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 SEPTEMBER 30, 2008ORo

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.)


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 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 November 1, 2008Common Stock, no par value



8,170,895 shares




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MAUI LAND & PINEAPPLE COMPANY, INC.
AND SUBSIDIARIES

TABLE OF CONTENTS

PagePART I. FINANCIAL INFORMATION (unaudited)Item 1. Financial StatementsCondensed Consolidated Balance Sheets, September 30, 2008 and December 31, 2007

3Condensed Consolidated Statements of Operations and Retained Earnings,
Three Months Ended September 30, 2008 and 2007

4Condensed Consolidated Statements of Operations and Retained Earnings,
Nine Months Ended September 30, 2008 and 2007

5Condensed Consolidated Statements of Cash Flows,
Nine Months Ended September 30, 2008 and 2007

6Notes to Condensed Consolidated Financial Statements

7Item 2. Management's Discussion and Analysis of Financial Condition and
Results of Operations

17Forward-Looking Statements

30Item 3. Quantitative and Qualitative Disclosures About Market Risk

31Item 4. Controls and Procedures

31PART II. OTHER INFORMATIONItem 1A. Risk Factors

32Item 6. Exhibits

37Signature

38


2

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PART I FINANCIAL INFORMATION

Item 1.    Financial Statements

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

9/30/08

12/31/07(in thousands)ASSETSCurrent AssetsCash and cash equivalents

$
4,791

$
1,991Accounts and notes receivable, net


8,682


10,227Inventories


13,771


11,168Other current assets


12,206


3,735Total current assets


39,450


27,121Property


241,221


238,623Accumulated depreciation


(99,872
)

(98,076
)Propertynet


141,349


140,547Investments in affiliates


86,432


59,792Other assets


44,449


43,716Total

$
311,680

$
271,176LIABILITIES AND STOCKHOLDERS' EQUITYCurrent LiabilitiesCurrent portion of long-term debt and capital lease obligations

$
2,136

$
1,631Trade accounts payable


9,475


15,776Other current liabilities


16,644


10,898Total current liabilities


28,255


28,305Non-Current LiabilitiesLong-term debt and capital lease obligations


110,432


60,077Accrued retirement benefits


35,244


29,349Other non-current liabilities


23,852


23,178Total non-current liabilities


169,528


112,604Commitments and Contingencies (Note 16)Stockholders' EquityCommon stock, no par value23,000,000 shares authorized, 7,961,850 and 7,959,154 issued and outstanding


34,286


34,168Additional paid-in capital


8,408


6,769Retained earnings


77,117


90,576Accumulated other comprehensive loss


(5,914
)

(1,246
)Stockholders' Equity


113,897


130,267Total

$
311,680

$
271,176


See
accompanying Notes to Condensed Consolidated Financial Statements.

3

---





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

Three Months Ended9/30/08

9/30/07(in thousands except share amounts)Operating RevenuesProduct revenues

$
10,802

$
21,151Service revenues


8,317


7,343Total Operating Revenues


19,119


28,494Operating Costs and ExpensesCost of product revenues


12,173


12,973Cost of service revenues


10,419


8,550Shipping and marketing


3,318


4,866General and administrative


11,046


7,075Pineapple restructuring charges (Note 17)





(260
)Total Operating Costs and Expenses


36,956


33,204Operating Loss


(17,837
)

(4,710
)Equity in income of affiliates


5,047


4,920Interest expense


(1,381
)

(405
)Interest income


45


150Loss Before Income Taxes


(14,126
)

(45
)Income Tax (Expense) Benefit


5,431


(110
)Net Loss


(8,695
)

(155
)Retained Earnings, Beginning of Period


85,812


94,769Retained Earnings, End of Period

$
77,117

$
94,614Loss Per Common ShareBasic

$
(1.09
)
$
(0.02
)Diluted

$
(1.09
)
$
(0.02
)


See
accompanying Notes to Condensed Consolidated Financial Statements.

4

---





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

Nine Months Ended9/30/08

9/30/07(in thousands except share amounts)Operating RevenuesProduct revenues

$
36,342

$
101,570Service revenues


25,707


26,597Total Operating Revenues


62,049


128,167Operating Costs and ExpensesCost of product revenues


29,751


44,489Cost of service revenues


30,371


27,642Shipping and marketing


10,195


12,184General and administrative


29,398


26,974Pineapple restructuring charges (Note 17)





5,156Total Operating Costs and Expenses


99,715


116,445Operating Income (Loss)


(37,666
)

11,722Equity in income of affiliates


26,446


9,003Interest expense


(3,323
)

(1,449
)Interest income


247


791Income (Loss) Before Income Taxes


(14,296
)

20,067Income Tax (Expense) Benefit


5,459


(8,018
)Net Income (Loss)


(8,837
)

12,049Retained Earnings, Beginning of Period


90,576


82,765Cumulative impact of change in accounting for revenues from real estate sales (EITF 06-8see Note 8)


(4,622
)

Cumulative impact of change in accounting for uncertainties in income taxes (FIN 48see Note 14)





(200
)Retained Earnings, End of Period

$
77,117

$
94,614Earnings (Loss) Per Common ShareBasic

$
(1.11
)
$
1.55Diluted

$
(1.11
)
$
1.54


See
accompanying Notes to Condensed Consolidated Financial Statements.

5

---





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

Nine Months Ended9/30/08

9/30/07(in thousands)Net Cash Used in Operating Activities

$
(40,825
)
$
(3,292
)Investing ActivitiesPurchases of property


(12,389
)

(21,788
)Contributions to affiliates


(7,855
)

(9,565
)Proceeds from disposal of property


7,932


45,269Other


(1,326
)

(6,953
)Net Cash Provided by (Used in) Investing Activities


(13,638
)

6,963Financing ActivitiesPayments of long-term debt and capital lease obligations


(54,954
)

(85,711
)Proceeds from long-term debt


113,700


66,150Stock option exercises


14


1,422Stock issuance





14,944Debt issuance costs


(1,497
)

Net Cash Provided by (Used in) Financing Activities


57,263


(3,195
)Net Increase in Cash and Cash Equivalents


2,800


476Cash and Cash Equivalents at Beginning of Period


1,991


1,143Cash and Cash Equivalents at End of Period

$
4,791

$
1,619


Supplemental
Disclosures of Cash Flow InformationInterest (net of amounts capitalized) of $3,582,000 and $1,178,000 was paid during the nine months ended
September 30, 2008 and 2007, respectively. Income taxes of ($4,052,000) and $3,862,000 were (refunded) paid during the nine months ended September 30, 2008 and 2007, respectively.

