Maui Land & Pineapple Company, Inc. Annual Report 2009

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FY2009 Annual Report · Maui Land & Pineapple Company, Inc.

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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-K

(Mark One)

(cid:1) ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES

EXCHANGE ACT OF 1934

For the fiscal year ended December 31, 2009

(cid:2)

OR
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES
EXCHANGE ACT OF 1934

For the transition period from

Commission file number 1-6510
MAUI LAND & PINEAPPLE COMPANY, INC.
(Exact name of registrant as specified in its charter)

HAWAII
(State or other jurisdiction
of incorporation or organization)

870 HALIIMAILE ROAD,
MAKAWAO, MAUI, HAWAII
(Address of principal executive offices)

99-0107542
(IRS Employer
Identification number)

96768-9768
(Zip Code)

Registrant’s telephone number, including area code (808) 877-3351

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

Title of Each Class

Name of Each Exchange on Which Registered

Common Stock, without Par Value

New York Stock Exchange

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities

Act. Yes (cid:2) No (cid:1)

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the

Act. Yes (cid:2) No (cid:1)

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

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any,

every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this
chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such
files). Yes (cid:2) No (cid:2)

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein,
and will not be contained, to the best of registrant’s knowledge, in definitive proxy or information statements incorporated by
reference in Part III of this Form 10-K or any amendment to this Form 10-K. (cid:1)

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or

a smaller reporting company. See the definitions of ‘‘large accelerated filer,’’ accelerated filer’’ and ‘‘smaller reporting
company’’ in Rule 12b-2 of the Exchange Act. (Check one):
Large accelerated filer (cid:2)

Accelerated filer (cid:2)

Smaller reporting company (cid:1)

Non-accelerated filer (cid:2)
(Do not check if a
smaller reporting company)

Indicate by check mark whether the registrant is a shell Company (as defined in Rule 12b-2 of the Exchange

Act). Yes (cid:2) No (cid:1)

The aggregate market value, as of June 30, 2009, of the voting stock held by non-affiliates of the registrant was
$32,081,000 based upon the closing price on the New York Stock Exchange on such date. This computation assumes that all
directors, executive officers and persons known to the Company to be the beneficial owners of more than ten percent of the
Company’s common stock are affiliates. Such assumption should not be deemed conclusive for any other purpose.

At March 1, 2010, the number of shares outstanding of the registrant’s common stock was 8,518,033.

Part III—Certain portions of the proxy statement for the registrant’s annual meeting of stockholders to be held on
May 13, 2010, to be filed no later than 120 days after the close of the registrant’s fiscal year ended December 31, 2009, are
incorporated by reference into Part III of this report. Only those portions of the proxy statement that are specifically
incorporated by reference herein shall constitute a part of this annual report.

Documents incorporated by reference:

FORWARD-LOOKING STATEMENTS AND RISKS

This and other reports filed by Maui Land & Pineapple Company, Inc. with the Securities and
Exchange Commission contain forward-looking statements intended to qualify for the safe harbor from
liability established by the Private Securities Litigation Reform Act of 1995. These statements relate to
future events or our future financial performance and involve known and unknown risks, uncertainties
and other factors that may cause our actual results, levels of activity, performance or achievements to
differ materially from any future results, levels of activity, performance or achievements expressed or
implied by these forward-looking statements. These statements can be identified by the fact that they
do not relate strictly to historical or current facts. They contain words such as ‘‘may,’’ ‘‘will,’’ ‘‘project,’’
‘‘might,’’ ‘‘expect,’’ ‘‘believe,’’ ‘‘anticipate,’’ ‘‘intend,’’ ‘‘could,’’ ‘‘would,’’ ‘‘estimate,’’ ‘‘continue,’’ or
‘‘pursue,’’ or the negative or other variations thereof or comparable terminology. Actual results could
differ materially from those projected in forward-looking statements as a result of the following factors,
among others:

(cid:127) our ability to comply with the terms of our indebtedness, including the financial covenants set

forth therein;

(cid:127) general economic factors, including the current economic recession, tightening credit markets,
declining demand for real estate, declining expenditures within the tourism industry on Maui,
and increased fuel and travel costs;

(cid:127) the satisfaction of certain closing conditions set forth in the amended construction loan

agreement and certain related agreements relating to the construction of the Residences at
Kapalua Bay project;

(cid:127) the ability and willingness of our lenders to comply with the terms of their lending agreements

with us;

(cid:127) increased fuel and travel costs, and reductions in airline passenger capacity to Maui;

(cid:127) dependence on third parties and actual or potential lack of control over joint venture

relationships;

(cid:127) recoverability from operations of real estate development deferred costs;

(cid:127) timing of approvals and conditions of future real estate entitlement applications;

(cid:127) impact of current and future local, state and national government regulations, including Maui

County affordable housing legislation;

(cid:127) future cost of compliance with environmental laws;

(cid:127) effects of weather conditions and natural disasters;

(cid:127) our ability to maintain the listing of our common stock on the New York Stock Exchange;

(cid:127) availability of capital on terms favorable to us, or at all;

(cid:127) our ability to raise capital through the sale of selected real property assets; and

(cid:127) our ability to refinance or reduce our indebtedness.

Such risks and uncertainties also include those risks and uncertainties discussed under the headings

‘‘Business,’’ ‘‘Risk Factors,’’ and ‘‘Management’s Discussion and Analysis of Financial Condition and
Results of Operations’’ in this annual report, as well as other factors described from time to time in
our reports filed with the Securities and Exchange Commission. Because the factors referred to above
could cause actual results or outcomes to differ materially from those expressed in any forward-looking
statements made by us or on our behalf, you should not place undue reliance on any forward-looking

statements. New factors emerge from time to time, and it is not possible for us to predict which factors
will arise. In addition, we cannot assess the impact of each factor on our business or the extent to
which any factor, or combination of factors, may cause actual results to differ materially from those
contained in any forward-looking statements. Further, any forward-looking statement speaks only as of
the date on which it is made, and, except as required by law, we undertake no obligation to publicly
revise our forward-looking statements to reflect events or circumstances that arise after the date of this
annual report or the date of documents incorporated by reference in this annual report that include
forward-looking statements. You should read this annual report and the documents that we reference
and have filed as exhibits to this annual report with the understanding that we cannot guarantee future
results, levels of activity, performance or achievements.

TABLE OF CONTENTS

PART I

Business . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Item 1.
Item 1A. Risk Factors . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Item 1B. Unresolved Staff Comments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Properties . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Item 2.
Legal Proceedings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Item 3.

1
8
15
16
17

PART II

Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer

Purchases of Equity Securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Item 7. Management’s Discussion and Analysis of Financial Condition and Results of

Item 8.
Item 9.

Operations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Financial Statements and Supplementary Data . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Changes in and Disagreements with Accountants on Accounting and Financial

Disclosure . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Item 9A. Controls and Procedures . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

PART III

Item 10. Directors, Executive Officers and Corporate Governance . . . . . . . . . . . . . . . . . . . . . . .
Item 11. Executive Compensation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Item 12. Security Ownership of Certain Beneficial Owners and Management and Related

Stockholder Matters . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Item 13. Certain Relationships and Related Transactions, and Director Independence . . . . . . . . .
Item 14. Principal Accountant Fees and Services . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

PART IV

Item 15. Exhibits and Financial Statement Schedule . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

SIGNATURES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

18
34

70
70

71
71

72
72
72

iii

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Item 1. BUSINESS

Overview

PART I

Maui Land & Pineapple Company, Inc. is a Hawaii corporation, the successor to a business
organized in 1909. The Company consists of a landholding and operating parent company and its
principal subsidiaries, including Maui Pineapple Company, Ltd. (MPC) and Kapalua Land
Company, Ltd. 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.

We have three operating segments as follows:

(cid:127) Community Development. The Community Development segment includes our real estate

entitlement, development, construction, sales and leasing activities. This segment also includes
the operations of Kapalua Realty Company, a general brokerage real estate company located
within Kapalua Resort and our Public Utilities Commission-regulated water and sewage
transmission operations. The Community Development segment includes our 51% equity interest
in Kapalua Bay Holdings, LLC (‘‘Bay Holdings’’) (Note 4 to consolidated financial statements).

(cid:127) Resort. The Resort segment includes our ongoing operations at the Kapalua Resort. These

operations currently include two championship golf courses, a tennis facility, the Kapalua Spa,
which opened in July 2009, and several retail outlets. Prior to mid-December 2009, the Resort
operations also included a vacation rental program (The Kapalua Villas) and Kapalua
Adventures, which is comprised of zip-lines stretching over scenic ravines in the West Maui
mountains, a high ropes challenge course, a climbing wall and other activities. In December
2009, we entered into agreements to transfer the operations of The Kapalua Villas and the
Kapalua Adventures operations to third parties.

(cid:127) Agriculture. On November 2, 2009, our Board of Directors approved the cessation of our

pineapple agriculture operations by December 31, 2009. The Agriculture segment primarily
included growing, packing, and marketing of fresh pineapple. Our pineapple was sold under the
brand names Maui Gold(cid:3) and Hawaiian GoldTM. We also grew and marketed fresh organic
pineapple. A portion of our business included processing (canning) pineapple; however, we
ceased substantially all canning and processing of solid-pack product in June 2007. In December
2009, we entered into agreements with an unrelated, closely held company that began to grow
and market Maui Gold(cid:3) pineapple as of January 1, 2010. We have accounted for our Agriculture
segment as discontinued operations in this annual report on Form 10-K.

For additional financial information about these segments, see Segment Information, Note 15 to

our consolidated financial statements.

2009 Business Developments

In 2009, we incurred a net loss of $123.3 million and had negative cash flows from operations of

$15.9 million. Efforts to increase liquidity and to stabilize the Company for future opportunities
consumed much of our management time in 2009.

The following is a summary of other material business developments in 2009. For more discussion
about business developments in 2009, see Item 7, ‘‘Management’s Discussion and Analysis of Financial
Condition and Results of Operations,’’ in this annual report on Form 10-K.

Plantation Golf Course.

In March, we completed the $50 million sale and leaseback transaction of
the Plantation Golf Course and applied $45 million of the sales proceeds to partially repay outstanding

borrowings that were partially collateralized by the golf course. Note 8 to consolidated financial
statements.

Management Changes.

In May, our Board of Directors appointed Warren H. Haruki to serve as

Interim Chief Executive Officer in addition to his position as Executive Chairman after Robert I.
Webber resigned from his positions as our President and Chief Executive Officer. In April, John P.
Durkin was hired to serve as Chief Financial Officer. In February 2010, our Board of Directors
appointed Ryan L. Churchill to serve as our President and Chief Operating Officer.

Kapalua Bay Holdings, LLC (‘‘Bay Holdings’’).

In June, construction of the Residences at Kapalua

Bay project was substantially completed and Bay Holdings closed escrow on 20 whole-ownership units
and 88 fractional-ownership units in 2009. In September, Bay Holdings recorded a $208.8 million
charge representing an impairment of the value of the Residences at Kapalua Bay project. We recorded
losses from this joint venture of $47.2 million in 2009 and stopped recording our share of Bay
Holdings’ losses after our investment balance and other amounts advanced to Bay Holdings were
reduced to zero, and the estimated remaining obligations to the joint venture were accrued.
Construction work has been completed as of the end of 2009. Note 4 to consolidated financial
statements.

Real Estate Sales.

In September, we sold 125 acres that comprised a portion of our Kapalua

Mauka project for $10.0 million. We also sold another property in 2009 totaling approximately 13 acres
and our final lot in the Honolua Ridge Phase II subdivision that resulted in cash proceeds of
approximately $1.9 million. In addition, we sold two other non-inventory real properties in 2009 that
resulted in cash proceeds of approximately $2.8 million.

Revolving Credit Agreements.

In October, our revolving credit agreement with Wells Fargo Bank

was increased from $45 million to $50 million and the maturity date for this facility and our $25 million
revolving credit were extended from March 2010 to March 2011. Note 5 to consolidated financial
statements.

Agriculture Segment.

In November, our Board of Directors approved the immediate cessation of

pineapple planting and the closure of all agriculture operations by year-end. On December 31, 2009, we
entered into agreements with Haliimaile Pineapple Company, Limited (HPC), a closely held
corporation. The agreements provided for HPC to harvest the fruit in the ground and to begin growing
and marketing Maui Gold(cid:3) pineapple. HPC hired 66 of the 206 MPC employees whose employment
with us ceased as of year-end 2009. Note 7 to consolidated financial statements.

Resort Operations.

In December, we entered into agreements with third parties to operate and

manage The Kapalua Villas and the Kapalua Adventures operations. The agreements principally license
the operators to use our trade names and trademarks for the respective operations, and lease the
operating assets of the operations and commercial space within the Kapalua Resort to the new
operators.

Employee Reductions.

In March, in an effort to reduce costs, we eliminated approximately

100 employees from our workforce. Further workforce reductions as a result of outsourcing certain
resort operations and elimination of the Agriculture segment in December, resulted in a total reduction
in our work force of approximately 540 employees. Most of the employees from our Kapalua Villas and
Kapalua Adventures operations were hired by the new third party operators, and, as mentioned above,
66 of the employees from our Agriculture segment were hired by HPC.

Description of Business

Community Development

The Community Development segment is responsible for all of our real estate entitlement,

development, construction, sales and leasing activities. Our development projects are focused primarily
on the luxury real estate market in and surrounding the Kapalua Resort and affordable and moderately
priced residential and mixed use projects in West Maui and Upcountry Maui. This segment also
includes the operations of Kapalua Realty Company, a general brokerage real estate company located
within the Kapalua Resort; and our Public Utilities Commission-regulated water and sewage
transmission operations that service the Kapalua Resort and parts of West Maui. Revenues from our
Community Development segment for the year ended December 31, 2009 were $19.9 million, or
approximately 39% of consolidated revenues.

Our property on West Maui includes approximately 21,800 acres, most of which remain as
conservation or open space. We currently have approximately 7,900 acres that are not in the current
development plans or held for sale, and are not used in our other operations or planned or used in
conservation. These properties will in the future be evaluated to determine the appropriate use or
disposition of the acreage.

We are the lessor of certain commercial and residential properties primarily at the Kapalua Resort.

Beginning in late December 2009 and January 2010, we have license and lease arrangements for the
use of certain of our buildings, facilities, land and trade names with entities who have purchased
portions of our Agriculture segment operations, and assumed the management of our Kapalua
Adventures, and our Kapalua Villas operations.

In August 2004, we contributed the fee interests in the land underlying the Kapalua Bay Hotel and

our interests in The Kapalua Shops to Kapalua Bay LLC (‘‘Kapalua Bay’’), a wholly owned subsidiary
of Bay Holdings, a limited liability company formed as a joint venture among the Company, Marriott
International Inc. and Exclusive Resorts LLC. We have a 51% interest in, and are the managing
member of, Bay Holdings. Bay Holdings constructed the Residences at Kapalua Bay, consisting of
approximately 146 units that are being sold as whole ownership and fractional ownership residences, a
clubhouse, pool, spa and other amenities. Construction of the project was substantially complete in
June 2009 and through the end of 2009, 20 whole-ownership units and 88 fractional-ownership units
have closed escrow. As of the end of 2009, construction work has been completed. Note 4 to
consolidated financial statements.

Appropriate entitlements must be obtained for land that is intended for development. Securing
proper land entitlement is a process that requires obtaining county, state and federal approvals, which
can take many years to complete and entails a variety of risks. 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
things such as parks and traffic mitigation), restrictions on permitted uses of the land, and provision of
affordable housing. We actively work with the community, regulatory agencies, and legislative bodies at
all levels of government in an effort to obtain necessary entitlements consistent with the needs of the
community.

We have approximately 1,600 acres of land in Maui that are at various stages in the land

entitlement process as follows:

Location

Number of
Acres

Zoned for
Planned Use

Kapalua Resort . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other Kapalua Resort and West Maui . . . . . . . . . . . . . . . . .
Upcountry . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

800
500
300

Yes
No
No

Honolua Ridge Phase I and II were comprised of a total 50 agricultural lots ranging from three to
30 acres, with original list sales prices ranging from $895,000 to $7.3 million. We began selling Phase I
in 2004 and Phase II in 2005; there were no sales in 2008, and the last lot was sold in December 2009.

At the end of 2008, we halted the start of construction of new development projects, and to date,

we have not resumed construction of our development projects because of the current economic
climate and cash flow constraints. However, we expect to continue engaging 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:

(cid:127) Kapalua Mauka: As presently planned, this project is comprised of 690 single and multi-family

residential units and commercial components, five acres of commercial space and up to 27 holes
of golf on a total of 800 acres.

(cid:127) The Village at Kapalua: This is the commercial component of the central area of the Kapalua

Resort. It is planned to be built in two phases and will add approximately 30,000 square feet of
new commercial/retail space to the Kapalua Resort. The Village will also include apartments,
condominiums and other resort-related facilities. The first phase of the commercial component
opened in 2006, which included approximately 12,000 square feet of commercial/retail space.

(cid:127) Pulelehua: This project is designed to be a new traditional community for working families in

West Maui. It encompasses 312 acres and is currently planned to include 13 acres for an
elementary school, 882 dwelling units, 91 acres of usable open space, and a traditional village
center with a mix of residential and neighborhood-serving commercial uses. We are currently in
the process of securing a hearing for the project with the Maui County Council Land Use
Committee.

(cid:127) Hali‘imaile Town: This project is contemplated to be a new town in Upcountry Maui, a holistic
traditional community with agriculture, education, and sustainability as core design elements.
Community design workshops were held to involve the Maui community in determining the
vision for this community. The public approval process for any plan to develop this area is
expected to take several years and will be subject to urban growth boundary determination by
the County of Maui as it updates the County General Plan over the next year.

The price and market for luxury real estate on Maui has in the past been highly cyclical based
upon interest rates, the general real estate markets on the mainland United States (specifically the
West Coast), the popularity of Hawaii as a vacation destination, the general condition of the economy
in the United States and Asia, and the relationship of the dollar to foreign currencies. The Community
Development segment faces substantial competition from other land developers on the island of Maui
as well as in other parts of Hawaii and the mainland United States.

Resort

Kapalua Land Company, Ltd. is the operating subsidiary that includes our Resort segment, which
operates the Kapalua Resort, a master-planned resort community on Maui’s northwest coast. Revenues
from our Resort segment for the year ended December 31, 2009 were $29.8 million, or approximately
59% of our consolidated revenues.

Presently, the Kapalua Resort includes 1,650 acres bordering the ocean with three white sand
beaches and includes two championship golf courses (The Bay Course and The Plantation Course), the
Kapalua Spa, which opened in July 2009, The Ritz-Carlton, Kapalua hotel, the Ritz-Carlton Residences
and Club, Kapalua Bay, eight residential neighborhoods, a ten-court tennis facility, the first phase of
commercial space in the central area of the Resort, several restaurants, and over 700 single-family
residential lots, condominiums and homes. The Kapalua Resort includes a trail system that runs along
the ocean, through the mountains and winds through the resort. We operate the Kapalua Resort’s golf

courses, the Kapalua Golf Academy, spa, tennis facility and retail shops. We also manage The Kapalua
Club, a membership program that provides certain benefits and privileges within the Kapalua Resort
for its members. In March 2009, we concluded the sale of The Plantation Golf Course (PGC) for
$50 million. Concurrent with the closing of the sale, we entered into an agreement to leaseback the
PGC for an initial period of two years for an annual net rental payment of $4 million. (Note 8 to
consolidated financial statements).

Prior to mid-December 2009, we were the operator of a vacation rental program (The Kapalua
Villas), and provided certain services to the Resort. We had approximately 200 units in our Kapalua
Villas short-term rental program. Our operations also included the Kapalua Adventures, which was
comprised of zip-lines stretching over scenic ravines in the West Maui Mountains, a ropes challenge
course, a climbing wall and other adventures, and a caf´e and retail area.

In December 2009, we concluded agreements with third parties to operate and manage The
Kapalua Villas and the Kapalua Adventures. The caf´e and retail portion of Kapalua Adventures was
closed in December 2009. Also in December 2009, the association for the overall maintenance of the
Kapalua Resort entered into agreements with other operators to provide security and shuttle services to
the Resort. We continue to provide the landscaping services for the Resort.

Signature Events

We utilize nationally televised professional golf tournaments as a marketing tool for the Kapalua

Resort. Since January 1999, the Kapalua Resort has hosted the season opening event for the PGA
TOUR on the Plantation Course. For the January 2010 tournament, SBS Media Holdings, a private,
Korean media broadcasting company, was our title sponsor for the event.

Other signature events at the Kapalua Resort include:

(cid:127) Celebration of the Arts, a three-day festival held in the Spring that pays tribute to the people,
arts and culture of Hawaii through demonstrations in hula and chant, workshops in Hawaiian
art, and one-on-one interaction with local artists;

(cid:127) Kapalua Wine & Food Festival, an annual event held in the summer that attracts world-famous
winemakers, chefs and visitors to Kapalua for a series of wine tasting, festive gatherings and
gourmet meals; and

(cid:127) Billabong Pro Maui, the last Triple Crown women’s surf contest of the year held in December at

Honolua Bay.

Competition

The Kapalua Resort faces substantial competition from alternative visitor destinations and resort

communities in Hawaii and throughout the world. The Kapalua Resort’s primary resort competitors on
Maui are located in Kaanapali, which is approximately five miles from Kapalua, and in Wailea on
Maui’s south coast.

Agriculture

Maui Pineapple Company, Ltd. was the operating subsidiary for our Agriculture segment. Our
business was focused on growing, harvesting, packing and marketing fresh premium pineapple. We sold
our fresh Maui Gold(cid:3) pineapple directly to wholesalers and grocery stores in Hawaii and through a
consignment arrangement with Calavo Growers, Inc. to customers in the continental United States and
Canada. We also sold our Maui Gold(cid:3) pineapple as gift packs on our website and through certain retail
outlets in Hawaii.

Prior to 2008, we owned and operated fully integrated facilities for the production of fresh and

processed pineapple. Harvested fruit was directed to fresh or canning facilities based on market
conditions and fruit size and quality. The metal containers used in canning pineapple were produced in
a Company-owned plant at the cannery site. Our processed pineapple products were primarily sold as
private label pineapple with 100% HAWAIIAN U.S.A. stamped on the can lid, primarily to large
grocery chains and to the United States government. We substantially ceased canning operations by the
end of 2007, in order to focus on the sale of fresh fruit and pineapple juice.

Our fresh pineapple was sold in competition with both foreign and United States companies. Our
principal competitors were Dole Food Company, Inc. and Del Monte Fresh Produce Company, each of
which produces substantial quantities of fresh pineapple products, a significant portion of which is
grown in Central America.

In November 2009, our Board of Directors approved the immediate cessation of pineapple
planting and the closure of all agriculture operations by year-end. In December 2009, we entered into
agreements, primarily with one company, whereby we are no longer in the agriculture business as of
January 1, 2010, and we have accounted for the Agriculture segment as discontinued operations in this
annual report on Form 10-K.

On December 31, 2009, we entered into agreements with Haliimaile Pineapple Company, Limited

(HPC), a closely held corporation. The agreements included (i) the sale to HPC of pineapple operating
equipment, materials, supplies, and customer lists; (ii) grant of the exclusive, non-transferable,
world-wide right to use MPC trademarks, trade names, symbols and logos for the sale, marketing and
distribution of fresh pineapple grown on Maui; (iii) 20 year leases to HPC for approximately 950 acres
and 59,000 square feet of office and warehouse space; (iv) an agreement for us to provide water to
HPC from private water sources that we have contractual rights for the collection, transmission and
delivery of non-potable agriculture and irrigation water; and (v) an agreement for HPC to harvest the
existing pineapple crop through June 30, 2011 and fruit grown under an agreement with a private
grower until December 31, 2010. HPC began to grow and market Maui Gold(cid:3) as of January 1, 2010.

Employees

As of December 31, 2009, we employed 260 people of which 239 were full-time employees. During
2009, our staff was reduced by over 500 employees as a result of job consolidations, in connection with
the cessation of our Agriculture segment operations as of year-end 2009, and the transfer of our
Kapalua Villas and Kapalua Adventures operations, security and shuttle operation to other operators in
December 2009.

Other Information

Our Agriculture segment had engaged in continuous research to develop techniques to reduce
costs through crop production and processing innovations and to develop and perfect new products.
Research and development expenses approximated $473,000 in 2009 and $1,407,000 in 2008.

We have reviewed our compliance with federal, state and local provisions that regulate the

discharge of materials into the environment or are otherwise related to the protection of the
environment. We do not expect any material future financial impact as a result of compliance with
these laws.

Pursuant to a settlement agreement with the County of Maui in 1999, we have a commitment until

December 1, 2039 to share with several chemical manufacturers in the capital costs to install filtration
systems in any future water wells if the presence of a nematocide, commonly known as DBCP, exceeds
specified levels, and for the ongoing maintenance and operating costs for filtrations systems on existing
and future wells. We are not presently aware of any plans by the County of Maui to install other

filtration systems or to drill any water wells in areas affected by agricultural chemicals. For additional
information, see Note 16 to consolidated financial statements.

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 our website address does not constitute
incorporation by reference of the information contained on the websites. We make available free of
charge on or through our website our annual reports on Form 10-K, quarterly reports on Form 10-Q,
current reports on Form 8-K, and amendments to those reports filed or furnished pursuant to
Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended, or the Exchange Act, as
soon as reasonably practicable after we electronically file such material with, or furnish it to, the
Securities and Exchange Commission, or SEC. We also make available through our website all filings of
our executive officers and directors on Forms 3, 4 and 5 under Section 16 of the Exchange Act. These
filings are also available on the SEC’s website at www.sec.gov.

Executive Officers of the Company

The Company’s executive officers as of March 2010 are listed below. The current term for

Mr. Churchill expires in May 2011 and the current terms for Messrs. Haruki and Durkin expire in May
2010, or at such time as their successors are elected.

Warren H. Haruki (57) . . . . . . . Mr. Haruki has been Interim Chief Executive Officer of the

Company since May 2009 and Executive Chairman of our Board
since January 2009. He has been a director on our Board since
2006. Mr. Haruki has served as President and Chief Executive
Officer of Grove Farm Company, Inc., a land development company
located on Kauai, Hawaii since February 2005, and has been a
Trustee of Parker Ranch Foundation Trust since March 2004. He
was President of GTE Hawaiian Tel and Verizon Hawaii,
communications providers, from 1991 to 2003. Mr. Haruki is on the
Boards of the privately held companies, Parker Ranch, Inc., First
Hawaiian Bank, Pacific Guardian Life Insurance Company, Hawaii
Planing Mill, Ltd. and various non-profit organizations.

