10-K

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

For the fiscal year ended December 31, 2013

OR

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

For the transition period from ___________ to ___________

Commission file number:  1-10153

HOMEFED CORPORATION

(Exact Name of Registrant as Specified in its Charter)

Delaware	33-0304982
(State or other Jurisdiction of Incorporation or Organization)	(I.R.S. Employer Identification No.)

1903 Wright Place, Suite 220

Carlsbad, California  92008

(760) 918-8200

(Address, Including Zip Code, and Telephone Number, Including Area Code, of Registrant’s Principal Executive Offices)

Securities registered pursuant to Section 12(b) of the Act:  None.

Securities registered pursuant to Section 12(g) of the Act:

Common Stock, par value $.01 per share

(Title of Class)

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act.  Yes [   ]  No  [x]

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act.  Yes  [  ] No  [x]

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 whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).      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]. 

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See definitions of “large accelerated filer," "accelerated filer,” and "smaller reporting company" in Rule 12b-2 of the Exchange Act. (Check one):

Large accelerated filer	[   ]	Accelerated filer	[ x ]
Non-accelerated filer	[   ]	Smaller reporting company	[    ]

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12-b of the Exchange Act).  Yes  [  ]    No  [x]

Based on the average bid and asked prices of the Registrant’s Common Stock as published by the OTC Bulletin Board Service as of June 30, 2013, the aggregate market value of the Registrant’s Common Stock held by non-affiliates was approximately $131,276,500 on that date.

As of February 6, 2014, there were 7,879,500 outstanding shares of the Registrant’s Common Stock, par value $.01 per share.

DOCUMENTS INCORPORATED BY REFERENCE

The information required to be included in Part III of this Annual Report on Form 10-K will be provided in accordance with Instruction (G) to Form 10-K no later than April 30, 2014.

PART I

Item 1.  Business.

THE COMPANY

Introduction

HomeFed Corporation (“HomeFed”) was incorporated in Delaware in 1988.  As used herein, the term “Company” refers to HomeFed and its subsidiaries, except as the context may otherwise require.  The Company is currently engaged, directly and through subsidiaries, in the investment in and development of residential real estate projects in California and Virginia.  The Company also investigates the acquisition of new real estate projects, both residential and commercial.  However, no assurance can be given that the Company will find new investments providing a satisfactory return or, if found, that the Company will have access to the capital necessary to make new real estate investments.  The executive office of the Company is located at 1903 Wright Place, Suite 220, Carlsbad, California 92008.

The Company’s current development projects consist of three master-planned communities: San Elijo Hills and a portion of the larger Otay Ranch planning area, both located in San Diego County, California, and Ashville Park located in Virginia Beach, Virginia.  The Company also owns the Rampage property, a 1,544 acre grape vineyard located in southern Madera County, California, which is not currently entitled for commercial or residential development, and the Fanita Ranch property, a 2,600 acre parcel of vacant land located in Santee, California.

As the owner of development projects, the Company is responsible for the completion of a wide range of activities, including design engineering, grading raw land, constructing public infrastructure such as streets, utilities and public facilities, and finishing individual lots for home sites or other facilities.  Prior to commencement of development, the Company may engage in incidental activities to maintain the value of the project; such activities are not treated as a separate operating segment.  The Company develops and markets its communities in phases to allow itself the flexibility to sell finished lots to suit market conditions and to enable it to create stable and attractive neighborhoods.  Consequently, at any particular time, the various phases of a project will be in different stages of land development and construction.  In addition, from time to time the Company has received expressions of interest from buyers for multiple phases of a project, or the remaining undeveloped land of an entire project.  The Company evaluates these proposals when it receives them, but no assurance can be given that the Company will sell all or any portion of its development projects in such a manner.

For any master-planned community, plans must be prepared that provide for infrastructure, neighborhoods, commercial and industrial areas, educational and other institutional or public facilities, adequate water supply, as well as open space, in compliance with regulations regarding reduction in emissions of greenhouse gasses.  Once preliminary plans have been prepared, numerous governmental approvals, licenses, permits and agreements, referred to as “entitlements,” must be obtained before development and construction may commence.  These often involve a number of different governmental jurisdictions and agencies, challenges through litigation, considerable risk and expense, and substantial delays.  Unless and until the requisite entitlements are received and substantial work has been commenced in reliance upon such entitlements, a developer generally does not have full “vested rights” to develop a project, and as a result, allocation of acreage between developable and non-developable land may change.  In addition, as a precondition to receipt of building-related permits, master-planned communities are typically required to pay impact and capacity fees, or to otherwise satisfy mitigation requirements.

Current Development Projects

San Elijo Hills

In 2002, the Company purchased from Leucadia National Corporation (“Leucadia”)  all of the issued and outstanding shares of capital stock of CDS Holding Corporation (“CDS”), which through its subsidiaries is the owner of the San Elijo Hills project (title is owned in fee simple).  The San Elijo Hills project, a master-planned community located in the City of San Marcos in San Diego County, California, will be a community of approximately 3,500 homes and apartments, as well as a commercial and residential Towncenter.  Since August 1998, the Company has been the development manager for this project, with responsibility for the overall management of the project, including, among other things, preserving existing entitlements and obtaining any additional entitlements required for the project, arranging financing for the project, coordinating marketing and sales activity, and acting as the construction manager.  The development management agreement provides that the Company receive fees for the field overhead, management and marketing services it provides (“development management fees”), based on the revenues of the project. 

When acquired in 2002, the Company had an effective 68% indirect equity interest in the San Elijo Hills project, after considering noncontrolling interests held by former owners of the project.  In December 2012, the Company purchased one of the

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noncontrolling interests; as a result the Company’s interest in the San Elijo Hills project is now 85%.  Before amounts are distributed to the remaining noncontrolling shareholders, the Company has the right to receive repayment of any amounts advanced by it to the project and to receive a preferred return on any advances.  For more information on the noncontrolling interests, see Note 5 of Notes to Consolidated Financial Statements.

Current Market Developments: Throughout much of the period that the Company has been developing the San Elijo Hills project, the Company’s sales efforts greatly benefited from a strong regional and national residential housing market.  However, beginning in 2006, residential property sales volume, prices and new building starts declined significantly in many U.S. markets, including California and the greater San Diego region, which negatively affected sales and profits.  The slowdown in residential sales was exacerbated by the turmoil in the mortgage lending and credit markets, which resulted in stricter lending standards and reduced liquidity for prospective home buyers.  Sales of new homes and re-sales of existing homes declined substantially from the early years of the project’s development; based on information obtained from homebuilders and other public sources, the Company estimates that total home sales (both new and re-sales) at the San Elijo Hills project were approximately 376 in 2013 as compared to 860 in 2004.  As of December 31, 2013, the San Elijo Hills project has sold 2,204 of its 2,382 single family lots and 1,071 of its 1,081 multi-family units.  The single family lots sold do not include 52 previously sold lots that were repurchased in 2012 and are currently available for sale.

Interest from homebuilders concerning the San Elijo Hills project’s remaining single family lots and multi-family units has increased since late 2009, and the Company has been able to sell some single family lots and multi-family units at acceptable prices.  Although recent homebuilder interest and sales activity in the project are encouraging, it is uncertain if the Company will be able to sell its remaining inventory at prices it finds acceptable.  The Company has substantially completed development of all of its remaining residential single family lots at the San Elijo Hills project, many of which are “premium” lots which are expected to command premium prices if, and when, the market fully recovers.  The Company believes that by exercising patience and waiting for market conditions to improve it can best maximize shareholder value with its remaining residential lot inventory.  However, on an ongoing basis the Company evaluates the local real estate market and economic conditions in general, and updates its expectations of future market conditions as it continues to assess the best time to market its remaining residential lot inventory for sale. 

Estimates of future property available for sale, the timing of the sales, selling prices and future development costs are based upon current development plans for the project and will change based on the strength of the real estate market or other factors that are not within the control of the Company.

Sales Activity:  The table below summarizes sales activity at the San Elijo Hills project during the last three years.  Since the Company is obligated to complete certain improvements to the lots sold, a portion of the revenue from sales of real estate is deferred, and is recognized as revenues upon the completion of the required improvements to the property, including costs related to common areas, under the percentage of completion method of accounting.  As of December 31, 2013, $1,200,000 of revenue has been deferred pending completion of the required improvements.

	For the Year Ended December 31,
		2013		2012		2011
	(Dollars in thousands)
Number of residential units sold (1)		87		72		93
Aggregate sales proceeds from sales of residential
units, net of closing costs	$	33,200	$	20,900	$	25,600
Aggregate proceeds from the sales of
non-residential sites, net of closing costs (2)	$	5,800	$	-	$	1,950
Development management fees earned (3)	$	2,250	$	1,200	$	1,550

(1)Units are comprised of single family lots, multi-family units and residential condominium units.

(2)Reflects the sales of a school site in 2013, and a daycare center and bank site in 2011.

(3)Development management fees are intercompany payments, which are eliminated in consolidation and therefore not reflected in the Company’s consolidated statements of operations, but which are a source of liquidity for the parent company.

As of December 31, 2013, the remaining land at the San Elijo Hills project to be sold or leased consists of the following (including real estate under contract for sale):

Single family lots	178
Multi-family units	10
Square footage of commercial space	37,800

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The Towncenter includes multi-family residential units and commercial space, which are being constructed in phases.  The Company has completed construction of the first phase of the Towncenter, which included 12 residential condominium units, all of which have been sold, and 11,000 square feet of commercial space, all of which has been leased.  The plan for phase two of the Towncenter has not yet been developed.

Ashville Park

In February 2012, the Company acquired Ashville Park, a 450 acre master planned community located in Virginia Beach, Virginia, for cash consideration of $17,350,000 including closing costs.  The Company acquired 451 entitled single family lots, of which 91 lots were finished lots that were available for sale and one lot was a visitor center.  The project is being developed in phases, with the first phase (Village A) including the acquired finished lots and the second phase (Village B) a 164 lot development.  The timing of the development and sale of the remaining 280 lots (as of February 6, 2014) and the visitor center is uncertain.

During 2013, the Company sold 90 lots from Village B for aggregate cash consideration of $9,000,000.  During 2013 and 2012, the Company sold 22 and 54 lots from Village A for aggregate cash consideration of $3,900,000 and $8,200,000 (including one lot with a completed home), respectively.  Since the Company is obligated to complete certain improvements to the lots sold, a portion of the revenue from sales of real estate is deferred, and is recognized as revenues upon the completion of the required improvements to the property, including costs related to common areas, under the percentage of completion method of accounting.  As of December 31, 2013, $1,500,000 of revenue has been deferred pending completion of the required improvements.

Otay Ranch

In October 1998, our subsidiary Otay Land Company, LLC (“Otay Land Company”) acquired approximately 4,850 non-adjoining acres of land located within the larger 22,900 acre Otay Ranch master-planned community south of San Diego, California (title is owned in fee simple).  The City of Chula Vista and the County of San Diego approved a General Development Plan (“GDP”) for the larger planning area in 1993.

Since acquisition, Otay Land Company has disposed of part of its land in several sales transactions and an eminent domain proceeding.  After considering these dispositions, Otay Land Company owns approximately 2,800 acres, of which the total developable area is approximately 700 acres, including approximately 170 acres of land designated as “Limited Development Area and Common Use Area.”  The remaining approximately 2,100 acres are designated as various qualities of non-developable open space mitigation land.  Under the GDP, 1.188 acres of open space mitigation land from within the Otay Ranch project must be dedicated to the government for each 1.0 acre of land that is developed, excluding land designated Limited Development Area and Common Use Area.

Although there is no specified time within which implementation of the GDP must be completed, it is expected that full development of the larger planning area will take many years.  The GDP establishes land use goals, objectives and policies within the larger planning area.  The GDP for the larger planning area contemplates home sites, a golf-oriented resort and residential community, commercial retail centers, a proposed university site and a network of infrastructure, including roads and highways, a public transportation system, park systems and schools.  Any development within the larger Otay Ranch master-planned community must be consistent with the GDP.  While the GDP can be amended, subject to approval by either or both the City of Chula Vista and the County of San Diego, Otay Land Company has certain vested and contractual rights, pursuant to a development agreement, that protect its development interests in Chula Vista, covering substantially all of its developable land.  However, actual land development will require that further entitlements and approvals be obtained. 

Some owners of development land have adequate or excess mitigation land, while other owners lack sufficient acreage of mitigation land to cover their inventory of development land.  Otay Land Company currently has substantially more mitigation land than it would need to develop its property at this project.  Based upon the GDP conditions, this land could have value to other developers within the larger Otay Ranch development area as their development progresses; however, this is partially dependent upon other parties with developable land fully developing their land.  Should other owners choose not to develop their developable land, there will be an excess of mitigation land in Otay Ranch.  In that event, Otay Land Company will have to find buyers for its mitigation land outside the GDP area, which the Company believes it can do. 

The Company continues to evaluate how to maximize the value of this investment while processing further entitlements on portions of its property.  The Company has been working with the City of Chula Vista and other developers on a GDP amendmentfor the overall Otay Ranch area.  In April 2008, the City of Chula Vista approved an agreement whereby the Company dedicated 50 acres of development land in the Otay Ranch project and 160 acres of open space land in the unincorporated area of San Diego County and committed to pay an endowment of $2,000,000 (of which $1,000,000 has been paid) to fund costs associated with establishing a higher education facility on the property.  Subject to numerous public hearings and the discretionary action of the City Council, the City committed to allocate a maximum of 6,050 residential units and 1.8 million square feet of commercial development space to the Company’s project, and agreed to process its development applications by August 2011.  The Company's development applications have not as yet been fully approved.  However, in December 2013, the entitlements for the Otay Ranch Village 8 were

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approved by the Chula Vista City Council, which includes approvals for the future development of up to 1,429 multi-family and 621 single family units.  This flexible development plan also provides for up to 300,000 square feet of retail and office use.  The Company continues to work with the City to obtain the remaining approvals while retaining its rights to seek a refund of the endowment funds and return of the land should the full project approvals ultimately not be received.

During 2007, the San Diego Expressway Limited Partnership (“SDELP”) completed construction of a toll road designated as SR 125 through south San Diego County.  This toll road runs along the western border of one of Otay Land Company’s land parcels and is a quarter mile east of another.  The toll road was designed with one or more interchanges, which have yet to be built, on or adjacent to land parcels owned by the Company.  When complete, these interchanges will significantly improve access to this area in the southern portion of Otay Ranch, which could increase the value of the Company’s land.  Otay Land Company and other adjacent property owners will need to negotiate with the City of Chula Vista and SDELP regarding the construction timing and financing of interchanges that will provide access to SR 125.

Significant design and processing will be required to fully entitle the Company’s property in Otay Ranch before development and sale of the finished neighborhoods to builders can begin, and there can be no assurance that the Company will be successful in receiving the entitlements necessary for any future development.  If or when development does occur, it will likely be phased based on market conditions at the time of development and the progress of infrastructure improvements.  As a result, the Company is unable to predict when revenues will be derived from this project.  The ultimate development of projects of this type is subject to significant governmental and environmental regulation and approval and is likely to take many years.  For additional information concerning governmental and environmental matters, see “Government Regulation” and “Environmental Compliance” below.

A map indicating the location of the Chula Vista General Plan area in San Diego County and a more detailed map showing general information about the Company's land within that General Plan area can be found on Otay Land Company's website at www.otaylandcompany.com.

Other Projects

Rampage Property

The Company owns a 1,544 acre grape vineyard located in southern Madera County, California (title is owned in fee simple) that was purchased in 2003.  Although this property is not currently entitled for residential development, it is located in a growing residential area northwest of Fresno, California.  The Company purchased this land with the intention of obtaining the necessary entitlements to develop the property as a master-planned community, including meeting requirements with respect to adequate water supply.  In California, laws require that any large size residential community have sufficient water supplies to meet the water demands of the project for a period of 20 years.  A preliminary site plan for development of the Rampage property showed that the land would support a master-planned community, but even if all entitlements are received, the build out and sale of homes will take many years.  The entitlement process takes several years and no assurance can be given that such entitlements will be obtained, or that that future market conditions will support development of the Rampage property into a master-planned community.  In the interim, the Company has been conducting farming activities at the vineyard and, starting in 2010, has been generating positive cash flows from selling grapes.

The Company continues to evaluate its plans for the Rampage property.  During 2011, the Company engaged a real estate brokerage firm to sell the Rampage property but the Company did not receive any offers it found acceptable.  While a sale of the property in the future is possible, the Company continues to conduct farming activities while it explores possible development as a master-planned community.  For the years ended December 31, 2013, 2012 and 2011, farming revenues from the Rampage property were $4,900,000, $6,400,000 and $6,000,000, respectively, and farming expenses were $2,850,000 for each of the years ended December 31, 2013, 2012 and 2011.

Fanita Ranch

In January 2011, the Company acquired in a foreclosure sale the Fanita Ranch property, a 2,600 acre parcel of vacant land located in Santee, California, for aggregate consideration of $12,350,000.  The City of Santee is located at the intersection of SR125 and SR52 in East San Diego County, about a 30 minute drive from downtown San Diego.  Fanita Ranch is a master-planned community that is approved for approximately 1,400 residential units. The project’s Environmental Impact Report (“EIR”) and development agreement with the City of Santee were approved in 2007.

During 2013, the existing project entitlements for the Fanita Ranch property were successfully challenged under the California Environmental Quality Act (“CEQA”) related to alleged defects in the EIR.  As a result, the City of Santee has decertified the project’s EIR and rescinded the project’s discretionary approvals pending City compliance with the court order.  The Company continues to evaluate its options, which could include addressing the defects in the existing entitlements or submitting an entirely new plan for the project. 

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If the Company is successful in obtaining a new EIR, the timing of which is uncertain, there are no assurances that real estate market conditions, or costs of construction, will allow the project to be profitably developed as currently planned.  The Company acquired the property with the intention of completing the necessary entitlements to develop the property as a master-planned community, although there can be no assurance that the Company will be successful in these efforts.  If successful, obtaining all the entitlements is expected to take years.

Competition

Real estate development is a highly competitive business.  There are numerous residential real estate developers and development projects operating in the same geographic areas in which the Company operates.  Competition among real estate developers and development projects is determined by the location of the real estate, the market appeal of the development plan, and the developer’s ability to build, market and deliver project segments on a timely basis.  Many of the Company’s competitors may have greater financial resources and/or access to cheaper capital than the Company.  Residential developers sell to homebuilders, who compete based on location, price, market segmentation, product design and reputation.

Government Regulation

The residential real estate development industry is subject to substantial environmental, building, construction, zoning and real estate regulations that are imposed by various federal, state and local authorities.  In developing a community, the Company must obtain the approval of numerous government agencies regarding such matters as permitted land uses, housing density, the installation of utility services (such as water, sewer, gas, electric, telephone and cable television) and the dedication of acreage for open space, parks, schools and other community purposes.  Regulations affect homebuilding by specifying, among other things, the type and quality of building materials that must be used, certain aspects of land use and building design and the manner in which homebuilders may conduct their sales, operations, and overall relationships with potential home buyers.  Furthermore, changes in prevailing local circumstances or applicable laws may require additional approvals, or modifications of approvals previously obtained.

Timing of the initiation and completion of development projects depends upon receipt of necessary authorizations and approvals.  Because of the provisional nature of these approvals and the concerns of various environmental and public interest groups, the approval process can be delayed by withdrawals or modifications of preliminary approvals and by litigation and appeals challenging development rights. The ability of the Company to develop projects could be delayed or prevented due to litigation challenging previously obtained governmental approvals. The Company may also be subject to periodic delays or may be precluded entirely from developing in certain communities due to building moratoriums or "slow-growth" or "no-growth" initiatives that could be implemented in the future.  Such delays could adversely affect the Company’s ability to complete its projects, significantly increase the costs of doing so or drive potential customers to purchase competitors’ products.

Environmental Compliance

Environmental laws may cause the Company to incur substantial compliance, mitigation and other costs, may restrict or prohibit development in certain areas and may delay completion of the Company’s development projects.  Delays arising from compliance with environmental laws and regulations could adversely affect the Company’s ability to complete its projects and significantly increase development costs.

Under various federal, state and local environmental laws, an owner or operator of real property may become liable for the costs of the investigation, removal and remediation of hazardous or toxic substances at that property.  These laws often impose liability without regard to whether the owner or operator knew of, or was responsible for, the presence of the hazardous or toxic substances.  In addition to remediation actions brought by federal, state and local agencies, the presence of hazardous substances on a property could result in personal injury, contribution or other claims by private parties.  We have not received any claim or notification from any private party or governmental authority concerning environmental conditions at any of our properties other than as disclosed below.

The Company obtained a preliminary remediation study concerning approximately 30 acres of undeveloped land in the Otay Ranch master-planned community that is owned by a subsidiary of Otay Land Company, Flat Rock Land Company, LLC (“Flat Rock”).  Flat Rock owns approximately 260 acres of the Company’s total holdings in the Otay Ranch area, including 100 developable acres.  The need for remediation results from activities conducted on the land prior to Otay Land Company’s ownership.  Based upon the preliminary findings of this study, in 2002 the Company estimated that the cost to implement the most likely remediation alternative would be approximately $11,150,000, and accrued that amount as an operating expense.  The estimated liability was neither discounted nor reduced for claims for recovery from previous owners and users of the land who may be liable, and may increase or decrease based upon the actual extent and nature of the remediation required, the actual cost of the remediation, the expenses of the regulatory process, the costs of post-remediation monitoring requirements, inflation and other items.

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The Company periodically examines, and when appropriate, adjusts its liability for environmental remediation to reflect its current best estimate.  During 2004, the Company increased its estimate of remediation costs by approximately $1,300,000, primarily due to increases in site investigation and remediation costs, and during 2003 by approximately $250,000, primarily for consulting costs.  During 2012, the Company revised its estimate of future remediation costs, including on-going monitoring expenses, which resulted in a reduction in the previously accrued estimate of $1,500,000.   Such amount was reflected on the consolidated statement of operations as a reduction to expenses.

During the fourth quarter of 2012, upon receipt of required approvals, the Company commenced remediation activities, which were completed in February 2013.  The Company received final approval from the County of San Diego Department of Environmental Health in June 2013; as a result, the Company reduced its liability for environmental remediation by $650,000.

Otay Land Company and Flat Rock have commenced a lawsuit in California Superior Court seeking compensation from the parties who Otay Land Company and Flat Rock believe are responsible for the contamination of the property.  The trial in this matter is expected to conclude in 2014.  The Company can give no assurances that this lawsuit will be successful, or that it will be able to recover any of the costs incurred in investigating and/or remediating the contamination.   

Employees

At December 31, 2013, the Company and its consolidated subsidiaries had 16 full-time employees.

Investor Information

The Company is subject to the informational requirements of the Securities Exchange Act of 1934 (the “Exchange Act”).  Accordingly, the Company files periodic reports, proxy statements and other information with the Securities and Exchange Commission (the “SEC”).  Such reports, proxy statements and other information may be obtained by visiting the Public Reference Room of the SEC at 100 F Street, N.E., Washington, D.C.  20549 or by calling the SEC at 1-800-SEC-0330.  In addition, the SEC maintains an Internet site (http://www.sec.gov) that contains reports, proxy and information statements and other information regarding the Company and other issuers that file electronically. 

The Company’s website is http://www.homefedcorporation.com.  The Company also makes available through its website without charge its annual report on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K and amendments to those reports filed or furnished pursuant to Section 13(a) or 15(d) of the Exchange Act, as soon as reasonably practicable after such reports are filed with or furnished to the SEC. 

Cautionary Statement for Forward-Looking Information

Statements included in this Report may contain forward-looking statements.  Such statements may relate, but are not limited, to projections of revenues, income or loss, development expenditures, plans for growth and future operations, competition and regulation, as well as assumptions relating to the foregoing.  Such forward-looking statements are made pursuant to the safe-harbor provisions of the Private Securities Litigation Reform Act of 1995.

Forward-looking statements are inherently subject to risks and uncertainties, many of which cannot be predicted or quantified.  When used in this Report, the words “will, ” “could,” “estimates,” “expects,” “anticipates,” “believes,” “plans,” “intends” and variations of such words and similar expressions are intended to identify forward-looking statements that involve risks and uncertainties.  Future events and actual results could differ materially from those set forth in, contemplated by or underlying the forward-looking statements.

Factors that could cause actual results to differ materially from any results projected, forecasted, estimated or budgeted or may materially and adversely affect the Company’s actual results include, but are not limited to, those set forth in Item 1A. Risk Factors and elsewhere in this Report and in the Company’s other public filings with the SEC.

Undue reliance should not be placed on these forward-looking statements, which are applicable only as of the date hereof.  The Company undertakes no obligation to revise or update these forward-looking statements to reflect events or circumstances that arise after the date of this Report or to reflect the occurrence of unanticipated events. 

Item 1A.  Risk Factors.

Our business is subject to a number of risks.  You should carefully consider the following risk factors, together with all of the other information included or incorporated by reference in this Report, before you decide whether to purchase our common stock.  The risks set out below are not the only risks we face.  If any of the following risks occur, our business, financial condition and results of operations could be materially adversely affected.  In such case, the trading price of our common stock could decline, and you may lose all or part of your investment.

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Our results of operations and financial condition are greatly affected by the performance of the real estate industry.  The real estate development industry has historically been subject to up and down cycles driven by numerous market and economic factors, both national and local, beyond the control of the real estate developer.  Because of the effect these factors have on real estate values, it is difficult to predict with certainty when future sales will occur or what the sales price will be.

Changes in mortgage interest rate levels could impact demand for housing.  Our business is dependent upon the availability and cost of mortgage financing for potential homebuyers.  Any significant increase in the prevailing low mortgage interest rate environment or decrease in available credit could reduce consumer demand for housing, and result in fewer home sales or lower sale prices.

Turmoil in the mortgage lending market has adversely affected our results in the past and could negatively impact our results in the future.  The residential real estate development industry is dependent upon the availability of financing for both homebuilders and homebuyers.  Turmoil in the credit markets that began in 2008 resulted in a tightening of credit standards for residential and commercial mortgages and significantly reduced liquidity, adversely affecting the ability of homebuilders and homebuyers to obtain financing, which in turn adversely impacted our ability to sell lots.  Although available liquidity in the mortgage lending market has improved since 2008, significant reductions in mortgage lending liquidity in the future would adversely affect our business.

