TRC » Topics » Off-Balance Sheet Arrangements

This excerpt taken from the TRC 10-Q filed May 8, 2009.

Off-Balance Sheet Arrangements

The following table shows contingent obligations we have with respect to certain bonds issued by the CFD:

 

      Amount of Commitment Expiration Per Period

(In thousands)

   Total    One Year or
Less
   Years 2-3    Years 4-5    After 5
Years

OTHER COMMERCIAL COMMITMENTS:

              

Standby letter of credit

   $  4,584    $ 4,584    $ —      $ —      $ —  
                                  

Total other commercial commitments

   $ 4,584    $ 4,584    $ —      $ —      $ —  
                                  

The standby letter of credit described above is related to the issuance of CFD bonds by TRPFFA. The standby letter of credit, requested by TRPFFA, is in place to provide additional credit enhancement and covers approximately two years worth of interest on the outstanding bonds. The annual cost for this letter of credit is approximately $70,000. This letter of credit will not be drawn upon unless we, as the largest landowner in the district, fail to make our property tax payments. This letter of credit was originally for a two-year period which expires in June 2009. We anticipate renewing the letter of credit because we continue to be the largest landowner within the development.

 

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.

This excerpt taken from the TRC 10-K filed Mar 2, 2009.

Off-Balance Sheet Arrangements

The following table shows contingent obligations we have with respect to the CFD.

 

     Amount of Commitment Expiration Per Period

($ in thousands)

   Total    < 1 year    1-3 Years    4-5 Years    After 5
Years

OTHER COMMERCIAL COMMITMENTS:

              

Standby letter of credit

   $ 4,584    $ 4,584    $ —      $ —      $ —  
                                  

Total other commercial commitments

   $ 4,584    $ 4,584    $ —      $ —      $ —  
                                  

The standby letter of credit referred to in the table above is related to the issuance of CFD bonds by the Tejon Ranch Public Facilities Financing Authority, a joint-powers authority created by Kern County and the Tejon-Castac Water District. The standby letter of credit is in place to provide additional credit enhancement and covers approximately two years worth of interest on the outstanding bonds. The annual cost for this letter of credit is approximately $70,000 per year. This letter of credit will not be drawn upon unless we, as the largest landowner in the district, fail to make our property tax payments. The standby letter of credit, if drawn upon, would not have a

 

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material impact upon the Company’s liquidity, capital resources, or market or credit risk support. This letter of credit is for a two-year period and will be renewed if necessary in 2009.

 

ITEM 7A. 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.

This excerpt taken from the TRC 10-Q filed Nov 10, 2008.

Off-Balance Sheet Arrangements

The following table shows contingent obligations we have with respect to certain bonds issued by the CFD:

 

     Amount of Commitment Expiration Per Period

(In thousands)

   Total    One Year or
Less
   Years 2-3    Years 4-5    After 5
Years

OTHER COMMERCIAL COMMITMENTS:

              

Standby letter of credit

   $ 4,584    $ 4,584    $ —      $ —      $ —  
                                  

Total other commercial commitments

   $ 4,584    $ 4,584    $ —      $ —      $ —  
                                  

The standby letter of credit is related to the issuance of CFD bonds by TRPFFA. The standby letter of credit, requested by TRPFFA, is in place to provide additional credit enhancement and covers approximately two years worth of interest on the outstanding bonds. The annual cost for this letter of credit is approximately $70,000. This letter of credit will not be drawn upon unless we, as the largest landowner in the district, fail to make our property tax payments. This letter of credit was originally for a two-year period and will be renewed, if necessary, in 2009.

 

26


Table of Contents
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.

This excerpt taken from the TRC 10-Q filed Aug 8, 2008.

Off-Balance Sheet Arrangements

The following table shows contingent obligations we have with respect to certain bonds issued by the CFD:

 

     Amount of Commitment Expiration Per Period

(In thousands)

   Total    One Year or
Less
   Years 2-3    Years 4-5    After 5
Years

OTHER COMMERCIAL COMMITMENTS:

              

Standby letter of credit

   $ 4,584    $ 4,584    $ —      $ —      $ —  
                                  

Total other commercial commitments

   $ 4,584    $ 4,584    $ —      $ —      $ —  
                                  

The standby letter of credit is related to the issuance of CFD bonds by TRPFFA. The standby letter of credit, requested by TRPFFA, is in place to provide additional credit enhancement and covers approximately two years worth of interest on the outstanding bonds. The annual cost for this letter of credit is approximately $70,000. This letter of credit will not be drawn upon unless we, as the largest landowner in the district, fail to make our property tax payments. This letter of credit was originally for a two-year period and will be renewed, if necessary, in 2009.

