10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-Q

(Mark One)

x QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended June 30, 2013

Or

¨ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from              to             

Commission File Number: 1-7183

TEJON RANCH CO.

(Exact name of Registrant as specified in its charter) 

Delaware	77-0196136
(State or other jurisdiction of incorporation or organization)	(IRS Employer Identification No.)

P.O. Box 1000, Lebec, California 93243

(Address of principal executive offices)

Registrant’s telephone number, including area code: (661) 248-3000

____________________________________________________ 

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.    Yes  x    No  ¨

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).    Yes  x    No  ¨

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer”, “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act. (Check one):

Large accelerated filer ¨                            Accelerated filer x

Non-accelerated filer ¨Non-accelerated filer ¨

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes  ¨ No  x

The number of the Company’s outstanding shares of Common Stock on August 1, 2013 was 20,140,872.

TEJON RANCH CO. AND SUBSIDIARIES

INDEX

		Page No.
PART I.	FINANCIAL INFORMATION
Item 1.	Financial Statements
	Unaudited Consolidated Statements of Operations for the Three and Six Months Ended June 30, 2013 and 2012	3
	Unaudited Consolidated Statements of Comprehensive Income for the Three and Six Months Ended June 30, 2013 and 2012	4
	Consolidated Balance Sheets as of June 30, 2013 (unaudited) and December 31, 2012	5
	Unaudited Consolidated Statements of Cash Flows for the Six Months Ended June 30, 2013 and 2012	6
	Unaudited Consolidated Statements of Equity for the Six Months Ended June 30, 2013	7
	Notes to Unaudited Consolidated Financial Statements	8
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	19
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	25
Item 4.	Controls and Procedures	27
PART II.	OTHER INFORMATION
Item 1.	Legal Proceedings	28
Item 1A.	Risk Factors	28
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	28
Item 3.	Defaults Upon Senior Securities	28
Item 4.	Mine Safety Disclosures	28
Item 5.	Other Information	28
Item 6.	Exhibits	29
SIGNATURES

2

PART I – FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

TEJON RANCH CO. AND SUBSIDIARIES

UNAUDITED CONSOLIDATED STATEMENTS OF OPERATIONS

(In thousands, except per share amounts)

	Three Months Ended June 30						Six Months Ended June 30
	2013			2012			2013			2012
Revenues:
Real estate - commercial/industrial	$	2,825		$	2,623		$	5,547		$	4,771
Real estate - resort/residential	234			94			471			135
Mineral resources	2,765			3,879			5,631			7,785
Farming	1,651			1,253			5,586			4,737
Total revenues	7,475			7,849			17,235			17,428
Costs and Expenses:
Real estate - commercial/industrial	3,141			2,913			6,254			5,938
Real estate - resort/residential	1,265			1,137			1,574			2,155
Mineral resources	65			40			225			157
Farming	1,179			960			3,436			3,221
Corporate expenses	658			3,713			4,489			6,847
Total expenses	6,308			8,763			15,978			18,318
Operating income (loss)	1,167			(914		)	1,257			(890		)
Other Income:
Investment income	238			317			513			635
Interest income (expense)	—			(33		)	—			(35		)
Other income	14			11			17			35
Total other income	252			295			530			635
Income (loss) from operations before equity in earnings of unconsolidated joint ventures	1,419			(619		)	1,787			(255		)
Equity in earnings of unconsolidated joint ventures, net	1,270			893			1,679			534
Income before income tax expense (benefit)	2,689			274			3,466			279
Income tax expense (benefit)	686			164			833			(64		)
Net income	2,003			110			2,633			343
Net loss attributable to non-controlling interest	(81		)	(8		)	(66		)	(50		)
Net income attributable to common stockholders	$	2,084		$	118		$	2,699		$	393
Net income per share attributable to common stockholders, basic	$	0.10		$	0.01		$	0.13		$	0.02
Net income per share attributable to common stockholders, diluted	$	0.10		$	0.01		$	0.13		$	0.02

3

TEJON RANCH CO. AND SUBSIDIARIES

UNAUDITED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)

(In thousands)

	Three Months Ended June 30						Six Months Ended June 30
	2013			2012			2013			2012
Net income	$	2,003		$	110		$	2,633		$	343
Other comprehensive income (loss):
Unrealized gains (losses) on available for sale securities	(409		)	(68		)	(452		)	151
Equity in other comprehensive income of unconsolidated joint venture	—			64			—			119
Other comprehensive income (loss) before taxes	(409		)	(4		)	(452		)	270
(Provisions) benefit for income taxes related to other comprehensive income (loss) items	164			1			181			(108		)
Other comprehensive income (loss)	(245		)	(3		)	(271		)	162
Total comprehensive income	1,758			107			2,362			505
Total comprehensive income (loss) attributable to non-controlling interests	(81		)	(8		)	(66		)	(50		)
Total comprehensive income attributable to common stockholders	$	1,839		$	115		$	2,428		$	555

See accompanying notes.

4

TEJON RANCH CO. AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

(In thousands, except per share and share data)

	June 30, 2013			December 31, 2012
	(unaudited)
ASSETS
Current Assets:
Cash and cash equivalents	$	10,478		$	7,219
Marketable securities - available-for-sale	64,916			65,049
Accounts receivable	4,297			8,768
Inventories	9,586			3,839
Prepaid expenses and other current assets	4,084			4,881
Deferred tax assets	1,178			997
Total current assets	94,539			90,753
Property and equipment - net of depreciation (includes $73,833 at June 30, 2013 and $72,115 at December 31, 2012, attributable to Centennial Founders LLC, Note 12)	140,013			146,590
Investments in unconsolidated joint ventures	59,235			54,022
Long-term water assets	28,648			28,565
Long-term deferred tax assets	5,376			5,376
Other assets	2,062			2,550
TOTAL ASSETS	$	329,873		$	327,856
LIABILITIES AND EQUITY
Current Liabilities:
Trade accounts payable	$	3,316		$	3,845
Accrued liabilities and other	3,282			2,132
Income taxes payable	101			—
Deferred income	754			1,195
Current portion of long-term debt	42			41
Total current liabilities	7,495			7,213
Long-term debt, less current portion	191			212
Long-term deferred gains	2,248			2,248
Other liabilities	7,220			6,508
Pension liability	3,092			3,416
Total liabilities	20,246			19,597
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 - 20,136,286 at June 30, 2013 and 20,085,865 at December 31, 2012	10,068			10,043
Additional paid-in capital	197,098			198,117
Accumulated other comprehensive loss	(5,389		)	(5,118		)
Retained earnings	68,249			65,550
Total Tejon Ranch Co. Stockholders’ Equity	270,026			268,592
Non-controlling interest	39,601			39,667
Total equity	309,627			308,259
TOTAL LIABILITIES AND EQUITY	$	329,873		$	327,856

See accompanying notes.

5

TEJON RANCH CO. AND SUBSIDIARIES

UNAUDITED CONSOLIDATED STATEMENTS OF CASH FLOWS

(In thousands)

	Six Months Ended June 30
	2013			2012
Operating Activities
Net income	$	2,633		$	343
Adjustments to reconcile net income to net cash provided by (used in) operating activities:
Depreciation and amortization	1,767			2,553
Amortization of premium/discount of marketable securities	459			415
Equity in earnings of unconsolidated joint ventures, net	(1,679		)	(534		)
Non-cash retirement plan expense	325			200
Gains on sales of real estate/assets	—			(679		)
(Reversal) amortization of stock compensation expense	(568		)	3,658
Distribution of earnings from unconsolidated joint ventures	—			3,000
Changes in operating assets and liabilities:
Receivables, inventories and other assets, net	643			739
Current liabilities, net	(948		)	(4,902		)
Net cash provided by (used in) operating activities	2,632			4,793
Investing Activities
Maturities and sales of marketable securities	14,066			9,823
Funds invested in marketable securities	(14,844		)	(10,556		)
Property and equipment expenditures	(10,653		)	(9,410		)
Investment in long term term water assets	(437		)	—
Investment in unconsolidated joint ventures	(1,375		)	(4,579		)
Distribution of equity from unconsolidated joint ventures	—			1,012
Reimbursement of outlet center costs	512			96
Reimbursement proceeds from community facilities district	14,139			—
Other	(127		)	(1,636		)
Net cash provided by (used in) investing activities	1,281			(15,250		)
Financing Activities
Borrowings of short-term debt	—			1,500
Repayments of short-term debt	(20		)	(1,500		)
Repayments of long-term debt	—			(19		)
Proceeds from exercise of stock options	211			123
Taxes on vested stock grants	(845		)	(2,270		)
Net cash used in financing activities	(654		)	(2,166		)
Increase (decrease) in cash and cash equivalents	3,259			(12,623		)
Cash and cash equivalents at beginning of year	7,219			18,372
Cash and cash equivalents at end of period	$	10,478		$	5,749
Supplemental cash flow information
Accrued capital expenditures included in current liabilities	$	1,122		$	428

See accompanying notes.

6

TEJON RANCH CO. AND SUBSIDIARIES

UNAUDITED CONSOLIDATED STATEMENTS OF EQUITY

(In thousands, except shares outstanding)

	Common Stock Shares Outstanding		Common Stock			Additional Paid-In Capital			Accumulated Other Comprehensive Income (Loss)			Retained Earnings		Total Tejon Ranch Co.’s Stockholders' Equity			Noncontrolling Interest			Total Equity
Balance at January 1, 2012	19,975,706		$	9,988		$	194,273		$	(4,756	)	$	61,109	$	260,614		$	39,825		$	300,439
Net income	—		—			—			—			4,441		4,441			(158		)	4,283
Other comprehensive income	—		—			—			(362		)	—		(362		)	—			(362		)
Exercise of stock options and related tax benefit of $8	13,641		7			363			—			—		370			—			370
Restricted stock issuance	179,172		89			(89		)	—			—		—			—			—
Stock compensation	—		—			5,832			—			—		5,832			—			5,832
Shares withheld for taxes	(82,654	)	(41		)	(2,262		)	—			—		(2,303		)	—			(2,303		)
Balance at December 31, 2012	20,085,865		10,043			198,117			(5,118		)	65,550		268,592			39,667			308,259
Net income	—		—			—			—			2,699		2,699			(66		)	2,633
Other comprehensive income	—		—			—			(271		)	—		(271		)	—			(271		)
Exercise of stock options and related tax benefit of $3	7,567		4			207			—			—		211			—			211
Restricted stock issuance	71,163		35			(35		)	—			—		—			—			—
Stock compensation	—		—			(360		)	—			—		(360		)	—			(360		)
Shares withheld for taxes	(28,309	)	(14		)	(831		)	—			—		(845		)	—			(845		)
Balance at June 30, 2013	20,136,286		$	10,068		$	197,098		$	(5,389	)	$	68,249	$	270,026		$	39,601		$	309,627

See accompanying notes.

7

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

June 30, 2013

1.    BASIS OF PRESENTATION

The summarized information of Tejon Ranch Co. and its subsidiaries, (collectively, the “Company”), furnished pursuant to the instructions to Part I of Form 10-Q is unaudited and reflects all adjustments which are, in the opinion of the Company’s management, necessary for a fair statement of the results for the interim period. All such adjustments are of a normal recurring nature. The Company has reclassified certain prior period amounts in the consolidated statements of operations, and cash flows to conform to the current year presentation. We have evaluated subsequent events through the date of issuance of our consolidated financial statements.

The periods ending June 30, 2013 and 2012 include the consolidation of Centennial Founders, LLC’s statement of operations within the resort /residential segment and statements of cash flows. The Company’s June 30, 2013 and December 31, 2012 balance sheets and statements of equity are presented on a consolidated basis including the consolidation of Centennial Founders, LLC.

The Company has identified four reportable segments: commercial/industrial real estate development; resort/residential real estate development; mineral resources; and farming. The Company determined that the mineral resources segment should be reported, as a result of an evaluation of the Company's operations during the fourth quarter of 2012. Mineral resources collects royalty income from oil and gas leases, rock and aggregate leases, and from a cement company. Information for the Company’s reported segments is presented in its consolidated statements of operations. The Company’s reporting segments follow the same accounting policies used for the Company’s consolidated financial statements. Management evaluates a segment’s performance based upon a number of factors including pretax results.

The results of the period reported herein are not indicative of the results to be expected for the full year due to the seasonal nature of the Company’s agricultural activities and timing of real estate sales and leasing activities. Historically, the Company’s largest percentages of farming revenues are recognized during the third and fourth quarters of the fiscal year.

For further information and a summary of significant accounting policies, refer to the Consolidated Financial Statements and notes thereto included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2012.

2.     NET INCOME (LOSS) PER SHARE

Basic net income or loss per share is based upon the weighted average number of shares of common stock outstanding during the period. Diluted net income per share is based upon the weighted average number of shares of common stock outstanding and the weighted average number of shares outstanding assuming the issuance of common stock upon exercise of stock options and vesting of stock grants per U.S. generally accepted accounting principles, or GAAP.

	Three Months Ended June 30		Six Months Ended June 30
	2013	2012	2013	2012
Weighted average number of shares outstanding:
Common stock	20,136,188	20,026,354	20,118,152	20,008,358
Common stock equivalents-stock options, grants	16,323	61,278	17,039	75,372
Diluted shares outstanding	20,152,511	20,087,632	20,135,191	20,083,730

3.     MARKETABLE SECURITIES

The Company classifies its securities as available-for-sale and therefore is required to adjust securities to fair value at each reporting date. All costs and both realized and unrealized gains and losses on securities are determined on a specific identification basis.

8

The following is a summary of available-for-sale securities at:

		June 30, 2013				December 31, 2012
($ in thousands)	Fair Value Hierarchy	Cost		Estimated Fair Value		Cost		Estimated Fair Value
Certificates of deposit
with unrecognized losses for less than 12 months		$	1,623	$	1,615	$	1,578	$	1,571
with unrecognized losses for more than 12 months		354		353		508		507
with unrecognized gains		6,633		6,667		5,586		5,628
Total Certificates of deposit	Level 1	8,610		8,635		7,672		7,706
US Treasury and agency notes
with unrecognized losses for less than 12 months		3,913		3,894		3,057		3,024
with unrecognized losses for more than 12 months		5,312		5,288		874		873
with unrecognized gains		7,195		7,244		12,175		12,267
Total US Treasury and agency notes	Level 2	16,420		16,426		16,106		16,164
Corporate notes
with unrecognized losses for less than 12 months		9,479		9,305		1,993		1,971
with unrecognized losses for more than 12 months		329		328		201		200
with unrecognized gains		20,423		20,668		29,210		29,653
Total Corporate notes	Level 2	30,231		30,301		31,404		31,824
Municipal notes
with unrecognized losses for less than 12 months		2,185		2,160		1,961		1,948
with unrecognized losses for more than 12 months		720		716		620		613
with unrecognized gains		6,618		6,678		6,702		6,794
Total Municipal notes	Level 2	9,523		9,554		9,283		9,355
		$	64,784	$	64,916	$	64,465	$	65,049

We evaluate our securities for other-than-temporary impairment based on the specific facts and circumstances surrounding each security valued below its cost. Factors considered include the length of time the securities have been valued below cost, the financial condition of the issuer, industry reports related to the issuer, the severity of any decline, our intention not to sell the security, and our assessment as to whether it is not more likely than not that we will be required to sell the security before a recovery of its amortized cost basis. We then segregate the loss between the amounts representing a decrease in cash flows expected to be collected, or the credit loss, which is recognized through earnings, and the balance of the loss which is recognized through other comprehensive income.

At June 30, 2013, the fair market value of investment securities exceeded the cost basis by $132,000. The cost basis includes any other-than-temporary impairments that have been recorded for the securities. None have been recorded at June 30, 2013. The Company has determined that any unrealized losses in the portfolio are temporary as of June 30, 2013. The Company believes that market factors such as, changes in interest rates, liquidity discounts, and premiums required by market participants rather than an adverse change in cash flows or a fundamental weakness in credit quality of the issuer have led to the temporary declines in value. In the future based on changes in the economy, credit markets, financial condition of issuers, or market interest rates, this could change.

As of June 30, 2013, the adjustment to accumulated other comprehensive income (loss) in consolidated equity for the temporary change in the value of securities reflects a decrease in the market value of available-for-sale securities of $271,000, which includes estimated taxes of $181,000.

As of June 30, 2013, the Company’s gross unrealized holding gains equal $388,000 and gross unrealized holding losses equal $256,000.

9

The following tables summarize the maturities, at par, of marketable securities by year:

(in thousands)
At June 30, 2013	2013		2014		2015		2016		2017		Total
Certificates of deposit	$	1,255	$	1,627	$	4,213	$	1,301	$	97	$	8,493
U.S. Treasury and agency notes	3,566		7,287		3,448		1,750		391		16,442
Corporate notes	2,988		6,729		10,017		5,650		3,574		28,958
Municipal notes	1,335		4,365		2,205		1,135		205		9,245
	$	9,144	$	20,008	$	19,883	$	9,836	$	4,267	$	63,138

(in thousands)
At December 31, 2012	2013		2014		2015		2016		Total
Certificates of deposit	$	1,268	$	1,627	$	4,316	$	301	$	7,512
U.S. Treasury and agency notes	6,285		7,248		2,633		11		16,177
Corporate notes	10,916		6,729		9,420		3,325		30,390
Municipal notes	2,305		4,340		1,960		400		9,005
	$	20,774	$	19,944	$	18,329	$	4,037	$	63,084

The Company’s investments in corporate notes are with companies that have an investment grade rating from Standard & Poor’s.

4.     LONG TERM WATER ASSETS

Long term assets consist of water and water contracts held for future use or sale. The water is held at cost which includes the price paid for the water and the cost to pump and deliver the water from the California aqueduct into the water bank. Water is currently held in a water bank on Company land in southern Kern County. Company banked water costs also include costs related to the right to receive additional acre feet of water in the future from the Antelope Valley East Kern Water Agency, or AVEK. The Company has also banked water within an AVEK owned water bank.

The Company also owns additional transferable water and holds State Water Project, or SWP contracts with the Tulare Water Storage and Dudley-Ridge Water Storage Districts to supply water through 2035. These contracts are being amortized using the straight line method over that period. Annual amortization for the next five years will be $708,000 per year. Water contracts with the Wheeler Ridge Maricopa Water Storage District, or WRMWSD, and the Tejon-Castac Water District, or TCWD, are also in place, but were entered into with each district at inception of the contract and not purchased later from third parties, and do not have a related financial value on the books of the Company. Therefore there is no amortization expense related to these contracts. Annual costs associated with these contracts are expensed each quarter.

10

Purchased water assets consist of the following:

(in acre feet)	June 30, 2013	December 31, 2012
Banked water and water for future delivery
AVEK water bank	13,038	11,478
Company water bank	8,818	8,700
AVEK water for future delivery	2,362	2,362
Total Company and AVEK banked water	24,218	22,540
Transferable water with AVEK	14,786	14,786
SWP contracts	3,444	3,444
Total purchased water - third parties	42,448	40,770
WRMWSD - Contracts with Company	15,547	15,547
TCWD - Contracts with Company	5,479	5,479
TCWD - Banked water contracted to Company	38,943	38,943
Total purchased and contracted water sources in acre feet	102,417	100,739

($ in thousands)	June 30, 2013			December 31, 2012
Banked water and water for future delivery - Company and AVEK	$	4,775		$	4,448
Transferable water	8,988			8,988
SWP Contracts (net of accumulated amortization of $2,375 and $2,021 at June 30, 2013 and December 31 2012, respectively)	15,593			15,837
Total water assets	29,356			29,273
Less: current portion	(708		)	(708		)
Long-term water assets	$	28,648		$	28,565

5.     ACCRUED LIABILITIES AND OTHER

Accrued liabilities and other consists of the following:

($ in thousands)	June 30, 2013		December 31, 2012
Accrued vacation	$	687	$	674
Accrued paid personal leave	640		662
Accrued bonus	1,316		573
Other	639		223
	$	3,282	$	2,132

6.     SHORT-TERM AND LONG TERM DEBT

Long-term debt consists of the following:

($ in thousands)	June 30, 2013			December 31, 2012
Note payable to a bank	$	233		$	253
Less current portion	(42		)	(41		)
	$	191		$	212

This debt is being used to provide long-term financing for a building being leased to Starbucks and the debt is secured by the leased building and land. The balance of the long-term debt instrument listed above approximates the fair value of the instrument.

We have a long-term revolving line of credit of $30,000,000 that, as of June 30, 2013, had no outstanding balance. At the Company’s option, the interest rate on this line of credit can float at 2.50% over a selected LIBOR rate or can be fixed at 2.25% above LIBOR for a fixed rate term. During the term of this credit facility (which matures in October 2013), we can borrow at any time and partially or wholly repay any outstanding borrowings and then re-borrow, as necessary. Under the terms of the line of credit, we must maintain tangible net worth, defined as total equity, including noncontrolling interest, plus debt less

11

intangible assets, of not less than $175,000,000 and liquid assets of not less than $25,000,000. At June 30, 2013 our tangible net worth was $309,860,000 and liquid assets were $75,394,000. A portion of our farm acreage secures this line of credit.

7.     STOCK COMPENSATION

The Company’s stock incentive plans provide for the making of awards to employees based upon time-based criteria or through the achievement of performance-related objectives. The Company has issued three types of stock grant awards under these plans: restricted stock with time-based vesting, performance share grants that only vest upon the achievement of specified performance conditions, such as corporate cash flow goals, and performance share grants that include threshold, target, and maximum achievement levels based on the achievement of specific real estate development performance milestones. The payouts at each performance goal are as follows:

Performance Share Grants with Performance Conditions (in shares)
Below threshold performance	—
Threshold performance	82,296
Target performance	407,175
Maximum performance	594,993

The following is a summary of the Company’s stock grant activity assuming target achievement for outstanding performance grants for the following periods:

	June 30, 2013		December 31, 2012
Stock Grants Outstanding Beginning of the Year	688,041		744,508
New Stock Grants/Estimated additional shares maximum performance	56,087		113,643
Vested Grants	(62,997	)	(170,110	)
Expired/Forfeited Grants	(221,552	)	—
Stock Grants Outstanding June 30, 2013	459,579		688,041

The unamortized cost associated with nonvested stock grants and the weighted-average period over which it is expected to be recognized as of June 30, 2013 was $3,693,000 and 31 months, respectively. The fair value of restricted stock with time-based vesting features is based upon the Company’s share price on the date of grant and is expensed over the service period. Fair value of performance grants that cliff vest based on the achievement of performance conditions is based on the share price of the Company’s stock on the day of grant once the Company determines that it is probable that the award will vest. This fair value is expensed over the service period applicable to these grants. For performance grants that contain a range of shares from zero to maximum we determine, based on historic and projected results, the probability of (1) achieving the performance objective, and (2) the level of achievement. Based on this information, we determine the fair value of the award and measure the expense over the service period related to these grants. Because the ultimate vesting of all performance grants is tied to the achievement of a performance condition, we estimate whether the performance condition will be met and over what period of time. Ultimately, we adjust compensation cost according to the actual outcome of the performance condition. Under the Non-Employee Director Stock Incentive Plan, or NDSI Plan, each non-employee director receives his or her annual compensation in stock.

