Alexander & Baldwin(ALEX) - 2021 Q4 - Annual Report

PART I ITEM 1. BUSINESS A Hawai'i-focused commercial REIT operating in Commercial Real Estate, Land Operations, and Materials & Construction segments - A&B is a Hawai'i-focused commercial REIT, owning the largest grocery-anchored, neighborhood shopping center portfolio in the state[9] - The Company's strategy focuses on increasing recurring income from its CRE portfolio while monetizing non-core assets in Land Operations and M&C[12] - As of December 31, 2021, 79.8% of total consolidated assets are in the CRE segment, 6.4% in Land Operations, and 9.5% in Materials & Construction[10] - The Company had 611 regular full-time employees as of December 31, 2021, with approximately 48% covered by collective bargaining agreements[24] Commercial Real Estate Portfolio (as of December 31, 2021) | Asset Type | Number of Properties | Gross Leasable Area (GLA) | Land Under Ground Leases | | :----------- | :------------------- | :------------------------ | :----------------------- | | Retail Centers | 22 | 3.9 million sq ft | 143.4 acres | | Industrial Assets | 11 | | | | Office Properties | 4 | | | ITEM 1A. RISK FACTORS The company faces risks related to its REIT status, general business operations, and specific segment challenges - Risks related to REIT status include complex tax provisions, potential legislative changes, and the need to sell assets or borrow funds to meet distribution requirements[37][44][53] - General business risks include adverse economic conditions in Hawai'i, the ongoing impact of the COVID-19 pandemic, illiquidity of non-strategic assets, difficulties in obtaining capital, and potential non-compliance with regulations[39][66][71][79] - Commercial Real Estate segment risks involve declining rental income due to tenant bankruptcies, shifts to online shopping, inability to renew leases, and increased operating expenses[42][91][94][95][96] - Land Operations risks include construction and development challenges, regulatory restrictions on development and agricultural land use, and water availability issues[107][108][110][114] - Materials & Construction segment risks are tied to government funding for infrastructure, competitive market pressures, challenges in strategic monetization, community opposition to quarries, and volatility in fuel and raw material costs[120][121][122][123][137][138] ITEM 1B. UNRESOLVED STAFF COMMENTS There are no unresolved SEC staff comments regarding the Company's filings ITEM 2. DESCRIPTION OF PROPERTIES BY SEGMENT This section details the property portfolio across the Commercial Real Estate, Land Operations, and Materials & Construction segments - The improved properties portfolio maintained a Leased Occupancy of 94.3% as of December 31, 2021 and 2020[142] - The Land Operations segment has one active development-for-sale project: Maui Business Park (Phase II) in Kahului, Maui, with 116.7 planned saleable acres[153][154] - McBryde Resources, Inc. produced 25,723 MWH of hydroelectric power in 2021, selling 19,069 MWH to KIUC[155] - Grace Pacific operates a quarry in Makakilo, Oahu (200 acres of 542 owned), delivering 910,000 tons of rock in 2021, with permits through 2032[157] Commercial Real Estate GLA by Asset Class (as of December 31, 2021) | Asset Class | Current GLA (SF) | | :------------ | :--------------- | | Retail | 2,500,000 | | Industrial | 1,246,300 | | Office | 143,300 | | Total | 3,889,600 | Land Operations Landholdings by Type (as of December 31, 2021) | Land Type | Kauai (Acres) | Maui (Acres) | Oahu (Acres) | Total Acres | | :-------------------------------- | :------------ | :----------- | :----------- | :---------- | | Land used in other operations | — | 21 | 3 | 24 | | Urban Developable (full/partial infrastructure) | 2 | 116 | — | 118 | | Urban Developable (limited/no infrastructure) | 29 | 81 | — | 110 | | Urban Other | 1 | 17 | — | 18 | | Agriculture/Other | 6,152 | 4,296 | 75 | 10,523 | | Urban entitlement process | 260 | — | — | 260 | | Conservation & preservation | 12,487 | 355 | 509 | 13,351 | | Total Land Operations Landholdings | 18,931 | 4,886 | 587 | 24,404 | ITEM 3. LEGAL PROCEEDINGS Information regarding legal proceedings is incorporated by reference from Note 12 of the financial statements - Legal proceedings information is detailed in Note 12 of the financial statements[158] ITEM 4. MINE SAFETY DISCLOSURES Mine safety disclosures are provided in Exhibit 95 of this Annual Report - Mine safety disclosures are included in Exhibit 95 of the Form 10-K[159] PART II ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES This section covers stock market information, REIT distribution requirements, and the share repurchase program - A&B's common stock is traded on the NYSE under the ticker symbol ALEX[161] - As a REIT, A&B is generally required to distribute at least 90% of its REIT taxable income to shareholders[161] - The Board reauthorized a $150 million common stock repurchase program for January 1, 2022, through December 31, 2023, with no repurchases made in 2021 or 2020[166] Equity Compensation Plan Data (as of December 31, 2021) | Plan Category | Securities to be issued upon exercise of outstanding options, warrants and rights (a) | Weighted-average exercise price of outstanding options, warrants and rights (b) | Securities remaining available for future issuance (c) | | :--------------------------------------------- | :---------------------------------------------------------------------------------- | :------------------------------------------------------------------------------ | :----------------------------------------------------- | | Equity compensation plans approved by security holders | 0 | $0.00 | 965,840 | ITEM 6. RESERVED This item is reserved and contains no information ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS This section provides an in-depth review of financial condition, operating results, liquidity, and capital resources for 2021 and 2020 - Operating revenue increased by 24.2% ($74.0 million) to $379.3 million in 2021, primarily due to higher revenues from Land Operations and Commercial Real Estate[184] - Net income attributable to A&B shareholders increased significantly from $5.6 million in 2020 to $35.4 million in 2021[184] - Impairment of assets in 2021 was $26.1 million, primarily related to the Materials & Construction segment due to revised forecasts on future earnings and cash flows[186] - The Company expects to make cash contributions of $34 million to $48 million in 2022 to fully fund its Defined Benefit Plans and recognize pre-tax non-cash pension settlement charges of $80 million to $95 million[177] - Cash flows from operating activities increased by $62.4 million to $124.2 million in 2021, driven by CRE operations and non-core asset monetization in Land Operations[234] Consolidated Results of Operations (2021 vs. 2020) | Metric (in millions) | 2021 | 2020 | Change ($) | Change (%) | | :------------------- | :------ | :------ | :--------- | :--------- | | Operating revenue | $379.3 | $305.3 | $74.0 | 24.2% | | Cost of operations | $(254.1)| $(233.5)| $(20.6) | (8.8)% | | Operating income (loss) | $50.2 | $29.7 | $20.5 | 69.0% | | Net income (loss) attributable to A&B | $35.4 | $5.6 | $29.8 | 5X | | Basic EPS - continuing operations | $0.50 | $0.09 | $0.41 | 5X | | FFO | $70.0 | $45.1 | $24.9 | 55.2% | | Core FFO | $69.4 | $55.2 | $14.2 | 25.7% | Business Overview This overview details the Company's operating segments, strategic focus on simplification, and significant recent events - The Company is pursuing the simplification of its business, including ongoing efforts to accelerate the monetization of its non-commercial real estate assets, such as the Materials & Construction businesses[175] - In 2021, the Company completed real estate sales of approximately 1,800 acres for $41.3 million and nine Maui Business Park II lots for $16.0 million[175] - The Company's joint venture projects at Kukuiula completed the sale of substantially all assets for **$183.5 million** in November 2021, resulting in **$113.4 million cash distributions** and **$5.5 million joint venture income**[175](index=175&type=chunk) - The Board approved the termination of Defined Benefit Plans, effective May 31, 2021, expecting **$34 million to $48 million in cash contributions** and **$80 million to $95 million in pre-tax non-cash pension settlement charges** in 2022[177](index=177&type=chunk) Total Revenue Reductions (Increases) Related to Adjustments, Assessments and Provisions (in millions) | Category | 2021 | 2020 | | :-------------------------------------------------------------------- | :---- | :---- | | Other relief modifications and other adjustments | $7.5 | $6.4 | | Tenant collectability assessments and allowance for doubtful accounts | $(2.9) | $19.0 | | **Total revenue reductions (increases)** | **$4.6**| **$25.4**| [Consolidated Results of Operations](index=38&type=section&id=Consolidated%20Results%20of%20Operations) Consolidated results show a significant improvement in operating performance for 2021 compared to 2020 - Selling, general and administrative costs increased by **12.6% ($5.8 million)** to $51.9 million, mainly due to higher performance-based incentive compensation and new ERP system implementation costs[186](index=186&type=chunk) - Gain on disposal of assets, net, decreased from **$9.6 million** in 2020 (solar power facility sale) to **$3.0 million** in 2021 (residual land sale)[187](index=187&type=chunk) Consolidated Financial Performance (2021 vs. 2020) | Metric (in millions) | 2021 | 2020 | Change ($) | Change (%) | | :------------------- | :------ | :------ | :--------- | :--------- | | Operating revenue | $379.3 | $305.3 | $74.0 | 24.2% | | Cost of operations | $(254.1)| $(235.5)| $(18.6) | (7.9)% | | Selling, general and administrative | $(51.9) | $(46.1) | $(5.8) | (12.6)% | | Impairment of assets | $(26.1) | $(5.6) | $(20.5) | 4X | | Operating income (loss) | $50.2 | $29.7 | $20.5 | 69.0% | | Net income (loss) attributable to A&B | $35.4 | $5.6 | $29.8 | 5X | [Analysis of Operating Revenue and Profit by Segment](index=40&type=section&id=Analysis%20of%20Operating%20Revenue%20and%20Profit%20by%20Segment) This section provides a detailed breakdown of operating revenue and profit by segment [Commercial Real Estate](index=40&type=section&id=Commercial%20Real%20Estate) The Commercial Real Estate segment experienced a strong recovery in 2021, driven by improved rent collections and new developments - The increase in CRE revenue and profit was largely due to lower net bad debt and cash-basis charges, with revenue reductions from collectability assessments decreasing from **$25.4 million in 2020 to $4.6 million in 2021**[191](index=191&type=chunk) Commercial Real Estate Financial Results (2021 vs. 2020) | Metric (in millions) | 2021 | 2020 | Change ($) | Change (%) | | :------------------- | :----- | :----- | :--------- | :--------- | | Operating revenue | $173.2 | $150.0 | $23.2 | 15.5% | | Operating profit | $72.6 | $49.8 | $22.8 | 45.8% | | NOI | $110.7 | $94.3 | $16.4 | 17.4% | | Same-Store NOI | $107.8 | $91.9 | $15.9 | 17.3% | Leasing Activity (Year Ended December 31, 2021) | Asset Class | Leases Signed | GLA (SF) | ABR/SF | Rent Spread (Comparable Leases) | | :------------ | :------------ | :-------- | :-------- | :------------------------------ | | Retail | 185 | 310,263 | $38.93 | 5.2% | | Industrial | 68 | 304,191 | $14.99 | 4.1% | | Office | 18 | 36,141 | $36.62 | 3.0% | Improved Portfolio Occupancy Metrics (as of December 31) | Occupancy Type | 2021 | 2020 | Basis Point Change | | :--------------- | :---- | :---- | :----------------- | | Leased Occupancy | 94.3% | 94.3% | — | | Physical Occupancy | 93.8% | 93.5% | 30 | | Economic Occupancy | 92.2% | 92.9% | (70) | [Land Operations](index=42&type=section&id=Land%20Operations) The Land Operations segment saw a substantial increase in revenue and profit in 2021, driven by significant land monetization efforts - 2021 operating profit included **$20.4 million from joint ventures**, primarily from the Kukuiula projects[209] - 2020 operating profit included an $8.9 million gain from the sale of the solar power facility in Port Allen and a $6.7 million charge for estimated reservoir remediation costs[210] Land Operations Financial Results (2021 vs. 2020) | Metric (in millions) | 2021 | 2020 | | :------------------- | :----- | :----- | | Development sales revenue | $16.0 | $7.9 | | Unimproved/other property sales revenue | $41.3 | $9.7 | | Other operating revenue | $22.6 | $21.1 | | Total operating revenue | $79.9| $38.7| | Total operating profit (loss) | $55.4| $15.4| Materials & Construction The Materials & Construction segment reported an increased operating loss in 2021, driven by significant impairment