment of $230,382 less $63,700 impairment expense in Fiscal 2012, due to a sales agreement signed in September 2012 for this property, for a fair value of $166,682. The overall total impairment in Fiscal 2012 was $70,700. The impairment for long-lived assets held for sale, land and land development costs, land held for investment and assets of discontinued operations was determined using level 2 criteria wherein fair value is determined using significant observable inputs, generally either quoted prices in an active market for similar assets or liabilities or quoted prices in markets that are not active.

The table below summarizes the level of fair value hierarchy in which the fair value measurements resulting in impairment losses during the six month period ending April 30, 2013 are categorized:


		Non-Recurring Fair Value Measurements at the End of the Reporting Period Using ($ in thousands)
	4/30/2013	Quoted Prices in Active Markets for Identical Assets (Level 1)	Significant Other Observable Inputs (Level 2)	Significant Unobservable Inputs (Level 3)	Total Losses
Land and land development costs (a)	$1,111			$1,111	$3,500
Land held for investment (b)	300		300		200
Total nonrecurring fair value measurements	$1,411	$0	$300	$1,111	$3,700

(a) In accordance with Subtopic 360-10, land and land development costs with a carrying value of $4.6 million were written down to their fair value of approximately $1.1 million, resulting in impairment expense of $3.5 million, which was included in the loss for the period.

(b) In accordance with Subtopic 360-10, land held for investment with a carrying value of approximately $500,000 was written down to its fair value of approximately $300,000, resulting in impairment expense of $200,000, which was included in the loss for the period.

The table below summarizes, for the periods indicated, the ranges of certain quantitative unobservable inputs (Level 3) utilized in determining the fair value of the impaired land and land development costs:


Fiscal Year Ending October 31,	Sales price per square ft.	Sales pace per year (in Units)	Discount rate
2015	$147 - $152	9	10%
2016	$153 - $164	25	10%
2017	$165 - $171	34	10%
2018	$172 - $178	32	10%
2019	$179 - $185	17	10%
2020	$186 - $192	3	10%

11. Per Share Data

Earnings per share (“EPS”) is based on the weighted average number of common shares outstanding during the period. The calculation of diluted EPS assumes weighted average options have been exercised to purchase shares of common stock in the relevant period, net of assumed repurchases using the treasury stock method. For the three and six months ended ~~January~~April 3130, 2013 and 2012, all outstanding unexercised stock options would be excluded from the calculation of diluted EPS because the exercise price of all such options exceeded the market price of the Companies’ common stock. As a result, the calculation of diluted EPS has been excluded from the table below since diluted EPS for these periods is equal to EPS.

Weighted average basic shares, taking into consideration shares issued, weighted average options used in calculating EPS and treasury shares repurchased, and basic loss per weighted average combined share for the three and six months ended ~~January~~April 3130, 2013 and ~~January~~April 3130, 2012 are as follows:

	Three Months Ended		Six Months Ended
	01/31/13	01/31/12
	04/30/13	04/30/12	04/30/13	04/30/12
Weighted average combined shares of common stock outstanding used to compute basic earnings per combined share	2,450,424	2,450,424	2,450,424	2,450,424
Basic loss per weighted average combined share is computed as follows:
Net loss before discontinued operations	($~~569~~2,~~580~~931,889)	($~~506~~498,~~306~~503)	($3,501,469)	($1,004,809)
Weighted average combined shares of common stock outstanding	2,450,424	2,450,424	2,450,424	2,450,424
Basic loss per weighted average combined share	($01.2320)	($0.2120)	($1.43)	($0.41)
Net (loss) income from discontinued operations	($4)1,425	($24,~~877~~916)	$1,421	($2,039)
Weighted average combined shares of common stock outstanding	2,450,424	2,450,424	2,450,424	2,450,424
Basic earnings per weighted average combined share	$0.00	$0.00	$0.00	$0.00
Net loss	($~~569~~2,~~584~~930,464)	($503,~~429~~419)	($3,500,048)	($1,006,848)
Weighted average combined shares of common stock outstanding	2,450,424	2,450,424	2,450,424	2,450,424
Basic loss per weighted average combined share	($01.2320)	($0.2120)	($1.43)	($0.41)

~~- 11 -~~12

12. Supplemental Disclosure to Statements of Cash Flows

The following are supplemental disclosures to the statements of cash flows for the ~~three~~six months ended ~~January~~April 3130, 2013 and 2012:

	2013	2012
Cash paid during the period for:
Interest	$~~260~~517,~~901~~755	$~~345~~625,~~774~~059
Income taxes	$1117,~~600~~900	$25,~~400~~300
Non cash operating activities:
Reclassification of assets from long-lived assets held for sale to land improvements, buildings and equipment	$0	$191,537
Reclassification of assets from land improvements, buildings and equipment, net to long-lived assets held for sale	$220,887	$0
Reclassification of assets from land and land development costs to long-lived assets held for sale	$30,394	$0
Reclassification of assets from land held for investment to long-lived assets held for sale	$248,922	$0
Adjustment to land improvements, buildings and equipment due to abandonment of sewer line	($515,631)	$0
Reclassification of assets from long-lived assets held for sale to land improvements, buildings and equipment	$0	$388,526
Adjustment to deferred income due to abandonment of sewer line	$515,631	$0
Reclassification of assets from land and land development costs to long-lived assets held for sale	$957,625	$0
Reclassification to land improvements, buildings and equipment due to abandonment of sewer line	($515,631)	$0
Reclassification to deferred income due to abandonment of sewer line	$515,631	$0

13. Business Segment Information

The following information is presented in accordance with the accounting pronouncement regarding disclosures about segments of an enterprise and related information. The Companies’ business segments were determined from the Companies’ internal organization and management reporting, which are based primarily on differences in services.

Real Estate Management/Rental Operations

Real Estate Management/Rental Operations consists of: investment properties leased to others located in Eastern Pennsylvania, New Jersey, Minnesota and Louisiana; recreational club activities; services to the trusts that operate resort residential communities; sales of investment properties; and rental of land and land improvements.

Land Resource Management

Land Resource Management consists of: land sales; land purchases; timbering operations; the Jack Frost National Golf Course; and a real estate development division. Timbering operations consist of selective timbering on our land holdings. Contracts are entered into for parcels that have had the timber selectively marked. We rely on the advice of our forester, who is engaged on a consulting basis and who receives a commission on each stumpage contract, for the timing and selection of certain parcels of land for timbering. Our forester gives significant attention to protecting the environment and retaining the value of these parcels for future timber harvests. The Jack Frost National Golf Course is managed by Billy Casper Golf, LLC, an unaffiliated third party. The real estate development division is responsible for the residential land development activities which include overseeing the construction of single and multi-family homes and development of infrastructure.

Funds expended to date for real estate development have been primarily for infrastructure improvements and home construction in the Laurelwoods II and Boulder Lake Village communities. Construction of 22 single family homes, four duplex homes in Laurelwoods II and 18 condominium units within Building J at Boulder Lake Village on Big Boulder Lake have been completed at October 31, 2012. Other expenditures for our development projects in the planning phases include fees for architects, engineers, consultants, studies and permits. All of the homes had been sold as of ~~January 31, 2013, except for one condominium which was subsequently sold on~~ February 1, 2013.

~~- 12 -~~13

Information by business segment is as follows:

	Three months ended		Six months ended
	1/31/13	1/31/12
	4/30/13	4/30/12	4/30/13	4/30/12
Revenues from continuing operations:
Real estate management/rental operations	$~~665~~692,~~986~~944	$~~655~~697,~~265~~612	$1,358,930	$1,352,877
Land resource management	~~454~~298,~~674~~195	~~952~~1,~~585~~037,506	752,869	1,990,091
Total revenues from continuing operations	$1,120,660	$1,607,850
Total revenues from operations	$991,139	$1,735,118	$2,111,799	$3,342,968
Operating profit (loss) from continuing operations, excluding general and administrative expenses:
Real estate management/rental operations	$~~163~~231,~~827~~361	$~~147~~224,~~280~~560	$395,188	$371,840
Land resource management	(~~254~~3,~~941~~956,714)	(59268,~~564~~728)	(4,211,655)	(328,292)
Total operating profit, excluding general and administrative expenses	($91,114)	$87,716
Total operating profit (loss), excluding general and administrative expenses	($3,725,353)	($44,168)	($3,816,467)	$43,548
General and administrative expenses:
Real estate management/rental operations	$~~304~~323,~~983~~090	$~~217~~174,~~818~~741	$627,614	$392,183
Land resource management	~~208~~139,~~214~~035	~~316~~259,~~651~~878	347,708	576,905
Total general and administrative expenses	$~~513~~462,~~197~~125	$~~534~~434,~~469~~619	$975,322	$969,088
Interest and other income, net:
Real estate management/rental operations	$~~1,303~~13	$~~1,091~~58	$1,316	$1,149
Land resource management	~~926~~44	~~1,647~~145	970	1,792
Total interest and other income, net	$~~2,229~~57	$~~2,738~~203	$2,286	$2,941
Interest expense:
Real estate management/rental operations	$~~247~~244,~~507~~081	$~~300~~273,~~906~~045	$494,612	$588,457
Land resource management	1211,~~991~~387	231,~~385~~874	21,354	10,753
Total Interest expense	$~~260~~255,~~498~~468	$~~324~~274,~~291~~919	$515,966	$599,210
Loss from continuing operations before income taxes	($~~862~~4,~~580~~442,889)	($~~768~~753,~~306~~503)	($5,305,469)	($1,521,809)

