<PAGE>


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

                                    FORM 10-Q

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

                  For the quarterly period ended March 31, 1999

                                       or
          [ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
                        SECURITIES EXCHANGE ACT OF 1934

              For the transition period from __________ to _________

                          Commission file number 1-7585


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

                                (661) 255-4000
             (Registrant's telephone number, including area code)


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 
                                    -----     -----


<PAGE>

PART I. FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS


CONSOLIDATED STATEMENTS OF INCOME
UNAUDITED
<TABLE>
<CAPTION>
                                                                      Three Months Ended
IN THOUSANDS, EXCEPT PER UNIT                                              March 31
-----------------------------                                     --------------------------
                                                                    1999               1998
                                                                  -------            -------
<S>                                                               <C>                <C>
REVENUES
 Real estate
    Residential home and land sales                               $ 4,300            $ 8,634
    Industrial and commercial sales                                19,986              2,673
    Commercial operations
       Income-producing properties                                 11,307              9,678
       Valencia Water Company                                       2,238              1,725
                                                                  -------           --------
                                                                   37,831             22,710
                                                                  -------           --------
 Agriculture
    Operations                                                        485                729
    Ranch sales                                                     3,957                323
                                                                  -------           --------
                                                                    4,442              1,052
                                                                  -------           --------
   Total revenues                                                 $42,273            $23,762
                                                                  -------           --------
                                                                  -------           --------
CONTRIBUTION TO INCOME
 Real estate
    Residential home and land sales                               $  (207)           $ 1,080
    Industrial and commercial sales                                 8,407               (559)
    Community development                                          (2,021)            (1,654)
    Commercial operations
      Income-producing properties                                   3,748              5,426
      Valencia Water Company                                          401                318
                                                                  -------           --------
                                                                   10,328              4,611
                                                                  -------           --------
 Agriculture
    Operations                                                        180                669
    Ranch sales                                                     2,847                323
                                                                  -------           --------
                                                                    3,027                992
                                                                ----------      -------------
Operating income                                                   13,355              5,603
General and administrative expense                                 (2,652)            (2,719)
Expense from unit ownership plans                                     -                 (400)

Interest and other, net                                            (2,420)            (2,227)
                                                                  -------           --------
Net income                                                        $ 8,283            $   257
                                                                  -------           --------
                                                                  -------           --------
Net income per unit                                               $  0.26            $  0.01
                                                                  -------           --------
                                                                  -------           --------
Net income per unit - diluted                                     $  0.25            $  0.01
                                                                  -------           --------
                                                                  -------           --------
Number of units used in computing per unit amounts:
 Net income per unit                                               32,448             34,535
 Net income per unit - diluted                                     32,752             34,986
Cash distributions per unit:
 Regular                                                          $  0.10            $  0.10
 Special                                                             0.22               0.12

</TABLE>

                                       2

<PAGE>

PART I. FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS


CONSOLIDATED  BALANCE  SHEETS

<TABLE>
<CAPTION>
                                                                     March 31,            December 31,
IN THOUSANDS                                                           1999                   1998
------------                                                         ---------            ------------
                                                                     UNAUDITED
<S>                                                                  <C>                  <C>
ASSETS
 Cash and cash equivalents                                           $    692             $  2,188
 Accounts and notes receivable                                         42,566               30,255
 Land under development                                                54,546               47,667
 Land held for future development                                      30,553               30,553
 Income-producing properties, net                                     257,222              248,712
 Property and equipment, net                                           60,212               58,836
 Other assets and deferred charges                                     15,123               13,996
                                                                     --------             --------
                                                                     $460,914             $432,207
                                                                     --------             --------
                                                                     --------             --------
LIABILITIES AND PARTNERS' CAPITAL
 Accounts payable                                                    $ 27,813             $ 28,716
 Accrued expenses                                                      43,627               43,196
 Deferred revenues                                                      9,939               10,041
 Mortgage and other debt                                              200,723              157,609
 Advances and contributions from developers for
   utility construction                                                27,498               26,466
 Other liabilities                                                     22,891               22,366
                                                                     --------             --------
        Total liabilities                                             332,491              288,394

 Partners' capital
  32,157 units outstanding, excluding 4,615 units in 
     treasury (cost-$95,873), at March 31, 1999 and
  32,676 units outstanding, excluding 4,096 units in
     treasury (cost-$83,530), at December 31, 1998                    128,423              143,813
                                                                     --------            ---------
                                                                     $460,914             $432,207
                                                                     --------             --------
                                                                     --------             --------
</TABLE>

                                       3

<PAGE>

PART I. FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

CONSOLIDATED STATEMENTS OF CASH FLOWS
UNAUDITED

<TABLE>
<CAPTION>
                                                                      Three Months Ended
IN THOUSANDS                                                                March 31
------------                                                    ------------------------------
                                                                  1999                  1998
                                                                --------              --------
<S>                                                             <C>                   <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
  Net income                                                    $  8,283              $    257
  Adjustments to reconcile net income to net 
    cash provided by operating activities:

    Depreciation and amortization                                  3,133                 2,523
    Increase in land under development                           (16,425)              (14,296)
    Cost of sales and other inventory changes                      9,546                 6,328
    (Increase) decrease in accounts and notes receivable         (12,311)                  669
    (Decrease) increase in accounts payable, accrued
       expenses and deferred revenues                               (574)                6,298
    Cost of property sold                                          3,782                   633
    Other adjustments, net                                           267                 1,867
                                                                --------              --------
  Net cash (used in) provided by operating activities             (4,299)                4,279
                                                                --------              --------
CASH FLOWS FROM INVESTING ACTIVITIES:
  Development of income-producing properties                     (14,044)              (19,079)
  Purchase of property and equipment                              (3,644)               (1,745)
  Distribution from (investment in) joint venture                     18                   (41)
                                                                --------              --------
  Net cash used in investing activities                          (17,670)              (20,865)
                                                                --------              --------
CASH FLOWS FROM FINANCING ACTIVITIES:
  Distributions paid                                             (10,459)               (7,598)
  Increase in mortgage and other debt                             43,114                21,693
  Increase in advances and contributions from
     developers for utility construction                           1,032                   840
  Purchase of partnership units                                  (12,909)
  Other, net                                                        (305)                  385
                                                                --------              --------
  Net cash provided by financing activities                       20,473                15,320
                                                                --------              --------
NET DECREASE IN CASH AND CASH EQUIVALENTS                         (1,496)               (1,266)
CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD                     2,188                 2,770
                                                                --------              --------
CASH AND CASH EQUIVALENTS, END OF PERIOD                        $    692              $  1,504
                                                                --------              --------
                                                                --------              --------
</TABLE>
                                       4
<PAGE>

PART I. FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Note 1. Accounting Policies
---------------------------

The consolidated financial statements include the accounts of The Newhall Land
and Farming Company and its subsidiaries, all of which are wholly-owned
(collectively, "the Company"). All significant intercompany balances and
transactions are eliminated.


The Company's unaudited interim financial statements have been prepared in 
conformity with generally accepted accounting principles used in the 
preparation of the Company's annual financial statements. In the opinion of 
the Company, all adjustments necessary for a fair statement of the results of 
operations for the three months ended March 31, 1999 and 1998 have been made. 
The interim statements are condensed and do not include some of the 
information necessary for a more complete understanding of the financial 
data. Accordingly, your attention is directed to the footnote disclosures 
found on pages 30 through 38 of the December 31, 1998 Annual Report to 
Partners and particularly to Note 2 therein which includes a summary of 
significant accounting policies. Certain reclassifications have been made to 
prior periods' amounts to conform to the current period presentation.

Interim financial information for the Company has substantial limitations as an
indicator for the calendar year because:

-   Land sales occur irregularly and are recognized at the close of escrow
    or on the percentage of completion basis if the Company has an
    obligation to complete certain future improvements and provided profit
    recognition criteria are met.

-   Agricultural crops are on an annual cycle and income is recognized 
    upon harvest. Most major crops are harvested during
    the fall and winter.

-   Sales of non-developable farmland occur irregularly and are recognized
    upon close of escrow provided profit recognition criteria are met.


Note 2. Details of Land Under Development
-----------------------------------------

<TABLE>
<CAPTION>

(In $000)                                             March 31,       December 31,
                                                        1999             1998
                                                    -----------     ------------
                                                    (Unaudited)
<S>                                                 <C>             <C>
Valencia
    Residential land development                       $ 2,558        $ 1,166
    Industrial and commercial land development          36,782         32,686
    Homes completed or under construction
         with venture partners                          14,056         13,525
Agriculture                                              1,150            290
                                                       -------        -------
         Total land under development                  $54,546        $47,667
                                                       -------        -------
                                                       -------        -------
</TABLE>


Note 3. Details for Earnings per Unit Calculation
-------------------------------------------------


<TABLE>
<CAPTION>

(UNAUDITED)                                  Income              Units           
(in 000's except per unit)                 (numerator)       (denominator)       Per Unit
                                           -----------       -------------       --------
<S>                                        <C>                <C>                 <C>
For three months ended March 31, 1999
Net income per unit
  Net income available to unitholders        $8,283              32,448            $0.26
Effect of dilutive securities
  Unit options                                    -                 304             (.01)
                                             ------              ------            -----
Net income per unit - diluted                $8,283              32,752            $0.25
                                             ------              ------            -----
                                             ------              ------            -----
</TABLE>


                                      5

<PAGE>

PART I. FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

Note 3 (continued)

<TABLE>
<CAPTION>
                                                 Income               Units           
(in 000's except per unit)                     (numerator)        (denominator)       Per Unit
                                               -----------        -------------       --------
<S>                                            <C>                <C>                 <C>
For three months ended March 31, 1998
Net income per unit
  Net income available to unitholders              $257               34,535            $0.01
Effect of dilutive securities
  Unit options                                        -                  451               -
                                                   ----               ------            -----
Net income per unit - diluted                      $257               34,986            $0.01
                                                   ----               ------            -----
</TABLE>

Note 4. Details of Income-Producing Properties and Property and Equipment
-------------------------------------------------------------------------

<TABLE>
<CAPTION>

(In $000)                                          
                                                   March 31,       December 31,
Income-producing properties                          1999              1998
                                                  -----------      ------------
                                                  (Unaudited)
<S>                                               <C>              <C>
    Land                                           $ 48,319           $ 48,319
    Buildings                                       121,673            119,453
    Other                                             8,288             14,611
    Properties under development                    117,445            105,772
                                                   --------           --------
                                                    295,725            288,155
    Accumulated depreciation                        (38,503)           (39,443)
                                                   --------           --------
                                                   $257,222           $248,712
                                                   --------           --------
                                                   --------           --------
Property and equipment
    Land                                           $  3,719           $  4,819
    Buildings                                         5,469              5,600
    Equipment                                         8,972              8,993
    Water supply systems, orchards and other         69,088             68,688
    Construction in progress                          9,251              7,172
                                                   --------           --------
                                                     96,499             95,272
    Accumulated depreciation                        (36,287)           (36,436)
                                                   --------           --------
                                                   $ 60,212           $ 58,836
                                                   --------           --------
                                                   --------           --------
</TABLE>

Note 5.  Business Segment Reporting   (Unaudited)
-----------------------------------

The following table provides financial information regarding revenues from
external customers, income and total assets for the Company's business segments
and also provides a reconciliation to the Company's consolidated totals:

