Achieves 2.8% increase in Same-Store NOI and
4.0% increase in Core FFO per diluted share over the prior year
quarter
HONOLULU, Nov. 3, 2022
/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 2022.
Chris Benjamin, A&B president
& chief executive officer stated: "Our commercial real estate
("CRE") business posted outstanding results in the third quarter,
continuing to build on the momentum experienced since early last
year. Total leased occupancy remained strong at 94.6% at
quarter-end as Hawai'i's economy continued to strengthen, supported
by robust tourism."
"With our business simplification process nearly complete, and
the Grace Pacific marketing process well underway, we are excited
to shift our focus to growth. We believe our deep market
relationships and a balance sheet with significant dry powder
position us to uncover and capitalize on development and
acquisition opportunities. We continue to pursue investments that
meet our quality and return targets, and that are complementary to
our geographically-focused portfolio as we seek to grow our
platform and drive value for our shareholders into 2023 and
beyond."
Financial Results for Q3 2022
- Net income available to A&B common shareholders and diluted
earnings per share were $6.3 million
and $0.09 per share, respectively,
consistent with the same quarter of 2021.
- Nareit-defined Funds From Operations ("FFO") and FFO
per-diluted share were $15.3 million
and $0.21 per share, respectively,
compared to $15.5 million and
$0.21 per share in the same quarter
of 2021.
- Core FFO and Core FFO per-diluted share were $18.9 million and $0.26 per share, respectively, compared to
$17.9 million and $0.25 per share in the same quarter of 2021.
Commercial Real Estate (CRE) Highlights for Q3
2022
- CRE revenue of $46.2 million was
$2.2 million, or 5.0%, more than the
$44.0 million result in the same
quarter of 2021.
- CRE NOI of $29.0 million was $0.9
million, or 3.3%, more than the $28.1
million result in the same quarter of 2021.
- Same-Store NOI of $28.9 million
was $0.8 million, or 2.8%, more than
the $28.1 million result in the same
quarter of 2021.
- The Company executed a total of 50 leases in the third quarter,
covering approximately 104,900 square feet of gross leasable area
("GLA"). Leasing spreads for new comparable leases were 6.4% for
the quarter, and 4.2% portfolio-wide for all comparable
leases.
- Significant leases executed included:
-
- Three leases at Kaneohe Bay Shopping Center totaling
approximately 38,100 square feet of GLA.
- Seventeen leases related to properties located in Kailua, including Aikahi Park Shopping Center,
totaling approximately 24,100 square feet of GLA.
- Five leases at Kaka'ako Commerce Center totaling approximately
8,300 square feet of GLA.
- Both overall leased and Same-Store leased occupancy were 94.6%
as of September 30, 2022, unchanged
compared with September 30,
2021.
- Both leased and Same-Store leased occupancy in the retail
portfolio were 93.3% as of September 30,
2022, an increase of 10 basis points compared to
September 30, 2021, primarily due to
leasing activity at Manoa Marketplace and Pu'unene Shopping
Center.
- Leased occupancy in the industrial portfolio was 98.0% as of
September 30, 2022, unchanged
compared to September 30, 2021.
Same-Store leased occupancy in the industrial portfolio was 97.9%
as of September 30, 2022, a decrease
of 10 basis points compared to September 30,
2021.
CRE Redevelopment
- Work has commenced on a significant refresh of Manoa
Marketplace to improve the visitor experience at this well-located
neighborhood center, while incorporating sustainable design and
building elements (including LED lighting, water-efficient fixtures
and EV parking stalls, among other sustainable features).
- Construction of the 1.3-megawatt rooftop solar installation at
Pearl Highlands Center has been completed and the system is now
delivering power. The Company is commencing work on another PV
system and reviewing additional renewable energy projects across
its portfolio, consistent with its ESG commitment and goal of
owning and operating sustainable properties.
Land Operations
- Land Operations operating loss was $2.2
million in the third quarter of 2022, as compared to a
$1.7 million profit in the third
quarter of 2021. The year-over-year decline in performance was
partly attributable to the strategic monetization of approximately
18,900 acres of non-core landholdings on Kaua'i (the "McBryde Sale") in the second
quarter of 2022. This sale, which resulted in a reduction of
segment operating profit from renewable energy assets included in
the sale, also significantly reduced liabilities related to this
asset.