Identifiable assets, net of accumulated depreciation at ~~January~~April 3130, 2013 and October 31, 2012 and depreciation expense and capital expenditures for ~~three~~six months ended ~~January~~April 31, 2013 and the fiscal year ended October 31, 2012 by business segment are as follows:

January 31, 2013	Identifiable Assets	Depreciation and Amortization Expense	Capital Expenditures
April 30, 2013	Identifiable Assets	Depreciation and Amortization Expense	Capital Expenditures
Real estate management/rental operations	$2524,~~432~~441,~~388~~239	$~~196~~392,~~261~~122	$05,028
Land resource management	2320,~~377~~519,~~770~~803	84168,~~464~~928	0
Other corporate	~~106~~99,~~388~~082	1020,~~486~~472	35129,~~262~~824
Discontinued operations	166,682	0	0
Total Assets	$4946,~~083~~226,~~228~~806	$~~291~~581,~~211~~522	$35134,~~262~~852


October 31, 2012	Identifiable Assets	Depreciation and Amortization Expense	Capital Expenditures
Real estate management/rental operations	$26,125,839	$804,900	$24,579
Land resource management	23,990,608	342,580	9,617
Other corporate	288,363	77,856	59,285
Discontinued operations	166,682	1,666	0
Total Assets	$50,571,492	$1,227,002	$93,481

~~- 13 -~~14

During the ~~three~~six months ended ~~January~~April 3130, 2012, the Companies had two material property sales, which totaled $10,911,419: one sale for $9,000,000 to JFBB Ski Areas, Inc. and one sale for $1,911,419 to Phyllis Enfield Trust. During the ~~three~~six months ended ~~January~~April 3130, 2013, there was no concentration of sales.

14. Subsequent Events

The Companies have evaluated and disclosed subsequent events from ~~January~~April 3130, 2013 through the issuance date of ~~this~~the Form 10-Q.

On February 21, 2013, Blue Ridge and Hanson Aggregated BMC, Inc., Assignee of The Conservation Fund pursuant to an Assignment of Agreement of Sale dated February 1, 2013, (the “Purchaser”) entered into a Fourth Amendment (the “Fourth Amendment”) to the Agreement of Sale between Blue Ridge and the Purchaser dated February 17, 2011 (the “Initial Phase 3 Agreement”), as amended by the First Amendment dated August 15, 2011 (the “First Amendment”), as amended by the Second Amendment dated February 20, 2012 (the “Second Amendment”, and as amended by the Third Amendment dated September 6, 2012 (the “Third Amendment”), and the Initial Phase 3 Agreement as amended by the First, Second and Third Amendments (the “Phase 3 Agreement”) for raw land owned by Blue Ridge. As previously disclosed, under the Phase 3 Agreement, Blue Ridge agreed to sell the Purchaser land located in Thornhurst Township, Lackawanna County, Pennsylvania, consisting of approximately 376 acres (the “Property”), for a purchase price of $1,600,000, $5,000 of which was paid by the Purchaser as a deposit (the “Deposit”) within five business days of the effective date of the Phase 3 Agreement, and the remainder of which is payable to Blue Ridge at the closing of the sale of the Property (the “Closing”).

Prior to the Fourth Amendment, the Phase 3 Agreement provided, among other things, that (i) the Seller reserved the oil and gas rights on the Property for a period commencing on the date of Closing and terminating on December 31, 2031; and (ii) that the terms of a surface use agreement for gas and oil rights on the Property (the “Surface Use Agreement”) would be negotiated during the inspection period (as extended by the terms of the Third Amendment). The Fourth Amendment provides that (i) the term and duration of the oil and gas reservation reserved by Seller in Section 1 of the Phase 3 Agreement is extended and shall expire on December 31, 2035; (ii) the parties have completed review of the Surface Use Agreement referenced in Section 1 of the Phase 3 Agreement and attached to the Phase 3 Agreement as Exhibit C (the Surface Use Agreement Exhibit”); and (iii) the parties agree that the Surface Use Agreement Exhibit shall be the final form of Surface Use Agreement and shall be incorporated by reference and attached to the deed at Closing. All other terms and conditions of the Phase 3 Agreement in effect prior to the Fourth Amendment remain in effect.

- 14 -

Item 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

Special Note Regarding Forward-Looking Statements

Some of the statements in this Quarterly Report on Form 10-Q constitute forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, that are made based upon, among other things, current assumptions by management, expectations and beliefs concerning future developments and their potential effect on the Companies. In some cases you can identify forward-looking statements where statements are preceded by, followed by or include the words “believes,” “expects,” “anticipates,” “plans,” “future,” “potential,” “probably,” “predictions,” “continue” or the negative of such terms or similar expressions. All statements, other than statements of historical fact, regarding the Companies’ strategy, future operations, financial position, estimated revenue, projected costs, projected savings, prospects, plans, opportunities and objectives constitute “forward-looking statements,” including but not limited to statements regarding the conducting of future construction in phases and the use of profits of such construction; the effect of accounting policies on significant judgments; the materiality of current legal proceedings with which the Companies’ are involved; the current and future real estate market in the Pocono Mountains; the timing and outcome of the Companies’ planned land development; contributions to the Companies’ pension plan; our issuance of options and recognition of compensation expense; commencement of new development projects; acquisitions of income producing properties; land tract sales that are to be treated as tax deferred exchanges; our review and update of our master development plan and the Companies’ anticipated cash needs.

These statements involve known and unknown risks, uncertainties and other factors that may cause our or our industry’s actual results, levels of activity, performance or achievements to be materially different from the information expressed or implied by these forward-looking statements. Because forward-looking statements involve risks and uncertainties, there are important factors that could cause actual results to differ materially from those expressed or implied by these forward-looking statements, including but not limited to:

Changes in market demand and/or economic conditions within the Companies’ local region and nationally, including changes in consumer confidence, volatility of mortgage interest rates and inflation;

The status of the current and future real estate market in the Pocono Mountains;

Borrowing costs, and the Companies’ ability to generate cash flow to pay interest and scheduled debt payments as well as the Companies’ ability to refinance such indebtedness;

The Companies’ ability to continue to generate sufficient working capital to meet the Companies’ operating requirements;

The Companies’ ability to obtain and maintain approvals from local, state and federal authorities on regulatory issues;

The Companies’ ability to provide competitive pricing to sell homes;

The Companies’ ability to achieve gross profit margins to meet operating expenses;

Fluctuations in the price of building materials;

The Companies’ ability to effectively manage the Companies’ business;

The Companies’ ability to attract and retain qualified personnel in the Companies’ business;

The Companies’ ability to negotiate leases for the future operations of our facilities;

The Companies’ relations with the Companies’ controlling shareholder, including its continuing willingness to provide financing and other resources;

Actions by the Companies’ competitors;

Effects of changes in accounting policies, standards, guidelines or principles; and

Terrorist acts, acts of war and other factors over which the Companies have little or no control.

As a result of these factors, we cannot assure you that the forward-looking statements in this Quarterly Report on Form 10-Q will prove to be accurate. Furthermore, if our forward-looking statements prove to be inaccurate, the inaccuracy may be material. In light of the significant uncertainties in these forward-looking statements, you should not regard these statements as a representation or warranty by us or any other person that we will achieve our objectives and plans in any specified time frame, if at all.

~~- 15 -~~16

We do not intend to update these forward-looking statements, to reflect circumstances or events that occur after the date the forward-looking statements are made or to reflect the occurrence of unanticipated events except as required by law. We qualify all the forward-looking statements contained in this Quarterly Report on Form 10-Q by the cautionary statements referenced above.

Overview

Over the past 30 years, we have developed resort residential communities adjacent to the Jack Frost Mountain and Big Boulder Ski Areas located in Lake Harmony, Kidder Township, Pennsylvania. These communities are located in the Pocono Mountains of Pennsylvania, a popular recreation destination for local and regional visitors, especially from the New York City and Philadelphia metropolitan areas. The scenic hills and valleys of the Pocono Mountains offer many opportunities to enjoy outdoor activities such as golfing, fishing, hunting, skiing, snowboarding and other sports.

At ~~January~~April 3130, 2013, we owned 13,~~780~~778 acres of land in Northeastern Pennsylvania along with 13 acres of land in various other states. Of these land holdings, we designated 31,~~011~~433 acres as held for development, ~~377~~8,289 acres as land held for investment, 4,068 acres as held for sale and 1 acre for discontinued operations. It is expected that all of our planned developments will either be subdivided and sold as parcels of land, or be developed into single and multi-family housing.

The real estate industry is cyclical and is subject to numerous economic factors including general business conditions, changes in interest rates, inflation and oversupply of properties. Any sustained period of weakening business or economic conditions will impact the demand for the type of properties we intend to develop. Management continues to monitor the progress of residential home sales within the Northeast region. No new residential development projects will be started until the market stabilizes.

