<PAGE>

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

                                   FORM 10-K

(Mark One)
[X]          ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
                        SECURITIES EXCHANGE ACT OF 1934
              For the Fiscal Year Ended        December 31, 1997
                                               -----------------
                                      OR

[ ]        TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
                        SECURITIES EXCHANGE ACT OF 1934

                       Commission File Number    1-9145
                                                 ------

                      MAUNA LOA MACADAMIA PARTNERS, L.P.
                      ----------------------------------
            (Exact Name of registrant as specified in its charter)

                        DELAWARE                    99-0248088
             ------------------------------      ----------------
            (State or other jurisdiction of      (I.R.S. Employer
            incorporation or organization)      Identification No.)

               828 FORT STREET, HONOLULU, HAWAII         96813
           ----------------------------------------   ----------
           (Address of principal executive offices)   (Zip Code)

     Registrant's telephone number, including area code:   (808) 532-4130
                                                           --------------

          SECURITIES REGISTERED PURSUANT TO SECTION 12(b) OF THE ACT:

                                                Name of Each Exchange
                  Title of Each Class            on Which Registered
          --------------------------------      ---------------------
          Depositary Units Representing
        Class A Limited Partners' Interests    New York Stock Exchange

       SECURITIES REGISTERED PURSUANT TO SECTION 12(g) OF THE ACT: NONE

Indicate by check mark whether the registrant (1) has filed all reports 
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 
1934 during the preceding twelve months (or for such shorter period that the 
registrant was required to file such reports), and (2) has been subject to 
such filing requirements for the past 90 days.   Yes  X   No
                                                     ---     ---

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 
of Regulation S-K is not contained herein, and will not be contained, to the 
best of registrant's knowledge, in definitive proxy or information statements 
incorporated by reference in Part III of this 10-K or any amendment to this 
10-K. [ ]

As of March 6, 1998, 7,500,000 shares of the registrant's Class A Units were 
outstanding, and the aggregate market value of such Units held by 
non-affiliates was $29,062,500 (based on the closing price on that date of 
$3.875 per Unit).

                                       1

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                                    PART I

ITEM 1.  BUSINESS OF THE PARTNERSHIP

GENERAL DESCRIPTION OF THE BUSINESS

Mauna Loa Macadamia Partners, L.P. (the "Partnership"), is a publicly-traded 
partnership, organized under the laws of the State of Delaware, engaged in 
the business of growing macadamia nuts in Hawaii.  It is one of the world's 
largest growers of macadamia nuts.  The Partnership owns or leases 
approximately 4,027 tree acres of macadamia nut orchards in three locations 
within a 50-mile radius on the island of Hawaii, where macadamia nut yields 
are among the world's highest.  ("Tree acres" are acres of the Partnership's 
owned or leased lands utilized for macadamia nut orchards.  "Gross acres" 
includes areas not utilized for orchards.)  The Partnership is managed by its 
sole general partner, Mauna Loa Resources Inc. ("Resources" or the "Managing 
Partner").  The Managing Partner is owned by Mauna Loa Macadamia Nut 
Corporation ("Mauna Loa").  Mauna Loa is a wholly owned subsidiary of 
C. Brewer Company, Limited ("CBCL"), which in turn is wholly owned by 
Buyco, Inc.  ("Buyco").

Mauna Loa was the Partnership's special general partner until December 1997, 
when it assigned its interest as a general partner to Resources and withdrew 
as a special general partner.  Although Mauna Loa and certain of its 
affiliates formerly held Class B Units in the Partnership, all Class B Units 
were cancelled in November 1997 for nominal consideration.  Ownership of 
Class A Units confers no direct or indirect interest in Buyco, CBCL, Mauna Loa 
or any of their affiliated corporations.

The Partnership commenced operations in June 1986, following its acquisition 
of interests in approximately 2,423 tree acres of macadamia nut orchards from 
Mauna Loa and one of Mauna Loa's affiliates.  In December 1986 and October 
1989, respectively, the Partnership acquired from affiliates of Mauna Loa 
interests in approximately 266 and 1,260 additional tree acres of macadamia 
orchards.  In September 1991 the Partnership acquired approximately 78 tree 
acres of producing macadamia orchards.

NARRATIVE DESCRIPTION OF THE BUSINESS

The Partnership sells all of its macadamia nuts to Mauna Loa, under four 
long-term nut purchase contracts.  Mauna Loa processes and markets the nuts 
under the MAUNA LOA-REGISTERED TRADEMARK- brand name and is the largest 
processor and marketer of macadamia nuts in the world.  The Partnership is 
Mauna Loa's largest single supplier of macadamia nuts.  All farming 
activities are performed for the Partnership by CBCL subsidiaries under 
long-term farming contracts.

NUT PURCHASE CONTRACTS.

The Partnership is a party to four nut purchase contracts with Mauna Loa.  
They cover all nuts produced by the orchards acquired in June 1986, December 
1986, October 1989, and September 1991, respectively.  The first two 
contracts expire in 2006, while the third contract expires in 2019 and also 
provides for the exclusion of unusable nuts from those purchased by Mauna Loa. 
The first three contracts are identical in all other material respects. The 
fourth contract was 

                                       2

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acquired by assignment with the purchase in September 1991 of the Lot 10 
orchard and expires in 2003.  The fourth contract is similar to the first 
three contracts, but the nut price is calculated on a crop year (July 1 
through June 30) rather than calendar year basis, which results in a slightly 
different nut price.  All four contracts use a pricing formula based 50% on a 
two-year trailing average of the macadamia nut price published annually by 
the United States Department of Agriculture and 50% on Mauna Loa's "netback 
component." The netback component is calculated by subtracting Mauna Loa's 
processing and marketing costs per pound and a "capital charge" of 20% from 
its nut revenues per pound.  The first three nut purchase contracts may be 
terminated by Mauna Loa upon thirty days' notice if the Managing Partner is 
involuntarily removed as the managing general partner and replaced by a 
person or entity not affiliated with Mauna Loa. The fourth nut purchase 
contract may be terminated at any time by mutual agreement in writing, or it 
may be terminated by the Partnership as of the end of any calendar year by 
giving Mauna Loa at least twelve months advance notice of its intention to 
terminate.

COMPETITION

Because the Partnership's revenues from nut sales (and therefore its overall 
financial results) are tied to a formula dependent in large part upon 
Mauna Loa's market performance, the Partnership bears certain risks associated 
with Mauna Loa's marketing of the nuts, including the likelihood of increased 
future competition.

Mauna Loa considers its primary competition to be other premium nut products, 
except in Hawaii where its products compete with those of other macadamia nut 
producers and other food and non-food tourist items.  As a premium nut, 
macadamia nuts compete with cashews, almonds and pistachios.

Mauna Loa sells macadamia nuts as "retail" nuts and "commercial" nuts and 
produces and sells various macadamia nut products. These include pristine 
salted and unsalted roasted macadamia nuts, packages of diced macadamia nuts 
and macadamia oil (for cooking and baking), value-added products such as 
candy-glazed macadamia nuts, chocolate-covered macadamia nuts, chocolate 
macadamia nut candy bars, honey-roasted macadamia nuts and macadamia nut 
brittle.

Macadamia nuts comprised less than 5% of the sales of branded premium nuts 
sold through mass merchandisers, drug and grocery stores on the U.S. 
mainland. Cashews and mixed nuts represent the bulk of the dollar sales in 
this segment, followed by pistachios.  Macadamia nuts are the highest priced 
of all premium nuts, and, therefore, they may be sensitive to price 
competition from other nuts.

Approximately one-third of sales of the MAUNA LOA-REGISTERED TRADEMARK- brand 
are made in the U.S. mainland, where Mauna Loa sells its products through 
brokers to food stores, club stores, drug store chains, mass merchandisers 
and commercial customers.

Approximately one-third of sales of the MAUNA LOA-REGISTERED TRADEMARK- brand 
are made in Hawaii where Mauna Loa sells through its own direct sales force 
primarily to retailers.  Substantial portions of the macadamia nut products 
sold are purchased by visitors as gifts and souvenirs.  Mauna Loa believes 
that it is the largest seller of macadamia products in the State of Hawaii.

Outside the United States, Mauna Loa's other major market is Japan and the 
Far East. Approximately 20% of sales of the MAUNA LOA-REGISTERED TRADEMARK- 
brand are made in Japan and the Far East.

The remaining sales are comprised of ingredient nuts, visitor center sales, 
and mail order sales.

                                       3

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In addition to the State of Hawaii, mature macadamia nut orchards are located 
in Australia, Africa, and Central America.  While Hawaii supplied 38% of the 
world crop in the 1996/97 crop year, Australia became the largest macadamia 
producer in the world, at 40% of the world crop.  Australia is expected to 
experience growth through the end of the decade.  The world supply of 
macadamia nuts has increased substantially during the last several years and 
is projected to increase an average of 10% per year for each of the next four 
years.

A general decline in nut prices would adversely affect the prices which 
Mauna Loa could charge for its macadamia nut products and could have a 
negative effect on its profitability.  Since the purchase price for the 
Partnership's nuts under all of its nut purchase contracts is based in part 
on nut prices reported by the industry and in part on the marketing success 
of Mauna Loa, a general decline in macadamia nut prices could also adversely 
affect the Partnership's revenues.

FARMING CONTRACTS

All of the Partnership's orchards are farmed by two subsidiaries of CBCL 
under four long-term farming contracts. The orchards are located at three 
separate locations on the island of Hawaii ("Keaau", "Ka'u" and "Mauna Kea"). 
Because each area has different terrain and weather conditions, farming 
methods vary somewhat among the three locations.

FARMING CONTRACTS.  The Partnership is a party to four farming contracts with 
two affiliates of CBCL, Ka'u Agribusiness Company, Inc. ("KACI") and Mauna Kea 
Agribusiness Company, Inc. ("MKACI").  Services under these contracts include 
cultivation, weed and pest control, fertilization, pruning and hedging, 
replanting, harvesting, husking and related services for the Partnership's 
orchards.  In return, the Partnership reimburses KACI and MKACI for their 
direct and indirect costs incurred in providing such services, including an 
equipment utilization charge and an annual farming fee.  The first two 
contracts (the "1986 contracts") expire in 2006, while the third contract 
(the "1989 contract") expires in 2019.  The fourth contract (the "Lot 10 
contract") was acquired with the purchase of the Lot 10 orchard in 1991 and 
expires in 2006.  The four contracts are identical in all other material 
respects.  The contracts are terminable if the Managing Partner is 
involuntarily removed and replaced by a person or entity not affiliated with 
Mauna Loa.

Each of the farming contracts was amended effective January 1, 1998 to 
provide that farming fees would equal 2 1/2% of the Partnership's gross 
profits from farming operations, rather than 3% of the Partnership's 
operating cash flow, attributable to the relevant orchard.

ORCHARD MAINTENANCE.  Maintenance of an orchard is essential to macadamia nut 
farming.  Pruning and hedging of trees is necessary to allow space for 
mechanical harvesting and cultivating equipment to safely and efficiently 
operate and to remove dead branches.  Where mechanical equipment is used, the 
orchard floor must be maintained in a condition that will permit its 
operation. Soil and gravel are used to repair mud holes and other surface 
irregularities caused by soil erosion from heavy rain and by farming 
equipment, though this operation is not performed as frequently due to 
current cost controls.  Pruning and surface maintenance are usually performed 
after the harvest season.

Orchard management also requires the proper selection and application of 
fertilizers, pesticides (to control rodents, insects and fungi) and 
herbicides (to control weeds).  Insects, rodents and fungi, as well as wild 
pigs, if not controlled can cause losses to nut production.

                                       4

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HARVESTING.  The harvest period begins in the late summer and runs through 
the spring.  Mature nuts fall from the trees and are harvested using 
mechanized harvest equipment when the orchard floor is level enough to permit 
its use. Nuts are harvested by hand when the orchard floor is too uneven to 
permit mechanical harvesting, when the nut drop is very light and when nuts 
remain after harvesting.  At Keaau, Ka'u and Mauna Kea, seasonal labor for 
hand harvesting and other operations is generally available from nearby Hilo 
and adjacent communities.

Mechanical harvesting is less costly than hand harvesting, but mechanical 
harvesting is possible only where the orchard floor is relatively flat. 
Approximately 56% of the orchards acquired in 19861, 81% of the orchards 
acquired in 1989 and all of the orchard acquired in September 1991 are 
currently mechanically harvested.  The balance of the acreage at these 
orchards is too uneven for mechanical harvesting and must be harvested by 
hand.

During the harvest season, the nuts are collected every six to ten weeks.  
Nuts suffer loss in quality if they remain on the ground too long.  The 
harvested nuts are then transported to the husking facility.  The Keaau and 
Ka'u areas have husking facilities, which are not owned by the Partnership.  
Nuts harvested in the Mauna Kea area are transported to the husking facility 
in the Keaau area.  At the husking facility, the outer husk is removed and 
the nuts, still in their shell, are weighed and sampled to determine moisture 
content and kernel quality.  Title to the nuts passes to Mauna Loa after 
weighing, and the nuts are moved to a drying facility.

PROCESSING.  The nuts purchased from the Partnership by Mauna Loa are 
primarily processed at Mauna Loa's processing plant located adjacent to the 
orchards located in the Keaau area.  The plant was built in 1966 and is 
presently capable of handling approximately 210,000 pounds of dry-in-shell 
(commonly abbreviated "DIS") nuts per day.  Processing at the plant includes 
drying, cracking, roasting, inspecting and packaging.  The plant also 
includes separate warehouses, a machine shop, storage facilities, husking 
facilities, nut drying facilities, a generator and a 10,000 square foot 
chocolate processing plant. None of these processing facilities are owned by 
the Partnership.

At Mauna Loa's plant in Keaau, the harvested nuts are passed by conveyors 
over metal screens, blowers and rock separators that remove everything but 
the in-husk nuts.  The husks are then split and removed by pressing the nuts 
between steel roller bars and a rubber pad.  At this stage, the nut kernels 
are still encased in their hard round shells and roughly 20% of their weight 
is attributable to moisture content.  At this point, the nuts are referred to 
as wet-in-shell (commonly abbreviated "WIS").  The WIS weight of the nuts is 
used to determine payments to be made by Mauna Loa under the Nut Purchase 
Contracts. Approximately 20% of the WIS weight of the nuts will become dry 
salable kernels when all further processing is completed.

After the nuts are weighed the moisture content is reduced by blowing warm 
air over them, producing DIS nuts.  The nuts are then cracked by metal 
rollers to remove the shell.  Mechanical and optical equipment, as well as 
hand sorting, are used to separate the nut kernels from pieces of broken 
shell.

The dry nut kernels are roasted and then sorted into retail and commercial 
grades.  At this stage, less than half of the nuts are bulk-packed and sent 
to four co-packers on the U.S. mainland for packaging.  At Mauna Loa's plant 
in Keaau the nuts may be salted, or covered with chocolate or one of several 
candy glazes, and finally packaged, labeled and readied for shipment.