Our business is currently concentrated in Southern California, specifically in the San Diego area.  As a result, our financial results are dependent on the economic strength of that region.  Significant increases in local unemployment and cost of living, including increases in residential property taxes, or concerns about the financial condition of the municipalities in which the Company has properties, could adversely affect consumer demand for our housing projects and negatively impact our financial results.

Residential property sales volume, prices and new building starts have declined significantly in many U.S. markets, including California and the greater San Diego region, which have negatively affected sales and profits.  A worsening of current economic conditions could cause a decline in estimated future cash flows expected to be generated from the Company’s real estate projects, potentially resulting in impairment charges for real estate assets.  When reviewing real estate assets for impairment, the most significant assumption made to determine estimated future cash flows is the estimated future selling prices of the Company’s real estate assets.  If current conditions worsen and/or if the Company lowers its estimate of future selling prices, impairment charges could be recorded.

Changes in domestic laws and government regulations or in the implementation and/or enforcement of government rules and regulations may delay our projects or increase our costs.  Our plans for development projects require numerous government approvals, licenses, permits and agreements, which we must obtain before we can begin development and construction.  Our negotiations with local authorities often result in requirements for us to incur development expenses related to improvements for roads, sewers or other common areas that are both inside and outside of our project area.  The approval process can be delayed by withdrawals or modifications of preliminary approvals, by litigation and appeals challenging development rights and by changes in prevailing local circumstances or applicable laws that may require additional approvals.  Regulatory requirements may delay the start or completion of our projects and/or increase our costs. 

Demographic changes in the U.S. generally and California in particular could reduce the demand for housing.  If the current trend of population increases in California were not to continue, or in the event of any significant reductions in employment, demand for real estate in California may decline from current levels.

Increases in real estate taxes and other local government fees could adversely affect our results.  Increases in real estate taxes and other government fees may make it more expensive to own the properties that we are currently developing, which would increase our carrying costs of owning the properties.

Significant competition from other real estate developers and homebuilders could adversely affect our results.  Many of our competitors may have advantages over us, such as more favorable locations which may provide better schools and easier access to roads and shopping, or amenities that we may not offer, as well as greater financial resources and/or access to cheaper capital.  In addition, the downturn in the real estate markets nationwide could result in an influx of lower-priced lots and homes coming onto the market, as competitors need to address their individual liquidity needs.  Lower-priced homes and lots would increase the competition the Company faces, and could adversely affect our ability to sell lots and/or pricing.

Delays in construction schedules and cost overruns could adversely affect us.  Any material delays could adversely affect our ability to complete our projects, significantly increasing the costs of doing so, or drive potential customers to purchase competitors’ products. 

Increased costs for land, materials and for labor could adversely affect us.  If these costs increase, it will increase the costs of completing our projects; if we are not able to recoup these increased costs, our results of operations would be adversely affected. 

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Imposition of limitations on our ability to develop our properties resulting from condemnations, environmental laws and regulations and developments in or new applications thereof could increase our costs and delay our projects.  When we acquire our projects, our estimate of future profits and cash flows is derived from our estimates of future selling prices and development costs, less acquisition costs.  Subsequent to acquisition, if environmental laws or other regulations change resulting in additional unanticipated costs, future profitability and cash flows could be reduced, and impairment charges might have to be recorded.

Property in California is at risk from earthquakes, fires and other natural disasters.  Damage to any of our properties, whether by natural disasters, including earthquakes, and fires or otherwise, may either delay or preclude our ability to develop and sell our properties, or affect the price at which we may sell such properties.

Under California law we could be liable for some construction defects in structures we build or that are built on land that we develop.  California law imposes some liabilities on developers of land on which homes are built as well as on builders.  Future construction defect litigation could be based on a strict liability theory based on our involvement in the project or it could be related to infrastructure improvements or grading, even if we are not building homes ourselves. 

We may not be able to insure certain risks economically.  We may experience economic harm if any damage to our properties is not covered by insurance or that our insurance is insufficient or unavailable.  We cannot be certain that we will be able to insure all risks that we desire to insure economically or that all of our insurers will be financially viable if we make a claim. 

Shortages of adequate water resources and reliable energy sources in the areas where we own real estate projects could adversely affect the value of our properties or restrict us from commencing development.  If we are unable to obtain adequate water resources and reliable energy sources for our development projects, development of the projects might be delayed, resulting in reduced profitability and cash flows.

The actual cost of environmental liabilities concerning land owned in San Diego County, California could exceed the amount we reserved for such matter.  If the actual cost of the environmental remediation for land owned by Flat Rock is more than amounts reserved for additional expenses will have to be recorded.

Opposition from local community, political or environmental groups with respect to construction or development at a particular site could increase development costs.  At acquisition, the Fanita Ranch property had an approved EIR and development agreement.  However, the projects existing entitlements have been challenged, some of which have been successful, resulting in the Company incurring legal expenses to defend its entitlements and being required to reimburse legal and other costs incurred by the plaintiffs.  Further challenges to the Company’s entitlements at any of its projects are possible, which would result in increased legal fees, development costs and/or delays in development. 

We may not be able to generate sufficient taxable income to fully realize our net deferred tax asset.  If we are unable to generate sufficient taxable income to fully realize our net deferred tax asset the valuation allowance would have to be increased resulting in reduced profitability.

Significant influence over our affairs may be exercised by our principal stockholders.  As of February 6, 2014, the significant stockholders of our Company are Leucadia (approximately 31.4% beneficial ownership), our Chairman, Joseph S. Steinberg (approximately 9.4% beneficial ownership, including ownership by trusts for the benefit of his respective family members, but excluding Mr. Steinberg's private charitable foundation) and one of our directors, Ian M. Cumming (approximately 7.7% beneficial ownership, including ownership by certain family members, but excluding Mr. Cumming's charitable foundation).  Mr. Steinberg is also Chairman, a director and a significant stockholder of Leucadia.  As a result of the merger between a subsidiary of Leucadia and Jefferies Group LLC (formerly, Jefferies Group, Inc.), Mr. Cumming is no longer a principal executive officer or a director of Leucadia, and Richard B. Handler and Brian P. Friedman have become Leucadia’s Chief Executive Officer and President, respectively.  Accordingly, changes in Leucadia’s management could affect its influence over matters requiring approval by our stockholders, including the election or removal of directors and the approval of mergers or other business combination transactions.

Our common stock is subject to transfer restrictions. We and certain of our subsidiaries have certain tax attributes, the amount and availability of which are subject to certain qualifications, limitations and uncertainties.  In order to reduce the possibility that certain changes in ownership could result in limitations on the use of the tax attributes, our certificate of incorporation contains provisions that generally restrict the ability of a person or entity from acquiring ownership (including through attribution under the tax law) of 5% or more of our common stock and the ability of persons or entities now owning 5% or more of our common stock from acquiring additional common stock.  The restriction will remain until the earliest of (a) December 31, 2028, (b) the repeal of Section 382 of the Internal Revenue Code (or any comparable successor provision) and (c) the beginning of our taxable year to which these tax attributes may no longer be carried forward.  The restriction may be waived by our board of directors.  Stockholders are advised to carefully monitor their ownership of our common stock and consult their own legal advisors and/or us to determine whether their ownership of our common stock approaches the proscribed level.

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Our common stock is not traded on NASDAQ or listed on any securities exchange.  Prices for our common stock are quoted on the Over-the-Counter (OTC) Bulletin Board.  Securities whose prices are quoted on the OTC Bulletin Board do not enjoy the same liquidity as securities that trade on a recognized market or securities exchange.  As a result, stockholders may find it more difficult to dispose of or obtain accurate quotations as to the market value of the securities.

Item 1B.  Unresolved Staff Comments.

Not applicable.

Item 2.  Properties.

At December 31, 2013, the Company is the developer of four real estate properties, San Elijo Hills, Ashville Park, the Otay Land Company project and Fanita Ranch, and owns the Rampage property, all of which are described under Item 1. Business.  Real estate had an aggregate book value of approximately $107,050,000 at December 31, 2013. 

The Company leases 8,944 square feet for its corporate headquarters which is located at 1903 Wright Place, Suite 220, Carlsbad, California 92008.  The Company rents office space at its corporate headquarters to Leucadia for an annual rent of $12,000, payable monthly.

Item 3.  Legal Proceedings.  

From time to time the Company and its subsidiaries may be parties to legal proceedings that are considered to be either ordinary, routine litigation, incidental to its business or not material to the Company’s consolidated financial position or liquidity.

See Note 5 of Notes to Consolidated Financial Statements for a description of the recent settlement of a legal proceeding.

Item 4.  Mine Safety Disclosures.  

Not applicable.

Item 10.  Directors, Executive Officers and Corporate Governance.

As of February 6, 2014, the directors and executive officers of the Company, their ages, the positions with the Company held by each of them, the periods during which they have served in such positions and a summary of their recent business experience is set forth below.  Each of the biographies of the current directors listed below also contains information regarding such person’s service as a director, business experience, director positions with other public companies held currently or at anytime during the past five years, and the experience, qualifications, attributes and skills that the Board of Directors considered in selecting each of them to serve as a director of the Company.

Patrick D. Bienvenue, age 59.  Mr. Bienvenue has served as a director since August 1998 and since August 2011 has been the Executive Vice President of The St. Joe Company, a publicly traded company engaged in real estate development, sales and other activities.  From January 1996 until April 2011, Mr. Bienvenue served in a variety of executive capacities with real estate related subsidiaries of Leucadia and was responsible for the entitlement, development and management of these entities and their properties.  Mr. Bienvenue has senior managerial and development experience in the real estate sector.

Paul J. Borden, age 65.  Mr. Borden has served as a director and our President since May 1998.  Mr. Borden was a Vice President of Leucadia from August 1988 through October 2000, responsible for overseeing many of Leucadia’s real estate investments.  Prior to working for Leucadia he had a 16 year career in commercial lending.  Mr. Borden has managerial and development experience in the real estate sector.

Timothy M. Considine, age 73.  Mr. Considine has served as a director since January 1992, serving as Chairman of the Board from 1992 to December 1999, and is employed on a part-time basis by Considine and Considine, an accounting firm in San Diego, California, where he was a partner from 1965 to 2002. Mr. Considine has accounting and managerial experience.  Mr. Considine also has experience serving on the boards of private entities.

Mr. Cumming, 73, has served as a director since May 1999.  Mr. Cumming also serves as Chairman of the Board of Crimson Wine Group, Ltd., Leucadia’s former winery operations, which were spun off to Leucadia shareholders in February 2013.  He previously served as Chairman of the Board of Leucadia from June 1978 until July  2013.  Mr. Cumming also previously served as a director of Jefferies Group, Inc. (now known as Jefferies Group LLC) (“Jefferies”), Fortescue Metals Group Ltd. (“Fortescue”), AmeriCredit Corp., Mueller Industries, Inc. (“Mueller”) and Skywest, Inc.  Mr. Cumming has managerial and investing experience in

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a broad range of businesses through his almost 35 years as Chairman and Chief Executive Officer of Leucadia.  He also has experience serving on the boards of directors and committees of both public and private entities.

Michael A. Lobatz, age 64.  Dr. Lobatz has served as a director since February 1995 and has been a practicing physician in San Diego, California since 1981.  Dr. Lobatz has managerial experience in both the real estate and healthcare sectors and has experience serving on the boards of private and not-for-profit entities.

Mr. Steinberg, 70, has served as a director since August 1998 and as Chairman of the Board since December 1999.  Mr. Steinberg is Chairman of the Board of Directors of Leucadia, and from January 1979 until March 1, 2013 served as President of Leucadia.  Mr. Steinberg is also a director of Jefferies, now a wholly-owned subsidiary of Leucadia.  Mr. Steinberg also serves on the board of directors of Crimson Wine Group, Ltd.  Mr. Steinberg had previously served as a director of Mueller and Fortescue.  Mr. Steinberg has managerial and investing experience in a broad range of businesses through his more than 30 years as President and a director of Leucadia.  He also has experience serving on the boards and committees of both public and private companies.

John K. Aden, Jr., age 56.  Mr. Aden has served as Vice President of the Company since May 2012 and has been employed by the Company as Senior Project Development Manager since May 2012.  Prior to joining the Company, Mr. Aden was an Executive Vice President from 1998 to April 2012 and Vice President from 1994 to 1997 for The Otay Ranch Company and JPB Development and Vice President of Community Development from 1989 to 1994 for The Eastlake Company, real estate development companies in San Diego, California.  Mr. Aden is a licensed architect.

Christian E. Foulger, age 39.  Mr. Foulger has served as Vice President of the Company since April 2011 and has been employed by the Company as a Special Projects Manager since November 2005.  Prior to joining the Company, Mr. Foulger was a Financial Analyst from 1998 to 2000 and Vice President from 2001 to October 2005 for Cottonwood Partners Management, a real estate development and management company in Salt Lake City, Utah.

Erin N. Ruhe, age 48.  Ms. Ruhe has served as Vice President of the Company since April 2000, Treasurer since March 2004 and has been employed by the Company as Controller since January 1999.  Previously, Ms. Ruhe was Vice President since December 1995 and Controller since November 1994 of HSD Venture, a real estate subsidiary of Leucadia.

PART II

Item  5.  Market for the Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities.

The Company’s common stock is traded in the over-the-counter market under the symbol “HOFD.”  The Company’s common stock is not listed on any stock exchange, and price information for the common stock is not regularly quoted on any automated quotation system.  

The following table sets forth, for the calendar periods indicated, the high and low bid price of the Company’s common stock, as published by the National Association of Securities Dealers OTC Bulletin Board Service.

	High	Low
2012
First Quarter	$ 23.00	$ 18.26
Second Quarter	28.50	22.00
Third Quarter	27.50	22.00
Fourth Quarter	28.00	22.00
2013
First Quarter	$ 32.00	$ 25.50
Second Quarter	33.00	30.00
Third Quarter	38.50	31.25
Fourth Quarter	38.00	32.00
2014
First quarter (through February 6, 2014)	$ 42.98	$ 36.00

The over-the-counter quotations reflect inter-dealer prices, without retail mark up, markdown or commission, and may not represent actual transactions.  On February 6, 2014, the closing bid price for the Company’s common stock was $36.25 per share.  As of that date, there were 449 stockholders of record.  No dividends were paid during 2013 or 2012.

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The Company does not have a regular dividend policy and whether or not to pay dividends is subject to the discretion of our Board of Directors.

The Company does not currently meet certain requirements for listing on a national securities exchange or inclusion on the Nasdaq Stock Market.

The Company and certain of its subsidiaries have tax attributes, and the amount and availability of which are subject to certain qualifications, limitations and uncertainties.  In order to reduce the possibility that certain changes in ownership could result in limitations on the use of its tax attributes, the Company's certificate of incorporation contains provisions which generally restrict the ability of a person or entity from acquiring ownership (including through attribution under the tax law) of five percent or more of the common stock and the ability of persons or entities now owning five percent or more of the common stock from acquiring additional common stock.  The restrictions will remain in effect until the earliest of (a) December 31, 2028, (b) the repeal of Section 382 of the Internal Revenue Code (or any comparable successor provision) and (c) the beginning of a taxable year of the Company to which certain tax benefits may no longer be carried forward. 

The transfer agent for the Company’s common stock is American Stock Transfer & Trust Company, 59 Maiden Lane, New York, New York 10038.

In July 2004, the Board of Directors approved the repurchase of up to 500,000 shares of the Company’s common stock; 104,591 common shares remain available for, among other things, use in connection with the Company’s stock option plan.  The shares may be purchased from time to time, subject to prevailing market conditions, in the open market, in privately negotiated transactions or otherwise.  Any such purchases may be commenced or suspended at any time without prior notice. 

Stockholder Return Performance Graph

Set forth below is a graph comparing the cumulative total stockholder return on the Company’s common stock against the cumulative total return of the Standard & Poor’s 500 Stock Index and the Standard & Poor’s Homebuilding-500 Index for the period commencing December 31, 2008 to December 31, 2013.  Index data was furnished by Standard & Poor’s Capital IQ.  The graph assumes that $100 was invested on December 31, 2008 in each of our common stock, the S&P 500 Index and the S&P 500 Homebuilding Index and that all dividends were reinvested.

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		INDEXED RETURNS
	Base	Years Ending
	Period
Company / Index	Dec08	Dec09	Dec10	Dec11	Dec12	Dec13
HomeFed Corporation	100	148.48	132.12	117.58	160.61	221.82
S&P 500 Index	100	126.46	145.51	148.59	172.37	228.19
S&P 500 Homebuilding Index	100	118.32	125.52	125.55	256.62	280.74

Item 6.  Selected Financial Data.

The following selected financial data have been summarized from the Company’s consolidated financial statements and are qualified in their entirety by reference to, and should be read in conjunction with, such consolidated financial statements and Management’s Discussion and Analysis of Financial Condition and Results of Operations, contained in Item 7 of this Report.

	Year Ended December 31,
	2013	2012	2011	2010	2009
	(In thousands, except per share amounts)
SELECTED INCOME STATEMENT DATA:
Revenues	$ 56,632	$ 35,681	$ 34,141	$ 40,367	$ 16,933
Expenses	38,319	24,276	24,058	33,450	14,569
Net income (a) (b)	12,704	7,432	6,097	4,420	2,794
Net income attributable to HomeFed
Corporation common shareholders (a) (b)	11,268	6,022	4,491	3,529	2,807
Basic earnings per share (a) (b)	$ 1.43	$ 0.76	$ 0.57	$ 0.45	$ 0.36
Diluted earnings per share (a) (b)	$ 1.43	$ 0.76	$ 0.57	$ 0.45	$ 0.36

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	At December 31,
	2013	2012	2011	2010		2009
	(In thousands, except per share amounts)
SELECTED BALANCE SHEET DATA:
Cash and cash equivalents	$ 57,306	$ 22,987	$ 40,820	$ 43,788	$ 9,127
Investments	31,896	36,390	43,297	38,287	57,038
Real estate	107,072	120,245	92,626	87,909	104,273
Total assets	204,402	189,409	188,753	184,510	185,704
Notes payable	–	–	–	–	7,834
HomeFed Corporation shareholders’ equity	179,835	168,380	157,706	152,995	149,313
Shares outstanding	7,880	7,880	7,880	7,880	7,880
Book value per share (c)	$ 22.82	$ 21.37	$ 20.01	$ 19.42	$ 18.95

(a) For the years ended December 31, 2013 and 2012, the Company decreased its deferred tax valuation allowance by recording a decrease to its income tax provision of $1,350,000 and $750,000, respectively.

(b) For the year ended December 31, 2010, the Company recorded provisions for impairment losses on real estate of $5,400,000.

(c) Excludes noncontrolling interest.

Item 7.  Management’s Discussion and Analysis of Financial Condition and Results of Operations.

The purpose of this section is to discuss and analyze the Company’s consolidated financial condition, liquidity and capital resources and results of operations.  This analysis should be read in conjunction with the consolidated financial statements, related footnote disclosures and “Cautionary Statements for Forward-Looking Information,” which appear elsewhere in this Report.

Liquidity and Capital Resources

Net cash of $30,300,000, $12,400,000 and $13,000,000 was provided by operating activities during 2013, 2012 and 2011, respectively, principally from the proceeds from the sale of real estate at the San Elijo Hills project and sales of bulk grapes and, in 2013 and 2012, from the proceeds from the sale of real estate at the Ashville Park project.  Information about the remaining real estate to be sold at the San Elijo Hills and Ashville Park projects is provided below.  Because of the nature of its real estate projects, the Company does not expect operating cash flows will be consistent from year to year.

HomeFed’s principal sources of funds are cash and cash equivalents and investments, proceeds from the sale of real estate, proceeds from sales of bulk grapes, rental income primarily from the San Elijo Hills Towncenter, fee income from the San Elijo Hills project, dividends and tax sharing payments from its subsidiaries and borrowings from or repayment of advances by its subsidiaries.  As of December 31, 2013, the Company had consolidated cash and cash equivalents and marketable securities aggregating $89,200,000, substantially all of which was held by the parent company and available to be used without restriction. 

The Company expects that its cash and cash equivalents and marketable securities classified as available for sale, together with the other sources described above, will be sufficient for both its short and long term liquidity needs.  Residential sales at the San Elijo Hills and Ashville Park projects are expected to be a source of funds to the Company in the future; however, except as otherwise disclosed the amount and timing is uncertain.  The Company is not relying on receipt of funds from Otay Land Company or the Fanita Ranch project for the foreseeable future, since the timing of sales of undeveloped property, development activity and sales of developable and undevelopable property cannot be predicted with any certainty.  However, these projects are not expected to require material funds in the short term, and long term needs will not be determined until a development plan is established.  Property development expenditures at the Rampage project, if any, are not expected to be significant for the next few years.  In the interim, the Company has been conducting farming activities at the vineyard and has been generating positive cash flows from selling grapes since 2010.  Except as disclosed herein, the Company is not committed to acquire any new real estate projects, but it believes it has sufficient liquidity to take advantage of appropriate acquisition opportunities if they are presented.

Throughout much of the period that the Company has been developing the San Elijo Hills project, the Company’s sales efforts greatly benefited from a strong regional and national residential housing market.  However, beginning in 2006, residential property sales volume, prices and new building starts declined significantly in many U.S. markets, including California and the greater San Diego region, which negatively affected sales and profits.  The slowdown in residential sales was exacerbated by the turmoil in the mortgage lending and credit markets, which resulted in stricter lending standards and reduced liquidity for prospective home buyers.  Sales of new homes and re-sales of existing homes declined substantially from the early years of the project’s development; based on information obtained from homebuilders and other public sources, the Company estimates that total home sales (both new and re-sales) at the San Elijo Hills project were approximately 376 in 2013 as compared to 860 in 2004. 

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Interest from homebuilders concerning the San Elijo project’s remaining single family lots and multi-family units has increased since late 2009, and the Company has been able to sell some single family lots and multi-family units at acceptable prices.  Although recent homebuilder interest and sales activity in the project are encouraging, it is uncertain if the Company will be able to sell its remaining inventory at prices it finds acceptable.   The Company has substantially completed development of all of its remaining residential single family lots at the San Elijo Hills project, many of which are “premium” lots which are expected to command premium prices if, and when, the market fully recovers.  The Company believes that by exercising patience and waiting for market conditions to improve it can best maximize shareholder value with its remaining residential lot inventory.  However, on an ongoing basis the Company evaluates the local real estate market and economic conditions in general, and updates its expectations of future market conditions as it continues to assess the best time to market its remaining residential lot inventory for sale.

During 2013, the Company closed on the sale of 86 single family residential lots at the San Elijo Hills project for aggregate cash proceeds of $32,500,000, a school site for aggregate cash proceeds of $5,800,000 and one multi-family unit for aggregate cash proceeds of $700,000.  As of February 6, 2014, the Company has entered into an agreement to sell an aggregate of 23 single family residential lots at the San Elijo Hills project to a homebuilder for aggregate cash proceeds of $9,200,000, for which it has received a non-refundable option deposit of $900,000 as of December 31, 2013.      

As of December 31, 2013, the remaining land at the San Elijo Hills project to be sold or leased consists of the following (including real estate under contract for sale):

Single family lots	178
Multi-family units	10
Square footage of commercial space	37,800

The Towncenter includes multi-family residential units and commercial space, which are being constructed in phases.  The Company has completed construction of the first phase of the Towncenter, which included 12 residential condominium units, all of which have been sold, and 11,000 square feet of commercial space, all of which has been leased.  The plan for phase two of the Towncenter has not yet been developed.

During 2013, the Company sold 90 lots from Village B for aggregate cash consideration of $9,000,000, and 22 lots from Village A for aggregate cash consideration of $3,900,000.  The Company has entered into agreements to sell the remaining 15 lots from Village A at the Ashville Park project to homebuilders for aggregate cash proceeds of $2,500,000, for which it received non-refundable option deposits of $100,000.  Sales of 5 lots closed during the first quarter of 2014 for aggregate cash consideration of $800,000. The option payments are non-refundable if the Company fulfills its obligations under the agreements, and will be applied to reduce the amount due from the purchasers at closing.  Although these agreements are binding on the purchasers, should the Company fulfill its obligations under the agreements within the specified timeframes and the purchaser decides not to close, the Company’s recourse will be primarily limited to retaining the option payment. 

Since the Company is obligated to complete certain improvements to the San Elijo Hills and Ashville Park lots sold, a portion of the revenue from sales of real estate is deferred, and is recognized as revenues upon the completion of the required improvements to the property, including costs related to common areas, under the percentage of completion method of accounting.  As of December 31, 2013, $2,750,000  of revenue has been deferred pending completion of the required improvements.  Estimates of future property available for sale, the timing of the sales, selling prices and future development costs are based upon current development plans for the projects and will change based on the strength of the real estate market or other factors that are not within the control of the Company.

In July 2004, the Board of Directors approved the repurchase of up to 500,000 shares of the Company’s common stock, representing approximately 6% of the Company’s outstanding stock.  Repurchased shares are available for, among other things, use in connection with the Company’s stock option plan.  The shares may be purchased from time to time, subject to prevailing market conditions, in the open market, in privately negotiated transactions or otherwise.  Any such purchases may be commenced or suspended at any time without prior notice.  The Company has purchased 395,409 shares to date, principally in 2008.

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As indicated in the table below, at December 31, 2013, the Company’s contractual cash obligations consisted solely of its operating lease, which net of sublease income totaled $1,135,000.

	Payments Due by Period (in thousands)
Contractual Obligations	Total Amounts Committed	Less Than 1 Year	1-3 Years	4-5 Years	After 5 Years
Operating lease, net of sublease income	$ 1,135	$ 221	$ 463	$ 451	$   -

As of December 31, 2013, the Company had $35,350,000 of alternative minimum tax credit carryovers to reduce its future federal income tax liabilities.  As a result, the Company expects to pay federal income tax at a rate of 20% during future periods.  For more information, see Note 9 of Notes to Consolidated Financial Statements.

