HONOLULU, Nov. 4, 2021 /PRNewswire/ -- Alexander
& Baldwin, Inc. (NYSE: ALEX) ("A&B" or "Company"), a
Hawai'i-based company focused on owning and operating high-quality
commercial real estate in Hawai'i, today announced financial
results for the third quarter of 2021.
Chris Benjamin, A&B president
& chief executive officer stated: "Our commercial real estate
("CRE") business posted excellent results in the third quarter,
building on the strong recovery experienced in the first half of
the year. Tenant performance continued to strengthen across our
high-quality portfolio of grocery-anchored retail, industrial and
ground lease assets. Record-level leasing activity was achieved in
the quarter along with strong collections and recoveries, supported
by Hawai'i's continuing economic recovery. With the recent Delta
variant surge seemingly curbed, and with restrictions carefully
being relaxed, we maintain a high degree of optimism for the
future."
"We materially advanced our simplification efforts in the
quarter with a combination of closed sales and progress on
potential future sales. Robust demand for Hawai'i real estate
persists, as evidenced by sales of 11 units and a bulk parcel at
the Kukui'ula joint venture projects during the quarter.
Year-to-date, Kukui'ula closed sales of 37 units and two bulk
parcels, comprising 165 units, making this the best annual sales
result of the last decade. Such elevated market interest is aiding
our ability to complete our strategic simplification efforts, and
we are positioned for additional non-core asset monetization. Our
improved balance sheet and steady monetization activities highlight
the ongoing success of our efforts and support our renewed pivot
toward CRE portfolio growth."
"Our confident outlook is supported by the resilience of our
portfolio, the continued market demand for Hawai'i real estate and
operating assets, and the great work of our team members who remain
focused on driving superior portfolio performance as we pivot to
growth."
Financial Results for Q3 2021
- Net income available to A&B common shareholders and diluted
earnings per share were $6.3 million
and $0.09 per share, respectively,
compared to $3.0 million and
$0.04 per share in the same quarter
of 2020.
- Nareit-defined Funds From Operations ("FFO") and FFO
per-diluted share were $15.5 million
and $0.21 per share, respectively,
compared to $12.5 million and
$0.17 per share in the same quarter
of 2020.
- Core FFO and Core FFO per-diluted share were $17.9 million and $0.25 per share, respectively, compared to
$11.6 million and $0.16 per share in the same quarter of 2020.
Commercial Real Estate (CRE) Highlights for Q3
2021
- CRE revenue of $44.0 million was
$8.3 million, or 23.2%, more than the
$35.7 million result in the same
quarter of 2020.
- CRE NOI of $28.1 million was $6.5
million, or 30.2%, more than the $21.6 million result in the same quarter of
2020.
- Same-Store NOI of $27.4 million
was $6.3 million, or 29.7%, more than
the $21.1 million result in the same
quarter of 2020.
- The Company executed a total of 77 standard leases, covering
approximately 215,900 square feet of gross leasable area ("GLA").
Leasing spreads for all comparable leases were 2.3% portfolio-wide
for the third quarter of 2021 and 8.7% for new comparable
leases.
- Significant standard leases executed included:
-
- A 36,000 square foot lease at Opule Street Industrial,
sustaining the 100% occupancy status of the property.
- Fifteen leases related to properties located in Kailua, including Aikahi Park Shopping Center,
totaling approximately 28,200 square feet of GLA.
- Four leases at P&L Building totaling approximately 22,800
square feet of GLA, sustaining the 100% occupancy status of the
property.
- Three leases at Honokohau Industrial totaling approximately
10,500 square feet of GLA, sustaining the 100% occupancy status of
the property.
- Six leases at Kunia Shopping Center totaling approximately
8,800 square feet of GLA
- The Company also executed 3 COVID-related lease modification
extensions, covering approximately 4,800 square feet of GLA at a
weighted-average term of two years and six months.
- Both overall leased and Same-Store leased occupancy were 94.6%
as of September 30, 2021, an increase
of 60 basis points compared to June 30,
2021.
-
- Leased occupancy in the retail portfolio was 93.2% as of
September 30, 2021, an increase of 90
basis points compared to June 30,
2021, primarily due to robust leasing activity at Kailua
Retail and The Shops at Kukui'ula. Leased occupancy in the
Same-Store retail portfolio was 93.1% as of September 30, 2021, an increase of 90 basis
points compared to the prior quarter.
- Both leased and Same-Store leased occupancy in the industrial
portfolio were 98.0% as of September 30,
2021, an increase of 20 basis points compared to
June 30, 2021, primarily due to
positive incremental leasing activity at Port Allen
Industrial.
