Kaanapali Land LLC – ‘10-12G’ on 5/1/03

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Registration of Securities (General Form)   —   Form 10
Filing Table of Contents

Document/Exhibit                   Description                      Pages   Size 

 1: 10-12G      Registration of Securities (General Form)             66    313K 
 2: EX-3.1      Articles of Incorporation/Organization or By-Laws     30    157K 
 3: EX-10.11    Material Contract                                     10     37K 

10-12G   —   Registration of Securities (General Form)
Document Table of Contents

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

FORM 10         

GENERAL FORM FOR REGISTRATION OF SECURITIES         
Pursuant to Section 12(b) or (g) of The Securities Exchange Act of 1934         

KAANAPALI LAND, LLC         
------------------------------------------------------          
(Exact name of registrant as specified in its charter)          

Delaware                             01-0731997           
-------------------------               -------------------           
(State or other jurisdic-               (I.R.S. Employer              
tion of incorporation or                Identification No.)           
organization)                                                         

900 North Michigan Avenue                                             
Chicago, Illinois                               60611                 
----------------------------------------         ----------                 
(Address of principal executive offices)         (Zip Code)                 

Registrant's telephone number, including area code:  (312) 915-1987             

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

                   Name of each exchange
Title of each class               on which each class                 
to be so registered               is to be registered                 
-------------------               ---------------------               

N/A                                 N/A                   
-------------------               ---------------------               

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

Class A Shares          
------------------------------------------------------------          
(Title of class)          

------------------------------------------------------------          
(Title of class)          

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TABLE OF CONTENTS         

                                      Page
                                      ----

Item 1.      Business . . . . . . . . . . . . . . . . . .   1                   

Item 2.      Financial Information. . . . . . . . . . . .  11                   

Item 2A.     Management's Discussion and                                        
Analysis of Financial Condition and                   
Results of Operations. . . . . . . . . . . .  12      

Item 2B.     Quantitative and Qualitative Disclosures                           
About Market Risk. . . . . . . . . . . . . .  16      

Item 3.      Properties . . . . . . . . . . . . . . . . .  16                   

Item 4.      Security Ownership of Certain                                      
Beneficial Owners and Management . . . . . .  16      

Item 5.      Managers and Executive Officers of the                             
Registrant . . . . . . . . . . . . . . . . .  17      

Item 6.      Executive Compensation . . . . . . . . . . .  19                   

Item 7.      Certain Relationships and                                          
Related Transactions . . . . . . . . . . . .  20      

Item 8.      Legal Proceedings. . . . . . . . . . . . . .  20                   

Item 9.      Market Price of and Dividends on the                               
Registrant's Common Equity and Related                
Stockholder Matters. . . . . . . . . . . . .  27      

Item 10.     Recent Sales of Unregistered Securities. . .  27                   

Item 11.     Description of Registrant's Securities                             
to be Registered . . . . . . . . . . . . . .  28      

Item 12.     Indemnification of Directors and Officer . .  30                   

Item 13.     Financial Statements and Supplementary Data.  31                   

Item 14.     Changes in and Disagreements with                                  
Accountants on Accounting and                         
Financial Disclosure . . . . . . . . . . . .  61      

Item 15.     Financial Statement and Exhibits . . . . . .  61                   

i         

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ITEM 1.  BUSINESS                                                               

Kaanapali Land, LLC ("Kaanapali Land"), a Delaware limited liability  
company is the reorganized entity resulting from the Joint Plan of              
Reorganization of Amfac Hawaii, LLC ("AHI"), Certain of Its Subsidiaries        
(together with AHI, the "AHI Debtors") and FHT Corporation (FHTC and,           
together with the AHI Debtors, the "Debtors") under Chapter 11 of the           
Bankruptcy Code, dated June 11, 2002 (as amended, the "Plan").  As              
indicated in the Plan, Kaanapali Land has elected to be taxable as a            
corporation.  The Debtors had filed their petitions for reorganization          
under Chapter 11 on February 27, 2002 (the "Petition Date") in the United       
States Bankruptcy Court for the Northern District of Illinois, Eastern          
Division (the "Bankruptcy Court"), which petitions were consolidated into a     
single joint proceeding by the Bankruptcy Court (the "Reorganization            
Case").                                                                         

The principal goal of the Plan was to address the Debtors' debt       
burdens so that the Debtors could emerge from Chapter 11 with a viable          
capital structure and with the resources necessary to operate their land        
development business.  The Plan achieved this goal by converting certain        
indebtedness and other liabilities of the Debtors into new equity of            
Kaanapali Land (to the extent such creditors did not elect an available         
cash distribution option).  Another goal of the Plan was to secure              
additional liquidity for the Debtors to help fund future operations.  The       
Plan achieved this goal through the Merger of FHTC with Northbrook              
Corporation ("Northbrook"), which made the assets and liquidity of              
Northbrook available to the Debtors to help fund their land development         
business.  FHTC was the surviving entity in such merger, and shortly            
thereafter was in turn merged into Kaanapali Land pursuant to the Plan.         

The Plan was confirmed by the Bankruptcy Court by orders dated        
July 29, 2002 and October 30, 2002 (collectively, the "Order") and became       
effective November 13, 2002 (the "Plan Effective Date").  Kaanapali Land        
continues to work toward completion of the various requirements of the Plan     
and to implement the restructuring transactions that are contemplated to be     
effected under the Plan, including, among other things, the resolution of       
all outstanding claims and distributions on all claims that are allowed         
under the Plan.  References in this Form 10 to Kaanapali Land or the            
Company for dates on or after the Plan Effective Date are to the entity         
surviving the Reorganization Case and for dates before the Plan Effective       
Date are to predecessor entities, unless otherwise specified.                   

Kaanapali Land's subsidiaries include the Debtors as reorganized under
the Plan, certain subsidiaries of AHI that were not debtors (the "Non-          
Debtor AHI Subsidiaries") and other former subsidiaries of Northbrook           
(collectively with Kaanapali Land, all the Reorganized Debtors, the Non-        
Debtor AHI Subsidiaries and such other subsidiaries are referred to herein      
as the "Company").  Kaanapali Land will pursue its businesses utilizing the     
assets of the AHI Debtors and the Non-Debtor AHI Subsidiaries and the           
assets formerly owned by Northbrook and its other subsidiaries.                 

The Company operates three primary business segments:  (i) Land       
Development, Management and Sales, (ii) Agriculture and (iii) Golf.  As         
discussed below, of the foregoing, the Company's primary business is Land       
Development, Management and Sales.                                              

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SUMMARY OF PLAN                                                       

Material aspects of the history and business of the Company, the Plan,
the procedures for consummating the Plan and the risks attendant thereto        
were set forth in a Second Amended Disclosure Statement With Respect to         
Joint Plan of Reorganization of Amfac Hawaii, LLC, Certain of Its               
Subsidiaries and FHT Corporation Under Chapter 11 of the Bankruptcy Code,       
dated June 11, 2002 (the "Disclosure Statement").  The Disclosure Statement     
and the Plan are each filed as Exhibits to this Form 10.                        

All claims against the Debtors were deemed discharged as of the Plan  
Effective Date, provided that creditors with allowed claims became entitled     
to receive distributions under the Plan as of that date and provided that       
the Plan does not impair any claims of taxing authorities.  The time for        
filing proofs of claim relating to all classes of claims has expired,           
including the period for those whose executory contracts were rejected by       
the Debtors.  Therefore, all claims that may be asserted by the creditors       
against the Debtors relative to amounts due on pre-petition obligations as      
of the Plan Effective Date, with the exception of a potential claim that        
may be filed by the Employees' Retirement System of the State of Hawaii         
("ERS") and a potential claim of the Internal Revenue Service ("IRS")           
described below, are known.                                                     

Under the distribution provisions of the Plan, consummation of the    
Plan entitled creditors with allowed claims in the impaired classes to          
receive, as of the Plan Effective Date, distributions from Kaanapali Land.      

Under the Plan, all claimants that were entitled to receive shares    
were entitled to receive shares of Kaanapali Land following the Plan            
Effective Date.  The Limited Liability Company Agreement of Kaanapali Land      
(the "LLC Agreement") provides for two classes of membership interests,         
"Class A Shares" and "Class B Shares", which have substantially identical       
rights and economic value under the LLC Agreement; except that holders of       
Class A Shares are represented by a "Class A Representative" who must           
approve certain transactions proposed by Kaanapali Land before they can be      
undertaken.  The Class A Representative is further entitled to receive          
certain reports from the Company and meet with Company officials on a           
periodic basis.  Reference is made to the LLC Agreement for such                
provisions. Class B Shares are held by Pacific Trail Holdings, LLC              
("Pacific Trail") and various entities and individuals that are affiliated      
with Pacific Trail.  Class A Shares were issued under the Plan to claimants     
who had no such affiliation.                                                    

As of April 23, 2003, Kaanapali Land has distributed  approximately   
$2,477,000 in cash and approximately 139,776 Class A Shares on account of       
the claims that have been made, and expects that ultimately an additional       
approximately $84,000 in cash and 18,892 Class A Shares will be distributed     
on account of such remaining claims, assuming that all holders of such          
claims comply with the requirements for distribution.                           

Kaanapali Land has issued all Class B Shares required to be issued    
under the Plan to Pacific Trail and those entities and individuals who are      
affiliated with Pacific Trail that are entitled to Class B Shares.  As a        
consequence, Kaanapali Land has approximately 1,631,513 Class B Shares          
outstanding.                                                                    

A number of claims, primarily relating to matters that were in        
litigation on the Petition Date, or personal injury or employee matters         
where litigation was threatened, have not been resolved and are likely to       
be disputed by the Company if they cannot be resolved in the near future.       
The Company would likely in those cases petition the Bankruptcy Court to        
dismiss such claims.  Even if the Bankruptcy Court ruled that all such          
claims were allowed claims entitled to distribution, which the Company          
believes is highly unlikely, the maximum cash exposure to the Company           
thereon is not material to the Company and the maximum exposure for the         
issuance of additional Class A Shares is approximately 1,281 shares.            
However, this does not take into account a potential claim by ERS that          
could be asserted against the Debtors as described in more detail in Item 8     

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below.  The dispute with the ERS is subject to a settlement agreement with      
the Company and certain affiliates that has been approved by the Bankruptcy     
Court and is expected to be approved by the Circuit Court of Hawaii in May      
2003.  Such settlement is expected to close in the third quarter of 2003,       
whereupon any further potential claim against the Debtors by ERS would be       
extinguished.  However, there can be no assurance that the state court will     
approve the settlement or that closing of the transactions thereunder will      
occur.  As a result of such settlement, it is not expected that any claim       
will be filed by ERS, although there can at this time be no assurance that      
one will not be so filed, as the parties have agreed to an extension of the     
time required for ERS to file such a claim until 5 business days after          
notice by the Debtors.  The Debtors do not intend to issue such a notice so     
long as the settlement appears likely to close.  However, in the event that     
such a claim is ultimately filed, the Company intends to vigorously defend      
against it and reassert counterclaims that it raised in the underlying          
litigation.                                                                     

In addition, the IRS filed a claim in the bankruptcy proceedings in   
the aggregate amount of approximately $20,600,000 for taxes, interest and       
penalties related to the years 1998-2000.  The Company has contacted the        
IRS to request that it withdraw its claim due to the fact that the Plan         
leaves the IRS unimpaired relative to any taxes that may be due.  Although      
the Company is optimistic that the IRS will withdraw such claim, it has not     
yet done so and there can be no assurance that it will.  In any event, the      
IRS audit of the period covered by the claim is in its preliminary stages,      
and no deficiencies in taxes have been proposed by the auditors.  The           
Company intends to dispute vigorously any IRS claim for additional taxes,       
whether asserted by means of the claim filed in the bankruptcy proceeding,      
arising in the pending audit, or in future audits.  However, there can be       
no assurance that the Company will be successful in such defense and,           
although the Company has reserved for potential tax liabilities on its          
financial statements, to the extent that the Company is unsuccessful in         
defending against any such claims, either in the bankruptcy court or in         
connection with the IRS audits, the amount for which the Company could be       
liable could have a material adverse effect on the Company, given its           
relatively modest cash position.                                                

The Company has completed certain restructuring transactions and      
intends to complete others, as permitted by the Plan, for the purpose of        
simplifying the corporate structure and administrative organization of the      
Company.  The general impact of such transactions will be to reduce the         
number of subsidiaries of Kaanapali Land and to move assets into those          
entities that make the most sense for administrative reasons or to              
facilitate future transactions with third parties.  It is expected that         
further restructuring transactions will be undertaken over time as entities     
wind up their affairs or are otherwise no longer necessary to the ongoing       
business of the Company.                                                        

LAND DEVELOPMENT, MANAGEMENT AND SALES                                

KAANAPALI 2020 DEVELOPMENT PLANS.  "Kaanapali 2020", Kaanapali Land's 
comprehensive plan for approximately 4,000 acres of land in the                 
Kaanapali/Honokawai area on the west side of Maui, Hawaii is its principal      
entitlement focus.  Currently, Kaanapali Land is preparing market and           
feasibility studies in anticipation of applying for the necessary               
entitlements to carry out the Kaanapali 2020 development plan.  While some      
of these lands have some form of entitlements, it is anticipated that all       
of the land to be developed will require state district boundary amendments     
and county general plan amendments, as well as rezoning approvals.              
Approximately 1,500 acres of this land is located toward the top of             
mountain ridges and in gulches and is classified as conservation land,          
which precludes development.  However, this land, and other land that will      
be designated as open space, is an important component of the overall           
project and is part of obtaining the entitlements for the land as a whole.      

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The process of determining market and project feasibility will be     
ongoing with pursuit of entitlements.  If Kaanapali Land obtains the            
necessary entitlements, it intends, if market and project feasibility           
studies justify it, to develop some or all of the project (either alone or      
through one or more joint ventures with strategic partners) and/or sell         
some or all of the entitled parcels.  Kaanapali Land will need to apply for     
subdivision of the land in order to develop or sell the parcels.  As a          
condition to subdivision of the land, the county will generally require the     
completion or bonding of certain infrastructure, including roads, water and     
sewer facilities, each of which will require their own building and grading     
permits.                                                                        

For the last few years, Kaanapali Land has been working with the West 
Maui community to involve the community in plans for the use and                
development of the Kaanapali 2020 lands.  Committees, comprised of private      
sector individuals from the community as well as public employee                
participants, have been working with Kaanapali Land to create a vision for      
the future of the Kaanapali lands.  This development strategy has been used     
in several communities, including the successful Weston, Florida planned        
community that has recently been substantially completed by an affiliate of     
Kaanapali Land.  Management is optimistic that a development plan can be        
implemented with the support of the community that meets Kaanapali Land's       
long-term financial objectives.                                                 

The Kaanapali 2020 development plan is currently at a predevelopment  
stage.  Once the initial market and financial feasibility studies are           
completed, if they justify moving forward, the development plan will be         
finalized and the entitlement process will commence.  Approximately 990         
acres of land have been identified for development with up to approximately     
3,000 residential units along with commercial, retail and recreational          
assets.  The balance of the land is expected to remain open space or            
agricultural.  Over the next few years, the Company expects to seek the         
necessary approvals to pursue its business strategy.                            

PROJECT PLANNING AND DEVELOPMENT.  The Company's real estate          
development approach, for land which it holds for development rather than       
investment, is designed to enhance the value of its properties in phases.       
In most instances, the development process begins with the preparation of       
market and feasibility studies that consider potential uses for the             
property, as well as costs associated with the development of those uses.       
The studies consider factors such as location, physical characteristics,        
demographic patterns, anticipated absorption rates, transportation,             
development costs and regulatory and environmental requirements.                

The Company expects to prepare a land plan that is consistent with the
findings of the studies and then to commence the process of applying for        
the entitlements necessary to permit the development of the property in         
accordance with the land plan.  The length and difficulty of obtaining the      
requisite entitlements, as well as the cost of complying with any               
conditions attached to the entitlements, are significant factors in             
determining the viability of the Company's development projects.                
Applications for entitlements include applications for state land use           
reclassification, county community plan amendments and changes in zoning.       

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The entitlement process can involve substantial amounts of time and   
expense.  The applications generally require the submittal of comprehensive     
plans that involve the use of consultants and other professionals.  Parties     
affected by the development can challenge the applications at the time of       
submittal, which may substantially delay the process.  Generally, once the      
applications are deemed acceptable, the various governing agencies involved     
in the entitlement process commence consideration of the requested              
entitlements.  The applicable agencies often impose conditions, which may       
be costly to the developer, on any approvals of the entitlements.  These        
conditions may include the requirement that the Company dedicate land for       
public use, fund infrastructure improvements, pay impact fees and provide       
affordable housing in the area of the development.  The Company may also be     
subject to conditions that the entitlement will be revoked if the               
development of the project does not take place within a particular time         
period.  If there is a significant change in the land plans, if the             
governmental requirements change, or if market feasibility conditions           
change subsequent to obtaining the county approvals, the Company may be         
required to apply for amendments to the existing entitlement.  The              
amendment process can also be lengthy and costly, and it may result in          
additional conditions attaching to any approvals.                               

If the Company is not successful in obtaining the necessary           
entitlements to develop the property as originally planned, the Company may     
be required to revise its land plan.  In that case, development of the land     
in accordance with revised plans may not be as economically viable as the       
original land plan.  There can be no assurance that all necessary approvals     
will be obtained, that modifications to those plans will not require            
additional approvals, or that such additional approvals will be obtained,       
nor can there be any assurance as to the timing of such events.                 

OAHU SUGAR MILL SITE DEVELOPMENT.  In 1995, the Company closed the    
Oahu Sugar Company plantation.  The former sugar mill site, now owned by a      
subsidiary of Kaanapali Land, comprises approximately 15 acres and is           
located in Waipahu, approximately 10 miles west of downtown Honolulu, near      
Pearl Harbor.  The subsidiary has received county zoning approval for a         
light industrial subdivision on the property.  The Company had expected to      
market this property in bulk after addressing certain identified                
environmental issues.  However, sale of the property is not expected to         
yield significant net cash proceeds to Company because the property is          
encumbered by liens pursuant to bank mortgage financing in an amount which      
approximates the anticipated value of the property.  The lender has filed a     
complaint for foreclosure of the property after prolonged negotiations for      
extension of the financing.  Therefore, there can be no assurance that the      
Company will be able to sell the property, particularly given the disputes      
that have arisen between the Company and the lender.                            

LAND MANAGEMENT AND SALES.  Apart from the golf course properties     
(discussed below), the Kaanapali 2020 lands and the Oahu Sugar mill site,       
the Company owns approximately 500 acres of remaining land.  Parcel 22/23       
(defined in and more fully discussed in Section III.C.) is the only             
remaining fully entitled parcel in the Kaanapali Golf Estates development       
and consists of approximately 110 acres zoned for residential development.      
Parcel 22/23 is currently undeveloped.  The site of the Pioneer Mill            
Company sugar mill that was closed in 1997 ("Pioneer Mill Site") located in     
Lahaina and owned by a subsidiary of the Company, is approximately 19.5         
acres and is zoned for industrial use.  Pioneer Mill also owns several          
parcels, known collectively as the "Wainee Lands", which are located in         
Lahaina south of the mill site.  The Wainee Lands include approximately 235     
acres and are classified and zoned for agricultural use.  However, the          
Company believes that certain portions of the Wainee Lands might be             
developed as an affordable housing community once the property is               
reclassified and rezoned.  The Company also owns less than 100 acres of         
miscellaneous land parcels located on the Islands of Kauai, Maui and Oahu.      
These miscellaneous parcels primarily include mill sites, other land            
associated with now-closed sugar growing and processing operations and          
water-related assets.  It is not expected that upon sale these                  
miscellaneous parcels will yield any significant cash proceeds to the           
Company.                                                                        

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AGRICULTURE                                                           

HISTORIC OPERATIONS.  A significant portion of the Company's revenues 
were formally derived from agricultural operations primarily consisting of      
the cultivation, milling and sale of raw sugar.  The last remaining sugar       
plantation of the Company, owned by a subsidiary of Kaanapali Land was shut     
down at the end of 2000.  In September 2001, the Company also ceased its        
coffee operations, which were owned by a subsidiary of Kaanapali Land.  The     
Company is in the process of liquidating its remaining inventory of coffee      
beans and its mill equipment.  However, the Company is in negotiations with     
a third party concerning the leasing of portions of the Kaanapali 2020 land     
on which the coffee trees are located for the purpose of continuing             
agricultural coffee operations on such land.  If such negotiations result       
in a binding lease agreement, the lessee may also purchase the Company's        
coffee mill equipment.  Most sugar mill equipment with significant value        
has already been sold.                                                          

SEED CORN OPERATIONS.  The Company's seed corn operations are located 
on former Maui sugar lands that are now part of the Kaanapali 2020 area.        
The Company earns modest income under a contract with Monsanto Seed             
Company, to grow seed corn according to Monsanto's specifications.  In          
addition to generating such income, this operation is politically               
advantageous, because the cultivated land helps control dust and soil           
erosion and keeps the fields green, to the benefit of the local community.      
The Company may seek to expand this operation if it can find ready markets      
for their products and it is profitable to do so.  There can be no              
assurance that any expansion will occur or that current operations will         
remain profitable.  The Company is currently negotiating with Monsanto on       
the renewal of their seed corn contracts.  There can be no assurance that       
such renewal will be consummated.                                               

GOLF                                                                  

The Company owns the golf course land and improvements and is         
responsible for the management and operation of an 18-hole golf course          
known as the Waikele Golf Club on Oahu.  The Waikele Golf Course is             
modestly profitable at current levels of debt.  Substantial improvements in     
local economic conditions and the Hawaiian tourism industry would be            
necessary for the Company to realize significant net cash proceeds (after       
debt service) from this business segment.  There can be no assurance that       
such improvements will occur in the near term.                                  

Other golf courses, known as the Royal Kaanapali Golf Courses         
("RKGC"), are on Maui.  The RKGC are owned by Amfac Property Investment         
Corp. ("APIC"), a corporation that is approximately 16.7% owned by two          
subsidiaries of Kaanapali Land and 83.3% owned by AF Investors, LLC             
("AFI"), an affiliate of Kaanapali Land in which Kaanapali Land has no          
direct or indirect interest as of December 31, 2002.  APIC, and with            
respect to certain specified limited amounts, two other subsidiaries of the     
Company are borrowers under a $66 million loan made by the Employees'           
Retirement System of the State of Hawaii ("ERS") in 1991.  The loan, which      
as of December 31, 2002 had a balance of approximately $81 million, is          
secured by the RKGC (and certain adjacent lands owned by APIC).  All of         
APIC's assets are subject to the loan.  The loan matured in June 2001 and       
has not been extended, despite efforts of the borrowers to obtain such an       
extension as described below.                                                   

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The borrowers have been engaged in settlement negotiations with ERS   
since 2000, which negotiations have resulted in the execution of a              
definitive settlement agreement (the "ERS Settlement Agreement") in March       
2003.  Although the borrowers believe that the transactions contemplated by     
the ERS Settlement Agreement will be consummated during the third quarter       
of 2003, the ERS Settlement Agreement is subject to contingencies including     
approval by the state court which has authority over the underlying             
litigation.  Such approval is anticipated in the second quarter of 2003.        
As a consequence of such contingencies, there can be no assurance as to the     
consummation of such settlement agreement.  Consummation of the ERS             
Settlement Agreement and the transactions contemplated therein would            
provide the Company with easements and other rights that it considers           
adequate for the development or sale of Parcel 22/23 as described below,        
but would also result in the Company having no further interest in the          
RKGC.                                                                           

For a description of financial information by segment, please read    
note 10 to the attached consolidated financial statements, which                
information is incorporated herein by reference.                                

