HONOLULU, Feb. 24, 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 fourth quarter and full-year of 2021.
Chris Benjamin, A&B president
& chief executive officer, stated: "We entered 2021 optimistic
for a strong rebound in our high-quality portfolio of
grocery-anchored retail, industrial and ground lease assets, and we
produced exceptional results as our commercial real estate ("CRE")
portfolio Net Operating Income ("NOI") surpassed pre-pandemic
levels. For the full-year, CRE NOI
increased by 17% and Core Funds From Operations ("Core FFO") by 26%
over the prior year."
"The strategic and proactive approach we undertook with our
tenants at the onset of the pandemic proved successful as we
essentially maintained total portfolio leased occupancy, ending the
year at 94.3%. The pace of collections from cash-basis tenants and
reserve reversals were well above expectation and contributed to
our stellar performance. Further, we experienced robust leasing
activity, including two consecutive quarters of record-level new
leasing, and are pleased to report full-year leasing spreads of
4.6% for comparable leases."
"Additionally, we made meaningful progress in advancing our
strategic agenda, continuing to capitalize on the favorable market
for Hawai'i real estate with approximately $203 million in total sales proceeds for the full
year. The sale of the Kukui'ula residential development in
mid-November was a particularly important step in our
simplification efforts. We generated a total of $154 million in proceeds from Kukui'ula in 2021.
During the year, we also closed sales totaling nine acres at Maui
Business Park II and nearly 2,000 acres of other non-core
landholdings."
"We are encouraged by the solid CRE performance and significant
simplification progress during 2021, which position us to refocus
on CRE growth and complete our transformation to a pure-play
Hawai'i CRE company. Our many accomplishments this past year,
driven by the outstanding work of our team, have resulted in a
strong and flexible balance sheet that is supportive of our pivot
toward CRE growth. Importantly, we continue to live out our values
as 'Partners for Hawai'i,' supporting our team members, tenants and
communities through the unprecedented impacts of the pandemic and
recovery. As we look ahead optimistically, we maintain our
long-standing commitment to environmental, social and governance
("ESG") principles."
Financial Results
- Net income available to A&B common shareholders and diluted
earnings per share for the fourth quarter of 2021 were $6.1 million and $0.08 per share, respectively, compared to
$1.0 million and $0.01 per share in the same quarter of 2020.
- Net income available to A&B common shareholders and diluted
earnings per share for the full-year of 2021 were $35.1 million and $0.48 per share, respectively, compared to
$5.5 million and $0.08 per share in 2020. The elevated 2021
results were primarily driven by strong CRE and Land Operations
segment performance, partially offset by a $29.0 million non-cash impairment related to the
Materials & Construction segment in the fourth quarter of
2021.
- The fourth quarter of 2021 Nareit-defined Funds From Operations
("FFO") and FFO per diluted share were $13.0
million and $0.18 per share,
respectively, compared to $10.7
million and $0.15 per share in
the same quarter of 2020. The full-year 2021 FFO and FFO per
diluted share were $70.0 million and
$0.96 per share, respectively,
compared to $45.1 million and
$0.62 per share in the same period of
2020.
- The fourth quarter of 2021 Core FFO and Core FFO per diluted
share were $17.5 million and
$0.24 per share, respectively,
compared to $12.1 million and
$0.17 per share in the same quarter
of 2020. The full-year 2021 Core FFO and Core FFO per diluted share
were $69.4 million and $0.96 per share, respectively, compared to
$55.2 million and $0.76 per share in the same period of 2020.
Commercial Real Estate (CRE)
- In the fourth quarter of 2021, CRE revenue increased
$9.1 million, or 24.7%, to
$46.0 million, as compared to
$36.9 million in the same quarter of
2020. CRE revenue increased $23.2
million, or 15.5%, to $173.2
million for the full-year of 2021, as compared to
$150.0 million in the same period of
2020.
- In the fourth quarter of 2021, CRE net operating income ("NOI")
increased by $7.2 million, or 33.3%,
to $28.8 million, as compared to
$21.6 million in the same quarter of
2020. CRE NOI increased by
$16.4 million, or 17.4%, to
$110.7 million for the full-year of
2021, as compared to $94.3 million in
the same period of 2020.
