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, 2006                  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 is a well-known seasoned
issuer, as defined in Rule 405 of the Securities Act.  Yes [  ]  No [ X ]

Indicate by check mark if the registrant is not required to file reports
pursuant to Section 13 or Section 15(d) of the Act.  Yes [  ]  No [ X ]

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 ]



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

       Large accelerated filer [  ]          Accelerated filer [   ]
                        Nonaccelerated filer [ X ]

Indicate by check mark whether the registrant is a shell company (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 [   ]

As of March 1, 2007, the registrant had 1,792,613 shares of which
161,100.17 were Class A shares.

Documents incorporated by reference:  None


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                             TABLE OF CONTENTS


                                                             Page
                                                             ----
PART I

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

Item 1A.     Risk Factors. . . . . . . . . . . . . . . . . .    3

Item 1B.     Unresolved Staff Comments . . . . . . . . . . .   14

Item 2.      Properties. . . . . . . . . . . . . . . . . . .   14

Item 3.      Legal Proceedings . . . . . . . . . . . . . . .   15

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 . . . . . . . . . .   20

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 . . . . . . . . . . . . . . .   25

Item 8.      Financial Statements and
             Supplementary Data. . . . . . . . . . . . . . .   26

Item 9.      Changes in and Disagreements
             with Accountants on Accounting
             and Financial Disclosure. . . . . . . . . . . .   52

Item 9A.     Controls and Procedures . . . . . . . . . . . .   52

Item 9B.     Other Information . . . . . . . . . . . . . . .   52

PART III

ITEM 10.     Managers and Executive Officers
             of the Registrant . . . . . . . . . . . . . . .   53

Item 11.     Executive Compensation. . . . . . . . . . . . .   55

Item 12.     Security Ownership of Certain
             Beneficial Owners and Management. . . . . . . .   56

Item 13.     Certain Relationships and
             Related Transactions. . . . . . . . . . . . . .   57

Item 14.     Principal Accountant Fees and Services. . . . .   57

PART IV

Item 15.     Exhibits, Financial Statement Schedules,
             and Reports on Form 8-K . . . . . . . . . . . .   58


SIGNATURES   . . . . . . . . . . . . . . . . . . . . . . . .   60


                                     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 Northbrook Corporation
("Northbrook") into FHTC and the subsequent merger of FHTC into Kaanapali
Land, which made the assets and liquidity of Northbrook available to the
Debtors to help fund their land development business.

      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").  After the Plan
Effective Date, Kaanapali Land continued to implement the restructuring
transactions that were contemplated to be effected under the Plan.  All
material requirements and transactions that the Company implemented under
the Plan are described herein.  On August 21, 2005, pursuant to a motion
for entry of final decree, the bankruptcy cases were closed.  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 Northbrook and
their 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 (later 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 pursues 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)
Property, (ii) Agriculture and (iii) Golf.  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 Kaanapali Land's 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 expired prior to
the Plan Effective Date, including the period for those whose executory
contracts were rejected by the Debtors.  Therefore, all claims that could
be asserted by the creditors against the Debtors relative to amounts due on
pre-petition obligations as of the Plan Effective Date are known and have
since been liquidated or otherwise disposed of.  However, any claims of the
Internal Revenue Service ("IRS") relative to pre-petition transactions were
left unimpaired by the Plan, as described below.

      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
and various entities and individuals that are affiliated or otherwise
associated with Pacific Trail.  Class A Shares were issued under the Plan
to claimants who had no such affiliation.  Reference is made to Item 10
below for a further explanation of the LLC Agreement and the rights and
duties of the Class A Representative.

      Kaanapali Land distributed in the aggregate, approximately $1.8
million in cash and approximately 161,100 Class A Shares on account of the
claims that were made under the Plan and does not anticipate making any
further distributions under the Plan.

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



<PAGE>


      Federal tax return examinations have been completed for all years
through 2002.  Refunds aggregating approximately $4.7 million for years
through 2000 have been received by Kaanapali Land for previous payments of
taxes and interest.  Pursuant to a settlement agreed to with the IRS in
2006, no liability for Federal taxes was determined for 2001 or 2002;
however, in connection with the settlement of those years, the Company
agreed to adjust certain tax attributes, including the tax basis of assets.

The effect in 2006 on the Company's consolidated balance sheet was to
increase deferred tax liabilities by approximately $1.9 million. Income tax
expense was also recorded for the year ended December 31, 2006 due to the
finalization of the Company's 2005 tax return and a payment made in regard
to the settlement of a prior year state tax matter of approximately $300
thousand.  The statutes of limitations with respect to the Company's tax
returns for 2003 and subsequent years remain open.  The Company believes
adequate provisions for income taxes have been recorded for all years,
although there can be no assurance that such provisions will be adequate.
To the extent that there is a shortfall, any such shortfall 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 Corp. ("KLC"), Pioneer Mill Company, LLC
("PMCo"), Kaanapali Development Corp. ("KDC") and PM Land Company, LLC.

      PROPERTY

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

      For any property targeted for development, the Company will generally
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 use of the property in accordance with the land plan.  The
length and difficulty of obtaining the requisite entitlements by government
agencies, 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 projects.  Applications for entitlements may include, among
other things, applications for state land use reclassification, county
community plan amendments and changes in zoning.

      KAANAPALI 2020.  The Company's developable lands are located on the
west side of the Island of Maui in the State of Hawaii.  The majority of
the developable lands are located in the Kaanapali resort area.  There are
an additional approximately 235 acres in the Lahaina, Maui, area known as
Wainee, a portion of which may be developable. In addition, the Company has
recently completed the demolition and removal of the former Pioneer Mill
sugar mill structures (except for certain minor storage facilities),
thereby freeing up approximately 19 acres of land that is zoned for
industrial use near the center of Lahaina, which may be used for retail
and/or infrastructure development in the future. The Kaanapali development


<PAGE>


lands have been the subject of a community-based planning process that
commenced in 1999 for the Kaanapali 2020 Development Plan.  The Kaanapali
2020 Development Plan includes a mix of resort recreation, residential
units and some commercial and recreational development sites, as well as
affordable housing.  While the oceanfront resort properties have been sold,
most of the other Kaanapali 2020 lands continue to be owned by the Company.
Any development plan for any of the Company's land, including the Kaanapali
2020 Development Plan and the Wainee development, will be subject to
approval and regulation by various state and county agencies and governing
entities, especially insofar as the nature and extent of zoning, and
improvements necessary for site infrastructure, building, transportation,
water management, environmental and health are concerned.  In Hawaii, the
governmental entities have the right to impose limits or controls on growth
in their communities through restrictive zoning, density reduction, impact
fees and development requirements, which may affect materially utilization
of the land and the costs associated with developing the land. In addition,
a recent ordinance enacted by Maui County that requires, among other
things, that up to fifty percent of new residential units qualify as
affordable housing and therefore be sold at below market prices could
adversely affect the profitability of future projects and render them
unfeasible. There can be no assurance that the Company will be successful
in obtaining the necessary zoning and related entitlements for development
of the Maui lands. At this time, the only lands in Maui that have
sufficient entitlements to commence development are those in Phase I of the
Kaanapali Coffee Farms development, as described below.

      The current regulatory approval process for a development project can
take three to five years or more and involves substantial expense. The
applications generally require the submission of comprehensive plans that
involve the use of consultants and other professionals. A substantial
portion of the Company's Kaanapali 2020 land will require state district
boundary amendments and county general plan and community plan amendments,
as well as rezoning approvals. There is no assurance that all necessary
approvals and permits will be obtained with respect to the current projects
or future projects of the Company.  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. Any such group with standing can challenge submitted
applications, 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 and time consuming, on any approvals of the entitlements. The
substantial time and expense of obtaining entitlements and the uncertainty
of success in obtaining the entitlements could have a material adverse
effect on the Company's success.

      At the state level, all land in Hawaii is divided into four land use
classifications:  urban, rural, agricultural and conservation.  The
majority of the Kaanapali 2020 Development Plan land is currently
classified as either agricultural or conservation.



<PAGE>


      A relatively small portion (approximately 300 acres) of the Kaanapali
2020 Development Planning area owned by the Company, known as Puukolii
Village, comprised of two parcels known as the Puukolii Triangle and
Puukolii Mauka, received entitlements in 1993 under the terms of a
superseded law that fast tracked entitlements for planned mixed use
developments that contained the requisite percentage of affordable housing
units. The requirements imposed on the Company relative to these
entitlements proved uneconomic and thus the developments were not pursued.
Recently, the Company has proposed revisions to the development agreement
with the applicable state agencies and is beginning to plan for the
development of the Puukolii Mauka area, which will, if ultimately
developed, include certain affordable and market housing units, a small
commercial area, a school, a park and associated improvements. However, no
agreement has been reached with any agency to modify the terms of the
development agreement and it is currently unclear whether an agreement will
be reached, or on what terms.

      Despite the hurdles mentioned above, the Company believes that it
will generally be able to develop that portion of its land for which it can
obtain classification as an urban district from the State Land Use
Commission. However, it is uncertain whether the Company will be able to
obtain all necessary entitlements or, if so, how long it will take, and it
cannot be predicted what the market will be for such land (or the
associated development costs) at such time.  Conservation land is land that
has been considered by the state as necessary for preserving natural
conditions and cannot be developed.  Agricultural and rural districts are
not permitted to have concentrated development.  Pursuant to the Kaanapali
2020 Development Plan, the Company intends to apply to the State Land Use
Commission for reclassification of a portion of the agricultural lands to
urban, but does not intend to apply for reclassification of the
conservation lands.

      Development of the Kaanapali 2020 lands in accordance with the
Kaanapali 2020 Development Plan will require, in addition to
reclassification to urban, appropriate designation under the County of Maui
general, community and/or development plans and the appropriate County
zoning designation.  Obtaining any and all of these approvals can involve a
substantial amount of time and expense, and approvals may need to be
resubmitted if there is any subsequent, material deviation in current
approved plans or significant objections by the responsible government
agencies.

      In connection with seeking approvals from regulatory authorities of
the Kaanapali 2020 Development Plan, the Company may be required to make
significant improvements in public facilities (such as roads), to dedicate
property for public use, to provide employee/affordable housing units and
to make other concessions, monetary or otherwise.  The ability of the
Company to perform its development activities may also be adversely
affected by restrictions that may be imposed by government agencies and the
surrounding communities because of inadequate public facilities, such as
roads, water management areas and sewer facilities, and by local opposition
to continued growth.  However, as part of the Kaanapali 2020 Development
Plan, the Company has included a large number of community members and
local government officials in the development planning process and has
earned significant community support for its preliminary Kaanapali 2020 and
Wainee development plans. It also believes that it enjoys general local
community support for its new Puukolii Mauka concept. The Company hopes
that carrying on with this process will continue to generate substantial
support from local government and the community for the Company's
development plans.

      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.



<PAGE>


      During the first quarter of 2006, the Company received final
subdivision approval on an approximate 336 acre parcel in the region
"mauka" (toward the mountains) from the main Kaanapali 2020 area.  This
project, called Kaanapali Coffee Farms, consists of 58 agricultural lots of
which are being offered to individual buyers.  It is anticipated that the
land improvements will be completed in 2007.  In conjunction with the final
approval, the Company was required to obtain two subdivision bonds in the
amounts of approximately $18.6 million and $4.7 million and was required to
secure those bonds with a cash deposit of $8.3 million into an interest
bearing collateral account.  Subsequently, one of the bonds was reduced
from $18.6 million to $11.3 million and the collateral was reduced to $5.9
in early 2007.  The funds will be withdrawn from the collateral account by
the Company based upon stage of completion of the subdivision improvements
and the release of the bonds.  During July and early August 2006 the
Company closed on the sale of three lots at Kaanapali Coffee Farms for
aggregate net sales proceeds of $4.4 million.  It also entered into a joint
venture agreement with a local builder for the design, construction and
sale of residential improvements on another lot.  In January 2007, the
Company closed on the sale of one lot for net sales proceeds of
approximately $1.3 million.

      OTHER MAUI PROPERTY.  Apart from the golf course (discussed below)
and the Kaanapali 2020 lands, the Company owns approximately 390 acres of
remaining land.

      The Company owns approximately 19 acres in Lahaina, known as the
Pioneer Mill Site, which is zoned for industrial development.  This is the
former site of Pioneer Mill's sugar mill on Maui and continues to be the
site of the former Pioneer Mill coffee mill operation now operated by a
third party under a land lease agreement with Pioneer.  Pioneer Mill is
currently evaluating strategic options relating to this site.  During 2006
the Company entered into a contract for the demolition of the sugar mill
buildings on the Pioneer Mill site.  The work was completed during 2006 at
a cost of approximately $2.8 million.  Previously, Pioneer Mill had been
engaged in a modest cleanup operation arising out of the discovery of
petroleum contamination found at the Pioneer Mill site.  The Pioneer Mill
site was assigned a high priority by the Hawaii Department of Health
("HDOH") as HDOH had been designated by the United States Environmental
Protection Agency, Region IX (hereinafter "EPA") as the oversight agency
for Pioneer Mill.  However, Pioneer Mill's cleanup efforts to date have
satisfied HDOH and Pioneer Mill received a no further action letter during
the fourth quarter of 2004.  Further routine cleanup operations in
connection with the demolition of the former sugar mill buildings on the
site were conducted with respect to an underground storage tank discovered
on the site.  All such work has been completed.