PROJECTED ASSET SALES                                                 

There are strategic land sales that the Company is currently pursuing 
or considering in order to raise additional cash that would enhance the         
Company's the ability to fund the Kaanapali 2020 development.                   

PARCEL 22/23.  Kaanapali Golf Estates ("KGE") is a residential        
community that is part of the Kaanapali Beach Resort in West Maui.  KGE has     
been subdivided into several parcels that have been sold to residential         
developers.  There is one remaining parcel available for sale in the            
residential community called "Parcel 22/23".  Parcel 22/23 includes             
approximately 110 acres.  Parcel 22/23 is currently subject to a property       
purchase agreement for sale to a third party that is expected to close          
during the second half of 2003 assuming that the ERS Settlement Agreement       
is consummated and certain other contingencies in the property purchase         
agreement are satisfied.  However, the litigation with the ERS described        
below (in the event that the ERS Settlement Agreement is not consummated)       
may adversely impact the Company's ability to consummate the sale.  The         
amount of net sales proceeds are also subject to completion by the Company      
of site improvements required by the buyer.  Therefore, there can be no         
assurance that such sale will be consummated.                                   

NORTH BEACH.  Prior to the sale of Lot 2 in 2003, the Company owned   
three beachfront lots that total approximately 62 developable acres,            
commonly known as Lots 2, 3 and 4. All three lots are zoned for hotel           
development.  In December 2000, the Company sold a fourth parcel, the 14-       
acre Kaanapali Ocean Resort ("KOR") site known as Lot 1, to SVO Pacific,        
Inc. ("SVO"), an affiliate of Starwood Hotels and Resorts, which is in the      
process of developing time-share units on the property.  In addition, SVO       
received an option to purchase Lot 2, which contains approximately 11.5         
acres.  In January 2003, the option for Lot 2 was exercised and the sale        
closed on January 31, 2003.  A non-refundable payment was made for $2           
million (before closing costs and prorations).  The remainder of the            
purchase price is secured by a note due March 31, 2004 for approximately        
$14.4 million, a portion of which is subject to refund based on the number      
of units approved for development on the sale pursuant to the Special           
Management Area permit that SVO is seeking for the parcel.  Lot 4 contains      
approximately 40 acres but, due to requirements arising from an earlier         
entitlement proceeding, five acres are subject to a requirement that the        
land be used as a community park.  Lot 4 has been offered for sale and is       
currently under contract with a scheduled closing in the third quarter of       
2003.  There are certain contingencies to the contract and there is no          
assurance that the transaction will be consummated under its existing or        
any other terms.  Lot 3 is intended to be retained for the foreseeable          
future.                                                                         

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PIONEER MILL SITE.  The Company owns approximately 19 acres in        
Lahaina, known as the Pioneer Mill Site, which is zoned for industrial          
development.  This was the former site of Pioneer Mill's sugar and coffee       
mills on Maui.  Pioneer Mill is currently evaluating strategic options          
relating to this site.  Pioneer Mill has discovered petroleum contamination     
at the site and has been in the process of remediating the contamination.       
The United States Environmental Protection Agency has conducted some            
environmental testing at the site and Pioneer Mill is awaiting a report on      
the results of that investigation.  Due to the current environmental issues     
at the site, is not likely that any sale or development will take place in      
the near term.  Although Pioneer Mill does not currently believe that it        
has significant additional environmental exposure on this site, any sale of     
the property may, among other things, either require Pioneer Mill to            
demolish most of the current site improvements or adjust the price so that      
a buyer would undertake such demolition.                                        

EMPLOYEES.                                                            

At April 1, 2003, Kaanapali Land and its subsidiaries employed        
approximately 100 persons.  Certain corporate services are provided by          
Pacific Trail and its affiliates.  Kaanapali Land reimburses for these          
services including overhead at cost.                                            

TRADEMARKS AND SERVICE MARKS.                                         

The Company maintains a variety of trademarks and service marks that  
support each of its business segments.  These marks are filed in various        
jurisdictions, including the United States Patent and Trademark Office, the     
State of Hawaii Department of Commerce and Consumer Affairs and foreign         
trademark offices.  The trademarks and service marks protect, among other       
things, the use of the term "Kaanapali" and related names in connection         
with the developments in the vicinity of the Kaanapali Resort area on Maui,     
the various trade names and service marks obtained in connection with the       
Company's coffee operations and the use of the term "Waikele" in connection     
with the Waikele golf course and related developments.  Also protected are      
certain designs and logos associated with the names protected.  Certain         
marks owned by the Company have been licensed to third parties, however,        
the income therefrom is not material to the Company's financial results.        
To the extent deemed advantageous in connection with the Company's ongoing      
businesses, to satisfy contractual commitments with respect to certain          
marks or where the Company believes that there are future licensing             
opportunities with respect to specific marks, the Company intends to            
maintain such marks to the extent necessary to protect their use relative       
thereto.  The Company also intends to develop and protect appropriate marks     
in connection with its future land development activities.                      

MARKET CONDITIONS AND COMPETITION.                                    

There are a number of current factors that have negatively impacted   
Kaanapali Land's development and land sale activities, including market         
conditions, the difficulty in obtaining regulatory approvals, the high          
development cost of required infrastructure and the Company's operating         
deficits in its other business segments.  As a result, the planned              
development of many of the Company's land holdings and the ability to           
generate cash flow from these land holdings have become long-term in            
nature, and the Company has found it necessary to sell certain parcels in       
order to raise cash rather than realize their full economic potential           
through the entitlement process.                                                

The Hawaii economy experienced a downturn beginning in late 1990 after
the initial Persian Gulf War, a recession in Japan and a slowdown in            
California's economy.  The real estate market in Hawaii was negatively          
impacted by these events and its recovery was slow and incomplete.  The         
severe negative impact of the September 11, 2001 terrorist attacks on           
tourism and investment further exacerbated the problems.  The Company           
believes that improvements in tourism arrivals and the length of stay (in       
Hawaii) are also important to improving Hawaii's economy and its real           
estate market.                                                                  

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Although there can be no assurance that Hawaii's real estate market   
will improve in the near term, there have been recent improvements.  The        
areas of primary and secondary residential homes, condominiums and time         
share units have been relatively strong compared to other parts of the          
economy and sales prices during the past couple years have approximated         
those experienced in the early and mid-1990's, but prices are still at          
levels below the late 1980's and below replacement cost of many of the          
properties.  Despite these improvements, the real estate market, and            
especially the market for unimproved land, has not achieved the levels          
experienced during the late 1980's.  Additionally, there can be no              
assurance that any possible recovery of Hawaii's real estate market can be      
sustained.                                                                      

There are several developers, operators, real estate companies and    
other owners of real estate that compete with the Company in its land           
development business on Maui, many of which have greater resources.  The        
number of competitive properties in a particular market could have a            
material adverse effect on the Company's success in its development             
operations.                                                                     

The golf course operated by the Company competes with several other   
golf courses located in its proximity and with other entertainment and          
tourist activities.  Competition in the agriculture business segment            
affects the prices the Company may obtain for the land and other assets it      
leases to third parties for the production of agricultural products.            

GOVERNMENT REGULATIONS AND APPROVALS                                  

The current regulatory approval process for a development project can 
take three to five years or more and involves substantial expense.  There       
is no assurance that all necessary approvals and permits will be obtained       
with respect to the Company's current and future projects.  Generally,          
entitlements are extremely difficult to obtain in Hawaii.  There is often       
significant opposition to proposed developments from numerous groups -          
including native Hawaiians, environmental organizations, various community      
and civic groups, condominium associations and politicians advocating no-       
growth policies, among others.                                                  

Currently, the Company is preparing market and feasibility studies in 
anticipation of applying for the necessary entitlements to carry out the        
Kaanapali 2020 development plan.  While some of these lands have some form      
of entitlements, it is anticipated that all of the land to be developed         
will require state district boundary amendments and county general plan         
amendments, as well as rezoning approvals.  Approximately 1,500 acres of        
this land that is located toward the top of mountain ridges and in gulches      
is classified as conservation, which precludes development.  This               
conservation land, and other land that will be designated as open space, is     
an important component of the overall project and is expected to be part of     
obtaining the entitlements for the remaining land.  The Kaanapali 2020          
development plan is currently at a predevelopment stage.  First, market and     
feasibility studies must be completed.  If they indicate that there is          
appropriate market demand and economic feasibility, the plan will be            
finalized and the entitlement process will commence.  For the last few          
years, the Company has been working with the West Maui community to plan        
possible or potential use and development of the Kaanapali 2020 lands.          
Committees, comprised of private sector individuals from the community as       
well as public employee participants, have been working the company to          
create a vision for the future of the Kaanapali lands.                          

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ENVIRONMENTAL MATTERS.                                                

The Company is subject to environmental and health safety laws and    
regulations related to the ownership, operation, development and                
acquisition of real estate.  Under those laws and regulations, the Company      
may be liable for, among other things, the costs of removal or remediation      
of certain hazardous substances, including asbestos-related liability.          
Those laws and regulations often impose liability without regard to fault.      
The Company is not aware of any environmental condition on any of its           
properties which is likely to have a material adverse effect on its             
consolidated financial position or results of operations; however, no           
assurance can be given that any such condition does not exist or may not        
arise in the future.  Reference is made to Item 8. Legal Proceedings for a      
description of certain legal proceedings related to the environmental           
conditions at the Pioneer Mill and Oahu Sugar sites.                            

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ITEM 2.  FINANCIAL INFORMATION                                                  

KAANAPALI LAND, LLC (a)         
For the years ended December 31, 2002, 2001, 2000, 1999 and 1998          
(Dollars in Thousands Except Per Share Amounts)         

      2002      2001      2000      1999      1998
      --------  --------  --------  --------  --------
Total revenues                                                                  
(c). . . . . .    $ 11,112    81,894    79,247   106,254   110,084            
      ========  ========  ========  ========  ========
Net income                                                                      
(loss) (d) . .    $140,784   (17,082)  (45,707)  (34,245)  (60,582)           
      ========  ========  ========  ========  ========

Income (loss)                                                                   
from continuing                                                               
operations per                                                                
Share. . . . .       (b)      (6,794)  (13,206)   (8,561)  (15,145)           
      ========  ========  ========  ========  ========

Net income                                                                      
(loss) per                                                                    
share. . . . .       (b)      (4,270)  (11,427)   (8,561)  (15,145)           
      ========  ========  ========  ========  ========

Total assets. .    $189,626   223,628   311,705   391,118   486,614             
      ========  ========  ========  ========  ========

Certificate of                                                                  
Land Apprecia-                                                                
tion Notes . .    $  --      139,413   139,413   139,413   220,692            
      ========  ========  ========  ========  ========

(a)   The  above selected financial data should be read in conjunc-   
tion with the financial statements and the related notes appearing              
elsewhere in this registration statement.  The amounts reflected are those      
business segments of the Company's predecessor that are continuing in           
nature.                                                                         

(b)   The income per share from continuing operations for the period  
prior to the Plan Effective Date is $3,235 and the loss per share from          
continuing operations for the period after the Plan Effective Date is $5.       
The net income per share for the period prior to the Plan Effective Date is     
$37,389 and the net loss per share for the period after the Plan Effective      
Date is approximately $5.                                                       

(c)   In 2001 and 1999, the Company recognized as revenue a gain from 
the extinguishment of debt of $10,653 and $12,678, respectively.                

(d)   In 2002, the Company recognized an extraordinary gain on        
reorganization of $136,618.                                                     

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

All references to "Notes" herein are to Notes to Consolidated         
Financial Statements contained in this report.  Information is not              
presented on a reportable segment basis in this section because in the          
Company's judgment such discussion is not material to an understanding of       
the Company's business.                                                         

LIQUIDITY AND CAPITAL RESOURCES                                                 

General                                                                         

In addition to historical information, this Report contains forward-  
looking statements within the meaning of the Private Securities Litigation      
Reform Act of 1995.  These statements are based on management's current         
expectations about its businesses and the markets in which the Company          
operates.  Such forward-looking statements are not guarantees of future         
performance and involve known and unknown risks, uncertainties or other         
factors which may cause actual results, performance or achievements of the      
Company to be materially different from any future results, performance or      
achievements expressed or implied by such forward-looking statements.           
Actual operating results may be affected by various factors including,          
without limitation, changes in national and Hawaiian economic conditions,       
competitive market conditions, uncertainties and costs related to, the          
imposition of conditions on receipt of governmental approvals and costs of      
material and labor, and actual versus projected timing of events all of         
which may cause such actual results to differ materially from what is           
expressed or forecast in this report.                                           

A description of the reorganization of Kaanapali Land and its         
subsidiaries pursuant to the Plan and a description of certain elements of      
the Plan are set forth in Item 1 above.                                         

Pursuant to the terms and conditions of the Plan and except as        
otherwise determined in compliance with the Plan or the Order, the Debtors      
shall continue to exist after the Plan Effective Date as separate legal         
entities.  Except as otherwise provided in the Order or the Plan, the           
Debtors have been discharged from all claims and liabilities existing           
through the Plan Effective Date.  As such, all persons and entities who had     
receivables, claims or contracts with the Debtors that first arose prior to     
the Petition Date and have not previously filed timely claims under the         
Plan or have not previously reserved their right to do so in the                
Reorganization Case are precluded from asserting any claims against the         
Debtors or their assets for any acts, omissions, liabilities, transactions      
or activities that occurred before the Plan Effective Date.                     

On November 14, 2002, pursuant to the Plan, all of the AHI Debtors    
executed and delivered to Kaanapali Land a certain Secured Promissory Note      
in the principal amount of $70 million.  Such note matures on October 31,       
2011 and carries an interest rate of 3.04% compounded semi-annually.  The       
note, which is prepayable, is secured by substantially all of the real          
property owned by the AHI Debtors, pursuant to a certain Mortgage, Security     
Agreement and Financing Statement, dated as of November 14, 2002 and placed     
of record in December 2002.  The note has been eliminated in the                
consolidated financial statements.                                              

In addition to such Secured Promissory Note, certain Non-Debtor AHI   
Subsidiaries continue to be liable to Kaanapali Land under the portion of       
the Senior Indebtedness (as defined in the Plan) not discharged under the       
Plan, which Senior Indebtedness is secured against certain of the real          
property assets that such Non-Debtor AHI Subsidiaries continue to own by        
mortgages that were placed of record at various times prior to the petition     
date.  Such remaining Senior Indebtedness was deemed assigned to Kaanapali      
Land on the Plan Effective Date.  In addition, on the Plan Effective Date,      
Kaanapali Land was deemed to have succeeded to the interest of the COLA         
Holders with respect to all indebtedness under the COLA Notes that was not      

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satisfied under the Plan, which indebtedness was deemed under the Plan to       
continue to be enforceable against the Non-Debtor AHI Subsidiaries that         
were guarantors of the COLA Notes under the COLA Indenture.  Kaanapali Land     
has notified each of the Non-Debtor AHI Subsidiaries that are liable on         
such indebtedness that such indebtedness is due and owing and that              
Kaanapali Land reserves all of its rights and remedies in such regard.          
Given the financial condition of such Non-Debtor AHI Subsidiaries, however,     
it is unlikely that Kaanapali Land will realize payments on such                
indebtedness that are more than a small percentage of the total amounts         
outstanding thereunder.  The Senior Indebtedness has been eliminated in the     
consolidated financial statements.                                              

The primary business of Kaanapali Land is the land development of the 
Company's assets on the Island of Maui.  The Kaanapali 2020 development         
plan will take many years at significant expense to fully implement,            
although the material portion of such anticipated expenses are not              
currently subject to any contractual commitments.                               

At December 31, 2002, the Company had cash of approximately $15.8     
million which is available for working capital requirements, including          
future operating expenses, and the Company's obligations for Kaanapali 2020     
development costs, environmental remediation costs, including those on          
former mill-sites, other potential environmental costs, costs pursuant to       
the ERS settlement agreement, retiree medical insurance benefits (which are     
generally expected to be paid through the end of 2004), and existing and        
possible future litigation.  Reference is made to Item 1 - Business, Item 8     
- Legal Proceedings and the footnotes to the financial statements.              
Proceeds from land sales are the Company's only source of significant cash      
proceeds and the Company's ability to meet its liquidity needs is dependent     
on the timing and amount of such proceeds.                                      

The Company's current indebtedness includes an $8.4 million mortgage
loan secured by the Waikele Golf Course which has a maturity date of            
December 1, 2006.  The Company currently expects to service and ultimately      
refinance such loan in the ordinary course of business. Oahu MS, a              
subsidiary of Kaanapali Land, is also the borrower under a $2.8 million         
mortgage loan which has been due and payable since December 1, 2002.  The       
Company and the lender have engaged in negotiations regarding a possible        
further extension of the loan.  Oahu MS does not have the funds necessary       
to pay the remaining balance of the loan.  If such loan cannot be further       
extended it would likely result in Oahu MS no longer having an ownership        
interest in the property.  The lender has commenced foreclosure proceedings     
that would lead to such result if they were consummated.                        

The Company's continuing operations are primarily reliant upon the net
proceeds of sales of developed and undeveloped land parcels.  As described      
above, a purchase money note receivable related to Lot 2 is due in March        
2004.  Additionally, Parcels 22/23 and Lot 4 are under contract for sale.       
If such note is paid upon maturity and such sales are consummated, the          
Company expects that it will have adequate liquidity for the foreseeable        
future.  However, there can be no assurance that any of such cash proceeds      
will be realized.                                                               

RESULTS OF OPERATIONS                                                           

Reference is made to the footnotes to the financial statements for    
additional discussion of items addressing comparability between years.          

2002 COMPARED TO 2001                                                 

The restructuring in 2002 resulted in significant changes to the      
balance sheet, particularly causing (i) decreases in mortgage and other         
notes payable, deferred income taxes, deferred costs and other assets and       
(ii) changes in the equity of the Company principally due to the gain on        
reorganization.  The restructuring also resulted in the decrease in             
interest expense and the increase in restructuring costs.                       

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Sales and cost of sales declined principally due to the decline in    
land sales.  The amount reflected as a negative cost of sales in 2002 is        
primarily related to the decrease in the accumulated post retirement            
benefit obligation for retired agricultural workers.  The decrease in other     
liabilities is primarily the result of a settlement of future obligations       
relating to a land sale in a prior year for an amount less than was             
recorded at the time of sale.                                                   

The reduction to carrying value of investments was the primary cause  
for the decrease in property.  The decrease in accumulated post retirement      
benefit obligation is primarily due to the decrease in the unrecognized net     
actuarial gain.  The change in equity in income (loss) from unconsolidated      
investments is primarily due to the Company's share of the loss in 2001 for     
value impairment at the Royal Kaanapali Golf Courses versus the gain in         
2002 from the sale of the Company's interest in a hotel.                        

2001 COMPARED TO 2000                                                 

Sales and cost of sales decreased in the aggregate due to significant 
decreases in agricultural operations (primarily as a result of the shutdown     
of the sugar operations on Kauai in 2000) and in Golf Course operations         
(primarily as a result of the Royal Kaanapali Golf Courses being accounted      
for on the equity method in 2001).  Sales and cost of sales increased in        
2001 due to significant land sales on Kauai and Maui.                           

The extinguishment of debt in 2001 is the result of the retirement of 
debt securing the Waikele Golf Course for an amount less than its carrying      
amount.  Interest and other income in 2001 included the effects of the net      
periodic pension credit and the reimbursement to the Company of certain         
administrative and other charges.                                               

The operations of the Royal Kaanapali Golf Courses on the equity      
method of accounting are reflected as equity in income (loss) from              
unconsolidated investments in 2001.  The application of the equity method       
was the primary cause of the decrease in interest expense and the loss from     
unconsolidated investments.                                                     

The reduction to carrying value of investments includes approximately 
$13.7 million and $15.9 million for land in 2001 and 2000, respectively,        
and approximately $4.4 million and $22.0 million for assets used in             
agricultural operations in 2001 and 2000, respectively.                         

INFLATION                                                                       

Due to the lack of significant fluctuations in the level of inflation 
in recent years, inflation generally has not had a material effect on real      
estate development.                                                             

In the future, high rates of inflation may adversely affect real      
estate development generally because of their impact on interest rates.         
High interest rates not only increase the cost of borrowed funds to the         
Company, but can also have a significant effect on the affordability of         
permanent mortgage financing to prospective purchasers. However, high rates     
of inflation may permit the Company to increase the prices that it charges      
in connection with real property sales, subject to general economic             
conditions affecting the real estate industry and local market factors, and     
therefore may be advantageous where property investments are not highly         
leveraged with debt or where the cost of such debt has been previously          
fixed.                                                                          

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CRITICAL ACCOUNTING POLICIES                                                    

The discussion and analysis of the Company's financial condition and  
results of operations are based upon the Company's consolidated financial       
statements, which have been prepared in accordance with accounting              
principles generally accepted in the United States.  The preparation of         
these financial statements requires management to make estimates and            
judgements that affect the reported amounts of assets, liabilities,             
revenues and expenses, and related disclosures of contingent assets and         
liabilities.  These estimates are based on historical experience and on         
various other assumptions that management believes are reasonable under the     
circumstances; additionally management evaluates these results on an on-        
going basis.  Management's estimates form the basis for making judgements       
about the carrying values of assets and liabilities that are not readily        
apparent from other sources.  Different estimates could be made under           
different assumptions or conditions, and in any event, actual results may       
differ from the estimates.                                                      

The Company reviews its property for impairment of value.  This       
includes considering certain indications of impairment such as significant      
changes in asset usage, significant deterioration in the surrounding            
economy or environmental problems.  If such indications are present and the     
undiscounted cash flows estimated to be generated by those assets are less      
than the assets' carrying value, the Company will adjust the carrying value     
down to its estimated fair value.  Fair value is based on management's          
estimate of the property's fair value based on discounted projected cash        
flows.                                                                          

There are various judgments and uncertainties affecting the           
application of these and other accounting policies, including the               
liabilities related to asserted and unasserted claims and the utilization       
of net operating losses.  Materially different amounts may be reported          
under different circumstances or if different assumptions were used.            

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ITEM 2B. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK             

The Company's future earnings, cash flows and fair values relevant to 
financial instruments are dependent upon prevalent market rates.  Market        
risk is the risk of loss from adverse changes in market prices and interest     
rates.  The Company manages its market risk by matching projected cash          
inflows from operating properties, financing activities, and investing          
activities with projected cash outflows to fund debt payments, capital          
expenditures and other cash requirements.  Prior to the filing of the           
Reorganization Case, the Company's primary risk exposure had been to            
interest rate risk.  The Company does not enter into financial instruments      
for trading purposes.                                                           

The Company's debt arrangements are at variable rates.  Based upon the
Company's indebtedness and interest rates at December 31, 2002, a 1%            
increase in market rates or a 1% decrease in market rates would have no         
significant affect on future earnings and cash flows.                           

ITEM 3.  PROPERTIES                                                             

LAND HOLDINGS.                                                        

The major real properties owned by the Company are described under    
Item 1. Business.                                                               

MAUI.                                                                 

As of December 31, 2002, the Company owned approximately 4,900 acres  
of land on the island of Maui, most of which was classified as agricultural     
land or conservation land for State and County purposes. All of the             
Company's Maui land holdings are located in West Maui near the Lahaina and      
the Kaanapali Beach Resort areas.  Included in this acreage is                  
approximately 19.7 acres of land at Lahaina that contain the former Pioneer     
Mill sugar mill, closed in 1999, which also housed the coffee mill              
operations of Kaanapali Estate Coffee, Inc., which is winding up its            
affairs.                                                                        

OTHER PROPERTY.                                                       

In addition to the real property discussed above, the Company also    
owns two sugar mills on Kauai, each with its own power plant. The mills and     
power plants are located in Kekaha and Lihue, Kauai. Each of these              
facilities was involved in the production of raw sugar from sugar cane and      
the production of electrical and steam power until their closings in late       
2000.  The Lihue power plant continued to operate pursuant to a modified        
agreement with the local electric utility, through the end of 2002.             