The following table summarizes stock compensation costs for the Company's 1998 Stock Incentive Plan, or Employee 1998 Plan, and the NDSI Plan for the following periods:

	Six Months Ended			Six Months Ended
Employee 1998 Plan:	June 30, 2013			June 30, 2012
Expensed	$	(952,000	)	$	3,475,000
Capitalized	208,000			167,000
	(744,000		)	3,642,000
NDSI Plan	384,000			183,000
	$	(360,000	)	$	3,825,000

During the first quarter of 2013 an executive officer of the Company resigned, which led to the Company reversing $485,000 of previously recognized stock compensation expense as the shares were forfeited upon leaving the Company. During the second quarter of 2013 our Chief Executive Officer and President, Robert A. Stine, announced he would retire at the end of 2013.

12

Based on this announcement, we adjusted the service period related to his performance grants, which resulted in shares being forfeited and the reversal of $2,271,000 previously recognized stock compensation expense.

8.    INCOME TAXES

For the six months ended June 30, 2013, the Company incurred a net income tax expense of $833,000 compared to a net income tax benefit of $64,000 for the six months ended June 30, 2012. These represent effective income tax rates of approximately 24% and (20)% for the six months ended June 30, 2013 and, 2012, respectively. The effective tax rate for the first half of 2013 is calculated based on the first quarter net income for 2013 adjusted for estimated permanent tax differences such as depletion allowances. During 2013, depletion allowances have decreased due to lower oil and gas revenues compared to 2012. As of June 30, 2013, our balance sheet reflects an income tax payable of $101,000.

The Company classifies interest and penalties incurred on tax payments as income tax expenses. During the first six months ended June 30, 2013, the Company made income tax payments of $100,000 for the 2013 tax year.

9.    COMMITMENTS AND CONTINGENCIES

A total of 5,488 acres of the Company’s land is subject to water contracts with the WRMWSD, requiring minimum future annual payments through the life of the contract which is 2035. The estimated future minimum annual payments are $2,500,000 before any potential credits are received, whether or not water is available or is used. These payments are expensed each quarter through our farming operations.

The Tejon Ranch Public Facilities Financing Authority, or TRPFFA, is a joint powers authority formed by Kern County and the TCWD, to finance public infrastructure within the Company’s Kern County developments. TRPFFA has created two Community Facilities Districts, or CFDs, the West CFD and the East CFD. The West CFD has placed liens on 420 acres of the Company’s land to secure payment of special taxes related to $30,000,000 of bond debt sold by TRPFFA for Tejon Ranch Commerce Center, or TRCC-West. The East CFD has placed liens on 1,931 acres of the Company’s land to secure payments of special taxes related to $39,750,000 of bond debt sold by TRPFFA for TRCC-East. At TRCC-West, the West CFD has no additional bond debt approved for issuance. At TRCC-East, the East CFD has approximately $80,250,000 of additional bond debt authorized by TRPFFA that can be sold in the future.

In connection with the sale of bonds there is a standby letter of credit for $5,426,000 related to the issuance of East CFD bonds. The standby letter of credit is in place to provide additional credit enhancement and cover approximately two years worth of interest on the outstanding bonds. This letter of credit will not be drawn upon unless the Company, as the largest land owner in the CFD, fails to make its property tax payments. The Company believes that the letter of credit will never be drawn upon. The letter of credit is for two years beginning in January 2013 and will be renewed in two-year intervals as necessary. The annual cost related to the letter of credit is approximately $83,000.

The Company is obligated, as a landowner in each CFD, to pay its share of the special taxes assessed each year. The secured lands include both the TRCC-West and TRCC-East developments. Proceeds from the sale of West CFD bonds went to reimburse the Company for public infrastructure related to the TRCC West development. At this time there are no additional reimbursement funds remaining from the West CFD bonds and there is approximately $8,900,000 of funds available for reimbursement of cost within the East CFD bonds. During the second quarter of 2013, $14,139,000 of funds were reimbursed to the Company. During 2012, the Company paid approximately $606,000 in special taxes. We anticipate we will pay approximately $886,000 in special taxes during 2013. As development continues to occur at TRCC, new owners of land and new lease tenants, through triple net leases, will bear an increasing portion of the assessed special tax. As this happens, the Company’s obligation is correspondingly reduced. The amount of special taxes paid by the Company could change in the future based on the amount of bonds outstanding and the amount of taxes paid by others.

Tejon Mountain Village

On November 10, 2009, a suit was filed in the U.S. District Court for the Eastern District of California (Fresno division) by David Laughing Horse Robinson ("plaintiff") an alleged representative of the federally-unrecognized "Kawaiisu Tribe" alleging, inter alia, that the Company does not hold legal title to the land within the TMV development that it seeks to develop. The grounds for the federal lawsuit were the subject of a United States Supreme Court decision in 1924 where the United States Supreme Court found against the Indian tribes. The suit named as defendants the Company, two affiliates (Tejon Mountain Village, LLC and Tejon Ranchcorp), the County of Kern, or County, and Ken Salazar, in his capacity as U.S. Secretary of the Interior.

The Company and other defendants filed motions to dismiss plaintiff's complaint for failure to state a claim and lack of jurisdiction. On January 24, 2011, the Company received a ruling by Judge Wanger dismissing all claims against the Company, TMV, the County and the federal defendants. However, the judge did grant a limited right by the plaintiff to amend certain causes of action in the complaint.

13

During April 2011, the plaintiff filed his second amended complaint against the Company, alleging similar items as in the original suit. The plaintiff filed new materials during July, 2011 related to his second amended complaint. Thereafter, the case was reassigned to Magistrate Judge McAuliffe. On January 18, 2012, Judge McAuliffe issued an order dismissing all claims in plaintiff's second amended complaint for failure to state a cause of action and/or for lack of jurisdiction, but allowing the plaintiff one more opportunity to state certain land claims provided plaintiff file an amended complaint on or before February 17, 2012. The court also indicated that it was considering dismissing the case due to the lack of federal recognition of the "Kawaiisu Tribe". The court then granted plaintiff an extension until March 19, 2012 to file his third amended complaint.

Plaintiff filed his third amended complaint on March 19, 2012. Defendants filed motions to dismiss all claims in the third amended complaint without further leave to amend on April 30, 2012. Plaintiff thereafter substituted in new counsel and with leave of court filed his opposition papers on June 8, 2012. Defendants filed their reply papers on June 22, 2012. Oral argument of the motions to dismiss the third amended complaint was conducted on July 20, 2012. On August 7, 2012, the court issued its order dismissing all of Robinson's claims without leave to amend and with prejudice, on grounds of lack of jurisdiction and failure to state a claim.

On September 24, 2012, Robinson (through another new counsel) filed a timely notice of appeal to the U.S. Court of Appeals for the Ninth Circuit. On September 26, 2012, the Court of Appeals issued its time schedule order calling for briefing to be completed by February, 2013. Robinson's brief was due to be filed on January 2, 2013. On February 26, 2013, the Ninth Circuit issued an order dismissing the appeal for failure to prosecute including failure to file an opening brief. Forty-five days later, Robinson's counsel filed a motion to reinstate the appeal. As an excuse Robinson's new counsel offered that he overlooked the court of appeal's briefing schedule order and assumed that state court procedure would be followed. The motion to reinstate the appeal was accompanied by a proposed opening brief. In response, the Company and the County filed oppositions to the motion to reinstate the appeal. Despite objections by the Company and the County (in which the U.S. Department of Justice ("DOJ") did not join), the Ninth Circuit granted Robinson's motion to reinstate, rejected the appeal of that reinstatement decision by the County and the Company, and set a due date of July 7, 2013 for the opposition briefs of the Company and the County to be filed. Thereafter, the DOJ and the County exercised their right to obtain an automatic 30-day extension to August 6, 2013, and the Company filed an unopposed motion (which the Ninth Circuit granted) extending the Company's date for its opposition brief to August 6, 2013 as well. In the meantime, the Company continues to believe that a negative outcome of this case is remote at this time and the monetary impact of an adverse result, if any, also cannot be estimated at this time.

National Cement

The Company leases land to National Cement Company of California Inc., or National, for the purpose of manufacturing Portland cement from limestone deposits on the leased acreage. The California Regional Water Quality Control Board, or RWQCB, for the Lahontan Region issued several orders in the late 1990s with respect to environmental conditions on the property currently leased to National:

(1) Groundwater plume of chlorinated hydrocarbon compounds. This order directs the Company’s former tenant Lafarge Corporation, or Lafarge, the current tenant National, and the Company to, among other things, clean up groundwater contamination on the leased property. In 2003, Lafarge and National installed a groundwater pump-and-treat system to clean up the groundwater. The Company is advised that Lafarge and National continue to operate the cleanup system and will continue to do so over the near-term.

(2) Cement kiln dust. National and Lafarge have consolidated, closed and capped cement kiln dust piles located on land leased from the Company. An order of the RWQCB directs National, Lafarge and the Company to maintain and monitor the effectiveness of the cap. Maintenance of the cap and groundwater monitoring remain as on-going activities.

(3) Former industrial waste landfills. This order requires Lafarge, National and the Company to complete the cleanup of groundwater associated with the former industrial waste landfills. The Company is advised that the cleanup is complete. Lafarge continues to monitor the groundwater.

(4) Diesel fuel. An order of the RWQCB directs Lafarge, National and the Company to clean up contamination from a diesel fuel tank and pipeline. The Company is advised that Lafarge and National have substantially completed the groundwater cleanup and that groundwater monitoring remains an on-going activity.

To date, the Company is not aware of any failure by Lafarge or National to comply with the orders or informal requests of the RWQCB. Under current and prior leases, National and Lafarge are obligated to indemnify the Company for costs and liabilities arising directly or indirectly out of their use of the leased premises. The Company believes that all of the matters described above are included within the scope of the National or Lafarge indemnity obligations and that Lafarge and National have sufficient resources to perform any reasonably likely obligations relating to these matters. If they do not and the Company is required to perform the work at its own cost, it is unlikely that the amount of any such expenditure by the Company would be material.

14

Antelope Valley Groundwater Cases

On November 29, 2004, a conglomerate of public water suppliers filed a cross-complaint in the Los Angeles Superior Court seeking a judicial determination of the rights to groundwater within the Antelope Valley basin, including the groundwater underlying the Company's land. Four phases of a multi-phase trial have been completed. Upon completion of the third phase, the court ruled that the groundwater basin is currently in overdraft and established a current total sustainable yield. The fourth phase of trial resulted in confirmation of each party's groundwater pumping for 2011 and 2012. The next phase of trial is anticipated to occur later this year and may address a number of issues, including whether prescription of rights to groundwater has occurred. At this time, it is difficult to ascertain whether a settlement agreement will be reached and what effect, if any, this case may have on the Centennial project or the Company's remaining lands in the Antelope Valley. Because the water supply plan for the Centennial project includes several sources of water in addition to groundwater underlying the Company's lands, and because the creation of an efficient market for local water rights is frequently an outcome of adjudication proceedings, the Company remains hopeful that sufficient water to supply the Company's needs will continue to be available for its use regardless of the outcome of this case.

State Water Resources Control Board Lawsuit

On May 12, 2010, the California Attorney General, on behalf of the State Water Resources Control Board, filed a complaint in the Alameda County Superior Court for civil penalties and a permanent injunction against a number of TravelCenters of America LLC, or TA, facilities in the Central Valley of California. The travel centers in the Petro Travel Plaza Holdings LLC, or TA/Petro, were also included in the complaint. The lawsuit alleges violations of various reporting, operating and monitoring regulations related to operation and maintenance of underground storage tanks. In addition to the TA/Petro entity and its respective member entities, the lawsuit also names the Company and Tejon Industrial Corporation as defendants. The Company has tendered defense of the lawsuit to TA, under the “defend and indemnify” clause in the TA/Petro LLC's operating agreement, and has also secured the services of an outside law firm to work with TA's outside counsel under a joint defense agreement. On September 16, 2011, the Company and Tejon Industrial Corp. were dismissed from the lawsuit, without prejudice. The parties remaining are currently engaged in discussions regarding a negotiated resolution, and the Company understands that a settlement of the claims asserted in the litigation is likely. If such a settlement is reached, the Company does not anticipate a material adverse impact on the Company.

Water Bank Lawsuits

On June 3, 2010, the Central Delta and South Delta Water Agencies and several environmental groups, including CBD, filed a complaint in the Sacramento County Superior Court against the California Department of Water Resources (DWR), Kern County Water Agency and a number of “real parties in interest,” including the Company and TCWD. The lawsuit challenges certain amendments to the State Water Project contracts that were originally approved in 1995, known as the “Monterey Amendments.” The original Environmental Impact Report, or EIR, for the Monterey Amendments was determined to be insufficient in an earlier lawsuit, and the current lawsuit (i) challenges the remedial EIR that DWR prepared as a result of the original lawsuit. Among other allegations, the current lawsuit also challenges the transfer of the Kern Water Bank, or KWB, from DWR to Kern County Water Agency and in turn to the Kern Water Bank Authority (KWBA), whose members are various Kern and Kings County interests, including TCWD, which TCWD has a 2% interest in the KWBA, and (ii) asserts the remedial EIR is inadequate. A parallel lawsuit was also filed by the same plaintiffs in Sacramento Superior Court against Kern County Water Agency, also naming the Company and TCWD as real parties in interest, which has been stayed pending the outcome of the other action against DWR. The Company is named on the ground that it “controls” TCWD. TCWD has a contract right for water stored in the KWB and rights to recharge and withdraw water. Counsel for the Company is pursuing a dismissal of the Company from these lawsuits.  In a preliminary favorable ruling on December 19, 2012, Judge Frawley tentatively determined that the challenges to the transfer of the KWB were not timely and barred by the statutes of litigation and doctrine of latches. There has not yet been any substantive hearing on the challenges to the EIR. Given the preliminary nature of these lawsuits, the Company has an insufficient basis to address the merits or potential outcomes of the lawsuit. The monetary value of a potential adverse outcome on the claim likewise cannot be estimated at this time.

10.    RETIREMENT PLANS

The Company has a defined benefit plan that covers many of its employees, or the Benefit Plan. The benefits are based on years of service and the employee’s five-year final average salary. Contributions are intended to provide for benefits attributable to service both to date and expected to be provided in the future. The Company funds the plan in accordance with the Employee Retirement Income Security Act of 1974 (ERISA) and the Pension Protection Act. The Company anticipates contributing approximately $850,000 to the plan during 2013.

The Benefit Plan assets consist of equity, debt and short-term money market investment funds. The plan’s current investment policy targets 65% equities, 25% debt and 10% money market funds. Equity and debt investment percentages are allowed to fluctuate plus or minus 20% around the respective targets to take advantage of market conditions. As an example, equities can fluctuate from 78% to 52% of plan assets. At June 30, 2013, the investment mix was approximately 61% equity, 32% debt, and 7% money market funds. At December 31, 2012, the investment mix was approximately 71% equity, 26% debt and 3% money

15

market funds. Equity investments consist of a combination of individual equity securities plus value funds, growth funds, large cap funds and international stock funds. Debt investments consist of U.S. Treasury securities and investment grade corporate debt. The weighted-average discount rate and rate of increase in future compensation levels used in determining the periodic pension cost is 4.0% in 2013 and 2012. The expected long-term rate of return on plan assets is 7.5% in 2013 and 2012. The long-term rate of return on plan assets is based on the historical returns within the plan and expectations for future returns.

The expected total pension and retirement expense for the Benefit Plan was as follows:

	Six Months Ended
(In thousands)	2013			2012
Cost components:
Service cost-benefits earned during the period	$	(142	)	$	(126	)
Interest cost on projected benefit obligation	(188		)	(192		)
Expected return on plan assets	228			222
Net amortization and deferral	(96		)	(210		)
Total net periodic pension cost	$	(198	)	$	(306	)

The Company has a Supplemental Executive Retirement Plan, or SERP, to restore to executives designated by the Compensation Committee of the Board of Directors the full benefits under the pension plan that would otherwise be restricted by certain limitations now imposed under the Internal Revenue Code. The SERP is currently unfunded. The expected total pension and retirement expense for SERP was as follows:

	Six Months Ended
(In thousands)	2013			2012
Cost components:
Service cost-benefits earned during the period	$	(86	)	$	(86	)
Interest cost on projected benefit obligation	(108		)	(108		)
Net amortization and deferral	(144		)	(32		)
Total net periodic pension cost	$	(338	)	$	(226	)

11.     BUSINESS SEGMENTS

The revenue components of our commercial/industrial real estate development segment for the six months ended June 30 are as follows:

(In thousands)	2013		2012
Commercial leases	$	3,401	$	2,958
Grazing leases	748		587
Land Sale	—		648
All other land management ancillary services	1,398		578
	$	5,547	$	4,771

Commercial lease revenue consists of land and building leases to tenants at our commercial retail and industrial developments, base and percentage rents from our Calpine power plant lease, communication tower rents, and payments from easement leases. Land management ancillary services include wildlife management, landscape and property maintenance, and building management services. During the first eight months of 2012, the Company’s game management operations were temporarily suspended in order to complete the development of a new sales program and operating procedures. Please refer to Form 8-K filed on January 20, 2012 regarding the Company’s game management and hunting operations. Game management reopened operations on September 1, 2012.

The resort/residential real estate development segment produces revenues from farming activities within the Centennial Founders, LLC and is actively involved in the land entitlement and pre-development process. The farming segment produces revenues from the sale of winegrapes, almonds and pistachios.

16

The mineral resources segment receives oil and mineral royalties from the exploration and development companies who extract or mine the natural resources from our land. The following table summarizes these activities:

	Six Months Ended
($ in thousands)	June 30, 2013		June 30, 2012
Oil and gas	$	4,418	$	6,510
Rock aggregate	296		305
Cement	375		337
Land lease for oil exploration	542		633
	$	5,631	$	7,785

12.     INVESTMENTS IN UNCONSOLIDATED AND CONSOLIDATED JOINT VENTURES

The Company maintains investments in joint ventures. The Company accounts for its investments in unconsolidated joint ventures using the equity method of accounting unless the venture is a variable interest entity, or VIE, and meets the requirements for consolidation. The Company’s investment in its unconsolidated joint ventures at June 30, 2013 was $59,235,000. The equity in the income of the unconsolidated joint ventures was $1,679,000 for the six months ended June 30, 2013. The unconsolidated joint ventures have not been consolidated as of June 30, 2013, because the Company does not control the investments. The Company’s current joint ventures are as follows:

• Petro Travel Plaza Holdings LLC – TA/Petro is an unconsolidated joint venture with TravelCenters of America, LLC for the development and management of travel plazas and convenience stores. This is a 60%-owned joint venture which owns and operates travel plazas/commercial highway operations in TRCC. It houses multiple commercial eating establishments as well as diesel and gasoline operations. The Company does not control the investment due to its having only 50% voting rights, and because our partner in the joint venture is the managing partner and performs all of the day-to-day operations at the facility. At June 30, 2013, the Company had an equity investment balance of $9,027,000 in this joint venture.

• Tejon Mountain Village LLC – Tejon Mountain Village LLC, or TMV LLC, is an unconsolidated joint venture between the Company and DMB TMV LLC (a wholly owned subsidiary of DMB Associates, Inc.) formed to obtain all necessary government entitlement approvals and to develop the Tejon Mountain Village project. The Company owns a 50% interest in this venture. At June 30, 2013, the Company’s equity investment balance in this joint venture was $41,862,000.

• Rockefeller Joint Ventures – The Company has multiple joint ventures with Rockefeller Group Development Corporation or Rockefeller. Two joint ventures are for the development of buildings on approximately 91 acres and are part of an agreement for the potential development of up to 500 acres of land in TRCC including pursuing Foreign Trade Zone, or FTZ, designation and development of the property within the FTZ for warehouse distribution and light manufacturing. The Company owns a 50% interest in each of the joint ventures. Currently the Five West Parcel LLC joint venture owns and leases a 606,000 square foot building. The second of these joint ventures, 18-19 West LLC, was formed in August 2009 through the contribution of 61.5 acres of land by the Company, which is being held for future development.

During the second quarter of 2013, we entered into a new joint venture with Rockefeller, the TRCC/Rock Outlet Center LLC joint venture, to develop, own, and manage an outlet center on land at TRCC-East. This joint venture is separate from the above agreement to develop up to 500 acres. During the second quarter of 2013, we contributed land and other assets at an agreed value of $10,558,000 for our capital contribution and Rockefeller matched our capital contribution with cash.

At June 30, 2013, the Company’s combined book value equity investment balance in these three joint ventures was $8,346,000.

• Centennial Founders, LLC – Centennial Founders, LLC is a joint venture with Pardee Homes, Lewis Investment Company, and Standard Pacific Corp. that was organized to pursue the entitlement and development of land that the Company owns in Los Angeles County. Based on the Second Amended and Restated Limited Liability Company Agreement of Centennial Founders, LLC and the change in control and funding that resulted from the amended agreement, Centennial Founders, LLC qualified as a variable interest entity, beginning in the third quarter of 2009 and the Company was determined to be the primary beneficiary. As a result, Centennial Founders, LLC has been consolidated into our financial statements beginning in that quarter. Our partners retained a noncontrolling interest in the joint venture. At June 30, 2013 the Company had a 72.01% ownership position in Centennial Founders, LLC.

