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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8 - K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of
the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): December 16, 1999
THE NEWHALL LAND AND FARMING COMPANY
( a California Limited Partnership )
(Exact name of registrant as specified in its charter)
California
(State or other jurisdiction of incorporation)
1-7585 95-3931727
(Commission File Number) (IRS Employer Identification No.)
23823 Valencia Blvd., Valencia, CA 91355
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: 661-255-4000
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2.
Item 5. OTHER EVENTS
The Newhall Land and Farming Company issued a news release on
December 16, 1999 concerning expected record earnings in 1999, the close of
escrow on the sale of Suey Ranch, an update on its unit repurchase program
and its continuing to publish year-end property appraisals. The press release
is filed as an exhibit to this report.
Item 7. FINANCIAL STATEMENTS AND EXHIBITS
(c) The following exhibits are filed with this report.
99 The Newhall Land and Farming Company press release dated
December 16, 1999
SIGNATURE
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 hereunto 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: December 16, 1999 By /s/ DONALD L. KIMBALL
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Donald L. Kimball
Vice President - Finance and Controller
Newhall Management Corporation
(Principal Accounting Officer)
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Exhibit 99
[LETTERHEAD]
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[LETTERHEAD]
FOR IMMEDIATE RELEASE Contact: Marcia Ward
Newhall Land
(661) 255-4445
Fred Mickaelian, Jr.
Mickaelian Associates
(323) 268-1152
NEWHALL LAND REPORTS RECORD EARNINGS EXPECTED IN 1999
ESCROW CLOSES ON SUEY RANCH - CONTRIBUTES 70 CENTS TO FOURTH QUARTER EARNINGS
COMPANY PROVIDES UPDATE ON UNIT REPURCHASE PROGRAM
CONTINUES YEAR-END APPRAISALS
VALENCIA, California, December 16, 1999 - The Newhall Land and
Farming Company (NYSE, PSE/NHL) today reported that it expects to achieve
record earnings of between $85 million and $90 million in 1999 from strong
performance in all of its business segments - residential, commercial and
industrial. Included in the results is the sale of its 36,000-acre Suey Ranch
in Santa Barbara and San Luis Obispo counties for approximately $25 million
cash. The ranch sale, which closed this morning, will contribute about $22
million or 70 cents per unit to 1999 fourth quarter income. In addition, the
Company provided an update on its major unit repurchase program authorized by
the Board of Directors on September 15, 1999, and announced that it will
continue to publish year-end appraisals.
1999 - A RECORD YEAR
Thomas L. Lee, chairman and chief executive officer, said, "The
Company expects 1999 to be the best year in its history, achieving new
records in revenues, net income and net income per unit. Approximately 113
acres of commercial and industrial land sales has closed escrow to date this
year, including sales of 45 acres in the fourth quarter. A total of 891
residential lots has been sold this year, some at values exceeding $1 million
per net acre, a Company record high. In the fourth quarter, 544 residential
lots closed escrow - 250 lots in our Bridgeport lake community and 294
unimproved lots in the Hasley Hills area just north of Valencia. These strong
results from operations, combined with the sale of the Suey Ranch and other
smaller sales anticipated before year-end, are expected to result in
projected fourth quarter earnings in the range of $52 million to $57 million,
or approximately $1.70 to $1.85 per unit. For all of 1999, earnings per unit
(including the Suey transaction) are anticipated to be in the range of $2.70
to
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$2.85 per unit compared to $1.86 per unit in 1998. If achieved, this would be
the second consecutive year of record revenues and the eighth consecutive
year of increased per unit earnings for the Company. Remaining escrow
closings are subject to market and other conditions."
UNIT REPURCHASE PROGRAM UPDATE
As announced on September 16, 1999, the Company plans to repurchase
up to 6.3 million units (including 884,446 units under a previous
authorization), or approximately 20% of the outstanding units, from
time-to-time in open market purchases and block transactions over the period
ending December 31, 2000, depending on market conditions. Since September
16th, the Company has repurchased 1,641,879 units at an average price of
$24.42. For all of 1999 to date, a total of 3,029,205 units has been
repurchased at an average price of $24.32. The number of units repurchased in
December includes a block of 400,000 units purchased in a private transaction
from Jane Newhall, a director of the Company. Miss Newhall, age 86, sold the
units for estate planning purposes for $9.65 million and continues to hold
approximately 600,000 partnership units.
"For 2000, the Company has in place a business plan that has been
approved by the Board of Directors to provide the necessary cash to fund the
unit repurchases and provide the necessary capital to continue ongoing
planning and land development activities," Lee said. "We realize that both
the unit repurchase and asset sales plans are aggressive. However, the timing
for the repurchase program is excellent since many of the Company's real
estate values are at all-time highs and the demand for developable land in
Los Angeles County continues to be strong. This action is being taken to
enhance the value of each unitholder's investment in Newhall Land."