Ryan L. Churchill (38) . . . . . . . Mr. Churchill has served as President and Chief Operating Officer
of the Company since February 2010 and as Senior Vice President/
Corporate Development of the Company since March 2007. He
served as Vice President/Community Development from November
2005 to March 2007. Mr. Churchill was Vice President/Planning of
Kapalua Land Company, Ltd., the operating subsidiary responsible
for the Company’s Community Development and Resort segments,
from June 2004 to November 2005 and Development Manager from
October 2000 to June 2004.

John P. Durkin (49) . . . . . . . . . Mr. Durkin has served as Chief Financial Officer of the Company

since April 2009. From 2007 to December 2008, Mr. Durkin served
as Managing Director at Nikko Citi Holdings Co. Ltd., and CFO of
Nikko Cordial Financial Group, both in Tokyo, Japan. From 2006 to
2007, he was CFO of Asurion Asia and Representative Director and
President of Vodafone Finance KK. From 2001 to 2006, Mr. Durkin
served as Representative Executive Officer and Chief Financial
Officer for affiliates of Vodafone Group Plc in Japan.

Item 1A. RISK FACTORS

The following is a summary of certain risks we face in our business. They are not the only risks we

face. Additional risks that we do not yet know of or that we currently believe are immaterial may also
impair our business operations. If any of the events or circumstances described in the following risks actually
occurs, our business, financial condition or results of operations could suffer, and the trading price of our
common stock could decline. In assessing these risks, investors should also refer to the other information
contained or incorporated by reference in our other filings with the Securities and Exchange Commission.

Risks Related to our Business

Unstable market conditions could continue to materially and adversely affect our operating results.

Our operations and performance depend significantly on worldwide economic conditions.
Uncertainty about current global economic conditions poses a risk as consumers, tourists and real
estate investors postpone or reduce spending in response to tighter credit, higher energy costs, negative
financial news and/or declines in income or asset values, which could have a material negative effect on
the demand for our products and services. Other factors that could influence demand include increases
in fuel and other energy costs, conditions in the residential real estate and mortgage markets, interest
rates, labor costs, access to credit, consumer confidence, and other macroeconomic factors affecting
consumer spending behavior. These and other economic factors could have a material adverse effect on
demand for our products and services and on our financial condition and operating results.

The current financial turmoil affecting the banking system and financial markets and the possibility

that financial institutions may consolidate or go out of business have resulted in a tightening in the
credit markets, a low level of liquidity in many financial markets, and extreme volatility in fixed income,
credit, currency and equity markets. There could be a number of follow-on effects from the credit crisis
on our business, including insolvency of our lenders and the inability of prospective purchasers to
obtain credit to finance purchases of real property, including ownership interests in the Residences at
Kapalua Bay, for example.

In addition, if the current equity and credit markets further deteriorate, or do not improve, it may
make any necessary debt or equity financing more difficult, more costly, and more dilutive. A sustained
economic recession or increase in our expenses could require additional financing on less than
attractive rates or on terms that are excessively dilutive to existing stockholders. Failure to secure any
necessary financing in a timely manner and on favorable terms could have a material adverse effect on
our growth strategy, financial performance and stock price.

Real estate investments are subject to numerous risks and we are negatively impacted by the downturn in the
real estate market.

We are subject to the risks that generally relate to investments in real property because we develop

and sell real property, primarily for residential use. Also, we have a 51% ownership interest in Bay
Holdings, the owner and developer of the Residences at Kapalua Bay, a luxury community. The market
for real estate on Maui tends to be highly cyclical and is typically affected by changes in general local,
national and worldwide conditions, especially economic conditions, which are beyond our control,
including the following:

(cid:127) periods of economic slowdown or recession, such as we are currently experiencing;

(cid:127) the general availability of mortgage financing, including:

(cid:127) the impact of the recent contraction in the subprime and mortgage markets generally; and

(cid:127) the effect of more stringent lending standards for mortgages;

(cid:127) rising interest rates, which increases the cost of acquiring, developing, expanding or renovating
real property, resulting in decreased real property values as the number of potential buyers
decreases;

(cid:127) local, state and federal government regulation, including eminent domain laws, which may result

in a taking for less compensation than the owner believes the property is worth;

(cid:127) the popularity of Hawaii as a vacation destination;

(cid:127) shifts in populations away from the markets that we serve;

(cid:127) the relationship of the dollar to foreign currencies;

(cid:127) tax law changes, including potential limits or elimination of the deductibility of certain mortgage

interest expense, the application of the alternative minimum tax, real property taxes and
employee relocation expenses; and/or

(cid:127) acts of God, such as hurricanes, earthquakes and other natural disasters.

The occurrence of any of the foregoing could have a material adverse effect on our business by
causing a more significant general decline in the number of residential or luxury real estate sales and/or
prices of the units available for sale, which, in turn, could adversely affect our revenues and
profitability. During low periods of demand, real estate product may remain in inventory for much
longer than expected or be sold at lower than expected returns, or even at a loss, which could impair
our liquidity and ability to proceed with additional land development projects and negatively affect our
operating results. The residential real estate market on the mainland United States and on Maui as
well, is currently in a significant downturn due to the occurrence of several of the factors outlined
above, such as the worldwide economic recession and the declining availability of credit, and may
continue indefinitely into the future. Due to uncertainty as to when the real estate markets will
rebound and our cash flow constraints, in 2008, we delayed construction of new development projects,
and in 2008 and 2009 we wrote-off project costs that we do not believe can be realized. This resulted in
pre-tax charges of $14.2 million in 2009 and $10.6 million in 2008. Sustained adverse changes to our
development plans could result in additional impairment charges or write-offs of deferred development
costs, which could continue to have a material adverse impact on our 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.

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

Our Community Development and Resort segments are dependent on attracting visitors to the

Kapalua Resort, to 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.
Factors such as the recent, worldwide economic recession, substantial increases in the cost of energy,
including fuel costs, and events in the airline industry that reduce passenger capacity or increase
traveling costs, including the cessation of operations by two airlines in 2008 that provided significant
service to the Hawaiian market, could reduce the number of visitors to the Kapalua Resort and
negatively affect a potential buyer’s demand for our ongoing and future property developments, each of
which could have a material adverse impact on our business, financial condition and results of
operations. If the cost of energy, including fuel costs significantly increase, it is likely that our business,
financial condition and results of operations will be adversely impacted. In addition, the threat, or
perceived threat, of heightened terrorist activity in the United States or other geopolitical events, or the
spread of contagious diseases, such as Avian Flu or SARS, could negatively affect a potential visitor’s

choice of vacation destination or second home location and as a result, have a material adverse impact
on our business, financial condition and results of operations.

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

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

A joint venture involves certain risks such as:

(cid:127) our actual or potential lack of voting control over the joint venture;

(cid:127) our inability to maintain good relationships with our joint venture partners;

(cid:127) a venture partner at any time may have economic or business interests that are inconsistent with

ours;

(cid:127) 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

(cid:127) a joint venture or venture partner could lose key personnel.

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

If we are unable to complete land development projects within forecasted timing and budgeting, or at all,
financial results may be negatively affected.

We intend to develop resort and other properties as suitable opportunities arise, taking into
consideration the general economic climate. New project developments have a number of risks,
including risks associated with:

(cid:127) construction delays or cost overruns that may increase project costs;

(cid:127) receipt of zoning, occupancy and other required governmental permits and authorizations;

(cid:127) development costs incurred for projects that are not pursued to completion;

(cid:127) earthquakes, hurricanes, floods, fires or other natural disasters that could adversely impact a

project;

(cid:127) 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;

(cid:127) ability to raise capital;

(cid:127) governmental restrictions on the nature or size of a project or timing of completion; and

(cid:127) potential lack of adequate building/construction capacity for large development projects.

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.

Our financial results are highly dependent on our Community Development segment. The financial

performance of our Community Development segment is closely related to 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 more, to complete. 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.

If we are unable to successfully compete with other developers of luxury real estate on Maui, our financial
results could be materially affected.

Our real estate product faces significant competition from other luxury resort real estate properties

on Maui, and from other luxury resort residential property in Hawaii and the mainland United States.
In many cases, our competitors are larger than us and have greater access to capital. If we are unable
to compete with these larger competitors, our financial results could be materially adversely affected.

We have entered into limited guarantees under which we may be required to guarantee completion of the
Residences at Kapalua Bay project or certain limited recourse obligations of Bay Holdings.

Bay Holdings, in which we own a 51% ownership interest, constructed a new project consisting of

residential development on land that it owns at the site of the former Kapalua Bay Hotel, and a spa on
an adjacent parcel of land that is owned by us and leased to Bay Holdings. In connection with the
construction loan agreement we, and other members of Bay Holdings, entered into a completion
guaranty and a recourse guaranty. Under the completion guaranty, members of Bay Holdings agreed to
guarantee substantial completion of the project. Under the recourse guaranty, members of Bay
Holdings agreed to reimburse the lenders for losses incurred due to specified actions of Bay Holdings,
including, without limitation, fraud or intentional misrepresentation, gross negligence, physical waste of
project assets, and breach of certain environmental provisions of the construction loan agreement. Our
guarantees do not include payment in full of the loan. If Bay Holdings fails to complete the project or
takes any of the specified actions that result in expenses to the lender and which are covered by the
guarantees that we entered into, we could incur unanticipated expenses that could have a material
adverse effect our results of operations and financial condition. Construction of the project was
completed by the end of 2009, but the completion guaranty will remain in place until all construction
contracts have been fully settled and paid.

We may be subject to certain environmental regulations under which we may have additional liability and
experience additional costs for land development.

Various federal, state, and local environmental laws, ordinances and regulations regulate our
properties and could make us liable for the costs of removing or cleaning up hazardous or toxic
substances on, under, or in property we currently own or operate or that we previously owned or
operated. These laws could impose liability without regard to whether we knew of, or were responsible
for, the presence of hazardous or toxic substances. The presence of hazardous or toxic substances, or
the failure to properly clean up such substances when present, could jeopardize our ability to develop,
use, sell or rent the real property or to borrow using the real property as collateral. If we arrange for
the disposal or treatment of hazardous or toxic wastes, we could be liable for the costs of removing or
cleaning up wastes at the disposal or treatment facility, even if we never owned or operated that
facility. Certain laws, ordinances and regulations, particularly those governing the management or
preservation of wetlands, coastal zones and threatened or endangered species, could limit our ability to
develop, use, sell or rent its real property.

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

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. Our competitors may be affected differently by such changes in weather
conditions or natural disasters depending on the location of their supplies or operations.

If we are unable to find a title sponsor for the Ladies Professional Golf Association (LPGA) golf tournament
that we are contractually obligated to sponsor, we may have to bear the full cost of producing the tournament.

We have an agreement with the LPGA to sponsor an annual 72-hole stroke play golf tournament

for five years beginning in October 2008. We were unable to find a title sponsor for the first LPGA
Classic held in October 2008 and we absorbed the net cost of sponsoring the tournament of
approximately $3.4 million. In June 2009, we announced that due to the lack of a title sponsor, we were
unable to hold the event scheduled for October 2009, which resulted in a dispute with the LPGA. As
required by our agreement with the LPGA, the dispute will be resolved by mediation and, if necessary,
by binding arbitration. By agreement between the parties, mediation is suspended through October
2010 as we continue to work with the LPGA to seek a title sponsor for this event or a suitable
resolution. The cost of such a tournament including the production and the purse is significant and if
we must bear the full cost of producing the tournament or if we need to pay significant damages, our
results of operations could be negatively affected.

Risks Related to Indebtedness and Liquidity

We have incurred a significant amount of indebtedness and are subject to certain covenants under those
agreements. Failure to satisfy covenants under these agreements could accelerate our obligations under such
credit agreements, which could adversely affect our operations and financial results and impact our ability to
satisfy our obligations and ability to continue as a going concern.

We had approximately $97.0 million of indebtedness as of December 31, 2009, including capital
leases, consisting of a secured revolving line of credit with Wells Fargo Bank and certain other lenders
for up to $50 million, of which we had $13.5 million in availability as of December 31, 2009, a secured
revolving line of credit with American AgCredit, FLCA for up to $25 million that was fully drawn as of
December 31, 2009, and $40 million of senior secured convertible notes issued in July 2008.

Our indebtedness could have the effect of, among other things, increasing our exposure to general
adverse economic and industry conditions, limiting our flexibility in planning for, or reacting to, changes
in our business and industry, and limiting our ability to borrow additional funds. Also, continuing to
fund developments and improvements in our Resort segment and construction projects in our
Community Development segment, in addition to our debt service, requires a significant amount of
cash, which depends to a large extent upon our ability to generate cash from operations and our ability
to borrow under our credit facilities.

Each of our credit agreements with Wells Fargo Bank and American AgCredit, FLCA contain
financial and other covenants that we must satisfy. Our ability to continue to borrow under our credit
agreements and to fund our cash requirements depends upon our ability to comply with those
covenants. If we fail to satisfy any of our covenants, the lender may elect to accelerate our payment
obligations under the credit agreement. In addition, failure to satisfy any of the covenants or to
otherwise default under any of our credit agreements would also cause a default under our other credit
agreements and our senior secured convertible notes issued in July 2008. If we default under any of our
senior secured convertible notes, the holders of such notes may require us to redeem the notes, in
which case we would also be required to pay a redemption premium equal to 115% multiplied by

(i) the principal and accrued and unpaid interest under the note, or (ii) the highest closing sale price of
our common stock during the period between the event of default and delivery of redemption notice
multiplied by the number of shares of our common stock into which a note is then convertible.

Our cash outlook for the next twelve months and our ability to continue to meet our financial covenants and
to continue as a going concern is highly dependent on raising sufficient capital and selling real estate assets in
a difficult market.

For the year 2009, we had negative cash flows from operations of $15.9 million. As of
December 31, 2009, we had borrowings outstanding, including capital leases, of $97.0 million,
$1.9 million of cash and $13.5 million in unused lines of credit. In addition, we have several
commitments and contingent liabilities that could result in our obligation to pay significant amounts of
cash, including, without limitation, a commitment to purchase the spa, beach club improvements and
the sundry store from Bay Holdings for approximately $35 million. While we are currently negotiating
to restructure such commitments to avoid the need to make any current cash payments, if we are
unable to restructure such commitments and they become obligations that require current funding, it is
unlikely that we would have the cash resources to fulfill the obligations. Furthermore, we are the
defendants in a lawsuit filed by M. Yamamura and Sons, Inc. alleging material breach of a pineapple
planting agreement. Due to our current liquidity situation, a judgment against us in the Yamamura
lawsuit or the LPGA dispute, could have a material negative impact on our liquidity position. Any such
impact could result in our inability to maintain the minimum liquidity amount required by the debt
covenants in our credit facilities. Violation of the debt covenants could result in all of our outstanding
borrowings becoming immediately due. If our outstanding borrowings become due as a result of any
such breach, we would not have sufficient capital to satisfy such obligations. In response to these
circumstances, we are undertaking several financial and strategic initiatives to reduce cash commitments
and generate cash flow from a variety of sources, including a possible equity offering and the sale of
several real estate assets. However, there can be no assurance that we will be able to comply with our
loan covenants, raise sufficient capital in the equity markets or sell real estate assets at acceptable
prices, or at all, each of which raises substantial doubt about our ability to continue as a going concern.

We may need additional funds which, if available, could result in significant dilution to our stockholders, have
superior rights to our common stock and contain covenants that restrict our operations.

If we continue to operate unprofitably, if unanticipated contingencies arise or if we are required to

retire any significant portion of our outstanding indebtedness, it will be necessary for us to raise
additional capital either through public or private equity or debt financing. We believe that we will
require additional capital to fund on-going operations beyond that time. We cannot say with any
certainty that we will be able to obtain the additional needed funds on reasonable terms, or at all. If we
were to raise capital through the issuance of our common stock or securities convertible or exercisable
into our common stock, our existing stockholders may suffer significant dilution. If we issued preferred
equity or debt securities, these securities could have rights superior to holders of our common stock
and could contain covenants that will restrict our operations. If additional funds are raised through a
bank credit facility or the issuance of debt securities, the holder of such indebtedness would have rights
senior to the rights of equity holders and the terms of such indebtedness could impose restrictions on
our operations.

The financial markets have recently experienced significant turmoil which may negatively impact our liquidity
and our ability to obtain financing.

Our liquidity and our ability to obtain debt financing may be negatively impacted if one of our

lenders or other financial institutions suffers liquidity issues. In such an event, we may not be able to
draw on all, or a substantial portion, of the remaining available funds under our credit facilities. In
addition, if we attempt to obtain future financing or refinance our existing credit facilities, the credit
market turmoil could negatively impact our ability to obtain such financing. If we are unable to borrow
the full amount of available credit under our credit agreements or we are unable to obtain future
financing or to refinance our existing credit facilities, our ability to respond to changing economic and
business conditions and our results of operations and financial condition could be negatively impacted.

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

Beginning on July 28, 2011, the third anniversary of the closing of the sale of convertible notes, or

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

Our stock price has been subject to significant volatility.

Risks Relating to our Stock

In 2009, the daily closing price per share of our common stock has ranged from a high of $13.67
per share to a low of $5.18 per share. From January 1, 2010 through March 1, 2010 the daily closing
price per share of our common stock has ranged from a high of $5.49 to a low of $2.35. Our stock
price has been, and may continue to be, subject to significant volatility. 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:

(cid:127) our quarterly or annual earnings or those of other companies in our industry;

(cid:127) actual or anticipated fluctuations in our operating results; and

(cid:127) comments made by securities analysts covering our stock.

Fluctuations in the price of our common stock may be exacerbated by economic and other

conditions on Maui in particular, or conditions in the financial markets generally.

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, 2009 was

approximately 25,077 shares. If limited trading in our stock continues, it may be difficult for investors
to sell their shares in the public market at any given time at prevailing prices. Moreover, the market
price for shares of our common stock may be made more volatile because of the relatively low volume
of trading in our common stock. When trading volume is low, significant price movement can be caused
by the trading in a relatively small number of shares. Volatility in our common stock could cause
stockholders to incur substantial losses.

We do not anticipate declaring any cash dividends on our common stock.

We have not declared or paid regular cash dividends on our common stock and do not plan to pay
any cash dividends in the near future. Our current policy is to retain all funds and any earnings for use
in the operation and expansion of our business. The payment of cash dividends by us is restricted by
certain of our credit facilities, which contains restrictions prohibiting us from paying any cash dividends
without the lender’s prior approval. If we do not pay dividends, our stock may be less valuable to you
because a return on your investment will only occur if our stock price appreciates.

If we do not meet the continued listing requirements of the New York Stock Exchange (NYSE), our common
stock may be delisted.

Our common stock is currently listed on the NYSE. On January 11, 2010 we received notification

from the NYSE that we are no longer in compliance with the NYSE’s continued listing standards
because our average market capitalization was less than $50 million over a 30 trading-day period and
our most recently reported shareholders’ equity was less than $50 million.

Under applicable NYSE procedures, we had 45 days from receipt of the notification to submit a
plan to the NYSE to demonstrate our ability to achieve compliance with the continued listing standards
within 18 months. We submitted such a plan to the NYSE on February 22, 2010 and the NYSE has
until April 11, 2010 to accept or reject the plan. During this time, our common stock will continue to
be listed on the NYSE, subject to compliance with other NYSE continued listing requirements.

However, a company is subject to delisting if average global market capitalization over a
consecutive 30 trading day period is less than $15 million, regardless of stockholders’ equity or if a
company’s average common stock prices is less than $1.00 for more than 30 consecutive trading days.
As of March 1, 2010, our closing stock price was $3.49 over the previous consecutive 30 trading-day
period, and, at the same time, our average global market capitalization was approximately $29,753,000.

In the future, we may not be able to meet the continued listing requirements of the NYSE, in
response to which, the NYSE may take action to delist our common stock. In such event, if we are
unable to regain compliance with the NYSE’s continued listing standards within the required time
frames, our common stock would be delisted, which would violate the provisions of our $50 million line
of credit and our $40 million senior secured convertible notes and could result in these debts becoming
immediately due. In addition, 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, decreasing the amount of news and analyst coverage for us, 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.

Item 1B. UNRESOLVED STAFF COMMENTS

Not applicable.

Item 2. PROPERTIES

We own approximately 24,300 acres of land on Maui. Approximately 4,800 acres are used directly

or indirectly in our operations; approximately 11,600 acres are in permanent conservation or planned to
be dedicated for conservation and the remainder (approximately 7,900 acres) is not currently being
used. This land, most of which was acquired from 1911 to 1932, is carried on our consolidated balance
sheet at cost. We believe we have clear and unencumbered marketable title to all such property, except
for the following:

(cid:127) certain easements and rights-of-way that do not materially affect our use of the property;

(cid:127) a mortgage on approximately 3,100 acres previously used in Agriculture operations, which

secures our $25 million revolving loan agreement;

(cid:127) a mortgage on approximately 1,174 acres of land in West Maui primarily within the Kapalua

Resort, which secures our $50 million revolving credit facility;

(cid:127) a mortgage on approximately 25 acres comprising our Kahului property, 49 acres within the
Kapalua Resort and 86 acres in Upcountry Maui, which secures our $40 million convertible
notes arrangement;

(cid:127) a permanent conservation easement granted to The Nature Conservancy of Hawaii, a non-profit

corporation, covering approximately 8,600 acres of forest reserve land;

(cid:127) a small percentage of our land in various locations on which multiple claims exist, for some of

which we are securing clean title; and

(cid:127) a mortgage on 249 acres of our land that secures a $4.2 million loan to Maui Preparatory

Academy, or MPA, a new private middle school in West Maui. We have an agreement to sell
15 acres of the parcel to MPA for $100, and are in the process of subdividing the parcel.

A summary of the current use of our land holdings as of December 31, 2009 follows:

Conservation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Agriculture zoned (not used) . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Operations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Planned development . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Held for sale . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Acres

11,600
7,900
2,820
1,650
330

24,300

Approximately 21,800 acres of our land are located in West Maui, approximately 2,400 acres are

located in Upcountry Maui and approximately 27 acres are located in Kahului, Maui.

The 21,800 acres in West Maui comprise a largely contiguous parcel that extends from the sea to
an elevation of approximately 5,700 feet and includes 10.6 miles of ocean frontage with approximately
3,300 lineal feet along sandy beaches, as well as agricultural and grazing lands, gulches and heavily
forested areas. The West Maui acreage includes approximately 1,800 acres designated for the Kapalua
Resort.

The Upcountry Maui property is situated at elevations between 1,000 and 3,000 feet above sea
level on the slopes of Haleakala, a volcanic-formed mountain on the island that rises above 10,000 feet
in elevation. Approximately 1,100 acres are leased to third parties for agriculture operations.

The Kahului acreage includes our administrative offices and our former pineapple cannery site. All

of the Kahului acreage is currently held for sale.

Approximately 2,152 acres of leased land were used in our Agriculture operations under four

leases. Following our Board of Directors’ decision to terminate our agriculture operations, we
negotiated cancellations of these leases that will be effective in 2010. We believe our facilities are
suitable and adequate for our business and have sufficient capacity for the purposes for which they are
currently being used or intended to be used.

Item 3. LEGAL PROCEEDINGS

On September 1, 2009, M. Yamamura and Sons, Inc. (‘‘Yamamura’’) filed a lawsuit against us and

our wholly owned subsidiary, MPC, which was filed as M. Yamamura & Sons, Inc. vs. Maui Land &
Pineapple Company, Inc. (MLP) and Maui Pineapple Company, Ltd. The lawsuit was filed in the
Circuit Court of the Second Circuit, State of Hawaii pursuant to Civil No. 09-1-0655(1). In December
2007, Yamamura and MPC entered into a Maui Gold Pineapple Planting and Fruit Purchase
Agreement (the ‘‘Planting Agreement’’) whereby Yamamura would plant pineapple for MPC from
January 1, 2008 through December 31, 2010 and MPC agreed to irrigate, crop log, ripen, harvest and
purchase such pineapples from Yamamura at prices specified in the Planting Agreement. The lawsuit
alleges that MPC and MLP materially breached the Planting Agreement by not providing a planting
schedule for 2009 and by asking Yamamura to cease planting pineapple for MPC until further notice.
The lawsuit further alleges that MPC and MLP unilaterally restricted and impaired the value of
Yamamura’s benefits under the Planting Agreement. Yamamura seeks an award for general and special
damages in an unspecified amount to be proven at trial, an award for punitive damages, an award for
legal fees and costs, and an award of such other amounts as the Court deems necessary or appropriate.
Discovery is ongoing in this action and no trial date has been set. We deny the allegations made by
Yamamura and intend to vigorously defend the lawsuit.

We are a party to various claims, complaints and other legal actions that have arisen in the normal

course of business from time to time. We believe the outcome of these pending legal proceedings, in
the aggregate, is not likely to have a material adverse effect on our operations, financial position or
cash flows.

PART II

Item 5. MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER

MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES

Our common stock is traded on the NYSE under the symbol ‘‘MLP.’’ We did not declare any

dividends in 2009 and 2008. Our ability to declare dividends is restricted by the terms of our
outstanding convertible notes, unless we obtain the prior consent of the holders of the convertible notes
representing at least 60% of the aggregate principal amount of convertible notes then outstanding. We
do not intend to pay any cash dividends on our common stock in the foreseeable future. As of
March 1, 2010, there were 358 shareholders of record, which do not include beneficial owners of our
common stock whose shares are held in the names of various securities brokers, dealers and registered
clearing agencies.

The following chart reflects high and low sales prices during each of the quarters in 2009 and

2008:

First

Fourth
Quarter Quarter Quarter Quarter

Second

Third

2009 . . . . . . . . . . . . . . . . . . . . . . . . . . . High
Low
2008 . . . . . . . . . . . . . . . . . . . . . . . . . . . High
Low

$13.67
5.18
$33.01
24.98

$10.24
5.53
$34.00
27.00

$ 7.89
5.76
$34.25
22.19

$ 6.90
5.36
$28.00
7.50

We did not repurchase any shares of common stock during the fiscal year ended December 31,

2009.

On January 11, 2010, we received notification from the NYSE that we are no longer in compliance

with the NYSE’s continued listing standards because our average market capitalization was less than
$50 million over a 30 trading-day period and our most recently reported shareholders’ equity was less
than $50 million. Under applicable NYSE procedures, we had 45 days from receipt of the notification
to submit a plan to the NYSE to demonstrate our ability to achieve compliance with the continued
listing standards within 18 months. We submitted such a plan to the NYSE on February 22, 2010 and
the NYSE has until April 11, 2010 to accept or reject the plan. If the NYSE accepts our plan, we will
still be subject to quarterly monitoring for compliance with the plan. During this time, our common
stock will continue to be listed on the NYSE, subject to compliance with other NYSE continued listing
requirements. If the NYSE rejects our plan, we will be subject to delisting from the NYSE.