17

The Company’s investment balance in its unconsolidated joint ventures differs from its capital accounts in the respective joint ventures. The differential represents the difference between the cost basis of assets contributed by the Company and the agreed-upon contribution value of the assets contributed.

Unaudited condensed balance sheet information of the Company’s unconsolidated and consolidated joint ventures as of June 30, 2013 and December 31, 2012 and condensed statements of operations for the six months ended June 30, 2013 and June 30, 2012 are as follows:

($ in thousands)	UNCONSOLIDATED																	CONSOLIDATED
Statement of Operations for the six months ended June 30, 2013	Petro Travel Plaza Holdings			Five West Parcel			Tejon Mountain Village			18-19 West		TRCC/Rock Outlet Center			Total			Centennial-VIE
Gross revenues	$	55,364		$	1,673		$	—		$	31	$	—		$	57,068		$	314
Net income (loss)	$	2,394		$	47		$	(83	)	$	25	$	(176	)	$	2,207		$	(232	)
Partner’s share of net income (loss)	$	958		$	23		$	(42	)	$	12	$	(88	)	$	863		$	(66	)
Equity in income (losses)	$	1,436		$	24		$	(41	)	$	13	$	247		$	1,679		$	—
Balance Sheet Information as of June 30, 2013
Current assets	$	11,256		$	1,214		$	255		$	30	$	9,381		$	22,136		$	142
Property and equipment, net	43,907			18,111			95,772			4,449		12,858			175,097			74,074
Other assets	227			651			—			—		—			878			—
Long-term debt	(16,988		)	(11,000		)	—			—		—			(27,988		)	—
Other liabilities	(2,309		)	(67		)	(520		)	—		(1,300		)	(4,196		)	(1,024		)
Net assets	$	36,093		$	8,909		$	95,507		$	4,479	$	20,939		$	165,927		$	73,192

($ in thousands)	UNCONSOLIDATED															CONSOLIDATED
Statement of Operations for the six months ended June 30, 2012	Petro Travel Plaza Holdings			Five West Parcel			Tejon Mountain Village			18-19 West			Total			Centennial-VIE
Gross revenues	$	59,001		$	975		$	—		$	53		$	60,029		$	135
Net income (loss)	$	1,540		$	(282	)	$	(47	)	$	46		$	1,257		$	(160	)
Partner’s share of net income (loss)	$	616		$	(141	)	$	(24	)	$	23		$	474		$	(50	)
Equity in income (losses)	$	675		$	(141	)	$	(23	)	$	23		$	534		$	(110	)
Balance Sheet Information as of December 31, 2012
Current assets	$	9,577		$	194		$	218		$	42		$	10,031		$	491
Property and equipment, net	44,196			19,025			92,846			4,412			160,479			72,356
Other assets	246			683			—			—			929			—
Long-term debt	(17,358		)	(11,000		)	—			—			(28,358		)	—
Other liabilities	(3,350		)	(39		)	(224		)	(1		)	(3,614		)	(1,099		)
Net assets	$	33,311		$	8,863		$	92,840		$	4,453		$	139,467		$	71,748

13.     SUBSEQUENT EVENTS

On August 7, 2013, Tejon Ranch Co. (the “Company”) announced that its Board of Directors declared a dividend of warrants (the “Warrants”) to purchase shares of Company common stock, par value $0.50 per share (“Common Stock”), to be distributed on or about August 28, 2013, to holders of record of Common Stock as of August 21, 2013 (the “Record Date”). Each Warrant will entitle the holder to purchase one share of Common Stock at an initial exercise price of $40.00 per share. The Warrants will be exercisable through August 31, 2016, subject to the Company's right to accelerate the expiration date under certain circumstances when the Warrants are in-the-money. Each holder of Common Stock as of the Record Date will receive a number of Warrants equal to the number of shares held multiplied by 0.14771, rounded to the nearest whole number. No cash or other consideration will be payable in respect of any fractional Warrants that are rounded down. The Company expects to issue an aggregate of approximately 3,000,000 Warrants. The Company will issue the Warrants pursuant to a Warrant Agreement, dated as of August 7, 2013, between the Company, Computershare, Inc. and Computershare Trust Company, N.A., as warrant agent (the “Warrant Agreement”).

18

The foregoing description of the Warrants and the Warrant Agreement is not complete and is qualified in its entirety by reference to the complete text of the Warrant Agreement, a copy of which will be filed on or about August 13, 2013 on Form 8-K.

ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

This Quarterly Report on Form 10-Q contains forward-looking statements, including without limitation statements regarding strategic alliances, the almond, pistachio and grape industries, the future plantings of permanent crops, future yields, prices and water availability for our crops and real estate operations, future prices, production and demand for oil and other minerals, future development of our property, future revenue and income of our jointly-owned travel plaza and other joint venture operations, potential losses to the Company as a result of pending environmental proceedings, the adequacy of future cash flows to fund our operations, market value risks associated with investment and risk management activities and with respect to inventory, accounts receivable and our own outstanding indebtedness and other future events and conditions. In some cases these statements are identifiable through the use of words such as “anticipate”, “believe”, “estimate”, “expect”, “intend”, “plan”, “project”, “target”, “can”, “could”, “may”, “will”, “should”, “would”, and similar expressions. In addition, any statements that refer to projections of our future financial performance, our anticipated growth, and trends in our business and other characterizations of future events or circumstances are forward-looking statements. We caution you not to place undue reliance on these forward-looking statements. These forward-looking statements are not a guarantee of future performances and 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 and economic forces, availability of financing for land development activities, and success in obtaining various governmental approvals and entitlements for land development activities. No assurance can be given that the actual future results will not differ materially from the forward-looking statements that we make for a number of reasons including those described above in the section entitled, “Risk Factors” in this report and our Annual Report on Form 10-K .

Overview

We are a diversified real estate development and agribusiness company committed to responsibly using our land and resources to meet the housing, employment, and lifestyle needs of Californians and to create value for our shareholders. In support of these objectives, we have been investing in land planning and entitlement activities for new industrial and residential land developments and in infrastructure improvements within our active industrial development. Our prime asset is approximately 270,000 acres of contiguous, largely undeveloped land that, at its most southerly border, is 60 miles north of Los Angeles and, at its most northerly border, is 15 miles east of Bakersfield.

Our business model is designed to create value through the entitlement and development of land for commercial/industrial and resort/residential uses while at the same time protecting significant portions of our land for conservation purposes. We operate our business near one of the country’s largest population centers, which is expected to continue to grow well into the future.

We currently operate in four business segments: commercial/industrial real estate development; resort/residential real estate development; mineral resources; and farming.

Our commercial/industrial real estate development segment generates revenues from building, grazing, and land lease activities, land and building sales, and ancillary land management activities. The primary commercial/industrial development is TRCC and during the first quarter of 2013 we began land planning activities and the first steps of gathering information to prepare an environmental impact report to entitle the Grapevine Development Area, which is an approximately 15,700-acre potential development area located on the San Joaquin Valley floor area of our lands, adjacent to TRCC. The resort/residential real estate development segment is actively involved in the land entitlement and development process internally and through joint venture entities. Its revenues are generated through farming activities within the Centennial joint venture. Within our resort/residential segment, the two active developments are TMV and the Centennial master planned community. Our mineral resources segment generates revenues from oil and gas royalty leases, rock and aggregate mining leases, and a lease with National Cement. The farming segment produces revenues from the sale of winegrapes, almonds, and pistachios.

For the first six months of 2013 we had net income of $2,633,000 compared to net income of $343,000 for the first six months of 2012. When comparing to the first six months of 2012, the increase is primarily the result of higher farming net operating income, higher equity in earnings from our joint ventures and a decrease in stock compensation expense, which were partially offset by a decrease in oil royalty revenues and a higher tax provision.

Critical Accounting Policies

The preparation of our interim financial statements in accordance with GAAP requires us to make estimates and judgments that affect the reported amounts of assets, liabilities, revenues and expenses, and related disclosure of contingent assets and

19

liabilities. We consider an accounting estimate to be critical if (1) the accounting estimate requires us to make assumptions about matters that were highly uncertain at the time the accounting estimate was made, and (2) changes in the estimates that are likely to occur from period to period, or use of different estimates that we reasonably could have used in the current period, would have a material impact on our financial condition or results of operations. On an on-going basis, we evaluate our estimates, including those related to revenue recognition, impairment of long-lived assets, capitalization of costs, profit recognition related to land sales, stock compensation, and our defined benefit retirement plan. We base our estimates on historical experience and on various other assumptions that are believed to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates under different assumptions or conditions.

Our critical accounting policies have not changed since the filing of our Annual Report on Form 10 – K for the year ended

December 31, 2012. Please refer to that filing for a description of our critical accounting policies.

Results of Operations

Comparison of six months ended June 30, 2013 to six months ended June 30, 2012

Total revenues for the first sixmonths of 2013 were $17,235,000 compared to $17,428,000 for the first sixmonths of 2012. This decrease of $193,000, or 1%, in total revenues is primarily attributable to a decrease in mineral resources revenues, partially offset by improved revenues from the other operating segments.

Commercial/industrial revenues improved $776,000, or 16%, in the first sixmonths of 2013 compared to the same period in 2012. The improvement is primarily due to a $1,036,000 increase in hunting and grazing lease revenues, as our hunting program was closed during the first half of 2012. Additionally, percentage rent from our Calpine power plant increased $459,000. These increases were partially offset by a $648,000 decrease in land sale revenue recognized in the first half of 2012 related to the deferred gain from the land sale to Caterpillar that occurred in December of 2011.

Commercial/industrial expenses increased by $316,000, or 5%, during the first sixmonths of 2013 compared to the same period in 2012, primarily due to a $284,000 increased allocation from corporate general and administrative, a $144,000 increase in hunting department payroll resulting from the re-opening of the hunting program in September 2012 and a $130,000 increase in marketing expense related to the development of the outlet center and a $184,000 increase in utilities, depreciation and insurance. These increases are partially offset by a $257,000 decrease in stock compensation mainly due to the increase of TMV milestone grant expense in 2012 that was tied to a change in estimate related to the timing of potential receipt of the awards and a $155,000 increase in costs capitalized to construction in progress projects.

Resort/residential revenues increased $336,000, or 249%, during the first sixmonths of 2013 compared to the same period in 2012, primarily due to increases in ancillary hay sales at the Centennial project and an increase in management fees from the TMV project.

Resort/residential expenses decreased $581,000, or 27%, in the first sixmonths of 2013 compared to the same period in 2012, primarily due to a $877,000 decrease in stock compensation mainly due to the reversal of previously recorded expense related to unvested awards of an executive who left the Company and an increase of TMV milestone grant expense in the second quarter of 2012 that was tied to a change in estimate related to the timing of potential receipt of the awards. The decrease in stock compensation is partially offset by a $259,000 increase in ancillary crop costs within the Centennial project.

Mineral resources revenues decreased $2,154,000, or 28%, during the first sixmonths of 2013 compared to the same period in 2012, due to approximately $545,000 in revenues recorded in the first quarter of 2012 from new wells that came on-line, a decrease in production of 20% resulting from temporary closures of existing wells for maintenance, expansion of production facilities, and regulatory permitting management. In addition, the price per barrel of oil fell 6% when compared to the first six months of 2012.

Farming revenues increased $849,000, or 18%, during the first sixmonths of 2013 compared to the same period in 2012, primarily due to a $875,000 increase in almond revenues resulting from a 76% increase in price per pound. The increase in price was partially offset by a 19% decrease in pounds sold and a $283,000 price adjustment related to almond crop sales in 2012.

Farming expenses increased $215,000, or 7%, during the first sixmonths of 2013 compared to the same period in 2012, primarily due to a $204,000 increase in water expense due to the severe state water project shortage.

Corporate expenses decreased $2,358,000, or 34%, during the first sixmonths of 2013 compared to the same period in 2012, primarily due to a $2,926,000 decrease in stock compensation primarily due to the reversal of expense associated with grants that will not vest upon the Chief Executive Officer's retirement in December 2013 coupled with an increase in the second

20

quarter of 2012 of TMV milestone grant expense as explained above, and a $457,000 increase in allocations to other segments. These decreases were partially offset by a $489,000 increase in professional services primarily for IT consulting and a $210,000 increase in charitable donations mainly to the Bakersfield Houchin Blood Bank.

Our share of earnings from our joint ventures increased $1,145,000 during the first sixmonths of 2013 compared to the same period in 2012, primarily due to $765,000 higher income from our TA/Petro joint venture mainly due to improved non-fuel margins and lower operating and interest expenses. Additionally, our share of income from our Five West Parcel LLC joint venture increased $499,000 mainly due to the increased occupancy of the Five West Parcel building that started in April 2012 and a credit from our partner in the TRCC/Rock Outlet Center LLC joint venture, representing outlet center marketing expenses incurred before the joint venture was established.

Net income attributable to common stockholders for the first sixmonths of 2013 increased $2,306,000 to $2,699,000 compared to the same period in 2012. The increase is tied to lower expenses mainly as are result of the decrease in stock compensation expense and an increase in equity in earnings of unconsolidated joint ventures largely from our TA/Petro joint venture, which are partially offset by an increase in income tax expense and lower oil royalties.

Comparison of three months ended June 30, 2013 to three months ended June 30, 2012

Total revenues for the second quarter of 2013 were $7,475,000 compared to $7,849,000 for the second quarter of 2012. This decline of $374,000, or 5%, in total revenues is primarily attributable to a decrease in mineral resources revenues, partially offset by improved revenues from the other three segments.

Commercial/industrial revenues improved $202,000, or 8%, when compared to the second quarter of 2012. The improvement is primarily due to a $563,000 increase in hunting and grazing lease revenues, as our hunting program was closed during the first half of 2012. Additionally, percentage rent from our Calpine power plant increased $143,000. These increases were partially offset by a $507,000 decrease in land sale revenue recognized in the first half of 2012 related to the deferred gain from the land sale to Caterpillar that occurred in December of 2011.

Commercial/industrial expenses increased by $228,000, or 8%, compared to the second quarter of 2012, primarily due to $143,000 increase in allocations from corporate general and administrative, a $96,000 increase in hunting department payroll as the department was closed during the first half of 2012, and a $101,000 increase in marketing expenses related to the development of the outlet center. These increases were partially offset by a $258,000 decrease in stock compensation mainly due to the increase of TMV milestone grant expense as described above.

Resort/residential revenues increased $140,000, or 149%, during the second quarter of 2012, primarily due to the timing of ancillary hay sales at the Centennial project and an increase in management fees from the TMV project.

Resort/residential expenses increased $128,000, or 11%, compared to the second quarter of 2012, primarily due to a $319,000 increase in crop costs, which is partially offset by a $235,000 decrease in stock compensation mainly due to the increase in the second quarter of 2012 of TMV milestone grant expense, as well as the elimination of grants to an executive who left the Company.

Mineral resources revenues decreased $1,114,000, or 29%, compared to the second quarter of 2012, primarily due to a 30% decrease in production, as described above, and a 15% decrease in the average price per barrel of oil when compared to the second quarter of 2012.

Farming revenues increased $398,000, or 32% during the second quarter of 2013 compared to the same period of 2012, primarily due to a $650,000 increase in pistachio revenues resulting from the receipt of price adjustments for prior year crops. This increase is partially offset by a $285,000 decrease in almond revenues primarily due to the receipt of price adjustments for prior crop sales in 2012 compared to the current period. This decline in almond revenues was partially offset by a 37% increase in price per pound and a 63% increase in pounds sold during 2013 when compared to the 2012 second quarter.

Farming expenses increased $219,000, or 23%, during the second quarter of 2013 compared to the same period in 2012, primarily due to a $207,000 increase in water expense due to the severe state water project shortage.

Corporate expenses decreased $3,055,000, or 82%, during the second quarter of 2013 compared to the second quarter of 2012, primarily due to a $3,074,000 decrease in stock compensation mainly due to the reversal of expense associated with grants that will not vest upon the Chief Executive Officer's retirement at the end of 2013 coupled with an increase in the second quarter of 2012 of performance milestone grant expense as explained above.

Our share of earnings from our joint ventures increased $377,000 in the second quarter of 2013 compared to the second quarter of 2012, primarily due to a $335,000 credit from our partner in the TRCC/Rock Outlet Center LLC joint venture, representing

21

outlet center marketing expenses incurred before the joint venture was established and $123,000 higher income from our TA/Petro joint venture mainly due to improved non-fuel margins and lower interest expense.

Net income attributable to common stockholders during the quarter ended June 30, 2013 increased $1,966,000 to $2,084,000. The increase is driven by lower stock compensation expense, which is partially offset by higher tax expense and lower oil royalty revenues.

Future activities within the commercial/industrial segment continue to be focused on the marketing and development of commercial/industrial and retail product offerings within TRCC-East and completing the build-out of TRCC-West. These developments are being planned to coincide with what we anticipate to be future market demand, although the timing and extent of the future market demand is difficult for us to predict. During the second quarter of 2013, we began construction of an outlet center through the TRCC/Rock Outlet Center LLC joint venture. It is expected the outlet center will be completed during the summer of 2014. We are continuing to work with a number of tenants to get their commitment for our outlet center and we hope to complete these activities during the third and fourth quarters of 2013. We completed a new phase of master infrastructure development within TRCC-East during the first quarter of 2013. This new infrastructure will begin to open up retail and industrial sites in the southern section of the TRCC-East development.

We believe our development strategy fits within the logistics model that many companies are using, which favors larger single-site buildings rather than a number of decentralized smaller distribution centers. Buildings of 1.0 million square feet or larger are more difficult to build in Los Angeles due to the number of acres necessary for a building of that size. Our ability to provide land parcels to support buildings of that size can provide us with a potential marketing advantage in the future. A potential disadvantage to our development strategy is our distance from the Port of Los Angeles in comparison to the traditional warehouse/distribution centers east of Los Angeles. Vacancy rates have declined in the Inland Empire region of Los Angeles, a large industrial area within Los Angeles that we compete with for customers. Lease rates in the Inland Empire area have also been improving, which could be helpful to us in our lease pricing in the future.

During the remainder of 2013, we anticipate that our commercial/industrial and resort/residential real estate segments will incur costs, net of amounts capitalized, related to professional service fees, marketing costs, commissions, planning costs, and staffing costs as we continue to pursue development opportunities. Infrastructure development and marketing activities and costs could continue over the next several years as we develop our land holdings.

Most of the expenses incurred within our resort/residential segment during 2013 will be focused on the ongoing implementation of the Ranch Wide Management Plan section of the Conservation and Land Use Agreement and in coordinating efforts with our joint venture partners in the achievement of entitlement for Centennial Founders, LLC and completing the permitting process for TMV and the beginning of pre-development activities at TMV.

All of our crops are sensitive to the size of each year's world crop. Large crops in California and abroad can rapidly depress prices. Thus far during the 2013 almond and pistachio prices remain strong and almond prices have increased approximately 76% compared to the first six months of 2012. With demand remaining strong for almonds and pistachios, estimated pricing for the 2013 crop harvest is expected to be comparable to and possibly better than 2012. Pricing for 2013 will ultimately be based on the size of the new crop and it is too early in the crop year to predict the possible size of the 2013 crop for almonds and pistachios.

Prices received for many of our products are dependent upon prevailing market conditions and commodity prices. Therefore, we are unable to accurately predict revenue and we cannot pass on to our customers any cost increases caused by general inflation, except to the extent such inflation is reflected in market conditions and commodity prices. The operations of the Company are seasonal and future results of operations cannot be predicted based on quarterly results. Future real estate sales and leasing activity are dependent on market circumstances and specific opportunities and therefore are difficult to predict from period to period.

For further discussion of the risks and uncertainties that could potentially adversely affect us, please refer to Part I, Item 7 – “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in the Company’s Annual Report on Form 10-K for the year ended December 31, 2012, or Annual Report, and in Part I, Item 1A - "Risk Factors" of our Annual Report.

We continue to be involved in various legal proceedings related to leased acreage. For a further discussion, please refer to “Note 9. Commitments and Contingencies” in the Notes to Unaudited Consolidated Financial Statements in this report.

Income Taxes

For the six months ended June 30, 2013, the Company incurred a net income tax expense of $833,000 compared to a net income tax benefit of $64,000 for the six months ended June 30, 2012. These represent effective income tax rates of

22

approximately 24% and (20)% for the six months ended June 30, 2013 and, 2012, respectively. The effective tax rate for the first half of 2013 is calculated based on the first quarter net income for 2013 adjusted for estimated permanent tax differences such as depletion allowances. During 2013, depletion allowances have decreased due to lower oil and gas revenues compared to 2012. As of June 30, 2013, our balance sheet reflects an income tax payable of $101,000.

The Company classifies interest and penalties incurred on tax payments as income tax expenses. During the first six months ended June 30, 2013, the Company made income tax payments of $100,000 for the 2013 tax year.

Cash Flow and Liquidity

Our cash, cash equivalents and marketable securities totaled approximately $75,394,000 at June 30, 2013, an increase of $3,126,000, or 4%, from the corresponding amount at the end of 2012. Cash, cash equivalents and marketable securities increased during the first six months of 2013 due to the reimbursement of infrastructure costs of $14,139,000 from the East CFD, which is partially offset by property and equipment expenditures, infrastructure development costs, investment in joint ventures, and payroll taxes paid on vested stock grants.

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

(In thousands)	2013			2012
Operating activities	$	2,632		$	4,793
Investing activities	$	1,281		$	(15,250	)
Financing activities	$	(654	)	$	(2,166	)

During the first six months of 2013, our operations provided $2,632,000 of cash primarily from improved operating results mainly from crop revenues, leasing and hunting activities and the collection of accounts receivable.

During the first six months of 2012, our operations provided $4,793,000 of cash primarily from $3,000,000 cash distributions from our Petro joint venture and improved operating results mainly from oil royalties and crop revenues. These increases in cash were partially offset with income tax payments, net of refunds, totaling approximately $2,821,000 related to the 2011 tax year.

