10-Q

 30

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)

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

For the quarterly period ended March 31, 2018

OR

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

Commission file number 001-06510

MAUI LAND & PINEAPPLE COMPANY, INC.

(Exact name of registrant as specified in its charter)

HAWAII	99-0107542
(State or other jurisdiction	(IRS Employer
of incorporation or organization)	Identification No.)

200 Village Road, Lahaina, Maui, Hawaii 96761

(Address of principal executive offices)

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

None

(Former name, former address and former fiscal year, if changed since last report)

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 ☒ No ☐

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 ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer ☐	Accelerated filer ☒
	(Do not check if a smaller reporting company)
Non-accelerated filer ☐	Smaller reporting company ☐
	Emerging growth company ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date.

Class	Outstanding at April 10, 2018
Common Stock, no par value	19,178,296 shares

MAUI LAND & PINEAPPLE COMPANY, INC.

AND SUBSIDIARIES

TABLE OF CONTENTS

PART I. FINANCIAL INFORMATION	3
Item 1. Financial Statements (unaudited)	3
Condensed Consolidated Balance Sheets, March 31, 2018 and December 31, 2017	3
Condensed Consolidated Statements of Operations and Comprehensive Income (Loss), Three Months Ended March 31, 2018 and 2017	4
Condensed Consolidated Statements of Stockholders’ Equity, Three Months Ended March 31, 2018 and 2017	5
Condensed Consolidated Statements of Cash Flows, Three Months Ended March 31, 2018 and 2017	6
Notes to Condensed Consolidated Financial Statements	7
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations	12
Forward-Looking Statements and Risks	16
Item 3. Quantitative and Qualitative Disclosures About Market Risk	17
Item 4. Controls and Procedures	17
PART II. OTHER INFORMATION	18
Item 1A. Risk Factors	18
Item 6. Exhibits	18
Signature	19
EXHIBIT INDEX	20
Exhibit 31.1
Exhibit 31.2
Exhibit 32.1
Exhibit 32.2
Exhibit 101

2

PART I FINANCIAL INFORMATION

Item 1. Financial Statements

MAUI LAND & PINEAPPLE COMPANY, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS

(UNAUDITED)

	March 31,			December 31,
	2018			2017
	(in thousands except share data)
ASSETS
CURRENT ASSETS
Cash	$	1,050		$	1,029
Accounts receivable, less allowance of $40 for doubtful accounts		972			940
Prepaid expenses and other assets		192			159
Assets held for sale		212			212
Total current assets		2,426			2,340
PROPERTY		65,650			65,650
Accumulated depreciation		(35,410	)		(34,971	)
Net property		30,240			30,679
OTHER ASSETS
Deferred development costs		10,485			10,395
Other noncurrent assets		1,363			1,387
Total other assets		11,848			11,782
TOTAL ASSETS	$	44,514		$	44,801
LIABILITIES & STOCKHOLDERS' EQUITY
CURRENT LIABILITIES
Accounts payable	$	684		$	696
Payroll and employee benefits		310			784
Current portion of accrued retirement benefits		169			164
Deferred revenue		555			24
Other current liabilities		160			179
Total current liabilities		1,878			1,847
LONG-TERM LIABILITIES
Long-term debt		1,235			1,235
Accrued retirement benefits		7,780			7,867
Deposits		2,594			2,449
Deferred revenue		64			215
Other noncurrent liabilities		44			44
Total long-term liabilities		11,717			11,810
COMMITMENTS AND CONTINGENCIES (Note 11)
STOCKHOLDERS' EQUITY
Common stock--no par value, 43,000,000 shares authorized, 19,091,288 and 19,040,273 shares issued and outstanding		79,138			78,584
Additional paid in capital		9,246			9,246
Accumulated deficit		(37,396	)		(36,432	)
Accumulated other comprehensive loss		(20,069	)		(20,254	)
Total stockholders' equity		30,919			31,144
TOTAL LIABILITIES & STOCKHOLDERS' EQUITY	$	44,514		$	44,801

See Notes to Condensed Consolidated Financial Statements.

3

MAUI LAND & PINEAPPLE COMPANY, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS)

(UNAUDITED)

	Three Months Ended March 31,
	2018			2017
	(in thousands except
	per share amounts)
OPERATING REVENUES
Real estate	$	36		$	7,139
Leasing		1,495			1,586
Utilities		704			676
Resort amenities and other		307			282
Total operating revenues		2,542			9,683
OPERATING COSTS AND EXPENSES
Real estate		66			736
Leasing		578			469
Utilities		521			553
Resort amenities and other		353			333
General and administrative		831			489
Share-based compensation		579			559
Depreciation		439			416
Total operating costs and expenses		3,367			3,555
OPERATING INCOME (LOSS)		(825	)		6,128
Pension and other post-retirement expenses		(102	)		(202	)
Interest expense		(37	)		(94	)
NET INCOME (LOSS)	$	(964	)	$	5,832
Pension, net of income taxes of $0		185			204
COMPREHENSIVE INCOME (LOSS)	$	(779	)	$	6,036
NET INCOME (LOSS) PER COMMON SHARE--BASIC AND DILUTED	$	(0.05	)	$	0.31

See Notes to Condensed Consolidated Financial Statements.

4

MAUI LAND & PINEAPPLE COMPANY, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY

(UNAUDITED)

For the Three Months Ended March 31, 2018 and 2017

(in thousands)

													Accumulated
							Additional						Other
	Common Stock						Paid in			Accumulated			Comprehensive
	Shares			Amount			Capital			Deficit			Loss			Total
Balance, January 1, 2018		19,040		$	78,584		$	9,246		$	(36,432	)	$	(20,254	)	$	31,144
Share-based compensation		71			845			120									965
Vested restricted stock issued		15			120			(120	)								-
Shares cancelled to pay tax liability		(35	)		(411	)											(411	)
Other comprehensive income - pension														185			185
Net loss											(964	)					(964	)
Balance, March 31, 2018		19,091		$	79,138		$	9,246		$	(37,396	)	$	(20,069	)	$	30,919
Balance, January 1, 2017		18,958		$	78,123		$	9,246		$	(47,332	)	$	(22,295	)	$	17,742
Share-based compensation								87									87
Vested restricted stock issued		14			87			(87	)								-
Shares cancelled to pay tax liability		(4	)		(50	)											(50	)
Other comprehensive income - pension														204			204
Net income											5,832						5,832
Balance, March 31, 2017		18,968		$	78,160		$	9,246		$	(41,500	)	$	(22,091	)	$	23,815

See Notes to Condensed Consolidated Financial Statements.

5

MAUI LAND & PINEAPPLE COMPANY, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(UNAUDITED)

	Three Months Ended March 31,
	2018			2017
	(in thousands)
NET CASH PROVIDED BY OPERATING ACTIVITIES	$	522		$	7,052
INVESTING ACTIVITIES
Payments of deferred development costs		(90	)		(1,376	)
NET CASH USED IN INVESTING ACTIVITIES		(90	)		(1,376	)
FINANCING ACTIVITIES
Payments of long-term debt		-			(5,622	)
Debt and common stock issuance costs and other		(411	)		(77	)
NET CASH USED IN FINANCING ACTIVITIES		(411	)		(5,699	)
NET INCREASE (DECREASE) IN CASH		21			(23	)
CASH AT BEGINNING OF PERIOD		1,029			602
CASH AT END OF PERIOD	$	1,050		$	579
Cash paid during the period:
Interest	$	30		$	50

SUPPLEMENTAL NON-CASH ACTIVITIES:

● Common stock issued to certain members of the Company’s management totaled $845,000 for the three months ended March 31, 2018.

● Accounts payable at March 31, 2018 and 2017 includes $100,000 and $150,000, respectively, for the estimated cost of subdividing the Kapalua Golf Academy practice course.

See Notes to Condensed Consolidated Financial Statements.

6

MAUI LAND & PINEAPPLE COMPANY, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED)

1.     BASIS OF PRESENTATION

The accompanying interim unaudited condensed consolidated financial statements have been prepared by Maui Land & Pineapple Company, Inc. (together with its subsidiaries, the “Company”) in accordance with U.S. generally accepted accounting principles (GAAP) for interim financial information that are consistent in all material respects with those applied in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2017, and pursuant to the instructions to Form 10-Q and Article 10 promulgated by Regulation S-X of the Securities and Exchange Commission (SEC). Accordingly, they do not include all of the information and notes to financial statements required by GAAP for complete financial statements. In the opinion of management, the accompanying condensed consolidated financial statements contain all normal and recurring adjustments necessary to fairly present the Company’s financial position, results of operations and cash flows for the interim periods ended March 31, 2018 and 2017. The condensed consolidated financial statements and notes should be read in conjunction with the consolidated financial statements and notes thereto included in the Company’s Form 10-K for the fiscal year ended December 31, 2017.

2.     USE OF ESTIMATES AND RECLASSIFICATIONS

The Company’s reports for interim periods utilize numerous estimates of general and administrative expenses and other costs for the full year. Future actual amounts may differ from these estimates. Amounts reflected in interim reports are not necessarily indicative of results for a full year. Certain amounts in the December 31, 2017 condensed consolidated balance sheet were reclassified to conform to the current period’s presentation. Such amounts had no impact on total assets and liabilities or net income and comprehensive income (loss) previously reported.

3.     BASIC AND DILUTED SHARES

Basic and diluted weighted-average shares outstanding for the three months ended March 31, 2018 and 2017 were as follows:

	Three Months Ended
	March 31,
	2018		2017
Basic and diluted		19,058,202		18,962,823
Potentially dilutive		27,500		27,500

Basic net income (loss) per common share is computed by dividing net income (loss) by the weighted-average number of common shares outstanding. Diluted net income (loss) per common share is computed similar to basic net income (loss) per common 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. The treasury stock method is utilized to determine the number of potentially dilutive shares related to the outstanding non-qualified stock options.

7

4.     PROPERTY

Property at March 31, 2018 and December 31, 2017 consisted of the following:

	March 31, 2018		December 31, 2017
	(in thousands)
Land	$	5,059	$	5,059
Land improvements		24,727		24,727
Buildings		24,884		24,884
Machinery and equipment		10,980		10,980
Total property		65,650		65,650
Less accumulated depreciation		35,410		34,971
Net property	$	30,240	$	30,679

Land

Most of the Company’s 22,800 acres of land were acquired between 1911 and 1932 and is carried in its balance sheets at cost. Approximately 20,700 acres of land are located in West Maui and comprise a largely contiguous parcel that extends from the sea to an elevation of approximately 5,700 feet. This parcel includes approximately 900 acres within the Kapalua Resort, a master-planned, destination resort and residential community located in West Maui encompassing approximately 3,000 acres. The Company’s remaining 2,100 acres of land are located in Upcountry Maui in an area commonly known as Hali’imaile and are mainly comprised of leased agricultural fields, including related processing and maintenance facilities.