- Land Operations Adjusted Earnings Before Interest, Taxes,
Depreciation and Amortization ("Adjusted EBITDA") was $(2.2) million for the third quarter of 2022, as
compared to $2.0 million in the third
quarter of 2021.
- Performance of this segment prospectively will be driven by
future land sales activity associated with ongoing
simplification.
Materials & Construction (M&C)
- M&C operating profit was $1.8
million in the third quarter of 2022, as compared to a
$0.3 million loss in the third
quarter of 2021.
- M&C Adjusted EBITDA was $2.7
million for the third quarter of 2022, as compared to
$2.2 million in the third quarter of
2021.
- The Company is advancing to the next phase of the Grace Pacific
marketing process with several indications of interest.
Balance Sheet, Market Value, Adjusted EBITDA and
Liquidity
- As of September 30, 2022, the
Company had an equity market capitalization of $1.2 billion and $469.7
million in total debt, for a total market capitalization of
approximately $1.7 billion. The
Company's debt-to-total market capitalization was 28.1% as of
September 30, 2022. The Company's
debt has a weighted-average maturity of 3.6 years, with a
weighted-average interest rate of 4.3%. Ninety-nine percent of the
Company's debt was at fixed rates at quarter end.
- As of September 30, 2022, the
Company had total liquidity of $506.2
million, consisting of cash on hand of $7.3 million and $498.9
million available on its revolving line of credit.
- The Company reported consolidated Adjusted EBITDA of
$185.0 million for the twelve-month
period ended September 30, 2022,
compared to $108.5 million for the
same period ended September 30, 2021.
This includes second quarter 2022 impacts of $73.7 million to EBITDA (inclusive of the
$59.9 million charge to the Land
Operations segment) related to the full pension termination, which
is excluded to reach Adjusted EBITDA. Net Debt to TTM (trailing
twelve months) consolidated Adjusted EBITDA was 2.5 times as of
September 30, 2022, compared to 5.5
times for the same period last year.
- During the quarter ended September 30,
2022, the Company repurchased 196,050 of its common shares
at a weighted-average price of $16.46
per share, for a total investment of $3.2
million.
Dividend
- The Company paid a third quarter 2022 dividend of $0.22 per share on October
5, 2022, an increase of two
cents per share from the second quarter 2022. This third
consecutive quarterly dividend increase reflects strong second
quarter CRE results and expected performance for the remainder of
2022.
- The Company's Board plans to declare a fourth quarter 2022
dividend in December 2022, with
payment in January 2023.
2022 Full-Year Guidance
- The Company is revising its annual 2022 guidance to reflect its
improved outlook as follows:
|
2022
Guidance
|
|
Revised
|
Prior
|
Initial
|
Core FFO per diluted
share
|
$1.07 to
$1.11
|
$1.05 to
$1.11
|
$0.94 to
$1.00
|
CRE Same-Store
NOI
|
4.5% to
