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, 2003                    Commission File Number #0-50273


                              KAANAPALI LAND, LLC
            (Exact name of registrant as specified in its charter)


        Delaware                               01-0731997
(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  312-915-1987

Securities to be registered pursuant to Section 12(b) of the Act:

                                           Name of each exchange
      Title of each class                  on which each class
      to be so registered                  is to be registered
      -------------------                  ---------------------

            N/A                                    N/A

Securities registered pursuant to Section 12(g) of the Act:

             Limited Liability Company Interests (Class A Shares)
             ----------------------------------------------------
                               (Title of Class)

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 (the "Act") 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 ]

Indicate by check mark whether the registrant is an accelerated filer (as
defined in Rule 12b-2 of the Act).  Yes [   ]   No [ X ]

State the aggregate market value of the voting and non-voting common equity
held by non-affiliates computed by reference to the price at which the
common equity was last sold, or the average bid and asked price of such
common equity, as of the last business day of the registrant's most
recently completed second fiscal quarter.  Not applicable.

Indicate by check mark whether the registrant has filed all documents and
reports required to be filed by Section 12, 13 or 15(d) of the Securities
Exchange Act of 1934 subsequent to the distribution of securities under a
plan confirmed by a court.    Yes [ X ]   No [   ]

Documents incorporated by reference:  None


<PAGE>


                               TABLE OF CONTENTS



                                                               Page
                                                               ----
PART I

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

Item 2.       Properties . . . . . . . . . . . . . . . . . . .   11

Item 3.       Legal Proceedings. . . . . . . . . . . . . . . .   11

Item 4.       Submission of Matters to a Vote of
              Security Holders . . . . . . . . . . . . . . . .   19


PART II

Item 5.       Market Price of and Dividends on the
              Registrant's Common Equity and
              Related Stockholder Matters. . . . . . . . . . .   19

Item 6.       Financial Information. . . . . . . . . . . . . .   20

Item 7.       Management's Discussion and
              Analysis of Financial Condition and
              Results of Operations. . . . . . . . . . . . . .   21

Item 7A.      Quantitative and Qualitative Disclosures
              about Market Risk. . . . . . . . . . . . . . . .   26

Item 8.       Financial Statements and
              Supplementary Data . . . . . . . . . . . . . . .   27

Item 9.       Changes in and Disagreements
              with Accountants on Accounting
              and Financial Disclosure . . . . . . . . . . . .   60

Item 9A.      Controls and Procedures. . . . . . . . . . . . .   60


PART III

ITEM 10.      Managers and Executive Officers
              of the Registrant. . . . . . . . . . . . . . . .   60

Item 11.      Executive Compensation . . . . . . . . . . . . .   63

Item 12.      Security Ownership of Certain
              Beneficial Owners and Management . . . . . . . .   64

Item 13.      Certain Relationships and
              Related Transactions . . . . . . . . . . . . . .   65

Item 14.      Principal Accountant Fees and Services . . . . .   65


PART IV

Item 15.      Exhibits, Financial Statement Schedules,
              and Reports on Form 8-K. . . . . . . . . . . . .   66


SIGNATURES     . . . . . . . . . . . . . . . . . . . . . . . .   68




                                       i


<PAGE>


                                    PART I

ITEM 1.  BUSINESS

     Kaanapali Land, LLC ("Kaanapali Land"), a Delaware limited liability
company, is the reorganized entity resulting from the Joint Plan of
Reorganization of Amfac Hawaii, LLC (now known as KLC Land Company, LLC
("KLC Land")), Certain of its subsidiaries (together with KLC Land, the
"KLC Debtors") and FHT Corporation ("FHTC" and, together with the KLC
Debtors, the "Debtors") under Chapter 11 of the Bankruptcy Code, dated June
11, 2002 (as amended, the "Plan").  As indicated in the Plan, Kaanapali
Land has elected to be taxable as a corporation.  The Debtors had filed
their petitions for reorganization under Chapter 11 on February 27, 2002
(the "Petition Date") in the United States Bankruptcy Court for the
Northern District of Illinois, Eastern Division (the "Bankruptcy Court"),
which petitions were consolidated into a single joint proceeding by the
Bankruptcy Court (the "Reorganization Case").

     The principal goal of the Plan was to address the Debtors' debt
burdens so that the Debtors could emerge from Chapter 11 with a viable
capital structure and with the resources necessary to operate their land
development business.  The Plan achieved this goal by converting certain
indebtedness and other liabilities of the Debtors into new equity of
Kaanapali Land (to the extent such creditors did not elect an available
cash distribution option).  Another goal of the Plan was to secure
additional liquidity for the Debtors to help fund future operations.  The
Plan achieved this goal through the Merger of FHTC with Northbrook
Corporation ("Northbrook"), which made the assets and liquidity of
Northbrook available to the Debtors to help fund their land development
business.  FHTC was the surviving entity in such merger, and shortly
thereafter was in turn merged into Kaanapali Land pursuant to the Plan.

     The Plan was confirmed by the Bankruptcy Court by orders dated
July 29, 2002 and October 30, 2002 (collectively, the "Order") and became
effective November 13, 2002 (the "Plan Effective Date").  Kaanapali Land
continues to work toward completion of the various requirements of the Plan
and to implement the restructuring transactions that are contemplated to be
effected under the Plan, including, among other things, the resolution of
all outstanding claims and distributions on all claims that are allowed
under the Plan.  All material requirements and transactions that the
Company must implement under the Plan are described herein.  References in
this Form 10-K to Kaanapali Land or the Company for dates on or after the
Plan Effective Date are to the entity surviving the Reorganization Case and
for dates before the Plan Effective Date are to predecessor entities,
unless otherwise specified.

     KLC Land (formerly known as Amfac Hawaii, LLC and, previously,
Amfac/JMB Hawaii, LLC) is a Hawaii limited liability company that is a
wholly-owned subsidiary of Kaanapali Land. KLC Land and Kaanapali Land have
continued the businesses formerly conducted by KLC Land and its
subsidiaries prior to the bankruptcy, although some of such businesses have
been discontinued or reduced in scope as described herein.

     Northbrook was formed in 1978 as a holding company to facilitate the
purchase of a number of businesses, generally relating to short line
railroads, rail car leasing and light manufacturing. Over 90% of the stock
of Northbrook was purchased by persons and entities affiliated with JMB
Realty Corporation, through a series of stock purchases in 1987 and 1988.
One of Northbrook's subsidiaries (since merged into Northbrook) purchased
the stock of Amfac, Inc. ("Amfac"), in 1988, pursuant to a public tender
offer, and thus Amfac became an indirect subsidiary of Northbrook at such
time. As a consequence of the merger of Amfac into Northbrook in 1995, KLC
Land, FHTC and Amfac's other direct subsidiaries became direct subsidiaries
of Northbrook. All existing shareholders of Northbrook contributed their
shares to Pacific Trail Holdings, LLC ("Pacific Trail") in 2000. Pursuant
to the Plan, Northbrook was merged into FHTC and FHTC was thereafter merged
into Kaanapali Land in November  2002.


<PAGE>


     Kaanapali Land's subsidiaries include the Debtors as reorganized under
the Plan, certain subsidiaries of KLC Land that were not debtors (the "Non-
Debtor KLC Subsidiaries") and other former subsidiaries of Northbrook
(collectively with Kaanapali Land, all the Reorganized Debtors, the Non-
Debtor KLC Subsidiaries and such other subsidiaries are referred to herein
as the "Company").  Kaanapali Land will pursue its businesses utilizing the
assets of the KLC Debtors and the Non-Debtor KLC Subsidiaries and the
assets formerly owned by Northbrook and its other subsidiaries.

     The Company operates in three primary business segments:  (i) Land
Development, Management, Investment and Sales, (ii) Agriculture and (iii)
Golf.  As discussed below, of the foregoing, the Company's primary business
is Land Development, Management, Investment and Sales. The Company operates
through a number of subsidiaries, each of which is 100% owned directly or
indirectly by Kaanapali Land, LLC.

     SUMMARY OF PLAN

     Material aspects of the history and business of the Company, the Plan,
the procedures for consummating the Plan and the risks attendant thereto
were set forth in a Second Amended Disclosure Statement With Respect to
Joint Plan of Reorganization of Amfac Hawaii, LLC, Certain of Its
Subsidiaries and FHT Corporation Under Chapter 11 of the Bankruptcy Code,
dated June 11, 2002 (the "Disclosure Statement").  The Disclosure Statement
and the Plan are each filed as Exhibits to Form 10 filed on May 1, 2003 and
incorporated herein by reference.

     All claims against the Debtors were deemed discharged as of the Plan
Effective Date, provided that creditors with allowed claims became entitled
to receive distributions under the Plan as of that date and provided that
the Plan does not impair any claims of taxing authorities.  The time for
filing proofs of claim relating to all classes of claims has expired,
including the period for those whose executory contracts were rejected by
the Debtors.  Therefore, all claims that may be asserted by the creditors
against the Debtors relative to amounts due on pre-petition obligations as
of the Plan Effective Date, with the exception of a potential claim of the
Internal Revenue Service ("IRS") described below, are known.

     The Limited Liability Company Agreement of Kaanapali Land (the "LLC
Agreement") provides for two classes of membership interests, "Class A
Shares" and "Class B Shares", which have substantially identical rights and
economic value under the LLC Agreement; except that holders of Class A
Shares are represented by a "Class A Representative" who must approve
certain transactions proposed by Kaanapali Land before they can be
undertaken.  The Class A Representative is further entitled to receive
certain reports from the Company and meet with Company officials on a
periodic basis.  Reference is made to the LLC Agreement for a more detailed
discussion of these provisions. Class B Shares are held by Pacific Trail
Holdings, LLC ("Pacific Trail") and various entities and individuals that
are affiliated with Pacific Trail.  Class A Shares were issued under the
Plan to claimants who had no such affiliation.  Reference is made to Item
11 below for a further explanation of the LLC Agreement and the rights and
duties of the Class A Representative.

     As of December 31, 2003, Kaanapali Land has distributed or has
authorized its distribution agent to distribute, in the aggregate,
approximately $1,804,000 in cash and approximately 159,761 Class A Shares
on account of the claims that have been made, and expects that ultimately
an additional approximately $27,000 in cash and approximately 16,000
Class A Shares will be distributed on account of such remaining claims,
assuming that all holders of such claims comply with the requirements for
distribution.



<PAGE>


     Kaanapali Land has issued all Class B Shares required to be issued
under the Plan to Pacific Trail and those entities and individuals who are
affiliated with Pacific Trail that are entitled to Class B Shares.  As a
consequence, Kaanapali Land has approximately 1,631,513 Class B Shares
outstanding.

     A number of claims, primarily relating to matters that were in
litigation on the Petition Date, or personal injury or employee matters
where litigation was threatened, have not been resolved and are being
disputed by the Company.  The Company has petitioned the Bankruptcy Court
to dismiss such claims.  Even if the Bankruptcy Court ruled that all such
claims were allowed claims entitled to distribution, which the Company
believes is highly unlikely, the maximum cash exposure to the Company
thereon is not material and the maximum exposure for the issuance of
additional Class A Shares is approximately 1,281 shares.

     The IRS filed a claim in the bankruptcy proceedings in the aggregate
amount of approximately $20.6 million for taxes, interest and penalties
related to the years 1998-2000.  However, the Company has entered into a
stipulation with the IRS whereby the IRS has withdrawn its claim due to the
fact that the Plan leaves the IRS unimpaired relative to any taxes that may
be due.  As a result of the examination relative to the years 1998-2000 the
IRS has proposed adjustments which in the aggregate reflect deficiencies in
taxes of approximately $7.4 million (before interest).  The Company is in
the process of reviewing the proposed adjustments and intends to contest
the deficiency.  However, there can be no assurance that the Company will
be successful in such contest and, although the Company has reserved for
potential tax liabilities on its financial statements, to the extent that
the Company is unsuccessful in defending against any such claims, the
amount for which the Company could be liable could be material.

     KLC Land is the direct subsidiary of Kaanapali Land through which the
Company conducts substantially all of its operations, except those relating
to the Waikele Golf Course whose operations are conducted by another direct
subsidiary of Kaanapali Land.  KLC Land conducts all of its business
through various subsidiaries. Those with remaining assets of significant
net value include KLC Holdings, LLC ("KLC") and Kaanapali Development Corp.
("KDC") and certain limited liability companies owned 50% each by KLC and
KDC.

     The Company has completed certain restructuring transactions and
intends to complete others, as permitted by the Plan, for the purpose of
simplifying the corporate structure and administrative organization of the
Company.  The general impact of such transactions will be to reduce the
number of subsidiaries of Kaanapali Land and to move assets into those
entities that make the most sense for administrative reasons or to
facilitate future transactions with third parties.  Other than the
dissolution of inactive subsidiaries, the Company has (i) contributed its
remaining North Beach lots on Maui to newly formed limited liability
companies, 50% owned each by KLC and KDC, (2) obtained modest cash proceeds
for the redemption of its indirect interest in the majority owner of APIC,
and (3) merged Oahu Sugar Company, Limited into a newly-formed limited
liability company.  Subsequent to the consummation of the ERS settlement
during the third quarter of 2003 (as described below), the Company merged
PMCo into a newly formed limited liability company and transferred PMCo's
remaining Kaanapali lands to KDC in order that all lands relating to the
Kaanapali 2020 development (or adjacent thereto) are held for development
or sale by KDC.  It is expected that further restructuring transactions
will be undertaken over time as entities wind up their affairs or are
otherwise no longer necessary to the ongoing business of the Company.
These transactions will likely be in the form of dissolutions or mergers.



<PAGE>


     LAND DEVELOPMENT, MANAGEMENT, INVESTMENT AND SALES

     KAANAPALI 2020 DEVELOPMENT PLANS.  "Kaanapali 2020", the comprehensive
plan for approximately 4,000 acres of land in the Kaanapali/Honokawai area
on the west side of Maui, Hawaii is Kaanapali Land's principal entitlement
focus.  The development work is being done by KDC, which owns substantially
all of the land within the Kaanapali 2020 boundaries.  Currently, Kaanapali
Land is preparing applications 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 is located toward the top of mountain ridges and
in gulches and is classified as conservation land, which precludes
development.  However, this 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 process of determining market and project feasibility will be
ongoing with pursuit of entitlements.  If KDC obtains the necessary
entitlements, it intends, if market and project feasibility studies justify
it, to develop some or all of the project (either alone or through one or
more joint ventures with strategic partners) and/or sell some or all of the
entitled parcels.  KDC will need to apply for subdivision of the land in
order to develop or sell the parcels.  As a condition to subdivision of the
land, the county will generally require the completion or bonding of
certain infrastructure, including roads, water and sewer facilities, each
of which will require their own building and grading permits.

     For the last few years, KDC has been working with the West Maui
community to involve the community in plans for 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 KDC to create a vision for the future of the
Kaanapali lands.  This development strategy has been used in several
communities, including the successful Weston, Florida planned community
that has recently been substantially completed by an affiliate of Kaanapali
Land.  Management is optimistic that a development plan can be implemented
with the support of the community that meets Kaanapali Land's long-term
financial objectives.

     The Kaanapali 2020 development plan is currently at a predevelopment
stage.  The development plan is now in the process of being finalized to
the extent necessary to commence the entitlement process, and it is
expected that the aforementioned applications will be submitted during the
second quarter of 2004.  However, these applications are preliminary in
nature as KDC has been advised by the applicable government agencies that
their submittal is a prerequisite to the review and approval of the
environmental impact statement ("EIS") that is included as an exhibit.
Although KDC does not believe as a legal matter that submission of the
applications is a necessary prerequisite to the submittal and approval of
the EIS, KDC has decided to proceed as requested by such agencies.  Thus,
it is expected that later amendments will be submitted as KDC continues to
refine its market and feasibility studies for the project.  Approximately
990 acres of land have been identified for development expected to contain
approximately 3,000 residential units along with commercial, retail and
recreational assets.  The balance of the land is expected to remain open
space or agricultural.  Over the next few years, the Company expects to
seek the necessary approvals to pursue its business strategy.



<PAGE>


     PROJECT PLANNING AND DEVELOPMENT.  The Company's real estate
development approach, for land which it holds for development rather than
investment, is designed to enhance the value of its properties in phases.
In most instances, the development process begins with the preparation of
market and feasibility studies that consider potential uses for the
property, as well as costs associated with the development of those uses.
The studies consider factors such as location, physical characteristics,
demographic patterns, anticipated absorption rates, transportation,
development costs and regulatory and environmental requirements.

     The Company expects to prepare a land plan that is consistent with the
findings of the studies and then to commence the process of applying for
the entitlements necessary to permit the development of the property in
accordance with the land plan.  The length and difficulty of obtaining the
requisite entitlements, as well as the cost of complying with any
conditions attached to the entitlements, are significant factors in
determining the viability of the Company's development projects.
Applications for entitlements include applications for state land use
reclassification, county community plan amendments and changes in zoning.

     The entitlement process can involve substantial amounts of time and
expense.  The applications generally require the submission of
comprehensive plans that involve the use of consultants and other
professionals.  Parties affected by the development can challenge the
applications at the time of submission, which may substantially delay the
process.  Generally, once the applications are deemed acceptable, the
various governing agencies involved in the entitlement process commence
consideration of the requested entitlements.  The applicable agencies often
impose conditions, which may be costly to the developer, on any approvals
of the entitlements.  These conditions may include the requirement that the
Company dedicate land for public use, fund infrastructure improvements, pay
impact fees and provide affordable housing in the area of the development.
The Company may also be subject to conditions that the entitlement will be
revoked if the development of the project does not take place within a
particular time period.  If there is a significant change in the land
plans, if the governmental requirements change, or if market feasibility
conditions change subsequent to obtaining the county approvals, the Company
may be required to apply for amendments to the existing entitlement.  The
amendment process can also be lengthy and costly, and it may result in
additional conditions attaching to any approvals.

     If the Company is not successful in obtaining the necessary
entitlements to develop the property as originally planned, the Company may
be required to revise its land plan.  In that case, development of the land
in accordance with revised plans may not be as economically viable as the
original land plan.  There can be no assurance that all necessary approvals
will be obtained, that modifications to those plans will not require
additional approvals, or that such additional approvals will be obtained,
nor can there be any assurance as to the timing of such events.

     OAHU SUGAR MILL SITE DEVELOPMENT.  In 1995, the Company closed the
Oahu Sugar Company plantation.  The former sugar mill site, owned by a
subsidiary of Kaanapali Land, was comprised of approximately 15 acres and
is located in Waipahu, approximately 10 miles west of downtown Honolulu,
near Pearl Harbor.  The subsidiary had received county zoning approval for
a light industrial subdivision on the property.  The Company had expected
to market this property in bulk after addressing certain identified
environmental issues.  However, sale of the property was not expected to
yield significant net cash proceeds to the Company because the property was
encumbered by liens totalling approximately $3.4 million, including accrued
interest, as of December 12, 2003 pursuant to bank mortgage financing in an
amount which approximates the anticipated value of the property.  The
lender filed a complaint for foreclosure of the property after prolonged
negotiations for extension of the financing.  In December 2003, a
settlement was reached with the lender which resulted in the Company no
longer having an ownership interest in the property in consideration of the
Company being released from its obligations relating to the mortgage and
accrued interest encumbering the property.


<PAGE>


     LAND MANAGEMENT AND SALES.  Apart from the golf course property
(discussed below) and the Kaanapali 2020 lands, the Company owns
approximately 390 acres of remaining land.  The site of the Pioneer Mill
sugar mill that was closed in 1997 ("Pioneer Mill Site") located in Lahaina
and owned by a subsidiary of the Company, is approximately 19.5 acres and
is zoned for industrial use.  Pioneer Mill also owns several parcels, known
collectively as the "Wainee Lands", which are located in Lahaina south of
the mill site.  The Wainee Lands include approximately 235 acres and are
classified and zoned for agricultural use.  However, the Company believes
that certain portions of the Wainee Lands might be developed for a number
of uses compatible with the close proximity of the Wainee Lands to the
Lahaina city-center, including both affordable and market housing and
certain recreational and service uses, once the property is reclassified
and rezoned.  However, the Company is currently considering several options
for the Wainee Lands.  The Company also owns less than 100 acres of
miscellaneous land parcels located on the Islands of Kauai, Maui and Oahu.
These miscellaneous parcels primarily include former sugar mill sites,
other land associated with now-closed sugar growing and processing
operations and water-related assets.  It is not expected that upon sale
these miscellaneous parcels will yield any significant cash proceeds to the
Company.

     AGRICULTURE

     HISTORIC OPERATIONS.  A significant portion of the Company's revenues
were formerly derived from agricultural operations primarily consisting of
the cultivation, milling and sale of raw sugar.  The last remaining sugar
plantation of the Company, owned by a subsidiary of Kaanapali Land was shut
down at the end of 2000.  In September 2001, the Company also ceased its
coffee operations, which were owned by a subsidiary of Kaanapali Land.  The
Company liquidated its remaining inventory of coffee beans and is in the
process of liquidating its mill equipment.  The Company leased to a third
party portions of the Kaanapali 2020 land on which the coffee trees are
located for the purpose of continuing agricultural coffee operations on
such land.  The lessee is in the process of purchasing the Company's coffee
mill equipment which should be completed during either the first or second
quarter of 2004.  Most sugar mill equipment with significant value has
already been sold.