      The Company 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 and will need to obtain land use and zoning
reclassification in order to proceed with any development.  The Company is
conducting various meetings with the West Maui community, public officials
and consultants to determine a plan for a portion of their lands.  While it
is likely that this development, if pursued, will contain a significant
affordable housing component as required by county ordinance, the Company
believes that these lands may be available for a number of uses compatible
with the close proximity of them to the center of Lahaina, including both
affordable and market housing and certain recreational and service uses.
Therefore, the Company is considering several options for this land.  A
determination on the viability to proceed in the entitlement process is
expected to be made during 2007.  In the meantime, the Company has been
engaged in numerous legal actions to quiet title to its Wainee lands as a
necessary predicate to such development. Such cases have generally been
contested and, while the Company has been successful in the cases completed


<PAGE>


so far, one is currently on appeal and a small number of them have survived
summary judgment motions by the Company, which may ultimately require
trials at uncertain additional cost and time to completion.  There can be
no assurance that these actions will achieve an ultimate level of success
that will permit the Wainee development to go forward on an economic basis.

      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 land associated with now-closed
sugar growing and processing operations, remnant parcels abutting
infrastructure improvements from previously sold lands, such as strips
along roadways, 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
operating 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 mill equipment.  The Company leased, or granted limited
licenses to operate, to a third party, certain 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
purchased the Company's coffee mill equipment during the first quarter of
2004.

      SEED CORN AND SOYBEAN 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 gross
revenue, to grow seed corn and soybeans according to Monsanto's
specifications.  In addition to generating such revenue, this operation is
otherwise 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 sufficiently profitable to do
so.  There can be no assurance that any expansion will occur or that
current operations will remain profitable.

      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 Course on Oahu.  The Company ceased operations at
the golf course effective March 1, 2006 for five months to allow for
renovations of the golf course greens and facilities.  The golf course
resumed operations on September 1 2006.  The assets and operations of the
Waikele Golf Course represent all of the golf segment for purposes of
business segment information.  The cost of the renovations and the shut-
down of the course did not have a material adverse effect on the overall
financial condition of the Company.

      For a description of financial information by segment, please read
Note 8 to the attached consolidated financial statements, which information
is incorporated herein by reference.



<PAGE>


      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 developments including,
but not limited to Kaanapali Coffee Farms, and other Company overhead
costs.  No further significant bulk land sales are currently contemplated
by the Company.

      NORTH BEACH.  At the Plan Effective Date and 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.  During 2003, the Company closed on the
sales of Lots 2 and 4.  At the closing of Lot 4, the Company granted to the
purchaser an option to purchase Lot 3.  On June 21, 2005, the Company
closed the sale of Lot 3 for a base price of $22.5 million, pursuant to the
option.  On September 12, 2005, the Company received $6 million from the
purchaser of Lot 4 in connection with its subsequent sale of Lot 3 to SVO,
pursuant to a purchase price adjustment agreement negotiated by the parties
in settlement of certain defaults claimed by the Company relative to the
Lot 3 option agreement.

      EMPLOYEES.

      At March 1, 2007, Kaanapali Land and its subsidiaries had employed
approximately 60 full time employees.  Certain corporate services are
provided by Pacific Trail and its affiliates.  Kaanapali Land reimburses
for these services and related overhead at cost.

      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.



<PAGE>


      MARKET CONDITIONS AND COMPETITION.

      There are a number of factors that historically have negatively
impacted Kaanapali Land's property activities, including market conditions,
the difficulty in obtaining regulatory approvals, the high cost of required
infrastructure and the Company's operating deficits in its other business
segments.  As a result, the planned use 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.

      Maui's residential real estate market has experienced a slow down
during the latter part of 2005 and 2006 after it had experienced a recovery
during 2003, 2004 and the first half of 2005.  It is not clear how long the
current slow down will last.

      There are several developers, operators, real estate companies and
other owners of real estate that compete with the Company in its property
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.

      The golf course operated by the Company competes with several other
golf courses located in its proximity and with other entertainment and
tourist activities.  In order to improve the golf course's competitive
position, the Company closed the golf course during 2006 in order to
implement certain improvements.  The golf course was closed for five months
and resumed operations on September 1, 2006.  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.

      GOVERNMENT REGULATIONS AND APPROVALS

      The current regulatory approval process for a 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, entitle-
ments are extremely difficult to obtain in Hawaii.  There is often
significant opposition 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 plan.  While some of these
lands have some form of entitlements, it is anticipated that at least a
substantial portion of the land will require state district boundary
amendments and county general plan amendments, as well as rezoning
approvals.  Entitlements for a 58 lot agricultural subdivision were
received during the first quarter of 2006.  Approximately 1,500 acres of
the Company's Maui land which is contiguous to Kaanapali 2020 land is
located toward the top of mountain ridges and in gulches is classified as
conservation, which precludes other use.  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.



<PAGE>


      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, or the operation of former business units.
Under those laws and regulations, the Company may be liable for, among
other things, the costs of removal or remediation of certain hazardous
substances.  In addition, the Company may find itself having to defend
against personal injury lawsuits based on exposure to such substances
including asbestos related liabilities.  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 environmental conditions.


ITEM 1A.  RISK FACTORS

      Kaanapali Land faces numerous risks, including those set forth below.

      Reference is made to Item 1. Business and Item 3. Legal Proceedings
for an item specific detailed discussion of some of the risk factors facing
Kaanapali Land, LLC.

      Risk factors include a number of factors that could negatively impact
Kaanapali Land's property activities.  Any of the risks may have a material
adverse effect on the Company's success, consolidated financial position or
results of operations.


RISKS RELATED TO HAWAIIAN REAL ESTATE AND DEVELOPMENT MARKETS

      The Kaanapali 2020 Development Plan (including, without limitation)
Kaanapali Coffee Farms and Puukolii Mauka) and the development of the
Wainee land, as well as the Company's other development activities, are,
apart from the risks associated with the entitlement process described
above, subject to the risks generally incident to the ownership and
development of real property. These include the possibility that cash
generated from sales will not be sufficient to meet the Company's
continuing obligations. This could result from inadequate pricing or pace
of sales of properties or changes in costs of construction or development;
increased government mandates; adverse changes in Hawaiian economic
conditions, such as increased costs of labor, marketing and production,
restricted availability of financing; adverse changes in local, national
and/or international economic conditions (including adverse changes in
exchange rates of foreign currencies for U.S. dollars); adverse effects of
international political events, such as additional terrorist activity in
the U.S. or abroad that lessen travel, tourism and investment in Hawaii;
the need for unanticipated improvements or unanticipated expenditures in
connection with environmental matters; changes in real estate tax rates and
other expenses; delays in obtaining permits or approvals for construction
or development and adverse changes in laws, governmental rules and fiscal
policies; acts of God, including earthquakes, volcanic eruptions, floods,
droughts, tsunamis and hurricanes; and other factors which are beyond the
control of the Company. Because of these risks and others, real estate
ownership and development is subject to unexpected increases in costs.

      The Company may, from time to time and to the extent economically
advantageous, sell rezoned, undeveloped or partially developed parcels,
such as portions of the Kaanapali 2020 Development Plan lands, the former
Pioneer Mill site and/or the Wainee land. It intends to develop the balance
of its lands for residential, resort, affordable housing, limited
commercial and recreational purposes.



<PAGE>


      Any increase in interest rates or downturn in the international,
national or Hawaiian economy could affect the Company's profitability and
sales. The downturn in the Asian economy, particularly the Japanese
economy, has had a profound effect on the Hawaiian real estate market.
However, the Kaanapali resort area has historically enjoyed a significant
mainland tourist market in the United States and Canada, which has
resulted, beginning in the late 1990's, in a strong market for resort
housing in the area. The September 11 attacks had a material adverse effect
on tourism in the Kaanapali area immediately following the attacks, but the
market rebounded during the period from 2002 into 2005 and the areas of
primary and secondary residential homes, condominiums and time share units
were relatively strong during this period. Markets have turned down
significantly during the past fifteen months, which has negatively impacted
the volume of transactions completed in West Maui. At present the Company
does not expect that current market conditions will materially impact
pricing for its properties, but will instead impact the number of lots sold
in the near term. No assurance can be given, however, as to whether current
market conditions will again improve, or when, or as to whether pricing for
the Company's land assets will ultimately soften.

      The Company's real estate activities may be adversely affected by
possible changes in the tax laws, including changes which may have an
adverse effect on resort and residential real estate development. High
rates of inflation 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 developers, but also have a
significant effect on the affordability of permanent mortgage financing to
prospective purchasers. High rates of inflation may permit the Company to
increase the prices that it charges in connection with land sales, subject
to economic conditions in the real estate industry generally and local
market factors. There can be no assurance that Hawaiian real estate values
will rise, or that, if such values do rise, the Company's properties will
benefit.


RISKS RELATING TO NATURAL EVENTS

      The Company's development lands are located in an area that is
susceptible to hurricanes and seismic activity. In addition, during certain
times of year, heavy rainfall is not uncommon. These events may adversely
impact the Company's development activities and infrastructure assets, such
as roadways, reservoirs, water courses and drainage ways. Significant
events may cause the Company to incur substantial expenditures for
investigation and restoration of damaged structures and facilities.
Flooding, drought, wind and other natural perils can adversely impact
agricultural production on the Company's lands. In addition, similar events
elsewhere in Hawaii may cause regulatory responses that impact all
landowners. For example, the Company received notice from the Hawaii
Department of Land and Natural Resources ("DLNR") that it would inspect all
significant dams and reservoirs in Hawaii, including those maintained by
the Company on Maui in connection with its agricultural operations.
Inspections were performed in April and October 2006. To date, the DLNR has
cited certain maintenance deficiencies concerning two of the Company's
reservoirs, consisting primarily of overgrowth of vegetation that make
inspection difficult, and could degrade the integrity of reservoir slopes
and impact drainage. The DLNR has required the vegetation clean-up as well
as the Company's plan for future maintenance, inspections and emergency
response. Revised versions of the required plans were submitted to DLNR in
December 2006.The Company has obtained bids for portions of the required
remedial work and expects to commence same during the second quarter of
2007.



<PAGE>


      On October 15, 2006, a significant earthquake occurred that was felt
in most parts of the state. As a consequence of such earthquake, the DLNR,
in conjunction with the U.S. Bureau of Reclamation has inspected each
reservoir and identified certain minor damage. In addition, Company
personnel have inspected various portions of its Maui water source and
transmission assets to determine if any other damage of significance has
occurred, but the Company has so far found no material damage. While the
damage to the smaller reservoir cited by the recent DLNR inspection will
not require any immediate action, it is unclear at this time whether the
DLNR will require any work on the larger reservoir even though the damage
is located in a portion of the reservoir that is presently unused. There
can be no assurance that the expense of doing such required work will not
be material.

RISKS RELATED TO THE HAWAIIAN GOLF MARKET

      A subsidiary of Kaanapali Land owns the Waikele Golf Course on Oahu.
The performance of golf courses in Hawaii depends heavily on the strength
of the tourism industry in Hawaii. Thus, Kaanapali Land is subject to the
risks generally associated with operating tourism-related businesses. These
include adverse changes in national and international economic conditions
(including adverse changes in exchange rates of foreign currencies for U.S.
dollars) and in national and international political situations that
constrain travel, tourism and investment in Hawaii. The performance of golf
courses in Hawaii is also affected by competition from comparable courses
in the surrounding areas, which include a number of courses that have
opened, reopened or been significantly upgraded in recent years. In
addition, the Debtors are aware of an additional new golf course that is
currently being constructed to the west of the Waikele Golf Course, as well
as two other Oahu golf courses that are currently in the planning phase,
which may or may not ultimately be built. There can be no assurance that
additional courses will not be developed that will compete with the Waikele
Golf Course.

      In addition to market risks, Waikele Golf Course operations are
subject to operating risks such as adverse weather conditions, including
heavy prolonged rains and hurricanes, employee-related issues such as labor
shortages and disruptions (including, but not limited to disruptions of
food and beverage service by the third-party restaurant operator who leases
space in the clubhouse from the Company), blight or other diseases
affecting grass or other vegetation and costs of merchandise, equipment and
supplies.

      The Waikele Golf Course is not affiliated with an existing resort,
but is located in a high-density residential area. The Waikele Golf Course
has historically had a significant amount of Japanese tourist play as well
as a high level of Hawaii resident play from the surrounding residential
areas. During the 1980's and into the mid-1990's, Asian visitors comprised
as much as half of the total rounds played at certain courses in Hawaii.
With the downturn in the Japanese economy, there has been a significant
drop in Asian visitors and this has had a material effect on Hawaiian golf
course rounds. The mainland tourism market was very strong, particularly on
the neighboring islands, prior to the terrorist attacks of September 11,
but this had little direct impact on the Waikele Golf Course. Since
September 11, the Asian visitor levels in Hawaii dropped precipitously and
golf course rounds have dropped as much as fifty percent at some Hawaii
golf courses. Asian tourist play is controlled by a relatively small number
of tour operators who include golf as part of their tour packages. These
operators are extremely price sensitive, which limits the ability of golf
courses such as Waikele to increase greens fees. While Asian tourist
visitation to Hawaii has rebounded somewhat in the past two years, it does
not appear that this rebound has given a significant boost to the number of
golf rounds being played on Oahu.



<PAGE>


      Since the initial reduction in the Japanese visitor levels in the
mid-1990's, many courses have attempted to offset some of the loss from the
tourism market by attracting local Hawaiian resident play. The Waikele Golf
Course has been successful at increasing the Hawaii resident rounds at the
course; however, Hawaii residents receive a significant discount on fees at
most courses, known as "Kamaiina rates", and Kamaiina rounds are therefore
less profitable than other rounds.