Non-Cash
Investing Activities



6

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

9/30/08

12/31/07(in thousands)Pineapple productsfinished goods

$
3,116

$
1,112Real estate held for sale


3,255


3,255Merchandise, materials and supplies


7,400


6,801Total Inventories

$
13,771

$
11,168




7

---





Three Months Ended
September 30,

Nine Months Ended
September 30,2008

2007

2008

2007Basic


7,959,850


7,929,183


7,961,516


7,759,616Diluted


7,959,850


7,929,183


7,961,516


7,825,804






8

---







9

---





Three Months Ended
September 30,

Nine Months Ended
September 30,2008

2007

2008

2007(in thousands)Revenues

$
39,758

$
33,106

$
164,200

$
77,496Expenses


31,672


25,259


120,842


64,037Net Income

$
8,086

$
7,847

$
43,358

$
13,459






10

---





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, 2007


822,833

$
32.51Granted


5,000

$
26.45

$
10.80Exercised


(500
)
$
27.25

$
10.07Forfeited or Cancelled


(40,500
)
$
33.23

$
13.75Outstanding at September 30, 2008


786,833

$
32.44

$
13.27


6.3

$
23Exercisable at September 30, 2008


466,803

$
31.55

$
13.05


5.5

$
7Expected to Vest at September 30, 2008(2)


258,456

$
33.73

$
13.59


7.4

$
15


---



2008

2007Weighted average grant-date fair value for options granted during the period

$
10.80

$
13.40Intrinsic value of options exercised $(000)

$
4

$
759Cash received from option exercises $(000)

$
14

$
1,422Tax benefit from option exercises $(000)

$


$
Fair value of shares vested during the period $(000)

$
1,575

$
1,510




2008

2007Expected life of options in years


6.5


6.5Expected volatility


33.8
%

31.5
%Risk-free interest rate


3.4
%

4.6
%Expected dividend yield










11

---





Shares

Weighted Average Grant-Date Fair ValueNonvested balance at December 31, 2007


146,795

$
34.39Granted


84,000

$
24.42Vested


(6,000
)
$
34.73Forfeited or Cancelled


(15,750
)
$
32.96Nonvested balance at September 30, 2008


209,045

$
31.48




Three Months Ended
September 30,

Nine Months Ended
September 30,2008

2007

2008

2007(in thousands)Pension BenefitsService cost

$
255

$
507

$
1,205

$
1,376Interest cost


935


823


2,647


2,520Expected return on plan assets


(806
)

(970
)

(2,694
)

(2,696
)Amortization of prior service cost


11


13


37


36Amortization of transition liability


4


4


14


16Recognized actuarial loss


111


7


223


319Contractual termination benefits


33





33


369Curtailment loss


102





102


27Net expense

$
645

$
384

$
1,567

$
1,967Other BenefitsService cost

$
54

$
76

$
212

$
227Interest cost


181


159


605


557Amortization of prior service cost





(8
)




(24
)Recognized actuarial gain


(187
)

(176
)

(379
)

(420
)Special termination benefits











36Curtailment gain


(421
)

(260
)

(421
)

(398
)Net expense (income)

$
(373
)
$
(209
)
$
17

$
(22
)




12

---







Interest rate swap agreements

$
134,000Derivative liability

$
(8,644,000
)






13

---





Three Months Ended
September 30,

Nine Months Ended
September 30,2008

2007

2008

2007(in thousands)Operating RevenuesAgriculture

$
7,236

$
10,336

$
20,971

$
37,306Resort


9,101


7,783


28,989


28,349Community Development


2,220


9,983


10,517


61,325Other


562


392


1,572


1,187Total Operating Revenues

$
19,119

$
28,494

$
62,049

$
128,167Operating Profit (Loss)Agriculture

$
(9,533
)
$
(5,605
)
$
(19,257
)
$
(18,596
)Resort


(5,652
)

(3,060
)

(13,089
)

(6,730
)Community Development(1)


2,461


9,009


21,517


46,220Other


(66
)

(134
)

(391
)

(169
)Total Operating Profit (Loss)


(12,790
)

210


(11,220
)

20,725Interest Expense


(1,381
)

(405
)

(3,323
)

(1,449
)Interest Income


45


150


247


791Income Tax (Expense) Benefit


5,431


(110
)

5,459


(8,018
)Net Income (Loss)

$
(8,695
)
$
(155
)
$
(8,837
)
$
12,049








14

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15

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16

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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, 2007 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. In 2007, 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
fresh fruit market is a year-round business, which requires consistency of supply. Over the past several years, we have made significant progress in changing our
agronomic practices and planting schedules to produce a more consistent and predictable supply of fruit throughout the year. In addition, we have made significant progress in implementing improved
crop maintenance and agronomic practices that we believe will improve our plant yields (tons of fruit per acre) and fruit quality.



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 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 Villas, a
vacation rental program, and provide certain services to the Kapalua Resort. We currently have approximately 228 units in our Kapalua Villas vacation rental program. In late December 2007, our new
Kapalua Adventure Center opened and in January 2008, our Mountain Outpost began operations. The Adventure Center is located in the former Village Clubhouse and includes a retail area featuring outdoor
clothing and gear, a café and is the check-in point for the 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

17

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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 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 Kapalua Bay Holdings, LLC ("Kapalua Bay Holdings"), the limited liability company that purchased the
Kapalua Bay Hotel in August 2004 (see Note 9 to condensed consolidated financial statements). Kapalua 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. As of September 30, 2008, the project was approximately 80% complete.

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 and entails a variety of
risks.

The
Community Development segment is working on a number of real estate development projects, some of which are as follows:



Current Developments

In the third quarter of 2008, all of our business segments were negatively affected by the uncertainty in the local, national and world
economies and continuing turmoil in the financial markets. Credit markets have tightened and Kapalua Resort was impacted by the reduced visitor counts to Maui and to the State of Hawaii, which
affected our Community Development and Resort segments. In our pineapple operations, continued high energy prices affected the cost of fertilizers, packaging and other materials, and the cost of
transporting fruit to markets, and fruit, equipment and employees between our locations. On July 24, 2008, we announced the reduction of 274 positions affecting jobs throughout our Company,
primarily in the pineapple operations. This reduction in the workforce was concluded by the end of September 2008.

18

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On
September 15, 2008, Lehman Brothers Holdings, Inc., the lead lender in the syndicated construction loan for our Kapalua Bay Holdings condominium project filed a
bankruptcy petition under Chapter 11 of the U.S. Bankruptcy Code. On September 22, 2008, Lehman and other lenders in the syndicate were obligated to fund to Kapalua Bay Holdings
$35.6 million under the loan agreement between Kapalua Bay Holdings and Lehman. The other lenders in the syndicate, representing 22% of the loan commitments have continued to fund their portion
of the loan draw for September and October, but Lehman has failed to provide its portion of the funding. Avoiding the stoppage of construction work on this project continues to be a high priority to
us. As a result of Lehman's failure, the members of Kapalua Bay Holdings have agreed to advance funds to Kapalua Bay Holdings, which when combined with funding received from lenders other than Lehman
under the loan agreement, have been sufficient to continue construction of the project. See Note 9 to condensed consolidated financial statements and "Risk Factors" on page 32 below.

