1
UNITED STATES
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 June 30, 1995
or
/ / TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the transition period from to
For Quarter Ended June 30, 1995 Commission file number 1-7585
THE NEWHALL LAND AND FARMING COMPANY
(a California Limited Partnership)
(Exact name of Registrant as specified in its charter)
California 95-3931727
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
23823 Valencia Boulevard, Valencia, CA 91355
(Address of principal executive offices) (Zip Code)
(805) 255-4000
(Registrant's telephone number, including area code)
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
----- -----
2
2.
Part 1. Financial Information
Item 1 - Financial Statements
CONSOLIDATED STATEMENTS OF INCOME
Unaudited Three months ended Six months ended
June 30, June 30,
---------------------- ----------------------
In thousands, except per unit 1995 1994 1995 1994
===================================== ====================== ======================
Revenues
Real estate
Residential home and land sales $ 11,169 $ 16,854 $ 21,314 $ 21,535
Industrial and other sales 19,732 109 25,143 1,062
Commercial operations 9,510 8,513 18,343 16,195
---------------------- ----------------------
40,411 25,476 64,800 38,792
---------------------- ----------------------
Agriculture
Operations 2,068 3,009 2,721 4,659
Ranch sales -- 11,800 -- 11,800
---------------------- ----------------------
2,068 14,809 2,721 16,459
---------------------- ----------------------
Total revenues $ 42,479 $ 40,285 $ 67,521 $ 55,251
====================== ======================
Contribution to income
Real estate
Residential home and land sales $ 942 $ 2,097 $ 1,366 $ 3,065
Industrial and other sales 11,984 58 13,696 (143)
Community development (318) (1,999) (2,135) (3,034)
Commercial operations 4,714 3,916 9,020 7,414
---------------------- ----------------------
17,322 4,072 21,947 7,302
---------------------- ----------------------
Agriculture
Operations 391 931 799 2,076
Ranch sales -- 9,227 -- 9,227
---------------------- ----------------------
391 10,158 799 11,303
---------------------- ----------------------
Earthquake damage -- -- -- (3,700)
---------------------- ----------------------
Operating income 17,713 14,230 22,746 14,905
General and administrative expense (2,655) (2,135) (4,705) (3,969)
Interest and other, net (2,910) (2,692) (5,507) (5,173)
---------------------- ----------------------
Net income $ 12,148 $ 9,403 $ 12,534 $ 5,763
====================== ======================
Net income per unit $ 0.33 $ 0.26 $ 0.34 $ 0.16
====================== ======================
Number of units used in computing
per unit amounts 36,181 36,793 36,347 36,799
Cash distributions per unit $ 0.10 $ 0.10 $ 0.20 $ 0.20
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3.
Part 1. Financial Information
Item 1 - Financial Statements
CONSOLIDATED BALANCE SHEETS
June 30, December 31,
In thousands, except units 1995 1994
==================================================================================
(Unaudited)
ASSETS
Cash and cash equivalents $ 3,339 $ 7,656
Accounts and notes receivable 17,075 18,539
Land under development 103,067 87,423
Land held for future development 34,739 34,103
Property and equipment, net 179,768 184,683
Other assets and deferred charges 12,050 11,388
----------------------
$350,038 $343,792
======================
LIABILITIES AND PARTNERS' CAPITAL
Accounts payable $ 10,689 $ 14,877
Accrued expenses 33,163 34,419
Deferred revenues 3,921 5,226
Mortgage and other debt 160,076 145,991
Advances and contributions from
developers for utility construction 15,128 13,477
Other liabilities 17,840 17,445
----------------------
Total liabilities 240,817 231,435
Partners' capital
36,168,624 units outstanding, excluding
600,000 units in treasury, at June 30,
1995 and 36,760,606 units outstanding at
December 31, 1994 109,221 112,357
----------------------
$350,038 $343,792
======================
4
4.
