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UNITED STATES
SECURITIES AND EXCHANGE COMMISSIONWashington, D.C. 20549

FORM 10-Q

(Mark One)ý

QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934For the quarterly period ended JUNE 30, 2009ORo

TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934Commission file number 001-06510


MAUI LAND & PINEAPPLE COMPANY, INC.(Exact name of registrant as specified in its charter)

HAWAII

99-0107542(State or other jurisdiction
of incorporation or organization)

(IRS Employer
Identification No.)


161 SOUTH WAKEA AVENUE, P. O. BOX 187, KAHULUI, MAUI, HAWAII 96733-6687(Address of principal executive offices)

Registrant's telephone number, including area code:(808) 877-3351

NONE(Former name, former address and former fiscal year, if changed since last report)

Indicate
by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the
preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

Yes ý    No o

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be
submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the
registrant was required to submit and post such files).

Yes o    No o

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting
company. See the definitions of "large accelerated filer," "accelerated filer," and "smaller reporting company" in Rule 12b-2 of the Exchange Act.

Large accelerated filer o

Accelerated filer ý

Non-accelerated filer o (Do not check if a smaller reporting company)

Smaller reporting company o


Indicate
by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).

Yes o    No ý

Indicate the number of shares outstanding of each of the issuer's classes of common stock, as of the latest practicable date.

Class



Outstanding at August 1, 2009Common Stock, no par value



8,148,728 shares




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Table of Contents

MAUI LAND & PINEAPPLE COMPANY, INC.
AND SUBSIDIARIES

TABLE OF CONTENTS



PagePART I. FINANCIAL INFORMATION

3Item 1. Financial Statements (unaudited)

3Condensed Consolidated Statements of Operations,
Three Months Ended June 30, 2009 and 2008

3Condensed Consolidated Statements of Operations,
Six Months Ended June 30, 2009 and 2008

4Condensed Consolidated Balance Sheets, June 30, 2009 and December 31, 2008

5Condensed Consolidated Statements of Stockholders' Equity (Deficiency),
Six Months Ended June 30, 2009 and 2008

6Condensed Consolidated Statements of Cash Flows,
Six Months Ended June 30, 2009 and 2008

7Notes to Condensed Consolidated Financial
Statements

8Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations

20Forward-Looking Statements and Risks

34Item 3. Quantitative and Qualitative Disclosures About Market
Risk

35Item 4. Controls and Procedures

36PART II. OTHER INFORMATION

37Item 1A. Risk Factors

37Item 4. Submission of Matters to a Vote of Security
Holders

37Item 5. Other Information

37Item 6. Exhibits

38Signature

39EXHIBIT INDEXExhibit 10.1Exhibit 10.2Exhibit 10.3Exhibit 31.1Exhibit 31.2Exhibit 32.1


2

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Table of Contents

PART I FINANCIAL INFORMATION

Item 1.    Financial Statements

MAUI LAND & PINEAPPLE COMPANY, INC. AND SUBSIDIARIES        CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS        (UNAUDITED)

Three Months Ended6/30/09

6/30/08(in thousands except
share amounts)Operating RevenuesProduct revenues

$
7,570

$
10,268Service revenues


5,704


7,293Total Operating Revenues


13,274


17,561Operating Costs and ExpensesCost of product revenues


5,939


7,410Cost of service revenues


9,192


9,988Shipping and marketing


1,796


3,071General and administrative


7,860


8,182Impairment charges (Note 7)


16,156


Total Operating Costs and Expenses


40,943


28,651Operating Loss


(27,669
)

(11,090
)Equity in income (losses) of affiliates (Note 11)


(23,263
)

12,024Interest expense


(3,067
)

(550
)Interest income


195


47Income (Loss) Before Income Taxes


(53,804
)

431Income Tax Expense


415


159Net Income (Loss)

$
(54,219
)
$
272Income (Loss) Per Common ShareBasic

$
(6.75
)
$
0.03Diluted

$
(6.75
)
$
0.03


See
accompanying Notes to Condensed Consolidated Financial Statements.

3

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MAUI LAND & PINEAPPLE COMPANY, INC. AND SUBSIDIARIES        CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS        (UNAUDITED)

Six Months Ended6/30/09

6/30/08(in thousands except
share amounts)Operating RevenuesProduct revenues

$
15,818

$
25,540Service revenues


13,053


17,390Total Operating Revenues


28,871


42,930Operating Costs and ExpensesCost of product revenues


11,937


17,578Cost of service revenues


19,130


19,952Shipping and marketing


4,030


6,877General and administrative


15,702


18,352Impairment charges (Note 7)


16,156


Total Operating Costs and Expenses


66,955


62,759Operating Loss


(38,084
)

(19,829
)Equity in income (losses) of affiliates (Note 11)


(24,393
)

21,399Interest expense


(4,543
)

(1,942
)Interest income


378


202Loss Before Income Taxes


(66,642
)

(170
)Income Tax Expense (Benefit)


800


(28
)Net Loss

$
(67,442
)
$
(142
)Loss Per Common ShareBasic

$
(8.40
)
$
(0.02
)Diluted

$
(8.40
)
$
(0.02
)


See
accompanying Notes to Condensed Consolidated Financial Statements.

4

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Table of Contents

MAUI LAND & PINEAPPLE COMPANY, INC. AND SUBSIDIARIES        CONDENSED CONSOLIDATED BALANCE SHEETS        (UNAUDITED)

6/30/09

12/31/08(in thousands)ASSETSCurrent AssetsCash and cash equivalents

$
1,497

$
13,668Accounts and notes receivable


3,566


5,509Refundable income taxes


4,662


4,662Inventories


10,823


9,737Real estate held for sale (Note 7)


15,840


18,963Other current assets


1,032


600Total current assets


37,420


53,139Property


202,878


212,242Accumulated depreciation


(94,513
)

(96,002
)Propertynet


108,365


116,240Investments in affiliates


17,118


41,683Other assets (Note 7)


19,647


37,138Total

$
182,550

$
248,200LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIENCY)Current LiabilitiesCurrent portion of long-term debt and capital lease obligations

$
59,838

$
46,050Trade accounts payable


8,048


8,183Other current liabilities


12,233


13,351Total current liabilities


80,119


67,584Non-Current LiabilitiesLong-term debt and capital lease obligations


34,676


90,941Accrued retirement benefits


41,894


43,798PGC deferred credit (Note 10)


47,382


Other non-current liabilities


13,359


14,189Total non-current liabilities


137,311


148,928Commitments and Contingencies (Note 18)Stockholders' Equity (Deficiency)Common stock, no par value23,000,000 shares authorized, 8,047,228 and 8,021,248 issued and outstanding


35,124


34,791Additional paid-in capital


8,904


8,363Retained earnings (Accumulated deficit)


(60,884
)

6,558Accumulated other comprehensive loss


(18,024
)

(18,024
)Stockholders' Equity (Deficiency)


(34,880
)

31,688Total

$
182,550

$
248,200


See
accompanying Notes to Condensed Consolidated Financial Statements.