 

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.

This excerpt taken from the TRC 10-Q filed May 9, 2008.

Off-Balance Sheet Arrangements

 

     Amount of Commitment Expiration Per Period

(In thousands)

   Total    One Year or
Less
   Years 2-3    Years 4-5    After 5
Years

OTHER COMMERCIAL COMMITMENTS:

              

Standby letter of credit

   $ 4,584    $ 4,584    $ —      $ —      $ —  
                                  

Total other commercial commitments

   $ 4,584    $ 4,584    $ —      $ —      $ —  
                                  

The standby letter of credit is related to the issuance of Community Facilities District bonds by the Tejon Ranch Public Facilities Financing Authority, a joint-powers authority created by Kern County and the Tejon-Castac Water District. The standby letter of credit is in place to provide additional credit enhancement and covers approximately two years worth of interest on the outstanding bonds. The annual cost for this letter of credit is approximately $70,000. This letter of credit will not be drawn upon unless we, as the largest landowner in the district, fail to make our property tax payments. This letter of credit was originally for a two-year period and will be renewed, if necessary, in 2009.

These excerpts taken from the TRC 10-K filed Feb 29, 2008.

Off-Balance Sheet Arrangements

The following table shows contingent obligations we have with respect to the CFD.

 

     Amount of Commitment Expiration Per Period
($ in thousands)    Total    < 1 year    1-3 Years    4-5 Years    After 5
Years

OTHER COMMERCIAL COMMITMENTS:

              

Standby letter of credit

   $ 4,584    $ 4,584    $ —      $ —      $ —  
                                  

Total other commercial commitments

   $ 4,584    $ 4,584    $ —      $ —      $ —  
                                  

The standby letter of credit is related to the issuance of CFD bonds by the Tejon Ranch Public Facilities Financing Authority, a joint-powers authority created by Kern County and the Tejon-Castac Water District. The standby letter of credit is in place to provide additional credit enhancement and covers approximately two years worth of interest on the outstanding bonds. The annual cost for this letter of credit is approximately $70,000 per year. This letter of credit will not be drawn upon unless we, as the largest landowner in the district, fail to make our property tax payments. The standby letter of credit, if drawn upon, would not have a material impact upon the Company’s liquidity, capital resources, or market or credit risk support. This letter of credit is for a two-year period and will be renewed if necessary in 2009.

 

ITEM 7A. 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.

Off-Balance Sheet Arrangements

STYLE="margin-top:6px;margin-bottom:0px">The following table shows contingent obligations we have with respect to the CFD.

 


























































































































   Amount of Commitment Expiration Per Period
($ in thousands)  Total  < 1 year  1-3 Years  4-5 Years  After 5
Years

OTHER COMMERCIAL COMMITMENTS:

          

Standby letter of credit

  $4,584  $4,584  $—    $—    $—  
                    

Total other commercial commitments

  $4,584  $4,584  $—    $—    $—  
                    

The standby letter of credit is related to the issuance of CFD bonds by the Tejon Ranch Public Facilities
Financing Authority, a joint-powers authority created by Kern County and the Tejon-Castac Water District. The standby letter of credit is in place to provide additional credit enhancement and covers approximately two years worth of interest on the
outstanding bonds. The annual cost for this letter of credit is approximately $70,000 per year. This letter of credit will not be drawn upon unless we, as the largest landowner in the district, fail to make our property tax payments. The standby
letter of credit, if drawn upon, would not have a material impact upon the Company’s liquidity, capital resources, or market or credit risk support. This letter of credit is for a two-year period and will be renewed if necessary in 2009.

 






ITEM 7A.
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.

This excerpt taken from the TRC 10-Q filed Nov 9, 2007.

Off-Balance Sheet Arrangements

The following table shows contingent obligations we have with respect to unconsolidated entities in which we have an interest, and certain bonds issued by a local Community Facilities District:

 

    

Amount of Commitment Expiration Per Period

(In thousands)

   Total   

One Year or

Less

   Years 2-3    Years 4-5   

After 5

Years

OTHER COMMERCIAL COMMITMENTS:

              

Standby letter of credit

   $ 4,584    $ —      $ 4,584    $ —      $ —  
                                  

Total other commercial commitments

   $ 4,584    $ —      $ 4,584    $ —      $ —  
                                  

 

22


The standby letter of credit is related to the issuance of Community Facilities District bonds by the Tejon Ranch Public Facilities Financing Authority, a joint-powers authority created by Kern County and the Tejon-Castac Water District. The standby letter of credit is in place to provide additional credit enhancement and covers approximately two years worth of principal and interest on the outstanding bonds. The annual cost for this letter of credit is approximately $70,000. This letter of credit will not be drawn upon unless we, as the largest landowner in the district, fail to make our property tax payments. This letter of credit was renewed during the second quarter of 2007.

