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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM 10-K

[ X ] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934 [FEE REQUIRED]


For the fiscal year ended December 31, 1993

OR

[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934 [NO FEE REQUIRED]

For the transition period from to

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, California 91355
(Address of principal executive offices) (Zip Code)

Registrant's telephone number, including area code (805) 255-4000

SECURITIES REGISTERED PURSUANT TO SECTION 12(b) OF THE ACT:



Name of each exchange
Title of each class on which registered
----------------------- ---------------------------

Depositary Receipts New York Stock Exchange
Pacific Stock Exchange


SECURITIES REGISTERED PURSUANT TO SECTION 12(g) OF THE ACT: None

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
----- -----

Indicate by check mark if disclosure of delinquent filers pursuant to
Item 405 of Regulation S-K is not contained herein, and will not be contained,
to the best of Registrant's knowledge, in definitive proxy or information
statements incorporated by reference in Part III of this Form 10-K or any
amendment to this Form 10-K. X
-----

The aggregate market value of depositary receipts held by
non-affiliates based upon the closing price of such depositary receipts on the
New York Stock Exchange on February 28, 1994, was $464,726,818.
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PART I

ITEM 1. BUSINESS

INTRODUCTION

The Newhall Land and Farming Company (a California Limited
Partnership) ("the Company" or "the Partnership") is engaged in the development
of residential, industrial and commercial real estate and in agriculture and is
one of California's largest land resource companies. The interests in the
Company (other than those held by the general partners) are represented by
transferable Depositary Units listed on the New York and Pacific Stock
Exchanges under the ticker symbol NHL. The Company was reorganized from a
corporation to a limited partnership on January 8, 1985. The predecessor
corporation was established in 1883 by the family of Henry Mayo Newhall and the
shares of the corporation were listed on the New York Stock Exchange in 1970.

The Company's primary business is developing master-planned
communities. Since 1965, the Company has been concentrating its resources on
developing the new town of Valencia on 10,000 acres of the 37,500-acre Newhall
Ranch in accordance with a master plan designed to enhance the value of
developed and undeveloped land. Preliminary planning is underway for another
master-planned community on the 12,000 acres of the Newhall Ranch remaining in
Los Angeles County. In 1993, the Company exercised an option on approximately
700 acres and purchased 160 acres in Scottsdale, Arizona, for a third
master-planned community, with options remaining on an additional 1,400 acres.
The master plan and zoning for the new planned community, McDowell Mountain
Ranch, was approved by the Scottsdale City Council for development of over
4,000 homes and 70 acres of commercial property on a 3,200-acre site.
Approximately 900 acres have been dedicated to the City of Scottsdale for open
space.

Valencia, one of the nation's most valuable landholdings, is located
in the Santa Clarita Valley, approximately 30 miles north of downtown Los
Angeles and within 10 miles of the San Fernando Valley which has a population
of over 1.3 million people. The Company's Newhall Ranch landholdings are
bisected by Interstate 5, California's principal north-south freeway, and four
major freeways intersect Interstate 5 within ten minutes of Valencia.

During the 1960s and 1970s, residential development dominated the
activity in Valencia. In the 1980s, industrial development expanded eight-fold
and the Santa Clarita Valley was the fastest growing area of unincorporated Los
Angeles County. In the 1990s, Valencia is emerging from a residential and
industrial suburb of Los Angeles to become the regional center for North Los
Angeles County. Regional centers generate long-term increases in land values
with the more intensive development of industrial and commercial business parks
and shopping centers, along with a broader range of single-family and
multi-family residential projects.

The Valencia Town Center regional shopping mall, a joint venture with
JMB/Urban Valencia Limited Partnership, celebrated its first anniversary in
September, 1993. The mall's first phase development





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includes three department stores, space for 110 mall shops, a food court, two
sit-down restaurants and a 10-screen theater complex in 790,000 square feet of
space. In future years, it is expected that the shopping center will be
expanded to a total of 1.4 million square feet to include six department stores
and additional mall space.

Valencia Town Center, with no competitive regional shopping center
within 20 miles, has become the primary shopping and business hub for the
entire Santa Clarita Valley and draws shoppers from the Antelope Valley,
eastern Ventura County and northern San Fernando Valley. The Valencia Town
Center trade area is estimated to include 350,000 people with an average
household income 60% above the national average.

A commuter rail line linking the Santa Clarita Valley, home of
Valencia, with downtown Los Angeles began operations in October, 1992. The
commuter station and parking lot are located about two miles from Valencia Town
Center, and within a ten-minute drive for all Valencia residents. Also, the
bus system within the Santa Clarita Valley has been expanded, with an entirely
new fleet of buses placed in service.

Major damage to freeways from the earthquake which struck the San
Fernando Valley on January 17, 1994 is restricting traffic between Greater Los
Angeles and the Santa Clarita Valley where Valencia is located. Reconstruction
is underway and CalTrans has announced it intends to have the Interstate 5
freeway fully repaired by mid-June. For additional discussion, see the "Impact
of Earthquake" section of Item 7 - Management's Discussion and Analysis of
Financial Condition and Results of Operations.

In the late 1980s, the Company adopted the strategy of selling farm
properties with little or no potential for development and redeploying the
proceeds into real estate operations. As of December 31, 1993, more than
17,000 acres of non-strategic farm land have been sold. The Company plans to
market for sale its remaining 14,800 acres of non-strategic farm land during
1994. The Company intends to retain the 37,500-acre Newhall Ranch where
development is continuing and the 38,800-acre Suey Ranch where development will
be considered in the future. Also, the 14,000-acre New Columbia Ranch will be
retained for its substantial surface and underground water supplies.

Financial information concerning the Company's business segments
appears in Note 11 of the Notes to Consolidated Financial Statements in this
Annual Report. At December 31, 1993, the Company employed 263 persons
including 18 classified as seasonal/temporary.

COMPETITION

The sale and leasing of industrial, residential and commercial real
estate is highly competitive, with competition from numerous and varied
sources. The degree of competition is affected by such factors as the supply
of real estate available comparable to that sold and leased by the Company and
the level of demand for such real estate. In turn, the level of demand is
affected by interest rates and general economic conditions. The Company is not
dependent upon any one customer for a significant portion of its revenues.





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GOVERNMENTAL REGULATION AND ENVIRONMENT

The governmental review process through which landholdings must go
before real estate projects are approved and can be built by the Company is
referred to as the entitlement process. This process has become increasingly
complex and projects often require several years to pass through the
requirements of various governmental agencies.

In developing its projects, the Company must obtain the approval of
numerous governmental authorities regulating such matters as permitted land
uses, levels of population, density and traffic, and the provision of utility
services such as electricity, water and waste disposal. In addition, the
Company is also subject to a variety of federal, state and local laws and
regulations concerning protection of health and the environment. This
governmental regulation affects the types of projects which can be pursued by
the Company and increases the cost of development and ownership. The Company
devotes substantial financial and managerial resources to complying with these
requirements and dealing with this process. To varying degrees, certain
permits and approvals will be required to complete the developments currently
being undertaken, or planned, by the Company. In addition, the continued
effectiveness of permits already granted is subject to factors such as changes
in policies, rules and regulations and their interpretation and application.
The ability of the Company to obtain necessary approvals and permits for its
projects is often beyond the Company's control and could restrict or prevent
development of otherwise desirable properties. (See also Item 1 - Community
Development)

APPRAISAL OF REAL PROPERTY ASSETS

Annually, the Company obtains appraisals of substantially all of its
real property assets. The independent firm of Buss-Shelger Associates, MAI
real estate appraisers, appraised the market value of the Company's real
property assets to be $897,100,000 at December 31, 1993. The appraised assets
had an aggregate net book value of $242,571,000 at December 31, 1993 and did
not include oil and gas assets, water supply systems, cash and cash equivalents
and certain other assets.

For the purpose of the appraisals, market value was defined as the
most probable price in terms of money which a property should bring in a
competitive and open market under all conditions requisite to a fair sale, the
buyer and seller each acting prudently, knowledgeably and assuming the price is
not affected by undue stimulus. A significant portion of the appraised real
property assets is located on the Newhall Ranch and currently is undeveloped.
The appraised value of undeveloped assets reflects the discount or developer's
profit necessary to provide a third-party buyer with the incentive to purchase
and undertake the risks inherent in the development process.

The Company believes that its strategy of selling primarily finished
parcels on which the development process is substantially complete, or
retaining land for development of building improvements, has enabled the
Company to realize the fullest value from its various assets. The Company
intends to continue the development of Valencia and the surrounding area.





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Entitlements and the continuing development of Valencia enhance the
appraised value of the Company's land assets. Although raw land increases in
value as development opportunities arise, the most significant increases occur
when necessary land use entitlements, including zoning and mapping approvals
are obtained from city and county governments.

The appraised values of the Company's land and income-producing
properties in the Valencia master-planned community have increased from $222
million in 1984, the first year independent property appraisals were obtained,
to $745 million in 1993, despite declines in recent years. On a per unit
basis, the Company's net appraised value has increased from $11.74 to $21.04
over the same period. A summary of appraised values of properties owned for
each of the last five years as of December 31 follows (the appraisals were
performed by independent appraisers except as noted):



1993 1992 1991 1990 1989
--------------------- ----------- ----------- ---------- ----------
% % % % %
$ in millions, except per unit Acres Amt Chg Amt Chg Amt Chg Amt Chg Amt Chg
- ------------------------------ ------ ----- --- ----- --- ----- --- ----- --- ----- ---

Valencia and nearby properties 8,660 $ 472 (4)% $ 493 (8)% $ 535 (8)% $ 582 (8)% $ 630 21 %
Income-producing real estate 800 273 5 260 16 225 11 202 (7) 217 15
------- ---- --- --- --- --- --- --- --- --- ---
Total Valencia area properties 9,460 745 (1) 753 (1) 760 (3) 784 (7) 847 19
West Newhall Ranch and other
community development 67,820 98 15 85 (5) 89 (1) 90 6 85 6
properties
Agricultural properties not 28,810 48 (14) 56 (29) 79 (2) 81 (8) 88 2
included above
Mortgage and other debt at
book carrying value (174) 32 (132) 67 (79) 32 (60) 94 (31) (48)
All other, net, not indepen-
dently appraised 56 19 47 114 22 (39) 36 (69) 115 (19)
------- ------ --- ------ ---- ------ --- ------ ---- ------ ---
NET APPRAISED VALUE 106,090 $ 773 (4)% $ 809 (7)% $ 871 (6)% $ 931 (16)% $1,104 15 %
======= ====== === ====== ==== ====== === ====== ==== ====== ===
Number of partnership units
outstanding ( 000's ) 36,757 -- 36,760 -- 36,755 -- 36,755 (5)% 38,707 (2)%
====== === ====== ==== ====== === ====== ==== ====== ===
APPRAISED VALUE PER
PARTNERSHIP UNIT $21.04 (4)% $22.01 (7)% $23.70 (6)% $25.33 (11)% $28.52 18 %
====== === ====== ==== ====== === ====== === ====== ===


Appraised values are judgments. Land and property appraisals are an estimate
of value based on the sale of comparably located and zoned real estate or on
the present value of income anticipated from commercial properties. There is
no assurance that the appraised value of property would be received if any of
the assets were sold. Refer to the "Impact of Earthquake" section of Item 7 in
this Annual Report for a discussion of the impact of the earthquake which
occurred subsequent to the 1993 appraisal. Certain reclassifications within
categories have been made to prior periods' amounts to conform to the 1993
presentation, however, prior periods' amounts have not been restated to reflect
land sale activity.

REAL ESTATE

The Company is developing the community of Valencia on the Newhall
Ranch in Los Angeles County, California. Valencia's development is based on a
master plan with residential and industrial developments forming the basic
community structure supported by shopping centers, schools, colleges, hospital
and medical facilities, golf courses, professional offices and a range of
recreational amenities. A system of landscaped and lighted pedestrian
walkways, known as paseos, provide most residents with access to schools,
retail, parks and recreation centers avoiding automobile traffic. Since 1967,
over 10,000 homes and apartments have been built in Valencia by the Company and
others. At the end of 1993, the population of Valencia was estimated to exceed
30,000. The Company also develops and operates a growing portfolio of
commercial properties and provides building-ready sites for sale to industrial
and commercial developers and users.

RESIDENTIAL DEVELOPMENT AND LAND SALES

The transition from the Company's internal home construction to the
sale of ready-to-build lots to merchant builders was completed in 1993. During
the year, a total of 30 of the Company's own homes closed escrow and merchant
builders closed escrow on 137 homes.

In 1993, the sale of 62 residential lots was completed. At December
31, 1993, four major home builders were constructing homes in Valencia on land
purchased from the Company. They include Pardee, a division of Weyerhaeuser;
M.J. Brock, a division of Ryland Homes; Warmington and Bramalea. Also
completed in 1993, was the sale of 220 acres at the Cowell Ranch to the City of
Walnut Creek.

The Company has begun to engage national and regional builders in the
construction and sale of single and multi-family homes through a variety of
joint-venture arrangements. These development partnerships, initiated in 1993,
are designed to provide additional profit participation, more rapid residential
development, entry into more affordable housing markets and enable innovative
builders to obtain financing in today's tight real estate lending environment.
The Company's first residential joint venture is with EPAC Communities, Inc.,
for 65 homes, of which 21 closed escrow in 1993.





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At December 31, 1993, a total of 83 residential lots in Valencia
Northpark, the Company's newest residential community, were in escrow to a
merchant builder. The Company's ability to make additional lot sales in 1994
will be dependent upon market conditions, absorption of lots previously sold to
builders and completion of necessary land development and infrastructure
improvements.

There is substantial interest by merchant builders and the Company is
negotiating sales contracts for residential lots and superpads in the Company's
newest planned community, McDowell Mountain Ranch, in Scottsdale, Arizona. The
Company's ability to complete these initial sales is dependent upon finalizing
public financings with the City of Scottsdale and completing necessary land and
infrastructure improvements.

INDUSTRIAL DEVELOPMENT AND LAND SALES

The Company develops the infrastructure and provides building-ready
sites to developers and users. Valencia's location just 30 minutes from
downtown Los Angeles on Interstate 5, California's major north-south freeway,
provides an attractive environment for industrial, commercial, service,
distribution and entertainment businesses. The Company's first business park,
Valencia Industrial Center, is currently home to over 500 companies and employs
more than 14,000 people. At December 31, 1993, the Company had over 650 acres
entitled industrial land, primarily in the Company's new business park,
Valencia Commerce Center. With no competitive large land parcels available in
Los Angeles County, these entitlements place the Company in a favorable
position as the economy and real estate markets improve.

The California real estate recession and the inability of developers
to obtain financing continued to inhibit the sale of industrial and commercial
land during 1993. Some improvement was seen in the fourth quarter, however,
when five parcels closed escrow bringing the total closings to seven for the
year. Escrow closings included two parcels in Valencia Auto Center totaling
8.2 acres, two church sites totaling 10.5 acres, a .7-acre commercial lot, 8.5
acres for a distribution center and a 2-acre parcel to the California
Department of Transportation.

Future industrial land sales will be concentrated in the 1,600-acre
Valencia Commerce Center and expansion of the nearly completed Valencia
Industrial Center. With Los Angeles County's northward expansion into the
Santa Clarita Valley and beyond, the U.S. Postal Service chose Valencia
Commerce Center for its new distribution center. The postal center, currently
under construction, will bring 1,500 jobs to Valencia and is expected to make
the Center particularly attractive to companies involved in mailing operations.
At December 31, 1993, no industrial or commercial land sales were in escrow.

COMMUNITY DEVELOPMENT

The Company has continued to focus financial and management resources
on planning and entitlements during the recession in order to ensure an
adequate supply of entitled land as the California economy and real estate
markets improve. The Company's success in obtaining entitlements in prior
years contributed to a 21% decrease in entitlement





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expenses in 1993. The Company is committed to continuing its entitlements
efforts in the future and does not anticipate a further reduction in
entitlement expenses in 1994. For additional discussion of community
development and the entitlement process, see Item 1 - Governmental Regulation
and Environment.

Approvals were granted in 1993 for 192 multi-family homes and 22 acres
of commercial development in Valencia. At December 31, 1993, the Company had
over 5,600 residential lots approved in the Valencia area including 1,600 lots
with general plan land use approval. In March, 1993, the master plan and
zoning for a new planned community, McDowell Mountain Ranch, were approved by
the Scottsdale City Council for development of over 4,000 homes and 70 acres of
commercial property. Final plans and environmental factors are subject to
review by government agencies before development can proceed. Significant land
development and infrastructure improvements remain to be completed before the
Company can deliver the majority of approved lots for sale.


COMMERCIAL REAL ESTATE DEVELOPMENT

The Company develops and operates commercial properties in the
Valencia area for the production of income. The Company's growing and
diversified commercial portfolio is expected to continue to provide a stable
source of income and cash flow throughout economic cycles as well as
appreciation in property value.

Valencia Town Center regional shopping mall, the Company's largest
income property, celebrated its first anniversary in September, 1993. The
Center includes over 100 mall shops, three department stores, a food court, a
10-screen theater and two sit-down restaurants in over 790,000 square feet of
space. At the end of 1993, tenant space in the center was 94% leased or
committed.

Castaic Village, the Company's newest neighborhood shopping center
which opened in November, 1992, added PayLess Drugstores, the second anchor
tenant, and a Burger King in 1993. Construction is complete on 12,800 square
feet of retail space in the 130,000-square-foot shopping center and leasing is
underway.

During 1993, the Company opened a 30,000-square-foot telecommuting
center in Valencia Industrial Center. The facility, wired with fiber optic and
traditional cabling for voice, video and data transmission, is the largest
telecommuting center in California and reflects a number of trends taking place
in the work environment.

A new program for developing build-to-suit industrial and commercial
facilities was launched in 1993 with the signing of an agreement with ITT
Corporation to construct a 175,000-square-foot facility on approximately 10
acres in Valencia Commerce Center. ITT will move its Aerospace Controls and
Neo-Dyn Operations with 400 employees from their current San Fernando Valley
locations. Earlier in the year, the Company entered into a long-term lease
agreement to construct a 7,000-square-foot facility for Trader Joe's, a popular
specialty food retailer with stores throughout Southern California. Both of
these build-to-suit properties are scheduled to be completed in 1994.





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Valencia Marketplace, a high-volume retail complex or "power center"
to be built adjacent to Interstate 5, is in the entitlement process. The
850,000-square-foot facility, a joint venture with Riley/Pearlman/Mitchell, is
expected to break ground in 1994 with completion in 1995. Additional future
plans include community shopping centers, apartment projects, restaurants,
commercial recreational facilities, office buildings and, eventually,
additional hotels. The timing for development of future projects will be
dictated by market conditions.