CRE Redevelopment
- Aikahi Park Shopping Center redevelopment efforts continue on
budget after reaching substantial completion of the central shops.
Tenant build-out and additional refresh work is underway to provide
the surrounding residents and center visitors with enhanced
community-focused dining, shopping and service options.
- Commenced Manoa Marketplace repositioning project. Plans are to
improve the shopping experience of this well-located
grocery-anchored, neighborhood center with enhanced
community-focused dining, shopping and service options while
incorporating sustainable design and building elements.
- Pearl Highlands Center has been selected for implementation of
an on-site solar project. This clean energy project aligns with the
Company's ESG commitment and goal of owning and operating
sustainable properties, and represents the first of a pipeline of
solar projects across our CRE portfolio.
Land Operations
- Operating profit was $1.7 million
in the third quarter of 2021, as compared to $3.1 million in the third quarter of 2020.
- The Company advanced monetization efforts in the third quarter
of 2021, including the following activity:
-
- 11 units and a bulk parcel sold at the Kukui'ula joint venture
projects.
- Cash proceeds totaling approximately $10.3 million were generated from the Kukui'ula
joint venture projects.
Materials & Construction (M&C)
- M&C Adjusted Earnings Before Interest, Taxes, Depreciation
and Amortization ("Adjusted EBITDA") was $2.2 million for the third quarter of 2021, as
compared to $0.7 million for the
second quarter of 2021, with the sequential increase attributable
to further commencement of paving projects.
- M&C operating loss was $0.3
million in the third quarter of 2021, as compared to a
$1.9 million loss in the second
quarter of 2021.
- The Company continues to evaluate strategic options for the
businesses within the M&C segment.
Balance Sheet, Market Value, Adjusted EBITDA and
Liquidity
- As of September 30, 2021, the
Company had an equity market capitalization of $1.7 billion and $627.7
million in total debt, for a total market capitalization of
approximately $2.3 billion. The
Company's debt-to-total market capitalization was 27.0% as of
September 30, 2021. The Company's
debt has a weighted-average maturity of 4.3 years, with a
weighted-average interest rate of 3.68%. Eighty-five percent of the
Company's debt was at fixed rates.
- The Company reported consolidated Adjusted EBITDA of
$108.5 million for the twelve-month
period ended September 30, 2021,
compared to $98.6 million for the
same period ended September 30, 2020.
Net Debt to TTM (trailing twelve months) consolidated Adjusted
EBITDA was 5.5 times as of September 30,
2021, compared to 6.6 times for the same period last
year.
- As of September 30, 2021, the
Company had total liquidity of $383.4
million, consisting of cash on hand of $26.5 million and $356.9
million available on its committed line of credit.
Dividend
- The Company paid a third quarter 2021 dividend of $0.18 per share on October
4, 2021, an increase of two-cents per share from the second quarter 2021.
This second consecutive quarterly dividend increase reflects the
Board's continued confidence in the improving Hawai'i economy and
commercial real estate performance.
- The Company's Board plans to declare a fourth quarter 2021
dividend in December 2021, with
payment in January 2022.
2021 Full-Year Guidance
- The Company revised its annual 2021 guidance to reflect its
improved outlook as follows:
|
2021
Guidance
|
|
Revised
|
Prior
|
Core FFO per
diluted share
|
$0.88 to
$0.92
|
$0.81 to
$0.87
|
CRE Same-Store
NOI
|
10% to
12%
|
7% to 10%
|
ABOUT ALEXANDER & BALDWIN
Alexander & Baldwin, Inc. (NYSE: ALEX) (A&B) is the
only publicly-traded real estate investment trust to focus
exclusively on Hawai'i commercial real estate and is the state's
largest owner of grocery-anchored, neighborhood shopping centers.
A&B owns, operates and manages approximately 3.9 million square
feet of commercial space in Hawai'i, including 22 retail centers,
10 industrial assets and 4 office properties, as well as 146 acres
of ground leases. A&B is expanding and strengthening its
Hawai'i CRE portfolio and achieving its strategic focus on
commercial real estate by monetizing its remaining non-core assets.
Over its 150-year history, A&B has evolved with the state's
economy and played a leadership role in the development of the
agricultural, transportation, tourism, construction, residential
and commercial real estate industries. Learn more about A&B at
www.alexanderbaldwin.com.
