Securities and Exchange Commission
450 Fifth Street, N.W.
Judiciary Plaza
Washington, D.C. 20549
Re: AMFAC/JMB FINANCE, INC.
Commission File No. 36-3611183
Form 10-Q
Gentlemen:
Enclosed, for the above-mentioned registrant, are eight copies
one of which is manually executed of registrant's current
report on Form 10-Q for the quarter ended June 30, 1996.
Please acknowledge receipt of the Form 10-Q filing, by signing
and
returning the self-addressed stamped postcard.
Thank You.
Very truly yours,
AMFAC/JMB FINANCE, INC.
By: Northbrook Corporation
Parent Company
By: _____________________
Gary Smith
Vice President
and Principal Accounting Officer
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
Gentlemen:
Enclosed, for the above-mentioned registrant, are eight copies
one of which is manually executed of registrant's current
report on Form 10-Q for the quarter ended June 30, 1996.
Please acknowledge receipt of the Form 10-Q filing, by signing
and returning the self-addressed stamped postcard.
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
Quarterly Report Pursuant to Section 13 or 15(d)
of the Securities Act of 1934
For the quarter ended June 30, 1996 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.
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
As of August 13, 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.
ADDITIONAL REGISTRANTS (1)
Address, including,
zip code,
Exact name of State or other IRS and 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
PART I FINANCIAL INFORMATION
Item 1. Financial Statements 4
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations 23
PART II OTHER INFORMATION
Item 1. Legal Proceedings 32
Item 6. Exhibits and Reports on Form 8-K 33
PART I. FINANCIAL INFORMATION
ITEM 1. Financial Statements
AMFAC/JMB HAWAII, INC.
Consolidated Balance Sheets
June 30, 1996 and December 31, 1995
(Dollars in Thousands)
(Unaudited)
A S S E T S
June 30, December 31,
1996 1995
-------------- --------------
A S S E T S
Current assets:
Cash and cash equivalents $9,641 11,745
Receivables-net 14,122 8,720
Inventories 47,614 49,641
Prepaid expenses 2,571 3,102
-------- --------
Total current assets 73,948 73,208
-------- --------
Investments 45,168 45,080
-------- --------
Property, plant and equipment:
Land and land improvements 333,919 336,069
Machinery and equipment 57,230 56,882
Construction in progress 2,245 1,428
-------- --------
393,394 394,379
Less accumulated dep.
and amortization 30,912 27,762
-------- --------
362,482 366,617
-------- --------
Deferred expenses 13,443 14,225
Other assets 29,964 28,468
-------- --------
$ 525,005 527,598
========== ==========
L I A B I L I T I E S
Current liabilities:
Accounts payable $ 6,970 8,562
Accrued expenses 9,638 13,268
Current portion of
long-term debt 1,730 67,730
Current portion of
deferred inc. taxes 14,348 10,902
AMFAC/JMB HAWAII, INC.
Consolidated Balance Sheets - Continued
June 30, 1996 and December 31, 1995
(Dollars in Thousands)
(Unaudited)
June 30, December 31,
1996 1995
------------- -------------
Amounts due to affiliates 27,595 22,862
-------- --------
Total current liabilities 60,281 123,324
-------- --------
Amounts due to affiliates 90,110 76,911
Accum. postretirement benefit
obligation 59,207 61,037
Long-term debt 91,772 26,765
Other long-term liabilities 36,335 34,366
Deferred income taxes 97,962 98,691
Certificate of Land
Appreciation Notes 220,692 220,692
-------- --------
Commitments and contingencies
(notes 3, 4, 5, 7, 8, 9 and 10)
Total liabilities 656,359 641,786
-------- --------
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 3,385 11,495
Retained earnings (deficit) (134,740) (125,684)
--------- ---------
Total stockholders' equity
(deficit) (131,354) (114,188)
--------- ---------
$ 525,005 527,598
============ ===========
<FN>
The accompanying notes are an integral part of the consolidated financial
statements.
AMFAC/JMB HAWAII, INC.
Consolidated Statements of Operations
Six Months Ended June 30, 1996 and 1995
(Dollars in Thousands)
(Unaudited)
Three Months Ended Six Months Ended
June 30 June 30
-------------------- ---------------------
1996 1995 1996 1995
(Restated) (Restated)
------- ------- ------ ------
Revenue:
Agriculture $16,744 18,427 22,432 19,726
Property 12,215 16,611 21,583 29,457
------- ------- ------- -------
28,959 35,038 44,015 49,183
------- ------- ------- -------
Cost of sales:
Agriculture 17,532 19,830 21,645 20,399
Property 8,385 8,708 13,724 16,765
------- ------- -------- -------
25,917 28,538 35,369 37,164
Selling, general
and administrative 2,793 3,109 5,942 7,184
Depreciation and
amortization 1,554 1,606 3,150 3,320
------- ------- ------- -------
Total costs and expenses 30,264 33,253 44,461 47,668
Operating income (loss) (1,305) 1,785 (446) 1,515
------- ------- ------- -------
Non-operating income
(expenses):
Amortization of
financing costs (451) (444) (767) (955)
Interest expense (6,490) (5,565) (13,398) (11,571)
Interest income 70 932 162 1,283
------- ------- ------- -------
(6,871) (5,077) (14,003) (11,243)
------- ------- ------- -------
Loss before taxes (8,176) (3,292) (14,449) (9,728)
------- ------- -------- ------
Income tax benefit 3,060 1,207 5,393 3,616
------- ------- ------- -------
Loss before extra-
ordinary item (5,116) (2,085) (9,056) (6,112)
AMFAC/JMB HAWAII, INC.