                                       5

<PAGE>

STABILIZATION PAYMENTS

In December 1986, the Partnership acquired a 266 acre orchard (the "December 
1986 Orchard") that was several years younger than other orchards of the 
Partnership.  Because of the relative immaturity of the newer orchard, its 
productivity (and therefore cash flow) was expected to be correspondingly 
lower for the first several years than for the other older orchards.

Accordingly, the seller of this orchard (KACI) agreed to make cash 
stabilization payments to the Partnership for each year through 1993 in which 
the cash flow (as defined) from this orchard fell short of the target cash 
flow level, which equaled $507,000.  Stabilization payments for any given 
year were limited to the lesser of the amount of the shortfall or a maximum 
payment amount.  For the years from 1987 through 1993, inclusive, the 
Partnership received a total of $1,628,000 (including a 4% Hawaii general 
excise tax) in stabilization payments under this agreement.

The Partnership accounted for stabilization payments (net of the 4% Hawaii 
general excise tax) as a reduction in the cost basis of the orchard.  As 
such, these payments are being reflected in the Partnership's net income 
ratably through 2019 as a reduction to the depreciation expense reported for 
this orchard.

In return, the Partnership is obligated to pay the seller 100% of any year's 
cash flow from this orchard in excess of the target cash flow as additional 
percentage rent until the aggregate amount of the additional percentage rent 
paid equals 150% of the total amount of stabilization payments previously 
received. Thereafter, the Partnership is obligated to pay the seller 50% of 
this orchard's cash flow in excess of the target cash flow as additional 
incentive rent.  The Partnership paid KACI $54,000 under these provisions for 
1996 and will pay $297,000 for 1997.  No amounts were payable with respect to 
prior years.

RISKS INVOLVED IN OPERATING MACADAMIA ORCHARDS

Macadamia nut trees are subject to damage or destruction from diseases, 
pests, floods, droughts, windstorms, hurricanes, volcanic activity and other 
natural causes.  Partnership tree replacements for all orchards from all 
causes were 1.3% in 1995, 1.3% in 1996 and 2.0% in 1997.

DISEASES AND PESTS.  The Partnership's Keaau orchards have experienced tree 
replacements of 2.2% in 1995, 2.2% in 1996 and 1.9% in 1997.  Other macadamia 
growers in the vicinity have also experienced higher than normal tree losses 
due to a problem known as "Macadamia Quick Decline" ("MQD").  Based upon 
research by the University of Hawaii and other experts, it is believed that 
the situation is due to fungi associated with high moisture conditions.  It 
is also believed that a particular variety of macadamia nut tree (variety 333) 
is most susceptible to MQD problem.  Another tree variety (variety 344) has 
recently also been identified as being more susceptible to MQD than other 
varieties. Based on the latest research, Mauna Loa and the University of 
Hawaii are working to identify the specific causes of the problem and 
potentially to develop feasible control measures. There is no assurance, 
however, that a feasible control measure can be developed.  Approximately 9% 
of the Partnership's orchards are variety 333 and 46% are variety 344.  Both 
the Keaau and Mauna Kea orchards are areas with high moisture conditions, and 
may be more susceptible to the MQD problem.  MQD is present in the Ka'u 
orchards, but tree losses to date have been less than 1% in the Ka'u area.

                                       6

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In addition, there are also two types of controllable fungal diseases which 
can affect nut production, but are not fatal to the trees themselves.  One of 
these is Phytopthora which affects the macadamia flowers and nutlets.  These 
types of fungal disease were generally controllable with fungicides, but many 
of these fungicides are no longer available.  Historically, these fungi have 
attacked the orchards located in Keaau every three or four years.  These 
fungi occurred in 1990 and required application of a fungicide at a cost of 
$292,000.  There was a Phytopthora occurrence in the Keaau and Mauna Kea 
orchards in the spring of 1994 and, as there are currently no feasible 
methods available to treat Phytopthora, the 1995-96 crop year production for 
these orchards was affected.

WINDSTORMS AND INSURANCE. The Partnership's orchards are located in areas on 
the island of Hawaii which are susceptible to windstorms.  Twenty-two major 
windstorms have occurred on the island of Hawaii since 1961, and four of 
those caused material losses to Partnership orchards.  Several of the 
Partnership's orchards are surrounded by windbreak trees which provide 
limited protection. Younger trees that have not developed extensive root 
systems are particularly vulnerable to windstorms.

For 1998, the Partnership secured tree and crop insurance coverage under a 
federally subsidized program.  The tree insurance provides coverage up to a 
maximum of approximately $20 million against loss of trees due to wind, fire 
or volcanic activity.  The crop insurance provides coverage up to a maximum 
of approximately $5 million against loss of nuts due to wind, fire, volcanic 
activity, earthquake, adverse weather, wildlife damage and failure of 
irrigation water supplies.

On February 24, 1997, high winds hit the Hilo side of the island of Hawaii, 
resulting in the loss of 5,381 trees (about 1.5% of all of the Partnership's 
trees) in the Mauna Kea and Keaau orchards.  Clean-up and replanting costs 
were approximately $275,000.  There was no insurance recovery because losses 
were below the deductible amount.  Production during the 1997-98 crop year 
will be adversely impacted due to the loss of these trees.

VOLCANOES.  The orchards are located on the island of Hawaii, where there are 
two active volcanoes.  To date, no lava flows from either volcano have 
affected or threatened the orchards.

RAINFALL.  The productivity of orchards depends in large part on moisture 
conditions.  Inadequate rainfall can reduce nut yields significantly, while 
excessive rain without adequate drainage can foster disease and hamper 
harvesting operations.  While rainfall at the orchards located in the Keaau 
and Mauna Kea areas has generally been adequate, the orchards located in the 
Ka'u area generally receive less rainfall and, as a result, a portion of the 
Ka'u orchards is presently irrigated.  Irrigation can mitigate the effects of 
a drought, but it cannot completely protect a macadamia nut crop from the 
effect of a drought.  Recorded rainfall at each of the three locations of the 
Partnership's orchards for the past five years is shown below:

<TABLE>
<CAPTION>

     Year                  Ka'u     Keaau     Mauna Kea
     ----                  ----     -----     ---------
     <S>                   <C>      <C>       <C>
     1993                  27.3"    109.0"     142.7"
     1994                  68.7"    173.3"     249.7"
     1995                  27.0"     88.6"     123.1"
     1996                  69.3"    125.2"     146.6"
     1997                  54.9"    142.3"     157.5"

</TABLE>

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For the first four months of 1993 and the first eleven months of 1995, very 
dry conditions prevailed in the Partnership's orchards, with the Ka'u area 
being particularly affected.  Though the rainfall returned to more normal 
levels in the second half of 1993 as well as in 1996 and 1997, the 
Partnership's 1993-94 and 1995-96 crop year production were adversely 
affected by these droughts.

The heavy rainfall experienced in January and February 1994 in the Keaau 
orchards (forty inches compared to a historical average of twenty-one) 
induced flower disease and limited pollination.  The 1994-95 crop year 
production for the Keaau orchards was adversely impacted by these unusual wet 
conditions.

Currently the island of Hawaii is experiencing a severe drought.  Experts 
attribute this condition to the effects of the El Nino weather pattern. The 
National Weather Service has informed Hawaii county officials that normal 
weather may not return to the island of Hawaii until April or May.  Rainfall 
in the Keaau area for January and February totaled 1.8 inches, less than 10% 
of normal, and rainfall in Ka'u for the same two months has been less than 
0.5 inches, which is 5% of normal.  While it is impossible to predict at this 
time, a prolonged drought could have a negative impact on the 1998 and 1999 
production volumes.

WATER SUPPLY FOR IRRIGATION

In June 1986, the Partnership and KACI entered into an agreement (the "Water 
Agreement") pursuant to which KACI agreed to supply water to that portion of 
the June 1986 Orchards located at Ka'u ("Ka'u I") which had been irrigated 
historically.  In 1989, the Water Agreement was amended to supply water to 
that portion of the October 1989 Orchards at Ka'u ("Ka'u II") which had been 
irrigated historically.  The Water Agreement, as amended, provides that KACI 
will supply water to such portion of the Ka'u I Orchards and the Ka'u II 
Orchards (the "Irrigated Orchards") from a well (the "Sisal Well") located on 
property owned by KACI as requested by the Partnership from time to time in 
an amount equal to, at the time of request, the lesser of (i) the amount 
necessary to irrigate the Irrigated Orchards in accordance with prudent 
farming practices or (ii) 95% of the Sisal Well's present operating capacity 
of 1,700 gallons per minute, provided that the amount of water required to be 
provided under clause (ii) will not exceed approximately 643 million gallons 
of water per year.  The cost to the Partnership for receiving such water is a 
pro rata share of the cost incurred by KACI in providing such water.

If the amount of water provided to the Irrigated Orchards by the Sisal Well
becomes insufficient to irrigate the Irrigated Orchards in accordance with
prudent farming practices as determined by the Partnership in good faith, KACI
will be obligated, at the request of the Partnership, to use reasonable efforts
to increase the capacity of the Sisal Well, to drill an alternative well into
the historical source which provides water to the Sisal Well or to obtain water
from other sources in order to provide such amount of water.  If KACI incurs
capital costs in connection with any such actions, the Partnership will be
required to pay its pro rata shares of such costs.  If water is not supplied to
the Partnership as required under the Water Agreement, the Partnership will be
entitled to drill for water on the portion of the Ka'u I Orchards which is held
in fee by the Partnership.  The Water Agreement also provides that, if KACI
sells or otherwise transfers all or any portion of the retained water rights
beneath the Irrigated Orchards or the property containing 

                                       8

<PAGE>

the Sisal Well, the right of the Partnership to receive water under the Water 
Agreement will be reasonably provided for.

On a historical basis, the quantity of water available under the Water 
Agreement to the irrigated portion of the Ka'u I Orchards has been generally 
sufficient to irrigate these orchards in accordance with prudent farming 
practices.  The irrigated portion of the Ka'u II Orchards is expected to need 
greater quantities of water as the orchards mature.  The Managing Partner 
anticipates that the amount of water available under the Water Agreement, as 
amended, will be generally sufficient, assuming average levels of rainfall, 
to irrigate the Irrigated Orchards in accordance with prudent farming 
practices for the next several years.  If no irrigation water is available to 
the Irrigated Orchards, then, based on historical average rainfall levels, 
diminished yields of macadamia nut production can be expected.

EMPLOYEES

The Partnership presently has no employees.  Instead, the employees, officers 
and directors of the Managing Partner perform all management functions for 
the Partnership.  As of December 31, 1997, the Managing Partner employed 
three people.

ITEM 2.  PROPERTIES.

LOCATION.  The Partnership owns or leases approximately 4,027 tree acres of 
macadamia orchards on the island of Hawaii.  The orchards are located in 
three areas: Ka'u, Keaau and Mauna Kea.  The Ka'u area is located in the 
south part of the island about fifty miles from Hilo.  The Keaau area is 
located six miles south of Hilo on the east side of the island, and the 
Mauna Kea area is located three miles north of Hilo on the east side of the 
island.

The majority of macadamia nut trees grown in the State of Hawaii are grown on 
the island of Hawaii in volcanic soil that permits drainage during heavy 
rainfall.  While the orchards are located approximately within a 50-mile 
radius, the climate and other conditions which affect the growing of 
macadamia nuts are different.  These differences are the result of prevailing 
wind patterns and island topography which produce a variety of microclimates 
throughout the island.

                                       9

<PAGE>

                           [Map of STATE OF HAWAII]

AGE AND DENSITY.  The productivity of macadamia nut orchards depends on 
several factors including, among others, the age of the trees, the number of 
trees planted per acre, soil condition, climate, rainfall and/or irrigation.  
The most significant characteristic affecting yields is maturity.  The trees 
in a macadamia nut orchard generally begin to produce nuts at a commercially 
acceptable level at around nine years of age.  Thereafter, nut yields 
increase gradually until the trees reach maturity, after which the nut yield 
remains relatively constant except for variances produced by rainfall, 
cultivation practices, pest infestation and disease.

Macadamia orchards normally reach peak production after fifteen to eighteen 
years of age.  Of the 4,027 tree acres of macadamia orchards owned or leased 
by the Partnership, 2,721 tree acres are over eighteen years of age and 
roughly 1,306 tree acres are under eighteen years of age.  Around 2% of trees 
are lost to various causes each year and are replaced.

RAINFALL.  Macadamia trees grow best in climates with substantial and evenly 
distributed rainfall (or equivalent irrigation) and in soil that provides 
good drainage.  Inadequate rainfall can significantly reduce nut yields, 
while excessive rain without adequate drainage can impede healthy tree 
growth, promote the growth of harmful fungal diseases and produce mudholes 
that require repair of the orchard floor.

                                       10

<PAGE>

At Keaau, normal rainfall is adequate without irrigation, and the volcanic 
soil provides good drainage.  However, short droughts and occasional flooding 
have occurred.  At Mauna Kea, normal rainfall is adequate without irrigation 
and the volcanic soil provides adequate drainage.  In the event of a very 
long drought, production at Keaau and Mauna Kea might be affected.  At Ka'u, 
located on the drier side of the island, the rainfall averages substantially 
less than at Keaau, particularly at the lower elevations.  Approximately 652 
acres at the lower elevations of Ka'u are irrigated to provide for additional 
water when required.  Under extremely dry conditions at Ka'u, such as a 
prolonged drought, irrigation is not sufficient, and production will be 
affected negatively.

At the time of the conveyance of these orchards to the Partnership, Mauna Loa 
and KACI reserved the water rights to the land underlying the orchards.  To 
supply water to that portion of the orchards located at Ka'u which had been 
irrigated historically, KACI and the Partnership entered into a water 
agreement whereby KACI agreed to supply water to the Partnership from a well 
which is on property retained by KACI to irrigate this property.  The water 
agreement has been amended to provide for water to be supplied for irrigation 
purposes to the portion of the October 1989 Ka'u Orchards which have 
historically been irrigated.

ORCHARDS.  The following table lists each of the orchards, the year acquired, 
gross and tree acres, tenure, and lease rents:

<TABLE>
<CAPTION>
                                           GROSS       TREE                              LEASE        MIN. RENT
      ORCHARD               ACQUIRED       ACRES       ACRES         TENURE           EXPIRATION      PER ANNUM
---------------------      ----------    --------    --------    ---------------      ----------      ---------
<S>                        <C>            <C>         <C>        <C>                      <C>        <C>
Keaau I                     June 1986      1688        1467       Fee simple
Ka'u I                      June 1986       579         456       Fee simple
   "                        June 1986       700         500        Leasehold (1)           2019        $ 10,500
Ka'u Green Shoe I           Dec. 1986       546         266        Leasehold (1)           2019        $  5,586
Keaau II                    Oct. 1989       251         220       Fee simple
Ka'u II                     Oct. 1989       528         327        Leasehold (2)           2034        $ 32,702
  "                         Oct. 1989       271         175        Leasehold (1)           2028        $ 35,898
  "                         Oct. 1989        30          26        Leasehold (3)           2029        $  1,020
  "                         Oct. 1989       205         137        Leasehold (1)(4)        1995        $ 12,757
  "                         Oct. 1989       390          49        Leasehold (1)(4)        1999        $  5,828
Mauna Kea                   Oct. 1989       528         326        Leasehold (2)           2034        $ 32,560
Keaau Lot 10               Sept. 1991        88          78       Fee simple
                                        -------     -------
  Total acres                              5804        4027

</TABLE>

(1) Lease of land only; trees may be removed at termination of lease.
(2) Lease of land only; lessor may purchase trees from lessee at any time after
      June 30, 2019.
(3) Lease of land; trees revert to lessor upon termination of lease.
(4) The lease terms provide for renewal options of 36 years and 32 years for the
    leases expiring in 1995 and in 1999, respectively, subject to completion
    of a preliminary county subdivision approval of such leased property prior
    to July 1, 1992.  Mauna Loa and KACI met this deadline and received final
    subdivision approval in January 1995.  The lessor is now completing the
    documentation for the lease renewal.