6.5%
|
4% to 6%
|
0% to 2%
|
CRE Same-Store NOI,
excluding
prior year reserve reversals
|
4% to
6%
|
3.5% to 5.5%
|
2% to 4%
|
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,
12 industrial assets and four office properties, as well as 141
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 152-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,
|
|
|
2022
|
|
2021
|
|
2022
|
|
2021
|
Operating
Revenue:
|
|
|
|
|
|
|
|
|
Commercial Real
Estate
|
|
$
46.2
|
|
$
44.0
|
|
$
138.1
|
|
$
127.2
|
Land
Operations
|
|
2.9
|
|
5.4
|
|
20.9
|
|
38.5
|
Materials &
Construction
|
|
48.1
|
|
34.9
|
|
124.5
|
|
88.9
|
Total operating
revenue
|
|
97.2
|
|
84.3
|
|
283.5
|
|
254.6
|
Operating Profit
(Loss):
|
|
|
|
|
|
|
|
|
Commercial Real
Estate
|
|
20.3
|
|
19.0
|
|
60.3
|
|
53.0
|
Land
Operations
|
|
(2.2)
|
|
1.7
|
|
(10.0)
|
|
22.3
|
Materials &
Construction
|
|
1.8
|
|
(0.3)
|
|
4.4
|
|
(6.2)
|
Total operating
profit (loss)
|
|
19.9
|
|
20.4
|
|
54.7
|
|
69.1
|
Gain (loss) on
disposal of commercial real estate properties, net
|
|
—
|
|
—
|
|
—
|
|
0.2
|
Interest
expense
|
|
(5.5)
|
|
(6.5)
|
|
(16.8)
|
|
(20.2)
|
Corporate and other
expense
|
|
(7.6)
|
|
(6.8)
|
|
(33.7)
|
|
(18.9)
|
Income (Loss) from
Continuing Operations Before Income Taxes
|
|
6.8
|
|
7.1
|
|
4.2
|
|
30.2
|
Income tax benefit
(expense)
|
|
—
|
|
—
|
|
18.1
|
|
(0.1)
|
Income (Loss) from
Continuing Operations
|
|
6.8
|
|
7.1
|
|
22.3
|
|
30.1
|
Income (loss) from
discontinued operations
|
|
—
|
|
(0.6)
|
|
(0.1)
|
|
(0.7)
|
Net Income
(Loss)
|
|
6.8
|
|
6.5
|
|
22.2
|
|
29.4
|
Loss (income)
attributable to noncontrolling interest
|
|
(0.4)
|
|
(0.1)
|
|
(1.2)
|
|
(0.3)
|
Net Income (Loss)
Attributable to A&B Shareholders
|
|
$
6.4
|
|
$
6.4
|
|
$
21.0
|
|
$
29.1
|
|
|
|
|
|
|
|
|
|
Basic Earnings
(Loss) Per Share of Common Stock:
|
|
|
|
|
|
|
|
|
Continuing operations
available to A&B shareholders
|
|
$
0.09
|
|
$
0.10
|
|
$
0.29
|
|
$
0.41
|
Discontinued
operations available to A&B shareholders
|
|
—
|
|
(0.01)
|
|
—
|
|
(0.01)
|
Net income (loss)
available to A&B shareholders
|
|
$
0.09
|
|
$
0.09
|
|
$
0.29
|
|
$
0.40
|
Diluted Earnings
(Loss) Per Share of Common Stock:
|
|
|
|
|
|
|
|
|
Continuing operations
available to A&B shareholders
|
|
$
0.09
|
|
$
0.10
|
|
$
0.29
|
|
$
0.41
|
Discontinued
operations available to A&B shareholders
|
|
—
|
|
(0.01)
|
|
—
|
|
(0.01)
|
Net income (loss)
available to A&B shareholders
|
|
$
0.09
|
|
$
0.09
|
|
$
0.29
|
|
$
0.40
|
|
|
|
|
|
|
|
|
|
Weighted-Average
Number of Shares Outstanding:
|
|
|
|
|
|
|
|
|
Basic
|
|
72.7
|
|
72.5
|
|
72.7
|
|
72.5
|
Diluted
|
|
72.8
|
|
72.7
|
|
72.8
|
|
72.6
|
|
|
|
|
|
|
|
|
|
Amounts Available to
A&B Common Shareholders:
|
|
|
|
|
|
|
|
|
Continuing operations
available to A&B common shareholders
|
|
$
6.3
|
|
$
6.9
|
|
$
20.9
|
|
$
29.7
|
Discontinued
operations available to A&B common shareholders
|
|
—
|
|
(0.6)
|
|
(0.1)
|
|
(0.7)
|