Consolidated Statements of Operations - Continued
Six Months Ended June 30, 1996 and 1995
(Dollars in Thousands)
(Unaudited)
Three Months Ended Six Months Ended
June 30 June 30
-------------------- ---------------------
1996 1995 1996 1995
(Restated) (Restated)
------- ------- ------ ------
Extraordinary gain
from extinguishment
of debt (less app-
licable income taxes
of $20,807) -- 32,544 -- 32,544
------- -------- ------- -------
Net income (loss) $(5,116) 30,459 (9,056) 26,432
======= ======= ======= =======
<FN>
The accompanying notes are an integral part of the consolidated financial
statements.
AMFAC/JMB HAWAII, INC.
Consolidated Statements of Cash Flows
Six Months Ended June 30, 1996 and 1995
(Dollars in Thousands)
(Unaudited)
1996 1995
(Restated)
-------- --------
Cash flows from operating activities:
Net income (loss) $(9,056) 26,432
Items not requiring (providing) cash:
Depreciation and amortization 3,150 3,320
Amortization of deferred expenses 767 955
Equity in earnings of investments 23 62
Income tax expense (benefit) (5,393) 17,191
Extraordinary gain from extinguish-
ment of debt -- (53,351)
Changes in:
Receivables - net (5,402) 4,006
Inventories 4,437 (2,815)
Prepaid expenses 531 554
Accounts payable (1,592) 2,398
Accrued expenses (3,630) (1,811)
Amounts due to affiliates 4,733 8,579
Other long-term liabilities (2,134) (132)
-------- --------
Net cash provided by (used in)
operating activities (13,566) 5,388
-------- --------
Cash flows from investing activities:
Property additions (1,175) (1,975)
Property disposals and retirements
- net -- 2,673
Investments in joint ventures
and partnerships (111) (167)
Short-term investments -- 31,998
Other assets (1,496) (937)
Other long-term liabilities 2,023 (5,060)
-------- --------
AMFAC/JMB HAWAII, INC.
Consolidated Statement of Cash Flows - Continued
Six Months Ended June 30, 1996 and 1995
(Dollars in Thousands)
(Unaudited)
1996 1995
(Restated)
-------- --------
Net cash provided by (used in)
investing activities (759) 26,532
-------- --------
Cash flows from financing activities:
Deferred expenses 15 1
Other cost related to extinguishment
of debt -- (704)
Net repayments of long-term debt (993) (1,610)
Payment to redeem and purchase
Certificate of Land Appreciation
Notes (COLAS) -- (105,452)
Amounts due to affiliates 13,199 52,000
--------- --------
Net cash provided by (used in) financing
activities 12,221 (55,765)
--------- --------
Net decrease in cash and cash
equivalents (2,104) (23,845)
Cash and cash equivalents,
beginning of year 11,745 31,702
--------- --------
Cash and cash equivalents,
end of period $ 9,641 7,857
========= ========
Supplemental disclosure of cash flow
information:
Cash paid for interest
(net of amounts capitalized) $10,275 11,724
========= ========
AMFAC/JMB HAWAII, INC.
Consolidated Statement of Cash Flows - Continued
Six Months Ended June 30, 1996 and 1995
(Dollars in Thousands)
(Unaudited)
1996 1995
(Restated)
-------- --------
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 $ 2,410 5,110
========= ========
Disposition of Debt:
Gain on extinguishment of debt $ -- 53,351
Face value of debt extinguishment -- (164,045 )
Other costs related to debt
extinguishment -- 894
Write-off of deferred COLA costs -- 10,015
Write-off of Contingent Base
Interest -- (5,667)
--------- ---------
Cash paid to redeem and
purchase COLAS $ -- (105,452)
========= =========
<FN>
The accompanying notes are an integral part of the consolidated financial
statements.
AMFAC/JMB HAWAII, INC.
Notes to Consolidated Financial Statements
June 30, 1996 and 1995
(Dollars in Thousands)
Readers of this quarterly report should refer to the Company's
audited financial statements for the fiscal year ended December
31, 1995, which are included in the Company's 1995 Annual Report,
as certain footnote disclosures which would substantially
duplicate those contained in such audited financial statements
have been omitted from this report.
(1) ADJUSTMENTS
The extraordinary gain from extinguishment of debt as
originally reported in the consolidated statements of operations
for the three and six months ended June 30, 1995 has been
restated to include the effect of the write-off of accrued
contingent base interest of $5,667, less additional expenses of
$190 (net of taxes of $2,135). In the opinion of the Company,
all other adjustments (consisting solely of normal recurring
adjustments) necessary for a fair presentation have been made to
the accompanying figures as of June 30, 1996 and for the three
and six months ended June 30, 1996 and 1995.