Part 1. Financial Information
Item 1 - Financial Statements
CONSOLIDATED STATEMENTS OF CASH FLOWS
Unaudited Six months ended
June 30,
----------------------
In thousands 1995 1994
======================================================================================
Cash flows from operating activities:
Net income $ 12,534 $ 5,763
Adjustments to reconcile net income to net cash
provided by operating activities:
Depreciation and amortization 3,924 3,654
Increase in land under development (15,644) (7,643)
Decrease (increase) in accounts and notes receivable 1,464 (7,143)
(Decrease) increase in accounts payable, accrued
expenses and deferred revenues (6,749) 4,610
Cost of property sold 4,879 1,637
Other adjustments, net (117) 1,231
----------------------
Net cash provided by operating activities 291 2,109
----------------------
Cash flows from investing activities:
Purchase of property and equipment (4,524) (6,740)
Investment in joint venture 20 25
----------------------
Net cash used by investing activities (4,504) (6,715)
----------------------
Cash flows from financing activities:
Distributions paid (7,293) (7,351)
Increase in mortgage and other debt 27,812 2,150
Decrease in mortgage and other debt (13,727) (1,395)
Purchase of partnership units (8,547) --
Other, net 1,651 656
----------------------
Net cash used by financing activities (104) (5,940)
----------------------
Net decrease in cash and cash equivalents (4,317) (10,546)
Cash and cash equivalents, beginning of period 7,656 39,636
----------------------
Cash and cash equivalents, end of period $ 3,339 $ 29,090
======================
5
5.
Part I. Financial Information
Item 1 - Financial Statements
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Note 1. Accounting Policies
The consolidated financial statements include the accounts of The Newhall Land
and Farming Company and its subsidiaries, all of which are wholly-owned,
(collectively, "the Company"). All significant intercompany transactions are
eliminated.
The Company's unaudited interim financial statements have been prepared
substantially in conformity with generally accepted accounting principles used
in the preparation of the Company's annual financial statements. In the opinion
of the Company, all adjustments necessary for a fair statement of the results of
operations for the three and the six months ended June 30, 1995 and 1994 have
been made. Certain reclassifications have been made to prior periods' amounts to
conform to the current year presentation.
The interim statements are condensed and do not include some of the information
necessary for a more complete understanding of the financial data. Accordingly,
your attention is directed to the footnote disclosures found on pages 21 through
26 of the December 31, 1994 Annual Report to Partners and particularly to Note 2
which includes a summary of significant accounting policies.
Interim financial information for the Company has substantial limitations as an
indicator for the calendar year because:
- - Land sales occur irregularly and are recognized at the close of escrow
or on the percentage of completion basis if the Company has an
obligation to complete certain future improvements and provided profit
recognition criteria are met.
- - Agricultural crops are on an annual cycle and income is recognized upon
harvest. Most major crops are harvested during the fall and winter.
- - Sales of non-developable farm land occur irregularly and are recognized
upon close of escrow provided profit recognition criteria are met.
Note 2. Details of Land Under Development
(In $000) June 30, December 31,
1995 1994
----------- ------------
(Unaudited)
Residential $ 32,797 $ 29,195
Industrial and commercial 44,407 41,781
Homes completed or under construction
with venture partners 22,810 16,215
Other 3,053 232
-------- --------
Total land under development $103,067 $ 87,423
======== ========
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6.
