November 27, 1996
Securities and Exchange Commission
450 Fifth Street, N.W.
Judiciary Plaza
Washington, D.C. 20549
Re: Amfac/JMB Hawaii, Inc.
Commission File No. 33-24180
Form 10-Q\A
Gentlemen:
Transmitted for the above-captioned registrant, is the
electronically filed executed copy of registrant's current
report on Form 10-Q\A for the quarter ended September 30,
1996.
Thank You.
Very truly yours,
Amfac/JMB Hawaii, Inc.
By: Northbrook Corporation
Parent Company
By: _____________________
Gary Smith
Vice President
and Principal Accounting Officer
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q/A
AMENDMENT NO. 1
Filed pursuant to Section 12, 13 or 15(d) of the
Securities Exchange Act of 1934
AMFAC/JMB HAWAII, INC.
(Exact name of registrant as specified in its charter)
Commission File No. 33-24180 IRS Employer Identification
No. 99-0217738
The undersigned registrant hereby amends the following
sections of its Report for the quarter ended September 30,
1996 on Form 10-Q as set forth in the pages attached hereto:
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations. Page 27
AMFAC/JMB HAWAII, INC.
By: Northbrook Corporation
Parent Company
By: GARY SMITH
Gary Smith, Vice President
and Principal Accounting Officer
Dated: November 27, 1996
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
LIQUIDITY AND CAPITAL RESOURCES
During 1995, the Company restructured its sugar
operations to improve efficiencies and reduce costs,
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 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 supports legislation. On April 4, 1996,
President Clinton signed the Federal Agriculture Improvement
and Reform Act of 1996 ("the Act"). The Act, which expires
in 2002, keeps the loan rate at 18 cents per pound. However,
the Act 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. There can be no
assurance that, in the future, the government price support
will not be reduced or eliminated entirely. Such a
reduction or an elimination of price supports could have a
material adverse affect on the Company's agriculture
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. 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 pursuing development of 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.
The sugar industry in Hawaii has experienced
significant difficulties during the past several years.
Growers in Hawaii have struggled with the high costs of
production, which have led to the closure of several
plantations, including the Company's sugar operations on
Oahu in 1995. The Company has tried to address these
challenges through a number of different measures, including
a restructuring in 1995, whereby its two Kauai plantations
were consolidated and all of the sugar operations were
changed to a seasonal mode.
While the above-noted changes have helped to reduce
expenses, the Company must continue to explore alternatives
to further address the high costs of sugar production. One
such alternative relates to the three-year labor contract
the Company has with its sugar plantation employees, which
expires in February 1998. Within the contract is a
provision that allows the Company and the union to
renegotiate wages in February 1997. In light of the
difficulties the Company has had in trying to improve the
operating results of its sugar business, management has been
meeting with union representatives to discuss appropriate
wage levels. Although the Company is hopeful that it will
reach agreement on contract modifications that would help to
improve the viability of its sugar plantations, there are no
assurances that sufficient changes will be agreed upon.
