SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
__________
FORM 10-Q
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934
For the quarterly period ended March 31, 2003
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 1-10153
HOMEFED CORPORATION
(Exact name of registrant as specified in its Charter)
Delaware 33-0304982
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification Number)
1903 Wright Place, Suite 220, Carlsbad, California 92008
(Address of principal executive offices) (Zip Code)
(760) 918-8200
(Registrant's telephone number, including area code)
N/A
(Former name, former address and former fiscal year,
if changed since last report)
______________________
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 is an accelerated filer (as
defined by Rule 12b-2 of the Act).
YES NO X
----- -----
APPLICABLE ONLY TO CORPORATE ISSUERS:
Indicate the number of shares outstanding of each of the issuer's classes
of common stock, as of the latest practicable date. On May 8, 2003, there were
81,550,844 outstanding shares of the Registrant's Common Stock, par value $.01
per share.
PART I - FINANCIAL INFORMATION
Item 1. Financial Statements.
HOMEFED CORPORATION AND SUBSIDIARIES
Consolidated Balance Sheets
March 31, 2003 and December 31, 2002
(Dollars in thousands, except par value)
March 31, December 31,
2003 2002
---------- -----------
(Unaudited)
ASSETS
Real estate $ 39,600 $ 31,108
Cash and cash equivalents 27,805 33,601
Deposits and other assets 1,257 1,026
Deferred income taxes 43,822 44,742
Note receivable 6,566 6,566
--------- ---------
TOTAL $ 119,050 $ 117,043
========= =========
LIABILITIES
Note payable to Leucadia Financial Corporation $ 23,885 $ 23,628
Notes payable to trust deed holders 17,065 16,704
Deferred revenue 25,925 32,621
Accounts payable and accrued liabilities 6,570 6,323
Non-refundable option payments 8,043 1,818
Liability for environmental remediation 10,755 10,816
Income taxes payable 3,050 2,875
Other liabilities 4,802 5,476
--------- ---------
Total liabilities 100,095 100,261
--------- ---------
COMMITMENTS AND CONTINGENCIES
MINORITY INTEREST 15,893 15,132
--------- ---------
STOCKHOLDERS' EQUITY
Common stock, $.01 par value; 250,000,000 shares authorized;
81,550,844 shares outstanding 816 816
Additional paid-in capital 379,540 379,630
Deferred compensation pursuant to stock incentive plans (161) (418)
Accumulated deficit (377,133) (378,378)
--------- ---------
Total stockholders' equity 3,062 1,650
--------- ---------
TOTAL $ 119,050 $ 117,043
========= =========
See notes to interim consolidated financial statements.
2
HOMEFED CORPORATION AND SUBSIDIARIES
Consolidated Statements of Operations
For the three month periods ended March 31, 2003 and 2002
(In thousands, except per share amounts)
(Unaudited)
2003 2002
------- --------
REVENUES
Sales of real estate $ 7,016 $ --
Co-op marketing and advertising fees 380 470
Income from options on real estate properties -- 180
------- --------
7,396 650
------- --------
EXPENSES
Cost of sales 2,340 --
Interest expense relating to Leucadia Financial Corporation 649 667
General and administrative expenses 1,823 1,113
Administrative services fees to Leucadia Financial Corporation 30 26
------- --------
4,842 1,806
------- --------
Income (loss) from operations 2,554 (1,156)
Other income, net 417 116
------- --------
Income (loss) before income taxes and minority interest 2,971 (1,040)
Income tax provision (1,252) (6)
------- --------
Income (loss) before minority interest 1,719 (1,046)
Minority interest (474) (250)
------- --------
Net income (loss) $ 1,245 $ (1,296)
======= ========
Basic income (loss) per common share $ 0.02 $ (0.02)
======= ========
Diluted income (loss) per common share $ 0.02 $ (0.02)
======= ========
See notes to interim consolidated financial statements.