Off-Balance Sheet Arrangements

The Company is required to obtain infrastructure improvement bonds primarily for the benefit of the City of San Marcos prior to the beginning of lot construction work and warranty bonds upon completion of such improvements at the San Elijo Hills project.  These bonds provide funds primarily to the City in the event the Company is unable or

unwilling to complete certain infrastructure improvements in the San Elijo Hills project.  Leucadia is contractually obligated to obtain these bonds on behalf of CDS and its subsidiaries pursuant to the terms of agreements entered into when CDS was acquired by the Company.  CDS is responsible for paying all third party fees related to obtaining the bonds.  Should the City or others draw on the bonds for any reason, certain of the Company’s subsidiaries would be obligated to reimburse Leucadia for the amount drawn.  As of December 31, 2013, the outstanding amount of these bonds was approximately

$2,600,000, none of which has been drawn upon.

The Company is also required to obtain infrastructure improvement bonds for the benefit of the City of Virginia Beach in connection with the Ashville Park project.  As of December 31, 2013, the outstanding amount of these bonds was approximately $1,800,000, none of which has been drawn upon.

Results of Operations

Critical Accounting Estimates

The Company’s discussion and analysis of its financial condition and results of operations are based upon its consolidated financial statements, which have been prepared in accordance with accounting principles generally accepted in the United States (“GAAP”).  The preparation of these financial statements requires the Company to make estimates and assumptions that affect the reported amounts in the financial statements and disclosures of contingent assets and liabilities.  On an on-going basis, the Company evaluates all of these estimates and assumptions.  Actual results could differ from those estimates.

Profit Recognition on Sales of Real Estate – When the Company has an obligation to complete improvements on property subsequent to the date of sale, it utilizes the percentage of completion method of accounting to record revenues and cost of sales.  Under percentage of completion accounting, the Company recognizes revenues and cost of sales based upon the ratio of development costs completed as of the date of sale to an estimate of total development costs which will ultimately be incurred, including an estimate for common areas.  Revenues which cannot be recognized as of the date of sale are reported as deferred revenue on the consolidated balance sheets. 

The Company believes it can reasonably estimate its future costs and profit allocation in order to determine how much revenue should be deferred.  However, such estimates are based on numerous assumptions and require management’s judgment.  For example, the estimate of future development costs includes an assumption about the cost of construction services for which the Company has no current contractual arrangement.  If the estimate of these future costs proves to be too low, then the Company will have recognized too much profit as of the date of sale resulting in less profit to be reported as the improvements are completed.  However, to date the Company’s estimates of future development costs that have been used to determine the amount of revenue to be deferred at the date of sale have subsequently been proven to be reasonably accurate.

Prior to 2010, the percentage of completion method of accounting was applied for sold properties; however, during the fourth quarter of 2009, the Company completed all the required improvements for sold properties and all of the remaining deferred revenue was recognized in income.  During 2011 and 2010, since all required improvements to sold properties had been completed as of the closing date, the Company applied the full accrual method for those sales.  Accordingly, the Company recognized total sales

16

proceeds, net of closing costs, in revenues and all costs in cost of sales on the closing date.   Commencing in 2012, revenue is again being deferred until the Company completes required improvements to properties sold.

Income Taxes – The Company records a valuation allowance to reduce its net deferred tax asset to an amount that the Company expects is more likely than not to be realized.  If the Company’s estimate of the realizability of its deferred tax asset changes in the future, an adjustment to the valuation allowance would be recorded which would either increase or decrease income tax expense in such period.   The valuation allowance is determined after considering all relevant facts and circumstances, and is based, in significant part, on the Company’s projection of taxable income in the future.  The Company’s estimate does not include any real estate development profit at the Otay Ranch, Rampage and Fanita Ranch properties, since the Company’s plans for development of these properties are uncertain. 

During 2013, the Company generated profits from lot sales at the San Elijo Hills and Ashville Park projects that were greater than projected as of December 31, 2012.  Also, as discussed above, the Company has entered into agreements to sell additional lots at both projects which are expected to close during 2014.  The Company considered its recent results and pending lot sale agreements to be positive evidence to be considered when estimating its future taxable income.  As a result, the Company was able to conclude that it is more likely than not that it will be able to realize an additional portion of the Company’s net deferred tax asset; accordingly, approximately $1,350,000 of the deferred tax valuation allowance was released as a credit to income tax expense during 2013.

During 2012 the Company acquired the Ashville Park project, profitably sold finished lots during 2012 and entered into an agreement to sell additional lots in 2013, some of which closed during the first quarter of 2013.  The Company believed that these sales represented positive evidence to be considered when estimating future taxable income that may be generated at the Ashville Park project.  The Company also lowered its estimated liability for environmental remediation costs during 2012 (discussed below), and updated its consolidated projection of future taxable income for this activity and for recent developments at its other projects.  As a result, the Company was able to conclude that it is more likely than not that it will be able to realize an additional portion of the Company’s net deferred tax asset; accordingly, approximately $750,000 of the deferred tax valuation allowance was released as a credit to income tax expense during 2012.  

The valuation allowance reserves for a substantial portion of the Company’s alternative minimum tax credit carryovers.   At December 31, 2013, the Company had approximately $35,350,000 of alternative minimum tax credit carryovers which have no expiration date.  Minimum tax credit carryovers do not offset alternative minimum tax; however, they are able to reduce the Company’s federal income tax rate to 20% in any given year.  In order to fully utilize its alternative minimum tax credit carryovers, the Company would have to generate an additional $215,000,000 of taxable income above its current estimate to fully utilize all of the credits.  The Company has reserved for this benefit in its valuation allowance. 

The projection of future taxable income is based upon numerous assumptions about the future, including future market conditions where the Company’s projects are located, regulatory requirements, estimates of future real estate revenues and development costs,  future interest expense, operating and overhead costs and other factors.  To the extent the Company’s actual taxable income in the future exceeds its estimate, the Company will recognize additional tax benefits and reduce its valuation allowance; conversely, if the actual taxable income is less than the amounts projected, an addition to the valuation allowance would be recorded that would increase tax expense in the future.  Adjustments to the valuation allowance in the future should be expected.

Provision for Environmental Remediation – The Company records environmental liabilities when it is probable that a liability has been incurred and the amount or range of the liability is reasonably estimable.  During 2002, the Company recorded a charge of $11,150,000 representing its estimate of the cost (including legal fees) to implement the most likely remediation alternative with respect to approximately 30 acres of undeveloped land owned by the Company’s subsidiary, Flat Rock.  The estimated liability was neither discounted nor reduced for claims for recovery from previous owners and users of the land who may be liable, and may increase or decrease based upon the actual extent and nature of the remediation required, the actual cost of the remediation, the expenses of the regulatory process, the costs of post-remediation monitoring requirements, inflation and other items.

The Company has periodically examined, and when appropriate, adjusted its liability for environmental remediation to reflect its current best estimate.  A change to the current estimate could result from, among other things, that the cost to implement the remediation is different than the Company’s current estimate, that the cost of future on-going monitoring efforts is different than the Company’s current estimate, and/or requirements imposed by regulatory authorities that the Company did not anticipate but is nevertheless required to implement.  During 2004, the Company increased its estimate of remediation costs by approximately $1,300,000, primarily due to increases in site investigation and remediation costs, and during 2003 by approximately $250,000, primarily for consulting costs.  During 2012, the Company’s revised its estimate of future remediation costs, including on-going monitoring expenses, which resulted in a reduction in the previously accrued estimate of $1,500,000.   Such amount was reflected on the consolidated statement of operations as a reduction to expenses.

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During the fourth quarter of 2012, upon receipt of required approvals, the Company commenced remediation activities, which were completed in February 2013.  The Company received final approval from the County of San Diego Department of Environmental Health in June 2013; as a result, the Company reduced its liability for environmental remediation by $650,000. 

Provision for Impairment Losses on Real Estate – The Company’s real estate is carried at cost.  Whenever events or changes in circumstances suggest that the carrying amount may not be recoverable, management assesses the recoverability of the carrying amount of its real estate in accordance with GAAP and, if impaired, reduces the carrying amount to its estimated fair value.  The process involved in evaluating assets for impairment and determining fair value requires estimates as to future events and market conditions.  This estimation process may assume that the Company has the ability to complete development and dispose of its real estate properties in the ordinary course of business based on management’s present plans and intentions.  If management determines that the carrying value of a specific real estate investment is impaired, a write-down is recorded as a charge to current period operations.  The evaluation process is based on estimates and assumptions and the ultimate outcome may be different. 

The Company did not record any provisions for impairment losses during the years ended December 31, 2013, 2012 and 2011.

Statement of Operations

The Company currently has four real estate development projects, San Elijo Hills, Ashville Park, the Otay Ranch project and Fanita Ranch.  The San Elijo Hills project is a master-planned community that, when completed, will contain approximately 2,382 single family lots, 805 multi-family units, 276 very low income apartment units, three school sites and commercial space which will be sold or leased.  As of February 6, 2014, the remaining land at the San Elijo Hills project to be developed and sold or leased consisted of 178 single family lots, 10 multi-family units and 37,800 square feet of commercial space.  The Company has substantially completed the development of its remaining single family residential lots and has completed development of the first phase of the Towncenter; design options for phase two of the Towncenter are currently being evaluated.  As discussed above, the timing of the sales of the remaining lot inventory at the San Elijo Hills project is uncertain.  The Company believes that by exercising patience and waiting for market conditions to improve it can best maximize shareholder value with its remaining residential lot inventory.  However, on an ongoing basis the Company evaluates the local real estate market and economic conditions in general, and updates its expectations of future market conditions as it continues to assess the best time to market its remaining residential lot inventory for sale.

The Company acquired the Ashville Park project during 2012, which upon completion is expected to have 451 single family homes.  As of February 6, 2014, the remaining land at the Ashville Park project to be sold consists of 280 single family lots.  Except as discussed above, the timing of the sales of the remaining lots is uncertain.

Sales at the Otay Ranch project have principally consisted of four individual transactions for relatively large amounts of land.  Individual lot development at the Otay Ranch project has not yet begun, as the Company continues to evaluate how to maximize the value of this investment while processing further entitlements on portions of the property.  If and when the Company determines to commence lot development at the Otay Ranch project, it is expected to last many years.  Development of the Rampage and Fanita Ranch properties can only commence after approvals are obtained from multiple government agencies; as a result no sales activity is expected for several years.

Real Estate Sales Activity

San Elijo Hills Project:

For the three years ended December 31, 2013, the Company has closed on sales of real estate as follows:

		2013		2012		2011
		(Dollars in thousands)
Single family units		86		72		91
Multi-family units		-		-		-
Residential condominium units		1		-		2
Commercial lot sales – planned square feet		-		-		11,200
Purchase price, net of closing costs:
Single family units	$	32,500	$	20,900	$	24,750
Multi-family units	$	-	$	-	$	-
Residential condominium units	$	700	$	-	$	850

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 Commercial lot sales $ 5,800  $                 - $ 1,950 

Revenues recognized on the closing date were $37,850,000, $20,650,000 and $27,500,000 for 2013, 2012 and 2011, respectively.  As discussed above, a portion of the revenue from sales in prior years was deferred, and has been recognized as revenues upon the completion of the required improvements to the property, including costs related to common areas, under the percentage of completion method of accounting.  Revenues include previously deferred amounts of $200,000 for 2013.  During 2011, the full purchase price reflected in the table above, net of closing costs, was recognized as revenues on the closing date as all required improvements to the property had been completed. 

During 2013, 2012 and 2011, cost of sales of real estate aggregated $15,200,000, $8,750,000 and $12,950,000, respectively.  During 2013 and 2012, cost of sales was recognized in the same proportion to the amount of revenue recognized under the percentage of completion method of accounting.  During 2011, since all required improvements to sold properties had been completed as of the closing date, the Company applied the full accrual method for those sales and recognized in full as cost of sales the cost of properties sold on the closing date.

Ashville Park:

During 2013, the Company sold 90 lots from Village B for net cash consideration of $9,000,000.  During 2013 and 2012, the Company sold 22 and 54 lots from Village A for net cash consideration of $3,900,000 and $8,200,000, respectively.  Cost of sales of real estate aggregated $8,000,000 and $4,900,000 for 2013 and 2012, respectively.   Cost of sales was recognized in the same proportion to the amount of revenue recognized under the percentage of completion method of accounting. 

Otay Ranch Project:

There were no sales of real estate at the Otay Ranch project during 2013, 2012 and 2011.

Rampage Property:

There were no sales of real estate at the Rampage property during 2013, 2012 and 2011.

Farming revenues at the Rampage property aggregated $4,900,000, $6,400,000 and $6,000,000 for the years ended December 31, 2013, 2012 and 2011, respectively.  The reduction in farming revenues during 2013 as compared to 2012 principally results from a reduction in grape yields due to unfavorable weather conditions.  The increase in farming revenues in 2012 as compared to 2011 was due to larger harvest yields and higher market prices for grapes. 

Other Results of Operations Activity

The Company recorded co-op marketing and advertising fee revenue of approximately $1,150,000, $550,000 and $200,000 for the years ended December 31, 2013, 2012 and 2011, respectively.  The Company records these fees pursuant to contractual agreements, which is generally when builders sell homes based upon a fixed percentage of the homes’ selling price. 

General and administrative expenses increased during 2013 as compared to 2012, primarily due to legal fees, salaries expenses and costs related to the investigation and evaluation of acquisition opportunities.  Legal expenses increased by $2,100,000, principally due to Otay Land Company and Flat Rock Land Company’s lawsuit related to the environmental contamination of the property.  The increase in salaries expenses of $700,000 principally reflects higher general bonus expense and the addition of two employees at the Ashville Park project.    

General and administrative expenses increased during 2012 as compared to 2011 primarily due to higher legal, marketing, professional and travel expenses.  Legal expenses increased due to higher legal fees related to environmental litigation at the Fanita Ranch property that was in process at the date of acquisition.  The Company lost certain challenges to its Fanita Ranch entitlements and was required to reimburse the plaintiffs for their costs.  Legal fees also increased for the lawsuit seeking compensation from parties who Otay Land Company and Flat Rock believe are responsible for the environmental contamination of the property, as discussed above.  The Company also incurred higher marketing, professional fees and travel expenses related to activity at the Ashville Park project during 2012.

Interest and other income increased by $800,000 during 2013 as compared to 2012.  During 2013, Otay Land Company and Flat Rock were awarded an additional $750,000 relating to the lawsuit against multiple parties for environmental contamination of the property.  Interest and other income also reflect a decline in interest income of $20,000 in 2013 as compared to 2012, due to lower interest rates.  The change in interest and other income during 2012 as compared to 2011 reflects a decline in interest income due to lower interest rates and fewer invested assets.  Other income in 2011 includes $150,000 of income relating to proceeds received from the settlement of a contract dispute. 

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The Company’s effective income tax rate is higher than the federal statutory rate due to state income taxes.  In addition, as discussed above, during 2013 and 2012 the Company was able to conclude that it is more likely than not that it will be able to realize an additional portion of the Company’s net deferred tax asset.  As a result, $1,350,000 and $750,000 of the deferred tax valuation allowance was released as a credit to income tax expense during 2013 and 2012, respectively.

Inflation

The Company, as well as the real estate development and homebuilding industry in general, may be adversely affected by inflation, primarily because of either reduced rates of savings by consumers during periods of low inflation or higher land and construction costs during periods of high inflation.  Low inflation could adversely affect consumer demand by limiting growth of savings for down payments, ultimately adversely affecting demand for real estate and the Company’s revenues.  High inflation increases the Company’s costs of labor and materials.  The Company would attempt to pass through to its customers any increases in its costs through increased selling prices.  To date, high or low rates of inflation have not had a material adverse effect on the Company’s results of operations.  However, there is no assurance that high or low rates of inflation will not have a material adverse impact on the Company’s future results of operations.

Interest Rates

The Company’s operations are interest-rate sensitive.  The Company has indirectly benefited from the prevailing low mortgage interest rate environment, since low rates made housing more affordable for the home buyer, thereby increasing demand for homes.  The Company can not predict whether interest rates will remain low and what impact an increase in interest rates and mortgage rates would have on the Company’s operations, although any significant increase in these rates could have a chilling effect on the housing market, which could adversely affect the Company’s results of operations.

Item 7A.  Quantitative and Qualitative Disclosure About Market Risk.  

The Company’s market risk arises principally from interest rate risk related to its investment portfolio and borrowing activities.

At December 31, 2013, the Company had investments of approximately $31,900,000 in securities issued by the U.S. Government.  The Company’s investment portfolio is classified as available for sale, and is reflected in the balance sheet at fair value with unrealized gains and losses reflected in equity.  The U.S. Government securities in the portfolio are rated “AA+” and “Aaa” by Standard & Poor’s and Moody’s, respectively.  All of these fixed income securities mature in 2014; the estimated weighted average remaining life of these fixed income securities was approximately 0.3 years at December 31, 2013.  At December 31, 2012, the Company’s investments consisted of fixed income securities with an estimated weighted average remaining life of approximately 0.3 years and a weighted average interest rate of .14%.  The Company’s fixed income securities, like all fixed income instruments, are subject to interest rate risk and will fall in value if market interest rates increase.

	Expected Maturity Date
	2014	2015	2016	2017	2018	Thereafter	Total	Fair Value
	(Dollars in thousands)
Rate Sensitive Assets:
Available for Sale Fixed   Income Securities
U.S. Treasury Securities	$ 31,896	$-	$-	$-	$-	$-	$ 31,896	$ 31,896
Weighted Average  Interest Rate	0.07%	-	-	-	-	-

Item  8.   Financial Statements and Supplementary Data.

Financial Statements and supplementary data required by this Item 8 are set forth at the pages indicated in Item 15(a) below.

Item  9.   Changes and Disagreements with Accountants on Accounting and Financial Disclosure.

None.

Item 9A.Controls and Procedures.

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The Company's management evaluated, with the participation of the Company's principal executive and principal financial officers, the effectiveness of the Company's disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended (the “Exchange Act”)), as of December 31, 2013.  Based on their evaluation, the Company's principal executive and principal financial officers concluded that the Company's disclosure controls and procedures were effective as of December 31, 2013.

There has been no change in the Company's internal control over financial reporting (as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) that occurred during the Company's fiscal quarter ended December 31, 2013, that has materially affected, or is reasonably likely to materially affect, the Company's internal control over financial reporting.

Management’s Report on Internal Control Over Financial Reporting

Management of the Company is responsible for establishing and maintaining adequate internal control over financial reporting as defined in Rule 13a-15(f) or 15d-15(f) promulgated under the Securities Exchange Act of 1934.  Internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles and includes those policies and procedures that:

· Pertain to the maintenance of records that in reasonable detail accurately and fairly reflect the transactions and disposition of the assets of the Company;

· Provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the Company are being made only in accordance with authorizations of management and directors of the Company; and

· Provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of the Company’s assets that could have a material effect on the financial statements. 

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements.  Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate. 

The Company’s management assessed the effectiveness of the Company’s internal control over financial reporting as of December 31, 2013.  In making this assessment, the Company’s management used the criteria established in Internal Control-Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (“COSO”). 

Based on our assessment and those criteria, management concluded that, as of December 31, 2013, the Company’s internal control over financial reporting is effective. 

The effectiveness of the Company’s internal control over financial reporting as of December 31, 2013, has been audited by PricewaterhouseCoopers LLP, an independent registered public accounting firm, as stated in their report which appears in Item 8.

Item 9B.  Other Information.

Not applicable.

PART III

Item 10.  Directors, Executive Officers and Corporate Governance.

The information to be included under the caption “Election of Directors”, “Information Concerning the Board of Directors and Board Committees”, “Executive Compensation – Section 16(a) Beneficial Ownership Reporting Compliance” and “Audit Committee Report” in the Company’s definitive proxy statement to be filed with the Commission pursuant to Regulation 14A of the Exchange Act in connection with the 2013 annual meeting of shareholders of the Company (the “Proxy Statement”) is incorporated herein by reference.  In addition, reference is made to Item 10 in Part I of this Report.

Code of Practice.  We have a code of Business Practices, which is applicable to all directors, officers and employees, and includes a Code of Practice applicable to our principal executive officer and senior financial officers.  Both of the

21

Code of Business Practice and Code of Practice are available on our website.  We intend to post amendments to or waivers from our Code of Practice on our website as required by applicable law.

Item 11.Executive Compensation.

The information to be included under the caption “Executive Compensation” in the Proxy Statement is incorporated herein by reference.

Item 12.  Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters.

Equity Compensation Plan Information

The following table summarizes information regarding the Company’s equity compensation plans as of December 31, 2013.  All outstanding awards relate to the Company’s Common Stock.  

				Number of securities
				remaining available
				for future issuance
	Number of Securities		Weighted-average	under equity
	to be issued upon		exercise price of	compensation plans
	exercise of outstanding options,		outstanding options,	(excluding securities
	warrants and rights		warrants and rights	reflected in column (a))
Plan Category	(a)		(b)	(c)
Equity compensation
plans approved by
security holders	94,500	$	24.69	405,400
Equity compensation
plans not approved
by security holders	-		-	-
Total	94,500	$	24.69	405,400

The information to be included under the caption “Information on Stock Ownership- Present Beneficial Ownership of Common Stock” in the Proxy Statement is incorporated herein by reference.

Item 13.  Certain Relationships and Related Transactions and Director Independence.  

The information to be included under the captions “Director Independence” and “Certain Relationships and Related Person Transactions” under the heading “Information concerning the Board of Directors and Board Committees” in the Proxy Statement is incorporated herein by reference.

Item 14.  Principal Accountant Fees and Services.

The information to be included under the caption “Independent Accounting Firm Fees” in the Proxy Statement is incorporated herein by reference.

PART IV

Item 15.  Exhibits and Financial Statement Schedules.

(a)(1)Financial Statements.

22

Report of Independent Registered Public Accounting Firm	F-1
Consolidated Balance Sheets at December 31, 2013 and 2012	F-2
Consolidated Statements of Operations for the years ended December 31, 2013, 2012 and 2011	F-3
Consolidated Statements of Comprehensive Income (Loss)  for the years ended December 31,
2013, 2012 and 2011	F-4
Consolidated Statements of Changes in Equity for the years ended December 31, 2013, 2012
and 2011	F-5
Consolidated Statements of Cash Flows for the years ended December 31, 2013, 2012 and 2011	F-6
Notes to Consolidated Financial Statements	F-7

(a)(2)Financial Statement Schedules.

Schedules are omitted because they are not required or are not applicable or the required

information is shown in the financial statements or notes thereto.

(a)(3)See item 15(b) below for a complete list of Exhibits to this Report including Executive Compensation Plans and Arrangements.

(b)Exhibits. 

We will furnish any exhibit upon request made to our Corporate Secretary, 1903 Wright Place, Suite 220, Carlsbad, CA 92008.  We charge $.50 per page to cover expenses of copying and mailing.

All documents referenced below were filed pursuant to the Securities Exchange Act of 1934 by the Company, file number 1-10153, unless otherwise indicated.

3.1Restated Certificate of Incorporation, as restated July 3, 1995 of the Company (incorporated by reference to Exhibit 3.1 to the Company’s quarterly report on Form 10-Q for the quarter ended September 30, 1995).

3.2By-laws of the Company as amended through December 14, 1999 (incorporated by reference to Exhibit 3.2 to the Company’s Annual Report on Form 10-K for the year ended December 31, 1999 (the “1999 10-K”)).

3.3Amendment to Amended and Restated Bylaws of the Company, dated July 10, 2002 (incorporated by reference to Exhibit 3.3 to the Company’s quarterly report on Form 10-Q for the quarter ended September 30, 2002 (the “Third Quarter 2002 10-Q”)).

3.4Certificate of Amendment of the Certificate of Incorporation of the Company, dated July 10, 2002 (incorporated by reference to Exhibit 3.4 to the Third Quarter 2002 10-Q.

3.5Certificate of Amendment of the Certificate of Incorporation of the Company, dated July 10, 2003 (incorporated by reference to Exhibit 3.5 to the Company’s Annual Report on Form 10-K for the year ended December 31, 2003 (the “2003 10-K”)).

3.6Certificate of Amendment of the Certificate of Incorporation of the Company, dated July 10, 2003 (incorporated by reference to Exhibit 3.6 to the Company’s 2003 10-K).

3.7Certificate of Amendment of the Certificate of Incorporation of the Company, dated August 2, 2010 (incorporated by reference to Exhibit 3.7 to the Company’s Annual Report on Form 10-K for the year ended December 31, 2010).

10.1Development Management Agreement between the Company and Provence Hills Development Company, LLC, dated as of August 14, 1998 (incorporated by reference to Exhibit 10.3 to the Company’s current report on Form 8‑K dated August 14, 1998).

10.2Administrative Services Agreement, dated as of March 1, 2000, between Leucadia Financial Corporation (“LFC”), the Company, HomeFed Resources Corporation and HomeFed Communities, Inc. (incorporated by reference to Exhibit 10.1 to the Company’s quarterly report on Form 10-Q for the quarter ended June 30, 2000).

23

10.3Amendment No. 1 dated as of November 1, 2000 to the Administrative Services Agreement dated as of March 1, 2000 (incorporated by reference to Exhibit 10.21 to the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2000 (the “2000 10-K”)).

10.4Amendment No. 2 dated as of February 28, 2001 to the Administrative Services Agreement dated as of March 1, 2000 (incorporated by reference to Exhibit 10.22 to the Company’s 2000 10-K).

10.5Amendment No. 3 dated as of December 31, 2001 to the Administrative Services Agreement dated as of March 1, 2000 (incorporated by reference to Exhibit 10.26 to the Company’s Annual Report on Form 10-K/A for the fiscal year ended December 31, 2001).

10.6Registration Rights Agreement dated as of October 21, 2002, by and between HomeFed Corporation and Leucadia National Corporation (incorporated by reference to Exhibit 10.2 to the Company’s current report on Form 8-K dated October 22, 2002).

10.7Form of Grant Letter for the 1999 Stock Incentive Plan (incorporated by reference to Exhibit 10.26 to the Company’s Annual Report on Form 10-K for the year ended December 31, 2005).+

10.8Amendment No. 4 dated as of May 28, 2002 to the Administrative Services Agreement dated as of March 1, 2000 (incorporated by reference to Exhibit 10.34 to the Company’s Annual Report on Form 10-K/A for the fiscal year ended December 31, 2002 (the “2002 10-K/A”)).