With recent changes in management and in light of the economic environment, we will continue to evaluate our strategic plan and our master development plan. We have reviewed our land inventory, oil, gas and mineral rights and development portfolio with a view to maximize shareholder value. As in the past, we will continue to consider opportunistic asset sales of non-core investment properties as a means of funding future operations.

For Fiscal 2013, we intend to continue selective sales of land, some of which may be treated as Section 1031 tax deferred exchanges under the Internal Revenue Code.

We also have generated revenue through the selective timbering of our land. We rely on the advice of our forester, who is engaged on a consulting basis and who receives a commission on each stumpage contract, for the timing and selection of certain parcels for timbering. Our forester gives significant attention to protecting the environment and maximizing the value of these parcels for future timber harvests. We have not entered into any new timber harvest contracts for the timbering of our lands in order to provide ample time for the regeneration of trees. Our forester will monitor the growth and timbering will resume when we, in consultation with our forester, deem prudent.

The Jack Frost National Golf Course ~~opened in the spring of 2007. The golf course~~ is managed by Billy Casper Golf, LLC, a nationally-recognized golf course management company. With a continued emphasis on course maintenance, along with the natural maturation of the fairways, Jack Frost National has become one of the premier golf facilities in Northeastern Pennsylvania. Year to year financial performance has continued to improve.

As a result of the Companies’ focus on real estate activities, we present our balance sheet in an unclassified presentation using an alternate format in order to reflect our assets and liabilities in order of their importance.

Recent Developments

AsOn February 21, 2013, Blue Ridge and Hanson Aggregated BMC, Inc., Assignee of The Conservation Fund pursuant to an Assignment of Agreement of Sale dated February 1, 2013, ~~all~~(the “Purchaser”) entered into a Fourth Amendment (the “Fourth Amendment”) to the Agreement of Sale between Blue Ridge and the ~~constructed~~Purchaser ~~condominium~~dated ~~units~~February at17, ~~Boulder~~2011 ~~lake~~(the ~~Village~~“Initial Phase 3 Agreement”), as amended by the First Amendment dated August 15, 2011 (the “First Amendment”), as amended by the Second Amendment dated February 20, 2012 (the “Second Amendment”, and as amended by the Third Amendment dated September 6, 2012 (the “Third Amendment”), and the Initial Phase 3 Agreement as amended by the First, Second and Third Amendments (the “Phase 3 Agreement”) for raw land owned by Blue Ridge. As previously disclosed, under the Phase 3 Agreement, Blue Ridge agreed to sell the Purchaser land located in ~~Lake~~Thornhurst ~~Harmony~~Township, Lackawanna County, Pennsylvania, ~~were~~consisting ~~sold~~of approximately 376 acres (the “Property”), for a purchase price of $1,600,000, $5,000 of which was paid by the Purchaser as a deposit (the “Deposit”) within five business days of the effective date of the Phase 3 Agreement, and the remainder of which is payable to Blue Ridge at the closing of the sale of the Property (the “Closing”).

~~- 16 -~~17

On March 21, 2013, Blue Ridge Real Estate Company (the “Company”) and the Pennsylvania Game Commission (the “Purchaser”) entered into a Land Purchase Option (the “Purchase Option”) and Addendum (the “Addendum” and together with the Purchase Option, the “PGC Agreement”) for raw land owned by the Company. Under the PGC Agreement, the Company has agreed to sell the Purchaser two tracts of land in two phases: the first phase consists of approximately 1,557 acres of land in Buck Township, Luzerne County (hereinafter referred to as“BRRE14”) and the second phase consists of approximately 2,106 acres of land in Buck and Bear Creek Townships, Luzerne County, (hereinafter referred to as “BRRE2” and together with BRRE14, “the Properties”), collectively conveying 3,663 acres of land, for an aggregate purchase price of $10,050,000.

Pursuant to the terms of the Purchase Option, the sale was subject to acceptance by the Purchaser within six months from the date the PGC Agreement was signed (the “Acceptance Period”) and was irrevocable by the Company during the Acceptance Period. On April 15, 2013, Blue Ridge Real Estate Company (the “Company”) received notice from the Pennsylvania Game Commission (the “Purchaser”) that the Land Purchase Option (the “Purchase Option”) and Addendum (the “Addendum” and together with the Purchase Option, the “PGC Agreement”) entered into on March 21, 2013 was accepted by the Purchaser. Under the terms of the PGC Agreement, once the Purchase Option is accepted by the Purchaser, it converts to a Land Purchase Contract (the “Purchase Contract”). The Purchaser shall have the option of canceling the Purchase Contract or accepting the Properties without diminution in price (i) if significant contamination or pollution has occurred or a waste disposal site is present on the Properties; or (ii) if the title examination by the Purchaser reveals material title defects of the Properties.

The Addendum further provides that, if the Purchaser exercises the Purchase Option, (i) the Company will perform and pay for all surveys of the Properties for the purposes of title insurance and for the preparation of deeds; (ii) the Company will retain gas and oil rights on the Properties from closing through June 30, 2023; (iii) the Company shall terminate all hunting leases on the Properties prior to closing; (iv) the closing for the sale of the Properties shall take place in two phases: BRRE14 shall close on or before July 31, 2013 (the “Phase 1 Closing”) for the purchase price of $5,000,000 which shall be paid to the Company at the Phase 1 Closing; and BRRE2 shall close between November 1, 2013 and November 15, 2013 (the “Phase 2 Closing”) for the purchase price of $5,050,000 which shall be paid to the Company at the Phase 2 Closing; (v) title to the Properties is subject to all exceptions, restrictions, reservations, easements, rights-of-way, conditions, agreements, rights, covenants, privileges and licenses as granted or conveyed to others by the Company or its predecessors; (vi) prior to or simultaneously to the transfer of BRRE14 to the Purchaser, the Company shall convey two electric transmission easements for Right of Way (the “ROW”) to PPL Electric Utilities Corporation (“PPL”); (vii) the Purchaser shall have the opportunity to review and approve the ROW; and (viii) the Company will enter into a Backstop Agreement with PPL (the “PPL Agreement”), providing PPL with rights to acquire BRRE14 in the event that the Purchaser fails to complete the Phase 1 Closing by July 31, 2013.

On March 21, 2013, the Company entered into the PPL Agreement, which is contingent on the PGC Agreement disclosed above, to provide assurance for the orderly disposition of BRRE14 and for the grant of the ROW over BRRE14 for the construction of two power lines associated with PPL’s Northeast-Pocono Reliability Project.

Pursuant to the terms of the PPL Agreement, PPL has agreed to purchase BRRE14 for the purchase price of $5,000,000, which shall be paid to the Company at closing, in the event the Company is the owner of BRRE14 on August 1, 2013.

The PPL Agreement further provides that (i) PPL shall acquire the property in an “as-is” condition, with any and all faults, other than representations of title; (ii) the Company will retain gas and oil rights until August 31, 2023; (iii) the Company shall execute the ROW over BRRE14 on or before March 31, 2013, provided that PPL has not exercised its

option to terminate the PPL Agreement; (iv) BRRE14 is to be conveyed free and clear of all liens except for the encumbrances, easements and other items of record; (v) closing shall occur on or before August 31, 2013; (vi) the Company and PPL agree that the grant of the ROW encumbers BRRE14 and that any existing development plan for BRRE14 cannot be implemented; (vii) in the event that the Phase 1 Closing does not take place and the Company has already granted the ROW to BRRE14, then PPL agrees to purchase BRRE14; and (viii) PPL certifies that no Public Utility Commission approval is needed to bind PPL to the terms of the PPL Agreement.

On March 26, 2013, the Company granted the ROW over BRRE14 to PPL.

Critical Accounting Policies and Significant Judgments and Estimates

We have identified the most critical accounting policies upon which our financial reporting depends. The critical policies and estimates were determined by considering accounting policies that involve the most complex or subjective decisions or assessments. The most critical accounting policies identified relate to deferred tax liabilities, the valuation of land development costs and long-lived assets, and revenue recognition.

Revenues are derived from a wide variety of sources, including sales of real estate, management of investment properties, home construction, property management services, timbering, golf activities, and leasing activities. Revenues are recognized as services are performed, except as noted below.

We recognize income on the disposition of real estate using the full accrual method. The full accrual method is appropriate at closing when the sales contract has been signed, the buyer has arranged permanent financing and the risks and rewards associated with ownership have been transferred to the buyer. In the few instances that the Companies finance the sale, a minimum 20% down payment is required from the buyers. The remaining financed purchase price is not subject to subordination. Down payments of less than 20% are accounted for as deposits.

The costs of developing land for resale as resort homes and the costs of constructing certain related amenities are allocated to the specific parcels to which the costs relate. Such costs, as well as the costs of construction of the resort homes, are charged to operations as sales occur. Land held for resale and resort homes under construction are stated at lower of cost or market.

Timbering revenues from stumpage contracts are recognized at the time a stumpage contract is signed. At the time a stumpage contract is signed, the risk of ownership is passed to the buyer at a fixed, determinable cost. There is no transfer of title in connection with these contracts. Reasonable assurance of collectibility is determined by the date of signing and, at that time, the obligations of the Companies’ are satisfied. Therefore, full accrual recognition at the time of contract execution is appropriate.

