FORM 10-K
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x
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ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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¨
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TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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TEJON RANCH CO.
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(Exact name of registrant as specified in its charter)
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Delaware
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77-0196136
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(State or other jurisdiction of
incorporation or organization)
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(I.R.S. Employer
Identification No.)
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Title of Each Class
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Name of Exchange on Which Registered
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Common Stock
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New York Stock Exchange
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Large accelerated filer
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¨
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Accelerated filer
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x
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Non-accelerated filer
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¨
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Smaller reporting company
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x
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Emerging growth company
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¨
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Year Ended December 31,
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||||||||||
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2018
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2017
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2016
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||||||
Revenues and Other Income
|
|
|
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|
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||||||
Real Estate—Commercial/Industrial (1)
|
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$
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8,970
|
|
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$
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9,001
|
|
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$
|
9,840
|
|
Mineral Resources
|
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14,395
|
|
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5,983
|
|
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14,153
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|||
Farming
|
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18,563
|
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16,434
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18,648
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|||
Ranch operations
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3,691
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|
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3,837
|
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3,338
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|||
Segment revenues
|
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45,619
|
|
|
35,255
|
|
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45,979
|
|
|||
Gain on sale of real estate
|
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—
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—
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|
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1,044
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|||
Investment income
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1,344
|
|
|
462
|
|
|
457
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|||
Other loss
|
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(59
|
)
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(275
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)
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(581
|
)
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|||
Revenues and other income
|
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$
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46,904
|
|
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$
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35,442
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$
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46,899
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Equity in earnings of unconsolidated joint ventures
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3,834
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4,227
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7,098
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|||
Total revenues and other income (2)
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$
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50,738
|
|
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$
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39,669
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$
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53,997
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Segment Profits (Losses) and Net Income
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||||||
Real Estate—Commercial/Industrial (1)
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$
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2,724
|
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$
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2,472
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$
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2,740
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Real Estate—Resort/Residential
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(1,530
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)
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(1,955
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)
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(1,630
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)
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|||
Mineral Resources
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8,172
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3,019
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6,357
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|||
Farming
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2,535
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233
|
|
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(25
|
)
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|||
Ranch operations
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(1,760
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)
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(1,574
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)
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(2,396
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)
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|||
Segment profits (3)
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10,141
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2,195
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5,046
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|||
Gain on sale of real estate
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—
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—
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1,044
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|||
Investment income
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1,344
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462
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457
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|||
Other loss
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(59
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)
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(275
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)
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(581
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)
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Corporate expenses
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(9,705
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)
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(9,713
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)
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(11,811
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)
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Income (loss) from operations before equity in earnings of unconsolidated joint ventures
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1,721
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(7,331
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)
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(5,845
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)
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|||
Equity in earnings of unconsolidated joint ventures
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3,834
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4,227
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7,098
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Income (loss) before income taxes
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5,555
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(3,104
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)
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1,253
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|||
Income tax expense (benefit)
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1,320
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(1,283
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)
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496
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|||
Net income (loss)
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4,235
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(1,821
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)
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757
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|||
Net loss attributable to non-controlling interest
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(20
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)
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(24
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)
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(43
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)
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Net income (loss) attributable to common stockholders
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$
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4,255
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$
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(1,797
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)
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$
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800
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Identifiable Assets by Segment
(4)
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Real estate—commercial/industrial
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$
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65,929
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$
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63,065
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$
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65,290
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Real estate—resort/residential
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273,620
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258,697
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243,963
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Mineral Resources
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54,144
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48,305
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45,066
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Farming
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40,835
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36,317
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36,895
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Ranch operations
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2,973
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3,625
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3,893
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Corporate
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91,547
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108,190
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44,434
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Total assets
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$
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529,048
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$
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518,199
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$
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439,541
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•
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MV, which has entitlement approvals and approved tentative tract map for the first four phases of residential development;
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•
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Centennial, which has zoning and land use designation within the Antelope Valley Area Plan, or AVAP, and the Los Angeles County General Plan, and is completing the specific plan process in LA County. The AVAP is designed to guide future development and conservation in the northern-most region of unincorporated Los Angeles County. Centennial is included in the AVAP as part of the west Economic Opportunity Area, or EOA, where future development would be directed. In December 2018, the Los Angeles County Board of Supervisors' voted in favor of the LA County Specific Plan, taking an additional step toward approving the community; and
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•
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Grapevine, which is on land owned within Kern County received entitlement approvals in 2016. On December 11, 2018, the court ruled we have to amend our EIR by preparing supplemental environmental documentation to further analyze the Grapevine project’s internal capture rate (ICR), which is the percent of vehicle trips remaining within the project. The supplemental environmental documentation will include updated traffic, air quality, greenhouse gas emissions, noise, public health and growth inducing impact analyses. As a part of the process Kern County will work with us to correct the EIR and re-approve the project. See Note 14, (Commitments and Contingencies) for further discussion.
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Community:
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Mountain Village
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Grapevine
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Centennial
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Resort
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Location:
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Kern County
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Kern County
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Los Angeles County
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Residential
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Project Status
1
:
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Entitled
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Re-Entitlement
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Pending Approval
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Total
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Entitlement Area (acres):
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26,417
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8,010
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12,323
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46,750
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Housing Units:
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3,450
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12,000
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19,333
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34,783
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Commercial Development (sqft)
2
:
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160,000
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5,100,000
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10,100,000
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15,360,000
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Open Areas (acres):
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21,335
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3,367
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5,624
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30,326
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Costs to Date
3
:
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$137,571
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$31,175
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$100,311
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$269,057
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Name
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Office
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Held since
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Age
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Gregory S. Bielli
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President and Chief Executive Officer, Director
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2013
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58
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Allen E. Lyda
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Executive Vice President and Chief Operating Officer and Corporate Treasurer
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2019
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61
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Hugh McMahon
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Executive Vice President, Real Estate
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2014
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52
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Joseph N. Rentfro
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Executive Vice President, Real Estate
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2015
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50
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Robert D. Velasquez
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Senior Vice President, Finance, and Chief Financial Officer
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2019
|
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52
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Michael R.W. Houston
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Senior Vice President, General Counsel
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2016
|
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44
|
•
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Difficulty in securing adequate water resources for future developments;
|
•
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Natural risks, such as geological and soil problems, earthquakes, fire, heavy rains and flooding, and heavy winds;
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•
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Shortages of qualified trades people;
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•
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Reliance on local contractors, who may be inadequately capitalized;
|
•
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Shortages of materials; and
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•
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Increases in the cost of materials.
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•
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Employment levels
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•
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Availability of financing
|
•
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Interest rates
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•
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Consumer confidence
|
•
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Demand for the developed product, whether residential or industrial
|
•
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Supply of similar product, whether residential or industrial
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ITEM 5.
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MARKET FOR REGISTRANT'S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES
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2018
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|
2017
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||||||||||||
Quarter
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High
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Low
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High
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Low
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||||||||
First
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$
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24.58
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$
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20.21
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$
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26.04
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$
|
20.58
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Second
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$
|
26.25
|
|
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$
|
22.43
|
|
|
$
|
24.18
|
|
|
$
|
19.90
|
|
Third
|
|
$
|
24.57
|
|
|
$
|
21.17
|
|
|
$
|
21.94
|
|
|
$
|
19.67
|
|
Fourth
|
|
$
|
21.82
|
|
|
$
|
16.04
|
|
|
$
|
22.81
|
|
|
$
|
18.59
|
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ITEM 7.
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MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
|
•
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Discount rates;
|
•
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Retirement rates;
|
•
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Expected contributions;
|
•
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Inflation;
|
•
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Expected return on plan assets; and
|
•
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Mortality rates.
|
•
|
Level 1 – Valuation is based on quoted prices in active markets for identical assets and liabilities.
|
•
|
Level 2 – Valuation is determined from quoted prices for similar assets and liabilities in active markets, quoted prices for identical or similar instruments in markets that are not active, or by model-based techniques in which all significant inputs are observable in the market.
|
•
|
Level 3 – Valuation is derived from model-based techniques in which at least one significant input is unobservable and based on our own estimates about the assumptions that market participants would use to value the asset or liability.
|
•
|
For Centennial, the Board of Supervisors in December 2018, by a vote of 4-1, affirmed the recommendation of the Los Angeles County Regional Planning Commission and Department of Regional Planning that Centennial be approved.
|
•
|
For Grapevine, we are currently working with Kern County to defend litigation related to the approved EIR. For a more complete discussion of the litigation and approval process, please see Note 14 (Commitments and Contingencies) to the Notes to Consolidated Financial Statements.
|
•
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For MV, we have a fully entitled project and received approval of Tentative Tract Map 1 for our first four phases of development. The timing of MV development in the coming years will be dependent on the strength of both the economy and the real estate market including both primary and second home markets. In moving the project forward, we will focus on the preparation of engineering leading to the final map for the first phases of MV, consumer and market research studies and fine tuning of development business plans as well as defining the possible capital funding sources for this development. We also obtained approval on the Farm Village commercial site plan from Kern County. Farm Village will serve as the commercial center and community gathering place for MV residents and visitors as well as the gateway to MV.
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|
|
2018
|
|
2017
|
|
2016
|
||||||
Oil and gas
|
|
|
|
|
|
|
||||||
Oil production (barrels)
|
|
250,000
|
|
|
263,000
|
|
|
301,000
|
|
|||
Average price per barrel
|
|
$
|
67.00
|
|
|
$
|
45.00
|
|
|
$
|
37.00
|
|
Blended royalty rate
|
|
13.4
|
%
|
|
13.7
|
%
|
|
13.7
|
%
|
|||
Natural gas production (millions of cubic feet)
|
|
241,000
|
|
|
209,000
|
|
|
238,000
|
|
|||
Average price per thousand cubic feet
|
|
$
|
0.76
|
|
|
$
|
0.74
|
|
|
$
|
0.56
|
|
Blended royalty rate
|
|
13.4
|
%
|
|
14.5
|
%
|
|
14.4
|
%
|
|||
|
|
|
|
|
|
|
||||||
Water
|
|
|
|
|
|
|
||||||
Water sold in acre-feet
|
|
9,442
|
|
|
939
|
|
|
7,285
|
|
|||
Average price per acre-feet
|
|
$
|
968
|
|
|
$
|
1,181
|
|
|
$
|
1,317
|
|
|
|
|
|
|
|
|
||||||
Cement
|
|
|
|
|
|
|
||||||
Tons sold
|
|
1,154,000
|
|
|
1,063,000
|
|
|
909,000
|
|
|||
Average price per ton
|
|
$
|
1.47
|
|
|
$
|
1.52
|
|
|
$
|
1.41
|
|
|
|
|
|
|
|
|
||||||
Rock/Aggregate
|
|
|
|
|
|
|
||||||
Tons sold
|
|
1,168,000
|
|
|
1,222,000
|
|
|
1,397,000
|
|
|||
Average price per ton
|
|
$
|
0.98
|
|
|
$
|
0.88
|
|
|
$
|
0.85
|
|
•
|
Revenues from our mineral resources segment
increased
$8,412,000
, or
141%
, to
$14,395,000
in
2018
when compared to
$5,983,000
in
2017
. This increase was primarily attributed to water sales of $9,142,000 in
2018
, representing a $7,888,000 increase over last year, as a result of moderate drought conditions in Kern County. The improved water sales accordingly
increased
mineral resources expenses largely due to the cost of sales of water by
$3,259,000
.
|
•
|
We experienced improvements for oil and gas royalties as a result of improved oil prices. Please refer to above table for current and historical production volume and pricing.
|
•
|
Revenues from our mineral resources segment decreased $8,170,000, or 58%, to $5,983,000 in 2017 compared to $14,153,000 in 2016. During the 2016/2017 winter, California experienced above normal rain fall and snow levels, resulting in a reduction in water market activity throughout the state, adversely impacting water sales opportunities. This resulted in an $8,347,000 decline in water sales. The reduced water sales accordingly decreased mineral resources expenses associated with the cost of sales of water by $4,832,000.
|
•
|
We experienced improvements in cement production as a result of increased demand and pricing during 2017 compared to 2016. The improvement in shipments was due to an increase in road construction activity as compared to the prior years.
|
•
|
Despite falling production, we experienced improvements for oil and gas royalties as a result of improved oil prices. Please refer to above table for current and historical production volume and pricing.
|
|
|
December 31, 2018
|
|
|
December 31, 2017
|
|
|
Change
|
|||||||||||||||||||||||||||
($ in thousands)
|
|
Revenue
|
|
Quantity Sold
2
|
|
Average
Price |
|
|
Revenue
|
|
Quantity Sold
2
|
|
Average
Price |
|
|
Revenue
|
|
Quantity Sold
2
|
|
Average
Price |
|||||||||||||||
ALMONDS (lbs.)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Current year crop
|
|
$
|
4,476
|
|
|
1,717
|
|
|
$
|
2.61
|
|
|
|
$
|
5,221
|
|
|
2,033
|
|
|
$
|
2.57
|
|
|
|
$
|
(745
|
)
|
|
(316
|
)
|
|
$
|
0.04
|
|
Prior crop years
|
|
1,234
|
|
|
412
|
|
|
$
|
3.00
|
|
|
|
729
|
|
|
315
|
|
|
2.31
|
|
|
|
505
|
|
|
97
|
|
|
0.69
|
|
|||||
Prior crop price adjustment
|
|
—
|
|
|
|
|
|
|
|
352
|
|
|
|
|
|
|
|
(352
|
)
|
|
|
|
|
||||||||||||
Signing bonus
|
|
34
|
|
|
|
|
|
|
|
25
|
|
|
|
|
|
|
|
9
|
|
|
|
|
|
||||||||||||
Subtotal Almonds
1
|
|
$
|
5,744
|
|
|
2,129
|
|
|
$
|
2.68
|
|
|
|
$
|
6,327
|
|
|
2,348
|
|
|
$
|
2.53
|
|
|
|
$
|
(583
|
)
|
|
(219
|
)
|
|
$
|
0.15
|
|
PISTACHIOS (lbs.)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Current year crop
|
|
$
|
7,251
|
|
|
3,615
|
|
|
$
|
2.01
|
|
|
|
$
|
1,288
|
|
|
643
|
|
|
$
|
2.00
|
|
|
|
$
|
5,963
|
|
|
2,972
|
|
|
$
|
0.01
|
|
Prior crop years
|
|
518
|
|
|
120
|
|
|
4.32
|
|
|
|
1,007
|
|
|
247
|
|
|
4.08
|
|
|
|
(489
|
)
|
|
(127
|
)
|
|
0.24
|
|
||||||
Prior crop price adjustment
|
|
111
|
|
|
|
|
|
|
|
1,452
|
|
|
|
|
|
|
|
(1,341
|
)
|
|
|
|
|
||||||||||||
Crop Insurance
|
|
—
|
|
|
|
|
|
|
|
776
|
|
|
|
|
|
|
|
(776
|
)
|
|
|
|
|
||||||||||||
Subtotal Pistachios
1
|
|
$
|
7,880
|
|
|
3,735
|
|
|
$
|
2.08
|
|
|
|
$
|
4,523
|
|
|
890
|
|
|
$
|
2.58
|
|
|
|
$
|
3,357
|
|
|
2,845
|
|
|
$
|
(0.50
|
)
|
WINE GRAPES (tons)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Current year crop
|
|
$
|
3,683
|
|
|
14
|
|
|
$
|
263.07
|
|
|
|
$
|
4,131
|
|
|
15
|
|
|
$
|
275.40
|
|
|
|
$
|
(448
|
)
|
|
(1
|
)
|
|
$
|
(12.33
|
)
|
Crop Insurance
|
|
—
|
|
|
|
|
|
|
|
$
|
—
|
|
|
|
|
|
|
|
—
|
|
|
|
|
|
|||||||||||
Subtotal Wine Grapes
|
|
$
|
3,683
|
|
|
14
|
|
|
$
|
263.07
|
|
|
|
$
|
4,131
|
|
|
15
|
|
|
$
|
275.40
|
|
|
|
$
|
(448
|
)
|
|
(1
|
)
|
|
$
|
(12.33
|
)
|
Other
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Hay
|
|
$
|
297
|
|
|
|
|
|
|
|
$
|
456
|
|
|
|
|
|
|
|
$
|
(159
|
)
|
|
|
|
|
|
||||||||
Other farming revenues
|
|
$
|
959
|
|
|
|
|
|
|
|
$
|
997
|
|
|
|
|
|
|
|
$
|
(38
|
)
|
|
|
|
|
|
||||||||
Total farming revenues
|
|
$
|
18,563
|
|
|
|
|
|
|
|
$
|
16,434
|
|
|
|
|
|
|
|
$
|
2,129
|
|
|
|
|
|
|||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
1
Average price calculation reflects sale of almond and pistachio crops during the calendar reported year exclusive of any price adjustments.
|
|||||||||||||||||||||||||||||||||||
2
Almond and pistachio units are presented in thousands of pounds while wine grapes are presented in thousands of tons.
|
•
|
During
2018
, farming revenues
increased
$2,129,000
, or
13%
, from $
16,434,000
in
2017
to $
18,563,000
in
2018
. When compared to 2017, pistachio revenues increased
$3,357,000
resulting from record high pistachio yields.
|
•
|
Almond revenues decreased
$583,000
due to lower almond crop yields that was driven by a combination of unfavorable weather conditions along with a 165 acres reduction in the number of acres in production. The reduction was the result of the Company's decision to redevelop existing almond units.
