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Tejon Ranch Co. Announces Fourth-Quarter and Year-Ended December 31, 2018 Financial Results

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--Company Continues Expansion of Tejon Ranch Commerce Center--

--Achieves Milestones for Master Planned Communities--

--Record High Pistachio Yields--

Tejon Ranch Co., or the Company, (NYSE:TRC), a diversified real estate
development and agribusiness company, today announced financial results
for the fourth quarter and year-ended December 31, 2018.

The Company is in the process of entitling, planning and developing four
master planned developments. Three of the developments are mixed-use
residential communities and the fourth is a large commercial/industrial
center currently in execution with more than 5.0 million square feet
already developed and an additional 14.8 million square feet available
for development. When all entitlements are approved, the Company's
current and future master planned developments will be home to just
under 35,000 housing units, more than 35 million square feet of
commercial/industrial space and 750 lodging units.

"In 2018, we saw continued expansion of the Tejon Ranch Commerce Center,
or TRCC, and plan to carry this momentum into 2019. We have fully leased
the 480,480 square foot industrial building that was completed in 2017
and have begun construction on an industrial building through a joint
venture with Majestic Realty Co. The new building contains 579,040
rentable square feet and is currently 67% leased. Leasing this amount of
industrial space at TRCC prior to completing construction is a testament
of the increased attention and competitive advantage we have
established," said Gregory S. Bielli, President and CEO.

"From a residential real estate standpoint, we achieved a pivotal
milestone in our regional development efforts in the fourth quarter of
2018: the Los Angeles County Board of Supervisors voted 4-1 in favor of
our plan to develop Centennial at Tejon Ranch. This is a step in the
right direction in addressing the housing crisis that exists not only in
Los Angeles County, but California as a whole," Mr. Bielli continued.

"Lastly, our commodity driven segments, farming and mineral resources,
showed strong performance in 2018, in part due to record high pistachio
yields in excess of four million pounds, along with water sales
opportunities above our recurring contractual arrangements."

Fourth-Quarter 2018 Financial Highlights

  • Net income attributable to common stockholders for the fourth quarter
    of 2018 was $0.3 million, or net income per share attributable to
    common stockholders, basic and diluted, of $0.01, compared with a net
    income attributable to common stockholders of $0.3 million, or net
    income per share attributable to common stockholders, basic and
    diluted, of $0.01, for the fourth quarter of fiscal 2017.
  • Revenues and other income, including equity in earnings of
    unconsolidated joint ventures, for the fourth quarter of 2018 were
    $13.4 million, a increase of $0.8 million, or 6.6%, compared with
    $12.6 million for the same period in 2017. Factors behind this
    increase include:
  • Revenues from mineral resources increased $1.1 million or 82.4% due to
    fourth quarter water sales, there were no water sales in the fourth
    quarter of 2017. This increase was offset by reduced farming revenues
    of $1.0 million or 14.9% resulting from lower 2018 almond crop yields.
  • Improved equity in earnings from unconsolidated joint ventures of $0.7
    million resulting from improved fuel revenues and higher margins from
    the Company's TA/Petro joint venture with TravelCenters of America.

Fiscal 2018 Financial Highlights

  • Net income attributable to common stockholders for fiscal 2018 was
    $4.3 million, or net income per share attributable to common
    stockholders, basic and diluted, of $0.16, compared with a net loss
    attributable to common stockholders of $1.8 million, or a net loss per
    share attributable to common stockholders, basic and diluted, of
    $0.08, for fiscal 2017.
  • Revenues and other income, including equity in earnings of
    unconsolidated joint ventures, were $50.7 million in fiscal 2018, an
    increase of $11.0 million, or 27.7%, compared with $39.7 million in
    2017. Factors driving this increase include:
  • An $8.4 million increase in mineral resources revenues due to
    significantly improved water sales in 2018 that were aided by moderate
    drought conditions in Kern County.
  • A $2.1 million increase in farming revenues driven by record high
    pistachio yields compared to the depressed 2017 crop yields resulting
    from the alternate bearing nature of pistachios.