During the first six months of 2013, investing activities provided $1,281,000 of cash primarily as a result of $14,139,000 in reimbursement proceeds for public infrastructure costs through the communities facilities district, or CFD, which were offset by $10,653,000 in capital expenditures, described below, $1,375,000 in contributions to the TMV joint venture, $778,000 net investment in marketable securities and $512,000 in reimbursements for outlet center costs incurred prior to the formation of the joint venture. Included in the $10,653,000 of capital expenditures during the first six months of 2013 was $1,763,000 related to Centennial Founders LLC. The remaining capital expenditures consisted of $8,890,000 of investments in TRCC infrastructure, primarily associated with the development of an outlet center on land at TRCC-East and ordinary capital expenditures such as farm equipment replacements and crop development.

During the first six months of 2012, investing activities used $15,250,000 of cash primarily as a result of the $733,000 net investment in marketable securities, $9,410,000 in capital expenditures, described below, and $4,579,000 in contributions in our unconsolidated joint ventures, partially offset by a $1,012,000 distribution from our Five West Parcel LLC joint venture. Included in the $9,410,000 of capital expenditures during the first six months of 2012 was $2,012,000 related to Centennial Founders LLC. The remaining capital expenditures consisted of investments in TRCC infrastructure and ordinary capital expenditures such as farm equipment replacements and crop development.

We estimate that our investment requirements over the remainder of 2013 could total approximately $20,000,000. These amounts include contributions to our joint ventures, primarily TMV, the TRCC/Rock Outlet Center joint venture, and Centennial, investments in infrastructure within TRCC-East, cost related to the development of a new grape vineyards, investment related to the first phase of land planning and entitlement for the Grapevine Development Area, and ordinary recurring capital investments within our operating segments. We will also continue to evaluate additional water purchases and new water infrastructure throughout the remainder of 2013. Contributions to joint ventures will be related to the entitlement process for Centennial Founders LLC and permitting, litigation costs, and pre-development costs for TMV and construction development of the new TRCC/Rock Outlet Center LCC joint venture.

During the first six months of 2013, financing activities used $654,000 in cash, primarily as a result of payroll taxes on issuance of restricted stock grants. During the first six months of 2012, financing activities used $2,166,000 in cash, primarily as a result of payroll taxes on issuance of restricted stock grants. At June 30, 2013 and at the date of filing of this Form 10-Q there was no outstanding balance on our line of credit.

23

Capital Structure and Financial Condition

At June 30, 2013, total capitalization at book value was $309,860,000 consisting of $233,000 of debt and $309,627,000 of equity, resulting in a debt-to-total-capitalization ratio of less than one percent, which is unchanged when compared to the debt-to- total-capitalization ratio at December 31, 2012.

We have a long-term revolving line of credit of $30,000,000 that, as of June 30, 2013, had no outstanding balance. At the Company’s option, the interest rate on this line of credit can float at 2.50% over a selected LIBOR rate or can be fixed at 2.25% above LIBOR for a fixed rate term. During the term of this credit facility (which matures in October 2013), we can borrow at any time and partially or wholly repay any outstanding borrowings and then re-borrow, as necessary. Under the terms of the line of credit, we must maintain tangible net worth, defined as total equity, including noncontrolling interests, plus debt less intangible assets, not less than $175,000,000 and liquid assets of not less than $25,000,000. At June 30, 2013 our tangible net worth was $309,860,000 and liquid assets were $75,394,000. This line of credit is secured by a portion of our farm acreage.

The outstanding long-term debt, less current portion of $42,000, was $191,000 at June 30, 2013. This debt is being used to provide long-term financing for a building being leased to Starbucks and the debt is secured by the leased building and land.

Our current and future capital resource requirements will be provided primarily from current cash and marketable securities, cash flow from ongoing operations, proceeds from the sale of developed and undeveloped parcels, potential sales of assets, additional use of debt, proceeds from the reimbursement of public infrastructure costs through Community Facilities District bond debt (described below under “Off-Balance Sheet Arrangements”), and the issuance of common stock. During October 2012, we filed a shelf registration statement on Form S3, which went effective May 2013. Under the shelf registration statement, we may offer and sell in the future one or more offerings, common stock, preferred stock, debt securities, warrants or any combination of the foregoing. The shelf registration will allow for efficient and timely access to capital markets and when combined with our other potential funding sources just noted, provide us with a variety of capital funding options that can then be used and appropriately matched to the funding need. As noted above, at June 30, 2013, we had $75,394,000 in cash and securities and as of the filing date of this Form 10-Q, we have $30,000,000 available on credit lines to meet any short-term liquidity needs.

We continue to expect that substantial future investments will be required in order to develop our land assets. In order to meet these long-term capital requirements, we may need to secure additional debt financing and continue to renew our existing credit facilities. In addition to debt financing, we will use other capital alternatives such as joint ventures with financial partners, sales of assets, and the issuance of common stock. We will use a combination of the above funding sources to properly match funding requirements with the assets or development project being funded. There is no assurance that we can obtain financing or that we can obtain financing at favorable terms. We believe we have adequate capital resources to fund our cash needs and our capital investment requirements as described earlier in the cash flow and liquidity discussions.

Contractual Cash Obligations

The following table summarizes our contractual cash obligations and commercial commitments over the next five years:

	Payments Due by Period
(In thousands)	Total		One Year or Less		Years 2-3		Years 4-5		After 5 Years
CONTRACTUAL OBLIGATIONS:
Long-term debt	$	233	$	41	$	91	$	101	$	—
Interest on fixed rate debt	41		14		20		7		—
Line of Credit	15		15		—		—		—
Letter of Credit Fee	83		—		83		—		—
Tejon Ranch Conservancy	4,240		640		1,180		880		1,540
Cash contract commitments	5,080		5,080		—		—		—
Defined Benefit Plan	4,050		850		1,600		1,600		—
SERP	3,910		419		824		800		1,867
Estimated minimum payments to WRMWSD	55,000		2,500		5,000		5,000		42,500
Total contractual obligations	$	72,652	$	9,559	$	8,798	$	8,388	$	45,907

The categories above include purchase obligations and other long-term liabilities reflected on our balance sheet under GAAP. A “purchase obligation” is defined in Item 303(a)(5)(ii)(D) of Regulation S-K as “an agreement to purchase goods or services that is enforceable and legally binding on [us] that specifies all significant terms, including: fixed or minimum quantities to be

24

purchased; fixed, minimum or variable price provisions; and the approximate timing of the transaction.” Based on this definition, the table above includes only those contracts that include fixed or minimum obligations. It does not include normal purchases, which are made in the ordinary course of business. A total of 5,488 acres of the Company’s land is subject to water contracts with the Wheeler Ridge Maricopa Water Storage District, or WRMWSD, requiring minimum future annual payments through the life of the contract which is 2035, for as long as the Company owns such land. The estimated future minimum annual payments are estimated to be $2,500,000 before any potential credits are received, whether or not water is available or is used.

Our cash contract commitments consist of contracts in various stages of completion related to infrastructure development within our industrial developments and entitlement costs related to our industrial and residential development projects. At the present time, we do not have any capital lease obligations or purchase obligations outstanding. Our operating lease obligations are for office equipment, several vehicles, and a temporary trailer providing office space and average approximately $25,000 per month.

Our financial obligations to the Tejon Ranch Conservancy, or Conservancy, are prescribed in the Conservation and Land Use Agreement executed June 2008, or Conservation Agreement. Our advances to the Conservancy are dependent on the occurrence of certain events and their timing, and are therefore subject to change in amount and period. The amounts included above are the minimum amounts we anticipate contributing through the year 2021. The obligation shown above represents eighty percent of the total required obligations under the Conservation Agreement for the next three years and fifty-five percent thereafter. These percentages take into consideration current and anticipated cash funding levels of the Company to the TMV LLC and the Centennial Founders, LLC and the anticipated funding levels of our joint venture partners.

As discussed in “Note 10. Retirement Plans” in the Notes to Unaudited Consolidated Financial Statements in this report, we have long-term liabilities for employee retirement plans. The payments related to retirement plans are not included above since they are dependent upon when the employee retires or leaves the Company. In addition, minimum pension funding requirements are not included above, as such amounts are not available for all periods presented. We estimate that we will contribute approximately $850,000 to the pension plan in 2013.

Off-Balance Sheet Arrangements

The following table shows contingent obligations we have with respect to certain bonds issued by the Community Facilities District, or CFD:

	Amount of Commitment Expiration Per Period
(In thousands)	Total		One Year or Less	Years 1-3		Years 4-5	After 5 Years
OTHER COMMERCIAL COMMITMENTS:
Standby letter of credit	$	5,426		$	5,426	—	—
Total other commercial commitments	$	5,426	—	$	5,426	—	—

Tejon Ranch Public Facilities Financing Authority, or TRPFFA, is a joint powers authority formed by Kern County and TCWD to finance public infrastructure within the Company’s Kern County developments. TRPFFA created two CFDs, the West CFD and the East CFD. The West CFD has placed liens on 420 acres of the Company’s land to secure payment of special taxes related to $30,000,000 of bond debt sold by TRPFFA for TRCC-West. The East CFD has placed liens on 1,931 acres of the Company’s land to secure payments of special taxes related to $39,750,000 of bond debt sold by TRPFFA for TRCC-East. At TRCC-West, the West CFD has no additional bond debt approved for issuance. At TRCC-East, the East CFD has approximately $80,250,000 of additional bond debt authorized by TRPFFA.

In connection with the sale of bonds there is a standby letter of credit for $5,426,000 related to the issuance of East CFD bonds. The standby letter of credit is in place to provide additional credit enhancement and cover approximately two years worth of interest on the outstanding bonds. This letter of credit will not be drawn upon unless the Company, as the largest landowner in the CFD, fails to make its property tax payments. As development occurs within TRCC-East there is a mechanism in the bond documents to reduce the amount of the letter of credit. The Company believes that the letter of credit will never be drawn upon. This letter of credit is for a two-year period of time that began January 2013 and will be renewed in two-year intervals as necessary. The annual cost related to the letter of credit is approximately $83,000.

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Market risk represents the risk of loss that may impact the financial position, results of operations, or cash flows of the Company due to adverse changes in financial or commodity market prices or rates. We are exposed to market risk in the areas of interest rates and commodity prices.

25

Financial Market Risks

Our exposure to financial market risks includes changes to interest rates and credit risks related to marketable securities, interest rates related to our outstanding indebtedness and trade receivables.

The primary objective of our investment activities is to preserve principal while at the same time maximizing yields and prudently managing risk. To achieve this objective and limit interest rate exposure, we limit our investments to securities with a maturity of less than six years and an investment grade rating from Moody’s or Standard and Poor’s. See “Note 3. Marketable Securities” in the Notes to Unaudited Consolidated Financial Statements in this report.

Our line-of-credit currently has no outstanding balance. The interest rate on our line-of-credit can either float with LIBOR or be tied to a specific LIBOR rate on a fixed basis and change only at maturity of the fixed-rate feature. We are exposed to interest rate risk on our long term debt currently outstanding. The long-term debt of $233,000 has a fixed interest rate of 6.75%, and the fair value of this long-term debt will change based on interest rate movements in the market. The floating rate feature in our line of credit can expose us to variability in interest payments due to changes in interest rates. We believe it is prudent at times to limit the variability of floating-rate interest payments and in the past have entered into interest rate swaps to manage those fluctuations.

At June 30, 2013, we had no outstanding interest rate swap agreements. However during 2012, TA/Petro, an unconsolidated joint venture of the Company, had an interest rate swap agreement with respect to its long-term debt to manage interest rate risk by converting floating interest rate debt to fixed-rate debt. This swap agreement matured in August 2012. Changes in the value of the interest rate swap are reflected in other comprehensive income of the joint venture, and the Company accounts for its share of the change in the interest rate swap in other comprehensive income.

Market risk related to our farming inventories ultimately depends on the value of almonds, grapes, and pistachios at the time of payment or sale. Credit risk related to our receivables depends upon the financial condition of our customers. Based on historical experience with our current customers and periodic credit evaluations of our customers’ financial conditions, we believe our credit risk is minimal. Market risk is discussed below in the section pertaining to commodity price exposure.

The following tables provide information about our financial instruments that are sensitive to changes in interest rates. The tables present our debt obligations and marketable securities and their related weighted-average interest rates by expected maturity dates.

Interest Rate Sensitivity Financial Market Risks

Principal Amount by Expected Maturity

At June 30, 2013

(In thousands except percentage data)

	2013			2014			2015			2016			2017			Thereafter			Total			Fair Value at June 30, 2013
Assets:
Marketable securities	$	9,168		$	20,222		$	20,471		$	10,351		$	4,572		$	—		$	64,784		$	64,916
Weighted average interest rate	1.59		%	1.41		%	1.55		%	1.18		%	1.25		%	—		%	1.43		%
Liabilities
Long-term debt	$	20		$	43		$	46		$	49		$	52		$	23		$	233		$	233
Weighted average interest rate	6.75		%	6.75		%	6.75		%	6.75		%	6.75		%	6.75		%	6.75		%

26

Interest Rate Sensitivity Financial Market Risks

Principal Amount by Expected Maturity

At December 31, 2012

(In thousands)

	2013			2014			2015			2016			2017			Thereafter			Total			Fair Value at December 31, 2012
Assets:
Marketable securities	$	20,903		$	20,264		$	18,971		$	4,327		$	—		$	—		$	64,465		$	65,049
Weighted average interest rate	2.05		%	1.44		%	1.49		%	1.47		%	—		%	—		%	1.66		%
Liabilities:
Long-term debt	$	41		$	43		$	46		$	49		$	52		$	22		$	253		$	253
Weighted average interest rate	6.75		%	6.75		%	6.75		%	6.75		%	6.75		%	6.75		%	6.75		%

Our risk with regard to fluctuations in interest rates has increased slightly related to marketable securities since these balances have increased compared to December 31, 2012.

Commodity Price Exposure

As of June 30, 2013, we have exposure to adverse price fluctuations associated with certain inventories and accounts receivable. Farming inventories consist of farming cultural and processing costs related to 2012 and 2011 crop production. The farming costs inventoried are recorded at actual costs incurred. Historically, these costs have been recovered each year when that year’s crop harvest has been sold.

With respect to accounts receivable, the amount at risk relates primarily to farm crops. These receivables are recorded as estimates of the prices that ultimately will be received for the crops. The final price is generally not known for several months following the close of our fiscal year. Of the $4,297,000 of accounts receivable outstanding at June 30, 2013, $1,757,000 or 65% is at risk to changing prices. Of the amount at risk to changing prices, $1,316,000 is attributable to pistachios and $441,000 is attributable to almonds. The comparable amount of accounts receivable at risk to price changes at December 31, 2012 was $7,867,000, or 82% of the total accounts receivable of $8,768,000. Of the December 31, 2012 amount at risk to changing prices, $5,025,000 is related to pistachios and $2,842,000 is related to almonds.

The price estimated for recording accounts receivable for pistachios recorded at June 30, 2013 was $2.24 per pound, as compared to $2.20 per pound at December 31, 2012. For each $.01 change in the price of pistachios, our receivable for pistachios increases or decreases by $6,000. Although the final price of pistachios (and therefore the extent of the risk) is not presently known, our estimate is in the range of prices received for the last three years, which have ranged from $1.91 to $2.75. With respect to almonds, the price estimated for recording the receivable was $2.38 per pound. For each $0.01 change in the price of almonds, our receivable for almonds increases or decreases by $2,000. The range of final prices over the last three years for almonds has ranged from $1.71 to $3.06 per pound.

ITEM 4. CONTROLS AND PROCEDURES

(a) Evaluation of Disclosure Controls and Procedures

As of the end of the period covered by this report, we carried out an evaluation, under the supervision and with the participation of our management, including our Chief Executive Officer, Chief Financial Officer and Controller, of the effectiveness of the design and operation of our disclosure controls and procedures pursuant to Rules 13a-15 and 15d-15 of the Securities Exchange Act of 1934, as amended, or the Exchange Act. Based upon that evaluation, the Chief Executive Officer and Chief Financial Officer concluded that our disclosure controls and procedures are effective in ensuring that all information required in the reports we file or submit under the Exchange Act was accumulated and communicated to our management, including our Chief Executive Officer and Chief Financial Officer, as appropriate to allow timely decisions regarding required disclosure and was recorded, processed, summarized and reported within the time period required by the rules and regulations of the Securities and Exchange Commission.

(b) Changes in Internal Control over Financial Reporting

27

There have been no changes in our internal control over financial reporting identified in connection with the evaluation required by paragraph (d) of Rule 13a-15 or Rule 15d-15 under the Exchange Act that occurred during our last fiscal quarter that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

PART II – OTHER INFORMATION

Item 1. Legal Proceedings

Please refer to “Note 9. Commitments and Contingencies” in the Notes to Unaudited Consolidated financial Statements in this report.

Item 1A. Risk Factors

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

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds

Not applicable.

Item 3. Defaults Upon Senior Securities

Not applicable.

Item 4. Mine Safety Disclosures

Not applicable.

Item 5. Other Information

Not applicable.

28

Item 6. Exhibits:

3.1	Restated Certificate of Incorporation	FN 1
3.2	By-Laws	FN 1
4.1	Form of First Additional Investment Right	FN 2
4.2	Form of Second Additional Investment Right	FN 3
4.3	Registration and Reimbursement Agreement	FN 10
10.1	Water Service Contract with Wheeler Ridge-Maricopa Water Storage District (without exhibits), amendments originally filed under Item 11 to Registrant’s Annual Report on Form 10-K	FN 4
10.5	Petro Travel Plaza Operating Agreement	FN 5
10.6	*Amended and Restated Stock Option Agreement Pursuant to the 1992 Employee Stock Incentive Plan	FN 5
10.7	*Severance Agreement	FN 5
10.8	*Director Compensation Plan	FN 5
10.9	*Amended and Restated Non-Employee Director Stock Incentive Plan	FN 13
10.9 (1)	*Stock Option Agreement Pursuant to the Non-Employee Director Stock Incentive Plan	FN 5
10.10	*Amended and Restated 1998 Stock Incentive Plan	FN 14
10.10 (1)	*Stock Option Agreement Pursuant to the 1998 Stock Incentive Plan	FN 5
10.11	*Employment Contract – Robert A. Stine	FN 5
10.12	Lease Agreement with Calpine Corp.	FN 6
10.15	Form of Securities Purchase Agreement	FN 7
10.16	Form of Registration Rights Agreement	FN 8
10.17	*2004 Stock Incentive Program	FN 9
10.18	*Form of Restricted Stock Unit Agreement	FN 9
10.19	*Form of Restricted Stock Agreement for Directors	FN 9
10.23	Tejon Mountain Village LLC Operating Agreement	FN 11

29

		10.24	Tejon Ranch Conservation and Land Use Agreement	FN 12
		10.25	Second Amended and Restated Limited Liability Company Agreement of Centennial Founders, LLC	FN 15
		10.26	*Executive Employment Agreement - Allen E. Lyda	FN 16
		10.27	Limited Liability Company Agreement of TRCC/Rock Outlet Center LLC	FN 17
		31.1	Certification as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
		31.2	Certification as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
		32	Certification Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
		101.INS	XBRL Instance Document.
		101.SCH	XBRL Taxonomy Extension Schema Document.
		101.CAL	XBRL Taxonomy Extension Calculation Linkbase Document.
		101.DEF	XBRL Taxonomy Extension Definition Linkbase Document.
		101.LAB	XBRL Taxonomy Extension Label Linkbase Document.
		101.PRE	XBRL Taxonomy Extension Presentation Linkbase Document.
*	Management contract, compensatory plan or arrangement.
FN 1	This document, filed with the Securities and Exchange Commission in Washington D.C. (file number 1-7183) under Item 14 to our Annual Report on Form 10-K for year ended December 31, 1987, is incorporated herein by reference.
FN 2	This document, filed with the Securities and Exchange Commission in Washington, D.C. (file number 1-7183) as Exhibit 4.3 to our Current Report on Form 8-K filed on May 7, 2004, is incorporated herein by reference.
FN 3	This document, filed with the Securities and Exchange Commission in Washington, D.C. (file number I-7183) as Exhibit 4.4 to our Current Report on Form 8-K filed on May 7, 2004, is incorporated herein by reference.
FN 4	This document, filed with the Securities and Exchange Commission in Washington D.C. (file number 1-7183) under Item 14 to our Annual Report on Form 10-K for year ended December 31, 1994, is incorporated herein by reference.
FN 5	This document, filed with the Securities and Exchange Commission in Washington D.C. (file number 1-7183) under Item 14 to our Annual Report on Form 10-K, for the period ending December 31, 1997, is incorporated herein by reference.
FN 6	This document filed with the Securities and Exchange Commission in Washington D.C. (file number 1-7183) under Item 14 to our Annual Report on Form 10-K for the year ended December 31, 2001, is incorporated herein by reference.
FN 7	This document, filed with the Securities and Exchange Commission in Washington, D.C. (file number 1-7183) as Exhibit 4.1 to our Current Report on Form 8-K filed on May 7, 2004, is incorporated herein by reference.
FN 8	This document, filed with the Securities and Exchange Commission in Washington, D.C. (file number 1-7183) as Exhibit 4.2 to our Current Report on Form 8-K filed on May 7, 2004, is incorporated herein by reference.

