TEJON RANCH CO
For the period ended Sep 30, 2026. Filed Nov 5, 2026.
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A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Sep 30, 2026 · Filed Nov 5, 2026
TRC$17.04+1.5%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2026-06-30; filed 2026-08-06.
0001628280-26-054146
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2026-09-30; filed 2026-11-05.
0001628280-26-070884
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 182 previous paragraphs and 191 current paragraphs.
92 unchanged; 59 reworded; 40 added; 31 removed; 0 previous and 0 current paragraphs rearranged.
Tables are not compared: 19 previous and 20 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (40)
Current report
Third Quarter Summary
Current report
For the three months ended September 30, 2026, net income attributable to common stockholders was $3,300,000 compared with $1,670,000 for the three months ended September 30, 2025, an increase of $1,630,000. The increase was primarily attributed to a $4,397,000 improvement in operating result, from an operating loss of $2,024,000 in the prior period to operating income of $2,373,000 in the current period. The improvement was primarily driven by the farming segment, where revenues increased $8,293,000, reflecting higher crop sales, $2,581,000 of pricing adjustments related to prior-year pistachio sales and $3,897,000 of crop insurance proceeds. As a result, farming segment operating results improved from a loss of $1,027,000 in the prior period to income of $1,444,000 in the current period. Multifamily revenues increased $743,000 as Terra Vista at Tejon continued its lease-up activities, while mineral resources revenues increased $791,000, primarily due to higher rock aggregate royalties and water sales. Ranch operations and commercial/industrial revenues increased $515,000 and $301,000, respectively.
Current report
Corporate expenses decreased $626,000 primarily due to share-based compensation adjustments of $300,000 in 2026 and $360,000 in 2025, related to the impact of forfeited awards in both periods. Excluding these adjustments, corporate expenses decreased $1,286,000, or 39.8%, from $3,228,000 to $1,942,000.
Current report
These improvements were partially offset by a $223,000 decrease in equity in earnings of unconsolidated joint ventures, lower investment income, and a $2,409,000 increase in income taxes, from an income tax benefit of $972,000 in the prior-year quarter to income tax expense of $1,437,000 in the current period.
Current report
Year-to-Date Summary
Current report
For the nine months ended September 30, 2026, net income attributable to common stockholders was $6,086,000 compared with a net loss attributable to common stockholders of $1,506,000 for the nine months ended September 30, 2025, an improvement of $7,592,000. The improvement was primarily attributed to an $11,835,000 increase in operating results, from an operating loss of $10,245,000 in the prior-year period to operating income of $1,590,000 in the current-year period.
Current report
Corporate expenses decreased $5,037,000, primarily reflecting the non recurrence of $3,399,000 of shareholder activism advisory costs and costs associated with the contested election incurred during 2025, together with lower consulting compensation and other corporate administrative expenses.
Current report
Farming revenues increased $7,775,000, primarily reflecting $6,915,000 of pistachio revenues, including $2,581,000 of pricing adjustments related to prior-year crop sales, $3,897,000 of crop insurance proceeds and higher wine grape revenues. These increases contributed to a $2,723,000 reduction in the farming segment's operating loss compared to the prior-year period. Commercial/industrial revenues included a $6,854,000 land sale to TRC-DP1, LLC, which generated gross profit of approximately $2,000,000 compared with $600,000 of gross profit from land sales in the prior-year period. Multifamily revenues increased $2,281,000 as Terra Vista at Tejon continued its lease-up activities, while mineral resources revenues increased $2,008,000, primarily due to higher water sales and rock aggregate royalties. These improvements were partially offset by a $4,148,000 increase in income tax expense, from an income tax benefit of $1,809,000 in the prior-year period to income tax expense of $2,339,000 in the current period, and by lower investment income.
Current report
•Commercial/industrial real estate development segment revenues were $3,244,000 for the three months ended September 30, 2026, compared to $2,943,000 for the same period in 2025, an increase of $301,000, or 10.2%. There were no land sales in either quarter. The increase was primarily attributable to a $182,000 increase in Pastoria Energy Facility revenues, reflecting the absence of a favorable spark spread in the prior-year quarter, and a $116,000 increase in TRCC leasing revenues. Pastoria revenues are subject to fluctuations in electricity demand and market conditions, including weather-related factors that influence spark spreads.
Current report
•Commercial/industrial real estate development segment expenses were $1,527,000 for the three months ended September 30, 2026, compared to $1,498,000 for the same period in 2025, an increase of $29,000, or 1.9%. Selling, general and administrative expenses increased $93,000, or 13.5%, primarily due to lower capitalization of labor costs following the completion of construction at Terra Vista at Tejon. Operating expenses decreased $53,000, or 7.5%, and depreciation and amortization expenses decreased $11,000.
Current report
•Operating income from commercial/industrial (segment revenues less segment expenses, which included no land sale activity in either quarter) increased $272,000, or 18.8%, to $1,717,000 ,primarily reflecting higher revenues from Pastoria Energy Facility and TRCC leasing activities, together with lower operating and depreciation and amortization expenses.
Current report
•Commercial/industrial real estate development segment expenses were $9,417,000 for the nine months ended September 30, 2026, compared to $6,369,000 for the same period in 2025, an increase of $3,048,000, or 48%. The increase was primarily attributable to a $3,081,000 increase in cost of sales of land associated with the land sales described above, and a $117,000 increase in operating expenses, partially offset by a $127,000 decrease in selling, general and administrative expenses and a $23,000 decrease in depreciation and amortization expense.
Current report
•Excluding cost of land sales, segment expenses decreased $33,000, or 0.7%. Selling, general and administrative expenses decreased $127,000, or 5.2%, and depreciation and amortization expense decreased $23,000, partially offset by a $117,000, or 6.4%, increase in operating expenses. The increase in operating expenses was primarily attributable to personnel costs that were capitalized in the prior-year period in connection with the development of Terra Vista at Tejon but expensed in 2026 following the project's completion. Operating income from recurring operations increased $432,000, or 11.3%, to $4,252,000.
Current report
TRCC Competitive Positioning and Industrial Market Outlook
Current report
During the quarter ended September 30, 2026, industrial market conditions in Southern California continued to gain momentum. In the Inland Empire, vacancy remained unchanged at 7.8%, while net absorption totaled approximately 876,000 square feet during the quarter continuing a record absorption year. Average asking rents moderated as new supply came online, reported at $0.97 per square foot from $0.99 per square foot in the prior quarter. Gross leasing and sales activity totaled 9.1 million square feet, also on pace for the strongest year on record.
Current report
•The Company anticipates continued revenue growth as the property progresses toward stabilization. Operating margins are also expected to benefit from higher occupancy as fixed operating costs are spread across a larger tenant base, although the timing and extent of these improvements will depend on leasing activity and market conditions.
Current report
•Multifamily revenues increased to $2,477,000 for the nine months ended September 30, 2026, compared with $196,000 in the prior-year period, primarily reflecting higher occupancy as leasing activity progressed following the property's placement in service during the second quarter of 2025.
Current report
•The Company anticipates continued revenue growth as the property progresses toward stabilization. Operating margins are also expected to benefit from higher occupancy as fixed operating costs are spread across a larger tenant base, although the timing and extent of these improvements will depend on leasing activity and market conditions.
Current report
Resort/Residential real estate development segment expenses were $427,000 for the three months ended September 30, 2026, an increase of $109,000 from $318,000 for the three months ended September 30, 2025. The increase reflected modest changes across several expense categories, with no single category accounting for a significant portion of the increase.
Current report
•Mineral resources segment revenues were $3,963,000 for the three months ended September 30, 2026, an increase of $791,000, or 24.9%, from $3,172,000 in the prior-year period. The increase was primarily driven by higher rock aggregate sales of $526,000 reflecting increased demand, sales volumes and average realized prices. Water sales increased $188,000 while cement and oil and gas revenues increased $40,000 and $37,000, respectively, primarily reflecting higher sales volumes and, in the case of oil and gas, higher commodity prices.