      In order to reverse the downward trend in rounds played at Waikele
Golf Course, particularly by visiting tourists from Asia and elsewhere, the
Company embarked on a $1.2 million renovation project in 2006, which
resulted in the golf course being closed for approximately five months in
2006. This renovation included the reconstruction of all greens and a
number of tees, plus a modest renovation of the golf course clubhouse.

RISKS RELATING TO AGRICULTURE

      While agricultural revenues are relatively insignificant to the
Company's financial success, 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. The Company currently earns a modest profit on its contract with
Monsanto for the production of seed corn on a portion of its Kaanapali 2020
Development Plan land. Regulatory, political, economic and scientific
issues, in addition to the normal risks attendant to the growing cycle for
any crop, may all weigh in to make such contract uneconomic for Monsanto,
with the result that ongoing revenues to the Company could be impaired in
the future. Such is also the case with the Company's coffee crop, in
particular because the Company incurs all the risks relating to the cost of
growing and maintaining the trees and producing the crop (except for a
minor portion of the coffee land that is leased to a third party who
maintains the trees on such land), and a portion of the market risk
attendant to the sale of the crop as well. That is because the harvesting
and marketing of the crop has been contracted to a third-party grower, who
will pay the Company (or the homeowners' association with respect to the
coffee land within Kaanapali Coffee Farms Phase I) only a modest fixed
amount for the privilege of taking the coffee beans, with a more
substantial payment due based on a percentage of revenues obtained from the
crop by such grower.

RISKS RELATING TO HAWAIIAN, U.S. AND WORLD ECONOMIES GENERALLY

      The Company's businesses will be subject to risks generally
confronting the Hawaiian, U.S. and world economies. All of the Company's
tangible property is located in Hawaii. As a result, the Company's revenues
will be exposed to the risks of investment in Hawaii and to the economic
conditions prevalent in the Hawaiian real estate market. While the Hawaiian
real estate market is subject to economic cycles that impact tourism and
investment (particularly in the United States, Japan and other Pacific Rim
countries), it is also influenced by the level of economic development in
Hawaii generally and by external and internal political forces.

      The attacks of September 11, 2001 on the World Trade Center and
Pentagon had an adverse impact on the U.S., world and Hawaiian economies,
which in turn reduced discretionary income available for travel or the
purchase of retirement or vacation homes. These events also negatively
impacted the desire of people to travel, particularly by air; the number of
international visitors to the United States, particularly from Japan upon
which Hawaii relies most-heavily, decreased as the United States became
perceived to be a higher risk destination. In addition, a perception
developed that because the United States was now at war, it no longer
sought leisure travelers from abroad. Though these attitudes have abated
somewhat in the years after the attacks and the Hawaiian economy has
rebounded, there is no assurance that future events will not occur that
would again dampen the inflow of money to Hawaii. Thus, it is clear that
Hawaii is subject to higher risks than other portions of the Untied States
due to its disproportionate reliance on air travel and tourism. The visitor


<PAGE>


industry is Hawaii's most important source of economic activity, accounting
for more than a quarter of Gross State Product.

      Because of the foregoing considerations, it is clear that the risks
associated with the large reliance by Hawaii on a visitor base from foreign
countries will disproportionately impact the Company in future years, both
positively and negatively, as market and visitation cycles play out.

ENVIRONMENTAL RISKS AND ENVIRONMENTAL REGULATION

      The Company is subject to environmental and health safety laws and
regulations related to the ownership, operation, development and
acquisition of real estate, or the operation of former business units.
Under various federal, state and local laws, ordinances and regulations, a
current or previous owner, developer or operator of real estate may be
liable for the costs of removal or remediation of certain hazardous toxic
substances at, on, or under or in its property. The costs of such removal
or remediation of such substances could be substantial. Such laws often
impose liability without regard to whether the owner or operator knew of,
or was responsible for, the actual release or presence of such hazardous or
toxic substances. The presence of such substances may adversely affect the
owner's ability to sell or rent such real estate or to borrow using such
real estate as collateral. Persons who arrange for the disposal or
treatment of hazardous or toxic substances also may be liable for the costs
of removal or remediation of such substances at the disposal or treatment
facility, whether or not such facility is owned or operated by such person.
Certain environmental laws impose liability for the release of asbestos
containing material into the air, pursuant to which third parties may seek
recovery from owners or operators of real properties for personal injuries
associated with such materials, and prescribe specific methods for the
removal and disposal of such materials. The cost of legal counsel and
consultants to investigate and defend against these claims is often high
and can significantly impact the Company's operating results, even if no
liability is ultimately shown. No assurance can be given that the Company
will not incur liability in the future for known or unknown conditions and
any significant claims may have a material adverse impact on the Company.


ITEM 1B. UNRESOLVED STAFF COMMENTS

      Not Applicable.


ITEM 2.  PROPERTIES

      LAND HOLDINGS.

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




<PAGE>


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
was a defendant, such proceedings were stayed as against such Debtor by the
filing of the Reorganization Case.  However, any judgments rendered therein
were subject to the distribution provisions of the Plan, which resulted in
the entitlement of such claims to proceeds that were 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.  All other claims have been satisfied.
Proceedings against subsidiaries or affiliates of Kaanapali Land that are
not Debtors were not stayed by the Plan and may proceed.  However, one such
subsidiary, Oahu Sugar, filed a subsequent petition for liquidation under
Chapter 7 of the bankruptcy code in April 2005, as described below.

      On or about February 23, 2001 Kekaha Sugar Co., Ltd. ("KSCo"), a
company that was, prior to its dissolution, a subsidiary of Kaanapali Land,
received a letter from the Hawaii Department of Health ("HDOH") assigning
the former KSCo, 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.  KSCo responded to the letter soon
after it was received.  The United States Environmental Protection Agency
("EPA") later performed a visual inspection of the property and indicated
there will be some testing performed.  HDOH has performed some testing at
the site and it is not known whether such test results, if any, will
require any further response activities.  However, as KSCo was
substantially without assets and has dissolved, the ability of KSCo to
perform any requested actions is doubtful.

      On or about February 23, 2001, The Lihue Plantation Company, Limited,
now known as LPC Corporation ("LPCo") 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 relative to LPCo's former
operations including the 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.  LPCo is substantially without
assets, and further pursuit of this matter by HDOH could have a material
adverse effect on the financial condition of LPCo.

      The purchaser of the Kekaha and Lihue Plantation sugar mills
properties in January 2005 assumed any obligations for environmental
matters concerning the property it purchased.  However, there can be no
assurance that such purchaser will have sufficient assets to satisfy a
claim should any substantial liabilities result.



<PAGE>


      Pioneer Mill was engaged in a modest cleanup operation arising out of
the discovery of petroleum contamination found at the Pioneer Mill site.
The Pioneer Mill site was assigned a high priority by the HDOH and the HDOH
has shown an interest in the environmental conditions relating to or
arising out of the former operations of Pioneer Mill.  EPA designated HDOH
as the oversight agency for Pioneer Mill.  Pioneer Mill received a report
on the results of environmental testing conducted on the site by the EPA
and HDOH.  However, Pioneer Mill's cleanup efforts to date have satisfied
HDOH and Pioneer Mill received a no further action letter during the fourth
quarter of 2004.  Further routine cleanup operations in connection with the
demolition of the former sugar mill buildings on the site were conducted
with respect to an underground storage tank discovered on the site.  Such
work has been completed as of the date of this report.

      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 was engaged
in environmental site assessment of lands it leased from the U.S. Navy and
located on the Waipio Peninsula.  Oahu Sugar submitted a Remedial
Investigation Report to the HDOH.  The HDOH provided comments that
indicated that additional testing may be required.  Oahu Sugar responded to
these comments with additional information.  On January 9, 2004, 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 sought, 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 was in
the process of responding to the information requests and had notified both
the Navy and the EPA that while it had some modest remaining cash that it
could contribute to further investigation and remediation efforts in
connection with an overall settlement of the outstanding claims, Oahu Sugar
was substantially without assets and would be unable to make a significant
contribution to such an effort.  Attempts at negotiating such a settlement
were fruitless and Oahu Sugar received an order from EPA in March 2005 that
would purport to require certain testing and remediation of the site.  As
Oahu Sugar was substantially without assets, the pursuit of any action,
informational, enforcement, or otherwise, would have had a material adverse
effect on the financial condition of Oahu Sugar.

      Therefore, as a result of the pursuit of further action by the HDOH
and EPA as described above and the immediate material adverse effect that
the actions had on the financial condition of Oahu Sugar, Oahu Sugar filed
with the United States Bankruptcy Court, Northern District of Illinois,
Eastern Division its voluntary petition for liquidation under Chapter 7 of
Title 11, United States Bankruptcy Code, 11 U.S.C. Subsection 101-1330 on
April 19, 2005, Case No. 05-15100.  Such filing is not expected to have a
material adverse effect on the Company as Oahu Sugar was substantially
without assets at the time of the filing and it is not believed that any
other affiliates have any responsibility for the debts of Oahu Sugar.
Nevertheless, the Company continues to expend cash and management time on
this issue and cannot guarantee that the Company will not ultimately be
made responsible for all or a portion of such clean-up, due to the facts
set forth below.

      The deadline for filing proofs of claim with the bankruptcy court
passed in April 2006.  Prior to the deadline, Kaanapali Land, on behalf of
itself and certain subsidiaries, filed claims that aggregated approximately
$224,000, primarily relating to unpaid guarantee obligations made by Oahu
Sugar that were assigned to Kaanapali Land pursuant to the Plan on the Plan
Effective Date.  In addition, the EPA and the U.S. Navy filed a joint proof
of claim that seeks to recover certain environmental response costs
relative to the Waipio Peninsula site discussed above.  The proof of claim


<PAGE>


contained a demand for previously spent costs in the amount of
approximately $260, and additional anticipated response costs of between
approximately $2,760 and $11,450.  No specific justification of these
costs, or what they are purported to represent, was included in the
EPA/Navy proof of claim.  Due to the insignificant amount of assets
remaining in the debtor's estate, it is unclear whether the United States
Trustee who has taken control of Oahu Sugar will take any action to contest
the EPA/Navy claim, or how it will reconcile such claim for the purpose of
distributing any remaining assets of Oahu Sugar.

      EPA has sent three requests for information to Kaanapali Land
regarding, among other things, Kaanapali Land's organization and
relationship, if any, to entities that may have, historically, operated on
the site and with respect to operations conducted on the site.  Kaanapali
Land responded to these requests for information.  By letter dated
February 7, 2007, on the basis that Kaanapali Land is a successor to Oahu
Sugar Company, Limited, a company that operated at the site prior to 1961
("Old Oahu"), EPA advised Kaanapali that it believes it is authorized by
CERCLA to amend the existing Unilateral Administrative Order against Oahu
Sugar Company, LLC, for the clean up of the site to include Kaanapali Land
as an additional respondent. The purported basis for the EPA's position is
that Kaanapali Land, by virtue of certain corporate actions, is jointly and
severally responsible for the performance of the response actions,
including, without limitation, clean-up at the site.  No such amendment has
taken place as of the date hereof. Instead, the EPA's letter has invited
Kaanapali Land to engage in settlement discussions with the EPA to attempt
to resolve Kaanapali Land's alleged liability. Kaanapali is in the
preliminary stages of evaluating the positions taken by the EPA. While
Kaanapali Land believes that it has defenses to the EPA's position,
Kaanapali Land has nevertheless begun such settlement discussions with EPA
to determine if the matter can be resolved on reasonable terms. Even if
Kaanapali Land were found to be the successor to Old Oahu, Kaanapali Land
believes that its liabilities, if any, should relate solely to a portion of
the period of operation of Old Oahu at the site. Moreover, Kaanapali Land
believes that any settlement should involve substantial participation of
the U.S. Navy, which has owned the site throughout the entire relevant
period, both as landlord under its various leases with Oahu Sugar and Old
Oahu and by operating the site directly during a period when no lease was
in force. There can be no assurances that the matter can be resolved on
terms acceptable to Kaanapali Land or that this matter will not ultimately
have a material adverse effect on the Company.

      Federal tax return examinations have been completed for all years
through 2002.  Refunds aggregating approximately $4.7 million for years
through 2000 have been received by Kaanapali Land for previous payments of
taxes and interest.  Pursuant to a settlement agreed to with the IRS in
2006, no liability for Federal taxes was determined for 2001 or 2002;
however, in connection with the settlement of those years, the Company
agreed to adjust certain tax attributes, including the tax basis of assets.

The effect in 2006 on the Company's consolidated balance sheet was to
increase deferred tax liabilities by approximately $1.9 million.  Income
tax expense was also recorded for the year ended December 31, 2006 due to
the finalization of the Company's 2005 tax return and a payment made in
regard to the settlement of a prior year state tax matter of approximately
$300 thousand.  The statutes of limitations with respect to the Company's
tax returns for 2003 and subsequent years remain open.  The Company
believes adequate provisions for income taxes have been recorded for all
years, although there can be no assurance that such provisions will be
adequate.  To the extent that there is a shortfall, any such shortfall for
which the Company could be liable could be material.