3
HOMEFED CORPORATION AND SUBSIDIARIES
Consolidated Statements of Changes in Stockholders' Equity (Deficit)
For the three month periods ended March 31, 2003 and 2002
(Dollars in thousands, except par value)
(Unaudited)
Deferred
Common Compensation
Stock Additional Pursuant to Total
$.01 Par Paid-In Stock Incentive Accumulated Stockholders'
Value Capital Plans Deficit Equity (Deficit)
-------- --------- --------------- ----------- ----------------
Balance, January 1, 2002 $ 568 $355,377 $ (276) $(367,292) $(11,623)
Amortization of restricted stock grants 16 16
Amortization related to stock options 21 21
Change in value of performance-based stock
options (70) 70 --
Net loss (1,296) (1,296)
----- -------- ------ --------- --------
Balance, March 31, 2002 $ 568 $355,307 $ (169) $(368,588) $(12,882)
===== ======== ====== ========= ========
Balance, January 1, 2003 $ 816 $379,630 $ (418) $(378,378) $ 1,650
Amortization of restricted stock grants 11 11
Amortization related to stock options 156 156
Change in value of performance-based stock
options (90) 90 --
Net income 1,245 1,245
----- -------- ------ --------- --------
Balance, March 31, 2003 $ 816 $379,540 $ (161) $(377,133) $ 3,062
===== ======== ====== ========= ========
See notes to interim consolidated financial statements.
4
HOMEFED CORPORATION AND SUBSIDIARIES
Consolidated Statements of Cash Flows
For the three month periods ended March 31, 2003 and 2002
(In thousands)
(Unaudited)
2003 2002
-------- --------
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income (loss) $ 1,245 $ (1,296)
Adjustments to reconcile net income (loss) to net cash used for operating activities:
Minority interest 474 250
Provision for deferred income taxes 920 --
Amortization of deferred compensation pursuant to stock incentive plans 167 37
Amortization of debt discount on note payable to Leucadia Financial Corporation 257 275
Changes in operating assets and liabilities:
Real estate (7,887) (451)
Deposits and other assets (231) 71
Deferred revenue (6,696) --
Accounts payable and accrued liabilities 247 (187)
Liability for environmental remediation (61) --
Non-refundable option payments 6,225 --
Income taxes payable 175 --
Other liabilities (674) --
-------- --------
Net cash used for operating activities (5,839) (1,301)
-------- --------
CASH FLOWS FROM FINANCING ACTIVITIES:
Contribution from minority interest 43 --
Borrowings under credit agreement with Leucadia Financial Corporation -- 450
-------- --------
Net cash provided by financing activities 43 450
-------- --------
Net decrease in cash and cash equivalents (5,796) (851)
Cash and cash equivalents, beginning of period 33,601 1,454
-------- --------
Cash and cash equivalents, end of period $ 27,805 $ 603
======== ========
Supplemental disclosures of cash flow information:
Cash paid for interest (net of amounts capitalized) $ 392 $ 392
Cash paid for income taxes $ 128 $ 1
Non cash financing activities:
Contribution of real estate from minority interest $ 244 $ --
See notes to interim consolidated financial statements.
5
HOMEFED CORPORATION AND SUBSIDIARIES
Notes to Interim Consolidated Financial Statements
1. The unaudited interim consolidated financial statements, which reflect all
adjustments (consisting only of normal recurring items) that management
believes are necessary to present fairly the results of interim operations,
should be read in conjunction with the Notes to Consolidated Financial
Statements (including the Summary of Significant Accounting Policies)
included in the Company's audited consolidated financial statements for the
year ended December 31, 2002 which are included in the Company's Annual
Report filed on Form 10-K, as amended by Form 10-K/A, for such year (the
"2002 10-K"). Results of operations for interim periods are not necessarily
indicative of annual results of operations. The consolidated balance sheet
at December 31, 2002 was extracted from the Company's audited annual
consolidated financial statements and does not include all disclosures
required by generally accepted accounting principles for annual financial
statements.
Statement of Financial Accounting Standards No. 123, "Accounting for
Stock-Based Compensation", ("SFAS 123"), establishes a fair value method
for accounting for stock-based compensation plans, either through
recognition in the statements of operations or disclosure. As permitted,
the Company applies APB Opinion No. 25 and related Interpretations in
accounting for its plans. Accordingly, no compensation cost has been
recognized in the statements of operations related to employees and
directors under its stock compensation plans. Had compensation cost for the
Company's fixed stock options been recorded in the statements of operations
consistent with the provisions of SFAS 123, the Company's net income (loss)
and income (loss) per share would not have been materially different from
that reported.
