[PREFERRED]
U.S. Securities and Exchange Commission
Operations Center, Stop 0-7
6432 General Green Way
Alexandria, VA 22312
Re: Amfac/JMB Hawaii, Inc.
Commission File No. 33-24180
Form 10-K
Gentlemen:
Enclosed, for the above-captioned registrant, is one paper
copy of which is manually executed of registrant's current
report on Form 10-K for the year ended December 31, 1995.
Please acknowledge receipt of the Form 10-K filing by signing
and returning the enclosed self-adrressed postcard.
Thank You,
Very truly yours,
By: Northbrook Corporation
Parent Company
By: _______________________
Gary Smith
Vice President
and Principal Accounting Officer
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-K
Annual Report Pursuant to Section 13 or 15(d)
of the Securities Act of 1934
For the fiscal year ended December 31, 1995 Commission File
Number 33-24180
AMFAC/JMB HAWAII, INC.
(Exact name of registrant as specified in its charter)
Hawaii 99-0217738
(State of organization) (I.R.S. Employer Identification No.)
AMFAC/JMB FINANCE, INC.
(Exact name of registrant as specified in its charter)
Illinois 36-3611183
(State of organization) (I.R.S. Employer Identification No.)
900 N. Michigan Ave., Chicago, Illinois 60611
(Address of principal executive office) (Zip Code)
Registrant's telephone number, including area code 312-440-4800
See Table of Additional Registrants Below.
Securities registered pursuant to Section 12(b) of the Act: None
Securities registered pursuant to Section 12(g) of the Act: None
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
State the aggregate market value of the voting stock held by
non-affiliates of the registrant. Not applicable.
As of February 26, 1996, each of Amfac/JMB Hawaii, Inc. and
Amfac/JMB Finance, Inc. had 1,000 shares of Common Stock
outstanding. All such Common Stock is owned by its respective
parent and not traded on a public market.
Certain pages of the prospectus of the registrant dated
December 5, 1988 and filed with the Commission pursuant to
Rules 424(b) and 424(c) under the Securities Act of 1933 are
incorporated by reference in Part III of this Annual Report on
Form 10-K.
ADDITIONAL REGISTRANTS (1)
Address,including,
zip code, and
Exact name of State or other IRS telephone number,
registrant as jurisdiction of Employer including area code of
specified in its incorporation or Identification registrant's principal
Charter organization Number executive offices
Amfac Property Hawaii 99-0150751 900 North Michigan Avenue
Development Corp. Chicago, Illinois 60611
312/440-4800
Amfac Property Hawaii 99-0202331 900 North Michigan Avenue
Investment Chicago, Illinois 60611
Corp. 312/440-4800
Amfac Sugar and Hawaii 99-0185633 900 North Michigan Avenue
Agribusiness, Chicago,Illinois 60611
Inc. 312/440-4800
Kaanapali Water Hawaii 99-0185634 900 North Michigan Avenue
Corporation Chicago, Illinois 60611
312/440-4800
Amfac Agri- Hawaii 99-0176334 900 North Michigan Avenue
business, Inc. Chicago, Illinois 60611
312/440-4800
Kekaha Sugar Hawaii 99-0044650 900 North Michigan Avenue
Company, Chicago, Illinois 60611
Limited 312/440-4800
The Lihue Hawaii 99-0046535 900 North Michigan Avenue
Plantation Chicago, Illinois 60611
Company, 312/440-4800
Limited
Oahu Sugar Hawaii 99-0105277 900 North Michigan Avenue
Company, Chicago, Illinois 60611
Limited 312/440-4800
Pioneer Mill Hawaii 99-0105278 900 North Michigan Avenue
Company, Chicago, Illinois 60611
Limited 312/440-4800
Puna Sugar Hawaii 99-0051215 900 North Michigan Avenue
Company, Chicago, Illinois 60611
Limited 312/440-4800
H. Hackfeld Hawaii 99-0037425 900 North Michigan Avenue
& Co., Ltd. Chicago, Illinois 60611
312/440-4800
Waiahole Hawaii 99-0144307 900 North Michigan Avenue
Irrigation Chicago, Illinois 60611
Company, 312/440-4800
Limited
Waikele Golf Hawaii 99-0304744 900 North Michigan Avenue
Club, Inc. Chicago, Illinois 60611
312/440-4800
1) The Additional Registrants listed are wholly-owned
subsidiaries of the registrant and are guarantors of the
registrant's Certificate of Land Appreciation Notes due
2008.
TABLE OF CONTENTS
Page
PART I
Item 1. Business 1
Item 2. Properties 7
Item 3. Legal Proceedings 12
Item 4. Submission of Matters to a Vote of Security Holders
12
PART II
Item 5. Market for the Company's and Finance's Common
Equity and Related Security Holder Matters 13
Item 6. Selected Financial Data 14
Item 7. Management's Discussion and Analysis of Financial
Condition and Results of Operations 16
Item 8. Financial Statements and Supplementary Data 30
Item 9. Changes in and Disagreements with Accountants on
Accounting and Financial Disclosure 62
PART III
Item 10. Directors and Executive Officers of the Registrant 62
Item 11. Executive Compensation 65
Item 12. Security Ownership of Certain Beneficial Owners and
Management 66
Item 13. Certain Relationships and Related Transactions 66
PART IV
Item 14. Exhibits, Financial Statement Schedules, and
Reports on Form 8-K 68
SIGNATURES 73
PART I
Item 1. Business
All references to "Notes" are to Notes to the
Consolidated Financial Statements contained in this report.
Amfac/JMB Hawaii, Inc. (the "Company"), has assets
substantially all of which are agricultural and developmental
real property and related assets located in Hawaii. The
Company is an affiliate of JMB Realty Corporation ("JMB") as a
result of the 1988 merger (the "Merger") of an affiliate of
JMB into Amfac, Inc. ("Amfac"), the former parent corporation
of the Company (see Note 1 for discussion of Amfac, Inc.
merger into its parent, Northbrook Corporation, in May 1995),
and the subsequent merger of a subsidiary of such affiliate
into Amfac Hawaii, Inc., which (after changing its name to
Amfac/JMB Hawaii, Inc.) continues as the surviving
corporation. Unless otherwise indicated, references herein to
the Company shall include the Company's subsidiaries.
The assets of the Company, held primarily through its
wholly-owned subsidiaries, consist principally of
approximately 50,900 acres of land, portions of which include
acreage (i) in the process of development into residential,
resort, commercial and industrial projects, (ii) currently
being managed and operated as recreational facilities, and
(iii) used in connection with the cultivation and processing
of agricultural products, principally sugar cane and related
sugar products. In addition, the Company leases approximately
55,350 acres of land used primarily in the production of sugar
cane and for access to water sources.
The real properties owned by the Company are located on the
four principal islands of the State of Hawaii: Oahu, Maui,
Kauai and Hawaii. The Company has no real property located
outside of the United States. The Company's real properties
are described in more detail under Item 2 below.
The real estate development and agricultural operations
of the Company comprise its two primary industry segments,
"Property" and "Agricultural", respectively. The Company
segregates total revenues, operating income (loss), total
assets, capital expenditures and depreciation and amortization
by each industry segment.
At December 31, 1995, the Company employed 959 persons.
PROPERTY. The Company is attempting to maximize the
value of its owned land through land use planning, management
and development. Such planning, management and development
take into account local zoning and economic and political
constraints in order to obtain the necessary land use
designations for development and realize appreciated values.
The Company also pursues opportunities, to the extent
economically advantageous, to sell undeveloped and partially
developed parcels of land, to develop directly the
improvements at a particular property and, in some instances,
to enter into joint venture arrangements for its land
development activities. The Company's land holdings on Maui
and Kauai are its primary sources of future land sale
revenues. However, due to current market conditions, the
difficulty in obtaining land use approvals and the high
development cost of required infrastructure, the planned
development of these land holdings and the ability to generate
cash flow from these land holdings are longer term in nature
than the Company's Waikele development on Oahu has been.
Approximately 1,300 acres of the land owned by the Company
are currently classified as urban district by the State of
Hawaii Land Use Commission and have various zoning and land
use approvals for residential, resort, commercial and
industrial development, including 500 acres for the Company's
three existing golf courses. Additional governmental
approvals, permits and certifications will be required to be
obtained with respect to the other 800 acres as part of the
development process. There can be no assurance, however, that
all of the necessary approvals or permits will be obtained.
An additional 2,700 acres of Company-owned land are in the
preliminary planning stages for urbanization and potential
future sale or development. The Company intends to sell or
develop all of such land in connection with various
residential, resort, commercial and light industrial projects.
The Company's development projects may be affected by
competition from other projects of a similar nature in Hawaii,
as well as from other states or countries offering resort-type
properties.
The Company's real estate development approach is intended
to enhance the value of its real property in successive
phases. The determination of whether to develop a property is
based on factors such as location, physical characteristics,
demographic patterns and perceived absorption rates, as well
as regulatory and environmental considerations, zoning,
availability of utilities and governmental services and
estimated profitability. Generally, once the determination
has been made to develop a property, the first step is to
design a master development plan. The Company then seeks to
obtain regulatory and environmental approvals. The approval
process, which often requires a lengthy period of time (often
at least three to five years), is a major factor in
determining the viability and prospects for profitability of
the Company's various development projects.
The first phase in the regulatory approval process usually
consists of obtaining proper state land use designations and
County planning and zoning approvals for the intended
development. Occasionally, environmental and special
management area approvals will be required, particularly if
the property borders the shoreline. Additionally, certain
other permits and approvals (such as grading permits, building
permits and subdivision approvals) must then be obtained.
Upon receipt of such approvals and permits, the Company may
then begin construction of infrastructure including roads,
water mains, sewer lines and other public facilities. The
expenditures for infrastructure are generally significant and
usually required early in the project development process.
All of the Company's development projects are subject to
approval and regulation by various federal, state and county
agencies, especially as it relates to the nature and extent of
improvements, zoning, building densities, environmental
impacts and in some instances marketing and sales. Generally,
governmental entities have the right to impose limits or
controls on growth in communities through limited land use
designations, restrictive zoning, density reduction, impact
fees and development requirements. Such limits and controls
have materially affected, and in the future may affect
materially, the utilization of the Company's real properties
and the costs associated with developing such properties.
Land use in Hawaii is regulated by both the State of Hawaii
and each county (Hawaii, Kauai, Maui and Oahu), each in
accordance with its own general set of objectives and
policies. At the State level, all land is classified into
four major land use districts: urban, rural, agricultural and
conservation. The Company believes that it will generally be
able to develop that portion of its land for which it has or
can reasonably obtain an urban district classification.
Conservation land is that land which is
necessary for preserving natural conditions (e.g., watershed
or prevention of soil erosion) and, hence, generally cannot be
developed. Agricultural and rural districts are not permitted
to have concentrated development. Certain lands, particularly
shoreline parcels, are subject to special regulatory scrutiny.
For these lands, the Company must obtain additional federal,
state and/or county approvals, including a special management
area permit from the county in which such land is located.
Certain other approvals are also necessary once zoning has
been obtained. Obtaining any and all of these approvals can
involve a substantial amount of time and expense, and
approvals may need to be resubmitted if there is any
subsequent, substantial deviation from previously submitted
plans.
In connection with seeking approvals for its development
plans, the Company has been required (and may be required in
the future) to make significant improvements in public
facilities (such as roads), to dedicate property for public
use, to provide employee and affordable housing units and to
make other concessions (monetary and otherwise). The ability
of the Company to perform its development activities may be
materially adversely affected by state or county restrictions
that may be imposed in certain communities because of
inadequate public facilities (such as roads and sewer
facilities) and/or by local opposition to continued growth.
The Company is subject to a number of statutes imposing
registration, filing and disclosure requirements with respect
to its residential real property developments including, among
others, the Federal Interstate Land Sales Full Disclosure Act,
the Federal Consumer Credit Protection Act and the State
Uniform Land Sales Practices Act.
During the past three years, the Company derived a
significant portion of its property revenues in two of those
years (1994 and 1993) from the sale of residential land
parcels to Schuler Homes, Inc., a local home builder in
Hawaii.
The Company currently owns no patents, trademarks, licenses
or franchises which are material to its business.
AGRICULTURE. Substantially all of the Company's
agricultural activities relate to the cultivation and
processing of sugar cane. Approximately 8,700 acres of the
Company's land holdings and approximately 16,000 acres of land
leased by the Company are currently under cultivation. The
remaining approximately 81,500 acres of owned and leased land
are predominantly conservation land and land appurtenant to
the cultivation of sugar cane. The Company is the second
largest producer of raw sugar in Hawaii.
During 1995, the Company implemented plans to restructure
its sugar operations, including consolidation of the
operations at its two Kauai plantations and changing to a
seasonal mode of operations at each plantation (consistent
with many other sugar operations). The Company anticipates
that cost savings will be associated with these changes.
Until June 1993, all of the sugar cane processed by the
Company's four operating sugar mills was sold to California
and Hawaiian Sugar Company ("C & H") under a long-term supply
contract. In June 1993, the Company's sugar plantation
subsidiaries, along with the other Hawaii sugar growers who
owned interests in C&H, consummated the sale of their
investment in C&H, which included their interests in C&H's
refinery in Crockett, California and in certain other C&H
assets, to another large Hawaii sugar grower. The Company's
subsidiaries received gross proceeds of approximately $35.7
million. The Company's sugar plantation subsidiaries
currently sell their
raw sugar production to the Hawaiian Sugar and Transportation
Company ("HSTC"), which is an agricultural cooperative owned
by the major Hawaii producers of raw sugar (including the
Company), under a new marketing agreement. HSTC sells the raw
sugar production to C&H (under its new ownership) pursuant to
a new long-term supply contract executed in conjunction with
this transaction. The terms of the supply contract do not
require a specified level of production by the Hawaii
producers; however, HSTC is obligated to sell and C&H is
obligated to purchase any raw sugar produced. HSTC returns to
its raw sugar suppliers proceeds based upon the domestic sugar
price less delivery and administrative costs. The Company
recognizes revenues and related cost of sales upon delivery of
its raw sugar by HSTC to C&H. Prior to the sale of the
Company's interest in C&H, revenue and related costs were
recognized upon the ultimate sale of refined sugar by C&H.
The price of raw sugar that the Company receives is based
upon the price of domestic sugar (less delivery and
administrative costs) as currently controlled by U.S.
Government price support legislation. As of the date of this
report, the United States Senate has approved a new Farm Bill,
which includes a sugar program similar in nature to the
program provided by the previous Farm Bill. This legislation
provides for a loan rate of 18 cents per pound, the same level
as today. However, the legislation includes certain other
adjustments to the sugar program, including making crop loans
recourse to the producer and repealing marketing allotments,
which may over time depress the domestic price of raw sugar.
The United States House of Representatives has not yet
approved a new Farm Bill; a vote is not expected until March
1996. The Company is hopeful that final legislation (approved
by both Houses of Congress and the President) will include
support for the domestic sugar industry on a comparable basis
with the previous legislation. However, at this stage there
can be no assurance that the government loan rate will not be
reduced or be eliminated entirely. Such a reduction or
elimination of the loan rate could have a material adverse
affect on the Company's agricultural operations, and possibly
could cause the Company to evaluate the cessation of its
remaining sugar cane operations.
In August 1993, the Company announced its plans to phase
out the sugar operations at its Oahu Sugar Company by mid-
1995, such phase out coinciding with the expiration of its
major land lease on Oahu. Oahu Sugar, which operated almost
entirely on leased land, had incurred losses in its sugar
operations in prior years and expected those losses to
continue in the future. For several months, Oahu Sugar had
negotiated with the plantation's major lessor to reach an
agreement on concessions in rent and other lease terms
required by Oahu Sugar to continue its agricultural
operations. To grant such concessions, the lessor required a
long-term commitment from the plantation that it would
continue its sugar operations. Because of the plantation's
losses, along with the future uncertainties posed by the
domestic agriculture price support legislation and
international trade policy, Oahu Sugar could not agree to such
a long-term commitment to stay in operation. Oahu Sugar
completed the final harvest of its crop in April 1995. The
Company has shut down Oahu Sugar and any estimated future
costs related to the shut down are not expected to have a
material adverse effect on the financial condition of the
Company.
In September 1992, Hurricane Iniki struck the Island of
Kauai, causing considerable damage and loss to the people and
businesses on Kauai. The Company has two sugar plantations on
Kauai, both of which sustained considerable damage. The
Company's real estate assets on Kauai suffered very little
damage, since most of the Company's development expenditures
up to that time had been focused on the islands of Oahu and
Maui. The Company finalized the settlement of its insurance
claims in 1995 for the damage
suffered and collected approximately $30 million in proceeds
over the three year period since the hurricane.
In the past, the Company has considered various uses for
its sugar-growing lands, such as alternative crops, to address
the uncertainty of the long-term viability of the sugar
industry. Although the Company still continues to explore
alternative crops, including cultivating approximately 500
acres of coffee trees on Maui, alternative crops remain an
insignificant portion of the Company's agriculture segment.
The principal competitive factors in the Company's sugar
agricultural business are price, sugar yields, processing
capabilities, technological know-how and delivery. In
addition, the Company's agricultural business must contend
with high labor costs and with transportation expenses of
shipping its raw sugar from Hawaii to the C & H refinery in
California.
As part of the Company's agriculture operations, the
Company enters into commodities futures contracts and options
in sugar as deemed appropriate to reduce the risk of future
price fluctuations in sugar. These futures
contracts and options are accounted for as hedges and,
accordingly, gains and losses are deferred and recognized in
cost of sales as part of the production cost.
Except for C&H (through the Company's interest in HSTC, as
discussed above), there is no single agricultural customer of
the Company the loss of which would have a material adverse
effect on the Company. C&H is contractually bound to purchase
all of the sugar the Company produces. If, for any reason,
C&H were to cease its operations, the Company would seek other
purchasers for its sugar.
The Company historically has been involved in the production
of energy through the burning of bagasse, the fibrous by-
product from sugar cane processing, in the Company's sugar
plantations' boilers. The Company is currently using these
boilers to generate electrical energy and steam for the sugar
plantations' own consumption and for the sale of the excess
energy, if any, to the local public utilities.
In early 1993, the Company completed the restructuring of
the power generation operations at its sugar plantation in
Lihue, Kauai by buying out a power plant equipment lease,
entering into a long-term loan to finance the purchase and
entering into a new power agreement with the local utility.
The restructuring of the power operations at the Lihue
plantation has resulted in additional cash flow to the Company
each year.
WATER RESOURCES. On the island of Kauai, Oahu and Maui, the
Company controls approximately 300 million gallons of water
per day, 100 million gallons of water per day on land which
the Company owns and the remainder on land which is leased by
the Company. The Company also owns extensive civil
engineering improvements including tunnels, ditches and pumps
which distribute water. Most of the Company's water is
currently used for irrigating sugar cane. If sugar cane
cultivation is curtailed, water resources may become available
for other uses. However, there can be no assurance that the
Company will be able to apply the water that it currently
controls to other uses since landowners' rights under laws
governing the use and ownership of water in Hawaii, especially
as it pertains to surface water, are restricted and unsettled
in many respects.
The Company must maintain access to its significant water
sources to conduct its agricultural operations and, in many
cases, must demonstrate a sufficient supply of water in order
to obtain land development permits.
The Company believes that it has sufficient water sources for
its present and planned uses; however, there can be no
assurance that the Company will be able to retain or obtain
sufficient water rights to support all of its current or
future development plans.
The Company owns the Waiahole Ditch, which is a series of
tunnels and ditches (constructed in the early 1900's) that
collects and has the capacity to transport in excess of twenty
million gallons of water per day from the windward part of
Oahu to the central Oahu plain. The Company has filed a
petition with the State of Hawaii Water Commission (the
"Commission") for continued use of water that flows through
the Waiahole Ditch and is currently involved in administrative
hearings before the Commission regarding such petition. Water
from the Waiahole Ditch had previously been used to irrigate
sugar cane by Oahu Sugar Company, a wholly-owned subsidiary of
the Company. With the closure of the Company's sugar
operations on Oahu, the Company had to apply for a new use
permit for the Waiahole Ditch water. The Company is seeking to
realize significant value from this extensive ditch system by
finding alternate end users for the water. The State of
Hawaii favors continuation of the flow of water through the
Waiahole Ditch for many reasons, among them being the recharge
of the central Oahu aquifer and the fact that central Oahu is
one of the fastest growth areas in the State. However, there
are a number of individuals and certain environmental groups
that oppose the continued flow of water in the Ditch and want
the water to remain on the windward side of Oahu. There has
been an interim determination by the Water Commission that
over one-half of the Waiahole Ditch water must remain on
windward Oahu temporarily. There can be no assurance that the
Water Commission will issue long-term use permits to the
Company or to potential users on the leeward side.