     SEED CORN OPERATIONS.  The Company's seed corn operations are located
on former Maui sugar lands that are now part of the Kaanapali 2020 area.
The Company earns modest income under a contract with Monsanto Seed Company
that generates approximately $1.2 million of annual revenue, to grow seed
corn according to Monsanto's specifications.  In addition to generating
such income, this operation is politically advantageous, because the
cultivated land helps control dust and soil erosion and keeps the fields
green, to the benefit of the local community.  The Company may seek to
expand this operation if it can find ready markets for their products and
it is profitable to do so.  There can be no assurance that any expansion
will occur or that current operations will remain profitable.  The Company
and Monsanto have recently renewed these seed corn contracts on terms that
are similar to the previous agreement.

     GOLF

     The Company owns the golf course land and improvements and is
responsible for the management and operation of an 18-hole golf course
known as the Waikele Golf Club on Oahu.  The assets and operations of the
Waikele Golf Club represent all of the golf segment for purposes of
business segment information.  The Waikele Golf Course operates at a modest
level of profit after debt service.  Substantial improvements in local
economic conditions and the Hawaiian tourism industry would be necessary
for the Company to realize significant net cash proceeds (after debt
service) from this business segment.  There can be no assurance that such
improvements will occur in the near term.



<PAGE>


     Other golf courses, known as the Royal Kaanapali Golf Courses
("RKGC"), are on Maui.  The RKGC were owned by Amfac Property Investment
Corp. ("APIC"), a corporation that is approximately 16.7% owned by two
subsidiaries of Kaanapali Land and 83.3% owned by AF Investors, LLC
("AFI"), an affiliate of Kaanapali Land in which Kaanapali Land has no
direct or indirect interest.  APIC, and with respect to certain specified
limited amounts, two other subsidiaries of the Company were borrowers under
a $66 million loan made by the Employees' Retirement System of the State of
Hawaii ("ERS") in 1991.  The loan, which as of September 9, 2003 had a
balance of approximately $83 million, is secured by the RKGC (and certain
adjacent lands owned by APIC).  All of APIC's assets are subject to the
loan.  The loan matured in June 2001 and was not extended, despite efforts
of the borrowers to obtain such an extension as described below.

     The borrowers previously engaged in settlement negotiations with ERS
since 2000, which negotiations have resulted in the execution of a
definitive settlement agreement (the "ERS Settlement Agreement") in March
2003.  The ERS Settlement Agreement was consummated during the third
quarter of 2003 which resulted in the Company having no further ownership
interests in or obligations related to the RKGC.

     For a description of financial information by segment, please read
Note 10 to the attached consolidated financial statements, which
information is incorporated herein by reference.

     SIGNIFICANT ASSET SALES

     There are strategic land sales that the Company has consummated or
that may occur based on options held by third parties.  These transactions
were generally pursued in order to raise additional cash that would enhance
the Company's ability to fund the Kaanapali 2020 development.  No further
significant bulk land sales are currently contemplated by the Company.

     NORTH BEACH.  Prior to the sale of Lots 2 and 4 in 2003, the Company
owned three beachfront lots that total approximately 62 developable acres,
commonly known as Lots 2, 3 and 4. All three lots are zoned for hotel
development.  In December 2000, the Company sold a fourth parcel, the 14-
acre Kaanapali Ocean Resort ("KOR") site known as Lot 1, to SVO Pacific,
Inc. ("SVO"), an affiliate of Starwood Hotels and Resorts, which is in the
process of developing time-share units on the property.  In addition, SVO
received an option to purchase Lot 2, which contains approximately 11.5
acres.  In January 2003, the option for Lot 2 was exercised and the sale
closed on January 31, 2003, at which time a non-refundable payment was made
for $2 million (before closing costs and prorations).  The remainder of the
purchase price is reflected by a note secured by a mortgage due March 31,
2004 for approximately $14.4 million, approximately one-half of which is
subject to possible later adjustment based on the number of units approved
for development pursuant to the Special Management Area permit that SVO is
seeking for the parcel.  On August 5, 2003, the Company closed the sale of
Lot 4 (an approximately 40 acre site) for a purchase price of $33 million;
of which $16 million was paid in cash (before closing costs and prorations)
at closing and the balance was delivered in the form of a promissory note
in the original principal amount of $17 million.  The promissory note is
secured by a first mortgage encumbering Lot 4, and it is due on the earlier
to occur of (i) August 4, 2006, or (ii) sixty days following the issuance
by the County of Maui of certain entitlements for the development of any
portion of Lot 4.  At closing, the Company also granted to the purchaser an
option to purchase Lot 3, which expires in August 2005.  The option price
consists of a base price of $22.5 million, which is subject to potential
adjustment upward depending on the number of units permitted to be
developed on Lot 3 and Lot 4, and also an adjustment for inflation if the
option is exercised after January 1, 2005.  There can be no assurance that
such option will be exercised or the timing thereof.



<PAGE>


     PARCEL 22/23.  Kaanapali Golf Estates ("KGE") is a residential
community that is part of the Kaanapali Beach Resort in West Maui.  KGE has
been subdivided into several parcels that have been sold to residential
developers.  There was one remaining parcel available for sale in the
residential community called "Parcel 22/23".  Parcel 22/23 includes
approximately 110 acres.  In December 2003, the Company closed on its sale
of Parcel 22/23 to a third party for a purchase price of $12.5 million.
Approximately $11.5 million was received in cash at closing and the Company
deposited approximately $1 million into an escrow account.  In conjunction
with the sale, the Company has agreed to pay a portion of the cost of
certain roadway improvements and pay the costs of the design and
construction of an underground sewer line and drainage construction as well
as the cost of certain other improvements.  Such escrowed funds will fund
the Company's portion of the costs associated with the road improvements
and the sewer and drainage costs.  The Company is responsible for costs in
excess of the escrowed funds associated with the road improvements and
sewer and drainage costs and has accrued approximately $3 million as an
estimate of such costs.

     OTHER MAUI PROPERTY ASSETS

     The company has certain other property assets on Maui that are not
considered part of Kaanapali 2020.  The most significant of such assets is
the Pioneer Mill Site.

     PIONEER MILL SITE.  The Company owns approximately 19 acres in
Lahaina, known as the Pioneer Mill Site, which is zoned for industrial
development.  This was the former site of Pioneer Mill's sugar and coffee
mills on Maui.  Pioneer Mill is currently evaluating strategic options
relating to this site, but has in the interim entered into a contract for
the demolition of the improvements on the Pioneer Mill Site.  It is
anticipated that such demolition will cost approximately $2.5 million and
that the work will be completed during the second half of 2004.  Pioneer
Mill is engaged in an ongoing cleanup arising out of the discovery of
petroleum contamination found at the Pioneer Mill site.  The Pioneer Mill
site has been assigned a high priority by the Hawaii Department of Health
("HDOH") and the HDOH has shown an interest in the environmental conditions
relating to or arising out of the former operations of Pioneer Mill.  These
issues will have to be addressed as they are raised.  Pioneer Mill has
received a report on the results of environmental testing conducted on the
site by the United States Environmental Protection Agency and HDOH.
Pioneer Mill is currently making arrangements to address the issues
evidenced by the test results, which are not currently believed to be
material to the Company.  EPA has designated HDOH as the oversight agency
for Pioneer Mill.

     EMPLOYEES.

     At March 1, 2004, Kaanapali Land and its subsidiaries employed
approximately 92 persons, more than half of whom are employed at the
Waikele Golf Course.  Certain corporate services are provided by Pacific
Trail and its affiliates.  Kaanapali Land reimburses for these services
including overhead at cost.



<PAGE>


     TRADEMARKS AND SERVICE MARKS.

     The Company maintains a variety of trademarks and service marks that
support each of its business segments.  These marks are filed in various
jurisdictions, including the United States Patent and Trademark Office, the
State of Hawaii Department of Commerce and Consumer Affairs and foreign
trademark offices.  The trademarks and service marks protect, among other
things, the use of the term "Kaanapali" and related names in connection
with the developments in the vicinity of the Kaanapali Resort area on Maui,
the various trade names and service marks obtained in connection with the
Company's coffee operations and the use of the term "Waikele" in connection
with the Waikele golf course and related developments.  Also protected are
certain designs and logos associated with the names protected.  Certain
marks owned by the Company have been licensed to third parties, however,
the income therefrom is not material to the Company's financial results.
To the extent deemed advantageous in connection with the Company's ongoing
businesses, to satisfy contractual commitments with respect to certain
marks or where the Company believes that there are future licensing
opportunities with respect to specific marks, the Company intends to
maintain such marks to the extent necessary to protect their use relative
thereto.  The Company also intends to develop and protect appropriate marks
in connection with its future land development activities.

     MARKET CONDITIONS AND COMPETITION.

     There are a number of factors that have negatively impacted Kaanapali
Land's development and land sale activities, including 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, and 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.

     The Hawaii economy experienced a downturn beginning in late 1990 after
the initial 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 and its recovery was slow and incomplete.  The
severe negative impact of the September 11, 2001 terrorist attacks on
tourism and investment, although primarily experienced on Oahu, to a lesser
extent, further exacerbated the problems.

     Maui's real estate market has experienced improvement during 2003.
The areas of primary and secondary residential homes, condominiums and time
share units have been relatively strong compared to other parts of the
economy and sales prices during the past couple years have approximated
those experienced in the early and mid-1990's, but prices are still at
levels below the late 1980's and below replacement cost of many of the
properties.  Despite these improvements, the real estate market, and
especially the market for unimproved land, has not achieved the levels
experienced during the late 1980's.  There can be no assurance that the
recent recovery of Maui's real estate market can be sustained.

     There are several developers, operators, real estate companies and
other owners of real estate that compete with the Company in its land
development business on Maui, many of which have greater resources.  The
number of competitive properties in a particular market could have a
material adverse effect on the Company's success in its development
operations.

     The golf course operated by the Company competes with several other
golf courses located in its proximity and with other entertainment and
tourist activities.  Competition in the agriculture business segment
affects the prices the Company may obtain for the land and other assets it
leases to third parties for the production of agricultural products.



<PAGE>


     GOVERNMENT REGULATIONS AND APPROVALS

     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, Kaanapali Land is preparing applications 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 expected to be part of obtaining the entitlements for the remaining
land.  The Kaanapali 2020 development plan is currently at a predevelopment
stage.  First, market and feasibility studies must be completed.  If they
indicate that there is appropriate market demand and economic feasibility,
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 possible or potential 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.

     ENVIRONMENTAL MATTERS.

     The Company is subject to environmental and health safety laws and
regulations related to the ownership, operation, development and
acquisition of real estate.  Under those laws and regulations, the Company
may be liable for, among other things, the costs of removal or remediation
of certain hazardous substances, including asbestos-related liability.
Those laws and regulations often impose liability without regard to fault.
The Company is not aware of any environmental condition on any of its
properties which is likely to have a material adverse effect on its
consolidated financial position or results of operations; however, no
assurance can be given that any such condition does not exist or may not
arise in the future.  Reference is made to Item 3. Legal Proceedings for a
description of certain legal proceedings related to the environmental
conditions at the Pioneer Mill and Oahu Sugar sites.




<PAGE>


ITEM 2.  PROPERTIES

     LAND HOLDINGS.

     The major real properties owned by the Company are described under
Item 1. Business.

     MAUI.

     As of December 31, 2003, the Company owned approximately 4,900 acres
of land on the island of Maui, most of which was classified as agricultural
land or conservation land for State and County purposes. All of the
Company's Maui land holdings are located in West Maui near the Lahaina and
the Kaanapali Beach Resort areas.  Included in this acreage is
approximately 19.7 acres of land at Lahaina that contain the former Pioneer
Mill sugar mill, closed in 1999, and the coffee mill operations of
Kaanapali Estate Coffee, Inc., which has wound up its affairs.

     OTHER PROPERTY.

     In addition to the real property discussed above, the Company also
owns less than 100 acres of miscellaneous parcels located on the islands of
Kauai and Oahu, consisting principally of two sugar mills on Kauai, 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.  The Lihue power plant continued
to operate pursuant to a modified agreement with the local electric
utility, through the end of 2002.  At this time, no commercial operations
are being coordinated at either facility and it is not expected that the
sale (either in bulk or in pieces) will yield any significant proceeds to
the Company.


ITEM 3.  LEGAL PROCEEDINGS

     Material legal proceedings of the Company are described below.  Unless
otherwise noted, the parties adverse to the Company in the legal
proceedings described below have not made a claim for damages in a
liquidated amount and/or the Company believes that it would be speculative
to attempt to determine the Company's exposure relative thereto, and as a
consequence believes that an estimate of the range of potential loss cannot
be made.  In proceedings filed prior to the Petition Date where a Debtor is
a defendant, such proceedings were stayed as against such Debtor by the
filing of the Reorganization Case.  Those proceedings may now continue
since the Plan Effective Date has occurred so long as the plaintiffs
therein filed timely claims under the Plan.  However, any judgments
rendered therein would be subject to the distribution provisions of the
Plan, which would in most cases result in the entitlement of such claims to
proceeds that are substantially less than the face amount of such
judgments.  Any claims that were not filed on a timely basis under the Plan
have been discharged by the Bankruptcy Court and thus the underlying legal
proceedings should not result in any liability to the Debtors.  Proceedings
against subsidiaries or affiliates of Kaanapali Land that are not Debtors
were not stayed by the Plan and may proceed.

     APIC, which is not a Debtor and is owned approximately 16.7% by the
Company, was the primary borrower under a $66 million loan made by the ERS
in 1991.  The loan, which had a balance as of September 9, 2003 of
approximately $83 million, is secured by the RKGC (and certain adjacent
lands).  All of APIC's assets are subject to the loan.  The loan matured in
June 2001 and was not extended, despite efforts of the borrowers to obtain
such an extension.



<PAGE>


     The borrowers were engaged in settlement negotiations with ERS at
least since 2000, which negotiations resulted in the execution of the ERS
Settlement Agreement in March 2003.  On September 9, 2003, the Company and
APIC consummated their settlement agreement with the ERS. As a consequence
of such transaction, the Company and APIC no longer have any interest in or
obligation to the Royal Kaanapali Golf Courses. However, the Company has
received certain easements and other rights respecting certain of the golf
course land, including, among other things, drainage rights, utility line
easements, access rights and the right to reconfigure one of the golf holes
to accommodate the construction of a road to serve certain other land owned
by the Company. In 2003 the Company escrowed cash as required by the
settlement agreement in the approximate amount of $1.5 million, primarily
to satisfy certain debts of APIC to its former creditors and employees and
to ensure that funds are available for the reconfiguration of the golf hole
as described above.  The Company recently entered into a contract for the
completion of such reconfiguration work which required the Company to
deposit an additional approximate amount of $.2 million into such escrow.
Such work is expected to be conducted during the second and third quarters
of 2004.  A portion of the amounts so funded are expected to be reimbursed
to the Company by Amfac Finance Limited Partnership ("AFLP").  As discussed
below, an additional amount of approximately $1.1 million was funded by the
Company to satisfy certain of its obligations relating to the settlement,
other than through the closing escrow, primarily relating to former
employees, which amount was paid during the fourth quarter of 2003.  The
settlement also provides the Company and its affiliates and related parties
with various releases from the ERS and ensures that the ERS will file no
claims with the Bankruptcy Court.

     Concurrently with the consummation of the ERS Settlement Agreement,
APIC entered into a mutual release agreement with the union representing
the bargaining unit employees employed by APIC at the time the receivership
commenced.  Such agreement resulted in certain amounts being paid or
distributed to such employees in return for releases by each of them and
the union in favor of APIC and the Company.  APIC handled its former non-
bargaining unit employees employed at the RKGC in substantially the same
manner.  The total amount paid to APIC's former employees as a consequence
of the consummation of such settlement was approximately $1.1 million and
was paid during the fourth quarter of 2003.

     On September 20, 1996, Oahu Sugar Company, LLC, successor by merger to
Oahu Sugar Company, Limited ("Oahu Sugar") and a subsidiary of Kaanapali
Land, filed a lawsuit (the "First Arakaki Case"), 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, which is a
Non-Debtor KLC Subsidiary, 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.


<PAGE>


     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 thousand in attorneys' fees, $28 thousand in
costs and $866 thousand 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.  Since no appeal bond was obtained,
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 also
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 was to be entered as of March 2, 2000 or a new judgment
order was 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 was 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 thousand in attorneys' fees, $28 thousand in costs, $867
thousand 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 was to accrue on the unpaid balance at the
statutory rate of ten percent per annum until paid in full.  Oahu Sugar
continued to pursue its appeal in the First Arakaki Case and the opposing
side filed a cross appeal seeking further relief on any potential retrial
of the matter.  The case was fully briefed and was awaiting a decision by
the Hawaii Supreme Court.  However, the First Arakaki Case is subject to an
overall potential settlement with the Second Arakaki Case and the City Bank
Foreclosure case, each as described below.

     On or about December 15, 2000, Oahu Sugar and Oahu MS Development
Corp. ("Oahu MS", f/k/a Amfac Property Development Corp.), subsidiaries of
Kaanapali Land, among others, were named in a lawsuit (the "Second Arakaki
Case") 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.  This case is also the subject of a potential
settlement as described below.  In the complaint, as amended, plaintiffs
sought a declaration that certain conveyances of real estate made by Oahu
Sugar or Oahu MS, 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 the First Arakaki Case.  Plaintiffs sought, 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 Oahu MS, the Young Men's Christian Association


<PAGE>


of Honolulu ("YMCA"), and the Filipino Community Center, Inc. ("FCC"),
among others, all over the years 1996-2000.  Although the amount of damages
sought in the Second Arakaki Case was unspecified, the case arose in
connection with the plaintiffs' efforts to realize on their judgment in the
First Arakaki Case described above.  The YMCA and FCC were also named
defendants in this action and have filed cross-claims for relief against
Oahu Sugar and Oahu MS 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 Oahu MS 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 matter.

     On October 23, 2002, Oahu MS was named in a civil action entitled City
Bank v. Amfac Property Development Corp., et al, pending in the Circuit
Court of the First Circuit, State of Hawaii, Civil No. 02-2494-10.  In this
case, plaintiff sought injunctive relief and declaratory relief to cease
actions preventing City Bank and its consultants from gaining access to the
mortgaged property for environmental testing.  In addition, the complaint
sought unspecified damages as may be shown at trial, costs, interest and
reasonable attorneys' fees, and such other further relief as the Court
would choose to award.  A stipulation for dismissal without prejudice was
entered on July 9, 2003.

     On January 2, 2003, Oahu MS was named in a civil action (the "City
Bank Foreclosure Case") entitled City Bank v. Amfac Property Development
Corp., et al, in the Circuit Court of the First Circuit, State of Hawaii,
Civil No. 03-1-0005-01.  In this case, plaintiff sought foreclosure of
property owned by Oahu MS and encumbered by a mortgage in favor of City
Bank.  City Bank made a $10.0 million loan to APDC under a loan agreement
dated December 18, 1996.  The loan became due on December 1, 2002.  City
Bank claimed that as a result of Oahu MS's failure to pay the loan when
due, Oahu MS was in default under the loan documents.  It alleged that the
amount due as of December 2, 2002 was approximately $2.9 million plus a per
diem charge of approximately $1 thousand accruing on the unpaid principal,
until payment was made and/or interest changes, plus advances and expenses
incurred in connection with the action.  In its complaint, City Bank sought
all amounts allegedly due and owing to City Bank, together with legal
interest thereafter to accrue thereon and all advances, costs and
attorneys' fees; a foreclosure decree and sale; the appointment of a
receiver to conduct an environmental audit on a specified portion of the
secured property and to collect rents being paid on a portion of the
mortgaged properties that consist of subleases on improved land; the entry
of an order of deficiency against APDC to the extent such exists after sale
with execution to follow thereon; and such other relief as the court may
deem proper.  This action had been consolidated with the Second Arakaki
Case described above (together, the "Consolidated Action").  Together with
the Complaint, City Bank filed a Motion for Appointment of Receiver
alleging that it was entitled to have a receiver appointed for an
environmental audit on the mortgaged property and collection of all net
rental income assigned to City Bank.  With regard to the subleases, on
June 28, 2002, Oahu MS and City Bank executed three assignments of net
rental income as security for the loan Oahu MS had obtained from City Bank
in 1996 ("Assignments").  Two of the Assignments pertained to subleases
under leases with the Trustees Under the Will and of the Estate of Bernice
Pauahi Bishop, Deceased, also known as Kamehameha Schools ("Trustees"):
Lease Number 24,710 ("Bougainville Assignment"), and Lease Number 24,720
("Halawa Assignment").  The third Assignment pertained to subleases and
leases with Queen's Hospital located on Bougainville Industrial Park and
the Halawa Light Industrial Park ("Queen's Assignment").  The three
Assignments gave City Bank certain rights in the net rental income derived
from each of the properties.  This motion was granted.



<PAGE>


     The parties to the City Bank Foreclosure Action commenced settlement
discussions in January 2003.  Although City Bank argued that no agreement
had been reached between the two parties, Oahu MS contended that a valid
and enforceable settlement agreement had been reached as to all material
terms providing for a modification and extension of the terms of the loan
in question.