5

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Table of Contents

MAUI LAND & PINEAPPLE COMPANY, INC. AND SUBSIDIARIES        CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY (DEFICIENCY)        (UNAUDITED)        For the Six Months Ended June 30, 2009 and 2008        (in thousands)

Common Stock



Retained
Earnings
(Accumulated
Deficit)

Accumulated
Other
Comprehensive
LossAdditional
Paid in
CapitalShares

Amount

TotalBalance, January 1, 2009


8,021

$
34,791

$
8,363

$
6,558

$
(18,024
)
$
31,688Stock compensation expense








969








969Vested restricted stock issued


37


428


(428
)







Shares cancelled to pay tax liability


(11
)

(95
)










(95
)Net loss











(67,442
)




(67,442
)Balance, June 30, 2009


8,047

$
35,124

$
8,904

$
(60,884
)
$
(18,024
)
$
(34,880
)Balance, January 1, 2008


7,959

$
34,168

$
6,769

$
90,576

$
(1,246
)
$
130,267Cumulative impact of adoption of EITF No. 06-8, net of tax











(4,622
)




(4,622
)Stock option exercises


1


13











13Stock compensation expense








1,242








1,242Vested restricted stock issued


4


141


(141
)







Shares cancelled to pay tax liability


(4
)

(104
)










(104
)Net loss











(142
)




(142
)Balance, June 30, 2008


7,960

$
34,218

$
7,870

$
85,812

$
(1,246
)
$
126,654


See
accompanying Notes to Condensed Consolidated Financial Statements.

6

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Table of Contents

MAUI LAND & PINEAPPLE COMPANY, INC. AND SUBSIDIARIES        CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS        (UNAUDITED)

Six Months Ended6/30/09

6/30/08(in thousands)Net Cash Used in Operating Activities

$
(15,138
)
$
(25,678
)Investing ActivitiesPurchases of property


(547
)

(9,707
)Contributions to affiliates





(7,756
)Proceeds from disposal of property


195


3,870Other


1,575


(2,962
)Net Cash Provided by (Used in) Investing Activities


1,223


(16,555
)Financing ActivitiesPayments of long-term debt and capital lease obligations


(51,237
)

(10,935
)Proceeds from long-term debt


6,600


54,100Net proceeds from PGC (Note 10)


48,520


Reduction of PGC deferred credit


(952
)

Debt issuance cost and other


(1,187
)

Stock compensation exercises





14Net Cash Provided by Financing Activities


1,744


43,179Net Increase (Decrease) in Cash and Cash Equivalents


(12,171
)

946Cash and Cash Equivalents at Beginning of Period


13,668


1,991Cash and Cash Equivalents at End of Period

$
1,497

$
2,937


Supplemental
Disclosures of Cash Flow InformationInterest (net of amounts capitalized) of $5,032,000 and $1,769,000 was paid during the six months ended June 30, 2009
and 2008, respectively. Income taxes of $291,000 and $2,410,000 were refunded during the six months ended June 30, 2009 and 2008, respectively.

Supplemental
Non-Cash Investing and Financing Activities



7

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Table of Contents

MAUI LAND & PINEAPPLE COMPANY, INC. AND SUBSIDIARIES        NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS        (UNAUDITED)



8

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Table of Contents



6/30/09

12/31/08(in thousands)Pineapple productsfinished goods

$
1,561

$
807Real estate


4,141


3,254Merchandise, materials and supplies


5,121


5,676Total Inventories

$
10,823

$
9,737




9

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Three Months Ended
June 30,

Six Months Ended
June 30,2009

2008

2009

2008Basic


8,034,162


7,957,850


8,027,346


7,960,435Diluted


8,034,162


8,013,194


8,027,346


7,960,435






10

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11

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Table of Contents



Three Months Ended
June 30,

Six Months Ended
June 30,2009

2008

2009

2008Revenues

$
(7,269
)
$
66,348

$
(12,688
)
$
124,442Expenses


(3,030
)

46,726


(6,915
)

89,170Net Income (Loss)

$
(4,239
)
$
19,622

$
(5,773
)
$
35,272




12

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13

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Table of Contents



Shares

Weighted
Average
Exercise
Price

Weighted
Average
Grant-Date
Fair Value

Weighted
Average
Remaining
Contractual
Term (years)

Aggregate
Intrinsic
Value
$(000)(1)Outstanding at December 31, 2008


901,833

$
29.20Granted


45,000

$
6.35

$
3.11Exercised




$
Forfeited or Expired


(443,033
)
$
31.70

$
13.68Outstanding at June 30, 2009


503,800

$
24.96

$
9.75


5.0

$
63Exercisable at June 30, 2009


293,300

$
28.23

$
10.68


2.8

$
Expected to Vest at June 30, 2009(2)


169,137

$
20.40

$
8.45


8.1

$
50






2009

2008Weighted Average Grant-Date Fair Value For Options Granted During the Period

$
3.11


n/aIntrinsic Value of Options Exercised $(000)




$
4Cash Received From Option Exercises $(000)




$
14Tax Benefit From Option Exercises $(000)





Fair Value of Shares Vested During the Period $(000)

$
1,081

$
1,149


14

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Table of Contents



2009Expected Life of Options in Years


6.5Expected Volatility


46.1
%Risk-free interest rate


2.4
%Expected dividend yield







Shares

Weighted
Average
Grant-Date
Fair ValueNonvested balance at December 31, 2008


121,295

$
26.70Granted


47,250

$
6.51Vested


(26,785
)
$
12.30Forfeited or Cancelled


(40,260
)
$
33.57Nonvested balance at June 30, 2009


101,500

$
18.62


15

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Table of Contents



Three Months
Ended June 30,

Six Months
Ended June 30,2009

2008

2009

2008(in thousands)Pension BenefitsService cost

$
378

$
475

$
756

$
950Interest cost


905


856


1,811


1,712Expected return on plan assets


(622
)

(944
)

(1,245
)

(1,888
)Amortization of prior service cost


11


13


22


26Amortization of transition liability


4


5


8


10Recognized actuarial loss


484


56


968


112Net expense

$
1,160

$
461

$
2,320

$
922Other BenefitsService cost

$
54

$
79

$
109

$
158Interest cost


200


212


399


424Amortization of prior service cost











Recognized actuarial (gain)


(120
)

(96
)

(241
)

(192
)Net expense

$
134

$
195

$
267

$
390






16

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Table of Contents



Fair Value(1) of Derivative Liabilities as ofDerivatives Not Designated as Hedging Instruments Under FASB Statement No. 133:

Balance Sheet Location

6/30/09

12/31/08(in thousands)Interest rate swap agreements

Other current liabilities

$
673

$
1,160Derivative liability related to convertible debt

Other current liabilities


1,265


2,689






Amount of gain or (loss)
recognized on derivativethree months ended

six months endedLocation of gain or (loss)
recognized in
statement of operationsDerivatives not designated as hedging
instruments under FASB Statement 133:

6/30/09

6/30/08

6/30/09

6/30/08(in thousands)

(in thousands)Interest rate swap agreements

interest expense

$
258

$
860

$
487

$
339Derivative liability related to convertible debt

interest expense


46





1,424







17

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Table of Contents



Fair Value Measurements UsingDescription

Balance as of
June 30, 2009

Quoted Prices
in Active
Markets for
Identical Assets
(Level 1)

Significant
Other
Observable
Inputs (Level 2)

Significant
Unobservable
Inputs
(Level 3)

Total
LossesReal estate held for sale

$
15,200







$
15,200

$
(1,870
)Investments in affiliates


17,118








17,118


(21,300
)$
(23,170
)






18

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Three Months Ended
June 30,

Six Months Ended
June 30,2009

2008

2009

2008(in thousands)Operating RevenuesAgriculture

$
4,525

$
5,274

$
9,414

$
13,735Resort


6,713


8,197


15,333


19,888Community Development


1,810


3,699


3,787


8,297Other


226


391


337


1,010Total Operating Revenues

$
13,274

$
17,561

$
28,871

$
42,930Operating Profit (Loss)Agriculture

$
(4,998
)
$
(4,594
)
$
(8,543
)
$
(9,724
)Resort


(4,611
)

