TEJON RANCH CO

Previous wording

Summary of Second Quarter and YTD 2025 Performance

Current wording

Summary of Third Quarter and YTD 2025 Performance

Previous wording

For the three months ended June 30, 2025, we had a net loss attributable to common stockholders of $1,712,000 compared to a net income attributable to common stockholders of $957,000 for the three months ended June 30, 2024. The primary driver of this $2,669,000 increase in net loss was the additional professional fees and consulting expenses incurred of $2,316,000 during the contested board election and proxy defense.

Current wording

For the nine months ended September 30, 2025, we had a net loss attributable to common stockholders of $1,506,000 compared to a net loss attributable to common stockholders of $1,793,000 for the same period in 2024. The $287,000 improvement in net loss was primarily driven by the recognition of $595,000 of additional gross margin following the fulfillment of the performance obligation associated with Nestlé land sale that occurred in 2022. Net increases in our agricultural operations also contributed to this improvement, with almond and wine grape revenues increasing by $1,169,000 and $1,147,000, respectively. Additionally, expenses in the Real Estate – Resort/Residential segment decreased by $1,308,000, which was primarily attributable to additional expenses of $1,250,000 in 2024 related to professional service fees and planning costs related to capital efforts tied to the Company's master planned communities. These positive effects were partially offset by decreased revenues from the mineral resources segment totaling $410,000, as well as $3,399,000 of additional expenses related to contested board election and proxy defense efforts during the nine months ended September 30, 2025.

Previous wording

During the six months ended June 30, 2025, our critical accounting policies have not changed since the filing of our Annual Report on Form 10-K for the year ended December 31, 2024. 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 a discussion regarding newly adopted accounting principles.

Current wording

During the nine months ended September 30, 2025, our critical accounting policies have not changed since the filing of our Annual Report on Form 10-K for the year ended December 31, 2024. 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 a discussion regarding newly adopted accounting principles.

Previous wording

•Commercial/industrial real estate development segment revenues were $7,861,000 for the six months ended June 30, 2025, an increase of $2,366,000, or 43%, from $5,495,000 for the six months ended June 30, 2024. The primary driver of this increase was the recognition of $2,373,000 in land sales revenue, following the Company's fulfillment of the performance obligation associated with a land sale that occurred in 2022.

Current wording

•Commercial/industrial real estate development segment revenues were $10,985,000 for the nine months ended September 30, 2025, an increase of $2,488,000, or 29%, from $8,497,000 for the nine months ended September 30, 2024. The primary driver of this increase was the recognition of $2,373,000 in land sales revenue, following the Company's fulfillment of the performance obligation associated with a land sale that occurred in 2022.

Previous wording

•Commercial/industrial real estate development segment expenses were $5,383,000 for the six months ended June 30, 2025, an increase of $1,466,000, or 37%, from $3,917,000 for the six months ended June 30, 2024. The increase was primarily attributable to the recognition of $1,778,000 in cost of land sales, incurred to satisfy the performance obligation associated with a land sale transaction executed in 2022. Additionally, this segment incurred lower general and administrative costs of $368,000, partially offset by an increase in other expenses of $158,000 driven by higher depreciation expensesdue to the Terra Vista assets being placed in service during the second quarter.

Current wording

•Commercial/industrial real estate development segment expenses were $7,531,000 for the nine months ended September 30, 2025, an increase of $1,526,000, or 25%, from $6,005,000 for the nine months ended September 30, 2024. The increase was primarily attributable to the recognition of$1,778,000 in cost of land sales, incurred to satisfy the performance obligation associated with Nestlé land sale transaction executed in 2022. Additionally, this segment incurred lower selling, general and administrative costs of $488,000, partially offset by an increase in depreciation expenses of $421,000 driven by Terra Vista assets being placed in service starting in the second quarter.