ITEM 4.  SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT         

As of April 23, 2003, there were approximately 139,776 Class A Shares 
issued, outstanding and distributed, and the Company is not aware of any        
person that is the beneficial owner of more than 5% of the Class A Shares.      

As of April 23, 2003, there were 1,631,513 Class B Shares issued and  
outstanding, all of which were held by Pacific Trail and individuals and        
entities that are affiliate with it.  Pacific Trail is owned in excess of       
95%, directly or indirectly, by JMB Realty Corporation, certain of its          
current and former shareholders, officers and directors and their families.     

No shares of the Company are owned by any executive officer.                    

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ITEM 5.  MANAGERS AND EXECUTIVE OFFICERS OF THE REGISTRANT                      

The sole manager of Kaanapali Land, LLC is Pacific Trail, which is also 
Kaanapali Land's largest shareholder.  Although the executive officers of       
Kaanapali Land are empowered to manage its day-to-day business affairs,         
under the LLC Agreement, most significant actions of Kaanapali Land outside     
the ordinary course of business must first be authorized by Pacific Trail.      
Pacific Trail may not be removed as manager except under certain narrow         
circumstances that are not expected to occur.  As of April 15, 2003, the        
executive officers and certain other officers of the Company were as            
follows:                                                                        

            Position
             Held with
Name                             the Company                  
----------                          ------------                    

Gary Nickele                        President and                   
                               Chief Executive Officer
Peggy H. Sugimoto                   Senior Vice President           
Tamara G. Edwards                   Senior Vice President           
Stephen A. Lovelette                Executive Vice President        
Gailen J. Hull                      Senior Vice President and       
                           Chief Financial Officer

Certain of these officers are also officers and/or directors of JMB   
Realty Corporation ("JMB") and numerous affiliated companies of JMB             
(hereinafter collectively referred to as "JMB affiliates").  JMB affiliates     
outside of the Company have not materially engaged in the agriculture           
business and have primarily purchased, or made mortgage loans securing,         
existing commercial, retail, office, industrial and multi-family                
residential rental buildings or have owned or operated hotels on various        
other hospitality businesses.  However, certain partnerships sponsored by       
JMB and other affiliates of JMB are engaged in land development activities      
including planned communities, none of which are in Hawaii.                     

There is no family relationship among any of the foregoing officers.  

The LLC Agreement also provides for the appointment of a "Class A     
Representative" to monitor the activities of Kaanapali Land on behalf of        
its Class A Shareholders.  The Class A Representative who must be               
independent is entitled to receive certain information from Kaanapali Land      
and must approve certain actions that Kaanapali Land may take outside the       
course of business primarily related to debt that might be obtained from        
affiliated parties.  The current Class A Representative is American Express     
Tax and Business Services, Inc.                                                 

There are no arrangements or understandings between or among any of   
said officers and any other person pursuant to which any officer was            
selected as such.                                                               

The business experience during the past five years of such officers of
the Company includes the following:                                             

Gary Nickele (age 50) has been Manager of AHI since August, 2000 and  
President of AHI and certain of its subsidiaries since February 2001.  He       
has been the President of Kaanapali Land since May 2002.  Mr. Nickele is        
also the President and Director of Arvida/JMB Managers, Inc., the sole          
general partner of Arvida/JMB Partners, L.P. ("Arvida Partners").  Arvida       
Partners conducts land development activities primarily in Florida.  Mr.        
Nickele has been associated with JMB and Arvida Partners since February,        
1984 and September, 1987, respectively.  He holds a J.D. degree from the        
University of Michigan Law School and is a member of the Bar of the State       
of Illinois.                                                                    

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Peggy H. Sugimoto (age 52) has been Senior Vice President and Chief   
Financial Officer of AHI since 1994 and had been Manager from August 1996       
to February 1999.  Ms. Sugimoto has been a Senior Vice President of             
Kaanapali Land since May, 2002.  Ms. Sugimoto has been associated with the      
Company since 1976. She is a Certified Public Accountant.                       

Tamara G. Edwards (age 48) has been Senior Vice President of AHI since
August 1996.  Ms. Edwards has been President of several of the subsidiaries     
since March 1997. Ms. Edwards served as Senior Counsel for the Company from     
1995 through 1997. She was also formerly a Manager of AHI and Director of       
certain of its subsidiaries.  She is a member of the Bar of California,         
Florida and Hawaii.                                                             

Stephen Lovelette (age 47) has been an Executive Vice President of AHI
since 2000 and Kaanapali Land since May 2002.  Mr. Lovelette is in charge       
of implementing the Kaanapali 2020 development plan.  Mr. Lovelette has         
been associated with JMB and its affiliates for over 15 years.  Prior to        
joining an affiliate of JMB, Mr. Lovelette worked for Arvida Company under      
its previous ownership and continues to oversee its development efforts.        
Mr. Lovelette holds a bachelor's degree from The College of the Holly Cross     
and an MBA from Seton Hall University.                                          

Gailen J. Hull (age 54) is Senior Vice President and, since August    
2002, Chief Financial Officer of Kaanapali Land.  Mr. Hull has been             
associated with JMB since March, 1982.  He holds a Masters degree in            
Business Administration from Northern Illinois University and is a              
Certified Public Accountant.                                                    

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ITEM 6.  EXECUTIVE COMPENSATION                                                 

Certain of the officers of the Company listed in Item 5 above are         
officers of JMB and are compensated by JMB or an affiliate thereof (other       
than the Company and its subsidiaries). The Company will reimburse JMB,         
Pacific Trail and their affiliates for any expenses incurred while              
providing services to the Company.                                              

SUMMARY COMPENSATION TABLE          

Annual Compensation (1)(3)          
---------------------------         
                                             Other
                                            Annual
                                             Compensa-
  Principal              Salary    Bonus    tion
Name (2)          Position (4)    Year     ($)      ($)      ($)                
---------------   ------------   -----   -------  ------  ---------             

Gary Nickele      President       2002   180,000 100,000     N/A                
  and Chief       2001   172,300    N/A      N/A
Executive                                   
Officer                                     

Peggy Sugimoto    Senior Vice     2002   165,000  55,000     N/A                
  President       2001   160,000  50,000     N/A
                  2000   155,000  50,000     N/A

Tamara G. Edwards Senior Vice     2002   250,000 100,000     N/A                
  President       2001   250,000  41,500     N/A
                  2000   250,000 115,000     N/A

Stephen A.                                                                      
Lovelette       Executive                                                   
  Vice President  2002   175,000  50,000     N/A

Gailen J. Hull    Senior Vice     2002   175,000    N/A      N/A                
President and                               
Chief Financial                             
Officer                                     
----------                                                                      

(1)   The Company does not have a compensation committee.  Executive  
officer compensation was determined through deliberations with Pacific          
Trail representatives.                                                          

(2)   Includes CEO and 4 most highly compensated executives whose     
salary and bonus exceed $100,000.                                               

(3)   Salary and bonus amounts for Messrs. Nickele, Lovelette and     
Hull represent the portion of total compensation allocated and charged to       
the Company.                                                                    

(4)   Positions listed are those for Kaanapali Land, and prior to its 
formation, with AHI.                                                            

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ITEM 7.  CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS                         

An affiliated insurance agency earns insurance brokerage commissions  
in connection with providing the placement of insurance coverage for            
certain of the properties and operations of the Company.  Such commissions      
are comparable to those that would be paid to such affiliate insurance          
agency in similar dealings with unaffiliated third parties, and are             
generally paid by the insurance carriers that the agency represents out of      
the premiums paid by the Company for such coverage.  The total of such          
commissions for the years ended December 31, 2002, 2001 and 2000 (including     
amounts related to discontinued operations in 2001 and 2000) was                
approximately $75 thousand, $1.1 million and $1.3 million, respectively,        
not all of which was paid as of December 31, 2002.                              

The Company pays a non-accountable reimbursement of approximately $30 
thousand per month to an affiliate in respect of general overhead expense,      
all of which was paid as of December 31, 2002.                                  

The Company reimburses their affiliates for direct expenses incurred  
on its behalf, including salaries and salary-related expenses incurred in       
connection with the management of the Company's operations.  The total          
costs for the years ended 2002, 2001 and 2000 was approximately $2.0            
million, $1.1 million and $2.8 million, respectively, of which                  
approximately $.5 million was unpaid as of December 31, 2002.                   

Employees of certain of the Company's unconsolidated affiliates are   
entitled to participate in the Company's defined contribution pension plan.     

Pursuant to an agreement through December 31, 2001 Northbrook was entitled      
to receive a reimbursement from such affiliates in an amount equal to the       
service cost related to these employees. The amount of the reimbursement        
for 2002, 2001 and 2000 was $0, $1.2 million and $1.5 million,                  
respectively, all of which was paid as of December 31, 2002.                    

The Company had other amounts due from affiliates of $19 thousand and 
$.3 million at December 31, 2002 and 2001, respectively.                        

ITEM 8.  LEGAL PROCEEDINGS                                                      

Material legal proceedings of the Company are described below.  In    
proceedings filed prior to the Petition Date where a Debtor is a defendant,     
such proceedings were stayed as against such Debtor by the filing of the        
Reorganization Case.  Those proceedings may now continue since the Plan         
Effective Date has occurred so long as the plaintiffs therein filed timely      
claims under the Plan.  However, any judgments rendered therein would be        
subject to the distribution provisions of the Plan, which would in most         
cases result in the entitlement of such claims to proceeds that are             
substantially less than the face amount of such judgments.  Any claims that     
were not filed on a timely basis under the Plan have been discharged by the     
Bankruptcy Court and thus the underlying legal proceedings should not           
result in any liability to the Debtors.  Proceedings against subsidiaries       
or affiliates of Kaanapali Land that are not Debtors were not stayed by the     
Plan and may proceed.                                                           

APIC, which is not a Debtor and is owned approximately 16.7% by the   
Company, is the primary borrower under a $66 million loan made by the ERS       
in 1991.  The loan, which has a balance as of December 31, 2002 of              
approximately $81 million, is secured by the RKGC (and certain adjacent         
lands).  All of APIC's assets are subject to the loan.  The loan matured in     
June 2001 and has not been extended, despite efforts of the borrowers to        
obtain such an extension as described below.                                    

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Due to insufficient cash flow generated by the RKGC and because of    
disagreements with the lender over, among other things, lender's failure        
(i) to consent to a grant of required easements in order for the Company to     
develop and market its adjoining properties and (ii) to release adjacent        
lands that are not related to the golf course operations from the mortgage,     
as required under the loan documents, APIC and the other borrowers under        
the loan did not pay the required interest payments due in 2000 on the loan     
secured by these golf courses.  ERS then issued a default notice and            
instituted a foreclosure action in August 2000 (Employees' Retirement           
System of the State of Hawaii v. Amfac/JMB Hawaii, L.L.C., et. al., Civil       
No. 00-1-2597-08, First Circuit Court, State of Hawaii).  Pursuant to an        
agreement between the lender and the borrowers, the borrowers paid              
approximately $3.8 million in September 2000 to the ERS for a portion of        
the past due interest amounts and the ERS agreed to temporarily suspend its     
action to realize upon its security while the parties attempted to              
negotiate a definitive agreement to extend the loan beyond its June 30,         
2001 maturity date.  Efforts of the borrowers to negotiate such an              
agreement broke down in December 2001, only after Northbrook (an affiliate      
of APIC that had no obligations under the loan) had funded certain minimum      
interest payments (together with the ERS' legal fees and other related          
costs).  In January 2002, ERS recommenced its foreclosure action, which the     
borrowers are contesting.  The borrowers have also brought counterclaims        
against ERS relative to the lender's defaults described above, which            
defaults have caused APIC and the Company substantial damages relating to       
its efforts to sell either the unrelated parcels that the ERS refused to        
release from the mortgage or other land parcels that required easements and     
other rights to which the ERS was required to consent.                          

The borrowers' counterclaims against the ERS in such litigation       
assert, among other things, that because of the refusal of the ERS to           
perform in accordance with the loan documents and grant the required            
consents and releases, dating back to the inception of the loan, the            
Company suffered damages over time relating to various development projects     
and sale transactions that APIC and/or the Company consummated or attempted     
to consummate since 1991.  Also alleged is that these refusals and the          
interference of the ERS with APIC's and the Company's legitimate                
development efforts was intended by ERS to give the ERS leverage over APIC      
and the Company's development and land sale activities to the benefit of        
ERS, not to protect the ERS' bargained for security for its loan on the         
RKGC.  Some projects allegedly were substantially delayed by the ERS'           
defaults and significant land sales were allegedly either substantially         
delayed or failed altogether.  Income from sales allegedly was also             
adversely affected in addition to the expenses of development caused by the     
ERS' delays and refusals.  In addition, APIC and the Company allegedly          
suffered significant damages relative to the costs of attorneys and other       
professionals that the Company was forced to pay (including those of ERS'       
attorneys and professionals) in its failed attempt to obtain the consents       
and releases.  Failure to obtain the necessary easements promised by ERS        
allegedly could allegedly subject APIC and/or the Company to damages claims     
from landowners on parcels previously sold by the Company and,                  
particularly, could allegedly significantly negatively impact the value and     
marketability of its remaining land parcels in Kaanapali Golf Estates,          
which requires such easements for access and to ensure that the parcel          
enjoys necessary water and drainage rights.  As a consequence of the ERS'       
alleged actions, the borrowers' counterclaims allege, among other things,       
that the ERS breached its duties under the contract, breached the ERS'          
implied covenant of good faith and fair dealing, fraudulently induced the       
borrowers to enter into the loan, acted in a fraudulent manner respecting       
its fiduciary relationship with the borrowers and/or acted in bad faith.        
The counterclaim seeks, among other things, damages, attorneys' fees and        
costs, and an order directing the ERS to provide the releases and consents      
required by the loan documents.  There can be no assurance that defendants      
will prevail in the counterclaim or in the defense of ERS's attempt to          
realize on its security.  On March 19, 2002, the court entered an order         
appointing a receiver for the property that is security for the loan, as        
well as for the golf course operations related thereto.  The receiver has       
taken over the golf course operations from APIC and hired most of APIC's        
former employees.  APIC's former employees are seeking from APIC payment of     
severance and certain benefits, among other things.                             

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The borrowers have been engaged in settlement negotiations with ERS   
since 2000, which negotiations have resulted in the execution of the ERS        
Settlement Agreement in March 2003.  Although the borrowers believe that        
the transactions contemplated by the ERS Settlement Agreement will be           
consummated during the third quarter of 2003, the ERS Settlement Agreement      
is subject to contingencies including approval by the state court which has     
authority over the underlying litigation.  Such approval is anticipated in      
the second quarter of 2003.  As a consequence of such contingencies, there      
can be no assurance as to the consummation of such settlement agreement.        
Consummation of the ERS Settlement Agreement and the transactions               
contemplated therein would provide the Company with easements and other         
rights that it considers adequate for the development or sale of Parcel         
22/23, but would also result in the Company having no further interest in       
the RKGC.                                                                       

In October 2002, in anticipation of the finalization of the ERS       
Settlement Agreement, Kaanapali Land, AHI and certain related entities          
entered into a Funding Agreement (the "Funding Agreement") with APIC, AFI       
and AFI's parent, Amfac Finance Limited Partnership ("AFLP") that specifies     
how amounts paid by Kaanapali Land as "Funding Entity" under such               
settlement agreement will be treated.  Kaanapali Land was willing to enter      
into the Funding Agreement because, among other things, the ERS had             
threatened to file a significant claim in the Reorganization Case against       
the borrowers who are Debtors, which claim, if allowed in whole or              
significant part would likely cause a material adverse impact on the            
Company and its prospects for successfully implementing the Plan.  Although     
the Debtors believe that any such claim would be without merit, either in       
whole or substantial part there could be no assurance that it would not         
ultimately be allowed in a significant amount.  The existence of the            
Funding Agreement made it possible to enter into the ERS Settlement             
Agreement, which in turn has significantly reduced, if not eliminated, the      
risk that any such claim will be filed by ERS under the Plan.  Generally,       
1/6 of the funded amounts shall be treated as capital contributions to AHI      
and Pioneer Mill and then to APIC, on account of AHI's stock ownership in       
APIC.  The remaining 5/6 of such amounts shall be treated as a loan by          
Kaanapali Land to AFLP, which will then be treated as having been               
contributed by AFLP, through AFI, to APIC on account of AFI's stock             
ownership in APIC.  The ability of AFLP to reimburse Kaanapali Land for         
such loan amounts depends on the recovery by AFLP of a judgment it has          
obtained in certain litigation that is unrelated to the Company.  There can     
be no assurance that AFLP will ultimately realize on such judgment or that      
it will obtain proceeds relative thereto or otherwise in an amount              
sufficient to satisfy the loan from Kaanapali Land.                             

Concurrently with the execution of the ERS Settlement Agreement, APIC 
entered into a settlement agreement with the union representing the             
bargaining unit employees employed by APIC at the time the receivership         
commenced.  Such settlement shall, upon consummation of the ERS Settlement      
Agreement, result in certain amounts being paid or distributed to such          
employees in return for releases by each of them and the union in favor of      
APIC and the Company.  APIC intends to handle its former non-bargaining         
unit employees employed at the RKGC at such time in substantially the same      
manner.  However, there can be no assurance that such settlement will be        
consummated, nor that all eligible former employees will take advantage of      
it.                                                                             

In connection with the Reorganization Case, the ERS, the Debtors and  
APIC, during the third quarter of 2002, entered into a Stipulation approved     
by the Bankruptcy Court, which as amended from time to time and approved by     
the Bankruptcy Court since originally entered, among other things,              
currently (i) provides for an extension of the bar date by which the ERS        
must file any claims it may have against any of the Debtors until five (5)      
business days after written notice from the Debtors and (ii) reserves the       
rights of the ERS and the Debtors with respect to objections that the ERS       
may have to the treatment of its claims under the Plan and further provides     

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that such objections, if asserted, will be resolved by the Bankruptcy Court     
following confirmation of the Plan in the manner as set forth in the            
Stipulation.  The consummation of the ERS Settlement Agreement would result     
in the release and waiver of any claims that the ERS might have against the     
Debtors in the Reorganization Case.                                             

On September 20, 1996, Oahu Sugar Company, LLC, successor by merger to
Oahu Sugar Company, Limited ("Oahu Sugar") and a subsidiary of Kaanapali        
Land, filed a lawsuit, Oahu Sugar v. Walter Arakaki and Steve Swift, Case       
No. 96-3880-09, in the Circuit Court of the First Circuit, State of Hawaii.     

In the lawsuit, Oahu Sugar, which is a Non-Debtor AHI Subsidiary, alleged       
that it entered into an agreement to sell to defendants certain sugar cane      
processing equipment at Oahu Sugar's sugar cane mill in Waipahu.  Oahu          
Sugar alleged that defendants failed to timely dismantle and remove the         
equipment, as required by the agreement, and that defendants were obligated     
to pay Oahu Sugar rent for the area occupied by the equipment beyond the        
time provided for by the parties.  Oahu Sugar further alleged that it           
provided notice to defendants that Oahu Sugar was entitled to treat the         
equipment as abandoned property and to sell the equipment, because the          
equipment had not been removed from the property in a timely fashion, as        
required by the parties' agreement.  In its complaint, Oahu Sugar sought,       
among other things, declaratory relief that it was entitled to treat the        
equipment as abandoned, damages for breach of contract, and rent under an       
unjust enrichment theory.                                                       

Defendants filed an answer, as amended, denying the substantive       
allegations of Oahu Sugar's complaint and asserting various affirmative         
defenses.  In addition, the defendants filed a seven-count counterclaim         
against Oahu Sugar.  In the counterclaim, defendants alleged, among other       
things, that Oahu Sugar failed to make the equipment available for removal      
on a timely basis, and that Oahu Sugar otherwise improperly interfered with     
defendants' plans for the removal and subsequent sale of the equipment.  In     
the counterclaim, defendants sought, among other things, general, special       
and punitive damages, attorneys' fees, costs, and such other relief as the      
Court may have deemed appropriate.                                              

Oahu Sugar's declaratory relief claim was settled in advance of trial.

Oahu Sugar obtained dismissals and directed verdicts on six of defendants'      
claims.  The remaining portions of the complaint and counterclaim proceeded     
to a jury trial and verdict.  On December 2, 1999, the jury denied Oahu         
Sugar relief on its remaining claims and awarded the defendants                 
approximately $2.6 million in damages on their counterclaim.  On March 2,       
2000, the trial court entered a judgment against Oahu Sugar for the $2.6        
million in damages awarded by the jury.  In addition, the trial court           
awarded counterclaimants $751 thousand in attorneys' fees, $28 thousand in      
costs and $866 thousand in prejudgment interest.  Oahu Sugar's post trial       
motions for judgment as a matter of law and for a new trial were denied.        
Oahu Sugar filed a notice of appeal.  The defendants began efforts to           
collect the amounts awarded to them.  Defendants caused garnishee summons       
to be issued to various affiliated and unaffiliated entities.  The              
defendants scheduled a debtor's examination for August 23, 2000 which was       
not concluded.  The Hawaii Supreme Court scheduled the case for an              
appellate conference and mediation that was unsuccessful.  Then, on             
January 3, 2001, the Hawaii Supreme Court entered an order dismissing the       
appeal.  The Supreme Court held that it lacked jurisdiction over the appeal     
because the judgment entered on March 2, 2000 was legally defective in that     
it did not identify the claim for which judgment was entered or dismiss all     
of the other claims and counterclaims of the parties.  In light of the          
order of the Hawaii Supreme Court, the parties filed legal briefs before        
the trial court to have the court determine, among other things, whether a      
corrected judgment consistent with the jury verdict may be entered as of        
March 2, 2000 or a new judgment order is required.  After hearing the           
arguments of the parties, on March 19, 2001, the trial court ruled that it      
would not enter a corrected judgment as of March 2, 2000 and that a new         
judgment order will be required.  On April 12, 2001, the court entered the      

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new judgment order on the counterclaims providing for the payment of            
approximately $2.6 million in damages, $730 thousand in attorneys' fees,        
$28 thousand in costs, $867 thousand in prejudgment interest, and               
additional prejudgment interest from January 20, 2000 through April 12,         
2001.  From and after entry of the order, post-judgment interest will           
accrue on the unpaid balance at the statutory rate of ten percent per annum     
until paid in full.  Oahu Sugar is pursuing an appeal and the opposing side     
has filed a cross appeal seeking further relief on any potential retrial of     
the matter.  The case is fully briefed and awaits a decision by the Hawaii      
Supreme Court.  Oahu Sugar continues to believe that it is entitled to          
affirmative relief on its complaint and that it has meritorious defenses to     
the counterclaim that it has pursued on appeal.  The Company, however, can      
provide no assurances that it will be successful in obtaining affirmative       
relief or overturning the verdict against Oahu Sugar.  This verdict, if         
upheld, could have a material adverse effect on the Oahu Sugar's financial      
condition.                                                                      

On or about December 15, 2000, Oahu Sugar and Oahu MS Development     
Corp. ("Oahu MS", f/k/a Amfac Property Development Corp.), subsidiaries of      
Kaanapali Land, among others, were named in a lawsuit entitled Walter           
Arakaki and Steve Swift v. Oahu Sugar Company, Limited et al., Civil No.        
00-1-3817-12, and filed in the Circuit Court of the First Circuit of            
Hawaii.  In the complaint, as amended, plaintiffs seek a declaration that       
certain conveyances of real estate made by Oahu Sugar or Oahu MS, since         
December 1996, were allegedly fraudulent transfers made in violation of the     
common law, the Hawaii fraudulent transfer act, and rights which they claim     
arose in connection with the claims they filed in Oahu Sugar v. Walter          
Arakaki and Steve Swift, Case No. 96-3880-09, discussed above (hereinafter,     
"underlying matter").  Plaintiffs seek, among other things, injunctive and      
declaratory relief, compensatory damages, punitive damages, orders of           
attachment against sales proceeds, voidance of certain transfers,               
foreclosure and other remedies in connection with various transfers of real     
estate made by Oahu Sugar to Oahu MS the Young Men's Christian Association      
of Honolulu ("YMCA"), and the Filipino Community Center, Inc. ("FCC"),          
among others, all over the years 1996-2000.  The YMCA and FCC have also         
been named defendants in this action and have filed cross-claims for relief     
against Oahu Sugar and Oahu MS for alleged breach of warranty of title,         
indemnity and contribution in connection with their respective                  
transactions, and seeking, among other things, damages, attorneys' fees,        
costs, and prejudgment interest.  Oahu Sugar and Oahu MS have filed answers     
to the complaint, as amended, and the cross-claims.  On May 3, 2001,            
plaintiffs filed an amended complaint dropping the remedy of foreclosure in     
connection with certain property transferred to the YMCA and adding various     
allegations including, without limitation, allegations regarding the final      
judgment entered in the underlying matter.  The case is proceeding and is       
set for mediation in July 2003 and for trial in April 2004.  Oahu Sugar and     
Oahu MS believe they have meritorious defenses and intend to pursue their       
defenses vigorously.  However, there can be no assurances that this case,       
when once adjudicated, will not have a material adverse effect on the           
financial condition of Oahu Sugar or Oahu MS.                                   