Current report
•Mineral resources segment expenses were $2,308,000 for the three months ended September 30, 2026, an increase of $187,000, or 8.8%, compared with $2,121,000 in the prior-year period. The increase was primarily attributed to higher operating expenses of $108,000 and increased water costs of sales of $73,000, consistent with higher water sales activity. Other expense categories remained relatively unchanged.
Current report
•Mineral resources segment expenses were $5,686,000 for the nine months ended September 30, 2026, an increase of $690,000, or 13.8%, compared with $4,996,000 for the prior-year period. The increase primarily reflected higher costs of water sales of $632,000, consistent with the increased water sales activity, and higher operating expenses of $168,000, partially offset by a $110,000 decrease in selling, general and administrative expenses.
Current report
•Farming segment revenues totaled $12,628,000 for the three months ended September 30, 2026, an increase of $8,293,000, or 191.3%, compared to $4,335,000 for the prior-year period. The increase was primarily attributable to $6,591,000 of pistachio revenues, including $2,581,000 of pricing adjustments on prior-year crop sales and $3,437,000 of crop insurance proceeds, compared to no pistachio revenues in the prior-year quarter. Wine grape revenues increased $1,121,000, reflecting an accelerated harvest due to warmer weather conditions during the quarter, as well as $460,000 of crop insurance proceeds. Almond revenues increased $484,000, reflecting higher average realized prices.
Current report
•Direct farming expenses, excluding water holding costs, were $11,050,000 for the three months ended September 30, 2026, compared to $4,706,000 for the prior-year period, an increase of $6,344,000, or 134.8%. The increase primarily reflected higher costs of sales of $5,742,000, including the recognition of current-year crop growing costs associated with insured crop losses and crop sales. Selling, general and administrative expenses increased $387,000, primarily due to higher irrigation water costs purchased, while depreciation and amortization expense increased $215,000. Water holding costs decreased $522,000 to $134,000. Despite the increase in reported revenues, abnormally warm spring weather and unfavorable growing conditions adversely affected current-year crop yields, with industry reports also reflecting reduced crop yields across the region. Accordingly, the revenue increase was not indicative of improved current-year crop production. Total farming segment expenses were $11,184,000 for the three months ended September 30, 2026, compared to $5,362,000 in the prior-year period.
Current report
•Farming segment revenues totaled $14,273,000 for the nine months ended September 30, 2026, an increase of $7,775,000, or 120%, compared with $6,498,000 for the prior-year period. The increase was primarily attributable to pistachio revenues, including prior-year pricing adjustments and crop insurance proceeds, and higher wine grape revenues due to timing of harvest when compared to prior-year period, partially offset by a $387,000, or 11.3%, decrease in almond revenues due to lower sales of almond carryover crop.
Current report
•Direct farming expenses were $12,554,000 for the nine months ended September 30, 2026, compared to $7,235,000 for the prior-year period, an increase of $5,319,000, or 73.5%. The increase primarily reflected higher costs of sales of $4,784,000, or 85.9%, including $4,019,000 of pistachio costs and a $1,339,000 increase in wine grape costs, partially offset by a $572,000 decrease in almond costs. Selling, general and administrative expenses increased $413,000, while depreciation and amortization increased $122,000, or 8.4%. Water holding costs decreased $267,000, or 12.3% to $1,905,000, resulting in total farming segment expenses of $14,459,000 compared with $9,407,000 in the prior-year period.
Current report
•Operating income from farming before fixed water obligations was $1,719,000 for the nine months ended September 30, 2026, compared to an operating loss of $737,000 for the prior-year period. The $2,456,000 improvement primarily reflected higher revenues, partially offset by an increase in direct farming expenses.
Current report
•Ranch operations revenues totaled $1,853,000 for the three months ended September 30, 2026, an increase of $515,000, or 38.5%, compared with $1,338,000 in the prior-year period. The increase was primarily attributable to higher game management revenues of $226,000, reflecting increased guided hunting and membership activity, higher grazing revenues of $168,000, primarily due to higher cattle prices, and an increase of $126,000 in other ranch revenues, partially offset by decreases in other revenue categories.
Current report
•Ranch operations expenses were $1,324,000 for the three months ended September 30, 2026, an increase of $148,000, or 13%, compared with $1,176,000 for the prior-year period. The increase primarily reflected higher operating expenses of $83,000 and selling, general and administrative expenses of $68,000, while depreciation and amortization remained relatively unchanged.
Current report
•Ranch operations revenues totaled $4,670,000 for the nine months ended September 30, 2026, an increase of $945,000, or 25%, compared with $3,725,000 for the prior-year period. The increase was primarily driven by higher grazing revenues of $367,000, reflecting favorable cattle prices, increased game management revenues of $348,000, reflecting higher guided hunting and membership activity, and an increase in other ranch revenues of $240,000.
Current report
•Ranch operations expenses were $3,830,000 for the nine months ended September 30, 2026, an increase of $46,000, or 1.2%, compared with $3,784,000 for the prior-year period. Expenses remained relatively stable, with modest increases in operating and selling, general and administrative expenses, partially offset by lower depreciation expense.
Current report
The following table summarizes the principal components of the changes in corporate general and administrative expenses for the periods presented (in thousands):
Current report
For the three-month period, corporate expenses decreased $626,000, or 21.8%, to $2,242,000, compared to $2,868,000 for the same period in 2025. The comparison was impacted by share-based compensation adjustments of $300,000 in 2026 and $360,000 in 2025, related to the impact of forfeited awards in the prior-year period. Excluding these adjustments, corporate expenses decreased $1,286,000, or 39.8%, from $3,228,000 to $1,942,000. The decrease was primarily attributable to $539,000 in lower shareholder-related expenses, $255,000 in reduced costs associated with the former Chief Executive Officer and $230,000 in lower salary expenses. These reductions were partially offset by the timing of audit fees and higher legal expenses.
Current report
For the nine months ended September 30, 2026, corporate expenses decreased $5,037,000, or 42.0%, to $6,967,000, compared to $12,004,000 for the same period in 2025. The decrease was primarily attributable to $3,399,000 of non-recurring charges incurred in the prior-year period. Excluding these charges and the impact of share-based compensation adjustments, corporate expenses decreased $1,830,000, or 22.4%, primarily reflecting lower compensation and other corporate expenses.
Current report
Other Reconciling Items:
Current report
Seasonality and Variability of Results
Current report
During the first nine months of 2026, investing activities used $14,131,000 compared with $56,100,000 in the prior-year period. The decrease primarily reflected lower real estate development expenditures following the completion of construction at Terra Vista at Tejon, reduced investments in water assets, and net proceeds from maturities and purchases of marketable securities. Investing activities also included $3,689,000 of distributions of capital from unconsolidated joint ventures, compared with $773,000 in the prior-year period.
Current report
During the first nine months of 2025, investing activities used $56,100,000, primarily reflecting expenditures related to the construction of the first phase of Terra Vista at Tejon, along with investments in real estate development, water assets and other capital improvements.
Current report
During the first nine months of 2026, financing activities used $547,000, which was primarily attributable to borrowings on the line of credit of $9,000,000 and $8,500,000 of repayments under the Company's revolving line of credit, resulting in net borrowings of $500,000. Financing activities also included $1,047,000 of tax payments associated with vested stock grants.
Current report
During the first nine months of 2025, financing activities provided $24,510,000, primarily reflecting $25,000,000 of borrowings under the Company's revolving line of credit to fund construction and ongoing development activities, partially offset by $490,000 of tax payments associated with vested stock grants.
Removed paragraphs (31)
Previous report
For the three months ended June 30, 2026, we had net income attributable to common stockholders of $2,635,000 compared to a net loss attributable to common stockholders of $1,712,000 for the three months ended June 30, 2025. On the revenue side, the primary driver of this $4,347,000 increase in net income was a land sale related to the TRC-DP1, LLC, in addition to higher mineral resources revenues of $279,000 attributed to higher water sales revenue. On the expense side, corporate expenses were $2,061,000 lower than prior period, due to lower compensation expense and the non-recurring nature of shareholders' activism expense incurred in 2025. The above mentioned factors were partially offset by a $408,000 increase in income tax expense, primarily due to a change from a $435,000 income tax expense in the prior period to a $843,000 income tax expense in the current quarter.
