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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-K
(Mark One)
[ X ] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended December 31, 2002
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the transition period from to
Commission file number 0-6510
MAUI LAND & PINEAPPLE COMPANY, INC.
(Exact name of registrant as specified in its charter)
HAWAII 99-0107542
(State or other jurisdiction (IRS Employer Identification
of incorporation or organization) number)
120 KANE STREET, P. O. BOX 187, KAHULUI, MAUI, HAWAII 96733-6687
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (808) 877-3351
Securities registered pursuant to Section 12(b) of the Act:
Title of Each Class Name of Each Exchange on Which Registered
Common Stock, American Stock Exchange
without Par Value
Indicate by check mark whether the registrant (1) has filed
all reports required to be filed by Section 13 or 15(d) of the
Securities Exchange Act of 1934 during the preceding 12 months
(or for such shorter period that the registrant was required to
file such reports), and (2) has been subject to such filing
requirements for the past 90 days. Yes [X] No [ ]
Indicate by check mark if disclosure of delinquent filers
pursuant to Item 405 of Regulation S-K is not contained herein,
and will not be contained, to the best of registrant's knowledge,
in definitive proxy or information statements incorporated by
reference in Part III of this Form 10-K or any amendment to this
Form 10-K. [X]
The aggregate market value, as of June 28, 2002, of the
voting stock held by non-affiliates of the registrant was
$34,070,000. This computation assumes that all directors,
executive officers and persons known to the Company to be the
beneficial owners of more than ten percent of the Company's
common stock are affiliates. Such assumption should not be
deemed conclusive for any other purpose.
Indicate the number of shares outstanding of each of the
issuer's classes of common stock, as of the latest practicable
date.
Class Outstanding at February 7, 2003
Common Stock, no par value 7,195,800 shares
Documents incorporated by reference:
Parts I, II and IV -- Portions of the 2002 Annual Report to
Security Holders.
Part III - Portions of Proxy Statement dated March 31, 2003.
Exhibit Index--pages 18 to 21
PART I
Item 1. BUSINESS
(a) General
Maui Land & Pineapple Company, Inc. is a Hawaii corporation,
the successor to a business organized in 1909. The Company
consists of a landholding and operating parent company as well as
its principal wholly owned subsidiaries, Maui Pineapple Company,
Ltd. and Kapalua Land Company, Ltd. The "Company," as used
herein, refers to the parent and all of its subsidiaries.
The Company participates in joint ventures that are
accounted for by the equity method. The most significant of
these joint ventures is Kaahumanu Center Associates, the owner
and operator of a regional shopping center.
The industry segments of the Company are as follows:
(1) Pineapple - includes growing pineapple,
canning pineapple in tinplated steel containers
fabricated by the Company, production of pineapple
juice and fresh cut pineapple products and
marketing of canned pineapple products, pineapple
juice products and fresh whole and fresh cut
pineapple products.
(2) Resort - includes the development and sale of
resort real estate, property management and the
operation of recreational and retail facilities
and utility companies at Kapalua, Maui.
(3) Commercial & Property - includes the
Company's investment in Kaahumanu Center
Associates, the Napili Plaza shopping center, and
non-resort real estate development, rentals and
sales. It also includes the Company's land
entitlement and land and water asset management
activities.
(b) Financial Information About Segments
The information set forth under Note 13 to Consolidated
Financial Statements on page 18 of the Maui Land & Pineapple
Company, Inc. 2002 Annual Report is incorporated herein by
reference.
(c) Narrative Description of Business
(1) Pineapple
Maui Pineapple Company, Ltd. is the operating subsidiary for
the Company's Pineapple segment. It owns and operates fully
integrated facilities for the production of pineapple products.
Pineapple is cultivated on two Company-operated plantations
on Maui, Upcountry Maui and West Maui, which provided
approximately 92% of the fruit processed in 2002. The balance of
fruit processed was purchased from an independent Maui grower.
Two pineapple crops are normally harvested from each new
planting. The first, or plant crop, is harvested approximately
18 to 23 months after planting, and the second, or ratoon crop,
is harvested 12 to 14 months later. A third crop, the second
ratoon, may be harvested depending on a number of conditions.
Harvested pineapple is processed at the Company's cannery in
Kahului, Maui, where a full line of canned pineapple products is
produced, including solid pineapple in various grades and styles,
juice and juice concentrates. The cannery is located in a
foreign trade zone and operates most of the year. In 2002,
approximately 33% of production volume took place during June,
July and August. The metal containers used in canning pineapple
are produced in a Company-owned can plant on Maui. The metal is
imported from manufacturers in Japan. A warehouse is maintained
at the cannery site for inventory purposes.
The Company sells canned pineapple products as store-brand
pineapple with 100% HAWAIIAN U.S.A. stamped on the can lid. Its
products are sold principally to large grocery chains, other food
processors, wholesale grocers, the United States government and
to organizations offering a complete buyers' brand program to
affiliated chains and wholesalers serving both retail and food
service outlets. A substantial volume of the Company's pineapple
products is marketed through food brokers.
The Company sells fresh whole pineapple and fresh cut
pineapple products from Hawaii to retail and wholesale grocers in
Hawaii and the continental United States. Research to develop
new fresh cut and other fresh and processed pineapple products is
ongoing. The Company has a U.S. patent on its fresh cut
pineapple technology, which enhances the quality of the product
while extending the shelf life. The extended shelf life allows
the Company to ship its fresh cut product by ocean vessel in
refrigerated containers and set up local warehouse programs,
thereby facilitating distribution to retailers.
