Alexander & Baldwin, Inc. (NYSE:ALEX) Q2 2023 Earnings Conference Call July 27, 2023 5:00 PM ET Company Participants Steve Swett – Investor Relations Lance Parker – Chief Executive Officer Clayton Chun – Chief Financial Officer Kit Millan – Senior Vice President-Asset Management Conference Call Participants Alexander Goldfarb – Piper Sandler Mitch Germain – JMP Securities Operator Good afternoon, and welcome to the Alexander & Baldwin Second Quarter 2023 Earnings Conference Call. All participants will be in ...

PART I. FINANCIAL INFORMATION [Financial Statements](index=3&type=section&id=Item%201.%20Financial%20Statements) This section presents Alexander & Baldwin, Inc.'s unaudited condensed consolidated financial statements, detailing changes in assets, net income, and cash flows Condensed Consolidated Balance Sheet Summary (in millions) | Account | June 30, 2023 | Dec 31, 2022 | | :--- | :--- | :--- | | **Total Assets** | **$1,784.9** | **$1,787.3** | | Cash and cash equivalents | $8.2 | $33.3 | | Real estate investments, net | $1,505.4 | $1,507.6 | | Assets held for sale | $154.9 | $126.8 | | **Total Liabilities** | **$752.0** | **$743.6** | | Notes payable and other debt | $506.9 | $472.2 | | **Total A&B shareholders' equity** | **$1,023.7** | **$1,035.7** | Condensed Consolidated Statements of Operations Summary (in millions, except EPS) | Metric | Q2 2023 | Q2 2022 | H1 2023 | H1 2022 | | :--- | :--- | :--- | :--- | :--- | | Total operating revenue | $53.1 | $51.1 | $103.5 | $110.3 | | Operating Income (Loss) | $16.2 | $66.2 | $30.4 | $83.4 | | Net Income (Loss) | $15.0 | $4.4 | $20.3 | $15.4 | | Net Income Attributable to A&B | $13.4 | $4.1 | $18.7 | $14.6 | | Diluted EPS | $0.18 | $0.05 | $0.26 | $0.20 | Condensed Consolidated Statements of Cash Flows Summary (in millions) | Cash Flow Activity | Six Months Ended June 30, 2023 | Six Months Ended June 30, 2022 | | :--- | :--- | :--- | | Net cash provided by (used in) operations | $9.2 | $0.7 | | Net cash provided by (used in) investing activities | ($12.5) | $62.9 | | Net cash provided by (used in) financing activities | ($21.1) | ($101.2) | | **Net (decrease) in cash** | **($24.4)** | **($37.6)** | - The company operates in two segments: Commercial Real Estate (CRE) and Land Operations. As of June 30, 2023, the CRE portfolio is entirely in Hawai'i and includes 22 retail centers, 13 industrial assets, and four office properties[31](index=31&type=chunk) - The Grace Disposal Group, which comprised the majority of the former Materials & Construction (M&C) segment, was classified as held for sale and discontinued operations in Q4 2022. Historical financial data has been retrospectively adjusted to reflect this change[33](index=33&type=chunk) [Management's Discussion and Analysis of Financial Condition and Results of Operations](index=26&type=section&id=Item%202.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management discusses financial performance, business segments, and strategic initiatives, highlighting CRE growth, varied Land Operations results, and sufficient liquidity [Business Overview](index=27&type=section&id=Business%20Overview) The company operates two segments: Commercial Real Estate (CRE) and Land Operations, strategically simplifying through asset monetization - The company operates two reportable segments: Commercial Real Estate (CRE) and Land Operations[124](index=124&type=chunk) - The CRE segment is a vertically integrated real estate investment company focused on retail (especially grocery-anchored centers) and industrial properties in Hawai'i[124](index=124&type=chunk) - The Land Operations segment includes legacy landholdings and assets subject to a simplification and monetization strategy[125](index=125&type=chunk) - As part of its simplification strategy, the company is monetizing non-core assets. The Grace Disposal Group (formerly the M&C segment) was classified as held for sale and discontinued operations as of December 31, 2022[126](index=126&type=chunk)[127](index=127&type=chunk) [Consolidated Results of Operations](index=28&type=section&id=Consolidated%20Results%20of%20Operations) Net income attributable to A&B shareholders increased in Q2 and H1 2023 due to the non-recurrence of a prior-year pension termination loss, while operating income decreased due to a non-recurring asset disposal gain Consolidated Financial Results - Q2 2023 vs. Q2 2022 (in millions) | Metric | Q2 2023 | Q2 2022 | Change $ | Change % | | :--- | :--- | :--- | :--- | :--- | | Operating revenue | $53.1 | $51.1 | $2.0 | 3.9% | | Operating income | $16.2 | $66.2 | ($50.0) | (75.5)% | | Net income attributable to A&B | $13.4 | $4.1 | $9.3 | 2X | | Diluted EPS | $0.18 | $0.05 | $0.13 | 3X | Consolidated Financial Results - H1 2023 vs. H1 2022 (in millions) | Metric | H1 2023 | H1 2022 | Change $ | Change % | | :--- | :--- | :--- | :--- | :--- | | Operating revenue | $103.5 | $110.3 | ($6.8) | (6.2)% | | Operating income | $30.4 | $83.4 | ($53.0) | (63.5)% | | Net income attributable to A&B | $18.7 | $14.6 | $4.1 | 28.1% | | Diluted EPS | $0.26 | $0.20 | $0.06 | 30.0% | - The significant decrease in Q2 and H1 operating income was primarily due to a **$54.0 million** gain on the disposal of non-core assets in 2022, which did not recur in 2023[133](index=133&type=chunk)[138](index=138&type=chunk) - The increase in net income was driven by a pension termination loss of **$73.7 million** in Q2 2022 and **$76.9 million** in H1 2022 that did not recur in 2023[134](index=134&type=chunk)[139](index=139&type=chunk) [Analysis of Operating Revenue and Profit by Segment](index=32&type=section&id=Analysis%20of%20Operating%20Revenue%20and%20Profit%20by%20Segment) The Commercial Real Estate (CRE) segment experienced revenue and profit growth driven by higher rents and strong leasing, while Land Operations results were volatile due to asset sales and prior-year charges Commercial Real Estate Financial Results - Q2 2023 vs. Q2 2022 (in millions) | Metric | Q2 2023 | Q2 2022 | Change $ | Change % | | :--- | :--- | :--- | :--- | :--- | | Operating revenue | $49.5 | $46.0 | $3.5 | 7.6% | | Operating profit | $22.7 | $19.3 | $3.4 | 17.6% | | Net Operating Income (NOI) | $31.3 | $29.8 | $1.5 | 5.0% | | Same-Store NOI | $31.1 | $29.8 | $1.3 | 4.6% | - In Q2 2023, the company signed 72 leases for improved properties, covering 220,100 sq. ft., achieving an average rent spread of **5.8%** on comparable leases[151](index=151&type=chunk)[153](index=153&type=chunk) Portfolio Occupancy as of June 30 | Occupancy Type | 2023 | 2022 | Basis Point Change | | :--- | :--- | :--- | :--- | | Leased Occupancy | 94.4% | 94.6% | (20) | | Physical Occupancy | 93.5% | 93.7% | (20) | | Economic Occupancy | 92.4% | 92.6% | (20) | - Land Operations Q2 2023 operating profit was **$1.7 million**, primarily from unimproved land sales. This compares to a Q2 2022 operating loss of **$7.5 million**, which was impacted by a **$54.0 million** asset sale gain and a **$59.9 million** pension termination charge[166](index=166&type=chunk)[167](index=167&type=chunk)[168](index=168&type=chunk) [Use of Non-GAAP Financial Measures](index=37&type=section&id=Use%20of%20Non-GAAP%20Financial%20Measures) The company uses non-GAAP measures like FFO, Core FFO, and NOI to evaluate performance, with Core FFO and CRE NOI showing increases in Q2 2023 - The company uses FFO, Core FFO, and NOI as supplemental measures to evaluate operating performance, consistent with real estate industry practices[173](index=173&type=chunk)[177](index=177&type=chunk) FFO and Core FFO Reconciliation Summary (in millions) | Metric | Q2 2023 | Q2 2022 | H1 2023 | H1 2022 | | :--- | :--- | :--- | :--- | :--- | | Net Income available to A&B | $13.3 | $4.0 | $18.6 | $14.5 | | **FFO** | **$19.8** | **$14.6** | **$38.4** | **$33.4** | | Adjustments for non-core items | $1.5 | $5.9 | $4.1 | $7.9 | | **Core FFO** | **$21.3** | **$20.5** | **$42.5** | **$41.3** | Commercial Real Estate NOI Reconciliation Summary (in millions) | Metric | Q2 2023 | Q2 2022 | H1 2023 | H1 2022 | | :--- | :--- | :--- | :--- | :--- | | CRE Operating Profit | $22.7 | $19.3 | $43.6 | $40.0 | | Adjustments | $8.6 | $10.5 | $18.1 | $19.6 | | **NOI** | **$31.3** | **$29.8** | **$61.7** | **$59.6** | | **Same-Store NOI** | **$31.1** | **$29.8** | **$61.5** | **$59.5** | [Liquidity and Capital Resources](index=41&type=section&id=Liquidity%20and%20Capital%20Resources) The company's liquidity is sourced from operating cash flows, cash on hand, and its revolving credit facility, deemed sufficient to meet obligations, with compliance to financial covenants - Principal sources of liquidity are cash from operations, available cash, and borrowing capacity under its credit facility[186](index=186&type=chunk) - As of June 30, 2023, the company had **$8.2 million** in cash and cash equivalents and **$432.9 million** of available capacity on its A&B Revolver[194](index=194&type=chunk) - For H1 2023, cash used in investing activities was **$13.8 million**, primarily for a **$9.5 million** industrial property acquisition and **$7.2 million** in other capex. Cash used in financing was **$15.9 million**, driven by **$48.2 million** in dividends, offset by **$54.0 million** in net borrowings on the revolver[196](index=196&type=chunk)[198](index=198&type=chunk)[199](index=199&type=chunk) - The company was in compliance with its financial covenants