The Company believes that Oahu Sugar has meritorious defenses to the  
above referenced pending lawsuits that continue to be pending and Oahu          
Sugar will defend itself vigorously. However, as Oahu Sugar is                  
substantially without assets to satisfy any material existing or future         
judgment, there can be no assurances that these cases (or any of them), if      
adjudicated in a manner adverse to Oahu Sugar, will not have a material         
adverse effect on the financial condition of Oahu Sugar.                        

On October 23, 2002, Oahu MS was named in a civil action entitled City
Bank v. Amfac Property Development Corp., et. al. pending in the Circuit        
Court of the First Circuit, State of Hawaii, Civil No. 02-2494-10.  In this     
case, plaintiff seeks injunctive relief and declaratory relief to cease         
actions preventing City Bank and its consultants from gaining access to the     
mortgaged property for environmental testing.  Although plaintiff filed a       
Motion for Preliminary Injunction, no hearing has been set on the motion.       

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On January 2, 2003, Oahu MS was named in a civil action entitled City 
Bank v. Amfac Property Development Corp., et. al. pending in the Circuit        
Court of the First Circuit, State of Hawaii, Civil No. 03-1-0005-01.  In        
this case, plaintiff seeks foreclosure of property owned by Oahu and            
encumbered by a mortgage in favor of Plaintiff.  Together with the              
Complaint, City Bank filed a Motion for Appointment of Receiver alleging        
that it is entitled to have a receiver appointed for an environmental audit     
on the mortgaged property and collection of all net rental income assigned      
to City Bank.  This motion was granted.                                         

On or about February 23, 2001 Kekaha Sugar Co., Ltd., a subsidiary of 
Kaanapali Land, received a letter from the Hawaii Department of Health          
("HDOH") assigning the Kekaha Sugar Co., Ltd. site a high priority status       
based on HDOH's review of available environmental data.  In the letter,         
HDOH identified five major areas of potential environmental concern             
including the former wood treatment plant, the herbicide mixing plant, the      
seed dipping plant, the settling pond, and the Kekaha Sugar Mill.  While        
setting forth specific concerns, the HDOH reserved the right to designate       
still further areas of potential concern which might require further            
investigation and possible remediation.  HDOH further reserved the right to     
modify its prioritization of the site should conditions warrant.  The           
assignment of the high priority status will likely result in a high degree      
of oversight by the HDOH as the issues raised are studied and addressed.        
Kekaha Sugar Co., Ltd. has responded to the letter.  The United States          
Environmental Protection Agency has performed a visual inspection of the        
property and indicated there will be some testing performed.  Kekaha Sugar      
Co., Ltd. is substantially without assets and further pursuit of this           
matter by HDOH could have a materially adverse effect on the financial          
condition of Kekaha Sugar Co., Ltd.                                             

On or about February 23, 2001, Lihue Plantation received a similar    
letter from the HDOH assigning the LPCo site a high priority status based       
on HDOH's review of available environmental data.  In the letter, HDOH          
identified four major areas of potential environmental concerning including     
the Lihue Plantation herbicide mixing plant, the seed dipping plant, the        
settling pond and the Lihue Sugar Mill.  While setting forth specific           
concerns, the HDOH reserved the right to designate still further areas of       
potential concern which might require further investigation and possible        
remediation.  HDOH further reserved the right to modify its prioritization      
of the site should conditions warrant.  As noted above, the high priority       
assignment will likely result in a high degree of oversight by the HDOH as      
the issues raised are studied and addressed.                                    

Oahu MS has discovered chlorinated solvents in the groundwater at the 
former Oahu Sugar Waipahu Sugar Mill site.  The contamination does not          
appear in high concentrations.  Oahu MS' recommendation for remediation         
using hydrogen-releasing compounds has been rejected by the HDOH.  Oahu MS      
may have to do further work at the site.  At this point, Oahu MS is unable      
to identify with certainty the treatment options, if any, that the HDOH may     
require or approve for the site, or the costs of same.                          

Pioneer Mill is engaged in an ongoing cleanup arising out of the      
discovery of petroleum contamination found at the Pioneer Mill site.  The       
Pioneer Mill site has been assigned a high priority and the HDOH has shown      
an interest in the environmental conditions relating to or arising out of       
the former operations of Pioneer Mill.  These issues will have to be            
addressed as they are raised.  Currently, Pioneer Mill is awaiting a report     
on the results of environmental testing conducted on the site by the United     
States Environmental Protection Agency.                                         

As a result of an administrative order issued to Oahu Sugar by the    
Hawaii Department of Health, Order No. CH 98-001, dated January 27, 1998,       
Oahu Sugar is currently engaged in environmental site assessment of lands       
it leased from the U.S. Navy and located on the Waipio Peninsula.  Sampling     
is underway and the investigation is otherwise still in its preliminary         
stages.  Oahu Sugar has submitted a Remedial Investigation Report to the        
HDOH.  The HDOH has provided comments which indicate additional testing may     
be required.                                                                    

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In addition, the IRS filed a claim in the bankruptcy proceedings in   
the aggregate amount of approximately $20,600,000 for taxes, interest and       
penalties related to the years 1998-2000.  The Company has contacted the        
IRS to request that it withdraw its claim due to the fact that the Plan         
leaves the IRS unimpaired relative to any taxes that may be due.  Although      
the Company is optimistic that the IRS will withdraw such claim, it has not     
yet done so and there can be no assurance that it will.  In any event, the      
IRS audit of the period covered by the claim is in its preliminary stages       
and no deficiencies in taxes have been proposed by the auditors.  The           
Company intends to dispute vigorously any IRS claim for additional taxes,       
whether asserted by means of the claim filed in the bankruptcy proceeding,      
arising in the pending audit, or in future audits.  However, there can be       
no assurance that the Company will be successful in such defense and,           
although the Company has reserved for potential tax liabilities on its          
financial statement,s to the extent that the Company is unsuccessful in         
defending against any such claims, either in the bankruptcy court or in         
connection with the IRS audits, the amount for which the Company could be       
liable could have a material adverse effect on the Company, given its           
relatively modest cash position.                                                

EC Managers, Inc., a subsidiary of Kaanapali Land, and general partner
of EC Partners, L.P., formerly known as Arvida/JMB Partners, L.P.-II (the       
"Partnership"), has been named a defendant in a lawsuit filed on January        
11, 1996 in the Circuit Court in and for the Eighteenth Judicial Circuit,       
Seminole County, Florida entitled Land Investment I, Ltd., Heathrow Land &      
Development Corporation, Heathrow Shopping Center Associates and Paulucci       
Investments v. Arvida/JMB Managers-II, Inc., Arvida/JMB Partners, L.P.-II,      
Arvida Company and JMB Realty Corporation, Case No. 96-62-CA-15E.  The          
complaint, as amended, includes counts for breach of the management             
agreement, fraud in the inducement and conspiracy to commit fraud in the        
inducement, breach of the Heathrow partnership agreement and constructive       
trust in connection with the purchase and management of the Heathrow            
development.  Plaintiffs seek, among other things, unspecified compensatory     
damages, punitive damages, prejudgment interest, attorneys' fees, costs,        
and such other relief as the Court deems appropriate.  Substantial fact         
discovery has been conducted to date and the defendants expect further          
substantial discovery, both of fact and expert witnesses, to take place.        

On June 24, 1999, the Court granted partial summary judgment in favor 
of the plaintiffs against Arvida Company, finding that Arvida Company owed      
plaintiffs a fiduciary duty as a broker and advisor under the management        
agreement.  The ruling did not reach the issue of the statute of                
limitations defense nor whether any such duties were owed in connection         
with the Partnership's acquisition of an interest in the Heathrow               
development through the Heathrow partnership.                                   

No discovery cut-off date or trial date has been set, although the    
court has indicated a desire to try this case in November, 2003.                

Kaanapali Land, as successor by merger, and D/C Distribution, a       
subsidiary of Kaanapali Land, have been named as defendants in personal         
injury actions allegedly based on exposure to asbestos.  There are              
approximately 110 cases against such subsidiary that are pending on the         
mainland and are alleged based on such subsidiary's prior business              
operations.  Each company believes that it has meritorious defenses against     
these actions, but can give no assurances as to the ultimate outcome of         
these cases.  In the case of the subsidiary, there can be no certainty that     
such subsidiary will be able to satisfy all of its liabilities for these        
cases.  As the subsidiary is without assets to satisfy any material             
existing or future judgments, there can be no assurances that these cases       
(or any of them), if adjudicated in a manner adverse to the subsidiary,         
will not have a material adverse effect on the financial condition of such      
subsidiary.  Kaanapali Land does not believe that it has liability,             
directly or indirectly, for such subsidiary's obligations.                      

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Other than as described above and the Reorganization Case as described
above, the Company is not involved in any material pending legal                
proceedings, other than ordinary routine litigation incidental to its           
business. The Company and/or certain of its affiliates have been named as       
defendants in several pending lawsuits. While it is impossible to predict       
the outcome of such routine litigation that is now pending (or threatened)      
and for which the potential liability is not covered by insurance, the          
Company is of the opinion that the ultimate liability from any of this          
litigation will not materially adversely affect the Company's consolidated      
results of operations or its financial condition.                               

ITEM 9.  MARKET PRICE OF AND DIVIDENDS ON THE REGISTRANT'S                      
COMMON EQUITY AND RELATED STOCKHOLDER MATTERS                 

There is no public market for the Company's membership interests.  The
Company has elected to be treated as a corporation for federal and state        
income tax purposes.  As a consequence, under current law, holders of           
membership interests in the Company will not receive annual K-1 reports or      
direct allocations of profits or losses relating to the financial results       
of the Company as they would for the typical limited liability company that     
elects to be treated as a partnership for tax purposes.  In addition, any       
distributions that may be made by the Company will be treated as dividends.     

However, the Company does not anticipate making any distributions for the       
foreseeable future.                                                             

ITEM 10. RECENT SALES OF UNREGISTERED SECURITIES                                

As of December 31, 2002, a total of 122,005 Class A Shares and        
1,613,513 Class B Shares had been issued and distributed pursuant to the        
Plan in reliance on the exemption set forth in Section 1145 of the U.S.         
Bankruptcy Code.                                                                

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ITEM 11. DESCRIPTION OF REGISTRANT'S SECURITIES TO BE REGISTERED                

GENERAL.  The LLC Agreement provides for the issuance of an unlimited 
number of membership interests in Kaanapali Land which may be denominated       
as shares.  Kaanapali Land has currently denominated two classes of common      
equity membership interests, Class A Shares and Class B Shares.  As of          
April 23, 2003, there were approximately 139,776 Class A Shares                 
outstanding, all of which were issued to various creditors of the Debtors       
under the Plan, (it is expected that approximately 19,000 additional Class      
A Shares of those that remain reserved for issuance under the Plan will be      
distributed) and there were 1,631,513 Class B Shares outstanding.  So long      
as there is a Class A Representative (as described below), any common           
shares issued to or acquired by Pacific Trail or its affiliates are issued      
as Class B Shares.  Kaanapali Land may issue additional membership              
interests in one or more classes, or one or more series of any such class,      
with such designations, preferences and relative, participating, optional       
or other special rights, powers and duties, including rights, powers and        
duties which may be senior to the Class A Shares and Class B Shares, all as     
shall be determined by Pacific Trail, including without limitation, with        
respect to (i) the rights of each class or series of shares to participate      
in distributions and (ii) the rights of each class or series of shares upon     
dissolution and liquidation of Kaanapali Land.  All Class A Shares and          
Class B Shares are fully paid and nonassessable.                                

Class A Shares and Class B Shares are identical in all respects       
(including with respect to voting and such distributions, if any, as may be     
declared by Pacific Trail as the manager, including liquidating                 
distributions) except for certain entity governance provisions in the           
Kaanapali Land Company Agreement for the benefit of the Class A Shares, as      
described below.  After the termination of the position of the Class A          
Representative, Class A Shares and Class B Shares shall become one class.       

No shareholder is entitled to any preemptive, preferential or other   
similar right with respect to additional capital contributions or loans to      
Kaanapali Land or issuance of any membership interests in Kaanapali Land,       
except as otherwise specified in the Kaanapali Land Company Agreement.  No      
shareholder is entitled to resign as a member or withdraw its capital from      
Kaanapali Land.  Each Class A Share is entitled to one vote on all matters      
on which holders of membership interests are entitled to vote generally.        
To the extent any consent, decision, approval or other right is vested          
solely in holders of Class A Shares, such consent, decision, approval or        
other right will be decided upon by holders of a majority of the Class A        
Shares issued and outstanding.                                                  

MANAGEMENT OF KAANAPALI LAND.  Pacific Trail is the manager of        
Kaanapali Land and has the exclusive power and authority under the              
Kaanapali Land Company Agreement to manage and conduct the business of          
Kaanapali Land, subject to those rights and covenants relating to the           
Class A Representative described below.  Pacific Trail is not entitled to       
receive any compensation for serving as manager of Kaanapali Land, but          
Kaanapali Land bears all of its operating and administrative expenses,          
including reimbursements to the manager for such expenses incurred by the       
manager and its affiliates in performing its services (including a share of     
salary and employment related expenses of the individuals providing these       
services).                                                                      

CLASS A REPRESENTATIVE.  Under the terms of the Kaanapali Land Company
Agreement, an institution will be appointed as the Class A Representative.      
The initial Class A Representative is American Express Tax and Business         
Services, Inc.  Kaanapali Land is required to deliver to the Class A            
Representative copies of all reports filed by Kaanapali Land with the           
Securities and Exchange Commission (including, without limitation, its          
annual and quarterly financial reports).  The Class A Representative is         
entitled to reasonable access to the books and records of Kaanapali Land        
and to an annual meeting with manager of Kaanapali Land and its executive       

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team to review the operations of Kaanapali Land.  The position of the           
Class A Representative will terminate on the earlier of the fifth               
anniversary of the effective date of the Plan (November 13, 2007) or at         
such time as the number of outstanding Class A Shares represents less than      
5% of the total number of shares of Kaanapali Land outstanding as of the        
effective date of the Plan.  All reasonable fees and expenses of the Class      
A Representative will be paid by Kaanapali Land.                                

In the event of the resignation of the Class A Representative, Pacific
Trail is required to appoint a new Class A Representative which must be         
reasonably acceptable to the resigning Class A Representative.  In the          
event of the removal of the Class A Representative, which may occur if the      
Class A Representative has dissolved or is adjudged bankrupt or insolvent,      
a receiver takes charge of the Class A Representative, or the Class A           
Representative willfully refuses to act in such capacity, PTH is required       
to promptly appoint a new Class A Representative, which appointment shall       
be effective subject to the reasonable objection of a majority of the           
Class A shareholders within 10 business days of notice of such appointment.     

COVENANTS RELATING TO CLASS A REPRESENTATIVE.  Without the consent of 
the Class A Representative, Kaanapali Land may not incur any indebtedness       
owing to the Class B shareholders or their affiliates if, immediately after     
giving effect to the incurrence of such indebtedness and the application of     
the proceeds thereof, there would be in excess of $25 million in aggregate      
principal indebtedness from the Class B shareholders or their affiliates,       
if and so long as there is a Class A Representative.  Any such indebtedness     
will bear interest at the "prime rate" as announced from time to time by        
Bank One N.A. and may be secured by property of Kaanapali Land and its          
subsidiaries.  Kaanapali Land is required to deliver a certificate to the       
Class A Representative, in connection with the delivery of the annual           
report, to the effect that all transactions entered into between Kaanapali      
Land and any of the Class B shareholders or their affiliates during that        
fiscal year are described in the annual report in all material respects         
and, except as otherwise provided in the Kaanapali Land Company Agreement       
or as provided in any contract or agreement existing prior to the date of       
the Kaanapali Land Company Agreement which has been assumed by Kaanapali        
Land pursuant to the Plan, are on terms no less favorable, at the time of       
entering into the transaction, than those which are available from              
unaffiliated third parties for similar transactions in the same                 
geographical area.                                                              

TRANSFERABILITY OF SHARES OF KAANAPALI LAND.  Class A Shares are      
freely transferable.  Ownership of Class A Shares is reflected on the           
shareholder register of Kaanapali Land as maintained by its registered          
transfer agent, Wells Fargo Bank Minnesota, N.A., Corporate Trust Services,     
Sixth and Marquette; N9303-120, Minneapolis, Minnesota 55479.  Kaanapali        
Land is under no obligation to cause the Class A Shares to be listed for        
trading on any securities exchange or quoted on any automated quotation         
system.                                                                         

Under the terms of the Kaanapali Land Company Agreement, the Class B  
shareholders may not sell or transfer any of their shares in Kaanapali          
Land, other than to their affiliates, unless such transaction provides for      
all holders of Class A Shares to have the right to sell or transfer of all      
of their Class A Shares on the same terms and conditions.  In the event of      
any sale of the Class B Shares, the Class A shareholders will be required,      
without any further vote or consent, to sell their Class A Shares in such       
transaction.                                                                    

LIMITED LIABILITY OF KAANAPALI LAND SHAREHOLDERS.  Under Delaware law 
and the Kaanapali Land Company Agreement, no shareholder of Kaanapali Land      
will be obligated personally for any debt, obligation or liability of           
Kaanapali Land solely by reason of being a member of Kaanapali Land.            

AMENDMENTS.  The Kaanapali Land Company Agreement may be amended only 
upon the approval of members holding a majority of the total of the Class A     
Shares and Class B Shares.                                                      

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ITEM 12. INDEMNIFICATION OF DIRECTORS AND OFFICER                               

Section 10.3 of the LLC Agreement provides as follows with respect to 
the indemnification of PTH, as the manager, any member of Kaanapali Land or     
the Class A Representative, and any affiliated person of any of the             
manager, any member or the Class A Representative (collectively, the            
"Covered Persons" and individually a "Covered Person"):                         

(a)   The Company shall indemnify, to the fullest extent permitted by 
   applicable law, each Covered Person and each Covered Person's
Affiliates, directors, trustees, members, managers,       
shareholders, officers, partners, controlling persons,    
  employees and agents (including any individual who serves at
 their request as director, officer, partner, trustee or the
    like of another corporation, including the Company) and/or the
  legal representatives and controlling persons of any of them
(each of the foregoing being an "Indemnitee") against any 
liabilities and expenses, including amounts paid in       
satisfaction of judgments, in compromise or as fines and  
     penalties, and counsel fees and expenses reasonably incurred by
   such Indemnitee in connection with the defense or disposition
of any action, suit or other proceeding, whether civil or 
   criminal, before any court or administrative or investigative
body, in which such Indemnitee may be or may have been    
     threatened, while acting for, or on behalf of the Company or in
     furtherance of the Company's business except to the extent (and
 only to the extent) it is established (i) by final judgment
     adverse to such Indemnitee that the actions (or failure to act)
     were (was) material to the matter giving rise to the proceeding
    and were (was) the result of active and deliberate dishonesty;
(ii) the Indemnitee actually received an improper personal
     benefit in money, property or services; or (iii) in the case of
a criminal proceeding, that such Indemnitee had reasonable
  cause to believe that the act or omission was unlawful.  Any
 indemnification made pursuant to this Section 10.3 shall be
   made only out of assets of the Company, including errors' and
omissions' insurance for such purpose.                    

The following sections of the LLC Agreement provide as follows with   
respect to the limitation of liability of the Covered Persons:                  

   SECTION 10.1  LIABILITY.  Except as otherwise provided by the
Act, the debts, obligations and liabilities of the Company, whether   
arising in contract, tort or otherwise, shall be solely the debts,    
obligations and liabilities of the Company, and no Covered Person     
shall be obligated personally for any such debt, obligation or        
liability of the Company or any other Covered Person solely by reason 
of being a Covered Person.                                            

   SECTION 10.2  DUTIES OF COVERED PERSONS; EXCULPATION.  To the
extent that, at law or in equity, a Covered Person has duties         
(including fiduciary duties) under applicable law and liabilities     
relating thereto to the Company or to any other Covered Person, a     
Covered Person acting under this Agreement shall not be liable to the 
Company or to any other Covered Person for its good faith reliance on 
the provisions of this Agreement, and in no event shall any Covered   
Person be liable to the Company or to any other Covered Person for    
any act or omission if such Covered Person acted in good faith and in 
a manner reasonably believed to be in the best interests of the       
Company or, if the Class A Representative is the Covered Person, in a 
manner reasonably believed to be in the best interests of the Class A 
Members.  The provisions of this Agreement, to the extent that they   
limit the duties and liabilities of a Covered Person otherwise        
existing at law or in equity, are agreed by the parties hereto to     
replace such other duties and liabilities of such Covered Person.     

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ITEM 13.  FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA                           

KAANAPALI LAND, LLC         

INDEX         

Report of Independent Auditors                                                  

Consolidated Balance Sheets, December 31, 2002 and 2001                         

Consolidated Statements of Operations for the years ended                       
December 31, 2002, 2001 and 2000                                            

Consolidated Statements of Stockholder's Equity (Deficit) for                   
the years ended December 31, 2002, 2001 and 2000                            

Consolidated Statements of Cash Flows for the years ended                       
December 31, 2002, 2001 and 2000                                            

Notes to Consolidated Financial Statements                                      

Schedules not filed:                                                            

All schedules have been omitted as the required information is        
inapplicable or the information is presented in the financial statements or     
related notes.                                                                  

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REPORT OF INDEPENDENT AUDITORS          

The Board of Directors and Shareholders                                         
Kaanapali Land, LLC                                                             

We have audited the accompanying consolidated balance sheets of Kaanapali       
Land, LLC (and the predecessors thereof as defined in Note 1) as of             
December 31, 2002 and 2001, and the related consolidated statements of          
operations, stockholders' equity (deficit), and cash flows for each of the      
three years in the period ended December 31, 2002.  These financial             
statements are the responsibility of the Company's management.  Our             
responsibility is to express an opinion on these financial statements based     
on our audits.                                                                  

We conducted our audits in accordance with auditing standards generally         
accepted in the United States.  Those standards require that we plan and        
perform the audit to obtain reasonable assurance about whether the              
financial statements are free of material misstatement.  An audit includes      
examining, on a test basis, evidence supporting the amounts and disclosures     
in the financial statements.  An audit also includes assessing the              
accounting principles used and significant estimates made by management, as     
well as evaluating the overall financial statement presentation.  We            
believe that our audits provide a reasonable basis for our opinion.             