- In the fourth quarter of 2021, CRE Same-Store NOI increased
33.0% compared to the prior year fourth quarter. Full-year
Same-Store NOI increased 17.3% compared to the same period in
2020.
- During the fourth quarter of 2021, the Company executed 65
total leases (inclusive of COVID-related lease modification
extensions), covering approximately 162,000 square feet of gross
leasable area ("GLA"). There were 271 total leases executed in
2021, covering approximately 651,000 square feet of GLA.
- Comparable leasing spreads were 5.4% portfolio-wide for the
fourth quarter of 2021 and 5.6% for retail spaces. Full-year
comparable leasing spreads stand at 4.6% portfolio-wide and 5.2%
for retail spaces.
- During the fourth quarter of 2021, the Company executed 15
COVID-related lease modification extensions, covering approximately
42,000 square feet of GLA at a weighted-average term of 3.4 years.
Full-year, the Company executed 49 COVID-related lease modification
extensions, covering approximately 115,000 square feet of GLA at a
weighted-average term of 2.0 years.
- Significant leases executed during 2021 include:
-
- Fifty-seven executed leases related to properties located in
Kailua, including Aikahi Park
Shopping Center, totaling approximately 84,000 square feet of
GLA.
- Eleven executed leases at Waipio Industrial totaling
approximately 33,000 square feet of GLA, sustaining the 100%
occupancy status of the property.
- Ten executed leases at Pearl Highlands Center totaling
approximately 29,000 square feet of GLA, sustaining the 99.8%
occupancy status of the property.
- Nine executed leases at P&L Building totaling approximately
46,000 square feet of GLA, sustaining the 100% occupancy status of
the property.
- Overall leased occupancy was 94.3% as of December 31, 2021, unchanged compared to
December 31, 2020. Same-Store leased
occupancy was 94.2% as of December 31,
2021, a decrease of 10.0 basis points compared to
December 31, 2020.
-
- Leased occupancy in the retail portfolio was 93.1% as of
December 31, 2021, an increase of
80.0 basis points compared to the same period last year, primarily
due to strong leasing activity at Waianae Mall and Pearl Highlands
Center. Leased occupancy in the Same-Store retail portfolio was
93.0% as of December 31, 2021, an
increase of 80.0 basis points compared to the same period last
year.
- Leased occupancy in the industrial portfolio was 97.0% as of
December 31, 2021, a decrease of
160.0 basis points compared to the same period last year, primarily
due to modest tenant turnover at Port Allen Industrial and Kaka'ako
Commerce Center. Leased occupancy in the Same-Store industrial
portfolio was 96.9%, a decrease of 170.0 basis points compared to
the same period last year.
CRE Development and Redevelopment
- Aikahi Park Shopping Center redevelopment efforts continue to
progress on schedule and on budget toward a fourth quarter of 2022
target stabilization. Work is advancing to improve the shopping
experience and provide the surrounding residents and center
visitors with community-focused dining, shopping and service
options while incorporating sustainable design and building
elements.
Land Operations
- Operating profit was $33.1
million in the fourth quarter of 2021, as compared to
$3.8 million in the fourth quarter of
2020. Operating profit was $55.4
million for the year ended December
31, 2021, as compared to $15.4
million for the year ended December
31, 2020. The increase in 2021 over the prior year was
attributable to the monetization of Kukui'ula residential
development, as well as landholdings and other development-for-sale
investments.
- The Company continued to monetize land and development-for-sale
investments including the following transactions that closed in
2021:
-
- Sale of Kukui'ula residential development.
- Preceding the sale of the project, 42 units and two bulk
parcels at the Kukui'ula joint venture projects.
- 9 acres at Maui Business Park II.
- Approximately 2,000 acres of non-core urban-zoned, agricultural
and conservation lands.