Amfac/JMB Finance, Inc. ("Finance") is a wholly-owned
subsidiary of Northbrook Corporation ("Northbrook"). The sole
business of Finance is to repurchase, upon request of the
holders thereof, the Certificate of Land Appreciation Notes
("COLAS") pursuant to the Repurchase Agreement. In connection
with such repurchase obligations of Finance, Northbrook has
agreed to contribute sufficient capital or make loans to
Finance pursuant to a Keep-Well Agreement, to enable Finance
to meet its repurchase obligations of the COLAS. For a
description of such obligations pursuant to the Repurchase
Agreement and the Keep-Well Agreement referred to above, see
Notes 2 and 3 of Notes to Balance Sheets of Finance. For a
description of the COLAS, see Note 5 of Notes to Consolidated
Financial Statements of the Company.
Item 2. Properties
LAND HOLDINGS. The major real properties owned by the
Company are described below by island.
(a) Oahu
At December 31, 1995, the Company owned approximately 820
acres of land on Oahu. These consist of approximately 136
acres for the Waikele Golf Course at Waikele, approximately 60
acres at the Oahu Sugar Company mill site in Waipahu,
approximately 500 acres on the northeastern, watershed area of
Oahu which have been designated by the State as conservation
lands and certain other land parcels.
The Waikele project is a master-planned community developed
by the Company. Waikele is situated on 577 acres of land
located adjacent to Waipahu, a rapidly growing town eight
miles west of downtown Honolulu, and at the intersection of
Oahu's two major highways. Construction commenced in 1989 and
includes approximately 2,900 residential units on 19 parcels,
a retail commercial center and an 18-hole golf course. The
development of the commercial center at Waikele is complete,
while development of residential units, ranging from multi-
family units to single-family homes, is continuing and is
expected to be completed by the end of 1997. All of the
residential land has been sold to 3 builders and are being
developed into 19 separate housing offerings. The Waikele
golf course opened for public play in May 1993. The Waikele
project competes with other master-planned communities on
Oahu.
The Company expended approximately $.5 million, $3 million
and $16.5 million in 1995, 1994 and 1993, respectively, for
project costs at Waikele. Such costs include construction of
roadways, utilities and related infrastructure improvements
and the golf course and clubhouse. On a cumulative project-to-
date basis, the Company has expended approximately $116.8
million on project costs and completed sales at Waikele of
approximately $230 million. Such sales have included
commercial property and parcel sales to home builders. Except
for certain contingent participation rights and the future
sale of a 3.3 acre church site, the Company has already
received all of its proceeds from the sales of the residential
and commercial parcels at Waikele.
The Company is currently examining options for developing
the approximately 60 acres of fee simple land it owns at the
mill site of Oahu Sugar Company, and has begun the process of
seeking community input and the necessary government approvals
for a light industrial subdivision on a 31-acre portion of the
property, which excludes property containing the sugar mill
and adjacent buildings. In connection with the development of
this property, the Company has received state land use
urbanization for the entire 60-acre site. In addition, the
Company has received an "industrial" city development plan
designation for 25.5 acres of the proposed 31-acre light
industrial subdivision, and is currently seeking such
"industrial" designation for the remaining 5.5 acres.
During 1995, the Company sold approximately 18 acres for
$6.2 million, which includes $3.2 million for certain
contingent participation rights at Waikele and an approximate
$1.0 million deposit which represents the purchase price for
10 acres of land on Oahu.
(b) Maui
On the island of Maui, the Company owns approximately
13,800 acres of land, most of which is currently in
agriculture or classified as conservation land. Approximately
all of the Company's land holdings are located on West Maui
near the Kaanapali Beach Resort area. Approximately 920 acres
in West Maui are presently designated urban and zoned for
resort and residential development, including approximately
320 acres comprising the two Kaanapali Golf Courses. The
Company is currently pursuing development approvals for
portions of the surrounding acreage.
In March 1991, the Company received final land use approval
from the State for development of approximately 240
residential lots on approximately 125 acres of land, known as
"South Beach Mauka" and located adjacent to the existing
Kaanapali Beach Resort. In connection with this land use
approval, the Company is committed to providing additional
housing on Maui in the affordable price range and to
participating in the funding of the design and construction of
the planned bypass highway extending from Lahaina to
Kaanapali. The Company has entered into a development
agreement with the State Department of Transportation covering
the Company's participation in the design and construction of
the bypass highway development. It is anticipated that, upon
receipt of government approvals, the Company will expend up to
$3.5 million (in the aggregate) in the design of the bypass
highway widening of the existing highway. Financial
participation by the Company of up to an additional $6.7
million for the construction of the bypass highway is subject
to certain conditions related to future land use designations
and zoning of Company lands. The development and construction
of the bypass highway is expected to be a long-term project.
During 1993, the Company obtained final land use approval
from the State, and certification through the State's Housing
Finance Development Corporation ("HFDC"), for the development
of a project on approximately 300 acres of Company land known
as "Puukolii Village" and also located near Kaanapali Beach
Resort. The final land use approval and the HFDC development
agreement contain certain conditions which must be satisfied
in order for the Company to develop Puukolii Village.
Moreover, development of certain portions of Puukolii Village
cannot commence until after completion of the state-planned
Lahaina bypass highway (mentioned above). The development of
Puukolii Village is anticipated to satisfy the Company's
commitment to provide affordable housing in connection with
the South Beach Mauka land use approval (described above).
The Company anticipates commencing construction of
infrastructure improvements for Puukolii Village in 1996.
On West Maui, the Company is continuing to market its
Kaanapali Golf Estates, a new residential community, which is
part of the South Beach Mauka project adjacent to Kaanapali
Beach Resort. The Company currently has 20 homesites on the
market, which are priced from approximately $250,000 to $1
million. The absorption period for this type of product is
difficult to forecast under the current economic conditions.
In 1996, the Company sold 8 homesites for approximately $1.4
million to a developer who plans to construct and sell houses
on these lots.
The planned development of the Company's land on Maui is
longer term in nature than at Waikele. As Maui is less
populated than Oahu and more dependent on the resort/tourism
industry, much of the Company's land is intended for resort
and resort-related uses. Due to overall economic conditions
and trends in tourism, recent demand for these land uses has
been relatively weak. The Company's currently available
homesite product
on Maui, which is primarily targeted to the second home buyer,
has experienced very slow sales activity to date. The
Company's competitors on Maui have also experienced slow sales
activity in the second home market. The Company has over 300
acres of land in the adjacent North Beach Mauka area,
currently designated by the State Land Use Commission for
agricultural use, but with an underlying project district
designation in the county community plan. The Company plans
to seek State urbanization approval for this land. The
Company is continuing to evaluate its planned products and the
timing of development of its land holdings in light of the
current weak market demand and the capital resources needed
for future development. Concurrently, the Company is
evaluating certain land parcels for bulk sales. These parcels
are not considered strategic to the Company's long-term
development plans.
In early 1986, the Company entered into a joint venture
agreement with Tobishima Pacific Inc., a wholly- owned
subsidiary of a Japanese company, the purpose of which is to
plan, manage and develop approximately 96 acres of beachfront
property at Kaanapali (known as North Beach). The joint
venture (in which the Company has a 50% interest) has State
land use and County zoning approvals for the subdivision and
development of the infrastructure improvements necessary to
accommodate up to 3,200 hotel and/or condominium units on this
site. These development plans may be affected by the current
re-evaluations of state land designations and county community
plans (discussed below). This North Beach property
constitutes nearly all of the remaining developable beachfront
acreage at Kaanapali. In October 1992, the Company completed
construction of a 3-acre park for public use on the North
Beach site, which is part of the master plan for this property
and was a requirement imposed by Maui County in obtaining
certain permits. The development of North Beach continues to
be tied to the completion of the aforementioned Lahaina bypass
highway or other traffic mitigation measures satisfactory to
the Maui County Planning Commission. The Company is currently
reviewing alternatives in providing other traffic mitigation
measures, such as the widening of the Honoapiilani Highway, to
the North Beach area.
The Office of State Planning ("OSP") for the State of
Hawaii is currently implementing changes to the State
designations for land use throughout the State of Hawaii, a
process that is performed every five years. The Company is
not aware of any changes being made by the OSP that will
materially affect the state land use designations sought for
Company lands.
In addition, citizen advisory committees ("CAC") reviewed
Maui County's Community Plans to determine whether changes
should be recommended, a process that is done every ten years.
As previously reported, one of the citizens advisory
committees involved in this review process recommended several
changes to the Lahaina Community Plan that could have an
adverse impact on Company lands, including one recommendation
(among others) to downzone to park designation roughly two-
thirds of the Company's North Beach property in Kaanapali. If
the CAC recommendations are ultimately implemented, they could
have a material adverse effect on the value of the North Beach
property or on other Company lands.
The Company continues to vigorously oppose the
aforementioned CAC recommendations. The Company strongly
believes that such recommendations regarding Company lands are
wholly inappropriate and that the Company's arguments to
retain the current zoning and other entitlements are
meritorious. After the CAC made its recommendations, the Maui
County Planning Commission held public hearings and then
published its own recommendations as part of the Community
Plan review process. The Commission disagreed with most of
the CAC's recommendations and has recommended that there be no
substantial change in the land use designation
for the Company's lands, including North Beach. However, the
Mayor of Maui County has expressed concern to the Planning
Commission over further development at North Beach, and urged
broad review of the Lahaina Community Plan issues. A
committee of the Maui County Council conducted public hearings
on the Community Plan and has concurred with the Planning
Commission recommendation on North Beach. The Maui County
Council has held public hearings and public readings on the
Community Plan amendments in 1996. In February 1996, the Maui
County Council adopted a Community Plan ordinance for West
Maui that does not include any amendments to the current
Community Plan designation of North Beach (thus rejecting the
CAC recommendations). The ordinance will be sent to the Mayor
of the County of Maui for approval or disapproval. If the
Mayor disapproves the ordinance, she could require the West
Maui Community Plan Amendment process be recommenced once
again. While the Company is hopeful that its arguments will be
heeded, there can be no assurance that the current zoning (and
other land use designations and entitlements) for the North
Beach property and other Company lands will be retained, or
that efforts to recover just compensation for any loss of
current entitlements would be successful. Management
continues to evaluate and consider all alternatives in seeking
favorable resolutions to these entitlements and zoning issues.
Appropriate state land use designations and conformity
with county community plans are essential elements to the land
development process. It is impossible to predict the outcome
of these reviews at this time and, accordingly, the Company
cannot determine what impact (if any) these reviews will
ultimately have on the Company's lands and their related
entitlements.
Further, the Department of the Army has determined that
there are two wetlands sites on the North Beach property,
totaling approximately 21,800 square feet. The Company has
retained experts to evaluate these sites and to insure
compliance with all laws. While there can be no assurance as
to the ultimate determinations with respect to the wetlands
issue, the Company does not anticipate that these sites will
materially adversely affect the development plans for North
Beach.
During 1995, the Company sold 846 acres on Maui for
approximately $14.0 million, including four residential lots
at Kaanapali Golf Estates.
The Company also owns and manages the championship
Kaanapali Golf Courses, consisting of a clubhouse and two 18-
hole golf courses located at the Kaanapali Beach Resort.
Approximately 4,900 acres of the Company's land on Maui
are designated as a conservation district.
(c) Kauai
The Company owns approximately 29,400 acres of land on the
island of Kauai, most of which is on the eastern half of the
island. The large parcels of Company land in eastern Kauai
are predominantly used for sugar cane cultivation. The
Company owns approximately 150 acres of land zoned for urban
development and approximately 12,300 acres of land on Kauai
has been classified as conservation land.
In June 1994, the Company submitted a Land Use Boundary
Amendment Petition with the State of Hawaii Land Use
Commission ("LUC") and a General Plan Amendment Application
with the County of Kauai for the urbanization of approximately
552 acres of land on Kauai currently in sugar cane
cultivation. The proposed project is planned to be a mixed-
use master planned community, which will include a variety of
both affordable and
market rate residential units, commercial and industrial
projects and a number of community and public based
facilities. The filing of these land use applications is the
first step required in converting agriculture zoned land into
urban zoned land. There are a number of additional reports,
studies, applications and permits that will be required before
final land use approvals are obtained. In May 1995, the
County of Kauai approved the Company's General Plan Amendment,
subject to a number of conditions (to be addressed during the
subsequent zoning amendment process). In December 1995, the
LUC granted the Company the land use amendments sought by the
Company subject to a number of conditions. While the Company
is optimistic that the proposed project will receive favorable
support, it is anticipated that the full approval process will
require at least 3 - 5 years. The entitlement process in
Hawaii has historically been a very difficult and arduous
process and there is no guarantee that all approvals will be
obtained. Once construction commences, subject to market
conditions, the entire project is expected to span over 20
years.
During 1995, the Company sold, in the aggregate, 97 acres
of miscellaneous land parcels on Kauai for approximately $8.3
million.
(d) Hawaii
The approximately 6,900 acres of land owned by the Company
on the island of Hawaii are located on the eastern side of the
island, primarily in the Keaau and Pahoa districts, south of
the town of Hilo. Portions of these lands are currently
leased to independent papaya growers. The Company does not
currently have any plans for real property development on the
island of Hawaii, but will continue to pursue ad hoc parcel
sales when opportunities exist.
During 1995, the Company sold, in the aggregate, 1,463
acres of miscellaneous land parcels on Hawaii for
approximately $3.3 million.
LONG-TERM LEASES. Each of the Company's plantation
subsidiaries leases agricultural lands from unrelated third
parties. Such leases vary in length from month-to-month to 10
years and cover parcels of land ranging in acreage from one
acre to 27,474 acres. Certain of such leases provide the
Company, as lessee, with licenses for water use. Almost all
of the leased land of the Company is used in its agricultural
businesses, primarily in connection with the cultivation and
processing of sugar cane, with approximately 16,400 acres
currently under cultivation. Most of the leases provide for
the Company to pay fixed annual minimum rents (ranging from
$10 to $131 per usable acre) plus additional rents based upon
a percentage of gross receipts generated by the Company's
sugar cane operations on such land.
The following summary lists the material agricultural
land leases of the Company's subsidiaries, as lessees, and
certain material terms thereof:
Approximate Current
Current Approximate Annual Additional Rent
Expiration Sugar Cane Gross Minimum as % of Gross Renewal
Lease Date Acreage Acreage Rent Receipts Option
Kekaha month to month 7,926 27,474 $251,500 variable --
Lihue 10/30/99 4,054 6,200 $ 56,370 variable --
Lihue 12/15/02 0 3,106 $ 20,630 none --
Lihue 1/31/95(1) 1,805 2,194 $ 22,920 variable --
Pioneer month to month 889 1,639 $ 31,200 variable --
Pioneer 12/31/05 770 2,509 $100,917 7.25% --
(1) The Company has reached an agreement in principle
with the lessor.
Item 3. Legal Proceedings
The Company and/or certain of its affiliates have been
named as defendants in several pending lawsuits, most of which
constitute routine litigation arising from the ordinary
conduct of its businesses. While it is impossible to predict
the outcome of the pending (or threatened) litigation and for
which potential liability is not covered by insurance, the
Company is of the opinion that the ultimate liability from
such litigation will not materially adversely affect the
Company's financial condition.
Item 4. Submission of Matters to a Vote of Security Holders
There were no matters submitted to a vote of security
holders during 1994 and 1995.
PART II
Item 5. Market for the Company's and Finance's Common Equity
and Related Security Holder Matters
The Company is a wholly-owned subsidiary of Northbrook
Corporation and, hence, there is no public market for the
Company's common stock. Finance is a wholly-owned subsidiary
of Northbrook Corporation and there is no public market for
Finance's common stock.
<TABLE>
Item 6. Selected Financial Data
AMFAC/JMB HAWAII, INC.
For the years ended December 31, 1995, 1994, 1993, 1992 and 1991
(Dollars in Thousands)
<CAPTION>
1995 1994 1993 1992(c) 1991
<S> <C> <C> <C> <C> <C>
Total revenues (d) $101,607 157,963 140,462 230,212 201,997
======= ======== ======== ======== ========
Net income (loss) (e) $ 12,708 (13,033) (509) (60,979) (3,402)
======== ======== ======== ======== =========
Net income (loss) per share (b)
Total assets $527,598 614,547 644,711 633,995 705,493
======= ======= ======== ======== =========
Amounts due affiliates -
financing $ 76,911 15,097 15,097 28,098 28,098
======== ======= ======== ======== =========
Certificate of Land Appreciation
Notes $220,692 384,737 384,737 384,737 384,737
======== ======= ======== ======== =========
<FN>
(a) The above selected financial data should be read in conjunction with the
financial statements and the related notes appearing elsewhere in this annual
report on Form 10-K.
(b) The Company is a wholly-owned subsidiary of Northbrook Corporation;
therefore, net loss per share is not presented.
(c) In 1992, the Company adopted Statement of Financial Accounting Standards
No. 106, "Employers' Accounting for Postretirement Benefits Other Than
Pensions." The Company elected to immediately recognize the cumulative effect
of the change in accounting for postretirement benefits of $43,442 (after
reduction of income taxes of $26,626), which is reflected in the 1992 net loss.
(d) Total revenues includes interest income of $1,288 in 1995, $1,977 in
1994, $1,070 in 1993, $1,534 in 1992 and $2,825 in 1991.
(e) In 1995, the Company recognized an extraordinary gain from the
extinguishment of debt of $32,544 (after reduction of income taxes of $20,807),
which is reflected in 1995 net income.
</TABLE>
Item 7. Management's Discussion and Analysis of Financial
Condition and Results of Operations
Liquidity and Capital Resources
All references to "Notes" herein are to Notes to
Consolidated Financial Statements contained in this report.
On December 5, 1988, the Company commenced an offering to
the public of COLAS pursuant to a Registration Statement on
Form S-1 under the Securities Act of 1933. A total of 384,737
COLAS were issued prior to the termination of the offering on
August 31, 1989. The net proceeds received from the sale of
the COLAS totaled approximately $352 million (after deduction
of organization and offering expenses of approximately $33
million). Such net proceeds have been used to repay a portion
of the acquisition-related financing, which was incurred to
pay certain costs associated with the Merger including a
portion of the Merger consideration paid to shareholders of
Amfac.
On March 14, 1989, Amfac/JMB Finance, Inc. ("Finance"), a
wholly-owned subsidiary of Northbrook Corporation
("Northbrook") and the Company entered into an agreement (the
"Repurchase Agreement") concerning Finance's obligations (on
June 1, 1995 and June 1, 1999) to repurchase, upon request of
the holders thereof, the COLAS. The COLAS were issued in
units consisting of one Class A COLA and one Class B COLA. As
specified in the Repurchase Agreement, the repurchase of the
Class A COLAS on June 1, 1995 may have been requested of
Finance by the holders of such COLAS at a price equal to the
original principal amount of such COLAS ($500) minus all
payments of principal and interest allocated to such COLAS.
The repurchase of the Class B COLAS on June 1, 1999 may be
requested of Finance by the holders of such COLAS at a price
equal to 125% of the original principal amount of such COLAS
($500) minus all payments of principal and interest allocated
to such COLAS. Through the date of this report, the
cumulative interest paid per Class A COLA and Class B COLA is
approximately $145 and $145, respectively.
On March 14, 1989, Northbrook entered into a keep-well
agreement with Finance, whereby it agreed to contribute
sufficient capital or make loans to Finance to enable Finance
to meet the COLA repurchase obligations, if any, described
above. Notwithstanding Finance's repurchase obligations, the
Company may elect to redeem any COLAS requested to be
repurchased at the specified price.
On March 15, 1995, pursuant to the indenture that governs
the terms of the COLAS (the "Indenture"), the Company elected
to offer to redeem (the "Redemption Offer") all Class A COLAS
from its registered holders. Pursuant to the Redemption
Offer, and in accordance with the terms of the Indenture, the
Company was therefore obligated to purchase any and all Class
A COLAS submitted pursuant to the Redemption Offer at a price
of $365 per Class A COLA. In conjunction with the Company's
Redemption Offer, the Company made a tender offer (the "Tender
Offer") to purchase up to approximately $68 million principal
value of the Class B COLAS at a price of $220 per Class B COLA
from COLA holders electing to have their Class A COLAS
repurchased.
The two offers to repurchase the COLAS terminated on April
17, 1995 in accordance with their terms and with the
Indenture. Approximately 229,000 Class A COLAS were submitted
for repurchase pursuant to the Redemption Offer and
approximately 99,000 Class B COLAS were submitted for
repurchase pursuant to the Tender Offer, requiring an
aggregate payment of the Company of approximately $105 million
on June 1, 1995. The Company used its
available cash to purchase Class B COLAS pursuant to the
Tender Offer and borrowed $52 million from Northbrook to
purchase Class A COLAS pursuant to the Redemption Offer.