Contact:
Brett A. Brown
(808) 525-8475
investorrelations@abhi.com
ALEXANDER &
BALDWIN, INC. AND SUBSIDIARIES
|
SEGMENT DATA &
OTHER FINANCIAL INFORMATION
|
(amounts in millions,
except per share data; unaudited)
|
|
|
|
Three Months
Ended
September 30,
|
|
Nine Months Ended
September 30,
|
|
|
2021
|
|
2020
|
|
2021
|
|
2020
|
Operating
Revenue:
|
|
|
|
|
|
|
|
|
Commercial Real
Estate
|
|
$
|
44.0
|
|
|
$
|
35.7
|
|
|
$
|
127.2
|
|
|
$
|
113.1
|
|
Land
Operations1
|
|
5.4
|
|
|
7.4
|
|
|
38.5
|
|
|
27.5
|
|
Materials &
Construction1
|
|
34.9
|
|
|
34.7
|
|
|
88.9
|
|
|
91.9
|
|
Total operating
revenue
|
|
84.3
|
|
|
77.8
|
|
|
254.6
|
|
|
232.5
|
|
Operating Profit
(Loss):
|
|
|
|
|
|
|
|
|
Commercial Real
Estate
|
|
19.0
|
|
|
11.0
|
|
|
53.0
|
|
|
37.9
|
|
Land
Operations1
|
|
1.7
|
|
|
3.1
|
|
|
22.3
|
|
|
11.6
|
|
Materials &
Construction1
|
|
(0.3)
|
|
|
1.6
|
|
|
(6.2)
|
|
|
(8.6)
|
|
Total operating
profit (loss)
|
|
20.4
|
|
|
15.7
|
|
|
69.1
|
|
|
40.9
|
|
Gain (loss) on
disposal of commercial real estate properties, net
|
|
—
|
|
|
—
|
|
|
0.2
|
|
|
0.5
|
|
Interest
expense
|
|
(6.5)
|
|
|
(7.1)
|
|
|
(20.2)
|
|
|
(22.7)
|
|
Corporate and other
expense
|
|
(6.8)
|
|
|
(5.4)
|
|
|
(18.9)
|
|
|
(13.8)
|
|
Income (Loss) from
Continuing Operations Before Income Taxes
|
|
7.1
|
|
|
3.2
|
|
|
30.2
|
|
|
4.9
|
|
Income tax benefit
(expense)
|
|
—
|
|
|
—
|
|
|
(0.1)
|
|
|
—
|
|
Income (Loss) from
Continuing Operations
|
|
7.1
|
|
|
3.2
|
|
|
30.1
|
|
|
4.9
|
|
Income (loss) from
discontinued operations
|
|
(0.6)
|
|
|
—
|
|
|
(0.7)
|
|
|
(0.8)
|
|
Net Income
(Loss)
|
|
6.5
|
|
|
3.2
|
|
|
29.4
|
|
|
4.1
|
|
Loss (income)
attributable to noncontrolling interest
|
|
(0.1)
|
|
|
(0.2)
|
|
|
(0.3)
|
|
|
0.4
|
|
Net Income (Loss)
Attributable to A&B Shareholders
|
|
$
|
6.4
|
|
|
$
|
3.0
|
|
|
$
|
29.1
|
|
|
$
|
4.5
|
|
|
|
|
|
|
|
|
|
|
Basic Earnings
(Loss) Per Share of Common Stock:
|
|
|
|
|
|
|
|
|
Continuing operations
available to A&B shareholders
|
|
$
|
0.10
|
|
|
$
|
0.04
|
|
|
$
|
0.41
|
|
|
$
|
0.07
|
|
Discontinued
operations available to A&B shareholders
|
|
(0.01)
|
|
|
0.00
|
|
|
(0.01)
|
|
|
(0.01)
|
|
Net income (loss)
available to A&B shareholders
|
|
$
|
0.09
|
|
|
$
|
0.04
|
|
|
$
|
0.40
|
|
|
$
|
0.06
|
|
Diluted Earnings
(Loss) Per Share of Common Stock:
|
|
|
|
|
|
|
|
|
Continuing operations
available to A&B shareholders
|
|
$
|
0.10
|
|
|
$
|
0.04
|
|
|
$
|
0.41
|
|
|
$
|
0.07
|
|
Discontinued
operations available to A&B shareholders
|
|
(0.01)
|
|
|
0.00
|
|
|
(0.01)
|
|
|
(0.01)
|
|
Net income (loss)
available to A&B shareholders
|
|
$
|
0.09
|
|
|
$
|
0.04
|
|
|
$
|
0.40
|
|
|
$
|
0.06
|
|
|
|
|
|
|
|
|
|
|
Weighted-Average
Number of Shares Outstanding:
|
|
|
|
|
|
|
|
|
Basic
|
|
72.5
|
|
72.4
|
|
|
72.5
|
|
72.3
|
Diluted
|
|
72.7
|
|
72.4
|
|
|
72.6
|
|
72.4
|
|
|
|
|
|
|
|
|
|
Amounts Available
to A&B Common Shareholders:
|
|
|
|
|
|
|
|
|
Continuing operations
available to A&B common shareholders
|
|
$
|
6.9
|
|
|
$
|
3.0
|
|
|
$
|
29.7
|
|
|
$
|
5.3
|
|
Discontinued
operations available to A&B common shareholders
|
|
(0.6)
|
|
|
—
|
|
|
(0.7)
|
|
|
(0.8)
|
|
Net income (loss)
available to A&B common shareholders
|
|
$
|
6.3
|
|
|
$
|
3.0
|
|
|
$
|
29.0
|
|
|
$
|
4.5
|
|
|
|
|
|
|
|
|
|
|
1 As
described in the Company's other filings with the SEC, during the
current year, the Company changed the composition of its reportable
segments which caused reported amounts (i.e., revenue and operating
profit) in the historical period to be reclassified from Land
Operations to Materials & Construction. All comparable
information for the historical periods has been restated to reflect
the impact of these changes.