<TABLE>
<CAPTION>
                                         THREE MONTHS ENDED MARCH 31, 1999
                                    -------------------------------------------
                                                    Contribution
                                    Revenues          to Income          Assets
                                    --------        ------------      ---------
<S>                                 <C>             <C>               <C>
Real Estate
  Residential                        $ 4,300          $  (147)         $ 19,492
  Industrial and commercial           19,986            8,477            76,118
  Community development                  -             (1,966)           18,369
  Income-producing properties         11,307            3,763           262,192
  Valencia Water Company               2,238              426            57,316
Agriculture                            4,442            3,047            19,798
Central administration                  -              (2,397)            7,629
                                     -------          -------          --------
                                      42,273           11,203           460,914
Interest and other, net                  -             (2,420)              -
All other                                -               (500)              -
                                     $42,273          $ 8,283          $460,914
                                     -------          -------          --------
                                     -------          -------          --------
</TABLE>

                                       6

<PAGE>


PART I. FINANCIAL INFORMATION

ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION 
        AND RESULTS OF OPERATIONS.

                              RESULTS OF OPERATIONS

Comparison of First Quarter 1999 to First Quarter 1998
------------------------------------------------------
UNAUDITED

   The amounts of increase or decrease in revenues and income from the prior
   year first quarter are as follows (in 000s, except per unit):

<TABLE>
<CAPTION>
                                                            Increase (Decrease)
                                                            -------------------
                                                              Amount       %
                                                            --------     ------
<S>                                                          <C>         <C>
REVENUES
  Real Estate
    Residential home and land sales                          $(4,334)     -50%
    Industrial and commercial sales                           17,313      648%
    Commercial operations
      Income-producing properties                              1,629       17%
      Valencia Water Company                                     513       30%
                                                             -------     -----
                                                              15,121       67%
                                                             -------     -----
  Agriculture
     Operations                                                 (244)     -33%
     Ranch sales                                               3,634     
                                                                         1125%
                                                             -------     -----
Total revenues                                               $18,511       78%
                                                             -------     -----
                                                             -------     -----
CONTRIBUTION TO INCOME
  Real Estate
    Residential home and land sales                          $(1,287)    -119%
    Industrial and commercial sales                            8,966     1604%
    Community development                                       (367)     -22%
    Commercial operations
      Income-producing properties                             (1,678)     -31%
      Valencia Water Company                                      83       26%
                                                             -------     -----
                                                               5,717      124%
  Agriculture
    Operations                                                  (489)     -73%
    Ranch sales                                                2,524      781%
                                                             -------     -----
 Operating income                                              7,752      138%
 General and administrative expense                               67        2%
 Expense from unit ownership plans                               400      100%
 Interest and other, net                                        (193)      -9%
                                                             -------     -----
 Net income                                                  $ 8,026     3123%
                                                             -------     -----
                                                             -------     -----
 Net income per unit                                         $  0.25     2500%
                                                             -------     -----
                                                             -------     -----
 Net income per unit - diluted                               $  0.24     2400%
                                                             -------     -----
                                                             -------     -----
 Number of units used in computing per unit amounts:
    Net income per unit                                       (2,087)      -6%
                                                             -------     -----
                                                             -------     -----
    Net income per unit - diluted                             (2,234)      -6%
                                                             -------     -----
                                                             -------     -----
</TABLE>

                                       7
<PAGE>

PART I.  FINANCIAL INFORMATION

ITEM 2.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION 
         AND RESULTS OF OPERATIONS.

The increases and decreases in revenues and income for the three months are
attributable to the following: 

For the quarter ended March 31, 1999, revenues totaled $42.3 million and 
income totaled $8.3 million compared with revenues of $23.8 million and 
income of $257,000 for the first quarter of 1998. The major contributors to 
1999 first quarter results were sales of the Company's remaining 85 acres at 
the Cowell Ranch in northern California and the last three parcels totaling 
3,077 acres at the Merced Ranch. These two transactions combined added $13.9 
million to revenues and $11.1 million to income. 

RESIDENTIAL HOME AND LAND SALES 

Revenues and income are recorded by the Company on residential lot sales when 
title is transferred to the merchant builder who, in turn, builds homes for 
sale. The Company also participates, on a limited basis, in home construction 
on lots it owns by establishing joint ventures with builders who have created 
innovative home designs, targeting niche markets not met by merchant 
builders. Through the joint-venture program, the Company recognizes its 
portion of revenues and income upon close of escrow to the homebuyer. 

During the first quarter of 1999, merchant builders and the Company's joint 
ventures sold 122 homes, compared with 170 homes sold in the year earlier 
quarter. The decline is due to current supply constraints in Valencia's new 
home inventory, as five residential housing projects sold out during 1998, 
two sold out in the 1999 first quarter and three additional projects sold out 
and are waiting for the homes to close escrow. 

Merchant Builder Program
------------------------

During the first quarter of 1999, no lot sales closed escrow and a net loss 
of $207,000 was recorded for the residential division after deducting 
operating expenses. However, 1,200 residential lots will be marketed in 1999. 
The major emphasis for lot sales is at Bridgeport, the Company's new lake 
lifestyle village, where two builders are currently in escrow with 273 lots 
on 33 acres for $26.4 million with closings scheduled later this year. All 
escrow closings are subject to market and other conditions. 

Bridgeport, when fully developed, will offer a broad spectrum of housing 
opportunities including homes on a gated island, and its amenities include a 
private beach club, an elementary school and park. There is substantial 
interest by merchant builders in the remaining lots in Bridgeport and three 
builders have been selected to bid on each of the remaining parcels. The 
Company is in serious negotiations with Kaufman & Broad Home Corporation for 
the remaining 294 lots in the Hasley Hills area north of Valencia. This 
summer, Kaufman & Broad expects to begin selling homes on 445 residential 
lots purchased from the Company last year in the Hasley Hills area. 

