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MAUI LAND & PINEAPPLE CO INC

MAUI LAND & PINEAPPLE CO INCMLPEarnings & Financial Report

NYSE · Real Estate · Real Estate

Maui Land & Pineapple Company, Inc. is a land holding and operating company founded in 1909 and based in Kapalua, Hawaii, United States. It owns approximately 24,300 acres (100 km2) on the island of Maui. It develops, sells, and manages residential, resort, commercial and industrial real estate; and operates retail and utility operations at the Kapalua Resort. ML&P also owns and manages the 8,304-acre (33.61 km2) Puʻu Kukui Watershed Preserve, one of the largest private nature preserves in th...

What changed in MAUI LAND & PINEAPPLE CO INC's 10-K — 2022 vs 2023

Top changes in MAUI LAND & PINEAPPLE CO INC's 2023 10-K

150 paragraphs added · 119 removed · 89 edited across 6 sections

Item 1. Business

Business — how the company describes what it does

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We also utilize an ethics reporting email and voice system which is monitored by the Audit Committee of the Board of Directors. Our Code of Business Conduct and Ethics is available on our website at www.mauiland.com under the Investor Relations section of the website.
We also utilize an ethics reporting email and voice system which is monitored by the Audit Committee of the Board of Directors. Our Code of Business Conduct and Ethics is available on our website at www.mauiland.com under the Investor section of the website.
Resort Amenities Our Resort Amenities segment includes the operations of the Kapalua Club, a private, non-equity club providing its members special programs, access and other privileges at certain of the amenities at the Kapalua Resort, including a 30,000 square foot full-service spa and a private pool-side dining beach club.
Resort Amenities Our Resort Amenities segment includes the operations of the Kapalua Club, a private, non-equity club providing its members special programs, access and other privileges at certain amenities at the Kapalua Resort, including a 30,000 square foot full-service spa and fitness center as well as a private pool-side dining beach club.
The Company consists of a landholding and operating parent company, its principal subsidiary, Kapalua Land Company, Ltd., and certain other subsidiaries.
The Company consists of a landholding and operating parent company, has a principal subsidiary, Kapalua Land Company, Ltd., and certain other subsidiaries.
Kapalua Central Resort is a commercial town center and residential community located in the core of the Kapalua Resort. It is comprised of 46 acres and is planned to include up to 61,000 square feet of commercial space and 196 condominium and multi-family residential units. State and County land use entitlements have been secured for this project.
Kapalua Central Resort is a commercial town center and residential community located in the heart of the Kapalua Resort. It is comprised of 46 acres and State and County land use entitlements have been secured for this project. The project is currently planned to include up to 196 residential units and 61,000 square feet of commercial space.
We also make available through our website all filings of our executive officers and directors on Forms 3, 4 and 5 pursuant to Section 16 of the Exchange Act. These filings are also available on the SEC’s website at www.sec.gov. 3 Table of Contents
We also make available through our website all filings of our executive officers and directors on Forms 3, 4 and 5 pursuant to Section 16 of the Exchange Act. These filings are also available on the Security and Exchange Commission’s website at www.sec.gov.
For additional information and operating results related to the above business segments refer to the section entitled “General Development of Business” in this Item 1 and in Note 13 to our financial statements set forth in Item 8 of this Annual Report.
For additional information and operating results related to the above business segments refer to the section entitled “Business Segments” in this Item 1 and in Note 13 to our financial statements set forth in Item 8 of this Annual Report.
Employees We had nine full-time employees at December 31, 2022, none of whom are members of a collective bargaining group. We have adopted a Code of Business Conduct and Ethics, which applies to all of our directors, officers and employees.
Employees We had ten employees at December 31, 2023, of which seven were full-time employees none of whom are members of a collective bargaining group. We have adopted a Code of Business Conduct and Ethics, which applies to all of our directors, officers and employees.
The name of the Company after reincorporation remains Maui Land & Pineapple Company, Inc. and shares of its common stock continue to be listed on the New York Stock Exchange (“NYSE”) under the ticker symbol “MLP.” Depending upon the context, the terms “Company,” “we,” “our,” and “us,” refer to either Maui Land & Pineapple Company, Inc. alone, or to Maui Land & Pineapple Company, Inc. and its subsidiaries collectively.
Shares of the Company’s common stock are listed on the New York Stock Exchange (“NYSE”) under the ticker symbol “MLP.” Depending upon the context, the terms “Company,” “we,” “our,” and “us,” refer to either Maui Land & Pineapple Company, Inc. alone, or to Maui Land & Pineapple Company, Inc. and its subsidiaries collectively.
Revenues from our Resort Amenities segment totaled $0.9 million, or approximately 4% of our total operating revenues for the year ended December 31, 2022. The Kapalua Club is principally dependent on the overall appeal and success of the Kapalua Resort. The resort faces competition from other resort destination communities on Maui and other parts of Hawaii.
Revenues from our Resort Amenities segment totaled $0.8 million, or approximately 7% of our total operating revenues for the year ended December 31, 2023. The Kapalua Club is principally dependent on the overall appeal and success of the Kapalua Resort. The resort faces competition from other resort destination communities on Maui and other parts of Hawai‘i.
General Development of Business Real Estate Our Real Estate segment includes all land planning, entitlement, development, and sales activities of our landholdings on Maui. Our principal real estate development is the Kapalua Resort, a master-planned, destination resort and residential community located in West Maui encompassing approximately 3,000 acres.
Business Segments Land Development and Sales Our Land Development and Sales segment includes all land planning, entitlement, development, and sales activities of our landholdings on Maui. Our principal real estate development is the Kapalua Resort, a master-planned, destination resort and residential community located in West Maui.
We will promptly disclose on our website the nature of any amendment to, or waiver or implicit waiver from, our Code of Business Conduct and Ethics that applies to any principal executive officer, principal financial officer, principal accounting officer or persons performing similar functions.
We will promptly disclose on our website the nature of any amendment to, or waiver or implicit waiver from, our Code of Business Conduct and Ethics that applies to any principal executive officer, principal financial officer, principal accounting officer or persons performing similar functions. Available Information Our internet address is www.mauiland.com .
Revenues from our Leasing segment totaled $8.5 million, or approximately 41% of our total operating revenues for the year ended December 31, 2022. 2 Table of Contents Commercial and Industrial Leases – We are the owner and lessor of approximately 194,000 square feet of commercial, retail and light industrial properties, including restaurants, retail outlets, office buildings, warehouses and Kapalua Resort activities.
Revenues from our Leasing segment totaled $8.5 million, or approximately 78% of our total operating revenues for the year ended December 31, 2023. Commercial and Industrial Leases – We are the owner and lessor of approximately 267,747 square feet of commercial, retail and light industrial properties, including restaurants, retail outlets, office buildings, warehouses and Kapalua Resort activities.
Today, the Kapalua Resort is an internationally recognized world-class destination resort and residential community. We presently have entitlements to develop a variety of projects in the Kapalua Resort. Two that are currently planned include Kapalua Mauka and Kapalua Central Resort.
Today, the Kapalua Resort is an internationally recognized world-class destination resort, beach, golf and residential community. We presently have entitlements to develop a variety of projects in the Kapalua Resort. Three projects that are currently in various stages of planning include Kapalua Central Resort, Kapalua Mauka, and Kapalua Makai.
The entitlement process requires that we satisfy all conditions and restrictions imposed in connection with such governmental approvals, including, among other things, construction of infrastructure improvements, payment of impact fees – for conditions such as schools, public parks and traffic mitigation – restrictions on permitted uses of the land, and provision of affordable housing.
The entitlement process requires that we satisfy certain conditions and restrictions in connection with such governmental approvals, including, among other things, infrastructure improvements and impact fees in the form of dedicated land for schools and public parks, provide traffic mitigation measures, restrictions on permitted uses of the land, and provisions of affordable housing.
Trademark and Trade Name Licensing – We currently have licensing agreements for the use of our registered Kapalua trademarks and trade names with several different companies, mainly in conjunction with our agricultural, commercial and industrial leases.
Trademark and Trade Name Licensing – Our primary trademarks and trade names include Kapalua, the Kapalua butterfly logo and the Maui Gold name and associated pineapple logo. We currently have licensing agreements for the use of these trademarks and trade names with several different companies, mainly in conjunction with our agricultural, commercial and industrial leases.
Potable and Non-Potable Water Systems – We own and operate several potable water wells, non-potable irrigation water ditches, reservoirs and transmission systems serving the Kapalua Resort, the County of Maui, and agricultural users in West and Upcountry Maui. Stewardship and Conservation – We manage the conservation of a 9,000-acre nature and watershed preserve in West Maui.
Potable and Non-Potable Water Systems – We own and operate several potable water wells, non-potable irrigation water ditches, reservoirs and transmission systems serving the Kapalua Resort, the County of Maui, and agricultural users in West and Upcountry Maui.
The following summarizes information related to our commercial and industrial leases as of December 31, 2022: Total Average Lease Square Occupancy Expiration Footage Percentage Dates Kapalua Resort 57,000 93% 2023 - 2048 Other West Maui 24,000 96% 2024 - 2034 Upcountry Maui 113,000 77% 2023 - 2032 Agricultural Leases – We are the lessor of approximately 4,000 acres of diversified agriculture, renewable energy, eco tours, and activities land leases in West and Upcountry Maui.
The following summarizes information related to our commercial and industrial leases as of December 31, 2023: Total Average Lease Square Occupancy Expiration Footage Percentage Dates Kapalua Resort 74,700 85% 2024 - 2032 Other West Maui 55,450 68% 2024 - 2034 Upcountry Maui 137,597 71% 2024 - 2032 2 Table of Contents Agricultural Leases – We are the lessor of approximately 11,000 acres of diversified agriculture, renewable energy, eco tours, and activities land leases in West and Upcountry Maui.
The price and market for luxury and other real estate in Maui are highly cyclical and influenced significantly by interest rates, the general real estate markets in the mainland United States and specifically the West Coast, the popularity of Hawaii as a vacation destination and second-home market, the general condition of the economy in the United States and Asia, and the relationship of the dollar to foreign currencies.
The price and market for resort and other real estate in Maui is generally cyclical and influenced significantly by interest rates, other real estate markets in the mainland United States, specifically the west coast, where Hawai‘i is a popular location for vacations and the second-home market, the general condition of the economy in the United States and Asia, and the relationship of the dollar to foreign currencies.
The following is a summary of our development projects as of December 31, 2022: Location Approximate Number of Acres Zoned for Planned Use Anticipated Completion Dates Kapalua Resort 900 Yes 2024 - 2039 Hali’imaile Town 300 No 2029 - 2034 We are engaged in planning, permitting and entitlement activities for our development projects, and we intend to proceed with construction and sales of the following projects, among others, when internal and external factors permit: • Kapalua Resort: We began development of the Kapalua Resort in the early 1970’s.