Fiscal 2018 Operational Highlights

  • In January 2018, the Company obtained approval from Kern County on the
    first phase of Farm Village. Farm Village will serve as the commercial
    center and community gathering place for Mountain Village at Tejon
    Ranch, or MV, residents and visitors, as well as the gateway to MV.
  • During 2018, the U.S. Department of Commerce re-approved and expanded
    the Foreign Trade Zone, or FTZ. The expanded FTZ now covers all the
    industrial sites within TRCC, an area totaling 1,094 acres. The FTZ
    designation allows a user to secure many benefits and cost reductions
    associated with streamlined movement of goods in and out of the zone.
    This FTZ designation provides a marketing advantage for TRCC, an
    advantage that is further enhanced by the Economic Development
    Incentive Policy adopted by the Kern County Board of Supervisors in
    2018.
  • The 480,480 square foot industrial building constructed in 2017,
    through a joint venture with Majestic Realty Co., a Los Angeles-based
    commercial/industrial developer, was fully-leased in 2018, with half
    the space leased to Dollar General and half to L'Oréal USA.
  • In November 2018, the Company formed TRC-MRC 3, its third joint
    venture with Majestic Realty Co., to pursue the development,
    construction, leasing, and management of a 579,040 square foot
    industrial building at TRCC - East. We anticipate construction
    completion and delivery of the space in the fourth quarter of 2019.
    Currently, a tenant has entered into a lease agreement occupying 67%
    of total rentable space.
  • The Company began development on a new 4,900 square foot multi-tenant
    retail building at TRCC - East to further expand our footprint at
    TRCC. Completion is anticipated in the third quarter of 2019.
  • In December 2018, we achieved a pivotal milestone in our regional
    development efforts: The Los Angeles County Board of Supervisors voted
    4-1 in favor of our plan to develop Centennial at Tejon Ranch, taking
    the first step toward approving the mixed-use residential community
    located in the northwest Los Angeles County section of Tejon Ranch.

2019 Outlook:

The Company believes its capital structure provides a solid foundation
for continued investment in ongoing and future projects. As of
December 31, 2018, total capital and debt was approximately $500.5
million. The Company also had cash and securities totaling approximately
$79.7 million and $30.0 million available on its line of credit.

The Company will continue to aggressively pursue development, leasing,
and investment within TRCC and in its joint ventures. The Company will
also continue to invest in its residential projects, including Mountain
Village at Tejon Ranch, Centennial at Tejon Ranch and Grapevine at Tejon
Ranch. This includes the re-entitlement effort of Grapevine at Tejon
Ranch related to the court ruling in December 2018.

During 2019, the Company will continue to invest funds in master project
infrastructure, as well as vertical development within its active
commercial and industrial development. California is one of the most
highly regulated states in which to engage in real estate development
and, as such, natural delays, including those resulting from litigation,
can be reasonably anticipated. Accordingly, throughout the next few
years, the Company expects net income to fluctuate from year-to-year
based on commodity prices, production within its farming segment and
mineral resources segment, and the timing of sales of land and the
leasing of land within its industrial developments.

About Tejon Ranch Co.

Tejon Ranch Co. (NYSE:TRC) is a diversified real estate development and
agribusiness company, whose principal asset is its 270,000-acre land
holding located approximately 60 miles north of Los Angeles and 30 miles
south of Bakersfield.

More information about Tejon Ranch Co. can be found online at http://www.tejonranch.com.

Forward Looking Statements:

The statements contained herein, which are not historical facts, are
forward-looking statements based on economic forecasts, strategic plans
and other factors, which by their nature involve risk and uncertainties.
In particular, among the factors that could cause actual results to
differ materially are the following: business conditions and the general
economy, future commodity prices and yields, market forces, the ability
to obtain various governmental entitlements and permits, interest rates
and other risks inherent in real estate and agriculture businesses. For
further information on factors that could affect the Company, the reader
should refer to the Company's filings with the Securities and Exchange
Commission.

TEJON RANCH CO.

CONSOLIDATED STATEMENTS OF OPERATIONS

(In thousands, except earnings per share)

(Unaudited)

           

Three Months Ended
December 31,

Year Ended
December 31,

2018     2017 2018     2017
Revenues:
Real estate - commercial/industrial $ 2,182 $ 2,297 $ 8,970 $ 9,001
Mineral resources 2,409 1,321 14,395 5,983
Farming 5,990 7,036 18,563 16,434
Ranch operations 1,067   1,028   3,691   3,837  
Total revenues from Operations 11,648 11,682 45,619 35,255
Operating Profits (Loss):
Real estate - commercial/industrial 321 728 2,724 2,472
Real estate - resort/residential (211 ) (554 ) <
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