30

FN 9	This document, filed with the Securities and Exchange Commission in Washington D.C. (file number 1-7183) under Item 15 to our Annual Report on Form 10-K for the year ended December 31, 2004, is incorporated herein by reference.
FN 10	This document, filed with the Securities and Exchange Commission in Washington, D.C. (file number 1-7183) as Exhibit 4.1 to our Current Report on Form 8-K filed on December 20, 2005, is incorporated herein by reference.
FN 11	This document, filed with the Securities and Exchange Commission in Washington D.C. (file number 1-7183) as Exhibit 10.23 to our Current Report on Form 8-K filed on May 24, 2006, is incorporated herein by reference.
FN 12	This document, filed with the Securities and Exchange Commission in Washington, D.C. (file number 1-7183) as Exhibit 10.24 to our Current Report on Form 8-K filed on June 23, 2008, is incorporated herein by reference.
FN 13	This document, filed with the Securities and Exchange Commission in Washington, D.C. (file number 1-7183) as Exhibit 10.9 to our Annual Report on form 10-K for the year ended December 31, 2008, is incorporated herein by reference.
FN 14	This document, filed with the Securities and Exchange Commission in Washington, D.C. (file number 1-7183) as Exhibit 10.10 to our Annual Report on form 10-K for the year ended December 31, 2008, is incorporated herein by reference
FN 15	This document, filed with the Securities and Exchange Commission in Washington, D.C. (file number 1-7183) under Item 5 to our Quarterly Report on Form 10-Q for the period ending June 30, 2009, is incorporated herein by reference.
FN 16	This document, filed with the Securities and Exchange Commission in Washington, D.C. (file number 1-7183) under Item 5 to our Quarterly Report on Form 10-Q for the period ending March 31, 2013, is incorporated herein by reference.
FN 17	This document, filed with the Securities and Exchange Commission in Washington, D.C. (file number 1-7183) as Exhibit 10.27 to our Current Report on Form 8-K filed on June 4, 2013, is incorporated herein by reference.

31

SIGNATURES

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

	TEJON RANCH CO.
	(The Company)
August 7, 2013	BY	/s/ Allen E. Lyda
DATE		Allen E. Lyda
		Executive Vice President, Chief Financial Officer

32

EX-31.1

EXHIBIT 31.1

CERTIFICATION AS ADOPTED PURSUANT TO SECTION 302

OF THE SARBANES-OXLEY ACT OF 2002

I, Robert A. Stine, certify that:

1. I have reviewed this quarterly report on Form 10-Q of Tejon Ranch Co.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15(d)-15(f)) for the registrant and have:

a. Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b. Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c. Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d. Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

a. All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b. Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Dated:	August 7, 2013	/s/ Robert A. Stine
			Robert A. Stine,
			Chief Executive Officer

EX-31.2

EXHIBIT 31.2

CERTIFICATION AS ADOPTED PURSUANT TO SECTION 302

OF THE SARBANES-OXLEY ACT OF 2002

I, Allen E. Lyda, certify that:

1. I have reviewed this quarterly report on Form 10-Q of Tejon Ranch Co.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15(d)-15(f)) for the registrant and have:

a. Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b. Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c. Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d. Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

a. All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b. Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Dated:	August 7, 2013	/s/ Allen E. Lyda
			Allen E. Lyda
			Chief Financial Officer

EX-32

EXHIBIT 32

CERTIFICATION PURSUANT TO

18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

Each of the undersigned hereby certifies, in his capacity as an officer of Tejon Ranch Co. (the “Company”), for purposes of 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that to his own knowledge:

• The Quarterly Report of the Company on Form 10-Q for the period ended June 30, 2013 fully complies with the requirements of Section 13(a) of the Securities Exchange Act of 1934; and

• The information contained in such report fairly presents, in all material respects, the financial condition and results of operation of the Company.

A signed original of this written statement required by Section 906 has been provided to Tejon Ranch Co. and will be retained by Tejon Ranch Co., and furnished to the Securities and Exchange Commission or its staff upon request.

Dated:	August 7, 2013
/s/ Robert A. Stine
Robert A. Stine,
Chief Executive Officer
/s/ Allen E. Lyda
Allen E. Lyda
Chief Financial Officer

XML

Commitments and Contingencies

6 Months Ended

Jun. 30, 2013

Commitments and Contingencies Disclosure [Abstract]

COMMITMENTS AND CONTINGENCIES

COMMITMENTS AND CONTINGENCIES

A total of 5,488 acres of the Company’s land is subject to water contracts with the WRMWSD, requiring minimum future annual payments through the life of the contract which is 2035. The estimated future minimum annual payments are $2,500,000 before any potential credits are received, whether or not water is available or is used. These payments are expensed each quarter through our farming operations.

The Tejon Ranch Public Facilities Financing Authority, or TRPFFA, is a joint powers authority formed by Kern County and the TCWD, to finance public infrastructure within the Company’s Kern County developments. TRPFFA has created two Community Facilities Districts, or CFDs, the West CFD and the East CFD. The West CFD has placed liens on 420 acres of the Company’s land to secure payment of special taxes related to $30,000,000 of bond debt sold by TRPFFA for Tejon Ranch Commerce Center, or TRCC-West. The East CFD has placed liens on 1,931 acres of the Company’s land to secure payments of special taxes related to $39,750,000 of bond debt sold by TRPFFA for TRCC-East. At TRCC-West, the West CFD has no additional bond debt approved for issuance. At TRCC-East, the East CFD has approximately $80,250,000 of additional bond debt authorized by TRPFFA that can be sold in the future.

In connection with the sale of bonds there is a standby letter of credit for $5,426,000 related to the issuance of East CFD bonds. The standby letter of credit is in place to provide additional credit enhancement and cover approximately two years worth of interest on the outstanding bonds. This letter of credit will not be drawn upon unless the Company, as the largest land owner in the CFD, fails to make its property tax payments. The Company believes that the letter of credit will never be drawn upon. The letter of credit is for two years beginning in January 2013 and will be renewed in two-year intervals as necessary. The annual cost related to the letter of credit is approximately $83,000.

The Company is obligated, as a landowner in each CFD, to pay its share of the special taxes assessed each year. The secured lands include both the TRCC-West and TRCC-East developments. Proceeds from the sale of West CFD bonds went to reimburse the Company for public infrastructure related to the TRCC West development. At this time there are no additional reimbursement funds remaining from the West CFD bonds and there is approximately $8,900,000 of funds available for reimbursement of cost within the East CFD bonds. During the second quarter of 2013, $14,139,000 of funds were reimbursed to the Company. During 2012, the Company paid approximately $606,000 in special taxes. We anticipate we will pay approximately $886,000 in special taxes during 2013. As development continues to occur at TRCC, new owners of land and new lease tenants, through triple net leases, will bear an increasing portion of the assessed special tax. As this happens, the Company’s obligation is correspondingly reduced. The amount of special taxes paid by the Company could change in the future based on the amount of bonds outstanding and the amount of taxes paid by others.

Tejon Mountain Village

On November 10, 2009, a suit was filed in the U.S. District Court for the Eastern District of California (Fresno division) by David Laughing Horse Robinson ("plaintiff") an alleged representative of the federally-unrecognized "Kawaiisu Tribe" alleging, inter alia, that the Company does not hold legal title to the land within the TMV development that it seeks to develop. The grounds for the federal lawsuit were the subject of a United States Supreme Court decision in 1924 where the United States Supreme Court found against the Indian tribes. The suit named as defendants the Company, two affiliates (Tejon Mountain Village, LLC and Tejon Ranchcorp), the County of Kern, or County, and Ken Salazar, in his capacity as U.S. Secretary of the Interior.

The Company and other defendants filed motions to dismiss plaintiff's complaint for failure to state a claim and lack of jurisdiction. On January 24, 2011, the Company received a ruling by Judge Wanger dismissing all claims against the Company, TMV, the County and the federal defendants. However, the judge did grant a limited right by the plaintiff to amend certain causes of action in the complaint.

During April 2011, the plaintiff filed his second amended complaint against the Company, alleging similar items as in the original suit. The plaintiff filed new materials during July, 2011 related to his second amended complaint. Thereafter, the case was reassigned to Magistrate Judge McAuliffe. On January 18, 2012, Judge McAuliffe issued an order dismissing all claims in plaintiff's second amended complaint for failure to state a cause of action and/or for lack of jurisdiction, but allowing the plaintiff one more opportunity to state certain land claims provided plaintiff file an amended complaint on or before February 17, 2012. The court also indicated that it was considering dismissing the case due to the lack of federal recognition of the "Kawaiisu Tribe". The court then granted plaintiff an extension until March 19, 2012 to file his third amended complaint.

Plaintiff filed his third amended complaint on March 19, 2012. Defendants filed motions to dismiss all claims in the third amended complaint without further leave to amend on April 30, 2012. Plaintiff thereafter substituted in new counsel and with leave of court filed his opposition papers on June 8, 2012. Defendants filed their reply papers on June 22, 2012. Oral argument of the motions to dismiss the third amended complaint was conducted on July 20, 2012. On August 7, 2012, the court issued its order dismissing all of Robinson's claims without leave to amend and with prejudice, on grounds of lack of jurisdiction and failure to state a claim.

On September 24, 2012, Robinson (through another new counsel) filed a timely notice of appeal to the U.S. Court of Appeals for the Ninth Circuit. On September 26, 2012, the Court of Appeals issued its time schedule order calling for briefing to be completed by February, 2013. Robinson's brief was due to be filed on January 2, 2013. On February 26, 2013, the Ninth Circuit issued an order dismissing the appeal for failure to prosecute including failure to file an opening brief. Forty-five days later, Robinson's counsel filed a motion to reinstate the appeal. As an excuse Robinson's new counsel offered that he overlooked the court of appeal's briefing schedule order and assumed that state court procedure would be followed. The motion to reinstate the appeal was accompanied by a proposed opening brief. In response, the Company and the County filed oppositions to the motion to reinstate the appeal. Despite objections by the Company and the County (in which the U.S. Department of Justice ("DOJ") did not join), the Ninth Circuit granted Robinson's motion to reinstate, rejected the appeal of that reinstatement decision by the County and the Company, and set a due date of July 7, 2013 for the opposition briefs of the Company and the County to be filed. Thereafter, the DOJ and the County exercised their right to obtain an automatic 30-day extension to August 6, 2013, and the Company filed an unopposed motion (which the Ninth Circuit granted) extending the Company's date for its opposition brief to August 6, 2013 as well. In the meantime, the Company continues to believe that a negative outcome of this case is remote at this time and the monetary impact of an adverse result, if any, also cannot be estimated at this time.

National Cement

The Company leases land to National Cement Company of California Inc., or National, for the purpose of manufacturing Portland cement from limestone deposits on the leased acreage. The California Regional Water Quality Control Board, or RWQCB, for the Lahontan Region issued several orders in the late 1990s with respect to environmental conditions on the property currently leased to National:

(1) Groundwater plume of chlorinated hydrocarbon compounds. This order directs the Company’s former tenant Lafarge Corporation, or Lafarge, the current tenant National, and the Company to, among other things, clean up groundwater contamination on the leased property. In 2003, Lafarge and National installed a groundwater pump-and-treat system to clean up the groundwater. The Company is advised that Lafarge and National continue to operate the cleanup system and will continue to do so over the near-term.

(2) Cement kiln dust. National and Lafarge have consolidated, closed and capped cement kiln dust piles located on land leased from the Company. An order of the RWQCB directs National, Lafarge and the Company to maintain and monitor the effectiveness of the cap. Maintenance of the cap and groundwater monitoring remain as on-going activities.

(3) Former industrial waste landfills. This order requires Lafarge, National and the Company to complete the cleanup of groundwater associated with the former industrial waste landfills. The Company is advised that the cleanup is complete. Lafarge continues to monitor the groundwater.

(4) Diesel fuel. An order of the RWQCB directs Lafarge, National and the Company to clean up contamination from a diesel fuel tank and pipeline. The Company is advised that Lafarge and National have substantially completed the groundwater cleanup and that groundwater monitoring remains an on-going activity.

To date, the Company is not aware of any failure by Lafarge or National to comply with the orders or informal requests of the RWQCB. Under current and prior leases, National and Lafarge are obligated to indemnify the Company for costs and liabilities arising directly or indirectly out of their use of the leased premises. The Company believes that all of the matters described above are included within the scope of the National or Lafarge indemnity obligations and that Lafarge and National have sufficient resources to perform any reasonably likely obligations relating to these matters. If they do not and the Company is required to perform the work at its own cost, it is unlikely that the amount of any such expenditure by the Company would be material.

Antelope Valley Groundwater Cases

On November 29, 2004, a conglomerate of public water suppliers filed a cross-complaint in the Los Angeles Superior Court seeking a judicial determination of the rights to groundwater within the Antelope Valley basin, including the groundwater underlying the Company's land. Four phases of a multi-phase trial have been completed. Upon completion of the third phase, the court ruled that the groundwater basin is currently in overdraft and established a current total sustainable yield. The fourth phase of trial resulted in confirmation of each party's groundwater pumping for 2011 and 2012. The next phase of trial is anticipated to occur later this year and may address a number of issues, including whether prescription of rights to groundwater has occurred. At this time, it is difficult to ascertain whether a settlement agreement will be reached and what effect, if any, this case may have on the Centennial project or the Company's remaining lands in the Antelope Valley. Because the water supply plan for the Centennial project includes several sources of water in addition to groundwater underlying the Company's lands, and because the creation of an efficient market for local water rights is frequently an outcome of adjudication proceedings, the Company remains hopeful that sufficient water to supply the Company's needs will continue to be available for its use regardless of the outcome of this case.

State Water Resources Control Board Lawsuit

On May 12, 2010, the California Attorney General, on behalf of the State Water Resources Control Board, filed a complaint in the Alameda County Superior Court for civil penalties and a permanent injunction against a number of TravelCenters of America LLC, or TA, facilities in the Central Valley of California. The travel centers in the Petro Travel Plaza Holdings LLC, or TA/Petro, were also included in the complaint. The lawsuit alleges violations of various reporting, operating and monitoring regulations related to operation and maintenance of underground storage tanks. In addition to the TA/Petro entity and its respective member entities, the lawsuit also names the Company and Tejon Industrial Corporation as defendants. The Company has tendered defense of the lawsuit to TA, under the “defend and indemnify” clause in the TA/Petro LLC's operating agreement, and has also secured the services of an outside law firm to work with TA's outside counsel under a joint defense agreement. On September 16, 2011, the Company and Tejon Industrial Corp. were dismissed from the lawsuit, without prejudice. The parties remaining are currently engaged in discussions regarding a negotiated resolution, and the Company understands that a settlement of the claims asserted in the litigation is likely. If such a settlement is reached, the Company does not anticipate a material adverse impact on the Company.

Water Bank Lawsuits

On June 3, 2010, the Central Delta and South Delta Water Agencies and several environmental groups, including CBD, filed a complaint in the Sacramento County Superior Court against the California Department of Water Resources (DWR), Kern County Water Agency and a number of “real parties in interest,” including the Company and TCWD. The lawsuit challenges certain amendments to the State Water Project contracts that were originally approved in 1995, known as the “Monterey Amendments.” The original Environmental Impact Report, or EIR, for the Monterey Amendments was determined to be insufficient in an earlier lawsuit, and the current lawsuit (i) challenges the remedial EIR that DWR prepared as a result of the original lawsuit. Among other allegations, the current lawsuit also challenges the transfer of the Kern Water Bank, or KWB, from DWR to Kern County Water Agency and in turn to the Kern Water Bank Authority (KWBA), whose members are various Kern and Kings County interests, including TCWD, which TCWD has a 2% interest in the KWBA, and (ii) asserts the remedial EIR is inadequate. A parallel lawsuit was also filed by the same plaintiffs in Sacramento Superior Court against Kern County Water Agency, also naming the Company and TCWD as real parties in interest, which has been stayed pending the outcome of the other action against DWR. The Company is named on the ground that it “controls” TCWD. TCWD has a contract right for water stored in the KWB and rights to recharge and withdraw water. Counsel for the Company is pursuing a dismissal of the Company from these lawsuits.  In a preliminary favorable ruling on December 19, 2012, Judge Frawley tentatively determined that the challenges to the transfer of the KWB were not timely and barred by the statutes of litigation and doctrine of latches. There has not yet been any substantive hearing on the challenges to the EIR. Given the preliminary nature of these lawsuits, the Company has an insufficient basis to address the merits or potential outcomes of the lawsuit. The monetary value of a potential adverse outcome on the claim likewise cannot be estimated at this time.

XML

Consolidated Balance Sheets (USD $) In Thousands, unless otherwise specified	Jun. 30, 2013	Dec. 31, 2012
Current Assets:
Cash and cash equivalents	$ 10,478	$ 7,219
Marketable securities - available-for-sale	64,916	65,049
Accounts receivable	4,297	8,768
Inventories	9,586	3,839
Prepaid expenses and other current assets	4,084	4,881
Deferred tax assets	1,178	997
Total current assets	94,539	90,753
Property and equipment - net of depreciation (includes $73,833 at June 30, 2013 and $72,115 at December 31, 2012, attributable to Centennial Founders LLC, Note 12)	140,013	146,590
Investments in unconsolidated joint ventures	59,235	54,022
Long-term water assets	28,648	28,565
Long-term deferred tax assets	5,376	5,376
Other assets	2,062	2,550
TOTAL ASSETS	329,873	327,856
Current Liabilities:
Trade accounts payable	3,316	3,845
Accrued liabilities and other	3,282	2,132
Income taxes payable	101	0
Deferred income	754	1,195
Current portion of long-term debt	42	41
Total current liabilities	7,495	7,213
Long-term debt, less current portion	191	212
Long-term deferred gains	2,248	2,248
Other liabilities	7,220	6,508
Pension liability	3,092	3,416
Total liabilities	20,246	19,597
Commitments and contingencies
Tejon Ranch Co. Stockholders’ Equity
Common stock, $.50 par value per share: Authorized shares - 30,000,000 Issued and outstanding shares - 20,136,286 at June 30, 2013 and 20,085,865 at December 31, 2012	10,068	10,043
Additional paid-in capital	197,098	198,117
Accumulated other comprehensive loss	(5,389)	(5,118)
Retained earnings	68,249	65,550
Total Tejon Ranch Co. Stockholders’ Equity	270,026	268,592
Non-controlling interest	39,601	39,667
Total equity	309,627	308,259
TOTAL LIABILITIES AND EQUITY	$ 329,873	$ 327,856

XML

Net Income (Loss) Per Share

6 Months Ended

Jun. 30, 2013

Earnings Per Share [Abstract]

NET INCOME (LOSS) PER SHARE

NET INCOME (LOSS) PER SHARE

Basic net income or loss per share is based upon the weighted average number of shares of common stock outstanding during the period. Diluted net income per share is based upon the weighted average number of shares of common stock outstanding and the weighted average number of shares outstanding assuming the issuance of common stock upon exercise of stock options and vesting of stock grants per U.S. generally accepted accounting principles, or GAAP.

	Three Months Ended June 30		Six Months Ended June 30
	2013	2012	2013	2012
Weighted average number of shares outstanding:
Common stock	20,136,188	20,026,354	20,118,152	20,008,358
Common stock equivalents-stock options, grants	16,323	61,278	17,039	75,372
Diluted shares outstanding	20,152,511	20,087,632	20,135,191	20,083,730

XML

Long Term Water Assets (Tables)

6 Months Ended

Jun. 30, 2013

Long Term Water Assets [Abstract]

Components of water assets

Annual costs associated with these contracts are expensed each quarter.

Purchased water assets consist of the following:

(in acre feet)	June 30, 2013	December 31, 2012
Banked water and water for future delivery
AVEK water bank	13,038	11,478
Company water bank	8,818	8,700
AVEK water for future delivery	2,362	2,362
Total Company and AVEK banked water	24,218	22,540
Transferable water with AVEK	14,786	14,786
SWP contracts	3,444	3,444
Total purchased water - third parties	42,448	40,770
WRMWSD - Contracts with Company	15,547	15,547
TCWD - Contracts with Company	5,479	5,479
TCWD - Banked water contracted to Company	38,943	38,943
Total purchased and contracted water sources in acre feet	102,417	100,739

($ in thousands)	June 30, 2013			December 31, 2012
Banked water and water for future delivery - Company and AVEK	$	4,775		$	4,448
Transferable water	8,988			8,988
SWP Contracts (net of accumulated amortization of $2,375 and $2,021 at June 30, 2013 and December 31 2012, respectively)	15,593			15,837
Total water assets	29,356			29,273
Less: current portion	(708		)	(708		)
Long-term water assets	$	28,648		$	28,565

XML

Retirement Plans

6 Months Ended

Jun. 30, 2013

Compensation and Retirement Disclosure [Abstract]

RETIREMENT PLANS

RETIREMENT PLANS

The Company has a defined benefit plan that covers many of its employees, or the Benefit Plan. The benefits are based on years of service and the employee’s five-year final average salary. Contributions are intended to provide for benefits attributable to service both to date and expected to be provided in the future. The Company funds the plan in accordance with the Employee Retirement Income Security Act of 1974 (ERISA) and the Pension Protection Act. The Company anticipates contributing approximately $850,000 to the plan during 2013.

The Benefit Plan assets consist of equity, debt and short-term money market investment funds. The plan’s current investment policy targets 65% equities, 25% debt and 10% money market funds. Equity and debt investment percentages are allowed to fluctuate plus or minus 20% around the respective targets to take advantage of market conditions. As an example, equities can fluctuate from 78% to 52% of plan assets. At June 30, 2013, the investment mix was approximately 61% equity, 32% debt, and 7% money market funds. At December 31, 2012, the investment mix was approximately 71% equity, 26% debt and 3% money market funds. Equity investments consist of a combination of individual equity securities plus value funds, growth funds, large cap funds and international stock funds. Debt investments consist of U.S. Treasury securities and investment grade corporate debt. The weighted-average discount rate and rate of increase in future compensation levels used in determining the periodic pension cost is 4.0% in 2013 and 2012. The expected long-term rate of return on plan assets is 7.5% in 2013 and 2012. The long-term rate of return on plan assets is based on the historical returns within the plan and expectations for future returns.