Land Improvements

Land improvements are comprised primarily of roads, utilities, and landscaping infrastructure improvements at the Kapalua Resort. Also included is the Company’s potable and non-potable water systems in West Maui. The majority of the Company’s land improvements were constructed and placed in service in the mid-to-late 1970’s or conveyed in 2017. Depreciation expense would be considerably higher if these assets were stated at current replacement cost.

Buildings

Buildings are comprised of restaurant, retail and light industrial spaces located at the Kapalua Resort and Hali’imaile which are used in the Company’s leasing operations. The majority of the buildings were constructed and placed in service in the mid-to-late 1970’s. Depreciation expense would be considerably higher if these assets were stated at current replacement cost.

Machinery and Equipment

Machinery and equipment are mainly comprised of zipline course equipment installed in 2008 at the Kapalua Resort and used in the Company’s leasing operations. Also included are machinery and equipment used in the Company’s utilities operations.

5.     ASSETS HELD FOR SALE AND REAL ESTATE SALES

Assets held for sale at March 31, 2018 and December 31, 2017 consisted of the following:

	March 31, 2017		December 31, 2017
	(in thousands)
Upcountry Maui, 630-acre parcel of agricultural land	$	156	$	156
Upcountry Maui, 80-acre parcel of agricultural land and wastewater treatment facility		56		56
Assets held for sale	$	212	$	212

The above assets held for sale have not been pledged as collateral under the Company’s credit facility.

In February 2017, the Company sold the 15-acre Kapalua Golf Academy practice course located in the Kapalua Resort for $7.0 million to the owner of the Kapalua Plantation and Bay Golf Courses. The property was sold without any development entitlements. The sale resulted in a gain of approximately $6.4 million. The Company used $5.6 million of the sale proceeds to pay down its long-term debt.

8

6.     LONG-TERM DEBT

Long-term debt is comprised of amounts outstanding under the Company’s $15.0 million revolving line of credit facility with First Hawaiian Bank (Credit Facility). The Credit Facility matures on December 31, 2019 and provides for two optional one-year extension periods. Interest on borrowings is at LIBOR plus 3.50%, or 4.35% and 4.86% at March 31, 2018 and December 31, 2017, respectively. The Company has pledged its 800-acre Kapalua Mauka project and approximately 30,000 square feet of commercial leased space in the Kapalua Resort as security for the Credit Facility. Net proceeds from the sale of any collateral are required to be repaid toward outstanding borrowings and will permanently reduce the Credit Facility’s revolving commitment amount. There are no commitment fees on the unused portion of the Credit Facility.

The terms of the Credit Facility include various representations, warranties, affirmative, negative and financial covenants and events of default customary for financings of this type. Financial covenants include a minimum liquidity (as defined) of $1.5 million, a maximum of $45.0 million in total liabilities, and a limitation on new indebtedness.

The Company believes that it is in compliance with the covenants under the Credit Facility as of March 31, 2018.

7. SHARE-BASED COMPENSATION

The Company’s directors, officers and certain members of management receive a portion of their compensation in shares of the Company’s common stock granted under the Company’s 2017 Equity and Incentive Award Plan (Equity Plan). Share-based compensation is valued based on the average of the high and low share price on the date of grant. Shares are issued upon execution of agreements reflecting the grantee’s acceptance of the respective shares subject to the terms and conditions of the Equity Plan. Restricted shares issued under the Equity Plan vest quarterly and have voting and regular dividend rights but cannot be disposed of until such time as they are vested. All unvested restricted shares are forfeited upon the grantee’s termination of directorship or employment from the Company.

Share-based compensation is determined and awarded annually to the Company’s officers and certain members of management based on their achievement of certain predefined performance goals and objectives under the Equity Plan. Such share-based compensation is comprised of an annual incentive paid in shares of common stock and a long-term incentive paid in restricted shares vesting quarterly over a period of three years.

Share-based compensation totaled $579,000 and $559,000 for the three months ended March 31, 2018 and 2017, respectively. Included in these amounts were $120,000 and $87,000 of restricted shares of common stock which vested during the first three months of 2018 and 2017, respectively.

8. ACCRUED RETIREMENT BENEFITS

Accrued retirement benefits at March 31, 2018 and December 31, 2017 consisted of the following:

	March 31			December 31,
	2018			2017
	(in thousands)
Defined benefit pension plans	$	5,706		$	5,812
Non-qualified retirement plans		2,243			2,219
Total		7,949			8,031
Less current portion		(169	)		(164	)
Non-current portion of accrued retirement benefits	$	7,780		$	7,867

9

The net periodic benefit costs for pension and postretirement benefits for the three months ended March 31, 2018 and 2017 were as follows:

	Three Months
	Ended March 31,
	2018			2017
	(in thousands)
Interest cost	$	495		$	557
Expected return on plan assets		(578	)		(562	)
Amortization of net loss		185			207
Pension and other postretirement expenses	$	102		$	202

9. INCOME TAXES

The Company uses 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. The Company’s effective tax rate for 2018 and 2017 reflects the recognition of expected federal alternative minimum tax liabilities and interim period tax benefits and changes to its tax valuation allowance. In 2017, the Company fully utilized the special alternative minimum tax net operating loss carryforward from 2008 which allows for 100% offset to the alternative minimum taxable income in subsequent years.

10.     REPORTABLE OPERATING SEGMENTS

The Company’s reportable operating segments are comprised of the discrete business units whose operating results are regularly reviewed by the Company’s Chief Executive Officer – its chief decision maker – in assessing performance and determining the allocation of resources. Reportable operating segments are as follows:

• Real Estate includes the development and sale of real estate inventory and the operations of Kapalua Realty Company, a general brokerage real estate company located within the Kapalua Resort.

• Leasing primarily includes revenues and expenses from real property leasing activities, license fees and royalties for the use of certain of the Company’s trademarks and brand names by third parties, and the cost of maintaining the Company’s real estate assets, including conservation activities.

• Utilities primarily include the operations of Kapalua Water Company and Kapalua Waste Treatment Company, the Company’s water and sewage transmission services (regulated by the Hawaii Public Utilities Commission) for the Kapalua Resort. The operating segment also includes the management of ditch, reservoir and well systems that provide non-potable irrigation water to West and Upcountry Maui areas.

• Resort Amenities include a membership program that provides certain benefits and privileges within the Kapalua Resort for its members.

The Company’s reportable operating segment results are measured based on operating income (loss), exclusive of interest, depreciation, general and administrative, share-based compensation, pension and other postretirement expenses.

10

Reportable operating segment revenues and income for the three months ended March 31, 2018 and 2017 were as follows:

	Three Months
	Ended March 31,
	2018			2017
	(in thousands)
Operating Segment Revenues
Real estate	$	36		$	7,139
Leasing		1,495			1,586
Utilities		704			676
Resort amenities and other		307			282
Total Operating Segment Revenues	$	2,542		$	9,683
Operating Segment Income (Loss)
Real estate	$	(30	)	$	6,403
Leasing		917			1,117
Utilities		183			123
Resort amenities and other		(46	)		(51	)
Total Operating Segment Income	$	1,024		$	7,592

11. COMMITMENTS AND CONTINGENCIES

There have been no changes in the status of commitments and contingencies as reported in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2017. 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.

12. FAIR VALUE MEASUREMENTS

GAAP establishes a framework for measuring fair value, and requires certain disclosures about fair value measurements 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. GAAP requires that financial assets and liabilities 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.

The Company considers all cash on hand to be unrestricted cash for the purposes of the consolidated balance sheets and consolidated statements of cash flows. The fair value of receivables and payables approximate their carrying value due to the short-term nature of the instruments. The valuation is based on settlements of similar financial instruments all of which are short-term in nature and are generally settled at or near cost. The fair value of debt was estimated based on borrowing rates currently available to the Company for debt with similar terms and maturities. The carrying amount of debt at March 31, 2018 and December 31, 2017 was $1,235,000, which approximated fair value. The fair value of debt was measured using the level 2 inputs, noted above.

13.     NEW ACCOUNTING PRONOUNCEMENTS

In May 2014, the Financial Accounting Standards Board (FASB) issued an Accounting Standards Update (ASU) on recognition of revenue arising from contracts with customers, as well as recognition of gains and losses from the transfer of nonfinancial assets in contracts with noncustomers, and subsequently, it issued additional guidance that further clarified the ASU. The revenue recognition ASU has implications for all revenues, excluding those that are under the specific scope of other accounting standards, such as revenue associated with leases (described below). 

The Company’s revenues for the three months ended March 31, 2018, that were subject to the revenue recognition ASU were as follows (in thousands):

Real estate	$	36
Utilities		704
Resort amenities and other		307
Total	$	1,047

The core principle underlying the revenue recognition ASU is that an entity will recognize revenue to represent the transfer of goods and services to customers in an amount that reflects the consideration to which the entity expects to be entitled in such exchange. This will require entities to identify contractual performance obligations and determine whether revenue should be recognized at a point in time or over time, based on when control of goods and services transfers to a customer. The Company’s revenue streams are recognized at a point in time except for the resort amenities revenue where the annual membership dues are recognized over a period of twelve months.

A customer is distinguished from a noncustomer by the nature of the goods or services that are transferred. Customers are provided with goods or services that are generated by a company’s ordinary output activities, whereas noncustomers are provided with nonfinancial assets that are outside of a company’s ordinary output activities. This distinction may not significantly change the pattern of income recognition, but determines whether that income is classified as revenue (contracts with customers) or other gains/losses (contracts with noncustomers) in the Company’s financial statements. The Company’s revenue streams for the period were generated as ordinary output activities to customers as defined by the guidance and were properly classified as revenues.

11

The ASU requires the use of a new five-step model to recognize revenue from customer contracts. The five-step model requires that the Company (i) identify the contract with the customer, (ii) identify the performance obligations in the contract, (iii) determine the transaction price, including variable consideration to the extent that it is probable that a significant future reversal will not occur, (iv) allocate the transaction price to the respective performance obligations in the contract, and (v) recognize revenue when (or as) the Company satisfies the performance obligation. The application of the five-step model to the revenue streams compared to the prior guidance did not result in significant changes in the way the Company records its real estate revenue, utilities revenue and resort amenities and other revenues. 