Previous report
For the six months ended June 30, 2026, we had net income attributable to common stockholders of $2,786,000 compared to a net loss attributable to common stockholders of $3,176,000 for the six months ended June 30, 2025. On the revenue side, the primary driver of this $5,962,000 increase in net income was the land sale, increased revenue from our multifamily segment, and higher mineral resources revenues of $1,217,000 attributed to higher water sales revenue. On the expense side, corporate expenses were $4,411,000 lower than prior period, due to lower compensation expense and the non-recurring nature of shareholders' activism expense incurred in 2025. The above mentioned factors were partially offset by a $1,739,000 increase in income tax expense, primarily due to improved operating results.
Previous report
•Commercial/industrial real estate development segment expenses were $6,212,000 for the three months ended June 30, 2026, compared to $3,215,000 for the same period in 2025, an increase of $2,997,000, or 93.2%. The increase was primarily attributable to higher cost of land sales associated with the current-year quarter land sale. Cost of land sales was $4,854,000 during the current-year quarter, compared to $1,778,000 during the prior-year quarter.
Previous report
•Excluding cost of land sales, segment expenses decreased $79,000, or 5.5%. Selling, general and administrative expenses decreased $162,000, or 21.0%, primarily due to the reversal of previously recognized stock-based compensation expense during the quarter, which is not indicative of ongoing operating expense levels. Depreciation and amortization expense decreased $8,000. These decreases were partially offset by $91,000, or 16.0%, increase in operating expenses, primarily attributable to professional services related to efforts for obtaining additional financing to fund future infrastructure development at our commerce center.
Previous report
•Commercial/industrial real estate development segment revenues were $12,425,000 for the six months ended June 30, 2026, compared to $7,846,000 for the same period in 2025, an increase of $4,579,000, or 58.4%. The increase was primarily attributable to the second-quarter land sale discussed above. During the six months ended June 30, 2026, the Company completed a $6,854,000 land sale in connection with the TRC-DP1, LLC, compared to land sales of $2,373,000 during the prior-year period.
Previous report
•Excluding land sales, revenues from recurring operations increased $98,000, or 1.8%, to $5.6 million. The increase was primarily attributable to higher TRCC leasing revenues of $68,000, increased Pastoria Energy Facility revenues of $57,000, higher communication lease revenues of $53,000, and an increase in TRCC management fees and reimbursements of $17,000, partially offset by decreases in commercial lease revenues of $58,000 and landscaping and other services revenues of $39,000. Operating income from recurring operations increased approximately $159,000, or 6.7%, reflecting the increase in recurring revenues and continued expense management.
Previous report
•Commercial/industrial real estate development segment expenses were $7,890,000 for the six months ended June 30, 2026, compared to $4,871,000 for the same period in 2025, an increase of $3,019,000, or 62%. The increase was primarily attributable to higher cost of land sales associated with the second-quarter land sale discussed above. Cost of land sales was $4,854,000 during the current-year period, compared to $1,774,000 during the prior-year period.
Previous report
•Excluding cost of land sales, segment expenses decreased $61,000, or 2.0%. Selling, general and administrative expenses decreased $222,000, or 13.0%, primarily due to the reversal of previously recognized stock-based compensation expense during the second quarter of 2026, which is not indicative of ongoing operating expense levels. Depreciation and amortization expense decreased $12,000. These decreases were partially offset by a $173,000, or 15.0%, increase in operating expenses, primarily attributable to higher landscaping services costs.
Previous report
During the quarter ended June 30, 2026, industrial market conditions in Southern California showed signs of stabilization. In the Inland Empire, vacancy declined 30 basis points to 7.8%, the first quarterly improvement in over a year, while net absorption rebounded to approximately 3.1 million square feet following negative absorption in the prior quarter. Average asking rents continued to soften, declining to approximately $0.99 per square foot. Gross leasing activity reached a record 16.7 million square feet, reflecting renewed tenant activity as rental rates moderated.
Previous report
•The Company expects multifamily revenues to continue increasing as leasing activity progresses and occupancy levels improve. As occupancy increases, the Company also expects operating margins to improve as fixed operating costs are spread across a larger leased base.
Previous report
•Multifamily revenues increased to $1,553,000 for the six months ended June 30, 2026, from $15,000 in the prior-year period, reflecting increased occupancy following the commencement of leasing activities after the property was placed in service during the second quarter of 2025.
Previous report
•The Company expects multifamily revenues to continue increasing as leasing activity progresses and occupancy levels improve. As occupancy increases, the Company also expects operating margins to improve as fixed operating costs are spread across a larger leased base.
Previous report
Resort/residential real estate development segment expenses were $363,000 for the three months ended June 30, 2026, an increase of $59,000 from $304,000 for the three months ended June 30, 2025. The increase was not attributable to any significant fluctuations across individual expense categories.
Previous report
Resort/residential real estate development segment expenses were $719,000 for the six months ended June 30, 2026, compared to $690,000 for the prior-year period. The modest increase of $29,000, or 4%, reflected normal fluctuations across various operating expense categories, with no individual expense category or operational factor materially affecting the year-over-year comparison.
Previous report
•Mineral resources segment expenses were $890,000 for the three months ended June 30, 2026, an increase of $100,000, or 13%, from $790,000 for the prior-year period. The increase was primarily reflected higher costs of water sales of $141,000, consistent with the increase in water sales revenue, and a $51,000 increase in operating expenses, partially offset by a $92,000 decrease in selling, general and administrative expenses. The prior-year period included a net credit to cost of sales of water resulting from a true-up of estimated water delivery costs.
Previous report
•Mineral resources segment revenues were $5,322,000 for the six months ended June 30, 2026, an increase of $1,217,000, or 30%, from $4,105,000 for the prior-year period. The increase was primarily driven by water sales, which increased $823,000, or 56%, due to higher demand. Rock aggregate revenues increased $206,000, or 24%, primarily reflecting higher sales volumes. Cement revenues increased $148,000, or 13%, driven by higher sales volumes, as average realized prices per ton were relatively unchanged. These increases were partially offset by a $12,000, or 3%, decrease in oil and gas revenues, primarily due to lower production volumes and commodity prices.
Previous report
•Mineral resources segment expenses were $3,378,000 for the six months ended June 30, 2026, an increase of $503,000, or 17%, from $2,875,000 for the prior-year period. The increase primarily reflected higher costs of water sales of $558,000, consistent with the increase in related revenues, and a $61,000 increase in operating expenses, partially offset by a $117,000 decrease in selling, general and administrative expenses.
Previous report
•Farming segment revenues totaled $750,000 for the three months ended June 30, 2026, an increase of $143,000, or 24%, compared to $607,000 for the prior-year period. The increase was primarily attributable to pricing adjustments recognized on prior-year pistachio crop sales, partially offset by lower almond revenues. During the second quarter of 2026 and 2025, the Company sold approximately 79,000 pounds and 156,000 pounds, respectively, of almond carryover crop.
Previous report
•Direct farming expenses were $521,000 for the three months ended June 30, 2026, compared to $824,000 for the prior-year period, a decrease of $303,000, or 37%. The decrease was primarily attributable to a $272,000, or 61%, reduction in cost of sales due to lower almond sales and a $55,000, or 18%, decrease in depreciation and amortization expense, partially offset by a $24,000, or 35%, increase in selling, general and administrative expenses.
Previous report
•Farming segment revenues totaled $1,645,000 for the six months ended June 30, 2026, a decrease of $518,000, or 24%, compared to $2,163,000 for the prior-year period. The decrease was primarily attributable to lower almond revenues resulting from reduced sales of almond carryover crop. During the first six months of 2026 and 2025, the Company sold approximately 343,000 pounds and 727,000 pounds, respectively, of almond carryover crop.