Deferred income consists of rents, dues and deposits on land or home sales. These rents, which are not yet earned are rents from the Companies’ commercial properties that have been paid in advance. Dues are dues paid in advance related to memberships in the Companies’ hunting and fishing clubs and golf course memberships paid. Revenues related to the hunting and fishing clubs and golf course memberships are recognized over the seasonal period that the dues cover. We recognize revenue related to the fishing club over a five month period from May through September, and the golf course over a seven month period, from April through October. Deposits are required on land and home sales.

Management’s estimate of deferred tax assets and liabilities is primarily based on the difference between the tax basis and financial reporting basis of depreciable assets and the net investment in direct financing leases, like-kind exchanges of assets, net operating losses, stock options and accruals. Valuation allowances are established when necessary to reduce tax assets to the amount expected to be realized.

Real estate development projects are stated at cost unless an impairment exists, in which case the project is written down to fair value in accordance with GAAP. We capitalize as land and land development costs, the original acquisition cost, direct construction and development costs, property taxes, interest incurred on costs related to land under development and other related costs (engineering, surveying, landscaping, etc.) until the property reaches its intended use. Because the development projects are considered as long-lived assets under GAAP, we are required to regularly review the carrying value of each of the projects and write down the value of those projects when we believe the values are not recoverable. The cost of sales for individual parcels of real estate or condominium units within a project is determined using the relative sales value method. Revenue is recognized upon signing of the applicable closing documents, at which time a binding contract is in effect, the buyer has arranged for permanent financing and the Companies are assured of payment in full. In addition, at the time of closing, the risks and rewards associated with ownership have been transferred to the buyer. Selling expenses are recorded when incurred.

Long-lived assets, namely properties, are recorded at cost. Depreciation and amortization is provided principally using the straight-line method over the estimated useful life of the asset. Upon sale or retirement of the asset, the cost and related accumulated depreciation are removed from the related accounts, and resulting gains or losses are reflected in income.19

Long-lived 17assets, namely properties, are recorded at cost. Depreciation and amortization is provided principally using the straight-line method over the estimated useful life of the asset. Upon sale or retirement of the asset, the cost and related accumulated depreciation are removed from the related accounts, and resulting gains or losses are reflected in income. We test for recoverability our long-lived assets whenever events or changes in circumstances indicate that the carrying value of an asset may not be recoverable. In that event, we utilize either or both a discounted cash flow method or comparable sale pricing method to determine a fair market value. If our use of one or both of these methods indicates that the carrying value of the asset is not recoverable, an impairment loss is recognized in operating income. An impairment loss is the difference between the carrying value and the fair value of the asset less cost to sell. An impairment loss is recognized during the period in which the impairment is determined to be probable and reasonably estimable.

As part of its ongoing methodology to review the carrying value of certain of its properties, management reviewed the carrying values of the Jack Frost National Golf Course and adjacent land approved for use as a planned residential development. Based on, among other factors, trends in the local real estate market, management has determined it is likely that the carrying value of the properties has been impaired. However, management is currently unable to estimate the amount of the impairment, and is undertaking additional measures to provide such an estimate. Management anticipates that it will complete this process, and that the Company will recognize the applicable impairment loss, if any, during the quarter ended July 31, 2013.

Interest, real estate taxes, and insurance costs, including those costs associated with holding unimproved land, are normally charged to expense as incurred. Interest cost incurred during construction of facilities is capitalized as part of the cost of such facilities. Maintenance and repairs are charged to expense, and major renewals and betterments are added to property accounts.

We review our long-lived assets whenever events or changes in circumstances indicate that the carrying value of an asset may not be recoverable. In that event, we calculate the expected future net cash flows to be generated by the asset. If those net future cash flows are less than the carrying value of the asset, an impairment loss is recognized in operating income. The impairment loss is the difference between the carrying value and the fair value of the asset less cost to sell. The impairment loss is recognized in the period incurred.

We sponsor a defined benefit pension plan as detailed in footnote 8 to the accompanying unaudited combined financial statements. The accounting for pension costs is determined by specialized accounting and actuarial methods using numerous estimates, including discount rates, expected long-term investment returns on plan assets, employee turnover, mortality and retirement ages, and future salary increases. Changes in these key assumptions can have a significant effect on the pension plan’s impact on the Companies’ financial statements. We engage the services of an independent actuary and investment consultant to assist us in determining these assumptions and in calculating pension income. The pension plan is currently underfunded and, accordingly, the Companies have made contributions to the fund of $564,358 in Fiscal 2012. The Companies expect to contribute $279,000 to the pension plan in Fiscal 2013. Future benefit accruals under the pension plan ceased as of August 31, 2010. The Companies also have a 401(k) pension plan that is available to all full time employees. Effective August 1, 2010, the Companies match 50% of employee salary deferral contributions up to 3% of their pay for each payroll period.

The Companies recognize as compensation expense an amount equal to the grant date fair value of the stock options issued over the required service period. Compensation cost was measured using the modified prospective approach.

The fair value of each option award is estimated at the date of grant using an option pricing model. Expected volatilities are based upon historical volatilities of the Companies’ stock. The Companies use historical data to estimate option exercises and employee terminations with the valuation model. The expected term of options granted is derived from the output of the valuation model and represents the period of time that options granted are expected to be outstanding. The risk-free rate for periods within the contractual term of the option is based on the U.S. Treasury yield curve in effect at the time of grant. There were no outstanding options at April 30, 2013 and October 31, 2012.

We have no off-balance sheet arrangements as defined in Item 303(a)(4)(ii) of Regulation S-K.

Results of Operations for the Three and Six Months Ended ~~January~~April 3130, 2013 and 2012

Operations for the three and six months ended ~~January~~April 3130, 2013 resulted in a net loss of $~~569~~2,~~584~~930,464 and $3,500,048, or ($01.~~23)~~20 and $1.43 per combined share, respectively, compared to a net loss of $503,~~429~~419 and $1,006,848, or ($0.~~21)~~20 and $0.41 per combined share, for the three and six month ~~period~~periods ended ~~January~~April 3130, 2012, respectively.

Revenues

Combined revenue of $1991,~~120~~139 and $2,~~660~~111,799 for the three and six months ended ~~January~~April 3130, 2013 represents a decrease of $~~487~~743,~~190~~979 and $1,231,169, or 43% and 37%, respectively, compared to the three and six months ended ~~January~~April 3130, 2012. Real Estate Management Operations / Rental Operations revenue decreased $4,668 and increased $106,~~721~~053, or 2(1%) and less than 1%, respectively, for the three and six months ended ~~January~~April 3130, 2013, compared to the three and six months ended ~~January~~April 3130, 2012. Land Resource Management revenue decreased $~~497~~739,~~911~~311 and $1,237,222, or 52(71%) and (62%), respectively for the three and six months ended ~~January~~April 3130, 2013 compared to the three and six months ended ~~January~~April 3130, 2012, respectively.

Real Estate Management/Rental Operations

Real Estate Management Operations / Rental Operations revenue was $~~665~~1,~~986~~358,930 for the ~~three~~six months ended ~~January~~April 3130, 2013, compared to $~~655~~1,~~265~~352,877 for the ~~three~~six months ended ~~January~~April 3130, 2012, which resulted in an increase of $106,~~721~~053, or 2less than 1%. Rental revenue for the ~~three~~six months ended ~~January~~April 3130, 2013 decreased to $~~436~~888,~~925~~015 as compared to $~~448~~898,~~222~~343 for the ~~three~~six months ended ~~January~~April 3130, 2012, a decrease of $1110,~~297~~328, or 3(1%). ~~and~~This ~~was~~resulted from the ~~result~~termination of ~~reclassifying~~the ~~certain~~lease ~~rental~~for ~~properties~~the toski ~~discontinued~~areas ~~operations,~~that ~~primarily~~occurred in ~~Fiscal~~December ~~2012. Real Estate Management revenue increased $22~~2011,~~018,~~ oras ~~11%,~~those ~~due~~facilities towere ~~a credit adjustment to sewer hookup fees in the prior year and increased sewer fees~~sold.

- 18 -

Land Resource Management

For the ~~three~~six months ended ~~January~~April 3130, 2013, Land Resource Management revenues decreased to $~~454~~752,~~674~~869, compared to $~~952~~1,~~585~~990,091 for the ~~three~~six months ended ~~January~~April 3130, 2012, a decrease of $~~497~~1,~~911~~237,222, or 52(62%). There ~~Land sales do not occur on a regular basis. In addition, there~~ were ~~two~~three condominium ~~unit~~ sales in Boulder Lake Village community totaling $~~439~~644,500 for the ~~three~~six months ended ~~January~~April 3130, 2013, as compared to four condominium sales in Boulder Lake Village community totaling $899,000 and three duplex townhouse sales in Laurelwoods II community totaling $667,000 for the ~~three~~six months ended ~~January~~April 3130, 2012, a decrease of $~~227~~921,500, or 34(59%). For the ~~three~~six months ended ~~January~~April 3130, 2013, timbering revenue was $0 as compared to $~~273~~321,~~875~~722 for the ~~three~~six months ended ~~January~~April 3130, 2012, a decrease of $~~273~~321,~~875,~~722 or 100%. The Jack Frost National Golf Course’s revenue for the ~~three~~six months ended ~~January~~April 3130, 2013 increased to $1576,~~174~~369 as compared to $861,~~967~~618 for the ~~three~~six months ended ~~January~~April 3130, 2012, an increase of $614,~~207~~751, or 6924%~~, which was primarily due to favorable weather conditions in November 2012~~.

