UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
 (Mark(Mark One)

xQUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended September 30, 20172021
OrOR
¨TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from              to             
Commission File Number: 1-7183file number: 1-07183
trc-20210930_g1.jpg
TEJON RANCH CO.
(Exact name of Registrant as specified in its charter) 
(Exact name of registrant as specified in its charter) 
Delaware77-0196136
(State or other jurisdiction of
incorporation or organization)
(IRS Employer
Delaware
(State or other jurisdiction of incorporation or organization)
77-0196136
(I.R.S. Employer Identification No.)
P.O. Box 1000, Tejon Ranch, California 93243
(Address of principal executive offices) (Zip Code)
(661) 248-3000
(Registrant’s telephone number, including area code: (661) 248-3000code)
____________________________________________________ 
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.    Yes  x    No  ¨
Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).    Yes  x    No  ¨
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer”, “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act. (Check one):
Large accelerated filer ¨                            Accelerated filer      x
Non-accelerated filer ¨ (Do not check if a smaller reporting company)        Small reporting company      ¨
Emerging growth company ¨
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards providedregistered pursuant to Section 13(a)12(b) of the Exchange Act.     ¨Act:
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes  ¨ No  x
Title of each classTrading symbol(s)Name of each exchange on which registered
Common Stock, $0.50 par valueTRCNew York Stock Exchange
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
Large accelerated filerAccelerated filer
Non-accelerated filerSmaller reporting company
Emerging growth company
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒
The number of the Company’s outstanding shares of Common Stock on October 31, 20172021 was 25,873,235.26,359,611.




TEJON RANCH CO. AND SUBSIDIARIES
TABLE OF CONTENTS
Page
PART I.FINANCIAL INFORMATION
Item 1.Financial StatementsPage
PART I.FINANCIAL INFORMATION
Item 1.Financial Statements
Unaudited Consolidated Statements of Comprehensive Income (Loss) for the Three and Nine Months Ended September 30, 20172021 and 20162020
Item 2.
Item 3.
Item 4.
PART II.
Item 1.
Item 1A.
Item 2.
Item 3.
Item 4.
Item 5.
Item 6.Exhibits

`
2


PART I - FINANCIAL INFORMATION


ITEM 1. FINANCIAL STATEMENTS


TEJON RANCH CO. AND SUBSIDIARIES
UNAUDITED CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except per share amounts)


Three Months Ended September 30,Nine Months Ended September 30,
 2021202020212020
Revenues:
Real estate - commercial/industrial$2,466 $2,710 $12,820 $7,144 
Mineral resources4,774 1,322 19,354 9,276 
Farming6,726 8,537 7,612 9,698 
Ranch operations996 944 2,868 2,483 
Total revenues14,962 13,513 42,654 28,601 
Costs and Expenses:
Real estate - commercial/industrial2,331 2,026 8,595 5,704 
Real estate - resort/residential322 273 1,314 1,225 
Mineral resources3,025 648 12,325 5,240 
Farming7,296 8,108 9,977 10,909 
Ranch operations1,182 1,164 3,511 3,748 
Corporate expenses2,021 2,121 6,676 7,148 
Total expenses16,177 14,340 42,398 33,974 
Operating (loss) income(1,215)(827)256 (5,373)
Other Income:
Investment income455 21 834 
(Loss) gain on sale of real estate— (2)— 1,331 
Other income, net24 68 131 64 
Total other income29 521 152 2,229 
(Loss) income from operations before equity in earnings of unconsolidated joint ventures(1,186)(306)408 (3,144)
Equity in earnings of unconsolidated joint ventures, net1,510 1,093 2,816 3,629 
Income before income tax expense324 787 3,224 485 
Income tax (benefit) expense98 403 1,237 1,111 
Net income (loss)226 384 1,987 (626)
Net income (loss) attributable to non-controlling interest(14)(9)
Net income (loss) attributable to common stockholders$219 $398 $1,986 $(617)
Net income (loss) per share attributable to common stockholders, basic$0.01 $0.02 $0.08 $(0.02)
Net income (loss) per share attributable to common stockholders, diluted$0.01 $0.02 $0.08 $(0.02)
 Three Months Ended September 30, Nine Months Ended September 30,
 2017 2016 2017 2016
Revenues:       
Real estate - commercial/industrial$2,432
 $2,221
 $7,106
 $6,534
Mineral resources1,142
 1,125
 4,662
 13,052
Farming7,466
 9,319
 9,398
 11,042
Ranch operations868
 414
 2,809
 2,253
Total revenues11,908
 13,079
 23,975
 32,881
Costs and Expenses:       
Real estate - commercial/industrial1,315
 1,747
 4,960
 5,140
Real estate - resort/residential271
 323
 1,401
 1,252
Mineral resources528
 667
 2,381
 7,160
Farming7,921
 7,781
 10,502
 10,637
Ranch operations1,153
 1,374
 4,107

4,263
Corporate expenses2,277
 3,096
 7,716
 9,262
Total expenses13,465
 14,988
 31,067
 37,714
Operating loss(1,557) (1,909) (7,092) (4,833)
Other Income:       
Investment income91
 112
 289
 350
Other income52
 32
 83
 120
Total other income143
 144
 372
 470
Loss from operations before equity in earnings of unconsolidated joint ventures(1,414) (1,765) (6,720) (4,363)
Equity in earnings of unconsolidated joint ventures, net1,724
 2,353
 3,512
 5,650
(Loss) Income before income tax expense310
 588
 (3,208) 1,287
Income tax (benefit) expense336
 271
 (1,268) 503
Net (loss) income(26) 317
 (1,940) 784
Net loss attributable to non-controlling interest(4) (7) (42) (61)
Net (loss) income attributable to common stockholders$(22) $324
 $(1,898) $845
Net (loss) income per share attributable to common stockholders, basic$
 $0.02
 $(0.09) $0.04
Net (loss) income per share attributable to common stockholders, diluted$
 $0.02
 $(0.09) $0.04


See accompanying notes.



3


TEJON RANCH CO. AND SUBSIDIARIES
UNAUDITED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)
(In thousands)


 Three Months Ended September 30, Nine Months Ended September 30,
 2017 2016 2017 2016
Net (loss) income$(26) $317
 $(1,940) $784
Other comprehensive income (loss):       
Unrealized gain (loss) on available for sale securities18
 (57) 73
 184
Benefit plan adjustments
 
 1,139
 
SERP liability adjustments


 
 487
 
Unrealized gain (loss) on interest rate swap95
 578
 217
 (2,729)
Other comprehensive income (loss) before taxes113
 521
 1,916
 (2,545)
Benefit (provision) from income taxes related to other comprehensive income (loss) items(40) (182) (771) 890
Other comprehensive income (loss)73
 339
 1,145
 (1,655)
Comprehensive (loss) income47
 656
 (795) (871)
Comprehensive loss attributable to non-controlling interests(4) (7) (42) (61)
Comprehensive (loss) income attributable to common stockholders$51
 $663
 $(753) $(810)
 Three Months Ended September 30,Nine Months Ended September 30,
 2021202020212020
Net income (loss)$226 $384 $1,987 $(626)
Other comprehensive gain (loss):
Unrealized loss on available-for-sale securities(1)(80)(8)(22)
Unrealized gain (loss) on interest rate swap456 360 2,237 (3,965)
Other comprehensive gain (loss) before taxes455 280 2,229 (3,987)
(Expense) benefit for income taxes related to other comprehensive income items(126)(78)(624)1,088 
Other comprehensive gain (loss)329 202 1,605 (2,899)
Comprehensive income (loss)555 586 3,592 (3,525)
Comprehensive income (loss) attributable to non-controlling interests(14)(9)
Comprehensive income (loss) attributable to common stockholders$548 $600 $3,591 $(3,516)
See accompanying notes.

4


TEJON RANCH CO. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(In thousands, except per share data)
 September 30, 2017 December 31, 2016
 (unaudited)  
ASSETS   
Current Assets:   
Cash and cash equivalents$2,658
 $1,258
Marketable securities - available-for-sale21,494
 26,675
Accounts receivable7,330
 8,740
Inventories5,399
 3,084
Prepaid expenses and other current assets2,576
 3,107
Total current assets39,457
 42,864
Real estate and improvements - held for lease, net18,408
 20,026
Real estate development (includes $92,194 at September 30, 2017 and $89,381 at December 31, 2016, attributable to Centennial Founders, LLC, Note 15)262,496
 248,265
Property and equipment, net45,455
 46,034
Investments in unconsolidated joint ventures28,911
 33,803
Net investment in water assets47,318
 43,764
Deferred tax assets1,464
 2,282
Other assets4,030
 2,663
TOTAL ASSETS$447,539
 $439,701
    
LIABILITIES AND EQUITY   
Current Liabilities:   
Trade accounts payable$3,361
 $2,415
Accrued liabilities and other4,046
 3,188
Deferred income1,668
 1,529
Revolving line of credit17,000
 7,700
Current maturities of long-term debt4,016
 3,853
Total current liabilities30,091
 18,685
Long-term debt, less current portion66,806
 69,853
Long-term deferred gains3,373
 3,662
Other liabilities11,165
 13,034
Total liabilities111,435
 105,234
Commitments and contingencies
 
Equity:   
Tejon Ranch Co. Stockholders’ Equity   
Common stock, $.50 par value per share:   
Authorized shares - 30,000,000   
Issued and outstanding shares - 20,865,350 at September 30, 2017 and 20,810,301 at December 31, 201610,433
 10,405
Additional paid-in capital232,166
 229,762
Accumulated other comprehensive loss(5,094) (6,239)
Retained earnings70,049
 71,947
Total Tejon Ranch Co. Stockholders’ Equity307,554
 305,875
Non-controlling interest28,550
 28,592
Total equity336,104
 334,467
TOTAL LIABILITIES AND EQUITY$447,539
 $439,701

September 30, 2021December 31, 2020
(unaudited)
ASSETS
Current Assets:
Cash and cash equivalents$37,660 $54,919 
Marketable securities - available-for-sale7,791 2,771 
Accounts receivable5,974 4,592 
Inventories5,703 2,990 
Prepaid expenses and other current assets4,636 3,243 
Total current assets61,764 68,515 
Real estate and improvements - held for lease, net17,391 17,660 
Real estate development (includes $110,668 at September 30, 2021 and $108,600 at December 31, 2020, attributable to Centennial Founders, LLC, Note 15)316,143 310,439 
Property and equipment, net50,252 46,246 
Investments in unconsolidated joint ventures42,517 33,524 
Net investment in water assets51,710 56,698 
Other assets2,314 3,267 
TOTAL ASSETS$542,091 $536,349 
LIABILITIES AND EQUITY
Current Liabilities:
Trade accounts payable$4,006 $3,367 
Accrued liabilities and other4,325 3,305 
Deferred income2,057 1,972 
Current maturities of long-term debt4,424 4,295 
Total current liabilities14,812 12,939 
Long-term debt, less current portion49,290 52,587 
Long-term deferred gains8,334 5,550 
Deferred tax liability1,703 925 
Other liabilities16,503 19,017 
Total liabilities90,642 91,018 
Commitments and contingencies00
Equity:
Tejon Ranch Co. Stockholders’ Equity
Common stock, $0.50 par value per share:
Authorized shares - 30,000,000
Issued and outstanding shares - 26,352,193 at September 30, 2021 and 26,276,830 at December 31, 202013,175 13,137 
Additional paid-in capital344,547 342,059 
Accumulated other comprehensive loss(8,115)(9,720)
Retained earnings86,473 84,487 
Total Tejon Ranch Co. Stockholders’ Equity436,080 429,963 
Non-controlling interest15,369 15,368 
Total equity451,449 445,331 
TOTAL LIABILITIES AND EQUITY$542,091 $536,349 
See accompanying notes.

5



TEJON RANCH CO. AND SUBSIDIARIES
UNAUDITED CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)
Nine Months Ended September 30,
 20212020
Operating Activities
Net income (loss)$1,987 $(626)
Adjustments to reconcile net income (loss) to net cash used by operating activities:
Depreciation and amortization3,408 3,635 
Amortization of premium/discount of marketable securities77 21 
Equity in earnings of unconsolidated joint ventures, net(2,816)(3,629)
Non-cash retirement plan (benefit) expense(75)59 
Non-cash profits recognized from land contribution(2,784)— 
Profit from water sales1
(3,277)— 
Non-cash write-off of leasing assets— 110 
Gain on sale of property plant and equipment(12)(1,318)
Deferred income taxes(1)— 
Stock compensation expense3,162 3,566 
Excess tax shortfall from stock-based compensation155 529 
Distribution of earnings from unconsolidated joint ventures364 6,269 
Changes in operating assets and liabilities:
Receivables, inventories, prepaids and other assets, net(2,597)235 
Current liabilities493 (1,263)
Net cash (used in) provided by operating activities(1,916)7,588 
Investing Activities
Maturities and sales of marketable securities5,250 30,452 
Funds invested in marketable securities(10,355)(5,610)
Real estate and equipment expenditures(15,240)(15,407)
Reimbursement proceeds from Community Facilities District135— 
Proceeds from sale of real estate/assets63 2,000 
Investment in unconsolidated joint ventures(2,900)(2,090)
Distribution of equity from unconsolidated joint ventures5,690 100 
Proceeds from water sales1
8,997 — 
Investments in water assets(2,415)(2,633)
Net cash (used in) provided by investing activities(10,775)6,812 
Financing Activities
Repayments of long-term debt(3,200)(3,767)
Taxes on vested stock grants(966)(1,584)
Net cash used in financing activities(4,166)(5,351)
(Decrease) increase in cash and cash equivalents(16,857)9,049 
Cash, cash equivalents, and restricted cash at beginning of period55,320 27,106 
Cash, cash equivalents, and restricted cash at end of period$38,463 $36,155 
Reconciliation to amounts on consolidated balance sheets:
Cash and cash equivalents$37,660 $36,155 
Restricted cash (Shown in Other Assets)803 — 
Total cash, cash equivalents, and restricted cash$38,463 $36,155 
6


 Nine Months Ended September 30,
 2017 2016
Operating Activities   
Net (loss) income$(1,940) $784
Adjustments to reconcile net income to net cash provided by operating activities:   
Depreciation and amortization3,422
 4,170
Amortization of premium/discount of marketable securities236
 386
Equity in earnings of unconsolidated joint ventures(3,512) (5,650)
Non-cash retirement plan expense404
 725
Gain on sale of real estate/assets93
 
Deferred income taxes46
 755
Stock compensation expense2,571
 3,297
Excess tax benefit from stock-based compensation143
 
Distribution of earnings from unconsolidated joint ventures7,200
 4,500
Changes in operating assets and liabilities:   
Receivables, inventories and other assets, net(1,137) (6,622)
Current liabilities376
 (932)
Net cash provided by operating activities7,902
 1,413
Investing Activities   
Maturities and sales of marketable securities5,274
 9,010
Funds invested in marketable securities(255) (4,014)
Real estate and equipment expenditures(15,579) (19,760)
Communities Facilities District and other reimbursements
 4,650
Investment in unconsolidated joint ventures(252) (1,900)
Distribution of equity from unconsolidated joint ventures3,018
 1,600
Investments in long-term water assets(4,567) 
Net cash used in investing activities(12,361) (10,414)
Financing Activities   
Borrowings of short-term debt13,300
 19,500
Repayments of short-term debt(4,000) (8,500)
Repayments of long-term debt(2,901) (190)
Taxes on vested stock grants(540) (314)
Net cash provided by financing activities5,859
 10,496
Increase in cash and cash equivalents1,400
 1,495
Cash and cash equivalents at beginning of period1,258
 1,930
Cash and cash equivalents at end of period$2,658
 $3,425
Supplemental cash flow information   
Accrued capital expenditures included in current liabilities$792
 $1,253
Income taxes paid$
 $1,350
Non cash capital contribution to unconsolidated joint venture$1,339
 $
Non-cash investing activities
Accrued capital expenditures included in current liabilities$737 $1,484 
Accrued long-term water assets included in current liabilities$262 $254 
Contribution to unconsolidated joint venture2
$8,464 $— 
Long term deferred profit on land contribution2
$2,785 $— 
1In determining the classification of cash inflows and outflows related to water asset activity, the Company’s practices are supported by Accounting Standards Codification (“ASC”) 230-10-45-22, which provides that “Certain cash receipts and payments have aspects of more than one class of cash flows…. If so, the appropriate classification shall depend on the activity that is likely to be the predominant source of cash flows for the item.” Also, at the 2006 American Institution of Certified Public Accountants Conference on Current SEC and PCAOB Developments, the Securities and Exchange Commission, or SEC staff discussed that an entity should be consistent in how it classifies cash outflows and inflows related to an asset’s purchase and sale and noted that when cash flow classification is unclear, registrants must use judgment and analysis that considers the nature of the activity and the predominant source of cash flow for these items.

Given the nature of our water assets and the aforementioned authoritative guidance, the Company estimates the appropriate classification of water assets purchased based on the timing of the sale of the water. Water purchased in prior periods that was classified as investing was sold for $9.0 million in 2021, this cash inflow is appropriately classified in the Company’s investing activities. The profit of $3.3 million related to the water purchased in prior periods is appropriately being deducted from operating activities for the current period. The Company has and will continue to apply this methodology to water asset transactions that meet this fact pattern.

2 In June 2021, the Company contributed land with a fair value of $8.5 million to TRC-MRC 4, LLC an unconsolidated joint venture formed to pursue the development, construction, leasing, and management of a 630,000 square foot industrial building on the Company's property at TRCC-East (defined herein). The total cost of the land was $2.9 million. The Company recognized $2.8 million in profit and deferred $2.8 million of profit after applying the five-step revenue recognition model in accordance with Accounting Standards Codification (ASC) Topic 606 — Revenue From Contracts With Customers and ASC Topic 323, Investments — Equity Method and Joint Ventures. Historically, cash outflows related to land development expenditures were accounted for within investing activities. For consistency, the Company will continue to classify cash outflows and cash inflows related to land development as investing activities.

See accompanying notes.

7


TEJON RANCH CO. AND SUBSIDIARIES
UNAUDITED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY AND NONCONTROLLING INTERESTS
(In thousands, except shares outstanding)


Common Stock Shares OutstandingCommon StockAdditional Paid-In CapitalAccumulated Other Comprehensive (Loss) IncomeRetained EarningsTotal Stockholders' EquityNoncontrolling InterestTotal Equity
Balance, June 30, 202126,343,864 $13,171 $343,415 $(8,444)$86,254 $434,396 $15,362 $449,758 
Net income— — — — 219 219 226 
Other comprehensive income— — — 329 329 — 329 
Restricted stock issuance8,329 (4)— — — — — 
Stock compensation— — 1,136 — — 1,136 — 1,136 
Shares withheld for taxes and tax benefit of vested shares— — — — — — — — 
Balance, September 30, 202126,352,193 $13,175 $344,547 $(8,115)$86,473 $436,080 $15,369 $451,449 
Balance, June 30, 202026,221,862 $13,110 $340,147 $(9,872)$84,212 $427,597 $15,380 $442,977 
Net income (loss)— — — — 398 398 (14)384 
Other comprehensive income— — — 202 — 202 — 202 
Restricted stock issuance7,445 (4)— — — — — 
Stock compensation— — 1,444 — — 1,444 — 1,444 
Shares withheld for taxes and tax benefit of vested shares— — — — — — — — 
Balance, September 30, 202026,229,307 $13,114 $341,587 $(9,670)$84,610 $429,641 $15,366 $445,007 
8


Common Stock Shares OutstandingCommon StockAdditional Paid-In CapitalAccumulated Other Comprehensive (Loss) IncomeRetained EarningsTotal Stockholders' EquityNoncontrolling InterestTotal Equity
Balance, December 31, 2020Balance, December 31, 202026,276,830 $13,137 $342,059 $(9,720)$84,487 $429,963 $15,368 $445,331 
Net incomeNet income— — — — 1,986 1,986 1,987 
Other comprehensive incomeOther comprehensive income— — — 1,605 — 1,605 — 1,605 
Common Stock Shares Outstanding Common Stock Additional Paid-In Capital Accumulated Other Comprehensive Income (Loss) Retained Earnings Total Stockholders' Equity Noncontrolling Interest Total Equity
Balance, December 31, 201620,810,301
 $10,405
 $229,762
 $(6,239) $71,947
 $305,875
 $28,592
 $334,467
Net loss
 
 
 
 (1,898) (1,898) (42) (1,940)
Other comprehensive income
 
 
 1,145
 
 1,145
 
 1,145
Restricted stock issuance84,653
 43
 (44) 
 
 (1) 
 (1)Restricted stock issuance134,021 67 (67)— — — — — 
Stock compensation
 
 2,973
 
 
 2,973
 
 2,973
Stock compensation— — 3,492 — — 3,492 — 3,492 
Shares withheld for taxes and tax benefit of vested shares(29,604) (15) (525) 
 
 (540) 
 (540)Shares withheld for taxes and tax benefit of vested shares(58,658)(29)(937)— — (966)— (966)
Balance September 30, 201720,865,350
 $10,433
 $232,166
 $(5,094) $70,049
 $307,554
 $28,550
 $336,104
Balance, September 30, 2021Balance, September 30, 202126,352,193 $13,175 $344,547 $(8,115)$86,473 $436,080 $15,369 $451,449 
Balance, December 31, 2019Balance, December 31, 201926,096,797 $13,048 $338,745 $(6,771)$85,227 $430,249 $15,375 $445,624 
Net lossNet loss— — — — (617)(617)(9)(626)
Other comprehensive lossOther comprehensive loss— — — (2,899)— (2,899)— (2,899)
Restricted stock issuanceRestricted stock issuance247,720 124 (124)— — — — — 
Stock compensationStock compensation— — 4,492 — — 4,492 — 4,492 
Shares withheld for taxes and tax benefit of vested sharesShares withheld for taxes and tax benefit of vested shares(115,210)(58)(1,526)— — (1,584)— (1,584)
Balance, September 30, 2020Balance, September 30, 202026,229,307 $13,114 $341,587 $(9,670)$84,610 $429,641 $15,366 $445,007 
See accompanying notes.



9




TEJON RANCH CO. AND SUBSIDIARIES
NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS


1.    BASIS OF PRESENTATION
The summarized information of Tejon Ranch Co. and its subsidiaries (the Company Tejon, we, us and our)or Tejon), furnishedprovided pursuant to Part I, Item 1 of Form 10-Q, is unaudited and reflects all adjustments which are, in the opinion of the Company’s management, necessary for a fair statement of the results for the interim period. All such adjustments are of a normal recurring nature. We haveThe Company has evaluated subsequent events through the date of issuance of ourits consolidated financial statements.
The periods endingended September 30, 20172021 and 2016December 31, 2020 include the consolidation of Centennial Founders, LLC’s statement of operations within the resort /residentialresort/residential real estate development segment and statements of cash flows. The Company’s September 30, 20172021 and December 31, 20162020 balance sheets and statements of changes in equity and noncontrolling interests are presented on a consolidated basis, including the consolidation of Centennial Founders, LLC.
The Company has identified five5 reportable segments: commercial/industrial real estate development, resort/residential real estate development, mineral resources, farming, and ranch operations. Information for the Company’s reportedreportable segments isare presented in its Consolidated Statements of Operations. The Company’s reportingreportable segments follow the same accounting policies used for the Company’s consolidated financial statements. We useThe Company uses segment profit or loss along withand equity in earnings of unconsolidated joint ventures as the primary measuremeasures of profitability to evaluate operating performance and to allocate capital resources.
The results of the period reported herein are not indicative of the results to be expected for the full year due to the seasonal nature of the Company’s agricultural activities, andwater activities, timing of real estate sales and leasing activities. The coronavirus, COVID-19, has also brought additional uncertainty previously unseen. We continued to experience negative impacts during the first quarter of 2021, with signs of improvements during the second quarter as restrictions in California were lifted in mid-June 2021. The Company’s retail and hospitality businesses in the commercial/industrial real estate development segments fully reopened and operated without restrictions during the second and third quarters. The Company’s farming segment remained open, subject to applicable safety precautions, as that industry has been deemed essential throughout the pandemic.
Historically, the Company’s largest percentages of farming revenues are recognized during the third and fourth quarters of the fiscal year. Please refer to Management’s Discussion and Analysis of Financial Condition and Results of Operations for further discussion.
For further information and a summary of significant accounting policies, refer to the Consolidated Financial Statements and notes thereto included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2016.2020.
Restricted Cash
Restricted cash is included in Prepaid expenses and other current assets within the Consolidated Balance Sheets and primarily relate to funds held in escrow. The Company had $803,000 of restricted cash as of September 30, 2021.
Recent Accounting Pronouncements
Lease Concessions Related to COVID-19 Pandemic
In January 2016,April 2020, the Financial Accounting Standards Board, or FASB, issued a Staff Question-and-Answer, or Q&A, intended to reduce the operational challenges and complexity of accounting for leases at a time when many businesses have been ordered to close or have seen revenue drop due to the effects of the COVID-19 pandemic. The FASB determined that it would be appropriate for entities to make accounting policy elections over lease concessions resulting directly from COVID-19. Rather than analyzing each lease contract individually, entities can elect to account for lease concessions “as though the enforceable rights and obligations for those concessions existed, regardless of whether those enforceable rights and obligations for the concessions explicitly exist in the contract.” Accordingly, entities that choose to apply the relief provided by the FASB can either (1) apply the modification framework for these concessions in accordance with ASC Topic 840 or ASC Topic 842 as applicable or (2) account for the concessions as if they were made under the enforceable rights included in the original agreement and are thus outside of the modification framework. In making this election, an entity would not need to perform a lease-by-lease analysis to evaluate the enforceable rights and may instead simply treat the change as if the enforceable rights were included or excluded in the original agreement. The election not to apply lease modification accounting is only available when total cash flows resulting from the modified contract are “substantially the same or less” than the cash flows in the original contract.
10


The Company elected to account for lease concessions outside of the modification framework as allowed by the FASB Q&A. The COVID-19 pandemic resulted in tenant requests for rent relief, with a majority of the requests occurring in the second quarter of 2020. In 2020, the Company reached agreements with all commercial tenants that requested rent deferrals. Based on the terms of the agreements reached with the Company's tenants, all deferred rent is expected to be fully repaid by the end of 2021. The Company will account for the rent receivables as if no changes to the lease were made, and the rent receivable for the deferral period will stay on the Company's Consolidated Balance Sheet until the rent is collected over the passage of time. Please refer to the Results of Operations by Segment in Item 2, "Management's Discussion and Analysis of Financial Condition and Results of Operations" for discussion of the rent deferrals.
Reference Rate Reform
In March 2020, the FASB issued Accounting Standards Update, or ASU, 2016-01, "Financial Statements - Overall (Subtopic 825-10): RecognitionNo. 2020-04, "Facilitation of the Effects of Reference Rate Reform on Financial Reporting", for reference rate reform related activities that impact debt, leases, derivatives and Measurementother contracts. The pronouncement provides optional expedients for a limited period of Financial Assets and Financial Liabilities," which requires equity investments in unconsolidated entities (other than thosetime to ease the potential burden of accounting for reference rate reform. Specifically, the ASU permits modification of contracts within ASC Topic 470, Debt, to be accounted for usingby prospectively adjusting the equity methodeffective interest rate when a contract is modified because of accounting)reference rate reform. It also provides exceptions to be measured at fair value withthe guidance in ASC Topic 815 related to changes to critical terms of a hedging relationship: the change in fair value recognizedreference rate will not result in net income. There will no longer be an available-for-sale classification for equity securities with readily determinable fair values. The newde-designation of a hedging relationship if certain criteria are met. This guidance is effective for periods beginning afterall entities as of March 12, 2020 through December 15, 2017, with early adoption permitted. The Company31, 2022. This pronouncement has not had, and is currently in the process of evaluating the impact of the adoption of this ASUnot expected to have, a material effect on the Company’sour consolidated financial statements.
In February 2016, the FASB issued ASU No. 2016-02, "Leases (Topic 842)`." From the lessee's perspective, the new standard establishes a right-of-use (ROU) model that requires a lessee to record a ROU asset and a lease liability on the balance sheet for all leases with terms longer than 12 months. Leases will be classified as either finance or operating, with classification affecting the pattern of expense recognition in the income statement for a lessee. From the lessor's perspective, the new standard requires a lessor to classify leases as either sales-type, finance or operating. A lease will be treated as a sale if it


transfers all of the risks and rewards, as well as control of the underlying asset, to the lessee. If risks and rewards are conveyed without the transfer of control, the lease is treated as a financing lease. If the lessor doesn’t convey risks and rewards or control, an operating lease results. ASU 2016-02 is effective for periods beginning after December 15, 2018. We plan to adopt ASU No. 2016-02 effective January 1, 2019, and continue to evaluate the ASU to determine the impact of adoption on our consolidated financial statements and disclosures, accounting policies and systems, business processes, and internal controls. While our evaluation of ASU No. 2016-02 and related implementation activities are ongoing, we do not expect the adoption of the ASU to have a material impact on our consolidated financial statements and disclosures.
In March 2016, the FASB issued an ASU No. 2016-08, "Revenue from Contracts with Customers (Topic 06)" that further clarifies an ASU issued in 2014 on recognition of revenue arising from contracts with customers. The core principle of this ASU is that entities will recognize revenue to represent the transfer of goods and services to customers in an amount that reflects the consideration to which the entity expects to be entitled in such exchange. Leases are specifically excluded from this ASU and will be governed by the applicable lease codification. However, this update may have implications in certain variable payment terms included in lease agreements and in sale and leaseback transactions. The ASU is effective for interim and annual reporting periods in fiscal years that begin after December 15, 2017. Our primary sources of revenues include: 1) real property leases for which the pronouncement provides a scope exception, 2) agricultural sales where we act as the principle only, recognizing revenues upon satisfying a performance obligation for the gross amount of consideration, to which we expect to be entitled in exchange for the specified good transferred, and 3) hunting memberships and services where we act as the principle only, recognizing revenues upon satisfying a performance obligation for the gross amount of consideration, to which we expect to be entitled in exchange for the specified good transferred. Based on the Company's assessment over current revenue recognition policies and the new ASU, we believe that the new ASU will not have a material impact to the Company's consolidated financial statements.
In March 2016, the FASB issued ASU No. 2016-09, "Compensation—Stock Compensation (Topic 718) — Improvements to Employee Share-Based Payment Accounting." The ASU is effective for interim and annual reporting periods in fiscal years that begin after December 15, 2016. Stock-based compensation excess tax benefits or deficiencies are now reflected in the Consolidated Statements of Operations as a component of the provision for income taxes, whereas previously they were recognized within additional paid-in-capital. On the Consolidated Statements of Cash Flows, excess tax benefits or deficiencies associated with stock compensation should be classified as an operating activity. We applied both amendments prospectively within the Consolidated Statements of Operations and Consolidated Statements of Cash Flows recognizing excess tax deficiencies of $143,000. This change has no impact on total shareholders’ equity. The amendment also clarifies that cash paid by an employer when directly withholding shares for tax withholding purposes should be classified as a financing activity within the Consolidated Statements of Cash Flows. This approach is consistent with our existing policy and as such no changes were made to the Consolidated Statements of Cash Flows. Lastly, the ASU also allows for forfeitures to be recorded when they occur rather than estimated over the vesting period. However, we will continue to estimate forfeitures over the vesting period.
In August 2016, the FASB issued ASU No. 2016-15 “Statement of Cash Flows (Topic 230),” or ASU 2016-15. ASU 2016-15 is intended to reduce diversity in practice in how certain transactions are classified in the statement of cash flows. The new guidance addresses the classification of various transactions including distributions received from equity method investments. The new guidance allows companies to adopt the cumulative earnings or nature of distribution for classifying distributions received from equity method investments. The ASU is effective for reporting periods beginning after December 15, 2017, with early adoption permitted, and will be applied retrospectively. The Company is currently in the process of evaluating the impact of the adoption of this ASU on the Company’s consolidated financial statements.