|
•
|
Farming expenses
decreased
$173,000
, or
1%
, to
$16,028,000
when compared to
$16,201,000
in
2017
. The decrease was primarily attributed to reduced cost allocations to all crops.
|
•
|
During 2017, farming revenues decreased $2,214,000 from $18,648,000 in 2016 to $16,434,000 in 2017. When compared to 2016, pistachio revenues decreased $1,676,000. In comparison to 2016, which was a near record year in terms of yield, fiscal 2017 was an alternate down bearing year for pistachios. Additionally, the warm winter reduced the number of hours the trees were dormant. We experienced similarly low yields in 2015 as a result of the mild 2015 winter. The Company purchases crop insurance to mitigate weather-related reductions in crop production, which mitigated $776,000 of total crop costs.
|
•
|
Almond revenues decreased $1,046,000 as a result of both commodity pricing and overall units sold. Given the timing of 2017 crop sales, management carried forward 472,541 pounds to sell in future periods. In comparison, the Company carried forward 338,845 pounds in 2016.
|
•
|
Farming expenses decreased $2,472,000, or 13% during 2017 compared to 2016. In 2017, we had reduced water costs of $1,584,000 when compared to 2016. The decrease is attributed to heavy rains during the 2017 winter along with credits received from the local water district, through the SWP. Despite the reduced revenues discussed above, reduced water and farming costs increased farm operating profits by $258,000 when compared to 2016.
|
•
|
We experienced reduced cost of sales for our wine grapes and almonds of $342,000 and $751,000, respectively, as a result of reduced cultural costs largely tied to lower weed and pest control costs.
|
•
|
Despite seeing a 3.7% increase in sales per occupied square foot and an 8.3% increase in monthly sales per vehicle, equity in earnings from our TRCC/Rock Outlet joint venture decreased
$1,150,000
. The decrease was primarily attributed to accelerating amortization of lease intangibles driven by removing poor performing tenants along with modifying lease terms to reflect the current brick and mortar retail environment. The Outlets at Tejon is continually identifying new and desirable tenants to better serve a wider demographic. In 2018, the Outlets at Tejon attracted new tenants such as Kate Spade, Bath and Body Works, and Journeys.
|
•
|
There was a
$448,000
decrease in our share of earnings from our TA/Petro joint venture. The decline was driven by lower fuel margins of 6.7% when compared to the prior year. Comparative fuel sales data are as follow:
|
◦
|
Diesel sales volumes were 16.6 million and 16.4 million gallons, or 1.1% increase, as of
December 31, 2018
and
2017
, respectively.
|
◦
|
Gasoline sales volumes were 13.9 million and 13.7 million gallons, or 2.0% increase, as of
December 31, 2018
and
2017
, respectively.
|
•
|
We incurred a $250,000 loss on our TRC-MRC 1 joint venture due to the fact that it was not fully occupied until the fourth quarter.
|
•
|
The above decreases in equity in earnings were partially offset by an increase in equity in earnings of TRC-MRC 2, a joint venture formed with Majestic in 2016. Equity in earnings improved
$1,518,000
in 2018 given that throughout 2017, TRC-MRC 2 incurred significant non-cash GAAP accounting losses that did not reoccur in 2018.
|
•
|
There was a $995,000 decrease in our share of earnings from our TA/Petro joint venture. The decline was driven by increased operating costs and depreciation associated with new offerings at TA/Petro, a one time charge of $200,000 related to a workers' compensation claim, and a decline in gas fuel margins.
|
•
|
There was a $989,000 decrease in our share of earnings from our TRCC/Rock Outlet joint venture. The decrease was attributable to write-off of tenant allowances and other leasing costs associated with lease terminations. The departing tenants have struggled nationally in recent years as a result of the retail slump and do not represent the overall performance of The Outlets at Tejon.
|
◦
|
During 2017, sales per occupied square foot increased 13% as compared to 2016 as a result of increased tour bus traffic and improved conversion rates from shoppers. The conversion rate is the percentage of users who take a desired action. Operationally, The Outlets at Tejon is continually identifying new and desirable tenants to better serve its target demographic.
|
◦
|
During the second quarter, Express, a nationally recognized brand focusing on men's and women's fashion commenced operations occupying a space approximating 7,828 square feet. On July 14, 2017, TRCC/Rock Outlets executed a lease with Old Navy for a space approximating 12,500 square feet. On July 21, 2017, Samsonite, a worldwide leader in superior travel bags and luggage, took possession of a vacated unit and immediately commenced operations.
|
•
|
TRC-MRC 2, a joint venture which was formed during the third quarter of 2016, had an additional $839,000 loss as compared to 2016. The increase in loss was driven by non-cash GAAP losses stemming from purchase accounting adjustments, despite generating positive net operating income. Please refer to "Non-GAAP Measures" for further financial discussion on our joint ventures.
|
($ in thousands)
|
|
2018
|
|
2017
|
|
2016
|
||||||
Operating activities
|
|
$
|
14,354
|
|
|
$
|
9,830
|
|
|
$
|
5,585
|
|
Investing activities
|
|
$
|
(13,246
|
)
|
|
$
|
(68,214
|
)
|
|
$
|
(10,242
|
)
|
Financing activities
|
|
$
|
(5,307
|
)
|
|
$
|
77,233
|
|
|
$
|
3,985
|
|
|
Payments Due by Period
|
||||||||||||||||||
($ in thousands)
|
Total
|
|
Less than a year
|
|
1-3 years
|
|
3-5 years
|
|
More than 5 years
|
||||||||||
Contractual Obligations:
|
|
|
|
|
|
|
|
|
|
||||||||||
Estimated water payments
|
$
|
260,078
|
|
|
$
|
10,156
|
|
|
$
|
18,527
|
|
|
$
|
19,175
|
|
|
$
|
212,220
|
|
Long-term debt
|
65,915
|
|
|
4,018
|
|
|
8,549
|
|
|
9,321
|
|
|
44,027
|
|
|||||
Interest on long-term debt
|
12,719
|
|
|
2,613
|
|
|
4,710
|
|
|
3,971
|
|
|
1,425
|
|
|||||
Cash contract commitments
|
9,221
|
|
|
7,012
|
|
|
1,138
|
|
|
—
|
|
|
1,071
|
|
|||||
Defined Benefit Plan
|
3,981
|
|
|
274
|
|
|
567
|
|
|
646
|
|
|
2,494
|
|
|||||
SERP
|
5,329
|
|
|
527
|
|
|
1,042
|
|
|
1,022
|
|
|
2,738
|
|
|||||
Tejon Ranch Conservancy
|
2,400
|
|
|
800
|
|
|
1,600
|
|
|
—
|
|
|
—
|
|
|||||
Financing fees
|
163
|
|
|
163
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Total contractual obligations
|
$
|
359,806
|
|
|
$
|
25,563
|
|
|
$
|
36,133
|
|
|
$
|
34,135
|
|
|
$
|
263,975
|
|
|
|
Amount of Commitment Expiration Per Period
|
||||||||||||||||||
($ in thousands)
|
|
Total
|
|
< 1 year
|
|
2 -3 Years
|
|
4 -5 Years
|
|
After 5 Years
|
||||||||||
Other Commercial Commitments:
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Standby letter of credit
|
|
$
|
4,468
|
|
|
$
|
—
|
|
|
$
|
4,468
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Total other commercial commitments
|
|
$
|
4,468
|
|
|
$
|
—
|
|
|
$
|
4,468
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
Year-Ended December 31,
|
||||||||||
($ in thousands)
|
2018
|
|
2017
|
|
2016
|
||||||
Net income (loss)
|
$
|
4,235
|
|
|
$
|
(1,821
|
)
|
|
$
|
757
|
|
Net loss attributed to non-controlling interest
|
(20
|
)
|
|
(24
|
)
|
|
(43
|
)
|
|||
Interest, net
|
|
|
|
|
|
||||||
Consolidated interest income
|
(1,344
|
)
|
|
(462
|
)
|
|
(457
|
)
|
|||
Our share of interest expense from unconsolidated joint ventures
|
2,519
|
|
|
1,730
|
|
|
1,449
|
|
|||
Total interest, net
|
1,175
|
|
|
1,268
|
|
|
992
|
|
|||
Income tax expense (benefit)
|
1,320
|
|
|
(1,283
|
)
|
|
496
|
|
|||
Depreciation and amortization:
|
|
|
|
|
|
||||||
Consolidated
|
5,424
|
|
|
5,689
|
|
|
5,657
|
|
|||
Our share of depreciation and amortization from unconsolidated joint ventures
|
4,328
|
|
|
5,419
|
|
|
3,630
|
|
|||
Total depreciation and amortization
|
9,752
|
|
|
11,108
|
|
|
9,287
|
|
|||
EBITDA
|
16,502
|
|
|
9,296
|
|
|
11,575
|
|
|||
Stock compensation expense
|
3,248
|
|
|
3,552
|
|
|
4,585
|
|
|||
Adjusted EBITDA
|
$
|
19,750
|
|
|
$
|
12,848
|
|
|
$
|
16,160
|
|
($ in thousands)
|
Year-Ended December 31,
|
||||||||||
Net operating income
|
2018
|
|
2017
|
|
2016
|
||||||
Pastoria Energy Facility
|
$
|
4,056
|
|
|
$
|
3,854
|
|
|
$
|
3,612
|
|
TRCC
|
1,439
|
|
|
1,482
|
|
|
1,356
|
|
|||
Communication leases
|
894
|
|
|
799
|
|
|
795
|
|
|||
Other commercial leases
|
670
|
|
|
618
|
|
|
817
|
|
|||
Total Commercial/Industrial net operating income
|
$
|
7,059
|
|
|
$
|
6,753
|
|
|
$
|
6,580
|
|
|
Year-Ended December 31,
|
||||||||||
($ in thousands)
|
2018
|
|
2017
|
|
2016
|
||||||
Commercial/Industrial operating income
|
$
|
2,724
|
|
|
$
|
2,472
|
|
|
$
|
2,740
|
|
Plus: Commercial/Industrial depreciation and amortization
|
651
|
|
|
650
|
|
|
614
|
|
|||
Plus: General, administrative and other expenses
|
5,241
|
|
|
5,570
|
|
|
6,084
|
|
|||
Less: Other revenues including land sales
|
(1,557
|
)
|
|
(1,939
|
)
|
|
(2,858
|
)
|
|||
Total Commercial/Industrial net operating income
|
$
|
7,059
|
|
|
$
|
6,753
|
|
|
$
|
6,580
|
|
|
Year-Ended December 31,
|
||||||||||
($ in thousands)
|
2018
|
|
2017
|
|
2016
|
||||||
Net income of unconsolidated joint ventures
|
$
|
5,734
|
|
|
$
|
6,371
|
|
|
$
|
11,782
|
|
Interest expense of unconsolidated joint ventures
|
4,912
|
|
|
3,364
|
|
|
2,757
|
|
|||
Operating income of unconsolidated joint ventures
|
10,646
|
|
|
9,735
|
|
|
14,539
|
|
|||
Depreciation and amortization of unconsolidated joint ventures
|
8,125
|
|
|
10,361
|
|
|
6,832
|
|
|||
Net operating income of unconsolidated joint ventures
|
$
|
18,771
|
|
|
$
|
20,096
|
|
|
$
|
21,371
|
|
|
2019
|
|
2020
|
|
2021
|
|
2022
|
|
2023
|
|
Thereafter
|
|
Total
|
|
Fair Value
|
||||||||||||||||
Assets:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Marketable securities
|
$
|
43,627
|
|
|
$
|
20,111
|
|
|
$
|
400
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
64,138
|
|
|
$
|
63,749
|
|
Weighted average interest rate
|
2.02
|
%
|
|
2.09
|
%
|
|
2.51
|
%
|
|
—
|
%
|
|
—
|
%
|
|
—
|
%
|
|
2.04
|
%
|
|
|
|||||||||
Liabilities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Long-term debt ($4.75M note)
|
$
|
289
|
|
|
$
|
302
|
|
|
$
|
315
|
|
|
$
|
328
|
|
|
$
|
343
|
|
|
$
|
1,841
|
|
|
$
|
3,418
|
|
|
$
|
3,418
|
|
Weighted average interest rate
|
4.25
|
%
|
|
4.25
|
%
|
|
4.25
|
%
|
|
4.25
|
%
|
|
4.25
|
%
|
|
4.25
|
%
|
|
4.25
|
%
|
|
|
|||||||||
Long-term debt ($70.0M note)
|
$
|
3,715
|
|
|
$
|
3,881
|
|
|
$
|
4,051
|
|
|
$
|
4,221
|
|
|
$
|
4,429
|
|
|
$
|
42,186
|
|
|
$
|
62,483
|
|
|
$
|
62,483
|
|
Weighted average interest rate
|
4.11
|
%
|
|
4.11
|
%
|
|
4.11
|
%
|
|
4.11
|
%
|
|
4.11
|
%
|
|
4.11
|
%
|
|
4.11
|
%
|
|
|
|||||||||
Long-term debt (other)
|
$
|
14
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
14
|
|
|
$
|
14
|
|
Weighted average interest rate
|
3.35
|
%
|
|
—
|
%
|
|
—
|
%
|
|
—
|
%
|
|
—
|
%
|
|
—
|
%
|
|
3.35
|
%
|
|
|
|
2018
|
|
2019
|
|
2020
|
|
2021
|
|
2022
|
|
Thereafter
|
|
Total
|
|
Fair Value
|
||||||||||||||||
Assets:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Marketable securities
|
$
|
20,227
|
|
|
$
|
30,315
|
|
|
$
|
20,420
|
|
|
$
|
36
|
|
|
$
|
68
|
|
|
$
|
—
|
|
|
$
|
71,066
|
|
|
$
|
70,868
|
|
Weighted average interest rate
|
1.61
|
%
|
|
1.83
|
%
|
|
2.02
|
%
|
|
—
|
%
|
|
—
|
%
|
|
—
|
%
|
|
1.83
|
%
|
|
|
|||||||||
Liabilities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Long-term debt ($4.75M note)
|
$
|
277
|
|
|
$
|
289
|
|
|
$
|
302
|
|
|
$
|
315
|
|
|
$
|
328
|
|
|
$
|
2,184
|
|
|
$
|
3,695
|
|
|
$
|
3,695
|
|
Weighted average interest rate
|
4.25
|
%
|
|
4.25
|
%
|
|
4.25
|
%
|
|
4.25
|
%
|
|
4.25
|
%
|
|
4.25
|
%
|
|
4.25
|
%
|
|
|
|||||||||
Long-term debt ($70.0M note)
|
$
|
3,563
|
|
|
$
|
3,715
|
|
|
$
|
3,881
|
|
|
$
|
4,051
|
|
|
$
|
4,221
|
|
|
$
|
46,615
|
|
|
$
|
66,046
|
|
|
$
|
66,046
|
|
Weighted average interest rate
|
4.11
|
%
|
|
4.11
|
%
|
|
4.11
|
%
|
|
4.11
|
%
|
|
4.11
|
%
|
|
4.11
|
%
|
|
4.11
|
%
|
|
|
|||||||||
Long-term debt (other)
|
$
|
163
|
|
|
$
|
55
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
218
|
|
|
$
|
218
|
|
Weighted average interest rate
|
3.35
|
%
|
|
3.35
|
%
|
|
—
|
%
|
|
—
|
%
|
|
—
|
%
|
|
—
|
%
|
|
3.35
|
%
|
|
|
ITEM 9.
|
CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE
|
(a)
|
Evaluation of Disclosure Controls and Procedures
|
(b)
|
Changes in Internal Control Over Financial Reporting
|
(a)
|
Security Ownership of Certain Beneficial Owners and Management.
|
(b)
|
Securities Authorized for Issuance under Equity Compensation Plans.
|
Equity
compensation plans
approved by
security holders *
|
|
Number of securities to be
issued upon exercise of
outstanding grants
|
|
Weighted-average
exercise price of
outstanding grants
|
|
Number of securities remaining
available for future issuance
under equity compensation
plans (excluding securities)
reflected in column (a)
|
|
|
(a)
|
|
(b)
|
|
(c)
|
Restricted stock
grants and restricted
stock units at target
goal achievement
|
|
538,599
|
|
Final price determined
at time of vesting
|
|
754,683
|
ITEM 13.
|
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE
|
(a)
Documents filed as part of this report:
|
|
Page Number
|
||||||
1
|
|
|
Consolidated Financial Statements:
|
|
|
|||
|
|
1.1
|
|
|
|
|||
|
|
|
|
|
||||
|
|
|
|
|
||||
|
|
1.2
|
|
|
|
|||
|
|
1.3
|
|
|
|
|||
|
|
1.4
|
|
|
|
|||
|
|
1.5
|
|
|
|
|||
|
|
1.6
|
|
|
|
|||
|
|
1.7
|
|
|
|
|||
2
|
|
|
Supplemental Financial Statement Schedules:
|
|
|
|||
|
|
None.