An entity will also be required to determine if it controls the goods or services prior to the transfer to the customer in order to determine if it should account for the arrangement as a principal or agent. Principal arrangements, where the entity controls the goods or services provided, will result in the recognition of the gross amount of consideration expected in the exchange. Agent arrangements, where the entity simply arranges but does not control the goods or services being transferred to the customer, will result in the recognition of the net amount the entity is entitled to retain in the exchange. Upon adoption of the new lease ASU in 2019, the Company may be required to classify its tenant recoveries into lease and nonlease components, whereby the nonlease components would be subject to the revenue recognition ASU, pending the resolution of the proposed amendment issued by the FASB in January 2018. Property services categorized as nonlease components that are reimbursed by the Company’s tenants may need to be presented on a net basis if it is determined that the Company held an agent arrangement.

Upon adoption, entities can use either a full retrospective or modified retrospective method to adopt this ASU. Under the full retrospective method, all periods presented will be restated upon adoption to conform to the new standard and a cumulative adjustment for effects on periods prior to 2016 will be recorded to retained earnings as of January 1, 2016. Under the modified retrospective approach, prior periods are not restated to conform to the new standard. Instead, a cumulative adjustment for effects of applying the new standard to periods prior to 2018 is recorded to retained earnings as of January 1, 2018. Additionally, incremental footnote disclosures are required to present the 2018 revenues under the prior standard. Under the modified retrospective method, an entity may also elect to apply the standard to either (i) all contracts as of January 1, 2018, or (ii) only to contracts that are not completed as of January 1, 2018. The Company elected to adopt this guidance using the modified retrospective method at January 1, 2018 which did not result in an adjustment to the retained earnings. Additionally, upon adoption, the Company evaluated its revenue recognition policy for all revenue streams within the scope of the ASU under previous standards and using the five-step model under the new guidance and confirmed that there were no differences in the pattern of revenue recognition.

In February 2016, FASB issued an ASU that sets out the principles for the recognition, measurement, presentation, and disclosure of leases for both parties to a lease agreement (i.e., lessees and lessors). The ASU is effective for the Company no later than January 1, 2019, with early adoption permitted. The ASU requires the Company to identify lease and nonlease components of a lease agreement. This ASU will govern the recognition of revenue for lease components. Revenue related to nonlease components under our lease agreements will be subject to the new revenue recognition standard effective upon adoption of the new lease accounting standard. The Company expects to adopt the new lease accounting standard on January 1, 2019.

In August 2016, FASB issued ASU No. 2016-15, Statement of Cash Flows. This ASU aims to reduce the existing diversity in practice in how certain cash receipts and cash payments are presented and classified in the statement of cash flows. This ASU is effective for public business entities for annual reporting periods beginning after December 15, 2017. The adoption of this guidance did not have a material impact on the Company’s financial statements.

In October 2016, FASB issued ASU No. 2016-16, Income Taxes. This ASU simplifies the recognition of intra-entity income tax consequences when an asset other than inventory is transferred. This ASU is effective for annual reporting periods beginning after December 15, 2017 for public business entities. The adoption of this guidance did not have a material impact on the Company’s financial statements.

In November 2016, FASB issued ASU No. 2016-18, Statement of Cash Flows-Restricted Cash. This ASU addresses the diversity in the classification and presentation of changes in restricted cash in the statement of cash flows. This ASU is effective for annual reporting periods beginning after December 15, 2017 for public business entities. The adoption of this guidance did not have a material impact on the Company’s financial statements.

In December 2016, FASB issued ASU No. 2016-20, Technical Corrections and Improvements to Topic 606, Revenue from Contracts with Customers. This ASU summarizes the various amendments that serve to clarify the codification or to correct unintended application of guidance. This ASU is effective for annual reporting periods beginning after December 15, 2017. The adoption of this guidance did not have a material impact on the Company’s financial statements.

In March 2017, FASB issued ASU No. 2017-07, Compensation-Retirement Benefits. This ASU aims to improve the presentation of the net periodic pension cost and net periodic postretirement benefit cost by requiring the reporting of the service cost component in the same line item or items as other compensation costs arising from services rendered by employees during the period. The other components of net benefit cost are required to be presented in the income statement separately from the service cost component and outside a subtotal of income from operations. This ASU is effective for public business entities for annual periods beginning after December 15, 2017. The adoption of this guidance is reflected on the Company’s financial statements.

In May 2017, the FASB issued ASU No. 2017-09, Compensation-Stock Compensation (Topic 718) Scope of Modification Accounting. This ASU clarifies which changes to the terms or conditions of a share-based payment award require an entity to apply modification accounting in Topic 718. The standard is effective for interim and annual reporting periods beginning after December 15, 2017, with early adoption permitted. The adoption of this guidance did not have a material impact on the Company’s financial statements.

Item 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The following discussion and analysis of our financial condition and results of operations should be read in conjunction with our audited consolidated financial statements and related notes included in our Annual Report on Form 10-K for the year ended December 31, 2017 and the unaudited condensed consolidated financial statements and related notes included in this Quarterly Report on Form 10-Q. 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.

Overview

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

12

We own approximately 23,000 acres of land on the island of Maui, Hawaii and develop, sell, and manage residential, resort, commercial, agricultural and industrial real estate through the following business segments:

• Real Estate—Our real estate operations consist of land planning and entitlement, development and sales activities. This segment also includes the operations of Kapalua Realty Company, Ltd., a general brokerage real estate company located in the Kapalua Resort.

• Leasing—Our leasing operations include residential, resort, commercial, agricultural and industrial land and property leases, licensing of the Company’s registered trademarks and trade names, and stewardship and conservation efforts.

• Utilities—We own two publicly-regulated utility companies which provide potable and non-potable water and wastewater transmission services to the Kapalua Resort. In addition, we also own a network of several major non-potable water systems in West and Upcountry Maui.

• Resort Amenities—We manage the operations of the Kapalua Club, a private, non-equity club program providing our members special programs, access and other privileges at certain amenities at the Kapalua Resort.

Critical Accounting Policies and Estimates

The preparation of consolidated financial statements in conformity with accounting principles generally accepted in the United States of America requires the use of accounting estimates. Changes in these estimates and assumptions are considered reasonably possible and may have a material effect on the consolidated financial statements and thus actual results could differ from the amounts reported and disclosed herein. Our critical accounting policies that require the use of estimates and assumptions were discussed in detail in our most recently filed Form 10-K. On January 1, 2018, we adopted ASU No. 2017-07 Compensation-Retirement Benefits without material impact, as well as ASU No. 2014-09, Revenue Recognition using the modified retroactive approach which did not result in an adjustment to our retained earnings. There have been no significant changes in our critical accounting policies during the first three months of 2018, other than the adoption of ASU Nos. 2014-09 and 2017-07 on January 1, 2018.

RESULTS OF OPERATIONS

Three Months Ended March 31, 2018 compared to Three Months Ended March 31, 2017

CONSOLIDATED

	Three Months Ended March 31,
	2018			2017
	(in thousands)
Operating revenues	$	2,542		$	9,683
Operating costs and expenses		(1,518	)		(2,091	)
General and administrative		(831	)		(489	)
Share-based compensation		(579	)		(559	)
Depreciation		(439	)		(416	)
Operating income (loss)		(825	)		6,128
Pension and other postretirement expenses		(102	)		(202	)
Interest expense		(37	)		(94	)
Net income (loss)	$	(964	)	$	5,832
Net income (loss) per common share	$	(0.05	)	$	0.31

The decrease in operating revenues and operating costs and expenses for the three months ended March 31, 2018 compared to the three months ended March 31, 2017 was due to the sale of the 15-acre Kapalua Golf Academy practice course in February 2017. The increase in general and administrative expenses for the three months ended March 31, 2018 compared to the three months ended March 31, 2017 was primarily due to higher legal and outside consultant fees.

13

REAL ESTATE

	Three Months Ended March 31,
	2018			2017
	(in thousands)
Operating revenues	$	36		$	7,139
Operating costs and expenses		(66	)		(736	)
Operating income (loss)	$	(30	)	$	6,403

In February 2017, we sold the 15-acre Kapalua Golf Academy practice course located in the Kapalua Resort for $7.0 million to the owner of the Kapalua Plantation and Bay Golf Courses. The property was sold without any development entitlements. The sale resulted in a gain of approximately $6.4 million. The property was not pledged as collateral under our revolving line of credit facility. We applied $5.6 million of the sale proceeds toward our revolving line of credit facility.

Also included in our real estate operating revenues were sales commissions totaling $36,000 and $139,000 for the three months ended March 31, 2018 and 2017, respectively, from resales of properties owned by private residents in the Kapalua Resort and surrounding areas by our wholly-owned subsidiary, Kapalua Realty Company, Ltd.

We did not have any significant real estate development expenditures in the first three months of 2018 or 2017.

Real estate development and sales are cyclical and depend on a number of factors. Results for one period are therefore not necessarily indicative of future performance trends in this business segment.

LEASING

	Three Months Ended March 31,
	2018			2017
	(in thousands)
Operating revenues	$	1,495		$	1,586
Operating costs and expenses		(578	)		(469	)
Operating income	$	917		$	1,117
Average occupancy rates:
Kapalua Resort		98	%		100	%
Other West Maui		79	%		95	%
Upcountry Maui		73	%		90	%

The decrease in operating income during the three months ended March 31, 2018 compared to the three months ended March 31, 2017 was primarily due to the timing of receipts of tenants’ share of common area reimbursable expenses. The increase in operating costs and expenses for the three months ended March 31, 2018 compared to the three months ended March 31, 2017 was due to higher repairs and maintenance costs.

The decrease in our Upcountry Maui average occupancy rate was the result of our restructuring of a lease agreement with an agricultural land and property tenant. We plan to renovate and repurpose certain of these properties before leasing them to other tenants.

Our leasing operations face substantial competition from other property owners in Maui and Hawaii.

14

UTILITIES

	Three Months Ended March 31,
	2018			2017
	(in thousands)
Operating revenues	$	704		$	676
Operating costs and expenses		(521	)		(553	)
Operating income	$	183		$	123
Consumption (in million gallons):
Potable		46			38
Non-potable/irrigation		92			124

We have contracted a third-party water engineering and management company to manage the operations of our wholly-owned subsidiaries: Kapalua Water Company, Ltd. and Kapalua Waste Treatment Company, Ltd. We have contracted a water maintenance company to manage our non-potable/irrigation water systems in West and Upcountry Maui.