The following is a summary of our active development projects as of December 31, 2023: Location Approximate Number of Acres Zoned for Planned Use Projected Start/End Dates West Maui - Kapalua Central Resort 50 Yes 2024 - 2031 West Maui – Kapalua Mauka 930 Yes 2024 - 2034 West Maui – Kapalua Makai 40 Yes 2024 - 2034 Hali‘imaile Ranch Lots 30 Yes 2024 - 2031 We are engaged in planning, permitting and entitlement activities for our development projects, and we intend to proceed with construction and sales of the following projects, among others, when internal and external factors permit: West Maui - Kapalua Resort: We began development of the Kapalua Resort in the early 1970’s.
Our Real Estate segment faces substantial competition from other landowners and developers on the island of Maui, as well as in other parts of Hawaii and the mainland United States.
Our Land Development and Sales segment faces competition from other landowners and developers in Maui, as well as in other parts of Hawai‘i and the mainland United States.
Real Estate Planning and Entitlements – Appropriate entitlements must be obtained for land that is intended for development. Securing proper land entitlements is a process that requires obtaining county, state and federal approvals, which can take many years to complete and entails a variety of risks.
Real Estate Planning and Entitlements – In certain cases we must obtain appropriate entitlements and approvals for the land we intend to develop. Securing proper land entitlements is a process that may require county, state, and federal approvals, which can take years to complete and entails a variety of risks.
The following is a summary of our landholdings in acres as of December 31, 2022: West Maui Upcountry Maui Total Fully entitled urban 900 - 900 Agricultural zoned 10,800 1,500 12,300 Conservation/watershed 9,000 - 9,000 20,700 1,500 22,200 Revenues from our Real Estate segment totaled $11.6 million, or approximately 55% of our total operating revenues for the year ended December 31, 2022.
The following is a summary of our landholdings in approximate number of acres as of December 31, 2023: West Maui Upcountry Maui Total Commercial/Industrial 22 - 22 Residential 933 933 Agricultural 9,481 1,500 10,981 Conservation/watershed 10,350 - 10,350 Total 20,786 1,500 22,286 Revenues from our Real Estate segment totaled $1.6 million, or approximately 15% of our total operating revenues for the year ended December 31, 2023.
The reincorporation was effected through a plan of conversion completed on July 18, 2022. Total authorized capital stock provided by the Delaware certificate of incorporation includes 48,000,000 shares, consisting of 43,000,000 shares of common stock, par value $0.0001 per share, and 5,000,000 shares of preferred stock, par value $0.0001 per share.
Total authorized capital stock of the Company includes 48,000,000 shares, consisting of 43,000,000 shares of common stock, par value $0.0001 per share, and 5,000,000 shares of preferred stock, par value $0.0001 per share.
Item 1. BUSINESS Overview Maui Land & Pineapple Company, Inc. is a Delaware corporation and the successor to a business organized in 1909. On June 29, 2022, the Company’s stockholders voted to approve a proposal to change the state of incorporation of the Company from Hawaii to Delaware.
Item 1. BUSINESS Overview Maui Land & Pineapple Company, Inc. is a Delaware corporation and the successor to a business organized in 1909 as a Hawai‘i corporation. The Company reincorporated from Hawai‘i to Delaware pursuant to a plan of conversion completed on July 18, 2022.
A portion of our stewardship and conservation efforts is subsidized by the State of Hawaii. Our Leasing segment operations are highly sensitive to economic conditions, including tourism and consumer spending levels and faces substantial competition from other property owners in Maui and Hawaii.
Our Leasing segment operations are highly sensitive to economic conditions, including tourism and consumer spending levels, and faces substantial competition from other property owners in both Maui and Hawai‘i as a whole. The amount of rainfall and the level of development in the Kapalua Resort area also affect the demand for our potable and non-potable water.
We actively work with the community, regulatory agencies, and legislative bodies at all levels of government to obtain necessary entitlements consistent with the needs of the community. 1 Table of Contents We have approximately 1,200 acres of land on Maui that are in various stages of the development process.
We actively work with the community, regulatory agencies, and legislative bodies at all levels of government to obtain and manage necessary approvals consistent with the needs of the community. Land Development and Sales was previously named Real Estate.
An advisory vote of stockholders is cast annually on the compensation paid to our named executive officers. Available Information Our internet address is www.mauiland.com . Information about the Company is also available on www.kapalua.com. Reference in this Annual Report to these website addresses does not constitute incorporation by reference of the information contained on the websites.
Reference in this Annual Report to this website address does not constitute incorporation by reference of the information contained on the websites.
In December 2021, we entered into an agreement to sell the Kapalua Central Resort property for $40.0 million.
In December 2021, we entered into an agreement to sell the Kapalua Central Resort property for $40.0 million. On April 11, 2023, we allowed terms of the agreement to expire and regained control of the project from the developer. We are currently processing an extension of a Special Management Area (“SMA”) permit issued by the County of Maui.
We own approximately 22,000 acres of land on the island of Maui, Hawaii and develop, sell, and manage residential, resort, commercial, agricultural, and industrial real estate through the following business segments: • Real Estate — Our real estate operations consist of land planning and entitlement, development, and sales activities. • Leasing — Our leasing operations include commercial, agricultural, and industrial land and property leases, licensing of our registered trademarks and trade names, management of potable and non-potable water systems in West and Upcountry Maui, and stewardship of conservation areas. • Resort Amenities — We manage the operations of the Kapalua Club, a private, non-equity club program providing our members special programs, access, and other privileges at certain amenities at the Kapalua Resort.
Leasing : Our leasing operations include commercial, agricultural, and industrial land and property leases, licensing of our registered trademarks and trade names, management of potable and non-potable water systems in West and Upcountry Maui, and stewardship of conservation areas.
Removed
No change in ownership resulted from the reincorporation as each outstanding share of common stock was automatically converted into one share of the reincorporated Company.
Added
We own approximately 22,300 acres of land and 268,000 square feet of commercial property on the island of Maui, Hawai‘i which we put into productive use by planning, managing, developing, and selling residential, resort, commercial, agricultural, and industrial real estate through three business segments: Land Development & Sales : Our land development and sales operations consist of land planning and entitlement, development, and sales activities.
Removed
Kapalua Mauka is a long-term expansion project of the Kapalua Resort which is located directly upslope of the existing resort development. As presently planned, it encompasses 800 acres and includes up to 639 residential units with extensive amenities, including up to 27 additional holes of golf. State and County land use entitlements have been secured for this project.
Added
Resort Amenities : We manage the operations of the Kapalua Club, a private, non-equity club program providing our members special programs, access, and other privileges at certain amenities in the Kapalua Resort.
Removed
On May 13, 2022, terms of the agreement were amended to include a closing condition requiring the Maui Planning Commission to approve a (5) five-year extension of a Special Management Area (“SMA”) permit issued by the County of Maui by April 10, 2023. If the extension is not approved by April 10, 2023, the purchase agreement will terminate.
Added
The name change of the segment better represents the mission, vision and direction of the Company consistent with the leadership transition that occurred in April 2023.
Removed
If the extension is approved, the closing date is expected to be no later than (30) thirty days after the date of the extension approval. • Hali`imaile Town: An expansion of an existing plantation town in Upcountry Maui, this project is contemplated to be a holistic traditional community with agriculture and sustainability as core design elements.
Added
There is no impact to prior reporting due to this segment name change. 1 Table of Contents In 2023, under new leadership, our primary activity in this segment focused on market research and master planning of all owned land.
Removed
The project includes 290 acres classified as “Small Town” in the long-range County of Maui Island Plan. This designation allows the potential for residential, industrial and commercial development at a moderate density. We are in the early stages of this project’s development and securing State and County land use entitlements are expected to take several years.
Added
In addition to strategic planning of our entire asset portfolio, we have approximately 1,050 acres of land on Maui that are in various stages of active planning and development process.
Removed
Projected development costs are expected to be financed by debt financing, private investment, joint ventures with other development or construction companies, or a combination of these methods.
Added
We are actively working with our consultants and engaging with the community in preparation for the permit extension review, which is anticipated to occur in 2024. Concurrently, we are negotiating a joint venture to advance development of the property. Kapalua Mauka was master planned and entitled in 2008 as a luxury single-family residential golf course neighborhood within Kapalua Resort.
Removed
The amount of rainfall and the level of development in the Kapalua Resort area also affect the demand for our potable and non-potable water.
Added
The property is located directly upslope of the existing resort development. The first phase of Kapalua Mauka, consisting of 51 residential lots, was subdivided, sold to a developer, and has since been completed.
Removed
An executive compensation program is designed and administered by the Compensation Committee of the Board of Directors. The program includes annual and long-term incentive compensation plans for certain of the Company’s executive officers. Payouts are payable in common stock and are based on achieving predetermined thresholds under various performance measurements.
Added
The remaining project area encompasses approximately 930 acres of land and has State and County land use entitlements to deliver up to 639 single-family homes, 19 condominium units, resort amenities, and an additional golf course or recreational space. As of this filing, planning and pre-development efforts are underway on the project.
Added
Kapalua Makai is a 37-acre future project of the Kapalua Resort which is located adjacent to Honokahua Bay, also known as DT Fleming Beach Park. The land has State and County land use entitlements to deliver up to up to 573 residences, 349 hotel units, and new commercial and/or resort amenities.
Added
As of this filing, master planning and pre-development efforts are underway on the project. Upcountry Maui - Hali'imaile Town : Hali‘imaile is an existing town located in Upcountry Maui, adjacent to historic Makawao Town.
Added
We own approximately 1,463 acres in Hali‘imaile zoned for agriculture, light industrial, and business which is in the federal Tax Cuts and Jobs Act (“TCJA”) Opportunity Zone. Our landholdings include 290 acres classified for growth potential as “Small Town” in the long-range County of Maui Island Plan.
Added
As of this filing, we are underway with master planning for all land in Hali‘imaile. In December 2023, we entered into a joint venture, BRE2 LLC, with Stone Properties, a Maui based developer.
Added
The joint venture is currently underway to develop approximately 31 acres in Hali‘imaile Town to be sold as ranch lots As we develop these and other strategic projects, we expect to finance pre-development costs with operating revenues, proceeds from non-strategic land sales, debt financing, capital from joint venture partners or a combination of these methods.
Added
Our land holdings in West Maui are highly desired due to their proximity to beaches and amenities, along with a natural grade which provides a majority of the land with unobstructed ocean views.
Added
Stewardship and Conservation – We own and manage the conservation of a 9,000-acre nature and watershed preserve in West Maui known as the Pu‘u Kukui Watershed Preserve. A portion of our stewardship and conservation efforts is subsidized by the State of Hawai‘i.
Added
The 2023 Maui wildfires negatively impacted leasing revenues in West Maui and led us to provide rent relief to certain tenants.

Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

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If any of these risks are realized, our business, financial condition, results of operations, liquidity and prospects could be materially and adversely affected. In that case, the value of the Company’s common stock could decline, and stockholders may lose all or part of their investment.
If any of these risks are realized, our business, financial condition, results of operations, liquidity and prospects could be materially and adversely affected. In that case, the value of our common stock could decline, and stockholders may lose all or part of their investment.
We have several trademarks that we have registered in the United States and in several foreign countries. To the extent that our exclusive use of these trademarks is challenged, we intend to vigorously defend our rights. If we are not successful in defending our rights, our businesses could be adversely impacted.
We have several trademarks that we have been registered in the United States and in several foreign countries. To the extent that our exclusive use of these trademarks is challenged, we intend to vigorously defend our rights. If we are not successful in defending our rights, our businesses could be adversely impacted.
Factors such as worldwide economic uncertainty and weakness, the level of unemployment in Hawaii and the mainland United States, natural disasters, substantial increases in the cost of energy, including fuel costs, and events in the airline industry that may reduce passenger capacity or increase traveling costs could reduce the number of visitors to the Kapalua Resort and negatively affect a potential buyer’s demand for our future property developments, each of which could have a material adverse impact on our business, financial condition and results of operations.
Factors such as worldwide economic uncertainty and weakness, the level of unemployment in Hawai‘i and the mainland United States, natural disasters, substantial increases in the cost of energy, including fuel costs, and events in the airline industry that may reduce passenger capacity or increase traveling costs could reduce the number of visitors to the Kapalua Resort and negatively affect a potential buyer’s demand for our future property developments, each of which could have a material adverse impact on our business, financial condition and results of operations.
New project developments have a number of risks, including risks associated with: • construction delays or cost overruns that may increase project costs; • receipt of zoning, occupancy and other required governmental permits and authorizations; • development costs incurred for projects that are not pursued to completion; • earthquakes, tsunamis, hurricanes, floods, fires or other natural disasters that could adversely impact a project; • defects in design or construction that may result in additional costs to remedy or require all or a portion of a property to be closed during the period required to rectify the situation; • ability to raise capital; • impact of governmental fines and assessments such as park fees or affordable housing requirements; • governmental restrictions on the nature or size of a project or timing of completion; and • the potential lack of adequate building/construction capacity for large development projects.
New project developments have a number of risks, including risks associated with: • construction delays or cost overruns that may increase project costs; • receipt of zoning, subdivision, water availability, occupancy and other required governmental permits and authorizations; • development costs incurred for projects that are not pursued to completion; • earthquakes, tsunamis, hurricanes, floods, fires or other natural disasters that could adversely impact a project; • defects in design or construction that may result in additional costs to remedy or require all or a portion of a property to be closed during the period required to rectify the situation; • ability to raise capital; • impact of governmental fines and assessments such as park fees or affordable housing requirements; • governmental restrictions on the nature or size of a project or timing of completion; and • the potential lack of adequate building/construction capacity for large development projects.
Among others, including the risks and uncertainties discussed in this Annual Report, the following factors, some of which are out of our control, may cause the market price of our common stock to continue to be volatile: • our quarterly or annual earnings or those of other companies in our industry; • actual or unanticipated fluctuations in our operating results; • the relatively low volume of trading in our stock; and • the lack of significant securities analysts coverage of our stock.
Among others, including the risks and uncertainties discussed in this Annual Report, the following factors, some of which are out of our control, may cause the market price of our common stock to continue to be volatile: • our quarterly or annual earnings or those of other companies in our industry; • actual or unanticipated fluctuations in our operating results; • the relatively low volume of trading in our stock; and • the lack of significant securities analysts’ coverage of our stock.
A joint venture involves certain risks such as: • our actual or potential lack of voting control over the joint venture; • our ability to maintain good relationships with our joint venture partners; 5 Table of Contents • a venture partner at any time may have economic or business interests that are inconsistent with ours, especially in light of economic uncertainty and weakness; • a venture partner may fail to fund its share of operations and development activities, or to fulfill its other commitments, including providing accurate and timely accounting and financial information to us; and • a joint venture or venture partner could lose key personnel.
A joint venture involves certain risks such as: • our actual or potential lack of voting control over the joint venture; • our ability to maintain good relationships with our joint venture partners; • a venture partner at any time may have economic or business interests that are inconsistent with ours, especially in light of economic uncertainty and weakness; • a venture partner may fail to fund its share of operations and development activities, or to fulfill its other commitments, including providing accurate and timely accounting and financial information to us; and • a joint venture or venture partner could lose key personnel.
If any development project is not completed on time or within budget, this could have a material adverse effect on our financial results. If we are unable to obtain required land use entitlements at reasonable costs, or at all, our operating results would be adversely affected.
If any development project is not completed on time or within budget, this could have a material adverse effect on our financial results. If we are unable to obtain required land use approvals at reasonable costs, or at all, our operating results would be adversely affected.
If we are unable to successfully compete with other developers of real estate in Maui, our financial results could be materially adversely affected. Our real estate products face significant competition from other luxury resort real estate properties on Maui, and from other residential property in Hawaii and the mainland United States.
If we are unable to successfully compete with other developers of real estate in Maui, our financial results could be materially adversely affected. Our real estate products face significant competition from other luxury resort real estate properties on Maui, and from other residential property in Hawai‘i and the mainland United States.
We intend to develop resort and other properties as suitable opportunities arise, taking into consideration the general economic climate.
We intend to develop subdivisions, resort and other properties as suitable opportunities arise, taking into consideration the general economic climate.
Item 1A. RISK FACTORS Our short and long-term success is subject to numerous risks and uncertainties, many of which involve factors that are difficult to predict or beyond our control. As a result, investing in the Company’s common stock involves substantial risk.
Item 1A. RISK FACTORS Our short and long-term success is subject to numerous risks and uncertainties, many of which involve factors that are difficult to predict or beyond our control. As a result, investing in our common stock involves substantial risk.
The market for real estate on Maui and in Hawaii generally tends to be highly cyclical and is typically affected by numerous changes in local, national, and worldwide conditions, especially economic conditions, many of which are beyond our control, including the following: • periods of economic uncertainty and weakness in Hawaii and in the United States generally; • uncertainties and changes in U.S. social, political, regulatory, and economic conditions or laws and policies, and concerns surrounding ongoing developments in the European Union, the Middle East and Asia; • high unemployment rates and low consumer confidence; • the general availability of mortgage financing, including the effect of more stringent lending standards for mortgages and perceived or actual changes in interest rates; • energy costs, including fuel costs, which could impact the cost and desirability of traveling to Hawaii; • local, state, and federal government regulation, including eminent domain laws, which may result in a taking for less compensation than what we believe our property is worth; 4 Table of Contents • the popularity of the Kapalua Resort area, the island of Maui, and the State of Hawaii as a vacation destination or second home market; • the relationship of the dollar to foreign currencies; • tax law changes, including limits or potential elimination of the deductibility of certain mortgage interest expenses, real property taxes and employee relocation expenses; and/or • acts of God, such as tsunamis, hurricanes, earthquakes, and other natural disasters, including the impacts of the COVID-19 pandemic and its variants.
The market for real estate on Maui and in Hawai‘i generally tends to be highly cyclical and is typically affected by numerous changes in local, national, and worldwide conditions, especially economic conditions, many of which are beyond our control, including the following: • periods of economic uncertainty and weakness in Hawai‘i and in the United States generally; • uncertainties and changes in U.S. social, political, regulatory, and economic conditions or laws and policies, and concerns surrounding ongoing developments in the European Union, the Middle East and Asia; • high unemployment rates and low consumer confidence; • the general availability of mortgage financing, including the effect of more stringent lending standards for mortgages and perceived or actual changes in interest rates; • energy costs, including fuel costs, which could impact the cost and desirability of traveling to Hawai‘i; • local, state, and federal government regulation, including eminent domain laws, which may result in a taking for less compensation than what we believe our property is worth; • the popularity of the Kapalua Resort area, the island of Maui, and the State of Hawai‘i as a vacation destination or second home market; • the relationship of the dollar to foreign currencies; • tax law changes, including limits or potential elimination of the deductibility of certain mortgage interest expenses, real property taxes and employee relocation expenses; and/or • acts of God, such as wildfires as recently experienced on Maui, tsunamis, hurricanes, earthquakes, and other natural disasters, including the impacts of the COVID-19 pandemic and its variants.