Certain amounts for prior periods have been reclassified to be consistent
with the 2003 presentation.
2. The note payable to Leucadia Financial Corporation ("LFC"), a subsidiary of
Leucadia National Corporation ("Leucadia"), has a principal amount of
$26,462,000. Interest on the note of $392,000 was expensed and paid during
each of the three month periods ended March 31, 2003 and 2002.
Additionally, approximately $257,000 and $275,000 of debt discount on the
note was amortized as interest expense during the three month periods ended
March 31, 2003 and 2002, respectively.
3. The Company has a $10,000,000 line of credit agreement with LFC that has a
maturity date of February 28, 2007. Loans outstanding under this line of
credit bear interest at 10% per annum. At March 31, 2003, no amounts were
outstanding under this facility.
4. Basic and diluted income (loss) per share of common stock was calculated by
dividing the net income (loss) by the weighted average shares of common
stock outstanding. The number of shares used to calculate basic income
(loss) per common share was 81,550,844 and 56,808,076 for the three month
periods ended March 31, 2003 and 2002, respectively. The number of shares
used to calculate diluted income (loss) per share was 82,209,503 and
56,808,076 for the three month periods ended March 31, 2003 and 2002,
respectively. Options to purchase 322,022 weighted average shares of common
stock outstanding during the three month period ended March 31, 2002 were
not included in the computation of diluted loss per share as those options
were antidilutive.
5. Pursuant to the administrative services agreement, LFC provides
administrative services, including providing the services of one of the
Company's executive officers to the Company through December 31, 2003.
Administrative fees paid to LFC were $30,000 and $26,000 for the three
month periods ended March 31, 2003 and 2002, respectively. The Company also
receives monthly rental fees from Leucadia for an amount equal to
Leucadia's pro rata share of the Company's cost for such space and
furniture. Effective January 2003, the monthly rental fee is $5,500.
6
Notes to Interim Consolidated Financial Statements, continued
6. In August 2002, the Company entered into a joint venture with another party
to develop its 10 acre parcel at the Paradise Valley project. In March
2003, the Company contributed its real estate, with a book value of
approximately $1,254,000, and cash of approximately $108,000 in exchange
for an 83% interest in the joint venture. The other party contributed cash
and real estate for an aggregate amount of approximately $287,000 in
exchange for a 17% interest. The Company is the manager of the joint
venture and consolidates this entity in its financial statements. No gain
or loss was recognized on this transaction.
7. The Company's lot sales agreements with home builders generally include
provisions which restrict the purchaser from reselling the real estate to
another home builder without the Company's consent. These provisions are
intended to prevent the resale of real estate to less desirable home
builders which could jeopardize the quality of the project's neighborhoods,
as well as to insure that the Company captures the profit from the sale of
improved lots. During April 2003, the Company consented to the resale of
lots by one of its home builders in exchange for a payment of approximately
$3,000,000. The payment will be recorded as other income during the second
quarter of 2003.
8. Certain of the Company's lot purchase agreements with home builders include
provisions that entitle the Company to a share of the profits realized by
the home builders upon their sale of the homes, after certain thresholds
are achieved. The actual amount which could be received by the Company is
generally based on a formula and other specified criteria contained in the
lot purchase agreements, and is generally not payable and cannot be
determined with reasonable certainty until the builder has completed the
sale of a substantial portion of the homes covered by the lot purchase
agreement. The Company's policy is to accrue revenue earned pursuant to
these agreements when amounts are payable pursuant to the lot purchase
agreements. As of March 31, 2003, the Company accrued $300,000 under these
agreements, and currently estimates that it may receive an additional
$4,000,000 pursuant to these agreements during 2003.