(5,161
)

(8,768
)

(7,437
)Community Development(1)


(40,990
)

10,975


(44,215
)

19,056Other


(333
)

(286
)

(951
)

(325
)Total Operating Profit (Loss)


(50,932
)

934


(62,477
)

1,570Interest Expense


(3,067
)

(550
)

(4,543
)

(1,942
)Interest Income


195


47


378


202Income Tax (Expense) Benefit


(415
)

(159
)

(800
)

28Net Income (Loss)

$
(54,219
)
$
272

$
(67,442
)
$
(142
)








19

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Item 2.    Management's Discussion and Analysis of Financial Condition and Results of Operations

The following discussion and analysis of our financial condition and results of operations should be read in conjunction with our
audited consolidated financial statements and related notes included in our Annual Report on Form 10-K for the year ended December 31, 2008 and the unaudited condensed
consolidated financial statements and related notes included in this Quarterly Report on Form 10-Q. Depending upon the context, the terms the "Company," "we," "our," and "us,"
refers to either Maui Land & Pineapple Company, Inc. alone, or the Company and its subsidiaries.

Overview of the Company

Maui Land & Pineapple Company, Inc. is a Hawaii corporation and the successor to a business organized in 1909. We operate
as a landholding and operating parent company for our principal subsidiaries, including Maui Pineapple Company, Ltd., a producer and marketer of Maui-grown pineapple, and Kapalua
Land Company, Ltd., the operator of Kapalua Resort, a master-planned community in West Maui. Our reportable operating segments are Agriculture, Resort and Community Development.



The Agriculture segment primarily includes growing, packing, and marketing of fresh pineapple. Our pineapple is sold under the brand
namesMaui Gold®andHawaiian Gold. We also grow and market fresh organic
pineapple. Prior to 2008, a portion of our business included processing (canning) pineapple; however, we ceased substantially all canning and processing of solid-pack product in June 2007.



The Kapalua Resort is part of approximately 22,000 contiguous acres owned by us in West Maui, most of which remains as open space. The
Kapalua Resort borders the ocean with five white sand beaches and includes The Ritz-Carlton, Kapalua hotel, the Ritz-Carlton Club and Residences at Kapalua Bay, eight
residential subdivisions, two championship golf courses (The Bay and The Plantation), a ten-court tennis facility, the first phase of commercial space in the central area of the Kapalua
Resort, several restaurants, and over 800 condominiums, single-family homes and residential lots. We operate Kapalua Resort's two golf courses, the tennis facility, several retail shops, the Kapalua

20

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Villas,
a vacation rental program, and provide certain services to the Kapalua Resort. We currently have approximately 201 units in our Kapalua Villas vacation rental program. Our Resort operations
also include a Mountain Outpost, which is comprised of zip-lines stretching over scenic ravines in the West Maui mountains, a high ropes challenge course, a climbing wall and other
activities.



The Community Development segment includes our real estate entitlement, development, construction, sales, leasing, and conservation
activities. Our projects are focused primarily on the luxury real estate market in and surrounding the Kapalua Resort and affordable and moderately priced residential and mixed use projects in West
Maui and Upcountry Maui. This segment also includes the operations of Kapalua Realty Company, our general brokerage real estate company located within the Resort, and Kapalua Water Company and Kapalua
Waste Treatment Company, our Public Utilities Commission-regulated water and sewage operations that service the Kapalua Resort and adjacent communities.

The
Community Development segment also includes our 51% equity interest in Bay Holdings, the limited liability company that purchased the Kapalua Bay Hotel in August 2004 (see
Note 11 to condensed consolidated financial statements). Bay Holdings demolished the Kapalua Bay Hotel and the adjacent shops in order to develop new whole and fractional residential units, an
ocean-side spa, and a beach club at that location. Construction was completed and the sale of 15 units closed escrow in June 2009.

We
have approximately 1,800 acres of land in Maui that are at various stages in the land entitlement process. We must obtain appropriate entitlements for land that we intend to develop
or use for construction. Securing proper land entitlement is a process that requires obtaining county, state and federal approvals, which can take several years to complete, if at all, and entails a
variety of risks.

In
the latter part of 2008, we concluded that we should delay the start of construction of new development projects because of the global recession, the uncertainty in the national and
local economies, the continuing turmoil in the financial and credit markets, and our cash flow constraints. However, we have continued to engage in planning, permitting and entitlement activities for
our development projects, and we intend to proceed with construction and sales of the following projects, among others, when internal and external factors permit:



21

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Current Developments

For the six months ended June 30, 2009, we incurred a net loss of $67.4 million and had negative cash flows from
operations of $15.1 million. At June 30, 2009, we had amounts outstanding under borrowing agreements of approximately $102 million; and approximately $10.7 million
available under existing lines of credit and $1.5 million in cash and cash equivalents. As a result of the continued poor operating results in 2009, we also had negative working capital of
$42.7 million and a deficiency in stockholders' equity (total liabilities exceeded total assets) of $34.9 million. In March 2010, $58.8 million of borrowings under our two lines
of credit are scheduled to mature. If we are unable to extend the maturity date of our lines of credit or are unable to meet financial covenants resulting in our borrowings becoming immediately due,
we may not have sufficient liquidity to repay such outstanding borrowings. These circumstances raised substantial doubt about our ability to continue as a going concern and there can be no assurance
that we will be able to successfully achieve our initiatives in order to continue as a going concern. See Note 1 to condensed consolidated financial statements.

Some
of our significant events in the second quarter of 2009 were as follows:



Critical Accounting Policies and Estimates

The preparation of consolidated financial statements in conformity with accounting principles generally accepted in the United States
of America requires the use of accounting estimates. Changes in these estimates and assumptions are considered reasonably possible and may have a material effect on the consolidated financial
statements and thus actual results could differ from the amounts reported and disclosed herein. Our critical accounting policies that require the use of estimates and assumptions were discussed in
detail in our most recently filed Form 10-K. There have been no significant changes in our critical accounting policies during 2009.

FASB
Statement No. 167,Amendments to FASB Interpretation No. 46(R), will be effective for us on January 1, 2010. We
are currently evaluating whether this pronouncement will require us to consolidate
any of our unconsolidated affiliates. There are no other accounting pronouncements or interpretations that have been issued but not yet applied by us that we believe will have a material impact on our
consolidated financial statements.

22

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RESULTS OF OPERATIONS

Three Months Ended June 30, 2009 compared to Three Months Ended June 30, 2008

CONSOLIDATED

Three Months Ended
June 30,2009

2008

change(in millions, except share
amounts)Consolidated Revenues

$
13.3

$
17.6

$
(4.3
)Net Income (Loss)

$
(54.2
)
$
0.3

$
(54.5
)Basic Earnings (Loss) Per Common Share

$
(6.75
)
$
0.03

$
(6.78
)


We
reported a net loss of $54.2 million ($6.75 per share) for the second quarter of 2009 compared to net income of $272,000 ($0.03 per share) for the second quarter of 2008. The
net loss for the second quarter of 2009 includes an impairment charge on our investment in Bay Holdings of $21.3 million due to an other-than-temporary decrease in
value, coupled with our equity in losses of Bay Holdings of $2.0 million for the second quarter of 2009, compared to income of $12.0 million attributable to this investment for the
second quarter of 2008. The net loss for the second quarter of 2009 also includes impairment charges of $14.2 million on deferred development costs that are recorded in the Community
Development segment and a write down of $1.9 million on real estate held for sale that is recorded in the Agriculture segment. Consolidated revenues for the second quarter of 2009 were
$13.3 million compared to $17.6 million for the second quarter of 2008. All of our business segments produced lower revenues in the second quarter of 2009. The continuing national and
worldwide economic uncertainty and high transportation costs resulted in reduced visitor counts to Maui and to the State of Hawaii, which negatively affected our Resort segment, and also resulted in
slower sales of, and increased potential default rates, on the residential units at Kapalua Bay, which negatively affected our Community Development segment. In our Agriculture segment we reduced the
size of our fresh pineapple operations as we continued to restructure these operations.