as of June 30, 2023[187](index=187&type=chunk) [Other Matters](index=44&type=section&id=Other%20Matters) This section discusses critical accounting estimates, particularly the classification of the Grace Disposal Group as held for sale, a strategic shift materially affecting future operations - The classification of the Grace Disposal Group as 'held for sale' involves significant management judgment regarding the probability and timing of a sale[205](index=205&type=chunk)[207](index=207&type=chunk) - The planned sale of the Grace Disposal Group is considered a strategic shift that will have a major effect on the Company's operations and financial results, leading to its classification as a discontinued operation[208](index=208&type=chunk) [Quantitative and Qualitative Disclosures About Market Risk](index=46&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) There have been no material changes in the company's quantitative and qualitative disclosures about market risk since December 31, 2022 - There have been no material changes in the quantitative and qualitative disclosures about market risk since December 31, 2022[211](index=211&type=chunk) [Controls and Procedures](index=46&type=section&id=Item%204.%20Controls%20and%20Procedures) Management concluded that the company's disclosure controls and procedures were effective as of June 30, 2023, with no material changes to internal control over financial reporting - The CEO and CFO concluded that the Company's disclosure controls and procedures were effective as of June 30, 2023[212](index=212&type=chunk) - There were no material changes in the Company's internal control over financial reporting during the fiscal second quarter[213](index=213&type=chunk) PART II. OTHER INFORMATION [Legal Proceedings](index=47&type=section&id=Item%201.%20Legal%20Proceedings) This section incorporates by reference legal proceedings information from Note 8, primarily concerning ongoing litigation related to East Maui water rights - Information regarding legal proceedings is incorporated by reference from Note 8 of the financial statements[215](index=215&type=chunk) - The primary legal contingencies relate to ongoing disputes over water licenses and revocable permits for East Maui, involving parties such as the Sierra Club and the State Board of Land and Natural Resources (BLNR)[70](index=70&type=chunk)[71](index=71&type=chunk)[76](index=76&type=chunk) [Risk Factors](index=47&type=section&id=Item%201A.%20Risk%20Factors) There have been no material changes to the risk factors previously disclosed in the company's most recent Annual Report on Form 10-K - There have been no material changes to the risk factors previously disclosed in the Company's most recent annual report on Form 10-K[216](index=216&type=chunk) [Unregistered Sales of Equity Securities and Use of Proceeds](index=47&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) The company did not sell any unregistered equity securities or repurchase shares during the quarter, with **$145.4 million** remaining available under the stock repurchase program - No unregistered equity securities were sold during the period[217](index=217&type=chunk) - No shares were repurchased during the quarter ended June 30, 2023[217](index=217&type=chunk) - As of June 30, 2023, **$145.4 million** remains available under the stock repurchase program, which is authorized through December 31, 2023[217](index=217&type=chunk) [Mine Safety Disclosures](index=47&type=section&id=Item%204.%20Mine%20Safety%20Disclosures) Information concerning mine safety disclosures, as required by the Dodd-Frank Act, is included in Exhibit 95 of this Form 10-Q report - Information concerning mine safety disclosures is included in Exhibit 95 to this Form 10-Q[218](index=218&type=chunk) [Exhibits](index=48&type=section&id=Item%206.%20Exhibits) This section lists the exhibits filed with the Form 10-Q, including material contracts, CEO and CFO certifications, mine safety disclosures, and the Interactive Data File - The Exhibit Index lists all documents filed with the report, including CEO/CFO certifications and the Inline XBRL data[220](index=220&type=chunk)[221](index=221&type=chunk)

Alexander & Baldwin, Inc. (NYSE:ALEX) Q1 2023 Earnings Conference Call May 4, 2023 5:00 PM ET Company Participants Steve Swett - IR Chris Benjamin - CEO Lance Parker - President and COO Clayton Chun - CFO Conference Call Participants Alexander Goldfarb - Piper Sandler Mitch Germain - JMP Securities Operator Good afternoon, and welcome to the Alexander Baldwin First Quarter 2023 Earnings Conference Call. All participants will be in a listen-only mode for the duration of the call. [Operator Instructions]. Ple ...

UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 10-Q ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended March 31, 2023 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from ______________________ to _________________ Commission file number 001-35492 ALEXANDER & BALDWIN, INC. (Exact name of registrant as specified in its charter) Hawaii 45-4 ...

Financial Data and Key Metrics Changes - For Q4 2022, the company reported income from continuing operations available to shareholders of $16.2 million or $0.22 per diluted share, with fourth quarter FFO at $25.3 million or $0.35 per diluted share, and core FFO at $22.2 million or $0.31 per diluted share [19][20] - For the full year 2022, income from continuing operations available to shareholders was $36.9 million or $0.50 per diluted share, with FFO at $73.4 million or $1.01 per diluted share, and core FFO at $82.2 million or $1.13 per diluted share [19][20] - Core FFO increased 18.3% year-over-year, and core FFO per share was up 17.7% [8] Business Line Data and Key Metrics Changes - Commercial real estate revenue grew 7.5% year-over-year, with Same-Store NOI increasing by 6% [8] - In Q4 2022, CRE revenue was up 4.8% year-over-year, and NOI increased by 1.3% [13][20] - The company executed 61 leases for approximately 130,000 square feet during Q4, achieving spreads of 3.2% for new leases and 5.7% for renewal leases [15][20] Market Data and Key Metrics Changes - Domestic visitor arrivals in Hawaii exceeded pre-pandemic levels for each month of 2022, with international visitors returning to approximately 50% of 2019 levels [10] - The unemployment rate in Hawaii was 3.2% in December 2022, below the national rate of 3.5% [10] Company Strategy and Development Direction - The company is focused on simplifying its business model by exiting the Grace Pacific operation, which has been classified as a discontinued operation [7][21] - The management is pursuing acquisition opportunities that complement the current portfolio while also focusing on internal growth through development and redevelopment projects [17] - The company aims to strengthen its ESG programs and enhance disclosures to shareholders, including renewable energy projects [12] Management Comments on Operating Environment and Future Outlook - Management noted that while there are economic headwinds, the portfolio is primarily needs-based and has lower exposure to at-risk tenants [41] - The company expects to continue seeing top-line growth for tenants despite potential cost pressures [42] - Guidance for full-year 2023 core FFO is projected between $1.08 to $1.13 per share, reflecting anticipated Same-Store NOI growth [24] Other Important Information - The company raised its quarterly cash dividend three times during the year, from $0.18 to $0.22 per share [9] - The balance sheet remains strong, with a debt-to-total market capitalization ratio of 25.8% at year-end [9][22] Q&A Session Summary Question: Comments on Grace Pacific exit and cash recycling - Management indicated that while there is some cash expected to be redeployed from the Grace exit, it will not be a significant amount [27][28] Question: Guidance for core FFO and differences from NAREIT - Management clarified that the guidance provided is considered clean and reflects all anticipated one-time costs, including executive transition expenses [29][31] Question: Retail sector exposure to economic headwinds - Management stated that their portfolio is more needs-based and has lower exposure to at-risk tenants, with ongoing conversations with tenants indicating increased sales despite cost pressures [41][42] Question: Capital allocation priorities - Management emphasized a disciplined approach to capital allocation, focusing on opportunities that are accretive across retail, industrial, and ground lease sectors [44][45]

Part I [Item 1. Business](index=4&type=section&id=Item%201.%20Business) Alexander & Baldwin (A&B) is a Hawai'i-focused REIT managing a large commercial real estate portfolio and simplifying its business by divesting non-core assets - A&B is a Hawai'i-based REIT owning 22 retail centers, 12 industrial assets, and four office properties, totaling **3.9 million square feet** of gross leasable area (GLA)[10](index=10&type=chunk) - The company's core business objectives are: growing the **Commercial Real Estate portfolio**, maintaining **balance sheet strength**, and completing its **strategic simplification** by divesting the Grace Disposal Group (Grace Pacific and Maui Quarries)[11](index=11&type=chunk) - The company operates two reportable segments: **Commercial Real Estate**, which focuses on owning, operating, and leasing real estate assets, and **Land Operations**, which includes legacy landholdings subject to monetization[19](index=19&type=chunk) - As of December 31, 2022, the **Grace Disposal Group** was classified as held for sale and **discontinued operations**, leading to the elimination of the former Materials and Construction (M&C) segment[20](index=20&type=chunk) - As of December 31, 2022, the company had **144 regular full-time employees** in its continuing operations, a **decrease from 168** in the prior year[24](index=24&type=chunk) - The company is advancing its **ESG initiatives**, including converting common area lighting to LED at 17 properties, installing a **1.3-megawatt photovoltaic system** at its largest retail asset, and adding electric vehicle (EV) charging stations[32](index=32&type=chunk)[33](index=33&type=chunk) [Item 1A. Risk Factors](index=9&type=page&id=Item%201A.