2.    EQUITY
Earnings Per Share (EPS)
Basic net income (loss) per share attributable to common stockholders is based upon the weighted average number of shares of common stock outstanding during the year. Diluted net income (loss) per share attributable to common stockholders is based upon the weighted average number of shares of common stock outstanding and the weighted average number of shares outstanding assuming the issuance of common stock upon exercise of stock options, warrants to purchase common stock, and the vesting of restricted stock grants per ASC Topic 260, “Earnings Per Share.”
Three Months Ended September 30,Nine Months Ended September 30,
 2021202020212020
Weighted average number of shares outstanding:
Common stock26,351,254 26,229,226 26,336,247 26,193,058 
Common stock equivalents163,689 57,484 135,264 157,579 
Diluted shares outstanding26,514,943 26,286,710 26,471,511 26,350,637 
11
 Three Months Ended September 30, Nine Months Ended September 30,
 2017 2016 2017 2016
Weighted average number of shares outstanding:       
Common stock20,864,470
 20,732,767
 20,849,325
 20,719,900
Common stock equivalents-stock options, grants30,003
 128,334
 43,951
 125,940
Diluted shares outstanding20,894,473
 20,861,101
 20,893,276
 20,845,840



3.     MARKETABLE SECURITIES
ASC Topic 320, “Investments – Debt and Equity Securities”Securities,” requires that an enterprise classify all debt securities as either held-to-maturity, trading or available-for-sale. The Company has elected to classifyclassifies its securities as available-for-sale and therefore is required to adjust securities to fair value at each reporting date. All costs and both realized and unrealized gains and losses on securities are determined on a specific identification basis. The following is a summary of available-for-sale securities at:
($ in thousands) September 30, 2017 December 31, 2016
Marketable Securities:
Fair Value
Hierarchy
Cost Fair Value Cost Fair Value
Certificates of deposit        
with unrecognized losses for less than 12 months $1,295
 $1,292
 $1,868
 $1,863
with unrecognized losses for more than 12 months 
 
 
 
with unrecognized gains 3,494
 3,500
 3,320
 3,329
Total Certificates of depositLevel 14,789
 4,792
 5,188
 5,192
US Treasury and agency notes        
with unrecognized losses for less than 12 months 1,051
 1,050
 947
 946
with unrecognized losses for more than 12 months 
 
 
 
with unrecognized gains 120
 120
 857
 859
Total US Treasury and agency notesLevel 21,171
 1,170
 1,804
 1,805
Corporate notes        
with unrecognized losses for less than 12 months 7,863
 7,849
 11,658
 11,592
with unrecognized losses for more than 12 months 1,681
 1,677
 1,053
 1,042
with unrecognized gains 2,955
 2,957
 3,431
 3,435
Total Corporate notesLevel 212,499
 12,483
 16,142
 16,069
Municipal notes        
with unrecognized losses for less than 12 months 1,428
 1,419
 2,556
 2,526
with unrecognized losses for more than 12 months 600
 596
 271
 269
with unrecognized gains 1,032
 1,034
 812
 814
Total Municipal notesLevel 23,060
 3,049
 3,639
 3,609
  $21,519
 $21,494
 $26,773
 $26,675
($ in thousands) September 30, 2021December 31, 2020
Marketable Securities:Fair Value
Hierarchy
CostFair ValueCostFair Value
U.S. Treasury and agency notes
with unrealized losses for less than 12 months$864 $863 $— $— 
with unrealized gains— — 801 803 
Total U.S. Treasury and agency notesLevel 2864 863 801 803 
Corporate notes
with unrealized losses for less than 12 months6,431 6,428 708 707 
with unrealized gains499 500 1,257 1,261 
Total Corporate notesLevel 26,930 6,928 1,965 1,968 
$7,794 $7,791 $2,766 $2,771 
We evaluate our securities for other-than-temporary impairment basedThe Company adopted ASU No. 2016-13, "Financial Instruments — Credit Losses (Topic 326)" on January 1, 2020 prospectively. Under ASC Topic 326-30, the specific facts and circumstances surrounding each security valued below its cost. Factors considered include the length of time the securities have been valued below cost, the financial condition of the issuer, industry reports related to the issuer, the severity of any decline, our intention not to sell the security, and our assessment as to whether itCompany is not more likely than not that we will benow required to selluse an allowance approach when recognizing credit loss for available-for-sale debt securities, measured as the security before a recovery of itsdifference between the security's amortized cost basis. We then segregatebasis and the loss between the amounts representing a decrease in cash flowsamount expected to be collected orover the security's lifetime. Under this approach, at each reporting date, the Company records impairment related to credit loss, which is recognizedlosses through earnings and the balance of the loss which is recognized through other comprehensive income.offset with an allowance for credit losses, or ACL. At September 30, 2017,2021 the Company has not recorded any credit losses.
At September 30, 2021, the fair market value of investmentmarketable securities was $25,000 less than$3,000 below their cost basis.
The Company’s gross unrealized holding gains equaled $1,000 and gross unrealized holding losses equaled $4,000. As of September 30, 2017,2021, the adjustment to accumulated other comprehensive loss in consolidated equity for the temporary change in the value of securities reflected an increasea decline in the market value of available-for-sale securities of $73,000, which includes$8,000, including estimated taxes of $26,000.$2,000.
The Company elected to exclude applicable accrued interest from both the fair value and the amortized cost basis of the available-for-sale debt securities, and separately present the accrued interest receivable balance per ASC Topic 326-30-50-3A. The accrued interest receivables balance totaled $38,000 as of September 30, 2021, and was included within the Other Assets line item of the Consolidated Balance Sheets. The Company elected not to measure an allowance for credit losses on accrued interest receivable as an allowance on possible uncollectible accrued interest is not warranted.
U.S. Treasury and agency notes
The unrealized losses on the Company's investments in U.S. Treasury and agency notes at September 30, 2021 were caused by relative changes in interest rates since the time of purchase. The contractual cash flows for these securities are guaranteed by U.S. government agencies. The unrealized losses on these debt security holdings are a function of changes in investment spreads and interest rate movements and not changes in credit quality. As of September 30, 2017,2021, the Company’s grossCompany did not intend to sell these securities and it is not more-likely-than-not that the Company would be required to sell these securities before recovery of their cost basis. Therefore, these investments did not require an ACL as of September 30, 2021.
Corporate notes
The contractual terms of those investments do not permit the issuers to settle the securities at a price less than the amortized cost basis of the investments. The unrealized holding gains equaled $9,000losses on corporate notes are a function of changes in investment spreads and gross unrealized holding losses equaled $35,000.interest rate movements and not changes in credit quality. The Company expects to recover the entire amortized cost basis of these securities. As of September 30, 2021 and December 31, 2020, the Company did not intend to sell these securities and it is not more-likely-than-not that the Company would be required to sell these securities before recovery of their cost basis. Therefore, these investments did not require an ACL as of September 30, 2021 and December 31, 2020.

12



The following tables summarize the maturities, at par, of marketable securities as of:
September 30, 2017September 30, 2021
($ in thousands)2017 2018 2019 2020 Total($ in thousands)20212022Total
Certificates of deposit$145
 $4,306
 $324
 $
 $4,775
U.S. Treasury and agency notes592
 444
 142
 
 1,178
U.S. Treasury and agency notes$— $856 $856 
Corporate notes1,124
 7,073
 4,065
 
 12,262
Corporate notes1,000 5,870 6,870 
Municipal notes245
 1,688
 1,107
 
 3,040
$2,106
 $13,511
 $5,638
 $
 $21,255
$1,000 $6,726 $7,726 
 
December 31, 2016December 31, 2020
($ in thousands)2017 2018 2019 2020 Total($ in thousands)2021Total
Certificates of deposit$531
 $4,306
 $324
 
 $5,161
U.S. Treasury and agency notes1,234
 444
 142
 
 1,820
U.S. Treasury and agency notes$801 $801 
Corporate notes4,316
 7,133
 4,232
 
 15,681
Corporate notes1,950 1,950 
Municipal notes840
 1,688
 1,075
 
 3,603
$6,921
 $13,571
 $5,773
 $
 $26,265
$2,751 $2,751 
The Company’s investments in corporate notes are with companies that have an investment grade rating from Standard & Poor’s.Poor’s as of September 30, 2021.
4.     REAL ESTATE
Our accumulated real estate development costs by project consisted of the following:
($ in thousands)September 30, 2021December 31, 2020
Real estate development
Mountain Village$149,956 $146,662 
Centennial110,668 108,600 
Grapevine37,660 36,815 
Tejon Ranch Commerce Center17,859 18,362 
Real estate development$316,143 $310,439 
Real estate and improvements - held for lease
Tejon Ranch Commerce Center$20,595 $20,595 
Less accumulated depreciation(3,204)(2,935)
Real estate and improvements - held for lease, net$17,391 $17,660 
13


($ in thousands)September 30, 2017 December 31, 2016
Real estate development   
Mountain Village$130,542
 $126,096
Centennial92,194
 89,381
Grapevine27,246
 23,917
Tejon Ranch Commerce Center12,514
 8,871
Real estate development262,496
 248,265
    
Real estate and improvements - held for lease   
Tejon Ranch Commerce Center20,293
 21,643
Real estate and improvements - held for lease20,293
 21,643
Less accumulated depreciation(1,885) (1,617)
Real estate and improvements - held for lease, net$18,408
 $20,026

5.     INVESTMENTS INLONG-TERM WATER ASSETS
Tangible Water Assets
TangibleLong-term water assets includeconsist of water assetsand water contracts held for future use within our real estate developments and farming. Tangibleor sale. The water is held at cost, which includes the price paid for the water and the cost incurred to pump and deliver the water. A portion of our water from the California aqueduct into the water bank. Water is currently held in a water bank on Company land in southern Kern County. Banked water costs also include costs related toCounty and by the right to receive additional acre-feet of waterTejon-Castac Water District (TCWD) in the future from the Antelope Valley East Kern Water Agency, or AVEK. Banks.
The Company has also banked water within an AVEK owned water bank and with Tejon Castac Water District, or TCWD.


We have also purchased water for future company uses or in certain circumstances, sale. In 2008, we purchased 8,393 acre-feet of transferable water and in 2009 we purchased an additional 6,393 acre-feet of transferable water, the remaining portion of which is held on our behalf by AVEK under an agreement where AVEK will return this water to us at a 1.5 to 1 factor. To date, at the 1.5 to 1 factor, 17,638 acre-feet (11,759 X 1.5) of water has been returned and was placed in our Company water bank.
The costs assigned to tangible water assets were as follows ($ in thousands):
 September 30, 2017 December 31, 2016
Banked water and water for future delivery$5,070
 $4,779
Transferable water13,351
 9,075
Total tangible water$18,421
 $13,854

Intangible Water Assets
The Company's carrying amounts of its intangible water assets were as follows: ($ in thousands):
 September 30, 2017 December 31, 2016
 Costs Accumulated Depreciation Costs Accumulated Depreciation
Dudley Ridge water rights$12,203
 $(3,448) $12,203
 $(2,895)
Nickel water rights18,740
 (2,517) 18,740
 (2,218)
Tulare Lake Basin water rights5,857
 (1,938) 5,857
 (1,777)
 $36,800
 $(7,903) $36,800
 $(6,890)
Net intangible water assets28,897
   29,910
  
Total tangible water assets18,421
   13,854
  
Net investments in water assets$47,318
   $43,764
  

We have secured State Water Project, or SWP, entitlement under long-term SWP water contracts within the Tulare Lake Basin Water Storage District, or TLBWSD,Tulare Lake Basin, and the Dudley-Ridge Water District, or DRWD,Dudley-Ridge, totaling 3,444 acre-feet of SWP entitlement annually, subject to annual SWP allocations. These contracts extend through 2035 and now have been transferred to the Antelope Valley East Kern Water Agency, or AVEK, for our use in the Antelope Valley. In 2013, the Company acquired from DMB Pacific, or DMB, a contract to purchase water that obligates the Company to purchase 6,693 acre-feet of water each year from the Nickel Family, LLC, or Nickel, a California limited liability company that is located in Kern County.
The initial term of the water purchase agreement with Nickel runs to 2044 and includes a Company option to extend the contract for an additional 35 years. The purchase cost of water in 20172021 is $716$817 per acre-foot. The purchase cost is subject to annual cost increases based on the greater of the consumer price index or 3%.
TheWater assets will ultimately be sold to water purchased above is expected to be used in the development ofdistricts servicing the Company’s landcommercial/industrial and resort/residential real estate developments, and for commercial/industrial development, residential development, and farming.the Company's own use in its agricultural operations. Interim uses may include the sale of the temporary “right-of-use” of portions of this water to third partythird-party users on an annual basis until this water is fully allocated to Company uses.uses, as previously described.

Water revenues and cost of sales were as follows ($ in thousands):

September 30, 2021September 30, 2020
Acre-Feet Sold13,199 4,625 
Revenues$14,986 $5,471 
Cost of sales10,297 3,264 
Profit$4,689 $2,207 

The costs assigned to water assets held for future use were as follows ($ in thousands):
September 30, 2021December 31, 2020
Banked water and water for future delivery$26,326 $28,136 
Water available for banking, sales, or internal use1,946 4,102 
Total water held for future use at cost$28,272 $32,238 

Intangible Water Assets
The Company’s carrying amounts of its purchased water contracts were as follows ($ in thousands):
September 30, 2021December 31, 2020
CostsAccumulated DepreciationCostsAccumulated Depreciation
Dudley-Ridge water rights$11,581 $(5,187)$11,581 $(4,825)
Nickel water rights18,740 (5,087)18,740 (4,605)
Tulare Lake Basin water rights6,479 (3,088)6,479 (2,910)
$36,800 $(13,362)$36,800 $(12,340)
Net cost of purchased water contracts23,438 24,460 
Total cost water held for future use28,272 32,238 
Net investments in water assets$51,710 $56,698 

14


Water contracts with the Wheeler Ridge Maricopa Water Storage District, or WRMWSD, and TCWD are also in place, but were entered into with each district at the inception of the contract andrespective contracts, were not purchased later from third parties, and do not have a related financial carrying costvalue on the books of the Company. Therefore, there is no amortization expense related to these contracts. These contracts are also subject to annual SWP allocations.Total water resources, including both recurring and one-time usage, are:
Water assets consist of the following:
(in acre-feet, unaudited)September 30, 2017 December 31, 2016
Tangible water assets   
Banked water and water for future delivery   
AVEK water bank13,033
 13,033
Company water bank26,338
 17,287
AVEK water for future delivery7,227
 2,362
Transferable water*8,782
 9,062
Total tangible water assets55,380
 41,744
Intangible water assets   
Water contracts10,137
 10,137
WRMWSD - Contract[s] with Company15,547
 15,547
TCWD - Contract[s] with Company5,749
 5,749
TCWD - Banked water contracted with Company43,584
 33,390
Total intangible water assets75,017
 64,823
Total water sources in acre-feet130,397
 106,567
* Of the 8,782 acre-feet of transferable water, 3,028 acre-feet is with AVEK and will be returned by AVEK to the Company at a 1.5 to 1 factor giving the Company use of a total of 4,542 (3,028 x 1.5) acre-feet as of June 30, 2017.
(in acre-feet, unaudited)September 30, 2021December 31, 2020
Water held for future use
TCWD - Banked water owned by the Company56,732 61,054 
Company water bank50,349 50,349 
Water available for banking, sales, or internal use3,070 5,638 
Total water held for future use110,151 117,041 
Purchased water contracts
Water Contracts (Dudley-Ridge, Nickel and Tulare)10,137 10,137 
WRMWSD - Contracts with the Company15,547 15,547 
TCWD - Contracts with the Company5,749 5,749 
Total purchased water contracts31,433 31,433 
Total water held for future use and purchased water contracts141,584 148,474 
Tejon Ranchcorp, or Ranchcorp, a wholly-owned subsidiary of Tejon Ranch Co., hasentered into a Water Supply Agreement with Pastoria Energy Facility, L.L.C., or PEF.PEF, in 2015. PEF is thea current lessee underof the Company in a land lease for the operation of a power plant lease.plant. Pursuant to the Water Supply Agreement, PEF may purchase from Ranchcorpthe Company up to 3,500 acre-feet of water per year from January 1, 2017 throughuntil July 31, 2030, with an option to extend the term. PEF is under no obligation to purchase water from Ranchcorpthe Company in any year but is required to pay Ranchcorpthe Company an annual option payment equal to 30% of the maximum annual payment. The price of the water under the Water Supply Agreement for 20172021 is $1,056$1,188 per acre foot of annual water,acre-foot, subject to 3% annual increases over the life of the contract. The Water Supply Agreement contains other customary terms and conditions, including representations and warranties whichthat are typical for agreements of this type. The Company's commitments to sell water can be met through current water assets.
During the nine months ended September 30, 2017, we sold 939 acre-feet of water to PEF totaling $1,109,000 with a cost of $765,000, which was recorded in the mineral resources segment on the unaudited Consolidated Statements of Operations.



6.     ACCRUED LIABILITIES AND OTHER
Accrued liabilities and other consistsconsisted of the following:
($ in thousands)September 30, 2021December 31, 2020
Accrued vacation$803 $736 
Accrued paid personal leave360 399 
Accrued bonus1,699 1,658 
Property tax payable1
1,157 — 
Other306 512 
$4,325 $3,305 
1 California property taxes are accrued throughout the year and are paid every April and December.
($ in thousands)September 30, 2017 December 31, 2016
Accrued vacation$770
 $901
Accrued paid personal leave484
 590
Accrued bonus1,512
 1,346
Other1,280
 351
 $4,046
 $3,188
7.     LINE OF CREDIT AND LONG-TERM DEBT
Debt consistsconsisted of the following:
($ in thousands)September 30, 2021December 31, 2020
Notes payable$53,878 $57,078 
Less: line-of-credit and current maturities of long-term debt(4,424)(4,295)
Less: deferred loan costs(164)(196)
Long-term debt, less current portion$49,290 $52,587 
($ in thousands)September 30, 2017 December 31, 2016
Revolving line of credit$17,000
 $7,700
Notes payable70,679
 73,400
Other borrowings288
 467
Total short-term and long-term debt87,967
 81,567
Less: line-of-credit and current maturities of long-term debt(21,016) (11,553)
Less: deferred loan costs(145) (161)
Long-term debt, less current portion$66,806
 $69,853
On October 13, 2014,Please refer to the Company, through its wholly-owned subsidiary Ranchcorp, as borrower, entered into an AmendedCapital Structure and Restated Credit Agreement, a Term NoteFinancial Condition section of Management’s Discussion and a RevolvingAnalysis of Financial Condition and Results of Operations for further discussion on the Company's Line of Credit Note, with Wells Fargo, or collectively the Credit Facility. The Credit Facility amended and restated the Company's existing credit facility dated as of November 5, 2010 and extended on December 4, 2013. The Credit Facility added a $70,000,000 Term Note, to the existing $30,000,000 revolving line of credit, or RLC. Funds from the Term Note were used to finance the Company's purchase of DMB TMV LLC’s interest in Tejon Mountain Village LLC. Any future borrowings under the RLC will be used for ongoing working capital requirements and other general corporate purposes. To maintain availability of funds under the RLC, undrawn amounts under the RLC will accrue a commitment fee of 10 basis points per annum. The Company's ability to borrow additional funds in the future under the RLC is subject to compliance with certain financial covenants and making certain representations and warranties. As of September 30, 2017 and December 31, 2016, the RLC had an outstanding balance of $17,000,000 and $7,700,000, respectively. At the Company’s option, the interest rate on this line of credit can float at 1.50% over a selected LIBOR or can be fixed at 1.50% above LIBOR for a fixed rate term. During the term of the Credit Facility (which matures in September 2019), we can borrow at any time and partially or wholly repay any outstanding borrowings and then re-borrow, as necessary.Long-Term Debt.
The Term Note had outstanding balances of $66,916,000 and $69,439,000 as of September 30, 2017 and December 31, 2016, respectively. The interest rate per annum applicable to the Term Note is LIBOR (as defined in the Term Note) plus a margin of 170 basis points. The interest rate for the term of the note has been fixed through the use of an interest rate swap at a rate of 4.11%. The Term Note required interest only payments for the first two years of the term and thereafter requires monthly amortization payments pursuant to a schedule set forth in the Term Note, with the final outstanding principal amount due October 5, 2024. The Company may make voluntary prepayments on the Term Note at any time without penalty (excluding any applicable LIBOR or interest rate swap breakage costs). Each optional prepayment will be applied to reduce the most remote principal payment then unpaid. The Credit Facility is secured by
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the Company's farmland and farm assets, which include equipment, crops and crop receivables, the power plant lease and lease site, and related accounts and other rights to payment and inventory.
The Credit Facility requires compliance with three financial covenants: (a) total liabilities divided by tangible net worth not greater than 0.75 to 1.0 at each quarter end; (b) a debt service coverage ratio not less than 1.25 to 1.00 as of each quarter end on a rolling four quarter basis; and (c) maintain liquid assets equal to or greater than $20,000,000. At September 30, 2017 and December 31, 2016, we were in compliance with all financial covenants.
During the third quarter of 2013, we entered into a promissory note agreement with CMFG Life Insurance Company, to pay a principal amount of $4,750,000 with principal and interest due monthly starting on October 1, 2013. The interest rate on this promissory note is 4.25% per annum, with monthly principal and interest payments of $102,700 ending on September 1, 2028. The proceeds from this promissory note were used to eliminate debt that had been previously used to provide long-term financing for a building being leased to Starbucks and provide additional working capital for future investment. The current balance on the note is $3,763,000. The balance of this long-term debt instrument included in "Notes payable" above approximates the fair value of the instrument.
8.     OTHER LIABILITIES
Other liabilities consistconsisted of the following:
($ in thousands)September 30, 2017 December 31, 2016($ in thousands)September 30, 2021December 31, 2020
Pension liability (Note 13)$1,626
 $2,931
Pension liability (Note 13)$1,312 $1,602 
Interest rate swap liability (Note 10)1,648
 1,865
Interest rate swap liability (Note 10)3,692 5,929 
Supplemental executive retirement plan liability (Note 13)7,605
 8,015
Supplemental executive retirement plan liability (Note 13)8,239 8,419 
Other286
 223
Excess joint venture distributions and otherExcess joint venture distributions and other3,260 3,067 
Total$11,165
 $13,034
Total$16,503 $19,017 
For the captions presented in the table above, please refer to the respective Notes to Unaudited Consolidated Financial Statements for further detail.
9.     STOCK COMPENSATION - RESTRICTED STOCK AND PERFORMANCE SHARE GRANTS
The Company’s stock incentive plans provide for the making of awards to employees based upon a service condition or through the achievement of performance-related objectives. The Company has issued three3 types of stock grant awards under these plans: restricted stock with service condition vesting; performance share grants that only vest upon the achievement of specified performance conditions, such as corporate cash flow goals or share price, also known as Performance Condition Grants; and performance share grants that include threshold, target, and maximum achievement levels based on the achievement of specific performance milestones,measures, or Performance Milestone Grants. The Company has also granted performance share grants that contain both performance-based andPerformance Condition Grants with market-based conditions. Compensation cost for these awards is recognizedconditions are based on either the achievement of the performance-based conditions, if they are considered probable, or if they are not considered probable, on the achievement of thea target share price. The share price used to calculate vesting for market-based condition.awards is determined using a Monte Carlo simulation. Failure to satisfyachieve the threshold performance conditionstarget share price will result in the forfeiture of shares. Forfeiture of share awards with service conditions or performance-based restrictions resultswill result in a reversal of previously recognized share-based compensation expense. Forfeiture of share awards with market-based restrictions doesdo not result in a reversal of previously recognized share-based compensation expense.


The following is a summary of the Company's performance share grants with performance conditions forCompany’s Performance Condition Grants as of the nine months ended September 30, 2017:
2021:
Performance Condition Grants
Performance Share Grants with Performance ConditionsThreshold performance32,282 
Below thresholdTarget performance
515,919 
Threshold performance169,178
Target performance434,521
Maximum performance666,497
924,338 
The following is a summary of the Company’s stock grant activity, both time and performance share grants, assuming target achievement for outstanding performance share grants for the following periods:nine months ended September 30, 2021:
September 30, 2021
Stock Grants Outstanding Beginning of Period at Target Achievement840,307 
New Stock Grants/Additional Shares due to Achievement in Excess of Target63,622 
Vested Grants(110,517)
Expired/Forfeited Grants(23,956)
Stock Grants Outstanding End of Period at Target Achievement769,456 
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 September 30, 2017 December 31, 2016
Stock grants outstanding beginning of the year at target achievement386,171
 272,353
New stock grants/additional shares due to maximum achievement295,243
 287,091
Vested grants(55,024) (172,749)
Expired/forfeited grants(40,545) (524)
Stock grants outstanding585,845
 386,171
The following is a summary of the assumptions used to determine the price for the Company’s market-based Performance Condition Grants for the nine months ended September 30, 2021:
($ in thousands except for share prices)
Grant date12/12/201903/11/202012/11/202003/18/2021
Vesting end12/31/202212/31/202212/31/202303/18/2024
Share price at target achievement$18.80$16.36$17.07$20.02
Expected volatility17.28%18.21%29.25%30.30%
Risk-free interest rate1.69%0.58%0.19%0.33%
Simulated Monte Carlo share price$11.95$5.87$15.59$18.82
Shares granted6,32781,7163,62810,905
Total fair value of award$76$480$57$205
The unamortized costscost associated with nonvestedunvested stock grants and the weighted average period over which it is expected to be recognized as of September 30, 20172021 were $6,677,000$4,822,000 and 2515 months, respectively. The fair value of restricted stock with time-based vesting features is based upon the Company’s share price on the date of grant and is expensed over the service period. FairThe fair value of performance share grants that cliff vest based on the achievement of performance conditions is based on the share price of the Company’s stock on the day of grant once the Company determines that it is probable that the award will vest. This fair value is expensed over the service period applicable to these grants. For performance share grants that contain a range of shares from zero to a maximum, we determine,the Company determined, based on historic and projected results, the probability of (1) achieving the performance objective and (2) the level of achievement. Based on this information, we determinethe Company determines the fair value of the award and measuremeasures the expense over the service period related to these grants. Because the ultimate vesting of all performance share grants is tied to the achievement of a performance condition, we estimatethe Company estimates whether the performance condition will be met and over what period of time. Ultimately, wethe Company will adjust stock compensation costcosts according to the actual outcome of the performance condition.
Under the Non-Employee Director Stock Incentive Plan, or NDSI Plan, each non-employee director receives a portion of his or her annual compensation in stock. The stock is granted at the end of each quarter based on the quarter endingquarter-end stock price.