|
ALEXANDER &
BALDWIN, INC. AND SUBSIDIARIES
|
CONDENSED
CONSOLIDATED BALANCE SHEETS
|
(amounts in millions;
unaudited)
|
|
|
|
September
30,
|
|
December
31,
|
|
|
2021
|
|
2020
|
ASSETS
|
|
|
|
|
Real estate
investments
|
|
|
|
|
Real estate
property
|
|
$
|
1,569.3
|
|
|
$
|
1,549.7
|
|
Accumulated
depreciation
|
|
(174.4)
|
|
|
(154.4)
|
|
Real estate property,
net
|
|
1,394.9
|
|
|
1,395.3
|
|
Real estate
developments
|
|
68.9
|
|
|
75.7
|
|
Investments in real
estate joint ventures and partnerships
|
|
109.1
|
|
|
134.1
|
|
Real estate intangible
assets, net
|
|
53.9
|
|
|
61.9
|
|
Real estate
investments, net
|
|
1,626.8
|
|
|
1,667.0
|
|
Cash and cash
equivalents
|
|
26.5
|
|
|
57.2
|
|
Restricted
cash
|
|
0.2
|
|
|
0.2
|
|
Accounts receivable
and retention, net
|
|
24.4
|
|
|
43.5
|
|
Inventories
|
|
22.2
|
|
|
18.4
|
|
Other property,
net
|
|
108.1
|
|
|
110.8
|
|
Operating lease
right-of-use assets
|
|
21.2
|
|
|
18.6
|
|
Goodwill
|
|
10.5
|
|
|
10.5
|
|
Other
receivables
|
|
18.2
|
|
|
14.2
|
|
Prepaid expenses and
other assets
|
|
105.4
|
|
|
95.6
|
|
Total
assets
|
|
$
|
1,963.5
|
|
|
$
|
2,036.0
|
|
|
|
|
|
|
LIABILITIES AND
EQUITY
|
|
|
|
|
Liabilities:
|
|
|
|
|
Notes payable and
other debt
|
|
$
|
627.7
|
|
|
$
|
687.1
|
|
Accounts
payable
|
|
11.4
|
|
|
9.8
|
|
Operating lease
liabilities
|
|
21.4
|
|
|
18.4
|
|
Accrued pension and
post-retirement benefits
|
|
33.5
|
|
|
34.7
|
|
Deferred
revenue
|
|
69.8
|
|
|
66.9
|
|
Accrued and other
liabilities
|
|
99.6
|
|
|
116.5
|
|
Redeemable
Noncontrolling Interest
|
|
6.8
|
|
|
6.5
|
|
Equity
|
|
1,093.3
|
|
|
1,096.1
|
|
Total liabilities and
equity
|
|
$
|
1,963.5
|
|
|
$
|
2,036.0
|
|
|
|
|
|
|
|
|
|
|
|
ALEXANDER &
BALDWIN, INC. AND SUBSIDIARIES
|
CONDENSED
CONSOLIDATED CASH FLOWS
|
(amounts in millions;
unaudited)
|
|
|
|
Nine Months Ended
September 30,
|
|
|
2021
|
|
2020
|
Cash Flows from
Operating Activities:
|
|
|
|
|
Net income
(loss)
|
|
$
|
29.4
|
|
|
$
|
4.1
|
|
Adjustments to
reconcile net income (loss) to net cash provided by (used in)
operations:
|
|
|
|
|
Depreciation and
amortization
|
|
37.7
|
|
|
40.5
|
|
Loss (gain) from
disposals and asset transactions, net
|
|
(0.4)
|
|
|
(9.5)
|
|
Impairment of
assets
|
|
—
|
|
|
5.6
|
|
Share-based
compensation expense
|
|
4.4
|
|
|
4.4
|
|
Equity in (income)
loss from affiliates, net of operating cash
distributions
|
|
(10.1)
|
|
|
(5.0)
|
|
Changes in operating
assets and liabilities:
|
|
|
|
|
Trade, contracts
retention, and other contract receivables
|
|
9.5
|
|
|
(2.1)
|
|
Inventories
|
|
(3.8)
|
|
|
1.2
|
|
Prepaid expenses,
income tax receivable and other assets
|
|
0.3
|
|
|
7.9
|
|
Development/other
property inventory
|
|
0.4
|
|
|
1.4
|
|
Accrued pension and
post-retirement benefits
|
|
(4.0)
|
|
|
2.0
|
|
Accounts
payable
|
|
2.9
|
|
|
(5.2)
|
|
Accrued and other
liabilities
|
|
0.9
|
|
|
(8.1)
|
|
Net cash provided by
(used in) operations
|
|
67.2
|
|
|
37.2
|
|
|
|
|
|
|
Cash Flows from
Investing Activities:
|
|
|
|
|
Capital expenditures
for property, plant and equipment
|
|
(26.1)
|
|
|
(17.7)
|
|
Proceeds from disposal
of assets
|
|
0.6
|
|
|
27.1
|
|
Payments for purchases
of investments in affiliates and other investments
|
|
(0.8)
|
|
|
—
|
|
Distributions of
capital and other receipts from investments in affiliates and other
investments
|
|
40.2
|
|
|
11.1
|
|
Net cash provided by
(used in) investing activities
|
|
13.9
|
|
|
20.5
|
|
|
|
|
|
|
Cash Flows from