The Company sells pineapple juice and pineapple juice
blended with orange juice in plastic polyethyleneteraphthalate
(PET) bottles in various sizes to large grocery chains in the
continental U.S. The pineapple juice ingredients are shipped in
bulk from the Company's cannery on Maui to co-packers on the
mainland that bottle the juice to the Company's specifications.
As a service to its customers, the Company maintains
inventories of its products in public warehouses in the
continental U.S. The balance of its products is shipped directly
from Hawaii to its customers. The Company's canned pineapple
products are shipped from Hawaii by ocean transportation and are
then taken by truck or rail to customers or to public warehouses.
Fresh whole and fresh cut pineapple is shipped by air or by ocean
transportation.
In 2002, approximately 20 U.S. customers accounted for about
69% of the Company's pineapple sales from Hawaii. Export sales,
primarily to Japan, Canada and Western Europe, amounted to
approximately 2.7%, 2.1% and 3.3% of the Company's pineapple
sales from Hawaii in 2002, 2001 and 2000, respectively. Sales to
the United States government, mainly the Department of
Agriculture, amounted to approximately 16.5%, 19.2% and 12.3% of
total pineapple sales in 2002, 2001 and 2000, respectively. The
Company's pineapple sales office is in Concord, California.
Royal Coast Tropical Fruit Company, Inc. (a wholly owned
subsidiary of Maui Pineapple Company, Ltd.) markets pineapple
products produced outside of the state of Hawaii. Premium
Tropicals International LLC, a joint venture between Royal Coast
Tropical Fruit Company, Inc. and an Indonesian pineapple grower
and canner, markets and sells Indonesian canned pineapple in the
United States. Royal Coast Tropical Fruit Company, Inc. has a
51% ownership in a pineapple production subsidiary in Central
America. Pineapple cultivated in Central America is sold
principally as fresh whole fruit to the Company's customers in
the United States and Europe. Sales of pineapple from the
Central American subsidiary began in the fourth quarter of 2000.
The Company sells its products in competition with both
foreign and U.S. companies. Its principal competitors are three
U.S. companies, Dole Food Company, Inc., Del Monte Food Co., and
Del Monte Fresh Produce Company, which produce substantial
quantities of pineapple products, a significant portion of which
is produced in Central America and Southeast Asia. Other
producers of pineapple products in Thailand and Indonesia also
are a major source of competition. Foreign production has the
advantage of lower labor costs. The Company's principal
marketing advantages are the high quality of its fresh and canned
pineapple, the relative proximity to the U.S. West Coast fresh
fruit market and being the only U.S. canner of pineapple. Other
fresh and canned fruits and fruit juices also are a source of
competition. The price of the Company's products is influenced
by supply and demand of pineapple and other fruits and juices.
The availability of water for irrigation is critical to the
cultivation of pineapple. The Upcountry Maui area is commonly
susceptible to drought conditions, which can adversely affect
pineapple operations by resulting in poor yields (tons per acre)
and lower recoveries (the amount of saleable product per ton of
fruit processed). Approximately 83% of the fields in the
Company's Upcountry Maui plantation (Haliimaile) are equipped
with drip irrigation systems. Fields that are not drip irrigated
are in areas that typically receive adequate rainfall. The
Company's drip irrigation systems and Company controlled or
operated water sources help to mitigate the effects of periodic
drought conditions. However, during periods of prolonged
drought, the water supply can drop below levels that are
necessary to meet all of the Haliimaile plantation's water
requirements.
For further information regarding Pineapple operations, see
Management's Discussion and Analysis of Financial Condition and
Results of Operations.
(2) Resort
Kapalua Resort is a master-planned, golf resort community on
Maui's northwest coast. The Resort encompasses 1,650 acres
bordering the ocean with three white sand beaches and includes
two hotels, eight residential subdivisions, three championship
golf courses, two ten-court tennis facilities, a 22,000 square
foot shopping center and over ten restaurants. Water and sewer
transmission utilities are included in the Resort's operating
activities. Approximately 300 of the 1,650 acres are presently
undeveloped of which approximately 40 acres are zoned and
entitled for resort development.
Kapalua Land Company, Ltd. is the developing and operating
subsidiary of the Company's Resort segment. The Resort segment
includes the following wholly owned subsidiaries of the Company:
Kapalua Water Company, Ltd. and Kapalua Waste Treatment Company,
Ltd., public utilities providing water and waste transmission
services for the Kapalua Resort; Kapalua Advertising Company,
Ltd., an in-house advertising agency; and Kapalua Realty Company,
Ltd. (wholly owned by Kapalua Land Company, Ltd.), a general
brokerage real estate company located within the Resort.
The Company, through subsidiaries and joint ventures, developed
the Kapalua Resort, which opened in 1975 with The Bay Course. At
Kapalua, the Company owns three golf courses (The Bay, The
Village and The Plantation Courses), one tennis facility (The
Tennis Garden), a shopping center (The Kapalua Shops), the land
under both hotels (The Ritz-Carlton, Kapalua and Kapalua Bay
Hotel), as well as the acreage available for development and
various on-site administrative and maintenance facilities.
The Company operates the golf and tennis facilities, the
shopping center, ten retail shops, a vacation rental program (The
Kapalua Villas), and certain services to the Resort, including
shuttle, security and maintenance of common areas. The Company
is the ground lessor under long-term leases for both hotels and
also receives rental income from certain other properties. The
Company manages The Kapalua Club, a membership program that
provides certain benefits and privileges within the Resort for
its members.
Pineapple Hill Estates is a 31 half-acre custom lot
subdivision in the Kapalua Resort. Substantially all of the lots
were sold at the end of 2002.
The Coconut Grove on Kapalua Bay, 36 luxury beachfront
condominiums, were completed and sold in 2001. This project was
developed on the 12-acre parcel adjacent to the Kapalua Bay Hotel
by Kapalua Coconut Grove LLC, a 50/50 joint venture between the
Company and YCP Site 29, Inc., a subsidiary of Lend Lease
Corporation Limited, of Australia.