Previous wording

During the quarter ended June 30, 2025, vacancy rates in the Inland Empire climbed by 50 basis points to 6.8% as negative absorption and new supply in the second quarter 2025. Average asking rents continued to decline to $1.08. The San Fernando Valley and Ventura County industrial markets continued to experience tight conditions as demand remained positive. Vacancy held steady at 2.2% in San Fernando Valley and rose 40 basis points to 2.5% in Ventura County. Average asking rent experienced a slight quarter-over-quarter decline in the San Fernando Valley, dropping $0.06 to $1.47, while Ventura posted an increase to $1.30. See below for the vacancy rates and average asking rent of Inland Empire, San Fernando Valley and Ventura County.

Current wording

During the quarter ended September 30, 2025, vacancy rates in the Inland Empire climbed by 70 basis points to 7.5% as net absorption remains in the negative at approximately 22,000 square feet. Average monthly asking rents continued to decline to $1.05. The San Fernando Valley and Ventura County industrial markets continued to experience tight conditions as demand remained positive. Vacancy rose 130 basis points to 3.5% in San Fernando Valley and rose 60 basis points to 3.1% in Ventura County. Average asking rent edged up in the third quarter in the San Fernando Valley, increasing $0.01 to $1.48, while Ventura posted an increase to $1.32.

Previous wording

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 of commercial and industrial properties. Industrial land prices have increased at TRCC since 2000 from $0.57 per square foot to $9.00 per square foot which is a 1,479% increase, demonstrating the consistent increase in demand and maturation of TRCC. Industrial rents have increased 236% over the past eight-year period starting at $0.25 per square foot in 2017.

Current wording

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 of commercial and industrial properties. Industrial land prices have increased at TRCC since 2000 from $0.57 per square foot to $9.00 per square foot which is a 1,479% increase, demonstrating the consistent increase in demand and maturation of TRCC. Industrial rents have increased 249% over the past eight-year period starting at $0.25 per square foot in 2017.

Previous wording

Resort/residential real estate development segment expenses were $690,000 for the six months of 2025, a decrease of $1,298,000, or 65%, from $1,988,000 for the six months of 2024. The decrease was primarily attributable to additional expenses of $1,250,000 in 2024 related to professional service fees and planning costs related to capital efforts tied to the Company's master planned communities. The expenses consisted of general and administrative expenses of $630,000, professional services of $36,000, and other expenses of $24,000 for the six months ended June 30, 2025. The expenses consisted of general and administrative expenses of $669,000, professional services of $1,296,000, and other expenses of $23,000 for the six months ended June 30, 2024.

Current wording

Resort/residential real estate development segment expenses were $1,008,000 for the nine months of 2025, a decrease of $1,308,000, or 56%, from $2,316,000 for the nine months of 2024. The decrease was primarily attributable to additional expenses of $1,250,000 in 2024 related to professional service fees and planning costs related to capital efforts tied to the Company's master planned communities.

Previous wording

•Farming segment revenues were $2,163,000 for the first six months of 2025, an increase of $1,156,000, or 115%, from $1,007,000 during the same period in 2024. The increase was primarily attributed to $1,157,000 in almond carryover crop revenues in the current period. Approximately 727,000 pounds of almonds were sold during the six months ended June 30, 2025, whereas 381,000 almond sales occurred in the comparable period in 2024.

Current wording

•Farming segment revenues were $6,498,000 for the first nine months of 2025, an increase of $2,249,000, or 53%, from $4,249,000 during the same period in 2024. The increase was primarily attributed to an increase of $1,169,000 in almond crop revenues in the current period andhigher wine grape yields, which contributed an additional $1,147,000 in sales. Approximately 1,310,000 pounds of almonds were sold during the nine months ended September 30, 2025, compared to 1,045,000 pounds during the same period in 2024.

Previous wording

Our almond, pistachio, and wine grape crop sales are subject to significant seasonality, with the majority of sales typically occurring during the third and fourth quarters of the year. Almonds and pistachios are generally sold at prevailing market prices, while wine grapes are sold under contracted pricing arrangements with wineries. It is too early in the production cycle for 2025 to have a subjective estimate of potential production for almonds, grapes, and pistachios. In 2025, the Company's crop segmentation in its farming division will include the planting of an olive orchard, diversifying the Company's commodity products and best positioning the Company for market changes.

