Tejon Ranch Co.
Annual Report 2013

Plain-text annual report

Y O U R B R A N D O F O P P O R T U N I T Y w w w. t e j o n r a n c h . c o m TEJON RANCH CO MPA NY 2 01 3 A N N UA L R E P O R T Tejon Ranch, California 93243 Post Office Box 1000 Tejon Ranch Company to the Corporate Secretary: any stockholder submitting a written request exhibits, will be provided without charge to change Commission on Form 10-k, without Annual Report to the Securities and Ex- A copy of this report and the Company’s Computershare Shareowner Services LLC Jersey City, NJ 07310-1900 480 Washington Boulevard Ernst & Young LLP under the ticker symbol: TRC the New York Stock Exchange Common Stock is listed on Tejon Ranch Company Auditors Securities Listing Telephone: (661) 248-3000 Tejon Ranch, California 93243 4436 Lebec Road Post Office Box 1000 Tejon Ranch Company Corporate Directory Form 10-k Stock Transfer Agent & Registrar Corporate Office 99108_Tejon 2013 Cover Final6_R2.indd 1 3/17/14 5:07 PM Di rectors Executive Of ficer s President and Chief Executive Officer, Robert A. Stine Kent G. Snyder Chairman of the Board, Tejon Ranch Company; Real Estate Attorney Gregory S. Bielli Tejon Ranch Company John L. Goolsby Private Investments and Real Estate Anthony L. Leggio President, Bolthouse Properties LLC Norman Metcalfe Real Estate and Investments George G.C. Parker Dean Witter Distinguished Professor of Finance, Stanford Business School Geoffrey L. Stack Managing Director, SARES-REGIS Group, Real Estate Development and Management Retired President and Chief Executive Officer, Tejon Ranch Company Daniel R. Tisch Managing Member, Tower View LLC, Investment Management Michael H. Winer Portfolio Manager, Third Avenue Management LLC, Investment Management Gregory S. Bielli President and Chief Executive Officer Allen E. Lyda Executive Vice President, Chief Financial Officer and Assistant Secretary Dennis J. Atkinson Senior Vice President – Agriculture Joseph E. Drew Senior Vice President – Real Estate Gregory J. Tobias Vice President, General Counsel & Secretary Yo u r B r a n d o f O p p o r t u n i t y for future growth. Strategically two additional master planned located in the center of the state communities in the process of along interstate 5, California’s being entitled. In addition, Tejon The 270,000-acre Tejon Ranch principal north-south highway. Ranch operates a successful is the largest contiguous piece Tejon Ranch already boasts a agribusiness and possesses oil and of private property in the state thriving commercial/industrial other mineral assets. of California. Owned by Tejon center, a major upscale retail Ranch Co., this historic land, operation in the soon-to-open which dates back to 1843, repre- Outlets at Tejon, 26,000 acres of sents an unparalleled opportunity entitled land that will become home to California’s finest resi- dential/resort community, and O n t h e C o v e r Construction activity continues on The Outlets at Tejon, with the hills overlooking the new Grape- vine master planned community development area providing a dramatic background. 99108_Tejon 2013 Cover Final6_R2.indd 2 3/17/14 5:07 PM T e j o n R a n c h C o m p a n y is a diversified real estate development and agribusiness company committed to responsibly using its land and resources to meet the housing, employment and lifestyle needs of Californians and to create value for its share- holders. The Company’s Vision is guided by the Ranch’s historic core values of conservation and good stewardship. To Our Valued Shareholders Gregory S. Bielli President & Chief Executive Officer 20 13 was a year o f g rowth, and a year of transition for Tejon Ranch Company. The growth was evident in several places. We began construction on The Outlets at Tejon, the $90 million outlet retail center we’re developing in partnership with The Rockefeller Group. It is slated to open in August, and at the time of this writing, everything is on track in terms of construction and leasing. Interest in the center is very strong from both a retailer and consumer point of view, and we are confident it will open to great crowds of shoppers. With the filing of our application with Kern County, we also initiated the formal entitlement process for a third master planned community on Tejon Ranch. Referred