For a description of the commercial properties, see Item 2 -
Properties.

NATURAL RESOURCES DIVISION

The Natural Resources division includes Valencia Water Company, a
wholly-owned subsidiary that supplies water to Valencia and some adjacent
developments, and the Energy operation which grants leases, seismic options and
similar rights to others on the Company's properties while ensuring that oil
and gas activities do not interfere with development plans.

Valencia Water Company is a regulated public utility serving over
14,800 metered customers in the Valencia area. The water supply for the
service area is obtained from wells on the Newhall Ranch owned by Valencia
Water Company and by purchases from the California State Water Project. In
1993, approximately 50% of Valencia's water was supplied through ground
sources, compared with almost 60% in 1992.

In December, 1993, federal officials proposed specific measures for
the protection of fish and wildlife in the Sacramento-San Joaquin Delta. If
adopted, these measures would reduce the amount of water exported from the
Delta and would likely cause drastic year to year variations in State Water
Project supply. However, the Company's supply of groundwater on the Newhall
Ranch is adequate to meet current water demand and is expected to be adequate
for future residential requirements when the land is developed for real estate
projects.

The Energy operations consist primarily of royalty interests in oil
and gas assets on the Company's ranches. The Company has royalty interests in
209 oil wells and 16 gas wells located on the Newhall and Meridian Ranches.

AGRICULTURE

The Company's agricultural operations consist primarily of farming
operations. Approximately 65,000 acres of ranch land at the Suey and Newhall
Ranches not suitable for cultivation are leased out for cattle grazing. In
line with the Company's strategy of selling farm properties with little or no
potential for development and redeploying the proceeds into real estate
operations, a total of 3,900 acres of farm land at the Capay/Wheatland, Merced
and Meridian Ranches was sold in 1993.

The Company will retain the Newhall Ranch where development is
continuing, the Suey Ranch where development will be considered in the future
and the New Columbia Ranch where there exists substantial surface and
underground water supplies. The Company plans to market for sale





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its remaining non-strategic farm land in 1994 consisting of approximately
14,800 acres at December 31, 1993.

FARMING

Large scale, highly mechanized farming operations are conducted on
five of the Company's ranches. Labor intensive crops are generally grown by
tenants to whom land is leased on both cash and percentage-of-crop terms. Of
the Company's land devoted to farming, 66% is leased to others. Approximately
one-third of the Company's farm crop is marketed through agricultural
cooperatives. The remainder, such as sugar beets, grapes, alfalfa and wheat,
is marketed directly by the Company.

The Company's ranches supply most of their water through underground
sources and are not dependent on state or federal water projects. The Company
continues to improve conservation practices to minimize the cost of irrigation
and the amount of water used.

The principal agricultural properties include the Meridian, Merced,
and New Columbia Ranches, located in the Sacramento and San Joaquin Valleys,
and the Newhall and Suey Ranches. During the calendar year 1993, over 20
different crops were raised by the Company and its tenants.

The following table shows the approximate planted acreage of significant crops
during 1993:



Crop Acreage Crop Acreage Crop Acreage
- ---- ------- ---- ------- ---- -------

Alfalfa 3,076 Corn 310 Oranges 844
Almonds 145 Cotton 7,742 Rice 818
Avocados 107 Grapefruit 58 Sudan Grass 265
Barley 1,698 Grapes 678 Safflower 2,403
Beans 107 Lemons 447 Tomatoes 3,336
Carrots 693 Melons 1,253 Vegetables 1,129
Christmas Trees 70 Oats 136 Wheat 4,264


ITEM 2. PROPERTIES

LAND

Listed below is the location and acreage of properties owned by the Company at
December 31, 1993:



Ranch State County Acreage
- ----- ------ ------- -------

Meridian California Sutter/Colusa 5,370
Cowell California Contra Costa 110
Merced California Merced 9,440
New Columbia California Madera 14,000
Suey California Santa Barbara/San Luis Obispo 38,800
Newhall California Los Angeles/Ventura 37,490
-------
105,210
McDowell Mountain Arizona Maricopa 880(1)
-------
106,090
=======


(1) An additional 1,430 acres are under long-term option.

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PLANTS AND BUILDINGS

Agriculture - Various buildings located on five farming operations in
California and office and maintenance buildings located in Dixon, California.

Commercial Real Estate - Listed below is the location, square footage and
anchor tenants of commercial properties owned by the Company at December 31,
1993. Other commercial properties not shown in the table include various
commercial, industrial and restaurant buildings. The commercial properties are
leased to 206 tenants, not including apartment complexes.



Gross
Retail Centers Date Open Sq. Ft. Anchor Tenants
- -------------- --------- ---------- --------------

Valencia Town Center 1992 790,000 Robinsons-May, JC Penney, Sears
Castaic Center 1992 91,800 Ralphs, PayLess Drugstores
River Oaks 1987 258,600 Mervyn's, Target
Bouquet Center 1985 149,760 Hughes, Clark Drugs





Office & Mixed Date Open/ Gross
Use Projects Acquired Sq. Ft. Anchor Tenants
- -------------- -------- ------- --------------

City Center Office Bldg 1991 44,000 Bank of America
Orchard Plaza 1989 17,400 Newhall School District
Valley Business Center 1987 56,800
Headquarters Building 1978 59,300






Apartment Complexes # of Units
- ------------------- ----------

Portofino 1989 216
Northglen 1988 234
Stonecreek 1985 208



Valencia Water Company - 14 distribution reservoirs, 14 booster pumping
stations, approximately 200 miles of pipeline and other utility facilities.

All of the commercial real estate properties and the properties of
Valencia Water Company are located in and around Valencia, California. All
water utility plant and buildings are owned by the Company. A $60 million
mortgage is secured by the Portofino, Northglen and Stonecreek apartment
complexes, River Oaks and Bouquet community shopping centers, and the Company's
headquarters building. For additional information concerning encumbrances
against Company properties, refer to Note 8 of the Notes to Consolidated
Financial Statements in this Annual Report.

For a discussion of the impact of the January 17, 1994 earthquake on
the Company's properties, see the "Impact of Earthquake" section of Item 7 -
Management's Discussion and Analysis of Financial Condition and Results of
Operations.

ITEM 3. LEGAL PROCEEDINGS

The Company is involved in litigation and various claims, including
those arising from its ordinary conduct of business. Management is of





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the opinion that the ultimate liability from this litigation will not
materially affect the Company's consolidated financial condition.



ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

None.





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PART II

Item 5. MARKET FOR THE REGISTRANT'S DEPOSITARY UNITS AND RELATED SECURITY
HOLDER MATTERS


MARKET PRICE AND DISTRIBUTION DATA



Market Price Distributions
------------------------------------------------------ ---------------------------
Years ended December 31, Years ended December 31,
------------------------------------------------------ ---------------------------
1993 1992 1993 1992
-------------------------- ------------------------ ------------ -----------
Per unit High Low High Low
- --------- ---------- ----------- --------- ----------

First quarter $17 1/2 $13 1/2 $20 3/8 $17 5/8 $.10 $.20
Second quarter 17 1/4 13 5/8 19 5/8 15 1/8 .10 .20
Third quarter 15 3/8 13 5/8 15 3/4 12 .10 .10
Fourth quarter 16 14 14 3/4 12 .10 .10
---- ----
Total distributions $.40 $.60
==== ====
Year's high and low 17 1/2 13 1/2 20 3/8 12



The Company's partnership units are traded on the New York and Pacific Stock
Exchanges under the ticker symbol NHL and, at December 31, 1993, the Company
had approximately 1,800 unitholders of record. The Company has paid
uninterrupted quarterly cash distributions since 1936. The declaration of any
distribution, and the amount declared, is determined by the Board of Directors,
taking into account the Company's earnings, cash requirements, financial
condition and prospects.


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Item 6. SELECTED FINANCIAL DATA







Years ended December 31,
---------------------------------------------------------------
In thousands, except per unit 1993 1992 1991 1990 1989
- ----------------------------- -------- -------- -------- -------- --------

Revenues $105,452 $128,182 $150,762 $192,886 $234,450
Operating income 28,754 31,836 43,420 48,664 81,468
Net income 12,797 17,211 30,085 38,378 68,723
-------- -------- -------- -------- --------
Per partnership unit:
Net income $ .35 $ .47 $ .82 $ 1.02 $ 1.74
Distributions:
Quarterly and year-end additional .40 .60 .80 .80 .70
Special -- -- -- -- .15
Partners' capital 3.03 3.08 3.20 3.18 4.12
-------- -------- -------- -------- --------
Total assets $359,898 $323,082 $280,575 $265,406 $279,645
Total debt and other long-term obligations 207,571 160,458 106,271 86,206 52,960
Partners' capital 111,279 113,049 117,785 116,947 159,442
Average units utilized in computing
net income per unit 36,790 36,796 36,831 37,543 39,488
-------- -------- -------- -------- -------



See notes to consolidated financial statements


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ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS

Years ended December 31, 1993, 1992 and 1991

LIQUIDITY AND CAPITAL RESOURCES

The Company ended 1993 with $39.6 million in cash and cash equivalents, an
increase of $28.8 million for the year. Contributing to the Company's strong
cash position was a $30 million seven-year unsecured loan at 6.9% obtained from
a major insurance company in December, 1993 and positive cash flow generated by
operations. Also during the year, the Company expanded its lines of credit by
$31 million to $69 million at December 31, 1993, providing the Company with
over $100 million in credit and cash available to fund future operations. No
debt was incurred against raw land or land under development in Valencia.

Cash flow in 1993 was adequate to maintain quarterly distributions of 10 cents
per partnership unit, fund on-going development projects, and end 1993 with no
short-term borrowings outstanding. The Company believes its operations and
available credit are sufficient to provide the cash required to finance future
operations and enable it to take advantage of new development opportunities.

There are no material commitments for capital expenditures other than in the
ordinary course of business. The Company plans to spend approximately $30
million for capital additions in 1994 primarily for construction of commercial
income properties subject to supportive economic and market conditions. Also,
the Company is actively searching for additional large landholdings with
development potential. At December 31, 1993, no specific land parcels had been
identified.

OPERATING ACTIVITIES: Cash provided from operating activities during 1993
included the sale of 3,900 acres of farm land and the sale of 220 acres at the
Cowell Ranch. These sales were for $12.9 million cash and $2.5 million in
notes receivable secured by the properties sold.

An increase in inventory expenditures in 1993 was related primarily to land
development and infrastructure expenditures for pending and future land sales
in the Valencia area. Also, in 1993, approximately 900 acres of land were
purchased with long-term seller financing for McDowell Mountain Ranch, a new
master-planned community in Scottsdale, Arizona. The Company anticipates an
increase in land development and infrastructure activity in 1994 for new
Valencia area and McDowell Mountain Ranch residential projects.

The Company has been providing financing for residential and other property
sales in Valencia due to the difficulty buyers have been encountering in
obtaining bank loans. Contracts generally provide that Newhall receive at
least 25 percent in cash upon close of escrow, with the balance represented by
a note receivable secured by the property sold and due within one year. In
1993, the Company accepted $8.9 million in notes receivable and collected notes
receivable of $22.2 million relating to prior land sales. In 1992, the Company
accepted $29 million and collected $10.7 million in notes receivable.

Deferred revenues of $11.2 million were recognized in 1993 from land





13
15
sales in prior years. At December 31, 1993, $1.7 million in deferred revenues
remained to be recognized in future periods as the Company completes required
site development, landscape and amenity work. In 1992, $8.0 million in
deferred revenues were recognized from land sales in prior years and, at the
end of 1992, $11.6 million remained to be recognized. Recognition of deferred
revenues has no impact on the Company's cash position.

INVESTING ACTIVITIES: Capital expenditures totaled $9.5 million in 1993 and
included $4.6 million of construction costs for Castaic Village, a
130,000-square-foot neighborhood shopping center being developed just north of
Valencia. Additional capital expenditures included water utility construction,
land preparation for a 175,000-square-foot build-to-suit for ITT Corporation in
Valencia Commerce Center, and various improvements to commercial properties.

In 1992, capital expenditures totaled $60 million of which $50.4 million were
for construction costs and infrastructure improvements for Valencia Town
Center, the Company's regional shopping center which opened in September, 1992.
Other capital expenditures in 1992, included $3.8 million for the first phase
of Castaic Village, and the purchase of the 433-acre Isola Ranch for $2.7
million.

In 1991, capital expenditures totaled $29.3 million and included initial
construction costs of $13.6 million for Valencia Town Center, purchase of a
50,000-square-foot office building for $6.8 million, purchase of a 15-acre
commercial parcel for $3 million, initial land development costs for Castaic
Village and purchase of 79 acres of land adjacent to Valencia Commerce Center.

FINANCING ACTIVITIES: Four quarterly distributions totaling $14.7 million, or
40 cents per partnership unit, were paid in 1993. In July, 1992, the Board of
Directors reduced the quarterly cash distribution to 10 cents per unit from the
20 cents per unit which had been paid since 1989. The Board found it advisable
to reduce the cash distribution when it became apparent that cash flow would be
inadequate to cover the distribution paid previously and at the same time fund
major projects under development, to obtain entitlements for promising new
projects, and to continue the planned buildup of the Company's income
properties. The declaration of any distribution, and the amount declared, is
determined by the Board of Directors, taking into account the Company's
earnings, cash requirements, financial condition and prospects.

At December 31, 1993, mortgage and other debt totaled $174.2 million, compared
to $131.8 million at year-end 1992 and $78.6 million at year-end 1991. The
increase in 1993 primarily was from a $30 million unsecured loan from a major
insurance company, $13.4 million of land acquisition notes in connection with
McDowell Mountain Ranch in Scottsdale, Arizona and $9.5 million additional
reimbursement from tax-exempt community facilities bonds relating to Valencia
Town Center. In 1992, the increase in mortgage and other debt consisted
principally of draws totaling $35.3 million against a $40 million construction
loan and $6.1 million reimbursement from tax-exempt community facilities bonds
for Valencia Town Center.

Upon receipt of the $30 million unsecured loan in December, 1993, $10.5 million
of outstanding advances against a revolving-to-term credit line





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16
for the Company's wholly-owned public water utility were retired. The Company
expects to replace this revolving credit line with a long-term financing during
1994, subject to approval by the California Public Utilities Commission.

In 1994, the Company intends to complete additional public financings to assist
in funding major infrastructure and land development projects in Valencia and
for McDowell Mountain Ranch.

RESULTS OF OPERATIONS

Revenues and earnings were depressed in 1993 as a result of the lingering
recession in Southern California and continuing weakness in real estate
markets. The Company's 1993 total earnings were lower principally because
results for 1992 included the sale of farm land which contributed $14.5
million, or 39 cents per unit, to earnings. In 1993, the sale of farm land
contributed $5.2 million, or 14 cents per unit, to earnings. Also, the sale of
399 residential lots in 1992 impacted the Company's ability to sell additional
lots in 1993. Mitigating this decline, the Company's commercial operations
posted a 24% improvement in operating income over the prior year and several
moderately-sized land parcels closed escrow in 1993. The sale of land to
government agencies, which added $39 million to revenues and $16 million to
earnings in 1991, did not have a significant impact on results in either 1993
or 1992. A five-year summary of revenues and operating income for each of the
Company's major business segments follows:





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17





FIVE YEAR SUMMARY



Years ended December 31,
---------------------------------------------------------------------
In thousands 1993 1992 1991 1990 1989
- ------------ --------- --------- --------- --------- ---------

REVENUES
Real estate
Residential home and land sales $ 31,499 $ 60,088 $ 41,778 $ 117,327 $ 173,000
Industrial and other sales 15,811 3,342 57,283 13,866 8,489
Commercial operations 32,469 25,487 22,460 22,104 17,840
Agriculture
Operations 15,761 17,605 25,391 30,589 35,121
Ranch sales 9,912 21,660 3,850 9,000 --
-------- -------- -------- -------- --------
TOTAL REVENUES $105,452 $128,182 $150,762 $192,886 $234,450
======== ======== ======== ======== ========
OPERATING INCOME
Real estate
Residential home and land sales $ 8,236 $ 9,696 $ 6,918 $ 25,481 $ 68,202
Industrial and other sales 4,518 801 24,661 8,059 4,023
Community development (6,126) (7,759) (6,150) (6,126) (6,225)
Commercial operations 14,518 11,700 10,926 10,228 8,548
Agriculture
Operations 2,438 2,905 4,238 4,996 6,920
Ranch sales 5,170 14,493 2,827 6,026 --
-------- -------- -------- -------- --------
TOTAL OPERATING INCOME $ 28,754 $ 31,836 $ 43,420 $ 48,664 $ 81,468
======== ======== ======== ======== ========



16
18

RESIDENTIAL HOME AND LAND SALES

Transition from the Company's internal home construction to the sale of
ready-to-build lots to merchant builders was completed in 1993. A total of 30
of the Company's own homes closed escrow in 1993, compared with 88 in 1992 and
136 in 1991. Because of the impact of the recession and a larger than normal
supply of lots in builders' inventories during the past few years, the Company
lowered the price of its lots in 1992 to remain competitive. Profit margins in
the past two years, as a result, were lower than in prior years.

The sale of 62 residential lots to Pardee, a division of Weyerhaeuser, was
completed in 1993. A total of 399 residential lots were sold in 1992 to
merchant builders and 97 lots in 1991. The 62-lot sale contributed $4.6
million to current year revenues and $541,000 to income under percentage of
completion accounting. Lot sales in 1992 and 1991 contributed $32.7 million
and $9.0 million to revenues and $3.7 million and $2.2 million to income,
respectively, under percentage of completion accounting. Also included in 1993
results is the sale of 220 acres at the Cowell Ranch for $6.0 million which
contributed $5.3 million to income.

Under percentage of completion accounting, the Company recognized $6.9 million
of deferred revenues and $1.2 million of income in 1993 from prior residential
lot sales. This compares with deferred revenues of $6.1 million and $995,000,
and income of $5.5 million and $774,000 recognized in 1992 and 1991,
respectively, as a result of the sale of higher margin residential lots in
prior years.

During 1993, cash received from prior residential land sale profit
participation agreements added $100,000 to revenues and income. This compares
to $733,000 received in 1992 and $1.0 million in 1991. The Company does not
expect to receive any profit participation related to recent lot sales because
of the more competitive market and lower margins being realized by home
building companies.

The Company is engaging a number of quality builders in the construction and
sale of single and multi-family homes in Valencia through various joint venture
arrangements. These ventures are intended to increase momentum in the
residential segment, maximize land values and enable innovative builders to
obtain financing in today's tight real estate lending environment. The
Company's financial exposure is managed through strict controls with new starts
directly tied to sales performance. These development partnerships are
anticipated to provide the Company with several innovative products in the
second half of 1994 to meet the demand for affordable housing in Valencia. The
Company's first residential joint venture is with EPAC Communities, Inc. for 65
homes. As of December 31, 1993, 21 homes had closed escrow contributing $6.7
million to revenues and $1.0 million to income.