Our Utilities segment operations are primarily affected by the amount of rainfall and the level of development and volume of visitors in the Kapalua Resort. Rates charged by our Kapalua Water Company, Ltd. and Kapalua Waste Treatment Company, Ltd. subsidiaries are regulated by the Hawaii Public Utilities Commission. The increase in utilities operating revenues for the three months ended March 31, 2018 as compared to the three months ended March 31, 2017 is primarily attributed to higher occupancy and visitor activity at the Kapalua Resort.

We did not incur any significant capital or maintenance expenditures related to our Utilities segment infrastructure in the first three months of 2018 or 2017.

RESORT AMENITIES AND OTHER

	Three Months Ended March 31,
	2018			2017
	(in thousands)
Operating revenues	$	307		$	282
Operating costs and expenses		(353	)		(333	)
Operating (loss) income	$	(46	)	$	(51	)
Kapalua Club members		468			472

Our Resort Amenities segment includes the operations of the Kapalua Club, a private, non-equity club providing its members special programs, access and other privileges at certain of the amenities at the Kapalua Resort including a 30,000 square foot full-service spa and a private pool-side dining beach club. The Kapalua Club does not operate any resort amenities and the member dues collected are primarily used to pay contracted fees to provide access for its members to the spa, beach club and other resort amenities.

LIQUIDITY AND CAPITAL RESOURCES

Liquidity

We had cash on hand of $1.1 million and $13.8 million of available credit under a $15.0 million revolving line of credit facility with First Hawaiian Bank as of March 31, 2018.

We have a $15.0 million revolving line of credit facility with First Hawaiian Bank (Credit Facility). The Credit Facility matures on December 31, 2019 and provides for two optional one-year extension periods. Interest on borrowings is at LIBOR plus 3.50% (4.35% at March 31, 2018). We have pledged our 800-acre Kapalua Mauka project and approximately 30,000 square feet of commercial leased space in the Kapalua Resort as security for the Credit Facility. Net proceeds from the sale of any collateral are required to be repaid toward outstanding borrowings and will permanently reduce the Credit Facility’s revolving commitment amount. There are no commitment fees on the unused portion of the Credit Facility.

15

The terms of the Credit Facility include various representations, warranties, affirmative, negative and financial covenants and events of default customary for financings of this type. Financial covenants include a minimum liquidity (as defined) of $1.5 million, a maximum of $45.0 million in total liabilities, and a limitation on new indebtedness.

As of March 31, 2018, we were in compliance with the covenants under the Credit Facility.

Cash Flows

During the first three months of 2018, net cash flow provided by our operating activities totaled $0.5 million. Net cash provided by our operating activities for the first three months of 2017 was $7.1 million.

Interest payments on our long-term debt totaled $30,000 for the three months ended March 31, 2018.

We were not required to make any minimum funding contributions to our defined benefit pension plans during the three months ended March 31, 2018.

Future Cash Inflows and Outflows

Our business initiatives for the next nine months include investing in our operating infrastructure and continued planning and entitlement efforts on our development projects. At times, this may require borrowing under our Credit Facility or other indebtedness, repayment of which may be dependent on selling of our real estate assets at acceptable prices in condensed timeframes.

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.

FORWARD-LOOKING STATEMENTS AND RISKS

This and other reports filed by us with the Securities and Exchange Commission, or SEC, 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:

• unstable macroeconomic market conditions, including, but not limited to, energy costs, credit markets, interest rates and changes in income and asset values;

• risks associated with real estate investments generally, and more specifically, demand for real estate and tourism in Hawaii;

• risks due to joint venture relationships;

• our ability to complete land development projects within forecasted time and budget expectations, if at all;

• our ability to obtain required land use entitlements at reasonable costs, if at all;

• our ability to compete with other developers of real estate in Maui;

• potential liabilities and obligations under various federal, state and local environmental regulations with respect to the presence of hazardous or toxic substances;

16

• changes in weather conditions or the occurrence of natural disasters;

• our ability to maintain the listing of our common stock on the New York Stock Exchange;

• our ability to comply with funding requirements of our defined benefit pension plans;

• our ability to comply with the terms of our indebtedness, including the financial covenants set forth therein, and to extend maturity dates, or refinance such indebtedness, prior to its maturity date;

• our ability to raise capital through the sale of certain real estate assets;

• availability of capital on terms favorable to us, or at all; and

• failure to maintain security of internal and customer electronic information.

Such risks and uncertainties also include those risks and uncertainties discussed in the sections entitled “Business,” “Risk Factors,” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in our Annual Report on Form 10-K for the year ended December 31, 2017 and the section entitled “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and “Risk Factors” in this Quarterly Report on Form 10-Q, as well as other factors described from time to time in our reports filed with the SEC. Although we believe that our opinions and expectations reflected in the forward-looking statements are reasonable as of the date of this report, we cannot guarantee future results, levels of activity, performance or achievements, and our actual results may differ substantially from the views and expectations set forth in this report. Thus, 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 statements speak only as of the date 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 report.

Item 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

We have no material exposure to changes in interest rates related to our borrowing and investing activities used to maintain liquidity and to fund business operations. We have no material exposure to foreign currency risks.

Item 4. CONTROLS AND PROCEDURES

Evaluation of Disclosure Controls and Procedures

We maintain 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, as amended) that are designed to ensure that information required to be disclosed in our Exchange Act reports is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms, and that such information is accumulated and communicated to our management, including our Chief Executive Officer and Chief Financial Officer, as appropriate, to allow timely decisions regarding required disclosure.

In designing and evaluating the disclosure controls and procedures, our management recognizes that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving the desired control objectives, and our management necessarily was required to apply its judgment in evaluating the cost-benefit relationship of possible controls and procedures.

As required by Rules 13a-15(e) and 15d-15(e) under the Exchange Act, we carried out an evaluation, under the supervision and with the participation of our management, including our Chief Executive Officer and Chief Financial Officer, of the effectiveness of the design and operation of our disclosure controls and procedures as of the end of the fiscal quarter covered by this report. Based upon the foregoing, our Chief Executive Officer and Chief Financial Officer concluded that our disclosure controls and procedures were effective to provide reasonable assurance that information required to be disclosed by us in our Exchange Act reports is recorded, processed, summarized and reported within the time periods specified in applicable SEC rules and forms.

Changes in Internal Controls Over Financial Reporting

We have reviewed and updated our internal controls and related procedures related to our change in filing status from a smaller reporting company to an accelerated filer in January 2018. Except as otherwise noted, there has been no significant changes in our internal controls over financial reporting (as such term is defined in Exchange Act Rule 13a-15(f) or 15d-15(f)) during the three months ended March 31, 2018.

17

PART II OTHER INFORMATION

Item 1A. RISK FACTORS

Potential risks and uncertainties include, among other things, those factors discussed in the sections entitled “Business,” “Risk Factors” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in our Annual Report on Form 10-K for the year ended December 31, 2017 and the section entitled “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in this Quarterly Report on Form 10-Q. Readers should carefully review those risks and the risks and uncertainties disclosed in other documents we file from time to time with the SEC. We undertake no obligation to publicly release the results of any revisions to any forward-looking statements to reflect anticipated or unanticipated events or circumstances occurring after the date of such statements.

Item 6. EXHIBITS

31.1	Certification of Chief Executive Officer Pursuant to Rule 13a-14(d) / 15d-14(a) of the Securities Exchange Act of 1934.
31.2	Certification of Chief Financial Officer Pursuant to Rule 13a-14(d) / 15d-14(a) of the Securities Exchange Act of 1934.
32.1	Certification of Chief Executive Officer Pursuant to Rule 13a-14(b) / 15d-14(b) of the Securities Exchange Act of 1934 and 18 U.S.C. Section 1350.
32.2	Certification of Chief Financial Officer Pursuant to Rule 13a-14(b) / 15d-14(b) of the Securities Exchange Act of 1934 and 18 U.S.C. Section 1350.
101.INS	XBRL Instance Document
101.SCH	XBRL Taxonomy Extension Schema Document
101.CAL	XBRL Taxonomy Extension Calculation Document
101.DEF	XBRL Taxonomy Extension Definition Linkbase
101.LAB	XBRL Taxonomy Extension Labels Linkbase Document
101.PRE	XBRL Taxonomy Extension Presentation Link Document

18

SIGNATURE

Pursuant to the requirements 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.

	MAUI LAND & PINEAPPLE COMPANY, INC.
April 27 2018	/s/ TIM T. ESAKI
Date	Tim T. Esaki
	Chief Financial Officer
	(Principal Financial Officer)

19

EXHIBIT INDEX

Exhibit Number	Description
31.1	Certification of Chief Executive Officer Pursuant to Rule 13a-14(d) / 15d-14(a) of the Securities Exchange Act of 1934. (1)
31.2	Certification of Chief Financial Officer Pursuant to Rule 13a-14(d) / 15d-14(a) of the Securities Exchange Act of 1934. (1)
32.1	Certification of Chief Executive Officer Pursuant to Rule 13a-14(b) / 15d-14(b) of the Securities Exchange Act of 1934 and 18 U.S.C. Section 1350. (2)
32.2	Certification of Chief Financial Officer Pursuant to Rule 13a-14(b) / 15d-14(b) of the Securities Exchange Act of 1934 and 18 U.S.C. Section 1350. (2)
101.INS	XBRL Instance Document (2)
101.SCH	XBRL Taxonomy Extension Schema Document (2)
101.CAL	XBRL Taxonomy Extension Calculation Document (2)
101.DEF	XBRL Taxonomy Extension Definition Linkbase (2)
101.LAB	XBRL Taxonomy Extension Labels Linkbase Document (2)
101.PRE	XBRL Taxonomy Extension Presentation Link Document (2)

(1) Filed herewith.

(2) Furnished herewith and not “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended.