The $52 million loan from Northbrook matures on June 1,
1997, is payable interest only and carries an interest rate
per annum equal to the prime rate (8.5% at December 31, 1995)
plus 2%. The Company has also borrowed from Northbrook
approximately $9.8 million as of December 31, 1995 consisting
of approximately $4.4 million for the August 1995 COLA Base
Interest payment and approximately $5.4 million for working
capital needs. Pursuant to the Indenture relating to the
COLAS, these amounts borrowed from Northbrook are considered
"Senior Indebtedness" to the COLAS.
As a result of the repurchases, the Company retired
approximately $164 million face value of COLA debt and
recognized a financial statement gain of approximately $32.5
million (net of income taxes of $20.8 million, the write-off
of deferred financing costs of $10.0 million, the write-off of
accrued contingent base interest of $5.7 million and expenses
of $.9 million). Such gain is treated as cancellation of
indebtedness income for tax purposes and, accordingly, the
income taxes related to the Class A Redemption Offer
(approximately $9.1 million) will not be indemnified by the
tax agreement with Northbrook (see Note 1).
Pursuant to the terms of the Indenture relating to the
COLAS, the Company is required to maintain a Value Maintenance
Ratio of 1.05 to 1.00. Such ratio is equal to the relationship
of the Company's Net Asset Value (defined as the excess of (i)
Fair Market Value of the gross assets of the Company over (ii)
the amount of the liabilities (excluding liabilities resulting
from generally accepted accounting principles enacted
subsequent to the date of the Indenture) of the Company other
than the outstanding principal balance of the COLAS, any
unpaid Mandatory and Contingent Base Interest, and certain
other liabilities, to the sum of (x) the outstanding principal
amount of the COLAS, plus (y) any unpaid Base Interest, plus
(z) the outstanding principal balance of any Indebtedness
incurred to redeem COLAS. The COLA Indenture requires the
Company to obtain independent appraisals of the fair market
value of the gross assets used to calculate the Value
Maintenance Ratio as of December 31 in each even-numbered
calendar year. Accordingly, the Company obtained independent
appraisals of substantially all of its gross real estate
assets as of December 31, 1994; the appraised values of such
assets ranged in total from approximately $600-$650 million.
In odd-numbered years (during which time appraisals are not
required) the Fair Market Value of the gross assets of the
Company used to compute the Value Maintenance Ratio is
determined by the Company's management. To the extent that
management believes that the aggregate Fair Market Value of
the Company's assets exceeds by more than 5% the Fair Market
Value of such assets included in the most recent appraisal,
the Company must obtain an updated appraisal supporting such
increase. As of December 31, 1995, management does not
believe that the aggregate Fair Market Value of the Company's
assets has increased by more than 5% from the appraisal values
obtained as of December 31, 1994. Based on such values, and
after consideration of the other components of the
computation, the Company was in compliance with the Value
Maintenance Ratio as of December 31, 1994 and December 31,
1995. It should be noted that the concept of Fair Market
Value is intended to represent the value that an independent
arm's-length purchaser, seeking to utilize such asset for its
highest and best use would pay, taking into consideration the
risks and benefits associated with such use or development,
current restrictions on development (including zoning
limitations, permitted densities, environmental restrictions,
restrictive covenants, etc.) and the likelihood of changes to
such restrictions; provided, however, that with respect to any
Fair Market Value determination
of all of the assets of the Company, such assets shall not be
valued as if sold in bulk to a single purchaser. There can be
no assurance that the Company's properties can be ultimately
sold at prices equivalent to their appraised values.
In June 1991, the Company obtained a five-year $66 million
loan from the Employees' Retirement System of the State of
Hawaii ("ERS"). An initial funding of $60 million was
received in June 1991. The remaining balance of $6 million
was added to the principal balance on July 1, 1992 in payment
of the first year of accrued interest on the loan. The non-
recourse loan is secured by a first mortgage on the Kaanapali
Golf Courses, and is considered "Senior Indebtedness" (as
defined in the Indenture relating to the COLAS). The loan
bears interest at a rate per annum equal to the greater of (i)
the base interest rate announced by the Bank of Hawaii on the
first of July for each subsequent year (9% at July 1, 1995)
plus one percent or (ii) ten percent per annum through June
30, 1994 and nine percent per annum thereafter. The loan is
payable interest only on a quarterly basis. The annual
interest payments are in excess of the cash flow generated by
the Kaanapali Golf Courses and the Company ceased making
required debt service payments in April 1995. The Company is
working with the ERS to renegotiate the terms of the loan
including a possible extension of the June 1996 maturity date.
The principal balance is included in the current portion of
long-term debt as of December 31, 1995 in the accompanying
consolidated financial statements. In conjunction with the
Company's loan negotiations, the Company made an interest
payment of approximately $1.7 million in August 1995. The
Company has not made all interest payments required under the
current loan terms resulting in unpaid interest at December
31, 1995 of approximately $4.6 million. Although the Company
expects to successfully conclude the loan renegotiation, there
can be no assurance that the renegotiation will be
consummated, or consummated on terms favorable to the Company.
In October 1993, Waikele Golf Club, Inc. ("WGCI"), a wholly-
owned subsidiary of the Company that owns and operates the
Waikele Golf Course, obtained a five year $20 million loan
facility from two lenders. The loan consists of two $10
million amortizing loans. Each loan bears interest only for
the first two years with interest and principal payments based
upon a 20 year amortization period for the remaining three
years. The loans bear interest at prime (8.5% at December 31,
1995) plus 1/2% and LIBOR (5.7% at December 31, 1995) plus 3%,
respectively. WGCI received an initial funding of $14 million
of which $.6 million was held back by the lenders to pay
interest. In October, 1994, in accordance with the loan
agreement, the Company received an additional funding of $6
million and a release of the $.6 million interest holdback,
both of which were contingent upon achieving a certain level
of Net Operating Income (as defined) by the golf course during
the first six months of 1994. The loan is secured by WGCI's
assets (see Note 6), is guaranteed by the Company and is
considered "Senior Indebtedness" (as defined in the COLA
Indenture).
Pursuant to an agreement entered into with the City of
Honolulu in 1991 relating to the development of the Company's
Waikele project, if the Company sells the Waikele golf course
and depending on the price and resolution of certain issues, a
payment of up to $15 million might be required to be given to
the City to be used to assist in the City's affordable housing
developments.
A significant portion of the Company's cash needs result
from the nature of the real estate development business, which
requires significant investment in preparing development
plans, seeking land urbanization and other governmental
approvals, and completing infrastructure improvements
prior to the realization of sales proceeds. The Company has
funded its cash requirements to date primarily through the use
of short-term bank borrowings, long-term financing secured by
its golf courses on Maui and Oahu, borrowings from affiliates
and revenues generated from the development and sale of its
properties and investments. Funding of the Company's future
cash requirements is dependent upon obtaining appropriate
financing and revenues generated from the development and sale
of its properties. Although under current market conditions
development financing is difficult to obtain, the Company is
not currently seeking this type of financing based upon the
stage of development of its various land holdings in Hawaii.
In order to generate additional cash flows for the
Company, management has identified certain land parcels that
are not included in the Company's long-term development plans.
The Company continues to pursue an aggressive land sales
program for these non-strategic assets. During 1995, the
Company generated approximately $30.8 million in land sales,
most of which related to non-strategic parcels. In addition,
the Company received an approximate $1.0 million deposit,
which represents the purchase price for 10 acres on Oahu.
During 1994, the Company generated approximately $44.3
million in property sales primarily from the sale of the last
two remaining residential parcels at the Waikele project on
Oahu for approximately $37 million. The remaining $7.3 million
of property sales in 1994 related to land sales on the islands
of Maui, Kauai and Hawaii. Additionally, the Company received
an approximate $4.2 million deposit, which represented the
purchase price for 452 acres on Maui.
At December 31, 1995, the Company had cash and cash
equivalents of approximately $11.7 million.
The Company intends to use its cash reserves, sales
proceeds and financing or joint venture arrangements to meet
its short-term and long-term liquidity requirements, which
include funding the remaining development costs at Waikele and
on West Maui, Oahu and Kauai, agricultural deficits, payment
of interest expense, and the repayment of principal on debt
obligations, as necessary. The Company's long-term remaining
liquidity is dependent upon its ability to obtain additional
financing and the consummation of certain property sales.
There can be no assurance that additional long-term financing
can be obtained or property sales consummated. The Company's
land holdings on Maui and Kauai are its primary source of
future land sale revenues. However, due to current market
conditions, the difficulty in obtaining land use approvals and
the high development cost of required infrastructure, the
planned development of these land holdings and the ability to
generate cash flow from these land holdings are longer term in
nature than Waikele. Accordingly, if no such financing can be
obtained or additional property sales consummated, the Company
will defer (to the extent possible) development costs and
capital expenditures to meet long-term liquidity requirements.
Additionally, the Company's plans for property sales may also
be adversely impacted by the inability of potential buyers to
obtain financing.
The Company did not generate a sufficient level of Net Cash
Flow to pay Base Interest on the COLAS (see Note 5) in excess
of four percent for 1993, 1994 and 1995.
During 1995 and 1994, the Company implemented certain cost
savings measures, which deferred development project costs and
capital expenditures for longer-term projects. The Company's
Property segment is anticipated to expend approximately $17.0
million in project costs during 1996.
During 1995, the Company implemented a plan to restructure
its sugar operations, including consolidation of the
operations at its two Kauai plantations and changing to a
seasonal mode of operations at each of its plantations
(consistent with other global sugar operations). The Company
anticipates that cost savings related to the sugar operations
will be associated with these changes.
The price of raw sugar that the Company receives is based
upon the price of domestic sugar (less delivery and
administrative costs) as currently controlled by U.S.
government price support legislation. As of the date of this
report, the U.S. Senate and the U.S. House of Representatives
have approved a new Farm Bill, which includes a sugar program
similar in nature to the program provided by the previous Farm
Bill. Both versions of this legislation provide for a loan
rate of 18 cents per pound, the same level as today. However,
the legislation includes certain other adjustments to the
sugar program, including making crop loans recourse to the
producer and repealing marketing allotments, which may over
time depress the domestic price of raw sugar. House and
Senate members still must meet to reconcile certain
differences. The Company is hopeful that final legislation
(approved by both Houses ofCongress and the President) will
include support for the domestic sugar industry on a
comparable basis with the previous legislation. However, at
this stage there can be no assurance that the government loan
rate will not be reduced or be eliminated entirely. Such a
reduction or elimination of the loan rate could have a
material adverse effect on the Company's agricultural
operations, and possibly could cause the Company to evaluate
the cessation of its remaining sugar cane operations.
In August 1993, the Company announced its plans to phase
out the sugar operations at its Oahu Sugar Company by mid-
1995, such phase out coinciding with the expiration of its
major land lease on Oahu. Oahu Sugar, which operated almost
entirely on leased land, had incurred losses in its sugar
operations in prior years and expected those losses to
continue in the future. For several months, Oahu Sugar had
negotiated with the plantation's major lessor to reach an
agreement on concessions in rent and other lease terms
required by Oahu Sugar to continue its agricultural
operations. To grant such concessions, the lessor required a
long-term commitment from the plantation that it would
continue its sugar operations. Because of the plantation's
losses, along with the future uncertainties posed by the
domestic agriculture price support legislation and
international trade policy, Oahu Sugar could not agree to such
a long-term commitment to stay in operation. Oahu Sugar
completed the final harvest of its crop in April 1995. The
Company has shut down Oahu Sugar and any estimated future
costs related to the shut down are not expected to have a
material adverse effect on the financial condition of the
Company. The Company is currently examining options for
developing the fee simple land it owns adjacent to the Oahu
Sugar mill site, including seeking the necessary government
approvals for a light industrial subdivision for a portion of
the property, as discussed below.
One of the Company's subsidiaries, The Lihue Plantation
Company, Limited, restructured its power generating operations
by paying $15 million in November 1992 for the purchase of the
power generation equipment at its sugar plantation in Lihue,
Kauai, pursuant to a buyout provision in the equipment's
lease. In January 1993, Lihue obtained a ten-year $13.3
million amortizing loan to replace the internal funds used for
this purchase. The loan is secured by the Lihue power
generation equipment, sugar inventories and receivables,
certain other assets and real property of the Company and has
limited recourse to the Company and certain of its
subsidiaries. In conjunction with its acquisition of the
power generation equipment, Lihue negotiated a new power
purchase agreement with the local utility, which became
effective on November 1, 1992. This restructuring of the
power generating operations at the Lihue plantation has
resulted in additional cash flow to the Company each year.
Results of Operations
General:
The Company and its subsidiaries report its taxes as a
part of the consolidated tax return of the Company's parent,
Northbrook. The Company and its subsidiaries have entered
into a tax indemnification agreement with Northbrook which
indemnifies the Company and its subsidiaries for
responsibility for all past, present and future federal and
state income tax liabilities (other than income taxes which
are directly attributable to cancellation of indebtedness
income caused by the repurchase or redemption of securities as
provided for in or contemplated by the Repurchase Agreement).
Effective January 1, 1993, the Company adopted SFAS No.
109-Accounting for Income Taxes. SFAS No. 109 establishes
financial accounting and reporting standards for the effects
of income taxes that result from an enterprise's activities
during the current and preceding years. SFAS No. 109 changed
the Company's previous practice in that it requires the
recognition of deferred taxes and the recording of a provision
for taxes in the separate financial statements of a member of
a consolidated tax group. Deferred taxes arise due to
differences between the Company's book and tax bases of its
assets and liabilities. Current and deferred taxes have been
allocated to the Company as if it were a separate taxpayer.
However, the tax indemnification agreement does not require
the Company to actually pay income taxes (other than income
taxes that are directly attributable to cancellation of
indebtedness income caused by the repurchase or redemption of
securities as provided for in or contemplated by the
Repurchase Agreement). Accordingly, current taxes payable, to
the extent the tax indemnification agreement does not require
the Company to actually pay such income taxes, have been
reflected as deemed contributions to additional paid-in
capital in the accompanying financial statements. In
addition, beginning December 31, 1995, deferred taxes payable
are also being reflected as deemed paid-in capital. Deferred
taxes payable were previously reflected as a liability in the
Company's financial statements. The Company believes that this
change results in a better reflection of the effect of the
tax indemnification agreement; such change has no impact on
the Company's consolidated statements of operations or on its
cash flows.
Cash and cash equivalents, short-term investments,
Certificate of Land Appreciation Notes, other long-term
liabilities and deferred expenses decreased and the long-term
portion of amounts due affiliates increased as of December 31,
1995 as compared to December 31, 1994 primarily due to the
COLA repurchases as discussed above (see Note 5).
Current portion of long-term debt increased and long-term
debt decreased as of December 31, 1995 as compared to December
31, 1994, due primarily to the reclassification of the ERS
loan from long-term to current (see Note 6).
The current portion of amounts due to affiliates increased
as of December 31, 1995 as compared to December 31, 1994
primarily due to income tax payable resulting from the
redemption of the Class A COLAS (see Note 5), interest accrued
on related party debt (see Note 4) and the payment by
Northbrook of pension costs, severance and termination
benefits and certain insurance costs on behalf of the Company
(see Note 9).
Interest expense decreased for the year ended December 31,
1995 as compared to the year ended December 31, 1994 primarily
due to the net decrease in interest related to the early
redemption of the COLAS, which was partially offset by
interest expense increasing on the acquisition-
related financing and ERS loan due to increases in the prime
rate. Interest expense increased for the year ended December
31, 1994 as compared to the year ended December 31, 1993
primarily due to a decrease in capitalized interest on project
development costs.
Agriculture:
The Company's Agriculture segment is responsible for
activities related to the cultivation, processing and sale of
sugar cane and other agricultural products. Agriculture's
revenues are primarily derived from the Company's sale of its
raw sugar. Prior to the sale of the Company's interest in C&H
(see Note 3), the price the Company received from C&H for its
raw sugar represented the net sales price C&H received for
refined sugar, less operating expenses and capital
expenditures. Currently, the price the Company receives is
based upon the domestic price of sugar (less delivery and
administrative costs), which is impacted by U.S. government
price support legislation. As of the date of this report, the
U.S. Senate and the U.S. House of Representatives have
approved a new Farm Bill, which includes a sugar program
similar in nature to the program provided by the previous Farm
Bill. Both versions of this legislation provide for a loan
rate of 18 cents per pound, the same level as today. However,
the legislation includes certain other adjustments to the
sugar program, including making crop loans recourse to the
producer and repealing marketing allotments, which may over
time depress the domestic price of raw sugar. House and
Senate members still must meet to reconcile certain
differences. The Company is hopeful that final legislation
(approved by both Houses of Congress and the President) will
include support for the domestic sugar industry on a
comparable basis with the previous legislation. However, at
this stage there can be no assurance that the government loan
rate will not be reduced or be eliminated entirely. Such a
reduction or elimination of the loan rate could have a
material adverse effect on the Company's agricultural
operations, and possibly could cause the Company to evaluate
the cessation of its remaining sugar cane operations.
In conjunction with the sale of its interests in C&H, the
Company entered into a new marketing agreement with the co-
operatively-owned HSTC to sell their raw sugar production.
HSTC sells the raw sugar production to C&H (under its new
ownership) pursuant to a new long-term supply contract
executed in conjunction with this transaction. The terms of
the supply contract do not require a specified level of
production by the Hawaii producers; however, HSTC is obligated
to sell and C&H is obligated to purchase any raw sugar
produced. HSTC is an agricultural cooperative owned by the
major Hawaii producers of raw sugar (including the Company).
HSTC returns to its raw sugar suppliers proceeds based upon
the domestic sugar price less delivery and administrative
charges. The Company recognizes revenue and related cost of
sales upon delivery of its raw sugar from HSTC to C&H. In its
previous arrangement with C&H, revenue and related costs had
been recognized upon ultimate sale of refined sugar by C&H.
In addition, all deliveries of raw sugar to C&H through the
date of sale were recognized as revenue as of the date of the
sale transaction. As a result of the C&H sale transaction
discussed above (see Note 3), the Company recognized a gain of
approximately $16.6 million on the transaction for the year
ended December 31, 1993.
As part of the Company's agriculture operations, the
Company enters into commodities futures contracts and options
in sugar as deemed appropriate to reduce the risk of future
price fluctuations in sugar. These futures contracts and
options are accounted for as hedges and, accordingly, gains
and losses are deferred and recognized in cost of sales as
part of the production cost.
In September 1992, Hurricane Iniki struck the Island of
Kauai causing considerable damage and loss to the people and
businesses on Kauai. The Company has two sugar plantations on
Kauai, both of which sustained considerable damage. The
Company's real estate assets on Kauai suffered very little
damage, since most of the Company's development expenditures
up to that time had been focused on the islands of Oahu and
Maui. The Company finalized the settlement of its insurance
claims in 1995 for damage suffered and collected approximately
$30 million in proceeds over the approximately three year
period.
Accounts receivable decreased as of December 31, 1995 as
compared to December 31, 1994 due primarily to the receipt of
the aforementioned insurance proceeds related to the final
settlement of the Iniki claims and a lower sugar receivable as
a result of the termination of operations at Oahu Sugar
Company. The decrease was partly offset by certain other
insurance claims receivable as of December 31, 1995, which
have subsequently been collected.
Accrued expenses decreased as of December 31, 1995 as
compared to December 31, 1994, primarily due to payments of
certain costs accrued in conjunction with the sale of the
Company's interest in C&H and the cessation of operations at
Oahu Sugar Co. during 1995.
Other long-term liabilities decreased as of December 31,
1995 as compared to December 31, 1994, in part due to the
recognition of a previously deferred credit related to the
reduction of the Company's accumulated postretirement benefit
obligation as a result of the cessation of operations at Oahu
Sugar Company during 1995.
Inventories and prepaid expenses decreased as of December
31, 1995 as compared to December 31, 1994 primarily due to
termination of operations at Oahu Sugar Company.
Machinery and equipment decreased as of December 31, 1995
as compared to December 31, 1994 primarily due to the sale of
substantially all of the machinery and equipment of Oahu Sugar
Company, which ceased operations in April 1995. Oahu Sugar
received net proceeds of approximately $3.0 million after
accrued expenses, which approximates the carrying value of the
equipment at the date of sale.
Agriculture's revenues from sugar operations decreased for
the year ended December 31, 1995 as compared to the year ended
December 31, 1994 as a result of lower production due to less
acres harvested. Non-sugar revenues also decreased due to non-
recurring revenues received in 1994.