On
July 28, 2008, we issued $40 million in senior secured convertible notes. Part of the proceeds was used to repay other debt and the remainder will be used for capital
expenditures, development projects and operations. See Note 18 to condensed consolidated financial statements and "Risk Factors" on page 32 below.

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. The following are in addition to the accounting estimates previously disclosed:



There
are no 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.

RESULTS OF OPERATIONS

Three Months Ended September 30, 2008 compared to Three Months Ended September 30, 2007

CONSOLIDATED

Three Months Ended September 30,2008

2007

Change(in millions, except share amounts)Consolidated Revenues

$
19.1

$
28.5

$
(9.4
)Net Loss

$
(8.7
)
$
(0.2
)
$
(8.5
)Basic Loss Per Common Share

$
(1.09
)
$
(0.02
)
$
(1.07
)


We
reported a net loss of $8.7 million ($1.09 per share) for the third quarter of 2008 compared to a net loss of $155,000 ($.02 per share) for the third quarter of 2007.
Consolidated revenues for the

19

---



third
quarter of 2008 were $19.1 million compared to $28.5 million for the third quarter of 2007. Results for the third quarter of 2008 reflect increased operating losses from our
Agriculture and Resort segments and lower operating profit from our Community Development segment.



Consolidated general and administrative expenses of $11.0 million, including severance expense of $2.5 million, for the
third quarter of 2008 were approximately 55% higher than the third quarter of 2007.

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

Three Months Ended September 30,2008

2007

change(in millions)Salaries & wages

$
2.1

$
2.3

$
(0.2
)Employee incentives & stock compensation


0.6


0.5


0.1Employee severance


2.5





2.5Professional & other services


1.4


2.1


(0.7
)Loss on asset disposal


1.0


0.3


0.7Depreciation expense


0.8


0.2


0.6Other


2.6


1.7


0.9Total

$
11.0

$
7.1

$
3.9


The
increase in general and administrative cost in the third quarter of 2008 compared to the third quarter of 2007 was primarily due to employee severance cost of $2.5 million due
to a reduction in the size of our workforce in response to the weak economy and operating losses in particular from our Agriculture segment. The reduction in the size of the workforce is also
reflected in decreased salaries and wages in the third quarter of 2008 compared to the third quarter of 2007, as the reductions took place through out the third quarter of 2008.

The
decrease in professional and other services in the third quarter of 2008 reflects a reduction of temporary employees and consultants that were used to supplement the staff in 2007.

Loss
on asset disposal for the third quarter of 2008 was primarily due to the write-off of excess equipment at Kapalua Resort and in our pineapple operations.

Other
includes insurance, pensions and 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 management's evaluation of service provided to the operating segments.



Interest expense was $1.4 million for the third quarter of 2008 compared to $405,000 for the third quarter of 2007. Interest
incurred in the third quarter of 2008 was $2.4 million, of which $41,000 was capitalized to construction projects. In the third quarter of 2007, interest incurred was $701,000, of which
$296,000 was capitalized to construction projects. Interest expense for the third quarter of 2008 includes a charge of $205,000 representing the change in the estimated fair value of the swap
agreements entered into in January 2008 (see Note 13 to condensed consolidated financial statements). Interest expense for the third quarter of 2008 also includes a net credit of $941,000
representing the change in the estimated fair value of the derivative liability that was bifurcated from our $40 million

20

---



convertible
notes, less accretion of $486,000 of the initial value of the derivative liability (see Note 18 to condensed consolidated financial statements). Higher interest expense in 2008 also
reflects increased average borrowings in the third quarter of 2008 compared to the third quarter of 2007. Our effective interest rate on borrowings was 5.2% in the third quarter of 2008 compared to
7.7% in the third quarter of 2007.

AGRICULTURE



Three Months Ended September 30,2008

2007

change(in millions)Revenues

$
7.2

$
10.3

$
(3.1
)% of consolidated revenues


38
%

36
%Operating Loss

$
(9.5
)
$
(5.6
)
$
(3.9
)


Revenues
for the Agriculture segment decreased by 30%, or $3.1 million, from $10.3 million for the third quarter of 2007 to $7.2 million for the third quarter of
2008, primarily due to a decrease in processed fruit sales. In the third quarter of 2007, processed fruit sales comprised approximately 31% of total revenues from the Agriculture segment. In the third
quarter of 2008, processed pineapple sales are comprised of juice sales only. The Agriculture segment produced an operating loss of $9.5 million for the third quarter of 2008 compared to an
operating loss of $5.6 million for the third quarter of 2007.

During
2007, we ceased all production of processed pineapple except for juice products. With the cessation of solid- pack canned products, we have focused our business on the sale of
fresh premium pineapple. Continued operating losses in 2008 reflect processing plant problems early in the quarter and logistical issues that affected the quality of our fresh product, increased costs
of operations, and employee severance costs in the third quarter of 2008 of approximately $1.7 million.



The case volume of fresh pineapple sales was lower by 15% for the third quarter of 2008; revenue per case sold was higher by 6% in 2008
compared to the third quarter of 2007. Lower case sales volume in the third quarter of 2008 was due to logistical distribution issues that
resulted in the disposal of significant quantities of product. Higher average pricing reflects the sale of only prime sized fruit to selective customers.

The
Agriculture segment cost of sales was lower by approximately 6% in the third quarter of 2008 compared to the third quarter of 2007, largely as a result of the lower sales volume of
fresh and processed product, partially offset by increased per unit cost of sales. Per unit cost of sales increased in 2008 because all fruit growing costs are now allocated to the fresh fruit product
line, because of lower production volumes and fixed costs, and due to disposal of fruit as a result of logistic and quality problems. 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 22% in the third quarter of 2008 compared to the third quarter of 2007 because of lower volume of sales and lower per unit average shipping cost.
Although higher fuel charges have increased transportation costs, we were able to reduce our average shipping cost in 2008 by shipping a greater percentage of products to the mainland United States by
ocean freight rather than air freight, which is more costly.

21

---



RESORT

Three Months Ended September 30,2008

2007

change(in millions)Revenues

$
9.1

$
7.8

$
1.3% of consolidated revenues


48
%

27
%Operating Loss

$
(5.7
)
$
(3.1
)
$
(2.6
)


Resort
segment revenues increased by 17% or $1.3 million, from $7.8 million in the third quarter of 2007 to $9.1 million for the third quarter of 2008, reflecting
increased revenues from our golf and retail operations, as well as revenues from our Adventure Center and Mountain Outpost that opened in late December 2007 and in early 2008. The Resort segment
reported an operating loss of $5.7 million for the third quarter of 2008 compared to an operating loss of $3.1 million for the third quarter of 2007. A reduction in visitor arrivals and
occupancy at the Resort, combined with increased operating expenses, was primarily responsible for the increased Resort operating loss.



