SECURITIES AND EXCHANGE COMMISSION
                          Washington, D.C.  20549

                                 FORM 10-K

               Annual Report Pursuant to Section 13 or 15(d)
                       of the Securities Act of 1934


For the fiscal year ended
December 31, 2001                      Commission File Number 33-24180


                             AMFAC HAWAII, LLC
          ------------------------------------------------------
          (Exact name of registrant as specified in its charter)


              Hawaii                            36-3109397
      -----------------------       ------------------------------------
      (State of organization)       (I.R.S. Employer Identification No.)


  900 N. Michigan Ave., Chicago, Illinois                60611
  ---------------------------------------             ----------
  (Address of principal executive office)             (Zip Code)


Registrant's telephone number, including area code 312-440-4800

See Table of Additional Registrants Below.

Securities registered pursuant to Section 12(b) of the Act:  None

Securities registered pursuant to Section 12(g) of the Act:  None

Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act
of 1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to
such filing requirements for the past 90 days.  Yes [ X ]   No [  ]

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

State the aggregate market value of the voting stock held by non-affiliates
of the registrant.  Not applicable.

As of March 23, 2002, all of Amfac Hawaii LLC's membership interest  is
solely owned by Northbrook Corporation, a Delaware corporation, and not
traded on a public market.

The Additional Registrants listed on the following page meet the conditions
set forth in General Instruction 11(a) and (b) of Form 10-K and therefore
are filing this form with reduced disclosure format.

Certain pages of the prospectus of the registrant dated December 5, 1988
and filed with the Commission pursuant to Rules 424(b) and 424(c) under the
Securities Act of 1933 are incorporated by reference in Part III of this
Annual Report on Form 10-K.



<PAGE>


                        ADDITIONAL REGISTRANTS (1)


                                                 Address, including,
                                                 zip code,
Exact name of    State or other   IRS            and telephone number,
registrant as    jurisdiction of  Employer       including area code of
specified in its incorporation or Identification registrant's principal
Charter          organization     Number         executive offices
---------------  ---------------  ------------   -----------------------

Amfac Land       Hawaii           99-0185633     900 North Michigan Avenue
Company, Limited                                 Chicago, Illinois 60611
                                                 312/440-4800

Amfac Property   Hawaii           99-0150751     900 North Michigan Avenue
Development Corp.                                Chicago, Illinois 60611
                                                 312/440-4800

Amfac Property   Hawaii           99-0202331     900 North Michigan Avenue
 Investment                                      Chicago, Illinois 60611
 Corp. (2)                                       312/440-4800

H. Hackfeld      Hawaii           99-0037425     900 North Michigan Avenue
 & Co., Ltd.                                     Chicago, Illinois 60611
                                                 312/440-4800

Kaanapali Estate Hawaii           99-0176334     900 North Michigan Avenue
 Coffee, Inc.                                    Chicago, Illinois 60611
                                                 312/440-4800

Kekaha Sugar     Hawaii           99-0044650     900 North Michigan Avenue
 Company,                                        Chicago, Illinois 60611
 Limited                                         312/440-4800

The Lihue        Hawaii           99-0046535     900 North Michigan Avenue
 Plantation                                      Chicago, Illinois 60611
 Company,                                        312/440-4800
 Limited

Oahu Sugar       Hawaii           99-0105277     900 North Michigan Avenue
 Company,                                        Chicago, Illinois 60611
 Limited                                         312/440-4800

Pioneer Mill     Hawaii           99-0105278     900 North Michigan Avenue
 Company,                                        Chicago, Illinois 60611
 Limited                                         312/440-4800

Puna Sugar       Hawaii           99-0051215     900 North Michigan Avenue
 Company,                                        Chicago, Illinois 60611
 Limited                                         312/440-4800

Waikele Golf     Hawaii           99-0304744     900 North Michigan Avenue
 Club, Inc.                                      Chicago, Illinois 60611
                                                 312/440-4800


(1)   The Additional Registrants listed are wholly-owned subsidiaries
      (except as noted in (2)) of the registrant and are guarantors of
      the registrant's Certificate of Land Appreciation Notes due 2008
      (the "COLAs").

(2)   Effective December 28, 2000, AF Investors, LLC made a capital
      contribution to Amfac Property Investment Corp. ("APIC") in return
      for 83.33% of the shares of APIC.




<PAGE>


                             TABLE OF CONTENTS



                                                             Page
                                                             ----
PART I

Item 1.      Business. . . . . . . . . . . . . . . . . . . .    1

Item 2.      Properties. . . . . . . . . . . . . . . . . . .    8

Item 3.      Legal Proceedings . . . . . . . . . . . . . . .   12

Item 4.      Submission of Matters to a Vote of
             Security Holders. . . . . . . . . . . . . . . .   17


PART II

Item 5.      Market for the Company's and
             Finance's Common Equity and Related
             Security Holder Matters . . . . . . . . . . . .   18

Item 6.      Selected Financial Data . . . . . . . . . . . .   18

Item 7.      Management's Discussion and
             Analysis of Financial Condition and
             Results of Operations . . . . . . . . . . . . .   19

Item 7A.     Quantitative and Qualitative Disclosures
             About Market Risk . . . . . . . . . . . . . . .   35

Item 8.      Financial Statements and Supplementary Data . .   36

Item 9.      Changes in and Disagreements with
             Accountants on Accounting and
             Financial Disclosure. . . . . . . . . . . . . .   78


PART III

Item 10.     Managers and Executive Officers of
             the Registrant. . . . . . . . . . . . . . . . .   78

Item 11.     Executive Compensation. . . . . . . . . . . . .   80

Item 12.     Security Ownership of Certain Beneficial Owners
             and Management. . . . . . . . . . . . . . . . .   81

Item 13.     Certain Relationships and Related Transactions.   81


PART IV

Item 14.     Exhibits, Financial Statement Schedules, and
             Reports on Form 8-K . . . . . . . . . . . . . .   85


SIGNATURES   . . . . . . . . . . . . . . . . . . . . . . . .   86



<PAGE>


                                  PART I

ITEM 1.  BUSINESS

     Amfac Hawaii, LLC ("AHI", and collectively with the Additional
Registrants, as their respective interests may appear, the "Company") is a
Hawaii limited liability company.  AHI is wholly-owned by Northbrook
Corporation, a Delaware corporation ("Northbrook").  AHI changed its name
from Amfac/JMB Hawaii, L.L.C. in March 2001.  On February 27, 2002, AHI,
certain of the Additional Registrants and certain other subsidiaries and
affiliates (collectively, the "Debtors") of AHI filed voluntary petitions
under Chapter 11 of the United States Bankruptcy Code.  These petitions
have been consolidated for joint administration as a single case (the
"Reorganization Case") in the U.S. Bankruptcy Court for the Northern
District of Illinois.  The Debtors filed their petitions in order to enable
them to restructure their debt and convert substantial portions thereof to
equity in an attempt to successfully reorganize with a manageable balance
sheet.

     The primary business activities of the Company have been land
development and sales, golf course management and agriculture.  In
September 2000, the Company announced its plan to shut down the remaining
sugar operations which represented a substantial portion of its agriculture
segment.  The Company owns, as of the date of this report, approximately
5,100 acres of land primarily located on the island of Maui in the State of
Hawaii.  Most of this land is held by the Company's wholly-owned
subsidiaries.  In addition to its owned lands, the Company leases
approximately 3,100 acres of land that was primarily used in conjunction
with its agricultural operations.  Due to the shutdown of the Company's
remaining sugar plantations, the Company has filed a motion in the
Reorganization Case to reject such lease, which was granted by the court
and an order entered on April 2, 2002.  The Company's operations are
subject to significant government regulation.

     Certain corporate services are provided by Northbrook and its
affiliates, and the Company reimburses for those services at cost.  At
December 31, 2001, the Company and its subsidiaries employed 146 persons.

     The Company has three primary business segments.  The agriculture
segment ("Agriculture") has been responsible for the Company's remaining
agricultural activities (the Company's remaining sugar plantations were
shut down at the end of 2000 and in September 2001 the Company announced a
winding down of its coffee operations).  The real estate segment
("Property") has been responsible for development and sales activities
related to the Company's owned land, all of which is in the State of
Hawaii.  The golf segment ("Golf") has been responsible for the management
and operation of the Company's golf course facilities.  However, as
described below, a receiver was appointed on March 19, 2002, to manage the
two Royal Kaanapali Golf Courses on Maui.  The Company segregates total
revenues, operating income (loss), total assets, capital expenditures and
depreciation and amortization by each industry segment.  The Company owns
no patents, trademarks, licenses or franchises that are material to its
business.

     AHI will continue until at least December 31, 2027, unless earlier
dissolved.  AHI's sole member, Northbrook, is not obligated for any debt,
obligation or liability of the Company.  However, AHI and certain
additional subsidiaries are obligated to Northbrook and its affiliates for
the repayment of substantial loans and advances made to them.

     All references to "Notes" are to Notes to the Consolidated Financial
Statements contained in this report.



<PAGE>


     PROPERTY SEGMENT.

     The Company's Property segment is responsible for the following
operations:  land planning; obtaining land use, zoning and other
governmental approvals; development activities; and the selling or
financing of developed and undeveloped land parcels.  Land Management and
Real Estate Development operations make up the Property segment.  In
general, the Company maintains and manages its land holdings until: (i)
conditions are favorable for their sale, or (ii) a feasible development
plan can be formed and approved.  In the second circumstance, once the
Company has obtained the necessary development approvals ("entitlements"),
the Company may elect to either sell the land with its entitlements or
develop all or a portion of the land.  In the past, the Company has
typically done "horizontal" development work, including site work (e.g.,
grading, excavation) and installation of infrastructure (i.e., roadways and
utilities).  Once the horizontal development is complete, the Company
usually sells the "improved" development parcels to homebuilders, shopping
center or other commercial developers and others who will complete the
"vertical" development of the site consistent with the Company's original
development plans and the entitlements.

     SALES OF AGRICULTURAL PROPERTIES.  During the past few years, the
Company placed a substantial portion of its land holdings on the market to
generate cash to finance the Company's operations and to meet debt service
requirements.  During 2001, 2000 and 1999, the Company generated
approximately $44.0 million, $4.7 million and $9.3 million, respectively,
in revenue primarily from the sale of unentitled, agricultural and
conservation land parcels.

     DEVELOPMENT.  Company management considers development opportunities
for its land holdings.  As development opportunities arise, management
typically prepares feasibility analyses to assess the profit potential of
the development.  As part of the feasibility analyses, factors considered
include the location and physical characteristics of the property,
demographic patterns and perceived market demand, estimated project costs,
regulatory and environmental constraints and availability of utilities and
governmental services.

     The Company may decide to develop the property itself or to sell the
property in bulk (with or without entitlements).  Once a decision is made
to proceed with a development project, approvals must be obtained from both
the State and County governments in Hawaii.  The State of Hawaii Land Use
Commission has classified all lands in Hawaii as urban, agricultural or
conservation.  In general, only lands classified as urban can be developed.
Although in some cases agricultural lands can be used for lower density
residential developments, agricultural lands are often not developed.
Conservation lands cannot be developed, and are typically located in
heavily forested, mountainous regions and along the coastline.

     There are multiple layers of approvals required from the County
governments in Hawaii.  Initially, a project must be included in the
"General" or "Community" plan for the applicable County.  Next, the
developer must apply for formal zoning.  In general, zoning classifications
are more detailed than either the State urbanization designation or the
general or community plans.  Zoning normally addresses the specific use of
each parcel of land and the density of the development.  The impact of the
development on the local community is normally assessed as part of the
zoning process.  Zoning approvals in Hawaii are often accompanied by impact
fees and required improvements to public facilities and infrastructure,
such as roadways, schools, utilities and parks that must be paid for by the
developer.

     For oceanfront parcels, a special management area ("SMA") permit must
also be obtained from the County government.  The SMA permitting process
allows the County an additional opportunity to review potential
environmental, ecological and other impacts from the development, and may
also result in additional conditions on, or concessions from, the
developer.


<PAGE>


     The ability of the Company to develop its properties may be materially
adversely affected by State or County restrictions or conditions that might
be imposed in certain communities having either inadequate public
infrastructure or local opposition to continued growth.

     After all of the discretionary approvals described above have been
received, a subdivision approval must be obtained along with certain other
permits such as grading and building permits.  Normally, these approvals
are more ministerial in nature.  However, the Company has experienced
certain problems obtaining these permits in the past, which has imposed
significant additional costs on certain projects.

     The following table shows the entitlement status of the Company's land
holdings (in acres) as of December 31, 2001.

          State Classification                 County Zoning
          --------------------- ----------------------------------------
         Urban   Agri.    Cons.  Hotel     Com.     Res.   Agri.   Cons.
         -----  ------   ------  -----  ---------  -----  ------   -----
Maui       834   2,775    1,264     91         20    761   2,737   1,264

Kauai       36      37      --     --          36    --       36     --

Oahu       154     --       --     --          15    --      --      139

Hawaii     --      --       --     --         --     --      --      --
         -----  ------   ------  -----      -----   ----  ------  ------

Total    1,024   2,812    1,264     91         71    761   2,773   1,403
         =====  ======   ======  =====      =====   ====  ======  ======

Explanations for the abbreviations used above are as follows:

            Agri. - Agricultural
            Com. - Commercial/Industrial
            Res. - Residential (single or multi-family)
            Cons. - Conservation/Preservation/Open space

     The Company's development projects are described in Item 2 below.

     The Company has determined that the focus of its future development
efforts should be on its Kaanapali/Honokowai land holdings (approximately
4,400 acres) on Maui, referred to by the Company as its "Kaanapali 2020"
project. The Company believes its development efforts are best concentrated
in this area where it has certain development approvals already secured and
where successful resort development has occurred during the past thirty
years.  As a result, the primary competition for the Company's development
activities is expected to come from similar types of master-planned resort
developments at the Kapalua and Wailea resorts on Maui.  To a lesser
extent, competition also comes from other master-planned resort communities
located on the islands of Kauai and Hawaii, as well as from other states or
countries offering resort-type properties.  Though there are substantial
risks to the development of these lands as described below, the Company
believes that if it can obtain the entitlements it needs the value of the
property could be significantly enhanced, which would permit the Company's
planned reorganization to succeed.

     MARKET CONDITIONS, REGULATORY APPROVALS AND DEVELOPMENT COSTS.
There
are a number of current factors that have negatively impacted the Company's
development and land sale activities, including the market conditions, the
difficulty in obtaining regulatory approvals, the high development cost of
required infrastructure and the Company's operating deficits in its other
business segments.  As a result, the planned development of many of the
Company's land holdings and the ability to generate cash flow from these
land holdings have become long-term in nature.  However, the Company has
found it necessary to sell certain parcels in order to raise cash rather
than realize their full economic potential through the entitlement process.


<PAGE>


     The Hawaii economy experienced a downturn beginning in late 1990 after
the Persian Gulf War, a recession in Japan and a slowdown in California's
economy.  The real estate market in Hawaii was negatively impacted by these
events from which it has not fully recovered, as demonstrated by general
decreases in the volume of real estate transactions and a stagnation or
decrease in the value and pricing for certain types of real estate.
Economic trends in recent years in Japan and much of Southeast Asia
contributed to poor market conditions.  The severe negative impact of the
September 11, 2001 terrorist attacks on tourism and investment further
exacerbated the problems.  The Company believes that improvements in
tourism arrivals and the length of stay (in Hawaii) are also important to
improving Hawaii's economy and its real estate market.

     Although there can be no assurance that Hawaii's real estate market
will improve in the near term, there have been recent improvements in
certain sectors, especially in the areas of primary and secondary
residential homes and condominiums.  There has also been a number of sales
of resort properties during the past couple years at improved prices over
those experienced in the early and mid-1990's, but still at levels below
replacement cost of many of the properties.  Despite these improvements,
the real estate market, and especially the market for unimproved land, has
not improved to levels experienced during the late 1980's.  Additionally,
there can be no assurance that any possible recovery of Hawaii's real
estate market can be sustained.

     The current regulatory approval process for a development project can
take three to five years or more and involves substantial expense.  There
is no assurance that all necessary approvals and permits will be obtained
with respect to the Company's current and future projects.  Generally,
entitlements are extremely difficult to obtain in Hawaii.  There is often
significant opposition to proposed developments from numerous groups -
including native Hawaiians, environmental organizations, various community
and civic groups, condominium associations and politicians advocating
no-growth policies, among others.

     Currently, the Company is preparing market and feasibility studies in
anticipation of applying for the necessary entitlements to carry out the
Kaanapali 2020 development plan.  While some of these lands have some form
of entitlements, it is anticipated that all of the land to be developed
will require state district boundary amendments and county general plan
amendments, as well as rezoning approvals.  Approximately 1,500 acres of
this land that is located toward the top of mountain ridges and in gulches
is classified as conservation, which precludes development.  This
conservation land, and other land that will be designated as open space, is
an important component of the overall project and is part of obtaining the
entitlements for the land as a whole.  The Kaanapali 2020 development plan
is currently at a predevelopment stage.  Once the market and feasibility
studies are completed, the plan will be finalized and the entitlement
process will commence.  For the last few years, the Company has been
working with the West Maui community to plan the use and development of the
Kaanapali 2020 lands.  Committees, comprised of private sector individuals
from the community as well as public employee participants, have been
working with the company to create a vision for the future of the Kaanapali
lands.  Though not a requirement of the legal entitlement process, this
community-based planning, or "CBP", development strategy appears to have
resulted in significant community support for the Kaanapali 2020 plans.

     The Company is subject to a number of statutes imposing registration,
filing and disclosure requirements with respect to its residential real
property developments including, among others, the Federal Interstate Land
Sales Full Disclosure Act, the Federal Consumer Credit Protection Act,
federal and state environmental statutes and the State Uniform Land Sales
Practices Act.



<PAGE>


     GOLF SEGMENT.

     The Company's Golf segment had been responsible for the management and
operation of the Company's three 18-hole golf courses.  Two of the courses,
known as the Royal Kaanapali Golf Courses ("RKGC"), are on Maui adjacent to
the primary resort facilities at Kaanapali.  The RKGC are owned by Amfac
Property Investment Corp. ("APIC").  Though APIC was formerly a wholly-
owned subsidiary of the Company, as a consequence of capital contributions
made by AF Investors, LLC ("AFI"), an affiliate of Northbrook, in December
2000, AFI obtained a majority interest in APIC and the Company retained an
approximately 17% interest therein.  APIC, however, remains a guarantor of
the COLAs and the Senior Debt.  The other golf course, known as the Waikele
Golf Club, is on Oahu.  In connection with the payoff of the debt
previously encumbering the Waikele Golf Club at a substantial discount, the
Waikele Golf Club was transferred by the Company to an affiliate of
Northbrook in December 2001 and thus is no longer owned or managed by the
Company, as described below.

     The RKGC, located at the Kaanapali Beach resort on West Maui, has
faced strong competition from other resort courses on Maui, such as those
at Kapalua and Wailea.  In addition, prior to its transfer in December
2001, the Waikele Golf Club in central Oahu competed with other privately
owned and municipal golf courses on Oahu.  To a lesser extent, all three of
the courses have faced competition from golf courses on the other islands
in the State of Hawaii.  It should not be anticipated that RKGC will be a
source of any liquidity to the Company, except to the extent that APIC or
the other borrowers are able to realize proceeds or other relief from their
current litigation with the Employees' Retirement System of the State of
Hawaii ("ERS") as described below.

     APIC is the primary borrower under a $66 million loan made by the ERS
in 1991.  The loan, which has a current balance of approximately $75
million, is secured by the RKGC (and certain adjacent lands). Substantially
all of APIC's assets consist of the property that is security for the loan.

The loan matured in June 2001 and has not been extended, despite efforts of
the borrowers to obtain such an extension as described below.

     Due to insufficient cash flow generated by the RKGC and because of
disagreements with the lender over, among other things, lender's failure
(i) to consent to a grant of required easements in order for the Company to
develop and market its adjoining properties and (ii) to release adjacent
lands that are not related to the golf course operations from the mortgage,
as required under the loan documents, the Company did not pay the required
interest payments due in 2000 on the loan secured by these golf courses.
ERS then issued a default notice and instituted a foreclosure action in
August 2000 (Employees' Retirement System of the State of Hawaii v.
Amfac/JMB Hawaii, L.L.C., et. al., Civil No. 00-1-2597-08, First Circuit
Court, State of Hawaii).  Pursuant to an agreement between the lender and
the borrowers, the borrowers paid approximately $3.8 million in September
2000 to the ERS for a portion of the past due interest amounts and the ERS
agreed to temporarily suspend its action to realize upon its security while
the parties attempted to negotiate a definitive agreement to extend the
loan beyond its June 30, 2001 maturity date.  Efforts of the borrowers to
negotiate such an agreement broke down in December 2001, only after
Northbrook (an affiliate of APIC that had no obligations under the loan)
had funded certain minimum interest payments (together with the ERS' legal
fees and other related costs).  In January 2002, ERS recommenced its
foreclosure action, which the borrowers are contesting.  The borrowers have
also brought counterclaims against ERS relative to the lender's defaults
described above, which defaults have caused the Company substantial damages
relating to its efforts to sell either the unrelated parcels that the ERS
refused to release from the mortgage or other land parcels that required
easements and other rights to which the ERS was required to consent.



<PAGE>


     The borrowers' counterclaims against the ERS in such litigation
assert, among other things, that because of the refusal of the ERS to
perform in accordance with the loan documents and grant the required
consents and releases, dating back to the inception of the loan, the
Company suffered damages over time relating to various development projects
and sale transactions that the Company consummated or attempted to
consummate since 1991.  Also alleged is that these refusals and the
interference of the ERS with the Company's legitimate development efforts
was intended by ERS to give the ERS leverage over the Company's development
and land sale activities to the benefit of ERS, not to protect the ERS'
bargained for security for its loan on the RKGC.  Some projects were
substantially delayed by the ERS' defaults and significant land sales were
either substantially delayed or failed altogether.  Income from sales was
also adversely affected in addition to the expenses of development caused
by the ERS' delays and refusals.  In addition, the Company suffered
significant damages relative to the costs of attorneys and other
professionals that the Company was forced to pay (including those of ERS'
attorneys and professionals) in its failed attempt to obtain the consents
and releases.  Failure to obtain the necessary easements promised by ERS
could subject the Company to damages claims from landowners on parcels
previously sold by the Company and, particularly, could significantly
negatively impact the value and marketability of its remaining land parcel
in Kaanapali Golf Estates, which requires such easements for access and to
ensure that the parcel enjoys necessary water and drainage rights.  As a
consequence of the ERS' actions, the borrowers' counterclaims allege, among
other things, that the ERS breached its duties under the contract, breached
the ERS' implied covenant of good faith and fair dealing, fraudulently
induced the borrowers to enter into the loan, acted in a fraudulent manner
respecting its fiduciary relationship with the borrowers and/or acted in
bad faith.

     If the borrowers do not achieve an extension of the loan through
settlement discussions with the ERS, and the ERS is permitted to continue
its foreclosure action, it is likely that the ERS will take title to the
RKGC and APIC will have no further interest therein.  There is also a
substantial likelihood that any such settlement will nevertheless result in
a transfer of title to the RKGC to the ERS on terms acceptable to the
borrowers.  There can be no assurance as to the outcome of such litigation
or any settlement negotiations.

     The Waikele Golf Club had experienced a significant drop in play from
eastbound (primarily, Japanese) tour groups, which depressed rounds played
and average rate and, as a result, net operating income.  In addition,
competition from other, both new and existing golf courses on Oahu, and
continuing softness in the Japanese tour group market (which was
exacerbated by the September 11, 2001 terrorists attacks in New York City
and Washington, D.C.) thwarted the Company's efforts to market the golf
course in an effort to return it to its previous level of profitability.
The Company had refinanced the Waikele Golf Club in 1997 with a loan
facility with the Bank of Hawaii (as agent for itself and other lenders) in
the original principal amount of $25 million.  This loan facility had a
maturity date of February 2007, an interest rate of LIBOR plus 2% until the
fifth anniversary and LIBOR plus 2.25% thereafter, principal amortization
based on a 30-year amortization period, was secured by substantially all of
the assets of Waikele Golf Club, Inc., was guaranteed by AHI and was
"Senior Indebtedness" (as defined in the Indenture).  At that level of
indebtedness, it was not anticipated that the cash flow of the golf course
could continue to service the debt.  In an effort to renegotiate the loan,
the Company commenced discussions with the lender during the third quarter
of 2001.  As a result of such negotiations, the lenders agreed to sell the
loan to the Company, at a substantial discount, for a purchase price of $13
million and release AHI from its guarantee obligation.  The purchase price
approximated the fair market value of the golf course at the time.  The
loan purchase agreement also gave the Company the option to simply pay off
the loan at the discounted amount.  Though the Company had sufficient cash


<PAGE>


to close the sale, it was necessary for it to recover such amount promptly
in order to replenish its cash balances to provide for its other
obligations.  Therefore, the Company entered into a sale agreement with a
newly formed subsidiary of Northbrook, whereby such subsidiary agreed to
purchase the golf course from the Company for $13 million.  Such
transactions closed in December 2001, at which time the Company paid off
the Bank of Hawaii loan for $13 million immediately prior to the purchase
of the property by such subsidiary.  The outstanding balance on the Bank of
Hawaii loan on the closing date was approximately $23.8 million.

     AGRICULTURE SEGMENT.

     The Company's Agriculture segment remains responsible for activities
related primarily to the cultivation and sale of seed corn under a contract
with a third party.  Prior to the fourth quarter 2000 shut down of the
Lihue Plantation Company, Limited ("Lihue") and Kekaha Sugar Company,
Limited ("Kekaha Sugar") plantations on Kauai, Agriculture's revenues were
primarily derived from the sale of raw sugar.  As of the date of this
report, approximately 1,500 acres of the Company's Kaanapali 2020 land
holdings are utilized for seed corn operations.

     SUGAR OPERATIONS IN HAWAII.  The sugar industry in Hawaii has
experienced significant difficulties for a number of years which were
compounded by the significant drop in sugar prices in 2000.  Growers in
Hawaii have long struggled with high costs of production, which have led to
the closure of most of Hawaii's plantations, including the Company's Oahu
Sugar Company, Limited ("Oahu Sugar") plantation in 1995, its Pioneer Mill
Company Limited ("Pioneer Mill") plantation on Maui in 1999 and its
remaining sugar plantations on Kauai in November 2000.

     DIVERSIFIED AGRICULTURE.  The Company has considered various uses for
its agricultural lands, such as alternative crops.  The Company is
currently using portions of the land at Pioneer Mill for seed corn as
described above, which, though currently profitable, is not a significant
source of liquidity for the Company.

     However, the success of the Company's diversified agriculture program
is contingent upon the ability of the Company to continue to contract for
the cultivation and sale of its agricultural products at favorable prices.

     In the third quarter of 2001, management announced its intention to
discontinue coffee farming activities based upon the Company's prior
financial losses (which were expected to continue for the foreseeable
future), high production costs and current economic uncertainties including
record-low commodity coffee prices.  Such events have entailed employee and
closing costs similar to, though not as substantial as, those connected
with the shutdown of the Company's sugar operations.

     POWER PRODUCTION.  The Company historically has been involved in the
production of energy through the burning of bagasse, the fibrous by-product
of sugar cane processing, in the sugar plantations' boilers.  The Company
generated electrical energy and steam for the sugar plantations' own
consumption and for sale to the local public utility, Kauai Electric,
pursuant to power purchase agreements entered into between the Company and
Kauai Electric.  Gross revenues from the Company's operations at its Lihue
power plant totaled approximately $5.6 million, $5.2 million and $5.1
million for 2001, 2000 and 1999, respectively.  Because this operation was
no longer economically viable, The Lihue Plantation Company renegotiated
its power purchase agreement with Kauai Electric (the "PPA") in early 2001.

Kauai Electric's primary objective was to ensure the continued operation of


<PAGE>


the power plant until it could complete construction and bring online its
new power generation facility, which is scheduled in 2002.  Thus the
contract provides for Kauai Electric to reimburse the Company for
substantially all operating costs until the contract expires, which is no
later than December 31, 2002.  As a result, the Company does not expect
power production costs or revenues to have a significant affect on future
operations.  Revenues were significantly smaller from the Kekaha power
plant (and formerly from the Pioneer Mill power plant) since the contract
with the local utility did not require the Company to commit to a certain
level of capacity for power production and, therefore, the Company received
a significantly lower rate for its power sales.  Thus, the Company
discontinued those operations.

     As a consequence of the shutdown of the Company's sugar operations on
Kauai, Gay & Robinson, Inc. ("G&R") is the sole remaining sugar grower on
the island.  In April 2001, the Company entered into a series of Agreements
with G&R, and Hawaii Sugar and Transportation Cooperative ("HSTC"), of
which G&R is a member, whereby (1) G&R would sell and deliver bagasse (a
sugar byproduct) to the Company (as available) for the Company to burn to
generate electric power at the Lihue Plantation power plant, as required by
the PPA, (2) the Company would store the raw sugar and molasses produced by
G&R and sold to HSTC in the Company's storage facility in Lihue, subject to
a contract with HSTC and a guaranty of such contract and indemnification by
G&R, and (3) the Company would grant G&R an option to purchase the storage
facility at fair market value, so long as the option was exercised before
July 31, 2001.  G&R provided the Company with notice that it intended to
exercise the option, which triggered an arbitration process that resulted
in a sale price for the facility of $2.3 million.  The sale of the storage
facility closed in October 2001; the remaining agreements with G&R remain
in effect.

     WATER RESOURCES.  The Company has in the past needed to maintain
access to significant water sources to conduct its agricultural operations
and, in many cases, must demonstrate a sufficient supply of water in order
to obtain land development permits.  To distribute most of this water, the
Company owns or has the rights to utilize extensive civil engineering
improvements including tunnels, ditches, reservoirs and pumps.  The Company
believes that it has sufficient water resources for its present uses.


ITEM 2.  PROPERTIES

     LAND HOLDINGS.

     The major real properties owned by the Company are described below by
island.

     (a)  OAHU.

     After the closure of the Oahu Sugar plantation in 1995, the Company
began developing the 64-acre mill site located in Waipahu, which is
approximately 10 miles west of downtown Honolulu near Pearl Harbor.  The
Company received county zoning approval for a light industrial subdivision
on the property.



<PAGE>


     In December 1996, Amfac Property Development Corp. ("APDC"), a wholly-
owned subsidiary of the Company, obtained a $10.0 million loan facility
from City Bank.  The loan is secured by a mortgage on property under
development at the Oahu Sugar mill-site and is "Senior Indebtedness" (as
defined in the Indenture). The loan was originally scheduled to mature on
December 1, 1998.  In November 1998, APDC sold certain Oahu Sugar mill-site
property which served as collateral for the $10.0 million City Bank loan
for an approximate sales price of $7.7 million in cash plus 2% of the gross
sales price of subsequent parcel sales of all or any portion of the
property by the purchaser.  The bank required $6.0 million of the sales
proceeds as a principal reduction on the loan in order to release the
collateral.  APDC received a one-year extension on the $4.0 million
remaining balance of the loan which is secured by another parcel at the
mill-site.  The extended loan bore interest at the bank's base rate plus
1.25% and was scheduled to mature on December 1, 1999.  APDC reached an
agreement with the bank for an additional one year extension on $3.0
million of the $4.0 million loan.  APDC made a $1.0 million loan repayment
on December 2, 1999.  The new extended loan bore interest at the bank's
base rate plus 1.25% and matured on December 1, 2000.  In January 2001,
APDC reached an agreement with the bank for an extension until December 1,
2001 with a principal payment of $.150 million upon execution of the
agreement.  On December 1, 2001, APDC reached an agreement with the bank
for an additional extension until March 1, 2002.  The extended loan bears
interest at the bank's base rate of 4.75% at December 31, 2001 plus 2%.
APDC is continuing talks with the bank for a further extension and
renegotiation of the loan.  APDC does not have the funds necessary to pay
the remaining balance of the loan without sale of the remaining mill site
land.  If such loan cannot be further extended, it would likely result in
APDC no longer having an ownership interest in the property.

     The Company expects to market the remaining mill site land in bulk.
The Company does not anticipate expending funds for additional
infrastructure at this development.

     (b)  MAUI.

     As of December 31, 2001, the Company owns approximately 4,900 acres
of land on the island of Maui, most of which are classified as agricultural
land and conservation land for State and County purposes. All of the
Company's land holdings are located in West Maui near the Lahaina and the
Kaanapali Beach Resort areas.

     In January 2001, the Company sold approximately 5,500 acres of
agricultural and conservation land in Launiupoko for $14.5 million and
generated an additional $.8 million from various other sales during 2001.

     The Company has an approximately 16.7% ownership interest in APIC.
APIC owns and had operated the RKGC, which are two 18-hole golf courses
located at the Kaanapali Beach Resort on West Maui. The courses occupy
approximately 320 acres of land. The two Kaanapali golf courses generated
approximately $8.6 million, $10.4 million and $10.3 million, respectively,
in revenues during 2001, 2000 and 1999.  In 2001, the Company's interest in
APIC's operations is included in loss from unconsolidated subsidiary as
APIC is recorded on the equity method.  On March 19, 2002, the ERS was
successful in obtaining the appointment of a receiver for the RKGC, which
consequently no longer manages these golf courses.  (Reference is made to
Note 3.)

     The Company has determined that the focus of its future development
efforts should be on its Kaanapali 2020 land holdings (approximately 4,400
acres) on Maui. The Debtors in the Reorganization Case intend to propose a
Plan of Reorganization that will restructure the Company's debt and equity
in a manner by which the Debtors hope to enhance the value of such land
holdings by giving the Company sufficient liquidity to pursue necessary
entitlements for the property.  (See also discussion of the Reorganization
Case in Item 7. "Management's Discussion and Analysis of Financial
Condition and Results of Operations").  The Company believes its
development efforts are best concentrated in this area where it has certain


<PAGE>


development approvals already secured and where successful resort
development has occurred during the past thirty years.  Though there are
substantial risks to the development of these lands as described below, the
Company believes that if it can obtain the entitlements it needs the value
of the property could be significantly enhanced, which would permit the
Company's planned reorganization to succeed.

     In 1999, the Company began a new approach to planning for its
Kaanapali lands referred to as CBP.  The Company works to involve members
from all aspects of the West Maui community in developing an acceptable
plan for the Company's Kaanapali land holdings.  CBP has been used
successfully in several communities on the mainland such as in the Weston,
Florida development being completed by an affiliate of Northbrook.
Management is optimistic that a plan can be developed that meets the
Company's long-term financial objectives and will be supported by a broad
cross section of the community.  (See also discussion of land sales in
"Management Discussion and Analysis of Financial Condition and Results of
Operations - General".)

     The properties located in the Kaanapali/Honokowai area that are
currently owned by the Company are described in greater detail below.
While most are intended to be included as part of the Kaanapali 2020 Plan,
some will be marketed for sale to raise cash needed to pursue the Kaanapali
2020 entitlements.