In the 1998 first quarter, 37 residential lots in Valencia NorthPark closed 
escrow adding $2.6 million to revenues and $724,000 to income. The 1998 first 
quarter also included revenues totaling $1.9 million and income of $603,000 
recognized from prior residential lot sales under percentage of completion 
accounting. At March 31, 1998, 445 unimproved residential lots were in escrow 
for $12.5 million. 

Joint Venture Program
---------------------

In the 1999 first quarter, 26 escrow closings at Cheyenne, a joint venture 
with EPAC for 166 townhomes, contributed $4.2 million to revenues and 
$304,000 to income. At March 31, 1999, 95 homes remained in this project of 
which 31 homes were in escrow and 19 had been reserved. At Avignon, also a 
joint venture with EPAC, of the 48 homes remaining in this luxury 76-townhome 
project, 26 homes were in escrow and three had been reserved at March 31, 
1999. To increase absorption in a strong market, the Company is now 
concentrating its efforts on lot sales to merchant buildings and no new joint 
ventures are planned in 1999. 

During the first quarter of 1998, 18 escrow closings at Nouvelle, a joint 
venture with Warmington Homes, contributed $4.0 million to revenues and 
$351,000 to income. Cheyenne opened during the 1998 first quarter and, at the 
end of the quarter, 45 of the 49 homes released for sale had been reserved. 
At Avignon, of 29 homes released for sale, 12 were in escrow and seven were 
reserved at March 31, 1998. A total of 32 joint-venture homes were in escrow 
at March 31, 1998. 

INDUSTRIAL AND COMMERCIAL SALES 

In the 1999 first quarter, escrow closed on four industrial parcels in 
Valencia Commerce Center. Sale of these parcels, totaling 15.1 acres, 
contributed $6.9 million to revenues and $1.0 million to income. One of the 
parcels, consisting of 8.5 acres, will be developed with a 
170,000-square-foot build-to-suit with escrow closing on the 

                                       8

<PAGE>

building upon completion. Also during the quarter, escrow closed on the 
Company's last remaining large parcel at the Cowell Ranch in northern 
California. The sale contributed $8.2 million to income in the first quarter 
of 1999. 

At March 31, 1999, five industrial parcels totaling 16.5 acres for $13.9 
million including a 110,000-square-foot build-to-suit on 5.2 acres and five 
commercial parcels totaling 41.5 acres for $38.4 million were in escrow with 
closings scheduled during the remainder of 1999. The largest commercial 
parcel, a 32.8-acre site for $31.8 million, has been approved for 900 
apartments in South River adjacent to Valencia Town Center. This sale is 
expected to contribute approximately $18.8 million to income in 1999 and is 
scheduled to close during the second quarter. The sale is evidence of the 
strong demand for apartments and the high values for land adjacent to 
Valencia Town Center. All escrow closings are subject to market and other 
conditions. 

After two years of record land sales, which ultimately will add 5,000 new 
jobs, the Company's primary marketing efforts this year are concentrated on 
absorbing new space being built. While the Company's goal is to sell an 
average of about 70 acres annually, this year will likely be in the 30 - 50 
acre range, due to the high level of activity in 1998. However, strong 
interest has been expressed in some available large parcels in Valencia 
Commerce Center which may increase the activity level in 1999. 

Even with record industrial sales in 1998, the vacancy rate in Valencia's two 
industrial parks was 3.5% at March 31, 1999. This compares with an all-time 
low of 5.4% throughout Los Angeles County where there is a shortage of 
developable land and suitable buildings to meet the expansion needs of 
growing companies. The Company has approximately 500 acres of industrial land 
available for sale in Valencia, which will support about 10 million square 
feet of building space. Industrial acreage also is planned for the Newhall 
Ranch project adjacent to Valencia. 

In the first quarter of 1998, two industrial parcels totaling 3.9 acres 
closed escrow, contributing $1.9 million to revenues and $511,000 to income. 
In addition, one small industrial building on one-half acre closed escrow as 
part of the Company's build-to-suit and build-to-lease program for $720,000, 
adding $94,000 to income. After deducting for operating expenses, a net loss 
of $599,000 was recorded for the first quarter of 1998. 

COMMUNITY DEVELOPMENT 

The Company's community development activities are focused on securing the 
necessary entitlements as well as an intensified strategic marketing program 
to support the buildout of Valencia by 2005 and begin the development of 
Newhall Ranch, the next new town to be developed on the Company's 12,000 
acres west of Valencia. The Company's ability to achieve its goals and 
increase the pace of development is contingent upon obtaining the necessary 
entitlements from the County of Los Angeles and the City of Santa Clarita. 

On March 23, 1999, the Los Angeles County Board of Supervisors gave final 
approval for the 21,600-home Newhall Ranch project. The project will include 
1,000 gross acres of commercial, industrial and mixed-use development and 
feature the dedication of over 6,100 acres of high country and river open 
space to the community. As part of the Board's action, the Environmental 
Impact Report (EIR) was certified and approval given to the general plan 
amendment, zoning change, and tentative parcel map associated with the 
Newhall Ranch Specific Plan. In approving the parcel map, the project was 
subdivided into 30 parcels, adding further value to the land. The Company 
will begin processing subdivision maps and applications for permits, which 
need approval before development can begin. Initial development is expected 
to start in 2002. 