Operating Costs

Real Estate Management/Rental Operations

Operating costs associated with Real Estate Management Operations / Rental Operations for the ~~three~~six months ended ~~January~~April 3130, 2013 decreased to $~~502~~963,~~159~~742 compared to $~~507~~981,~~985~~037 for the ~~three~~six months ended ~~January~~April 3130, 2012, a decrease of $517,~~826,~~295 or 1(2%). This decrease was primarily ~~due~~the toresult ~~decreased~~of ~~water testing supplies and services costs relating to~~ the ~~trust~~sale ~~services~~of ~~provided~~two tocommercial ~~our~~properties ~~resort~~in ~~communities~~Fiscal 2012.

Land Resource Management

Operating costs associated with Land Resource Management for the ~~three~~six months ended ~~January~~April 3130, 2013 ~~decreased~~increased to $~~709~~4,~~615~~967,624 compared towith $12,~~012~~318,~~149~~383 for the ~~three~~six months ended ~~January~~April 3130, 2012, aan ~~decrease~~increase of $~~302~~2,~~534~~649,241, or 30114%. AThe decrease in cost of goods sold related to real estate development, which was $~~158~~242,~~094~~202 for the ~~three~~six months ended ~~January~~April 3130, 2013 as compared to $~~440~~856,~~963~~253 for the ~~three~~six months ended ~~January~~April 3130, 2012, a decrease of $~~282~~614,~~869~~051, or 6472%. ~~This~~and a decrease in real estate development operating expenses, which was $408,014 for the ~~result~~six ofmonths ~~two~~ended ~~condominium~~April ~~unit~~30, ~~sales~~2013 inas ~~Boulder~~compared ~~Lake~~to ~~Village~~$849,810 ~~during~~for the ~~three~~six months ended ~~January~~April 312012, ~~2013,~~a ~~compared~~decrease toof ~~three~~$441,796 ~~duplex~~or ~~townhouse~~52%. These ~~sales~~decreases inwere the ~~Laurelwoods~~result IIof ~~community~~three Boulder Lake Village condominium sales for the ~~three~~six months ended ~~January~~April 3130, ~~2012. Real~~2013 ~~estate~~as ~~development~~compared ~~operating~~to ~~expenses~~three ~~for~~duplex ~~the~~townhouse ~~three~~sales ~~months~~in ~~ended~~the ~~January~~Laurelwoods ~~31,~~II ~~2013~~community ~~decreased~~and tofour ~~$272,877~~Boulder asLake ~~compared~~Village tocondominium ~~$278,004~~sales for the ~~three~~six months ended ~~January~~April 3130, 2012,. aThose ~~decrease~~decreases were offset by an increase in impairment expense of $53,~~217~~629,300 orprimarily ~~2%. This~~associated ~~decrease~~with ~~was~~the ~~primarily~~Boulder ~~due~~Lake toVillage ~~reductions~~condominium inproject ~~closing~~(see ~~costs~~footnote 10). The Jack Frost National Golf Course expenses increased by $3862,~~464~~758, or 13% for the ~~three~~six months ended ~~January~~April 3130, 2013 as compared to the ~~three~~six months ended ~~January~~April 3130, 2012 primarily due to increased ~~salaries,~~payroll ~~wages~~and related tax and benefit expense ($27,056), ~~benefits~~repairs and maintenance related ~~taxes~~to the course and clubhouse ($2217,~~479~~821) and ~~equipment,~~increased ~~course~~cost ~~repairs~~of goods sold for retail and ~~maintenance~~food operations ($1112,~~710~~177). There were no ~~timber~~timbering contracts for the ~~three~~six months ended ~~January~~April 3130, 2013, ~~compared~~and totwo ~~one~~ timbering ~~contract~~contracts for the ~~three~~six months ended ~~January~~April 3130, 2012. Consulting fees relating to these timber contracts were $0 for the ~~three~~six ~~months~~month ended ~~January~~April 3130, 2013, compared to $2530,~~788~~572 for the ~~three~~six months ended ~~January~~April 3130, 2012, aan decrease of $2530,~~788~~572, which reflects there being $0 timber revenue.

General and Administration

General and Administration costs for the ~~three~~six months ended ~~January~~April 3130, 2013 ~~decreased~~increased to $~~513~~975,~~197~~322 as compared to $~~534~~969,~~469~~088 for the ~~three~~six months ended ~~January~~April 3130, 2012, aan ~~decrease~~increase of $216,~~272~~234, or 41%. This ~~decrease~~increase is primarily related to ~~decreased~~increased ~~salaries~~supplies and ~~wages, related benefits and payroll taxes~~services.

Other Income and Expense

Interest and other income decreased to $2,~~229~~286 for the ~~three~~six months ended ~~January~~April 3130, 2013 compared to $2,~~738~~941 for the ~~three~~six months ended ~~January~~April 3130, 2012, a decrease of $~~509~~655, or 1922%. This was primarily due to decreased interest income. Interest expense for the six months ended April 30, 2013 decreased to $515,966 compared to $599,210 for the six months ended April 30, 2012, a decrease of $83,244, or 14%. Interest expense on our $4,600,000 term note with M&T Bank (the “Bank”) was $0 for the six months ended April 30, 2013 as compared to $14,982 for the six months ended April 30, 2012 for a decrease of $14,982, or 100%. This note was paid in full on December 15, 2011. The interest expense on our $3,100,000 available line of credit with the Bank was $57,219 for the six months ended April 30, 2013 as compared to $16,183 for the six months ended April 30, 2012 for an increase of $41,036, or greater than 100%. The Companies also had a $9,000,000 line of credit with the Bank to fund real estate development which resulted in interest expense related to the completed and unsold units at Boulder Lake Village and Woodsbluff duplexes decreasing to $0 for the six months ended April 30, 2013 as compared to $95,600 for the six months ended April 30, 2012, an decrease of $95,600 or 100%.

Interest expense for the three months ended January 31, 2013 decreased to $260,498 compared to $324,291 for the three months ended January 31, 2012, a decrease of $63,793, or 20%. Interest expense on our $4,600,000 term note with M&T Bank (the “Bank”) was $0 for the three months ended January 31, 2013 as compared to $14,982 for the three months ended January 31, 2012 for a decrease of $14,982 or 100%. This note was paid in full on December 15, 2011. The interest expense on our $3,100,000 available line of credit with the Bank was $28,838 for the three months ended January 31, 2013 as compared to $9,501 for the three months ended January 31, 2012 for an increase of $19,337 or greater than 100%. The Companies also had a

- 19 -

$9,000,000 line of credit with the Bank to fund real estate development which resulted in interest expense related to the completed and unsold units at Boulder Lake Village and Woodsbluff duplexes decreasing to $0 for the three months ended January 31, 2013 as compared to $61,638 for the three months ended January 31, 2012, a decrease of $61,638 or 100%.

Discontinued Operations

Due to management’s decision to sell the two ski areas and a commercial property, as well as the transfer of one investment property to assets of discontinued operations, the results of operations for these four properties for the ~~three~~six months ended ~~January~~April 3130, 2013 and the six months ended April 30, 2012 are being reported as discontinued operations. Future cash flows and operating results for the two ski areas, the commercial property and the investment property are no longer ~~being~~be reported in the Real Estate Management / Rental segment. The gain (loss) resulting from the sale of the three properties is included in discontinued operations.

The net income after taxes from discontinued operations for the Jack in the Box for the ~~three~~six months ended ~~January~~April 3130, 2013 was $0 as compared to $8,~~051~~851 for the ~~three~~six months ended ~~January~~April 3130, 2012.

The net ~~income~~profit (loss) after taxes from discontinued operations for the Jack Frost Mountain and Big Boulder ski areas for the ~~three~~six months ended ~~January~~April 3130, 2013 was $0 compared to $~~371~~5,345 for the ~~three~~six months ended ~~January~~April 3130, 2012.

The net loss after taxes from discontinued operations for the Saylorsburg, Pennsylvania investment property for the ~~three~~six months ended ~~January~~April 3130, 2013 was ($4)1,421 compared to ($5,545) for the ~~three~~six months ended ~~January~~April 3130, 2012.

Tax Rate

The effective tax rate for the ~~three~~six months ended ~~January~~April 3130, 2013 and 2012 was 34%. The rate for Fiscal 2012 is specific to federal taxes. There is no benefit for state income tax because the Companies fully reserved the future benefit.

Liquidity and Capital Resources

As reflected in the Combined Statements of Cash Flows, net cash provided by operating activities was $~~128~~115,~~387~~429 for the ~~three~~six months ended ~~January~~April 3130, 2013 versus $~~265~~684,~~301~~568 for the ~~three~~six months ended ~~January~~April 3130, 2012. The decrease in net cash provided by operating activities for the ~~three~~six months ended ~~January~~April 3130, 2013 is primarily attributable to decreased sales in land and real estate development.