Our businesses are dependent on attracting visitors to the Kapalua Resort, to the island of Maui, and to the State of Hawaii as a whole. Economic factors that affect the number of visitors, their length of stay or expenditure levels will affect our financial performance.
Our businesses are dependent on attracting visitors to the Kapalua Resort, to the island of Maui, and to the State of Hawai‘i as a whole. Economic factors that affect the number of visitors, their length of stay or expenditure levels will affect our financial performance.
In some situations, we may be unable to obtain the necessary entitlements to proceed with a real estate development or may be required to alter our plans for the development. Delays or failures to obtain these entitlements may have a material adverse effect on our financial results.
In some situations, we may be unable to obtain the necessary approvals to proceed with a real estate development or may be required to alter our plans for the development. Delays or failures to obtain these approvals may have a material adverse effect on our financial results.
If we were to become obligated under such arrangements or become subject to the risks associated with joint venture relationships, our business, financial condition and results of operations may be adversely affected. If we are unable to complete land development projects within forecasted time and budget expectations, if at all, our financial results may be negatively affected.
If we were to become obligated under such arrangements or become subject to the risks associated with joint venture relationships, our business, financial condition and results of operations may be adversely affected. 5 Table of Contents If we are unable to complete land development projects within forecasted time and budget expectations, if at all, our financial results may be negatively affected.
Trading in our stock over the last twelve months has been limited, so investors may not be able to sell as much stock as they want at prevailing prices. The average daily trading volume in our common stock for the year ended December 31, 2022, was approximately 8,000 shares.
Trading in our stock over the last twelve months has been limited, so investors may not be able to sell as much stock as they want at prevailing prices. The average daily trading volume in our common stock for the year ended December 31, 2023 was approximately 26,000 shares.
For additional information, refer to the section entitled “Cautionary Note Regarding Forward-Looking Statements” within this Annual Report. Risks Related to our Business Unstable macroeconomic market conditions could materially and adversely affect our operating results. Our operations and performance depend on worldwide economic conditions.
For additional information, refer to the section entitled “Cautionary Note Regarding Forward-Looking Statements” within this Annual Report. 3 Table of Contents Risks Related to our Business Unstable macroeconomic market conditions could materially and adversely affect our operating results. Our operations and performance depend on worldwide economic conditions.
Delisting could negatively impact us by, among other things, reducing the liquidity and market price of our common stock, reducing the number of investors willing to hold or acquire our common stock, and limiting our ability to issue additional securities or obtain additional financing in the future, and might negatively impact our reputation and, as a consequence, our business.
Delisting could negatively impact us by, among other things, reducing the liquidity and market price of our common stock, reducing the number of investors willing to hold or acquire our common stock, and limiting our ability to issue additional securities or obtain additional financing in the future, and might negatively impact our reputation and, consequently, our business.
Affiliates of our company owned, in the aggregate, a majority of our outstanding shares at December 31, 2022.
Affiliates of our company owned, in the aggregate, a majority of our outstanding shares at December 31, 2023.
Natural disasters could damage our resort and real estate holdings, resulting in substantial repair or replacement costs to the extent not covered by insurance, a reduction in property values, or a loss of revenue, each of which could have a material adverse impact on our business, financial condition and results of operations.
Natural disasters, including wildfires, tsunamis, hurricanes, earthquakes and others, could damage our resort and real estate holdings, resulting in substantial repair or replacement costs to the extent not covered by insurance, a reduction in property values, or a loss of revenue, each of which could have a material adverse impact on our business, financial condition and results of operations.
Our business initiatives for the next twelve months include investing in our operating infrastructure and continued planning and entitlement efforts on our development projects.
Our business initiatives for the next twelve months include investing in our operating infrastructure and continued planning and pre-development efforts on our land development and sales projects.
The Company’s stockholders should carefully consider the risks and uncertainties described below, in addition to the other information contained in or incorporated by reference into this Annual Report, as well as the other information we file with the SEC from time to time.
Our stockholders should carefully consider the risks and uncertainties described below, in addition to the other information contained in or incorporated by reference into this Annual Report, as well as the other information we file with the Securities and Exchange Commission (the “SEC”) from time to time.
The financial performance of our Real Estate segment is dependent upon our success in obtaining land use entitlements for proposed development projects. Obtaining all of the necessary entitlements to develop a parcel of land is often difficult, costly and may take several years, or longer, to complete.
The financial performance of our Land Development and Sales segment is dependent upon our success in obtaining discretionary and ministerial approvals for proposed development projects. Obtaining all the necessary approvals to develop a parcel of land is often difficult, costly and may take several years, or longer, to complete.
Risks Relating to our Stock Our stock price has been subject to significant volatility. In 2022, the low and high share prices of our common stock ranged from $8.27 to $12.36. Our stock price has been, and may continue to be, subject to significant volatility.
Risks Relating to our Stock Our stock price has been subject to significant volatility. During the year ended December 31, 2023, the low and high share prices of our common stock ranged from $8.66 to $16.09. Our stock price has been, and may continue to be, subject to significant volatility.
Because we are located in Hawaii and therefore apart from the mainland United States, our financial results are more sensitive to certain economic factors, such as spending on tourism and increased fuel and travel costs, which may adversely impact and materially affect our business, financial condition and results of operations.
In addition, in the current economic environment, equity real estate investments may be difficult to sell quickly and we may not be able to adjust our portfolio of properties quickly in response to economic or other conditions. 4 Table of Contents Because we are located in Hawai ‘ i and therefore apart from the mainland United States, our financial results are more sensitive to certain economic factors, such as spending on tourism and increased fuel and travel costs, which may adversely impact and materially affect our business, financial condition and results of operations.
Our competitors may be affected differently by such changes in weather conditions or natural disasters depending on the location of their assets or operations. Our insurance coverages may be inadequate to cover any losses we incur. We maintain various insurance coverages for our business.
Our competitors may be affected differently by such changes in weather conditions or natural disasters depending on the location of their assets or operations. The wildfires in August 2023 devasted the town of Lahaina, Maui and negatively impacted tourism to the area and the local economy.
Removed
In addition, in the current economic environment, equity real estate investments may be difficult to sell quickly and we may not be able to adjust our portfolio of properties quickly in response to economic or other conditions.
Added
We expect the aftermath of the wildfires to continue to impact commercial activity throughout the island of Maui, and there is uncertainty as to how long it will take Maui to rebuild, return tourism to historic levels, and recover economically.
Removed
The COVID-19 pandemic, or an outbreak of another highly infectious or contagious disease, could adversely affect our business, financial condition, results of operations and cash flow.
Added
Until such time as commercial activity and tourism return to normal levels, the impact of the wildfires may continue to negatively impact operations. Our insurance coverages may be inadequate to cover any losses we incur. We maintain various insurance coverages for our business.
Removed
The spread of a highly infectious or contagious disease, such as COVID-19 and its variants, has caused and could continue to cause severe disruptions in the U.S. economy, which could in turn disrupt the business, activities, and operations of our customers, as well as our business and operations.
Removed
The COVID-19 pandemic has caused significant disruption in business activity and financial markets both globally and in the United States. Many states and localities have imposed limitations on commercial activity and public gatherings and events, as well as moratoria on evictions.
Removed
Concern regarding the spread of COVID-19 may continue to cause quarantines, business shutdowns, reduction in business activity and financial transactions, increased unemployment, restrictions on travel, reduced tourism to Maui, reduced real estate development activity and overall economic and financial market instability, all of which may result in a decrease in our business, financial condition and results of operations.
Removed
Such conditions are likely to exacerbate many of the risks described elsewhere in this section. Therefore, to the extent that economic activity, travel, real estate development and business conditions are impacted, our business, financial condition, results of operations and cash flows could be materially adversely affected.
Removed
If related government restrictions impact the buyers’ determinations during the respective due diligence periods, the sales of these assets may be adversely impacted.