charges - The 2021 operating loss was largely due to $26.1 million in goodwill and other asset impairment charges and a $2.9 million impairment of an equity method investment (Maui Paving)[212][359] - Backlog increased to $175.3 million at December 31, 2021, from $126.7 million in 2020, driven by an increase in marketed bid opportunities[215] Materials & Construction Financial Results (2021 vs. 2020) | Metric (in millions) | 2021 | 2020 | Change ($) | Change (%) | | :------------------- | :------ | :------ | :--------- | :--------- | | Operating revenue | $126.2 | $116.6 | $9.6 | 8.2% | | Operating costs and expenses | $(118.9)| $(106.8)| $(12.1) | (11.3)% | | Impairment of assets | $(26.1) | $(5.6) | $(20.5) | 4X | | Impairment of equity method investments | $(2.9) | — | $(2.9) | —% | | Income (loss) related to joint ventures | $(2.9) | $1.3 | $(4.2) | NM | | Operating profit (loss) | $(40.5)| $(10.5)| $(30.0)| 3X | | Backlog at period end | $175.3 | $126.7 | $48.6 | 38.4% | Use of Non-GAAP Financial Measures This section explains the use of non-GAAP measures like FFO, Core FFO, and NOI to provide additional insight into core operating results - FFO is a non-GAAP measure of operating performance for real estate companies, defined by Nareit, excluding depreciation, gains/losses from real estate sales, and impairment write-downs of real estate assets[216] - Core FFO is a non-GAAP measure relevant to the Company's core commercial real estate business, adjusting CRE operating profit for real estate depreciation/amortization, corporate expenses, and core business interest expense, while excluding non-recurring or infrequent items[217] - NOI is a non-GAAP measure used to evaluate the unlevered performance of the Commercial Real Estate portfolio, reflecting contract-based income and cash-based property-level expenses, excluding non-contractual revenue, non-cash expenses, and other non-property-related items[219][221] Reconciliation of Net Income (Loss) to FFO and Core FFO (in millions) | Metric | 2021 | 2020 | | :-------------------------------------------------------- | :---- | :---- | | Net income (loss) available to A&B common shareholders | $35.1 | $5.5 | | Depreciation and amortization of commercial real estate properties | $37.7 | $40.1 | | Gain on the disposal of commercial real estate properties, net | $(2.8)| $(0.5)| | FFO | $70.0| $45.1| | Exclude items not related to core business: | | | | Land Operations Operating Profit | $(55.4)| $(15.4)| | Materials & Construction Operating (Profit) Loss | $40.5 | $10.5 | | Loss from discontinued operations | $1.1 | $0.8 | | Income (loss) attributable to noncontrolling interest | $0.4 | $(0.4)| | Income tax expense (benefit) | — | $(0.4)| | Non-core business interest expense | $12.8 | $15.0 | | Core FFO | $69.4| $55.2| Liquidity and Capital Resources A&B's liquidity is primarily sourced from operating activities, cash reserves, and credit facilities - Cash provided by operating activities increased to $124.2 million in 2021, up from $63.1 million in 2020, due to improved CRE operations and non-core asset monetization[234] - As of December 31, 2021, the Company had $70.0 million in cash and cash equivalents and $448.9 million available capacity on its $500.0 million revolving credit facility (A&B Revolver), which was amended and extended to August 29, 2025[235] - In 2022, projected capital expenditures (excluding potential CRE acquisitions) are $47.0 million - $60.0 million, with $35.0 million - $43.0 million for CRE[240] - The Company uses §1031 and §1033 of the Code for tax-deferral treatment on qualifying real estate sales, with $0.8 million and $3.1 million, respectively, available for reinvestment as of December 31, 2021[242][243] Capital Expenditures by Segment (in millions) | Category | 2021 | 2020 | Change (%) | | :-------------------------------------------- | :---- | :---- | :--------- | | CRE property acquisitions, development and redevelopment | $27.2 | $9.7 | 180.4% | | Building/area improvements (Maintenance) | $9.9 | $6.0 | 65.0% | | Tenant space improvements (Maintenance) | $2.5 | $3.1 | (19.4)% | | Quarrying and paving | $6.3 | $4.5 | 40.0% | | Agribusiness and other | $7.6 | $1.8 | 322.2% | | Total capital expenditures | $53.5| $25.1| 113.1% | Critical