     KAANAPALI GOLF ESTATES.  The Company has a non-binding contract to
sell Parcel 22/23, the remaining bulk parcel at Kaanapali Golf Estates
("KGE"), a residential community that is part of the Kaanapali Beach Resort
in West Maui.  The sale is subject to the purchaser's completing its due
diligence review of the parcel.  There can be no assurance that such sale
will be completed.

     NORTH BEACH.  In December 2000, the Company sold (to a timeshare
company) the 14-acre KOR site for a gross selling price of $19.5 million.
In addition, the timeshare company received a five-year option to purchase
Lot 2 at Kaanapali North Beach.  The option purchase price is based on the
number of units entitled at the time of closing (if an exercise of the
option were to take place).  If the option is exercised, the Company
currently expects the purchase price to be in the range of $9.0 million.
The remaining three North Beach lots (including Lot 2) total approximately
82 acres.  Under an agreement that preceded the sale to the timeshare
company, the Company was required to begin construction of improvements for
a 13-acre public park at Wainee, Maui.  The improvements are substantially
complete.  The park land and improvements have been dedicated to the County
of Maui.  The Company is currently examining its options respecting the
Lot 2 option relative to the Reorganization Case.  Additionally, Lot 4 of
North Beach Makai is listed for sale.

     The Company's remaining North Beach properties are subject to a
mortgage held by Northbrook securing a loan with the outstanding principal
and accrued interest aggregating approximately $3.2 million, as well as
another mortgage securing the remaining Senior Debt held by Northbrook and
its affiliates.  For a further description of such modification of these
notes on December 29, 2000, see Note 4.

     NORTH BEACH MAUKA. The Company is currently using a community based
planning approach for this 318-acre parcel. Currently, the Company has
Community Plan approvals and R-3 zoning (residential, minimum 10,000 square
foot lots) for North Beach Mauka. State urbanization is required, along
with final zoning and subdivision.

     PUUKOLII VILLAGE.  The Company has regulatory approval to develop a
project, known as "Puukolii Village", on approximately 249 acres located
"Mauka" ("towards the mountains") of Kaanapali Beach Resort. A significant
portion of this project will be affordable housing. Development of most of
Puukolii Village cannot commence until after completion of the planned
Lahaina/Kaanapali bypass highway, as described below.  As such, development
of this parcel is not assured and expected to be long term in any event.



<PAGE>


     MAUI INFRASTRUCTURE COSTS.  In connection with certain of the
Company's land use approvals on Maui, the Company had agreed to provide
affordable housing and to participate in the funding of the design and
construction of the planned Lahaina/Kaanapali bypass highway. The Company
has entered into an agreement with the State of Hawaii Department of
Transportation covering the Company's participation in the design and
construction of the bypass highway. In conjunction with state urbanization
of the Company's Kaanapali Golf Estates project, the Company committed to
spend up to $3.5 million (of which approximately $.8 million has been spent
as of December 31, 2001) toward the design of the highway. Due to lengthy
delays by the State in the planned start date for the bypass highway, the
Company funded approximately $1.2 million for the engineering and design of
the widening of the existing highway through the Kaanapali Beach Resort.
The Company believes this $1.2 million will be credited against the $3.5
million commitment discussed above. The Company also committed another $6.7
million for the construction of the bypass highway, subject to the Company
obtaining future entitlements on Maui and the actual construction of the
bypass highway. The development and construction of the bypass highway is
expected to be a long-term project that would not be completed until the
year 2007 or later, if ever.  The Company is currently examining its
options respecting these agreements relative to the Reorganization Case.

     The Company also reached an agreement with Maui County pursuant to
which the Company has conveyed a parcel of land, in Lahaina, the Pioneer
Mill office site and five acres of agricultural land, in satisfaction of
employee housing requirements affecting lot 1 of North Beach Makai and
affordable housing requirements affecting Kaanapali Golf Estates parcels.

     (c)  KAUAI.

     In March 2001, the Company sold approximately 460 acres of agricul-
tural lands on Kauai for approximately $3.5 million.

     In July 2001, the Company sold approximately 18,500 acres of land in
Kauai for approximately $25.0 million, the vast majority of which was
classified and zoned, by the State of Hawaii and the County of Kauai
respectively, as agricultural and conservation lands.  There were large
contiguous parcels which comprised the bulk of these Kauai land holdings,
located in Lihue/Hanamaulu on the eastern side of Kauai. As of the date of
this report, the Company owns only approximately 70 acres of land in Kauai.

     LEASES.

     The Company's two plantation subsidiaries, Lihue Plantation and Kekaha
Sugar, leased some agricultural lands from unrelated third parties in 2001.

The Kekaha Sugar leases have expired or been terminated and Lihue
Plantation has only one lease remaining as described below.  Almost all of
the leased land of the Company was used in connection with the cultivation
of sugar cane. Most of the leases provided that the Company pay fixed
annual minimum rents (ranging from $10 to $28 per usable acre), plus
additional rents based upon a percentage of gross receipts above a
specified level. During the past three years, the Company has paid only
minor amounts of percentage rent on the leases.  Due to the shutdown of the
Company's remaining sugar plantations, the Company has filed a motion in
the Reorganization Case to reject such lease, which was granted by the
court and an order entered on April 2, 2002.

     The following summary lists the material land lease of the Company's
subsidiaries, as lessees, and certain material terms thereof as of the date
of this report:

                                     Sugar Cane
                    Expiration       Acreage in     Gross     Minimum
     Plantation     Date             Cultivation   Acreage      Rent
     ----------     -------------    -----------   -------    --------
     Lihue          12/15/02                   0     3,106    $ 20,630




<PAGE>


     OTHER PROPERTY.

     In addition to the real property discussed above, the Company also
owns two sugar mills, each with its own power plant. The mills and power
plants are located in Kekaha and Lihue, Kauai. Each of these facilities was
involved in the production of raw sugar from sugar cane and the production
of electrical and steam power until their closings in late 2000.  As
described above, the Lihue power plant continues to operate pursuant to a
modified agreement with the local electric utility, which expires at or
before the end of 2002.


ITEM 3.  LEGAL PROCEEDINGS

     Material legal proceedings of the Company are described below.  In
proceedings where a Debtor is a defendant, such proceedings have been
stayed as against such Debtor by the filing of the Reorganization Case.
Proceedings against subsidiaries or affiliates of AHI that are not Debtors
may proceed.

     APIC is the primary borrower under a $66 million loan made by the ERS
in 1991.  The loan, which has a current balance of approximately $75
million, is secured by the RKGC (and certain adjacent lands).
Substantially all of APIC's assets consist of the property that is security
for the loan.  The loan matured in June 2001 and has not been extended,
despite efforts of the borrowers to obtain such an extension as described
below.

     Due to insufficient cash flow generated by the RKGC and because of
disagreements with the lender over, among other things, lender's failure
(i) to consent to a grant of required easements in order for the Company to
develop and market its adjoining properties and (ii) to release adjacent
lands that are not related to the golf course operations from the mortgage,
as required under the loan documents, the Company did not pay the required
interest payments due in 2000 on the loan secured by these golf courses.
ERS then issued a default notice and instituted a foreclosure action in
August 2000 (Employees' Retirement System of the State of Hawaii v.
Amfac/JMB Hawaii, L.L.C., et. al., Civil No. 00-1-2597-08, First Circuit
Court, State of Hawaii).  Pursuant to an agreement between the lender and
the borrowers, the borrowers paid approximately $3.8 million in September
2000 to the ERS for a portion of the past due interest amounts and the ERS
agreed to temporarily suspend its action to realize upon its security while
the parties attempted to negotiate a definitive agreement to extend the
loan beyond its June 30, 2001 maturity date.  Efforts of the borrowers to
negotiate such an agreement broke down in December 2001, only after
Northbrook (an affiliate of APIC that had no obligations under the loan)
had funded certain minimum interest payments (together with the ERS' legal
fees and other related costs).  In January 2002, ERS recommenced its
foreclosure action, which the borrowers are contesting.  The borrowers have
also brought counterclaims against ERS relative to the lender's defaults
described above, which defaults have caused the Company substantial damages
relating to its efforts to sell either the unrelated parcels that the ERS
refused to release from the mortgage or other land parcels that required
easements and other rights to which the ERS was required to consent.

     The borrowers' counterclaims against the ERS in such litigation
assert, among other things, that because of the refusal of the ERS to
perform in accordance with the loan documents and grant the required
consents and releases, dating back to the inception of the loan, the
Company suffered damages over time relating to various development projects
and sale transactions that the Company consummated or attempted to
consummate since 1991.  Also alleged is that these refusals and the
interference of the ERS with the Company's legitimate development efforts
was intended by ERS to give the ERS leverage over the Company's development


<PAGE>


and land sale activities to the benefit of ERS, not to protect the ERS'
bargained for security for its loan on the RKGC.  Some projects were
substantially delayed by the ERS' defaults and significant land sales were
either substantially delayed or failed altogether.  Income from sales was
also adversely affected in addition to the expenses of development caused
by the ERS' delays and refusals.  In addition, the Company suffered
significant damages relative to the costs of attorneys and other
professionals that the Company was forced to pay (including those of ERS'
attorneys and professionals) in its failed attempt to obtain the consents
and releases.  Failure to obtain the necessary easements promised by ERS
could subject the Company to damages claims from landowners on parcels
previously sold by the Company and, particularly, could significantly
negatively impact the value and marketability of its remaining land parcels
in Kaanapali Golf Estates, which requires such easements for access and to
ensure that the parcel enjoys necessary water and drainage rights.  As a
consequence of the ERS' actions, the borrowers' counterclaims allege, among
other things, that the ERS breached its duties under the contract, breached
the ERS' implied covenant of good faith and fair dealing, fraudulently
induced the borrowers to enter into the loan, acted in a fraudulent manner
respecting its fiduciary relationship with the borrowers and/or acted in
bad faith.  The counterclaim seeks, among other things, damages, attorney's
fees and costs, and an order directing the ERS to provide the releases and
consents required by the loan documents.  There can be no assurance that
defendants will prevail in the counterclaim or in the defense of ERS's
attempt to realize on its security.  On March 19, 2002, the court entered
an order appointing a receiver for the property that is security for the
loan, as well as for the golf course operations related thereto.

     If the borrowers do not achieve an extension of the loan through
settlement discussions with the ERS, and the ERS is permitted to continue
its foreclosure action, it is likely that the ERS will take title to the
RKGC and APIC will have no further interest therein.  There is also a
substantial likelihood that any such settlement will nevertheless result in
a transfer of title to the RKGC to the ERS on terms acceptable to the
borrowers.  There can be no assurance as to the outcome of such litigation
or any settlement negotiations.

     On October 31, 2001, Amfac Hawaii, LLC was named in a lawsuit entitled
Lloyd Akiona, et al. v. Amfac/JMB Hawaii, LLC and AquaSource, Inc., Civil
No. 01-1-05979, filed in the Circuit Court of the Second Circuit, State of
Hawaii.  Defendant Amfac Hawaii, LLC removed the case to federal court.  In
this action, six plaintiffs collectively seek approximately $191,000 in
severance payments they allege they were entitled to as a result of the
sale of the stock of Kaanapali Water Corporation to AquaSource, Inc. in
March 1999.  Plaintiffs seek damages, interest, attorneys' fees, and costs.

Defendant believes it has substantial defenses and intends to vigorously
defend itself.

     On February 1, 2002, Transcend, Inc. filed a lawsuit entitled
Transcend, Inc. v. Amfac/JMB Hawaii, Inc., et. al., Civ. No. 02-1-0287-02
in the First Circuit Court, State of Hawaii.  Plaintiff alleges that it
purchased six cane haul trucks and that defendant entities failed to make
delivery.  In this four count complaint for breach of contract, quantum
meruit, conversion and trespass, plaintiff seeks general, special, and
punitive damages.  Plaintiff includes a monetary demand for $786,240 in the
first count of the complaint, as well as a request for attorneys fees,
costs, and further unspecified relief.  Plaintiff names Amfac/JMB Hawaii,
Inc. and Amfac Sugar Kauai as defendants, among others.  Defendants have
filed an answer denying the substantive allegations of the complaint.
Defendants believe that they have meritorious defenses.



<PAGE>


     On July 19, 2001, The Gutman Realty Company filed a lawsuit entitled
Gutman Realty Company v. Amfac Property Investment Co., Civ. No. 01-1-
0392(3), in the Second Circuit Court, State of Hawaii.  In the suit,
plaintiff allegedly seeks to recover unpaid rent for premises located at
2350 Kekaa Drive, Lahaina, Maui.  The complaint alleges that the unpaid
rent as of July 13, 2001 was $348,926.33 and seeks recovery of that amount
with interest, any future rents owing from that date forward, reasonable
attorneys fees, interest, costs, and any further relief that the court
might deem just and proper.  On October 9, 2001, APIC filed its answer
denying the substantive allegations of the complaint and/or seeking an
offset for any rents deemed to be lawfully owing and a counterclaim for
unpaid management fees and reimbursements arising out of the relationship
between the parties.  APIC intends to vigorously defend itself in this
matter, but no assurances can be given that it or the Company will not
incur liability in connection with this case.

     On September 20, 1996, Oahu Sugar Company, Limited ("Oahu Sugar")
filed a lawsuit, Oahu Sugar v. Walter Arakaki and Steve Swift, Case No. 96-
3880-09, in the Circuit Court of the First Circuit, State of Hawaii.  In
the lawsuit, Oahu Sugar alleged that it entered into an agreement to sell
to defendants certain sugar cane processing equipment at Oahu Sugar's sugar
cane mill in Waipahu.  Oahu Sugar alleged that defendants failed to timely
dismantle and remove the equipment, as required by the agreement, and that
defendants were obligated to pay Oahu Sugar rent for the area occupied by
the equipment beyond the time provided for by the parties.  Oahu Sugar
further alleged that it provided notice to defendants that Oahu Sugar was
entitled to treat the equipment as abandoned property and to sell the
equipment, because the equipment had not been removed from the property in
a timely fashion, as required by the parties' agreement.  In its complaint,
Oahu Sugar sought, among other things, declaratory relief that it was
entitled to treat the equipment as abandoned, damages for breach of
contract, and rent under an unjust enrichment theory.

     Defendants filed an answer, as amended, denying the substantive
allegations of Oahu Sugar's complaint and asserting various affirmative
defenses.  In addition, the defendants filed a seven-count counterclaim
against Oahu Sugar.  In the counterclaim, defendants alleged, among other
things, that Oahu Sugar failed to make the equipment available for removal
on a timely basis, and that Oahu Sugar otherwise improperly interfered with
defendants' plans for the removal and subsequent sale of the equipment.  In
the counterclaim, defendants sought, among other things, general, special
and punitive damages, attorneys' fees, costs, and such other relief as the
Court may have deemed appropriate.

     Oahu Sugar's declaratory relief claim was settled in advance of trial.

Oahu Sugar obtained dismissals and directed verdicts on six of defendants'
claims.  The remaining portions of the complaint and counterclaim proceeded
to a jury trial and verdict.  On December 2, 1999, the jury denied Oahu
Sugar relief on its remaining claims and awarded the defendants
approximately $2.6 million in damages on their counterclaim.  On March 2,
2000, the trial court entered a judgment against Oahu Sugar for the $2.6
million in damages awarded by the jury.  In addition, the trial court
awarded counterclaimants $751,000 in attorneys' fees, $28,000 in costs and
$866,000 in prejudgment interest.  Oahu Sugar's post trial motions for
judgment as a matter of law and for a new trial were denied.  Oahu Sugar
filed a notice of appeal.  The defendants began efforts to collect the
amounts awarded to them.  Defendants caused garnishee summons to be issued
to various affiliated and unaffiliated entities.  The defendants scheduled
a debtor's examination for August 23, 2000 which was not concluded.  The
Hawaii Supreme Court scheduled the case for an appellate conference and
mediation that was unsuccessful.  Then, on January 3, 2001, the Hawaii
Supreme Court entered an order dismissing the appeal.  The Supreme Court
held that it lacked jurisdiction over the appeal because the judgment
entered on March 2, 2000 was legally defective in that it did not identify
the claim for which judgment was entered or dismiss all of the other claims


<PAGE>


and counterclaims of the parties.  In light of the order of the Hawaii
Supreme Court, the parties filed legal briefs before the trial court to
have the court determine, among other things, whether a corrected judgment
consistent with the jury verdict may be entered as of March 2, 2000 or a
new judgment order is required.  After hearing the arguments of the
parties, on March 19, 2001, the trial court ruled that it would not enter a
corrected judgment as of March 2, 2000 and that a new judgment order will
be required.  On April 12, 2001, the court entered the new judgment order
on the counterclaims providing for the payment of approximately $2.6
million in damages, $730,000 in attorneys' fees, $28,000 in costs, $867,000
in prejudgment interest, and additional prejudgment interest from
January 20, 2000 through April 12, 2001.  From and after entry of the
order, post-judgment interest will accrue on the unpaid balance at the
statutory rate of ten percent per annum until paid in full.  Oahu Sugar is
pursuing an appeal and the opposing side has filed a cross appeal seeking
further relief on any potential retrial of the matter.  The case is fully
briefed and awaits a decision by the Hawaii Supreme Court.  Oahu Sugar
continues to believe that it is entitled to affirmative relief on its
complaint and that it has meritorious defenses to the counterclaim that it
has pursued on appeal.  The Company, however, can provide no assurances
that it will be successful in obtaining affirmative relief or overturning
the verdict against Oahu Sugar.  This verdict, if upheld, could have a
material adverse effect on the Oahu Sugar's financial condition.

     On or about December 15, 2000, Oahu Sugar and APDC, among others, were
named in a lawsuit entitled Walter Arakaki and Steve Swift v. Oahu Sugar
Company, Limited et al., Civil No. 00-1-3817-12, and filed in the Circuit
Court of the First Circuit of Hawaii.  In the complaint, as amended,
plaintiffs seek a declaration that certain conveyances of real estate made
by Oahu Sugar or APDC, since December 1996, were allegedly fraudulent
transfers made in violation of the common law, the Hawaii fraudulent
transfer act, and rights which they claim arose in connection with the
claims they filed in Oahu Sugar v. Walter Arakaki and Steve Swift, Case No.
96-3880-09, discussed above (hereinafter, "underlying matter").  Plaintiffs
seek, among other things, injunctive and declaratory relief, compensatory
damages, punitive damages, orders of attachment against sales proceeds,
voidance of certain transfers, foreclosure and other remedies in connection
with various transfers of real estate made by Oahu Sugar to APDC, the Young
Men's Christian Association of Honolulu ("YMCA"), and the Filipino
Community Center, Inc. ("FCC"), among others, all over the years 1996-2000.

The YMCA and FCC have also been named defendants in this action and have
filed cross-claims for relief against Oahu Sugar and APDC for alleged
breach of warranty of title, indemnity and contribution in connection with
their respective transactions, and seeking, among other things, damages,
attorneys' fees, costs, and prejudgment interest.  Oahu Sugar and APDC have
filed answers to the complaint, as amended, and the cross-claims.  On
May 3, 2001, plaintiffs filed an amended complaint dropping the remedy of
foreclosure in connection with certain property transferred to the YMCA and
adding various allegations including, without limitation, allegations
regarding the final judgment entered in the underlying manner.  The case is
proceeding and the plaintiffs must file their pretrial statement on June
15, 2002.  Oahu Sugar and APDC believe they have meritorious defenses and
intend to pursue their defenses vigorously.  However, there can be no
assurances that this case, when once adjudicated, will not have a material
adverse effect on the financial condition of Oahu Sugar or APDC.

     On October 7, 1999, Oahu Sugar Company was named in a lawsuit
entitled, Akee, et al. v. Dow Chemical Company, et al., Civil No. 99-3757-
10, and filed in Hawaii State Court (Circuit Court of the First Circuit of
Hawaii).  This multiple plaintiff toxic tort case named Oahu Sugar and a
number of additional defendants including several large chemical, petroleum
and agricultural companies.  In March 2000, Oahu Sugar Company was
dismissed without prejudice.



<PAGE>


     On September 30, 1999, Oahu Sugar was one of several defendants named
in a lawsuit entitled, City and County of Honolulu v. Leppert, et al.
Civil No. CV 99 00670 ACK-FIY, and filed in the federal court, District of
Hawaii. The plaintiff asserted several causes of action including actions
for (1) clean-up and other response costs under the Comprehensive
Environmental Response, Compensation, and Liability Act ("CERCLA"); (2)
owner/operator liability, contribution and indemnity under Hawaii statutory
law; (3) strict liability for ultrahazardous activity; and (4) negligence.
Plaintiff alleged that defendant Oahu Sugar previously operated a sugar
mill on property currently owned by plaintiff, and used pesticides,
herbicides, fumigants, petroleum products and by-products and other
hazardous chemicals which were allegedly released into the soil and/or
groundwater at the subject property. Plaintiff sought recovery of response
costs it has incurred and to be incurred, a declaration of the rights and
liabilities for past and any future claims, damages for lost property
value, technical consulting and legal costs in investigating the property,
increased construction costs, and attorneys' fees and costs.  Two of the
other defendants, Clinton Churchill and David Heenan, as trustees under the
will and estate of James Campbell ("Campbell Estate"), filed a third party
complaint, as amended, seeking indemnity and contribution from Oahu Sugar
arising from, among other things, a lease between Oahu Sugar and Campbell
Estate concerning the land which is allegedly contaminated.  The Campbell
Estate also filed a third party complaint, as amended, against Northbrook
Corporation ("Northbrook") seeking a defense and indemnity.

     On September 30, 1999, Oahu Sugar was named in a related lawsuit
entitled, City and County of Honolulu v. Leppert, et al., Civil No. 99-
3678-09, and filed in Hawaii State Court, Circuit Court for the First
Circuit of Hawaii.

     These related City and County of Honolulu cases were settled in
September 2001 with releases being exchanged by and between the parties.
The settlement was funded in large part by one of Oahu Sugar's insurers.

     On May 10, 2000, Oahu Sugar was named in a civil action entitled,
Albert and Marciana Kalaikai v. Oahu Sugar, et. al., pending in the Circuit
Court of the First Circuit, State of Hawaii, Civil No. 00-1-1497-05.
Pioneer Mill Company was named in this suit, but was not served.  In this
case, plaintiffs seek damages for alleged asbestos related injuries
sustained, among other things, from exposure to asbestos-containing
products over the course of in excess of forty years and at numerous
locations including the Oahu Sugar mill site over the period of 1950-1960.
The case is in the beginning stages of litigation and Oahu Sugar intends to
defend itself vigorously.

     An insurance carrier for Oahu Sugar has agreed to defend Oahu Sugar in
the Kalaikai case, subject to a reservation of rights.  Oahu Sugar can give
no assurances as to the portion of the defense costs and indemnity costs,
if any, that will be ultimately borne by the insurance carrier.

     Oahu Sugar is substantially without assets to satisfy any judgment in
the action.  However, the liability, if any, of Oahu Sugar in this asbestos
matter should not extend to AHI and its other subsidiaries.

     Oahu Sugar was also named a defendant in another alleged asbestos
related personal injury action entitled, Anthony Fiori and Stella Fiori v.
Raybestos-Manhattan, filed in the San Francisco County Superior Court, Case
No. 304868, filed on or about July 13, 1999.  In the complaint, plaintiffs
sought $3.0 million in economic and non-economic damages, as well as $1.0
million in punitive damages, for injuries alleged sustained.  The matter
settled in July 2001 with a payment of $10,000 funded by one of Oahu
Sugar's insurers.

     The Company believes that Oahu Sugar has meritorious defenses to the
above referenced pending lawsuits that continue to be pending and Oahu
Sugar will defend itself vigorously. However, there can be no assurances
that these cases (or any of them), if adjudicated, will not have a material
adverse effect on the financial condition of Oahu Sugar.



<PAGE>


     On or about February 23, 2001 Kekaha Sugar Co., Ltd. received a letter
from the Hawaii Department of Health ("HDOH") assigning the Kekaha Sugar
Co., Ltd. site a high priority status based on HDOH's review of available
environmental data.  In the letter, HDOH identified five major areas of
potential environmental concern including the former wood treatment plant,
the herbicide mixing plant, the seed dipping plant, the settling pond, and
the Kekaha Sugar Mill.  While setting forth specific concerns, the HDOH
reserved the right to designate still further areas of potential concern
which might require further investigation and possible remediation.  HDOH
further reserved the right to modify its prioritization of the site should
conditions warrant.  The assignment of the high priority status will likely
result in a high degree of oversight by the HDOH as the issues raised are
studied and addressed.  Kekaha Sugar Co., Ltd. has responded to the letter.

Kekaha Sugar Co., Ltd. is substantially without assets and further pursuit
of this matter by HDOH could have a materially adverse effect on the
financial condition of Kekaha Sugar Co., Ltd.

     On or about February 23, 2001, Lihue Plantation Co., Ltd. received a
similar letter from the HDOH assigning the Lihue Plantation Co., Ltd. site
a high priority status based on HDOH's review of available environmental
data.  In the letter, HDOH identified four major areas of potential
environmental concerning including the Lihue herbicide mixing plant, the
seed dipping plant, the settling pond and the Lihue Sugar Mill.  While
setting forth specific concerns, the HDOH reserved the right to designate
still further areas of potential concern which might require further
investigation and possible remediation.  HDOH further reserved the right to
modify its prioritization of the site should conditions warrant.  As noted
above, the high priority assignment will likely result in a high degree of
oversight by the HDOH as the issues raised are studied and addressed.

     APDC has discovered chlorinated solvents in the groundwater at the
former Oahu Sugar Waipahu Sugar Mill site.  The contamination does not
appear in high concentrations.  APDC's recommendation for remediation using
hydrogen-releasing compounds has been rejected by the HDOH.  APDC may have
to do further work at the site.  At this point, APDC is unable to identify
with certainty the treatment options, if any, that the HDOH may require or
approve for the site, or the costs of same.

     As a result of an administrative order issued to Oahu Sugar Company by
the Hawaii Department of Health, Order No. CH 98-0012, dated January 27,
1998, Oahu Sugar is currently engaged in environmental site assessment of
lands it leased from the U.S. Navy and located on the Waipio Peninsula.
Sampling is underway and the investigation is otherwise still in its
preliminary stages.

     Other than as described above, the Company is not involved in any
material pending legal proceedings, other than ordinary routine litigation
incidental to its business. The Company and/or certain of its affiliates
have been named as defendants in several pending lawsuits. While it is
impossible to predict the outcome of such routine litigation that is now
pending (or threatened) and for which the potential liability is not
covered by insurance, the Company is of the opinion that the ultimate
liability from any of this litigation will not materially adversely affect
the Company's consolidated results of operations or its financial
condition.



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

     There were no matters submitted to a vote of security holders during
2000 and 2001.




<PAGE>


                                  PART II

ITEM 5.  MARKET FOR THE COMPANY'S COMMON EQUITY AND
         RELATED SECURITY HOLDER MATTERS

     The Company is wholly-owned by Northbrook.  There is no public market
for the Company's membership interest.


ITEM 6. SELECTED FINANCIAL DATA

                             AMFAC HAWAII, LLC
     For the years ended December 31, 2001, 2000, 1999, 1998 and 1997
                          (Dollars in Thousands)

                      2001       2000      1999       1998       1997
                    --------   --------  --------   --------   --------
Total revenues
 (c) . . . . . .    $ 59,958     75,208    67,872     99,654     86,383
                    ========   ========  ========   ========   ========
Net income
 (loss) (d). . .    $(39,620)   (51,799)  (19,873)   (41,735)   (25,572)
                    ========   ========  ========   ========   ========
Net income
 (loss) per
 share (b)

Total assets . .    $153,989    152,287   359,694    431,080    464,245
                    ========   ========  ========   ========   ========
Amounts due
 affiliates -
 Senior debt
 financing . . .    $186,108    192,555   172,965    110,325    125,290
                    ========   ========  ========   ========   ========
Certificate of
 Land Apprecia-
 tion Notes. . .    $139,413    139,413   139,413    220,692    220,692
                    ========   ========  ========   ========   ========

      (a)   The  above selected financial data should be read in conjunc-
tion with the financial statements and the related notes appearing
elsewhere in this annual report on Form 10-K.

      (b)   The Company is a wholly-owned subsidiary of Northbrook;
therefore, net loss per share is not presented.

      (c)   Total revenues includes interest income of $895 in 2001, $85 in
2000, $785 in 1999, $976 in 1998 and $386 in 1997.

      (d)   In 2001 and 1999, the Company recognized an extraordinary gain
from the extinguishment of debt of $6,498 and $11,265 (after reduction of
income taxes of $4,155 and $7,203), respectively, which is reflected in
2001 and 1999 net income (loss).




<PAGE>


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

     All references to "Notes" herein are to Notes to Consolidated
Financial Statements contained in this report.

LIQUIDITY AND CAPITAL RESOURCES

     GENERAL.

     In addition to historical information, this Annual Report contains
forward-looking statements within the meaning of the Private Securities
Litigation Reform Act 1995.  These statements are based on management's
current expectations about its businesses and the markets in which the
Company operates.  Such forward-looking statements are not guarantees of
future performance and involve known and unknown risks, uncertainties or
other factors which may cause actual results, performance or achievements
of the Company to be materially different from any future results,
performance or achievements expressed or implied by such forward-looking
statements.  Actual operating results may be affected by various factors
including, without limitation, changes in national and Hawaiian economic
conditions, competitive market conditions, uncertainties and costs related
to and the imposition of conditions on receipt of governmental approvals
and costs of material and labor, all of which may cause such actual results
to differ materially from what is expressed or forecast in this report.

REORGANIZATION CASE

     On February 27, 2002, AHI and the other Debtors filed separate
petitions for voluntary relief under Chapter 11 of the U.S. Bankruptcy
Code.  The other Debtors include FHT Corporation ("FHT"), which is a
subsidiary of Northbrook but not a subsidiary of AHI and not a guarantor of
the COLAs, and the following direct and indirect subsidiaries of AHI
(together with AHI, the "AHI Debtors"), some of which are Registrants:
Amfac Land Company, Limited, Pioneer Mill Company, Limited, The Lihue
Plantation Company, Limited, Kaanapali Estate Coffee, Inc., KDCW, Inc.,
Amfac Holdings Corp., Kaanapali Development Corp. and Waikele Golf Club,
Inc.  Other subsidiaries and affiliates of AHI, including for example Oahu
Sugar Company, Limited, APIC and APDC, did not file separate voluntary
petitions.

     At the time of the filing of the Reorganization Case, AHI had a total
outstanding Senior Debt obligation (principal and accrued interest) to
Northbrook and its affiliates of approximately $188 million and its
outstanding COLA obligation (principal and accrued interest) totaled
approximately $142 million.  Under the Indenture, the Senior Debt held by
Northbrook and its affiliates is senior to the COLAs.  Moreover, as
described below, the Senior Debt is supported by mortgages and other
security interests on substantially all of the Company's real property and
certain other assets.  These obligations were guaranteed by all of the
Company's significant subsidiaries, including those that are not AHI
Debtors in the Reorganization Case.

     The total debt burden evidenced by these obligations alone had proved
unmanageable and was draining the Company of cash needed to pursue its
business plan, including entitling the Company's approximately 4,000
remaining acres "Mauka" of the Kannapali Resort area.  During 2002,
additional interest payments on the COLAs are due in the aggregate amount
of approximately $5.5 million.  In addition, substantial amounts of
deferred interest payments under the Senior Debt were also coming due.
Because it was evident that the Debtors would not have the cash resources
to satisfy their respective obligations, let alone to pursue the Company's
business plan, the Reorganization Case was filed in order to give the
Debtors the opportunity to restructure their debt and equity and emerge as
a reorganized group of companies.  Thus, as a consequence of the filing,
the interest payment on the COLAs that was due on February 28, 2002 was not
made.



<PAGE>


     The Debtors and the holders of Senior Debt engaged in extensive
negotiations with the Trustee during the months preceding the filing.  Such
negotiations included the Trustee hiring legal counsel and a financial
advisor to perform due diligence on the Debtors' assets, at the Company's
cost, in order to satisfy the Trustee that the Plan of Reorganization (the
"Plan") proposed by the Debtors would provide the COLA holders with a
greater recovery than they could expect in a liquidation of the Company.
Such negotiations resulted in the agreement of the Trustee and the Debtors
on the framework for a plan.  A copy of the form of notice that the Trustee
sent to all holders of COLAs that describes such negotiations was reported
by the Company on a Form 8-K on March 20, 2002.  The Debtors are in the
process of finalizing such documentation and intend to file their proposed
Plan and supporting disclosure statement (and other supporting
documentation) with the Bankruptcy Court during the second quarter of 2002.

It is anticipated that such documentation will provide that the holders of
COLAs (among other classes of interested parties) will have the opportunity
to vote on the Plan.  Such documentation, if and when approved by the
Bankruptcy Court, will govern the reorganization of the Debtors, and the
holders of COLAs should refer to such documentation when available in
determining whether to vote for the Plan and the procedures therefor.

     In the meantime, the filing of the Reorganization Case has stayed all
pending litigation against the Debtors.  Though the Bankruptcy Court has
entered certain orders at the request of the Debtors that will permit them
to pay certain "pre-petition" amounts and otherwise operate at their
discretion in the ordinary course of business, the Debtors intend to
carefully review all of their options in that regard.  The Debtors continue
to operate their business after the filings in the ordinary course, subject
to the jurisdiction of the Bankruptcy Court and the requirements of the
Bankruptcy Court and the rules thereunder.

     In the event that a plan in the Reorganization Case is not confirmed
or sufficient votes accepting the plan are not received and, as a result,
the AHI Debtors are unable to confirm a plan as proposed, the AHI Debtors
will assess the alternatives available to them including (i) seeking to
restructure its capitalization and its obligations to creditors and equity
holders under an alternative plan of reorganization, (ii) a liquidation
under Chapter 11 of the Code or (iii) a conversion of these cases to a
Chapter 7 liquidation proceeding.  In addition, the holders of the Senior
Debt may seek to lift the stay entered by the Bankruptcy Court and
foreclose on the assets securing their debt.  The inability to promptly
confirm the Plan will delay the AHI Debtors' emergence from bankruptcy and
could have a material adverse affect on the value of the AHI Debtors'
business and assets.  There is substantial risk that any alternative
restructuring or a liquidation will result in less favorable treatment of
claims and interests, including those of the COLA holders, than that
provided by the plan.

     SIGNIFICANT LIQUIDITY EVENTS DURING REPORTING PERIOD

     During the third quarter of 2000, management announced the shutdown of
its remaining sugar plantations on Kauai.  The decision was made as a
result of significant losses incurred during 2000, and the expectation that
such losses would continue for the foreseeable future.  The losses resulted
primarily from a significant drop in the domestic price of raw sugar and
lower sugar yields, together with labor costs that were significantly in
excess of those borne by other non-Hawaiian sugar producers supplying the
domestic market.  The Company completed its final harvest of sugar cane in
November 2000.  As a consequence of the shutdown, the Company incurred
significant employee and other closing costs in 2000 and 2001.  The Company
sold certain of its field and mill equipment associated with the closed
facilities during 2001 and the first quarter of 2002, but due to the age
and condition of the equipment, the forced nature of the sale and
significant transaction costs, the Company did not obtain significant net
proceeds from such sales.