As a result of the final approval, four separate petitions have been filed 
against the County of Los Angeles and the Los Angeles County Board of 
Supervisors, and name the Company as a real party in interest. The four 
actions are petitions for Writs of Mandate and were filed in the Ventura 
County (California) Superior Court. The petitions were filed by: 1) Ventura 
County (California), Ventura County Flood Control District, Ventura County 
Air Pollution Control District and certain municipalities located within the 
County of Ventura (petition filed on April 21, 1999); 2) United Water 
Conservation District (petition filed on April 21, 1999); 3) Sierra Club, 
Friends of the Santa Clara River and Santa Clarita Organization for Planning 
the Environment (petition filed on April 22, 1999); and 4) Maria Vega, et al. 
(petition filed on April 22, 1999). In general, the petitions allege 
violation of the California Subdivision Map Act for illegally subdividing 
parcels that cross the county border; violations of the California 
Environmental Quality Act; inconsistency between the Los Angeles County 
General Plan and Specific Plan; and violation of the housing element of the 
County General Plan as it relates to affordability and discrimination. 

The Company prepared the EIR in a thorough manner and is confident that it 
can withstand legal challenge. Moreover, the Company believes that many of 
the issues raised in the petitions were addressed and resolved during the 
administrative process before the Los Angeles County Board of Supervisors. 

                                       9

<PAGE>

PART I.  FINANCIAL INFORMATION

ITEM 2.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION 
         AND RESULTS OF OPERATIONS.

The Board of Supervisors also gave initial approval to the Company's 
1,711-home Westridge Golf Course Community on March 23, 1999. Final approval 
is expected this summer. This community will surround a Tournament Players 
Club (TPC) championship golf course, a joint venture between Newhall Land and 
PGA TOUR Golf Course Properties. 

Community development expenses increased 22% in 1999 from the prior year 
first quarter primarily due to entitlement expenses for Newhall Ranch. With 
the continued focus on obtaining entitlements and strategic marketing to 
support forecasted demand, expenses for the year are expected to continue at 
or exceed this increased level over 1998. 

For the 1998 first quarter, entitlement-related expenses decreased by 22% 
from the prior year quarter due to final approvals received for several 
Valencia projects in 1997, including North Hills, which was sold to Taylor 
Woodrow in 1997. Additional approvals received in 1997 included 458 homes in 
Decoro Highlands, 900 apartments in South River and 1,100 homes in the 
Bridgeport lake community. 

INCOME-PRODUCING PROPERTIES 

The Company's commercial portfolio is a relatively stable source of earnings 
and cash flow that also provides debt capacity to grow the Company and 
working capital for continuing operations. For the first quarter of 1999, 
revenues increased 17% and income decreased 31% from the year earlier 
quarter. Increased depreciation associated with new properties and the 
strategic sale of Valencia Marketplace in June 1998 contributed to the 
variances in revenues and income. These factors will result in 1999 earnings 
from the portfolio being lower than in 1998. 

Contributing to the income portfolio's 1999 results were excellent retail and 
apartment occupancy rates and favorable rents. Among the new projects, 54,000 
square feet of new retail space completed in the fourth quarter of 1998 along 
Town Center Drive is 56% leased and tenant improvements are underway at Town 
Center Plaza, the 26,000 square feet of retail and office space adjacent to 
the new Hyatt Valencia Hotel, which is 60% leased. The entertainment complex, 
which will include an IMAX 3-D Theatre, 11 additional movie screens, a 
Borders bookstore, restaurants and other retail space, will open this summer 
and is 80% leased. 

The Company's shopping centers are all performing well with high occupancy 
rates. At March 31, 1999, occupancy at Valencia Town Center shopping mall was 
97% leased including short-term tenants. At NorthPark Village Square, 
Rite-Aid opened in a 16,700-square-foot building in February and 5,600 square 
feet of additional space is being marketed. River Oaks and Castaic Village 
neighborhood shopping centers were 100% and 99% leased, respectively. Plaza 
del Rancho, the mixed-use project in Valencia Industrial Center, which opened 
in the summer of 1998, was 93% leased with plans for expansion. 

Vacancy rates at the Company's three apartment complexes have improved 
following a decline in the fourth quarter of 1998 with occupancy averaging 
91% at March 31, 1999. With new jobs being created throughout Valencia, 
demand for apartments is increasing. To meet this demand, the Company has 525 
apartments under construction or planned to start this year. Montecito, a 
210-unit, high-end apartment complex in Valencia Town Center, is scheduled 
for completion this summer, with move-ins scheduled beginning in June. These 
rental homes, including 14 townhouses, overlook Valencia Country Club and 
will command the highest rents in the Valencia area. Montecito is currently 
being pre-leased, even without models. Construction is expected to start 
later this year on a second apartment project with 315 units in Valencia 
NorthPark. These apartments will be larger in size than Montecito, appealing 
to families. 

As the number of commercial income properties built each year increases, 
sales of mature income properties may be made on a selective basis, allowing 
the Company to benefit from strong capitalization rates and to maximize the 
return on its investment in the portfolio as a whole.

VALENCIA WATER COMPANY 

Valencia Water Company is a regulated public water utility and a wholly owned 
subsidiary of the Company. Revenues and income from Valencia Water Company 
increased 30% and 26% in 1999, respectively, from the prior year first 
quarter as the utility continued to expand its metered customer base which 
now exceeds 20,000. Results for 1999 should improve over the previous year, 
with drier weather already experienced this year and an expanded customer 
base. 

                                       10

<PAGE>

PART I.  FINANCIAL INFORMATION

ITEM 2.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION 
         AND RESULTS OF OPERATIONS.

AGRICULTURAL OPERATIONS 

Revenues and income from agriculture and energy operations decreased by 33% 
and 73%, respectively, for the 1999 first quarter due to lower oil and gas 
prices and additional income recognized in the first quarter of 1998 for crop 
price adjustments. 

RANCH SALES 

The Company's three remaining parcels totaling 3,077 acres at the Merced 
Ranch closed escrow during the 1999 first quarter adding $4.0 million to 
revenues and $2.8 million to income. The sale is part of a strategic plan to 
sell land not suitable for development. As part of that plan, the remaining 
36,000 acres at the Suey Ranch in Santa Barbara and San Luis Obispo counties 
are being marketed. No sale of farmland was completed in the 1998 first 
quarter. 