<PAGE>


      On February 15, 2005, D/C Distribution Corporation ("D/C"), a
subsidiary of Kaanapali Land, was served with a lawsuit entitled American &
Foreign Insurance Company v. D/C Distribution and Amfac Corporation, Case
No. 04433669 filed in the Superior Court of the State of California for the
County of San Francisco, Central Justice Center.  No other purported party
has been served.  In the eight-count complaint for declaratory relief,
reimbursement and recoupment of unspecified amounts, costs and for such
other relief as the court might grant, plaintiff alleges that it is an
insurance company to whom D/C has tendered for defense and indemnity
various personal injury lawsuits allegedly based on exposure to asbestos
containing products.  Plaintiff alleges that because none of the parties
have been able to produce a copy of the policy or policies in question, a
judicial determination of the material terms of the missing policy or
policies is needed.  Plaintiff seeks, among other things, a declaration:
of the material terms, rights, and obligations of the parties under the
terms of the policy or policies; that the policies have been exhausted;
that plaintiff is not obligated to reimburse D/C for its attorneys' fees in
that the amounts of attorneys' fees incurred by D/C have been incurred
unreasonably; that plaintiff is entitled to recoupment and reimbursement of
some or all of the amounts it has paid for defense and/or indemnity; and
that D/C has breached its obligation of cooperation with plaintiff.  D/C
has filed an answer and an amended cross-claim.  D/C believes that it has
meritorious defenses and positions, and intends to vigorously defend.  In
February 2006, in order to simplify its administration and facilitate an
additional capital contribution by Kaanapali Land, D/C merged into a newly-
formed Illinois limited liability company named D/C Distribution, LLC.

      Kaanapali Land, as successor by merger to other entities, and D/C
have been named as defendants in personal injury actions allegedly based on
exposure to asbestos.  While there are only a few such cases that name
Kaanapali Land, there are in excess of 60 cases against D/C that are
pending on the U.S. mainland (primarily in California) and are allegedly
based on D/C's prior business operations.  Each entity defending these
cases 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 or future judgments, if any.  There can
be no assurances that these cases (or any of them) if adjudicated in a
manner adverse to D/C, will not have a material adverse effect on the
financial condition of D/C.  Kaanapali Land does not believe that it has
liability, directly or indirectly, for D/C's obligations in those cases.
Kaanapali Land does not presently believe that the cases in which it is
named will result in any material liability to Kaanapali Land; however,
there can be no assurance in the regard.

      On August 30, 2006, a third party complaint was filed against, KLC
Land Company, LLC, Amfac/JMB Hawaii, LLC, and Amfac/JMB Hawaii, Inc., and
Amfac Distribution Corporation in an action entitled The Queen Emma
Foundation v. Lenox Resources, Inc. and Alan Hornstein, Civil No. CV05-
00546 HG KSC.  In the third party action, third party plaintiff seeks to
recover a share of clean up costs for contamination allegedly discharged by
one or more of the third party defendants at a former commercial site.
Third party plaintiff seeks, among other things, an unspecified amount of
money, attorneys' fees and costs.  The matter has been resolved and
dismissed without any monetary contribution by the subject third party
defendants.



<PAGE>


      The Company has received notice from the Hawaii Department of Land
and Natural Resources ("DLNR") that it would inspect all significant dams
and reservoirs in Hawaii, including those maintained by the Company on Maui
in connection with its agricultural operations.  Inspections were performed
in April and October 2006.  To date, the DLNR has cited certain maintenance
deficiencies concerning two of the Company's reservoirs, consisting
primarily of overgrowth of vegetation that make inspection difficult and
could degrade the integrity of reservoir slopes and impact drainage.  The
DLNR has required the vegetation clean-up as well as the Company's plan for
future maintenance, inspections and emergency response.  Revised versions
of the required plans were submitted to DLNR in December 2006.  The Company
has obtained bids for portions of the required remedial work and expects to
commence same during the second quarter of 2007.

      On October 15, 2006, a significant earthquake occurred that was felt
in most parts of the state.  As a consequence of such earthquake, the DLNR,
in conjunction with the U.S. Army Corps of Engineers has inspected each
reservoir and identified certain minor damage.  In addition, Company
personnel have inspected various portions of its Maui water source and
transmission assets to determine if any other damage of significance has
occurred, but has so far found no material damage.  While the damage to the
smaller reservoir cited by the recent DLNR inspection will not require any
immediate action, it is unclear at this time whether the DLNR will require
any work on the larger reservoir even though the damage is located in a
portion of the reservoir that is presently unused.  There can be no
assurance that the expense of doing such required work will not be
material.

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


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

      Not applicable.





<PAGE>


                                  PART II

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

      As of December 31, 2006 there were approximately 696 holders of
record of the Company's 161,100 outstanding Class A Shares and
approximately 14 holders of record of the Company's 1,631,513 outstanding
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 2006, 2005 and 2004 and the Company does not anticipate making
any distributions for the foreseeable future.


ITEM 6.  SELECTED FINANCIAL DATA

                          KAANAPALI LAND, LLC (a)
     For the years ended December 31, 2006, 2005, 2004, 2003 and 2002
              (Dollars in Thousands Except Per Share Amounts)

                         2006      2005      2004      2003      2002
                       --------  --------  --------  --------  --------
Total revenues . . . . $ 11,547    37,251    13,916    63,783    11,112
                       ========  ========  ========  ========  ========
Net income (loss)
 (c) . . . . . . . . . $  1,612    21,042     4,887    70,636   140,784
                       ========  ========  ========  ========  ========

Income (loss) from
 continuing
 operations per
 share, basic
 and diluted . . . . . $    .90     11.74      2.73      5.86     (b)
                       ========  ========  ========  ========  ========

Net income (loss)
 per share, basic
 and diluted . . . . . $    .90     11.74      2.73     39.44     (b)
                       ========  ========  ========  ========  ========

Total assets . . . . . $185,344   187,875   179,401   189,473   189,626
                       ========  ========  ========  ========  ========

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

      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 international, 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.

      Unless wound up by the Company or merged, the Debtors continued 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 August 31, 2005, pursuant to a motion
for entry of final decree, the bankruptcy cases were closed.

      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 remaining
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.

      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


<PAGE>


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 of 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.  Nevertheless, Kaanapali Land has submitted a claim in the
Chapter 7 bankruptcy proceeding of Oahu Sugar in order that it may recover
substantially all of the assets remaining in the bankruptcy estate, if any,
that become available for creditors of Oahu Sugar.  Any amounts so received
would not be material 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, represent approximately 9.0% of the ownership of
the Company.

      At December 31, 2006, the Company had cash and cash equivalents of
approximately $39.6 million which is available for, among other things,
working capital requirements, including future operating expenses, and the
Company's obligations for engineering, planning, regulatory and development
costs including roadway construction, drainage and utilities, environmental
remediation costs on existing and former properties, potential tax
liabilities resulting from IRS audits, retiree medical insurance benefits
for Pioneer Mill Company, and existing and possible future litigation.

      The primary business of Kaanapali Land is the investment in and
development of the Company's assets on the Island of Maui.  The various
development plans will take many years at significant expense to fully
implement.  A significant portion of such anticipated expenses are
currently subject to contractual commitments, however, significant
additional costs may be incurred.  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 ceased operations at the Waikele Golf Course effective
March 1, 2006 for five months to allow for renovations of the golf course
greens and facilities.  The cost of renovations and the shut-down of
operations did not have a material adverse effect on the overall financial
condition of the Company.  The golf course resumed operations September 1,
2006.



<PAGE>


      The Company's mortgage note payable as of December 31, 2004 was a
loan secured by the Waikele Golf Course.  The owner of the golf course
repaid the mortgage in full on March 1, 2005, with proceeds obtained
through a new mortgage loan granted by a subsidiary of Kaanapali Land in
the original principal amount of approximately $7.2 million and is secured
by the Waikele Golf Course.  The mortgage loan was amended March 31, 2006
upon which the accrued interest was added to principal and the Holder
agreed to make future advances under the note in an amount not to exceed
$3,000 for purposes of funding the golf course improvements.  Interest on
the principal balance accrues at an adjustable rate of prime plus 1%.  The
principal and accrued interest, which are prepayable, are due March 1,
2015.  As of December 31, 2006 the note had an outstanding principal and
accrued interest balance of $9.3 million.  The note has been eliminated in
the consolidated financial statements because the obligor and maker are
consolidated subsidiaries of Kaanapali Land.

      The Company's continuing operations have in recent periods been
primarily reliant upon the net proceeds of sales of developed and
undeveloped land parcels.

      During the first quarter of 2006, the Company received final
subdivision approval on an approximate 336 acre parcel in the region
"mauka" (toward the mountains) from the main Kaanapali 2020 area.  This
project, called Kaanapali Coffee Farms, consists of 58 agricultural lots
that are being offered to individual buyers.  It is anticipated that the
land improvements will be completed in 2007.  In conjunction with the final
approval, the Company was required to obtain two subdivision bonds in the
amounts of approximately $18.6 million and $4.7 million and was required to
secure those bonds with a cash deposit of $8.3 million into an interest
bearing collateral account.  Subsequently, one of the bonds was reduced
from $18.6 million to $11.3 million and the collateral was reduced to $5.9
in early 2007.  The funds will be withdrawn from the collateral account by
the Company based upon stage of completion of the subdivision improvements
and the release of the bonds.  During July and early August 2006 the
Company closed on the sale of three lots at Kaanapali Coffee Farms for
aggregate net sales proceeds of $4.4 million.  It also entered into a joint
venture agreement with a local builder for the design, construction and
sale of residential improvements on another lot.  In January 2007, the
Company closed on the sale of one lot for net sales proceeds of
approximately $1.3 million.

      During April 2006 the Company became aware of an unsolicited tender
offer for shares made jointly by Sutter Capital Management, LLC and
MacKenzie Patterson Fuller, LP to purchase up to 8,000 Class A Shares
(approximately 4.9%) of the outstanding Class A Shares in the Company for
$1 per share.  Pacific Trails, the manager of the Company, determined that
the offer was inadequate and not in the best interests of the shareholders.

Accordingly, Pacific Trails recommended that the shareholders not accept
the offer and not tender their Class A Shares pursuant to such offer.

      Although the Company does not currently believe that it has
significant liquidity problems over the near term, should the Company be
unable to satisfy its liquidity requirements from its existing resources
and future property 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.

RESULTS OF OPERATIONS

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

      2006 COMPARED TO 2005

      Cash and cash equivalents decreased and property, net increased in
the accompanying balance sheets due to the Kaanapali Coffee Farms
development costs incurred during the year partially offset by the sales of
three lots.



<PAGE>


      Receivables, net decreased due to refunds received for previous
payments of taxes and interest as a result of the recently concluded
examination of the 2000 Federal tax return.

      Accounts payable and accrued expenses increased due to the accrual of
development costs and retention holdback incurred for the Kaanapali Coffee
Farms project.

      Other liabilities decreased primarily due to the net reduction of
certain reserves of approximately $7.5 million related to contingencies
which originated in prior years and were resolved in 2006, the offset of
which is reflected in selling, general and administrative expenses.  While
certain reserve elements of other liabilities were adjusted in 2006 due to
changing circumstances, the primary cause of the overall decrease in other
liabilities was the completion of Federal tax return examinations for the
years 1998 to 2002 which were settled by the Company at amounts which
reduced significantly the need for reserves for potential income tax
exposure.

      The decrease in sales and cost of sales is primarily due to the sale
of the mill sites and associated lands on the Island of Kauai, the sale of
Lot 3 and the purchase price adjustment on Lot 3 during 2005 offset by the
sales of three lots during 2006.

      2005 COMPARED TO 2004

      Cash and cash equivalents increased and property, net decreased due
to the sale of Lot 3 during 2005 offset by development costs incurred
during the year and the deposit of cash into a collateral deposit account
to secure two subdivision bonds.

      Receivables, net increased due to refunds due for previous payments
of taxes and interest as a result of the recently concluded examination of
the 2000 Federal tax return.

      Other assets increased primarily due to a cash deposit into an
interest bearing collateral account to secure two subdivision bonds
relating to the Kaanapali Coffee Farms project.

      The accumulated post-retirement benefit obligation decreased
primarily due to the recognition of the effect of ending retiree medical
and life insurance coverage as of December 31, 2005 for all remaining
active employees.

      Other liabilities and selling, general and administrative expenses
decreased primarily due to the reduction of certain reserves related to
contingencies which originated in prior years and were resolved in 2005.
The net reduction in reserves of approximately $8.6 million resulted in a
credit to selling, general and administration expenses in 2005.

      Mortgage note payable and interest decreased due to the repayment of
the Waikele Golf Course mortgage in full during the first quarter of 2005.

      The increase in sales and cost of sales is primarily due to the sale
of the mill sites and associated lands on the Island of Kauai, and the sale
of Lot 3 and the purchase price adjustment on Lot 3 during 2005.

      The decrease in the reduction of post-retirement benefit obligations
was due to the effect of the expected termination of most of the post-
retirement obligations at the end of 2004.

      The decrease in income tax expense is a result of utilization of
deferred tax assets that had previously been subject to a valuation
allowance.



<PAGE>


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.

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 judgments
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.



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 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.




<PAGE>


ITEM 8.  FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA


                            KAANAPALI LAND, LLC

                                   INDEX


Report of Independent Registered Public Accounting Firm

Consolidated Balance Sheets, December 31, 2006 and 2005

Consolidated Statements of Operations for the years ended
  December 31, 2006, 2005 and 2004

Consolidated Statements of Stockholders' Equity for
  the years ended December 31, 2006, 2005 and 2004

Consolidated Statements of Cash Flows for the years ended
  December 31, 2006, 2005 and 2004

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 REGISTERED PUBLIC ACCOUNTING FIRM



The Managing Member and Stockholders
Kaanapali Land, LLC


We have audited the accompanying consolidated balance sheets of Kaanapali
Land, LLC as of December 31, 2006 and 2005, and the related consolidated
statements of operations, stockholders' equity, and cash flows for each of
the three years in the period ended December 31, 2006.  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 the standards of the Public
Company Accounting Oversight Board (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.
We were not engaged to perform an audit of the Company's internal control
over financial reporting.  Our audits included consideration of internal
control over financial reporting as a basis for designing audit procedures
that are appropriate in the circumstances, but not for the purpose of
expressing an opinion on the effectiveness of the Company's internal
control over financial reporting.  Accordingly, we express no such opinion.