Four major home builders are constructing homes in Valencia on land purchased
from the Company. They include Pardee, a division of Weyerhaeuser; M.J. Brock,
a division of Ryland Homes; Warmington and Bramalea. Merchant builders closed
escrow on 137 homes in Valencia in 1993.





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19
At December 31, 1993, a total of 83 residential lots in Valencia Northpark, the
Company's newest residential community, were in escrow to a merchant builder
with closing expected in the first quarter of 1994. In addition, the Company
is currently negotiating sales contracts for residential lots and superpads in
its McDowell Mountain Ranch project in Scottsdale, Arizona. The Company's
ability to make additional lot sales in 1994 will be dependent upon market
conditions, absorption of lots previously sold to builders and the completion
of necessary land development and infrastructure improvements.

INDUSTRIAL AND OTHER SALES

The California real estate recession and the inability of developers to obtain
financing continued to inhibit the sale of industrial and commercial land
during 1993. Some improvement was seen in the fourth quarter, however, when
five parcels closed escrow bringing the total closings to seven for the year.

During 1993, escrow closings included two parcels in Valencia Auto Center to
Magic Ford totaling 8.2 acres, a 6.9-acre site for a church, a 3.6-acre parcel
in Northpark for another church site, and a .7 acre commercial lot.
Additionally, Weyerhaeuser purchased 8.5 acres for a distribution center, and
early in 1993, escrow closed on a 2-acre parcel to the California Department of
Transportation. These 1993 sales contributed $10.9 million to revenues and
$5.2 million to income. The 1993 results include $4.3 million in revenues and
$2.3 million in income recognized under percentage of completion accounting
from prior land sales, including the final income recognition on the U.S.
Postal Service site.

In 1992, two sales of commercial land totaling 4.5 acres closed escrow and
contributed $1.3 million to revenues and $940,000 to income under percentage of
completion accounting. In addition, $2.0 million in revenues and $1.6 million
in income were recognized in 1992 under percentage of completion accounting
from the 1990 sale of 62.4 acres in Valencia Commerce Center to the U.S. Postal
Service and the 1991 sale of a 5-acre parcel in Valencia Corporate Center to
Kaiser Permanente.

In 1991, the Postal Service sale contributed $22.8 million to revenues and $9.2
million to income under percentage of completion. Also, in 1991, 44.6 acres
were sold to a local high school district for $14.4 million which contributed
$5.5 million to income, and the sale of a 4.5- acre site to an elementary
school district added $2.0 million to revenues and $1.2 million to income.

At December 31, 1993, industrial land inventories totaled over 650 entitled
acres. Of course, final plans always are subject to review by governmental
agencies before development can proceed, but these entitlements, and the fact
that few competitive large land parcels are available in Los Angeles County,
place the Company in a favorable position as the economy and real estate
markets improve. At December 31, 1993, no industrial or commercial land sales
were in escrow.

COMMUNITY DEVELOPMENT

In March, 1993, the master plan and zoning for a new planned community,
McDowell Mountain Ranch, were approved by the Scottsdale City Council





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20
for development of over 4,000 homes and 70 acres of commercial property. The
Company exercised its first option on approximately 700 acres in November 1993,
with options remaining on an additional 1,400 acres. Earlier in 1993, a
160-acre parcel within the project was purchased from the State of Arizona.
The balance of the 3,200 acres has been dedicated to the City of Scottsdale for
open space. There is substantial interest from merchant builders for the
purchase of residential lots. Contract negotiations are on-going and initial
sales are anticipated in late 1994. Arizona entered the recession before
California and now is experiencing a good recovery and strong market for new
homes.

Governmental approvals for 192 multi-family homes and 22 acres of commercial
development in Valencia were granted in 1993. At December 31, 1993, the
Company had over 5,600 residential lots approved in the Valencia area including
1,600 lots with general plan land use approval.

Governmental approvals granted in 1992 included 3,300 homes, three community
shopping centers and two elementary school sites. In 1991, the County of Los
Angeles granted master plan and zoning approvals for the 1,600-acre Valencia
Commerce Center as well as subdivision approvals for 340 acres in the center
and 100 acres in Valencia Industrial Center.

Included in 1992 approvals was final approval from the Los Angeles County Board
of Supervisors for the 1,800-home Westridge Golf Course Community. However,
following approval, two environmental groups filed a lawsuit challenging the
County's approval, their main contention being that the County had improperly
permitted a golf course and highway within a significant ecological area.

Numerous other environmental deficiencies were also alleged. In September
1993, the trial court ruled that the County had acted properly in regard to the
significant ecological area. However, the trial court rescinded all
entitlements for the 1,800 homes until such time as the County has demonstrated
full compliance with the California Environmental Quality Act and its
Development Monitoring System with respect to air quality, schools and
libraries. The Company believes that the deficiencies will be cleared in about
one year.

Final plans and environmental factors are subject to review by governmental
agencies before development can proceed. Significant land development work and
infrastructure improvements remain to be completed before the Company can
deliver the majority of approved lots for sale.

Expenses associated with Community Development activities totaled $6.1 million
in 1993, a 21% decrease from 1992, primarily as a result of the Company's
success in obtaining entitlements during 1992 and prior years. The decline is
partially offset by planning and entitlement expenses relating to McDowell
Mountain Ranch. In 1992, Community Development expenses totaled $7.8 million,
a 26% increase from 1991 expenses of $6.2 million, due to the Company's
intensified efforts in obtaining entitlements. The Company is committed to
continuing its entitlement efforts in the future and does not anticipate a
further reduction in entitlement expenses in 1994.

COMMERCIAL OPERATIONS

Commercial operations include the Company's portfolio of income-





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21
producing properties and the Natural Resources division, consisting of Valencia
Water Company, a wholly-owned public water utility, and the Company's energy
operations.

The primary contributors to increases of 27% in revenues and 24% in income over
1992 results are Valencia Town Center, the Company's regional shopping center
which celebrated its first anniversary in September, 1993, and Valencia Water
Company, which received approval for a water rate increase of approximately 20%
and a drought recovery surcharge from the California Public Utilities
Commission. Also contributing to the increases were Valencia Hilton Garden Inn
and the new Castaic Village neighborhood shopping center.

Tenant space in Valencia Town Center was 94 percent leased or committed at the
end of 1993. The Center's first sit-down restaurant, TGI Friday's, opened in
October 1993, and the second restaurant, Sisley Italian Kitchen, opened in
December. Eddie Bauer, a national sportswear clothing chain, is scheduled to
open in February, 1994 and a letter of intent has been received from the Disney
Store.

The three department stores and most mall shops report sales above
expectations. This first phase development consists of 790,000 square feet of
space and includes Robinsons-May, JC Penney and Sears department stores, over
100 mall shops, a 10-screen theater and food court, and the two restaurants.
Future plans include expanding the shopping center to 1.4 million square feet
with three more department stores and additional mall space.

Valencia Hilton Garden Inn, a 152-room joint venture hotel, is in its second
year of operation and enjoying excellent occupancy rates at almost 80 percent.
Castaic Village, the Company's newest neighborhood shopping center located just
north of Valencia, opened in November 1992 with Ralphs supermarket as its first
tenant. In 1993, Burger King opened in May and PayLess Drugstores, the second
anchor tenant, opened in November. Construction is complete on 12,800 square
feet of retail space in the 130,000-square-foot center and leasing is currently
underway.

Revenues and income from the Company's three apartment complexes and River Oaks
and Bouquet Center neighborhood shopping centers were slightly higher in 1993
than in 1992 and 1991. At December 31, 1993, Bouquet Center was 100% leased,
River Oaks had a vacancy rate of just 1% and vacancies at the apartment
complexes averaged 4%. At year-end 1992, vacancies in the apartment complexes
averaged 4% and the two neighborhood shopping centers averaged 1%. These
vacancy rates were the same at the end of 1991.

During 1993, the Company opened a 30,000-square-foot telecommuting center in
Valencia Industrial Center. The facility, wired with fiber optic and
traditional cabling for voice, video and data transmission, is the largest
telecommuting center in California and reflects a number of business trends
taking place in the work environment. CareAmerica Health Plans, the building's
first tenant, has leased over 5,000 square feet to accommodate its employees
who live 25 miles or more from the health insurer's office in Chatsworth,
California. Subsequent to the earthquake the facility has been fully leased.





20
22
Newhall Land has been negotiating with several major companies to develop
industrial and commercial real estate projects on a build-to-suit basis. In
December 1993, an agreement was signed with ITT Corporation to construct a
175,000-square-foot facility on approximately 10 acres in Valencia Commerce
Center. ITT will move its Aerospace Controls and Neo-Dyn Operations with 400
employees from their current San Fernando Valley locations to this new $14
million facility. Earlier in the year, the Company entered into a long-term
lease agreement to construct a 7,000-square-foot facility for Trader Joe's, a
popular specialty food retailer with stores throughout Southern California.

AGRICULTURAL OPERATIONS

In 1993, sales of farm land, partially offset by improved citrus prices and
higher prices and yields for grapes, resulted in net decreases of 10% in
revenues and 16% in income from the prior year. In 1992, agricultural earnings
were 32% below the prior year because of the sale of farm properties and a
sharp decline in the price of oranges and lemons.

Agricultural operations will continue to provide returns from the 37,000-acre
Newhall Ranch where development is continuing and the 39,000-acre Suey Ranch
where development will be considered in the future. Also, the New Columbia
Ranch, which is being retained for its substantial surface and underground
water supplies, will continue to be leased to tenants and contribute to
agricultural operations.

RANCH SALES

A total of 3,900 acres of farm land at the Capay/Wheatland, Merced and Meridian
ranches was sold in 1993, contributing $9.9 million to revenues and $5.2
million to income. In 1992, the sale of 6,750 acres of farm land at the
Wilson, Merced and Meridian ranches contributed $21.7 million to revenues and
$14.5 million to income. Sales of 2,989 acres at the Merced Ranch in 1991
added revenues of $3.9 million and income of $2.8 million.

The Company plans to market for sale its remaining 14,840 acres of
non-strategic farm land during 1994. While these properties had an appraised
value of $23.5 million at December 31, 1993, there is no assurance that sales
prices will approximate appraised values. At December 1, 1993, no agricultural
parcels were in escrow.

GENERAL AND ADMINISTRATIVE EXPENSE

Reductions in staff and overhead expenditures resulted in a 3% decrease in
total general and administrative expenses in 1993, 5% in 1992 and 16% in 1991.
Prior year expenses have been reclassified to reflect consolidation of
administrative departments in 1993.

UNIT OPTIONS FOR MANAGEMENT

Fluctuations in the market price of partnership units in connection with
appreciation rights of the Company's outstanding non-qualified options
accounted for expenses of $250,000 in 1993 and $650,000 in 1991 and an expense
recovery of $900,000 in 1992.





21
23
INTEREST AND OTHER

Interest expense increased in 1993 from the prior year due to a construction
loan and community facilities bonds for the Valencia Town Center regional mall,
and a ranch mortgage obtained in December 1992. Interest income recognized on
notes receivable from land sales reduced the overall increase to 5%.

The increase in interest expense in 1992 principally was due to construction
financing for the regional mall after completion of the project in September
1992, short-term borrowings during the year and bank financing for the
Company's wholly-owned water utility. Also, interest income decreased with the
repayment of land sale notes. In 1991, a mortgage obtained on a
50,000-square-foot office building and financing for the Company's wholly-owned
water utility contributed to a net increase in interest expense.

INFLATION AND RELATED FACTORS

The Company's business, like most others, is affected by general economic
conditions and is impacted significantly by conditions in its real estate
markets. Also, fluctuations in interest rates and the availability of
financing to land purchases have an important impact on Company performance.

The Company believes it is well positioned against any effects of inflation.
Historically, during periods of inflation, the Company has been able to
increase selling prices of properties to offset rising costs of land
development and construction. However, in the past few years, with declining
land values in California and a lingering recession, sales prices of Company
properties as well as costs have decreased. The commercial income portfolio is
substantially protected from inflation since percentage rent clauses in the
Company's leases tend to adjust rental receipts for inflation, and the
underlying value of commercial properties over the long-term has tended to
rise.

IMPACT OF EARTHQUAKE

The Company's Valencia properties came out of the San Fernando Valley
earthquake in good shape. Valencia Town Center, the Company's regional
shopping mall, had only minor damage. Other income properties, except for a
four-story office building which incurred some structural damage, experienced
only minor damage and virtually all were operational the day following the
earthquake. While Valencia Water Company lost three of its 14 storage tanks
and incurred extensive damage to main lines, service to most of its customers
was restored within one week. The Company does carry earthquake insurance
which will limit property losses, but it will be some time before a final
determination of these losses is made.

It is too early to assess the impact this will have on sales of residential,
commercial and industrial land by the Company or on appraised values in
Valencia. The most important issue facing the Company and community will be
the restoration of full access between the Santa Clarita Valley and greater Los
Angeles. Caltrans announced it intends to have the Interstate 5 freeway fully
repaired by mid-June and all freeways restored by year-end. Metrolink commuter
rail service





22
24
between the Santa Clarita Valley and Los Angeles remained operational following
the earthquake, and capacity and usage have been significantly increased on the
Santa Clarita line.





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25
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA



INDEX TO FINANCIAL STATEMENTS INCLUDED IN ITEM 8:
-------------------------------------------------

Independent Auditors' Report

Consolidated Statements of Income for the years ended
December 31, 1993, 1992 and 1991

Consolidated Balance Sheets at
December 31, 1993 and 1992

Consolidated Statements of Cash Flows for the years
ended December 31, 1993, 1992 and 1991

Consolidated Statements of Changes in Partner's Capital
for the years ended December 31, 1993, 1992 and 1991


Notes to Consolidated Financial Statements


INDEX TO FINANCIAL STATEMENT SCHEDULES
--------------------------------------


Property, Plant and Equipment - Schedule V S - 1

Accumulated Depreciation, Depletion and Amortization
of Property, Plant and Equipment - Schedule VI S - 2

Short Term Borrowings - Schedule IX S - 3

Supplemental Income Statement Information - Schedule X S - 4






24
26





INDEPENDENT AUDITORS' REPORT





The Board of Directors of Newhall Management Corporation
and Partners of The Newhall Land and Farming Company:


We have audited the consolidated financial statements of The Newhall Land and
Farming Company and subsidiaries as listed in the accompanying index. In
connection with our audits of the consolidated financial statements, we also
have audited the financial statement schedules as listed in the accompanying
index. These consolidated financial statements and financial statement
schedules are the responsibility of the Company's management. Our
responsibility is to express an opinion on these consolidated financial
statements and financial statement schedules 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 consolidated financial statements referred to above present
fairly, in all material respects, the financial position of The Newhall Land
and Farming Company and subsidiaries as of December 31, 1993 and 1992, and the
results of their operations and their cash flows for each of the years in the
three-year period ended December 31, 1993, in conformity with generally
accepted accounting principles. Also in our opinion, the related financial
statement schedules, when considered in relation to the basic consolidated
financial statements taken as a whole, present fairly, in all material
respects, the information set forth therein.




KPMG PEAT MARWICK

Los Angeles, California
January 19, 1994





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27

CONSOLIDATED STATEMENTS OF INCOME



Years ended December 31,
-------------------------------------
In thousands, except per unit 1993 1992 1991
- ----------------------------- -------- -------- --------

REVENUES
Real estate
Residential home and land sales $ 31,499 $ 60,088 $ 41,778
Industrial and other sales 15,811 3,342 57,283
Commercial operations 32,469 25,487 22,460
Agriculture
Operations 15,761 17,605 25,391
Ranch sales 9,912 21,660 3,850
-------- -------- --------
TOTAL REVENUES 105,452 128,182 150,762
-------- -------- --------
OPERATING EXPENSES
Real estate
Residential home and land sales 23,263 50,392 34,860
Industrial and other sales 11,293 2,541 32,622
Community development 6,126 7,759 6,150
Commercial operations 17,951 13,787 11,534
Agriculture
Operations 13,323 14,700 21,153
Ranch sales 4,742 7,167 1,023
-------- -------- --------
76,698 96,346 107,342
-------- -------- --------
OPERATING INCOME 28,754 31,836 43,420

General and administrative expense (7,676) (7,906) (8,287)
(Expense) recovery from unit option plans (250) 900 (650)
Interest and other, net (8,031) (7,619) (4,398)
-------- -------- --------
NET INCOME $ 12,797 $ 17,211 $ 30,085
======== ======== ========
NET INCOME PER PARTNERSHIP UNIT $ .35 $ .47 $ .82
======== ======== ========



See notes to consolidated financial statements

26

28
CONSOLIDATED BALANCE SHEETS




December 31,
------------------------
In thousands, except units 1993 1992
- -------------------------- -------- --------

ASSETS
Cash and cash equivalents $ 39,636 $ 10,792
Accounts and notes receivable 19,508 32,304

Land under development 73,078 50,127
Land held for future development 34,563 37,960

Property and equipment, net 182,332 183,938
Other assets and deferred charges 10,781 7,961
-------- --------
$359,898 $323,082
======== ========

LIABILITIES AND PARTNERS' CAPITAL
Accounts payable $ 12,419 $ 10,195
Accrued expenses 26,794 27,754
Deferred revenues 1,835 11,626
Mortgage and other debt 174,157 131,849
Advances and contributions from
developers for utility construction 12,067 12,442
Other liabilities 21,347 16,167
-------- --------
Total liabilities 248,619 210,033

Commitments and contingencies (Note 10)

Partners' capital

36,756,530 units outstanding at December 31, 1993 and
36,760,130 units outstanding at December 31, 1992 111,279 113,049
-------- --------
$359,898 $323,082
======== ========


See notes to consolidated financial statements

27
29
CONSOLIDATED STATEMENTS OF CASH FLOWS



Years ended December 31,
-------------------------------------
In thousands 1993 1992 1991
- ------------ --------- -------- --------

CASH FLOWS FROM OPERATING ACTIVITIES:
Net income $ 12,797 $ 17,211 $ 30,085

Adjustments to reconcile net income to net cash
provided by operating activities:
Depreciation and amortization 7,329 6,471 7,701
(Increase) decrease in land under development (22,951) 17,642 5,758
Decrease (increase) in accounts and notes receivable 12,796 (9,396) (9,436)
(Decrease) increase in accounts payable, accrued expenses
and deferred revenues (8,527) (6,897) 1,235
Cost of property sold 7,131 7,156 6,266
Other adjustments, net 2,071 (1,387) 2,557
-------- -------- --------
Net cash provided by operating activities 10,646 30,800 44,166
-------- -------- --------
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchase of property and equipment (9,457) (60,023) (29,343)
Investment in joint venture 289 193 87
-------- -------- --------
Net cash used by investing activities (9,168) (59,830) (29,256)
-------- -------- --------
CASH FLOWS FROM FINANCING ACTIVITIES:
Distributions paid (14,704) (22,055) (29,404)
Decrease in bank loans -- -- (7,000)
Increase in mortgage and other debt 54,948 53,345 18,270
Reduction in mortgage and other debt (12,640) (52) (16)
(Decrease) increase in advances and contributions from
developers for utility construction (375) 267 (150)
Other, net 137 108 157
-------- -------- --------
Net cash provided (used) by financing activities 27,366 31,613 (18,143)
-------- -------- --------
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS 28,844 2,583 (3,233)

CASH AND CASH EQUIVALENTS, BEGINNING OF YEAR 10,792 8,209 11,442
-------- -------- --------
CASH AND CASH EQUIVALENTS, END OF YEAR $ 39,636 $ 10,792 $ 8,209
======== ======== ========

SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
Interest paid (net of amount capitalized) $ 8,722 $ 6,397 $ 5,698


See notes to consolidated financial statements

28
30
CONSOLIDATED STATEMENTS OF CHANGES IN PARTNER'S CAPITAL




Number Partners'
In thousands of units Capital
- ------------ -------- ---------

BALANCE AT DECEMBER 31, 1990 36,755 $116,947
Net income for year ended December 31, 1991 30,085
Distributions (29,404)
Other activity, net -- 157
------ --------
BALANCE AT DECEMBER 31, 1991 36,755 117,785
Net income for year ended December 31, 1992 17,211
Distributions (22,055)
Other activity, net 5 108
------ --------

BALANCE AT DECEMBER 31, 1992 36,760 113,049
Net income for year ended December 31, 1993 12,797
Distributions (14,704)
Other activity, net (3) 137
------ --------
BALANCE AT DECEMBER 31, 1993 36,757 $111,279
====== ========


See notes to consolidated financial statements

29
31
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
December 31, 1993


NOTE 1. ORGANIZATION

The Newhall Land and Farming Company, a California Limited Partnership ("the
Company" or "the Partnership"), was reorganized from a corporation to a limited
partnership on January 8, 1985.