Previous report
•Direct farming expenses were $1,504,000 for the six months ended June 30, 2026, compared to $2,529,000 for the prior-year period, a decrease of $1,025,000, or 41%. The decrease was primarily attributable to a $953,000, or 55%, reduction in cost of sales due to lower almond sales and a $94,000, or 14%, decrease in depreciation and amortization expense, partially offset by a $22,000, or 21%, increase in selling, general and administrative expenses.
Previous report
•Operating income from farming before fixed water obligations was $141,000 for the six months ended June 30, 2026, compared to an operating loss of $366,000 for the prior-year period, an improvement of $507,000. This reduction reflects a $518,000, or 24%, decrease in total farming revenues combined with a $1,025,000, or 41%, decrease in direct farming expenses. The Company believes this measure is useful because it presents the operating performance of farming activities excluding fixed water obligations, which are incurred to preserve the Company's long-term water rights regardless of the level of farming activity.
Previous report
•Ranch operations revenues totaled $1,200,000 for the three months ended June 30, 2026, an increase of $117,000, or 11%, from $1,083,000 for the prior-year period. The increase was primarily driven by a $103,000 increase in grazing revenues, reflecting higher cattle prices. Game management and other revenues also increased due to higher guided hunt and membership revenues during the period.
Previous report
•Ranch operations revenues totaled $2,817,000 for the six months ended June 30, 2026, an increase of $430,000, or 18%, from $2,387,000 for the prior-year period. The increase was primarily attributed to a $231,000 increase in game management and other revenues, reflecting higher guided hunt and membership revenues, as well as a $199,000 increase in grazing revenues driven by more favorable cattle prices.
Previous report
•Ranch operations expenses were $2,506,000 for the six months ended June 30, 2026, a decrease of $102,000, or 4%, from $2,608,000 for the prior-year period. The decrease was primarily attributable to a $114,000 reduction in selling, general and administrative expenses, reflecting lower allocated overhead costs.
Previous report
Corporate general and administrative costs were $2,839,000 for the three months ended June 30, 2026, a decrease of $2,061,000, from $4,900,000 for the prior-year period. The decrease was primarily driven by a $2,138,000 reduction in shareholder-related expenses, reflecting the non-recurrence of shareholder activism advisory costs incurred in the prior-year period. Excluding this item, corporate general and administrative expense was relatively flat, as a $400,000 decrease in compensation expense, primarily a $284,000 reduction in salaries and related payroll overhead, net of amounts transferred to project costs, reflecting cost savings from a streamlined workforce.
Previous report
Corporate general and administrative costs were $4,725,000 for the six months ended June 30, 2026, a decrease of $4,411,000, from $9,136,000 for the prior-year period. The decrease was primarily driven by a $3,115,000 reduction in shareholder-related expenses, reflecting the non-recurrence of shareholder activism advisory costs incurred in the prior-year period. Compensation expense decreased $1,795,000, driven in part by certain discrete items, including a $406,000 reduction in stock-based compensation resulting from the reversal of performance share awards that did not meet target performance conditions, the absence of a $300,000 bonus paid to the outgoing Chief Executive Officer in the prior-year period, and the reversal of approximately $300,000 of previously accrued bonuses due to lower-than-expected payouts. Excluding these items, compensation expense decreased approximately $789,000, primarily due to a $504,000 reduction in salaries, net of amounts transferred to project costs, reflecting cost savings from a streamlined workforce, and a $222,000 reduction in related payroll overhead costs.
Previous report
General Outlook
Previous report
During the first six months of 2026, investing activities used $11,217,000. The decrease in cash used for investing activities is primarily related to the completed construction of Terra Vista at Tejon project.
Previous report
During the first six months of 2026, financing activities provided $953,000, which was primarily attributable to borrowings on the line of credit of $2,000,000 to fund the cash needs of various segments as well as our ongoing development projects. This was partially offset by the tax payments on vested share grants of $1,047,000.
Previous report
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.
Reworded paragraphs (59)
Previous wording
This Quarterly Report on Form 10-Q contains forward-looking statements, including without limitation statements regarding strategic alliances, the almond, pistachio, olives and grape industries, the future plantings of permanent crops, future yields, prices and water availability for the Company's crops and real estate operations, future prices, production and demand for oil and other minerals, future development of the Company's property, future revenue and income of its jointly-owned travel plaza and other joint venture operations, the adequacy of future cash flows to fund our operations, future revenue and income residential leasing, the adequacy 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 and accounts receivable, our outstanding indebtedness, ongoing negotiations and other future events and conditions. In some cases, these statements are identifiable through use of words such as “anticipate,” “believe,” “estimate,” “expect,” “intend,” “plan,” “project,” “target,” “can,” “could,” “may,” “will,” “should,” “would,” “likely,” and similar expressions such as “in the process” “designed to,” “well positioned,” or “envisioned to.” 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 performance, 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-looking statements. These risks, uncertainties and important factors include, but are not limited to, weather, market, geopolitical 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, and the timing and outcome of regulatory or litigation processes. No assurance can be given that the actual future results will not differ materially from the forward-looking statements that we make for several reasons, including those described above and in Part I, Item 1A“Risk Factors” of our most recent Annual Report on Form 10-K.
Current wording
This Quarterly Report on Form 10-Q contains forward-looking statements, including without limitation statements regarding strategic alliances, the almond, pistachio, olives and grape industries, the future plantings of permanent crops, future yields, prices and water availability for the Company's crops and real estate operations, future prices, production and demand for oil and other minerals, future development of the Company's property, future revenue and income of its jointly-owned travel plaza and other joint venture operations, the adequacy of future cash flows to fund our operations, future revenue and income from residential leasing, the adequacy 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 and accounts receivable, our outstanding indebtedness, ongoing negotiations and other future events and conditions. In some cases, these statements are identifiable through use of words such as “anticipate,” “believe,” “estimate,” “expect,” “intend,” “plan,” “project,” “target,” “can,” “could,” “may,” “will,” “should,” “would,” “likely,” and similar expressions such as “in the process” “designed to,” “well positioned,” or “envisioned to.” 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 performance, 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-looking statements. These risks, uncertainties and important factors include, but are not limited to, weather, market, geopolitical 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, and the timing and outcome of regulatory or litigation processes. No assurance can be given that the actual future results will not differ materially from the forward-looking statements that we make for several reasons, including those described above and in Part I, Item 1A “Risk Factors” of our most recent Annual Report on Form 10-K.
Previous wording
Our primary business objective is to maximize long-term shareholder value through the development, leasing, and monetization of our land-based assets, with our commercial and industrial operations at the Tejon Ranch Commerce Center (“TRCC”) serving as a central component of this strategy. In addition, our real estate platform now includes a dedicated Multifamily segment, reflecting our strategic evolution into a more diversified, mixed-use master-planned development. We allocate capital toward projects that we believe generate attractive risk-adjusted returns while enhancing the long-term value of our landholdings.
Current wording
Our primary business objective is to maximize long-term shareholder value through the development, leasing, and monetization of our land-based assets, with our commercial and industrial operations at the Tejon Ranch Commerce Center (“TRCC”) serving as a central component of this strategy. We allocate capital toward projects that we believe generate attractive risk-adjusted returns while enhancing the long-term value of our landholdings.
Previous wording
Centennial at Tejon Ranch, or Centennial, had entitlements approved in 2019 by the Los Angeles County Board of Supervisors. These approvals were litigated in two lawsuits filed in Los Angeles County Superior Court. As previously disclosed and summarized in our annual report on Form 10-K, this litigation resulted in LA County rescinding and setting aside the Centennial approvals in compliance with the court’s final judgment, and the Company considers that litigation resolved. There have been no material developments during the three months ended June 30, 2026, that would change that conclusion. Now that this litigation is resolved, the Company is in the process of working with LA County to advance the Centennial project and is seeking re-entitlement of the Centennial project (“re-entitlement”). We expect that re-entitlement will involve processing project and use entitlements that are substantively similar to the Centennial approvals that were approved by the LA County Board of Supervisors in 2019. In that regard the Company is presently circulating a recirculated partial draft environmental impact report (“RPDEIR”) for public review and comment that is expected to facilitate the consideration of re-entitlement before LA County’s Regional Planning Commission and (ultimately) the Board of Supervisors late this year.
