SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q/A
AMENDMENT NO. 1
(Mark One)
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended June 30, 1999
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 No.)
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 [ ]
APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY
PROCEEDINGS DURING THE PRECEDING FIVE YEARS:
Indicate by check mark whether the registrant has filed all
documents and reports required to be filed by Section 12, 13 or 15(d) of
the Securities Exchange Act of 1934 subsequent to the distribution of securities
under a plan confirmed by a court.
Yes [X] No [ ]
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 AUGUST
12, 1999, THERE WERE 56,557,826 OUTSTANDING SHARES OF THE REGISTRANT'S COMMON
STOCK, PAR VALUE $.01 PER SHARE.
NY2:\809892\08\HCX008!.DOC\76830.0194
<PAGE>
PART I - FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS.
HOMEFED CORPORATION AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
June 30, 1999 and December 31, 1998
(Dollars in thousands, except par value)
----------------------------------------
<TABLE>
<CAPTION>
June 30, December 31,
1999 1998
-------------- --------------
(Unaudited)
<S> <C> <C>
ASSETS
Land and real estate held for development and sale $2,531 $ 4,636
Cash and cash equivalents 2,205 3,120
Restricted cash 1,321 1,127
Investment in Otay Land Company, LLC 10,119 9,917
Other investments - 79
Deposits and other assets 321 164
-------------- --------------
TOTAL $16,497 $19,043
============== ==============
LIABILITIES
Note payable to Leucadia Financial Corporation $20,129 $19,736
Accounts payables and accrued liabilities 1,032 802
-------------- --------------
Total liabilities 21,161 20,538
-------------- --------------
COMMON STOCK SUBSCRIPTION
Advance under common stock subscription 6,710 6,710
-------------- --------------
STOCKHOLDERS' DEFICIT
Common Stock, $.01 par value;
100,000,000 shares authorized; 100 100
10,000,000 shares outstanding
Additional paid-in capital 346,919 346,919
Accumulated deficit (358,393) (355,224)
-------------- --------------
Total stockholders' deficit (11,374) (8,205)
-------------- --------------
TOTAL $16,497 $19,043
============== ==============
</TABLE>
See notes to interim consolidated financial statements.
2
<PAGE>
HOMEFED CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
For the periods ended June 30, 1999 and 1998
(In thousands, except per share amounts)
(Unaudited)
----------------------------------------
<TABLE>
<CAPTION>
For the Three Month Period For the Six Month Period
Ended June 30, Ended June 30,
-------------------------------- ----------------------------
1999 1998 1999 1998
---- ---- ---- ----
<S> <C> <C> <C> <C>
Sales of residential properties $ - $ - $ 2,250 $ 891
Cost of sales - - 2,218 894
---------- ------------- ------------- ---------
Gross profit (loss) - - 32 ( 3)
Provision for losses on real estate
investments - - 255 -
Interest expense relating to Leucadia
Financial Corporation
596 780 1,180 1,552
General and administrative expenses
609 174 1,177 305
Management fees to Leucadia Financial
Corporation 74 13 148 30
---------- ------------- ------------- ---------
Loss from operations (1,279) (967) (2,728) (1,890)
Equity in losses from Otay Land Company, (266) - (523) -
LLC
Other income, net 50 64 102 134
---------- ------------- ------------- ---------
Loss before income taxes (1,495) (903) (3,149) (1,756)
Income tax expenses (12) (8) (20) (17)
---------- ------------- ------------- ---------
Net loss $ (1,507) $ (911) $ (3,169) $ (1,773)
========== ============= ============= =========
Basic loss per common share $ (0.15) $ (0.09) $ (0.32) $ (0.18)
========== ============= ============= =========
Diluted loss per common share $ (0.15) $ (0.09) $ (0.32) $ (0.18)
========== ============= ============= =========
</TABLE>
See notes to interim consolidated financial statements.