In our opinion, the financial statements referred to above present fairly,      
in all material respects, the consolidated financial position of Kaanapali      
Land, LLC (and the predecessors thereof as defined in Note 1) at December       
31, 2002 and 2001, and the consolidated results of its operations and its       
cash flows for each of the three years in the period ended December 31,         
2002, in conformity with accounting principles generally accepted in the        
United States.                                                                  

                     /s/ Ernst & Young LLP

Chicago, Illinois                                                               
April 25, 2003                                                                  

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KAANAPALI LAND, LLC         

Consolidated Balance Sheets         

December 31, 2002 and 2001          
(Dollars in Thousands, except share data)         

A S S E T S         
-----------         
                               2002         2001
                               --------     --------
Cash and cash equivalents . . . . . . .      $ 15,848       19,988              
Receivables, net. . . . . . . . . . . .         1,959        2,166              
Inventories . . . . . . . . . . . . . .           159          444              
Property, net . . . . . . . . . . . . .       142,832      158,099              
Amounts due from affiliates, net. . . .            19        1,523              
Deferred costs and expenses, net. . . .           213        4,621              
Prepaid pension costs . . . . . . . . .        25,905       23,610              
Other assets. . . . . . . . . . . . . .         2,691       13,177              
                               --------     --------
                               $189,626      223,628
                               ========     ========

L I A B I L I T I E S         
---------------------         

Accounts payable and accrued expenses .      $ 10,202       16,206              
Deferred income taxes . . . . . . . . .         9,143       53,971              
Accumulated postretirement benefit                                              
obligation. . . . . . . . . . . . . .        23,560       33,118            
Other liabilities . . . . . . . . . . .        51,705       57,941              
Mortgage and other notes payable. . . .        11,248      125,032              
                               --------     --------
Total liabilities . . . . . . .       105,858      286,268      

Commitments and contingencies                                                   

Investment in unconsolidated entities,                                          
at equity . . . . . . . . . . . . . .        61,273       61,006            

S T O C K H O L D E R S'  E Q U I T Y  (D E F I C I T )         
------------------------------------------------------          

Common stock, at 12/31/02 non par value                                         
(shares authorized - 4,500,000;                                             
shares issued 1,863,213.49 and at                                           
12/31/01 $20.00 par value (shares                                           
authorized - 5,000; shares issued -                                         
3,990.9483) . . . . . . . . . . . . .         --              81            
Additional paid-in capital. . . . . . .         5,357       91,845              
Accumulated earnings (deficit). . . . .        17,138     (211,791)             
                               --------     --------
                                  22,495     (119,865)
Less:  Treasury stock (72.9459 shares                                           
at 12/31/01). . . . . . . . . . . . .         --          (3,781)           
                               --------     --------
Total stockholders' equity                                      
(deficit) . . . . . . . . . .        22,495     (123,646)   
                               --------     --------
                               $189,626      223,628
                               ========     ========

The accompanying notes are an integral part         
of the consolidated financial statements.         

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KAANAPALI LAND, LLC         

Consolidated Statements of Operations         

Years ended December 31, 2002, 2001 and 2000          
(Dollars in Thousands Except Per Share Amounts)         

                     2002       2001        2000
                     --------   --------    --------
Revenues:                                                                       
Sales . . . . . . . . . . . . .  $ 11,085     59,079      75,123            
Interest and other income . . .        27     12,162       4,124            
Extinguishment of debt. . . . .     --        10,653       --               
                     --------   --------    --------
                       11,112     81,894      79,247
                     --------   --------    --------
Cost and expenses:                                                              
Cost of sales . . . . . . . . .    (4,344)    50,796      83,593            
Selling, general and                                                        
administrative. . . . . . . .    12,505     15,652      18,265          
Interest. . . . . . . . . . . .     2,395     11,387      18,227            
Depreciation and amortization .     2,994      3,621       5,865            
Reduction to carrying value                                                 
of investments. . . . . . . .    13,717     18,109      37,853          
                     --------   --------    --------
                       27,267     99,565     163,803
                     --------   --------    --------

Operating loss. . . . . . . . . .   (16,155)   (17,671)    (84,556)             

Equity in income (loss) from                                                
unconsolidated investments. .     5,180    (12,967)      2,162          
                     --------   --------    --------
Loss from continuing operations                                             
before income taxes, discon-                                            
tinued operations and extra-                                            
ordinary gain on reorganiza-                                            
tion. . . . . . . . . . . . .   (10,975)   (30,638)    (82,394)         

Income tax benefit. . . . . . .    15,141      3,462      29,570            
                     --------   --------    --------

Income (loss) from continuing                                               
operations. . . . . . . . . .     4,166    (27,176)    (52,824)         
Income (loss) from discontinued                                             
operations, net of applicable                                           
income taxes. . . . . . . . .     --        10,094       7,117          
Extraordinary gain on                                                       
reorganization, net . . . . .   136,618      --          --             
                     --------   --------    --------
Net income (loss) . . . .  $140,784    (17,082)    (45,707)     
                     ========   ========    ========

Earnings per share:                                                             
Income (loss) from continuing                                               
operations. . . . . . . . . .     (a)       (6,794)    (13,206)         
                     ========   ========    ========
Net income (loss) . . . . . . .     (a)       (4,270)    (11,427)           
                     ========   ========    ========

(a)  The income from continuing operations per share and the net income   
per share for the period prior to the Plan Effective Date is $3,235 and         
$37,389, respectively.  The loss from continuing operations per share and       
the net loss per share for the period after the Plan Effective Date is $5       
and $5, respectively.                                                           

The accompanying notes are an integral part         
of the consolidated financial statements.         

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                                             KAANAPALI LAND, LLC                                    

                          Consolidated Statements of Stockholders' Equity (Deficit)                 

                                Years ended December 31, 2002, 2001 and 2000                        
                                           (Dollars in Thousands)                                   


                                                                                            Total   
                                                                                            Stock-  
                                                Additional      Accumu-                     holders'
                                   Common        Paid-In        lated           Treasury    Equity  
                                   Stock         Capital        Deficit          Stock     (Deficit)
                                  --------      ---------       --------        --------   -------- 
                                                                                                    

Balance at January 1, 2000.       $     81         91,845       (118,722)         (3,781)   (30,577)

Net loss. . . . . . . . . .            --           --           (45,707)          --       (45,707)

Spinoff of subsidiary . . .            --           --             4,350           --         4,350 
                                  --------       --------       --------        --------   -------- 

Balance at December 31, 2000            81         91,845       (160,079)         (3,781)   (71,934)

Net loss. . . . . . . . . .            --           --           (17,082)          --       (17,082)

Distribution of uncon-                                                                              
  solidated investment. . .            --           --              (312)          --          (312)

Spinoff of subsidiary . . .            --           --           (34,318)          --       (34,318)
                                  --------       --------       --------        --------   -------- 
Balance at December 31, 2001            81         91,845       (211,791)         (3,781)  (123,646)

Net income. . . . . . . . .            --           --           140,784           --       140,784 

Effect of reorganization. .            (81)       (86,488)        88,145           3,781      5,357 
                                  --------       --------       --------        --------   -------- 

Balance at December 31, 2002      $    --           5,357         17,138           --        22,495 
                                  ========       ========       ========        ========   ======== 

<fn>                                                                                                
                                 The accompanying notes are an integral part                        
                                  of the consolidated financial statements.                         

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KAANAPALI LAND, LLC         

Consolidated Statements of Cash Flows         

Years ended December 31, 2002, 2001 and 2000          
(Dollars in Thousands)          

                      2002       2001       2000
                      --------   --------   --------
Cash flows from operating                                                       
activities:                                                                   
Net income (loss) . . . . . . .   $140,784    (17,082)   (45,707)           
Adjustments to reconcile net                                                
income (loss) to net cash                                                 
provided by (used in) continuing                                          
operations:                                                               
Income from discontinued                                                
operations, net . . . . . .      --       (10,094)    (7,117)       
Extraordinary gain on                                                   
reorganization, net . . . .   (136,618)     --         --           
Restructuring costs . . . . .     (3,042)     --         --             
Depreciation and amortization      2,994      3,621      5,865          
Equity in loss (income) from                                            
unconsolidated investments.     (5,180)    12,967     (2,162)       
Reduction to carrying value                                             
of investments. . . . . . .     13,717     18,109     37,853        
Interest deferred on long-term                                          
debt. . . . . . . . . . . .      --          (167)       165        
Extinguishment of debt. . . .      --       (10,717)     --             
Changes in operating assets and                                             
liabilities:                                                              
Receivables, net. . . . . . .        207        568      2,232          
Inventories . . . . . . . . .        285     (1,249)    13,743          
Accounts payable, accrued                                               
expenses and other. . . . .     (9,947)    18,719     17,039        
Deferred income taxes . . . .    (15,141)    (3,462)   (26,299)         
                      --------   --------   --------

Net cash provided by (used in)                                                  
continuing operating activities    (11,941)    11,213     (4,388)           
Net cash provided by discon-                                                    
tinued operating activities . .      --         --        27,538            
                      --------   --------   --------
Net cash provided by (used in)                                                  
operating activities. . . . . .    (11,941)    11,213     23,150            

Cash flows from investing activities:                                           
Property additions. . . . . . .       (178)      (532)    (3,023)           
Property additions, discontinued                                            
operations. . . . . . . . . .      --         --        (5,629)         
Property sales, disposals and                                               
retirements, net. . . . . . .        457      3,191      1,061          
Property sales, disposals, net,                                             
discontinued operations . . .      --         --           188          
Deferred contract cost additions,                                           
discontinued operations . . .      --         --        (4,817)         
Distributions from investments                                              
in unconsolidated entities,                                             
at equity . . . . . . . . . .     10,475        381        215          
                      --------   --------   --------
Net cash provided by (used in)                                                  
investing activities. . . . . .     10,754      3,040    (12,005)           

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KAANAPALI LAND, LLC         

Consolidated Statements of Cash Flows - Continued         

                      2002       2001       2000
                      --------   --------   --------

Cash flows from financing activities:                                           
Loan proceeds . . . . . . . . .      --         8,500      --               
Net repayments of debt. . . . .       (103)   (19,027)      (261)           
Net repayments of debt,                                                     
discontinued operations . . .      --         --       (11,800)         
Amounts due to affiliates . . .                 --         --               
Loan acquisition costs. . . . .      --           (23)       (35)           
Settlement payments pursuant                                                
to the Plan . . . . . . . . .     (2,850)     --         --             
                      --------   --------   --------
Net cash provided by                                            
(used in) financing                                         
activities. . . . . . .     (2,953)   (10,550)   (12,096)   
                      --------   --------   --------
Net increase (decrease) in                                      
cash and cash equivalents   (4,140)     3,703       (951)   
Cash and cash equivalents                                       
at beginning of year. .     19,988     16,285     17,236    
                      --------   --------   --------
Cash and cash equivalents                                       
at end of year. . . . .   $ 15,848     19,988     16,285    
                      ========   ========   ========

Supplemental disclosure of                                                      
cash flow information:                                                        
Cash paid for interest from                                                 
continuing operations . . . .   $    916      7,083     12,826          
Cash paid for interest from                                                 
discontinued operations . . .      --        --         11,222          
                      --------   --------   --------
                      $    916      7,083     24,048
                      ========   ========   ========

Cash received (paid)                                                        
for income taxes. . . . . . .   $      8      --           144          
                      ========   ========   ========

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KAANAPALI LAND, LLC         

Consolidated Statements of Cash Flows - Continued         

                      2002       2001       2000
                      --------   --------   --------

Activity due to spinoff of                                                      
subsidiary:                                                                   
Reduction in current assets . .   $  --         --          (728)           
Reduction in property, plant                                                
and equipment . . . . . . . .      --         --       (45,557)         
Reduction in current liabilities     --         --         1,952            
Reduction in debt in default. .      --         --        75,322            
Reduction in deferred tax                                                   
liability . . . . . . . . . .      --         --        14,876          
Reduction in other assets/                                                  
liabilities . . . . . . . . .      --         --           421          
Establishment of investment in                                              
unconsolidated entity,                                                  
at equity . . . . . . . . . .      --         --       (41,936)         
                      --------   --------   --------

Net contribution due to spinoff .   $  --         --         4,350              
                      ========   ========   ========

Extraordinary gain on reorganization:                                           
Reduction in other notes                                                    
payable - COLAs . . . . . . .   $111,195      --         --             
Reduction in deferred taxes . .     29,688      --         --               
Reduction in accrued expenses .      3,059      --         --               
Reduction in other assets/                                                  
liabilities . . . . . . . . .      1,075      --         --             
Payments of restructuring costs     (3,042)     --         --               
Additional paid in capital -                                                
stock issuance. . . . . . . .     (5,357)     --         --             
                      --------   --------   --------
Extraordinary gain on                                                       
reorganization. . . . . . . .   $136,618      --         --             
                      ========   ========   ========

The accompanying notes are an integral part         
of the consolidated financial statements.         

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KAANAPALI LAND, LLC         

Notes to Consolidated Financial Statements          

(Dollars in Thousands)          

(1)  SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES                                 

ORGANIZATION AND BASIS OF ACCOUNTING                                  

Kaanapali Land, LLC ("Kaanapali Land"), a Delaware limited liability  
company is the reorganized entity resulting from the Joint Plan of              
Reorganization of Amfac Hawaii, LLC ("AHI"), Certain of Its Subsidiaries        
(together with AHI, the "AHI Debtors") and FHT Corporation (FHTC and,           
together with the AHI Debtors, the "Debtors") under Chapter 11 of the           
Bankruptcy Code, dated June 11, 2002 (as amended, the "Plan").  As              
indicated in the Plan, Kaanapali Land has elected to be taxable as a            
corporation.  The Debtors had filed their petition for reorganization under     
Chapter 11 on February 27, 2002 (the "Petition Date") in the United States      
Bankruptcy Court for the Northern District of Illinois, Eastern Division        
(the "Bankruptcy Court") which petitions were consolidated into a single        
joint proceeding by the Bankruptcy Court (the "Reorganization Case").           

The principal goal of the Plan was to address the Debtors' debt       
burdens so that the Debtors could emerge from Chapter 11 with a viable          
capital structure and with the resources necessary to operate their             
businesses and improve the value of their land holdings.  The Plan achieved     
this goal by converting certain indebtedness and other liabilities of the       
Debtors into new equity of Kaanapali Land (to the extent such creditors did     
not elect an available cash distribution option).  Another goal of the Plan     
was to secure additional liquidity for the Debtors to help fund future          
operations.  The Plan achieved this goal through the Merger of FHTC with        
Northbrook Corporation ("Northbrook"), which made the assets and liquidity      
of Northbrook available to the Debtors to help fund their land development      
business.  FHTC was the surviving entity in such merger, and shortly            
thereafter was in turn merged into Kaanapali Land pursuant to the Plan.         

The Plan was confirmed by the Bankruptcy Court by orders dated        
July 29, 2002 and October 30, 2002 (collectively, the "Order") and became       
effective November 13, 2002 (the "Plan Effective Date").  Kaanapali Land        
continues to work toward completion of the various requirements of the Plan     
and to implement the restructuring transactions that are contemplated to be     
effected under the Plan, including, among other things, the resolution of       
all outstanding claims and distributions on all claims that are allowed         
under the Plan.                                                                 

In accordance with the Plan, approximately 1,863,000 shares of        
Kaanapali Land were issued during 2002.  The assets and liabilities of          
Kaanapali Land are essentially the same as those of Northbrook and its          
subsidiaries and, thus, Northbrook is considered to be the predecessor          
entity of Kaanapali Land for 2000, 2001, and the portion of 2002 prior to       
the Plan Effective Date.  As greater than 85% of the shareholders in            
Kaanapali Land were shareholders or affiliates of shareholders in               
Northbrook, the assets and liabilities of Kaanapali Land were recorded at       
the historical carry-over basis of Northbrook.                                  

The accompanying consolidated financial statements include the        
accounts of Kaanapali Land and all of its subsidiaries and its predecessor      
(collectively, the "Company"), which include AHI and its wholly-owned           
subsidiaries.  All significant intercompany transactions and balances have      
been eliminated in consolidation.  Discontinued operations represent the        
resorts business (collectively "Resorts") and include Xanterra Parks &          
Resorts, L.L.C. and its wholly-owned subsidiaries, Xanterra, Inc. and its       
wholly-owned subsidiary Xanterra Parks & Resorts, Inc. (See Note 9).  The       
Resorts entities were spun-off by Northbrook to its sole shareholder on         
December 31, 2001.                                                              

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The Company's continuing operations are in three business segments    
agriculture, property and golf.  The Golf segment includes that of Amfac        
Property Investment Corp. ("APIC"), an equity investee.  Though APIC            
continues to own the Royal Kaanapali Golf Courses, a receiver was appointed     
to operate them on March 19, 2002 and it is anticipated that APIC will no       
longer have title to such golf courses after consummation of the settlement     
with the Employees' Retirement System of the State of Hawaii ("ERS"), as        
described in Note 3.  The Agriculture segment grew and processed sugar cane     
(prior to the shutdown of its remaining sugar operations in November, 2000)     
and grew, processed and marketed coffee (prior to the shutdown of               
operations in September 2001) and continues to grow seed corn under             
contract.  The Property segment primarily develops land for sale and            
negotiates bulk sales of undeveloped land.  The Golf segment is responsible     
for the management and operation of the Waikele Golf Course.  The Property,     
Agriculture and Golf segments operate exclusively in the State of Hawaii.       
For further information on the Company's business segments see Note 10.         

STATEMENT OF CASH FLOWS                                               

The Company considers as cash equivalents all amounts of U.S.         
government obligations and certificates of deposit held with maturities of      
three months or less when purchased and all money market funds.                 

FAIR VALUE OF FINANCIAL INSTRUMENTS                                   

Statement of Financial Accounting Standards No. 107 ("SFAS No. 107"), 
"Disclosures about Fair Value of Financial Instruments", requires entities      
to disclose the SFAS No. 107 value of certain on and off balance sheet          
financial instruments for which it is practicable to estimate. Value is         
defined in SFAS No. 107 as the amount at which the instrument could be          
exchanged in a current transaction between willing parties, other than in a     
forced or liquidation sale. Except as noted below, the Company believes the     
carrying amounts of its financial instruments on its balance sheet              
approximate SFAS No. 107 value due to the relatively short maturity of          
these instruments. Except for the Certificates of Land Appreciation Notes       
("COLAs") (which were discharged by the Bankruptcy Court on the Effective       
Date), the Company believes the carrying value of its debt (see Note 3)         
approximates fair value.                                                        

INVENTORY CAPITALIZATION                                              

The Company capitalizes all of the expenditures incurred in bringing  
crops to their existing condition and location.  Inventory reflected in the     
accompanying consolidated balance sheets at December 31, 2002 and 2001 is       
not in excess of its estimated net realizable value.                            

RECEIVABLES                                                           

The allowance for doubtful receivables was $452 and $454 at           
December 31, 2002 and 2001, respectively.                                       

INVESTMENTS                                                           

Investments in certain partnerships and related entities over which   
the Company exercises significant influence are accounted for by the equity     
method.  To the extent any subsidiary of Kaanapali Land engages in such         
activities as general partner, such subsidiary may be contingently liable       
for the obligations of its partnership and joint venture investments.           

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LAND DEVELOPMENT                                                      

Project costs associated with the acquisition, development and        
construction of real estate projects are capitalized and classified as          
Property.  Such capitalized costs are not in excess of the projects'            
estimated fair value as reviewed periodically or as considered necessary.       
In addition, interest is capitalized to qualifying assets during the period     
that such assets are undergoing activities necessary to prepare them for        
their intended use.  No interest has been capitalized for the periods           
presented.                                                                      

RECOGNITION OF PROFIT FROM REAL PROPERTY SALES                        

For real property sales, profit is recognized in full when the        
collectibility of the sales price is reasonably assured and the earnings        
process is virtually complete.  When the sale does not meet the                 
requirements for full profit recognition, a portion of the profit is            
deferred until such requirements are met.                                       

PROPERTY                                                              

Property is stated at cost.  Depreciation is based on the straight-   
line method over the estimated economic lives of 20-40 years for land           
improvements, 3-18 years for machinery and equipment, or the lease term if      
less.  Maintenance and repairs are charged to operations as incurred.           
Significant betterments and improvements are capitalized and depreciated        
over their estimated useful lives.                                              

In 2002, 2001 and 2000, the Company recognized impairment losses of   
$13,717, $18,109 and $37,853.  The 2002 impairment loss was primarily to        
reduce the carrying value of certain land parcels that are not considered       
to be part of future development plans.  The 2001 impairment loss               
represented $13,725 to reduce the carrying value of certain land parcels        
and $4,384 related to assets used in the agricultural operations.  The 2000     
impairment loss represented $15,853 to reduce the carrying value of certain     
land parcels and $22,000 related to assets used in the agricultural             
operations.                                                                     

Provisions for impairment losses related to long-lived assets, if any,
are recognized when expected future cash flows are less than the carrying       
values of the assets.  If indicators of impairment are present, the Company     
evaluates the carrying value of the related long-lived assets in                
relationship to the future undiscounted cash flows of the underlying            
operations or anticipated sales proceeds.  The Company adjusts the net book     
value of property to fair value if the sum of the expected future cash flow     
or sales proceeds is less than book value.                                      

                                 2002         2001
                                 --------     --------
Property, net:                                                              
Land and land improvements. . . . . .     $130,479      138,410         
Buildings . . . . . . . . . . . . . .       21,586       26,703         
Machinery and equipment . . . . . . .       25,929       26,717         
                                 --------     --------
                                  177,994      191,830
Accumulated depreciation. . . . . . .      (35,162)     (33,731)        
                                 --------     --------
Property, net . . . . . . . . . . . .     $142,832      158,099         
                                 ========     ========

Land held for sale of approximately $11,000 and $4,900 is included in 
Property in the consolidated balance sheets at December 31, 2002 and 2001       
and is carried at the lower of cost or fair value less cost to sell.            