The expected total pension and retirement expense for the Benefit Plan was as follows:

	Six Months Ended
(In thousands)	2013			2012
Cost components:
Service cost-benefits earned during the period	$	(142	)	$	(126	)
Interest cost on projected benefit obligation	(188		)	(192		)
Expected return on plan assets	228			222
Net amortization and deferral	(96		)	(210		)
Total net periodic pension cost	$	(198	)	$	(306	)

The Company has a Supplemental Executive Retirement Plan, or SERP, to restore to executives designated by the Compensation Committee of the Board of Directors the full benefits under the pension plan that would otherwise be restricted by certain limitations now imposed under the Internal Revenue Code. The SERP is currently unfunded. The expected total pension and retirement expense for SERP was as follows:

	Six Months Ended
(In thousands)	2013			2012
Cost components:
Service cost-benefits earned during the period	$	(86	)	$	(86	)
Interest cost on projected benefit obligation	(108		)	(108		)
Net amortization and deferral	(144		)	(32		)
Total net periodic pension cost	$	(338	)	$	(226	)

XML

Retirement Plan (Details) (USD $) In Thousands, unless otherwise specified	6 Months Ended
	Jun. 30, 2013	Jun. 30, 2012
Benefit Plan [Member]
Cost components:
Service cost-benefits earned during the period	$ (142)	$ (126)
Interest cost on projected benefit obligation	(188)	(192)
Expected return on plan assets	228	222
Net amortization and deferral	(96)	(210)
Total net periodic pension cost	(198)	(306)
SERP [Member]
Cost components:
Service cost-benefits earned during the period	(86)	(86)
Interest cost on projected benefit obligation	(108)	(108)
Net amortization and deferral	(144)	(32)
Total net periodic pension cost	$ (338)	$ (226)

XML

Long Term Water Assets (Textual) (Details) (SWP Contracts, USD $) In Thousands, unless otherwise specified	6 Months Ended
	Jun. 30, 2013
SWP Contracts
Long Term Water Assets (Textual) [Abstract]
Amortization expense	$ 708
Annual amortization (Year1)	708
Annual amortization (Year2)	708
Annual amortization (Year3)	708
Annual amortization (Year4)	708
Annual amortization (Year5)	$ 708

XML

Stock Compensation (Tables)

6 Months Ended

Jun. 30, 2013

Share-based Compensation [Abstract]

Schedule of performance share awards granted, by performance conditions

The payouts at each performance goal are as follows:

Performance Share Grants with Performance Conditions (in shares)
Below threshold performance	—
Threshold performance	82,296
Target performance	407,175
Maximum performance	594,993

Summary of stock grant activity

The following is a summary of the Company’s stock grant activity assuming target achievement for outstanding performance grants for the following periods:

	June 30, 2013		December 31, 2012
Stock Grants Outstanding Beginning of the Year	688,041		744,508
New Stock Grants/Estimated additional shares maximum performance	56,087		113,643
Vested Grants	(62,997	)	(170,110	)
Expired/Forfeited Grants	(221,552	)	—
Stock Grants Outstanding June 30, 2013	459,579		688,041

Schedule of employee service share-based compensation, allocation of recognized period costs

The following table summarizes stock compensation costs for the Company's 1998 Stock Incentive Plan, or Employee 1998 Plan, and the NDSI Plan for the following periods:

	Six Months Ended			Six Months Ended
Employee 1998 Plan:	June 30, 2013			June 30, 2012
Expensed	$	(952,000	)	$	3,475,000
Capitalized	208,000			167,000
	(744,000		)	3,642,000
NDSI Plan	384,000			183,000
	$	(360,000	)	$	3,825,000

XML

Short-Term and Long-Term Debt (Tables)

6 Months Ended

Jun. 30, 2013

Debt Disclosure [Abstract]

Components of Long-term debt

Long-term debt consists of the following:

($ in thousands)	June 30, 2013			December 31, 2012
Note payable to a bank	$	233		$	253
Less current portion	(42		)	(41		)
	$	191		$	212

XML

Commitments and Contingencies (Details) (USD $)	6 Months Ended	12 Months Ended
	Jun. 30, 2013 acre	Dec. 31, 2012
Commitments and Contingencies (Textual) [Abstract]
Acres of land subject to water contracts	5,488
Estimated future minimum annual payments	$ 2,500,000
Letter of credit period	2 years
Letter of credit renewal period	2 years
Expected reimbursements in current fiscal year	14,139,000
Special taxes paid	886,000	606,000
Interest rate held by TCWD in KWBA	2.00%
West CFD [Member]
Commitments and Contingencies (Textual) [Abstract]
Acres of land released from land liens	420
Standby letter of credit	30,000,000
Additional bond debt authorized to be sold in future	0
Additional reimbursement funds	0
East CFD [Member]
Commitments and Contingencies (Textual) [Abstract]
Acres of land released from land liens	1,931
Standby letter of credit	39,750,000
Additional bond debt authorized to be sold in future	80,250,000
Additional reimbursement funds	8,900,000
Standby letter of credit [Member]
Commitments and Contingencies (Textual) [Abstract]
Standby letter of credit	5,426,000
Letter of credit [Member]
Commitments and Contingencies (Textual) [Abstract]
Annual cost related to letter of credit	$ 83,000

XML

Marketable Securities (Textual) (Details) (USD $)	6 Months Ended
	Jun. 30, 2013
Marketable Securities (Textual) [Abstract]
Fair market value of investment securities exceeds cost basis	$ 132,000
Other-than-temporary impairments recorded for securities	0
Changes in unrealized gains on available for sale securities, taxes	(271,000)
Estimated taxes of change in value of available-for-sale securities	181,000
Gross unrealized holding gains	388,000
Gross unrealized holding losses	$ 256,000

XML

Short-Term and Long-Term Debt (Details) (USD $) In Thousands, unless otherwise specified	Jun. 30, 2013	Dec. 31, 2012
Debt Disclosure [Abstract]
Note payable to a bank	$ 233	$ 253
Current portion of long-term debt	(42)	(41)
Long-term debt, less current portion	$ 191	$ 212

XML

Business Segments (Details) (USD $) In Thousands, unless otherwise specified	6 Months Ended
	Jun. 30, 2013	Jun. 30, 2012
Real estate - commercial/industrial
Revenue components of commercial/industrial real estate segment
Revenue of commercial/industrial real estate segment	$ 5,547	$ 4,771
Commercial leases
Revenue components of commercial/industrial real estate segment
Revenue of commercial/industrial real estate segment	3,401	2,958
Grazing leases
Revenue components of commercial/industrial real estate segment
Revenue of commercial/industrial real estate segment	748	587
Land Sale
Revenue components of commercial/industrial real estate segment
Revenue of commercial/industrial real estate segment	0	648
All other land management ancillary services
Revenue components of commercial/industrial real estate segment
Revenue of commercial/industrial real estate segment	1,398	578
Mineral resources
Revenue components of commercial/industrial real estate segment
Revenue of commercial/industrial real estate segment	5,631	7,785
Oil and gas
Revenue components of commercial/industrial real estate segment
Revenue of commercial/industrial real estate segment	4,418	6,510
Rock aggregate
Revenue components of commercial/industrial real estate segment
Revenue of commercial/industrial real estate segment	296	305
Cement
Revenue components of commercial/industrial real estate segment
Revenue of commercial/industrial real estate segment	375	337
Land lease for oil exploration
Revenue components of commercial/industrial real estate segment
Revenue of commercial/industrial real estate segment	$ 542	$ 633

XML

Basis of Presentation (Details)	6 Months Ended
	Jun. 30, 2013 segment
Basis of Presentation (Textual) [Abstract]
Number of reportable segments	4

XML

Stock Compensation - Stock Grant Activity (Details) (Restricted Stock and Performance Shares)	6 Months Ended	12 Months Ended
	Jun. 30, 2013	Dec. 31, 2012
Restricted Stock and Performance Shares
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Number of Shares [Roll Forward]
Stock Grants Outstanding Beginning of the Year	688,041	744,508
New Stock Grants/Estimated additional shares maximum performance	56,087	113,643
Vested Grants	(62,997)	(170,110)
Expired/Forfeited Grants	(221,552)	0
Stock Grants Outstanding June 30, 2013	459,579	688,041

XML

Accrued Liabilities and Other (Tables)

6 Months Ended

Jun. 30, 2013

Payables and Accruals [Abstract]

Schedule of accrued liabilities

Accrued liabilities and other consists of the following:

($ in thousands)	June 30, 2013		December 31, 2012
Accrued vacation	$	687	$	674
Accrued paid personal leave	640		662
Accrued bonus	1,316		573
Other	639		223
	$	3,282	$	2,132

XML

Unaudited Consolidated Statements of Cash Flows (USD $) In Thousands, unless otherwise specified	6 Months Ended
	Jun. 30, 2013	Jun. 30, 2012
Operating Activities
Net income	$ 2,633	$ 343
Adjustments to reconcile net income to net cash provided by (used in) operating activities:
Depreciation and amortization	1,767	2,553
Amortization of premium/discount of marketable securities	459	415
Equity in earnings of unconsolidated joint ventures, net	(1,679)	(534)
Non-cash retirement plan expense	325	200
Gains on sales of real estate/assets	0	(679)
(Reversal) amortization of stock compensation expense	(568)	3,658
Distribution of earnings from unconsolidated joint ventures	0	3,000
Changes in operating assets and liabilities:
Receivables, inventories and other assets, net	643	739
Current liabilities, net	(948)	(4,902)
Net cash provided by (used in) operating activities	2,632	4,793
Investing Activities
Maturities and sales of marketable securities	14,066	9,823
Funds invested in marketable securities	(14,844)	(10,556)
Property and equipment expenditures	(10,653)	(9,410)
Investment in long term term water assets	(437)	0
Investment in unconsolidated joint ventures	(1,375)	(4,579)
Distribution of equity from unconsolidated joint ventures	0	1,012
Reimbursement of outlet center costs	512	96
Reimbursement proceeds from community facilities district	14,139	0
Other	(127)	(1,636)
Net cash provided by (used in) investing activities	1,281	(15,250)
Financing Activities
Borrowings of short-term debt	0	1,500
Repayments of short-term debt	(20)	(1,500)
Repayments of short-term debt	0	(19)
Proceeds from exercise of stock options	211	123
Taxes on vested stock grants	(845)	(2,270)
Net cash used in financing activities	(654)	(2,166)
Increase (decrease) in cash and cash equivalents	3,259	(12,623)
Cash and cash equivalents at beginning of year	7,219	18,372
Cash and cash equivalents at end of period	10,478	5,749
Supplemental cash flow information
Accrued capital expenditures included in current liabilities	$ 1,122	$ 428

XML

Unaudited Consolidated Statements of Equity (Parenthetical) (USD $) In Thousands, unless otherwise specified	6 Months Ended	12 Months Ended
	Jun. 30, 2013	Dec. 31, 2012
Statement of Stockholders' Equity [Abstract]
Exercise of stock options, tax benefit	$ 3	$ 8

XML

Marketable Securities

6 Months Ended

Jun. 30, 2013

Investments, Debt and Equity Securities [Abstract]

MARKETABLE SECURITIES

MARKETABLE SECURITIES

The Company classifies its securities as available-for-sale and therefore is required to adjust securities to fair value at each reporting date. All costs and both realized and unrealized gains and losses on securities are determined on a specific identification basis.

The following is a summary of available-for-sale securities at:

		June 30, 2013				December 31, 2012
($ in thousands)	Fair Value Hierarchy	Cost		Estimated Fair Value		Cost		Estimated Fair Value
Certificates of deposit
with unrecognized losses for less than 12 months		$	1,623	$	1,615	$	1,578	$	1,571
with unrecognized losses for more than 12 months		354		353		508		507
with unrecognized gains		6,633		6,667		5,586		5,628
Total Certificates of deposit	Level 1	8,610		8,635		7,672		7,706
US Treasury and agency notes
with unrecognized losses for less than 12 months		3,913		3,894		3,057		3,024
with unrecognized losses for more than 12 months		5,312		5,288		874		873
with unrecognized gains		7,195		7,244		12,175		12,267
Total US Treasury and agency notes	Level 2	16,420		16,426		16,106		16,164
Corporate notes
with unrecognized losses for less than 12 months		9,479		9,305		1,993		1,971
with unrecognized losses for more than 12 months		329		328		201		200
with unrecognized gains		20,423		20,668		29,210		29,653
Total Corporate notes	Level 2	30,231		30,301		31,404		31,824
Municipal notes
with unrecognized losses for less than 12 months		2,185		2,160		1,961		1,948
with unrecognized losses for more than 12 months		720		716		620		613
with unrecognized gains		6,618		6,678		6,702		6,794
Total Municipal notes	Level 2	9,523		9,554		9,283		9,355
		$	64,784	$	64,916	$	64,465	$	65,049

We evaluate our securities for other-than-temporary impairment based on the specific facts and circumstances surrounding each security valued below its cost. Factors considered include the length of time the securities have been valued below cost, the financial condition of the issuer, industry reports related to the issuer, the severity of any decline, our intention not to sell the security, and our assessment as to whether it is not more likely than not that we will be required to sell the security before a recovery of its amortized cost basis. We then segregate the loss between the amounts representing a decrease in cash flows expected to be collected, or the credit loss, which is recognized through earnings, and the balance of the loss which is recognized through other comprehensive income.

At June 30, 2013, the fair market value of investment securities exceeded the cost basis by $132,000. The cost basis includes any other-than-temporary impairments that have been recorded for the securities. None have been recorded at June 30, 2013. The Company has determined that any unrealized losses in the portfolio are temporary as of June 30, 2013. The Company believes that market factors such as, changes in interest rates, liquidity discounts, and premiums required by market participants rather than an adverse change in cash flows or a fundamental weakness in credit quality of the issuer have led to the temporary declines in value. In the future based on changes in the economy, credit markets, financial condition of issuers, or market interest rates, this could change.

As of June 30, 2013, the adjustment to accumulated other comprehensive income (loss) in consolidated equity for the temporary change in the value of securities reflects a decrease in the market value of available-for-sale securities of $271,000, which includes estimated taxes of $181,000.

As of June 30, 2013, the Company’s gross unrealized holding gains equal $388,000 and gross unrealized holding losses equal $256,000.

The following tables summarize the maturities, at par, of marketable securities by year:

(in thousands)
At June 30, 2013	2013		2014		2015		2016		2017		Total
Certificates of deposit	$	1,255	$	1,627	$	4,213	$	1,301	$	97	$	8,493
U.S. Treasury and agency notes	3,566		7,287		3,448		1,750		391		16,442
Corporate notes	2,988		6,729		10,017		5,650		3,574		28,958
Municipal notes	1,335		4,365		2,205		1,135		205		9,245
	$	9,144	$	20,008	$	19,883	$	9,836	$	4,267	$	63,138

(in thousands)
At December 31, 2012	2013		2014		2015		2016		Total
Certificates of deposit	$	1,268	$	1,627	$	4,316	$	301	$	7,512
U.S. Treasury and agency notes	6,285		7,248		2,633		11		16,177
Corporate notes	10,916		6,729		9,420		3,325		30,390
Municipal notes	2,305		4,340		1,960		400		9,005
	$	20,774	$	19,944	$	18,329	$	4,037	$	63,084

The Company’s investments in corporate notes are with companies that have an investment grade rating from Standard & Poor’s.

XML

Basis of Presentation

6 Months Ended

Jun. 30, 2013

Organization, Consolidation and Presentation of Financial Statements [Abstract]

BASIS OF PRESENTATION

BASIS OF PRESENTATION

The summarized information of Tejon Ranch Co. and its subsidiaries, (collectively, the “Company”), furnished pursuant to the instructions to Part I of Form 10-Q is unaudited and reflects all adjustments which are, in the opinion of the Company’s management, necessary for a fair statement of the results for the interim period. All such adjustments are of a normal recurring nature. The Company has reclassified certain prior period amounts in the consolidated statements of operations, and cash flows to conform to the current year presentation. We have evaluated subsequent events through the date of issuance of our consolidated financial statements.

The periods ending June 30, 2013 and 2012 include the consolidation of Centennial Founders, LLC’s statement of operations within the resort /residential segment and statements of cash flows. The Company’s June 30, 2013 and December 31, 2012 balance sheets and statements of equity are presented on a consolidated basis including the consolidation of Centennial Founders, LLC.

The Company has identified four reportable segments: commercial/industrial real estate development; resort/residential real estate development; mineral resources; and farming. The Company determined that the mineral resources segment should be reported, as a result of an evaluation of the Company's operations during the fourth quarter of 2012. Mineral resources collects royalty income from oil and gas leases, rock and aggregate leases, and from a cement company. Information for the Company’s reported segments is presented in its consolidated statements of operations. The Company’s reporting segments follow the same accounting policies used for the Company’s consolidated financial statements. Management evaluates a segment’s performance based upon a number of factors including pretax results.

The results of the period reported herein are not indicative of the results to be expected for the full year due to the seasonal nature of the Company’s agricultural activities and timing of real estate sales and leasing activities. Historically, the Company’s largest percentages of farming revenues are recognized during the third and fourth quarters of the fiscal year.

For further information and a summary of significant accounting policies, refer to the Consolidated Financial Statements and notes thereto included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2012.

XML

Short-Term and Long-Term Debt (Details Textual) (USD $)			6 Months Ended
	Jun. 30, 2013	Dec. 31, 2012	Jun. 30, 2013 Revolving line of credit	Jun. 30, 2013 Revolving line of credit Minimum
Short-Term and Long-Term Debt (Textual) [Abstract]
Line of credit amount			$ 30,000,000
Standby letter of credit			0
Interest rate on line of credit			interest rate on this line of credit can float at 2.50% over a selected LIBOR rate or can be fixed at 2.25% above LIBOR for a fixed rate term.
Credit facility maturity term			October 2013
Minimum net worth required for debt compliance				175,000,000
Tangible net worth			309,860,000
Liquid assets, debt covenant	$ 94,539,000	$ 90,753,000	$ 75,394,000	$ 25,000,000

XML

Retirement Plans (Tables)

6 Months Ended

Jun. 30, 2013

Compensation and Retirement Disclosure [Abstract]

Expected total pension and retirement expense

The expected total pension and retirement expense for SERP was as follows:

	Six Months Ended
(In thousands)	2013			2012
Cost components:
Service cost-benefits earned during the period	$	(86	)	$	(86	)
Interest cost on projected benefit obligation	(108		)	(108		)
Net amortization and deferral	(144		)	(32		)
Total net periodic pension cost	$	(338	)	$	(226	)

The expected total pension and retirement expense for the Benefit Plan was as follows:

	Six Months Ended
(In thousands)	2013			2012
Cost components:
Service cost-benefits earned during the period	$	(142	)	$	(126	)
Interest cost on projected benefit obligation	(188		)	(192		)
Expected return on plan assets	228			222
Net amortization and deferral	(96		)	(210		)
Total net periodic pension cost	$	(198	)	$	(306	)

XML

Net Income (Loss) Per Share (Details)	3 Months Ended		6 Months Ended
	Jun. 30, 2013	Jun. 30, 2012	Jun. 30, 2013	Jun. 30, 2012
Weighted average number of shares outstanding:
Common stock	20,136,188	20,026,354	20,118,152	20,008,358
Common stock equivalents-stock options, grants	16,323	61,278	17,039	75,372
Diluted shares outstanding	20,152,511	20,087,632	20,135,191	20,083,730

XML

Long Term Water Assets (Details) (USD $) In Thousands, unless otherwise specified	Jun. 30, 2013	Dec. 31, 2012
Components of water assets
Total long-term assets	$ 29,356	$ 29,273
less: Current portion	(708)	(708)
Long-lived assets held-for-sale	28,648	28,565
Banked water and water for future delivery
Components of water assets
Total long-term assets	4,775	4,448
Transferable water
Components of water assets
Total long-term assets	8,988	8,988
SWP Contracts
Components of water assets
Total long-term assets	15,593	15,837
Accumulated amortization	$ 2,375	$ 2,021

XML

Investment in Unconsolidated and Consolidated Joint Ventures (Textual) (Details) (USD $) In Thousands, unless otherwise specified	3 Months Ended		6 Months Ended
	Jun. 30, 2013	Jun. 30, 2012	Jun. 30, 2013	Jun. 30, 2012	Dec. 31, 2012
Schedule of Equity Method Investments [Line Items]
Investments in unconsolidated joint ventures	$ 59,235		$ 59,235		$ 54,022
Investment in Unconsolidated and Consolidated Joint Ventures (Textual) [Abstract]
Equity in earnings of unconsolidated joint ventures, net	1,270	893	1,679	534
Petro Travel Plaza Holdings LLC
Investment in Unconsolidated and Consolidated Joint Ventures (Textual) [Abstract]
Investment in joint ventures	9,027		9,027
Minority investment in joint ventures	60.00%		60.00%
Ownership percentage			50.00%
Tejon Mountain Village LLC
Investment in Unconsolidated and Consolidated Joint Ventures (Textual) [Abstract]
Investment in joint ventures	41,862		41,862
Percentage of ownership interest joint ventures	50.00%		50.00%
Rockefeller Joint Ventures
Investment in Unconsolidated and Consolidated Joint Ventures (Textual) [Abstract]
Investment in joint ventures	8,346		8,346
Number of joint venture contracts			3
Number of acres for development			91
Five West Parcel LLC
Investment in Unconsolidated and Consolidated Joint Ventures (Textual) [Abstract]
Percentage of ownership interest joint ventures	50.00%		50.00%
Area of building owned and leased			606,000
18-19 West LLC
Investment in Unconsolidated and Consolidated Joint Ventures (Textual) [Abstract]
Number of acres for development			61.5
TRCC-East
Investment in Unconsolidated and Consolidated Joint Ventures (Textual) [Abstract]
Investment in joint ventures	$ 10,558		$ 10,558
Centennial Founders, LLC
Investment in Unconsolidated and Consolidated Joint Ventures (Textual) [Abstract]
Percentage of ownership interest joint ventures	72.01%		72.01%
Maximum | Rockefeller Joint Ventures
Investment in Unconsolidated and Consolidated Joint Ventures (Textual) [Abstract]
Development of land in TRCC including pursuing Foreign Trade Zone	500		500

XML

Income Taxes (Details) (USD $)	3 Months Ended		6 Months Ended
	Jun. 30, 2013	Jun. 30, 2012	Jun. 30, 2013	Jun. 30, 2012	Dec. 31, 2012
Income Taxes (Textual) [Abstract]
Income tax expense (benefit)	$ 686,000	$ 164,000	$ 833,000	$ (64,000)
Effective income tax rate			24.00%	(20.00%)
Income tax payable	101,000		101,000		0
Income tax payments related to 2013 tax year			$ 100,000

XML

Unaudited Consolidated Statements of Comprehensive Income (Loss) (USD $) In Thousands, unless otherwise specified	3 Months Ended		6 Months Ended
	Jun. 30, 2013	Jun. 30, 2012	Jun. 30, 2013	Jun. 30, 2012
Statement of Other Comprehensive Income [Abstract]
Net income	$ 2,003	$ 110	$ 2,633	$ 343
Other comprehensive income (loss):
Unrealized gains (losses) on available for sale securities	(409)	(68)	(452)	151
Equity in other comprehensive income of unconsolidated joint venture	0	64	0	119
Other comprehensive income (loss) before taxes	(409)	(4)	(452)	270
(Provisions) benefit for income taxes related to other comprehensive income (loss) items	164	1	181	(108)
Other comprehensive income (loss)	(245)	(3)	(271)	162
Total comprehensive income	1,758	107	2,362	505
Total comprehensive income (loss) attributable to non-controlling interests	(81)	(8)	(66)	(50)
Total comprehensive income attributable to common stockholders	$ 1,839	$ 115	$ 2,428	$ 555

XML

Short-Term and Long-Term Debt

6 Months Ended

Jun. 30, 2013

Debt Disclosure [Abstract]

SHORT-TERM AND LONG-TERM DEBT

SHORT-TERM AND LONG TERM DEBT

Long-term debt consists of the following:

($ in thousands)	June 30, 2013			December 31, 2012
Note payable to a bank	$	233		$	253
Less current portion	(42		)	(41		)
	$	191		$	212

This debt is being used to provide long-term financing for a building being leased to Starbucks and the debt is secured by the leased building and land. The balance of the long-term debt instrument listed above approximates the fair value of the instrument.