<PAGE>


     In the third quarter of 2001, management announced its intentions to
discontinue coffee farming activities based upon the Company's prior
financial losses (which were expected to continue for the foreseeable
future), high production costs and current economic uncertainties including
record-low commodity coffee prices.  Such events have entailed employee and
closing costs similar to, though not as substantial, as those connected
with the shutdown of the Company's sugar operations.

     As a consequence of the shutdown of the Company's sugar operations on
Kauai, Gay & Robinson, Inc. ("G&R") is the sole remaining sugar grower on
the island.  In April 2001, the Company entered into a series of Agreements
with G&R, and Hawaii Sugar and Transportation Cooperative ("HSTC"), of
which G&R is a member, whereby (1) G&R would sell and deliver bagasse (a
sugar byproduct) to the Company (as available) for the Company to burn to
generate electric power at the Lihue Plantation power plant, as required by
the Company's power purchase agreement with Kauai Electric (the "PPA"), (2)
the Company would store the raw sugar and molasses produced by G&R and sold
to HSTC in the Company's storage facility in Lihue, subject to a contract
with HSTC and a guaranty of such contract and indemnification by G&R, and
(3) the Company would grant G&R an option to purchase the storage facility
at fair market value, so long as the option was exercised before July 31,
2001.  G&R provided the Company with notice that it intended to exercise
the option, which triggered an arbitration process that resulted in a sale
price for the facility of $2.3 million.  The sale of the storage facility
closed in October 2001.  As a result of the sale, a $2.3 million payment
was made by AHI, in October 2001, on the note payable to Northbrook and
secured by AHI's interest in the North Beach Property (See Note 4).

     The Company faces large contingent cash expenditures due to (i) the
cost of the litigation and environmental matters described in Item 3.
"Legal Proceedings" and (ii) environmental clean up and other shutdown
costs relating to the land and mill sites associated with Oahu, Kekaha,
Lihue and Pioneer Mill plantations and buildings which could be significant
but are presently not determinable.  It is difficult to predict the
ultimate outcome of these various contingencies, any of which could have a
material adverse effect on the financial condition of the Company.
However, some of such matters have been stayed by the filing of the
Reorganization Case and others are likely to be reduced in the event that
the Plan is approved by the Bankruptcy Court.

     As reflected in the Company's December 31, 2001, balance sheet,
approximately $183.4 million of Senior Debt owed to affiliates of the
Company is categorized as a current liability.  The classification as a
current liability results from defaults that occurred under such Senior
Debt due to actions taken by ERS to realize upon indebtedness owed to it,
and due to the adverse verdict in the Oahu Sugar V. Arakaki and Swift
lawsuit described under Item 3. "Legal Proceedings". Under the
Restructuring Agreement, effective as of December 29, 2000, among the
Company, certain of the Company's subsidiaries and certain holders of
Senior Debt affiliated with Northbrook, the parties agreed that the
defaults described above would continue but that the Senior Debt holders
would not exercise their remedies against the Company and its subsidiaries
based upon those defaults until either ERS obtains a judgment, or attempts
to exercise certain remedies, against the Company, or unless necessary to
protect such holders' superior rights under the Senior Debt against the
plaintiffs in the Swift/Arakaki lawsuit.  It is anticipated that the claims
of the holders of the Senior Debt will be resolved in the Reorganization
Case as to the Debtors.  As to entities that are not Debtors but that are
liable on the Senior Debt, there can be no assurance that the Senior Debt
holders will not pursue their remedies under the Senior Debt, either
because of actions by ERS or the opponents in the Swift/Arakaki lawsuit or
because of additional defaults arising under the Senior Debt.



<PAGE>


     The Company sold a parcel on Maui near Lahaina in the first quarter of
2001, a parcel in Hanamaulu, Kauai, also in the first quarter of 2001,
additional parcels in Hanamaulu, Kauai in the second quarter of 2001,
additional parcels in Hanamaulu and Lihue on Kauai in the third quarter of
2001 and the Kauai Sugar Storage facility in Lihue in the fourth quarter of
2001 which provided funds to the Company to help meet its short-term
liquidity needs including mandatory prepayment on Senior Indebtedness.
However, the Company believed that in the absence of additional land and
business sales or financing from third parties (which has generally not
been obtainable), additional Senior Debt borrowings from Northbrook or its
affiliates were necessary to meet its COLA related obligations and long-
term liquidity needs.  To the extent land sales did occur in 2001, any
funds received in excess of the Company's short-term needs have been used
to pay down Senior Debt in accordance with the debt restructure completed
in December 2000 (see Note 9).  As a result of property sales in 2001,
prepayments were made during the third and fourth quarters of 2001.
However, as costs continued to outstrip revenues and sources of liquidity
were no longer available to the Company given its existing debt burden, the
Debtors determined it was necessary to seek financial relief through the
filing of the Reorganization Case, rather than expend its remaining cash
reserves to satisfy its debt service obligations.

     During the year ended December 31, 2000, the Company borrowed
approximately $5.6 million from Northbrook for the Mandatory Base Interest
payments related to the COLAs due in 2000.  During the year ended
December 31, 2000, the Company borrowed an additional $4.3 million from
Northbrook to fund capitalizable property development and agriculture
disbursements.  The borrowings were repaid with interest in January 2001.
To the extent that Northbrook or its affiliates made such borrowings
available to the Company during 2000, any such borrowings were required (i)
to be "Senior Indebtedness" (as defined in the Indenture), (ii) to accrue
interest at the rate of prime plus 1%, and (iii) to have principal and
interest fully repayable by February 28, 2001 (see Note 4 for a description
of the amendments to such notes).  Moreover, as a condition to the
additional Senior Debt loans made by Northbrook and its affiliates
commencing in 1999, the Company agreed to make all of the remaining
unencumbered real and personal property assets of the Company security for
all of the Senior Debt held by Northbrook and its affiliates.  In October
2001, an additional $0.2 million was funded.  All such Senior Debt, which
as of December 31, 2001 had an outstanding balance of principal and accrued
interest of approximately $186.1 million, is senior in priority to the
COLA's and is guaranteed by each of the Registrants except Waikele Golf
Club, Inc.  Prepayment of net property sale proceeds remaining after
providing reserves for anticipated cash needs for the twelve months
following the property sales may be required under the terms of the Senior
Debt loans.  Additional interest may be payable on such Senior Debt upon
its maturity based upon fair market value, if any, of the Company's equity
at that time.

     During the year ended December 31, 2001, the Company made principal
and interest payments on Amounts Due Affiliates - Senior debt financing
aggregating $22.7 million which includes prepayments required from net
property sale proceeds discussed above.

     The Waikele Golf Club had experienced a significant drop in play from
eastbound (primarily, Japanese) tour groups, which depressed rounds played,
average rate and, as a result, net operating income.  In addition,
competition from other, both new and existing golf courses on Oahu, and
continuing softness in the Japanese tour group market thwarted the
Company's efforts to market the golf course in an effort to return it to
its previous level of profitability.  The Company had refinanced the
Waikele Golf Club in 1997 with a loan facility with the Bank of Hawaii (as
agent for itself and other lenders) in the original principal amount of $25
million.  This loan facility had a maturity date of February 2007, an
interest rate of LIBOR plus 2% until the fifth anniversary and LIBOR plus
2.25% thereafter, principal amortization based on a 30-year amortization
period, was secured by substantially all of the assets of Waikele Golf
Club, Inc., was guaranteed by AHI and was "Senior Indebtedness" (as defined


<PAGE>


in the Indenture).  At that level of indebtedness, it was not anticipated
that the cash flow of the golf course could continue to service the debt.
In an effort to renegotiate the loan, the Company commenced discussions
with the lender during the third quarter of 2001.  As a result of such
negotiations, the lenders agreed to sell the loan to the Company, at a
substantial discount, for a purchase price of $13 million and release AHI
from its guarantee obligation.  The purchase price approximated the fair
market value of the golf courses at the time.  The loan purchase agreement
also gave the Company the option to simply pay off the loan at the
discounted amount.  Though the Company had sufficient cash to close the
sale, it was necessary for it to recover such amount promptly in order to
replenish its cash balances to pay its other obligations.  Therefore, the
Company entered into a sale agreement with a newly formed subsidiary of
Northbrook, whereby such subsidiary agreed to purchase the golf course from
the Company for $13 million.  Such transactions closed in December 2001, at
which time the Company paid off the Bank of Hawaii loan for $13 million
immediately prior to the purchase of the property by such subsidiary.  The
outstanding balance on the Bank of Hawaii loan on the closing date was
approximately $23.8 million.

     In recent years, the Company has funded its significant cash
requirements primarily through Senior Debt borrowings from Northbrook and
its affiliates and from revenues generated by the development and sale of
its properties. Significant short-term cash requirements relate to the
funding of agricultural deficits including shut down costs related to the
Lihue and Kekaha sugar plantations, interest expenses and overhead
expenses.  At December 31, 2001, the Company had unrestricted cash and cash
equivalents of approximately $10 million.

     Though the Company continues to operate in the ordinary course of
business, the filing of the Reorganization Case in February 2002 means that
the debt and equity structures of the Debtors in such case will either be
reorganized pursuant to a plan approved by the Bankruptcy Court or the
Debtors will be liquidated.  It is further likely that if a plan is not
approved, the holders of the Senior Debt will attempt to foreclose on their
security.  In the event of a liquidation, the proceeds of such liquidation
will not be sufficient to satisfy the Debtors' existing obligations, and
may result in no recovery for the Company's unsecured creditors with claims
as of the filing date, including, without limitation the holders of COLAs.
Reference is made to the discussion of the Reorganization Case included
below and to the Debtors' Plan and disclosure statements when they are
filed with the Bankruptcy Court, which is anticipated to occur during the
second quarter of 2002.

     The Company's remaining land holdings on Maui are its primary sources
of future land sale revenues.  However, due to current market conditions,
the difficulty in obtaining land use approvals and the high development
costs of required infrastructure, the Company does not believe that it will
be able to generate significant amounts of cash in the short-term from the
development of these lands. As a result, the Company intends to continue to
market certain parcels to generate cash to implement its longer term
Kaanapali 2020 development plans, if the Plan is approved by the Bankruptcy
Court.

     Management is exploring the possible sale of parcels on Maui and Oahu
with prospects that the Company has identified.  From time to time certain
of the Company's lands are under contract for sale.  However, the contracts
typically have due diligence investigation periods which allow the
prospective purchasers to terminate the agreements.  There can be no
assurance that any signed contracts for sale will in fact close under the
original terms and conditions or any other terms or that the Company will
be successful in selling the land at an acceptable price.



<PAGE>


     During 2001, the Company generated approximately $44 million from the
sales of approximately 19,000 acres on Kauai for $28.5 million, 5,540 acres
on Maui for $15.3 million and certain other parcels which aggregate $.2
million.

     During 2000, the Company generated $31.9 million from the sale of
approximately 1,700 acres on Maui and Kauai.  These sales include $19.5
million from the sale of Lot 1 at North Beach Makai (December 2000), $7.0
million from the sales of Parcel 16 and Parcel 19/20 at Kaanapali Golf
Estates, $3.9 million from the sale of 1,600 acres of agriculture zoned
land on Maui and $1.5 million from various other land sales.

     The Company implemented certain cost savings measures and deferred
certain development costs and capital expenditures for longer-term projects
during the past few years.  Nevertheless, the Company's Property segment
expended approximately $3.5 million in project costs during 2001 and
anticipates spending approximately $5.5 million in project costs during
2002.  As of December 31, 2001, contractual commitments related to project
costs totaled approximately $3.8 million.  However, the Company also had
previously made a number of commitments to fund certain infrastructure
costs relating to the future construction of a new Lahaina/Kaanapali bypass
highway on Maui, that could require additional significant expenditures in
the longer term should such highway be built (see discussion of Maui
Infrastructure Costs below).

     APDC, a wholly-owned subsidiary of the Company, obtained a $10 million
loan facility from City Bank, secured by a mortgage on property under
development at the Oahu Sugar mill-site, and is "Senior Indebtedness" (as
defined in the Indenture).  The loan as extended has been paid down to a
balance of $3 million, bore interest at the bank's base rate plus 1.25% and
matured on December 1, 2000.  In January 2001, APDC reached an agreement
with the Bank for an extension until December 1, 2001 with a principal
payment of $.150 million upon execution of the agreement.  On December 1,
2001, APDC reached an agreement with the bank for an additional extension
until March 1, 2002.  APDC is continuing talks with the bank for a further
extension and renegotiation of the loan.  The extended loan bears interest
at the bank's base rate (4.75% at December 31, 2001) plus 2%.  APDC does
not have the funds necessary to pay the remaining balance of the loan
without sale of the remaining millsite land.  If such loan cannot be
further extended, it would likely result in APDC no longer having an
ownership interest in the property.

     In September 1998, the Company purchased Tobishima Pacific, Inc.'s
("TPI") 50% ownership interest in the 96-acre beachfront parcel (commonly
referred to as Kaanapali North Beach) for $12.0 million.  The Company paid
$2.4 million in cash and signed a note for $9.6 million.  The note was
secured by a mortgage on the property and was in favor of TPI and is
"Senior Indebtedness" (as defined in the Indenture).  The note was payable
in five annual installments in the principal amount of $1.9 million
beginning in September 1999.  The note bore interest of 8.5% and was
payable quarterly.  In October 2000, an affiliate of Northbrook purchased
the note for the outstanding principal and accrued interest aggregating
approximately $5.6 million.  On December 29, 2000, the note was amended to
require quarterly interest payments beginning March 31, 2001. Though the
note as so amended is a demand note, it also provided for two scheduled
principal payments of $2.7 million each in September of 2002 and 2003 (see
Note 4 for further description of such amendment) to the extent that
payment of such amounts had not earlier been demanded by the holder.  In
October 2001, Northbrook purchased the note from its affiliate for the
outstanding principal and accrued interest aggregating approximately $5.5
million and also demanded a principal payment of $2.3 million which was
paid by the Company in October 2001.  The note remains secured by the
Company's 50% undivided interest in the property still owned by the Company
at Kaanapali North Beach, with such entire property also mortgaged as
security for other Senior Debt.



<PAGE>


     Under a December 29, 2000, Restructuring Agreement, the Company and
certain of its subsidiaries agreed to terminate their prior tax agreement
so that the Company and its subsidiaries would be responsible for paying
their own income taxes on taxable income generated in 2001 and thereafter.
The Company and subsidiaries also agreed to make prepayments of certain
amounts on the Senior Debt notes of net property sale proceeds remaining
after providing reserves for anticipated cash needs for the 12 months
following the property sales.  As a result of property sales in 2001,
prepayments of $9.5 million were made during 2001.  The Company and
subsidiaries further restated its previous commitment to provide additional
security for the Senior Debt.  In exchange, the Senior Debt holders agreed
to release their liens on Company and subsidiary properties to effectuate
sales of properties, provided that there was no default on the Senior Debt
and provided that the sale realized fair value.  The Senior Debt holders
further agreed to modify for the Company's and the subsidiaries' benefit
the repayment provisions on some of the Senior Debt.  (See Note 4 for a
further description of the Senior Debt.)  The Senior Debtholders also
agreed to contribute to the Company's capital Senior Debt in the amount of
$15 million immediately and agreed to contribute an additional $25 million
of Senior Debt on December 31, 2006, if the new tax agreement remains in
effect at that time.  Finally, the Senior Debt holders agreed to contribute
certain other amounts to the Company to fund a significant portion of the
costs associated with the shutdown of the Lihue and Kekaha sugar
operations, as described below.

    Pursuant to the terms of the Restructuring Agreement, Northbrook agreed
that it would cause the Northbrook sponsored pension plan to provide early
retirement window benefits that reduced the Company's cash requirements
relative to the shutdown of the remaining sugar plantations on Kauai.
Approximately $5.5 million of such benefits were paid by the pension plan
in 2000, which were treated as a capital contribution to the Company by
Northbrook.  An additional $4.2 million of anticipated benefits reflected
as a liability at December 31, 2000 in the accompanying financial
statements, will be reflected as additional capital contributions when such
benefits are paid by the plan.  As of December 31, 2001, an additional $3.2
million of such benefits had been paid and therefore were added to capital
during 2001.  The remaining $1 million is reflected as a liability at
December 31, 2001 in the accompanying financial statements.  The
Restructuring Agreement also required the Company to reserve $8 million as
restricted cash for the purpose, among other things, of meeting certain
liabilities.  The balance of such restricted cash is $6.2 million at
December 31, 2001.

     Lihue Plantation on Kauai suffered a breakdown of its power-generating
turbine in February 2000.  The turbine repair costs were covered by
insurance (net of a $.5 million policy deductible) and the Company believed
that the lost profits were also covered by insurance.  Lihue Plantation has
completed the repair of the turbine and has incurred expenditures of
approximately $2.1 million in connection with the turbine repair and
certain other related expenditures.  Lihue Plantation has received $2.2
million from the insurance carriers which includes reimbursement for
repairs and business interruption claims, net of the deductible.  The claim
was settled during 2001.

2001 COMPARED TO 2000

     During 2001, cash increased $.3 million from December 31, 2000.  Net
cash provided by operating activities of $24 million and investing
activities of $12.3 million was offset by cash used in financing activities
of $36 million.



<PAGE>


     During 2001, net cash flow provided by operating activities was $24
million, as compared to $9.5 million used in 2000.  The $33.5 million
increase in cash provided by operating activities was primarily due to the
decrease in the operating loss after adjustments for noncash items or $15.4
million in 2001 compared to $34.4 million in 2000 primarily due to (i) an
increase in agriculture operating income of $.6 million compared to an
operating loss of $22.4 (before reductions in carrying value of assets), a
decrease in the operating income from golf operations of $.1 million
compared to operating income of $3.9 million in 2000 (as discussed in
Results of Operations below for Agriculture and Golf), (ii) a decrease in
restricted cash of $2.3 million in 2001 compared to an increase of $7.8
million in 2000, (iii) a decrease in inventory of $43.2 million in 2001
compared to $29.6 million in 2000 primarily the result of property sales,
and (iv) a decrease in accrued expenses of $.9 million in 2001 compared to
an increase of $4.4 million in 2000 primarily due to employment costs
related to the shutdown of sugar operations on Kauai which were accrued in
2000 and paid in 2001.

     During 2001, net cash flow provided by investing activities was $12.3
million compared to $5 million used in 2000.  The $17.3 million increase in
cash provided by investing activities is due primarily to the $15.2 million
increase in net property sales, disposals and retirements primarily due to
the sale of the assets of Waikele Golf Club, Inc. in December 2001 to an
affiliate of Northbrook for approximately $13 million.

     During 2001, net cash flow used in financing activities was $36.0
million compared to $14.2 million provided in 2000.  The $50.2 increase in
the use of cash in financing activities is due primarily to (i) the
increase in repayments of long-term debt of $13.3 million in 2001 compared
to $.3 million in 2000 as a result of the retirement of debt of Waikele
Golf Club, Inc. which resulted in an extraordinary gain of $10.7 million
before taxes and (ii) $22.5 million in net payments to affiliates for
Senior Debt in 2001, compared to $14.5 million in advances in 2000.

2000 COMPARED TO 1999

     During 2000, cash decreased $.3 million from December 31, 1999.  Net
cash used in operating activities of $9.5 million and investing activities
of $5.0 million was partially offset by cash provided by financing
activities of $14.2 million.

     During 2000, net cash flow used in operating activities was $9.5
million, as compared to $4.5 million net cash flow provided by operations
in 1999.  The $14.0 million decrease in net cash flow provided by
operations was primarily due to (i) the increase in the operating loss
after adjustments for noncash items of $34.4 million in 2000 compared to
$20.4 million in 1999 primarily due to the $10.8 million increase in
agriculture operating loss primarily the result of losses incurred related
to sugar operations, (ii) an increase of $7.8 million in restricted cash in
2000 compared to a decrease of $1.0 million in 1999, (iii) a decrease in
receivables of $.01 million compared to a decrease of $10.3 million in 1999
(1999 receivables activity discussed below) and (iv) partially offset by a
decrease in inventory balances of $29.5 million in 2000 compared to $13.9
million in 1999 primarily due to the increased volume of land sales and a
decrease in agriculture inventory primarily the result of the shutdown of
sugar operations on Kauai in 2000.

     During 2000, net cash flow used in investing activities was $5.0
million, as compared to $8.0 million provided in 1999.  The $13.0 million
increase in cash used in investing activities was primarily due to (i) a
decrease in cash provided from net property sales, disposal and retirements
of $1.1 million in 2000 compared to $12.7 million in 1999 which included
the stock sale of Kaanapali Water Company and the asset sale of Waiahole
Irrigation Company's Waiahole ditch in 1999 and (ii) an increase in other
assets of $2.6 million in 2000 primarily due to expenditures related to
future land sales compared to a decrease in other assets of $.1 million in
1999.



<PAGE>


     During 2000, net cash flow provided by financing activities was $14.2
million, as compared to $27.2 million used in 1999.  The $41.4 million
increase in cash provided from financing activities was due to (i) $40.3
million used in 1999 to redeem the Class B COLAS on June 1, 1999, (ii) $6.7
million used in 1999 to decrease long-term debt compared to $.3 million in
2000 offset by (iii) $14.5 million in cash advances from affiliates in 2000
compared to $21.2 million in 1999.

     COLA RELATED OBLIGATIONS.  As of December 31, 1998, the Company agreed
to exercise its option to redeem Class B COLAs that would be "put" to a
wholly-owned subsidiary of Northbrook for repurchase in partial
consideration for (a) the agreements by the Company's affiliates, FHT
Corporation formerly known as Fred Harvey Transportation Company ("FHT")
and AF Investors, to defer until December 31, 2001 all interest accruing
from January 1, 1998 through December 31, 2001 and relating to the
approximately $99.6 million of Senior Indebtedness of the Company then
owing to FHT and the approximately $47.7 million of Senior Indebtedness of
the Company then owing to AF Investors (see below); and (b) Northbrook's
agreeing to cause approximately $55.1 million of the Company's indebtedness
that was senior to the COLAs to be contributed to the capital of the
Company as of December 31, 1998.  As of December 31, 1998, under the terms
of the Indenture, the Company elected to offer to redeem (the "Class B COLA
Redemption Offer") all Class B COLAs from the registered holders, as of
June 1, 1999.  Pursuant to the Class B COLA Redemption Offer mailed on
March 15, 1999 to the COLA holders, and in accordance with the terms of the
Indenture, the Company was therefore obligated to purchase any and all
Class B COLAs submitted pursuant to the Class B COLA Redemption Offer at a
price of $410 per Class B COLA.  The redemption was completed on June 1,
1999.

     In connection with the foregoing deferral of interest and contribution
of capital, the Company agreed to secure the Senior Debt held by Northbrook
and its affiliates substantially all assets of the Company to the extent
such security was requested by Northbrook and its affiliates and was
permitted under any other secured debt of the Company held by third
parties.  In connection therewith, Northbrook and its affiliates have
obtained mortgages or other security interests in substantially all of the
real and personal property of the Registrants other than the golf course
properties.  The deferral of interest, together with this contribution to
capital, were made as part of the Company's effort to alleviate significant
liquidity constraints and continue to meet the Value Maintenance Ratio
requirement under the Indenture.  As discussed above, effective
December 29, 2000, the Company entered into a restructuring agreement with
the certain other parties, including the holders of the Senior Debt by
which Northbrook made additional capital contributions to the Company
totaling approximately $25 million (including approximately $10.0 million
related to employee termination costs) and agreed to contribute an
additional portion of the Senior Debt to the Company, with a balance of
principal and interest of $25 million as of such date, on December 31,
2006, so long as the new tax agreement entered into under the Restructuring
Agreement is still in force.

     The COLAs were issued in units consisting of one Class A COLA and one
Class B COLA.  As of December 31, 2001, the Company had approximately
155,271 Class A COLAs and approximately 123,504 Class B COLAs outstanding,
with a principal balance of approximately $78 million and $62 million,
respectively.  At December 31, 2001, the cumulative interest paid per
Class A COLA and Class B COLA was approximately $.265 and $.265,
respectively.



<PAGE>


     The Class B COLA Redemption Offer terminated on April 15, 1999 in
accordance with its terms and with the Indenture.  Approximately 162,559
Class B COLAs were submitted for repurchase pursuant to the Class B
Redemption Offer of which approximately 98,229 Class B COLAs were submitted
for repurchase by persons unaffiliated with the Company and which required
an aggregate cash payment by the Company of approximately $40.3 million on
June 1, 1999.  On May 25, 1999, the Company borrowed approximately $21.3
million from AF Investors to redeem a portion of the Class B COLAs pursuant
to the Class B COLA Redemption Offer.  Pursuant to the terms of the
Indenture, such amount borrowed from AF Investors is Senior Indebtedness
that matures on December 31, 2008 and bears interest at a rate per annum of
prime (4.75% at December 31, 2001) plus 1% (see deferral of interest
discussion - Note 4).  Additional interest may be payable on such Senior
Indebtedness upon its maturity based upon fair market value, if any, of the
Company's equity at that time.  AF Investors submitted approximately 64,330
of its 89,325 Class B COLAs for repurchase pursuant to the Class B
Redemption Offer and AF Investors agreed to take back Senior Debt of the
Company of approximately $26.4 million in lieu of cash.  Such Senior
Indebtedness matures on December 31, 2008 and bears interest at a rate per
annum equal to the prime rate (4.75% at December 31, 2001) plus 1% (see
deferral of interest discussion - Note 4).  Additional interest may be
payable on such Senior Indebtedness upon its maturity based upon the fair
market value, if any, of the Company's equity at that time.  Due to the
filing of the Reorganization Case, AF Investors will have a claim against
the Debtors in an aggregate amount of approximately $57.2 million.  It is
not expected that such claim will be paid in full.

     As a result of the Class B COLA repurchases, the Company retired
approximately $81.3 million face value of COLA debt and correspondingly
recognized a financial statement gain of approximately $14.6 million of
which $8.8 million was attributable to the retirement of COLA debt held by
persons unaffiliated with the Company.  Such financial statement gain was
reduced by applicable income taxes of approximately $7.2 million, the
write-off of an applicable portion of deferred financing costs and other
expenses of approximately $3.8 million increased by the reversal of
previously accrued deferred contingent base interest of approximately $7.6
million resulting in a financial statement extraordinary gain of approxi-
mately $11.3 million.  The tax payable on the gain (approximately $2.0
million) related to the Class B COLAs which were submitted for repurchase
by persons unaffiliated with the Company pursuant to the Class B COLA
Redemption Offer is not indemnified under the tax agreement with Northbrook
effective with respect to such year (see Note 1).  The COLAs still held by
AF Investors remain outstanding pursuant to the terms of the Indenture.
Except as provided in the last sentence of this paragraph, AF Investors is
entitled to the same rights and benefits of any other holder of COLAs.
Because AF Investors is an affiliate of the Company, AF Investors will not
be able to participate in determining whether the holders of the required
principal amount of debt under the Indenture have concurred in any
direction, waiver or consent under the terms of the Indenture, and they
will not be entitled to participate in any direction to the Trustee
relating to the Reorganization Case.

     Subsequent to the completion of the Class B COLA Redemption Offer, the
Company has continued to experience significant operating losses, which
have made it necessary for the Company to raise cash by selling certain
land parcels and incurring in the interim additional Senior Debt made
available by Northbrook.  Such sales have been conducted during a period
when local real estate markets were not strong and often the land sold was
not entitled.  Such factors have had a material adverse effect on the
Company's liquidity and equity value.  Even though the Restructuring
Agreement discussed above provided the Company with cash flow relief and a
reduction in the amount of Senior Debt outstanding, the holders of the
COLAs and the Company's equity holders remain subordinated to a significant
amount of indebtedness that is secured by a substantial portion of the
Company's assets.  Thus, there can be no assurance that in the event of a
liquidation of the Company in the short term, such COLA holders and equity
holders would realize proceeds from such a liquidation.  (See discussion of
Reorganization Case.)



<PAGE>


     Pursuant to the terms of the Indenture, the Company is required to
maintain a Value Maintenance Ratio (defined in the Indenture) of 1.05 to
1.00. Such ratio is equal to the relationship of the Company's Net Asset
Value to the sum of: (i) the outstanding principal amount of the COLAs,
(ii) any unpaid Base Interest that is required to be paid, and (iii) the
outstanding principal balance of any Indebtedness incurred to redeem COLAs
(the "COLA Obligation").  Net Asset Value represents the excess of the Fair
Market Value (as defined in the Indenture) of the gross assets of the
Company over the liabilities of the Company other than the COLA obligations
and certain other liabilities. The COLA Indenture requires the Company to
obtain independent appraisals of the fair market value of the gross assets
used to calculate the Value Maintenance Ratio as of December 31 in each
even-numbered calendar year.

     The Company decided to forego contracting for independent appraisals
to determine the appraised value of substantially all of its assets as of
December 31, 2000.  Not obtaining appraisals, with the resultant inability
to provide an Officers' Certificate determining the Value Maintenance
Ratio, could be an Event of Default, as defined by the Indenture.  The
Company received a Notice of Default on June 1, 2001 from the Trustee
regarding the Company's non-delivery of the appraisals and Value
Maintenance Ratio.  On October 18, 2001, the Trustee notified the Company
that it had failed to cure the Default described in the June 1, 2001 notice
and that an Event of Default exists.  The notice acknowledged that the
Company intended to propose a restructuring of the COLAs subject to
resolution of defaults under the ERS loan.  The Trustee indicated that it
expected to participate in the review and discussion of the terms of any
proposed restructuring and would be in contact with the Company regarding
due diligence relating to such review.

     During the fourth quarter of 2001, the Trustee commenced its due
diligence review and entered into discussions with the Company and the
holders of the Senior Debt.  In order to encourage such negotiations with
the view toward developing a reorganization plan that would have the
support of the Trustee, the Company agreed to pay the reasonable costs
incurred by the Trustee (primarily legal fees and the fees and expenses
incurred by the Trustee's financial advisor) for such review and
negotiations.  Such negotiations resulted in agreement between the Company
and the Trustee on a framework for a plan of reorganization (the "Plan")
and a commitment by the Trustee to support such Plan in the Reorganization
Case.  However, such Plan, when finalized and approved by the Bankruptcy
Court, must be submitted to the holders of COLAs for approval in accordance
with the Bankruptcy Code.  In addition, other impaired classes of creditors
of the Debtors will also have the right to vote on such Plan.  Therefore,
there can be no assurance that such Plan will ultimately be approved or the
ultimate terms thereof.  Failure of any plan of reorganization to be
approved by the Bankruptcy Court and the requisite classes of creditors,
such that a final order implementing such plan is not entered, would likely
result in the attempt by the holders of the Senior Debt to foreclose on
their security and the liquidation of the Company.

     The Company uses the effective interest method and as such interest on
the COLAs is accrued at the Mandatory Base Interest rate (4% per annum).
The Company has not generated a sufficient level of Net Cash Flow to incur
or pay Contingent Base Interest (interest in excess of 4%) on the COLAs
(see Note 5) from 1990 through 2001.  Due to the filing of the
Reorganization Case, the holders of COLAs will have a claim against the
Debtors aggregating approximately $142.2 million.  It is not expected that
such claim will be paid in full and there is significant likelihood that no
recovery will be had on the COLAs unless a plan of reorganization is
approved by the Bankruptcy Court that provides for such a recovery.  From
and after the filing of the Reorganization Case in February 2002, the
Company does not anticipate accruing any further interest on the COLAs.
Approximately $100.2 million of cumulative deficiency of deferred
Contingent Base Interest related to the period from August 31, 1989 (Final
Issuance Date) through December 31, 2001 has not been accrued in the
accompanying consolidated financial statements as the Company believes that


<PAGE>


it is not probable at this time that it will ultimately be paid.  The
following table is a summary of Mandatory Base Interest and deferred
Contingent Base Interest (i.e. not currently due and payable) for the years
ended December 31, 2001, 2000 and 1999 (dollars are in millions):

                                               2001      2000      1999
                                              ------    ------    ------

Mandatory Base Interest paid . . . . . . .    $  5.6       5.6       7.2
Contingent Base Interest due and paid. . .       --        --        --
Cumulative deferred Contingent Base
  Interest . . . . . . . . . . . . . . . .    $100.2      91.9      83.5

Net Cash Flow was $0 for 2001, 2000 and 1999.

     With respect to any calendar year, JMB Realty Corporation ("JMB"), an
affiliate of the Company, or its affiliates may receive a Qualified
Allowance in an amount equal to 1.5% per annum of the Fair Market Value of
the gross assets of the Company (other than cash and cash equivalents and
certain other types of assets as provided for in the Indenture) for
providing certain advisory services to the Company. The aforementioned
advisory services, which are provided pursuant to a 30-year Services
Agreement entered into between the Company and JMB in November 1988,
include making recommendations in the following areas: (i) the construction
and development of real property; (ii) land use and zoning changes; (iii)
the timing and pricing of properties to be sold; (iv) the timing, type and
amount of financing to be incurred; (v) the agricultural business; and (vi)
the uses (agricultural, residential, recreational or commercial) for the
land.  Due to the filing of the Reorganization Case, the Company does not
expect to pay JMB any Qualified Allowance but continues to receive services
from JMB under the Services Agreement.

RESULTS OF OPERATIONS

GENERAL:

     AHI and its subsidiaries report its taxes as a part of the
consolidated tax return for Northbrook.  Through December 31, 2000, AHI and
its subsidiaries had entered into a tax indemnification agreement with
Northbrook, which indemnified AHI and its subsidiaries for all past,
present and future federal and state income tax liabilities (other than
income taxes which are directly attributable to cancellation of
indebtedness income caused by the repurchase or redemption of securities as
provided for in or contemplated by the Repurchase Agreement).  In December
2000, for taxable years commencing in 2001 and thereafter as part of the
consideration provided by the Restructuring Agreement between the Company
and the holders of the Senior Debt, AHI and Northbrook terminated the tax
indemnification agreement and entered into a tax sharing agreement
effectively providing that AHI will be responsible for its federal and
state income tax liability on its separate company taxable income.

     For years prior to 2001, current and deferred taxes have been
allocated to the Company as if the Company were a separate taxpayer in
accordance with the provisions of SFAS No. 109 - Accounting for Income
Taxes. However, to the extent the tax indemnification agreement did not
require the Company to actually pay income taxes, current taxes payable or
receivable (excluding income taxes which are directly attributable to
cancellation of indebtedness income caused by the repurchase or redemption
of securities as provided for in or contemplated by the Repurchase
Agreement) have been reflected through December 31, 2000 as deemed
contributions to additional paid-in capital/member's equity (deficit) or
distributions from related earnings (deficit)/member's equity (deficit) in
the accompanying consolidated financial statements.