Part I. Financial Information
Item 1 - Financial Statements
Note 3. Details for Earnings per Unit Calculation
(Unaudited) Three months ended Six months ended
----------------------------- ----------------------------
June 30, June 30, June 30, June 30,
1995 1994 1995 1994
---------- ---------- ----------- ----------
Average number of units
outstanding during the period 36,167,913 36,756,532 36,333,537 36,756,531
Net units issuable in connection
with dilutive options based upon
use of the treasury stock method 12,851 36,421 13,077 42,349
---------- ---------- ---------- ----------
Average number of primary units 36,180,764 36,792,953 36,346,614 36,798,880
========== ========== ========== ==========
Item 2 - Management's Discussion and Analysis of Financial Condition and Results
of Operations
FINANCIAL CONDITION
Liquidity and Capital Resources
At June 30, 1995, the Company had cash and cash equivalents totaling $3.3
million. There were no borrowings outstanding against unsecured lines of credit
totaling $81 million and $23 million was outstanding against a $40 million
revolving mortgage credit facility secured by Valencia Town Center. Letters of
credit outstanding against lines of credit totaled $4.1 million at the end of
the 1995 six-month period.
There are no material commitments for capital expenditures other than in the
ordinary course of business. The Company is starting seven new projects in
Valencia this year which are expected to be valued at $160 million upon
completion, including land already owned. Valencia Marketplace, a
760,000-square-foot retail complex, is the largest of these projects. Approval
of Valencia Marketplace is under appeal by a local environmental group. However,
it is anticipated that construction could start later this summer with opening
by late 1996 or early 1997. The Center is currently 59% pre-leased. Other
projects starting construction this year include a three-story,
54,000-square-foot office building in Valencia Town Center, a 264-unit apartment
complex and two build-to suit facilities. The largest of these build-to-suits is
a 200,000-square-foot office/manufacturing facility for Remo, Inc., a leading
manufacturer of musical drums. The Company currently is negotiating other
build-to-suit projects. Additional projects include a neighborhood shopping
center and an automotive service center. Approximately $28 million is expected
to be invested in these projects in 1995.
The Company believes it has adequate sources of cash from operations and
available credit to finance future operations as well as take advantage of new
development opportunities.
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7.
Part I. Financial Information
Item 2 - Management's Discussion and Analysis of Financial Condition and Results
of Operations (continued)
Operating Activities
Sales of 17 commercial/industrial acres, 19 residential lots and 86 joint
venture home closings in Valencia plus the sale of 40 unfinished residential
lots at McDowell Mountain Ranch, provided the Company with $19.6 million in cash
and $5.8 million in notes during the first half of 1995. In addition, a $3.7
million note from a prior year land sale was collected during the 1995 six-month
period. Sale of the Bouquet Shopping Center was completed in June, 1995 for
$17.9 million cash. See the Financing Activities section for discussion of
mortgage debt reduction in conjunction with this sale.
Inventory expenditures totaling $37.6 million during the 1995 six-month period
were primarily for land development and infrastructure to support pending and
future land sales as well as residential construction costs for five
joint-venture projects in Valencia. Deferred revenues of $2.7 million were
recognized in the current year from prior year land sales and $3.9 million
remains to be recognized in future periods as the Company completes required
site development, landscape and amenity work. Recognition of deferred revenues
has no impact on the Company's cash position.
Investing Activities
Capital expenditures totaling $4.5 million for the six months ended June 30,
1995 were primarily for seven new projects in Valencia as discussed in the
Liquidity and Capital Resources section and water utility construction.
Financing Activities
Two quarterly cash distributions totaling $7.3 million, or 20 cents per unit,
have been paid year-to-date. An additional quarterly distribution of 10 cents
per partnership unit was declared on July 19, 1995 payable September 11, 1995,
to unitholders of record August 4, 1995. The declaration of distributions is
reviewed by the Board of Directors on a quarterly basis, and the amount is
determined after consideration of the Company's earnings, financial condition
and prospects.
In December 1994, the Company obtained a $40 million revolving mortgage credit
facility secured by Valencia Town Center. At June 30, 1995, borrowings
outstanding against this credit facility totaled $23 million with an average
interest rate of 7.16%. In conjunction with the sale of the Bouquet Shopping
Center in June 1995, the Company made a $13.3 million principal reduction on a
mortgage financing secured by six of the Company's commercial properties
including this shopping center.