                                       11
<PAGE>

For certain additional information concerning farming leases, see Item 13, 
page 40.

In addition to the minimum annual lease payment amount, all the leases 
require the Partnership to pay various expenses with respect to the leased 
premises as well as an additional rental payment based on the market price 
per pound of macadamia nuts sold in Hawaii.

With respect to the Ka'u Green Shoe I Orchard, the lease requires the 
Partnership to pay KACI, the seller and lessor, additional rent equal to 100% 
of any year's cash flow generated by such orchard in excess of a target level 
of $507,000 until the aggregate amount paid equals 150% of the aggregate 
amount of the stabilization payments previously received by the Partnership. 
Thereafter, the Partnership is required, with respect to any year prior to 
the expiration of the lease, to pay as additional rent, 50% of the cash flow 
generated by such orchard for such year in excess of a target level of 
$507,000 of cash flow.

CERTAIN INFORMATION REGARDING LEASES.  The 715 tree acres comprising the Ka'u 
II Orchards are situated on approximately 1,424 actual acres of land.  Such 
1,424 acres of land are located on larger tracts of land which cover an 
aggregate of approximately 10,358 acres.  Under a Hawaii county subdivision 
ordinance, in order to transfer or lease a discrete portion of a tract if the 
entire tract is not being transferred or leased, certain government approvals 
must be obtained.  Because such approvals were not obtained prior to the 
consummation of the acquisition of the Ka'u II Orchards in 1989 with respect 
to the transfer to the Partnership of leasehold interests relating to only a 
portion of such tracts containing the Ka'u II Orchards, the Partnership 
acquired (i) a lease of an undivided interest in the larger tracts of land 
within which the property relating to the Ka'u II Orchards are located, (ii) 
an undivided interest in the entire leasehold estate relating to the larger 
tracts of land within which a portion of the property relating to the Ka'u II 
Orchards are located and (iii) the entire leasehold estate of the remaining 
portion of the property relating to the Ka'u II Orchards Leasehold Interest.  
The acquisition of such interests by the Partnership did not require any 
government approvals.  Mauna Loa and the KACI agreed that they would use all 
reasonable efforts to obtain preliminary county subdivision approval for the 
larger tracts of land prior to July 1, 1992.  Mauna Loa and KACI met this 
deadline and received final subdivision approval in January 1995.  Upon 
obtaining all necessary approvals to partition such larger tracts, the 
Partnership will be required to revest in Mauna Loa and KACI the 
Partnership's undivided leasehold interest in the 8,934 additional acres not 
related to the land upon which the Ka'u II Orchards are located, at which 
time the Partnership's undivided leasehold interest in the remaining portions 
of such larger tracts will be converted to a leasehold interest of the 
entirety of such remaining portions. That work is proceeding.

ITEM 3. LEGAL PROCEEDINGS.

On November 6, 1997, the Partnership announced a proposed merger with C. 
Brewer Homes, Inc. ("Homes").  Waterside Partners, a limited partner of the 
Partnership, filed a complaint on January 5, 1998 in the Delaware Chancery 
Court asking for an injunction forbidding the merger from proceeding (C.A. 
No. 16121-NC).  The suit was brought against the Partnership, Resources, 
Homes, CBCL, and the five directors of Resources.  The complaint seeks an 
injunction, damages, and attorneys' fees and alleges, among other things, 
that the directors of Resources breached their fiduciary duties in approving 
the merger because their primary motive allegedly was to salvage investments 
in Homes by stockholders of Buyco rather than to advance the 

                                       12
<PAGE>

interest of unitholders in the Partnership, and that Homes aided and abetted 
such violations of fiduciary duties by entering into the merger agreement.  
The complaint also alleges that the exchange ratio is unfair to the 
Partnership.  The Partnership and Homes believe that the suit in entirely 
without merit, and will vigorously defend it.

ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.

No matters were submitted during the fourth quarter of the fiscal year 
covered by this report to a vote of security holders.



                                    PART II

ITEM 5.  MARKET FOR REGISTRANT'S CLASS A UNITS AND RELATED UNITHOLDER MATTERS.

The Partnership's Class A Depositary Units are listed for trading on the New 
York Stock Exchange (symbol = NUT).  There were 1925 registered holders Class 
A Depositary Units on December 31, 1997.

Distributions declared and high and low sales prices of the Class A 
Depositary Units, based on New York Stock Exchange daily composite 
transactions, are shown in the table below:

<TABLE>
<CAPTION>
--------------------------------------------------------------
                        Distribution    High        Low
--------------------------------------------------------------
<S>                     <C>             <C>         <C>
   1997:  4th Quarter    $0.0750         4  3/8     3  1/2
          3rd Quarter     0.0750         4  1/4     3  11/16
          2nd Quarter     0.0750         4  1/8     3  5/8
          1st Quarter     0.0750         4  5/8     3  1/8

   1996:  4th Quarter    $0.0500         4  1/8     2  3/4
          3rd Quarter     0.0500         3          2  1/2
          2nd Quarter     0.0500         2  7/8     2  1/2
          1st Quarter     0.0500         2  3/4     2  3/8
</TABLE>

                                       13

<PAGE>


ITEM 6.  SELECTED FINANCIAL DATA.
         (In thousands, except per pound and per unit data)


<TABLE>
<CAPTION>

                                               1997          1996           1995           1994           1993
                                               ----          ----           ----           ----           ----
<S>                                         <C>             <C>            <C>            <C>           <C>
Financial:
    Total revenue                            $  12,128      $  13,216      $  10,590      $  10,107     $  10,247
    Net cash provided by
     operating activities (1)                    4,613          2,062          3,370          1,568         2,705
    Net income                                  15,581          3,033          1,192            486         1,512
    Distributions declared                       2,273          1,515          1,515          2,273         3,030
    Total working capital                        5,213          4,342          1,235            219          (660)
    Total assets                                66,727         65,953         64,455         67,544        70,536
    Long-term debt                                   -              -              -            264           321
    Total partners' capital                     60,965         47,656         46,138         46,461        48,248
    Class A limited partners' capital           60,355         47,179         45,676         45,996        47,765
    Net cash flow (2)                            3,435          4,635          2,793          3,206         4,392
   
Operations (3):
Macadamia nuts harvested (lbs.) (4)             20,315         22,110         18,820         18,943        17,914
    Net price $/lb. (4)(5)                   $  0.5970      $  0.5977      $  0.5627      $  0.5363     $  0.5932
   
Per Class A Unit (6):
    Net income before tax credit             $    0.24      $    0.40      $    0.16      $    0.02     $    0.13
    Net income                                    2.06           0.40           0.16           0.06          0.20
    Net cash flow                                 0.45           0.61           0.37           0.42          0.58
    Distributions                                 0.30           0.20           0.20           0.30          0.40
    Partners' capital                             8.05           6.29           6.09           6.13          6.37
</TABLE>

(1) See "Statement of Cash Flows" in the financial statements for method of   
    calculation.
(2) See Footnote 5 in the notes to financial statements for method of 
    calculation.
(3) During all periods presented there were 4,027 acres of trees harvested.
(4) Wet-in-shell at 25% moisture.
(5) Weighted average for all orchards.
(6) 7,500,000 Class A Units were issued and outstanding for all periods 
    presented.

                                       14

<PAGE>

ITEM 7   MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
           CONDITITION AND RESULTS OF OPERATIONS

This discussion should be read in conjunction with the financial statements 
and the related notes included elsewhere in this report.

RESULTS OF OPERATIONS -- 1997, 1996 AND 1995

PRODUCTION AND YIELDS

Production and yield data for the seven orchards are summarized below
(expressed in wet-in-shell pounds at 25% moisture):

<TABLE>
<CAPTION>
                                                                      Average Yield per Acre
                                                          1997     ---------------------------
     Orchard                 Acquired      Acreage     Production    1997      1996      1995
------------------------     --------      -------    -----------   ------    ------    ------
<S>                         <C>            <C>        <C>           <C>       <C>       <C>
Keaau I                      June 1986      1,467      6,179,000     4,212     5,104     4,013
Keaau II                     Oct. 1989        220        591,000     2,686     3,513     2,959
Keaau Lot 10                Sept. 1991         78        277,000     3,551     3,884     3,449
Ka'u I                       June 1986        956      5,897,000     6,168     7,029     6,960
Ka'u Green Shoe I            Dec. 1986        266      2,292,000     8,617     6,063     5,229
Ka'u II                      Oct. 1989        714      4,103,000     5,746     4,829     4,410
Mauna Kea                    Oct. 1989        326        976,000     2,994     5,420     2,503
                                           ------     ----------
  Totals (except yields
    which are averages)                     4,027     20,315,000     5,045     5,490     4,673
                                           ------     ----------
                                           ------     ----------
</TABLE>


For 1997, yields were down 18% for the combined Keaau orchards and down 55% 
for Mauna Kea compared to 1996.  This was partly the result of high winds 
that hit the Hilo side of the island of Hawaii in February 1997 causing a 
loss of 5,381 trees, resulting in reduced production.  Clean-up and 
replanting expenses were approximately $275,000.  There was no insurance 
recovery because losses were not in excess of the deductible. The high yields 
at Ka'u Green Shoe I and Ka'u II for 1997 are the result of a carryover of 
the 1996 fall/winter crop into January 1997, along with the fall/winter crop 
harvested at the end of 1997. Although from two different natural crop years 
(the natural crop year being from July 1 to June 30), the production is 
reported in the same calendar year for accounting purposes.

Yields in 1996 were much higher than in 1995 at all locations due to 
unusually good weather in 1996, which saw very good rainfall levels at Ka'u 
but without excessive rainfall at the normally much wetter Keaau and Mauna 
Kea locations. The high yield at Mauna Kea for 1996 is partly the result of a 
late winter crop harvested at the beginning of 1996 and the fall crop of 1996 
being completed before the end of the calendar year.  Again, two production 
seasons occurred in the same calendar year.

The Ka'u Green Shoe I orchard and the Mauna Kea orchard are not yet fully 
mature.  As a result, the yields from these orchards are expected to be lower 
on average over the next few years than for the Partnership's mature 
orchards. At full maturity under favorable growing conditions, a macadamia 
orchard can produce between 5,500 and 7,500 WIS pounds of macadamia nuts per 
acre each year at Ka'u and between 4,000 and 6,000 WIS pounds of macadamia 
nuts per acre 

                                       15
<PAGE>

each year at Keaau.  No trees have reached full maturity in the Mauna Kea 
area, but we expect that production at maturity at the Mauna Kea orchard will 
approximate Keaau levels.

REVENUE

Macadamia nut revenues depend on the number of producing acres, yields per 
acre and the nut purchase price.  The impact of these factors is summarized 
in the following table:

<TABLE>
<CAPTION>
                                                                     1997      1996
                                                                     over      over
                                     1997       1996       1995      1996      1995
                                   -------    -------     ------    ------    ------
<S>                               <C>         <C>        <C>        <C>      <C>
Trees acres harvested                4,027      4,027      4,027      -         -
Average yield (WIS lbs./acre)        5,045      5,490      4,673     - 8%     + 17%
                                   -------    -------     ------
Nuts harvested (000's WIS lbs.)     20,315     22,110     18,820     - 8%     + 17%
Nut price ($/WIS lbs. @ 25%)        0.5970     0.5977     0.5627      -       +  6%
                                   -------    -------     ------
Gross nut sales ($000's)            12,128     13,216     10,590     - 8%     + 25%
                                   -------    -------     ------
                                   -------    -------     ------
</TABLE>

All of the Partnership nut production is sold under long-term contracts to 
Mauna Loa Macadamia Nut Corporation ("Mauna Loa").  The price for these nuts 
is based 50% on the two-year trailing average of USDA published macadamia nut 
prices and 50% on a "netback component".  The netback component is determined 
by subtracting from Mauna Loa's gross revenues from the sale of macadamia 
products (i) allocable processing, packaging, marketing, selling and 
advertising costs and (ii) a 20% capital charge on the difference between 
those aggregate gross revenues and aggregate allocable costs.

The following table sets forth the manner in which the nut purchase price per 
pound was determined for 1997, 1996 and 1995 ($/lb.):

<TABLE>
<CAPTION>
                                                 1997           1996           1995
                                               -------        -------        -------
<S>                                            <C>            <C>            <C>
USDA price - two years prior (a)                0.6413         0.6391         0.6399
USDA price - one year prior (a)                 0.6886         0.6413         0.6391
                                               -------        -------        -------
USDA price - two year trailing average          0.6650         0.6402         0.6395
                                               -------        -------        -------
                                               -------        -------        -------
Gross revenues                                  2.1673         2.0544         2.2057
Less allocable processing, packaging,
  marketing, sales and advertising costs        1.5150         1.3692         1.6063
Less 20% capital charge                         0.1305         0.1370         0.1199
                                               -------        -------        -------
Net-back component                              0.5218         0.5482         0.4795
                                               -------        -------        -------
                                               -------        -------        -------
USDA price - two year trailing average          0.6650         0.6402         0.6395
Net-back component                              0.5218         0.5482         0.4795
                                               -------        -------        -------
Average of USDA two year trailing
  average price and net-back component          0.5934         0.5942         0.5595
Plus Hawaii general excise tax (0.5%)           0.0030         0.0030         0.0028
                                               -------        -------        -------
Net purchase price (b)                          0.5964         0.5972         0.5623
                                               -------        -------        -------
                                               -------        -------        -------
</TABLE>

                                       16

<PAGE>

(a) Mauna Loa's own purchases comprise a substantial portion of nut purchases 
    reported to the USDA.  Therefore, the USDA price component of the 
    purchase price is, to a substantial degree, the average price that Mauna 
    Loa has paid to purchase macadamia nuts from the Partnership and from 
    third parties during the previous two years.

(b) The nut purchase contract covering nut production from the 78 acre Keaau 
    Lot 10 orchard acquired in September 1991 defines the "two-year trailing 
    average" provision slightly differently from the other nut purchase 
    contracts, and thus, results in a slightly different nut price.  This 
    orchard accounts for less than 2% of the Partnership's nut production.