9. In April 2003, Otay Land Company sold approximately 1,445 acres within the
Otay Ranch master-planned community to an unrelated third party for a sales
price of $22,500,000 in cash. As previously disclosed in the 2002 10-K, the
Company was contractually committed to sell the property if the transaction
closed by April 30, 2003. The sale is expected to result in a pre-tax gain
of approximately $17,700,000. Otay Land Company used a portion of the
proceeds from the sale to fully satisfy the preferred capital interest and
preferred return of approximately $12,900,000 due to Leucadia, which is
reflected in the consolidated balance sheet as minority interest.
10. In 2000, pursuant to the Company's 2000 Stock Incentive Plan, the Company
granted to two key employees options to purchase an aggregate of 1,000,000
shares of Common Stock at an exercise price of $.61 per share, the then
current market price per share. These options were subject to forfeiture
provisions if performance criteria were not met by April 27, 2003. Upon the
closing of the Otay Land Company sale described in note 9, the options were
no longer subject to forfeiture. As a result, the Company will expense the
remaining deferred compensation related to the performance options of
approximately $425,000 in the second quarter of 2003.
11. From April 1, 2003 through May 8, 2003, the Company closed on the sales of
three neighborhoods in the San Elijo Hills project consisting of 267 single
family lots for aggregate sales proceeds of $61,200,000, net of closing
costs. The sales proceeds include $4,300,000 of non-refundable options
payments that the Company had received as of March 31, 2003. The Company
estimates that it will recognize a total pre-tax gain on these sales of
approximately $47,000,000, which will be recognized over time under the
percentage of completion method of accounting. As of May 8, 2003, the
Company has agreements with home builders to sell an additional 163 single
family lots for aggregate cash proceeds of $37,500,000, pursuant to which
it received non-refundable option payments totaling $3,700,000. These
option payments will be applied to reduce the amount due from the
purchasers at closing. Prior to the closing of real estate sales, option
payments are reflected in the consolidated balance sheet in the caption
"Non-refundable option payments."
7
Item 2. Management's Discussion and Analysis of Financial Condition and Results
of Interim Operations.
Liquidity and Capital Resources
For the three month periods ended March 31, 2003 and 2002, net cash was used for
operating activities, principally to pay interest and general and administrative
expenses. The Company's principal sources of funds are proceeds from the sale of
real estate, its $10,000,000 line of credit with LFC, fee income from the San
Elijo Hills project and dividends or borrowings from or repayment of advances by
its subsidiaries.
The Company expects that its cash on hand, together with the sources described
above, will be sufficient to meet its cash flow needs for the foreseeable
future. If, at any time in the future, the Company's cash flow is insufficient
to meet its then current cash requirements, the Company could accelerate its
subsidiaries' sale of real estate projects held for development or seek to
borrow funds. However, because all of the Company's assets are pledged to LFC to
collateralize its $26,462,000 borrowing from LFC, it may be unable to obtain
financing from sources other than LFC. Further, if the Company were to sell its
real estate projects in order to meet its liquidity needs, it may have to do so
at a time when the potential sales prices are not attractive or are not
reflective of the values that the Company believes are inherent in the projects.
Accordingly, while the Company believes it can generate sufficient liquidity to
meet its obligations through sales of assets, any such sales could be at prices
that would not maximize the Company's value to its shareholders.
The Company currently has a $10,000,000 line of credit agreement with LFC, which
has a maturity date of February 28, 2007. Loans outstanding under this line of
credit bear interest at 10% per annum. As of March 31, 2003, no amounts were
outstanding under this facility.
During the three months ended March 31, 2003, the Company received $6,200,000 of
non-refundable option payments for sales of real estate. From April 1, 2003
through May 8, 2003, the Company closed on the sales of three neighborhoods in
the San Elijo Hills project consisting of 267 single family lots for aggregate
sales proceeds of $61,200,000, net of closing costs. The sales proceeds include
$4,300,000 of non-refundable options payments that the Company had received as
of March 31, 2003. The Company estimates that it will recognize a total pre-tax
gain on these sales of approximately $47,000,000, which will be recognized over
time under the percentage of completion method of accounting.
As of May 8, 2003, the Company has agreements with home builders to sell an
additional 163 single family lots for aggregate cash proceeds of $37,500,000,
pursuant to which it had received non-refundable option payments totaling
$3,700,000 as of March 31, 2003. These option payments will be applied to reduce
the amount due from the purchasers at closing.
