Alexander & Baldwin(US:ALEX)2025-10-31 00:30Revenue and Income - Operating revenue for the third quarter of 2025 decreased by 18.9%, or $11.7 million, to $50.2 million, primarily due to lower revenues from the Land Operations segment's unimproved and development land sales[106]. - Net income for the third quarter of 2025 was $14.3 million, a decrease of 24.5% compared to $19.0 million in the same period of 2024[105]. - Funds From Operations (FFO) decreased by 24.2% to $21.4 million, compared to $28.2 million in the third quarter of 2024[105]. - Adjusted FFO decreased by 18.4% to $19.1 million, down from $23.4 million in the same period last year[105]. - Operating revenue for the nine months ended September 30, 2025, decreased by 10.6%, or $18.5 million, to $155.7 million, primarily due to lower revenues from the Land Operations segment[113]. - Net income for the nine months ended September 30, 2025, was $60.9 million, an increase of 26.6% compared to $48.1 million in 2024[112]. - For the nine months ended September 30, 2025, net income available to A&B common shareholders was $60.90 million, an increase from $48.08 million in 2024[156]. Expenses and Costs - Cost of operations decreased by 15.1%, or $4.9 million, to $27.6 million, mainly due to lower expenses related to unimproved and development land sales in the Land Operations segment[107]. - Selling, general, and administrative expenses decreased by 18.2%, or $1.4 million, to $6.1 million, attributed to lower professional services and personnel-related expenses[107]. - Cost of operations for the same period decreased by 10.4%, or $9.6 million, to $82.7 million, mainly due to lower costs associated with unimproved and development land sales[114]. - Selling, general, and administrative expenses decreased by 8.4%, or $1.8 million, to $20.1 million, primarily due to lower software, technology, and personnel-related expenses[116]. Gains and Other Income - The gain on commercial real estate transactions was $2.6 million, resulting from a tenant's exercise of a purchase option, leading to the derecognition of the associated real estate property[108]. - Gain on commercial real estate transactions was $6.7 million, attributed to two leases classified as sales-type leases[117]. - Gain on disposal of assets and settlements was $11.8 million, significantly higher than $2.1 million in the prior year, due to favorable contract modifications[118]. - Income related to joint ventures and partnerships decreased by $0.6 million to $1.6 million, primarily due to lower earnings from an unconsolidated investment in a materials company[109]. - Income related to joint ventures and partnerships increased by 87.9%, or $3.4 million, to $7.2 million, driven by higher income from a legacy real estate joint venture[119]. Occupancy and Leasing - Total leased occupancy increased to 95.6% as of September 30, 2025, up from 94.0% in the previous year, representing a 160 basis point improvement[131]. - Economic occupancy also improved to 94.3% from 93.0% year-over-year, reflecting a 130 basis point increase[133]. - The retail segment's leased occupancy improved to 95.5% in Q3 2025, up from 92.9% in Q3 2024, marking a 260 basis point increase[132]. - The industrial segment maintained a high leased occupancy of 97.5%, slightly up from 97.4% year-over-year[132]. - In Q3 2025, the Company signed 22 new leases covering 36,900 square feet at an average annual base rent of $41.73 per square foot, while 27 renewal leases covered 126,800 square feet at an average annual base rent of $14.02 per square foot[126][127]. - The average base rent for 6 comparable new leases decreased by 2.8% compared to expiring leases, while 19 comparable renewal leases saw a 7.4% increase[126]. Financial Position and Cash Flow - As of September 30, 2025, the Company had $422.5 million in fixed-rate debt and $53.0 million in variable-rate debt, with a total weighted average interest rate of 4.67%[164]. - The Company expects that funds generated from operating activities and available cash will be sufficient to meet its short-term and long-term business requirements[165]. - As of September 30, 2025, operating cash flows from continuing operations were $67.0 million, a decrease of $8.3 million from $75.4 million for the same period in 2024[172]. - The Company had cash on-hand of $17.3 million and $267.0 million of available capacity under its $450.0 million A&B Revolver as of September 30, 2025[173]. - Cash used in investing activities for continuing operations was $30.4 million for the nine months ended September 30, 2025, down from $40.8 million for the same period in 2024[175]. - Total capital expenditures for real estate were $36.9 million for the nine months ended September 30, 2025, compared to $41.6 million for the same period in 2024[177]. Shareholder Returns and Stock Activity - The Company repurchased 5,830 shares of its common stock for an aggregate purchase price of $0.1 million during the nine months ended September 30, 2025, with $99.9 million remaining under the stock repurchase program[179]. - Cash dividend payments totaled $49.3 million during the nine months ended September 30, 2025[177]. Economic and Market Conditions - The Federal Reserve lowered the federal funds target rate range by 0.25% in September 2025, which may impact the Company's financial condition and results of operations[182].