10.9Amendment No. 5 dated as of November 15, 2002 to the Administrative Services Agreement dated as of March 1, 2000 (incorporated by reference to Exhibit 10.35 of the 2002 10-K/A).

10.10Amendment dated as of October 21, 2002 to the Development Management Agreement dated as of August 14, 1998 (incorporated by reference to Exhibit 10.36 of the 2002 10-K/A).

10.11Contribution Agreement between the Company and San Elijo Hills Development Company, LLC, dated as of October 21, 2002 (incorporated by reference to Exhibit 10.37 of the 2002 10-K/A).

10.12Agreement and Guaranty, dated as of October 1, 2002, between Leucadia National Corporation and CDS Holding Corporation (incorporated by reference to Exhibit 10.38 of the 2002 10-K/A).

10.13Obligation Agreement, dated as of October 1, 2002, between Leucadia National Corporation and San Elijo Ranch, Inc. (incorporated by reference to Exhibit 10.39 of the 2002 10-K/A).

10.14Tax Allocation Agreement between the Company and its subsidiaries dated as of November 1, 2002 (incorporated by reference to Exhibit 10.21 to the Company’s 2003 10-K).

10.15Amendment No. 1 to the First Amended and Restated Development Agreement and Owner Participation Agreement between the City of San Marcos, the San Marcos Redevelopment Agency and the San Elijo Hills Development Company, LLC dated as of  February 11, 2004 (incorporated by reference to Exhibit 10.22 to the Company’s 2003 10-K).

10.16Amendment No. 6 dated as of December 31, 2003 to the Administrative Services Agreement dated as of March 1, 2000 (incorporated by reference to Exhibit 10.23 to the Company’s 2003 10-K).

10.17Amendment No. 7 dated as of December 31, 2004 to the Administrative Services Agreement dated as of March 1, 2000 (incorporated by reference to Exhibit 10.24 to the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2004).

10.18Amended and Restated 1999 Stock Incentive Plan (incorporated by reference to Annex A to the Company’s Proxy Statement dated June 18, 2009).  +

10.19Named Executive Officer Compensation (incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed January 2, 2014).

21Subsidiaries of the Company.

23Consent of PricewaterhouseCoopers LLP with respect to the incorporation by reference into the Company’s Registration Statement on Form S-8 (File No. 333-97079).

24

31.1Certification of Principal Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

31.2Certification of Principal Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

32.1Certification of Principal Executive Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.*

32.2Certification of Principal Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.*

101Financial statements from the Annual Report on Form 10-K of HomeFed Corporation for the year ended December 31, 2012, formatted in Extensible Business Reporting Language (XBRL); (i) the Consolidated Balance Sheets, (ii) the Consolidated Statements of Operations, (iii) the Consolidated Statements of Comprehensive Income (Loss), (iv) the Consolidated Statements of Changes in Shareholders Equity, (v) the Consolidated Statements of Cash Flows, and (vi) the Notes to Consolidated Financial Statements.

*Furnished herewith pursuant to Item 601(b)(32) of Regulation S-K.

+Management Employment Contract or Compensatory Plan/Arrangement.

25

SIGNATURES

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.

HOMEFED CORPORATION

February 18, 2014	By /s/	Erin N. Ruhe
		Erin N. Ruhe, Vice President, Treasurer and Controller
		(Principal Financial and Accounting 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		Signature	Title
February 18, 2014	By /s/	Joseph S. Steinberg	Chairman of the Board and Director
		Joseph S. Steinberg
February 18, 2014	By /s/	Paul J. Borden	President and Director
		Paul J. Borden	(Principal Executive Officer)
February 18, 2014	By /s/	Erin N. Ruhe	Vice President, Treasurer and Controller
		Erin N. Ruhe	(Principal Financial and Accounting Officer)
February 18, 2014	By /s/	Patrick D. Bienvenue	Director
		Patrick D. Bienvenue
February 18, 2014	By /s/	Timothy M. Considine	Director
		Timothy M. Considine
February 18, 2014	By /s/	Ian M. Cumming	Director
		Ian M. Cumming
February 18, 2014	By /s/	Michael A. Lobatz	Director
		Michael A. Lobatz

26

Report of Independent Registered Public Accounting Firm

To the Board of Directors and Stockholders of HomeFed Corporation:

In our opinion, the consolidated financial statements listed in the index appearing under Item 15(a)(1)present fairly, in all material respects, the financial position of HomeFed Corporationand its subsidiaries(the “Company”)atDecember 31, 2013 and 2012 and the results of their operations and their cash flows for each of the three years in the period endedDecember 31, 2013in conformity with accounting principles generally accepted in the United States of America.  Also in our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of December 31, 2013, based on criteria established in Internal Control - Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).  The Company's management is responsible for these financial statements, for maintaining effective internal control over financial reporting and for its assessment of the effectiveness of internal control over financial reporting, included in Management's Report on Internal Control Over Financial Reporting appearing under Item 9A.  Our responsibility is to express opinions on these financial statements and on the Company's internal control over financial reporting based on our integrated audits.  We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States).  Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the financial statements are free of material misstatement and whether effective internal control over financial reporting was maintained in all material respects.  Our audits of the financial statements included examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, and evaluating the overall financial statement presentation.  Our audit of internal control over financial reporting included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk.  Our audits also included performing such other procedures as we considered necessary in the circumstances. We believe that our audits provide a reasonable basis for our opinions.

A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles.  A company’s internal control over financial reporting includes those policies and procedures that (i) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (ii) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (iii) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements.  Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

/s/ PricewaterhouseCoopers LLP

PricewaterhouseCoopers LLP

February 18, 2014

Los Angeles, California

F-1

Part I -FINANCIAL INFORMATION
Item 1. Financial Statements.
HOMEFED CORPORATION AND SUBSIDIARIES
Consolidated Balance Sheets
December 31, 2013 and December 31, 2012
(Dollars in thousands, except par value)
	December 31,		December 31,
	2013		2012
ASSETS
Real estate	$	107,072	$	120,245
Cash and cash equivalents		57,306		22,987
Investments available for sale (amortized cost of $31,894 and $36,385)		31,896		36,390
Accounts receivable, deposits and other assets		1,715		1,030
Net deferred tax asset		6,413		8,757
TOTAL	$	204,402	$	189,409
LIABILITIES
Accounts payable and accrued liabilities	$	5,822	$	5,097
Non-refundable option payments		1,015		-
Liability for environmental remediation		1,543		4,607
Deferred revenue		2,739		886
Income taxes payable		3,125		1,644
Other liabilities		228		136
Total liabilities		14,472		12,370
COMMITMENTS AND CONTINGENCIES
EQUITY
Common stock, $.01 par value; 25,000,000 shares authorized; 7,879,500 shares outstanding after deducting 395,409 shares held in treasury		79		79
Additional paid-in capital		381,171		380,982
Accumulated other comprehensive income		1		3
Accumulated deficit		(201,416)		(212,684)
Total HomeFed Corporation common shareholders' equity		179,835		168,380
Noncontrolling interest		10,095		8,659
Total equity		189,930		177,039
TOTAL	$	204,402	$	189,409
The accompanying notes are an integral part of these consolidated financial statements.

F-2

HOMEFED CORPORATION AND SUBSIDIARIES
Consolidated Statements of Operations
For the years ended December 31, 2013, 2012 and 2011
(In thousands, except per share amounts)
	2013		2012		2011
REVENUES
Sales of real estate	$	50,097	$	28,193	$	27,522
Farming revenues		4,882		6,422		5,979
Rental income		511		509		448
Co-op marketing and advertising fees		1,142		557		192
		56,632		35,681		34,141
EXPENSES
Cost of sales		23,198		13,659		12,939
Reduction in estimated liability for environmental
remediation		(662)		(1,500)		-
General and administrative expenses		12,744		9,064		8,077
Farming expenses		2,859		2,873		2,862
Administrative services fees to Leucadia National
Corporation		180		180		180
		38,319		24,276		24,058
Income from operations		18,313		11,405		10,083
Interest and other income		889		107		382
Income before income taxes and noncontrolling
interest		19,202		11,512		10,465
Income tax provision		(6,498)		(4,080)		(4,368)
Net income		12,704		7,432		6,097
Net income attributable to the noncontrolling
interest		1,436		1,410		1,606
Net income attributable to HomeFed Corporation
common shareholders	$	11,268	$	6,022	$	4,491
Basic and diluted earnings per common share
attributable to HomeFed Corporation common
shareholders	$	1.43	$	0.76	$	0.57
The accompanying notes are an integral part of these consolidated financial statements.

F-3

HOMEFED CORPORATION AND SUBSIDIARIES
Consolidated Statements of Comprehensive Income (Loss)
For the years ended December 31, 2013, 2012 and 2011
(In thousands)
	2013		2012		2011
Net income	$	12,704	$	7,432	$	6,097
Other comprehensive income (loss):
Net unrealized holding gains (losses) on investments arising during the period, net of taxes of $(1), $2 and $(2)		(2)		2		(2)
Net change in unrealized holding gains (losses) on investments, net of taxes of $(1), $2 and $(2)		(2)		2		(2)
Other comprehensive income (loss), net of income taxes		(2)		2		(2)
Comprehensive income		12,702		7,434		6,095
Comprehensive (income) loss attributable to the noncontrolling interest		(1,436)		(1,410)		(1,606)
Comprehensive income attributable to HomeFed Corporation common shareholders	$	11,266	$	6,024	$	4,489
The accompanying notes are an integral part of these consolidated financial statements.

F-4

HOMEFED CORPORATION AND SUBSIDIARIES
Consolidated Statements of Changes in Equity
For the years ended December 31, 2013, 2012 and 2011
(In thousands, except par value)
	HomeFed Corporation Common Shareholders
	Common				Accumulated
	Stock		Additional		Other
	$.01 Par		Paid-In		Comprehensive		Accumulated				Noncontrolling
	Value		Capital		Income		Deficit		Subtotal		Interest		Total
Balance, January 1, 2011	$	79	$	376,110	$	3	$	(223,197)	$	152,995	$	15,117	$	168,112
Net income								4,491		4,491		1,606		6,097
Other comprehensive
loss, net of taxes						(2)				(2)				(2)
Share-based compensation
expense				222						222				222
Balance, Dec. 31, 2011	$	79	$	376,332	$	1	$	(218,706)	$	157,706	$	16,723	$	174,429
Net income								6,022		6,022		1,410		7,432
Acquisition of
noncontrolling interest				4,474						4,474		(9,474)		(5,000)
Other comprehensive
income, net of taxes						2				2				2
Share-based compensation
expense				176						176				176
Balance, Dec. 31, 2012	$	79	$	380,982	$	3	$	(212,684)	$	168,380	$	8,659	$	177,039
Net income								11,268		11,268		1,436		12,704
Other comprehensive
loss, net of taxes						(2)				(2)				(2)
Share-based compensation
expense				189						189				189
Balance, Dec. 31, 2013	$	79	$	381,171	$	1	$	(201,416)	$	179,835	$	10,095	$	189,930
The accompanying notes are an integral part of these consolidated financial statements.

F-5

HOMEFED CORPORATION AND SUBSIDIARIES
Consolidated Statements of Cash Flows
For the years ended December 31, 2013, 2012 and 2011
(In thousands)
	2013		2012		2011
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income	$	12,704	$	7,432	$	6,097
Adjustments to reconcile net income to net cash provided
by operating activities:
Reduction in estimated liability for environmental remediation		(662)		(1,500)		-
Provision for deferred income taxes		2,345		2,093		2,457
Share-based compensation expense		189		176		222
Depreciation and amortization of property, equipment and leasehold
improvements		239		249		244
Accretion of discount on investments available for sale		(35)		(40)		(45)
Changes in operating assets and liabilities:
Real estate		13,579		4,458		6,182
Accounts receivable, deposits and other assets		(823)		(20)		(389)
Deferred revenue		1,853		886		-
Accounts payable and accrued liabilities		725		1,977		(820)
Non-refundable option payments		1,015		(350)		(300)
Liability for environmental remediation		(2,402)		(2,865)		(680)
Income taxes receivable/payable		1,481		(83)		132
Other liabilities		92		(19)		(99)
Net cash provided by operating activities		30,300		12,394		13,001
CASH FLOWS FROM INVESTING ACTIVITIES:
Acquisition of real estate		(507)		(32,178)		(11,000)
Purchases of investments (other than short-term)		(68,374)		(90,549)		(92,569)
Proceeds from maturities of investments available for sale		72,900		94,900		87,600
Proceeds from sales of investments		-		2,600		-
Net cash provided by (used for) investing activities		4,019		(25,227)		(15,969)
CASH FLOWS FROM FINANCING ACTIVITIES:
Acquisition of noncontrolling interest		-		(5,000)		-
Net increase (decrease) in cash and cash equivalents		34,319		(17,833)		(2,968)
Cash and cash equivalents, beginning of period		22,987		40,820		43,788
Cash and cash equivalents, end of period	$	57,306	$	22,987	$	40,820
Supplemental disclosures of cash flow information:
Cash paid for income taxes	$	2,672	$	2,070	$	2,200
The accompanying notes are an integral part of these consolidated financial statements.

F-6

HOMEFED CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

1.SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Basis of Presentation – The accompanying consolidated financial statements include the accounts of HomeFed Corporation (the “Company”), Otay Land Company, LLC and its wholly-owned subsidiaries (“Otay Land Company”), HomeFed Resources Corporation, CDS Holding Corporation and its majority owned subsidiaries (“CDS”), HomeFed Fanita Rancho, LLC (“Fanita Ranch”), Rampage Vineyard, LLC (“Rampage”) and Ashville Park, LLC (“Ashville Park”).  The Company is currently engaged, directly and through its subsidiaries, in the investment in and development of residential real estate properties in California and Virginia.  Real estate development is the Company’s only business segment.  All intercompany balances and transactions have been eliminated in consolidation.

The Company’s business, real estate development, is highly competitive, and there are numerous residential real estate developers and development projects operating in the same geographic area in which the Company operates.  In addition, the residential real estate development industry is subject to increasing environmental, building, zoning and real estate regulations that are imposed by various federal, state and local authorities.  Timing of the initiation and completion of development projects depends upon receipt of necessary authorizations and approvals.  Furthermore, changes in prevailing local circumstances or applicable laws may require additional approvals, or modifications of approvals previously obtained.  Delays could adversely affect the Company’s ability to complete its projects, significantly increase the costs of doing so or drive potential customers to purchase competitors’ products.  Environmental laws may cause the Company to incur substantial compliance, mitigation and other costs, may restrict or prohibit development in certain areas and may delay completion of the Company’s development projects.  Delays arising from compliance with environmental laws and regulations could adversely affect the Company’s ability to complete its projects and significantly increase development costs.  The Company’s business may also be adversely affected by inflation and is interest-rate sensitive.

Critical Accounting Estimates – The preparation of financial statements in conformity with accounting principles generally accepted in the United States (“GAAP”) requires the Company to make estimates and assumptions that affect the reported amounts in the financial statements and disclosures of contingent assets and liabilities.  On an on-going basis, the Company evaluates all of these estimates and assumptions.  Actual results could differ from those estimates.

Profit Recognition on Sales of Real Estate – When the Company has an obligation to complete improvements on property subsequent to the date of sale, it utilizes the percentage of completion method of accounting to record revenues and cost of sales.  Under percentage of completion accounting, the Company recognizes revenues and cost of sales based upon the ratio of development costs completed as of the date of sale to an estimate of total development costs which will ultimately be incurred, including an estimate for common areas.  Revenues which cannot be recognized as of the date of sale are reported as deferred revenue on the consolidated balance sheets. 

The Company believes it can reasonably estimate its future costs and profit allocation in order to determine how much revenue should be deferred.  However, such estimates are based on numerous assumptions and require management’s judgment.  For example, the estimate of future development costs includes an assumption about the cost of construction services for which the Company has no current contractual arrangement.  If the estimate of these future costs proves to be too low, then the Company will have recognized too much profit as of the date of sale resulting in less profit to be reported as the improvements are completed.  However, to date the Company’s estimates of future development costs that have been used to determine the amount of revenue to be deferred at the date of sale have subsequently been proven to be reasonably accurate.

F-7

Prior to 2010, the percentage of completion method of accounting was applied for sold properties at the San Elijo Hills project; however, during the fourth quarter of 2009, the Company completed all the required improvements for sold properties at the San Elijo Hills project and all of the remaining deferred revenue was recognized in income.  During 2011 and 2010, since all required improvements to sold properties had been completed as of the closing date, the Company applied the full accrual method for those sales.  Accordingly, the Company recognized total sales proceeds, net of closing costs, in revenues and all costs in cost of sales on the closing date.  Commencing in 2012, revenue is again being deferred until the Company completes required improvements to properties sold.

Income Taxes – The Company provides for income taxes using the liability method.  The Company records a valuation allowance to reduce its net deferred tax asset to an amount that the Company expects is more likely than not to be realized.  If the Company’s estimate of the realizability of its deferred tax asset changes in the future, an adjustment to the valuation allowance would be recorded which would either increase or decrease income tax expense in such period.  The valuation allowance is determined after considering all relevant facts and circumstances, and is based, in significant part, on the Company’s projection of taxable income in the future.  Since any projection of future profitability is inherently unreliable, changes in the valuation allowance should be expected.

During 2013, the Company generated profits from lot sales at the San Elijo Hills and Ashville Park projects that were greater than projected as of December 31, 2012.  Also, the Company has entered into agreements to sell additional lots at both projects which are expected to close during 2014.  The Company considered its recent results and pending lot sale agreements to be positive evidence to be considered when estimating its future taxable income.  As a result, the Company was able to conclude that it is more likely than not that it will be able to realize an additional portion of the Company’s net deferred tax asset; accordingly, approximately $1,350,000 of the deferred tax valuation allowance was released as a credit to income tax expense during 2013.

During 2012 the Company acquired the Ashville Park project, profitably sold finished lots during 2012 and entered into an agreement to sell additional lots in 2013, some of which closed during the first quarter of 2013.  The Company believed that these sales represented positive evidence to be considered when estimating future taxable income that may be generated at the Ashville Park project.  The Company also lowered its estimated liability for environmental remediation costs during 2012, and updated its consolidated projection of future taxable income for this activity and for recent developments at its other projects.  As a result, the Company was able to conclude that it is more likely than not that it will be able to realize an additional portion of the Company’s net deferred tax asset; accordingly, approximately $750,000 of the deferred tax valuation allowance was released as a credit to income tax expense during 2012.

The projection of future taxable income is based upon numerous assumptions about the future, including future market conditions where the Company’s projects are located, regulatory requirements, estimates of future real estate revenues and development costs, future interest expense, operating and overhead costs and other factors.  To the extent the Company’s actual taxable income in the future exceeds its estimate, the Company will recognize additional tax benefits and reduce its valuation allowance; conversely, if the actual taxable income is less than the amounts projected, an addition to the valuation allowance would be recorded that would increase tax expense in the future.  Adjustments to the valuation allowance in the future should be expected.

The Company records interest and penalties, if any, with respect to uncertain tax positions as components of income tax expense.  Based on the Company’s evaluation of its tax filings at December 31, 2013, the Company did not record any amounts for uncertain tax positions. If any of the Company’s tax filing positions are successfully challenged, payments could be required that might be material.

Provision for Environmental Remediation  –The Company records environmental liabilities when it is probable that a liability has been incurred and the amount or range of the liability is reasonably estimable.  During 2002, the Company recorded a charge of $11,150,000 representing its estimate of the cost (including legal fees) to implement the most likely remediation alternative with respect to approximately 30 acres of undeveloped land owned by a subsidiary of Otay Land Company.  The estimated liability was neither discounted nor reduced for claims for recovery from previous owners and users of the land who may be liable, and may increase or decrease based upon the actual extent and nature of the remediation required, the actual cost of the remediation, the expenses of the regulatory process, the costs of post-remediation monitoring requirements, inflation and other items.  

The Company has periodically examined, and when appropriate, adjusted its liability for environmental remediation to reflect its current best estimate.  A change to the current estimate could result from, among other things, that the cost to implement the remediation is different than the Company’s current estimate, that the cost of future on-going monitoring efforts is differentthan the Company’s current estimate, and/or requirements imposed by regulatory authorities that the Company did not anticipate but is nevertheless required to implement.  During 2004, the Company increased its estimate of remediation costs by approximately $1,300,000, primarily due to increases in site investigation and remediation costs, and during 2003 by approximately $250,000, primarily for consulting costs.  During 2012, the Company’s revised its estimate of future remediation costs, including on-going monitoring expenses, which resulted in a reduction in the previously accrued estimate of $1,500,000.  Such amount was reflected on the consolidated statement of operations as a reduction to expenses.

F-8

During the fourth quarter of 2012, upon receipt of required approvals, the Company commenced remediation activities, which were completed in February 2013.  The Company received final approval from the County of San Diego Department of Environmental Health in June 2013; as a result, the Company reduced its liability for environmental remediation by $650,000.

Provision for Impairment Losses on Real Estate – The Company’s real estate is carried at cost.  Whenever events or changes in circumstances suggest that the carrying amount may not be recoverable, management assesses the recoverability of the carrying amount of its real estate in accordance with GAAPand, if impaired, reduces the carrying amount to its estimated fair value.  The process involved in evaluating assets for impairment and determining fair value requires estimates as to future events and market conditions.  This estimation process may assume that the Company has the ability to complete development and dispose of its real estate properties in the ordinary course of business based on management’s present plans and intentions.  If management determines that the carrying value of a specific real estate investment is impaired, a write-down is recorded as a charge to current period operations.  The evaluation process is based on estimates and assumptions and the ultimate outcome may be different.

The Company did not record any provisions for impairment losses during the years ended December 31, 2013, 2012 and 2011.

Real Estate – Real estate includes all expenditures incurred in connection with the acquisition, development and construction of the property, including interest and property taxes.  At acquisition, land costs are allocated to individual parcels or lots based on relative fair values.  Subsequent to acquisition, substantially all development costs are specifically identifiable to individual parcels or lots, or are considered allocated costs that are allocated principally based on acreage (principally property taxes, legal fees and consulting fees).  Capitalized land costs are charged to cost of sales at the time that revenue is recognized.

Cash and Cash Equivalents – Cash equivalents are money market accounts and short‑term, highly liquid investments that have maturities of less than three months at the time of acquisition. 

Investments –  Securities with maturities equal to or greater than three months at the time of acquisition are classified as investments availableforsale, and are carried at fair value with unrealized gains and losses reflected as a separate component of shareholders’ equity, net of taxes.  The cost of securities sold is based on specific identification.

Recognition of Fee Income – The Company may be contractually entitled to receive co-op marketing and advertising fees that are due when builders sell homes.  These fees are generally based upon a fixed percentage of the homes’ selling price and are recorded as revenue when the home is sold. 

Revenue and Profit Sharing Arrangements–  Certain of the Company’s lot purchase agreements with homebuilders include provisions that entitle the Company to a share of the revenues or profits realized by the homebuilders upon their sale of the homes, after certain thresholds are achieved.  The actual amount which could be received by the Company is generally based on a formula and other specified criteria contained in the lot purchase agreements, and are generally not payable and cannot be determined with reasonable certainty until the builder has completed the sale of a substantial portion of the homes covered by the lot purchase agreement.  The Company’s policy is to accrue revenue earned pursuant to these agreements when amounts are fully earned and payable pursuant to the lot purchase agreements, which is classified as sales of real estate.  Any amounts received from homebuilders prior to then are deferred.

The Company has not recognized any income from revenue or profit sharing arrangements during the last three years.

Option Deposits – Option payments received from prospective buyers are recognized as liabilities until the title of the real estate is transferred or the option is forfeited, or in the case of refundable deposits, the prospective buyer decides not to purchase the real estate and the deposit is returned.

Capitalization of Interest and Real Estate Taxes – If applicable, interest and real estate taxes attributable to land and property construction are capitalized and added to the cost of those properties while the properties are being actively developed.

Farming Revenues and Expenses – Income from farming related activities at the Rampage property are recognized when grapes are sold, and expenses from farming related activities are recognized when incurred.

Share-Based Compensation – The cost of all share-based payments to employees, including grants of employee stock options and warrants, are recognized in the financial statements based on their fair values.  The cost is recognized as an expense over the vesting period of the award.  The fair value of each award is estimated at the date of grant using the Black-Scholes option pricing model.

2.ACQUISITION OF CDS

F-9

In October 2002, the Company purchased from Leucadia National Corporation (together with its subsidiaries, “Leucadia”) all of the issued and outstanding shares of capital stock of CDS which, through its majority-owned indirect subsidiary, San Elijo Hills Development Company, LLC (“San Elijo”), is the owner of the San Elijo Hills project, a master-planned community located in the City of San Marcos, in San Diego County, California.  The Company has been the development manager for the San Elijo Hills project since August 1998.    The purchase price of $25,000,000 consisted of $1,000,000 in cash and 2,474,226 shares of the Company’s common stock, which represented approximately 30% of the Company’s outstanding common shares.  Prior to the acquisition, Leucadia had also committed to obtain project improvement bonds for the San Elijo Hills project which is required prior to the commencement of any project development (see Note 11). 

3.INVESTMENTS

At December 31, 2013 and 2012, the Company’s investments consisted of fixed income securities issued by the U.S. Government, which were classified as availableforsale.   All of the Company’s investments mature in one year or less.  The par value, amortized cost, gross unrealized gains and losses and estimated fair value of these investments as of December 31, 2013 and 2012 are as follows (in thousands):

									Fair Value Measurements Using
									Quoted Prices in		Significant
									Active Markets		Other
					Gross		Gross		for		Observable		Total
	Par		Amortized		Unrealized		Unrealized		Identical Assets		Inputs		Fair Value
	Value		Cost		Gains		Losses		(Level 1)		(Level 2)		Measurements
December 31, 2013
U.S. Treasury securities	$	31,900	$	31,894	$	2	$	-	$	31,896	$	-	$	31,896
December 31, 2012
U.S. Treasury securities	$	36,400	$	36,385	$	5	$	-	$	36,390	$	-	$	36,390

There were no proceeds from sales of investments classified as available for sale during 2013 and 2011.  Proceeds from sales of investments classified as available for sale were $2,600,000 during 2012.  Realized gross gains were not significant for 2013, 2012 and 2011.