The Company's lot sales agreements with home builders generally include
provisions which restrict the purchaser from reselling the real estate to
another home builder without the Company's consent. These provisions are
intended to prevent the resale of real estate to less desirable home builders
which could jeopardize the quality of the project's neighborhoods, as well as to
insure that the Company captures the profit from the sale of improved lots.
During April 2003, the Company consented to the resale of lots by one of its
home builders in exchange for a payment of approximately $3,000,000.
8
Item 2. Management's Discussion and Analysis of Financial Condition and Results
of Interim Operations, continued.
In April 2003, Otay Land Company sold approximately 1,445 acres within the Otay
Ranch master-planned community to an unrelated third party for a sales price of
$22,500,000 in cash. As previously disclosed in the 2002 10-K, the Company was
contractually committed to sell the property if the transaction closed by April
30, 2003. The sale is expected to result in a pre-tax gain of approximately
$17,700,000. Otay Land Company used a portion of the proceeds from the sale to
fully satisfy the preferred capital interest and preferred return of
approximately $12,900,000 due to Leucadia.
In April 2003, the Company completed certain improvements pertaining to the
December 2002 sale of one neighborhood consisting of 92 single family lots. As a
result, the purchaser fully paid the non-interest bearing promissory note of
$6,600,000 referred to in the 2002 10-K.
Results of Operations
Sales of real estate in 2003 principally reflect the recognition of revenue
previously deferred on sales that closed prior to 2003. The amount of deferred
revenue recognized is based upon the completion of certain activities which are
required under the sales contract. As there were no new sales of real estate
that closed during 2003, cost of sales recognized is the same proportion to the
amount of deferred revenue recognized under the percentage of completion method
of accounting.
The Company recorded co-op marketing and advertising fees of approximately
$380,000 and $470,000 for the three month periods ended March 31, 2003 and 2002,
respectively. The Company records these fees when the San Elijo Hills project
builders sell homes, and are generally based upon a fixed percentage of the
homes' selling price.
Income from options on real estate properties reflects non-refundable fees to
extend the closing date on the sale of 85 acres of developable land at the Otay
Ranch project, which closed in June 2002. The Company received and recognized
$180,000 of such fees during the three month period ended March 31, 2002.
Interest expense reflects the interest due on indebtedness to LFC of $392,000
for each of the three month periods ended March 31, 2003 and 2002. Interest
expense also includes amortization of debt discount related to the indebtedness
to LFC of $257,000 and $275,000 for the three month periods ended March 31, 2003
and 2002, respectively.
General and administrative expenses increased during the three month period
ended March 31, 2003 as compared to the same period in 2002 primarily due to
expenses of $407,000 related to CDS Holding Corporation ("CDS"), which was
acquired in October 2002, greater legal fees and increased stock compensation
expense. The increase in legal fees principally reflects costs associated with
the Otay Ranch project. The increase in stock compensation expense related to
performance options resulted from an increase in the market price of the
Company's common stock.
The increase in other income for the three month period ended March 31, 2003 as
compared to the same period in 2002 primarily relates to cash received to settle
a dispute with one of the Company's vendors and greater interest income,
partially offset by the gain on a sale of a foreclosed property in 2002.
The increase in minority interest expense for the three month period ended March
31, 2003 as compared to the same period in 2002 relates to minority interest in
CDS.
The Company's effective income tax rate in 2003 is higher than the federal
statutory rate due to California state income taxes and state franchise taxes.
Income taxes paid for 2002 principally relate to state franchise taxes. In 2002,
the Company did not recognize income tax benefits for its operating losses due
to the uncertainty of sufficient future taxable income which is required in
order to recognize such tax benefits.
9
Item 2. Management's Discussion and Analysis of Financial Condition and Results
of Interim Operations, continued.