In 2000, the Kapalua Golf Academy, the Hale Irwin-designed
Village Course practice facility and the Village Clubhouse opened
for business. The clubhouse and golf academy development include
an 18-hole putting course and two commercial retail parcels.
This development provides the commercial foundation for the
Central Resort area. The current master plan includes a future
commercial Town Center, resort spa and additional residential
development. Design and entitlement work continue for the
Central Resort master plan.
The Company has begun the planning and entitlement process
for a proposed expansion of the Kapalua Resort into approximately
925 acres of Company-owned lands located upslope of the Resort.
If and when necessary governmental approvals are secured and the
development proceeds, this expansion would, under current plans,
include a possible expansion of the Resort's Village Golf Course,
development of up to 690 single and multifamily residential
units, and commercial components. Estimating the timing of
obtaining the necessary land use entitlement is difficult and it
may be several years before construction could start and product
is available for sale. Completion of this development could take
10 to 15 years.
The Kapalua Resort faces substantial competition from
alternative visitor destinations and resort communities in Hawaii
and throughout the world. Kapalua's marketing strategies target
upscale visitors with an emphasis on golf. In 2002,
approximately 9% of the visitors to Maui were international
travelers and 91% were domestic. Kapalua's primary resort
competitors on Maui are Kaanapali, which is approximately five
miles from Kapalua, and Wailea on Maui's south coast. Kapalua's
total guestroom inventory accounts for approximately 10% of the
units available in West Maui and approximately 6% of the total
inventory on Maui.
Nationally televised professional golf tournaments have been
a major marketing tool for Kapalua. Since January 1999, Kapalua
has hosted the Mercedes Championships, the season opening event
for the PGA TOUR. Through the non-profit organization, Kapalua
Maui Charities, Inc., the Company has agreements with Mercedes-
Benz and the PGA TOUR to host and manage this event at Kapalua
through January 2006. Advertising placements in key publications
are designed to promote Kapalua through the travel trade,
consumer, golf and real estate media.
For further information regarding Resort operations, see
Management's Discussion and Analysis of Financial Condition and
Results of Operations.
(3) Commercial & Property
Queen Ka'ahumanu Center (formerly Kaahumanu Center) is the
largest retail and entertainment center on Maui with a gross
leasable area (GLA) of approximately 570,000 square feet. Queen
Ka'ahumanu Center is owned by Kaahumanu Center Associates (KCA),
a 50/50 partnership between the Company, as general partner, and
the Employees' Retirement System of the State of Hawaii, as a
limited partner. As of December 31, 2002, 135 tenants occupied
98% of the available GLA. Queen Ka'ahumanu Center faces
substantial competition from other retail centers in Kahului and
other areas of Maui. Kahului has approximately nine major
shopping center destinations with a combined GLA of approximately
2.1 million square feet of retail space. Queen Ka'ahumanu
Center's primary competitors are the Maui Mall and the Maui
Marketplace, both located within three miles of Queen Ka'ahumanu
Center.
Napili Plaza is a 45,000 square foot retail and commercial
office center located in West Maui. As of December 31, 2002, 22
tenants occupied 79% of the GLA. Napili Plaza faces competition
from several retail locations in the Napili area, which have
approximately 231,000 square feet of GLA.
The Company's land entitlement and land and asset management
activities are included in the Commercial & Property segment.
Land entitlement is a lengthy process of obtaining the required
county, state and federal approvals to proceed with planned
development and use of the Company's land and satisfying all
conditions and restrictions imposed in connection with such
governmental approvals. The Company actively works with the
community and with regulatory agencies and legislative bodies at
all levels of government to obtain necessary entitlements
consistent with the needs of the community.
For further information regarding Commercial & Property
operations, see Management's Discussion and Analysis of Financial
Condition and Results of Operations.
(4) Employees
In 2002, the Company employed approximately 1,870 employees.
Pineapple operations employed approximately 500 full-time and
approximately 780 seasonal or intermittent employees.
Approximately 57% of the Pineapple operations employees were
covered by collective bargaining agreements. Resort operations
employed approximately 460 employees, of which approximately 11%
were part-time employees and approximately 30% were covered by
collective bargaining agreements. The Company's Commercial &
Property operations employed approximately 80 employees and
approximately 30 employees were engaged in administrative
activities.
(5) Other Information
The Company's Pineapple segment engages in continuous
research to develop techniques to reduce costs through crop
production and processing innovations and to develop and perfect
new products. Improved production systems have resulted in
increased productivity by the labor force. Research and
development expenses approximated $1,004,000 in 2002, $1,073,000
in 2001 and $984,000 in 2000.
The Company has reviewed its compliance with federal, state
and local provisions that regulate the discharge of materials
into the environment or otherwise relate to the protection of the
environment. The Company does not expect any material future
financial impact as a result of compliance with these laws.
The Company has a commitment relating to the filtration of
water wells, as described in Note 14 to Consolidated Financial
Statements. The Company is unable to estimate the range of
potential financial impact for the possible filtration cost for
any future wells acquired or drilled by the County of Maui and,
therefore, has not made a provision in its financial statements
for such costs.
The Company expects to remediate certain soils on a Company-
owned development parcel that contain pesticide residues, as
described in Note 14 to Consolidated Financial Statements. The
cost of remediation will depend on the various alternatives as to
use of the property and the method of remediation. Until the
Company makes further progress on obtaining the proper
entitlements for the parcel, the ultimate use of the property
remains uncertain and therefore an estimate of the remediation
cost cannot be made.