The difference between the par value and amortized cost of an individual investment is accreted to interest income over the remaining life of the investment using the effective interest rate method. 

4.REAL ESTATE

A summary of real estate carrying values by project is as follows (in thousands):

		December 31,
	2013		2012
Held for development:
San Elijo Hills	$	35,915	$	45,585
Otay Ranch		38,848		36,018
Ashville Park		9,469		16,335
Fanita Ranch		14,688		14,054
Rampage		4,545		4,545
Subtotal		103,465		116,537
Held for investment-- San Elijo Hills		3,607		3,708
Total	$	107,072	$	120,245

The San Elijo Hills, Otay Ranch,Ashville Park and Fanita Ranchprojects are considered to be land under development while the Rampage property is not currently being developed.

In January 2011, the Company acquired in a foreclosure sale the Fanita Ranch property, a 2,600 acre parcel of vacant land located in Santee, California.  The aggregate purchase price of $12,350,000 consisted of cash consideration of $11,000,000 and the assumption of certain payables.  Fanita Ranch is partially entitled for approximately 1,400 residential units.  The Company acquired the property with the intention of completing the necessary entitlements to develop the property as a master-planned community,

F-10

although there can be no assurance that the Company will be successful in these efforts.  If successful, obtaining all the entitlements is expected to take several years.

In February 2012, the Company acquired Ashville Park, a 450 acre master planned community located in Virginia Beach, Virginia, for cash consideration of $17,350,000 including closing costs.  The Company acquired 451 entitled single family lots, of which 91 lots were finished lotsthat were available for sale and one lot was a visitor center.  

In October 2012, the Company purchased 52 single family lots at the San Elijo Hills project that had been previously sold to a homebuilder in 2005 and 2006.  The lots were purchased for cash consideration of $14,850,000.  Included on six of the lots are finished model homes that will require some renovation prior to being sold. 

5.NONCONTROLLING INTEREST

Through its ownership of CDS, the Company owns 85% of the common stock of San Elijo Ranch, Inc. (“SERI”).  Pursuant to a stockholders’ agreement with the holders of the noncontrolling interests in SERI, the Company loans funds to SERI and charges a 12% annual rate.  Once this loan is fully repaid, the noncontrolling shareholders of SERI are entitled to 15% of future cash flows distributed to shareholders.  As of December 31, 2013, approximately $10,100,000 has been recognized for the SERI noncontrolling interests.  Amounts recorded for the noncontrolling interests have been reduced for income taxes calculated pursuant to tax sharing agreements.

In December 2012, the Company purchased an indirect 20% noncontrolling interest in SERI for $5,000,000, increasing its effective interest in SERI from 68% to 85%.  The amount paid was $4,450,000 less than the amount recorded for the noncontrolling interest; such amount was credited to additional paid in capital.  As part of the purchase, pending litigation commenced by the holder of the purchased noncontrolling interest against the Company was settled without any payment.    

6.STOCK INCENTIVE PLANS

Under the Company’s Amended and Restated 1999 Stock Incentive Plan (the “Plan”), the Company may grant options, stock appreciation rights and restricted stock to non-employee directors, certain non-employees and employees up to a maximum grant of 30,000 shares to any individual in a given taxable year.  Pursuant to the Plan, each director of the Company is automatically granted options to purchase 1,000 shares on the date on which the annual meeting of stockholders is held.  In August 2004, following shareholder approval, the Plan was amended to, among other things, increase the number of shares of common stock available for issuance by 300,000 shares.  The Plan provides for the issuance of options and rights at not less than 100% of the fair market value of the underlying stock at the date of grant.  Options granted to employees and certain non-employees generally become exercisable in five equal instalments starting one year from the date of grant and must be exercised within six years from the date of grant.  Options granted to directors generally become exercisable in four equal instalments starting one year from the date of grant and must be exercised within five years from the date of grant.  No stock appreciation rights have been granted.  As of December 31, 2013, 405,400 shares were available for grant under the Plan. 

A summary of activity with respect to the Plan for 2013, 2012 and 2011 is as follows:

				Weighted-
	Common	Weighted-		Average
	Shares	Average		Remaining	Aggregate
	Subject to	Exercise		Contractual	Intrinsic
	Option	Price		Term	Value
Balance at January 1, 2011	104,500	$	30.02
Granted	6,000	$	21.50
Cancelled	(6,000)	$	65.50
Balance at December 31, 2011	104,500	$	27.50
Granted	6,000	$	22.35
Cancelled	(14,000)	$	41.18
Balance at December 31, 2012	96,500	$	25.19
Granted	6,000	$	32.30
Cancelled	(8,000)	$	36.44
Balance at December 31, 2013	94,500	$	24.69	2.4 years	$	1,125,300

F-11

Exercisable at December 31, 2013 53,700  $ 24.17  2.1 years $ 667,395 

The Company recorded compensation cost related to stock incentive plans of $190,000, $180,000 and $220,000 for the years ended December 31, 2013, 2012 and 2011, respectively; such costs reduced net income by $110,000, $110,000 and $130,000 for the years ended December 31, 2013, 2012and 2011, respectively.  As of December 31, 2013, total unrecognized compensation cost related to nonvested share-based compensation plans was $300,000; this cost is expected to be recognized over a weighted-average period of 1.0 year.

The following summary presents the weighted-average assumptions used for the Black-Scholes option pricing model to determine the fair value for each of the stock option grants made during each of the three years in the period ended December 31, 2013:

	2013		2012		2011
Risk free rate		1.20%		0.56%		1.13%
Expected volatility		30.85%		46.90%		46.67%
Expected dividend yield		0.0%		0.0%		0.0%
Expected life		4.3 years		4.3 years		4.3 years
Fair value per grant	$	8.70	$	8.49	$	8.30

The expected life assumptions were based on historical behavior for the awards identified.  The expected volatility was based on the historical behavior of the Company’s stock price.

In July 2004, the Board of Directors approved the repurchase of up to 500,000 shares of the Company’s common stock.  In 2008, the Company purchased 394,931 shares of the Company’s common stock for approximately $5,900,000 in a private transaction with an unrelated party.  During 2009, the Company purchased 478 shares of the Company’s common stock in an open market transaction in accordance with the Company’s repurchase plan.  After considering these transactions, the Company can repurchase up to 104,591 common shares without board approval.  Repurchased shares would be available for, among other things, use in connection with the Company’s stock option plan.  The shares may be purchased from time to time, subject to prevailing market conditions, in the open market, in privately negotiated transactions or otherwise.  Any such purchases may be commenced or suspended at any time without prior notice.

7.SALES OF REAL ESTATE

Revenues from sales of real estate for each of the three years in the period ended December 31, 2013 is comprised of the following (in thousands):

	2013		2012		2011
Developed lots at San Elijo Hills	$	37,370	$	20,649	$	26,697
Developed lots at Ashville Park		12,038		7,544		-
Residential condominium units at San Elijo Hills		689		-		825
Total	$	50,097	$	28,193	$	27,522

At the time the Company closes on sales of real estate,  a portion of the revenue is initially deferred if the Company is required to make significant improvements to the property.  For the years ended December 31, 2013 and 2012, the activity in the deferred revenue account is as follows (in thousands):

	2013		2012
Deferred revenue balance at January 1,	$	886	$	-
Revenue deferred on the date of sale		2,660		886
Deferred revenue recognized in operations		(807)		-
Deferred revenue balance at December 31,	$	2,739	$	886

F-12

As of December 31, 2013, the Company estimates that it will spend approximately $1,500,000 to complete the required improvements, including costs related to common areas.  The Company estimates these improvements will be substantially complete by the end of 2014.

As of December 31, 2013, the Company had entered into agreements to sell 15 lots at the Ashville Park project to homebuilders for aggregate cash proceeds of $2,500,000, for which it received non-refundable option deposits of $100,000.  Sales of 5 lots closed during the first quarter of 2014 for aggregate cash consideration of $800,000.

8.OTHER RESULTS OF OPERATIONS

Interest and other income for each of the three years in the period ended December 31, 2013 consists of the following (in thousands): 

	2013		2012		2011
Interest income	$	55	$	79	$	196
Gain on settlement of a lawsuit		764		-		-
Gain on settlement of a contract dispute		-		15		162
Other		70		13		24
Total	$	889	$	107	$	382

Advertising costs included in general and administrative expenses were $650,000, $650,000 and $550,000 for 2013, 2012 and 2011, respectively.  Expenses related to rental income at the San Elijo Hills project were $300,000 in each of 2013, 2012 and 2011.

9.INCOME TAXES

The benefit (provision) for income taxes for each of the three years in the period ended December 31, 2013 was as follows (in thousands):

	2013		2012		2011
State income taxes-- current	$	(1,212)	$	(642)	$	(549)
State income taxes-- deferred		(340)		(389)		(301)
Federal income taxes-- current		(2,905)		(1,337)		(1,363)
Federal income taxes-- deferred		(2,041)		(1,712)		(2,155)
	$	(6,498)	$	(4,080)	$	(4,368)

Current federal income taxes for all years principally relates to federal alternative minimum tax. 

The table below reconciles the expected statutory federal income tax to the actual income tax provision (in thousands):

	2013		2012		2011
Expected federal income tax provision	$	(6,721)	$	(4,029)	$	(3,663)
State income taxes, net of federal income tax benefit		(1,009)		(670)		(621)
Decrease in deferred tax valuation allowance		1,360		742		-
Recognition of previously unrecognized tax benefits		-		-		160
Permanent differences		(77)		(61)		(73)
Other		(51)		(62)		(171)
Actual income tax provision	$	(6,498)	$	(4,080)	$	(4,368)

F-13

At December 31, 2013 and 2012, the net deferred tax asset consisted of the following (in thousands):

	2013		2012
Net operating loss carryforwards	$	-	$	3,804
Land basis		3,503		4,520
Minimum tax credit carryovers		35,349		33,760
Other, net		1,860		2,332
		40,712		44,416
Valuation allowance		(34,299)		(35,659)
	$	6,413	$	8,757

As discussed above, during 2013 and 2012 the Company was able to conclude that it is more likely than not that it will be able to realize an additional portion of the Company’s net deferred tax asset; accordingly, approximately $1,350,000 and $750,000 of the deferred tax valuation allowance was released as a credit to income tax expense during 2013 and 2012, respectively.

The valuation allowance reserves for a substantial portion of the Company’s alternative minimum tax credit carryovers, which have no expiration date.   Minimum tax credit carryovers do not offset alternative minimum tax; however, they are able to reduce the Company’s federal income tax rate to 20% in any given year.  In order to fully utilize its alternative minimum tax credit carryovers, the Company would have to generate an additional $215,000,000 of taxable income above its current estimate to fully utilize all of the credits.  The Company has reserved for this benefit in its valuation allowance. 

The following table reconciles the total amount of unrecognized tax benefits as of the beginning and end of the period presented (in thousands):

	Unrecognized
	Tax Benefits		Interest		Total
Balance, January 1, 2011	$	90	$	60	$	150
Additional interest expense recognized		-		10		10
Reductions as a result of the lapse
of the statute of limitations		(90)		(70)		(160)
Balance, December 31, 2011		-		-		-
Additional interest expense recognized		-		-		-
Reductions as a result of the lapse
of the statute of limitations		-		-		-
Balance, December 31, 2012		-		-		-
Additional interest expense recognized		-		-		-
Reductions as a result of the lapse
of the statute of limitations		-		-		-
Balance, December 31, 2013	$	-	$	-	$	-

The Company recognized previously unrecognized tax benefits during 2011 (reducing income tax expense) due to the expiration of the statute of limitations for the 2006 California state income tax return.  The Company does not have any amounts in its consolidated balance sheet for unrecognized tax benefits related to uncertain tax positions at December 31, 2013 and 2012.  The statute of limitations with respect to the Company’s federal income tax returns has expired for all years through 2009 and with respect to California state income tax returns has expired for all years through 2008.

10.EARNINGS PER SHARE

Basic earnings per share of common stock was calculated by dividing net income by the sum of the weighted average number of common shares outstanding, and for diluted earnings per share, the incremental weighted average number of shares issuable upon

F-14

exercise of outstanding options for the periods they were outstanding.  The treasury stock method is used for these calculations.  The numerators and denominators used to calculate basic and diluted earnings per share for 2013, 2012 and 2011 are as follows (in thousands): 

	2013		2012		2011
Numerator – net income attributable to
HomeFed Corporation common shareholders	$	11,268	$	6,022	$	4,491
Denominator for basic earnings per share– weighted
average shares		7,880		7,880		7,880
Stock options		13		1		-
Denominator for diluted earnings per share– weighted
average shares		7,893		7,881		7,880

For 2011, there is no difference between basic and diluted per share weighted  average amounts primarily because the exercise prices of stock options were greater than the average market price for the period. 

11.COMMITMENTS AND CONTINGENCIES

Prior to its acquisition by the Company, a subsidiary of CDS entered into a non-cancelable operating lease for its office space, a portion of which was sublet to the Company and a portion of which was sublet to Leucadia.  Effective October 2002, as a result of the acquisition of CDS, sublease payments from Leucadia reflected in other incomewere $12,000 in each of 2013, 2012 and 2011.  Rental expense (net of sublease income) was $350,000 in 2013 and 2012, and $300,000 in 2011; the lease expires in October 2018.  Future minimum annual rentals (exclusive of real estate, maintenance and other charges) are approximately $250,000 per year for the remainder of the lease term.

The Company is required to obtain infrastructure improvement bonds primarily for the benefit of the City of San Marcos (the “City”) prior to the beginning of lot construction work and warranty bonds upon completion of such improvements in the San Elijo Hills project.  These bonds provide funds primarily to the City in the event the Company is unable or unwilling to complete certain infrastructure improvements in the San Elijo Hills project.  Leucadia is contractually obligated to obtain these bonds on behalf of CDS and its subsidiaries pursuant to the terms of agreements entered into when CDS was acquired by the Company.  CDS is responsible for paying all third party fees related to obtaining the bonds.  Should the City or others draw on the bonds for any reason, one of CDS’s subsidiaries would be obligated to reimburse Leucadia for the amount drawn.  As of December 31, 2013, the amount of outstanding bonds was approximately $2,600,000, none of which has been drawn upon.

The Company is also required to obtain infrastructure improvement bonds for the benefit of the City of Virginia Beach in connection with the Ashville Park project.  As of December 31, 2013, the amount of outstanding bonds was approximately $1,800,000, none of which has been drawn upon.

The Company has purchased a $10,000,000 excess insurance policy that provides coverage for general liability claims relating to homes sold at the San Elijo Hills project through August 1, 2011.  In 2012, the Company purchased a new $1,000,000 primary insurance policy and $10,000,000 excess insurance policy that provides coverage for general liability claims relating to unsold lots as of August 1, 2012.   In 2013, the Company purchased a new $1,000,000 primary insurance policy that provides coverage for general liability claims relating to unsold lots as of August 1, 2013.  In March 2012, the Company purchased a $1,000,000 primary policy and $10,000,000 excess policy that provide coverage for general liability claims related to homes sold at the Ashville Park project that expires in March 2014.  No claims have ever been made under these policies.  In addition, the Company is indemnified by its homebuilders and is named an additional insured by any contractor who works on the property.

The Company is subject to litigation which arises in the course of its business.  Except as otherwise disclosed herein, based on discussions with counsel, management is of the opinion that such litigation is not likely to have any significant adverse effect on the consolidated financial position of the Company, its consolidated results of operations or liquidity.

12.ADMINISTRATIVE SERVICES AGREEMENT

Pursuant to administrative services agreements, Leucadia provides administrative and accounting services to the Company, including providing the services of the Company’s Secretary.  Administrative fees paid to Leucadiawere $180,000 in each of 2013,

F-15

2012 and 2011.  The administrative services agreement automatically renews for successive annual periods unless terminated in accordance with its terms.  Leucadia has the right to terminate theagreement by giving the Company not less than one year’s prior notice, in which event the then monthly fee will remain in effect until the end of the notice period.  The Companyhas the right to terminate the agreement, without restriction or penalty, upon 30 days prior written notice to Leucadia.  The agreement has not been terminated by either party.

13.FAIR VALUE

The Company’s material financial instruments include cash and cash equivalents and investments classified as available for sale.  For cash and cash equivalents and investments available  forsale, the carrying amounts of such financial instruments approximate their fair values. 

No assets or liabilities were measured at fair value on a nonrecurring basis as of December 31, 2013 and 2012.

The Company does not invest in any derivatives or engage in any hedging activities.

14.SELECTED QUARTERLY FINANCIAL DATA (unaudited)

	First		Second		Third		Fourth
	Quarter		Quarter		Quarter		Quarter
	(In thousands, except per share amounts)
2013:
Sales of real estate	$	8,271	$	953	$	803	$	40,070
Farming revenues	$	-	$	-	$	3,805	$	1,077
Rental income	$	121	$	133	$	126	$	131
Co-op marketing and advertising fees	$	236	$	280	$	356	$	270
Cost of sales	$	5,759	$	561	$	471	$	16,407
Reduction in estimated liability for environmental
remediation	$	-	$	(662)	$	-	$	-
Farming expenses	$	876	$	897	$	881	$	205
Income (loss) from operations	$	(1,305)	$	(2,345)	$	1,126	$	20,837
Net income (loss) attributable to HomeFed
Corporation common shareholders	$	(769)	$	(1,131)	$	902	$	12,266
Basic earnings (loss) per common share attributable to
HomeFed Corporation shareholders	$	(0.10)	$	(0.14)	$	0.11	$	1.56
Diluted earnings (loss) per common share attributable to
HomeFed Corporation shareholders	$	(0.10)	$	(0.14)	$	0.11	$	1.56
2012:
Sales of real estate	$	3,350	$	-	$	3,971	$	20,872
Farming revenues	$	-	$	-	$	4,962	$	1,460
Rental income	$	124	$	130	$	130	$	125
Co-op marketing and advertising fees	$	114	$	104	$	75	$	264
Cost of sales	$	632	$	-	$	2,632	$	10,395
Reduction in estimated liability for environmental
remediation	$	-	$	-	$	-	$	1,500
Farming expenses	$	864	$	763	$	991	$	255
Income (loss) from operations	$	95	$	(2,473)	$	3,412	$	10,371
Net income (loss) attributable to HomeFed
Corporation common shareholders	$	(367)	$	(1,423)	$	2,028	$	5,784
Basic earnings (loss) per common share attributable to
HomeFed Corporation shareholders	$	(0.05)	$	(0.18)	$	0.26	$	0.73
Diluted earnings (loss) per common share attributable to
HomeFed Corporation shareholders	$	(0.05)	$	(0.18)	$	0.26	$	0.73

F-16

EX-21

Exhibit 21

HomeFed Corporation List of Subsidiaries

Name	State of Incorporation/Organization
Bird Ranch Development Company, LLC	Delaware
CDS Devco	California
CDS Holding Corporation	Delaware
Flat Rock Land Company, LLC	Delaware
HOFD Ashville Park LLC	Delaware
HomeFed Fanita Rancho, LLC	Delaware
HomeFed Resources, Inc.	California
JWO Land, LLC	Delaware
Otay Land Company, LLC	Delaware
Otay Valley Development Company, LLC	Delaware
Rampage Vineyard, LLC	Delaware
SEH F1, LLC	Delaware
San Elijo Hills Construction Company	California
San Elijo Hills Development Company, LLC	Delaware
San Elijo Hills Estates, LLC	Delaware
San Elijo Hills Town Center, LLC	Delaware
San Elijo Ranch, Inc.	California
The Estates at San Elijo Hills, LLC	Delaware

1

EX-23

Exhibit 23

Consent of Independent Registered Public Accounting Firm

We hereby consent to the incorporation by reference in the Registration Statement on Form S-8 (No. 333-97079) of HomeFed Corporation of our report dated February 18, 2014 relating to the consolidated financial statements and the effectiveness of internal control over financial reporting, which appears in this Form 10‑K.

/s/

PricewaterhouseCoopers LLP

Los Angeles, California

February 18, 2014

EX-31.1

Exhibit 31.1

CERTIFICATIONS

I, Paul J. Borden, certify that:

1.I have reviewed this annual report on Form 10-K of HomeFed Corporation;

2.Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4.The registrant's other certifying officers and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

(a)Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b)Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c)Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d)        Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect the registrant's internal control over financial reporting; and

5.The registrant's other certifying officers and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):

(a)         All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and

(b)        Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.

Date:  February 18, 2014	By:	/s/ Paul J. Borden
		Paul J. Borden
		President

EX-31.2

Exhibit 31.2

CERTIFICATIONS

I, Erin N. Ruhe, certify that:

1.I have reviewed this annual report on Form 10-K of HomeFed Corporation;

2.Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4.The registrant's other certifying officers and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

(a)        Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b)        Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c)         Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d)        Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect the registrant's internal control over financial reporting; and

5.The registrant's other certifying officers and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):

(a)        All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and

(b)        Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.

Date:  February18, 2014	By:	/s/ Erin N. Ruhe
		Erin N. Ruhe
		Vice President, Treasurer and Controller

EX-32.1

Exhibit 32.1

CERTIFICATION

PURSUANT TO 18 U.S.C. SECTION 1350,

AS ADOPTED BY SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

I, Paul J. Borden, as President of HomeFed Corporation (the "Company") certify, pursuant to 18 U.S.C. ss. 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that to my knowledge:

(1)the accompanying Form 10-K report for the period ending December 31, 2013 as filed with the U.S. Securities and Exchange Commission (the “Report”) fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and

(2)the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

Date:  February18, 2014	By:	/s/ Paul J. Borden
		Paul J. Borden
		President

EX-32.2

Exhibit 32.2

CERTIFICATION

PURSUANT TO 18 U.S.C. SECTION 1350,

AS ADOPTED BY SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

I, Erin N. Ruhe, as Vice President, Treasurer and Controller of HomeFed Corporation (the "Company") certify, pursuant to 18 U.S.C. ss. 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that to my knowledge:

(1)the accompanying Form 10-K report for the period ending December 31, 2013 as filed with the U.S. Securities and Exchange Commission (the “Report”) fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and

(2)the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

Date:  February 18, 2014	By:	/s/ Erin N. Ruhe
		Erin N. Ruhe
		Vice President, Treasurer and Controller

XML

Stock Incentive Plans (Narrative) (Details) (USD $)	12 Months Ended
	Dec. 31, 2013	Dec. 31, 2012	Dec. 31, 2011	Dec. 31, 2009	Dec. 31, 2008	Dec. 31, 1999	Aug. 31, 2004	Jul. 31, 2004
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Maximum grants avaliable per employee						30,000
Common stock avaliable for grant							300,000
Number of shares avaliable for grant	405,400
Compensation costs related to stock incentive plans	$ 190,000	$ 180,000	$ 220,000
Impact of compensation costs related to stock incentive plans on net income	110,000	110,000	130,000
Total unrecognized compensation cost	300,000
Weighted-average period of recognition for total unrecognized compensation cost	1 year
Number of shares authorized for repurchase								500,000
Common stock repurchased, shares				478	394,931
Purchase of common shares for treasury					$ 5,900,000
Remaining number of shares authorized for repurchase	104,591
Minimum [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Percentage of fair market value allowed for the issuance of options and rights	100.00%
Directors [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Automatic annual grant to directors	1,000
Vesting period	4 years
Term until first instalment of vesting becomes exercisable	1 year
Term until expiration	5 years
Employees And Certain Non-Employees [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Vesting period	5 years
Term until first instalment of vesting becomes exercisable	1 year
Term until expiration	6 years

XML

Administrative Services Agreement (Details) (USD $) In Thousands, unless otherwise specified	12 Months Ended
	Dec. 31, 2013	Dec. 31, 2012	Dec. 31, 2011
Administrative Services Agreement [Abstract]
Administrative services fee expenses	$ 180	$ 180	$ 180
Notice required for Leucadia to cancel agreement	1 year
Notice required for company to cancel agreement	30 days

XML

Income Taxes (Schedule Of Components Of Income Tax Benefit (Provision)) (Details) (USD $) In Thousands, unless otherwise specified	12 Months Ended
	Dec. 31, 2013	Dec. 31, 2012	Dec. 31, 2011
Income Taxes [Abstract]
State income taxes - current	$ (1,212)	$ (642)	$ (549)
State income taxes - deferred	(340)	(389)	(301)
Federal income taxes - current	(2,905)	(1,337)	(1,363)
Federal income taxes - deferred	(2,041)	(1,712)	(2,155)
Income tax provision	$ (6,498)	$ (4,080)	$ (4,368)

XML

Fair Value (Details) (USD $)	Dec. 31, 2013	Dec. 31, 2012
Fair Value [Abstract]
Assets measured at fair value on a nonrecurring basis	$ 0	$ 0
Liabilities measured at fair value on a nonrecurring basis	$ 0	$ 0

XML

Other Results Of Operations (Schedule Of Interest And Other Income) (Details) (USD $) In Thousands, unless otherwise specified	12 Months Ended
	Dec. 31, 2013	Dec. 31, 2012	Dec. 31, 2011
Other Results Of Operations [Abstract]
Interest income	$ 55	$ 79	$ 196
Gain on settlement of a lawsuit	764
Gain on settlement of a contract dispute		15	162
Other	70	13	24
Total	$ 889	$ 107	$ 382

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Acquisition Of CDS (Details) (USD $)	1 Months Ended
	Oct. 31, 2002
Acquisition Of CDS [Abstract]
Cash consideration	$ 25,000,000
Cash paid for acquired entity	$ 1,000,000
Shares issued for acquired entity	2,474,226
Percentage of outstanding shares acquired	30.00%

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Real Estate (Tables)

12 Months Ended

Dec. 31, 2013

Real Estate [Abstract]

Schedule Of Real Estate

		December 31,
	2013		2012
Held for development:
San Elijo Hills	$	35,915	$	45,585
Otay Ranch		38,848		36,018
Ashville Park		9,469		16,335
Fanita Ranch		14,688		14,054
Rampage		4,545		4,545
Subtotal		103,465		116,537
Held for investment-- San Elijo Hills		3,607		3,708
Total	$	107,072	$	120,245

