Tejon Ranch (TRC) risk factors, FY2024 10-K

STRATEGIC RISKS

1. 01Adverse changes in economic conditions in markets where we conduct our operations and where prospective purchasers of future homes and commercial products live could reduce the demand for our products and, as a result, could adversely affect our business, results of operations, and financial condition
2. 02Higher interest rates and lack of available financing can have significant impacts on the real estate industry
3. 03We are subject to various land use regulations and require governmental approvals and permits for our developments that could be denied
4. 04Third-party litigation increases the time and cost of our development efforts
5. 05We are subject to environmental regulations and opposition from environmental groups that cause delays and increase the costs of our development efforts or preclude such development entirely
6. 06Until final permits are received, litigation is complete, and final maps are received, we will have a limited inventory of real estate
7. 07We are in competition with several other developments for customers and residents
8. 08Increases in taxes or government fees could increase our cost, and adverse changes in tax laws could reduce demand for homes in our future residential communities
9. 09Our developable land is concentrated entirely in California
10. 10Risks and challenges we have faced and may continue to face in land development
11. 11A prolonged downturn in the real estate market or instability in the mortgage and commercial real estate financing industry could have an adverse effect on our real estate business

OPERATIONAL RISKS

1. 12We are involved in a cyclical industry and are affected by changes in general and local economic conditions
2. 13The inability of a tenant to pay us rent adversely affects our business
3. 14Our inability to renew leases or re-lease space on favorable terms as leases expire may significantly affect our business
4. 15We may experience increased operating costs, which may reduce profitability to the extent that we are unable to pass those costs on to tenants
5. 16From time to time, we experience shortages or increased costs of labor and supplies or other circumstances beyond our control that cause delays or increased costs within our commercial development, which can adversely affect our operating results
6. 17We are dependent on key personnel and the loss of one or more of those key personnel may materially and adversely affect our prospects
7. 18Volatile oil and natural gas prices could adversely affect our cash flows and results of operations
8. 19Our reserves and production will decline from their current levels
9. 20Water delivery and water availability continues to be a long-term concern within California
10. 21Natural and man-made disasters, public health crises, political instability, global conflicts, including trade wars, and other potentially catastrophic events may have an adverse impact on our business and operating results and could decrease the value of our assets
11. 22Information technology failures and data security breaches could harm our business
12. 23Increased cybersecurity requirements, vulnerabilities, threats and more sophisticated and targeted computer crime could pose a risk to our systems, networks, products, solutions, services and data
13. 24Inflation can have a significant adverse effect on our operations
14. 25Government policies and regulations, particularly those affecting the agricultural sector and related industries, could adversely affect our operations and profitability
15. 26Our efforts, goals and disclosures related to environmental stewardship and sustainability matters expose us to risks that can adversely affect our reputation and performance

FINANCIAL RISKS

1. 27Constriction of the credit markets or other adverse changes in capital market conditions could limit our ability to access capital and increase our cost of capital
2. 28Our business model is very dependent on transactions with strategic partners. We may not be able to successfully (1) attract desirable strategic partners; (2) complete agreements with strategic partners; and/or (3) manage relationships with strategic partners going forward, any of which could adversely affect our business
3. 29Inability to comply with credit facility covenants, restrictions or limitations could adversely affect our financial condition

MARKET RISKS

1. 30Only a limited market exists for our Common Stock, which could lead to price volatility
2. 31Concentrated ownership of our Common Stock creates a risk of sudden change in our share price