The USDA published price for the 1996-97 crop year was $0.7125 per pound (WIS 
at 25% moisture), which is 3.5% higher than in 1995-96 and 11.1% higher than 
in 1994-95.  The USDA has estimated that the 1997-98 crop year price will be 
the same at $0.7125 per pound (WIS at 25% moisture).  The two-year trailing 
average USDA component of the Partnership's 1998 nut price formula will 
increase by 5.4% to $0.7006 per pound.

The 1997 average nut price of $.5970 per pound was nearly the same as the price
for 1996.  Although the USDA trailing average increased by $.0248, the netback
component decreased by $.0264.  This decrease is attributable to a 10% increase
in Mauna Loa's processing costs and a 13% increase in marketing costs.  Mauna
Loa's revenues increased by 6%, but not enough to offset the higher expenses.

The average 1996 nut price of $0.5977 per pound was $0.0350 higher than in 1995
as a result of an improved netback component.  That improvement primarily
resulted from an increase in pounds processed, labor savings from factory
capital improvements and changes in sales mix.

COST OF GOODS SOLD

Agricultural unit costs depend on the operating expenses required to maintain
the orchards and to harvest the crop as well as on the quantity of nuts
actually harvested.

The Partnership's unit costs (expressed in dollars per wet-in-shell pound at
25% moisture), which are calculated by dividing all agricultural costs for each
orchard (including lease rent, property tax and tree insurance) by the number
of pounds of macadamia nuts produced by that orchard, are summarized below
($/lb.):

<TABLE>
<CAPTION>
                                                    Cost per pound
                                        ---------------------------------------
      Orchard            Acquired         1997            1996           1995
-------------------   --------------    ---------      ---------      ---------
<S>                      <C>             <C>            <C>            <C>
Keaau I                  June 1986        0.4972         0.4374         0.4859
Keaau II                 Oct. 1989        0.6385         0.5170         0.5968
Keaau Lot 10            Sept. 1991        0.3145         0.2662         0.3318
Ka'u I                   June 1986        0.4429         0.3992         0.3720
Ka'u Green Shoe I        Dec. 1986        0.3881         0.3115         0.3104
Ka'u II                  Oct. 1989        0.3819         0.4089         0.4294
Mauna Kea                Oct. 1989        0.8059         0.5468         1.1091


All Orchards                              0.4623         0.4192         0.4519

</TABLE>

                                       17
<PAGE>

Total production costs charged to the income statement increased by $238,000 
in 1997 and by 10% in cost per pound.  The higher production costs in 1997 
are partly due to the additional percentage rent of $297,000 incurred on the 
Ka'u Green Shoe I lease.  The 1997 cost per pound of $0.4623 is 2% below the 
average cost for the past five years.  Production costs in 1996 were higher 
than 1995 by $763,000 due primarily to increased production, which increases 
harvesting and husking costs, and to wetter weather in 1996.  The higher 1996 
volume also reduced the 1996 cost per pound by 7% compared to 1995.

GENERAL AND ADMINISTRATIVE COSTS

General and administrative expenses are comprised of reimbursements to the 
Managing Partner (primarily for compensation, directors' fees and liability 
insurance), accounting and reporting costs and the management fee.  These 
costs in 1997 were $47,000 higher than in 1996 mostly due to the timing of 
tax and accounting services billed before year-end.  The management fee was 
$75,000 for 1997, $113,000 for 1996 and none for 1995.  General and 
administrative costs were lower in 1995 due primarily to the absence of the 
management fee.

INTEREST INCOME AND EXPENSE

The Partnership funds its working capital need through funds on hand and, 
when needed, from short-term borrowings, generating interest expense in the 
process. Net interest income or expense, therefore, is partly a function of 
any balances carried over from the prior year, the amounts and timing of cash 
generated and distributions paid to investors in the current years, as well 
as the current level of interest rates.  Throughout 1997 the Partnership had 
cash on hand, earned $171,000 in interest income (net of line of credit 
fees), and incurred no interest expense.  Interest income was $33,000 in 
1996, which was offset by interest expense and line of credit fees totaling 
$33,000.  In 1995, net interest expense was $31,000.

INFLATION AND TAXES

In general, prices paid to macadamia nut farmers fluctuate independently of 
inflation.  Macadamia nut prices are influenced strongly by prices for 
finished macadamia products, which depend on competition and consumer 
acceptance. Farming costs, particularly labor and materials, and general and 
administrative costs do generally reflect inflationary trends.

In July 1997, Congress passed the Taxpayer Relief Act of 1997, which enables 
the Partnership to permanently extend its partnership tax status, subject to 
a 3.5% tax on gross income beginning in 1998.  This new tax on gross income 
will have a slight negative impact upon the Partnership's profit and cash 
flow compared to current and past years, but will have a positive impact 
compared to being taxed as a corporation.  As a result of the Partnership's 
decision to elect continued partnership tax status, the Partnership 
eliminated most of its deferred tax liability account and recognized a 
deferred tax credit of $13.8 million in the third quarter of 1997.

FOURTH QUARTER 1997 COMPARED TO FOURTH QUARTER 1996

Production in the fourth quarter 1997 was 8% higher than the fourth quarter 
1996, and the final nut price for both years was nearly the same.  However, 
revenue was 2% lower in 1997.  This variation occurred because the final 
price to be paid for the entire year's production is not known until early in 
the following year after Mauna Loa's books have been closed and audited.  For 

                                       18
<PAGE>

interim payment and reporting purposes the Partnership and Mauna Loa estimate 
this nut price based on Mauna Loa's current processing and marketing plan. 
When Mauna Loa's books have been closed and audited, the final price is 
applied to the Partnership's fourth quarter sales, and an adjustment is made 
in the fourth quarter to apply the revised final price to all nuts sold 
earlier in that year as well.  Although the nut purchase price changed less 
than 1% from 1996 to 1997, the estimated nut purchase price for the first 
nine months of 1997 was over-estimated at $0.6115, and for the first nine 
months of 1996 it was under-estimated at $0.5564.  Therefore, in the fourth 
quarter 1997, revenues were adjusted downward by $129,000, and in the fourth 
quarter 1996 revenues were adjusted upward by $471,000. 

In addition, the cost of goods for the fourth quarter 1997 was 35% higher 
than the fourth quarter 1996 on similar production.  There are two main 
reasons for this variation:

1. The lease at Ka'u Green Shoe I required additional percentage rent to be 
   paid based on excess cash flow from that orchard.  The additional rent 
   was $297,000 for 1997 and $53,000 for 1996.  The 1997 winter production 
   from this orchard surpassed our estimates, and 35% of the year's production 
   occurred in December.

2. Production costs, like revenues, are also estimated for interim reporting 
   purposes.  The 1997 farming costs were estimated fairly accurately.  The 
   estimates for 1996 were high, and a $422,000 credit to farming costs was 
   recorded in the fourth quarter 1996 to correct the first nine months' 
   costs.

PROPOSED MERGER

In December 1997, the Partnership entered into a merger agreement with C. 
Brewer Homes, Inc. ("Homes") (Nasdaq: CBHI).  The Partnership filed with the 
Securities and Exchange Commission on February 13, 1998, a registration 
statement in connection with this merger.  The merger is subject to approval 
by the unitholders of the Partnership and the shareholders of Homes.  In 
addition, the unitholders of the Partnership will vote on certain proposed 
changes to the Agreement of Limited Partnership of Mauna Loa Macadamia 
Partners, L.P. (the "Partnership Agreement").  Effectuation of the merger and 
related changes to the Partnership Agreement would significantly expand the 
Partnership's operations and result in changes affecting (among other things) 
management fees, incentive fees, and distribution policies.

SEASONALITY, CAPITAL RESOURCES AND LIQUIDITY

Macadamia nut farming is seasonal, with production peaking late in the fall. 
However, farming operations continue year round. As a result, additional 
working capital is required for much of the year. The Partnership meets its 
working capital needs with cash on hand, and when necessary, through 
short-term borrowings under a $4.0 million revolving line of credit. The line 
was extended for one year on June 1, 1996, again on June 1, 1997, and may be 
extended for additional one-year intervals upon the payment of extension 
fees.  If the Partnership should merge with another company, this facility 
will expire and all outstanding principal and interest shall be due and 
payable at the time of the merger.

The Partnership had a cash balance of $2.9 million at year-end 1997, and 
there were no line of credit drawings during 1997.  Line of credit borrowings 
were $430,000 in 1996 and $825,000 in 1997.  It is the opinion of management 
that the Partnership has adequate cash on hand and 

                                       19
<PAGE>

borrowing capacity available to meet anticipated working capital needs for 
operations as presently conducted.

RECENT DEVELOPMENTS

Currently the island of Hawaii is experiencing a severe drought.  Experts 
attribute this condition to the effects of the El Nino weather pattern. The 
National Weather Service has informed Hawaii county officials that normal 
weather may not return to the island of Hawaii until April or May.  Rainfall 
in the Keaau area for January and February totaled 1.8 inches, less than 10% 
of normal, and rainfall in Ka'u for the same two months has been less than 
0.5 inches, which is 5% of normal.  While it is impossible to predict at this 
time, a prolonged drought could have a negative impact on the 1998 and 1999 
production volumes.

NEW ACCOUNTING STANDARDS

REPORTING COMPREHENSIVE INCOME

In June 1997, the FASB issued SFAS No. 130, REPORTING COMPREHENSIVE INCOME, 
the provisions of which are effective for fiscal periods beginning after 
December 15, 1997.  The Statement requires that all items that are required 
to be recognized under accounting standards as components of comprehensive 
income be reported in a financial statement that is displayed with the same 
prominence as other financial statements. Adoption of this pronouncement is 
not expected to have a material effect on the Partnership's presentation of 
its results of operations.

SEGMENT INFORMATION

In June 1997, the FASB issued SFAS No. 131, DISCLOSURES ABOUT SEGMENTS OF AN 
ENTERPRISE AND RELATED INFORMATION, the provisions of which are effective for 
fiscal years beginning after December 15, 1997.  This Statement establishes 
standards for reporting information about operating segments in annual 
financial statements and requires selected information about operating 
segments in interim financial reports issued to shareholders.  It also 
establishes standards for related disclosures about products and services, 
geographic areas and major customers.  The Partnership has not determined the 
impact that the adoption of this new accounting standard will have on its 
financial statement disclosures.

                                       20


<PAGE>
ITEM 8.  FINANCIAL STATEMENTS, SUPPLEMENTARY DATA AND SCHEDULES.


                         INDEX TO FINANCIAL STATEMENTS

<TABLE>
<CAPTION>
                                                                          Page
                                                                         Number
                                                                         ------
<S>                                                                      <C>
Report of Independent Accountants                                          22

Balance Sheets, December 31, 1997 and 1996                                 23

Income Statements, for the Years Ended December 31, 1997, 1996 and 1995    24

Statements of Partners' Capital, for the Years Ended December 31, 1997,
     1996 and 1995                                                         25

Statements of Cash Flows for the Years Ended December 31, 1997,
     1996 and 1995                                                         26

Notes to Financial Statements, Including Supplementary Data                27
</TABLE>



                                       21


<PAGE>


                       REPORT OF INDEPENDENT ACCOUNTANTS

Limited Partners
Mauna Loa Macadamia Partners, L.P.


We have audited the accompanying balance sheets of Mauna Loa Macadamia 
Partners, L.P. as of December 31, 1997 and 1996 and the related statements of 
income, partners' capital and cash flows for each of the three years in the 
period ended December 31, 1997.  These financial statements are the 
responsibility of the Partnership's management.  Our responsibility is to 
express an opinion on these financial statements based on our audits.

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

In our opinion, the financial statements referred to above present fairly, in 
all material respects, the financial position of Mauna Loa Macadamia 
Partners, L.P. as of December 31, 1997 and 1996 and the results of operations 
and its cash flows for each of the three years in the period ended December 
31, 1997 in conformity with generally accepted accounting principles.


COOPERS & LYBRAND L.L.P.



Honolulu, Hawaii
February 12, 1998



                                      22

<PAGE>



                      MAUNA LOA MACADAMIA PARTNERS, L.P.
                                BALANCE SHEETS
                                (IN THOUSANDS)


<TABLE>
<CAPTION>
                                                              December 31,
                                                         ----------------------
                                                           1997           1996
                                                         -------         -------
<S>                                                      <C>             <C>
ASSETS
Current Assets
  Cash and cash equivalents                              $  2,914       $    676
  Accounts receivable from related party                    6,809          6,899
  Prepaid expenses and other assets                            20             82
                                                         --------       --------
    Total current assets                                    9,743          7,657

Land, orchards and equipment (net)                         56,692         58,296
Capitalized acquisition costs                                 292            -  
                                                         --------       --------
Total assets                                             $ 66,727       $ 65,953
                                                         --------       --------
                                                         --------       --------

LIABILITIES AND PARTNERS' CAPITAL
Current liabilities
  Accounts payable to related parties                    $  3,681       $  2,623
  Distribution payable                                        568            379
  Other current and accrued liabilities                       281            313
                                                         --------       --------
    Total current liabilities                               4,530          3,315

Deferred income tax expense                                 1,232         14,982

Commitments
  Partners' capital
    General partners                                          610            477
    Limited partners
      Class A (11,625 units authorized and 7,500 units
        issued and outstanding; no par or assigned value)  60,355         47,179
                                                         --------       --------
        Total partners' capital                            60,965         47,656
                                                         --------       --------

Total liabilities and partners' capital                  $ 66,727       $ 65,953
                                                         --------       --------
                                                         --------       --------
</TABLE>

--------------------------------------------------------------------------------
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.

                                       23

<PAGE>



                      MAUNA LOA MACADAMIA PARTNERS, L.P.
                               INCOME STATEMENTS
                     (IN THOUSANDS, EXCEPT PER UNIT DATA)



<TABLE>
<CAPTION>
                                                                    1997           1996         1995
                                                                 ---------      ---------     ---------
<S>                                                              <C>            <C>           <C>
Macadamia nut sales to related party                             $  12,128      $  13,216     $  10,590
                                                               
Cost of goods sold                                             
  Costs expensed under farming contracts with related parties        7,301          7,316         6,675
  Depreciation                                                       1,604          1,602         1,601
  Other                                                                602            351           230
                                                                 ---------      ---------     ---------
      Total cost of goods sold                                       9,507          9,269         8,506
                                                                 ---------      ---------     ---------
      Gross profit                                                   2,621          3,947         2,084
                                                               
General and administrative expenses                            
  Costs expensed under management contract                     
    with related party                                                 503            493           424
  Other                                                                458            421           437
                                                                 ---------      ---------     ---------
      Operating income                                               1,660          3,033         1,223
Interest income (expense)                                              171            -             (31)
                                                                 ---------      ---------     ---------
      Income before deferred tax credit                              1,831          3,033         1,192
Deferred tax credit                                                 13,750            -             -
                                                                 ---------      ---------     ---------
      Net income                                                 $  15,581       $  3,033      $  1,192
                                                                 ---------      ---------     ---------
                                                                 ---------      ---------     ---------
                                                              
--------------------------------------------------------------------------------------------------------
                                                              
Net cash flow (as defined in the Partnership Agreement)           $  3,435       $  4,635      $  2,793
                                                                 ---------      ---------     ---------
                                                                 ---------      ---------     ---------
--------------------------------------------------------------------------------------------------------
                                                              
Net income per Class A Unit                                      $  2.06        $  0.40        $  0.16
                                                                 ---------      ---------     ---------
                                                                 ---------      ---------     ---------

Net cash flow per Class A Unit                                   $  0.45        $  0.61        $  0.37
                                                                 ---------      ---------     ---------
                                                                 ---------      ---------     ---------

Cash distributions per Class A Unit                              $  0.30        $  0.20        $  0.20
                                                                 ---------      ---------     ---------
                                                                 ---------      ---------     ---------

Class A Units outstanding                                          7,500          7,500         7,500
                                                                 ---------      ---------     ---------
                                                                 ---------      ---------     ---------
--------------------------------------------------------------------------------------------------------
</TABLE>
                                               
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.