A repurchase program for 600,000 of the Company's units announced in January,
1995 was completed in March, 1995. The 600,000 units were purchased for
approximately $8.5 million, or an average price of $14.25 per unit.
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8.
Part I. Financial Information
Item 2 - Management's Discussion and Analysis of Financial Condition and Results
of Operations (continued)
Results of Operations
Comparison of Second Quarter and Six Months 1995 to Second Quarter and Six
Months 1994 (unaudited)
The amounts of increase or decrease in revenues and income from the prior year
periods are as follows
(in $000, except per unit):
Increase / (Decrease) Increase / (Decrease)
----------------------- -----------------------
Three Months Six Months
----------------------- -----------------------
Revenues Amount % Amount %
-------- ------ -------- -----
Real Estate
Residential home and land sales ($ 5,685) (34)% ($ 221) (1)%
Industrial and other sales 19,623 18,003 24,081 2,268
Commercial operations 997 12 2,148 13
Agriculture
Operations (941) (31) (1,938) (42)
Ranch sales (11,800) (100) (11,800) (100)
-------- ------ -------- -----
$ 2,194 5% $ 12,270 22%
======== ====== ======== =====
Contribution to income
Real Estate
Residential home and land sales ($ 1,155) (55)% ($ 1,699) (55)%
Industrial and other sales 11,926 20,562 13,839 9,678
Community development 1,681 84 899 30
Commercial operations 798 20 1,606 22
Agriculture
Operations (540) (58) (1,277) (62)
Ranch sales (9,227) (100) (9,227) (100)
Earthquake damage -- -- 3,700 100
-------- ------ -------- -----
Operating income 3,483 24 7,841 53
General and administrative expense (520) (24) (736) (19)
Interest and other, net (218) (8) (334) (6)
-------- ------ -------- -----
Net income $ 2,745 29% $ 6,771 117%
======== ====== ======== =====
Per unit:
Net income per unit $ 0.07 27% $ 0.18 113%
======== ====== ======== =====
Number of units used in computing
per unit amounts (in 000) (612) (2)% (452) (1)%
======== ====== ======== =====
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9.
Part I. Financial Information
Item 2 - Management's Discussion and Analysis of Financial Condition and Results
of Operations (continued)
The increases and decreases in revenues and income for the three months and six
months are attributable to the following:
RESIDENTIAL HOME AND LAND SALES
Second quarter revenues decreased 34% and income decreased 55% compared to the
1994 second quarter due to the absence of a significant Valencia area lot sale.
The 1994 second quarter results included 178 lots sold compared to 19 in the
current year second quarter. For the six-month period, 1995 revenues decreased
by 1% while income was down 55% primarily as a result of the absence of a
high-margin, bulk land sale as recorded in the 1994 period at McDowell Mountain
Ranch. Increased escrow closings from joint ventures in Valencia generated
revenues and income comparable to the 178 lots sold in 1994.
VALENCIA
Merchant Builder Program
The sale of 19 lots to Beazer Homes in NorthPark contributed $1.5 million to
revenues and $568,000 to operating income for the 1995 second quarter and
six-month period. This sale represents Beazer's third purchase in Valencia and
an additional 17 lots are in escrow with closing expected later this year. Also
in escrow is a residential parcel for 98 multi-family homes with closing
expected before the end of the year.
Results for the prior year second quarter and six-month period included the sale
of 83 lots to Beazer Homes in NorthPark and the sale of 95 lots to Del Webb
Homes in Northbridge. These sales contributed $12.8 million to revenues and $2.4
million to income under percentage of completion accounting.
The 1995 second quarter and six-month period included recognition of deferred
revenues of $1.1 million and income of $138,000 from residential lots sold in
prior years. No deferred revenues or income were recognized in the prior year
comparable periods.
In the second quarter of 1995, merchant builders in Valencia closed escrow on 73
homes on lots previously sold by the Company, compared to 48 escrow closings in
the prior year quarter. For the six-month period, escrow closings by merchant
builders totaled 125 in the current year compared to 79 in the prior year.