(2) 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 (the
"Company") was a wholly-owned subsidiary of Amfac, a subsidiary
of Northbrook Corporation ("Northbrook"). In May 1995, Amfac was
merged into Northbrook, with Northbrook being the surviving
corporation.
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, and the management and operation of the Company's golf
course facilities.
The consolidated financial statements as of December 31,
1995 and for the six months ended June 30, 1996 include the
accounts of the Company and its wholly-owned subsidiaries. All
significant intercompany balances and transactions have been
eliminated in consolidation.
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 $4,100 and $3,700 at June 30, 1996 and December
31, 1995, respectively) as cash equivalents, which approximates
market. These amounts include $1,185 and $1,623 at June 30, 1996
and December 31, 1995, respectively, which were restricted
primarily to fund debt service on certain long-term debt (see
note 5).
AMFAC/JMB HAWAII, INC.
Notes to Consolidated Financial Statements - Continued
(Dollars in Thousands)
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 in certain partnerships and joint ventures, if
any, over which the Company exercises significant influence are
accounted for by the equity method. Revenues include the
Company's equity in net income or loss from such investments. To
the extent the Company engages in such activities as a general
partner, the Company is contingently liable for the obligations
of its partnership and joint venture investments.
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 net realizable
value.
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.
For financial reporting purposes, the Company uses the
effective interest rate method and accrues interest on the
Certificate of Land Appreciation Notes due 2008 ("COLAS") at 4%
per annum, which is the "Mandatory Base Interest" (see note 4).
Interest is capitalized to qualifying assets (principally
real estate under development) during the period that such assets
are undergoing activities necessary to prepare them for their
intended uses. 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 six months
ended June 30, 1996 and 1995.
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 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) (see note 4).
AMFAC/JMB HAWAII, INC.
Notes to Consolidated Financial Statements - Continued
(Dollars in Thousands)
Current and deferred taxes have been allocated to the
Company as if the Company were a separate taxpayer in accordance
with the provisions 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, respectively, to additional paid-in capital in
the accompanying consolidated financial statements.
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.
(3) AMOUNTS DUE TO AFFILIATES - FINANCING
The maturity date of the approximately $15,097 of remaining
acquisition-related financing owed to affiliates has been
extended to June 1, 1998 and bears interest at a rate per annum
based upon the prime interest rate (8.25% at June 30, 1996), plus
one percent.
On June 1, 1995, the Company borrowed $52,000 from
Northbrook to redeem Class A COLAS pursuant to the Redemption
Offer (see note 4). The Company has also borrowed approximately
$13,087 and $9,814 at June 30, 1996 and December 31, 1995,
respectively, to fund COLA Base Interest payments and other
operational needs. The loans from Northbrook are payable
interest only, mature on June 1, 1998 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.
(4) 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).
AMFAC/JMB HAWAII, INC.
Notes to Consolidated Financial Statements - Continued
(Dollars in Thousands)
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. 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 (4%) 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 $.155 and $.155, 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 at the same price as would be required of
Finance under the Repurchase Agreement, 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. Approximately 229,000 Class A COLAS were submitted
for repurchase pursuant to the Redemption Offer and
approximately
AMFAC/JMB HAWAII, INC.
Notes to Consolidated Financial Statements - Continued
(Dollars in Thousands)
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 COLA repurchases in 1995, the Company
retired approximately $164,045 in face value of COLA debt and
recognized a financial statement gain in the second quarter of
1995 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 2).
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.
(5) 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"). The nonrecourse 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 bore 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 year or (ii) ten percent per
annum through June 30, 1993 and nine percent per annum
thereafter. The annual interest payments were in excess of the
cash flow generated by the Kaanapali Golf Courses.
In April 1996, the Company reached an agreement to amend the
loan with the ERS, extending the maturity date for five years.
In exchange for the loan extension, the ERS received the right to
participate in the "Net Disposition Proceeds" (as defined)
related to the sale or the refinancing of the golf courses or at
the maturity of the loan. The ERS share of the Net Disposition
Proceeds increases from 30% through June 30, 1997, to 40% for the
period from July 1, 1997 to June 30, 1999 and to 50% thereafter.
The loan amendment effectively adjusts the interest rate as of
January 1, 1995 to 9.5% until June 30, 1996. After June 30,
1996, the loan bears interest at a rate per annum equal to the
five-year treasury rate on July 1, 1996 (6.48%) plus 2 1/4%. The
loan amendment requires the Company to pay interest at the rate
of 7% for the period from January 1, 1995 to June 30, 1996, 7.5%
from July 1, 1996 to June 30, 1997, 7.75% from July 1, 1997 to
June 30, 1998 and 8.5% thereafter ("Minimum Pay Rates"). The
Company has made payments in April 1996 for $4,119 and in July
1996 for $1,148, representing the minimum interest payment due
through July 1, 1996. The scheduled minimum payments are paid
quarterly on
AMFAC/JMB HAWAII, INC.