Current wording

Our almond, pistachio, and wine grape crop sales are subject to significant seasonality, with the majority of sales typically occurring during the third and fourth quarters of the year. Almonds and pistachios are generally sold at prevailing market prices, while wine grapes are sold under contracted pricing arrangements with wineries. In 2025, the Company's crop segmentation in its farming division will include the planting of an olive orchard, diversifying the Company's commodity products and best positioning the Company for market changes.

Previous wording

Weather conditions can significantly affect the number of chill hours and chill portions accumulated during dormancy, both of which are critical to tree and vine development. In early 2025, California experienced an unusually warm winter, resulting in insufficient chill accumulation across major agricultural regions. Pistachio orchards were particularly impacted, and this deficiency may contribute to reduced yields. Additionally, late winter and early spring rainstorms disrupted standard field operations, including the timely application of pesticides and dormancy-breaking treatments. These weather-related delays may affect crop management schedules and overall productivity; however, the extent of the impact on 2025 production levels will not be fully known until the summer growing season progresses.

Current wording

Weather conditions can significantly affect the number of chill hours and chill portions accumulated during dormancy, both of which are critical to tree and vine development. In early 2025, California experienced an unusually warm winter, resulting in insufficient chill accumulation across major agricultural regions. Pistachio orchards were particularly impacted, and this deficiency contributed to slightly reduced yields. Additionally, late winter and early spring rainstorms disrupted standard field operations, including the timely application of pesticides and dormancy-breaking treatments. These weather-related delays did not have an effect on crop management schedules and overall productivity.

Previous wording

•Ranch operations revenues totaled $1,083,000 for the three months ended June 30, 2025, representing an increase of $118,000, or 12%, compared to $965,000 for the same period in 2024. The increase was primarily driven by a $101,000 rise in game management and other revenues, largely attributable to higher guided hunt revenues and increased revenue recognized from the High Desert Hunt Club.

Current wording

•Ranch operations revenues totaled $1,338,000 for the three months ended September 30, 2025, representing a decrease of $108,000, or 7%, compared to $1,446,000 for the same period in 2024. The decrease was primarily driven by a $83,000 decrease in rent range revenues due to decrease cattle and a $25,000 decrease in game management and other revenues, largely attributable to timing of guided hunt revenues.

Previous wording

•Ranch operations revenues totaled $2,387,000 for the first six months of 2025, an increase of $315,000, or 15%, compared to $2,072,000 for the same period in 2024. The increase was primarily attributable to an increase in game management and other revenue of $267,000, primarily attributedto higher guided hunt revenues and increased revenue recognized from the High Desert Hunt Club.

Current wording

•Ranch operations revenues totaled $3,725,000 for the first nine months of 2025, an increase of $207,000, or 6%, compared to $3,518,000 for the same period in 2024. The increase was primarily attributable to an increase in game management and other revenue of $242,000, primarily attributedto higher guided hunt revenues and increased revenue recognized from the High Desert Hunt Club.

Previous wording

•Ranch operations expenses were $2,608,000 for the first six months of 2025, an increase of $120,000, or 5%, from $2,488,000 for the same period in 2024. This increase was primarily attributable to higher operating expenses of $128,000 mainly associated with additional repairs and maintenance expenses of $62,000 and higher property taxes of $32,000.

Current wording

•Ranch operations expenses were $3,784,000 for the first nine months of 2025, an increase of $73,000, or 2%, from $3,711,000 for the same period in 2024. This increase was primarily attributable to higher operating expenses of $120,000 mainly associated with additional repairs and maintenance expenses of $74,000 and higher property taxes of $53,000 partially offset by lower selling, general and administrative expenses of $48,000 across various categories.

Previous wording

Corporate general and administrative costs were $9,136,000 for the first six months of 2025, an increase of $3,287,000, or 56%, from $5,849,000 for the same period in 2024. The increase was primarily due to the $3,399,000 incurred for the proxy defense related cost mentioned above during the six months ended June 30, 2025. Additionally, the Company incurred an increase of $507,000 in compensation expenses over the comparative period due to a prorated bonus earned by an outgoing executive in connection with his retirement on March 31, 2025. The main components of the 2025 corporate expenses included compensation expenses of $4,607,000 and other expenses of $4,529,000. Other expenses include proxy defense related costs, professional services fees, licenses and fees, and depreciation expenses.