20

EX-31.1

Exhibit 31.1

CERTIFICATION

I, Warren H. Haruki, certify that:

1. I have reviewed this Quarterly Report on Form 10-Q of Maui Land & Pineapple Company, Inc.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, 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;

(c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: April 27, 2018
		/s/ WARREN H. HARUKI
	Name:	Warren H. Haruki
	Title:	Chairman & Chief Executive Officer
		(Principal Executive Officer)

EX-31.2

Exhibit 31.2

CERTIFICATION

I, Tim T. Esaki, certify that:

1. I have reviewed this Quarterly Report on Form 10-Q of Maui Land & Pineapple Company, Inc.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, 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;

(c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrants fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: April 27, 2018
		/s/ TIM T. ESAKI
	Name:	Tim T. Esaki
	Title:	Chief Financial Officer
		(Principal Financial Officer)

EX-32.1

Exhibit 32.1

The following certifications are being furnished solely to accompany the Report pursuant to 18 U.S.C. § 1350 and in accordance with SEC Release No. 33-8238. These certifications shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, nor shall be incorporated by reference in any filing of the Company under the Securities Act of 1933, as amended, whether made before or after the date hereof, regardless of any general incorporation language in such filing.

CERTIFICATION PURSUANT TO

18 U.S.C. SECTION 1350

In connection with the Quarterly Report of Maui Land & Pineapple Company, Inc. (the “Company”) on Form 10-Q for the quarter ended March 31, 2018 as filed with the Securities and Exchange Commission (the “Report”), I, Warren H. Haruki, Chairman & Chief Executive Officer of the Company, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:

(1) The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

(2) The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

/s/ WARREN H. HARUKI

Warren H. Haruki

Chairman & Chief Executive Officer

(Principal Executive Officer)

Date: April 27, 2018

A signed original of this written statement required by Section 906 has been provided to the Company and will be retained by the Company and furnished to the Securities and Exchange Commission or its staff upon request.

EX-32.2

Exhibit 32.2

The following certifications are being furnished solely to accompany the Report pursuant to 18 U.S.C. § 1350 and in accordance with SEC Release No. 33-8238. These certifications shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, nor shall be incorporated by reference in any filing of the Company under the Securities Act of 1933, as amended, whether made before or after the date hereof, regardless of any general incorporation language in such filing.

CERTIFICATION PURSUANT TO

18 U.S.C. SECTION 1350

In connection with the Quarterly Report of Maui Land & Pineapple Company, Inc. (the “Company”) on Form 10-Q for the quarter ended March 31, 2018 as filed with the Securities and Exchange Commission (the “Report”), I, Tim T. Esaki, Chief Financial Officer of the Company, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:

(1) The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

(2) The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

/s/ TIM T. ESAKI

Tim T. Esaki

Chief Financial Officer

(Principal Financial Officer)

Date: April 27, 2018

A signed original of this written statement required by Section 906 has been provided to the Company and will be retained by the Company and furnished to the Securities and Exchange Commission or its staff upon request.

XML

Document And Entity Information - shares	3 Months Ended
	Mar. 31, 2018	Apr. 10, 2018
Document Information [Line Items]
Entity Registrant Name	MAUI LAND & PINEAPPLE CO INC
Entity Central Index Key	0000063330
Trading Symbol	mlp
Current Fiscal Year End Date	--12-31
Entity Filer Category	Accelerated Filer
Entity Current Reporting Status	Yes
Entity Voluntary Filers	No
Entity Well-known Seasoned Issuer	No
Entity Common Stock, Shares Outstanding (in shares)		19,178,296
Document Type	10-Q
Document Period End Date	Mar. 31, 2018
Document Fiscal Year Focus	2018
Document Fiscal Period Focus	Q1
Amendment Flag	false

XML

Condensed Consolidated Balance Sheets (Current Period Unaudited) - USD ($) $ in Thousands	Mar. 31, 2018	Dec. 31, 2017
CURRENT ASSETS
Cash	$ 1,050	$ 1,029
Accounts receivable, less allowance of $40 for doubtful accounts	972	940
Prepaid expenses and other assets	192	159
Assets held for sale	212	212
Total current assets	2,426	2,340
PROPERTY	65,650	65,650
Accumulated depreciation	(35,410)	(34,971)
Net property	30,240	30,679
OTHER ASSETS
Deferred development costs	10,485	10,395
Other noncurrent assets	1,363	1,387
Total other assets	11,848	11,782
TOTAL ASSETS	44,514	44,801
CURRENT LIABILITIES
Accounts payable	684	696
Payroll and employee benefits	310	784
Current portion of accrued retirement benefits	169	164
Deferred revenue	555	24
Other current liabilities	160	179
Total current liabilities	1,878	1,847
LONG-TERM LIABILITIES
Long-term debt	1,235	1,235
Non-current portion of accrued retirement benefits	7,780	7,867
Deposits	2,594	2,449
Deferred revenue	64	215
Other noncurrent liabilities	44	44
Total long-term liabilities	11,717	11,810
COMMITMENTS AND CONTINGENCIES (Note 11)
STOCKHOLDERS' EQUITY
Common stock--no par value, 43,000,000 shares authorized, 19,091,288 and 19,040,273 shares issued and outstanding	79,138	78,584
Additional paid in capital	9,246	9,246
Accumulated deficit	(37,396)	(36,432)
Accumulated other comprehensive loss	(20,069)	(20,254)
Total stockholders' equity	30,919	31,144
TOTAL LIABILITIES & STOCKHOLDERS' EQUITY	$ 44,514	$ 44,801

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Condensed Consolidated Balance Sheets (Current Period Unaudited) (Parentheticals) - USD ($) $ / shares in Thousands, $ in Thousands	Mar. 31, 2018	Dec. 31, 2017
Accounts receivable, allowance	$ 40	$ 40
Common stock, par value (in dollars per share)	$ 0	$ 0
Common stock, authorized (in shares)	43,000,000	43,000,000
Common stock, issued (in shares)	19,091,288	19,040,273
Common stock, outstanding (in shares)	19,091,288	19,040,273

XML

Condensed Consolidated Statements of Operations and Comprehensive Income (Loss) (Unaudited) - USD ($)	3 Months Ended
	Mar. 31, 2018	Mar. 31, 2017
OPERATING REVENUES
Operating revenues	$ 1,047,000
Leasing	1,495,000	$ 1,586,000
Operating revenues	2,542,000	9,683,000
OPERATING COSTS AND EXPENSES
Leasing	578,000	469,000
General and administrative	831,000	489,000
Share-based compensation	579,000	559,000
Depreciation	439,000	416,000
Total operating costs and expenses	3,367,000	3,555,000
OPERATING INCOME (LOSS)	(825,000)	6,128,000
Pension and other post-retirement expenses	(102,000)	(202,000)
Interest expense	(37,000)	(94,000)
NET INCOME (LOSS)	(964,000)	5,832,000
Pension, net of income taxes of $0	185,000	204,000
COMPREHENSIVE INCOME (LOSS)	$ (779,000)	$ 6,036,000
NET INCOME (LOSS) PER COMMON SHARE--BASIC AND DILUTED (in dollars per share)	$ (0.05)	$ 0.31
Real Estate [Member]
OPERATING REVENUES
Operating revenues	$ 36,000	$ 7,139,000
OPERATING COSTS AND EXPENSES
Operating costs	66,000	736,000
Operating costs	66,000	736,000
Public Utilities [Member]
OPERATING REVENUES
Operating revenues	704,000	676,000
OPERATING COSTS AND EXPENSES
Operating costs	521,000	553,000
Operating costs	521,000	553,000
Resort Amenities and Other [Member]
OPERATING REVENUES
Operating revenues	307,000	282,000
OPERATING COSTS AND EXPENSES
Operating costs	353,000	333,000
Operating costs	$ 353,000	$ 333,000

XML

Condensed Consolidated Statements of Operations and Comprehensive Income (Loss) (Unaudited) (Parentheticals) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2018	Mar. 31, 2017
Pension, taxes	$ 0	$ 0

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Condensed Consolidated Statements of Stockholders' Equity (Unaudited) - USD ($) shares in Thousands, $ in Thousands	Common Stock [Member]	Additional Paid-in Capital [Member]	Retained Earnings [Member]	AOCI Attributable to Parent [Member]	Total
Balance (in shares) at Dec. 31, 2016	18,958
Balance at Dec. 31, 2016	$ 78,123	$ 9,246	$ (47,332)	$ (22,295)	$ 17,742
Share-based compensation		87			87
Vested restricted stock issued (in shares)	14
Vested restricted stock issued	$ 87	(87)
Shares cancelled to pay tax liability (in shares)	(4)
Shares cancelled to pay tax liability	$ (50)				(50)
Other comprehensive income - pension				204	204
Net loss			5,832		5,832
Balance (in shares) at Mar. 31, 2017	18,968
Balance at Mar. 31, 2017	$ 78,160	9,246	(41,500)	(22,091)	23,815
Net income			5,832		5,832
Balance (in shares) at Dec. 31, 2017	19,040
Balance at Dec. 31, 2017	$ 78,584	9,246	(36,432)	(20,254)	31,144
Share-based compensation (in shares)	71
Share-based compensation	$ 845	120			965
Vested restricted stock issued (in shares)	15
Vested restricted stock issued	$ 120	(120)
Shares cancelled to pay tax liability (in shares)	(35)
Shares cancelled to pay tax liability	$ (411)				(411)
Other comprehensive income - pension				185	185
Net loss			(964)		(964)
Balance (in shares) at Mar. 31, 2018	19,091
Balance at Mar. 31, 2018	$ 79,138	9,246	(37,396)	(20,069)	30,919
Net income			$ (964)		$ (964)

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Condensed Consolidated Statements of Cash Flows (Unaudited) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2018	Mar. 31, 2017
NET CASH PROVIDED BY OPERATING ACTIVITIES	$ 522	$ 7,052
INVESTING ACTIVITIES
Payments of deferred development costs	(90)	(1,376)
NET CASH USED IN INVESTING ACTIVITIES	(90)	(1,376)
FINANCING ACTIVITIES
Payments of long-term debt		(5,622)
Debt and common stock issuance costs and other	(411)	(77)
NET CASH USED IN FINANCING ACTIVITIES	(411)	(5,699)
NET INCREASE (DECREASE) IN CASH	21	(23)
CASH AT BEGINNING OF PERIOD	1,029	602
CASH AT END OF PERIOD	1,050	579
Cash paid during the period:
Interest	$ 30	$ 50

XML

Supplemental Non-cash Activities

3 Months Ended

Mar. 31, 2018

Notes to Financial Statements

Cash Flow, Supplemental Disclosures [Text Block]

SUPPLEMENTAL NON-CASH ACTIVITIES:

● Common stock issued to certain members of the Company’s management totaled $845,000 for the three months ended March 31, 2018.

● Accounts payable at March 31, 2018 and 2017 includes $100,000 and $150,000, respectively, for the estimated cost of subdividing the Kapalua Golf Academy practice course.