(d) Financial Information About Geographic Areas
Revenues and long-lived assets attributable to foreign
countries were not material for the last three years.
Executive Officers of Registrant
Below is a list of the names and ages of the Company's
executive officers, indicating their position with the Company
and their principal occupation during the last five years. The
current terms of the executive officers expire in May of 2003 or
at such time as their successors are elected.
Gary L. Gifford (55) President and Chief Executive Officer
since 1995. Mr. Gifford has announced
his retirement effective May 27, 2003.
Paul J. Meyer (55) Executive Vice President/Finance since
1984
Douglas R. Schenk (50) Executive Vice President/Pineapple since
1995
Donald A. Young (55) Executive Vice President/Resort &
Commercial Property since 2001;
Executive Vice President/Resort since
1995
J. Susan Corley (59) Vice President/Human Resourses since
2000; Director/Human Resourses 1998 to
2000; Director/Industrial Relations of
Reynolds Metals Co., Inc. 1994 to 1998
Scott A. Crockford (47) Vice President/Retail Property since
1995
Robert M. McNatt (56) Vice President/Land Planning &
Development since 2001; Vice
President/Development of Kapalua Land
Company since 1996
Warren A. Suzuki (50) Vice President/Land & Water Asset
Management since 2001; Vice
President/Land Management & Development
since 1995
Item 2. PROPERTIES
The Company owns approximately 28,600 acres of land on Maui.
Approximately 30% of the acreage is used directly or indirectly
in the Company's operations and the remaining land is primarily
in pasture or forest reserve. This land, most of which was
acquired from 1911 to 1932, is carried on the Company's balance
sheet at cost. The Company believes it has clear and
unencumbered marketable title to all such property, except for
the following:
(a) a perpetual conservation easement granted to the State of
Hawaii on a 13-acre parcel at Kapalua;
(b) certain easements and rights-of-way that do not materially
affect the Company's use of its property;
(c) a mortgage on approximately 4,400 acres used in pineapple
operations, which secures the Company's $15 million term loan
agreement;
(d) a mortgage on the three golf courses at Kapalua, which
secures the Company's $25 million revolving credit facility;
(e) a permanent conservation easement granted to The Nature
Conservancy of Hawaii, a non-profit corporation, covering
approximately 8,600 acres of forest reserve land;
(f) a $4,513,000 mortgage on the fee interest in Napili Plaza
shopping center; and
(g) a small percentage of the Company's land in various locations
on which multiple claims exist, for some of which the
Company has initiated quiet title actions.
Approximately 22,800 acres of the Company's land are located
in West Maui, approximately 5,700 acres are located in East Maui
(Upcountry) and approximately 28 acres are located in Kahului,
Maui.
The 22,800 acres in West Maui comprise a largely contiguous
parcel that extends from the sea to an elevation of approximately
5,700 feet and includes nine miles of ocean frontage with
approximately 3,300 lineal feet along sandy beaches, as well as
agricultural and grazing lands, gulches and heavily forested
areas. The West Maui acreage includes approximately 3,600 acres
comprising the Company's Honolua pineapple plantation and
approximately 1,650 acres designated for the Kapalua Resort.
The East Maui property is situated at elevations between
1,000 and 3,000 feet above sea level on the slopes of Haleakala
and approximately 3,140 acres are in pineapple operations as the
Company's Haliimaile plantation.
The Kahului acreage includes a can manufacturing plant and a
pineapple-processing cannery with interconnected warehouses at
the cannery site where finished product is stored and the
Company's administrative offices.
Approximately 3,000 acres of leased land are used in the
Company's pineapple operations. A major operating lease covering
approximately 1,500 acres of land expired on December 31, 1999
and is currently being renegotiated for a minimum term of ten
years. Thirteen leases expiring at various dates through 2018
cover the balance of the leased property. The aggregate land
rental for all leased land was $573,000 in 2002.
The Company's 51% owned subsidiary owns approximately 2,500
acres and leases approximately 235 acres of land in Costa Rica,
which is used for pineapple production. The 2,500 acres secures
the subsidiary's $1.3 million non-revolving term loan.
Item 3. LEGAL PROCEEDINGS
On April 5, 2001, the Company filed a lawsuit against Del
Monte Fresh Produce Company, Del Monte Fresh Produce (N.A.), and
Del Monte Fresh Produce (Hawaii), Inc. (collectively, Del Monte
Fresh), Maui Pineapple Company, Ltd., et al. v. Del Monte Fresh
Produce (Hawaii), Inc., et al. Civil No. 01-1-0173(1), (Circuit
Court of the Second Circuit, State of Hawaii). Del Monte Fresh
is one of the Company's principal competitors in the fresh
pineapple products business. In this lawsuit, the Company
maintains that it co-owns and has the right to grow, develop,
market, license and otherwise use two hybrid pineapple varieties
that were jointly developed by the Company and the predecessor of
Del Monte Fresh through the Pineapple Research Institute of
Hawaii. The first hybrid, which the Company refers to as "73-50"
and which Del Monte Fresh refers to as "CO-2" is marketed by the
Company under its "Hawaiian Gold" registered trademark. The
second hybrid, which the Company refers to as "73-114" and which
Del Monte Fresh refers to as "MD-2" is marketed by the Company
outside the United States under its "Royal Coast" (registered)
label and is marketed by Del Monte Fresh as "Del Monte Gold -
Extra-Sweet Pineapple" (registered). Del Monte Fresh disputes
the Company's co-ownership of and rights to these hybrids. In
the lawsuit, the Company seeks declaratory relief regarding its
co-ownership and rights as well as monetary damages, restitution,
injunctive relief, legal fees and costs and punitive damages.