Revenues from golf operations increased by approximately 13% in the third quarter of 2008 compared to the third quarter of 2007 as a
result of an increase in paid rounds of golf and approximately 11% increase in average green and cart fees. Resort retail sales for the third quarter of 2008 were approximately 24% higher than the
third quarter of 2007, reflecting the renovation of the Honolua Store that was completed in May 2008. In 2007, the Ritz-Carlton, Kapalua hotel was closed for renovations for all of the
third quarter, which negatively affected our golf and retail operations.

Revenues
from the Kapalua Villas were less in the third quarter of 2008 compared to the third quarter of 2007 reflecting a 10% decrease in occupied rooms and a 1% lower average room
rate. Rooms available in the third quarter of 2008 were slightly higher that the third quarter of 2007 as units under renovation in our Kapalua Gold program to upgrade and standardize the units in our
rental program were completed.

COMMUNITY DEVELOPMENT

Three Months Ended September 30,2008

2007

change(in millions)Revenues

$
2.2

$
10.0

$
(7.8
)% of consolidated revenues


12
%

35
%Operating Profit

$
2.5

$
9.0

$
(6.5
)


The
Community Development segment reported an operating profit of $2.5 million for the third quarter of 2008 compared to an operating profit of $9.0 million for the third
quarter of 2007. Revenues from this operating segment were $2.2 million for the third quarter of 2008 compared to $10.0 million for the third quarter of 2007. The reduction in revenues
reflects lower revenues from real estate sales in the third quarter of 2008. Lower operating profit is due to sales of non-core land parcels in the third quarter of 2007.

Operating
profit includes our equity in the income of Kapalua Bay Holdings, which was $5.1 million in the third quarter of 2008 compared to $4.9 million in the third
quarter of 2007. In the third quarter of 2008, in response to current economic conditions and based on prior experience, Kapalua Bay Holdings provided a reserve for potential defaults on closings of
approximately $4 million for the third quarter of 2008.

22

---



In
2007, Kapalua Bay Holdings began to recognize revenues and profits on the percentage-of-completion method from sale of the whole and fractional residential
condominiums. The percentage of completion of the six residential buildings in this project ranged from 66% to 93% as of the end of September 2008. In connection with profit recognition under the
percentage-of-completion method, we began to recognize a proportionate amount of the unrealized appreciation of the fair value of the land and other non-monetary
contributions to Kapalua Bay Holdings and other deferred costs related to the joint venture (see Note 9 to condensed consolidated financial statements).



In the third quarter of 2007, we sold approximately 195 acres of Upcountry Maui property in two land sales transactions and recognized
revenues of $8.2 million and pre-tax profit of approximately $7.7 million. The land sold had previously been earmarked as "non-core" to our operations. There were
no land sales transactions in the third quarter of 2008.

Nine Months Ended September 30, 2008 compared to Nine Months Ended September 30, 2007

CONSOLIDATED

Nine Months Ended September 30,2008

2007

change(in millions,
except share amounts)Consolidated Revenues

$
62.0

$
128.2

$
(66.2
)Net Income (Loss)

$
(8.8
)
$
12.0

$
(20.8
)Basic Earnings (Loss) Per Common Share

$
(1.11
)
$
1.55

$
(2.66
)


We
reported a net loss of $8.8 million ($1.11 per share) for the first nine months of 2008 compared to net income of $12.0 million ($1.55 per share) for the same period in
2007. Consolidated revenues for the first nine months of 2008 were $62.0 million compared to $128.2 million for the first nine months of 2007. Lower revenues primarily reflect a
reduction in real estate sales in 2008 and cessation of the sale of solid-pack pineapple products in the second half of 2007. Increased income from our equity interest in Kapalua Bay
Holdings partially offset losses from our other operations.



Consolidated general and administrative expenses increased by 9%, or $2.4 million to $29.4 million for the first nine
months of 2008 from $27.0 million for the first nine months of 2007.

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

Nine Months Ended September 30,2008

2007

change(in millions)Salaries & wages

$
6.8

$
7.4

$
(0.6
)Employee incentives & stock compensation


1.9


4.8


(2.9
)Employee severance


2.9





2.9Professional & other services


4.4


5.3


(0.9
)Loss on asset disposal


2.7


0.5


2.2Depreciation expense


1.7


1.1


0.6Other


9.0


7.9


1.1Total

$
29.4

$
27.0

$
2.4


23

---



General
and administrative salaries & wages were lower in the first nine months of 2008 compared to the same period in 2007 due to a reduction in the number of employees across
all business segments and corporate services as we reduced the size of our workforce in July and September 2008 in response to weak economic conditions and operating losses, in particular from our
Agriculture segment. The reduction in force is also reflected in the employee severance cost recorded in the first nine months of 2008.

The
decrease in employee incentives and stock compensation was primarily due to restricted stock vesting in 2007 for certain officers and a payment in 2007 of $1.1 million to
David C. Cole, our Chairman, President & CEO because of an amendment to Mr. Cole's stock option agreement with the Company that reduced the value of his stock options. The stock option
agreement was amended to eliminate adverse tax consequences to our Chairman imposed by section 409A of the Internal Revenue Code.

The
decrease in professional services and other services primarily reflects increased work performed by our staff that was previously contracted out to outside consultants and temporary
help, and reduced requirements with regard to the Sarbanes-Oxley Act of 2002, Section 404, in the first nine months of 2008 compared to the first nine months of 2007.

Loss
on asset disposals primarily includes assets from the Agriculture segment related to the continuing restructuring of that business and the write-off of excess equipment
at Kapalua Resort.

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 management's evaluation of services provided to the operating segments.



Interest expense was $3.3 million for the first nine months of 2008 compared to $1.4 million for the first nine months of
2007. Interest incurred in the first nine months of 2008 was $4.6 million of which $300,000 was capitalized to construction projects. In the first nine months of 2007, interest incurred was
$2.5 million of which $1.1 million was capitalized to construction projects. Interest expense for the first nine months of 2008 includes a credit of $134,000 representing the change in
the estimated fair value of the swap agreements entered into in January 2008 (see Note 13 to condensed consolidated financial statements). Interest expense for the first nine months of 2008
also includes a net credit of $941,000 representing the change in the estimated fair value of the derivative liability that was bifurcated from our $40 million convertible notes, less
amortization of $486,000 of the initial value of the derivative liability (see Note 18 to condensed consolidated financial statements). Our effective interest rate on borrowings was 5.2% for
the first nine months of 2008 compared to 7.8% for the first nine months of 2007. The increase in interest expense was due primarily to higher average borrowings in the first nine months of 2008.