Securities Authorized For Issuance Under Equity Compensation Plans

The following table provides summary information as of December 31, 2009, for our equity

compensation plans:

Plan Category

Number of securities
to be issued
upon exercise of
outstanding options,
warrants and rights

(a)

Equity compensation plans approved by

security holders . . . . . . . . . . . . . . . . .

714,801

Weighted-average
exercise price of
outstanding options,
warrants and rights

(b)

$28.42

Number of securities
remaining available for
future issuance under
equity compensation plans
(excluding securities
reflected in column (a))

(c)

257,190

Item 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND

RESULTS OF OPERATIONS

The following discussion and analysis should be read in conjunction with our consolidated financial

statements and the related notes to those statements contained elsewhere in this annual report.

Overview of the Company

We operate as a landholding and operating parent company for our principal subsidiaries,

including Maui Pineapple Company, Ltd. and Kapalua Land Company, Ltd. Our reportable segments
are Resort and Community Development. Our Agriculture segment was discontinued, and was reported
as discontinued operations for the year ended December 31, 2009.

Agriculture

On November 2, 2009, our Board of Directors approved the cessation of our pineapple agriculture

operations by December 31, 2009. The Agriculture segment primarily included growing, packing, and
marketing of fresh pineapple. Our pineapple was sold under the brand names Maui Gold(cid:3) and
Hawaiian GoldTM. We also grew and marketed fresh organic pineapple. A portion of our business
included processing (canning) pineapple; however, we ceased substantially all canning and processing of
solid-pack product in June 2007. In December 2009, we entered into agreements with an unrelated,
closely held company that began to grow and market Maui Gold(cid:3) pineapple as of January 1, 2010.

Resort

The Resort segment includes our ongoing operations at the Kapalua Resort. These operations
currently include two championship golf courses, a tennis facility, and several retail outlets. Prior to
mid-December 2009, the Resort operations also included a vacation rental program (The Kapalua
Villas), Kapalua Adventures, which is comprised of zip-lines stretching over scenic ravines in the West
Maui Mountains, a high ropes challenge course, a climbing wall and other activities. In December 2009,
we entered into agreements to transfer the operations of The Kapalua Villas and the Kapalua
Adventures to third parties. In March 2009, we sold The Plantation Golf Course for $50 million and
entered into an agreement to lease back the golf course for a two year period (Note 8 to consolidated
financial statements).

Community Development

The Community Development segment includes our real estate entitlement, development,

construction, sales and leasing activities. This segment also includes the operations of Kapalua Realty
Company, a general brokerage real estate company, and Public Utilities Commission-regulated water
and sewage transmission operations located within the Kapalua Resort. Beginning August 31, 2004, the
Community Development segment includes our investment in Bay Holdings (Note 4 to consolidated
financial statements).

Global economic conditions have caused consumers, tourists and real estate investors to postpone

or reduce spending in response to tighter credit, higher energy costs, negative financial news and/or
declines in income or asset values, which has negatively affected the demand for our products and
services. Increases in fuel and other energy costs, conditions in the residential real estate and mortgage
markets, interest rates, labor costs, access to credit, consumer confidence, and other macroeconomic
factors have also affected consumer spending behavior. These and other economic factors could
continue to have a material adverse effect on demand for our products and services and on our
financial condition and operating results.

As a result of the impact of economic conditions and other factors we considered, we have
evaluated our investment in Bay Holdings for impairment in 2008 and 2009 and have recorded
other-than-temporary impairment losses of $21.3 million and $37.8 million, in 2009 and 2008,
respectively. Also in 2009 and 2008, we recorded charges of $14.2 million and $10.6 million,
respectively, for the write off of development plans and other project costs that have been abandoned
or are not otherwise expected to be recoverable because of the delay of the start of construction of new
development projects in the fourth quarter of 2008 caused by, among other things, the economic
recession, a worsening credit market, reduced demand for real estate, and declining consumer
confidence

Subsequent to the issuance of our 2008 consolidated financial statements, we concluded that cash

flows from the sale of undeveloped land should have been reflected within the operating activities
section of the cash flow statement rather than within the investing activities section because the sale of
undeveloped land is considered a principal business activity of the Community Development segment.
See Note 17 to our consolidated financial statements for a summary of the impact of the restatement
on our cash flows.

Current Developments

2009 Business Developments

In 2009, we incurred a net loss of $123.3 million and had negative cash flows from operations of

$15.9 million. Efforts to increase liquidity and to stabilize the Company for future opportunities
consumed much of our management time in 2009.

Plantation Golf Course.

In March, we completed the $50 million sale and leaseback transaction of
the Plantation Golf Course and applied $45 million of the sales proceeds to partially repay outstanding
borrowings that were partially collateralized by the golf course. Note 8 to consolidated financial
statements.

Management Changes.

In May, our Board of Directors appointed Warren H. Haruki to serve as

Kapalua Bay Holdings, LLC.

In June, construction of the Residences at Kapalua Bay project was
substantially completed and Bay Holdings closed escrow on 20 whole-ownership units and 88 fractional-
ownership units in 2009. In September, Bay Holdings recorded a $208.8 million charge representing an
impairment of the value of the Residences at Kapalua Bay project. We recorded losses from this joint
venture of $47.2 million in 2009 and stopped recording our share of Bay Holdings’ losses after our
investment balance and other amounts advanced to Bay Holdings were reduced to zero, and the
estimated remaining obligations to the joint venture were accrued. Construction work has been
completed as of the end of 2009. Note 4 to consolidated financial statements.

Real Estate Sales.

In September, we sold 125 acres that comprised a portion of our Kapalua

Revolving Credit Agreements.

In October, our revolving credit agreement with Wells Fargo Bank

Agriculture Segment.

In November, our Board of Directors approved the immediate cessation of

Resort Operations.

In December, we entered into agreements with third parties to operate and

Employee Reductions.

In March, in an effort to reduce costs, we eliminated approximately

RESULTS OF OPERATIONS

Comparison of Years Ended December 31, 2009 and 2008

CONSOLIDATED

Consolidated Revenues . . . . . . . . . . . . . . . . . . . . . . . .
Loss From Continuing Operations . . . . . . . . . . . . . . . .
Loss From Discontinued Operations
. . . . . . . . . . . . . .
Net Loss . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Net Loss Per Common Share . . . . . . . . . . . . . . . . . . .

Year Ended December 31,

2009

2008

change

(in millions, except share amounts)
$ (0.7)
$ 51.1
$ 50.4
$(34.8)
$(53.6)
$ (88.4)
$ (9.1)
$(25.8)
$ (34.9)
$(43.9)
$(79.4)
$(123.3)
$(5.35)
$(9.98)
$(15.33)

We reported a net loss of $123.3 million for 2009 compared to a net loss of $79.4 million for 2008.
For 2009 and 2008, the net loss per common share was $(15.33) and $(9.98), respectively. At the end of
2009, we ceased all of our Agriculture segment operations and we are reporting that segment as
discontinued operations. Our loss from continuing operations was $88.4 million for 2009 and
$53.6 million for 2008. Losses from our equity investment in Bay Holdings of $47.2 million in 2009 and
$18.8 million in 2008, impairment charges related to obsolete development plans, employee severance
charges incurred as we downsized our operations, and operating losses from our Resort operations
caused by low visitor counts, were largely responsible for the losses in 2009 and 2008. Consolidated
revenues were $50.4 million and $51.1 million for 2009 and 2008, respectively.

General and Administrative

In 2009, general and administrative expenses decreased by 31% to $20.2 million compared to
$29.3 million for 2008. The major components of the difference in general and administrative expenses
were as follows:

Salaries and wages . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Employee incentives and stock compensation . . . . . . . . . . . .
Pension and other postretirement expense . . . . . . . . . . . . . .
Professional and other outside services . . . . . . . . . . . . . . . . .
Loss on asset disposals . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Employee severance expense . . . . . . . . . . . . . . . . . . . . . . . .
Other (net) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Years ended December 31,

2009

2008

change

(in millions)
$ 8.5
2.1
2.5
4.9
1.8
2.2
7.3

$ 4.5
1.0
3.5
2.5
3.5
1.8
3.4

$(4.0)
(1.1)
1.0
(2.4)
1.7
(0.4)
(3.9)

Total

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

$20.2

$29.3

$(9.1)

General and administrative salaries and wages and employee incentives and stock compensation

were lower in 2009 compared to 2008 due to a reduction in size of our workforce in 2009 by
approximately 540 employees. Approximately 100 positions were eliminated in the Resort and
Community Development segments and in corporate services in March 2009 in an effort to reduce
costs; and most of the other 2009 headcount reductions took place in December with the cessation of
our Agriculture segment operations, and transfer of The Kapalua Villas, Kapalua Adventures, and
Kapalua security and shuttle operations to third party operators. In addition, a 10% wage reduction
was implemented in March 2009 that affected nearly all employees and in the second half of 2008,
there were also significant workforce reductions in the Agriculture segment and in corporate services.

The increase in pension and other postretirement benefits expense reflects the decrease in value of

assets in our defined benefit pension plans combined with a reduction in the discount rate as of
January 1, 2009 compared to January 1, 2008.

The decrease in professional services and other services primarily reflects a reduction in use of
outside consultants, in particular legal and a reduction in the cost of compliance with the Sarbanes-
Oxley Act of 2002, Section 404.

Loss on asset disposal for 2009 includes $1.9 million for the settlement payment and forfeiture of a
deposit under which we were obligated to purchase certain real estate at the Kapalua Resort. The 2008
loss on asset disposals reflects the write off of excess equipment used it the Resort operations.

Employee severance expense decreased in 2009 despite the significant increase in headcount
reduction because the severance plan covering non-bargaining unit salaried personnel was amended in
2009 to reduce severance benefits. Also, 28% of the employees that we severed in December 2009 were
hired by the companies assuming our Agriculture and Resort operations and were therefore not eligible
for severance benefits.

General and administrative expenses are incurred at the corporate level and at the operating
segment level. All general and administrative expenses incurred at the corporate level are allocated to
the operating segments. Such allocations are consistent with our management’s evaluation of services
provided to the operating segments.

Interest Expense

Interest expense was $10,452,000 for 2009 compared to $2,436,000 for 2008. In 2009 and 2008,
$18,000 and $343,000, respectively, of interest was capitalized to construction projects. Interest expense
for 2009 and 2008 include a (credit) charge of $(1,097,000) and $1,160,000, respectively, representing
the change in the estimated fair value of the swap agreements entered into in January 2008 (Note 6 to
consolidated financial statements). Interest expense for 2009 and 2008 also include credits of $2,200,000
and $7,381,000, respectively, representing the change in the estimated fair value of the derivative
liability that was bifurcated from our $40 million convertible notes, and charges for interest accretion of
$3,162,000 and $1,230,000, respectively for 2009 and 2008, on the carrying value of the convertible note
(Notes 5 and 6 to consolidated financial statements). Our effective interest rate on borrowings was
6.0% for 2009 compared to 4.7% for 2008 and average borrowings were about $12 million less in 2009
compared to 2008. The increase in interest expense was due primarily to the difference in the net fair
value credit adjustments and accretion charges for the convertible notes and swap agreements of
$100,000 for 2009 compared to $5 million for 2008.

RESORT

Revenues . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
% of consolidated revenues . . . . . . . . . . . . . . . . . . . .

Year Ended
December 31,

2009

2008

change

$ 29.8

(in millions)
$ 37.4

59%

73%

$(7.6)

Operating Loss . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

$(16.1)

$(19.7)

$ 3.6

The Resort segment reported an operating loss of $16.1 million for 2009 compared to an operating
loss of $19.7 million for 2008. Resort segment revenues were $29.8 million for 2009 or 20% lower than
2008. The reduced operating loss for 2009 was primarily due to staffing reductions and other cost
cutting measures taken in 2009.

In 2009, financial results for the Resort segment were negatively affected as Maui continued to

experience a soft tourism market as visitor days deceased by 7% from 2008 and the number of
occupied rooms at the Kapalua Resort decreased by 2% in 2009 compared to 2008 and per person
expenditures declined by 7% compared to 2008. Results for 2008 were sharply affected by the decline
in visitor counts due to the economic recession in the United States and elsewhere that resulted in
inability or hesitation to travel and reduced airline passenger capacity to Hawaii because of airline
closures.

Golf, Retail and Villas

Revenues from golf operations decreased by 16% and paid rounds of golf decreased by

approximately 7% for 2009 compared to 2008. Average green and cart fees decreased by approximately
12% in 2009 compared to 2008. Resort retail sales for 2009 were approximately 13% lower than sales
for 2008, reflecting the lower number of occupied rooms and reduced daily expenditures per person.

Revenues from the Kapalua Villas were approximately 45% lower in 2009 compared to 2008,

reflecting a 28% decrease in occupied rooms and a 24% lower average room rate. There were
approximately 22% fewer rooms available in 2009, partially reflecting units under renovation under our
Kapalua Gold program to upgrade and standardize the units in our rental program. As of
December 16, 2009, the operations of the Kapalua Villas and Kapalua Adventures were licensed to a
third party and we are now receiving license fees for the use of our trademarks and trade names, rental
income for use of administrative and housekeeping space at the Kapalua Resort, and Resort fees per
occupied night for access to certain recreational facilities at the Kapalua Resort. Minimum annual rents
and license fees are approximately $300,000 and will be accounted for in the Community Development
operating segment in 2010.

COMMUNITY DEVELOPMENT

Revenues . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . . . . . . .

% of consolidated revenues

Year Ended
December 31,

2009

2008

change

$ 19.9

(in millions)
$ 11.4

$ 8.5

39%

22%

Operating Loss . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

$(62.6)

$(40.0)

$(22.6)

The Community Development segment reported an operating loss of $62.6 million for 2009
compared to an operating loss of $40.0 million for 2008. Revenues from this operating segment were
$19.9 million for 2009 compared to $11.4 million for 2008. Increased revenues in 2009 were primarily
from the sale of real estate inventories. The operating loss from this segment in 2009 and 2008 largely
reflects losses from our investment in Bay Holdings. Also in 2009 and 2008, we recorded charges of
$14.2 million and $10.6 million, respectively, for the write off of development plans and other project
costs that have been abandoned or are not otherwise expected to be recoverable because of the delay
of the start of construction of new development projects in the fourth quarter of 2008 caused by,
among other things, the economic recession, a worsening credit market, reduced demand for real
estate, and declining consumer confidence (Note 3 to consolidated financial statements).

Our equity in the losses of Bay Holdings was $47.2 million in 2009 compared to $18.8 million for

2008 which included a charge for $37.8 million representing what we believed to be an other than
temporary impairment of our investment in Bay Holdings at the end of 2008. In September 2009, Bay
Holdings recorded a $208.8 million charge representing an impairment of the value of the Residences
at Kapalua Bay project. We recorded losses from this joint venture of $47.2 million in 2009 and

stopped recording our share of Bay Holdings’ losses after our investment balance and other amounts
advanced to Bay Holdings were reduced to zero, and the estimated remaining obligations to the joint
venture were accrued. In June 2009, construction of the Residences at Kapalua Bay project was
substantially completed and Bay Holdings closed escrow on 20 whole-ownership units and 88 fractional-
ownership units; and construction work was complete by the end of 2009. (Note 4 to consolidated
financial statements).

Real Estate Sales

Real estate inventory sales in 2009 produced revenues of $12.0 million and pre-tax income of
$6.8 million. The 2009 real estate sales included the sale of the last lot in Honolua Ridge Phase II and
the sale of 138 acres in two land sale transactions. Our Honolua Ridge Phase II subdivision consisted
of 25 agricultural-zoned lots, which began selling in August 2005.

In 2008, we sold approximately 111 acres of Upcountry Maui property in three land sales

transactions and recognized revenues of $4.4 million and pretax income of approximately $4.1 million.

Real estate development and sales are cyclical and depend on a number of factors (see the risk

factor entitled ‘‘Real estate investments are subject to numerous risks and we are negatively impacted
by the downturn in the real estate market’’ under Risk Factors in Item 1A above). Results for one
period are therefore not necessarily indicative of future performance trends for this segment.

AGRICULTURE

Year Ended
December 31,

2009

2008

change

(in millions)

Loss From Discontinued Operations

Before Income Taxes . . . . . . . . . . . . . . . . . . . . . . . .

$(34.9)

$(22.0)

$(12.9)

On November 2, 2009, our Board of Directors authorized the cessation of all pineapple operations
by December 31, 2009. Our Agriculture segment operating results and the loss on sale of the assets are
reported as discontinued operations and prior period amounts are restated for comparability. The loss
from discontinued operations for 2009 includes net charges of $22.8 million related to the sale or other
disposition of the Agriculture segment assets, employee severance and cancellation of contracts.

LIQUIDITY AND CAPITAL RESOURCES

Debt Position

At December 31, 2009, our total debt, including capital leases, was $97.0 million, a decrease of

$40.0 million from December 31, 2008. At December 31, 2009, we had $1.9 million in cash and
$13.5 million in available lines of credit. The decrease in outstanding borrowings in 2009 was due to
proceeds of $45 million from the March 2009 sale of the PGC being applied to partially repay our
revolving line of credit with Wells Fargo and certain other lenders (Note 8 to consolidated financial
statements).

Our cash outlook for the next twelve months and ability to continue to meet our financial

covenants is highly dependent on selling certain real estate assets in a difficult market and raising new
equity capital. If we are unable to meet our financial covenants resulting in the borrowings becoming
immediately due, we would not have sufficient liquidity to repay such outstanding borrowings. In
addition, we currently have a commitment to purchase the spa, beach club improvements and the
sundry store (the ‘‘Amenities’’) from Bay Holdings at actual construction costs of approximately

$35 million. We are in discussions with the other members of Bay Holdings to negotiate the terms of
the purchase and sale agreement including the purchase price and payment terms, and are discussing
whether we will even be required to purchase the Amenities. The other members of Bay Holdings are
generally open to revisions to the purchase terms or relieving us from our commitment to purchase the
Amenities in return for our best efforts to continue to operate the Amenities; however, final terms of
the purchase of the Amenities remain to be resolved with the other members and lenders of Bay
Holdings. In June 2009, we announced that due to a lack of a title sponsor, we were unable to hold the
2009 Ladies Professional Golf Association (LPGA) event that was scheduled for October. This has
resulted in a dispute with the LPGA, which can be resolved by mediation and if necessary by binding
arbitration. By agreement between the parties, mediation has been suspended through October 2010
and we expect to pay $700,000 of which 50% will be applied towards sponsorship of an event if the
parties are able to structure a future event. In addition, in September 2009, M. Yamamura and
Sons, Inc. (‘‘Yamamura’’) filed a lawsuit against us alleging that we materially breached the Maui Gold
Pineapple Planting and Fruit Purchase Agreement by not providing a planting schedule for 2009 and by
asking Yamamura to cease planting pineapple for us, and that we unilaterally restricted and impaired
the value of Yamamura’s benefits under the agreement. We are also subject to other commitments and
contingencies that could negatively impact our future cash flows, as described in Note 16 to our
consolidated financial statements. These circumstances raise substantial doubt about our ability to
continue as a going concern. There can be no assurance that we will be able to successfully achieve our
initiatives discussed below in order to continue as a going concern. Our consolidated financial
statements do not include any adjustments that might result should we be unable to continue as a going
concern.

In response to these circumstances, we are undertaking several financial and strategic initiatives to

reduce cash commitments and generate cash flow from a variety of sources, including the sale of
several real estate assets. In December 2009, we entered into agreements with third parties to assume
the operation and management of The Kapalua Villas, the Kapalua Adventures activities and the
security and shuttle operations for the Kapalua Resort. We also discontinued operations of our
Agriculture segment as of December 31, 2009 and consummated agreements with an unrelated closely
held company to continue growing and marketing our Maui Gold(cid:3) pineapple. Further, we have
renegotiated real estate purchase and other agreements to eliminate approximately $6 million of 2009
cash commitments (net of cancellation fees) into 2010 and later. We have taken several other actions to
reduce cash outflows including reducing our total number of employees from approximately 800 at
December 31, 2008 to 260 at the end of 2009, as well as other measures to reduce operating expenses.
We are also actively in the process of attempting to sell several selected real estate assets to provide
additional liquidity and to further reduce debt. In December 2009, we filed a registration statement to
initiate an equity financing transaction.

Revolving Line of Credit with American AgCredit, FLCA

We have a $25 million revolving loan that is secured by certain parcels of our real property on
Maui that matures in March 2011 (as amended). Commitment fees of 0.40% are payable on the unused
portion of the revolving facility. The financial covenants include a minimum liquidity (as defined in the
agreement) of $8 million, maximum total liabilities of $240 million, and limitations on capital
expenditures. As amended, the agreement provides that interest on loan draws accrue interest based on
the LIBOR market index or applicable LIBOR rate, plus 4.25%, subject to a minimum interest rate of
5.5%. At December 31, 2009, $25 million was outstanding under our revolving loan agreement with
AgCredit.

Revolving Line of Credit with Wells Fargo and Certain Other Lenders

In November 2007, we entered into a $90 million revolving line of credit secured by approximately
1,437 acres of our West Maui land. All outstanding principal and accrued interest was scheduled to be
due on November 13, 2009. In March 2009, we sold the PGC for $50 million (Note 8 to consolidated
financial statements), which was included in the collateral securing the line of credit agreement. In
consideration for release of the PGC from the collateral, $45 million of the sales proceeds were applied
to partially repay outstanding borrowings and the credit limit under this facility was reduced to
$45 million. In conjunction with the PGC sale, we amended the line of credit agreement to extend the
maturity date to March 13, 2010 and, accordingly, classified the remaining outstanding principal of
$32.8 million as a noncurrent liability at December 31, 2008 in the consolidated balance sheet.

In October 2009, the line of credit agreement was amended and restated. The agreement
principally increases the secured revolving line of credit from $45 million to $50 million, extends the
maturity date of the credit agreement from March 2010 to March 2011, and re-sets financial covenants.
As amended, the agreement provides that interest on loan draws accrue interest based on the LIBOR
market index or applicable LIBOR rate, plus 4.25%, subject to a minimum interest rate of 5.5%. The
financial covenants include a minimum liquidity (as defined in the agreement) of $8 million and
maximum total liabilities of $240 million. There are no commitment fees on the unused portion of the
revolving facility and interest is due monthly. The line of credit agreement contains various
representations, warranties, affirmative, negative and financial covenants and events of default. At
December 31, 2009, we had irrevocable letters of credit totaling $1.6 million that were secured by this
loan facility, $34.9 million outstanding and $13.5 million available for borrowing.

Fixed Rate Swap Agreement

In January 2008, we entered into a fixed interest rate swap agreement with Wells Fargo Bank, the
effect of which was to convert variable-rate interest expense, which was previously tied to 1-, 2-, 3- and
6-month LIBOR terms, to fixed-rate interest expense based on a 2-year fixed LIBOR rate. The interest
rate swap enabled us to lock-in an average interest rate of 2.9% before applicable spreads for
approximately two years on $55.0 million of outstanding variable rate revolving balances (Note 6 to
consolidated financial statements). Our fixed rate swap agreement terminated in January 2010.

Private Placement of Convertible Notes

On July 28, 2008, we issued $40 million in aggregate principal amount of convertible notes, bearing

5.875% interest per annum payable quarterly in cash in arrears beginning October 15, 2008. The
financing resulted in net proceeds to us of approximately $38.4 million, after deducting the placement
agent fee and approximately $300,000 in legal and accounting expenses relating to the financing. The
net proceeds from this financing were used to re-pay $28.0 million of debt under our revolving lines of
credit with interest rates that floated with the prime rate and a $9.7 million 6.93% fixed rate term loan
that matures in 2026 (see Note 5 to our consolidated financial statements). The remaining net proceeds
of approximately $800,000 were used to fund our working capital.

The convertible notes are convertible, at any time following their issuance, into shares of our
common stock at an initial conversion price of $33.50 per share, which is equal to an initial conversion
rate of 29.8507 shares per $1,000 principal amount of the convertible notes. On July 28, 2008, the date
the financing closed, the closing sales price for a share of our common stock was $28.62. The
conversion price is subject to (i) standard weighted-average anti-dilution protection, and (ii) to an
automatic reset 18 months following the closing of the financing at the lower of the then current
conversion price and 115% of the closing bid price of our common stock as reported on the NYSE on
the adjustment date, provided, that, with respect to the reset adjustment, in no event shall the
conversion price be reset below $30.00 per share. The convertible notes are not convertible to the

extent that their conversion would cause the holder to be the beneficial owner of more than 4.99% of
our common stock immediately after giving effect to such conversion.

Further, if an adjustment to the conversion price would result in any investor owning in excess of
(i) such investor’s FIRPTA Cap (as defined in the convertible notes) on an as converted basis (without
regard for any limitations of conversion set forth in the convertible notes) or (ii) the Exchange Cap
Allocation (as defined in the convertible notes), then in lieu of the full anti-dilution adjustment, the
conversion price will be reduced to the conversion price that would result in such note being
convertible into such number of shares of common stock equal to the lower of the investor’s FIRPTA
Cap or Exchange Cap Allocation, as applicable (without regard to any limitations on conversion set
forth in the convertible note), and, in addition, no later than five business days following the date of
conversion of the convertible note, such investor shall receive a cash payment from us equal to the
product of (x) the closing bid price of our common stock on such conversion date and (y) the number
of shares of common stock in excess of such FIRPTA Cap or Exchange Cap Allocation, as applicable,
that would have otherwise been issuable without regard to such limitation and any other limitations on
conversion set forth in the convertible note.

The convertible notes mature on July 15, 2013. However, at any time after the second anniversary

of the closing, we have the right, but not the obligation, to require the investors to convert their
convertible notes into shares of our common stock at the then applicable conversion price if the
average of the daily volume weighted average price of our common stock is 175% of the conversion
price then in effect for 20 out of 30 consecutive trading days.