Item 2. Properties

Properties — owned and leased real estate

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It includes approximately 900 acres within the 3,000-acre Kapalua Resort. Leasing revenue is generated from restaurants, retail outlets, office buildings, warehouses, and other resort activities. The remaining lands consist of former pineapple fields, gulches, undeveloped coastal and forest areas, and our 9,000-acre conservation watershed preserve.
It includes approximately 900 acres of entitled lands within the 3,000-acre Kapalua Resort. Leasing revenue is generated from restaurants, retail outlets, office buildings, warehouses, and other resort activities. The remaining lands consist of former pineapple fields, gulches, undeveloped coastal and forest areas, and our 9,000-acre conservation watershed preserve.
The following is a summary of our landholdings as of December 31, 2022: Acres West Maui 20,700 Upcountry Maui 1,500 Total 22,200 Our West Maui landholdings are comprised of several, largely contiguous parcels that extend from the sea to the top of the second largest mountain on Maui, at an elevation of approximately 5,700 feet.
The following is a summary of the approximate acreage of our landholdings as of December 31, 2023: Acres West Maui 20,800 Upcountry Maui 1,500 Total 22,300 Our West Maui landholdings are comprised of several, largely contiguous parcels that extend from the sea to the top of the second largest mountain on Maui, at an elevation of approximately 5,700 feet.
Commercial, industrial, and agricultural leasing revenue is generated from our Upcountry Maui properties. We have pledged certain of our real estate properties in the Kapalua Resort as security for borrowings under our credit facility. We own our corporate office located in the Kapalua Resort.
These properties generate leasing revenue from commercial, industrial, and agricultural leasing. We have pledged certain of our real estate properties in the Kapalua Resort as security for borrowings under our credit facility. We own our corporate office located in the Kapalua Resort in West Maui.
If the extension is approved, the closing date is expected to be no later than (30) thirty days after the date of the extension approval. Our Upcountry Maui landholdings are situated at elevations between 1,000 and 2,000 feet above sea level on the slopes of Haleakala, a volcanic-formed mountain on the island that rises above 10,000 feet in elevation.
These properties generate leasing revenue from agricultural and industrial leases, management of water systems, sales of potable and non-potable water, and stewardship and conservation grants. Our Upcountry Maui landholdings are situated at elevations between 1,000 and 2,000 feet above sea level on the slopes of Haleakala, a volcanic-formed mountain on the island that rises above 10,000 feet in elevation.
Removed
Leasing revenue from agricultural and industrial leases, management of water systems, and stewardship and conservation grants are received from these properties. In December 2021, we entered into an agreement to sell our Kapalua Central Resort property for $40.0 million.
Removed
On May 13, 2022, terms of the agreement were amended to include a closing condition requiring the Maui Planning Commission to approve a (5) five-year extension of a Special Management Area (“SMA”) permit issued by the County of Maui by April 10, 2023. If the extension is not approved by April 10, 2023, the purchase agreement will terminate.

Item 3. Legal Proceedings

Legal Proceedings — active lawsuits and investigations

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Item 3. LEGAL PROCEEDINGS On December 31, 2018, the State of Hawaii Department of Health (“DOH”) issued a Notice and Finding of Violation and Order (“Order”) for alleged wastewater effluent violations related to our Upcountry Maui wastewater treatment facility. The facility was built in the 1960’s to serve approximately 200 single-family homes developed for workers in our former agricultural operations.
Item 3. LEGAL PROCEEDINGS On December 31, 2018, the State of Hawai‘I Department of Health (“DOH”) issued a Notice and Finding of Violation and Order (“Order”) for alleged wastewater effluent violations related to our Upcountry Maui wastewater treatment facility. The facility was built in the 1960’s to serve approximately 200 single-family homes developed for workers in our former agricultural operations.
The facility is made up of two 1.5-acre wastewater stabilization ponds and surrounding disposal leach fields. The Order includes, among other requirements, payment of a $230,000 administrative penalty and development of a new wastewater treatment plant.
The facility is made up of two 1.5-acre wastewater stabilization ponds and surrounding disposal leach fields. The Order includes, among other requirements, payment of a $230,000 administrative penalty and improvements to the wastewater treatment plant.
We are presently unable to estimate the remaining amount, or range of amounts, of any probable liability, if any, related to the Order and no additional provision has been made in the accompanying financial statements.
We are presently unable to estimate the remaining amount, or range of amounts, of any probable liability, if any, related to the Order and no additional provision has been made in the accompanying financial statements. From time to time, we are a party to various legal proceedings, disputes, and other claims, arising in the ordinary course of business.
From time to time, we are a party to various claims, complaints and other legal actions that have arisen in the normal course of our business activities. We believe the outcome of any of these pending legal proceedings is not likely to have a material adverse effect on our operations, financial position or cash flows.
Although the results of these ordinary course matters cannot be predicted with certainty, we believe the final outcome of these ordinary course legal proceedings will not, individually or in the aggregate, have a material adverse effect on our operations, financial position or cash flows. Item 4. MINE SAFETY DISCLOSURES Not applicable. PART II
Test results from wastewater monitoring indicate effluent concentration amounts within allowable ranges. An administrative hearing date has been scheduled for June 2023. 10 Table of Contents We have accrued approximately $23,000 related to the administrative penalty as of December 31, 2022.
The Company is awaiting comments, feedback and approval from the State of Hawai‘i at the time of filing the Form 10-K. 11 Table of Contents We have accrued approximately $23,000 related to the administrative penalty as of December 31, 2023.
Added
Test results from wastewater monitoring indicate effluent concentration amounts within allowable ranges. A feasibility study was prepared and submitted identifying various technical solutions that could be implemented to resolve the Order. We submitted a plan and proposed solution to resolve the Order. The plan included the installation of an additional pond that will be lined and installed with aerators.
Added
One of the existing ponds will be lined and renovated as necessary and the other pond will be taken offline and used as a backup pond if needed.

Item 6. [Reserved]

Selected Financial Data — reserved (removed by SEC in 2021)