Current wording
Centennial at Tejon Ranch, or Centennial, had entitlements approved in 2019 by the Los Angeles County Board of Supervisors. These approvals were litigated in two lawsuits filed in Los Angeles County Superior Court. As previously disclosed and summarized in our annual report on Form 10-K, this litigation resulted in LA County rescinding and setting aside the Centennial approvals in compliance with the court’s final judgment, and the Company considers that litigation resolved. There have been no material developments during the three months ended September 30, 2026, that would change that conclusion. Now that this litigation is resolved, the Company is seeking re-entitlement of the Centennial project (“re-entitlement”). We expect that re-entitlement will involve processing project and use entitlements that are substantively similar to the Centennial approvals that were approved by the LA County Board of Supervisors in 2019. In that regard LA County, as lead agency, circulated a recirculated partial draft environmental impact report (“RPDEIR”) for public review and comment that is expected to facilitate the consideration of re-entitlement before LA County’s Regional Planning Commission and (ultimately) the Board of Supervisors early next year.
Previous wording
At the heart of the commercial/industrial real estate development segment is TRCC, a 20 million square foot mixed-use development on Interstate 5 just north of the Los Angeles basin. With the completion of Terra Vista at Tejon construction, TRCC is now evolving into a vibrant residential and employment hub, enhancing the interconnectivity of our mixed-use master planned community strategy. Over eight million square feet of industrial, commercial and retail space has already been developed or is under development, including distribution centers for IKEA, Caterpillar, Nestlé, Famous Footwear, L'Oreal, Camping World, Sunrise Brands, Dollar General and RectorSeal. TRCC sits on both sides of Interstate 5, giving distributors immediate access to the West Coast’s principal north-south goods movement corridor.
Current wording
At the heart of the commercial/industrial real estate development segment is TRCC, a 20 million square foot mixed-use development on Interstate 5 just north of the Los Angeles basin. With the completion of Terra Vista at Tejon construction, TRCC is now evolving into a vibrant residential and employment hub, enhancing the interconnectivity of our mixed-use master planned community strategy. Over eight million square feet of industrial, commercial and retail space has already been developed or is under development, including distribution centers for IKEA, Caterpillar, Nestlé, Famous Footwear, L'Oreal, Camping World, Sunrise Brands, and Dollar General. TRCC sits on both sides of Interstate 5, giving distributors immediate access to the West Coast’s principal north-south goods movement corridor.
Previous wording
•A joint venture, TRC-DP 1, LLC, or the DP1 Joint Venture, with Dedeaux Properties to develop, manage, and operate an industrial building of 510,385 square feet at TRCC-East. On April 28, 2026, we contributed approximately 24.57 acres of land to the DP1 Joint Venture and construction commenced, with occupancy expected in the first quarter of 2027.
Current wording
•A joint venture, TRC-DP1, LLC, or the DP1 Joint Venture, with Dedeaux Properties to develop, manage, and operate an industrial building of 510,385 square feet at TRCC-East. On April 28, 2026, we contributed approximately 24.57 acres of land to the DP1 Joint Venture and construction commenced, with certificate of occupancy expected in the first quarter of 2027.
Previous wording
In 2021, the Kern County Board of Supervisors approved a Conditional Use Permit authorizing the development of Terra Vista at Tejon, a multifamily apartment community within TRCC consisting of up to 495 units across thirteen buildings, approximately 6,500 square feet of amenity space, and 8,000 square feet of community-serving retail on a 22-acre site immediately north of the Outlets at Tejon. The first phase, completed in 2025, includes 228 units and represents the first newly constructed, professionally managed multifamily community within TRCC, introducing a limited product type to the South Bakersfield submarket.
Current wording
In 2021, the Kern County Board of Supervisors approved a Conditional Use Permit authorizing the development of Terra Vista at Tejon, a multifamily apartment community within TRCC consisting of up to 495 units across thirteen buildings, approximately 6,500 square feet of amenity space, and 8,000 square feet of community-serving retail on a 22-acre site immediately north of the Outlets at Tejon. The first phase, completed in 2025, includes 228 units and represents the first newly constructed, professionally managed multifamily community within TRCC, introducing a new product type to the South Bakersfield submarket.
Previous wording
Leasing commenced in May 2025, and the project was approximately 77% leased as of June 30, 2026, reflecting continued absorption toward stabilization. Terra Vista at Tejon represents the initial residential component of TRCC and is intended to support housing demand from employees working in nearby distribution, retail, hospitality, and service uses, including employees who work at the Hard Rock Casino Tejon. The Company continues to position its multifamily platform to benefit from regional employment growth, while monitoring key operating metrics such as occupancy, leasing activity, renewal rates, concessions, and rental rates, which may fluctuate based on market conditions, competitive supply, and broader economic factors.
Current wording
Leasing commenced in May 2025, and the project was approximately 83% leased as of September 30, 2026, reflecting continued absorption toward stabilization. Terra Vista at Tejon represents the initial residential component of TRCC and is intended to support housing demand from employees working in nearby distribution, retail, hospitality, and service uses, including employees who work at the Hard Rock Casino Tejon. The Company continues to position its multifamily platform to benefit from regional employment growth, while monitoring key operating metrics such as occupancy, leasing activity, renewal rates, concessions, and rental rates, which may fluctuate based on market conditions, competitive supply, and broader economic factors.
Previous wording
•Grapevine is an 8,010-acre development area located on the San Joaquin Valley floor area of our lands, adjacent to TRCC. Upon completion of Grapevine, this master planned community is expected to include 12,000 homes, 5.1 million square feet of commercial development, and more than 3,367 acres of open space and parks; and
Current wording
•Grapevine is an 8,010-acre development area located on the San Joaquin Valley floor portion of our landholdings, adjacent to TRCC. Upon completion of Grapevine, this master planned community is expected to include 12,000 homes, 5.1 million square feet of commercial development, and more than 3,367 acres of open space and parks; and
Previous wording
Our mineral resources segment generates recurring royalty income from third-party extraction activities with minimal capital deployment by the Company, such as our lease with National Cement Company of California Inc. These activities leverage the underlying value of our land and represent a natural extension of our land-based business model.
Current wording
Our mineral resources segment generates recurring royalty income from third-party extraction activities with minimal capital deployment by the Company, such as our lease with National Cement Company of California Inc. During the quarter, National Cement exercised its option to extend the lease term an additional 20 years, through 2047. The extension reinforces the long-term value of our land assets and supports our strategy of generating recurring revenue from our landholdings.
Previous wording
Summary of Second Quarter and YTD 2026 Performance
Current wording
Summary of Third Quarter and YTD 2026 Performance
Previous wording
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 reporting 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 13 (Reporting Segments and Related Information) of the Notes to Unaudited Consolidated Financial Statements.
Current wording
This Management’s Discussion and Analysis of Financial Condition and Results of Operations provides a discussion of our consolidated results of operations, including the results of each reporting segment, followed by an analysis of our financial condition. The segment information should be read in conjunction with Note 13 (Reporting Segments and Related Information) of the Notes to Unaudited Consolidated Financial Statements.
Previous wording
During the six months ended June 30, 2026, our critical accounting policies have not changed since the filing of our Annual Report on Form 10-K for the year ended December 31, 2025. 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, 2026, our critical accounting policies have not changed since the filing of our Annual Report on Form 10-K for the year ended December 31, 2025. 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 recently issued accounting pronouncements not yet adopted.