Del Monte Fresh disputes the Company's co-ownership of and rights
to these hybrids and has asserted a counterclaim against the
Company seeking declaratory relief as well as damages. Discovery
is ongoing in this action and trial date has been set for
June 16, 2003.
On April 12, 2001, the Company filed a separate lawsuit
against Del Monte Fresh as well as Fresh Del Monte Produce, Inc.
and Del Monte Corporation, Maui Pineapple Company, Ltd., et al.
v. Del Monte Corporation, et al., Case No: C 01-01449 CRB, in the
United States District Court For the Northern District of
California (San Francisco Division). In this lawsuit, the
Company maintains that the defendants have, in their marketing of
pineapple and other fruit and vegetable products, infringed on
and diluted the Company's "Hawaiian Gold" registered trademark
in violation of the federal Lanham Act and state and common law
prohibitions on unfair competition, dilution, and trademark and
advertising infringement. In November 2002, the parties to this
lawsuit agreed to resolve all disputes and fully settle and
compromise the claims related to the Company's allegations that
Del Monte's use of the names "Del Monte Hawaiian Gold," "Del Monte
Hawaii Gold," and "Del Monte Gold" infringed upon the Company's
HAWAIIAN GOLD trademarks and a settlement agreement is in the
process of being finalized. One of the defendants in this action,
Del Monte Fresh Produce N.A., Inc., has filed a counterclaim
alleging that the Company has infringed on its patent on one of
the pineapple hybrid varieties that is the subject of the Second
Circuit Court, State of Hawaii action that is described in the
paragraph above. In that counterclaim, Del Monte seeks
injunctive relief, damages, treble damages, interest and
attorneys' fees. On January 31, 2003, Del Monte Fresh Produce
N.A., Inc, filed a motion to dismiss its patent counterclaim
with prejudice stating that its patent is not valid. The
motion is set for hearing on April 4, 2003.
Item 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
None.
PART II
Item 5. MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED
STOCKHOLDER MATTERS
The information set forth under the caption "Common Stock"
on page 20 of the Maui Land & Pineapple Company, Inc. 2002 Annual
Report is incorporated herein by reference.
Item 6. SELECTED FINANCIAL DATA
The information set forth under the caption "Selected
Financial Data" on page 20 of the Maui Land & Pineapple Company,
Inc. 2002 Annual Report is incorporated herein by reference.
Item 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
"Management's Discussion and Analysis of Financial Condition
and Results of Operations" on pages 21 through 24 of the Maui
Land & Pineapple Company, Inc. 2002 Annual Report is incorporated
herein by reference.
Item 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET
RISK
"Market Risk" on page 24 of the Maui Land & Pineapple
Company, Inc. 2002 Annual Report is incorporated herein by
reference.
Item 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
The "Independent Auditors' Report," "Consolidated Financial
Statements," "Notes to Consolidated Financial Statements" and
"Quarterly Earnings (unaudited)" on pages 7 through 19 of the
Maui Land & Pineapple Company, Inc. 2002 Annual Report are
incorporated herein by reference.
Item 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON
ACCOUNTING AND FINANCIAL DISCLOSURE
None.
PART III
Item 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT
The information set forth under the captions "Section 16(a)
Beneficial Ownership Reporting Compliance" and "Election of
Directors" through the subcaption "Certain Transactions" on pages
7 through 8 of the Maui Land & Pineapple Company, Inc. Proxy
Statement, dated March 31, 2003, is incorporated herein by
reference.
Information regarding the registrant's executive officers is
included in
Part I, Item 1. BUSINESS.
Item 11. EXECUTIVE COMPENSATION
The information set forth under the caption "Executive
Compensation" on pages 10 through 14 and under the subcaption
"Directors' Meetings and Committees" on page 8 of the Maui Land &
Pineapple Company, Inc. Proxy Statement, dated
March 31, 2003, is incorporated herein by reference.
Item 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND
MANAGEMENT
The information set forth under the caption "Security
Ownership of Certain Beneficial Owners and Management" on pages 4
through 7 of the Maui Land & Pineapple Company, Inc. Proxy
Statement, dated March 31,2003, is incorporated herein by
reference.
Item 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
The information set forth under the caption "Compensation
Committee Interlocks and Insider Participation" on page 14 of the
Maui Land & Pineapple Company, Inc. Proxy Statement, dated
March 31, 2003, is incorporated herein by reference.
Item 14. CONTROLS AND PROCEDURES
(a) Evaluation of disclosure controls and procedures. Within
the 90-day period prior to the date of this report, the
Company's principal executive officer and principal
financial officer evaluated the effectiveness of the
Company's disclosure controls and procedures. Based on this
evaluation, it was concluded that the Company's disclosure
controls and procedures are effective in timely identifying
material information that should be disclosed in this
report.
(b) Changes in internal controls. There have been no changes in
the Company's internal controls or other factors that could
significantly affect the Company's disclosure controls and
procedures subsequent to the date the evaluation was
undertaken.
PART IV
Item 15. EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS ON
FORM 8-K
(a) 1. Financial Statements
The following Financial Statements of Maui Land & Pineapple
Company, Inc. and subsidiaries and the Independent Auditors'
Report are included in Item 8 of this report:
Consolidated Balance Sheets, December 31, 2002 and 2001
Consolidated Statements of Operations and Retained Earnings
for the Years
Ended December 31, 2002, 2001 and 2000
Consolidated Statements of Comprehensive Income 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
(a) 2. Financial Statement Schedules
The following Financial Statement Schedule of Maui Land &
Pineapple Company, Inc. and subsidiaries and the Independent
Auditors' Report is filed herewith:
II. Valuation and Qualifying Accounts for the Years Ended
December 31, 2002, 2001 and 2000.