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Income Taxes (Schedule Of Deferred Tax Assets) (Details) (USD $) In Thousands, unless otherwise specified	Dec. 31, 2013	Dec. 31, 2012
Income Taxes [Abstract]
Net operating loss carryforwards		$ 3,804
Land basis	3,503	4,520
Minimum tax credit carryovers	35,349	33,760
Other, net	1,860	2,332
Deferred tax asset, gross	40,712	44,416
Valuation allowance	(34,299)	(35,659)
Deferred tax asset, net	$ 6,413	$ 8,757

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Sales Of Real Estate (Narrative) (Details) (USD $)			3 Months Ended
	Dec. 31, 2013	Dec. 31, 2013 Ashville Park Project [Member] property	Mar. 31, 2014 Ashville Park Project [Member] Subsequent Event [Member] property
Real Estate Properties [Line Items]
Estimated costs to complete construction, including common areas	$ 1,500,000
Number of real estate properties contracted to sell		15
Sales price of real estate lots contracted to sell		2,500,000
Non-refundable option payment received		100,000
Number of real estate properties sold			5
Cash proceeds			$ 800,000

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Real Estate (Schedule Of Real Estate) (Details) (USD $) In Thousands, unless otherwise specified	Dec. 31, 2013	Dec. 31, 2012
Real Estate Properties [Line Items]
Held for development	$ 103,465	$ 116,537
Held for investment - San Elijo Hills	3,607	3,708
Total	107,072	120,245
San Elijo Hills [Member]
Real Estate Properties [Line Items]
Held for development	35,915	45,585
Otay Ranch [Member]
Real Estate Properties [Line Items]
Held for development	38,848	36,018
Ashville Park [Member]
Real Estate Properties [Line Items]
Held for development	9,469	16,335
Fanita Ranch [Member]
Real Estate Properties [Line Items]
Held for development	14,688	14,054
Rampage [Member]
Real Estate Properties [Line Items]
Held for development	$ 4,545	$ 4,545

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Earnings (Loss) Per Common Share (Details) (USD $) In Thousands, unless otherwise specified	3 Months Ended								12 Months Ended
	Dec. 31, 2013	Sep. 30, 2013	Jun. 30, 2013	Mar. 31, 2013	Dec. 31, 2012	Sep. 30, 2012	Jun. 30, 2012	Mar. 31, 2012	Dec. 31, 2013	Dec. 31, 2012	Dec. 31, 2011
Earnings Per Share [Abstract]
Numerator- net income attributable to HomeFed Corporation common shareholders	$ 12,266	$ 902	$ (1,131)	$ (769)	$ 5,784	$ 2,028	$ (1,423)	$ (367)	$ 11,268	$ 6,022	$ 4,491
Denominator for basic earnings per share– weighted average shares									7,880	7,880	7,880
Stock options									13	1
Denominator for diluted earnings per share– weighted average shares									7,893	7,881	7,880

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Income Taxes (Narrative) (Details) (USD $)	12 Months Ended
	Dec. 31, 2013	Dec. 31, 2012
Income Taxes [Abstract]
Deferred tax valuation allowance was released as a credit to income tax expense	$ 1,350,000	$ 750,000
Alternative minimum tax rate	20.00%
Taxable income necessary to utilize all alternative minimum tax credits	$ 215,000,000

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Summary Of Significant Accounting Policies

12 Months Ended

Dec. 31, 2013

Summary Of Significant Accounting Policies [Abstract]

Summary Of Significant Accounting Policies

1.           SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Basis of Presentation – The accompanying consolidated financial statements include the accounts of HomeFed Corporation (the “Company”), Otay Land Company, LLC and its wholly-owned subsidiaries (“Otay Land Company”), HomeFed Resources Corporation, CDS Holding Corporation and its majority owned subsidiaries (“CDS”), HomeFed Fanita Rancho, LLC (“Fanita Ranch”), Rampage Vineyard, LLC (“Rampage”) and Ashville Park, LLC (“Ashville Park”).  The Company is currently engaged, directly and through its subsidiaries, in the investment in and development of residential real estate properties in California and Virginia.  Real estate development is the Company’s only business segment.  All intercompany balances and transactions have been eliminated in consolidation.

The Company’s business, real estate development, is highly competitive, and there are numerous residential real estate developers and development projects operating in the same geographic area in which the Company operates.  In addition, the residential real estate development industry is subject to increasing environmental, building, zoning and real estate regulations that are imposed by various federal, state and local authorities.  Timing of the initiation and completion of development projects depends upon receipt of necessary authorizations and approvals.  Furthermore, changes in prevailing local circumstances or applicable laws may require additional approvals, or modifications of approvals previously obtained.  Delays could adversely affect the Company’s ability to complete its projects, significantly increase the costs of doing so or drive potential customers to purchase competitors’ products.  Environmental laws may cause the Company to incur substantial compliance, mitigation and other costs, may restrict or prohibit development in certain areas and may delay completion of the Company’s development projects.  Delays arising from compliance with environmental laws and regulations could adversely affect the Company’s ability to complete its projects and significantly increase development costs.  The Company’s business may also be adversely affected by inflation and is interest-rate sensitive.

Critical Accounting Estimates – The preparation of financial statements in conformity with accounting principles generally accepted in the United States (“GAAP”) requires the Company to make estimates and assumptions that affect the reported amounts in the financial statements and disclosures of contingent assets and liabilities.  On an on-going basis, the Company evaluates all of these estimates and assumptions.  Actual results could differ from those estimates.

Profit Recognition on Sales of Real Estate – When the Company has an obligation to complete improvements on property subsequent to the date of sale, it utilizes the percentage of completion method of accounting to record revenues and cost of sales.  Under percentage of completion accounting, the Company recognizes revenues and cost of sales based upon the ratio of development costs completed as of the date of sale to an estimate of total development costs which will ultimately be incurred, including an estimate for common areas.  Revenues which cannot be recognized as of the date of sale are reported as deferred revenue on the consolidated balance sheets. 

The Company believes it can reasonably estimate its future costs and profit allocation in order to determine how much revenue should be deferred.  However, such estimates are based on numerous assumptions and require management’s judgment.  For example, the estimate of future development costs includes an assumption about the cost of construction services for which the Company has no current contractual arrangement.  If the estimate of these future costs proves to be too low, then the Company will have recognized too much profit as of the date of sale resulting in less profit to be reported as the improvements are completed.  However, to date the Company’s estimates of future development costs that have been used to determine the amount of revenue to be deferred at the date of sale have subsequently been proven to be reasonably accurate.

Prior to 2010, the percentage of completion method of accounting was applied for sold properties at the San Elijo Hills project; however, during the fourth quarter of 2009, the Company completed all the required improvements for sold properties at the San Elijo Hills project and all of the remaining deferred revenue was recognized in income.  During 2011 and 2010, since all required improvements to sold properties had been completed as of the closing date, the Company applied the full accrual method for those sales.  Accordingly, the Company recognized total sales proceeds, net of closing costs, in revenues and all costs in cost of sales on the closing date.  Commencing in 2012, revenue is again being deferred until the Company completes required improvements to properties sold.

Income Taxes – The Company provides for income taxes using the liability method.  The Company records a valuation allowance to reduce its net deferred tax asset to an amount that the Company expects is more likely than not to be realized.  If the Company’s estimate of the realizability of its deferred tax asset changes in the future, an adjustment to the valuation allowance would be recorded which would either increase or decrease income tax expense in such period.  The valuation allowance is determined after considering all relevant facts and circumstances, and is based, in significant part, on the Company’s projection of taxable income in the future.  Since any projection of future profitability is inherently unreliable, changes in the valuation allowance should be expected.

During 2013, the Company generated profits from lot sales at the San Elijo Hills and Ashville Park projects that were greater than projected as of December 31, 2012.  Also, the Company has entered into agreements to sell additional lots at both projects which are expected to close during 2014.  The Company considered its recent results and pending lot sale agreements to be positive evidence to be considered when estimating its future taxable income.  As a result, the Company was able to conclude that it is more likely than not that it will be able to realize an additional portion of the Company’s net deferred tax asset; accordingly, approximately $1,350,000 of the deferred tax valuation allowance was released as a credit to income tax expense during 2013.

During 2012 the Company acquired the Ashville Park project, profitably sold finished lots during 2012 and entered into an agreement to sell additional lots in 2013, some of which closed during the first quarter of 2013.  The Company believed that these sales represented positive evidence to be considered when estimating future taxable income that may be generated at the Ashville Park project.  The Company also lowered its estimated liability for environmental remediation costs during 2012, and updated its consolidated projection of future taxable income for this activity and for recent developments at its other projects.  As a result, the Company was able to conclude that it is more likely than not that it will be able to realize an additional portion of the Company’s net deferred tax asset; accordingly, approximately $750,000 of the deferred tax valuation allowance was released as a credit to income tax expense during 2012.

The projection of future taxable income is based upon numerous assumptions about the future, including future market conditions where the Company’s projects are located, regulatory requirements, estimates of future real estate revenues and development costs, future interest expense, operating and overhead costs and other factors.  To the extent the Company’s actual taxable income in the future exceeds its estimate, the Company will recognize additional tax benefits and reduce its valuation allowance; conversely, if the actual taxable income is less than the amounts projected, an addition to the valuation allowance would be recorded that would increase tax expense in the future.  Adjustments to the valuation allowance in the future should be expected.

The Company records interest and penalties, if any, with respect to uncertain tax positions as components of income tax expense.  Based on the Company’s evaluation of its tax filings at December 31, 2013, the Company did not record any amounts for uncertain tax positions. If any of the Company’s tax filing positions are successfully challenged, payments could be required that might be material.

Provision for Environmental Remediation  –The Company records environmental liabilities when it is probable that a liability has been incurred and the amount or range of the liability is reasonably estimable.  During 2002, the Company recorded a charge of $11,150,000 representing its estimate of the cost (including legal fees) to implement the most likely remediation alternative with respect to approximately 30 acres of undeveloped land owned by a subsidiary of Otay Land Company.  The estimated liability was neither discounted nor reduced for claims for recovery from previous owners and users of the land who may be liable, and may increase or decrease based upon the actual extent and nature of the remediation required, the actual cost of the remediation, the expenses of the regulatory process, the costs of post-remediation monitoring requirements, inflation and other items.  

The Company has periodically examined, and when appropriate, adjusted its liability for environmental remediation to reflect its current best estimate.  A change to the current estimate could result from, among other things, that the cost to implement the remediation is different than the Company’s current estimate, that the cost of future on-going monitoring efforts is differentthan the Company’s current estimate, and/or requirements imposed by regulatory authorities that the Company did not anticipate but is nevertheless required to implement.  During 2004, the Company increased its estimate of remediation costs by approximately $1,300,000, primarily due to increases in site investigation and remediation costs, and during 2003 by approximately $250,000, primarily for consulting costs.  During 2012, the Company’s revised its estimate of future remediation costs, including on-going monitoring expenses, which resulted in a reduction in the previously accrued estimate of $1,500,000.  Such amount was reflected on the consolidated statement of operations as a reduction to expenses.

During the fourth quarter of 2012, upon receipt of required approvals, the Company commenced remediation activities, which were completed in February 2013.  The Company received final approval from the County of San Diego Department of Environmental Health in June 2013; as a result, the Company reduced its liability for environmental remediation by $650,000.

Provision for Impairment Losses on Real Estate – The Company’s real estate is carried at cost.  Whenever events or changes in circumstances suggest that the carrying amount may not be recoverable, management assesses the recoverability of the carrying amount of its real estate in accordance with GAAPand, if impaired, reduces the carrying amount to its estimated fair value.  The process involved in evaluating assets for impairment and determining fair value requires estimates as to future events and market conditions.  This estimation process may assume that the Company has the ability to complete development and dispose of its real estate properties in the ordinary course of business based on management’s present plans and intentions.  If management determines that the carrying value of a specific real estate investment is impaired, a write-down is recorded as a charge to current period operations.  The evaluation process is based on estimates and assumptions and the ultimate outcome may be different.

The Company did not record any provisions for impairment losses during the years ended December 31, 2013, 2012 and 2011.

Real Estate – Real estate includes all expenditures incurred in connection with the acquisition, development and construction of the property, including interest and property taxes.  At acquisition, land costs are allocated to individual parcels or lots based on relative fair values.  Subsequent to acquisition, substantially all development costs are specifically identifiable to individual parcels or lots, or are considered allocated costs that are allocated principally based on acreage (principally property taxes, legal fees and consulting fees).  Capitalized land costs are charged to cost of sales at the time that revenue is recognized.

Cash and Cash Equivalents – Cash equivalents are money market accounts and short‑term, highly liquid investments that have maturities of less than three months at the time of acquisition. 

Investments –  Securities with maturities equal to or greater than three months at the time of acquisition are classified as investments availableforsale, and are carried at fair value with unrealized gains and losses reflected as a separate component of shareholders’ equity, net of taxes.  The cost of securities sold is based on specific identification.

Recognition of Fee Income – The Company may be contractually entitled to receive co-op marketing and advertising fees that are due when builders sell homes.  These fees are generally based upon a fixed percentage of the homes’ selling price and are recorded as revenue when the home is sold. 

Revenue and Profit Sharing Arrangements–  Certain of the Company’s lot purchase agreements with homebuilders include provisions that entitle the Company to a share of the revenues or profits realized by the homebuilders upon their sale of the homes, after certain thresholds are achieved.  The actual amount which could be received by the Company is generally based on a formula and other specified criteria contained in the lot purchase agreements, and are generally not payable and cannot be determined with reasonable certainty until the builder has completed the sale of a substantial portion of the homes covered by the lot purchase agreement.  The Company’s policy is to accrue revenue earned pursuant to these agreements when amounts are fully earned and payable pursuant to the lot purchase agreements, which is classified as sales of real estate.  Any amounts received from homebuilders prior to then are deferred.

The Company has not recognized any income from revenue or profit sharing arrangements during the last three years.

Option Deposits – Option payments received from prospective buyers are recognized as liabilities until the title of the real estate is transferred or the option is forfeited, or in the case of refundable deposits, the prospective buyer decides not to purchase the real estate and the deposit is returned.

Capitalization of Interest and Real Estate Taxes – If applicable, interest and real estate taxes attributable to land and property construction are capitalized and added to the cost of those properties while the properties are being actively developed.

Farming Revenues and Expenses – Income from farming related activities at the Rampage property are recognized when grapes are sold, and expenses from farming related activities are recognized when incurred.

Share-Based Compensation – The cost of all share-based payments to employees, including grants of employee stock options and warrants, are recognized in the financial statements based on their fair values.  The cost is recognized as an expense over the vesting period of the award.  The fair value of each award is estimated at the date of grant using the Black-Scholes option pricing model.

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Sales Of Real Estate (Schedule Of Real Estate Sales) (Details) (USD $) In Thousands, unless otherwise specified	3 Months Ended							12 Months Ended
	Dec. 31, 2013	Sep. 30, 2013	Jun. 30, 2013	Mar. 31, 2013	Dec. 31, 2012	Sep. 30, 2012	Mar. 31, 2012	Dec. 31, 2013	Dec. 31, 2012	Dec. 31, 2011
Real Estate Properties [Line Items]
Sales of real estate	$ 40,070	$ 803	$ 953	$ 8,271	$ 20,872	$ 3,971	$ 3,350	$ 50,097	$ 28,193	$ 27,522
Developed Lots [Member] | San Elijo Hills [Member]
Real Estate Properties [Line Items]
Sales of real estate								37,370	20,649	26,697
Developed Lots [Member] | Ashville Park [Member]
Real Estate Properties [Line Items]
Sales of real estate								12,038	7,544
Residential Condominium Unit [Member] | San Elijo Hills [Member]
Real Estate Properties [Line Items]
Sales of real estate								$ 689		$ 825

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Income Taxes (Tables)

12 Months Ended

Dec. 31, 2013

Income Taxes [Abstract]

Schedule Of Components Of Income Tax Benefit (Provision)

	2013		2012		2011
State income taxes-- current	$	(1,212)	$	(642)	$	(549)
State income taxes-- deferred		(340)		(389)		(301)
Federal income taxes-- current		(2,905)		(1,337)		(1,363)
Federal income taxes-- deferred		(2,041)		(1,712)		(2,155)
	$	(6,498)	$	(4,080)	$	(4,368)

Reconciliation Of Effective Tax Provision

	2013		2012		2011
Expected federal income tax provision	$	(6,721)	$	(4,029)	$	(3,663)
State income taxes, net of federal income tax benefit		(1,009)		(670)		(621)
Decrease in deferred tax valuation allowance		1,360		742		-
Recognition of previously unrecognized tax benefits		-		-		160
Permanent differences		(77)		(61)		(73)
Other		(51)		(62)		(171)
Actual income tax provision	$	(6,498)	$	(4,080)	$	(4,368)

Schedule Of Deferred Tax Assets

	2013		2012
Net operating loss carryforwards	$	-	$	3,804
Land basis		3,503		4,520
Minimum tax credit carryovers		35,349		33,760
Other, net		1,860		2,332
		40,712		44,416
Valuation allowance		(34,299)		(35,659)
	$	6,413	$	8,757

Changes In Unrecognized Tax Benefits

	Unrecognized
	Tax Benefits		Interest		Total
Balance, January 1, 2011	$	90	$	60	$	150
Additional interest expense recognized		-		10		10
Reductions as a result of the lapse
of the statute of limitations		(90)		(70)		(160)
Balance, December 31, 2011		-		-		-
Additional interest expense recognized		-		-		-
Reductions as a result of the lapse
of the statute of limitations		-		-		-
Balance, December 31, 2012		-		-		-
Additional interest expense recognized		-		-		-
Reductions as a result of the lapse
of the statute of limitations		-		-		-
Balance, December 31, 2013	$	-	$	-	$	-

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Other Results Of Operations (Tables)

12 Months Ended

Dec. 31, 2013

Other Results Of Operations [Abstract]

Schedule Of Interest And Other Income

	2013		2012		2011
Interest income	$	55	$	79	$	196
Gain on settlement of a lawsuit		764		-		-
Gain on settlement of a contract dispute		-		15		162
Other		70		13		24
Total	$	889	$	107	$	382

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Selected Quarterly Financial Data (Details) (USD $)	1 Months Ended	3 Months Ended								12 Months Ended
	Jun. 30, 2013	Dec. 31, 2013	Sep. 30, 2013	Jun. 30, 2013	Mar. 31, 2013	Dec. 31, 2012	Sep. 30, 2012	Jun. 30, 2012	Mar. 31, 2012	Dec. 31, 2013	Dec. 31, 2012	Dec. 31, 2011
Selected Quarterly Financial Data [Abstract]
Sales of real estate		$ 40,070,000	$ 803,000	$ 953,000	$ 8,271,000	$ 20,872,000	$ 3,971,000		$ 3,350,000	$ 50,097,000	$ 28,193,000	$ 27,522,000
Farming revenues		1,077,000	3,805,000			1,460,000	4,962,000			4,882,000	6,422,000	5,979,000
Rental income		131,000	126,000	133,000	121,000	125,000	130,000	130,000	124,000	511,000	509,000	448,000
Co-op marketing and advertising fees		270,000	356,000	280,000	236,000	264,000	75,000	104,000	114,000	1,142,000	557,000	192,000
Cost of sales		16,407,000	471,000	561,000	5,759,000	10,395,000	2,632,000		632,000	23,198,000	13,659,000	12,939,000
Reduction in estimated liability for environmental remediation	(650,000)			(662,000)		1,500,000					(1,500,000)
Farming expenses		205,000	881,000	897,000	876,000	255,000	991,000	763,000	864,000	2,859,000	2,873,000	2,862,000
Income (loss) from operations		20,837,000	1,126,000	(2,345,000)	(1,305,000)	10,371,000	3,412,000	(2,473,000)	95,000	18,313,000	11,405,000	10,083,000
Net income (loss) attributable to HomeFed Corporation common shareholders		$ 12,266,000	$ 902,000	$ (1,131,000)	$ (769,000)	$ 5,784,000	$ 2,028,000	$ (1,423,000)	$ (367,000)	$ 11,268,000	$ 6,022,000	$ 4,491,000
Basic earnings (loss) per common share attributable to HomeFed Corporation common shareholders		$ 1.56	$ 0.11	$ (0.14)	$ (0.10)	$ 0.73	$ 0.26	$ (0.18)	$ (0.05)
Diluted earnings (loss) per common share attributable to HomeFed Corporation common shareholders		$ 1.56	$ 0.11	$ (0.14)	$ (0.10)	$ 0.73	$ 0.26	$ (0.18)	$ (0.05)

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Sales Of Real Estate (Schedule Of Changes In Deferred Revenue) (Details) (USD $) In Thousands, unless otherwise specified	12 Months Ended
	Dec. 31, 2013	Dec. 31, 2012
Sales Of Real Estate [Abstract]
Deferred Revenue, Beginning Balance	$ 886
Revenue deferred on the date of sale	2,660	886
Deferred revenue recognized in operations	(807)
Deferred Revenue, Ending Balance	$ 2,739	$ 886

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Earnings Per Share (Tables)

12 Months Ended

Dec. 31, 2013

Earnings Per Share [Abstract]

Schedule Of Calculation Of Numerator And Denominator For Loss Per Common Share

	2013		2012		2011
Numerator – net income attributable to
HomeFed Corporation common shareholders	$	11,268	$	6,022	$	4,491
Denominator for basic earnings per share– weighted
average shares		7,880		7,880		7,880
Stock options		13		1		-
Denominator for diluted earnings per share– weighted
average shares		7,893		7,881		7,880

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Selected Quarterly Financial Data (Tables)

12 Months Ended

Dec. 31, 2013

Selected Quarterly Financial Data [Abstract]

Schedule Of Quarterly Financial Data

	First		Second		Third		Fourth
	Quarter		Quarter		Quarter		Quarter
	(In thousands, except per share amounts)
2013:
Sales of real estate	$	8,271	$	953	$	803	$	40,070
Farming revenues	$	-	$	-	$	3,805	$	1,077
Rental income	$	121	$	133	$	126	$	131
Co-op marketing and advertising fees	$	236	$	280	$	356	$	270
Cost of sales	$	5,759	$	561	$	471	$	16,407
Reduction in estimated liability for environmental
remediation	$	-	$	(662)	$	-	$	-
Farming expenses	$	876	$	897	$	881	$	205
Income (loss) from operations	$	(1,305)	$	(2,345)	$	1,126	$	20,837
Net income (loss) attributable to HomeFed
Corporation common shareholders	$	(769)	$	(1,131)	$	902	$	12,266
Basic earnings (loss) per common share attributable to
HomeFed Corporation shareholders	$	(0.10)	$	(0.14)	$	0.11	$	1.56
Diluted earnings (loss) per common share attributable to
HomeFed Corporation shareholders	$	(0.10)	$	(0.14)	$	0.11	$	1.56
2012:
Sales of real estate	$	3,350	$	-	$	3,971	$	20,872
Farming revenues	$	-	$	-	$	4,962	$	1,460
Rental income	$	124	$	130	$	130	$	125
Co-op marketing and advertising fees	$	114	$	104	$	75	$	264
Cost of sales	$	632	$	-	$	2,632	$	10,395
Reduction in estimated liability for environmental
remediation	$	-	$	-	$	-	$	1,500
Farming expenses	$	864	$	763	$	991	$	255
Income (loss) from operations	$	95	$	(2,473)	$	3,412	$	10,371
Net income (loss) attributable to HomeFed
Corporation common shareholders	$	(367)	$	(1,423)	$	2,028	$	5,784
Basic earnings (loss) per common share attributable to
HomeFed Corporation shareholders	$	(0.05)	$	(0.18)	$	0.26	$	0.73
Diluted earnings (loss) per common share attributable to
HomeFed Corporation shareholders	$	(0.05)	$	(0.18)	$	0.26	$	0.73

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Consolidated Statements Of Cash Flows (USD $)	12 Months Ended
	Dec. 31, 2013	Dec. 31, 2012	Dec. 31, 2011
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income	$ 12,704,000	$ 7,432,000	$ 6,097,000
Adjustments to reconcile net income to net cash provided by operating activities:
Reduction in estimated liability for environmental remediation	(662,000)	(1,500,000)
Provision for deferred income taxes	2,345,000	2,093,000	2,457,000
Share-based compensation expense	189,000	176,000	222,000
Depreciation and amortization of property, equipment and leasehold improvements	239,000	249,000	244,000
Accretion of discount on investments available for sale	(35,000)	(40,000)	(45,000)
Changes in operating assets and liabilities:
Real estate	13,579,000	4,458,000	6,182,000
Accounts receivable, deposits and other assets	(823,000)	(20,000)	(389,000)
Deferred revenue	1,853,000	886,000
Accounts payable and accrued liabilities	725,000	1,977,000	(820,000)
Non-refundable option payments	1,015,000	(350,000)	(300,000)
Liability for environmental remediation	(2,402,000)	(2,865,000)	(680,000)
Income taxes receivable/payable	1,481,000	(83,000)	132,000
Other liabilities	92,000	(19,000)	(99,000)
Net cash used for operating activities	30,300,000	12,394,000	13,001,000
CASH FLOWS FROM INVESTING ACTIVITIES:
Acquisition of real estate	(507,000)	(32,178,000)	(11,000,000)
Purchases of investments (other than short-term)	(68,374,000)	(90,549,000)	(92,569,000)
Proceeds from maturities of investments available for sale	72,900,000	94,900,000	87,600,000
Proceeds from sale of investments	0	2,600,000	0
Net cash provided by (used for) investing activities	4,019,000	(25,227,000)	(15,969,000)
CASH FLOWS FROM FINANCING ACTIVITIES:
Acquisition of noncontrolling interest		(5,000,000)
Net increase (decrease) in cash and cash equivalents	34,319,000	(17,833,000)	(2,968,000)
Cash and cash equivalents, beginning of period	22,987,000	40,820,000	43,788,000
Cash and cash equivalents, end of period	57,306,000	22,987,000	40,820,000
Supplemental disclosures of cash flow information:
Cash paid for income taxes	$ 2,672,000	$ 2,070,000	$ 2,200,000