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Note 1 - Basis of Presentation

3 Months Ended

Mar. 31, 2018

Notes to Financial Statements

Organization Consolidation and Presentation of Financial Statements Liquidity Disclosure [Text Block]

1.

BASIS OF PRESENTATION

The accompanying interim unaudited condensed consolidated financial statements have been prepared by Maui Land & Pineapple Company, Inc. (together with its subsidiaries, the “Company”) in accordance with U.S. generally accepted accounting principles (GAAP) for interim financial information that are consistent in all material respects with those applied in the Company’s Annual Report on Form

10

-K for the fiscal year ended

December 31, 2017,

and pursuant to the instructions to Form

10

-Q and Article

10

promulgated by Regulation S-

X

of the Securities and Exchange Commission (SEC). Accordingly, they do

not

include all of the information and notes to financial statements required by GAAP for complete financial statements. In the opinion of management, the accompanying condensed consolidated financial statements contain all normal and recurring adjustments necessary to fairly present the Company’s financial position, results of operations and cash flows for the interim periods ended

March 31, 2018

and

2017.

The condensed consolidated financial statements and notes should be read in conjunction with the consolidated financial statements and notes thereto included in the Company’s Form

10

-K for the fiscal year ended

December 31, 2017.

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Note 2 - Use of Estimates and Reclassifications

3 Months Ended

Mar. 31, 2018

Notes to Financial Statements

Use of Estimates and Reclassifications Disclosure [Text Block]

2.

USE OF ESTIMATES AND RECLASSIFICATIONS

The Company’s reports for interim periods utilize numerous estimates of general and administrative expenses and other costs for the full year. Future actual amounts

may

differ from these estimates. Amounts reflected in interim reports are

not

necessarily indicative of results for a full year. Certain amounts in the

December 31, 2017

condensed consolidated balance sheet were reclassified to conform to the current period’s presentation. Such amounts had

no

impact on total assets and liabilities or net income and comprehensive income (loss) previously reported.

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Note 3 - Basic and Diluted Shares

3 Months Ended

Mar. 31, 2018

Notes to Financial Statements

Earnings Per Share [Text Block]

3.

BASIC AND DILUTED SHARES

Basic and diluted weighted-average shares outstanding for the

three

months ended

March 31, 2018

and

2017

were as follows:

	Three Months Ended
	March 31,
	2018		2017
Basic and diluted		19,058,202		18,962,823
Potentially dilutive		27,500		27,500

Basic net income (loss) per common share is computed by dividing net income (loss) by the weighted-average number of common shares outstanding. Diluted net income (loss) per common share is computed similar to basic net income (loss) per common 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. The treasury stock method is utilized to determine the number of potentially dilutive shares related to the outstanding non-qualified stock options.

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Note 4 - Property

3 Months Ended

Mar. 31, 2018

Notes to Financial Statements

Property, Plant and Equipment Disclosure [Text Block]

4.

     PROPERTY

Property at

March 31, 2018

and

December 31, 2017

consisted of the following:

	March 31, 2018		December 31, 2017
	(in thousands)
Land	$	5,059	$	5,059
Land improvements		24,727		24,727
Buildings		24,884		24,884
Machinery and equipment		10,980		10,980
Total property		65,650		65,650
Less accumulated depreciation		35,410		34,971
Net property	$	30,240	$	30,679

Land

Most of the Company’s

22,800

acres of land were acquired between

1911

and

1932

and is carried in its balance sheets at cost. Approximately

20,700

acres of land are located in West Maui and comprise a largely contiguous parcel that extends from the sea to an elevation of approximately

5,700

feet. This parcel includes approximately

900

acres within the Kapalua Resort, a master-planned, destination resort and residential community located in West Maui encompassing approximately

3,000

acres. The Company’s remaining

2,100

acres of land are located in Upcountry Maui in an area commonly known as Hali’imaile and are mainly comprised of leased agricultural fields, including related processing and maintenance facilities.

Land Improvements

Land improvements are comprised primarily of roads, utilities, and landscaping infrastructure improvements at the Kapalua Resort. Also included is the Company’s potable and non-potable water systems in West Maui. The majority of the Company’s land improvements were constructed and placed in service in the mid-to-late

1970’s

or conveyed in

2017.

Depreciation expense would be considerably higher if these assets were stated at current replacement cost.

Buildings

Buildings are comprised of restaurant, retail and light industrial spaces located at the Kapalua Resort and Hali’imaile which are used in the Company’s leasing operations. The majority of the buildings were constructed and placed in service in the mid-to-late

1970’s.

Depreciation expense would be considerably higher if these assets were stated at current replacement cost.

Machinery and Equipment

Machinery and equipment are mainly comprised of zipline course equipment installed in

2008

at the Kapalua Resort and used in the Company’s leasing operations. Also included are machinery and equipment used in the Company’s utilities operations.

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Note 5 - Assets Held for Sale and Real Estate Sales

3 Months Ended

Mar. 31, 2018

Notes to Financial Statements

Assets Held-for-Sale and Real Estate Sales Disclosure [Text Block]

5

.

ASSETS HELD FOR SALE

AND REAL ESTATE SALES

Assets held for sale at

March 31, 2018

and

December 31, 2017

consisted of the following:

	March 31 , 201 7		December 31, 201 7
	(in thousands)
Upcountry Maui, 630-acre parcel of agricultural land	$	156	$	156
Upcountry Maui, 80-acre parcel of agricultural land and wastewater treatment facility		56		56
Assets held for sale	$	212	$	212

The above assets held for sale have

not

been pledged as collateral under the Company’s credit facility.

In

February 2017,

the Company sold the

15

-acre Kapalua Golf Academy practice course located in the Kapalua Resort for

$7.0

million to the owner of the Kapalua Plantation and Bay Golf Courses. The property was sold without any development entitlements. The sale resulted in a gain of approximately

$6.4

million. The Company used

$5.6

million of the sale proceeds to pay down its long-term debt.

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Note 6 - Long-term Debt

3 Months Ended

Mar. 31, 2018

Notes to Financial Statements

Debt Disclosure [Text Block]

6

.

LONG-TERM DEBT

Long-term debt is comprised of amounts outstanding under the Company’s

$15.0

million revolving line of credit facility with First Hawaiian Bank (Credit Facility). The Credit Facility matures on

December 31, 2019

and provides for

two

optional

one

-year extension periods. Interest on borrowings is at LIBOR plus

3.50%,

or

4.35%

and

4.86%

at

March 31, 2018

and

December 31, 2017,

respectively. The Company has pledged its

800

-acre Kapalua Mauka project and approximately

30,000

square feet of commercial leased space in the Kapalua Resort as security for the Credit Facility. Net proceeds from the sale of any collateral are required to be repaid toward outstanding borrowings and will permanently reduce the Credit Facility’s revolving commitment amount. There are

no

commitment fees on the unused portion of the Credit Facility.

The terms of the Credit Facility include various representations, warranties, affirmative, negative and financial covenants and events of default customary for financings of this type. Financial covenants include a minimum liquidity (as defined) of

$1.5

million, a maximum of

$45.0

million in total liabilities, and a limitation on new indebtedness.

The Company believes that it is in compliance with the covenants under the Credit Facility as of

March 31, 2018.

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Note 7 - Share-based Compensation

3 Months Ended

Mar. 31, 2018

Notes to Financial Statements

Disclosure of Compensation Related Costs, Share-based Payments [Text Block]

7 . SHARE-BASED COMPENSATION

The Company’s directors, officers and certain members of management receive a portion of their compensation in shares of the Company’s common stock granted under the Company’s

2017

Equity and Incentive Award Plan (Equity Plan). Share-based compensation is valued based on the average of the high and low share price on the date of grant. Shares are issued upon execution of agreements reflecting the grantee’s acceptance of the respective shares subject to the terms and conditions of the Equity Plan. Restricted shares issued under the Equity Plan vest quarterly and have voting and regular dividend rights but cannot be disposed of until such time as they are vested. All unvested restricted shares are forfeited upon the grantee’s termination of directorship or employment from the Company.

Share-based compensation is determined and awarded annually to the Company’s officers and certain members of management based on their achievement of certain predefined performance goals and objectives under the Equity Plan. Such share-based compensation is comprised of an annual incentive paid in shares of common stock and a long-term incentive paid in restricted shares vesting quarterly over a period of

three

years.

Share-based compensation totaled

$579,000

and

$559,000

for the

three

months ended

March 31, 2018

and

2017,

respectively. Included in these amounts were

$120,000

and

$87,000

of restricted shares of common stock which vested during the

first

three

months of

2018

and

2017,

respectively.

XML

Note 8 - Accrued Retirement Benefits

3 Months Ended

Mar. 31, 2018

Notes to Financial Statements

Pension and Other Postretirement Benefits Disclosure [Text Block]

8 . ACCRUED RETIREMENT BENEFITS

Accrued retirement benefits at

March 31, 2018

and

December 31, 2017

consisted of the following:

	March 31			December 31,
	2018			2017
	(in thousands)
Defined benefit pension plans	$	5,706		$	5,812
Non-qualified retirement plans		2,243			2,219
Total		7,949			8,031
Less current portion		(169	)		(164	)
Non-current portion of accrued retirement benefits	$	7,780		$	7,867

The net periodic benefit costs for pension and postretirement benefits for the

three

months ended

March 31, 2018

and

2017

were as follows:

	Three Months
	Ended March 31,
	2018			2017
	(in thousands)
Interest cost	$	495		$	557
Expected return on plan assets		(578	)		(562	)
Amortization of net loss		185			207
Pension and other postretirement expenses	$	102		$	202

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Note 9 - Income Taxes

3 Months Ended

Mar. 31, 2018

Notes to Financial Statements

Income Tax Disclosure [Text Block]

9 . INCOME TAXES

The Company uses 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. The Company’s effective tax rate for

2018

and

2017

reflects the recognition of expected federal alternative minimum tax liabilities and interim period tax benefits and changes to its tax valuation allowance. In

2017,

the Company fully utilized the special alternative minimum tax net operating loss carryforward from

2008

which allows for

100%

offset to the alternative minimum taxable income in subsequent years.

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Note 10 - Reportable Operating Segments

3 Months Ended

Mar. 31, 2018

Notes to Financial Statements

Segment Reporting Disclosure [Text Block]

1

0

.