Net income (loss)
available to A&B common shareholders
|
|
$
6.3
|
|
$
6.3
|
|
$
20.8
|
|
$
29.0
|
|
|
|
|
|
|
|
|
|
ALEXANDER &
BALDWIN, INC. AND SUBSIDIARIES
CONDENSED
CONSOLIDATED BALANCE SHEETS
(amounts in millions;
unaudited)
|
|
|
|
September
30,
|
|
December
31,
|
|
|
2022
|
|
2021
|
ASSETS
|
|
|
|
|
Real estate
investments
|
|
|
|
|
Real estate
property
|
|
$
1,598.3
|
|
$
1,588.2
|
Accumulated
depreciation
|
|
(197.6)
|
|
(180.5)
|
Real estate property,
net
|
|
1,400.7
|
|
1,407.7
|
Real estate
developments
|
|
64.8
|
|
65.0
|
Investments in real
estate joint ventures and partnerships
|
|
8.2
|
|
8.8
|
Real estate intangible
assets, net
|
|
45.4
|
|
51.6
|
Real estate
investments, net
|
|
1,519.1
|
|
1,533.1
|
Cash and cash
equivalents
|
|
7.3
|
|
70.0
|
Restricted
cash
|
|
0.2
|
|
1.0
|
Accounts receivable
and retention, net
|
|
35.9
|
|
28.9
|
Inventories
|
|
30.1
|
|
20.3
|
Other property,
net
|
|
69.6
|
|
83.5
|
Operating lease
right-of-use assets
|
|
37.0
|
|
20.1
|
Goodwill
|
|
8.7
|
|
8.7
|
Other
receivables
|
|
6.1
|
|
11.6
|
Prepaid expenses and
other assets
|
|
133.9
|
|
102.6
|
Total
assets
|
|
$
1,847.9
|
|
$
1,879.8
|
|
|
|
|
|
LIABILITIES AND
EQUITY
|
|
|
|
|
Liabilities:
|
|
|
|
|
Notes payable and
other debt
|
|
$
469.7
|
|
$
532.7
|
Accounts
payable
|
|
18.5
|
|
9.9
|
Operating lease
liabilities
|
|
36.8
|
|
19.4
|
Accrued pension and
post-retirement benefits
|
|
10.4
|
|
56.3
|
Deferred
revenue
|
|
71.3
|
|
68.5
|
Accrued and other
liabilities
|
|
105.9
|
|
119.5
|
Redeemable
Noncontrolling Interest
|
|
8.1
|
|
6.9
|
Equity
|
|
1,127.2
|
|
1,066.6
|
Total liabilities and
equity
|
|
$
1,847.9
|
|
$
1,879.8
|
|
|
|
|
|
|
|
|
|
|
ALEXANDER &
BALDWIN, INC. AND SUBSIDIARIES
CONDENSED
CONSOLIDATED CASH FLOWS
(amounts in millions;
unaudited)
|
|
|
|
Nine Months Ended
September 30,
|
|
|
2022
|
|
2021
|
Cash Flows from
Operating Activities:
|
|
|
|
|
Net income
(loss)
|
|
$
22.2
|
|
$
29.4
|
Adjustments to
reconcile net income (loss) to net cash provided by (used in)
operations:
|
|
|
|
|
Depreciation and
amortization
|
|
33.1
|
|
37.7
|
Income tax benefit
related to pension termination and other, net
|
|
(18.3)
|
|
—
|
Loss (gain) from
disposals and asset transactions, net
|
|
(54.0)
|
|
(0.4)
|
Share-based
compensation expense
|
|
4.6
|
|
4.4
|
Equity in (income)
loss from affiliates, net of operating cash
distributions
|
|
(1.1)
|
|
(10.1)
|
Pension
termination
|
|
76.9
|
|
—
|
Changes in operating
assets and liabilities:
|
|
|
|
|
Trade, contracts
retention, and other contract receivables
|
|
(8.7)
|
|
9.5
|
Inventories
|
|
(9.8)
|
|
(3.8)
|
Prepaid expenses,
income tax receivable and other assets
|
|
(13.1)
|
|
0.3
|
Development/other
property inventory
|
|
9.5
|
|
0.4
|
Accrued pension and
post-retirement benefits
|
|
(31.3)
|
|
(4.0)
|
Accounts
payable
|
|
5.7
|
|
2.9
|
Accrued and other
liabilities
|
|
(6.7)
|
|
0.9
|
Net cash provided by
(used in) operations
|
|
9.0
|
|