There were no material non-recurring cash items for the ~~three~~six months ended ~~January~~April 3130, 2013. For the ~~three~~six months ended ~~January~~April 3130, 2012 material non-recurring cash items include the sales of Jack Frost Mountain Ski Area for $5,650,000, Big Boulder Ski Area for $3,350,000 and the Jack in the Box for $1,911,419.

On November 30, 2011, the Companies sold the Jack in the Box located in Wallisville, Texas. A portion of the proceeds from the sale were used to pay off the Deed of Trust and Security Agreement and Real Estate Lien Note held by Barbers Hill Bank in the amount of $1,009,002, which encumbered the property.

On December 15, 2011, the Companies paid the balance outstanding on a Loan Agreement and Term Note (the “Note”) with the Bank in the amount of $4,600,000. The Companies utilized a portion of the proceeds from the sale of the Jack Frost Mountain and the Big Boulder ski areas to pay the balance of the Note.

The Companies had a $9,000,000 line of credit with the Bank to fund real estate development with a construction sublimit of $4,400,000 and site development sublimit of $4,600,000. The Companies utilized a portion of the proceeds from the sale of nine Boulder Lake Village condominium units, three Laurelwoods Longview Drive duplex units and the sale of the ski areas to repay $2,585,167 and $2,917,521 on the Construction and Site Development sublimits, respectively, during Fiscal 2012. The remaining balance on the Construction sublimit $653,964 was transferred to the general line of credit in an effort to consolidate debt. At October 31, 2012, $0 was outstanding on each of the Construction and Site Development sublimits, respectively and the $9,000,000 line of credit has expired. 22

-The 20Companies -had a $9,000,000 line of credit with the Bank to fund real estate development with a construction sublimit of $4,400,000 and site development sublimit of $4,600,000. The Companies utilized a portion of the proceeds from the sale of nine Boulder Lake Village condominium units, three Laurelwoods II duplex units and the sale of the ski areas to repay $2,585,167 and $2,917,521 on the Construction and Site Development sublimits, respectively, during Fiscal 2012. The remaining balance on the Construction sublimit $653,964 was transferred to the general line of credit in an effort to consolidate debt. During the six months ended April 30, 2013 proceeds from the sale of the three remaining Boulder Lake Village condominiums were used to repay $604,496 on the general line of credit. At October 31, 2012, $0 was outstanding on each of the Construction and Site Development sublimits, respectively and the $9,000,000 line of credit has expired.

The Companies also have a $3,100,000 line of credit with the Bank for general operations. At ~~January~~April 3130, 2013, $2,~~137~~307,~~140~~843 was outstanding on the $3,100,000 line at a 5.5% interest rate.

The Companies continue to maintain an interest reserve account which was established in the third quarter of Fiscal 2009 as security for the payment of interest. The balance of the interest reserve escrow account was $8145,~~790~~099 at ~~January~~April 3130, 2013.

The existing loan agreement requires, among other things, that the Companies comply annually with consolidated debt to worth, debt service coverage and tangible net worth ratios. The Companies have not met the required debt service coverage ratio at October 31, 2012 and have obtained waivers from the Bank for this covenant.

The following table sets forth the Companies’ significant contractual cash obligations for the items indicated as of ~~January~~April 3130, 2013:

Contractual Obligations:	Total	Less than 1 year	1-3 years	4-5 years	More than 5 years
Lines of Credit	$2,~~137~~307,~~140~~843	$2,~~137~~307,~~140~~843	$0	$0	$0
Long-Term Debt-Investment Properties	14,~~474~~384,~~670~~087	~~365~~371,~~848~~689	7,~~305~~276,~~000~~909	~~581~~591,~~036~~117	6,~~222~~144,~~786~~372
Capital Leases	9783,~~425~~473	4749,~~442~~121	4934,~~983~~352	0	0
Debt Sub-total	$16,~~709~~775,~~235~~403	$2,~~550~~728,~~430~~653	$7,~~354~~311,~~983~~261	$~~581~~591,~~036~~117	$6,~~222~~144,~~786~~372
Fixed Rate Interest	6,~~683~~452,~~156~~553	~~909~~902,~~897~~376	1,~~767~~661,~~474~~367	~~901~~891,~~424~~343	32,~~104~~997,~~361~~467
Variable Rate Interest (1)	~~834~~900,~~227~~860	~~119~~128,~~175~~694	~~357~~386,~~526~~083	~~238~~257,~~351~~389	~~119~~128,~~175~~694
Interest Subtotal	$7,517,383	$1,029,072	$2,125,000	$1,139,775	$3,223,536
Interest Sub-total	$7,353,413	$1,031,070	$2,047,450	$1,148,732	$3,126,161
Pension Contribution Obligations (2)	~~279~~186,000	~~279~~186,000	0	0	0
Total Contractual Cash Obligations	$24,~~505~~314,~~618~~816	$3,~~858~~945,~~502~~723	$9,~~479~~358,~~983~~711	$1,~~720~~739,~~811~~849	$9,~~446~~270,~~322~~533

(1)

The variable rate interest is calculated based on the outstanding balances and the interest rate in effect as of ~~January~~April 3130, 2013.

(2)

The pension contribution obligations are for Fiscal 2013. Estimated funding obligations beyond the current fiscal year are not presented because the requirements fluctuate based on the performance of the plan assets, discount rate assumptions and demographics.

We currently anticipate that the funds needed for future operations and to implement our land development strategy will be satisfied through operating cash, borrowed funds, public offerings or private placements of debt or equity and reinvested profits from sales. We expect that with respect to land development, future construction will be conducted in phases, with the profits from each phase used to fund additional future construction.

Item 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Our exposure to market risk is limited primarily to the fluctuating interest rates associated with variable rate indebtedness. At ~~January~~April 3130, 2013, we had $2,~~137~~307,~~140~~843 of variable rate indebtedness, representing 1314% of our total debt outstanding, at an average rate of 5.50% (calculated as of ~~January~~April 3130, 2013). Our average interest rate is based on our operating line of credit facility and our market risk exposure fluctuates based on changes in underlying interest rates.

Exposure to market risk may also exist in our mortgages receivable issued in connection with land sales. Mortgages receivable are considered fully collectible by management and accordingly, no allowance for loan losses is considered necessary.

~~Item 4. CONTROLS AND PROCEDURES~~23

~~(a) Evaluation~~Item of4. ~~Disclosure~~CONTROLS ~~Controls~~AND ~~and Procedures.~~PROCEDURES

As of the end of the period covered by this report, we conducted an evaluation, under the supervision and with the participation of our management, including our Chief Executive Officer and Chief Financial Officer, of our disclosure controls and procedures (as defined in Rules 13a-15(e) 21and 15d-15(e) under the Exchange Act. Based on that evaluation, our Chief Executive Officer and Chief Financial Officer concluded that our disclosure controls and procedures as of the end of the period covered by this report have been designed and are functioning effectively to provide reasonable assurance that the information required to be disclosed in the reports that we file under the Securities Exchange Act of 1934, as amended, is recorded, processed, summarized and reported within the time periods specified in the Securities and Exchange Commission’s rules and is accumulated and communicated to our management, including the Companies’ principal executive and principal financial officer, or person performing similar functions, as appropriate to allow timely decisions regarding required disclosure. It should be noted that a control system, no matter how well designed and operated, cannot provide absolute assurance that the objectives of the control system are met. As a result, there can be no assurance that a control system will succeed in preventing all possible instances of error and fraud. The Companies’ disclosure controls and procedures are designed to provide reasonable assurance of achieving their objectives, and the conclusions of our Chief Executive Officer and Chief Financial Officer are made at the “reasonable assurance” level.

and reported within the time periods specified in the Securities and Exchange Commission’s rules and is accumulated and communicated to our management, including the Companies’ principal executive and principal financial officer, or person performing similar functions, as appropriate to allow timely decisions regarding required disclosure. It should be noted that a control system, no matter how well designed and operated, cannot provide absolute assurance that the objectives of the control system are met.(b) AsChange ~~a result, there can be no assurance that a control system will succeed~~ in ~~preventing~~Internal ~~all~~Control ~~possible~~over instances of error and fraud. The Companies’ disclosure controls and procedures are designed to provide reasonable assurance of achieving their objectives, and the conclusions of our Chief Executive Officer and Chief Financial ~~Officer are made at the “reasonable assurance” level~~Reporting.

~~(b) Change~~No change in ~~Internal~~the ~~Control~~Companies' internal control over ~~Financial~~financial ~~Reporting~~reporting occurred during the Companies’ most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, the Companies’ internal control over financial reporting.

NoPART ~~change~~II in- ~~the~~OTHER Companies' internal control over financial reporting occurred during the Companies’ most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, the Companies’ internal control over financial reporting.INFORMATION

~~PART~~Item II1. LEGAL ~~- OTHER INFORMATION~~PROCEEDINGS

~~Item~~The 1Companies are presently party to certain lawsuits arising in the ordinary course of their business. ~~LEGAL~~The ~~PROCEEDINGS~~Companies believe that none of their current legal proceedings will be material to their business, financial condition or results of operations.