3
<PAGE>
HOMEFED CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' DEFICIT
For the six months ended June 30, 1999 and 1998
(In thousands)
(Unaudited)
-----------------------------------------------
<TABLE>
<CAPTION>
Additional
Common Stock Paid-In Accumulated Total Stockholders'
$.01 Par Value Capital Deficit Deficit
-------------- ------- ------- -------
<S> <C> <C> <C> <C>
BALANCE, JANUARY 1, 1998 $100 $339,904 $(350,743) $(10,739)
Net Loss (1,773) (1,773)
---- -------- ---------- ---------
BALANCE, JUNE 30, 1998 $100 $339,904 $(352,516) $(12,512)
==== ======== ========== =========
BALANCE, JANUARY 1, 1999 $100 $346,919 $(355,224) $ (8,205)
Net Loss (3,169) (3,169)
---- -------- ---------- ---------
BALANCE, JUNE 30, 1999 $100 $346,919 $(358,393) $(11,374)
==== ======== ========== =========
</TABLE>
See notes to interim consolidated financial statements.
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<PAGE>
HOMEFED CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
For the six months ended June 30, 1999 and 1998
(In thousands)
(Unaudited)
-----------------------------------------------
<TABLE>
<CAPTION>
1999 1998
---- ----
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss $ (3,169) $ (1,773)
Adjustments to reconcile net loss to net cash used in operating activities:
Provision for losses on real estate investments 255 -
Accrued interest added to note payable to Leucadia Financial Corporation 393 -
Equity in losses from Otay Land Company, LLC 523 -
Changes in operating assets and liabilities:
Land and real estate held for development and sale 1,850 322
Deposits and other assets (157) 226
Accounts payable and accrued liabilities 230 12
Decrease (increase) in restricted cash (194) 2
------------- ------------
Net cash used in operating activities (269) (1,211)
------------- ------------
CASH FLOWS FROM INVESTING ACTIVITIES:
Contributions to Otay Land Company, LLC (725) -
Decrease (increase) in other investments 79 (2)
------------- ------------
Net cash used in investing
activities (646) (2)
------------- ------------
Net decrease in cash and cash equivalents (915) (1,213)
Cash and cash equivalents, beginning of period 3,120 4,195
------------- ------------
Cash and cash equivalents, end of period $ 2,205 $ 2,982
============= ============
</TABLE>
See notes to interim consolidated financial statements.
5
<PAGE>
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
financial position, results of operations and cash flows, should be
read in conjunction with the audited consolidated financial
statements for HomeFed Corporation for the year ended December 31,
1998 which are included in the Company's Annual Report on Form 10-K,
as amended by Form 10-K/A, for such year (the "1998 10-K"). Results
of operations for interim periods are not necessarily indicative of
annual results of operations. The consolidated balance sheet at
December 31, 1998 was derived from the Company's audited consolidated
financial statements in the 1998 10-K, and does not include all
disclosures required by generally accepted accounting principles for
annual financial statements.
The Company's unaudited interim financial statements have been
restated to reflect the accrual of a minority interest charge of
$250,000 per quarter representing Leucadia National Corporation's
("Leucadia") minimum preferred return in Otay Land Company, LLC
("Otay Land Company") and to reflect Otay Land Company under the
equity method of accounting rather than the consolidation method of
accounting because Leucadia, although the minority member of Otay
Land Company, has certain approval rights which could, if exercised,
affect the Company's ability to control Otay Land Company. The
noncash effects on the consolidated financial statements are a
decrease in land of $20,803,000, a decrease in minority interest of
$10,000,000 and an increase in Investment in Otay Land Company, LLC
of $10,119,000. Effective September 20, 1999, the Company and
Leucadia amended the limited liability company agreement for Otay
Land Company to eliminate these approval rights and, as a result, the
Company has the ability to control Otay Land Company effective as of
September 20, 1999. Accordingly, Otay Land Company will be
consolidated in the Company's financial statements as of September
30, 1999.
2. In 1992, the Company filed for bankruptcy protection under Chapter 11
of the United States Bankruptcy Code. The Company emerged from
bankruptcy in 1995 pursuant to a plan of reorganization (the "Plan").
Leucadia Financial Corporation ("LFC"), an indirect wholly-owned
subsidiary of Leucadia, principally funded the Plan by purchasing a
$20,000,000 principal amount, 12% secured convertible note due 2003
(the "Convertible Note") and 2,700,000 shares of newly issued common
stock, par value $.01 per share ("Common Stock") of the Company. In
addition, LFC received 1,417,986 shares of Common Stock of the
Company under the Plan. These shares, together with the shares LFC
purchased, constituted 41.2% of the issued and outstanding Common
Stock of the Company following the bankruptcy.
