NOTE E – INVESTMENT IN UNCONSOLIDATED AND CONSOLIDATED JOINT VENTURES

The Company maintains investments in joint ventures. The Company accounts for its investments in unconsolidated joint ventures using the equity method of accounting unless the venture is a variable interest entity, or VIE, and meets the requirements for consolidation. The Company’s investment in its unconsolidated joint ventures at September 30, 2011 was $51,321,000. The equity in the income of the unconsolidated joint ventures was $583,000 for the nine months ended September 30, 2011. The unconsolidated joint ventures have not been consolidated as of September 30, 2011, because the Company does not control the investments. The Company’s current joint ventures are as follows:

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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 performs the day-to-day operations at the facility. At September 30, 2011, the Company had an equity investment balance of $11,198,000 in this joint venture.

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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 September 30, 2011, the Company’s equity investment balance in this joint venture was $34,679,000.

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Rockefeller Joint Ventures – The Company has two joint ventures with Rockefeller Group Development Corporation for the development of buildings on approximately 91 acres. These joint ventures are part of an agreement for the 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. At September 30, 2011, the Company’s combined equity investment balance in these two joint ventures was $5,444,000.

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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 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 September 30, 2011 the Company had a 67.18% ownership position in Centennial Founders, LLC.

Unaudited condensed balance sheet information of the Company’s unconsolidated and consolidated joint ventures as of September 30, 2011 and December 31, 2010 and condensed statements of operations for the nine months ended September 30, 2011 and September 30, 2010 are as follows:

Statement of Operations

for the nine months ending September 30, 2011

(In thousands)


	UNCONSOLIDATED															CONSOLIDATED
	Petro Travel Plaza Holdings			18-19 West LLC			Five West Parcel			Tejon Mountain Village			Total			Centennial
Gross revenues	$	86,712		$	—		$	376		$	—		$	87,088		$	216

Net income (loss)	$	1,917		$	(79	)	$	(1,016	)	$	(40	)	$	782		$	(221	)

Partner’s share of net loss	$	767		$	(40	)	$	(508	)	$	(20	)	$	199		$	(77	)

Equity in income (losses)	$	1,150		$	(39	)	$	(508	)	$	(20	)	$	583		$	(144	)


Balance Sheet Information as of September 30, 2011
Current assets	$	16,047		$	8		$	98		$	449		$	16,602		$	511
Property and equipment, net		44,134			4,129			16,667			81,207			146,137			66,412
Other assets		158			—			340			—			498			—
Long-term debt		(18,370	)		—			(8,625	)		—			(26,995	)		(1,305	)
Other liabilities		(2,646	)		(43	)		(176	)		(520	)		(3,385	)		—

Net assets	$	39,323		$	4,094		$	8,304		$	81,136		$	132,857		$	65,618

Statement of Operations

for the nine months ending September 30, 2010

(In thousands)


	UNCONSOLIDATED															CONSOLIDATED
	Petro Travel Plaza Holdings			18-19 West LLC			Five West Parcel			Tejon Mountain Village			Total			Centennial
Gross revenues	$	66,700		$	—		$	279		$	—		$	66,979		$	276

Net income (loss)	$	1,894		$	(6	)	$	(886	)	$	(62	)	$	940		$	(306	)

Partner’s share of net loss	$	757		$	(3	)	$	(443	)	$	(31	)	$	280		$	(124	)

Equity in income (losses)	$	1,137		$	(3	)	$	(443	)	$	(31	)	$	660		$	(182	)


Balance Sheet Information as of December 31, 2010
Current assets	$	13,717		$	15		$	45		$	892		$	14,669		$	85
Property and equipment, net		44,642			4,022			17,179			77,233			143,076			61,879
Other assets		226			—			302			—			528			1
Long-term debt		(19,287	)		—			(8,625	)		—			(27,912	)		—
Other liabilities		(2,151	)		—			(116	)		(894	)		(3,161	)		(1,251	)

Net assets	$	37,147		$	4,037		$	8,785		$	77,231		$	127,200		$	60,714

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.