Previous wording
•Commercial/industrial real estate development segment revenues were $9,663,000 for the three months ended June 30, 2026, compared to $5,092,000 for the same period in 2025, an increase of $4,571,000, or 90%. The increase was primarily attributable to higher land sale activity. During the current-year quarter, the Company completed a $6,854,000 land sale in connection with the TRC-DP1, LLC, compared to land sales of $2,373,000 in the prior-year quarter. Gross profit from land sales was $2,000,000 during the current-year quarter, compared to $595,000 in the prior-year period.
Current wording
•Commercial/industrial real estate development segment revenues were $15,669,000 for the nine months ended September 30, 2026, compared to $10,789,000 for the same period in 2025, an increase of $4,880,000, or 45%. The increase was primarily attributable to higher land sale activity: during the second quarter of 2026 the Company completed a $6,854,000 land sale in connection with TRC-DP1, LLC, compared to land sales of $2,373,000 in the prior-year period. Gross profit from land sales was $2,000,000 in the current-year period, compared to $600,000 in the prior-year period.
Previous wording
•Excluding land sales, revenues from recurring operations increased $90,000, or 3.3%, to $2,809,000, primarily due to $46,000 increase in TRCC leasing revenues, a $35,000 increase in TRCC management fees and reimbursements, and a $34,000 increase in Pastoria Energy Facility revenues, partially offset by a $25,000 decrease in commercial leasing revenues and a $19,000 decrease in landscaping and other services revenues. Operating income from recurring operations increased $169,000, or 13%, reflecting the increase in recurring revenues and continued expense management.
Current wording
•Excluding land sales, revenues from recurring operations increased $399,000, or 4.7%, to $8,815,000, primarily due to a $239,000 increase in Pastoria Energy Facility revenues, a $170,000 increase in TRCC leasing revenues and a $69,000 increase in communication lease revenues, partially offset by a $55,000 decrease in commercial leasing revenues and a $20,000 decrease in TRCC management fees and reimbursements.
Previous wording
The logistics operators currently located at TRCC have demonstrated the site’s ability to serve customers throughout California and the broader western United States, and their presence continues to be highlighted in our marketing efforts. We intend to continue emphasizing in our marketing strategy TRCC’s strategic labor and logistics advantages, Kern County’s business-friendly incentive framework, and the operating success of existing tenants and property owners within the development. Our location aligns with a logistics model increasingly used by many companies, which favors large, centralized distribution facilities strategically located to optimize the balance of inbound and outbound efficiencies, rather than numerous smaller, decentralized distribution centers. The presence and performance of major logistics operators at TRCC support this model. In addition, TRCC’s location provides access to nearly 90% of California consumers within a single-day truck turn and to markets of more than 40 million people for next-day delivery service, which we believe supports e-commerce fulfillment operations.
Current wording
The major logistics operators selecting TRCC are proof of TRCC's value as a hub to serve customers throughout California and the broader western United States, and their presence continues to be highlighted in our marketing efforts. We intend to continue emphasizing in our marketing strategy TRCC’s strategic labor and logistics advantages, Kern County’s business-friendly incentive framework, and the operating success of existing tenants and property owners within the development. Our location aligns with a logistics model that is the foundation of modern distribution strategy, which favors large, centralized distribution facilities strategically located to optimize the balance of inbound and outbound efficiencies, rather than numerous smaller, decentralized distribution centers. In addition, TRCC’s location provides access to nearly 90% of California consumers within a single-day truck turn and to markets of more than 40 million people for next-day delivery service, which we believe supports e-commerce fulfillment operations.
Previous wording
Our FTZ designation allows businesses to secure the many benefits and cost reductions associated with streamlined movement of goods in and out of the trade zone. This FTZ designation is further supplemented by the AKIP adopted by the Kern County Board of Supervisors. AKIP aims to expand and enhance Kern County's competitiveness by taking affirmative steps to attract new businesses and to encourage the growth and resilience of existing businesses. AKIP provides incentives, such as assistance in obtaining tax incentives, building supporting infrastructure, and workforce development.
Current wording
Our FTZ designation allows businesses to secure the many benefits and cost reductions associated with streamlined movement of goods in and out of the trade zone. This FTZ designation is marketed to tenants alongside the AKIP adopted by the Kern County Board of Supervisors. AKIP aims to expand and enhance Kern County's competitiveness by taking affirmative steps to attract new businesses and to encourage the growth and resilience of existing businesses. AKIP provides incentives, such as assistance in obtaining tax incentives, building supporting infrastructure, and workforce development.
Previous wording
We believe the FTZ and AKIP, and our ability to offer fully entitled, shovel-ready land parcels capable of supporting buildings of any size, including buildings of one million square feet or more, provides us with a meaningful marketing advantage. Our marketing efforts are directed primarily toward the Inland Empire region of Southern California, the Santa Clarita Valley of northern Los Angeles County, the northern San Fernando Valley, where the availability of new industrial product is limited and real estate costs remain relatively high, and the San Joaquin Valley of California. We continue to analyze market conditions and evaluate opportunities to expand our portfolio of industrial buildings for lease, either independently or through partnerships, as we have done with buildings developed through our joint ventures.
Current wording
We believe the FTZ and AKIP, together with our ability to offer fully entitled, shovel-ready land parcels capable of supporting buildings of any size, including buildings of one million square feet or more, provides us with a meaningful marketing advantage. Our marketing efforts are directed primarily toward the Inland Empire region of Southern California, the Santa Clarita Valley of northern Los Angeles County and the northern San Fernando Valley, where the availability of new industrial product is limited and real estate costs remain relatively high, and the San Joaquin Valley of California. We continue to analyze market conditions and evaluate opportunities to expand our portfolio of industrial buildings for lease, either independently or through partnerships, as we have done with buildings developed through our joint ventures.
Previous wording
The San Fernando Valley and Ventura County industrial markets also demonstrated improving fundamentals during the quarter. Combined net absorption totaled approximately 371,000 square feet, reversing negative absorption recorded in the prior quarter. Vacancy improved to 3.8% in the San Fernando Valley and 3.3% in Ventura County, while no new supply was delivered for the third consecutive quarter. Average asking rents remained stable at approximately $1.45 per square foot in the San Fernando Valley and $1.27 per square foot in Ventura County.
Current wording
The San Fernando Valley and Ventura County industrial markets were stable during the third quarter with year-to-date gross activity totaling 5,000,000 square feet. Combined net absorption for the quarter was negative 370,000 square feet, compared with positive absorption of approximately 371,000 square feet in the prior quarter. Overall vacancy increased slightly to 3.8% with vacancy reaching 4.0% in the San Fernando Valley and 3.4% in Ventura County. No new supply was delivered during the quarter, while approximately 2.0 million square feet remained under construction. Average asking rents held steady at approximately $1.46 per square foot in the San Fernando Valley and $1.25 per square foot in Ventura County.
Previous wording
Industrial users seeking larger facilities continue to consider locations further north into neighboring Kern County, including TRCC, as Southern California industrial markets stabilize and leasing activity improves despite higher vacancy rates than recent historical lows. TRCC also competes for tenants seeking alternatives to the Inland Empire and the Santa Clarita Valley. However, there can be no assurance that these factors will offset market vacancy levels, rental rate pressure, regulatory constraints, tenant consolidation trends or competing industrial development.
Current wording
Industrial users seeking larger facilities continue to consider locations further north into neighboring Kern County, including TRCC, as an alternative to more established Southern California industrial markets. While market conditions remain competitive, TRCC continues to attract interest from prospective tenants seeking alternatives to the Inland Empire and Santa Clarita Valley. However, there can be no assurance that this interest will translate into increased leasing activity or offset the effects of elevated vacancy rates, rental rate pressure, regulatory constraints, tenant consolidation trends or competing industrial developments.
Previous wording
•Multifamily revenues increased to $857,000 for the three months ended June 30, 2026, from $15,000 in the prior-year period, reflecting increased occupancy following the commencement of leasing activity after the property was placed in service during the second quarter in 2025.
Current wording
•Multifamily revenues increased to $924,000 for the three months ended September 30, 2026, from $181,000 in the prior-year period, primarily reflecting higher occupancy as leasing activity progressed following the property's placement in service during the second quarter in 2025.