3. In August 1998, in connection with the stock purchase agreements and
development management agreement referred to below, the Company and
LFC entered into an Amended and Restated Loan Agreement, pursuant to
which the Company and LFC restructured the outstanding Convertible
Note held by LFC. The Restructured Note has a principal amount of
approximately $26,462,000 (reflecting the original $20,000,000
principal balance of the Convertible Note, together with additions to
principal resulting from accrued and unpaid interest thereon to the
date of the restructuring, as allowed under the terms of the
Convertible Note), extends the maturity date from July 3, 2003 to
December 31, 2004, reduces the interest rate from 12% to 6% and
eliminates the convertibility feature of the Convertible Note.
Interest only on the Restructured Note is paid quarterly and all
unpaid principal is due on the maturity date. During the six-month
period ended June 30, 1999, interest of approximately $787,000 was
paid to LFC. As a result of the restructuring of the Convertible
Note, the Restructured Note was recorded at fair value and the
approximately $7,015,000 difference between such amount and the
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<PAGE>
carrying value of the Convertible Note was reflected as additional
paid-in capital. The $7,015,000 difference between the fair value of
the Restructured Note and the carrying value of the Convertible Note
will be amortized as interest expense over the term of the
Restructured Note using the interest method. Approximately $393,000
was amortized as interest expense during the six-month period ended
June 30, 1999.
4. In August and October 1998, in connection with the execution of the
development management agreement for San Elijo Hills (the
"Development Agreement") and the restructuring of the Convertible
Note, Leucadia entered into agreements to purchase, on or after July
5, 1999, an additional 46,557,826 shares of Common Stock for
aggregate consideration of $8,380,000. In 1998, Leucadia irrevocably
transferred all of the Common Stock that it beneficially owned,
together with the stock purchase agreements, to a trust (the
"Leucadia Trust") formed for the benefit of Leucadia shareholders of
record as of August 25, 1998 (the "Trust Beneficiaries"). The
Leucadia Trust currently holds the 41.2% of the Company's issued and
outstanding Common Stock that LFC acquired under the Plan, together
with the stock purchase agreements. Upon consummation of the
purchases under these stock purchase agreements, the Leucadia Trust
will beneficially own 89.6% of the issued and outstanding Common
Stock of the Company. Pursuant to the terms of the agreement
governing the Leucadia Trust, the Leucadia Trust will terminate on
the earlier of: (i) the date when all of the Company's Common Stock
and any rights remaining under the stock purchase agreements have
been distributed to the Trust Beneficiaries or (ii) December 31,
2001. Under the terms of the trust agreement, the Leucadia Trust is
required to distribute all of the Company's Common Stock that it owns
as promptly as practicable following the purchase of Common Stock
under the two stock purchase agreements and the effectiveness of a
registration statement filed with the Securities and Exchange
Commission.
5. Basic loss per share of Common Stock for all periods presented was
calculated by dividing the net loss by the 10,000,000 shares of
Common Stock outstanding for the periods.
Diluted loss per share of Common Stock was calculated as described
above. The number of shares used to calculate diluted loss per share
was 10,000,000 for 1999 and 1998. The calculation of diluted loss per
share does not include Common Stock equivalents of 46,557,826 and
54,400,000 for 1999 and 1998, respectively, which are antidilutive.
6. As of October 14, 1998, the Company and Leucadia formed Otay Land
Company. The Company initially contributed $10,000,000 as capital and
Leucadia contributed $10,000,000 as a preferred capital interest. The
Company also contributed $125,000 as capital in 1998 and $725,000
during the six-month period ended June 30, 1999. The Company is the
manager of Otay Land Company. Otay Land Company has acquired, for
approximately $19,500,000, approximately 4,800 acres of land which is
part of a 22,900 acre project located south of San Diego, California,
known as Otay Ranch. Distributions of net income from this investment
first will be paid to Leucadia until it has received an annual
cumulative preferred return of 12% on, and repayment of, its
preferred investment. Any remaining funds are to be distributed to
the Company.