Cautionary Statement for Forward-Looking Information
Statements included in this Management's Discussion and Analysis of Financial
Condition and Results of Interim Operations may contain forward-looking
statements. Such statements may relate, but are not limited, to projections of
revenues, income or loss, capital expenditures, plans for growth and future
operations, competition and regulation, as well as assumptions relating to the
foregoing. Such forward-looking statements are made pursuant to the safe-harbor
provisions of the Private Securities Litigation Reform Act of 1995.
Forward-looking statements are inherently subject to risks and uncertainties,
many of which cannot be predicted or quantified. When used in this Management's
Discussion and Analysis of Financial Condition and Results of Interim
Operations, the words "estimates," "expects," "anticipates," "believes,"
"plans," "intends" and variations of such words and similar expressions are
intended to identify forward-looking statements that involve risks and
uncertainties. Future events and actual results could differ materially from
those set forth in, contemplated by or underlying the forward-looking
statements.
In addition to risks set forth in the Company's other public filings with the
Securities and Exchange Commission, the following important factors could cause
actual results to differ materially from any results projected, forecasted,
estimated or budgeted:
o changes in general economic and market conditions or prevailing
interest rate levels, including mortgage rates;
o changes in domestic laws and government regulations or requirements;
o changes in real estate pricing environments;
o regional or general changes in asset valuation;
o changes in implementation and/or enforcement of governmental rules and
regulations;
o demographic and economic changes in the United States generally and
California in particular;
o increases in real estate taxes and other local government fees;
o significant competition from other real estate developers and
homebuilders;
o decreased consumer spending for housing;
o delays in construction schedules and cost overruns;
o availability and cost of land, materials and labor and increased
development costs many of which the Company would not be able to
control;
o damage to properties or condemnation of properties;
o the occurrence of significant natural disasters;
o imposition of limitations on the Company's ability to develop its
properties resulting from environmental laws and regulations and
developments in or new applications thereof;
o the inability to insure certain risks economically;
o increased interest costs as a result of a delay in project completion
requiring the financing to remain outstanding for a longer than
projected period of time;
o the availability of adequate water resources in the areas where the
Company owns real estate projects and the impact that inadequate water
resources can have in curtailing development;
o the availability of reliable energy sources in California and consumer
confidence in the dependability of such energy sources;
o changes in the composition of the Company's assets and liabilities
through acquisitions or divestitures;
o the actual cost of environmental liabilities concerning land owned in
San Diego County, California exceeding the amount reserved for such
matter; and
o the Company's ability to generate sufficient taxable income to fully
realize the deferred tax asset, net of the valuation allowance.
10
Item 2. Management's Discussion and Analysis of Financial Condition and Results
of Interim Operations, continued.
Undue reliance should not be placed on these forward-looking statements, which
are applicable only as of the date hereof. The Company undertakes no obligation
to revise or update these forward-looking statements to reflect events or
circumstances that arise after the date of this Management's Discussion and
Analysis of Financial Condition and Results of Interim Operations or to reflect
the occurrence of unanticipated events.
Item 3. Quantitative and Qualitative Disclosures About Market Risk.
Information required under this Item is contained in Item 7A of the Company's
Annual Report on Form 10-K for the year ended December 31, 2002, and is
incorporated by reference herein.
Item 4. Controls and Procedures.
(a) Based on their evaluation as of the date within 90 days of the filing date
of this quarterly report on Form 10-Q, the Company's chief executive
officer and chief financial officer have concluded that the Company's
disclosure controls and procedures (as defined in Rules 13a-14(c) and
15d-14(c) under the Exchange Act) are effective to ensure that information
required to be disclosed by the Company in reports that it files or submits
under the Exchange Act are recorded, processed, summarized and reported
within time periods specified in Securities and Exchange Commission rules
and forms.
(b) There were no significant changes in the Company's internal controls or in
other factors that could significantly affect these controls subsequent to
the date of their evaluation, including any corrective actions with regard
to significant deficiencies and material weaknesses
11
PART II - OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K.
a) Exhibits.
99.1 Certification of Principal Executive Officer pursuant to
Section 906 of the Sarbanes-Oxley Act of 2002.
99.2 Certification of Principal Financial Officer pursuant to
Section 906 of the Sarbanes-Oxley Act of 2002.
b) Reports on Form 8-K.