GENERAL AND ADMINISTRATIVE EXPENSE 

In the 1999 first quarter, general and administrative expenses were 
approximately the same as the prior year quarter. For the year, general and 
administrative expenses are expected to be approximately the same as in 1998. 

EXPENSE FROM UNIT OWNERSHIP PLANS

In the 1998 first quarter, an expense of $400,000 was recorded for increases 
in the market price of partnership units in connection with appreciation 
rights on outstanding, non-qualified options granted prior to 1992. No 
expense was recorded in the 1999 first quarter. 

INTEREST AND OTHER 

Increased debt outstanding against lines of credit in the current year 
partially offset by higher interest income from notes receivable from land 
sales are the primary factors contributing to a 9% increase in net interest 
expense. For the year, higher debt levels due to the continuing planned 
expansion of the Company's income portfolio and unit repurchases are expected 
to increase net interest expense compared to 1998.


                               FINANCIAL CONDITION

LIQUIDITY AND CAPITAL RESOURCES

At March 31, 1999, the Company had cash and cash equivalents of $692,000 and 
$63.9 million in available lines of credit to fund operations, net of $25.1 
million in letters of credit. Borrowings outstanding totaled $73 million 
against unsecured lines of credit and $40 million against a revolving 
mortgage facility. The Company believes it has adequate sources of cash from 
operations and debt capacity, including lines of credit, to finance future 
operations and take advantage of new development opportunities. At March 31, 
1999, there was no debt against raw land or land under development 
inventories. 

There are no material commitments for capital expenditures other than the 
Company's plans in the ordinary course of business to develop its portfolio 
of income-producing properties. In 1999, the Company expects to invest 
approximately $50 million in new income-producing properties. This follows 
the $100 million invested in 1998. In addition, approximately $30 million is 
expected to be invested into major roads and freeway improvements in 1999 to 
enable the Company to close additional land sales. 

In the 1999 first quarter, the Company repurchased 542,180 of its partnership 
units, or 1.7% of the amount outstanding at December 31, 1998, at an average 
price of $23.81. At March 31, 1999, 729,592 units remained authorized for 
repurchase from a one million unit repurchase program approved by the Board 
of Directors on January 20, 1999. The unit repurchases are being made because 
management and the Board believe the current price is at a significant 
discount from the underlying value and does not reflect the Company's current 
performance and future outlook. During 1998, a total of 1,909,613 units was 
repurchased, or 5.5% of the amount outstanding at the beginning of 1998, at 
an average price of $25.68.

On March 1, 1999, the Company completed the refinancing of a portfolio 
mortgage with a remaining principal balance of $44.6 million. The portfolio 
mortgage with Prudential had a rate of 8.995% and was secured by five of the 
Company's commercial properties. The Prudential loan was replaced by three 
financings totaling $50 million. The new loans are secured by the Company's 
three apartment complexes and will mature in ten years. The loans were 
obtained from the Federal Home Loan Mortgage Corporation at a 6.51% weighted 
average interest rate. 

                                       11

<PAGE>

PART I.  FINANCIAL INFORMATION

ITEM 2.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION 
         AND RESULTS OF OPERATIONS.

Annual interest savings on the refunded portion alone are $1.1 million. Net 
of the refunding payment and transaction costs, proceeds of $4.4 million were 
used to pay down lines of credit. 

The following discussion relates to principal items on the Consolidated
Statement of Cash Flows: 

Operating Activities
--------------------

Net cash used by operating activities totaled $4.3 million for the 1999 first 
quarter. Cash provided from operating activities included sales of 15.1 acres 
of industrial land, 26 joint-venture homes, three parcels totaling 3,077 
acres at the Merced Ranch and the Company's remaining acreage at the Cowell 
Ranch in northern California. These sales combined generated $15.2 million in 
cash and $11.2 million in notes.

Expenditures for land under development inventories totaled $16.4 million and 
were offset by $9.5 million in cost of sales relief. Expenditures for 
Valencia area land preparation, infrastructure and home construction totaled 
$15.3 million with the remainder primarily for agricultural crop costs. 

Investing Activities 
--------------------

Expenditures for development of income-producing properties totaled $14.0 
million for the first three months of 1999. Major expenditures included $3.4 
million for Montecito apartments and $7.9 million for various 
retail/office/entertainment projects in Valencia Town Center. Purchase of 
property and equipment was primarily for water utility construction. 

Financing Activities
--------------------

A quarterly distribution totaling $10.5 million was paid during the 1999 
first quarter which consisted of a $.10 per unit quarterly distribution and 
$.22 per unit special distribution. As previously discussed, on March 1, 
1999, a $44.6 million portfolio mortgage financing was replaced with three 
financings totaling $50 million secured by the Company's three apartment 
complexes. Borrowings against lines of credit increased by $48.2 million to 
$73 million during the 1999 first quarter. 

A total of 542,180 units was repurchased in the 1999 first quarter for $12.9 
million, or an average price of $23.81 per unit. The Company intends to 
continue buying units depending on market conditions with a goal of 
repurchasing at least 2 million units in 1999. 

YEAR 2000 ISSUE

The Year 2000 issue concerns the possibility that computer programs with 
date-sensitive software may recognize a date using "00" as the year 1900, 
rather than as the year 2000, because the programs were written using two 
digits rather than four to define the applicable year. This could result in a 
system failure or miscalculations causing disruptions of operations such as, 
among others, a temporary inability to process transactions or engage in 
normal business activities. 