Agriculture's operating loss for the year ended December 31,
1995 increased as compared to the year ended December 31, 1994
due to a deterioration of gross margin resulting from lower
production and the receipt of non-recurring non-sugar revenues
in 1994. The lower production is attributable to the shutdown
of Oahu Sugar and inclement weather which adversely affected
operations at the Company's two Kauai plantations. Inclement
weather has a greater impact on the Company's seasonal mode of
operations because of reduced flexibility in the harvesting
schedule.
Agriculture's revenue from sugar operations increased
approximately 15% for the year ended December 31, 1994 as
compared to the year ended December 31, 1993 due to an
increase in the return per ton for 1994 and an increase in the
sugar sales volume (predominately in the fourth quarter) of
approximately 5% and 9% per annum, respectively. This was
offset in part by a decrease in various non-sugar revenues.
Agriculture experienced a $3.9 million operating loss for
the year ended December 31, 1994 as compared to operating
income of $1.1 million for the year ended December 31, 1993
due to lower non-sugar revenues and a higher inventory write
down as a result of lower anticipated 1995 production volumes,
which more than offset certain cost reductions.
Property:
The Company's Property segment is responsible for the
following: land planning and development activities;
obtaining land use, zoning and other governmental approvals;
selling or financing developed and undeveloped land parcels;
and the management and operation of the Company's golf course
facilities.
As discussed below, the North Beach joint venture owns
approximately 96 acres of beachfront property on Maui that
have regulatory approvals for hotel development. In
accordance with the provisions of the COLA Indenture,
appraisals were performed for certain properties in 1994,
which reflected a decline in value of the North Beach
property. Accordingly, the Company recorded, as a matter of
prudent accounting practice, a $3.5 million reduction to the
carrying value of its investment in the North Beach joint
venture in 1994 to properly reflect the estimated market value
of the property in its then current state of development.
This reduction is attributed to the softness in the market for
the development and sale of resort-oriented real estate.
Inventory decreased as of December 31, 1995 as compared
to December 31, 1994 in part due to the sale of land parcels
in 1995, which was offset in part by the transfer of costs
from land and land improvements discussed below.
Land and land improvements decreased as of December 31,
1995 as compared to December 31, 1994 primarily due to the
reclassification of various land parcels actively held for
sale to inventories.
Property revenues and cost of sales decreased for the year
ended December 31, 1995 as compared to December 31, 1994 and
increased as of December 31, 1994 as compared to December 31,
1993 primarily due to the level of sales activity at Waikele.
During 1995, the Company generated approximately $30.8 million
in land sales, most of which relate to non-strategic parcels.
In addition, the Company received an approximate $1.0 million
deposit, which represents the purchase price for 10 acres on
Oahu.
During 1994, the Company generated approximately $44.3
million of land sales, primarily from the sales of the
remaining two residential parcels at the Waikele project on
Oahu for approximately $37 million. The balance of the 1994
proceeds resulted from the sale of parcels aggregating 225
acres on various islands for approximately $7.3 million.
Additionally, the Company received an approximate $4.2 million
deposit, which represented the purchase price for 452 acres of
agriculture-zoned land on Maui. The gain from such sale is
being deferred due to certain profit participation rights
retained by the Company.
During 1993, the Company generated approximately $36.8
million of land sales, of which $23.1 million was from sales
of residential parcels at the Waikele project on Oahu. In
addition, the Company sold various parcels on the islands of
Maui and Kauai, aggregating 38 and 80 acres for
approximately $6.6 and $7 million, respectively. In April
1993, the Company received approximately $2 million from the
disposition of certain land parcels on Kauai, which was
recorded as a deposit due to certain closing conditions.
The Company expended approximately $.5 million, $3 million
and $16.5 million in 1995, 1994 and 1993, respectively, for
project costs at Waikele. Such costs include construction of
roadways, utilities and related infrastructure improvements
and the golf course and clubhouse. On a cumulative project-to-
date basis, the Company has expended approximately $116.8
million on project costs and has completed sales at Waikele of
approximately $230 million. Such sales have included
commercial property and parcel sales to home builders. Except
for certain contingent participation rights and the future
sale of a 3.3 acre church site, the Company has received all
of its proceeds from the sales of the residential and
commercial parcels at Waikele.
The Company is currently examining options for developing
the approximately 60 acres of fee simple land it owns at the
mill site of Oahu Sugar Company, and has begun the process of
seeking community input and the necessary government approvals
for a light industrial subdivision on an approximately 31-acre
portion of the property, which excludes property containing
the sugar mill and adjacent buildings. In connection with the
development of this property, the Company has received state
land use urbanization for the entire 60-acre site. In
addition, the Company has received an "industrial" city
development plan designation for 25.5 acres of the proposed 31-
acre light industrial subdivision, and is currently seeking
such "industrial" designation for the remaining 5.5 acres.
In March 1991, the Company received final land use approval
from the State for development of approximately 240
residential lots on approximately 125 acres of land known as
"South Beach Mauka" and located adjacent to the existing
Kaanapali Beach Resort. In connection with this land use
approval, the Company is committed to providing additional
housing on Maui in the affordable price range, and to
participating in the funding of the design and construction of
the planned bypass highway extending from Lahaina to
Kaanapali. The Company has entered into a development
agreement with the State Department of Transportation covering
the Company's participation in the design and construction of
the bypass highway development. It is anticipated that, upon
the receipt of government approvals, the Company will expend
up to $3.5 million (in the aggregate) in the design of the
bypass highway and/or the widening of the existing highway.
Financial participation by the Company of up to $6.7 million
for the construction of the bypass highway is subject to
certain conditions related to certain future land use
designations and zoning of Company lands. The development and
construction of the bypass highway is expected to be a long-
term project.
During 1993, the Company obtained final land use approval
from the State, and certification through the State's Housing
Finance Development Corporation ("HFDC"), for the development
of a project on approximately 300 acres of Company land known
as "Puukolii Village", which is also located near Kaanapali
Beach Resort. In connection with this land use approval, the
Company is committed to providing additional housing on Maui
in the affordable price range. The final land use approval
and the HFDC development agreement contain certain conditions
which must be satisfied in order for the Company to develop
Puukolii Village, including realigning the access road (which
will benefit uses for adjacent Company lands in future
periods). Moreover, development of certain portions of
Puukolii Village cannot commence until after completion of the
state-planned Lahaina bypass
highway (mentioned above). The proposed development of
Puukolii Village is anticipated to satisfy the Company's
affordable housing requirements in connection with the South
Beach Mauka land use approval as well as the North Beach
property. (described above). The Company anticipates
commencing construction of infrastructure for Puukolii Village
in 1996.
The planned development of the Company's land on Maui is
longer term in nature than Waikele. As Maui is less populated
than Oahu and more dependent on the resort/tourism industry,
much of the Company's land is intended for resort and resort-
related uses. Due to overall economic conditions and trends
in tourism, recent demand for these land uses has been
relatively weak. The Company's currently available homesite
product on Maui, which is targeted to the second home buyer,
has experienced very slow sales activity to date. The
Company's competitors on Maui have also experienced slow sales
activity in the second home market. The Company is continuing
to evaluate its planned products and the timing of development
of its land holdings in light of the current weak market
demand and the capital resources needed for future
development.
The Company is marketing Kaanapali Golf Estates, a new
residential community, which is part of South Beach Mauka
adjacent to the Kaanapali Beach Resort in West Maui. The
Company currently has approximately 20 homesites on the
market, which are priced from approximately $250,000 to in
excess of $1 million. The absorption period for this type of
product is difficult to forecast under the current economic
conditions. In 1996, the Company sold 8 homesites for
approximately $1.4 million to a developer who plans to
construct and sell houses on these lots.
In addition, the Company has subdivided an ocean front
parcel in Kaanapali into six single family homesites of
approximately one acre each. The individual lot prices range
from $1.9 million to $2.4 million. Sales of two of the lots
in the project closed in December 1995, generating total sales
proceeds of approximately $4.1 million. The Company is
marketing the remaining 4 lots.
In early 1986, the Company entered into a joint venture
agreement with Tobishima Pacific Inc., a wholly- owned
subsidiary of a Japanese company, the purpose of which is to
plan, manage and develop approximately 96 acres of beachfront
property at Kaanapali (known as "North Beach"). The joint
venture (in which the Company has a 50% interest) has State
land use and County zoning approvals for the subdivision and
development of the infrastructure improvements necessary to
accommodate up to 3,200 hotel and/or condominium units on this
site. These development plans may be affected by the current
review of state land designations (discussed below). This
North Beach property constitutes nearly all of the remaining
developable beachfront acreage at Kaanapali. In October 1992,
the Company completed construction of a 3-acre park on the
North Beach site, which is part of the master plan for this
property and was a requirement imposed by the County in
obtaining certain permits. The development of North Beach
continues to be tied to the completion of the aforementioned
Lahaina bypass highway or other traffic mitigation measures
satisfactory to the Maui County Planning Commission. The
Company is currently reviewing alternatives in providing other
traffic mitigation measures.
The Office of State Planning ("OSP") for the State of
Hawaii is currently implementing changes to the State
designations for land use throughout the State of Hawaii, a
process that is performed every five years. The Company is
not aware of any changes being made by the OSP that will
materially affect the current state land use designations for
Company lands.
In addition, citizen advisory committees ("CAC") reviewed
Maui County's Community Plans to determine whether changes
should be recommended, a process that is done every ten years.
As previously reported, one of the citizen advisory committees
involved in this review process recommended several changes to
the Lahaina Community Plan that could have an adverse impact
on Company lands, including one recommendation (among others)
to downzone to park designation roughly two-thirds of the
Company's North Beach property in Kaanapali. If the CAC
recommendations are ultimately followed, they could have a
material adverse effect on the value of the North Beach
property or on other Company lands.
The Company continues to vigorously oppose the
aforementioned CAC recommendations. The Company strongly
believes that such recommendations regarding Company lands are
wholly inappropriate and that the Company's arguments to
retain the current zoning and other entitlements are
meritorious. After the CAC made its recommendations, the Maui
County Planning Commission held public hearings and then
published its own recommendations as part of the Community
Plan review process. The Commission disagreed with most of
the CAC's recommendations and has recommended that there be no
substantial change in the land use designation for the
Company's lands, including North Beach. However, the Mayor of
Maui County has expressed concern to the Planning Commission
over further development at North Beach, and urged broad
review of the Lahaina Community Plan issues. A committee of
the Maui County Council conducted public hearings on the
Community Plan and has concurred with the Planning Commission
recommendation on North Beach. The Maui County Council has
held public hearings and public readings on the Community Plan
amendments in 1996. In February 1996, the Maui County Council
adopted a Community Plan ordinance for West Maui that does not
include any amendments to the current Community Plan
designation of North Beach (thus rejecting the CAC
recommendations). The ordinance will be sent to the Mayor of
the County of Maui for approval or disapproval. If the Mayor
disapproves the ordinance, she could require the West Maui
Community Plan Amendment process be recommenced once again.
While the Company is hopeful that its arguments will be
heeded, there can be no assurance that the current zoning (and
other land use designations and entitlements) for the North
Beach property and other Company lands will be retained, or
that efforts to recover just compensation for any loss of
current entitlements would be successful. Management
continues to evaluate and consider all alternatives in seeking
favorable resolutions to these entitlements and zoning issues.
Appropriate state land use designations and conformity
with county community plans are essential elements to the land
development process. It is impossible to predict the outcome
of these reviews at this time and, accordingly, the Company
cannot determine what impact (if any) these reviews will
ultimately have on the Company's lands.
Further, the Department of the Army has determined that
there are two wetlands sites on the North Beach property,
totaling approximately 21,800 square feet. The Company has
retained experts to evaluate these sites and to insure
compliance with all laws. While there can be no assurance as
to the ultimate determinations with respect to the wetlands
issue, the Company does not anticipate that these sites will
materially adversely affect the development plans for North
Beach.
In June 1994, the Company submitted a Land Use Boundary
Amendment Petition with the State of Hawaii Land Use
Commission ("LUC") and a General Plan Amendment Application
with the County of Kauai for the urbanization of approximately
552 acres of land on Kauai currently in sugar cane
cultivation. The proposed project is planned to be a mixed
use master planned community which will include a variety of
both affordable and market rate residential units, commercial
and industrial projects and a number of community and public
based facilities. The filing of these land use applications
is the first step required in converting agriculture zoned
land into urban zoned land. There are a number of additional
reports, studies, applications and permits that will be
required before final land use approvals are obtained. In May
1995, the County of Kauai approved the Company's General Plan
Amendment Application, subject to a number of conditions (to
be addressed during the subsequent zoning amendment process).
In December 1995, the LUC granted the Company the land use
amendments sought by the Company subject to a number of
conditions. While the Company is optimistic that the proposed
project will receive favorable support, it is anticipated that
the approval process will require at least 3 - 5 years. The
entitlement process in Hawaii has historically been a very
difficult and arduous process and there is no guarantee that
all approvals will be obtained. Once construction commences,
subject to market conditions, the project is expected to span
over 20 years.
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.
Item 8. Financial Statements and Supplementary Data
AMFAC/JMB HAWAII, INC.
INDEX
Report of Independent Auditors
Consolidated Balance Sheets, December 31, 1995 and 1994
Consolidated Statements of Operations for the years ended
December 31, 1995, 1994 and 1993
Consolidated Statements of Stockholder's Equity (Deficit) for
the years ended December 31, 1995, 1994 and 1993
Consolidated Statements of Cash Flows for the years ended
December 31, 1995, 1994 and 1993
Notes to Consolidated Financial Statements
Schedule
Valuation and Qualifying Accounts II
Schedules not filed:
All schedules other than the one indicated in the index
have been omitted as the required information is inapplicable
or the information is presented in the financial statements or
related notes.
AMFAC/JMB FINANCE, INC.
INDEX
Report of Independent Auditors
Balance Sheets, December 31, 1995 and 1994
Notes to the Balance Sheets
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.
REPORT OF INDEPENDENT AUDITORS
The Board of Directors and Stockholder
AMFAC/JMB HAWAII, INC.
We have audited the accompanying consolidated balance
sheets of Amfac/JMB Hawaii, Inc. as of December 31, 1995 and
1994, and the related consolidated statements of operations,
stockholder's equity (deficit), and cash flows for each of the
three years in the period ended December 31, 1995. Our audits
also included the financial statement schedule listed in the
Index at Item 8. These financial statements and schedule are
the responsibility of the Company's management. Our
responsibility is to express an opinion on these financial
statements and schedule based on our audits.
We conducted our audits in accordance with generally
accepted auditing standards. 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 consolidated financial statements
referred to above present fairly, in all material respects,
the consolidated financial position of Amfac/JMB Hawaii, Inc.
at December 31, 1995 and 1994, and the consolidated results of
its operations and its cash flows for each of the three years
in the period ended December 31, 1995, in conformity with
generally accepted accounting principles. Also, in our
opinion, the related 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.
ERNST & YOUNG LLP
Honolulu, Hawaii
March 18, 1996
<TABLE>
AMFAC/JMB HAWAII, INC.
Consolidated Balance Sheets
December 31, 1995 and 1994
(Dollars in Thousands)
A s s e t s
<CAPTION>
1995 1994
<S> <C> <C>
Current assets:
Cash and cash equivalents $11,745 31,702
Short-term investments -- 31,998
Receivables - net 8,720 14,943
Inventories 49,641 52,765
Prepaid expenses 3,102 4,379
------- --------
Total current assets 73,208 135,787
------- --------
Investments 45,080 45,046
------- --------
Property, plant and equipment:
Land and land improvements 336,069 346,169
Machinery and equipment 56,882 58,339
Construction in progress 1,428 1,060
------- --------
394,379 405,568
Less accumulated depreciation and amortization 27,762 24,221
------- --------
366,617 381,347
Deferred expenses 14,225 25,826
Other assets 28,468 26,541
------- --------
$527,598 614,547
======== ========
L i a b i l i t i e s
Current liabilities:
Accounts payable $8,562 9,882
Accrued expenses 13,268 15,372
Current portion of long-term debt 67,730 1,428
Current portion of deferred income taxes 10,902 4,205
Amounts due to affiliates 22,862 1,005
------- -------
Total current liabilities 123,324 31,892
------- -------
Amounts due to affiliates 76,911 15,097
Accumulated postretirement benefit obligation 61,037 67,378
AMFAC/JMB HAWAII, INC.
Consolidated Balance Sheets - Continued
December 31, 1995 and 1994
(Dollars in Thousands)
1995 1994
Long-term debt 26,765 95,556
Other long-term liabilities 34,366 45,077
Deferred income taxes 98,691 98,817
Certificate of Land Appreciation Notes 220,692 384,737
-------- --------
Total liabilities 641,786 738,554
-------- --------
Commitments and contingencies (notes 3, 4, 5, 6, 7, 8, 9, and 11)
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, no par value
Authorized, issued and outstanding 1,000 shares 1 1
Additional paid-in capital 11,495 14,384
Retained earnings (deficit) (125,684) (138,392)
-------- --------
Total stockholder's equity (deficit) (114,188) (124,007)
-------- --------
$527,598 614,547
======== ========
<FN>
The accompanying notes are an integral part of the consolidated financial
statements.
</TABLE>
<TABLE>
AMFAC/JMB HAWAII, INC.
Consolidated Statements of Operations
Years ended December 31, 1995, 1994 and 1993
(Dollars in Thousands)
<CAPTION>
1995 1994 1993
<S> <C> <C> <C>
Revenues:
Agriculture $47,656 89,237 84,208
Property 52,663 66,749 55,184
------- ------- --------
100,319 155,986 139,392
------- ------- --------
Cost of sales:
Agriculture 53,430 86,181 76,742
Property 30,853 38,531 29,653
------- ------- --------
84,283 124,712 106,395
Operating expenses:
Reduction to carrying value of investments in
real estate -- 5,000 --
Selling, general and administrative 11,666 13,817 13,720
Depreciation and amortization 6,723 7,216 5,807
------- ------- --------
Total costs and expenses 102,672 150,745 125,922
------- ------- --------
Operating income (loss) (2,353) 5,241 13,470
------- ------- --------
Non-operating income (expenses):
Gain on sale of investment -- -- 16,625
Amortization of deferred costs (1,557) (2,086) (2,110)
Interest income 1,288 1,977 1,070
Interest expense (25,233) (25,929) (23,520)
------- ------- --------
(25,502) (26,038) (7,935)
Income (loss) before taxes and extraordinary
item (27,855) (20,797) 5,535
Income tax (benefit) expense (8,019) (7,764) 6,044
------- -------- -------
Loss before extraordinary item (19,836) (13,033) (509)
Extraordinary gain from extinquishment of debt
(less applicable income taxes of $20,807) 32,544 -- --
------- -------- --------
Net income (loss) $12,708 (13,033) (509)
======== ======== ========
<FN>
The accompanying notes are an integral part of the consolidated financial
statements
</TABLE>
<TABLE>
AMFAC/JMB HAWAII, INC.
Consolidated Statements of Stockholder's Equity (Deficit)
Years ended December 31, 1995, 1994 and 1993
(Dollars in Thousands)
<CAPTION>
Total
Stock-
Retained holder's
Common Paid-In Earnings Equity
Stock Capital (Deficit) (Deficit)
<S> <C> <C> <C> <C>
Balance, December 31, 1992 $ 1 (12,246) (124,850) (137,095)
Net loss -- -- (509) (509)
Capital contribution -
current income taxes (note 12) -- 1,876 -- 1,876
------- -------- -------- ---------
Balance, December 31, 1993 1 (10,370) (125,359) (135,728)
Net loss -- -- (13,033) (13,033)
Capital contribution -
current income taxes (note 12) -- 24,754 -- 24,754
------- -------- -------- ---------
Balance, December 31, 1994 1 14,384 (138,392) (124,007)
Net income -- -- 12,708 12,708
Capital contribution -
current income taxes (note 12) -- (2,889) -- (2,889)
------- -------- --------- --------
Balance, December 31, 1995 $ 1 11,495 (125,684) (114,188)
======= ======== ========= ========
<FN>
The accompanying notes are an integral part of the consolidated financial
statements.
</TABLE>
<TABLE>
AMFAC/JMB HAWAII, INC.