Materials & Construction (M&C)
- Materials & Construction operating loss was $34.3 million in the fourth quarter of 2021, as
compared to a $1.9 million loss in
the fourth quarter of 2020. Materials & Construction operating
loss was $40.5 million for the year
ended December 31, 2021, as compared
to a $10.5 million loss in 2020. The
2021 loss was primarily driven by a $29.0
million non-cash impairment related to long-lived assets and
an equity method investment during the fourth quarter.
- M&C Adjusted EBITDA was $(2.7)
million in the fourth quarter of 2021, as compared to
$0.7 million for the same quarter in
2020. M&C Adjusted EBITDA was $(1.1)
million for the year ended December
31, 2021, as compared to $6.3
million in 2020. M&C Adjusted EBITDA in the fourth
quarter of 2021 includes one-time non-cash charges recorded at an
equity method investment, of which $(3.5)
million is attributable to the Company.
Balance Sheet and Capital Markets Activity
- In 2021, the following financing activities were
completed:
-
- In August, the Company completed the third amendment to its
revolving credit facility which includes, among other
improvements:
-
- more favorable interest rate spreads;
- an extension of maturity date from September 15, 2022, to August 27, 2025, with options to extend further
until August 27, 2026; and
- an increase in the aggregate commitments of the lenders from
$450 million to $500 million.
- In August, in connection with recasting the revolving credit
facility, the Company repaid its $50
million bank syndicated term loan prior to its maturity
date, extinguishing the loan.
- In August, the Company established an "at the market" ("ATM")
equity offering program to issue and sell shares having an
aggregate offering price of up to $150,000,000. The Company did not utilize its ATM
program during 2021.
- In September, the Company made final payments totaling
$14 million on its Kailua Town Center
and Kailua Town Center #2 mortgage loans, extinguishing the
loans.
- During the year, the Company repaid $61
million, net, on its revolving credit facility and also
repaid $93.4 million related to term
debt and mortgages.
- As of December 31, 2021, the
Company had $532.7 million in total
debt, which represents 22.6% of the Company's total market
capitalization (equity market capitalization plus total debt). The
Company's debt has a weighted-average maturity of 4.3 years, with a
weighted-average interest rate of 4.1%. One hundred percent of debt
was at fixed rates. The Company had total liquidity of $518.9 million, consisting of cash and cash
equivalents of $70.0 million and
$448.9 million available on its
committed line of credit.
Dividend
- The Company paid a fourth quarter 2021 dividend of $0.18 per share on January
6, 2022.
- The Company's Board declared a first quarter 2022 dividend of
$0.19 per share, payable on
April 5, 2022, to shareholders of
record as of the close of business on March
18, 2022.
2022 Full-Year Guidance
- Initial outlook for 2022 includes:
-
- CRE Same-Store NOI: 0% to 2%
- CRE Same-Store NOI: 2% to 4%, excluding prior year reserve
reversals
- Core FFO per diluted share: $0.94
to $1.00
Environmental, Social and Governance (ESG)
Activity
- In 2021, the following ESG activities and highlights
occurred:
-
- In August, released A&B's Second Annual Corporate
Responsibility Report, with enhanced SASB, TCFD and GHG
disclosures.
- In October, finalized plans for a 1.3 megawatt rooftop
photovoltaic system at Pearl Highlands Center, marking the
beginning of a broader rooftop solar initiative across the CRE
portfolio.
- During the year, made charitable contributions to 175
Hawai'i-based non-profit organizations, with a particular focus on
expanding support for DEI, social justice and housing-related
causes.