An audit also includes examining, on a test basis, evidence supporting the
amounts and disclosures in the financial statements, assessing the
accounting principles used and significant estimates made by management,
and 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 at December 31, 2006 and 2005, and the consolidated results of
its operations and its cash flows for each of the three years in the period
ended December 31, 2006, in conformity with U.S. generally accepted
accounting principles.






                                        /s/ Ernst & Young LLP




Chicago, Illinois
March 23, 2007






<PAGE>


                            KAANAPALI LAND, LLC

                        Consolidated Balance Sheets

                        December 31, 2006 and 2005
                 (Dollars in Thousands, except share data)


                                A S S E T S
                                -----------
                                                       2006      2005
                                                     --------  --------

Cash and cash equivalents. . . . . . . . . . . . .   $ 39,624    51,677
Receivables, net . . . . . . . . . . . . . . . . .        148     4,735
Property, net. . . . . . . . . . . . . . . . . . .    105,189    92,322
Prepaid pension costs. . . . . . . . . . . . . . .     29,150    27,473
Other assets . . . . . . . . . . . . . . . . . . .     11,233    11,668
                                                     --------  --------
                                                     $185,344   187,875
                                                     ========  ========


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

Accounts payable and accrued expenses. . . . . . .   $  4,488     1,351
Deferred income taxes. . . . . . . . . . . . . . .     28,647    28,197
Accumulated post-retirement benefit obligation . .      2,452     2,716
Other liabilities. . . . . . . . . . . . . . . . .     29,085    36,551
                                                     --------  --------
        Total liabilities. . . . . . . . . . . . .     64,672    68,815

Commitments and contingencies


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

Common stock, at 12/31/06 and 12/31/05
  Class A and Class B Shares authorized
  - 4,500,000; shares issued 1,792,613 . . . . . .      --        --
Additional paid-in capital . . . . . . . . . . . .      5,357     5,357
Accumulated earnings . . . . . . . . . . . . . . .    115,315   113,703
                                                     --------  --------

        Total stockholders' equity . . . . . . . .    120,672   119,060
                                                     --------  --------

                                                     $185,344   187,875
                                                     ========  ========
















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


<PAGE>


                            KAANAPALI LAND, LLC

                   Consolidated Statements of Operations

               Years ended December 31, 2006, 2005 and 2004
              (Dollars in Thousands Except Per Share Amounts)

                                            2006       2005      2004
                                          --------   --------  --------
Revenues:
  Sales. . . . . . . . . . . . . . . . .  $  8,274     34,988    10,793
  Interest and other income. . . . . . .     3,273      2,263     3,123
                                          --------   --------  --------
                                            11,547     37,251    13,916
                                          --------   --------  --------
Cost and expenses:
  Cost of sales. . . . . . . . . . . . .     7,255     17,213     2,693
  Reduction of post-retirement
    benefit obligation . . . . . . . . .     --          (206)   (8,860)
  Selling, general and administrative. .       761     (5,083)    6,256
  Interest . . . . . . . . . . . . . . .     --           168       743
  Depreciation and amortization. . . . .     1,054      1,040     1,136
  Reduction to carrying value of
    investments. . . . . . . . . . . . .     --         --        1,310
                                          --------   --------  --------
                                             9,070     13,132     3,278
                                          --------   --------  --------
Operating income (loss). . . . . . . . .     2,477     24,119    10,638

  Income tax (expense) benefit . . . . .      (865)    (3,077)   (5,751)
                                          --------   --------  --------

        Net income (loss). . . . . . . .  $  1,612     21,042     4,887
                                          ========   ========  ========
Earnings per share:
  Net income (loss), basic and
    diluted. . . . . . . . . . . . . . .  $    .90      11.74      2.73
                                          ========   ========  ========





























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


<PAGE>


                            KAANAPALI LAND, LLC

              Consolidated Statements of Stockholders' Equity

               Years ended December 31, 2006, 2005 and 2004
                          (Dollars in Thousands)


                                                 Accumu-        Total
                                  Additional     lated          Stock-
                      Common       Paid-In       (Deficit)      holders'
                      Stock        Capital       Earnings       Equity
                     --------     ---------      --------      --------

Balance at
  December 31,
  2003 . . . . . .   $    --          5,357        87,774        93,131

Net income . . . .        --          --            4,887         4,887
                     --------      --------      --------      --------
Balance at
  December 31,
  2004 . . . . . .        --          5,357        92,661        98,018

Net income . . . .        --          --           21,042        21,042
                     --------      --------      --------      --------
Balance at
  December 31,
  2005 . . . . . .        --          5,357       113,703       119,060

Net income . . . .        --          --            1,612         1,612
                     --------      --------      --------      --------
Balance at
  December 31,
  2006 . . . . . .   $    --          5,357       115,315       120,672
                     ========      ========      ========      ========






























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


<PAGE>


                            KAANAPALI LAND, LLC

                   Consolidated Statements of Cash Flows

               Years ended December 31, 2006, 2005 and 2004
                          (Dollars in Thousands)


                                            2006       2005      2004
                                          --------   --------  --------
Cash flows from operating activities:
  Net income (loss). . . . . . . . . . .  $  1,612     21,042     4,887
  Adjustments to reconcile net income
   (loss) to net cash provided by
   (used in) operations:
    Property sales, disposals and
      retirements, net . . . . . . . . .     2,666     13,825    (4,113)
    Depreciation and amortization. . . .     1,054      1,040     1,136
    Reduction to carrying value of
      investments. . . . . . . . . . . .     --         --          695
  Changes in operating assets and
   liabilities:
    Receivables, net . . . . . . . . . .     4,587     (4,290)      332
    Prepaid pension costs. . . . . . . .    (1,677)      (935)     (549)
    Accumulated post-retirement
      benefit obligation . . . . . . . .      (264)      (551)  (10,476)
    Collateral deposit . . . . . . . . .     --        (8,333)    --
    Accounts payable, accrued expenses
      and other. . . . . . . . . . . . .    (3,894)    (8,613)   (9,117)
    Deferred income taxes. . . . . . . .       450      3,077     5,751
                                          --------   --------  --------
Net cash provided by (used in)
  operating activities . . . . . . . . .     4,534     16,262   (11,454)
                                          --------   --------  --------

Cash flows from investing activities:
  Property additions . . . . . . . . . .   (16,587)    (3,151)   (2,053)
  Proceeds from notes receivable . . . .     --         --       31,366
                                          --------   --------  --------
Net cash provided by (used in)
  investing activities . . . . . . . . .   (16,587)    (3,151)   29,313
                                          --------   --------  --------



<PAGE>


                            KAANAPALI LAND, LLC

             Consolidated Statements of Cash Flows - Continued

               Years ended December 31, 2006, 2005 and 2004
                          (Dollars in Thousands)


                                            2006       2005      2004
                                          --------   --------  --------
Cash flows from financing activities:
  Net repayments of debt . . . . . . . .     --        (7,178)   (1,110)
                                          --------   --------  --------
        Cash used in
          financing activities . . . . .     --        (7,178)   (1,110)
                                          --------   --------  --------
        Net increase (decrease) in
          cash and cash equivalents. . .   (12,053)     5,933    16,749

        Cash and cash equivalents
          at beginning of year . . . . .    51,677     45,744    28,995
                                          --------   --------  --------
        Cash and cash equivalents
          at end of year . . . . . . . .  $ 39,624     51,677    45,744
                                          ========   ========  ========

Supplemental disclosure of cash flow
 information:
  Cash paid for interest . . . . . . . .  $  --           168       743
                                          ========   ========  ========

  Cash received (paid) for
    income taxes . . . . . . . . . . . .  $  4,397      --       (4,100)
                                          ========   ========  ========

































                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 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 Northbrook Corporation
("Northbrook") into FHTC and the subsequent merger of FHTC into Kaanapali
Land, which made the assets and liquidity of Northbrook available to the
Debtors to help fund their land development business.

      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").  After the Plan
Effective Date, Kaanapali Land continued to implement the restructuring
transactions that were contemplated to be effected under the Plan,
including, among other things, the resolution of all outstanding claims and
distributions on all claims that were allowed under the Plan.  On
August 31, 2005, pursuant to a motion for entry of final decree, the
bankruptcy cases were closed.

      In accordance with the Plan, a maximum of 1,863,000 shares of
Kaanapali Land were issuable.  At December 31, 2006, approximately
1,793,000 shares were issued and outstanding and Kaanapali Land believes
that no further shares will be issued under the Plan.

      Kaanapali Land's membership interests are denominated as "shares" and
are divided into two classes:  the Class A Shares, which are publicly held
and "Class B Shares" which are generally held by affiliates of Kaanapali
Land.



<PAGE>


      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.  All significant intercompany transactions and balances have
been eliminated in consolidation.

      The Company's continuing operations are in three business segments -
Agriculture, Property and Golf.  The Agriculture segment grows seed corn
and soybeans under contract and leases or provides harvesting rights to a
third party on certain lands currently cultivated in or used for the
processing of coffee, while maintaining additional coffee acreage for
possible future use.  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 8.

      STATEMENT OF CASH FLOWS

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

      RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS

      In June 2006, the FASB issued Interpretation No. 48, Accounting for
Uncertainty in Income Taxes, an interpretation of FASB Statement No. 109
("FIN 48"), to create a single model to address accounting for uncertainty
in tax positions. FIN 48 prescribes a recognition threshold and measurement
attribute for the financial statement recognition and measurement of a tax
position taken or expected to be taken in a tax return. This Interpretation
also provides guidance on derecognition, classification, interest and
penalties, accounting in interim periods, disclosure and transition. FIN 48
is effective for fiscal years beginning after December 15, 2006. The
Company is currently evaluating the impact of this Interpretation on
results of operations and financial position.

      In September 2006, the FASB issued SFAS No. 158, Employers'
Accounting for Defined Benefit Pension and Other Postretirement Plans -- an
amendment of FASB Statements No. 87, 88, 106, and 132(R).  This statement
requires an employer to recognize the over funded or under funded status of
a defined benefit postretirement plan as an asset or liability in its
statement of financial position and to recognize changes in that funded
status in the year in which the changes occur through comprehensive
income.  SFAS No. 158 is effective for fiscal years that ended after
December 15, 2006.  The Company does not believe the adoption of this
statement will have a significant impact on the financial position of the
Company.

      On September 15, 2006, the FASB issued SFAS No. 157 ("SFAS No. 157"),
"Fair Value Measurements," which defines fair value, establishes guidelines
for measuring fair value, and expands disclosures regarding fair value
measurements.  SFAS No. 157 does not require any new fair value
measurements but rather eliminates inconsistencies in guidance found in
various prior accounting pronouncements.  SFAS No. 157 is effective for
fiscal years beginning after November 15, 2007.  The Company is currently
evaluating the impact of this standard on results of operations and
financial position.

      RECEIVABLES

      The allowance for doubtful receivables was $100 and $53 at
December 31, 2006 and 2005, respectively.



<PAGE>


      LAND DEVELOPMENT

      During the first quarter of 2006, the Company received final
subdivision approval on an approximate 336 acre parcel in the region
"mauka" (toward the mountains) from the main Kaanapali 2020 area.  This
project, called Kaanapali Coffee Farms, consists of 58 agricultural lots
that are being offered to individual buyers.  It is anticipated that the
land improvements will be completed in 2007.  In conjunction with the final
approval, the Company was required to obtain two subdivision bonds in the
amounts of approximately $18,600 and $4,700 and was required to secure
those bonds with a cash deposit of $8,300 into an interest bearing
collateral account which is reported as Other Assets in the consolidated
balance sheet.  Subsequently, one of the bonds was reduced from $18,600 to
$11,300 and the collateral was reduced to $5,900 in early 2007.  The funds
will be withdrawn from the collateral account by the Company upon stage of
completion of the subdivision improvements and release of the bonds.
During July and early August 2006 the Company closed on the sale of three
lots at Kaanapali Coffee Farms for aggregate net sales proceeds of $4,426.
It also entered into a joint venture agreement with a local builder for the
design, construction and sale of residential improvements on another lot.
In January 2007, the Company closed on the sale of one lot for net sales
proceeds of approximately $1,300.

      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, insurance and property tax are capitalized to qualifying assets
during the period that such assets are undergoing activities necessary to
prepare them for their intended use.

      For development projects, capitalized costs are allocated using the
direct method for expenditures that are specifically associated with the
lot being sold and the relative-sales-value method for expenditures that
benefit the entire project.

      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, all or 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, 2006, the Company
held approximately $1,900 of non-depreciable land improvements and
approximately $4,100 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 2004, the Company recognized an impairment loss of $1,310.  The
2004 impairment loss was primarily to reduce the carrying value of certain
land parcels and leasehold improvements.  The land parcels were not
considered to be part of future development plans as such land parcels are
not part of the Company's Kaanapali 2020 development plan.



<PAGE>


      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.