Consolidated Statements of Cash Flows
Years ended December 31, 1995, 1994 and 1993
(Dollars in Thousands)
<CAPTION>
1995 1994 1993
-------- -------- -------
<S> <C> <C> <C>
Cash flows from operating activities:
Net income (loss) $12,708 (13,033) (509)
Items not requiring (providing) cash:
Depreciation and amortization 6,723 7,216 5,807
Amortization of deferred costs 1,557 2,086 2,110
Equity in earnings of investments 69 69 59
Income tax expense (benefit) 12,788 (7,764) 6,044
Extraordinary gain from extinguishment of debt(53,351) -- --
Reduction to carrying value of investments
in real estate -- 5,000 --
Gain on sale of investment in C&H -- -- (16,625)
Changes in:
Receivables - net 6,223 29 909
Inventories 12,364 33,437 3,583
Prepaid expenses 1,277 1,453 275
Accounts payable (1,320) (4,093) (2,512)
Accrued expenses (2,104) (1,116) (433)
Amounts due to affiliates 12,751 922 (1,806)
Other long-term liabilities (7,006) (2,258) (18,715)
------- ------- --------
Net cash provided by (used in)
operating activities 2,679 21,948 (21,813)
------- ------- --------
Cash flows from investing activities:
Property additions (5,145) (6,763) (11,222)
Property sales, disposals and retirements - net` 4,478 129 80
Investments in joint ventures and partnerships (103) (174) (147)
Short-term investments 31,998 (31,998) --
Other assets (1,927) (1,442) (2,824)
Other long-term liabilities (4,945) 1,413 7,515
Proceeds from the sale of C&H -- -- 35,680
------- ------- -------
Net cash provided by (used in)
investing activities 24,356 (38,835) 29,082
------- ------- -------
Cash flows from financing activities:
Deferred expenses 29 (394) (1,238)
Payment to redeem and purchase Certificate of
AMFAC/JMB HAWAII, INC.
Consolidated Statements of Cash Flows - Continued
Years ended December 31, 1995, 1994 and 1993
(Dollars in Thousands)
1995 1994 1993
------- ------- -------
Land Appreciation Notes (COLAS) (105,452) -- --
Net borrowings (repayments) under bank
line-of-credit agreement -- (8,000) 8,000
Net amounts due to affiliates 61,814 -- (13,001)
Net (repayments) proceeds of long-term debt (2,489) 5,103 25,881
Other costs related to extinguishment of debt (894) -- --
------- ------- --------
Net cash provided by (used in) financing activities
activities (46,992) (3,291) 19,642
------- ------- -------
Net increase (decrease) in cash and cash
equivalents (19,957) (20,178) 26,911
Cash and cash equivalents, beginning of year 31,702 51,880 24,969
------- ------- -------
Cash and cash equivalents, end of year $ 11,745 31,702 51,880
======= ======= =======
Supplemental disclosure of cash flow information:
Cash paid for interest(net of amount capitalized)$24,347 25,898 23,297
======= ======= =======
Schedule of non-cash investing and financing activities:
Transfer of property actively held for sale to
real estate inventories and accrued costs
relating to real estate sales 9,240 9,531 32,914
======= ======= =======
Disposition of debt:
Gain on extinguishment of debt $53,351 -- --
Face value of debt extinguished (164,045) -- --
Other costs related to debt extinguishement 894 -- --
Write-off of Contingent Base Interest (5,667) -- --
Write-off of deferred COLA costs 10,015 -- --
-------- ------- -------
Cash paid to redeem and purchase COLAS $(105,452) -- --
========= ======= =======
<FN>
The accompanying notes are an integral part of the consolidated financial
statements.
</TABLE>
AMFAC/JMB HAWAII, INC.
Notes to Consolidated Financial Statements
December 31, 1995, 1994 and 1993
(Dollars in Thousands)
(1) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
ORGANIZATION AND BASIS OF ACCOUNTING
On November 17, 1988, the stockholders of Amfac, Inc.
("Amfac") agreed to the merger ("Merger") of Amfac with an
affiliate of JMB Realty Corporation ("JMB"). The Merger was
consummated on November 18, 1988. Amfac/JMB Hawaii, Inc. ("the
Company"), was wholly-owned by Amfac, a subsidiary of
Northbrook Corporation ("Northbrook"). In May 1995, Amfac
merged into Northbrook, with Northbrook being the surviving
corporation.
The Company, or its subsidiaries hold title to
substantially all of the agricultural and developmental real
property and related assets of its parent corporation,
Northbrook, located in Hawaii. The Company is wholly-owned by
Northbrook, and is an affiliate of JMB as a result of the
Merger and the subsequent merger of a subsidiary of an
affiliate of JMB into Amfac Hawaii, Inc., which (after
changing its name to Amfac/JMB Hawaii, Inc.) continues as the
surviving corporation.
On December 5, 1988, the Company commenced a public offering
of Certificate of Land Appreciation Notes due 2008 ("COLAS")
of which a total of 384,737 COLAS were subscribed for and
issued. The offering terminated on August 31, 1989.
The Company has two primary business segments. The
agriculture segment ("Agriculture") is responsible for the
Company's activities related to the cultivation and processing
of sugar cane and other agricultural products. The real
estate segment ("Property") is responsible for land
development activities related to the Company's owned land in
the State of Hawaii.
PRINCIPLES OF CONSOLIDATION
The consolidated financial statements include the accounts
of the Company and its wholly-owned subsidiaries. All
significant intercompany balances and transactions have been
eliminated in consolidation.
STATEMENT OF CASH FLOWS
The Company's policy is to consider all amounts held with
original maturities of three months or less in U.S. government
obligations, certificates of deposit and money market funds
(approximately $3,700 and $25,427 at December 31, 1995 and
1994, respectively) as cash equivalents which approximates
market. These amounts include $1,623 and $2,139 at December
31, 1995 and 1994, respectively, which were restricted
primarily to fund debt service on long-term debt related to
the acquisition of power generation equipment (see note 6).
SHORT-TERM INVESTMENTS
Statement of Financial Accounting Standards No. 115 ("SFAS
No. 115"), "Accounting for Certain Investments in Debt and
Equity Securities", requires that certain debt and equity
securities that are bought and held principally for the
purpose of selling in the near term as well as debt securities
that are not held with the positive intent and ability to hold
to maturity to be reported at fair value. The Company held
approximately $0 and $9,818 in
AMFAC/JMB HAWAII, INC.
Notes to Consolidated Financial Statements - Continued
(Dollars in Thousands)
corporate debt securities and approximately $0 and $22,180 in
U.S. Government Agency obligations as of December 31, 1995 and
December 31, 1994, respectively. Due to the relative short-
term nature of the Company's investments and its policy of
generally holding such securities to maturity, the Company
considers its investments in such securities, which are
recorded at cost, to approximate fair value.
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. The
Company believes the carrying amounts of its financial
instruments classified as current assets and liabilities in
its balance sheet approximate SFAS No. 107 value due to the
relatively short maturity of these instruments. The Company
believes the carrying value of its long-term debt (notes 4 and
6) approximates fair value. SFAS No. 107 states that quoted
market prices are the best evidence of the SFAS No. 107 value
of financial instruments, even for instruments traded only in
thin markets. On March 15, 1995, pursuant to the indenture
that governs the terms of the COLAS (the "Indenture"), the
Company elected to exercise its right to redeem, and therefore
was obligated to purchase, any and all Class A COLAS submitted
pursuant to the Redemption Offer at a price of $.365 per Class
A COLA (see note 5). In conjunction with the Company's
election to repurchase the Class A COLAS submitted for
repurchase, the Company made a tender offer (the "Tender
Offer") to purchase up to approximately $68,000 principal
value of the Class B COLAS at a price of $.220 per Class B
COLA from COLA holders electing to have their Class A COLAS
repurchased. The Redemption Offer and the Tender Offer
consummated on June 1, 1995. Since such expiration, the secondary
market for COLAS has been extremely thin. Since June 1, 1995,
a limited number of COLA units have been sold in transactions
arranged by brokers for amounts ranging from approximately
$.250 to $.281 per Class B COLA and from approximately $.490
to $.540 per combined Class A and Class B COLA. Based on the
range of transactions since June 1,1995 and the number of
COLAS outstanding (with a per unit carrying value of $1.0 and
a total carrying value of $220,692 at December 31, 1995 in the
accompanying consolidated financial statements), the implied
SFAS No. 107 value of the COLAS would range from approximately
$109,000 - $121,000. However, due to restrictions on
prepayment and redemption as specified in the COLA Indenture,
as well as the methodology used to determine such value, the
Company does not believe that it would be able to refinance or
repurchase all of its outstanding COLA units as of December
31, 1995 at this value. Reference is made to Note 5 for
results of the Redemption and Tender Offer.
INVENTORY CAPITALIZATION AND RECOGNITION OF REVENUE FROM
THE SALE OF SUGAR
The Company capitalizes all of the expenditures incurred
in bringing crops to their existing condition and location.
Such capitalized expenditures include those costs related to
the planting, cultivation and growing of sugar cane grown on
the agricultural properties of the Company. Inventory
reflected in the accompanying consolidated balance sheets at
AMFAC/JMB HAWAII, INC.
Notes to Consolidated Financial Statements - Continued
(Dollars in Thousands)
December 31, 1995 and 1994 is not in excess of its estimated
net realizable value. Reductions in the estimated net
realizable value of unsold sugar are recognized when
anticipated. In determining the net realizable value of
unsold sugar, the price the Company uses is based upon the
domestic price of sugar. Prior to the 1993 sale of the
California and Hawaii Sugar Company ("C&H"), revenue and
related costs have been recognized upon the ultimate sale of
refined sugar by C&H. After the sale of C&H, the Company
recognizes revenue and related cost of sales upon delivery of
its raw sugar to C&H (see Note 3).
While raw sugar prices in the U.S. are currently
maintained above the world sugar prices as a result of price
supports, there can be no assurance that in the future such
prices will be maintained at the current level. As of the date
of this report, the U.S. Senate and the U.S. House of
Representatives have approved a new Farm Bill, which includes
a sugar program similar in nature to the program provided by
the previous Farm Bill. Both versions of this legislation
provide for a loan rate of 18 cents per pound, the same level
as today. However, the legislation includes certain other
adjustments to the sugar program, including making crop loans
recourse to the producer and repealing marketing allotments,
which may over time depress the domestic price of raw sugar.
House and Senate members still must meet to reconcile certain
differences. The Company is hopeful that final legislation
(approved by both Houses of Congress and the President) will
include support for the domestic sugar industry on a
comparable basis with the previous legislation. However, at
this stage there can be no assurance that the government loan
rate will not be reduced or be eliminated entirely. Such a
reduction or elimination of the loan rate could have a
material adverse effect on the Company's agricultural
operations, and possibly could cause the Company to evaluate
the cessation of its remaining sugar cane operations.
As part of the Company's agriculture operations, the
Company enters into commodities futures contracts and options
in sugar as deemed appropriate to reduce the risk of future
price fluctuations in sugar. These futures contracts and
options are accounted for as hedges and, accordingly, gains
and losses are deferred and recognized in cost of sales as
part of the production cost.
INVESTMENTS
Investments in certain partnerships and joint ventures,
if any, over which the Company exercises significant influence
are accounted for by the equity method. To the extent the
Company engages in such activities as general partner, the
Company is contingently liable for the obligations of its
partnership and joint venture investments.
LAND DEVELOPMENT
Project costs associated with the acquisition, development
and construction of real estate projects are capitalized and
classified as construction in progress. Such capitalized
costs are not in excess of the project's estimated fair value
as reviewed periodically or as considered necessary. In
addition, interest is capitalized to qualifying assets
AMFAC/JMB HAWAII, INC.
Notes to Consolidated Financial Statements - Continued
(Dollars in Thousands)
during the period that such assets are undergoing activities
necessary to prepare them for their intended use. Such
capitalized interest is charged to cost of sales as revenue
from the real estate development is recognized. No material
amounts have been capitalized for the years ended 1995 and
1994. Interest costs of approximately $2,643 have been
capitalized for the year ended 1993.
Land actively held for sale and any related development
costs transferred from construction in progress are reported
as inventories in the accompanying consolidated balance sheets
and are stated at the lower of cost or fair value less costs
to sell.
LONG-LIVED ASSETS
In March 1995, the Financial Accounting Standard Board
issued Statement of Financial Accounting Standards No. 121
("SFAS No. 121"), Accounting for the Impairment of Long-Lived
Assets and for Long-Lived Assets to Be Disposed Of, which
requires impairment losses to be recorded on long-lived assets
used in operation when indicators of impairment are present
and the undiscounted cash flows estimated to be generated by
those assets are less than the assets' carrying amount. SFAS
No. 121 also addresses the accounting for long-lived assets
that are expected to be disposed of. The Company adopted SFAS
No. 121 in the fourth quarter effective January 1, 1995, with
no effect on the accompanying financial statements.
EFFECTIVE INTEREST
For financial reporting purposes, the Company uses the
effective interest rate method and accrued interest on the
COLAS at 4% per annum ("Mandatory Base Interest") for the
years ended December 31, 1995, 1994 and 1993.
PROPERTY, PLANT AND EQUIPMENT
Property, plant and equipment are stated at cost.
Depreciation is based on the straight-line method over the
estimated economic lives of 20-40 years for land improvements
and 3-18 years for machinery and equipment, or the lease term
whichever is less. Maintenance and repairs are charged to
operations as incurred. Renewals and significant betterments
and improvements are capitalized and depreciated over their
estimated useful lives.
DEFERRED EXPENSES
Deferred expenses consist primarily of financing costs
related to the COLAS. Such costs are being amortized over the
term of the COLAS on a straight-line basis.
AMFAC/JMB HAWAII, INC.
Notes to Consolidated Financial Statements - Continued
(Dollars in Thousands)
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.
INCOME TAXES
The Company and its subsidiaries report their taxes as
part of the consolidated tax return of the Company's parent,
Northbrook. The Company and its subsidiaries have entered
into a tax indemnification agreement with Northbrook that
indemnifies the Company and its subsidiaries for
responsibility for all past, present and future federal and
state income tax liabilities (other than income taxes which
are directly attributable to cancellation of indebtedness
income caused by the repurchase or redemption of securities as
provided for in or contemplated by the Repurchase Agreement).
Current and deferred taxes have been allocated to the
Company as if the Company were a separate taxpayer in
accordance with the provision of SFAS No. 109-Accounting for
Income Taxes. However, to the extent the tax indemnification
agreement does not require the Company to actually pay income
taxes, current taxes payable or receivable have been reflected
as deemed contributions or distributions to additional paid-in
capital in the accompanying consolidated financial statements.
USE OF ESTIMATES
The preparation of financial statements in conformity
with generally accepted accounting principles 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.
AMFAC/JMB HAWAII, INC.
Notes to Consolidated Financial Statements - Continued
(Dollars in Thousands)
(2) ASSETS AND LIABILITIES INFORMATION
1995 1994
------ --------
Receivables - net:
Trade accts and notes (net of allowance) 2,252 1,898
Sugar and molasses 3,877 5,633
Insurance claims, net 1,440 5,512
Other 1,151 1,900
------- -------
$ 8,720 14,943
======= =======
Accrued expenses:
Payroll and benefits $2,592 3,361
Interest 7,929 7,043
Other 2,747 4,968
------- -------
$13,268 15,372
======= =======
(3) INVESTMENTS
The Company's investments at December 31, 1995 and 1994
consist of the following:
Carrying Value
---------------
Ownership
Description Percentage 1995 1994
- - ----------- ----------- ------ ------
Sugar Cooperatives 26.0% $ 40 40
North Beach Joint Venture 50.0% 45,040 45,006
------- -------
$45,080 45,046
======= =======
In June 1993, the Company's sugar plantation subsidiaries,
along with the other Hawaii sugar growers who owned interests
in the California and Hawaii Sugar Company ("C&H"),
consummated the sale of their investment in C&H, which
included their interests in C&H's refinery in Crockett,
California and in certain other C&H assets, to another large
Hawaii sugar grower. The Company's subsidiaries received gross
proceeds of approximately $35,700 and recognized a gain of
approximately $16,625 on the aforementioned sale of its 35%
equity interest in C&H.
AMFAC/JMB HAWAII, INC.
Notes to Consolidated Financial Statements - Continued
(Dollars in Thousands)
The Company's sugar plantation subsidiaries sell their raw
sugar production to the Hawaiian Sugar and Transportation
Company ("HSTC"), which is an agricultural cooperative owned
by the major Hawaii producers of raw sugar (including the
Company), under a new marketing agreement. HSTC sells the raw
sugar production to C&H (under its new ownership) pursuant to
a new long-term supply contract executed in conjunction with
this transaction. The terms of the supply contract do not
require a specified level of production by the Hawaii
producers; however, HSTC is obligated to sell and C&H is
obligated to purchase any raw sugar produced. The Company
holds a 26 percent equity interest in HSTC. HSTC returns to
its raw sugar suppliers proceeds based upon the domestic sugar
price less delivery and administrative charges. The Company
recognizes revenues and related cost of sales upon delivery of
its raw sugar to C&H. Prior to the sale of the Company's
interest in C&H, revenue and related costs were recognized
upon the ultimate sale of refined sugar by C&H.
The North Beach joint venture was formed during 1986 to
plan, manage and develop approximately 96 acres of beachfront
property located at the Kaanapali Beach Resort on West Maui.
In accordance with the COLA Indenture, appraisals were
performed for certain properties of the Company in 1994, which
reflected a decline in value of the North Beach property.
Accordingly, the Company recorded, as a matter of prudent
accounting practice, a $3,500 reduction to the carrying value
of its investment in the North Beach Joint Venture in 1994 to
properly reflect the estimated market value of the property in
its then current state of development. This reduction was
attributed to the weakness in the market for the development
and sale of resort-oriented real estate due to overall
economic conditions and trends in tourism.
The following is the condensed, combined financial
statement information (unaudited) of HSTC and the North Beach
joint venture:
1995 1994
--------------- -----------------
North Beach North Beach
Joint Venture HSTC Joint Venture HSTC
Current assets $ 210 30,819 131 21,878
Noncurrent assets 40,122 3,797 40,122 5,688
Current liabilities (205) (30,307) (144) (20,457)
Noncurrent liabilities -- (4,200) -- (7,000)
-------- ------- ------- --------
Equity $ 40,127 109 40,109 109
======== ======= ======== ========
1995 1994 1993
------ ----- ------
Revenue $202,954 312,526 154,680
Cost and expenses 20,513 28,472 20,685
-------- -------- --------
Net income $182,441 284,054 133,995
======== ======== ========
AMFAC/JMB HAWAII, INC.
Notes to Consolidated Financial Statements - Continued
(Dollars in Thousands)
(4) AMOUNTS DUE AFFILIATES - FINANCING
The maturity date of the approximately $15,097 of
remaining acquisition-related financing owed to affiliates has
been extended to June 1, 1997 and bears interest at a rate per
annum based upon the prime interest rate (8.5% at December 31,
1995), plus one percent. On July 30, 1993, using a portion of
the proceeds from the sale of its interests in C&H, the
Company paid down approximately $13,000 on the acquisition-
related financing.
On June 1, 1995, the Company borrowed $52,000 from
Northbrook to redeem Class A COLAS pursuant to the Redemption
Offer (see note 5). The Company has also borrowed
approximately $9,814 as of December 31, 1995, consisting of
approximately $4,400 for the August 1995 COLA Base Interest
payment and approximately $5,414 for working capital needs.
The loans from Northbrook are payable interest only, mature on
June 1, 1997 and carry an interest rate per annum equal to the
prime interest rate plus two percent. Pursuant to the
Indenture relating to the COLAS, the amounts borrowed from
Northbrook are considered "Senior Indebtedness" to the COLAS.
(5) CERTIFICATE OF LAND APPRECIATION NOTES
The COLAS are unsecured debt obligations of the Company.
Interest on the COLAS is payable semi-annually on February 28
and August 31 of each year. The COLAS mature on December 31,
2008, and bear interest after the Final Issuance Date (August
31, 1989) at a rate of 10% per annum ("Base Interest") of the
outstanding principal balance of the COLAS 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 (Net Cash Flow for any period is generally an
amount equal to 90% of the Company's net cash revenues and
receipts after payment of cash expenditures, including the
Qualified Allowance (as defined) other than federal and state
income taxes and after the establishment by the Company of
reserves).
In each calendar year, principal reductions may be made
from remaining Net Cash Flow, if any, in excess of all current
and unpaid deferred Contingent Base Interest and will be made
at the election of the Company (subject to certain
restrictions). The COLAS will bear additional contingent
interest in any year, after any principal reduction, equal to
55% of remaining Net Cash Flow. Upon maturity, holders of
COLAS will be entitled to receive the remaining outstanding
principal balance of the COLAS plus unpaid mandatory Base
Interest plus additional interest equal to the unpaid
Contingent Base Interest, to the extent of the Maturity Market
Value (Maturity Market Value generally means 90% of the excess
of the Fair Market Value (as defined) of the Company's assets
at Maturity over its liabilities incurred in connection with
its operations), plus 55% of the remaining Maturity Market
Value.
On March 14, 1989, Amfac/JMB Finance ("Finance"), a wholly-
owned subsidiary of Northbrook, and the Company entered into
an agreement (the "Repurchase Agreement") concerning Finance's
obligations to repurchase, on June 1, 1995 and 1999, the COLAS
upon request of the holders thereof. The COLAS were issued in
two units consisting of one Class A and one Class B COLA. As
specified in the Repurchase Agreement, the repurchase of the
Class A COLAS may have been requested by the holders of such
COLAS on June 1, 1995 at a price equal to the original
principal amount of such COLAS ($.5) minus all payments of
principal and interest allocated to such COLAS. The cumulative
interest paid per Class A COLA through June 1, 1995 was $.135.