Mr. Lee outlined a three-pronged strategy for funding the remaining
repurchases, which would cost approximately $117 million, at the current unit
price. He stated, "First, the strategy to generate cash includes the use of
existing debt capacity to fund unit repurchases, as well as ongoing
entitlement and land development costs, until the proposed land and asset
sales (described below) are completed during 2000. Today, the Company has
about $100 million of available debt capacity based upon internal leverage
guidelines and unutilized credit. Next year, as income properties are sold, a
significant portion of the proceeds will be used to reduce debt in order to
maintain leverage at appropriate levels.
"The sale of existing income properties is the second element of the
cash generation strategy. A gross cash generation plan of over $200 million,
before necessary debt retirements or special distributions, is planned for
asset sales. These sales opportunities consist of three principal areas -
retail, office and other properties. Retail properties represent the
Company's largest income property classification under consideration for
sale. Newhall Land has retained CB Richard Ellis to sell its major retail
properties, including the Valencia Town Center regional shopping mall and
retail shops along Town Center Drive, plus the Valencia Entertainment complex
completed earlier this year, and the expansion of the complex currently under
construction. Two other smaller centers also will be marketed. Retail
properties under consideration for sale, including land for expansion, have a
gross asset value of approximately $150 million.
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"Cushman Realty Corporation has been retained by the Company to
market and sell five office buildings, including three leased by Princess
Cruises - a six-story building currently occupied and a five- and a
four-story under construction. The office portfolio at completion is expected
to be valued at about $70 million. Other income properties, such as the
Spectrum Club, also are sales candidates in 2000.
"The third portion of the strategy is an aggressive land sales
program for next year, capitalizing on the strong regional economy. It is the
Company's goal in 2000 to generate approximately $200 million cash from a
combination of residential, industrial and commercial land sales, as well as
recurring commercial and agricultural income, to fund all of the Company's
remaining operations. These include administrative, operating, interest,
development and entitlement costs and regular distributions.
"Based upon entitlement approvals expected early next year, the
Company plans to market 700 residential lots for sale in the North River area
of Valencia. Commercial and industrial land sales are targeted at
approximately 100 acres and will be concentrated in the Valencia Commerce
Center and the Valencia Town Center areas. To limit expenditures and
accelerate cash flow, we plan to reduce capital spending, as commercial sites
previously scheduled for construction are expected to be sold to third-party
developers, and certain residential parcels may be sold as approved but
undeveloped `paper' lots.
APPRAISED VALUES
"Earlier this year we announced that we would discontinue publishing
the net appraised value of the Company's assets due to the subjectivity
involved in valuing large, undeveloped land parcels. However, throughout the
year the response from our investors has been in favor of continuing the
appraisal. As a result, we will continue to provide this information in
January in our usual format.
"For 1999 sales to date, sales prices have exceeded the year-end
1998 appraised values of residential, commercial and industrial land by 28,
10, and 22 percent, respectively, adjusted for 1999 development costs. On a
weighted average basis, across all real estate segments, 1999 land sales
prices exceeded 1998 appraised values by 21 percent. This does not imply that
future land sales will be at the same percentage increase to appraised
values, nor should investors simply multiply these rates to reach an overall
value for the Company."
Newhall Land is a developer of new towns and master-planned
communities in north Los Angeles County. Its primary activity is building the
new town of Valencia, California. Newhall Ranch, a new community that
recently received Los Angeles County Board of Supervisor approval, and
Valencia together form one of the nation's most valuable landholdings. They
are located on the Company's 36,000 acres, 30 miles north of downtown Los
Angeles. Newhall Land also has a controlling interest in a joint venture to
develop the 1,900-acre City Ranch, an approved master-planned community in
the City of Palmdale.
The Company maintains a web site through the Internet at
http://www.newhall.com.
SAFE HARBOR STATEMENT UNDER THE PRIVATE SECURITIES LITIGATION ACT OF 1995
The forward-looking statements made in this release are based on
present trends the Company is experiencing. Also, Newhall Land's success in
obtaining entitlements,
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governmental and environmental approvals, including litigation relating to
these approvals, timing and ability to close escrows due to market and other
conditions, and marketplace acceptance of its business strategies are factors
that could affect results. The forward-looking statements may involve the
known risks described in the Company's Form 10-K and Forms 10-Q, and unknown
risks, uncertainties and other factors that may cause the Company's actual
results and performance in future periods to be materially different from any
future results or performance suggested by the forward-looking statements in
this release. The Company expressly disclaims any obligations to update or
revise any forward-looking statements found herein to reflect any change in
Company expectations or results or any change in events.
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