<PAGE>
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, 1998
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>
REQUIRED INFORMATION
Statements of Net Assets Available for Plan Benefits With Fund Information as of
December 31, 1998 and 1997, Statements of Changes in Net Assets Available for
Plan Benefits With Fund Information for each of the years in the two-year period
ended December 31, 1998, Notes to Financial Statements, Schedule of Assets Held
for Investment Purposes as of December 31, 1998, Schedule of Reportable
Transactions for the year ended December 31, 1998, 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
Newhall Management Corporation, Trustee
June 25, 1999 By: /S/ Donald L. Kimball
-------------------------------------------
Donald L. Kimball
Vice President - Finance and Controller
<PAGE>
THE NEWHALL LAND AND FARMING COMPANY
EMPLOYEE SAVINGS PLAN
Financial Statements and Schedules
December 31, 1998 and 1997
(With Independent Auditors' Report Thereon)
<PAGE>
THE NEWHALL LAND AND FARMING COMPANY
EMPLOYEE SAVINGS PLAN
INDEX TO FINANCIAL STATEMENTS AND SCHEDULES
<TABLE>
<CAPTION>
PAGE
<S> <C>
Independent Auditors' Report 1
Statement of Net Assets Available for Plan Benefits with Fund Information -
December 31, 1998 2
Statement of Net Assets Available for Plan Benefits with Fund Information -
December 31, 1997 3
Statement of Changes in Net Assets Available for Plan Benefits with Fund Information - Year
ended December 31, 1998 4
Statement of Changes in Net Assets Available for Plan Benefits with Fund Information - Year
ended December 31, 1997 5
Notes to Financial Statements 6
SCHEDULE
1 Line 27a - Schedule of Assets Held for Investment Purposes - December 31, 1998 9
2 Line 27d - Schedule of Reportable Transactions - Year ended December 31, 1998 10
</TABLE>
Other schedules are omitted as they are not applicable or not required by
Department of Labor Regulations.
<PAGE>
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, 1998 and 1997 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, 1998 and 1997
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. These
supplementary schedules are the responsibility of the Plan's management. 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.
April 30, 1999 /S/ KPMG LLP
<PAGE>
THE NEWHALL LAND AND FARMING COMPANY
EMPLOYEE SAVINGS PLAN
Statement of Net Assets Available for Plan Benefits with Fund Information
December 31, 1998
<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 $ -- -- -- 4,852 -- 4,852
Investments 3,001,272 635,977 1,574,742 8,637,533 -- 13,849,524
Loans to participants -- -- -- -- 764,531 764,531
------------ ------------ ------------ ------------ ------------ ------------
Net assets
available for
Plan Benefits $ 3,001,272 635,977 1,574,742 8,642,385 764,531 14,618,907
============ ============ ============ ============ ============ ============
</TABLE>
See accompanying notes to financial statements.
2
<PAGE>
THE NEWHALL LAND AND FARMING COMPANY
EMPLOYEE SAVINGS PLAN
Statement of Net Assets Available for Plan Benefits with Fund Information
December 31, 1997
<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 $ -- 535 -- 5,257 -- 5,792
Investments 2,881,960 500,027 1,229,572 6,960,686 -- 11,572,245
Loans to participants -- -- -- -- 665,173 665,173
------------ ------------ ------------ ------------ ------------ ------------
Total assets 2,881,960 500,562 1,229,572 6,965,943 665,173 12,243,210
LIABILITIES
Reimbursements due to Plan
sponsor (11,936) -- -- -- -- (11,936)
------------ ------------ ------------ ------------ ------------ ------------
Net assets
available for
Plan Benefits $ 2,870,024 500,562 1,229,572 6,965,943 665,173 12,231,274
============ ============ ============ ============ ============ ============
</TABLE>
See accompanying notes to financial statements.