Consolidated general and administrative expenses of $7.9 million for the second quarter of 2009 were approximately 4% lower than
the second quarter of 2008.

The
major components of the difference in general and administrative expenses were as follows:

Three Months Ended
June 30,2009

2008

change(in millions)Salaries and wages

$
1.3

$
2.2

$
(0.9
)Employee incentives and stock compensation


0.3


0.6


(0.3
)Employee severance expense


0.8


0.4


0.4Pension and other post retirement expense


1.3


0.7


0.6Professional services


0.5


1.3


(0.8
)Loss on asset disposals


2.2


0.6


1.6Depreciation expense


1.1


0.5


0.6Other


0.4


1.9


(1.5
)Total

$
7.9

$
8.2

$
(0.3
)


23

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Table of Contents

The
decrease in salaries, wages, employee incentives and stock compensation, and the increase in employee severance expense reflect staffing reductions in all operating segments and in
corporate
services, and a 10% wage rate reduction that was implemented during the first quarter of 2009 that affected nearly all employees.

Increased
pension and other post retirement expense reflects the decrease in value of the assets in our defined benefit pension plans combined with a reduction in the discount rate as of
January 1, 2009 compared to January 1, 2008. On August 3, 2009, our Board of Directors approved a plan amendment to freeze future benefit accruals under our
non-bargaining defined benefit pension plan effective December 31, 2009.

Continued
restructuring of our Agriculture segment operations was responsible for (1) the increase in depreciation expense in 2009, which reflects a reduction in the estimated
useful lives of certain Agriculture segments assets, and (2) fixed asset and inventory write offs in the second quarter of 2009 and 2008. Loss on asset disposals for the second quarter of 2009
also includes a charge of $1.9 million for the settlement payment and forfeiture of a deposit where the Company was obligated to purchase certain real estate at Kapalua Resort.

The
decrease in professional and other services reflects a reduction in use of outside consultants in particular for work performed with regard to testing of internal controls, certain
litigation that was settled earlier in 2009, and corporate communications.

Other
includes insurance, other fringe benefits, charitable contributions, etc.

General
and administrative expenses are incurred at the corporate level and at the operating segment level. All general and administrative expenses incurred at the corporate level are
allocated to our operating segments. Such allocations are made on the basis of our evaluation of service provided to the operating segments.



Interest expense was $3.1 million for the second quarter of 2009 compared to $550,000 for the second quarter of 2008. Interest
of $58,000 was capitalized to construction projects in the second quarter of 2008; there was no interest capitalized in the second quarter of 2009 as construction projects have been delayed due to the
current economic climate and our cash flow constraints. Included in interest expense are credits of $258,000 and $860,000 for the second quarters of 2009 and 2008, respectively, representing the
change in fair value of certain interest rate swap agreements. Also included in interest expense for the second quarter of 2009 is a net charge of $736,000 representing accretion on the carrying value
of our $40 million convertible notes, less the change in the estimated fair value of the derivative liability that was bifurcated from the notes. In 2009,
the increase in interest expense was due to higher average borrowings and higher average interest rates. Our effective interest rate on borrowings was 6.5% in the second quarter of 2009 compared to
5.0% in the second quarter of 2008.

AGRICULTURE

Three Months Ended
June 30,2009

2008

change(in millions)Revenues

$
4.5

$
5.3

$
(0.8
)% of consolidated revenues


34
%

30
%Operating Loss

$
(5.0
)
$
(4.6
)
$
(0.4
)


24

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Table of Contents

Revenues
for the Agriculture segment decreased by 14%, or $749,000, from $5.3 million for the second quarter of 2008 to $4.5 million for the second quarter of 2009,
primarily due to a reduction in pineapple juice sales volume and lower average prices for fresh pineapple. Pineapple juice sales represented approximately 5% of the Agriculture segment revenues in the
second quarter of 2009 compared to approximately 13% of Agriculture segment revenues in the second quarter of 2008. The Agriculture segment reported an operating loss of $5.0 million for the
second quarter of 2009 compared to an operating loss of $4.6 million for the second quarter of 2008. The operating loss for the second quarter of 2009 includes a charge of $1.9 million
representing an adjustment to the fair value less selling costs of our property in Kahului that includes our fresh fruit processing plant. The Kahului property is currently held for sale.



The volume of fresh pineapple case sales was higher by 8% for the second quarter of 2009 although revenue per case sold was lower by
10% in 2009 compared to the second quarter of 2008. Increased case sales volume in the second quarter of 2009 was due to weather-related problems in the second quarter of 2008 that resulted in delayed
ripening of the fruit. Lower average pricing in 2009 reflects quality issues that resulted in certain shipments of pineapple being sold at lower prices.

The
Agriculture segment cost of sales was lower by approximately 16% in the second quarter of 2009 compared to the second quarter of 2008, largely as a result of the lower sales volume
of fresh and processed product, and lower per unit costs as a result of overall cost reduction in the pineapple operations.

Shipping
and marketing cost decreased by 25% in the second quarter of 2009 compared to the second quarter of 2008 because of lower volume of sales and lower average per unit shipping
cost. The average shipping cost was lower in 2009 because in 2008, a greater percentage of products to the mainland United States were sent by air freight, which is more costly than ocean freight.

RESORT

Three Months Ended
June 30,2009

2008

change(in millions)Revenues

$
6.7

$
8.2

$
(1.5
)% of consolidated revenues


50
%

47
%Operating Loss

$
(4.6
)
$
(5.2
)
$
0.6


Resort
segment revenues decreased from $8.2 million in the second quarter of 2008 to $6.7 million for the second quarter of 2009, or 18%, reflecting lower revenues from our
primary Resort operations, golf, retail and villas. The Resort segment reported an operating loss of $4.6 million for the second quarter of 2009 compared to an operating loss of
$5.2 million for the second quarter of 2008. While a reduction in visitor arrivals and occupancy at the Resort, resulting from the national and global economic recession continued to negatively
affect our Resort operations, the reduced loss reflects cost reduction measures that we have implemented. It is anticipated that the continuing global economic recession will continue to negatively
impact resort occupancy rates and operations.



Revenues from golf operations decreased by approximately 16% in the second quarter of 2009 compared to the second quarter of 2008
primarily reflecting a 13% decrease in paid rounds of golf and a 19% decrease in average green and cart fees. Resort retail sales for the second quarter of 2009 were

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approximately
8% lower than the second quarter of 2008, primarily reflecting lower room occupancies and reduced activity throughout the Resort.

Revenues
from the Kapalua Villas were 39% less in the second quarter of 2009 compared to the second quarter of 2008, reflecting a 23% decrease in occupied rooms and a 17% lower average
room rate. Rooms available in the second quarter of 2009 were 2% higher in the second quarter of 2009 partially reflecting the completion of renovation of units in our Kapalua Gold program to upgrade
and standardize the units in our rental program.