|
|
|
||||
3
|
|
|
Exhibits:
|
|
|
|||
|
|
3.1
|
|
|
Restated Certificate of Incorporation
|
|
FN 1
|
|
|
|
3.2
|
|
|
|
FN 2
|
||
|
|
4.3
|
|
|
|
FN 5
|
||
|
|
10.1
|
|
|
Water Service Contract with Wheeler Ridge-Maricopa Water Storage District (without exhibits), amendments originally filed under Item 11 to Registrant's Annual Report on Form 10-K
|
|
FN 6
|
|
|
|
10.7
|
|
|
|
FN 7
|
||
|
|
10.8
|
|
|
|
FN 7
|
||
|
|
10.9
|
|
|
|
FN 8
|
|
|
10.9(1)
|
|
|
|
FN 7
|
|
|
|
10.10
|
|
|
|
FN 9
|
|
|
|
10.10(1)
|
|
|
|
FN 7
|
|
|
|
10.12
|
|
|
|
FN 10
|
|
|
|
10.15
|
|
|
|
FN 11
|
|
|
|
10.16
|
|
|
|
FN 12
|
|
|
|
10.17
|
|
|
|
FN 13
|
|
|
|
10.18
|
|
|
|
FN 13
|
|
|
|
10.19
|
|
|
|
FN 13
|
|
|
|
10.23
|
|
|
|
FN 14
|
|
|
|
10.24
|
|
|
|
FN 15
|
|
|
|
10.25
|
|
|
|
FN 16
|
|
|
|
10.26
|
|
|
|
FN 17
|
|
|
|
10.27
|
|
|
|
FN 18
|
|
|
|
10.28
|
|
|
|
FN 19
|
FN 1
|
|
This document, filed with the Securities and Exchange Commission in Washington D.C. (file number 1-7183) under Item 14 to our Annual Report on Form 10-K for year ended December 31, 1987, is incorporated herein by reference. This Exhibit was not filed with the Securities and Exchange Commission in an electronic format.
|
FN 2
|
|
This document, filed with the Securities and Exchange Commission in Washington, D.C. (file number 1-7183) as Exhibit 99.1 to our Current Report on Form 8-K filed on September 20, 2017, is incorporated herein by reference.
|
FN 5
|
|
This document, filed with the Securities and Exchange Commission in Washington, D.C. (file number 1-7183) as Exhibit 4.1 to our Current Report on Form 8-K filed on December 20, 2005, is incorporated herein by reference.
|
FN 6
|
|
This document, filed with the Securities and Exchange Commission in Washington D.C. (file number 1-7183) under Item 14 to our Annual Report on Form 10-K for year ended December 31, 1994, is incorporated herein by reference. This Exhibit was not filed with the Securities and Exchange Commission in an electronic format.
|
FN 7
|
|
This document, filed with the Securities and Exchange Commission in Washington D.C. (file number 1-7183) under Item 14 to our Annual Report on Form 10-K, for the period ending December 31, 1997, is incorporated herein by reference.
|
FN 8
|
|
This document, filed with the Securities and Exchange Commission in Washington, D.C. (file number 1-7183) as Exhibit 10.9 to our Annual Report on Form 10-K for the year ended December 31, 2008, is incorporated herein by reference.
|
FN 9
|
|
This document, filed with the Securities and Exchange Commission in Washington, D.C. (file number 1-7183) as Exhibit 10.10 to our Annual Report on Form 10-K for the year ended December 31, 2008, is incorporated herein by reference
|
FN 10
|
|
This document filed with the Securities and Exchange Commission in Washington D.C. (file number 1-7183) as Exhibit 10.16 to our Annual Report on Form 10-K for the year ended December 31, 2001, is incorporated herein by reference.
|
FN 11
|
|
This document, filed with the Securities and Exchange Commission in Washington, D.C. (file number 1-7183) as Exhibit 4.1 to our Current Report on Form 8-K filed on May 7, 2004, is incorporated herein by reference.
|
FN 12
|
|
This document, filed with the Securities and Exchange Commission in Washington, D.C. (file number 1-7183) as Exhibit 4.2 to our Current Report on Form 8-K filed on May 7, 2004, is incorporated herein by reference.
|
FN 13
|
|
This document, filed with the Securities and Exchange Commission in Washington D.C. (file number 1-7183) as Exhibits 10.21-10.23 to our Annual Report on Form 10-K for the year ended December 31, 2004, is incorporated herein by reference.
|
FN 14
|
|
This document, filed with the Securities and Exchange Commission in Washington D.C. (file number 1-7183) as Exhibit 10.24 to our Current Report on Form 8-K filed on May 24, 2006, is incorporated herein by reference.
|
FN 15
|
|
This document, filed with the Securities and Exchange Commission in Washington, D.C. (file number 1-7183) as Exhibit 10.28 to our Current Report on Form 8-K filed on June 23, 2008, is incorporated herein by reference.
|
FN 16
|
|
This document, filed with the Securities and Exchange Commission in Washington, D.C. (file number 1-7183) as Exhibit 10.25 to our Quarterly Report on Form 10-Q for the period ending June 30, 2009, is incorporated herein by reference.
|
FN 17
|
|
This document, filed with the Securities and Exchange Commission in Washington, D.C. (file number 1-7183) as Exhibit 10.26 to our Quarterly Report on Form 10-Q for the period ending March 31, 2013, is incorporated herein by reference.
|
FN 18
|
|
This document, filed with the Securities and Exchange Commission in Washington, D.C. (file number 1-7183) as Exhibit 10.27 to our Current Report on Form 8-K filed on June 4, 2013, is incorporated herein by reference.
|
FN 19
|
|
This document, filed with the Securities and Exchange Commission in Washington, D.C. (file number 1-7183) as Exhibit 10.1 to our Current Report on Form 8-K filed on August 8, 2013, is incorporated herein by reference.
|
FN 20
|
|
This document, filed with the Securities and Exchange Commission in Washington, D.C. (file number 1-7183) as Exhibit 10.29 to our Amended Annual Report on Form 10-K/A for the year ended December 31, 2013, is incorporated herein by reference.
|
FN 21
|
|
This document, filed with the Securities and Exchange Commission in Washington, D.C. (file number 1-7183) as Exhibit 10.30 to our Current Report on Form 8-K filed on July 16, 2014, is incorporated herein by reference.
|
FN 22
|
|
This document, filed with the Securities and Exchange Commission in Washington, D.C. (file number 1-7183) as Exhibits 10.31-10.33 to our Current Report on Form 8-K filed on October 17, 2014, is incorporated herein by reference.
|
FN 23
|
|
This document, filed with the Securities and Exchange Commission in Washington, D.C. (file number 1-7183) as Exhibit 10.34 to our Annual Report on Form 10-K for the year ended December 31, 2014, is incorporated herein by reference.
|
FN 24
|
|
This document, filed with the Securities and Exchange Commission in Washington, D.C. (file number 1-7183) as Exhibit 10.35 to our Quarterly Report on Form 10-Q for the period ending June 30, 2015, is incorporated herein by reference.
|
FN 26
|
|
This document, filed with the Securities and Exchange Commission in Washington, D.C. (file number 1-7183) as Exhibit 10.37 to our Quarterly Report on Form 10-Q for the period ending June 30, 2016, is incorporated herein by reference.
|
FN 27
|
|
This document, filed with the Securities and Exchange Commission in Washington, D.C. (file number 1-7183) as Exhibit 10.38 to our Quarterly Report on Form 10-Q for the period ending September 30, 2016, is incorporated herein by reference.
|
|
|
|
|
|
|
TEJON RANCH CO.
|
|
|
|
|
|||
March 1, 2019
|
|
|
|
BY:
|
|
/s/ Gregory S. Bielli
|
|
|
|
|
|
|
Gregory S. Bielli
|
|
|
|
|
|
|
President and Chief Executive Officer
|
|
|
|
|
|
|
(Principal Executive Officer)
|
|
|
|
|
|||
|
|
|
|
|
|
|
March 1, 2019
|
|
|
|
BY:
|
|
/s/ Robert D. Velasquez
|
|
|
|
|
|
|
Robert D. Velasquez
|
|
|
|
|
|
|
Senior Vice President of Finance and Chief Financial Officer
|
|
|
|
|
|
|
(Principal Financial and Accounting Officer)
|
|
|
|
|
|
Name
|
|
Capacity
|
|
Date
|
|
|
|
||
/s/ Robert A. Alter
Robert A. Alter
|
|
Director
|
|
March 1, 2019
|
|
|
|
||
/s/ Steven A. Betts
Steven A. Betts |
|
Director
|
|
March 1, 2019
|
|
|
|
||
/s/ Gregory S. Bielli
Gregory S. Bielli |
|
Director
|
|
March 1, 2019
|
|
|
|
|
|
/s/ Jean Fuller
Jean Fuller
|
|
Director
|
|
March 1, 2019
|
|
|
|
||
/s/ Anthony L. Leggio
Anthony L. Leggio |
|
Director
|
|
March 1, 2019
|
|
|
|
||
/s/ Norman Metcalfe
Norman Metcalfe |
|
Director
|
|
March 1, 2019
|
|
|
|
||
/s/ Geoffrey Stack
Geoffrey Stack |
|
Director
|
|
March 1, 2019
|
|
|
|
|
|
/s/ Daniel R. Tisch
Daniel R. Tisch |
|
Director
|
|
March 1, 2019
|
|
|
|||
/s/ Michael H. Winer
Michael H. Winer |
|
Director
|
|
March 1, 2019
|
|
Page
|
|
December 31
|
||||||
|
2018
|
|
2017
|
||||
ASSETS
|
|
|
|
||||
Current Assets:
|
|
|
|
||||
Cash and cash equivalents
|
$
|
15,908
|
|
|
$
|
20,107
|
|
Marketable securities - available-for-sale
|
63,749
|
|
|
70,868
|
|
||
Accounts receivable
|
10,876
|
|
|
7,608
|
|
||
Inventories
|
2,618
|
|
|
2,469
|
|
||
Prepaid expenses and other current assets
|
3,348
|
|
|
2,849
|
|
||
Total current assets
|
96,499
|
|
|
103,901
|
|
||
Real estate and improvements - held for lease, net
|
18,953
|
|
|
19,115
|
|
||
Real estate development (includes $100,311 at December 31, 2018 and $94,271 at December 31, 2017, attributable to Centennial Founders, LLC, Note 17)
|
283,385
|
|
|
267,336
|
|
||
Property and equipment, net
|
46,086
|
|
|
45,332
|
|
||
Investments in unconsolidated joint ventures
|
28,602
|
|
|
30,031
|
|
||
Net investment in water assets
|
51,832
|
|
|
47,130
|
|
||
Deferred tax assets
|
1,229
|
|
|
1,562
|
|
||
Other assets
|
2,462
|
|
|
3,792
|
|
||
TOTAL ASSETS
|
$
|
529,048
|
|
|
$
|
518,199
|
|
LIABILITIES AND EQUITY
|
|
|
|
||||
Current Liabilities:
|
|
|
|
||||
Trade accounts payable
|
$
|
6,037
|
|
|
$
|
3,545
|
|
Accrued liabilities and other
|
3,575
|
|
|
1,810
|
|
||
Deferred income
|
2,863
|
|
|
1,118
|
|
||
Current maturities of long-term debt
|
4,018
|
|
|
4,004
|
|
||
Total current liabilities
|
16,493
|
|
|
10,477
|
|
||
Long-term debt, less current portion
|
61,780
|
|
|
65,816
|
|
||
Long-term deferred gains
|
3,405
|
|
|
3,405
|
|
||
Other liabilities
|
12,698
|
|
|
11,691
|
|
||
Total liabilities
|
94,376
|
|
|
91,389
|
|
||
Commitments and contingencies
|
|
|
|
||||
Equity:
|
|
|
|
||||
Tejon Ranch Co. Stockholders’ Equity
|
|
|
|
||||
Common stock, $0.50 par value per share:
|
|
|
|
||||
Authorized shares - 30,000,000
|
|
|
|
||||
Issued and outstanding shares - 25,972,080 at December 31, 2018 and 25,894,773 at December 31, 2017
|
12,986
|
|
|
12,947
|
|
||
Additional paid-in capital
|
336,520
|
|
|
320,167
|
|
||
Accumulated other comprehensive loss
|
(4,857
|
)
|
|
(5,264
|
)
|
||
Retained earnings
|
74,647
|
|
|
70,392
|
|
||
Total Tejon Ranch Co. Stockholders’ Equity
|
419,296
|
|
|
398,242
|
|
||
Non-controlling interest
|
15,376
|
|
|
28,568
|
|
||
Total equity
|
434,672
|
|
|
426,810
|
|
||
TOTAL LIABILITIES AND EQUITY
|
$
|
529,048
|
|
|
$
|
518,199
|
|
|
|
Year Ended December 31
|
||||||||||
|
|
|||||||||||
|
|
2018
|
|
2017
|
|
2016
|
||||||
Revenues:
|
|
|
|
|
|
|
||||||
Real estate - commercial/industrial
|
|
$
|
8,970
|
|
|
$
|
9,001
|
|
|
$
|
9,840
|
|
Mineral resources
|
|
14,395
|
|
|
5,983
|
|
|
14,153
|
|
|||
Farming
|
|
18,563
|
|
|
16,434
|
|
|
18,648
|
|
|||
Ranch operations
|
|
3,691
|
|
|
3,837
|
|
|
3,338
|
|
|||
Total revenues
|
|
45,619
|
|
|
35,255
|
|
|
45,979
|
|
|||
Costs and Expenses:
|
|
|
|
|
|
|
||||||
Real estate - commercial/industrial
|
|
6,246
|
|
|
6,529
|
|
|
7,100
|
|
|||
Real estate - resort/residential
|
|
1,530
|
|
|
1,955
|
|
|
1,630
|
|
|||
Mineral resources
|
|
6,223
|
|
|
2,964
|
|
|
7,796
|
|
|||
Farming
|
|
16,028
|
|
|
16,201
|
|
|
18,673
|
|
|||
Ranch operations
|
|
5,451
|
|
|
5,411
|
|
|
5,734
|
|
|||
Corporate expenses
|
|
9,705
|
|
|
9,713
|
|
|
11,811
|
|
|||
Total expenses
|
|
45,183
|
|
|
42,773
|
|
|
52,744
|
|
|||
Operating income (loss)
|
|
436
|
|
|
(7,518
|
)
|
|
(6,765
|
)
|
|||
Other Income:
|
|
|
|
|
|
|
||||||
Gain on sale of real estate
|
|
—
|
|
|
—
|
|
|
1,044
|
|
|||
Investment income
|
|
1,344
|
|
|
462
|
|
|
457
|
|
|||
Other loss
|
|
(59
|
)
|
|
(275
|
)
|
|
(581
|
)
|
|||
Total other income
|
|
1,285
|
|
|
187
|
|
|
920
|
|
|||
Income (loss) from operations before equity in earnings of unconsolidated joint ventures
|
|
1,721
|
|
|
(7,331
|
)
|
|
(5,845
|
)
|
|||
Equity in earnings of unconsolidated joint ventures, net
|
|
3,834
|
|
|
4,227
|
|
|
7,098
|
|
|||
Income (loss) before income taxes
|
|
5,555
|
|
|
(3,104
|
)
|
|
1,253
|
|
|||
Income tax expense (benefit)
|
|
1,320
|
|
|
(1,283
|
)
|
|
496
|
|
|||
Net income (loss)
|
|
4,235
|
|
|
(1,821
|
)
|
|
757
|
|
|||
Net loss attributable to non-controlling interest
|
|
(20
|
)
|
|
(24
|
)
|
|
(43
|
)
|
|||
Net income (loss) attributable to common stockholders
|
|
$
|
4,255
|
|
|
$
|
(1,797
|
)
|
|
$
|
800
|
|
Net income (loss) per share attributable to common stockholders, basic
|
|
$
|
0.16
|
|
|
$
|
(0.08
|
)
|
|
$
|
0.04
|
|
Net income (loss) per share attributable to common stockholders, diluted
|
|
$
|
0.16
|
|
|
$
|
(0.08
|
)
|
|
$
|
0.04
|
|
|
|
Year Ended December 31
|
||||||||||
|
|
2018
|
|
2017
|
|
2016
|
||||||
Net income (loss)
|
|
$
|
4,235
|
|
|
$
|
(1,821
|
)
|
|
$
|
757
|
|
Other comprehensive income:
|
|
|
|
|
|
|
||||||
Unrealized (loss) gain on available-for-sale securities
|
|
(191
|
)
|
|
(100
|
)
|
|
62
|
|
|||
Benefit plan adjustments