     On May 12, 2003, City Bank filed a motion for partial summary judgment
against all defendants and interlocutory decree of foreclosure and for
entry of final judgment pursuant to Hawaii Rules of Civil Procedure 54(b),
seeking foreclosure on the Assignments.  The motion was granted at a
hearing on June 16, 2003.

     Soon thereafter, on June 5, 2003, Trustees filed a motion to intervene
in order to assert their interests in the rental income from the Halawa and
Bougainville Assignments.  Trustees' Motion was granted on July 23, 2003,
and Trustees filed their answer to complaint in this action on July 24,
2003, with a Cross-Claim against Oahu MS.  Thereafter, Trustees, City Bank
and Oahu MS reached agreement on the terms of a stipulation pertaining to
the receivership.

     Mediation of the Consolidated Action and certain matters concerning
the receivership commenced in late August 2003.  Trustees did not
participate in the mediation as their claims as intervenor had been
resolved through agreement with City Bank and their claims against Oahu MS
were to be determined through the arbitration proceedings described below.
However, Oahu Sugar did participate in the mediation in order that both
Oahu MS and its affiliates could achieve an overall settlement of the
claims surrounding both the Consolidated Action and the First Arakaki Case.

Mediation was unsuccessful at the initial session; however, the parties
continued to meet thereafter with the participation of the mediator and,
occasionally, the judge in the Consolidated Action.  This resulted in a
settlement that was signed by the attorneys for all parties in late
September 2003.  Such agreement provided the principal terms of the
settlement and stated that a more formal and detailed settlement agreement
would be drafted and signed.

     In December 2003 the settlement was consummated.  In general, the
terms of the settlement provided that Oahu MS convey the mill site property
that is encumbered by the City Bank loan to City Bank and pay Swift and
Arakaki the amount of $100 thousand, and pay City Bank certain expenses of
the transactions.  YMCA and FCC also contributed money to the settlement,
as well as Ticor Title Insurance Company, which had written title insurance
policies insuring City Bank and YMCA.  City Bank provided the plaintiffs
with what amounted to a participation in the property and will perform any
environmental cleanup required on the property.  All parties were released
from the claims brought against them in the Consolidated Action and the
First Arakaki Case, effective as of the date that is 91 days after the
property was deeded by Oahu MS to City Bank.

     On June 3, 2003, Trustees filed a Complaint against Oahu MS and City
Bank in Trustees Under the Will and the Estate of Bernice Paugahi Bishop,
deceased, also known as Kamehameha Schools v. Amfac Property Development
Corp., et al, in the Circuit Court of the First Circuit, State of Hawaii,
Civil No. 03-1-1154-05, seeking, among other things, cancellation of its
leases with APDC (the leases are the subject matter of the Halawa and
Bougainville Assignments discussed above), collection of unpaid net rents
on the leases, and appointment of a receiver to collect future subrents
under the subleases.  Concurrent therewith, Trustees filed a motion for
appointment of receiver.  Oahu MS filed its answer on June 24, 2003.



<PAGE>


     On July 2, 2003, Oahu MS filed a demand for arbitration of Trustees'
claims with the American Arbitration Association ("AAA"), and on July 3,
2003, APDC filed a motion to dismiss, or in the alternative, to stay
plaintiffs' complaint pending arbitration.  On July 2, 2003, Trustees filed
a motion for partial summary judgment against all defendants.  Both motions
were set to be heard on August 11, 2003.  Prior to that date, however, the
Court informally advised the parties that it would likely enforce the
arbitration provisions contained in the leases, and the parties thereafter
reached agreement on a stipulation staying the case pending arbitration.
The parties thereafter entered into mediation and have reached a settlement
in principle, pending the collection of various information necessary to
the completion thereof.  There are no assurances that the settlement will
be consummated.

     On or about February 23, 2001 Kekaha Sugar Co., Ltd., a subsidiary of
Kaanapali Land, received a letter from the 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.

The United States Environmental Protection Agency has performed a visual
inspection of the property and indicated there will be some testing
performed.  HDOH has performed some testing at the site and results are
pending.  Kekaha Sugar Co., Ltd. is substantially without assets and
further pursuit of this matter by HDOH could have a material adverse effect
on the financial condition of Kekaha Sugar Co., Ltd.

     On or about February 23, 2001, Lihue Plantation received a similar
letter from the HDOH assigning the LPCo 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 Plantation 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.  Lihue Plantation is
substantially without assets and further pursuit of this matter by HDOH
could have a material adverse effect on the financial condition of LPCo.

     Pioneer Mill is engaged in an ongoing cleanup arising out of the
discovery of petroleum contamination found at the Pioneer Mill site.  The
Pioneer Mill site has been assigned a high priority and the HDOH has shown
an interest in the environmental conditions relating to or arising out of
the former operations of Pioneer Mill.  These issues will have to be
addressed as they are raised.  Pioneer Mill has received a report on the
results of environmental testing conducted on the site by the United States
Environmental Protection Agency and HDOH.  Pioneer Mill is currently making
arrangements to address the issues evidenced by the test results, which are
not currently believed to be material to the Company.  EPA has designated
HDOH as the oversight agency for Pioneer Mill.



<PAGE>


     As a result of an administrative order issued to Oahu Sugar by the
HDOH, Order No. CH 98-001, 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.  Oahu Sugar has submitted a
Remedial Investigation Report to the HDOH.  The HDOH has provided comments
which indicate additional testing may be required.  Oahu Sugar has
responded to these comments with additional information.  Oahu Sugar is
substantially without assets and further pursuit of this matter by HDOH
could have a material adverse effect on the financial condition of Oahu
Sugar.  On January 9, 2004, the United States Environmental Protection
Agency, Region IX (hereinafter, "EPA"), issued a request to Oahu Sugar
seeking information related to the actual or threatened release of
hazardous substances, pollutants and contaminants at the Waipio Peninsula
portion of the Pearl Harbor Naval Complex National Priorities List
Superfund Site.  The request seeks, among other things, information
relating to the ability of Oahu Sugar to pay for or perform a clean up of
the land formerly occupied by Oahu Sugar.  Oahu Sugar is in the process of
responding to the information requests.  Oahu Sugar is substantially
without assets and the pursuit of any action, informational, enforcement,
or otherwise, could have a material adverse effect on the financial
condition of Oahu Sugar.

     The IRS filed a claim in the bankruptcy proceedings in the aggregate
amount of approximately $20.6 million for taxes, interest and penalties
related to the years 1998-2000.  However, the Company has entered into a
stipulation with the IRS whereby the IRS has withdrawn its claim due to the
fact that the Plan leaves the IRS unimpaired relative to any taxes that may
be due.  As a result of the examination relative to the years 1998-2000 the
IRS has proposed adjustments which in the aggregate reflect deficiencies in
taxes of approximately $7.4 million (before interest).  The Company is in
the process of reviewing the proposed adjustments and intends to contest
the deficiency.  However, there can be no assurance that the Company will
be successful in such contest and, although the Company has reserved for
potential tax liabilities on its financial statements, to the extent that
the Company is unsuccessful in defending against any such claims, the
amount for which the Company could be liable could be material.

     EC Managers, Inc., a subsidiary of Kaanapali Land, and general partner
of EC Partners, L.P., formerly known as Arvida/JMB Partners, L.P.-II (the
"Partnership"), was named a defendant in a lawsuit filed on January 11,
1996 in the Circuit Court in and for the Eighteenth Judicial Circuit,
Seminole County, Florida entitled Land Investment I, Ltd., Heathrow Land &
Development Corporation, Heathrow Shopping Center Associates and Paulucci
Investments v. Arvida/JMB Managers-II, Inc., Arvida/JMB Partners, L.P.-II,
Arvida Company and JMB Realty Corporation, Case No. 96-62-CA-15E.  The
complaint, as amended, included counts for breach of the management
agreement, fraud in the inducement and conspiracy to commit fraud in the
inducement, breach of the Heathrow partnership agreement and constructive
trust in connection with the purchase and management of the Heathrow
development.  Plaintiffs sought, among other things, unspecified
compensatory damages, punitive damages, prejudgment interest, attorneys'
fees, costs, and such other relief as the Court deemed appropriate.

     On June 24, 1999, the Court granted partial summary judgment in favor
of the plaintiffs against Arvida Company, finding that Arvida Company owed
plaintiffs a fiduciary duty as a broker and advisor under the management
agreement.  The ruling did not reach the issue of the statute of
limitations defense nor whether any such duties were owed in connection
with the Partnership's acquisition of an interest in the Heathrow
development through the Heathrow partnership.



<PAGE>


     On October 16-17, 2003, the court heard arguments relating to the
parties' motions for summary judgment.  After argument, the court indicated
that it was inclined to enter an order striking all but one claim.  At a
mediation held on October 18, 2003, the parties entered into a settlement
agreement resolving the entire case in consideration of the payment of
$3.25 million made on behalf of all of the defendants.  A subsidiary of the
Company that was the general partner of one of the defendants agreed to
contribute $1.95 million to the settlement payment.  Mutual general
releases were entered into between the parties and the case was dismissed
with prejudice on October 24, 2003.

     Kaanapali Land, as successor by merger to other entities, and D/C
Distribution Corporation ("D/C"), a subsidiary of Kaanapali Land, have been
named as defendants in personal injury actions allegedly based on exposure
to asbestos.  There are approximately 130 cases against such subsidiary
that are pending on the mainland and are alleged based on such subsidiary's
prior business operations.  Each company believes that it has meritorious
defenses against these actions, but can give no assurances as to the
ultimate outcome of these cases.  In the case of D/C, there can be no
certainty that it will be able to satisfy all of its liabilities for these
cases, as it is without assets to satisfy any material existing or future
judgments, there can be no assurances that these cases (or any of them), if
adjudicated in a manner adverse to the subsidiary, will not have a material
adverse effect on the financial condition of such subsidiary.  Kaanapali
Land does not believe that it has liability, directly or indirectly, for
such subsidiary's obligations.

     Northbrook Corporation ("Northbrook"), a predecessor by merger to
Kaanapali Land was named in a lawsuit filed in August 2003 in the Circuit
Court of Cook County, Chicago, Illinois, styled Silverado Golf & Country
Club, Inc. v. JMB Realty Corporation and Northbrook Corporation.  The
lawsuit sought unspecified damages and alleges that the defendants engaged
in fraudulent conduct in connection with the administration and termination
of a defined benefit pension plan that had been sponsored by Northbrook
Corporation and certain affiliates and predecessors.  The complaint has
since been amended.  In the eight count amended complaint, plaintiff seeks
unspecified general damages, the imposition of a constructive trust, an
accounting, attorneys' fees and costs, interest, punitive damages and such
other further relief as is deemed appropriate by the court under the
circumstances.  Plaintiff seeks return of approximately $1.0 million in
pension related costs paid by it over the period 1989-1994, the return of
all pension related costs paid by it since 1995, and all fees, costs and
other consideration charged to or received by defendants from plaintiff
since 1988.  The participants in the pension plan included employees of an
affiliate who were engaged in employment at the Silverado Country Club &
Resort, in Napa, California (the "Resort").  The Resort was and continues
to be operated pursuant to a Management Agreement between the plaintiff and
Xanterra Parks & Resorts, L.L.C. ("Xanterra"), a former subsidiary of
Northbrook that continues to be under common control with the defendants.
The plaintiffs are also pursuing their claims in a separate action against
Xanterra that is currently being arbitrated in San Francisco, California.
The defendants in the Chicago action vigorously deny all of the plaintiff's
claims.  Although the amended complaint has only recently been filed and an
answer has not yet been filed, the defendants intend to defend, among other
things, on the basis that it had no relationship with the plaintiff and no
duties to them whatsoever and that the plaintiff was not a participating
employer in the pension plan and otherwise had no interest therein.  In
addition, to the extent that the California arbitration is decided in favor
of Xanterra, such decision would provide further defenses for Kaanapali
Land (as successor by merger to Northbrook).  However, there can be no
assurance that the plaintiffs will not ultimately prevail on some or all of
their claims.



<PAGE>


     Other than as described above and the Reorganization Case 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

     Not applicable.


                                    PART II

ITEM 5.  MARKET PRICE OF AND DIVIDENDS ON THE REGISTRANT'S
         COMMON EQUITY AND RELATED STOCKHOLDER MATTERS

     As of December 31, 2003 there were approximately 421 holders of record
of the Company's Class A Shares and approximately 16 holders of record of
the Company's Class B Shares. The Company has no outstanding options,
warrants to purchase or securities convertible into, common equity of the
Company.  There is no established public trading market for the Company's
membership interests.  The Company has elected to be treated as a
corporation for federal and state income tax purposes.  As a consequence,
under current law, holders of membership interests in the Company will not
receive annual K-1 reports or direct allocations of profits or losses
relating to the financial results of the Company as they would for the
typical limited liability company that elects to be treated as a
partnership for tax purposes.  In addition, any distributions that may be
made by the Company will be treated as dividends.  However, no dividends
have been paid by the Company in 2003 or 2002 and the Company does not
anticipate making any distributions for the foreseeable future.




<PAGE>


ITEM 6.  SELECTED FINANCIAL DATA

                            KAANAPALI LAND, LLC (a)
       For the years ended December 31, 2003, 2002, 2001, 2000 and 1999
                (Dollars in Thousands Except Per Share Amounts)

                       2003       2002       2001        2000       1999
                     --------   --------   --------    --------   --------
Total revenues
 (c) . . . . . . .   $ 66,640     11,112     81,894      79,247    106,254
                     ========   ========   ========    ========   ========
Net income
 (loss) (d). . . .   $ 70,636    140,784    (17,082)    (45,707)   (34,245)
                     ========   ========   ========    ========   ========

Income (loss)
 from continuing
 operations per
 Share, basic
 and diluted . . .       5.86      (b)       (6,794)    (13,206)    (8,561)
                     ========   ========   ========    ========   ========

Net income
 (loss) per
 share, basic
 and diluted . . .      39.44      (b)       (4,270)    (11,427)    (8,561)
                     ========   ========   ========    ========   ========

Total assets . . .   $189,473    189,626    223,628     311,705    391,118
                     ========   ========   ========    ========   ========

Certificate of
 Land Apprecia-
 tion Notes. . . .   $  --         --       139,413     139,413    139,413
                     ========   ========   ========    ========   ========

      (a)   The  above selected financial data should be read in conjunc-
tion with the financial statements and the related notes appearing
elsewhere in this registration statement.  The amounts reflected are those
business segments of the Company's predecessor that are continuing in
nature.

      (b)   The income per share from continuing operations for the period
prior to the Plan Effective Date is $3,235 and the loss per share from
continuing operations for the period after the Plan Effective Date is $5.
The net income per share for the period prior to the Plan Effective Date is
$37,389 and the net loss per share for the period after the Plan Effective
Date is approximately $5.

      (c)   In 2001 and 1999, the Company recognized as revenue a gain from
the extinguishment of debt of $10,653 and $12,678, respectively.

      (d)   In 2002, the Company recognized an extraordinary gain on
reorganization of $136,618.  In 2003, the Company recognized a gain on
disposition of unconsolidated investment of $60,134.





<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.  Information is not
presented on a reportable segment basis in this section because in the
Company's judgment such discussion is not material to an understanding of
the Company's business.  Due to the fact the Company emerged from
bankruptcy in November 2002, substantially all of the 2002 and earlier
operations relate to the operations of the predecessor, Northbrook. No
material transactions (other than the issuance and distribution of the
shares on or in connection with the Plan Effective Date, the effects of the
restructuring and the related extraordinary gain) occurred in 2002 after
the mergers of Northbrook into FHTC and FHTC into Kaanapali Land in
November 2002.

     In addition to historical information, this Report contains forward-
looking statements within the meaning of the Private Securities Litigation
Reform Act of 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, the
imposition of conditions on receipt of governmental approvals and costs of
material and labor, and actual versus projected timing of events all of
which may cause such actual results to differ materially from what is
expressed or forecast in this report.


LIQUIDITY AND CAPITAL RESOURCES

     A description of the reorganization of Kaanapali Land and its
subsidiaries pursuant to the Plan and a description of certain elements of
the Plan are set forth in Item 1 above.

     The Debtors shall continue to exist after the Plan Effective Date as
separate legal entities.  Except as otherwise provided in the Order or the
Plan, the Debtors have been discharged from all claims and liabilities
existing through the Plan Effective Date.  As such, all persons and
entities who had receivables, claims or contracts with the Debtors that
first arose prior to the Petition Date and have not previously filed timely
claims under the Plan or have not previously reserved their right to do so
in the Reorganization Case are precluded from asserting any claims against
the Debtors or their assets for any acts, omissions, liabilities,
transactions or activities that occurred before the Plan Effective Date.

     On November 14, 2002, pursuant to the Plan, all of the KLC Debtors
executed and delivered to Kaanapali Land a certain Secured Promissory Note
in the principal amount of $70 million.  Such note matures on October 31,
2011 and carries an interest rate of 3.04% compounded semi-annually.  The
note, which is prepayable, is secured by substantially all of the real
property owned by the KLC Debtors, pursuant to a certain Mortgage, Security
Agreement and Financing Statement, dated as of November 14, 2002 and placed
on record in December 2002.  The note has been eliminated in the
consolidated financial statements because the obligors are consolidated
subsidiaries of Kaanapali Land.



<PAGE>


     In addition to such Secured Promissory Note, certain Non-Debtor KLC
Subsidiaries continue to be liable to Kaanapali Land under certain
guarantees (the "Guarantees") that they had previously provided to support
certain Senior Indebtedness (as defined in the Plan) and the Certificate of
Land Appreciation Notes ("COLA Notes") formerly issued by Amfac/JMB Hawaii,
Inc. (as predecessor to KLC Land).  Although such Senior Indebtedness and
COLA Notes were discharged under the Plan, the Guarantees of the Non-Debtor
KLC Subsidiaries were not.  Thus, to the extent that the holders of the
Senior Indebtedness and COLA Notes did not receive payment on the
outstanding balance thereof from distributions made under the Plan, the
remaining amounts due thereunder remain obligations of the Non-Debtor KLC
Subsidiaries under the Guarantees.  Under the Plan, the obligations of the
Non-Debtor KLC Subsidiaries under such Guarantees were assigned by the
holders the Senior Indebtedness and COLA Notes to Kaanapali Land on the
Plan Effective Date.  Kaanapali Land has notified each of the Non-Debtor
KLC Subsidiaries that are liable under such Guarantees that their
respective guarantee obligations are due and owing and that Kaanapali Land
reserves all of its rights and remedies in such regard.  Given the
financial condition of such Non-Debtor Subsidiaries, however, it is
unlikely that Kaanapali Land will realize payments on such Guarantees that
are more than a small percentage of the total amounts outstanding
thereunder or that in the aggregate will generate any material proceeds to
the Company.  These Guarantee obligations have been eliminated in the
consolidated financial statements because the obligors are consolidated
subsidiaries of Kaanapali Land, which is now the sole obligee thereunder.

     Those persons and entities that were not affiliated with Northbrook
and were holders of COLAs (Certificate of Land Appreciation Notes) on the
date that the Plan was confirmed by the Bankruptcy Court, and their
successors in interest, are expected to represent no more than
approximately 9.5% of the ownership of the Company when all distributions
under the Plan are completed.

     At December 31, 2003, the Company had cash of approximately $29
million which is available for working capital requirements, including
future operating expenses, and the Company's obligations for Kaanapali 2020
development costs, environmental remediation costs, including those on
former mill-sites, other potential environmental costs, retiree medical
insurance benefits (which are generally expected to be paid through the end
of 2004), and existing and possible future litigation.  The primary
business of Kaanapali Land is the land development of the Company's assets
on the Island of Maui.  The Kaanapali 2020 development plan will take many
years at significant expense to fully implement, although the material
portion of such anticipated expenses are not currently subject to any
contractual commitments.  Reference is made to Item 1 - Business, Item 3 -
Legal Proceedings and the footnotes to the financial statements.  Proceeds
from land sales are the Company's only source of significant cash proceeds
and the Company's ability to meet its liquidity needs is dependent on the
timing and amount of such proceeds.

      The Company's current indebtedness includes an $8.3 million mortgage
loan secured by the Waikele Golf Course which has a maturity date of
December 1, 2006, with an interest rate of LIBOR plus 3.75% (LIBOR floor of
3%) (6.75% at December 31, 2003).  The Company currently expects to service
and ultimately refinance such loan in the ordinary course of business.



<PAGE>


     The Company's continuing operations are primarily reliant upon the net
proceeds of sales of developed and undeveloped land parcels.  A purchase
money note receivable related to Lot 2 in the amount of approximately $14.4
million, approximately one-half of which is subject to possible later
adjustment based upon the number of units approved for development, is due
in March 2004 and a purchase money note related to Lot 4 in the amount of
approximately $17 million is due no later than August 2006.  If such notes
are paid upon maturity, the Company expects that it will have adequate
liquidity for the foreseeable future.  However, there can be no assurance
that any of such cash proceeds will be realized.

     Although the Company does not currently believe that it has any
liquidity problems over the near term, should the Company be unable to
satisfy its liquidity requirements from proceeds of land sales it will
likely pursue alternate financing arrangements.  However it cannot be
determined at this time what, if any, financing alternatives may be
available and at what cost.  Therefore, there can be no assurance that
there will be any available financing, and a lack of such financing would
have a material adverse effect on the operations of the Company.