The following table summarizes stock compensation costs for the Company's 1998 Employee Stock Incentive Plan, or the Employee Plan, and NDSI Plan for the following periods:
($ in thousands)Nine Months Ended September 30,
Employee Plan:20212020
    Expensed$2,774 $3,239 
    Capitalized330 926 
3,104 4,165 
NDSI Plan - Expensed388 327 
Total Stock Compensation Costs$3,492 $4,492 
($ in thousands)Nine Months Ended September 30,
Employee Plan:2017 2016
    Expensed$2,067
 $1,768
    Capitalized402
 139
 2,469
 1,907
NDSI Plan - Expensed504
 363
Total Stock Compensation Costs$2,973
 $2,270
10.     INTEREST RATE SWAP LIABILITY
DuringIn October 2014, the Company entered into an interest rate swap agreement to hedge cash flows tiedreduce its exposure to changesfluctuations in the underlying floating interest rate tied to the London Inter-Bank Offered Rate, or LIBOR, forunder the term note with Wells Fargo, or the Term Note, as discussed in Note 7 (Linewithin the Capital Structure and Financial Condition section of CreditManagement's Discussion and Long-Term Debt) The ineffective portionAnalysis of Financial Condition and Results of Operations. On June 21, 2019, the change in fair value of ourCompany amended the interest rate swap agreement to continue to hedge a portion of its exposure to interest rate risk from the Term Note, and, subsequently, the Amended Term Note. The original hedging relationship was de-designated, and the amended interest rate swap was re-designated simultaneously. The amended interest rate swap qualified as an effective cash flow hedge at the initial assessment, based upon a regression analysis, and is required to be recognized directly in earnings. recorded at fair value.
During the quarter ended September 30, 2017, our2021, the interest rate swap agreement was 100% effective; because of this, no hedge ineffectiveness was recognized in earnings.deemed highly effective. Changes in fair value, including accrued interest and adjustments for non-performance risk, on the effective portion of our interest rate swap agreements that are designated and that qualify as cash flow hedges are classified in accumulated other comprehensive income. Amounts classified in
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accumulated other comprehensive income, or AOCI. Amounts classified in AOCI are subsequently reclassified into earnings in the period during which the hedged transactions affect earnings. 
As of September 30, 2017,2021, the fair value of ourthe interest rate swap agreement aggregating a liability balance was classified in other liabilities.
Weless than its cost basis and as such is recorded within Other Liabilities on the Consolidated Balance Sheets. The Company had the following outstanding interest rate swap agreement designated as aan interest rate cash flow hedge of interest rate risk as of September 30, 20172021 and December 31, 2020 ($ in thousands):
September 30, 2021
Effective DateMaturity DateFair Value HierarchyWeighted Average Interest Pay RateFair ValueNotional Amount
July 5, 2019June 5, 2029Level 24.16%$(3,692)$51,869
December 31, 2020December 31, 2020
Effective Date Maturity Date Fair Value Hierarchy Weighted Average Interest Rate Fair Value Notional AmountEffective DateMaturity DateFair Value HierarchyWeighted Average Interest Pay RateFair ValueNotional Amount
October 15, 2014 October 5, 2024 Level 2 4.11% $(1,648) $66,916
July 5, 2019July 5, 2019June 5, 2029Level 24.16%$(5,929)$54,887
11.     INCOME TAXES
The Company’s provision for income taxes during the interim reporting periods has historically been calculated by applying an estimate of the annual effective tax rate for the full year to “ordinary” income or loss (pre-tax income or loss excluding unusual or infrequently occurring discrete items) for each respective reporting period. However, the Company utilized a discrete effective tax rate method, as allowed by ASC 740-270 “Income Taxes—Interim Reporting,” to calculate taxes for the nine months ended September 30, 2021. The Company made this choice because it determined that the historical method would not provide a reliable estimate for tax expense for the nine months ended September 30, 2021 due to a high degree of uncertainty in estimating annual pretax earnings.
For the nine months ended September 30, 2017,2021, the Company's income tax benefit was $1,268,000 compared toCompany’s income tax expense of $503,000was $1,237,000 compared to $1,111,000 for the nine months ended September 30, 2016. These represent effective income2020. Effective tax rates of approximately 40%were 38% and 39%229% for the nine months ended September 30, 20172021 and 2016,2020, respectively. As of September 30, 2017, we2021, the Company had income tax receivablereceivables of $1,781,000.$674,000. The Company classifies interest and penalties incurred on tax payments as income tax expense. During
For the nine months ended September 30, 2021, the Company’s effective tax rate was above statutory tax rates as a result of permanent differences related to Section 162(m) limitations and discrete tax expense associated with stock compensation. The Section 162(m) compensation deduction limitations occurred as a result of changes in tax law arising from the 2017 Tax Cuts Jobs Act. The discrete item was triggered when stock grants were issued to participants at a price less than the Company made $0original grant price, causing a deferred tax shortfall. The shortfall recognized represents the reversal of excess deferred tax assets recognized in prior periods. The recognition of the shortfall is not anticipated to have an impact on the Company's current income tax payments.

payable.

12.     COMMITMENTS AND CONTINGENCIES
Water Contracts
The Company's land is subject toCompany has secured water contracts ofthat are encumbered by the Company's land. These water contracts require minimum annual payments, for which $7,564,000 was$12,310,000 has been paid during the first nine months of 2017. We doin 2021. The Company does not expect there to beany additional water payments for the remainder of 2017.the year. These estimated water contract payments consist of SWP contracts with Wheeler Ridge Maricopa Water Storage District, Tejon-Castac Water District, orWRMWSD, TCWD, Tulare Lake Basin, Water Storage District, Dudley-Ridge, Water Storage District and the Nickel water contract. The SWP contracts run through 2035 and the Nickel water contract runs through 2044, with an option to extend an additional 35 years. As discussed in Note 5 (Investments In Water Assets), we purchased the assignmentContractual obligations for future water payments were $266,116,000 as of a contract to purchase water in late 2013. The assigned water contract is with Nickel Family, LLC, and obligates us to purchase 6,693 acre-feet of water annually through the term of the contract.September 30, 2021.
Conservancy Payments
The Company iswas obligated to make payments of approximately $800,000 per year through 2021 to the Tejon Ranch Conservancy, as prescribed in the 2008 Conservation Agreement we entered into with five major environmental organizations in 2008. Our advancesorganizations. Advances to
the Tejon Ranch Conservancy arewere dependent on the occurrence of certain events and their timing and are therefore subject to
change in amount and period. TheseAll amounts paid are recorded incapitalized as real estate development costs for the Centennial, Grapevine and Mountain Village, or MV, projects. As of the date of this filing, the Company has fulfilled its financial obligations under the agreement, a commitment that totaled $11,760,000.
On December 2, 2020, conservation groups filed an action against the Company in Kern County Superior Court, alleging that the Company breached its obligation under the Tejon Ranch Conservation and Land Use Agreement (or the “RWA”) by not
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making a payment for Q4 2020 to the Tejon Ranch Conservancy (or the “Conservancy”) – a non-profit organization created under the RWA to oversee conservation of portions of Tejon Ranch.
Pursuant to the terms of the RWA, the Company deposited the Q4 2020 payment to the Conservancy into a third-party escrow account pending a determination of the Company’s disputes with the Conservancy. The Company also deposited all the 2021 payments into escrow. On January 25, 2021, in response to an objection to the complaint by the Company, a First Amended Complaint was filed adding the Tejon Ranch Conservancy as a party to the action. Discovery and pre-trial motions are currently ongoing.A trial date has been set for December 5, 2022 with a mandatory settlement conference scheduled for November 4, 2022.
As of the date of this report, the Company believes it has performed all its obligations under the RWA and has withheld the escrowed payments based on its belief that the Conservancy and other signatories to the RWA have violated its terms. The Company has been vigorously defending the action and does not believe that the resolution of the action will result in a liability to the Company beyond the costs associated with defending the action and the amounts held in escrow deposits and a possibility that the Company be required to pay plaintiffs’ cost of suit.
Contracts
The Company exited a consulting contract during the second quarter of 2014 related to the Grapevine Development, or Grapevine project, and is obligated to pay an earned incentive fee at the time of its successful receipt of litigated project entitlements and at a value measurement date five-years after litigated entitlements have been achieved for Grapevine. The final amount of the incentive feesfee will not be finalized until the future payment dates. The Company believes thatas of September 30, 2021, the net savings resulting from exiting the contract overduring this future time period will more than offset the incentive payment costs.
Community Facilities Districts
The Tejon Ranch Public Facilities Financing Authority, or TRPFFA, is a joint powers authority formed by Kern County and TCWD to finance public infrastructure within the Company’s Kern County developments. For the development of the Tejon Ranch Commerce Center, or TRCC, TRPFFA has created two2 Community Facilities Districts, or CFDs,CFDs: the West CFD and the East CFD. The West CFD has placed liens on 420 acres of the Company’s land to secure payment of special taxes related to $28,620,000 of bond debt sold by TRPFFA for TRCC-West. The East CFD has placed liens on 1,931 acres of the Company’s land to secure payments of special taxes related to $55,000,000$75,965,000 of bond debt sold by TRPFFA for TRCC-East. At TRCC-West, the West CFD has no additional bond debt approved for issuance. At TRCC-East, the East CFD has approximately $65,000,000$44,035,000 of additional bond debt authorized by TRPFFA that can be sold in the future.
In connection with the sale of the bonds, there is a standby letter of credit for $4,921,000$4,393,000 related to the issuance of East CFD bonds. The standby letter of credit is in place to provide additional credit enhancement and cover approximately two years' worthyears of interest on the outstanding bonds. This letter of credit will not be drawn upon unless the Company, as the largest landowner in the CFD, fails to make its property tax payments. The Company believes that the letter of credit will never be drawn upon. The letter of credit is for two years and will be renewed in two-year intervals as necessary. The annual cost related to the letter of credit is approximately $83,000.


$68,000.
The Company is obligated, as a landowner in each CFD, to pay its share of the special taxes assessed each year. The secured lands include both the TRCC-West and TRCC-East developments. Proceeds from the sale of West CFD bonds went to reimburse the Company for public infrastructure costs related to the TRCC-West development. AtAs of September 30, 20172021, there were no additional improvement funds remaining from the West CFD bonds and therebonds. There are $7,768,000 in$15,647,940 of additional improvement funds remaining within the East CFD bonds for reimbursement of public infrastructure costs during 2017 and future years. During 2017,fiscal 2021, the Company paidexpects to pay approximately $1,292,000$2,860,000 in special taxes. As development continues to occur at TRCC, new owners of land and new lease tenants, through triple net leases, will bear an increasing portion of the assessed special tax. This amount could change in the future based on the amount of bonds outstanding and the amount of taxes paid by others. The assessmenttaxing of each individual property sold or leased is not determinable at this time because it is based on the current tax rate and the assessed value of the property at the time of sale or on its assessed value at the time it is leased to a third-party. Accordingly, the Company iswas not required to recognize an obligation aton September 30, 2017.2021.
Tehachapi Uplands Multiple Species Habitat Conservation Plan Litigation
In July 2014, the Company received a copy of a Notice of Intent to Sue, or Notice, dated July 17, 2014, indicating that the Center for Biological Diversity, or CBD, the Wishtoyo Foundation and Dee Dominguez intend(collectively the TUMSHCP Plaintiffs) intended to initiate a lawsuit against the U.S. Fish and Wildlife Service, or USFWS, under the federal Endangered Species Act challenging USFWS's approval of Ranchcorp'sthe Company's Tehachapi Uplands Multiple Species Habitat Conservation Plan, or TUMSHCP, and USFWS's issuance of an Incidental Take Permit, or ITP, to Ranchcorp for the take of federally listed species. The foregoingTUMSHCP approval and ITP issuance by the USFWS occurred in 2013. These approvals authorize, among other things, the removal of California condor habitat associated with Ranchcorp'sthe Company's potential future development of MV. No lawsuit
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On April 25, 2019, the TUMSHCP Plaintiffs filed suit against the USFWS in the U.S. District Court for the Central District of California in Los Angeles (Case No. 2:19-CV-3322) (the TUMSHCP Suit). The Company was not initially named as a party in the TUMSHCP Suit and brought a motion to intervene, which the court granted. The TUMSHCP Suit seeks to invalidate the TUMSHCP as it pertains to the protection of the California condor (an endangered species), as well as the ITP.
The primary allegations in the TUMSHCP Suit are that California condors or their habitat are “Traditional Cultural Properties” within the meaning of the National Historic Preservation Act (NHPA), that the USFWS failed to take into account the impact of the TUMSHCP and ITP on these “Traditional Cultural Properties” and failed to adequately consult with affected Native American tribes or their representatives with respect to these “Traditional Cultural Properties.”
Management considers the allegations in the TUMSHCP Suit to be beyond the scope of the law and regulations referenced in the TUMSHCP Suit and believes that the issues raised by the TUMSHCP Plaintiffs were adequately addressed by USFWS during the consultation process with Native American tribes. The Company has been filed atsupported USFWS's efforts to vigorously defend this time. Itmatter during this litigation.
In a December 18, 2019 ruling, the court ordered that the parties proceed to bring motions for summary judgment on the question of whether the USFWS correctly determined that the California condor is not possiblea “Traditional Cultural Property” under the NHPA. In response to predict whether any lawsuit will actuallythis order, both the TUMSHCP Plaintiffs and the USFWS and the Company filed cross-motions for summary judgment.
On December 4, 2020, the court issued an order denying, in its entirety, the TUMSHCP Plaintiffs’ motions for summary judgment and granted, in their entirety, USFWS and the Company’s motions for summary judgment. On December 18, 2020, the Company brought a motion to recover attorneys’ fees and costs, as the prevailing party, against the TUMSHCP Plaintiffs.

On February 2, 2021, the court denied the fee motion. Following the court’s ruling on the fee motion, on February 2, 2021, Plaintiffs notified the court of their intent to appeal the court’s ruling on their claims. On April 2, 2021, the Ninth Circuit Court of Appeal issued a revised briefing schedule that required opening and responsory briefs to be filed or whetherin May and June 2021. On October 4, 2021, the Ninth Circuit issued an order dismissing the appeal. With the issuance of the order, the appeal is permanently dismissed and the TUMSHCP Suit cannot be relitigated and the permit issued to the Company or Ranchcorp will incur any damages from such a lawsuit.stays in effect.
National Cement
The Company leases land to National Cement Company of California Inc., or National, for the purpose of manufacturing Portland cement from limestone deposits on the leased acreage. The California Regional Water Quality Control Board, or RWQCB, for the Lahontan Region issued orders in the late 1990s with respect to environmental conditions on the property currently leased to National.
The Company's former tenant Lafarge Corporation, or Lafarge, and current tenant National, continue to remediate these environmental conditions consistent with the RWQCB orders.
TheAs of September 30, 2021, the Company is not aware of any failure by Lafarge or National to comply with directives of the RWQCB. Under current and prior leases, National and Lafarge are obligated to indemnify the Company for costs and liabilities arising out of their use of the leased premises. The remediation of environmental conditions is included within the scope of the National or Lafarge indemnity obligations. If the Company were required to remediate the environmental conditions at its own cost, it is unlikely that the amount of any such expenditure by the Company would be material and there is no reasonable likelihood of continuing risk from this matter.

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Antelope Valley Groundwater Cases
On November 29, 2004, a conglomerate of public water suppliers filed a cross-complaint in the Los Angeles Superior Court against landowners and others with interest in the groundwater basin within the Antelope Valley (including the Company) seeking a judicial determination of the rights to groundwater within the Antelope Valley basin, including the groundwater underlying the Company’s land near the Centennial project. Four phases of a multi-phase trial have been completed. Upon completion of the third phase, the court ruled that the groundwater basin is currentlywas in overdraft and established a current total sustainable yield. The fourth phase of trial occurred in the first half of 2013 and resulted in confirmation of each party’s groundwater pumping for 2011 and 2012. The fifth phase of the trial commenced in February 2014 and concerned 1) whether the United States has a federal reserved water right to basin groundwater, and 2) the rights to return flows from imported water. The court heard evidence on the federal reserved right but continued the trial on the return flow issues while most of the parties to the adjudication discussed a settlement, including rights to return flows. In February 2015, more than 140 parties representing more than 99% of the current water use within the adjudication boundary agreed to a settlement. On March 4, 2015, the settling parties, including Tejon,the Company, submitted a Stipulation for Entry of Judgment and Physical Solution to the court for approval. On December 23, 2015, the court entered Judgmentjudgment approving the Stipulation for Entry of Judgment and Physical Solution.Solution, or the Judgment. The Company’s water supply plan for the Centennial project anticipated reliance on, among other sources, a certain quantity of groundwater underlying the Company’s lands in the Antelope Valley. The Company’s allocation in the Judgment is consistent with that amount. Prior to the Judgment becoming final, on February 19 and 22, 2016, several parties, including the Willis Class and(Willis), Phelan Pinon Hills Community Services District (Phelan), and Charles Tapia (Tapia) filed notices of appeal from the Judgment.Judgment (collectively, the Phelan Appeal). The Phelan Appeal has beenwas transferred from the Count of Appeal, Fourth Appellate District of California to the Court of Appeal, Fifth Appellate District. Appellate briefing will likely occur during 2018. NotwithstandingDistrict of California, or the appeals,Fifth District Court of Appeal.
On December 9, 2020, the Fifth District Court of Appeal affirmed the Judgment as to the Phelan Appeal, and the decision is now final. On March 16, 2021, the Fifth District Court of Appeal issued two decisions affirming the Judgment as to both Willis and Tapia. The Tapia decision is now final. The Willis Class filed a Petition for Rehearing which was denied on April 6, 2021.On May 14, 2021, the Willis Class filed a petition for review to the California Supreme Court which was denied on July 21, 2021. The Willis decision is now final. Following the resolution of these challenges, the Judgement is now final.
The parties, with assistance from the Courtcourt, have begun establishment ofestablished the Watermaster Board, hired the Watermaster Engineer and administration ofWatermaster Legal Counsel, and begun administering the Physical Solution,physical solution consistent with the Judgment.
Summary and Status of Kern Water Bank Lawsuits
On June 3, 2010, the Central Delta and South Delta Water Agencies and several environmental groups, including CBD, collectively, the Center for Biological Diversity (collectively, “Central Delta”),Central Delta Petitioners, filed a complaint in the Sacramento County Superior Court, or the Central Delta Action, against the California Department of Water Resources, or DWR, Kern County Water Agency, or KCWA, and a number of “real parties in interest,” including the Company and TCWD.  The lawsuit challenges certain amendments to the SWP contracts that were originally approved in 1995, known as the “MontereyMonterey Amendments. The Central Delta Petitioners in this action sought to invalidate the DWR’s approval of the Monterey Amendments and also the 2010 environmental documentationimpact report, or 2010 EIR, regarding the Monterey Amendments prepared pursuant to the California Environmental Quality Act, or CEQA, pertaining to the Kern Water Bank.


The original Environmental Impact Report,Bank, or EIR, forKWB. Pursuant to the Monterey Amendments, was determined to be insufficientDWR transferred approximately 20,000 acres in an earlier lawsuit. The current lawsuit principally (i) challenges the adequacy of the remedial EIR thatKern County owned by DWR, prepared as a result of the original lawsuit and (ii) challenges the validity of the Monterey Amendments on various grounds, including the transfer of the Kern Water Bank, or KWB lands, from DWRproperty, to the Kern County Water Agency and in turn to the Kern Water Bank Authority,KCWA.
A separate but parallel lawsuit, or KWBA, whose members are various Kern and Kings County interests, including TCWD, which TCWD has a 2% interest in the KWBA. A parallel lawsuitCentral Delta II, was also filed by the Central Delta Petitioners in Kern County Superior Court on July 2, 2010, against Kern County Water Agency,KCWA, also naming the Company and TCWD as real parties in interest, whichinterest. Central Delta II challenged the validity of the transfer of the KWB property from the KCWA to the Kern Water Bank Authority, or KWBA. The petitioners in this case alleged that (i) the transfer of the KWB property by KCWA to the KWBA was an unconstitutional gift of public funds, and (ii) the consideration for the transfer of the KWB property to the KWBA was unconscionable and illusory. This case has been stayed pending the outcome of the other action against DWR.  The Company is named on the ground that it “controls” TCWD.  This lawsuit has since been moved to the Sacramento County Superior Court. AnotherCentral Delta Action.
In addition, another lawsuit was filed in Kern County Superior Court on June 3, 2010, by two districts adjacent to the KWB, namely Rosedale Rio Bravo and Buena Vista Water Storage Districts or(collectively, the Rosedale Petitioners), asserting that the remedial2010 EIR did not adequately evaluate potential impacts arising from operations of the KWB, or Rosedale Action, but this lawsuit did not name the Company,Company: it only named TCWD. TCWD has a contract right for water stored in the KWB and rights to recharge and withdraw water. This lawsuit has since beenwas later moved to the Sacramento County Superior Court.
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In an initial favorable rulingthe Central Delta Action and Rosedale Action, the trial courts concluded that the 2010 EIR for the Monterey Amendments was insufficient with regard to the EIR's evaluation of the potential impacts of the operation of the KWB, particularly on January 25, 2013,groundwater and water quality, and ruled that DWR was required to prepare a remedial EIR (which is further described below). In the Central Delta Action, the trial court determinedalso concluded that the challenges to the validityDWR’s 1995 approval of the Monterey Amendments including the transfer of the KWB lands, were not timely and were barred by the statutes of limitation,limitations and laches. The Central Delta Petitioners appealed the doctrine of laches,Sacramento County Superior Court Judgment, and bycertain real parties filed a cross-appeal. No party appealed the annual validating statute. The substantive hearing on the challenges to the EIR was held on January 31, 2014. On March 5, 2014 the court issued a decision, rejecting all of Central Delta’s California Environmental Quality Act, or CEQA, claims, exceptKern County Superior Court Judgment in the Rosedale claim, joined by Central Delta, that the EIR did not adequately evaluate future impacts from operation of the KWB, in particular potential impacts on groundwater and water quality.Action.
On November 24, 2014, the courtSacramento County Superior Court in the Central Delta Action issued a writ of mandate, (the “2014 Writ”)or 2014 Writ, that requiresrequired DWR to prepare a revised EIR (described herein as the 2016 EIR because it was certified in 2016) regarding the Monterey Amendments evaluating the potential operational impacts of the KWB. The 2014 Writ, authorizes the continued operation of the KWB pending completion of the revised EIR subject to certain conditions including those described in an interim operating plan negotiated between the KWBA and Rosedale. The 2014 Writ, as revised by the court, requiresrequired DWR to certify the revised2016 EIR and file the returnresponse to the 2014 Writ by September 28, 2016. On September 20, 2016, the Director of DWR (a) certified the revised2016 EIR prepared by DWR or the Revised EIR, as in compliance with CEQA, (b) adopted findings, a statement of overriding considerations, and a mitigation, monitoring and reporting program as required by CEQA, (c) made a new finding pertaining to carrying out the Monterey Amendments through continued use and operation of the KWB by the KWBA, and (d) caused a notice of determination to be filed with the Office of Planning and Resources of the State of California on September 22, 2016. On September 28, 2016, DWR filed with the Sacramento County Superior Court its return to the 2014 Writ.
On November 24, 2014, the court entered a judgmentWrit in the Central Delta case (1) dismissing the challenges to the validity of the Monterey Amendments and the transfer of the KWB lands in their entirety and (2) granting in part, and denying, in part, the CEQA petition for writ of mandate. Central Delta has appealed the judgment and the KWBA and certain other parties have filed a cross-appeal with regard to certain defenses to the CEQA cause of action. The appeals are pending in the California Court of Appeal.Action.
On December 3, 2014, the court entered judgment in the Rosedale case (i) in favor of Rosedale in the CEQA cause of action, and (ii) dismissing the declaratory relief cause of action. No appeal of the Rosedale judgment has been filed. Rosedale has stipulated to the discharge of the 2014 Writ.
On October 21, 2016, the Central Delta petitionersPetitioners and a new party, the Center for Food Safety (“(CFS) (collectively, the CFS Petitioners”)Petitioners), filed a new lawsuit in Sacramento County Superior Court, (the "CFS Petition")CFS Action), against DWR and naming a number of real parties in interest, including KWBA and TCWD (but not including the Company). The new lawsuitCFS Action challenges


DWR’s (i) certification of the Revised2016 EIR, (ii) compliance with the 2014 Writ and CEQA, and (iii) finding concerning the continued use and operation of the KWB by KWBA. In response to a motion filed by the CFS Petitioners, on April 7, 2017 the Superior Court denied the CFS Petitioners’ motion to stay the Superior Court proceedings on the return to the 2014 Writ and CFS petition pending appeal. The Superior Court subsequently modified the 2014 Writ to authorize the KWBA to construct an additional 190 acres of recharge ponds within the KWB pending the court's consideration of DWR's return to the 2014 Writ and the petition in CFS vs DWR. On August 18, 2017 the Superior Court held a hearing on the return to the 2014 Writ and on the CFS Petition. On October 2, 2017, the Sacramento County Superior Court issued a ruling that the Courtcourt shall deny the CFS Petitionpetition and shall discharge the 2014 Writ.
To The CFS Petitioners appealed the extent there may be an adverse outcomeSacramento County Superior Court judgment denying the CFS petition. The Third Appellate District of the claims stillCourt of Appeal granted DWR’s motion to consolidate the CFS Action appeal for hearing with the pending as described above,appeals in the monetary value cannot be estimated at this time.Central Delta Action.