~~The~~Item ~~Companies are presently party to certain lawsuits arising in the ordinary course of their business~~1A. ~~The~~RISK ~~Companies believe that none of their current legal proceedings will be material to their business, financial condition or results of operations.~~ FACTORS

~~Item~~No 1Aupdate. ~~RISK FACTORS~~

NoItem ~~update~~4. MINE SAFETY DISCLOSURES

~~Item~~Not 4applicable. ~~MINE SAFETY DISCLOSURES~~

~~Not~~Item ~~applicable~~6. EXHIBITS

- 22 -


Exhibit Number	Description
3.1	Restated Articles of Incorporation of Blue Ridge Real Estate Company (filed February 11, 2005 as Exhibit 3.1 to Form 10-K and incorporated herein by reference)
3.2	Restated Articles of Incorporation of Big Boulder Corporation (filed February 11, 2005 as Exhibit 3.2 to Form 10-K and incorporated herein by reference)
3.3	Bylaws of Blue Ridge Real Estate Company, as amended through August 12, 1997 (filed January 5, 2005 as Exhibit 3.3 to Form S-1 (File No. 333-121855) and incorporated herein by reference)
3.4	Bylaws of Big Boulder Corporation, as amended through August 12, 1997 (filed January 5, 2005 as Exhibit 3.3 to Form S-1 (File No. 333-121855) and incorporated herein by reference)
10.1	Fourth Amendment to Agreement of Sale, Phase 3, dated February 21, 2013, between Blue Ridge Real Estate Company and Hanson Aggregated BMC, Inc., Assignee of The Conservation Fund, for the purchase of 376 acres located in Thornhurst Township, Lackawanna County, Pennsylvania (filed February 25, 2013 as Exhibit 10.5 to Form 8-K and incorporated herein by reference).
10.2	Land Purchase Option, dated March 21, 2013 between Blue Ridge Real Estate Company and Pennsylvania Game Commission for the purchase of approximately 3,663 acres of land located in Buck and Bear Creek Townships, Luzerne County, Pennsylvania (filed March 25, 2013 as Exhibit 10.1 to Form 8-K and incorporated herein by reference).
10.3	Backstop Agreement, dated March 21, 2013 between Blue Ridge Real Estate Company and PPL Electric Utilities Corporation for the contingent purchase of approximately 1,557 acres of land located in Buck Township, Luzerne County, Pennsylvania (filed March 25, 2013 as Exhibit 10.2 to Form 8-K and incorporated herein by reference).
31.1*	Principal Executive Officer’s Rule 13a-14(a) Certification
31.2*	Principal Financial Officer’s Rule 13a-14(a) Certification
32.1*	Principal Executive Officer’s Section 1350 Certification
32.2*	Principal Financial Officer’s Section 1350 Certification
101.INS**	XBRL Instance Document
101.SCH**	XBRL Taxonomy Extension Schema Document
101.CAL**	XBRL Taxonomy Extension Calculation Linkbase Document
101.DEF**	XBRL Taxonomy Extension Definition Linkbase Document
101.LAB**	XBRL Taxonomy Extension Label Linkbase Document
101.PRE**	XBRL Taxonomy Extension Presentation Linkbase Document

~~Item~~* ~~6. EXHIBITS~~Filed herewith

Exhibit Number	Description
3.1	Restated Articles of Incorporation of Blue Ridge Real Estate Company (filed February 11, 2005 as Exhibit 3.1 to Form 10-K and incorporated herein by reference)
3.2	Restated Articles of Incorporation of Big Boulder Corporation (filed February 11, 2005 as Exhibit 3.2 to Form 10-K and incorporated herein by reference)
3.3	Bylaws of Blue Ridge Real Estate Company, as amended through August 12, 1997 (filed January 5, 2005 as Exhibit 3.3 to Form S-1 (File No. 333-121855) and incorporated herein by reference)
3.4	Bylaws of Big Boulder Corporation, as amended through August 12, 1997 (filed January 5, 2005 as Exhibit 3.3 to Form S-1 (File No. 333-121855) and incorporated herein by reference)
4.1	Revised Specimen Unit Certificate Evidencing Shares of Registrants’ Common Stock (filed August 28, 1990 as an Exhibit to Form 10-K and incorporated herein by reference)
4.2	Security Combination Agreement between Blue Ridge Real Estate Company and Big Boulder Corporation (filed September 23, 1967 as Exhibit b-3 to Form 10 and incorporated herein by reference)
10.1	Agreement of Sale, Phase 3, dated February 17, 2011 between Blue Ridge Real Estate Company and The Conservation Fund for the purchase of 376 acres located in Thornhurst Township, Lackawanna County, Pennsylvania (filed February 18, 2011 as Exhibit 10.1 to Form 8-K and incorporated herein by reference).
10.2	First Amendment to Agreement of Sale, Phase 3, dated August 15, 2011 between Blue Ridge Real Estate Company and The Conservation Fund for the purchase of 376 acres located in Thornhurst Township, Lackawanna County, Pennsylvania (filed August 18, 2011 as Exhibit 10.2 to Form 8-K and incorporated herein by reference).
10.3	Second Amendment to Agreement of Sale, Phase 3, dated February 20, 2012, between Blue Ridge Real Estate Company and The Conservation Fund for the purchase of 376 acres located in Thornhurst Township, Lackawanna County, Pennsylvania (filed February 24, 2012 as Exhibit 10.3 to Form 8-K and incorporated herein by reference).
10.4	Third Amendment to Agreement of Sale, Phase 3, dated September 6, 2012, between Blue Ridge Real Estate Company and The Conservation Fund for the purchase of 376 acres located in Thornhurst Township, Lackawanna County, Pennsylvania (filed September 7, 2012 as Exhibit 10.4 to Form 8-K and incorporated herein by reference).
10.5	Fourth Amendment to Agreement of Sale, Phase 3, dated February 21, 2013, between Blue Ridge Real Estate Company and Hanson Aggregated BMC, Inc., Assignee of The Conservation Fund, for the purchase of 376 acres located in Thornhurst Township, Lackawanna County, Pennsylvania (filed February 25, 2013 as Exhibit 10.5 to Form 8-K and incorporated herein by reference).
31.1*	Principal Executive Officer’s Rule 13a-14(a) Certification
31.2*	Principal Financial Officer’s Rule 13a-14(a) Certification
32.1*	Principal Executive Officer’s Section 1350 Certification
32.2*	Principal Financial Officer’s Section 1350 Certification
101.INS**	XBRL Instance Document
101.SCH**	XBRL Taxonomy Extension Schema Document
101.CAL**	XBRL Taxonomy Extension Calculation Linkbase Document
101.DEF**	XBRL Taxonomy Extension Definition Linkbase Document
101.LAB**	XBRL Taxonomy Extension Label Linkbase Document
101.PRE**	XBRL Taxonomy Extension Presentation Linkbase Document

**Furnished herewith

* Filed herewith25

** Furnished herewithSIGNATURES

-Pursuant 23to -the requirements of the Securities Exchange Act of 1934, the Registrants have duly caused this report to be signed on their behalf by the undersigned thereunto duly authorized:

~~SIGNATURES~~BLUE RIDGE REAL ESTATE COMPANY

~~Pursuant~~BIG toBOULDER ~~the requirements of the Securities Exchange Act of 1934, the Registrants have duly caused this report to be signed on their behalf by the undersigned thereunto duly authorized:~~CORPORATION

~~BLUE RIDGE REAL ESTATE COMPANY~~(Registrants)

~~BIG~~Dated: June ~~BOULDER~~14, ~~CORPORATION~~2013

~~(Registrants)~~/s/ Bruce Beaty

~~Dated: March~~Bruce ~~18, 2013~~Beaty

~~/s/~~President ~~Bruce~~and ~~Beaty~~Chief Executive Officer

~~Bruce~~Dated: June ~~Beaty~~14, 2013

~~Chief~~/s/ ~~Executive~~Cynthia ~~Officer~~A. ~~and~~Van ~~President~~Horn

~~Dated: March~~Cynthia ~~18,~~A. ~~2013~~Van Horn

~~/s/~~Chief ~~Cynthia~~Financial A.Officer ~~Van~~and ~~Horn~~Treasurer

~~Cynthia~~(Principal A.Financial ~~Van Horn~~Officer)