(a) 3. Exhibits
Exhibits are listed in the "Index to Exhibits" found on
pages 18 to 21 of this Form 10-K.
(b) Reports on Form 8-K
There were no reports on Form 8-K filed during the last
quarter of the period covered by this report.
(d) The Financial Statements of Kaahumanu Center Associates
for the Years Ended December 31, 2002, 2001 and 2000 are filed as
exhibit 99.1.
INDEPENDENT AUDITORS' REPORT
To the Stockholders and Directors of
Maui Land & Pineapple Company, Inc.:
We have audited the consolidated financial statements of Maui
Land & Pineapple Company, Inc. and its subsidiaries as of
December 31, 2002 and 2001 and for each of the three years in the
period ended December 31, 2002, and have issued our report
thereon, dated February 14, 2003. Such consolidated financial
statements and report are included in your 2002 Annual Report and
are incorporated herein by reference. Our audits also included
the financial statement schedule of Maui Land & Pineapple
Company, Inc. listed in Item 15(a)2. This financial statement
schedule is the responsibility of the Company's management. Our
responsibility is to express an opinion based on our audits. In
our opinion, the financial statement schedule, when considered in
relation to the basic financial statements taken as a whole,
presents fairly in all material respects the information set
forth therein.
/S/ DELOITTE & TOUCHE LLP
Honolulu, Hawaii
February 14, 2003
SCHEDULE II
MAUI LAND & PINEAPPLE COMPANY, INC.
AND SUBSIDIARIES
VALUATION AND QUALIFYING ACCOUNTS
FOR THE YEARS ENDED DECEMBER 31, 2002, 2001 AND 2000
ADDITIONS
(DEDUCTIONS)
ADDITIONS CHARGED
BALANCE AT CHARGED TO TO OTHER BALANCE
BEGINNING COSTS AND ACCOUNTS DEDUCTIONS AT END
DESCRIPTION OF PERIOD EXPENSES (describe)(a) (describe)(b) OF PERIOD
(Dollars in Thousands)
Allowance for
Doubtful Accounts
2002 $ 706 $ 112 $ 5 $(171) $ 652
2001 1,043 245 6 (588) 706
2000 793 465 -- (215) 1,043
(a) Recoveries.
(b) Write off of uncollectible accounts.
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the
Securities Exchange Act of 1934, the Registrant has duly caused
this report to be signed on its behalf by the undersigned,
thereunto duly authorized.
MAUI LAND & PINEAPPLE COMPANY, INC.
March 26, 2003 By /S/ GARY L. GIFFORD
Gary L. Gifford
President & Chief Executive
Officer
Pursuant to the requirements of the Securities Exchange Act of
1934, this report has been signed below by the following persons
on behalf of the Registrant and in the capacities and on the
dates indicated.
By /S/ RICHARD H. CAMERON Date MARCH 26, 2003
Richard H. Cameron
Chairman of the Board
By /S/ PAUL J. MEYER Date MARCH 26, 2003
Paul J. Meyer
Executive Vice President/Finance
(Principal Financial Officer)
By /S/ ADELE H. SUMIDA Date MARCH 26, 2003
Adele H. Sumida
Controller & Secretary
(Principal Accounting Officer)
By /S/ JOHN H. AGEE Date MARCH 26, 2003
John H. Agee
Director
By /S/ DAVID A. HEENAN Date MARCH 26, 2003
David A. Heenan
Director
By /S/ RANDOLPH G. MOORE Date MARCH 26, 2003
Randolph G. Moore
Director
By /S/ CLAIRE C. SANFORD Date MARCH 26, 2003
Claire C. Sanford
Director
By /S/ FRED E. TROTTER III Date MARCH 26, 2003
Fred E. Trotter III
Director
CERTIFICATIONS PURSUANT TO
SECTION 302 OF
THE SARBANES-OXLEY ACT OF 2002
CERTIFICATION
I, Paul J. Meyer, certify that:
1. I have reviewed this annual report on Form 10-K of Maui Land
& Pineapple Company, Inc.;
2. Based on my knowledge, this annual report does not contain
any untrue statement of a material fact or omit to state a
material fact necessary to make the statements made, in light of
the circumstances under which such statements were made, not
misleading with respect to the period covered by this annual
report;
3. Based on my knowledge, the financial statements, and other
financial information included in this annual report, fairly
present in all material respects the financial condition, results
of operations and cash flows of the registrant as of, and for,
the periods presented in this annual report;
4. The registrant's other certifying officers and I are
responsible for establishing and maintaining disclosure controls
and procedures (as defined in Exchange Act Rules 13a-14 and 15d-
14 ) for the registrant and have:
a. designed such disclosure controls and procedures to ensure
that material information relating to the registrant, including
its consolidated subsidiaries, is made known to us by others
within those entities, particularly during the period in which
this annual report is being prepared;
b. evaluated the effectiveness of the registrant's disclosure
controls and procedures as of a date within 90 days prior to the
filing date of this annual report (the "Evaluation Date"); and
c. presented in this annual report our conclusions about the
effectiveness of the disclosure controls and procedures based on
our evaluation as of the Evaluation Date;
5. The registrant's other certifying officers and I have
disclosed, based on our most recent evaluation, to the
registrant's auditors and the audit committee of registrant's
board of directors (or persons performing the equivalent
functions):
a. all significant deficiencies in the design or operation of
internal controls which could adversely affect the registrant's
ability to record, process, summarize and report financial data
and have identified for the registrant's auditors any material
weaknesses in internal controls; and
b. any fraud, whether or not material, that involves management
or other employees who have a significant role in the
registrant's internal controls; and
6. The registrant's other certifying officers and I have
indicated in this annual report whether there were significant
changes in internal controls or in other factors that could
significantly affect internal controls subsequent to the date of
our most recent evaluation, including any corrective actions with
regard to significant deficiencies and material weaknesses.
