<PAGE> 1
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form 11-K
ANNUAL REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the fiscal year ended December 31, 1996
Commission file number 1-7585
The Newhall Land and Farming Company
Employee Savings Plan
The Newhall Land and Farming Company
(A California Limited Partnership)
23823 Valencia Boulevard
Valencia, CA 91355
<PAGE> 2
REQUIRED INFORMATION
Statements of Net Assets Available for Plan Benefits as of December 31, 1996 and
1995, Statements of Changes in Net Assets Available for Plan Benefits for each
of the years in the two-year period ended December 31, 1996, Notes to Financial
Statements, Schedule of Assets Held for Investment as of December 31, 1996,
Schedule of Reportable Transactions for the year ended December 31, 1996,
together with the Report and Consent of Independent Auditors, are attached and
filed herewith.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, Newhall
Management Corporation has duly caused this annual report to be signed on its
behalf by the undersigned hereunto duly authorized.
The Newhall Land and Farming Company
Employee Savings Plan
June 26, 1997 / S / Thomas H. Almas
---------------------------------------
Newhall Management Corporation, Trustee
By: Thomas H. Almas, Vice President -
Administration and Secretary
<PAGE> 3
THE NEWHALL LAND AND FARMING COMPANY
EMPLOYEE SAVINGS PLAN
Index to Financial Statements and Schedules
Page
<TABLE>
<CAPTION>
<S> <C>
Independent Auditors' Report 1
Statement of Net Assets Available for Plan Benefits with Fund Information -
December 31, 1996 2
Statement of Net Assets Available for Plan Benefits with Fund Information -
December 31, 1995 3
Statement of Changes in Net Assets Available for Plan Benefits with Fund
Information - Year ended December 31, 1996 4
Statement of Changes in Net Assets Available for Plan Benefits with Fund
Information - Year ended December 31, 1995 5
Notes to Financial Statements 6
Schedule
Line 27a - Schedule of Assets Held for Investment Purposes -
December 31, 1996 1
Line 27d - Schedule of Reportable Transactions - Year ended
December 31, 1996 2
</TABLE>
Other schedules are omitted as they are not applicable or not required by
Department of Labor Regulations.
<PAGE> 4
INDEPENDENT AUDITORS' REPORT
The Compensation Committee of the
Board of Directors of Newhall Management Corporation:
We have audited the accompanying statements of net assets available for Plan
benefits with fund information of The Newhall Land and Farming Company Employee
Savings Plan as of December 31, 1996 and 1995 and the related statements of
changes in net assets available for Plan benefits with fund information for the
years then ended. These financial statements are the responsibility of the
Plan's management. Our responsibility is to express an opinion on these
financial statements based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the net assets available for Plan benefits of The Newhall
Land and Farming Company Employee Savings Plan as of December 31, 1996 and 1995
and the changes in those net assets for the years then ended in conformity with
generally accepted accounting principles.
Our audits were made for the purpose of forming an opinion on the basic
financial statements taken as a whole. The supplementary information included in
Schedules 1 and 2 is presented for purposes of additional analysis and is not a
required part of the basic financial statements but is supplementary information
required by the Department of Labor's Rules and Regulations for Reporting and
Disclosure under the Employee Retirement Income Security Act of 1974. The fund
information in the statements of net assets available for Plan benefits and the
statements of changes in net assets available for Plan benefits is presented for
purposes of additional analysis rather than to present the net assets available
for Plan benefits and changes in net assets available for Plan benefits of each
fund. The supplemental schedules and fund information have been subjected to the
auditing procedures applied in the audits of the basic financial statements and,
in our opinion, are fairly stated, in all material respects, in relation to the
basic financial statements taken as a whole.