Notes to Consolidated Financial Statements - Continued
(Dollars in Thousands)
the principal balance of the $66,000 loan. The difference
between the accrued interest expense and the minimum interest
payment accrues interest and is payable on an annual basis from
excess cash flow, if any, generated from the Kaanapali Golf
Courses. Although the outstanding loan balance remains
nonrecourse, the amendment makes the minimum interest payments
and the ERS's share of appreciation, if any, recourse to the
Company. However, the Company's obligations to make future
minimum interest payments and to pay the ERS a share of
appreciation would be terminated if the Company tendered an
executed deed to the golf course property to the ERS in
accordance with the terms of the amendment.
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 quarterly
installments commencing July 1, 1993 in the principal amount of
$250, and $81 (plus interest), respectively. The $10,000 and
$3,250 loans have outstanding balances of $7,000 and $789,
respectively, as of June 30, 1996 and bear interest at a rate
equal to the prime rate (8.25% at June 30, 1996) plus three and
one half percent and the prime rate plus four and one-half
percent, respectively. Lihue has purchased an interest rate
agreement which effectively caps the prime rate for the first
five 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 which 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 (5.6% at June 30, 1996)
plus 3%, respectively. 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 June 30, 1996 the remaining scheduled annual
principal maturities are $202 in 1996, $405 in 1997, and the
balance of $19,106 in 1998.
AMFAC/JMB HAWAII, INC.
Notes to Consolidated Financial Statements - Continued
(Dollars in Thousands)
(6) SEGMENT INFORMATION
Agriculture and Property comprise separate industry segments
of the Company. "Operating Income-Other" consists primarily of
unallocated overhead expenses and "Total Assets-Other" consists
primarily of cash and deferred expenses. Total assets at the
balance sheet dates, capital expenditures, operating income
(loss) and depreciation and amortization during the six months
ended June 30, 1996 and 1995 are set forth below by each industry
segment:
June 30, December 31,
1996 1995
--------- ---------
Total Assets:
Property $196,892 199,999
Agriculture 306,204 304,170
Other 21,909 23,429
--------- ---------
$525,005 527,598
========= =========
Six Months Six Months
Ended Ended
June 30, June 30,
1996 1995
----------- -----------
Capital Expenditures:
Agriculture $ 711 838
Property 464 1,137
--------- ---------
$1,175 1,975
========= =========
Six Months Six Months
Ended Ended
June 30, June 30,
1996 1995
------------ ------------
Operating income (loss):
Agriculture $(1,556) (3,307)
Property 2,363 7,105
Other (1,253) (2,283)
--------- ---------
$ (446) 1,515
========== =========
Depreciation and amortization:
Agriculture $2,048 2,339
Property 1,051 885
Other 51 96
--------- ---------
$3,150 3,320
========= =========
AMFAC/JMB HAWAII, INC.
Notes to Consolidated Financial Statements - Continued
(Dollars in Thousands)
(7) TRANSACTIONS WITH AFFILIATES
The Company incurred interest expense of approximately
$4,200 for the six months ended June 30, 1996 and approximately
$1,353 for the six months ended June 30, 1995 in connection with
the acquisition and additional financing, obtained from an
affiliate. Approximately $9,065 of such interest was unpaid as
of June 30, 1996.
With respect to any calendar year, JMB or its affiliates are
entitled to 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 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. Any Qualified Allowance subsequent to 1989 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 behalves, including salaries and
salary-related expenses incurred in connection with the
management of the Company's (or subsidiaries' or joint ventures')
operations. The total of such costs was approximately $249
during the six months ended June 30, 1995 and approximately $308
for the six months ended June 30, 1996; approximately $896 of
such costs were unpaid as of June 30, 1996. In addition, as of
June 30, 1996, the other amounts due to affiliates includes
$9,106 of income taxes payable related to the Class A COLA
Redemption Offer (see note 4). Also, the Company pays a non-
accountable reimbursement of approximately $30 per month to JMB
and its affiliates for general overhead expenses, all of which
was paid as of June 30, 1996.
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 for the six months
ended June 30, 1995 was approximately $668 and approximately $423
for the six months ended June 30, 1996 all of which was paid as
of June 30, 1996.
AMFAC/JMB HAWAII, INC.
Notes to Consolidated Financial Statements - Continued
(Dollars in Thousands)
Northbrook and its affiliates allocate certain charges for
services to the Company based upon the estimated level of
services, of which $8,528 was unpaid as of June 30, 1996. 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.
(8) EMPLOYEE BENEFIT PLANS
The Company participates in benefit plans covering
substantially all of 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.
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.
(9) COMMITMENTS AND CONTINGENCIES
The Company is involved in various matters of litigation and
other claims. Management, with knowledge of facts and 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.
The Company's Property segment has contractual commitments
(related to project costs) of approximately $2,600 as of June 30,
1996. Additional development expenditures are dependent upon the
Company's ability to obtain financing for such costs and on the
timing and extent of property development and sales.