|
|
(189
|
)
|
|
404
|
|
|
(371
|
)
|
|||
SERP liability adjustments
|
|
(43
|
)
|
|
328
|
|
|
214
|
|
|||
Unrealized interest rate swap gains
|
|
988
|
|
|
970
|
|
|
1,040
|
|
|||
Other comprehensive income before taxes
|
|
565
|
|
|
1,602
|
|
|
945
|
|
|||
Provision for income taxes related to other comprehensive income items
|
|
(158
|
)
|
|
(627
|
)
|
|
(282
|
)
|
|||
Other comprehensive income
|
|
407
|
|
|
975
|
|
|
663
|
|
|||
Comprehensive income (loss)
|
|
4,642
|
|
|
(846
|
)
|
|
1,420
|
|
|||
Comprehensive (loss) income attributable to non-controlling interests
|
|
(20
|
)
|
|
(24
|
)
|
|
(43
|
)
|
|||
Comprehensive income (loss) attributable to common stockholders
|
|
$
|
4,662
|
|
|
$
|
(822
|
)
|
|
$
|
1,463
|
|
|
Common
Stock Shares
Outstanding
|
|
Common
Stock
|
|
Additional
Paid-In
Capital
|
|
Accumulated
Other
Comprehensive
Loss
|
|
Retained
Earnings
|
|
Total
Stockholders'
Equity
|
|
Noncontrolling
Interest
|
|
Total Equity
|
|||||||||||||||
Balance, December 31, 2015
|
20,688,154
|
|
|
$
|
10,344
|
|
|
$
|
216,803
|
|
|
$
|
(6,902
|
)
|
|
$
|
71,389
|
|
|
$
|
291,634
|
|
|
$
|
39,674
|
|
|
$
|
331,308
|
|
Net income
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
800
|
|
|
800
|
|
|
(43
|
)
|
|
757
|
|
|||||||
Other comprehensive income
|
—
|
|
|
—
|
|
|
—
|
|
|
663
|
|
|
—
|
|
|
663
|
|
|
—
|
|
|
663
|
|
|||||||
Restricted stock issuance
|
200,240
|
|
|
100
|
|
|
(100
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||||
Stock compensation
|
—
|
|
|
—
|
|
|
4,881
|
|
|
—
|
|
|
—
|
|
|
4,881
|
|
|
—
|
|
|
4,881
|
|
|||||||
Shares withheld for taxes and tax benefit of vested shares
|
(78,093
|
)
|
|
(39
|
)
|
|
(2,861
|
)
|
|
—
|
|
|
—
|
|
|
(2,900
|
)
|
|
—
|
|
|
(2,900
|
)
|
|||||||
Centennial redemption of withdrawing member interest
|
—
|
|
|
—
|
|
|
11,039
|
|
|
—
|
|
|
|
|
11,039
|
|
|
(11,039
|
)
|
|
—
|
|
||||||||
Balance, December 31, 2016
|
20,810,301
|
|
|
$
|
10,405
|
|
|
$
|
229,762
|
|
|
$
|
(6,239
|
)
|
|
$
|
72,189
|
|
|
$
|
306,117
|
|
|
$
|
28,592
|
|
|
$
|
334,709
|
|
Net loss
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(1,797
|
)
|
|
(1,797
|
)
|
|
(24
|
)
|
|
(1,821
|
)
|
|||||||
Other comprehensive income
|
—
|
|
|
—
|
|
|
—
|
|
|
975
|
|
|
—
|
|
|
975
|
|
|
—
|
|
|
975
|
|
|||||||
Restricted stock issuance
|
136,777
|
|
|
69
|
|
|
(70
|
)
|
|
—
|
|
|
—
|
|
|
(1
|
)
|
|
—
|
|
|
(1
|
)
|
|||||||
Stock compensation
|
—
|
|
|
—
|
|
|
4,107
|
|
|
—
|
|
|
—
|
|
|
4,107
|
|
|
—
|
|
|
4,107
|
|
|||||||
Shares withheld for taxes and tax benefit of vested shares
|
(52,901
|
)
|
|
(27
|
)
|
|
(999
|
)
|
|
—
|
|
|
—
|
|
|
(1,026
|
)
|
|
—
|
|
|
(1,026
|
)
|
|||||||
Rights offering, net
|
5,000,596
|
|
|
2,500
|
|
|
87,367
|
|
|
—
|
|
|
|
|
89,867
|
|
|
—
|
|
|
89,867
|
|
||||||||
Balance, December 31, 2017
|
25,894,773
|
|
|
$
|
12,947
|
|
|
$
|
320,167
|
|
|
$
|
(5,264
|
)
|
|
$
|
70,392
|
|
|
$
|
398,242
|
|
|
$
|
28,568
|
|
|
$
|
426,810
|
|
Net income
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
4,255
|
|
|
4,255
|
|
|
(20
|
)
|
|
4,235
|
|
|||||||
Other comprehensive income
|
—
|
|
|
—
|
|
|
—
|
|
|
407
|
|
|
—
|
|
|
407
|
|
|
—
|
|
|
407
|
|
|||||||
Restricted stock issuance
|
124,597
|
|
|
63
|
|
|
(62
|
)
|
|
—
|
|
|
—
|
|
|
1
|
|
|
—
|
|
|
1
|
|
|||||||
Stock compensation
|
—
|
|
|
—
|
|
|
4,480
|
|
|
—
|
|
|
—
|
|
|
4,480
|
|
|
—
|
|
|
4,480
|
|
|||||||
Shares withheld for taxes and tax benefit of vested shares
|
(47,290
|
)
|
|
(24
|
)
|
|
(1,071
|
)
|
|
—
|
|
|
—
|
|
|
(1,095
|
)
|
|
—
|
|
|
(1,095
|
)
|
|||||||
Rights offering, net
|
—
|
|
|
—
|
|
|
(166
|
)
|
|
—
|
|
|
|
|
(166
|
)
|
|
—
|
|
|
(166
|
)
|
||||||||
Centennial redemption of withdrawing member interest
|
|
|
|
|
13,172
|
|
|
|
|
|
|
13,172
|
|
|
(13,172
|
)
|
|
—
|
|
|||||||||||
Balance, December 31, 2018
|
25,972,080
|
|
|
$
|
12,986
|
|
|
$
|
336,520
|
|
|
$
|
(4,857
|
)
|
|
$
|
74,647
|
|
|
$
|
419,296
|
|
|
$
|
15,376
|
|
|
$
|
434,672
|
|
|
Twelve Months Ended December 31,
|
||||||||||
|
2018
|
|
2017
|
|
2016
|
||||||
Operating Activities
|
|
|
|
|
|
||||||
Net income (loss)
|
$
|
4,235
|
|
|
$
|
(1,821
|
)
|
|
$
|
757
|
|
Adjustments to reconcile net income (loss) to net cash provided by operating activities:
|
|
|
|
|
|
||||||
Depreciation and amortization
|
5,424
|
|
|
5,689
|
|
|
5,657
|
|
|||
Amortization of premium/discount of marketable securities
|
101
|
|
|
298
|
|
|
434
|
|
|||
Equity in earnings of unconsolidated joint ventures, net
|
(3,834
|
)
|
|
(4,227
|
)
|
|
(7,098
|
)
|
|||
Non-cash retirement plan expense
|
335
|
|
|
469
|
|
|
1,046
|
|
|||
Loss (gain) on sale of real estate/assets
|
94
|
|
|
45
|
|
|
(1,183
|
)
|
|||
Deferred income taxes
|
175
|
|
|
(94
|
)
|
|
2,099
|
|
|||
Stock compensation expense
|
3,248
|
|
|
3,552
|
|
|
4,585
|
|
|||
Excess tax benefit of stock-based compensation
|
18
|
|
|
107
|
|
|
—
|
|
|||
Distribution of earnings from unconsolidated joint ventures
|
4,800
|
|
|
7,200
|
|
|
4,500
|
|
|||
Changes in operating assets and liabilities:
|
|
|
|
|
|
||||||
Receivables, inventories, prepaids and other assets, net
|
(2,888
|
)
|
|
522
|
|
|
(2,711
|
)
|
|||
Current liabilities, net
|
2,646
|
|
|
(1,910
|
)
|
|
(2,501
|
)
|
|||
Net cash provided by operating activities
|
14,354
|
|
|
9,830
|
|
|
5,585
|
|
|||
Investing Activities
|
|
|
|
|
|
||||||
Maturities and sales of marketable securities
|
35,219
|
|
|
8,126
|
|
|
11,750
|
|
|||
Purchases of marketable securities
|
(28,392
|
)
|
|
(52,716
|
)
|
|
(5,983
|
)
|
|||
Real estate and equipment expenditures
|
(22,580
|
)
|
|
(21,709
|
)
|
|
(26,380
|
)
|
|||
Reimbursement proceeds from Communities Facilities District
|
3,588
|
|
|
—
|
|
|
6,155
|
|
|||
Proceeds from sale of real estate/assets
|
—
|
|
|
—
|
|
|
4,616
|
|
|||
Investment in unconsolidated joint ventures
|
(52
|
)
|
|
(310
|
)
|
|
(2,000
|
)
|
|||
Distribution of equity from unconsolidated joint ventures
|
2,815
|
|
|
3,114
|
|
|
1,600
|
|
|||
Investments in long-term water assets
|
(3,844
|
)
|
|
(4,717
|
)
|
|
—
|
|
|||
Other
|
—
|
|
|
(2
|
)
|
|
—
|
|
|||
Net cash used in investing activities
|
(13,246
|
)
|
|
(68,214
|
)
|
|
(10,242
|
)
|
|||
Financing Activities
|
|
|
|
|
|
||||||
Borrowings of line of credit
|
—
|
|
|
13,300
|
|
|
20,700
|
|
|||
Repayments of line of credit
|
—
|
|
|
(21,000
|
)
|
|
(13,000
|
)
|
|||
Repayments of long-term debt
|
(4,046
|
)
|
|
(3,908
|
)
|
|
(815
|
)
|
|||
Net proceeds from rights offering
|
(166
|
)
|
|
89,867
|
|
|
—
|
|
|||
Taxes on vested stock grants
|
(1,095
|
)
|
|
(1,026
|
)
|
|
(2,900
|
)
|
|||
Net cash (used in)/provided by financing activities
|
(5,307
|
)
|
|
77,233
|
|
|
3,985
|
|
|||
(Decrease) increase in cash and cash equivalents
|
(4,199
|
)
|
|
18,849
|
|
|
(672
|
)
|
|||
Cash and cash equivalents at beginning of year
|
20,107
|
|
|
1,258
|
|
|
1,930
|
|
|||
Cash and cash equivalents at end of year
|
$
|
15,908
|
|
|
$
|
20,107
|
|
|
$
|
1,258
|
|
Supplemental cash flow information
|
|
|
|
|
|
||||||
Non cash capital contribution to unconsolidated joint venture
|
$
|
—
|
|
|
$
|
1,339
|
|
|
$
|
—
|
|
Accrued capital and water expenditures included in current liabilities
|
$
|
2,390
|
|
|
$
|
814
|
|
|
$
|
652
|
|
Capital expenditure financing arrangement
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
467
|
|
Taxes paid (net of refunds)
|
$
|
—
|
|
|
$
|
(124
|
)
|
|
$
|
1,135
|
|
•
|
Real Estate - Commercial/Industrial
|
•
|
Real Estate - Resort/Residential
|
•
|
Mineral Resources
|
•
|
Farming
|
•
|
Ranch Operations
|
•
|
Level 1 – Valuation is based on quoted prices in active markets for identical assets and liabilities.
|
•
|
Level 2 – Valuation is determined from quoted prices for similar assets and liabilities in active markets, quoted prices for identical or similar instruments in markets that are not active, or by model-based techniques in which all significant inputs are observable in the market.
|
•
|
Level 3 – Valuation is derived from model-based techniques in which at least one significant input is unobservable and based on our own estimates about the assumptions that market participants would use to value the asset or liability.
|
($ in thousands)
|
|
Useful Life
|
|
December 31, 2018
|
|
December 31, 2017
|
||||
Vineyards and orchards
|
|
20
|
|
$
|
53,271
|
|
|
$
|
52,667
|
|
Machinery, furniture fixtures and other equipment
|
|
3 - 10
|
|
21,673
|
|
|
21,320
|
|
||
Buildings and improvements
|
|
10 - 27.5
|
|
8,893
|
|
|
8,850
|
|
||
Land and land improvements
|
|
15
|
|
7,848
|
|
|
7,822
|
|
||
Development in process
|
|
|
|
7,001
|
|
|
6,600
|
|
||
|
|
|
|
98,686
|
|
|
97,259
|
|
||
Less: accumulated depreciation
|
|
|
|
(52,600
|
)
|
|
(51,927
|
)
|
||
|
|
|
|
$
|
46,086
|
|
|
$
|
45,332
|
|
|
|
Twelve Months Ended December 31,
|
|||||||
|
|
2018
|
|
2017
|
|
2016
|
|||
Weighted average number of shares outstanding:
|
|
|
|
|
|
|
|||
Common stock
|
|
25,948,189
|
|
|
21,677,981
|
|
|
20,737,903
|
|
Common stock equivalents: stock options, grants
|
|
27,715
|
|
|
40,409
|
|
|
46,839
|
|
Diluted shares outstanding
|
|
25,975,904
|
|
|
21,718,390
|
|
|
20,784,742
|
|
($ in thousands)
|
|
|
2018
|
|
2017
|
||||||||||||
Marketable Securities:
|
Fair Value Hierarchy
|
|
Cost
|
|
Estimated Fair Value
|
|
Cost
|
|
Estimated Fair Value
|
||||||||
Certificates of deposit
|
|
|
|
|
|
|
|
|
|
||||||||
with unrecognized losses for less than 12 months
|
|
|
$
|
250
|
|
|
$
|
248
|
|
|
$
|
6,238
|
|
|
$
|
6,222
|
|
with unrecognized losses for more than 12 months
|
|
|
3,861
|
|
|
3,812
|
|
|
102
|
|
|
100
|
|
||||
with unrecognized gains
|
|
|
—
|
|
|
—
|
|
|
2,088
|
|
|
2,089
|
|
||||
Total Certificates of deposit
|
Level 1
|
|
4,111
|
|
|
4,060
|
|
|
8,428
|
|
|
8,411
|
|
||||
U.S. Treasury and agency notes
|
|
|
|
|
|
|
|
|
|
||||||||
with unrecognized losses for less than 12 months
|
|
|
3,112
|
|
|
3,105
|
|
|
29,741
|
|
|
29,669
|
|
||||
with unrecognized losses for more than 12 months
|
|
|
23,564
|
|
|
23,415
|
|
|
137
|
|
|
135
|
|
||||
with unrecognized gains
|
|
|
3
|
|
|
4
|
|
|
152
|
|
|
153
|
|
||||
Total U.S. Treasury and agency notes
|
Level 2
|
|
26,679
|
|
|
26,524
|
|
|
30,030
|
|
|
29,957
|
|
||||
Corporate notes
|
|
|
|
|
|
|
|
|
|
||||||||
with unrecognized losses for less than 12 months
|
|
|
13,696
|
|
|
13,665
|
|
|
18,230
|
|
|
18,159
|
|
||||
with unrecognized losses for more than 12 months
|
|
|
12,542
|
|
|
12,431
|
|
|
2,804
|
|
|
2,788
|
|
||||
Total Corporate notes
|
Level 2
|
|
26,238
|
|
|
26,096
|
|
|
21,034
|
|
|
20,947
|
|
||||
Municipal notes
|
|
|
|
|
|
|
|
|
|
||||||||
with unrecognized losses for less than 12 months
|
|
|
2,994
|
|
|
2,982
|
|
|
10,298
|
|
|
10,288
|
|
||||
with unrecognized losses for more than 12 months
|
|
|
4,116
|
|
|
4,087
|
|
|
999
|
|
|
987
|
|
||||
with unrecognized gains
|
|
|
—
|
|
|
—
|
|
|
277
|
|
|
278
|
|
||||
Total Municipal notes
|
Level 2
|
|
7,110
|
|
|
7,069
|
|
|
11,574
|
|
|
11,553
|
|
||||
|
|
|
|
|
|
|
|
|
|
||||||||
|
|
|
$
|
64,138
|
|
|
$
|
63,749
|
|
|
$
|
71,066
|
|
|
$
|
70,868
|
|
December 31, 2018
|
2019
|
|
2020
|
|
2021
|
|
2022
|
|
Total
|
||||||||||
Certificates of deposit
|
$
|
2,311
|
|
|
$
|
1,799
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
4,110
|
|
U.S. Treasury and agency notes
|
17,574
|
|
|
9,174
|
|
|
—
|
|
|
—
|
|
|
26,748
|
|
|||||
Corporate notes
|
18,671
|
|
|
7,150
|
|
|
400
|
|
|
—
|
|
|
26,221
|
|
|||||
Municipal notes
|
5,111
|
|
|
2,000
|
|
|
—
|
|
|
—
|
|
|
7,111
|
|
|||||
|
$
|
43,667
|
|
|
$
|
20,123
|
|
|
$
|
400
|
|
|
$
|
—
|
|
|
$
|
64,190
|
|
December 31, 2017
|
|
2018
|
|
2019
|
|
2020
|
|
2021
|
|
Total
|
||||||||||
Certificates of deposit
|
|
$
|
4,306
|
|
|
$
|
2,311
|
|
|
$
|
1,799
|
|
|
$
|
—
|
|
|
$
|
8,416
|
|
U.S. Treasury and agency notes
|
|
6,399
|
|
|
14,599
|
|
|
9,171
|
|
|
—
|
|
|
30,169
|
|
|||||
Corporate notes
|
|
7,954
|
|
|
6,430
|
|
|
6,450
|
|
|
—
|
|
|
20,834
|
|
|||||
Municipal notes
|
|
1,568
|
|
|
6,957
|
|
|
3,003
|
|
|
—
|
|
|
11,528
|
|
|||||
|
|
$
|
20,227
|
|
|
$
|
30,297
|
|
|
$
|
20,423
|
|
|
$
|
—
|
|
|
$
|
70,947
|
|
($ in thousands)
|
|
2018
|
|
2017
|
||||
Farming inventories
|
|
$
|
2,269
|
|
|
$
|
2,012
|
|
Other
|
|
349
|
|
|
457
|
|
||
|
|
$
|
2,618
|
|
|
$
|
2,469
|
|
($ in thousands)
|
|
2018
|
|
2017
|
||||
Real estate development
|
|
|
|
|
||||
Mountain Village
|
|
$
|
137,571
|
|
|
$
|
132,034
|
|
Centennial
|
|
100,311
|
|
|
94,271
|
|
||
Grapevine
|
|
31,175
|
|
|
28,139
|
|
||
Tejon Ranch Commerce Center
|
|
14,328
|
|
|
12,892
|
|
||
Real estate development
|
|
283,385
|
|
|
267,336
|
|
||
|
|
|
|
|
||||
Real estate and improvements - held for lease, net
|
|
|
|
|
||||
Tejon Ranch Commerce Center
|
|
21,327
|
|
|
21,123
|
|
||
Real estate and improvements - held for lease, net
|
|
21,327
|
|
|
21,123
|
|
||