<PAGE>


     SENIOR DEBT.  Interest expense decreased for the year ended
December 31, 2001 as compared to the year ended December 31, 2000 due to a
decrease in the average outstanding balance due to Northbrook's
contribution of senior debt to capital in 2000, principal and interest
payments in 2001 and the decrease in the prime interest rate in 2001.
Interest expense increased for the year ended December 31, 2000 as compared
to the year ended December 31, 1999 due to an increased senior debt
financing from affiliates balance attributable to new Senior Debt fundings
and interest on deferred interest amounts.

     The following table sets forth operating results by industry segment
(see Note 12), for the years indicated (in 000's):

                                            2001      2000      1999
                                          --------  --------  --------
Agriculture Segment:
     Revenues. . . . . . . . . . . . . . .$  4,252    22,283    30,074
     Cost of sales . . . . . . . . . . . .   1,116    41,207    37,885
                                          --------   -------   -------
                                             3,136   (18,924)   (7,811)
  Operating Expenses:
     Reduction in carrying value of
       assets in agriculture
       operations. . . . . . . . . . . . .  (4,384)  (22,000)    --
     Other . . . . . . . . . . . . . . . .  (2,494)   (3,501)   (4,160)
                                          --------   -------   -------

  Operating loss . . . . . . . . . . . . .  (3,742)  (44,425)  (11,971)
                                          --------  --------  --------
Golf Segment:
     Revenues. . . . . . . . . . . . . . .   4,175    14,990    14,832
     Cost of sales . . . . . . . . . . . .   3,011     9,177     8,867
                                          --------   -------   -------
                                             1,164     5,813     5,965
     Operating expenses. . . . . . . . . .  (1,044)   (1,929)   (1,926)
                                          --------   -------   -------
     Operating income. . . . . . . . . . .     120     3,884     4,039
                                          --------   -------   -------
Property Segment:
     Revenues. . . . . . . . . . . . . . .  50,636    37,850    22,181
     Cost of sales . . . . . . . . . . . .  46,600    33,209    17,221
                                          --------   -------   -------
                                             4,036     4,641     4,960
     Operating expenses:
       Reduction to carrying value of
         investments in real estate. . . . (13,725)  (15,853)  (11,360)
       Other . . . . . . . . . . . . . . .  (2,565)   (6,076)   (5,761)
                                          --------   -------   -------
     Operating loss. . . . . . . . . . . . (12,254)  (17,288)  (12,161)
                                          --------   -------   -------
Unallocated operating expenses
     (primarily overhead). . . . . . . . .  (5,552)   (1,557)   (1,760)
                                          --------   -------   -------
Total operating loss . . . . . . . . . . .$(21,428)  (59,386)  (21,853)
                                          ========   =======   =======

     The variances in the above-noted results of operations for the
Agriculture segment, Golf segment and the Property segment are discussed in
the following sections.



<PAGE>


AGRICULTURE SEGMENT:

     The Company's Agriculture segment remains responsible for activities
related primarily to the cultivation and sale of seed corn under a contract
with a third party.  Prior to the fourth quarter 2000 shut down of the
Lihue Plantation Company, Limited ("Lihue") and Kekaha Sugar Company,
Limited ("Kekaha Sugar") plantations on Kauai, Agriculture's revenues had
been primarily derived from the Company's sale of its raw sugar. Reference
is made to the "Liquidity and Capital Resources" section of "Management's
Discussion and Analysis of Financial Condition and Results of Operations"
for a discussion of the shutdown of the Company's remaining sugar cane
operations and the shutdown of coffee farming activities in the third
quarter of 2001.  The Company continues to market coffee products on a
wholesale basis to sell existing inventories.

     As part of the Company's agriculture operations, the Company entered
into commodities futures contracts and options in raw sugar as deemed
appropriate to reduce the risk of future price fluctuations. These futures
contracts and options were accounted for as hedges and, accordingly, gains
and losses were deferred and recognized in cost of sales as part of the
production cost.  The Company closed all of its futures and options
contracts prior to the end of 2000.

2001 COMPARED TO 2000

     Agriculture revenues and cost of sales decreased in 2001 compared to
2000 primarily as a result of the shutdown of the sugar operations on Kauai
in 2000.  Results of operations for 2000 are discussed below.

     The decrease in the operating loss of $3.7 million during 2001,
compared to the operating loss of $44.4 million during 2000 is primarily
due to the above and a decrease in the reduction in carrying value of
assets in agriculture operations of $4.4 million in 2001, compared to $22
million in 2000.

2000 COMPARED TO 1999

     During 2000 and 1999, agriculture revenues were $22.3 and $30.0
million, respectively.

     Agriculture revenues decreased in 2000 as compared to 1999 due to the
decrease in tons of sugar sold of approximately 53,000, a 29% decrease over
the same period in 1999.  This decrease in tons is partially due to the
shutdown of sugar operations at Pioneer Mill, which completed its final
harvest in September 1999.  The average price per ton of sugar sold for
2000 of approximately $327 represents a 6% decrease over the average price
during 1999.  The Company harvested 9,402 and 14,579 acres during 2000 and
1999, respectively.

     Agriculture cost of sales increased in 2000 as compared to 1999
primarily due to employment related termination costs related to the
shutdown of sugar operations on Kauai in 2000.

     The increase in the operating loss of $44.4 million during 2000 as
compared to $12 million during 1999, is due primarily to a reduction in the
carrying value of assets in sugar operations of $22 million and employment
related termination costs of $10 million associated with the shutdown of
sugar operations on Kauai in 2000.  Additional factors attributed to the
increase in the operating loss is the decrease in the average price of
sugar sold and the decrease in tons of sugar sold and produced without a
commensurate decrease in expenses.



<PAGE>


GOLF SEGMENT:

     The Company's golf segment had been responsible for the management and
operation of the two Kaanapali Golf Courses in Kaanapali, Maui and the
Waikele Golf Club on Oahu (prior to its sale).  In December 2000, APIC,
which owns and operates the Kaapapali Golf Courses, issued additional
shares in connection with new capital contributions it received.  As a
consequence, the Company retains only an approximately 17% interest in
APIC, and thus, as of December 31, 2001 and 2000, has a minority interest
investment in the Kaanapali Golf Courses.  In December of 2001, the Company
sold the Waikele Golf Club to an affiliate of Northbrook.

2001 COMPARED TO 2000

     In December 2001, the Company entered into a sale agreement with a
newly formed subsidiary of Northbrook, whereby such subsidiary agreed to
purchase the golf course from the Company for $13 million.  Also in
December 2001, the Company paid off the debt secured by the Waikele Golf
Course for $13 million immediately prior to the purchase of the property by
such subsidiary.  The outstanding balance on the loan on the closing date
was approximately $23.8 million.  The Company recognized a loss on sale of
$15.1 million and an extraordinary gain from extinguishment of debt of $6.5
million net of $4.2 million of income taxes.

     During 2001, golf revenues and cost of sales were $4.2 million and $3
million, respectively, on rounds played of approximately 81,000.  Golf
operating expenses of $1 million consisted primarily of depreciation
expense.

2000 COMPARED TO 1999

     Golf revenues were $15 million during 2000 compared to $14.8 million
during 1999.  Approximately 184,000 rounds of golf were played during 2000
compared to 187,000 rounds during 1999.  Golf revenues increased slightly
during 2000 over 1999 despite the decrease in rounds played, primarily due
to an increase in the average rate per round of approximately 8%.

     Golf cost of sales were $9.2 million during 2000 compared to $8.9
million during 1999.  Golf operating expenses of $1.9 million during 2000
and 1999, consisted primarily of depreciation expense.

     Golf operating income of $3.9 million during 2000 remained relatively
unchanged from $4.0 million during 1999.

PROPERTY SEGMENT:

     The Company's Property segment is responsible for land planning and
development activities; obtaining land use, zoning and other governmental
approvals; and selling or financing developed and undeveloped land parcels.

2001 COMPARED TO 2000

     Revenues increased to $50.6 million during 2001 from $37.9 million
during 2000 primarily due to an increase in revenues from land sales of $49
million during 2001 compared to $31.9 million during 2000.  Land sales
during 2001 included $28.5 million from the sales of approximately 19,000
acres on Kauai, $14.5 million from the sale of approximately 5,500 acres on
Maui at Launiupoko, $5 million from the sale of property on Kauai, the
proceeds of which were received in a prior year and $1 million from various
other land sales.

     During 2001, property cost of sales were $46.6 million as compared to
$33.2 million during 2000.  The $13.4 million increase was primarily due to
the increase in land sales discussed above.

     Property operating expenses were $2.6 million and $6.1 million for
2001 and 2000, respectively and consisted primarily of employment costs and
other general and administrative expenses.


<PAGE>


     The Company reduced the carrying value of three land parcels and
recorded a $13.7 million impairment loss to reflect the estimated market
value of those parcels compared to a valuation reduction of $15.9 million
in 2000.

     The improved margin realized on land sales together with the decrease
in other operating expenses and the decrease in the impairment loss in 2001
as compared to 2000 resulted in a decrease in the property operating loss
of $12.3 million during 2001 compared to an operating loss of $17.3 million
during 2000.

2000 COMPARED TO 1999

     Revenues increased to $37.9 million during 2000 from $22.2 million
during 1999 primarily due to an increase in revenues from land sales of
$31.9 million during 2000 compared to $14.9 million during 1999.  Land
sales during 2000 included $19.5 million from the sale of Lot 1 at North
Beach Makai on Maui, $7.0 million from the sales of Parcel 16 and
Parcel 19/20 at Kaanapali Golf Estates, $3.9 million from the sale of 1,600
acres of agriculture zoned land on Maui and $1.5 million from various other
land sales.  Land sales during 1999 are discussed below.

     During 2000, property cost of sales were $33.2 million as compared to
$17.3 million during 1999.  The $16.0 million increase was due primarily to
the increase in land sales discussed above.

     Property operating expenses were $6.1 million and $5.8 million for
2000 and 1999, respectively, and consisted primarily of employment costs
and other general and administrative expenses.

     The Company reduced its carrying value in certain land parcels,
primarily on the island of Kauai, by $15.9 million during 2000 compared to
a valuation reduction of $11.4 million during 1999 for parcels on Oahu,
Maui and Kauai.  As a result, the Property operating loss increased to
$17.3 million during 2000 compared to $12.2 million in 1999.


INFLATION

     Due to the lack of significant fluctuations in the level of inflation
in recent years, inflation generally has not had a material effect on real
estate development.

     In the future, high rates of inflation may adversely affect real
estate development generally because of their impact on interest rates.
High interest rates not only increase the cost of borrowed funds to the
Company, but can also have a significant effect on the affordability of
permanent mortgage financing to prospective purchasers. However, high rates
of inflation may permit the Company to increase the prices that it charges
in connection with real property sales, subject to general economic
conditions affecting the real estate industry and local market factors.


<PAGE>


ITEM 7A.  QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

     The Company's future earnings, cash flows and fair values relevant to
financial instruments are dependent upon prevalent market rates.  Market
risk is the risk of loss from adverse changes in market prices and interest
rates.  The Company has managed its market risk by matching projected cash
inflows from operating properties, financing activities, and investing
activities with projected cash outflows to fund debt payments, capital
expenditures and other cash requirements.  The Company's primary risk
exposure had been to interest rate risk.  The Company does not enter into
financial instruments for trading purposes.

     The Company's long-term debt arrangements are both fixed and variable
rate.  Based upon the Company's indebtedness and interest rates at
December 31, 2001, a 1% increase in market rates would decrease future
earnings and cash flows by approximately $1.9 million.  A 1% decrease in
market rates would increase future earnings and cash flows by approximately
$1.9 million.

     Due to the filing of the Reorganization Case, the Company expects that
if a plan of reorganization is approved by the Bankruptcy Court and
implemented, its future primary market risk exposure will be from adverse
changes in the market prices of its remaining properties.



<PAGE>


ITEM 8.  FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA


                             AMFAC HAWAII, LLC

                                   INDEX


Report of Independent Auditors

Consolidated Balance Sheets, December 31, 2001 and 2000

Consolidated Statements of Operations for the years ended
  December 31, 2001, 2000 and 1999

Consolidated Statements of Member's Equity (Deficit) for
  the years ended December 31, 2001, 2000 and 1999

Consolidated Statements of Cash Flows for the years ended
  December 31, 2001, 2000 and 1999

Notes to Consolidated Financial Statements


                                                           SCHEDULE

   Valuation and Qualifying Accounts . . . . . . . .          II


Schedules not filed:

     All schedules other than the one indicated in the index have been
omitted as the required information is inapplicable or the information is
presented in the financial statements or related notes.





<PAGE>







                      REPORT OF INDEPENDENT AUDITORS


The Member
AMFAC HAWAII, LLC
(formerly Amfac/JMB Hawaii, L.L.C.)

     We have audited the accompanying consolidated balance sheets of Amfac
Hawaii, LLC as of December 31, 2001 and 2000, and the related consolidated
statements of operations, member's equity (deficit), and cash flows for
each of the three years in the period ended December 31, 2001.  Our audits
also included the financial statement schedule listed in the Index at
Item 8. These financial statements and schedule are the responsibility of
the Company's management. Our responsibility is to express an opinion on
these financial statements and schedule based on our audits.

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

     In our opinion, the consolidated financial statements referred to
above present fairly, in all material respects, the consolidated financial
position of Amfac Hawaii, LLC at December 31, 2001 and 2000, and the
consolidated results of its operations and its cash flows for each of the
three years in the period ended December 31, 2001, in conformity with
accounting principles generally accepted in the United States. Also, in our
opinion, the related financial statement schedule, when considered in
relation to the basic financial statements taken as a whole, presents
fairly in all material respects the information set forth therein.

     The accompanying consolidated financial statements have been prepared
assuming that the Company will continue as a going concern.  As discussed
in Note 1 to the consolidated financial statements, Amfac Hawaii, LLC filed
a voluntary petition for reorganization under Chapter 11 of the U.S.
Bankruptcy Code in the United States Bankruptcy Court for the Northern
District of Illinois on February 27, 2002.  This event in addition to
recurring operating losses, member's deficit of approximately $259 million
at December 31, 2001 and contingent cash expenditures (see Note 10) raise
substantial doubt about the Company's ability to continue as a going
concern.  Although the Company is currently operating its business as
debtor-in-possession under the jurisdiction of the Bankruptcy Court, the
continuation of its business as a going concern is contingent upon, among
other things, the ability to (1) formulate a plan of reorganization which
will gain approval of the creditors and confirmation by the Bankruptcy
Court and (2) achieve satisfactory levels of future earnings and/or equity.

The consolidated financial statements do not include any adjustments to
reflect the possible future effects on the recoverability and
classification of assets or the amounts and classification of liabilities
that may result from the outcome of this uncertainty.




                                                ERNST & YOUNG LLP


Honolulu, Hawaii
April 5, 2002


<PAGE>


                             AMFAC HAWAII, LLC

                        Consolidated Balance Sheets

                        December 31, 2001 and 2000

                          (Dollars in Thousands)

                                A s s e t s
                                -----------
                                                    2001        2000
                                                  --------    --------
Current assets:
  Cash and cash equivalents. . . . . . . . . . .  $  9,973       9,660
  Receivables - net. . . . . . . . . . . . . . .     2,028       2,648
  Inventories. . . . . . . . . . . . . . . . . .     5,209      47,177
  Prepaid expenses . . . . . . . . . . . . . . .       103         120
  Escrow deposits and restricted funds . . . . .     6,490       8,784
                                                  --------    --------
        Total current assets . . . . . . . . . .    23,803      68,389
                                                  --------    --------
Property, plant and equipment:
  Land and land improvements . . . . . . . . . .   103,590     153,650
  Machinery and equipment. . . . . . . . . . . .    26,514      44,251
  Construction in progress . . . . . . . . . . .     --            469
                                                  --------    --------
                                                   130,104     198,370
  Less accumulated depreciation
    and amortization . . . . . . . . . . . . . .    28,323      47,282
                                                  --------    --------
                                                   101,781     151,088

Deferred expenses. . . . . . . . . . . . . . . .     4,493       5,299
Other assets . . . . . . . . . . . . . . . . . .    23,912      27,511
                                                  --------    --------
                                                  $153,989     252,287
                                                  ========    ========

                           L i a b i l i t i e s
                           ---------------------
Current liabilities:
  Accounts payable . . . . . . . . . . . . . . .  $  1,989       5,823
  Accrued expenses . . . . . . . . . . . . . . .     9,207      13,419
  Current portion of long-term debt. . . . . . .     2,850       3,286
  Current portion of deferred income taxes . . .     --          1,626
  Amounts due to affiliates. . . . . . . . . . .    11,684      12,660
  Amounts due to affiliates - Senior Debt
    financing. . . . . . . . . . . . . . . . . .   183,378     187,095
  Certificate of Land Appreciation Notes . . . .   139,413       --
                                                  --------    --------
        Total current liabilities. . . . . . . .   348,521     223,909
                                                  --------    --------
Amounts due to affiliates - Senior Debt
  financing. . . . . . . . . . . . . . . . . . .     2,730       5,460
Accumulated postretirement benefit obligation. .    33,118      41,433
Long-term debt . . . . . . . . . . . . . . . . .     --         23,735
Other long-term liabilities. . . . . . . . . . .     9,071      15,092
Deferred income taxes. . . . . . . . . . . . . .     8,603      22,233
Certificate of Land Appreciation Notes . . . . .     --        139,413
                                                  --------    --------
        Total liabilities. . . . . . . . . . . .   402,043     471,275
                                                  --------    --------

Commitments and contingencies (notes 3, 4, 5, 6, 7, 8, 9, and 10)

Investment in unconsolidated entity,
  at equity. . . . . . . . . . . . . . . . . . .    11,168       7,628



<PAGE>


                             AMFAC HAWAII, LLC

                  Consolidated Balance Sheets - Continued



             M e m b e r ' s   E q u i t y   ( D e f i c i t )
             -------------------------------------------------

                                                    2001        2000
                                                  --------    --------

Member's equity (deficit). . . . . . . . . . . .  (259,222)   (226,616)
                                                  --------    --------

        Total member's equity (deficit). . . . .  (259,222)   (226,616)
                                                  --------    --------

                                                  $153,989     252,287
                                                  ========    ========















































                The accompanying notes are an integral part
                 of the consolidated financial statements.


<PAGE>


                             AMFAC HAWAII, LLC

                   Consolidated Statements of Operations

               Years ended December 31, 2001, 2000 and 1999

                          (Dollars in Thousands)

                                         2001       2000        1999
                                       --------   --------    --------
Revenues:
  Agriculture. . . . . . . . . . . .   $  4,252     22,283      30,074
  Property . . . . . . . . . . . . .     50,636     37,850      22,181
  Golf . . . . . . . . . . . . . . .      4,175     14,990      14,832
                                       --------   --------    --------
                                         59,063     75,123      67,087
                                       --------   --------    --------
Cost of sales:
  Agriculture. . . . . . . . . . . .      1,116     41,207      37,885
  Property . . . . . . . . . . . . .     46,600     33,209      17,221
  Golf . . . . . . . . . . . . . . .      3,011      9,177       8,867
                                       --------   --------    --------
                                         50,727     83,593      63,973
Operating expenses:
  Selling, general and
    administrative . . . . . . . . .      8,806      8,470       7,951
  Depreciation and amortization. . .      2,849      4,593       5,656
  Reduction to carrying value of
    long-lived assets. . . . . . . .     18,109     37,853      11,360
                                       --------   --------    --------
        Total costs and expenses . .     80,491    134,509      88,940
                                       --------   --------    --------
        Operating loss . . . . . . .    (21,428)   (59,386)    (21,853)
                                       --------   --------    --------
Non-operating income (expenses):
  Amortization of deferred costs . .       (701)    (1,120)     (1,029)
  Interest income. . . . . . . . . .        895         85         785
  Interest expense . . . . . . . . .    (23,943)   (35,086)    (29,089)
  Loss on investment in uncon-
    solidated subsidiary . . . . . .     (3,540)     --          --
  Loss on sale of assets of
    Waikele Golf Club, Inc.. . . . .    (15,137)     --          --
  Gain on sale of agricultural
    assets . . . . . . . . . . . . .      2,117      --          --
                                       --------   --------    --------
                                        (40,309)   (36,121)    (29,333)
                                       --------   --------    --------

    Loss before taxes and
      extraordinary item . . . . . .    (61,737)   (95,507)    (51,186)
    Income tax benefit (expense) . .     15,619     43,708      20,048
                                       --------   --------    --------

        Loss before extraordinary
          item . . . . . . . . . . .    (46,118)   (51,799)    (31,138)

    Extraordinary gain from
      extinguishment of debt
      (less applicable income
      taxes of $4,155, $0 and
      $7,203, respectively). . . . .      6,498      --         11,265
                                       --------   --------    --------

        Net loss . . . . . . . . . .   $(39,620)   (51,799)    (19,873)
                                       ========   ========    ========


                The accompanying notes are an integral part
                 of the consolidated financial statements.


<PAGE>


                             AMFAC HAWAII, LLC

           Consolidated Statements of Member's Equity (Deficit)

               Years ended December 31, 2001, 2000 and 1999

                          (Dollars in Thousands)



                                                               Total
                                                              Member's
                                                               Equity
                                                              (Deficit)
                                                              ---------

Balance, January 1, 1999, as originally reported . . . . .    $(177,811)

Adjustment for deferred income taxes (note 11) . . . . . .      (16,658)
                                                              ---------

Balance, January 1, 1999, as restated. . . . . . . . . . .     (194,469)

Net loss . . . . . . . . . . . . . . . . . . . . . . . . .      (19,873)

Capital distribution - current income taxes (note 11). . .       (7,833)
                                                              ---------

Balance, December 31, 1999 . . . . . . . . . . . . . . . .     (222,175)

Net loss . . . . . . . . . . . . . . . . . . . . . . . . .      (51,799)

Capital distribution - current income taxes (note 11). . .      (11,754)

Contribution of certain senior debt financing
  (notes 4 and 9). . . . . . . . . . . . . . . . . . . . .       15,000

Contribution of employee costs (note 9). . . . . . . . . .        5,454

Spinoff of subsidiary (note 3) . . . . . . . . . . . . . .       38,658
                                                              ---------

Balance, December 31, 2000 . . . . . . . . . . . . . . . .     (226,616)

Net loss . . . . . . . . . . . . . . . . . . . . . . . . .      (39,620)

Contribution of employee costs (note 9). . . . . . . . . .        3,222

Capital contribution - income taxes (note 11). . . . . . .        3,792
                                                              ---------

Balance, December 31, 2001 . . . . . . . . . . . . . . . .    $(259,222)
                                                              =========














                The accompanying notes are an integral part
                 of the consolidated financial statements.


<PAGE>


                             AMFAC HAWAII, LLC

                   Consolidated Statements of Cash Flows

               Years ended December 31, 2001, 2000 and 1999

                          (Dollars in Thousands)


                                         2001       2000        1999
                                       --------   --------    --------

Cash flows from operating activities:
  Net income (loss). . . . . . . . .   $(39,620)   (51,799)    (19,873)
  Items not requiring (providing)
   cash:
    Depreciation and amortiza-
      tion . . . . . . . . . . . . .      2,849      4,593       5,656
    Amortization of deferred
      costs. . . . . . . . . . . . .        701      1,120       1,029
    Equity in earnings of
      investments. . . . . . . . . .      3,540         40       --
    Income tax (benefit) expense . .    (11,464)   (43,708)    (12,845)
    Amortization of unrecognized
      actuarial gain (note 8). . . .     (6,695)    (4,738)     (1,949)
    Deferred income, net of
      additional reserves. . . . . .     (3,363)     --          --
    Loss on sale of Waikele
      Golf Club assets . . . . . . .     15,137      --          --
    Extraordinary gain from
      extinguishment of debt . . . .    (10,653)     --        (18,468)
    Reduction to carrying value
      of long-lived assets . . . . .     18,109     37,853      11,360
    Deferred interest. . . . . . . .      --         2,318         607
    Interest on advances from
      affiliates . . . . . . . . . .     16,025     19,937      14,115
  Changes in:
    Restricted cash. . . . . . . . .      2,294     (7,830)        969
    Decrease in cash related to
      consolidated subsidiary. . . .      --          (155)      --
    Receivables - net. . . . . . . .        620         10      10,343
    Inventories. . . . . . . . . . .     43,158     29,567      13,853
    Prepaid expenses . . . . . . . .         17        134         425
    Accounts payable . . . . . . . .     (2,973)      (649)        182
    Accrued expenses . . . . . . . .       (919)     4,494       2,727
    Amounts due to affiliates. . . .       (976)     1,100      (2,243)
    Other long-term liabilities. . .     (1,781)    (1,816)     (1,370)
                                       --------   --------    --------
        Net cash provided by
          (used in) operating
          activities . . . . . . . .     24,006     (9,529)      4,518
                                       --------   --------    --------
Cash flows from investing
 activities:
  Property additions . . . . . . . .       (532)    (3,010)     (3,054)
  Property sales, disposals and
    retirements - net. . . . . . . .     16,274      1,061      12,671
  Other assets . . . . . . . . . . .     (1,027)    (2,588)         59
  Other expenses related to
    sale of assets of Waikele
    Golf Club, Inc.. . . . . . . . .        (20)     --          --
  Other long-term liabilities. . . .     (2,432)      (472)     (1,670)
                                       --------   --------    --------
        Net cash provided by
          (used in) investing
          activities . . . . . . . .     12,263     (5,009)      8,006
                                       --------   --------    --------




<PAGE>


                             AMFAC HAWAII, LLC

             Consolidated Statements of Cash Flows - Continued


                                         2001       2000        1999
                                       --------   --------    --------
Cash flows from financing
 activities:
  Payment to redeem and purchase
   Certificate of Land
   Appreciation Notes (COLAs). . . .      --         --        (40,274)
Deferred expenses. . . . . . . . . .        (30)       (42)        (90)
Current portion of long-term
  debt . . . . . . . . . . . . . . .       (127)        22      (1,174)
Net amounts due to affiliates. . . .    (22,472)    14,523      21,318
Net (repayments) proceeds of
  long-term debt . . . . . . . . . .    (13,327)      (282)     (6,683)
Other costs related to extin-
  guishment of debt. . . . . . . . .      --         --           (247)
                                       --------   --------    --------
        Net cash provided by
          (used in) financing
          activities . . . . . . . .    (35,956)    14,221     (27,150)
                                       --------   --------    --------
  Net increase (decrease) in
    cash and cash equivalents. . . .        313       (317)    (14,626)
  Cash and cash equivalents,
    beginning of year. . . . . . . .      9,660      9,977      24,603
                                       --------   --------    --------
  Cash and cash equivalents,
    end of year. . . . . . . . . . .   $  9,973      9,660       9,977
                                       ========   ========    ========

Supplemental disclosure of
 cash flow information:
  Cash paid for interest (net
   of amount capitalized). . . . . .   $ 18,607     12,553      14,974
                                       ========   ========    ========
  Schedule of non-cash investing
   and financing activities:
    Transfer of property actively
     held for sale to real estate
     inventories and accrued costs
     relating to real estate sales .   $  1,910     45,003      15,824
                                       ========   ========    ========
    Activity due to spinoff of
     subsidiary:
      Reduction in current
        assets . . . . . . . . . . .   $  --          (728)      --
      Reduction in property,
        plant & equipment. . . . . .      --       (45,557)      --
      Reduction in current
        liabilities. . . . . . . . .      --         1,952       --
      Reduction in debt in
        default. . . . . . . . . . .      --        75,322       --
      Reduction in deferred tax
        liability. . . . . . . . . .      --        14,876       --
      Reduction in other assets/
        liabilities. . . . . . . . .      --           421       --
      Establishment of investment
        in unconsolidated entity,
        at equity. . . . . . . . . .      --        (7,628)      --
                                       --------   --------    --------
Net contribution to member's
  deficit. . . . . . . . . . . . . .   $            38,658       --
                                       ========   ========    ========


<PAGE>


                             AMFAC HAWAII, LLC

             Consolidated Statements of Cash Flows - Continued


                                         2001       2000        1999
                                       --------   --------    --------

  Contribution of Senior
    Debt Financing . . . . . . . . .   $            15,000       --
                                       ========   ========    ========

  Contribution of amounts due to
    affiliates related to
    employee costs . . . . . . . . .   $             5,454       --
                                       ========   ========    ========

Disposition of debt:
  Gain on extinguishment of debt . .   $ 10,653      --         18,468
  Face value of debt extinguished. .    (23,717)     --        (81,279)
  Other costs related to
    extinguishment of debt . . . . .         64      --            247
  Issuance of Senior Debt to
    affiliate. . . . . . . . . . . .      --         --         26,375
  Write-off of Contingent Base
    Interest . . . . . . . . . . . .      --         --         (7,624)
  Write-off of deferred COLA
    costs. . . . . . . . . . . . . .      --         --          3,539
                                       --------   --------    --------
        Cash paid to redeem
          and purchase COLAs
          or retire debt . . . . . .   $(13,000)     --        (40,274)
                                       ========   ========    ========

Sale of Waikele Golf Club assets:
  Loss on sale of assets . . . . . .   $(15,137)     --          --
  Net assets sold. . . . . . . . . .     28,117      --          --
  Other expenses related to sale . .         20      --          --
                                       --------   --------    --------
        Net sale proceeds. . . . . .   $ 13,000      --          --
                                       ========   ========    ========


























                The accompanying notes are an integral part
                 of the consolidated financial statements.


<PAGE>


                             AMFAC HAWAII, LLC

                Notes to Consolidated Financial Statements

                          (Dollars in Thousands)


(1)  SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

     ORGANIZATION AND BASIS OF ACCOUNTING

     Amfac Hawaii, LLC ("AHI", and collectively with the Additional
Registrants, as their respective interests may appear, the "Company") is a
Hawaii limited liability company.  AHI is wholly-owned by Northbrook
Corporation, a Delaware corporation ("Northbrook").  AHI changed its name
from Amfac/JMB Hawaii, L.L.C. in March 2001.  On February 27, 2002, AHI,
certain of the Additional Registrants and certain other subsidiaries and
affiliates (collectively, the "Debtors") of AHI filed voluntary petitions
under Chapter 11 of the United States Bankruptcy Code.  These petitions
have been consolidated for joint administration as a single case (the
"Reorganization Case") in the U.S. Bankruptcy Court for the Northern
District of Illinois.  The Debtors filed their petitions in order to enable
them to restructure their debt and convert substantial portions thereof to
equity in an attempt to successfully reorganize with a manageable balance
sheet.

     The primary business activities of the Company have been land
development and sales, golf course management and agriculture.  In
September 2000, the Company announced its plan to shut down the remaining
sugar operations which represented a substantial portion of its agriculture
segment.  The Company owns as of the date of this report approximately
5,100 acres of land located primarily on the island of Maui in the State of
Hawaii.  In addition to its owned lands, the Company leases approximately
3,100 acres of land used primarily in conjunction with its agricultural
operations.  The Company's operations are subject to significant government
regulation.

     AHI will continue until at least December 31, 2027, unless earlier
dissolved.  AHI's sole member (Northbrook) is not obligated for any debt,
obligation or liability of the Company.  However, AHI and certain
additional subsidiaries are obligated to Northbrook and its affiliates for
the repayment of substantial loans and advances made to them.

     The Company has three primary business segments.  The agriculture
segment ("Agriculture") has been responsible for the Company's remaining
agricultural activities (the Company's remaining sugar plantations were
shut down at the end of 2000 and in September 2001, the Company announced a
winding down of its coffee operations).  The real estate segment
("Property") has been responsible for development and sales activities
related to the Company's owned land, all of which is in the State of
Hawaii.  The golf segment ("Golf") is responsible for the management and
operation of the Company's golf course facilities (see note 6).

     PRINCIPLES OF CONSOLIDATION

     The consolidated financial statements include the accounts of the
Company and its wholly-owned subsidiaries. All significant intercompany
balances and transactions have been eliminated in consolidation.

     Effective December 28, 2000, a subsidiary of Northbrook made a capital
contribution in return for 83.33% of the shares of Amfac Property
Investment Corp. ("APIC").  Accordingly, the Company records its investment
in APIC on the equity method of accounting as of December 31, 2000. (See
note 3.)



<PAGE>


     STATEMENT OF CASH FLOWS

     The Company's policy is to consider amounts held with original
maturities of three months or less in U.S. government obligations,
certificates of deposit and money market funds (approximately $8,483 and
$8,550 at December 31, 2001 and 2000, respectively) as cash equivalents
that are reflected at cost, which approximates market.  In addition, escrow
deposits and restricted funds ($6,490 and $8,784 at December 31, 2001 and
2000, respectively), represent cash which was restricted primarily to fund,
among other things, certain liabilities (note 9).

     FAIR VALUE OF FINANCIAL INSTRUMENTS

     Statement of Financial Accounting Standards No. 107 ("SFAS No. 107"),
"Disclosures about Fair Value of Financial Instruments", requires entities
to disclose the SFAS No. 107 value of certain on-and off-balance sheet
financial instruments for which it is practicable to estimate. Value is
defined in SFAS No. 107 as the amount at which the instrument could be
exchanged in a current transaction between willing parties, other than in a
forced or liquidation sale. The Company believes the carrying amounts of
its financial instruments classified as current assets and liabilities
(except for Senior Debt) in its balance sheet approximate SFAS No. 107
value due to the relatively short maturity of these instruments. The
Company considers the disclosure of the SFAS 107 value of the loans secured
by the golf courses and the Senior Debt to be impracticable.  SFAS No. 107
states that quoted market prices are the best evidence of the SFAS No. 107
value of financial instruments, even for instruments traded only in thin
markets.  Due to restrictions on prepayment and redemption as specified in
the COLA Indenture, as well as the extremely thin trading volume, the
Company has been unable to determine fair value, which assessment is made
even more difficult by the filing of the Reorganization Case in February
2002.

     INVESTMENTS

     Investments in certain partnerships and joint ventures, if any, over
which the Company exercises significant influence are accounted for by the
equity method. To the extent the Company engages in such activities as
general partner, the Company is contingently liable for the obligations of
its partnership and joint venture investments.

     LAND DEVELOPMENT

     Project costs associated with the acquisition, development and
construction of real estate projects are capitalized and classified as
construction in progress. Such capitalized costs are not in excess of the
project's estimated fair value as reviewed periodically or as considered
necessary. In addition, interest is capitalized to qualifying assets during
the period that such assets are undergoing activities necessary to prepare
them for their intended use. Such capitalized interest is charged to cost
of sales as revenue from the real estate development is recognized.
Interest costs of approximately $0, $273 and $1,010 have been capitalized
for the years ended 2001, 2000 and 1999, respectively.