Accounting Estimates This section highlights critical accounting estimates that require significant management judgment - Impairment of long-lived assets and finite-lived intangible assets is a critical accounting estimate, requiring significant judgment on future cash flows, economic conditions, and discount rates[248] - In 2021, the Company recorded $24.3 million in aggregate long-lived asset and finite-lived intangible asset impairment charges related to its Materials & Construction segment[248] New Accounting Pronouncements This section refers to Note 2 for a full description of the impact of recently issued accounting standards - The Company adopted ASC Topic 848, Reference Rate Reform, but does not expect its application to have a material effect on its financial position or results of operations[322] ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK A&B is exposed to interest rate risk from its borrowing activities, which it manages through a mix of debt and interest rate swaps - The Company manages interest rate risk through a balanced mix of fixed-rate and variable-rate debt, and interest rate swaps[252] - As of December 31, 2021, the Company had $532.9 million in fixed-rate debt (after swaps) and effectively zero variable-rate debt due to an interest rate swap on $50.0 million until February 2023[252] - The Company is monitoring the transition away from LIBOR and its potential impact on financing costs and availability[77][254] Debt Exposure to Interest Rate Risk (as of December 31, 2021, in millions) | Liability Type | 2022 | 2023 | 2024 | 2025 | 2026 | Thereafter | Fair Value | | :------------- | :---- | :---- | :---- | :---- | :---- | :--------- | :--------- | | Fixed-rate debt | $532.9| $502.8| $418.2| $261.2| $221.0| $152.1 | $554.3 | | Variable-rate debt | $— | $— | $50.0 | $50.0 | $— | $— | $— | ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA This section presents the Company's audited consolidated financial statements and the independent auditor's report - The financial statements include Consolidated Balance Sheets, Statements of Operations, Comprehensive Income (Loss), Cash Flows, and Equity for the years ended December 31, 2021, 2020, and 2019[256] - Deloitte & Touche LLP issued an unqualified opinion on the Company's financial statements and internal control over financial reporting as of December 31, 2021[258][259] - A critical audit matter identified was the assessment of held for sale and discontinued operations classification for the Materials & Construction businesses, due to significant judgments involved[262] Consolidated Balance Sheets The balance sheets provide a snapshot of A&B's financial position as of December 31, 2021, and 2020 - Investments in real estate joint ventures and partnerships decreased significantly from $134.1 million in 2020 to $8.8 million in 2021, reflecting the monetization of Kukuiula assets[268](index=268&type=chunk) - Notes payable and other debt decreased by **$154.4 million**, from $687.1 million in 2020 to $532.7 million in 2021[268](index=268&type=chunk) Consolidated Balance Sheet Highlights (in millions) | Asset/Liability/Equity | December 31, 2021 | December 31, 2020 | | :--------------------- | :---------------- | :---------------- | | Real estate investments, net | $1,533.1 | $1,667.0 | | Cash and cash equivalents | $70.0 | $57.2 | | Investments in real estate joint ventures and partnerships | $8.8 | $134.1 | | Other property, net | $83.5 | $110.8 | | **Total assets** | **$1,879.8** | **$2,036.0** | | Notes payable and other debt | $532.7 | $687.1 | | Accrued pension and post-retirement benefits | $56.3 | $34.7 | | **Total liabilities** | **$806.3** | **$933.4** | | **Total A&B shareholders' equity** | **$1,066.6** | **$1,096.1** | [Consolidated Statements of Operations](index=54&type=section&id=Consolidated%20Statements%20of%20Operations) The statements of operations show a strong rebound in profitability for A&B in 2021 - Income (loss) related to joint ventures increased from **$5.9 million in 2020 to $17.5 million in 2021**[271](index=271&type=chunk) - Impairment of assets increased from **$5.6 million in 2020 to $26.1 million in 2021**[271](index=271&type=chunk) Consolidated Statements of Operations Summary (in millions) | Metric | 2021 | 2020 | 2019 | | :---------------------------------------- | :------ | :------ | :------ | | Commercial Real Estate Operating Revenue | $173.2 | $150.0 | $160.6 | | Land Operations Operating Revenue | $79.9 | $38.7 | $112.2 | | Materials & Construction Operating Revenue| $126.2 | $116.6 | $162.4 | | **Total operating revenue** | **$379.3**| **$305.3**| **$435.2**| | Operating Income (Loss) | $50.2 | $29.7 | $(14.3) | | Income (Loss) from Continuing Operations | $36.9 | $6.0 | $(36.9) | | **Net Income (Loss) Attributable to A&B Shareholders** | **$35.4**| **$5.6** | **$(36.4)**| | Basic EPS - Continuing Operations | $0.50 | $0.09 | $(0.49) | | Diluted EPS - Continuing Operations | $0.50 | $0.09 | $(0.49) | [Consolidated Statements of Comprehensive Income (Loss)](index=55&type=section&id=Consolidated%20Statements%20of%20Comprehensive%20Income%20(Loss)) These statements show a shift from a comprehensive loss in 2020 to a comprehensive income in 2021 - Actuarial losses from employee benefit plans significantly impacted other comprehensive income, with a loss of **$27.4 million in 2021**[273](index=273&type=chunk) Consolidated Statements of Comprehensive Income (Loss) Summary (in millions) | Metric | 2021 | 2020 | 2019 | | :---------------------------------------- | :---- | :---- | :----- | | Net Income (Loss) | $35.8 | $5.2 | $(38.4)| | Other Comprehensive Income (Loss), net of tax: | | | | | Unrealized interest rate hedging gain (loss) | $2.3 | $(6.9)| $(4.0) | | Actuarial gain (loss) | $(27.4)| $(7.7)| $5.3 | | **Other comprehensive income (loss), net of tax** | **$(20.7)**| **$(11.2)**| **$3.1**| | **Comprehensive Income (Loss)** | **$15.1**| **$(6.0)**| **$(35.3)**| [Consolidated Statements of Cash Flows](index=56&type=section&id=Consolidated%20Statements%20of%20Cash%20Flows) The cash flow statements indicate a strong increase in cash from operating and investing activities in 2021 - Cash provided by investing activities in 2021 included **$149.5 million from distributions of capital** and other receipts from investments in affiliates, primarily Kukuiula joint ventures[236][276] - Cash used in financing activities in 2021 included $159.2 million in net debt payments and $46.6 million in cash dividends paid[241][276] Consolidated Statements of Cash Flows Summary (in millions) | Cash Flow Activity | 2021 | 2020 | 2019 | | :-------------------------------------- | :------ | :------ | :------ | | Net cash provided by (used in) operations | $124.2 | $63.1 | $157.6 | | Net cash provided by (used in) investing activities | $96.5 | $12.0 | $(240.4)| | Net cash provided by (used in) financing activities | $(207.1)| $(33.1) | $(136.7)| | Net increase (decrease) in cash, cash equivalents and restricted cash | $13.6 | $42.0 | $(219.5)| | Balance, end of period | $71.0 | $57.4 | $15.4 | Consolidated Statements of Equity and Redeemable Noncontrolling Interest These statements show a decrease in total A&B shareholders' equity from 2020 to 2021 - Net income attributable to A&B shareholders was $35.4 million in 2021, contributing positively to equity[280] - Cash dividends paid were $49.2 million in 2021 ($0.67 per share), contributing to the increase in distributions in excess of accumulated earnings[280] Consolidated Statements of Equity and Redeemable Noncontrolling Interest Summary (in millions) | Metric | December 31, 2021 | December 31, 2020 | January 1, 2019 | | :---------------------------------------- | :---------------- | :---------------- | :-------------- | | Common stock - Stated Value | $1,810.5 | $1,805.5 | $1,793.4 | | Accumulated other comprehensive income (loss) | $(80.7) | $(60.0) | $(51.9) | | Distributions in excess of accumulated earnings | $(663.2) | $(649.4) | $(538.9) | | Total A&B shareholders' equity | $1,066.6 | $1,096.1 | $1,208.3 | | Redeemable Noncontrolling Interest | $6.9 | $6.5 | $7.9 | Notes to Consolidated Financial Statements The notes provide detailed explanations of accounting policies and financial statement line items 1. Background and Basis of Presentation This note describes A&B's business segments, basis of presentation, and principles of consolidation - A&B is a REIT operating in three segments: Commercial Real Estate, Land Operations, and Materials & Construction[282] - The