to in the planning documents as the Grapevine Development Community, the approximate 8,000-acre mixed use community is planned for the area of the ranch located along both sides of Interstate 5, adjacent to and just south of the Tejon Ranch Commerce Center. It will consist of 12,000 residen- tial units and 10.7 million square feet of commercial, industrial, retail and institutional space. Designed as a series of villages connected by an extensive trail system, the new community will emphasize and embody sus- tainability—from design and construction to the type of lifestyle residents will enjoy. In anticipation of Grapevine, and to serve other needs on the Ranch, we solidified our water position in 2013 with the purchase of water rights to nearly 6,700 acre feet of guaranteed water owned by the Nickel Family, LLC. Given the tight water environment in California, we’ve made similar acquisitions through the years in an effort to build our water assets for both internal use and investment purposes. Late last year, we also received the final permit needed to clear the way for the eventual construction of Tejon Mountain Village. We’ve been working diligently with our partners from DMB Pacific to finalize a develop- ment and phasing plan for the community. 2013 was also a year of transition, evidenced by the fact that I’m writing this as your new president and Chief Executive Officer. Early in the year, Bob Stine announced that he would be retiring at the end of 2013. His 17-year tenure at the helm of Tejon Ranch Company is the longest in Company history. In a “what have you done for me lately” world, Bob had the unenviable task of transforming a company that was primarily focused on ranching and farming into one that was prepared and positioned to create long term shareholder value. I can say without a doubt, he did his job very well. I am proud and humbled to follow in his footsteps. As we made the transition at the end of the year and as Bob handed over the reigns of the Company to me, we had a chance to sit down and talk about his experiences and impressions over the last 17 years of running the Company, as well as the outlook for the future. I’d like to take the remaining pages of this Annual Report to share that conversation with you. Thank you for your confidence and support. May 2014 be a year of growth and prosperity for us all. Gregory S. Bielli President & Chief Executive Officer Tejon Ranch Co. Annual Report 2013 Shareholders Letter 3. In the late 1990s, Tejon Ranch made the strategic decision to divest itself of its cattle operation, choosing to use the capital necessary to operate such a business in its real estate assets instead. By leasing its land to outside ranchers, Tejon has realized a more stable income stream less subject to the swings in revenue inherent in operating a cattle business. Almonds and pistachios continue to provide significant revenue for Tejon Ranch’s agribusiness operation. World- wide demand for these high-margin crops continues to grow. In addition to almonds and pistachios, Tejon Ranch also devotes substantial acreage to the growing of wine grapes. While most of the grapes are grown for major wine producers in California, Tejon Ranch is planning on producing and marketing its own estate wine. Questi ons & Answers with Greg Bielli and Bob Stine— Greg Bielli Bob Stine Gre g Bielli: Bob, when you arrived at Tejon Ranch in 1996, the Company was very different than it is today. Can you describe Tejon Ranch Company 1996 versus Tejon Ranch Company 2013? Bob Stine: It’s a very different company. In 1996 it was an agri-business company on the American Stock Exchange with very little trading volume. The focus of the Company was principally on the cattle business and its farming activity. Today it’s a New York Stock Exchange company, with significantly higher trading volume. The Company now is focused on its land, its real estate assets. Farming is still an important com- ponent, but the Company has gotten heavily involved in the water business, more active in oil and gas, and is beginning to develop some of its real estate assets. Its role in the cattle business is now as a lessor, with no capital investment involved and with an income stream that’s about the same as when we were actively involved