The general partners of the Company are Newhall Management Limited
Partnership, the Managing General Partner, and Newhall General Partnership.
Two executive officers and the Managing General Partner are the general
partners of Newhall General Partnership.


NOTE 2. INDUSTRY SEGMENTS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

The Company operates in two reportable industry segments: Real Estate -
residential land sales and home building, commercial and industrial land sales,
and development and operation of commercial property; Agriculture - primarily
farming. Information as to identifiable assets, capital expenditures and
depreciation for these segments is summarized in Note 11. In 1993, the Company
adopted an unclassified balance sheet to better reflect the current and future
activities of the Company. Significant accounting policies related to the
Company's segments are:

REAL ESTATE/RESIDENTIAL HOME BUILDING: Sales of single and multi-family
homes are generally for cash and therefore are recognized at the close of
escrow. Home buyers are provided with warranties against certain building
defects. Estimated warranty cost is provided for in the period in which the
sale is recorded.

REAL ESTATE/LAND SALES: Sales are recorded at the time escrow is closed
provided that: (1) there has been a minimum down payment, ranging from 20% to
25% depending upon the type of property sold, (2) the buyer has met adequate
continuing investment criteria, and (3) the Company, as the seller, has no
continuing involvement in the property. Where the Company has an obligation to
complete certain future development, revenue is deferred in the ratio of the
cost of development to be completed to the total cost of the property being
sold under percentage of completion accounting.

REAL ESTATE/DEVELOPMENT AND OPERATION OF COMMERCIAL PROPERTIES: The
Company owns and leases apartments, commercial and industrial buildings,
shopping centers and land to tenants. Except for apartments, rents are
typically based on the greater of a percentage of the lessee's gross revenues
or a minimum rent. Most lease agreements require that the lessee pay all
taxes, maintenance, insurance and certain other operating expenses applicable
to leased properties. Apartments are rented on a six-month lease and continue
on a month-to-month basis thereafter.

Valencia Water Company (a California corporation), a wholly-owned
subsidiary, is a public water utility subject to regulation by the California
Public Utilities Commission. Water utility revenues include amounts billed
monthly to customers and an estimated amount of unbilled





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32
revenues. Income taxes accounted for under the provisions of SFAS No. 109 are
included in operating expenses. In addition to income, funds advanced or
contributed to the utility are subject to federal and state income taxes.
Accordingly, deferred income taxes are reflected in the consolidated financial
statements.

REAL ESTATE/COMMUNITY DEVELOPMENT: Preliminary planning and entitlement
costs are charged to expense when incurred. After tentative map approval,
expenditures for map recordation are charged to the identified project.

AGRICULTURE/OPERATIONS: Revenue is recognized as crops are delivered to
farm cooperatives and other purchasers. Crops delivered to farm cooperatives
are marketed throughout the year after harvest. At the time of delivery, the
Company estimates the proceeds to be received from the cooperatives and records
these amounts as unbilled receivables. During the year following harvest, the
Company records any adjustments of such estimated amounts arising from changing
market conditions. Net income for the years ended December 31, 1993, 1992, and
1991 increased approximately $1,075,000, $1,177,000, and $1,253,000,
respectively, as a result of such adjustments.

Costs incurred during the development stage of orchard and vineyard
crops (ranging from three to ten years) are capitalized and amortized over the
productive life of the trees or vines. Farming costs which cannot be readily
identified with a specific harvested crop or other revenue producing activity
are expensed as incurred.

Farming inventories include crops in process and harvested crops and
are valued at the lower of cost or market, determined on the first-in,
first-out method.

AGRICULTURE/RANCH SALES: Sales of non-developable farm land occur
irregularly and are recognized upon close of escrow provided the criteria as
described for real estate land sales are met.

OTHER GENERAL ACCOUNTING POLICIES ARE:

BASIS OF CONSOLIDATION: The consolidated financial statements include the
accounts of the Company and its subsidiaries, all of which are wholly-owned.
All significant intercompany transactions are eliminated. Certain
reclassifications have been made to prior periods' amounts to conform to the
current year presentation.

CASH AND CASH EQUIVALENTS: The Company considers all highly liquid
investments with original maturity dates of 90 days or less to be cash
equivalents.

JOINT VENTURE: The Company uses the equity method to account for an investment
in a joint venture which is less than 50% controlled.

PROPERTY AND EQUIPMENT: Property is stated at cost, less proceeds from sales
of easements and rights of way. Depreciation of property and equipment is
provided on a straight-line basis over the estimated useful lives of the
various assets without regard to salvage value. Lives used for calculating
depreciation are as follows: buildings - 25 to 40 years; equipment - 3 to 10
years; water supply systems, orchards and





31
33
other - 5 to 75 years.

ENVIRONMENTAL MATTERS: Environmental clean-up costs are charged to expense
or established reserves and are not capitalized. Generally, reserves are
recorded for environmental clean-up costs when remediation efforts are probable
and can be reasonably estimated. To date, environmental clean-up costs have
not been material.

INCOME TAXES: The Company, as a partnership, is not a taxable entity;
accordingly, no provision for income taxes has been made in the consolidated
financial statements. Partners are taxed on their allocable share of the
Company's earnings. Partners' distributive share of the income, gain, loss,
deduction and credit of the Company is reportable on their income tax returns.

The Revenue Act of 1987 contained provisions which, in some cases,
taxes publicly traded partnerships as corporations. Since the Company was in
existence on December 17, 1987, it will continue to be treated as a partnership
for the 1987 through 1997 taxable years; and, subject to certain qualification
requirements, will continue to be treated as a partnership indefinitely
thereafter.

AMOUNTS PER PARTNERSHIP UNIT: Net income per unit is computed by dividing
net income by the weighted average number of units and common unit equivalents
(dilutive options) outstanding during the year. The number of units for the
computation was 36,790,000, 36,796,000, and 36,831,000, for the years ended
December 31, 1993, 1992, and 1991, respectively.


NOTE 3. FEDERAL INCOME TAX RESULTS OF THE PARTNERSHIP

The Partnership has elected under Section 754 of the Internal Revenue Code to
adjust the basis of property upon the purchase of units by investors. For
investors who purchase units, this election provides for the reflection of the
investor's price of the units in the tax basis of the Partnership's properties.
The excess of the purchase price over the monetary assets and liabilities is
allocated to real estate assets and results in a new basis which is used to
calculate operating expenses for tax purposes.

As required by SFAS No. 109, at December 31, 1993, the net tax basis of the
Company's assets and liabilities exceeded the Company's financial statement
basis of its assets and liabilities by $212,956,000. This excess amount does
not reflect the step-up in asset basis allocated to individual partners upon
purchase of units subsequent to the formation of the Partnership.

The Partnership's tax returns are subject to examination by federal and state
taxing authorities. Because many types of transactions are susceptible to
varying interpretations under federal and state income tax laws and
regulations, the tax basis amounts may be subject to change at a later date
upon final determination by the taxing authorities.


NOTE 4. DISCLOSURES ABOUT FAIR VALUE OF FINANCIAL INSTRUMENTS





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34
The estimated fair values of the Company's financial instruments are as
follows:



December 31,
----------------------------------------------------------
1993 1992
------------------------ ------------------------
Carrying Fair Carrying Fair
In thousands Amount Value Amount Value
- ------------ -------- -------- -------- --------

Notes receivable from
land sales $ 13,866 $ 13,866 $ 27,100 $ 27,100
Mortgage and other debt 174,157 174,157 131,849 131,849
Advances from developers
for utility construction 8,353 2,007 8,731 2,049
-------- -------- -------- --------


The following methods and assumptions were used to estimate the fair value of
each class of financial instruments for which it is practicable to estimate
that value:

CASH AND CASH EQUIVALENTS
The carrying amounts approximate the fair values of these instruments due to
their short-term nature.

NOTES RECEIVABLE FROM LAND SALES
The carrying amounts of notes receivable approximate fair value. Generally,
these notes have maturities of less than one year from close of escrow and, if
applicable, the carrying amount reflects imputed interest to reduce the note
receivable to its present value.

MORTGAGE AND OTHER DEBT
The carrying amount of the Company's debt reflects fair value based on current
interest rates available to the Company for comparable debt. See Note 8 for
interest rates on outstanding debt.

ADVANCES FROM DEVELOPERS FOR UTILITY CONSTRUCTION
Generally, advances are refundable to the developer without interest at the
rate of 2.5% per year over 40 years. The fair value is estimated as the
discounted value (12%) of the future cash flows to be paid on the advances.

NOTE 5. COMPOSITION OF CERTAIN FINANCIAL STATEMENT CAPTIONS


December 31,
------------------------
In thousands 1993 1992
- ------------ -------- -------

ACCOUNTS AND NOTES RECEIVABLE
Trade receivables, less allowance for doubtful
accounts $732 and $720, respectively $ 1,486 $ 1,175
Unbilled accounts receivable
Agricultural products 2,168 2,801
Other 1,103 652
Notes receivable from land sales 13,866 27,100
Other 885 576
------- -------
$19,508 $32,304
======= =======
LAND UNDER DEVELOPMENT
Residential $34,164 $15,208
Industrial and commercial 35,092 31,043
Homes completed or under construction 3,381 3,517
Other 441 359
------- -------
$73,078 $50,127
======= =======





33
35


PROPERTY AND EQUIPMENT
Land $ 42,896 $ 44,661
Buildings 96,932 93,841
Equipment 13,176 14,960
Water supply systems, orchards and other 65,639 65,087
Construction in progress 15,748 14,794
-------- --------
234,391 233,343
Accumulated depreciation (52,059) (49,405)
-------- --------
$182,332 $183,938
======== ========
OTHER ASSETS AND DEFERRED CHARGES
Prepaid expenses $ 909 $ 825
Investment in joint venture 961 1,250
Unamortized loan commitment fees 1,395 1,113
Deferred charges and assets of Valencia Water Company 4,158 2,319
Other 3,358 2,454
-------- --------
$ 10,781 $ 7,961
======== ========
ACCRUED EXPENSES
Deferred compensation $ 3,557 $ 3,416
Operating and other accruals 5,066 6,034
Project accruals 15,950 16,339
Other 2,221 1,965
-------- --------
$ 26,794 $ 27,754
======== ========
OTHER LIABILITIES
Warranty and other reserves $ 10,573 $ 10,887
Deferred taxes of Valencia Water Company 4,779 2,484
Other 5,995 2,796
-------- --------
$ 21,347 $ 16,167
======== ========



NOTE 6. COMMERCIAL LEASING OPERATIONS

A summary of the historical cost of properties held for lease, which are
included in property and equipment, follows:



December 31,
-------------------------
In thousands 1993 1992
- ------------ -------- --------

Land $ 36,379 $ 35,872
Buiildings 93,765 90,002
Other 13,378 13,231
-------- --------
143,522 139,105
Accumulated depreciation (19,661) (14,473)
-------- --------
$123,861 $124,632
======== ========


Minimum lease payments to be received under non-cancellable operating leases as
of December 31, 1993 are as follows:



In thousands
- ------------

1994 $ 13,044
1995 13,129
1996 12,620
1997 12,472
1998 12,150
Thereafter 89,946
--------
* $153,361
========


* This amount does not include contingent rentals which may be


34
36
received under certain leases based on lessee sales or apartment
rentals. Contingent rentals received for the years ended December 31,
1993, 1992, and 1991 were $8,119, $10,927, and $9,256, respectively.


NOTE 7. LINES OF CREDIT

No borrowings were outstanding against lines of credit at December 31,
1993 or 1992. At December 31, 1993, the Company had available lines of credit
totaling $69 million. Revolving lines of credit for general corporate purposes
include a $30 million line of credit with Wells Fargo Bank, a $20 million line
of credit with Societe Generale, and a $4 million line of credit with Bank of
America. Commitment fees range from .125% to .25% per annum of the unused
portion. In addition, in 1993 the Company obtained a $15 million revolving
credit facility from Morgan Guaranty Trust Company of New York which is
restricted to financing development costs of various types of commercial income
projects in Valencia.

Letters of credit outstanding against available lines of credit
totaled $4.2 million and $4.8 million respectively, at December 31, 1993 and
1992.

NOTE 8. MORTGAGE AND OTHER DEBT


December 31,
Interest -------------------------
In thousands Rates 1993 1992
- ------------ -------- -------- --------

Prudential (portfolio mortgage) 8.995% $ 60,000 $ 60,000
Prudential (ranch mortgage) 8.45% 11,760 12,000
Wells Fargo
(Valencia Water Company) 4.065-4.315% -- 10,500
Bank of America
(commercial mortgage) 7.95% 3,414 5,045
Bank of America
(Valencia Town Center) 4.94% 40,000 37,965
Community facilities bonds
(Valencia Town Center) 4.5-7.5% 15,534 6,070
Land acquisition notes
(McDowell Mountain Ranch) 8-8.75% 13,449 --
Metropolitan
(unsecured notes) 6.9% 30,000 --
Other 8.5% -- 269
-------- --------
$174,157 $131,849
======== ========


The $60 million financing from Prudential is secured by six of the
Company's commercial properties. The terms of the note require monthly
payments of interest only through February, 1995 and monthly principal and
interest payments of $501,000 thereafter until maturity on March 1, 1999 when a
principal balance of approximately $57 million is due.

In December 1992, the Company obtained a non-recourse mortgage
financing from Prudential for $12 million secured by the 14,000-acre New
Columbia Ranch property. The terms of the note call for interest payments on
each May 1 and November 1 and annual principal payments of $240,000 until
maturity on November 1, 2003.





35
37
The commercial mortgage was obtained from Bank of America in January
1991 in conjunction with the purchase of a 50,000-square-foot office building
in the vicinity of Valencia Town Center. A $1.6 million principal repayment
was made on September 1, 1993 in return for a 2.05% rate reduction. The
revised terms call for monthly principal and interest payments of $26,000 and a
balloon payment of approximately $3.1 million at maturity on February 1, 2001.

The Company obtained a $40 million construction loan from Bank of
America for the Valencia Town Center regional mall. Terms of the agreement
call for interest only payments until maturity on December 30, 1996.
Borrowings bear interest as follows, at the election of the borrower: LIBOR
plus 1.75% or the bank's reference rate plus .5%.

In October 1992, tax-exempt community facilities bonds were issued to
finance a portion of the costs of certain public infrastructure improvements
located within or in the vicinity of Valencia Town Center, the Company's
regional shopping mall which opened in September 1992. The bonds will be
repaid over 20 years from special taxes levied on the mall property.

The land acquisition notes include a $2 million, 8.75% mortgage
payable in annual principal and interest installments of $201,000 until
maturity on March 3, 2018, and a $1.3 million, 8% note payable May 31, 1994.
Also included, is a $10.1 million note with interest at 8% and semi-annual
installments commencing November 30, 1994 until maturity on May 31, 1998.

In December 1993, the Company completed a $30 million seven-year
unsecured financing. The terms of the notes call for interest payments payable
semi-annually and principal payments in equal annual installments commencing
upon the third anniversary of the notes.

Upon completion of the $30 million financing in December 1993, $10.5
million of outstanding advances against a revolving-to-term credit line for
Valencia Water Company were retired.

Annual maturities of long-term debt are approximately $3,319,000 in
1994, $9,877,000 in 1995, $50,032,000 in 1996, $10,093,000 in 1997, $7,997,000
in 1998, and $92,839,000 thereafter.

CAPITALIZED INTEREST: During 1993, 1992, and 1991, total interest expense
incurred amounted to $10,348,000, $7,555,000, and $5,776,000, net of $535,000,
$1,100,000, and $695,000, which was capitalized, respectively.


NOTE 9. EMPLOYEE BENEFIT PLANS

INCENTIVE COMPENSATION PLAN: Under the terms of the Company's Executive
Incentive Plan, the Board of Directors may authorize incentive compensation
awards to key management personnel of up to five percent of each year's income.
The Board of Directors authorized awards of $307,000, $455,000, and $902,000,
for the years ended December 31, 1993, 1992, and 1991, respectively.

OPTION AND APPRECIATION RIGHTS PLAN: Under the terms of the Company's
Option, Appreciation Rights and Restricted Units Plan, non-





36
38
qualified options or restricted units may be granted at the market price at
date of grant. The plan also allows for the granting of tandem appreciation
rights or bonus appreciation rights in connection with non-qualified options,
which entitle the holder to receive cash or partnership units, or a combination
thereof, at a value equal to the excess of the fair market value on the date of
exercise over the option price. The following options were granted: 1993 --
226,200 non-qualified options without appreciation rights; 1992 -- 123,800
non-qualified options without appreciation rights; and 1991 -- 176,600
non-qualified options with appreciation rights. No restricted units were
granted in 1993, 1992, or 1991. Fluctuations in the market price of
partnership units in connection with appreciation rights on outstanding
non-qualified options accounted for an expense recovery of $900,000 in 1992 and
a charge to expense of $250,000 and $650,000 in 1993 and 1991, respectively.