                                                              
                                                              
                                                    24  
                                                              
<PAGE>

                                         
                        MAUNA LOA MACADAMIA PARTNERS, L.P.
                         STATEMENTS OF PARTNERS' CAPITAL
                                 (IN THOUSANDS)
<TABLE>
<CAPTION>

                                                             1997         1996         1995
                                                          ---------     ---------   ---------
<S>                                                      <C>           <C>         <C>

Partners' capital at beginning of period:

 General partners                                         $     477     $    462    $     465
 Class A limited partners                                    47,179       45,676       45,996
                                                          ---------     --------    ---------
                                                      
                                                             47,656       46,138       46,461
                                                          ---------     --------    ---------

Allocation of net income:

  General partners                                              156           30           12
  Class A limited partners                                   15,426        3,003        1,180
                                                          ---------     --------    ---------

                                                             15,582        3,033        1,192
                                                          ---------     --------    ---------
Cash distributions:

  General partners                                               23           15           15
  Class A limited partners                                    2,250        1,500        1,500
                                                          ---------     --------    ---------

                                                              2,273        1,515        1,515
                                                          ---------     --------    ---------

                                     
Partners' capital at end of period:

  General partners                                              610          477          462
  Class A limited partners                                   60,355       47,179       45,676
                                                          ---------     --------    ---------
                                     
                                                          $  60,965     $ 47,656    $  46,138
                                                          ---------     --------    ---------
                                                          ---------     --------    ---------
</TABLE>
-------------------------------------------------------------------------------

SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.

                                                    25  

<PAGE>
                       MAUNA LOA MACADAMIA PARTNERS, L.P.
                           STATEMENTS OF CASH FLOWS
                                (IN THOUSANDS)
                                 
<TABLE>
<CAPTION>

                                                             1997         1996         1995
                                                          ---------     ---------   ---------
<S>                                                      <C>           <C>         <C>

Cash flows from operating activities:
 Cash received from macadamia nut sales                  $  12,218       10,412     12,490
 Cash paid under farming and management contracts           (6,746)      (7,641)    (8,428)
 Cash paid to other suppliers                               (1,030)        (704)      (655)
 Interest received (paid), net                                 171           (5)       (37)
                                                           -------       -------    -------
Net cash provided by operating activities                    4,613        2,062      3,370
                                                           -------       -------    -------

Cash flows from investing activities:
 Capital acquisition costs expenditures                       (292)           -          -
 Capital expenditures                                            -          (23)         -
                                                           -------       -------    -------
                                                            
Net cash used in investing activities                         (292)         (23)         -
                                                           -------       -------    -------


Cash flows from financing activities:
 Line of credit repayments                                       -            -     (1,407)
 Principal payments of mortgage note                             -          (265)      (59)
 Distributions paid                                         (2,083)       (1,519)   (1,511)
 Other                                                           -             -        (9)
                                                           -------       -------    -------
Net cash used in financing activities                       (2,083)       (1,784)   (2,986)
                                                           -------       -------    -------
Net increase in cash                                         2,238           255       384
 Cash at beginning of period                                   676           421        37
                                                           -------       -------    -------
 Cash at end of period                                    $  2,914           676       421
                                                           -------       -------    -------
                                                           -------       -------    -------

Reconciliation of net income to net cash
 provided by operating activities:
 Net income                                               $ 15,581         3,033     1,192
 Adjustments to reconcile net income to
  cash provided by operating activities:
   Depreciation and amortization                             1,604         1,602     1,612
   Deferred income tax credit                              (13,750)            -         -
   (Increase) decrease in accounts receivable                   90        (2,804)    1,900
   Increase (decrease) in accounts payable                   1,058           168    (1,329)
   Other                                                        30            63        (5)
                                                           -------       -------    -------
  Total adjustments                                        (10,968)         (971)    2,178
                                                           -------       -------    -------
Net cash provided by operating activities                 $  4,613         2,062     3,370
                                                           -------       -------    -------
                                                           -------       -------    -------
</TABLE>
-------------------------------------------------------------------------------
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.

                                                    26  
<PAGE>

                      MAUNA LOA MACADAMIA PARTNERS, L.P.

                         NOTES TO FINANCIAL STATEMENTS

(1) OPERATIONS AND OWNERSHIP

   Mauna Loa Macadamia Partners, L.P. (the "Partnership") owns 4,027 tree 
acres of macadamia orchards on the Island of Hawaii.  Once the nuts are 
harvested, the Partnership sells them to another entity which processes and 
markets the finished products.
    The Partnership is owned 99% by limited partners and 1% by the managing 
general partner, Mauna Loa Resources Inc. ("Resources").  Resources is a 
subsidiary of Mauna Loa Macadamia Nut Corporation ("Mauna Loa"), which in 
turn is a subsidiary of C. Brewer and Company, Limited ("CBCL"), whose parent 
company is Buyco, Inc. ("Buyco").  Mauna Loa was the Partnership's special 
general partner, with a .01% ownership interest, until December 1997, when it 
assigned its interest as a general partner to Resources and withdrew as a 
special general partner.
    Limited partner interests are represented by Class A Units, which are
evidenced by depositary receipts that trade publicly and are listed on the
New York Stock Exchange.  Mauna Loa Orchards, L.P., an affiliate of the general
partner, held 30,000 Class A Units at December 31, 1996 and 1997.
    Although Mauna Loa and certain of its affiliates formerly 
held Class B Units in the Partnership, all Class B Units were cancelled in 
November 1997 for nominal consideration.  Ownership of Class A Units confers 
no direct or indirect interest in CBCL, Mauna Loa or any of their affiliated 
corporations.

(2) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

    (a)  CASH AND CASH EQUIVALENTS.  Cash and cash equivalents include  
unrestricted demand deposits with banks and all highly liquid deposits with 
an original maturity of less than three months.  The cash equivalents are not 
protected by federal deposit insurance.

    (b)  FINANCIAL INSTRUMENTS.     The fair value of all financial 
instruments approximates the carrying value as the majority of the financial 
instruments have fairly short durations until maturity or the market and risk 
factors associated with the instruments have not changed.    

    (c)  FARMING COSTS.  In accordance with industry practice in Hawaii, 
orchard maintenance and harvesting costs for commercially producing macadamia 
orchards are charged against earnings in the year that the costs are incurred.

    (d)  LAND, ORCHARDS AND EQUIPMENT.  Land, orchards and equipment are 
reported at cost, net of accumulated depreciation and amortization.  Net 
farming costs for any "developing" orchards are capitalized on the balance 
sheet until revenues from that orchard exceed expenses for that orchard (or 
nine years after planting, if earlier).

    Depreciation of orchards and other equipment is reported on a 
straight-line basis over the estimated useful lives of the assets (40 years 
for orchards and between 5 and 12 years for other equipment).  A 5% residual 
value is assumed for orchards.  The macadamia orchards acquired in 1986 
situated on leased land are being amortized on a straight-line basis over the 
terms of the

                                   27

<PAGE>

leases (approximately 33 years from the inception of the Partnership) with no 
residual value assumed.  The macadamia orchards acquired in 1989 situated on 
leased land are being amortized on a straight-line basis over a 40 year 
period (as the terms of these leases exceeds 40 years) with no residual value 
assumed. For income tax reporting, depreciation is calculated under 
accelerated methods.

    (e)  INCOME TAXES.  As the Partnership is not a taxable entity, no 
amounts have been provided for current income taxes.  Rather, the 
Partnership's tax attributes are includable in the tax returns of the 
Partners.  Neither the Partnership's financial reporting income nor the 
distributions to Partners can be used as a substitute for the detailed tax 
calculations which the Partnership mails to each Partner prior to the end of 
March each year for the preceding tax year.
    The Partnership has elected to continue to be taxed as a partnership 
rather than to be taxed as a corporation, subject to a 3.5% tax on gross 
income beginning January 1, 1998.  This election is allowed by the Taxpayer 
Relief Act of 1997, which modifies the Omnibus Budget Reconciliation Act of 
1987 ("OBRA"). OBRA provided that some publicly traded limited partnerships 
were to be taxed as corporations beginning in 1998.  With this election, the 
deferred tax liability was reduced in the third quarter 1997 from $14,982,000 
to $1,232,000, creating a deferred tax credit of $13,750,000.  Deferred tax 
assets and liabilities are recognized for the future tax consequences 
attributable to differences between the projected financial reporting and tax 
reporting basis of assets and liabilities at December 31, 1997.

    (f)  ESTIMATES.  The preparation of financial statements in conformity 
with generally accepted accounting principles requires management to make 
estimates and assumptions that affect the reported amounts of assets and 
liabilities and disclosure of contingent assets and liabilities at the date 
of the financial statements and the reported amounts of revenues and expenses 
during the reporting period.  Actual results could differ from those 
estimates.

    (g) NET INCOME PER CLASS A UNIT.  The Partnership computed net income per 
Class A Unit for all periods presented under the provisions of Statement of 
Financial Accounting Standards No. 128, EARNINGS PER SHARE, which was 
required to be implemented for financial statements for periods ending after 
December 15, 1997.  The adoption of this statement had no impact on the 
Partnership's reported net income per Class A Unit.  Net income per Class A 
Unit is calculated by dividing 99% of Partnership net income by the average 
number of Class A Units outstanding for the period.

(3) RELATED PARTY TRANSACTIONS

    (a) NUT PURCHASE CONTRACTS.  The Partnership is a party to four nut 
purchase contracts with Mauna Loa.  They cover all nuts produced by the 
orchards acquired in June 1986, December 1986, October 1989 and September 
1991, respectively.  The first two contracts run for 20 years, while the 
third contract runs for 30 years and also provides for the exclusion of 
unusable nuts from those purchased by Mauna Loa.  The first three contracts 
are identical in all other material respects.  The fourth contract was 
acquired by assignment with the purchase of the September 1991 orchard and 
expires in 2003.  The fourth contract is similar to the first three 
contracts, but the nut price is calculated on a crop year (July 1 through 
June 30) rather than calendar year basis, which results in a slightly 
different nut price.  All four contracts use a pricing formula based 50% on a 
two-year trailing average of the macadamia nut price published annually by 
the U. S.

                                   28

<PAGE>

Department of Agriculture and 50% on Mauna Loa's "netback component".  The 
netback component is calculated by subtracting Mauna Loa's processing and 
marketing costs per pound and a "capital charge" of 20% from its nut revenues 
per pound.  The nut price paid to the Partnership under the first three nut 
purchase contracts was $0.5623 for 1995, $0.5972 for 1996 and $0.5964 for 
1997.  The average nut price paid to the Partnership under the fourth nut 
price contract was $0.5901 for 1995, $0.6353 for 1996, and $0.6434 for 1997.  

  (b) FARMING CONTRACTS.  The Partnership is a party to four farming 
contracts with two subsidiaries of CBCL, Ka'u Agribusiness Company, Inc. 
("KACI") and Mauna Kea Agribusiness Company, Inc. ("MKACI"), that together 
cover all farming, harvesting and husking activities for the orchards 
acquired in June 1986, December 1986, October 1989 and September 1991, 
respectively.  The first two contracts run for 20 years, while the third 
contract runs for 30 years. The first three contracts are identical in all 
other material respects.  The fourth contract was acquired with the purchase 
of the September 1991 orchard and expires in 2006.     
    The first three contracts provided KACI and MKACI with reimbursement of 
their direct and indirect costs incurred under these contracts as well as a 
farming fee equal to 3% of the Partnership's operating cash flow (as 
defined). The fourth contract was similar to the first three contracts, but 
did not provide the farm manager reimbursement for husking costs, a "capital 
recovery charge" and a farming fee. The reimbursements paid to the two 
farm managers were $6.8 million for 1995, $7.2 million for 1996 and $7.2 
million for 1997. The two farm managers earned a farming fee of $153,000 in 
1996 and $113,000 in 1997.  No farming fee was earned in 1995.
      Each of the farming contracts was amended effective January 1, 1998 to
provide that farming fees would equal two and one-half percent of the
Partnership's gross profits from farming operations, rather than three percent
of the Partnership's operating cash flow attributable to the relevant orchard.
These amendments were made in recognition of the fact that operating cash flow
of the Partnership will change appreciably if a proposed merger is approved
(see Note 10) because its financial results will include the real estate
operations of the acquired company.
    The Partnership is also a party to a water agreement with KACI 
under which KACI agreed to supply water to the Partnership from a well on 
KACI's property for use on the Partnership's irrigated Ka'u orchards.  The 
Partnership's allocated share of the costs of that well totaled $114,000 in 
1995, $79,000 in 1996 and $47,000 in 1997.

    (c)  MANAGEMENT COSTS AND FEE.  The Partnership Agreement provides the 
managing general partner reimbursement of administrative costs (which consist 
primarily of compensation costs, board of directors fees and insurance costs) 
incurred under the agreement as well as a management fee equal to two percent 
of the Partnership's operating cash flow (as defined).   Those reimbursable 
costs totaled $424,000 in 1995, $391,000 in 1996 and $428,000 in 1997.  The 
managing general partner earned a management fee of $102,000 in 1996 and 
$75,000 in 1997.  No management fee was earned in 1995.
     In addition to a management fee, the managing general partner is entitled,
under the existing Partnership Agreement, to receive an annual incentive fee
equal to 0.5% of the aggregate fair market value (as defined) of the Class A
Units for the preceding calendar year provided that net cash flow (as defined)
for the preceding calendar year exceeds specified levels.  No incentive fee was 
earned in 1995, 1996 or 1997.  The incentive fee will be eliminated if a 
proposed merger is consummated (see Note 10).    

                                       29

<PAGE>

    (d) STABILIZATION PAYMENTS.  In December 1986, the Partnership acquired a 
266 acre orchard that was several years younger than its other orchards. 
Because of the relative immaturity of the newer orchard, its productivity 
(and therefore its cash flow) was expected to be correspondingly lower for 
the first several years than for the other older orchards.
    Accordingly, the seller of this orchard (KACI) agreed to make cash
stabilization payments to the Partnership for each year through 1993 in which
the cash flow (as defined) from this orchard fell short of a target cash flow
level of $507,000.  Stabilization payments for a given year were limited to the
lesser of the amount of the shortfall or a maximum payment amount.
    The Partnership accounted for stabilization payments (net of general
excise tax) as a reduction in the cost basis of this orchard.  As a result,
the payments will be reflected in the Partnership's net income ratably through
2019 as a reduction to amortization for this orchard.
    In return, the Partnership is obligated to pay KACI 100% of any year's cash
flow from this orchard in excess of the target cash flow as additional
percentage rent until the aggregate amount of additional percentage rent
equals 150% of the total amount of stabilization payments previously received.
Thereafter, the Partnership is obligated to pay KACI 50% of this orchard's cash
flow in excess of the target cash flow as additional incentive rent. Such
additional percentage rent totaled $54,000 in 1996 and $297,000 for 1997.
No additional percentage rent was payable for 1995.