As of June 30, 1996 certain portions of the Company's land
not currently under development or used in sugar operations are
mortgaged as security for approximately $1,128 of performance
bonds related to property development.
AMFAC/JMB HAWAII, INC.
Notes to Consolidated Financial Statements - Concluded
(Dollars in Thousands)
(10) INCOME TAXES
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 are as follows:
Deferred tax assets:
Postretirement benefits $(23,804)
Interest accruals (3,149)
Other accruals (3,074)
---------
Total gross deferred tax assets (30,027)
---------
Deferred tax liabilities:
Accounts receivable, related to profit on sales
of sugar 3,332
Inventories, principally due to sugar production
costs, capitalized interest and purchase
accounting adjustments 4,716
Plant and equipment, principally due to differences
in depreciation and purchase accounting adjustments 7,696
Land and land improvements, principally due
to purchase accounting adjustments 101,204
Deferred gains, due to installment gains for income
tax purposes 8,492
Investments in unconsolidated entities, principally
due to purchase accounting adjustments 14,180
--------
Total deferred tax liabilities 139,620
--------
Net deferred tax liability $109,593
=========
AMFAC/JMB FINANCE, INC.
Balance Sheets
June 30, 1996 and December 31, 1995
(Dollars in thousands, except per share information)
(Unaudited)
A s s e t
June 30, December 31,
1996 1995
----------- -----------
Cash $ 1 1
========== =========
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
Repurchase obligation (note 2)
Common stock, $1 par value; authorized, issued
and outstanding - 1,000 shares $ 1 1
========== ==========
<FN>
The accompanying notes are an integral part of these balance sheets.
AMFAC/JMB FINANCE, INC.
Notes to the Balance Sheets
(Unaudited)
(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) REPURCHASE OBLIGATIONS
On March 14, 1989, Finance and a subsidiary of Northbrook
(Amfac/JMB Hawaii, Inc.) entered into an agreement (the
"Redemption 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 A and
Class B COLA is approximately $.155 and $.155, respectively.
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 above. Notwithstanding
Finance's repurchase obligations, Amfac/JMB Hawaii, Inc. may
elect to redeem any COLAS requested to be repurchased at the
specified purchase price in accordance with the terms in the
indenture that governs the terms of the COLAS (the
"Indenture").
On March 15, 1995, pursuant to the Indenture, Amfac/JMB
Hawaii, Inc. elected to exercise its right to redeem, and
therefore was obligated to repurchase, any and all Class A
COLAS submitted pursuant to the Redemption Offer at a price of
$.365 per Class A COLA.
PART I. FINANCIAL INFORMATION
ITEM 2. 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 were 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 ("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 1999) to repurchase 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 ($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. Through the date of this report, the cumulative
interest paid per Class A and Class B COLA is approximately
$155 and $155, 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 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. 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.
As described above, the Company borrowed $52 million from
Northbrook to redeem Class A COLAS pursuant to the Redemption
Offer (see Note 4). The Company has also borrowed
approximately $13.1 million and $9.8 million at June 30, 1996
and December 31, 1995, respectively, to fund COLA Base
Interest payments and other operational needs. The loans from
Northbrook are payable interest only, mature on June 1, 1998
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.
As a result of the repurchases, the Company retired
approximately $164 million face value of COLA debt and
recognized a financial statement gain in the second quarter of
1995 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
2).
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. Management does not believe that the aggregate Fair
Market Value of the Company's assets as of December 31, 1995
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 after 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 $66,000
loan from the Employees' Retirement System of the State of
Hawaii ("ERS"). The nonrecourse 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 bore 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 year or (ii) ten
percent per annum through June 30, 1993 and nine percent per
annum thereafter. The annual interest payments were in excess
of the cash flow generated by the Kaanapali Golf Courses.
In April 1996, the Company reached an agreement to amend
the loan with the ERS, extending the maturity date for five
years. In exchange for the loan extension, the ERS received
the right to participate in the "Net Disposition Proceeds" (as
defined) related to the sale or the refinancing of the golf
courses or at the maturity of the loan. The ERS share of the
Net Disposition Proceeds increases from 30% through June 30,
1997, to 40% for the period from July 1, 1997 to June 30, 1999
and to 50% thereafter. The loan amendment effectively adjusts
the interest rate as of January 1, 1995 to 9.5% until June 30,
1996. After June 30, 1996, the loan bears interest at a rate
per annum equal to the five-year treasury rate on July 1, 1996
(6.48%) plus 2 1/4%. The loan amendment requires the Company
to pay interest at the rate of 7% for the period from January
1, 1995 to June 30, 1996, 7.5% from July 1, 1996 to June 30,
1997, 7.75% from July 1, 1997 to June 30, 1998 and 8.5%
thereafter ("Minimum Pay Rates"). The Company has made
payments in April 1996 for $4,119 and in July 1996 for $1,148,
representing the minimum interest payment due for the period
through July 1, 1996. The scheduled minimum interest payments
are paid quarterly on the principal balance of the $66,000
loan. The difference between the accrued interest expense and
the minimum interest payment accrues interest and is payable
on an annual basis from excess cash flow, if any, generated
from the Kaanapali Golf Courses. Although the outstanding
loan balance remains nonrecourse, the amendment makes the
minimum interest payments and the ERS's share of appreciation,
if any, recourse to the Company. However, the Company's
obligations to make future minimum interest payments and to
pay the ERS a share of appreciation would be terminated if the
Company tendered an executed deed to the golf course property
to the ERS in accordance with the terms of the amendment.