Although the Company does not participate directly in the profits generated from
escrow closings by merchant builders, the absorption of these previously sold
lots is key to the Company's future success in selling additional lots. The
master-planned community of Valencia continues to outperform the Santa Clarita
Valley in home sale activity and market share.
10
10.
Part I. Financial Information
Item 2 - Management's Discussion and Analysis of Financial Condition and Results
of Operations (continued)
Joint Venture Program
The Company is increasing its absorption and profit per acre from its strategy
of participating in homebuilding in Valencia through joint ventures. Through
these development partnerships, the Company recognizes homebuilding revenues and
costs upon close of escrow to homebuyers.
In the second quarter of 1995, the Company's joint ventures closed escrow on 42
homes generating $7.3 million in revenues and $946,000 in income. The prior year
second quarter results included 12 escrow closings from the Company's first
joint venture contributing $4.0 million to revenues and $566,000 to income for
the Company. For the six-month period, joint-venture escrow closings totaled 86
in the current year and 15 in the prior year adding $15.3 million and $5.1
million to revenues and $1.9 million and $715,000 to income for the Company in
the current and prior year, respectively.
The 1995 home closings included 43 at Montana, a 138-townhome project with EPAC
Communities, Inc., 31 at RGC's CourtHome Collection, an affordable single-family
project with homes clustered around a common courtyard, and 12 in EPAC's
Traditions single-family project. The Montana and CourtHomes joint-venture
developments are the fastest selling homes in Valencia.
The Company expects to establish additional joint-venture arrangements for
residential projects in Valencia and is currently completing arrangements for
three more joint ventures, which would bring the total projects in the
joint-venture program to six:
* Rose Arbor, consisting of 102 condominiums, will offer homes ranging in
price from $100,000 to $125,000, the most affordable in Valencia. This will be
the Company's second joint venture with RGC.
* Avalon Homes will consist of 60 single-family homes in Valencia Northbridge.
Models will open later this summer and initial reservations already have been
received. This joint venture is with EPAC Communities, Inc. and follows the
success of the first two EPAC projects - Montana and Traditions.
* A joint-venture agreement is being finalized for 44 single-family lots. This
project will close out the Valencia Northbridge development.
The Company is completing Phase Two land development for Valencia NorthPark and
currently is marketing 300 residential lots to merchant builders. An additional
100 lots are planned to be developed through joint ventures. It is anticipated
that about one-half of home sales in Valencia over the next few years will be
through the Company's joint-venture program.
11
11.
Part I. Financial Information
Item 2 - Management's Discussion and Analysis of Financial Condition and Results
of Operations (continued)
McDOWELL MOUNTAIN RANCH
No lot sales were recorded during the 1995 or 1994 second quarters at this first
community developed by the Company outside California. However, finalization of
a merchant builder lot premium participation, combined with deferred revenues
recognized, contributed $692,000 to operating income for the 1995 second
quarter. These factors combined with the sale of 40 lots in the first quarter
contributed a total of $3.4 million to revenues and $1.5 million to income in
the current year six-month period. The 1994 six-month period included the sale
of a high margin 79-acre bulk parcel for 105 unimproved lots outside the planned
community which contributed $3.6 million to revenues and $1.7 million to income.
Expenses in 1995 compared to 1994 increased $579,000 for the second quarter and
$791,000 for the six-months primarily for ad valorem property taxes and initial
marketing expenses .
To date, 749 residential lots in the project have been sold. These sales include
644 lots to seven merchant builders within the planned community who are
marketing homes from temporary sales offices while model homes are constructed.
The information center is open and experiencing steady traffic and the community
center has been completed. At June 30, 1995, merchant builders had more than 150
homes reserved or on contract on lots sold by the Company. The Company continues
to negotiate additional parcel sales, with closings expected later this year.
The ability to close these sales will be dependent upon market conditions.