Less accumulated depreciation
|
|
(2,374
|
)
|
|
(2,008
|
)
|
||
Real estate and improvements - held for lease, net
|
|
$
|
18,953
|
|
|
$
|
19,115
|
|
($ in thousands)
|
2018
|
|
2017
|
|
2016
|
||||||
|
|
|
|
|
|
||||||
Acre-Feet Sold
|
9,442
|
|
|
939
|
|
|
7,285
|
|
|||
|
|
|
|
|
|
||||||
Revenues
|
$
|
9,142
|
|
|
$
|
1,254
|
|
|
$
|
9,601
|
|
Cost of sales
|
3,864
|
|
|
765
|
|
|
5,925
|
|
|||
Profit
|
$
|
5,278
|
|
|
$
|
489
|
|
|
$
|
3,676
|
|
|
December 31, 2018
|
|
December 31, 2017
|
||||
Banked water and water for future delivery
|
$
|
24,597
|
|
|
$
|
5,220
|
|
Transferable water
|
36
|
|
|
13,351
|
|
||
Total water held for future use at cost
|
$
|
24,633
|
|
|
$
|
18,571
|
|
|
December 31, 2018
|
|
December 31, 2017
|
||||||||||||
|
Costs
|
|
Accumulated Depreciation
|
|
Costs
|
|
Accumulated Depreciation
|
||||||||
Dudley-Ridge water rights
|
$
|
12,203
|
|
|
$
|
(3,860
|
)
|
|
$
|
12,203
|
|
|
$
|
(3,377
|
)
|
Nickel water rights
|
18,740
|
|
|
(3,320
|
)
|
|
18,740
|
|
|
(2,678
|
)
|
||||
Tulare Lake Basin water rights
|
5,857
|
|
|
(2,421
|
)
|
|
5,857
|
|
|
(2,186
|
)
|
||||
|
$
|
36,800
|
|
|
$
|
(9,601
|
)
|
|
$
|
36,800
|
|
|
$
|
(8,241
|
)
|
Net cost of purchased water contracts
|
27,199
|
|
|
|
|
28,559
|
|
|
|
||||||
Total cost water held for future use
|
24,633
|
|
|
|
|
18,571
|
|
|
|
||||||
Net investments in water assets
|
$
|
51,832
|
|
|
|
|
$
|
47,130
|
|
|
|
(in acre feet, unaudited)
|
December 31, 2018
|
|
December 31, 2017
|
||
Water held for future use
|
|
|
|
||
AVEK water bank
|
13,033
|
|
|
13,033
|
|
Company water bank
|
35,793
|
|
|
31,497
|
|
Transferable water *
|
500
|
|
|
6,169
|
|
Total water held for future use
|
49,326
|
|
|
50,699
|
|
Purchased water contracts
|
|
|
|
||
Water Contracts (Dudley-Ridge, Nickel and Tulare)
|
10,137
|
|
|
10,137
|
|
WRMWSD - Contracts with Company
|
15,547
|
|
|
15,547
|
|
TCWD - Contracts with Company
|
5,749
|
|
|
5,749
|
|
TCWD - Banked water contracted to Company
|
52,547
|
|
|
49,184
|
|
Total purchased water contracts
|
83,980
|
|
|
80,617
|
|
Total water held for future use and purchased water contracts
|
133,306
|
|
|
131,316
|
|
($ in thousands)
|
December 31, 2018
|
|
December 31, 2017
|
||||
Accrued vacation
|
$
|
761
|
|
|
$
|
824
|
|
Accrued paid personal leave
|
416
|
|
|
494
|
|
||
Accrued bonus
1
|
2,071
|
|
|
126
|
|
||
Other
|
327
|
|
|
366
|
|
||
|
$
|
3,575
|
|
|
$
|
1,810
|
|
($ in thousands)
|
December 31, 2018
|
|
December 31, 2017
|
||||
Notes payable
|
65,901
|
|
|
69,741
|
|
||
Other borrowings
|
14
|
|
|
218
|
|
||
Total short-term and long-term debt
|
65,915
|
|
|
69,959
|
|
||
Less line-of-credit and current maturities of long-term debt
|
(4,018
|
)
|
|
(4,004
|
)
|
||
Less deferred loan costs
|
(117
|
)
|
|
(139
|
)
|
||
Long-term debt, less current portion
|
$
|
61,780
|
|
|
$
|
65,816
|
|
($ in thousands)
|
|
2019
|
|
2020
|
|
2021
|
|
2022
|
|
2023
|
|
Thereafter
|
|
Total
|
||||||||||||||
Term Loan
|
|
$
|
3,715
|
|
|
$
|
3,881
|
|
|
$
|
4,051
|
|
|
$
|
4,221
|
|
|
$
|
4,429
|
|
|
$
|
42,186
|
|
|
$
|
62,483
|
|
Promissory note
|
|
289
|
|
|
302
|
|
|
315
|
|
|
328
|
|
|
343
|
|
|
1,841
|
|
|
3,418
|
|
|||||||
Other borrowings
|
|
14
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
14
|
|
|||||||
Total long-term debt
|
|
$
|
4,018
|
|
|
$
|
4,183
|
|
|
$
|
4,366
|
|
|
$
|
4,549
|
|
|
$
|
4,772
|
|
|
$
|
44,027
|
|
|
$
|
65,915
|
|
Effective Date
|
|
Maturity Date
|
|
Fair Value Hierarchy
|
|
Weighted Average Interest Pay Rate
|
|
Fair Value
|
|
Notional Amount
|
October 15, 2014
|
|
October 5, 2024
|
|
Level 2
|
|
4.11%
|
|
$93
|
|
$62,483
|
|
December 31, 2018
|
|
December 31, 2017
|
|
December 31, 2016
|
|||
Stock Grants Outstanding Beginning of the Year at Target Achievement
|
536,860
|
|
|
386,171
|
|
|
272,353
|
|
New Stock Grants/Additional shares due to achievement in excess of target
|
97,529
|
|
|
295,243
|
|
|
287,091
|
|
Vested Grants
|
(93,948
|
)
|
|
(99,769
|
)
|
|
(172,749
|
)
|
Expired/Forfeited Grants
|
(1,842
|
)
|
|
(44,785
|
)
|
|
(524
|
)
|
Stock Grants Outstanding at Target Achievement
|
538,599
|
|
|
536,860
|
|
|
386,171
|
|
Employee 1998 Plan ($ in thousands):
|
|
December 31, 2018
|
|
December 31, 2017
|
|
December 31, 2016
|
||||||
Expensed
|
|
$
|
2,564
|
|
|
$
|
2,889
|
|
|
$
|
3,847
|
|
Capitalized
|
|
1,232
|
|
|
555
|
|
|
296
|
|
|||
|
|
3,796
|
|
|
3,444
|
|
|
4,143
|
|
|||
NDSI Plan
|
|
684
|
|
|
663
|
|
|
738
|
|
|||
|
|
$
|
4,480
|
|
|
$
|
4,107
|
|
|
$
|
4,881
|
|
($ in thousands)
|
|
2018
|
|
2017
|
|
2016
|
||||||
Total (benefit) provision:
|
|
$
|
1,320
|
|
|
$
|
(1,283
|
)
|
|
$
|
496
|
|
Federal:
|
|
|
|
|
|
|
||||||
Current
|
|
862
|
|
|
(1,266
|
)
|
|
(758
|
)
|
|||
Deferred
|
|
64
|
|
|
255
|
|
|
1,146
|
|
|||
|
|
926
|
|
|
(1,011
|
)
|
|
388
|
|
|||
State:
|
|
|
|
|
|
|
||||||
Current
|
|
353
|
|
|
(120
|
)
|
|
(145
|
)
|
|||
Deferred
|
|
41
|
|
|
(152
|
)
|
|
253
|
|
|||
|
|
394
|
|
|
(272
|
)
|
|
108
|
|
|||
|
|
$
|
1,320
|
|
|
$
|
(1,283
|
)
|
|
$
|
496
|
|
($ in thousands)
|
|
2018
|
|
2017
|
|
2016
|
||||||
Income tax at statutory rate
|
|
$
|
1,171
|
|
|
$
|
(1,046
|
)
|
|
$
|
440
|
|
State income taxes, net of Federal benefit
|
|
317
|
|
|
(185
|
)
|
|
66
|
|
|||
Oil and mineral depletion
|
|
(134
|
)
|
|
(180
|
)
|
|
(161
|
)
|
|||
Permanent differences
|
|
19
|
|
|
25
|
|
|
82
|
|
|||
Excess stock compensation expense
|
|
(20
|
)
|
|
107
|
|
|
—
|
|
|||
U.S. Tax Reform adjustment
|
|
—
|
|
|
54
|
|
|
—
|
|
|||
Other
|
|
(33
|
)
|
|
(58
|
)
|
|
69
|
|
|||
(Benefit) provision for income taxes
|
|
$
|
1,320
|
|
|
$
|
(1,283
|
)
|
|
$
|
496
|
|
Effective tax rate
|
|
23.8
|
%
|
|
41.3
|
%
|
|
39.6
|
%
|
($ in thousands)
|
|
2018
|
|
2017
|
||||
Deferred income tax assets:
|
|
|
|
|
||||
Accrued expenses
|
|
$
|
318
|
|
|
$
|
393
|
|
Deferred revenues
|
|
697
|
|
|
209
|
|
||
Capitalization of costs
|
|
1,937
|
|
|
2,138
|
|
||
Pension adjustment
|
|
2,937
|
|
|
2,996
|
|
||
Stock grant expense
|
|
2,674
|
|
|
2,130
|
|
||
State deferred taxes
|
|
25
|
|
|
—
|
|
||
Book deferred gains
|
|
941
|
|
|
941
|
|
||
Joint venture allocations
|
|
1,091
|
|
|
1,025
|
|
||
Provision for additional capitalized costs
|
|
699
|
|
|
699
|
|
||
Interest rate swap
|
|
—
|
|
|
267
|
|
||
Other
|
|
155
|
|
|
423
|
|
||
Total deferred income tax assets
|
|
$
|
11,474
|
|
|
$
|
11,221
|
|
Deferred income tax liabilities:
|
|
|
|
|
||||
Deferred gains
|
|
$
|
32
|
|
|
$
|
32
|
|
Depreciation
|
|
3,100
|
|
|
3,563
|
|
||
Cost of sales allocations
|
|
872
|
|
|
872
|
|
||
Joint venture allocations
|
|
4,914
|
|
|
3,972
|
|
||
Straight line rent
|
|
611
|
|
|
631
|
|
||
Prepaid expenses
|
|
298
|
|
|
132
|
|
||
State deferred taxes
|
|
256
|
|
|
322
|
|
||
Interest rate swap
|
|
28
|
|
|
—
|
|
||
Other
|
|
134
|
|
|
135
|
|
||
Total deferred income tax liabilities
|
|
$
|
10,245
|
|
|
$
|
9,659
|
|
Net deferred income tax asset
|
|
$
|
1,229
|
|
|
$
|
1,562
|
|
Allowance for deferred tax assets
|
|
—
|
|
|
—
|
|
||
Net deferred taxes
|
|
$
|
1,229
|
|
|
$
|
1,562
|
|
|
|
2018
|
|
2017
|
|
2016
|
||||||
Base rent
|
|
$
|
5,924,000
|
|
|
$
|
5,711,000
|
|
|
$
|
5,613,000
|
|
Percentage rent
|
|
$
|
621,000
|
|
|
$
|
677,000
|
|
|
$
|
495,000
|
|
2019
|
|
2020
|
|
2021
|
|
2022
|
|
2023
|
|
Thereafter
|
||||||||||||
$
|
5,749
|
|
|
$
|
5,664
|
|
|
$
|
5,492
|
|
|
$
|
5,305
|
|
|
$
|
4,964
|
|
|
$
|
26,007
|
|
($ in thousands)
|
|
2018
|
|
2017
|
||||
Change in benefit obligation - Pension
|
|
|
|
|
||||
Benefit obligation at beginning of year
|
|
$
|
10,099
|
|
|
$
|
9,905
|
|
Service cost
|
|
—
|
|
|
15
|
|
||
Interest cost
|
|
365
|
|
|
386
|
|
||
Actuarial (gain)/assumption changes
|
|
(837
|
)
|
|
1,505
|
|
||
Benefits paid
|
|
(221
|
)
|
|
(124
|
)
|
||
Settlements paid
|
|
—
|
|
|
(1,588
|
)
|
||
Benefit obligation at end of year
|
|
$
|
9,406
|
|
|
$
|
10,099
|
|
Accumulated benefit obligation at end of year
|
|
$
|
9,406
|
|
|
$
|
10,099
|
|
Change in Plan Assets
|
|
|
|
|
||||
Fair value of plan assets at beginning of year
|
|
$
|
7,819
|
|
|
$
|
6,974
|
|
Actual return on plan assets
|
|
(505
|
)
|
|
804
|
|
||
Employer contribution
|
|
165
|
|
|
165
|
|
||
Benefits/expenses paid
|
|
(221
|
)
|
|
(124
|
)
|
||
Fair value of plan assets at end of year
|
|
$
|
7,258
|
|
|
$
|
7,819
|
|
Funded status - liability
|
|
$
|
(2,148
|
)
|
|
$
|
(2,280
|
)
|
|
|
|
|
|
||||
Amounts recorded in equity
|
|
|
|
|
||||
Net actuarial loss
|
|
$
|
3,162
|
|
|
$
|
2,973
|
|
Total amount recorded
|
|
$
|
3,162
|
|
|
$
|
2,973
|
|
Amount recorded, net taxes
|
|
$
|
2,277
|
|
|
$
|
1,784
|
|
($ in thousands)
|
|
2018
|
|
2017
|
||||
Net loss (gain)
|
|
$
|
253
|
|
|
$
|
(355
|
)
|
Recognition of net actuarial loss
|
|
(64
|
)
|
|
(137
|
)
|
||
Recognized prior service cost
|
|
—
|
|
|
61
|
|
||
Total changes
|
|
$
|
189
|
|
|
$
|
(431
|
)
|
Changes, net of taxes
|
|
$
|
136
|
|
|
$
|
(259
|
)
|
Expected return on plan assets
|
$
|
522
|
|
Interest cost
|
(389
|
)
|
|
Amortization of net gain/(loss)
|
(75
|
)
|
|
Net periodic pension benefit/(cost)
|
$
|
58
|
|
2019
|
|
2020
|
|
2021
|
|
2022
|
|
2023
|
|
Thereafter
|
||||||||||||
$
|
274
|
|
|
$
|
276
|
|
|
$
|
291
|
|
|
$
|
294
|
|
|
$
|
352
|
|
|
$
|
2,494
|
|
($ in thousands)
|
|
Fair Value Hierarchy
|
|
2018
|
|
2017
|
||||
Pension Plan Assets:
|
|
|
|
|
|
|
||||
Cash and Cash Equivalents
|
|
Level 1
|
|
$
|
95
|
|
|
$
|
455
|
|
Collective Funds
|
|
Level 2
|
|
7,163
|
|
|
3,942
|
|
||
Treasury/Corporate Notes
|
|
Level 2
|
|
—
|
|
|
1,583
|
|
||
Corporate Equities
|
|
Level 1
|
|
—
|
|
|
1,839
|
|
||
Fair value of plan assets
|
|
|
|
$
|
7,258
|
|
|
$
|
7,819
|
|
($ in thousands)
|
|
2018
|
|
2017
|
|
2016
|
||||||
Cost components:
|
|
|
|
|
|
|
||||||
Service cost
|
|
$
|
—
|
|
|
$
|
(15
|
)
|
|
$
|
(223
|
)
|
Interest cost
|
|
(365
|
)
|
|
(386
|
)
|
|
(406
|
)
|
|||
Expected return on plan assets
|
|
585
|
|
|
531
|
|
|
517
|
|
|||
Net amortization and deferral
|
|
(64
|
)
|
|
(122
|
)
|
|
(184
|
)
|
|||
Settlement recognition
|
|
—
|
|
|
47
|
|
|
—
|
|
|||
Total net periodic pension earnings/(cost)
|
|
$
|
156
|
|
|
$
|
55
|
|
|
$
|
(296
|
)
|
($ in thousands)
|
|
2018
|
|
2017
|
||||
Change in benefit obligation - SERP
|
|
|
|
|
||||
Benefit obligation at beginning of year
|
|
$
|
7,759
|
|
|
$
|
8,015
|
|
Interest cost
|
|
268
|
|
|
287
|
|
||
Actuarial gain/assumption changes
|
|
267
|
|
|
466
|
|
||
Benefits paid
|
|
(544
|
)
|
|
(444
|
)
|
||
Curtailments
|
|
—
|
|
|
(565
|
)
|
||
Benefit obligation at end of year
|
|
$
|
7,750
|
|
|
$
|
7,759
|
|
Accumulated benefit obligation at end of year
|
|
$
|
7,750
|
|
|
$
|
7,759
|
|
Funded status - liability
|
|
$
|
(7,750
|
)
|
|
$
|
(7,759
|
)
|
($ in thousands)
|
|
2018
|
|
2017
|
||||
Amounts recorded in stockholders’ equity
|
|
|
|
|
||||
Net actuarial loss (gain)
|
|
$
|
1,978
|
|
|
$
|
1,935
|
|
Total amount recorded
|
|
$
|
1,978
|
|
|
$
|
1,935
|
|
Amount recorded, net taxes
|
|
$
|
1,425
|
|
|
$
|
1,161
|
|
($ in thousands)
|
|
2018
|
|
2017
|
||||
Net (gain) loss
|
|
$
|
109
|
|
|
$
|
(101
|
)
|
Recognition of net actuarial gain or (loss)
|
|
(66
|
)
|
|
(212
|
)
|
||
Total changes
|
|
$
|
43
|
|
|
$
|
(313
|
)
|
Changes, net of taxes
|
|
$
|
31
|
|
|
$
|
188
|
|
Interest cost
|
$
|
(304
|
)
|
Amortization of net (gain)/loss
|
(62
|
)
|
|
Net periodic pension earnings/(cost)
|
$
|
(366
|
)
|
2019
|
|
2020
|
|
2021
|
|
2022
|
|
2023
|
|
Thereafter
|
||||||||||||
$
|
527
|
|
|
$
|
523
|
|
|
$
|
519
|
|
|
$
|
514
|
|
|
$
|
508
|
|
|
$
|
2,738
|
|
($ in thousands)
|
|
2018
|
|
2017
|
|
2016
|
||||||
Cost components:
|
|
|
|
|
|
|
||||||
Interest cost
|
|
$
|
(268
|
)
|
|
$
|
(287
|
)
|
|
$
|
(323
|
)
|
Net amortization and other
|
|
(223
|
)
|
|
(211
|
)
|
|
(343
|
)
|
|||
Total net periodic pension earnings/(cost)
|
|
$
|
(491
|
)
|
|
$
|
(498
|
)
|
|
$
|
(666
|
)
|
($ in thousands)
|
|
2018
|
|
2017
|
|
2016
|
||||||
Oil and gas
|
|
$
|
2,278
|
|
|
$
|
1,659
|
|
|
$
|
1,549
|
|
Rock aggregate
|
|
1,143
|
|
|
1,072
|
|
|
1,164
|
|
|||
Cement
|
|
1,695
|
|
|
1,614
|
|
|
1,299
|
|
|||
Exploration leases
|
|
102
|
|
|
102
|
|
|
176
|
|
|||
Water sales
|
|
9,142
|
|
|
1,254
|
|
|
9,601
|
|
|||
Reimbursable
|
|
35
|
|
|
282
|
|
|
364
|
|
|||
Total mineral resources revenues
|
|
$
|
14,395
|
|
|
$
|
5,983
|
|
|
$
|
14,153
|
|
($ in thousands)
|
|
2018
|
|
2017
|
|
2016
|
||||||
Almonds
|
|
$
|
5,744
|
|
|
$
|
6,327
|
|
|
$
|
7,373
|
|
Pistachios
|
|
7,880
|
|
|
4,523
|
|
|
6,199
|
|
|||
Wine grapes
|
|
3,683
|
|
|
4,131
|
|
|
3,744
|
|
|||
Hay
|
|
297
|
|
|
456
|
|
|
520
|
|
|||
Total crop proceeds
|
|
17,604
|
|
|
15,437
|
|
|
17,836
|
|
|||
Other farming revenues
|
|
959
|
|
|
997
|
|
|
812
|
|
|||
Total farming revenues
|
|
$
|
18,563
|
|
|
$
|
16,434
|
|
|
$
|
18,648
|
|
($ in thousands)
|
|
2018
|
|
2017
|
|
2016
|
||||||