7. Pursuant to administrative services agreements, LFC provides
administrative services to the Company, including providing the
services of two of the Company's three executive officers. Effective
March 1, 1999, the Company and LFC entered into a new three year
administrative services agreement pursuant to which the Company will
pay LFC an administrative fee of $296,101 for the first annual
period, with the fee for subsequent annual periods to be negotiated.
Fees paid by the Company to LFC totaled $148,000 for the six-month
period ended June 30, 1999.
7
<PAGE>
The Company rents office space and furnishings from a subsidiary of
Leucadia for a monthly amount equal to its share of the Leucadia
subsidiary's cost for such space and furnishings. For the six months
ended June 30, 1999, the Company accrued $90,000 in rental expense,
related to space provided by Leucadia or its affiliates, to the
Leucadia subsidiary.
8. On July 8, 1999, the Company received approximately $1,670,000 in
final payment of the common stock subscription and issued 46,557,826
shares of HomeFed Common Stock to the Leucadia Trust as described in
Note 4 above.
On July 15, 1999, the Company sold one of its three clustered housing
development sites at the Paradise Valley project for $350,000, less
closing costs. The book value of this site was approximately
$315,000.
In February 1999, one of the Company's consolidated partnerships
placed approximately $197,000 on deposit with a financial institution
in Salt Lake City, Utah to secure a standby letter of credit. The
letter of credit was issued to guaranty the partnership's obligation
to complete landscape, irrigation and fencing improvements at the
Paradise Valley project. This letter of credit expired on August 6,
1999 and the cash of approximately $197,000 was deposited in the
Company's operating account.
8
<PAGE>
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF INTERIM OPERATIONS.
The following should be read in conjunction with Management's Discussion and
Analysis of Financial Condition and Results of Operations contained in the
Company's 1998 10-K.
LIQUIDITY AND CAPITAL RESOURCES
For the six-month periods ended June 30, 1999 and 1998, net cash was used in
operating activities, principally to fund interest and general and
administrative expenses. The Company's principal sources of funds are dividends
or borrowings from its subsidiaries, any fee income earned from the San Elijo
Hills project and amounts received pursuant to the stock purchase agreements
described herein. The Company is dependent upon the cash flow, if any, from the
sale of real estate and management fees in order to pay its expenses, including
debt service payments.
The Company expects that its cash on hand, together with cash generated from lot
sales and the remaining purchase price of $1,670,000 paid to the Company in July
1999 pursuant to the August 1998 stock purchase agreement with Leucadia
described above, will be sufficient to meet its cash flow needs for the
foreseeable future. However, the Company's ability to provide services required
under the Development Management Agreement after 1999 will depend significantly
upon the receipt of fees under the Development Agreement as described below. If
at any time in the future the Company's cash flow is insufficient to meet its
then current cash requirements, the Company could sell 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 $26,500,000 borrowing from LFC,
it may be unable to obtain financing at favorable rates from sources other than
LFC.
The Development Agreement provides that the Company will receive certain fees in
connection with the project. These fees consist of marketing, field overhead and
management service fees. These fees are based on a fixed percentage of gross
revenues of the project, less certain expenses allocated to the project, and are
expected to cover the Company's cost of providing services under the Development
Agreement. The Development Agreement also provides for a success fee to the
Company out of the project's net cash flow, if any, as described below, up to a
maximum amount. Whether the success fee, if it is earned, will be paid to the
Company prior to the conclusion of the project will be at the discretion of the
project owner.
To determine "net cash flow" for purposes of calculating the success fee, all
cash expenditures of the project will be deducted from total revenues of the
project. Examples of "expenditures" for these purposes include land development
costs, current period operating costs, and indebtedness, either collateralized
by the project (approximately $31,483,000 at June 30, 1999) or owed by the
project's owner to Leucadia (approximately $45,912,000 at June 30, 1999)
(collectively "Indebtedness"). As a success fee, the Company is entitled to
receive payments out of net cash flow, if any, up to the aggregate amount of the
Indebtedness. The balance of the net cash flow, if any, will be paid the Company
and the project owner in equal amounts. However, the amount of the success fee
cannot be more than 68% of net cash flow minus the amount of the Indebtedness.