READINESS: The Company's Year 2000 remediation efforts are progressing 
appropriately. At the end of 1997, a Year 2000 Task Force was formed to 
coordinate Company-wide efforts to be Year 2000 compliant. To date, the 
Company has inventoried its internal systems as well as identified systems 
and applications outside of the Company that may include imbedded computer 
technology that could be impacted by the Year 2000 Issue. 

As a result of the Company's comprehensive review of its internal systems in 
1997, and for other strategic reasons, the Company has replaced its 
computerized accounting system. The Company successfully converted to the new 
accounting system on January 1, 1999, except for the payroll and human 
resources subsystem which the Company plans to complete by June, 1999. The 
Company has completed the modification and testing of its own internally 
developed systems to be Year 2000 compliant and compatible with the new 
accounting system, all of which are currently in production. The Company is 
currently in the process of testing software provided by third parties for 
Year 2000 compliance, all of which have been previously confirmed by the 
vendor to be Year 2000 compliant. Completion of these tests is planned for 
the third quarter of 1999. 

COSTS: The Company estimates the total cost of its compliance efforts in 
connection with the Year 2000 Issue will be less than $400,000 and will be 
expensed as incurred. As of March 31, 1999, $150,000 had been expensed for 
this project, including $114,000 expensed in 1998. The majority of the 
expenditures are expected to be for testing existing third party supplied 
software for Year 2000 compliance. In addition, the cost of the new 
accounting system was approximately $1 million and has been capitalized and 
is being amortized over its useful life. 

                                       12

<PAGE>

PART I.  FINANCIAL INFORMATION

ITEM 2.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION 
         AND RESULTS OF OPERATIONS.

The cost of the Year 2000 Issue and the estimated completion dates are based 
on management's best estimates, which were derived utilizing assumptions of 
future events, including the continued availability of certain resources, 
third-party modification plans and other factors. There can be no guarantee 
that these estimates will prove accurate and actual results could differ from 
those estimated. 

RISKS: The Company believes the worst-case scenario for the Year 2000 Issue 
would be for the Company or a significant number of its business partners to 
fail to successfully complete their respective Year 2000 remediation efforts 
by December 31, 1999. Under this scenario, the Company's operations would 
most likely be disrupted which would result in a material adverse effect on 
its business, operating results and financial condition. 

CONTINGENCY PLANS: The Company expects to develop by June 1999 contingency 
plans for business partners that do not indicate Year 2000 compliance. There 
can be no assurance that any contingency plans developed by the Company will 
prevent any service interruption on the part of one or more of the Company's 
business partners or that such service interruption would not have a material 
adverse effect upon the Company's business, operating results or financial 
condition. A failure of the computer systems of a significant number of the 
Company's customers or business partners, or any of their financial 
institutions or lenders, would likely have a material adverse effect on the 
Company's business, operating results and financial condition. 

INFLATION, RISKS AND RELATED FACTORS AFFECTING FORWARD-LOOKING INFORMATION
--------------------------------------------------------------------------

This report and other published reports by the Company contain 
forward-looking statements regarding the status of proposed or pending sales 
and rental activity, future planned development, plus the long-term growth 
goals of the Company. The forward-looking statements made in this report are 
based, in part, on present trends the Company is experiencing in residential, 
industrial and commercial markets. Also, the Company's success in obtaining 
entitlements, governmental and environmental regulations, timing of escrow 
closings, expansion of its income portfolio and marketplace acceptance of its 
business strategies are among the factors that could affect results. The 
following risks and related factors, among others, should be taken into 
consideration in evaluating the future prospects for the Company. Actual 
results may materially differ from those predicted. 

SALES OF REAL ESTATE: The majority of the Company's revenues are generated by 
its real estate operations. The ability of the Company to consummate sales of 
real estate is dependent on various factors including, but not limited to, 
availability of financing to the buyer, regulatory and legal issues and 
successful completion of the buyer's due diligence. The fact that a real 
estate transaction has entered escrow does not necessarily mean that the 
transaction will ultimately close. Therefore, the timing of sales may differ 
from that anticipated by the Company. The inability to close sales as 
anticipated could adversely impact the recognition of revenue in any specific 
period. 

ECONOMIC CONDITIONS: Real estate development is significantly impacted by 
general and local economic conditions which are beyond the control of the 
Company. The Company's real estate operations are concentrated in Southern 
California. The regional economy is profoundly affected by the entertainment, 
technology, defense and certain other segments, which have been known to 
affect the region's demographics. Consequently, all sectors of real estate 
development for the Company tend to be cyclical. While the economy of 
Southern California has shown improvements recently, there can be no 
assurances that present trends will continue. 

INTEREST RATES AND FINANCING: Fluctuations in interest rates and the 
availability of financing have an important impact on the Company's 
performance. Sales of the Company's projects could be adversely impacted by 
the inability of buyers to obtain adequate financing. Further, the Company's 
real estate development activities are dependent on the availability of 
adequate sources of capital. Certain of the Company's credit facilities bear 
interest at variable rates and would be negatively impacted by increasing 
interest rates. 

COMPETITION: The sale and leasing of residential, industrial and commercial 
real estate is highly competitive, with competition coming from numerous and 
varied sources. The degree of competition is affected by such factors as the 
supply of real estate available which is comparable to that sold and leased 
by the Company and the level of demand for such real estate. The Company 
recently has experienced a slight decrease in its new home sale market share 
at both the local and the county level, due to the temporary decline in 
Valencia new home inventory. New competition is expected to deliver competing 
projects in the future that could impact the Company's ability to reverse 
this trend. 

GEOGRAPHIC CONCENTRATION: The Company's real estate development activities 
are focused on its 19,000 acres in Los Angeles County, 30 miles north of Los 
Angeles. The Company's entire commercial income portfolio is located in the 
Valencia area. Therefore, any factors affecting that concentrated area, such 
as changes in the housing 

                                       13

<PAGE>

PART I.  FINANCIAL INFORMATION

ITEM 2.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION 
         AND RESULTS OF OPERATIONS.

market, economic changes and environmental factors, including seismic 
activity, which cannot be predicted with certainty, could affect future 
results. 