The repurchase of the Class B COLAS may be requested of
Finance by the holders of such COLAS on June 1, 1999 at a
price equal to 125% of the original principal amount of such
COLAS ($.5) minus all payments of principal and interest
allocated to such COLAS. Through the date of this report, the
cumulative interest paid per Class A and Class B COLA is
approximately $.145 and $.145, respectively.
On March 14, 1989, Northbrook entered into a keep-well
agreement with Finance, whereby it agreed to contribute
sufficient capital or make loans to Finance to enable Finance
to meet its COLA repurchase obligations described above.
Notwithstanding Finance's repurchase obligations, the Company
may elect to redeem any COLAS requested to be repurchased at
the specified price.
On March 15, 1995, pursuant to the indenture that governs
the terms of the COLAS (the "Indenture"), the Company elected
to offer to redeem (the "Redemption Offer") all Class A COLAS
from the registered holders, thereby eliminating Finance's
obligation to satisfy the Class A COLA repurchase options
requested by such holders as of June 1, 1995. Pursuant to the
Redemption Offer, and in accordance with the terms of the
Indenture, the Company was therefore obligated to purchase any
and all Class A COLAS submitted pursuant to the Redemption
Offer at a price of $.365 per Class A COLA. In conjunction
with the Company's Redemption Offer, the Company made a tender
offer (the "Tender Offer") to purchase up to approximately
$68,000 principal value of the Class B COLAS at a price of
$.220 per Class B COLA from COLA holders electing to have
their Class A COLAS repurchased.
The two offers to repurchase the COLAS terminated on
April 17, 1995 in accordance with their terms and with the
Indenture. Approximately 229,000 Class A COLAS were submitted
for repurchase pursuant to the Redemption Offer and
approximately 99,000 Class B COLAS were submitted for
repurchase pursuant to the Tender Offer, requiring an
aggregate payment by the Company of approximately $105,450 on
June 1, 1995. The Company used its available cash to purchase
Class B COLAS pursuant to the Tender Offer and borrowed
$52,000 from Northbrook to purchase Class A COLAS pursuant to
the Redemption Offer.
As a result of the repurchases, the Company retired
approximately $164,045 in face value of COLA debt and
recognized a financial statement extraordinary gain of
approximately $32,544 (net of income taxes of $20,807, the
write-off of deferred financing costs of $10,015, the write-
off of accrued contingent base interest of $5,667 and expenses
of $894). Such gain
is treated as cancellation of indebtedness income for tax
purposes and, accordingly, the income taxes related to the
Class A Redemption Offer (approximately $9,106) will not be
indemnified by the tax agreement with Northbrook (see note 1).
The terms of the Indenture relating to the COLAS place
certain restrictions on the Company's declaration and payment
of dividends. Such restrictions generally relate to the
source, timing and amounts which may be declared and/or paid.
The COLAS also impose certain restrictions on, among other
things, the creation of additional indebtedness for certain
purposes, the Company's ability to consolidate or merge with
or into other entities, and the Company's transactions with
affiliates.
(6) LONG-TERM DEBT
In June 1991, the Company obtained a five-year $66,000
loan from the Employees' Retirement System of the State of
Hawaii ("ERS"). An initial funding of $60,000 was received in
June 1991. The remaining balance of $6,000 was added to the
principal balance on July 1, 1992 in payment of the first year
of accrued interest on the loan. The non-recourse loan is
secured by a first mortgage on the Kaanapali Golf Courses, and
is considered "Senior Indebtedness" (as defined in the
Indenture relating to the COLAS). The loan bears interest at
a rate per annum equal to the greater of (i) the base interest
rate announced by the Bank of Hawaii on the first of July for
each subsequent year (9% at July 1, 1995) plus one percent or
(ii) ten percent per annum through June 30, 1993 and nine
percent per annum thereafter. The loan is payable interest
only on a quarterly basis. The annual interest payments are
in excess of the cash flow generated by the Kaanapali Golf
Courses and the Company ceased making required debt service
payments in April 1995. The Company has been working with the
ERS to renegotiate the terms of the loan including a possible
extension of the June 1996 maturity date. The principal
balance has been included in the current portion of long-term
debt as of December 31, 1995 in the accompanying consolidated
financial statements. In conjunction with the Company's
renegotiations, the Company made an interest payment of $1,650
in August 1995. The Company has not made all interest
payments required under the current loan terms resulting in
unpaid interest at December 31, 1995 of $4,620. Although the
Company expects to successfully conclude the loan
renegotiation, there can be no assurance that new terms will
be consummated, or consummated on terms favorable to the
Company.
In January 1993, The Lihue Plantation Company, Limited
("Lihue") obtained a ten-year $13,250 loan used to fund the
acquisition of Lihue's power generation equipment. The
$13,250 loan, constituting "Senior Indebtedness" under the
COLAS' Indenture, consists of two ten year amortizing term
loans of $10,000 and $3,250, respectively, payable in forty
consecutive installments commencing July 1, 1993 in the
principal amount of $250 and $81, respectively (plus
interest). The $10,000 and $3,250 loans have outstanding
balances of $7,500 and $1,079, respectively, as of December
31, 1995 and bear interest at a rate equal to prime rate (8.5%
at December 31, 1995) plus three and one half percent and
prime rate plus four and one-half percent, respectively.
Lihue has purchased an interest rate agreement which protects
against fluctuations in interest rates and effectively caps
the
AMFAC/JMB HAWAII, INC.
Notes to Consolidated Financial Statements - Continued
(Dollars in Thousands)
prime rate for the first seven years of the loan agreement at
eight percent. The loan is secured by the Lihue power
generation equipment, sugar inventories and receivables,
certain other assets and real property of the Company and has
limited recourse to the Company and certain other
subsidiaries.
In October 1993, Waikele Golf Club, Inc. ("WGCI"), a
wholly-owned subsidiary of the Company that owns and operates
the Waikele Golf Course, obtained a five year $20,000 loan
facility from two lenders. The loan consists of two $10,000
amortizing loans. Each loan bears interest only for the first
two years and interest and principal payments based upon an
assumed 20 year amortization period for the remaining three
years. The loans bear interest at prime plus 1/2% and LIBOR
(5.7% at December 31, 1995) plus 3%, respectively. WGCI
received an initial funding of $14,000, of which $600 was held
back by the lenders to pay interest. In October 1994, in
accordance with the loan agreement, the Company received an
additional funding of $6,000 and a release of the $600
interest holdback, both of which were contingent upon
achieving a certain level of Net Operating Income (as defined)
by the golf course during the first six months of 1994. The
loan is secured by WGCI's assets (the golf course and related
improvements and equipment), is guaranteed by the Company, and
is considered "Senior Indebtedness" (as defined in the
Indenture relating to the COLAS). As of December 31, 1995,
the outstanding balance was $19,916, with scheduled annual
principal maturities of $405 in 1996 and 1997 and the balance
of $19,106 in 1998.
(7) RENTAL ARRANGEMENTS
As Lessee
The Company rents, as lessee, various land, facilities
and equipment under operating leases. Most land leases
provide for renewal options and minimum rentals plus
contingent payments based on revenues or profits. Included in
rent expense are minimum rentals and contingent payments for
operating leases in the following amounts:
1995 1994 1993
------ ----- -------
Minimum and fixed rents $2,789 3,956 3,953
Contingent payments 1,261 2,476 1,502
Property taxes, insurance and other
charges 445 669 409
------- ------ ------
$4,495 7,101 5,864
========= ======== =======
Future minimum lease payments under noncancelable
operating leases aggregate approximately $11,546 and are due
as follows: 1996, $1,588; 1997, $1,559; 1998, $1,465; 1999,
$1,397; 2000, $1,181; and thereafter, $4,356.
AMFAC/JMB HAWAII, INC.
Notes to Consolidated Financial Statements - Continued
(Dollars in Thousands)
(8) EMPLOYEE BENEFIT PLANS
The Company participates in benefit plans covering
substantially all its employees, which provide benefits based
primarily on length of service and compensation levels. These
plans are administered by Northbrook in conjunction with other
plans providing benefits to employees of Northbrook and its
affiliates.
Northbrook'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 ERISA guidelines, amounts funded may be more
or less than the pension expense recognized for financial
reporting purposes. One of the Company's defined benefit
plans, the Retirement Plan for the Employees of Amfac, Inc.
(the "Plan"), terminated effective December 31, 1994. The
settlement of the plan occurred in May 1995. The Company
replaced this plan with the "Core Retirement Award Program", a
defined contribution plan that commenced on January 1, 1995.
In the new plan, an Eligible Employee (as defined) is credited
with an annual contribution equal to 3% of the employee's
qualified compensation. The new plan's cost to the Company
and the benefits provided to the participants are comparable
to the former plan.
Charges for pension and Core Retirement Award costs
allocated to the Company aggregated approximately $961, $1,000
and $1,200 for the years ended December 31, 1995, 1994 and
1993, respectively.
In addition to providing pension benefits, the Company
also provides certain healthcare and life insurance benefits
to eligible retired employees of some of its businesses.
Where such benefits are offered, substantially all employees
may become eligible for such benefits if they reach a
specified retirement age while employed by the Company 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 the Company and the International
Longshoremen's & Warehousemen's Union. The postretirement
life insurance plan is non-contributory. The Company
continues to fund benefit costs for both plans on a pay-as-you-
go basis.
AMFAC/JMB HAWAII, INC.
Notes to Consolidated Financial Statements - Continued
(Dollars in Thousands)
Net periodic postretirement benefit cost for 1995, 1994
and 1993 includes the following components:
December 31, December 31, December 31,
1995 1994 1993
---------------- --------------- --------------
Life Life Life
Medical Ins. Medical Ins. Medical Ins.
Plans Plans Total Plans Plans Total Plans Plan Total
Service cost $ 378 15 393 483 17 500 754 18 772
Interest cost 1,991 296 2,287 3,428 292 3,720 4,891 298 5,189
Amortization of
net(gain)loss (3,310) 24 (3,286)(1,290) 35 (1,255) -- -- --
----- ------ ------ ------ ---- ------ ----- ----- ----
Net periodic
postretirement
benefit cost
(credit) $(941) 335 (606) 2,621 344 2,965 5,645 316 5,961
===== ====== ===== ====== ====== ===== ====== ===== =====
The following table sets forth the plans' combined funded
status reconciled with the amounts included in the Company's
consolidated financial statements at December 31, 1995 and
1994:
December 31, December 31,
1995 1994
---------------- ---------------
Life Life
Medical Ins. Medical Ins.
Plans Plan Total Plans Plan Total
Accumulated postretirement
benefit obligaion:
Retirees $16,048 3,915 19,963 29,092 3,921 33,013
Fully eligible active
plan members 310 29 339 1,213 46 1,259
Other active plan members 6,928 153 7,081 7,761 214 7,975
------ ------ ------ ------ ------ -----
23,286 4,097 27,383 38,066 4,181 42,247
Unrecognized net
gain (loss) 33,958 (304) 33,654 25,376 (245) 25,131
------ ------ ------ ------ ------ ----
Accrued postretirement
benefit cost 57,244 3,793 61,037 63,442 3,936 67,378
====== ====== ====== ====== ===== ======
AMFAC/JMB HAWAII, INC.
Notes to Consolidated Financial Statements - Continued
(Dollars in Thousands)
For measuring the expected postretirement benefit
obligation, an 11% annual rate of increase in the per capita
claims cost was assumed for 1996 through 2002. This rate was
assumed to decrease to 6% in 2003 and remain at that level
thereafter. The healthcare cost trend rate assumption has a
significant effect on the amount of the obligation and
periodic cost reported. An increase in the assumed healthcare
trend rate by 1% in each year would increase the medical
plans' accumulated postretirement benefit obligation as of
December 31, 1995 by 9% and the aggregate of the service and
interest cost components of net periodic postretirement
benefit cost for the year then ended by 8%. During 1995,
premiums for health benefits for retirees were adjusted to
match actual claims experience. This adjustment resulted in a
reduction to the cost absorbed by the Company due to the cost
sharing provisions of the health care benefit plan. This
adjustment also resulted in the reduction of the accumulated
postretirement benefit obligation as of December 31, 1995.
The Company currently amortizes unrecognized gains over
the shorter of 10 years or the average remaining service
period of active plan participants. However, due to the
significant amount of unrecognized gain at December 31, 1995,
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, 1995, the Company may, in the future, change its
amortization policy to accelerate the recognition of the
unrecognized gain. In considering such change, the Company
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 the Company's cash
flows, but could have a significant effect on its statement of
operations.
The weighted-average discount rate used in determining
the accumulated postretirement benefit obligation as of
December 31, 1995 and 1994 was 7.5% and 7.5%, respectively.
(9) TRANSACTIONS WITH AFFILIATES
The Company incurred interest expense of approximately
$5,360, $1,267 and $1,605 for the years ended December 31,
1995, 1994 and 1993, respectively, in connection with the
financing obtained from an affiliate (see note 4), of which
$4,865 was unpaid as of December 31, 1995.
With respect to any calendar year, JMB or its affiliates
are entitled to, with respect to any calendar year, a
Qualified Allowance in an amount equal to: (i) approximately
$6,200 during each of the calendar years 1989 through 1993;
and (ii) thereafter, 1-1/2% per annum of the Fair Market Value
(as defined) of the gross assets of the Company and its
subsidiaries (other than cash and cash equivalents and
Excluded Assets (as defined)). However, such amounts shall be
paid for each year only following the payment of a specified
level of Base Interest to the holders of the COLAS. Any
portion of the Qualified Allowance not paid for any year shall
accumulate without interest. A Qualified Allowance for 1989
of approximately $6,200 was paid
AMFAC/JMB HAWAII, INC.
Notes to Consolidated Financial Statements - Continued
(Dollars in Thousands)
on February 28, 1990. Any Qualified Allowance for 1990
through 1995 has been deferred and is payable only to the
extent future Net Cash Flows are sufficient to pay the holders
of the COLAS a specified level of return, and accordingly, no
such amounts have been reflected in the accompanying
consolidated financial statements.
The Company, its subsidiaries and their joint ventures
reimburse Northbrook, JMB and their affiliates for direct
expenses incurred on their behalf, including salaries and
salary-related expenses incurred in connection with the
management of the Company's or its subsidiaries' and the joint
ventures' operations. The total of such costs through
December 31, 1995, 1994 and 1993 was approximately $587, $500
and $3,160, respectively, of which $587 was unpaid as of
December 31, 1995. In addition, as of December 31, 1995, the
current portion of amounts due to affiliates includes $9,106
of income tax payable related to the Class A COLA Redemption
Offer (see note 5). Also, the Company pays a non-accountable
reimbursement of approximately $30 per month to JMB or its
affiliates in respect of general overhead expense, all of
which was paid as of December 31, 1995.
JMB Insurance Agency, Inc. 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 available to the Company in similar dealings with
unaffiliated third parties. The total of such commissions in
1995 was approximately $653, all of which was paid as of
December 31, 1995.
Northbrook and its affiliates allocate certain charges for
services to the Company based upon the estimated level of
services, of which $8,253 was unpaid as of December 31, 1995.
These services and costs are intended to reflect the Company's
separate costs of doing business and are principally related
to the inclusion of the Company's employees in the Northbrook
pension plan, payment of severance and termination benefits
and reimbursement for insurance claims paid on behalf of the
Company. All amounts described above, deferred or currently
payable, do not bear interest and are expected to be paid in
future periods.
(10) SIGNIFICANT CUSTOMER
During 1994 and 1993, approximately 24% and 17%,
respectively, of the Company's revenues were derived from the
sale of land parcels at Waikele to a single builder.
As a result of the Company's interest in HSTC, C&H is
contractually bound to purchase all of the sugar the Company
produces. If, for any reason, C&H were to cease its
operations, the Company would seek other purchasers for its
sugar.
(11) COMMITMENTS AND CONTINGENCIES
The Company is involved in various matters of litigation
and other claims. Management, after consultation with legal
counsel, is of the opinion that the Company's liability (if
any) when ultimately determined will not have a material
adverse effect on the Company's financial position.
AMFAC/JMB HAWAII, INC.
Notes to Consolidated Financial Statements - Continued
(Dollars in Thousands)
The Company's property segment had contractual
commitments (related to project costs) of approximately $2,800
as of December 31, 1995. Additional development expenditures
are dependent upon the ability to obtain financing and the
timing and extent of property development and sales.
As of December 31, 1995, certain portions of the Company's
land not currently under development or used in sugar
operations are mortgaged as security for $1,128 of performance
bonds related to property development.
(12) INCOME TAXES
Total income tax expense (benefit) for the years ended
December 31, 1995, 1994 and 1993 was allocated as follows:
1995 1994 1993
------- ------- --------
Income (loss) before extraordinary gain $(8,019) (7,764) 6,044
Extraordinary gain 20,807 -- --
------- ------- ------
$12,788 (7,764) 6,044
======= ======= ======
Income tax expense (benefit) attributable to income (loss)
before extraordinary gain for the years ended December 31,
1995, 1994 and 1993 consists of:
Current Deferred Total
-------- --------- -------
Year ended December 31, 1995:
U.S. federal $(10,475) 3,689 (6,786)
State (1,904) 671 (1,233)
-------- ----- ------
(12,379) 4,360 (8,019)
======= ======= =======
Year ended December 31, 1994:
U.S. federal $ 20,946 (27,515) (6,569)
State 3,808 (5,003) (1,195)
------- -------- --------
$24,754 (32,518) (7,764)
======= ======== ========
Year ended December 31, 1993:
U.S. federal $ 1,587 4,059 5,646
State 289 109 398
-------- -------- --------
$ 1,876 4,168 6,044
======= ======= ========
AMFAC/JMB HAWAII, INC.
Notes to Consolidated Financial Statements - Continued
(Dollars in Thousands)
Income tax expense related to the COLA redemption
approximated $20,807. Of this amount, approximately $9,106 is
attributable to current taxes related to the redeemed Class A
COLA's and, accordingly, will not be indemnified by Northbrook
(see note 9). Current income tax expense attributable to the
Class B COLA's of approximately $9,490 is indemnified by
Northbrook and, accordingly, is deducted from the 1995 current
tax benefit of $12,379 attributable to loss before
extraordinary gain to derive the 1995 capital contribution
related to current income taxes.
Income tax expense (benefit) attributable to income (loss)
before extraordinary gain differs from the amounts computed by
applying the U.S. federal income tax rate of 35 percent to
pretax income (loss) before extraordinary gain as a result of
the following:
1995 1994 1993
------ ------ ------
Computed "expected" tax expense (benefit)
$(9,749) (7,279) 1,937
Increase (reduction) in income taxes
resulting from:
Pension and Core Retirement Award expense 2,478 365 452
State income taxes, net of federal income
tax benefit (823) (796) 265
Adjustment to deferred tax assets and liabilities
for enacted changes in tax laws and rates -- -- 3,457
Other, net 75 (54) (67)
------- ------- -------
Total $(8,019) (7,764) 6,044
======== ======= =======
AMFAC/JMB HAWAII, INC.
Notes to Consolidated Financial Statements - Continued
(Dollars in Thousands)
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. Significant components
of the Company's deferred tax liabilities and assets as of
December 31, 1995 and 1994 are as follows:
1995 1994
Deferred tax (assets):
Postretirement benefits $(23,804) (28,461)
Interest accruals (3,149) (5,345)
Other accruals (3,074) (4,513)
-------- --------
Total deferred tax assets (30,027) (38,319)
-------- --------
Deferred tax liabilities:
Accounts receivable related to profit
on sales of sugar 3,332 2,255
Inventories, principally due to sugar
production costs, capitalized costs,
captitalized interest and purchase
accounting adjustments 4,716 1,962
Plant and equipment, principally due to
depreciation and purchase accounting adj. 7,696 6,146
Land and land improvements, principally due to
purchase accounting adjustments 101,204 105,926
Deferred gains due to installment sales for
income tax purposes 8,492 10,079
Investments in unconsolidated entities,
principally due to purchase acct'g adjs. 14,180 14,973
------- -------
Total deferred tax liabilities 139,620 141,341
------- -------
Net deferred tax liability $109,593 103,022
========= ========
AMFAC/JMB HAWAII, INC.
Notes to Consolidated Financial Statements - Concluded
(Dollars in Thousands)
(13) SEGMENT INFORMATION
Agriculture and Property comprise the separate industry
segments of the Company. Operating income (loss)-Other
consists primarily of unallocated overhead expenses and Total
assets-Other consists primarily of cash and deferred expenses.