     Land actively held for sale and any related development costs
transferred from construction in progress are reported as inventories in
the accompanying consolidated balance sheets and are stated at the lower of
cost or fair value less costs to sell.



<PAGE>


     LONG-LIVED ASSETS

     In March 1995, the Financial Accounting Standard Board issued
Statement of Financial Accounting Standards No. 121 ("SFAS No. 121"),
Accounting for the Impairment of Long-Lived Assets and for Long-Lived
Assets to Be Disposed Of, which requires impairment losses to be recorded
on long-lived assets used in operation when indicators of impairment are
present and the undiscounted cash flows estimated to be generated by those
assets are less than the assets' carrying amount. SFAS No. 121 also
addresses the accounting for long-lived assets that are expected to be
disposed of.  Land held for sale of approximately $4,876 and $44,772 is
included in inventory in the accompanying consolidated balance sheet at
December 31, 2001 and 2000 and is carried at the lower of cost or fair
value less cost to sell.

     During the third quarter of 2001, the Company reduced the carrying
value of three land parcels and recorded a $13,725 impairment loss to
reflect the estimated market value of those parcels.  During the fourth
quarter of 2000, the Company reduced the carrying value of four land
parcels and recorded a $15,853 impairment loss to reflect the estimated
market value of those parcels.

     EFFECTIVE INTEREST

     For financial reporting purposes, the Company used the effective
interest rate method and accrued interest on the COLAs at 4% per annum
("Mandatory Base Interest") for the years ended December 31, 2001, 2000 and
1999.

     PROPERTY, PLANT AND EQUIPMENT

     Property, plant and equipment are stated at cost. Depreciation is
based on the straight-line method over the estimated economic lives of
20-40 years for land improvements and 3-18 years for machinery and
equipment, or the lease term, whichever is less. Maintenance and repairs
are charged to operations as incurred. Renewals and significant betterments
and improvements are capitalized and depreciated over their estimated
useful lives.

     During the third quarters of 2001 and 2000, the Company recognized
impairment losses of $4,384 and $22,000, respectively, on property, plant
and equipment, inventory and other assets formerly used in its agriculture
operation.  Such losses have been reflected as a reduction in carrying
value of assets in operations.

     DEFERRED EXPENSES

     Deferred expenses consist primarily of financing costs related to the
COLAs. Such costs were being amortized during the reporting period over the
term of the COLAs on a straight-line basis.

     RECOGNITION OF PROFIT FROM REAL PROPERTY SALES

     For real property sales, profit is recognized in full when the
collectibility of the sales price is reasonably assured and the earnings
process is virtually complete. When the sale does not meet the requirements
for full profit recognition, a portion of the profit is deferred until such
requirements are met.



<PAGE>


     INCOME TAXES

     The Company and its subsidiaries report their taxes as part of the
consolidated tax return of the Company's parent, Northbrook.  Through
December 31, 2000, AHI and its subsidiaries were parties to a tax
indemnification agreement  with Northbrook in which Northbrook indemnified
AHI and its subsidiaries for responsibility for all past, present and
future federal and state income tax liabilities (other than income taxes
which are directly attributable to cancellation of indebtedness income
caused by the repurchase or redemption of securities as provided for in or
contemplated by the Repurchase Agreement).  In December 2000, for taxable
years commencing in 2001 and thereafter as part of the consideration
provided by the Restructuring Agreement between the Company and the holders
of the Senior Debt, AHI and Northbrook terminated the tax indemnification
agreement and entered into a tax sharing agreement in December 2000
effectively providing that AHI will be responsible for its federal and
state income tax liability on its separate company taxable income.

     Northbrook's tax returns have been examined by the Internal Revenue
Service (the "IRS") for the periods 1992-1994 and 1995-1997, and
deficiencies were proposed by the IRS.  Northbrook and the IRS have settled
all open tax issues related to such periods, the result of which requires
no expenditures by the Company.  The Company's income tax benefit (expense)
for the years ended December 31, 2000 and December 31, 2001 includes the
effects of such settlement on its liability for deferred income taxes.  The
statutes of limitations with respect to Northbrook's tax returns for the
years 1998 through 2001 remain open.  The Company is a subsidiary of
Northbrook and accordingly is subject to tax liability exposure due to the
several nature of the liability for the payment of taxes for entities
filing consolidated tax returns.

     Current and deferred taxes have been allocated to the Company as if
the Company were a separate taxpayer in accordance with the provisions of
SFAS No. 109-Accounting for Income Taxes. However, to the extent the tax
indemnification agreement for the period through December 31, 2000 does not
require the Company to actually pay income taxes, current taxes payable or
receivable have been reflected as deemed contributions to additional
paid-in capital/member's equity (deficit) or distributions to retained
earnings (deficit)/member's equity (deficit) in the accompanying
consolidated financial statements.

     USE OF ESTIMATES

     The preparation of financial statements in conformity with accounting
principles generally accepted in the United States requires management to
make estimates and assumptions that affect the amounts reported in the
financial statements and accompanying notes. Actual results could differ
from those estimates.

     IMPACT OF RECENTLY ISSUED ACCOUNTING STANDARDS

     In October 2001, the Financial Accounting Standards Board (FASB)
issued Statement No. 144, Accounting for the Impairment or Disposal of
Long-Lived Assets (FASB Statement No. 144) which supersedes FASB Statement
No. 121, Accounting for the Impairment of Long-Lived Assets and for Long-
Lived Assets to Be Disposed Of.  FASB Statement No. 144 provides more
guidance on estimating cash flows when performing a recoverability test,
requires that a long-lived asset to be disposed of other than by sale (e.g.
abandoned) be classified as "held and used" until it is disposed of, and
establishes more restrictive criteria to classify an asset as "held for
sale".  The Company expects to adopt the FASB Statement No. 144 effective
January 1, 2002 and does not anticipate adoption will have a significant
effect on results of operations or financial position.



<PAGE>


     RECLASSIFICATIONS

     Certain amounts in the December 31, 1999 and 2000 financial statements
have been reclassified to conform to the December 31, 2001 presentation.
Such reclassifications have not affected net loss or the deficiency in
member's deficit.


(2)  ASSETS AND LIABILITIES INFORMATION
                                                    2001        2000
                                                  --------    --------
  Receivables - net:
    Trade accounts and notes
      (net of allowance) . . . . . . . . . . .    $    559         539
    Sugar and molasses . . . . . . . . . . . .       --            852
    Other. . . . . . . . . . . . . . . . . . .       1,469       1,257
                                                  --------    --------
                                                  $  2,028       2,648
                                                  ========    ========
  Accrued expenses:
    Payroll and benefits . . . . . . . . . . .    $  1,460       5,052
    Interest . . . . . . . . . . . . . . . . .       1,885       2,060
    Other. . . . . . . . . . . . . . . . . . .       5,862       6,307
                                                  --------    --------
                                                  $  9,207      13,419
                                                  ========    ========


(3)  INVESTMENTS

     Effective December 28, 2000, AF Investors, LLC ("AF Investors"), a
subsidiary of Northbrook, made a capital contribution to APIC in return for
83.33% of the shares of APIC.  Immediately prior to AF Investors' capital
contribution, APIC was a wholly-owned subsidiary of AHI.  APIC owns and
operates the Royal Kaanapali Golf Courses.  AHI's 16.7% interest in APIC is
reflected as of December 31, 2000 and 2001 as Investment in unconsolidated
entity, at equity.  APIC's principal assets include approximately $15,000
and $45,000 of property, plant and equipment at December 31, 2001 and 2000,
respectively.  APIC's principal liabilities, in addition to advances from
Northbrook discussed below, are indebtedness to the ERS of approximately
$75,000, including accrued interest, at December 31, 2001 and 2000 and
deferred income tax liability of approximately $3,000 and $15,000 at
December 31, 2001 and 2000, respectively.  The net losses related to the
golf course operations (including related interest charges) of $2,332 and
$2,577 for the years ended December 31, 2000 and 1999, respectively, are
included in the net loss in the consolidated statements of operations.  In
2001, the ownership interest in APIC's operations is reflected on the
equity method of accounting.  The accompanying 2001 consolidated statement
of operations reflects a net after-tax loss of $3,548 representing the
Company's share of the net losses related to the golf course operations
(including related interest charges) and the impairment loss recorded by
APIC in the fourth quarter of 2001 to adjust the carrying value of the golf
courses to their estimated market value.  Should the ERS subsequently
obtain title to the golf courses, APIC would record for financial reporting
purposes a  significant gain from extinguishment of indebtedness.  Such
gain would be reflected as an extraordinary item at the time of the
extinguishment of debt.  The Company recorded a non-cash contribution to
member's deficit of approximately $39,000 in 2000 to reflect the change in
accounting for the investment in APIC to the equity method.

     APIC is the primary borrower under a $66,000 loan made by the ERS in
1991.  The loan, which has a current balance of approximately $75,000, is
secured by the RKGC (and certain adjacent lands).  Substantially all of
APIC's assets consist of the property that is security for the loan.  The
loan matured in June 2001 and has not been extended, despite efforts of the
borrowers to obtain such an extension as described below.



<PAGE>


     Due to insufficient cash flow generated by the RKGC and because of
disagreements with the lender over, among other things, lender's failure
(i) to consent to a grant of required easements in order for the Company to
develop and market its adjoining properties and (ii) to release adjacent
lands that are not related to the golf course operations from the mortgage,
as required under the loan documents, the Company did not pay the required
interest payments due in 2000 on the loan secured by these golf courses.
ERS then issued a default notice and instituted a foreclosure action in
August 2000.  Pursuant to an agreement between the lender and the
borrowers, the borrowers paid approximately $3,800 in September 2000 to the
ERS for a portion of the past due interest amounts and the ERS agreed to
temporarily suspend its action to realize upon its security while the
parties attempted to negotiate a definitive agreement to extend the loan
beyond its June 30, 2001 maturity date.  Efforts of the borrowers to
negotiate such an agreement broke down in December 2001, only after
Northbrook (an affiliate of APIC that had no obligations under the loan)
had funded certain minimum interest payments (together with the ERS' legal
fees and other related costs).  In January 2002, ERS recommenced its
foreclosure action, which the borrowers are contesting.  The borrowers have
also brought counterclaims against ERS relative to the lender's defaults
described above, which defaults have caused the Company substantial damages
relating to its efforts to sell either the unrelated parcels that the ERS
refused to release from the mortgage or other land parcels that required
easements and other rights to which the ERS was required to consent.

     The borrowers' counterclaims against the ERS in such litigation
assert, among other things, that because of the refusal of the ERS to
perform in accordance with the loan documents and grant the required
consents and releases, dating back to the inception of the loan, the
Company suffered damages over time relating to various development projects
and sale transactions that the Company consummated or attempted to
consummate since 1991.  Also alleged is that these refusals and the
interference of the ERS with the Company's legitimate development efforts
was intended by ERS to give the ERS leverage over the Company's development
and land sale activities to the benefit of ERS, not to protect the ERS'
bargained for security for its loan on the RKGC.  Some projects were
substantially delayed by the ERS' defaults and significant land sales were
either substantially delayed or failed altogether.  Income from sales was
also adversely affected in addition to the expenses of development caused
by the ERS' delays and refusals.  In addition, the Company suffered
significant damages relative to the costs of attorneys and other
professionals that the Company was forced to pay (including those of ERS'
attorneys and professionals) in its failed attempt to obtain the consents
and releases.  Failure to obtain the necessary easements promised by ERS
could subject the Company to damages claims from landowners on parcels
previously sold by the Company and, particularly, could significantly
negatively impact the value and marketability of its remaining land parcels
in Kaanapali Golf Estates, which requires such easements for access and to
ensure that the parcel enjoys necessary water and drainage rights.  As a
consequence of the ERS' actions, the borrowers' counterclaims allege, among
other things, that the ERS breached its duties under the contract, breached
the ERS' implied covenant of good faith and fair dealing, fraudulently
induced the borrowers to enter into the loan, acted in a fraudulent manner
respecting its fiduciary relationship with the borrowers and/or acted in
bad faith.

     If the borrowers do not achieve an extension of the loan through
settlement discussions with the ERS, and the ERS is permitted to continue
its foreclosure action, it is likely that the ERS will take title to the
RKGC and APIC will have no further interest therein.  There is also a
substantial likelihood that any such settlement will nevertheless result in
a transfer of title of the RKGC to the ERS on terms acceptable to the
borrowers.  There can be no assurance as to the outcome of such litigation
or any settlement negotiations.


<PAGE>


(4)  AMOUNTS DUE AFFILIATES - SENIOR DEBT FINANCING

     Amounts due to affiliates - Senior Debt financing consisted of the
following at December 31, 2001 and 2000:

                                                    2001        2000
                                                  --------     -------
Prime plus 2% promissory note; payable to
  Northbrook (as successor in interest
  to FHT); payable quarterly on
  the 15th day of February, May, August
  and November; interest deferred until
  December 31, 2006; outstanding principal
  and interest balance due February 17,
  2007 (see (a)) . . . . . . . . . . . . . . . .  $ 27,319      25,016

Prime plus 2% promissory note; payable to
  FHT; payable quarterly on the 15th
  day of February, May, August and November;
  interest deferred until December 31, 2002
  when one-third is due and payable with the
  remaining deferred interest is payable 50%
  on December 31, 2003 and 50% on December 31,
  2004; outstanding principal and interest
  balance due February 17, 2007 subject,
  under certain conditions, to earlier payment
  from proceeds of land sales (see (a)). . . . .    98,700      96,019

Prime plus 1% promissory note; payable to
  AF Investors; payable quarterly on the 15th
  day of February, May, August and November;
  interest deferred until December 31, 2003;
  deferred interest payable 50% on
  December 31, 2003 and 50% on December 31,
  2004; outstanding principal and interest
  balance due December 31, 2008 (as amended
  December 29, 2000) subject, under certain
  conditions, to earlier payment from proceeds
  of land sales (see (b)). . . . . . . . . . . .    31,341      30,792

Prime plus 1% promissory note; payable to
  AF Investors; payable quarterly on the 15th
  day of February, May, August and November;
  interest deferred until December 31, 2003;
  deferred interest payable 50% on December 31,
  2003 and 50% on December 31, 2004; outstand-
  ing principal and interest balance due
  December 31, 2008 (as amended December 29,
  2000) subject, under certain conditions,
  to earlier payment from proceeds of land
  sales (see (b)). . . . . . . . . . . . . . . .    25,367      24,922

Prime plus 1% promissory note; payable to
  Northbrook; payable quarterly on the last
  day of February, May, August and November;
  outstanding principal and interest balance
  due upon demand subject, under certain
  conditions, to earlier payment from proceeds
  of land sales (as amended December 29,
  2000) (see (c)). . . . . . . . . . . . . . . .       221       5,720



<PAGE>


                                                    2001        2000
                                                   -------     -------

Prime plus 1% promissory note; payable to
  Northbrook; payable quarterly on the last
  day of February, May, August and November;
  outstanding principal and interest balance
  due on demand but not earlier than
  February 28, 2001 subject, under certain
  conditions, to earlier payment from
  proceeds of land sales (as amended
  December 29, 2000) (see (c)) . . . . . . . . .     --          4,386

8.5% promissory note: payable
  to Northbrook (purchased by Northbrook
  from NB Holdings - VI, Inc. in October
  2001); interest only payable quarterly
  beginning March 31, 2001; payable on demand,
  but if no demand previously given, then
  principal payments of $2,730 due September
  2002 and 2003 and any outstanding principal
  and interest due September 2003 (as amended
  December 29, 2000) (see (d)) . . . . . . . . .     3,160       5,700
                                                  --------    --------
    Total Senior Debt. . . . . . . . . . . . . .   186,108     192,555

    Less current portion of Senior Debt. . . . .   183,378     187,095
                                                  --------    --------
    Total long-term Senior Debt. . . . . . . . .  $  2,730       5,460
                                                  ========    ========

     AHI has issued certain Certificate of Land Appreciation Notes due 2008
Class A (the "Class A COLAs") and Certificate of Land Appreciation Notes
Class B (the "Class B COLAs", and, collectively with the Class A COLAs, the
"COLAs") pursuant to an Indenture dated March 14, 1989 (the "Indenture")
(see note 5).  Under the Indenture, the Company is entitled to borrow
certain amounts from affiliates and third parties that qualify as "Senior
Indebtedness" under the Indenture and are senior in priority to the
repayment of the COLAs.  Such "Senior Indebtedness" that is due and owing
to Northbrook and its affiliates from time to time is referred to in these
notes as the "Senior Debt".  Commencing in August 1989 and from time to
time thereafter, Northbrook (or its predecessor in interest, Amfac, Inc.),
and certain of its affiliates, have made Senior Debt advances to the
Company.

     (a)  In February 1997, the then outstanding balance of the Senior
Debt, was consolidated under a single $104,759 ten year promissory note,
payable to Northbrook.  In addition, in February 1997, the Company borrowed
additional amounts from Northbrook's affiliate FHT Corporation ("FHT")
under a $30,000 revolving credit note.  In 1998, the $104,759 note was
replaced by two nine-year notes: (i) a $99,595 note, and (ii) a $15,000
note (with an initial balance of $7,920).  The $99,595 note was transferred
by Northbrook to FHT in 1998, and later in 1998, FHT sold the $30,000 note
to Northbrook.  These notes were payable interest only until maturity, had
a maturity date of February 17, 2007 and accrued interest at the prime rate
plus 2%.



<PAGE>


     As of December 31, 1998, AHI agreed to exercise its option to redeem
Class B COLAs that would be "put" to AMFAC/JMB Finance, Inc. ("AJF") for
repurchase in partial consideration for (a) the agreement by Fred Harvey to
defer until December 31, 2001 all interest accruing from January 1, 1998
through December 31, 2001 relating to the $99,595 note discussed above;
(b) the agreement of AF Investors, another affiliate of Northbrook, to
accept Senior Debt in lieu of cash for those COLAs it held that it intended
to put and to defer interest accruing on such Senior Debt and any other
Senior Debt it may thereafter hold relative to the put of the COLAs in the
same manner as the Fred Harvey Senior Debt (see below); and (c) Northbrook
agreeing to cause approximately $55,148 of the Senior Debt that it held to
be contributed to the capital of the Company (including the $15,000 note
and $30,000 note, identified above, together with accrued interest
thereon).  In connection with the foregoing deferral of interest and
contribution of capital, the Company agreed to provide  Northbrook and its
affiliates with security for the Senior Debt held by them.  Such security
consists of mortgages on real property owned by the Company, pledges of
stock of AHI's direct and indirect subsidiaries, and security interests on
such other unencumbered assets of the Company and its subsidiaries as
Northbrook and its affiliates holding such Senior Debt may request.  As of
the date of this report, Northbrook and its affiliates hold mortgages on
substantially all of the real property of the Company except for the
existing golf course properties.  The deferral of interest, together with
this contribution to capital, were made as part of the Company's effort to
alleviate significant liquidity constraints and continue to meet the Value
Maintenance Ratio requirement under the Indenture.

     On December 29, 2000, the $99,595 note (which then had an outstanding
balance of principal and interest of $135,959) was split into two notes:
(i) a note with an outstanding balance of principal and interest as of such
date of $40,000 which was transferred to Northbrook and subsequently
Northbrook contributed $15,000 to AHI's capital leaving an outstanding
balance of principal and interest of $25,000, and (ii) a note with an
outstanding balance of principal and interest of $95,959 which remains
payable to FHT.  These notes are payable interest only until maturity, have
a maturity date of February 17, 2007, accrue interest at the prime rate
(4.75% at December 31, 2001) plus 2%.  The $25,000 note defers interest
until December 31, 2006.  The $95,959 note defers interest until
December 31, 2002 at which time one-third of such deferred interest is due,
with the remainder of previously deferred interest payable one-half on
December 31, 2003, and one-half on December 31, 2004.  Prepayment may be
required of net property sale proceeds remaining after providing reserves
for anticipated cash needs for the twelve months following the property
sales.  As a result of such sales in 2001, prepayments aggregating $6,048
were made on the $99,595 note in the third and fourth quarters of 2001.

     (b)  In connection with the "put" discussed above, on May 25, 1999,
the Company borrowed approximately $21,318 from AF Investors, to redeem a
portion of the Class B COLAs pursuant to the Class B COLA Redemption Offer
(see Note 5).  Additionally, as of May 31, 1999, AF Investors submitted
Class B COLAs pursuant to the Class B Redemption Offer and agreed to take
back senior debt in the amount of $26,375 from the Company in lieu of cash.

Pursuant to the terms of the Indenture, such amounts borrowed from AF
Investors constitute Senior Debt that matures on December 31, 2008 and
bears interest at a rate per annum of prime (4.75% at December 31, 2001)
plus 1%.  Interest on such senior Debt was deferred through December 31,
2001, as discussed above.  In December 2000, the Company and AF Investors
modified the note to, among other things, defer interest through
December 31, 2003, with one-half of such deferred interest payable on such
date and the remainder payable on December 31, 2004.  Prepayment may be
required of net property sale proceeds remaining after providing reserves
for anticipated cash needs for the twelve months following the property
sales.  As a result of the property sales in 2001, prepayments aggregating
$3,487 were made on the notes in the third and fourth quarters of 2001.
Under the terms of the note, additional interest may be payable on such
Senior Debt upon its maturity based upon fair market value, if any, of the
Company's equity at that time.



<PAGE>


     (c)  In 2000, the Company borrowed approximately $5,576 from
Northbrook for purposes of satisfying the Mandatory Base Interest payment
related to the COLAs due in 2000.  During 2000, the Company borrowed an
additional $4,300 to fund certain capitalizable property development and
agriculture disbursements.  Such Senior Debt was originally scheduled to
mature on December 31, 2000, but its maturity date was extended (in
September 2000) to not earlier than February 28, 2001.  It bears interest
at a rate per annum equal to prime (4.75% at December 31, 2001) plus 1%, is
guaranteed by the Company and is also to be secured by assets of the
Company.  The notes evidencing such borrowings were amended in certain
respects effective December 29, 2000 to, among other things, make them
demand notes.  Prepayment may be required of net property sale proceeds
remaining after providing reserves for anticipated cash needs for the
twelve months following the property sales.  Such notes were paid down to
zero by the Company in January 2001, but remain available to fund further
advances for such purposes at Northbrook's election.  During 2001, an
additional $217 was advanced by Northbrook.

     (d)  In September 1998, the Company purchased Tobishima Pacific,
Inc.'s ("TPI") 50% ownership interest in the 96-acre beachfront parcel
(commonly referred to as Kaanapali North Beach) for $12,000.  The Company
paid $2,400 in cash and signed a note for $9,600.  The note is secured by a
mortgage on the property and was in favor of TPI and is "Senior Indebted-
ness" (as defined in the Indenture).  The note was payable in five annual
installments in the principal amount of $1,920 beginning in September 1999.

The note bore interest of 8.5% and was payable quarterly.  In January 1999,
the Company paid TPI approximately $2,220 on its note to release Lot #1 for
the Kaanapali Ocean Resort and the new 10-acre public recreation area at
North Beach and an additional $1,920 in September 1999 as required under
the terms of the note.  In October 2000, an affiliate of Northbrook
purchased the note for the outstanding principal and accrued interest
aggregating approximately $5,585.  On December 29, 2000, the note was
amended to require quarterly interest payments beginning March 31, 2001
with principal payable on demand; provided, that if no demand is previously
made, the amendment contains two scheduled principal payments of $2,730
each in September of 2002 and 2003.  In October 2001, Northbrook purchased
the note from its affiliate for the outstanding principal and accrued
interest aggregating approximately $5,500 and also demanded a principal
payment of $2,300 which was paid by the Company in October 2001.  The note
remains secured by the Company's 50% undivided interest in the property
still owned by the Company at Kaanapali North Beach, with such entire
property also mortgaged as security for the other Senior Debt.

     The total amount due Northbrook and its subsidiaries for Senior Debt
financing as of December 31, 2001 was $186,108 which includes accrued and
deferred interest to affiliates on Senior Debt of approximately $46,080.
Under the terms of the Indenture, the amounts borrowed from Northbrook or
its affiliates are "Senior Indebtedness" and are thus senior in priority to
the COLAs.

     At current interest rates, approximately $46,077 of such deferred
interest relating to all Senior Debt existing prior to the modification
would have become due and payable on December 31, 2001, but was deferred
beyond such date under the Restructuring Agreement and the replacement
notes issued in connection therewith.  Even though it was hoped that the
agreements by Northbrook and its affiliates to further defer interest under
the Senior Debt would assist the Company in the completion of potential
future development activities, it became apparent that additional debt
relief is needed in order for the Company to have the liquidity anticipated
to be necessary to pursue its business plan.  Thus, the Debtors filed the
Reorganization Case in February 2002.  (See discussion of Reorganization
Case).  As a consequence, all Senior Debt and COLAs are now in default.



<PAGE>


     The Company had previously received a notice from each of the holders
of the Senior Debt notifying the Company that all Senior Debt is currently
in default due to the existence of other defaults or circumstances that
constitute events of default under the Senior Debt, including, without
limitation (i) the failure of the Company to make quarterly interest
payments on the loan from the ERS related to their $66,000 loan secured by
the Royal Kaanapali Golf Courses; and (ii) the entry of, and failure of the
Company to satisfy or otherwise stay, the judgment rendered against the
Company in Oahu Sugar Company, Limited v. Walter Arakaki and Steve Swift
(see note 10).  Such holders notified the Company that they reserved all
rights and were assessing their options respecting the Senior Debt.
Pursuant to the restructuring agreement entered into on December 29, 2000,
between the Company and certain other parties including the holders of the
Senior Debt, such holders agreed that they would not exercise any remedies
respecting the defaults expressed in such notices unless and until (a) the
ERS obtains a judgment against, or attempts to exercise any remedies
against, or against the asset of the Company relative to the ERS loan (and
in the case of the legal proceedings against Walter Arakaki and Steve Swift
identified above, such remedies shall be exercised only to the extent
necessary for such holders to protect their superior rights under the
Senior Debt), or (b) any other creditor of the Company obtains a judgment
against, or attempt to exercise any remedies against the assets of the
Company.  As other defaults under the Senior Debt now exist, including but
not limited to the filing of the Reorganization Case, the foregoing
agreement of the holders of the Senior Debt has little or no continuing
importance.

(5)  CERTIFICATE OF LAND APPRECIATION NOTES

     The COLAs are unsecured debt obligations of the Company, and are
subordinated in priority to all "Senior Indebtedness" (as defined in the
Indenture) including, but not limited to, the Senior Debt. Interest on the
COLAs is payable semi-annually on February 28 and August 31 of each year.
As of December 31, 2001, the cumulative interest paid per Class A and
Class B COLA was approximately $.265 and $.265, respectively.  The COLAs
were scheduled to mature on December 31, 2008, and bear interest after the
Final Issuance Date (August 31, 1989) at a rate of 10% per annum ("Base
Interest") of the outstanding principal balance of the COLAs on a
cumulative, non-compounded basis, of which 6% per annum is contingent
("Contingent Base Interest").  The Company has not generated a sufficient
level of Net Cash Flow to incur or pay Contingent Base Interest (interest
in excess of 4%) on the COLAs from 1990 through 2001.  Due to the filing of
the Reorganization Case, the holders of COLAs will have a claim against the
Debtors aggregating approximately $142,200.  It is not expected that such
claim will be paid in full and there is significant likelihood that no
recovery will be had on the COLAs unless a plan of reorganization is
approved by the Bankruptcy Court that provides for such a recovery.  From
and after the filing of the Reorganization Case in February 2002, the
Company does not anticipate accruing any further interest on the COLAs.
Approximately $100,221 of cumulative deficiency of deferred Contingent Base
Interest related to the period from August 31, 1989 (Final Issuance Date)
through December 31, 2001 has not been accrued in the accompanying
consolidated financial statements as the Company believes that it is not
probable at this time that it will ultimately be paid. The following table
is a summary of Mandatory Base Interest and deferred Contingent Base
Interest (i.e. not currently due and payable) for the years ended
December 31, 2001, 2000 and 1999 (dollars are in thousands):

                                             2001      2000      1999
                                           --------   -------   -------

Mandatory Base Interest paid . . . . . .   $  5,576     5,576     7,202
Contingent Base Interest due and paid. .   $  --        --         --
Cumulative deferred Contingent Base
  Interest . . . . . . . . . . . . . . .   $100,221    91,857    83,493

Net Cash Flow was $0 for 2001, 2000 and 1999.


<PAGE>


     Pursuant to the terms of the Indenture, the Company is required to
maintain a Value Maintenance Ratio (defined in the Indenture) of 1.05 to
1.00. Such ratio is equal to the relationship of the Company's Net Asset
Value to the sum of: (i) the outstanding principal amount of the COLAs,
(ii) any unpaid Base Interest that is required to be paid, and (iii) the
outstanding principal balance of any Indebtedness incurred to redeem COLAs
(the "COLA Obligation").  Net Asset Value represents the excess of the Fair
Market Value (as defined in the Indenture) of the gross assets of the
Company over the liabilities of the Company other than the COLA obligations
and certain other liabilities. The COLA Indenture requires the Company to
obtain independent appraisals of the fair market value of the gross assets
used to calculate the Value Maintenance Ratio as of December 31 in each
even-numbered calendar year.

     The Company decided to forego contracting for independent appraisals
to determine the appraised value of substantially all of its assets as of
December 31, 2000.  Not obtaining appraisals, with the resultant inability
to provide an Officers' Certificate determining the Value Maintenance
Ratio, could become an event of default, as defined by the Indenture.  The
Company received a Notice of Default on June 1, 2001 from the Trustee
regarding the Company's non-delivery of the appraisals and Value
Maintenance Ratio.  On October 18, 2001, the Trustee notified the Company
that it had failed to cure the Default described in the June 1, 2001 notice
and that an Event of Default exists.  The notice acknowledged that the
Company intended to propose a restructuring of the COLAs subject to
resolution of defaults under the ERS loan.  The Trustee indicated that it
expected to participate in the review and discussion of the terms of any
proposed restructuring and has been in contact with the Company regarding
due diligence relating to such review.

     During the fourth quarter of 2001, the Trustee commenced its due
diligence review and entered into discussions with the Company and the
holders of the Senior Debt.  In order to encourage such negotiations with
the view toward developing a reorganization plan that would have the
support of the Trustee, the Company agreed to pay the reasonable costs
incurred by the Trustee (primarily legal fees and the fees and expenses
incurred by the Trustee's financial advisor) for such review and
negotiations.  Such negotiations resulted in agreement between the Company
and the Trustee on a framework for a plan of reorganization (the "Plan")
and a commitment by the Trustee to support such Plan in the Reorganization
Case.  However, such Plan, when finalized and approved by the Bankruptcy
Court must be submitted to the holders of COLAs for approval in accordance
with the Bankruptcy Code.  In addition, other impaired classes of creditors
of the Debtors will also have the right to vote on such Plan.  Therefore,
there can be no assurance that such Plan will ultimately be approved or the
ultimate terms thereof.  Failure of any plan of reorganization to be
approved by the Bankruptcy Court and the requisite classes of creditors,
such that a final order implementing such plan is not entered, would likely
result in the attempt by the holders of the Senior Debt to foreclose on
their security and the liquidation of the Company.

     As a consequence of the filing, the interest payment on the COLAs that
was due on February 28, 2002 was not made.  On March 11, 2002 the Trustee
sent to the Company and COLA holders a "Notice of Chapter 11 Filing, Non-
Payment of Scheduled Interest Payment, and Negotiation of Term Sheet with
Respect to Treatment of Noteholder and Other Claims."  The notice stated,
among other things, that the Chapter 11 filing and the failure to pay
interest on the scheduled debt service date, constitute events of Default
under Section 7.01 of the Indenture.  Section 7.05 of the Indenture
provides that the Noteholders holding a majority in principal amount of
outstanding Notes may direct the Trustee as to the time, method, and place
of conducting any proceeding for any remedy available to the Trustee.  The
Noteholders' ability to direct the Trustee is subject to Sections 7.06 and
8.02 of the Indenture, which state that the Noteholders must provide the
Trustee with reasonable indemnity before the Trustee need follow the
direction of the Noteholders.  The Noteholders' ability to direct the
Trustee is also subject to the automatic stay imposed on all creditors
under Section 362 of the United States Bankruptcy Code.


<PAGE>


     As of December 31, 1998, pursuant to the Indenture, the Company
elected to exercise its right to redeem (the "Class B COLA Redemption
Offer") all Class B COLAs tendered by the registered holders pursuant to
the Repurchase Agreement, as of June 1, 1999. Pursuant to the Class B
Redemption Offer mailed on March 15, 1999 to COLA holders, and in
accordance with the terms of the Indenture, the Company was therefore
obligated to purchase any and all Class B COLAs submitted pursuant to the
Class B Redemption Offer at a price of $.410 per Class B COLA.

     The Class B COLA Redemption Offer terminated on April 15, 1999 in
accordance with its terms and with the Indenture.  Approximately 162,559
Class B COLAs were submitted for repurchase pursuant to the Class B COLA
Redemption Offer including approximately 98,229 Class B COLAs which were
submitted for repurchase by persons unaffiliated with the Company and
required an aggregate cash payment by the Company of approximately $40,274
on June 1, 1999.  On May 25, 1999, the Company borrowed approximately
$21,318 from AF Investors to redeem a portion of the Class B COLAs pursuant
to the Class B COLA Redemption Offer.  Under the terms of the Indenture,
such amount borrowed from AF Investors is Senior Indebtedness that matures
on December 31, 2008 and bears interest at a rate per annum of prime (4.75%
at December 31, 2001) plus 1% (see deferral of interest discussion in
note 4(b)).  Additional interest may be payable on such Senior Debt upon
its maturity based upon fair market value, if any, of the Company's equity
at that time.  AF Investors, an affiliate of the Company, submitted
approximately 64,330 of its 89,325 Class B COLAs for repurchase pursuant to
the Class B Redemption Offer and AF Investors agreed to take back $26,375
of Senior Debt of the Company in lieu of cash.  Such Senior Debt matures on
December 31, 2008 and bears interest at a rate per annum equal to the prime
rate (4.75% at December 31, 2001) plus 1% (see deferral of interest
discussion in note 4(b)).  Additional interest may be payable on such
Senior Debt upon its maturity based upon the fair market value, if any, of
the Company's equity at that time.  Due to the filing of the Reorganization
Case, AF Investors will have a claim against the Debtors in an aggregate
amount of approximately $57.2 million.  It is not expected that such claim
will be paid in full.

     As a result of the Class B COLA repurchases on June 1, 1999, the
Company retired approximately $81,279 face value of Class B COLA debt and
correspondingly recognized a financial statement gain of approximately
$14,630 of which $8,841 is attributable to the retirement of COLA debt held
by persons unaffiliated with the Company.  Such financial statement gain
was reduced by applicable income taxes of approximately $7,203, the write-
off of an applicable portion of deferred financing costs and other expenses
of approximately $3,786 and increased by the reversal of the previously
accrued deferred contingent base interest of approximately $7,624 resulting
in a financial statement extraordinary gain of approximately $11,265.  The
tax payable on the gain (approximately $2,009) related to the Class B COLAs
which were submitted for repurchase by persons unaffiliated with the
Company pursuant to the Class B COLA Redemption Offer is not indemnified
pursuant to the tax agreement in effect through December 31, 2000 with
Northbrook effective with respect to such year (see note 1).