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 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 (5.6% at June 30, 1996) plus 3%, respectively. 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).
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,
depending on the price and certain other contingencies, a
payment of up to $15 million might be required to be made 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.
During the six months ended June 30, 1996, the Company
generated approximately $4.4 million from non-strategic land
sales and an additional $5.0 million from the sale of 17 lots
at its Kaanapali Golf Estates development on the island of
Maui. During 1995, the Company generated approximately $30.8
million in land sales, most of which related to non-strategic
parcels. In addition, during 1995 the Company received an
approximate $1.0 million deposit, which represents the
purchase price for 10 acres on Oahu.
At June 30, 1996, the Company had cash and cash
equivalents of approximately $9.6 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 development costs remaining at Waikele,
West Maui and Kauai, agricultural deficits, payment of
interest expense and the repayment of principal on debt
obligations. The Company's long-term 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. In general, 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 costs of required infrastructure, the
planned development of these land holdings and the ability to
generate cash flow from them are expected to be long-term in
nature. 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 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 does not expect to generate a sufficient
level of Net Cash Flow to pay Base Interest in excess of four
percent for 1996.
The Company continues to implement certain cost savings
measures and to defer development project costs and capital
expenditures for longer-term projects. The Company's Property
segment is anticipated to expend an additional approximately
$7.0 million in project costs during the remainder of 1996.
During 1995, the Company restructured 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 supports legislation. On April 4, 1996,
President Clinton signed the Federal Agriculture Improvement
and Reform Act of 1996 ("the Act"). The Act 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.
RESULTS OF OPERATIONS
GENERAL:
The Company and its subsidiaries report their taxes as a
part of the consolidated tax return of the Company's parent,
Northbrook. The Company and its subsidiaries entered into a
tax indemnification agreement with Northbrook, which
indemnifies them 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"). This
statement 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 accrual of deferred taxes and the
recording of a provision for taxes in the separate financial
statements of members of a consolidated tax group, including
the recognition of deferred tax assets and liabilities for the
tax effects of differences between assigned values and tax
bases of assets acquired and liabilities assumed in the Merger
(see Note 1). Accordingly, current and deferred taxes have
been allocated to the Company as if the Company were a
separate taxpayer. However, in general, the tax
indemnification agreement does not require the Company to
actually pay income taxes; current taxes payable or receivable
(excluding 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) have been reflected as deemed
contributions and distributions, respectively, to additional
paid-in capital in the accompanying consolidated financial
statements.
Accrued expenses decreased as of June 30, 1996 as
compared to December 31, 1995, primarily due to the
reclassification of deferred interest on the ERS loan to non-
current.
Current portion of long-term debt decreased and long-term
debt increased as of June 30, 1996 as compared to December 31,
1995, due primarily to the reclassification of the ERS loan
from current to long-term (see Note 5).
Current portion of deferred income taxes increased at
June 30, 1996 as compared to December 31, 1995 due primarily
to an increase in agricultural inventory costs, which are
deductible for tax purposes, and an increase in agricultural
receivables related to raw sugar deliveries, which are taxable
generally upon receipt.
The current portion of amounts due affiliates increased
as of June 30, 1996 as compared to December 31, 1995 primarily
due to accrued interest on financing provided by affiliates.
Other long-term liabilities increased as of June 30, 1996
as compared to December 31, 1995 primarily due to the
difference between the interest expense accrued and minimum
interest payments required under the amended terms of the ERS
loan. (see Note 5).
Interest expense increased for the three and six months
ended June 30, 1996 as compared to the three and six months
ended June 30, 1995 primarily due to interest expense related
to additional affiliated financing, partially off-set by the
early retirement of Class A and Class B COLAS.
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.
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 marketing agreement. HSTC sells the raw
sugar production to the California and Hawaii Sugar Company
("C&H") pursuant to a long-term supply contract. 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 charges. The Company recognizes revenues and
related cost of sales upon delivery of its raw sugar to 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 supports legislation. On April 4, 1996,
President Clinton signed the Federal Agriculture Improvement
and Reform Act of 1996 ("the Act"). The Act 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.
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 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 settled its insurance claims in 1995 for the
damage suffered and collected approximately $30 million in
proceeds over the approximately three year period.
Receivables increased as of June 30, 1996 as compared to
December 31, 1995 primarily due to the timing of payments for
deliveries of raw sugar partially offset by the collection of
certain insurance claims outstanding as of December 31, 1995.
Inventories decreased as of June 30, 1996 as compared to
December 31, 1995 primarily due to the timing of the
harvesting of sugar cane.