Current wording

Corporate general and administrative costs were $12,004,000 for the first nine months of 2025, an increase of $3,210,000, or 37%, from $8,794,000 for the same period in 2024. The increase was primarily due to the $3,399,000 incurred for the proxy defense expenses related to contested board election during the nine months ended September 30, 2025. The main components of the 2025 corporate expenses included operating costs of $4,627,000 and selling, general and administrative expenses of $7,110,000 and depreciation expense of $267,000.

Previous wording

Total other income was $222,000 for the three months ended June 30, 2025, a decrease of $337,000 from $559,000 for the same period in 2024, primarily due to lower investment income as a result of a decrease in marketable securities balance.

Current wording

Total other income was $168,000 for the three months ended September 30, 2025, a decrease of $291,000 from $459,000 for the same period in 2024, primarily due to lower investment income as a result of a decrease in marketable securities balance.

Previous wording

Total other income was $492,000 for the six months ended June 30, 2025, a decrease of $682,000, from $1,174,000 for the same period in 2024. The decrease was primarily attributable to lower investment income driven by a decrease in marketable securities balance.

Current wording

Total other income was $660,000 for the nine months ended September 30, 2025, a decrease of $973,000, from $1,633,000 for the same period in 2024. The decrease was primarily attributable to lower investment income driven by a decrease in marketable securities balance.

Previous wording

•Equity in earnings was $2,555,000 for the three months ended June 30, 2025, a decrease of $214,000, from $2,769,000 during the same period in 2024. The decrease was primarily attributable to a reduction in equity in earnings recorded for the TA/Petro joint venture of approximately $285,000 driven by a 7% decline in nonfuel gross margins and a 10% increase in operating expense compared to the same period in 2024. Equity in loss from TRCC/Rock Outlet Center LLC joint venture increased by $166,000 compared to the prior period, primarily due to a decrease in contingent rental income resulting from reduced consumer traffic in the first half of 2025, relative to the same period in 2024. Equity in earnings for our TRC-MRC, LLC joint ventures increased due to higher rental rates or rental escalations, except for a decrease in TRC-MRC 4, LLC equity in earnings as a result of an insurance reimbursement in prior year which did not reoccur in 2025.

Current wording

•Equity in earnings was $2,555,000 for the three months ended September 30, 2025, a decrease of $774,000, from $3,329,000 during the same period in 2024. The decrease was primarily attributable to a decrease in equity in earnings recorded for the TA/Petro joint venture of approximately $852,000 driven by a 5.5% decline in fuel gross margin, a 8.8% decline in nonfuel gross margin, an 8% increase in labor expenses and a 5.9% increase in operating expense compared to the same period in 2024. Equity in loss from TRCC/Rock Outlet Center LLC joint venture decreased by $174,000 compared to the prior period, primarily due to the recognition of a property tax refund of $200,000 in the three months ended September 30, 2025. Equity in earnings for all other joint ventures with Majestic Realty Co. remained relatively consistent.

Previous wording

•Equity in earnings was $3,713,000 for the six months ended June 30, 2025, a decrease of $569,000, or 13%, from $4,282,000 during the same period in 2024. The decrease was primarily attributable to a reduction in equity in earnings recorded for the TA/Petro joint venture of approximately $595,000 driven by a 7.6% decline in nonfuel gross margins and a 10.9% increase in operating expense compared to the same period in 2024. Equity in loss from TRCC/Rock Outlet Center LLC joint venture increased by $235,000 compared to the prior period, due to a decrease in contingent rental income resulting from reduced consumer traffic in the first half of 2025, relative to the same period in 2024. Equity in earnings for TRC-MRC 4, LLC decreased as a result of an insurance reimbursement in prior year, and for TRC-MRC 5, LLC decreased due to higher property taxes compared with the prior year period.