On July 19, 2021 the Court of Appeal heard oral argument on the appeals in the Central Delta Action and the CFS Action.On September 22, 2021 the Court of Appeal issued its opinion unanimously affirming the judgments of the Superior Court in the Central Delta Action and in the CFS Action. On November 1, 2021, the CFS Petitioners filed a Petition for Review with the California Supreme Court of the Opinion of the Court of Appeal.
Grapevine
On December 6, 2016, the Kern County Board of Supervisors unanimously granted entitlement approval for the Grapevine project (described below).project. On January 5, 2017, the Center for Biological Diversity, or CBD and the Center for Food Safety, or CFS, filed an action in Kern County Superior Court pursuant to CEQA against Kern County and the Kern County Board of Supervisors, (collectively,or collectively, the “County”)County, concerning the County’s granting of the 2016 approvals for the Grapevine project, including certification of the final EIR and related findings; approval of associated general plan amendments; adoption of associated zoning maps; adoption of Specific Plan Amendment No. 155, Map No. 500; adoption of Special Plan No. 1, Map No. 202; exclusion from Agricultural Preserve No. 19; and adoption of a development agreement, among other associated approvals.(the 2017 Action). The Company and its wholly-owned subsidiary, Tejon Ranchcorp, arewas named as a real partiesparty in interest in this action.
the 2017 Action. The action alleges2017 Action alleged that the County failed to properly follow the procedures and requirements of CEQA, including failure to identify, analyze and mitigate impacts to air quality, greenhouse gas emissions, biological resources, traffic, water supply and hydrology, growth inducing impacts, failure to adequately consider project alternatives and to provide support for the County’s findings and statement of overriding considerations in adopting the EIR and failure to adequately describe the environmental setting and project description. As of the publication of this filing there have been no hearings on this matter and the County and real parties in interest have not filed their responsive pleadings. Petitioners seeksought to invalidate the County'sCounty’s approval of the project and the environmental approvals and require the Company and the County to revise the environmental documentation.
On July 27, 2018, the court held a hearing on the petitioners’ claims in the 2017 Action. At that hearing, the court rejected all of petitioners’ claims raised in the litigation, except petitioners’ claims that (i) the project description was inadequate and (ii) such inadequacy resulted in aspects of certain environmental impacts being improperly analyzed. As to the claims described in “(i)” and “(ii)” in the foregoing sentence, the court determined that the EIR was inadequate. In that regard, the court determined the Grapevine project description contained in the EIR allowed development to occur in the time and manner determined by the real parties in interest and, as a consequence, such development flexibility could result in the project’s internal capture rate, or ICR, of the percent of vehicle trips remaining within the project actually being lower than the projected ICR levels used in the EIR and that lower ICR levels warranted supplemental traffic, air quality, greenhouse gas emissions, noise, public health and growth inducing impact analyses.
On December 11, 2018, the court in the 2017 Action ruled that portions of the EIR required corrections and supplemental environmental analysis and ordered that the County rescind the Grapevine project approvals until such supplemental environmental analysis was completed. The court issued a final judgment consistent with its ruling on February 15, 2019 and, on March 12, 2019, the County rescinded the Grapevine project approvals.
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Following the County’s rescission of the Grapevine project approvals, the Company filed new applications to re-entitle the Grapevine project (the re-entitlement). The re-entitlement application involved processing project approvals that were substantively similar to the Grapevine project that was unanimously approved by the Kern County Board of Supervisors in December 2016. As part of the re-entitlement, supplemental environmental analysis was prepared to address the court’s ruling in the 2017 Action. Following a public comment and review period, the Kern County Planning Commission held a hearing on November 14, 2019 and unanimously recommended to the Kern County Board of Supervisors that it approve the re-entitlement of the Grapevine project. On December 10, 2019, the Kern County Board of Supervisors held a hearing and after considering the supplemental environmental analysis and material presented at the hearing unanimously voted to approve the re-entitlement of the Grapevine project. On January 9, 2020, the County filed a Supplemental and Final Return to Preemptory Writ of Mandate to inform the court of the re-entitlement in a manner that the County and the Company believed was compliant with the court’s February 15, 2019 final judgment in the 2017 Action. Concurrently, the County and the Company filed a Motion for Order Discharging Writ of Mandate, which requested that the court determine that the re-entitlement complied with the court’s February 15, 2019 final judgment in the 2017 Action (the Motion for Order to Discharge 2017 Writ of Mandate). A hearing was held on February 14, 2020 for this motion and is further summarized below.
On January 10, 2020, CBD filed a new and separate action in Kern County Superior Court pursuant to CEQA against the County, concerning the County’s approval of the December 2019 re-entitlement, including certification of the final EIR (the 2020 Action). The Company was named as real party in interest in the 2020 Action. The 2020 Action alleged that the County failed to properly follow the procedures and requirements of CEQA with respect to the re-entitlement of the Grapevine project, including failure to identify, analyze and mitigate impacts to air quality, greenhouse gas emissions, biological resources, public health, and traffic, and failed to provide support for the County’s findings and statement of overriding considerations in adopting the EIR. CBD sought to invalidate the County’s approval of the re-entitlement, the environmental approvals for the re-entitlement and require the Company and the County to revise the environmental documentation. On January 22, 2020, the Company and County filed a demurrer and motion to strike the claims in the 2020 Action on the basis that the claims brought by CBD were resolved by the court in the 2017 Action, pursuant to the final judgment issued in the 2017 Action. The Company and County’s motion described in the previous sentence also included an alternative request that the court consolidate CBD’s claims in the 2020 Action with its disposition of any remaining matters relating to the 2017 Action. A hearing on these motions filed in the 2020 Action and on the Motion for Order Discharging Writ of Mandate (described above and relating to the 2017 Action) was held on February 14, 2020. At the hearing, the court granted the Company and County’s request to consolidate the 2020 Action with its adjudication of the Company and County’s compliance with the writ of mandate issued by the Court in the 2017 Action. The court denied, without prejudice, the Company and County’s motion to discharge the writ in the 2017 Action and their demurrer and motion to strike the claims in the 2020 Action, but the court further ruled that the Company and County could re-assert these arguments later once additional evidence was before the court.
On January 22, 2021, the court conducted a hearing on the 2020 Action and the Motion for Order to Discharge the 2017 Writ of Mandate. At the January 22nd hearing, the court ruled in favor of the Company and the County on all issues: (1) granting the County’s Motion for Order to Discharge the 2017 Writ of Mandate and (2) rejecting each and every claim made by CBD in the 2020 Action. The court entered a final judgment reflecting its ruling in favor of the Company and the County on March 22, 2021. As CBD did not file an appeal by the court deadline, the judgement is final.
Centennial
On April 30, 2019, the Los Angeles County Board of Supervisors granted final entitlement approval for the Centennial project. On May 15, 2019, Climate Resolve filed an action in Los Angeles Superior Court (the Climate Resolve Action), pursuant to CEQA and the California Planning and Zoning Law, against the County of Los Angeles and the Los Angeles County Board of Supervisors (collectively, LA County) concerning LA County’s granting of approvals for the Centennial project, including certification of the final environmental impact report and related findings (Centennial EIR); approval of associated general plan amendments; adoption of associated zoning; adoption of the Centennial Specific Plan; approval of a subdivision map for financing purposes; and adoption of a development agreement, among other approvals (collectively, the Centennial Approvals). Separately, on May 28, 2019, CBD and the California Native Plant Society (CNPS) filed an action in Los Angeles County Superior Court (the CBD/CNPS Action) against LA County; like the Climate Resolve Action, the CBD/CNPS Action also challenges the Centennial Approvals. The Company, its wholly owned subsidiary Tejon Ranchcorp, and Centennial Founders, LLC are named as real parties-in-interest in both the Climate Resolve Action and the CBD/CNPS Action.
The Climate Resolve Action and the CBD/CNPS Action collectively allege that LA County failed to properly follow the procedures and requirements of CEQA and the California Planning and Zoning Law. The Climate Resolve Action and the CBD/CNPS Action have been deemed “related” and have been consolidated for adjudication before the judge presiding over the Climate Resolve Action. The Climate Resolve Action and CBD/CNPS Action seek to invalidate the Centennial Approvals and require LA County to revise the environmental documentation related to the Centennial project. The court held three consolidated hearings for the CBD/CNPS Action and Climate Resolve Action on September 30, 2020, November 13, 2020, and January 8, 2021. On April 5, 2021 the court issued its decision denying the petition for writ of mandate by CBD/CNPS and granting the petition for writ of mandate filed by Climate Resolve. In granting Climate Resolve’s petition, the court found three specific areas where the EIR for the project was lacking. The court ruled that California’s Cap-and-Trade Program cannot be
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used as a compliance pathway for mitigating greenhouse gas (GHG) impacts for the project and therefore further ruled that additional analysis will be required related to all feasible mitigation of GHG impacts. The court also found that the EIR must provide additional analysis and explanation of how wildland fire risk on lands outside of the project site, posed by on-site ignition sources, is mitigated to less than significant. On April 19, 2021 CBD filed a motion for reconsideration with the court on the denial of their petition for writ of mandate. The hearing on this motion originally scheduled for August 13, 2021, has tentatively been rescheduled to December 1, 2021. As of the date of this report, final judgment has not yet been issued by the court for either the CBD/CNPS or Climate Resolve actions. Final judgment is scheduled to be lodged with the court on November 30, 2021. Once final judgments are entered, appellate litigation may follow. To the extent there may be an adverse outcome of the claims still pending as described above, the monetary value cannot be estimated at this time.
Proceedings Incidental to Business
From time to time, we arethe Company is involved in other proceedings incidental to ourits business, including actions relating to employee claims, real estate disputes, contractor disputes and grievance hearings before labor regulatory agencies.
The outcome of these other proceedings is not predictable. However, based on current circumstances, we dothe Company does not believe that the ultimate resolution of these other proceedings after considering available defenses and any insurance coverage or indemnification rights, will have a material adverse effect on ourthe Company’s financial position, results of operations or cash flows, either individually or in the aggregate.


13.    RETIREMENT PLANS
The Company hassponsors a defined benefit retirement plan, or Benefit Plan, that covers many of itseligible employees or the Benefit Plan.hired prior to February 1, 2007. The benefits are based on years of service and the employee’s five-year final average salary. Contributions are intended to provide for benefits attributable to service both to-dateto date and expected-to-beexpected to be provided in the future. The Company funds the Benefit Planplan in accordance with the Employee Retirement Income Security Act of 1974 (ERISA) and. In April 2017, the Pension Protection Act. The Company in April 2017, froze the Benefit Plan as it relates to future benefit accruals for participants. The Benefit Plan was closedCompany expects to new participants in February 2007. The benefit accrual freeze resulted in an adjustment to the Benefit Plan, improving our other comprehensive loss position by $1,139,000. The Company contributedcontribute $165,000 to the Benefit Plan during 2017.in 2021.
Benefit Plan assets consist of equity, debt and short-term money market investment funds. The Benefit Plan’s current investment policy targets 65% equities, 25% debtchanged during the third quarter of 2018. The policy's strategy seeks to minimize the volatility of the funding ratio. This objective will result in a prescribed asset mix between "return seeking" assets (e.g., stocks) and 10% money market funds. Equity and debta bond portfolio (e.g., long duration bonds) according to a pre-determined customized investment percentages are generally allowedstrategy based on the Benefit Plan's funded status as the primary input. This path will be used as a reference point as to fluctuate plus or minus 20% to take advantagethe mix of market conditions. As an example, equities could fluctuate from 78% to 52% of plan assets.assets, which by design will de-emphasize the return seeking portion as the funded status improves. At September 30, 2017,2021, the investment mix was approximately 57%35% equity, 39%64% debt, and 4%1% money market funds. At December 31, 2016,2020, the investment mix was approximately 60%65% equity, 29%34% debt, and 11%1% money market funds. Equity investments consistcomprise of a combination of individual equity securities plus value, funds, growth, funds, large cap, fundssmall cap and international stock funds. Debt investments consist of U.S. Treasury securities and investment grade corporate debt. TheA weighted average discount ratesrate of 2.5% was used in determining the net periodic pension cost were 3.9%for fiscal 2021 and 4.3% in 2017 and 2016, respectively.2020. The assumed expected long-term rate of return on plan assets is 7.5% in 20177.3% for both fiscal 2021 and 2016.2020. The long-term rate of return on Benefit Plan assets is based on the historical returns within the plan and expectations for future returns.
The expected totalTotal pension and retirement expenseearnings for the Benefit Plan was as follows:
Nine Months Ended September 30,
($ in thousands)20212020
Earnings (cost) components:
Interest cost$(219)$(255)
Expected return on plan assets564 483 
Net amortization and deferral(54)(51)
Total net periodic pension earnings$291 $177 
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 Nine Months Ended September 30,
($ in thousands)2017 2016
Cost components:   
Service cost-benefits earned during the period$(30) $(167)
Interest cost on projected benefit obligation(292) (305)
Expected return on plan assets397
 387
Net amortization and deferral(74) (138)
Total net periodic pension cost$1
 $(223)

The Company has a Supplemental Executive Retirement Plan, or SERP, to restore to executives designated by the Compensation Committee of the Board of Directors the full benefits under the pension plan that would otherwise be restricted by certain limitations now imposed under the Internal Revenue Code. The SERP is currently unfunded. The Company inIn April 2017, the Company froze the SERP plan as it relates to the accrual of additional benefits resulting in a SERP liability adjustment, improving our other comprehensive loss position by $487,000. benefits.
The pension and retirement expense for the SERP was as follows:
Nine Months Ended September 30,
($ in thousands)20212020
Cost components:
Interest cost$(123)$(171)
Net amortization and other(93)(66)
Total net periodic pension expense$(216)$(237)
 Nine Months Ended September 30,
($ in thousands)2017 2016
Cost components:   
Interest cost on projected benefit obligation$(216) $(242)
Net amortization and deferral(189) (257)
Total net periodic pension cost$(405) $(499)


14.    REPORTING SEGMENTS AND RELATED INFORMATION
WeThe Company currently operateoperates in five5 reporting segments: commercial/industrial real estate development, resort/residential real estate development, mineral resources, farming, and ranch operations. For further details of the revenue components within each reporting segment, see Results of Operations by Segment in Item 2, "Management's Discussion and Analysis of Financial Condition and Results of Operations."
Commercial lease revenue consistsReal estate - Commercial/Industrial
Commercial/Industrial real estate development segment revenues consist of land andsale revenues, leases of land and/or building leasesspace to tenants at ourthe Company's commercial retail and industrial developments, base and percentage rents from our Pastoria Energy Facilitythe PEF power plant lease, communication tower rents, land sales, and payments from easement leases. Refer to Note 15 for discussion of unconsolidated joint ventures. The following table summarizes revenues, expenses and operating income from this segment for the periods ended:
Three Months Ended September 30,Nine Months Ended September 30,
($ in thousands)2021202020212020
Commercial/industrial revenues$2,466 $2,710 $12,820 $7,144 
Equity in earnings of unconsolidated joint ventures1,510 1,093 2,816 3,629 
Commercial/industrial revenues and equity in earnings of unconsolidated joint ventures3,976 3,803 15,636 10,773 
Commercial/industrial expenses2,331 2,026 8,595 5,704 
Operating results from commercial/industrial and unconsolidated joint ventures$1,645 $1,777 $7,041 $5,069 

Real Estate - Resort/Residential
The revenue components of the commercial/industrial real estate development segment were as follows:
 Three Months Ended September 30, Nine Months Ended September 30,
($ in thousands)2017 2016 2017 2016
Pastoria Energy Facility Lease$1,054
 $967
 $2,779
 $2,698
Tejon Ranch Commerce Center700
 503
 2,287
 1,509
Commercial leases309
 378
 901
 1,182
Communication leases229
 205
 603
 595
Landscaping and other140
 168
 536
 550
Land sale
 
 
 
Commercial/industrial revenues2,432
 2,221
 7,106
 6,534
Equity in earnings from unconsolidated joint ventures1,724
 2,353
 3,512
 5,650
Total commercial/industrial revenues and equity in earnings from unconsolidated joint ventures4,156
 4,574
 10,618
 12,184
Net operating income from commercial/industrial and unconsolidated joint ventures$2,841
 $2,827
 $5,658
 $7,044

The resort/residentialResort/Residential real estate development segment is actively involved in thepursuing land entitlement and development processprocesses both internally and through a joint venture.ventures. The segment incurs costs and expenses related to itsland management activities on land held for future development, activities, but currently generates no revenue. The segment producedgenerated losses of $1,401,000$322,000 and $1,252,000$273,000 for the three months ended September 30, 2021 and 2020, and $1,314,000 and $1,225,000 for nine months ended September 30, 20172021 and 2016, respectively. The segment produced losses of $271,000 and $323,000 for the quarters ended September 30, 2017 and 2016,2020, respectively.



Mineral Resources
The mineral resourcesMineral Resources segment receivesrevenues include water sales and oil and mineral royalties in addition to periodic reimbursable costs from lessors.exploration and development companies that extract or mine natural resources from the Company's land. The following table summarizes revenues, expenses and operating results from this segment also, as opportunities arise periodically, may generate revenues through water transactions. The revenue components offor the mineral resources segment were as follows:periods ended:
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 Three Months Ended September 30, Nine Months Ended September 30,
($ in thousands)2017 2016 2017 2016
Oil and gas$356
 $394
 $1,161
 $1,163
Water sales
 
 1,254
 9,601
Rock aggregate262
 306
 690
 813
Cement398
 367
 1,195
 996
Land lease for oil exploration51
 25
 76
 151
Reimbursable costs75
 33
 286
 328
Total mineral resources revenues1,142
 1,125
 4,662
 13,052
Net operating income from mineral resources$614
 $458
 $2,281
 $5,892
Three Months Ended September 30,Nine Months Ended September 30,
($ in thousands)2021202020212020
Mineral resources revenues$4,774 $1,322 $19,354 $9,276 
Mineral resources expenses3,025 648 12,325 5,240 
Operating results from mineral resources$1,749 $674 $7,029 $4,036 
Farming
The farmingFarming segment produces revenues frominclude the sale of almonds, pistachios, wine grapes, and hay. The revenue components offollowing table summarizes revenues, expenses and operating results from this segment for the farming segment were as follows:periods ended:
Three Months Ended September 30,Nine Months Ended September 30,
($ in thousands)2021202020212020
Farming revenues$6,726 $8,537 $7,612 $9,698 
Farming expenses7,296 8,108 9,977 10,909 
Operating results from farming$(570)$429 $(2,365)$(1,211)
 Three Months Ended September 30, Nine Months Ended September 30,
($ in thousands)2017 2016 2017 2016
Almonds$1,778
 $1,310
 $2,568
 $2,654
Pistachios3,104
 5,745
 3,672
 6,003
Wine grapes2,161
 1,961
 2,161
 1,961
Hay and other423
 303
 997
 424
Total farming revenues7,466
 9,319
 9,398
 11,042
Net operating income (loss) from farming$(455) $1,538
 $(1,104) $405


Ranch operationsOperations
The Ranch Operations segment consists of game management ranch and property maintenance,revenues and ancillary land uses such as grazing leases and on-location filming. Within game management, we offer a wide variety of guided big game hunts including trophy Rocky Mountain elk, deer, turkeyThe following table summarizes revenues, expenses and wild pig. The revenue components ofoperating results from this segment for the ranch operations segment were as follows:periods ended:

Three Months Ended September 30,Nine Months Ended September 30,
($ in thousands)2021202020212020
Ranch operations revenues$996 $944 $2,868 $2,483 
Ranch operations expenses1,182 1,164 3,511 3,748 
Operating results from ranch operations$(186)$(220)$(643)$(1,265)
 Three Months Ended September 30, Nine Months Ended September 30,
($ in thousands)2017 2016 2017 2016
Game management$277
 $258
 $918
 $1,110
Grazing474
 (8) 1,292
 765
Filming and other117
 164
 599
 378
Total ranch operations revenues868
 414
 2,809
 2,253
Net operating loss from ranch operations$(285) $(960) $(1,298) $(2,010)


15.    INVESTMENT IN UNCONSOLIDATED AND CONSOLIDATED JOINT VENTURES
The Company maintains investments in joint ventures. The Company accounts for its investments in unconsolidated joint ventures using the equity method of accounting unless the venture is a variable interest entity, or VIE, and meets the requirements for consolidation. The Company’s investment in its unconsolidated joint ventures atas of September 30, 20172021 was $28,911,000. The equity$42,517,000. Equity in the income of theearnings from unconsolidated joint ventures was $3,512,000$2,816,000 for the nine months ended September 30, 2017.2021. The unconsolidated joint ventures have not been consolidated as of September 30, 2017,2021, because the Company does not control the investments. The Company’s current joint ventures are as follows:
Petro Travel Plaza Holdings LLC – TA/Petro Travel Plaza Holdings LLC, or Petro, is an unconsolidated joint venture with TravelCenters of America LLC for the developmentthat develops and management ofmanages travel plazas, gas stations, convenience stores, and convenience stores.fast-food restaurants throughout TRCC. The Company has 50% of the voting rights and sharesbut participates in 60% of profitall profits and losses in this joint venture. It houses multiple commercial eating establishments as well as diesel and gasoline operations in TRCC.losses. The Company does not control the investment due to its having only 50% of the voting rights, and because ourrights. The Company's partner in the joint venture is the managing partner and performs all of the day-to-day operations and has significant decision makingdecision-making authority regardingover key business components such as fuel inventory and pricing at the facility. At September 30, 2017, the Company had an equityfacilities. The Company's investment balance of $15,846,000 in this joint venture.venture was $26,812,000 as of September 30, 2021.
On April 17, 2020, the Company sold to Petro land and a building formerly leased to a tenant operating a fast food restaurant. The Company received cash proceeds of $2,000,000 from Petro, and realized a gain of $1,331,000 under ASC 610-20, “Other Income – Gains and Losses from the Derecognition of Nonfinancial Assets.”
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Majestic Realty Co. – Majestic Realty Co., or Majestic, is a privately-held developer and owner of master planned business parks inthroughout the United States. The Company partnered with Majestic to form twohas formed 4 50/50 joint ventures with Majestic 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.
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 $21,080,000 promissory note guaranteed by both partners. The note matures in September 2020 and currently has an outstanding principal balance of $21,080,000. Since inception, we have received excess distributions resulting in a deficit balance of $54,000. 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 received distributions of $1,952,000 representing excess distributions resulting in a deficit balance of $4,000. 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 currently has borrowings under a $25,000,000 construction loan of which $16,150,000 has been drawn.

ventures. The Company and Majestic guarantee the performance of all outstanding debt.

On March 25, 2021, TRC-MRC 4 LLC was formed to pursue the development, construction, lease-up, and management of a 629,274 square foot industrial building located within TRCC-East. Construction of the building has begun with completion expected in 2022. The construction is being financed by a $47,500,000 construction loan that had an outstanding balance of $1,732,000 as of September 30, 2021. The construction loan is individually and collectively guaranteed by the Company and Majestic. In June 2021, the Company contributed land with a fair value of $8,464,000 to TRC-MRC 4, LLC. The total cost of the land was $2,895,000. The Company recognized profit of $2,785,000 and deferred profit of $2,785,000 after applying the five-step revenue recognition model in accordance with ASC Topic 606 — Revenue From Contracts With Customers and ASC Topic 323, Investments — Equity Method and Joint Ventures.
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 located within TRCC-East. TRC-MRC 3, LLC qualified as a VIE from inception, but the Company is not the primary beneficiary; therefore, it does not consolidate TRC-MRC 3, LLC in its financial statements. The construction of the building was completed in the fourth quarter of 2019, and the joint venture has leased 100% of the rentable space to 2 tenants. In March 2019, the joint venture entered into a promissory note with a financial institution to finance the construction of the building. The note matures on May 1, 2030 and had an outstanding principal balance of $35,525,000 as of September 30, 2021. On April 1, 2019, the Company contributed land with a fair value of $5,854,000 to TRC-MRC 3, LLC in accordance with the limited liability agreement. The Company's investment in this joint venture was $841,000 as of September 30, 2021.
In August 2016, the Company 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, which 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 has an outstanding principal balance of $23,411,000 as of September 30, 2021. Since its inception, the Company has received excess distributions resulting in a deficit balance in its investment of $1,779,000. In accordance with the applicable accounting guidance, the Company reclassified excess distributions to Other Liabilities within the Consolidated Balance Sheets. The Company expects to continue to record equity in earnings as a debit to the investment account and if it were to become positive, the Company would reclassify the liability to an asset. If it becomes obvious that any excess distribution may not be returned (upon joint venture liquidation or otherwise), the Company will immediately recognize the liability as income.
In September 2016, TRC-MRC 1, LLC was formed to develop and operate an approximately 480,480 square foot industrial building at TRCC-East that is 100% leased. Since its inception, the Company has received excess distributions resulting in a deficit balance in its investment of $1,472,000. In accordance with the applicable accounting guidance, the Company reclassified excess distributions to Other Liabilities within the Consolidated Balance Sheets. The Company expects to continue to record equity in earnings as a debit to the investment account and if it were to become positive, the Company will reclassify the liability to an asset. If it becomes obvious that any excess distribution may not be returned (upon joint venture liquidation or otherwise), the Company will immediately recognize the liability as income. The joint venture refinanced its construction loan in December 2018 with a mortgage loan. The original balance of the mortgage loan was $25,030,000, of which $23,549,000 was outstanding as of September 30, 2021.
Rockefeller Joint Ventures – The Company has three2 active joint ventures with Rockefeller Group Development Corporation, or Rockefeller. At September 30, 2017,2021, the Company’s combined equity investment balance in these three2 joint ventures was $13,065,000.$10,196,000.
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. 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 April 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 $9,847,000 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, as such we considered the presumption that a managing member controls the limited liability company. 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 September 30, 2017, had an outstanding balance of $49,235,000. The Company and Rockefeller guarantee the performance of the debt.
18-19 West LLC was formed in August 2009 through the contribution of 61.5 acres of land by the Company that is being held for future development. The Company owns a 50% interest in this joint venture, and the joint venture is being accounted for under the equity method due to both members having significant participating rights in the management of the venture.
The 18-19 West LLC joint venture has a purchase option in place with a third-party to purchase lots 18 and 19 at a price of $15,213,000 that expires in the fourth quarter of 2021.
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TRCC/Rock Outlet Center LLC was formed during 2013 to develop, own, and manage a net leasable 326,000 square foot outlet center on land at TRCC-East. The Company controls 50% of the voting interests of TRCC/Rock Outlet Center LLC; thus, it does not control the joint venture 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, including the setting and monitoring of the budget, leasing, marketing, financing, and selection of the contractor for any 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. As a result, the investment in TRCC/Rock Outlet Center LLC is being accounted for under the equity method. On September 7, 2021, the TRCC/Rock Outlet Center LLC joint venture successfully extended the maturity date of its term note with a financial institution from September 5, 2021 to May 31, 2024. In connection with the loan extension, the joint venture also reduced the outstanding amount by $4,600,000. As of September 30, 2021, the outstanding balance of the term note was $29,046,000. 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 that was organized to pursue the entitlement and development of land that the Company owns in Los Angeles County. Based on the Second Amended and Restated Limited Liability Company Agreement of Centennial Founders, LLCCFL 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 beenis consolidated into ourthe Company's financial statements beginning in that quarter. Our partnersstatements. In 2016 and 2018, Lewis Investment Company and CalAtlantic left the joint venture. The Company’s remaining partner, TRI Pointe Homes, retained a noncontrolling interest in the joint venture. On November 30, 2016, CFL and Lewis entered a Redemption and Withdrawal Agreement (the Agreement), whereby Lewis irrevocably and unconditionally withdrew as a memberAs of CFL, CFL redeemed Lewis' entire interest for no consideration. At September 30, 2017,2021, the Company owned 87.71%92.97% of CFL.


The Company’s investment balance in its unconsolidated joint ventures differs from its respective capital accounts in the respective joint ventures. The differentialdifference represents the difference between the cost basis of assets contributed by the Company and the agreed upon contributionfair value of the assets contributed.
Unaudited condensed statement of operations for the three and nine months ended September 30, 2021 and condensed balance sheet information of the Company’s unconsolidated joint ventures as of September 30, 2021 and December 31, 2020 are as follow:follows:
Three Months Ended September 30,
202120202021202020212020
Joint VentureTRC
($ in thousands)RevenuesEarnings (Loss)Equity in Earnings (Loss)
Petro Travel Plaza Holdings, LLC$39,266 $23,087 $2,976 $2,311 $1,785 $1,387 
Five West Parcel, LLC— — — (5)— (3)
18-19 West, LLC(31)(37)(15)(18)
TRCC/Rock Outlet Center, LLC1
1,464 1,042 (764)(1,667)(383)(834)
TRC-MRC 1, LLC796 759 36 12 19 
TRC-MRC 2, LLC1,005 1,033 305 344 152 172 
TRC-MRC 3, LLC771 1,675 (96)766 (47)383 
TRC-MRC 4, LLC— — (1)— (1)— 
Total$43,304 $27,597 $2,425 $1,724 $1,510 $1,093 
Centennial Founders, LLC$126 $53 $(80)$(188)Consolidated
(1) Revenues for TRCC/Rock Outlet Center are presented net of non-cash tenant allowance amortization of $0.3 million and $0.4 million as of the three months ended September 30, 2021 and September 30, 2020, respectively.
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Three Months Ended September 30,Nine Months Ended September 30,
2017 2016 2017 2016 2017 2016202120202021202020212020
Joint Venture TRCJoint VentureTRC
($ in thousands)Revenues Earnings(Loss) Equity in Earnings(Loss)($ in thousands)RevenuesEarnings (Loss)Equity in Earnings (Loss)
Petro Travel Plaza Holdings, LLC$31,983
 $28,225
 $3,267
 $3,938
 $1,960
 $2,363
Petro Travel Plaza Holdings, LLC$97,583 $63,001 $5,756 $7,280 $3,453 $4,368 
Five West Parcel, LLC703
 701
 222
 234
 111
 117
Five West Parcel, LLC— — — 13 — 
18-19 West, LLC3
 3
 (25) (32) (12) (17)18-19 West, LLC256 150 (101)75 (50)
TRCC/Rock Outlet Center, LLC1
2,012
 2,275
 (61) (58) (30) (29)
TRCC/Rock Outlet Center, LLC1
4,140 3,834 (2,183)(3,507)(1,092)(1,754)
TRC-MRC 1, LLC
 
 
 
 
 
TRC-MRC 1, LLC2,438 2,332 133 81 67 41 
TRC-MRC 2, LLC2
935
 228
 (609) (163) (305) (81)
$35,636
 $31,432
 $2,794
 $3,919
 $1,724
 $2,353
TRC-MRC 2, LLCTRC-MRC 2, LLC3,024 3,056 950 1,014 475 507 
TRC-MRC 3, LLCTRC-MRC 3, LLC2,715 3,031 (323)1,022 (161)511 
TRC-MRC 4, LLCTRC-MRC 4, LLC— — (1)— (1)— 
TotalTotal$110,156 $75,259 $4,482 $5,802 $2,816 $3,629 
           
Centennial Founders, LLC$179
 $36
 $9
 $(57) ConsolidatedCentennial Founders, LLC$377 $285 $$(121)Consolidated
           
(1) Revenues for TRCC/Rock Outlet Center are presented net of non-cash tenant allowance amortization of $0.4 million and $0.5 million as of the quarters ended September 30, 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 $1.0 million and $0.3 million as of the quarters ended September 30, 2017 and 2016, respectively. A majority of these non-cash costs are expected to be amortized by the end of FY2017.
(1) Revenues for TRCC/Rock Outlet Center are presented net of non-cash tenant allowance amortization of $0.9 million and $1.0 million as of September 30, 2021 and September 30, 2020, respectively.(1) Revenues for TRCC/Rock Outlet Center are presented net of non-cash tenant allowance amortization of $0.9 million and $1.0 million as of September 30, 2021 and September 30, 2020, respectively.