Total revenues, operating income (loss), assets, capital
expenditures, and depreciation and amortization by industry
segment for 1995, 1994 and 1993 are set forth below:
1995 1994 1993
Revenues:
Agriculture $ 47,656 89,237 84,208
Property 52,663 66,749 55,184
-------- -------- --------
$ 100,319 155,986 139,392
======== ======== ========
Operating income (loss):
Property $ 11,122 12,934 18,947
Agriculture (10,882) (3,893) 1,119
Other (2,593) (3,800) (6,596)
-------- -------- --------
$ (2,353) 5,241 13,470
======== ======== ========
Total assets:
Property $199,999 207,980 233,993
Agriculture 304,170 321,906 333,600
Other 23,429 84,661 77,118
-------- -------- --------
$527,598 614,547 644,711
======== ======== ========
Capital expenditures:
Property $ 1,529 2,872 1,957
Agriculture 3,616 3,891 9,265
Other -- -- --
------- -------- --------
$ 5,145 6,763 11,222
======= ======== ========
Depreciation and amortization:
Property $ 1,991 2,128 1,185
Agriculture 4,538 4,889 4,287
Other 194 199 335
------- ------- --------
$ 6,723 7,216 5,807
======= ======= ========
(14) SUBSEQUENT EVENT
On February 29, 1996, an interest payment of
approximately $4,414 was paid to the holders of COLAS. The
Company borrowed approximately $4,414 from Northbrook to make
the interest payment.
<TABLE>
Schedule II
AMFAC/JMB HAWAII, INC.
Valuation and Qualifying Accounts
Years ended December 31, 1995, 1994 and 1993
(Dollars in Thousands)
<CAPTION>
Additions Additions
Balance at Charges to Charges to Balance at
Beginning Cost and Other End
Description of Period Expenses Accounts Deductions of Period
<S> <C> <C> <C> <C> <C>
Year ended December 31,
1995:
Allowance for doubtful
accounts:
Trade accounts $ 285 102 -- 26 361
Claims and other 1,144 -- -- 1,144 --
------ ------ ------ ------ ------
$1,429 102 -- 1,170 361
====== ====== ====== ====== =======
Year ended December 31,
1994:
Allowance for doubtful
accounts:
Trade accounts $ 235 89 -- 39 285
Claims and other 1,144 -- -- -- 1,144
------ ------ ------ ------- -------
$1,379 89 -- 39 1,429
====== ====== ====== ======= =======
Year ended December 31,
1993:
Allowance for doubtful
accounts:
Trade accounts $ 224 16 -- 5 235
Claims and other -- -- 1,144 -- 1,144
------- ------ ------ ------ -------
$ 224 16 1,144 5 1,379
======= ====== ====== ====== ======
</TABLE>
REPORT OF INDEPENDENT AUDITORS
The Board of Directors and Stockholder
AMFAC/JMB FINANCE, INC.
We have audited the accompanying balance sheets of
Amfac/JMB Finance, Inc. as of December 31, 1995 and 1994.
These balance sheets are the responsibility of the Company's
management. Our responsibility is to express an opinion on
these balance sheets based on our audits.
We conducted our audits in accordance with generally
accepted auditing standards. Those standards require that we
plan and perform the audit to obtain reasonable assurance
about whether the balance sheets are free of material
misstatement. An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the balance
sheets. An audit also includes assessing the accounting
principles used and significant estimates made by management,
as well as evaluating the overall balance sheet presentation.
We believe that our audits provide a reasonable basis for our
opinion.
In our opinion, the balance sheets referred to above
present fairly, in all material respects, the financial
position of Amfac/JMB Finance, Inc. at December 31, 1995 and
1994, in conformity with generally accepted accounting
principles.
ERNST & YOUNG LLP
Honolulu, Hawaii
March 18, 1996
<TABLE>
AMFAC/JMB FINANCE, INC.
Balance Sheets
December 31, 1995 and 1994
(Dollars in thousands, except per share information)
A S S E T S
<CAPTION>
1995 1994
------ ------
<S> <C> <C>
Current assets:
Cash $ 1 1
Receivable from an affiliate (Note 2) -- 140,425
------- --------
$ 1 140,426
======= ========
L I A B I L I T Y A N D S T O C K H O L D E R ' S E Q U I T Y
Current liabilities:
Repurchase obligations (Note 3) $ -- 140,425
Common stock, $1 par value;
authorized, issued and outstanding - 1,000 shares 1 1
------- -------
$ 1 140,426
======= =======
<FN>
The accompanying notes are an integral part of these balance sheets.
</TABLE>
AMFAC/JMB FINANCE, INC.
Notes to the Balance Sheets
December 31, 1995 and 1994
(Dollars in Thousands)
(1) ORGANIZATION AND ACCOUNTING POLICY
Amfac/JMB Finance, Inc. ("Finance") was incorporated
November 7, 1988 in the State of Illinois. Finance has had no
financial operations. All of the outstanding shares of
Finance are owned by Northbrook Corporation ("Northbrook").
(2) RECEIVABLE FROM AN AFFILIATE
On March 14, 1989, Northbrook entered into a keep-well
agreement with Finance, whereby it agreed to contribute
sufficient capital to Finance to enable Finance to meet the
COLA repurchase obligations described below in Note 3.
Pursuant to Northbrook's obligation to Finance under the keep-
well agreement, Finance has recorded a receivable equal to the
maximum amount of its liability from the COLA repurchase
obligations of approximately $140,425 and accordingly, had
classified such amount as a current asset on its financial
statements.
On March 15, 1995, pursuant to the indenture that governs
the terms of the COLAS (the "Indenture"), Amfac/JMB Hawaii,
Inc. elected to exercise its right to redeem, and therefore
was obligated to purchase, any and all Class A COLAS submitted
pursuant to the Redemption Offer at a price of $.365 per Class
A COLA. Pursuant to Amfac/JMB Hawaii, Inc.'s election to
redeem the Class A COLAS for repurchase, Amfac/JMB Hawaii,
Inc. assumed Finance's maximum amount of its liability from
the COLA repurchase obligations of $140,425 and accordingly,
Finance removed the receivable and liability from its
financial statements.
(3) REPURCHASE OBLIGATIONS
On March 14, 1989, Finance and a subsidiary of Northbrook
(Amfac/JMB Hawaii, Inc.) entered into an agreement (the
"Repurchase Agreement") concerning Finance's obligation (on
June 1, 1995 and 1999) to repurchase, upon request of the
holders thereof, the Certificate of Land Appreciation Notes
due 2008 ("COLAS"), to be issued by Amfac/JMB Hawaii, Inc. in
conjunction with the acquisition of Amfac/JMB Hawaii, Inc.. A
total aggregate principal amount of $384,737 of COLAS were
issued during the offering, which terminated on August 31,
1989. The COLAS were issued in two units consisting of one
Class A and one Class B COLA. As specified in the Repurchase
Agreement, the repurchase of the Class A COLAS may have been
requested of Finance by the holders of such COLAS on June 1,
1995 at a price equal to the original principal amount of such
COLAS ($.500) minus all payments of principal and interest
allocated to such COLAS. The cumulative interest paid per
Class A COLA through June 1, 1995 was $.135. The repurchase
of the Class B COLAS may be requested of Finance by the
holders of such COLAS on June 1, 1999 at a price equal to 125%
of the original principal amount of such COLAS ($.500) minus
all payments of principal and interest allocated to such
COLAS. To date, the cumulative interest paid per Class B COLA
is approximately $.145.
Item 9. 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 1995 and 1994.
PART III
Item 10. Directors and Executive Officers of the Registrant
As of December 31, 1995, the directors, executive
officers and certain other officers of the Company were as
follows:
Position
Held with
Name the Company
Judd D. Malkin Chairman
Neil G. Bluhm Vice Chairman
Edward G. Karl President,Chief Executive
Officer and Director
Gary Grottke Executive Vice President,
Chief Operating Officer and Director
Chris J. Kanazawa Senior Vice President and Director
Peggy H. Sugimoto Senior Vice President and
Chief Financial Officer
Bert L. Hatton Vice President
P. Eric Hohmann Vice President
Timothy E.Johns Vice President
Teney K. Takahashi Vice President
Certain of these officers are also officers and/or
directors of JMB and numerous affiliated companies of JMB
(hereinafter collectively referred to as "JMB affiliates") and
many of such officers are also partners of certain
partnerships (herein collectively referred to as the
"Associate Partnerships") which are associate general partners
(or general partners thereof) in publicly offered real estate
limited partnerships. The publicly offered partnerships in
which the Associate Partnerships are partners have not 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. However, certain partnerships sponsored by JMB and
other affiliates of JMB are engaged in development activities
including planned communities, none of which are in Hawaii.
There is no family relationship among any of the
foregoing directors or officers.
The foregoing directors have been elected to serve one-
year terms until the next annual meeting to be held on the
Second Tuesday of August 1996 or until his successor is
elected and qualified.
There are no arrangements or understandings between or
among any of said directors or officers and any other person
pursuant to which any director or officer was selected as
such.
The business experience during the past five years of the
directors and such officers of the Company includes the
following:
Judd D. Malkin (age 58) is Chairman of the Board of JMB,
an officer and/or director of various JMB affiliates and an
individual general partner of several publicly offered real
estate limited partnerships affiliated with JMB. Mr. Malkin
has been associated with JMB since October 1969. Mr. Malkin is
a director of Urban Shopping Centers, Inc., an affiliate of
JMB that is a real estate investment trust in the business of
owning, managing and developing shopping centers. He is a
Certified Public Accountant.
Neil G. Bluhm (age 58) is President and director of JMB,
an officer and/or director of various JMB affiliates and an
individual general partner of several publicly offered real
estate limited partnerships affiliated with JMB. Mr. Bluhm
has been associated with JMB since August 1970. Mr. Bluhm is a
director of Urban Shopping Centers, Inc., an affiliate of JMB
that is a real estate investment trust in the business of
owning, managing and developing shopping centers. He is a
member of the Bar of the State of Illinois and a Certified
Public Accountant.
Edward G. Karl (age 40) is President and Chief Executive
Officer since January 1994. He was previously an officer of
JMB and various partnerships related to JMB. Prior to joining
JMB in 1984, Mr. Karl was a Manager at Peat, Marwick, Mitchell
& Co. He is a Certified Public Accountant.
Gary R. Grottke (age 40) is Executive Vice President and
Chief Operating Officer since January 1994. He was an officer
of JMB from May 1989 to December 1993. Prior to joining JMB
in 1989, Mr. Grottke was a Senior Manager at Peat, Marwick,
Mitchell & Co. He holds a Masters degree in Business
Administration from the Krannert School of Management at
Purdue University and is a Certified Public Accountant.
Peggy H. Sugimoto (age 45) is Senior Vice President and
Chief Financial Officer since 1994. Ms. Sugimoto has been
associated with the Company since 1976. She is a Certified
Public Accountant.
Chris Kanazawa (age 43) is Senior Vice President and
Director of the Company since January 1, 1994 and has served
as such since January 1990. Prior to assuming this position,
Mr. Kanazawa was Vice President of Amfac Property Development
Corporation (1986 to 1990). He has been associated with the
Registrant since September 1981. Mr. Kanazawa holds a
Bachelors degree in Economics from the University of Hawaii
and a Masters degree in Business Administration from the
University of Southern California.
Bert L. Hatton (age 44) is Vice President of Amfac/JMB
Hawaii - Properties Division since January 1993. Mr. Hatton
has also served in the past as the Company's Senior Vice
President of Sugar Operations. He has been associated with
Amfac/JMB Hawaii since July 1980.
P. Eric Hohmann (age 37) is Vice President of Amfac/JMB
Hawaii, Inc. - Properties Division since 1994. Mr. Hohmann
served for 4 years as a Vice President of Amfac Property
Development Corporation, which is a wholly-owned subsidiary of
the Company. Prior to 1990, Mr. Hohmann was associated with
JMB for 5 years. He holds a Masters degree in Business
Administration from the UCLA Anderson Graduate School of
Business.
Timothy E. Johns (age 39) is Vice President of Amfac/JMB
Hawaii - Properties Division since January 1994. He holds a
J.D. degree from the University of Southern California Law
Center and is a member of the Hawaii State Bar Association.
Teney K. Takahashi (age 57) is Vice President of
Amfac/JMB Hawaii - Properties since rejoining the Company in
April 1995. Prior to rejoining Amfac, Mr. Takahashi served as
President and Director of Princeville Corporation, and
President and Director of Malama Pacific, Inc. Mr. Takahashi
previously worked for Amfac from 1973 - 1988.
Item 11. Executive Compensation
Except for the executive officers listed on the table
below, certain of the listed officers and directors of the
Company in item 10 above are officers and/or directors of JMB
or Northbrook and are compensated by JMB, Northbrook, or an
affiliate thereof (other than the Company and its
subsidiaries). The Company will reimburse Northbrook, JMB and
their affiliates for any expenses incurred while providing
services to the Company as described under the caption
"Description of the COLAS - Limitations on Mergers and Certain
Other Transactions" at pages 42-43 of the Prospectus, a copy
of which description was filed herewith and incorporated
herein by reference. In addition, JMB and its affiliates are
entitled to receive an amount, the Qualified Allowance (as
defined), as described under the caption "Description of the
COLAS - Certain Definitions" at page 51 of the Prospectus, a
copy of which description was filed herewith and is
incorporated herein by reference. See Item 13 below.
SUMMARY COMPENSATION TABLE
Annual Compensation
Other
Annual
Compensa-
Name Principal Salary Bonus tion
(1) Position Year ($) (2) ($) ($)
Edward G. President, Chief Exec. 1995 75,000 N/A N/A
Karl Officer and Director 1994 72,000 N/A N/A
1993 N/A N/A N/A
Gary Executive Vice Pres. 1995 190,000 N/A N/A
Grottke and Chief Operating 1994 187,500 N/A N/A
Officer 1993 N/A N/A N/A
Chris Vice President 1995 250,000 175,000 N/A
Kanazawa & General Manager of 1994 250,000 75,000 N/A
the Company's Oahu 1993 150,000 73,000 N/A
Development Corporation
P. Eric Vice President 1995 142,000 85,000 N/A
Hohmann 1994 135,000 30,000 N/A
1993 N/A N/A N/A
Bert L. Vice President 1995 129,000 10,000 N/A
Hatton of Asset Management 1994 125,000 25,000 N/A
1993 120,000 29,000 N/A
(1) Includes CEO and 4 most highly compensated executives
whose salary and bonus exceed $100,000.
(2) Salaries for Mr. Karl and Mr. Grottke represent the
portions of their total compensation allocated and charged
to the Company.
Item 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND
MANAGEMENT
All of the outstanding shares of the Company are owned by
Northbrook. Approximately 6% of the shares of Northbrook are
owned by JMB and approximately 91% are owned directly or
indirectly by individuals who are shareholders or employees of
JMB or members of their families (or trusts for their
benefit). Randi Malkin Steinberger, Stephen Malkin and Barry
Malkin, individually or through trusts which they control,
each have beneficial ownership of approximately 9.8% of the
shares of Northbrook. Leslie Bluhm, Andrew Bluhm and Meredith
Bluhm, individually or through trusts which they control, each
have beneficial ownership of approximately 10.1% of the shares
of Northbrook. Kathleen Schreiber, in her capacity as trustee
of various trusts for the benefit of members of her family,
which trusts comprise the managing partners of a partnership
which owns Northbrook shares, has beneficial ownership of
approximately 6.1% of the shares of Northbrook. Stuart
Nathan, Executive Vice President and a director and
shareholder of JMB, and his children, Scott Nathan and Robert
Nathan, collectively have beneficial ownership of slightly
more than 5% of the shares of Northbrook; each of them,
primarily by virtue of their status as general partners of
partnerships which own such shares would also be considered to
individually have beneficial ownership of substantially all of
such shares.
Item 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
Other than as set forth in Notes to Consolidated
Financial Statements and Notes to Balance Sheets contained
under Item 8 above, Items 10 and 11 above, and this Item 13,
there were no other significant transactions or business
relationships with Northbrook, JMB, affiliates or their
management.
The Company, its subsidiaries and the joint ventures in
which the Company or its subsidiaries are partners are
permitted to engage in various transactions involving
Northbrook, JMB and their affiliates, as described under the
captions "Description of the COLAS - Limitation on Dividends,
Purchases of Capital Stock and Indebtedness" and "Limitations
on Mergers and Certain Other Transactions" and "Purchase or
Joint Venture of Properties by Affiliates; Development of
Properties as Excluded Assets; Residual Value of Company in
Certain Projects" at pages 41-45, and "Risk Factors -
Conflicts of Interest" at page 19 of the Prospectus, a copy of
which descriptions are hereby incorporated herein by reference
to Exhibit 28.1 to the Company's Report on Form 10-K for
December 31, 1988 (File No. 33-24180) dated March 27, 1989.
The relationship of the Company (and its directors and
executive officers and certain other officers) to its
affiliates is set forth above in Item 10.
The Company incurred interest expense of approximately
$5.4 million, $1.3 million and $1.6 million for the years
ended 1995, 1994 and 1993, respectively, in connection with
the acquisition and additional financing obtained from an
affiliate, of which $4.9 million was unpaid as of December 31,
1995.
JMB or its affiliates are entitled to, with respect to
any calendar year, a Qualified Allowance in an amount equal
to: (i) approximately $6.2 million during each of the
calendar years 1989 through 1993; and (ii) thereafter, 1-1/2%
per annum of the Fair Market Value (as defined) of the gross
assets of the Company and its subsidiaries (other than cash
and cash equivalents and Excluded Assets (as defined)).
However, such amount shall be paid for each year only
following the payment of a specified level of Base Interest to
the holders of the COLAS. Any portion of the Qualified
Allowance not paid for any year shall accumulate without
interest. A Qualified Allowance for 1989 of approximately
$6.2 million was paid on February 28, 1990. Any Qualified
Allowance for 1990 through 1995 has been deferred and is
payable only to the extent future Net Cash Flows (as defined)
are sufficient to pay the holders of the COLAS a specified
level of return, and accordingly, no such amounts have been
reflected in the accompanying consolidated financial
statements.
The Company, its subsidiaries and their joint ventures,
reimburse Northbrook, JMB and their affiliates for direct
expenses incurred on their behalf, including salaries and
salary related expenses incurred in connection with the
management of the Company's or its subsidiaries and the joint
ventures' operations. The total of such costs through
December 31, 1995, 1994 and 1993 was $.6 million, $.5 million,
$3.2 million, respectively, of which $.6 million was unpaid as
of December 31, 1995. In addition, as of December 31, 1995,
the current portion of amounts due
affiliates includes approximately $9.1 million of income tax
payable related to the Class A Redemption Offer. Also, the
Company pays a non-accountable reimbursement of approximately
$.03 million per month to JMB or its affiliates in respect of
general overhead expense, all of which was paid as of December
31, 1995.
JMB Insurance Agency, Inc. 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 available to the Company in similar dealings with
unaffiliated third parties. The total of such commissions in
1995 was approximately $.7 million, all of which was paid as
of December 31, 1995.
Northbrook and its affiliates allocate certain charges
for services to the Company based upon the estimated level of
services, of which $8.3 million was unpaid as of December 31,
1995. These services and costs are intended to reflect the
Company's separate costs of doing business and are principally
related to the inclusion of the Company's employees in the
Northbrook pension plan, payment of severance and termination
benefits and reimbursement for insurance claims paid on behalf
of the Company. All amounts described above, deferred or
currently payable, do not bear interest and are expected to be
paid in future periods.
PART IV
Item 14. Exhibits, Financial Statement Schedules, and Reports on
Form 8-K
(a) The following documents are filed as
part of this report:
(1) Financial Statements (See Index to Financial Statements and
and Supplementary Data filed with this report.)
(2) Exhibits
3.1* Articles of Incorporation of Amfac/JMB Hawaii, Inc.
3.2* Amended and Restated
By-Laws of Amfac/JMB Hawaii, Inc.
3.3* Articles of Incorporation of Amfac/JMB Finance,Inc.
3.4* Amended and Restated By-Laws of
Amfac/JMB Finance, Inc.
3.7* Articles of Incorporation of Amfac
Property Development Corp.
3.8* Amended and Restated By-Laws of Amfac
Property Developments Corp.
3.9* Articles of Incorporation of Amfac Property
Investment Corp.
3.10* Amended and Restated By-Laws of Amfac Property
Investment Corp.
3.11* Articles of Incorporation of Amfac Sugar and
Agribusiness, Inc.
3.12* Amended and Restated By-Laws of Kaanapali Water
Corporation
3.13* Articles of Incorporation of Kaanapali Water
Corporation.
3.14* Amended and Restated By-Laws of Amfac
Agribusiness, Inc.