     The terms of the Indenture place certain restrictions on the Company's
declaration and payment of dividends. Such restrictions generally relate to
the source, timing and amounts which may be declared and/or paid. The COLAs
also impose certain restrictions on, among other things, the creation of
additional indebtedness for certain purposes, the Company's ability to
consolidate or merge with or into other entities, and the Company's
transactions with affiliates.




<PAGE>


(6)  LONG-TERM DEBT

     In December 1996, Amfac Property Development Corp. ("APDC"), a wholly-
owned subsidiary of the Company, obtained a $10,000 loan facility from City
Bank.  The loan is secured by a mortgage on property under development at
the Oahu Sugar mill-site (the sugar plantation was closed in 1995), and is
"Senior Indebtedness" (as defined in the Indenture). The loan bore interest
at the bank's base rate plus .5% and originally was scheduled to mature on
December 1, 1998.  In November 1998, APDC sold certain mill-site property
which served as collateral for the $10,000 City Bank loan for an
approximate sales price of $7,690 in cash plus 2% of the gross sales price
of subsequent parcel sales of all or any portion of the property by the
purchaser.  The bank required $6,000 of the sales proceeds as a principal
reduction on the loan in order to release the collateral.  APDC received a
one-year extension on the $4,000 remaining balance of the loan which is
secured by another parcel at the mill-site.  The extended loan bore
interest at the bank's base rate plus 1.25% and was scheduled to mature on
December 1, 1999.  APDC reached an agreement with the bank for an
additional one year extension on $3,000 of the $4,000 loan.  APDC made a
$1,000 loan payment on December 2, 1999.  The new extended loan bore
interest at the bank's base rate plus 1.25% and matured on December 1,
2000.  In January 2001, APDC reached an agreement with the Bank for an
extension until December 1, 2001 with a principal payment of $150 upon
execution of the agreement.  On December 1, 2001, APDC reached an agreement
with the bank for an additional extension until March 1, 2002.  APDC is
continuing talks with the bank for a further extension and renegotiation of
the loan.  The extended loan bears interest at the bank's base rate of
4.75% at December 31, 2001 plus 2%.  APDC does not have the funds necessary
to pay the remaining balance of the loan without sale of the remaining mill
site land.  If such loan cannot be further extended, it would likely result
in APDC no longer having an ownership interest in the property.

     In February 1997, Waikele Golf Club, Inc. ("WGCI"), a wholly-owned
subsidiary of the Company that owned and operated the Waikele Golf Course,
refinanced the Waikele Golf Club in 1997 with a loan facility with the Bank
of Hawaii (as agent for itself and other lenders) in the original principal
amount of $25,000.  This loan facility had a maturity date of February
2007, an interest rate of LIBOR plus 2% until the fifth anniversary and
LIBOR plus 2.25% thereafter, principal amortization based on a 30-year
amortization period, was secured by substantially all of the assets of
Waikele Golf Club, Inc., was guaranteed by AHI and was "Senior
Indebtedness" (as defined in the Indenture).  At that level of
indebtedness, it was not anticipated that the cash flow of the golf course
could continue to service the debt.  In an effort to renegotiate the loan,
the Company commenced discussions with the lender during the third quarter
of 2001.  As a result of such negotiations, the lenders agreed to sell the
loan to the Company, at a substantial discount, for a purchase price of
$13,000 and released AHI from its guarantee obligation.  The purchase price
approximated the fair market value of the golf courses at the time.  The
loan purchase agreement also gave the Company the option to simply pay off
the loan at the discounted amount.  Though the Company had sufficient cash
to close the sale, it was necessary for it to recover such amount promptly
in order to replenish its cash balances to pay its other obligations.
Therefore, the Company entered into a sale agreement with a newly formed
subsidiary of Northbrook, whereby such subsidiary agreed to purchase the
golf course from the Company for $13,000 resulting in a loss of $15,137.
Such transactions closed in December 2001, at which time the Company paid
off the Bank of Hawaii loan for $13,000 immediately prior to the purchase
of the property by such subsidiary.  The outstanding balance on the Bank of
Hawaii loan on the closing date was approximately $23,800.  Accordingly, a
$10,653 extraordinary gain from extinguishment of debt was recognized.




<PAGE>


(7)  RENTAL ARRANGEMENTS

     As Lessee

     The Company has rented, as lessee, various land, facilities and
equipment under operating leases. Most land leases provided for renewal
options and minimum rentals plus contingent payments based on revenues or
profits. Included in rent expense are minimum rentals and contingent
payments for operating leases in the following amounts:

                                              2001      2000      1999
                                            -------   -------   -------
    Minimum and fixed rents. . . . . . .    $ 1,475     1,723     1,779
    Contingent payments. . . . . . . . .        559     1,163     1,323
    Property taxes, insurance
      and other charges. . . . . . . . .        669     1,182     1,061
                                            -------    ------    ------
                                            $ 2,703     4,068     4,163
                                            =======    ======    ======

Future minimum lease payments under noncancelable operating leases
aggregate approximately $538 and are due as follows: 2002, $326; 2003,
$141; 2004, $71; 2005 and thereafter, $0.  There can be no assurance that
any of the Company's leases will be renewed.  As a consequence of the
filing of the Reorganization Case, the Debtors have, during March 2002,
filed a motion to reject their sole remaining agricultural land lease on
Kauai and a lease for office space on Maui, which was granted by the
Bankruptcy Court and an order entered on April 2, 2002.


(8)  EMPLOYEE BENEFIT PLANS

     The Company participates in retirement benefit plans sponsored and
maintained by Northbrook covering employees of Northbrook and certain of
its affiliates including substantially all of the Company's employees.
These plans provide benefits based primarily on length of service and
compensation levels.

     Northbrook's policy is to fund pension costs in accordance with the
minimum funding requirements under provisions of the Employee Retirement
Income Security Act ("ERISA"). Under ERISA guidelines, amounts funded may
be more or less than the pension expense recognized for financial reporting
purposes. One of the Company's defined benefit plans, the Retirement Plan
for the Employees of Amfac, Inc. (the "Plan"), terminated effective
December 31, 1994. The settlement of the plan occurred in May 1995. The
Company replaced this plan with the "Core Retirement Award Program", a
defined contribution plan that commenced on January 1, 1995. In the new
plan, an Eligible Employee (as defined) is credited with an annual
contribution equal to 3% of the employee's qualified compensation.

     Charges for pension and Core Retirement Award costs allocated to the
Company aggregated approximately $145, $402 and $481 for the years ended
December 31, 2001, 2000 and 1999, respectively.

     In addition to providing pension benefits, the Company currently
provides certain healthcare and life insurance benefits to eligible retired
employees of some of its businesses. Where such benefits are offered,
substantially all employees may become eligible for such benefits if they
reach a specified retirement age while employed by the Company and if they
meet a certain length of service criteria. The postretirement healthcare
plan is contributory and contains cost-sharing features such as deductibles


<PAGE>


and copayments. However, these features, as they apply to bargaining unit
retirees, are subject to collective bargaining provisions of a labor
contract between the Company and the International Longshoremen's &
Warehousemen's Union. The postretirement life insurance plan is
non-contributory. The Company continues to fund benefit costs for both
plans on a pay-as-you-go basis.  Depending upon the outcome of the
Reorganization Case, the Company expects to continue funding its post-
retirement health care and life insurance obligations through the end of
2004.

     For measuring the expected postretirement benefit obligation, an 11%
annual rate of increase in the per capita claims cost was assumed through
2004. This rate was assumed to decrease to 6% in 2005 and remain at that
level thereafter. The healthcare cost trend rate assumption has a
significant effect on the amount of the obligation and periodic cost
reported. An increase and (decrease) in the assumed healthcare trend rate
by 1% in 2001 would increase and (decrease) the medical plans' accumulated
postretirement benefit obligation as of December 31, 2001 by $227 and
($198), respectively, and the aggregate of the service and interest cost
components of net periodic postretirement benefit cost for the year then
ended by $27 and ($24), respectively.

     Net periodic postretirement benefit cost (credit) for 2001, 2000 and
1999 includes the following components:

                                          2001         2000      1999
                                          Total        Total     Total
                                         -------      ------    ------
Service cost . . . . . . . . . . . .     $    34         277       287
Interest cost. . . . . . . . . . . .         887       1,698     1,744
Amortization of net (gain) loss. . .      (6,327)     (2,421)   (2,707)
Recognized curtailment (gain)
  loss . . . . . . . . . . . . . . .        (859)     (3,965)     (871)
                                         -------      ------    ------
Net periodic postretirement
 benefit cost (credit) . . . . . . .     $(6,265)     (4,411)   (1,547)
                                         =======      ======    ======

     The following table sets forth the plans' change in benefit obligation
and benefit cost as of December 31, 2001 and 2000 as follows:

                                           December 31,   December 31,
                                              2001           2000
                                           ------------   ------------
Benefit obligation at beginning of year.       $ 13,006         23,728
Service cost . . . . . . . . . . . . . .             34            277
Interest cost. . . . . . . . . . . . . .            887          1,698
Actuarial gains. . . . . . . . . . . . .            304           (616)
Employer contribution. . . . . . . . . .         (2,191)        (2,187)
Curtailment. . . . . . . . . . . . . . .         (2,381)        (4,070)
Maintenance of Effort obligation . . . .           (184)        (6,081)
Special termination benefit. . . . . . .            140            257
                                               --------       --------

Benefit obligation at end of year. . . .          9,615         13,006
Unrecognized net actuarial gain. . . . .         23,503         28,427
                                               --------       --------
Accumulated postretirement benefit cost.       $ 33,118         41,433
                                               ========       ========

     In 2000, principally due to the shutdown of the Kauai sugar
operations, a decrease in the expected future benefit obligation resulted.
The curtailment resulted in a gain for financial reporting purposes which
has been included in the accompanying consolidated statement of operations.



<PAGE>


     The amount reflected as the decrease in the Maintenance of Effort
obligation for the year ended December 31, 2000 and 2001 recognizes that
the requirement to maintain an average level of certain retiree health care
benefits expires in 2004.  Such obligations are pursuant to collectively
bargained contractual obligations of Lihue Plantation Company, Limited,
Pioneer Mill Company, Limited and Oahu Sugar Company, Limited.

     The Company currently amortizes unrecognized gains over the shorter of
ten years or the average life expectancy of the inactive participants since
almost all of the Plans' participants are inactive.  The portion of the
unrecognized net actuarial gain represented by the decrease in the
Maintenance of Effort obligation is expected to be amortized over four
years, commencing in 2001.  In addition, due to the significant total
amount of unrecognized gain at December 31, 2001 and 2000, which is
included in the financial statements as a liability, and the
disproportionate relationship between the unrecognized gain and accumulated
postretirement benefit obligation at December 31, 2001, the Company may, in
the future, change its amortization policy to accelerate the recognition of
the unrecognized gain. In considering such change, the Company would need
to determine whether significant changes in the accumulated postretirement
benefit obligation and unrecognized gain may occur in the future as a
result of changes in actuarial assumptions, experience and other factors.
Any future change to accelerate the amortization of the unrecognized gain
would have no effect on the Company's cash flows, but could have a
significant effect on its statement of operations.

     The weighted-average discount rate used in determining the accumulated
postretirement benefit obligation was 7.25% as of December 31, 2001 and
7.5% as of December 31, 2000.

(9)  TRANSACTIONS WITH AFFILIATES

     With respect to any calendar year, JMB Realty Corporation ("JMB"), an
affiliate of the Company, or its affiliates may receive a Qualified
Allowance in an amount equal to: (i) approximately $6,200 during each of
the calendar years 1989 through 1993; and (ii) thereafter, 1-1/2% per annum
of the Fair Market Value (as defined in the Indenture) of the gross assets
of the Company and its subsidiaries (other than cash and cash equivalents
and Excluded Assets (as defined in the Indenture)) for providing certain
advisory services for the Company. The aforementioned advisory services,
which are provided pursuant to a 30-year Services Agreement entered into
between the Company and JMB in November 1988, include making
recommendations in the following areas: (i) the construction and
development of real property; (ii) land use and zoning changes; (iii) the
timing and pricing of properties to be sold; (iv) the timing, type and
amount of financing to be incurred; (v) the agricultural business; and,
(vi) the uses (agricultural, residential, recreational or commercial) for
the land.  For the years 1999, 2000 and 2001, JMB has agreed that the
amount of the Qualified Allowance to be calculated shall not exceed the
lesser of the amount described above and $5,000.  As the Fair Market Value
was not determined as of December 31, 2000, no Qualified Allowance was
considered to result for 2000 and 2001.  Due to the filing of the
Reorganization Case, the Company does not expect to pay JMB any Qualified
Allowance but continues to receive services from JMB under the Services
Agreement.

     The Company, its subsidiaries and their joint ventures reimburse
Northbrook, JMB and their affiliates for direct expenses incurred on their
behalf, including salaries and salary-related expenses incurred in
connection with the management of the Company's or its subsidiaries' and
the joint ventures' operations. The total of such costs for the years ended
2001, 2000 and 1999 was approximately $1,490, $872 and $804, respectively,
(in November 2001, approximately $1,500 of such amounts due to affiliates
was paid by the Company) of which $228 was unpaid as of December 31, 2001.
In addition, as of December 31, 2001, the current portion of amounts due to


<PAGE>


affiliates includes $9,106 and $2,009 of income tax payable related to the
Class A COLA Redemption Offer and Class B COLA Redemption Offer,
respectively (see Note 5).  Also, the Company pays a non-accountable
reimbursement of approximately $30 per month to JMB or its affiliates in
respect of general overhead expense, all of which was paid as of
December 31, 2001.

     JMB Insurance Agency, Inc., an affiliate of JMB, earns insurance
brokerage commissions in connection with providing the placement of
insurance coverage for certain of the properties and operations of the
Company. Such commissions are comparable to those available to the Company
in similar dealings with unaffiliated third parties. The total of such
commissions for the years ended December 31, 2001, 2000 and 1999 was
approximately $274, $434 and $568, respectively, all of which was paid as
of December 31, 2001.

     Northbrook and its affiliates allocated certain charges for services
to the Company based upon the estimated level of services for the years
ended December 31, 2001, 2000 and 1999 of approximately $145, $615 and
$683, respectively (in November 2001, approximately $500 of such amounts
due to affiliates was paid by the Company) of which $322 was unpaid as of
December 31, 2001.  The affiliated charges for the years ended December
2001, 2000 and 1999 were offset by $6, $39 and $76, respectively, of
charges for certain expenditures paid by the Company for Northbrook.  These
services and costs are intended to reflect the Company's separate costs of
doing business and are principally related to the inclusion of the
Company's employees in the Northbrook pension plan, payment of severance
and  termination benefits and reimbursement for insurance claims paid on
behalf of the Company. All amounts described above, deferred or currently
payable, do not bear interest and are expected to be paid in future
periods.

     Reference is made to Note 4 - Amounts due Affiliates - Senior Debt
Financing.  In connection with such affiliated loans, the Company incurred
interest expense of approximately $16,024, $20,202 and $14,114, for the
years ended December 31, 2001, 2000 and 1999, respectively.

     As of December 31, 1998, the Company agreed to exercise its option to
redeem Class B COLAs that would be "put" to AJF for repurchase (as
described in Note 5 above), in partial consideration for (a) FHT's and AF
Investors' agreement to defer until December 31, 2001 all interest accruing
from January 1, 1998 through December 31, 2001 and relating to the
approximately $99,595 of Senior Indebtedness of the Company then owing to
FHT and the approximately $47,693 of Senior Indebtedness of the Company
then owing to AF Investors (as described in Note 4 above); and (b)
Northbrook agreeing to cause approximately $55,148 of the Company's
indebtedness that was senior to the COLAs to be contributed to the capital
of the Company as of December 31, 1998.  The redemption was completed on
June 1, 1999.  In connection with the foregoing deferral of interest and
contribution of capital, the Company agreed to allow the Senior Debt held
by Northbrook and its affiliates to be secured by substantially all of the
assets of the Company to the extent such security was requested by
Northbrook and its affiliates and was permitted under any other secured
debt of the Company held by third parties.  In connection therewith,
Northbrook and its affiliates have obtained mortgages or other security
interests in substantially all of the real and personal property of the
Company other than the golf course properties.  The deferral of interest,
together with this contribution to capital, were made as part of the
Company's effort to alleviate significant liquidity constraints and
continue to meet the Value Maintenance Ratio requirement under the
Indenture.


<PAGE>


     Under a December 29, 2000, Restructuring Agreement, the Company and
certain of its subsidiaries agreed to terminate their prior tax agreement
so that the Company and its subsidiaries would be responsible for paying
their own income taxes on taxable income generated in 2001 and thereafter.
The Company and subsidiaries also agreed to make prepayments of certain
amounts on the Senior Debt notes of net property sale proceeds remaining
after providing reserves for anticipated cash needs for the 12 months
following the property sales.  As a result of property sales in 2001,
prepayments aggregating $9,500 were made on the Senior Debt in 2001.  The
Company and subsidiaries further agreed to provide additional security for
the Senior Debt.  In exchange, the Senior Debt holders agreed to release
their liens on Company and subsidiary properties to effectuate sales of
properties, provided that there is no default on the Senior Debt and
provided that the sale realizes fair value.  The Senior Debt holders
further agreed to modify for the Company's and the subsidiaries' benefit
the repayment provisions on some of the Senior Debt.  (See note 4 for a
further description of the Senior Debt.)  The Senior Debt holders also
agreed to contribute to the Company's capital Senior Debt in the amount of
$15,000 immediately and agreed to contribute an additional $25,000 of
Senior Debt on December 31, 2006, if the new tax agreement remains in
effect at that time.  Finally, the Senior Debt holders agreed to contribute
certain other amounts to the Company to fund a significant portion of the
costs associated with the shutdown of the Lihue and Kekaha sugar
operations, as described below.

    Pursuant to the terms of the Restructuring Agreement, Northbrook agreed
that it would cause the Northbrook sponsored pension plan to provide early
retirement window benefits that reduced the Company's cash requirements
relative to the shutdown of the remaining sugar plantations on Kauai.
Approximately $5,545 of such benefits were paid by the pension plan in
2000, which were treated as a capital contribution to the Company by
Northbrook.  An additional $4,200 of anticipated benefits reflected as a
liability at December 31, 2000 in the accompanying financial statements, to
be reflected as additional capital contributions when such benefits are
paid by the plan.  As of December 31, 2001, an additional $3,222 of such
benefits had been paid and therefore were added to capital during 2001.
The remaining $978 is reflected as a liability at December 31, 2001 in the
accompanying financial statements.  The Restructuring Agreement also
required the Company to reserve $8,000 as restricted cash for the purpose,
among other things, of meeting certain liabilities.  The balance of such
restricted cash is $6,220 at December 31, 2001.

     At current interest rates, approximately $46,077 of deferred interest
relating to all Senior Debt existing prior to the modification would have
become due and payable on December 31, 2001, but was and is now deferred
beyond such date under the Restructuring Agreement and the replacement
notes issued in connection therewith.  Even though it was hoped that the
agreements by Northbrook and its affiliates to further defer interest under
the Senior Debt would assist the Company in the completion of potential
future development activities, it became apparent that additional debt
relief is needed in order for the Company to have the liquidity anticipated
to be necessary to pursue its business plan.  Thus, the Debtors filed the
Reorganization Case in February 2002.  (See discussion of Reorganization
Case).  As a consequence, all senior Debt and COLAs are now in default.

     The total amount due Northbrook and its subsidiary for Senior Debt
financing as of December 31, 2001 was $186,108, which includes deferred
interest to affiliates on the senior debt of approximately $46,080.  Under
the terms of the Indenture, the amounts borrowed from Northbrook and its
affiliates are "Senior Indebtedness" and are thus senior in priority to the
COLAs.



<PAGE>


(10) COMMITMENTS AND CONTINGENCIES

     The Company continues to face a severe liquidity shortage that has
ultimately resulted in the filing of the Reorganization Case in February
2002.  The Company sold a portion of its North Beach property on Maui in
the fourth quarter of 2000, a parcel on Maui near Lahaina in the first
quarter of 2001, a parcel in Hanamaulu, Kauai also in the first quarter of
2001, additional parcels in Hanamaulu, Kauai in the second quarter of 2001
and additional parcels in Hanamaulu and Lihue on Kauai in the third quarter
of 2001, which provided funds to the Company to help meet its short term
liquidity needs.  Some of such funds were used to satisfy Senior Debt
prepayments as demanded by the holders of such Senior Debt.  However, the
Company believes that, in the absence of additional land sales, additional
senior debt borrowings from Northbrook or its affiliates would have been
necessary to meet its current COLA related obligations and its short-term
and long-term liquidity needs.  As Northbrook and such affiliates are
unwilling to provide additional liquidity to the Company in the absence of
an overall restructuring of substantially all of the Company's debt, the
AHI Debtors were forced to seek relief from the Bankruptcy Court in order
to reduce their debt to manageable levels and give themselves the
opportunity to pursue their land development and sales activities in a
manner intended to maximize the value of the Company's remaining land
assets.

     On February 27, 2002, AHI and the other Debtors filed separate
petitions for voluntary relief under Chapter 11 of the U.S. Bankruptcy
Code.  The other Debtors include FHT, which is a subsidiary of Northbrook
but not a subsidiary of AHI, and the following direct and indirect
subsidiaries of AHI (together with AHI, the "AHI Debtors"), some of which
are Registrants: Amfac Land Company, Limited, Pioneer Mill Company,
Limited, The Lihue Plantation Company, Limited, Kaanapali Estate Coffee,
Inc., KDCW, Inc., Amfac Holdings Corp., Kaanapali Development Corp. and
Waikele Golf Club, Inc.  Other subsidiaries and affiliates of AHI,
including for example Oahu Sugar Company, Limited, APIC and APDC, did not
file separate voluntary petitions.

     At the time of the filing of the Reorganization Case, AHI had a total
outstanding Senior Debt obligation (principal and accrued interest) to
Northbrook and its affiliates of approximately $188,017 and its outstanding
COLA obligation (principal and accrued interest) totaled approximately
$142,185.  Under the Indenture, the Senior Debt held by Northbrook and its
affiliates is senior to the COLAs.  Moreover, as described below, the
Senior Debt is supported by mortgages and other security interests on
substantially all of the Company's real property and certain other assets.
These obligations were guaranteed by all of the Company's significant
subsidiaries, including those that are not AHI Debtors in the
Reorganization Case.

     The total debt burden evidenced by these obligations alone had proved
unmanageable and was draining the Company of cash needed to pursue its
business plan, including entitling the Company's approximately 4,000
remaining acres "Mauka" of the Kannapali Resort area.  During 2002,
additional interest payments on the COLAs are due in the aggregate amount
of approximately $5,500.  In addition, substantial amounts of deferred
interest payments under the Senior Debt were also coming due.  Because it
was evident that the Debtors would not have the cash resources to satisfy
their respective obligations, let alone to pursue the Company's business
plan, the Reorganization Case was filed in order to give the Debtors the
opportunity to restructure their debt and equity and emerge as a
reorganized group of companies.  Thus, as a consequence of the filing, the
interest payment on the COLAs that was due on February 28, 2002 was not
made.



<PAGE>


     The Debtors and the holders of Senior Debt engaged in extensive
negotiations with the Trustee during the months preceding the filing.  Such
negotiations included the Trustee hiring legal counsel and a financial
advisor to perform due diligence on the Debtors' assets, at the Company's
cost, in order to satisfy the Trustee that the Plan of Reorganization (the
"Plan") proposed by the Debtors would provide the COLA holders with a
greater recovery than they could expect in a liquidation of the Company.
Such negotiations resulted in the agreement of the Trustee and the Debtors
on the framework for a plan.  A copy of the notice that the Trustee sent to
all holders of COLAs that describe such negotiations was reported by the
Company on a Form 8-K on March 20, 2002.  The Debtors are in the process of
finalizing such documentation and intend to file their proposed Plan and
supporting disclosure statement (and other supporting documentation) with
the Bankruptcy Court during the second quarter of 2002.  It is anticipated
that such documentation will provide that the holders of COLAs (among other
classes of interested parties) will have the opportunity to vote on the
Plan.  Such documentation, if and when approved by the Bankruptcy Court,
will govern the reorganization of the Debtors, and the holders of COLAs
should refer to such documentation when available in determining whether to
vote for the Plan and the procedures therefor.

     In the meantime, the filing of the Reorganization Case has stayed all
pending litigation against the Debtors.  Though the Bankruptcy Court has
entered certain orders at the request of the Debtors that will permit them
to pay certain "pre-petition" amounts and otherwise operate at their
discretion in the ordinary course of business, the Debtors intend to
carefully review all of their options in that regard.  The Debtors continue
to operate their business after the filings in the ordinary course, subject
to the jurisdiction of the Bankruptcy Court and the requirements of the
Bankruptcy Court and the rules thereunder.

     In the third quarter of 2000, management announced the shutdown of its
remaining sugar plantations on Kauai.  The decision was made as a result of
significant losses incurred during 2000, and the expectation that such
losses would continue for the foreseeable future.  The losses resulted from
a significant drop in the domestic price of raw sugar and lower sugar
yields.  The Company completed its final harvest of sugar cane in November
2000.  As a consequence of the shutdown, the Company incurred significant
employee and other closing costs in 2000 and 2001.  The Company sold
certain of its field and mill equipment associated with the closed
facilities during 2001 and the first quarter of 2002, but due to the age
and condition of the equipment, the forced nature of the sale and
significant transaction costs, the Company did not obtain significant net
proceeds from such sales.

     In the third quarter of 2001, management announced its intention to
discontinue coffee farming activities based upon the Company's prior
financial losses (which were expected to continue for the foreseeable
future), high production costs and current economic uncertainties including
record-low commodity coffee prices.  Such events have entailed employee and
closing costs similar to, though not as substantial as, those connected
with the shutdown of the Company's sugar operations.

     The Company faces large contingent cash expenditures of (i) the cost
of the litigation and environmental matters described below and (ii) the
cost of environmental clean up relating to the land and mill sites
associated with Oahu, Kekaha, Lihue and Pioneer Mill plantations and
buildings which could be significant but are presently not determinable.
It is difficult to predict the ultimate outcome of these various
contingencies, any of which could have a material adverse effect on the
financial condition of the Company.  However, some of such matters have
been stayed by the filing of the Reorganization and others are likely to be
reduced in the event that the Plan is approved by the Bankruptcy Court.



<PAGE>


     As reflected in the Company's December 31, 2001, balance sheet,
approximately $183,378 Senior Debt owed to affiliates of the Company is
categorized as a current liability.  The classification as a current
liability results from defaults that occurred under such Senior Debt due to
actions taken by ERS to realize upon indebtedness owed to it by APIC, and
due to the adverse verdict in the Oahu Sugar V. Arakaki and Swift lawsuit
described below.  Under the Restructuring Agreement, effective as of
December 29, 2000, among the Company, certain of the Company's subsidiaries
and certain holders of Senior Debt affiliated with Northbrook, the parties
agreed that the defaults described above would continue but that the Senior
Debt holders would not exercise their remedies against the Company and its
subsidiaries based upon those defaults until either ERS obtains a judgment
against or attempts to exercise remedies against APIC or its assets or
unless necessary to protect their superior rights under the Senior Debt
against the plaintiffs in the Swift/Arakaki lawsuit.  It is anticipated
that the claims of the holders of the Senior Debt will be resolved in the
Reorganization Case as to the Debtors.  As to entities that are not Debtors
but that are liable on the Senior Debt, there can be no assurance that the
Senior Debt holders will not pursue their remedies under the Senior Debt,
either because of actions by ERS or the opponents in the Swift/Arakaki
lawsuit or because of additional defaults arising under the Senior Debt.

     During the year ended December 31, 2000, the Company borrowed
approximately $5,576 from Northbrook for the Mandatory Base Interest
payments related to the COLAs due in 2000.  During the year ended
December 31, 2000, the Company borrowed an additional $4,300 from
Northbrook to fund capitalizable property development and agriculture
disbursements.  The borrowings were repaid with interest in January 2001.
To the extent that Northbrook or its affiliates made such borrowings
available to the Company during 2000, any such borrowings were required
(i) to be "Senior Indebtedness" (as defined in the Indenture), (ii) to
accrue interest at the rate of prime plus 1%, and (iii) to have principal
and interest fully repayable by February 28, 2001 (see note 4 for a
description of the amendments to such notes).  Moreover, as a condition to
the additional Senior Debt loans made by Northbrook and its affiliates
commencing in 1999, the Company has agreed to make all of the remaining
unencumbered real and personal property assets of the Company security for
all of the Senior Debt held by Northbrook and its affiliates.  All such
Senior Debt, which as of December 31, 2001 had an outstanding balance of
principal and accrued interest of approximately $186,108, is senior in
priority to the COLA's and is guaranteed by each of AHI's significant
subsidiaries (except Waikele Golf Club, Inc. due to provisions of the third
party debt owed by that Company prior to its sale of the Waikele Golf Club
in December 2001).

     Material legal proceedings of the Company are described below.  In
proceedings where a Debtor is a defendant, such proceedings have been
stayed as to such Debtor by the filing of the Reorganization Case.
Proceedings against subsidiaries or affiliates of AHI that are not Debtors
may proceed.

     APIC is the primary borrower under a $66,000 loan made by the ERS in
1991.  The loan, which has a current balance of approximately $75,000, is
secured by the RKGC (and certain adjacent lands).  Substantially all of
APIC's assets consist of the property that is security for the loan.  The
loan matured in June 2001 and has not been extended, despite efforts of the
borrowers to obtain such an extension as described below.



<PAGE>


     Due to insufficient cash flow generated by the RKGC and because of
disagreements with the lender over, among other things, lender's failure
(i) to consent to a grant of required easements in order for the Company to
develop and market its adjoining properties and (ii) to release adjacent
lands that are not related to the golf course operations from the mortgage,
as required under the loan documents, the Company did not pay the required
interest payments due in 2000 on the loan secured by these golf courses.
ERS then issued a default notice and instituted a foreclosure action in
August 2000 (Employees' Retirement System of the State of Hawaii v.
Amfac/JMB Hawaii, L.L.C., et. al., Civil No. 00-1-2597-08, First Circuit
Court, State of Hawaii).  Pursuant to an agreement between the lender and
the borrowers, the borrowers paid approximately $3,800 in September 2000 to
the ERS for a portion of the past due interest amounts and the ERS agreed
to temporarily suspend its action to realize upon its security while the
parties attempted to negotiate a definitive agreement to extend the loan
beyond its June 30, 2001 maturity date.  Efforts of the borrowers to
negotiate such an agreement broke down in December 2001, only after
Northbrook, an affiliate of APIC that had no obligations under the loan)
had funded certain minimum interest payments (together with the ERS' legal
fees and other related costs).  In January 2002, ERS recommenced its
foreclosure action, which the borrowers are contesting.  The borrowers have
also brought counterclaims against ERS relative to the lender's defaults
described above, which defaults have caused the Company substantial damages
relating to its efforts to sell either the unrelated parcels that the ERS
refused to release from the mortgage or other land parcels that required
easements and other rights to which the ERS was required to consent.

     The borrowers' counterclaims against the ERS in such litigation
assert, among other things, that because of the refusal of the ERS to
perform in accordance with the loan documents and grant the required
consents and releases, dating back to the inception of the loan, the
Company suffered damages over time relating to various development projects
and sale transactions that the Company consummated or attempted to
consummate since 1991.  Also alleged is that these refusals and the
interference of the ERS with the Company's legitimate development efforts
was intended by ERS to give the ERS leverage over the Company's development
and land sale activities to the benefit of ERS, not to protect the ERS'
bargained for security for its loan on the RKGC.  Some projects were
substantially delayed by the ERS' defaults and significant land sales were
either substantially delayed or failed altogether.  Income from sales was
also adversely affected in addition to the expenses of development caused
by the ERS' delays and refusals.  In addition, the Company suffered
significant damages relative to the costs of attorneys and other
professionals that the Company was forced to pay (including those of ERS'
attorneys and professionals) in its failed attempt to obtain the consents
and releases.  Failure to obtain the necessary easements promised by ERS
could subject the Company to damages claims from landowners on parcels
previously sold by the Company and, particularly, could significantly
negatively impact the value and marketability of its remaining land parcel
in Kaanapali Golf Estates, which requires such easements for access and to
ensure that the parcel enjoys necessary water and drainage rights.  As a
consequence of the ERS' actions, the borrowers' counterclaims allege, among
other things, that the ERS breached its duties under the contract, breached
the ERS' implied covenant of good faith and fair dealing, fraudulently
induced the borrowers to enter into the loan, acted in a fraudulent manner
respecting its fiduciary relationship with the borrowers and/or acted in
bad faith.  The counterclaim seeks, among other thing, damages, attorney's
fees and costs, and an order directing the ERS to provide the releases and
consents required by the loan documents.  There can be no assurance that
defendants will prevail in the counterclaim or in the defense of ERS's
attempt to realize on its security.  On March 19, 2002, the court entered
an order appointing a receiver for the property that is security for the
loan, as well as for the golf course operations related thereto.



<PAGE>


     If the borrowers do not achieve an extension of the loan through
settlement discussions with the ERS, and the ERS is permitted to continue
its foreclosure action, it is likely that the ERS will take title to the
RKGC and APIC will have no further interest therein.  There is also
substantial likelihood that any such settlement will nevertheless result in
a transfer of title to the RKGC to the ERS on terms acceptable to the
borrowers.  There can be no assurance as to the outcome of such litigation
or any settlement negotiations.

     On October 31, 2001, Amfac Hawaii, LLC was named in a lawsuit entitled
Lloyd Akiona, et al. v. Amfac/JMB Hawaii, LLC and AquaSource, Inc., Civil
No. 01-1-05979, filed in the Circuit Court of the Second Circuit, State of
Hawaii.  Defendant Amfac Hawaii, LLC removed the case to federal court.  In
this action, six plaintiffs collectively seek approximately $191 in
severance payments they allege they were entitled to as a result of the
sale of the stock of Kaanapali Water Corporation to AquaSource, Inc. in
March 1999.  Plaintiffs seek damages, interest, attorneys' fees, and costs.

Defendant believes it has substantial defenses and intends to vigorously
defend itself.