On the third anniversary of the closing, each investor has the right to require us to redeem all or

any portion of such investor’s convertible note at a redemption price equal to 100% of the principal
amount of the convertible note being redeemed, plus accrued and unpaid interest thereon. Upon the
occurrence of a change of control of the Company, each investor will have the right to require us to
repurchase all or any portion of such investor’s convertible note at a repurchase price equal to 100% of
the principal amount of the convertible note being redeemed, plus accrued and unpaid interest thereon.
If an investor elects to convert its convertible note in connection with a change of control, we will pay
a make-whole premium to such investor, unless (i) at least 90% of the consideration, excluding cash
payments for fractional shares, in such change of control consists of shares of capital stock of the
surviving or resulting entity that are listed on, or immediately after the transaction or event will be
listed on, a national securities exchange and as a result of such transaction or transactions the
convertible notes become convertible into or exchangeable or exercisable for such capital stock of the
surviving or resulting entity and such entity has assumed the obligations under this convertible note or
(ii) we continue to be the successor entity and our common stock continues to be listed on a national
securities exchange. The make-whole premium table included in the convertible notes sets forth the
number of additional shares to be paid depending upon the effective date of the change of control
triggering the make-whole premium payment and the price paid per share of common stock in the
change of control.

Additionally, the convertible notes may become immediately due and payable upon an ‘‘event of

default,’’ as defined in the convertible notes.

If a convertible note is redeemed in connection with an event of default, we may be required to

pay a redemption premium, in which case the redemption amount would equal 115% multiplied by
(i) the principal and accrued and unpaid interest under the convertible note, or (ii) the highest closing
sale price of our common stock during the period between the event of default and delivery of
redemption notice multiplied by the number of shares of our common stock into which a convertible
note is then convertible.

The convertible notes are secured by a security interest in the form of and with respect to the

following property, referred to as the ‘‘Real Property Collateral’’:

(cid:127) a first priority lien on our Kahului property, with up to 30% of all proceeds realized from any

sale of the headquarters being placed in a collateral account for the repayment of the
convertible notes;

(cid:127) a first priority lien on what is known as the ‘‘Central Resort’’ property, provided that the security
interest granted in the Central Resort will be subordinated to any future construction or other
project financing;

(cid:127) a first priority lien on all or a portion of what is known as the ‘‘Upcountry Hali’imaile’’ property,

with up to 35% of all proceeds realized from any sale of such property being placed in the
collateral account; and

(cid:127) a first priority lien on all or a portion of what is known as the ‘‘Merriman’s’’ property, with up
to 35% of all proceeds realized from any sale of such property being placed in the collateral
account.

We have also agreed to deposit into the collateral account up to 10% of any proceeds or
distributions realized from our equity interest in Bay Holdings, and up to 50% of any proceeds or
distributions realized from our equity interest in W2005 Kapalua/Gengate Hotel Holdings L.L.C. All
liens placed on the Real Property Collateral will be released by the investors at such time as at least
80% of the outstanding principal and accrued interest owing under the convertible notes has been
deposited into the collateral account. In addition, all cash deposited into the collateral account shall be
released back to us if and when the convertible notes are converted into shares of our common stock.

Our ability to continue to meet our financial covenants through 2010 as required by the debt
agreements discussed above is highly dependent on selling certain real estate assets in a difficult market
and raising new equity capital.

Amended Construction Loan Agreement Following Lehman Bankruptcy

In July 2006, Kapalua Bay entered into a construction loan agreement with Lehman Brothers
Holdings Inc. in connection with constructing the Residences at Kapalua Bay project. Bay Holdings, in
which we own a 51% equity interest, is the sole member of Kapalua Bay. Pursuant to the terms of the
construction loan agreement, Lehman initially agreed to loan to Kapalua Bay the lesser of $370 million
or 61.6% of the total projected cost of the project.

On October 3, 2008, we disclosed that Lehman ceased funding under the construction loan

agreement following Lehman’s bankruptcy filing on September 15, 2008. As a result of Lehman’s
failure to provide continued construction financing as required under the construction loan agreement,
we and other members of Bay Holdings agreed to advance funds to Kapalua Bay in order to continue
construction of the project. Since Lehman’s bankruptcy, the Syndicate Lenders and Swedbank
continued to provide funding.

On February 11, 2009, Kapalua Bay, Lehman, other lenders under the loan agreement, Swedbank

and MH Kapalua Venture, LLC, an affiliate of Marriott, entered into an Amended and Restated
Construction Loan Agreement (the ‘‘Amended Loan Agreement’’). Pursuant to the Amended Loan
Agreement, the aggregate amount that Kapalua Bay may borrow, including amounts previously funded
under the loan agreement is approximately $354.5 million. In December 2009, Bay Holdings amended
the Amended Loan Agreement to extend the maturity date of the principal payment of $45.7 million
that was previously due in February 2010 to December 2010. Bay Holdings is currently in negotiations
with the lenders to restructure the terms of the Amended Loan Agreement to provide available
funding until the Project is completely sold out. (Note 4 to consolidated financial statements).

The full amount advanced under the Amended Loan Agreement will continue to be secured by a

mortgage on the project assets, including the land owned by Kapalua Bay upon which the project is
being constructed. The amounts which may be borrowed under the Amended Loan Agreement are not
revolving in nature and amounts repaid may not be subsequently advanced.

We and the other members of the joint venture continue to guarantee to the lenders completion of

the project and each member’s pro rata share of costs and losses incurred by the lender as a result of
the occurrence of specified triggering events during the term of the Amended Loan Agreement. The
members’ guarantee to the lender does not include payment in full of the loan. We have recognized a
liability representing the estimated fair value of our obligation under these provisions.

Operating Cash Flows

Net cash used in operating activities for 2009 and 2008 was $15.9 million and $45.1 million,
respectively. Net cash used in operating activities for 2009 was principally due to operating cash used
by our Agriculture (discontinued in 2009) and Resort segments offset by cash provided by real estate
inventory sales in our Community Development segment. The decrease in net cash used in operating
activities is primarily due to staff reductions and other cost-cutting measures implemented in 2009, and
cash from sales of real estate inventories which was approximately $11.8 million in 2009 compared with
$7 million in 2008.

Taxes and interest paid in 2009 and 2008 was $3.2 million and $0.2 million, respectively. These
amounts are net of tax refunds received in 2009 and 2008 of $5.2 million and $4.2 million, respectively.

Investing and Financing Cash Flows

Cash provided by investing and financing activities in 2009 included the following significant

transactions:

(cid:127) Sale of the PGC produced cash proceeds of $48.1 million.

(cid:127) Sale of miscellaneous equipment that had been used in our operations produced cash of

$634,000.

(cid:127) Sale of two properties that were used in operations produced cash proceeds of $2.8 million.

Cash used in investing and financing activities in 2009 included the following significant

transactions:

(cid:127) Net payments of long-term debt were $42.9 million as $45 million of proceeds from sale of the

PGC were applied to pay down outstanding borrowings.

(cid:127) Cash outflow, primarily for replacement of equipment and facilities in our Resort and

Community Development segments totaled $1.2 million.

Cash provided by investing and financing activities in 2008 included the following significant

transactions:

(cid:127) Issuance of senior secured convertible notes provided net cash proceeds of $38.4 million.

(cid:127) Sale leaseback transactions of some of our autos, trucks and golf equipment provided cash

proceeds of approximately $2 million.

Cash used in investing and financing activities in 2008 included the following significant

transactions:

(cid:127) Cash contributions of $7.8 million were made to Bay Holdings pursuant to cash calls; and a

member loan of $3.6 million was made to supplement other funds to continue construction in
October 2008 after the default by the primary lender on the project.

(cid:127) Cash outflow for the completion of major capital projects included in fixed assets was

$13.9 million.

(cid:127) We repaid a $9.7 million term loan that was due through 2026 with proceeds from the senior

secured convertible notes issued in July 2008; and we repaid $6.5 million of equipment loans due
through 2013 with proceeds from our revolving credit facilities.

Future Cash Inflows and Outflows

Our plans for 2010 include the possible sale of certain operating and non-operating real estate
assets that could result in net cash proceeds of approximately $38 million, which may be used to repay
outstanding indebtedness and for general working capital. In addition, we may seek to raise capital by
conducting an equity financing, which may be used to repay outstanding indebtedness and to provide
general working capital. There can be no assurance that we will be able to sell any of our real estate
assets or consummate an equity financing on acceptable terms, or at all.

Contributions to our defined benefit pension plans are expected to be approximately $2.4 million

in 2010.

In 2010, we expect to incur about $4.2 million for completion of the PGC irrigation system as per
our agreement with the owner of the golf course (Note 8 to consolidated financial statements). Other
capital expenditures are expected to be incurred only as critically necessary.

Contractual Obligations

The following summarizes our contractual obligations as of December 31, 2009 (in thousands):

Contractual Obligations

Long-term debt(1) . . . . . . . . . . . . . . . . . . . . . . . . . .
Capital lease obligations (including interest) . . . . . . .
Interest on long-term debt(2)(7) . . . . . . . . . . . . . . . .
Operating leases(3) . . . . . . . . . . . . . . . . . . . . . . . . .
Purchase commitments(3)(6) . . . . . . . . . . . . . . . . . .
Other long-term liabilities(4)(5)(7) . . . . . . . . . . . . . .

Payment due by period (years)

Less
Than 1

1 - 3

4 - 5

After 5

$ — $59,900
616
5,878
709
477
2,433

2,083
8,053
761
278
8,812

$40,000
13
1,279
115
1,554
939

$ —

—
—
—
777

Total

$ 99,900
2,712
15,210
1,585
2,309
12,961

Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

$134,677

$19,987

$70,013

$43,900

$777

(1) Long-term debt as presented above includes convertible notes of $40 million due in July 2013.

These notes are included in our December 31, 2009 balance sheet as long-term debt of $34,324,000
and other accrued liabilities (derivative liability) of $489,000. The purchasers of the notes have the
right to require redemption on the third anniversary of the purchase (July 2011), but the notes
have a stated five year maturity. Note 5 to our consolidated financial statements.

(2) Future interest payments on long term debt were calculated assuming that future interest rates

equal the rates at December 31, 2009.

(3) These operating leases and purchase commitments are not reflected on the consolidated balance

sheets under accounting principles generally accepted in the United States of America.

(4) Amounts consist primarily of payments due under our deferred compensation plan, unfunded

pension payments and severance plans. Where pension payments were for lifetime, payments were
estimated for five additional years.

(5) We account for uncertain tax positions in accordance with the provisions of Financial Accounting
Standards Board (FASB) Accounting Standards Codification (ASC) Topic 740. We have not
provided a detailed estimate of the timing of payments amounting to $899,000 due to the
uncertainty of when the related tax settlements are due.

(6) We have a commitment to purchase the Amenities from Bay Holdings at actual construction cost,
which is currently estimated to be approximately $35 million. The terms of the purchase are
currently being negotiated between the members and the commitment is not included in the table
above because the timing and amount of the payment is uncertain.

(7) In connection with the sale of the PGC, we entered into an agreement to leaseback the PGC for
two years for an annual net rental payment of $4 million. The agreement also requires us to
replace the irrigation system at the PGC, subject to a cap of $5 million, prior to the end of the two
year lease term. The sale and leaseback has been accounted for as a financing transaction, and,
accordingly, a portion of each monthly rental payment is charged to interest expense. The portion
of the rental payments which will represent a reduction of the noncurrent obligation is included in
this line in the table above. The interest component has been included in Interest on Long-Term
Debt in the table above and the expected expenditures for the irrigation system replacement are
included in Other Long-Term Liabilities. We have various unsettled contractual obligations with
regard to our now terminated Agriculture segment operations and have recorded our best estimate
of the potential loss of $3.3 million, which is included in contract termination accruals in the
consolidated balance sheet.

CRITICAL ACCOUNTING POLICIES

Our accounting policies are described in Summary of Significant Accounting Policies, Note 1 to

our consolidated financial statements (included in Item 8). The preparation of financial statements in
conformity with generally accepted accounting principles requires the use of accounting estimates.
Some of these estimates and assumptions involve a high level of subjectivity and judgment and
therefore the impact of a change in these estimates and assumptions could materially affect the
amounts reported in our financial statements. The accounting policies and estimates that we have
identified as critical to the consolidated financial statements are as follows:

(cid:127) Our investment in Bay Holdings was written down to zero at December 31, 2009 to recognize an
other-than-temporary impairment and to record losses incurred by Bay Holdings in the third
quarter of 2009. In 2008 and 2009, we recorded impairment charges totaling $59.1 million, and
in 2009 we recorded equity in losses of Bay Holdings of $25.9 million. The equity in losses that
we recorded was limited to the remaining carrying value of the investment on our consolidated
balance sheet and our estimated share of completion and recourse guarantees. Bay Holdings
recorded losses of $246 million in 2009 which included a $208.8 million charge to reflect an
impairment of the carrying value of its real estate inventories (whole and fractional
condominium units) held for sale. The impairment loss reflects higher estimated default rates on
actual whole and fractional unit closings than was previously anticipated, and also reflects a
change in forecasted sales revenue on the unsold whole and fractional units that substantially
reduced the expected margins on the unsold units. In determining the fair value of this
investment and assessing whether any identified impairment was other-than-temporary,
significant estimates and considerable judgment were involved. These estimates and judgments

were based, in part, on our current and future evaluation of economic conditions in general, as
well as Bay Holdings’ current and future plans. These impairment calculations contain additional
uncertainties because they also require management to make assumptions and apply judgments
to, among others, estimates of future cash flows, probabilities related to various cash flow
scenarios, and appropriate discount rates. The impairment losses recorded by Bay Holdings
required Bay Holdings’ management to estimate total sales revenues that will be received by the
project, as well as estimating the number of buyers of units from which nonrefundable deposits
have been received that will not close on the purchase of their units. Changes in these and other
assumptions could affect the projected operational results of Bay Holdings and, accordingly, may
require valuation adjustments to our investment in Bay Holdings that could materially impact
our financial condition or our future operating results.

(cid:127) Our long-lived assets are reviewed for impairment if events or circumstances indicate that the
carrying amount of the long-lived asset may not be recoverable. Management has evaluated
certain long-lived assets for impairment, and has recognized impairment charges related to
deferred development costs of $14.2 in 2009 and $10.6 million in 2008 for costs that are not
expected to be recovered due to the delay of the start of construction of new development
projects and by the decision to not proceed with certain projects in 2009 and 2008 caused by,
among other things, the economic recession, a worsening credit market, reduced demand for
real estate, and declining consumer confidence. These asset impairment loss analyses contain
uncertainties because they require management to make assumptions and apply considerable
judgments to, among others, estimates of the timing and amount of future cash flows, expected
useful lives of the assets, uncertainty about future events, including changes in economic
conditions, changes in operating performance, changes in the use of the assets, and ongoing
costs of maintenance and improvements of the assets, and thus, the accounting estimates may
change from period to period. If management uses different assumptions or if different
conditions occur in future periods, our financial condition or future operating results could be
materially impacted.

(cid:127) We have a derivative liability related to $40 million of senior secured notes that are convertible

into shares of our common stock that is recorded at fair value and interest rate swap agreements
that were designed to reduce future cash flow variability that is also recorded at fair value. The
fair values are calculated using ‘‘level 2’’ inputs as defined in ASC Topic 820. While management
believes that the inputs are reasonable and consistent, the fair values recorded can vary
significantly depending on the assumptions made.

(cid:127) Deferred development costs, principally predevelopment costs and offsite development costs
related to various projects in the planning stages by our Community Development segment,
totaled $7.6 million at year-end 2009. Based on our future development plans for the Kapalua
Resort and other properties such as Kapalua Mauka, The Village at Kapalua, Pulelehua, and
Hali‘imaile Town, and the estimated value of these future projects, management has concluded
that these deferred costs will be recoverable from future development projects. The volatility of
this assumption arises because of the long-term nature of our development plans and the
uncertainty of when or if certain parcels will be developed.

(cid:127) Pension expense for our two defined benefit pension plans utilize actuarial estimates of

employees’ expected service period, age at retirement, and compensation levels, as well as
estimates as to employee turnover, the long term rate of return on investments and other
factors. Other post retirement benefits for life insurance and health care utilize actuarial
estimates as to the retirees’ life span, the cost of future health insurance premiums and
utilization of health benefits by the employees. In addition, both pension and other post
retirement expenses are sensitive to the discount rate utilized. This rate should be commensurate
to the interest rate yield of a high quality corporate fixed income investment portfolio. These

assumptions are subject to the risk of change as they require significant judgment and have
inherent uncertainties that management or its consulting actuaries may not control or anticipate.
As of December 31, 2009, the fair value of the assets of our defined benefit plans totaled
approximately $38.6 million, compared with $31.7 million as of December 31, 2008. The
recorded net pension liability was approximately $21.4 million as of December 31, 2009,
compared to a net pension liability of $28.0 million as of December 31, 2008.

(cid:127) Stock-based compensation expense is calculated based on assumptions as to the expected life of
the options, price volatility, risk-free interest rate and expected forfeitures. While management
believes that the assumptions made are appropriate, compensation expense recorded currently
and future compensation expense would vary based on the assumptions used.

(cid:127) Management calculates the income tax provision, current and deferred income taxes along with
the valuation allowance based upon various complex estimates and interpretations of income tax
laws and regulations. Deferred tax assets are reduced by a valuation allowance to the extent that
it is more likely than not that they will not be realized. To the extent we begin to generate
taxable income in future years and it is determined the valuation allowance is no longer
required, the tax benefit for the remaining deferred tax assets will be recognized at such time.
As of December 31, 2009, valuation allowances of $71 million have been established primarily
for tax credits, net operating loss carryforwards, and accrued retirement benefits to reduce future
tax benefits expected to be realized.

(cid:127) 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. We record accruals for legal matters when the information available indicates that
it is probable that a liability has been incurred and the amount of the loss can be reasonably
estimated. We make adjustments to these accruals to reflect the impact and status of
negotiations, settlements, rulings, advice of counsel and other information and events that may
pertain to a particular matter. Predicting the outcome of claims and lawsuits and estimating
related costs and exposure involves substantial uncertainties that could cause actual costs to vary
materially from those estimates. In making determinations of likely outcomes of litigation
matters, we consider many factors. These factors include, but are not limited to, the nature of
specific claims including unasserted claims, our experience with similar types of claims, the
jurisdiction in which the matter is filed, input from outside legal counsel, the likelihood of
resolving the matter through alternative dispute resolution mechanisms and the matter’s current
status. A detailed discussion of significant litigation matters and contingencies is contained in
Note 16 to our consolidated financial statements.

(cid:127) See Note 1 to consolidated financial statements for a full description of the impact of recently
issued accounting standards including the expected dates of adoption and estimated effects on
our results of operations and financial condition.

IMPACT OF INFLATION AND CHANGING PRICES

Most of the land owned by us was acquired from 1911 to 1932 and is carried at cost. A small
portion of ‘‘Real Estate’’ represents land cost. At Kapalua, some of the fixed assets were constructed
and placed in service in the mid-to-late 1970s. Depreciation expense would be considerably higher if
fixed assets were stated at current cost.

Item 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Board of Directors and Stockholders of
Maui Land & Pineapple Company, Inc.
Kahului, Hawaii

We have audited the accompanying consolidated balance sheets of Maui Land & Pineapple
Company, Inc. and subsidiaries (the ‘‘Company’’) as of December 31, 2009 and 2008, and the related
consolidated statements of operations and comprehensive loss, stockholders’ equity (deficiency), and
cash flows for the years then ended. Our audits also included the financial statement schedule listed in
the Index at Item 15. We also have audited the Company’s internal control over financial reporting as
of December 31, 2009, based on criteria established in Internal Control—Integrated Framework issued by
the Committee of Sponsoring Organizations of the Treadway Commission. The Company’s management
is responsible for these financial statements and financial statement schedule, for maintaining effective
internal control over financial reporting, and for its assessment of the effectiveness of internal control
over financial reporting, included in the accompanying Management’s Annual Report on Internal Control
over Financial Reporting. Our responsibility is to express an opinion on these financial statements and
financial statement schedule and an opinion on the Company’s internal control over financial reporting
based on our audits.

We conducted our audits in accordance with the standards of the Public Company Accounting
Oversight Board (United States). Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material misstatement and
whether effective internal control over financial reporting was maintained in all material respects. Our
audits of the financial statements included examining, on a test basis, evidence supporting the amounts
and disclosures in the financial statements, assessing the accounting principles used and significant
estimates made by management, and evaluating the overall financial statement presentation. Our audit
of internal control over financial reporting included obtaining an understanding of internal control over
financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the
design and operating effectiveness of internal control based on the assessed risk. Our audits also
included performing such other procedures as we considered necessary in the circumstances. We believe
that our audits provide a reasonable basis for our opinions.

A company’s internal control over financial reporting is a process designed by, or under the

supervision of, the company’s principal executive and principal financial officers, or persons performing
similar functions, and effected by the company’s board of directors, management, and other personnel
to provide reasonable assurance regarding the reliability of financial reporting and the preparation of
financial statements for external purposes in accordance with generally accepted accounting principles.
A company’s internal control over financial reporting includes those policies and procedures that
(1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the
transactions and dispositions of the assets of the company; (2) provide reasonable assurance that
transactions are recorded as necessary to permit preparation of financial statements in accordance with
generally accepted accounting principles and that receipts and expenditures of the company are being
made only in accordance with authorizations of management and directors of the company; and
(3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition,
use, or disposition of the company’s assets that could have a material effect on the financial statements.

Because of the inherent limitations of internal control over financial reporting, including the
possibility of collusion or improper management override of controls, material misstatements due to
error or fraud may not be prevented or detected on a timely basis. Also, projections of any evaluation
of the effectiveness of the internal control over financial reporting to future periods are subject to the

risk that the controls may become inadequate because of changes in conditions, or that the degree of
compliance with the policies or procedures may deteriorate.

In our opinion, the consolidated financial statements referred to above present fairly, in all
material respects, the financial position of Maui Land & Pineapple Company, Inc. and subsidiaries as
of December 31, 2009 and 2008, and the results of their operations and their cash flows for the years
then ended, in conformity with accounting principles generally accepted in the United States of
America. Also, in our opinion, such financial statement schedule, when considered in relation to the
basic consolidated financial statements taken as a whole, presents fairly, in all material respects, the
information set forth therein. Also, in our opinion, the Company maintained, in all material respects,
effective internal control over financial reporting as of December 31, 2009, based on the criteria
established in Internal Control—Integrated Framework issued by the Committee of Sponsoring
Organizations of the Treadway Commission.

As discussed in Note 4 to the consolidated financial statements, the Company adopted new

accounting guidance impacting its revenue recognition on sales of condominiums effective on
January 1, 2008.

The accompanying consolidated financial statements for the year ended December 31, 2009 have

been prepared assuming that the Company will continue as a going concern. As discussed in Note 1 to
the consolidated financial statements, the Company’s recurring losses and negative cash flows from
operations and deficiency in stockholders’ equity at December 31, 2009 raise substantial doubt about
the Company’s ability to continue as a going concern. Management’s plans with regard to these matters
are also described in Note 1. The consolidated financial statements do not include any adjustments that
might result from the outcome of this uncertainty.

/s/ DELOITTE & TOUCHE LLP

Honolulu, Hawaii
March 26, 2010

MAUI LAND & PINEAPPLE COMPANY, INC. & SUBSIDIARIES

CONSOLIDATED STATEMENTS OF OPERATIONS
AND COMPREHENSIVE LOSS

Year Ended December 31,

2009

2008

(in thousands except
share amounts)

OPERATING REVENUES
Product revenues . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Service revenues . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Total Operating Revenues . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

OPERATING COSTS AND EXPENSES
Cost of product revenues . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Cost of service revenues . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Selling and marketing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
General and administrative . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Impairment—deferred development costs (Note 3) . . . . . . . . . . . . . . . . . . . .

Total Operating Costs and Expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Operating Loss . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Equity in losses of affiliates (Note 4) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Interest expense . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Interest income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Loss from Continuing Operations Before Income Taxes . . . . . . . . . . . . . . . .
Income Tax Benefit . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Loss from Continuing Operations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Loss from Discontinued Operations (Note 7) (net of income tax benefit of

24,884
25,470

50,354

9,700
38,182
3,855
20,198
14,286

86,221

(35,867)
(47,187)
(10,452)
492

(93,014)
(4,583)

(88,431)

$46 and $1,202) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(34,850)

NET LOSS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Pension Benefit Adjustment net of taxes of $0 . . . . . . . . . . . . . . . . . . . . . . .

(123,281)
13,350

18,418
32,636

51,054

5,606
40,596
9,453
29,333
10,634

95,622

(44,568)
(18,839)
(2,436)
553

(65,290)
(11,714)

(53,576)

(25,820)

(79,396)
(16,778)

COMPREHENSIVE LOSS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

$ (109,931) $ (96,174)

LOSS PER COMMON SHARE—BASIC AND DILUTED

Continuing Operations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Discontinued Operations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Net Loss . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(11.00) $
(4.33)

(15.33) $

(6.73)
(3.25)

(9.98)

Average Common Shares Outstanding

Basic and Diluted . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

8,041,403

7,959,472

See Notes to Consolidated Financial Statements

MAUI LAND & PINEAPPLE COMPANY, INC. & SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

December 31,

2009

2008

(in thousands)

ASSETS
CURRENT ASSETS

Cash and cash equivalents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Accounts receivable, less allowance of $452 and $658 for doubtful accounts . . . . . . . . . . . . . . . . . .
Refundable income taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

1,881
3,684
4,331

$ 13,668
5,509
4,662

Inventories

Pineapple products . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Real estate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Merchandise, materials, and supplies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Prepaid expenses and other assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Assets held for sale (Note 2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Total Current Assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

PROPERTY

Land . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Land improvements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Buildings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Machinery and equipment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Construction in progress . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Total Property . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Less accumulated depreciation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Net Property . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

INVESTMENT IN AFFILIATES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
OTHER ASSETS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

—
1,721
1,666
377
15,227

28,887

8,608
56,899
52,092
23,208
4,096

144,903
60,189

84,714

—
14,447

807
3,254
5,676
600
18,963

53,139

9,905
57,131
57,290
82,814
5,102

212,242
96,002

116,240

41,683
37,138

TOTAL . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

$ 128,048

$248,200

LIABILITIES & STOCKHOLDERS’ EQUITY
CURRENT LIABILITIES

Current portion of long-term debt . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Current portion of capital lease obligations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Trade accounts payable . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Payroll and employee benefits
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Income taxes payable . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Deferred revenues . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Contract termination accruals . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other accrued liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

— $ 45,000
1,050
8,183
5,525
1,492
—
—
6,334

1,817
6,581
4,947
2,626
4,267
3,300
4,505

Total Current Liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

28,043

67,584

LONG-TERM LIABILITIES

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Long-term debt
Capital lease obligations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Accrued retirement benefits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
PGC deferred credit (Note 8)
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other noncurrent liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

94,224
600
28,076
46,338
7,708

88,959
1,982
43,798
—
14,189

Total Long-Term Liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

176,946

148,928

COMMITMENTS AND CONTINGENCIES (Note 16)
STOCKHOLDERS’ EQUITY (DEFICIENCY)

Common stock—no par value, 23,000,000 and 9,000,000 shares authorized, 8,087,334 and 8,021,248

shares issued and outstanding . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Additional paid in capital
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Retained earnings (Accumulated deficit) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Accumulated other comprehensive loss . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

35,437
9,019
(116,723)
(4,674)

34,791
8,363
6,558
(18,024)

Stockholders’ Equity (Deficiency) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(76,941)

31,688

TOTAL . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

$ 128,048

$248,200

See Notes to Consolidated Financial Statements

MAUI LAND & PINEAPPLE COMPANY, INC. & SUBSIDIARIES

CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY (DEFICIENCY)

For the Two Years Ended December 31, 2009

(in thousands)

Common Stock

Amount

Additional
Paid in
Capital

Retained
Earnings

Accumulated
Other
Comprehensive
Income (Loss)

Total

7,959

$34,168

$ 6,769

$ 90,576

$ (1,246)

$ 130,267

(4,622)

(16,778)
14
2,752
—
(498)

(51)
(79,396)

31,688

13,350
1,496
—
(194)
(123,281)

Balance, January 1, 2008 . . . . . . . .
Cumulative impact of adoption of

accounting principle, net of tax .

