INVESTMENTS IN AFFILIATES

12 Months Ended

Dec. 31, 2011

INVESTMENTS IN AFFILIATES [Abstract]

INVESTMENTS IN AFFILIATES

4.           INVESTMENTS IN AFFILIATES

At December 31, 2011 and 2010, investments consisted principally of equity in limited liability companies. The Company has the ability to exercise significant influence over the operating and financial policies of these investments and, accordingly, accounts for its investments using the equity method of accounting. Consolidated retained earnings at December 31, 2011 that represent undistributed earnings of investments in affiliates was approximately $41 million. Dividends and distributions from unconsolidated affiliates totaled $6 million in 2011 and $8 million for each of the years ended December 31, 2010 and 2009.

The Company's investments in affiliates are summarized, by industry, as follows (in millions):

	2011		2010
Investment in Unconsolidated Affiliated Companies:
Real Estate and Other	$	291	$	276
Transportation		56		53
Total Investments	$	347	$	329

Operating results include the Company's proportionate share of net income from its equity method investments. A summary of financial information for the Company's equity method investments by industry at December 31 is as follows (in millions):

	2011						2010
	Real Estate			Transportation			Real Estate			Transportation
Current assets		$	21		$	90		$	42		$	88
Noncurrent assets			612			119			623			111
Total assets		$	633		$	209		$	665		$	199
Current liabilities		$	17		$	42		$	15		$	39
Noncurrent liabilities			112			17			164			22
Total liabilities		$	129		$	59		$	179		$	61

	Year Ended December 31,
	2011			2010		2009
Real Estate:
Operating revenue	$	20		$	30	$	14
Operating costs and expenses		32			23		9
Operating (loss) income	$	(12	)	$	7	$	5
Income (loss) from continuing operations	$	(15	)	$	7	$	1
Net income (loss)	$	(15	)	$	7	$	1
Transportation:
Operating revenue	$	579		$	568	$	476
Operating costs and expenses		572			548		470
Operating income	$	7		$	20	$	6
Income from continuing operations*	$	26		$	36	$	20
Net income	$	26		$	36	$	20

* Includes earnings from equity method investments held by the investee.

           Real Estate: In April 2002, the Company entered into a joint venture with DMB Communities II, an affiliate of DMB Associates, Inc., an Arizona-based developer of master-planned communities (“DMB”), for the development of Kukui`ula, a master planned resort residential community located in Poipu, Kauai, planned for up to 1,500 resort residential units. The capital contributed by A&B to the joint venture, including the value of land initially contributed, net of joint venture earnings and losses, was approximately $245 million as of December 31, 2011. Due to the joint venture's obligation to complete improvements and amenities, the joint venture uses the percentage-of-completion method for revenue recognition. The Company does not have a controlling financial interest in the joint venture, but exercises significant influence over the operating and financial policies of the venture, and therefore, accounts for its investment using the equity method. Due to the complex nature of cash distributions to the members, net income of the joint venture is allocated to the members using the hypothetical liquidation at book value (“HLBV”) method. Under the HLBV method, joint venture income or loss is allocated to the members based on the period change in each member's claim on the net assets of the venture, excluding capital contributions and distributions made during the period.

In 2011, the Company recorded a $6.4 million reduction in the carrying value of its investment in Waiawa, a residential joint venture on Oahu, due to the joint venture's termination of its development plans. The Company's remaining investment in the venture, which is not material, represents the Company's share of expected cash proceeds from the pending sale of the joint venture lands.

The Company also had investments in various other joint ventures that operate or develop real estate. The Company does not have a controlling financial interest, but has the ability to exercise significant influence over the operating and financial policies of these joint ventures and, accordingly, accounts for its investments in these real estate ventures using the equity method of accounting.

           Transportation:  Matson owns a 35-percent membership interest in an LLC with SSA Marine Inc., named SSA Terminals, LLC (“SSAT”), which provides stevedoring and terminal services at six terminals in three West Coast ports to the Company and other shipping lines. Matson accounts for its interest in SSAT under the equity method of accounting. The cost of ocean transportation services included approximately $175 million, $157 million, and $135 million for 2011, 2010, and 2009, respectively, paid to this unconsolidated affiliate for terminal services.

The Company's equity in earnings of its unconsolidated transportation affiliate were included on the consolidated statements of income with the cost of ocean transportation services because the affiliate is integrally related to the Company's Ocean Transportation segment, providing all terminal services to Matson on the U.S. West Coast.