REPORTABLE OPERATING SEGMENTS

The Company’s reportable operating segments are comprised of the discrete business units whose operating results are regularly reviewed by the Company’s Chief Executive Officer – its chief decision maker – in assessing performance and determining the allocation of resources. Reportable operating segments are as follows:

• Real Estate includes the development and sale of real estate inventory and the operations of Kapalua Realty Company, a general brokerage real estate company located within the Kapalua Resort.

• Leasing primarily includes revenues and expenses from real property leasing activities, license fees and royalties for the use of certain of the Company’s trademarks and brand names by third parties, and the cost of maintaining the Company’s real estate assets, including conservation activities.

• Utilities primarily include the operations of Kapalua Water Company and Kapalua Waste Treatment Company, the Company’s water and sewage transmission services (regulated by the Hawaii Public Utilities Commission) for the Kapalua Resort. The operating segment also includes the management of ditch, reservoir and well systems that provide non-potable irrigation water to West and Upcountry Maui areas.

• Resort Amenities include a membership program that provides certain benefits and privileges within the Kapalua Resort for its members.

The Company’s reportable operating segment results are measured based on operating income (loss), exclusive of interest, depreciation, general and administrative, share-based compensation, pension and other postretirement expenses.

Reportable operating segment revenues and income for the

three

months ended

March 31, 2018

and

2017

were as follows:

	Three Months
	Ended March 31,
	2018			2017
	(in thousands)
Operating Segment Revenues
Real estate	$	36		$	7,139
Leasing		1,495			1,586
Utilities		704			676
Resort amenities and other		307			282
Total Operating Segment Revenues	$	2,542		$	9,683
Operating Segment Income (Loss)
Real estate	$	(30	)	$	6,403
Leasing		917			1,117
Utilities		183			123
Resort amenities and other		(46	)		(51	)
Total Operating Segment Income	$	1,024		$	7,592

XML

Note 11 - Commitments and Contingencies

3 Months Ended

Mar. 31, 2018

Notes to Financial Statements

Commitments and Contingencies Disclosure [Text Block]

1 1 . C OMMITMENTS AND CONTINGENCIES

There have been

no

changes in the status of commitments and contingencies as reported in the Company’s Annual Report on Form

10

-K for the fiscal year ended

December 31, 2017.

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.

XML

Note 12 - Fair Value Measurements

3 Months Ended

Mar. 31, 2018

Notes to Financial Statements

Fair Value Measurement and Measurement Inputs, Recurring and Nonrecurring [Text Block]

1 2 . F AIR VALUE MEASUREMENTS

GAAP establishes a framework for measuring fair value, and requires certain disclosures about fair value measurements 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. GAAP requires that financial assets and liabilities 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.

The Company considers all cash on hand to be unrestricted cash for the purposes of the consolidated balance sheets and consolidated statements of cash flows. The fair value of receivables and payables approximate their carrying value due to the short-term nature of the instruments. The valuation is based on settlements of similar financial instruments all of which are short-term in nature and are generally settled at or near cost. The fair value of debt was estimated based on borrowing rates currently available to the Company for debt with similar terms and maturities. The carrying amount of debt at

March 31, 2018

and

December 31, 2017

was

$1,235,000

,

which approximated fair value. The fair value of debt was measured using the level

2

inputs, noted above.

XML

Note 13 - New Accounting Pronouncements

3 Months Ended

Mar. 31, 2018

Notes to Financial Statements

New Accounting Pronouncements and Changes in Accounting Principles [Text Block]

13

.

NEW ACCOUNTING PRONOUNCEMENTS

In

May 2014,

the Financial Accounting Standards Board (FASB) issued an Accounting Standards Update (ASU) on recognition of revenue arising from contracts with customers, as well as recognition of gains and losses from the transfer of nonfinancial assets in contracts with noncustomers, and subsequently, it issued additional guidance that further clarified the ASU. The revenue recognition ASU has implications for all revenues, excluding those that are under the specific scope of other accounting standards, such as revenue associated with leases (described below). 

The Company’s revenues for the

three

months ended

March 31, 2018,

that were subject to the revenue recognition ASU were as follows (in thousands):

Real estate	$	36
Utilities		704
Resort amenities and other		307
Total	$	1,047

The core principle underlying the revenue recognition ASU is that an entity will recognize revenue to represent the transfer of goods and services to customers in an amount that reflects the consideration to which the entity expects to be entitled in such exchange. This will require entities to identify contractual performance obligations and determine whether revenue should be recognized at a point in time or over time, based on when control of goods and services transfers to a customer. The Company’s revenue streams are recognized at a point in time except for the resort amenities revenue where the annual membership dues are recognized over a period of

twelve

months.

A customer is distinguished from a noncustomer by the nature of the goods or services that are transferred. Customers are provided with goods or services that are generated by a company’s ordinary output activities, whereas noncustomers are provided with nonfinancial assets that are outside of a company’s ordinary output activities. This distinction

may

not

significantly change the pattern of income recognition, but determines whether that income is classified as revenue (contracts with customers) or other gains/losses (contracts with noncustomers) in the Company’s financial statements. The Company’s revenue streams for the period were generated as ordinary output activities to customers as defined by the guidance and were properly classified as revenues.

The ASU requires the use of a new

five

-step model to recognize revenue from customer contracts. The

five

-step model requires that the Company (i) identify the contract with the customer, (ii) identify the performance obligations in the contract, (iii) determine the transaction price, including variable consideration to the extent that it is probable that a significant future reversal will

not

occur, (iv) allocate the transaction price to the respective performance obligations in the contract, and (v) recognize revenue when (or as) the Company satisfies the performance obligation. The application of the

five

-step model to the revenue streams compared to the prior guidance did

not

result in significant changes in the way the Company records its real estate revenue, utilities revenue and resort amenities and other revenues. 

An entity will also be required to determine if it controls the goods or services prior to the transfer to the customer in order to determine if it should account for the arrangement as a principal or agent. Principal arrangements, where the entity controls the goods or services provided, will result in the recognition of the gross amount of consideration expected in the exchange. Agent arrangements, where the entity simply arranges but does

not

control the goods or services being transferred to the customer, will result in the recognition of the net amount the entity is entitled to retain in the exchange. Upon adoption of the new lease ASU in

2019,

the Company

may

be required to classify its tenant recoveries into lease and nonlease components, whereby the nonlease components would be subject to the revenue recognition ASU, pending the resolution of the proposed amendment issued by the FASB in

January 2018.

Property services categorized as nonlease components that are reimbursed by the Company’s tenants

may

need to be presented on a net basis if it is determined that the Company held an agent arrangement.

Upon adoption, entities can use either a full retrospective or modified retrospective method to adopt this ASU. Under the full retrospective method, all periods presented will be restated upon adoption to conform to the new standard and a cumulative adjustment for effects on periods prior to

2016

will be recorded to retained earnings as of

January 1, 2016.

Under the modified retrospective approach, prior periods are

not

restated to conform to the new standard. Instead, a cumulative adjustment for effects of applying the new standard to periods prior to

2018

is recorded to retained earnings as of

January 1, 2018.

Additionally, incremental footnote disclosures are required to present the

2018

revenues under the prior standard. Under the modified retrospective method, an entity

may

also elect to apply the standard to either (i) all contracts as of

January 1, 2018,

or (ii) only to contracts that are

not

completed as of

January 1, 2018.

The Company elected to adopt this guidance using the modified retrospective method at

January 1, 2018

which did

not

result in an adjustment to the retained earnings. Additionally, upon adoption, the Company evaluated its revenue recognition policy for all revenue streams within the scope of the ASU under previous standards and using the

five

-step model under the new guidance and confirmed that there were

no

differences in the pattern of revenue recognition.

In

February 2016,

FASB issued an ASU that sets out the principles for the recognition, measurement, presentation, and disclosure of leases for both parties to a lease agreement (i.e., lessees and lessors). The ASU is effective for the Company

no

later than

January 1, 2019,

with early adoption permitted. The ASU requires the Company to identify lease and nonlease components of a lease agreement. This ASU will govern the recognition of revenue for lease components. Revenue related to nonlease components under our lease agreements will be subject to the new revenue recognition standard effective upon adoption of the new lease accounting standard. The Company expects to adopt the new lease accounting standard on

January 1, 2019.

In

August 2016,

FASB issued ASU

No.

2016

-

15,

Statement of Cash Flows. This ASU aims to reduce the existing diversity in practice in how certain cash receipts and cash payments are presented and classified in the statement of cash flows. This ASU is effective for public business entities for annual reporting periods beginning after

December 15, 2017.

The adoption of this guidance did

not

have a material impact on the Company’s financial statements.

In

October 2016,

FASB issued ASU

No.

2016

-

16,

Income Taxes. This ASU simplifies the recognition of intra-entity income tax consequences when an asset other than inventory is transferred. This ASU is effective for annual reporting periods beginning after

December 15, 2017

for public business entities. The adoption of this guidance did

not

have a material impact on the Company’s financial statements.

In

November 2016,

FASB issued ASU

No.

2016

-

18,

Statement of Cash Flows-Restricted Cash. This ASU addresses the diversity in the classification and presentation of changes in restricted cash in the statement of cash flows. This ASU is effective for annual reporting periods beginning after

December 15, 2017

for public business entities. The adoption of this guidance did

not

have a material impact on the Company’s financial statements.

In

December 2016,

FASB issued ASU

No.

2016

-

20,

Technical Corrections and Improvements to Topic

606,

Revenue from Contracts with Customers. This ASU summarizes the various amendments that serve to clarify the codification or to correct unintended application of guidance. This ASU is effective for annual reporting periods beginning after

December 15, 2017.

The adoption of this guidance did

not

have a material impact on the Company’s financial statements.

In

March 2017,

FASB issued ASU

No.

2017

-

07,

Compensation-Retirement Benefits. This ASU aims to improve the presentation of the net periodic pension cost and net periodic postretirement benefit cost by requiring the reporting of the service cost component in the same line item or items as other compensation costs arising from services rendered by employees during the period. The other components of net benefit cost are required to be presented in the income statement separately from the service cost component and outside a subtotal of income from operations. This ASU is effective for public business entities for annual periods beginning after

December 15, 2017.

The adoption of this guidance is reflected on the Company’s financial statements.

In

May 2017,

the FASB issued ASU

No.

2017

-

09,

Compensation-Stock Compensation (Topic

718

) Scope of Modification Accounting. This ASU clarifies which changes to the terms or conditions of a share-based payment award require an entity to apply modification accounting in Topic

718.