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DEFERRED COSTS AND EXPENSES                                           

Deferred costs and expenses consist primarily of financing costs      
related to various debt instruments.  Such costs are being amortized on an      
effective interest or a straight-line basis over the terms of the related       
debt and the contracts.                                                         

Accumulated amortization was $27 and $836 at December 31, 2002 and    
2001, respectively.                                                             

OTHER LIABILITIES                                                     

Other liabilities includes project completion costs on land sold in   
prior years, reserves for losses on divested segments, reserves for             
workmen's compensation and general liability claims, and reserves for           
commitments and contingencies as discussed in Note 8, including potential       
tax liabilities.                                                                

USE OF ESTIMATES                                                      

The preparation of financial statements in conformity with accounting 
principles generally accepted in the United States requires management to       
make estimates and assumptions that affect the amounts reported in the          
financial statements and accompanying notes.  Actual results could differ       
from those estimates.                                                           

IMPACT OF RECENTLY ISSUED ACCOUNTING STANDARDS                        

In October 2001, the Financial Accounting Standards Board (FASB)      
issued Statement No. 144, Accounting for the Impairment or Disposal of          
Long-Lived Assets (FASB Statement No. 144) which supersedes FASB Statement      
No. 121, Accounting for the Impairment of Long-Lived Assets and for Long-       
Lived Assets to Be Disposed Of.  FASB Statement No. 144 provides more           
guidance on estimating cash flows when performing a recoverability test,        
requires that a long-lived asset to be disposed of other than by sale (e.g.     
abandoned) be classified as "held and used" until it is disposed of, and        
establishes more restrictive criteria to classify an asset as "held for         
sale".  The Company has presented separately as discontinued operations in      
all periods the results of operations for all assets disposed of on or          
after January 1, 2002 (the date of adoption of SFAS No. 144) and for all        
assets classified as real estate held for disposition as of December 31,        
2002.  In addition, discontinued operations in accordance with APB 30 for       
2001 and 2000 have been classified as discontinued operations in the            
accompanying consolidated statements of operations.                             

In April 2002, the FASB issued Statement No. 145 which, among other   
things, rescinds the requirement that gains and losses on extinguishments       
of debt be classified as extraordinary items.  The Company adopted              
Statement No. 145 effective January 1, 2002, which requires                     
reclassifications of prior extraordinary gains on extinguishment of debt.       

RECLASSIFICATIONS                                                     

Certain amounts in the 2001 and 2000 consolidated financial statements
have been reclassified to conform to the 2002 presentation.                     

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(2)  INVESTMENTS                                                                

The Company's investments in unconsolidated entities at December 31,  
2002 and 2001 consist of the following:                                         

        Ownership Percentage      Carrying Value
           --------------------   --------------------
Description                2002       2001       2002        2001               
-----------              --------   --------   --------    --------             
Amfac Finance Limited                                                           
Partnership (including                                                        
its 83.33% investment                                                         
in APIC) . . . . . .          0%      85.38%  $(49,521)    (49,837)           
Amfac Property Invest-                                                          
ment Corp. . . . . .      16.67%      16.67%   (11,752)    (11,168)           
Real estate partner-                                                            
ships. . . . . . . .                Various       --            (1)           
                                  --------    --------
                                   $(61,273)    (61,006)
                                  ========    ========

The Company does not control Amfac Finance Limited Partnership        
("AFLP") and, accordingly, AFLP is accounted for on the equity method.  All     
intercompany amounts have been eliminated in the accompanying consolidated      
financial statements.                                                           

Effective December 28, 2000, AF Investors, LLC ("AF Investors"), a    
subsidiary of AFLP, made a capital contribution to APIC in return for           
83.33% of the shares of APIC.  Immediately prior to AF Investors' capital       
contribution, APIC was a wholly-owned subsidiary of AHI.  The $4,350            
increase in consolidated stockholders' equity as of December 31, 2000,          
represents the net deficit of APIC that has been allocated to that portion      
of APIC no longer attributable to the Company's ownership interests.  APIC      
owns and operates the Royal Kaanapali Golf Courses ("RKGC").  The net           
losses related to the golf course operations (including related interest        
charges) of $2,332 for the year ended December 31, 2000 is included in the      
net loss in the consolidated statements of operations.  In 2001, AFLP           
redeemed an approximately 4% limited partnership interest held by the           
Company in exchange for distribution of a portion of debt from a                
consolidated subsidiary of the Company.                                         

In 2002 and 2001, the ownership interest in APIC's operations is      
reflected on the equity method of accounting.  The accompanying 2002 and        
2001 consolidated statement of operations reflects a net after-tax loss of      
$3,068 and $18,582, respectively, representing the Company's share of the       
net losses related to the golf course operations (including related             
interest charges) and the impairment loss recorded by APIC in 2001 to           
adjust the carrying value of the golf courses to their estimated market         
value.  As of December 31, 2001, AF Investors was a 99.52% owned subsidiary     
of Amfac Finance and Amfac Finance was 85.38% owned by Northbrook which         
held a limited partnership interest therein.                                    

In December 2002, AFLP redeemed the interest held by Kaanapali Land   
(as successor to Northbrook) for approximately $60.  Kaanapali Land however     
remains obligated under certain circumstances to fund costs related to,         
among other things, golf course improvements required under the settlement      
agreement with the ERS described below.  These funding obligations are          
currently estimated to be approximately $1,300, of which a portion is           
anticipated to be reimbursed by AFLP under the Funding Agreement entered        
into by Kaanapali Land, AFLP and certain other affiliated entities in           
October 2002.  The Company continues to record its investment in                
unconsolidated entities due to its potential funding obligations and            
because the Company is awaiting final consumption of the ERS settlement         
agreement, which is subject to court approval.  Upon resolution of these        
matters, the Company expects to record a gain on disposition of its             
investment for financial reporting purposes to the extent of its investment     
in unconsolidated entities.                                                     

See Footnote 8 for additional discussion.                             

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In addition, equity in income (loss) from unconsolidated investments  
includes the gain from the 2002 sale of an interest in a hotel and the          
Company's share of the results of operations of the hotel prior to the sale     
of the Company's interest.                                                      

(3)  MORTGAGE AND OTHER NOTES PAYABLE                                           

Each component of the Company's mortgage and other notes payable was  
entered into by the separate operating subsidiaries of the Company and          
generally places certain specified restrictions on the transfer of an           
individual subsidiary's assets, as well as on the use of proceeds generated     
from operations and the sales of such assets.                                   

A summary and description of the Company's mortgage and other notes   
payable as of December 31, 2002 and 2001 is as follows:                         

                                 2002         2001
                                 --------     --------
COLAs (A) . . . . . . . . . . . .     $   --        113,682     
Waikele Golf Course (B) . . . . .        8,398        8,500     
Oahu Sugar mill site (C). . . . .        2,850        2,850     
                                 --------     --------
                                 $ 11,248      125,032
                                 ========     ========

(A)   The COLA's and the Senior Indebtedness referred to below were   
discharged as to the Debtors and restructured effective on the Plan             
Effective Date pursuant to the emergence of the Debtors from bankruptcy in      
2002 and the restructuring transactions contemplated by the Plan.  Such         
restructuring caused the remaining unsatisfied COLA indebtedness to be          
assigned to Kaanapali Land and entitled the previous holders thereof as of      
the distribution record date under the Plan who made timely cash elections      
under the Plan to receive cash in the amount of $35 per $500 principal          
amount of COLAs.  All other holders of COLAs as of the distribution record      
date under the Plan are entitled to receive 1 Class A Share of Kaanapali        
Land per $500 principal amount of COLAs in conversion of their COLAs.  It       
is expected that the restructuring of the COLAs under the Plan will             
ultimately result in distributions of cash respecting approximately 25.5%       
of the COLAs, anticipated to total approximately $2.49 million with the         
remainder converted into Class A Shares of Kaanapali Land (or Class B           
Shares of Kaanapali Land as described below).  Although a significant           
portion of such distributions were made in 2002, they are not anticipated       
to be substantially completed until the fourth quarter of 2004 and the          
Company accrued approximately $700 related to such amounts as of December       
31, 2002.  All of the Senior Indebtedness, COLA note claims and claims held     
by entities and individuals affiliated with the Company against the Debtors     
were converted into Class B shares of Kaanapali Land.                           

The COLAs were unsecured debt obligations of AHI, and were            
subordinated in priority to all "Senior Indebtedness" (as defined in the        
Indenture governing the COLAs).   Senior Debt payable to Northbrook and its     
affiliates (including deferred interest) totaled approximately $188,000 and     
$186,108 at the Petition Date and December 31, 2001, respectively, and has      
been eliminated in the accompanying consolidated financial statements.  The     
COLAs were issued in 1989, were scheduled to mature on December 31, 2008,       
and bore interest payable semiannually at 10% per annum ("Base Interest")       
of the outstanding principal balance on a cumulative, non-compounded basis,     
of which 6% per annum is contingent ("Contingent Base Interest") and            
payable, only to the extent of Net Cash Flow or Maturity Market Value (as       
defined in the Indenture).  AHI did not generate a sufficient level of Net      
Cash Flow to pay Contingent Base Interest on the COLAs from 1990 through        
the Petition Date, and any remaining obligation to do so was discharged on      
the Plan Effective Date.  Therefore, no cumulative deferred Contingent Base     
Interest related to the period from August 31, 1989 (Final Issuance Date)       
through the Petition Date has been paid or accrued in the accompanying          
consolidated financial statements.                                              

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For financial reporting purposes, interest had been accrued on the    
COLAs using the effective interest method.  Accordingly, the consolidated       
financial statements include Base Interest at 4% per annum ("Mandatory Base     
Interest") for the period January 1, 2002 to the Petition Date and the year     
ended December 31, 2001.  No interest was accrued after the Petition Date       
in accordance with the Plan.  Pursuant to the Plan, the COLAs were              
discharged as to the Debtors and restructured effective as of the Plan          
Effective Date in return for the distributions mentioned in item (A) above.     

(B)   The Waikele Golf Course debt, secured by the Waikele Golf       
Course, had an original principal balance of $8,500, an interest rate of        
LIBOR plus 3.75%, principal amortization based on a 25-year amortization        
schedule and a maturity date of December 1, 2006.  The loan has certain         
cash flow and other financial covenants.                                        

(C)   In December 1996, Oahu MS, a wholly-owned subsidiary of         
Kaanapali Land, obtained a $10,000 loan facility from City Bank.  The loan,     
which had been extended through December 1, 2000 with certain                   
modifications, is secured by a mortgage on certain property at the Oahu         
Sugar mill-site (the sugar plantation was closed in 1995).  Such extended       
loan bore interest at the bank's base rate plus 1.25%.  In January 2001,        
Oahu MS reached an agreement with the Bank for an extension until               
December 1, 2001 with a principal payment of $150 upon execution of the         
agreement leaving a remaining outstanding principal balance of $2,850.  On      
December 1, 2001, Oahu MS reached an agreement with the bank for an             
additional extension until March 1, 2002.  On June 28, 2002, City Bank and      
Oahu MS entered into an agreement extending the loan for an additional nine     
months to December 1, 2002 at City Bank's base rate plus 2%.  On the            
maturity date, Oahu MS did not pay the balance due.  On January 2, 2003,        
City Bank filed a complaint for foreclosure.  In January 2003, Oahu MS and      
City Bank commenced settlement discussions and the parties subsequently         
reached a tentative agreement involving extension of the maturity date of       
the loan.  City Bank terminated negotiations regarding the form of the Loan     
Modification and Extension Agreement on March 10, 2003.  Oahu MS does not       
have the funds necessary to pay the remaining balance of the loan without       
sale of the remaining mill site land.  If such loan cannot be further           
extended, it would likely result in Oahu MS no longer having an ownership       
interest in the property.  The outstanding balance has been reflected as        
maturing in 2003 in the schedule of annual principal payments.  The net         
book value of the mill site land securing the loan is less than the             
outstanding balance of the indebtedness.                                        

Scheduled annual principal maturities on the Company's mortgage and   
other notes payable are as follows:                                             

2003 . . . . . . $ 2,959                      
2004 . . . . . .     119                      
2005 . . . . . .     129                      
2006 . . . . . .   8,041                      
2007 . . . . . .   --                         
Thereafter . . .   --                         
-------     
Total. . . . . . $11,248                      
=======     

(4)  RENTAL ARRANGEMENTS                                                        

The Company has rented, as lessee, various land, facilities and       
equipment under operating leases. Most land leases provided for renewal         
options and minimum rentals plus contingent payments based on revenues or       
profits. Included as rent expense in selling, general and administrative        
expense are minimum rentals and contingent payments for operating leases in     
the following amounts:                                                          

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                             2002     2001      2000
                            -------   -------  -------

Minimum and fixed rents . . . . . .  $ 1,381     1,475    1,723         
Contingent payments . . . . . . . .      124       559    1,163         
Property taxes, insurance                                               
and other charges . . . . . . . .      655       669    1,182       
                            -------   -------  -------
                            $ 2,160     2,703    4,068
                            =======   =======  =======

Future minimum lease payments under noncancelable operating leases              
aggregate approximately $351 and are due as follows: $196, $139 and $16 for     
2003, 2004 and 2005, respectively.  Certain leases where Debtors were the       
lessee were rejected pursuant to the Plan, which reduced any pre-Petition       
Date and prospective liability of the Company for them to claims that were      
allowed under the Plan, if entitled to distributions of cash or Class A         
Shares of Kaanapali Land as provided in the Plan.                               

(5)  EMPLOYEE BENEFIT PLANS                                                     

(a)  PENSION PLANS                                                    

As of December 31, 2002, the Company participates in a defined benefit
pension plan that covers substantially all its eligible employees.  The         
Plan is sponsored and maintained by Kaanapali Land in conjunction with          
other plans providing benefits to employees of Kaanapali Land and its           
affiliates.  The Pension Plan for Bargaining Unit Employees of Amfac            
Plantations (the "Pension Plan") provides benefits based primarily on           
length of service and career-average compensation levels.  Accordingly,         
there is no difference between the accumulated benefit obligation and the       
projected benefit obligation.  Kaanapali Land's policy is to fund pension       
costs in accordance with the minimum funding requirements under provisions      
of the Employee Retirement Income Security Act ("ERISA").  Under such           
guidelines, amounts funded may be more or less than the pension expense or      
credit recognized for financial reporting purposes.                             

The following tables summarize the components of the funded status of 
the Company's defined benefit pension plan at December 31, 2002 and 2001,       
the net pension credit for 2002, 2001 and 2000, and major assumptions used      
to determine these amounts.                                                     

                                      2002    2001
                                      -------  -------

Benefit obligation at beginning of year . . . .  $37,762   40,182           
Service cost. . . . . . . . . . . . . . . . . .       49      128           
Interest cost . . . . . . . . . . . . . . . . .    3,041    2,897           
Actuarial loss. . . . . . . . . . . . . . . . .    6,112    2,328           
Benefits paid . . . . . . . . . . . . . . . . .   (4,233)  (7,773)          
                                      -------  -------

Benefit obligation at end of year . . . . . . .   42,731   37,762           
                                      -------  -------

Fair value of plan assets at beginning of year.   74,687   83,107           
Actual return on plan assets. . . . . . . . . .   (8,986)     455           
Benefits paid . . . . . . . . . . . . . . . . .   (5,186)  (8,875)          
                                      -------  -------
Fair value of plan assets at end of year. . . .   60,515   74,687           
                                      -------  -------

Funded status . . . . . . . . . . . . . . . . .   17,784   36,925           
Unrecognized net actuarial (gain) loss. . . . .    8,121  (13,304)          
Unrecognized prior service cost . . . . . . . .    --         (11)          
                                      -------  -------

Prepaid pension cost. . . . . . . . . . . . . .  $25,905   23,610           
                                      =======  =======

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Unrecognized net gains or losses are amortized over a ten year period.

At December 31, 2002, approximately 73% of the plan's assets are invested       
in equity securities, 10% in an annuity contract, and 17% in fixed income       
funds.                                                                          

The components of the net periodic pension benefit (credit) for the   
years ended December 31, 2002, 2001 and 2000 (which are reflected as other      
income in the consolidated statements of operations) are as follows:            

                             2002      2001     2000
                            -------   -------  -------

Service cost. . . . . . . . . . . . .  $    49       128      367           
Interest cost . . . . . . . . . . . .    3,041     2,897    2,864           
Expected return on plan assets. . . .   (5,462)   (5,753)  (5,855)          
Recognized net actuarial gain . . . .     (865)   (1,787)  (1,513)          
Amortization of prior service cost. .      (11)      (52)     (52)          
Special termination benefit . . . . .      953     1,102    7,227           
                            -------   -------  -------

Net periodic pension benefit (credit)  $(2,295)   (3,465)   3,038           
                            =======   =======  =======

Benefit plan assumptions:                                                       
Discount rate . . . . . . . . . . . .     7.0%      7.5%     7.5%           
                            =======   =======  =======
Expected long-term rate of return                                           
on assets . . . . . . . . . . . . .     7.5%      7.5%     7.5%         
                            =======   =======  =======

A comparison of the market value of the Pension Plan's net assets with
the present value of the benefit obligations indicates the Company's            
ability at a point in time to pay future benefits.  The fair value of the       
Pension Plan's assets available for benefits will fluctuate and certain         
future obligations of the Pension Plan may be subject to bargaining unit        
agreements.                                                                     

(b)  RETIREE HEALTH AND LIFE INSURANCE BENEFITS                       

In addition to providing pension benefits, AHI and certain of its     
affiliates currently provide certain healthcare and life insurance benefits     
to certain eligible retired employees.  Where such benefits are offered,        
substantially all employees may become eligible for such benefits if they       
reach a specified retirement age while employed by AHI (or the applicable       
affiliate) and if they meet a certain length of service criteria. The           
postretirement healthcare plan is contributory and contains cost-sharing        
features such as deductibles and copayments.  However, these features, as       
they apply to bargaining unit retirees, are subject to collective               
bargaining provisions of a labor contract between each such entity and the      
International Longshoremen's & Warehousemen's Union as they may have been       
amended or settled through agreements or memoranda executed with the union      
at about the time each operating facility was closed.  The postretirement       
life insurance plan is non-contributory.                                        

Each relevant entity continues to fund benefit costs for both plans on
a pay-as-you-go basis, and each entity expects to continue funding its          
post-retirement health care obligations until the end of 2004, which is a       
date on or after the date when its legal "Maintenance of Effort" obligation     
relative to the health care portion expires.  These entities believe that       
they generally have no obligation to continue the post-retirement life          
insurance benefits, and most intend to terminate such benefits effective at     
the end of 2003.                                                                

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For measuring the expected postretirement benefit obligation, an 11%  
annual rate of increase in the per capita claims cost was assumed through       
2004. The healthcare cost trend rate assumption has a significant effect on     
the amount of the obligation and periodic cost reported. An increase and        
(decrease) in the assumed healthcare trend rate by 1% in 2002 would             
increase and (decrease) the medical plans' accumulated postretirement           
benefit obligation as of December 31, 2002 by $299 and $(255),                  
respectively, and the aggregate of the service and interest cost components     
of net periodic postretirement benefit cost for the year then ended by $16      
and $(14), respectively.                                                        

Net periodic postretirement benefit cost (credit) for 2002, 2001 and    
2000 (which is primarily reflected in agricultural cost of sales on the         
consolidated statements of operations) includes the following components:       

                        2002       2001       2000
                         Total      Total      Total
                         -------    -------    -------

Service cost. . . . . . . . . . . .   $     1         34        277             
Interest cost . . . . . . . . . . .       622        887      1,698             
Amortization of net (gain) loss . .    (7,879)    (6,327)    (2,421)            
Recognized curtailment (gain) loss.      (233)      (859)    (3,965)            
                         -------    -------    -------
Net periodic postretirement                                                     
benefit cost (credit) . . . . . .   $(7,489)    (6,265)    (4,411)          
                         =======    =======    =======

The following table sets forth the plans' change in benefit           
obligation and benefit cost as of December 31, 2002 and 2001 as follows:        

                           December 31,   December 31,
                           2002           2001
                           ------------   ------------

Benefit obligation at beginning of year      $ 9,615         13,006             
Service cost. . . . . . . . . . . . .              1             34             
Interest cost . . . . . . . . . . . .            622            887             
Actuarial losses. . . . . . . . . . .            746            304             
Employer contribution . . . . . . . .         (2,075)        (2,191)            
Curtailment . . . . . . . . . . . . .             (9)        (2,381)            
Maintenance of Effort obligation. . .          --              (184)            
Special termination benefit . . . . .              6            140             
                                -------        -------

Benefit obligation at end of year . .          8,906          9,615             
Unrecognized net actuarial gain . . .         14,654         23,503             
                                -------        -------

Accumulated postretirement benefit cost      $23,560         33,118             
                                =======        =======

Decreases in the Maintenance of Effort obligation recognize that the  
requirement to maintain an average level of certain retiree health care         
benefits expires in 2004.  Such obligations are principally related to          
collectively bargained contractual obligations of Lihue Plantation, Pioneer     
Mill and Oahu Sugar.                                                            

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These entities currently amortize unrecognized gains over the shorter 
of ten years or the average life expectancy of the inactive participants        
since almost all of the Plans' participants are inactive.  The portion of       
the unrecognized net actuarial gain represented by the decrease in the          
Maintenance of Effort obligation is being amortized over four years,            
commencing in 2001.  In addition, due to the significant total amount of        
unrecognized gain at December 31, 2002 and 2001, which is included in the       
financial statements as a liability, and the disproportionate relationship      
between the unrecognized gain and accumulated postretirement benefit            
obligation at December 31, 2002, these entities may, in the future, change      
their amortization policy to accelerate the recognition of the unrecognized     
gain. In considering such change, they would need to determine whether          
significant changes in the accumulated postretirement benefit obligation        
and unrecognized gain may occur in the future as a result of changes in         
actuarial assumptions, experience and other factors. Any future change to       
accelerate the amortization of the unrecognized gain would have no effect       
on cash flows, but could have a significant effect on an entity's statement     
of operations.                                                                  

The weighted-average discount rate used in determining the            
accumulated postretirement benefit obligation was 7% as of December 31,         
2002 and 7.25% as of December 31, 2001.                                         

(6)  INCOME TAXES                                                               

Income tax expense (benefit) attributable to income from continuing   
operations for the years ended December 31, 2002, 2001 and 2000 consists        
of:                                                                             
                     Current    Deferred     Total
                       --------   --------    --------
Year ended December 31, 2002:                                         
U.S. federal . . . . . . .   $  --       (13,588)    (13,588)     
State. . . . . . . . . . .      --        (1,553)     (1,553)     
                       --------   --------    --------
                        $  --       (15,141)    (15,141)
                       ========   ========    ========
Year ended December 31, 2001:                                         
U.S. federal . . . . . . .   $  --        (3,107)     (3,107)     
State. . . . . . . . . . .      --          (355)       (355)     
                       --------   --------    --------
                        $  --        (3,462)     (3,462)
                       ========   ========    ========
Year ended December 31, 2000:                                         
U.S. federal . . . . . . .   $  --       (26,537)    (26,537)     
State. . . . . . . . . . .      --        (3,033)     (3,033)     
                       --------   --------    --------
                        $  --       (29,570)    (29,570)
                       ========   ========    ========

Income tax benefit attributable to income from continuing operations  
differs from the amounts computed by applying the U.S. federal income tax       
rate of 35 percent to pretax loss from operations as a result of the            
following:                                                                      
                       2002       2001        2000
                       --------   --------    --------
Computed "expected" tax provision                                               
(benefit). . . . . . . . . . . .   $ (3,842)   (10,723)    (28,838)           
Reduction in income taxes resulting                                             
from:                                                                         
Net loss from unconsolidated                                                
investment. . . . . . . . . .      1,197      7,247       --            
Reduction in valuation allowance   (12,766)     --          --              
Other, net. . . . . . . . . . .        270         14        (732)          
                       --------   --------    --------
Total . . . . . . . . . . .   $(15,141)    (3,462)    (29,570)      
                       ========   ========    ========

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Deferred income taxes reflect the net tax effects of temporary        
differences between the carrying amounts of assets and liabilities for          
financial reporting purposes and the amounts used for income tax purposes.      
The deferred tax effects of temporary differences at December 31, 2002 and      
2001 are as follows:                                                            
                                  2002        2001
                                  --------    --------
Deferred tax assets:                                                    
Post retirement benefits. . . . . . . .  $ (9,188)    (12,916)      
Reserves related primarily to losses                                
on divestitures . . . . . . . . . . .   (12,880)    (11,775)    
Loss carryforwards. . . . . . . . . . .    (3,870)    (15,294)      
Tax credit carryforwards. . . . . . . .    (4,258)     (6,114)      
Other, net. . . . . . . . . . . . . . .      (753)     (5,447)      
                                  --------    --------
Total deferred tax assets . . . . . .   (30,949)    (51,546)    
Less - valuation allowance. . . . . .     4,175      16,941     
                                  --------    --------
Net deferred tax assets . . . . . . .   (26,774)    (34,605)    
                                  --------    --------
Deferred tax liabilities:                                               
Property, plant and equipment,                                      
principally due to depreciation,                                
net of impairment charges and                                   
purchase accounting adjustments . . .    25,814      41,790     
Prepaid pension and core retirement                                 
award costs . . . . . . . . . . . . .    10,103       9,188     
Basis difference in partnership                                     
interests . . . . . . . . . . . . . .     --         37,598     
                                  --------    --------
Total deferred tax liabilities. . .    35,917      88,576   
                                  --------    --------
Net deferred tax liability. . . . .  $  9,143      53,971   
                                  ========    ========

The net deferred tax liability was reduced by approximately $30,000   
due to the restructuring and has been reflected as a component of the           
Extraordinary gain on reorganization in 2002.                                   