Pension benefits adjustment

(Note 10) . . . . . . . . . . . . . . . . .
Stock option exercises . . . . . . . . . .
Share-based compensation expense
Vested restricted stock issued . . . .
Shares cancelled to pay tax liability
Tax benefit deficiency from stock

compensation . . . . . . . . . . . . . .
Net loss . . . . . . . . . . . . . . . . . . . .

(4,622)

(16,778)

93
(32)

1,107
(498)

2,752
(1,107)

(51)

(79,396)

Balance, December 31, 2008 . . . . .

8,021

34,791

8,363

6,558

(18,024)

Pension benefits adjustment

(Note 10) . . . . . . . . . . . . . . . . .
Share-based compensation expense
Vested restricted stock issued . . . .
Shares cancelled to pay tax liability
Net loss . . . . . . . . . . . . . . . . . . . .

85
(19)

840
(194)

1,496
(840)

(123,281)

13,350

Balance, December 31, 2009 . . . . .

8,087

$35,437

$ 9,019

$(116,723)

$ (4,674)

$ (76,941)

See Notes to Consolidated Financial Statements

MAUI LAND & PINEAPPLE COMPANY, INC. & SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

OPERATING ACTIVITIES
Net Loss
Adjustments to reconcile net loss to net cash used in operating activities

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Depreciation and amortization . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Share based compensation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Equity in losses of affiliates . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Loss on property disposals . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Deferred income taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Change in derivative liabilities and accretion of interest . . . . . . . . . . . . . . . . . . . . . . .
Impairment charges
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Changes in operating assets and liabilities:

Accounts receivable . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Inventories . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Trade accounts payable . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Income taxes payable . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other operating assets and liabilities

Years Ended
December 31,

2009

2008

(in thousands)

$(123,281) $ (79,396)

25,026
1,497
47,187
3,048
—
(114)
17,941

2,059
6,350
(1,724)
1,465
4,675

13,131
2,752
18,839
1,256
(4,085)
(4,992)
10,634

3,810
1,520
(4,564)
(4,162)
180

NET CASH USED IN OPERATING ACTIVITIES . . . . . . . . . . . . . . . . . . . . . . . . . . .

(15,871)

(45,077)

INVESTING ACTIVITIES

Purchases of property . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Proceeds from disposals of property . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Contributions to affiliates . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Proceeds for other assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(1,201)
3,397
—
1,551

(13,909)
2,222
(8,156)
(4,106)

NET CASH PROVIDED BY (USED IN) INVESTING ACTIVITIES . . . . . . . . . . . . . .

3,747

(23,949)

FINANCING ACTIVITIES

Proceeds from long-term debt . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Payments of long-term debt . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Payments on capital lease obligations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Net proceeds from PGC (Note 8) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Reduction of PGC deferred credit . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Debt issuance cost and other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

22,200
(65,100)
(1,166)
48,076
(1,326)
(2,347)

NET CASH PROVIDED BY FINANCING ACTIVITIES . . . . . . . . . . . . . . . . . . . . . . .

337

NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS . . . . . . . . . . .
CASH AND CASH EQUIVALENTS AT BEGINNING OF YEAR . . . . . . . . . . . . . . . .

(11,787)
13,668

153,400
(70,304)
(721)
—
—
(1,672)

80,703

11,677
1,991

CASH AND CASH EQUIVALENTS AT END OF YEAR . . . . . . . . . . . . . . . . . . . . . .

1,881

$ 13,668

SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION:
Cash paid (received) during the year:

Interest (net of amounts capitalized) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Income taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

SUPPLEMENTAL NON-CASH INVESTING AND FINANCING ACTIVITIES:

8,336

$
4,445
$ (5,156) $ (4,229)

(cid:127) Property acquired under capital leases was $698,000 and $1,532,000 in 2009 and 2008,

respectively.

(cid:127) Amounts included in trade accounts payable for additions to property and other investments

totaled $1,331,000 and $1,209,000, at December 31, 2009 and 2008, respectively.

See Notes to Consolidated Financial Statements

MAUI LAND & PINEAPPLE COMPANY, INC. & SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

CONSOLIDATION

The consolidated financial statements include the accounts of Maui Land & Pineapple

Company, Inc. and its subsidiaries, primarily Maui Pineapple Company, Ltd. (MPC) and Kapalua Land
Company, Ltd. The Company’s principal operations include resort operations and real estate
development and sales. Significant intercompany balances and transactions have been eliminated. The
production and sale of pineapple products was terminated at December 31, 2009 and is reported as
discontinued operations in 2009 (see Note 7).

LIQUIDITY

The Company incurred a loss from continuing operations of $88.4 million and negative cash flow

from operations of $15.9 million for the year ended December 31, 2009. Loss from continuing
operations included impairment charges totaling $39.2 million related to investment in affiliates,
deferred development, and real estate inventories. At December 31, 2009, the Company had borrowings
of $96.6 million outstanding; and approximately $13.5 million available under existing lines of credit,
$1.9 million in cash and cash equivalents; and a deficiency in stockholders’ equity (total liabilities
exceeded total assets) of $76.9 million.

In March 2011, $75 million of the Company’s available credit matures, of which $59.9 million was

outstanding at December 31, 2009. This credit is comprised of two revolving credit facilities, both of
which have financial covenants requiring a minimum of $8 million in liquidity and limitations on new
indebtedness. Failure to satisfy any of the covenants or to otherwise default under either of the credit
agreements would result in the outstanding borrowings becoming immediately due and would also
cause a default under the other credit agreement and the $40 million senior secured convertible notes
issued in July 2008. If the Company defaults under the senior secured convertible notes, the holders of
such notes may require the Company to redeem the notes, in which case the Company would also be
required to pay a redemption premium equal to 115% multiplied by (i) the principal and accrued and
unpaid interest under the note, or (ii) the highest closing sale price of the Company’s common stock
during the period between the event of default and delivery of redemption notice multiplied by the
number of shares of the Company’s common stock into which a note is then convertible.

The Company’s cash outlook for the next twelve months and ability to continue to meet its
financial covenants is highly dependent on selling certain real estate assets in a difficult market and
raising new equity capital. If the Company is unable to meet its financial covenants resulting in the
borrowings becoming immediately due, the Company would not have sufficient liquidity to repay such
outstanding borrowings. In addition, the Company currently has a commitment to purchase the spa,
beach club improvements and the sundry store (the ‘‘Amenities’’) from Kapalua Bay Holdings, LLC
(‘‘Bay Holdings’’) at actual construction costs of approximately $35 million. The Company is in
discussions with the other members of Bay Holdings to negotiate the terms of the purchase and sale
agreement including the purchase price and payment terms, and are discussing whether the Company
will even be required to purchase the Amenities. The other members of Bay Holdings are generally
open to revisions to the purchase terms or relieving the Company from its commitment to purchase the
Amenities in return for the Company’s best efforts to continue to operate the Amenities; however, final
terms of the purchase of the Amenities remain to be resolved with the other members and lenders of
Bay Holdings. In June 2009, we announced that due to a lack of a title sponsor, we were unable to
hold the 2009 Ladies Professional Golf Association (LPGA) event that was scheduled for October. This

has resulted in a dispute with the LPGA, which can be resolved by mediation and if necessary by
binding arbitration. By agreement between the parties, mediation has been suspended through October
2010 and we expect to pay $700,000 of which 50% will be applied towards sponsorship of an event if
the parties are able to structure a future event. In addition, in September 2009, M. Yamamura and
Sons, Inc. (‘‘Yamamura’’) filed a lawsuit against the Company which alleges that the Company
materially breached the Maui Gold Pineapple Planting and Fruit Purchase Agreement (the ‘‘Planting
Agreement’’) by not providing a planting schedule for 2009 and by asking Yamamura to cease planting
pineapple for the Company, and that the Company unilaterally restricted and impaired the value of
Yamamura’s benefits under the Planting Agreement (see Note 16). The Company is also subject to
other commitments and contingencies that could negatively impact its future cash flows as described in
Note 16. These circumstances raise substantial doubt about the Company’s ability to continue as a
going concern. There can be no assurance that the Company will be able to successfully achieve its
initiatives discussed below in order to continue as a going concern. The accompanying consolidated
financial statements do not include any adjustments that might result should the Company be unable to
continue as a going concern.

In response to these circumstances, the Company is undertaking several financial and strategic
initiatives to reduce cash commitments and generate cash flow from a variety of sources, including the
sale of several real estate assets. In March 2009, the Company sold the Plantation Golf Course (PGC)
for $50 million in cash and repaid $45 million of debt. In 2009, the Company concluded the sale of five
other real properties that resulted in total cash proceeds (net of selling costs) of $14.5 million, and in
October 2009, the Company entered into revised revolving credit agreements. The Company’s
$45 million line of credit was increased to $50 million, the maturity extended from March 2010 to
March 2011, and the minimum liquidity requirement was reduced from $10 million to $8 million. The
maturity and liquidity covenant of the Company’s $25 million line of credit was similarly amended. In
December 2009, the Company entered into agreements with third parties to assume the operation and
management of The Kapalua Villas, the Kapalua Adventures activities and the security and shuttle
operations for the Kapalua Resort. The Company’s Agriculture segment operations were discontinued
as of December 31, 2009 and agreements were consummated with an unrelated closely held company
to continue growing and marketing the Company’s Maui Gold(cid:3) pineapple (Note 7). The Company has
renegotiated agreements to eliminate approximately $6 million of 2009 cash commitments (net of
cancellation fees) into 2010 and later. In addition, the Company has taken several other actions to
reduce cash outflows including reducing its total number of employees from approximately 800 at
December 31, 2008 to 260 at the end of 2009, as well as other measures to reduce operating expenses.
The Company is actively in the process of attempting to sell several selected real estate assets to
provide additional liquidity and to further reduce debt. In December 2009, the Company filed a
registration statement to initiate an equity financing transaction.

COMPREHENSIVE INCOME

Comprehensive income includes all changes in Stockholders’ Equity (Deficiency), except those

resulting from capital stock transactions. Comprehensive income includes the pension benefit
adjustment (see Note 10).

CASH AND CASH EQUIVALENTS

Cash and cash equivalents include cash on hand, deposits in banks and commercial paper with

original maturities of three months or less at the time of purchase.

ALLOWANCE FOR DOUBTFUL ACCOUNTS

Receivables are recorded net of an allowance for doubtful accounts. The Company estimates

future write-offs based on delinquencies, credit ratings, aging trends, and historical experience. The
Company believes the allowance for doubtful accounts is adequate to cover anticipated losses; however,
significant deterioration in any of the aforementioned factors or in general economic conditions could
change these expectations, and accordingly, the Company’s financial condition and/or its future
operating results could be materially impacted. Credit is extended after evaluating creditworthiness and
no collateral generally is required from customers, except for notes receivable taken on real estate
sales.

INVENTORIES

Real estate inventories are stated at the lower of cost or fair value less cost to sell. Real estate

inventories include properties developed specifically for sale as well as undeveloped land parcels that
the Company has determined will not be developed or used in operations. Merchandise, materials and
supplies are stated at cost, not in excess of fair value, using an average cost method. Merchandise
inventories are retail inventories held for sale at the Kapalua Resort. Materials and supply inventories
include amounts for the Resort segment and at December 31, 2008, the Agriculture segment.

ASSETS HELD FOR SALE

Assets are reported as held for sale when the assets are being actively marketed and available for

immediate sale in their present condition, and the sale is probable and the transfer of the asset is
expected to qualify for recognition as a completed sale within one year. Assets held for sale are stated
at the lower of net book value or estimated fair value less cost to sell.

INVESTMENT IN AFFILIATES

Investments in affiliates, partnerships, and limited liability companies, over which the Company

exercises significant influence, but not control, are accounted for using the equity method.

Investments in unconsolidated affiliates are reviewed for impairment whenever there is evidence of

a loss in value below the carrying amount. An investment is written down to fair value if the
impairment is considered to be other-than-temporary. In evaluating the fair value of an investment, the
Company reviews the discounted projected cash flows associated with the investment and other relevant
information. In evaluating whether an impairment is other-than-temporary, the Company considers all
available information, including the length of time and extent of the impairment, the financial condition
and near-term prospects of the affiliate, the Company’s ability and intent to hold the investment for a
period of time sufficient to allow for any anticipated recovery in fair value, and projected industry and
economic trends, among others. In 2009 and 2008, the Company evaluated its investment in Bay
Holdings for impairment. As a result of this process, the Company recorded other-than-temporary
impairment losses of $21.3 million and $37.8 million, in 2009 and 2008, respectively. In determining the
fair value of an investment and assessing whether any identified impairment is other-than-temporary,
significant estimates and considerable judgments are involved. These estimates and judgments are
based, in part, on the Company’s current and future evaluation of economic conditions in general, as
well as Bay Holdings’ current and future plans.

OTHER ASSETS

Deferred costs are primarily real estate development costs related to various projects at the

Kapalua Resort that will be allocated to future development projects.

PROPERTY AND DEPRECIATION

Property is stated at cost. Major replacements, renewals and betterments are capitalized while
maintenance and repairs that do not improve or extend the life of an asset are charged to expense as
incurred. When property is retired or otherwise disposed of, the cost of the property and the related
accumulated depreciation are written off and the resulting gains or losses are included in income.
Depreciation is provided over the estimated useful lives of the respective assets using the straight-line
method generally over three to 25 years. Depreciation expense was $23,494,000 for 2009 and
$12,762,000 for 2008.

LONG-LIVED ASSETS

Long-lived assets are reviewed for impairment whenever events or changes in circumstances
indicate that the carrying amount of an asset may not be recoverable. When such events or changes
occur, an estimate of the future cash flows expected to result from the use of the assets and their
eventual disposition is made. If the sum of such expected future cash flows (undiscounted and without
interest charges) is less than the carrying amount of the asset, an impairment loss is recognized in an
amount by which the assets’ net book values exceed their fair value. The Company has evaluated
certain long-lived assets for impairment; however, no impairment charges were recorded as a result of
this process, other than impairment charges recorded for deferred development costs (see Note 3).
These asset impairment loss analyses require management to make assumptions and apply considerable
judgments to, among others, estimates of the timing and amount of future cash flows, expected useful
lives of the assets, uncertainty about future events, including changes in economic conditions, changes
in operating performance, changes in the use of the assets, and ongoing cost of maintenance and
improvements of the assets, and thus, the accounting estimates may change from period to period. If
management uses different assumptions or if different conditions occur in future periods, the
Company’s financial condition or its future operating results could be materially impacted.

DERIVATIVE FINANCIAL INSTRUMENTS

The Company accounts for all derivative financial instruments, such as interest rate swap

agreements and the derivative liability related to its convertible debt, by recognizing the derivative on
the balance sheet at fair value, regardless of the purpose or intent of holding them. Changes in the fair
value are recognized in interest expense.

EMPLOYEE BENEFIT PLANS

The Company’s policy is to fund pension cost at a level at least equal to the minimum amount
required under federal law, but not more than the maximum amount deductible for federal income tax
purposes.

The over-funded or under-funded status of the Company’s defined benefit postretirement plans are

recorded as an asset or liability in its balance sheet and changes in the funded status of the plans are
recorded in the year in which the changes occur though comprehensive income. The pension asset or
liability is the difference between the plan assets at fair value and the projected benefit obligation as of
year end.

Deferred compensation plans for certain management employees provide for specified payments
after retirement. The present value of estimated payments to be made is accrued over the period of
active employment. In 1998, future benefits under these plans were terminated (see Note 10).

The estimated cost of providing postretirement health care and life insurance benefits is accrued

over the period employees render the necessary services.

REVENUE RECOGNITION

Product revenues primarily include the sales of retail merchandise at the Kapalua Resort and sales

of real estate inventories. Service revenues primarily include revenues from golf course operations,
revenues from the Kapalua Villas rental program, lease revenues and real estate commission income.

Sales of real estate are recognized as revenues in the period in which sufficient cash has been
received, collection of the balance is reasonably assured and risks of ownership have passed to the
buyer. The Company uses the percentage-of-completion method to recognize revenues and profits from
the sale of residential land parcels where the Company is obligated to construct improvements (roads,
sidewalks, drainage, and utilities) after the closing of the sale. Under this method, revenues are
recognized over the construction improvement period on the basis of costs incurred as a percentage of
expected total costs to be incurred. Bay Holdings also used the percentage-of-completion method for its
sales of condominiums (see Note 4), until construction was substantially completed in June 2009.

Rental income is recognized on a straight-line basis over the terms of the leases. Also included in

rental income are certain percentage rents determined in accordance with the terms of the leases.
Rental income arising from tenant rents that are contingent upon the sales of the tenant exceeding a
defined threshold are recognized only after the contingency has been resolved (e.g., sales thresholds
have been achieved).

Revenues from other activities are recognized when delivery has occurred or services have been

rendered, the sales price is fixed or determinable, and collectibility is reasonably assured.

INTEREST CAPITALIZATION

Interest costs are capitalized during the construction period of major capital projects. Interest costs

incurred in 2009 and 2008 were $10,470,000 and $2,779,000, respectively, of which $18,000 and
$343,000, respectively, were capitalized.

ADVERTISING

The costs of advertising activities are expensed as incurred. Advertising costs are included in
shipping and marketing costs in the consolidated statements of operations. Advertising expense totaled
$1,443,000 in 2009 and $3,765,000 in 2008.

LEASES

Leases that transfer substantially all of the benefits and risks of ownership of the property are

accounted for as capital leases. Amortization of property under capital leases is included in
depreciation expense. Other leases are accounted for as operating leases. Rentals under operating
leases are recognized on a straight-line basis over the life of the lease.

INCOME TAXES

The Company accounts for uncertain tax positions in accordance with the provisions of Financial

Accounting Standards Board (FASB) Accounting Standards Codification (ASC) Topic 740 (formerly
FASB Interpretation No. 48, Accounting for Uncertainty in Income Taxes). This interpretation prescribes
a recognition threshold and measurement attribute for the financial statement recognition and
measurement of a tax position taken or expected to be taken in a tax return (see Note 13).

The Company’s provision for income taxes is calculated using the liability method. Deferred

income taxes are provided for all temporary differences between the financial statement and income tax
bases of assets and liabilities using tax rates enacted by law or regulation. A valuation allowance is

established for deferred income tax assets if management believes that it is more likely than not that
some portion or all of the asset will not be realized through future taxable income.

SHARE-BASED COMPENSATION PLANS

The Company accounts for share-based compensation, including grants of employee stock options,

as compensation expense over the service period (generally the vesting period) in the consolidated
financial statements based on their fair values. The impact of forfeitures that may occur prior to vesting
is estimated and considered in the amount recognized.

USE OF ESTIMATES

The preparation of financial statements in conformity with accounting principles generally accepted

in the United States of America (GAAP) requires management to make estimates and assumptions
that affect the reported amounts of assets and liabilities and disclosure of contingent assets and
liabilities at the date of the consolidated financial statements and the reported amounts of revenues
and expenses during the reporting periods. Future actual amounts could differ from these estimates.

RISKS AND UNCERTAINTIES

Factors that could adversely impact the Company’s future operations or financial results include,

but are not limited to, the following: continued unfavorable economic conditions in Hawaii and the
mainland United States that result in a further decline in the market demand for the Company’s
products and services; numerous risks related to the Company’s investments in real property which
could be impacted by unfavorable economic conditions, interest rates, and availability of financing;
untimely completion of land development projects within forecasted timing and budget; inability to
obtain land use entitlements at a reasonable cost; unfavorable legislative decisions by the County of
Maui; the cyclical market demand for luxury real estate on Maui; increased competition from other
luxury real estate developers on Maui; the Company’s limited guarantees to complete development of
the Residences at Kapalua Bay project; failure of joint venture partners to perform; environmental
regulations; adverse weather conditions and natural disasters; inability to find a title sponsor for the
Company’s LPGA or other events; availability of reliable and low-cost transportation to serve
customers; being located apart from the United States mainland makes the Company more sensitive to
economic factors; failure to comply with restrictive financial covenants in the Company’s credit
arrangements; an inability to achieve the Company’s short and long-term goals and cash flow
requirements; future impairment charges of long-lived assets or investments; and inadequate internal
controls.

NEW ACCOUNTING PRONOUNCEMENTS

In June 2009, the FASB issued FASB Statement No. 167, Amendments to FASB Interpretation
No. 46R (not yet incorporated into the ASC). FASB Statement No. 167 amends the consolidation
guidance applicable to variable interest entities and requires enhanced disclosures about an enterprise’s
involvement in a variable interest entity. FASB Statement No. 167 also requires ongoing assessments of
whether an enterprise is the primary beneficiary of a variable interest entity. FASB Statement No. 167
is effective beginning January 1, 2010. The Company is currently reviewing the effect of FASB
Statement No. 167 will have on its consolidated financial statements.

LOSS PER COMMON SHARE

Basic loss per share is computed by dividing net income or loss by the weighted-average number of

common shares outstanding. Diluted loss per share is computed similar to basic loss per share except
that the denominator is increased to include the number of additional common shares that would have
been outstanding if the dilutive potential common shares from share-based compensation arrangements
had been issued.

Potentially dilutive shares arise from non-qualified stock options to purchase common stock,
non-vested restricted stock and common stock issuable upon assumed conversion of convertible debt
(see Note 5). The treasury stock method is applied to determine the number of potentially dilutive
shares for nonvested restricted stock and stock options assuming that the shares of nonvested restricted
stock are issued for an amount based on the grant date market price of the shares and that the
outstanding stock options are exercised. Convertible debt is assumed to be converted by applying the
if-converted method. These amounts were excluded because the options’ effect would be anti-dilutive.

Basic . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Diluted . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Potentially Dilutive . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

8,041,403
8,041,403
1,333,674

7,959,472
7,959,472
587,902

Year Ended December 31,

2009

2008

RECLASSIFICATIONS

Deferred revenues included in the consolidated balance sheet at December 31, 2008, were
reclassified to other noncurrent liabilities to conform to the presentation in the consolidated balance
sheet at December 31, 2009. Stock option exercises included in the consolidated statement of cash
flows for the year ended December 31, 2008, were reclassified to Debt issuance cost and other to
conform to the presentation in the consolidated statement of cash flows for the year ended
December 31, 2009.

2. ASSETS HELD FOR SALE

At December 31, 2009 and 2008, assets held for sale included the Company’s property in Kahului,

Maui (27 acres). These assets include the site of the current administrative offices, the former
corporate office, and the former agriculture facilities. In 2009, these parcels were written down to their
estimated fair value less cost to sell, resulting in impairment charges of $3.7 million (Note 6). At
December 31, 2009, assets held for sale also included equipment formerly used in the Company’s
Agriculture operations that met the criteria of held for sale.

3. OTHER ASSETS

Other Assets at December 31, 2009 and 2008 consisted of the following:

Deferred costs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Notes receivable from real estate and other sales . . . . . . . . . . . .
Note receivable from affiliate . . . . . . . . . . . . . . . . . . . . . . . . . .
Deferred compensation plan contributions . . . . . . . . . . . . . . . . .
Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

$ 9,445
1,886
—
—
3,116

$25,436
1,076
3,600
3,095
3,931

Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

$14,447

$37,138

2009

2008

(in thousands)

In the fourth quarter of 2008, due to uncertainty in the real estate markets and to cash flow
constraints, the Company delayed the start of construction of new development projects until internal
and external conditions improve. Deferred development costs and construction in progress totaling
$10.6 million were written off in the fourth quarter of 2008. Costs written off consisted of development
plans that were abandoned and other pre-development work that is not expected to benefit existing
projects and is not recoverable. In 2009, additional deferred development costs totaling $14.2 million

were written off as changing market conditions resulted in several development plans being considered
by management as unfeasible as designed.

In 2009, the Company’s note receivable from Bay Holdings of $3.6 million was written down to

zero as the Company does not expect to recover any amounts from Bay Holdings. See Note 4.

The Company maintained a non-qualified deferred compensation plan whereby management could

make pre-tax deferrals of their salary and any cash bonus. Effective December 31, 2008, the plan
ceased operations and all of the funds in the plan were distributed to the participants in February 2009.

INVESTMENT IN AFFILIATES

The Company’s investment in affiliates consists of the following as of December 31, 2009 and

2008:

Kapalua Bay Holdings, LLC . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

2009

2008

(in thousands)
$41,683
$-0-

The Company has a 51% ownership interest in Bay Holdings, which is the sole member of

Kapalua Bay LLC, (‘‘Kapalua Bay’’). The other members of Bay Holdings through wholly owned
affiliates are Marriott International Inc. (‘‘Marriott’’), 34%, and Exclusive Resorts LLC (ER), 15%. A
41% shareholder and director (as of December 31, 2009) of the Company through related companies is
the majority owner of ER. Bay Holdings is not a variable interest entity, as defined in GAAP. The
Company accounts for its investment in Bay Holdings using the equity method of accounting because,
although it has the ability to exercise significant influence over operating and financial policies, it does
not control Bay Holdings through a majority voting interest or other means. Under the LLC
agreement, major decisions require the approval of either 75% or 100% of the membership interests.
The Company has been designated as the managing member of Bay Holdings and as such manages the
day-to-day affairs of the entity. Profits and losses of Bay Holdings are allocated in proportion to the
members’ ownership interests, which approximate the estimated cash distributions to the members.