     On February 1, 2002, Transcend, Inc. filed a lawsuit entitled
Transcend, Inc. v. Amfac/JMB Hawaii, Inc., et. al., Civ. No. 02-1-0287-02
in the First Circuit Court, State of Hawaii.  Plaintiff alleges that it
purchased six cane haul trucks and that defendant entities failed to make
delivery.  In this four count complaint for breach of contract, quantum
meruit, conversion and trespass, plaintiff seeks general, special, and
punitive damages.  Plaintiff includes a monetary demand for $786 in the
first count of the complaint, as well as a request for attorneys fees,
costs, and further unspecified relief.  Plaintiff names Amfac/JMB Hawaii,
Inc. and Amfac Sugar Kauai as defendants, among others.  Defendants have
filed an answer denying the substantive allegations of the complaint.
Defendants believe that they have meritorious defenses.

     On July 19, 2001, The Gutman Realty Company filed a lawsuit entitled
Gutman Realty Company v. Amfac Property Investment Co., Civ. No. 01-1-
0392(3), in the Second Circuit Court, State of Hawaii.  In the suit,
plaintiff allegedly seeks to recover unpaid rent for premises located at
2350 Kekaa Drive, Lahaina, Maui.  The complaint alleges that the unpaid
rent as of July 13, 2001 was $348 and seeks recovery of that amount with
interest, any future rents owing from that date forward, reasonable
attorneys fees, interest, costs, and any further relief that the court
might deem just and proper.  On October 9, 2001, Amfac Property Investment
Corp. filed its answer denying the substantive allegations of the complaint
and/or seeking an offset for any rents deemed to be lawfully owing and a
counterclaim for unpaid managements fees and reimbursements arising out of
the relationship between the parties.  APIC intends to vigorously defend
itself in this matter, but no assurances can be given that it or the
Company will not incur liability in connection with this case.

     On September 20, 1996, Oahu Sugar Company, Limited ("Oahu Sugar")
filed a lawsuit, Oahu Sugar v. Walter Arakaki and Steve Swift, Case No. 96-
3880-09, in the Circuit Court of the First Circuit, State of Hawaii.  In
the lawsuit, Oahu Sugar alleged that it entered into an agreement to sell
to defendants certain sugar cane processing equipment at Oahu Sugar's sugar
cane mill in Waipahu.  Oahu Sugar alleged that defendants failed to timely
dismantle and remove the equipment, as required by the agreement, and that
defendants were obligated to pay Oahu Sugar rent for the area occupied by
the equipment beyond the time provided for by the parties.  Oahu Sugar
further alleged that it provided notice to defendants that Oahu Sugar was
entitled to treat the equipment as abandoned property and to sell the
equipment, because the equipment had not been removed from the property in
a timely fashion, as required by the parties' agreement.  In its complaint,
Oahu Sugar sought, among other things, declaratory relief that it was
entitled to treat the equipment as abandoned, damages for breach of
contract, and rent under an unjust enrichment theory.



<PAGE>


     Defendants filed an answer, as amended, denying the substantive
allegations of Oahu Sugar's complaint and asserting various affirmative
defenses.  In addition, the defendants filed a seven-count counterclaim
against Oahu Sugar.  In the counterclaim, defendants alleged, among other
things, that Oahu Sugar failed to make the equipment available for removal
on a timely basis, and that Oahu Sugar otherwise improperly interfered with
defendants' plans for the removal and subsequent sale of the equipment.  In
the counterclaim, defendants sought, among other things, general, special
and punitive damages, attorneys' fees, costs, and such other relief as the
Court may have deemed appropriate.

     Oahu Sugar's declaratory relief claim was settled in advance of trial.

Oahu Sugar obtained dismissals and directed verdicts on six of defendants'
claims.  The remaining portions of the complaint and counterclaim proceeded
to a jury trial and verdict.  On December 2, 1999, the jury denied Oahu
Sugar relief on its remaining claims and awarded the defendants
approximately $2,600 in damages on their counterclaim.  On March 2, 2000,
the trial court entered a judgment against Oahu Sugar for the $2,600 in
damages awarded by the jury.  In addition, the trial court awarded
counterclaimants $751 in attorneys' fees, $28 in costs and $866 in
prejudgment interest.  Oahu Sugar's post trial motions for judgment as a
matter of law and for a new trial were denied.  Oahu Sugar filed a notice
of appeal.  The defendants began efforts to collect the amounts awarded to
them.  Defendants caused garnishee summons to be issued to various
affiliated and unaffiliated entities.  The defendants scheduled a debtor's
examination for August 23, 2000 which was not concluded.  The Hawaii
Supreme Court scheduled the case for an appellate conference and mediation
that was unsuccessful.  Then, on January 3, 2001, the Hawaii Supreme Court
entered an order dismissing the appeal.  The Supreme Court held that it
lacked jurisdiction over the appeal because the judgment entered on March
2, 2000 was legally defective in that it did not identify the claim for
which judgment was entered or dismiss all of the other claims and
counterclaims of the parties.  In light of the order of the Hawaii Supreme
Court, the parties filed legal briefs before the trial court to have the
court determine, among other things, whether a corrected judgment
consistent with the jury verdict may be entered as of March 2, 2000 or a
new judgment order is required.  After hearing the arguments of the
parties, on March 19, 2001, the trial court ruled that it would not enter a
corrected judgment as of March 2, 2000 and that a new judgment order will
be required.  On April 12, 2001, the court entered the new judgment order
on the counterclaims providing for the payment of approximately $2,600 in
damages, $730 in attorneys' fees, $28 in costs, $867 in prejudgment
interest, and additional prejudgment interest from January 20, 2000 through
April 12, 2001.  From and after entry of the order, post-judgment interest
will accrue on the unpaid balance at the statutory rate of ten percent per
annum until paid in full.  Oahu Sugar is pursuing an appeal and the
opposing side has filed a cross appeal seeking further relief on any
potential retrial of the matter.  The case is fully briefed and awaits a
decision by the Hawaii Supreme Court.  Oahu Sugar continues to believe that
it is entitled to affirmative relief on its complaint and that it has
meritorious defenses to the counterclaim that it has pursued on appeal.
The Company, however, can provide no assurances that it will be successful
in obtaining affirmative relief or overturning the verdict against Oahu
Sugar.  This verdict, if upheld, could have a material adverse effect on
the Oahu Sugar's financial condition.



<PAGE>


     On or about December 15, 2000, Oahu Sugar and Amfac Property
Development Corp. ("APDC"), among others, were named in a lawsuit entitled
Walter Arakaki and Steve Swift v. Oahu Sugar Company, Limited et al., Civil
No. 00-1-3817-12, and filed in the Circuit Court of the First Circuit of
Hawaii.  In the complaint, as amended, plaintiffs seek a declaration that
certain conveyances of real estate made by Oahu Sugar or APDC, since
December 1996, were allegedly fraudulent transfers made in violation of the
common law, the Hawaii fraudulent transfer act, and rights which they claim
arose in connection with the claims they filed in Oahu Sugar v. Walter
Arakaki and Steve Swift, Case No. 96-3880-09, discussed above (hereinafter,
"underlying matter").  Plaintiffs seek, among other things, injunctive and
declaratory relief, compensatory damages, punitive damages, orders of
attachment against sales proceeds, voidance of certain transfers,
foreclosure and other remedies in connection with various transfers of real
estate made by Oahu Sugar to APDC, the Young Men's Christian Association of
Honolulu ("YMCA"), and the Filipino Community Center, Inc. ("FCC"), among
others, all over the years 1996-2000.  The YMCA and FCC have also been
named defendants in this action and have filed cross-claims for relief
against Oahu Sugar and APDC for alleged breach of warranty of title,
indemnity and contribution in connection with their respective
transactions, and seeking, among other things, damages, attorneys' fees,
costs, and prejudgment interest.  Oahu Sugar and APDC have filed answers to
the complaint, as amended, and the cross-claims.  On May 3, 2001,
plaintiffs filed an amended complaint dropping the remedy of foreclosure in
connection with certain property transferred to the YMCA and adding various
allegations including, without limitation, allegations regarding the final
judgment entered in the underlying manner.  The case is proceeding and the
plaintiffs must file their pretrial statement on June 15, 2002.  Oahu Sugar
and APDC believe they have meritorious defenses and intend to pursue their
defenses vigorously.  However, there can be no assurances that this case,
when once adjudicated, will not have a material adverse effect on the
financial condition of Oahu Sugar or APDC.

     On October 7, 1999, Oahu Sugar Company was named in a lawsuit
entitled, Akee, et al. v. Dow Chemical Company, et al., Civil No. 99-3757-
10, and filed in Hawaii State Court (Circuit Court of the First Circuit of
Hawaii).  This multiple plaintiff toxic tort case named Oahu Sugar and a
number of additional defendants including several large chemical, petroleum
and agricultural companies.  In March 2000, Oahu Sugar Company was
dismissed without prejudice.

     On September 30, 1999, Oahu Sugar was one of several defendants named
in a lawsuit entitled, City and County of Honolulu v. Leppert, et al.
Civil No. CV 99 00670 ACK-FIY, and filed in the federal court, District of
Hawaii. The plaintiff asserted several causes of action including actions
for (1) clean-up and other response costs under the Comprehensive
Environmental Response, Compensation, and Liability Act ("CERCLA"); (2)
owner/operator liability, contribution and indemnity under Hawaii statutory
law; (3) strict liability for ultrahazardous activity; and (4) negligence.
Plaintiff alleged that defendant Oahu Sugar previously operated a sugar
mill on property currently owned by plaintiff, and used pesticides,
herbicides, fumigants, petroleum products and by-products and other
hazardous chemicals which were allegedly released into the soil and/or
groundwater at the subject property. Plaintiff sought recovery of response
costs it has incurred and to be incurred, a declaration of the rights and
liabilities for past and any future claims, damages for lost property
value, technical consulting and legal costs in investigating the property,
increased construction costs, and attorneys' fees and costs.  Two of the
other defendants, Clinton Churchill and David Heenan, as trustees under the
will and estate of James Campbell ("Campbell Estate"), filed a third party
complaint, as amended, seeking indemnity and contribution from Oahu Sugar
arising from, among other things, a lease between Oahu Sugar and Campbell
Estate concerning the land which is allegedly contaminated.  The Campbell
Estate also filed a third party complaint, as amended, against Northbrook
Corporation ("Northbrook") seeking a defense and indemnity.



<PAGE>


     On September 30, 1999, Oahu Sugar was named in a related lawsuit
entitled, City and County of Honolulu v. Leppert, et al., Civil No. 99-
3678-09, and filed in Hawaii State Court, Circuit Court for the First
Circuit of Hawaii.

     These related City and County of Honolulu cases were settled in
September 2001 with releases being exchanged by and between the parties.
The settlement was funded in large part by one of Oahu Sugar's insurers.

     On May 10, 2000, Oahu Sugar was named in a civil action entitled,
Albert and Marciana Kalaikai v. Oahu Sugar, et. al., pending in the Circuit
Court of the First Circuit, State of Hawaii, Civil No. 00-1-1497-05.
Pioneer Mill Company was named in this suit, but was not served.  In this
case, plaintiffs seek damages for alleged asbestos related injuries
sustained, among other things, from exposure to asbestos-containing
products over the course of in excess of forty years and at numerous
locations including the Oahu Sugar mill site over the period of 1950-1960.
The case is in the beginning stages of litigation and Oahu Sugar intends to
defend itself vigorously.

     An insurance carrier for Oahu Sugar has agreed to defend Oahu Sugar in
the Kalaikai case, subject to a reservation of rights.  Oahu Sugar can give
no assurances as to the portion of the defense costs and indemnity costs,
if any, that will be ultimately borne by the insurance carrier.

     Oahu Sugar is substantially without assets to satisfy any judgment in
the action.  However, the liability, if any, of Oahu Sugar in this asbestos
matter should not extend to AHI and its other subsidiaries.

     Oahu Sugar was also named a defendant in another alleged asbestos
related personal injury action entitled, Anthony Fiori and Stella Fiori v.
Raybestos-Manhattan, filed in the San Francisco County Superior Court, Case
No. 304868, filed on or about July 13, 1999.  In the complaint, plaintiffs
sought $3,000 in economic and non-economic damages, as well as $1,000 in
punitive damages, for injuries alleged sustained.  The matter settled in
July 2001 with a payment of $10 funded by one of Oahu Sugar's insurers.

     The Company believes that Oahu Sugar has meritorious defenses to the
above referenced pending lawsuits that continue to be pending and Oahu
Sugar will defend itself vigorously. However, there can be no assurances
that these cases (or any of them), if adjudicated, will not have a material
adverse effect on the financial condition of Oahu Sugar.

     On or about February 23, 2001 Kekaha Sugar Co., Ltd. received a letter
from the Hawaii Department of Health ("HDOH") assigning the Kekaha Sugar
Co., Ltd. site a high priority status based on HDOH's review of available
environmental data.  In the letter, HDOH identified five major areas of
potential environmental concern including the former wood treatment plant,
the herbicide mixing plant, the seed dipping plant, the settling pond, and
the Kekaha Sugar Mill.  While setting forth specific concerns, the HDOH
reserved the right to designate still further areas of potential concern
which might require further investigation and possible remediation.  HDOH
further reserved the right to modify its prioritization of the site should
conditions warrant.  The assignment of the high priority status will likely
result in a high degree of oversight by the HDOH as the issues raised are
studied and addressed.  Kekaha Sugar Co., Ltd. has responded to the letter.

Kekaha Sugar Co., Ltd. is substantially without assets and further pursuit
of this matter by HDOH could have a materially adverse effect on the
financial condition of Kekaha Sugar Co., Ltd.



<PAGE>


     On or about February 23, 2001, Lihue Plantation Co., Ltd. received a
similar letter from the HDOH assigning the Lihue Plantation Co., Ltd. site
a high priority status based on HDOH's review of available environmental
data.  In the letter, HDOH identified four major areas of potential
environmental concern including the Lihue herbicide mixing plant, the seed
dipping plant, the settling pond and the Lihue Sugar Mill.  While setting
forth specific concerns, the HDOH reserved the right to designate still
further areas of potential concern which might require further
investigation and possible remediation.  HDOH further reserved the right to
modify its prioritization of the site should conditions warrant.  As noted
above, the high priority assignment will likely result in a high degree of
oversight by the HDOH as the issues raised are studied and addressed.

     APDC has discovered chlorinated solvents in the groundwater at the
former Oahu Sugar Waipahu Sugar Mill site.  The contamination does not
appear in high concentrations.  APDC's recommendation for remediation using
hydrogen-releasing compounds has been rejected by the HDOH.  APDC may have
to do further work at the site.  At this point, APDC is unable to identify
with certainty the treatment options, if any, that the HDOH may require or
approve for the site, or the costs of same.

     As a result of an administrative order issued to Oahu Sugar Company by
the Hawaii Department of Health, Order No. CH 98-0012, dated January 27,
1998, Oahu Sugar is currently engaged in environmental site assessment of
lands it leased from the U.S. Navy and located on the Waipio Peninsula.
Sampling is underway and the investigation is otherwise still in its
preliminary stages.

     Other than as described above, the Company is not involved in any
material pending legal proceedings, other than ordinary routine litigation
incidental to its business. The Company and/or certain of its affiliates
have been named as defendants in several pending lawsuits. While it is
impossible to predict the outcome of such routine litigation that is now
pending (or threatened) and for which the potential liability is not
covered by insurance, the Company is of the opinion that the ultimate
liability from any of this litigation will not materially adversely affect
the Company's consolidated results of operations or its financial
condition.

     The Company is also involved in other various matters of ordinary
routine litigation and claims. Management, after consultation with legal
counsel, is of the opinion that the Company's liability (if any) for these
routine matters, when ultimately determined, will not have a material
adverse effect on the Company's financial position.

     The Company's property segment had contractual commitments (related to
project costs) of approximately $3,787 as of December 31, 2001.  Additional
development expenditures are dependent upon the outcome of the
Reorganization Case (see discussion of Reorganization Case).

     As of December 31, 2001, certain portions of the Company's land not
currently under development are mortgaged as security for $549 of
performance bonds related to property development.


(11) INCOME TAXES

     Total income tax expense (benefit) for the years ended December 31,
2001, 2000 and 1999 was allocated as follows:

                                         2001       2000        1999
                                       --------   --------    --------
  Income (loss) before extra-
    ordinary gain. . . . . . . . . .   $(15,619)   (43,708)    (20,048)
  Extraordinary gain . . . . . . . .      4,155      --          7,203
                                       --------   --------    --------
                                       $(11,464)   (43,708)    (12,845)
                                       ========   ========    ========



<PAGE>


     Income tax expense (benefit) for the years ended December 31, 2001,
2000 and 1999 consists of:
                                        Current   Deferred      Total
                                       --------   --------    --------
Year ended December 31, 2001:
  U.S. federal . . . . . . . . . . .   $  3,209    (16,425)    (13,216)
  State. . . . . . . . . . . . . . .        583     (2,986)     (2,403)
                                       --------   --------    --------
                                       $  3,792    (19,411)    (15,619)
                                       ========   ========    ========
Year ended December 31, 2000:
  U.S. federal . . . . . . . . . . .   $ (9,946)   (27,038)    (36,984)
  State. . . . . . . . . . . . . . .     (1,808)    (4,916)     (6,724)
                                       --------   --------    --------
                                       $(11,754)   (31,954)    (43,708)
                                       ========   ========    ========
Year ended December 31, 1999:
  U.S. federal . . . . . . . . . . .   $ (6,167)   (10,797)    (16,964)
  State. . . . . . . . . . . . . . .     (1,121)    (1,963)     (3,084)
                                       --------   --------    --------
                                       $ (7,288)   (12,760)    (20,048)
                                       ========   ========    ========

     The 2001 current income tax expense reflects the reclassification of
temporary differences recognized for income tax reporting purposes.  In
1999, income tax expense related to the Class B COLA redemption
approximated $7,203.  Of this amount, approximately $2,009 was attributable
to current taxes related to the redeemed Class B COLAs from non-affiliated
COLA holders, and, accordingly, was not indemnified by Northbrook through
tax sharing agreement in effect through December 31, 2000 (see note 5).
Current income tax benefit attributable to the Class B COLAs, redeemed from
affiliated COLA holders, of approximately $545 was indemnified by
Northbrook and, accordingly, was included with the 1999 current tax benefit
of $7,833 attributable to loss before extraordinary gain to derive the 1999
capital contribution related to current income taxes.

     Income tax benefit differs from the amounts computed by applying the
U.S. federal income tax rate of 35 percent to pretax loss as a result of
the following:

                                         2001       2000        1999
                                       --------   --------    --------

Computed "expected" tax benefit. . .   $(21,608)   (33,428)    (17,915)
Increase (reduction) in income
 taxes resulting from:
  Net loss from unconsolidated
   subsidiary. . . . . . . . . . . .      1,239      --          --
  Pension and Core Retirement
   Award expense . . . . . . . . . .         40      3,504         152
  Reversal of income tax accruals. .      --        (9,639)      --
  IRS audit adjustments. . . . . . .        572      --          --
  State income taxes, net of
   federal income tax benefit. . . .     (2,248)    (4,483)     (2,056)
Other, net . . . . . . . . . . . . .         94        680        (229)
Charitable deduction of
  appreciated property . . . . . . .      --          (342)      --
Valuation allowance on deferred
  tax asset. . . . . . . . . . . . .      6,292      --          --
                                       --------   --------    --------
     Total . . . . . . . . . . . . .   $(15,619)   (43,708)    (20,048)
                                       ========   ========    ========



<PAGE>


     Deferred income taxes reflect the net tax effects of temporary
differences between the carrying amounts of assets and liabilities for
financial reporting purposes and the amounts used for income tax purposes.
Prior to AF Investors' capital contribution to APIC in return for 83.33% of
the shares of APIC in December 2000, the net deferred tax liability
included approximately $15,000 of temporary differences related to APIC's
assets and liabilities.  As a result of such transaction such amount is no
longer included in the consolidated financial statements as a deferred tax
liability but reflected at 16.67% in the Company's Investment in
unconsolidated entity, at equity.  The net deferred income tax liability
originally reported as of December 31, 2000 has been increased by $16,658
to reflect adjustments for financial reporting purposes to the tax basis of
certain assets and liabilities.  Significant components of the Company's
deferred tax liabilities and assets as of December 31, 2001 and 2000 are as
follows:
                                                    2001        2000
                                                  --------    --------

Deferred tax (assets):
 Postretirement benefits . . . . . . . . . . . .  $(12,916)    (16,159)
 Interest accruals . . . . . . . . . . . . . . .    (2,237)        116
 Cancellation of Debt Income on
   COLA tenders. . . . . . . . . . . . . . . . .    (4,764)     (5,059)
 Other accruals. . . . . . . . . . . . . . . . .    (4,157)     (2,800)
 Inventories, principally due to
    sugar production costs, capitalized
    costs, capitalized interest and
    purchase accounting adjustments. . . . . . .    (1,097)        439
Plant and equipment, principally due to
  valuation adjustments for financial
  reporting purposes . . . . . . . . . . . . . .     1,371       3,312
Deferred gains for financial reporting
  purposes . . . . . . . . . . . . . . . . . . .    (2,222)     (2,756)
Investments in unconsolidated entities,
  principally due to purchase accounting
  adjustments. . . . . . . . . . . . . . . . . .      (277)       (304)
Net operating loss carryforwards . . . . . . . .    (6,292)      --
Valuation allowance for deferred assets. . . . .     6,292       --
                                                  --------    --------
       Total deferred tax assets . . . . . . . .   (26,299)    (23,211)
                                                  --------    --------
 Deferred tax liabilities:
  Accounts receivable related to profit
    on sales of sugar. . . . . . . . . . . . . .       386         934
 Land and land improvements, principally
   due to purchase accounting adjustments. . . .    34,516      46,136
                                                  --------    --------
     Total deferred tax liabilities. . . . . . .    34,902      47,070
                                                  --------    --------
     Net deferred tax liability. . . . . . . . .  $  8,603      23,859
                                                  ========    ========

     The statutes of limitations with respect to Northbrook's tax returns
for the years 1998 through 2001 remain open.  The Company is a subsidiary
of Northbrook and accordingly is subject to tax liability exposure due to
the several nature of the liability for the payment of taxes for entities
filing consolidated tax returns and will generally be protected for years
through 2000 by Northbrook respecting the tax liabilities for such years
generated by Northbrook and its consolidated affiliates rather than the
Company.

     For taxable years commencing in 2001, the Company will be responsible
for paying their own income taxes on taxable income generated in 2001 and
thereafter.


<PAGE>


(12) SEGMENT INFORMATION

     Property, Agriculture and Golf comprised the separate industry
segments of the Company during the reporting period.  Operating income
(loss)-Other consists primarily of unallocated overhead expenses and Total
assets-Other consists primarily of cash and deferred expenses.

     Total revenues, operating income (loss), assets, capital expenditures,
and depreciation and amortization by industry segment for 2001, 2000 and
1999 are set forth below:

                                         2001       2000        1999
                                       --------   --------    --------
  Revenues:
    Property . . . . . . . . . . . .   $ 50,636     37,850      22,181
    Agriculture. . . . . . . . . . .      4,252     22,283      30,074
    Golf . . . . . . . . . . . . . .      4,175     14,990      14,832
                                       --------   --------    --------
                                       $ 59,063     75,123      67,087
                                       ========   ========    ========
  Operating income (loss):
    Property:
      Reduction to carrying value
        of investments in real
        estate . . . . . . . . . . .   $(13,725)   (15,853)    (11,360)
      Other. . . . . . . . . . . . .      1,471     (1,435)       (801)
    Agriculture:
      Reduction in carrying value
        of assets in sugar
        operations . . . . . . . . .     (4,384)   (22,000)      --
      Other. . . . . . . . . . . . .        642    (22,425)    (11,971)
    Golf . . . . . . . . . . . . . .        120      3,884       4,039
    Other. . . . . . . . . . . . . .     (5,552)    (1,557)     (1,760)
                                       --------   --------    --------
                                       $(21,428)   (59,386)    (21,853)
                                       ========   ========    ========
  Total assets:
    Property . . . . . . . . . . . .   $ 67,410    102,408      96,937
    Agriculture. . . . . . . . . . .     64,760     90,147     169,433
    Golf . . . . . . . . . . . . . .      --        29,969      76,893
    Other. . . . . . . . . . . . . .     21,819     29,763      16,431
                                       --------   --------    --------
                                       $153,989    252,287     359,694
                                       ========   ========    ========
  Capital expenditures:
    Property . . . . . . . . . . . .   $     13        108       1,374
    Agriculture. . . . . . . . . . .         20      2,642       1,348
    Golf . . . . . . . . . . . . . .        499        239         332
    Other. . . . . . . . . . . . . .      --            21       --
                                       --------   --------    --------
                                       $    532      3,010       3,054
                                       ========   ========    ========
  Depreciation and amortization:
    Property . . . . . . . . . . . .   $     86        339         614
    Agriculture. . . . . . . . . . .      1,924      2,931       3,590
    Golf . . . . . . . . . . . . . .        839      1,318       1,315
    Other. . . . . . . . . . . . . .      --             5         137
                                       --------   --------    --------
                                       $  2,849      4,593       5,656
                                       ========   ========    ========

     The above information includes the results of operations of the two
Kaanapali Golf Courses for the two years ending December 31, 2000.  Total
assets above do not reflect assets relating to the two courses as of
December 31, 2001 and 2000 (see note 3).  The above information also
includes the results of operations of the Waikele Golf Club during all
three years; however, total assets above do not reflect assets relating to
the Waikele Golf Club as of December 31, 2001.



<PAGE>


(13) SUBSEQUENT EVENTS

     See Notes 6 and 10 for additional subsequent events disclosure.

     Effective January 31, 2002, Mr. Ashmore resigned as President of
significant subsidiaries of the Company.  The Company named Gary Nickele as
his replacement.

     On February 27, 2002, AHI, certain of the Additional Registrants and
certain other subsidiaries and affiliates (collectively, the "Debtors") of
AHI filed voluntary petitions under Chapter 11 of the United States
Bankruptcy Code.  These petitions have been consolidated for joint
administration as a single case (the "Reorganization Case") in the U.S.
Bankruptcy Court for the Northern District of Illinois.  The Debtors filed
their petitions in order to enable it to restructure its debt and convert
substantial portions thereof to equity in an attempt to successfully
reorganize with a manageable balance sheet.

     On February 28, 2002, an interest payment (representing Mandatory Base
Interest through February 28, 2002) of approximately $2,788 on the COLAs
was not paid.

(14)  QUARTERLY FINANCIAL INFORMATION (UNAUDITED)

                                                2001
                           ----------------------------------------------
                            At 3/31     At 6/30     At 9/30     At 12/31
                           ----------  ----------  ----------  ----------
Total income . . . . . . . $   23,239       6,705      28,059       1,955
                           ==========  ==========  ==========  ==========

Net earnings (loss). . . . $   (4,699)     (3,972)    (31,971)      1,022
                           ==========  ==========  ==========  ==========


                                                2000
                           ----------------------------------------------
                            At 3/31     At 6/30     At 9/30     At 12/31
                           ----------  ----------  ----------  ----------
Total income . . . . . . . $   16,034      11,099      17,187      30,888
                           ==========  ==========  ==========  ==========

Net earnings (loss). . . . $   (5,200)     (7,492)    (13,130)    (25,977)
                           ==========  ==========  ==========  ==========



<PAGE>


                                                           Schedule II

                             AMFAC HAWAII, LLC

                     Valuation and Qualifying Accounts

               Years ended December 31, 2001, 2000 and 1999

                          (Dollars in Thousands)


                          Additions   Additions
              Balance at  Charges to  Charges to             Balance at
              Beginning   Cost and     Other                     End
Description   of Period   Expenses    Accounts   Deductions   of Period
-----------   ----------  ----------  ---------- ----------  ----------

Year ended December 31, 2001:
----------------------------
 Allowance for
  doubtful
  accounts:
   Trade
    accounts     $  536         --          --          82         454
   Claims and
    other          --           --          --         --          --
                 ------       -----       -----      -----       -----
                 $  536         --          --          82         454
                 ======       =====       =====      =====       =====


Year ended December 31, 2000:
----------------------------
 Allowance for
  doubtful
  accounts:
   Trade
    accounts     $  552         182        --          198         536
   Claims and
    other          --          --          --         --          --
                 ------       -----       -----      -----       -----
                 $  552         182        --          198         536
                 ======       =====       =====      =====       =====


Year ended December 31, 1999:
----------------------------
 Allowance for
  doubtful
  accounts:
   Trade
    accounts     $  595           1         --          44         552
   Claims and
    other           --          --          --         --          --
                 ------       -----       -----      -----       -----
                 $  595           1         --          44         552
                 ======       =====       =====      =====       =====




<PAGE>


ITEM 9.  CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON
ACCOUNTING AND
         FINANCIAL DISCLOSURE

     There were no changes in or disagreements with the accountants during
the fiscal years 2001 and 2000.


                                 PART III

ITEM 10.  MANAGERS AND EXECUTIVE OFFICERS OF THE REGISTRANT

    As of March 15, 2002, the manager, executive officers and certain other
officers of the Company were as follows:

                                          Position
                                          Held with
         Name                             the Company
      ----------                          ------------

      Judd D. Malkin                      Chairman
      Neil G. Bluhm                       Vice Chairman
      Gary Nickele                        Manager and President
      Peggy H. Sugimoto                   Senior Vice President and
                                          Chief Financial Officer
      Tamara G. Edwards                   Vice President

     Certain of these officers are also officers and/or directors of JMB
and numerous affiliated companies of JMB (hereinafter collectively referred
to as "JMB affiliates") and many of such officers are also partners of
certain partnerships (herein collectively referred to as the "Associate
Partnerships") which are associate general partners (or general partners
thereof) in publicly offered real estate limited partnerships. The publicly
offered partnerships in which the Associate Partnerships are partners have
not engaged in the agriculture business and have primarily purchased, or
made mortgage loans securing, existing commercial, retail, office,
industrial and multi-family residential rental buildings. However, certain
partnerships sponsored by JMB and other affiliates of JMB are engaged in
development activities including planned communities, none of which are in
Hawaii.

     There is no family relationship among any of the foregoing directors,
managers or officers.

     The foregoing manager has been elected to serve until a successor is
elected and qualified.

     There are no arrangements or understandings between or among any of
said manager or officers and any other person pursuant to which any manager
or officer was selected as such.

     The business experience during the past five years of the manager and
such officers of the Company includes the following:

     Judd D. Malkin (age 64) has been Chairman of the Company since 1988,
Mr. Malkin is also Chairman of the Board of JMB, an officer and/or director
of various JMB affiliates and an individual general partner of several
publicly offered real estate limited partnerships affiliated with JMB.
Mr. Malkin has been associated with JMB since October 1969. Mr. Malkin was
also Co-Chairman of the Board of Directors (from its inception in 1993
until November 2000) of Urban Shopping Centers, Inc., a real estate
investment trust in the business of owning, managing and developing
shopping centers. He is a Certified Public Accountant.



<PAGE>


     Neil G. Bluhm (age 64) has been Vice Chairman of the Company since
1994.  Mr. Bluhm held various other officer positions with the Company from
1988 through 1993 and served as a Director from November 1989 to January
1994. Mr. Bluhm is also President and director of JMB, an officer and/or
director of various JMB affiliates and an individual general partner of
several publicly offered real estate limited partnerships affiliated with
JMB. Mr. Bluhm has been associated with JMB since August 1970.  Mr. Bluhm
was a Co-Chairman of the Board of Directors of Urban Shopping Centers, Inc.
(from its inception in 1993 until December 2000) that is a real estate
investment trust in the business of owning, managing and developing
shopping centers. He is a member of the Bar of the State of Illinois and a
Certified Public Accountant.

     Gary Nickele (age 49) has been Manager of the Company since August,
2000 and President since February 2001.  Mr. Nickele has been associated
with JMB since February, 1984.  He holds a J.D. degree from the University
of Michigan Law School and is a member of the Bar of the State of Illinois.

     Peggy H. Sugimoto (age 51) has been Senior Vice President and Chief
Financial Officer of the Company since 1994 and had been Manager from
August 1996 to February 1999.  Ms. Sugimoto has been associated with the
Company since 1976. She is a Certified Public Accountant.

     Tamara G. Edwards (age 47) has been Vice President of the Company
since August 1996.  Ms. Edwards has been President of several of the
subsidiaries since March 1997. Ms. Edwards served as Senior Counsel for the
Company from 1995 through 1997. She was also formerly a Manager of the
Company and Director of certain of its subsidiaries.  She is a member of
the Bar of California and Florida.






<PAGE>


ITEM 11. EXECUTIVE COMPENSATION

   Certain of the officers and managers of the Company listed in item 10
above are officers and/or managers/directors of JMB or Northbrook and are
compensated by JMB, Northbrook, or an affiliate thereof (other than the
Company and its subsidiaries). The Company will reimburse Northbrook, JMB
and their affiliates for any expenses incurred while providing services to
the Company as described under the caption "Description of the COLAs -
Limitations on Mergers and Certain Other Transactions" at pages 42-43 of
the Prospectus, a copy of which is incorporated herein by reference.


                        SUMMARY COMPENSATION TABLE

                        Annual Compensation (1)(3)
                        ---------------------------
                                                               Other
                                                              Annual
                                                             Compensa-
                   Principal               Salary     Bonus    tion
Name (2)           Position         Year     ($)       ($)      ($)
---------------    ---------       -----   -------   ------  ---------

Gary Nickele (4)   President
                   and Manager      2001   172,300     N/A      N/A

Gary Grottke (4)   President        2001    69,200     N/A    405,000
                   and Manager      2000   378,000     N/A      N/A
                                    1999   325,000     N/A      N/A

Peggy Sugimoto     Senior Vice      2001   160,000   50,000     N/A
                   President        2000   155,000   50,000     N/A
                                    1999   145,000   45,000     N/A

Tamara G. Edwards  Vice President   2001   250,000   41,500     N/A
                   and Manager      2000   250,000  115,000     N/A
                                    1999   150,000  100,000     N/A

Jeff Ashmore       President of     2001   225,000   90,000     N/A
 (5)               significant      2000   159,375     N/A      N/A
                   subsidiaries     1999       N/A     N/A      N/A

Scott Nunokawa     President of a   2001       N/A      N/A     N/A
 (6)               significant      2000    93,750     --     112,500
                   subsidiary       1999   135,000     --       N/A
----------

      (1)   The Company does not have a compensation committee. During
2001, Mr. Malkin and Mr. Nickele participated in the deliberations
concerning executive officer compensation.  During 2000 and 1999, Mr.
Malkin and Mr. Grottke participated in the deliberations concerning
executive officer compensation.

      (2)   Includes CEO and 4 most highly compensated executives whose
salary and bonus exceed $100,000.

      (3)   Salary amounts for Mr. Grottke and Mr. Nickele represent the
portion of total compensation allocated and charged to the Company by
Northbrook or its affiliates.

      (4)   Mr. Nickele became President and Manager upon Mr. Grottke's
resignation effective February 23, 2001.

      (5)   As Mr. Ashmore was hired by the Company during 2000, the salary
amount disclosed in 2000 in the above table is the amount earned for the
partial year of employment with the Company.  Mr. Ashmore's annualized
salary in 2000 had he been employed by the Company for the entire year was
$225,000.