24

---





AGRICULTURE

Nine Months Ended September 30,2008

2007

Change(in millions)Revenues

$
21.0

$
37.3

$
(16.3
)% of consolidated revenues


34
%

29
%Operating Loss

$
(19.3
)
$
(18.6
)
$
(0.7
)


The
Agriculture segment produced an operating loss of $19.3 million for the first nine months of 2008 compared to an operating loss of $18.6 million for the first nine
months of 2007. Revenues for the first nine months of 2008 were $21.0 million or 44% lower than the first nine months of 2007, primarily due to a reduction in sales of processed products. In
the first nine months of 2007, processed pineapple sales comprised approximately 42% of total revenues from the Agriculture segment. Effective as of June 30, 2007, we ceased the production of
substantially all solid-pack pineapple products (see Note 17 to condensed consolidated financial statements). Therefore, in the first nine months of 2008, processed pineapple sales
are comprised solely of juice sales.

The
operating loss for the first nine months of 2007 includes approximately $5.2 million of direct charges related to the restructuring of our pineapple operations. Continued
operating losses in 2008 reflect issues at our fresh fruit packing facility, weather-related problems early in 2008 that affected the quality of our fresh product, distribution logistics in the third
quarter of 2008, and increased provision for uncollectible accounts.



The case volume of fresh pineapple sales decreased by approximately 10% in the first nine months of 2008 compared to the first nine
months of 2007, and revenue per case was lower by approximately 4% in the first nine months of 2008 compared to the first nine months of 2007. Lower case sales volume and pricing in 2008 were due to
delayed ripening of the fruit early in 2008 and product quality and distribution issues that prevented us from achieving optimum pricing and resulted in the disposal of significant volume of product.

The
Agriculture segment cost of sales was lower by approximately 29% in the first nine months of 2008 compared to the first nine months of 2007, largely as a result of the lower sales
volume of fresh and processed product, partially offset by increased per unit cost of sales. Per unit cost of sales increased in 2008 because all fruit growing costs are now allocated to the fresh
fruit product line, because of lower production volumes and fixed costs, and due to disposal of fruit as a result of quality problems and distribution logistics. 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 25% in the first nine months of 2008 compared to the first nine months of 2007 because of lower volume of sales and lower average per unit
shipping costs. Although higher fuel charges have increased transportation costs, we were able to reduce our average shipping cost in 2008 by shipping a greater percentage of products to the mainland
United States by ocean freight rather than air freight, which is more costly.

25

---



RESORT

Nine Months Ended September 30,2008

2007

change(in millions)Revenues

$
29.0

$
28.3

$
0.7% of consolidated revenues


47
%

22
%Operating Loss

$
(13.1
)
$
(6.7
)
$
(6.4
)


The
Resort segment reported an operating loss of $13.1 million for the first nine months of 2008 compared to an operating loss of $6.7 million for the first nine months of
2007. Resort segment revenues were $29.0 million for the first nine months of 2008 compared to $28.3 million for the same period in 2007. A reduction in visitor arrivals and occupancy at
the Resort combined with increased operating expenses was largely responsible for the increased operating loss.



Revenues from golf operations decreased by approximately 12% in the first nine months of 2008 compared to the first nine months of 2007
as a result of a decrease in paid rounds of golf, which was partially offset by an approximately 8% increase in average green and cart fees. Revenues from the Kapalua Villas were also less in the
first nine months of 2008 compared to the first nine months of 2007 reflecting a 9% decrease in occupied rooms, partially offset by a 2% increase in average room rate. There were approximately 4%
fewer rooms available in the first nine months of 2008 partially reflecting units under renovation under our Kapalua Gold program to upgrade and standardize the units in our rental program. Resort
retail sales for the first nine months of 2008 were approximately 8% higher than the same period in 2007.

COMMUNITY DEVELOPMENT

Nine Months Ended September 30,2008

2007

change(in millions)Revenues

$
10.5

$
61.3

$
(50.8
)% of consolidated revenues


17
%

48
%Operating Profit

$
21.5

$
46.2

$
(24.7
)


The
Community Development segment reported an operating profit of $21.5 million for the first nine months of 2008 compared to $46.2 million for the first nine months of
2007. Revenues from this operating segment decreased by $50.8 million to $10.5 million for the first nine months of 2008 compared to $61.3 million for the first nine months of
2007. The reduction in revenues primarily reflects our recognition of $25.0 million of revenue in 2007 from our sale of the land underlying the Ritz-Carlton, Kapalua hotel in March
2007 (see Note 10 to condensed consolidated financial statements) and our recognition of $15.1 million of revenue from the sale of property in Upcountry Maui in 2007, partially offset by
$4.4 million of revenue in 2008 from the sale of non-core property in Upcountry Maui in 2008.

Our
equity in the income of Kapalua Bay Holdings was $26.5 million in the first nine months of 2008 compared to $9.0 million in the first nine months of 2007. In 2007, the
joint venture began to recognize revenues and profits on a percentage-of-completion method from the sales of whole and fractional residential condominiums. Accordingly, in
2007, the Company began to recognize a proportionate amount of the unrealized appreciation of the fair value of the land and other

26

---



non-monetary
contributions to Kapalua Bay Holdings and other deferred costs related to the joint venture (see Note 9 to condensed consolidated financial statements).



In the first nine 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. In the first nine months of 2007, we sold approximately 533 acres of
non-core Upcountry Maui property in four land sales transactions and recognized revenues of approximately $15.1 million and pre-tax gains of approximately
$14.5 million from those land sales. In addition, in March 2007 we sold the approximately 49 acres of land underlying the Ritz-Carlton, Kapalua
hotel and recognized a pre-tax gain of $24.8 million (see Note 10 to condensed consolidated financial statements).

Our
Honolua Ridge Phase II subdivision consists of 25 agricultural-zoned lots, which began selling in August 2005. Through the end of 2007, 24 lot sales have closed escrow and the
last lot remains in inventory at September 30, 2008. In the first nine months of 2007, seven lot sales closed escrow and we recognized revenues of $14.7 million.

LIQUIDITY AND CAPITAL RESOURCES



At September 30, 2008, our total debt, including capital leases, was $112.6 million, compared to $61.7 million at
December 31, 2007. The increase in outstanding debt in the first nine months of 2008 was due primarily to negative cash flows from operating activities, our equity contribution to Kapalua Bay
Holdings and expenditures for capital projects at the Kapalua Resort. At September 30, 2008, we had available credit lines of $44 million.

On
July 28, 2008, we issued $40 million in aggregate principal amount of senior secured convertible notes. The proceeds from this financing were used to re-pay
$28.0 million of debt under our revolving lines of credit with interest rates that floated with the prime rate and a $9.7 million, 6.93% fixed rate term loan that matured through 2026
(see Note 18 to condensed consolidated financial statements).