%20Risk%20Factors) The company faces significant risks including maintaining REIT status, Hawai'i's economic concentration, rising interest rates, tenant bankruptcies, and water shortages impacting land operations - Risks to REIT Status: The company may fail to maintain its **REIT qualification** due to complex tax provisions Additionally, potential legislative changes in Hawai'i could eliminate the REIT dividends paid deduction for state income tax purposes, leading to **double taxation**[44](index=44&type=chunk)[45](index=45&type=chunk)[47](index=47&type=chunk) - General Business Risks: The company's business is **concentrated in Hawai'i**, making it vulnerable to local economic downturns It faces challenges in disposing of **illiquid non-strategic assets** and may not successfully complete the sale of its **Grace Disposal Group**[61](index=61&type=chunk)[64](index=64&type=chunk)[65](index=65&type=chunk) - Financial Risks: **Rising interest rates** could increase interest expenses and **decrease the value** of the real estate portfolio The phase-out of LIBOR may also lead to less favorable financing terms[69](index=69&type=chunk)[70](index=70&type=chunk) - Commercial Real Estate Risks: The business is exposed to **tenant bankruptcies**, the shift from brick-and-mortar to **online retail**, and the risk of **co-tenancy provisions** that could allow other tenants to reduce rent or terminate leases if an anchor tenant vacates[88](index=88&type=chunk)[92](index=92&type=chunk)[93](index=93&type=chunk) - Land Operations Risks: A **lack of sufficient water** for agricultural irrigation could trigger **financial obligations** related to the 2018 sale of Maui agricultural land to Mahi Pono[104](index=104&type=chunk) [Item 1B. Unresolved Staff Comments](index=23&type=section&id=Item%201B.%20Unresolved%20Staff%20Comments) The company reported that it has no unresolved staff comments from the Securities and Exchange Commission - None[107](index=107&type=chunk) [Item 2. Description of Properties by Segment](index=24&type=section&id=Item%202.%20Description%20of%20Properties%20by%20Segment) The company's portfolio as of December 31, 2022, includes 3.9 million square feet of CRE properties with 95.0% occupancy and 4,168 acres in Land Operations Commercial Real Estate Improved Property Portfolio by GLA (SF) | Asset Class | GLA (Square Feet) | | :--- | :--- | | Retail | 2,503,700 | | Industrial | 1,255,200 | | Office | 145,700 | | **Total** | **3,904,600** | - The leased occupancy for the improved properties portfolio was **95.0%** as of December 31, 2022, an **increase from 94.3%** as of December 31, 2021[110](index=110&type=chunk) - The company's portfolio of commercial ground leases totaled **140.7 acres** with a current Annualized Base Rent (ABR) of **$18.8 million**[115](index=115&type=chunk)[116](index=116&type=chunk) - The Land Operations segment holds **4,168 acres** of real estate investments with a total carrying value of **$75.5 million**[118](index=118&type=chunk) - The primary active development-for-sale project within the Land Operations segment is **Maui Business Park II**, where the company sold **4.9 acres** in 2022[120](index=120&type=chunk) [Item 3. Legal Proceedings](index=27&type=section&id=Item%203.%20Legal%20Proceedings) This section incorporates by reference the information on legal proceedings and other contingencies detailed in Note 10 of the Notes to Consolidated Financial Statements - Information regarding legal proceedings is incorporated by reference from Note 10 – Commitments and Contingencies of Notes to Consolidated Financial Statements[122](index=122&type=chunk) [Item 4. Mine Safety Disclosures](index=27&type=section&id=Item%204.%20Mine%20Safety%20Disclosures) This section incorporates by reference the information concerning mine safety violations required by the Dodd-Frank Act, which is included in Exhibit 95 of the annual report - Information concerning mine safety disclosures is included in Exhibit 95 to this Annual Report on Form 10-K[123](index=123&type=chunk) Part II [Item 5. Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities](index=28&type=section&id=Item%205.