~~Chief Financial Officer and Treasurer~~26

~~(Principal~~EXHIBIT ~~Financial Officer)~~INDEX

- 25 -


Exhibit Number	Description
3.1	Restated Articles of Incorporation of Blue Ridge Real Estate Company (filed February 11, 2005 as Exhibit 3.1 to Form 10-K and incorporated herein by reference)
3.2	Restated Articles of Incorporation of Big Boulder Corporation (filed February 11, 2005 as Exhibit 3.2 to Form 10-K and incorporated herein by reference)
3.3	Bylaws of Blue Ridge Real Estate Company, as amended through August 12, 1997 (filed January 5, 2005 as Exhibit 3.3 to Form S-1 (File No. 333-121855) and incorporated herein by reference)
3.4	Bylaws of Big Boulder Corporation, as amended through August 12, 1997 (filed January 5, 2005 as Exhibit 3.3 to Form S-1 (File No. 333-121855) and incorporated herein by reference)
10.1	Fourth Amendment to Agreement of Sale, Phase 3, dated February 21, 2013, between Blue Ridge Real Estate Company and Hanson Aggregated BMC, Inc., Assignee of The Conservation Fund, for the purchase of 376 acres located in Thornhurst Township, Lackawanna County, Pennsylvania (filed February 25, 2013 as Exhibit 10.5 to Form 8-K and incorporated herein by reference).
10.2	Land Purchase Option, dated March 21, 2013 between Blue Ridge Real Estate Company and Pennsylvania Game Commission for the purchase of approximately 3,663 acres of land located in Buck and Bear Creek Townships, Luzerne County, Pennsylvania (filed March 25, 2013 as Exhibit 10.1 to Form 8-K and incorporated herein by reference).
10.3	Backstop Agreement, dated March 21, 2013 between Blue Ridge Real Estate Company and PPL Electric Utilities Corporation for the contingent purchase of approximately 1,557 acres of land located in Buck Township, Luzerne County, Pennsylvania (filed March 25, 2013 as Exhibit 10.2 to Form 8-K and incorporated herein by reference).
31.1*	Principal Executive Officer’s Rule 13a-14(a) Certification
31.2*	Principal Financial Officer’s Rule 13a-14(a) Certification
32.1*	Principal Executive Officer’s Section 1350 Certification
32.2*	Principal Financial Officer’s Section 1350 Certification
101.INS**	XBRL Instance Document
101.SCH**	XBRL Taxonomy Extension Schema Document
101.CAL**	XBRL Taxonomy Extension Calculation Linkbase Document
101.DEF**	XBRL Taxonomy Extension Definition Linkbase Document
101.LAB**	XBRL Taxonomy Extension Label Linkbase Document
101.PRE**	XBRL Taxonomy Extension Presentation Linkbase Document

~~EXHIBIT~~* ~~INDEX~~Filed herewith

Exhibit Number	Description
3.1	Restated Articles of Incorporation of Blue Ridge Real Estate Company (filed February 11, 2005 as Exhibit 3.1 to Form 10-K and incorporated herein by reference)
3.2	Restated Articles of Incorporation of Big Boulder Corporation (filed February 11, 2005 as Exhibit 3.2 to Form 10-K and incorporated herein by reference)
3.3	Bylaws of Blue Ridge Real Estate Company, as amended through August 12, 1997 (filed January 5, 2005 as Exhibit 3.3 to Form S-1 (File No. 333-121855) and incorporated herein by reference)
3.4	Bylaws of Big Boulder Corporation, as amended through August 12, 1997 (filed January 5, 2005 as Exhibit 3.3 to Form S-1 (File No. 333-121855) and incorporated herein by reference)
4.1	Revised Specimen Unit Certificate Evidencing Shares of Registrants’ Common Stock (filed August 28, 1990 as an Exhibit to Form 10-K and incorporated herein by reference)
4.2	Security Combination Agreement between Blue Ridge Real Estate Company and Big Boulder Corporation (filed September 23, 1967 as Exhibit b-3 to Form 10 and incorporated herein by reference)
10.1	Agreement of Sale, Phase 3, dated February 17, 2011 between Blue Ridge Real Estate Company and The Conservation Fund for the purchase of 376 acres located in Thornhurst Township, Lackawanna County, Pennsylvania (filed February 18, 2011 as Exhibit 10.1 to Form 8-K and incorporated herein by reference).
10.2	First Amendment to Agreement of Sale, Phase 3, dated August 15, 2011 between Blue Ridge Real Estate Company and The Conservation Fund for the purchase of 376 acres located in Thornhurst Township, Lackawanna County, Pennsylvania (filed August 18, 2011 as Exhibit 10.2 to Form 8-K and incorporated herein by reference).
10.3	Second Amendment to Agreement of Sale, Phase 3, dated February 20, 2012, between Blue Ridge Real Estate Company and The Conservation Fund for the purchase of 376 acres located in Thornhurst Township, Lackawanna County, Pennsylvania (filed February 24, 2012 as Exhibit 10.3 to Form 8-K and incorporated herein by reference).
10.4	Third Amendment to Agreement of Sale, Phase 3, dated September 6, 2012, between Blue Ridge Real Estate Company and The Conservation Fund for the purchase of 376 acres located in Thornhurst Township, Lackawanna County, Pennsylvania (filed September 7, 2012 as Exhibit 10.4 to Form 8-K and incorporated herein by reference).
10.5	Fourth Amendment to Agreement of Sale, Phase 3, dated February 21, 2013, between Blue Ridge Real Estate Company and Hanson Aggregated BMC, Inc., Assignee of The Conservation Fund, for the purchase of 376 acres located in Thornhurst Township, Lackawanna County, Pennsylvania (filed February 25, 2013 as Exhibit 10.5 to Form 8-K and incorporated herein by reference).
31.1*	Principal Executive Officer’s Rule 13a-14(a) Certification
31.2*	Principal Financial Officer’s Rule 13a-14(a) Certification
32.1*	Principal Executive Officer’s Section 1350 Certification
32.2*	Principal Financial Officer’s Section 1350 Certification
101.INS**	XBRL Instance Document
101.SCH**	XBRL Taxonomy Extension Schema Document
101.CAL**	XBRL Taxonomy Extension Calculation Linkbase Document
101.DEF**	XBRL Taxonomy Extension Definition Linkbase Document
101.LAB**	XBRL Taxonomy Extension Label Linkbase Document
101.PRE**	XBRL Taxonomy Extension Presentation Linkbase Document

**Furnished herewith

* Filed herewith27

** Furnished herewith

- 27 -


COMBINED STATEMENTS OF CASH FLOWS FOR THE SIX MONTHS ENDED APRIL 30, 2013 and 2012 (UNAUDITED)
	Six Months Ended
	04/30/13	04/30/12
Cash Flows Provided By (Used In) Operating Activities:
Net loss	($3,500,048)	($1,006,848)
Adjustments to reconcile net loss to net cash provided by (used in) operating activities:
Depreciation and amortization	581,522	629,669
Impairment	3,700,000	70,700
Deferred income taxes	(1,803,000)	(518,000)
Gain on sale of assets	(3,100)	(9,402)
Changes in operating assets and liabilities:
Cash held in escrow	62,590	(99,720)
Accounts receivable and mortgages receivable	23,063	(333,744)
Prepaid expenses and other current assets	193,542	1,147,169
Land and land development costs	(9,630)	31,085
Long-lived assets held for sale	612,851	1,196,872
Accounts payable and accrued liabilities	136,100	(567,579)
Deferred income	121,539	144,366
Net cash provided by operating activities	115,429	684,568

Cash Flows Provided By (Used In) Investing Activities:
Proceeds from disposition of assets	3,100	2,287,187
Additions to properties	(134,852)	(58,199)
Payments received under direct financing lease arrangements	0	7,788,195
Net cash provided by (used in) investing activities	(131,752)	10,017,183

Cash Flows Provided By (Used In) Financing Activities:
Proceeds from debt	1,202,761	1,782,909
Payment of debt	(1,307,774)	(12,600,587)
Net cash used in financing activities	(105,013)	(10,817,678)
Net decrease in cash and cash equivalents	(121,336)	(115,927)
Cash and cash equivalents, beginning of period	497,409	377,158
Cash and cash equivalents, end of period	$376,073	$261,231

FOR THE THREE MONTHS ENDED
JANUARY 31, 2013 and 2012
(UNAUDITED)	01/31/13	01/31/12
Cash Flows Provided By (Used In) Operating Activities:
Net loss	($569,584)	($503,429)
Adjustments to reconcile net loss to net cash provided by (used in) operating activities:
Depreciation and amortization	291,211	318,342
Deferred income taxes	(293,000)	(260,000)
Gain on sale of assets	0	(9,402)
Changes in operating assets and liabilities:
Cash held in escrow	25,935	(150,711)
Accounts receivable and mortgages receivable	37,144	(257,283)
Prepaid expenses and other current assets	197,236	1,112,135
Land and land development costs	(3,932)	(5,414)
Long-lived assets held for sale	382,245	592,098
Accounts payable and accrued liabilities	92,838	(560,980)
Deferred revenue	(31,706)	(10,055)
Net cash provided by operating activities	128,387	265,301
Cash Flows Provided By (Used In) Investing Activities:
Proceeds from disposition of assets	0	2,095,552
Additions to properties	(35,262)	(44,318)
Payments received under direct financing lease arrangements	0	7,788,195
Net cash (used in) provided by investing activities	(35,262)	9,839,429
Cash Flows Provided By (Used In) Financing Activities:
Proceeds from debt	539,789	1,153,497
Payment of debt	(710,970)	(11,275,310)
Net cash used in financing activities	(171,181)	(10,121,813)
Net decrease in cash and cash equivalents	(78,056)	(17,083)
Cash and cash equivalents, beginning of period	497,409	377,158
Cash and cash equivalents, end of period	$419,353	$360,075

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