Financing Activities:
|
|
|
|
|
Proceeds from issuance
of notes payable and other debt
|
|
128.0
|
|
|
173.0
|
|
Payments of notes
payable and other debt and deferred financing costs
|
|
(192.2)
|
|
|
(105.3)
|
|
Borrowings (payments)
on line-of-credit agreement, net
|
|
—
|
|
|
(8.7)
|
|
Cash dividends
paid
|
|
(46.5)
|
|
|
(13.8)
|
|
Proceeds from issuance
(repurchase) of capital stock and other, net
|
|
(1.1)
|
|
|
(1.0)
|
|
Net cash provided by
(used in) financing activities
|
|
(111.8)
|
|
|
44.2
|
|
|
|
|
|
|
Cash, Cash
Equivalents and Restricted Cash
|
|
|
|
|
Net increase
(decrease) in cash, cash equivalents and restricted cash
|
|
(30.7)
|
|
|
101.9
|
|
Balance, beginning of
period
|
|
57.4
|
|
|
15.4
|
|
Balance, end of
period
|
|
$
|
26.7
|
|
|
$
|
117.3
|
|
USE OF NON-GAAP FINANCIAL MEASURES
The Company uses non-GAAP measures when evaluating operating
performance because management believes that they provide
additional insight into the Company's and segments' core operating
results, and/or the underlying business trends affecting
performance on a consistent and comparable basis from period to
period. These measures generally are provided to investors as an
additional means of evaluating the performance of ongoing core
operations. The non-GAAP financial information presented herein
should be considered supplemental to, and not as a substitute for
or superior to, financial measures calculated in accordance with
GAAP.
NOI is a non-GAAP measure used internally in evaluating the
unlevered performance of the Company's Commercial Real Estate
portfolio. The Company believes NOI provides useful information to
investors regarding the Company's financial condition and results
of operations because it reflects only the contract-based income
and cash-based expense items that are incurred at the property
level. When compared across periods, NOI can be used to determine
trends in earnings of the Company's properties as this measure is
not affected by non-contract-based revenue (e.g., straight-line
lease adjustments required under GAAP); by non-cash expense
recognition items (e.g., the impact of depreciation and
amortization expense or impairments); or by other expenses or gains
or losses that do not directly relate to the Company's ownership
and operations of the properties (e.g., indirect selling, general,
administrative and other expenses, as well as lease termination
income). The Company believes the exclusion of these items from
operating profit (loss) is useful because the resulting measure
captures the contract-based revenue that is realizable (i.e.,
assuming collectability is deemed probable) and the direct
property-related expenses paid or payable in cash that are incurred
in operating the Company's Commercial Real Estate portfolio, as
well as trends in occupancy rates, rental rates and operating
costs. NOI should not be viewed as a substitute for, or superior
to, financial measures calculated in accordance with GAAP.
The Company reports NOI and Occupancy on a Same-Store basis,
which includes the results of properties that were owned and
operated for the entirety of the prior calendar year and current
reporting period, year-to-date. The Company believes that reporting
on a Same-Store basis provides investors with additional
information regarding the operating performance of comparable
assets separate from other factors (such as the effect of
developments, redevelopments, acquisitions or dispositions).