May 30, 1997 /s/ KPMG Peat Marwick LLP
<PAGE> 5
THE NEWHALL LAND AND FARMING COMPANY
EMPLOYEE SAVINGS PLAN
Statement of Net Assets Available for Plan Benefits with Fund Information
December 31, 1996
<TABLE>
<CAPTION>
Partnership Balanced
Fixed Income Depositary Investment Equity Index Participant
Assets Fund Unit Fund Fund Fund loans Total
------------ ----------- ---------- ------------ ----------- ----------
<S> <C> <C> <C> <C> <C> <C>
Cash $ -- 819 -- -- -- 819
Investments 3,423,621 182,892 1,039,224 5,300,616 -- 9,946,353
Loans to participants -- -- -- -- 617,021 617,021
---------- ------- --------- ---------- ------- ----------
Total assets 3,423,621 183,711 1,039,224 5,300,616 617,021 10,564,193
Liabilities
Reimbursements due to Plan sponsor (34,008) -- -- (15,700) -- (49,708)
---------- ------- --------- --------- ------- ----------
Net assets available for Plan benefits $3,389,613 183,711 1,039,224 5,284,916 617,021 10,514,485
========== ======= ========= ========= ======= ===========
</TABLE>
See accompanying notes to financial statements.
<PAGE> 6
THE NEWHALL LAND AND FARMING COMPANY
EMPLOYEE SAVINGS PLAN
Statement of Net Assets Available for Plan Benefits with Fund Information
December 31, 1995
<TABLE>
<CAPTION>
Partnership Balanced
Fixed Income Depositary Investment Equity Index Participant
Assets Fund Unit Fund Fund Fund loans Total
------------ ----------- ---------- ------------ ----------- ---------
<S> <C> <C> <C> <C> <C> <C>
Cash $ -- 17,776 -- -- -- 17,776
Investments 3,950,255 117,052 744,653 4,038,954 -- 8,850,914
Loans to participants -- -- -- -- 602,836 602,836
---------- ------- ------- --------- -------- ----------
Total assets 3,950,255 134,828 744,653 4,038,954 602,836 9,471,526
Liabilities
Reimbursements due to Plan sponsor (28,740) -- -- -- -- (28,740)
---------- ------- ------- --------- -------- ----------
Net assets available for Plan benefits $3,921,515 134,828 744,653 4,038,954 602,836 9,442,786
========== ======= ======= ======== ======= =========
</TABLE>
See accompanying notes to financial statements.
<PAGE> 7
THE NEWHALL LAND AND FARMING COMPANY
EMPLOYEE SAVINGS PLAN
Statement of Changes in Net Assets Available for
Plan Benefits with Fund Information
Year ended December 31, 1996
<TABLE>
<CAPTION>
Partnership Balanced
Fixed Income Depositary Investment Equity Index Participant
Fund Unit Fund Fund Fund loans Total
------------ ----------- ---------- ------------ ----------- ----------
<S> <C> <C> <C> <C> <C> <C>
Dividend and interest income $ 256,285 2,748 33 96 45,131 304,293
Realized gains -- -- 8,516 34,513 -- 43,029
Unrealized gains -- 22,259 95,108 883,855 -- 1,001,222
---------- ------- --------- --------- -------- ----------
256,285 25,007 103,657 918,464 45,131 1,348,544
---------- ------- --------- --------- -------- ----------
Contributions:
From participants 185,694 28,600 71,204 275,274 -- 560,772
From the Company 92,842 10,253 30,989 126,215 -- 260,299
---------- ------- --------- --------- -------- ----------
278,536 38,853 102,193 401,489 -- 821,071
---------- ------- --------- --------- -------- ----------
Interfund transfers (208,617) (11,677) 117,869 133,371 (30,946) --
Participant withdrawals (858,106) (3,300) (29,148) (207,362) -- (1,097,916)
---------- ------- --------- --------- ------- ----------
Increase (decrease) in net assets (531,902) 48,883 294,571 1,245,962 14,185 1,071,699
Net assets available for Plan benefits:
Beginning of year 3,921,515 134,828 744,653 4,038,954 602,836 9,442,786
---------- ------- --------- --------- ------- ----------
End of year $3,389,613 183,711 1,039,224 5,284,916 617,021 10,514,485
========== ======= ========= ========= ======= ==========
</TABLE>
See accompanying notes to financial statements.