                                                   2006          2005
                                                 --------      --------
  Property, net:
    Land . . . . . . . . . . . . . . . . . .     $ 87,578        74,412
    Land improvements. . . . . . . . . . . .        1,886         1,886
    Buildings. . . . . . . . . . . . . . . .       19,452        18,490
    Machinery and equipment. . . . . . . . .        3,815         4,022
                                                 --------      --------
                                                  112,731        98,810
    Accumulated depreciation . . . . . . . .       (7,542)       (6,488)
                                                 --------      --------
    Property, net. . . . . . . . . . . . . .     $105,189        92,322
                                                 ========      ========

      Land held for sale of approximately $19,000, representing primarily
Kaanapali Coffee Farms, was included in Property in the consolidated
balance sheets at December 31, 2006 and was carried at the lower of cost or
fair value less cost to sell.  No land is currently in use except for the
land associated with the Waikele Golf Course (carrying value of
approximately $8,000 at December 31, 2006), certain Kaanapali 2020 land
that has been set aside for the Company's seed corn and soybean operations
and certain acreage of coffee trees that have been leased to a third party
plus additional coffee acreage being maintained to support the Company's
land development program.

      The Company's principal property 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 $78,000.
In addition, the Company's property holdings on the island of Oahu have a
carrying value of approximately $27,000.  The Company has determined, based
on its current projections for the development and/or disposition of its
property holdings, that the property 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.

      The Company ceased operations at the golf course effective March 1,
2006 for five months to allow for renovations of the golf course greens and
facilities.  The golf course resumed operations as of September 1, 2006.
The assets and operations of the Waikele Golf Course represent all of the
golf segment for purposes of business segment information.  The cost of the
renovations and the shut-down of the course did not have a material adverse
effect on the overall financial condition of the Company.

      LAND SALES AND MORTGAGES RECEIVABLE

      On January 20, 2005, the Company sold its mill sites and associated
lands on the Island of Kauai for approximately $1,300 before closing costs
and prorations.



<PAGE>


      On June 21, 2005, the Company closed the sale of Lot 3 for a base
purchase price of $22,500, pursuant to an option that the purchaser of
Lot 4 (a parcel which is contiguous to Lot 3 and sold by the Company in
2003) held on the property.  The purchase price was paid in cash (before
closing costs and prorations) at closing.  Pursuant to a purchase price
adjustment agreement entered into at closing as required in the option
agreement, the purchase price was subject to potential increase under
certain circumstances.

      The purchaser's performance of its obligations under the purchase
price adjustment agreement was secured by a mortgage in favor of Lot 3 and
covering the property, which was filed at closing.  On September 12, 2005,
the Company received $6,000 from the purchaser of Lot 4 in connection with
its subsequent sale of Lot 3 pursuant to the purchase price adjustment
agreement negotiated by the parties in settlement of certain defaults
claimed by the Company relative to the Lot 3 option agreement.

      During March 2004, the Company received approximately $14,000 as full
payment on a $14,000 promissory note received in the sale of Lot 2 during
2003.  The Company recorded the sale of Lot 2 under the cost recovery
method of accounting.  The full note was recorded, offset by the entire
deferred gain of approximately $5,308 at December 31, 2003.  The deferred
gain was recognized during 2004 based upon the anticipated number of units
approved for construction on the site.

      During December 2004, the Company received $17,000 as full payment on
a $17,000 promissory note received in the sale of Lot 4 during 2003.

      OTHER LIABILITIES

      Other liabilities are primarily comprised of reserves for losses,
commitments and contingencies related to various divested assets or
operations.  These reserves include the estimated effects of existing and
potential asbestos related claims, certain lease and other real estate
related guarantees and obligations, obligations related to former officers
and employees such as pension, post-retirement benefits and workmen's
compensation, investigation and potential remedial efforts in connection
with environmental matters in the state of Hawaii, and reserves for
potential income tax exposure generally associated with real estate
operations.  Management's estimates are based, as applicable, on taking
into consideration claim amounts filed by third parties, life expectancy of
beneficiaries, advice of consultants, negotiations with claimants,
historical settlement experience, the number of new cases expected to be
filed and the likelihood of liability in specific situations.  Management
periodically reviews the adequacy of each of its reserve amounts and
adjusts such as it determines appropriate to reflect current information.
Reference is made to Note 7, Commitments and Contingencies.

      At December 31, 2006 other liabilities decreased primarily due to the
net reduction of certain reserves of approximately $7,500 related to
contingencies which originated in prior years and were resolved in 2006,
the offset of which is reflected in selling, general and administrative
expenses.  While certain reserve elements of other liabilities were
adjusted in 2006 due to changing circumstances, the primary cause of the
overall decrease in other liabilities was the completion of Federal tax
return examinations for the years 1998 to 2002 which were settled by the
Company at amounts which reduced significantly the need for reserves for
potential income tax exposure.

      At December 31, 2005 other liabilities decreased primarily due to the
net reduction of certain reserves related to contingencies which originated
in prior years and were resolved in 2005, the offset of which is reflected
in selling, general and administrative expenses.  The net reduction in
reserves of approximately $8,600 resulted in a credit to selling, general
and administration expenses in 2005.


<PAGE>


      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.

      INCOME TAXES

      Income taxes are accounted for under the asset and liability approach
which requires recognition of deferred tax assets and liabilities for the
differences between the financial reporting and tax basis of assets and
liabilities.  A valuation allowance reduces deferred tax assets when it is
more likely than not some portion or all of the deferred tax assets will
not be realized.


(2)  MORTGAGE NOTE PAYABLE

      The Waikele Golf Course mortgage note payable, secured by the Waikele
Golf Course, had an outstanding principal balance of $7,178 at December 31,
2004.  The loan had certain cash flow and other financial covenants.

      Effective June 1, 2004, the debt was modified pursuant to a loan
modification agreement with the lender.  In accordance with the agreement,
a $1,000 principal payment was made to the lender to reduce the outstanding
principal balance of the note, the interest rate was modified to LIBOR plus
4.25% with no LIBOR floor (6.43% at December 31, 2004), and the debt was
extended to mature on December 1, 2011.  The loan continued to have certain
cash flow and other financial covenants.  Waikele Golf Course, LLC repaid
the mortgage in full on March 1, 2005, with proceeds obtained through a new
mortgage loan granted by a subsidiary of Kaanapali Land in the original
principal amount of $7,178.  The mortgage loan was amended March 31, 2006
upon which the accrued interest was added to principal and the Holder
agreed to make future advances under the note in an amount not to exceed
$3,000 for purposes of funding the golf course improvements.  Interest on
the principal balance accrues at an adjustable rate of prime plus 1%.  The
principal and accrued interest, which are prepayable, are due March 1,
2015.  As of December 31, 2006 the note had an outstanding principal and
accrued interest balance of approximately $9,300.  The note has been
eliminated in the consolidated financial statements because the obligor and
maker are consolidated subsidiaries of Kaanapali Land.


(3)  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.

      The Company leased various office spaces with average annual rental
of approximately $150 per year.  Leases that expired at various times in
2006 were not renewed beyond the end of 2006.  Although the Company was a
party to certain other leasing arrangements, none of them were material.




<PAGE>


(4)  EMPLOYEE BENEFIT PLANS

      (a)   PENSION PLANS

      As of December 31, 2006, 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, 2006 and 2005,
the net pension credit for 2006, 2005 and 2004, and major assumptions used
to determine these amounts.

                                                       2006      2005
                                                      -------   -------

  Benefit obligation at beginning of year. . . . . .  $46,066    44,992
  Service cost . . . . . . . . . . . . . . . . . . .       16        28
  Interest cost. . . . . . . . . . . . . . . . . . .    2,494     2,573
  Actuarial loss . . . . . . . . . . . . . . . . . .    3,202     3,007
  Benefits paid. . . . . . . . . . . . . . . . . . .   (4,289)   (4,534)
                                                      -------   -------
  Benefit obligation at end of year. . . . . . . . .   47,489    46,066
                                                      -------   -------

  Fair value of plan assets at beginning of year . .   72,495    71,956
  Actual return on plan assets . . . . . . . . . . .    9,520     5,073
  Benefits paid. . . . . . . . . . . . . . . . . . .   (4,289)   (4,534)
                                                      -------   -------
  Fair value of plan assets at end of year . . . . .   77,726    72,495
                                                      -------   -------

  Funded status. . . . . . . . . . . . . . . . . . .   30,237    26,429
  Unrecognized net actuarial (gain) loss . . . . . .   (1,095)    1,035
  Unrecognized prior service cost. . . . . . . . . .        8         9
                                                      -------   -------
  Prepaid pension cost . . . . . . . . . . . . . . .  $29,150    27,473
                                                      =======   =======

      Unrecognized net gains or losses are amortized over a ten year
period.  At December 31, 2006, approximately 51% of the plan's assets are
invested in equity securities, 19% in fixed income funds and 30% in
alternative strategies.

      The components of the net periodic pension credit for the years ended
December 31, 2006, 2005 and 2004 (which are reflected as selling, general
and administrative in the consolidated statements of operations) are as
follows:
                                             2006       2005      2004
                                            -------   -------   -------
  Service cost . . . . . . . . . . . . . .  $    16        28        62
  Interest cost. . . . . . . . . . . . . .    2,494     2,573     2,695
  Expected return on plan assets . . . . .   (4,698)   (4,367)   (4,266)
  Recognized net actuarial gain loss . . .      510       922       867
  Amortization of prior service cost . . .        1         1         1
                                            -------   -------   -------
  Net periodic pension credit. . . . . . .  $(1,677)     (843)     (641)
                                            =======   =======   =======



<PAGE>


      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,                           2006       2005      2004
  ----------------                          -------   -------   -------

  Discount rate. . . . . . . . . . . . . .    5.65%      5.9%     6.25%
                                            =======   =======   =======

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

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

  As of December 31,                         2006       2005      2004
  ------------------                        -------   -------   -------

  Discount rate. . . . . . . . . . . . . .    5.65%      5.9%      5.9%
                                            =======   =======   =======

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

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

      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, 2006 and
2005 equals approximately $47,000 and $46,000, 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 was no contribution required in 2006 to the pension plan.
Furthermore, due to ERISA full funding limits, no contribution, whether
required or discretionary, could be made and deducted on the corporation's
tax return for the current fiscal year.

      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.



<PAGE>


      (b)   RETIREE HEALTH AND LIFE INSURANCE BENEFITS

      In addition to providing pension benefits, a subsidiary of KLC Land
currently provides certain healthcare and life insurance benefits to
certain eligible retired employees.  The postretirement healthcare plan is
contributory and contains cost-sharing features such as deductibles and
copayments.  The postretirement life insurance plan is non-contributory.

      Certain consolidated entities continued funding their post-retirement
health care obligations until the end of 2004, which was a date on or after
the date when its required cost maintenance period as defined under
Internal Revenue Code Section 420 expired.  Retiree medical benefits for
these entities terminated at the end of 2004.  Most post-retirement life
insurance benefits were terminated effective at the end of 2003.  Kaanapali
Land has not assumed any obligation to fund the cost of any ongoing
benefits on behalf of any of its affiliates.

      For measuring the expected postretirement benefit obligation, a 10%
annual rate of increase in the per capita claims cost was assumed through
2006. The healthcare cost trend rate assumption currently has a minimal
effect on the amount of the obligation and periodic cost reported. An
increase (decrease) in the assumed healthcare trend rate by 1% in 2006
would increase (decrease) the medical plans' accumulated postretirement
benefit obligation as of December 31, 2006 by $2 and $(2), respectively,
and the aggregate of the service and interest cost components of net
periodic postretirement benefit cost for the year then ended by $1 and
$(1), respectively.

      Net periodic postretirement benefit cost/(income) for 2006, 2005 and
2004 includes the following components:

                                          2006        2005      2004
                                          Total       Total     Total
                                         -------     -------   -------

Service cost . . . . . . . . . . . .     $  --            19        12
Interest cost. . . . . . . . . . . .         130         167       284
Amortization of net gain . . . . . .         (61)        (53)   (8,208)
Recognized settlement gain . . . . .        --          (339)     (948)
                                         -------     -------   -------
Net periodic postretirement
  benefit cost/(income). . . . . . .     $    69        (206)   (8,860)
                                         =======     =======   =======

      The following table sets forth the plans' change in benefit
obligation and benefit cost as of December 31, 2006 and 2005 as follows:

                                           December 31,   December 31,
                                               2006           2005
                                           ------------   ------------

Benefit obligation at beginning of year.        $ 2,473          3,003
Service cost . . . . . . . . . . . . . .          --                19
Interest cost. . . . . . . . . . . . . .            130            167
Actuarial losses (gain). . . . . . . . .             97            (32)
Employer contribution. . . . . . . . . .           (333)          (345)
Settlement . . . . . . . . . . . . . . .          --              (339)
                                                -------        -------
Benefit obligation at end of year. . . .          2,367          2,473
Unrecognized net actuarial gain. . . . .             85            243
                                                -------        -------
Accumulated postretirement benefit cost.        $ 2,452          2,716
                                                =======        =======

      The subsidiary's expected contributions for 2007 through 2011 are
approximately $300 for each year of the five year period.



<PAGE>


      The subsidiary continuing to provide benefits currently amortizes
unrecognized gains over the shorter of ten years or the average life
expectancy of the inactive participants since almost all of the Plans'
participants are inactive.  The portion of the unrecognized net actuarial
gain represented by the decrease in the Maintenance of Effort obligation
was being amortized over four years, commencing in 2001.

      The weighted-average discount rate used in determining the
accumulated postretirement benefit obligation was 5.65% as of December 31,
2006 and 5.65% as of December 31, 2005.

      The calculation of the accumulated postretirement benefit cost or the
net periodic postretirement benefit cost does not reflect the effects of
the Medicare Prescription Drug Improvement and Modernization Act of 2003
(the "Act").

      The Company maintains a nonqualified deferred compensation
arrangement (the "Rabbi Trust") which provides certain former directors of
Amfac and their spouses with pension benefits.  The Rabbi Trust invests in
marketable securities and cash equivalents.  The deferred compensation
liability represented in the Rabbi Trust and assets funding such deferred
compensation liability are consolidated in the Company's balance sheet.