GOVERNMENT REGULATION AND ENTITLEMENT RISKS: In developing its projects, the 
Company must obtain the approval of numerous governmental authorities 
regulating such matters as permitted land uses, density and traffic, and the 
providing of utility services such as electricity, water and waste disposal. 
In addition, the Company is subject to a variety of federal, state and local 
laws and regulations concerning protection of health and the environment. 
This government 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 comply with 
these requirements. To varying degrees, certain permits and approvals will be 
required to complete the developments currently being undertaken, or planned 
by the Company. Furthermore, the timing, cost and scope of planned projects 
may be subject to legal challenges, particularly large projects with regional 
impacts. 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 to obtain necessary 
approvals and permits for its projects can be beyond the Company's control 
and could restrict or prevent development of otherwise desirable new 
properties. The Company's results of operations in any period will be 
affected by the amount of entitled properties the Company has in inventory.

INFLATION: The Company believes it is well positioned against the 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. Recently, land values have been increasing at a
faster rate than costs. However, there are no assurances that this trend will
continue. A portion of the commercial income portfolio is protected from
inflation since percentage rent clauses and Consumer Price Index increases in
the Company's leases tend to adjust rental receipts for inflation, while the
underlying value of commercial properties has tended to rise over the long term.

Item 3. Quantitative and Qualitative Disclosures About Market Risk 
------------------------------------------------------------------

The Company is exposed to market risk primarily due to fluctuations in 
interest rates. The Company utilizes both fixed rate and variable rate debt. 
At March 31, 1999, the Company had $113 million of variable debt with 
interest rates ranging from 5.94% to 6.4% and $87.7 million of fixed rate 
debt with interest rates ranging from 6.51% to 8.45%. The table below 
presents principal cash flows and related weighted average interest rates of 
the Company's long-term fixed rate and variable rate debt, by expected 
maturity dates, as of March 31, 1999:

<TABLE>
<CAPTION>
                                                       Expected Maturity Date                                    Fair
DOLLARS IN THOUSANDS                   1999        2000     2001     2002      2003    Thereafter    Total       Value
                                     -------     -------   ------   ------   -------   ----------  ---------   ----------
<S>                                  <C>         <C>       <C>      <C>      <C>       <C>         <C>         <C>
Mortgage and Other Debt
  Fixed Rate Debt                    $ 1,234     $ 1,481   $1,596   $1,727   $11,226    $70,459     $ 87,723    $ 87,723
  Weighted Average Interest Rate        7.27%       7.19%    7.18%    7.17%     8.24%      6.89%        7.08%

  Variable Rate Debt (1)             $40,000     $73,000                                            $113,000    $113,000
  Weighted Average Interest Rate        6.63%       6.17%                                               6.33%
</TABLE>

(1)  The Company has a $40 million revolving mortgage facility which bears
     interest at LIBOR plus 1.0% or Wells Fargo Bank's prime rate, at the
     election of the Company. The Company also has a $159 million unsecured
     revolving line of credit on which the rate is LIBOR plus 1.2%. At March 31,
     1999, $73 million was outstanding against this line. The above assumes that
     these variable rate credit facilities are repaid at maturity. Management
     believes these lines will be renewed at maturity with similar terms.

There is inherent rollover risk for borrowings as they mature and are renewed 
at current market rates. The extent of this risk is not quantifiable or 
predictable because of the variability of future interest rates and the 
Company's future financing requirements. The Company manages its interest 
rate risk by maintaining conservative debt levels, spreading its scheduled 
debt amortization, by periodically converting short-term variable debt to 
long-term fixed rate debt, and by evaluating the merits of interest rate 
derivative products. At March 31, 1999, the Company did not have any interest 
rate derivative products or transactions.

                                       14

<PAGE>

PART II. OTHER INFORMATION

ITEM 1.  LEGAL PROCEEDINGS.

Please refer to "Community Development" under Part I, Item 2. - "Management's
Discussion and Analysis of Financial Condition and Results of Operations"
concerning writs of mandate filed in April 1999.

Item 6. Exhibits and Reports on Form 8-K
 (a)    Exhibits (listed by numbers corresponding to the Exhibit Table of 
        Item 601 in Regulation S-K):

        10       Amendment Number One Effective January 1, 1999 to Newhall 
                 Executive Incentive Plan (as amended July 11, 1990)
        27       Financial Data Schedule

 (b) The following report was filed on Form 8-K in the first quarter ended 
     March 31, 1999:

<TABLE>
<CAPTION>
         Date of Report                  Item Reported                  Financial Statements Filed
         --------------     ---------------------------------------     --------------------------
<S>      <C>                <C>                                         <C>
         March 24, 1999     Los Angeles County Board of Supervisors                None
                             gives final approval to Newhall Ranch

</TABLE>

                                       15
<PAGE>



                                   SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned 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: May 10, 1999           By      /s/ THOMAS L. LEE
                                    -----------------------------------------
                                       Thomas L. Lee, Chairman and 
                                       Chief Executive Officer of Newhall
                                       Management Corporation
                                       (Principal Executive Officer)


Date: May 10, 1999           By      /s/ STUART R. MORK
                                    -----------------------------------------
                                       Stuart R. Mork, Senior Vice President
                                       and Chief Financial Officer of Newhall
                                       Management Corporation
                                       (Principal Financial Officer)


Date: May 10, 1999           By      /s/ DONALD L. KIMBALL
                                    -----------------------------------------
                                       Donald L. Kimball, Vice President - 
                                       Finance and Controller of Newhall 
                                       Management Corporation
                                       (Principal Accounting Officer)


                                       16