A summary of changes under the plans follows:



Option Price
------------------- Total (in
Units Per Unit thousands)
------ ------------------- ----------

Outstanding at December 31, 1991 807,350 $12.625 to $32.1875 $16,856
Granted 123,800 $14.625 1,811
Exercised (16,000) $12.625 (202)
Cancelled (63,300) $12.625 to $32.1875 (1,446)
------- -------
Outstanding at December 31, 1992 851,850 $12.625 to $32.1875 17,019
Granted 226,200 $14.625 3,308
Cancelled (93,700) $14.625 to $32.1875 (2,095)
------- -------
Outstanding at December 31, 1993 984,350 $18,232
======= =======



At December 31, 1993, 467,150 options were exercisable and 145,300 options were
available for future grants.


RETIREMENT PLANS: The Retirement Plan is Company funded and is qualified
under ERISA. Generally, all employees of the Company and subsidiaries of the
Company are eligible for membership in the Retirement Plan after one year of
employment and attainment of age 21. Participants' benefits are calculated as
40.5% of the highest average annual earnings up to Social Security covered
compensation, plus 60% of average annual earnings in excess of covered
compensation, reduced pro rata for years of service less than 30.

The Company's contribution to the Retirement Plan is determined by
consulting actuaries on the basis of customary actuarial considerations,
including total covered payroll of participants, benefits paid, earnings and
appreciation in the Retirement Plan funds.

The Board of Directors has adopted a Pension Restoration Plan,
pursuant to which the Company will pay any difference between the maximum
amount payable under ERISA and the amount otherwise payable under the Plan.





37
39
The Company's funding policy is to contribute no more than the maximum
tax deductible amount. Plan assets are invested primarily in equity and fixed
income funds.

The weighted-average discount rate and rate of increase in future
compensation levels used in determining the actuarial present value of the
projected benefit obligations were 7 and 5 percent in 1993, and 8 and 6 percent
in 1992 and 1991, respectively. The expected long-term rate of return on
assets was 9 percent for each of the three years.

The Company also has a Supplemental Executive Retirement Plan and a
Retirement Plan for Directors. The additional pension cost for these plans was
$184,000 in 1993, $208,000 in 1992, and $164,000 in 1991.

The following table sets forth the plans' funded status and amounts
recognized in the Company's financial statements for the Retirement and the
Pension Restoration Plans:



December 31,
------------------------------------------
In thousands 1993 1992 1991
- ------------ --------- -------- --------

Actuarial present value of benefit
obligations:
Accumulated benefit obligation,
including vested benefits of $13,567,
$11,339, and $11,368, respectively $(13,834) $(11,524) $(11,606)
======== ======== ========
Projected benefit obligation for
service rendered to date $(16,962) $(15,447) $(15,860)
Plan assets at fair value 16,327 15,344 15,328
-------- -------- --------
Plan assets less than projected
benefit obligations (635) (103) (532)
Unrealized net gain from past experience
different from that assumed and effects
of changes in assumptions (1,827) (1,873) (754)
Unrecognized prior service costs 831 892 953
Unrecognized net asset being
recognized over 15 years (239) (273) (308)
-------- -------- --------
Accrued pension cost $ (1,870) $ (1,357) $ (641)
======== ======== ========
Net pension cost includes the following compon
Service cost-benefits earned during the period $ 645 $ 774 $ 657
Interest cost on projected benefit obligation 1,196 1,224 1,170
Actual return on plan assets (1,856) (972) (2,606)
Net amortization and deferral 529 (309) 1,486
-------- -------- --------
Net periodic pension cost $ 514 $ 717 $ 707
======== ======== ========


EMPLOYEE SAVINGS PLAN: The Company has an Employee Savings Plan which is
available to all eligible employees. Certain employee contributions may be
supplemented by Company contributions. Company contributions approximated
$245,000 during 1993, $298,000 during 1992, and $292,000 during 1991.





38
40
DEFERRED CASH BONUS PLAN: In February 1991, the Compensation Committee of the
Board of Directors awarded deferred bonuses payable January 15, 1999. The
amount to be paid is based upon the relative percentage return on the market
value of the Company's depositary units compared to the percentage return on
the Standard and Poor's 500 Index over a nine-year period. No deferred cash
bonuses were earned in 1993, 1992, or 1991, and accordingly, no expense was
recorded.

OTHER BENEFITS: The Company does not provide postretirement or postemployment
benefits other than those plans described above and, as such, there is no
unrecorded obligation to be recognized under SFAS Nos. 106 and 112.


NOTE 10. COMMITMENTS AND CONTINGENCIES

The Company is involved in litigation and various claims, including
those arising from its ordinary conduct of business. Management is of the
opinion that the ultimate liability from this litigation will not materially
affect the Company's consolidated financial condition. The Company believes it
has acquired adequate insurance to protect itself against any future material
property and casualty losses.

In the ordinary course of business, and as part of the entitlement and
development process, the Company is required to provide performance bonds to
the County of Los Angeles and the City of Santa Clarita to assure completion of
certain public facilities. At December 31, 1993, the Company had performance
bonds outstanding totaling approximately $124 million.

As a significant landowner, developer and holder of commercial
properties, there exists the possibility that environmental contamination
conditions may exist that would require the Company to take corrective action.
The amount of such future latent cost cannot be determined. However, the
Company believes such costs will not materially affect the Company's
consolidated financial condition.

NOTE 11. INDUSTRY SEGMENT INFORMATION



December 31,
------------------------------------------
In thousands 1993 1992 1991
- ------------ -------- -------- --------

Identifiable Assets
(at historical cost)
Real Estate
Residential $ 31,474 $ 45,469 $ 48,491
Industrial 99,986 78,723 71,201
Commercial 164,736 162,567 117,382
Agriculture 21,515 24,094 29,544
Administration 42,187 12,229 13,957
-------- -------- --------
$359,898 $323,082 $280,575
======== ======== ========






39
41



Years ended December 31,
----------------------------------------
Capital Expenditures 1993 1992 1991
- -------------------- ------ ------- -------

Real Estate
Residential $ 26 $ -- $ --
Industrial 2,277 4,147 5,921
Commercial 6,747 51,564 21,823
Agriculture 263 4,108 1,463
Administration 144 204 136
------ ------- -------
$9,457 $60,023 $29,343
====== ======= =======




Years ended December 31,
----------------------------------------
Depreciation and Amortization 1993 1992 1991
- ----------------------------- ------ ------- -------

Real Estate
Residential $ 10 $ 61 $ 117
Industrial 47 44 48
Commercial 6,202 5,001 5,502
Agriculture 870 1,184 1,676
Administration 200 181 358
------ ------ ------
$7,329 $6,471 $7,701
====== ====== ======



NOTE 12. SELECTED QUARTERLY FINANCIAL DATA (Unaudited)

The following is a summary of selected quarterly financial data for 1993 and
1992:



Quarter
----------------------------------------------------------
In thousands, except per unit First Second Third Fourth
- ------------------------------ ----- ------ ----- ------

Revenues
1993 $15,389 $21,025 $20,046 $48,992
1992 27,840 16,641 28,402 55,299

Operating income
1993 4,002 5,077 5,635 14,040
1992 13,568 5,097 4,289 8,882

Net income
1993 364 1,004 1,834 9,595
1992 9,536 2,279 1,132 4,264
Net income per unit
1993 $ .01 $ .03 $ .05 $ .26
1992 .26 .06 .03 .12



NOTE 13. SUBSEQUENT EVENT

On January 17, 1994, a major earthquake struck the San Fernando Valley
area in close proximity to Valencia where many of the Company's properties are
located. While none of the Company's properties sustained major damage, a
final determination of the cost to repair the damage cannot be made at this
time. The Company carries earthquake insurance which will limit losses and
management of the Company believes that uninsured losses will not have a
material adverse effect on the financial statements of the Company taken as a
whole.





40
42



ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE

None





41
43
PART III

ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT

The Registrant was reorganized from a corporation to a California
limited partnership on January 8, 1985. The general partners of the
Partnership are Newhall Management Limited Partnership (the Managing General
Partner) and Newhall General Partnership. Two executive officers and the
Managing General Partner are the general partners of Newhall General
Partnership. Newhall Management Corporation and Newhall General Partnership
are the general partners of the Managing General Partner.

The Managing General Partner, Newhall Management Limited Partnership,
has exclusive management and control of the affairs of the Partnership and
shares in Partnership income and losses on the basis of the number of
Partnership units owned by it. The Managing General Partner of Newhall
Management Limited Partnership, Newhall Management Corporation, will make all
decisions and take all action deemed by it necessary or appropriate to conduct
the business and affairs of Newhall Management Limited Partnership and,
therefore, of the Partnership.

The duties and responsibilities of directors are carried out by the
Board of Directors of the Managing General Partner of the Managing General
Partner, Newhall Management Corporation. Each voting shareholder of Newhall
Management Corporation is also a director of Newhall Management Corporation and
only voting shareholders may be directors of that corporation. Every voting
shareholder and director has a number of votes in all matters equal to the
number of votes of every other voting shareholder and director. Upon ceasing
to be a director, a shareholder may be a nonvoting shareholder for a period of
time prior to the repurchase of his or her shares by the Corporation. See
further discussion of the shareholders' agreement and voting trust agreement
below.

The shareholder-directors of Newhall Management Corporation
("Corporation") are as follows:

Thomas L. Lee, age 51, was appointed Chairman and Chief Executive
Officer of the Corporation upon its formation in November, 1990 and of the
former Managing General Partner in 1989. He served as President and Chief
Executive Officer of the former Managing General Partner from 1987 to 1989, and
as President and Chief Operating Officer from 1985 to 1987. Mr. Lee joined the
predecessor corporation in 1970 and has served in various executive capacities.
Mr. Lee was elected as a director in 1985. He is a director of First
Interstate Bank of California and CalMat, Inc. and Chairman of the Los Angeles
Area Chamber of Commerce.

James F. Dickason, age 71, was elected as a director of the
Corporation upon its formation in November, 1990 and of the former Managing
General Partner upon its formation in 1985. He currently serves as Chairman of
the Executive Committee. Mr. Dickason served as a director of the predecessor
corporation from 1963 to 1985, as Chairman of the Board of Directors and Chief
Executive Officer of the former Managing General Partner from 1985 to 1987 and
held the same position with the predecessor corporation from 1979 to 1985. Mr.
Dickason also served as President of the predecessor corporation from 1971
until 1985.





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He was the managing partner of Newhall Resources' managing general partner and
the managing partner of Newhall Investment Properties' managing general partner
from 1983 until their liquidation in 1989 and 1988, respectively. He is also a
director of Pacific Enterprises, Southern California Gas Company and the
Automobile Club of Southern California. Mr. Dickason is a Trustee of the
Southwest Museum and a director of the California Museum of Science and
Industry.

George C. Dillon, age 71, has served as a director of the Corporation,
the former Managing General Partner and the predecessor corporation,
respectively, since 1973. He was Chairman of the Board of Directors of
Manville Corporation from 1986 until 1990 and Chairman of the Executive
Committee from 1990 to 1991. Previously he was Chairman and Chief Executive
Officer of Butler Manufacturing Company, where he had served in various
executive capacities since 1951. Mr. Dillon is a director of Phelps-Dodge
Corporation and Astec Industries, Inc.

Peter McBean, age 83, is a rancher and has served as a director of the
Corporation, the former Managing General Partner and the predecessor
corporation, respectively, since 1940. Mr. McBean is Trustee Emeritus of the
San Francisco Fine Arts Museum, a Life Trustee of the Cate School of Santa
Barbara and Grace Cathedral in San Francisco, and an Honorary Trustee of The
California Academy of Sciences. He is also a director and President of the
McBean Family Foundation and a Trustee of the Alletta Morris McBean Charitable
Trust.

Paul A. Miller, age 69, has served as a director of the Corporation,
the former Managing General Partner and the predecessor corporation,
respectively, since 1979. Mr. Miller is Chairman of the Executive Committee
and a director of Pacific Enterprises, a holding company for Southern
California Gas Company. He is a director of Wells Fargo Bank N.A. and Wells
Fargo & Company and a Trustee of Mutual Life Insurance Company of New York and
the University of Southern California. Mr. Miller is also a director of the
Los Angeles World Affairs Council, and is a member of the Executive Committee
of the California Business Round Table.

Henry K. Newhall, age 55, has served as a director of the Corporation,
the former Managing General Partner and the predecessor corporation,
respectively, since 1982. Dr. Newhall is General Manager, Technology, Oronite
Additives Division of Chevron Chemical Company. He has served in various
managerial and consulting positions with Chevron since 1971.

Jane Newhall, age 80, has served as a director of the Corporation, the
former Managing General Partner and the predecessor corporation, respectively,
since 1960. Miss Newhall, a private investor, is a director of the Henry Mayo
Newhall Foundation and a member of the Foundation Board of Donaldina Cameron
House. She is a Trustee of Mills College, the San Francisco Theological
Seminary, the University Mound Ladies' Home and the Graduate Theological Union.

Peter T. Pope, age 59, was elected a director of the Corporation in
1992. Mr. Pope has been Chairman, President and Chief Executive Officer since
1990 and Chairman and Chief Executive Officer since 1971 of Pope & Talbot, Inc.
He is a director of Pope Resources, the American Paper Institute, Oregon
Independent College Foundation and the World Forestry





43
45
Center and a trustee of the Medical Research Foundation of Oregon.

Carl E. Reichardt, age 62, has served as a director of the
Corporation, the former Managing General Partner and the predecessor
corporation, respectively, since 1980. Mr. Reichardt is Chairman of the Board
of Directors of Wells Fargo & Company and Wells Fargo Bank, N.A. He is also a
director of Ford Motor Company, HCA-Hospital Corporation of America, Pacific
Gas & Electric Company, The Irvine Company and ConAgra, Inc.

Thomas C. Sutton, age 51, was elected a director of the Corporation in
November, 1991. He has been Chairman of the Board and Chief Executive Officer
since 1990, President and a director from 1987 to 1990 and Executive Vice
President from 1984 to 1987 of Pacific Mutual Life Insurance Company. Mr.
Sutton is a director of the Association of California Life Insurance Companies,
Executive Service Corps of Southern California and the Health Insurance
Association of America. He is a trustee of the South Coast Repertory and the
Committee for Economic Development.

Lawrence R. Tollenaere, age 71, has served as a director of the
Corporation, the former Managing General Partner and the predecessor
corporation, respectively, since 1972. Mr. Tollenaere is Chairman of the Board
of Directors, and until 1993, was the Chief Executive Officer and President of
Ameron, Inc., a multi-divisional company producing and marketing products and
services for the utility, construction and industrial markets throughout the
world. He is Chairman of Gifford-Hill-American, Inc., and Tamco. He is a
director of Pacific Mutual Life Insurance Company, The Parsons Corporation and
The National Association of Manufacturers. He is past president and a director
of The California Club and an honorary board member of The Employers Group.
Mr. Tollenaere is a Trustee of the Huntington Library, a fellow of the Society
for the Advancement of Management, Emeritus Fellow of Claremount University and
Governor of Iowa State University.

Edwin Newhall Woods, age 76, is a rancher and has served as a director
of the Corporation, the former Managing General Partner and the predecessor
corporation, respectively, since 1950. Mr. Woods is a director of the
California Association of Winegrape Growers.

Ezra K. Zilkha, age 68, has served as a director of the Corporation,
the former Managing General Partner and the predecessor corporation,
respectively, since 1977. Since 1956, Mr. Zilkha has been President of Zilkha
& Sons, Inc., a private investment company, and from 1993, President of 3555
Investment Holding Company, an investment holding company. From 1979 to 1988,
he was president of Zilkha Corporation, a consulting company and from 1984 to
1990 and from 1991 to 1993 he was Chairman of Union Holdings, Inc., an
industrial holding company. He is a director of CIGNA Corporation, Cambridge
Associates, Chicago Milwaukee Corporation, Fortune Bancorp Inc., and Milwaukee
Land Company, the general partner of Heartland Partners, L.P. Mr. Zilkha is
Trustee Emeritus of Wesleyan University and a Trustee of the Brookings
Institution, Lycee Francais de New York and the French Institute/Alliance
Francaise. He is also Chairman of the Board of The International Center for
the Disabled.

Each of the shareholder-directors may be contacted at the principal





44
46
executive offices of the Partnership and is a citizen of the United States.

Jane Newhall and Edwin Newhall Woods are first cousins.

Section 16(a) of the Securities Exchange Act of 1934, as amended,
requires Newhall Management Corporation and its officers and directors, the
general partners, and persons who own more than ten percent of the Company's
partnership units, to file reports of ownership and changes in ownership with
the Securities and Exchange Commission and the New York Stock Exchange. The
Company assists officers, directors and ten-percent unitholders to file their
Section 16(a) reports and retains a copy of the forms filed. Written
representations that all required reports have been filed are obtained at the
end of each year. Based upon this information, the Company believes that,
during the year ended December 31, 1993, all such filing requirements were
complied with.

The Board of Directors manages and controls the overall business and
affairs of the Corporation, of the Managing General Partner, and of the
Partnership. The members of the Board of Directors are elected by the
shareholder-directors of the Corporation, unless there is a vacancy on the
Board in which case the remaining board members may fill the vacancy, without
the approval of the limited partners and with each shareholder-director of the
Corporation having an equal number of votes. Because the shareholders and
directors are the same persons, it is expected that the shareholders will
re-elect themselves to serve as directors.

It is the current policy of the Corporation that all directors of the
Corporation, except for the initial directors of the former Managing General
Partner and Mr. Lee, will retire at age 70. If a new director is elected, he
or she is required to become a shareholder by purchasing the number of shares
determined by the Board of Directors.

The Limited Partnership Agreement ("the Partnership Agreement") of the
Partnership requires the General Partners to own at least one percent (1%) of
the total number of Partnership units outstanding at all times. In order to
meet this 1% requirement, the shareholder- directors had originally contributed
Partnership units as capital to the former Managing General Partner. The
determination as to how many Partnership units each shareholder-director would
contribute was based upon the shareholdings of the shareholder-director in the
predecessor corporation and his or her ability to contribute such Partnership
units in order that the General Partners would own at least 1% of the total
number of Partnership units outstanding at all times.

Mr. Scott Newhall, a shareholder-director, died on October 26, 1992.
In 1993, Newhall Management Corporation purchased his 370 shares of common
stock for cash and sold an equivalent number of publicly traded partnership
units in the open market. Newhall Management Limited Partnership repurchased
its 71,630 limited partnership units in exchange for an equal number of
publicly traded partnership units. After giving effect to these transactions,
the Managing General Partner owns 372,300 units of the Partnership or 1.0% of
the total number of partnership units outstanding.