RESULTS OF OPERATIONS

     Reference is made to the footnotes to the financial statements for
additional discussion of items addressing comparability between years.

     2003 COMPARED TO 2002

     The decrease in receivables, net is primarily due to the collection of
a receivable during 2003 relating to the participation in the sales price
of various lots sold during 2002 by third parties in accordance with a
sales contract on land sold in previous years by the Company and the
collection of escrowed funds relating to a parcel sold in 2000 by the
Company.

     Property, net decreased and note receivable, net increased due to the
sales of Lot 2 and Lot 4, the sale of Parcel 22/23 as well as the
conveyance of the Oahu MS mill site property to City Bank.

     Accounts payable and accrued expenses decreased due to the settlement
of the First Arakaki Case and the Second Arakaki Case which resulted in the
reversal of a litigation reserve which was recorded in a previous year.
The decrease was also due to the reversal of accruals relating to
properties associated with the City Bank Foreclosure Case as well as the
reversal of accruals relating to the ERS Settlement Agreement.

     The accumulated post-retirement benefit obligation decreased due in
part to benefits paid but primarily due to the effect of the expected
termination of the post-retirement life insurance benefits at the end of
2003 and a significant portion of the health care obligations at the end of
2004.  Such reductions have been reflected as reduction of post-retirement
benefit obligation in the Consolidated Statement of Operations.

     The decrease in Mortgage and other notes payable is due to the
settlement with City Bank which resulted in Oahu MS no longer being
obligated to the loan encumbering the Oahu MS mill site property in
exchange for Oahu MS conveying the property to City Bank.

     The investment in unconsolidated entities, at equity decrease and the
gain on disposition of unconsolidated investment increase is due to the
consummation of the settlement agreement with the ERS, which resulted in
the Company no longer having any ownership interests in or obligations
related to the Royal Kaanapali Golf Courses.

     The increase in sales and cost of sales is primarily due to the sale
of Lot 2, the sale of Lot 4, and the sale of Parcel 22/23 during 2003.



<PAGE>


     Selling, general and administrative decreased primarily due to the
reversal of certain accruals related to the settlement of the First Arakaki
Case and the Second Arakaki Case litigation offset by an increase in the
allowance for receivables relating to the loans made by Kaanapali Land to
AFLP in conjunction with the consummation of the ERS Settlement Agreement.
Because there can be no assurance that AFLP will have funds sufficient to
satisfy the loans from Kaanapali Land, the total amount of the loans has
been reserved.

     Interest decreased principally due to the discharge of the COLA's and
the Senior Indebtedness pursuant to the emergence of the Debtors from
bankruptcy in 2002 and the restructuring transactions contemplated by the
Plan.

     Depreciation decreased principally due to the cessation of the Kauai
Power Plant operations during the first quarter of 2003.

      The change in equity in income (loss) from unconsolidated investments
is primarily due to the Company's share of loss in 2003 from its investment
in APIC.

      The increase in income tax expense is a result of the increase in the
Company's income from continuing operations.

     2002 COMPARED TO 2001

     The restructuring in 2002 resulted in significant changes to the
balance sheet, particularly causing (i) decreases in mortgage and other
notes payable, deferred income taxes, deferred costs and other assets and
(ii) changes in the equity of the Company principally due to the gain on
reorganization.  The restructuring also resulted in the decrease in
interest expense and the increase in restructuring costs.

     Sales and cost of sales declined principally due to the decline in
land sales.  The decrease in other liabilities is primarily the result of a
settlement of future obligations relating to a land sale in a prior year
for an amount less than was recorded at the time of sale.

     The reduction to carrying value of investments was the primary cause
for the decrease in property.  The decrease in accumulated post retirement
benefit obligation is primarily due to the decrease in the unrecognized net
actuarial gain.  The change in equity in income (loss) from unconsolidated
investments is primarily due to the Company's share of the loss in 2001 for
value impairment at the Royal Kaanapali Golf Courses versus the gain in
2002 from the sale of the Company's interest in a hotel.


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, and
therefore may be advantageous where property investments are not highly
leveraged with debt or where the cost of such debt has been previously
fixed.


<PAGE>


     At December 31, 2003, the Partnership had the known material
contractual obligations set forth in the following table:

                                          Payments Due by Period
                             ----------------------------------------------
                                        Less                         More
Contractual                             Than      1-3      3-5       Than
Obligations                  Total     1 Year    Years    Years     5 years
-----------                  ------    ------    ------   ------    -------

Long-term debt
  obligations. . . . . . .   $8,288       108     8,180     --         --
Capital lease
  obligations. . . . . . .     --        --        --       --         --
Operating lease
  obligations. . . . . . .     --        --        --       --         --
Purchase obligations . . .     --        --        --       --         --
Other long-term
 liabilities reflected
 on the Partnership's
 balance sheet under
 GAAP. . . . . . . . . . .     --        --        --       --         --
                             ------    ------    ------   ------     ------
    Total. . . . . . . . .   $8,288       108     8,180     --         --
                             ======    ======    ======   ======     ======


CRITICAL ACCOUNTING POLICIES

     The discussion and analysis of the Company's financial condition and
results of operations are based upon the Company's consolidated financial
statements, which have been prepared in accordance with accounting
principles generally accepted in the United States.  The preparation of
these financial statements requires management to make estimates and
judgements that affect the reported amounts of assets, liabilities,
revenues and expenses, and related disclosures of contingent assets and
liabilities.  These estimates are based on historical experience and on
various other assumptions that management believes are reasonable under the
circumstances; additionally management evaluates these results on an on-
going basis.  Management's estimates form the basis for making judgements
about the carrying values of assets and liabilities that are not readily
apparent from other sources.  Different estimates could be made under
different assumptions or conditions, and in any event, actual results may
differ from the estimates.

     The Company reviews its property for impairment of value.  This
includes considering certain indications of impairment such as significant
changes in asset usage, significant deterioration in the surrounding
economy or environmental problems.  If such indications are present and the
undiscounted cash flows estimated to be generated by those assets are less
than the assets' carrying value, the Company will adjust the carrying value
down to its estimated fair value.  Fair value is based on management's
estimate of the property's fair value based on discounted projected cash
flows.

     There are various judgments and uncertainties affecting the
application of these and other accounting policies, including the
liabilities related to asserted and unasserted claims and the utilization
of net operating losses.  Materially different amounts may be reported
under different circumstances or if different assumptions were used.




<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 manages 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.  Prior to the filing of the
Reorganization Case, 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 debt arrangements are at variable rates.  Based upon the
Company's indebtedness and interest rates at December 31, 2003, a 1%
increase in market rates or a 1% decrease in market rates would have no
significant affect on future earnings and cash flows.




<PAGE>


ITEM 8.  FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA


                              KAANAPALI LAND, LLC

                                     INDEX


Report of Independent Auditors

Consolidated Balance Sheets, December 31, 2003 and 2002

Consolidated Statements of Operations for the years ended
  December 31, 2003, 2002 and 2001

Consolidated Statements of Stockholders' Equity (Deficit) for
  the years ended December 31, 2003, 2002 and 2001

Consolidated Statements of Cash Flows for the years ended
  December 31, 2003, 2002 and 2001

Notes to Consolidated Financial Statements



Schedules not filed:

     All schedules 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 Managing Member and Shareholders
Kaanapali Land, LLC


We have audited the accompanying consolidated balance sheets of Kaanapali
Land, LLC (and the predecessors thereof as defined in Note 1) as of
December 31, 2003 and 2002, and the related consolidated statements of
operations, stockholders' equity (deficit), and cash flows for each of the
three years in the period ended December 31, 2003.  These financial
statements are the responsibility of the Company's management.  Our
responsibility is to express an opinion on these financial statements 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 financial statements referred to above present fairly,
in all material respects, the consolidated financial position of Kaanapali
Land, LLC (and the predecessors thereof as defined in Note 1) at
December 31, 2003 and 2002, and the consolidated results of its operations
and its cash flows for each of the three years in the period ended
December 31, 2003, in conformity with accounting principles generally
accepted in the United States.






                                        /s/ Ernst & Young LLP




Chicago, Illinois
March 25, 2004






<PAGE>


                              KAANAPALI LAND, LLC

                          Consolidated Balance Sheets

                          December 31, 2003 and 2002
                   (Dollars in Thousands, except share data)


                                  A S S E T S
                                  -----------
                                                         2003       2002
                                                       --------  ----------

Cash and cash equivalents. . . . . . . . . . . . . .   $ 28,995     15,848
Receivables, net . . . . . . . . . . . . . . . . . .        777      1,959
Property, net. . . . . . . . . . . . . . . . . . . .    104,926    142,832
Notes receivable, net of deferred gain
  of $5,308. . . . . . . . . . . . . . . . . . . . .     26,058      --
Prepaid pension costs. . . . . . . . . . . . . . . .     25,989     25,905
Other assets . . . . . . . . . . . . . . . . . . . .      2,728      3,082
                                                       --------   --------
                                                       $189,473    189,626
                                                       ========   ========


                             L I A B I L I T I E S
                             ---------------------

Accounts payable and accrued expenses. . . . . . . .   $  2,444     10,202
Deferred income taxes. . . . . . . . . . . . . . . .     19,369      9,143
Accumulated postretirement benefit obligation. . . .     13,743     23,560
Other liabilities. . . . . . . . . . . . . . . . . .     52,498     51,705
Mortgage and other notes payable . . . . . . . . . .      8,288     11,248
Investment in unconsolidated entities,
  at equity. . . . . . . . . . . . . . . . . . . . .      --        61,273
                                                       --------   --------
        Total liabilities. . . . . . . . . . . . . .     96,342    167,131

Commitments and contingencies


            S T O C K H O L D E R S'  E Q U I T Y  (D E F I C I T )
            ------------------------------------------------------

Common stock, at 12/31/03 and 12/31/02 non par
  value (shares authorized - 4,500,000; shares
  issued 1,791,274 and 1,863,213.49,
  respectively . . . . . . . . . . . . . . . . . . .      --         --
Additional paid-in capital . . . . . . . . . . . . .      5,357      5,357
Accumulated earnings . . . . . . . . . . . . . . . .     87,774     17,138
                                                       --------   --------

        Total stockholders' equity . . . . . . . . .     93,131     22,495
                                                       --------   --------

                                                       $189,473    189,626
                                                       ========   ========








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


<PAGE>


                              KAANAPALI LAND, LLC

                     Consolidated Statements of Operations

                 Years ended December 31, 2003, 2002 and 2001
                (Dollars in Thousands Except Per Share Amounts)

                                              2003       2002       2001
                                            --------   --------   --------
Revenues:
  Sales. . . . . . . . . . . . . . . . . .  $ 59,178     11,085     59,079
  Interest and other income. . . . . . . .     7,462         27     12,162
  Extinguishment of debt . . . . . . . . .     --         --        10,653
                                            --------   --------   --------
                                              66,640     11,112     81,894
                                            --------   --------   --------
Cost and expenses:
  Cost of sales. . . . . . . . . . . . . .    39,564      5,176     50,796
  Reduction of post-retirement
    benefit obligation . . . . . . . . . .    (7,679)    (9,520)     --
  Selling, general and administrative. . .    11,332     12,505     15,652
  Interest . . . . . . . . . . . . . . . .     1,129      2,395     11,387
  Depreciation and amortization. . . . . .     1,164      2,994      3,621
  Reduction to carrying value of
    investments. . . . . . . . . . . . . .     --        13,717     18,109
                                            --------   --------   --------
                                              45,510     27,267     99,565
                                            --------   --------   --------
Operating income (loss). . . . . . . . . .    21,130    (16,155)   (17,671)

  Equity in income (loss) from
    unconsolidated investments . . . . . .      (402)     5,180    (12,967)
                                            --------   --------   --------
  Income (loss) from continuing
    operations before income taxes,
    discontinued operations, gain
    on disposition of unconsolidated
    investment and extraordinary
    gain on reorganization . . . . . . . .    20,728    (10,975)   (30,638)
  Income tax (expense) benefit . . . . . .   (10,226)    15,141      3,462
                                            --------   --------   --------
  Income (loss) from continuing
    operations . . . . . . . . . . . . . .    10,502      4,166    (27,176)
  Income from discontinued
    operations, net of applicable
    income taxes . . . . . . . . . . . . .     --         --        10,094
  Gain on disposition of
    unconsolidated investment. . . . . . .    60,134      --         --
  Extraordinary gain on
    reorganization, net. . . . . . . . . .     --       136,618      --
                                            --------   --------   --------
        Net income (loss). . . . . . . . .  $ 70,636    140,784    (17,082)
                                            ========   ========   ========
Earnings per share:
  Income (loss) from continuing
    operations, basic and diluted. . . . .      5.86      (a)       (6,794)
                                            ========   ========   ========
  Net income (loss), basic and
    diluted. . . . . . . . . . . . . . . .     39.44      (a)       (4,270)
                                            ========   ========   ========

   (a)  The income from continuing operations per share and the net income
per share for the period prior to the Plan Effective Date is $3,235 and
$37,389, respectively.  The loss from continuing operations per share and
the net loss per share for the period after the Plan Effective Date is $5
and $5, respectively.

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


<PAGE>


<table>
                                                  KAANAPALI LAND, LLC

                               Consolidated Statements of Stockholders' Equity (Deficit)

                                     Years ended December 31, 2003, 2002 and 2001

                                                (Dollars in Thousands)
<caption>
                                                                                                           Total
                                                                       Accumu-                             Stock-
                                                      Additional       lated                               holders'
                                       Common          Paid-In         (Deficit)         Treasury          Equity
                                       Stock           Capital         Earnings           Stock           (Deficit)
                                      --------        ---------        --------          --------         --------

                                  <c>              <c>             <c>               <c>              <c>
Balance at January 1, 2001 . .        $     81           91,845        (160,079)           (3,781)         (71,934)

Net loss . . . . . . . . . . .             --             --            (17,082)            --             (17,082)

Distribution of uncon-
  solidated investment . . . .             --             --               (312)            --                (312)

Spinoff of subsidiary. . . . .             --             --            (34,318)            --             (34,318)
                                      --------         --------        --------          --------         --------
Balance at December 31, 2001 .              81           91,845        (211,791)           (3,781)        (123,646)

Net income . . . . . . . . . .             --             --            140,784             --             140,784

Effect of reorganization . . .             (81)         (86,488)         88,145             3,781            5,357
                                      --------         --------        --------          --------         --------

Balance at December 31, 2002 .             --             5,357          17,138             --              22,495

Net income . . . . . . . . . .             --             --             70,636             --              70,636
                                      --------         --------        --------          --------         --------
Balance at December 31, 2003 .        $    --             5,357          87,774             --              93,131
                                      ========         ========        ========          ========         ========









<fn>
                                      The accompanying notes are an integral part
                                       of the consolidated financial statements.
</table>


<PAGE>


                              KAANAPALI LAND, LLC

                     Consolidated Statements of Cash Flows

                 Years ended December 31, 2003, 2002 and 2001
                            (Dollars in Thousands)


                                              2003       2002       2001
                                            --------   --------   --------
Cash flows from operating activities:
  Net income (loss). . . . . . . . . . . .  $ 70,636    140,784    (17,082)
  Adjustments to reconcile net income
   (loss) to net cash provided by
   (used in) continuing operations:
    Income from discontinued operations,
      net. . . . . . . . . . . . . . . . .     --         --       (10,094)
    Extraordinary gain on reorganiza-
      tion, net. . . . . . . . . . . . . .     --      (136,618)     --
    Gains on sale of property. . . . . . .   (18,657)     --         --
    Gain on disposition of uncon-
      solidated investment . . . . . . . .   (60,134)     --         --
    Restructuring costs. . . . . . . . . .     --        (3,042)     --
    Depreciation and amortization. . . . .     1,164      2,994      3,621
    Equity in loss (income) from
      unconsolidated investments . . . . .       402     (5,180)    12,967
    Reduction to carrying value of
      investments. . . . . . . . . . . . .     --        13,717     18,109
    Interest deferred on long-term debt. .     --         --          (167)
    Extinguishment of debt . . . . . . . .     --         --       (10,717)
  Changes in operating assets and
   liabilities:
    Receivables, net . . . . . . . . . . .     1,118        207        568
    Accounts payable, accrued expenses
      and other. . . . . . . . . . . . . .   (17,048)    (9,662)    17,470
    Deferred income taxes. . . . . . . . .    10,226    (15,141)    (3,462)
                                            --------   --------   --------

Net cash provided by (used in)
  operating activities . . . . . . . . . .   (12,293)   (11,941)    11,213
                                            --------   --------   --------

Cash flows from investing activities:
  Property additions . . . . . . . . . . .    (1,190)      (178)      (532)
  Property sales, disposals and
    retirements, net . . . . . . . . . . .    26,994        457      3,191
  Distributions from (contributions to)
    investments in unconsolidated
    entities, at equity, net . . . . . . .      (254)    10,475        381
                                            --------   --------   --------
Net cash provided by
  investing activities . . . . . . . . . .    25,550     10,754      3,040
                                            --------   --------   --------



<PAGE>


                              KAANAPALI LAND, LLC

               Consolidated Statements of Cash Flows - Continued

                 Years ended December 31, 2003, 2002 and 2001
                            (Dollars in Thousands)


                                              2003       2002       2001
                                            --------   --------   --------
Cash flows from financing activities:
  Loan proceeds. . . . . . . . . . . . . .     --         --         8,500
  Net repayments of debt . . . . . . . . .      (110)      (103)   (19,027)
  Loan acquisition costs . . . . . . . . .     --         --           (23)
  Settlement payments pursuant to
    the Plan . . . . . . . . . . . . . . .     --        (2,850)     --
                                            --------   --------   --------
        Net cash used in
          financing activities . . . . . .      (110)    (2,953)   (10,550)
                                            --------   --------   --------
        Net increase (decrease) in
          cash and cash equivalents. . . .    13,147     (4,140)     3,703

        Cash and cash equivalents
          at beginning of year . . . . . .    15,848     19,988     16,285
                                            --------   --------   --------
        Cash and cash equivalents
          at end of year . . . . . . . . .  $ 28,995     15,848     19,988
                                            ========   ========   ========

Supplemental disclosure of cash flow
 information:
  Cash paid for interest from
    continuing operations. . . . . . . . .  $    643        916      7,083
                                            ========   ========   ========

  Cash received (paid) for
    income taxes . . . . . . . . . . . . .  $  --             8      --
                                            ========   ========   ========

Extraordinary gain on reorganization:
  Reduction in other notes payable -
    COLAs. . . . . . . . . . . . . . . . .  $  --       111,195      --
  Reduction in deferred taxes. . . . . . .     --        29,688      --
  Reduction in accrued expenses. . . . . .     --         3,059      --
  Reduction in other assets/liabilities. .     --         1,075      --
  Payments of restructuring costs. . . . .     --        (3,042)     --
  Additional paid in capital - stock
    issuance . . . . . . . . . . . . . . .     --        (5,357)     --
                                            --------   --------   --------
  Extraordinary gain on reorganization . .  $  --       136,618      --
                                            ========   ========   ========

Non-cash investing and financing
 activities:
  Note receivable received in sale
    of Lot 2 . . . . . . . . . . . . . . .  $ 14,366      --         --
  Deferred gain. . . . . . . . . . . . . .    (5,308)     --         --
                                            --------   --------   --------
                                               9,058      --         --
  Note receivable received in sale
    of Lot 4 . . . . . . . . . . . . . . .    17,000      --         --
                                            --------   --------   --------
  Note receivable, net . . . . . . . . . .  $ 26,058      --         --
                                            ========   ========   ========


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


<PAGE>


                              KAANAPALI LAND, LLC

                  Notes to Consolidated Financial Statements

                            (Dollars in Thousands)


(1)  SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

     ORGANIZATION AND BASIS OF ACCOUNTING

     Kaanapali Land, LLC ("Kaanapali Land"), a Delaware limited liability
company is the reorganized entity resulting from the Joint Plan of
Reorganization of Amfac Hawaii, LLC (now known as KLC Land Company, LLC
("KLC Land")), certain of its subsidiaries (together with KLC Land, the
"KLC Debtors") and FHT Corporation ("FHTC" and, together with the KLC
Debtors, the "Debtors") under Chapter 11 of the Bankruptcy Code, dated
June 11, 2002 (as amended, the "Plan").  The Plan was filed jointly by all
Debtors to consolidate each case for joint administration in the Bankruptcy
Court in order to (a) permit the petitioners to present a joint
reorganization plan that recognized, among other things, the common
indebtedness of the debtors (i.e. the Certificate of Land Appreciation
Notes ("COLAs") and Senior Indebtedness) and (b) facilitate the overall
administration of the bankruptcy proceedings.  As indicated in the Plan,
Kaanapali Land has elected to be taxable as a corporation.  The Debtors had
filed their petition for reorganization under Chapter 11 on February 27,
2002 (the "Petition Date") in the United States Bankruptcy Court for the
Northern District of Illinois, Eastern Division (the "Bankruptcy Court")
which petitions were consolidated into a single joint proceeding by the
Bankruptcy Court (the "Reorganization Case").