67.2
|
|
|
|
|
|
Cash Flows from
Investing Activities:
|
|
|
|
|
Capital expenditures
for property, plant and equipment
|
|
(15.7)
|
|
(26.1)
|
Proceeds from disposal
of assets
|
|
73.1
|
|
0.6
|
Payments for purchases
of investments in affiliates and other investments
|
|
(1.5)
|
|
(0.8)
|
Distributions of
capital and other receipts from investments in affiliates and other
investments
|
|
0.1
|
|
40.2
|
Net cash provided by
(used in) investing activities
|
|
56.0
|
|
13.9
|
|
|
|
|
|
Cash Flows from
Financing Activities:
|
|
|
|
|
Proceeds from issuance
of notes payable and other debt
|
|
13.5
|
|
128.0
|
Payments of notes
payable and other debt and deferred financing costs
|
|
(29.3)
|
|
(192.2)
|
Borrowings (payments)
on line-of-credit agreement, net
|
|
(50.0)
|
|
—
|
Cash dividends
paid
|
|
(57.7)
|
|
(46.5)
|
Repurchases of common
stock and other payments
|
|
(5.0)
|
|
(1.1)
|
Net cash provided by
(used in) financing activities
|
|
(128.5)
|
|
(111.8)
|
|
|
|
|
|
Cash, Cash
Equivalents and Restricted Cash
|
|
|
|
|
Net increase
(decrease) in cash, cash equivalents and restricted cash
|
|
(63.5)
|
|
(30.7)
|
Balance, beginning of
period
|
|
71.0
|
|
57.4
|
Balance, end of
period
|
|
$
7.5
|
|
$
26.7
|
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 Commercial Real Estate operating profit
(loss) to Commercial Real Estate NOI and Same-Store NOI are as
follows:
|
|
Three Months Ended
September 30,
|
|
Nine Months Ended
September 30,
|
(amounts in millions;
unaudited)
|
|
2022
|
|
2021
|
|
Change1
|
|
2022
|
|
2021
|
|
Change1
|
Commercial Real
Estate Operating Profit
(Loss)
|
|
$
20.3
|
|
$
19.0
|
|
$
1.3
|
|
$
60.3
|
|
$
53.0
|
|
$
7.3
|
Plus: Depreciation and
amortization
|
|
9.0
|
|
9.2
|
|
(0.2)
|
|
27.4
|
|
28.2
|
|
(0.8)
|
Less: Straight-line
lease adjustments
|
|
(1.2)
|
|
(1.1)
|
|
(0.1)
|
|
(3.7)
|
|
(2.9)
|
|
(0.8)
|
Less:
Favorable/(unfavorable) lease amortization
|
|
(0.2)
|
|
(0.1)
|
|
(0.1)
|
|
(0.8)
|
|
(0.5)
|
|
(0.3)
|
Less: Termination
income
|
|
(0.1)
|
|
(0.1)
|
|
—
|
|
(0.1)
|
|
(0.1)
|
|
—
|
Plus: Other
(income)/expense, net
|
|
(0.6)
|
|
(0.4)
|
|
(0.2)
|
|
0.3
|
|
(0.6)
|
|
0.9
|
Plus: Selling,
general, administrative and other
expenses
|
|
1.8
|
|
1.6
|
|
0.2
|
|
5.2
|
|
4.8
|
|
0.4
|
Commercial Real
Estate NOI
|
|
29.0
|
|
28.1
|
|
0.9
|
|
88.6
|
|
81.9
|
|
6.7
|
Less: NOI from
acquisitions, dispositions, and
other adjustments
|
|
(0.1)
|
|
—
|
|
(0.1)
|
|
(0.4)
|
|
(0.1)
|
|
(0.3)
|
Commercial Real
Estate Same-Store NOI
|
|
$
28.9
|
|
$
28.1
|
|
$
0.8
|
|
$
88.2
|
|
$
81.8
|
|
$
6.4
|
|
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)
|
|
2022
|
|
2021
|
|
2022
|
|
2021
|
Net income (loss)
available to A&B common shareholders
|
|
$
6.3
|
|
$
6.3
|
|
$
20.8
|
|
$
29.0
|
Depreciation and
amortization of commercial real estate properties
|
|
9.0
|
|
9.2
|
|
27.4
|
|
28.2
|
Gain on the disposal
of commercial real estate properties, net
|
|
—
|
|
—
|
|
—
|