Agricultural revenues and cost of sales increased for the
six months ended June 30, 1996 as compared to the six months
ended June 30, 1995 due to increased production, the timing of
shipments of raw sugar to C&H and the closure of Oahu Sugar in
April 1995.
Agricultural revenues and cost of sales decreased for the
three months ended June 30, 1996 as compared to the three
months ended June 30, 1995 due to the timing of shipments of
raw sugar to C&H.
Agricultural operating loss decreased for the six months
ended June 30, 1996 as compared to the six months ended June
30, 1995 due to the amortization of unrecognized gains related
to postretirement benefit obligations and higher cost in 1995
associated with the final phase of operations at Oahu Sugar.
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.
For the six months ended June 30, 1996, the Company
generated approximately $9.4 million of land sales.
Property sales and cost of sales decreased for the three
and six months ended June 30, 1996 as compared to the three
and six months ended June 30, 1995 primarily due to the
receipt of proceeds related to certain contingent
participation rights at Waikele in 1995 and the decreased
sales volume of non-strategic land parcels, offset in part by
increased sales at the Kaanapali Golf Estates in 1996.
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 (the plantation was shut down
in 1995), 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 has obtained City Council approval
of "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 and employee housing
requirements in connection with the South Beach Mauka land use
approval as well as the North Beach property (described
below). The Company anticipates commencing construction of
infrastructure of Puukolii Village in the second half of 1996.
The planned development of the Company's land on Maui is
expected to be long term in nature. 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 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. During
the six months ended June 30, 1996, the Company sold 17
homesites for approximately $5.0 million which includes 8
homesites to a developer who plans to construct and sell
houses on these lots. One additional homesite was sold
subsequent to June 30, 1996. The Company currently has six
homesites on the market, which are priced from approximately
$400,000 to $1 million.
In 1995, the Company 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 four lots.
In 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. 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.
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
the Company's North Beach property (thus rejecting the CAC
recommendations that two-third's of North Beach be downzoned
to "Park"). The ordinance was signed by the Mayor of the
County of Maui in late February 1996.
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. In May 1996, the Kauai County approved the
Company's application to rezone the project. While the
Company is optimistic that the proposed project will continue
to 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.
PART II. OTHER INFORMATION
ITEM 1. 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 course
of business. While it is impossible to predict the outcome of
the litigation that is now pending (or threatened) and for
which the potential liability is not covered by insurance, the
Company is of the opinion that the ultimate liability from any
of the litigation will not materially adversely affect the
Company's financial condition.
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a)The following documents are included as an
exhibits to this report.
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***** $13,250,000 Loan
Agreement among Heller, Financial, Inc.,
as Lender, The Lihue Plantation Company
Limited, as Borrower, and Amfac/JMB
Hawaii, Inc., Kekaha Sugar Company,
Limited, Oahu Sugar Company Limited and
Pioneer Mill Company, Limited, as
Guarantors December 30, 1992.
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.
4.8******** Agreement for
delivery and sale of raw sugar between
Hawaii Sugar Transportation Corporation,
as seller, and C&H, as Buyer, dated June
4, 1993.
4.9********* Previously
filed as an exhibit to the Company's
Form 10-Q report under the Securities
Act of 1934 (File No. 33-24180) filed
May 13, 1996 and hereby incorporated by
reference. Standard Sugar Marketing
Contracts between Hawaiian Sugar
Transportation Company and Hawaii Sugar
Growers dated June 4, 1993.
4.10 Amendment to the
$66,000,000 loan with the Employees'
Retirement System of the State of Hawaii
to Amfac/JMB Hawaii, Inc. as of April
18, 1996.
4.11 Amended and Restated
$52,000,000 Promissory Note to
Northbrook Corporation from Amfac/JMB
Hawaii, Inc. extended and reissued
effective June 1, 1996.
4.12 Amended and Restated
$28,087,832 Promissory Note from Amfac,
Inc. to Amfac/JMB Hawaii, Inc. extended
and reissued effective June 1, 1996.
10.1* General Lease S-
4222, dated January 1, 1969, by and
between the State of Hawaii and Kekaha
Sugar Company, Limited.
10.2* Grove Farm Haiku
Lease, dated January 25, 1974 by and
between Grove Farm Company, Incorporated
and The Lihue Plantation Company,
Limited.
10.3* General Lease S-
4412, dated October 31, 1974, by and
between the State of Hawaii and the
Lihue Plantation Company, Limited.
10.4* General Lease S-
4576, dated March 15, 1978, by and
between the State of Hawaii and The
Lihue Plantation Company, Limited.
10.5* General Lease S-
3827, dated July 8, 1964, by and between
the State of Hawaii and East Kauai Water
Company, Ltd.
10.6* Amended and Restated
Power Purchase Agreement, dated as of
June 15, 1992 by and between The Lihue
Plantation Company, Limited and Citizens
Utilities Company.
10.7* 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.
10.8* 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.
10.9* 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.
10.10* Honokohau Water
License, dated December 22, 1980,
between Maui Pineapple Company Ltd. and
Pioneer Mill Company, Limited.