We have a long-term revolving line of credit of $30,000,000 that, as of June 30, 2013, had no outstanding balance. At the Company’s option, the interest rate on this line of credit can float at 2.50% over a selected LIBOR rate or can be fixed at 2.25% above LIBOR for a fixed rate term. During the term of this credit facility (which matures in October 2013), we can borrow at any time and partially or wholly repay any outstanding borrowings and then re-borrow, as necessary. Under the terms of the line of credit, we must maintain tangible net worth, defined as total equity, including noncontrolling interest, plus debt less intangible assets, of not less than $175,000,000 and liquid assets of not less than $25,000,000. At June 30, 2013 our tangible net worth was $309,860,000 and liquid assets were $75,394,000. A portion of our farm acreage secures this line of credit.

XML

Consolidated Balance Sheets (Parenthetical) (USD $) In Thousands, except Share data, unless otherwise specified	Jun. 30, 2013	Dec. 31, 2012
Property and equipment, net	$ 140,013	$ 146,590
Common stock, par value	$ 0.50	$ 0.50
Common stock, Authorized shares	30,000,000	30,000,000
Common stock, Issued shares	20,136,286	20,085,865
Common stock, outstanding shares	20,136,286	20,085,865
Centennial Founders, LLC
Property and equipment, net	$ 73,833	$ 72,115

XML

Unaudited Consolidated Statements of Operations (USD $) In Thousands, except Per Share data, unless otherwise specified	3 Months Ended		6 Months Ended
	Jun. 30, 2013	Jun. 30, 2012	Jun. 30, 2013	Jun. 30, 2012
Revenues:
Total revenues	$ 7,475	$ 7,849	$ 17,235	$ 17,428
Costs and Expenses:
Total expenses	6,308	8,763	15,978	18,318
Operating income (loss)	1,167	(914)	1,257	(890)
Other Income:
Investment income	238	317	513	635
Interest income (expense)	0	(33)	0	(35)
Other income	14	11	17	35
Total other income	252	295	530	635
Income (loss) from operations before equity in earnings of unconsolidated joint ventures	1,419	(619)	1,787	(255)
Equity in earnings of unconsolidated joint ventures, net	1,270	893	1,679	534
Income before income tax expense (benefit)	2,689	274	3,466	279
Income tax expense (benefit)	686	164	833	(64)
Net income	2,003	110	2,633	343
Net loss attributable to non-controlling interest	(81)	(8)	(66)	(50)
Net income attributable to common stockholders	2,084	118	2,699	393
Net income per share attributable to common stockholders, basic (usd per share)	$ 0.10	$ 0.01	$ 0.13	$ 0.02
Net income per share attributable to common stockholders, diluted (usd per share)	$ 0.10	$ 0.01	$ 0.13	$ 0.02
Real estate - commercial/industrial
Revenues:
Total revenues	2,825	2,623	5,547	4,771
Costs and Expenses:
Total expenses	3,141	2,913	6,254	5,938
Real estate - resort/residential
Revenues:
Total revenues	234	94	471	135
Costs and Expenses:
Total expenses	1,265	1,137	1,574	2,155
Mineral resources
Revenues:
Total revenues	2,765	3,879	5,631	7,785
Costs and Expenses:
Total expenses	65	40	225	157
Farming
Revenues:
Total revenues	1,651	1,253	5,586	4,737
Costs and Expenses:
Total expenses	1,179	960	3,436	3,221
Corporate expenses
Costs and Expenses:
Total expenses	$ 658	$ 3,713	$ 4,489	$ 6,847

XML

Investment in Unconsolidated and Consolidated Joint Ventures (Details) (USD $)	3 Months Ended		6 Months Ended
	Jun. 30, 2013	Jun. 30, 2012	Jun. 30, 2013	Jun. 30, 2012	Dec. 31, 2012
Condensed balance sheet information and statements of operations of unconsolidated and consolidated joint ventures
Net income (loss)	$ 2,084,000	$ 118,000	$ 2,699,000	$ 393,000
Current assets	94,539,000		94,539,000		90,753,000
Property and equipment, net	140,013,000		140,013,000		146,590,000
Long-term debt	(233,000)		(233,000)		(253,000)
Total
Condensed balance sheet information and statements of operations of unconsolidated and consolidated joint ventures
Gross revenues			57,068,000	60,029,000
Net income (loss)			2,207,000	1,257,000
Partner's share of net (income)			863,000	474,000
Equity in income (losses)			1,679,000	534,000
Current assets	22,136,000		22,136,000		10,031,000
Property and equipment, net	175,097,000		175,097,000		160,479,000
Other assets	878,000		878,000		929,000
Long-term debt	(27,988,000)		(27,988,000)		(28,358,000)
Other liabilities	(4,196,000)		(4,196,000)		(3,614,000)
Net assets	165,927,000		165,927,000		139,467,000
Petro Travel Plaza Holdings LLC
Condensed balance sheet information and statements of operations of unconsolidated and consolidated joint ventures
Gross revenues			55,364,000	59,001,000
Net income (loss)			2,394,000	1,540,000
Partner's share of net (income)			958,000	616,000
Equity in income (losses)			1,436,000	675,000
Current assets	11,256,000		11,256,000		9,577,000
Property and equipment, net	43,907,000		43,907,000		44,196,000
Other assets	227,000		227,000		246,000
Long-term debt	(16,988,000)		(16,988,000)		(17,358,000)
Other liabilities	(2,309,000)		(2,309,000)		(3,350,000)
Net assets	36,093,000		36,093,000		33,311,000
Five West Parcel LLC
Condensed balance sheet information and statements of operations of unconsolidated and consolidated joint ventures
Gross revenues			1,673,000	975,000
Net income (loss)			47,000	(282,000)
Partner's share of net (income)			23,000	(141,000)
Equity in income (losses)			24,000	(141,000)
Current assets	1,214,000		1,214,000		194,000
Property and equipment, net	18,111,000		18,111,000		19,025,000
Other assets	651,000		651,000		683,000
Long-term debt	(11,000,000)		(11,000,000)		(11,000,000)
Other liabilities	(67,000)		(67,000)		(39,000)
Net assets	8,909,000		8,909,000		8,863,000
Tejon Mountain Village LLC
Condensed balance sheet information and statements of operations of unconsolidated and consolidated joint ventures
Gross revenues			0	0
Net income (loss)			(83,000)	(47,000)
Partner's share of net (income)			(42,000)	(24,000)
Equity in income (losses)			(41,000)	(23,000)
Current assets	255,000		255,000		218,000
Property and equipment, net	95,772,000		95,772,000		92,846,000
Other assets	0		0		0
Long-term debt	0		0		0
Other liabilities	(520,000)		(520,000)		(224,000)
Net assets	95,507,000		95,507,000		92,840,000
18-19 West LLC
Condensed balance sheet information and statements of operations of unconsolidated and consolidated joint ventures
Gross revenues			31,000	53,000
Net income (loss)			25,000	46,000
Partner's share of net (income)			12,000	23,000
Equity in income (losses)			13,000	23,000
Current assets	30,000		30,000		42,000
Property and equipment, net	4,449,000		4,449,000		4,412,000
Other assets	0		0		0
Long-term debt	0		0		0
Other liabilities	0		0		(1,000)
Net assets	4,479,000		4,479,000		4,453,000
TRCC/Rock Outlet Center
Condensed balance sheet information and statements of operations of unconsolidated and consolidated joint ventures
Gross revenues			0
Net income (loss)			(176,000)
Partner's share of net (income)			(88,000)
Equity in income (losses)			247,000
Current assets	9,381,000		9,381,000
Property and equipment, net	12,858,000		12,858,000
Other assets	0		0
Long-term debt	0		0
Other liabilities	(1,300,000)		(1,300,000)
Net assets	20,939,000		20,939,000
Centennial Founders, LLC
Condensed balance sheet information and statements of operations of unconsolidated and consolidated joint ventures
Gross revenues			314,000	135,000
Net income (loss)			(232,000)	(160,000)
Partner's share of net (income)			(66,000)	(50,000)
Equity in income (losses)			0	(110,000)
Current assets	142,000		142,000		491,000
Property and equipment, net	74,074,000		74,074,000		72,356,000
Other assets	0		0		0
Long-term debt	0		0		0
Other liabilities	(1,024,000)		(1,024,000)		(1,099,000)
Net assets	$ 73,192,000		$ 73,192,000		$ 71,748,000

XML

Business Segments (Tables)

6 Months Ended

Jun. 30, 2013

Segment Reporting [Abstract]

Revenue components of commercial/industrial real estate segment

The revenue components of our commercial/industrial real estate development segment for the six months ended June 30 are as follows:

(In thousands)	2013		2012
Commercial leases	$	3,401	$	2,958
Grazing leases	748		587
Land Sale	—		648
All other land management ancillary services	1,398		578
	$	5,547	$	4,771

The mineral resources segment receives oil and mineral royalties from the exploration and development companies who extract or mine the natural resources from our land. The following table summarizes these activities:

	Six Months Ended
($ in thousands)	June 30, 2013		June 30, 2012
Oil and gas	$	4,418	$	6,510
Rock aggregate	296		305
Cement	375		337
Land lease for oil exploration	542		633
	$	5,631	$	7,785

XML

Marketable Securities (Tables)

6 Months Ended

Jun. 30, 2013

Investments, Debt and Equity Securities [Abstract]

Summary of available-for-sale securities

The following is a summary of available-for-sale securities at:

		June 30, 2013				December 31, 2012
($ in thousands)	Fair Value Hierarchy	Cost		Estimated Fair Value		Cost		Estimated Fair Value
Certificates of deposit
with unrecognized losses for less than 12 months		$	1,623	$	1,615	$	1,578	$	1,571
with unrecognized losses for more than 12 months		354		353		508		507
with unrecognized gains		6,633		6,667		5,586		5,628
Total Certificates of deposit	Level 1	8,610		8,635		7,672		7,706
US Treasury and agency notes
with unrecognized losses for less than 12 months		3,913		3,894		3,057		3,024
with unrecognized losses for more than 12 months		5,312		5,288		874		873
with unrecognized gains		7,195		7,244		12,175		12,267
Total US Treasury and agency notes	Level 2	16,420		16,426		16,106		16,164
Corporate notes
with unrecognized losses for less than 12 months		9,479		9,305		1,993		1,971
with unrecognized losses for more than 12 months		329		328		201		200
with unrecognized gains		20,423		20,668		29,210		29,653
Total Corporate notes	Level 2	30,231		30,301		31,404		31,824
Municipal notes
with unrecognized losses for less than 12 months		2,185		2,160		1,961		1,948
with unrecognized losses for more than 12 months		720		716		620		613
with unrecognized gains		6,618		6,678		6,702		6,794
Total Municipal notes	Level 2	9,523		9,554		9,283		9,355
		$	64,784	$	64,916	$	64,465	$	65,049

Summary of maturities, at par, of marketable securities

The following tables summarize the maturities, at par, of marketable securities by year:

(in thousands)
At June 30, 2013	2013		2014		2015		2016		2017		Total
Certificates of deposit	$	1,255	$	1,627	$	4,213	$	1,301	$	97	$	8,493
U.S. Treasury and agency notes	3,566		7,287		3,448		1,750		391		16,442
Corporate notes	2,988		6,729		10,017		5,650		3,574		28,958
Municipal notes	1,335		4,365		2,205		1,135		205		9,245
	$	9,144	$	20,008	$	19,883	$	9,836	$	4,267	$	63,138

(in thousands)
At December 31, 2012	2013		2014		2015		2016		Total
Certificates of deposit	$	1,268	$	1,627	$	4,316	$	301	$	7,512
U.S. Treasury and agency notes	6,285		7,248		2,633		11		16,177
Corporate notes	10,916		6,729		9,420		3,325		30,390
Municipal notes	2,305		4,340		1,960		400		9,005
	$	20,774	$	19,944	$	18,329	$	4,037	$	63,084

XML

Stock Compensation - Compensation Costs (Details) (USD $) In Thousands, unless otherwise specified	6 Months Ended		3 Months Ended		6 Months Ended
	Jun. 30, 2013	Jun. 30, 2012	Mar. 31, 2013 Executive Officer	Jun. 30, 2013 Chief Executive Officer	Jun. 30, 2013 Employee 1998 Plan:	Jun. 30, 2012 Employee 1998 Plan:	Jun. 30, 2013 NDSI Plan	Jun. 30, 2012 NDSI Plan
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Unamortized cost associated with nonvested stock grants	$ 3,693
Weighted average period of recognition	31 months
Expensed			(485)	(2,271)	(952)	3,475	384	183
Capitalized					208	167
Compensation cost	$ (360)	$ 3,825			$ (744)	$ 3,642

XML

Accrued Liabilities and Other (Details) (USD $) In Thousands, unless otherwise specified	Jun. 30, 2013	Dec. 31, 2012
Payables and Accruals [Abstract]
Accrued vacation	$ 687	$ 674
Accrued paid personal leave	640	662
Accrued bonus	1,316	573
Other	639	223
Total accrued liabilities and other	$ 3,282	$ 2,132

XML

Marketable Securities (Maturities, at par) (Details) (USD $) In Thousands, unless otherwise specified	Jun. 30, 2013	Dec. 31, 2012
Summary of maturities, at par, of marketable securities
2013	$ 9,144	$ 20,774
2014	20,008	19,944
2015	19,883	18,329
2016	9,836	4,037
2017	4,267
Total	63,138	63,084
Certificates of deposit
Summary of maturities, at par, of marketable securities
2013	1,255	1,268
2014	1,627	1,627
2015	4,213	4,316
2016	1,301	301
2017	97
Total	8,493	7,512
US Treasury and agency notes
Summary of maturities, at par, of marketable securities
2013	3,566	6,285
2014	7,287	7,248
2015	3,448	2,633
2016	1,750	11
2017	391
Total	16,442	16,177
Corporate notes
Summary of maturities, at par, of marketable securities
2013	2,988	10,916
2014	6,729	6,729
2015	10,017	9,420
2016	5,650	3,325
2017	3,574
Total	28,958	30,390
Municipal notes
Summary of maturities, at par, of marketable securities
2013	1,335	2,305
2014	4,365	4,340
2015	2,205	1,960
2016	1,135	400
2017	205
Total	$ 9,245	$ 9,005

XML

Long Term Water Assets (Volume of Water Assets) (Details)	Jun. 30, 2013 acre_foot	Dec. 31, 2012 acre_foot
Banked water and water for future delivery
Company water bank	8,818	8,700
Total Company and AVEK banked water	24,218	22,540
Transferable water with AVEK	14,786	14,786
Total purchased water - third parties	42,448	40,770
Total purchased and contracted water sources in acre feet	102,417	100,739
AVEK
Banked water and water for future delivery
AVEK water bank	13,038	11,478
AVEK water for future delivery	2,362	2,362
SWP Contracts
Banked water and water for future delivery
SWP and TCWD contracts	3,444	3,444
WRMWSD
Banked water and water for future delivery
SWP and TCWD contracts	15,547	15,547
TCWD
Banked water and water for future delivery
Total Company and AVEK banked water	38,943	38,943
SWP and TCWD contracts	5,479	5,479

XML

Accrued Liabilities and Other

6 Months Ended

Jun. 30, 2013

Payables and Accruals [Abstract]

ACCRUED LIABILITIES AND OTHER

ACCRUED LIABILITIES AND OTHER

Accrued liabilities and other consists of the following:

($ in thousands)	June 30, 2013		December 31, 2012
Accrued vacation	$	687	$	674
Accrued paid personal leave	640		662
Accrued bonus	1,316		573
Other	639		223
	$	3,282	$	2,132

XML

Investment in Unconsolidated and Consolidated Join Ventures (Tables)

6 Months Ended

Jun. 30, 2013

Equity Method Investments and Joint Ventures [Abstract]

Schedule of condensed income statement and balance sheet related to joint ventures

The Company’s investment balance in its unconsolidated joint ventures differs from its capital accounts in the respective joint ventures. The differential represents the difference between the cost basis of assets contributed by the Company and the agreed-upon contribution value of the assets contributed.

Unaudited condensed balance sheet information of the Company’s unconsolidated and consolidated joint ventures as of June 30, 2013 and December 31, 2012 and condensed statements of operations for the six months ended June 30, 2013 and June 30, 2012 are as follows:

($ in thousands)	UNCONSOLIDATED																	CONSOLIDATED
Statement of Operations for the six months ended June 30, 2013	Petro Travel Plaza Holdings			Five West Parcel			Tejon Mountain Village			18-19 West		TRCC/Rock Outlet Center			Total			Centennial-VIE
Gross revenues	$	55,364		$	1,673		$	—		$	31	$	—		$	57,068		$	314
Net income (loss)	$	2,394		$	47		$	(83	)	$	25	$	(176	)	$	2,207		$	(232	)
Partner’s share of net income (loss)	$	958		$	23		$	(42	)	$	12	$	(88	)	$	863		$	(66	)
Equity in income (losses)	$	1,436		$	24		$	(41	)	$	13	$	247		$	1,679		$	—
Balance Sheet Information as of June 30, 2013
Current assets	$	11,256		$	1,214		$	255		$	30	$	9,381		$	22,136		$	142
Property and equipment, net	43,907			18,111			95,772			4,449		12,858			175,097			74,074
Other assets	227			651			—			—		—			878			—
Long-term debt	(16,988		)	(11,000		)	—			—		—			(27,988		)	—
Other liabilities	(2,309		)	(67		)	(520		)	—		(1,300		)	(4,196		)	(1,024		)
Net assets	$	36,093		$	8,909		$	95,507		$	4,479	$	20,939		$	165,927		$	73,192

($ in thousands)	UNCONSOLIDATED															CONSOLIDATED
Statement of Operations for the six months ended June 30, 2012	Petro Travel Plaza Holdings			Five West Parcel			Tejon Mountain Village			18-19 West			Total			Centennial-VIE
Gross revenues	$	59,001		$	975		$	—		$	53		$	60,029		$	135
Net income (loss)	$	1,540		$	(282	)	$	(47	)	$	46		$	1,257		$	(160	)
Partner’s share of net income (loss)	$	616		$	(141	)	$	(24	)	$	23		$	474		$	(50	)
Equity in income (losses)	$	675		$	(141	)	$	(23	)	$	23		$	534		$	(110	)
Balance Sheet Information as of December 31, 2012
Current assets	$	9,577		$	194		$	218		$	42		$	10,031		$	491
Property and equipment, net	44,196			19,025			92,846			4,412			160,479			72,356
Other assets	246			683			—			—			929			—
Long-term debt	(17,358		)	(11,000		)	—			—			(28,358		)	—
Other liabilities	(3,350		)	(39		)	(224		)	(1		)	(3,614		)	(1,099		)
Net assets	$	33,311		$	8,863		$	92,840		$	4,453		$	139,467		$	71,748

XML

Stock Compensation - Performance Share Grants with Performance Conditions (Details) (Performance Shares)	6 Months Ended
	Jun. 30, 2013
Performance Share Grants with Performance Conditions [Abstract]
Below threshold performance	0
Threshold and Target performance	407,175
Minimum
Performance Share Grants with Performance Conditions [Abstract]
Threshold and Target performance	82,296
Maximum
Performance Share Grants with Performance Conditions [Abstract]
Maximum performance	594,993

XML

Income Taxes

6 Months Ended

Jun. 30, 2013

Income Tax Disclosure [Abstract]

INCOME TAXES

INCOME TAXES

For the six months ended June 30, 2013, the Company incurred a net income tax expense of $833,000 compared to a net income tax benefit of $64,000 for the six months ended June 30, 2012. These represent effective income tax rates of approximately 24% and (20)% for the six months ended June 30, 2013 and, 2012, respectively. The effective tax rate for the first half of 2013 is calculated based on the first quarter net income for 2013 adjusted for estimated permanent tax differences such as depletion allowances. During 2013, depletion allowances have decreased due to lower oil and gas revenues compared to 2012. As of June 30, 2013, our balance sheet reflects an income tax payable of $101,000.

The Company classifies interest and penalties incurred on tax payments as income tax expenses. During the first six months ended June 30, 2013, the Company made income tax payments of $100,000 for the 2013 tax year.

XML

Long Term Water Assets

6 Months Ended

Jun. 30, 2013

Long Term Water Assets [Abstract]

LONG TERM WATER ASSETS

LONG TERM WATER ASSETS

Long term assets consist of water and water contracts held for future use or sale. The water is held at cost which includes the price paid for the water and the cost to pump and deliver the water from the California aqueduct into the water bank. Water is currently held in a water bank on Company land in southern Kern County. Company banked water costs also include costs related to the right to receive additional acre feet of water in the future from the Antelope Valley East Kern Water Agency, or AVEK. The Company has also banked water within an AVEK owned water bank.