in running cattle. The Company and Board of Directors are now much more real estate-oriented, as opposed to 17 years ago. Gre g Bielli: When the Board hired you, they gave you a specific task: transform the company into an organization that could unlock the value inherent in the land. How did you go about accomplishing that? Bob Stine: The first several months were spent trying to understand the land. I spent a lot of time out of the office with different managers, getting out to different parts of the ranch, physically seeing what it was like and learning about the different businesses we were in. I determined fairly quickly, that from a long- range point of view, we really didn’t want to be in the cattle business. Considering the money tied up owning the cattle, the risks of raising cattle, feeding the cattle, selling the cattle and so forth, it didn’t make good business sense. So, I took a number of months just to get to understand the land and the company itself and then we went about developing and building a business plan. That began, obviously, with an annual budget, but also included a five-year plan focused on where and how we could unlock the inherent value in the land. Gre g Bi elli: What do you think are the biggest chal- lenges associated with doing business in California? And how do those obstacles impact and influence value creation, and/or could these obstacles really ultimately be opportunities for the Company? Bo b St ine: They’re definitely both—obstacles and opportunities. In California, getting your land from an existing “raw” condition to having it zoned and permitted to be able to build something or to use it— to put it to beneficial use—is extremely complicated. I think it’s made even more challenging for Tejon Ranch Company because, as the largest private land owner in the state, we’ve become a large target—a bulls eye for those who oppose any potential development. The obstacles from a local, regional, and state standpoint, as well as potential federal issues relating to the clean water act, endangered species act or other kinds of regulations, make land entitlement extremely compli- cated, very expensive, and an extraordinarily lengthy process. It’s taken us many, many years to get it done. Given how difficult it is to entitle land in California, the opportunity resides in the fact that we already have several of our potential community or project areas either fully entitled or are well under way. That means we are that much closer to unlocking the value in the land. Many real estate investors and home builders don’t want to—or can’t—take the risk and the time to invest in getting the land zoned. As a result, Califor- nia’s regulatory environment creates a scarcity of land that can be used to accommodate the state’s future growth. Even though there’s a big push for urban infill, and a certain amount of growth will certainly occur there, and it should, not everyone wants to live in dense, urban areas. Having entitled, or soon-to-be- entitled land, in a state where buildable land is scarce, is a real opportunity for Tejon Ranch. 6. Tejon Ranch Co. Annual Report 2013 Questions & Answers In 2013, Tejon Ranch continued to in- vest in its water infrastructure. Even in the midst of drought conditions in California, Tejon Ranch has the water resources necessary for current and future use. 7. Continuing its real estate develop- ment efforts in 2013, Tejon Ranch initiated the formal entitlement process for the Grapevine Develop- ment Area. This 8,000-acre master planned community will provide much needed housing for the thousands of employees at the Tejon Ranch Commerce Center. Tejon Ranch Co. Annual Report 2011 Shareholders Letter We call the Tejon Ranch Commerce Center “California’s Favorite Stopping Center” for good reason. Million of motorists stop there every year. In fact, the Starbucks at TRCC is one of the top five in the country. The Pastoria Energy Facility is a great example of how Tejon Ranch monetizes it land assets. The land lease on this 31-acre site produces millions of dollars in annual revenue. Gre g Bielli: Bob tell us about your first day in the office. What was it like? Bob Stine: Well, it was both exciting and awkward. I arrived in my dark blue suit, that I had been wearing for the