Current wording

•Equity in earnings was $6,268,000 for the nine months ended September 30, 2025, a decrease of $1,343,000, or 18%, from $7,611,000 during the same period in 2024. The decrease was primarily attributable to a decrease in equity in earnings recorded for the TA/Petro joint venture of approximately $1,447,000 driven by a 8.4% decline in nonfuel gross margins and a 8.2% increase in operating expense compared to the same period in 2024. Equity in loss from TRCC/Rock Outlet Center LLC joint venture increased by $61,000 compared to the prior period, due to a decrease in contingent rental income resulting from reduced consumer traffic in the first half of 2025, relative to the same period in 2024. Equity in earnings for TRC-MRC 1, LLC increased due to higher revenue recognized from the lease with a new tenant at a higher lease rate beginning May 2024. Equity in earnings for TRC-MRC 4, LLC decreased as a result of an insurance reimbursement in prior year which did not reoccur in 2025, and for TRC-MRC 5, LLC decreased due to higher property taxes compared with the prior year period.

Previous wording

For the six months ended June 30, 2025, we had an income tax benefit of $837,000 compared to $2,118,000 for the six months ended June 30, 2024. The effective tax rates approximated 21% and 102% for the six months ended June 30, 2025 and 2024, respectively. As of June 30, 2025, the Company had income taxes receivable of $2,435,000. We classify interest and penalties incurred on tax payments as income tax expenses.

Current wording

For the nine months ended September 30, 2025, we had an income tax benefit of $1,809,000 compared to $286,000 for the nine months ended September 30, 2024. The effective tax rates approximated 55% and 14% for the nine months ended September 30, 2025 and 2024, respectively. As of September 30, 2025, the Company had income taxes receivable of $3,458,000. We classify interest and penalties incurred on tax payments as income tax expenses. Our effective tax rates differ from statutory rates primarily because of permanent differences related to Internal Revenue Code Section 162(m). The Internal Revenue Code Section 162(m) compensation deduction limitations occurred due to changes in tax law arising from the 2017 Tax Cuts and Jobs Act.

Previous wording

Our cash, cash equivalents and marketable securities totaled approximately $20,054,000 as of June 30, 2025, a decrease of $33,654,000 from $53,708,000 as of December 31, 2024, due primarily to funding of construction on the Terra Vista at Tejon multi-family apartment community.

Current wording

Our cash, cash equivalents and marketable securities totaled approximately $21,044,000 as of September 30, 2025, a decrease of $32,664,000 from $53,708,000 as of December 31, 2024, due primarily to funding of construction on the Terra Vista at Tejon multi-family apartment community.

Previous wording

The following table shows our cash flow activities for the six months ended June 30,

Current wording

The following table shows our cash flow activities for the nine months ended September 30,

Previous wording

During the first six months of 2025, our operations used $1,726,000, largely attributable to cash used to settle our current liabilities balance including liability related to stock compensation awards of $1,831,000.

Current wording

During the first nine months of 2025, our operations used $4,106,000, largely attributable to cash used to settle our current liabilities balance including liability related to stock compensation awards of $1,831,000.

Previous wording

During the first six months of 2025, investing activities used $49,551,000. The increase in investing activities is primarily related to the construction of Terra Vista at Tejon, and we expect the costs to continue throughout 2025 for the first phase of this multi-family project.

Current wording

During the first nine months of 2025, investing activities used $56,100,000. The increase in investing activities is primarily related to the construction of Terra Vista at Tejon for the first phase of this multi-family project.

Previous wording

We made capital expenditures, inclusive of capitalized interest and payroll (exclusive of stock compensation), of $37,146,000 for real estate development. At TRCC, we spent $22,850,000 of construction cost on Terra Visa at Tejon and $5,663,000 on infrastructure improvements at TRCC-East. We also spent $1,469,000 and $1,073,000 on permitting efforts for MV and Grapevine, respectively, and $1,863,000 on litigation defense for Centennial. Within our farming segment, we spent $3,752,000, which included cultural costs for orchards currently classified as under development and replacement of machinery and equipment. Additionally, we used $9,519,000 to acquire water assets. We had marketable securities of $23,655,000 that matured, and we reinvested $26,652,000. Lastly, we received proceeds of $310,000 from joint venture distributions.