COMMUNITY DEVELOPMENT

Three Months Ended
June 30,2009

2008

change(in millions)Revenues

$
1.8

$
3.7

$
(1.9
)% of consolidated revenues


14
%

21
%Operating Profit (Loss)

$
(41.0
)
$
11.0

$
(52.0
)


The
Community Development segment reported an operating loss of $41.0 million for the second quarter of 2009 compared to an operating profit of $11.0 million for the second
quarter of 2008. The operating loss for the second quarter of 2009 includes a charge of $21.3 million representing impairment of our investment in Bay Holdings and a charge of
$14.2 million for the write off of project development plans that due to changing market conditions are no longer feasible as designed. Revenues from this operating segment were
$1.8 million for the second quarter of 2009 compared to $3.7 million for the second quarter of 2008. Lower results in the second quarter of 2009 reflect the absence of real estate sales,
resulting from the economic recession, tight credit markets, reduced demand for real estate, and declining consumer confidence, and losses from our investment in Bay Holdings. We anticipate continued
weakness in real estate sales as these circumstances persist.

Our
equity in the income (losses) of Bay Holdings was $(2.0) million (excluding the effect of the $21.3 million impairment charge mentioned above) in the second quarter of 2009
compared to $12.0 million in the second quarter of 2008. Revenues and profit from sale of the whole and fractional residential condominiums were being recognized on the
percentage-of-completion method from March 2007 through June 2009 as construction progressed and the pre-sales of the units took place. The construction of the 146
units in six residential buildings were completed in the second quarter of 2009, and the sale of 15 units closed escrow. The lower results in 2009 reflect sales concessions and increased default
reserves recorded in 2009.



In the second quarter of 2008, we sold approximately 59 acres of Upcountry Maui land that were considered non-core to our
operations and recognized revenues of approximately $1.8 million and pre-tax profit of approximately $1.7 million.

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Six Months Ended June 30, 2009 compared to Six Months Ended June 30, 2008

CONSOLIDATED

Six Months Ended
June 30,2009

2008

change(in millions, except share
amounts)Consolidated Revenues

$
28.9

$
42.9

$
(14.0
)Net Loss

$
(67.4
)
$
(0.1
)
$
(67.3
)Basic Loss Per Common Share

$
(8.40
)
$
(0.02
)
$
(8.38
)


We
reported a net loss of $67.4 million ($8.40 per share) for the first six months of 2009 compared to $142,000 ($0.02 per share) for the first six months of 2008. The increased
loss reflects charges totaling $24.4 million attributable to our investment in Kapalua Bay Holdings LLC, including an impairment charge of $21.3 million in June 2009 due to an
other-than-temporary decrease in value of our investment; a charge of $14.2 million for the write off of development plans that are no longer considered feasible because
of changing market conditions; and a $1.9 million impairment charge to real estate held for sale. Consolidated revenues for the first six months of 2009 were $28.9 million compared to
$42.9 million for the first six months of 2008. Lower revenues primarily reflect a reduction in real estate sales in 2009, lower hotel and villa occupancies at Kapalua Resort as a result of
reduced visitor counts to Maui and a decrease in fresh pineapple sales.



Consolidated general and administrative expenses decreased by 15%, or $2.7 million to $15.7 million for the first six
months of 2009 from $18.4 million for the first six months of 2008.

The
major components of the difference in general and administrative expenses were as follows:

Six Months Ended
June 30,2009

2008

change(in millions)Salaries and wages

$
2.8

$
4.6

$
(1.8
)Employee incentives and stock compensation


0.5


1.3


(0.8
)Employee severance expense


1.5


0.4


1.1Pension and other post retirement expense


2.6


1.3


1.3Professional services


1.5


3.0


(1.5
)Loss on asset disposals


3.0


1.7


1.3Depreciation expense


2.2


0.5


1.7Other


1.6


5.6


(4.0
)Total

$
15.7

$
18.4

$
(2.7
)


The
decrease in salaries, wages, employee incentives and stock compensation, and the increase in employee severance expense reflect staffing reductions in all operating segments and in
corporate services, and a 10% wage rate reduction that was implemented during the first quarter of 2009 that affected nearly all employees.

Increased
pension and other post retirement expense reflects the decrease in value of the assets in our defined benefit pension plans combined with a reduction in the discount rate as of
January 1, 2009 compared to January 1, 2008.

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The
increase in depreciation expense in 2009 primarily reflects a reduction in the estimated useful lives of certain Agriculture segments assets.

Loss
on asset disposals for the first six months of 2009 includes a charge of $1.9 million for the settlement payment and forfeiture of a deposit where the Company was obligated
to purchase certain real estate at Kapalua Resort. It also includes the write off of Agriculture segment assets as a result of the continued restructuring of that operating segment and the write off
of excess assets at Kapalua Resort in 2008.

The
decrease in professional and other services reflects a reduction in use of outside consultants in particular for work performed with regard to testing of internal controls, certain
litigation that was settled earlier in 2009, and corporate communications.

Other
includes insurance, pensions and other benefits, charitable contributions, etc.

General
and administrative expenses are incurred at the corporate level and at the operating segment level. All general and administrative expenses incurred at the corporate level are
allocated to the operating segments. Such allocations are consistent with our evaluation of services provided to the operating segments.



Interest expense was $4.5 million for the first six months of 2009 compared to $1.9 million for the first six months of
2008. Interest incurred in the first six months of 2009 was $4.6 million of which $18,000 was capitalized. In the first six months of 2008 interest incurred was $2.2 million of which
$258,000 was capitalized to construction projects. Interest expense for the first six months of 2009 and 2008 includes a credit of $487,000 and $339,000 representing the change in the
estimated fair value of the swap agreements entered into in January 2008 (see Note 15 to condensed consolidated financial statements). Also included in interest expense for the first six months
of 2009 is a charge of $119,000 representing interest accretion on our $40 million convertible notes of $1,543,000, less a credit of $1,424,000 representing the change in the estimated fair
value of the derivative liability that was bifurcated from the notes. Our effective interest rate on borrowings was 5.6% for the first six months of 2009 compared to 5.2% for the first six months of
2008. The increase in interest expense was due to higher average borrowings and interest rates in the first six months of 2009.

AGRICULTURE

Six Months Ended
June 30,2009

2008

change(in millions)Revenues

$
9.4

$
13.7

$
(4.3
)% of consolidated revenues


33
%

32
%Operating Loss

$
(8.5
)
$
(9.7
)
$
1.2


The
Agriculture segment recorded an operating loss of $8.5 million for the first six months of 2009 compared to an operating loss of $9.7 million for the first six months
of 2008. Included in the operating loss for the first six months of 2009 is a charge of $1.9 million representing an adjustment to the estimated fair value less selling costs of our property in
Kahului that includes our fresh fruit processing plant. The Kahului property is currently held for sale. Revenues for the first six months of 2009 were $9.4 million or 31% lower than the first
six months of 2008, due primarily to lower sales volume of fresh pineapple. In 2007, we ceased the production of all solid-packed pineapple products. Therefore, in the first six months of 2009 and
2008, processed pineapple sales are comprised solely of juice sales,

28

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which
represented approximately 3% and 12% of the Agriculture segment revenues in the first six months of 2009 and 2008, respectively.



The case volume of fresh pineapple sales decreased by approximately 26% in the first six months of 2009 compared to the first six
months of 2008, and average revenue per case was approximately the same for both periods. Lower case sales volume in 2009 reflects a selective sales strategy that was expected to improve net returns.