<PAGE> 8
THE NEWHALL LAND AND FARMING COMPANY
EMPLOYEE SAVINGS PLAN
Statement of Changes in Net Assets Available for
Plan Benefits with Fund Information
Year ended December 31, 1995
<TABLE>
<CAPTION>
Partnership Balanced
Fixed Income Depositary Investment Equity Index Participant
Fund Unit Fund Fund Fund loans Total
------------ ----------- ---------- ------------ ----------- -----------
<S> <C> <C> <C> <C> <C> <C>
Dividend and interest income $ 274,785 895 23 70 41,893 317,666
Realized losses -- -- (1,155) (311,744) -- (312,899)
Unrealized gains (losses) (7,059) 22,984 152,630 1,360,454 -- 1,529,009
---------- ------- ------- --------- -------- ---------
267,726 23,879 151,498 1,048,780 41,893 1,533,776
---------- ------- ------- --------- -------- ---------
Contributions:
From participants 226,284 14,838 57,765 212,795 -- 511,682
From the Company 109,540 7,025 27,712 93,276 -- 237,553
---------- ------- ------- --------- -------- ---------
335,824 21,863 85,477 306,071 -- 749,235
---------- ------- ------- --------- -------- ---------
Interfund transfers (67,658) 20,627 (1,430) 41,585 6,876 --
Participant withdrawals (39,933) -- (14,415) (22,720) -- (77,068)
---------- ------- ------- --------- ------- ---------
Increase in net assets 495,959 66,369 221,130 1,373,716 48,769 2,205,943
Net assets available for Plan benefits:
Beginning of year 3,425,556 68,459 523,523 2,665,238 554,067 7,236,843
---------- ------- ------- --------- ------- ---------
End of year $3,921,515 134,828 744,653 4,038,954 602,836 9,442,786
========== ======= ======= ========= ======= =========
</TABLE>
<PAGE> 9
THE NEWHALL LAND AND FARMING COMPANY
EMPLOYEE SAVINGS PLAN
Notes to Financial Statements
December 31, 1996 and 1995
(1) Description of the Plan
The Newhall Land and Farming Company Employee Savings Plan (the Plan) is
a defined contribution plan under the Internal Revenue Code of 1986 (the
Code) Section 401(k) and is subject to the provisions of the Employee
Retirement Income Security Act of 1974 (ERISA). The Plan permits eligible
employees of The Newhall Land and Farming Company and subsidiaries (the
Company) to contribute up to 6% of their compensation plus an additional
$2,000 for a total not to exceed $9,500 and $9,240 in 1996 and 1995,
respectively, into one or more of four investment funds. Employee
contributions reduce an employee's currently taxable compensation and,
therefore, are not subject to income taxes until the amounts are
withdrawn from the Plan. An employee must complete one year of service
and reach age 19 to become eligible to participate.
For employee contributions of up to 6% of compensation, the Company may
contribute an amount ranging from 25% to 75% of the employee's
contribution depending upon the employee's length of service with the
Company. Company contributions may be suspended if Company net income is
less than 5% of the capital of the Company's partners or for other
reasons deemed appropriate by the Company's Board of Directors.
Participants select the investment funds in which their contributions are
to be invested. The investment funds include the Fixed Income Fund, the
Equity Index Fund, the Partnership Depositary Unit Fund, and the Balanced
Investment Fund. Company contributions, when made, are invested
proportionately in the same funds as the employee contributions.
Total employees participating in each investment option as of December
31, 1996 and 1995 are as follows:
<TABLE>
<CAPTION>
1996 1995
-------------- -------------
<S> <C> <C>
Fixed Income Fund 182 194
Partnership Depositary Unit Fund 38 22
Equity Index Fund 144 132
Balanced Investment Fund 61 51
=== ===
</TABLE>
Participants are fully vested in the Plan upon enrollment; accordingly,
there are no forfeitures resulting from participant withdrawals.
Normal distributions are made in full upon (1) retirement, (2) total and
permanent disability, (3) death or (4) termination of employment.