    (e) CASH FLOW WARRANTY PAYMENTS.  In October 1989, the Partnership acquired
1,040 acres of orchards that were several years younger on average than the
Partnership's other orchards.  Their productivity (and therefore their cash
flow) was expected to be lower for the first several years than for the
Partnership's older orchards.   
      Accordingly, the sellers of these orchards (affiliates of Mauna Loa) 
agreed to make cash flow warranty payments to the Partnership for through 
1994 in which the cash flow (as defined) from these orchards fell short of a 
cash flow target level.  Warranty payments for any year were limited to the 
lesser of the amount of the shortfall or a maximum payment amount.
    The Partnership accounted for cash flow warranty payments as reductions in
the cost basis of the orchards.  As a result, these payments will be reflected
in the Partnership's net income ratably through 2030 as reductions to 
depreciation for these orchards.
    In addition, this agreement provided that Mauna Loa and its affiliates
forego the 1995 farming and management fees to the extent which the cash flow
(as defined) for 1995 from the Ka'u and Mauna Kea orchards acquired in 1989
fell short of a predetermined target level.  As a result of this provision,
no farming or management fee was earned in 1995. 

(4)  INDICATED DISTRIBUTIONS

    As it is impossible to anticipate every future circumstance, there can be no
assurance that Partnership performance will be sufficient to fund distributions
at historical levels.  Distributions are paid approximately forty-five days
after the end of each quarter to investors of record as of the last business
day of that quarter.    
    Because macadamia nut farming is highly seasonal, distributions are 
smoothed to provide a more level payout rate.  The managing general partner 
receives cash distributions in proportion to its ownership percentage in the 
Partnership.

                                       30
<PAGE>

(5) CASH FLOW PERFORMANCE

   Cash flow performance (based on definitions used in the Partnership
Agreement) for the past three years is shown below (000's):

<TABLE>
                                          1997           1996           1995
                                        --------       --------       --------
<S>                                    <C>            <C>            <C>
Gross revenues                         $  12,300      $  13,216      $  10,590
 Less:
  Farming costs                            7,790          7,514          6,905
  Administrative costs                       886            812            861
  Other                                        -              -             31
                                        --------       --------       --------

Operating cash flow                        3,624          4,890          2,793
 Less:
  Farming fee                                113            153              -
  Management fee                              76            102              -
                                        --------       --------       --------

Net cash flow                           $  3,435       $  4,635       $  2,793
                                        --------       --------       --------
                                        --------       --------       --------
</TABLE>


(6) LAND, ORCHARDS AND EQUIPMENT

   Land, orchards and equipment, stated at cost, consisted of the following at
December 31, 1996 and 1997 (000's):
<TABLE>
<CAPTION>
                                                         1997           1996
                                                       -------        -------
    <S>                                                <C>            <C>
    Land                                               $ 8,168        $ 8,168
    Producing orchards                                  64,711         64,711
    Other                                                  335            335
                                                       -------        -------
    Land, orchards and equipment (gross)                73,214         73,214
    Less accumulated depreciation
     and amortization                                   16,522         14,918
                                                       -------        -------
    Land, orchards and equipment (net)                 $56,692        $58,296
                                                       -------        -------
                                                       -------        -------
</TABLE>


(7) SHORT-TERM AND LONG-TERM CREDIT

    The Partnership had a $4.0 million revolving line of credit at December 
31, 1995 for working capital purposes.  The line was extended for one year on 
June 1, 1996, again on June 1, 1997 and may be extended for additional 
one-year intervals upon the payment of extension fees.  If the Partnership 
should merge with another company, this facility will expire and all 
outstanding principal and interest shall be due and payable at the time of 
the merger.  Annual extension fees of $8,000 were paid in June 1995, June 
1996 and June 1997.  A commitment fee of 3/8 of one percent of the unused 
portion is required and borrowings are charged interest at either the bank's 
"base rate" or at the one, two or three month "LIBOR" rate (plus 175 to 200 
basis points) at the Partnership's option.  The line of credit currently 
requires minimum net cash flow (as defined in the Partnership Agreement) of 
$1.6 million per year and minimum net worth levels (before non-cash 
adjustments due to implementation of FAS No. 109) of $40 million.  In 

                                       31


<PAGE>


addition, the line of credit requires a "clean-up" period of at least thirty 
consecutive days during each year.

     The maximum amount borrowed on the line of credit for 1996 was $470,000
with a weighted average interest rate of 8.23%.  There were no drawings
outstanding at December 31, 1996.  No amounts were borrowed during 1997.

   In September 1991, the Partnership borrowed $0.5 million under an eight-year
mortgage loan to acquire a 78 acre macadamia orchard in Keaau. In February
1996, the Partnership paid off the remaining balance of this mortgage loan in
full.  The amount of that payment was $252,000 (including accrued interest).

(8)   INCOME TAXES

   The components of the net deferred tax liability reported on the balance
sheet as of December 31, 1997 and 1996 are as follows (000's):

<TABLE>
<CAPTION>

                                                  1997           1996
                                                --------       --------
<S>                                             <C>            <C>
 Deferred tax liabilities:
  Financial statement bases of land, orchards
   and equipment is greater than tax bases      $   698        $  9,183
 Excess of tax depreciation over
   financial statement depreciation                 534           5,799
                                                --------       --------
                                                $ 1,232        $ 14,982
                                                --------       --------
                                                --------       --------
</TABLE>

As there is no relationship between income before taxes and the deferred income
tax provisions, no reconciliation between statutory tax expense and total
income tax expense is provided.

(9) LEASES

     The Partnership leases the land underlying 1,806 acres of its orchards
under long-term operating leases.  Future minimum lease payments under non-
cancelable leases (exclusive of renewal options) as of December 31, 1997 were
as follows (000's):

<TABLE>
         <S>                              <C>
         1998                             $    137
         1999                                  137
         2000                                  137
         2001                                  137
         2002                                  137
         Later Years                         3,862
                                          --------
                                          $  4,547
                                          --------
                                          --------
</TABLE>

     Each of the above leases also provides for additional lease payments based
on USDA-reported macadamia nut price levels.  Those contingent lease payments
totaled $46,000 in 1995, $52,000 in 1996 and $62,000 in 1997.
     Total lease rent for all operating leases was $165,000 in 1995, $229,000 in
1996 and $487,000 in 1997.

                                       32


<PAGE>

(10)  MERGER PROPOSAL

   In December 1997, the Partnership entered into a merger agreement with C.
Brewer Homes, Inc. ("Homes").  The Partnership filed with the Securities and
Exchange Commission on February 13, 1998, a registration statement in
connection with this merger.  Under the terms of the merger agreement,
shareholders of Homes would receive .667 shares of Mauna Loa Macadamia
Partners, L.P. for each share of Homes.  The merger is expected to result in
the issuance of approximately 5.56 million limited partner units.  The merger
agreement is subject to approval by unitholders of the Partnership and the
shareholders of Homes.  The merger agreement contemplates that the combined
Company will be renamed "Hawaii Land and Farming Company, L.P." and will
continue as a master limited partnership, trading on the New York Stock
Exchange.

(11)  QUARTERLY OPERATING RESULTS (UNAUDITED)

    The following chart summarizes unaudited quarterly operating results for
the years ended December 31, 1997 and 1996 (000's, except per unit data):

<TABLE>
<CAPTION>
                     Net Sales   Gross Profit   Net Income    Net Income (Loss)
                                                (Loss)        per Class A Unit
                     ---------   ------------   ----------    ----------------
<S>                  <C>         <C>            <C>           <C>
  1997:
   1st Quarter       $   1,763   $        521   $      226      $    0.03
   2nd Quarter             476            155           43           0.01
   3rd Quarter           3,081            506       14,099           1.86
   4th Quarter           6,809          1,440        1,214           0.16

  1996:
   1st Quarter       $   1,542   $        189   $    (118)      $   (0.02)
   2nd Quarter             519            118         (56)          (0.01)
   3rd Quarter           4,255            713          527           0.07
   4th Quarter           6,900          2,927        2,680           0.35

</TABLE>

    The macadamia nut drop and therefore macadamia harvesting is highly
seasonal with most production occurring between August and January each year.
As a result, revenues and profits also fluctuate significantly between
quarters.
    Due to these irregular seasons, all farming costs are annualized for
interim reporting purposes. This method has the effect of matching income to
expense by spreading crop costs equally over estimated production, to provide
more meaningful results.


                                       33


<PAGE>


                                   PART III

ITEM 10.  DIRECTORS AND EXECUTIVE OFFICERS OF REGISTRANT

   The Partnership presently has no officers or directors. Instead, the
officers and directors of the Managing Partner perform all management functions
for the Partnership.  Each director of the Managing Partner is elected for a
term of one year and until his successor is duly elected and qualified.  Each
officer of the Managing Partner is elected by the Board of Directors of the
Managing Partner and is subject to removal by that board at any time.

A. IDENTIFICATION OF DIRECTORS

    JAMES S. ANDRASICK.  53 years old; director of Managing Partner since 1986;
president and director of Mauna Loa; president of CBCL since September 1992.

    JOHN W. A. BUYERS.  69 years old; chairman since 1989 and director of
Managing Partner since 1986; chairman of Mauna Loa since August 1992; chairman
and chief executive officer of CBCL; chairman and president of Buyco.

    JAMES H. CASE.  77 years old; director and member of Conflicts Committee of
Managing Partner since 1986; senior partner of the law firm of Carlsmith Ball
Wichman Case & Ichiki; not an employee, officer, or director of any CBCL
affiliate other than the Managing Partner.

    RALPH C. HOOK, JR.  74 years old; director and member of Conflicts Committee
of Managing Partner since 1986; not an employee, officer, or director of any
CBCL affiliate other than the Managing Partner.

    KENT T. LUCIEN.  44 years old; president and director of Managing Partner
since September 1995; vice president of Mauna Loa; executive vice president and
chief financial officer of CBCL.

B. IDENTIFICATION OF  EXECUTIVE OFFICERS OF THE MANAGING PARTNER

    JOHN W. A. BUYERS.  69 years old; chairman and chief executive officer of
Managing Partner since 1989.

    J. ALAN KUGLE.  60 years old; secretary of Managing Partner since December
1997.

    KENT T. LUCIEN.  44 years old; president of Managing Partner since September
1995.

    GREGORY A. SPRECHER.  50 years old; senior vice president and chief
financial officer of Managing Partner since June 1997; not otherwise an
employee, officer, or director of any CBCL affiliate.

C. IDENTIFICATION OF CERTAIN SIGNIFICANT EMPLOYEES

Not applicable

D. FAMILY RELATIONSHIPS

Not applicable



                                       34


<PAGE>


E. BUSINESS EXPERIENCE OF CURRENT DIRECTORS AND EXECUTIVE OFFICERS

    CURRENT DIRECTORS OF THE MANAGING PARTNER.

    JAMES S. ANDRASICK.  Mr. Andrasick was promoted to president and chief
operating officer of CBCL in September 1992, and is one of its directors.  From
1989 until September 1992, he was executive vice president in charge of the
sugar, distribution and Central America operations.  From 1983 to 1988 he
served as executive vice president, finance and administration and chief
financial officer with responsibilities for finance and administration as well
as spice and guava operations.  He joined CBCL in 1978 as vice president and
controller after serving three years on the IU International Corporation
corporate development staff.  In 1980 he became senior vice president and chief
financial officer of CBCL.  Previously, he had been employed by the Ford Motor
Company at its world headquarters and product development groups in various
supervisory positions in finance.  Mr. Andrasick received his bachelor's degree
from the U.S. Coast Guard Academy and his master's degree from the
Massachusetts Institute of Technology.  Mr. Andrasick is also a director of
Olokele Sugar Company (a subsidiary of CBCL), Honolulu, Hawaii, and Wailuku
Agribusiness Co., Inc. (a subsidiary of CBCL), Wailuku, Hawaii.  In addition,
Mr. Andrasick is a trustee of the Hawaii Maritime Center and the U.S. Coast
Guard Foundation, a director of the American Red Cross, Hawaii State Chapter,
and chairman of the board of governors of the Hawaii Employers Council.  He
resides in Honolulu, Hawaii.

    JOHN W. A. BUYERS.  Mr. Buyers was elected chairman of the Managing Partner
in 1988 and has been chairman of Mauna Loa since July 1992.  He has been
chairman of the board and chief executive officer of CBCL since 1992.  From
1982 to 1992, he was chairman and president of CBCL.  He has been chairman and
a director of Homes since 1992, and chairman and president of Buyco since 1986.
From 1975 to 1982, he was president and chief executive officer of CBCL.  From
1971 to 1975, Mr. Buyers was president and chief executive officer of General
Waterworks Company in Philadelphia, Pennsylvania.  After service in the U.S.
Marine Corps, Mr. Buyers graduated CUM LAUDE from Princeton University in 1952
and later received an  M.A. in Industrial Management from the Massachusetts
Institute of Technology as a Sloan Fellow.  He is also a director of First
Hawaiian Bank, Honolulu, Hawaii, First Hawaiian Inc., Honolulu, Hawaii, John B.
Sanfilippo & Sons, Inc. (a commercial nut company), and several CBCL affiliated
companies.  He is a member of the U.S. Chamber of Commerce Committee on Food
and Agriculture in Washington, D.C., and is vice chairman and a director of
Pacific International Center for High Technology in Honolulu, Hawaii.  He
resides in Honolulu, Hawaii.

    JAMES H. CASE.  Mr. Case is senior partner in the Hawaii law firm of
Carlsmith Ball Wichman Case & Ichiki. Mr. Case graduated with an A.B. from
Williams College and received a J.D. from Harvard Law School.  He became
associated with the Carlsmith law firm in 1951 and became a partner in 1959.
He has served on the boards of directors of Hamakua Sugar Company, Inc.,
Paauilo, Hawaii, InterIsland Resorts, Ltd., Honolulu, Hawaii, Pacific Club,
Honolulu, Hawaii, Central Union Church, Honolulu, Hawaii, Hanahauoli School,
Honolulu, Hawaii, and Arcadia Retirement Residence, Honolulu, Hawaii.  He
resides in Honolulu, Hawaii.