September 30, 2021December 31, 2020
Joint VentureTRCJoint VentureTRC
($ in thousands)AssetsDebtEquityEquityAssetsDebtEquityEquity
Petro Travel Plaza Holdings, LLC$84,920 $(14,272)$65,353 $26,812 $77,516 $(15,291)$59,597 $23,358 
18-19 West, LLC4,898 — 4,633 1,747 4,733 — 4,483 1,672 
TRCC/Rock Outlet Center, LLC63,133 (29,046)33,025 8,449 65,475 (34,845)29,608 6,741 
TRC-MRC 1, LLC25,589 (23,549)1,527 — 26,502 (23,985)2,059 — 
TRC-MRC 2, LLC20,350 (23,411)(6,289)— 20,191 (23,869)(7,741)— 
TRC-MRC 3, LLC37,821 (35,525)978 841 38,502 (35,785)2,001 1,753 
TRC-MRC 4, LLC11,059 (1,732)9,319 4,668 — — — — 
Total$247,770 $(127,535)$108,546 $42,517 $232,919 $(133,775)$90,007 $33,524 
Centennial Founders, LLC$100,183 $— $99,800 ***$98,898 $— $98,565 ***
*** Centennial Founders, LLC is consolidated within the Company's financial statements.

 Nine Months Ended September 30,
 2017 2016 2017 2016 2017 2016
 Joint Venture TRC
($ in thousands)Revenues Earnings(Loss) Equity in Earnings(Loss)
Petro Travel Plaza Holdings, LLC$89,215
 $76,277
 $7,790
 $9,067
 $4,674
 $5,440
Five West Parcel, LLC2,121
 2,185
 722
 783
 361
 392
18-19 West, LLC8
 7
 (79) (104) (39) (53)
TRCC/Rock Outlet Center, LLC1
7,287
 7,030
 (1,152) (95) (576) (48)
TRC-MRC 1, LLC
 
 (2) 
 (1) 
TRC-MRC 2, LLC2
2,775
 228
 (1,813) (163) (907) (81)
 $101,406
 $85,727
 $5,466
 $9,488
 $3,512
 $5,650
            
Centennial Founders, LLC$180
 $311
 $(308) $(298) Consolidated
            
(1) Revenues for TRCC/Rock Outlet Center are presented net of non-cash tenant allowance amortization of $1.4 million and $1.4 million as of September 30, 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 $3.0 million and $0.2 million as of September 30, 2017 and 2016, respectively. A majority of these non-cash costs are expected to be amortized by the end of FY2017.

 September 30, 2017 December 31, 2016
 Joint VentureTRC Joint VentureTRC
($ in thousands)AssetsDebtEquityEquity AssetsDebtEquityEquity
Petro Travel Plaza Holdings, LLC$65,177
$(15,278)$47,077
$15,846
 $68,652
$(15,275)$51,287
$18,372
Five West Parcel, LLC15,845
(9,847)5,790
2,710
 16,614
(10,251)6,043
2,837
18-19 West, LLC4,633

4,614
1,733
 4,623

4,621
1,741
TRCC/Rock Outlet Center, LLC83,570
(49,235)33,371
8,622
 86,056
(50,712)34,523
9,198
TRC-MRC 1, LLC22,861
(16,150)4,542

 199

199
224
TRC-MRC 2, LLC21,282
(21,080)(108)
 23,965
(21,080)2,592
1,431
Total$213,368
$(111,590)$95,286
$28,911
 $200,109
$(97,318)$99,265
$33,803
          
Centennial Founders, LLC87,966

86,897
***
 86,099

85,281
***
          
*** Centennial Founders, LLC is consolidated within the Company's financial statements
16.    RELATED PARTY TRANSACTIONS
TCWD is a not-for-profit governmental entity, organized on December 28, 1965, pursuant to Division 13 of the Water Code, State of California. TCWD is a landowner voting district, which requires an elector, or voter, to be an owner of land located within the district. TCWD was organized to provide the water needs for future municipal and industrial development. The Company is the largest landowner and taxpayer within TCWD. The Company has a water service contractcontracts with TCWD that entitles usWRMWSD for SWP water deliveries to receive allits agricultural and municipal/industrial operations in the San Joaquin Valley. The terms of TCWD’s State Water Project entitlement and all of TCWD’s banked water. TCWDthese contracts extend to 2035. Under the contracts, the Company is also entitled to make assessmentsannual water for 5,496 acres of all taxpayers within the district,land, or 15,547 acre-feet of water, subject to the extent funds are required to cover expensesSWP allocations. The Company's Executive Vice President and to charge water users within the district for the useChief Operating Officer is one of water. From time to time, we transact with TCWD in the ordinary course9 directors at WRMWSD. As of business.


17.    SUBSEQUENT EVENTS
On October 4, 2017,September 30, 2021, the Company commenced a right offering to common shareholders whereby proceeds will be used to provide additional working capitalpaid $6,201,000 for general corporate purposes, including to fund general infrastructure coststhese water contracts and the development of buildings at TRCC, to continue forward with entitlement and permitting programs for the Centennial and Grapevine communities and costs related to the preparation of the development of MV. The rights offering concluded on October 27, 2017, with the Company raising $90,000,000 from the sale of 5,000,000 shares at $18.00 per share. For additional detail please refer to Form 8-K filed on October 30, 2017.costs.
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ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
Forward-Looking Statements
This Quarterly Report on Form 10-Q contains forward-looking statements, including without limitation statements regarding strategic alliances, the almond, pistachio and grape industries, the future plantings of permanent crops, future yields, prices and water availability for ourthe Company's crops and real estate operations, future prices, production and demand for oil and other minerals, future development of ourthe Company's property, future revenue and income of ourits jointly-owned travel plaza and other joint venture operations, potential losses to theTejon Ranch Co. and its subsidiaries (the Company, Tejon, we, us, and our) as a result of pending environmental proceedings, the adequacy of future cash flows to fund our operations, and of current assets and contracts to meet our water and other commitments, market value risks associated with investment and risk management activities and with respect to inventory, accounts receivable and our own outstanding indebtedness, ongoing negotiations, the uncertainties regarding the impact of COVID-19 on the Company, its customers and suppliers, and global economic conditions, and other future events and conditions. In some cases, these statements are identifiable through the use of words such as “anticipate”, “believe”, “estimate”, “expect”, “intend”, “plan”, “project”, “target”, “can”, “could”, “may”, “will”, “should”, “would”, “likely”,“anticipate,” “believe,” “estimate,” “expect,” “intend,” “plan,” “project,” “target,” “can,” “could,” “may,” “will,” “should,” “would,” “likely,” and similar expressions.expressions such as “in the process.” In addition, any statements that refer to projections of our future financial performance, our anticipated growth, and trends in our business and other characterizations of future events or circumstances are forward-looking statements. We caution you not to place undue reliance on these forward-looking statements. These forward-looking statements are not a guarantee of future performances andperformance, are subject to assumptions and involve known and unknown risks, uncertainties and other important factors that could cause the actual results, performance or achievements of the Company, or industry results, to differ materially from any future results, performance, or achievement implied by such forward- lookingforward-looking statements. These risks, uncertainties and important factors include, but are not limited to, the impacts of COVID-19 and the actions taken by governments, businesses, and individuals in response to it, including the development, distribution, efficacy and acceptance of vaccines and related mandates, weather, market and economic forces, availability of financing for land development activities, and competition and success in obtaining various governmental approvals and entitlements for land development activities. No assurance can be given that the actual future results will not differ materially from the forward-looking statements that we make for a number ofseveral reasons, including those described above and in the section entitled “Risk Factors” in this report and our most recent Annual Report on Form 10-K.
OverviewOVERVIEW
We are a diversified real estate development and agribusiness company committed to responsibly using our land and resources to meet the housing, employment, and lifestyle needs of Californians and to create value for our shareholders. In support of these objectives, we have been investing in land planning and entitlement activities for new industrial and master planned communitiesresidential land developments and in infrastructure improvements within our active industrial development. Our prime asset is approximately 270,000 acres of contiguous, largely undeveloped land that, at its most southerly border, is 60 miles north of Los Angeles and, at its most northerly border, is 15 miles east of Bakersfield.
Business Objectives and Strategies
Our primary business objective is to maximize long-term shareholder value through the monetization of our land-based assets. A key element of our strategy is to entitle and then develop large-scale residential

mixed-use master planned communitiesresidential and commercial/industrial real estate development projects to serve the growing populations of Southern and Central California. Our mixed-use master planned residential developments have been approved to collectively include up to 35,278 housing units, and more than 35 million square feet of commercial space. We have obtained entitlements on Mountain Village at Tejon Ranch, or MV, and have submitted the final maps for the first phases, which includes the first two years of development, to Kern County. Over the next few years, it is possible that we will be engaged in continuous litigation defending the entitlements of our master planned developments.
We are currently engaged in construction, commercial sales and leasing at our fully operational commercial/industrial center.center, the Tejon Ranch Commerce Center, or TRCC. All of these efforts are supported by diverse revenue streams generated from other operations, including commercial/industrial real estate development, farming, mineral resources, ranch operations, and our various joint ventures.
Our Business
We currently operate in five reporting segments: commercial/industrial real estate development; resort/residential real estate development; mineral resources, farming,resources; farming; and ranch operations.
Activities within the commercial/industrial real estate development segment include: entitling,include planning and permitting of land for development; construction of infrastructure; construction of pre-leased buildings; construction of buildings to be leased or sold; and the sale of land to third parties for their own development. The commercial/industrial real estate development segment also includes activities related to power plant leases, communications leases and landscape maintenance services. The primaryfees.
30


At the heart of the commercial/industrial real estate development segment is TRCC, a 20 million square foot commercial/industrial development is TRCC.on Interstate 5 just north of the Los Angeles basin. Six million square feet of industrial, commercial and retail space has already been developed, including distribution centers for IKEA, Caterpillar, Famous Footwear, L'Oreal, Camping World, and Dollar General. TRCC includes developments east and westsits on both sides of Interstate 5, giving distributors immediate access to the west coast’s principal north-south goods movement corridor.
On January 5, 2021, the Kern County Board of Supervisors approved two Conditional Use Permits (CUP) which authorized the Company to develop up to a maximum of 495 multi-family residences, in thirteen apartment buildings, as well as approximately 6,500 square feet of community amenity space and 8,000 square feet of community retail on the ground floor of a portion of the residential buildings. The development would be located on an approximately 23-acre site located immediately north of the Outlets at TRCC-EastTejon. The Company continues to devote appropriate resources to advance this new project at TRCC, providing the much-needed housing for the thousands of employees currently working at the various distribution centers, retailers, and TRCC-West, respectively.fast-food restaurants at TRCC.
We are also involved in multiple joint ventures within TRCC with several partners. Ourpartners that help us expand our commercial/industrial business activities:
A joint venture with TravelCenters of America, or TA/Petro that owns and operates two travel and truck stop facilities, and also operatescomprised of five separate gas stations with convenience stores and fast-food restaurants within TRCC-West and TRCC-East. We are involved in three
Two joint ventures with Rockefeller Development Group: Five West Parcel LLC, which owns a 606,000 square foot building in TRCC-West that is fully leased; Group, or Rockefeller:
18-19 West LLC which owns 61.563.5 acres of land for future development within TRCC-West;TRCC-West. In 2019, our 18-19 West LLC joint venture entered into a land purchase option with the same third-party who purchased the Five West building and land, to purchase lots 18 and 19 at a price of $13,800,000 through the option period ended May 25, 2021. The option was extended at expiration for an additional six months to November 25, 2021 at a price of $15,213,000; and
TRCC/Rock Outlet Center LLC which operates the Outlets at Tejon, a net leasable 326,000 square foot shopping experience with 70 premiere retailers. Lastly, we have partneredin TRCC-East;
Four joint ventures with Majestic Realty Co., or Majestic, to develop, manage, and operate industrial buildings within TRCC. TRCC:
TRC-MRC 1, LLC was formed to develop and operate an approximatelyoperates a 480,480 square foot industrial building in TRCC-East, which was completed during the third quarter of 2017;2017 and is fully leased;
TRC-MRC 2, LLC which owns and operates a 651,909 square foot building in TRCC-West that is fully leased.leased;
TRC-MRC 3, LLC operates a 579,040 square foot industrial building in TRCC-East that is fully leased; and
TRC-MRC 4, LLC was formed in 2021 to pursue the development, construction, leasing and management of a 629,274 square foot industrial building in TRCC-East. Grading on the site has been substantially completed and construction of the building has begun. The joint ventures help usbuilding is expected to expand our commercial/industrial business activities within TRCC.be completed in 2022.
The resort/residential real estate development segment is actively involved in the land entitlement and development process internally and through wholly-owned subsidiaries and a joint venture. Our active developments within resort/residentialthis segment are Mountain Village at Tejon, or MV, Centennial at Tejon Ranch, or Centennial, and Grapevine at Tejon Ranch, or Grapevine.
MV encompasses a total of 26,417 acres, of which 5,082 acres will be used for a mixed usemixed-use development tothat will include housing, retail, and commercial industrial components. MV is entitled for 3,450 homes, 160,000 square feet of commercial development, 750 hotel keys, and more than 21,335 acres of open space. The tentative tract map for the first four phases of residential development has been approved, as well as the commercial site plan for the first phase of commercial development. The Company is currently focusing on the completion of the final map for first phases of MV, consumer and market research studies and fine tuning of development business plans as well as defining the capital funding sources for this development;
The Centennial development is a large master-plannedmixed-use master planned community development encompassing approximately 12,323 acres of our land within Los Angeles County. Upon completion of Centennial, it is estimated that the community will include approximately 19,333 homes and 10.1 million square feet of commercial development. Centennial had entitlements approved in December 2018 and received legislative approvals in April 2019 from the Los Angeles County Board of Supervisors. See Note 12 (Commitments and Contingencies) of the Notes to Unaudited Consolidated Financial Statements for additional information related to current litigation; and
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Grapevine is an approximately 8,010-acre potential development area located on the San Joaquin Valley floor area of our lands, adjacent to TRCC. Upon completion of Grapevine, has received approval forthe community will include 12,000 to 14,000 homes, 5.1 million square feet for commercial development, and more than 3,367 acres of open space and parks. On December 10, 2019, the Kern County Board of Supervisors adopted the supplemental re-circulated environmental impact report, or EIR, prepared in response to a court ruling and re-approved the development of Grapevine unanimously. On January 10, 2020, an action was filed in Kern County Superior Court pursuant to CEQA against Kern County, concerning Kern County’s approval of the December 2019 re-entitlement, including certification of the final EIR. On January 22, 2021 the court ruled in favor of the Company and Kern County on all issues. The court entered a final judgment reflecting its ruling in favor of the Company and the County on March 22, 2021. See Note 12 (Commitments and Contingencies) of the Notes to Unaudited Consolidated Financial Statements for further discussion.
Please refer to our Annual Report on Form 10-K for the year ended December 31, 20162020, for a more detailed description of our active developments within the resort/residential real estate development segment.
Our mineral resources segment generates revenues from oil and gas royalty leases, rock and aggregate mining leases, a lease with National Cement Company of California Inc., and water sales.
The farming segment produces revenues from the sale of wine grapes, almonds, pistachios, and hay.pistachios.

OurLastly, the ranch operations segment consistconsists of game management revenues and ancillary land uses such as grazing leases and filming. Ranch operations is charged with
The COVID-19 Pandemic
Beginning mid-June, the upkeep, maintenance,Company's retail and securityhospitality businesses/tenants within the commercial/industrial real estate development segment fully reopened and operated without any restrictions. TRCC has seen an uptick in traffic as evidenced by a 24% increase in fuel sales volumes at the Petro Travel Plaza joint venture when compared to the same prior year period. The Company's farming and mineral resource segments continue to operate without restrictions as they are and continue to be deemed essential. The Company will continue to prioritize employee health and provide work safety guidelines prescribed by the state of all 270,000 acresCalifornia and the Occupational Safety and Health Administration. The Company has policies in place that are intended to address the applicable COVID-19 safety requirements as prescribed by the state of land. Within game management we operate High Desert Hunt Club, a premier upland bird hunting club, along with various game hunting memberships.California and the Federal Government.
Uncertainty still remains over long-term vaccine efficacy, global vaccine adoption and availability, and the possibility of reinstating pandemic restrictions arising from future mutations such as the Delta variant.
Supply Chain Disruptions
Labor shortages are increasing the cost of labor for the Company’s farming segment, while supply chain disruptions such as shortages of drivers for trucking companies and availability of food grade containers are impacting our ability to deliver goods to customers. For the first nineremainder of 2021, we expect these issues to have a negative impact on our farming activities. On the other hand, these same supply chain constraints have led to higher costs for construction material such as cement and rock and have accordingly increased royalty revenues. The long-term impact of such uncertainties on our business are currently unknown and may vary in scope and severity from the impacts to-date.
Future actions taken by governments, other businesses, and individuals in response to the supply chain disruptions and the pandemic may have an impact our results of operations and overall financial performance. In 2020, we evaluated our operations for expense reductions and cash savings by renegotiating contracts and pricing with a significant portion of our vendors, and rightsizing our labor needs. We will continue to monitor and evaluate our needs for expense reduction throughout 2021.
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Summary of Third Quarter 2021Performance
For the three months of 2017 weended September 30, 2021, the Company had a net loss attributable to common stockholders of $1,898,000 compared to net income attributable to common stockholders of $845,000$219,000 compared to net income of $398,000 for the three months ended September 30, 2020. The decrease in net income for the quarter was primarily attributed to lower farming operating profits of $999,000 resulting from the timing of almond sales and a decrease in pistachio revenues. Our commercial segment saw a $549,000 decline in operating profits as a result of higher marketing costs and lower spark spread revenues from our power plant lease. The aforementioned decreases were offset by an increase in operating profits from mineral resources of $1,075,000, which resulted from additional water sales opportunities that arose after the 5% State Water Project allocation limited water supplies. In addition, equity in earnings from unconsolidated joint ventures improved $417,000 as a result of reopening full service restaurants at Petro.
For the first nine months of 2021, the Company had net income attributable to common stockholders of $1,986,000 compared to a net loss of $617,000 for the first nine months of 2016. Through2020. The improvement is primarily attributed to the first nine monthsJune 2021 land sale to TRC-MRC 4 that improved commercial operating profits by $2,785,000 when compared to the same period of 2017 therelast year. Also contributing to this increase were three primary loss drivers. First, a declineimproved mineral resources operating profits of $2,993,000 as compared to 2020, which was the result of higher water sales in pistachio production and timing of pistachio revenue. Second, an increase in water availability in California2021 due to increased rainfall this past winter reduced opportunities for water transactionsthe 5% SWP allocation. The improved operating results were offset by the non-recurrence of a building sale that occurred in 2020 that resulted in a $1,331,000 gain. In addition, the marketplace. Third, a decline in equity in earningsCompany’s share of operating results from its unconsolidated joint ventures due to non-cash GAAP losses fromdecreased $813,000, a joint venture with Majestic, despite generating positive net operating income,result of significant increases in fuel costs and an increase in operating costs within the TA/for its Petro Travel Plaza Holdings joint venture attributable to the openingventure. Lastly, operating profits from farming decreased $1,154,000 as a result of a new quick serve establishment. During the second quarter of this year we evaluated our staffing needslower pistachio and reduced staffing where necessary. The rightsizing will not have an effect on our continued strategy of moving forward with the implementation of TRCC and the entitlement work for Grapevine and Centennial and tract map approval for Mountain Village. The right sizing is expected to provide annual savings on personnel costs of $2,565,000 throughout 2018.almond revenues.
This Management’s Discussion and Analysis of Financial Condition and Results of Operations provides a narrative discussion of our results of operations. It contains the results of operations for each operatingreporting segment of the business and is followed by a discussion of our financial position. It is useful to read the reporting segment information in conjunction with Note 14 (Reporting Segments and Related Information) of the Notes to Unaudited Consolidated Financial Statements.
Critical Accounting Policies
The preparation of our interim financial statements in accordance with generally accepted accounting principles in the United States, or GAAP, requires us to make estimates and judgments that affect the reported amounts offor assets, liabilities, revenues and expenses, and related disclosure of contingent assets and liabilities. We consider an accounting estimate to be critical ifif: (1) the accounting estimate requires us to make assumptions about matters that were highly uncertain at the time the accounting estimate was made, and (2) changes in the estimates that are likely to occur from period to period, or use of different estimates that we reasonably could have used in the current period, or would have a material impact on our financial condition or results of operations. On an on-goingongoing basis, we evaluate our estimates, including those related to revenue recognition, impairment of long-lived assets, capitalization of costs, profit recognitionallocation of costs related to land sales and leases, stock compensation, our future ability to utilize deferred tax assets, and our defined benefit retirement plan. We base our estimates on historical experience and on various other assumptions that are believed to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates under different assumptions or conditions.
OurDuring the nine months ended September 30, 2021, our critical accounting policies have not changed since the filing of our Annual Report on Form 10-K for the year ended December 31, 2016.2020. Please refer to that filing for a description of our critical accounting policies. Please also refer to Note 1 (Basis of Presentation) in the Notes to Unaudited Consolidated Financial Statements in this report for newly adopted accounting principles.
Results of Operations by Segment
ComparisonWe evaluate the performance of nine months ended September 30, 2017our reporting segments separately to nine months ended September 30, 2016monitor the different factors affecting financial results. Each reporting segment is subject to review and evaluation as we monitor current market conditions, market opportunities, and available resources. The performance of each reporting segment is discussed below:
Total revenues for the first nine months of 2017 were $23,975,000 compared to $32,881,000 for the first nine months of 2016 representing a decrease of $8,906,000, or 27%, the decrease is primarily attributable to a decline in mineral resource revenues of $8,390,000 and farming revenues of $1,644,000.
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Real Estate – Commercial/Industrial:
The decline was offset by improvements within both our commercial and ranch operations division of $1,128,000.
Three Months Ended September 30,Change
($ in thousands)20212020$%
Commercial/industrial revenues
Pastoria Energy Facility$1,222 $1,468 $(246)(17)%
TRCC Leasing398 466 (68)(15)%
TRCC management fees and reimbursements168 153 15 10 %
Commercial leases169 147 22 15 %
Communication leases246 229 17 %
Landscaping and other263 247 16 %
Total commercial/industrial revenues$2,466 $2,710 $(244)(9)%
Total commercial/industrial expenses$2,331 $2,026 $305 15 %
Operating income from commercial/industrial$135 $684 $(549)(80)%

Commercial/industrial real estate development segment revenues were $7,106,000 for the first nine months of 2017, an increase of $572,000, or 9%, compared to the first nine months of 2016. The improvement is attributable to recognizing deferred revenues of $475,000 associated with a land sale occurring during November 2016. The remainder of the increase is attributable to developer fees earned as a result of the construction of an industrial building in our TRC-MRC1, LLC joint venture with Majestic.
Commercial/industrial real estate segment expenses were $4,960,000 during the first nine months of 2017, a decrease of $180,000, or 4%, compared to the same period in 2016. This was primarily driven by reductions in professional services of $110,000.
Resort/residential real estate segment expenses were $1,401,000 during the first nine months of 2017, an increase of $149,000, or 12%. The increase is attributable to a $149,000 increase in personnel costs, as result of our rightsizing initiatives. Severance and other payroll related costs associated with the rightsizing did not qualify for capitalization thus increasing our expenses.
Mineral resources segment revenues were $4,662,000 for the first nine months of 2017, a decrease of $8,390,000, or 64%, compared to the same period 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. This adversely impacted sales opportunities by $8,347,000 when compared to water sales during the same period last year.
Mineral resources segment expenses were $2,381,000 for the first nine months of 2017, a decrease of $4,779,000, or 67%, compared to the same period in 2016. The reduction in costs related to the reduced water sales discussed above is the overwhelming driver of the decrease.
Farming segment revenues were $9,398,000 for the first nine months of 2017, a decrease of $1,644,000, or 15%, compared to the same period in 2016. The $1,644,000 decrease is primarily attributable to the following:
We experienced a $2,331,000 overall decrease in pistachio revenues when compared to the same period in 2016 where we had record pistachio crop yields. When comparing 2017 crop year sales with 2016 crop year sales, revenues declined $4,445,000, as a result of reduced yields driven by 2017 being the alternate down bearing year for pistachios and a warm winter, which 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. The Company anticipates hearing from the insurance company as to the amount during the fourth quarter. Offsetting this decrease was a grower bonus of $1,461,000 associated with our 2016 crop. The Company recorded a receivable for $1,461,000 and expects payment during the fourth quarter. Also offsetting the decrease were sales improvements of 2016 carryover pistachio crops in 2017 of $653,000. Comparatively, we sold 258,000 pounds and 47,000 pounds of carryover pistachios during the nine months ended September 30, 2017 and 2016, respectively.
We had a reduction in almond revenues of $86,000 primarily as a result of fewer carryover crop sales during 2017. Comparatively we sold 297,000 pounds and 420,000 pounds of our carryover almond crop sales as of September 30, 2017 and 2016, respectively. The reduced sales volumes reduced carryover almond crop revenues by $511,000. Offsetting the decrease, were improvements in current year crop sales of $462,000. Comparatively, we sold 574,000 pounds and 404,000 pounds as of September 30, 2017 and 2016, respectively.
We generated $561,000 in revenues associated with a farming lease that was entered into during the fourth quarter of 2016.