3
<PAGE>
THE NEWHALL LAND AND FARMING COMPANY
EMPLOYEE SAVINGS PLAN
<TABLE>
<CAPTION>
Statement of Changes in Net Assets Available for Plan Benefits with Fund Information
Year ended December 31, 1998
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 $ 210,378 -- 113 354 -- 210,845
Realized gains -- -- 25,927 123,196 49,524 198,647
Unrealized gain (loss) 19,141 (95,088) 281,748 1,827,180 -- 2,032,981
------------ ------------ ------------ ------------ ------------ ------------
229,519 (95,088) 307,788 1,950,730 49,524 2,442,473
------------ ------------ ------------ ------------ ------------ ------------
Contributions:
From participants 100,366 50,448 86,516 393,649 -- 630,979
From the Company 55,153 21,336 38,214 185,247 -- 299,950
------------ ------------ ------------ ------------ ------------ ------------
155,519 71,784 124,730 578,896 -- 930,929
------------ ------------ ------------ ------------ ------------ ------------
Interfund transfers 259,965 159,291 156,012 (625,102) 49,834 --
Participant withdrawals (513,755) (572) (243,360) (228,082) -- (985,769)
------------ ------------ ------------ ------------ ------------ ------------
Increase
in net assets 131,248 135,415 345,170 1,676,442 99,358 2,387,633
Net assets available for Plan
benefits:
Beginning of year 2,870,024 500,562 1,229,572 6,965,943 665,173 12,231,274
------------ ------------ ------------ ------------ ------------ ------------
End of year $ 3,001,272 635,977 1,574,742 8,642,385 764,531 14,618,907
============ ============ ============ ============ ============ ============
</TABLE>
See accompanying notes to financial statements.
4
<PAGE>
THE NEWHALL LAND AND FARMING COMPANY
EMPLOYEE SAVINGS PLAN
<TABLE>
<CAPTION>
Statement of Changes in Net Assets Available for Plan Benefits with Fund Information
Year ended December 31, 1997
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 $ 176,802 3,310 1,145 428 46,190 227,875
Realized gains -- -- 23,177 66,234 -- 89,411
Unrealized gains 883 199,160 211,959 1,541,042 -- 1,953,044
------------ ------------ ------------ ------------ ------------ ------------
177,685 202,470 236,281 1,607,704 46,190 2,270,330
------------ ------------ ------------ ------------ ------------ ------------
Contributions:
From participants 146,787 36,354 275,973 151,492 -- 610,606
From the Company 73,525 13,534 29,972 158,569 -- 275,600
------------ ------------ ------------ ------------ ------------ ------------
220,312 49,888 305,945 310,061 -- 886,206
------------ ------------ ------------ ------------ ------------ ------------
Interfund transfers (509,803) 65,663 (315,156) 757,334 1,962 --
Participant withdrawals (407,783) (1,170) (36,722) (994,072) -- (1,439,747)
------------ ------------ ------------ ------------ ------------ ------------
Increase
(decrease) in
net assets (519,589) 316,851 190,348 1,681,027 48,152 1,716,789
Net assets available for Plan
benefits:
Beginning of year 3,389,613 183,711 1,039,224 5,284,916 617,021 10,514,485
------------ ------------ ------------ ------------ ------------ ------------
End of year $ 2,870,024 500,562 1,229,572 6,965,943 665,173 12,231,274
============ ============ ============ ============ ============ ============
</TABLE>
See accompanying notes to financial statements.
5
<PAGE>
THE NEWHALL LAND AND FARMING COMPANY
EMPLOYEE SAVINGS PLAN
Notes to Financial Statements
December 31, 1998 and 1997
(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 $10,000 in 1998 and $9,500 in 1997. 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 as defined in
the plan 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 it is deemed appropriate by the Company's
Board of Directors.
Participants select the investment funds in which their contributions are
to be invested from the four available funds of the Plan. The investment
funds are 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.
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 or her contributions is not
permitted to resume participation for twelve 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.
The Plan permits 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 earmarked investments of the participants with
interest repayments credited proportionately to the investment funds
originally liquidated to provide the principal.
Contributions by employees are voluntary and are determined as a specified
percentage of base compensation, overtime and incentive compensation
excluding that portion of compensation imputed for tax purposes as a result
of fringe benefits and other similar forms of compensation.
The Plan permits eligible rollover contributions from other qualified
plans.
6 (Continued)
<PAGE>
THE NEWHALL LAND AND FARMING COMPANY
EMPLOYEE SAVINGS PLAN
Notes to Financial Statements
December 31, 1998 and 1997
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 for a more complete
description of the Plan's provisions.