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, eleven industrial assets and four office properties, as
well as 143 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
December 31,
|
|
Year Ended
December 31,
|
|
|
2021
|
|
2020
|
|
2021
|
|
2020
|
Operating
Revenue:
|
|
|
|
|
|
|
|
|
Commercial Real
Estate
|
|
$
46.0
|
|
$
36.9
|
|
$
173.2
|
|
$
150.0
|
Land
Operations
|
|
41.4
|
|
11.2
|
|
79.9
|
|
38.7
|
Materials &
Construction
|
|
37.3
|
|
24.7
|
|
126.2
|
|
116.6
|
Total operating
revenue
|
|
124.7
|
|
72.8
|
|
379.3
|
|
305.3
|
Operating Profit
(Loss):
|
|
|
|
|
|
|
|
|
Commercial Real
Estate
|
|
19.6
|
|
11.9
|
|
72.6
|
|
49.8
|
Land
Operations
|
|
33.1
|
|
3.8
|
|
55.4
|
|
15.4
|
Materials &
Construction
|
|
(34.3)
|
|
(1.9)
|
|
(40.5)
|
|
(10.5)
|
Total operating
profit (loss)
|
|
18.4
|
|
13.8
|
|
87.5
|
|
54.7
|
Gain (loss) on
disposal of commercial real estate properties, net
|
|
2.6
|
|
—
|
|
2.8
|
|
0.5
|
Interest
expense
|
|
(6.1)
|
|
(7.6)
|
|
(26.3)
|
|
(30.3)
|
Corporate and other
expense
|
|
(8.2)
|
|
(5.5)
|
|
(27.1)
|
|
(19.3)
|
Income (Loss) from
Continuing Operations Before Income Taxes
|
|
6.7
|
|
0.7
|
|
36.9
|
|
5.6
|
Income tax benefit
(expense)
|
|
0.1
|
|
0.4
|
|
—
|
|
0.4
|
Income (Loss) from
Continuing Operations
|
|
6.8
|
|
1.1
|
|
36.9
|
|
6.0
|
Income (loss) from
discontinued operations, net of income taxes
|
|
(0.4)
|
|
—
|
|
(1.1)
|
|
(0.8)
|
Net Income
(Loss)
|
|
6.4
|
|
1.1
|
|
35.8
|
|
5.2
|
Loss (income)
attributable to noncontrolling interest
|
|
(0.1)
|
|
—
|
|
(0.4)
|
|
0.4
|
Net Income (Loss)
Attributable to A&B Shareholders
|
|
$
6.3
|
|
$
1.1
|
|
$
35.4
|
|
$
5.6
|
|
|
|
|
|
|
|
|
|
Basic Earnings
(Loss) Per Share of Common Stock:
|
|
|
|
|
|
|
|
|
Continuing operations
available to A&B shareholders
|
|
$
0.09
|
|
$
0.01
|
|
$
0.50
|
|
$
0.09
|
Discontinued
operations available to A&B shareholders
|
|
(0.01)
|
|
—
|
|
(0.02)
|
|
(0.01)
|
Net income (loss)
available to A&B shareholders
|
|
$
0.08
|
|
$
0.01
|
|
$
0.48
|
|
$
0.08
|
Diluted Earnings
(Loss) Per Share of Common Stock:
|
|
|
|
|
|
|
|
|
Continuing operations
available to A&B shareholders
|
|
$
0.09
|
|
$
0.01
|
|
$
0.50
|
|
$
0.09
|
Discontinued
operations available to A&B shareholders
|
|
(0.01)
|
|
—
|
|
(0.02)
|
|
(0.01)
|
Net income (loss)
available to A&B shareholders
|
|
$
0.08
|
|
$
0.01
|
|
$
0.48
|
|
$
0.08
|
|
|
|
|
|
|
|
|
|
Weighted-Average
Number of Shares Outstanding:
|
|
|
|
|
|
|
|
|
Basic
|
|
72.5
|
|
72.4
|
|
72.5
|
|
72.3
|
Diluted
|
|
72.7
|
|
72.5
|
|
72.6
|
|
72.4
|
|
|
|
|
|
|
|
|
|
Amounts Available
to A&B Common Shareholders:
|
|
|
|
|
|
|
|
|
Continuing operations
available to A&B common shareholders
|
|
$
6.5
|
|
$
1.0
|
|
$
36.2
|
|
$
6.3
|
Discontinued
operations available to A&B common shareholders
|
|
(0.4)
|
|
—
|
|
(1.1)
|
|
(0.8)
|
Net income (loss)
available to A&B common shareholders
|
|
$
6.1
|
|
$
1.0
|
|
$
35.1
|
|
$