INDUSTRIAL AND OTHER SALES
The sale of Bouquet Shopping Center in June 1995 for $17.9 million added $10.4
million to operating income in the 1995 second quarter. In addition, a 7.1-acre
parcel closed escrow in the second quarter for $1.7 million and contributed $1.5
million to operating income. The parcel was purchased by the City of Santa
Clarita for a Metrolink rail station, the second connecting the Santa Clarita
Valley with downtown Los Angeles.
Results for the 1995 six-month period also include escrow closings on 8.8
commercial acres and a 1.1- acre industrial parcel in Valencia Industrial Center
for $5.6 million contributing $2.2 million to operating income. The parcel in
Valencia Industrial Center was the first sale by the Company of industrial land
in over three years.
Vacancy rates in Valencia Industrial Center continue well below the average for
Los Angeles County and, with the economy continuing to improve, the Company is
experiencing greater interest in industrial acreage and the build-to-suit
program. As a result, substantial increases in the absorption of industrial
property is expected over the next few years. At June 30, 1995, a 5.7- acre site
in Valencia Industrial Center for the expansion of a film studio and two small
commercial parcels were in escrow. Closings are expected later this year subject
to market conditions.
12
12.
Part I. Financial Information
Item 2 - Management's Discussion and Analysis of Financial Condition and Results
of Operations (continued)
While no industrial or commercial land sales were recorded during the 1994
second quarter, results included a $393,000 non-refundable deposit which was
forfeited and taken into income. The 1994 six-month period included the sale of
a 1.25-acre parcel in Valencia Auto Center.
COMMUNITY DEVELOPMENT
The Company is focusing its community development activities on securing the
necessary entitlements for its Valencia area and Newhall Ranch properties.
Newhall Ranch, a new 12,000-acre planned community will be located west of
Valencia. The current quarter and six month period ended June 30, 1995 benefited
from an expense recovery associated with a lawsuit settlement. For the year
1995, community development expenses are expected to increase compared to 1994
due to an intensified strategic marketing program to support the Company's plans
for more rapid development of its remaining properties in Valencia. This
activity, combined with the second quarter expense recovery, is expected to
result in total community development expenses in 1995 comparable to 1994.
COMMERCIAL OPERATIONS
Commercial operations include the Company's portfolio of income-producing
properties and Valencia Water Company, a wholly-owned public water utility.
Revenues and income from the Company's energy operations, previously reported as
part of Commercial Operations, are being reported with Agricultural Operations.
Prior periods' amounts have been reclassified to conform to the current year
presentation.
Revenues and contribution to income from the Company's portfolio of
income-producing properties increased respectively by 8% and 16% from the prior
year second quarter and 12% and 23% from the prior six-month period. Higher
occupancy rates at Valencia Town Center, the Company's regional shopping mall,
and River Oaks, a neighborhood shopping center, contributed to the increases.
Also contributing to the higher results are lower vacancy rates and rent
increases averaging 3% at the Company's three apartment complexes. Additionally,
1995 results include revenues and income from the build-to-suit for ITT
Corporation, which was completed in the fourth quarter of 1994, and the
build-to-suit for Trader Joe's, a specialty food retailer, which opened in
September 1994.
As previously announced, Bouquet Shopping Center was sold in June 1995. The sale
is in line with the Company's strategy of selectively selling mature income
properties as additional projects are developed. On August 4, 1995, the Company
sold the ITT building and land for $9.5 million cash. The sale will contribute
about $1.5 million to 1995 third quarter earnings.
A general rate increase effective January 1, 1995 and a $785,000 disaster
recovery surcharge beginning October 1, 1994 for a 22-month period which were
approved by the Public Utilities Commission contributed to increases in revenues
and income from Valencia Water Company for the 1995 second quarter. Revenues
increased similarly for the six-month period but higher operating expenses,
primarily for water purchases, resulted in income for the six-month period
approximately the same as the comparable prior year period.