(2) SUMMARY OF SIGNIFICANT ACCOUNTING PRINCIPLES AND PRACTICES
(a) 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.
(b) 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.
(c) PLAN EXPENSES
Expenses incurred in the administration of the Plan are borne by
the Company.
(d) 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 net assets and changes therein and the amount of any
contingent assets or liabilities disclosed in the financial
statements. Actual results could differ from estimates made.
7 (Continued)
<PAGE>
THE NEWHALL LAND AND FARMING COMPANY
EMPLOYEE SAVINGS PLAN
Notes to Financial Statements
December 31, 1998 and 1997
(3) INCOME 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, 1998 and 1997 are amounts totaling
$67,109 and $26,404, 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, 1998 and 1997 is:
<TABLE>
<CAPTION>
1998 1997
------------ ------------
<S> <C> <C>
Wells Fargo Bank Equity Index Fund $ 8,637,533 6,958,572
CIGNA Fixed Income Fund 3,001,272 2,847,952
Wells Fargo Balanced Investment Fund 1,574,742 1,229,380
============ ============
</TABLE>
8 (Continued)
<PAGE>
SCHEDULE 1
THE NEWHALL LAND AND FARMING
EMPLOYEE SAVINGS PLAN
Line 27a - Schedule of Assets Held for Investment Purposes
December 31, 1998
<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 $ 4,852 4,852
Connecticut General Life
Insurance Company
(CIGNA) * Fixed Income Fund 3,001,272 3,001,272
The Newhall Land and
Farming Company* Partnership Units 508,123 635,977
Wells Fargo Bank Equity Index Fund 6,823,986 8,637,533
Wells Fargo Bank Balanced Investment Fund 1,292,799 1,574,742
Loans to Plan participants Notes secured by vested interest
(77 total loans with interest rates
ranging from 6.88 % to 8.64 %) -- 764,531
------------- -------------
$11,631,032 14,618,907
============= =============
</TABLE>
* Party in interest.
See accompanying notes to financial statements.
9
<PAGE>
SCHEDULE 2
THE NEWHALL LAND AND FARMING
EMPLOYEE SAVINGS PLAN
Line 27d - Schedule of Reportable Transactions
Year ended December 31, 1998
<TABLE>
<CAPTION>
CURRENT
VALUE OF ASSET
TOTAL ON EXPENSES
IDENTITY OF DESCRIPTION NUMBER OF PURCHASE TRANSACTION SALES COST OF INCURRED WITH NET GAIN
PARTY INVOLVED OF ASSETS TRANSACTIONS PRICE DATE PRICE ASSET TRANSACTION (LOSS)
- ---------------- ----------------- ------------ ---------- -------------- --------- --------- ------------- --------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Wells Fargo Bank Equity Index Fund 33 $1,073,128 1,073,128 -- 1,073,128 -- --
Wells Fargo Bank Equity Index Fund 22 -- 1,210,505 1,333,333 681,546 -- 651,787
Wells Fargo Bank Money Market Fund 14 -- 369,053 369,053 369,053 -- --
Wells Fargo Bank Money Market Fund 29 362,410 362,410 -- 362,410 -- --
============ ========== ============== ========= ========= ============= ========
</TABLE>
See accompanying independent auditors' report.
10
<PAGE>
THE NEWHALL LAND AND FARMING COMPANY
INDEX TO EXHIBITS
Exhibit
Number Description
-------- -----------
23 Independent Auditors' Consent
<PAGE>
Exhibit 23
INDEPENDENT AUDITORS' CONSENT
We consent to incorporation by reference in the registration statement no.
33-53769 on Form S-8 of The Newhall Land and Farming Company of our report dated
April 30, 1999, relating to the 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, 1998 and 1997 and the related statements of
changes in net assets available for plan benefits with fund information for each
of the years in the two-year period ended December 31, 1998 and all related
schedules, which report appears in the December 31, 1998 annual report on Form
11-K of The Newhall Land and Farming Company Employee Savings Plan.
/ S / KPMG LLP
June 25, 1999