Current wording

We made capital expenditures, inclusive of capitalized interest and payroll (exclusive of stock compensation), of $49,393,000 for real estate development, reflected as follows: At TRCC, we spent $25,291,000 of construction cost on Terra Visa at Tejon and $6,014,000 on infrastructure improvements at TRCC-East. We also spent $2,194,000 and $1,652,000 on permitting efforts for MV and Grapevine, respectively, and $2,554,000 on litigation defense for Centennial. Within our farming segment, we spent $3,752,000, which included cultural costs for orchards currently classified as under development and replacement of machinery and equipment. Additionally, we used $8,926,000 to acquire water assets. We had marketable securities of $29,508,000 that matured, and we reinvested $32,387,000. Lastly, we received proceeds of $773,000 from joint venture distributions.

Previous wording

During the first six months of 2024, investing activities used $1,643,000. We made capital expenditures, inclusive of capitalized interest and payroll (exclusive of stock compensation), of $22,077,000, which included predevelopment activities for our master planned communities, $1,256,000 consisting of permitting efforts for MV, $696,000 consisting of permitting efforts for Grapevine, and costs related to litigation defense for Centennial of $2,148,000. At TRCC, we spent $6,768,000 ofconstruction cost on Terra Visa at Tejon and $6,998,000 on infrastructure improvements at TRCC-East. Within our farming segment, we spent $3,317,000, which included cultural costs for orchards currently classified as under development and replacement of machinery and equipment. Additionally, we used $5,066,000 to acquire water assets. We had marketable securities of $76,869,000 that matured, and we reinvested $60,500,000. Lastly, we received proceeds of $5,811,000 from joint venture distributions and reimbursements of $3,309,000 from a Community Facilities District.

Current wording

We made capital expenditures, inclusive of capitalized interest and payroll (exclusive of stock compensation), of $40,995,000, which included predevelopment activities for our master planned communities; $2,088,000 consisting of permitting efforts for MV; $1,014,000 consisting of permitting efforts for Grapevine; and costs related to litigation defense for Centennial of $3,110,000. At TRCC, we spent $16,750,000 of construction cost on Terra Visa at Tejon and $12,341,000 on infrastructure improvements at TRCC-East. Within our farming segment, we spent $4,531,000, which included cultural costs for orchards currently classified as under development and replacement of machinery and equipment. Additionally, we used $4,616,000 to acquire water assets. We had marketable securities of $85,769,000 that matured, and we reinvested $66,640,000. Lastly, we received proceeds of $5,783,000 from joint venture distributions and reimbursements of $3,309,000 from a Community Facilities District.

Previous wording

Our estimated capital investment, inclusive of capitalized interest and payroll, for the remainder of 2025 is primarily related to our real estate projects. These estimated investments include approximately $6,807,000 of construction costs for the Terra Vista at Tejon multi-family project phase 1 development and $5,000,000 of infrastructure development at TRCC-East to support the continued commercial retail and industrial development, water treatment system improvements, and expansion of the wastewater treatment plant for future anticipated absorption. We also expect to invest up to $4,186,000 for land planning, litigation/appeals, federal and state agency permitting activities, and development activities at MV, Centennial, and Grapevine during the remainder of 2025.

Current wording

Our estimated capital investment, inclusive of capitalized interest and payroll, for the remainder of 2025 is primarily related to our real estate projects. These estimated investments include approximately $4,366,000 of construction costs for the Terra Vista at Tejon multi-family project phase 1 development and $4,649,000 of infrastructure development at TRCC-East to support the continued commercial retail and industrial development, water treatment system improvements, and expansion of the wastewater treatment plant for future anticipated absorption. We also expect to invest up to $2,191,000 for land planning, litigation/appeals, federal and state agency permitting activities, and development activities at MV, Centennial, and Grapevine during the remainder of 2025.

Previous wording

We capitalize 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 interest cost has been incurred. Capitalized interest for the six months ended June 30, 2025 and 2024, was $1,961,000 and $2,009,000, respectively, and is classified within real estate development. We also capitalized payroll costs related to development, pre-construction, and construction projects, which aggregated $1,098,000 and $1,493,000 for the six months ended June 30, 2025 and 2024, respectively. Expenditures for repairs and maintenance are expensed as incurred.