Game management
|
|
$
|
1,382
|
|
|
$
|
1,291
|
|
|
$
|
1,296
|
|
Grazing
|
|
1,520
|
|
|
1,677
|
|
|
1,187
|
|
|||
High Desert Hunt Club
|
|
305
|
|
|
351
|
|
|
334
|
|
|||
Filming and other
|
|
484
|
|
|
518
|
|
|
521
|
|
|||
Total ranch operations revenues
|
|
$
|
3,691
|
|
|
$
|
3,837
|
|
|
$
|
3,338
|
|
($ in thousands)
|
|
Identifiable
Assets
|
|
Depreciation and Amortization
|
|
Capital
Expenditures
|
||||||
2018
|
|
|
|
|
|
|
||||||
Real estate - commercial/industrial
|
|
$
|
65,929
|
|
|
$
|
651
|
|
|
$
|
5,225
|
|
Real estate - resort/residential
|
|
273,620
|
|
|
58
|
|
|
13,459
|
|
|||
Mineral resources
|
|
54,144
|
|
|
1,372
|
|
|
171
|
|
|||
Farming
|
|
40,835
|
|
|
1,897
|
|
|
3,166
|
|
|||
Ranch operations
|
|
2,973
|
|
|
536
|
|
|
102
|
|
|||
Corporate
|
|
91,547
|
|
|
910
|
|
|
457
|
|
|||
Total
|
|
$
|
529,048
|
|
|
$
|
5,424
|
|
|
$
|
22,580
|
|
2017
|
|
|
|
|
|
|
||||||
Real estate - commercial/industrial
|
|
$
|
63,065
|
|
|
$
|
650
|
|
|
$
|
4,638
|
|
Real estate - resort/residential
|
|
258,697
|
|
|
63
|
|
|
14,230
|
|
|||
Mineral resources
|
|
48,305
|
|
|
1,363
|
|
|
356
|
|
|||
Farming
|
|
36,317
|
|
|
2,080
|
|
|
2,129
|
|
|||
Ranch operations
|
|
3,625
|
|
|
601
|
|
|
220
|
|
|||
Corporate
|
|
108,190
|
|
|
932
|
|
|
136
|
|
|||
Total
|
|
$
|
518,199
|
|
|
$
|
5,689
|
|
|
$
|
21,709
|
|
2016
|
|
|
|
|
|
|
||||||
Real estate - commercial/industrial
|
|
$
|
65,290
|
|
|
$
|
614
|
|
|
$
|
5,196
|
|
Real estate - resort/residential
|
|
243,963
|
|
|
77
|
|
|
16,013
|
|
|||
Mineral resources
|
|
45,066
|
|
|
1,357
|
|
|
2,161
|
|
|||
Farming
|
|
36,895
|
|
|
2,146
|
|
|
2,006
|
|
|||
Ranch operations
|
|
3,893
|
|
|
614
|
|
|
523
|
|
|||
Corporate
|
|
44,434
|
|
|
849
|
|
|
481
|
|
|||
Total
|
|
$
|
439,541
|
|
|
$
|
5,657
|
|
|
$
|
26,380
|
|
•
|
Petro Travel Plaza Holdings LLC – TA/Petro is an unconsolidated joint venture with TravelCenters of America, LLC for the development and management of travel plazas and convenience stores. The Company has
50%
voting rights and shares
60%
of profit and losses in this joint venture. It houses multiple commercial eating establishments as well as diesel and gasoline operations in TRCC. The Company does not control the investment due to it having only
50%
voting rights, and because our partner in the joint venture is the managing partner and performs all of the day-to-day operations and has significant decision-making authority regarding key business components such as fuel inventory and pricing at the facility. At
December 31, 2018
, the Company had an equity investment balance of
$18,426,000
in this joint venture.
|
•
|
Majestic Realty Co. – Majestic Realty Co., or Majestic, is a privately-held developer and owner of master planned business parks in the United States. The Company partnered with Majestic to form
three
50/50 joint ventures to acquire, develop, manage, and operate industrial real estate at TRCC. The partners have equal voting rights and equally share in the profit and loss of the joint venture. The Company and Majestic guarantee the performance of all outstanding debt. At
December 31, 2018
, the Company's investment in these joint ventures was
$0
, which includes our outside basis.
|
◦
|
In November 2018, TRC-MRC 3, LLC was formed to pursue the development, construction, leasing, and management of a
579,040
square foot industrial building on the Company's property at TRCC-East. We anticipate construction completion in 2019, and plan to deliver the space in the fourth quarter of 2019 to a tenant that has entered into a lease agreement to occupy
67%
of this rentable space. At December 31, 2018, there was no activity within this joint venture.
|
◦
|
In August 2016, we partnered with Majestic to form TRC-MRC 2, LLC to acquire, lease, and maintain a fully occupied warehouse at TRCC-West. The partnership acquired the
651,909
square foot building for
$24,773,000
and was largely financed through a promissory note guaranteed by both partners. The promissory note was refinanced on June 1, 2018 with a
$25,240,000
promissory note. The note matures on July 1, 2028, and currently has an outstanding principal balance of
$25,014,000
. Since inception, we have received excess distributions resulting in a deficit balance of
$2,526,000
. In accordance with the applicable accounting guidance, these excess distributions are reclassified to the liabilities section of our consolidated balance sheet. We will continue to record our equity in the net income as a debit to the investment account, and if it becomes positive, it will again be shown as an asset on our consolidated balance sheet. If it becomes obvious that any excess distribution may not be returned (upon joint venture liquidation or otherwise), we will recognize any balance classified as a liability as income immediately.
|
◦
|
In September 2016, TRC-MRC 1, LLC was formed to develop and operate an approximately
480,480
square foot industrial building at TRCC-East. The joint venture completed construction of the building during the third quarter of 2017. Since inception of the joint venture, we have received excess distributions resulting in a deficit balance of
$264,000
. In accordance with the applicable accounting guidance, these excess distributions are reclassified to the liabilities section of our consolidated balance sheet. We will continue to record our equity in the net income as a debit to the investment account, and if it becomes positive, it will again be shown as an asset on our consolidated balance sheet. If it becomes obvious that any excess distribution may not be returned (upon joint venture liquidation or otherwise), we will recognize any balance classified as a liability as income immediately. The joint venture refinanced its construction loan in December 2018 with a mortgage loan. The original principal balance of the mortgage loan was
$25,030,000
, of which
$25,030,000
was outstanding at
December 31, 2018
. Half of the facility is currently leased to Dollar General. In August of 2018, the joint venture agreed to terms on a lease for the other half of the facility with L’Oréal USA, the largest subsidiary of L’Oréal, that will bring SalonCentric, L’Oréal USA’s professional salon distribution operation, to TRCC.
|
•
|
Rockefeller Joint Ventures – The Company has
three
joint ventures with Rockefeller Group Development Corporation or Rockefeller. At
December 31, 2018
, the Company’s combined equity investment balance in these three joint ventures was
$10,176,000
.
|
◦
|
Two
joint ventures are for the development of buildings on approximately
91
acres and are part of an agreement for the potential development of up to
500
acres of land in TRCC that are tied to Foreign Trade Zone designation. The Company owns a
50%
interest in each of the joint ventures. Currently the Five West Parcel LLC joint venture owns and leases a
606,000
square foot building to Dollar General, which has now been extended to July 2022, and includes an option to extend for an additional three years. For operating revenue, please see the following table. The Five West Parcel joint venture currently has an outstanding term loan with a balance of
$9,173,000
that matures on May 5, 2022. The Company and Rockefeller guarantee the performance of the debt. The second of these joint ventures, 18-19 West LLC, was formed in August 2009 through the contribution of
61.5
acres of land by the Company, which is being held for future development. Both of these joint ventures are being accounted for under the equity method due to both members having significant participating rights in the management of the ventures.
|
◦
|
The third joint venture is the TRCC/Rock Outlet Center LLC joint venture that was formed during the second quarter of 2013 to develop, own, and manage a net leasable
326,000
square foot outlet center on land at TRCC-East. The cost of the outlet center was approximately
$87,000,000
and was funded through a construction loan for up to
60%
of the costs and the remaining
40%
was through equity contributions from the
two
members. The Company controls
50%
of the voting interests of TRCC/Rock Outlet Center LLC; thus, it does not control by voting interest alone. The Company is the named managing member. The managing member's responsibilities relate to the routine day-to-day activities of TRCC/Rock Outlet Center LLC. However, all operating decisions during development and operations, including the setting and monitoring of the budget, leasing, marketing, financing and selection of the contractor for any of the project's construction, are jointly made by both members of the joint venture. Therefore, the Company concluded that both members have significant participating rights that are sufficient to overcome the presumption of the Company controlling the joint venture through it being named the managing member. Therefore, the investment in TRCC/Rock Outlet Center LLC is being accounted for under the equity method. The TRCC/Rock Outlet Center LLC joint venture is separate from the aforementioned agreement to potentially develop up to
500
acres of land in TRCC. During the fourth quarter of 2013, the TRCC/Rock Outlet Center LLC joint venture entered into a construction line of credit agreement with a financial institution for
$52,000,000
that, as of
December 31, 2018
, had an outstanding balance of
$46,826,000
. The Company and Rockefeller guarantee the performance of the debt.
|
•
|
Centennial Founders, LLC – Centennial Founders, LLC, or CFL, is a joint venture that was initially formed with TRI Pointe Homes, Lewis Investment Company and CalAtlantic to pursue the entitlement and development of land that the Company owns in Los Angeles County. Based on the Second Amended and Restated Limited Company Agreement of CFL and the change in control and funding that resulted from the amended agreement, CFL qualified as a VIE, beginning in the third quarter of 2009, and the Company was determined to be the primary beneficiary. As a result, CFL has been consolidated into our financial statements beginning in that quarter. Our partners retained a noncontrolling interest in the joint venture. On November 30, 2016, CFL and Lewis entered a Redemption and Withdrawal Agreement, whereby Lewis irrevocably and unconditionally withdrew as a member of CFL, and CFL redeemed Lewis' entire interest for no consideration. As a result, our noncontrolling interest balance was reduced by
$11,039,000
. On December 31, 2018, CFL and CalAtlantic entered a Redemption and Withdrawal Agreement, whereby CalAtlantic irrevocably and unconditionally withdrew as a member of CFL, and CFL redeemed CalAtlantic's entire interest for no consideration. As a result, our noncontrolling interest balance was reduced by
$13,172,000
. At
December 31, 2018
, the Company owned
83.50%
of CFL.
|
|
Joint Venture
|
|
TRC
|
||||||||||||||||||||||||||||||||
|
Revenues
|
|
Earnings(Loss)
|
|
Equity in Earnings (Loss)
|
||||||||||||||||||||||||||||||
|
2018
|
|
2017
|
|
2016
|
|
2018
|
|
2017
|
|
2016
|
|
2018
|
|
2017
|
|
2016
|
||||||||||||||||||
Petro Travel Plaza Holdings, LLC
|
$
|
119,083
|
|
|
$
|
105,507
|
|
|
$
|
100,605
|
|
|
$
|
9,672
|
|
|
$
|
10,418
|
|
|
$
|
12,077
|
|
|
$
|
5,803
|
|
|
$
|
6,251
|
|
|
$
|
7,246
|
|
Five West Parcel, LLC
|
2,731
|
|
|
2,824
|
|
|
2,887
|
|
|
778
|
|
|
905
|
|
|
1,029
|
|
|
389
|
|
|
452
|
|
|
515
|
|
|||||||||
18-19 West, LLC
|
13
|
|
|
11
|
|
|
10
|
|
|
(102
|
)
|
|
(97
|
)
|
|
(129
|
)
|
|
(51
|
)
|
|
(48
|
)
|
|
(65
|
)
|
|||||||||
TRCC/Rock Outlet Center, LLC
1
|
6,418
|
|
|
9,615
|
|
|
9,542
|
|
|
(4,645
|
)
|
|
(2,347
|
)
|
|
(367
|
)
|
|
(2,323
|
)
|
|
(1,173
|
)
|
|
(184
|
)
|
|||||||||
TRC-MRC 1, LLC
|
1,323
|
|
|
—
|
|
|
—
|
|
|
(498
|
)
|
|
(3
|
)
|
|
—
|
|
|
(249
|
)
|
|
(2
|
)
|
|
—
|
|
|||||||||
TRC-MRC 2, LLC
2
|
3,981
|
|
|
3,655
|
|
|
1,178
|
|
|
529
|
|
|
(2,505
|
)
|
|
(828
|
)
|
|
265
|
|
|
(1,253
|
)
|
|
(414
|
)
|
|||||||||
|
$
|
133,549
|
|
|
$
|
121,612
|
|
|
$
|
114,222
|
|
|
$
|
5,734
|
|
|
$
|
6,371
|
|
|
$
|
11,782
|
|
|
$
|
3,834
|
|
|
$
|
4,227
|
|
|
$
|
7,098
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||
Centennial Founders, LLC
|
$
|
297
|
|
|
$
|
456
|
|
|
$
|
520
|
|
|
$
|
(249
|
)
|
|
$
|
(144
|
)
|
|
$
|
(246
|
)
|
|
Consolidated
|
||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||
(1) Revenues for TRCC/Rock Outlet Center are presented net of non-cash tenant allowance amortization of $1.7 million, $1.8 million and $1.9 million for the years ended December 31, 2018, 2017, and 2016, respectively.
|
|||||||||||||||||||||||||||||||||||
(2)Earnings for TRC-MRC 2, LLC include non-cash amortization of purchase accounting adjustments related to in-place leases of $0.8 million and $4.0 million for the years ended December 31, 2018 and 2017.