%20Market%20for%20Registrant%27s%20Common%20Equity%2C%20Related%20Stockholder%20Matters%20and%20Issuer%20Purchases%20of%20Equity%20Securities) Alexander & Baldwin's common stock (ALEX) is listed on the NYSE, with the company maintaining REIT status and an active $150 million stock repurchase program - The company's Board of Directors reauthorized a stock repurchase program of up to **$150 million**, effective from January 1, 2022, to December 31, 2023[128](index=128&type=chunk) Q4 2022 Stock Repurchase Activity | Period | Total Shares Purchased | Average Price Paid per Share ($) | Approximate Value Remaining ($ thousands) | | :--- | :--- | :--- | :--- | | Oct 1-31, 2022 | 80,960 | $16.95 | $145,400 | | Nov 1-30, 2022 | — | $— | $145,400 | | Dec 1-31, 2022 | — | $— | $145,400 | | **Total** | **80,960** | **$16.95** | **$145,400** | [Item 6. Reserved](index=29&type=section&id=Item%206.%20Reserved) This item is reserved and contains no information - None [Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=30&type=section&id=Item%207.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) In 2022, A&B reported a net loss of $50.6 million, primarily due to pension termination and discontinued operations impairment, despite strong CRE segment performance and adequate liquidity [Business Overview](index=31&type=section&id=Business%20Overview) This section outlines the company's CRE and Land Operations segments, its simplification strategy, the classification of Grace Disposal Group as discontinued operations, and the 2022 pension plan termination - The company's simplification strategy led to the classification of the **Grace Disposal Group** (Grace Pacific and Maui Quarries) as held for sale and **discontinued operations** as of December 31, 2022[140](index=140&type=chunk) - In 2022, the company sold approximately **18,900 acres** of land on Kauai and its interest in McBryde Resources, Inc. for **$76.0 million**, recognizing a net gain of **$54.0 million**[140](index=140&type=chunk) - The company completed the termination of its **Defined Benefit Pension Plans** in June 2022, making cash contributions of **$28.7 million** and recording a pre-tax settlement charge of **$76.9 million**[142](index=142&type=chunk) [Consolidated Results of Operations](index=33&type=section&id=Consolidated%20Results%20of%20Operations) For 2022, A&B reported a net loss of $50.6 million, a significant decline from 2021, primarily due to a $76.9 million pension charge and an $86.6 million loss from discontinued operations Consolidated Results of Operations (2022 vs. 2021) | Metric (in millions) | 2022 | 2021 | Change | Change (%) | | :--- | :--- | :--- | :--- | :--- | | Operating Revenue | $230.5 | $254.0 | $(23.5) | (9.3)% | | Operating Income | $115.7 | $85.4 | $30.3 | 35.5% | | Income from Continuing Operations | $37.1 | $75.4 | $(38.3) | (50.8)% | | Loss from Discontinued Operations | $(86.6) | $(39.6) | $(47.0) | (118.7)% | | Net Income (Loss) Attributable to A&B | $(50.6) | $35.4 | $(86.0) | NM | - A pension termination loss of **$76.9 million** was recorded in 2022 due to the settlement of the company's Defined Benefit Plans[147](index=147&type=chunk) - The loss from discontinued operations increased significantly to **$86.6 million** in 2022, primarily due to an **$89.8 million impairment charge** related to the Grace Disposal Group's classification as held for sale[148](index=148&type=chunk) [Analysis of Operating Revenue and Profit by Segment](index=36&type=section&id=Analysis%20of%20Operating%20Revenue%20and%20Profit%20by%20Segment) The CRE segment's operating revenue increased 7.5% to $187.2 million and profit grew 12.3% to $81.5 million, while Land Operations revenue declined to $43.3 million, resulting in a $1.4 million operating loss [Liquidity and Capital Resources](index=43&type=section&id=Liquidity%20and%20Capital%20Resources) The company maintains strong liquidity with $33.3 million cash and $486.9 million available on its credit facility, despite a decrease in operating cash flow to $67.2 million in 2022 - As of December 31, 2022, the company had **$33.3 million** in cash and cash equivalents and **$486.9 million** of available capacity on its **$500 million** revolving credit facility[199](index=199&type=chunk) - Cash flows from continuing operations provided by operating activities **decreased by $50.9 million** to **$67.2 million** for the year ended December 31, 2022, largely driven by cash contributions related to the termination of the company's Defined Benefit Plans[196](index=196&type=chunk) - For 2023, the company anticipates capital expenditures between **$50.0 million and $60.0 million**, with the majority allocated to the Commercial Real Estate segment[204](index=204&type=chunk) - The company acknowledges that **high inflation** in 2022 increased construction and operating costs, though this impact is partially mitigated by lease structures that pass through operating expenses to tenants[209](index=209&type=chunk) [Critical Accounting Estimates](index=46&type=section&id=Critical%20Accounting%20Estimates) Impairment of long-lived assets is a critical accounting estimate, leading to a $5.0 million charge in Land Operations and an $89.8 million charge for the Grace Disposal Group in 2022 - **Impairment of long-lived assets** is a **critical accounting estimate** due to the high degree of subjectivity in assumptions about future cash flows and fair value[213](index=213&type=chunk) - In 2022, the company recorded impairment charges of **$5.0 million** for its Land Operations segment (continuing operations) and **$89.8 million** for the Grace Disposal Group (discontinued operations)[213](index=213&type=chunk)[214](index=214&type=chunk) [Item 7A. Quantitative and Qualitative Disclosures About Market Risk](index=47&type=section&id=Item%207A.