 

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.

This excerpt taken from the TRC 10-Q filed Aug 9, 2007.

Off-Balance Sheet Arrangements

 

     Amount of Commitment Expiration Per Period

(In thousands)

   Total    One Year
or Less
   Years 2-3    Years 4-5    After 5
Years

OTHER COMMERCIAL COMMITMENTS:

              

Standby letter of credit

   $ 4,584    $ —      $ 4,584    $ —      $ —  

Guarantee

     6,000      —        —        6,000      —  
                                  

Total other commercial commitments

   $ 10,584    $ —      $ 4,584    $ 6,000    $ —  
                                  

The following table shows contingent obligations we have with respect to unconsolidated entities in which we have an interest, and certain bonds issued by a local Community Facilities District:

The standby letter of credit is related to the issuance of Community Facilities District bonds by the Tejon Ranch Public Facilities Financing Authority, a joint-powers authority created by Kern County and the Tejon-Castac Water District. The standby letter of credit is in place to provide additional credit enhancement and covers approximately two years’ worth of interest on the outstanding bonds. The annual cost for this letter of credit is approximately $70,000. This letter of credit will not be drawn upon unless we, as the largest landowner in the district, fail to make our property tax payments. This letter of credit was renewed during the second quarter of 2007.

At June 30, 2007, the Company was guaranteeing $6,000,000 of debt of Tejon Dermody Industrial LLC, an unconsolidated joint venture formed by the Company and DP Industrial to construct and market a 652,000—square foot building at the Tejon Industrial Complex-West. Total debt in the venture is approximately $14,420,000, which is secured by a mortgage on the land and the building. In the joint venture agreement, each partner agreed to guarantee an equal portion of the outstanding debt through the term of the loan. The maturity date for this loan is May 19, 2011. Principal and interest on the loan are payable monthly, with the principal portion of the monthly payment being $18,930. On July 12, 2007, the land and the building securing this loan was sold for $30,000,000 to ProLogis North American Properties Fund III, a fund formed by ProLogis (NYSE: PLD). This transaction was part of a larger purchase by ProLogis of a portfolio of industrial assets from DP Industrial, our partner in Tejon Dermody Industrial LLC. As part of this transaction, the mortgage on the building was repaid. The financial impact of this transaction will be reflected in our third quarter operating results.

 

23


Table of Contents
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.

This excerpt taken from the TRC 10-Q filed May 9, 2007.

Off-Balance Sheet Arrangements

The following table shows contingent obligations we have with respect to unconsolidated entities in which we have an interest, and certain bonds issued by a local Community Facilities District:

 

     Amount of Commitment Expiration Per Period
(In thousands)    Total    One
Year or
Less
   Years
2-3
   Years
4-5
   After
5
Years

OTHER COMMERCIAL COMMITMENTS:

              

Standby letter of credit

   $ 4,584    $ 4,584    $ —      $ —      $ —  

Guarantee

     6,000      —        —        6,000      —  
                                  

Total other commercial commitments

   $ 10,584    $ 4,584    $ —      $ 6,000    $ —  
                                  

The standby letter of credit is related to the issuance of Community Facilities District bonds by the Tejon Ranch Public Facilities Financing Authority, a joint-powers authority created by Kern County and the Tejon-Castac Water District. The standby letter of credit is in place to provide additional credit enhancement and covers approximately two years worth of interest on the outstanding bonds. The annual cost for this letter of credit is approximately $70,000. This letter of credit will not be drawn upon unless we, as the largest landowner in the district, fail to make our property tax payments. This letter of credit was originally for a two-year period and will be renewed, if necessary, in 2007.

At March 31, 2007, the Company was guaranteeing $6,000,000 of debt of Tejon Dermody Industrial LLC, an unconsolidated joint venture formed to construct and market a 651,000 square foot building at the TIC-West. Total debt in the venture is approximately $14,477,000, which is secured by a mortgage on the building. In the joint venture agreement, each partner agreed to guarantee an equal portion of the outstanding debt through the term of the loan. The maturity date of this loan is May 19, 2011. Principal and interest on this loan is payable monthly, with the principal portion of the monthly payment being $18,930. Based on the achievements of certain operational objectives, such as the renewal of tenant leases, the guarantees can begin to be reduced. The Company believes it is unlikely that it will ever be required to make payments under this guarantee due to sufficient cash flows to service the debt and the value of joint venture property. Therefore, no liabilities have been recorded related to this guarantee at March 31, 2007 or December 31, 2006.

 

21


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.

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