|
($ in thousands, except per share)
|
|
Total
Revenue
1
|
|
Segment
Profit
(Loss)
|
|
Net (Loss) Income
|
|
Net (Loss) Income attributable to Common Stockholders
|
|
Net (Loss) Income Per Share
|
|
Net (Loss) Income, Per Share attributable to Common Stockholders
2
|
||||||||||||
2018
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
First Quarter
|
|
$
|
13,738
|
|
|
$
|
4,277
|
|
|
$
|
1,455
|
|
|
$
|
1,457
|
|
|
$
|
0.06
|
|
|
$
|
0.06
|
|
Second Quarter
|
|
5,406
|
|
|
115
|
|
|
(1,013
|
)
|
|
(997
|
)
|
|
(0.04
|
)
|
|
(0.04
|
)
|
||||||
Third Quarter
|
|
15,767
|
|
|
4,815
|
|
|
3,487
|
|
|
3,488
|
|
|
0.13
|
|
|
0.13
|
|
||||||
Fourth Quarter
|
|
11,993
|
|
|
934
|
|
|
306
|
|
|
307
|
|
|
0.01
|
|
|
0.01
|
|
||||||
|
|
$
|
46,904
|
|
|
$
|
10,141
|
|
|
$
|
4,235
|
|
|
$
|
4,255
|
|
|
|
|
|
||||
2017
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
First Quarter
|
|
$
|
5,791
|
|
|
$
|
(811
|
)
|
|
$
|
(1,913
|
)
|
|
$
|
(1,902
|
)
|
|
$
|
(0.09
|
)
|
|
$
|
(0.09
|
)
|
Second Quarter
|
|
5,783
|
|
|
313
|
|
|
(203
|
)
|
|
(176
|
)
|
|
(0.01
|
)
|
|
(0.01
|
)
|
||||||
Third Quarter
|
|
11,997
|
|
|
720
|
|
|
(26
|
)
|
|
(22
|
)
|
|
—
|
|
|
—
|
|
||||||
Fourth Quarter
|
|
11,871
|
|
|
1,973
|
|
|
321
|
|
|
303
|
|
|
0.01
|
|
|
0.01
|
|
||||||
|
|
$
|
35,442
|
|
|
$
|
2,195
|
|
|
$
|
(1,821
|
)
|
|
$
|
(1,797
|
)
|
|
|
|
|
A.
|
SPIC, Standard Pacific, Pardee, Tejon and Lewis Investment Company LLC, a California limited liability company (“
Lewis
”) entered into that certain Second Amended and Restated Limited Liability Company Agreement of Centennial Founders, LLC (formerly known as RM Development Associates, LLC) (the “
Company
”), dated as of July 31, 2009 (the “
Second Amended and Restated LLC Effective Date
”) (such agreement, the “
Second Amended and Restated LLC Agreement
”), as amended by that certain First Amendment to Second Amended and Restated Limited Liability Company Agreement of Centennial Founders, LLC dated as of November 30, 2016 (the “
First Amendment
”), as further amended by that certain Second Amendment to Second Amended and Restated Limited Liability Company of Centennial Founders, LLC dated as of November 30, 2016 (the “
Second Amendment
”), as further amended by that certain Third Amendment to Second Amended and Restated Limited Liability Company Agreement of Centennial Founders, LLC dated as of February 1, 2018 (the “
Third Amendment
” and, as amended by this Fourth Amendment, collectively the “
LLC Agreement
”).
|
B.
|
Effective December 31, 2014, Lewis formed Lewis Tejon Member, LLC, a Delaware limited liability company (“
LTM
”), and contributed and assigned all of its Interest as a member in the Company to LTM.
|
C.
|
As of the Second Amended and Restated LLC Effective Date, Lewis, Pardee, SPIC and Standard Pacific elected to become Non-Funding Members. Pursuant to that certain
|
1205278.06/OC
999903-14000/2-15-19/pdo/agt
|
|
|
D.
|
As a result of the Non-Funding Members’ failure to fund any additional capital requested under the LLC Agreement, the Percentage Interests of the Members as of immediately prior to the Fourth Amendment Effective Date are as follows (the “
Fourth Amendment Effective Date Percentage Interests
”):
|
E.
|
Pursuant to Section 13.1A of the LLC Agreement, a Non-Funding Member may elect to withdraw as a member of the Company at any time by delivering written notice of such election to Tejon.
|
F.
|
Effective concurrently herewith, the CA Withdrawing Members have each elected to withdraw as members of the Company and to accept a liquidation of their respective Interests therein (the “
CA Withdrawal
”) pursuant to that certain Redemption and Withdrawal Agreement dated as of the date hereof by and between the Company and the CA Withdrawing Members (the “
CA Redemption Agreement
”).
|
G.
|
Effective upon the CA Withdrawal, the Percentage Interests of the Remaining Members shall be adjusted (by reallocating the CA Withdrawing Members’ Fourth Amendment Effective Date Percentage Interest to the Remaining Members in proportion to such Remaining Members’ relative Fourth Amendment Effective Date Percentage Interests) and the Percentage Interests of the Remaining Members immediately following such adjustment shall be as follows:
|
1205278.06/OC
999903-14000/2-15-19/pdo/agt
|
2
|
|
H.
|
Pursuant to Section 10.1 of the LLC Agreement, the Eligible Developers (and their respective designated Affiliates) have the right to make offers to purchase and acquire Private Sale Lots and to use their respective Applicable Lot Credits for such purchases, subject to the terms and conditions contained in the LLC Agreement. If the Specific Plan Approval(s) are not obtained prior to the Specific Plan Approvals Deadline(s), then such rights automatically terminate, subject to the terms and conditions contained in the LLC Agreement. Further, and subject to the terms and conditions contained in the LLC Agreement, the Company has a right to call and redeem the Interest of any Non-Electing Developer pursuant to Section 13.1C of the LLC Agreement if the Company fails to obtain a Specific Plan Approval from the Los Angeles County Board of Supervisors by the Specific Plan Approvals Deadline applicable thereto. The Third Amendment amended Section 10.1 of the LLC Agreement to, among other things, extend the Specific Plan Approvals Deadline to obtain final approval from the Los Angeles Board of Supervisors of the Specific Plan from March 15, 2018 to September 30, 2018. Final approval from the Los Angeles Board of Supervisors of the Specific Plan was not obtained by the September 30, 2018 Specific Plan Approvals Deadline.
|
I.
|
Although the Company did not obtain final approval from the Los Angeles Board of Supervisors of the Specific Plan by September 30, 2018, in consideration of Pardee’s efforts toward assisting the Company achieve such Specific Plan Approval, the Remaining Members now desire to amend the LLC Agreement for the benefit of Pardee to extend (i) each Specific Plan Approvals Deadline only with respect to Pardee, and (ii) the date that Pardee may elect to withdraw as a member of the Company and still be defined as a Subsequent Withdrawing Developer, in each case, as set forth herein, and the CA Withdrawing Members now desire to acknowledge the same and their withdrawal from the Company as provided in the CA Redemption Agreement, all as set forth below.
|
1205278.06/OC
999903-14000/2-15-19/pdo/agt
|
3
|
|
1205278.06/OC
999903-14000/2-15-19/pdo/agt
|
4
|
|
1205278.06/OC
999903-14000/2-15-19/pdo/agt
|
5
|
|
1205278.06/OC
999903-14000/2-15-19/pdo/agt
|
6
|
|
1205278.06/OC
999903-14000/2-15-19/pdo/agt
|
7
|
|
1205278.06/OC
999903-14000/2-15-19/pdo/agt
|
8
|
|
1205278.06/OC
999903-14000/2-15-19/pdo/agt
|
9
|
|
1207186.02/OC
373915-00006/pdo/agt
|
|
|
1207186.02/OC
373915-00006/pdo/agt
|
2
|
|
1207186.02/OC
373915-00006/pdo/agt
|
3
|
|
1207186.02/OC
373915-00006/pdo/agt
|
4
|
|
1207186.02/OC
373915-00006/pdo/agt
|
5
|
|
1207186.02/OC
373915-00006/pdo/agt
|
6
|
|
1207186.02/OC
373915-00006/pdo/agt
|
7
|
|
1207186.02/OC
373915-00006/pdo/agt
|
8
|
|
1207186.02/OC
373915-00006/pdo/agt
|
9
|
|
1207186.02/OC
373915-00006/pdo/agt
|
10
|
|
1207186.02/OC
373915-00006/pdo/agt
|
11
|
|
1207186.02/OC
373915-00006/pdo/agt
|
12
|
|
1207186.02/OC
373915-00006/pdo/agt
|
13
|
|
1207186.02/OC
373915-00006/pdo/agt
|
14
|
|
To Withdrawing Member:
|
|
With a copy to:
|
Allen Matkins Leck Gamble Mallory & Natsis LLP
1900 Main Street, 5 th Floor Irvine, CA 92614 Facsimile: (949) 553-8354 Attention: Paul D. O'Connor, Esq. |
To the Company:
|
Centennial Partners, LLC
c/o Tejon Ranchcorp P.O. Box 1000 Lebec, CA 93243 Facsimile: (661) 248-3100 Attention: General Counsel |
With a copy to:
|
Cox, Castle & Nicholson LLP
50 California Street, Suite 3200 San Francisco, CA 94111 Attention: Mathew A. Wyman, Esq. Facsimile: (415) 262-5166 |
1207186.02/OC
373915-00006/pdo/agt
|
15
|
|
|
16
|
|
By:
|
Tejon Ranchcorp,
a California corporation, its Development Manager |
|
17
|
|
1207186.02/OC
373915-00006/pdo/agt
|
1
|
|
GSB
|
Tejon's Initials
|
1207186.02/OC
373915-00006/pdo/agt
|
2
|
|
a.
|
Tejon Ranchcorp, 100% owned by Registrant.
|
b.
|
Laval Agricultural Company, formerly Tejon Farming Company.
|
c.
|
Tejon Ranch Feedlot, Inc.
|
d.
|
White Wolf Corporation.
|
e.
|
Tejon Development Corporation.
|
f.
|
Tejon Industrial Corp.
|
g.
|
Tejon Energy LLC.
|
h.
|
Centennial Founders LLC, Delaware limited liability company, 84% owned by Tejon Ranchcorp.
|
i.
|
Tejon Hounds, LLC.
|
j.
|
Tejon Mountain Village, LLC., Delaware limited liability company.
|
k.
|
Tejon Ranch Wine Company, LLC.
|
m.
|
TRCC - West One, LLC.
|
(1)
|
Registration Statement (Form S-8 No. 333-210500) pertaining to the Amended and Restated 1998 Stock Incentive Plan and Amended and Restated Non-Employee Director Stock Incentive Plan of Tejon Ranch Co.,
|
(2)
|
Registration Statement (Form S-8 No. 333-152804) pertaining to the Amended and Restated 1998 Stock Incentive Plan of Tejon Ranch Co.,
|
(3)
|
Registration Statement (Form S-8 No. 333-68869) pertaining to the 1998 Stock Incentive Plan and Non-Employee Director Stock Incentive Plan of Tejon Ranch Co.,
|
(4)
|
Registration Statement (Form S-8 No. 333-70128) pertaining to the 1998 Stock Incentive Plan of Tejon Ranch Co.,
|
(5)
|
Registration Statement (Form S-8 No. 333-113887) pertaining to the Tejon Ranch Nonqualified Deferred Compensation Plan of Tejon Ranch Co.,
|
(6)
|
Registration Statement (Form S-3 No. 333-115946) of Tejon Ranch Co.,
|
(7)
|
Registration Statement (Form S-3 No. 333-130482) of Tejon Ranch Co.,
|
(8)
|
Registration Statement (Form S-3 No. 333-166167) of Tejon Ranch Co.,
|
(9)
|
Registration Statement (Form S-3 No. 333-184367) of Tejon Ranch Co.,
|
(10)
|
Registration Statement (Form S-3 No. 333-192824) of Tejon Ranch Co., and
|
(11)
|
Registration Statement (Form S-3 No. 333-210875) of Tejon Ranch Co.;
|
1.
|
I have reviewed this annual report on Form 10-K of Tejon Ranch Co.;
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
4.
|
The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15(d)-15(f)) for the registrant and have:
|
a.
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
b.
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
c.
|
Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
d.
|
Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
|
5.
|
The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
|
a.
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
|
b.
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
|
Dated:
|
March 1, 2019
|
/s/ Gregory S. Bielli
|
|
|
|
|
Gregory S. Bielli
|
|
|
|
Chief Executive Officer
|
1.
|
I have reviewed this annual report on Form 10-K of Tejon Ranch Co.;
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
4.
|
The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15(d)-15(f)) for the registrant and have:
|
a.
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
b.
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
c.
|
Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
d.
|
Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
|
5.
|
The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
|
a.
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
|
b.
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
|
Dated:
|
March 1, 2019
|
/s/ Robert D. Velasquez
|
|
|
|
|
Robert D. Velasquez
|
|
|
|
Chief Financial Officer
|
•
|
The Annual Report of the Company on Form 10-K for the period ended
December 31, 2018
fully complies with the requirements of Section 13(a) of the Securities Exchange Act of 1934; and
|
•
|
The information contained in such report fairly presents, in all material respects, the financial condition and results of operation of the Company.
|
Dated:
|
March 1, 2019
|
|
|
|
|
/s/ Gregory S. Bielli
|
|
|
Gregory S. Bielli
|
|
|
Chief Executive Officer
|
|
|
|
|
|
/s/ Robert D. Velasquez
|
|
|
Robert D. Velasquez
|
|
|
Chief Financial Officer
|
|
|
|
|
|
•
|
Net income attributable to common stockholders for the fourth quarter of
2018
was
$0.3 million
, or net income per share attributable to common stockholders, basic and diluted, of
$0.01
, compared with a net income attributable to common stockholders of
$0.3 million
, or net income per share attributable to common stockholders, basic and diluted, of $0.01, for the fourth quarter of fiscal
2017
.
|
•
|
Revenues and other income, including equity in earnings of unconsolidated joint ventures, for the fourth quarter of
2018
were
$13.4 million
, a increase of
$0.8 million
, or
6.6%
, compared with
$12.6 million
for the same period in
2017
. Factors behind this increase include:
|
◦
|
Revenues from mineral resources increased
$1.1 million
or
82.4%
due to fourth quarter water sales, there were no water sales in the fourth quarter of 2017. This increase was offset by reduced farming revenues of
$1.0 million
or
14.9%
resulting from lower 2018 almond crop yields.
|
◦
|
Improved equity in earnings from unconsolidated joint ventures of
$0.7 million
resulting from improved fuel revenues and higher margins from the Company's TA/Petro joint venture with TravelCenters of America.
|
•
|
Net income attributable to common stockholders for fiscal
2018
was
$4.3 million
, or net income per share attributable to common stockholders, basic and diluted, of
$0.16
, compared with a net loss attributable to common stockholders of
$1.8 million
, or a net loss per share attributable to common stockholders, basic and diluted, of
$0.08
, for fiscal
2017
.
|
•
|
Revenues and other income, including equity in earnings of unconsolidated joint ventures, were
$50.7 million
in fiscal
2018
, an increase of $11.0 million, or 27.7%, compared with
$39.7 million
in
2017
. Factors driving this increase include:
|
◦
|
An
$8.4 million
increase in mineral resources revenues due to significantly improved water sales in
2018
that were aided by moderate drought conditions in Kern County.
|
◦
|
A
$2.1 million
increase in farming revenues driven by record high pistachio yields compared to the depressed 2017 crop yields resulting from the alternate bearing nature of pistachios.
|
•
|
In January 2018, the Company obtained approval from Kern County on the first phase of Farm Village. Farm Village will serve as the commercial center and community gathering place for Mountain Village at Tejon Ranch, or MV, residents and visitors, as well as the gateway to MV.
|
•
|
During 2018, the U.S. Department of Commerce re-approved and expanded the Foreign Trade Zone, or FTZ. The expanded FTZ now covers all the industrial sites within TRCC, an area totaling 1,094 acres. The FTZ designation allows a user to secure many benefits and cost reductions associated with streamlined movement of goods in and out of the zone. This FTZ designation provides a marketing
|
•
|
The 480,480 square foot industrial building constructed in 2017, through a joint venture with Majestic Realty Co., a Los Angeles-based commercial/industrial developer, was fully-leased in 2018, with half the space leased to Dollar General and half to L'Oréal USA.
|
•
|
In November 2018, the Company formed TRC-MRC 3, its third joint venture with Majestic Realty Co., to pursue the development, construction, leasing, and management of a 579,040 square foot industrial building at TRCC
-
East. We anticipate construction completion and delivery of the space in the fourth quarter of 2019. Currently, a tenant has entered into a lease agreement occupying 67% of total rentable space.
|
•
|
The Company began development on a new 4,900 square foot multi-tenant retail building at TRCC - East to further expand our footprint at TRCC. Completion is anticipated in the third quarter of 2019.
|
•
|
In December 2018, we achieved a pivotal milestone in our regional development efforts: The Los Angeles County Board of Supervisors voted 4-1 in favor of our plan to develop Centennial at Tejon Ranch, taking the first step toward approving the mixed-use residential community located in the northwest Los Angeles County section of Tejon Ranch.