3.15* Articles of Incorporation of Amfac Agribusiness,
Inc.
3.16* Amended and Restated By-Laws of Kekaha
Sugar Company, Limited.
3.17* Articles of Association of Kekaha Sugar
Company, Limited.
3.18* Amended and Restated By-Laws of The Lihue
Plantation Company, Limited.
3.19* Articles of Association of The Lihue Plantation
Company, Limited
3.20* Amended and Restated By-Laws of Oahu Sugar
Company, Limited.
3.21* Articles of Association of Oahu Sugar Company,
Limited.
3.22 Amended and Restated By-Laws of Pioneer
Mill Company, Limited
3.23* Articles of Association of Pioneer Mill Company,
Limited.
3.24 Amended and Restated By-Laws of Puna Sugar
Company, Limited.
3.25* Articles of Association of Puna Sugar
Company, Limited.
3.26 Amended and Restated By-Laws of H.Hackfeld
& Co., Ltd.
3.27* Articles of Association of H.Hackfeld & Co.,
Ltd.
3.28 Amended and Restated By-Laws of Waiahole
Irrigation Company, Limited.
3.29* Articles of Incorporation of Waiahole
Irrigation Company, Limited.
4.1** Indenture, including the form of COLAS,
among Amfac/JMB Hawaii, Inc., its
subsidiaries as Guarantors and Continental
Bank National Association, as Trustee (dated
as of March 14, 1989).
4.2*** Amendment dated as of January 17, 1990 to the
Indenture relating to the COLAS.
4.3*** $28,097,832 Promissory Note from Amfac,
Inc. to Amfac/JMB Hawaii, Inc. Extended
and Reissued Effective December 31, 1993.
4.4**** The five year $66,000,000 loan with the
Employees' Retirement System of the State
of Hawaii to Amfac/JMB Hawaii, Inc. as
of June 25, 1991.
4.5***** $15,000,000 Credit Agreement dated March
31, 1993 among AMFAC/JMB Hawaii, Inc.
and Continental Bank N.A.
4.6****** $10,000,000 loan agreement between Waikele
Golf Club, Inc. and ORIX USA Corporation.
$10,000,000 loan agreement between Waikele
Golf Club, Inc. and Bank of Hawaii.
4.7 $52,000,000 Promissory Note to Northbrook
Corporation from Amfac/JMB Hawaii,
Inc., effective May 31, 1995 is
filed herewith.
10.1* Escrow Deposit Agreement.
10.2* General Lease S-4222, dated January 1,1969,
by and between the State of Hawaii and
Kekaha Sugar Company, Limited.
10.3* Grove Farm Haiku Lease, dated January 25,
1974 by and between Grove Farm Company,
Incorporated and The Lihue
Plantation Company, Limited.
10.4* General Lease S- 4412, dated October 31,
1974, by and between the State of Hawaii
and the Lihue Plantation Company, Limited.
10.5* General Lease S- 4576, dated March 15, 1978,
by and between the State of Hawaii and
The Lihue Plantation Company, Limited.
10.6* General Lease S-3827, dated July 8, 1964, by
and between the State of Hawaii and East
Kauai Water Company, Ltd.
10.7* Amended and Restated Power Purchase Agreement,
dated as of June 15,1992, by and
between The Lihue Plantation Company, Limited
and Citizens Utilities Company.
10.8* 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.
10.9* 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.
10.10* 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.
10.11* 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.
10.12* 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.
10.13* Honokohau Water License, dated December 22,
1980, between Maui Pineapple Company Ltd.
and Pioneer Mill Company, Limited.
10.14* Water Licensing Agreement, dated September
22, 1980, by and between Maui Land & Pineapple
Company, Inc. and Amfac, Inc.
10.15* Joint Venture Agreement, dated as of March 19,
1986, by and between Amfac Property
Development Corp. and Tobishima
Properties of Hawaii, Inc.
10.16* Development Agreement,dated March 19, 1986, by
and between Kaanapali North Beach Joint Venture
and Amfac Property Investment Corp. and Tobishima
Pacific, Inc.
10.19** Keep-Well Agreement between Northbrook Corporation
and Amfac/JMB Finance, Inc.
10.20** Repurchase Agreement, dated March 14, 1989, by
and between Amfac/JMB Hawaii, Inc.
and Amfac/JMB Finance, Inc.
10.21** Amfac Hawaii Tax Agreement, dated November 21,1988
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, Limited; Oahu Sugar
Company, Limited; Pioneer Mill Company, Limited;
Puna Sugar Company, Limited; H. Hackfeld & Co.,
Ltd.; and Waiahole Irrigation Company, Limited.
10.22** Amfac-Amfac Hawaii Tax Agreement, dated
February 27, 1989 between Amfac, Inc. and
Amfac/JMB Hawaii, Inc.
10.23** Services 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, Limited; 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.
19.0*******$35,700,000 agreement for sale of C&H and certain
other C&H assets, to A&B Hawaii, Inc. in
June of 1993.
22.1* Subsidiaries of Amfac/JMB Hawaii, Inc.
28.1** A copy of pages 19,41-45 and 51 of the Prospectus of
the Company dated December 5, 1988 (relating to SEC
Registration Statement on Form S-1 (as amended)
File No. 33-24180) and hereby incorporated by
reference.
Pursuant to Item 6.01 (b)(4) of Regulation SK,
the registrant hereby undertakes to provide the
Commission upon its request a copy of any agreement
with respect to long-term indebtedness of
the registrant and its consolidated
subsidiaries that does not exceed 10
percent of the total assets of the
registrant and its subsidiaries on a
consolidated basis.
* Previously filed as exhibits to the Company's
Registration Statement of Form S-1 (as amended) under the
Securities Act of 1933 (File No. 33-24180) and hereby
incorporated by reference.
** Previously filed as exhibits to the Company's Form 10-
K report under the Securities Act of 1934 (File No. 33-24180)
filed on March 27, 1989 and hereby incorporated by reference.
*** Previously filed as exhibits to the Company's Form 10-
K report under the Securities Act of 1934 (File No. 33-24180)
filed on March 27, 1991 and hereby incorporated by reference.
**** Previously filed as exhibits to the Company's Form 10-
Q report under the Securities Act of 1934 (File No. 33-24180)
filed on August 13, 1991 and hereby incorporated by reference.
***** Previously filed as exhibit to the Company's Form 10-
Q report under the Securities Act of 1934 (File No. 33-24180)
filed on May 14, 1993 and hereby incorporated by reference.
****** Previously filed as exhibit to the Company's Form 10-
Q report under the Securities Act of 1934 (File No. 33-24180)
filed on November 11, 1993 and hereby incorporated by
reference.
******* Previously filed as exhibits to the Company's Form 10-
K report under the Securities Act of 1934 (File No. 33-24180)
filed on March 27, 1994 and hereby incorporated by reference.
(b)No Reports on Form 8-K were required or filed
since the beginning of the last quarter of the
period covered by this report.
No annual report or proxy material for 1995 was sent to the
COLA holders of the Company. An annual report will be sent to
the COLA holders subsequent to this filing.
SIGNATURES
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.
AMFAC/JMB HAWAII, INC.
By: Gary Smith
Vice President
Date: February 26, 1996
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: Edward G. Karl
President, Chief Executive Officer
and Director
Date: February 26, 1996
By: Peggy Sugimoto
Senior Vice President and
Chief Financial Officer
Date: February 26, 1996
By: Gary Grottke
Executive Vice President,
Chief Operating Officer
and Director
Date: February 26, 1996
By: Gary Smith
Vice President and
Principal Accounting Officer
Date: February 26, 1996
SIGNATURES
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.
AMFAC/JMB FINANCE, INC.
By: Gary Smith
Vice President
Date: February 26, 1996
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: Edward G. Karl
President and
Principal Executive Officer
Date: February 26, 1996
By: Steven E. Plonsker
Senior Vice President
Date: February 26, 1996
By: Gary Nickele
Director
Date: February 26, 1996
By: Gary Smith
Vice President Finance and
Principal Accounting Officer
Date: February 26, 1996
SIGNATURES
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.
AMFAC PROPERTY DEVELOPMENT CORP.
By: Gary Smith
Vice President
Date: February 26, 1996
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: Chris J. Kanazawa
President and
Director
Date: February 26, 1996
By: Gary Grottke
Vice President and Director
Date: February 26, 1996
By: Gary Smith
Vice President and
Principal Accounting Officer
Date: February 26, 1996
SIGNATURES
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.
AMFAC PROPERTY INVESTMENT CORP.
By: Gary Smith
Vice President
Date: February 26, 1996
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: Chris J. Kanazawa
President and
Director
Date: February 26, 1996
By: Gary Grottke
Vice President and Director
Date: February 26, 1996
By: Gary Smith
Vice President and
Principal Accounting Officer
Date: February 26, 1996
SIGNATURES
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.
WAIKEKE GOLF CLUB, INC.
By: Gary Smith
Vice President
Date: February 26, 1996
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: Chris J. Kanazawa
President and
Director
Date: February 26, 1996
By: Gary Grottke
Vice President and Director
Date: February 26, 1996
By: Gary Smith
Vice President and
Principal Accounting Officer
Date: February 26, 1996
SIGNATURES
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.
AMFAC SUGAR AND AGRIBUSINESS,INC.
By: Gary Smith
Vice President
Date: February 26, 1996
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: Robert B. Heiserman, Jr.
President
Date: February 26, 1996
By: Gary Grottke
Vice President and Director
Date: February 26, 1996
By: Gary Nickele
Director
Date: February 26, 1996
By: Gary Smith
Vice President and
Principal Accounting Officer
Date: February 26, 1996
SIGNATURES
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 WATER CORPORATION
By: Gary Smith
Vice President
Date: February 26, 1996
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: Chris J. Kanazawa
President and
Director
Date: February 26, 1996
By: Gary Grottke
Vice President and Director
Date: February 26, 1996
By: Gary Smith
Vice President and
Principal Accounting Officer
Date: February 26, 1996
SIGNATURES
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.
AMFAC AGRIBUSINESS, INC.
By: Gary Smith
Vice President
Date: February 26, 1996
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: Robert B. Heiserman, Jr.
President
Date: February 26, 1996
By: Gary Grottke
Vice President and Director
Date: February 26, 1996
By: Gary Nickele
Director
Date: February 26, 1996
By: Gary Smith
Vice President and
Principal Accounting Officer
Date: February 26, 1996
SIGNATURES
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.
KEKAHA SUGAR COMPANY, LIMITED
By: Gary Smith
Vice President
Date: February 26, 1996
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: Robert B. Heiserman, Jr.
President
Date: February 26, 1996
By: Gary Grottke
Vice President and Director
Date: February 26, 1996
By: Gary Nickele
Director
Date: February 26, 1996
By: Gary Smith
Vice President and
Principal Accounting Officer
Date: February 26, 1996
SIGNATURES
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.
THE LIHUE PLANTATION COMPANY, LIMITED
By: Gary Smith
Vice President
Date: February 26, 1996
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: Robert B. Heiserman, Jr.
President
Date: February 26, 1996
By: Gary Grottke
Vice President and Director
Date: February 26, 1996
By: Gary Nickele
Director
Date: February 26, 1996
By: Gary Smith
Vice President and
Principal Accounting Officer
Date: February 26, 1996
SIGNATURES
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.
OAHU SUGAR COMPANY, LIMITED
By: Gary Smith
Vice President
Date: February 26, 1996
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: Robert B. Heiserman, Jr.
President
Date: February 26, 1996
By: Gary Grottke
Vice President and Director
Date: February 26, 1996
By: Gary Nickele
Director
Date: February 26, 1996
By: Gary Smith
Vice President and
Principal Accounting Officer
Date: February 26, 1996
SIGNATURES
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.
PIONEER MILL COMPANY, LIMITED
By: Gary Smith
Vice President
Date: February 26, 1996
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: Robert B. Heiserman, Jr.
President
Date: February 26, 1996
By: Gary Grottke
Vice President and Director
Date: February 26, 1996
By: Gary Nickele
Director
Date: February 26, 1996
By: Gary Smith
Vice President and
Principal Accounting Officer
Date: February 26, 1996
SIGNATURES
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.
PUNA SUGAR COMPANY, LIMITED
By: Gary Smith
Vice President
Date: February 26, 1996
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: Robert B. Heiserman, Jr.
President
Date: February 26, 1996
By: Gary Grottke
Vice President and Director
Date: February 26, 1996
By: Gary Nickele
Director
Date: February 26, 1996
By: Gary Smith
Vice President and
Principal Accounting Officer
Date: February 26, 1996
SIGNATURES
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.
H. HACKFELD & CO., LTD.
By: Gary Smith
Vice President
Date: February 26, 1996
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: Robert B. Heiserman, Jr.
President
Date: February 26, 1996
By: Gary Grottke
Vice President and Director
Date: February 26, 1996
By: Gary Nickele
Director
Date: February 26, 1996
By: Gary Smith
Vice President and
Principal Accounting Officer
Date: February 26, 1996
SIGNATURES
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.
WAIAHOLE IRRIGATION COMPANY ,LIMITED
By: Gary Smith
Vice President
Date: February 26, 1996
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: Robert B. Heiserman, Jr.
President
Date: February 26, 1996
By: Gary Grottke
Vice President and Director
Date: February 26, 1996
By: Gary Nickele
Director
Date: February 26, 1996
By: Gary Smith
Vice President and
Principal Accounting Officer
Date: February 26, 1996
EXHIBIT INDEX
Document Sequentially
incorporated numbered
Exhibit No. Exhibit by reference page
3.1 to 3.30* Articles of Incorporation
and Amended and Restated By-Laws Yes --
4.1** Indenture, including the
forms of COLAS, among
Amfac/JMB Hawaii, Inc., its
subsidiaries and Continental
Illinois Bank National
Association, as Trustees
(dated March 14, 1989) Yes --
4.2*** Amendment dated as of
January 17, 1990 to the
Indenture relating to the
COLAS. Yes --
4.3*** $28,097,832 Promissory Note
from Amfac, Inc. to
Amfac/JMB Hawaii, Inc.
Extended and Reissued
Effective December 31,
1990. Yes --
4.4**** The five year $66,000,000 loan
with the Employees' Retirement
System of the State of Hawaii to
Amfac/JMB Hawaii, Inc. as of
June 25, 1991. Yes --
4.5***** $15,000,000 Credit Agreement dated March 31,
1993 among AMFAC/JMB Hawaii, Inc. and
Continental Bank N.A. Yes --
4.6****** $10,000,000 loan agreement between Waikele Golf
Club, Inc. and ORIX USA Corporation.
$10,000,000 loan agreement between Waikele Golf
Club, Inc. and Bank of Hawaii. Yes --
10.1 to 10.22* Material Contracts Yes --
10.3* Grove Farm Haiku Lease, dated
January 25, 1974 by and between
Grove Farm Company, Incorporated
and The Lihue Plantation Company
Limited. Yes --
10.4* General Lease S-4412, dated
October 31, 1974 by and between
the State of Hawaii and the
Lihue Plantation Company
Limited. Yes --
10.5* General Lease S-4576, dated
March 15, 1978, by and between
the State of Hawaii and The
Lihue Plantation Company,
Limited. Yes --
10.6* General Lease S-3827, dated
July 8, 1964 by and between
the State of Hawaii and East
Kauai Water Company, Ltd. Yes --
10.8* 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. Yes --
10.9* 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. Yes --
10.10* 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. Yes --
10.11* 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. Yes --
10.12* 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. Yes --
10.13* Honokohau Water License, dated
December 22, 1980, between Maui
Pineapple Company Ltd. and
Pioneer Mill Company, Limited. Yes --
10.14* Water Licensing Agreement, dated
September 22, 1980, by and between
Maui Land & Pineapple Company,
Inc. and Amfac, Inc. Yes --
10.15* Joint Venture Agreement, dated as
of March 19, 1986, by and between
Amfac Property Development Corp.
and Tobishima Properties of
Hawaii, Inc. Yes --
10.16* Development Agreement, dated
March 19, 1986, by and between
Kaanapali North Beach Joint
Venture and Amfac Property
Investment Corp. and Tobishima
Pacific, Inc. Yes --
10.19** Keep-Well Agreement between
Northbrook Corporation and
Amfac/JMB Finance, Inc.,
dated March 14, 1989. Yes --
10.20** Repurchase Agreement, dated
March 14, 1989, by and between
Amfac/JMB Hawaii, Inc. and
Amfac/JMB Finance, Inc. Yes --
10.21** Amfac Hawaii Tax Agreement,
dated November 21, 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.; Kehaha
Sugar Company, Limited; The Lihue
Plantation Company, Limited; Oahu
Sugar Company, Limited; Pioneer
Mill Company, Limited; Puna
Sugar Company, Limited; H.
Hackfeld & Co., Ltd.; and
Waiahole Irrigation Company,
Limited. Yes --
10.22** Amfac-Amfac Hawaii Tax Agreement,
dated February 27, 1989 between
Amfac, Inc. and Amfac/JMB Hawaii,
Inc. Yes --
10.23** Services Agreement, dated November
18, 1988, between Amfac/JMB Hawaii,
Inc., and Amfac Property Develop-
ment Corp.; Amfac Property Invest-
ment Corp.; Amfac Sugar and Agri-
business, Inc.; Kaanapali Water
Corporation; Amfac Agribusiness,
Inc.; Kehaha Sugar Company,
Limited; The Lihue Plantation
Company, Limited; Oahu Sugar
Company, Limited; Pioneer Mill
Company, Limited; Puna Sugar
Company, Limited; H. Hackfeld &
Co., Ltd.; Waiahole Irriga-
tion Company, Limited and JMB
Realty Corporation Yes --
19.0******* $35,700,000 agreement for sale of
C&H and certain other C&H assets,
to A&B Hawaii, Inc. in June of 1993 Yes --
22.1 Subsidiaries of
Amfac/JMB Hawaii Inc. Yes --
28.1** A copy of pages 19, 41-45 and
51 of the Company's Prospectus
dated December 5, 1988
filed pursuant to Rules
424(b) and 424(c) (relating
to SEC Registration Statement
on Form S-1 (as amended)
File No. 33-24180) Yes --
* Previously filed as exhibits to the Company's
Registration Statement on Form S-1 (as amended) under the
Securities Act of 1933 (File No. 33-24180) and hereby
incorporated by reference.
** Previously filed as exhibits to the Company's
Form 10-K report under the Securities Act of 1934 (File No. 33-
24180) filed on March 27, 1989 and hereby incorporated by
reference.
*** Previously filed as exhibits to the Company's
Form 10-K report under the Securities act of 1934 (File No. 33-
24180) filed on March 27, 1991 and hereby incorporated by
reference.
**** Previously filed as exhibits to the Company's
Form 10-Q report under the Securities Act of 1934 (File No. 33-
24180) filed on August 13, 1991 and hereby incorporated by
reference.
***** Previously filed as exhibit to the Company's Form
10-Q report under the Securities Act of 1934 (File No. 33-24180)
filed on May 14, 1993 and hereby incorporated by reference.
****** Previously filed as exhibit to the Company's Form
10-Q report under the Securities Act of 1934 (File No. 33-24180)
filed on November 11, 1993 and hereby incorporated by reference.
******* Previously filed as exhibit to the Company's Form
10-K report under the Securities Act of 1934 (File No. 33-24180)
filed on March 27, 1994 and hereby incorporated by reference.
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
REGISTRANTS FORM 10-K FOR THE YEAR ENDED DECEMBER 31, 1995 AND IS
QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS
INCLUDED IN SUCH REPORT.
</LEGEND>
<CIK> 0000839437
<NAME> AMFAC/JMB HAWAII, INC.
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-END> DEC-31-1995
<CASH> $ 11,745
<SECURITIES> 0
<RECEIVABLES> 9,081
<ALLOWANCES> 361
<INVENTORY> 49,641
<CURRENT-ASSETS> 73,208
<PP&E> 394,379
<DEPRECIATION> 27,762
<TOTAL-ASSETS> 527,598
<CURRENT-LIABILITIES> 123,324
<BONDS> 247,457
<COMMON> 1
0
1
<OTHER-SE> (114,188)
<TOTAL-LIABILITY-AND-EQUITY> 527,598
<SALES> 100,319
<TOTAL-REVENUES> 101,607
<CGS> 84,283
<TOTAL-COSTS> 102,672
<OTHER-EXPENSES> 1,288
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 25,233
<INCOME-PRETAX> (27,855)
<INCOME-TAX> (8,019)
<INCOME-CONTINUING> (19,836)
<DISCONTINUED> 0
<EXTRAORDINARY> (32,544)
<CHANGES> 0
<NET-INCOME> 12,708
<EPS-PRIMARY> 12.71
<EPS-DILUTED> 12.71
</TABLE>