     The principal goal of the Plan was to address the Debtors' debt
burdens so that the Debtors could emerge from Chapter 11 with a viable
capital structure and with the resources necessary to operate their
businesses and improve the value of their land holdings.  The Plan achieved
this goal by converting certain indebtedness and other liabilities of the
Debtors into new equity of Kaanapali Land (to the extent such creditors did
not elect an available cash distribution option).  Another goal of the Plan
was to secure additional liquidity for the Debtors to help fund future
operations.  The Plan achieved this goal through the Merger of FHTC with
Northbrook Corporation ("Northbrook"), which made the assets and liquidity
of Northbrook available to the Debtors to help fund their land development
business.  FHTC was the surviving entity in such merger, and shortly
thereafter was in turn merged into Kaanapali Land pursuant to the Plan.

     The Plan was confirmed by the Bankruptcy Court by orders dated
July 29, 2002 and October 30, 2002 (collectively, the "Order") and became
effective November 13, 2002 (the "Plan Effective Date").  Kaanapali Land
continues to work toward completion of the various requirements of the Plan
and to implement the restructuring transactions that are contemplated to be
effected under the Plan, including, among other things, the resolution of
all outstanding claims and distributions on all claims that are allowed
under the Plan.

     In accordance with the Plan, a maximum of 1,863,000 shares of
Kaanapali Land were issuable.  At December 31, 2003, approximately
1,791,274 shares were issued and outstanding with a maximum of
approximately 17,000 Class A Shares currently expected to be issued under
the Plan.



<PAGE>


      As a consequence of the merger of Northbrook into FHTC on November 8,
2002, and the subsequent merger of FHTC into Kaanapali Land on November 14,
2002, each pursuant to the Plan, the assets and liabilities of Kaanapali
Land are essentially the same as those of Northbrook and its subsidiaries
and, thus, Northbrook is considered to be the predecessor entity of
Kaanapali Land for 2001 and the portion of 2002 prior to the Plan Effective
Date was used and accordingly there was no effect on the consolidated
financial statements of the Company as a result of these mergers.  As
greater than 85% of the shareholders in Kaanapali Land were shareholders or
affiliates of shareholders in Northbrook, the assets and liabilities of
Northbrook and FHTC merged into Kaanapali Land were recorded at their
historical cost.  The Company did not adopt fresh-start reporting due to
the fact that holders of existing shares of Northbrook immediately before
the confirmation received greater than 50% of the successor entity under
the Plan.  Subject to the foregoing, the occurrence of the Plan Effective
Date did not result in a change in the Company's basis of accounting. The
principal effect on the Company's 2002 financial statements was to (i)
cease recording interest expense on the COLAs subsequent to the Petition
Date and (ii) recognize an extraordinary gain on reorganization upon the
confirmation of the Plan, net of restructuring costs.

     Absent any change in the Company's basis of accounting, the
presentation of predecessor financial statements has not been considered
material to a fair presentation or meaningful to an understanding of the
financial condition and results of operations of the Company.  Fresh-start
accounting was not adopted as the successor entity (Kaanapali Land LLC) had
no previous operations and is a successor by merger to the predecessor
entity (Northbrook Corporation) that had, on a consolidated basis, the same
operations as the successor upon emergence from bankruptcy.  Further, the
financial statements are comparable between periods as the remaining assets
and liabilities are carried at the same basis.  The successor is not a new
entity and, as part of the Plan, there were no divestitures of segments,
disposal of assets, or other changes in the basic operations of the
Company.

     The accompanying consolidated financial statements include the
accounts of Kaanapali Land and all of its subsidiaries and its predecessor
(collectively, the "Company"), which include KLC Land and its wholly-owned
subsidiaries.  The liabilities compromised by the Plan have been presented
at the present value of amounts expected to be paid as of the Plan
Effective Date, which has been estimated to approximate the historical
carrying values of such liabilities.  Accordingly, the carrying value of
all remaining liabilities at the Plan Effective Date reflected the present
value of the amounts expected to be paid.  All significant intercompany
transactions and balances have been eliminated in consolidation.
Discontinued operations represent the resorts business (collectively
"Resorts") and include Xanterra Parks & Resorts, L.L.C. and its wholly-
owned subsidiaries, Xanterra, Inc. and its wholly-owned subsidiary Xanterra
Parks & Resorts, Inc. (See Note 9).  The Resorts entities were spun-off by
Northbrook to its sole shareholder on December 31, 2001.

     The Company's continuing operations are in three business segments -
agriculture, property and golf.  The Agriculture segment processed and
marketed coffee (prior to the shutdown of operations in September 2001) and
continues to grow seed corn under contract and lease land currently
cultivated in coffee to a third party.  The Property segment primarily
develops land for sale and negotiates bulk sales of undeveloped land.  The
Golf segment is responsible for the management and operation of the Waikele
Golf Course.  The Property, Agriculture and Golf segments operate
exclusively in the State of Hawaii.  For further information on the
Company's business segments see Note 10.

     STATEMENT OF CASH FLOWS

     The Company considers as cash equivalents all investments with
maturities of three months or less when purchased.



<PAGE>


     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 on its balance sheet approximate SFAS No. 107
value due to the relatively short maturity of these instruments.  The
Company believes the carrying value of its debt (see Note 3) approximates
fair value.

     RECEIVABLES

     The allowance for doubtful receivables was $2,115 and $618 at
December 31, 2003 and 2002, respectively.

     LAND DEVELOPMENT

     Project costs associated with the development and construction of real
estate projects are capitalized and classified as Property.  Such
capitalized costs are not in excess of the projects' 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.  No
interest has been capitalized for the periods presented.

     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.

     PROPERTY

     Property is stated at cost.  Depreciation is based on the straight-
line method over the estimated economic lives of 15-40 years for the
Company's depreciable land improvements, 3-18 years for machinery and
equipment, or the lease term if less.  At December 31, 2003, the Company
held approximately $1.9 million of non-depreciable land improvements and
approximately $3.3 million of depreciable land improvements, relating
principally to the Waikele Golf Course, which are being depreciated over
their estimated 15-year useful life.  Maintenance and repairs are charged
to operations as incurred.  Significant betterments and improvements are
capitalized and depreciated over their estimated useful lives.

     In 2002 and 2001, the Company recognized impairment losses of $13,717
and $18,109.  The 2002 impairment loss was primarily to reduce the carrying
value of certain land parcels that are not considered to be part of future
development plans.  Such land parcels are not part of the Company's
Kaanapali 2020 development plan and are currently neither in use nor being
marketed for sale.  The 2001 impairment loss represented $13,725 to reduce
the carrying value of certain land parcels and $4,384 related to assets
used in the agricultural operations.

     Provisions for impairment losses related to long-lived assets, if any,
are recognized when expected future cash flows are less than the carrying
values of the assets.  If indicators of impairment are present, the Company
evaluates the carrying value of the related long-lived assets in
relationship to the future undiscounted cash flows of the underlying
operations or anticipated sales proceeds.  The Company adjusts the net book
value of property to fair value if the sum of the expected future cash flow
or sales proceeds is less than book value.  Assets held for sale are
recorded at the lower of the carrying value of the asset or fair value less
costs to sell.


<PAGE>


                                                     2003          2002
                                                   --------      --------

  Property, net:
    Land . . . . . . . . . . . . . . . . . .       $ 90,528       127,135
    Land improvements. . . . . . . . . . . .          3,344         3,344
    Buildings. . . . . . . . . . . . . . . .         19,766        21,586
    Machinery and equipment. . . . . . . . .         19,217        25,929
                                                   --------      --------
                                                    132,855       177,994
    Accumulated depreciation . . . . . . . .        (27,929)      (35,162)
                                                   --------      --------
    Property, net. . . . . . . . . . . . . .       $104,926       142,832
                                                   ========      ========

     Land held for sale of approximately $14,000 and $11,000, none of which
has any current operations, is included in Property in the consolidated
balance sheets at December 31, 2003 and 2002 and is carried at the lower of
cost or fair value less cost to sell.  Further, a portion of the land held
for sale at December 31, 2002, the Oahu Sugar Mill Site (carrying value of
approximately $2,600 at December 31, 2002) is no longer owned by the
Company as a result of the consummation of the settlement agreement with
the lender.  No land is currently in use except for the land associated
with the Waikele Golf Course (carrying value of approximately $26 million
at December 31, 2003) and an approximate 800 acres of Kaanapali 2020 land
that has been set aside for the Company's seed corn operations.

    The Company's principal land holdings are on the island of Maui
(including approximately 4,000 acres known as Kaanapali 2020, of which
approximately 1,500 acres is classified as conservation land which
precludes development) and have a carrying value of approximately $75
million.  In addition, the Company's land holdings on the island of Oahu
have a carrying value of approximately $26 million.  The Company has
determined, based on its current projections for the development and/or
disposition of its land holdings, that the land holdings are not currently
recorded in an amount in excess of proceeds that the Company expects that
it will ultimately obtain from the disposition thereof.

     LAND SALES AND MORTGAGES RECEIVABLE

     On January 31, 2003, an option to purchase Lot 2 (an approximate 11.5
acre site in the North Beach area of Kaanapali) was exercised.  A non-
refundable payment was made for $2 million (before closing costs and
prorations).  The remainder of the purchase price is reflected by a note
secured by a mortgage due March 31, 2004 for approximately $14,000,
approximately one-half of which is subject to possible later adjustment
based on the number of units approved for construction on the site.

     The Company is recording the sale under the cost recovery method of
accounting.  The full note has been recorded, offset by the entire deferred
gain of approximately $5,308 which will be recognized once cash receipts
from the purchaser exceed the cost of the property.

     On August 5, 2003, the Company closed the sale of Lot 4 (an
approximate 40 acre site in the North Beach area of Kaanapali) for a
purchase price of $33,000.  The cash portion of the purchase price (before
closing costs and prorations) of $16,000 was paid at closing and the
balance was delivered in the form of a promissory note in the original
principal amount of $17,000.  The promissory note is secured by a first
mortgage encumbering Lot 4, and it is due on the earlier to occur of (i)
August 4, 2006, or (ii) sixty days following the issuance by the County of
Maui of certain entitlements for the development of any portion of Lot 4.
The note bears interest at the rate of 8% per annum from August 5, 2003
through and including August 4, 2005.  From August 5, 2005 until paid, the
note bears interest at the rate of 10% per annum.  Interest payments are to
be paid monthly.  The Company recognized approximately $13,000 of gain
related to this transaction for financial reporting purposes during the
third quarter of 2003.



<PAGE>


     At closing, the Company also granted to the purchaser an option to
purchase Lot 3, which expires two years after the closing date on Lot 4.
The option price consists of a base price of $22,500, which is subject to
potential adjustment upward depending on the number of units permitted to
be developed on Lots 3 and 4, and also an adjustment for inflation if the
option is exercised after January 1, 2005.  There can be no assurance that
such option will be exercised or the timing thereof.

     In December 2003, the Company closed on its sale of Parcel 22/23 to a
third party for a purchase price of $12,500.  Approximately $11,500 was
received in cash at closing and the Company deposited approximately $1,000
into an escrow account.  The Company recognized a gain of approximately
$4,000 related to the transaction for financial reporting purposes in 2003.

In conjunction with the sale, the Company has agreed to pay a portion of
the cost of certain roadway improvements and pay the costs of the design
and construction of an underground sewer line and drainage construction as
well as the cost of certain other improvements.  Such escrowed funds will
fund the Company's portion of the costs associated with the road
improvements and the sewer and drainage construction costs.  The Company is
responsible for costs in excess of the escrowed funds associated with the
road improvements and sewer and drainage construction costs and has accrued
approximately $3,000 as an estimate of such costs.

     OTHER LIABILITIES

     Other liabilities includes project completion costs on land sold in
prior years, reserves for losses on divested segments, reserves for
workmen's compensation and general liability claims, and reserves for
commitments and contingencies as discussed in Note 8, including potential
tax liabilities.

     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".  In addition, discontinued operations in accordance with APB 30 for
2001 has been classified as discontinued operations in the accompanying
consolidated statements of operations.

     In April 2002, the FASB issued Statement No. 145 which, among other
things, rescinds the requirement that gains and losses on extinguishments
of debt be classified as extraordinary items.  The Company adopted
Statement No. 145 effective January 1, 2002, which requires
reclassifications of prior extraordinary gains on extinguishment of debt.

     RECLASSIFICATIONS

     Certain amounts in the 2002 and 2001 consolidated financial statements
have been reclassified to conform to the 2003 presentation.




<PAGE>


(2)  INVESTMENTS

     Amounts recorded as investments in unconsolidated entities at
December 31, 2003 and 2002 consist of the following:

                            Ownership Percentage        Carrying Value
                            --------------------     --------------------
Description                   2003        2002         2003        2002
-----------                 --------    --------     --------    --------
Amfac Finance Limited
 Partnership (including
 its 83.33% investment
 in APIC). . . . . . . .          0%           0%    $  --        (49,521)
Amfac Property Invest-
 ment Corp.. . . . . . .      16.67%       16.67%       --        (11,752)
                                                     --------    --------
                                                     $  --        (61,273)
                                                     ========    ========

     Prior to December 31, 2002 (the redemption date discussed below), the
Company did not control Amfac Finance Limited Partnership ("AFLP") and,
accordingly, AFLP was accounted for on the equity method.  All intercompany
amounts were eliminated in the accompanying consolidated financial
statements.

      APIC, in which the Company owns approximately 16.67% of the
outstanding shares, owned and operated the Royal Kaanapali Golf Courses
("RKGC") prior to the consummation of the settlement agreement with the
ERS.  The remaining approximately 83.33% of the shares of APIC are owned by
AF Investors, LLC ("AF Investors") which is a subsidiary of AFLP.  In 2001,
AFLP redeemed an approximately 4% limited partnership interest held by the
Company in exchange for distribution of a portion of debt from a
consolidated subsidiary of the Company.

     In 2003, 2002 and 2001, the ownership interest in APIC's operations is
reflected on the equity method of accounting.  The accompanying 2003, 2002
and 2001 consolidated statement of operations reflects a net after-tax loss
of $402, $3,068 and $18,582, respectively, 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 2001 to
adjust the carrying value of the golf courses to their estimated market
value.  As of December 31, 2001, AF Investors was a 99.52% owned subsidiary
of AFLP and AFLP was 85.38% owned by Northbrook which held a limited
partnership interest therein.

     In December 2002, AFLP redeemed the interest held by Kaanapali Land
(as successor to Northbrook) for approximately $60.  Kaanapali Land
remained obligated under certain circumstances to fund costs related to,
among other things, golf course improvements required under the settlement
agreement with the ERS described below.  A portion of these funding
obligations is anticipated to be reimbursed by AFLP under the Funding
Agreement entered into by Kaanapali Land, AFLP and certain other affiliated
entities in October 2002.  The Company continued to record its investment
in unconsolidated entities due to its funding obligations and because the
Company was awaiting final consummation of the ERS settlement agreement.
The agreement was consummated on September 9, 2003, and as a consequence,
the Company recorded a gain on disposition of its investment of
approximately $60,134 for financial reporting purposes which represented
the extent of the amount recorded as investment in unconsolidated entities.

See Footnote 8 for additional discussion.

     In addition, equity in income (loss) from unconsolidated investments
includes the gain from the 2002 sale of an interest in a hotel and the
Company's share of the results of operations of the hotel prior to the sale
of the Company's interest.




<PAGE>


(3)  MORTGAGE AND OTHER NOTES PAYABLE

     Each component of the Company's mortgage and other notes payable was
entered into by the separate operating subsidiaries of the Company and
generally places certain specified restrictions on the transfer of an
individual subsidiary's assets, as well as on the use of proceeds generated
from operations and the sales of such assets.

     A summary and description of the Company's mortgage and other notes
payable as of December 31, 2003 and 2002 is as follows:

                                                     2003          2002
                                                   --------      --------
        COLAs (A). . . . . . . . . . . . . .       $  --             --
        Waikele Golf Course (B). . . . . . .          8,288         8,398
        Oahu Sugar mill site (C) . . . . . .          --            2,850
                                                   --------      --------
                                                   $  8,288        11,248
                                                   ========      ========

      (A)   The COLA's and the Senior Indebtedness referred to below were
discharged as to the Debtors and restructured effective on the Plan
Effective Date pursuant to the emergence of the Debtors from bankruptcy in
2002 and the restructuring transactions contemplated by the Plan.  Such
restructuring caused the remaining unsatisfied COLA indebtedness to be
assigned to Kaanapali Land and entitled the previous holders thereof as of
the distribution record date under the Plan who made timely cash elections
under the Plan to receive cash in the amount of $35 per $500 principal
amount of COLAs.  All other holders of COLAs as of the distribution record
date under the Plan are entitled to receive 1 Class A Share of Kaanapali
Land per $500 principal amount of COLAs in conversion of their COLAs.  It
is expected that the restructuring of the COLAs under the Plan will
ultimately result in distributions of cash respecting approximately 25.5%
of the COLAs, anticipated to total approximately $2,490 with the remainder
converted into Class A Shares of Kaanapali Land (or Class B Shares of
Kaanapali Land as described below).  Although a significant portion of such
distributions were made in 2002, they are not anticipated to be
substantially completed until the fourth quarter of 2004 and the Company
has accrued approximately $85 and $700 related to such amounts as of
December 31, 2003 and 2002, respectively.  All of the Senior Indebtedness
(as defined below), COLA note claims and claims held by entities and
individuals affiliated with the Company against the Debtors were converted
into Class B shares of Kaanapali Land.

     The COLAs were unsecured debt obligations of KLC Land, and were
subordinated in priority to all "Senior Indebtedness" (as defined in the
Indenture governing the COLAs).   Senior Debt payable to Northbrook and its
affiliates (including deferred interest) totaled approximately $188,000 at
the Petition Date and has been eliminated in the accompanying consolidated
financial statements.  The COLAs were issued in 1989, were scheduled to
mature on December 31, 2008, and bore interest payable semiannually at 10%
per annum ("Base Interest") of the outstanding principal balance on a
cumulative, non-compounded basis, of which 6% per annum is contingent
("Contingent Base Interest") and payable, only to the extent of Net Cash
Flow or Maturity Market Value (as defined in the Indenture).  KLC Land did
not generate a sufficient level of Net Cash Flow to pay Contingent Base
Interest on the COLAs from 1990 through the Petition Date, and any
remaining obligation to do so was discharged on the Plan Effective Date.
Therefore, no cumulative deferred Contingent Base Interest related to the
period from August 31, 1989 (Final Issuance Date) through the Petition Date
has been paid or accrued in the accompanying consolidated financial
statements.



<PAGE>


     For financial reporting purposes, interest had been accrued on the
COLAs using the effective interest method.  Accordingly, the consolidated
financial statements include Base Interest at 4% per annum ("Mandatory Base
Interest") for the period January 1, 2002 to the Petition Date and the year
ended December 31, 2001.  No interest was accrued after the Petition Date
in accordance with the Plan.  Pursuant to the Plan, the COLAs were
discharged as to the Debtors and restructured effective as of the Plan
Effective Date in return for the distributions mentioned above.

     Extraordinary gain on reorganization, net, is primarily represented by
conversion or retirement by cash payment of the COLAs. The estimated value
of settlement of claims by the COLA holders under the Plan as confirmed by
the Bankruptcy Court was 7% of the outstanding principal balance on such
COLAs.  In addition, general unsecured creditors with allowed claims that
elected (or were deemed to have elected) to receive shares were entitled to
shares having an estimated value of approximately 7% of the allowed claim
amount. Accordingly, 7% of the allowed claims (including the COLAs)
converting to shares was considered a capital contribution and the
remainder of all allowed claims (including the COLAs) was considered
extraordinary gain on reorganization, net.  Creditors, including COLA
Holders, electing cash receive payment on their claims funded through the
$2,850 reflected as "Settlement payments pursuant to the Plan" in the
Consolidated Statements of Cash Flows.  Such settlement payments represent
approximately 7% of the outstanding principal amount of the allowed claims
for those COLA holders receiving cash, and 15% of the allowed claims of
general unsecured creditors receiving cash.

     The non-affiliated COLAs Holders and general unsecured creditors are
to receive Class A shares. Claims of affiliated creditors (including
general unsecured claims, COLA claims and claims on the Senior Indebtedness
of such affiliates) are to receive Class B shares.  As both classes of
shares represent membership interests that have no par value, common shares
in the Consolidated Balance Sheets and the Consolidated Statements of
Stockholders' Equity (Deficit) is reflected at zero.

     The Consolidated Statement of Stockholders' Equity for 2002 reflects
the above as Effect of Reorganization with the Consolidated Balance Sheet
reflecting the fair market value of the settlement as additional paid-in
capital.

     As disclosed in the consolidated statements of cash flows,
approximately $111,000 of extraordinary gain on restructuring was
recognized in 2002 due to reduction in the carrying amounts of COLAs in
accordance with Statement of Position 90-7 (Financial Reporting by Entities
in Reorganization Under the Bankruptcy Code).

     No gain was recognized for financial reporting purposes on the
discharge of Senior Indebtedness.  The Senior Indebtedness was between
entities consolidated and eliminated in the predecessor financial
statements.