Upon formation of Kapalua Bay in 2004, the Company’s non-monetary contributions to
Bay Holdings, including a 21-acre land parcel, were valued at $25 million by the members through
arms-length negotiations. The land contribution was recorded by the Company in its investment in
Bay Holdings at historical cost, which was nominal because it was acquired in the early 1900s, and
Bay Holdings recorded the contribution at its fair value of $25 million. The Company recorded its
non-monetary capital contributions to Bay Holdings at the carrying values (carryover historical cost
basis) of the assets contributed because the contributions are not the culmination of an earnings
process. Through December 31, 2009, the Company has made cash contributions to Bay Holdings of
$53.2 million and an unsecured loan of $3.6 million, which incurred interest at 16%. These amounts are
not expected to be recovered and have been written off (see below).

Bay Holdings constructed a residential development on land that it owns at the site of the former
Kapalua Bay Hotel, and a spa on an adjacent parcel of land that is owned by the Company and leased
to Bay Holdings. The Kapalua Bay Hotel closed in April 2006 to prepare for the commencement of
sales and marketing efforts for the whole and fractional condominium units that comprise the
Residences at Kapalua Bay project. In 2007, Bay Holdings began to recognize profit from binding sales
contracts on the whole and fractional ownership condominiums on the percentage-of-completion
method and in June 2009, the six residential buildings comprised of 146 residences were substantially
completed. In 2009, 20 (84 total) whole-ownership and 88 (total 744) fractional units closed escrow;
and as of year-end 2009, the construction work was completed.

In September 2009, Bay Holdings recorded an impairment loss totaling $208.8 million to reflect an
impairment of the carrying value of its real estate inventories (whole and fractional condominium units)
held for sale. The impairment loss reflects higher default rates on actual whole and fractional unit
closings than was anticipated once construction was completed in June 2009, and also reflects a change
in forecasted sales revenue on the unsold whole and fractional units that substantially reduces expected
margins for those remaining units. The Company’s equity in the losses of Bay Holdings for 2009 and
2008 was $47.2 million (including an impairment charge of $21.3 million recorded by the Company in
June 2009) and $18.8 million (including an impairment charge of $37.8 million recorded by the
Company in December 2008), respectively. The equity in the losses of Bay Holdings recorded by the
Company in 2009 was limited to the remaining investment carrying value on the Company’s
consolidated balance sheet including its unsecured loan to Bay Holdings of $3.6 million and the
Company’s estimated share of its completion and recourse guarantees which resulted in the Company
recording a liability for its potential estimated liability. The construction work was complete by
year-end 2009, however, the completion guaranty will remain in place until the cost for all construction
work has been settled and paid. The Company has no funding commitments relating to Bay Holdings
beyond this amount. As a result, the Company’s carrying value of its investment in Bay Holdings and
its $3.6 million loan due from Bay Holdings were written down to zero and, accordingly, the Company
does not expect to recover any amounts from its investment in Bay Holdings. The Company will not
recognize any additional equity in the earnings (losses) of Bay Holdings until the recognized income
attributable to Bay Holdings exceeds the accumulated losses.

As of January 1, 2008, Bay Holdings adopted ASC Topic 360-20-40-50 through 55, which changed

the manner in which Bay Holdings recognized revenues from its sales of condominium units. The
cumulative effect of adopting this guidance of $12.5 million was recorded as a reduction to
Bay Holdings’ January 1, 2008 retained earnings, and the Company recorded its proportionate share of
this adjustment of $4,622,000 (net of income tax effect) to its opening retained earnings for 2008.

In July 2006, Bay Holdings entered into a syndicated construction loan agreement with Lehman

Brothers Holdings Inc. (‘‘Lehman’’) for the lesser of $370 million or 61.6% of the total projected cost
of the project. Lehman’s commitment under the loan agreement was approximately 78% of the total.
The loan was collateralized by the project assets, including the fee simple interest in the land owned by
Bay Holdings, the adjacent spa parcel owned by the Company, and all of the condominium unit sales
contracts.

On September 15, 2008, Lehman filed a petition under Chapter 11 of the U.S. Bankruptcy Code

with the United States Bankruptcy Court for the Southern District of New York. As a result of
Lehman’s failure to comply with the loan agreement, the members of Bay Holdings advanced funds to
the joint venture, which, when combined with funding received from lenders other than Lehman under
the loan agreement, were sufficient to pay minimum progress payments due to the general contractor.

On February 11, 2009, Kapalua Bay, Lehman, other lenders under the loan agreement, Swedbank

and MH Kapalua Venture, LLC, an affiliate of Marriott, entered into an Amended and Restated
Construction Loan Agreement (the ‘‘Amended Loan Agreement’’). Pursuant to the Amended Loan
Agreement, the aggregate amount that Kapalua Bay may borrow, including amounts previously funded
under the loan agreement is approximately $354.5 million. In December 2009, Bay Holdings amended
the Amended Loan Agreement to extend the maturity date of the principal payment of $45.7 million
that was previously due in February 2010 to December 2010. Bay Holdings’ failure to repay amounts
when due could result in all of its outstanding borrowings under the Amended Loan Agreement
becoming immediately due and payable. Bay Holdings’ ability to make the December 2010 debt
payment as scheduled is dependent on its ability to generate sufficient cash flows from fractional and
whole unit closings. Bay Holdings is currently in negotiations with the lenders to restructure the terms
of the Amended Loan Agreement to provide available funding until the Project is completely sold out.

Summarized balance sheet and operating information for Bay Holdings as of December 31, 2009

and 2008 and for the years then ended are as follows:

2009

2008

(in thousands)

Restricted cash . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Real estate inventories . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Project development costs . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other assets, net . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

$ 18,487
226,152

8,688
0
— 358,413
161,274

38,469

Total Assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

$283,108

$528,375

Construction loan payable . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

$332,482
20,253

$279,318
62,491

Total Liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

$352,735

$341,809

Members’ Capital (Deficiency) . . . . . . . . . . . . . . . . . . . . . . . .

$ (69,627) $186,566

Revenues . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Costs and expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

2009

2008

(in thousands)
$ (49,075) $122,218
90,993

207,118

Net Income (Loss) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

$(256,193) $ 31,225

Due to the current economic environment, Bay Holdings significantly increased the allowance for

default reserves in 2009, which more than offset revenues, resulting in negative revenues in 2009. Costs
and expense include an impairment charge of $208.8 million for the year ended December 31, 2009.

FINANCING ARRANGEMENTS

During 2009 and 2008, the Company had average borrowings outstanding of $99.6 million and
$111.5 million, respectively, at average interest rates of 5.4% and 5.0%, respectively. At December 31,
2009, the Company had unused long-term credit lines of $13.5 million.

Long-term debt at December 31, 2009 and 2008 consisted of the following (interest rates represent

the rates at December 31):

Revolving loans, 5.5% and 3.25% to 3.48% . . . . . . . . . . . . . . .
Senior Secured Convertible Notes 5.875% . . . . . . . . . . . . . . . .

$59,900
34,324

$102,800
31,159

Total
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Less current portion . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

94,224
—

133,959
45,000

Long-term debt

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

$94,224

$ 88,959

2009

2008

(in thousands)

In November 2007, the Company entered into a $90 million revolving line of credit secured by
approximately 1,437 acres of the Company’s West Maui land. All outstanding principal and accrued
interest was scheduled to be due on November 13, 2009. In March 2009, the Company sold the
Plantation Golf Course (PGC) for $50 million (see Note 8), which was included in the collateral
securing the line of credit agreement. In consideration for release of the PGC from the collateral,
$45 million of the sales proceeds were applied to partially repay outstanding borrowings and the credit
limit under this facility was reduced to $45 million. In conjunction with the PGC sale, the Company

amended the line of credit agreement to extend the maturity date to March 13, 2010 and, accordingly,
classified the remaining outstanding principal of $32.8 million as a noncurrent liability at December 31,
2008 in the consolidated balance sheet.

In October 2009, the line of credit agreement was amended and restated. The agreement
principally increases the secured revolving line of credit from $45 million to $50 million, extends the
maturity date of the credit agreement from March 2010 to March 2011, and re-sets financial covenants.
As amended, the agreement provides that interest on loan draws accrue interest based on the LIBOR
market index or applicable LIBOR rate, plus 4.25%, subject to a minimum interest rate of 5.5%. The
financial covenants include a minimum liquidity (as defined in the agreement) of $8 million and
maximum total liabilities of $240 million. There are no commitment fees on the unused portion of the
revolving facility and interest is due monthly. The line of credit agreement contains various
representations, warranties, affirmative, negative and financial covenants and events of default
customary for financings of this type. At December 31, 2009, the Company had irrevocable letters of
credit totaling $1.6 million that were secured by this loan facility.

The Company has a $25 million revolving loan that is secured by certain parcels of the Company’s

real property on Maui that matures in March 2011 (as amended). Commitment fees of 0.40% are
payable on the unused portion of the revolving facility. The financial covenants include a minimum
liquidity (as defined in the agreement) of $8 million, maximum total liabilities of $240 million, and
limitations on capital expenditures. As amended, the agreement provides that interest on loan draws
accrue interest based on the LIBOR market index or applicable LIBOR rate, plus 4.25%, subject to a
minimum interest rate of 5.5%.

On July 28, 2008, the Company concluded a securities purchase agreement with certain

institutional accredited investors and issued an aggregate of $40 million in principal amount of senior
secured convertible notes (the ‘‘convertible notes’’), bearing 5.875% interest per annum payable
quarterly in cash in arrears beginning October 15, 2008, resulting in proceeds of $38,365,000 (net of
issuance costs of $1,635,000).

The convertible notes are convertible, at any time following their issuance, into shares of common

stock of the Company at an initial conversion price of $33.50 per share, which is equal to an initial
conversion rate of 29.8507 shares per $1,000 principal amount of the convertible notes. The conversion
price is subject to (i) standard weighted-average anti-dilution protection, and (ii) to an automatic reset
18 months following the closing of the financing at the lower of the then current conversion price and
115% of the closing bid price of the common stock as reported on the NYSE on the adjustment date;
provided, that, with respect to the reset adjustment, in no event shall the conversion price be reset
below $30.00 per share. The convertible notes are not convertible to the extent that their conversion
would cause the holder to be the beneficial owner of more than 4.99% of the Company’s common
stock immediately after giving effect to such conversion. The convertible notes are secured by specified
assets of the Company.

Further, if an adjustment to the conversion price would result in any investor owning in excess of
(i) such investor’s FIRPTA Cap (as defined in the convertible notes) on an as-converted basis (without
regard for any limitations of conversion set forth in the convertible notes) or (ii) the Exchange Cap
Allocation (as defined in the convertible notes), then in lieu of the full anti-dilution adjustment, the
conversion price will be reduced to the conversion price that would result in such note being
convertible into such number of shares of common stock equal to the lower of the investor’s FIRPTA
Cap or Exchange Cap Allocation, as applicable (without regard to any limitations on conversion set
forth in the convertible note), and, in addition, no later than five business days following the date of
conversion of the convertible note, such investor shall receive a cash payment from the Company equal
to the product of (x) the closing bid price of our common stock on such conversion date and (y) the
number of shares of common stock in excess of such FIRPTA Cap or Exchange Cap Allocation, as

applicable, that would have otherwise been issuable without regard to such limitation and any other
limitations on conversion set forth in the convertible note.

The convertible notes mature on July 15, 2013. However, at any time after the second anniversary

of the closing, the Company has the right, but not the obligation, to require the investors to convert
their convertible notes into shares of its common stock at the then applicable conversion price if the
average of the daily volume weighted-average price of the Company’s common stock is 175% of the
conversion price then in effect for 20 out of 30 consecutive trading days.

On the third anniversary of the closing, each holder of the convertible notes has the right to

require the Company to redeem all or any portion of such convertible note at a redemption price equal
to 100% of the principal amount of the convertible note being redeemed, plus accrued and unpaid
interest thereon. Upon the occurrence of a change of control of the Company, each convertible note
holder will have the right to require the Company to repurchase all or any portion of such convertible
note at a repurchase price equal to 100% of the principal amount of the convertible note being
redeemed, plus accrued and unpaid interest thereon. If a convertible note holder elects to convert its
convertible note in connection with a change of control, the Company will pay a make-whole premium
to such convertible note holder, unless (i) at least 90% of the consideration, excluding cash payments
for fractional shares, in such change of control consists of shares of capital stock of the surviving or
resulting entity that are listed on, or immediately after the transaction or event will be listed on, a
national securities exchange and as a result of such transaction or transactions the convertible notes
become convertible into or exchangeable or exercisable for such capital stock of the surviving or
resulting entity and such entity has assumed the obligations under the convertible note or (ii) the
Company continues to be the successor entity and the common stock continues to be listed on a
national securities exchange. The make-whole premium table included in the convertible notes sets
forth the number of additional shares to be paid depending upon the effective date of the change of
control triggering the make-whole premium payment and the price paid per share of common stock in
the change of control.

Additionally, the convertible notes may become immediately due and payable upon an ‘‘event of

default,’’ as defined in the convertible notes, such as the suspension from trading on the NYSE for
more than 10 days in any 365-day period, failure to pay convertible notes timely or to pay amounts due
under the agreement, or bankruptcy. If a convertible note is redeemed in connection with an event of
default, the Company may be required to pay a redemption premium, in which case the redemption
amount would equal 115% multiplied by (i) the principal and accrued and unpaid interest under the
convertible note, or (ii) the highest closing sale price of the Company’s common stock during the
period between the event of default and delivery of redemption notice multiplied by the number of
shares of the Company’s common stock into which a convertible note is then convertible.

The conversion features of the convertible notes including the make-whole premium (‘‘conversion

features’’) gave rise to an embedded derivative instrument that is required to be accounted for
separately. Accordingly, the Company bifurcated the fair value of the conversion features of the
convertible notes which was determined to be $10.1 million on July 28, 2008, and was recorded as a
derivative liability carried at fair value, with changes in fair value being recorded in earnings. At
December 31, 2009 and 2008, the fair value of the derivative liability was approximately $489,000 and
$2.7 million, respectively, and the $2.2 million and $7.4 million reduction in fair value for 2009 and
2008, respectively, was recorded as credits to interest expense. As a result of the bifurcation, the
carrying value of the convertible notes at inception was $29.9 million which is being accreted to interest
expense using the effective interest method to the stated value of the convertible notes of $40 million
over the three-year term of the Notes. For 2009 and 2008, such accretion was $3.2 million and
$1.2 million, respectively, and is recorded as interest expense.

A $9.7 million term loan and $6.5 million of equipment loans were repaid in 2008 with proceeds

from the convertible debt and the revolving loans.

Maturities of long-term debt are as follows: $59,900,000 in 2011 and $34,324,000 in 2013.

FAIR VALUE

The Company adopted ASC Topic 820-10 (formerly, FASB Statement No. 157, Fair Value

Measurements), on January 1, 2008 for its financial assets and liabilities, and on January 1, 2009 for its
nonfinancial assets and liabilities, and there was no material impact to the consolidated financial
statements. ASC Topic 820-10 applies to all assets and liabilities that are being measured and reported
on a fair value basis. ASC Topic 820-10 requires new disclosure that establishes a framework for
measuring fair value in GAAP, and expands disclosure about fair value measurements. This statement is
intended to enable the reader of the financial statements to assess the inputs used to develop those
measurements by establishing a hierarchy for ranking the quality and reliability of the information used
to determine fair values. The statement requires that assets and liabilities carried at fair value be
classified and disclosed in one of the following three categories:

Level 1: Quoted market prices in active markets for identical assets or liabilities.

Level 2: Observable market based inputs or unobservable inputs that are corroborated by market data.

Level 3: Unobservable inputs that are not corroborated by market data.

In July 2008, the Company issued $40 million in senior secured notes that are convertible into the
Company’s common stock (see Note 5). The conversion features related to the notes that gave rise to a
derivative liability is recorded at fair value as of December 31, 2009 and 2008.

In January 2008, the Company entered into interest rate swap agreements to reduce future cash

flow variability for approximately two years on $55 million of variable rate debt. The effect of the
agreements is to convert variable-rate interest, which was previously tied to 1-, 2-, 3- and 6-month
LIBOR terms, to fixed-rate interest of approximately 4.4% based on a 2-year fixed LIBOR rate. The
transactions were not designated as hedges, and accordingly, the gains and losses resulting from the
change in fair value from these interest rate swaps are recognized currently in interest expense. The
interest rate swap agreements expired in January 2010.

Information regarding assets and liabilities measured at fair value on a recurring basis is as follows:

Fair Value(1) of
Liability
Derivatives as of

Derivatives not designated as hedges:

Balance Sheet Location

12/31/09

12/31/08

Interest rate swap agreements . . . . . . . . . . . . . . . . . .
Derivative liability related to convertible debt . . . . . . .

Other current liabilities
Other current liabilities

$ 63
489

$1,160
2,689

(in thousands)

(1) Fair value measurements derived using significant other observable inputs (Level 2).

Derivatives not designated as hedges:

Location of gain or
(loss) recognized in
statement of operations

Interest rate swap agreements . . . . . . . . . . . . . . . . . . . . .
Derivative liability related to convertible debt . . . . . . . . . .

Interest expense
Interest expense

Amount of gain or
(loss) recognized
on derivative

Year Ended

12/31/09

12/31/08

(in thousands)

$1,097
2,200

$(1,160)
7,382

In 2009, assets held for sale, with a carrying value of $14,753,000 were written down to the lower

of net book value or estimated fair value less costs to sell of $11,098,000 (based on Level 3 inputs),
resulting in a loss of $3,655,000, which was recorded as an impairment loss (see Note 2). The fair value
was estimated based on the fair values of similar assets and recent offers received for the property as
well as other market information. In 2009, Agriculture segment fixed assets with a net book value of
approximately $10.9 million were depreciated down to estimated fair value of $1.5 million through
accelerated depreciation charges after the decision by the Board of Directors to cease all Agriculture
operations by year-end, resulting in a loss of $9.4 million. The fair values were estimated based on the
fair values of similar assets and other market information on used equipment and vehicles
(Level 3 inputs).

The Company’s investment in Bay Holdings, with a carrying amount of $38.4 million, was written
down to its estimated fair value of $17.1 million, resulting in an other-than-temporary impairment loss
of $21.3 million which was recorded in June 2009 (see Note 4). The fair value was estimated using
present value techniques used to discount future cash flows expected to be realized by the Company
from future cash distributions of Bay Holdings. In estimating the fair value of this investment,
management used inputs it believes would be used by market participants (Level 3 inputs). In
September 2009, Bay Holdings recorded an impairment charge of $208.8 million, which reduced the
Company’s carrying value of its investment in Bay Holdings to zero.

7. DISCONTINUED OPERATIONS

In November 2009, the Board of Directors of the Company approved the cessation of all pineapple

agriculture operations by December 31, 2009. On December 31, 2009, the Company entered into
agreements with Haliimaile Pineapple Company, Limited (HPC), a closely held corporation. The
significant terms of these agreements include:

(cid:127) The sale to HPC of pineapple operating equipment, materials, supplies, and customer lists with

a net book value of approximately $3 million for $680,000, to be paid over five years.

(cid:127) The grant to HPC for a term of 60 years, of the exclusive, non-transferable, world-wide right to
use MPC trademarks, trade names, symbols and logos for the sale, marketing and distribution of
fresh pineapple grown on Maui. HPC will pay a license fee to the Company based on sales
volume that is estimated to be approximately $20,000 to $30,000 annually.

(cid:127) A lease to HPC of approximately 950 acres and 59,000 square feet of office and warehouse

space at market rents totaling approximately $420,000 per year for 20 years with provisions for
annual rent increases beginning on January 1, 2014 and an option exercisable through
December 31, 2010 to expand the numbers of acres subject to the lease by up to 570 acres.

(cid:127) An agreement for the Company to provide water to HPC from private water sources to which
the Company has contractual rights for the collection, transmission and delivery of non-potable
agriculture and irrigation water at actual direct cost to the Company.

(cid:127) An agreement for HPC to pay MPC a license fee (based on tons harvested) to harvest the

existing pineapple crop through June 30, 2011 and fruit grown under an agreement between
MPC and a private grower until December 31, 2010.

The Company’s Agriculture segment operating results and the loss on sale of the assets are
reported as discontinued operations and prior period operating results have been reclassified for
comparability. The loss from discontinued operations for 2009 includes charges of $22.8 million related
to the sale or other disposition of the Agriculture segment assets, employee severance and cancellation
of contracts. The Company recorded an accrual for the severance liability in the amount of $2.5 million

which will be paid out through 2011. The revenues and loss before income tax benefit for the
discontinued operations were as follows:

Revenues . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

$ 18,643

$ 27,779

Loss from Discontinued Operations . . . . . . . . . . . . . . . . . . . .

$(34,896) $(27,022)

2009

2008

(in thousands)

8. REAL ESTATE SALES

On March 27, 2009, the Company sold the land, improvements, structures and fixtures comprising
the PGC for $50 million in cash. Concurrent with the closing of the sale, the Company entered into an
agreement (the ‘‘Ground Lease’’) to leaseback the PGC for an initial period of two years for an annual
net rental payment of $4 million, payable monthly in advance. The Company also entered into an
agreement to leaseback the portion of the Plantation Clubhouse comprising the retail shop for a period
of five years, which will commence when the Ground Lease expires or is otherwise terminated. The
Ground Lease requires the Company to replace the irrigation system at the PGC at its own cost and
expense, subject to a cap of $5 million. Because of the Company’s continuing involvement associated
with the obligation to replace the irrigation system, the sale and leaseback of the PGC has been
accounted for as a financing transaction and, accordingly, the net proceeds received have been recorded
as a non-current liability on the consolidated balance sheet and no gain will be recognized until the
irrigation system replacement project has been completed. Expected date of completion is December
2010.

In addition to the PGC, the Company sold two other non-inventory real properties in 2009 and

recognized a loss of $784,000 that is included in general and administrative expense and a gain of
$399,000 that is included in discontinued operations for the Agriculture segment.

In 2009, the Company sold real estate inventory which was comprised of three properties including

the last lot in Honolua Ridge Phase II, and the Company recognized revenues of $12.0 million and
pre-tax profit of $6.8 million.

In 2008, the Company sold three real estate inventory properties and recognized revenues of

$4.4 million and pre-tax gains of $4.1 million.

9. LEASING ARRANGEMENTS

LESSEE

The Company has capital leases on equipment which expire at various dates through 2014. At
December 31, 2009 and 2008, property included capital leases of $1,469,000 and $3,384,000 (before
accumulated amortization of $829,000 and $1,665,000, respectively). Future minimum rental payments
under capital leases aggregate $2,712,000 (including $296,000 representing interest) and are payable for
the next four years (2010 to 2013) as follows: $2,083,000, $532,000, $84,000 and $13,000.

The Company has various operating leases which expire at various dates through 2017. Total rental
expense under operating leases was $1,277,000 in 2009 and $1,342,000 in 2008. Future minimum rental
payments under operating leases aggregate to $1,585,000 and are payable during the next five years
(2010 to 2014) as follows: $761,000, $463,000, $247,000, $105,000 and $9,000, respectively, and $0
thereafter.

LESSOR

The Company leases space in buildings, primarily to retail tenants. These operating leases

generally provide for minimum rents and, in most cases, percentage rentals based on tenant revenues.
In addition, the leases generally provide for reimbursement of common area maintenance and other
expenses. Total rental income under these operating leases was as follows:

Minimum rentals . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Percentage rentals . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

$ 975
767

$ 989
840

Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

$1,742

$1,829

2009

2008

Property at December 31, 2009 and 2008 includes leased property of $17,231,000 and $18,679,000,

respectively (before accumulated depreciation of $5,630,000 and $4,874,000, respectively).

Future minimum rental income aggregates $15,312,000 and is receivable during the next five years

(2010 to 2014) as follows: $1,412,000, $1,444,000, $1,325,000, $1,336,000 and $1,325,000, respectively,
and $8,470,000 thereafter.

In December 2009, the Company concluded agreements with third parties to operate and manage

The Kapalua Villas and the Kapalua Adventures operations. The caf´e and retail portion of the Kapalua
Adventures was closed. The lease and license agreements for The Kapalua Villas and the Kapalua
Adventures are for ten years and five years, respectively, and both provide for minimum rents and fees
based on volume. In December 2009, Company also concluded lease agreements with HPC (Note 7).

10. EMPLOYEE BENEFIT PLANS

The Company had defined benefit pension plans covering substantially all full-time, part-time and

intermittent employees. Effective as of January 1, 2010, the defined benefit pension plan covering
non-bargaining salaried employees was frozen and no further pension benefits will accrue to the
affected employees. Effective October 31, 2008, the pension plan covering the Company’s
non-bargaining salaried employees was amended such that employees hired after that date were not
eligible to participate in the plan. Pension benefits were based primarily on years of service and
compensation levels. The Company had defined benefit postretirement health and life insurance plans
that cover primarily non-bargaining salaried employees and certain bargaining unit employees.
Postretirement health and life insurance benefits were principally based on the employee’s job
classification at the time of retirement and on years of service.

Effective February 1, 2010, the postretirement life insurance benefits for all current employees and
retirees was terminated; and effective as of February 28, 2010, postretirement health insurance benefits
for all current non-bargaining employees and non-bargaining unit retirees was terminated. The
information that follows assumes that the benefit plans continue indefinitely as the termination of these
benefits was communicated to the affected participants in January and February 2010.

The measurement date for the Company’s benefit plan disclosures is December 31st of each year.

The changes in benefit obligations and plan assets for 2009 and 2008, and the funded status of the

plans, and assumptions used to determine benefit information at December 31, 2009 and 2008 were as
follows:

Pension Benefits

Other Benefits

2009

2008

2009

2008

(in thousands)

Change in benefit obligations:

Benefit obligations at beginning of year . . . . . . . . . . . . . .
Service cost . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Interest cost . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Actuarial (gain) loss . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Special termination benefits . . . . . . . . . . . . . . . . . . . . . .
Curtailments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Benefits paid . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

$ 59,737
1,177
3,509
(328)
316
(606)
(3,790)

$ 57,195
1,558
3,551
888
33
51
(3,539)

$12,636
206
725
(4,567)
—
(1,583)
(809)

$ 13,787
268
805
(972)
—
(474)
(778)

Benefit obligations at end of year . . . . . . . . . . . . . . . . . .

60,015

59,737

6,608

12,636

Change in plan assets:

Fair value of plan assets at beginning of year . . . . . . . . . .
Actual return on plan assets . . . . . . . . . . . . . . . . . . . . . .
Employer contributions . . . . . . . . . . . . . . . . . . . . . . . . . .
Benefits paid . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

31,723
8,696
1,999
(3,790)

46,745
(12,836)
1,353
(3,539)

Fair value of plan assets at end of year . . . . . . . . . . . . . .