None.
12
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
HOMEFED CORPORATION
(Registrant)
Date: May 13, 2003 By: /s/ Erin N. Ruhe
------------------------------
Erin N. Ruhe
Vice President and Controller
(Principal Accounting Officer)
13
CERTIFICATIONS
I, Paul J. Borden, certify that:
1. I have reviewed this quarterly report on Form 10-Q of HomeFed Corporation;
2. Based on my knowledge, this quarterly 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 quarterly report;
3. Based on my knowledge, the financial statements, and other financial
information included in this quarterly 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
quarterly report;
4. The registrant's other certifying officers and I are responsible for
establishing and maintaining disclosure controls and procedures (as defined
in Exchange Act Rules 13a- 14 and 15d- 14) for the registrant and have:
a) designed such disclosure controls and procedures 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 quarterly
report is being prepared;
b) evaluated the effectiveness of the registrant's disclosure controls
and procedures as of a date within 90 days prior to the filing date of
this quarterly report (the "Evaluation Date"); and
c) presented in this quarterly report our conclusions about the
effectiveness of the disclosure controls and procedures based on our
evaluation as of the Evaluation Date;
5. The registrant's other certifying officers and I have disclosed, based on
our most recent evaluation, to the registrant's auditors and the audit
committee of registrant's board of directors (or persons performing the
equivalent function):
a) all significant deficiencies in the design or operation of internal
controls which could adversely affect the registrant's ability to
record, process, summarize and report financial data and have
identified for the registrant's auditors any material weaknesses in
internal controls; and
b) any fraud, whether or not material, that involves management or other
employees who have a significant role in the registrant's internal
controls; and
6. The registrant's other certifying officers and I have indicated in this
quarterly report whether there were significant changes in internal
controls or in other factors that could significantly affect internal
controls subsequent to the date of our most recent evaluation, including
any corrective actions with regard to significant deficiencies and material
weaknesses.
Date: May 13, 2003
By: /s/ Paul J. Borden
------------------
Paul J. Borden
President
14
CERTIFICATIONS
I, Erin N. Ruhe, certify that:
1. I have reviewed this quarterly report on Form 10-Q of HomeFed Corporation;
2. Based on my knowledge, this quarterly 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 quarterly report;
3. Based on my knowledge, the financial statements, and other financial
information included in this quarterly 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
quarterly report;
4. The registrant's other certifying officers and I are responsible for
establishing and maintaining disclosure controls and procedures (as defined
in Exchange Act Rules 13a- 14 and 15d- 14) for the registrant and have:
a) designed such disclosure controls and procedures 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 quarterly
report is being prepared;
b) evaluated the effectiveness of the registrant's disclosure controls
and procedures as of a date within 90 days prior to the filing date of
this quarterly report (the "Evaluation Date"); and
c) presented in this quarterly report our conclusions about the
effectiveness of the disclosure controls and procedures based on our
evaluation as of the Evaluation Date;
5. The registrant's other certifying officers and I have disclosed, based on
our most recent evaluation, to the registrant's auditors and the audit
committee of registrant's board of directors (or persons performing the
equivalent function):
a) all significant deficiencies in the design or operation of internal
controls which could adversely affect the registrant's ability to
record, process, summarize and report financial data and have
identified for the registrant's auditors any material weaknesses in
internal controls; and
b) any fraud, whether or not material, that involves management or other
employees who have a significant role in the registrant's internal
controls; and
6. The registrant's other certifying officers and I have indicated in this
quarterly report whether there were significant changes in internal
controls or in other factors that could significantly affect internal
controls subsequent to the date of our most recent evaluation, including
any corrective actions with regard to significant deficiencies and material
weaknesses.
Date: May 13, 2003
By: /s/ Erin N. Ruhe
-----------------------------
Erin N. Ruhe
Vice President and Controller
15
EXHIBIT INDEX
Exhibit Number Description
99.1 Certification of Principal Executive Officer pursuant
to Section 906 of the Sarbanes-Oxley Act of 2002.
99.2 Certification of Principal Financial Officer pursuant
to Section 906 of the Sarbanes-Oxley Act of 2002.
16