In
January 2008, we entered into a fixed-interest rate swap agreement with Wells Fargo, the effect of which was to convert variable-rate interest expense, which was
previously tied to 1-, 2-, 3- and 6-month LIBOR terms, to fixed-rate interest expense based on a 2-year fixed LIBOR rate. The
interest rate swap enabled us to lock-in an average interest rate of 4.4% for approximately two years on $55.0 million of outstanding variable rate, revolving balances (see
Note 13 to condensed consolidated financial statements).

27

---





In the first nine months of 2008, consolidated net cash used in operating activities was $40.8 million compared to net cash used
in operating activities of $3.3 million for the first nine months of 2007. By operating segment, these cash flows were approximately as follows:

Nine Months Ended September 30,2008

2007(in millions)Agriculture

$
(21.0
)
$
(6.4
)Resort


(9.6
)

(6.7
)Community Development


(10.7
)

14.8Interest, taxes and other


0.5


(5.0
)Total

$
(40.8
)
$
(3.3
)


Cash
used in operating activities in the first nine months of 2008 largely reflect (1) operating losses from the Agriculture and Resort segments, (2) non-cash
profit from our equity interest in Kapalua Bay Holdings, and (3) operating profit from non-core land sales that are reported as investing activities (also see Real Estate Sales Proceedsbelow).

Cash
flows from operating activities of the Community Development segment vary significantly with the amount of new real estate product sold and the amount of construction activity for
real estate inventories. While there was a significant amount of new real estate product for sale at Kapalua Resort through our joint venture investees, we did not have any new product for sale except
for one Honolua Ridge Phase II lot that has remained in inventory since the end of 2007.

In
the first nine months of 2007, the closing of Honolua Ridge Phase II lot sales and the collection on purchase money mortgages resulted in cash flows from operating activities
of approximately $19.9 million.



In the first nine months of 2008, we sold approximately 111 acres of Upcountry Maui land that were considered non-core to
our business, which resulted in net sales proceeds of $4.4 million including a short-term promissory note for $1.0 million. Cash proceeds of $2.5 million from these
sales that were deposited with a qualified exchange intermediary in anticipation of reinvestment on a tax-deferred basis under Section 1031 of the Internal Revenue Code, were
returned to us in the third quarter of 2008 as we were unable to identify satisfactory replacement properties.



In the first nine months of 2008, we made cash contributions totaling $7.8 million to Kapalua Bay Holdings pursuant to equity
calls and in October 2008, we advanced $3.6 million to the joint venture as a member loan. We may be required to make additional cash contributions to the joint venture in the future (see
Note 9 to condensed consolidated financial statements).



The Resort segment capital expenditures for 2008 are expected to be approximately $4.6 million, which includes $700,000 for
renovation to the Bay Course that began in 2007 and additional improvements at the Kapalua Resort. We expect the Agriculture segment to have capital expenditures

28

---



of
approximately $1.2 million in 2008. Capital expenditures for 2008 are expected to include approximately $0.5 million for upgrades and additions to information systems.

Expenditures
in 2008 for the Community Development segment capital projects and deferred development costs are expected to be up to approximately $12.4 million. Additional project
spending will depend on market conditions. In connection with the planning for the various projects, we will analyze the feasibility of proceeding with each project and may seek project specific
non-recourse financing for some of the capital projects.

We
are also obligated to purchase the spa, beach club improvements and the sundry store from Kapalua Bay Holdings at actual construction cost, which is estimated to be approximately
$35 million. We are negotiating the terms of the purchase between the members of Kapalua Bay Holdings and timing of the payment is currently uncertain.

In
the event Lehman continues to refuse to fund its obligations under Kapalua Bay Holdings' Loan Agreement, Kapalua Bay Holdings will be required to seek alternative funding sources in
order to continue to make progress payments to PCL under the construction agreement. Alternative funding sources could include refinancing the Lehman loan with new lenders, obtaining member loans, or
seeking additional capital from members of Kapalua Bay Holdings. At this time, we are unsure of what the estimated future cash flows will be related to our investment in Kapalua Bay Holdings in order
for Kapalua Bay Holdings to complete The Residences at Kapalua Bay project.

Our
$90 million revolving credit facility under which we have $52.1 million outstanding at September 30, 2008 becomes due and payable in November 2009. We expect to
extend this facility.

While
it is difficult to estimate what our cash requirements will be to fund operations and our various capital projects, we believe that our available borrowings and cash on hand will
be sufficient to fund operations for at least the next 12 months.

CONTRACTUAL OBLIGATIONS

The following summarizes our contractual obligations as of September 30, 2008 (in thousands):

Payment due by period (years)Contractual Obligations

Total

Less Than 1

1 - 3

4 - 5

After 5Long-term debt

$
118,840

$
1,260

$
115,327

$
2,253

$
Capital lease obligations (including interest)


3,746


1,319


1,516


579


332Interest on long-term debt(1)


13,929


6,249


7,481


199


Operating leases(2)


1,101


457


336


154


154Purchase commitments(2)


9,688


3,958


3,858


1,872


Other long-term liabilities(3)(4)(5)


3,655


602


1,102


1,034


917Total

$
150,959

$
13,845

$
129,620

$
6,091

$
1,403


---

29

---



FORWARD-LOOKING STATEMENTS

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 can be identified by the fact that they do not relate strictly to
historical or current facts, but rather 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. 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.



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, 2007, as amended, and the sections entitled "Management's
Discussion and Analysis of Financial Condition and Results of Operations" and "Risk Factors" in this Quarterly Report on

30

---



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. 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 4.4%. The estimated fair value of these derivative instruments was approximately
$134,000 as of September 30, 2008.

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 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 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 Chief Executive Officer and Chief Financial Officer concluded that our disclosure controls and procedures were effective to ensure 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 three months ended September 30, 2008 that has materially affected or is reasonably likely to materially affect our
internal control over financial reporting.

31

---





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, 2007
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. The following risk factors are in addition to or materially
amend the risk factors previously disclosed in our Form 10-K filed for the year ended December 31, 2007, but are not a complete list of all risk factors.

Risks Related to our Business

Failure to obtain alternative construction financing to fund the financing shortfall resulting from the breach by Lehman Brothers Holdings Inc. of its funding
commitment to us could result in construction delays, impact the success of our project and materially and adversely affect our financial condition.