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) The company's primary market risk is interest rate exposure from borrowing, managed through fixed and variable-rate debt and interest rate swaps - The company's main market risk is **interest rate risk**, managed through a mix of fixed and variable-rate debt and interest rate swaps[217](index=217&type=chunk) Debt Composition as of December 31, 2022 | Debt Type | Principal Amount (in millions) | | :--- | :--- | | Fixed-rate debt (after swaps) | $460.4 | | Variable-rate debt | $12.0 | [Item 8. Financial Statements and Supplementary Data](index=49&type=section&id=Item%208.%20Financial%20Statements%20and%20Supplementary%20Data) This section presents the company's audited consolidated financial statements for 2022, with an unqualified auditor opinion, detailing assets, liabilities, and net loss [Report of Independent Registered Public Accounting Firm](index=50&type=section&id=Report%20of%20Independent%20Registered%20Public%20Accounting%20Firm) Deloitte & Touche LLP issued an unqualified opinion on A&B's financial statements, identifying the classification of Grace Pacific as a critical audit matter - The auditor, Deloitte & Touche LLP, provided an **unqualified opinion**, stating the financial statements are presented fairly in all material respects[224](index=224&type=chunk) - A **critical audit matter** was identified concerning the significant judgments made by management in classifying the Grace Pacific and Maui quarries as **'Held for Sale and Discontinued Operations'**[228](index=228&type=chunk)[230](index=230&type=chunk) [Consolidated Financial Statements](index=52&type=section&id=Consolidated%20Financial%20Statements) The consolidated financial statements show total assets of $1.79 billion and shareholders' equity of $1.04 billion, with a 2022 net loss of $50.6 million Consolidated Balance Sheet Highlights (as of Dec 31, 2022) | Account (in millions) | Amount | | :--- | :--- | | Total Assets | $1,787.3 | | Assets held for sale | $126.8 | | Total Liabilities | $743.6 | | Liabilities associated with assets held for sale | $81.0 | | Total A&B Shareholders' Equity | $1,035.7 | Consolidated Statement of Operations Highlights (Year Ended Dec 31, 2022) | Account (in millions) | Amount | | :--- | :--- | | Total Operating Revenue | $230.5 | | Income from Continuing Operations | $37.1 | | Loss from Discontinued Operations | $(86.6) | | Net Loss Attributable to A&B Shareholders | $(50.6) | [Notes to Consolidated Financial Statements](index=58&type=section&id=Notes%20to%20Consolidated%20Financial%20Statements) The notes detail accounting policies, including the reclassification of Grace Disposal Group, the $472.2 million debt portfolio, Maui water rights contingencies, and the pension plan termination impact [Item 9. Changes in and Disagreements With Accountants on Accounting and Financial Disclosure](index=96&type=section&id=Item%209.%20Changes%20in%20and%20Disagreements%20With%20Accountants%20on%20Accounting%20and%20Financial%20Disclosure) The company reported no changes in or disagreements with its accountants on any matter of accounting principles or practices, or financial statement disclosure - None[437](index=437&type=chunk) [Item 9A. Controls and Procedures](index=96&type=section&id=Item%209A.%20Controls%20and%20Procedures) Management, including the CEO and CFO, concluded that disclosure controls and internal control over financial reporting were effective as of December 31, 2022, affirmed by an unqualified audit report - The CEO and CFO concluded that the company's disclosure controls and procedures were **effective** as of December 31, 2022[438](index=438&type=chunk) - Management assessed the company's internal control over financial reporting as **effective** as of December 31, 2022, based on the COSO framework[441](index=441&type=chunk) - The independent registered public accounting firm, Deloitte & Touche LLP, issued an **unqualified audit report** on the company's internal control over financial reporting[441](index=441&type=chunk)[444](index=444&type=chunk) [Item 9B. Other Information](index=97&type=section&id=Item%209B.%20Other%20Information) The company reported no other information for this item - None[449](index=449&type=chunk) [Item 9C. Disclosure Regarding Foreign Jurisdictions That Prevent Inspections](index=97&type=section&id=Item%209C.