(5)   INCOME TAXES

      Income tax expense attributable to income from continuing operations
for the years ended December 31, 2006, 2005 and 2004 consists of:

                                       Current     Deferred     Total
                                       --------    --------    --------
     Year ended December 31, 2006:
       U.S. federal. . . . . . . . .   $  --            484         484
       State . . . . . . . . . . . .        327          54         381
                                       --------    --------    --------
                                       $    327         538         865
                                       ========    ========    ========
     Year ended December 31, 2005:
       U.S. federal. . . . . . . . .   $  --          2,762       2,762
       State . . . . . . . . . . . .      --            315         315
                                       --------    --------    --------
                                       $  --          3,077       3,077
                                       ========    ========    ========
     Year ended December 31, 2004:
       U.S. federal. . . . . . . . .   $  --          5,161       5,161
       State . . . . . . . . . . . .      --            590         590
                                       --------    --------    --------
                                       $  --          5,751       5,751
                                       ========    ========    ========

      Income tax expense 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 income from operations as a result of the
following:
                                         2006        2005        2004
                                       --------    --------    --------
Computed "expected" tax provision. .   $    867       8,442       3,723
Increase (reduction) in income
 taxes resulting from:
  Increase (reduction) in
    valuation allowance. . . . . . .        834      (4,893)      2,365
  Other, net . . . . . . . . . . . .       (836)       (472)       (337)
                                       --------    --------    --------
      Total. . . . . . . . . . . . .   $    865       3,077       5,751
                                       ========    ========    ========



<PAGE>


      Deferred income taxes reflect the net tax effects of temporary
differences between the carrying amounts of assets and liabilities for
financial reporting purposes and the amounts used for income tax purposes.
The deferred tax effects of temporary differences at December 31, 2006 and
2005 are as follows:
                                                     2006        2005
                                                   --------    --------
    Deferred tax assets:
      Post retirement benefits . . . . . . . . .   $   (956)     (1,059)
      Reserves related primarily to losses
        on divestitures. . . . . . . . . . . . .     (8,492)     (6,433)
      Loss carryforwards . . . . . . . . . . . .     (3,421)     (1,322)
      Tax credit carryforwards . . . . . . . . .     (2,816)     (4,081)
      Other, net . . . . . . . . . . . . . . . .     (1,081)     (1,048)
                                                   --------    --------
        Total deferred tax assets. . . . . . . .    (16,767)    (13,943)
        Less - valuation allowance . . . . . . .      6,237       5,403
                                                   --------    --------
        Net deferred tax assets. . . . . . . . .    (10,531)     (8,540)
                                                   --------    --------
    Deferred tax liabilities:
      Property, plant and equipment,
        principally due to purchase
        accounting adjustments,
        net of impairment charges. . . . . . . .     27,086      25,339
      Prepaid pension and core retirement
        award costs. . . . . . . . . . . . . . .     12,091      11,398
                                                   --------    --------
          Total deferred tax liabilities . . . .     39,177      36,737
                                                   --------    --------
          Net deferred tax liability . . . . . .   $ 28,647      28,197
                                                   ========    ========

      The Company at December 31, 2006 has net operating loss carryforwards
("NOLs") of approximately $41,000 for state income tax purposes which can
be used to offset taxable income, if any, in future years.  Federal NOLs of
approximately $5,100 originated in 2006 and the state NOLs begin to expire
in 2010.

      Federal tax return examinations have been completed for all years
through 2002.  Refunds aggregating approximately $4,700 for years through
2000 have been received by Kaanapali Land for previous payments of taxes
and interest.  Pursuant to a settlement agreed to with the IRS in 2006, no
liability for Federal taxes was determined for 2001 or 2002; however, in
connection with the settlement of those years, the Company agreed to adjust
certain tax attributes, including the tax basis of assets.  The effect in
2006 on the Company's consolidated balance sheet was to increase deferred
tax liabilities by approximately $1,900.  Other liabilities were reduced in
the fourth quarter of 2006 due to the completion of Federal tax return
examinations for the years 1998 to 2002 which were settled by the Company
at amounts which reduced significantly the need for reserves for potential
income tax exposure.  Income tax expense was also recorded for the year
ended December 31, 2006 due to the finalization of the Company's 2005 tax
return and a payment made in regard to the settlement of a prior year state
tax matter of approximately $300.  The statutes of limitations with respect
to the Company's taxes for 2003 and subsequent years remain open.  The
Company believes adequate provisions for income tax have been recorded for
all years, although there can be no assurance that such provisions will be
adequate.  To the extent that there is a shortfall, any such shortfall for
which the Company could be liable could be material.




<PAGE>


(6)   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.  The total of such commissions
for the years ended December 31, 2006, 2005 and 2004 was approximately $74,
$13 and $8, respectively, all of which was paid as of December 31, 2006.

      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, 2006.

      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 affiliates, Management Services,
LLC, and JMB Financial Advisors, LLC, during 2006.  The total costs for the
years ended 2006, 2005 and 2004 were approximately $2,675, $2,400 and
$1,800, respectively, of which approximately $856 was unpaid as of
December 31, 2006.


(7)   COMMITMENTS AND CONTINGENCIES

      As security for performance of certain development obligations, the
Company is contingently liable under two subdivision bonds for
approximately $23,300.

      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.  However, any judgments rendered therein
were subject to the distribution provisions of the Plan, which resulted in
the entitlement of such claims to proceeds that were substantially less
than the face amount of such judgments.  Those proceedings could continue
since the Plan Effective Date had occurred so long as the plaintiffs
therein filed timely claims under the Plan.  However, any judgments
rendered therein were subject to the distribution provisions of the Plan,
which resulted in the entitlement of such claims to proceeds that were
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.  All other claims have been
satisfied.  Proceedings against subsidiaries or affiliates of Kaanapali
Land that are not Debtors were not stayed by the Plan and may proceed.
However, one such subsidiary, Oahu Sugar, filed a subsequent petition for
liquidation under Chapter 7 of the Bankruptcy Code in April 2005, as
described below.



<PAGE>


      On or about February 23, 2001 Kekaha Sugar Co., Ltd. ("KSCo"), a
company that was, prior to its dissolution, a subsidiary of Kaanapali Land,
received a letter from the Hawaii Department of Health ("HDOH") assigning
the former KSCo 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.  KSCo responded to the letter soon
after it was received.  The United States Environmental Protection Agency
("EPA") later performed a visual inspection of the property and indicated
there will be some testing performed.  HDOH has performed some testing at
the site and it is not known whether such test results, if any, will
require any further response activities.  However, as KSCo was
substantially without assets and has dissolved, the ability of KSCo to
perform any requested actions is doubtful.

      On or about February 23, 2001, The Lihue Plantation Company, Limited,
now known as LPC Corporation ("LPCo") 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 relative to LPCo's former
operations including the 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.  LPCo is substantially without
assets, and further pursuit of this matter by HDOH could have a material
adverse effect on the financial condition of LPCo.

      The unaffiliated purchaser of the Kekaha and Lihue Plantation sugar
mills properties in January 2005 assumed any obligations for environmental
matters concerning the property it purchased.  However, there can be no
assurance that such purchaser will have sufficient assets to satisfy a
claim should any substantial liabilities result.

      Pioneer Mill was engaged in a modest cleanup operation arising out of
the discovery of petroleum contamination found at the Pioneer Mill site.
The Pioneer Mill site was assigned a high priority by the HDOH and the HDOH
has shown an interest in the environmental conditions relating to or
arising out of the former operations of Pioneer Mill.  EPA designated HDOH
as the oversight agency for Pioneer Mill.  Pioneer Mill received a report
on the results of environmental testing conducted on the site by the EPA
and HDOH.  However, Pioneer Mill's cleanup efforts to date have satisfied
HDOH and Pioneer Mill received a no further action letter during the fourth
quarter of 2004.  Further routine cleanup operations in connection with the
demolition of the former sugar mill buildings on the site were conducted
with respect to an underground storage tank discovered on the site.  Such
work has been completed as of the date of this report.



<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 was engaged
in environmental site assessment of lands it leased from the U.S. Navy and
located on the Waipio Peninsula.  Oahu Sugar submitted a Remedial
Investigation Report to the HDOH.  The HDOH provided comments that
indicated that additional testing may be required.  Oahu Sugar responded to
these comments with additional information.  On January 9, 2004, 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 sought, 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 was in
the process of responding to the information requests and had notified both
the Navy and the EPA that while it had some modest remaining cash that it
could contribute to further investigation and remediation efforts in
connection with an overall settlement of the outstanding claims, Oahu Sugar
was substantially without assets and would be unable to make a significant
contribution to such an effort.  Attempts at negotiating such a settlement
were fruitless and Oahu Sugar received an order from EPA in March 2005 that
would purport to require certain testing and remediation of the site.  As
Oahu Sugar was substantially without assets, the pursuit of any action,
informational, enforcement, or otherwise, would have had a material adverse
effect on the financial condition of Oahu Sugar.

      Therefore, as a result of the pursuit of further action by the HDOH
and EPA as described above and the immediate material adverse effect that
the actions had on the financial condition of Oahu Sugar, Oahu Sugar filed
with the United States Bankruptcy Court, Northern District of Illinois,
Eastern Division its voluntary petition for liquidation under Chapter 7 of
Title 11, United States Bankruptcy Code, 11 U.S.C. Subsection 101-1330 on
April 19, 2005, Case No. 05-15100.  Such filing is not expected to have a
material adverse effect on the Company as Oahu Sugar was substantially
without assets at the time of the filing and it is not believed that any
other affiliates have any responsibility for the debts of Oahu Sugar.

      The deadline for filing proofs of claim with the bankruptcy court
passed in April 2006.  Prior to the deadline, Kaanapali Land, on behalf of
itself and certain subsidiaries, filed claims that aggregated approximately
$224,000, primarily relating to unpaid guarantee obligations made by Oahu
Sugar that were assigned to Kaanapali Land pursuant to the Plan on the Plan
Effective Date.  In addition, the EPA and the U.S. Navy filed a joint proof
of claim that seeks to recover certain environmental response costs
relative to the Waipio Peninsula site discussed above.  The proof of claim
contained a demand for previously spent costs in the amount of
approximately $260, and additional anticipated response costs of between
approximately $2,760 and $11,450.  No specific justification of these
costs, or what they are purported to represent, was included in the
EPA/Navy proof of claim.  Due to the insignificant amount of assets
remaining in the debtor's estate, it is unclear whether the United States
Trustee who has taken control of Oahu Sugar will take any action to contest
the EPA/Navy claim, or how it will reconcile such claim for the purpose of
distributing any remaining assets of Oahu Sugar.

      EPA has sent three requests for information to Kaanapali Land
regarding, among other things, Kaanapali Land's organization and
relationship, if any, to entities that may have, historically, operated on
the site and with respect to operations conducted on the site.  Kaanapali
Land responded to these requests for information.  By letter dated
February 7, 2007, on the basis that Kaanapali Land is a successor to Oahu
Sugar Company, Limited, a company that operated at the site prior to 1961
("Old Oahu"), EPA advised Kaanapali that it believes it is authorized by
CERCLA to amend the existing Unilateral Administrative Order against Oahu
Sugar Company, LLC, for the clean up of the site to include Kaanapali Land


<PAGE>


as an additional respondent. The purported basis for the EPA's position is
that Kaanapali Land, by virtue of certain corporate actions, is jointly and
severally responsible for the performance of the response actions,
including, without limitation, clean-up at the site.  No such amendment has
taken place as of the date hereof. Instead, the EPA's letter has invited
Kaanapali Land to engage in settlement discussions with the EPA to attempt
to resolve Kaanapali Land's alleged liability. Kaanapali is in the
preliminary stages of evaluating the positions taken by the EPA. While
Kaanapali Land believes that it has defenses to the EPA's position,
Kaanapali Land has nevertheless begun such settlement discussions with EPA
to determine if the matter can be resolved on reasonable terms. Even if
Kaanapali Land were found to be the successor to Old Oahu, Kaanapali Land
believes that its liabilities, if any, should relate solely to a portion of
the period of operation of Old Oahu at the site. Moreover, Kaanapali Land
believes that any settlement should involve substantial participation of
the U.S. Navy, which has owned the site throughout the entire relevant
period, both as landlord under its various leases with Oahu Sugar and Old
Oahu and by operating the site directly during a period when no lease was
in force. There can be no assurances that the matter can be resolved on
terms acceptable to Kaanapali Land or that this matter will not ultimately
have a material adverse effect on the Company.

      Federal tax return examinations have been completed for all years
through 2002.  Refunds aggregating approximately $4,700 for years through
2000 have been received by Kaanapali Land for previous payments of taxes
and interest.  Pursuant to a settlement agreed to with the IRS in 2006, no
liability for Federal taxes was determined for 2001 or 2002; however, in
connection with the settlement of those years, the Company agreed to adjust
certain tax attributes, including the tax basis of assets.  The effect in
2006 on the Company's consolidated balance sheet was to increase deferred
tax liabilities by approximately $1,900.  Income tax expense was also
recorded for the year ended December 31, 2006 due to the finalization of
the Company's 2005 tax return and a payment made in regard to the
settlement of a prior year state tax matter of approximately $300.  The
statutes of limitations with respect to the Company's tax returns for 2003
and subsequent years remain open.  The Company believes adequate provisions
for income taxes have been recorded for all years, although there can be no
assurance that such provisions will be adequate.  To the extent that there
is a shortfall, any such shortfall for which the Company could be liable
could be material.