Reconciliations of CRE operating profit to CRE NOI and Same-Store NOI are as
follows:
|
|
Three Months Ended
September 30,
|
|
Nine Months Ended
September 30,
|
(amounts in millions;
unaudited)
|
|
2021
|
|
2020
|
|
Change1
|
|
2021
|
|
2020
|
|
Change1
|
Commercial Real
Estate Operating Profit (Loss)
|
|
$
|
19.0
|
|
|
$
|
11.0
|
|
|
$
|
8.0
|
|
|
$
|
53.0
|
|
|
$
|
37.9
|
|
|
$
|
15.1
|
|
Plus: Depreciation and
amortization
|
|
9.2
|
|
|
9.5
|
|
|
(0.3)
|
|
|
28.2
|
|
|
30.3
|
|
|
(2.1)
|
|
Less: Straight-line
lease adjustments
|
|
(1.1)
|
|
|
0.6
|
|
|
(1.7)
|
|
|
(2.9)
|
|
|
1.1
|
|
|
(4.0)
|
|
Less:
Favorable/(unfavorable) lease amortization
|
|
(0.1)
|
|
|
(0.1)
|
|
|
—
|
|
|
(0.5)
|
|
|
(0.8)
|
|
|
0.3
|
|
Plus: Other
(income)/expense, net
|
|
(0.4)
|
|
|
—
|
|
|
(0.4)
|
|
|
(0.6)
|
|
|
(0.3)
|
|
|
(0.3)
|
|
Plus: Selling,
general, administrative and other
expenses
|
|
1.6
|
|
|
1.7
|
|
|
(0.1)
|
|
|
4.8
|
|
|
5.6
|
|
|
(0.8)
|
|
NOI
|
|
28.1
|
|
|
21.6
|
|
|
6.5
|
|
|
81.9
|
|
|
72.7
|
|
|
9.2
|
|
Less: NOI from
acquisitions, dispositions, and
other adjustments
|
|
(0.7)
|
|
|
(0.5)
|
|
|
(0.2)
|
|
|
(2.0)
|
|
|
(1.7)
|
|
|
(0.3)
|
|
Same-Store
NOI
|
|
$
|
27.4
|
|
|
$
|
21.1
|
|
|
$
|
6.3
|
|
|
$
|
79.9
|
|
|
$
|
71.0
|
|
|
$
|
8.9
|
|
1 Amounts in this table are rounded
to the nearest tenth of a million, but percentages were calculated
based on thousands. Accordingly, a recalculation of some
percentages, if based on the reported data, may be slightly
different.
|
FFO is presented by the Company as a widely used non-GAAP
measure of operating performance for real estate companies. The
Company believes that, subject to the following limitations, FFO
provides a supplemental measure to net income (calculated in
accordance with GAAP) for comparing its performance and operations
to those of other REITs. FFO does not represent an alternative to
net income calculated in accordance with GAAP. In addition, FFO
does not represent cash generated from operating activities in
accordance with GAAP, nor does it represent cash available to pay
distributions and should not be considered as an alternative to
cash flow from operating activities, determined in accordance with
GAAP, as a measure of the Company's liquidity. The Company presents
different forms of FFO:
- Core FFO represents a non-GAAP measure relevant to the
operating performance of the Company's commercial real estate
business (i.e., its core business). Core FFO is calculated by
adjusting CRE operating profit to exclude items in a manner
consistent with FFO (i.e., depreciation and amortization related to
real estate included in CRE operating profit) and to make further
adjustments to include expenses not included in CRE operating
profit but that are necessary to accurately reflect the operating
performance of its core business (i.e., corporate expenses and
interest expense attributable to this core business) or to exclude
items that are non-recurring, infrequent, unusual and unrelated to
the core business operating performance (i.e., not likely to recur
within two years or has not occurred within the prior two years).
The Company believes such adjustments facilitate the comparable
measurement of the Company's core operating performance over time.
The Company believes that Core FFO, which is a supplemental
non-GAAP financial measure, provides an additional and useful means
to assess and compare the operating performance of REITs.
- FFO represents the Nareit-defined non-GAAP measure for the
operating performance of the Company as a whole. The Company's
calculation refers to net income (loss) available to A&B common
shareholders as its starting point in the calculation of FFO.
The Company presents both non-GAAP measures and reconciles each
to the most directly-comparable GAAP measure as well as reconciling
FFO to Core FFO. The Company's FFO and Core FFO may not be
comparable to FFO non-GAAP measures reported by other REITs. These
other REITs may not define the term in accordance with the current
Nareit definition or may interpret the current Nareit definition
differently.
