Alexander & Baldwin(US:ALEX)2025-02-28 02:11Financial Performance - Operating revenue for 2024 increased by 13.3%, or $27.8 million, to $236.6 million, primarily due to higher revenues from land sales in the Land Operations segment [162]. - Cost of operations for 2024 rose by 21.1%, or $22.5 million, to $129.0 million, mainly due to increased costs associated with land sales in the Land Operations segment [163]. - Net income for 2024 was $60.5 million, a significant increase of 83.7% compared to $33.0 million in 2023 [161]. - Income from continuing operations increased by 56.8%, or $23.2 million, to $64.0 million in 2024 [161]. - Funds From Operations (FFO) for 2024 was $100.0 million, up 26.0% from $79.4 million in 2023 [161]. - The Company reported a net income available to common shareholders of $60.5 million for 2024, up from $29.7 million in 2023, representing a 103% increase [198]. - Adjusted Funds from Operations (Adjusted FFO) increased to $80.1 million in 2024 from $63.6 million in 2023, marking a 26% growth [198]. - Same-store Net Operating Income (NOI) for 2024 was $126.4 million, up from $122.8 million in 2023, indicating a 3% increase [202]. Land Operations - The Company completed sales of approximately 430 acres of legacy land holdings for a total of $20.2 million in 2024, compared to 460 acres for $12.3 million in 2023 [158]. - Total Land Operations operating revenue increased significantly to $39.3 million in 2024 from $14.9 million in 2023, primarily due to land sales [187]. - Land Operations operating profit for 2024 was $18.9 million, compared to $10.8 million in 2023, driven by margins from land sales and equity earnings from joint ventures [188]. - The impairment of assets decreased significantly from $4.8 million in 2023 to $0.3 million in 2024, reflecting fewer abandoned projects [164]. Commercial Real Estate - Commercial Real Estate operating revenue increased by 1.7% to $197.4 million for the year ended December 31, 2024, compared to $193.9 million in 2023 [172]. - Operating profit for Commercial Real Estate rose by 10.1% to $89.4 million in 2024, up from $81.2 million in 2023 [172]. - Net Operating Income (NOI) for Commercial Real Estate was $127.5 million in 2024, a 3.4% increase from $123.3 million in 2023 [172]. - The Company signed 60 new leases covering 131,500 square feet with an average annual base rent of $27.45 per square foot, resulting in an 11.6% average base rent increase over comparable expiring leases [175]. Discontinued Operations - The Company reported a loss from discontinued operations of $3.5 million in 2024, an improvement from a loss of $7.8 million in 2023 [168]. - Cash flows from discontinued operations for the year ended December 31, 2024, included $4.1 million in operating activities and $15.0 million from investing activities related to the Grace Disposal Group [219]. Capital Expenditures and Investments - The Company expects short-term capital expenditures of $41.5 million over the next twelve months, with significant commitments including $19.7 million for tenant improvements [208]. - Cash used in investing activities for the year ended December 31, 2024, was $31.1 million, an increase from $27.6 million in 2023, with capital expenditures totaling $50.8 million, including a $29.8 million commercial real estate acquisition [215]. - Total capital expenditures for real estate in 2024 amounted to $50.7 million, compared to $31.1 million in 2023, with discretionary capital expenditures increasing from $15.4 million in 2023 to $32.8 million in 2024 [217]. - The Company expects capital expenditures for 2025, excluding potential acquisitions, to be approximately $60.0 million to $70.0 million, indicating a strategic focus on growth [217]. Liquidity and Debt Management - The Company has a liquidity source of $22.5 million in short-term contractual interest payments and $68.5 million in long-term payments [207]. - As of December 31, 2024, the Company had cash and cash equivalents of $33.4 million and $150.0 million of borrowings outstanding under its revolving credit facility, with $300.0 million of available capacity [213]. - The Company remains compliant with its financial covenants as of December 31, 2024, ensuring continued access to its credit facilities [204]. - The Company is exposed to interest rate changes due to its borrowing activities and manages this risk through a mix of fixed-rate and variable-rate debt, along with interest rate swaps [235]. - As of December 31, 2024, the Company has $455.2 million in fixed-rate debt and $20.0 million in variable-rate debt [236]. - The weighted average interest rate on remaining fixed-rate principal is projected to range from 4.63% to 6.09% over the next five years [238]. - The weighted average interest rate on remaining variable-rate principal is 5.48% for the next four years [238]. - The Company has three interest rate swap agreements with an average pay fixed rate of 4.37% and an average receive rate of 5.61% [238]. - The fair value of the interest rate derivatives for variable to fixed interest rate swaps is recorded as an asset of $1.4 million as of December 31, 2023 [238]. - The Company actively monitors economic conditions and their impact on interest rates to make informed decisions regarding its financial condition and liquidity [240]. Other Financial Metrics - Basic earnings per share for continuing operations increased by 57.1% to $0.88 in 2024, compared to $0.56 in 2023 [161]. - Cash flows from continuing operations rose to $102.1 million in 2024, an increase of $26.6 million from $75.5 million in 2023, primarily due to higher land sales [210]. - The Company collected $3.9 million in financing receivables related to prior years' land sales in 2024 [211]. - The Company differentiates capital expenditures into ongoing maintenance and discretionary categories, with ongoing maintenance expenditures totaling $15.1 million in 2024 [216]. - The Company has not sold any shares under its at-the-market equity distribution agreement, which allows for sales up to $200.0 million [214]. - The estimated exposure to interest rate risk is based on the expected remaining principal obligation as of December 31, 2024 [237]. - The estimated principal outstanding for variable-rate debt may vary from the amounts indicated due to actual market conditions [238].