We have a 51% ownership interest in, and are the managing member of, Kapalua Bay Holdings, LLC, which is the sole member of
Kapalua Bay LLC. The other members of Kapalua Bay Holdings are Marriott International Inc. and Exclusive Resorts LLC. Our allocation of income from Kapalua Bay Holdings was
$16.8 million in 2007 and $26.5 million for the nine months ended September 30, 2008. Kapalua Bay Holdings is constructing a residential development, known as The Residences at
Kapalua Bay, on land that it owns at the site of the former Kapalua Bay Hotel. In July 2006, Kapalua Bay Holdings entered into a syndicated Construction Loan Agreement with Lehman Brothers
Holdings Inc. for the lesser of $370 million or 61.6% of the total projected cost of the project in order to fund construction of the project. Lehman's commitment under the Loan
Agreement is approximately 78% of the total. The loan is collateralized by the project assets, including the fee simple interest in the land owned by Kapalua Bay Holdings, the adjacent spa parcel
owned by us, and all of the sales contracts. As of October 20, 2008, approximately $211 million has been funded under the Loan Agreement and the project is approximately 80% complete,
and scheduled for opening in Spring 2009. As of September 30, 2008, total contracted sales for the project were approximately $313 million, representing approximately 40% of the units
which will be available for sale.

On
September 15, 2008 Lehman filed a petition under Chapter 11 of the U.S. Bankruptcy Code with the United States Bankruptcy Court for the Southern District of New York.
Since filing for bankruptcy, Lehman has failed to fund its portion of the loan commitments under the Loan Agreement. Other lenders in the syndicate, representing 22% of the loan commitments, have
continued to fund their portion of the loan commitments. There is no assurance that Lehman or the other lenders will provide any future funding under the Loan Agreement. As a result of Lehman's
failure to comply with the Loan Agreement, the members of Kapalua Bay Holdings have agreed to advance funds to Kapalua Bay Holdings, which, when combined with funding received from lenders other than
Lehman under the Loan Agreement, will be sufficient to pay minimum progress payments necessary to continue construction of the project. As of October 20, 2008, we have advanced approximately
$3.6 million to Kapalua Bay Holdings for this purpose. In the event Lehman continues to refuse to fund its obligations under the Loan Agreement, Kapalua Bay Holdings will be required to seek
alternative funding sources in order to continue to make progress payments necessary to continue construction of the project. Alternative funding sources could include refinancing the Lehman loan with
new lenders, or seeking

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additional
capital from members of Kapalua Bay Holdings. Alternative funding could result in higher interest rates, which would increase the total cost of the project. Because the project is
approximately 80% complete, and there have been approximately $313 million in pre-sales, we anticipate that financing will be available to continue construction. However, there can
be no assurance that alternative financial resources will be available promptly, on favorable terms or at all, or that the other lenders in the syndicate, or members of Kapalua Bay Holdings will
continue to fund construction loan shortfalls on the project. Failure to obtain necessary funding will result in construction delays that will adversely affect results of operations. Although Kapalua
Bay Holdings is not contractually obligated to provide buyers with completed units until April 2011, construction delays will negatively impact the volume and timing of sales. In addition, if we make
capital contributions to Kapalua Bay Holdings beyond budgeted amounts, such capital contributions will reduce financial resources available for other operating activities and will materially and
adversely affect our financial condition.

The current economic environment and the more limited availability of credit may increase the possibility of default on sales at The Residences at Kapalua Bay project which
could materially and adversely affect our financial condition and results of operations.

We currently have pre-sales totaling approximately $313 million that are secured by non-refundable
deposits ranging from approximately 11% for fractional ownership interests to 20% for whole ownership purchases. The project is comprised of six residential buildings that as of September 30,
2008 ranged from 66% to 93% complete. Although the deposits we have collected are substantial, the current uncertainty in the national and world economies and the continuing turmoil in the financial
and credit markets increases the possibility that purchasers who have entered into agreements to purchase property may fail to fulfill their contractual obligations, notwithstanding our receipt of
nonrefundable deposits. As a result of such uncertainty, we have increased the reserves recognized by Kapalua Bay Holdings LLC as of September 30, 2008, based on our prior experience and
current information available to us to cover potential defaults on the purchase of fractional and whole-ownership units. While the reserves for defaults are based on the best knowledge that we have to
date, there is no certainty as to whether the reserves are sufficient or in
excess of the actual cancellations that we will experience. Although the impact to our results of operations from defaults will be offset by forfeited deposits, any such defaults may affect the timing
and success of the project and could have a material adverse effect on our financial condition and results of operations.

A reduction in the value of our investment in Kapalua Bay Holdings, LLC would require us to reduce the value of this investment on our balance sheet, which could
adversely affect our results of operations and financial condition.

The carrying value of Kapalua Bay Holdings on our balance sheet at September 30, 2008 is $86.4 million, which primarily
includes our cash contributions of $53.2 million and equity to date of $33.2 million. We also made a loan to Kapalua Bay Holdings of $3.6 million in October 2008. Factors such as
increases in costs because of significantly higher interest rates related to construction financing; large discounting of sales prices to sell units; significant lag in sales resulting in higher
inventory carrying costs to the joint venture, or other possible events could result in a reduction of the value of the investment that we currently have on our balance sheet, and would require a
write down of our carrying value of this investment, which could adversely affect our financial condition and results of operations.

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Because we are located in Hawaii and therefore apart from the mainland United States, we are more sensitive to certain economic factors, such as increased fuel and travel
costs, which may adversely impact and materially affect our business, financial condition and results of operations.

Our Community Development segment and the Resort segment are dependent on attracting visitors to the Kapalua Resort, to Maui, and the
State of Hawaii as a whole. Economic factors that affect the number of visitors, their length of stay or expenditure levels will affect our financial performance. Factors such as the recent
substantial increases in the cost of energy, including fuel costs, and events in the airline industry that reduce passenger capacity or increase traveling costs, including the recent cessation of
operations of two airlines that provided significant service to the Hawaiian market, could reduce the number of visitors to the Kapalua Resort and negatively affect a potential buyer's demand for our
ongoing and future property developments, each of which could have a material adverse impact on our business, financial condition and results of operations. If unfavorable economic conditions continue
for an extended period, it may become necessary to reassess the real estate development projects in our Community Development segment.
Significant changes to development plans could result in impairment charges or write-off of deferred development costs, which could have a material adverse impact on our financial
condition and results of operations. If the cost of energy, including fuel costs, continue to increase at the rate and at the pace as they recently have, it is likely that our business, financial
condition and results of operations will be adversely impacted. In addition, the threat, or perceived threat, of heightened terrorist activity in the United States or other geopolitical events, or the
spread of contagious diseases, such as Avian Flu or SARS, could negatively affect a potential visitor's choice of vacation destination or second home location and as a result, have a material adverse
impact on our business, financial condition and results of operations.

We are involved in joint ventures and are subject to risks associated with joint venture relationships.

We are involved in partnerships, joint ventures and other joint business structures relationships, and may initiate future joint
venture projects. We currently have, among others, a 51% interest in Kapalua Bay Holdings, the joint venture that is constructing The Residences at Kapalua Bay, and a 16% interest in the joint venture
that owns and operates the Ritz-Carlton, Kapalua hotel.