There can be no assurance, however, that the Company will receive any success
fee at all for this project. The Company believes that any success fee that it
may receive will be its principal source of net income earned through its
participation in the San Elijo Hills project.
As of August 14, 1998, the Company and LFC entered into an Amended and Restated
Loan Agreement that restructured the original Convertible Note held by LFC.,
originally issued by the Company in 1995 to fund its bankruptcy plan and the
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<PAGE>
related loan agreement. The restructured note, dated August 14, 1998 (the
"Restructured Note"):
o has a principal amount of approximately $26,500,000, which includes
additions to principal from accrued and unpaid interest on the
Convertible Note to the date of the restructuring, as permitted under
the terms of the Convertible Note.
o extends the maturity date from July 3, 2003 to December 31, 2004,
o reduces the interest rate from 12% to 6%, and
o eliminates the convertibility feature of the Convertible Note.
The Company pays interest only on the Restructured Note on a quarterly basis.
The principal of the Restructured Note is not due to be repaid until December
31, 2004. During the six-month period ended June 30, 1999, the Company paid
$787,000 in interest on the Restructured Note to LFC.
In the first quarter of 1999, the Company sold the remaining 75 residential lots
at the Paradise Valley project for $2,250,000, less closing costs. The Company
has certain continuing obligations with respect to this project, including the
obligation to construct a recreation center. The Company estimates that
construction of the recreation center for the Paradise Valley community will be
completed at a cost of approximately $1,100,000. This obligation is
collateralized by a $1,000,000 collateralized letter of credit. The Company
anticipates that construction of the recreation center will begin in 1999.
In the third quarter of 1999, the Company sold one of its three clustered
housing development sites at the Paradise Valley project for $350,000, less
closing costs.
In February 1999, one of the Company's consolidated partnerships placed
approximately $197,000 on deposit with a financial institution in Salt Lake
City, Utah to secure a standby letter of credit. The letter of credit was issued
to guaranty the partnership's obligation to complete landscape, irrigation and
fencing improvements at the Paradise Valley project. This letter of credit
expired on August 6, 1999 and the cash of approximately $197,000 was deposited
in the Company's operating account.
In connection with an indemnity agreement to a third party surety, a subsidiary
of the Company is required to (1) maintain either a minimum net worth of
$5,000,000 and a minimum cash balance of $400,000 or (2) provide an irrevocable
letter of credit. The subsidiary of the Company entered into this indemnity
agreement in 1990 in connection with the construction of infrastructure
improvements in a development located in LaQuinta, California. Based upon
current estimates, the amount of the letter of credit required to satisfy this
obligation would be approximately $460,000. The Company has not elected to
deliver this letter of credit, although it may choose to do so in the future if
it determines that the minimum net worth requirement restricts its operating
flexibility.
In October 1998, the Company and Leucadia formed Otay Land Company, LLC. Through
June 30, 1999, the Company invested $10,850,000 as capital and Leucadia invested
$10,000,000 as a preferred capital interest. The Company is the manager of Otay
Land Company. In 1998, Otay Land Company purchased approximately 4,800 acres of
land that is part of a 22,900 acre project located south of San Diego,
California, known as Otay Ranch, for approximately $19,500,000. Distributions of
net income from this investment first will be paid to Leucadia until it has
received an annual cumulative preferred return of 12% on, and repayment of, its
preferred investment. Any remaining funds will be distributed to the Company.
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RESULTS OF OPERATIONS
Sales of residential properties increased in the six-month period ended June 30,
1999 compared to the same period in 1998. This increase resulted from the
Company's 1999 sale of the remaining 75 residential lots in the Paradise Valley
project, compared to the sale of 20 residential lots in that project in 1998.
Cost of sales recorded during these periods reflects the level of sales
activity.
The provision for losses on real estate investments includes $225,000,
reflecting an increase in the Company's estimated cost to complete the
recreational center for the Paradise Valley Community.