      (B)   The Waikele Golf Course debt, secured by the Waikele Golf
Course, had an original principal balance of $8,500, an interest rate of
LIBOR plus 3.75% (LIBOR floor of 3%) (6.75% at December 31, 2003),
principal amortization based on a 25-year amortization schedule and a
maturity date of December 1, 2006.  The loan has certain cash flow and
other financial covenants.



<PAGE>


      (C)   In December 1996, Oahu MS, a wholly-owned subsidiary of
Kaanapali Land, obtained a $10,000 loan facility from City Bank.  The loan,
which had been extended through December 1, 2000 with certain
modifications, was secured by a mortgage on certain property at the Oahu
Sugar mill-site (the sugar plantation was closed in 1995).  Such extended
loan bore interest at the bank's base rate plus 1.25%.  In January 2001,
Oahu MS reached an agreement with the Bank for an extension until
December 1, 2001 with a principal payment of $150 upon execution of the
agreement leaving a remaining outstanding principal balance of $2,850.  On
December 1, 2001, Oahu MS reached an agreement with the bank for an
additional extension until March 1, 2002.  On June 28, 2002, City Bank and
Oahu MS entered into an agreement extending the loan for an additional nine
months to December 1, 2002 at City Bank's base rate plus 2%.  On the
maturity date, Oahu MS did not pay the balance due.  On January 2, 2003,
City Bank filed a complaint for foreclosure.  In January 2003, Oahu MS and
City Bank commenced settlement discussions.  Although City Bank argued that
no agreement has been reached between the two parties, Oahu MS contended
that a valid and enforceable settlement agreement had been reached as to
all material terms providing for a modification and extension of the terms
of the loan in question.  City Bank terminated negotiations regarding the
form of the Loan Modification and Extension Agreement on March 10, 2003.
As a consequence of court-supervised mediation during the period commencing
in August 2003, Oahu MS and Oahu Sugar entered into a settlement of certain
litigation with City Bank and certain other parties and in December 2003
the settlement was consummated.  The settlement resulted in Oahu MS no
longer having title to the property as well as the Company being released
from its obligations relating to the mortgage encumbered by the property.
See Footnote 8 for a more detailed discussion of such settlement.

     Scheduled annual principal maturities on the Company's mortgage note
payable at December 31, 2003 is as follows:

                  2004 . . . . . . .  $   108
                  2005 . . . . . . .      129
                  2006 . . . . . . .    8,051
                                      -------
                  Total. . . . . . .  $ 8,288
                                      =======


(4)  RENTAL ARRANGEMENTS

     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. The Company has formerly been involved in various sandwich leases
for land.  All of such leases have either expired or are subject to
contractual dispute.  See footnote 8.

     The Company leases various office spaces with average annual rental of
approximately $250 per year.  Leases expire at various times through
February 2005.

     Certain leases where Debtors were the lessee were rejected pursuant to
the Plan, which reduced any pre-Petition debt and prospective liability of
the Company for those leases into claims that were allowed under the Plan,
if entitled to distributions of cash or Class A Shares of Kaanapali Land as
provided in the Plan.




<PAGE>


(5)  EMPLOYEE BENEFIT PLANS

     (a)  PENSION PLANS

     As of December 31, 2003, the Company participates in a defined benefit
pension plan that covers substantially all its eligible employees.  The
Plan is sponsored and maintained by Kaanapali Land in conjunction with
other plans providing benefits to employees of Kaanapali Land and its
affiliates.  The Pension Plan for Bargaining Unit Employees of Amfac
Plantations (the "Pension Plan") provides benefits based primarily on
length of service and career-average compensation levels.  Accordingly,
there is no difference between the accumulated benefit obligation and the
projected benefit obligation.  Kaanapali Land'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 such
guidelines, amounts funded may be more or less than the pension expense or
credit recognized for financial reporting purposes.

     The following tables summarize the components of the funded status of
the Company's defined benefit pension plan at December 31, 2003 and 2002,
the net pension credit for 2003, 2002 and 2001, and major assumptions used
to determine these amounts.

                                                          2003       2002
                                                        -------    -------

  Benefit obligation at beginning of year. . . . . . .  $42,731     37,762
  Service cost . . . . . . . . . . . . . . . . . . . .       65         49
  Interest cost. . . . . . . . . . . . . . . . . . . .    2,939      3,041
  Actuarial loss . . . . . . . . . . . . . . . . . . .    4,720      6,112
  Special termination benefit. . . . . . . . . . . . .    1,404        953
  Benefits paid. . . . . . . . . . . . . . . . . . . .   (6,937)    (5,186)
                                                        -------    -------
  Benefit obligation at end of year. . . . . . . . . .   44,922     42,731
                                                        -------    -------

  Fair value of plan assets at beginning of year . . .   60,515     74,687
  Actual return on plan assets . . . . . . . . . . . .   14,292     (8,986)
  Benefits paid. . . . . . . . . . . . . . . . . . . .   (6,937)    (5,186)
                                                        -------    -------
  Fair value of plan assets at end of year . . . . . .   67,870     60,515
                                                        -------    -------

  Funded status. . . . . . . . . . . . . . . . . . . .   22,948     17,784
  Unrecognized net actuarial (gain) loss . . . . . . .    3,029      8,121
  Unrecognized prior service cost. . . . . . . . . . .       12      --
                                                        -------    -------
  Prepaid pension cost . . . . . . . . . . . . . . . .  $25,989     25,905
                                                        =======    =======

     Unrecognized net gains or losses are amortized over a ten year period.

At December 31, 2003, approximately 54% of the plan's assets are invested
in equity securities, 24% in fixed income funds and 21% in alternative
strategies.



<PAGE>


      The components of the net periodic pension benefit (credit) for the
years ended December 31, 2003, 2002 and 2001 (which are reflected as other
income in the consolidated statements of operations) are as follows:

                                                2003      2002       2001
                                              -------   -------    -------

  Service cost . . . . . . . . . . . . . .    $    65        49        128
  Interest cost. . . . . . . . . . . . . .      2,939     3,041      2,897
  Expected return on plan assets . . . . .     (4,647)   (5,462)    (5,753)
  Recognized net actuarial gain. . . . . .        154      (865)    (1,787)
  Amortization of prior service cost . . .          1       (11)       (52)
  Special termination benefit. . . . . . .      1,404       953      1,102
                                              -------   -------    -------

  Net periodic pension credit. . . . . . .    $   (84)   (2,295)    (3,465)
                                              =======   =======    =======

     The principal assumptions used to determine the net periodic pension
benefit (credit) and the actuarial value of the accumulated benefit
obligation were as follows:

  As of January 1,                              2003      2002       2001
  ----------------                            -------   -------    -------

  Discount rate. . . . . . . . . . . . . .       7.0%      7.5%       7.5%
                                              =======   =======    =======

  Rates of compensation increase . . . . .       N/A       N/A        N/A

  Expected long-term rate of return
    on assets. . . . . . . . . . . . . . .       7.0%      7.5%       7.5%
                                              =======   =======    =======

  As of December 31,                            2003      2002       2001
  ------------------                          -------   -------    -------

  Discount rate. . . . . . . . . . . . . .      6.25%      7.0%       7.5%
                                              =======   =======    =======

  Rates of compensation increase . . . . .         3%        3%         3%
                                              =======   =======    =======

  Expected long-term rate of return
    on assets. . . . . . . . . . . . . . .       7.0%      7.0%       7.5%
                                              =======   =======    =======

     The above long-term rates of return were selected based on historical
asset returns and expectations of future returns.

     The measurement date is December 31, the last day of the corporate
fiscal year.  The accumulated benefit obligation at December 31, 2003 and
2002 equals approximately $44,900 and $42,700, respectively.

     A comparison of the market value of the Pension Plan's net assets with
the present value of the benefit obligations indicates the Company's
ability at a point in time to pay future benefits.  The fair value of the
Pension Plan's assets available for benefits will fluctuate and certain
future obligations of the Pension Plan may be subject to bargaining unit
agreements.

     There is no required contribution payable in 2004 to the pension plan.

Furthermore, due to ERISA full funding limits, no contribution, whether
required or discretionary, could be made and deducted on the corporations
tax return for the current fiscal year.


<PAGE>


     The Company's target asset allocations reflect the Company's
investment strategy of maximizing the rate of return on plan assets and the
resulting funded status, within an appropriate level of risk.  Plan assets
are reviewed and, if necessary, rebalanced in accordance with target
allocation levels once every three months.

     (b)  RETIREE HEALTH AND LIFE INSURANCE BENEFITS

     In addition to providing pension benefits, KLC Land and certain of its
affiliates currently provide certain healthcare and life insurance benefits
to certain eligible retired employees.  Where such benefits are offered,
substantially all employees may become eligible for such benefits if they
reach a specified retirement age while employed by KLC Land (or the
applicable affiliate) and if they meet a certain length of service
criteria. The postretirement healthcare plan is contributory and contains
cost-sharing features such as deductibles and copayments.  However, these
features, as they apply to bargaining unit retirees, are subject to
collective bargaining provisions of a labor contract between each such
entity and the International Longshoremen's & Warehousemen's Union as they
may have been amended or settled through agreements or memoranda executed
with the union at about the time each operating facility was closed.  The
postretirement life insurance plan is non-contributory.

     Each relevant entity continues to fund benefit costs for both plans on
a pay-as-you-go basis, and each entity expects to continue funding its
post-retirement health care obligations until the end of 2004, which is a
date on or after the date when its required cost maintenance period as
defined under Internal Revenue Code Section 420 expires.  The affected
entities are reviewing their options in this regard and expect to either
terminate such benefits at the end of 2004 or revise them in order to
significantly reduce their cost, as determined by each entity.  These
entities believe that they generally have no obligation to continue the
post-retirement life insurance benefits, and most terminated such benefits
effective at the end of 2003.  Kaanapali Land has not assumed any
obligation to fund the cost of these benefits on behalf of any of its
affiliates.

     For measuring the expected postretirement benefit obligation, an 11%
annual rate of increase in the per capita claims cost was assumed through
2004. 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 2003 would
increase and (decrease) the medical plans' accumulated postretirement
benefit obligation as of December 31, 2003 by $97 and $(88), respectively,
and the aggregate of the service and interest cost components of net
periodic postretirement benefit cost for the year then ended by $21 and
$(18), respectively.

    Net periodic postretirement benefit credit for 2003, 2002 and 2001
includes the following components:

                                            2003        2002       2001
                                            Total       Total      Total
                                           -------     -------    -------

Service cost . . . . . . . . . . . . .     $     1           1         34
Interest cost. . . . . . . . . . . . .         550         622        887
Amortization of net gain . . . . . . .      (7,777)     (7,879)    (6,327)
Recognized settlement gain . . . . . .        (499)       (233)      (859)
                                           -------     -------    -------
Net periodic postretirement
  benefit credit . . . . . . . . . . .     $(7,725)     (7,489)    (6,265)
                                           =======     =======    =======




<PAGE>


     The following table sets forth the plans' change in benefit obligation
and benefit cost as of December 31, 2003 and 2002 as follows:

                                             December 31,    December 31,
                                                 2003            2002
                                             ------------    ------------

Benefit obligation at beginning of year. .        $ 8,906           9,615
Service cost . . . . . . . . . . . . . . .              1               1
Interest cost. . . . . . . . . . . . . . .            550             622
Actuarial losses . . . . . . . . . . . . .            396             746
Employer contribution. . . . . . . . . . .         (2,091)         (2,075)
Plan change. . . . . . . . . . . . . . . .         (2,419)          --
Curtailment. . . . . . . . . . . . . . . .          --                 (9)
Special termination benefit. . . . . . . .          --                  6
                                                  -------         -------
Benefit obligation at end of year. . . . .          5,343           8,906
Unrecognized net actuarial gain. . . . . .          8,400          14,654
                                                  -------         -------
Accumulated postretirement benefit cost. .        $13,743          23,560
                                                  =======         =======

     The Company's expected contributions for 2004 are approximately
$1,600.

     These entities currently amortize 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 being amortized over four years,
commencing in 2001.  In addition, due to the significant total amount of
unrecognized gain at December 31, 2003, 2002 and 2001, 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, 2003 and 2002, these entities may, in
the future, change their amortization policy to accelerate the recognition
of the unrecognized gain. In considering such change, they 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 cash flows, but could have a significant effect on
an entity's statement of operations.

      The weighted-average discount rate used in determining the
accumulated postretirement benefit obligation was 6.25% as of December 31,
2003 and 7% as of December 31, 2002.

     The Association has elected to defer recognition of the effects, if
any, of the Medicare Prescription Drug Improvement and Modernization Act of
2003 on the actuarial projections and assumptions presented above.


(6)  INCOME TAXES

     Income tax expense (benefit) attributable to income from continuing
operations for the years ended December 31, 2003, 2002 and 2001 consists
of:

                                        Current      Deferred     Total
                                        --------     --------    --------
     Year ended December 31, 2003:
       U.S. federal. . . . . . . . .    $  --           9,177       9,177
       State . . . . . . . . . . . .       --           1,049       1,049
                                        --------     --------    --------
                                        $  --          10,226      10,226
                                        ========     ========    ========



<PAGE>


                                        Current      Deferred     Total
                                        --------     --------    --------
     Year ended December 31, 2002:
       U.S. federal. . . . . . . . .    $  --         (13,588)    (13,588)
       State . . . . . . . . . . . .       --          (1,553)     (1,553)
                                        --------     --------    --------
                                        $  --         (15,141)    (15,141)
                                        ========     ========    ========

     Year ended December 31, 2001:
       U.S. federal. . . . . . . . .    $  --          (3,107)     (3,107)
       State . . . . . . . . . . . .       --            (355)       (355)
                                        --------     --------    --------
                                        $  --          (3,462)     (3,462)
                                        ========     ========    ========

     Income tax benefit attributable to income from continuing operations
differs from the amounts computed by applying the U.S. federal income tax
rate of 35 percent to pretax loss from operations as a result of the
following:
                                          2003         2002        2001
                                        --------     --------    --------
Computed "expected" tax provision
 (benefit) . . . . . . . . . . . . .    $  7,255       (3,842)    (10,723)
Reduction in income taxes resulting
 from:
  Net loss from unconsolidated
    investment . . . . . . . . . . .         157        1,197       7,247
  Increase (reduction) in
    valuation allowance. . . . . . .       3,756      (12,766)      --
  Other, net . . . . . . . . . . . .        (942)         270          14
                                        --------     --------    --------
      Total. . . . . . . . . . . . .    $ 10,226      (15,141)     (3,462)
                                        ========     ========    ========


     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.
The deferred tax effects of temporary differences at December 31, 2003 and
2002 are as follows:
                                                       2003        2002
                                                     --------    --------
    Deferred tax assets:
      Post retirement benefits . . . . . . . . .     $ (5,360)     (9,188)
      Reserves related primarily to losses
        on divestitures. . . . . . . . . . . . .       (9,583)    (12,880)
      Loss carryforwards . . . . . . . . . . . .       (4,776)     (3,870)
      Tax credit carryforwards . . . . . . . . .       (4,144)     (4,258)
      Other, net . . . . . . . . . . . . . . . .       (3,301)       (753)
                                                     --------    --------
        Total deferred tax assets. . . . . . . .      (27,164)    (30,949)
        Less - valuation allowance . . . . . . .        7,932       4,175
                                                     --------    --------
        Net deferred tax assets. . . . . . . . .      (19,232)    (26,774)
                                                     --------    --------
    Deferred tax liabilities:
      Property, plant and equipment,
        principally due to purchase
        accounting adjustments,
        net of impairment charges. . . . . . . .       28,465      25,814
      Prepaid pension and core retirement
        award costs. . . . . . . . . . . . . . .       10,136      10,103
                                                     --------    --------
          Total deferred tax liabilities . . . .       38,601      35,917
                                                     --------    --------
          Net deferred tax liability . . . . . .     $ 19,369       9,143
                                                     ========    ========



<PAGE>


     The net deferred tax liability was reduced by approximately $30,000
due to the restructuring and has been reflected as a component of the
Extraordinary gain on reorganization in 2002.

     At December 31, 2003, the Company has net operating loss carryforwards
("NOLs") for federal income tax purposes of approximately $6 million and
approximately $58 million for state income tax purposes which can be used
to offset taxable income, if any, in future years.  The federal NOLs begin
to expire in 2016.  The increase in the valuation allowance is primarily
due to the reserve for financial reporting purposes of net operating losses
and tax credit carry forwards.  The state NOLs, primarily in the state of
Hawaii, have significant expiration dates commencing in 2005.  NOLs have
generally been reserved because utilization is dependent on future events
that cannot be reasonably predicted.  The Company also has available
alternative minimum tax credits which can be used to offset future federal
income taxes, if any.  The alternative minimum tax credits aggregated
approximately $4 million as of December 31, 2003 and can be utilized over
an indefinite period.  U.S. Federal tax return examinations have been
completed for years through 1997.  The Company believes adequate provisions
for income tax have been recorded for all years.  As a result of the
examination relative to the years 1998-2000 the IRS has proposed
adjustments, which in the aggregate reflect deficiencies in taxes of
approximately $7.4 million (before interest).  The Company is in the
process of reviewing the proposed adjustments and intends to contest the
deficiency.  The statutes of limitations with respect to the Company's tax
returns for 2001 through 2003 remain open.


(7)  TRANSACTIONS WITH AFFILIATES

     An affiliated insurance agency, JMB Insurance Agency, Inc., earns
insurance brokerage commissions in connection with providing the placement
of insurance coverage for certain of the properties and operations of the
Company.  Such commissions are believed by management to be comparable to
those that would be paid to such affiliate insurance agency in similar
dealings with unaffiliated third parties, and are generally paid by the
insurance carriers that the agency represents out of the premiums paid by
the Company for such coverage.  The total of such commissions for the years
ended December 31, 2003, 2002 and 2001 (including amounts related to
discontinued operations in 2001) was approximately $102, $75 and $1,100,
respectively, not all of which was paid as of December 31, 2003.

     The Company pays a non-accountable reimbursement of $30 per month to
JMB Realty Corporation in respect of general overhead expense, all of which
was paid as of December 31, 2003.

     The Company reimburses their affiliates for direct expenses incurred
on its behalf, including salaries and salary-related expenses incurred in
connection with the management of the Company's operations.  Generally, the
entity that employs the person providing the services receives the
reimbursement.  Substantially all of such reimbursable amounts were
incurred by JMB Realty Corporation or its affiliate, Management Services,
LLC, during 2003.  The total costs for the years ended 2003, 2002 and 2001
were approximately $1,800, $2,000 and $1,100, respectively, of which
approximately $105 was unpaid as of December 31, 2003.

     Employees of certain of the Company's unconsolidated affiliates were
entitled to participate in the Company's defined contribution pension plan.

Pursuant to an agreement through December 31, 2001 Northbrook was entitled
to receive a payment from such affiliates in an amount equal to the service
cost related to these employees. The amount of the payment for 2001 was
$1,200, all of which was paid as of December 31, 2003.

     The Company had other amounts due from affiliates of approximately
$300 and $300 at December 31, 2003 and 2002, respectively.




<PAGE>


(8)  COMMITMENTS AND CONTINGENCIES

     Material legal proceedings of the Company are described below.  Unless
otherwise noted, the parties adverse to the Company in the legal
proceedings described below have not made a claim for damages in a
liquidated amount and/or the Company believes that it would be speculative
to attempt to determine the Company's exposure relative thereto, and as a
consequence believes that an estimate of the range of potential loss cannot
be made.  In proceedings filed prior to the Petition Date where a Debtor is
a defendant, such proceedings were stayed as against such Debtor by the
filing of the Reorganization Case.  Those proceedings may now continue
since the Plan Effective Date has occurred so long as the plaintiffs
therein filed timely claims under the Plan.  However, any judgments
rendered therein would be subject to the distribution provisions of the
Plan, which would in most cases result in the entitlement of such claims to
proceeds that are substantially less than the face amount of such
judgments.  Any claims that were not filed on a timely basis under the Plan
have been discharged by the Bankruptcy Court and thus the underlying legal
proceedings should not result in any liability to the Debtors.  Proceedings
against subsidiaries or affiliates of Kaanapali Land that are not Debtors
were not stayed by the Plan and may proceed.

     APIC, which is not a Debtor and was owned approximately 16.7% by the
Company, was the primary borrower under a $66,000 loan made by the ERS in
1991.  The loan, which had a balance as of September 9, 2003 of
approximately $83,000, is secured by the RKGC (and certain adjacent lands).

All of APIC's assets are subject to the loan.  The loan matured in June
2001 and was not extended, despite efforts of the borrowers to obtain such
an extension.