Previous wording
•Multifamily net operating income was $345,000 for the three months ended June 30, 2026, compared to a net operating loss of $(166,000) in the prior-year period. The improvement reflects revenue growth following the commencement of leasing activity, which outpaced increases in property-level operating expenses of $259,000 and selling, general and administrative expenses of $72,000 associated with ongoing operations.
Current wording
•Multifamily net operating income was $213,000 for the three months ended September 30, 2026, compared to a net operating loss of $187,000 in the prior-year period. The improvement was driven by higher revenues, partially offset by increases in property-level operating expenses of $286,000 and selling, general and administrative expenses of $57,000 associated with ongoing operations.
Previous wording
•Multifamily net operating income was $534,000 for the six months ended June 30, 2026, compared to a net operating loss of $(358,000) in the prior-year period. The improvement reflects revenue growth following the commencement of leasing activity, which outpaced increases in property-level operating expenses of $563,000 and selling, general and administrative expenses of $84,000 associated with ongoing operations.
Current wording
•Multifamily net operating income was $746,000 for the nine months ended September 30, 2026, compared to a net operating loss of $544,000 in the prior-year period. The improvement was driven by higher revenues, partially offset by increases in property-level operating expenses of $843,000 and selling, general and administrative expenses of $148,000 associated with ongoing operations.
Previous wording
•Ranch operations expenses were $1,293,000 for the three months ended June 30, 2026, a decrease of $42,000, or 3%, from $1,335,000 for the prior-year period. The decrease was primarily attributable to a $96,000 reduction in selling, general and administrative expenses, reflecting lower allocated overhead costs, partially offset by a $62,000 increase in operating expenses.
Current wording
Resort/Residential real estate development segment expenses were $1,146,000 for the nine months ended September 30, 2026, compared to $1,008,000 for the prior-year period an increase of $138,000, or 13.7%. The increase reflected a $226,000 increase in operating expenses, partially offset by a $78,000 decrease in selling, general and administrative expenses, reflecting lower allocated overhead costs, and a $10,000 decrease in depreciation.
Previous wording
•Mineral resources segment revenues were $1,789,000 for the three months ended June 30, 2026, representing an increase of $279,000, or 18%, from $1,510,000 for the prior-year period. The increase was primarily driven by higher water sales, which increased $195,000 due to higher demand. Rock aggregate revenues increased $65,000, or 11%, reflecting both higher sales volumes and higher average realized prices per ton. Cement revenues increased $32,000, or 5%, driven by higher sales volumes, as average realized prices per ton were essentially unchanged. Oil and gas revenues increased $37,000, or 20%, primarily due to higher production volumes and commodity prices.
Current wording
•Mineral resources segment revenues were $9,285,000 for the nine months ended September 30, 2026, an increase of $2,008,000, or 27.6%, compared with $7,277,000 in the prior-year period. The increase was primarily driven by higher water sales of $1,009,000, reflecting increased demand, and higher rock aggregate revenues of $732,000, primarily due to increased sales volumes. Cement revenues increased $188,000, reflecting higher sales volumes, while oil and gas revenues increased $25,000, primarily due to higher production volumes and commodity prices.
Previous wording
Demand for the Company's water is influenced by annual State Water Project ("SWP") allocations, hydrologic conditions, and customers' operational needs. Higher SWP allocations generally reduce demand for supplemental water supplies, while lower allocations may increase demand. Accordingly, water sales may fluctuate significantly from period to period and results for the current quarter or year-to-date period are not necessarily indicative of future operating results.
Current wording
Demand for the Company's water is influenced by annual State Water Project ("SWP") allocations, hydrologic conditions, and customers' operational needs. Higher SWP allocations generally reduce demand for supplemental water supplies, while lower allocations may increase demand. Accordingly, water sales may fluctuate significantly from period to period and current results may not be indicative of future performance.
Previous wording
As groundwater regulation in California continues to evolve, particularly under the Sustainable Groundwater Management Act (“SGMA”), we believe our water assets will become increasingly strategic and valuable. These assets include our water banking operations, groundwater recharge capabilities, and access to long-term water supply contracts, including SWP entitlements acquired in prior periods. We expect these resources to play a critical role in supporting our current and future development activities and to provide potential opportunities for incremental revenue through water sales to third parties.
Current wording
The Company believes its water assets, including water banking operations, groundwater recharge capabilities and long-term water supply contracts, provide resources to support existing operations and future development activities, as well as potential opportunities for water sales to third parties. As groundwater regulation in California continues to evolve, particularly under the Sustainable Groundwater Management Act ("SGMA"), the availability and management of these resources remain important to the Company's long-term planning.
Previous wording
SWP water contracts require annual payments for both fixed and variable costs associated with the SWP and the applicable water districts, regardless of water delivery. In addition to surface water supplies, the Company holds adjudicated groundwater rights, including an annual allocation of 1,634 acre-feet in the Antelope Valley Basin. The Company also has access to groundwater underlying portions of its landholdings, which it believes are sufficient to support planned commercial development along the Interstate 5 corridor, as well as ongoing agricultural operations.
Current wording
SWP water contracts require annual payments for both fixed and variable costs associated with the SWP and the applicable water districts, regardless of water delivery. In addition to surface water supplies, the Company holds adjudicated groundwater rights, including an annual allocation of 1,634 acre-feet in the Antelope Valley Basin. The Company also has access to groundwater underlying portions of its landholdings, which it believes, together with other available water resources, will support planned commercial development along the Interstate 5 corridor, and ongoing agricultural operations.
Previous wording
In Kern County, the Company’s lands span three groundwater basins governed by the Sustainable Groundwater Management Act (SGMA): the Kern Subbasin, the White Wolf Subbasin, and the Castac Basin. Approximately 9% of the Company's Kern County land is within the Kern Subbasin and is primarily used for grazing with minimal water use. In contrast, the White Wolf Subbasin is being sustainably managed, with an approved GSP requiring only minor corrections, while the Castac Basin is a low-priority basin with no anticipated restrictions. The Company believes its diverse mix of surface water supplies, adjudicated groundwater rights, and banked water positions the Company well to navigate evolving regulatory frameworks and meet future water needs.
Current wording
In Kern County, the Company’s lands span three groundwater basins subject to varying regulatory requirements: the Kern Subbasin, the White Wolf Subbasin, and the Castac Basin. Approximately 9% of the Company's Kern County land is within the Kern Subbasin and is primarily used for grazing with limited water demand. The White Wolf Subbasin is subject to groundwater management requirements under SGMA, while the Castac Basin is designated as a low-priority basin. The Company continues to monitor regulatory developments and believes its combination of surface water supplies, groundwater rights and banked water provides flexibility in managing future water requirements.
Previous wording
Prices for oil and natural gas are subject to volatility due to changes in supply and demand, and other factors beyond the Company's control, including domestic and global inventory levels, geopolitical events, macroeconomic conditions, and regulatory developments. Oil and gas production in California has generally declined in recent years, reflecting a combination of increasing regulatory requirements, natural production declines, reduced capital investment, and other industry factors.
Current wording
Oil and natural gas prices are subject to volatility resulting from changes in supply and demand, inventory levels, geopolitical events, economic conditions and regulatory developments. Oil and gas production in California has generally declined in recent years due to regulatory requirements, natural production declines, reduced capital investment and other industry factors.
Previous wording
•Operating income from farming before fixed water obligations was $229,000 for the three months ended June 30, 2026, compared to an operating loss of $217,000 for the prior-year period, an improvement of $446,000. This improvement reflects a $143,000, or 24%, increase in total farming revenues combined with a $303,000, or 37%, decrease in direct farming expenses. The Company believes this measure is useful because it presents the operating performance of farming activities excluding fixed water obligations, which are incurred to preserve the Company's long-term water rights regardless of the level of farming activity.