Participants showing hardship may withdraw part or all of their
contributions and accumulated earnings or losses, limited to earnings and
losses incurred prior to January 1, 1990, at the end of a calendar
quarter. An employee who withdraws any amount of his contribution account
is not permitted to resume participation for six months. Employer
contributions and the related accumulated earnings may be withdrawn only
upon one of the four above-listed occurrences. Distributions and
withdrawals are made in cash.
<PAGE> 10
THE NEWHALL LAND AND FARMING COMPANY
EMPLOYEE SAVINGS PLAN
Notes to Financial Statements
Effective October 1989, the Board of Directors amended the savings plan
to permit loans to Plan participants, secured by the borrowing
participant's interest in the Plan, on such nondiscriminatory terms and
conditions as the Plan's administrative committee shall determine,
provided, however, that such loans comply with applicable requirements of
ERISA and the Code (including such restrictions as are necessary to
prevent loans from being treated as distributions under Section 72(p) of
the Code). The loans are treated as an earmarked investment of the
participants with interest repayments credited proportionately to the
investment funds originally liquidated to provide the principal.
Effective November 1991, the Plan was amended to permit qualified
rollover contributions from other qualified plans.
In the event of Plan termination, all payments will be made as soon as
practicable from the assets of the Plan based on the amount in each
participant's individual and employer contribution accounts.
Newhall Management Corporation is the sole trustee for the Plan.
Participants should refer to the Plan document or summary Plan
description for a more complete description of the Plan's provisions.
(2) SUMMARY OF SIGNIFICANT ACCOUNTING PRINCIPLES AND PRACTICES
BASIS OF ACCOUNTING
The financial statements for the Plan are prepared on an accrual basis,
primarily from data submitted to the Plan administrator by the companies
that function as investment managers: Connecticut General Life Insurance
Company (CIGNA), Newhall Depositary Company and Wells Fargo Bank.
INVESTMENTS
All investment income is allocated to individual participant accounts.
The Fixed Income Fund, held by CIGNA, represents a deposit with an
insurance company and is stated at contract value, which represents
contributions and income earned, less distributions and expenses charged.
The Partnership Depositary Unit Fund is invested in partnership units in
the Company. The Equity Index Fund, held by Wells Fargo Bank, is a
collective trust invested primarily in the common stocks that comprise
the Standard & Poor's 500 Index. The Balanced Investment Fund, held by
Wells Fargo Bank, is a collective trust invested primarily in common
stocks that comprise the Standard & Poor's 500 Index and in U.S. Treasury
Bonds. The Plan shares in the investment gains and losses of the
securities underlying the Equity Index Fund, the Partnership Depositary
Unit Fund and the Balanced Investment Fund which are stated at fair value
based on quoted market prices. Purchases and sales of securities are
recorded on a trade-date basis.
Loans to participants are stated at cost, which approximates fair value.
<PAGE> 11
THE NEWHALL LAND AND FARMING COMPANY
EMPLOYEE SAVINGS PLAN
Notes to Financial Statements
CONTRIBUTION POLICY
Contributions by employees are voluntary and are determined as a
specified percentage of base compensation plus overtime, excluding that
portion of compensation imputed for tax purposes as a result of fringe
benefits and other similar forms of compensation.
PLAN EXPENSES
Expenses incurred in the administration of the Plan are borne by the
Company.
MANAGEMENT ESTIMATES
The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make certain
estimates and assumptions that affect the reported amounts of assets,
liabilities and the amount of any contingent assets or liabilities
disclosed in the financial statements. Actual results could differ from
estimates made.
(3) FEDERAL TAXES
The Company received a favorable determination letter from the Internal
Revenue Service in September 1995 which stated that the Plan, as then
designed, including certain proposed amendments, is in compliance with
applicable requirements of the Internal Revenue Code. The proposed
amendments were adopted by the Plan subsequent to receipt of the
determination letter.