At December 31, 2002, the Company has net operating loss carryforwards
("NOLs") for federal income tax purposes of approximately $4 million and        
approximately $56 million for state income tax purposes which can be used       
to offset taxable income, if any, in future years.  The federal NOLs begin      
to expire in 2016.  The reduction in the valuation allowance is primarily       
due to the expected utilization of NOLs in 2002 that had been previously        
reserved for financial reporting purposes.  The state NOLs, primarily in        
the state of Hawaii, have significant expiration dates commencing in 2005.      
NOLs have generally been reserved because utilization is dependent on           
future events that cannot be reasonably predicted.  The Company also has        
available alternative minimum tax credits which can be used to offset           
future federal income taxes, if any.  The alternative minimum tax credits       
aggregated approximately $4 million as of December 31, 2002 and can be          
utilized over an indefinite period.  U.S. Federal tax return examinations       
have been completed for years through 1997.  The Company believes adequate      
provisions for income tax have been recorded for all years.  The Company's      
Federal tax returns for the periods 1998-2000 are currently being examined.     

The statutes of limitations with respect to the Company's tax returns for       
1998 through 2002 remain open.                                                  

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(7)  TRANSACTIONS WITH AFFILIATES                                               

An affiliated insurance agency earns insurance brokerage commissions  
in connection with providing the placement of insurance coverage for            
certain of the properties and operations of the Company.  Such commissions      
are comparable to those that would be paid to such affiliate insurance          
agency in similar dealings with unaffiliated third parties, and are             
generally paid by the insurance carriers that the agency represents out of      
the premiums paid by the Company for such coverage.  The total of such          
commissions for the years ended December 31, 2002, 2001 and 2000 (including     
amounts related to discontinued operations in 2001 and 2000) was                
approximately $75, $1,133 and $1,272, respectively, not all of which was        
paid as of December 31, 2001.                                                   

The Company pays a non-accountable reimbursement of approximately $30 
per month to an affiliate in respect of general overhead expense, all of        
which was paid as of December 31, 2002.                                         

The Company reimburses their affiliates for direct expenses incurred  
on its behalf, including salaries and salary-related expenses incurred in       
connection with the management of the Company's operations.  The total          
costs for the years ended 2002, 2001 and 2000 was approximately $1,992,         
$1,118 and $2,774, respectively, of which approximately $526 was unpaid as      
of December 31, 2002.                                                           

Employees of certain of the Company's unconsolidated affiliates are   
entitled to participate in the Company's defined contribution pension plan.     

Pursuant to an agreement through December 31, 2001 Northbrook was entitled      
to receive a reimbursement from such affiliates in an amount equal to the       
service cost related to these employees. The amount of the reimbursement        
for 2002, 2001 and 2000 was $0, $1,242 and $1,537, respectively, all of         
which was paid as of December 31, 2002.                                         

The Company had other amounts due affiliates of $19 and $(281) at     
December 31, 2002 and 2001, respectively.                                       

(8)  COMMITMENTS AND CONTINGENCIES                                              

Material legal proceedings of the Company are described below.  In    
proceedings filed prior to the Petition Date where a Debtor is a defendant,     
such proceedings were stayed as against such Debtor by the filing of the        
Reorganization Case.  Those proceedings may now continue since the Plan         
Effective Date has occurred so long as the plaintiffs therein filed timely      
claims under the Plan.  However, any judgments rendered therein would be        
subject to the distribution provisions of the Plan, which would in most         
cases result in the entitlement of such claims to proceeds that are             
substantially less than the face amount of such judgments.  Any claims that     
were not filed on a timely basis under the Plan have been discharged by the     
Bankruptcy Court and thus the underlying legal proceedings should not           
result in any liability to the Debtors.  Proceedings against subsidiaries       
or affiliates of Kaanapali Land that are not Debtors were not stayed by the     
Plan and may proceed.                                                           

APIC, which is not a Debtor and is owned approximately 16.7% by the   
Company, is the primary borrower under a $66 million loan made by the ERS       
in 1991.  The loan, which has a balance as of December 31, 2002 of              
approximately $81 million, is secured by the RKGC (and certain adjacent         
lands).  All of APIC's assets are subject to the loan.  The loan matured in     
June 2001 and has not been extended, despite efforts of the borrowers to        
obtain such an extension as described below.                                    

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Due to insufficient cash flow generated by the RKGC and because of    
disagreements with the lender over, among other things, lender's failure        
(i) to consent to a grant of required easements in order for the Company to     
develop and market its adjoining properties and (ii) to release adjacent        
lands that are not related to the golf course operations from the mortgage,     
as required under the loan documents, APIC and the other borrowers under        
the loan did not pay the required interest payments due in 2000 on the loan     
secured by these golf courses.  ERS then issued a default notice and            
instituted a foreclosure action in August 2000 (Employees' Retirement           
System of the State of Hawaii v. Amfac/JMB Hawaii, L.L.C., et. al., Civil       
No. 00-1-2597-08, First Circuit Court, State of Hawaii).  Pursuant to an        
agreement between the lender and the borrowers, the borrowers paid              
approximately $3.8 million in September 2000 to the ERS for a portion of        
the past due interest amounts and the ERS agreed to temporarily suspend its     
action to realize upon its security while the parties attempted to              
negotiate a definitive agreement to extend the loan beyond its June 30,         
2001 maturity date.  Efforts of the borrowers to negotiate such an              
agreement broke down in December 2001, only after Northbrook (an affiliate      
of APIC that had no obligations under the loan) had funded certain minimum      
interest payments (together with the ERS' legal fees and other related          
costs).  In January 2002, ERS recommenced its foreclosure action, which the     
borrowers are contesting.  The borrowers have also brought counterclaims        
against ERS relative to the lender's defaults described above, which            
defaults have caused APIC and the Company substantial damages relating to       
its efforts to sell either the unrelated parcels that the ERS refused to        
release from the mortgage or other land parcels that required easements and     
other rights to which the ERS was required to consent.                          

The borrowers' counterclaims against the ERS in such litigation       
assert, among other things, that because of the refusal of the ERS to           
perform in accordance with the loan documents and grant the required            
consents and releases, dating back to the inception of the loan, the            
Company suffered damages over time relating to various development projects     
and sale transactions that APIC and/or the Company consummated or attempted     
to consummate since 1991.  Also alleged is that these refusals and the          
interference of the ERS with APIC's and the Company's legitimate                
development efforts was intended by ERS to give the ERS leverage over APIC      
and the Company's development and land sale activities to the benefit of        
ERS, not to protect the ERS' bargained for security for its loan on the         
RKGC.  Some projects were substantially delayed by the ERS' defaults and        
significant land sales were either substantially delayed or failed              
altogether.  Income from sales was also adversely affected in addition to       
the expenses of development caused by the ERS' delays and refusals.  In         
addition, APIC and the Company suffered significant damages relative to the     
costs of attorneys and other professionals that the Company was forced to       
pay (including those of ERS' attorneys and professionals) in its failed         
attempt to obtain the consents and releases.  Failure to obtain the             
necessary easements promised by ERS could subject APIC and/or the Company       
to damages claims from landowners on parcels previously sold by the Company     
and, particularly, could significantly negatively impact the value and          
marketability of its remaining land parcels in Kaanapali Golf Estates,          
which requires such easements for access and to ensure that the parcel          
enjoys necessary water and drainage rights.  As a consequence of the ERS'       
actions, the borrowers' counterclaims allege, among other things, that the      
ERS breached its duties under the contract, breached the ERS' implied           
covenant of good faith and fair dealing, fraudulently induced the borrowers     
to enter into the loan, acted in a fraudulent manner respecting its             
fiduciary relationship with the borrowers and/or acted in bad faith.  The       
counterclaim seeks, among other things, damages, attorneys' fees and costs,     
and an order directing the ERS to provide the releases and consents             
required by the loan documents.  There can be no assurance that defendants      
will prevail in the counterclaim or in the defense of ERS's attempt to          
realize on its security.  On March 19, 2002, the court entered an order         
appointing a receiver for the property that is security for the loan, as        
well as for the golf course operations related thereto.  The receiver has       
taken over the golf course operations from APIC and hired most of APIC's        
former employees.  APIC's former employees are seeking from APIC payment of     
severance and certain benefits, among other things.                             

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The borrowers have been engaged in settlement negotiations with ERS   
since 2000, which have finally resulted in the execution of a definitive        
settlement agreement (the "ERS Settlement Agreement") in March 2003.            
Although the borrowers believe that the transactions contemplated by the        
ERS Settlement Agreement will be consummated during the third quarter of        
2003, the ERS Settlement Agreement is subject to contingencies including        
approval by the state court which has authority over the underlying             
litigation.  Such approval is anticipated in the second quarter of 2003.        
As a consequence of such contingencies, there can be no assurance as to the     
consummation thereof.  Consummation of the ERS Settlement Agreement and the     
transactions contemplated therein would provide the Company with easements      
and other rights that it considers adequate for the development or sale of      
their adjoining lands, but would also result in the Company having no           
further interest in the RKGC.                                                   

In October 2002, in anticipation of the finalization of the ERS       
Settlement Agreement, Kaanapali Land, AHI and certain related entities          
entered into a Funding Agreement (the "Funding Agreement") with APIC, AFI       
and AFI's parent, Amfac Finance Limited Partnership ("AFLP") that specifies     
how amounts paid by Kaanapali Land as "Funding Entity" under such               
settlement agreement will be treated.  Kaanapali Land was willing to enter      
into the Funding Agreement because, among other things, the ERS had             
threatened to file a significant claim in the Reorganization Case against       
the borrowers who are Debtors, which claim, if allowed in whole or              
significant part would likely cause a material adverse impact on the            
Company and its prospects for successfully implementing the Plan.  Although     
the Debtors believe that any such claim would be without merit, either in       
whole or substantial part there could be no assurance that it would not         
ultimately be allowed in a significant amount.  The existence of the            
Funding Agreement made it possible to enter into the ERS Settlement             
Agreement, which in turn has significantly reduced, if not eliminated, the      
risk that any such claim will be filed by ERS under the Plan.  Generally,       
1/6 of the funded amounts shall be treated as capital contributions to AHI      
and Pioneer Mill and then to APIC, on account of AHI's stock ownership in       
APIC.  The remaining 5/6 of such amounts shall be treated as a loan by          
Kaanapali Land to AFLP, which will then be treated as having been               
contributed by AFLP, through AFI, to APIC on account of AFI's stock             
ownership in APIC.  The ability of AFLP to reimburse Kaanapali Land for         
such loan amounts depends on the recovery by AFLP of a judgment it has          
obtained in certain litigation that is unrelated to the Company.  There can     
be no assurance that AFLP will ultimately realize on such judgment or that      
it will obtain proceeds relative thereto or otherwise in an amount              
sufficient to satisfy the loan from Kaanapali Land.                             

Concurrently with the execution of the ERS Settlement Agreement, APIC 
entered into a settlement agreement with the union representing the             
bargaining unit employees employed by APIC at the time the receivership         
commenced.  Such settlement shall, upon consummation of the ERS Settlement      
Agreement, result in certain amounts being paid or distributed to such          
employees in return for releases by each of them and the union in favor of      
APIC and the Company.  APIC intends to handle its former non-bargaining         
unit employees employed at the Royal Kaanapali Golf Courses at such time in     
substantially the same manner.  However, there can be no assurance that         
such settlement will be consummated, nor that all eligible former employees     
will take advantage of it.                                                      

In connection with the Reorganization Case, the ERS, the Debtors and  
APIC, during the third quarter of 2002, entered into a Stipulation approved     
by the Bankruptcy Court, which as amended from time to time and approved by     
the Bankruptcy Court since originally entered, among other things,              
currently (i) provides for an extension of the bar date by which the ERS        
must file any claims it may have against any of the Debtors until five (5)      
business days after written notice from the Debtors and (ii) reserves the       
rights of the ERS and the Debtors with respect to objections that the ERS       
may have to the treatment of its claims under the Plan and further provides     

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that such objections, if asserted, will be resolved by the Bankruptcy Court     
following confirmation of the Plan in the manner as set forth in the            
Stipulation.  The consummation of the ERS Settlement Agreement would result     
in the release and waiver of any claims that the ERS might have against the     
Debtors in the Reorganization Case.                                             

On September 20, 1996, Oahu Sugar Company, LLC, successor by merger to
Oahu Sugar Company, Limited ("Oahu Sugar") and a subsidiary of Kaanapali        
Land, filed a lawsuit, Oahu Sugar v. Walter Arakaki and Steve Swift, Case       
No. 96-3880-09, in the Circuit Court of the First Circuit, State of Hawaii.     

In the lawsuit, Oahu Sugar, which is a Non-Debtor AHI Subsidiary, alleged       
that it entered into an agreement to sell to defendants certain sugar cane      
processing equipment at Oahu Sugar's sugar cane mill in Waipahu.  Oahu          
Sugar alleged that defendants failed to timely dismantle and remove the         
equipment, as required by the agreement, and that defendants were obligated     
to pay Oahu Sugar rent for the area occupied by the equipment beyond the        
time provided for by the parties.  Oahu Sugar further alleged that it           
provided notice to defendants that Oahu Sugar was entitled to treat the         
equipment as abandoned property and to sell the equipment, because the          
equipment had not been removed from the property in a timely fashion, as        
required by the parties' agreement.  In its complaint, Oahu Sugar sought,       
among other things, declaratory relief that it was entitled to treat the        
equipment as abandoned, damages for breach of contract, and rent under an       
unjust enrichment theory.                                                       

Defendants filed an answer, as amended, denying the substantive       
allegations of Oahu Sugar's complaint and asserting various affirmative         
defenses.  In addition, the defendants filed a seven-count counterclaim         
against Oahu Sugar.  In the counterclaim, defendants alleged, among other       
things, that Oahu Sugar failed to make the equipment available for removal      
on a timely basis, and that Oahu Sugar otherwise improperly interfered with     
defendants' plans for the removal and subsequent sale of the equipment.  In     
the counterclaim, defendants sought, among other things, general, special       
and punitive damages, attorneys' fees, costs, and such other relief as the      
Court may have deemed appropriate.                                              

Oahu Sugar's declaratory relief claim was settled in advance of trial.

Oahu Sugar obtained dismissals and directed verdicts on six of defendants'      
claims.  The remaining portions of the complaint and counterclaim proceeded     
to a jury trial and verdict.  On December 2, 1999, the jury denied Oahu         
Sugar relief on its remaining claims and awarded the defendants                 
approximately $2.6 million in damages on their counterclaim.  On March 2,       
2000, the trial court entered a judgment against Oahu Sugar for the $2.6        
million in damages awarded by the jury.  In addition, the trial court           
awarded counterclaimants $751 thousand in attorneys' fees, $28 thousand in      
costs and $866 thousand in prejudgment interest.  Oahu Sugar's post trial       
motions for judgment as a matter of law and for a new trial were denied.        
Oahu Sugar filed a notice of appeal.  The defendants began efforts to           
collect the amounts awarded to them.  Defendants caused garnishee summons       
to be issued to various affiliated and unaffiliated entities.  The              
defendants scheduled a debtor's examination for August 23, 2000 which was       
not concluded.  The Hawaii Supreme Court scheduled the case for an              
appellate conference and mediation that was unsuccessful.  Then, on             
January 3, 2001, the Hawaii Supreme Court entered an order dismissing the       
appeal.  The Supreme Court held that it lacked jurisdiction over the appeal     
because the judgment entered on March 2, 2000 was legally defective in that     
it did not identify the claim for which judgment was entered or dismiss all     
of the other claims and counterclaims of the parties.  In light of the          
order of the Hawaii Supreme Court, the parties filed legal briefs before        
the trial court to have the court determine, among other things, whether a      
corrected judgment consistent with the jury verdict may be entered as of        
March 2, 2000 or a new judgment order is required.  After hearing the           
arguments of the parties, on March 19, 2001, the trial court ruled that it      
would not enter a corrected judgment as of March 2, 2000 and that a new         
judgment order will be required.  On April 12, 2001, the court entered the      

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new judgment order on the counterclaims providing for the payment of            
approximately $2.6 million in damages, $730 thousand in attorneys' fees,        
$28 thousand in costs, $867 thousand in prejudgment interest, and               
additional prejudgment interest from January 20, 2000 through April 12,         
2001.  From and after entry of the order, post-judgment interest will           
accrue on the unpaid balance at the statutory rate of ten percent per annum     
until paid in full.  Oahu Sugar is pursuing an appeal and the opposing side     
has filed a cross appeal seeking further relief on any potential retrial of     
the matter.  The case is fully briefed and awaits a decision by the Hawaii      
Supreme Court.  Oahu Sugar continues to believe that it is entitled to          
affirmative relief on its complaint and that it has meritorious defenses to     
the counterclaim that it has pursued on appeal.  The Company, however, can      
provide no assurances that it will be successful in obtaining affirmative       
relief or overturning the verdict against Oahu Sugar.  This verdict, if         
upheld, could have a material adverse effect on the Oahu Sugar's financial      
condition.                                                                      

On or about December 15, 2000, Oahu Sugar and Oahu MS Development     
Corp. ("Oahu MS", f/k/a Amfac Property Development corp.), subsidiaries of      
Kaanapali Land, among others, were named in a lawsuit entitled Walter           
Arakaki and Steve Swift v. Oahu Sugar Company, Limited et al., Civil No.        
00-1-3817-12, and filed in the Circuit Court of the First Circuit of            
Hawaii.  In the complaint, as amended, plaintiffs seek a declaration that       
certain conveyances of real estate made by Oahu Sugar or Oahu MS, since         
December 1996, were allegedly fraudulent transfers made in violation of the     
common law, the Hawaii fraudulent transfer act, and rights which they claim     
arose in connection with the claims they filed in Oahu Sugar v. Walter          
Arakaki and Steve Swift, Case No. 96-3880-09, discussed above (hereinafter,     
"underlying matter").  Plaintiffs seek, among other things, injunctive and      
declaratory relief, compensatory damages, punitive damages, orders of           
attachment against sales proceeds, voidance of certain transfers,               
foreclosure and other remedies in connection with various transfers of real     
estate made by Oahu Sugar to Oahu MS the Young Men's Christian Association      
of Honolulu ("YMCA"), and the Filipino Community Center, Inc. ("FCC"),          
among others, all over the years 1996-2000.  The YMCA and FCC have also         
been named defendants in this action and have filed cross-claims for relief     
against Oahu Sugar and Oahu MS for alleged breach of warranty of title,         
indemnity and contribution in connection with their respective                  
transactions, and seeking, among other things, damages, attorneys' fees,        
costs, and prejudgment interest.  Oahu Sugar and Oahu MS have filed answers     
to the complaint, as amended, and the cross-claims.  On May 3, 2001,            
plaintiffs filed an amended complaint dropping the remedy of foreclosure in     
connection with certain property transferred to the YMCA and adding various     
allegations including, without limitation, allegations regarding the final      
judgment entered in the underlying matter.  The case is proceeding and is       
set for mediation in July 2003 and for trial in April 2004.  Oahu Sugar and     
Oahu MS believe they have meritorious defenses and intend to pursue their       
defenses vigorously.  However, there can be no assurances that this case,       
when once adjudicated, will not have a material adverse effect on the           
financial condition of Oahu Sugar or Oahu MS.                                   

The Company believes that Oahu Sugar has meritorious defenses to the  
above referenced pending lawsuits that continue to be pending and Oahu          
Sugar will defend itself vigorously. However, as Oahu Sugar is                  
substantially without assets to satisfy any material existing or future         
judgment, there can be no assurances that these cases (or any of them), if      
adjudicated in a manner adverse to Oahu Sugar, will not have a material         
adverse effect on the financial condition of Oahu Sugar.                        

On October 23, 2002, Oahu MS was named in a civil action entitled City
Bank v. Amfac Property Development Corp., et. al. pending in the Circuit        
Court of the First Circuit, State of Hawaii, Civil No. 02-2494-10.  In this     
case, plaintiff seeks injunctive relief and declaratory relief to cease         
actions preventing City Bank and its consultants from gaining access to the     
mortgaged property for environmental testing.  Although plaintiff filed a       
Motion for Preliminary Injunction, no hearing has been set on the motion.       

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On January 2, 2003, Oahu MS was named in a civil action entitled City 
Bank v. Amfac Property Development Corp., et. al. pending in the Circuit        
Court of the First Circuit, State of Hawaii, Civil No. 03-1-0005-01.  In        
this case, plaintiff seeks foreclosure of property owned by Oahu and            
encumbered by a mortgage in favor of Plaintiff.  Together with the              
Complaint, City Bank filed a Motion for Appointment of Receiver alleging        
that it is entitled to have a receiver appointed for an environmental audit     
on the mortgaged property and collection of all net rental income assigned      
to City Bank.  This motion was granted.                                         

On or about February 23, 2001 Kekaha Sugar Co., Ltd. received a letter
from the Hawaii Department of Health ("HDOH") assigning the Kekaha Sugar        
Co., Ltd. site a high priority status based on HDOH's review of available       
environmental data.  In the letter, HDOH identified five major areas of         
potential environmental concern including the former wood treatment plant,      
the herbicide mixing plant, the seed dipping plant, the settling pond, and      
the Kekaha Sugar Mill.  While setting forth specific concerns, the HDOH         
reserved the right to designate still further areas of potential concern        
which might require further investigation and possible remediation.  HDOH       
further reserved the right to modify its prioritization of the site should      
conditions warrant.  The assignment of the high priority status will likely     
result in a high degree of oversight by the HDOH as the issues raised are       
studied and addressed.  Kekaha Sugar Co., Ltd. has responded to the letter.     

The United States Environmental Protection Agency has performed a visual        
inspection of the property and indicated there will be some testing             
performed.  Kekaha Sugar Co., Ltd. is substantially without assets and          
further pursuit of this matter by HDOH could have a materially adverse          
effect on the financial condition of Kekaha Sugar Co., Ltd.                     