5.5
|
ALEXANDER &
BALDWIN, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(amounts in millions, unaudited)
|
|
|
|
December
31,
|
|
|
2021
|
|
2020
|
ASSETS
|
|
|
|
|
Real estate
investments
|
|
|
|
|
Real estate
property
|
|
$
1,588.2
|
|
$
1,549.7
|
Accumulated
depreciation
|
|
(180.5)
|
|
(154.4)
|
Real estate property,
net
|
|
1,407.7
|
|
1,395.3
|
Real estate
developments
|
|
65.0
|
|
75.7
|
Investments in real
estate joint ventures and partnerships
|
|
8.8
|
|
134.1
|
Real estate intangible
assets, net
|
|
51.6
|
|
61.9
|
Real estate
investments, net
|
|
1,533.1
|
|
1,667.0
|
Cash and cash
equivalents
|
|
70.0
|
|
57.2
|
Restricted
cash
|
|
1.0
|
|
0.2
|
Accounts receivable
and retention, net
|
|
28.9
|
|
43.5
|
Inventories
|
|
20.3
|
|
18.4
|
Other property,
net
|
|
83.5
|
|
110.8
|
Operating lease
right-of-use assets
|
|
20.1
|
|
18.6
|
Goodwill
|
|
8.7
|
|
10.5
|
Other receivables,
net
|
|
11.6
|
|
14.2
|
Prepaid expenses and
other assets
|
|
102.6
|
|
95.6
|
Total
assets
|
|
$
1,879.8
|
|
$
2,036.0
|
|
|
|
|
|
LIABILITIES AND
EQUITY
|
|
|
|
|
Liabilities:
|
|
|
|
|
Notes payable and
other debt
|
|
$
532.7
|
|
$
687.1
|
Accounts
payable
|
|
9.9
|
|
9.8
|
Operating lease
liabilities
|
|
19.4
|
|
18.4
|
Accrued pension and
post-retirement benefits
|
|
56.3
|
|
34.7
|
Deferred
revenue
|
|
68.5
|
|
66.9
|
Accrued and other
liabilities
|
|
119.5
|
|
116.5
|
Redeemable
Noncontrolling Interest
|
|
6.9
|
|
6.5
|
Equity
|
|
1,066.6
|
|
1,096.1
|
Total liabilities and
equity
|
|
$
1,879.8
|
|
$
2,036.0
|
ALEXANDER &
BALDWIN, INC. AND SUBSIDIARIES
CONSOLIDATED CASH FLOWS
(amounts in millions; unaudited)
|
|
|
Year Ended
December 31,
|
|
2021
|
|
2020
|
Cash Flows from
Operating Activities:
|
|
|
|
Net income
(loss)
|
$
35.8
|
|
$
5.2
|
Adjustments to
reconcile net income (loss) to net cash provided by (used in)
operations:
|
|
|
|
Depreciation and
amortization
|
50.4
|
|
53.3
|
Deferred income
taxes
|
—
|
|
—
|
Loss (gain) from
disposals and asset transactions, net
|
(3.0)
|
|
(9.5)
|
Impairment of assets
and equity method investment
|
29.0
|
|
5.6
|
Share-based
compensation expense
|
5.9
|
|
5.8
|
Equity in (income)
loss from affiliates, net of operating cash
distributions
|
(8.6)
|
|
(4.8)
|
Changes in operating
assets and liabilities:
|
|
|
|
Trade, contracts
retention, and other contract receivables
|
4.7
|
|
8.8
|
Inventories
|
(1.9)
|
|
2.1
|
Prepaid expenses,
income tax receivable and other assets
|
1.3
|
|
13.0
|
Development/other
property inventory
|
8.7
|
|
3.6
|
Accrued pension and
post-retirement benefits
|
(3.0)
|
|
2.7
|
Accounts
payable
|
1.9
|
|
(6.2)
|
Accrued and other
liabilities
|
3.0
|
|
(16.5)
|
Net cash provided by
(used in) operations
|
$
124.2
|
|
$
63.1
|
|
|
|
|
Cash Flows from
Investing Activities:
|
|
|
|
Capital expenditures
for acquisitions
|
(16.9)
|
|
—
|
Capital expenditures
for property, plant and equipment
|
(36.6)
|
|
(25.1)
|
