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Impairment of Real Estate and Investment in Joint Venture. The Company's real estate assets are reviewed for possible impairment when events or circumstances indicate that the carrying value may not be recoverable. Additionally, the Company's investments in unconsolidated affiliates are reviewed for impairment whenever there is evidence that fair value may be below carrying cost.

During the second quarter of 2012, as a result of a change in its development strategy, A&B recorded non-cash impairments and equity losses totaling $9.8 million related to two of its three real estate development projects on the Mainland, of which $5.1 million relates to the Company's Santa Barbara (CA) landholdings and $4.7 million relates to the Company's joint venture investment in Bakersfield (CA) for a commercial development. The impairment write-downs to estimated fair values reflect the Company's change to its development strategy to focus on development projects in Hawaii, and therefore, its related decision not to proceed with the development of these California real estate assets. The impairment of the Santa Barbara landholdings are classified within Operating costs and expenses in the condensed consolidated statements of income and the impairment and equity losses of the Company's investment in its Bakersfield joint venture is classified as Impairment and equity losses related to Bakersfield joint venture in the condensed consolidated statements of income. The remaining aggregate book value of the two projects is $12.9 million, and the third project, in Palmdale, California, has a book value of $4.7 million.