    RALPH C. HOOK, JR.  Dr. Hook is director of the Family Business Center of
Hawaii, which is part of the College of Business Administration at the
University of Hawaii.  He joined the faculty of the University of Hawaii in
1968 as Dean of the College of Business Administration.  In 1974, he returned
to teaching as Professor of Marketing in the College of Business
Administration.  He 


                                       35


<PAGE>


became a Professor Emeritus of Marketing in June 1995.  Dr. Hook received a 
bachelor's and master's degrees from the University of Missouri at Columbia 
and a Ph.D. in Marketing from the University of Texas at Austin. He has been 
a member of the board of Pan Pacific Institute of Ocean Science since 1974 
and of Hook Brothers Corporation since 1983.  He was appointed a Trustee of 
Tokai University, Honolulu Center in 1988.  He resides in Honolulu, Hawaii.   

   KENT T. LUCIEN.  Mr. Lucien currently serves as president of the Managing 
Partner and has been  executive vice president and the chief financial 
officer of CBCL since 1991.  Previously he served as a vice president and as 
an executive vice president of the Managing Partner.  He joined CBCL as a 
senior analyst in 1980.  Mr. Lucien is an honors graduate of Occidental 
College and received an M.B.A. from Stanford University.  He resides in 
Honolulu, Hawaii.

   EXECUTIVE OFFICERS WHO DO NOT SERVE AS DIRECTORS.

   J. ALAN KUGLE.  Mr. Kugle was the President of the Managing Partner from
1986 to 1992 and was the Chairman and president of Mauna Loa from 1983 to 1991.
He has been executive vice president and general counsel of CBCL since 1980
with responsibility for various operations.  He began his CBCL career in 1976
as vice president and general counsel and became senior vice president and
general counsel in 1978.  Previously, he was executive vice president and
general counsel of Gino's, Inc., and was a partner in the Philadelphia law firm
of Drinker Biddle & Reath.  Mr. Kugle graduated with an A.B. from Franklin and
Marshall College and a J.D. from the New York University School of Law.
Mr. Kugle is also a director of various CBCL subsidiaries. He resides in
Honolulu, Hawaii.

   GREGORY A. SPRECHER.  Mr. Sprecher has served as senior vice president and
chief financial officer of  the Managing Partner since June 1997.  From 1974 to
1990 Mr. Sprecher served as treasurer and controller for Enivel, Inc., d.b.a.
Young Laundry & Dry Cleaning, in Honolulu.  He served as Enivel's chief
financial officer and treasurer from 1990 to 1994.  In 1994, the company was
sold to American Linen, and Mr. Sprecher served there as project manager until
1995.  Mr. Sprecher has served as managing general partner in several general
partnerships in Honolulu from 1980 to the present.  Mr. Sprecher has a B.S. in
Finance from California State College at Long Beach.  He resides in Honolulu,
Hawaii.

F. SECTION 16 DISCLOSURE

Under Section 16 of the Securities Exchange Act of 1934, as amended (the
"Exchange Act"), each director and certain officers of Mauna Loa Resources
Inc., the managing general partner of Registrant (a "Reporting Person"), are
required to report their ownership and changes in ownership of Class A
Depositary Units to the Securities and Exchange commission, the New York Stock
Exchange and Registrant.  Based on reporting forms submitted to Registrant, no
Reporting Person has failed to file on a timely basis reports required by
Section 16(a) of the Exchange Act during 1997, except that Gregory A. Sprecher,
who became the chief financial officer on June 1, 1997, and who does not own
any Class A Units, did not file a Form 3 until July 1, 1997.


                                       36




<PAGE>

ITEM 11.  EXECUTIVE COMPENSATION

A.  SUMMARY COMPENSATION TABLE

The Partnership is managed by the Managing Partner.  Compensation paid by the 
Managing Partner to its chief executive officer and other executive officers 
is reimbursed by the Partnership, as provided in Section 4.5 of the 
Partnership Agreement.  The following table reflects the aggregate 
compensation for services in all capacities paid by the Managing Partner to  
its chief executive officer for the years ended December 31, 1997, 1996 and 
1995.  For calendar year 1997, there were no executive officers who received 
more than $100,000 in compensation. There were no long-term compensation 
awards or payouts during those years.

<TABLE>
<CAPTION>

    Name and Principal Position        Annual Compensation
    ---------------------------        -------------------
                                   Year   Salary   Bonus   Other
                                   ----   ------   -----   -----
    <S>                            <C>    <C>      <C>     <C>
    John W. A. Buyers,             1997    $ -      $ -    $9,600
    chief executive officer        1996      -        -     8,400
                                   1995      -        -     8,400

</TABLE>

B.  NO OPTION, SAR, LONG-TERM INCENTIVE OR PENSION PLANS.  The Managing 
Partner does not presently have an option plan, SAR plan, or long-term 
incentive plan. The present executive officers of the Managing Partner are 
included in the pension plan and other benefits plans of its parent company, 
CBCL.  As such, the Managing Partner is not responsible for making any 
payments on the retirement of any of its present executive officers.

C.  NO EMPLOYMENT CONTRACTS OR TERMINATION AGREEMENTS

The Managing Partner does not have any employment or severance agreements 
with any of its present executive officers.

D.  COMPENSATION OF EXECUTIVE OFFICERS

The Managing Partner does not have a compensation committee since the chief 
executive officer of the Managing Partner is not compensated for serving in 
that position.  The only executive officer of the Managing Partner employed 
by it is Mr. Sprecher, who has served as its chief financial officer since 
June 1997.  Mr. Sprecher's salary (which is currently $100,000 per year) and 
guideline bonus percentage are administered under the salary policies of 
CBCL. Any bonus payments are approved by the Managing Partner's Board of 
Directors annually, based on the overall performance of the Partnership (as 
evidenced by its net income for the year) and on general and administrative 
cost control performance.  Performance in both categories is measured 
relative to the original Partnership operating budget approved by the 
Managing Partner's Board of Directors at the beginning of each year.

F.  DIRECTOR COMPENSATION

Directors of the Managing Partner presently receive a quarterly retainer of 
$1,500 and a meeting fee of $600 per meeting.  Members of the Managing 
Partner's conflicts committee receive a 

                                      37

<PAGE>

meeting fee of $600 per meeting.  There are no other agreements or 
arrangements between the Managing Partner and its directors.

E.  STOCK PERFORMANCE CHART

The following chart compares the Partnership's total return to (i) the 
Russell 2000 (a small business index) and (ii) a peer group index composed of 
publicly traded limited partnerships with either similar capitalization or in 
commodity based markets (other than gas and oil) or both.

                                    [GRAPH]

<TABLE>
<CAPTION>

               12/31/92   12/31/93   12/30/94   12/29/95   12/31/96   12/31/97
------------------------------------------------------------------------------
<S>            <C>        <C>        <C>        <C>        <C>        <C>
Nut                 100      89.41     60.908     55.948     95.398    110.482
------------------------------------------------------------------------------
Russel 2000         100    118.879    116.711    149.915    174.644      213.7
------------------------------------------------------------------------------
Peer Group          100    135.207    144.236    167.248    181.005    217.884
------------------------------------------------------------------------------

</TABLE>

ITEM 12.  SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

     As of December 31, 1997, and subsequent to that date to the date of this 
report,  (i) no person (including any "group" as that term is used in Section 
13(d)(3) of the Securities Exchange Act of 1934) is known by the Partnership 
or the Managing Partner to be the beneficial owner of more than 5% of the 
Class A Units; (ii) the Managing Partner did not own any Class A Units; and 
(iii) no director or executive officer of the Managing Partner owned more 
than 1% of the Class A Units.

                                      38

<PAGE>

     The table below sets forth certain information as to the Class A Units 
beneficially owned by the directors of the Managing Partner, and all 
directors and executive officers of the Managing Partner as a group, as of 
December 31, 1997.

<TABLE>
<CAPTION>

                                               Percent
                                     Class A     of
   Name of                           Units     Class A
   Beneficial Owner                  Owned      Units
   ------------------                -----     -------
   <S>                               <C>       <C>
   James S. Andrasick                  -          *
   John W.A. Buyers                  4,176        *
   James H. Case (1)                 8,000        *
   Ralph C. Hook (2)                 4,000        *
   Kent T. Lucien                    7,500        *
   All directors and executive
     officers as a group
     (7 persons)                    24,876      0.3%

</TABLE>

*Less than 1%

(1) Beneficially owned by James H. Case pursuant to a self-directed 
    retirement plan sponsored by Carlsmith Ball Wichman Case & Ichiki, 
    a law firm in which Mr. Case is a partner, and administered by Pacific 
    Century Trust.

(2) Beneficially owned by Ralph C. Hook pursuant to the Ralph C. Hook 
    Revocable Living Trust dated March 1, 1993.

In addition, Mauna Loa Orchards L.P., a limited partnership whose partners are
CBCL and certain direct or indirect wholly-owned subsidiaries of CBCL, owns
30,000 Class A Units.

ITEM 13    CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS.

1.  GENERAL

The Managing Partner makes all decisions relating to the management of the 
Partnership.  The Managing Partner, as such, has the duty to act in good 
faith and to manage the Partnership in a manner that is fair and reasonable 
to all unitholders.  Mauna Loa owns all of the capital stock of the Managing 
Partner. Certain officers and directors of CBCL and/or its affiliates also 
act as officers and directors of the Managing Partner and certain directors 
of the Managing Partner are substantial shareholders of Buyco, Inc., the 
parent company of CBCL.  Disputes that might otherwise develop between the 
Managing Partner and CBCL or its affiliates may not develop because the 
parties representing the entities are identical.  As a result of these 
relationships, certain conflicts of interest could arise with respect the 
administration of and allocation of costs under the Partnership Agreement and 
in situations described below, among others.

A committee of the Managing Partner's Board of Directors composed of two 
persons who are independent of CBCL and its affiliates (the "Conflicts 
Committee") reviews, on an annual basis, 

                                      39

<PAGE>

or more frequently as such committee may deem appropriate, the Managing 
Partner's management of the Partnership and any conflicts of interest that 
may have arisen or may arise as a result of the relationships among CBCL and 
its affiliates, the Managing Partner and the Partnership.  The Partnership 
Agreement states that, except for one initial member of the Conflicts 
Committee, no member of the Conflicts Committee may be an officer, director, 
employee or shareholder of the Managing Partner, Mauna Loa or any of their 
affiliates.  The Conflicts Committee presently consists of two individuals 
who are not affiliated with CBCL.

2.  FARMING LEASES.

At the time of the Partnership's acquisition of the interests in the October 
1989 Orchards, MLO assigned to the Partnership all of MLO's rights and 
obligations under three 45-year farming leases relating to 327 tree acres of 
the  Ka'u II Orchards and all of the Mauna Kea Orchards.  The farming leases 
permit the Partnership to conduct macadamia nut farming operations on such 
macadamia orchard properties.  The farming leases provide for fixed minimum 
annual lease payments to be paid to either KACI or MKACI (collectively, the 
"Agribusiness Companies"), as the case may be.  Such annual rental payments 
are subject to increase after ten years, twenty years and thirty years based 
on then current fair market lease rates.  The then current fair market lease 
rate will be determined by mutual agreement between the Partnership, on the 
one hand, and either KACI or MKACI, as the case may be, on the other hand. If 
mutual agreement cannot be reached, the then current fair market lease rate 
will be determined by appraisal.  Whether determined by mutual agreement or 
by appraisal, the then current fair market lease rate will be determined as a 
fair market lease rate for use of such premises as macadamia orchards.

The Partnership acquired its interests in the trees situated on such leased 
macadamia orchard properties subject to repurchase options retained by the 
Agribusiness Companies.  The repurchase options grant the Agribusiness 
Companies the continuing right to repurchase all or any portion of such trees 
after June 30, 2019 at a price equal to the then current fair market value of 
the trees, according to their value as producing macadamia nut trees, as 
determined by mutual agreement between the Partnership, on the one hand, and 
either KACI or MKACI, as the case may be, on the other hand.  If mutual 
agreement cannot be reached, the then current fair market value will be 
determined by appraisal.  Whether determined by mutual agreement or by 
appraisal, the fair market value of such trees will be determined according 
to their value as producing macadamia nut trees, assuming that the owner 
thereof has rights to farm and harvest such trees and has ongoing 
arrangements with respect to land leases, farming and nut purchases of the 
same type as the Partnership has immediately prior to such time.

At the end of the 45-year lease terms of such leases, the Agribusiness 
Companies will be required to repurchase such trees at their then current 
fair market value as orchards if such entities do not offer to extend such 
farming leases at the then current fair market lease rates. The then current 
fair market lease rate and the then current market value of the trees for 
such purposes will be determined through mutual agreement between the 
Partnership, on the one hand, and either KACI or MKACI, as the case may be, 
on the other hand or, if mutual agreement cannot be obtained, by appraisal, 
in each case in the manner described above.  Such repurchase obligations will 
apply with respect to the expiration of each extension of the lease terms of 
such leases until such leases have been in effect for a total of 99 years, at 
which time the leases will expire and the ownership interests in such trees 
will revert back to the Agribusiness Companies.

                                      40

<PAGE>

In the event that the Partnership decides not to accept an offer to extend 
the leases at the then current fair lease rates upon the expiration of the 
leases or any extension thereof (or does not assign the leases to a third 
party who elects to accept such offer), the leases will expire, the 
Agribusiness Companies will not be required to repurchase the trees covered 
thereby and ownership of such trees will revert back to the Agribusiness 
Companies (and in any event ownership of such trees will revert back to the 
Agribusiness Companies after 99 years).  As the Managing Partner and the 
Agribusiness Companies are each direct or indirect wholly owned subsidiaries 
of CBCL, a decision to renew the farming leases will involve the Managing 
Partner in a conflict of interest.

As described above, the farming leases provide for determinations of the fair 
market lease rate to be paid by the Partnership under the farming leases and 
the fair market value of the Partnership's trees situated on property covered 
by such leases by mutual agreement between the Partnership, on the one hand, 
and with KACI or MKACI, as the case may be, on the other hand, or, if mutual 
agreement cannot be reached, by appraisal. As any determination by the 
Partnership with respect to any such mutual agreement will be made by the 
Managing Partner and as the Managing Partner and the Agribusiness Companies 
are each direct or indirect wholly owned subsidiaries of CBCL, such 
determination on behalf of the Partnership will involve the Managing Partner 
in a conflict of interest. Accordingly, the Conflicts Committee of the Board 
of Directors of the Managing Partner will review any such determinations made 
by mutual agreement.

3. NUT PURCHASE CONTRACTS AND FARMING CONTRACTS.

Mauna Loa purchases from the Partnership all of the macadamia nut production 
from the orchards acquired in 1986 pursuant to the 1986 nut purchase 
contracts, all of the macadamia nut production from the orchards acquired in 
1989 (excluding "unusable nuts") under the 1989 nut purchase contract and all 
of the macadamia nut production from the Lot 10 orchard under the Lot 10 nut 
purchase contract.  In addition, KACI farms the orchards acquired in 1986 for 
the Partnership pursuant to the 1986 orchards farming contracts and, along 
with MKACI, farms the orchards acquired in 1989 for the Partnership pursuant 
to the 1989 farming contract.  KACI also farms the Lot 10 Orchard for the 
Partnership pursuant to the Lot 10 farming contract.  Various conflicts of 
interest exist or may arise with respect to the Partnership's sale and Mauna 
Loa's purchase of nuts under the nut purchase contracts, the allocation of 
costs reimbursed by the Partnership under the farming contracts for purposes 
of determining the netback component of the purchase price for nuts under the 
nut purchase contracts and the allocation of personnel and resources with 
respect to services provided by KACI and MKACI under the farming contracts.  
For example, the purchase price under the nut purchase contracts will depend 
on Mauna Loa's processing, packaging, marketing, sales and advertising 
expenses and nonagricultural overhead costs, all of which are controlled and 
allocated by Mauna Loa.  Mauna Loa also has complete control over the 
identification and weighing of nuts at its processing plants.