38,628

31,723

—
—
809
(809)

—

—
—
777
(777)

—

Funded status . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

$(21,387) $(28,014) $ (6,608) $(12,636)

Weighted average assumption used to determine benefit

obligations at December 31:

Discount rate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Expected long-term return on plan assets . . . . . . . . . . . . . .
Rate of compensation increase . . . . . . . . . . . . . . . . . . . . . .

6.00%
8.00%
3.00%

6.25% 6.00%
8.00%
3.50% 3.00%

6.25%

3.50%

Curtailments in 2009 were due to the termination of approximately 60% of the active employees

covered by the benefit plans. Curtailments in 2008 relate primarily to the termination of approximately
11% of the non-bargaining unit benefit plan participants. Special termination benefits and curtailments
in 2009 primarily relate to the termination of Agriculture segment employees in connection with the
Company’s exit from pineapple operations.

The projected benefit obligation, accumulated benefit obligation and fair value of plan assets for

pension plans with accumulated benefits in excess of plan assets were $60,015,000, $60,015,000 and
$38,628,000, respectively as of December 31, 2009 and $59,737,000, $56,243,000 and $31,723,000,
respectively as of December 31, 2008.

The accumulated postretirement benefit obligation for health care as of December 31, 2009 was

determined using a health care cost trend rate of 7% and decreasing by 0.5% each year through 2013,
and 5% thereafter for medical insurance plans covering retirees prior to age 65; and a health care cost
trend rate of 12% and decreasing by 1% each year through 2016, and 5% thereafter for plans covering
Medicare eligible participants. The effect of a 1% annual increase in these assumed cost trend rates
would increase the accrued postretirement benefit obligation by approximately $355,000 as of
December 31, 2009, and the aggregate of the service and interest cost for 2009 by approximately
$116,000. A 1% annual decrease would reduce the accrued postretirement benefit obligation by
approximately $301,000 as of December 31, 2009, and the aggregate of the service and interest cost for
2009 by approximately $94,000.

The amounts recognized on the Company’s consolidated balance sheets as of December 31, 2009

and 2008 were as follows:

Pension Benefits

Other Benefits

2009

2008

2009

2008

(in thousands)

Current Liability . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Noncurrent Liability . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

$
301
21,086

$
302
27,712

$ 589
6,020

810
11,826

Net amounts recognized . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

$21,387

$28,014

$6,609

$12,636

Amounts recognized in accumulated other comprehensive loss (before income tax effect of $0) at

December 31, 2009 and 2008 are as follows:

Pension Benefits

Other Benefits

2009

2008

2009

2008

(in thousands)

Net loss (gain) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Prior service cost . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Net initial obligation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

$15,542
15
24

$24,523
176
71

$(10,907) $(6,747)
1
—

—
—

Net amounts recognized . . . . . . . . . . . . . . . . . . . . . . . . . . . .

$15,581

$24,770

$(10,907) $(6,746)

Amounts in accumulated other comprehensive loss at December 31, 2009 that are expected to be

recognized as components of net periodic benefit cost in 2010 are as follows:

Net loss (gain) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Net transition obligation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Prior service cost . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Pension
Benefits

Other
Benefits

(in thousands)
$734
7
4

$(821)
—
—

$745

$(821)

Components of net periodic benefit cost and other amounts recognized in other comprehensive

loss were as follows:

Pension benefits:

Pension Benefits

Other Benefits

2009

2008

2009

2008

(in thousands)

Service cost . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Interest cost . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Expected return on plan assets . . . . . . . . . . . . . . . . . . . . . . .
Recognized net actuarial (gain) loss . . . . . . . . . . . . . . . . . . .
Amortization of obligation . . . . . . . . . . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . . . . . . . .
Amortization of prior service cost
Special termination benefits . . . . . . . . . . . . . . . . . . . . . . . . .
Recognition of (gain) loss due to curtailment . . . . . . . . . . . .

$ 1,177
3,509
(2,470)
1,746
17
46
316
221

$ 1,558
3,551
(3,472)
471
19
50
33
102

206
725
—
(538)
—
1
—
(1,452)

268
805
—
(496)
—
1
—
(421)

Net expense . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

$ 4,562

$ 2,312

$(1,058) $

157

Other Changes in Plan Assets and Benefit Obligations

Recognized in Other Comprehensive Loss:
Net (gain) loss . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Recognized gain (loss) . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Prior service cost . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Recognized prior service cost . . . . . . . . . . . . . . . . . . . . . . . .
Recognized net initial obligation . . . . . . . . . . . . . . . . . . . . .

$(7,235) $17,166
(470)
15
(74)
(31)

(1,746)
—
(161)
(47)

$(4,699) $(1,025)
496
—
(1)
—

538
—
—
—

Total recognized in other comprehensive loss . . . . . . . . . . . .

$(9,189) $16,606

$(4,161) $ (530)

2009

2008

Weighted average assumptions used to determine net periodic

benefit cost:
Pension benefits:

Discount rate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Expected long-term return on plan assets . . . . . . . . . . . . . . . . .
Rate of compensation increase . . . . . . . . . . . . . . . . . . . . . . . .

6.25% 6.375%
8.0%
8.0%
3% 3% - 4%

Other benefits:

Discount rate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Rate of compensation increase . . . . . . . . . . . . . . . . . . . . . . . .

6.25% 6.375%
3% 3% - 4%

The expected long-term rate of return on plan assets was based on historical total returns of broad

equity and bond indices for ten to fifteen year periods, weighted against the Company’s targeted
pension asset allocation ranges. These rates were also compared to historical rates of return on
hypothetical blended funds with 60% equity securities and 40% bond securities.

The fair values of the Company’s pension plan asset at December 31, 2009, by asset category, were

as follows:

Pooled equity funds . . . . . . . . . . . . . . . . . .
Common stock . . . . . . . . . . . . . . . . . . . . .
U.S. government securities . . . . . . . . . . . . .
Pooled fixed income funds . . . . . . . . . . . . .
Cash management funds . . . . . . . . . . . . . .
Other investments . . . . . . . . . . . . . . . . . . .

Fair Value Measurements (in thousands)

Quoted
Prices in
Active
Markets for
Identical
Assets (Level 1)

Significant
Other
Observable
Inputs (Level 2)

$15,020
11,498
1,723
3,972
2,021
263

$34,497

$ —

4,041

$4,131

Total

$15,020
11,498
5,764
3,972
2,021
353

$38,628

A pension committee consisting of certain senior management employees administers the

Company’s defined benefit pension plans. The pension plan assets are allocated among approved asset
types based on asset allocation guidelines and investment and risk-management guidelines set by the
pension committee, and subject to liquidity requirements of the plans. The pension committee has set
the following asset mix guidelines: equity securities 40% to 80%; debt securities 20% to 60%;
international securities 0% to 10%; and cash or equivalents 0% to 10%.

The Company expects to contribute $2.4 million to its defined benefit pension plans and $606,000

to its other postretirement benefit plans in 2010. Estimated future benefit payments, which include
expected future service, are as follows:

Pension
Benefits

Other
Benefits

(in thousands)

2010 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2011 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2012 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2013 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2014 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2015 - 2019 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

$ 4,471
3,811
3,833
3,984
3,983
21,110

$ 606
598
579
566
541
2,397

The Company has investment and savings plans that allow eligible employees on a voluntary basis

to make pre-tax contributions of their cash compensation. Substantially all employees are eligible to
participate in one or more plans. No Company contributions were made to these plans in 2009 or 2008.

On October 1, 1998, deferred compensation plans that provided for specified payments after
retirement for certain management employees were amended to eliminate future benefits. At the
termination date, these employees were given credit for existing years of service and future vesting of
additional benefits was discontinued. The present value of the benefits to be paid is being accrued over
the period of active employment. As of December 31, 2009 and 2008, deferred compensation plan
liabilities totaled $1,039,000 and $1,225,000, respectively.

11. SHARE-BASED COMPENSATION

The Company accounts for share-based compensation arrangements including grants of employee

stock options as compensation expense over the service period (generally the vesting period) in the
consolidated financial statements based on their fair values. The impact of forfeitures that may occur
prior to vesting is also estimated and considered in the amount recognized. Excess tax benefits are
reported as a financing cash inflow rather than as a reduction of taxes paid.

The total compensation expense recognized for share-based compensation was $1,497,000 and
$2,752,000 for 2009 and 2008, respectively. The total tax benefit related thereto was $539,000 and
$895,000, for 2009 and 2008, respectively. Recognized share-based compensation was reduced for
estimated forfeitures prior to vesting primarily based on historical annual forfeiture rates of
approximately 4.3% and 4.6%, for 2009 and 2008, respectively. Estimated forfeitures will be reassessed
in subsequent periods and may change based on new facts and circumstances.

Stock Options

In May 2006, the Company’s shareholders approved the 2006 Equity and Incentive Award Plan

(the ‘‘2006 Plan’’) and an increase in the number of shares of common stock authorized under the
Articles of Association by 1,000,000 shares, all of which have been reserved for issuance under the 2006
Plan. The 2006 Plan provides that the administrator can grant stock options and other equity
instruments. The terms of certain grant types follow general guidelines, but the term and conditions of
each award can vary at the discretion of the administrator. With respect to awards granted to
non-employee directors, the administrator of the 2006 Plan is the Board of Directors. The
Compensation Committee of the Board is the administrator of the 2006 Plan for all other persons,
unless the Board assumes authority for administration. The Company also had a share-based
compensation agreement with its former President and Chief Executive Officer under which
non-qualified stock options (133,333 shares) were outstanding as of December 31, 2008, and which
expired in 2009.

A summary of stock option award activity as of and for the year ended December 31, 2009 is

presented below:

Weighted
Average
Grant-Date
Fair Value

Weighted
Average
Remaining
Contractual
Term (years)

Aggregate
Intrinsic
Value
$(000)(1)

4.5

2.9

7.5

$ 9

$—

$ 6

Outstanding at December 31, 2008 . . . . . . . . .
Granted . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Exercised . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Forfeited or Cancelled . . . . . . . . . . . . . . . . . .

Weighted
Average
Exercise
Price

$29.20
$ 6.35

$27.99

901,833
45,000
—
(680,333)

Outstanding at December 31, 2009 . . . . . . . . .

266,500

$29.20

$ 3.11

$11.97

$10.63

Exercisable at December 31, 2009 . . . . . . . . . .

174,000

$33.22

$11.98

Expected to Vest at December 31, 2009(2) . . . .

68,154

$19.41

$ 8.10

(1) For in the money options

(2) Options expected to vest reflect estimated forfeitures.

Additional stock option information for the years ended December 31, 2009 and 2008 follows:

Weighted Average Grant-Date Fair Value For Options Granted

During the Period . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Intrinsic Value of Options Exercised $(000) . . . . . . . . . . . . . . . . .
Cash Received From Option Exercises $(000) . . . . . . . . . . . . . . .
Tax Benefit From Option Exercises $(000) . . . . . . . . . . . . . . . . . .
Fair Value of Shares Vested During the Period $(000) . . . . . . . . .

$ 3.11
—
—
—
1,343

$ 4.27
4
14
—
3,202

2009

2008

For the years ended December 31, 2009 and 2008, the fair value of the Company’s share-based
awards to employees was estimated using the Black-Scholes option pricing model and the following
weighted average assumptions:

2009

2008

Expected Life of Options in Years . . . . . . . . . . . . . . . . . . . . . . . . . . .
Expected Volatility . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Risk-free interest rate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Expected dividend yield . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . —

6.5

6.5
46.1% 40.3%
2.4% 2.2%

—

(cid:127) The expected life of the options represents expectations of future employee exercise and

post-vesting termination behavior and was calculated using the ‘‘simplified’’ method for all plain
vanilla options as allowed for in the SEC Staff Accounting Bulletin (‘‘SAB’’) 107, Share-Based
Payment. The simplified method was used because the Company does not have sufficient
historical exercise data to provide a reasonable basis upon which to estimate expected term due
to the limited period that it has been issuing stock options.

(cid:127) Expected volatility was based on the historical volatility of the Company’s common stock for a

period equal to the option’s estimated life.

(cid:127) The risk-free interest rate was based on U.S. Government treasury yields for periods equal to

the expected term of the option on the grant date.

(cid:127) The expected dividend yield is based on the Company’s current and historical dividend policy.

The Company recognizes share-based compensation for the number of awards that are ultimately
expected to vest. Estimated forfeitures are reassessed in subsequent periods and may change based on
new facts and circumstances.

As of December 31, 2009, there was $1,679,000 of total unrecognized compensation for awards
granted under the stock options plans that is expected to be recognized over a weighted average period
of 1.7 years.

Restricted Stock

In 2009, 444,250 shares of restricted stock that vest as service requirements are met were granted

to certain directors and management; and 15,000 shares of restricted stock that will vest as performance
measures are met were granted to one management employee. All restricted shares granted in 2009
were granted under the 2006 Plan. In 2009, 38,305 shares (net of shares withheld for payment of
income taxes) of restricted stock vested as directors’ and management service requirements were met;
and 19,785 shares (net of shares withheld for payment of income taxes) of previously granted restricted
stock vested in connection with the termination of the Company’s former President and Chief
Executive Officer in May 2009. The weighted average grant-date fair value of restricted stock granted
during 2009 and 2008 was $7.17 and $23.37 per share, respectively.

A summary of the activity for nonvested restricted stock awards as of and for the year ended

December 31, 2009 is presented below:

Nonvested balance at December 31, 2008 . . . . . . . . . . . . . . . .
Granted . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Vested . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Forfeited or Cancelled . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

121,295
459,250
(58,090)
(74,154)

Nonvested balance at December 31, 2009 . . . . . . . . . . . . . . . .

448,301

Weighted
Average
Grant-Date
Fair Value

$26.70
$ 7.17
$10.66
$23.62

$ 8.25

12. RELATED PARTY TRANSACTIONS

The Company was leasing to its then current President and Chief Executive Officer for $3,500 per

month, which represents the fair value, a residential property under a lease agreement that was
terminated in August 2009. The property was purchased in 2005 for $2.6 million.

The Company has a 51% ownership interest in Bay Holdings, the owner and developer of The
Residences at Kapalua Bay. The other members of Bay Holdings, through wholly owned affiliates, are
Marriott, which owns a 34% interest in Bay Holdings, and ER which owns the remaining 15% interest
in Bay Holdings. Stephen M. Case, a director and largest shareholder of the Company, is the
Chairman, Chief Executive Officer, and indirect beneficial owner of Revolution LLC, which is the
indirect majority owner of ER, and thus Mr. Case may be deemed to have a beneficial interest in Bay
Holdings.

13. INCOME TAXES

The Company accounts for uncertain tax positions in accordance with the provisions of ASC Topic
740. This interpretation prescribes a recognition threshold and measurement attribute for the financial
statement recognition and measurement of a tax position taken or expected to be taken in a tax return.
In 2009 and 2008, the Company recorded $939,000 and $856,000 of interest expense and penalties for
unrecognized tax benefits. As of December 31, 2009 and 2008, total accrued interest and penalties were
$2,045,000 and $1,106,000, respectively.

The Company recognizes interest accrued related to unrecognized tax benefits as interest expense
and penalties in general & administrative expense in its statement of operations, and such amounts are
included in income taxes payable on the Company’s consolidated balance sheet. A reconciliation of the
beginning and ending amount of unrecognized tax benefits is as follows:

Balance at beginning of year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Additions based on tax positions related to the current year . . . . . . . .
Additions for tax positions of prior years . . . . . . . . . . . . . . . . . . . . .
Reductions for settlements with taxing authorities . . . . . . . . . . . . . . .
Expiration of statutes of limitation . . . . . . . . . . . . . . . . . . . . . . . . . .

2009

2008

(in thousands)
$ 748
$945
31
20
—
754
— (378)
(210)
(66)

Balance at end of year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

$899

$ 945

At December 31, 2009 and 2008, $13.6 million and $13.3 million, respectively, of the unrecognized

tax benefits represent taxes on revenues for which the timing of the taxability is uncertain and the
liability for such taxes has been recognized as deferred tax liabilities. The acceleration of the

recognition of such income would not affect the estimated annual effective tax rate, but would
accelerate the payment of income taxes to earlier periods and would result in additional interest
expense. At December 31, 2009 and 2008, there were $505,000 and $551,000 of unrecognized tax
benefits that, if recognized, would affect the effective tax rate.

The components of the income tax benefit for 2009 and 2008 were as follows:

2009

2008

(in thousands)

Current

Federal . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
State . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

$(4,362) $ (7,958)
(867)

(221)

Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(4,583)

(8,825)

Deferred

Federal . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
State . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

—
—

—

(2,684)
(205)

(2,889)

Income tax benefit—continuing operations . . . . . . . . . . . . . . . .

$(4,583) $(11,714)

The Worker, Homeownership, and Business Assistance Act of 2009 was enacted on November 6,
2009, and one of its provisions increased the net operating carryback period for large businesses from
two years to up to five years. The amendment was effective for net operating losses arising in taxable
years ending after December 31, 2007. The tax effect of the amendment was that the Company would
be eligible to carryback more of its 2008 tax net operating loss and obtain $4.4 million of refunds for
which a current tax benefit has been recorded by the Company in 2009.

Reconciliations between the total income tax benefit and the amount computed using the statutory

federal rate of 35% were as follows:

Federal income tax benefit at statutory rate . . . . . . . . . . . . . . .
Adjusted for State income taxes, net of effect on federal

2009

2008

(in thousands)
$(32,555) $(22,851)

income taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Valuation allowance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Provision for uncertain tax positions . . . . . . . . . . . . . . . . . .
Permanent differences and other . . . . . . . . . . . . . . . . . . . . .

2,373
25,543
—
56

873
9,149
597
518

Income tax benefit—continuing operations . . . . . . . . . . . . . . .

$ (4,583) $(11,714)

Deferred tax assets (liabilities) were comprised of the following temporary differences as of

December 31, 2009 and 2008:

2009

2008

(in thousands)

Joint ventures and other investments . . . . . . . . . . . . . . . . . . . .
Net operating loss and tax credit carryforwards . . . . . . . . . . . .
PGC deferred credit
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Accrued retirement benefits . . . . . . . . . . . . . . . . . . . . . . . . . .
Stock compensation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Tax deferred land sales . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Accrued liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Deferred revenue . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Inventory . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Allowance for doubtful accounts . . . . . . . . . . . . . . . . . . . . . . .

$ 19,797
$ 23,438
13,413
11,245
3,272
1,312
998
757
505
234
179

Total deferred tax assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

75,150

—
21,889
—
17,043
3,187
—
—
—
788
615
750

44,272

Valuation allowance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(71,181)

(30,115)

Deferred condemnation proceeds . . . . . . . . . . . . . . . . . . . . . .
Joint ventures and other investments . . . . . . . . . . . . . . . . . . . .
Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Property net book value . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Tax deferred land sales . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(2,562)
—
—
(1,407)
—

(6,224)
(3,925)
(3,447)
(518)
(43)

Total deferred tax liabilities . . . . . . . . . . . . . . . . . . . . . . . . . .

(3,969)

(14,157)

Net deferred tax assets (liabilities) . . . . . . . . . . . . . . . . . . . . .

— $

—

As of December 31, 2008, valuation allowances have been established to reduce future tax benefits
expected to be realized. The Company had $38.4 million in federal net operating loss carryforwards at
December 31, 2009, that expire in 2028 through 2029. Net operating loss and tax credit carryforwards
for State income tax purposes that expire in 2012 through 2029 totaled $81.6 million and $2.8 million,
respectively, at December 31, 2009. In 2008, the State of Hawaii Department of Taxation completed its
examination of the Company’s state income tax returns for the years 2000 through 2005. The
Company’s federal income tax returns for 2005 through 2008 are currently under examination.
Depending on the outcome of the federal examination, certain unrecognized tax benefits may decrease.
The Company currently does not have enough information to estimate the range of any possible
adjustments.

14. DISCLOSURE ABOUT FAIR VALUE OF FINANCIAL INSTRUMENTS

Except as indicated below, the carrying amount of the Company’s financial instruments

approximates fair value.

Long-Term Debt:

The fair value of long-term debt was estimated based on rates currently available to the Company

for debt with similar terms and remaining maturities. The carrying amount of long-term debt at
December 31, 2009 and 2008 was $94,223,000 and $133,959,000, respectively, and the estimated fair
value was $94,312,000 and $126,708,000, respectively.

15. SEGMENT INFORMATION

The Company’s reportable operating segments are Resort and Community Development based on

how the Company’s chief operating decision maker makes decisions about allocating resources and
assessing performance. Each segment is a line of business requiring different technical and marketing
strategies. In December 2009, all agriculture operations were ceased and the Company’s Agriculture
segment is reported as discontinued operations for 2009 (see Note 7).

Resort includes the ongoing operations at the Kapalua Resort on Maui. These operations include
two championship golf courses, a tennis facility, a vacation rental program, several retail outlets, resort
activities department and a spa beginning in mid-2009. Operations of the vacation rental program and
the resort activities were transferred to third parties in December 2009 and the Company began to
receive rental and license income that is reported in the Community Development segment.

Community Development includes the Company’s real estate entitlement, development,

construction, sales and leasing activities. This segment also includes the operations of Kapalua Realty
Company, a general brokerage real estate company located within Kapalua Resort, Kapalua Water
Company and Kapalua Waste Treatment Company, the Company’s Public Utilities Commission-
regulated water and sewage transmission operations.

The accounting policies of the segments are the same as those described in Summary of Significant

Accounting Policies, Note 1.

The financial information for each of the Company’s reportable segments for 2009 and 2008

follows:

2009
Operating revenues(1) . . . . . . . . . . . . . . . . . . . . . . . . .

Operating loss(2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Interest expense . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Interest income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Loss from continuing operations before income tax

benefit . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Resort

Community
Development

Other(6)

Consolidated

$ 29,793

$ 19,865

696

$ 50,354

(16,104)

(62,608)

(4,342)

Depreciation and amortization . . . . . . . . . . . . . . . . . . .
Equity in losses of affiliates . . . . . . . . . . . . . . . . . . . . .
Investment in affiliates . . . . . . . . . . . . . . . . . . . . . . . . .
Capital expenditures(3) . . . . . . . . . . . . . . . . . . . . . . . .

4,227

1,099

2,050
(47,187)
—
1,226

2,581

—

Assets relating to continuing operations(4) . . . . . . . . . .
Other assets(5) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

46,132

44,089

21,403

2008
Operating revenues(1) . . . . . . . . . . . . . . . . . . . . . . . . .

Loss from continuing operations before income tax

benefit . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

$ 37,439

$ 11,394

$ 2,221

$ 51,054

(19,710)

(40,007)

(3,690)

4,076

4,551

1,590
(18,839)
41,683
19,005

1,353

199

Assets relating to continuing operations(4) . . . . . . . . . .
Other assets(5) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

54,793

107,424

50,270

$ (83,054)
(10,452)
492

$ (93,014)

8,858
(47,187)
—
2,325

111,624
16,424

$128,048

$ (63,407)
(2,436)
553

$ (65,290)

7,019
(18,839)
41,683
23,755

212,487
35,713

$248,200

(1) Amounts are principally revenues from external customers and exclude equity in earnings of

affiliates and interest income. Intersegment revenues were insignificant.

(2) ‘‘Operating loss’’ is total operating revenues, less operating costs and expenses, plus equity in
earnings and losses of affiliates (excludes interest income, interest expense and income taxes).

(3) Primarily includes expenditures for property, deferred costs and contributions to affiliates.

(4) ‘‘Segment assets’’ are located in the United States.

(5) Consists primarily of assets held for sale and other assets related to discontinued operations.

(6) Consists primarily of miscellaneous corporate transactions and assets.

16. COMMITMENTS AND CONTINGENCIES

The Company had a contractual obligation to the LPGA to sponsor an annual golf tournament for
five years beginning in October 2008. The cost of such a tournament, including the production and the
purse is significant and the Company was seeking a title sponsor to defray part of the cost. In June
2009, we announced that due to a lack of a title sponsor, we were unable to hold the 2009 Ladies
Professional Golf Association (LPGA) event that was scheduled for October. This has resulted in a
dispute with the LPGA, which can be resolved by mediation and if necessary by binding arbitration. By
agreement between the parties, mediation has been suspended through October 2010 and we expect to
pay $700,000 of which 50% will be applied towards sponsorship of an event if the parties are able to
structure a future event. The Company is not able to estimate the losses that may be incurred if the
Company is not able to further perform under the agreement and, accordingly, no additional provision
for losses relating to this dispute has been recorded in the consolidated financial statements. Due to
the liquidity situation of the Company, a judgment against the Company could have a material negative
impact to the Company’s ability to maintain minimum liquidity required in its debt covenants.

The Company has various unsettled contractual obligations with regard to its now terminated
Agriculture segment operations and has recorded its best estimate of the potential loss of $3.3 million,
which is included in contract termination accruals in the consolidated balance sheet at December 31,
2009.

On September 1, 2009, Yamamura filed a lawsuit against the Company, which alleges that the

Company materially breached the Planting Agreement by not providing a planting schedule for 2009
and by asking Yamamura to cease planting pineapple for the Company until further notice. The lawsuit
further alleges that the Company unilaterally restricted and impaired the value of Yamamura’s benefits
under the Planting Agreement. The Company intends to vigorously defend the lawsuit, but has
recorded an immaterial amount as the low end of the range of its potential exposure under the lawsuit.

Pursuant to a previous agreement, the Company was committed to purchase from Bay Holdings

the Amenities upon their completion in 2009 at the actual construction cost of approximately
$35 million. The Company is currently in discussions with the other members of Bay Holdings to
negotiate the terms of the purchase and sale agreement including the purchase and payment terms, and
are discussing whether the Company will even be required to purchase the Amenities. The other
members of Bay Holdings are generally open to revisions to the purchase terms or relieving the
Company from its commitment to purchase the Amenities in return for the Company’s best efforts to
continue to operate the Amenities; however, final terms of the purchase of the Amenities remain to be
resolved with the other members and lenders of Bay Holdings.

Pursuant to loan agreements of certain equity investments, the Company and the other members
of the respective joint ventures have guaranteed to lenders each investors pro rata share of costs and
losses that may be incurred by the lender as a result of the occurrence of specified triggering events.
These guarantees do not include full payment of the loans. At December 31, 2009, the Company has
recognized the estimated fair value of its obligations under these agreements (see Note 4).