We saw improvements in wine grape revenues of $200,000, when compared to the same period in 2016, as a result of 979 additional tons of wine grapes sold resulting from improved yields.
Farming segment expenses were $10,502,000 for the first nine months of 2017, a decrease of $135,000, or 1%, compared to the same period in 2016. During the nine months ended September 30, 2017, we recorded additional pistachio crop costs of $422,000 as a result of selling additional units of carryover pistachio crop discussed above. In addition, as of September 30, 2017, we have sold 99% of our current year crop compared to only 88% during the same period in 2016, resulting in additional current year pistachio costs of $345,000. Offsetting the increase in pistachio cost of sales were a reduction of stock compensation expense of $340,000, improvements in water holding costs, used for our farming operations, with WRMWSD of $160,000, improvements in winegrape cost of sales of $243,000 and improvements in almond cost of sales of $89,000.
Ranch operations revenues were $2,809,000 for the first nine months of 2017, an increase of $556,000, or 25%, compared to the same period in 2016. We experienced an increase in revenues from grazing leases of $528,000. During the first half of 2016, we had less grazing lease revenues as a result of a drought clause being in effect. The drought clause ceased to be in effect at the beginning of 2017.
Ranch operations expenses were $4,107,000 for the first nine months of 2017, a decrease of $156,000, or 4%, compared to the same period in 2016. The drivers of this decrease include reduced repairs and maintenance costs, utilities, and professional services.
Corporate general and administrative costs were $7,716,000, a decrease of $1,546,000, or 17%, compared to the same period in 2016. The Company had a $781,000 decrease in professional services, including legal costs associated with employment and investor related matters. Also during 2017, the Company internalized legal tasks, previously outsourced, associated with our development projects resulting in an increase in qualifying capitalizable payroll costs of $508,000. Lastly, there were savings of $494,000 associated with payroll, bonuses, and overhead attributable to our rightsizing and curtailment of our retirement plans. As we move forward into the last quarter of 2017 and into 2018, we expect to begin to recognize savings from the rightsizing discussed above.
Our share of earnings from our joint ventures was $3,512,000, a decrease of $2,138,000, or 38%, during the first nine months of 2017 when compared to the same period in 2016. The primary drivers include the following:
There was a $766,000decrease in our share of earnings from our TA/Petro joint venture. The decline is driven by increased operating costs 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 $528,000 decrease in our share of earnings from our TRCC/Rock Outlet joint venture. The decrease is 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. Operationally, the outlet 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 a $826,000 loss driven by non-cash GAAP losses, despite generating positive net operating income. Please refer to "Non-GAAP Measures" for further financial discussion on our joint ventures.
Comparison of three months ended September 30, 2017 to three months ended September 30, 2016
Total revenues$2,466,000 for the three months ended September 30, 2017 were $11,908,000 compared to $13,079,0002021, a decrease of $244,000, or 9%, from $2,710,000 for the three months ended September 30, 2016 representing a decrease of $1,171,000, or 9%, the2020. The decrease is primarily attributableattributed to a decline in farminglower spark spread revenues of $1,853,000. The decrease was offset by improvements seen withinfrom our commercialPastoria Energy Facility lease, resulting from lower electricity demand and ranch operations divisions.power generation costs over the comparative periods.
Commercial/industrial real estate development segment revenuesexpenses were $2,432,000$2,331,000 for the three months ended September 30, 2017,2021, an increase of $211,000,$305,000, or 10%15%, compared to the three months ended September 30, 2016. The improvement is attributable to developer fees earned for construction of the new industrial building at TRCC-East, discussed above.
Commercial/industrial real estate segment expenses were $1,315,000 during the three months ended September 30, 2017, a decrease of $432,000, or 25%, compared to the same period in 2016. This decrease is attributed to reductions in repairs and maintenance of $137,000, payroll, overhead and bonus accruals of $101,000, and professional services of $50,000.
Resort/residential real estate segment expenses were $271,000 during the three months ended September 30, 2017, a decrease of $52,000, or 16%. The decrease is attributed to lower staffing costs stemming from the rightsizing.
Mineral resources segment revenues were $1,142,000$2,026,000 for the three months ended September 30, 2017,2020. This increase is primarily attributed to writing off deferred leasing costs and incurring legal costs associated with a non-performing tenant of $162,000. In addition, the Company incurred additional marketing costs of $63,000 to increase market awareness of TRCC.
Nine Months Ended September 30,Change
($ in thousands)20212020$%
Commercial revenues
Pastoria Energy Facility$3,317 $3,464 $(147)(4)%
TRCC Leasing1,330 1,290 40 %
TRCC management fees and reimbursements530 529 — %
Commercial leases466 431 35 %
Communication leases724 699 25 %
Landscaping and other774 731 43 %
Land sale5,679 — 5,679 100 %
Total commercial revenues$12,820 $7,144 $5,676 79 %
Total commercial expenses$8,595 $5,704 $2,891 51 %
Operating income from commercial/industrial$4,225 $1,440 $2,785 193 %

Commercial/industrial real estate development segment revenues were $12,820,000 for the first nine months of 2021, an increase of $17,000,$5,676,000, or 2%79%, compared tofrom $7,144,000 for the same period in 2016.first nine months of 2020. The increase is attributableprimarily attributed to slight increases$5,679,000 in production for our commodities. Please referland sale revenues associated with the June 2021 land contribution to Footnote 14 - Reporting SegmentsTRC-MRC 4 as discussed in Note 15 (Investment in Unconsolidated and Related Information for further details.Consolidated Joint Ventures).
Mineral resourcesCommercial/industrial real estate development segment expenses were $528,000 for the three months ended September 30, 2017, a decrease of $139,000, or 21%, compared to the same period in 2016. The reduction is largely attributable to our rightsizing activities occurring$8,595,000 during the first halfnine months of 2017.
Farming segment revenues were $7,466,000 for the three months ended September 30, 2017, a decrease of $1,853,000, or 20%, compared to the same period in 2016. The $1,853,000 change is primarily attributable to the following:
We had a $2,641,000 decrease in pistachio revenues as a result of the same factors discussed above. With 2016 being a record year, we comparatively sold 643,000 pounds and 2,848,000 pounds of our current year pistachio crop as of the quarters ended September 30, 2017 and 2016, respectively. As it relates to our prior year crop, we sold 259,000 pounds and 47,000 pounds as of the quarters ended September 30, 2017 and 2016, respectively.
Almond revenues improved $468,000 as a result of selling additional units of our current year almond crop. Comparatively, we sold 661,000 pounds and 413,000 pounds as of the quarters ended September 30, 2017 and 2016, respectively.
Wine grape revenues improved $200,000 for the same factors discussed above.
Farming segment expenses were $7,921,000 for the three months ended September 30, 2017,2021, an increase of $140,000,$2,891,000, or 2%51%, comparedfrom $5,704,000 during the first nine months of 2020. This increase is primarily attributed to the same period in 2016. We had increases in pistachioland cost of sales of $556,000 for$2,895,000 resulting from the same reasonsland contribution to TRC-MRC 4 discussed above for the nine months ended September 30, 2017 We also saw offsetting decreases on water holding costs of $341,000.above.


Ranch operations revenues were $868,000 for the three months ended September 30, 2017, an increase of $454,000, or 110%, compared to the same period in 2016. The increase is attributed to the fact that there was not a drought clause in effect on our grazing leases in 2017 when there was in 2016.
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Ranch operations expenses were $1,153,000 for the three months ended September 30, 2017, a decrease of $221,000, or 16%, compared to the same period in 2016. The decrease is primarily attributed to reductions in payroll, overhead, and bonuses of $61,000. All other decreases are attributed to declines in repairs and maintenance and supply costs.

Corporate general and administrative costs were $2,277,000, a decrease of $819,000, or 26%, compared to the same period in 2016. The decrease is attributable to the same drivers discussed above for the nine months ended September 30, 2017.
Our share of earnings from our joint ventures was $1,724,000, a decrease of $629,000, or 27%, during the third quarter of 2017 when compared to the same period in 2016. The primary drivers include the following:
There was a $403,000 decrease in our share of earnings from our TA/Petro joint venture driven by increased operating costs associated with new offerings at TA/Petro and a decline in gas fuel margins.
TRC-MRC 2, a joint venture which was formed during the third quarter of 2016, had a $224,000 loss driven by non-cash GAAP losses, despite generating positive net operating income. Please refer to "Non-GAAP Measures" for further financial discussion on our joint ventures.
General Outlook
For the nine months ended September 30, 2017 we had no leases that expired, nor did we have any material lease renewals. Our commercial activity continues to grow with the opening of Firehouse Subs, a fast casual restaurant. Our TA/Petro joint venture completed construction of an Arby's that opened during the first quarter.
The logistics operators currently located within our Commerce CenterTRCC have demonstrated success in serving all of California and the western region of the United States, and we are building fromthe Company showcases their success in ourits marketing efforts. We willexpect to continue to focus our marketing strategy for TRCC-East and TRCC-West on the significant labor and logistical benefits of our site, the pro-business approach of Kern County, and the demonstrated success of the current tenants and owners within our development. Our strategylocation fits within the logistics model that many companies are using, which favors large, centralized distribution facilities which have been strategically located to maximize the balance of inbound and outbound efficiencies, rather than a number ofmany decentralized smaller distribution centers. The world classworld-class logistics operators located within TRCC have demonstrated success through utilization of this model. With access to markets of over 40 million people for next-day delivery service, they are also demonstrating success with e-commerce fulfillment.
Our Foreign Trade Zone (FTZ) designation allows businesses to secure the many benefits and cost reductions associated with streamlined movement of goods in and out of the zone. This FTZ designation is further supplemented by the Economic Development Incentive Policy, or EDIP, adopted by the Kern County Board of Supervisors. EDIP is aimed to expand and enhance the County's competitiveness by taking affirmative steps to attract new businesses and to encourage the growth and resilience of existing businesses. EDIP provides incentives such as assistance in obtaining tax incentives, building supporting infrastructure, and workforce development. 
We believe that the FTZ and EDIP, along with our ability to provide fully-entitled,fully entitled, shovel-ready land parcels to support buildings of any size, especiallyincluding buildings 1.0one million square feet or larger, can provide us with a potential marketing advantage in the future. We are also expanding ouradvantage. Our marketing efforts to include industrial space users intarget the Inland Empire region of Southern California, the Santa Clarita Valley of northern Los Angeles County, and the northern part of the San Fernando Valley - due to the limited availability of new product and high real estate costs in these locations. Tenantslocations, and the San Joaquin Valley of California. The Company continues to analyze the market and evaluate expansions of industrial buildings for lease either on our own or in these geographic areas are typically userspartnerships, as we have done with the buildings developed within our joint ventures. During the quarter we began construction of relatively smaller facilities. In pursuit of such opportunities, the Company partnered with Majestic Realty Co.a new building in the developmentTRC-MRC 4 joint venture. Construction costs for the new building have increased as a result of a 480,000 square foot, state-of-the-art distribution facility that was completed in the third quarter of 2017.material shortages and delivery times for materials.
A potential disadvantage to our development strategy is our distance from the ports of Los Angeles and Long Beach in comparison to the warehouse/distribution centers located in the Inland Empire, a large

industrial area located east of Los Angeles, which continues its expansion eastward beyond Riverside and San Bernardino, to include Perris, Moreno Valley, and Beaumont. As development in the Inland Empire continues to move east and farther away from the ports, ourthe potential disadvantage of our distance from the ports is being mitigated. Strong demand for large distribution facilities is driving development farther east in a search for large, entitled parcels.
During the quarter ended September 30, 2017,2021, vacancy rates in the Inland Empire approximated 3.7% compared with 4.5% for the quarter ended September 30, 2016; primarily due to continued strong industrial demand that has continued to surpass construction completions.stay at a historical low of 0.8%, leading to an increase in lease rate of 15%, both setting new records. Demand for Inland Empire logistics space continues to be strong, as net absorption reached 5.2 million square feet. As lease rates increase in the Inland Empire, andwe may experience greater pricing advantages due to our lower land basis.
During the quarter ended September 30, 2021, vacancy rates in the northern Los Angeles County, we may beginindustrial market, which includes the San Fernando Valley and Santa Clarita Valley, decreased from 1.2% as of June 30, 2021 to have a greater pricing advantage due to our low land basis.0.8%. Rents remain at an all-time high. Average asking rents increased by 16% over the prior quarter.
We expect that theour commercial/industrial real estate development segment willto continue to incurexperience costs, at current levels, net of amounts capitalized, primarily related to professional service fees, marketing costs, commissions, planning costs, and staffing costs as we continue forwardto pursue development opportunities. These costs are expected to remain consistent with current levels of expense with any variability in future costs tied to specific absorption transactions in any given year.
The actual timing and completion of development is difficult to predict due to the uncertainties of the market. Infrastructure development and marketing activities and costs could continue to increase over several years as we develop our land holdings. We will also continue to evaluate land resources to determine the highest and best uses for our land holdings. Future land sales are dependent on market circumstances and specific opportunities. Our goal in the future is to increase land value and create future revenue growth through planning and development plans.of commercial and industrial properties.
In 2020, in response to the COVID-19 pandemic, California took actions to limit exposure to the virus through restrictions on non-essential businesses and services. Tenants began requesting various forms of rent relief beginning in March 2020 and throughout the rest of 2020. Although the requests ranged in scope, the most common request was for a full or partial rent deferment for three months. The Company agreed to defer rent for certain tenants at TRCC, with the requirement that all the deferred rent be fully repaid during 2021. The following table sets forth information regarding the cumulative minimum deferred rent and collected rent as of September 30, 2021.
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($ in thousands, except for impacted tenants)Impacted TenantsCumulative Deferred Rent due to COVID-19Cumulative Deferred Rent CollectedDeferred Rent to be Collected in the Remainder of 2021
TRCC Leasing$118 $114 $
Other Commercial Leases57 44 13 
8$175 $158 $17 
Real Estate – Resort/Residential:
We are in the preliminary stages of property development for this segment; hence, no revenues or profits are attributed to this segment.
Resort/residential real estate development segment expenses were $322,000 for the three months ended September 30, 2021, an increase of $49,000, or 18%, from $273,000 for the three months ended September 30, 2020. The Company moved its internal marketing group into the resort/residential segment in 2021, driving the increase noted.
Resort/residential real estate development segment expenses were $1,314,000 for the first nine months of 2021, an increase of $89,000, or 7%, from $1,225,000 for the first nine months of 2020. The Company moved its internal marketing group into the resort/residential segment in 2021, driving the increase noted.
Our long-term business plan of developing the communities of MV, Centennial, and Grapevine remains unchanged. As home buyer trends change in California to a more suburban orientation and the economy stabilizes, we believe the perception of land values will continue to improve. Long-term macro fundamentals, primarily California's population growth and household formation will also support housing demand in our region. California also has a significant documented housing shortage, which we believe our communities will help ease as the population base within California continues to grow. Most of the expenditures and capital investment to be incurred within our resort/residential real estate segment will be focusedis expected to continue to focus on obtaining entitlements forthe mixed use master planned communities of Centennial, completing tentative tract maps for MV,Grapevine, and defendingMountain Village.
Centennial – the approved EIR for Grapevine. On May 17, 2017, theCentennial specific plan includes 19,333 residential units and more than 10.1 million square feet of commercial space. The Company distributed a press release announcing the issuance of a Draft Environmental Impact Report, or DEIR, for Centennial. The DEIR was published for public review on May 18, 2017 byis working with the County of Los Angeles.Angeles to address litigation filed in the Los Angeles Superior Court. See Note 12 (Commitments and Contingencies) of the Notes to Unaudited Consolidated Financial Statements for further discussion.
Grapevine – an 8,010-acre development area located on the San Joaquin Valley floor area of our lands, adjacent to TRCC. Upon completion of Grapevine, the community will include 12,000 homes, 5.1 million square feet for commercial development, and more than 3,367 acres of open space and parks. See Note 12 (Commitments and Contingencies) of the Notes to Unaudited Consolidated Financial Statements for further discussion.
MV – a fully entitled project has received approvals of Tentative Tract Map 1 for the first four phases of development and approval of the commercial site plan for the first phase of commercial development. The public review periodtiming of the MV development in the coming years will depend 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 completion of the final map for the first phases of MV, consumer and market research studies, fine tuning of development business plans.
Over the next several years, we expect to explore funding opportunities for the future development of our projects. Such funding opportunities could come from a variety of sources, such as joint ventures with financial partners, debt financing, or the Company’s issuance of additional common stock.
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Mineral Resources:
Three Months Ended September 30,Change
($ in thousands)20212020$%
Mineral resources revenues
Oil and gas$194 $111 $83 75 %
Cement571 703 (132)(19)%
Rock aggregate844 472 372 79 %
Exploration leases30 25 20 %
Water Sales3,124 — 3,124 100 %
Reimbursables and other11 11 — — %
Total mineral resources revenues$4,774 $1,322 $3,452 261 %
Total mineral resources expenses$3,025 $648 $2,377 367 %
Operating income from mineral resources$1,749 $674 $1,075 159 %

Mineral resources segment revenues were $4,774,000 for the three months ended August 16, 2017 and responses to comments are now being completed.
September 30, 2021, an increase of $3,452,000, or 261%, from $1,322,000 for the three months ended September 30, 2020. The increased rainfalldry 2020/2021 winter diminished water availability in California has, for now, lessenedand eventually resulted in a SWP allocation of 5%. As a result, the Company generated $3,124,000 in additional water burden facedsales during the drought. However,quarter ended September 30, 2021, by selling 2,603 acre-feet of water. Additionally, the Company recognized an increase in rock aggregate royalties as a result of increased demand fueled by the continuing growth in infrastructure projects throughout the state.
Mineral resources segment expenses were $3,025,000 for the three months ended September 30, 2021, an increase of $2,377,000, or 367%, from $648,000 for the three months ended September 30, 2020. This increase in expenses is primarily attributed to an increase in water cost of sales resulting from the increased rainfallwater sales volumes as noted above.

Nine Months Ended September 30,Change
($ in thousands)20212020$%
Mineral resources revenues
Oil and gas$561 $543 $18 %
Cement1,665 1,697 (32)(2)%
Rock aggregate1,587 1,042 545 52 %
Exploration leases80 75 %
Water Sales14,986 5,471 9,515 174 %
Reimbursables and other475 448 27 %
Total mineral resources revenues$19,354 $9,276 $10,078 109 %
Total mineral resources expenses$12,325 $5,240 $7,085 135 %
Operating income from mineral resources$7,029 $4,036 $2,993 74 %

Mineral resources segment revenues were $19,354,000 for the first nine months of 2021, an increase of $10,078,000, or 109%, from $9,276,000 for the first nine months of 2020. The 2020/2021 dry winter brought about favorable conditions to sell water, resulting in a significant increase in water sales. Comparatively, the Company sold 13,199 acre-feet and winter storms limited4,625 acre-feet of water as of September 30, 2021 and 2020, respectively. The Company in 2021 has also recognized additional rock aggregate royalties as a result of increased demand fueled by the timecontinuing growth in which beesinfrastructure projects throughout the state.
Mineral resources segment expenses were able$12,325,000 for the first nine months of 2021, an increase of $7,085,000, or 135%, from $5,240,000 when compared to pollinate our 2017 almond trees and also damaged a number of our trees. Despite this, our 2017 almond production was in line with 2016 production, but less than our expectations. Our 2017 pistachio yields fell from their 2016 record yields as 2017 is an alternate down bearing year for pistachios. In addition, the 2017 winter was relatively warm, which reduced the number of hours the trees were dormant, a critical stage in the annual cycle of the pistachio tree. Our wine grape yields saw a slight improvement over the same period last year. Duein 2020. This increase in expense is primarily attributed to our exposure tohigher water cost of sales of $7,033,000 resulting from the commodity markets, we are unable to accurately predict revenue and we cannot pass on to our customers any cost increases caused by general inflation and production efforts, except to the extent such inflation is reflectedincrease in market conditions and commodity prices. All of our crops are sensitive to the size of each year’s world crop. Large crops in California and abroad can rapidly depress prices. Thus far in 2017, prices for almonds and pistachios have remained steadywater sales as compared to 2016 but lower than 2014 and 2015 prices.noted above.
As we have noted, 2017 has been a very wet year in California due to winter rain and snow, which has helped to mitigate the drought conditions within the state. The wet 2017 year has provided us with the opportunity to further enhance our water banking operations, for future use by our real estate developments and farming, by having access to more water sources. As anticipated changes comearise in the future related to groundwater management withinin California, such as limitedlimits on groundwater pumping in the over drafted groundwaterwater basins outside of our lands, we believe that our water assets, including water banking operations,
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ground water recharge programs, and access to water contracts aslike those we have purchased in the past, will become even more important and valuable in servicing our projects. The wet year has also limited potential interimprojects and providing opportunities for water sales activity to amounts lowerthird parties. With 2020 and 2021 being drought years, local water market participants had few alternative water sources. Current forecasts indicate that this trend may continue into 2022, which may lead to favorable water sales opportunities.
The price per barrel of oil has increased over 66% from its December 31, 2020 levels. California Resources Corporation, or CRC, has returned 13 wells into production in 2021, with the expectation of returning more wells into production in the near future. We expect to begin to see the impact of these actions in the coming months.
Farming:
Three Months Ended September 30,Change
($ in thousands)20212020$%
Farming revenues
Almonds$780 $1,252 $(472)(38)%
Pistachios4,278 5,521 $(1,243)(23)%
Wine grapes1,442 1,638 $(196)(12)%
Hay126 53 73 138 %
Other100 73 27 37 %
Total farming revenues$6,726 $8,537 $(1,811)(21)%
Total farming expenses$7,296 $8,108 $(812)(10)%
Operating loss from farming$(570)$429 $(999)(233)%
Farming segment revenues were $6,726,000 for the three months ended September 30, 2021, a decrease of $1,811,000, or 21%, from $8,537,000 during the same period in 2020. The decrease is primarily attributed to:
Pistachio revenues for the quarter decreased $1,243,000 primarily due to the decrease in insurance proceeds received in 2021 when compared to 2020. In 2020, we received pistachio insurance proceeds of $3,789,000, but because the 2021 pistachio crop year is a down bearing production year the insurance proceeds were only $466,000, a decrease of $3,323,000. The primary driver leading to higher insurance proceeds in 2020, was the assumption that 2020 production was based on yields typically seen during an on production year, which is much higher than that of the current down bearing production year. With respect to yields, the Company sold 1,615,000 and 456,000 pounds of pistachios for the three months ended September 30, 2021 and 2020, respectively.
Almond revenues decreased $472,000 as a result of sales timing of the Company's almond crops. Comparatively, the Company sold 337,000 and 529,000 pounds of almonds for the quarters ended September 30, 2021 and 2020, respectively. The supply chain disruption is impacting our ability to deliver almond crop sold in 2021, which would affect the timing of sales resulting in a greater portion of the 2021 crops being sold in 2022.
Farming segment expenses were $7,296,000 for the three months ended September 30, 2021, a decrease of $812,000, or 10%, from $8,108,000 during the same period in 2020. The decrease in expenses resulted from almond sales timing mentioned above.

Nine Months Ended September 30,Change
($ in thousands)20212020$%
Farming revenues
Almonds$1,177 $2,113 $(936)(44)%
Pistachios4,292 5,555 (1,263)(23)%
Wine grapes1,458 1,638 (180)(11)%
Hay377 285 92 32 %
Other308 107 201 188 %
Total farming revenues$7,612 $9,698 $(2,086)(22)%
Total farming expenses$9,977 $10,909 $(932)(9)%
Operating loss from farming$(2,365)$(1,211)$(1,154)95 %

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Farming segment revenues were $7,612,000 for the first nine months of 2021, a decrease of $2,086,000, or 22%, from $9,698,000 during the same period in 2020.
Pistachio revenues decreased $1,263,000 primarily due to the decrease in insurance proceeds received in 2021 when compared to 2020. In 2020, we received pistachio insurance proceeds of $3,789,000, but because the 2021 pistachio crop year is a down bearing production year the insurance proceeds were only $466,000 or a decrease of $3,323,000. The primary driver leading to higher insurance proceeds in 2020, was the assumption that 2020 insurance proceeds were based on yields typically seen during an on production year, which is much higher than that of the current down bearing production year. With respect to yields, the Company sold 1,615,000 and 456,000 pounds of pistachios for the nine months ended September 30, 2021 and 2020, respectively.
Almond revenues decreased $936,000 as a result of sales timing for current and prior year almond crops. For current year crop, the Company sold 212,000 and 529,000 pounds as of September 30, 2021 and 2020, respectively. For prior year crop, the Company sold 330,000 and 358,000 pounds as of September 30, 2021 and 2020, respectively.
Farming segment expenses were $9,977,000 for the first nine months of 2021, a decrease of $932,000, or 9%, from $10,909,000 when compared to the same period in 2020. The decrease in expenses resulted from the almond sales timing mentioned above.
Almond, pistachio, and wine grape crop sales are highly seasonal with most of our sales occurring during the third and fourth quarters. Pricing for nut and grape crops are particularly sensitive to the size of each year’s world crop and the demand for those crops. The U.S. almond industry projects 2021 yields to be in the neighborhood of 2.8 billion pounds compared to 3.1 billion pounds during the previous year. Pistachios for the 2021 crop year are expected to be approximately 0.9 billion pounds compared to 1.1 billion pounds during the previous year. Yields for the Company's 2021 almond and wine grape crops have been comparable with prior year's thus far, while pistachio yields have seen a drastic improvement. Tariffs from China and India, which are major customers of almonds and pistachios, can make American products less competitive and push customers to switch to another producing country.
Although extended Federal unemployment benefits have ended, the Company continues to experience challenges with attracting and retaining farm workers. The Company expects this trend to continue over the foreseeable future and will utilize external labor contractors as necessary, which will result in an increase in overall labor costs. The Company is unable to determine the duration of these labor shortages that the Company will likely be experiencing.
Because a majority of the Company's almonds are sold to customers in India and China, it is very likely that there will be sales delays given the current disruption in the global supply chain network. In particular, there is a shortage of truck drivers needed to transport goods to the Los Angeles and Long Beach ports so that goods can be shipped overseas. Additionally, there is a shortage in food grade shipping containers that are necessary to ship almonds overseas. Upcoming holidays will likely exacerbate these issues and it is difficult to predict the extent and duration of current supply chain disruptions.
Lastly, the impact of state ground water management laws on new plantings and continuing crop production remains unknown. Water delivery and water availability continues to be a long-term concern within California. Any limitation of delivery of SWP water and the absence of available alternatives during drought periods could potentially cause permanent damage to orchards and vineyards throughout California. While this could impact us, we believe we have sufficient water resources available to meet our requirements for the next crop year.
Ranch Operations:
Three Months Ended September 30,Change
($ in thousands)20212020$%
Ranch Operations revenues
Game management and other 1
$696 $547 $149 27 %
Grazing300 397 (97)(24)%
Total Ranch Operations revenues$996 $944 $52 %
Total Ranch Operations expenses$1,182 $1,164 $18 %
Operating loss from Ranch Operations$(186)$(220)$34 (15)%
1 Game management and other revenues consist of revenues from hunting, filming, high desert hunt club (a premier upland bird hunting club), and other ancillary activities.

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Ranch operations revenues were $996,000 for the three months ended September 30, 2021, an increase of $52,000, or 6%, from $944,000 for the same period in 2020. The increase in revenues is attributed to an increase in hunting memberships, guided hunts, and events held on the Company's land of $149,000. This was offset by a decline in grazing revenues of $97,000, as a result of a drought clause that limited the number of cattle able to graze on the Company's land.
Ranch operations expenses were $1,182,000 for the three months ended September 30, 2021, an increase of $18,000, or 2%, from $1,164,000 for the same period in 2020. This increase is primarily attributed to an increase in fuel prices when compared to the prior years.year.
Nine Months Ended September 30,Change
($ in thousands)20212020$%
Ranch Operations revenues
Game Management and other 1
$1,790 $1,252 $538 43 %
Grazing1,078 1,231 (153)(12)%
Total Ranch Operations revenues$2,868 $2,483 $385 16 %
Total Ranch Operations expenses$3,511 $3,748 $(237)(6)%
Operating loss from Ranch Operations$(643)$(1,265)$622 (49)%
1 Game management and other revenues consist of revenues from hunting, filming, high desert hunt club (a premier upland bird hunting club), and other ancillary activities.

Ranch operations revenues were $2,868,000 for the first nine months of 2021, an increase of $385,000, or 16%, from $2,483,000 for the same period in 2020. The increase in revenues is attributed to an increase in hunting memberships, guided hunts, filming location fees, and events held on the Company's land of $538,000. This was offset by a decline in grazing revenues of $153,000, as a result of a drought clause that limited the number of cattle able to graze on the Company's land.
Ranch operations expenses were $3,511,000 for the first nine months of 2021, a decrease of $237,000, or 6%, from $3,748,000 for the same period in 2020. This decline is primarily attributed to declines in payroll due to reduced staffing levels as compared to the prior year.
Corporate and Other:
Corporate general and administrative costs were $2,021,000 for the three months ended September 30, 2021, a decrease of $100,000, or 5%, from $2,121,000 for the same period in 2020. The decrease is primarily attributed to reduced payroll and stock compensation, net of capitalization, of $70,000, which resulted from the 2020 right sizing initiative.
Corporate general and administrative costs were $6,676,000 for the first nine months of 2021, a decrease of $472,000, or 7%, from $7,148,000 for the same period in 2020. The decrease is primarily attributed to reduced payroll and stock compensation, net of capitalization, of $662,000, which resulted from the 2020 right sizing initiative and the absence of an in-house counsel during the first quarter. This decrease was partially offset by a $223,000 increase in insurance expense.
On April 17, 2020, the Company sold the building and land that was previously operated by a fast food tenant to its joint venture, Petro Travel Plaza, LLC. The Company received a cash distribution of $2,000,000 from the joint venture, and realized a Gain on Sale of Real Estate of $1,331,000. There were no such transactions in 2021.
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Joint Ventures:
Three Months Ended September 30,Change
($ in thousands)20212020$%
Equity in earnings (loss)
Petro Travel Plaza Holdings, LLC$1,785 $1,387 $398 29 %
Five West Parcel, LLC— (3)(100)%
18-19 West, LLC(15)(18)(17)%
TRCC/Rock Outlet Center, LLC(383)(834)451 (54)%
TRC-MRC 1, LLC19 13 217 %
TRC-MRC 2, LLC152 172 (20)(12)%
TRC-MRC 3, LLC(47)383 (430)(112)%
TRC-MRC 4, LLC(1)— (1)100 %
Total equity in earnings$1,510 $1,093 $417 38 %

Equity in earnings were $1,510,000 for the three months ended September 30, 2021, an increase of $417,000 or 38%, from $1,093,000 during the same period in 2020. The changes are primarily attributed to the following:
The Petro Travel Plaza improved its operating results because it was able to reopen its full service restaurants during the second and third quarters of 2021. These restaurants were closed during most of 2020 in response to California's Blueprint for a Safer Economy, which imposed a variety of restrictions on in-person activities. Additionally, the joint venture saw an increase in traffic as evidenced by a 22% increase in fuel sales volumes over the comparative period.
The TRCC/Rock Outlet Center improved its operating results as a result of not having to issue COVID-19 related lease concessions in 2021. Additionally, there were fewer tenant departures over the comparative periods.
Over the comparative periods, TRC-MRC 3 had unfavorable operating results as a result of an increase in depreciation and amortization resulting from placing the building fully into service starting in June of 2020.
Nine Months Ended September 30,Change
($ in thousands)20212020$%
Equity in earnings (loss)
Petro Travel Plaza Holdings, LLC$3,453 $4,368 $(915)(21)%
Five West Parcel, LLC— (6)(100)%
18-19 West, LLC75 (50)125 (250)%
TRCC/Rock Outlet Center, LLC(1,092)(1,754)662 (38)%
TRC-MRC 1, LLC67 41 26 63 %
TRC-MRC 2, LLC475 507 (32)(6)%
TRC-MRC 3, LLC(161)511 (672)(132)%
TRC-MRC 4, LLC(1)— (1)100 %
Total equity in earnings$2,816 $3,629 $(813)(22)%

Equity in earnings were $2,816,000 for the nine months ended September 30, 2021, a decrease of $813,000, or 22%, from $3,629,000 during the same period in 2020. The changes are primarily attributed to the following:
The Petro Travel Plaza improved its fuel sales volume by 24% in 2021 when compared to 2020. However, the Company's share of operating results declined by $915,000 as a result of a 91% increase in the overall cost of fuel that was only partially mitigated by a 64% increase in fuel sales prices. Increasing fuel costs may impact sales volumes over the upcoming holiday season.
The 18-19 West joint venture improved its operating results after generating land purchase option revenues from a prospective third-party buyer.
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The factors driving changes in TRCC/Rock Outlet Center and TRC-MRC 3 for the nine months ended September 30, 2021 are the same as those discussed within the Company's quarterly operating results.
In conjunction with providing relief to certain tenants, the TRCC/Rock Outlet Center agreed to defer rent for certain tenants due to the closure of the outlet center from March 20, 2020 through May 27, 2020. The following table sets forth information regarding the minimum rents billed and deferred to-date at the TRCC/Rock Outlet Center property level as of September 30, 2021. We continue to assess the probability of collecting outstanding receivables related to the two tenants that are currently in on-going negotiations. Management will continue to monitor each negotiation diligently, and when determined collectability is not probable, will reserve accordingly. As of the nine-months ended September 30, 2021, average sales per vehicle were greater than pre-pandemic levels.
($ in thousands, except number of tenants)
Tenants1
Cumulative Deferred Rent due to COVID-19Cumulative Deferred Rent CollectedDeferred Rent to be Collected in the Remainder of 2021
Rent Deferral Agreements$217 $190 $27 
Rent Abatement Agreements18 583 
N/A2
N/A2
26 $800 $190 $27 
1 Excludes percentage rent tenants.
2 There are no subsequent collections to be made under a rent abatement scenario.