A
joint venture involves certain risks such as:



In
connection with our joint venture projects, we may be asked to guarantee the joint venture's obligations, or to indemnify third parties in connection with a joint venture's
contractual arrangements. If we were to become obligated under such arrangement or become subject to the risks associated with joint venture relationships, our business, financial condition and
results of operations may be adversely affected.

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Changes in weather conditions or natural disasters could adversely impact and materially affect our business, financial condition and results of operations.

Changes in weather conditions and natural disasters, such as earthquakes, droughts, extreme cold or pestilence, may affect the
planting, growing and delivery of crops, reduce sales stock, interrupt distribution of our products, and have a material adverse impact on our Agriculture segment, which could adversely impact our
business, financial condition and results of operations. Natural disasters could also damage our resort and real estate holdings, resulting in substantial repair or replacement costs to the extent not
covered by insurance, a reduction in property values, or a loss of revenue, each of which could have a material adverse impact on our business, financial condition and results of operations. Our
competitors may be affected differently by such changes in weather conditions or natural disasters depending on the location of their supplies or operations.

Risks Related to the Recently Completed Private Placement and Convertible Notes

The number of shares registered for resale pursuant to an effective Registration Statement on Form S-3 is significant in relation to our outstanding
shares and trading volume and sales of substantial amounts of our common stock may adversely affect our market price.

On July 27, 2008, we entered into a securities purchase agreement with certain institutional accredited investors, or the
investors, to sell and issue to the investors in reliance on Section 4(2) of the Securities Act an aggregate of $40,000,000 in principal amount of the Company's senior secured convertible
notes, or the convertible notes, bearing 5.875% interest per annum payable quarterly in cash in arrears beginning October 15, 2008. The financing closed on July 28, 2008. As of
September 30, 2008 we had 8,170,895 shares of common stock outstanding and our average weekly trading volume during the four full weeks prior to September 30, 2008 was 20,975 shares. The
convertible notes are convertible at the option of the holders into 1,194,030 shares of our common stock at an initial conversion price of $33.50 per share. We filed a registration statement (File
No. 333-153203) with the SEC for the public resale of the shares of common stock issuable upon conversion of the convertible notes. The registration statement was declared effective
by the SEC on October 24, 2008. Accordingly, so long as the registration statement remains effective, the common stock issued upon conversion of the convertible notes will be freely tradable in
the public markets without restriction and sales of a substantial number of shares could occur at any time during such period. Such sales may adversely affect the prevailing market prices of our
common stock. In addition, the existence of the convertible notes may encourage short selling by market participants because the conversion of the convertible notes could be used to satisfy short
positions, and anticipated conversion of the convertible notes into shares of our common stock could depress the price of our common stock.

The conversion price of the convertible notes is subject to adjustment and, if adjusted, will result in dilution to our existing holders of common stock.

The convertible notes are convertible, at any time following their issuance, into shares of our common stock at an initial conversion
price of $33.50 per share, which is equal to an initial conversion rate of 29.8507 shares per $1,000 principal amount of the convertible notes, or 1,194,030 shares in the aggregate, assuming payment
in cash of all interest payments. The conversion price is subject to (i) standard weighted-average anti-dilution protection, and (ii) to an automatic reset 18 months
following the closing of the sale of convertible notes at the lower of the then current conversion price and 115% of the closing bid price of our common stock as reported on the New York Stock
Exchange, or the NYSE, on the adjustment date, provided, that, with respect to the reset adjustment, in no event shall the conversion price be reset below $30.00 per share. If the conversion price is
reduced, the convertible notes will be convertible into additional shares of our common stock without the payment of any additional consideration, resulting in dilution to our then existing holders of
common stock.

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There
can be no assurance that an event that results in a reduction of the conversion price will not occur.

The convertible notes provide the holders with certain rights of redemption and, upon the occurrence of various events of default and change of control transactions, the
right to require us to redeem the convertible notes for cash. We may not have the funds necessary to redeem the convertible notes for cash, or any such redemption of the convertible notes could leave
us with little or no working capital for operations or capital expenditures.

On the third anniversary of the closing of the sale of convertible notes, or upon a change of control transaction, each investor has
the right to require us to redeem all or any portion of such investor's convertible note at a redemption price equal to 100% of the principal amount of the convertible note being redeemed, plus
accrued and unpaid interest thereon. If an investor elects to convert its convertible note in connection with a change of control, we may also have to pay a make-whole premium. In
addition, the convertible notes allow each investor to require us to redeem the convertible notes upon the occurrence of various events of default. In such a situation, we may be required to redeem
all or part of the convertible notes, including any accrued interest, redemption premiums and penalties. If holders of the convertible notes elect to redeem their notes or an event of default or a
change of control occurs, we may be unable to repay the full redemption amount in cash. Even if we were able to prepay the full amount in cash, any such repayment could leave us with little or no
working capital for our business. We have not established a sinking fund for payment of our obligations under our convertible notes, nor do we anticipate doing so. Any failure to pay amounts due under
the convertible notes may also constitute an event of default under the terms of our other credit facilities existing at the time.

Security interests granted to the holders of the convertible notes limits our ability to obtain secured financing in the future.

The convertible notes will be secured by a portion of our real property assets, including our headquarters, our Merriman's property,
and portions of our central resort and upcountry Hali'imaile properties. To the extent that these properties previously were unencumbered, with limited exceptions, they will no longer be available to
secure on a senior basis other debt obligations that we may wish to incur in the future. In addition, a portion of proceeds from the sale of any such properties will be deposited into a collateral
account to secure our payment obligations under the convertible notes. Therefore such portion of cash proceeds will be restricted and unavailable for operations.

We have agreed to certain limitations on our ability to sell our securities in future financings, which may restrict our ability to raise capital.

We have agreed, for so long as any convertible notes remain outstanding, that we will not issue or sell, subject to certain exceptions,
shares of our common stock or securities exercisable or convertible into shares of our common stock if the effect of such issuance or sale would be to cause the number of shares of our common stock
issuable upon conversion of the convertible notes to exceed the number of shares of common stock that we may issue without breaching our obligations under the rules and regulations of the NYSE. In
addition, we have agreed, for so long as any convertible notes remain outstanding, that we will not sell securities with a conversion or exercise price that varies with the market price of our common
stock unless the conversion or exercise price cannot be less than the applicable conversion price under the convertible notes. These limitations will restrict our ability to raise capital through
equity financing in the future. If we need to raise additional capital and cannot raise such capital or obtain additional financings on terms satisfactory to us, we may have to reduce our capital
expenditures, scale back our development projects, reduce our workforce or take other actions that may have an adverse effect on our business operations and financial results.

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Item 6. Exhibits

The following exhibits are filed herewith:

(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.November 7, 2008 Date



/s/ ROBERT I. WEBBER Robert I. Webber Chief Operating Officer, Chief Financial
Officer & Executive Vice President(Principal Financial Officer)


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EXHIBIT INDEX

Exhibit Number

Description31.1

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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