In connection with the PGC sale and leaseback, the Company is obligated to replace the irrigation
system prior to the end of the two-year leaseback term. The replacement costs are capped at $5 million
under the terms of the agreement (see Note 8).

In connection with a Honolua Ridge Phase II lot sale in 2007, the Company deferred the
recognition of $4.3 million of revenues because of contingencies that could result in the Company
becoming obligated to repurchase the lot from the buyer. The buy-back provision will expire in 2010.

In February 2010, the Company received notification from the Internal Revenue Service proposing

changes to the Company’s employment tax withholdings. The Company currently does not expect the

ultimate resolution of the matter to be material and has recorded an immaterial amount as the low end
of the range of its potential exposure.

Pursuant to a 1999 settlement agreement with the County of Maui, the Company and several
chemical manufacturers have agreed that until December 1, 2039, they will pay for 90% of the capital
cost to install filtration systems in any future water wells if the presence of a nematocide commonly
known as DBCP exceeds specified levels, and for the ongoing maintenance and operating cost for
filtration systems on existing and future wells. The Company estimated its share of the cost to operate
and maintain the filtration systems for the existing wells and its share of the cost of a letter of credit
used to secure its obligations, and recorded a liability of $250,000 in 1999. The Company recognized an
additional liability and expense of $258,000 since 1999; and paid $363,000 for its share of the cost of
the letter of credit securing its obligation and the capital costs to install a filtration system for an
existing well. The Company is presently not aware of any plans by the County of Maui to install other
filtration systems or to drill any water wells in areas affected by agricultural chemicals. Accordingly, a
reserve for costs relating to any future wells has not been recorded because the Company is not able to
reasonably estimate the amount of liability (if any).

In addition to the matters noted above, there are various other claims and legal actions pending

against the Company. In the opinion of management, after consultation with legal counsel, the
resolution of these other matters is not expected to have a material adverse effect on the Company’s
financial position or results of operations. The Company, as an investor in various affiliates
(partnerships, limited liability companies), may under specific circumstances be called upon to make
additional capital contributions.

At December 31, 2009, the Company had commitments under other signed contracts totaling
$2.3 million which primarily relate to real estate development projects, and are payable through 2014.

17. CORRECTION OF PREVIOUSLY ISSUED FINANCIAL STATEMENTS

Subsequent to the issuance of the Company’s 2008 consolidated financial statements, the Company

concluded that cash flows from the sale of undeveloped land should have been reflected within the
operating activities section of the cash flow statement rather than within the investing activities section
because the sale of undeveloped land is considered a principal business activity of the Community
Development segment. As a result, the accompanying consolidated statement of cash flows for the year
ended December 31, 2008 has been corrected.

The following is a summary of the impact of the correction on the consolidated statement of cash

flows for the year ended December 31, 2008:

OPERATING ACTIVITIES
(Gain) Loss on property disposals . . . . . . . . . . .
Accounts receivable . . . . . . . . . . . . . . . . . . . . .
Trade accounts payable . . . . . . . . . . . . . . . . . . .
NET CASH USED IN OPERATING

As
Previously
Reported

Adjustments

As Corrected

(in thousands)

$ (2,836)
1,030
(4,412)

$ 4,092
2,780
(152)

$ 1,256
3,810
(4,564)

ACTIVITIES . . . . . . . . . . . . . . . . . . . . . . . .

(51,797)

6,720

(45,077)

INVESTING ACTIVITIES
Proceeds from disposals of property . . . . . . . . .
NET CASH USED IN INVESTING

8,942

(6,720)

2,222

ACTIVITIES . . . . . . . . . . . . . . . . . . . . . . . .

(17,229)

(6,720)

(23,949)

MAUI LAND & PINEAPPLE COMPANY, INC.
AND SUBSIDIARIES

VALUATION AND QUALIFYING ACCOUNTS
FOR THE YEARS ENDED DECEMBER 31, 2009 AND 2008

SCHEDULE II

DESCRIPTION

Allowance for Doubtful

Accounts
2009 . . . . . . . . . . . . . . . . .
2008 . . . . . . . . . . . . . . . . .

Reserve for Environmental

Liability
2009 . . . . . . . . . . . . . . . . .
2008 . . . . . . . . . . . . . . . . .

BALANCE
AT

ADDITIONS
(DEDUCTIONS)
BEGINNING TO COSTS AND
OF PERIOD

EXPENSES

ADDITIONS
(DEDUCTIONS)
TO OTHER
ACCOUNTS

(in thousands)

DEDUCTIONS

BALANCE
AT END OF
PERIOD

$658
327

$176
204

$ (72)
1,846

3
3

$46
8

$—
—

$ (180)(a)
(1,523)(a)

$452
658

(32)(b)
(31)(b)

$147
176

(a) Write off of uncollectible accounts

(b) Payments

Item 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND

FINANCIAL DISCLOSURE

None.

Item 9A. CONTROLS AND PROCEDURES

EVALUATION OF DISCLOSURE CONTROLS AND PROCEDURES

Our management, with the participation of our Interim Chief Executive Officer and Chief
Financial Officer, have evaluated the effectiveness of our disclosure controls and procedures (as such
term is defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934
(‘‘Exchange Act’’), as amended) as of the end of the period covered by this report.

Based upon the foregoing, our management has concluded that, as of December 31, 2009, our
disclosure controls and procedures are effective to ensure that information required to be disclosed by
us in reports we file or submit under the Exchange Act is recorded, processed, summarized and
reported, within the time periods specified in the Commission’s rules and forms and to ensure that
information required to be disclosed by us in the reports that we file or submit under the Exchange Act
is accumulated and communicated to our management, including our principal executive and principal
financial officers, or persons performing similar functions, as appropriate to allow timely decisions
regarding required disclosure.

MANAGEMENT’S ANNUAL REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING

Our management has the responsibility for establishing and maintaining adequate internal control

over financial reporting. Internal control over financial reporting is defined in Rule 13a-15(f) and
15d-15(f) under the Exchange Act, as a process designed by, or under the supervision of, the
Company’s principal executive and principal financial officer and effected by our board of directors,
management and other personnel to provide reasonable assurance regarding the reliability of financial
reporting and the preparation of financial statements for external purposes in accordance with
accounting principles generally accepted in the United States of America and includes those policies
and procedures that:

(cid:127) Pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the

transactions and dispositions of our assets;

(cid:127) Provide reasonable assurance that transactions are recorded as necessary to permit preparation

of financial statements in accordance with accounting principles generally accepted in the United
States of America, and that receipts and expenditures of the company are being made only in
accordance with authorizations of our management and directors; and

(cid:127) Provide reasonable assurance regarding prevention or timely detection of unauthorized

acquisition, use or disposition of our assets that could have a material effect on the consolidated
financial statements.

Because of its inherent limitations, internal control over financial reporting only provides

reasonable assurance with respect to financial statement presentation and preparation. Projections of
any evaluation of effectiveness to future periods are subject to the risks that controls may become
inadequate because of changes in conditions, or that the degree of compliance with the policies or
procedures may deteriorate.

Management assessed the effectiveness of the Company’s internal control over financial reporting

as of December 31, 2009. In making this assessment, Management used the criteria set forth by the
Committee of Sponsoring Organizations of the Treadway Commission (COSO) in Internal Control—
Integrated Framework. Based on its assessments, Management believes that, as of December 31, 2009,

the Company’s internal control over financial reporting is effective at a reasonable assurance level. The
Company’s independent registered public accounting firm, Deloitte & Touche LLP, has issued an audit
report on the Company’s internal control over financial reporting. That report appears on pages 34 to
35 of this Form 10-K.

CHANGES IN INTERNAL CONTROLS OVER FINANCIAL REPORTING

As discussed in Note 17 to our consolidated financial statements, subsequent to the issuance of the

Company’s Annual Report on Form 10-K for the year ended December 31, 2008, the Company
concluded that cash flows from the sale of certain land transactions should have been reflected within
the operating activities section of the cash flow statement rather than within the investing activities
section. As a result, the consolidated statement of cash flows for the year ended December 31, 2008
has been corrected.

The correction was the result of a material weakness in our internal control over financial
reporting with respect to the controls over the proper classification of certain land transactions.
Specifically, we did not have adequately designed procedures to properly review such real estate
transactions and determine how they should be presented in the statement of cash flows.

As part of our year-end financial close and reporting process for 2009, we reevaluated our controls
over the accounting and reporting for real estate transactions and redesigned them to prevent a similar
misstatement from occurring in the future, including the development of policies to address and review
such transactions, and ensuring that the appropriate level of review is performed on all such real estate
transactions to ensure they are reported properly. Management tested the design and operating
effectiveness of these redesigned controls that were implemented during our year-end closing process
for 2009, and we believe that we have remediated the material weakness as described above, as of
December 31, 2009.

Other than those described above, there were no changes in our internal control over financial
reporting during the quarter ended December 31, 2009 that have materially affected, or are reasonably
likely to materially affect, our internal control over financial reporting.

PART III

Item 10. DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE

The information set forth under ‘‘—Section 16(a) Beneficial Ownership Reporting Compliance’’
and ‘‘Election of Directors’’ in the Maui Land & Pineapple Company, Inc. Proxy Statement, to be filed
no later than 120 days after the close of our fiscal year ended December 31, 2009, is incorporated
herein by reference.

Our Board of Directors approved the Amended and Restated Code of Ethics in March 2008 that
covers the Principal Executive Officer, Principal Financial Officer, Principal Accounting Officer and all
other employees of the Company. A copy of the Code of Ethics will be furnished, free of charge, upon
written request to: Corporate Secretary, Maui Land & Pineapple Company, Inc., P. O. Box 187,
Kahului, Hawaii 96733-6687; or email: communications@mlpmaui.com.

Item 11. EXECUTIVE COMPENSATION

The information set forth under ‘‘Executive Compensation,’’ and ‘‘—Director Compensation’’ in
the Maui Land & Pineapple Company, Inc. Proxy Statement, to be filed no later than 120 days after
the close of our fiscal year ended December 31, 2009, is incorporated herein by reference.

The material incorporated herein by reference to the material under the caption ‘‘—Compensation
Committee Report’’ in the Proxy Statement shall be deemed furnished, and not filed, in this Report on

Form 10-K and shall not be deemed incorporated by reference into any filing under the Securities Act
of 1933, as amended, or the Securities Exchange Act of 1934, as amended, as a result of this furnishing,
except to the extent that we specifically incorporates it by reference.

Item 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

AND RELATED STOCKHOLDER MATTERS

The information set forth under ‘‘Security Ownership of Certain Beneficial Owners’’ in the Maui

Land & Pineapple Company, Inc. Proxy Statement, to be filed no later than 120 days after the close of
our fiscal year ended December 31, 2009, is incorporated herein by reference, with the exception of the
information regarding securities authorized for issuance under our equity compensation plans, which is
set forth in Item 5 of this annual report on Form 10-K under the heading ‘‘Securities Authorized For
Issuance under Equity Compensation Plans’’ and is incorporated herein by reference.

Item 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR

INDEPENDENCE

The information set forth under ‘‘Certain Relationship and Related Transactions,’’ and ‘‘—Director

Independence’’ in the Maui Land & Pineapple Company, Inc. Proxy Statement, to be filed no later
than 120 days after the close of our fiscal year ended December 31, 2009, is incorporated herein by
reference.

Item 14. PRINCIPAL ACCOUNTANT FEES AND SERVICES

Information set forth under ‘‘Independent Registered Public Accounting Firm’’ in the Maui

Land & Pineapple Company, Inc. Proxy Statement, to be filed no later than 120 days after the close of
our fiscal year ended December 31, 2009, is incorporated herein by reference.

Item 15. EXHIBITS AND FINANCIAL STATEMENT SCHEDULE

Financial Statements

PART IV

The following Financial Statements of Maui Land & Pineapple Company, Inc. and subsidiaries and

Report of Independent Registered Public Accounting Firm are included in Item 8 of this report:

Consolidated Statements of Operations and Comprehensive Loss for the Years Ended

December 31, 2009 and 2008

Consolidated Balance Sheets, December 31, 2009 and 2008
Consolidated Statements of Stockholders’ Equity (Deficit) for the Years Ended December 31,

2009 and 2008

Consolidated Statements of Cash Flows for the Years Ended December 31, 2009 and 2008
Notes to Consolidated Financial Statements

Financial Statement Schedule

The following Financial Statement Schedule of Maui Land & Pineapple Company, Inc. and

subsidiaries is filed herewith:

II. Valuation and Qualifying Accounts for the Years Ended December 31, 2009 and 2008.

3. Exhibits

Exhibit No.

3.1

3.2

10.1

10.2

10.3

10.4

10.5

10.6

10.7†

10.8†

10.9

10.10

Restated Articles of Association, as of May 7, 2007 (Filed as Exhibit 3.1 to Form 10-K/A
for the year ended December 31, 2007, filed April 1, 2008, and incorporated herein by
reference).

Bylaws (Amended as of December 8, 2008). (Filed as Exhibit 3.1 to Form 8-K filed
December 11, 2008 and incorporated herein by reference).

Revolving Line of Credit Loan Agreement between American AgCredit, FLCA, successor
in interest to Pacific Coast Farm Credit Services, ACA and Maui Land & Pineapple
Company, Inc., dated September 1, 2005 (Filed as Exhibit 4 to Form 10-Q for the quarter
ended September 30, 2005, filed November 14, 2005, and incorporated herein by
reference).

First Amendment to Revolving Line of Credit Loan Agreement between American
AgCredit, FLCAand Maui Land & Pineapple Company, Inc., dated December 4, 2006
(Filed as Exhibit 10.1 to Form 8-K filed December 19, 2006 and incorporated herein by
reference).

Second Amendment to Revolving Line of Credit Loan Agreement between American
AgCredit, FLCA and Maui Land & Pineapple Company, Inc., effective as of
September 30, 2008 (Filed as Exhibit 10.3 to Form 10-K for the year ended December 31,
2008, filed March 31, 2009, and incorporated herein by reference).

Third Amendment to Revolving Line of Credit Loan Agreement between American
AgCredit, FLCA and Maui Land & Pineapple Company, Inc., effective as of
December 31, 2008 (Filed as Exhibit 10.4 to Form 10-K for the year ended December 31,
2008, filed March 31, 2009, and incorporated herein by reference).

Fourth Amendment to Revolving Line of Credit Loan Agreement between American
AgCredit, FLCA and Maui Land & Pineapple Company, Inc., effective as of
December 31, 2008 (Filed as Exhibit 10.5 to Form 10-K for the year ended December 31,
2008, filed March 31, 2009, and incorporated herein by reference).

Fifth Amendment to Revolving Line of Credit Loan Agreement entered into by and
between American AgCredit, FLCA and Maui Land & Pineapple Company, Inc., effective
as of October 9, 2009 (Filed as Exhibit 10.2 to Form 10-Q for the quarter ended
September 30, 2009, filed November 4, 2009, and incorporated herein by reference).

Supplemental Executive Retirement Plan (effective as of January 1, 1988) (Filed as
Exhibit (10)B to Form 10-K for the year ended December 31, 1988, and incorporated
herein by reference).

Maui Land & Pineapple Company, Inc. 2006 Equity and Incentive Award Plan
(Incorporated by reference to Appendix B of the Definitive Proxy Statement on
Schedule 14A filed on March 27, 2006).

Limited Liability Company Agreement of Kapalua Bay Holdings, LLC, dated August 31,
2004 (Filed as Exhibit 10(A) to Form 10-Q for the quarter ended September 30, 2004,
filed November 12, 2004, and incorporated herein by reference).

Settlement Agreement and Release of All Claims (Board of Water Supply of the County
of Maui vs. Shell Oil Company, et al.) (Filed as Exhibit 10.5(i) to Form 10-K for the year
ended December 31, 1999, filed March 24, 2000, and incorporated herein by reference).

Exhibit No.

10.11

10.12

10.13

10.14

10.15

10.16

10.17†

10.18†

Fee and Leasehold Mortgage, Security Agreement and Fixture Filing made by Kapalua
Bay, LLC in favor of Lehman Brothers Holdings, Inc. (Filed as Exhibit 10.2 to Form 8-K
filed July 20, 2006 and incorporated herein by reference).

Completion Guaranty made by Maui Land & Pineapple Company, Inc., The Ritz-Carlton
Development Company, Inc. and Exclusive Resorts Development Company, LLC in favor
of Lehman Brothers Holdings, Inc. (Filed as Exhibit 10.4 to Form 8-K filed July 20, 2006
and incorporated herein by reference).

Recourse Guaranty made by Maui Land & Pineapple Company, Inc., The Ritz-Carlton
Development Company, Inc. and Exclusive Resorts Development Company, LLC in favor
of Lehman Brothers Holdings, Inc. (Filed as Exhibit 10.5 to Form 8-K filed July 20, 2006
and incorporated herein by reference).

Amended and Restated Construction Loan Agreement, dated as of February 11, 2009, by
and among Kapalua Bay, LLC, Lehman Brothers Holdings Inc., Central Pacific Bank,
Landesbank Baden-W¨urttemberg, Deutsche Hypothekenbank, Swedbank AB, New York
Branch, and MH Kapalua Venture, LLC (filed as Exhibit 10.55 to Form 10-K for the year
ended December 31, 2008, filed March 31, 2009).

Master Assignment and Assumption and Modification Agreement, dated as of
February 11, 2009, by and among Kapalua Bay, LLC, Lehman Brothers Holdings Inc.,
Central Pacific Bank, Landesbank Baden-W¨urttemberg, Deutsche Hypothekenbank,
Swedbank AB, New York Branch, and MH Kapalua Venture, LLC (filed as Exhibit 10.56
to Form 10-K for the year ended December 31, 2008, filed March 31, 2009).

Second Omnibus Amendment to Construction Loan Documents, dated as of February 11,
2009, by and among Kapalua Bay, LLC, Lehman Brothers Holdings Inc., Central Pacific
Bank, Landesbank Baden-W¨urttemberg, Deutsche Hypothekenbank, Swedbank AB, New
York Branch, and MH Kapalua Venture, LLC (filed as Exhibit 10.57 to Form 10-K for the
year ended December 31, 2008, filed March 31, 2009).

Form of Award Grant Notice and Stock Option Agreement, pursuant to the Maui Land &
Pineapple Company, Inc. 2006 Equity and Incentive Award Plan (Filed as Exhibit 10.9 to
Form 10-Q for the quarter ended June 30, 2006, filed August 8, 2006, and incorporated
herein by reference).

Form of Restricted Stock Award Grant Notice and Restricted Stock Award Agreement,
pursuant to the Maui Land & Pineapple Company, Inc. 2006 Equity and Incentive Award
Plan (Filed as Exhibit 10.10 to Form 10-Q for the quarter ended June 30, 2006, filed
August 8, 2006, and incorporated herein by reference).

10.19(cid:1) Sale, Purchase and Lease Termination Agreement, entered into on March 28, 2007. (Filed

as Exhibit 10.1 to Form 10-Q for the quarter ended March 31, 2007, filed May 9, 2007,
and incorporated herein by reference).

10.20(cid:1) Second Amended and Restated Limited Liability Company Agreement of W2005 Kapalua/
Gengate Hotel Holdings L.L.C., entered into on March 28, 2007 (Filed as Exhibit 10.2 to
Form 10-Q for the quarter ended March 31, 2007, filed May 9, 2007, and incorporated
herein by reference).

Exhibit No.

10.21

10.22

10.23

10.24

10.25

10.26†

10.27

10.28

10.29

10.30

10.31†

10.32†

Amended and Restated Credit Agreement, dated as of October 9, 2009, by and among
Maui Land & Pineapple Company, Inc., and each of the financial institutions initially a
signatory thereto, and Wells Fargo Bank, National Association, as Administrative Agent
(Filed as Exhibit 10.1 to Form 10-Q for the quarter ended September 30, 2009 and
incorporated herein by reference).

Fee and Leasehold Mortgage with Absolute Assignment of Leases and Rents, Security
Agreement and Fixture Filing, Entered into on November 15, 2007 (Filed as Exhibit 10.2
to Form 8-K filed November 19, 2007 and incorporated herein by reference).

Securities Purchase Agreement between Maui Land & Pineapple Company, Inc., and
Ohana Holdings, LLC and ZG Ventures, LLC entered into on March 12, 2007 (Filed as
Exhibit 10.1 to Form 8-K filed March 15, 2007 and incorporated herein by reference).

Registration Rights Agreement between Maui Land & Pineapple Company, Inc. and
Ohana Holdings, LLC and ZG Ventures, LLC entered into on March 12, 2007 (Filed as
Exhibit 10.2 to Form 8-K filed March 15, 2007 and incorporated herein by reference).

Amendment No. 1 to Registration Rights Agreement, entered into as of March 10, 2008
(Filed as Exhibit 10.50 to Form 10-K/A for the year ended December 31, 2007, filed
April 1, 2009, and incorporated herein by reference).

Restricted Share Agreement and Award Grant Notice, dated as of May 7, 2008, by and
between Maui Land & Pineapple Company, Inc. and Robert I. Webber (Filed as
Exhibit 10.1 to Form 10-Q for the quarter ended March 31, 2008, filed May 7, 2008, and
incorporated herein by reference).

Waiver and Amendment No. 2 to Registration Rights Agreement, dated as of April 30,
2008, by and among Maui Land & Pineapple Company, Inc., Ohana Holdings, LLC, and
ZG Ventures, LLC.(1) (Filed as Exhibit 10.3 to Form 10-Q for the quarter ended
March 31, 2008, filed May 7, 2008, and incorporated herein by reference).

Securities Purchase Agreement, dated as of July 27, 2008, by and between Maui Land &
Pineapple, Inc. and the investors named therein (Filed as Exhibit 10.1 to Form 8-K filed
July 29, 2008 and incorporated herein by reference).

Registration Rights Agreement, dated as of July 27, 2008, by and between Maui Land &
Pineapple, Inc. and the investors named therein (Filed as Exhibit 10.2 to Form 8-K filed
July 29, 2008 and incorporated herein by reference).

Form of Senior Secured Convertible Note (Filed as Exhibit 10.3 to Form 8-K dated
July 27, 2008 and incorporated herein by reference).

Restricted Stock Award Grant Notice and Agreement dated August 3, 2009, between
Maui Land & Pineapple Company, Inc. and Warren H. Haruki (Filed as Exhibit 10.1 to
Form 10-Q for the quarter ended June 30, 2009, filed August 4, 2009, and incorporated
herein by reference).

Restricted Stock Award Grant Notice and Agreement dated August 3, 2009, between
Maui Land & Pineapple Company, Inc. and John P. Durkin (Filed as Exhibit 10.2 to
Form 10-Q for the quarter ended June 30, 2009, filed August 4, 2009, and incorporated
herein by reference).

Exhibit No.

10.33†

10.34†

10.35†

10.36†

10.37†

Restricted Stock Award Grant Notice and Agreement dated August 3, 2009, between
Maui Land & Pineapple Company, Inc. and Ryan L. Churchill (Filed as Exhibit 10.3 to
Form 10-Q for the quarter ended June 30, 2009, filed August 4, 2009, and incorporated
herein by reference).

Stock Option Agreement and Stock Option Grant Notice dated as of May 4, 2009,
between Maui Land & Pineapple Company, Inc. and Warren H. Haruki (Filed as
Exhibit 10.1 to Form 10-Q for the quarter ended March 31, 2009, filed May 6, 2009, and
incorporated herein by reference).

Restricted Share Agreement dated May 4, 2009, between Maui Land & Pineapple
Company, Inc. and Warren H. Haruki (Filed as Exhibit 10.2 to Form 10-Q for the quarter
ended March 31, 2009, filed May 6, 2009, and incorporated herein by reference).

Stock Option Agreement and Stock Option Grant Notice dated as of May 4, 2009,
between Maui Land & Pineapple Company, Inc. and John P. Durkin (Filed as Exhibit 10.3
to Form 10-Q for the quarter ended March 31, 2009, filed May 6, 2009, and incorporated
herein by reference).

Restricted Share Agreement dated May 4, 2009, between Maui Land & Pineapple
Company, Inc. and John P. Durkin (Filed as Exhibit 10.4 to Form 10-Q for the quarter
ended March 31, 2009, filed May 6, 2009, and incorporated herein by reference).

21.*

Subsidiaries of Maui Land & Pineapple Company, Inc.

23.1*

31.1*

31.2*

Consent of Deloitte & Touche LLP, Independent Registered Public Accounting Firm,
dated March 26, 2010.

Certification of Chief Executive Officer Pursuant to Rule 13a-14(a) / 15d-14(a) of the
Securities Exchange Act of 1934.

Certification of Chief Financial Officer Pursuant to Rule 13a-14(a) / 15d-14(a) of the
Securities Exchange Act of 1934.

32.1**

Certification of Chief Executive Officer and Chief Financial Officer Pursuant to 18 U.S.C.
Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

Filed herewith.

** Furnished herewith and not ‘‘filed’’ for purposes of Section 18 of the Securities Exchange Act of

1934, as amended.

† Management contract or compensatory plan or arrangement required to be filed as an exhibit to

this Form pursuant to Item 15(c) of Form 10-K.

(cid:1) Portions of this exhibit have been omitted pursuant to a request for confidential treatment under
Rule 24-b-2 of the Exchange Act. The omitted material has been separately filed with the
Securities and Exchange Commission.

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the

Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly
authorized, on March 26, 2010.

SIGNATURES

MAUI LAND & PINEAPPLE COMPANY, INC.

By:

/s/ WARREN H. HARUKI

Warren H. Haruki
Interim Chief Executive Officer

Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed

below by the following persons on behalf of the Registrant and in the capacities and on the dates
indicated.

By /s/ WARREN H. HARUKI

Warren H. Haruki, Chairman of the Board &
Interim Chief Executive Officer (Principal
Executive Officer)

By /s/ JOHN H. AGEE

John H. Agee, Director

By /s/ STEPHEN M. CASE

Stephen M. Case, Director

By /s/ DAVID C. COLE

David C. Cole, Director

By /s/ WALTER A DODS JR.

Walter A. Dods Jr., Director

By /s/ MILES R. GILBURNE

Miles R. Gilburne, Director

By /s/ DAVID A. HEENAN

David A. Heenan, Director

By /s/ KENT T. LUCIEN

Kent T. Lucien, Director

By /s/ DUNCAN MACNAUGHTON

Duncan MacNaughton, Director

By /s/ FRED E. TROTTER III

Fred E. Trotter III, Director

By /s/ JOHN P. DURKIN

John P. Durkin, Chief Financial Officer
(Principal Financial Officer)

By /s/ ADELE H. SUMIDA

Adele H. Sumida, Controller & Secretary
(Principal Accounting Officer)

Date March 26, 2010