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Summary Of Significant Accounting Policies (Details) (USD $)	1 Months Ended	3 Months Ended		12 Months Ended
	Jun. 30, 2013	Jun. 30, 2013	Dec. 31, 2012	Dec. 31, 2013 acre	Dec. 31, 2012	Dec. 31, 2011	Dec. 31, 2004	Dec. 31, 2003	Dec. 31, 2002
Summary Of Significant Accounting Policies [Abstract]
Deferred tax valuation allowance was released as a credit to income tax expense				$ 1,350,000	$ 750,000
Environmental remediation charge							1,300,000	250,000	11,150,000
Area of land related to environmental remediation				30
Reduction in the previously accrued environmental remediation amount	650,000	662,000	(1,500,000)		1,500,000
Provision for impairment losses on real estate				$ 0	$ 0	$ 0

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Stock Incentive Plans (Schedule Of Option Activity) (Details) (USD $)	12 Months Ended
	Dec. 31, 2013	Dec. 31, 2012	Dec. 31, 2011
Stock Incentive Plans [Abstract]
Common Shares Subject to Option, Balance	96,500	104,500	104,500
Common Shares Subject to Option, Granted	6,000	6,000	6,000
Common Shares Subject to Option, Cancelled	(8,000)	(14,000)	(6,000)
Common Shares Subject to Option, Balance	94,500	96,500	104,500
Common Shares Subject to Option, Exercisable at December 31, 2013	53,700
Weighted-Average Exercise Price, Balance	$ 25.19	$ 27.50	$ 30.02
Weighted-Average Exercise Price, Granted	$ 32.30	$ 22.35	$ 21.50
Weighted-Average Exercise Price, Cancelled	$ 36.44	$ 41.18	$ 65.50
Weighted-Average Exercise Price, Balance	$ 24.69	$ 25.19	$ 27.50
Weighted-Average Exercise Price, Exercisable at December 31, 2013	$ 24.17
Weighted Average Remaining Contractual Term, Balance at December 31, 2013	2 years 4 months 24 days
Weighted Average Remaining Contractual Term, Exercisable at December 31, 2013	2 years 1 month 6 days
Aggregate Intrinsic Value, Balance at December 31, 2013	$ 1,125,300
Aggregate Intrinsic Value, Exercisable at December 31, 2013	$ 667,395

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Commitments And Contingencies (Details) (USD $)	12 Months Ended			7 Months Ended	12 Months Ended			12 Months Ended		12 Months Ended
	Dec. 31, 2013	Dec. 31, 2012	Dec. 31, 2011	Jul. 31, 2011 General Liability And Professional Liability Insurance [Member]	Dec. 31, 2012 General Liability And Professional Liability Insurance [Member]	Dec. 31, 2012 General Liability [Member]	Dec. 31, 2013 San Elijo Hills [Member]	Dec. 31, 2013 San Elijo Hills [Member] General Liability [Member]	Dec. 31, 2013 Ashville Park [Member]	Dec. 31, 2012 2012 Policy [Member] San Elijo Hills [Member] General Liability And Professional Liability Insurance [Member]	Dec. 31, 2012 2012 Policy [Member] San Elijo Hills [Member] General Liability [Member]
Commitments And Contingencies [Line Items]
Sublease payments from Leucadia	$ 12,000	$ 12,000	$ 12,000
Rental expense (net of sublease income)	350,000	350,000	300,000
Future minimum annual rentals	250,000
Amount of outstanding bonds							2,600,000		1,800,000
Insurance coverage				$ 10,000,000	$ 10,000,000	$ 1,000,000		$ 1,000,000		$ 10,000,000	$ 1,000,000

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Consolidated Balance Sheets (USD $) In Thousands, unless otherwise specified	Dec. 31, 2013	Dec. 31, 2012
ASSETS
Real estate	$ 107,072	$ 120,245
Cash and cash equivalents	57,306	22,987
Investments available for sale (amortized cost of $31,894 and $36,385)	31,896	36,390
Accounts receivable, deposits and other assets	1,715	1,030
Net deferred tax asset	6,413	8,757
TOTAL	204,402	189,409
LIABILITIES
Accounts payable and accrued liabilities	5,822	5,097
Non-refundable option payments	1,015
Liability for environmental remediation	1,543	4,607
Deferred revenue	2,739	886
Income taxes payable	3,125	1,644
Other liabilities	228	136
Total liabilities	14,472	12,370
COMMITMENTS AND CONTINGENCIES
EQUITY
Common stock, $.01 par value; 25,000,000 shares authorized; 7,879,500 shares outstanding after deducting 395,409 shares held in treasury	79	79
Additional paid-in capital	381,171	380,982
Accumulated other comprehensive income	1	3
Accumulated deficit	(201,416)	(212,684)
Total HomeFed Corporation common shareholders' equity	179,835	168,380
Noncontrolling interest	10,095	8,659
Total equity	189,930	177,039
TOTAL	$ 204,402	$ 189,409

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Other Results Of Operations (Narrative) (Details) (USD $)	12 Months Ended
	Dec. 31, 2013	Dec. 31, 2012	Dec. 31, 2011
Other Results Of Operations [Abstract]
Advertising costs	$ 650,000	$ 650,000	$ 550,000
Expenses related to rental income	$ 300,000	$ 300,000	$ 300,000

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Consolidated Statements Of Comprehensive Income (Loss) (Parenthetical) (USD $) In Thousands, unless otherwise specified	12 Months Ended
	Dec. 31, 2013	Dec. 31, 2012	Dec. 31, 2011
Consolidated Statements Of Comprehensive Income (Loss) [Abstract]
Net unrealized holding gains (losses) on investments arising during the period, tax provision (benefit)	$ (1)	$ 2	$ (2)
Net change in unrealized holding gains (losses) on investments, tax provision (benefit)	$ (1)	$ 2	$ (2)

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Investments (Schedule Of Avaliable For Sale Investments) (Details) (USD $) In Thousands, unless otherwise specified	Dec. 31, 2013	Dec. 31, 2012
Schedule of Available-for-sale Securities [Line Items]
Amortized Cost	$ 31,894	$ 36,385
US Treasury Securities [Member]
Schedule of Available-for-sale Securities [Line Items]
Par Value	31,900	36,400
Amortized Cost	31,894	36,385
Gross Unrealized Gains	2	5
Gross Unrealized Losses
Fair Value Measurements	31,896	36,390
Quoted Prices In Active Markets For Identical Assets (Level 1) [Member] | US Treasury Securities [Member]
Schedule of Available-for-sale Securities [Line Items]
Fair Value Measurements	31,896	36,390
Significant Other Observable Inputs (Level 2) [Member] | US Treasury Securities [Member]
Schedule of Available-for-sale Securities [Line Items]
Fair Value Measurements

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Selected Quarterly Financial Data

12 Months Ended

Dec. 31, 2013

Selected Quarterly Financial Data [Abstract]

Selected Quarterly Financial Data

14.          SELECTED QUARTERLY FINANCIAL DATA (unaudited)

	First		Second		Third		Fourth
	Quarter		Quarter		Quarter		Quarter
	(In thousands, except per share amounts)
2013:
Sales of real estate	$	8,271	$	953	$	803	$	40,070
Farming revenues	$	-	$	-	$	3,805	$	1,077
Rental income	$	121	$	133	$	126	$	131
Co-op marketing and advertising fees	$	236	$	280	$	356	$	270
Cost of sales	$	5,759	$	561	$	471	$	16,407
Reduction in estimated liability for environmental
remediation	$	-	$	(662)	$	-	$	-
Farming expenses	$	876	$	897	$	881	$	205
Income (loss) from operations	$	(1,305)	$	(2,345)	$	1,126	$	20,837
Net income (loss) attributable to HomeFed
Corporation common shareholders	$	(769)	$	(1,131)	$	902	$	12,266
Basic earnings (loss) per common share attributable to
HomeFed Corporation shareholders	$	(0.10)	$	(0.14)	$	0.11	$	1.56
Diluted earnings (loss) per common share attributable to
HomeFed Corporation shareholders	$	(0.10)	$	(0.14)	$	0.11	$	1.56
2012:
Sales of real estate	$	3,350	$	-	$	3,971	$	20,872
Farming revenues	$	-	$	-	$	4,962	$	1,460
Rental income	$	124	$	130	$	130	$	125
Co-op marketing and advertising fees	$	114	$	104	$	75	$	264
Cost of sales	$	632	$	-	$	2,632	$	10,395
Reduction in estimated liability for environmental
remediation	$	-	$	-	$	-	$	1,500
Farming expenses	$	864	$	763	$	991	$	255
Income (loss) from operations	$	95	$	(2,473)	$	3,412	$	10,371
Net income (loss) attributable to HomeFed
Corporation common shareholders	$	(367)	$	(1,423)	$	2,028	$	5,784
Basic earnings (loss) per common share attributable to
HomeFed Corporation shareholders	$	(0.05)	$	(0.18)	$	0.26	$	0.73
Diluted earnings (loss) per common share attributable to
HomeFed Corporation shareholders	$	(0.05)	$	(0.18)	$	0.26	$	0.73

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Real Estate (Narrative) (Details) (USD $)	12 Months Ended			1 Months Ended
	Dec. 31, 2013	Dec. 31, 2012	Dec. 31, 2011	Feb. 29, 2012 Ashville Park [Member] acre	Jan. 31, 2011 Fanita Ranch [Member] acre property	Oct. 31, 2012 San Elijo Hills [Member]	Feb. 29, 2012 Single Family Lots [Member] Ashville Park [Member] property	Oct. 31, 2012 Single Family Lots [Member] San Elijo Hills [Member] property	Feb. 29, 2012 Finished Single Family Lots [Member] Ashville Park [Member] property	Oct. 31, 2012 Finished Single Family Lots [Member] San Elijo Hills [Member] property
Real Estate Properties [Line Items]
Area of real estate property (acres)				450	2,600
Purchase price of property acquired					$ 12,350,000
Cash payment for acquisition of real estate	$ 507,000	$ 32,178,000	$ 11,000,000	$ 17,350,000	$ 11,000,000	$ 14,850,000
Residential units					1,400		451	52	91	6

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Investments (Tables)

12 Months Ended

Dec. 31, 2013

Investments [Abstract]

Schedule Of Available For Sale Investments

									Fair Value Measurements Using
									Quoted Prices in		Significant
									Active Markets		Other
					Gross		Gross		for		Observable		Total
	Par		Amortized		Unrealized		Unrealized		Identical Assets		Inputs		Fair Value
	Value		Cost		Gains		Losses		(Level 1)		(Level 2)		Measurements
December 31, 2013
U.S. Treasury securities	$	31,900	$	31,894	$	2	$	-	$	31,896	$	-	$	31,896
December 31, 2012
U.S. Treasury securities	$	36,400	$	36,385	$	5	$	-	$	36,390	$	-	$	36,390

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Consolidated Statements Of Changes In Equity (USD $) In Thousands	Common Stock $.01 Par Value [Member]	Additional Paid-In Capital [Member]	Accumulated Other Comprehensive Income [Member]	Accumulated Deficit [Member]	Subtotal [Member]	Noncontrolling Interest [Member]	Total
Balance at Dec. 31, 2010	$ 79	$ 376,110	$ 3	$ (223,197)	$ 152,995	$ 15,117	$ 168,112
Net income				4,491	4,491	1,606	6,097
Other comprehensive income (loss), net of taxes			(2)		(2)		(2)
Share-based compensation expense		222			222		222
Balance at Dec. 31, 2011	79	376,332	1	(218,706)	157,706	16,723	174,429
Net income				6,022	6,022	1,410	7,432
Acquisition of noncontrolling interest		4,474			4,474	(9,474)	(5,000)
Other comprehensive income (loss), net of taxes			2		2		2
Share-based compensation expense		176			176		176
Balance at Dec. 31, 2012	79	380,982	3	(212,684)	168,380	8,659	177,039
Net income				11,268	11,268	1,436	12,704
Other comprehensive income (loss), net of taxes			(2)		(2)		(2)
Share-based compensation expense		189			189		189
Balance at Dec. 31, 2013	$ 79	$ 381,171	$ 1	$ (201,416)	$ 179,835	$ 10,095	$ 189,930

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Consolidated Balance Sheets (Parenthetical) (USD $) In Thousands, except Share data, unless otherwise specified	Dec. 31, 2013	Dec. 31, 2012
Consolidated Balance Sheets [Abstract]
Investments available for sale, amortized cost	$ 31,894	$ 36,385
Common stock, par value	$ 0.01	$ 0.01
Common shares, authorized	25,000,000	25,000,000
Common shares, shares outstanding	7,879,500	7,879,500
Treasury stock, shares	395,409	395,409

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Income Taxes

12 Months Ended

Dec. 31, 2013

Income Taxes [Abstract]

Income Taxes

9.INCOME TAXES

The benefit (provision) for income taxes for each of the three years in the period ended December 31, 2013 was as follows (in thousands):

	2013		2012		2011
State income taxes-- current	$	(1,212)	$	(642)	$	(549)
State income taxes-- deferred		(340)		(389)		(301)
Federal income taxes-- current		(2,905)		(1,337)		(1,363)
Federal income taxes-- deferred		(2,041)		(1,712)		(2,155)
	$	(6,498)	$	(4,080)	$	(4,368)

Current federal income taxes for all years principally relates to federal alternative minimum tax. 

The table below reconciles the expected statutory federal income tax to the actual income tax provision (in thousands):

	2013		2012		2011
Expected federal income tax provision	$	(6,721)	$	(4,029)	$	(3,663)
State income taxes, net of federal income tax benefit		(1,009)		(670)		(621)
Decrease in deferred tax valuation allowance		1,360		742		-
Recognition of previously unrecognized tax benefits		-		-		160
Permanent differences		(77)		(61)		(73)
Other		(51)		(62)		(171)
Actual income tax provision	$	(6,498)	$	(4,080)	$	(4,368)

At December 31, 2013 and 2012, the net deferred tax asset consisted of the following (in thousands):

	2013		2012
Net operating loss carryforwards	$	-	$	3,804
Land basis		3,503		4,520
Minimum tax credit carryovers		35,349		33,760
Other, net		1,860		2,332
		40,712		44,416
Valuation allowance		(34,299)		(35,659)
	$	6,413	$	8,757

As discussed above, during 2013 and 2012 the Company was able to conclude that it is more likely than not that it will be able to realize an additional portion of the Company’s net deferred tax asset; accordingly, approximately $1,350,000 and $750,000 of the deferred tax valuation allowance was released as a credit to income tax expense during 2013 and 2012, respectively.

The valuation allowance reserves for a substantial portion of the Company’s alternative minimum tax credit carryovers, which have no expiration date.   Minimum tax credit carryovers do not offset alternative minimum tax; however, they are able to reduce the Company’s federal income tax rate to 20% in any given year.  In order to fully utilize its alternative minimum tax credit carryovers, the Company would have to generate an additional $215,000,000 of taxable income above its current estimate to fully utilize all of the credits.  The Company has reserved for this benefit in its valuation allowance. 

The following table reconciles the total amount of unrecognized tax benefits as of the beginning and end of the period presented (in thousands):

	Unrecognized
	Tax Benefits		Interest		Total
Balance, January 1, 2011	$	90	$	60	$	150
Additional interest expense recognized		-		10		10
Reductions as a result of the lapse
of the statute of limitations		(90)		(70)		(160)
Balance, December 31, 2011		-		-		-
Additional interest expense recognized		-		-		-
Reductions as a result of the lapse
of the statute of limitations		-		-		-
Balance, December 31, 2012		-		-		-
Additional interest expense recognized		-		-		-
Reductions as a result of the lapse
of the statute of limitations		-		-		-
Balance, December 31, 2013	$	-	$	-	$	-

The Company recognized previously unrecognized tax benefits during 2011 (reducing income tax expense) due to the expiration of the statute of limitations for the 2006 California state income tax return.  The Company does not have any amounts in its consolidated balance sheet for unrecognized tax benefits related to uncertain tax positions at December 31, 2013 and 2012.  The statute of limitations with respect to the Company’s federal income tax returns has expired for all years through 2009 and with respect to California state income tax returns has expired for all years through 2008.

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Document And Entity Information (USD $)	12 Months Ended
	Dec. 31, 2013	Feb. 06, 2014	Jun. 30, 2013
Document And Entity Information [Abstract]
Document Type	10-K
Amendment Flag	false
Document Period End Date	Dec. 31, 2013
Document Fiscal Period Focus	FY
Document Fiscal Year Focus	2013
Entity Registrant Name	HOMEFED CORP
Entity Central Index Key	0000833795
Current Fiscal Year End Date	--12-31
Entity Filer Category	Accelerated Filer
Entity Common Stock, Shares Outstanding		7,879,500
Entity Voluntary Filers	No
Entity Current Reporting Status	Yes
Entity Well-known Seasoned Issuer	No
Entity Public Float			$ 131,276,500

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Earnings Per Share

12 Months Ended

Dec. 31, 2013

Earnings Per Share [Abstract]

Earnings Per Share

10.EARNINGS PER SHARE

Basic earnings per share of common stock was calculated by dividing net income by the sum of the weighted average number of common shares outstanding, and for diluted earnings per share, the incremental weighted average number of shares issuable upon exercise of outstanding options for the periods they were outstanding.  The treasury stock method is used for these calculations.  The numerators and denominators used to calculate basic and diluted earnings per share for 2013, 2012 and 2011 are as follows (in thousands): 

	2013		2012		2011
Numerator – net income attributable to
HomeFed Corporation common shareholders	$	11,268	$	6,022	$	4,491
Denominator for basic earnings per share– weighted
average shares		7,880		7,880		7,880
Stock options		13		1		-
Denominator for diluted earnings per share– weighted
average shares		7,893		7,881		7,880

For 2011, there is no difference between basic and diluted per share weighted  average amounts primarily because the exercise prices of stock options were greater than the average market price for the period. 

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Consolidated Statements Of Operations (USD $) In Thousands, except Per Share data, unless otherwise specified	12 Months Ended
	Dec. 31, 2013	Dec. 31, 2012	Dec. 31, 2011
REVENUES
Sales of real estate	$ 50,097	$ 28,193	$ 27,522
Farming revenues	4,882	6,422	5,979
Rental income	511	509	448
Co-op marketing and advertising fees	1,142	557	192
Total revenues	56,632	35,681	34,141
EXPENSES
Cost of sales	23,198	13,659	12,939
Reduction in estimated liability for environmental remediation	(662)	(1,500)
General and administrative expenses	12,744	9,064	8,077
Farming expenses	2,859	2,873	2,862
Administrative services fees to Leucadia National Corporation	180	180	180
Total expenses	38,319	24,276	24,058
Income from operations	18,313	11,405	10,083
Interest and other income	889	107	382
Income before income taxes and noncontrolling interest	19,202	11,512	10,465
Income tax provision	(6,498)	(4,080)	(4,368)
Net income	12,704	7,432	6,097
Net income attributable to noncontrolling interest	1,436	1,410	1,606
Net income attributable to HomeFed Corporation common shareholders	$ 11,268	$ 6,022	$ 4,491
Basic and diluted earnings per common share attributable to HomeFed Corporation common shareholders	$ 1.43	$ 0.76	$ 0.57

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Real Estate

12 Months Ended

Dec. 31, 2013

Real Estate [Abstract]

Real Estate

4.REAL ESTATE

A summary of real estate carrying values by project is as follows (in thousands):

		December 31,
	2013		2012
Held for development:
San Elijo Hills	$	35,915	$	45,585
Otay Ranch		38,848		36,018
Ashville Park		9,469		16,335
Fanita Ranch		14,688		14,054
Rampage		4,545		4,545
Subtotal		103,465		116,537
Held for investment-- San Elijo Hills		3,607		3,708
Total	$	107,072	$	120,245

The San Elijo Hills, Otay Ranch,Ashville Park and Fanita Ranch projects are considered to be land under development while the Rampage property is not currently being developed.

In January 2011, the Company acquired in a foreclosure sale the Fanita Ranch property, a 2,600 acre parcel of vacant land located in Santee, California.  The aggregate purchase price of $12,350,000 consisted of cash consideration of $11,000,000 and the assumption of certain payables.  Fanita Ranch is partially entitled for approximately 1,400 residential units.  The Company acquired the property with the intention of completing the necessary entitlements to develop the property as a master-planned community, although there can be no assurance that the Company will be successful in these efforts.  If successful, obtaining all the entitlements is expected to take several years.

In February 2012, the Company acquired Ashville Park, a450 acre master planned community located in Virginia Beach, Virginia, for cash consideration of $17,350,000 including closing costs.  The Company acquired 451 entitled single family lots, of which 91lots were finished lots that were available for sale and one lot was a visitor center.  

In October 2012, the Company purchased 52 single family lots at the San Elijo Hills project that had been previously sold to a homebuilder in 2005 and 2006.  The lots were purchased for cash consideration of $14,850,000.  Included on six of the lots are finished model homes that will require some renovation prior to being sold. 

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Investments

12 Months Ended

Dec. 31, 2013

Investments [Abstract]

Investments

3.INVESTMENTS

At December 31, 2013 and 2012, the Company’s investments consisted of fixed income securities issued by the U.S. Government, which were classified as availableforsale.   All of the Company’s investments mature in one year or less.  The par value, amortized cost, gross unrealized gains and losses and estimated fair value of these investments as of December 31, 2013 and 2012 are as follows (in thousands):

									Fair Value Measurements Using
									Quoted Prices in		Significant
									Active Markets		Other
					Gross		Gross		for		Observable		Total
	Par		Amortized		Unrealized		Unrealized		Identical Assets		Inputs		Fair Value
	Value		Cost		Gains		Losses		(Level 1)		(Level 2)		Measurements
December 31, 2013
U.S. Treasury securities	$	31,900	$	31,894	$	2	$	-	$	31,896	$	-	$	31,896
December 31, 2012
U.S. Treasury securities	$	36,400	$	36,385	$	5	$	-	$	36,390	$	-	$	36,390

There were no proceeds from sales of investments classified as available for sale during 2013 and 2011.  Proceeds from sales of investments classified as available for sale were $2,600,000 during 2012.  Realized gross gains were not significant for 2013, 2012 and 2011.

The difference between the par value and amortized cost of an individual investment is accreted to interest income over the remaining life of the investment using the effective interest rate method. 

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Summary Of Significant Accounting Policies (Policy)

12 Months Ended

Dec. 31, 2013

Summary Of Significant Accounting Policies [Abstract]

Basis Of Presentation

Basis of Presentation – The accompanying consolidated financial statements include the accounts of HomeFed Corporation (the “Company”), Otay Land Company, LLC and its wholly-owned subsidiaries (“Otay Land Company”), HomeFed Resources Corporation, CDS Holding Corporation and its majority owned subsidiaries (“CDS”), HomeFed Fanita Rancho, LLC (“Fanita Ranch”), Rampage Vineyard, LLC (“Rampage”) and Ashville Park, LLC (“Ashville Park”).  The Company is currently engaged, directly and through its subsidiaries, in the investment in and development of residential real estate properties in California and Virginia.  Real estate development is the Company’s only business segment.  All intercompany balances and transactions have been eliminated in consolidation.

The Company’s business, real estate development, is highly competitive, and there are numerous residential real estate developers and development projects operating in the same geographic area in which the Company operates.  In addition, the residential real estate development industry is subject to increasing environmental, building, zoning and real estate regulations that are imposed by various federal, state and local authorities.  Timing of the initiation and completion of development projects depends upon receipt of necessary authorizations and approvals.  Furthermore, changes in prevailing local circumstances or applicable laws may require additional approvals, or modifications of approvals previously obtained.  Delays could adversely affect the Company’s ability to complete its projects, significantly increase the costs of doing so or drive potential customers to purchase competitors’ products.  Environmental laws may cause the Company to incur substantial compliance, mitigation and other costs, may restrict or prohibit development in certain areas and may delay completion of the Company’s development projects.  Delays arising from compliance with environmental laws and regulations could adversely affect the Company’s ability to complete its projects and significantly increase development costs.  The Company’s business may also be adversely affected by inflation and is interest-rate sensitive.

Critical Accounting Estimates

Critical Accounting Estimates – The preparation of financial statements in conformity with accounting principles generally accepted in the United States (“GAAP”) requires the Company to make estimates and assumptions that affect the reported amounts in the financial statements and disclosures of contingent assets and liabilities.  On an on-going basis, the Company evaluates all of these estimates and assumptions.  Actual results could differ from those estimates.

Profit Recognition On Sales Of Real Estate

Profit Recognition on Sales of Real Estate – When the Company has an obligation to complete improvements on property subsequent to the date of sale, it utilizes the percentage of completion method of accounting to record revenues and cost of sales.  Under percentage of completion accounting, the Company recognizes revenues and cost of sales based upon the ratio of development costs completed as of the date of sale to an estimate of total development costs which will ultimately be incurred, including an estimate for common areas.  Revenues which cannot be recognized as of the date of sale are reported as deferred revenue on the consolidated balance sheets. 

The Company believes it can reasonably estimate its future costs and profit allocation in order to determine how much revenue should be deferred.  However, such estimates are based on numerous assumptions and require management’s judgment.  For example, the estimate of future development costs includes an assumption about the cost of construction services for which the Company has no current contractual arrangement.  If the estimate of these future costs proves to be too low, then the Company will have recognized too much profit as of the date of sale resulting in less profit to be reported as the improvements are completed.  However, to date the Company’s estimates of future development costs that have been used to determine the amount of revenue to be deferred at the date of sale have subsequently been proven to be reasonably accurate.

Prior to 2010, the percentage of completion method of accounting was applied for sold properties at the San Elijo Hills project; however, during the fourth quarter of 2009, the Company completed all the required improvements for sold properties at the San Elijo Hills project and all of the remaining deferred revenue was recognized in income.  During 2011 and 2010, since all required improvements to sold properties had been completed as of the closing date, the Company applied the full accrual method for those sales.  Accordingly, the Company recognized total sales proceeds, net of closing costs, in revenues and all costs in cost of sales on the closing date.  Commencing in 2012, revenue is again being deferred until the Company completes required improvements to properties sold.

Income Taxes

Income Taxes – The Company provides for income taxes using the liability method.  The Company records a valuation allowance to reduce its net deferred tax asset to an amount that the Company expects is more likely than not to be realized.  If the Company’s estimate of the realizability of its deferred tax asset changes in the future, an adjustment to the valuation allowance would be recorded which would either increase or decrease income tax expense in such period.  The valuation allowance is determined after considering all relevant facts and circumstances, and is based, in significant part, on the Company’s projection of taxable income in the future.  Since any projection of future profitability is inherently unreliable, changes in the valuation allowance should be expected.