The
Agriculture segment cost of sales was lower by approximately 31% in the first six months of 2009 compared to the first six months of 2008, largely as a result of the lower sales
volume of fresh and processed product. Per unit cost of sales decreased in 2009 compared to 2008 because of a 10% reduction in salaries and wages that was implemented in March of 2009 and also because
planting was minimized in 2009 as management continues to evaluate the best course of action for the future of the pineapple operations. Juice is accounted for as a by-product and the cost
of the product includes the additional direct factory cost of processing fruit that is not suitable to be sold as fresh fruit product into juice.

Shipping
and marketing cost decreased by 19% in the first six months of 2009 compared to the first six months of 2008 primarily because of lower volume of sales and lower average
shipping cost. Average shipping cost was lower in 2009 because relatively more shipments to the mainland United States were by ocean transportation in 2009, which is less costly than shipment by air
freight.

RESORT

Six Months Ended
June 30,2009

2008

change(in millions)Revenues

$
15.3

$
19.9

$
(4.6
)% of consolidated revenues


53
%

46
%Operating Loss

$
(8.8
)
$
(7.4
)
$
(1.4
)


The
Resort segment reported an operating loss of $8.8 million for the first six months of 2009 compared to an operating loss of $7.4 million for the first six months of
2008. Resort segment revenues were $15.3 million or 23% lower for the first six months of 2009 compared to the same period in 2008. Our primary Resort operations, golf, retail and villas
reported lower results largely reflecting the reduction in visitor arrivals to Maui as a result of the current economic recession.



Revenues from golf operations decreased by approximately 16% in the first six months of 2009 compared to the first six months of 2008
as a result of a decrease in paid rounds of golf coupled with an approximately 6% decrease in average green and cart fees. Revenues from the Kapalua Villas operations were 48% less in the first six
months of 2009 compared to the first six months of 2008 reflecting a 36% decrease in occupied rooms and a 13% decrease in average room rates. Resort retail sales for the first six months of 2009 were
approximately 10% lower than the same period in 2008.

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COMMUNITY DEVELOPMENT

Six Months Ended
June 30,2009

2008

change(in millions)Revenues

$
3.8

$
8.3

$
(4.5
)% of consolidated revenues


13
%

19
%Operating Profit (Loss)

$
(44.2
)
$
19.1

$
(63.3
)


The
Community Development segment reported an operating loss of $44.2 for the first six months of 2009 compared to operating profit of $19.1 million for the first six months of
2008. Revenues from this operating segment were $3.8 million for the first six months of 2009 compared to $8.3 million for the same period in 2008. The reduction in revenues primarily
reflects the absence of real estate sales in 2009. The operating loss for the first six months of 2009 includes a charge of $21.3 million representing an
other-than-temporary impairment in the value of our investment in Bay Holdings (Note 11 to condensed consolidated financial statements) and a charge of
$14.2 million for the write off of development plans that are no longer considered feasible because of changing market conditions.

Our
equity in the income (losses) of Kapalua Bay Holdings, LLC was $(3.1) million in the first six months of 2009 (excluding the $21.3 million impairment charge discussed
above) compared to $21.4 million in the first six months of 2008. Revenues and profit from sale of the whole and fractional residential condominiums were being recognized on the
percentage-of-completion method from March 2007 through June 2009 as construction progressed and the pre-sales of the units took place. The construction of the six
residential buildings and the amenities were completed in June 2009, and the sale of 15 units closed escrow. The lower results in 2009 reflect sales discounting and increased default reserves recorded
in 2009.



In the first six months of 2008, we sold approximately 111 acres of Upcountry Maui land that was considered non-core to our
operations and recognized revenues of $4.4 million and pre-tax profit of approximately $4.1 million.

LIQUIDITY AND CAPITAL RESOURCES



At June 30, 2009, our total debt, including capital leases, was $94.5 million, compared to $137.0 million at
December 31, 2008. The decrease in outstanding debt in the first half of 2009 was due to proceeds from the sale of the PGC in March 2009 being applied to partially repay our revolving line of
credit with Wells Fargo and certain other lenders (Note 10 to condensed consolidated financial statements). At June 30, 2009, we had $1.5 million in cash and cash equivalents and
$10.7 million available under existing lines of credit. In March 2010, $58.8 million of borrowings under our two available lines of credit is scheduled to mature. The lines of credit
have financial covenants requiring, among other things, a minimum of $10 million in liquidity and a limitation on new indebtedness. As of June 30, 2009, our liquidity as defined under
the credit agreements was $12.2 million. Our ability to continue meeting its financial covenants under these agreements is dependent on our ability to reduce cash outflows from operations and
sell selected real estate assets in a difficult market environment. Failure to satisfy the minimum liquidity covenants or to otherwise default under one credit agreement could result in a default
under both credit agreements as well as a default under the $40 million senior secured convertible notes. Defaults under the credit agreements could result in all outstanding borrowings
becoming immediately due and payable. A default under the senior secured convertible notes could require us to redeem the notes at 115% of the outstanding amount of principal and

30

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Table of Contents

accrued
interest. At June 30, 2009, these circumstances gave rise to substantial doubt as to our ability to continue as a going concern.

In
response to these circumstances, we are undertaking several financial and strategic initiatives to amend the terms of our credit agreements, reduce cash commitments and generate cash
flow from a variety of sources, including the sale of several real estate assets. We have renegotiated agreements to eliminate approximately $6 million of 2009 cash commitments (net of
cancellation fees); and are currently in the process of negotiating additional 2009 cash deferrals. We are in discussions with both lenders to further amend our line of credit and revolving loan
agreements to extend the maturity dates beyond March 2010, and to increase the amounts available under the line of credit agreement based, in part, on a re-appraisal of the properties
securing the line of credit and by providing additional properties as collateral under the agreement. In addition, we have taken several other actions to reduce cash outflows including reducing our
total number of employees by approximately 159 in the first half of 2009, as well as other measures to reduce operating expenses. We are actively in the
process of attempting to sell several selected real estate assets to provide additional liquidity and to further reduce debt.

There
can be no assurance that we will be able to sell real estate assets at acceptable prices, or at all, or that we will be able to restructure our borrowing arrangements sufficient to
maintain compliance with financial covenants or to continue as a going concern. Our ability to continue as a going concern requires a combination of asset sales, credit agreement amendments and
operational efficiencies, all of which must be executed in a difficult market environment. Failure to sell real estate assets or to amend our credit agreements would have a material adverse impact on
our financial condition and results of operations and could result in our inability to continue as a going concern.



In July 2006, Bay Holdings, in which we have a 51% interest, entered into a syndicated construction loan agreement with Lehman, for the
lesser of $370 million or 61.6% of the total projected cost of the project. Lehman's commitment under the loan agreement was approximately 78% of the total. On September 15, 2008, Lehman
filed a petition under Chapter 11 of the U.S. Bankruptcy Code with the United States Bankruptcy Court. In February 2009, Bay Holdings entered into an amended and restated construction loan
agreement with Lehman, Swedbank, MH Kapalua Venture, LLC, an affiliate of Marriott, and certain other syndicate lenders, pursuant to which Bay Holdings may borrow an aggregate of approximately
$354.5 million, including amounts previously funded under the original construction loan agreement (see Note 11 to condensed consolidated financial statements).