      On February 15, 2005, D/C Distribution Corporation ("D/C"), a
subsidiary of Kaanapali Land, was served with a lawsuit entitled American &
Foreign Insurance Company v. D/C Distribution and Amfac Corporation, Case
No. 04433669 filed in the Superior Court of the State of California for the
County of San Francisco, Central Justice Center.  No other purported party
has been served.  In the eight-count complaint for declaratory relief,
reimbursement and recoupment of unspecified amounts, costs and for such
other relief as the court might grant, plaintiff alleges that it is an
insurance company to whom D/C has tendered for defense and indemnity
various personal injury lawsuits allegedly based on exposure to asbestos
containing products.  Plaintiff alleges that because none of the parties
have been able to produce a copy of the policy or policies in question, a
judicial determination of the material terms of the missing policy or
policies is needed.  Plaintiff seeks, among other things, a declaration:
of the material terms, rights, and obligations of the parties under the
terms of the policy or policies; that the policies have been exhausted;
that plaintiff is not obligated to reimburse D/C for its attorneys' fees in
that the amounts of attorneys' fees incurred by D/C have been incurred
unreasonably; that plaintiff is entitled to recoupment and reimbursement of
some or all of the amounts it has paid for defense and/or indemnity; and
that D/C has breached its obligation of cooperation with plaintiff.  D/C
has filed an answer and an amended cross-claim.  D/C believes that it has
meritorious defenses and positions, and intends to vigorously defend.  In
February 2006, in order to simplify its administration and facilitate an
additional capital contribution by Kaanapali Land, D/C merged into a newly-
formed Illinois limited liability company named D/C Distribution, LLC.



<PAGE>


      Kaanapali Land, as successor by merger to other entities, and D/C
have been named as defendants in personal injury actions allegedly based on
exposure to asbestos.  While there are only a few such cases that name
Kaanapali Land, there are in excess of 60 cases against D/C that are
pending on the U.S. mainland (primarily in California) and are allegedly
based on D/C's prior business operations.  Each entity defending these
cases 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 or future judgments, if any.  There can
be no assurances that these cases (or any of them) if adjudicated in a
manner adverse to D/C, will not have a material adverse effect on the
financial condition of D/C.  Kaanapali Land does not believe that it has
liability, directly or indirectly, for D/C's obligations in those cases.
Kaanapali Land does not presently believe that the cases in which it is
named will result in any material liability to Kaanapali Land; however,
there can be no assurance in the regard.

      On August 30, 2006, a third party complaint was filed against, KLC
Land Company, LLC, Amfac/JMB Hawaii, LLC, and Amfac/JMB Hawaii, Inc., and
Amfac Distribution Corporation in an action entitled The Queen Emma
Foundation v. Lenox Resources, Inc. and Alan Hornstein, Civil No. CV05-
00546 HG KSC.  In the third party action, third party plaintiff seeks to
recover a share of clean up costs for contamination allegedly discharged by
one or more of the third party defendants at a former commercial site.
Third party plaintiff seeks, among other things, an unspecified amount of
money, attorneys' fees and costs.  The matter has been resolved and
dismissed without any monetary contribution by the subject third party
defendants.

      The Company has received notice from the Hawaii Department of Land
and Natural Resources ("DLNR") that it would inspect all significant dams
and reservoirs in Hawaii, including those maintained by the Company on Maui
in connection with its agricultural operations.  Inspections were performed
in April and October 2006.  To date, the DLNR has cited certain maintenance
deficiencies concerning two of the Company's reservoirs, consisting
primarily of overgrowth of vegetation that make inspection difficult and
could degrade the integrity of reservoir slopes and impact drainage.  The
DLNR has required the vegetation clean-up as well as the Company's plan for
future maintenance, inspections and emergency response.  Revised versions
of the required plans were submitted to DLNR in December 2006.  The Company
has obtained bids for portions of the required remedial work and expects to
commence same during the second quarter of 2007.

      On October 15, 2006, a significant earthquake occurred that was felt
in most parts of the state.  As a consequence of such earthquake, the DLNR,
in conjunction with the U.S. Army Corps of Engineers has inspected each
reservoir and identified certain minor damage.  In addition, Company
personnel have inspected various portions of its Maui water source and
transmission assets to determine if any other damage of significance has
occurred, but has so far found no material damage.  While the damage to the
smaller reservoir cited by the recent DLNR inspection will not require any
immediate action, it is unclear at this time whether the DLNR will require
any work on the larger reservoir even though the damage is located in a
portion of the reservoir that is presently unused.  There can be no
assurance that the expense of doing such required work will not be
material.



<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 alleged 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.  In the eight count
amended complaint, the plaintiff sought unspecified general damages, the
imposition of a constructive trust, an accounting, attorneys' fees and
costs, interest, punitive damages and such other further relief as deemed
appropriate by the court under the circumstances.  The amended complaint
was dismissed with prejudice on March 4, 2005, pursuant to a settlement and
without any payment of money by defendants.

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


(8)   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, and equity in income (loss) from unconsolidated
investments.

      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.

                                         2006        2005        2004
                                       --------    --------    --------
Revenues:
  Property . . . . . . . . . . . . .   $  6,929      31,180       8,139
  Agriculture  . . . . . . . . . . .      1,789       1,515       1,354
  Golf . . . . . . . . . . . . . . .      2,003       3,719       3,843
  Corporate. . . . . . . . . . . . .        826         837         580
                                       --------    --------    --------
                                       $ 11,547      37,251      13,916
                                       ========    ========    ========



<PAGE>


                                         2006        2005        2004
                                       --------    --------    --------
Operating income (loss):
  Property . . . . . . . . . . . . .   $  1,334      15,078       4,981
  Agriculture  . . . . . . . . . . .        323       1,192         973
  Golf . . . . . . . . . . . . . . .     (1,456)        334         381
                                       --------    --------    --------

Operating income (loss). . . . . . .        201      16,604       6,335

Corporate. . . . . . . . . . . . . .      2,276       7,683       5,046
Interest expense . . . . . . . . . .      --           (168)       (743)
                                       --------    --------    --------
Income (loss). . . . . . . . . . . .   $  2,477      24,119      10,638
                                       ========    ========    ========

Identifiable Assets:
  Property . . . . . . . . . . . . .   $ 79,525      60,155      62,009
  Agriculture. . . . . . . . . . . .     54,478      51,633      51,137
  Golf . . . . . . . . . . . . . . .     26,458      27,147      27,362
                                       --------    --------    --------

                                        160,461     138,935     140,508

Corporate. . . . . . . . . . . . . .     24,883      48,940      38,893
                                       --------    --------    --------
                                       $185,344     187,875     179,401
                                       ========    ========    ========

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

                                         2006        2005        2004
                                       --------    --------    --------
Capital Expenditures:
  Property . . . . . . . . . . . . .   $ 15,585       2,538       1,737
  Agriculture. . . . . . . . . . . .         65         224           2
  Golf . . . . . . . . . . . . . . .        935         389         314
  Corporate. . . . . . . . . . . . .          2       --          --
                                       --------    --------    --------
                                       $ 16,587       3,151       2,053
                                       ========    ========    ========

Depreciation and Amortization:
  Property . . . . . . . . . . . . .   $     59          70          92
  Agriculture. . . . . . . . . . . .        102          75          91
  Golf . . . . . . . . . . . . . . .        514         515         535
  Corporate. . . . . . . . . . . . .        379         380         418
                                       --------    --------    --------
Total. . . . . . . . . . . . . . . .   $  1,054       1,040       1,136
                                       ========    ========    ========



<PAGE>


(9)   CALCULATION OF NET INCOME PER SHARE

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

                                 Year Ended    Year Ended    Year Ended
                                 December 31,  December 31,  December 31,
                                    2006          2005          2004
                                 ------------  ------------  ------------
                                          (Amounts in thousands
                                        except per share amounts)
NUMERATOR:
Operating income (loss). . . .    $    2,477        24,119        10,638
                                  ==========    ==========    ==========

Net income (loss). . . . . . .    $    1,612        21,042         4,887
                                  ==========    ==========    ==========
DENOMINATOR:
Denominator for net income
  (loss) per share -
  basic and diluted. . . . . .         1,793         1,793         1,793
                                  ==========    ==========    ==========
Net income (loss) per
  share - basic and diluted. .    $      .90         11.74          2.73
                                  ==========    ==========    ==========

      Pursuant to the Plan, a maximum of 1,863,000 shares of the Company
were issuable.  As of December 31, 2006, the Company had issued and
outstanding 1,631,513 Class B shares, non par value, and approximately
161,100 Class A shares, non par value stock.  The Company does not expect
to issue any additional shares under the Plan.  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.

(10)  SUPPLEMENTARY QUARTERLY DATA (UNAUDITED)

                                                2006
                           ----------------------------------------------
                            At 3/31     At 6/30     At 9/30     At 12/31
                           ----------  ----------  ----------  ----------
Total revenues . . . . . . $    2,138       1,116       6,002       2,291
                           ==========  ==========  ==========  ==========

Net income (loss). . . . . $     (697)     (3,983)     (2,962)      9,254
                           ==========  ==========  ==========  ==========

Net income (loss)
  per Interest . . . . . . $     (.39)      (2.22)      (1.65)       5.16
                           ==========  ==========  ==========  ==========

                                                2005
                           ----------------------------------------------
                            At 3/31     At 6/30     At 9/30     At 12/31
                           ----------  ----------  ----------  ----------
Total revenues . . . . . . $    2,932      24,125       9,256         938
                           ==========  ==========  ==========  ==========

Net income (loss). . . . . $       49       4,487      (7,642)     24,148
                           ==========  ==========  ==========  ==========

Net income (loss)
  per Interest . . . . . . $      .03        2.50       (4.26)      13.47
                           ==========  ==========  ==========  ==========


<PAGE>


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

      There were no changes in or disagreements with the accountants during
the fiscal years 2006, 2005 and 2004.



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.



ITEM 9B. OTHER INFORMATION

      Not Applicable.


<PAGE>


                                 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, 2007, 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
      Stephen A. Lovelette                Executive Vice President
      Gailen J. Hull                      Senior Vice President and
                                          Chief Financial Officer

      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 were previously 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 RSM McGladry,
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.



<PAGE>


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

      Gary Nickele (age 54) 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 Company, the
administrator of ALP Liquidating Trust, which exists to manage the
liquidation of the former business of Arvida/JMB Partners, L.P. ("Arvida
Partners").  From October 1987 until September 2005, Arvida Partners
conducted land development activities primarily in Florida.  Mr. Nickele
has been associated with JMB and Arvida Partners since February, 1984 and
September, 1987, respectively.  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 operations of the Company and Arvida
Partners, 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.

      Stephen Lovelette (age 50) 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.  Prior
to joining an affiliate of JMB, Mr. Lovelette worked for Arvida
Corporation, the predecessor to Arvida Partners, under its previous
ownership.  Mr. Lovelette holds a bachelor's degree from The College of the
Holy 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 57) is Senior Vice President and, since August
2002, Chief Financial Officer of Kaanapali Land.  Mr. Hull has been
associated with JMB since March, 1982.  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 that applies to its
principal executive, financial or accounting officers 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         Year     ($)       ($)      ($)
---------------    ------------    -----   -------   ------  ---------

Gary Nickele       President        2006   180,000  100,000     N/A
                   and Chief        2005   180,000  100,000     N/A
                   Executive        2004   180,000  100,000     N/A
                   Officer

Stephen A.
  Lovelette        Executive        2006   255,000  100,000     N/A
                   Vice President   2005   215,000  100,000     N/A
                                    2004   195,000  100,000     N/A

Gailen J. Hull     Senior Vice      2006   175,000   50,000     N/A
                   President and    2005   175,000   50,000     N/A
                   Chief Financial  2004   175,000   50,000     N/A
                   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 all other executive officers.

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





<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, 2007, 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, 2006, 2005 and
2004 was approximately $74 thousand, $13 thousand and $8 thousand,
respectively, all of which was paid as of December 31, 2006.

      The Company pays a non-accountable reimbursement of approximately $30
thousand per month to JMB Realty Corporation in respect of general overhead
expense, all of which was paid as of December 31, 2006.

      The Company reimburses its 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 affiliates, Management Services,
LLC, and JMB Financial Advisors, LLC during 2006.  The total costs for the
years ended December 31, 2006, 2005 and 2004 was approximately $2.6
million, $2.4 million and $1.8 million, respectively, of which
approximately $856 thousand was unpaid as of December 31, 2006.

      In light of the fact that the Company's shares are not publicly
traded, is a limited liability company, and has no independent outside
directors or managers, it has no formal policy or procedure for the review,
approval or ratification of related party transactions that are required to
be disclosed pursuant to Item 404 of Regulation S-K.


ITEM 14.  PRINCIPAL ACCOUNTANT FEES AND SERVICES

      The aggregate audit fees incurred for professional services by Ernst
and Young LLP ("E&Y") in 2006, 2005 and 2004 were $207,500, $167,600 and
$157,000, 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 non-
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  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.

      10.2  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.

      10.3  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.

      10.4  Lot 3 Option Agreement by and between NB Lot 3, LLC and
            Maui Beach Resort Limited Partnership dated August 5, 2003
            filed as an exhibit to the Company's report on Form 8-K
            (File No. 0-50273) filed on June 21, 2005 is hereby
            incorporated by reference.

      21.   List of Subsidiaries



<PAGE>


      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.

      (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 23, 2007



     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 23, 2007



                                    /s/ Gary Nickele
                                    ---------------------
                              By:   Gary Nickele,
                                    President and
                                    Chief Executive Officer
                              Date: March 23, 2007