Reconciliations of net income (loss) available to A&B common
shareholders to FFO and Core FFO are as follows:
|
|
Three Months
Ended
September 30,
|
|
Nine Months
Ended
September 30,
|
(amounts in millions;
unaudited)
|
|
2021
|
|
2020
|
|
2021
|
|
2020
|
Net income (loss)
available to A&B common shareholders
|
|
$
|
6.3
|
|
|
$
|
3.0
|
|
|
$
|
29.0
|
|
|
$
|
4.5
|
|
Depreciation and
amortization of commercial real estate properties
|
|
9.2
|
|
|
9.5
|
|
|
28.2
|
|
|
30.3
|
|
Gain on the disposal
of commercial real estate properties, net
|
|
—
|
|
|
—
|
|
|
(0.2)
|
|
|
(0.5)
|
|
FFO
|
|
$
|
15.5
|
|
|
$
|
12.5
|
|
|
$
|
57.0
|
|
|
$
|
34.3
|
|
Exclude items not
related to core business:
|
|
|
|
|
|
|
|
|
Land Operations
Operating (Profit)
|
|
(1.7)
|
|
|
(3.1)
|
|
|
(22.3)
|
|
|
(11.6)
|
|
Materials &
Construction Operating (Profit) Loss
|
|
0.3
|
|
|
(1.6)
|
|
|
6.2
|
|
|
8.6
|
|
Loss from discontinued
operations
|
|
0.6
|
|
|
—
|
|
|
0.7
|
|
|
0.8
|
|
Income (loss)
attributable to noncontrolling interest
|
|
0.1
|
|
|
0.2
|
|
|
0.3
|
|
|
(0.4)
|
|
Income tax expense
(benefit)
|
|
—
|
|
|
—
|
|
|
0.1
|
|
|
—
|
|
Non-core business
interest expense
|
|
3.1
|
|
|
3.6
|
|
|
9.9
|
|
|
11.3
|
|
Core
FFO
|
|
$
|
17.9
|
|
|
$
|
11.6
|
|
|
$
|
51.9
|
|
|
$
|
43.0
|
|
Reconciliations of Core FFO starting from Commercial Real Estate
operating profit are as follows:
|
|
Three Months
Ended
September 30,
|
|
Nine Months
Ended
September 30,
|
(amounts in millions;
unaudited)
|
|
2021
|
|
2020
|
|
2021
|
|
2020
|
CRE Operating
Profit
|
|
$
|
19.0
|
|
|
$
|
11.0
|
|
|
$
|
53.0
|
|
|
$
|
37.9
|
|
Depreciation and
amortization of commercial real estate properties
|
|
9.2
|
|
|
9.5
|
|
|
28.2
|
|
|
30.3
|
|
Corporate and other
expense
|
|
(6.8)
|
|
|
(5.4)
|
|
|
(18.9)
|
|
|
(13.8)
|
|
Core business interest
expense
|
|
(3.5)
|
|
|
(3.5)
|
|
|
(10.4)
|
|
|
(11.4)
|
|
Core
FFO
|
|
$
|
17.9
|
|
|
$
|
11.6
|
|
|
$
|
51.9
|
|
|
$
|
43.0
|
|
The Company may report various forms of Earnings Before
Interest, Taxes, Depreciation and Amortization ("EBITDA"), on a
consolidated basis or a segment basis (e.g., "Consolidated EBITDA"
or "Materials & Construction EBITDA"), as non-GAAP measures
used by the Company in evaluating the Company's and segments'
operating performance on a consistent and comparable basis from
period to period. The Company provides this information to
investors as an additional means of evaluating the performance of
the Company's and segments' ongoing operations.
Consolidated EBITDA is calculated by adjusting the Company's
consolidated net income (loss) to exclude the impact of interest
expense, income taxes and depreciation and amortization. Materials
& Construction EBITDA is calculated by adjusting Materials
& Construction operating profit (which excludes interest
expense and income taxes) to add back depreciation and amortization
recorded at the M&C segment.
The Company also adjusts Consolidated EBITDA or Materials &
Construction EBITDA (to arrive at "Consolidated Adjusted EBITDA" or
"M&C Adjusted EBITDA") for items identified as non-recurring,
infrequent or unusual that are not expected to recur in the
Company's core business or segment's normal operations. In addition
to the aforementioned adjustments, the Company further adjusts
Materials & Construction EBITDA to exclude income attributable
to noncontrolling interests as presented in its consolidated
statements of operations.