Please refer to "Non-GAAP Financial Measures" for further financial discussion of the results of our joint ventures.
General Outlook
The operations of the Company are seasonal and future results of operations cannot reliably be predicted based on quarterly results. Historically, the Company's largest percentages of farming revenues are recognized during the third and fourth quarters of the fiscal year. Real estate activity and leasing activities are dependent on market circumstances and specific opportunities and therefore are difficult to predict from period to period.

The COVID-19 pandemic and resulting global economic disruptions have impacted our operations and are expected to continue to impact our operations through the remainder of 2021. For a detailed discussion of the pandemic and its expected effects, refer to the section above titled "The COVID-19 Pandemic" and "Results of Operations by Segment."
For further discussion of the risks and uncertainties that could potentially adversely affect us, please refer to Part I, Item 7 – “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in the Company’s Annual Report on Form 10-K for the year ended December 31, 2016,2020, or Annual Report, and to Part I, Item 1A - "Risk Factors" of our Annual Report. We continue to be involved in various legal proceedings related to leased acreage. For a further discussion, please refer to Note 12 (Commitments and Contingencies) of the Notes to Unaudited Consolidated Financial Statements in this report.
Income Taxes
For the nine months ended September 30, 2017,2021, the Company had a net income tax benefit of $1,268,000  compared to a net income tax expense of $503,000$1,237,000 compared to $1,111,000 for the nine months ended 2016. These representSeptember 30, 2020. The effective tax rates of approximately 40%approximated 38% and 39%229% for the nine months ended 2017September 30, 2021 and 2016,2020, respectively. As of September 30, 2017,2021, income tax receivables were $1,781,000.$674,000. The Company classifies interest and penalties incurred on tax payments as income tax expenses. The Company's effective tax rates were higher than statutory rates primarily because permanent differences related to Section 162(m) limitations and discrete tax expense associated with stock compensation. The Section 162(m) compensation deduction limitations occurred due to changes in tax law arising from the 2017 Tax Cuts Jobs Act. The discrete item was triggered when stock grants were issued to participants at a price less than the original grant price, causing a deferred tax shortfall. The shortfall recognized during the quarter represents the reversal of excess deferred tax assets recognized in prior periods. The recognition of the shortfall is not anticipated to have a material impact on the Company's current income tax payable.
Cash Flow and Liquidity
We manage our cash and marketable securities along with cash flow to allowOur financial position allows us to pursue our strategies of land entitlement, development, farming, and conservation. Accordingly, we have established well-defined priorities for our available cash, including investing in core reportingoperating segments to achieve profitable future growth,growth. We have historically funded our operations with cash flows from operating activities, investment proceeds, and joint ventures. short-term borrowings from our bank credit facilities. In the past, we have also issued common stock and used the proceeds for capital investment activities.
To enhance shareholder value over the long-term, we willexpect to continue to make investments in our real estate segments to secure land entitlement approvals, build infrastructure for our developments, provide adequate water supplies, and acquire water rights to ensure adequate future water supply.provide
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funds for general land development activities. Within our farming segment, we willintend to make investments as needed to improve efficiency and add capacity to its operations when it is profitable to do so. We have historically funded our operations with cash flows from operating activities, investment proceeds, short-term borrowings from our bank credit facilities, and long-term debt tied to revenue producing assets. As we move forward with our strategic plans we will need to raise additional capital through the issuance of common stock, project specific debt, and through capital partners. On October 27, 2017, the Company completed a Rights Offering raising $90,000,000 in new capital. Please see Part II, Item 5 - "Other Information" for more detail.
Our cash, cash equivalents and marketable securities totaled $24,152,000 at$45,451,000 as of September 30, 2017,2021, a decrease of $3,781,000, or 14%,$12,239,000 from the corresponding amount at the end$57,690,000 as of 2016. The decrease in our cash position is attributable to a reduction in marketable securities, continued investment in development projects and water assets offset by drawdowns on our line of credit of $13,300,000.December 31, 2020.
The following table shows our cash flow activities for the nine months ended September 30,
(in thousands)2017 2016(in thousands)20212020
Operating activities$7,902
 $1,413
Operating activities$(1,916)$7,588 
Investing activities$(12,361) $(10,414)Investing activities$(10,775)$6,812 
Financing activities$5,859
 $10,496
Financing activities$(4,166)$(5,351)

Operating Activities
During the first nine months of 2017, our2021, the Company's operations generated $7,902,000used $1,916,000 primarily to fund crop cultural costs. The decline in cash largely dueflows over the comparative period is primarily attributed to operating distributionsthe timing of $7,200,000 from our TA/Petro joint venture.venture distributions.
During the first nine months of 2016, our2020, the Company's operations provided $1,413,000$7,588,000. The primary driver was distributions of cash primarily$6,269,000 from our unconsolidated joint ventures. Additionally, we collected on a portion of our outstanding receivables related to distributions from our joint ventures of $4,500,000 offset by payments on current liabilities and farm crop inventory costs.

farming.
Investing Activities
During the first nine months of 2017,2021, investing activities used $12,361,000 of cash as a result of $15,579,000 in$10,775,000. The Company made capital expenditures. Capital expenditures, inclusive of capitalized interest and payroll include(exclusive of stock compensation), of $15,240,000, which includes predevelopment activities for our master planned communities which amountedcommunities; $3,168,000 consisting of planning and permitting primarily related to $4,040,000the preparation of final maps for MV, $3,056,000Phase 1 of MV; expenditures relating to litigation of $817,000 for Grapevine, and $2,594,000costs related to litigation defense for Centennial.Centennial of $2,033,000. At TRCC, East, we spent $3,053,000 for$2,559,000 on infrastructure projects.improvements, qualifying costs related to land development and the residential community at TRCC-East. Within our farming segment, we spent $1,830,000$6,184,000 developing new almond orchards and grape vineyards, which includes cultural costs for 2021 for orchards not currently in production and replacing old machinery and equipment along with developing a new almond orchard. We spent $352,000 within our mineral resources group for new wellsequipment. Lastly, the Company used $2,415,000 to acquire water assets, contributed $2,900,000 into unconsolidated joint ventures, and water turnouts. Additionally, we used $4,567,000 for our purchase of water under the Nickel water contract along with water recharge costs. Our capitalinvested $10,355,000 into marketable securities. The cash outlays previously mentioned were offset by water sales proceeds of $8,997,000, joint venture distributions from unconsolidated joint ventures of $3,018,000$5,690,000 primarily attributed to the sale of land to TRC-MRC 4, and proceeds from maturity ofmatured marketable securities of $5,274,000. $5,250,000.
During the first nine months of 2020, investing activities provided $6,812,000. The Company made capital expenditures, inclusive of capitalized interest and payroll (exclusive of stock compensation), of $15,407,000, which includes predevelopment
activities for our master planned communities; $3,117,000 consisting of planning and permitting primarily related to the preparation of final maps for Phase 1 of MV; expenditures relating to litigation of $1,560,000 for Grapevine, and costs related to litigation defense for Centennial of $2,424,000. At TRCC, we spent $4,441,000 on water treatment infrastructure improvements and general planning. Within our farming segment, we spent $3,741,000 developing new almond orchards, which includes cultural costs for 2020 for orchards not currently in production, and replacing machinery and equipment. Also within investing activities, we had investment security maturities of $30,452,000, of which $5,610,000 was reinvested. The Company also sold building and land in April 2020 that was previously operated by a fast food tenant to its joint venture, Petro Travel Plaza, LLC for $2,000,000. Lastly, the Company used $2,633,000 to acquire long-term water assets.
As we move forward, we anticipate we will continue to use cash from operations, proceeds from the maturity of securities, and anticipated distributions from joint ventures to fund real estate project investment and payments on our revolving line of credit.
Duringinvestments, including the first nine months of 2016, investing activities used $10,414,000 as a result of $19,760,000 in capital expenditures. Capital expenditures include predevelopment activities for our master planned communities which amounted to $3,914,000 for MV, $3,663,000 for Grapevine, and $3,832,000 for Centennial. At TRCC East, we spent $3,345,000 for infrastructure projects along with completing the multi-tenant building housing Baja Fresh and Habit Burger. Within our farming segment, we spent $1,837,000 replacing old machinery and equipment along with developing a new almond orchard. We spent $1,845,000 within our mineral resources group for new wells and water turnouts. Within ranch operations we acquired $476,000 in new machinery and equipment. Our capital outlays were offset by reimbursements for public infrastructure costs through the East CFD and other reimbursements of $4,650,000. Additionally, we received $4,966,000 in net proceeds from marketable securities transactions.investments summarized below.
Our estimated capital investment, inclusive of capitalized interest and payroll, for the remainder of 2017 will be2021 is primarily related to our real estate projects. Estimated capital investment includesThese estimated investments include approximately $841,000$1,914,000 of infrastructure development at TRCC-East. This new infrastructure isTRCC-East to support continued commercial retail and industrial development within TRCC-East and to expand water facilities to support future demand.anticipated absorption. We expectalso plan to possibly invest $714,000 in permittingapproximately $250,000 to continue the development of new almond orchards and planning activitiesvineyards, and defending the approved EIR for Grapevine, $1,814,000 for final approvalto replace farm equipment. The farm investments are part of tentative tract mapsa long-term farm management program to redevelop declining orchards and design activities relatedvineyards to commercial development for MV,maintain and $1,200,000 related to the specific plan EIR, approval of EIR, and mapping activities for Centennial. We will continue to add to our current water assets and water infrastructure to help secure our ability to supply water to our real estate and farming activities andimprove future farm revenues. Lastly, we expect to invest up to $600,000 in water assets$3,004,000 for land planning, litigation/appeals, mapping, federal and infrastructure.state agency permitting activities, and development activities at MV, Centennial, and Grapevine during the remainder of 2021.
We continuously evaluate our short-termcapitalize interest cost as a cost of the project only during the period for which activities necessary to prepare an asset for its intended use are ongoing, provided expenditures for the asset have been made and long-term capital investment needs. Based oninterest cost has been incurred. Capitalized interest for the timing of capital investments, we may supplement our current cash, marketable securities,nine months ended September 30, 2021 and operational funding sources through2020, was $1,856,000 and $2,059,000, respectively, and is classified
43


within real estate development. We also capitalized payroll costs related to development, pre-construction, and construction projects which aggregated $1,901,000 and $2,742,000 for the sale of common stocknine months ended September 30, 2021 and the use of additional debt.2020, respectively. Expenditures for repairs and maintenance are expensed as incurred.
Financing Activities
During the first nine months of 2017,2021, financing activities provided $5,859,000 in cash primarily through $13,300,000 in drawdowns from our line of credit. As of September 30, 2017, thereused $4,166,000, which was an outstanding balance of $17,000,000 on our revolving line of credit. The use of our line of credit primarily reflects the cyclical nature of cash flow in our farming segment as inventory costs build as we move into the second half of the year and the harvest season begins andattributable to water activity during the first half of the year. The cash inflows were offset by paydowns of short-term debt of $4,000,000, paydowns of long-term debt service of $2,901,000$3,200,000 and tax payments on vested share grants of $540,000.$966,000.
During the first nine months of 2016,2020, financing activities provided $10,496,000 in cash mainly dueused $5,351,000, which was attributable to the timinglong-term debt service of drawdowns$3,767,000 and repaymentstax payments on the Company's linevested share grants of credit. As of September 30, 2016, there

was an outstanding balance of $11,000,000 on our revolving line of credit. The use of our line of credit primarily reflects the cyclical nature of cash flow in our farming segment as inventory costs build as we move into the second half of the year and the harvest season begins.$1,584,000.
It is difficult to accurately predict cash flows due to the nature of our businesses and fluctuating economic conditions. Our earnings and cash flows will be affected from period to period by the commodity nature of our farming and mineral operations, the timing of sales and leases of property within our development projects, and the beginning of development within our residential projects. The timing of sales and leases within our development projects is difficult to predict due to the time necessary to complete the development process and negotiate sales or lease contracts. Often, the timing aspect of land development can lead to particularcertain years or periods having more or lessdifferent earnings than comparable periods. Based on ourthe Company's experience, we believe wethe Company believes it will have adequate operating cash flows, cash balances, and availability on our line of credit (discussed below) over the next twelve months to fund ongoinginternal operations. As we move forward with the completion of our litigation, permitting and engineering design for our master planned communities and prepare to move into the development stage, we will need to secure additional funding through the issuance of equity and secure other forms of financing such as joint ventures and possibly debt financing.
We continuously evaluate our short-term and long-term capital investment needs. Based on the timing of capital investments, we may supplement our current cash, marketable securities, and operational funding sources through the sale of common stock and the incurrence of additional debt.
Capital Structure and Financial Condition
At September 30, 2017,2021, total capitalization at book value was $424,071,000$505,327,000, consisting of $87,967,000$53,878,000 of debt and $336,104,000$451,449,000 of equity, resulting in a long-term debt-to-total-capitalization ratio of approximately 20.7%10.7%.
TheOn October 13, 2014, the Company, hasas borrower, entered into an Amended and Restated Credit Agreement, a Term Note and a Revolving Line of Credit Note, with Wells Fargo, or collectively the Credit Facility. The Credit Facility consists ofadded a $70,000,000 term note,loan, or Term Note, and aLoan, to the then existing $30,000,000 revolving line of credit, or RLC. In August 2019, the Company amended the Term Note (Amended Term Note) and extended its maturity to June 2029 and amended the RLC to expand the capacity from $30,000,000 to $35,000,000 and extend the maturity to October 5, 2024.
The Amended Term Note had a $51,869,000 balance as of September 30, 2021. The interest rate per annum applicable to the Amended Term Loan is LIBOR (as defined in the Amended Term Note) plus a margin of 170 basis points. The interest rate for the term of the Amended Term Note has been fixed through the use of an interest rate swap at a rate of 4.16%. The Amended Term Note requires monthly amortization payments pursuant to a schedule set forth in the Amended Term Note, with the final outstanding principal amount due June 5, 2029. The Amended Credit Facility is secured by the Company's farmland and farm assets, which include equipment, crops and crop receivables; the PEF power plant lease and lease site; and related accounts and other rights to payment and inventory.
The RLC had no outstanding balance as of September 30, 2021 and December 31, 2020. At the Company’s option, the interest rate on this line of credit can float at 1.50% over a selected LIBOR rate or can be fixed at 1.50% above LIBOR for a fixed rate term. During the term of this RLC (which matures in October 2024), the Company can borrow at any time and partially or wholly repay any outstanding borrowings and then re-borrow, as necessary.
Any future borrowings under the RLC willare expected to be used for ongoing working capital requirements and other general corporate purposes. To maintain availability of funds under the RLC, undrawn amounts under the RLC will accrue a commitment fee of 10 basis points per annum. The Company's ability to borrow additional funds in the future under the RLC is subject to compliance with certain financial covenants and making certain representations and warranties. At the Company’s option, the interest rate on the RLC can float at 1.50% over a selected LIBOR or can be fixed at 1.50% above LIBOR for a fixed rate term. During the termwarranties, which are typical in this type of the Credit Facility (which matures in September 2019), we can borrow at any time and partially or wholly repay any outstanding borrowings and then re-borrow, as necessary. At September 30, 2017 and 2016 the RLC had an outstanding balance of $17,000,000 and $11,000,000, respectively. At December 31, 2016, the RLC had an outstanding balance of $7,700,000. The Term Note had outstanding balances of $66,916,000 and $69,439,000 as of September 30, 2017 and December 31, 2016, respectively.borrowing arrangement.
The interest rate per annum applicable to the Term Note is LIBOR (as defined in the Term Note) plus a margin of 170 basis points. The interest rate for the term of the note has been fixed through the use of an interest rate swap at a rate of 4.11%. The Term Note required interest only payments for the first two years of the term and thereafter requires monthly amortization payments pursuant to a schedule set forth in the Term Note, with the final outstanding principal amount due October 5, 2024. The Company may make voluntary prepayments on the Term Note at any time without penalty (excluding any applicable LIBOR or interest rate swap breakage costs). Each optional prepayment will be applied to reduce the most remote principal payment then unpaid. The Credit Facility is secured by the Company's farmland and farm assets, which include equipment, crops and crop receivables and the power plant lease and lease site, and related accounts and other rights to payment and inventory.
TheAmended Credit Facility requires compliance with three financial covenants: (a) total liabilities divided by tangible net worth not greater than 0.75 to 1.0 at each quarter end; (b) a debt service coverage ratio not less than 1.25 to 1.00 as of each quarter end on a rolling four quarter basis; and (c) maintain liquid assets equal to or greater than $20,000,000. At September 30, 20172021 and December 31, 2016, we were2020, the Company was in compliance with allthose financial covenants.

The Amended Credit Facility also contains customary negative covenants that limit the ability of TRC to, among other things, make capital expenditures, incur indebtedness and issue guaranties, consummate certain assets sales, acquisitions or mergers, make investments, pay dividends or repurchase stock, or incur liens on any assets.
We
44


The Amended Credit Facility contains customary events of default, including: failure to make required payments; failure to comply with terms of the Amended Credit Facility; bankruptcy and insolvency; and a change in control without consent of bank (which consent will not be unreasonably withheld). The Amended Credit Facility contains other customary terms and conditions, including representations and warranties, which are typical for credit facilities of this type.
The Company also havehas a $4,750,000 promissory note agreement to pay a principal amount of $4,750,000 with CMFG Life Insurance Company, to paywhose principal and interest due monthly.monthly began October 1, 2013. The interest rate on this promissory note is 4.25% per annum, with principal and interest payments of $102,700 ending on September 1, 2028. The current outstanding balance is $3,763,000. The proceeds from this promissory note were used to eliminate debt that had been previously used to provide long-term financing for a building being leased to Starbucks and provide additional working capital for future investment. The balanceas of this long-term debt instrument listed above approximates the fair value of the instrument.September 30, 2021 was $2,009,000.
Our currentCurrent and future capital resource requirements will be provided byprimarily from current cash and marketable securities, cash flow from on-goingongoing operations, distributions from joint ventures, proceeds from the sale of developed and undeveloped land parcels, potential sales of assets, additional use of debt or drawdowns against our line of credit, proceeds from the reimbursement of public infrastructure costs through Community Facilities DistrictCFD bond debt (described below under “Off-Balance Sheet Arrangements”), and the issuance of additional common stock. During April 2016,
In May 2019, we filed aan updated shelf registration statement on Form S-3, thatwhich went effective in May 2016.2019. Under the shelf registration statement, we may offer and sell in the future one or more offerings consisting ofnot to exceed $200,000,000, common stock, preferred stock, debt securities, warrants or any combination of the foregoing. On October 27, 2017,The shelf registration allows for efficient and timely access to capital markets and when combined with our other potential funding sources just noted, provides us with a variety of capital funding options that can then be used and appropriately matched to the Company completedfunding needs of the Company.
Although we have a Rights Offering raising $90,000,000 in new capital. Please see Part II, Item 5 - "Other Information" for more detail.
Atstrong liquidity position at September 30, 2017, we had $24,152,0002021 with $45,451,000 in cash and securities and had $13,000,000$35,000,000 available on our RLC to meet any short-term liquidity needs.needs, we have taken steps to maximize positive cash flow, in case a lack of liquidity in the economy limits our access to third party funding by responsibly limiting cash expenditures to the extent practical. See Note 3 (Marketable Securities) and Note 7 (Line of Credit and Long-Term Debt) of the Notes to Unaudited Consolidated Financial Statements for more information.
We continue to expect that substantial future investments will be required in order to develop our land assets. In order toTo meet these long-term capital requirements, we may need to issue common stock and secure additional debt financing and continue to renew our existing credit facilities. In addition to debt financing, we will use other capital alternatives such as entering into joint ventures.ventures with financial partners, sales of assets, and the issuance of common stock. We will use a combination of the above funding sources to properly match funding requirements with the assets or development project being funded. There is no assurance in the future that we can obtain financing or that we can obtain financing at favorable terms. We believe we have adequate capital resources to fund our cash needs and our capital investment requirements in the near-term as described earlier in the cash flow and liquidity discussions.

Contractual Cash Obligations
The following table summarizes our contractual cash obligations and commercial commitments as of September 30, 2017,2021, to be paid over the next five years and thereafter:
Payments Due by Period Payments Due by Period
(In thousands)Total One Year or Less Years 2-3 Years 4-5 Thereafter(In thousands)TotalOne Year or LessYears 2-3Years 4-5Thereafter
CONTRACTUAL OBLIGATIONS:         
Contractual Obligations:Contractual Obligations:
Estimated water payments$265,009
 $8,884
 $18,218
 $18,846
 $219,061
Estimated water payments$266,116 $12,474 $21,314 $22,613 $209,715 
Long-term debt70,967
 4,016
 8,168
 8,818
 49,965
Long-term debt53,878 4,424 9,491 10,341 29,622 
Interest on long-term debt16,212
 2,815
 5,140
 4,440
 3,817
Interest on long-term debt11,178 2,145 3,713 2,886 2,434 
Revolving line of credit borrowings17,000
 17,000
 
 
 
Cash contract commitments8,340
 6,131
 1,138
 
 1,071
Cash contract commitments6,898 4,206 1,656 518 518 
Defined Benefit Plan3,095
 45
 462
 527
 2,061
Defined Benefit Plan4,153 299 666 843 2,345 
SERP4,561
 146
 986
 962
 2,467
SERP4,837 527 1,038 1,040 2,232 
Tejon Ranch Conservancy2,800
 800
 1,600
 400
 
Tejon Ranch Conservancy200 200 — — — 
Financing fees and interest163
 163
 
 
 
Financing feesFinancing fees163 163 — — — 
Operating leaseOperating lease27 16 11 — — 
Total contractual obligations$388,147
 $40,000
 $35,712
 $33,993
 $278,442
Total contractual obligations$347,450 $24,454 $37,889 $38,241 $246,866 
The categories above include purchase obligations and other long-term liabilities reflected on our balance sheet under GAAP. A “purchase obligation” is defined in Item 303(a)(5)(ii)(D) of Regulation S-K as “an agreement to purchase goods or services that is enforceable and legally binding on the registrant that specifies all significant terms, including: fixed or minimum quantities to be purchased; fixed, minimum or variable price provisions; and the approximate timing of the transaction.” Based on this
45


definition, the table above includes only those contracts that include fixed or minimum obligations. It does not include normal purchases, which are made in the ordinary course of business.
Estimated water payments include the Nickel Family, LLC water contract, which obligates us to purchase 6,693 acre-feet of water annually through 2044 and SWP contracts with Wheeler Ridge Maricopa Water Storage District, TCWD, Tulare Lake Basin Water Storage District, and Dudley-Ridge Water Storage District. These contracts for the supply of future water run through 2035. Please refer to Note 5 (Long-Term Water Assets) of the Notes to Consolidated Financial Statements for additional information regarding water assets.
Our financial obligationscash contract commitments consist of contracts in various stages of completion related to the Tejon Ranch Conservancy are prescribedinfrastructure development within our industrial developments and entitlement costs related to our industrial and residential development projects. Also included in the Conservation Agreement.cash contract commitments are operating lease obligations. Our advances tooperating lease obligations are for office equipment. At the Tejon Ranch Conservancy are dependent on the occurrence of certain events and their timing, and are therefore subject to change in amount and period. The amounts included above are the minimum amountspresent time, we anticipate contributing through the year 2021, at which time our current contractual obligation terminates.do not have any capital lease obligations or purchase obligations outstanding.
As discussed in Note 13 (Retirement Plans) of the Notes to Unaudited Consolidated Financial Statements, we have long-term liabilities for deferred employee compensation, including pension and supplemental retirement plans. Payments in the above table reflect estimates of future defined benefit plan contributions from the Company to the plan trust, estimates of payments to employees from the plan trust, and estimates of future payments to employees from the Company that are in the SERP program. We contributedexpect to contribute $165,000 to our defined benefit plan in 2017.2021.
Our cash contract commitments consistfinancial obligations to the Tejon Ranch Conservancy are prescribed in the Conservation Agreement, as discussed in Note 12 (Commitments and Contingencies) of contractsthe Notes to Unaudited Consolidated Financial Statements. Our advances to the Tejon Ranch Conservancy were dependent on the occurrence of certain events and their timing and were therefore subject to change in various stages of completion related to infrastructure development withinamount and period. The amounts included above are the minimum amounts we anticipate contributing through the year 2021, at which time our industrial developmentscurrent contractual obligation terminates. See Note 12 (Commitments and entitlement costs related to our industrial and residential development projects.
Our operating lease obligations are for office equipment, several vehicles, and a temporary trailer providing office space and average approximately $25,000 per month. At the present time, we do not have any capital lease obligations or purchase obligations outstanding.
Estimated water payments include SWP contracts with WRMWDS, TCWD, TLBWSD, and DRWD. These contracts for the supply of future water run through 2035. In addition, in late 2013 we purchased

the assignment of a contract to purchase water. The assigned water contract is with Nickel Family, LLC and obligates us to purchase 6,693 acre-feet of water annually starting in 2014 and running to 2044. Please refer to Note 5 (Investments in Water Assets)Contingencies) of the Notes to Unaudited Consolidated Financial Statements for additional information regarding water assets.a discussion of litigation related to payment obligations to the Tejon Ranch Conservancy.
46


Off-Balance Sheet Arrangements
The following table shows contingent obligations we have with respect to certain bonds issued by the CFD:CFDs: 
Amount of Commitment Expiration Per Period Amount of Commitment Expiration Per Period
($ in thousands)Total < 1 year 1 -3 Years 4 -5 Years After 5 Years($ in thousands)Total< 1 year2 -3 Years4 -5 YearsAfter 5 Years
OTHER COMMERCIAL COMMITMENTS:         
Other Commercial Commitments:Other Commercial Commitments:
Standby letter of credit$4,921
 $4,921
 $
 $
 $
Standby letter of credit$4,393 $4,393 $— $— $— 
Total other commercial commitments$4,921
 $4,921
 $
 $
 $
Total other commercial commitments$4,393 $4,393 $— $— $— 
The Tejon Ranch Public Facilities Financing Authority, or TRPFFA, is a joint powers authority formed by Kern County and TCWD to finance public infrastructure within the Company’s Kern County developments. TRPFFA created two CFDs, the West CFD and the East CFD. The West CFD has placed liens on 420 acres of the Company’s land to secure payment of special taxes related to $28,620,000 of bond debt sold by TRPFFA for TRCC-West. The East CFD has placed liens on 1,931 acres of the Company’s land to secure payments of special taxes related to $55,000,000$75,965,000 of bond debt sold by TRPFFA for TRCC-East. At TRCC-West, the West CFD has no additional bond debt approved for issuance. At TRCC-East, the East CFD has approximately $65,000,000$44,035,000 of additional bond debt authorized by TRPFFA.
In connection with the sale of bonds there is a standby letter of credit for $4,921,000$4,393,000 related to the issuance of East CFD bonds. The standby letter of credit is in place to provide additional credit enhancement and cover approximately two yearsyears' worth of interest on the outstanding bonds. This letter of credit will not be drawn upon unless the Company, as the largest landowner in the CFD, fails to make its property tax payments. As development occurs within TRCC-East, there is a mechanism in the bond documents to reduce the amount of the letter of credit. The Company believes as of September 30, 2021, that the letter of credit will likely never be drawn upon. This letter of credit is for a two-year period of time and will be renewed in two-year intervals as necessary. The annual cost related to the letter of credit is approximately $83,000.$68,000. The assessmenttaxing of each individual property sold or leased within each CFD is not determinable at this time because it is based on the current tax rate and the assessed value of the property at the time of sale or on its assessed value at the time it is leased to a third-party. Accordingly, the Company is not required to recognize an obligation atas of September 30, 2017.2021.
AtAs of September 30, 2017,2021, aggregate outstanding debt of unconsolidated joint ventures was $111,590,000.$127,535,000. We provided a guarantee on $96,312,000$113,263,000 of this debt, relating to our joint ventures with Rockefeller and Majestic. Because of positive cash flow generation within the Rockefeller and Majestic joint ventures, we, as of September 30, 2021, do not expect the guarantee to be called upon. We do not provide a guarantee on the $15,278,000$14,272,000 of debt related to our joint venture with TA/Petro.