During 2013, the Company generated profits from lot sales at the San Elijo Hills and Ashville Park projects that were greater than projected as of December 31, 2012.  Also, the Company has entered into agreements to sell additional lots at both projects which are expected to close during 2014.  The Company considered its recent results and pending lot sale agreements to be positive evidence to be considered when estimating its future taxable income.  As a result, the Company was able to conclude that it is more likely than not that it will be able to realize an additional portion of the Company’s net deferred tax asset; accordingly, approximately $1,350,000 of the deferred tax valuation allowance was released as a credit to income tax expense during 2013.

During 2012 the Company acquired the Ashville Park project, profitably sold finished lots during 2012 and entered into an agreement to sell additional lots in 2013, some of which closed during the first quarter of 2013.  The Company believed that these sales represented positive evidence to be considered when estimating future taxable income that may be generated at the Ashville Park project.  The Company also lowered its estimated liability for environmental remediation costs during 2012, and updated its consolidated projection of future taxable income for this activity and for recent developments at its other projects.  As a result, the Company was able to conclude that it is more likely than not that it will be able to realize an additional portion of the Company’s net deferred tax asset; accordingly, approximately $750,000 of the deferred tax valuation allowance was released as a credit to income tax expense during 2012.

The projection of future taxable income is based upon numerous assumptions about the future, including future market conditions where the Company’s projects are located, regulatory requirements, estimates of future real estate revenues and development costs, future interest expense, operating and overhead costs and other factors.  To the extent the Company’s actual taxable income in the future exceeds its estimate, the Company will recognize additional tax benefits and reduce its valuation allowance; conversely, if the actual taxable income is less than the amounts projected, an addition to the valuation allowance would be recorded that would increase tax expense in the future.  Adjustments to the valuation allowance in the future should be expected.

The Company records interest and penalties, if any, with respect to uncertain tax positions as components of income tax expense.  Based on the Company’s evaluation of its tax filings at December 31, 2013, the Company did not record any amounts for uncertain tax positions. If any of the Company’s tax filing positions are successfully challenged, payments could be required that might be material.

Provision For Environmental Remediation

Provision for Environmental Remediation  –The Company records environmental liabilities when it is probable that a liability has been incurred and the amount or range of the liability is reasonably estimable.  During 2002, the Company recorded a charge of $11,150,000 representing its estimate of the cost (including legal fees) to implement the most likely remediation alternative with respect to approximately 30 acres of undeveloped land owned by a subsidiary of Otay Land Company.  The estimated liability was neither discounted nor reduced for claims for recovery from previous owners and users of the land who may be liable, and may increase or decrease based upon the actual extent and nature of the remediation required, the actual cost of the remediation, the expenses of the regulatory process, the costs of post-remediation monitoring requirements, inflation and other items.  

The Company has periodically examined, and when appropriate, adjusted its liability for environmental remediation to reflect its current best estimate.  A change to the current estimate could result from, among other things, that the cost to implement the remediation is different than the Company’s current estimate, that the cost of future on-going monitoring efforts is differentthan the Company’s current estimate, and/or requirements imposed by regulatory authorities that the Company did not anticipate but is nevertheless required to implement.  During 2004, the Company increased its estimate of remediation costs by approximately $1,300,000, primarily due to increases in site investigation and remediation costs, and during 2003 by approximately $250,000, primarily for consulting costs.  During 2012, the Company’s revised its estimate of future remediation costs, including on-going monitoring expenses, which resulted in a reduction in the previously accrued estimate of $1,500,000.  Such amount was reflected on the consolidated statement of operations as a reduction to expenses.

During the fourth quarter of 2012, upon receipt of required approvals, the Company commenced remediation activities, which were completed in February 2013.  The Company received final approval from the County of San Diego Department of Environmental Health in June 2013; as a result, the Company reduced its liability for environmental remediation by $650,000.

Provision For Impairment Losses On Real Estate

Provision for Impairment Losses on Real Estate – The Company’s real estate is carried at cost.  Whenever events or changes in circumstances suggest that the carrying amount may not be recoverable, management assesses the recoverability of the carrying amount of its real estate in accordance with GAAPand, if impaired, reduces the carrying amount to its estimated fair value.  The process involved in evaluating assets for impairment and determining fair value requires estimates as to future events and market conditions.  This estimation process may assume that the Company has the ability to complete development and dispose of its real estate properties in the ordinary course of business based on management’s present plans and intentions.  If management determines that the carrying value of a specific real estate investment is impaired, a write-down is recorded as a charge to current period operations.  The evaluation process is based on estimates and assumptions and the ultimate outcome may be different.

The Company did not record any provisions for impairment losses during the years ended December 31, 2013, 2012 and 2011.

Real Estate

Real Estate – Real estate includes all expenditures incurred in connection with the acquisition, development and construction of the property, including interest and property taxes.  At acquisition, land costs are allocated to individual parcels or lots based on relative fair values.  Subsequent to acquisition, substantially all development costs are specifically identifiable to individual parcels or lots, or are considered allocated costs that are allocated principally based on acreage (principally property taxes, legal fees and consulting fees).  Capitalized land costs are charged to cost of sales at the time that revenue is recognized.

Cash And Cash Equivalents

Cash and Cash Equivalents – Cash equivalents are money market accounts and short‑term, highly liquid investments that have maturities of less than three months at the time of acquisition. 

Investments

Investments –  Securities with maturities equal to or greater than three months at the time of acquisition are classified as investments availableforsale, and are carried at fair value with unrealized gains and losses reflected as a separate component of shareholders’ equity, net of taxes.  The cost of securities sold is based on specific identification.

Recognition Of Fee Income

Recognition of Fee Income – The Company may be contractually entitled to receive co-op marketing and advertising fees that are due when builders sell homes.  These fees are generally based upon a fixed percentage of the homes’ selling price and are recorded as revenue when the home is sold. 

Revenue And Profit Sharing Arrangements

Revenue and Profit Sharing Arrangements–  Certain of the Company’s lot purchase agreements with homebuilders include provisions that entitle the Company to a share of the revenues or profits realized by the homebuilders upon their sale of the homes, after certain thresholds are achieved.  The actual amount which could be received by the Company is generally based on a formula and other specified criteria contained in the lot purchase agreements, and are generally not payable and cannot be determined with reasonable certainty until the builder has completed the sale of a substantial portion of the homes covered by the lot purchase agreement.  The Company’s policy is to accrue revenue earned pursuant to these agreements when amounts are fully earned and payable pursuant to the lot purchase agreements, which is classified as sales of real estate.  Any amounts received from homebuilders prior to then are deferred.

The Company has not recognized any income from revenue or profit sharing arrangements during the last three years.

Option Deposits

Option Deposits – Option payments received from prospective buyers are recognized as liabilities until the title of the real estate is transferred or the option is forfeited, or in the case of refundable deposits, the prospective buyer decides not to purchase the real estate and the deposit is returned.

Capitalization Of Interest And Real Estate Taxes

Capitalization of Interest and Real Estate Taxes – If applicable, interest and real estate taxes attributable to land and property construction are capitalized and added to the cost of those properties while the properties are being actively developed.

Farming Revenues And Expenses

Farming Revenues and Expenses – Income from farming related activities at the Rampage property are recognized when grapes are sold, and expenses from farming related activities are recognized when incurred.

Share-Based Compensation

Share-Based Compensation – The cost of all share-based payments to employees, including grants of employee stock options and warrants, are recognized in the financial statements based on their fair values.  The cost is recognized as an expense over the vesting period of the award.  The fair value of each award is estimated at the date of grant using the Black-Scholes option pricing model.

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Commitments And Contingencies

12 Months Ended

Dec. 31, 2013

Commitments And Contingencies [Abstract]

Commitments And Contingencies

11.COMMITMENTS AND CONTINGENCIES

Prior to its acquisition by the Company, a subsidiary of CDS entered into a non-cancelable operating lease for its office space, a portion of which was sublet to the Company and a portion of which was sublet to Leucadia.  Effective October 2002, as a result of the acquisition of CDS, sublease payments from Leucadia reflected in other incomewere $12,000 in each of 2013, 2012 and 2011.  Rental expense (net of sublease income) was $350,000 in 2013 and 2012, and $300,000 in 2011; the lease expires in October 2018.  Future minimum annual rentals (exclusive of real estate, maintenance and other charges) are approximately $250,000 per year for the remainder of the lease term.

The Company is required to obtain infrastructure improvement bonds primarily for the benefit of the City of San Marcos (the “City”) prior to the beginning of lot construction work and warranty bonds upon completion of such improvements in the San Elijo Hills project.  These bonds provide funds primarily to the City in the event the Company is unable or unwilling to complete certain infrastructure improvements in the San Elijo Hills project.  Leucadia is contractually obligated to obtain these bonds on behalf of CDS and its subsidiaries pursuant to the terms of agreements entered into when CDS was acquired by the Company.  CDS is responsible for paying all third party fees related to obtaining the bonds.  Should the City or others draw on the bonds for any reason, one of CDS’s subsidiaries would be obligated to reimburse Leucadia for the amount drawn.  As of December 31, 2013, the amount of outstanding bonds was approximately $2,600,000, none of which has been drawn upon.

The Company is also required to obtain infrastructure improvement bonds for the benefit of the City of Virginia Beach in connection with the Ashville Park project.  As of December 31, 2013, the amount of outstanding bonds was approximately $1,800,000, none of which has been drawn upon.

The Company has purchaseda  $10,000,000 excess insurance policy that provides coverage for general liability claims relating to homes sold at the San Elijo Hills project through August 1, 2011.  In 2012, the Company purchased a new $1,000,000 primary insurance policy and $10,000,000 excess insurance policy that provides coverage for general liability claims relating to unsold lots as of August 1, 2012.   In 2013, the Company purchased a new $1,000,000 primary insurance policy that provides coverage for general liability claims relating to unsold lots as of August 1, 2013.  In March 2012, the Company purchased a $1,000,000 primary policy and $10,000,000 excess policy that provide coverage for general liability claims related to homes sold at the Ashville Park project that expires in March 2014.  No claims have ever been made under these policies.  In addition, the Company is indemnified by its homebuilders and is named an additional insured by any contractor who works on the property.

The Company is subject to litigation which arises in the course of its business.  Except as otherwise disclosed herein, based on discussions with counsel, management is of the opinion that such litigation is not likely to have any significant adverse effect on the consolidated financial position of the Company, its consolidated results of operations or liquidity.

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Sales Of Real Estate

12 Months Ended

Dec. 31, 2013

Sales Of Real Estate [Abstract]

Sales Of Real Estate

7.            SALES OF REAL ESTATE

Revenues from sales of real estate for each of the three years in the period ended December 31, 2013 is comprised of the following (in thousands):

	2013		2012		2011
Developed lots at San Elijo Hills	$	37,370	$	20,649	$	26,697
Developed lots at Ashville Park		12,038		7,544		-
Residential condominium units at San Elijo Hills		689		-		825
Total	$	50,097	$	28,193	$	27,522

At the time the Company closes on sales of real estate,  a portion of the revenue is initially deferred if the Company is required to make significant improvements to the property.  For the years ended December 31, 2013 and 2012, the activity in the deferred revenue account is as follows (in thousands):

	2013		2012
Deferred revenue balance at January 1,	$	886	$	-
Revenue deferred on the date of sale		2,660		886
Deferred revenue recognized in operations		(807)		-
Deferred revenue balance at December 31,	$	2,739	$	886

As of December 31, 2013, the Company estimates that it will spend approximately $1,500,000 to complete the required improvements, including costs related to common areas.  The Company estimates these improvements will be substantially complete by the end of 2014.

As of December 31, 2013, the Company had entered into agreements to sell 15 lots at the Ashville Park project to homebuilders for aggregate cash proceeds of $2,500,000, for which it received non-refundable option deposits of $100,000.  Sales of 5 lots closed during the first quarter of 2014 for aggregate cash consideration of $800,000.

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Noncontrolling Interest

12 Months Ended

Dec. 31, 2013

Noncontrolling Interest [Abstract]

Noncontrolling Interest

5.NONCONTROLLING INTEREST

Through its ownership of CDS, the Company owns 85% of the common stock of San Elijo Ranch, Inc. (“SERI”).  Pursuant to a stockholders’ agreement with the holders of the noncontrolling interests in SERI, the Company loans funds to SERI and charges a 12% annual rate.  Once this loan is fully repaid, the noncontrolling shareholders of SERI are entitled to 15% of future cash flows distributed to shareholders.  As of December 31, 2013, approximately $10,100,000 has been recognized for the SERI noncontrolling interests.  Amounts recorded for the noncontrolling interests have been reduced for income taxes calculated pursuant to tax sharing agreements.

In December 2012, the Company purchased an indirect 20% noncontrolling interest in SERI for $5,000,000, increasing its effective interest in SERI from 68% to 85%.  The amount paid was $4,450,000 less than the amount recorded for the noncontrolling interest; such amount was credited to additional paid in capital.  As part of the purchase, pending litigation commenced by the holder of the purchased noncontrolling interest against the Company was settled without any payment.    

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Stock Incentive Plans

12 Months Ended

Dec. 31, 2013

Stock Incentive Plans [Abstract]

Stock Incentive Plans

6.            STOCK INCENTIVE PLANS

Under the Company’s Amended and Restated 1999 Stock Incentive Plan (the “Plan”), the Company may grant options, stock appreciation rights and restricted stock to non-employee directors, certain non-employees and employees up to a maximum grant of 30,000 shares to any individual in a given taxable year.  Pursuant to the Plan, each director of the Company is automatically granted options to purchase 1,000 shares on the date on which the annual meeting of stockholders is held.  In August 2004, following shareholder approval, the Plan was amended to, among other things, increase the number of shares of common stock available for issuance by 300,000 shares.  The Plan provides for the issuance of options and rights at not less than 100% of the fair market value of the underlying stock at the date of grant.  Options granted to employees and certain non-employees generally become exercisable in five equal instalments starting one year from the date of grant and must be exercised within six years from the date of grant.  Options granted to directors generally become exercisable in four equal instalments starting one year from the date of grant and must be exercised within five years from the date of grant.  No stock appreciation rights have been granted.  As of December 31, 2013, 405,400 shares were available for grant under the Plan. 

A summary of activity with respect to the Plan for 2013, 2012 and 2011 is as follows:

				Weighted-
	Common	Weighted-		Average
	Shares	Average		Remaining	Aggregate
	Subject to	Exercise		Contractual	Intrinsic
	Option	Price		Term	Value
Balance at January 1, 2011	104,500	$	30.02
Granted	6,000	$	21.50
Cancelled	(6,000)	$	65.50
Balance at December 31, 2011	104,500	$	27.50
Granted	6,000	$	22.35
Cancelled	(14,000)	$	41.18
Balance at December 31, 2012	96,500	$	25.19
Granted	6,000	$	32.30
Cancelled	(8,000)	$	36.44
Balance at December 31, 2013	94,500	$	24.69	2.4 years	$	1,125,300
Exercisable at December 31, 2013	53,700	$	24.17	2.1 years	$	667,395

The Company recorded compensation cost related to stock incentive plans of $190,000,  $180,000 and $220,000 for the years ended December 31, 2013, 2012 and 2011, respectively; such costs reduced net income by $110,000,  $110,000 and $130,000 for the years ended December 31, 2013, 2012and 2011, respectively.  As of December 31, 2013, total unrecognized compensation cost related to nonvested share-based compensation plans was $300,000; this cost is expected to be recognized over a weighted-average period of 1.0 year.

The following summary presents the weighted-average assumptions used for the Black-Scholes option pricing model to determine the fair value for each of the stock option grants made during each of the three years in the period ended December 31, 2013:

	2013		2012		2011
Risk free rate		1.20%		0.56%		1.13%
Expected volatility		30.85%		46.90%		46.67%
Expected dividend yield		0.0%		0.0%		0.0%
Expected life		4.3 years		4.3 years		4.3 years
Fair value per grant	$	8.70	$	8.49	$	8.30

The expected life assumptions were based on historical behavior for the awards identified.  The expected volatility was based on the historical behavior of the Company’s stock price.

In July 2004, the Board of Directors approved the repurchase of up to 500,000 shares of the Company’s common stock.  In 2008, the Company purchased 394,931 shares of the Company’s common stock for approximately $5,900,000 in a private transaction with an unrelated party.  During 2009, the Company purchased 478 shares of the Company’s common stock in an open market transaction in accordance with the Company’s repurchase plan.  After considering these transactions, the Company can repurchase up to 104,591 common shares without board approval.  Repurchased shares would be available for, among other things, use in connection with the Company’s stock option plan.  The shares may be purchased from time to time, subject to prevailing market conditions, in the open market, in privately negotiated transactions or otherwise.  Any such purchases may be commenced or suspended at any time without prior notice.

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Other Results Of Operations

12 Months Ended

Dec. 31, 2013

Other Results Of Operations [Abstract]

Other Results Of Operations

8.            OTHER RESULTS OF OPERATIONS

Interest and other income for each of the three years in the period ended December 31, 2013 consists of the following (in thousands): 

	2013		2012		2011
Interest income	$	55	$	79	$	196
Gain on settlement of a lawsuit		764		-		-
Gain on settlement of a contract dispute		-		15		162
Other		70		13		24
Total	$	889	$	107	$	382

Advertising costs included in general and administrative expenses were $650,000,  $650,000 and $550,000 for 2013, 2012 and 2011, respectively.  Expenses related to rental income at the San Elijo Hills project were $300,000 in each of 2013, 2012 and 2011.

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Investments (Narrative) (Details) (USD $)	12 Months Ended
	Dec. 31, 2013	Dec. 31, 2012	Dec. 31, 2011
Investments [Abstract]
Proceeds from sale of avaliable for sale investments	$ 0	$ 2,600,000	$ 0

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Income Taxes (Changes In Unrecognized Tax Benefits) (Details) (USD $) In Thousands, unless otherwise specified	12 Months Ended
	Dec. 31, 2013	Dec. 31, 2012	Dec. 31, 2011
Unrecognized Tax Benefits Components [Line Items]
Unrecognized Tax Benefits, Beginning Balance			$ 150
Additional interest expense recognized			10
Reductions as a result of the lapse of the statute of limitations			(160)
Unrecognized Tax Benefits, Ending Balance
Unrecognized Tax Benefits [Member]
Unrecognized Tax Benefits Components [Line Items]
Unrecognized Tax Benefits, Beginning Balance			90
Additional interest expense recognized
Reductions as a result of the lapse of the statute of limitations			(90)
Unrecognized Tax Benefits, Ending Balance
Interest [Member]
Unrecognized Tax Benefits Components [Line Items]
Unrecognized Tax Benefits, Beginning Balance			60
Additional interest expense recognized			10
Reductions as a result of the lapse of the statute of limitations			(70)
Unrecognized Tax Benefits, Ending Balance

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Fair Value

12 Months Ended

Dec. 31, 2013

Fair Value [Abstract]

Fair Value

13.FAIR VALUE

The Company’s material financial instruments include cash and cash equivalents and investments classified as available for sale.  For cash and cash equivalents and investments available  forsale, the carrying amounts of such financial instruments approximate their fair values. 

No assets or liabilities were measured at fair value on a nonrecurring basis as of December 31, 2013 and 2012.

The Company does not invest in any derivatives or engage in any hedging activities.

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Stock Incentive Plans (Tables)

12 Months Ended

Dec. 31, 2013

Stock Incentive Plans [Abstract]

Schedule Of Option Activity

				Weighted-
	Common	Weighted-		Average
	Shares	Average		Remaining	Aggregate
	Subject to	Exercise		Contractual	Intrinsic
	Option	Price		Term	Value
Balance at January 1, 2011	104,500	$	30.02
Granted	6,000	$	21.50
Cancelled	(6,000)	$	65.50
Balance at December 31, 2011	104,500	$	27.50
Granted	6,000	$	22.35
Cancelled	(14,000)	$	41.18
Balance at December 31, 2012	96,500	$	25.19
Granted	6,000	$	32.30
Cancelled	(8,000)	$	36.44
Balance at December 31, 2013	94,500	$	24.69	2.4 years	$	1,125,300
Exercisable at December 31, 2013	53,700	$	24.17	2.1 years	$	667,395

Summary Of Weighted-Average Assumptions

	2013		2012		2011
Risk free rate		1.20%		0.56%		1.13%
Expected volatility		30.85%		46.90%		46.67%
Expected dividend yield		0.0%		0.0%		0.0%
Expected life		4.3 years		4.3 years		4.3 years
Fair value per grant	$	8.70	$	8.49	$	8.30

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Income Taxes (Reconciliation Of Effective Tax Provision) (Details) (USD $) In Thousands, unless otherwise specified	12 Months Ended
	Dec. 31, 2013	Dec. 31, 2012	Dec. 31, 2011
Income Taxes [Abstract]
Expected federal income tax provision	$ (6,721)	$ (4,029)	$ (3,663)
State income taxes, net of federal income tax benefit	(1,009)	(670)	(621)
Decrease in deferred tax valuation allowance	1,360	742
Recognition of previously unrecognized tax benefits			160
Permanent differences	(77)	(61)	(73)
Other	(51)	(62)	(171)
Income tax provision	$ (6,498)	$ (4,080)	$ (4,368)

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Stock Incentive Plans (Summary Of Weighted-Average Assumptions) (Details) (USD $)	12 Months Ended
	Dec. 31, 2013	Dec. 31, 2012	Dec. 31, 2011
Stock Incentive Plans [Abstract]
Risk free interest rate	1.20%	0.56%	1.13%
Expected volatility	30.85%	46.90%	46.67%
Expected dividend yield	0.00%	0.00%	0.00%
Expected life	4 years 3 months 18 days	4 years 3 months 18 days	4 years 3 months 18 days
Fair value per grant	$ 8.70	$ 8.49	$ 8.30

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Consolidated Statements Of Comprehensive Income (Loss) (USD $) In Thousands, unless otherwise specified	12 Months Ended
	Dec. 31, 2013	Dec. 31, 2012	Dec. 31, 2011
Consolidated Statements Of Comprehensive Income (Loss) [Abstract]
Net income	$ 12,704	$ 7,432	$ 6,097
Other comprehensive income (loss):
Net unrealized holding gains (losses) on investments arising during the period, net of taxes of $(1), $2 and $(2)	(2)	2	(2)
Net change in unrealized holding gains (losses) on investments, net of taxes of $(1), $2 and $(2)	(2)	2	(2)
Other comprehensive income (loss), net of income taxes	(2)	2	(2)
Comprehensive income	12,702	7,434	6,095
Comprehensive (income) loss attributable to the noncontrolling interest	(1,436)	(1,410)	(1,606)
Comprehensive income attributable to HomeFed Corporation common shareholders	$ 11,266	$ 6,024	$ 4,489

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Acquisition Of CDS

12 Months Ended

Dec. 31, 2013

Acquisition Of CDS [Abstract]

Acquisition Of CDS

2.ACQUISITION OF CDS

In October 2002, the Company purchased from Leucadia National Corporation (together with its subsidiaries, “Leucadia”) all of the issued and outstanding shares of capital stock of CDS which, through its majority-owned indirect subsidiary, San Elijo Hills Development Company, LLC (“San Elijo”), is the owner of the San Elijo Hills project, a master-planned community located in the City of San Marcos, in San Diego County, California.  The Company has been the development manager for the San Elijo Hills project since August 1998.    The purchase price of $25,000,000 consisted of $1,000,000 in cash and 2,474,226 shares of the Company’s common stock, which represented approximately 30% of the Company’s outstanding common shares.  Prior to the acquisition, Leucadia had also committed to obtain project improvement bonds for the San Elijo Hills project which is required prior to the commencement of any project development (see Note 11). 

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Sales Of Real Estate (Tables)

12 Months Ended

Dec. 31, 2013

Sales Of Real Estate [Abstract]

Schedule Of Real Estate Sales

	2013		2012		2011
Developed lots at San Elijo Hills	$	37,370	$	20,649	$	26,697
Developed lots at Ashville Park		12,038		7,544		-
Residential condominium units at San Elijo Hills		689		-		825
Total	$	50,097	$	28,193	$	27,522

Schedule Of Changes In Deferred Revenue

	2013		2012
Deferred revenue balance at January 1,	$	886	$	-
Revenue deferred on the date of sale		2,660		886
Deferred revenue recognized in operations		(807)		-
Deferred revenue balance at December 31,	$	2,739	$	886

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Noncontrolling Interest (Details) (USD $)			1 Months Ended	12 Months Ended
	Dec. 31, 2013	Dec. 31, 2012	Dec. 31, 2012 CDS Devco, Inc. [Member]	Dec. 31, 2013 San Elijo Ranch, Inc. [Member]
Noncontrolling Interest [Line Items]
Ownership percentage of San Elijo Ranch, Inc.				85.00%
Previous ownership percentage of San Elijo Ranch, Inc.			68.00%
Rate of return on advances to subsidiary				12.00%
Noncontrolling interest	$ 10,095,000	$ 8,659,000		$ 10,100,000
Percentage of future cash flows entitled to noncontrolling interests			20.00%	15.00%
Acquisition of noncontrolling interest			5,000,000
Difference between amount paid and recorded for noncontrolling interest			$ 4,450,000

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Administrative Services Agreement

12 Months Ended

Dec. 31, 2013

Administrative Services Agreement [Abstract]

Administrative Services Agreement

12.         ADMINISTRATIVE SERVICES AGREEMENT

Pursuant to administrative services agreements, Leucadia provides administrative and accounting services to the Company, including providing the services of the Company’s Secretary.  Administrative fees paid to Leucadiawere $180,000 in each of 2013, 2012 and 2011.  The administrative services agreement automatically renews for successive annual periods unless terminated in accordance with its terms.  Leucadia has the right to terminate theagreement by giving the Company not less than one year’s prior notice, in which event the then monthly fee will remain in effect until the end of the notice period.  The Companyhas the right to terminate the agreement, without restriction or penalty, upon 30 days prior written notice to Leucadia.  The agreement has not been terminated by either party.