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In 2021, we executed a Fourth Loan Modification Agreement and Second Amended and Restated Credit Agreement (“Agreements”) extending the maturity date of the Credit Facility to December 31, 2025. The Agreements provide revolving or term loan borrowing options. Interest on revolving borrowing is calculated based on the Bank’s prime rate minus 1.125 percentage points.
In 2021, we executed a Fourth Loan Modification Agreement and Second Amended and Restated Credit Agreement (collectively the “Agreements”) extending the maturity date of the Credit Facility to December 31, 2025. The Agreements provide revolving or term loan borrowing options. Interest on revolving borrowing is calculated based on the Bank’s prime rate minus 1.125 percentage points.
A detailed discussion of significant litigation matters and contingencies is contained in Note 8 to our financial statements set forth in Item 8 of this Annual Report. IMPACT OF INFLATION AND CHANGING PRICES Most land holdings we own were acquired from 1911 to 1932 and are carried at cost.
A detailed discussion of significant litigation matters and contingencies is contained in Note 9 to our financial statements set forth in Item 8 of this Annual Report. IMPACT OF INFLATION AND CHANGING PRICES Most land holdings we own were acquired from 1911 to 1932 and are carried at cost.
A detailed discussion of our income taxes is contained in Note 11 to our financial statements set forth in Item 8 of this Annual Report. • Our results of operations could be affected by significant litigation or contingencies adverse to the Company, including, but not limited to, liability claims, environmental matters, and contract terminations.
A detailed discussion of our income taxes is contained in Note 12 to our financial statements set forth in Item 8 of this Annual Report. • Our results of operations could be affected by significant litigation or contingencies adverse to the Company, including, but not limited to, liability claims, environmental matters, and contract terminations.
Our assumptions and estimates could be subject to significant change because of the long-term nature of our development plans and the uncertainty of when or if certain projects will be developed. • Assets are classified as held for sale when management approves and commits to a plan to sell the property; the property is available for immediate sale in its present condition, subject only to terms that are usual and customary; an active program to locate a buyer and other actions required to complete the plan to sell have been initiated; the sale of the property is probable and is expected to be completed within one year; the property is being actively marketed for sale at a price that is reasonable in relation to its current fair value; and actions necessary to complete the plan of sale indicate that it is unlikely that significant changes to the plan will be made or that the plan will be withdrawn.
Our assumptions and estimates could be subject to significant change because of the long-term nature of our development plans and the uncertainty of when or if certain projects will be developed. • Assets are classified as held for sale when (i) management approves and commits to a plan to sell the property; (ii) the property is available for immediate sale in its present condition, subject only to terms that are usual and customary; (iii) an active program to locate a buyer and other actions required to complete the plan to sell have been initiated; (iv) the sale of the property is probable and is expected to be completed within one year; (v) the property is being actively marketed for sale at a price that is reasonable in relation to its current fair value; and actions necessary to complete the plan of sale indicate that it is unlikely that significant changes to the plan will be made or that the plan will be withdrawn.
At the Kapalua Resort, some of the fixed assets were constructed and placed in service in the mid-to-late 1970’s. Depreciation expense would be considerably higher if fixed assets were stated at current replacement cost. OFF-BALANCE SHEET ARRANGEMENTS As of December 31, 2022, we did not have any significant off-balance sheet arrangements, as defined in Item 303(a)(4)(ii) of SEC Regulation S-K.
At the Kapalua Resort, some of the fixed assets were constructed and placed in service in the mid-to-late 1970’s. Depreciation expense would be considerably higher if fixed assets were stated at current replacement cost. OFF-BALANCE SHEET ARRANGEMENTS As of December 31, 2023, we did not have any significant off-balance sheet arrangements, as defined in Item 303(a)(4)(ii) of Regulation S-K.
We were in compliance with the covenants under the Credit Facility at December 31, 2022, Cash Flows Net cash flow provided by our operating activities totaled $6.3 million and $1.4 million for the years ended December 31, 2022 and 2021, respectively.
We were in compliance with the covenants under the Credit Facility at December 31, 2023. Cash Flows Net cash flow provided by (used in) our operating activities totaled ($1.4) million and $6.3 million for the years ended December 31, 2023 and 2022, respectively.
We believe our cash and cash equivalents balances, cash provided from ongoing operating activities, and available borrowings under our revolving credit facility, will provide sufficient liquidity to enable us to meet our working capital requirements, contractual obligations, and timely service our debt obligations for at least the next 12 months and the foreseeable longer term.
We believe our cash and investment balances, cash provided from ongoing operating activities, and available borrowings under our revolving credit facility, will provide sufficient liquidity to enable us to meet our working capital requirements, contractual obligations, and timely service our debt obligations for the next 12 months and the foreseeable longer term.
RESORT AMENITIES Years Ended December 31, 2022 2020 (in thousands) Operating revenues $ 847 $ 940 Operating costs and expenses (1,547 ) (1,355 ) Operating loss $ (700 ) $ (415 ) Our Resort Amenities segment includes the operations of the Kapalua Club, a private, non-equity club providing its members special programs, access and other privileges at certain of the amenities at the Kapalua Resort including a 30,000 square foot full-service spa, a private pool-side dining beach club, and two 18-hole championship golf courses.
RESORT AMENITIES Years Ended December 31, 2023 2022 (in thousands) Operating revenues $ 828 $ 847 Operating costs and expenses (1,532 ) (1,547 ) Operating loss $ (704 ) $ (700 ) Our Resort Amenities segment includes the operations of the Kapalua Club, a private, non-equity club providing its members special programs, access and other privileges at certain of the amenities at the Kapalua Resort including a 30,000 square foot full-service spa and fitness center, a private pool-side dining beach club, and two 18-hole championship golf courses.
The fair value of our investments was $3.0 million at December 31, 2022. We intend to hold our bond investments until maturity. We also had $15.0 million of available credit under a revolving line of credit facility with First Hawaiian Bank (“Credit Facility”) as of December 31, 2022 and 2021, respectively.
We intend to hold our bond investments until maturity. We also had $15.0 million of available credit under a revolving line of credit facility with First Hawaiian Bank (the “Bank”) (the “Credit Facility”) as of December 31, 2023 and 2022, respectively.
Certain rental income is contingent upon the sales of the tenant exceeding a defined threshold and recognized as a percentage of sales after those thresholds are achieved. Percentage rental income was $1.9 million and $1.5 million during the years ended December 31, 2022 and 2021, respectively.
Certain rental income is contingent upon the sales of tenants exceeding a defined threshold and recognized as a percentage of sales after those thresholds are achieved.
Accounts at each institution are insured by the Federal Deposit Insurance Corporation up to $250,000. We rely on the financial strength and stability of these banks and have no reason to believe that our deposits would be unavailable on demand. Our investments consisted of corporate bond securities maturing over various dates through February 2024.
We rely on the financial strength and stability of these banks and have no reason to believe that our deposits would be unavailable on demand. Our investments consisted of corporate bond securities maturing over various dates through June 2025. The fair value of our investments was $3.1 million at December 31, 2023.
The increase in leasing operating costs and expenses for the year ended December 31, 2022, compared to the year ended December 31, 2021, was primarily due to higher property maintenance costs for our commercial leasing portfolio properties. Our leasing operations face substantial competition from other property owners in Maui and Hawaii.
The increase in leasing operating costs and expenses for the year ended December 31, 2023, compared to the year ended December 31, 2022, was primarily due to higher property maintenance costs for our commercial leasing portfolio properties and the hiring of a property management and leasing firm to grow our leasing portfolio and the associated start-up costs and fees.
The increase in our consolidated operating income for the year ended December 31, 2022 compared to year ended December 31, 2021 was primarily attributed to the sales of real estate inventory during the year. In June 2022, we sold approximately 50 acres in West Maui to the County of Maui for development of a regional park.
The decrease in our consolidated operating income for the year ended December 31, 2023 compared to year ended December 31, 2022 was attributed to decreased sales of real estate inventory during the year.
PENSION EXPENSE In November 2022 and 2021, the Company signed purchase agreements with insurers to annuitize the scheduled pension payments of certain plan participants. Approximately $14.5 million and $10.5 million were disbursed from plan assets for the group annuity contracts in 2022 and 2021, respectively.
An estimated settlement charge (GAAP expense) between $7.0 million to $8.0 million will be recognized at the time of final annuitization and plan termination. In November 2022, we signed a purchase agreement with an insurer to annuitize the scheduled pension payments of certain plan participants. Approximately $14.5 million were disbursed from plan assets for the group annuity contract.
The disposal of an individual property generally will not represent a strategic shift and, therefore, will typically not meet the criteria for classification as discontinued operations. • Determining pension expense and obligations for our defined benefit pension plan utilizes actuarial estimates of participants’ age at retirement, life span, the long-term rate of return on investments and other factors.
Real estate assets that would be considered for sale are remnant parcels that are not part of existing strategic development plans and projects. • Determining pension expense and obligations for our defined benefit pension plan utilizes actuarial estimates of participants’ age at retirement, life span, the long-term rate of return on investments and other factors.
The Company received net proceeds of approximately $4.2 million upon closing of the sale in May 2021. LIQUIDITY AND CAPITAL RESOURCES Liquidity We had cash on hand of $8.5 million and $5.6 million at December 31, 2022 and 2021, respectively. We hold deposit accounts with several local banks in Hawaii.
LIQUIDITY AND CAPITAL RESOURCES We had cash on hand of $5.7 million and $8.5 million at December 31, 2023 and 2022, respectively. We hold deposit accounts with several local banks in Hawai‘i. Accounts at each institution are insured by the Federal Deposit Insurance Corporation up to $250,000.
A detailed discussion of our defined benefit pension plans is contained in Note 6 to our financial statements set forth in Item 8 of this Annual Report. 15 Table of Contents • Management calculates the income tax provision, current and deferred income taxes, and tax credits along with the valuation allowance based upon various complex estimates and interpretations of income tax laws and regulations.
A detailed discussion of our defined benefit pension plans is contained in Note 7 to our financial statements set forth in Item 8 of this Annual Report. 17 Table of Contents • Stock options were issued to the Chairman of the Board and the Board of Directors.