47



Non-GAAP Financial Measures
EBITDA represents earnings before interest, taxes, depreciation, and amortization, a non-GAAP financial measure, and is used by us and others as a supplemental measure of performance and liquidity. We useperformance. Adjusted EBITDA is used to assess the performance of our core operations, for financial and operational decision making, and as a supplemental or additional means of evaluating period-to-period comparisons on a consistent basis. Adjusted EBITDA is calculated as EBITDA, excluding stock compensation expense. We believe Adjusted EBITDA provides investors relevant and useful information because it permits investors to view income from our operations on an unleveraged basis before the effects of taxes, depreciation and amortization, and stock compensation expense. By excluding interest expense and income, EBITDA and Adjusted EBITDA allow investors to measure our performance independent of our capital structure and indebtedness and, therefore, allow for a more meaningful comparison of our performance to that of other companies, both in the real estate industry and in other industries. We believe that excluding charges related to share-based compensation facilitates a comparison of our operations across periods and among other companies without the variances caused by different valuation methodologies, the volatility of the expense (which depends on market forces outside our control), and the assumptions and the variety of award types that a company can use. EBITDA and Adjusted EBITDA have limitations as measures of our performance. EBITDA and Adjusted EBITDA do not reflect our historical cash expenditures or future cash requirements for capital expenditures or contractual commitments. While EBITDA and Adjusted EBITDA are relevant and widely used measures of performance, they do not represent net income or cash flows from operations as defined by GAAP, and they should not be considered as alternatives to those indicators in evaluating performance or liquidity.GAAP. Further, our computation of EBITDA and Adjusted EBITDA may not be comparable to similar measures reported by other companies.

Three Months Ended September 30,Nine Months Ended September 30,
($ in thousands)2021202020212020
Net income (loss)$226 $384 $1,987 $(626)
Net income (loss) attributable to non-controlling interest(14)(9)
Net income (loss) attributable to common stockholders219 398 1,986 (617)
Interest, net
Consolidated(5)(455)(21)(834)
Our share of interest expense from unconsolidated joint ventures621 653 1,874 1,971 
Total interest, net616 198 1,853 1,137 
Income taxes98 403 1,237 1,111 
Depreciation and amortization:
Consolidated1,476 1,455 3,408 3,635 
Our share of depreciation and amortization from unconsolidated joint ventures1,105 1,167 3,461 3,222 
Total depreciation and amortization2,581 2,622 6,869 6,857 
EBITDA3,514 3,621 11,945 8,488 
Stock compensation expense937 1,167 3,162 3,566 
Adjusted EBITDA$4,451 $4,788 $15,107 $12,054 





















The following schedule reconciles Adjusted EBITDANet operating income (NOI) is a non-GAAP financial measure calculated as operating income, the most directly comparable financial measure calculated and EBITDApresented in accordance with GAAP, excluding general and administrative expenses, interest expense, depreciation and amortization, and gain or loss on sales of real estate. We believe NOI provides useful information to net income.investors regarding our financial condition and results of operations because it primarily reflects those income and expense items that are incurred at the property level. Therefore, we believe NOI is a useful measure for evaluating the operating performance of our real estate assets.
48


 Three Months Ended September 30, Nine Months Ended September 30,
($ in thousands)2017 2016 2017 2016
Net income$(26) $317

$(1,940) $784
Net income (loss) attributable to non-controlling interest(4) (7) (42) (61)
Interest, net       
Consolidated(91) (112) (289) (350)
Our share of interest expense from unconsolidated joint ventures431
 360
 1,262
 1,031
Total interest, net340
 248
 973
 681
Income taxes336
 271
 (1,268) 503
Depreciation and amortization:       
Consolidated1,140
 1,360
 3,422
 4,170
Our share of depreciation and amortization from unconsolidated joint ventures1,333
 792
 3,970
 2,164
Total depreciation and amortization2,473
 2,152

7,392
 6,334
EBITDA3,127
 2,995

5,199
 8,363
Stock compensation expense877
 1,166
 2,571
 3,297
Adjusted EBITDA$4,004
 $4,161

$7,770
 $11,660
Three Months Ended September 30,Nine Months Ended September 30,
($ in thousands)2021202020212020
Commercial/Industrial operating income$135 $684 $4,225 $1,440 
Plus: Commercial/Industrial depreciation and amortization114 117 346 367 
Plus: General, administrative, cost of sales and other expenses1,993 1,816 7,821 4,950 
Less: Other revenues including land sales(430)(401)(6,972)(1,260)
Total Commercial/Industrial net operating income$1,812 $2,216 $5,420 $5,497 
($ in thousands)Three Months Ended September 30,Nine Months Ended September 30,
Net operating income2021202020212020
Pastoria Energy Facility$1,209 $1,467 $3,297 $3,464 
TRCC195 377 956 935 
Communication leases247 229 712 683 
Other commercial leases161 143 455 415 
Total Commercial/Industrial net operating income$1,812 $2,216 $5,420 $5,497 
The Company utilizes net operating income (NOI)NOI of unconsolidated joint ventures a non-GAAP financial measure, as a measure of financial or operating performance.performance that is not specifically defined by GAAP. We believe NOI of unconsolidated joint ventures provides investors with usefuladditional information concerning operating performance because it illustrates the profitability of our unconsolidated joint ventures after taking into account operating expenses and before taking into account that interest expense and depreciation and amortization associated with our unconsolidated joint ventures, which costs may vary as a result of credit ratings and cost of capital .ventures. We also use this measure internally to monitor the operating performance of our unconsolidated joint ventures. Our computation of this non-GAAP measure may not be the same as similar measures reported by other companies. This non-GAAP financial measure should not be considered as an alternative to net income as a measure of the operating performance of our unconsolidated joint ventures or to cash flows computed in accordance with GAAP as a measure of liquidity, nor are they indicative of cash flows from operating and financial activities of our unconsolidated joint ventures.



The following schedule reconciles net income of unconsolidated joint ventures to NOI of unconsolidated joint ventures. Please refer to Note 15 (Investment in Unconsolidated and Consolidated Joint Ventures) of the Notes to Unaudited Consolidated Financial Statements for further discussion on joint ventures.
Three Months Ended September 30,Nine Months Ended September 30,
($ in thousands)2021202020212020
Net income of unconsolidated joint ventures$2,425 $1,724 $4,482 $5,802 
Interest expense of unconsolidated joint ventures1,226 1,288 3,699 3,881 
Operating income of unconsolidated joint ventures3,651 3,012 8,181 9,683 
Depreciation and amortization of unconsolidated joint ventures2,070 2,204 6,504 6,072 
Net operating income of unconsolidated joint ventures$5,721 $5,216 $14,685 $15,755 
49
 Three Months Ended September 30, Nine Months Ended September 30,
($ in thousands)2017 2016 2017 2016
Net income of unconsolidated joint ventures$2,794
 $3,919
 $5,466
 $9,488
Interest expense of unconsolidated joint ventures837
 670
 2,455
 1,941
Operating income of unconsolidated joint ventures3,631
 4,589
 7,921
 11,429
Depreciation and amortization of unconsolidated joint ventures2,547
 1,453
 7,596
 4,015
Net operating income of unconsolidated joint ventures$6,178

$6,042
 $15,517
 $15,444


ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
Market risk represents the risk of loss that may impact the financial position, results of operations, or cash flows of the Company due to adverse changes in financial or commodity market prices or rates. We are exposed to market risk in the areas of interest rates and commodity prices.
Financial Market Risks
Our exposure to financial market risks includes changes to interest rates and credit risks related to marketable securities, interest rates related to our outstanding indebtedness and market and credit risks related to trade receivables.
The primary objective of our investment activities is to preserve principal while at the same time maximizing yields and prudently managing risk. To achieve this objective and limit interest rate exposure, we limit our investments to securities with a maturity of less than five years and an investment grade rating from Moody’s or Standard &and Poor’s. See Note 3 (Marketable Securities) of the Notes to Unaudited Consolidated Financial Statements.
Our currentThe RLC has anhad no outstanding balance as of $17,000,000.September 30, 2021. The interest rate on the RLC can either float at 1.50% over a selected LIBOR rate or can be fixed at 1.50% above LIBOR for a fixed term for a limited period of time and change only at maturity of the fixed rate portion. The floating rate and fixed rate options within our RLC help us manage our interest rate exposure on any outstanding balances.
We are exposed to interest rate risk on our long-term debt. Long-term debt consists of two term loans. The first term loan is for $66,916,000 andloans, one of which has a rate thatbalance of $51,869,000 as of September 30, 2021 and is tied to LIBOR plus a margin of 1.70%. The interest rate for the term of this loan has been fixed through the use of an interest rate swap that fixed the rate at 4.11%4.16%. The outstanding balance on the second term loan has an outstanding balanceas of $3,763,000September 30, 2021 was $2,009,000 and has a fixed rate of 4.25%. We believe it is prudent at times to limit the variability of floating-rate interest payments and have from time-to-timetime to time entered into interest rate swap arrangements to manage those fluctuations, as we did with the first term loan mentioned above.(discussed here).
Market risk related to our farming inventories ultimately depends on the value of almonds, grapes, and pistachios at the time of payment or sale. Market risk related to our farming inventories is discussed below in the section pertaining to commodity price exposure. Credit risk related to our receivables depends upon the financial condition of our customers. Based on historical experience with our current customers and our periodic credit evaluations of our customers’ financial conditions, we believe our credit risk is minimal.

Market risk related to our farming inventories is discussed below in the section pertaining to commodity price exposure.
The following tables provide information about our financial instruments that are sensitive to changes in interest rates. The tables present our debt obligations and marketable securities and their related weighted average interest rates by expected maturity dates.


Interest Rate Sensitivity Financial Market Risks
Principal Amount by Expected Maturity
At September 30, 20172021
(In thousands except percentage data)
20212022202320242025ThereafterTotalFair Value
Assets:
Marketable securities$999$6,795$—$—$—$—$7,794$7,791
Weighted average interest rate0.10%0.17%—%—%—%—%0.16%
Liabilities:
Long-term debt ($4.75M note)$62$254$265$277$289$862$2,009$2,009
Weighted average interest rate4.25%4.25%4.25%4.25%4.25%4.25%4.25%
Long-term debt (Amended Term Loan)$1,033$4,221$4,429$4,624$4,825$32,737$51,869$51,869
Weighted average interest rate4.16%4.16%4.16%4.16%4.16%4.16%4.16%

50

 2017 2018 2019 2020 2021 Thereafter Total Fair Value
Assets:               
Marketable securities$2,113 $13,618 $5,788    21,519 $21,494
Weighted average interest rate1.29% 1.59% 1.71%    1.59%  
Liabilities:               
Revolving line of credit$17,000      $17,000 $17,000
Weighted average interest rate2.74%      2.74%  
Long-term debt ($4.75M note)$67 $277 $289 $302 $315 $2,513 $3,763 $3,763
Weighted average interest rate4.25% 4.25% 4.25% 4.25% 4.25% 4.25% 4.25%  
Long-term debt ($70.0M note)$870 $3,563 $3,715 $3,881 $4,051 $50,836 $66,916 $66,916
Weighted average interest rate4.11% 4.11% 4.11% 4.11% 4.11% 4.11% 4.11%  
Long-term debt (other)$54 $218 $16    $288 $288
Weighted average interest rate3.35% 3.35% 3.35%    3.35%  



Interest Rate Sensitivity Financial Market Risks
Principal Amount by Expected Maturity
At December 31, 20162020
(In thousands except percentage data)
2017 2018 2019 2020 2021 Thereafter Total Fair Value20212022202320242025ThereafterTotalFair Value
Assets: Assets:
Marketable securities$6,979 $13,787 $6,007    $26,773 $26,675Marketable securities$2,766$—$—$—$—$—$2,766$2,771
Weighted average interest rate1.32% 1.59% 1.73%    1.55% Weighted average interest rate0.99%—%—%—%—%—%0.99%
Liabilities: Liabilities:
Revolving line of credit$7,700      $7,700 $7,700
Weighted average interest rate2.26%      2.26 
Long-term debt ($4.75M note)$266 $277 $289 $302 $315 $2,512 $3,961 $3,961Long-term debt ($4.75M note)$244$254$265$277$289$862$2,191$2,191
Weighted average interest rate4.25% 4.25% 4.25% 4.25% 4.25% 4.25% 4.25% Weighted average interest rate4.25%4.25%4.25%4.25%4.25%4.25%4.25%
Long-term debt ($70.0M note)$3,393 $3,563 $3,715 $3,881 $4,051 $50,836 $69,439 $69,439Long-term debt ($70.0M note)$4,051$4,221$4,429$4,624$4,825$32,737$54,887$54,887
Weighted average interest rate4.11% 4.11% 4.11% 4.11% 4.11% 4.11% 4.11% Weighted average interest rate4.16%4.16%4.16%4.16%4.16%4.16%4.16%
Long-term debt (other)$195 $218 $54    $467 $467
Weighted average interest rate3.35% 3.35% 3.35%    3.35% 
Commodity Price Exposure
As of September 30, 2017, we have exposureFarming inventories and accounts receivables are exposed to adverse price fluctuations associated with certain inventories and accounts receivable.fluctuations. Farming inventories consistconsists of farming cultural and processing costs related to 2017associated with crop production. The farmingFarming inventory costs inventoried are recorded at actual costsas incurred. Historically, these costs have been recovered each year when that year’sthrough crop harvest has been sold.sales occurring after harvest.
With respect to accounts receivable,receivables, the amount at risk primarily relates primarily to farm crops. These receivables are recorded as estimates of the prices that ultimately will be received for the crops. The final price is generally not known for several months following the close of our fiscal year. Of the $7,330,000$5,974,000 of accounts receivable outstanding at September 30, 2017, $2,067,0002021, $3,462,417, or 28%58%, ispertains to pistachio sales receivables that are at risk to changing prices. Of the amount at risk to changing prices, $1,288,000 is attributable to pistachios and $779,000 is attributable to almonds. The comparable amount of accounts receivable at risk to price changes at December 31, 2016 was $5,999,000, or 69% of the total accounts receivable of $8,740,000.
The price estimated for the remaining accounts receivable for pistachios recorded at September 30, 20172021 was $2.00$2.14 per pound and compared to $2.03 per pound$2.04 at December 31, 2016.2020 levels. For each $0.01 change in the price per pound of pistachios, our receivable for pistachios increases or decreases by $3,600.$16,200. Although the final price per pound of pistachios, (andand therefore the extent of the risk)risk is not presently known,unknown, pricing over the lastpast three years prices have ranged from $2.00 to $2.45. With respect to almonds, the preliminary price estimate for the remaining receivable was $2.33 per pound compared to $2.51 per pound at December 31, 2016. For each $0.01 change in the price of almonds, our receivable for almonds increases or decreases by $2,600. The range of final prices over the last three years for almonds has ranged from $2.58$2.12 to $3.67 per pound.

$3.31.

51


ITEM 4. CONTROLS AND PROCEDURES
(a)Evaluation of Disclosure Controls and Procedures
As(a)Evaluation of Disclosure Controls and Procedures
At the end of the period covered by this report, wemanagement carried out an evaluation, under the supervision and with the participation of our management, including our Chief Executive Officer and Chief Financial Officer, of the effectiveness of the design and operation of our disclosure controls and procedures pursuant to Rules 13a-15 and 15d-15 of the Securities Exchange Act of 1934, as amended, or the Exchange Act. Based upon that evaluation, the Chief Executive Officer and Chief Financial Officer concluded that as of the end of the period covered by this report, our disclosure controls and procedures arewere effective in ensuring that all information required in the reports we file or submit under the Exchange Act iswas accumulated and communicated to our management, including our Chief Executive Officer and Chief Financial Officer, as appropriate to allow timely decisions regarding required disclosure and is recorded, processed, summarized and reported within the time period required by the rules and regulations of the SEC.
(b)Changes in Internal Control over Financial Reporting
(b)Changes in Internal Control Over Financial Reporting
There have been no changes in our internal control over financial reporting identified in connection with the evaluation required by paragraph (d) of Rule 13a-15 or Rule 15d-15 under the Exchange Act that occurred during our last fiscal quarter that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.
52


PART II - OTHER INFORMATION
Item 1. Legal Proceedings
Please refer to Note 12 (Commitments and Contingencies) in the Notes to Unaudited Consolidated Financial Statements in this report.


Item 1A. Risk Factors
There have been no material changes to the risk factors previously disclosed in Part I, Item 1A or elsewhere in our most recent Annual Report on Form 10-K.


Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
Not applicable.None.


Item 3. Defaults Upon Senior Securities
Not applicable.None.


Item 4. Mine Safety Disclosures
Not applicable.


Item 5. Other Information
On October 4, 2017, the Company commenced a right offering to common shareholders whereby proceeds will be used to provide additional working capital for general corporate purposes, including to fund general infrastructure costs and the development of buildings at TRCC, to continue forward with entitlement and permitting programs for the Centennial and Grapevine communities and costs related to the preparation of the development of MV. The rights offering concluded on October 27, 2017, with the Company raising $90,000,000 from the sale of 5,000,000 shares at $18.00 per share. For additional detail please refer to Form 8-K filed on October 30, 2017.None.







Item 6. Exhibits:
3.1
FN 1
3.2
FN 2
4.1
FN 3
4.2
FN 4
4.3
FN 5
4.5FN 37
10.1
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-KFN 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
10.29
FN 20
10.30 FN 21
10.31 FN 22
10.32 FN 25

53


10.3010.33 
FN 21
10.31
FN 22
10.32
FN 22
10.33
FN 2236
10.34
FN 23
10.35
FN 24
10.36
FN 25
10.37
FN 26
10.38
FN 27
10.39
FN 28
10.40
FN 29
10.41
FN 30
31.110.42 
FN 31
10.43 FN 32
10.44 FN 33
10.45 FN 34
10.46 FN 35
10.47 FN 38
10.48 FN 39
31.1 Filed herewith
31.2
Filed herewith
32
Filed herewithFurnished
101.INSXBRL Instance Document.Document - the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document.Filed herewith
101.SCHInline XBRL Taxonomy Extension Schema Document.Filed herewith
101.CALInline XBRL Taxonomy Extension Calculation Linkbase Document.Filed herewith
101.DEFInline XBRL Taxonomy Extension Definition Linkbase Document.Filed herewith
101.LABInline XBRL Taxonomy Extension Label Linkbase Document.Filed herewith
101.PREInline XBRL Taxonomy Extension Presentation Linkbase Document.Filed herewith
104Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101).
*Management contract, compensatory plan or arrangement.


FN 1This document, filed with the Securities and Exchange Commission in Washington, D.C. (file number 1-7183) under Item 141-07183) as Exhibit 3.1 to our AnnualQuarterly Report on Form 10-K10-Q for yearthe period ended December 31, 1987,June 30, 2021, is incorporated herein by reference. This Exhibit was not filed with the Securities and Exchange Commission in an electronic format.
FN 2This document, filed with the Securities and Exchange Commission in Washington, D.C. (file number 1-7183)1-07183) as Exhibit 99.1 to our Current Report on Form 8-K filed on September 20, 2017,May 26, 2020, is incorporated herein by reference.
FN 35This document, filed with the Securities and Exchange Commission in Washington, D.C. (file number 1-7183) as Exhibit 4.3 to our Current Report on Form 8-K filed on May 7, 2004, is incorporated herein by reference.
FN 4This document, filed with the Securities and Exchange Commission in Washington, D.C. (file number I-7183) as Exhibit 4.4 to our Current Report on Form 8-K filed on May 7, 2004, is incorporated herein by reference.
FN 5This document, filed with the Securities and Exchange Commission in Washington, D.C. (file number 1-7183)1-07183) as Exhibit 4.1 to our Current Report on Form 8-K filed on December 20, 2005, is incorporated herein by reference.
FN 6This document, filed with the Securities and Exchange Commission in Washington, D.C. (file number 1-7183)1-07183) under Item 14 to our Annual Report on Form 10-K for the 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 7This document, filed with the Securities and Exchange Commission in Washington, D.C. (file number 1-7183)1-07183) under Item 14 to our Annual Report on Form 10-K for the period endingyear ended December 31, 1997, is incorporated herein by reference.
FN 8This document, filed with the Securities and Exchange Commission in Washington, D.C. (file number 1-7183)1-07183) as Exhibit 10.9 to our Annual Report on formForm 10-K for the year ended December 31, 2008, is incorporated herein by reference.
FN 9This document, filed with the Securities and Exchange Commission in Washington, D.C. (file number 1-7183)1-07183) as Exhibit 10.10 to our Annual Report on formForm 10-K for the year ended December 31, 2008, is incorporated herein by reference
54


FN 10This document filed with the Securities and Exchange Commission in Washington, D.C. (file number 1-7183)1-07183) 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 11This document, filed with the Securities and Exchange Commission in Washington, D.C. (file number 1-7183)1-07183) as Exhibit 4.1 to our Current Report on Form 8-K filed on May 7, 2004, is incorporated herein by reference.
FN 12This document, filed with the Securities and Exchange Commission in Washington, D.C. (file number 1-7183)1-07183) as Exhibit 4.2 to our Current Report on Form 8-K filed on May 7, 2004, is incorporated herein by reference.
FN 13This document, filed with the Securities and Exchange Commission in Washington, D.C. (file number 1-7183)1-07183) 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 14This document, filed with the Securities and Exchange Commission in Washington, D.C. (file number 1-7183)1-07183) as Exhibit 10.24 to our Current Report on Form 8-K filed on May 24, 2006, is incorporated herein by reference.
FN 15This document, filed with the Securities and Exchange Commission in Washington, D.C. (file number 1-7183)1-07183) as Exhibit 10.28 to our Current Report on Form 8-K filed on June 23, 2008, is incorporated herein by reference.
FN 16This document, filed with the Securities and Exchange Commission in Washington, D.C. (file number 1-7183)1-07183) as Exhibit 10.25 to our Quarterly Report on Form 10-Q for the period endingended June 30, 2009, is incorporated herein by reference.

FN 17
FN 17This document, filed with the Securities and Exchange Commission in Washington, D.C. (file number 1-7183)1-07183) as Exhibit 10.26 to our Quarterly Report on Form 10-Q for the period endingended March 31, 2013, for the period ended March 31, 2013, is incorporated herein by reference.
FN 18This document, filed with the Securities and Exchange Commission in Washington, D.C. (file number 1-7183)1-07183) as Exhibit 10.27 to our Current Report on Form 8-K filed on June 4, 2013, is incorporated herein by reference.
FN 19This document, filed with the Securities and Exchange Commission in Washington, D.C. (file number 1-7183)1-07183) as Exhibit 10.1 to our Current Report on Form 8-K filed on August 8, 2013, is incorporated herein by reference.
FN 20This document, filed with the Securities and Exchange Commission in Washington, D.C. (file number 1-7183)1-07183) 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 21This document, filed with the Securities and Exchange Commission in Washington, D.C. (file number 1-7183)1-07183) as Exhibit 10.30 to our Current Report on Form 8-K filed on July 16, 2014, is incorporated herein by reference.
FN 22This document, filed with the Securities and Exchange Commission in Washington, D.C. (file number 1-7183)1-07183) as Exhibits 10.31-10.3310.31 to our Current Report on Form 8-K filed on October 17, 2014, is incorporated herein by reference.
FN 23This document, filed with the Securities and Exchange Commission in Washington, D.C. (file number 1-7183)1-07183) 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 24This document, filed with the Securities and Exchange Commission in Washington, D.C. (file number 1-7183)1-07183) as Exhibit 10.35 to our Quarterly Report on Form 10-Q for the period endingended June 30, 2015, is incorporated herein by reference.
FN 25This document, filed with the Securities and Exchange Commission in Washington, D.C. (file number 1-7183)1-07183) as Exhibit 10.3610.32 to our QuarterlyCurrent Report on Form 10-Q for the period ending September 30, 2015,8-K filed on October 17, 2014, is incorporated herein by reference.
FN 26This document, filed with the Securities and Exchange Commission in Washington, D.C. (file number 1-7183)1-07183) as Exhibit 10.37 to our Quarterly Report on Form 10-Q for the period endingended June 30, 2016, is incorporated herein by reference.
FN 27This document, filed with the Securities and Exchange Commission in Washington, D.C. (file number 1-7183)1-07183) as Exhibit 10.38 to our Quarterly Report on Form 10-Q for the period endingended September 30, 2016, is incorporated herein by reference.
FN 28This document, filed with the Securities and Exchange Commission in Washington, D.C. (file number 1-7183)1-07183) as Exhibit 10.39 to our Annual Report on Form 10-K for the year ended December 31, 2016, is incorporated herein by reference.
FN 29This document, filed with the Securities and Exchange Commission in Washington, D.C. (file number 1-7183)1-07183) as Exhibit 10.40 to our Annual Report on Form 10-K for the year ended December 31, 2016, is incorporated herein by reference.
FN 30This document, filed with the Securities and Exchange Commission in Washington, D.C. (file number 1-7183)1-07183) as Exhibit 10.41 to our Annual Report on Form 10-K for the year ended December 31, 2016, is incorporated herein by reference.
FN 31This document, filed with the Securities and Exchange Commission in Washington, D.C. (file number 1-07183) as Exhibit 10.42 to our Quarterly Report on Form 10-Q for the period ended September 30, 2018, is incorporated herein by reference.
55


FN 32This document, filed with the Securities and Exchange Commission in Washington, D.C. (file number 1-07183) as Exhibit 10.43 to our Annual Report on Form 10-K for the year ended December 31, 2018, is incorporated herein by reference.
FN 33This document, filed with the Securities and Exchange Commission in Washington, D.C. (file number 1-07183) as Exhibit 10.44 to our Annual Report on Form 10-K for the year ended December 31, 2018, is incorporated herein by reference.
FN 34This document, filed with the Securities and Exchange Commission in Washington, D.C. (file number 1-07183) as Exhibit 10.45 to our Quarterly Report on Form 10-Q for the period ended September 30, 2019, is incorporated herein by reference.
FN 35This document, filed with the Securities and Exchange Commission in Washington, D.C. (file number 1-07183) as Exhibit 10.46 to our Quarterly Report on Form 10-Q for the period ended September 30, 2019, is incorporated herein by reference.
FN 36This document, filed with the Securities and Exchange Commission in Washington, D.C. (file number 1-07183) as Exhibit 10.33 to our Current Report on Form 8-K filed on October 17, 2014, is incorporated herein by reference.
FN 37This document, filed with the Securities and Exchange Commission in Washington, D.C. (file number 333-231032) as Exhibit 4.6 to our Registration Statement on Form S-3 filed on April 25, 2019, is incorporated herein by reference.
FN 38This document, filed with the Securities and Exchange Commission in Washington, D.C. (file number 1-07183) as Exhibit 10.47 to our Annual Report on Form 10-K for the year ended December 31, 2019, is incorporated herein by reference.
FN 39This document, filed with the Securities and Exchange Commission in Washington, D.C. (file number 1-07183) as Exhibit 10.48 to our Quarterly Report on Form 10-Q for the period ended March 31, 2021, is incorporated herein by reference.
56


SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the Companyregistrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized, on November 9, 2017.authorized.
 

TEJON RANCH CO.
(The Company)
November 4, 2021/s/    Allen E. LydaGregory S. Bielli
Allen E. LydaDateGregory S. Bielli
President and Chief Executive Vice President, Chief Financial Officer and Corporate Treasurer
(Principal Executive Officer)
November 4, 2021/s/    Robert D. Velasquez
DateRobert D. Velasquez
Senior Vice President of Finance and Chief AccountingFinancial Officer
(Principal Financial and Accounting Officer)















5557