On or about February 23, 2001, Lihue Plantation received a similar    
letter from the HDOH assigning the LPCo site a high priority status based       
on HDOH's review of available environmental data.  In the letter, HDOH          
identified four major areas of potential environmental concerning including     
the Lihue Plantation herbicide mixing plant, the seed dipping plant, the        
settling pond and the Lihue Sugar Mill.  While setting forth specific           
concerns, the HDOH reserved the right to designate still further areas of       
potential concern which might require further investigation and possible        
remediation.  HDOH further reserved the right to modify its prioritization      
of the site should conditions warrant.  As noted above, the high priority       
assignment will likely result in a high degree of oversight by the HDOH as      
the issues raised are studied and addressed.                                    

Oahu MS has discovered chlorinated solvents in the groundwater at the 
former Oahu Sugar Waipahu Sugar Mill site.  The contamination does not          
appear in high concentrations.  Oahu MS' recommendation for remediation         
using hydrogen-releasing compounds has been rejected by the HDOH.  Oahu MS      
may have to do further work at the site.  At this point, Oahu MS is unable      
to identify with certainty the treatment options, if any, that the HDOH may     
require or approve for the site, or the costs of same.                          

Pioneer Mill is engaged in an ongoing cleanup arising out of the      
discovery of petroleum contamination found at the Pioneer Mill site.  The       
Pioneer Mill site has been assigned a high priority and the HDOH has shown      
an interest in the environmental conditions relating to or arising out of       
the former operations of Pioneer Mill.  These issues will have to be            
addressed as they are raised.  Currently, Pioneer Mill is awaiting a report     
on the results of environmental testing conducted on the site by the United     
States Environmental Protection Agency.                                         

As a result of an administrative order issued to Oahu Sugar by the    
Hawaii Department of Health, Order No. CH 98-001, dated January 27, 1998,       
Oahu Sugar is currently engaged in environmental site assessment of lands       
it leased from the U.S. Navy and located on the Waipio Peninsula.  Sampling     
is underway and the investigation is otherwise still in its preliminary         
stages.  Oahu Sugar has submitted a Remedial Investigation Report to the        
HDOH.  The HDOH has provided comments which indicate additional testing may     
be required.                                                                    

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In addition, the Internal Revenue Service (the "IRS") filed a claim in
the bankruptcy proceedings in the aggregate amount of approximately             
$20,600,000 for taxes, interest and penalties related to the years 1998-        
2000.  The Company has contacted the IRS to request that it withdraw its        
claim due to the fact that the Plan leaves the IRS unimpaired relative to       
any taxes that may be due.  Although the Company is optimistic that the IRS     
will withdraw such claim, it has not yet done so and there can be no            
assurance that it will.  In any event, the IRS audit of the period covered      
by the claim is in its preliminary stages and no deficiencies in taxes have     
been proposed by the auditors.  The Company intends to dispute vigorously       
any IRS claim for additional taxes, whether asserted by means of the claim      
filed in the bankruptcy proceeding, arising in the pending audit, or in         
future audits.  However, there can be no assurance that the Company will be     
successful in such defense and, although the Company has reserved for           
potential tax liabilities on its financial statement,s to the extent that       
the Company is unsuccessful in defending against any such claims, either in     
the bankruptcy court or in connection with the IRS audits, the amount for       
which the Company could be liable could have a material adverse effect on       
the Company.                                                                    

EC Managers, Inc., a subsidiary of Kaanapali Land, and general partner
of EC Partners, L.P., formerly known as Arvida/JMB Partners, L.P.-II (the       
"Partnership"), has been named a defendant in a lawsuit filed on January        
11, 1996 in the Circuit Court in and for the Eighteenth Judicial Circuit,       
Seminole County, Florida entitled Land Investment I, Ltd., Heathrow Land &      
Development Corporation, Heathrow Shopping Center Associates and Paulucci       
Investments v. Arvida/JMB Managers-II, Inc., Arvida/JMB Partners, L.P.-II,      
Arvida Company and JMB Realty Corporation Case No. 96-62-CA-15E.  The           
complaint, as amended, includes counts for breach of the management             
agreement, fraud in the inducement and conspiracy to commit fraud in the        
inducement, breach of the Heathrow partnership agreement and constructive       
trust in connection with the purchase and management of the Heathrow            
development.  Plaintiffs seek, among other things, unspecified compensatory     
damages, punitive damages, prejudgment interest, attorneys' fees, costs,        
and such other relief as the Court deems appropriate.  Substantial fact         
discovery has been conducted to date and the defendants expect further          
substantial discovery, both of fact and expert witnesses, to take place.        

On June 24, 1999, the Court granted partial summary judgment in favor 
of the plaintiffs against Arvida Company, finding that Arvida Company owed      
plaintiffs a fiduciary duty as a broker and advisor under the management        
agreement.  The ruling did not reach the issue of the statute of                
limitations defense nor whether any such duties were owed in connection         
with the Partnership's acquisition of an interest in the Heathrow               
development through the Heathrow partnership.                                   

No discovery cut-off date or trial date has been set, although the    
court has indicated a desire to try this case in November 2003.                 

Kaanapali Land, as successor by merger, and D/C Distribution, a       
subsidiary of Kaanapali Land, have been named as defendants in personal         
injury actions allegedly based on exposure to asbestos.  There are              
approximately 110 cases against such subsidiary that are pending on the         
mainland and are alleged based on such subsidiary's prior business              
operations.  Each company believes that it has meritorious defenses against     
these actions, but can give no assurances as to the ultimate outcome of         
these cases.  In the case of the subsidiary, there can be no certainty that     
such subsidiary will be able to satisfy all of its liabilities for these        
cases.  As the subsidiary is without assets to satisfy any material             
existing or future judgments, there can be no assurances that these cases       
(or any of them), if adjudicated in a manner adverse to the subsidiary,         
will not have a material adverse effect on the financial condition of such      
subsidiary.  Kaanapali Land does not believe that it has liability,             
directly or indirectly, for such subsidiary's obligations.                      

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Other than as described above and the Reorganization Case as described
above, the Company is not involved in any material pending legal                
proceedings, other than ordinary routine litigation incidental to its           
business. The Company and/or certain of its affiliates have been named as       
defendants in several pending lawsuits. While it is impossible to predict       
the outcome of such routine litigation that is now pending (or threatened)      
and for which the potential liability is not covered by insurance, the          
Company is of the opinion that the ultimate liability from any of this          
litigation will not materially adversely affect the Company's consolidated      
results of operations or its financial condition.                               

(9)  DISCONTINUED OPERATIONS                                                    

In December 2001, the Company consummated a non-taxable spin-off of   
Resorts to its shareholders.  Accordingly, Resorts is no longer a               
subsidiary of Kaanapali Land and is classified as a discontinued operation.     

Resorts' income statement information for 2001 and 2000 was as        
follows:                                                                        
                                  2001        2000
                                  --------    --------
Revenues:                                                                       
Sales . . . . . . . . . . . . . . . . . . .  $229,524     242,692           
Other income. . . . . . . . . . . . . . . .     4,082       5,477           
                                  --------    --------
                                   233,606     248,169
                                  --------    --------
Costs and expenses:                                                             
Cost of sales . . . . . . . . . . . . . . .   150,123     158,421           
Selling, general and administrative . . . .    51,083      47,877           
Interest. . . . . . . . . . . . . . . . . .     8,133      10,976           
Depreciation and amortization . . . . . . .    18,710      18,608           
                                  --------    --------
                                   228,049     235,882
Income from discontinued operations                                             
before income taxes . . . . . . . . . . . .     5,557      12,287           

Income tax benefit (provision). . . . . . . .     4,537      (5,170)            
                                  --------    --------

Income from discontinued operations . . . . .  $ 10,094       7,117             
                                  ========    ========

(10) BUSINESS SEGMENT INFORMATION                                               

As described in Note 1, the Company operates in three business        
segments.  Total revenues, operating profit, identifiable assets, capital       
expenditures, and depreciation and amortization by business segment are         
presented in the tables below.                                                  

Total revenues by business segment includes primarily (i) sales, all  
of which are from unaffiliated customers and (ii) interest income that is       
earned from outside sources on assets which are included in the individual      
industry segment's identifiable assets.                                         

Operating profit is comprised of total revenue less operating         
expenses.  In computing operating profit, none of the following items have      
been added or deducted:  general corporate revenues and expenses, interest      
expense, income taxes, equity in income (loss) from unconsolidated              
investments and gain from the extinguishment of debt.                           

Identifiable assets by business segment are those assets that are used
in the Company's operations in each industry. Corporate assets consist          
principally of cash and cash equivalents, prepaid pension costs and             
receivables related to previously divested businesses. Investments in net       
assets of unconsolidated investments are related to ownership interests         
held by the Company primarily in various real estate related entities.          

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                       2002       2001        2000
                       --------   --------    --------
Revenues:                                                                       
Property. . . . . . . . . . . .   $  4,753     50,636      37,850           
Agriculture . . . . . . . . . .      1,972      4,252      22,283           
Golf. . . . . . . . . . . . . .      4,360      4,175      14,990           
Corporate . . . . . . . . . . .         27     22,831       4,124           
                       --------   --------    --------
                       $ 11,112     81,894      79,247
                       ========   ========    ========

Operating Profit (loss):                                                        
Property. . . . . . . . . . . .   $  1,323    (17,806)    (18,845)          
Agriculture . . . . . . . . . .     (8,028)    (3,742)    (44,425)          
Golf. . . . . . . . . . . . . .        764        120       3,884           
                       --------   --------    --------

Operating loss. . . . . . . . . .     (5,941)   (21,428)    (59,386)            

Corporate . . . . . . . . . . . .     (7,819)    15,144      (6,943)            
Interest expense. . . . . . . . .     (2,395)   (11,387)    (18,227)            
Equity in income (loss) from                                                    
unconsolidated investments. . .      5,180    (12,967)      2,162           
                       --------   --------    --------
Loss from continuing operations                                                 
before income taxes . . . . . .   $(10,975)   (30,638)    (82,394)          
                       ========   ========    ========

Identifiable Assets:                                                            
Property. . . . . . . . . . . .   $ 55,970     67,410                       
Agriculture . . . . . . . . . .     51,419     64,760                       
Golf. . . . . . . . . . . . . .     29,076     29,441                       
           --------   --------
            136,465    161,611

Corporate . . . . . . . . . . . .     53,161     62,017                         
           --------   --------
           $189,626    223,628
           ========   ========

Agricultural identified assets include land classified as agricultural
or conservation for State and County purposes.                                  

                       2002       2001        2000
                       --------   --------    --------
Capital Expenditures:                                                           
Property. . . . . . . . . . . .   $  --            13         129           
Agriculture . . . . . . . . . .      --            20       2,642           
Golf. . . . . . . . . . . . . .        163        499         239           
Corporate . . . . . . . . . . .         15      --             13           
                       --------   --------    --------
                       $    178        532       3,023
                       ========   ========    ========
Depreciation and Amortization:                                                  
Property. . . . . . . . . . . .   $     90         86         339           
Agriculture . . . . . . . . . .      1,417      1,924       2,931           
Golf. . . . . . . . . . . . . .        552        839       1,318           
Corporate . . . . . . . . . . .        935        772       1,277           
                       --------   --------    --------
Total . . . . . . . . . . . . . .   $  2,994      3,621       5,865             
                       ========   ========    ========

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(11) CALCULATION OF NET INCOME PER SHARE                                        

The following tables set forth the computation of net income (loss)   
per share - basis and diluted:                                                  

For the      For the              
Period      Period              
     January 1,  November 14,      Years Ended
     2002 through 2002 through      December 31,
         November 13, December 31,----------------------
         2002         2002        2001        2000
         ------------ ------------ ---------  ----------
         (Amounts in thousands except per share amounts)
NUMERATOR:                                                                      
Operating loss. . . . $   (2,117)     (14,038)   (17,671)    (84,556)           
          ==========     ========  =========  ==========
Equity in income (loss)                                                         
from unconsolidated                                                         
investments . . . .      5,525         (345)   (12,967)      2,162          
          ==========     ========  =========  ==========
Income from continuing                                                          
operations. . . . .     12,939       (8,773)   (27,176)    (52,824)         

Income from discon-                                                             
tinued operations .      --           --        10,094       7,117          

Extraordinary gain. .    136,618        --         --          --               
          ----------     --------  ---------  ----------
Net income (loss) . . $  149,557       (8,773)   (17,082)    (45,707)           
          ==========     ========  =========  ==========

DENOMINATOR:                                                                    
Denominator for net                                                             
income (loss) per                                                             
share - basic and                                                             
diluted. . . . . . . $        4        1,863          4           4           
          ==========     ========  =========  ==========
Net income (loss)                                                               
per share - basic                                                             
and diluted. . . . .  37,389.34        (4.71) (4,270.50) (11,426.75)          
          ==========     ========  =========  ==========

Net income per share -                                                          
basic:                                                                        
Income (loss) from                                                              
continuing opera-                                                           
tions . . . . . . . $ 3,234.84        (4.71) (6,794.00) (13,206.00)         
Income from discon-                                                             
tinued operations .      --           --      2,523.50    1,779.25          
Extraordinary gain. .  34,154.50        --         --          --               
          ----------     --------  ---------  ----------
Net income per share                                                            
basic and diluted. . $37,389.34        (4.71) (4,270.50) (11,426.75)          
          ==========     ========  =========  ==========

As of December 31, 2002, the Company had issued approximately         
1,863,000 shares of Class B, non par value stock and approximately 231,700      
of Class A, non par value stock.  The LLC Agreement provides for two            
classes of membership interests, Class A Shares and Class B Shares, which       
have substantially identical rights and economic value under the LLC            
Agreement; except that holders of Class A Shares are represented by a           
"Class A Representative" who must approve certain transactions proposed by      
Kaanapali Land  before they can be undertaken.  Class B Shares are held by      
Pacific Trail and various entities and individuals that are affiliated with     
Pacific Trail.  Class A Shares were issued under the Plan to claimants who      
had no such affiliation.                                                        

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(12) SUBSEQUENT EVENTS                                                          

On January 31, 2003, an option to purchase an approximate 11.5 acre   
site was exercised.  A non-refundable payment was made for $2 million           
(before closing costs and prorations).  The remainder of the purchase price     
is secured by a note due March 31, 2004 for approximately $14.4 million, a      
portion of which is subject to refund based on the number of hotel room         
units approved for construction on the site.                                    

An approximate 40 acre site has been offered for sale and is currently
under contract.  There are certain contingencies to the contract and there      
is no assurance that the transaction will be consummated under its existing     
or any other terms.                                                             

ITEM 14.  CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING           
AND FINANCIAL DISCLOSURE                                    

There were no changes in or disagreements with the accountants during 
the fiscal years 2002 and 2001.                                                 

ITEM 15.  FINANCIAL STATEMENT AND EXHIBITS                                      

(a)   The following documents are filed as part of this report:       

(1)   Financial Statements                                

          See Index to Financial Statements and Supplementary Data
filed with this report.                                   

(2)   Exhibits                                            

        See Index to Exhibits, which is incorporated herein by
reference.                                                

(b)   Exhibits:                                                       

         The Exhibits required by Item 601 of Regulation S-K are
   listed in the Index to Exhibits, which is incorporated herein
by reference.                                             

All other schedules have been omitted since the required information  
is presented in the financial statements and the related notes or is not        
applicable.                                                                     

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SIGNATURE         

Pursuant to the requirements of Section 13 or 15(d) of the Securities 
Exchange Act of 1934, the Company has duly caused this report to be signed      
on its behalf by the undersigned, thereunto duly authorized.                    

KAANAPALI LAND, LLC     

By:   Gailen J. Hull    
         Senior Vice President
Date: April 30, 2003    

10-12G
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EXHIBIT INDEX         

Exhibit No.      Exhibit                                                        
-----------      -------                                                        

2.1             Order Confirming Second Amendment Joint Plan of               
     Reorganization Dated June 11, 2002, including as an
   exhibit thereto, the Second Amended Joint Plan of
     Reorganization of Amfac Hawaii, LLC, Certain of its
          Subsidiaries and FHT Corporation Under Chapter 11 of the
      Bankruptcy Code incorporated herein by reference the
  Amfac Hawaii, LLC Current Report on Form 8-K for
          July 29, 2002 dated August 13, 2002 (File No. 33-24180).

2.2             Second Amended Disclosure Statement with Respect to           
    Joint Plan of Reorganization of Amfac Hawaii, LLC,
       Certain of its Subsidiaries and FHT Corporation Under
        Chapter 11 of the Bankruptcy Code, incorporated herein
        by reference from the Amfac Hawaii, LLC Current Report
     on Form 8-K for July 29, 2002 dated August 13, 2002
(File No. 33-24180).                          

3.1             Amended and Restated Limited Liability Company Agreement      
         of Kaanapali Land, LLC dated November 14, 2002 is filed
herewith.                                     

10.1             $10,000,000 loan agreement between Amfac Property              
      Development Corp. and City Bank at December 18, 1996
      filed as an exhibit to Amfac Hawaii, LLC's Form 10-K
       report for December 31, 1996 under the Securities Act
      of 1934 (File No. 33-24180) filed March 21, 1997 and
hereby incorporated by reference.             

10.2             General Lease S-3821, dated July 8, 1964, by and between       
        the State of Hawaii and East Kauai Water Company, Ltd.
(1)                                           

10.3             Amended and Restated Power Purchase Agreement, dated as        
       of June 15, 1992, by and between The Lihue Plantation
      Company, Limited and Citizens Utilities Company. (1)

10.4             U.S. Navy Waipio Peninsula Agricultural Lease, dated           
        May 26, 1964, between The United States of America (as
       represented by the U.S. Navy) and Oahu Sugar Company,
Ltd. (1)                                      

10.5             Amendment to the Robinson Estate Hoaeae Lease, dated           
          May 15, 1967, by and between various Robinsons, heirs of
        Robinsons, Trustees and Executors, etc. and Oahu Sugar
      Company, Limited amending and restating the previous
lease. (1)                                    

10.6             Amendment to the Campbell Estate Lease, dated April 16,        
         1970, between Trustees under the Will and of the Estate
      of James Campbell, Deceased, and Oahu Sugar Company,
        Limited amending and restating the previous lease. (1)

10.7             Bishop Estate Lease No. 24,878, dated June 17, 1977, by        
          and between the Trustees of the Estate of Bernice Pauahi
Bishop and Pioneer Mill Company, Limited. (1) 

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10.8             General Lease S-4229, dated February 25, 1969, by and          
       between the State of Hawaii, by its Board of Land and
          Natural Resources and Pioneer Mill Company, Limited. (1)

10.9             Honokohau Water License, dated December 22, 1980,              
      between Maui Pineapple Company Ltd. and Pioneer Mill
Company, Limited. (1)                         

10.10            Water Licensing Agreement, dated September 22, 1980, by        
     and between Maui Land & Pineapple Company, Inc. and
Amfac, Inc. (1)                               

10.11            Funding Agreement dated October 29, 2002 between               
          Kaanapali Land and certain affiliates is filed herewith.

10.12            Service Agreement, dated November 18, 1988, between            
        Amfac/JMB Hawaii, Inc., and Amfac Property Development
         Corp.; Amfac Property Investment Corp.; Amfac Sugar and
        Agribusiness, Inc.; Kaanapali Water Corporation; Amfac
        Agribusiness, Inc.; Kekaha Sugar Company, Limited; The
        Lihue Plantation Company; Oahu Sugar Company, Limited;
    Pioneer Mill Company, Limited; Puna Sugar Company,
Limited; H. Hackfeld & Co., Ltd.; and Waiahole
         Irrigation Company, Limited and JMB Realty Corporation,
       incorporated herein by reference to the Amfac Hawaii,
        LLC Annual Report on Form 10-K filed on March 22, 1989
     (File No. 33-24180) for the year ended December 31,
1988.                                         

(1)  Previously filed as exhibits to Amfac Hawaii, LLC's Registration 
Statement on Form S-1 (as amended) under the Securities Act of 1933 (File       
No. 33-24180) and hereby incorporated by reference.                             

Dates Referenced Herein   and   Documents Incorporated by Reference

				Referenced-On Page
This ‘10-12G’ Filing		Date		First		Last			Other Filings
		10/31/11		14
		12/31/08		46					10-K
		11/13/07		31
		12/1/06		15		47
		3/31/04		9		63			10-Q
Filed on:		5/1/03
		4/30/03		64
		4/25/03		34
		4/23/03		4		30
		4/15/03		19
		4/1/03		10
		3/10/03		47
		1/31/03		9		63
		1/2/03		27		58
		12/31/02		8		62
		12/1/02		15		47
		11/14/02		14		65
		11/13/02		3		41
		10/30/02		3		41
		10/29/02		66
		10/23/02		26		57
		8/13/02		65
		7/29/02		3		65
		6/28/02		47
		6/11/02		3		65
		3/19/02		23		54
		3/1/02		47
		2/27/02		3		41
		1/1/02		44		47
		12/31/01		13		53
		12/1/01		47
		9/11/01		10
		6/30/01		23		54
		5/3/01		26		57
		4/12/01		25		57
		3/19/01		25		56
		2/23/01		27		58
		1/3/01		25		56
		12/31/00		13		53
		12/28/00		45
		12/15/00		26		57
		12/1/00		47
		8/23/00		25		56
		3/2/00		25		56
		1/20/00		26		57
		1/1/00		37
		12/31/99		13
		12/2/99		25		56
		6/24/99		28		59
		12/31/98		13
		1/27/98		27		58
		3/21/97		65
		12/31/96		65
		12/18/96		65
		9/20/96		25		56
		1/11/96		28		59
		6/15/92		65
									List all Filings

15 Subsequent Filings that Reference this Filing

  As Of               Filer                 Filing    For·On·As Docs:Size             Issuer                      Filing Agent

 5/15/24  Kaanapali Land LLC                10-Q        3/31/24   41:2M                                     Elec Filing Sys… Svcs/FA
 3/27/24  Kaanapali Land LLC                10-K       12/31/23   62:4.9M                                   Elec Filing Sys… Svcs/FA
11/14/23  Kaanapali Land LLC                10-Q        9/30/23   47:2.8M                                   Elec Filing Sys… Svcs/FA
 8/14/23  Kaanapali Land LLC                10-Q        6/30/23   46:2.6M                                   Elec Filing Sys… Svcs/FA
 5/15/23  Kaanapali Land LLC                10-Q        3/31/23   45:2.2M                                   Elec Filing Sys… Svcs/FA
 4/11/23  Kaanapali Land LLC                10-K       12/31/22   59:4.9M                                   Elec Filing Sys… Svcs/FA
11/14/22  Kaanapali Land LLC                10-Q        9/30/22   48:2.8M                                   Elec Filing Sys… Svcs/FA
 8/11/22  Kaanapali Land LLC                10-Q        6/30/22   47:2.7M                                   Elec Filing Sys… Svcs/FA
 3/30/22  Kaanapali Land LLC                10-K       12/31/21   62:5.1M                                   Elec Filing Sys… Svcs/FA
11/12/21  Kaanapali Land LLC                10-Q        9/30/21   43:2.6M                                   Elec Filing Sys… Svcs/FA
 8/12/21  Kaanapali Land LLC                10-Q        6/30/21   43:2.5M                                   Elec Filing Sys… Svcs/FA
 5/14/21  Kaanapali Land LLC                10-Q        3/31/21   45:1.8M                                   Elec Filing Sys… Svcs/FA
 3/25/21  Kaanapali Land LLC                10-K       12/31/20   66:4.4M                                   Elec Filing Sys… Svcs/FA
11/12/20  Kaanapali Land LLC                10-Q        9/30/20   46:2.1M                                   Elec Filing Sys… Svcs/FA
 8/13/20  Kaanapali Land LLC                10-Q        6/30/20   46:2M                                     Elec Filing Sys… Svcs/FA