Date: MARCH 26, 2003
/S/ PAUL J. MEYER
Name: Paul J. Meyer
Title: Executive Vice
President/Finance
CERTIFICATION
I, Gary L. Gifford, certify that:
1. I have reviewed this annual report on Form 10-K of Maui Land
& Pineapple Company, Inc.;
2. Based on my knowledge, this annual report does not contain
any untrue statement of a material fact or omit to state a
material fact necessary to make the statements made, in light of
the circumstances under which such statements were made, not
misleading with respect to the period covered by this annual
report;
3. Based on my knowledge, the financial statements, and other
financial information included in this annual report, fairly
present in all material respects the financial condition, results
of operations and cash flows of the registrant as of, and for,
the periods presented in this annual report;
4. The registrant's other certifying officers and I are
responsible for establishing and maintaining disclosure controls
and procedures (as defined in Exchange Act Rules 13a-14 and 15d-
14 ) for the registrant and have:
a. designed such disclosure controls and procedures to ensure
that material information relating to the registrant, including
its consolidated subsidiaries, is made known to us by others
within those entities, particularly during the period in which
this annual report is being prepared;
b. evaluated the effectiveness of the registrant's disclosure
controls and procedures as of a date within 90 days prior to the
filing date of this annual report (the "Evaluation Date"); and
c. presented in this annual report our conclusions about the
effectiveness of the disclosure controls and procedures based on
our evaluation as of the Evaluation Date;
5. The registrant's other certifying officers and I have
disclosed, based on our most recent evaluation, to the
registrant's auditors and the audit committee of registrant's
board of directors (or persons performing the equivalent
functions):
a. all significant deficiencies in the design or operation of
internal controls which could adversely affect the registrant's
ability to record, process, summarize and report financial data
and have identified for the registrant's auditors any material
weaknesses in internal controls; and
b. any fraud, whether or not material, that involves
management or other employees who have a significant role in the
registrant's internal controls; and
6. The registrant's other certifying officers and I have
indicated in this annual report whether there were significant
changes in internal controls or in other factors that could
significantly affect internal controls subsequent to the date of
our most recent evaluation, including any corrective actions with
regard to significant deficiencies and material weaknesses.
Date: MARCH 26, 2003
/S/ GARY L. GIFFORD
Name: Gary L. Gifford
Title: President &
Chief Executive Officer
INDEX TO EXHIBITS
The exhibits designated by an asterisk (*) are filed herewith.
The exhibits not so designated are incorporated by reference to
the indicated filing. All previous exhibits were filed with the
Securities and Exchange Commission in Washington D. C. under file
number 0-6510.
3. Articles of Incorporation and By-laws
3 (i) Restated Articles of Association, as of
February 24, 2000.
3 (ii) Bylaws (Amended as of March 29, 1999). Exhibit (3ii)
to Form 10-Q for the quarter ended March 31, 1999.
4. Instruments Defining the Rights of Security Holders.
Instruments defining the rights of holders of long-term
debt have not been filed as exhibits where the amount of
debt authorized thereunder does not exceed ten percent
of the total assets of the Company and its subsidiaries
on a consolidated basis. The Company hereby undertakes
to furnish a copy of any such instrument to the
Commission upon request.
4.1 (i) Amended and Second Restated Revolving Credit and Term
Loan Agreement, dated as of December 4, 1998. Exhibit
4.1(i) to Form 10-K for the year ended December 31, 1998.
(ii) 1999 Loan Modification Agreement, dated as of December 30,
1999.
(iii) 2000 Loan Modification Agreement, effective as of
June 30, 2000. Exhibit 4 to Form 10-Q for the quarter
ended June 30, 2000.
(iv) Loan Modification Agreement (December 2000), effective
as of December 11, 2000. Exhibit 4.1(iv) to Form 10-K for
the year ended December 31, 2000.
(v) Loan Modification Agreement (June 2001), effective as of
June 30, 2001. Exhibit 4.1(v) to Form 10-Q for the quarter
ended September 30, 2001.
(vi) Loan Modification Agreement (September 2001), effective
as of September 30, 2001. Exhibit 4.1(vi) to Form 10-K
for the year ended December 31, 2001.
(vii) Amended and Third Restated Revolving Credit and Term
Loan Agreement, dated as of December 31, 2001. Exhibit
4.1(vii) for Form 10-K for the year ended December 31,
2001.
(viii)* Loan Modification Agreement (December 2002),
effective as of December 31, 2002.
(ix)* Second Loan Modification Agreement, dated March 21, 2003
4.2 (i) Bridge Loan Agreement between Pacific Coast Farm
Credit Services, ACA and Maui Land & Pineapple Company,
Inc., dated December 30, 1998. Exhibit 4.2(i) to Form
10-K for the year ended December 31, 1998.
(ii) Term Loan Agreement between Pacific Coast Farm Credit
Services and Maui Land & Pineapple Company, Inc., entered
into as of June 1, 1999. Exhibit 4(A) to Form 10-Q for
the quarter ended June 30, 1999.
(iii) Modifications to Term Loan Agreement, dated February 16,
2000. Exhibit 4.2(iii) to Form 10-K for the year ended
December 31, 2000.
(iv) Amendment to Loan Agreement entered into on March 23, 2001
and effective as of December 31, 2000. Exhibit (4)A to
Form 10-Q for the quarter ended March 31, 2001.
(v) Amendment to Loan Agreement, made as of December 31, 2001.
Exhibit 4.2(v) for Form 10-K for the year ended December 31,
2001.
(vi)* Fifth Amendment to Term Loan Agreement, entered into on
March 18, 2003, and effective as of December 31, 2002.