Under the terms of the farming contracts, KACI and MKACI are required to 
provide certain reports to the Partnership, including an annual report 
describing in reasonable detail the conduct of farming and harvesting 
operations at the orchards, and they also are required to provide a 
statement, certified by its independent accountants, which reflects its 
allocation of direct costs and overhead for the relevant year.  The reports 
submitted to the Managing Partner are reviewed

                                       41
<PAGE>

by the Conflicts Committee.  The Managing Partner has the right to object to 
the information set forth in such annual reports relating to the calculation 
of the nut purchase price and/or farming costs and to engage a certified 
public accounting firm of its own selection to verify and confirm such 
information.  The Managing Partner on behalf of the Partnership has the right 
to assert claims against Mauna Loa based on such independent review, and, if 
any such review and assertion results in an adjustment favorable to the 
Partnership in the nut purchase price or farming cost figures by an amount in 
excess of 5% of the amount initially calculated by Mauna Loa, Mauna Loa will 
be required to reimburse the Partnership for the expenses incurred in 
engaging the accounting firm and asserting such claims.  Cost reimbursements 
under the farming contracts totaled $7.2 million in 1997, $7.2 million in 
1996, and $6.7 million in 1995. Farming fees totaled $113,000 in 1997 and 
$153,000 in 1996.  No farming fees were paid for 1995.

4. MANAGEMENT FEE.

Under the terms of the Partnership Agreement, the Partnership reimburses the 
Managing Partner for all expenses incurred by it in the conduct of 
Partnership business, including any expenses reasonably allocated to the 
Managing Partner or to the Partnership as well as a management fee equal to 
2% of the Partnership's operating cash flow (as defined in the Partnership 
Agreement). Certain conflicts may arise in connection with the allocation of 
such expenses among the Managing Partner, the Partnership, CBCL and its 
affiliates. Management cost reimbursements under the Partnership Agreement 
were $428,000 in 1997, $391,000 in 1996, and $424,000 in 1995.  The 
management fee was $75,000 in 1997 and $102,000 in 1996.  There was no 
management fee for 1995.

5. RELATIONSHIPS WITH CBCL.

Since the Partnership began operations in June 1986, the Partnership has 
purchased substantially all of its fertilizer and certain transportation 
services from subsidiaries of CBCL.  Transportation services purchased 
consist of transportation of raw nuts from the orchards in the Mauna Kea and 
Ka'u areas to the processing plant.  For 1997, 1996 and 1995, fertilizer, 
herbicide, pesticide and transportation services purchased by the Partnership 
from CBCL subsidiaries totaled $0.8 million, $0.8 million and $0.7 million, 
respectively. It is expected that the Partnership will continue to purchase 
its fertilizer and transportation needs from CBCL subsidiaries as long as, 
and to the extent that, such purchases can be made on a basis at least as 
favorable as that available from third parties.  The Partnership Agreement 
requires that the price and terms of any such transactions be no less 
favorable than those available in comparable transactions between unrelated 
parties.

The stock and assets of the general partner is significant to both CBCL and 
Buyco.  In making decisions regarding financial matters concerning CBCL and 
Buyco, Buyco may be required to make choices which could impact the business 
and financial condition of the general partner.  Any such impact could affect 
the Partnership.

                                      42

<PAGE>

                                    PART IV

ITEM 14.  EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORM 8-K


A.  LIST OF DOCUMENTS FILED AS A PART OF THIS REPORT.

1.  FINANCIAL STATEMENTS.  See Index to Financial Statements at page 21 of this
      Form 10-K.

2.  FINANCIAL STATEMENT SCHEDULES.  None required.

3.  EXHIBITS.  See Exhibit Index at page 45 of this Form 10-K.


B.  REPORTS ON FORM 8-K.

1.  On November 10, 1997 the Partnership filed a report on Form 8-K announcing 
    that the Partnership and C. Brewer Homes, Inc. had reached an agreement in
    principal to merge the two companies.

2.  On December 19, 1997 the Partnership filed a report on Form 8-K announcing 
    that the Partnership and C. Brewer Homes, Inc. had executed a definitive 
    merger agreement pursuant to which Homes will be merged into the 
    Partnership.

                                      43

<PAGE>

                                  SIGNATURES

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


                                           MAUNA LOA MACADAMIA PARTNERS, L.P.
                                                     (Registrant)

                                           By: MAUNA LOA RESOURCES INC.
                                              (Managing General Partner)

DATED:      March 20, 1998                 By:  /s/ J. W. A. Buyers
       -----------------------                -------------------------------
                                                   J. W. A. Buyers
                                                  Chairman of the Board and
                                                  Principal Executive Officer

Pursuant to the requirements of the Securities Exchange Act of 1934, this
report has been executed below by the following persons on behalf of the
registrant and in the capacities and on the dates indicated.


                           MAUNA LOA RESOURCES INC.
<TABLE>
<CAPTION>

         Signature                       Title                        Date
         ---------                       -----                        ----
  <S>                             <C>                               <C>

  /s/  J. W. A. Buyers            Chairman of the Board             March 20, 1998
 -----------------------------    (Principal Executive Officer)     --------------
        J. W. A. Buyers           Director        

  /s/  Kent T. Lucien             President, Director               March 20, 1998
 -----------------------------                                      --------------
        Kent T. Lucien

  /s/  Gregory A. Sprecher        Senior Vice President             March 20, 1998
 -----------------------------    (Principal Financial Officer      --------------
        Gregory A. Sprecher       and Principal Accounting Officer)

  /s/  James S. Andrasick         Director                          March 20, 1998
 -----------------------------                                      --------------
        James S. Andrasick

  /s/  James H. Case              Director                          March 20, 1998
 -----------------------------                                      --------------
        James H. Case

  /s/ Dr. Ralph C. Hook, Jr.      Director                          March 20, 1998
 -----------------------------                                      --------------
       Dr. Ralph C. Hook, Jr.

</TABLE>

                                      44

<PAGE>

                                   EXHIBIT INDEX

<TABLE>
<CAPTION>

  EXHIBIT
  NUMBER                            DESCRIPTION
 --------                           -----------
  <S>       <C>
    2.1     Amended and Restated Agreement and Plan of Merger, effective as 
            of December 18, 1997, between Registrant and C. Brewer Homes, 
            Inc. (a)

    3.1      Agreement of Limited Partnership of Registrant. (b)

    3.2     Form of Class A Certificate of Limited Partnership as filed with 
            the Secretary of State of Delaware. (c)

    3.3     Certificate of Limited Partnership of Registrant as filed with 
            the Secretary of State of Delaware. (c)

    4.1     Depositary Agreement between Registrant, Manufacturers Hanover 
            Trust Company as Depositary and Mauna Loa Resources Inc. as 
            attorney-in-fact of the limited partners of Registrant. (c)

    4.2     Form of Depositary Receipt. (c)

   10.1     Macadamia Nut Purchase Contract between Mauna Loa Macadamia Nut 
            Corporation ("Mauna Loa") and Registrant dated June 12, 1986. (b)

   10.2     Macadamia Nut Purchase Contract between Mauna Loa and Registrant 
            dated December 22, 1986. (b)

   10.3     Macadamia Nut Purchase Contract between Mauna Loa and Registrant 
            dated as of October 1, 1989. (b)

   10.4     Contribution Agreement among Mauna Loa Orchards, L.P. ("MLO"), Ka'u
            Agribusiness Co., Inc. ("KACI"), Mauna Kea Agribusiness Co., Inc.
            ("MKACI"), Mauna Kea Macadamia Orchards, Inc. ("MKMO") and Mauna Loa
            dated as of July 1, 1989. (b)

   10.5     Lease between the Trustees of the Estate of Bernice Pauahi Bishop 
            ("Trustees of the Bishop Estate") and Mauna Loa. (c)

   10.6     Lease between KACI and Registrant. (d)

   10.7     MLO/MLMP Conveyance Agreement between MLO and Registrant dated as 
            of October 1, 1989. (b)

   10.8     Butcher/MLMP Contribution Agreement between Howard Butcher III 
            ("Butcher") and Registrant dated as of October 1, 1989. (b)

   10.9     Farming Lease between KACI and MLO dated as of July 1, 1989. (b)

   10.10    Farming Lease between MKACI and MKMO dated as of July 1, 1989. (b)

</TABLE>

                                          45

<PAGE>

<TABLE>
<CAPTION>

  EXHIBIT
  NUMBER                            DESCRIPTION
 --------                           -----------
  <S>       <C>
   10.11    Farming Lease between MKACI and MLO dated as of July 1, 1989. (b)

   10.12    Water Agreement, as amended, between KACI and Registrant dated as 
            of October 1, 1989. (b)

   10.13    Cash Flow Warranty Agreement among KACI, MKACI and Registrant 
            dated as of July 1, 1989. (b)

   10.14    Guarantee Agreement between Mauna Loa and Registrant dated as of 
            October 1, 1989. (b)

   10.15    Agreement of Indemnification between CBCL and each director of 
            the Managing Partner. (b)

   10.16    Indemnification Agreement (Title) among Mauna  Loa, KACI and 
            MKACI in favor of Registrant. (b)

   10.17    Indemnification Agreement (Subdivision) among  Mauna Loa, KACI 
            and MKACI in favor of  Registrant. (b)

   10.18    Deed between MLO and Registrant relating to 14% undivided 
            interest in 220 tree acres of macadamia orchard properties 
            located in the Keaau area of the island of Hawaii ("Keaau II 
            Orchards"). (b)

   10.19    Bill of Sale between MLO and Registrant relating to 14% undivided 
            interest in New Keaau Orchards. (b)

   10.20    Deed between Butcher and Registrant relating to 86% undivided 
            interest in New Keaau Orchards. (b)

   10.21    Bill of Sale between Butcher and Registrant relating to 86% 
            undivided interest in New Keaau Orchards. (b)

   10.22    Assignment of Partial Interest in Lease No. 15,020 and consent 
            from MLO to Registrant. (b)

   10.23    Assignment of Partial Interest in Lease No. 16,859 and consent 
            from MLO to Registrant. (b)

   10.24    Assignment of Partial Interest in Lease No. 20,397 and consent 
            from MLO to Registrant. (b)

   10.25    Assignment of Lease from MLO to Registrant relating to Lease from 
            the Trustees of the Bishop Estate. (b)

   10.26    Assignment from MLO to Registrant relating to certain orchards. (b)

</TABLE>

                                 46


<PAGE>

<TABLE>
<CAPTION>

  EXHIBIT
  NUMBER                            DESCRIPTION
 --------                           -----------
  <S>       <C>
   10.27    Lease from the Trustees of the Bishop Estate to MLO. (b)

   10.28    Lease No. 15,020 from the Trustees of the Bishop Estate to MLO. (b)

   10.29    Form of Amendments to Lease No. 15,020 from the Trustees of the 
            Bishop Estate. (b)

   10.30    Lease No. 16,859 from the Trustees of the Bishop Estate to the 
            Hawaiian Agricultural Company (a predecessor of KACI). (b)

   10.31    Form of Amendments to Lease No. 16,859 from the Trustees of the 
            Bishop Estate. (b)

   10.32    Lease No. 20,397 from the Trustees of the Bishop Estate to CBCL. (b)

   10.33    Form of Amendments to Lease No. 20,397 from the Trustees of the 
            Bishop Estate to CBCL. (b)

   10.34    Lease from Richard L. Hughes to Mauna Loa. (b)

   10.35    Lease from the Trustees of the Bishop Estate to Mauna Loa. (b)

   10.36    Co-ownership and Partition Agreement between KACI and MLO. (b)

   10.37    Co-ownership and Partition Agreement among Mauna Loa, KACI and 
            MLO.(b)

   10.39    Co-ownership and Partition Agreement between MKACI and MLO. (b)

   10.40    Macadamia Nut Purchase Contract between Mauna Loa and Keaau  
            Macadamia X Corporation ("Keaau 10") dated September 15, 1983. (e)

   10.41    Assignment of Owner's Interest in Macadamia Nut Purchase Contract 
            and Farming Contract between Keaau 10 and Registrant. (e)

   10.42    Warranty Deed between Keaau 10 and Registrant. (e)

   10.43    Amended and Restated June 1986 Farming Contract, effective 
            January 1, 1998, between Registrant and KACI. (f)

   10.44    Amended and Restated December 1986 Farming Contract, effective 
            January 1, 1988, between Registrant and KACI. (f)

   10.45    Amended and Restated 1989 Farming Contract, effective January 1, 
            1998, among Registrant, KACI and MKACI. (f)

</TABLE>


                                     47

<PAGE>

<TABLE>
<CAPTION>

  EXHIBIT
  NUMBER                            DESCRIPTION
 --------                           -----------
  <S>       <C>
   10.46    Amended and Restated Farming Contract for the Lot X Orchard, 
            effective January 1, 1998, between Registrant and KACI. (f)

   10.47    Restated Kaiwiki Orchards Farming lease between Registrant and 
            MKACI dated February 26, 1997. (f) 

   11.1     Statement re: Computation of Net Income per Class A Unit.

    27      Financial Data Schedule.

</TABLE>

(a)  Incorporated by reference to Appendix A of Registrant's Registration 
     Statement under the Securities Act on Form S-4, Registration 
     Statement No. 333-46271, filed February 13, 1998.

(b)  Incorporated by reference to the corresponding Exhibit previously filed 
     as an Exhibit to Registrant's Registration Statement under the 
     Securities Act on Form S-1, Registration Statement No. 33-30659, filed 
     October 20, 1989.

(c)  Incorporated by reference to the corresponding Exhibit previously filed 
     as an Exhibit to Registrant's Registration Statement under the 
     Securities Act on Form S-1, Registration Statement No. 33-4903, filed 
     June 5, 1986.

(d)  Incorporated by reference to the corresponding Exhibit previously filed 
     as an Exhibit to Registrant's Annual Report on Form 10-K, Commission 
     filed No. 1-9145, for the year ended December 31, 1986, filed March 27, 
     1987.

(e)  Incorporated by reference to the corresponding Exhibit previously filed 
     as an Exhibit to Registrant's Annual Report on Form 10-K, Commission 
     filed No. 1-9145, for the year ended December 31, 1991, filed March 27, 
     1992.

(f)  Incorporated by reference to the corresponding Exhibit previously filed 
     as an Exhibit to Registrant's Registration Statement under the 
     Securities Act on Form S-4, Registration Statement No. 333-46271, filed 
     February 13, 1998.


                                     48