Current wording
•Operating income from farming before fixed water obligations was $1,578,000 for the three months ended September 30, 2026, compared with an operating loss of $371,000 in the prior-year period. The $1,949,000 improvement primarily reflected higher revenues, partially offset by an increased direct farming expenses. The Company believes this measure is useful in evaluating farming operations separately from fixed water obligations incurred to preserve long-term water rights, regardless of farming activity.
Previous wording
Almond, pistachio, and wine grape sales are seasonal, with the majority of revenues typically generated 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.
Current wording
Almond, pistachio, and wine grape sales are seasonal, with the majority of revenues typically generated 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. The timing of harvesting and sales recognition may vary between quarters and years, affecting quarterly comparisons.
Previous wording
During 2026, the Company planted an additional 150 acres of olive orchards, bringing total olive acreage to approximately 300 acres. Olive trees generally require several years to reach commercial production, and accordingly, the newly planted acreage is not expected to generate meaningful revenues in the near term. The expanded olive acreage is expected to further diversify the Company's agricultural commodity mix over the long term.
Current wording
The Company completed the planting of an additional 150 acres of olive orchards during 2026, bringing total olive acreage to approximately 300 acres. Olive trees generally require several years to reach commercial production, and accordingly, the newly planted acreage is not expected to generate meaningful revenues in the near term. The expanded olive acreage is expected to further diversify the Company's agricultural commodity mix over the long term.
Previous wording
Weather conditions can significantly affect chill accumulation during dormancy, a period critical to tree and vine development. Winter conditions generally provided adequate chill accumulation for the Company's almond and pistachio orchards. Significant rainfall during the February 2026 almond bloom created less favorable pollination conditions, and because harvest has not yet begun, the Company cannot yet determine the impact of these conditions on its crop yields.
Current wording
Weather conditions can significantly affect chill accumulation during dormancy, a period critical to tree and vine development. Winter conditions generally provided adequate chill accumulation for the Company's almond and pistachio orchards. However, elevated temperatures during February 2026 resulted in insufficient chill accumulation for the Company's pistachio orchards, contributing to reduced crop yields. Separately, warmer temperatures during the spring adversely affected almond development, resulting in lower almond kernel weights. During 2026, the Company recognized crop insurance proceeds related to weather-related crop losses, as discussed above.
Previous wording
The long-term effects of California's groundwater management laws on future agricultural production and new plantings remain uncertain. In addition, water availability continues to be a long-term consideration for agricultural operations throughout California. Limitations on State Water Project deliveries, particularly during drought conditions, could adversely affect agricultural production. Based on currently available water supplies and water resources, however, the Company believes it has sufficient water to meet its anticipated agricultural requirements for the 2026 crop year.
Current wording
The long-term effects of California's groundwater management laws on future agricultural production and new plantings remain uncertain. In addition, water availability continues to be a long-term consideration for agricultural operations throughout California. Limitations on State Water Project deliveries, particularly during drought conditions, could adversely affect agricultural production. The Company had sufficient water supplies to meet its agricultural requirements during the 2026 growing season, with the majority of crops harvested as of September 30, 2026.
Previous wording
Total other income was $29,000 for the three months ended June 30, 2026, a decrease of $193,000 from $222,000 for the same period in 2025, primarily due to lower investment income as a result of a lower average invested balance.
Current wording
Total other income was $30,000 for the three months ended September 30, 2026, a decrease of $138,000 from $168,000 for the same period in 2025, primarily due to lower investment income as a result of a lower average invested balance.
Previous wording
Total other income was $79,000 for the six months ended June 30, 2026, a decrease of $413,000 from $492,000 for the same period in 2025, primarily due to lower investment income as a result of a lower average invested balance.
Current wording
Total other income was $109,000 for the nine months ended September 30, 2026, a decrease of $551,000 from $660,000 for the same period in 2025, primarily due to lower investment income as a result of a lower average invested balance.
Previous wording
Depreciation for our multifamily segment was $516,000 for the three months ended June 30, 2026, an increase of $376,000 from $140,000 for the same period in 2025. Terra Vista was constructed in phases, and depreciation commenced on each building as it was completed and placed in service, beginning in the second quarter of 2025, with the final building delivered in October 2025. The increase therefore reflects a full quarter of depreciation on all completed buildings in 2026, compared with a partial period of depreciation on only the initial buildings in 2025.
Current wording
Depreciation for our Multifamily segment was $516,000 for the three months ended September 30, 2026, an increase of $234,000 from $282,000 for the same period in 2025. Terra Vista was constructed in phases, and depreciation commenced on each building as it was completed and placed in service, beginning in the second quarter of 2025, with the final building delivered in October 2025. The increase therefore reflects a full quarter of depreciation on all completed buildings in 2026, compared with a partial period of depreciation on only the initial buildings in 2025.
Previous wording
Depreciation for our multifamily segment was $1,033,000 for the six months ended June 30, 2026, an increase of $893,000 from $140,000 for the same period in 2025. As discussed above, the buildings within Terra Vista were completed and placed in service in phases beginning in the second quarter of 2025, with the final building delivered in October 2025. The increase reflects a full six months of depreciation on all completed buildings in 2026, compared with depreciation on only the initial buildings from their respective in-service dates in 2025.
Current wording
Depreciation for our Multifamily segment was $1,548,000 for the nine months ended September 30, 2026, an increase of $1,126,000 from $422,000 for the same period in 2025. As discussed above, the buildings within Terra Vista were completed and placed in service in phases beginning in the second quarter of 2025, with the final building delivered in October 2025. The increase reflects a full nine months of depreciation on all completed buildings in 2026, compared with depreciation on only the initial buildings from their respective in-service dates in 2025.
Previous wording
•Equity in earnings was $4,390,000 for the six months ended June 30, 2026, an increase of $677,000, or 18%, from $3,713,000 for the prior-year period. The increase was primarily attributable to improved results at the TRCC/Rock Outlet Center LLC joint venture, where the equity loss narrowed by $458,000, due to the absence of a tenant turnover write-down recognized during the second quarter of 2025. The increase also reflected an aggregate $217,000 increase in equity in earnings from the TRC-MRC joint ventures, while equity in earnings from Petro Travel Plaza Holdings, LLC was essentially unchanged from the prior-year period.
Current wording
•Equity in earnings was $2,332,000 for the three months ended September 30, 2026, a decrease of $223,000, or 8.7%, compared to $2,555,000 for the prior-year period. The decrease was primarily attributable to a $381,000 decrease in equity in earnings from the Petro Travel Plaza Holdings, LLC joint venture, reflecting lower site-level margins as higher labor and operating expenses more than offset an improvement in fuel margins. This decrease was partially offset by improved results at the TRCC/Rock Outlet Center LLC joint venture, where the equity loss narrowed by $61,000, and by an aggregate $97,000 increase in equity in earnings from the TRC-MRC joint ventures, primarily reflecting improved operating performance.
Previous wording
•Equity in earnings was $3,100,000 for the three months ended June 30, 2026, an increase of $545,000, or 21%, from $2,555,000 for the prior-year period. The increase was primarily attributable to improved results at the TRCC/Rock Outlet Center LLC joint venture, where the equity loss narrowed by $274,000, due to the absence of a tenant turnover write-down recognized during the second quarter of 2025. Equity in earnings from the Petro Travel Plaza Holdings, LLC joint venture also increased by $119,000, primarily reflecting improved operating margins. In addition, the TRC-MRC joint ventures collectively reported higher equity in earnings, primarily reflecting improved operating performance.
Current wording
•Equity in earnings was $6,722,000 for the nine months ended September 30, 2026, an increase of $454,000, or 7.2%, from $6,268,000 for the prior-year period. The increase was primarily attributable to improved results at the TRCC/Rock Outlet Center LLC joint venture, where the equity loss narrowed by $519,000, due to the absence of a tenant turnover write-down recognized during the second quarter of 2025, and to an aggregate $314,000 increase in equity in earnings from the TRC-MRC joint ventures, primarily reflecting improved operating performance. These increases were partially offset by a $379,000 decrease in equity in earnings from Petro Travel Plaza Holdings, LLC, reflecting lower site-level margins.
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