Messrs. Henry Newhall, Woods, and Zilkha each effectively has





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contributed to the Managing General Partner a total of 72,000 Partnership
units. Mr. McBean and Ms. Newhall each effectively has contributed to the
Managing General Partner a total of 71,650 Partnership units. Messrs.
Dickason, Dillon, Lee, Miller, Reichardt, and Tollenaere each effectively has
contributed to the Managing General Partner a total of 2,000 Partnership units.
Messrs. Pope and Sutton each effectively has contributed to the Managing
General Partner a total of 500 Partnership units.

It should be noted that a shareholder-director will receive the same
distributions from the Partnership with regard to his or her Partnership units
regardless of whether such Partnership units are represented by limited partner
interests in Newhall Management Limited Partnership or by general partner
interests in Newhall Management Limited Partnership (which in turn are
represented by common stock in the Corporation). All Partnership distributions
and allocations to the Managing General Partner with respect to the Partnership
units held by such Partner will be passed on to each limited partner of the
Managing General Partner or shareholder-director of the Corporation as
distributions in proportion to the actual number of units or shares
beneficially owned by such limited partner or shareholder-director, as the case
may be.

The shareholder-directors of the Corporation and the Corporation are
parties to a shareholders' agreement and a voting trust agreement. These
agreements provided for the transfer of all the shares of Newhall Management
Corporation to a voting trust, held in the name of the Trustee. The Secretary
of Newhall Management Corporation serves as Trustee. In all matters the
Trustee will vote all the shares in accordance with the direction of a majority
of the shareholder-directors, with each shareholder-director having one vote on
each matter (irrespective of the actual number of shares beneficially owned by
such person).

The shareholders' agreement and the bylaws of the Corporation restrict
the ability of a shareholder-director to transfer ownership of shares of the
Corporation. Certain events such as failure to own at least one limited
partner unit in Newhall Management Limited Partnership, failure to consent to a
Subchapter S election under the Internal Revenue Code, failure to re-execute
the trust agreement, ceasing to serve as a director, failure of a
shareholder-director's spouse to sign any required consent, a material breach
by a shareholder-director of the shareholders' agreement or voting trust
agreement, a levy upon the shares of a shareholder, or a purported transfer of
shares to someone other than a new or existing director upon approval of the
Board of Directors, are considered to be repurchase events. Upon such a
repurchase event, the shareholder must immediately resign as a director and the
shareholder will lose voting rights under the voting trust agreement. Upon the
occurrence of a repurchase event, a shareholder's shares will be repurchased by
the Corporation or the Corporation may direct their purchase by a successor
director. The Corporation has agreed to repurchase for cash equal to the
market value of the Partnership units representing such shares (or provide for
the purchase of) all shares of a shareholder-director subject to a repurchase
event within one year of the repurchase event and to use its best efforts to
effect such repurchase (purchase) as soon as possible after the repurchase
event. There can be no assurance that the Corporation will





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be able to find a replacement for a departing shareholder-director who will
purchase shares.

The shareholders' agreement expires if Newhall Management Corporation
ceases to serve as the Managing General Partner of the Managing General Partner
of the Partnership, or Newhall Management Limited Partnership ceases to be the
Managing General Partner of the Partnership, if all parties to the
shareholders' agreement consent to its termination, or with respect to any
individual shareholder, upon the repurchase of all the shareholder's shares.

The term of the voting trust is limited by laws to 10 years, but a
party to the voting trust will be deemed to have resigned as a director of the
Corporation and will have to sell his shares, subject to repurchase by the
Corporation, unless, at the times provided in the voting trust agreement, the
party re-executes and renews the voting trust for the purpose of keeping it
continually in effect. The voting trust agreement terminates if Newhall
Management Corporation ceases to serve as a general partner of the Managing
General Partner of the Partnership, or Newhall Management Limited Partnership
ceases to be the Managing General Partner of the Partnership, or with respect
to any individual shareholder if a shareholder no longer owns any shares.

The shareholder-directors, as limited partners, are also parties to
the limited partnership agreement of Newhall Management Limited Partnership.
At the present time, they are the only limited partners of Newhall Management
Limited Partnership. The limited partnership agreement has restrictions on
transfer similar to the shareholders' agreement and provides for repurchase of
the limited partnership units of a limited partner upon the occurrence of
repurchase events which are similar to those of the shareholders' agreement,
including the cessation of being a director by a limited partner in the case of
a limited partner who is a director.

Upon the occurrence of a repurchase event, Newhall Management Limited
Partnership would have one full year to transfer Partnership units representing
the limited partner's interest to the limited partner. A limited partner could
not compel the return of Partnership units for at least one year from the date
a limited partner chooses to obtain return of Partnership units. Even then,
Newhall Management Limited Partnership cannot, and cannot be compelled to,
distribute Partnership units to the limited partner if Newhall Management
Limited Partnership would thereafter own less than 1% of the Partnership's
Partnership units.

The limited partners, as limited partners, have no voting rights
except as expressly set forth in the limited partnership agreement or granted
pursuant to law. Such voting privileges include matters such as (i) electing
general partners in specified instances, (ii) amending the limited partnership
agreement, (iii) dissolving the limited partnership, (iv) electing a general
partner to serve as the Managing General Partner, and (v) removing a general
partner. Items (ii) and (iii) require the separate concurrence of the Managing
General Partner.

Persons other than directors of Newhall Management Corporation may
serve as limited partners of Newhall Management Limited Partnership and





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Newhall Management Corporation has the authority pursuant to the limited
partnership agreement to cause additional units to be issued. The partnership
agreement provides limited instances in which a general partner shall cease to
be a general partner.

Newhall Management Limited Partnership will dissolve (i) when a
general partner ceases to be a general partner (other than by removal) unless
there is at least one other general partner or all partners agree in writing to
continue the business of the partnership and to admit one or more general
partners, (ii) if Newhall Management Limited Partnership becomes insolvent,
(iii) upon the disposition of substantially all assets of Newhall Management
Limited Partnership, (iv) 90 days after an affirmative vote of the limited
partners to dissolve pursuant to the partnership agreement, or (v) upon the
occurrence of any event which makes it unlawful for the business of Newhall
Management Limited Partnership to be continued.

Newhall General Partnership, a California general partnership, is a
general partner for the purposes of continuing the business of the Partnership
and serving as an interim Managing General Partner if Newhall Management
Limited Partnership or its successor ceases to serve as Managing General
Partner. So long as Newhall Management Limited Partnership or its successor
remains as Managing General Partner, Newhall General Partnership will have no
right to take part in the management and control of the affairs of the
Partnership.

The general partners of Newhall General Partnership are Newhall
Management Limited Partnership, the chief executive officer of Newhall
Management Corporation and another officer or director of Newhall Management
Corporation selected from time to time by the board of directors of Newhall
Management Corporation. Thomas L. Lee is the chief executive officer of
Newhall Management Corporation and, therefore, is a general partner of Newhall
General Partnership.

Gary M. Cusumano, President and Chief Operating Officer of Newhall
Management Corporation, has been selected by the board of directors of Newhall
Management Corporation to be a general partner of Newhall General Partnership.
For as long as Newhall Management Limited Partnership serves as a general
partner of the Partnership, Newhall Management Limited Partnership shall serve
as a general partner of Newhall General Partnership and the individual general
partners of Newhall General Partnership shall be the chief executive officer of
Newhall Management Corporation and another officer or director selected by the
board of directors of Newhall Management Corporation.

The managing partner of Newhall General Partnership is the chief
executive officer of Newhall Management Corporation and shall have management
and control of the ordinary course of day to day business of Newhall General
Partnership. Matters outside the ordinary course of the day to day business of
Newhall General Partnership shall be decided by a majority vote of the partners
except that a unanimous vote will be required to, among other things, admit a
new partner (other than the chief executive officer or other officer or
director of Newhall Management Corporation).

After giving effect to 2-for-1 unit splits on December 20, 1985 and
January 29, 1990, each of the partners of Newhall General Partnership





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have contributed twenty Partnership units to Newhall General Partnership. No
additional capital contributions are required. The income, losses and
distributions allocated to Newhall General Partnership with respect to the
units will be allocated among the partners of Newhall General Partnership in
the ratio of the units contributed by each of them.

The ability of a partner to withdraw from Newhall General Partnership
or to transfer an interest in Newhall General Partnership is limited by the
partnership agreement of Newhall General Partnership. Individual partners of
Newhall General Partnership may not withdraw except upon appointment of a
successor by the board of directors of Newhall Management Corporation. In
addition, an individual general partner may not transfer his interest in
Newhall General Partnership except with the written consent of Newhall
Management Limited Partnership. Newhall Management Limited Partnership, as a
general partner of Newhall General Partnership, may not withdraw unless: (i) it
no longer serves as a general partner of the Partnership; (ii) Newhall General
Partnership no longer serves as a general partner of the Partnership; or (iii)
Newhall General Partnership dissolves and its business is not continued.

If Newhall Management Limited Partnership no longer serves as a
general partner of the Partnership, simultaneously, it will stop serving as a
general partner of Newhall General Partnership. Any individual general partner
of Newhall General Partnership who is serving as a general partner by virtue of
holding an office or position with Newhall Management Corporation, will stop
serving as a general partner of Newhall General Partnership if either (i)
Newhall Management Limited Partnership is replaced as a general partner of the
Partnership, or (ii) Newhall Management Limited Partnership is no longer a
general partner of Newhall General Partnership and individual partners are
designated pursuant to the partnership agreement.

Newhall General Partnership will dissolve when the Partnership is
dissolved, liquidated and wound up and any trust or other entity formed for the
purpose of liquidating or winding up the Partnership is liquidated and wound
up. Newhall General Partnership will dissolve earlier upon: (i) the
distribution of substantially all of its property; (ii) the unanimous agreement
of its partners; (iii) ceasing to serve as a general partner of the
Partnership; or (iv) the occurrence of an event which would make it unlawful to
conduct its business.

The Partnership Agreement requires the Partnership to pay all of the
costs and expenses incurred or accrued by the general partners in connection
with the business and affairs of the Partnership as the Managing General
Partner in its sole discretion authorizes or approves from time to time. These
costs and expenses include overhead and operating expenses, officer, employee,
director and general partner compensation and other employee benefits paid by
the general partners. Such compensation and benefits may be determined and
changed from time to time without the approval of the limited partners.





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EXECUTIVE OFFICERS OF THE MANAGING GENERAL PARTNER




Date of
Age Office
------- --------

Thomas L. Lee 51
Chairman and Chief Executive Officer 07/89
President and Chief Executive Officer 07/87

Gary M. Cusumano 50
President and Chief Operating Officer 07/89
Executive Vice President and Chief Operating Officer 07/87

Robert D. Wilke 62
Vice Chairman and Chief Financial Officer 07/92
Vice Chairman, Chief Financial Officer and Secretary 07/89
Executive Vice President, Chief Financial Officer and Secretary 06/85

Thomas E. Dierckman 45
Senior Vice President - Real Estate Operations 07/90
Senior Vice President - Residential Real Estate 07/88
Vice President - Commercial/Industrial Real Estate 01/85

James M. Harter 47
Senior Vice President - Community Development 08/92
Project Director - Rancon Financial Group 12/90
Vice President and Project Manager / Director of 07/86
Forward Planning - The Baldwin Company

John R. Frye 49
Vice President - Agriculture 09/85

Gloria A. Glenn 52
Vice President - Planning 07/90
Senior Vice President - Planning, Valencia Company 09/87

Stuart R. Mork 41
Vice President - Finance 01/94
Vice President - Finance and Treasurer 07/92
Treasurer 10/87

Thomas H. Almas 59
Secretary 07/92
Assistant Secretary and Assistant Treasurer 10/87

Donald L. Kimball 36
Controller 04/90
Director of Internal Audit 06/86

Robert A. Mayhew 33
Treasurer 01/94
Assistant Treasurer 09/92
Vice President - Real Estate Industries Group, 01/89
Security Pacific National Bank

The officers serve at the pleasure of the Board of Directors.






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ITEM 11: EXECUTIVE COMPENSATION

The following tables set forth information as to each of the five
highest paid Executive Officers and their compensation for services rendered to
the Company and its subsidiaries :

SUMMARY COMPENSATION TABLE



Annual Compensation Long Term Compensation
----------------------------------- --------------------------------------------
Awards Payouts
------------------------- -------
Other Restricted Number of All
Annual Stock Securities Other
Name and Bonus Comp. Awards Underlying LTIP Comp.
Principal Position Year Salary (1) (2) (3) Options/SARs Payouts (4)
- ------------------ ---- -------- ------- ------- ------ ------------ ------- -------

Thomas L. Lee 1993 $305,000 $0 $57,275 0 30,000 $0 $22,361
Chairman and 1992 305,000 50,000 57,995 0 20,000 0 25,503
Chief Executive Officer 1991 305,000 120,000 0 30,000 0

Gary M. Cusumano 1993 252,000 0 31,570 0 24,000 0 17,913
President and 1992 252,000 40,000 30,375 0 15,000 0 20,754
Chief Operating Officer 1991 252,000 100,000 0 20,000 0

Robert D. Wilke 1993 200,000 30,000 0 0 18,000 0 10,575
Vice Chairman and 1992 200,000 35,000 0 12,000 0 16,809
Chief Financial Officer 1991 200,000 80,000 0 16,000 0

Thomas E. Dierckman 1993 190,000 20,000 950 0 16,000 0 9,705
Senior Vice President 1992 190,000 28,000 730 0 10,000 0 9,474
1991 190,000 52,000 0 12,000 0

John R. Frye 1993 122,000 18,000 0 0 12,000 0 6,571
Vice President 1992 122,000 24,000 0 7,000 0 7,321
1991 115,860 36,000 0 8,000 0



(1) Represents bonus accrued during the current calendar year based on earnings
for such period and paid in the subsequent calendar year.

(2) Includes general partner fees paid to Mssrs. Lee and Cusumano as general
partners of Newhall General Partnership of $28,000 each and director fees
paid of $28,000 to Mr. Lee as a director of Newhall Management Corporation
and $1,000 to Mr. Cusumano as a director of a wholly-owned subsidiary.

(3) The number and value of restricted unit holdings at December 31, 1993 were
as follows: 6,400 units valued at $102,400 for Mr. Lee; 4,900 units valued
at $78,400 for Mr. Cusumano; 2,400 units valued at $38,400 for Mr. Wilke;
and 1,200 units valued at $19,200 for Mr. Dierckman.

Restricted units are granted subject to a return right which permits the
Company to reacquire all or a portion of the restricted units for no
consideration if the grantee terminates employment with the Company. The
return right lapses as to twenty-five percent of the granted restricted
units after expiration of each two-year period from the date of grant. The
lapsing of the return right is accelerated as to an additional twenty-five
percent if two-year Company performance goals as set by the Compensation
Committee are met.

(4) Totals include the following: (1) Company matching contributions to the
Employee Savings Plan and Savings Restoration Plan, and (2) long-term
disability insurance premium for Mssrs. Lee and Cusumano in 1993 and 1992,
and Mr. Wilke in 1992.


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OPTION/SAR GRANTS IN LAST FISCAL YEAR




Value of
Options as of
Individual Grants Potential Realizable Grant Date as
------------------------------------------------------- Value at Assumed Computed by
Number of % of Total Annual Rates of Stock the Modified
Securities Options/SARs Exercise Appreciation for Option Black-Scholes
Underlying Granted To Or Base Term(2) Options
Options/SARs Employees in Price Expiration ------------------------- Valuation
Name Granted(1) Fiscal Year ($/Sh) Date 5% 10% Model(3)
---- ------------ ------------ -------- ---------- -------- ---------- -------------

Thomas L. Lee 30,000 13% $14.625 7-21-03 $275,940 $ 699,270 $152,100


Gary M. Cusumano 24,000 11% $14.625 7-21-03 220,752 559,416 121,680


Robert D. Wilke(4) 18,000 8% $14.625 7-21-03(4) 165,564 419,562 91,260


Thomas E. Dierckman 16,000 7% $14.625 7-21-03 147,168 372,944 81,120


John R. Frye 12,000 5% $14.625 7-21-03 110,376 279,708 60,840
------- --- -------- ---------- --------

Total 100,000 44% $919,800 $2,330,900 $507,000
======= === ======== ========== ========



(1) Non-qualified options without appreciation rights granted at 100% of fair
market value on the date of grant. Options are exercisable twenty-five
percent at the end of each of the first four years following date of
grant and expire ten years after date of grant. In the event of any
change of control of the Company, as defined, then each option will
immediately become fully exercisable as of the date of the change of
control.

(2) 5% compound growth results in final unit price of $23.823
10% compound growth results in final unit price of $37.934

(3) The Modified Black-Scholes Options Valuation Model modifies the
Black-Scholes formula to include the impact of distributions and to allow
option exercise prior to maturity. The 10-year distribution yield of
3.10% was used in the modified model.

(4) To normal retirement at age 65 in 1996:
5% compound growth results in potential realizable value of $31,118
10% compound growth results in potential realizable value of $65,354

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54
AGGREGATED OPTIONS/SAR EXERCISES IN LAST FISCAL YEAR
AND FISCAL YEAR-END OPTION/SAR VALUES






Number of
Shares Securities Underlying Value of Unexercised
Acquired Unexercised Options/SARs In-the-Money Options/SARs
On Value at Fiscal Year-End at Fiscal Year-(1)
Exercise Realized --------------------------- ----------------------------
Name (#) ($000) Exercisable Unexercisable Exercisable Unexercisable
---- --------- -------- ----------- ------------- ----------- -------------

Thomas L. Lee -- -- 116,000 93,750 $168,875 $ 61,875


Gary M. Cusumano -- -- 89,750 71,500 140,156 48,469


Robert D. Wilke -- -- 83,000 57,500 139,125 37,125


Thomas E. Dierckman -- -- 41,500 52,000 43,938 32,313


John R. Frye -- -- 38,750 28,750 32,034 23,719
--- --- ------- ------- -------- --------
Total 0 $0 369,000 303,500 $524,128 $203,501
=== === ======= ======= ======== ========




(1) Based on the difference in the unit price of $16.00 at December 31, 1993
and the exercise price of the underlying options.


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EMPLOYEE BENEFIT PLANS

The following are descriptions of the principal employee benefit plans
of the Company.

RETIREMENT PLANS

Under the Retirement Plan, participants' benefits are calculated as
40.5% of the average annual compensation of the highest five calendar years of
the preceding ten years up to Social Security covered compensation, plus 60% of
the average annual compensation in excess of covered compensation, reduced pro
rata for years of service less than 30. Under the Pension Restoration Plan,
the Company will pay any difference between the ERISA maximum amount payable
under the Retirement Plan and the amount otherwise payable, including amounts
restricted by the compensation limit.