In March 2009, we executed two amendments to our revolving line of credit agreement with American AgCredit, FLCA. The amendments
eliminated certain financial covenants as of and for the year ended December 31, 2008; suspended certain financial covenants for 2009; added financial covenants for 2009 requiring the
maintenance of a minimum liquidity amount of $10 million and restrictions on new indebtedness; and increased the interest rate on loan draws by 60 to 110 basis points. The amendments also
accelerated the maturity of the loan from June 2011 to March 2010 and currently require the reappraisal of all collateral and a permanent pay down if the collateral value is less than 50% of the loan
commitment. As of June 30, 2009, this $25 million line of credit was fully drawn.

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Table of Contents



Also in March 2009, we executed two amendments of our revolving line of credit agreement with Wells Fargo Bank and certain other
lenders, to be in compliance with the financial covenants as of December 31, 2008. The amendments also eliminated all financial covenants except for the maintenance of a minimum liquidity
amount of $10 million and limitations on additional indebtedness; extended the maturity of the facility to March 2010 from November 2009; requires the reappraisal of the properties
collateralizing the facility and the reduction of the available credit or addition of collateral to maintain a 50% loan commitment to collateral value; eliminated the restriction on the lenders'
recourse to recover against us; and increased the interest rate on loan draws by 275 basis points. In connection with the sale of PGC, we applied $45 million of proceeds against outstanding
borrowings under this line of credit, which was partially collateralized by the PGC, and the available credit was reduced from $90 million to $45 million. As of June 30, 2009, we
had $34.3 million outstanding or encumbered to secure letters of credit, and $10.7 million available under this line.



On July 28, 2008, we issued $40 million in aggregate principal amount of convertible notes, bearing 5.875% interest per
annum payable quarterly in cash in arrears beginning October 15, 2008. The convertible notes mature on July 15, 2013, subject to earlier conversion or redemption under certain conditions
as specified in the notes. As of June 30, 2009, we had $40.5 million in principal and accrued but unpaid interest outstanding under the convertible notes.

As
of June 30, 2009, we were in compliance with all of the covenants under our outstanding debt arrangements.



In the first six months of 2009, consolidated net cash used in operating activities was $15.1 million compared to net cash used
in operating activities of $25.7 million for the first six months of 2008. By operating segment, these cash flows were approximately as follows:

Six Months
Ended
June 30,2009

2008(in millions)Agriculture

$
(3.2
)
$
(12.5
)Resort


(5.1
)

(5.9
)Community Development


(2.1
)

(7.9
)Interest, taxes and other


(4.7
)

0.6Total

$
(15.1
)
$
(25.7
)


The
reduction in cash used in operating activities in the first six months of 2009 compared to 2008 primarily reflects cost reduction measures that we began implementing in the later
part of 2008 and in the first half of 2009. Operating cash flows for the first six months of 2009 and 2008 did not include the sale of new real estate product and there was no construction of real
estate inventories in 2009 or 2008.



In order to meet liquidity covenants required by our borrowing agreements, and to supplement negative cash flows from operations, our
plans for 2009 include the sales of certain operating and non-operating real estate assets combined with the leaseback of properties as necessary. However, there can be no assurance that
we will be able to sell real estate assets at acceptable prices, or at all, or to

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take
other necessary steps to maintain compliance with financial covenants or to continue as a going concern. Failure to sell real estate assets or to take these other steps would have a material
adverse impact on our financial condition and results of operations and could result in our inability to continue as a going concern.

In
2009, minimum required contributions to our defined benefit pension plans are expected to be $2.1 million. We may defer contributions to our pension plans and to the extent
that payments are deferred, we would be required to pay interest on all deferred amounts. To date in 2009, we have made all required minimum contributions to our defined benefit pension plans in 2009,
which total $1.1 million. Our net pension liability and minimum required contribution amounts are calculated based upon an assessment of several variables including employee compensation
levels, employee turnover rates, the expected long term rate of return on investments, and other factors that are difficult to ascertain. Any significant changes in any one or more of these variables
could materially affect our net pension liability and required minimum contributions. We expect to contribute $835,000 to our other post-retirement benefit plans in 2009.

In
2009, capital expenditures and expenditures for deferred development cost have been reduced, except for expenditures that are necessary to maintain our operations and standards of
quality at the Kapalua Resort. Capital expenditures planned for 2009 total $2.0 million primarily for replacement of equipment.

In
connection with the PGC sale and leaseback, we are obligated to replace the irrigation system prior to the end of the two-year leaseback term. The replacement costs are
capped at $5 million under the terms of the agreement. In addition, our annual net rental payment under the lease is $4.0 million.

We
are obligated to purchase the spa, beach club improvements and the sundry store from Bay Holdings at actual construction costs of approximately $35 million. We are negotiating
the terms of the purchase with the members of Bay Holdings, and expect to fund most of the purchase in future years.

CONTRACTUAL OBLIGATIONS

The following summarizes our contractual obligations as of June 30, 2009 (in thousands):

Payment due by period (years)Contractual Obligations

Total

Less Than 1

1 - 3

4 - 5

After 5Long-term debt(1)

$
98,800

$
58,800

$


$
40,000

$
Capital lease obligations (including interest)


3,419


1,231


1,512


510


166Interest on long-term debt(2)(7)


16,104


7,163


6,460


2,481


Operating leases(3)


2,157


563


1,168


389


37Purchase commitments(3)(6)


9,560


3,364


2,611


1,942


1,643Other long-term liabilities(4)(5)(7)


6,613


1,982


2,426


1,088


1,117Total

$
136,653

$
73,103

$
14,177

$
46,410

$
2,963


---

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FORWARD-LOOKING STATEMENTS AND RISKS

This and other reports filed by us with the Securities and Exchange Commission, or SEC, contain forward-looking statements intended to
qualify for the safe harbor from liability established by the Private Securities Litigation Reform Act of 1995. These statements relate to future events or our future financial performance and involve
known and unknown risks, uncertainties and other factors that may cause our actual results, levels of activity, performance or achievements to differ materially from any future results, levels of
activity, performance or achievements expressed or implied by these forward-looking statements. These statements can be identified by the fact that they do not relate strictly to historical or current
facts. They contain words such as "may," "will," "project," "might," "expect," "believe," "anticipate," "intend," "could," "would," "estimate," "continue" or "pursue," or the negative or other
variations thereof or comparable terminology. Actual results could differ materially from those projected in forward-looking statements as a result of the following factors, among others.



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Such
risks and uncertainties also include those risks and uncertainties discussed in the sections entitled "Business," "Risk Factors," and "Management's Discussion and Analysis of
Financial Condition and Results of Operations" in our Annual Report on Form 10-K for the year ended December 31, 2008, and the sections entitled "Management's Discussion and
Analysis of Financial Condition and Results of Operations" and "Risk Factors" in this Quarterly Report on Form 10-Q, as well as other factors described from time to time in our
reports filed with
the SEC. Although we believe that our opinions and expectations reflected in the forward-looking statements are reasonable as of the date of this report, we cannot guarantee future results, levels of
activity, performance or achievements, and our actual results may differ substantially from the views and expectations set forth in this report. Thus, you should not place undue reliance on any
forward-looking statements. New factors emerge from time to time, and it is not possible for us to predict which factors will arise. In addition, we cannot assess the impact of each factor on our
business or the extent to which any factor, or combination of factors, may cause actual results to differ materially from those contained in any forward-looking statements. Further, any
forward-looking statements speak only as of the date made and, except as required by law, we undertake no obligation to publicly revise our forward-looking statements to reflect events or
circumstances that arise after the date of this report.