%20Disclosure%20Regarding%20Foreign%20Jurisdictions%20That%20Prevent%20Inspections) This item is not applicable to the company - Not applicable[449](index=449&type=chunk) Part III [Item 10. Directors, Executive Officers and Corporate Governance](index=98&type=section&id=Item%2010.%20Directors%2C%20Executive%20Officers%20and%20Corporate%20Governance) This section provides information on directors and executive officers as of February 15, 2023, incorporating details on corporate governance from the 2023 Proxy Statement - Information about directors, the Audit Committee, and the Code of Ethics is incorporated by reference from the company's 2023 Annual Meeting of Shareholders Proxy Statement[451](index=451&type=chunk)[459](index=459&type=chunk) - Provides a list and brief biographies of the company's executive officers as of February 15, 2023[452](index=452&type=chunk)[453](index=453&type=chunk)[454](index=454&type=chunk) [Item 11. Executive Compensation](index=99&type=section&id=Item%2011.%20Executive%20Compensation) This section incorporates by reference information regarding executive and director compensation from the company's 2023 Proxy Statement - Information regarding executive compensation is incorporated by reference from the 'Executive Compensation' and 'Compensation of Directors' sections of the 2023 Proxy Statement[459](index=459&type=chunk) [Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters](index=99&type=section&id=Item%2012.%20Security%20Ownership%20of%20Certain%20Beneficial%20Owners%20and%20Management%20and%20Related%20Stockholder%20Matters) This section incorporates by reference information on security ownership by certain beneficial owners, directors, and executive officers from the company's 2023 Proxy Statement - Information regarding security ownership is incorporated by reference from the 'Shareholders' Security Ownership' section of the 2023 Proxy Statement[460](index=460&type=chunk) [Item 13. Certain Relationships and Related Transactions, and Director Independence](index=99&type=section&id=Item%2013.%20Certain%20Relationships%20and%20Related%20Transactions%2C%20and%20Director%20Independence) This section incorporates by reference information regarding certain relationships, related party transactions, and director independence from the company's 2023 Proxy Statement - Information regarding related transactions and director independence is incorporated by reference from the 'Election of Directors' and 'Relationships and Transactions' sections of the 2023 Proxy Statement[460](index=460&type=chunk) [Item 14. Principal Accounting Fees and Services](index=99&type=section&id=Item%2014.%20Principal%20Accounting%20Fees%20and%20Services) This section incorporates by reference information concerning fees paid to the principal accountant and the services provided, as detailed in the company's 2023 Proxy Statement - Information concerning principal accountant fees and services is incorporated by reference from the 'Ratification of Appointment of Independent Registered Public Accounting Firm' section of the 2023 Proxy Statement[460](index=460&type=chunk) Part IV [Item 15. Exhibits and Financial Statement Schedules](index=100&type=section&id=Item%2015.%20Exhibits%20and%20Financial%20Statement%20Schedules) This section lists the financial statements, schedules, and exhibits filed with the Form 10-K report, including financial statements from Item 8 and Schedule III - Lists the financial statements included in Item 8 of the report[461](index=461&type=chunk) - Includes Schedule III, which details the company's real estate holdings and accumulated depreciation as of December 31, 2022[464](index=464&type=chunk) - Provides a detailed list of all exhibits filed with the report, including material contracts, incentive plans, and required certifications[468](index=468&type=chunk) [Item 16. Form 10-K Summary](index=108&type=section&id=Item%2016.%20Form%2010-K%20Summary) The company did not provide a summary for this item - None[482](index=482&type=chunk)

Alexander & Baldwin, Inc. (NYSE:ALEX) Q3 2022 Earnings Conference Call November 3, 2022 5:00 PM ET Company Participants Steve Swett - Investor Relations Chris Benjamin - President and Chief Executive Officer Lance Parker - Chief Operating Officer Brett Brown - Chief Financial Officer Clayton Chun - Chief Accounting Officer Conference Call Participants Connor Mitchell - Piper Sandler Wendy Ma - Evercore Operator Good afternoon and welcome to the Third Quarter 2022 Alexander & Baldwin Earnings Conference Call ...

Alexander & Baldwin, Inc. (NYSE:ALEX) Q2 2022 Earnings Conference Call July 28, 2022 5:00 PM ET Company Participants Steve Swett - Investor Relations Chris Benjamin - President and Chief Executive Officer Lance Parker - Chief Operating Officer Brett Brown - Chief Financial Officer Clayton Chun - Chief Accounting Officer Conference Call Participants Alexander Goldfarb - Piper Sandler Sheila McGrath - Evercore ISI Operator Good day, and welcome to the Alexander & Baldwin Second Quarter 2022 Earnings Conferenc ...