Interest expense for the three-month and six-month periods ended June 30, 1999
reflects $396,000 and $787,000, respectively, paid to LFC on the Restructured
Note and $200,000 and $393,000, respectively, resulting from the amortization of
a portion of the difference between the fair value of the Restructured Note and
the carrying value of the Convertible Note. Interest expense for the three-month
and six-month periods ended June 30, 1998 reflects interest of $780,000 and
$1,552,000 due on the Convertible Note which was paid by the Company.
General and administrative expenses increased in both the three-month and
six-month periods ended June 30, 1999 as compared to the same periods in 1998
due to the increased operating activities in connection with the San Elijo Hills
project and the Otay Ranch project, including opening an office in Carlsbad,
California.
Income tax expense for all periods presented relates to state franchise taxes.
The Company has not recorded federal income tax benefits for its operating
losses due to the uncertainty of sufficient future taxable income which is
required in order to record such tax benefits.
THE YEAR 2000 ISSUE
The year 2000 issue is the result of computerized systems being written to store
and process the year portion of dates using two digits rather than four digits.
As a consequence, date-sensitive systems may fail or produce erroneous results
on or before January 1, 2000 because the year 2000 will be interpreted
incorrectly.
All of the Company's key software applications are purchased from mass-market
software companies and, based on literature provided by software manufacturers,
the Company believes that this software is designed to be year 2000 compliant.
The Company's computer hardware systems are generally new and designed to be
year 2000 compliant. The Company has engaged a consultant to test its systems to
determine their year 2000 compliance. If systems are found not to be year 2000
compliant, they will be either repaired or replaced. To date, the Company has
incurred costs of less than $5,000 in its year 2000 compliance efforts and does
not anticipate making material expenditures in the future.
Based upon its year 2000 risk assessment work performed thus far, the Company
believes the most likely year 2000 related failures would be related to a
disruption of materials and services of loss of data or plans provided by third
parties. The Company is assessing all third parties with which the Company has
material relationships to determine their compliance with year 2000 issues. The
Company has begun to contact suppliers with respect to their year 2000
compliance and expects this inquiry to be completed by the fourth quarter of
1999. Although the Company does not expect that these disruptions would have a
material adverse effect on its financial condition or results of operations, the
Company cannot assure you that its belief is correct or that its risk
assessments are, in fact, accurate. There can be no assurance that the Company's
vendors, suppliers and other parties with whom it does business will
successfully resolve their own year 2000 problems, if any. In the event of any
such failures or other year 2000 failures, there can be no assurance that there
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will not be a material adverse effect on the Company's financial condition or
results of operations.
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 forward-looking statements are made pursuant to the safe-harbor
provisions of the Private Securities Litigation Reform Act of 1995. Such
statements may relate, but are not limited, to projections of revenues, income
or loss, capital expenditures, plans for growth and future operations (including
year 2000 compatibility), competition and regulation as well as assumptions
relating to the foregoing. 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. The factors that could cause actual results to
differ materially from those suggested by any such statements include, but are
not limited to, those discussed or identified from time to time in the Company's
public filings, including general economic and market conditions, changes in
domestic laws, regulations and taxes, changes in competition and pricing
environments, regional or general changes in asset valuation, the occurrence of
significant natural disasters, prevailing interest rate levels, the difficulty
in identifying hardware and software that may not be year 2000 compliant, the
lack of success of third parties to adequately address the year 2000 issue, and
changes in the composition of the Company's assets and liabilities through
acquisitions or divestitures. Undue reliance should not be placed on these
forward-looking statements, which are applicable only as of the date hereof. All
subsequent written and oral forward-looking statements attributable to the
Company or persons acting on its behalf are expressly qualified in their
entirety by these factors and the cautionary statements contained throughout
this report. Additional information on factors that may affect the business and
financial results can be found in the Company's other filings with the SEC. All
forward-looking statements should be considered in light of these risks and
uncertainties. The Company assumes no responsibility to update forward-looking
statements made in this report unless otherwise required by law.
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SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this amendment to be signed on its behalf by the
undersigned thereunto duly authorized.
HOMEFED CORPORATION
/s/ CORINNE A. MAKI
-----------------------------------------------
CORINNE A. MAKI, Treasurer
(Authorized Signatory and Principal Financial
and Accounting Officer)
Date: September 21, 1999
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