Item 3.    Quantitative and Qualitative Disclosures about Market Risk

Our primary market risk exposure with regard to financial instruments is to changes in interest rates. We attempt to manage this risk
by monitoring interest rates and future cash requirements, and evaluating opportunities to refinance borrowings at various maturities and interest rates. At June 30, 2009, $3.8 million
of our borrowings carried interest rates that was variable with LIBOR rates and the remaining borrowings carried interest at fixed rates, which includes $55 million of variable rate that is
converted to fixed rate debt by interest rate swap agreements. In January 2008, we entered into interest rate swap agreements for approximately two years on $55.0 million of variable rate debt.
We completed the swap agreements in order to reduce the variability in cash flows attributable to interest rate risk caused by changes in short-term LIBOR rates. The effect of the swaps is
to convert variable-rate interest expense, which was previously tied to 1-, 2-, 3- and 6-month LIBOR terms, to an average fixed rate
interest of approximately 2.9%, before applicable interest rate spreads. The estimated fair value of these derivative instruments was a liability of approximately $673,000 as of June 30, 2009.

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Item 4.    Controls and Procedures

We maintain disclosure controls and procedures (as such term is defined in Rules 13a-15(e) and 15d-15(e)
under the Securities Exchange Act of 1934, as amended) that are designed to ensure that information required to be disclosed in our
Exchange Act reports is recorded, processed, summarized and reported within the time periods specified in the SEC's rules and forms, and that such information is accumulated and communicated to our
management, including our Interim Chief Executive Officer and Chief Financial Officer, as appropriate, to allow timely decisions regarding required disclosure.

In
designing and evaluating the disclosure controls and procedures, our management recognizes that any controls and procedures, no matter how well designed and operated, can provide only
reasonable assurance of achieving the desired control objectives, and our management necessarily was required to apply its judgment in evaluating the cost-benefit relationship of possible
controls and procedures.

As
required by Rule 13a-15(b) and 15d-15(b) under the Exchange Act, we carried out an evaluation, under the supervision and with the participation of our
management, including our Interim Chief Executive Officer and Chief Financial Officer, of the effectiveness of the design and operation of our disclosure controls and procedures as of the end of the
fiscal quarter covered by this report. Based upon the foregoing, our Interim Chief Executive Officer and Chief Financial Officer concluded that our disclosure controls and procedures were effective to
provide reasonable assurance that information required to be disclosed by us in our Exchange Act reports is recorded, processed, summarized and reported within the time periods specified in applicable
SEC rules and forms. There has been no change in our internal control over financial reporting during the six months ended June 30, 2009 that has materially affected or is reasonably likely to
materially affect our internal control over financial reporting.

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PART II OTHER INFORMATION

Item 1A.    Risk Factors

Potential risks and uncertainties include, among other things, those factors discussed in the sections entitled "Business", "Risk
Factors" and "Management's Discussion and Analysis of Financial Condition and Results of Operations" in our Annual Report on Form 10-K for the year ended December 31, 2008
and the section entitled "Management's Discussion and Analysis of Financial Condition and Results of Operations" in this Quarterly Report on Form 10-Q. Readers should carefully
review those risks, as well as additional risks described in other documents we file from time to time with the SEC. We undertake no obligation to publicly release the results of any revisions to any
forward-looking statements to reflect
anticipated or unanticipated events or circumstances occurring after the date of such statements.

Item 4.    Submission of Matters to a Vote of Security Holders

On May 4, 2009, we held the 2009 the annual meeting of our shareholders, or the Annual Meeting. Proxies for the Annual Meeting
were solicited pursuant to Regulation 14A under the Securities Exchange Act of 1934. The number of outstanding shares as of March 9, 2009, the record date of the Annual Meeting, was
approximately 8,141,988. The results of the voting were as follows:

Proposal 1: Election of Class One Directors for a three-year term:

Shares Voted For

Shares WithheldStephen M. Case


7,036,232


162,807David C. Cole


7,021,385


177,654Walter A. Dods, Jr.


7,034,220


164,819Fred E. Trotter, III


7,038,774


160,265


Proposal 2: Ratification of Deloitte & Touche LLP as our independent registered public accounting firm for the fiscal year 2009:

Shares voted for:


7,113,702Shares voted against:


73,680Shares abstained:


11,657


There
were no broker non-votes on any matter voted upon at the Annual Meeting. Except as set forth above with respect to Proposal 2, there were no abstentions with respect to
any matter voted upon at the Annual Meeting.

The
terms of the following members of our Board of Directors continued after the annual meeting: John H. Agee, Miles R. Gilburne, Warren H. Haruki, David A. Heenan, Kent T. Lucien and
Duncan MacNaughton.

Item 5.    Other Information

On August 3, 2009, the Company entered into Restricted Stock Award Grant Notices and Agreements with the following executives
for restricted shares that vest quarterly over a five year period: Warren H. Haruki, Executive Chairman and Interim Chief Executive Officer56,000 shares; John P. Durkin, Chief Financial
Officer48,000 shares; Ryan L. Churchill, Senior Vice President/ Corporate Development48,000 shares. The foregoing description of the Restricted Stock Award Grant Notices and
Agreements are not complete and are qualified in their entirety by reference to the agreements filed herewith as Exhibits 10.1, 10.2 and 10.3.

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Item 6.    Exhibits

(10)



Material Contracts10.1

Restricted Stock Award Grant Notice and Agreement dated August 3, 2009, between Maui Land & Pineapple Company, Inc. and Warren H. Haruki.10.2

Restricted Stock Award Grant Notice and Agreement dated August 3, 2009, between Maui Land & Pineapple Company, Inc. and John P. Durkin.10.3

Restricted Stock Award Grant Notice and Agreement dated August 3, 2009, between Maui Land & Pineapple Company, Inc. and Ryan L. Churchill.(31)



Rule 13a-14(a) Certifications31.1

Certification of Chief Executive Officer Pursuant to Rule 13a-14(d) / 15d-14(a) of the Securities Exchange Act of 1934.31.2

Certification of Chief Financial Officer Pursuant to Rule 13a-14(d) / 15d-14(a) of the Securities Exchange Act of 1934.(32)

32.1

Certification of Chief Executive Officer and Chief Financial Officer Pursuant to Rule 13a-14(b) / 15d-14(b) of the Securities Exchange Act of 1934 and 18 U.S.C. Section 1350.


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SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its
behalf by the undersigned thereunto duly authorized.

MAUI LAND & PINEAPPLE COMPANY, INC.August 3, 2009 Date



/s/ JOHN P. DURKIN John P. Durkin Chief Financial Officer(Principal Financial Officer)


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EXHIBIT INDEX

Exhibit Number

Description10.1

Restricted Stock Award Grant Notice and Agreement dated August 3, 2009, between Maui Land & Pineapple Company, Inc. and Warren H. Haruki.10.2

Restricted Stock Award Grant Notice and Agreement dated August 3, 2009, between Maui Land & Pineapple Company, Inc. and John P. Durkin.10.3

Restricted Stock Award Grant Notice and Agreement dated August 3, 2009, between Maui Land & Pineapple Company, Inc. and Ryan L. Churchill.31.1

Certification of Chief Executive Officer Pursuant to Rule 13a-14(d)/15d-14(a) of the Securities Exchange Act of 1934.(1)31.2

Certification of Chief Financial Officer Pursuant to Rule 13a-14(d)/15d-14(a) of the Securities Exchange Act of 1934.(1)32.1

Certification of Chief Executive Officer and Chief Financial Officer Pursuant to Rule 13a-14(b) / 15d-14(b) of the Securities Exchange Act of 1934 and 18 U.S.C. Section 1350.(2)


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