previous 20-some years in business, with a crisp white shirt and tie and I think the employees wondered who the heck I was, and did I realize that I was at a ranch? Gre g Bielli: What do you consider to be the highlights of your seventeen year career at Tejon Ranch? Bob Stine: I think one would be the donation of five hundred acres of our land for a new national cem- etery. I think it was great the Company had the ability to do that, given the amount of land that we own, and it was a good thing from a patriotic standpoint. It also demonstrated the values of the Company in that we donated the land rather than trying to sell it. Another would be the conservation agreement with the environ- mental resource groups that proved to be an important, major step in helping to unlock the value in the land. We could move forward instead of spending years and years, maybe decades, in litigation with environmental groups. Additionally, I think attracting partners who were willing to invest their money in our land, in both our commercial and residential developments, would also be a highlight. Gre g Bielli: What do you think is the biggest miscon- ception that people and/or investors have about Tejon Ranch? Bob Stine: People in general, particularly those who are driving back and forth on either a frequent or infrequent basis on Interstate 5 over the Grapevine, probably have little or no idea what Tejon Ranch is. To them, it’s a sign on the Grapevine, they can see some cattle, and now they can see development at the base of the Grapevine, but I doubt the average person knows very much about the company or the land and its history. I think investors have developed a much better understanding about the Company and its long- run investment potential, because over the last ten to fifteen years, starting with the Third Avenue Fund in 1997, we’ve attracted a lot of sophisticated institutional investors. We have major investors who are very keen on our oil potential and others on the land value po- tential. I think it’s sometimes the smaller investor who doesn’t have the resources to do the necessary home- work or research that may have some misconceptions about the Ranch, but I think the sophisticated ones who have made major investments are probably pretty knowledgeable about the company. Gre g Bi elli: Bob, in your seventeen years at Tejon Ranch, you have successfully put the company into a position where it can create long-term shareholder value, now that you’ve moved away from day-to-day management, but are still remaining on the Board of Directors, what do you see to be the future of Tejon Ranch from a Board perspective? Bo b St ine: I think that my years as the CEO could potentially be described as the entitlement years; getting a business plan in place, putting the financial house in order, and negotiating a conservation agree- ment that allowed us to move forward with entitlement on up to 30,000 acres. Some of it’s completed and some of it’s coming down the home stretch. From the Board’s perspective, Greg, I think you are arriving at the beginning of the execution stage. We can see that with The Outlets at Tejon currently under construction and opening in August; we are also getting closer to an actual development plan on Mountain Village, and continuing to entitle the Grapevine and Centennial ar- eas. We’re definitely in a transition from the entitlement phase to the execution phase. It will be an exciting time for our shareholders and the Board of Directors and I’m confident in your ability to lead that process. Tejon Ranch Co. Annual Report 2013 Questions & Answers 9. Oil and gas production-and revenue-has risen sharply in the last decade. Tejon Ranch is also seeing a marked increase in oil exploration activities. Gre g Bielli: Finally, Bob, what advice would you give me as the incoming CEO? Bo b St ine: Tell us about your background and experience and how you believe it’s prepared you for this role? Bob Stine: You’ve got a great team of people who are committed to the business plan the Company has developed. My guess is that during the execu- tion phase, you may need to bring in some additional experienced real estate people and I think you’re the right person to find those people. You’re going to find full support from your Board