As illustrative examples, the Company identified non-cash
long-lived asset impairments recorded in different businesses
within the M&C segment as non-recurring, infrequent or unusual
items that are not expected to recur in the segment's normal
operations. By excluding these items from Materials &
Construction EBITDA to arrive at M&C Adjusted EBITDA, the
Company believes it provides meaningful supplemental information
about its core operating performance and facilitates comparisons to
historical operating results. Such non-GAAP measures should not be
viewed as a substitute for, or superior to, financial measures
calculated in accordance with GAAP.
Reconciliations of the Company's consolidated net income to
Consolidated EBITDA and Consolidated Adjusted EBITDA are as
follows:
|
|
TTM September
30,
|
(amounts in millions,
unaudited)
|
|
2021
|
|
2020
|
Net Income
(Loss)
|
|
$
|
30.5
|
|
|
$
|
9.1
|
|
Adjustments:
|
|
|
|
|
Depreciation and
amortization
|
|
50.5
|
|
|
54.4
|
|
Interest
expense
|
|
27.8
|
|
|
30.4
|
|
Income tax expense
(benefit)
|
|
(0.3)
|
|
|
(0.9)
|
|
Consolidated
EBITDA
|
|
$
|
108.5
|
|
|
$
|
93.0
|
|
Asset impairments
related to the Materials & Construction Segment
|
|
—
|
|
|
5.6
|
|
Consolidated
Adjusted EBITDA
|
|
$
|
108.5
|
|
|
$
|
98.6
|
|
Reconciliations of Materials & Construction operating profit
to Materials & Construction EBITDA and M&C Adjusted EBITDA
are as follows:
|
Three Months
Ended
September 30,
|
|
Nine Months
Ended
September 30,
|
(amounts in millions;
unaudited)
|
2021
|
|
2020
|
|
2021
|
|
2020
|
Materials &
Construction Operating Profit (Loss)1
|
$
|
(0.3)
|
|
|
$
|
1.6
|
|
|
$
|
(6.2)
|
|
|
$
|
(8.6)
|
|
Materials &
Construction depreciation and amortization
|
2.6
|
|
|
2.8
|
|
|
8.1
|
|
|
8.2
|
|
Materials &
Construction EBITDA1
|
2.3
|
|
|
4.4
|
|
|
1.9
|
|
|
(0.4)
|
|
Impairment of
assets
|
—
|
|
|
—
|
|
|
—
|
|
|
5.6
|
|
Loss (income)
attributable to noncontrolling interest
|
(0.1)
|
|
|
(0.2)
|
|
|
(0.3)
|
|
|
0.4
|
|
M&C Adjusted
EBITDA2
|
$
|
2.2
|
|
|
$
|
4.2
|
|
|
$
|
1.6
|
|
|
$
|
5.6
|
|
|
|
|
|
|
|
|
|
1 As
described in the Company's other filings with the SEC, during the
current year, the Company changed the composition of its reportable
segments which caused reported amounts (i.e., revenue and operating
profit) in the historical period to be reclassified from Land
Operations to Materials & Construction. All comparable
information for the historical periods has been restated to reflect
the impact of these changes.
|
2 See
above for a discussion of management's use of non-GAAP financial
measures and reconciliations from GAAP to non-GAAP
measures.
|
FORWARD-LOOKING STATEMENTS
Statements in this release that are not historical facts are
forward-looking statements within the meaning of the Private
Securities Litigation Reform Act of 1995 and involve a number of
risks and uncertainties that could cause actual results to differ
materially from those contemplated by the relevant forward-looking
statements. These forward-looking statements include, but are not
limited to, statements regarding possible or assumed future results
of operations, business strategies, growth opportunities and
competitive positions, as well as the rapidly changing challenges
with, and the Company's plans and responses to, the coronavirus
pandemic ("COVID-19") and related economic disruptions. Such
forward-looking statements speak only as of the date the statements
were made and are not guarantees of future performance.
Forward-looking statements are subject to a number of risks,
uncertainties, assumptions and other factors that could cause
actual results and the timing of certain events to differ
materially from those expressed in or implied by the
forward-looking statements. These factors include, but are not
limited to, prevailing market conditions and other factors related
to the Company's REIT status and the Company's business, risks
associated with COVID-19 and its impact on the Company's
businesses, results of operations, liquidity and financial
condition, the evaluation of alternatives by the Company related to
its materials and construction business and by the Company's joint
venture related to the development of Kukui'ula, and the risk
factors discussed in the Company's most recent Form 10-K, Form 10-Q
and other filings with the Securities and Exchange Commission. The
information in this release should be evaluated in light of these
important risk factors. We do not undertake any obligation to
update the Company's forward-looking statements.
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SOURCE Alexander & Baldwin Holdings, Inc.