<PAGE>


      (6)   As Mr. Nunokawa was hired by the Company during 1998 and
resigned in 2000, the salary amounts disclosed in 2000 in the above table
are the amounts earned for the partial year of employment with the Company.

Mr. Nunokawa's annualized salary in 2000 had he been employed by the
Company for the entire year was $150,000.



ITEM 12.  SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND
MANAGEMENT

     All of the outstanding membership interests of Amfac Hawaii, LLC are
owned by Northbrook.  Substantially all of the shares of Northbrook are
owned by Pacific Trail Holdings, LLC (fka Amfac Holdco, LLC), a Delaware
limited liability company ("Pacific Trail"), which was formed as a holding
company by the former Northbrook shareholders during 2000.  Approximately
6.4% of the membership interests of Pacific Trail are owned by JMB and
approximately 90.2% are owned directly or indirectly by individuals who are
shareholders or employees of JMB or members of their families (or trusts
for their benefit).  The remaining membership interests are owned by third
parties that are not related to JMB.  Randi Malkin Steinberger, Stephen
Malkin and Barry Malkin, individually or through trusts which they control,
each have beneficial ownership of approximately 9.7% of the membership
interest of Pacific Trail.  Leslie Bluhm, Andrew Bluhm and Meredith Bluhm,
individually or through trusts which they control, each have beneficial
ownership of approximately 10.0% of the membership interests of Pacific
Trail.  Kathleen Schreiber, in her capacity as trustee of various trusts
for the benefit of members of her family, which trusts comprise the
managing partners of a partnership which owns membership interests in
Pacific Trail, has beneficial ownership of approximately 6.1% of the
membership interests in Pacific Trail.  Stuart Nathan, a director and
shareholder of JMB, and his children, Scott Nathan and Robert Nathan,
collectively have beneficial ownership of approximately 5.1% of the
membership interests in Pacific Trail; each of them, primarily by virtue of
their status as general partners of partnerships which own such shares
would also be considered to individually have beneficial ownership of
substantially all of such shares.

     The approximately 83% of APIC that is not owned by Amfac Hawaii, LLC
is ultimately owned, through intermediate entities, in substantially the
same manner as Northbrook.



ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

     Other than as contained under Items 10 and 11 above, and this Item 13,
there were no other significant transactions or business relationships with
Northbrook, JMB, affiliates or their management.

     The Company, its subsidiaries and the joint ventures in which the
Company or its subsidiaries are partners are permitted to engage in various
transactions involving Northbrook, JMB and their affiliates, as described
under the captions "Description of the COLAs - Limitation on Dividends,
Purchases of Capital Stock and Indebtedness" and "Limitations on Mergers
and Certain Other Transactions" and "Purchase or Joint Venture of
Properties by Affiliates; Development of Properties as Excluded Assets;
Residual Value of Company in Certain Projects" at pages 41-45, and "Risk
Factors - Conflicts of Interest" at page 19 of the Prospectus, a copy of
which descriptions are hereby incorporated herein by reference to
Exhibit 28.1 to the Company's Report on Form 10-K for December 31, 1988
(File No. 33-24180) dated March 21, 1989. The relationship of the Company
(and its managers and executive officers and certain other officers) to its
affiliates is set forth above in Item 10.



<PAGE>


     In February 1997, the then outstanding balance of the Senior Debt, was
consolidated under a single $104.8 million ten year promissory note,
payable to Northbrook.  In addition, in February 1997, the Company borrowed
additional amounts from Northbrook's affiliate FHT under a $30 million
revolving credit note.  In 1998, the $104.8 million note was replaced by
two nine-year notes: (i) a $99.6 million note, and (ii) a $15 million note
(with an initial balance of $7.9 million).  The $99.6 million note was
transferred by Northbrook to FHT in 1998, and later in 1998, FHT sold the
$30 million note to Northbrook.  These notes were payable interest only
until maturity, had a maturity date of February 17, 2007 and accrued
interest at the prime rate plus 2%.

     As of December 31, 1998, the Company agreed to exercise its option to
redeem the Class B COLAs that would be "put" to a wholly-owned subsidiary
of Northbrook for repurchase in partial consideration for (a) the
agreements by the Company's affiliates, Fred Harvey Transportation Company
("Fred Harvey") and AF Investors, to defer until December 31, 2001 all
interest accruing from January 1, 1998 through December 31, 2001 and
relating to the approximately $99.6 million of Senior Indebtedness of the
Company then owing to Fred Harvey and the approximately $47.7 million of
Senior Indebtedness of the Company then owing to AF Investors (see below);
and (b) Northbrook agreeing to cause approximately $55.1 million of the
Company's indebtedness that was senior to the COLAs to be contributed to
the capital of the Company.  The redemption was completed on June 1, 1999.
In connection with the foregoing deferral of interest and contribution of
capital, the Company agreed to allow the Senior Debt held by Northbrook and
its affiliates to be secured by substantially all assets of the Company to
the extent such security was requested by Northbrook and its affiliates and
was permitted under any other secured debt of the Company held by third
parties.  In connection therewith, Northbrook and its affiliates have
obtained mortgages or other security interests in substantially all of the
real and personal property of the Registrants other than the golf course
properties.  The deferral of interest, together with this contribution to
capital, were made as part of the Company's effort to alleviate significant
liquidity constraints and continue to meet the Value Maintenance Ratio
requirement under the Indenture.  As discussed above, effective
December 29, 2000, the Company entered into a restructuring agreement with
the certain other parties, including the holders of the Senior Debt by
which Northbrook made additional capital contributions to the Company to
total approximately $25 million (including $10 million related to employee
termination costs) and agreed to contribute an additional portion of the
Senior Debt to the Company, with a balance of principal and interest of $25
million as of such date, on December 31, 2006, so long as the new tax
agreement entered into under the Restructuring Agreement is still in force.

     On May 25, 1999, the Company borrowed approximately $21.3 million from
AF Investors, an affiliate of the Company, to redeem a portion of the
Class B COLAs pursuant to the Class B COLA Redemption Offer (see Note 5).
Additionally, AF Investors submitted Class B COLAs pursuant to the Class B
Redemption Offer and agreed to take back senior debt in the amount of $26.4
million from the Company in lieu of cash.  Pursuant to the terms of the
Indenture, such amount borrowed from AF Investors are Senior Indebtedness
that matures on December 31, 2008 and bears interest at a rate per annum of
prime (4.75% at December 31, 2001) plus 1% (note deferral of interest
discussions in Note 4).  Under the terms of the note, additional interest
may be payable on such Senior Indebtedness upon its maturity based upon
fair market value, if any, of the Company's equity at that time.  Such
Senior Indebtedness matures on December 31, 2008 and bears interest at a
rate per annum equal to prime plus 1% (note deferral of interest discussion
in  Note 4).  Additional interest may be payable on such senior debt upon
its maturity based upon its fair market value, if any, of the Company's
equity at that time.



<PAGE>


     In September 1998, the Company purchased TPI 50% ownership interest in
the 96-acre beachfront parcel (commonly referred to as Kaanapali North
Beach) for $12.0 million.  The Company paid $2.4 million in cash and signed
a note for $9.6 million.  The note was secured by a mortgage on the
property and was in favor of TPI and is "Senior Indebtedness" (as defined
in the Indenture).  The note was payable in five annual installments in the
principal amount of $1.9 million beginning in September 1999.  The note
bore interest of 8.5% and was payable quarterly.  In October 2000, an
affiliate of Northbrook purchased the note for the outstanding principal
and accrued interest aggregating approximately $5.6 million.  On
December 29, 2000, the note was amended to require quarterly interest
payments beginning March 31, 2001. Though the note as so amended is a
demand note, it also provided for two scheduled principal payments of $2.7
million each in September of 2002 and 2003 (see Note 4 for further
description of such amendment) to the extent that payment of such amounts
had not earlier been demanded by the holder.  In October 2001, Northbrook
purchased the note from its affiliate for the outstanding principal and
accrued interest aggregating approximately $5.5 million and also demanded a
principal payment of $2.3 million which was paid by the Company in October
2001.  The note remains secured by the Company's 50% undivided interest in
the property still owned by the Company at Kaanapali North Beach, with such
entire also mortgaged as security for other Senior Debt.

     In October of 1999, AF Investors paid approximately $.8 million to
assume the lender's position in the loan to the Lihue Plantation Company,
Limited  ("Lihue") which was originally used to fund the acquisition of the
Lihue's power generation equipment (see Note 4).  The loan had an
outstanding balance of $.8 million on the date of the loan transfer and
bore interest at the rate equal to prime rate plus three and one half
percent.  The loan was secured by the Lihue power generation equipment,
sugar inventories and receivables, certain other assets and real property
of the Company, had limited recourse to the Company and certain other
subsidiaries and was "Senior Indebtedness" as defined in the Indenture
relating to the COLAs.  The loan was satisfied in full in October 2000.

     The total amount due Northbrook and its subsidiaries for Senior Debt
financing as of December 31, 2001 and $186.1 million, which includes
deferred interest to affiliates on senior debt of approximately $46.1
million (all of which has been deferred, as described in Note 4).  Under
the terms of the Indenture, the amounts borrowed from Northbrook or its
affiliates are "Senior Indebtedness" to the COLAs.

     The Company incurred interest expense of approximately $16 million,
$20.2 million and $14.1 million for the years ended 2001, 2000 and 1999,
respectively, in connection with the acquisition and additional Senior Debt
financing obtained from affiliates.

     With respect to any calendar year, JMB or its affiliates may receive a
Qualified Allowance in an amount equal to 1-1/2% per annum of the Fair
Market Value (as defined) of the gross assets of the Company and its
subsidiaries (other than cash and cash equivalents and Excluded Assets (as
defined)) for providing certain advisory services for the Company. The
aforementioned advisory services, which are provided pursuant to a 30-year
Services Agreement entered into between the Company and JMB in November
1988, include making recommendations in the following areas: (i) the
construction and development of real property; (ii) land use and zoning
changes; (iii) the timing and pricing of properties to be sold; (iv) the
timing, type and amount of financing to be incurred; (v) the agricultural
business; and, (vi) the uses (agricultural, residential, recreational or
commercial) for the land.  Due to the filing of the Reorganization Case,
the Company does not expect to pay JMB any Qualified Allowance but
continues to receive services from JMB under the Services Agreement.



<PAGE>


     The Company, its subsidiaries and their joint ventures, reimburse
Northbrook, JMB and their affiliates for direct expenses incurred on their
behalf, including salaries and salary related expenses incurred in
connection with the management of the Company's or its subsidiaries and the
joint ventures' operations. The total of such costs through December 31,
2001, 2000 and 1999 was $1.5 million, $.9 million and $.8 million,
respectively, (in November 2001, approximately $1.5 million of such amounts
due to affiliates was paid by the Company) of which $0.2 million was unpaid
as of December 31, 2001.  In addition, as of December 31, 2001, the current
portion of amounts due affiliates includes approximately $9.1 million and
$2 million of income tax payable related to the Class A Redemption Offer
and Class B COLA Redemption Offer, respectively.  Also, the Company pays a
non-accountable reimbursement of approximately $.03 million per month to
JMB or its affiliates in respect of general overhead expense, all of which
was paid as of December 31, 2001.

     JMB Insurance Agency, Inc. an affiliate of JMB, earns insurance
brokerage commissions in connection with providing the placement of
insurance coverage for certain of the properties and operations of the
Company. Such commissions are comparable to those available to the Company
in similar dealings with unaffiliated third parties. The total of such
commissions for the years ended December 31, 2001, 2000 and 1999 was
approximately $.3 million, $.4 million and $.6 million, all of which was
paid as of December 31, 2001.

     Northbrook and its affiliates allocated certain charges for services
to the Company based upon the estimated level of services for the years
ended December 31, 2001, 2000 and 1999 of approximately $0.1 million, $0.6
million and $0.7 million, respectively, (in November 2001, approximately
$0.5 million of such amounts due to affiliates was repaid by the Company)
of which $0.3 million was unpaid as of December 31, 2001.  The affiliated
charges for the years ended December 31, 2001, 2000 and 1999 were offset by
$0.006 million, $.04 million and $.08 million, respectively, of certain
charges for certain expenditures paid by the Company for Northbrook.  These
services and costs are intended to reflect the Company's separate costs of
doing business and are principally related to the inclusion of the
Company's employees in the Northbrook pension plan, payment of severance
and termination benefits and reimbursement for insurance claims paid on
behalf of the Company. All amounts described above, deferred or currently
payable, do not bear interest and are expected to be paid in future
periods.

     The COLA Units still held by AF Investors remain outstanding pursuant
to the terms of the Indenture.  Except as provided in the last sentence of
this paragraph, AF Investors is entitled to the same rights and benefits of
any other holder of COLA Units.  Because AF Investors is an affiliate of
the Company, AF Investors will not be able to participate in determining
whether the holders of the required principal amount of debt under the
Indenture have concurred in any direction, waiver or consent under the
terms of the Indenture, and they will not be entitled to participate in any
direction to the Trustee relating to the Reorganization Case.


<PAGE>


                                  PART IV

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

      (a)   The following documents are filed as part of this report:

            (1)   Financial Statements

                  See Index to Financial Statements and Supplementary Data
            filed with this report.

            (2)   Exhibits

                  See Index to Exhibits, which is incorporated herein by
            reference.

      (b)   Reports on Form 8-K: The following reports on Form 8-K were
      filed during the last quarter of the period covered by this report

                  Amfac Hawaii, LLC's report on Form 8-K for December 14,
            2001 (File No. 33-24180) describing the sale of the Waikele
            Golf Club was filed.

      (c)   Exhibits:

                  The Exhibits required by Item 601 of Regulation S-K are
            listed in the Index to Exhibits, which is incorporated herein
            by reference.

     All other schedules have been omitted since the required information
is presented in the financial statements and the related notes or is not
applicable.


<PAGE>


                                SIGNATURES


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


                              AMFAC HAWAII, LLC



                              By:   Gailen J. Hull
                                    Senior Vice President
                              Date: March 25, 2002


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



                              By:   Gary Nickele
                                    President and Manager
                              Date: March 25, 2002



                              By:   Peggy Sugimoto
                                    Senior Vice President
                              Date: March 25, 2002



                              By:   Gailen J. Hull
                                    Senior Vice President and
                                    Principal Accounting Officer
                              Date: March 25, 2002





<PAGE>


                                SIGNATURES


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


                              AMFAC LAND COMPANY, LTD.



                              By:   Gailen J. Hull
                                    Vice President
                              Date: March 25, 2002


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



                              By:   Gary Nickele
                                    Vice President and Director
                              Date: March 25, 2002



                              By:   Tamara G. Edwards
                                    President
                              Date: March 25, 2002



                              By:   Peggy Sugimoto
                                    Vice President
                              Date: March 25, 2002



                              By:   Gailen J. Hull
                                    Vice President and
                                    Principal Accounting Officer
                              Date: March 25, 2002





<PAGE>


                                SIGNATURES


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


                              AMFAC PROPERTY DEVELOPMENT CORP.



                              By:   Gailen J. Hull
                                    Vice President
                              Date: March 25, 2002


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



                              By:   Gary Nickele
                                    Vice President and Director
                              Date: March 25, 2002



                              By:   Tamara G. Edwards
                                    President
                              Date: March 25, 2002



                              By:   Peggy Sugimoto
                                    Senior Vice President - Finance
                              Date: March 25, 2002



                              By:   Gailen J. Hull
                                    Vice President and
                                    Principal Accounting Officer
                              Date: March 25, 2002





<PAGE>


                                SIGNATURES


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


                              AMFAC PROPERTY INVESTMENT CORP.



                              By:   Gailen J. Hull
                                    Vice President
                              Date: March 25, 2002


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



                              By:   Gary Nickele
                                    Vice President and Director
                              Date: March 25, 2002



                              By:   Tamara G. Edwards
                                    President
                              Date: March 25, 2002



                              By:   Peggy Sugimoto
                                    Senior Vice President - Finance
                              Date: March 25, 2002



                              By:   Gailen J. Hull
                                    Vice President and
                                    Principal Accounting Officer
                              Date: March 25, 2002





<PAGE>


                                SIGNATURES


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


                              H. HACKFELD & CO., LTD.



                              By:   Gailen J. Hull
                                    Vice President
                              Date: March 25, 2002


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



                              By:   Gary Nickele
                                    President and Director
                              Date: March 25, 2002



                              By:   Tamara G. Edwards
                                    Vice President
                              Date: March 25, 2002



                              By:   Peggy Sugimoto
                                    Vice President
                              Date: March 25, 2002



                              By:   Gailen J. Hull
                                    Vice President and
                                    Principal Accounting Officer
                              Date: March 25, 2002





<PAGE>


                                SIGNATURES


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


                              KAANAPALI ESTATE COFFEE, INC.



                              By:   Gailen J. Hull
                                    Vice President
                              Date: March 25, 2002


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



                              By:   Gary Nickele
                                    President and Director
                              Date: March 25, 2002



                              By:   Peggy Sugimoto
                                    Vice President
                              Date: March 25, 2002



                              By:   Gailen J. Hull
                                    Vice President and
                                    Principal Accounting Officer
                              Date: March 25, 2002








<PAGE>


                                SIGNATURES


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


                              KEKAHA SUGAR COMPANY, LIMITED



                              By:   Gailen J. Hull
                                    Vice President
                              Date: March 25, 2002


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



                              By:   Gary Nickele
                                    President and Director
                              Date: March 25, 2002



                              By:   Peggy Sugimoto
                                    Vice President
                              Date: March 25, 2002



                              By:   Gailen J. Hull
                                    Vice President and
                                    Principal Accounting Officer
                              Date: March 25, 2002





<PAGE>


                                SIGNATURES


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


                              THE LIHUE PLANTATION COMPANY, LIMITED



                              By:   Gailen J. Hull
                                    Vice President
                              Date: March 25, 2002


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



                              By:   Gary Nickele
                                    President and Director
                              Date: March 25, 2002



                              By:   Peggy Sugimoto
                                    Vice President
                              Date: March 25, 2002



                              By:   Gailen J. Hull
                                    Vice President and
                                    Principal Accounting Officer
                              Date: March 25, 2002





<PAGE>


                                SIGNATURES


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


                              OAHU SUGAR COMPANY, LIMITED



                              By:   Gailen J. Hull
                                    Vice President
                              Date: March 25, 2002


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



                              By:   Gary Nickele
                                    President and Director
                              Date: March 25, 2002



                              By:   Tamara G. Edwards
                                    Vice President
                              Date: March 25, 2002



                              By:   Peggy Sugimoto
                                    Vice President
                              Date: March 25, 2002



                              By:   Gailen J. Hull
                                    Vice President and
                                    Principal Accounting Officer
                              Date: March 25, 2002





<PAGE>


                                SIGNATURES


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


                              PIONEER MILL COMPANY, LIMITED



                              By:   Gailen J. Hull
                                    Vice President
                              Date: March 25, 2002


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



                              By:   Gary Nickele
                                    President and Director
                              Date: March 25, 2002



                              By:   Peggy Sugimoto
                                    Vice President
                              Date: March 25, 2002



                              By:   Gailen J. Hull
                                    Vice President and
                                    Principal Accounting Officer
                              Date: March 25, 2002





<PAGE>


                                SIGNATURES


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


                              PUNA SUGAR COMPANY, LIMITED



                              By:   Gailen J. Hull
                                    Vice President
                              Date: March 25, 2002


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



                              By:   Gary Nickele
                                    President and Director
                              Date: March 25, 2002



                              By:   Tamara G. Edwards
                                    Vice President
                              Date: March 25, 2002



                              By:   Peggy Sugimoto
                                    Vice President
                              Date: March 25, 2002



                              By:   Gailen J. Hull
                                    Vice President and
                                    Principal Accounting Officer
                              Date: March 25, 2002





<PAGE>


                                SIGNATURES


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


                              WAIKELE GOLF CLUB, INC.



                              By:   Gailen J. Hull
                                    Vice President
                              Date: March 25, 2002


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



                              By:   Gary Nickele
                                    Vice President and Director
                              Date: March 25, 2002



                              By:   Tamara G. Edwards
                                    President
                              Date: March 25, 2002



                              By:   Peggy Sugimoto
                                    Senior Vice President - Finance
                              Date: March 25, 2002



                              By:   Gailen J. Hull
                                    Vice President and
                                    Principal Accounting Officer
                              Date: March 25, 2002





<PAGE>


                               EXHIBIT INDEX

Exhibit No.       Exhibit
-----------       -------

  2.1             Agreement and Plan of Merger by and between Amfac/JMB
                  Hawaii, Inc. and Amfac/JMB Hawaii, L.L.C. dated as of
                  February 27, 1998. (7)

  3.1             Articles of Incorporation of Amfac Property Development
                  Corp.

  3.2             Amended and Restated By-Laws of Amfac Property
                  Developments Corp. (1)

  3.3             Articles of Incorporation of Amfac Property Investment
                  Corp. (1)

  3.4             Amended and Restated By-Laws of Amfac Property
                  Investment Corp. (1)

  3.5             Articles of Incorporation of Amfac Land Company, Limited
                  (1)

  3.6             Amended and Restated By-Laws of Kaanapali Estate Coffee,
                  Inc. (1)

  3.7             Articles of Incorporation of Amfac Agribusiness, Inc.
                  (1)

  3.8             Amended and Restated By-Laws of Kekaha Sugar Company,
                  Limited. (1)

  3.9             Articles of Association of Kekaha Sugar Company,
                  Limited. (1)

  3.10            Amended and Restated By-Laws of The Lihue Plantation
                  Company, Limited. (1)

  3.11            Articles of Association of The Lihue Plantation Company,
                  Limited (1)

  3.12            Amended and Restated By-Laws of Oahu Sugar Company,
                  Limited. (1)

  3.13            Articles of Association of Oahu Sugar Company,
                  Limited. (1)

  3.14            Amended and Restated By-Laws of Pioneer Mill Company,
                  Limited. (1)

  3.15            Articles of Association of Pioneer Mill Company,
                  Limited. (1)

  3.16            Amended and Restated By-Laws of Puna Sugar Company,
                  Limited. (1)

  3.17            Articles of Association of Puna Sugar Company,
                  Limited. (1)

  3.18            Amended and Restated By-Laws of H. Hackfeld & Co., Ltd.

  3.19            Articles of Association of H. Hackfeld & Co., Ltd. (1)

  4.1             Indenture, including the form of COLAs, among Amfac/JMB
                  Hawaii, Inc., its subsidiaries as Guarantors and
                  Continental Bank National Association, as Trustee (dated
                  as of March 14, 1989). (2)


<PAGE>


Exhibit No.       Exhibit
-----------       -------

  4.2             Amendment dated as of January 17, 1990 to the Indenture
                  relating to the COLAs. (2)

  4.3             The five year $66,000,000 loan with the Employees'
                  Retirement System of the State of Hawaii to Amfac/JMB
                  Hawaii, Inc. as of June 25, 1991. (3)

  4.4             Amendment to the $66,000,000 loan with the Employees'
                  Retirement System of the State of Hawaii to Amfac/JMB
                  Hawaii, Inc. as of April 18, 1996. (4)

  4.5             $10,000,000 loan agreement between Amfac Property
                  Development Corp. and City Bank at December 18, 1996.
                  (5)

  4.6             Amended and Restated $25,000,000 loan agreement between
                  Waikele Golf Club, Inc. Bank of Hawaii dated February 4,
                  1997. (6)

  4.7             Second Supplement to the Indenture dated as of March 1,
                  1998. (7)

  4.8             Third Supplement to the Indenture dated as of
                  October 16, 2000. (11)

  4.9             Promissory Note A, in replacement of Note #1, in the
                  amount of $28,370,074.56 between Amfac Hawaii LLC and
                  Fred Harvey Transportation Company dated December 29,
                  2000. (11)

  4.10            Promissory Note B, in replacement of Note #1, in the
                  amount of $68,059,328.34 between Amfac Hawaii LLC and
                  Fred Harvey Transportation Company dated December 29,
                  2000. (11)

  4.11            Amended and Restated Promissory Note in the amount of
                  $26,375,300 between Amfac Hawaii LLC and AF Investors
                  LLC dated December 29, 2000. (11)

  4.12            Amended and Restated Promissory Note in the amount of
                  $21,318,000 between Amfac Hawaii LLC and AF Investors
                  LLC dated December 29, 2000. (11)

  4.13            Amended and Restated Promissory Note in the amount of
                  $10,000,000 between Amfac Hawaii LLC and Northbrook
                  Corporation dated December 29, 2000. (11)

  4.14            Amended and Restated Promissory Note between The Lihue
                  Plantation Company, Limited and Northbrook Corporation
                  dated December 29, 2000. (11)

  4.15            Amended and Restated Promissory Note between The Lihue
                  Plantation Company, Limited and Northbrook Corporation
                  dated December 29, 2000. (11)

  4.16            Assignment of Loan Documents between Tobishima Pacific,
                  Inc. and 900 Investment Management, L.P. dated
                  September 29, 2000. (11)

  4.17            Assignment of Loan Documents between 900 Investment
                  Management L.P. and NB Realty Holdings-VI, Inc. dated
                  September 29, 2000. (11)

  4.18            Note Modification Agreement between Amfac Property
                  Investment Corp. and NB Realty Holdings-VI, Inc. dated
                  October 2, 2000. (11)


<PAGE>


Exhibit No.       Exhibit
-----------       -------

  4.19            Second Note Modification agreement between Amfac Hawaii
                  and NB Holdings-VI, Inc. dated December 31, 2000. (11)

 10.1             General Lease S-3821, dated July 8, 1964, by and between
                  the State of Hawaii and East Kauai Water Company, Ltd.
                  (1)

 10.2             Amended and Restated Power Purchase Agreement, dated as
                  of June 15, 1992, by and between The Lihue Plantation
                  Company, Limited and Citizens Utilities Company. (1)

 10.3             U.S. Navy Waipio Peninsula Agricultural Lease, dated
                  May 26, 1964, between The United States of America (as
                  represented by the U.S. Navy) and Oahu Sugar Company,
                  Ltd. (1)

 10.4             Amendment to the Robinson Estate Hoaeae Lease, dated
                  May 15, 1967, by and between various Robinsons, heirs of
                  Robinsons, Trustees and Executors, etc. and Oahu Sugar
                  Company, Limited amending and restating the previous
                  lease. (1)

 10.5             Amendment to the Campbell Estate Lease, dated April 16,
                  1970, between Trustees under the Will and of the Estate
                  of James Campbell, Deceased, and Oahu Sugar Company,
                  Limited amending and restating the previous lease. (1)

 10.6             Bishop Estate Lease No. 24,878, dated June 17, 1977, by
                  and between the Trustees of the Estate of Bernice Pauahi
                  Bishop and Pioneer Mill Company, Limited. (1)

 10.7             General Lease S-4229, dated February 25, 1969, by and
                  between the State of Hawaii, by its Board of Land and
                  Natural Resources and Pioneer Mill Company, Limited. (1)

 10.8             Honokohau Water License, dated December 22, 1980,
                  between Maui Pineapple Company Ltd. and Pioneer Mill
                  Company, Limited. (1)

 10.9             Water Licensing Agreement, dated September 22, 1980, by
                  and between Maui Land & Pineapple Company, Inc. and
                  Amfac, Inc. (1)

 10.10            Amfac Hawaii Tax Agreement, dated November 21, 1988
                  between Amfac/JMB Hawaii, Inc., and Amfac Property
                  Development Corp.; Amfac Property Investment Corp.;
                  Amfac Sugar and Agribusiness, Inc.; Kaanapali Water
                  Corporation; Amfac Agribusiness, Inc.; Kekaha Sugar
                  Company, Limited; The Lihue Plantation Company, Limited;
                  Oahu Sugar Company, Limited; Pioneer Mill Company,
                  Limited; Puna Sugar Company, Limited; H. Hackfeld & Co.,
                  Ltd.; and Waiahole Irrigation Company, Limited. (2)
                  Amfac-Amfac Hawaii Tax Agreement, dated February 21,
                  1989 between Amfac, Inc. and Amfac/JMB Hawaii, Inc. (2)
                  Services Agreement, dated November 18, 1988, between
                  Amfac/JMB Hawaii, Inc., and Amfac Property Development
                  Corp.; Amfac Property Investment Corp.; Amfac Sugar and
                  Agribusiness, Inc.; Kaanapali Water Corporation; Amfac
                  Agribusiness, Inc.; Kekaha Sugar Company, Limited; The
                  Lihue Plantation Company, Limited; Oahu Sugar Company,
                  Limited; Pioneer Mill Company, Limited; Puna Sugar
                  Company, Limited; H. Hackfeld & Co., Ltd.; and Waiahole
                  Irrigation Company, Limited and JMB Realty Corporation.
                  (2)


<PAGE>


Exhibit No.       Exhibit
-----------       -------

 10.11            Amfac-Amfac Hawaii Tax Agreement, dated February 21,
                  1989 between Amfac, Inc. and Amfac/JMB Hawaii, Inc. (2)

 10.12            Agreement Concerning Amfac - Amfac Hawaii Tax Agreement
                  by and among Amfac Hawaii LLC and Northbrook Corporation
                  dated November 30, 2000. (11)

 10.13            Tax Agreement by and among Northbrook Corporation and
                  Amfac Hawaii LLC dated December 29, 2000. (11)

 10.14            Contribution Agreement by and among Amfac Property
                  Investment Corp., Pioneer Mill Company, Limited,
                  Northbrook Corporation, AF Investors, LLC and Fred
                  Harvey Transportation Company dated November 27, 2000.
                  (11)

 10.15            Restructuring Agreement by and among Amfac Hawaii LLC,
                  and subsidiaries, Amfac Property Investment Corp.,
                  Northbrook Corporation, AF Investors, LLC, Fred Harvey
                  Transportation Company, Amfac Finance Limited
                  Partnership and NV Realty Holdings-VI, Inc. dated
                  December 29, 2000. (11)

 10.16            Services Agreement, dated November 18, 1988, between
                  Amfac/JMB Hawaii, Inc., and Amfac Property Development
                  Corp.; Amfac Property Investment Corp.; Amfac Sugar and
                  Agribusiness, Inc.; Kaanapali Water Corporation; Amfac
                  Agribusiness, Inc.; Kekaha Sugar Company, Limited; The
                  Lihue Plantation Company, Limited; Oahu Sugar Company,
                  Limited; Pioneer Mill Company, Limited; Puna Sugar
                  Company, Limited; H. Hackfeld & Co., Ltd.; and Waiahole
                  Irrigation Company, Limited and JMB Realty Corporation.
                  (2)

 10.17            Assignment and assumption agreement dated September 30,
                  1998, executed by TPI and APIC. (8)

 10.18            Assignment and Contribution Agreement effective
                  December 31, 1998 between Northbrook Corporation and
                  Amfac/JMB Hawaii, L.L.C. (9)

 10.19            Note Modification Agreement dated December 31, 1998
                  between Amfac/JMB Hawaii, L.L.C. and Fred Harvey
                  Transportation Company. (9)

 10.20            Purchase Agreement by and between Waikele Golf Club,
                  Inc., and Waikele Golf, LLC dated December 14, 2001.
                  (10)

 10.21            Loan Purchase Agreement by Bank of Hawaii, Amfac Hawaii,
                  LLC and Waikele Golf Club, Inc., dated December 14,
                  2001. (10)

 10.22            Amfac Hawaii, LLC's press release dated February 27,
                  2002, incorporated herein by reference to the Company's
                  Report for February 27, 2002 on Form 8-K (File No. 33
                  24180) dated March 8, 2002.

 10.23            Letter of Bank One Trust Company, N.A. dated March 11,
                  2002 to the Holders of the Amfac Hawaii, LLC Certificate
                  of Land Appreciation Notes due 2008 incorporated herein
                  by reference to the Company's Report for March 11, 2008
                  on From 8-K (File No. 33-24180) dated March 20, 2002.




<PAGE>


Exhibit No.       Exhibit
-----------       -------

 19.0.            $35,700,000 agreement for sale of C&H and certain other
                  C&H assets, to A&B Hawaii, Inc. in June 1993. (7)
                  Subsidiaries of Amfac/JMB Hawaii, Inc. (1) A copy of
                  pages 19, 41-45 and 51 of the Prospectus of the Company
                  dated December 5, 1988 (relating to SEC Registration
                  Statement on Form S-1 (as amended) File No. 33-24180)
                  and hereby incorporated by reference. (2) Pursuant to
                  Item 6.01 (b)(4) of Regulation SK, the registrant hereby
                  undertakes to provide the Commission upon its request a
                  copy of any agreement with respect to long-term
                  indebtedness of the registrant and its consolidated
                  subsidiaries that does not exceed 10 percent of the
                  total assets of the registrant and its subsidiaries on a
                  consolidated basis.

      (1)   Previously filed as exhibits to the Company's Registration
Statement of Form S-1 (as amended) under the Securities Act of 1933 (File
No. 33-24180) and hereby incorporated by reference.

      (2)   Previously filed as exhibits to the Company's Form 10-K report
under the Securities Act of 1934 (File No. 33-24180) filed on March 27,
1989 and hereby incorporated by reference.

      (3)   Previously filed as exhibits to the Company's Form 10-Q report
under the Securities Act of 1934 (File No. 33-24180) filed on August 13,
1991 and hereby incorporated by reference.

      (4)   Previously filed as an exhibit to the Company's Form 10-Q
report under the Securities Act of 1934 (File No. 33-24180) filed May 13,
1996 and hereby incorporated by reference.

      (5)   Previously filed as exhibit to the Company's Form 10-K report
under the Securities Act of 1934 (File No. 33-24180) filed March 21, 1997
and hereby incorporated by reference.

      (6)   Previously filed as exhibit to the Company's Form 10-Q report
under the Securities Act of 1934 (File No. 33-24180) filed May 15, 1996 and
hereby incorporated by reference.

      (7)   Previously filed as exhibit to the Company's Form 8-K report
under the Securities Act of 1934 (File No. 33-24180) filed March 3, 1998
and hereby incorporated by reference.

      (8)   Previously filed as exhibit to the Company's Form 10-Q report
under the Securities Act of 1934 (File No. 33-24180) filed November 12,
1998 and hereby incorporated by reference.

      (9)   Previously filed as exhibit to the Company's Form 10-K report
under the Securities Act of 1934 (File No. 33-24180) filed March 8, 1999
and hereby incorporated by reference.

      (10)  Previously filed as exhibit to the Company's Form 8-K report
under the Securities Act of 1934 (File No. 33-24180) filed December 28,
2001 and hereby incorporated by reference.

      (11)  Previously filed as exhibit to the Company's Form 10-K report
under the Securities Act of 1934 (File No. 33-24180) filed March 30, 2001
and hereby incorporated by reference.

      No annual report or proxy material for 2001 was sent to the COLA
holders of the Company. An annual report will be sent to the COLA holders
subsequent to this filing.