(4) COMMITMENTS
Included in net assets available for Plan benefits in the accompanying
financial statements as of December 31, 1996 and 1995 are amounts
totaling $326,951 and $130,220, respectively, allocated to accounts of
persons who have requested withdrawal of their accounts from the Plan.
(5) INVESTMENTS REPRESENTING 5% OR MORE OF NET ASSETS
The fair value of individual investments representing 5% or more of the
Plan's net assets as of December 31, 1996 and 1995 are:
<TABLE>
<CAPTION>
1996 1995
---------- ---------
<S> <C> <C>
Wells Fargo Bank Equity Index Fund $5,300,616 4,038,954
CIGNA Guaranteed Deposit Account 3,423,621 3,950,255
Wells Fargo Bank Asset Allocation Fund 1,039,224 744,653
========== =========
</TABLE>
<PAGE> 12
Schedule 1
THE NEWHALL LAND AND FARMING COMPANY
EMPLOYEE SAVINGS PLAN
Line 27a - Schedule of Assets Held for Investment Purposes
December 31, 1996
<TABLE>
<CAPTION>
Identity of issuer, borrower,
lessor or similar party Description of
investment Cost Current value
- ------------------------------------ ------------------------------------ ---------- -------------
<S> <C> <C> <C>
Wells Fargo Money Market Money market shares, $1 par $ 819 819
Connecticut General Life Insurance
Company (CIGNA)
Guaranteed Deposit Account 3,423,621 3,423,621
The Newhall Land and Farming
Company * Partnership Units 164,207 182,892
Wells Fargo Bank Equity Index Fund 4,387,975 5,300,616
Wells Fargo Bank Balanced Investment Fund 941,018 1,039,224
Loans to Plan participants * Notes secured by vested
interest (79 total loans with
interest rates ranging from
7.32% to 9.20%) -- 617,021
---------- ----------
$8,917,640 10,564,193
========== ==========
</TABLE>
* Party in interest.
See accompanying independent auditors' report.
<PAGE> 13
Schedule 2
THE NEWHALL LAND AND FARMING
EMPLOYEE SAVINGS PLAN
Line 27d - Schedule of Reportable Transactions
Year ended December 31, 1996
<TABLE>
<CAPTION>
Total Current value
number of Purchase of asset on Sales Cost of Net gain
Identity of party involved Description of asset transactions price transaction date price asset (loss)
- -------------------------- -------------------- ------------ ---------- ---------------- --------- --------- ---------
<S> <C> <C> <C> <C> <C> <C> <C>
Wells Fargo Bank Equity Index Fund 47 purchases $1,248,752 1,248,752 -- -- --
Wells Fargo Bank Equity Index Fund 33 sales -- -- 958,671 787,698 170,973
============ ========== ========= ======= ======= =======
</TABLE>
See accompanying independent auditors' report.
<PAGE> 14
INDEPENDENT AUDITORS' CONSENT
We consent to the incorporation by reference in the Registration statement no.
33-53769 on Form S-8 of our report dated May 30, 1997 relating to the financial
statements of The Newhall Land and Farming Company Employee Savings Plan as of
and for the years ended December 31, 1996 and 1995, which report is included in
this Annual Report on Form 11-K.
Our report dated May 30, 1997 contains a paragraph which states that our audits
were made for the purpose of forming an opinion on the basic financial
statements taken as a whole. The supplemental schedule of assets held for
investment is presented for purposes of complying with the Department of Labor's
Rules and Regulations for Reporting and Disclosure under the Employee Retirement
Income Security Act of 1974 and is not a required part of the basic financial
statements. The fund information in the statements of net assets available for
Plan benefits and the statements of changes in net assets available for Plan
benefits is presented for purposes of additional analysis rather than to present
the net assets available for Plan benefits and changes in net assets available
for Plan benefits of each fund. The supplemental schedule and fund information
have been subjected to the auditing procedures applied in the audits of the
basic financial statements and, in our opinion, are fairly stated, in all
material respects, in relation to the basic financial statements taken as a
whole.
Los Angeles, California /s/ KPMG Peat Marwick LLP
June 26, 1997