13
13.
Part I. Financial Information
Item 2 - Management's Discussion and Analysis of Financial Condition and Results
of Operations (continued)
AGRICULTURAL OPERATIONS
Decreases in revenues and income from agricultural operations from the prior
three and six-month periods are primarily due to lower prices for citrus, heavy
rains at the Newhall and Suey Ranches and reduced activity because of previously
sold farm land. Additionally impacting the six-month comparison is a prior year
harvest of avocados with favorable prices and yields and an early lease
termination payment in the current year period by the Company's energy division.
RANCH SALES
No sales of farm land were completed in the current year periods. Five of the
remaining nine parcels at the 9,440-acre Merced Ranch are in escrow with closing
expected later this year. The sale of the 5,370-acre Meridian Ranch for $11.8
million contributed $9.2 million to income in the prior year second quarter.
EARTHQUAKE DAMAGE
A $3.7 million charge for damages not covered by insurance from the January 17,
1994 earthquake is included in the 1994 six-month results.
GENERAL AND ADMINISTRATIVE EXPENSE
General and administrative expenses increased 24% from the prior year second
quarter and 19% from the prior year first half primarily due to reduced
recoveries for tax accounting fees billed to outside partnerships, increased
professional services fees and timing of other consulting services and expenses.
The Company expects general and administrative expenses for the year to be
approximately 4% higher than in 1994.
INTEREST AND OTHER, NET
Interest expense on an $11 million financing for Valencia Water completed in
July 1994 partially offset by higher interest income from land sale notes are
the primary components of the net increases from the comparable prior year
periods. Reduced interest expense due to repayment of a $40 million construction
loan for Valencia Town Center in the fourth quarter of 1994 was offset by less
cash available for investment plus interest expense for borrowings against a
revolving mortgage facility and lines of credit during the current year periods.
14
14.
Part I. Financial Information
Item 2 - Management's Discussion and Analysis of Financial Condition and Results
of Operations (continued)
OUTLOOK
The Company has established 5-year average annual earnings growth targets of
more than 30% and expects to exceed that goal for the full year ending December
31, 1995. This assumes present business trends continue for the balance of the
year and planned property and joint venture home sales are completed. These
goals are based on current operating trends the Company is experiencing and
improving economic conditions. Achievement of these goals also depends on the
success of intensified strategies related to government approvals of development
plans (entitlements), the rate of land sales (absorption) and financial
contribution from commercial income properties both from increasing rents and
sales of properties.
As always, the Company's ability to close sales in escrow as well as to
complete the sale of additional properties currently being marketed, is
subject to future market and other conditions beyond the control of the Company.
Part II. Other Information
Item 6 - Exhibits and Reports on Form 8-K
(a) Exhibits (listed by numbers corresponding to the Exhibit Table of Item
601 in Regulation S-K):
27 Financial Data Schedule
(b) The following report was filed on Form 8-K in the second quarter ended
June 30, 1995:
Date of Report Item Reported Financial Statements Filed
- -------------- ------------- --------------------------
June 28, 1995 News Release issued June 26, 1995 None
15
15.
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.
THE NEWHALL LAND AND FARMING COMPANY
(a California Limited Partnership)
Registrant
By Newhall Management Limited Partnership,
Managing General Partner
By Newhall Management Corporation,
Managing General Partner
Date: August 4, 1995 By / S / THOMAS L. LEE
--------------------
Thomas L. Lee, Chairman
and Chief Executive Officer of
Newhall Management Corporation
(Principal Executive Officer)
Date: August 4, 1995 By / S / STUART R. MORK
-----------------------
Stuart R. Mork, Vice President and
Chief Financial Officer of
Newhall Management Corporation
(Principal Financial Officer)
Date: August 4, 1995 By / S / DONALD L. KIMBALL
--------------------------
Donald L. Kimball, Vice President -
Controller of
Newhall Management Corporation
(Principal Accounting Officer)