Credited years of service as of December 31, 1993 (to the nearest
whole year) and average annual compensation for the highest five years of the
last ten years are as follows:

23 years and $450,000 for Mr. Lee, 24 years and $375,000 for Mr. Cusumano, 18
years and $275,000 for Mr. Wilke, 11 years and $240,000 for Mr. Dierckman, and
22 years and $150,000 for Mr. Frye.

The following table reflects the estimated annual benefits paid as a
single life annuity upon retirement at age 65 under the Retirement Plan and
Pension Restoration Plan at various assumed compensation ranges and credited
years of service:





Years of Service
--------------------------------------------------------------------
Compensation 10 20 30 40
------------ -------- -------- -------- --------

$125,000 $ 24,000 $ 47,000 $ 71,000 $ 71,000
200,000 39,000 77,000 116,000 116,000
275,000 54,000 107,000 161,000 161,000
350,000 69,000 137,000 206,000 206,000
425,000 84,000 167,000 251,000 251,000
450,000 89,000 177,000 266,000 266,000
500,000 99,000 197,000 296,000 296,000
550,000 109,000 217,000 326,000 326,000



The Board of Directors has adopted a Supplemental Executive Retirement
Plan pursuant to which the Company will pay benefits to specified employees so
that such employees' maximum normal retirement benefit under the Retirement
Plan and the Pension Restoration Plan will be earned during a period of 20
rather than 30 years of credited service. As of December 31, 1993, Robert D.
Wilke and a former officer of the Company were the only participants in the
Supplemental Executive Retirement Plan.

The following table reflects the estimated annual benefits under the
Supplemental Executive Retirement Plan upon retirement at age 65 at various
assumed compensation ranges and credited years of service:





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Years of Service
------------------------------------------------------------
Compensation 10 20 30 40
------------ ------- ------- ----- ----

$125,000 $12,000 $24,000 $ 0 $ 0
200,000 19,000 38,000 0 0
275,000 27,000 54,000 0 0
350,000 34,000 68,000 0 0
425,000 40,000 83,000 0 0


CHANGE IN CONTROL SEVERANCE PROGRAM

The Partnership entered into severance agreements in March 1988 with
three executive officers, Thomas L. Lee, Gary M. Cusumano and Robert D. Wilke,
under which each such officer is entitled to certain benefits in the event of a
"change of control." Under the provisions of the severance agreements, a
"change of control" is deemed to have occurred where (i) any "person" (other
than a trustee or similar person holding securities under an employee benefit
plan of the Partnership, or an entity owned by the Unitholders in substantially
the same proportions as their ownership of units) becomes the beneficial owner
of 25% or more of the total voting power represented by the Partnership's then
outstanding voting securities, (ii) Newhall Management Corporation is removed
as Managing General Partner of the Managing General Partner, or (iii) the
holders of the voting securities of the Partnership approve a merger or
consolidation of the Partnership with any other entity, other than a merger or
consolidation which would result in the voting securities of the Partnership
outstanding immediately prior thereto continuing to represent (either by
remaining standing or by being converted into voting securities of the
surviving entity) at least 75% of the total voting power represented by the
voting securities of the Partnership or such surviving entity outstanding
immediately after such merger or consolidation, or (iv) a plan of complete
liquidation of the Partnership is adopted or the holders of the voting
securities of the Partnership approve an agreement for the sale or disposition
by the Partnership (in one transaction or a series of transactions) of all or
substantially all the Partnership's assets. Entitlement to benefits arises if,
within two years following a change in control, the officer's employment is
terminated or if he elects to terminate his employment following action by the
Partnership which results in (i) a reduction in salary or other benefits, (ii)
change in location of employment (iii) a change in position, duties,
responsibilities or status inconsistent with the officer's prior position or a
reduction in responsibilities, duties, or offices as in effect immediately
before the change in control, or (iv) the failure of the Partnership to obtain
express assumption by any successor of the Partnership's obligations under the
severance agreement.

Benefits payable under the agreements consist of (i) payment in a
single lump sum equal to continuation of monthly payments of base salary for
three years, (ii) payment in a single lump sum of three times the average bonus
payments for the two fiscal years preceding the change in control, (iii)
continuation of participation in insurance and certain other fringe benefits
for three years, (iv) immediate vesting of deferred compensation or
non-qualified retirement benefits and options and related appreciation rights,
(v) immediate lapse of any Partnership rights to the return or repurchase of
Units granted pursuant to Units Rights, (vi) a retirement benefit equivalent to
the additional benefits that would have accrued under Partnership retirement
plans if employment





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had continued for two years, and (vii) reduction of required service for full
retirement benefits from 30 years to 20 years through a non- qualified
arrangement. Benefits payable under the agreements are instead of any
severance pay benefits under the Partnership's general severance pay policy.
The agreements are not contingent upon the officers actively seeking other
employment, but provide for some offset of benefits if other employment (other
than self-employment) is obtained. For each month of employment (other than
self-employment) during the three years following termination of employment
with the Partnership, the officer must return to the Partnership the lesser of
1/36 of the salary continuation payment or the compensation received from the
new employer for that month. In addition, to the extent the new employer
provides the officer with comparable medical, dental, disability or life
insurance coverage, such benefits under the severance agreements will
terminate.

RETIREMENT PLAN FOR DIRECTORS

Directors who cease to be directors after at least five years of
service on the Board of Directors, will be eligible for retirement benefits
under a Retirement Plan for Directors. This Plan covers service only as an
outside director. A director who retires as an employee of the Company but
continues on the Board is eligible for benefits under this Plan if he or she
serves on the Board for at least five years after retirement as an employee.
Under the Plan, each eligible director is entitled to an annual retirement
benefit equal to the director's annual base retainer plus the Board meeting
fees for the number of regular meetings held in the year preceding retirement
at the rates in effect at the date of retirement. Quarterly benefit payments
will commence after a director ceases to be a director (but not before age 65)
and continue for a period equal to the length of the director's service as an
outside director or until death, whichever occurs first.

COMPENSATION OF THE DIRECTORS

The Partnership Agreement provides that the compensation of the
general partners and their partners, directors, officers and employees shall be
determined by the Managing General Partner. Both the compensation committee
and the nominating committee of the Board of Directors of Newhall Management
Corporation, the Managing General Partner of Newhall Management Limited
Partnership, have been granted authority by the Board of Directors to determine
certain compensation issues. Members of the Board receive an annual fee of
$22,000 for serving on the Board and non-employee directors receive a fee of
$1,000 for each Board or committee meeting attended. Members of the Board of
Directors will also receive reimbursement for travel and other expenses related
to attendance at meetings of the Board of Directors and of the committees. In
addition, the Partnership Agreement requires the Partnership to reimburse the
Managing General Partner for any federal or California income taxes imposed
upon the Managing General Partner or its Managing General Partner as a result
of its activities as Managing General Partner.


COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION

The Company currently maintains a $30 million unsecured revolving





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58
credit facility, and a subsidiary of the Company has a $15 million revolving
credit line with Wells Fargo Bank, N.A. (the "Bank"). There were no
borrowings outstanding against these credit lines at December 31, 1993. In
addition, certain of the Company's employee benefit plans have invested
approximately $13 million in Index Funds managed by the Bank and the Bank has
extended approximately $2 million in letters of credit to the Company. The
Bank is the principal subsidiary of Wells Fargo & Company. Carl E. Reichardt,
Chairman of the Board of the Bank and Wells Fargo & Company, is a director of
the Managing General Partner of the Managing General Partner. In addition, a
director of the Managing General Partner of the Managing General Partner, Paul
A. Miller, is also a director of the Bank and Wells Fargo & Company.

REPORT OF THE COMPENSATION COMMITTEE OF THE BOARD OF DIRECTORS
OF NEWHALL MANAGEMENT CORPORATION

COMPENSATION COMMITTEE CHARTER

The Compensation Committee is charged with exercising authority with
respect to the compensation of all executive officers of the Company and to
review management development issues. It has regularly scheduled meetings two
times a year, and meets at other times as appropriate.

SENIOR MANAGEMENT COMPENSATION PHILOSOPHY

The Company believes its success is greatly influenced by the caliber
of its employees. The Company's compensation program for senior management is
designed to attract, recruit and retain a highly skilled, professional and
dedicated work force. In this regard, Newhall Land's senior management
compensation program consists of:

. Base salary compensation tied to prevailing real estate industry
compensation practices.

. Annual merit and incentive pay compensation (bonuses) primarily
related to the Company's performance for the previous fiscal year.

. Long-term incentive compensation in the form of Unit options and
restricted Units directly tied to increasing Unitholder value. As it
is directly related to corporate performance, this component of
compensation can be highly volatile.

The Company's objective is for the base salary annual incentive
compensation and long-term incentive compensation of senior management over
time to approximate the median levels for an industry comparison group
consisting primarily of real estate companies with which the Company competes
for executive talent. From year-to-year, however, relative compensation levels
may vary due largely to variances in individual company performance. In
addition, for individual managers, there is also a subjective element relating
to his or her success in meeting individual performance goals determined at the
beginning of each year. These goals are for the business segment he or she
manages including personal goals for increasing Unitholder values through
profitability and, most importantly, the value of the Company's landholdings.





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BASE SALARY COMPENSATION

The base salary for each executive officer is determined on the basis
of internal comparability considerations and base salary levels in effect for
comparable positions at the Company's principal competitors for executive
talent. External salary data provided to the Committee by an independent
compensation consulting firm indicate that these salaries for 1993 were
generally at or below the median level for such companies. Salaries are
reviewed on an annual basis, and adjustments to each executive officer's base
salary are based upon individual performance and salary adjustments paid by the
Company's competitors.

ANNUAL MERIT AND INCENTIVE COMPENSATION (BONUSES)

Annual cash bonuses under the Company's Incentive Plan are earned by
each executive officer primarily on the basis of the Company's earnings in the
previous fiscal year. The aggregate amount of such incentive bonuses may not
exceed 5% of the Company's net income before deducting the incentive awards.
Also considered are comparable industry performance, the accomplishment of
individual and Company objectives and an individual's contribution to the
Company's business. The bonuses (except for Mr. Lee's own bonus) are
recommended by the Company's Chief Executive Officer, Mr. Lee, and approved by
the Compensation Committee and the Board of Directors.

The aggregate cash bonuses paid for 1993 were $307,000 (or 2.4% of
1993 net income before bonuses), versus $455,000 in 1992, or a 32.5% reduction
from 1992 to 1993. This reduction reflects the Company's reduction in earnings
from 1992 to 1993 and the fact that Messrs. Lee and Cusumano did not receive
cash bonuses in 1994. Each of the five highest paid executive officers
received cash bonuses in 1993. The payment of bonuses recognizes significant
strategic accomplishments of the Company during the industry downturn, namely
successes in obtaining large amounts of entitlements, growth in the portfolio
of commercial properties, reduction in overhead costs and the geographic
expansion into Arizona. In lieu of cash bonuses, and because of the decrease
in the Company's earnings in 1993, Mr. Lee was awarded options for 9,200 Units
and Mr. Cusumano was awarded options for 7,500 Units, each option exercisable
at $14.75 per Unit, the Company's unit market price on grant date. These
option grants, in lieu of cash bonuses, reflect the 1992 bonus cash amounts of
Messrs. Lee and Cusumano, reduced to reflect the reduction in the Company's
earnings from 1992 to 1993, and increased to reflect the fact that the bonuses
were not paid in cash. The options were valued for bonus purposes based upon a
Black-Scholes option value of $5.44 per Unit.

LONG-TERM INCENTIVE COMPENSATION

To encourage growth in the Unitholder value, the equity component of
compensation includes Unit options, restricted Units under the Option,
Appreciation Rights and Restricted Units Plan adopted by Unitholders in 1988.
They are generally granted at mid-year to key management personnel who are in
positions to make a substantial contribution to the long-term success of the
Company. These Unit awards mature and are expected to grow in value over time
and for that reason represent compensation which is attributable to service
over a period of up to ten years. This focuses attention on managing the
Company from





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the perspective of an owner with an equity stake in the business.

The size of the Unit option grant to each executive officer, based on
the aggregate exercise price, generally is set to a multiple of salary which
the Committee deems appropriate in order to create a meaningful opportunity for
ownership based upon the individual's current position with the Company, but
also takes into account comparable awards to individuals in similar positions
in the industry as reflected in external surveys and as reported to the
Committee by an independent compensation consultant, and the individual's
potential for future responsibility and promotion over the option term.

CHIEF EXECUTIVE OFFICER COMPENSATION

The last increase in the salary of Mr. Lee was in January 1990, to its
1993 annual level of $305,000. Mr. Lee's annual cash incentive bonus was
reduced from $120,000 in 1991 to $50,000 in 1992, with no cash bonus in 1993,
reflecting the Company's earnings decline. However, the Committee also felt it
was necessary to recognize the significant strategic accomplishments of the
Company during the industry downturn. This recognition was made in the form of
the bonuses, albeit at reduced amounts, with the 1993 bonuses to Messrs. Lee
and Cusumano being paid in the form of Unit options. See "Annual Merit and
Incentive Compensation (Bonuses)" above.

Mr. Lee's long-term incentive compensation was last reviewed in July,
1993. At that time, he was granted 30,000 Unit options, a 50% increase from
the 1992 grant, with an exercise price of $14.625, equal to the market value of
the Units at that time. The Committee, in determining the number of options to
grant Mr. Lee in 1993, considered the following factors, in addition to the
Company's earnings decline: Mr. Lee's salary has been frozen since 1990; Mr.
Lee's annual incentive bonus awards have been at significantly lower levels
each year beginning in 1991; and Mr. Lee's substantial achievements during the
downturn in the real estate industry in terms of obtaining large amounts of
entitlements, growth in the portfolio of commercial properties, reduction in
overhead costs and the Company's geographic expansion into Arizona.

SECTION 162 LIMIT

Recently enacted Section 162(m) of the Internal Revenue Code ("Section
162") limits federal income tax deductions for compensation paid to the Chief
Executive Officer and the four other most highly compensated officers of a
public company to $1 million per year, but contains an exception for
performance-based compensation that satisfies certain conditions.

The Company believes that Unit options granted to its executives will
qualify for the performance based-compensation exception to the deduction
limit. Because it is unlikely that other compensation to any Company executive
would exceed the deduction limit in the near future and final regulations have
not been issued under Section 162(m), the Committee has not yet considered
whether it will seek to qualify compensation other than options for the
performance-based exception or will prohibit the payment of compensation that
would exceed the deduction limit.





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COMPENSATION COMMITTEE MEMBERS

The Compensation Committee of the Board of Directors of Newhall
Management Corporation is comprised of the following five directors, none of
whom is eligible to receive options, appreciation rights or Units under any
compensation plan of the Company:

George C. Dillon (Chairman)
James F. Dickason
Peter T. Pope
Carl E. Reichardt
Lawrence R. Tollenaere





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ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

DIRECTORS AND OFFICERS

The following table sets forth the number of units beneficially owned
by each director of Newhall Management Corporation, each of the Company's five
highest paid executives and all directors and officers as a group as of
December 31, 1993.



Amount and Nature Percent
Name of Beneficial Ownership of Class
- ---------------------- ----------------------------- --------

Gary M. Cusumano 215,975 (2) 0.6%
James F. Dickason 48,020 (1) (3) 0.1
Thomas E. Dierckman 50,204 (4) 0.1
George C. Dillon 5,600 (1) (5) *
John R. Frye 70,616 (6) 0.2
Thomas L. Lee 208,691 (1) (7) 0.6
Peter McBean 1,961,324 (1) (8) 5.3
Paul A. Miller 2,400 (1) *
Henry K. Newhall 1,042,868 (1) (9) 2.8
Jane Newhall 1,071,650 (1) 2.9
Peter T. Pope 500 (1) *
Carl E. Reichardt 7,000 (1) (10) *
Thomas C. Sutton 500 (1) *
Lawrence R. Tollenaere 24,000 (1) *
Robert D. Wilke 125,150 (11) 0.3
Edwin Newhall Woods 781,004 (1) (12) 2.1
Ezra K. Zilkha 1,172,600 (1) (13) 3.2

All directors and officers as a group 6,030,790 16.4%


* Represents less than 0.1% of the securities outstanding.

(1) Includes 72,000 units each for Messrs. Henry K. Newhall, Woods and
Zilkha, 71,650 units for Mr. McBean and Miss Jane Newhall, 2,000 units
each for Messrs. Dickason, Dillon, Miller, Reichardt and Tollenaere
and 500 units for Messrs. Sutton and Pope which are held by the
Managing General Partner. Includes 2,000 units held by the Managing
General Partner and 20 units contributed to Newhall General
Partnership in the case of Mr. Lee. Of the total of 372,300 units
held by the Managing General Partner beneficially for the directors,
20 units have been contributed to Newhall General Partnership, and of
those 20 units, 10 units have been contributed back to the Managing
General Partner by Newhall General Partnership. See Item 10 of this
Annual Report on Form 10-K for information on a shareholders'
agreement, voting trust agreement, and limited partnership agreement
relating to these units.

(2) Includes 92,375 units which Mr. Cusumano has the right to acquire and
4,900 restricted units which may be returned to the Partnership under
certain circumstances pursuant to the Company's Option, Appreciation
Rights and Restricted Units Plan.

(3) The Partnership is advised that Mr. Dickason has sole voting and
investment power as to 46,020 units held by a trust for which he is a
trustee.

(4) Includes 43,750 units which Mr. Dierckman has the right to acquire





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and 1,200 restricted units which may be returned to the Partnership
under certain circumstances pursuant to the Company's Option,
Appreciation Rights and Restricted Units Plan.

(5) Includes 3,600 units owned by Mr. Dillon's wife.

(6) Includes 39,500 units which Mr. Frye has the right to acquire pursuant
to the Company's Option, Appreciation Rights and Restricted Units
Plan.

(7) Includes 119,375 units which Mr. Lee has the right to acquire and
6,400 restricted units which may be returned to the Partnership under
certain circumstances pursuant to the Company's Option, Appreciation
Rights and Restricted Units Plan.

(8) The Partnership is advised that Mr. McBean has sole voting and
investment power as to 1,106,662 of these units which are owned by him
and has shared voting and investment power as to 783,012 units held of
record by certain trusts under which he is a co-trustee with Henry K.
Newhall and others.

(9) The Partnership is advised that Henry K. Newhall has sole voting and
investment power as to 80,928 held by trusts for which he is the
trustee and beneficiary. Voting and investment power is shared with
Peter McBean and others as to 889,940 units held by certain trusts.