     The borrowers were engaged in settlement negotiations with ERS at
least since 2000, which negotiations resulted in the execution of the ERS
Settlement Agreement in March 2003.  On September 9, 2003, the Company and
APIC consummated their settlement agreement with the ERS. As a consequence
of such transaction, the Company and APIC no longer have any interest in or
obligation to the Royal Kaanapali Golf Courses. However, the Company has
received certain easements and other rights respecting certain of the golf
course land, including, among other things, drainage rights, utility line
easements, access rights and the right to reconfigure one of the golf holes
to accommodate the construction of a road to serve certain other land owned
by the Company. In 2003 the Company escrowed cash as required by the
settlement agreement in the approximate amount of $1,500, primarily to
satisfy certain debts of APIC to its former creditors and employees and to
ensure that funds are available for the reconfiguration of the golf hole as
described above.  The Company recently entered into a contract for the
completion of such reconfiguration work which required the Company to
deposit an additional approximate amount of $200 into such escrow.  Such
work is expected to be conducted during the second and third quarters of
2004.  A portion of the amounts so funded are expected to be reimbursed to
the Company by AFLP.  As discussed below, an additional amount of
approximately $1,100 was funded by the Company to satisfy certain of its
obligations relating to the settlement, other than through the closing
escrow, primarily relating to former employees, which amount was paid
during the fourth quarter of 2003.  The settlement also provides the
Company and its affiliates and related parties with various releases from
the ERS and ensures that the ERS will file no claims with the Bankruptcy
Court.

     Concurrently with the consummation of the ERS Settlement Agreement,
APIC entered into a mutual release agreement with the union representing
the bargaining unit employees employed by APIC at the time the receivership
commenced.  Such agreement resulted in certain amounts being paid or
distributed to such employees in return for releases by each of them and
the union in favor of APIC and the Company.  APIC handled its former non-
bargaining unit employees employed at the RKGC in substantially the same
manner.  The total amount paid to APIC's former employees as a consequence
of the consummation of such settlement was approximately $1,100 and was
paid during the fourth quarter of 2003.



<PAGE>


     On September 20, 1996, Oahu Sugar Company, LLC, successor by merger to
Oahu Sugar Company, Limited ("Oahu Sugar") and a subsidiary of Kaanapali
Land, filed a lawsuit (the "First Arakaki Case"), 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, which is a
Non-Debtor KLC Subsidiary, 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 $2,600 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.  Since no appeal bond was obtained, 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 also 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 was to be entered as of
March 2, 2000 or a new judgment order was 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 was 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


<PAGE>


January 20, 2000 through April 12, 2001.  From and after entry of the
order, post-judgment interest was to accrue on the unpaid balance at the
statutory rate of ten percent per annum until paid in full.  Oahu Sugar
continued to pursue its appeal in the First Arakaki Case and the opposing
side filed a cross appeal seeking further relief on any potential retrial
of the matter.  The case was fully briefed and was awaiting a decision by
the Hawaii Supreme Court.  However, the First Arakaki Case is subject to an
overall potential settlement with the Second Arakaki Case and the City Bank
Foreclosure case, each as described below.

     On or about December 15, 2000, Oahu Sugar and Oahu MS Development
Corp. ("Oahu MS", f/k/a Amfac Property Development Corp.), subsidiaries of
Kaanapali Land, among others, were named in a lawsuit (the "Second Arakaki
Case") 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.  This case is also the subject of a potential
settlement as described below.  In the complaint, as amended, plaintiffs
sought a declaration that certain conveyances of real estate made by Oahu
Sugar or Oahu MS, 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 the First Arakaki Case.  Plaintiffs sought, 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 Oahu MS, the Young Men's Christian Association
of Honolulu ("YMCA"), and the Filipino Community Center, Inc. ("FCC"),
among others, all over the years 1996-2000.  Although the amount of damages
sought in the Second Arakaki Case was unspecified, the case arose in
connection with the plaintiffs' efforts to realize on their judgment in the
First Arakaki Case described above.  The YMCA and FCC were also named
defendants in this action and have filed cross-claims for relief against
Oahu Sugar and Oahu MS 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 Oahu MS 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 matter.

     On October 23, 2002, Oahu MS was named in a civil action entitled City
Bank v. Amfac Property Development Corp., et al, pending in the Circuit
Court of the First Circuit, State of Hawaii, Civil No. 02-2494-10.  In this
case, plaintiff sought injunctive relief and declaratory relief to cease
actions preventing City Bank and its consultants from gaining access to the
mortgaged property for environmental testing.  In addition, the complaint
sought unspecified damages as may be shown at trial, costs, interest and
reasonable attorneys' fees, and such other further relief as the Court
would choose to award.  A stipulation for dismissal without prejudice was
entered on July 9, 2003.



<PAGE>


     On January 2, 2003, Oahu MS was named in a civil action (the "City
Bank Foreclosure Case") entitled City Bank v. Amfac Property Development
Corp., et al, in the Circuit Court of the First Circuit, State of Hawaii,
Civil No. 03-1-0005-01.  In this case, plaintiff sought foreclosure of
property owned by Oahu MS and encumbered by a mortgage in favor of City
Bank.  City Bank made a $10,000 loan to APDC under a loan agreement dated
December 18, 1996.  The loan became due on December 1, 2002.  City Bank
claimed that as a result of Oahu MS's failure to pay the loan when due,
Oahu MS was in default under the loan documents.  It alleged that the
amount due as of December 2, 2002 was approximately $2,900 plus a per diem
charge of approximately $1 accruing on the unpaid principal, until payment
was made and/or interest changes, plus advances and expenses incurred in
connection with the action.  In its complaint, City Bank sought all amounts
allegedly due and owing to City Bank, together with legal interest
thereafter to accrue thereon and all advances, costs and attorneys' fees; a
foreclosure decree and sale; the appointment of a receiver to conduct an
environmental audit on a specified portion of the secured property and to
collect rents being paid on a portion of the mortgaged properties that
consist of subleases on improved land; the entry of an order of deficiency
against APDC to the extent such exists after sale with execution to follow
thereon; and such other relief as the court may deem proper.  This action
had been consolidated with the Second Arakaki Case described above
(together, the "Consolidated Action").  Together with the Complaint, City
Bank filed a Motion for Appointment of Receiver alleging that it was
entitled to have a receiver appointed for an environmental audit on the
mortgaged property and collection of all net rental income assigned to City
Bank.  With regard to the subleases, on June 28, 2002, Oahu MS and City
Bank executed three assignments of net rental income as security for the
loan Oahu MS had obtained from City Bank in 1996 ("Assignments").  Two of
the Assignments pertained to subleases under leases with the Trustees Under
the Will and of the Estate of Bernice Pauahi Bishop, deceased, also known
as Kamehameha Schools ("Trustees"): Lease Number 24,710 ("Bougainville
Assignment"), and Lease Number 24,720 ("Halawa Assignment").  The third
Assignment pertained to subleases and leases with Queen's Hospital located
on Bougainville Industrial Park and the Halawa Light Industrial Park
("Queen's Assignment").  The three Assignments gave City Bank certain
rights in the net rental income derived from each of the properties.  This
motion was granted.

     The parties to the City Bank Foreclosure Action commenced settlement
discussions in January 2003.  Although City Bank argued that no agreement
had been reached between the two parties, Oahu MS contended that a valid
and enforceable settlement agreement had been reached as to all material
terms providing for a modification and extension of the terms of the loan
in question.

     On May 12, 2003, City Bank filed a motion for partial summary judgment
against all defendants and interlocutory decree of foreclosure and for
entry of final judgment pursuant to Hawaii Rules of Civil Procedure 54(b),
seeking foreclosure on the Assignments.  The motion was granted at a
hearing on June 16, 2003.

     Soon thereafter, on June 5, 2003, Trustees filed a motion to intervene
in order to assert their interests in the rental income from the Halawa and
Bougainville Assignments.  Trustees' Motion was granted on July 23, 2003,
and Trustees filed their answer to complaint in this action on July 24,
2003, with a Cross-Claim against Oahu MS.  Thereafter, Trustees, City Bank
and Oahu MS reached agreement on the terms of a stipulation pertaining to
the receivership.



<PAGE>


     Mediation of the Consolidated Action and certain matters concerning
the receivership commenced in late August 2003.  Trustees did not
participate in the mediation as their claims as intervenor had been
resolved through agreement with City Bank and their claims against Oahu MS
were to be determined through the arbitration proceedings described below.
However, Oahu Sugar did participate in the mediation in order that both
Oahu MS and its affiliates could achieve an overall settlement of the
claims surrounding both the Consolidated Action and the First Arakaki Case.

Mediation was unsuccessful at the initial session; however, the parties
continued to meet thereafter with the participation of the mediator and,
occasionally, the judge in the Consolidated Action.  This resulted in a
settlement that was signed by the attorneys for all parties in late
September 2003.  Such agreement provided the principal terms of the
settlement and stated that a more formal and detailed settlement agreement
would be drafted and signed.

     In December 2003 the settlement was consummated.  In general, the
terms of the settlement provided that Oahu MS convey the mill site property
that is encumbered by the City Bank loan to City Bank and pay Swift and
Arakaki the amount of $100, and pay City Bank certain expenses of the
transactions.  YMCA and FCC also contributed money to the settlement, as
well as Ticor Title Insurance Company, which had written title insurance
policies insuring City Bank and YMCA.  City Bank provided the plaintiffs
with what amounted to a participation in the property and will perform any
environmental cleanup required on the property.  All parties were released
from the claims brought against them in the Consolidated Action and the
First Arakaki Case, effective as of the date that is 91 days after the
property was deeded by Oahu MS to City Bank.  In connection with the
settlement, the Company reversed a previous accrual of $4,900 and reported
such as a reduction in general and administrative expenses.  In addition,
the Company recorded a gain on the extinguishment of the City Bank loan of
approximately $500.

     On June 3, 2003, Trustees filed a Complaint against Oahu MS and City
Bank in Trustees Under the Will and the Estate of Bernice Paugahi Bishop,
deceased, also known as Kamehameha Schools v. Amfac Property Development
Corp., et al, in the Circuit Court of the First Circuit, State of Hawaii,
Civil No. 03-1-1154-05, seeking, among other things, cancellation of its
leases with APDC (the leases are the subject matter of the Halawa and
Bougainville Assignments discussed above), collection of unpaid net rents
on the leases, and appointment of a receiver to collect future subrents
under the subleases.  Concurrent therewith, Trustees filed a motion for
appointment of receiver.  Oahu MS filed its answer on June 24, 2003.

     On July 2, 2003, Oahu MS filed a demand for arbitration of Trustees'
claims with the American Arbitration Association ("AAA"), and on July 3,
2003, APDC filed a motion to dismiss, or in the alternative, to stay
plaintiffs' complaint pending arbitration.  On July 2, 2003, Trustees filed
a motion for partial summary judgment against all defendants.  Both motions
were set to be heard on August 11, 2003.  Prior to that date, however, the
Court informally advised the parties that it would likely enforce the
arbitration provisions contained in the leases, and the parties thereafter
reached agreement on a stipulation staying the case pending arbitration.
The parties thereafter entered into mediation and have reached a settlement
in principle, pending the collection of various information necessary to
the completion thereof.  There are no assurances that the settlement will
be consummated.



<PAGE>


     On or about February 23, 2001 Kekaha Sugar Co., Ltd., a subsidiary of
Kaanapali Land, 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.  The United States
Environmental Protection Agency has performed a visual inspection of the
property and indicated there will be some testing performed.  HDOH has
performed some testing at the site and results are pending.  Kekaha Sugar
Co., Ltd. is substantially without assets and further pursuit of this
matter by HDOH could have a material adverse effect on the financial
condition of Kekaha Sugar Co., Ltd.

     On or about February 23, 2001, Lihue Plantation received a similar
letter from the HDOH assigning the LPCo 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 Plantation 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.  Lihue Plantation is
substantially without assets and further pursuit of this matter by HDOH
could have a material adverse effect on the financial condition of LPCo.

     Pioneer Mill is engaged in an ongoing cleanup arising out of the
discovery of petroleum contamination found at the Pioneer Mill site.  The
Pioneer Mill site has been assigned a high priority and the HDOH has shown
an interest in the environmental conditions relating to or arising out of
the former operations of Pioneer Mill.  These issues will have to be
addressed as they are raised.  Pioneer Mill has received a report on the
results of environmental testing conducted on the site by the United States
Environmental Protection Agency and HDOH.  Pioneer Mill is currently making
arrangements to address the issues evidenced by the test results, which are
not currently believed to be material to the Company.  EPA has designated
HDOH as the oversight agency for Pioneer Mill.

     As a result of an administrative order issued to Oahu Sugar by the
HDOH, Order No. CH 98-001, 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.  Oahu Sugar has submitted a
Remedial Investigation Report to the HDOH.  The HDOH has provided comments
which indicate additional testing may be required.  Oahu Sugar has
responded to these comments with additional information.  Oahu Sugar is
substantially without assets and further pursuit of this matter by HDOH
could have a material adverse effect on the financial condition of Oahu
Sugar.  On January 9, 2004, the United States Environmental Protection
Agency, Region IX (hereinafter, "EPA"), issued a request to Oahu Sugar
seeking information related to the actual or threatened release of
hazardous substances, pollutants and contaminants at the Waipio Peninsula
portion of the Pearl Harbor Naval Complex National Priorities List
Superfund Site.  The request seeks, among other things, information
relating to the ability of Oahu Sugar to pay for or perform a clean up of
the land formerly occupied by Oahu Sugar.  Oahu Sugar is in the process of
responding to the information requests.  Oahu Sugar is substantially
without assets and the pursuit of any action, informational, enforcement,
or otherwise, could have a material adverse effect on the financial
condition of Oahu Sugar.


<PAGE>


     The IRS filed a claim in the bankruptcy proceedings in the aggregate
amount of approximately $20,600 for taxes, interest and penalties related
to the years 1998-2000.  However, the Company has entered into a
stipulation with the IRS whereby the IRS has withdrawn its claim due to the
fact that the Plan leaves the IRS unimpaired relative to any taxes that may
be due.  As a result of the examination relative to the years 1998-2000 the
IRS has proposed adjustments which in the aggregate reflect deficiencies in
taxes of approximately $7,400 (before interest).  The Company is in the
process of reviewing the proposed adjustments and intends to contest the
deficiency.  However, there can be no assurance that the Company will be
successful in such contest and, although the Company has reserved for
potential tax liabilities on its financial statements, to the extent that
the Company is unsuccessful in defending against any such claims, the
amount for which the Company could be liable could be material.

     EC Managers, Inc., a subsidiary of Kaanapali Land, and general partner
of EC Partners, L.P., formerly known as Arvida/JMB Partners, L.P.-II (the
"Partnership"), was named a defendant in a lawsuit filed on January 11,
1996 in the Circuit Court in and for the Eighteenth Judicial Circuit,
Seminole County, Florida entitled Land Investment I, Ltd., Heathrow Land &
Development Corporation, Heathrow Shopping Center Associates and Paulucci
Investments v. Arvida/JMB Managers-II, Inc., Arvida/JMB Partners, L.P.-II,
Arvida Company and JMB Realty Corporation, Case No. 96-62-CA-15E.  The
complaint, as amended, included counts for breach of the management
agreement, fraud in the inducement and conspiracy to commit fraud in the
inducement, breach of the Heathrow partnership agreement and constructive
trust in connection with the purchase and management of the Heathrow
development.  Plaintiffs sought, among other things, unspecified
compensatory damages, punitive damages, prejudgment interest, attorneys'
fees, costs, and such other relief as the Court deemed appropriate.

     On June 24, 1999, the Court granted partial summary judgment in favor
of the plaintiffs against Arvida Company, finding that Arvida Company owed
plaintiffs a fiduciary duty as a broker and advisor under the management
agreement.  The ruling did not reach the issue of the statute of
limitations defense nor whether any such duties were owed in connection
with the Partnership's acquisition of an interest in the Heathrow
development through the Heathrow partnership.

     On October 16-17, 2003, the court heard arguments relating to the
parties' motions for summary judgment.  After argument, the court indicated
that it was inclined to enter an order striking all but one claim.  At a
mediation held on October 18, 2003, the parties entered into a settlement
agreement resolving the entire case in consideration of the payment of
$3,250 made on behalf of all of the defendants.  A subsidiary of the
Company that was the general partner of one of the defendants agreed to
contribute $1,950 to the settlement payment.  Mutual general releases were
entered into between the parties and the case was dismissed with prejudice
on October 24, 2003.

     Kaanapali Land, as successor by merger to other entities, and D/C
Distribution Corporation ("D/C"), a subsidiary of Kaanapali Land, have been
named as defendants in personal injury actions allegedly based on exposure
to asbestos.  There are approximately 130 cases against such subsidiary
that are pending on the mainland and are alleged based on such subsidiary's
prior business operations.  Each company believes that it has meritorious
defenses against these actions, but can give no assurances as to the
ultimate outcome of these cases.  In the case of D/C, there can be no
certainty that it will be able to satisfy all of its liabilities for these
cases, as it is without assets to satisfy any material existing or future
judgments, there can be no assurances that these cases (or any of them), if
adjudicated in a manner adverse to the subsidiary, will not have a material
adverse effect on the financial condition of such subsidiary.  Kaanapali
Land does not believe that it has liability, directly or indirectly, for
such subsidiary's obligations.



<PAGE>


     Northbrook Corporation ("Northbrook"), a predecessor by merger to
Kaanapali Land was named in a lawsuit filed in August 2003 in the Circuit
Court of Cook County, Chicago, Illinois, styled Silverado Golf & Country
Club, Inc. v. JMB Realty Corporation and Northbrook Corporation.  The
lawsuit sought unspecified damages and alleges that the defendants engaged
in fraudulent conduct in connection with the administration and termination
of a defined benefit pension plan that had been sponsored by Northbrook
Corporation and certain affiliates and predecessors.  The complaint has
since been amended.  In the eight count amended complaint, plaintiff seeks
unspecified general damages, the imposition of a constructive trust, an
accounting, attorneys' fees and costs, interest, punitive damages and such
other further relief as is deemed appropriate by the court under the
circumstances.  Plaintiff seeks return of approximately $1,000 in pension
related costs paid by it over the period 1989-1994, the return of all
pension related costs paid by it since 1995, and all fees, costs and other
consideration charged to or received by defendants from plaintiff since
1988.  The participants in the pension plan included employees of an
affiliate who were engaged in employment at the Silverado Country Club &
Resort, in Napa, California (the "Resort").  The Resort was and continues
to be operated pursuant to a Management Agreement between the plaintiff and
Xanterra Parks & Resorts, L.L.C. ("Xanterra"), a former subsidiary of
Northbrook that continues to be under common control with the defendants.
The plaintiffs are also pursuing their claims in a separate action against
Xanterra that is currently being arbitrated in San Francisco, California.
The defendants in the Chicago action vigorously deny all of the plaintiff's
claims.  Although the amended complaint has only recently been filed and an
answer has not yet been filed, the defendants intend to defend, among other
things, on the basis that it had no relationship with the plaintiff and no
duties to them whatsoever and that the plaintiff was not a participating
employer in the pension plan and otherwise had no interest therein.  In
addition, to the extent that the California arbitration is decided in favor
of Xanterra, such decision would provide further defenses for Kaanapali
Land (as successor by merger to Northbrook).  However, there can be no
assurance that the plaintiffs will not ultimately prevail on some or all of
their claims.

     Other than as described above and the Reorganization Case 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.


(9)  DISCONTINUED OPERATIONS

     In December 2001, the Company consummated a non-taxable spin-off of
Resorts to its shareholders.  Accordingly, Resorts is no longer a
subsidiary of Kaanapali Land and is classified as a discontinued operation.



<PAGE>


     Resorts' income statement information for 2001 was as follows:

                                                                   2001
                                                                 --------
Revenues:
  Sales. . . . . . . . . . . . . . . . . . . . . . . . . . . .   $229,524
  Other income . . . . . . . . . . . . . . . . . . . . . . . .      4,082
                                                                 --------
                                                                  233,606
                                                                 --------
Costs and expenses:
  Cost of sales. . . . . . . . . . . . . . . . . . . . . . . .    150,123
  Selling, general and administrative. . . . . . . . . . . . .     51,083
  Interest . . . . . . . . . . . . . . . . . . . . . . . . . .      8,133
  Depreciation and amortization. . . . . . . . . . . . . . . .     18,710
                                                                 --------
                                                                  228,049
Income from discontinued operations before income taxes. . . .      5,557

Income tax benefit (provision) . . . . . . . . . . . . . . . .      4,537
                                                                 --------

Income from discontinued operations. . . . . . . . . . . . . .   $ 10,094
                                                                 ========


(10) BUSINESS SEGMENT INFORMATION

     As described in Note 1, the Company operates in three business
segments.  Total revenues, operating profit, identifiable assets, capital
expenditures, and depreciation and amortization by business segment are
presented in the tables below.

     Total revenues by business segment includes primarily (i) sales, all
of which are from unaffiliated customers and (ii) interest income that is
earned from outside sources on assets which are included in the individual
industry segment's identifiable assets.

     Operating profit is comprised of total revenue less operating
expenses.  In computing operating profit, none of the following items have
been added or deducted:  general corporate revenues and expenses, interest
expense, income taxes, equity in income (loss) from unconsolidated
investments and gain from the extinguishment of debt.

     Identifiable assets by business segment are those assets that are used
in the Company's operations in each industry. Corporate assets consist
principally of cash and cash equivalents, prepaid pension costs and
receivables related to previously divested businesses. Investments in net
assets of unconsolidated investments are related to ownership interests
held by the Company primarily in various real estate related entities.