Current wording

We capitalize 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 interest cost has been incurred. Capitalized interest for the nine months ended September 30, 2025 and 2024, was $3,529,000 and $3,175,000, respectively, and is classified within real estate development. We also capitalized payroll costs related to development, pre-construction, and construction projects, which aggregated $1,666,000 and $2,179,000 for the nine months ended September 30, 2025 and 2024, respectively. Expenditures for repairs and maintenance are expensed as incurred.

Previous wording

During the first six months of 2025, financing activities provided $14,510,000, which was attributable to borrowings on the line of credit of $15,000,000 to fund construction projects and other ongoing development such as Terra Vista and TRCC infrastructure, partially offset by the tax payments on vested share grants of $490,000.

Current wording

During the first nine months of 2025, financing activities provided $24,510,000, which was attributable to borrowings on the line of credit of $25,000,000 to fund construction projects and other ongoing development such as Terra Vista and TRCC infrastructure, partially offset by the tax payments on vested share grants of $490,000.

Previous wording

During the first six months of 2024, financing activities provided $3,794,000, which was attributable to borrowings on the line of credit of $4,000,000, partially offset by the tax payments on vested share grants of $206,000.

Current wording

During the first nine months of 2024, financing activities provided $11,794,000, which was attributable to borrowings on the line of credit of $12,000,000 to fund construction projects and other ongoing development such as Terra Vista and TRCC infrastructure, partially offset by the tax payments on vested share grants of $206,000.

Previous wording

At June 30, 2025, total capitalization at book value was $568,833,000, consisting of $81,942,000 of debt and $486,891,000 of equity, resulting in a debt-to-total-capitalization ratio of approximately 14.4%.

Current wording

At September 30, 2025, total capitalization at book value was $580,532,000, consisting of $91,942,000 of debt and $488,590,000 of equity, resulting in a debt-to-total-capitalization ratio of approximately 15.8%.

Previous wording

We had a strong liquidity position at June 30, 2025 with $20,054,000 in cash and securities and $78,058,000 available on our RLC to meet any short-term liquidity needs. 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.

Current wording

We had a strong liquidity position at September 30, 2025 with $21,044,000 in cash and securities and $68,058,000 available on our RLC to meet any short-term liquidity needs. 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.

Previous wording

As of June 30, 2025, aggregate outstanding debt of unconsolidated joint ventures was $218,895,000; $20,384,000 of this debt was attributable to the loan for TRCC/Rock Outlet Center LLC joint venture. This loan was 100% guaranteed at June 30, 2025. All other outstanding debt attributed to our joint ventures have met their respective debt covenants, and hence were not subject to an effective guarantee at June 30, 2025. We do not provide a guarantee on the $11,412,000 of debt related to our joint venture with TA/Petro.

Current wording

As of September 30, 2025, aggregate outstanding debt of unconsolidated joint ventures was $217,569,000; $20,271,000 of this debt was attributable to the loan for TRCC/Rock Outlet Center LLC joint venture. This loan was 100% guaranteed at September 30, 2025. All other outstanding debt attributed to our joint ventures have met their respective debt covenants, and hence were not subject to an effective guarantee at September 30, 2025. We do not provide a guarantee on the $11,221,000 of debt related to our joint venture with TA/Petro.

Previous wording

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. We use Adjusted EBITDA 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. In addition, the Company excludes other items impacting comparability to provide a clearer understanding of its core operating performance. 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 (loss) income or cash flows from operations as defined by GAAP. Further, our computation of EBITDA and Adjusted EBITDA may not be comparable to similar measures reported by other companies.

Current wording

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. We use Adjusted EBITDA 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 and other items impacting comparability. 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. In addition, the Company excludes other items impacting comparability to provide a clearer understanding of its core operating performance. 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 (loss) income or cash flows from operations as defined by GAAP. Further, our computation of EBITDA and Adjusted EBITDA may not be comparable to similar measures reported by other companies.