of Directors, and as you personally transition from a private company to a pub- lic one, just as I did 17 years ago, I would be diligent in making sure you keep your Board informed so they can provide the guidance and oversight the sharehold- ers expect. And I hope you enjoy the journey as much as I did. Bob Stine: Greg, I think the Board made an excel- lent choice in hiring you to be the next CEO of Tejon Ranch Company. What attracted you to the position and the Company in the first place? Gre g Bielli: There are a number of reasons why I thought becoming CEO of Tejon Ranch Company would be the perfect job for me and why the Company would be an ideal organization to work for, beginning first with the diversity of its operations. From farming and oil production to real estate development, Tejon offered a tremendous professional opportunity. The second reason would have to be the people. The Board members who handled the search did so in a very professional manner, and the many welcoming Tejon staff members I met through the process impressed me with their talents and character. I was also frankly motivated by the opportunity, at this point in my career, to establish my own legacy by continuing to build upon Tejon Ranch Company’s rich legacy and heritage, both as a publicly traded company and as a California landmark. Gre g Bi elli: I have been very fortunate in my career to have many people help me along the way and put me in positions, both in the private and public sectors, to learn and grow. Professionally, my 25 years in real estate, principally developing master planned communities, has exposed me to many aspects of enti- tling and executing major real estate projects. This will be beneficial in regard to the entitlement efforts that are still before us at the ranch, as well as those develop- ment projects we’re in the process of executing—the Tejon Ranch Commerce Center and The Outlets at Tejon—or, in the case of Tejon Mountain Village, those fully entitled developments we’re in the process of positioning for future execution. With my extensive public policy experience, from being an elected official to participating in many public policy issues over the years, I’ll be able to help the Company address those problematic, complicated issues that are only becoming increasingly more difficult to resolve. Bo b St ine: You’ve only been here a few short months, but what do you envision to be the short and long-range future of Tejon Ranch? Gre g Bi elli: In the short term, we need to continue to focus on completing The Outlets at Tejon, expand the opportunities at the Commerce Center, invest in our agricultural business, support our oil and gas lessees, and entitle our remaining communi- ties. Long term, we’ll continue our investment in water resources, expand and execute our real estate oppor- tunities, support our existing team members and look to expand our talent pool for the future. Bottom line, we’ll always be looking for opportunities to grow our brand and our business so that we’re continually creating long-term value in the Company for the benefit of our shareholders. 10. Tejon Ranch Co. Annual Report 2013 Questions & Answers Con soli dated Balance Sheets ($ in thousands) ASSET S Current Assets: Cash and cash equivalents Marketable securities - available-for-sale Accounts receivable Inventories Prepaid expenses and other current assets Deferred tax assets Total current assets Property and equipment - net of depreciation (includes $74,726 at December 31, 2013 and $72,115 at December 31, 2012, attributable to Centennial Founders LLC, Note 15) Investments in unconsolidated joint ventures Long-term water assets Long-term deferred tax assets Other assets TOTAL AS S ETS LIABILI TIES AN D EQU ITY Current Liabilities: Trade accounts payable Accrued liabilities and other Income taxes payable Deferred income Current portion of long-term debt Total current liabilities Long-term debt, less current portion Long-term deferred gains Other liabilities Pension liability Total liabilities Commitments and contingencies Equity: Tejon Ranch Co. Stockholders’ Equity Common stock, $.50 par value per share: Authorized shares - 30,000,000 Issued and outstanding shares - 20,563,023 at December 31, 2013 and 20,085,865 at December 31, 2012 