                                          2003         2002        2001
                                        --------     --------    --------
Revenues:
  Property . . . . . . . . . . . . .    $ 61,492        4,753      50,636
  Agriculture  . . . . . . . . . . .       1,241        1,972       4,252
  Golf . . . . . . . . . . . . . . .       4,141        4,360       4,175
  Corporate. . . . . . . . . . . . .       5,074           27      22,831
                                        --------     --------    --------
                                        $ 71,948       11,112      81,894
                                        ========     ========    ========



<PAGE>


                                          2003         2002        2001
                                        --------     --------    --------
Operating Profit (loss):
  Property . . . . . . . . . . . . .    $ 21,234        1,323     (17,806)
  Agriculture  . . . . . . . . . . .        (912)      (8,028)     (3,742)
  Golf . . . . . . . . . . . . . . .         580          764         120
                                        --------     --------    --------

Operating income (loss). . . . . . .      20,902       (5,941)    (21,428)

Corporate. . . . . . . . . . . . . .       1,357       (7,819)     15,144
Interest expense . . . . . . . . . .      (1,129)      (2,395)    (11,387)
Equity in income (loss) from
  unconsolidated investments . . . .        (402)       5,180     (12,967)
                                        --------     --------    --------
Loss from continuing operations
  before income taxes. . . . . . . .    $ 20,728      (10,975)    (30,638)
                                        ========     ========    ========

Identifiable Assets:
  Property . . . . . . . . . . . . .    $ 65,919       55,970      67,410
  Agriculture. . . . . . . . . . . .      48,091       51,419      64,760
  Golf . . . . . . . . . . . . . . .      29,084       29,076      29,441
                                        --------     --------    --------
                                         143,094      136,465     161,611

Corporate. . . . . . . . . . . . . .      46,379       53,161      62,017
                                        --------     --------    --------
                                        $189,473      189,626     223,628
                                        ========     ========    ========


     Agricultural identified assets include land classified as agricultural
or conservation for State and County purposes.

                                          2003         2002        2001
                                        --------     --------    --------
Capital Expenditures:
  Property . . . . . . . . . . . . .    $    861        --             13
  Agriculture. . . . . . . . . . . .         197        --             20
  Golf . . . . . . . . . . . . . . .         132          163         499
  Corporate. . . . . . . . . . . . .       --              15       --
                                        --------     --------    --------
                                        $  1,190          178         532
                                        ========     ========    ========
Depreciation and Amortization:
  Property . . . . . . . . . . . . .    $     87           90          86
  Agriculture. . . . . . . . . . . .          60        1,417       1,924
  Golf . . . . . . . . . . . . . . .         609          552         839
  Corporate. . . . . . . . . . . . .         408          935         772
                                        --------     --------    --------
Total. . . . . . . . . . . . . . . .    $  1,164        2,994       3,621
                                        ========     ========    ========




<PAGE>


(11) CALCULATION OF NET INCOME PER SHARE

     The following tables set forth the computation of net income (loss)
per share - basis and diluted:

                                      For the        For the
                                       Period        Period
                                     January 1,    November 14,
                      Year Ended    2002 through   2002 through Year Ended
                      December 31,  November 13,   December 31, December 31,
                         2003          2002           2002         2001
                      ------------  ------------   ------------ ------------
                           (Amounts in thousands except per share amounts)
NUMERATOR:
Operating income
  (loss) . . . . . . . $   21,130        (2,117)       (14,038)     (17,671)
                       ==========    ==========     ==========   ==========
Equity in income
  (loss) from
  unconsolidated
  investments. . . . .       (402)        5,525           (345)     (12,967)
                       ==========    ==========     ==========   ==========
Income from
  continuing
  operations . . . . .     10,502        12,939         (8,773)     (27,176)

Income from
  discontinued
  operations . . . . .      --            --             --          10,094

Gain on disposition
  of unconsolidated
  investment . . . . .     60,134         --             --           --

Extraordinary gain . .      --          136,618          --           --
                       ----------    ----------     ----------   ----------
Net income (loss). . . $   70,636       149,557         (8,773)     (17,082)
                       ==========    ==========     ==========   ==========

DENOMINATOR:
Denominator for
  net income (loss)
  per share -
  basic and
  diluted. . . . . . . $    1,791             4          1,863            4
                       ==========    ==========     ==========   ==========
Net income (loss)
  per share -
  basic and
  diluted. . . . . . .      39.44     37,389.34          (4.71)   (4,270.50)
                       ==========    ==========     ==========   ==========
Net income per
 share - basic:
Income (loss)
  from continuing
  operations . . . . . $     5.86      3,234.84          (4.71)   (6,794.00)
Income from
  discontinued
  operations . . . . .      --            --             --        2,523.50
Gain on disposition
  of unconsolidated
  investment . . . . .      33.58         --             --           --
Extraordinary gain . .      --        34,154.50          --           --
                       ----------    ----------     ----------   ----------
Net income per
  share basic and
  diluted. . . . . . . $    39.44     37,389.34          (4.71)   (4,270.50)
                       ==========    ==========     ==========   ==========



<PAGE>


     Pursuant to the Plan, a maximum of 1,863,000 shares of the Company are
issuable.  As of December 31, 2003, the Company had issued and outstanding
1,631,513 Class B shares, non par value, and approximately 159,761 Class A
shares, non par value stock.  The LLC Agreement provides for two classes of
membership interests, Class A Shares and Class B Shares, which have
substantially identical rights and economic value under the LLC Agreement;
except that holders of Class A Shares are represented by a "Class A
Representative" who must approve certain transactions proposed by Kaanapali
Land  before they can be undertaken.  Class B Shares are held by Pacific
Trail and various entities and individuals that are affiliated with Pacific
Trail.  Class A Shares were issued under the Plan to claimants who had no
such affiliation.


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 2003 and 2002.


ITEM 9A. CONTROLS AND PROCEDURES

     The principal executive officer and the principal financial officer of
the Company have evaluated the effectiveness of the Company's disclosure
controls and procedures as defined in Rule 13a-15(e) of the Securities
Exchange Act of 1934, as amended, (the "Exchange Act") as of the end of the
period covered by this report.  Based on such evaluation, the principal
executive officer and the principal financial officer have concluded that
the Company's disclosure controls and procedures were effective to ensure
that information required to be disclosed was recorded, processed,
summarized and reported within the time periods specified in the applicable
rules and form of the Securities and Exchange Commission.


                                   PART III


ITEM 10.  MANAGERS AND EXECUTIVE OFFICERS OF THE REGISTRANT

    The sole manager of Kaanapali Land, LLC is Pacific Trail, which is also
Kaanapali Land's largest shareholder.  Pacific Trail manages the business
of Kaanapali Land pursuant to the terms of the LLC Agreement.  Although the
executive officers of Kaanapali Land are empowered to manage its day-to-day
business affairs, under the LLC Agreement, most significant actions of
Kaanapali Land outside the ordinary course of business must first be
authorized by Pacific Trail, which is responsible and has full power and
authority to do all things deemed necessary and desirable by it to conduct
the business of Kaanapali Land.  Pacific Trail may not be removed as
manager except in those circumstances described in Item 11 below.  As of
March 15, 2004, the executive officers and certain other officers of the
Company were as follows:

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

      Gary Nickele                        President and
                                            Chief Executive Officer
      Tamara G. Edwards                   Senior Vice President
      Stephen A. Lovelette                Executive Vice President
      Gailen J. Hull                      Senior Vice President and
                                          Chief Financial Officer



<PAGE>


     Certain of these officers are also officers and/or directors of JMB
Realty Corporation ("JMB") and numerous affiliated companies of JMB
(hereinafter collectively referred to as "JMB affiliates").  JMB affiliates
outside of the Company have not materially 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 or have owned or operated hotels on various
other hospitality businesses.  However, certain partnerships sponsored by
JMB and other affiliates of JMB are engaged in land development activities
including planned communities, none of which are in Hawaii.

     There is no family relationship among any of the foregoing officers.

     The LLC Agreement also provides for the appointment of a "Class A
Representative" to monitor the activities of Kaanapali Land on behalf of
its Class A Shareholders.  The Class A Representative who must be
independent is entitled to receive certain information from Kaanapali Land
and must approve certain actions that Kaanapali Land may take outside the
course of business primarily related to debt that might be obtained from
affiliated parties.  The current Class A Representative is American Express
Tax and Business Services, Inc.  Reference is also made to Item 11 for more
information.

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

     The following table sets forth certain business experience during the
past five years of such officers of the Company.

     Gary Nickele (age 51) has been Manager of KLC Land since August, 2000
and President of KLC Land and certain of its subsidiaries since February
2001.  He has been the President of Kaanapali Land since May 2002.  Mr.
Nickele is also the President and Director of Arvida/JMB Managers, Inc.,
the sole general partner of Arvida/JMB Partners, L.P. ("Arvida Partners").
Arvida Partners conducts land development activities primarily in Florida.
Mr. Nickele has been associated with JMB and Arvida Partners since
February, 1984 and September, 1987, respectively, and since 1998 as
Executive Vice President.  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.
Mr. Nickele's experience relative to JMB, the Company and Arvida Partners
during the past five years has included overall responsibility for all
legal matters, oversight of the relationship of Arvida Partners and its
affiliates, including matters relating to property development and sales
and general personnel and administrative functions. During the past five
years, Mr. Nickele has also been an Executive Vice President of JMB.

     Tamara G. Edwards (age 49) has been Senior Vice President of KLC Land
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 KLC Land
and Director of certain of its subsidiaries.  She is a member of the Bar of
California, Florida and Hawaii.  During the past five years, Ms. Edwards
has been responsible for the land sale activities of KLC Land and its
subsidiaries and the management of non-agricultural and non-development
activities concerning the Company's land assets.



<PAGE>


     Stephen Lovelette (age 48) has been an Executive Vice President of KLC
Land since 2000 and Kaanapali Land since May 2002.  Mr. Lovelette is in
charge of implementing the Kaanapali 2020 development plan.  Mr. Lovelette
has been associated with JMB and its affiliates for over 15 years and since
1998 as executive Vice President.  Prior to joining an affiliate of JMB,
Mr. Lovelette worked for Arvida Company under its previous ownership and
continues to oversee its development efforts.  Mr. Lovelette holds a
bachelor's degree from The College of the Holly Cross and an MBA from Seton
Hall University.  In addition, Mr. Lovelette has extensive experience in
corporate finance and has been responsible for obtaining substantial
financial commitments from institutional lenders relating to the assets of
JMB and Arvida Partners. During the past five years, Mr. Lovelette has also
been a Managing Director of JMB.

     Gailen J. Hull (age 55) is Senior Vice President and, since August
2002, Chief Financial Officer of Kaanapali Land.  Mr. Hull has been
associated with JMB since March, 1982 and since 1998 as Senior Vice
President.  He holds a Masters degree in Business Administration from
Northern Illinois University and is a Certified Public Accountant.  Mr.
Hull has substantial experience in the management of the accounting and
financial reporting functions of both public and private entities,
primarily including those of JMB, Arvida Partners, the Company and their
respective affiliates. During the past five years, Mr. Hull has also been a
Senior Vice President of JMB.

     It is currently anticipated that Gary Nickele will devote 25 to 50
percent of his time to the operations of the Company.  The percentage is
largely dependant upon potential land sale transactions, the entitlement
processes relating to various land parcels and other matters (including
attention devoted to litigation, overhead, staffing and operations).

     In light of the fact that the Company's shares are not publicly
traded, the Company is a limited liability company and the rights of
members are governed by the limited liability company agreement, the
Company has determined that it is not necessary to have either an audit
committee financial expert or a code of ethics as those terms are defined
in the rules and regulations of the SEC.




<PAGE>


ITEM 11.  EXECUTIVE COMPENSATION

   Certain of the officers of the Company listed in Item 5 above are
officers of JMB and are compensated by JMB or an affiliate thereof (other
than the Company and its subsidiaries). The Company will reimburse JMB,
Pacific Trail and their affiliates for any expenses incurred while
providing services to the Company.


                          SUMMARY COMPENSATION TABLE

                          Annual Compensation (1)(3)
                          ---------------------------
                                                                  Other
                                                                 Annual
                                                                Compensa-
                    Principal                Salary      Bonus    tion
Name (2)            Position (4)     Year      ($)        ($)      ($)
---------------     ------------    -----    -------    ------  ---------

Gary Nickele        President        2003    180,000   100,000     N/A
                    and Chief        2002    180,000   100,000     N/A
                    Executive        2001    172,300      N/A      N/A
                    Officer

Tamara G. Edwards   Senior Vice      2003    250,000   150,000     N/A
                    President        2002    250,000   100,000     N/A
                                     2001    250,000    41,500     N/A

Stephen A.
  Lovelette         Executive        2003    175,000    50,000     N/A
                    Vice President   2002    175,000    50,000     N/A

Gailen J. Hull      Senior Vice      2003    175,000    50,000     N/A
                    President and    2002    175,000      N/A      N/A
                    Chief Financial
                    Officer
----------

      (1)   The Company does not have a compensation committee.  Executive
officer compensation was determined through deliberations with Pacific
Trail representatives.

      (2)   Includes CEO and 3 most highly compensated executives whose
salary and bonus exceed $100,000.  No other executive earned salary and
bonus in 2003 exceeding $100,000.

      (3)   Salary and bonus amounts for Messrs. Nickele, Lovelette and
Hull represent the portion of total compensation allocated and charged to
the Company.

      (4)   Positions listed are those for Kaanapali Land, and prior to its
formation, with KLC Land.



<PAGE>


ITEM 12.  SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

Security ownership of certain beneficial owners.

                      NAME AND ADDRESS                  AMOUNT AND NATURE
                      OF BENEFICIAL                     OF BENEFICIAL
TITLE OF CLASS        OWNER                             OWNERSHIP
--------------        ---------------------------       --------------------

Class B Shares        Pacific Trail Holdings, LLC       1,466,573 Shares
                      900 North Michigan Avenue         owned directly
                      Chicago, Illinois 60611           (89.9% of the
                                                        Class B Shares)
                                                        (1) (2)

(1)   The sole managing member of Pacific Trail, Pacific Trail Holdings,
      Inc. ("PTHI"), may be deemed to beneficially own the Class B Shares
      owned by Pacific Trail. PTHI disclaims beneficial ownership with
      respect to any of the shares owned by Pacific Trail. Each of the
      shareholders of PTHI may be deemed to own the Class B Shares owned by
      Pacific Trail. Each of such shareholders, being Gary Nickele, Gailen
      Hull and Andrew N. Todd, disclaims beneficial ownership with respect
      to any of the shares owned by Pacific Trail. The addresses of PTHI
      and Messrs. Nickele, Hull and Todd are the same as for Pacific Trail.

(2)   As of March 15, 2004, there were 1,631,513 Class B Shares issued
      and outstanding.

No other person including any officer of the Company is known by the
Company to beneficially own in excess of 5% of the Class A or Class B
shares issued, outstanding and distributed.  No officers of the Company own
any Class A Shares.




<PAGE>


ITEM 13.  CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

     An affiliated insurance agency, JMB Insurance Agency, Inc., earns
insurance brokerage commissions in connection with providing the placement
of insurance coverage for certain of the properties and operations of the
Company.  Such commissions are comparable to those that would be paid to
such affiliate insurance agency in similar dealings with unaffiliated third
parties, and are generally paid by the insurance carriers that the agency
represents out of the premiums paid by the Company for such coverage.  The
total of such commissions for the years ended December 31, 2003, 2002 and
2001 (including amounts related to discontinued operations in 2001) was
approximately $102, $75 and $1,100, respectively, not all of which was paid
as of December 31, 2003.

     The Company pays a non-accountable reimbursement of approximately $30
per month to JMB Realty Corporation in respect of general overhead expense,
all of which was paid as of December 31, 2003.

     The Company reimburses their affiliates for direct expenses incurred
on its behalf, including salaries and salary-related expenses incurred in
connection with the management of the Company's operations.  Generally, the
entity that employs the person providing the services receives the
reimbursement.  Substantially all of such reimbursable amounts were
incurred by JMB Realty Corporation or its affiliate, Management Services,
LLC, during 2003.  The total costs for the years ended 2003, 2002 and 2001
was approximately $1.8 million, $2.0 million and $1.1 million,
respectively, of which approximately $105 thousand was unpaid as of
December 31, 2003.

     Employees of certain of the Company's unconsolidated affiliates are
entitled to participate in the Company's defined contribution pension plan.

Pursuant to an agreement through December 31, 2001 Northbrook was entitled
to receive a payment from such affiliates in an amount equal to the service
cost related to these employees. The amount of the payment for 2001 was
$1.2 million, all of which was paid as of December 31, 2003.

     The Company had other amounts due from affiliates of approximately
$300 thousand, $300 thousand and $300 thousand at December 31, 2003, 2002
and 2001, respectively.


ITEM 14.  PRINCIPAL ACCOUNTANT FEES AND SERVICES

     The aggregate audit fees incurred for professional services by Ernst
and Young LLP ("E&Y") in 2003 and 2002 were $154,300 and $187,300,
respectively.  In accordance with the SEC's definitions and rules, "audit
fees" are fees the Company paid E&Y for professional services for the audit
of the Company's consolidated financial statements included in Form 10-K
and review of financial statements included in Form 10-Qs, and for services
that are normally provided by the accountant in connection with statutory
and regulatory filings or engagements.  There were no audit related, tax or
other services provided by E&Y.

     The Company has not adopted any pre-approval policies and procedures.
All audit and permitted non-audit services are approved by the managing
member of the Company before the service is undertaken.



<PAGE>


                                    PART IV

ITEM 15.  EXHIBITS AND REPORTS ON FORM 8-K

  (a) Exhibits.

       2.1  Order Confirming Second Amendment Joint Plan of Reorganization
            Dated June 11, 2002, including as an exhibit thereto, the
            Second Amended Joint Plan of Reorganization of Amfac Hawaii,
            LLC, Certain of its Subsidiaries and FHT Corporation Under
            Chapter 11 of the Bankruptcy Code incorporated herein by
            reference the Amfac Hawaii, LLC Current Report on Form 8-K for
            July 29, 2002 dated August 13, 2002 (File No. 33-24180).

      2.2   Second Amended Disclosure Statement with Respect to Joint Plan
            of Reorganization of Amfac Hawaii, LLC, Certain of its
            Subsidiaries and FHT Corporation Under Chapter 11 of the
            Bankruptcy Code, incorporated herein by reference from the
            Amfac Hawaii, LLC Current Report on Form 8-K for July 29, 2002
            dated August 13, 2002 (File No. 33-24180).

      3.1   Amended and Restated Limited Liability Company Agreement of
            Kaanapali Land, LLC dated November 14, 2002 filed as an exhibit
            to the Company's Form 10 filed May 1, 2003 and hereby
            incorporated by reference.

      10.1  $10,000,000 loan agreement between Amfac Property Development
            Corp. and City Bank at December 18, 1996 filed as an exhibit to
            Amfac Hawaii, LLC's Form 10-K report for December 31, 1996
            under the Securities Act of 1934 (File No. 33-24180) filed
            March 21, 1997 and hereby incorporated by reference.

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



<PAGE>


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

      10.10 Funding Agreement dated October 29, 2002 between
            Kaanapali Land and certain affiliates filed as an exhibit to
            the Company's Form 10 filed May 1, 2003 and hereby incorporated
            by reference.

      10.11 Service 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; 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,
            incorporated herein by reference to the Amfac Hawaii,
            LLC Annual Report on Form 10-K filed on March 22, 1989
            (File No. 33-24180) for the year ended December 31,
            1988.

      10.12 Property Purchase and Option Agreement by and between NB
            Lot 4, LLC, Maui Beach Resort Limited Partnership, and NB
            Lot 3, LLC dated August 4, 2003 filed as an exhibit to the
            Company's report on Form 8-K (File No. 0-50273) filed on
            August 22, 2003 is hereby incorporated by reference.

      21.   List of Subsidiaries

      31.1. Certification of Chief Executive Officer pursuant to
            Rule 13a-14(a) is filed herewith.

      31.2. Certification of Chief Financial Officer pursuant to
            Rule 13a-14(a) is filed herewith.

      32.   Certifications pursuant to 18 U.S.C. Section 1350, as
            adopted pursuant to Section 906 of the Sarbanes-Oxley Act
            of 2002 are filed herewith.

      99.1  Settlement Agreement dated March 14, 2003 between Amfac
            Property Investment Corp., Amfac Hawaii, LLC, Pioneer
            Mill Company, Limited, and Employees' Retirement System
            of the State of Hawaii filed as an exhibit to the Company's
            report on Form 8-K (File No. 0-50273) filed on September 26,
            2003 is hereby incorporated by reference.

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

      (b)   No reports on Form 8-K were filed since the beginning of the
            last quarter of the period covered by the report.




<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 LAND, LLC

                               BY:   Pacific Trail Holdings, LLC
                                     (Sole Member)


                                     /s/ Gailen J. Hull
                                     ---------------------
                               By:   Gailen J. Hull
                                     Senior Vice President
                               Date: March 29, 2004



     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.



                                     /s/ Gailen J. Hull
                                     ---------------------
                               By:   Gailen J. Hull,
                                     Senior Vice President
                                     Chief Accounting Officer
                                     and Chief Financial Officer
                               Date: March 29, 2004



                                     /s/ Gary Nickele
                                     ---------------------
                               By:   Gary Nickele,
                                     President and
                                     Chief Executive Officer
                               Date: March 29, 2004