|
(0.2)
|
FFO
|
|
$
15.3
|
|
$
15.5
|
|
$
48.2
|
|
$
57.0
|
Exclude items not
related to core business:
|
|
|
|
|
|
|
|
|
Land Operations
Operating (Profit) Loss
|
|
2.2
|
|
(1.7)
|
|
10.0
|
|
(22.3)
|
Materials &
Construction Operating (Profit) Loss
|
|
(1.8)
|
|
0.3
|
|
(4.4)
|
|
6.2
|
Loss from discontinued
operations
|
|
—
|
|
0.6
|
|
0.1
|
|
0.7
|
Income (loss)
attributable to noncontrolling interest
|
|
0.4
|
|
0.1
|
|
1.2
|
|
0.3
|
Income tax expense
(benefit)
|
|
—
|
|
—
|
|
(18.1)
|
|
0.1
|
Non-core business
interest expense
|
|
2.8
|
|
3.1
|
|
8.3
|
|
9.9
|
Pension termination -
CRE and Corporate
|
|
—
|
|
—
|
|
14.7
|
|
—
|
Core
FFO
|
|
$
18.9
|
|
$
17.9
|
|
$
60.0
|
|
$
51.9
|
Reconciliations of Core FFO starting from Commercial Real Estate
operating profit (loss) are as follows:
|
|
Three Months
Ended
September 30,
|
|
Nine Months
Ended
September 30,
|
(amounts in millions;
unaudited)
|
|
2022
|
|
2021
|
|
2022
|
|
2021
|
Commercial Real
Estate Operating Profit (Loss)
|
|
$
20.3
|
|
$
19.0
|
|
$
60.3
|
|
$
53.0
|
Depreciation and
amortization of commercial real estate properties
|
|
9.0
|
|
9.2
|
|
27.4
|
|
28.2
|
Corporate and other
expense
|
|
(7.6)
|
|
(6.8)
|
|
(33.7)
|
|
(18.9)
|
Pension termination -
CRE and Corporate
|
|
—
|
|
—
|
|
14.7
|
|
—
|
Distributions to
participating securities
|
|
(0.1)
|
|
—
|
|
(0.2)
|
|
—
|
Core business interest
expense
|
|
(2.7)
|
|
(3.5)
|
|
(8.5)
|
|
(10.4)
|
Core
FFO
|
|
$
18.9
|
|
$
17.9
|
|
$
60.0
|
|
$
51.9
|
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)
|
|
2022
|
|
2021
|
Net Income
(Loss)
|
|
$
28.6
|
|
$
30.5
|
Adjustments:
|
|
|
|
|
Depreciation and
amortization
|
|
45.8
|
|
50.5
|
Interest
expense
|
|
22.9
|
|
27.8
|
Income tax expense
(benefit)
|
|
(18.2)
|
|
(0.3)
|
Consolidated
EBITDA
|
|
$
79.1
|
|
$
108.5
|
Equity method
investment impairment related to the Materials & Construction
Segment
|
|
2.9
|
|
—
|
Asset impairments
related to the Materials & Construction Segment
|
|
26.1
|
|
—
|
Pension
termination
|
|
76.9
|
|
—
|
Consolidated
Adjusted EBITDA
|
|
$
185.0
|
|
$
108.5
|
Reconciliations of Materials & Construction operating profit
(loss) to Materials & Construction EBITDA and Materials &
Construction Adjusted EBITDA are as follows:
|
Three Months
Ended
September 30,
|
|
Nine Months
Ended
September 30,
|
(amounts in millions;
unaudited)
|
2022
|
|
2021
|
|
2022
|
|
2021
|
Materials &
Construction Operating Profit (Loss)
|
$
1.8
|
|
$
(0.3)
|
|
$
4.4
|
|
$
(6.2)
|
Materials &
Construction depreciation and amortization
|
1.3
|
|
2.6
|
|
4.3
|
|
8.1
|
Materials &
Construction EBITDA
|
3.1
|
|
2.3
|
|
8.7
|
|
1.9
|
Loss (income)
attributable to noncontrolling interest
|
(0.4)
|
|
(0.1)
|
|
(1.2)
|
|
(0.3)
|
Materials &
Construction Adjusted EBITDA1
|
$
2.7
|
|
$
2.2
|
|
$
7.5
|
|
$
1.6
|
|
|
|
|
|
|
|
|
1 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 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, Inc.