Additional paid-in capital Accumulated other comprehensive loss Retained earnings Total Tejon Ranch Co. Stockholders’ Equity Non-controlling interest Total equity TOTAL LIAB ILIT IES AN D E QU I T Y 12 Tejon Ranch Co. and Subsidiaries december 31 2012 2013 $ 9,031 $ 55,436 7,108 3,510 7,707 452 83,244 7,219 65,049 8,768 3,839 4,881 997 90,753 146,542 62,604 46,754 1,592 2,143 146,590 54,022 28,565 5,376 2,550 $ 342,879 $ 327,856 $ 5,028 $ 2,647 — 865 234 8,774 4,459 2,248 6,518 693 22,692 3,845 2,132 — 1,195 41 7,213 212 2,248 6,508 3,416 19,597 10,043 10,282 198,117 210,848 (5,118) (3,333) 65,550 62,785 268,592 280,582 39,667 39,605 320,187 308,259 $ 342,879 $ 327,856 Con soli dated Statements of O per ation s ($ in thousands, except per share amounts) REV E NU ES Real estate - commercial/industrial Real estate - resort/residential Mineral resources Farming Total revenues CO STS AND EXPEN S ES : Real estate - commercial/industrial Real estate - resort/residential Mineral resources Farming Corporate expenses Total expenses Operating income OTH ER IN C OME: Investment income Interest income (expense) Other income Total other income Income from operations before equity in earnings of unconsolidated joint ventures Equity in earnings of unconsolidated joint ventures, net Income before income tax expense Income tax expense Net income Net loss attributable to non-controlling interest Net income attributable to common stockholders Net income per share attributable to common stockholders, basic Net income per share attributable to common stockholders, diluted $ $ $ year ended december 31 2011 2012 2013 $ 11,148 $ 1,266 10,242 22,682 45,338 9,941 $ 583 14,012 22,553 47,089 13,746 16,134 12,206 21,012 63,098 13,221 3,942 209 12,575 12,277 42,224 20,874 1,260 — 98 1,358 22,232 916 23,148 7,367 15,781 (113) 15,894 0.80 0.80 12,902 3,351 462 14,806 12,641 44,162 1,176 12,271 4,761 334 13,323 13,272 43,961 3,128 941 — 66 1,007 2,183 4,006 6,189 2,086 4,103 (62) 4,165 $ 0.21 $ 0.20 $ 1,242 (12) 113 1,343 4,471 2,535 7,006 2,723 4,283 (158) 4,441 $ 0.22 $ 0.22 $ Con soli dated Statements of Comprehensive In come ($ in thousands) Net income Other comprehensive income (loss): Unrealized gains (losses) on available for sale securities Benefit plan adjustments SERP liability adjustments Equity in other comprehensive income of unconsolidated joint venture Other comprehensive loss before taxes Benefit for income taxes related to other comprehensive loss items Other comprehensive loss Comprehensive income Comprehensive loss attributable to non-controlling interests Comprehensive income attributable to common stockholders $ $ year ended december 31 2011 15,781 2012 4,283 $ 2013 4,103 $ (348) 2,218 1,098 — 2,968 (1,183) 1,785 5,888 (62) 5,950 $ 182 (922) (12) 152 (600) 238 (362) 3,921 (158) 4,079 $ (82) (2,574) (1,825) 217 (4,264) 1,699 (2,565) 13,216 (113) 13,329 13. Con soli dated S tatements o f Equity Common Stock Shares Outstanding Common Stock Other Compre- Additional Paid-In hensive Capital Income (Loss) Total Retained Stockholders’ Equity Earnings Non- controlling Interest Total Equity 19,747,470 $ 9,874 $ 183,816 $ (2,191) $ 45,215 $ 236,714 $ 39,938 — — — (2,565) 15,894 — 15,894 (2,565) 276,652 15,781 (2,565) (113) — ($ in thousands, except share information) Balance, December 31, 2010 Net income (loss) Other comprehensive income Exercise of stock options and related tax benefit of $634 Restricted stock issuance Stock compensation Shares withheld for taxes Balance, December 31, 2011 Net income Other comprehensive income Exercise of stock options and related tax benefit of $8 Restricted stock issuance Stock compensation Shares withheld for taxes Balance, December 31, 2012 Net income Other comprehensive income Exercise of stock options and related tax benefit of $3 Restricted stock issuance Common stock issued for water purchase Stock compensation Shares withheld for taxes and tax benefit of vested shares Warrants issued as — — 205,165 52,069 — (28,998) 19,975,706 — — 13,641 179,172 — (82,654) 20,085,865 — — 7,567 391,555 251,876 — — — 103 26 — (15) 5,773 (26) 5,507 (797) 9,988 — — 194,273 — — 7 89 — (41) 363 (89) 5,832 (2,262) 10,043 — — 198,117 — — 4 196 126 — 207 (196) 9,244 1,223 (173,840) (87) (4,677) — — — — (4,756) — (362) — — — — (5,118) — 