Proceeds from disposal
of assets
|
3.2
|
|
27.1
|
Payments for purchases
of investments in affiliates and other investments
|
(2.7)
|
|
(1.0)
|
Distributions of
capital and other receipts from investments in affiliates and other
investments
|
149.5
|
|
11.0
|
Net cash provided by
(used in) investing activities
|
$
96.5
|
|
$
12.0
|
|
|
|
|
Cash Flows from
Financing Activities:
|
|
|
|
Proceeds from issuance
of notes payable and other debt
|
131.0
|
|
173.0
|
Payments of notes
payable and other debt and deferred financing costs
|
(290.2)
|
|
(183.0)
|
Borrowings (payments)
on line-of-credit agreement, net
|
—
|
|
(8.7)
|
Distribution to
noncontrolling interests
|
—
|
|
—
|
Cash dividends
paid
|
(46.6)
|
|
(13.8)
|
Proceeds from issuance
(payments for repurchases) of capital stock and other,
net
|
(1.3)
|
|
(0.6)
|
Payment of deferred
acquisition holdback
|
—
|
|
—
|
Net cash provided by
(used in) financing activities
|
$
(207.1)
|
|
$
(33.1)
|
|
|
|
|
Cash, Cash
Equivalents and Restricted Cash
|
|
|
|
Net increase
(decrease) in cash, cash equivalents and restricted cash
|
13.6
|
|
42
|
Balance, beginning of
period
|
57.4
|
|
15.4
|
Balance, end of
period
|
$
71.0
|
|
$
57.4
|
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
December 31,
|
|
Year Ended
December 31,
|
(in millions,
unaudited)
|
|
2021
|
|
2020
|
|
2021
|
|
2020
|
CRE Operating
Profit (Loss)
|
|
$
19.6
|
|
$
11.9
|
|
$
72.6
|
|
$
49.8
|
Plus: Depreciation and
amortization
|
|
9.5
|
|
9.7
|
|
37.7
|
|
40.1
|
Less: Straight-line
lease adjustments
|
|
(1.5)
|
|
0.2
|
|
(4.4)
|
|
1.3
|
Less:
Favorable/(unfavorable) lease amortization
|
|
(0.4)
|
|
(0.3)
|
|
(0.9)
|
|
(1.2)
|
Less: Termination
income
|
|
(0.1)
|
|
(1.2)
|
|
(0.2)
|
|
(2.3)
|
Plus: Other
(income)/expense, net
|
|
—
|
|
(0.6)
|
|
(0.6)
|
|
(0.9)
|
Plus: Impairment of
assets
|
|
—
|
|
—
|
|
—
|
|
—
|
Plus: Selling,
general, administrative and other expenses
|
|
1.7
|
|
1.9
|
|
6.5
|
|
7.5
|
Less: Legal costs
previously capitalized1
|
|
—
|
|
—
|
|
—
|
|
—
|
NOI
|
|
$
28.8
|
|
$
21.6
|
|
$
110.7
|
|
$
94.3
|
Less: NOI from
acquisitions, dispositions and other adjustments
|
|
(0.8)
|
|
(0.6)
|
|
(2.9)
|
|
(2.4)
|
Same-Store
NOI
|
|
$
28.0
|
|
$
21.0
|
|
$
107.8
|
|
$
91.9
|
FFO is presented by the Company as a widely used non-GAAP
measure of operating performance for real estate companies. FFO is
defined by the National Association of Real Estate Investment
Trusts ("Nareit") December 2018
Financial Standards White Paper as follows: net income (calculated
in accordance with GAAP), excluding (1) depreciation and
amortization related to real estate, (2) gains and losses from the
sale of certain real estate assets, (3) gains and losses from
change in control and (4) impairment write-downs of certain real
estate assets and investments in entities when the impairment is
directly attributable to decreases in the value of depreciable real
estate held by the entity.