10.11* Water Licensing
Agreement, dated September 22, 1980, by
and between Maui Land & Pineapple
Company, Inc. and Amfac, Inc.
10.12* Joint Venture
Agreement, dated as of March 19, 1986,
by and between Amfac Property
Development Corp. and Tobishima
Properties of Hawaii, Inc.
10.13* Development
Agreement, dated March 19, 1986, by and
between Kaanapali North Beach Joint
Venture and Amfac Property Investment
Corp. and Tobishima Pacific, Inc.
10.14 Keep-Well Agreement
between Northbrook Corporation and
Amfac/JMB Finance, Inc.
10.15* Repurchase
Agreement, dated March 14, 1989, by and
between Amfac/JMB Hawaii, Inc. and
Amfac/JMB Finance, Inc.
10.16* 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.
10.17* Amfac-Amfac Hawaii
Tax Agreement, dated February 27, 1989
between Amfac, Inc. and Amfac/JMB
Hawaii, Inc.
10.18* 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.
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-
K report under the Securities Act of 1934 (File No. 33-24180)
filed on May 29, 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 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 March 27, 1994 and hereby incorporated by
reference.
******** Previously filed as an exhibit to the Company's Form
10-Q report under the Securities Act of 1934 (File No. 33-
24180) filed May 12, 1995 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 May 13, 1996 and hereby incorporated by
reference.
********* Previously filed as an exhibit to the Company's Form
10-Q report under the Securities Act of 1934 (File No. 33-
24180) filed May 13, 1996 and hereby incorporated by
reference.
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:August 13, 1996
Pursuant to the requirements of the Securities Exchange
Act of 1934, this report has been signed below by the
following person in the capacity and on the date indicated.
Gary Smith
Principal Accounting Officer
Date:August 13, 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:August 13, 1996
Pursuant to the requirements of the Securities Exchange
Act of 1934, this report has been signed below by the
following person in the capacity and on the date indicated.
Gary Smith
Principal Accounting Officer
Date:August 13, 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: August 13, 1996
Pursuant to the requirements of the Securities Exchange
Act of 1934, this report has been signed below by the
following person in the capacity and on the date indicated.
Gary Smith
Principal Accounting Officer
Date:August 13, 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:August 13, 1996
Pursuant to the requirements of the Securities Exchange
Act of 1934, this report has been signed below by the
following person in the capacity and on the date indicated.
Gary Smith
Principal Accounting Officer
Date:August 13, 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:August 13, 1996
Pursuant to the requirements of the Securities Exchange
Act of 1934, this report has been signed below by the
following person in the capacity and on the date indicated.
Gary Smith
Principal Accounting Officer
Date:August 13, 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:August 13, 1996
Pursuant to the requirements of the Securities Exchange
Act of 1934, this report has been signed below by the
following person in the capacity and on the date indicated.
Gary Smith
Principal Accounting Officer
Date:August 13, 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:August 13, 1996
Pursuant to the requirements of the Securities Exchange
Act of 1934, this report has been signed below by the
following person in the capacity and on the date indicated.
Gary Smith
Principal Accounting Officer
Date:August 13, 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:August 13, 1996
Pursuant to the requirements of the Securities Exchange
Act of 1934, this report has been signed below by the
following person in the capacity and on the date indicated.
Gary Smith
Principal Accounting Officer
Date:August 13, 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:August 13, 1996
Pursuant to the requirements of the Securities Exchange
Act of 1934, this report has been signed below by the
following person in the capacity and on the date indicated.
Gary Smith
Principal Accounting Officer
Date:August 13, 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:August 13, 1996
Pursuant to the requirements of the Securities Exchange
Act of 1934, this report has been signed below by the
following person in the capacity and on the date indicated.
Gary Smith
Principal Accounting Officer
Date:August 13, 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:August 13, 1996
Pursuant to the requirements of the Securities Exchange
Act of 1934, this report has been signed below by the
following person in the capacity and on the date indicated.
Gary Smith
Principal Accounting Officer
Date:August 13, 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:August 13, 1996
Pursuant to the requirements of the Securities Exchange
Act of 1934, this report has been signed below by the
following person in the capacity and on the date indicated.
Gary Smith
Principal Accounting Officer
Date:August 13, 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:August 13, 1996
Pursuant to the requirements of the Securities Exchange
Act of 1934, this report has been signed below by the
following person in the capacity and on the date indicated.
Gary Smith
Principal Accounting Officer
Date:August 13, 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:August 13, 1996
Pursuant to the requirements of the Securities Exchange
Act of 1934, this report has been signed below by the
following person in the capacity and on the date indicated.
Gary Smith
Principal Accounting Officer
Date:August 13, 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.
WAIKELE GOLF CLUB, INC.
By: Gary Smith
Vice President
Date:August 13, 1996
Pursuant to the requirements of the Securities Exchange
Act of 1934, this report has been signed below by the
following person in the capacity and on the date indicated.
Gary Smith
Principal Accounting Officer
Date:August 13, 1996