1,785 — — — — 61,109 4,441 — — — — — 65,550 4,165 — 5,876 — 5,507 (812) 260,614 4,441 (362) 370 — 5,832 (2,303) 268,592 4,165 1,785 — — — — 39,825 (158) — — — — — 39,667 (62) — 5,876 — 5,507 (812) 300,439 4,283 (362) 370 — 5,832 (2,303) 308,259 4,103 1,785 — — — — — — — — 211 — 9,370 1,223 (4,764) — — — — 211 — 9,370 1,223 (4,764) — — (3,333) $ 62,785 $ 280,582 $ 39,605 $ 320,187 (6,930) — — dividends (3,000,000 warrants) — — 6,930 Balance, December 31, 2013 20,563,023 $ 10,282 $ 210,848 $ 14 Tejon Ranch Co. and Subsidiaries Con soli dated Statements of Cash Flows ($ in thousands) OPER ATING ACTI VITIE S Net income Adjustments to reconcile net income to net cash provided by (used in) operating activities: Depreciation and amortization Amortization of premium/discount of marketable securities Equity in earnings Non-cash retirement plan expense Gain on sale of real estate/assets Gain on sale of easements Deferred income taxes Amortization of stock compensation expense Excess tax benefit from stock-based compensation Distribution of earnings from unconsolidated joint ventures Changes in operating assets and liabilities: Receivables, inventories and other assets, net Current liabilities, net Net cash provided by operating activities IN V ES TIN G ACTIV I TI ES Maturities and sales of marketable securities Funds invested in marketable securities Property and equipment expenditures Reimbursement of outlet center costs Reimbursement proceeds from Communities Facilities District Proceeds from sale of real estate Proceeds from sale of easements Investment in unconsolidated joint ventures Distribution of equity from unconsolidated joint ventures Investments in long-term water assets Other Net cash used in investing activities F INAN CIN G ACTI V ITIES Borrowings of short-term debt Repayments of short-term debt Borrowings of long-term debt Repayments of long-term debt Proceeds from exercise of stock options Taxes on vested stock grants Net cash provided by (used in) financing activities Increase (decrease) in cash and cash equivalents Cash and cash equivalents at beginning of year CA S H AN D CA S H EQUIVAL EN TS AT E N D OF Y E AR S U PPLEM ENTA L CAS H FLOW INF ORM AT I ON Accrued capital expenditures included in current liabilities Sale of assets accounted as direct finance leases Taxes paid (net of refunds) Common stock issued for water purchase twelve months ended december 31 2011 2012 2013 $ 4,103 $ 4,283 $ 15,781 4,226 879 (4,006) 865 (46) — (8) 929 — — 4,954 874 (2,535) 1,047 (676) — 1,810 5,440 8 7,200 3,629 641 (916) 528 (4,058) (15,750) (162) 5,340 (634) — 3,712 (1,118) 9,536 (1,761) (6,552) 14,092 2,570 2,515 9,484 29,779 (21,392) (21,558) 512 17,809 — — (3,415) 1,000 (9,635) (711) (7,611) 19,809 19,143 (16,984) (39,448) (20,669) (13,649) — — 4,988 15,750 (4,457) — — (495) (23,273) (18,168) — — — — (6,154) 1,512 (797) 10 — — 4,750 (310) 211 (4,764) (113) 1,812 7,219 9,031 $ — 1,500 — (1,500) — — (35) (39) 5,876 370 (812) (2,303) 5,029 (1,972) (3,655) (11,153) 18,372 22,027 7,219 $ 18,372 2,058 $ — $ 15 $ 9,370 $ 2,293 $ 913 $ 4,021 $ — $ 590 — 5,002 — $ $ $ $ $ 15. Pe rfor mance Graph The following graph is a comparison of cumulative total shareowner returns for the Company, the Dow Jones Equity Market Index, and the Dow Jones Real Estate Index for the period shown. s r a l l o d 250 225 200 175 150 125 100 75 50 25 0 12/31/08 12/31/09 12/31/10 12/30/11 12/30/12 12/30/13 tejon ranch dj equity market d j real estate - Assumes $100 invested on December 31, 2008 - Total return assumes reinvestment of dividends - Fiscal year ending December 31 Tejon Ranch DJ Equity Market DJ Real Estate 2009 18.11% 28.59% 30.81% 2010 -5.72% 17.51% 26.93% 2011 -11.14% 1.07% 6.05% 2012 14.71% 16.38% 18.91% 2013 30.91% 33.47% 1.79% The stock price performance depicted in the above graph is not necessarily indicative of future price per- formance. The Performance Graph will not be deemed to be incorporated by reference in any filing by the Company under the Securities Act of 1933 or the Securities Exchange Act of 1934, except where the Company specifically incorporates the Performance Graph by reference. The Dow Jones Real Estate Index, for the most part, includes companies which have revenues substantially greater than those of the Company. The Company is unaware of any industry or line-of-business index that is more nearly comparable. quarter First Second Third Fourth high $30.81 $31.00 $34.23 $38.79 2013 low $28.44 $26.66 $28.58 $29.49 high $31.64 $30.94 $31.08 $30.78 2012 low $24.33 $25.10 $25.25 $25.70 As of February 28, 2014, there were 342 registered owners of record of our Common Stock. 