If any impairment is considered other-than-temporary, the security is written down to its fair value and a corresponding loss recorded as a component of other income (expense). • Sales of real estate assets that are considered central to our ongoing major operations are classified as real estate sales revenue, along with any associated cost of sales, in our consolidated statements of operations and comprehensive income.
There were no accrued interest receivable on held-to-maturity debt securities at December 31, 2023. • Sales of real estate assets that are considered central to our ongoing major operations are classified as real estate sales revenue, along with any associated cost of sales, in our consolidated statements of operations and comprehensive income.
Results for one period are therefore not necessarily indicative of future performance trends in this business segment. 12 Table of Contents LEASING Years Ended December 31, 2022 2021 (in thousands) Operating revenues $ 8,513 $ 8,103 Operating costs and expenses (3,598 ) (3,495 ) Operating income $ 4,915 $ 4,608 Operating revenues from leasing activities for the year ended December 31, 2022, were comprised of $6.5 million from commercial, industrial, and agricultural leases, $1.0 million of licensing fees from our registered trademarks and trade names, and $1.0 million from potable and non-potable water system sales compared to $6.2 million from commercial, industrial, and agricultural leases, $0.7 million of licensing fees from our registered trademarks and trade names, and $1.2 million from potable and non-potable water system sales for the year ended December 31, 2021.
While the provision of land to generate primary housing and additional jobs was a priority of ours prior to the wildfires, the loss of over 2,000 homes and over 3,000 jobs in the Lahaina wildfire have accelerated our efforts to get land into productive use to meet these critical needs. 14 Table of Contents LEASING Years Ended December 31, 2023 2022 (in thousands) Operating revenues $ 8,461 $ 8,513 Operating costs and expenses (4,420 ) (3,598 ) Operating income $ 4,041 $ 4,915 Operating revenues from leasing activities for the year ended December 31, 2023, were comprised of $5.9 million from commercial, industrial, and agricultural leases, $0.8 million of licensing fees from our registered trademarks and trade names, $ 1.5 million from potable and non-potable water system sales and $0.3 million in grant revenue from the State of Hawai‘i for conservation management of our Pu‘u Kukui Watershed, compared to $6.1 million from commercial, industrial, and agricultural leases, $1.0 million of licensing fees from our registered trademarks and trade names, $1.0 million from potable and non-potable water system sales and $0.4 million for grant revenues from the State of Hawai‘i for conservation management for the year ended December 31, 2022.
The sale included the fee simple interest of the 1.1-acre parcel as well as buildings and improvements located on the property. There were no significant real estate development expenditures during the years ended December 31, 2022 and 2021, respectively. Real estate development and sales are cyclical and depend on several factors.
There were no significant real estate development expenditures during the years ended December 31, 2023 and 2022, respectively. Real estate development and sales are cyclical and depend on several factors. Results for one period are therefore not necessarily indicative of future performance trends in this business segment.
The decrease in operating revenues for year ended December 31, 2022, compared to the year ended December 31, 2021, was due to lower membership levels of the Kapalua Club.
The decrease in operating revenues for year ended December 31, 2023, compared to the year ended December 31, 2022, was due to the refunds of membership fees during a two-month period following the Maui wildfires on August 8, 2023 as Club operations were temporarily closed.
Settlement charges of $7.5 million and $4.3 million were recognized in pension expense for the years ended December 31, 2022 and 2021, respectively, as a result of the annuity purchases. 13 Table of Contents INTEREST EXPENSE There were no outstanding borrowings on our credit facility with a bank at December 31, 2022 and 2021.
The impact of forfeitures that may occur prior to vesting is estimated and considered in the expense recognized. INTEREST EXPENSE There were no outstanding borrowings on our credit facility with a bank at December 31, 2023 and 2022. On December 31, 2023 and 2022, interest rates on our credit facility were 7.38% and 6.38%, respectively.
MANAGEMENT ’ S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS The following discussion and analysis should be read in conjunction with the forward-looking statements disclaimer set forth at the beginning of this Annual Report, the risk factors set forth in Item 1A of this Annual Report, and our financial statements and the notes to those statements set forth in Item 8 of this Annual Report. 11 Table of Contents RESULTS OF OPERATIONS Comparison of Years Ended December 31, 2022 and 2021 CONSOLIDATED Years Ended December 31, 2022 2021 (in thousands except share amounts) Operating revenues $ 20,960 $ 12,443 Segment operating costs and expenses (6,171 ) (5,600 ) General and administrative (2,795 ) (2,569 ) Share-based compensation (1,278 ) (1,449 ) Depreciation (1,109 ) (1,188 ) Operating income 9,607 1,637 Other income 71 13 Pension and other postretirement expenses (7,885 ) (4,732 ) Interest expense (6 ) (122 ) Income (Loss) from continuing operations 1,787 (3,204 ) Loss from discontinued operations - (216 ) Net Income (Loss) $ 1,787 $ (3,420 ) Income (loss) from continuing operations per Common Share $ 0.09 $ (0.17 ) Loss from discontinuing operations per Common Share $ - $ (0.01 ) Net income (loss) per Common Share $ 0.09 $ (0.18 ) REAL ESTATE Years Ended December 31, 2022 2021 (in thousands) Operating revenues $ 11,600 $ 3,400 Operating costs and expenses (1,026 ) (750 ) Operating income $ 10,574 $ 2,650 Real estate operating revenues include the sales of our real estate inventory.
All 10,350 acres of land in perpetual conservation are along the West Maui coastline, including the largest private nature preserve in Hawai‘i where the focus is to ensure rainfall capture in the pristine native forest to replenish the aquifers. 13 Table of Contents RESULTS OF OPERATIONS Comparison of Years Ended December 31, 2023 and 2022 CONSOLIDATED Years Ended December 31, 2023 2022 (in thousands except share amounts) Operating revenues $ 10,915 $ 20,960 Segment operating costs and expenses (6,547 ) (6,171 ) General and administrative (3,998 ) (2,795 ) Share-based compensation (2,846 ) (1,278 ) Depreciation (869 ) (1,109 ) Operating income (3,345 ) 9,607 Other income 707 71 Pension and other postretirement expenses (436 ) (7,885 ) Interest expense (6 ) (6 ) Net Income (Loss) $ (3,080 ) $ 1,787 Net income (loss) per Common Share $ (0.15 ) $ 0.09 LAND DEVELOPMENT AND SALES Years Ended December 31, 2023 2022 (in thousands) Operating revenues $ 1,626 $ 11,600 Operating costs and expenses (595 ) (1,026 ) Operating income $ 1,031 $ 10,574 Real estate operating revenues include the sales of our real estate inventory.
Net proceeds from sales of real estate were approximately $11.2 million and $2.7 million for the years ended December 31, 2022 and 2021, respectively. Voluntary contributions of $5.7 million and $1.0 million were made to our defined benefit pension plan during the years ended December 31, 2022 and 2021, respectively.
Minimum funding contributions to our defined benefit pension plan were not required during the year ended December 31, 2023. A voluntary contribution of $5.7 million was made during the year ended December 31, 2022. No minimum funding contributions are required in 2024.
If the extension is approved, the closing date is expected to be no later than (30) thirty days after the date of the extension approval. 14 Table of Contents Our business initiatives include investing in our operating infrastructure and continued planning and entitlement efforts on our development projects.
Land development costs to be capitalized are budgeted at $0.9 million, maintenance and capital expenditures on the Company’s operating assets are budgeted at $1.3 million and capital expenditures to the Company’s water assets and infrastructure is budgeted at $3.4 million in 2024. 16 Table of Contents Our business initiatives include investing in our operating infrastructure and continued planning and entitlement efforts on our development projects.
Removed
Net proceeds of $1.9 million were collected upon closing. In February 2022, we entered into an agreement to sell a 646-acre parcel of agricultural land in Upcountry Maui. Terms of the agreement, as amended, included a purchase price of $9.6 million, a diligence period of three months, and other customary closing conditions.
Added
Item 6. [RESERVED] Item 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS The following discussion and analysis of our Annual Report on Form 10-K and audited consolidated financial statements and related notes are for the year ended December 31, 2023. The following discussion contains forward-looking statements that involve risks and uncertainties.
Removed
Net proceeds of $9.2 million were collected upon closing in May 2022. In December 2021, we sold to the County of Maui the fee simple interest in a 1.065-acre property in West Maui, otherwise known as Lot B-1 of the Gorilla Foundation Subdivision, for $0.1 million.
Added
Our actual results could differ materially from those expressed or implied by the forward-looking statements below.
Removed
In November 2021, we received twelve residential workforce housing credits valued at $0.6 million pursuant to Maui County Code Section 2.96.050 from the buyer of a 5.27-acre parcel located in Kapalua Resort, also known as Site 6-0.
Added
Factors that could cause or contribute to those differences in our actual results include, but are not limited to, those discussed below and those discussed elsewhere within this Annual Report, particularly in the section entitled “ Cautionary Note Regarding Forward-Looking Statements. ” Depending upon the context, the terms the “Company,” “we,” “our,” and “us,” refer to either Maui Land & Pineapple Company, Inc. alone, or to Maui Land & Pineapple Company, Inc. and its subsidiaries collectively.
Removed
As a condition of the sale in 2016, the buyer of the parcel was required to transfer these credits within five years of closing. In June 2021, we sold and granted to a conservation organization a perpetual, non-exclusive conservation easement consisting of approximately 791 acres of unimproved land in Honolua Valley for $0.9 million.
Added
Overview Maui Land & Pineapple Company, Inc. is a Delaware corporation and the successor to a business organized in 1909 as a Hawai‘i corporation. The Company reincorporated from Hawai‘i to Delaware pursuant to a plan of conversion completed on July 18, 2022.
Removed
This easement permits the buyer right of entry to perform improvements to the property and enhance its conservation and preservation efforts in the area. In May 2021, we sold the property commonly known as the Steeple House located in the Kapalua Resort for $1.8 million.
Added
Total authorized capital stock of the Company includes 48,000,000 shares, consisting of 43,000,000 shares of common stock, par value $0.0001 per share, and 5,000,000 shares of preferred stock, par value $0.0001 per share.
Removed
The elimination of COVID-19 related travel restrictions and social distancing measures resulted in increased visitor traffic to the island of Maui. Income recognized from our commercial leasing portfolio was correspondingly higher for the year ended December 31, 2022 compared to the year ended December 31, 2021, specifically higher percentage rental income.
Added
Shares of the Company’s common stock are listed on the New York Stock Exchange (“NYSE”) under the ticker symbol “MLP.” We are a legacy company on Maui, energized by global best practices and local values.
Removed
Contracted fee expenses correspondingly increased for the year ended December 31, 2022, compared to the year ended December 31, 2021, primarily due to higher contracted golf course fees charged to the Company. Member dues may be affected in future periods depending on the impact of COVID-19 on public health measures and travel regulations.
Added
The Company owns and stewards approximately 22,300 acres of land on the island of Maui, Hawai‘i along with approximately 268,000 square feet of commercial real estate. Our focus is activating our assets to their most productive use with a mission to meet critical needs and preserve a sense of place for future generations.