The Company also owns additional transferable water and holds State Water Project, or SWP contracts with the Tulare Water Storage and Dudley-Ridge Water Storage Districts to supply water through 2035. These contracts are being amortized using the straight line method over that period. Annual amortization for the next five years will be $708,000 per year. Water contracts with the Wheeler Ridge Maricopa Water Storage District, or WRMWSD, and the Tejon-Castac Water District, or TCWD, are also in place, but were entered into with each district at inception of the contract and not purchased later from third parties, and do not have a related financial value on the books of the Company. Therefore there is no amortization expense related to these contracts. Annual costs associated with these contracts are expensed each quarter.

Purchased water assets consist of the following:

(in acre feet)	June 30, 2013	December 31, 2012
Banked water and water for future delivery
AVEK water bank	13,038	11,478
Company water bank	8,818	8,700
AVEK water for future delivery	2,362	2,362
Total Company and AVEK banked water	24,218	22,540
Transferable water with AVEK	14,786	14,786
SWP contracts	3,444	3,444
Total purchased water - third parties	42,448	40,770
WRMWSD - Contracts with Company	15,547	15,547
TCWD - Contracts with Company	5,479	5,479
TCWD - Banked water contracted to Company	38,943	38,943
Total purchased and contracted water sources in acre feet	102,417	100,739

($ in thousands)	June 30, 2013			December 31, 2012
Banked water and water for future delivery - Company and AVEK	$	4,775		$	4,448
Transferable water	8,988			8,988
SWP Contracts (net of accumulated amortization of $2,375 and $2,021 at June 30, 2013 and December 31 2012, respectively)	15,593			15,837
Total water assets	29,356			29,273
Less: current portion	(708		)	(708		)
Long-term water assets	$	28,648		$	28,565

XML

Unaudited Consolidated Statements of Equity (USD $) In Thousands, except Share data, unless otherwise specified	Total	Common Stock	Additional Paid-In Capital	Accumulated Other Comprehensive Income (Loss)	Retained Earnings	Total Tejon Ranch Co.’s Stockholders' Equity	Noncontrolling Interest
Beginning Balance, Value at Dec. 31, 2011	$ 300,439	$ 9,988	$ 194,273	$ (4,756)	$ 61,109	$ 260,614	$ 39,825
Beginning Balance (in shares) at Dec. 31, 2011		19,975,706
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Net income	4,283				4,441	4,441	(158)
Other comprehensive income	(362)			(362)		(362)
Exercise of stock options (shares)		13,641
Exercise of stock options and related tax benefit of $3 for six months ended June 30, 2012 and $8 for the 12 months ended December 31, 2012	370	7	363			370
Restricted stock issuance (in shares)		179,172
Restricted stock issuance	0	89	(89)			0
Stock compensation	5,832		5,832			5,832
Shares withheld for taxes (in shares)		(82,654)
Shares withheld for taxes	(2,303)	(41)	(2,262)			(2,303)
Ending Balance, Value at Dec. 31, 2012	308,259	10,043	198,117	(5,118)	65,550	268,592	39,667
Ending Balance (in shares) at Dec. 31, 2012		20,085,865
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Net income	2,633				2,699	2,699	(66)
Other comprehensive income	(271)			(271)		(271)
Exercise of stock options (shares)		7,567
Exercise of stock options and related tax benefit of $3 for six months ended June 30, 2012 and $8 for the 12 months ended December 31, 2012	211	4	207			211
Restricted stock issuance (in shares)		71,163
Restricted stock issuance	0	35	(35)			0
Stock compensation	(360)		(360)			(360)
Shares withheld for taxes (in shares)		(28,309)
Shares withheld for taxes	(845)	(14)	(831)			(845)
Ending Balance, Value at Jun. 30, 2013	$ 309,627	$ 10,068	$ 197,098	$ (5,389)	$ 68,249	$ 270,026	$ 39,601
Ending Balance (in shares) at Jun. 30, 2013		20,136,286

XML

Subsequent Event (Details) (USD $) In Millions, except Per Share data, unless otherwise specified			0 Months Ended
	Jun. 30, 2013	Dec. 31, 2012	Aug. 07, 2013 Subsequent Event [Member]	Aug. 07, 2013 Common Warrant [Member] Subsequent Event [Member]
Subsequent Event [Line Items]
Common stock, par value	$ 0.50	$ 0.50	$ 0.50
Class of Warrant or Right, Exercise Price of Warrants or Rights				40.00
Ratio of Common Stock to Warrant			0.14771
Class of Warrant or Right, Number of Securities Called by Warrants or Rights				3

XML

Retirement Plans (Details Textual) (USD $) In Thousands, unless otherwise specified	6 Months Ended	12 Months Ended
	Jun. 30, 2013	Dec. 31, 2012
Retirement Plan (Textual) [Abstract]
Contribution to ERISA plan	$ 850
Equity and debt investment fluctuations by plus or minus	20.00%
Weighted-average discount rate and rate of increase in periodic pension costs	4.00%	4.00%
Expected long-term rate of return on plan assets	7.50%	7.50%
Equities [Member]
Retirement Plan (Textual) [Abstract]
Current investment policy target	65.00%
Target plan asset allocations range, maximum	78.00%
Target plan asset allocations range, minimum	52.00%
Investment mix target allocation	61.00%	71.00%
Debt [Member]
Retirement Plan (Textual) [Abstract]
Current investment policy target	25.00%
Investment mix target allocation	32.00%	26.00%
Money market funds [Member]
Retirement Plan (Textual) [Abstract]
Current investment policy target	10.00%
Investment mix target allocation	7.00%	3.00%

XML

Marketable Securities (Available-for-sale Securities) (Details) (USD $) In Thousands, unless otherwise specified	Jun. 30, 2013	Dec. 31, 2012
Summary of available-for-sale securities
Available-for-sale securities, Cost	$ 64,784	$ 64,465
Available-for-sale securities, Estimated Fair Value	64,916	65,049
Level 1 | Certificates of deposit
Summary of available-for-sale securities
Unrecognized losses for less than 12 months	1,623	1,578
Unrecognized losses for less than 12 months, Estimated Fair value	1,615	1,571
Unrecognized losses for more than 12 months, Cost	354	508
Unrecognized losses for more than 12 months, Estimated Fair value	353	507
Unrecognized gains, Cost	6,633	5,586
Unrecognized gains, Estimated Fair value	6,667	5,628
Available-for-sale securities, Cost	8,610	7,672
Available-for-sale securities, Estimated Fair Value	8,635	7,706
Level 2 | US Treasury and agency notes
Summary of available-for-sale securities
Unrecognized losses for less than 12 months	3,913	3,057
Unrecognized losses for less than 12 months, Estimated Fair value	3,894	3,024
Unrecognized losses for more than 12 months, Cost	5,312	874
Unrecognized losses for more than 12 months, Estimated Fair value	5,288	873
Unrecognized gains, Cost	7,195	12,175
Unrecognized gains, Estimated Fair value	7,244	12,267
Available-for-sale securities, Cost	16,420	16,106
Available-for-sale securities, Estimated Fair Value	16,426	16,164
Level 2 | Corporate notes
Summary of available-for-sale securities
Unrecognized losses for less than 12 months	9,479	1,993
Unrecognized losses for less than 12 months, Estimated Fair value	9,305	1,971
Unrecognized losses for more than 12 months, Cost	329	201
Unrecognized losses for more than 12 months, Estimated Fair value	328	200
Unrecognized gains, Cost	20,423	29,210
Unrecognized gains, Estimated Fair value	20,668	29,653
Available-for-sale securities, Cost	30,231	31,404
Available-for-sale securities, Estimated Fair Value	30,301	31,824
Level 2 | Municipal notes
Summary of available-for-sale securities
Unrecognized losses for less than 12 months	2,185	1,961
Unrecognized losses for less than 12 months, Estimated Fair value	2,160	1,948
Unrecognized losses for more than 12 months, Cost	720	620
Unrecognized losses for more than 12 months, Estimated Fair value	716	613
Unrecognized gains, Cost	6,618	6,702
Unrecognized gains, Estimated Fair value	6,678	6,794
Available-for-sale securities, Cost	9,523	9,283
Available-for-sale securities, Estimated Fair Value	$ 9,554	$ 9,355

XML

Business Segments

6 Months Ended

Jun. 30, 2013

Segment Reporting [Abstract]

BUSINESS SEGMENTS

BUSINESS SEGMENTS

The revenue components of our commercial/industrial real estate development segment for the six months ended June 30 are as follows:

(In thousands)	2013		2012
Commercial leases	$	3,401	$	2,958
Grazing leases	748		587
Land Sale	—		648
All other land management ancillary services	1,398		578
	$	5,547	$	4,771

Commercial lease revenue consists of land and building leases to tenants at our commercial retail and industrial developments, base and percentage rents from our Calpine power plant lease, communication tower rents, and payments from easement leases. Land management ancillary services include wildlife management, landscape and property maintenance, and building management services. During the first eight months of 2012, the Company’s game management operations were temporarily suspended in order to complete the development of a new sales program and operating procedures. Please refer to Form 8-K filed on January 20, 2012 regarding the Company’s game management and hunting operations. Game management reopened operations on September 1, 2012.

The resort/residential real estate development segment produces revenues from farming activities within the Centennial Founders, LLC and is actively involved in the land entitlement and pre-development process. The farming segment produces revenues from the sale of winegrapes, almonds and pistachios.

The mineral resources segment receives oil and mineral royalties from the exploration and development companies who extract or mine the natural resources from our land. The following table summarizes these activities:

	Six Months Ended
($ in thousands)	June 30, 2013		June 30, 2012
Oil and gas	$	4,418	$	6,510
Rock aggregate	296		305
Cement	375		337
Land lease for oil exploration	542		633
	$	5,631	$	7,785

XML

Stock Compensation

6 Months Ended

Jun. 30, 2013

Share-based Compensation [Abstract]

Stock Compensation Restricted Stock and Performance Share Grants

STOCK COMPENSATION

The Company’s stock incentive plans provide for the making of awards to employees based upon time-based criteria or through the achievement of performance-related objectives. The Company has issued three types of stock grant awards under these plans: restricted stock with time-based vesting, performance share grants that only vest upon the achievement of specified performance conditions, such as corporate cash flow goals, and performance share grants that include threshold, target, and maximum achievement levels based on the achievement of specific real estate development performance milestones. The payouts at each performance goal are as follows:

Performance Share Grants with Performance Conditions (in shares)
Below threshold performance	—
Threshold performance	82,296
Target performance	407,175
Maximum performance	594,993

The following is a summary of the Company’s stock grant activity assuming target achievement for outstanding performance grants for the following periods:

	June 30, 2013		December 31, 2012
Stock Grants Outstanding Beginning of the Year	688,041		744,508
New Stock Grants/Estimated additional shares maximum performance	56,087		113,643
Vested Grants	(62,997	)	(170,110	)
Expired/Forfeited Grants	(221,552	)	—
Stock Grants Outstanding June 30, 2013	459,579		688,041

The unamortized cost associated with nonvested stock grants and the weighted-average period over which it is expected to be recognized as of June 30, 2013 was $3,693,000 and 31 months, respectively. The fair value of restricted stock with time-based vesting features is based upon the Company’s share price on the date of grant and is expensed over the service period. Fair value of performance grants that cliff vest based on the achievement of performance conditions is based on the share price of the Company’s stock on the day of grant once the Company determines that it is probable that the award will vest. This fair value is expensed over the service period applicable to these grants. For performance grants that contain a range of shares from zero to maximum we determine, based on historic and projected results, the probability of (1) achieving the performance objective, and (2) the level of achievement. Based on this information, we determine the fair value of the award and measure the expense over the service period related to these grants. Because the ultimate vesting of all performance grants is tied to the achievement of a performance condition, we estimate whether the performance condition will be met and over what period of time. Ultimately, we adjust compensation cost according to the actual outcome of the performance condition. Under the Non-Employee Director Stock Incentive Plan, or NDSI Plan, each non-employee director receives his or her annual compensation in stock.

The following table summarizes stock compensation costs for the Company's 1998 Stock Incentive Plan, or Employee 1998 Plan, and the NDSI Plan for the following periods:

	Six Months Ended			Six Months Ended
Employee 1998 Plan:	June 30, 2013			June 30, 2012
Expensed	$	(952,000	)	$	3,475,000
Capitalized	208,000			167,000
	(744,000		)	3,642,000
NDSI Plan	384,000			183,000
	$	(360,000	)	$	3,825,000

During the first quarter of 2013 an executive officer of the Company resigned, which led to the Company reversing $485,000 of previously recognized stock compensation expense as the shares were forfeited upon leaving the Company. During the second quarter of 2013 our Chief Executive Officer and President, Robert A. Stine, announced he would retire at the end of 2013. Based on this announcement, we adjusted the service period related to his performance grants, which resulted in shares being forfeited and the reversal of $2,271,000 previously recognized stock compensation expense.

XML

Net Income (Loss) Per Share (Tables)

6 Months Ended

Jun. 30, 2013

Earnings Per Share [Abstract]

Summaries of weighted average number of shares outstanding

Diluted net income per share is based upon the weighted average number of shares of common stock outstanding and the weighted average number of shares outstanding assuming the issuance of common stock upon exercise of stock options and vesting of stock grants per U.S. generally accepted accounting principles, or GAAP.

	Three Months Ended June 30		Six Months Ended June 30
	2013	2012	2013	2012
Weighted average number of shares outstanding:
Common stock	20,136,188	20,026,354	20,118,152	20,008,358
Common stock equivalents-stock options, grants	16,323	61,278	17,039	75,372
Diluted shares outstanding	20,152,511	20,087,632	20,135,191	20,083,730

XML

Investment in Unconsolidated and Consolidated Joint Ventures

6 Months Ended

Jun. 30, 2013

Equity Method Investments and Joint Ventures [Abstract]

INVESTMENT IN UNCONSOLIDATED AND CONSOLIDATED JOINT VENTURES

INVESTMENTS IN UNCONSOLIDATED AND CONSOLIDATED JOINT VENTURES

The Company maintains investments in joint ventures. The Company accounts for its investments in unconsolidated joint ventures using the equity method of accounting unless the venture is a variable interest entity, or VIE, and meets the requirements for consolidation. The Company’s investment in its unconsolidated joint ventures at June 30, 2013 was $59,235,000. The equity in the income of the unconsolidated joint ventures was $1,679,000 for the six months ended June 30, 2013. The unconsolidated joint ventures have not been consolidated as of June 30, 2013, because the Company does not control the investments. The Company’s current joint ventures are as follows:

• Petro Travel Plaza Holdings LLC – TA/Petro is an unconsolidated joint venture with TravelCenters of America, LLC for the development and management of travel plazas and convenience stores. This is a 60%-owned joint venture which owns and operates travel plazas/commercial highway operations in TRCC. It houses multiple commercial eating establishments as well as diesel and gasoline operations. The Company does not control the investment due to its having only 50% voting rights, and because our partner in the joint venture is the managing partner and performs all of the day-to-day operations at the facility. At June 30, 2013, the Company had an equity investment balance of $9,027,000 in this joint venture.

• Tejon Mountain Village LLC – Tejon Mountain Village LLC, or TMV LLC, is an unconsolidated joint venture between the Company and DMB TMV LLC (a wholly owned subsidiary of DMB Associates, Inc.) formed to obtain all necessary government entitlement approvals and to develop the Tejon Mountain Village project. The Company owns a 50% interest in this venture. At June 30, 2013, the Company’s equity investment balance in this joint venture was $41,862,000.

• Rockefeller Joint Ventures – The Company has multiple joint ventures with Rockefeller Group Development Corporation or Rockefeller. Two joint ventures are for the development of buildings on approximately 91 acres and are part of an agreement for the potential development of up to 500 acres of land in TRCC including pursuing Foreign Trade Zone, or FTZ, designation and development of the property within the FTZ for warehouse distribution and light manufacturing. The Company owns a 50% interest in each of the joint ventures. Currently the Five West Parcel LLC joint venture owns and leases a 606,000 square foot building. The second of these joint ventures, 18-19 West LLC, was formed in August 2009 through the contribution of 61.5 acres of land by the Company, which is being held for future development.

During the second quarter of 2013, we entered into a new joint venture with Rockefeller, the TRCC/Rock Outlet Center LLC joint venture, to develop, own, and manage an outlet center on land at TRCC-East. This joint venture is separate from the above agreement to develop up to 500 acres. During the second quarter of 2013, we contributed land and other assets at an agreed value of $10,558,000 for our capital contribution and Rockefeller matched our capital contribution with cash.

At June 30, 2013, the Company’s combined book value equity investment balance in these three joint ventures was $8,346,000.

• Centennial Founders, LLC – Centennial Founders, LLC is a joint venture with Pardee Homes, Lewis Investment Company, and Standard Pacific Corp. that was organized to pursue the entitlement and development of land that the Company owns in Los Angeles County. Based on the Second Amended and Restated Limited Liability Company Agreement of Centennial Founders, LLC and the change in control and funding that resulted from the amended agreement, Centennial Founders, LLC qualified as a variable interest entity, beginning in the third quarter of 2009 and the Company was determined to be the primary beneficiary. As a result, Centennial Founders, LLC has been consolidated into our financial statements beginning in that quarter. Our partners retained a noncontrolling interest in the joint venture. At June 30, 2013 the Company had a 72.01% ownership position in Centennial Founders, LLC.

The Company’s investment balance in its unconsolidated joint ventures differs from its capital accounts in the respective joint ventures. The differential represents the difference between the cost basis of assets contributed by the Company and the agreed-upon contribution value of the assets contributed.

Unaudited condensed balance sheet information of the Company’s unconsolidated and consolidated joint ventures as of June 30, 2013 and December 31, 2012 and condensed statements of operations for the six months ended June 30, 2013 and June 30, 2012 are as follows:

($ in thousands)	UNCONSOLIDATED																	CONSOLIDATED
Statement of Operations for the six months ended June 30, 2013	Petro Travel Plaza Holdings			Five West Parcel			Tejon Mountain Village			18-19 West		TRCC/Rock Outlet Center			Total			Centennial-VIE
Gross revenues	$	55,364		$	1,673		$	—		$	31	$	—		$	57,068		$	314
Net income (loss)	$	2,394		$	47		$	(83	)	$	25	$	(176	)	$	2,207		$	(232	)
Partner’s share of net income (loss)	$	958		$	23		$	(42	)	$	12	$	(88	)	$	863		$	(66	)
Equity in income (losses)	$	1,436		$	24		$	(41	)	$	13	$	247		$	1,679		$	—
Balance Sheet Information as of June 30, 2013
Current assets	$	11,256		$	1,214		$	255		$	30	$	9,381		$	22,136		$	142
Property and equipment, net	43,907			18,111			95,772			4,449		12,858			175,097			74,074
Other assets	227			651			—			—		—			878			—
Long-term debt	(16,988		)	(11,000		)	—			—		—			(27,988		)	—
Other liabilities	(2,309		)	(67		)	(520		)	—		(1,300		)	(4,196		)	(1,024		)
Net assets	$	36,093		$	8,909		$	95,507		$	4,479	$	20,939		$	165,927		$	73,192

($ in thousands)	UNCONSOLIDATED															CONSOLIDATED
Statement of Operations for the six months ended June 30, 2012	Petro Travel Plaza Holdings			Five West Parcel			Tejon Mountain Village			18-19 West			Total			Centennial-VIE
Gross revenues	$	59,001		$	975		$	—		$	53		$	60,029		$	135
Net income (loss)	$	1,540		$	(282	)	$	(47	)	$	46		$	1,257		$	(160	)
Partner’s share of net income (loss)	$	616		$	(141	)	$	(24	)	$	23		$	474		$	(50	)
Equity in income (losses)	$	675		$	(141	)	$	(23	)	$	23		$	534		$	(110	)
Balance Sheet Information as of December 31, 2012
Current assets	$	9,577		$	194		$	218		$	42		$	10,031		$	491
Property and equipment, net	44,196			19,025			92,846			4,412			160,479			72,356
Other assets	246			683			—			—			929			—
Long-term debt	(17,358		)	(11,000		)	—			—			(28,358		)	—
Other liabilities	(3,350		)	(39		)	(224		)	(1		)	(3,614		)	(1,099		)
Net assets	$	33,311		$	8,863		$	92,840		$	4,453		$	139,467		$	71,748

XML

Document and Entity Information	6 Months Ended
	Jun. 30, 2013	Aug. 01, 2013
Document and Entity Information [Abstract]
Entity Registrant Name	TEJON RANCH CO
Entity Central Index Key	0000096869
Document Type	10-Q
Document Period End Date	Jun. 30, 2013
Amendment Flag	false
Document Fiscal Year Focus	2013
Document Fiscal Period Focus	Q2
Current Fiscal Year End Date	--12-31
Entity Filer Category	Accelerated Filer
Entity Common Stock Shares Outstanding		20,140,872
Trading Symbol	TRC

XML

Subsequent Event (Notes)

6 Months Ended

Jun. 30, 2013

Subsequent Events [Abstract]

Subsequent Events

SUBSEQUENT EVENTS

On August 7, 2013, Tejon Ranch Co. (the “Company”) announced that its Board of Directors declared a dividend of warrants (the “Warrants”) to purchase shares of Company common stock, par value $0.50 per share (“Common Stock”), to be distributed on or about August 28, 2013, to holders of record of Common Stock as of August 21, 2013 (the “Record Date”). Each Warrant will entitle the holder to purchase one share of Common Stock at an initial exercise price of $40.00 per share. The Warrants will be exercisable through August 31, 2016, subject to the Company's right to accelerate the expiration date under certain circumstances when the Warrants are in-the-money. Each holder of Common Stock as of the Record Date will receive a number of Warrants equal to the number of shares held multiplied by 0.14771, rounded to the nearest whole number. No cash or other consideration will be payable in respect of any fractional Warrants that are rounded down. The Company expects to issue an aggregate of approximately 3,000,000 Warrants. The Company will issue the Warrants pursuant to a Warrant Agreement, dated as of August 7, 2013, between the Company, Computershare, Inc. and Computershare Trust Company, N.A., as warrant agent (the “Warrant Agreement”).

The foregoing description of the Warrants and the Warrant Agreement is not complete and is qualified in its entirety by reference to the complete text of the Warrant Agreement, a copy of which will be filed on or about August 13, 2013 on Form 8-K.