(10) Mr. Reichardt has sole voting and investment power as to 3,000 units
held by trusts for which he is the trustee.

(11) Includes 85,250 units which Mr. Wilke has the right to acquire and
3,900 restricted units which may be returned to the Partnership under
certain circumstances pursuant to the Company's Option, Appreciation
Rights and Restricted Units Plan.

(12) The Partnership is advised that Mr. Woods has sole voting and
investment power as to 342,496 of these units owned by him and sole
voting and investment power as to 312,208 of these units held of
record by a trust under which he is the trustee. Also included are
54,300 units owned by Mr. Woods' wife as to which he disclaims any
beneficial ownership.

(13) Includes 230,600 units held by Zilkha & Sons, Inc. for which the
Partnership is advised that Mr. Zilkha has sole voting and investment
power and 30,000 units held by Mr. Zilkha's wife for which he
disclaims beneficial ownership.

Except as indicated otherwise in the above notes, the specified
persons possess sole voting and investment power as to the indicated number of
units to the best knowledge of the Company.

Certain provisions of the Partnership's Limited Partnership Agreement
require the affirmative vote of holders of at least 75% of the Partnership's
voting power to approve (i) the removal of any general partner or the election
of any general partner as the Partnership's managing general partner; or (ii)
certain business combinations and other specified transactions ("Business
Combinations") with, or proposed by or on behalf of, persons





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beneficially owning 10% or more of the Partnership's voting power, unless such
Business Combination is either approved by a majority of the present directors
of Newhall Management Corporation (or by directors who are nominated by them)
or certain price and procedural requirements are satisfied.

CERTAIN UNITHOLDERS

The following table sets forth the names and addresses and
unitholdings of the only persons known to the Partnership to be beneficial
owners of more than five percent of the outstanding units of the Partnership as
of December 31, 1993. Except as otherwise indicated, such unitholders have
sole voting and investment power to the best knowledge of the Partnership.


Amount Percent
Name and Address Beneficially Owned Of Class
- -------------------- ------------------ ---------

State Farm Mutual Automobile 3,500,758 9.5%
Insurance Company
One State Farm Plaza
Bloomington, Illinois 61710

State of Wisconsin 2,121,260 5.8%
Investment Board
P. O. Box 7842
Madison, Wisconsin 53707

Peter McBean 1,961,324(1) 5.3%
100 California Street
San Francisco, California 94111


(1) See footnotes (1) and (8) under Directors and Officers.

To the best knowledge of the management of the Company, no other
person owned beneficially more than five percent of the outstanding units of
the Company on that date. With respect to the above information, the Company
has relied upon Schedule 13G filings and information received from such
persons.

ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

The Company currently maintains a $30 million unsecured revolving
credit facility, and a subsidiary of the Company has a $15 million revolving
credit line with Wells Fargo Bank, N.A. (the "Bank"). There were no borrowings
outstanding against these credit lines at December 31, 1993. In addition,
certain of the Company's employee benefit plans have invested approximately $13
million in Index Funds managed by the Bank and the Bank has extended
approximately $2 million in letters of credit to the Company. The Bank is the
principal subsidiary of Wells Fargo & Company. Carl E. Reichardt, Chairman of
the Board of the Bank and Wells Fargo & Company, is a director of the Managing
General Partner of the Managing General Partner. In addition, a director of
the Managing General Partner of the Managing General Partner, Paul A. Miller,
is also a director of the Bank and Wells Fargo & Company.





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PART IV

ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORM 8-K

(a) Documents filed with this report:

1. Financial Statements - The Consolidated Financial Statements of the
Company: Consolidated Statements of Income for the years ended
December 31, 1993, December 31, 1992 and December 31, 1991,
Consolidated Balance Sheets as of December 31, 1993 and December 31,
1992, Consolidated Statements of Cash Flows for the years ended
December 31, 1993, December 31, 1992 and December 31, 1991,
Consolidated Statements of Changes in Partners' Capital for the years
ended December 31, 1993, December 31, 1992 and December 31, 1991, and
Notes to Consolidated Financial Statements.


2. Schedules - Financial Schedules of the Company for the years ended
December 31, 1993, December 31, 1992 and December 31, 1991: Property,
Plant and Equipment (Schedule V), Accumulated Depreciation, Depletion
and Amortization of Property, Plant and Equipment (Schedule VI),
Short-Term Borrowings (Schedule IX), and Supplemental Income Statement
Information (Schedule X).


3. Exhibits (listed by numbers corresponding to the Exhibit Table of Item
601 in Regulation S-K):

3(a) The Newhall Land and Farming Company (a California Limited
Partnership) Limited Partnership Agreement incorporated by
reference to Exhibit 3(e) to Registrant's Registration
Statement on Form S-14 filed August 24, 1984.

(b) First Amendment to Limited Partnership Agreement of The
Newhall Land and Farming Company (a California Limited
Partnership).

4 Depositary Receipt for Units of Interest, The Newhall Land and
Farming Company (a California Limited Partnership)
incorporated by reference to Exhibit 4 of the Company's Annual
Report on Form 10-K for the year ended December 31, 1990.

* 10(a) Option, Appreciation Rights and Restricted Units Plan (First
Amendment and Restatement) of The Newhall Land and Farming
Company (a California Limited Partnership).

* (b) Newhall Executive Incentive Plan incorporated by reference to
Exhibit 10(f) to Registrant's Registration Statement on Form
S- 14 filed August 24, 1984.

* (c) The Newhall Land and Farming Company Employee Savings Plan
incorporated by reference to the Company's Registration
Statement on Form S-8 dated January 25,





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1984.

* (d) The Newhall Land and Farming Company Retirement Plan
Restatement, Amendments No. 1 through 5, incorporated by
reference to Exhibit 10(d) to the Company's Annual Report on
Form 10-K for the year ended December 31, 1992.

* (e) Form of Severance Agreements.

(f) Newhall Management Corporation Retirement Plan for Directors
(Revised January 16, 1991) incorporated by reference to
Exhibit 10(f) to the Company's Annual Report on Form 10-K for
the year ended December 31, 1990.

* (g) The Newhall Land and Farming Company Supplemental Executive
Retirement Plan (Restated effective January 15, 1992)
incorporated by reference to Exhibit 10(g) to the Company's
Annual Report on Form 10-K for the year ended December 31,
1991.

* (h) The Newhall Land and Farming Company Senior Management
Survivor Income Plan.

(i) Form of Indemnification Agreement between the Partnership and
its General Partners and the general partners, partners,
shareholders, officers and directors of its General Partners,
or of the Managing General Partner of the Managing General
Partner, as amended, incorporated by reference to Exhibit
28(g) to the Company's report on Form 8-K filed December 11,
1990.

(j) Tax Payment and Tax Benefit Reimbursement Agreement
incorporated by reference to Exhibit 28(f) to the Company's
report on Form 8-K filed December 11, 1990.

* (k) The Newhall Land and Farming Company Deferred Cash Bonus Plan
incorporated by reference to Exhibit 10(l) of the Company's
Annual Report on Form 10-K for the year ended December 31,
1990.

* (l) Form of award issued under The Newhall Land and Farming
Company Deferred Cash Bonus Plan incorporated by reference to
Exhibit 10(m) of the Company's Annual Report on Form 10-K for
the year ended December 31, 1990.

* (m) The Newhall Land and Farming Company Employee Savings
Restoration Plan (As restated effective January 15, 1992)
incorporated by reference to Exhibit 10(n) to the Company's
Annual Report on Form 10-K for the year ended December 31,
1991.





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* (n) The Newhall Land and Farming Company Pension Restoration
Plan(As restated effective January 15, 1992) incorporated by
reference to Exhibit 10(o) to the Company's Annual Report on
Form 10-K for the year ended December 31, 1991.

(o) Trust Agreement dated January 15, 1992 between the Partnership
and Newhall Management Corporation incorporated by reference
to Exhibit 10(p)to the Company's Annual Report on Form 10-K
for the year ended December 31, 1991.

* (p) Amendment No. 4 to The Newhall Land and Farming Company
Employee Savings Plan, incorporated by reference to Exhibit
10(q) of the Company's Annual Report on Form 10-K for the year
ended December 31, 1992.

* (q) Amendments No. 1, No. 2, and No. 3 to The Newhall Land and
Farming Company Employee Savings Plan, incorporated by
reference to Exhibit 19(a) of the Company's Annual Report on
Form 10-K for the year ended December 31, 1992.

11 Computation of earnings per unit.



21 Subsidiaries of the Registrant.


99(a) Articles of Incorporation of Newhall Management Corporation,
as amended, incorporated by reference to Exhibit 28(b) to the
Company's report on Form 8-K filed December 11, 1990.

(b) Bylaws of Newhall Management Corporation incorporated by
reference to Exhibit 28(c) to the Company's report on Form 8-K
filed December 11, 1990, and Amendment Number 1 dated July 17,
1991 incorporated by reference to Exhibit 28(b) to the
Company's Annual Report on Form 10-K for the year ended
December 31, 1991.

(c) Shareholders' Agreement between Newhall Management
Corporation, its shareholders and the Newhall Management
Corporation Voting Trust incorporated by reference to Exhibit
28(d) to the Company's report on Form 8-K filed December 11,
1990, and Amendment to Shareholders' Agreement dated as of
November 20, 1991 incorporated by reference to Exhibit 28(c)
to the Company's Annual Report on Form 10-K for the year ended
December 31, 1991.

(d) Voting Trust Agreement between Newhall Management Corporation,
the Trustee, and the individual shareholders of Newhall
Management Corporation incorporated by reference to Exhibit
28(e) to the Company's report on Form 8-K filed December 11,
1990.





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(e) Partnership Agreement of Newhall General Partnership
incorporated by reference to Exhibit 28(e) to Registrant's
Registration Statement on Form S-14 filed August 24, 1984, and
the Certificate of Amendment of Partnership Agreement of
Newhall General Partnership, dated November 14, 1990
incorporated by reference to Exhibit 28(e) of the Company's
Annual Report on Form 10-K for the year ended December 31,
1990.

(f) Limited Partnership Agreement of Newhall Management Limited
Partnership, incorporated by reference to Exhibit 28(a) to the
Company's report on Form 8-K filed December 11, 1990.


* The items marked above constitute Executive Compensation
Plans and Arrangements.


(b) There was no current report on Form 8-K filed with respect to the quarter
ended December 31, 1993.





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69
Pursuant to the requirements of Section 13 or 15(d) 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: March 16, 1994 By / S / THOMAS L. LEE
-----------------------------
Thomas L. Lee
Chairman and Chief Executive
Officer


Pursuant to the requirements of the Securities Exchange Act of 1934,
this report has been signed below by the following persons on behalf of the
Registrant and in the capacities and on the dates indicated.


Date: March 16, 1994 By / S / THOMAS L. LEE
----------------------------
Thomas L. Lee, Chairman
and Chief Executive Officer of
Newhall Management Corporation
(Principal Executive Officer)


Date: March 16, 1994 By / S / ROBERT D. WILKE
----------------------------
Robert D. Wilke, Vice
Chairman and Chief Financial
Officer of Newhall Management
Corporation (Principal
Financial Officer)


Date: March 16, 1994 By / S / DONALD L. KIMBALL
----------------------------
Donald L. Kimball, Controller
of Newhall Management
Corporation (Principal
Accounting Officer)





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70
Directors of Newhall Management Corporation:

Date: March 16, 1994 By / S / James F. Dickason
----------------------------
James F. Dickason


Date: March 16, 1994 By / S / George C. Dillon
----------------------------
George C. Dillon


Date: March 16, 1994 By / S / Thomas L. Lee
----------------------------
Thomas L. Lee


Date: March 16, 1994 By
----------------------------
Peter McBean


Date: March 16, 1994 By / S / Paul A. Miller
----------------------------
Paul A. Miller


Date: March 16, 1994 By / S / Henry K. Newhall
----------------------------
Henry K. Newhall


Date: March 16, 1994 By / S / Jane Newhall
----------------------------
Jane Newhall


Date: March 16, 1994 By / S / Peter T. Pope
----------------------------
Peter T. Pope


Date: March 16, 1994 By / S / Carl E. Reichardt
----------------------------
Carl E. Reichardt


Date: March 16, 1994 By / S / Thomas C. Sutton
----------------------------
Thomas C. Sutton


Date: March 16, 1994 By
----------------------------
Lawrence R. Tollenaere





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71
Date: March 16, 1994 By / S / Edwin Newhall Woods
----------------------------
Edwin Newhall Woods


Date: March 16, 1994 By / S / Ezra K. Zilkha
----------------------------
Ezra K. Zilkha





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72





S-1
SCHEDULE V

THE NEWHALL LAND AND FARMING COMPANY
PROPERTY, PLANT AND EQUIPMENT
FOR THE YEARS ENDED
DECEMBER 31, 1993, 1992, AND 1991

(Dollars in thousands)



BALANCE AT TRANSFERS BALANCE
D E S C R I P T I O N BEGINNING ADDITIONS AND AT END
--------------------- OF PERIOD AT COST RETIREMENTS OTHER OF PERIOD
--------- --------- ----------- -------- ---------

YEAR ENDED DECEMBER 31, 1993
Land $ 82,621 $ 506 ($5,668) $ 77,459
Buildings 93,841 3,398 (307) 96,932
Equipment 14,960 630 (2,414) 13,176
Water supply systems, orchards and other 65,087 4,565 (4,013) 65,639
Construction in progress 14,794 358 $ 596 15,748
-------- ------- ------- ------- ---------
Total $271,303 $ 9,457 ($12,402) $596 $268,954
======== ======= ======== ======= =========

YEAR ENDED DECEMBER 31, 1992
Land $59,585 ($2,350) $25,386 $ 82,621
Buildings 58,636 (744) 35,949 93,841
Equipment 14,956 (3,004) 3,008 14,960
Water supply systems, orchards and other 64,481 (3,614) 4,220 65,087
Construction in progress 24,986 $60,023 (2,978) (67,237) 14,794
-------- ------- ------- ------- --------
Total $222,644 $60,023 ($12,690) $ 1,326 $271,303
======== ======= ======== ======= ========
YEAR ENDED DECEMBER 31, 1991
Land $ 54,373 ($1,411) $ 6,623 $ 59,585
Buildings 59,595 (5,167) 4,208 58,636
Equipment 15,527 (1,081) 510 14,956
Water supply systems, orchards and other 66,706 (2,764) 539 64,481
Construction in progress 7,712 $29,343 (1) (12,068) 24,986
-------- ------- ------- ------- --------
Total $203,913 $29,343 ($10,424) ($188) $222,644
======== ======= ======== ======= ========

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S-2
SCHEDULE VI

THE NEWHALL LAND AND FARMING COMPANY
ACCUMULATED DEPRECIATION, DEPLETION AND AMORTIZATION OF
PROPERTY, PLANT AND EQUIPMENT
FOR THE YEARS ENDED
DECEMBER 31, 1993, 1992, AND 1991

(Dollars in thousands)



BALANCE ADDITIONS
AT CHARGED TO TRANSFERS BALANCE
D E S C R I P T I O N BEGINNING COSTS AND AND AT END
--------------------- OF PERIOD EXPENSES RETIREMENTS OTHER OF PERIOD
--------- ---------- ----------- -------- ---------

YEAR ENDED DECEMBER 31, 1993
Buildings $13,550 $3,518 ($244) $16,824
Equipment 10,603 1,078 (2,356) 9,325
Water supply systems, orchards and other 25,252 2,733 (2,075) 25,910
------- ------ ------- --- -------
Total $49,405 $7,329 ($4,675) $ 0 $52,059
======= ====== ======= === =======
YEAR ENDED DECEMBER 31, 1992
Buildings $11,555 $2,317 ($318) ($4) $13,550
Equipment 11,869 1,259 (2,525) 10,603
Water supply systems, orchards and other 25,044 2,895 (2,691) 4 25,252
------- ------ ------- --- -------
Total $48,468 $6,471 ($5,534) $ 0 $49,405
======= ====== ======= === =======
YEAR ENDED DECEMBER 31, 1991
Buildings $10,062 $2,193 ($700) $11,555
Equipment 11,101 1,754 (996) $10 11,869
Water supply systems, orchards and other 23,762 3,754 (2,462) (10) 25,044
------- ------ ------- --- -------
Total $44,925 $7,701 ($4,158) $ 0 $48,468
======= ====== ======= === =======


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S-3
SCHEDULE IX

THE NEWHALL LAND AND FARMING COMPANY
SHORT-TERM BORROWINGS
FOR THE YEARS ENDED
DECEMBER 31, 1993, 1992, AND 1991

(Dollars in thousands)



The following information relates to the aggregate of short-term
borrowings during the years:



MAXIMUM
AMOUNT WEIGHTED
OUTSTANDING AVERAGE AVERAGE
WEIGHTED AT ANY AMOUNT INTEREST
BALANCE AVERAGE MONTH-END OUTSTANDING RATE
AT END INTEREST DURING DURING DURING
OF PERIOD RATE THE PERIOD THE PERIOD THE PERIOD
--------- -------- ---------- ---------- ----------

Year ended December 31, 1993 $ - - % $ 9,900 $ 6,700 6.00%
======= ==== ======= ======= =====

Year ended December 31, 1992 $ - - % $23,000 $18,000 6.03%
======= ==== ======= ======= =====

Year ended December 31, 1991 $ - - % $ 9,000 $ 4,500 9.00%
======= ==== ======= ======= =====




The average amount outstanding and average interest rate were computed on a
daily weighted average basis during the time there were short-term borrowings.



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S-4
SCHEDULE X

THE NEWHALL LAND AND FARMING COMPANY
SUPPLEMENTAL INCOME STATEMENT INFORMATION
FOR THE YEARS ENDED
DECEMBER 31, 1993, 1992, AND 1991

(Dollars in thousands)




I T E M CHARGED TO COSTS AND EXPENSES
------- -----------------------------

12/31/93 12/31/92 12/31/91
-------- -------- --------

Maintenance and repairs $6,488 $7,513 $5,213



Taxes, other than payroll and income taxes:
Property $3,802 $2,345 $2,531





As to lines omitted, the amounts are less than 1% of total revenues.




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76
THE NEWHALL LAND AND FARMING COMPANY


INDEX TO EXHIBITS


Item 14 (a) 3



Exhibit
Number Description
- -------- -------------

3(b) First Amendment to Limited Partnership Agreement of the
Newhall Land and Farming Company
(a California Limited Partnership)


10(a) Option, Appreciation Rights and Restricted Units Plan
(First Amendment and Restatement) of the Newhall Land
and Farming Company (a California Limited Partnership)

10(e) Form of Severance Agreements

10(h) The Newhall Land and Farming Company Senior Management
Survivor Income Plan

11 Computation of earnings per unit

21 Subsidiaries of the Registrant






75