16 Tejon Ranch Co. and Subsidiaries Directors Executive Of ficers Kent G. Snyder Chairman of the Board, Tejon Ranch Company; Real Estate Attorney Gregory S. Bielli President and Chief Executive Officer, Tejon Ranch Company John L. Goolsby Private Investments and Real Estate Anthony L. Leggio President, Bolthouse Properties LLC Norman Metcalfe Real Estate and Investments George G.C. Parker Dean Witter Distinguished Professor of Finance, Stanford Business School Geoffrey L. Stack Managing Director, SARES-REGIS Group, Real Estate Development and Management Robert A. Stine Retired President and Chief Executive Officer, Tejon Ranch Company Daniel R. Tisch Managing Member, Tower View LLC, Investment Management Michael H. Winer Portfolio Manager, Third Avenue Management LLC, Investment Management Gregory S. Bielli President and Chief Executive Officer Allen E. Lyda Executive Vice President, Chief Financial Officer and Assistant Secretary Dennis J. Atkinson Senior Vice President – Agriculture Joseph E. Drew Senior Vice President – Real Estate Gregory J. Tobias Vice President, General Counsel & Secretary Corporate Directory Corporate Office Stock Transfer Agent & Registrar Form 10-k Tejon Ranch Company Post Office Box 1000 4436 Lebec Road Tejon Ranch, California 93243 Telephone: (661) 248-3000 Computershare Shareowner Services LLC 480 Washington Boulevard Jersey City, NJ 07310-1900 Securities Listing Auditors Tejon Ranch Company Common Stock is listed on the New York Stock Exchange under the ticker symbol: TRC Ernst & Young LLP A copy of this report and the Company’s Annual Report to the Securities and Ex- change Commission on Form 10-k, without exhibits, will be provided without charge to any stockholder submitting a written request to the Corporate Secretary: Tejon Ranch Company Post Office Box 1000 Tejon Ranch, California 93243 Yo u r B r a n d o f O p p o r t u n i t y for future growth. Strategically two additional master planned located in the center of the state communities in the process of along interstate 5, California’s being entitled. In addition, Tejon The 270,000-acre Tejon Ranch principal north-south highway. Ranch operates a successful is the largest contiguous piece Tejon Ranch already boasts a agribusiness and possesses oil and of private property in the state thriving commercial/industrial other mineral assets. of California. Owned by Tejon center, a major upscale retail Ranch Co., this historic land, operation in the soon-to-open which dates back to 1843, repre- Outlets at Tejon, 26,000 acres of sents an unparalleled opportunity entitled land that will become home to California’s finest resi- dential/resort community, and O n t h e C o v e r Construction activity continues on The Outlets at Tejon, with the hills overlooking the new Grape- vine master planned community development area providing a dramatic background. 99108_Tejon 2013 Cover Final6_R2.indd 2 3/17/14 5:07 PM Y O U R B R A N D O F O P P O R T U N I T Y w w w. t e j o n r a n c h . c o m T EJON RANCH COMPANY 2 01 3 A N N UA L R E P O R T Tejon Ranch, California 93243 Post Office Box 1000 Tejon Ranch Company to the Corporate Secretary: any stockholder submitting a written request exhibits, will be provided without charge to change Commission on Form 10-k, without Annual Report to the Securities and Ex- A copy of this report and the Company’s Computershare Shareowner Services LLC Jersey City, NJ 07310-1900 480 Washington Boulevard Ernst & Young LLP under the ticker symbol: TRC the New York Stock Exchange Common Stock is listed on Tejon Ranch Company Auditors Securities Listing Telephone: (661) 248-3000 Tejon Ranch, California 93243 4436 Lebec Road Post Office Box 1000 Tejon Ranch Company Corporate Directory Form 10-k Stock Transfer Agent & Registrar Corporate Office 99108_Tejon 2013 Cover Final6_R2.indd 1 3/17/14 5:07 PM 

Continue reading text version or see original annual report in PDF format above