Removed
OTHER INCOME We earned approximately $67,000 of investment income from our interest-bearing cash and investment accounts established in October 2022. In March 2021, we received a final closing distribution of $13,000 from our 51% ownership interest in Kapalua Bay Holdings, LLC (“KBH”). The investment was previously written down to zero in 2009.
Added
We have identified critical needs as increasing housing inventory, job creation, water and food security, and renewed connection to people, place, and culture. A leadership transition began in April 2023 with the addition of a CEO and Board Chair, both experienced in real estate planning, development, and asset management.
Removed
Interest expense for the years ended December 31, 2022 and 2021 were zero and $0.1 million, respectively. On December 31, 2022 and 2021, interest rates on our credit facility were 6.38% and 2.12%, respectively. DISCONTINUED OPERATIONS In December 2019, we entered into an Asset Purchase Agreement (“Agreement”) to sell the assets of Kapalua Water Company, Ltd.
Added
Between April and December, the transition continued with the addition of three team members with planning, community development, and land management experience. In this new chapter for Maui Land & Pineapple Company, we will build capable, multi-disciplinary team of internal experts and external partners to become a considerate thought-leader who can turn vision into reality.
Removed
(“KWC”) and Kapalua Waste Treatment Company, Ltd. (“KWT”) located in the Kapalua Resort subject to certain closing conditions, including completion of due diligence and approval by the State of Hawaii Public Utilities Commission (“PUC”). In March 2021, the sale was approved by the PUC subject to certain closing conditions of its Decision and Order.
Added
We aim to build trust and deepen relationships through ongoing engagement with stakeholders, community, and other partners. This will enable us to implement scalable, disciplined business processes via a lean team to thoughtfully manage a growing pipeline of projects.
Removed
A minimum funding contribution of $0.6 million was also made in January 2021. No minimum funding contributions are required in 2023. In October 2022, we invested $3.0 million of our increased cash balance from operating cash flows in shorter term bond securities. These bond investments yielded approximately 4.98% in aggregate at December 31, 2022.
Added
As an initial step by the new leadership team, we have audited our assets under management and available for lease and development.
Removed
Future Cash Inflows and Outflows In December 2021, we entered into an agreement to sell the Kapalua Central Resort property for $40.0 million.
Added
The initial results of this review identified opportunities to increase the level of utilization, occupancy, and stabilized income from our operating assets. 12 Table of Contents As of December 31, 2023, our commercial properties and land were occupied at the following levels: Asset Management Summary (a non-GAAP financial measurement) Total Leased Vacant Commercial Real Estate (CRE) (square feet) Sq. ft.
Removed
On May 13, 2022, terms of the agreement were amended to include a closing condition requiring the Maui Planning Commission to approve a (5) five-year extension of a Special Management Area (“SMA”) permit issued by the County of Maui by April 10, 2023. If the extension is not approved by April 10, 2023, the purchase agreement will terminate.
Added
Percent Industrial 188,171 133,562 71 % 54,609 29 % Office 10,105 6,127 61 % 3,978 39 % Retail 62,134 56,783 91 % 5,351 9 % Residential 7,339 3,000 41 % 4,339 59 % Total CRE 267,749 199,472 74 % 68,277 26 % Total Leased Vacant Land (acres) Acres Percent Acres Percent Comm./Ind. 22 22 100 % - 0 % Residential/Mixed Use 933 12 1 % 921 99 % Agriculture 10,981 3,596 33 % 7,385 67 % Conservation 10,350 - 0 % 10,350 100 % Total Land 22,286 3,630 16 % 18,656 84 % To improve the stable operating revenue from our commercial real estate, we have updated tenanting plans for our properties, with a focus on placemaking in our town centers.
Added
Among other things, the plans include tenant improvements designed to improve occupancy and reposition spaces and land with tenancies at market rents. As these plans are implemented, we expect the occupancy of our existing land and commercial real estate portfolio to increase. Our commercial real estate is located in three areas surrounded by our landholdings.
Added
Kapalua Village Center is a mixed-use, luxury coastal property offering spaces that foster convenience, well-being, adventure, and culture in the core of Kapalua Resort. Hali‘imaile Town Center is adjacent to Makawao Town and houses an eclectic collection of local businesses, art galleries, and makers spaces, mixed with a renowned Hawai‘i Regional Cuisine restaurant and a Maui distillery.
Added
Lastly, the ‘Alaeloa Business Center is where agriculture meets adventure in the former pineapple base yard whose tenants primarily steward land and natural resources in West Maui.
Added
To establish and execute our land utilization strategies, we intend to make investments in our internal and external teams to ensure we have the capabilities, market research, planning, engineering, and other consultant services necessary.
Added
Our primary goal is to establish executable strategies for the conversion of land from current uses to meet the long-term needs of the community, including the provision of land for agriculture and housing in a supply-constrained market. We also intend to identify non-strategic lands for sale and strategic land developments to advance to completion.
Added
Our landholdings include residential, agricultural and conservation areas. Residential parcels include 83 acres within Kapalua Resort area, zoned for higher density, mixed-use, allowing more than 700 residential units, hospitality, and commercial uses. Also included in Kapalua Resort are 800 acres zoned for lower density residential use of approximately 650 homes.
Added
Agriculturally zoned parcels total 9,500 acres sitting on the slopes of West Maui, with another 1,400 acres sitting on the slopes of Upcountry Maui.
Added
In December 2023, we contributed approximately 30 acres of land in Upcounty Maui, valued at $1.6 million to BRE2 LLC, a joint venture between the Company and Stone Properties for development and sales of ranch lots.
Added
There were no proceeds from the transaction as the land was an equity contribution to the joint venture and was recognized as real estate operating revenues. We anticipate sales of the ranch lots to be approximately $4.1 million, and with approximately $2.2 million being our share of sales proceeds, which we expect to occur in late 2024 to mid-2025.
Added
In August 2023, we received a return of restricted cash, in the amount of $20,000 that was held in escrow as part of a parcel sale transaction that did not close and was terminated in April 2023. The return of the $20,000 cash was included in operating revenues.
Added
Prior to the Maui wildfires which occurred on August 8, 2023, there was a shortage of primary housing supply on Maui.
Added
As the COVID-19 pandemic waned, visitor traffic to Maui was increasing and these percentage rents, leasing revenues in general and land licensing from adventure tourism tenants were returning to pre-pandemic levels until August 8, 2023, the date of the devastating Maui wildfires.
Added
The wildfires directly and critically impacted West Maui and took its toll on percentage rents and licensing revenues for tourism based tenants. Income recognized from percentage rents and land licensing in 2023 amounted to $2.2 million as compared to $2.9 million in 2022, a decrease of $0.7 million as a direct impact of the wildfires.
Added
Tourist traffic has started increasing again post wildfire, and as a result, it is anticipated that percentage rents will return to pre-wildfire levels in 2024 to 2025.
Added
Our leasing operations face substantial competition from other property owners in Maui and Hawai‘i.
Added
Contracted fee expenses increased for the year ended December 31, 2023, compared to the year ended December 31, 2022. However, with the closing of Club amenities as described above, the amenity fees were also suspended, resulting in a net decrease of operating costs in 2023 as compared to 2022.
Added
The Club has undergone restructuring in 2023 and revised policies and practices have been implemented to reduce the impact of the amenity fees and to better match club dues with club expenses. The Club has begun accepting new membership applications beginning late 2023.
Added
OTHER INCOME Investment income of approximately $0.5 million and $0.1 million was earned from our money market and bond investment portfolio during the years ended December 31, 2023 and 2022, respectively In July 2023, we received $0.2 million of cash collateral returned from an owner-controlled insurance program of our partnership interest in Kapalua Bay Holdings, LLC (“KBH”).
Added
The investment was previously written down to zero in 2009. PENSION EXPENSE The termination notification of the Qualified Plan originally made on August 31, 2023, was amended to November 30, 2023.
Added
The change in timing provides for the Company to do lump sum payments, the total to be determined by participant election, in the third or fourth quarters of 2024 and final annuitization of plan participants to take place in the first or second quarters of 2025.
Added
A settlement charge of $7.5 million was recognized in pension expense for the year ended December 31, 2022 as a result of the annuity purchase. 15 Table of Contents SHARE-BASED COMPENSATION PLANS The Company accounts for share-based compensation, including grants of restricted shares of common stock and options to purchase common shares, as compensation expense over the respective vesting periods in the consolidated financial statements based on their fair values on the grant dates.
Added
Interest income from our investment portfolio was $0.5 million and $0.1 million during the years ended December 31, 2023 and 2022, respectively. Our bond investments yielded approximately 5.7% and 5.0% in aggregate at December 31, 2023 and 2022, respectively.
Added
Future Cash Inflows and Outflows The Company entered into a joint venture, BRE2 LLC with Stone Properties, a Hawai‘i based LLC to develop and sell ranch lots in Hali‘imaile, Hawai‘i. We anticipate sales of the ranch lots to be $4.1 million and $2.2 million being our share of sales proceeds which will occur in late 2024 to mid 2025.
Added
If any impairment is considered other-than-temporary, the security is written down to its fair value and a corresponding loss recorded as a component of other income (expense). Management measures expected credit losses on held-to-maturity debt securities on a collective basis by major type.
Added
If there are anticipated credit losses a reserve for credit losses will be established and held to debt maturities will be presented net of the allowance.
Added
The disposal of an individual property generally will not represent a strategic shift and, therefore, will typically not meet the criteria for classification as discontinued operations.
Added
With the option issuances, management engages with a certified valuation company to perform the valuation analysis and calculations based on option terms, number of shares issued, issuance share price, volatility, risk and historical trends with the options issuances.
Added
The valuation expense is reviewed and approved by the Company’s Audit Committee and valuation expenses are recognized over the duration of the exercisable period of the issuances. • Management calculates the income tax provision, current and deferred income taxes, and tax credits along with the valuation allowance based upon various complex estimates and interpretations of income tax laws and regulations.

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

1 edited+0 added−0 removed0 unchanged
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations 11 Item 7A. Quantitative and Qualitative Disclosures About Market Risk 16 Item 8. Financial Statements and Supplementary Data 17 Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure 37 Item 9A. Controls and Procedures 37
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations 12 Item 7A. Quantitative and Qualitative Disclosures About Market Risk 18 Item 8. Financial Statements and Supplementary Data 19 Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure 39 Item 9A. Controls and Procedures 39

Other MLP 10-K year-over-year comparisons