|
|
Three Months Ended December 31,
|
|
Year Ended
December 31,
|
||||||||||||
|
2018
|
|
2017
|
|
2018
|
|
2017
|
||||||||
Revenues:
|
|
|
|
|
|
|
|
||||||||
Real estate - commercial/industrial
|
$
|
2,182
|
|
|
$
|
2,297
|
|
|
$
|
8,970
|
|
|
$
|
9,001
|
|
Mineral resources
|
2,409
|
|
|
1,321
|
|
|
14,395
|
|
|
5,983
|
|
||||
Farming
|
5,990
|
|
|
7,036
|
|
|
18,563
|
|
|
16,434
|
|
||||
Ranch operations
|
1,067
|
|
|
1,028
|
|
|
3,691
|
|
|
3,837
|
|
||||
Total revenues from Operations
|
11,648
|
|
|
11,682
|
|
|
45,619
|
|
|
35,255
|
|
||||
Operating Profits (Loss):
|
|
|
|
|
|
|
|
||||||||
Real estate - commercial/industrial
|
321
|
|
|
728
|
|
|
2,724
|
|
|
2,472
|
|
||||
Real estate - resort/residential
|
(211
|
)
|
|
(554
|
)
|
|
(1,530
|
)
|
|
(1,955
|
)
|
||||
Mineral resources
|
1,586
|
|
|
738
|
|
|
8,172
|
|
|
3,019
|
|
||||
Farming
|
(468
|
)
|
|
1,337
|
|
|
2,535
|
|
|
233
|
|
||||
Ranch operations
|
(294
|
)
|
|
(276
|
)
|
|
(1,760
|
)
|
|
(1,574
|
)
|
||||
Income (loss) from Operating Segments
|
934
|
|
|
1,973
|
|
|
10,141
|
|
|
2,195
|
|
||||
Investment income
|
364
|
|
|
173
|
|
|
1,344
|
|
|
462
|
|
||||
Other income
|
(19
|
)
|
|
16
|
|
|
(59
|
)
|
|
(275
|
)
|
||||
Corporate expense
|
(2,409
|
)
|
|
(2,371
|
)
|
|
(9,705
|
)
|
|
(9,713
|
)
|
||||
(Loss) from operations before equity in earnings of unconsolidated joint ventures
|
(1,130
|
)
|
|
(209
|
)
|
|
1,721
|
|
|
(7,331
|
)
|
||||
Equity in earnings of unconsolidated joint ventures, net
|
1,423
|
|
|
715
|
|
|
3,834
|
|
|
4,227
|
|
||||
Income (loss) before income tax expense
|
293
|
|
|
506
|
|
|
5,555
|
|
|
(3,104
|
)
|
||||
Income tax expense (benefit)
|
(13
|
)
|
|
185
|
|
|
1,320
|
|
|
(1,283
|
)
|
||||
Net income (loss)
|
306
|
|
|
321
|
|
|
4,235
|
|
|
(1,821
|
)
|
||||
Net income (loss) attributable to non-controlling interest
|
(1
|
)
|
|
18
|
|
|
(20
|
)
|
|
(24
|
)
|
||||
Net income (loss) attributable to common stockholders
|
$
|
307
|
|
|
$
|
303
|
|
|
$
|
4,255
|
|
|
$
|
(1,797
|
)
|
Net income (loss) per share attributable to common stockholders, basic
|
$
|
0.01
|
|
|
$
|
0.01
|
|
|
$
|
0.16
|
|
|
$
|
(0.08
|
)
|
Net income (loss) per share attributable to common stockholders, diluted
|
$
|
0.01
|
|
|
$
|
0.01
|
|
|
$
|
0.16
|
|
|
$
|
(0.08
|
)
|
Weighted average number of shares outstanding:
|
|
|
|
|
|
|
|
||||||||
Common stock
|
25,968,802
|
|
|
24,136,930
|
|
|
25,948,189
|
|
|
21,677,981
|
|
||||
Common stock equivalents – stock options
|
14,758
|
|
|
30,003
|
|
|
27,715
|
|
|
40,409
|
|
||||
Diluted shares outstanding
|
25,983,560
|
|
|
24,166,933
|
|
|
25,975,904
|
|
|
21,718,390
|
|
Tejon Ranch Co.
|
Robert D. Velasquez, 661-248-3000
|
Chief Financial Officer
|
|
Three Months Ended December 31,
|
|
Year Ended
December 31,
|
||||||||||||
|
2018
|
|
2017
|
|
2018
|
|
2017
|
||||||||
Net income (loss)
|
$
|
306
|
|
|
$
|
321
|
|
|
$
|
4,235
|
|
|
$
|
(1,821
|
)
|
Net income (loss) attributed to non-controlling interest
|
(1
|
)
|
|
18
|
|
|
(20
|
)
|
|
(24
|
)
|
||||
Interest, net:
|
|
|
|
|
|
|
|
||||||||
Consolidated
|
(364
|
)
|
|
(173
|
)
|
|
(1,344
|
)
|
|
(462
|
)
|
||||
Our share of interest expense from unconsolidated joint ventures
|
751
|
|
|
468
|
|
|
2,519
|
|
|
1,730
|
|
||||
Total interest, net
|
387
|
|
|
295
|
|
|
1,175
|
|
|
1,268
|
|
||||
Income taxes (benefit)
|
(13
|
)
|
|
185
|
|
|
1,320
|
|
|
(1,283
|
)
|
||||
Depreciation and amortization:
|
|
|
|
|
|
|
|
||||||||
Consolidated
|
2,140
|
|
|
2,267
|
|
|
5,424
|
|
|
5,689
|
|
||||
Our share of depreciation and amortization from unconsolidated joint ventures
|
1,156
|
|
|
1,449
|
|
|
4,328
|
|
|
5,419
|
|
||||
Total depreciation and amortization
|
3,296
|
|
|
3,716
|
|
|
9,752
|
|
|
11,108
|
|
||||
EBITDA
|
3,977
|
|
|
4,499
|
|
|
16,502
|
|
|
9,296
|
|
||||
Stock compensation expense
|
647
|
|
|
981
|
|
|
3,248
|
|
|
3,552
|
|
||||
Adjusted EBITDA
|
$
|
4,624
|
|
|
$
|
5,480
|
|
|
$
|
19,750
|
|
|
$
|
12,848
|
|
|
/s/ RSM US LLP
|
|
December 31,
|
||||||
|
2018
|
|
2017
|
||||
Assets
|
|
|
|
|
|
||
Current assets:
|
|
|
|
|
|
||
Cash
|
$
|
7,489
|
|
|
$
|
7,272
|
|
Inventory
|
2,409
|
|
|
2,427
|
|
||
Due from affiliate, net
|
1,968
|
|
|
1,011
|
|
||
Other current assets
|
43
|
|
|
49
|
|
||
Total current assets
|
11,909
|
|
|
10,759
|
|
||
|
|
|
|
||||
Property and equipment, net
|
57,029
|
|
|
56,503
|
|
||
Other noncurrent assets, net
|
158
|
|
|
173
|
|
||
|
|
|
|
||||
Total assets
|
$
|
69,096
|
|
|
$
|
67,435
|
|
|
|
|
|
||||
Liabilities and Members' Capital
|
|
|
|
|
|
||
Current liabilities:
|
|
|
|
|
|
||
Accrued expenses and other current liabilities
|
$
|
2,258
|
|
|
$
|
2,262
|
|
Total current liabilities
|
2,258
|
|
|
2,262
|
|
||
|
|
|
|
||||
Long term debt, net
|
15,283
|
|
|
15,279
|
|
||
Other noncurrent liabilities
|
178
|
|
|
189
|
|
||
|
|
|
|
||||
Total liabilities
|
17,719
|
|
|
17,730
|
|
||
|
|
|
|
||||
Members' capital
|
51,377
|
|
|
49,705
|
|
||
|
|
|
|
||||
Total liabilities and members' capital
|
$
|
69,096
|
|
|
$
|
67,435
|
|
|
Year Ended December 31,
|
||||||||||
|
2018
|
|
2017
|
|
2016
|
||||||
Revenues:
|
|
|
|
|
|
|
|
|
|||
Fuel
|
$
|
85,871
|
|
|
$
|
73,505
|
|
|
$
|
69,284
|
|
Nonfuel
|
33,212
|
|
|
32,002
|
|
|
31,321
|
|
|||
Total revenues
|
119,083
|
|
|
105,507
|
|
|
100,605
|
|
|||
|
|
|
|
|
|
||||||
Costs and expenses:
|
|
|
|
|
|
||||||
Cost of goods sold (excluding depreciation and amortization):
|
|
|
|
|
|
||||||
Fuel
|
72,658
|
|
|
59,457
|
|
|
54,739
|
|
|||
Nonfuel
|
12,703
|
|
|
12,316
|
|
|
12,199
|
|
|||
Total cost of goods sold
|
85,361
|
|
|
71,773
|
|
|
66,938
|
|
|||
|
|
|
|
|
|
||||||
Operating expenses
|
20,870
|
|
|
20,458
|
|
|
18,743
|
|
|||
Depreciation and amortization
|
2,562
|
|
|
2,380
|
|
|
2,140
|
|
|||
|
|
|
|
|
|
||||||
Total costs and expenses
|
108,793
|
|
|
94,611
|
|
|
87,821
|
|
|||
|
|
|
|
|
|
||||||
Operating income
|
10,290
|
|
|
10,896
|
|
|
12,784
|
|
|||
|
|
|
|
|
|
||||||
Interest expense, net
|
618
|
|
|
478
|
|
|
707
|
|
|||
|
|
|
|
|
|
||||||
Net income and comprehensive income
|
$
|
9,672
|
|
|
$
|
10,418
|
|
|
$
|
12,077
|
|
|
Year Ended December 31,
|
||||||||||
|
2018
|
|
2017
|
|
2016
|
||||||
Cash flows from operating activities:
|
|
|
|
|
|
|
|
|
|||
Net income
|
$
|
9,672
|
|
|
$
|
10,418
|
|
|
$
|
12,077
|
|
Adjustments to reconcile net income to net cash provided
by operating activities:
|
|
|
|
|
|
|
|
|
|||
Depreciation and amortization
|
2,562
|
|
|
2,380
|
|
|
2,140
|
|
|||
Debt issuance costs
|
4
|
|
|
4
|
|
|
138
|
|
|||
Increase (decrease) from changes in:
|
|
|
|
|
|
|
|
|
|||
Inventory
|
18
|
|
|
(267
|
)
|
|
(193
|
)
|
|||
Other current assets
|
6
|
|
|
6
|
|
|
16
|
|
|||
Due from affiliate, net
|
(957
|
)
|
|
364
|
|
|
(1,422
|
)
|
|||
Accrued expenses and other current liabilities
|
(4
|
)
|
|
353
|
|
|
137
|
|
|||
Other, net
|
15
|
|
|
(9
|
)
|
|
30
|
|
|||
Net cash provided by operating activities
|
11,316
|
|
|
13,249
|
|
|
12,923
|
|
|||
|
|
|
|
|
|
||||||
Cash flows from investing activities:
|
|
|
|
|
|
|
|
|
|||
Purchases of property and equipment
|
(3,099
|
)
|
|
(2,992
|
)
|
|
(5,715
|
)
|
|||
Net cash used in investing activities
|
(3,099
|
)
|
|
(2,992
|
)
|
|
(5,715
|
)
|
|||
|
|
|
|
|
|
||||||
Cash flows from financing activities:
|
|
|
|
|
|
|
|
|
|||
Distributions to members
|
(8,000
|
)
|
|
(12,000
|
)
|
|
(7,500
|
)
|
|||
Repayments of long term debt
|
—
|
|
|
—
|
|
|
(543
|
)
|
|||
Payment of debt issuance costs
|
—
|
|
|
—
|
|
|
(58
|
)
|
|||
Net cash used in financing activities
|
(8,000
|
)
|
|
(12,000
|
)
|
|
(8,101
|
)
|
|||
|
|
|
|
|
|
||||||
Net increase (decrease) in cash
|
217
|
|
|
(1,743
|
)
|
|
(893
|
)
|
|||
Cash, beginning of period
|
7,272
|
|
|
9,015
|
|
|
9,908
|
|
|||
Cash, end of period
|
$
|
7,489
|
|
|
$
|
7,272
|
|
|
$
|
9,015
|
|
|
|
|
|
|
|
||||||
Supplemental cash flow information:
|
|
|
|
|
|
|
|
|
|||
Interest paid during the period
|
$
|
615
|
|
|
$
|
475
|
|
|
$
|
573
|
|
|
Members' Capital
|
||
Balance, December 31, 2015
|
$
|
46,710
|
|
Net income
|
12,077
|
|
|
Distributions to members
|
(7,500
|
)
|
|
Balance, December 31, 2016
|
51,287
|
|
|
Net income
|
10,418
|
|
|
Distributions to members
|
(12,000
|
)
|
|
Balance, December 31, 2017
|
49,705
|
|
|
Net income
|
9,672
|
|
|
Distributions to members
|
(8,000
|
)
|
|
Balance, December 31, 2018
|
$
|
51,377
|
|
(1)
|
Summary of Significant Accounting Policies
|
Members
|
|
|
Tejon
|
60.0
|
%
|
TA
|
40.0
|
%
|
|
As Reported
|
|
Adoption of
ASU 2014-09
|
|
As Adjusted
|
||||||
Revenues:
|
|
|
|
|
|
||||||
Fuel
|
$
|
87,696
|
|
|
$
|
(14,191
|
)
|
|
$
|
73,505
|
|
Nonfuel
|
31,767
|
|
|
235
|
|
|
32,002
|
|
|||
Total revenues
|
119,463
|
|
|
(13,956
|
)
|
|
105,507
|
|
|||
|
|
|
|
|
|
||||||
Cost of goods sold (excluding depreciation and amortization):
|
|
|
|
|
|
||||||
Fuel
|
73,413
|
|
|
(13,956
|
)
|
|
59,457
|
|
|||
Nonfuel
|
12,316
|
|
|
—
|
|
|
12,316
|
|
|||
Total cost of goods sold
|
85,729
|
|
|
(13,956
|
)
|
|
71,773
|
|
|||
|
|
|
|
|
|
||||||
Net income and comprehensive income
|
10,418
|
|
|
—
|
|
|
10,418
|
|
|
As Reported
|
|
Adoption of
ASU 2014-09
|
|
As Adjusted
|
||||||
Revenues:
|
|
|
|
|
|
||||||
Fuel
|
$
|
83,149
|
|
|
$
|
(13,865
|
)
|
|
$
|
69,284
|
|
Nonfuel
|
31,182
|
|
|
139
|
|
|
31,321
|
|
|||
Total revenues
|
114,331
|
|
|
(13,726
|
)
|
|
100,605
|
|
|||
|
|
|
|
|
|
||||||
Cost of goods sold (excluding depreciation and amortization):
|
|
|
|
|
|
||||||
Fuel
|
68,465
|
|
|
(13,726
|
)
|
|
54,739
|
|
|||
Nonfuel
|
12,199
|
|
|
—
|
|
|
12,199
|
|
|||
Total cost of goods sold
|
80,664
|
|
|
(13,726
|
)
|
|
66,938
|
|
|||
|
|
|
|
|
|
||||||
Net income and comprehensive income
|
12,077
|
|
|
—
|
|
|
12,077
|
|
(2)
|
Revenue
|
•
|
Customer Loyalty Program.
The Company offers travel center trucking customers the option to participate in TA's loyalty program. The loyalty program provides customers with the right to earn loyalty awards on qualifying purchases that can be used for discounts on future purchases of goods or services. The Company applies a relative standalone selling price approach to its outstanding loyalty awards whereby a portion of each sale attributable to the loyalty awards earned is deferred and will be recognized as revenue in the category in which the loyalty awards are redeemed upon the redemption or expiration of the loyalty awards. Significant judgment is required to determine the standalone selling price for loyalty awards. Assumptions used in determining the standalone selling price include the historic redemption rate and the use of a weighted average selling price for fuel to calculate the revenue attributable to the loyalty awards.
|
•
|
Customer Discounts and Rebates.
TA enters into agreements with certain customers on behalf of the Company in which it agrees to provide discounts on fuel and/or truck service purchases, some of which are structured as rebates payable to the customer after the end of the period. The Company recognizes the cost of discounts against, and in the same period as, the revenue that generated the discounts earned.
|
(3)
|
Inventory
|
(4)
|
Property and Equipment
|
|
Estimated Useful Lives (years)
|
|
December 31,
|
||||||
|
|
2018
|
|
2017
|
|||||
Land and improvements
|
|
|
$
|
34,943
|
|
|
$
|
34,056
|
|
Buildings and improvements
|
10-40
|
|
34,345
|
|
|
33,434
|
|
||
Machinery, equipment and furniture
|
3-10
|
|
14,295
|
|
|
13,429
|
|
||
Construction in progress
|
|
|
959
|
|
|
1,006
|
|
||
|
|
|
84,542
|
|
|
81,925
|
|
||
Less: accumulated depreciation and amortization
|
|
|
27,513
|
|
|
25,422
|
|
||
Property and equipment, net
|
|
|
$
|
57,029
|
|
|
$
|
56,503
|
|
(5)
|
Accrued Expenses and Other Current Liabilities
|
|
December 31,
|
||||||
|
2018
|
|
2017
|
||||
Self insurance accrual
|
$
|
825
|
|
|
$
|
998
|
|
Taxes payable, other than income taxes
|
765
|
|
|
785
|
|
||
Accrued capital expenditures
|
126
|
|
|
—
|
|
||
Accrued utilities
|
113
|
|
|
102
|
|
||
Accrued interest
|
29
|
|
|
26
|
|
||
Environmental accrual
|
21
|
|
|
15
|
|
||
Other
|
379
|
|
|
336
|
|
||
Total accrued expenses and other current liabilities
|
$
|
2,258
|
|
|
$
|
2,262
|
|
(6)
|
Long Term Debt, net
|
|
December 31,
|
||||||
|
2018
|
|
2017
|
||||
Note payable to a bank
|
$
|
15,331
|
|
|
$
|
15,331
|
|
Less: debt issuance costs
|
48
|
|
|
52
|
|
||
Total long term debt, net
|
$
|
15,283
|
|
|
$
|
15,279
|
|
(7)
|
Related Party Transactions
|
(8)
|
Contingencies
|