The company also reported it has reached a settlement of itslawsuit and the related cross actions against Kerr-McGee Corp. andother firms regarding the firms' operations on property leased fromNewhall. As previously reported, Newhall filed a lawsuit in early2001 against a gas and oil-field operator to enforce contractualprovisions requiring the operator to remediate and restore theleased properties. The key terms of the settlement address thelevel of property remediation and restoration to be performed bythe operators, the timing of performance and the financial securityprovided to Newhall Land to assure completion of the remediationand restoration of the property.

Newhall also reported that it expects its net income for 2003 torange from $1.35 to $1.45 per unit. This is an increase over thepreviously reported range for this year's earnings of $1.15 to$1.25 per unit.

Gary Cusumano, president and CEO, says Newhall continues to seekgovernmental approvals to complete the previously announcedacquisition of the company by Lennar Corp. and LNR Property Corp.Newhall and the Lennar-LNR joint venture agreed to the merger inJuly, subject to pending approvals by unitholders and theCalifornia Public Utilities Commission, as well as customaryclosing conditions.