The standard is effective for interim and annual reporting periods beginning after

December 15, 2017,

with early adoption permitted. The adoption of this guidance did

not

have a material impact on the Company’s financial statements.

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Note 3 - Basic and Diluted Shares (Tables)

3 Months Ended

Mar. 31, 2018

Notes Tables

Schedule of Antidilutive Securities Excluded from Computation of Earnings Per Share [Table Text Block]

	Three Months Ended
	March 31,
	2018		2017
Basic and diluted		19,058,202		18,962,823
Potentially dilutive		27,500		27,500

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Note 4 - Property (Tables)

3 Months Ended

Mar. 31, 2018

Notes Tables

Property, Plant and Equipment [Table Text Block]

	March 31, 2018		December 31, 2017
	(in thousands)
Land	$	5,059	$	5,059
Land improvements		24,727		24,727
Buildings		24,884		24,884
Machinery and equipment		10,980		10,980
Total property		65,650		65,650
Less accumulated depreciation		35,410		34,971
Net property	$	30,240	$	30,679

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Note 5 - Assets Held for Sale and Real Estate Sales (Tables)

3 Months Ended

Mar. 31, 2018

Notes Tables

Disclosure of Long Lived Assets Held-for-sale [Table Text Block]

	March 31 , 201 7		December 31, 201 7
	(in thousands)
Upcountry Maui, 630-acre parcel of agricultural land	$	156	$	156
Upcountry Maui, 80-acre parcel of agricultural land and wastewater treatment facility		56		56
Assets held for sale	$	212	$	212

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Note 8 - Accrued Retirement Benefits (Tables)

3 Months Ended

Mar. 31, 2018

Notes Tables

Schedule of Defined Benefit Plans Disclosures [Table Text Block]

	March 31			December 31,
	2018			2017
	(in thousands)
Defined benefit pension plans	$	5,706		$	5,812
Non-qualified retirement plans		2,243			2,219
Total		7,949			8,031
Less current portion		(169	)		(164	)
Non-current portion of accrued retirement benefits	$	7,780		$	7,867

Schedule of Net Benefit Costs [Table Text Block]

	Three Months
	Ended March 31,
	2018			2017
	(in thousands)
Interest cost	$	495		$	557
Expected return on plan assets		(578	)		(562	)
Amortization of net loss		185			207
Pension and other postretirement expenses	$	102		$	202

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Note 10 - Reportable Operating Segments (Tables)

3 Months Ended

Mar. 31, 2018

Notes Tables

Schedule of Segment Reporting Information, by Segment [Table Text Block]

	Three Months
	Ended March 31,
	2018			2017
	(in thousands)
Operating Segment Revenues
Real estate	$	36		$	7,139
Leasing		1,495			1,586
Utilities		704			676
Resort amenities and other		307			282
Total Operating Segment Revenues	$	2,542		$	9,683
Operating Segment Income (Loss)
Real estate	$	(30	)	$	6,403
Leasing		917			1,117
Utilities		183			123
Resort amenities and other		(46	)		(51	)
Total Operating Segment Income	$	1,024		$	7,592

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Note 13 - New Accounting Pronouncements (Tables)

3 Months Ended

Mar. 31, 2018

Notes Tables

Disaggregation of Revenue [Table Text Block]

Real estate	$	36
Utilities		704
Resort amenities and other		307
Total	$	1,047

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Supplemental Non-cash Activities (Details Textual) - USD ($)	3 Months Ended
	Mar. 31, 2018	Mar. 31, 2017
Stock Issued	$ 845,000
Estimated Cost of Subdividing, Incurred but Not yet Paid	$ 100,000	$ 150,000

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Note 3 - Basic and Diluted Shares - Antidilutive Securities (Details) - shares	3 Months Ended
	Mar. 31, 2018	Mar. 31, 2017
Basic and diluted (in shares)	19,058,202	18,962,823
Potentially dilutive (in shares)	27,500	27,500

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Note 4 - Property (Details Textual) - Land [Member]	3 Months Ended
	Mar. 31, 2018 ft² a
Area of Land	22,800
West Maui [Member]
Area of Land	20,700
Area of Elevation from Sea | ft²	5,700
West Maui [Member] | Kapalua Resort [Member]
Area of Land	3,000
Area of Land Designated	900
Upcountry Maui [Member]
Area of Land	2,100

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Note 4 - Property - Property, Plant and Equipment (Details) - USD ($) $ in Thousands	Mar. 31, 2018	Dec. 31, 2017
Property, plant and equipment, gross	$ 65,650	$ 65,650
Less accumulated depreciation	35,410	34,971
Net property	30,240	30,679
Land [Member]
Property, plant and equipment, gross	5,059	5,059
Land Improvements [Member]
Property, plant and equipment, gross	24,727	24,727
Building [Member]
Property, plant and equipment, gross	24,884	24,884
Machinery and Equipment [Member]
Property, plant and equipment, gross	$ 10,980	$ 10,980

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Note 5 - Assets Held for Sale and Real Estate Sales (Details Textual) $ in Millions	1 Months Ended
	Feb. 28, 2017 USD ($) a
Repayments of Lines of Credit	$ 5.6
Kapalua Golf Academy [Member]
Area of Real Estate Property | a	15
Proceeds from Sale of Real Estate, Total	$ 7.0
Gain (Loss) on Sale of Properties	$ 6.4

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Note 5 - Assets Held for Sale and Real Estate Sales- Assets Held for Sale (Details) - USD ($) $ in Thousands	Mar. 31, 2018	Dec. 31, 2017
Assets held for sale	$ 212	$ 212
630-Acre Parcel Of Agricultural Land [Member] | Upcountry Maui [Member]
Assets held for sale	156	156
Agricultural Land and Wastewater Treatment Facility [Member] | Upcountry Maui [Member]
Assets held for sale	$ 56	$ 56

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Note 5 - Assets Held for Sale and Real Estate Sales- Assets Held for Sale (Details) (Parentheticals) - a	Mar. 31, 2018	Dec. 31, 2017
630-Acre Parcel Of Agricultural Land [Member]
Area of real estate (Acre)	630	630
Agricultural Land and Wastewater Treatment Facility [Member] | Upcountry Maui [Member]
Area of real estate (Acre)	80	80

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Note 6 - Long-term Debt (Details Textual) - First Hawaiian Bank Revolving Line of Credit [Member] - Revolving Credit Facility [Member] $ in Thousands	3 Months Ended
	Mar. 31, 2018 USD ($) ft² a	Dec. 31, 2017
Line of Credit Facility, Maximum Borrowing Capacity	$ 15,000
Number of Optional Extension Periods	2
Line of Credit Facility, Extension Period	1 year
Debt Instrument, Interest Rate, Effective Percentage	4.35%	4.86%
Line of Credit Facility, Commitment Fee Amount	$ 0
Debt Instrument, Covenant, Required Minimum Liquidity	1,500
Debt Instrument, Covenant, Maximum Total Liabilities	$ 45,000
Kapalua Mauka [Member]
Pledged Assets not Separately Reported, Area of Real Estate | a	800
Kapalua Resort [Member]
Pledged Assets not Separately Reported, Area of Real Estate | ft²	30,000
London Interbank Offered Rate (LIBOR) [Member]
Debt Instrument, Basis Spread on Variable Rate	3.50%

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Note 7 - Share-based Compensation (Details Textual) - USD ($)	3 Months Ended
	Mar. 31, 2018	Mar. 31, 2017
Allocated Share-based Compensation Expense, Total	$ 579,000	$ 559,000
Restricted Stock [Member]
Share-based Compensation Arrangement by Share-based Payment Award, Award Vesting Period	3 years
Allocated Share-based Compensation Expense, Total	$ 120,000	$ 87,000

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Note 8 - Accrued Retirement Benefits - Accrued Retirement Benefits (Details) - USD ($) $ in Thousands	Mar. 31, 2018	Dec. 31, 2017
Accrued retirement benefits	$ 7,949	$ 8,031
Less current portion	(169)	(164)
Non-current portion of accrued retirement benefits	7,780	7,867
Pension Plan [Member] | Qualified Plan [Member]
Accrued retirement benefits	5,706	5,812
Supplemental Employee Retirement Plan [Member] | Nonqualified Plan [Member]
Accrued retirement benefits	$ 2,243	$ 2,219

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Note 8 - Accrued Retirement Benefits - Net Periodic Cost (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2018	Mar. 31, 2017
Interest cost	$ 495	$ 557
Expected return on plan assets	(578)	(562)
Amortization of net loss	185	207
Pension and other postretirement expenses	$ 102	$ 202

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Note 9 - Income Taxes (Details Textual)	Mar. 31, 2018
Alternative Minimum Tax, Operating Loss Carryforwards Offset Percentage	100.00%

XML

Note 10 - Reportable Operating Segments - Financial Results for Reportable Segments (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2018	Mar. 31, 2017
Operating Segment Revenues
Operating revenues	$ 2,542	$ 9,683
Operating Segment Income (Loss)
Operating income (loss)	(825)	6,128
Operating Segments [Member]
Operating Segment Revenues
Operating revenues	2,542	9,683
Operating Segment Income (Loss)
Operating income (loss)	1,024	7,592
Operating Segments [Member] | Real Estate Segment [Member]
Operating Segment Revenues
Operating revenues	36	7,139
Operating Segment Income (Loss)
Operating income (loss)	(30)	6,403
Operating Segments [Member] | Leasing Segment [Member]
Operating Segment Revenues
Operating revenues	1,495	1,586
Operating Segment Income (Loss)
Operating income (loss)	917	1,117
Operating Segments [Member] | Utilities Segment [Member]
Operating Segment Revenues
Operating revenues	704	676
Operating Segment Income (Loss)
Operating income (loss)	183	123
Operating Segments [Member] | Resort Amenities Segment [Member]
Operating Segment Revenues
Operating revenues	307	282
Operating Segment Income (Loss)
Operating income (loss)	$ (46)	$ (51)

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Note 12 - Fair Value Measurements (Details Textual) - USD ($)	Mar. 31, 2018	Dec. 31, 2017
Fair Value, Inputs, Level 2 [Member]
Long-term Debt, Total	$ 1,235,000	$ 1,235,000

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Note 13 - New Accounting Pronouncements - Revenue Recognition (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2018	Mar. 31, 2017
Operating revenues	$ 1,047
Real Estate [Member]
Operating revenues	36	$ 7,139
Public Utilities [Member]
Operating revenues	704	676
Resort Amenities and Other [Member]
Operating revenues	$ 307	$ 282