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 noted above (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
December 31,
|
|
Year Ended
December 31,
|
(amounts in millions;
unaudited)
|
|
2021
|
|
2020
|
|
2021
|
|
2020
|
Net income (loss)
available to A&B common shareholders
|
|
$
6.1
|
|
$
1.0
|
|
$
35.1
|
|
$
5.5
|
Depreciation and
amortization of commercial real estate properties
|
|
9.5
|
|
9.7
|
|
37.7
|
|
40.1
|
Gain on the disposal of
commercial real estate properties, net
|
|
(2.6)
|
|
—
|
|
(2.8)
|
|
(0.5)
|
Impairment of CRE
assets
|
|
—
|
|
—
|
|
—
|
|
—
|
FFO
|
|
$
13.0
|
|
$
10.7
|
|
$
70.0
|
|
$
45.1
|
Exclude items not
related to core business:
|
|
|
|
|
|
|
|
|
Land Operations
Operating Profit
|
|
(33.1)
|
|
(3.8)
|
|
(55.4)
|
|
(15.4)
|
Materials &
Construction Operating (Profit) Loss
|
|
34.3
|
|
1.9
|
|
40.5
|
|
10.5
|
Loss from discontinued
operations
|
|
0.4
|
|
—
|
|
1.1
|
|
0.8
|
Income (loss)
attributable to noncontrolling interest
|
|
0.1
|
|
—
|
|
0.4
|
|
(0.4)
|
Income tax expense
(benefit)
|
|
(0.1)
|
|
(0.4)
|
|
—
|
|
(0.4)
|
Non-core business
interest expense
|
|
2.9
|
|
3.7
|
|
12.8
|
|
15.0
|
Core
FFO
|
|
$
17.5
|
|
$
12.1
|
|
$
69.4
|
|
$
55.2
|
Reconciliations of Core FFO starting from Commercial Real Estate
operating profit are as follows:
|
|
Three Months
Ended
December 31,
|
|
Year Ended
December 31,
|
(amounts in millions;
unaudited)
|
|
2021
|
|
2020
|
|
2021
|
|
2020
|
CRE Operating
Profit
|
|
$
19.6
|
|
$
11.9
|
|
$
72.6
|
|
$
49.8
|
Depreciation and
amortization of commercial real estate properties
|
|
9.5
|
|
9.7
|
|
37.7
|
|
40.1
|
Corporate and other
expense
|
|
(8.2)
|
|
(5.5)
|
|
(27.1)
|
|
(19.3)
|
Core business interest
expense
|
|
(3.2)
|
|
(3.9)
|
|
(13.5)
|
|
(15.3)
|
Distributions to
participating securities
|
|
(0.2)
|
|
(0.1)
|
|
(0.3)
|
|
(0.1)
|
Core
FFO
|
|
$
17.5
|
|
$
12.1
|
|
$
69.4
|
|
$
55.2
|
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.
|
|
Three Months
Ended
December 31,
|
|
Year Ended
December 31,
|
(in millions;
unaudited)
|
|
2021
|
|
2020
|
|
2021
|
|
2020
|
Materials &
Construction Operating Profit (Loss)
|
|
$
(34.3)
|
|
$
(1.9)
|
|
$
(40.5)
|
|
$
(10.5)
|
Materials &
Construction depreciation and amortization
|
|
2.7
|
|
2.6
|
|
10.8
|
|
10.8
|
Materials &
Construction EBITDA
|
|
$
(31.6)
|
|
$
0.7
|
|
$
(29.7)
|
|
$
0.3
|
Impairment of assets
related to Materials & Construction
|
|
26.1
|
|
—
|
|
26.1
|
|
5.6
|
Impairment of equity
method investment related to Materials &
Construction
|
|
2.9
|
|
—
|
|
2.9
|
|
—
|
Loss (income)
attributable to noncontrolling interest
|
|
(0.1)
|
|
—
|
|
(0.4)
|
|
0.4
|
M&C Adjusted
EBITDA
|
|
$
(2.7)
|
|
$
0.7
|
|
$
(1.1)
|
|
$
6.3
|
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.