10. Material Contracts
10.1(i) Limited Partnership Agreement of Kaahumanu Center
Associates, dated June 23, 1993. Exhibit (10)A to Form
10-Q for the quarter ended June 30, 1993.
(ii) Cost Overrun Guaranty Agreement, dated June 28,
1993. Exhibit (10)B of Form 10-Q for the quarter ended
June 30, 1993.
(iii) Environmental Indemnity Agreement, dated June 28, 1993.
Exhibit (10)C to Form 10-Q for the quarter ended June 30,
1993.
(iv) Indemnity Agreement, dated June 28, 1993. Exhibit (10)D
to Form 10-Q for the quarter ended June 30, 1993.
(v) Direct Liability Agreement, dated June 28, 1993. Exhibit
(10)E to Form 10-Q for the quarter ended June 30, 1993.
(vi) Amendment No. 1 to Limited Partnership Agreement of
Kaahumanu Center Associates. Exhibit (10)B to Form
8-K, dated as of April 30, 1995
(vii) Conversion Agreement, dated April 27, 1995. Exhibit (10)C
to Form 8-K, dated as of April 30, 1995.
(viii) Indemnity Agreement, dated April 27, 1995. Exhibit
(10)D to Form 8-K, dated as of April 30, 1995.
(ix)* Amendment No. 2 to Limited Partnership Agreement of
Kaahumanu Center Associates, dated December 30, 2002.
Portions of the exhibit filed herewith have been
omitted pursuant to a request for confidential
treatment under Rule 24b-2 of the Exchange Act.
10.2(i) Second Amended and Restated Hotel Ground Lease (The
Ritz-Carlton, Kapalua) between Maui Land & Pineapple
Company, Inc. (Lessor) and RCK Hawaii, LLC dba RCK
Hawaii-Maui (Lessee), effective as of January 31, 2001.
Exhibit 10.2(i) to Form 10-K for the year ended
December 31, 2000.
10.3 Compensatory plans or arrangements
(i) Executive Deferred Compensation Plan (revised as
of 8/16/91). Exhibit (10)A to Form 10-Q for the
quarter ended September 30, 1994.
(ii) Supplemental Executive Retirement Plan (effective as of
January 1, 1988). Exhibit (10)B to Form 10-K for the
year ended December 31, 1988.
(iii) Restated and Amended Executive Change-In-Control Severance
Agreement (Gary L. Gifford, President/CEO), dated as of
March 16, 1999. Exhibit 10.3 (iv) to Form 10-K for the
year ended December 31, 1998.
(iv) Restated and Amended Executive Change-In-Control
Severance Agreement (Paul J. Meyer, Executive Vice
President/Finance), dated as of March 17, 1999.
Exhibit 10.3 (v) to Form 10-K for the year ended
December 31, 1998.
(v) Restated and Amended Executive Change-In-Control
Severance Agreement (Donald A. Young, Executive Vice
President/Resort), dated as of March 16, 1999. Exhibit
10.3 (vi) to Form 10-K for the year ended December 31,
1998.
(vi) Restated and Amended Executive Change-In-Control
Severance Agreement (Douglas R. Schenk, Executive Vice
President/Pineapple), dated as of March 23, 1999.
Exhibit 10.3 (vii) to Form 10-K for the year ended
December 31, 1998.
(vii) Restated and Amended Change-In-Control Severance
Agreement (Warren A. Suzuki, Vice President/Land
Management), dated as of March 16, 1999. Exhibit
10.3 (viii) to Form 10-K for the year ended
December 31, 1998.
(viii) Restated and Amended Change-In-Control Severance
Agreement (Scott A. Crockford, Vice President/Retail
Property), dated as of March 16, 1999. Exhibit 10.3
(ix) to Form 10-K for the year ended December 31, 1998.
(ix) Executive Severance Plan, as amended through November 6,
1998. Exhibit 10.3 (x) to Form 10-K for the year ended
December 31, 1998.
10.4(i) Hotel Ground Lease between Maui Land & Pineapple
Company, Inc. and The KBH Company. Exhibit (10)B to
Form 10-Q for the quarter ended September 30, 1985.
(ii) Third Amendment of Hotel Ground Lease, dated and
effective as of September 5, 1996. Exhibit (10)A to
Form 10-Q for the quarter ended September 30, 1996.
10.5(i) Settlement Agreement and Release of All Claims
(Board of Water Supply of the County of Maui vs. Shell
Oil Company, et al.). Exhibit 10.5(i) to Form 10-K for
the year ended December 31, 1999.
11. Statement re computation of per share earnings:
Net Income (Loss) divided by weighted Average Common
Shares Outstanding equals Net Income (Loss) Per Common
Share.
13.* Annual Report to Security Holders: Maui Land &
Pineapple Company, Inc. 2002 Annual Report.
21. Subsidiaries of registrant:
All of the following were incorporated in the
State of Hawaii:
Maui Pineapple Company, Ltd.
Kapalua Land Company, Ltd.
Kapalua Advertising Company, Ltd.
Kapalua Water Company, Ltd.
Kapalua Waste Treatment Company, Ltd.
Honolua Plantation Land Company, Inc.
99. Additional Exhibits.
99.1* Financial Statements of Kaahumanu Center
Associates for the years ended December 31, 2002, 2001
and 2000.
99.2* Certification of Paul J. Meyer Pursuant to 18
U.S.C. Section 1350, As Adopted Pursuant to Section 906
of The Sarbanes-Oxley Act of 2002
99.3* Certification of Gary L. Gifford Pursuant to 18
U.S.C. Section 1350, As Adopted Pursuant to Section 906
of The Sarbanes-Oxley Act of 2002