Company consolidates entities where it has a controlling financial interest and uses the equity method for significant influence without control[283] - Segment reclassifications were made in Q1 2021, moving activity and results of Company-owned quarries from Land Operations to Materials & Construction, with historical periods restated[287][475] 2. Significant Accounting Policies This note details A&B's significant accounting policies for areas like real estate, acquisitions, revenue recognition, and goodwill - Real estate property is recorded at cost, net of accumulated depreciation, with development and redevelopment costs capitalized[288][290] - Acquisitions of real estate properties are generally accounted for as asset acquisitions, with purchase consideration allocated to tangible and identifiable intangible assets and liabilities based on fair value[291] - Revenue from Commercial Real Estate is recognized under lease accounting guidance, while Land Operations and Materials & Construction recognize revenue from contracts with customers, often using the percentage of completion method for construction contracts[307][308][309][312] - The Company adopted ASC 326 (Credit Losses) on January 1, 2020, and estimates allowances for credit losses at portfolio levels, factoring in historical losses, current conditions, and future forecasts[298] - Goodwill is reviewed for impairment annually or when circumstances change, using income and market approaches for fair value estimation[303][352] 3. Real Estate Property, Net and Other Property, Net This note provides a breakdown of the Company's real estate and other property assets - Total interest costs incurred were $26.6 million in 2021, with $0.3 million capitalized for development activities[325] - Depreciation expense for real estate property was $38.2 million in 2021[326] Real Estate Property, Net (in millions) | Category | 2021 | 2020 | | :------------------------ | :-------- | :-------- | | Land | $784.9 | $769.6 | | Buildings | $709.4 | $696.0 | | Other property improvements | $93.9 | $84.1 | | Subtotal | $1,588.2 | $1,549.7 | | Accumulated depreciation | $(180.5) | $(154.4) | | Real estate property, net | $1,407.7| $1,395.3| Other Property, Net (in millions) | Category | 2021 | 2020 | | :-------------------------------- | :---- | :---- | | Land | $38.3 | $39.3 | | Buildings | $13.4 | $18.5 | | Asphalt plants, machinery and equipment | $46.6 | $104.4| | Water, power and sewer systems | $21.0 | $19.7 | | Other property improvements | $6.2 | $6.4 | | Subtotal | $125.5| $188.3| | Accumulated depreciation | $(42.0)| $(77.5)| | Other property, net | $83.5| $110.8| 4. Acquisitions and Intangible Assets, Net This note details commercial real estate acquisitions and intangible assets - In 2021, A&B acquired two commercial real estate assets for $10.8 million, funded by proceeds from involuntary conversions under Code §1033[328] - Total intangible asset amortization expense was $12.2 million in 2021[335] Fair Value of Assets Acquired in 2021 (in millions) | Assets Acquired | Fair Value | | :---------------------- | :--------- | | Land | $8.8 | | Property and improvements | $2.0 | | Total assets acquired | $10.8 | Real Estate Intangible Assets, Net (in millions) | Category | 2021 | 2020 | | :---------------------------------- | :---- | :---- | | In-place leases | $124.8| $125.0| | Favorable leases | $29.0 | $29.0 | | Accumulated amortization of in-place leases | $(81.9)| $(73.8)| | Accumulated amortization of favorable leases | $(20.3)| $(18.3)| | Real estate intangible assets, net | $51.6| $61.9| 5. Investments in Affiliates This note details A&B's equity method investments, highlighted by the significant Kukuiula joint venture asset sale - The Kukuiula joint venture sold substantially all its assets for $183.5 million in November 2021, leading to $113.4 million cash distributions to A&B[337] - The Company's carrying value of investments in affiliates decreased from $169.6 million in 2020 to $39.3 million in 2021[338] Combined Assets and Liabilities of Equity Method Entities (in millions) | Category | 2021 | 2020 | | :---------------------- | :---- | :---- | | Current assets | $73.2 | $73.0 | | Non-current assets | $206.4| $688.0| | Total assets | $279.6| $761.0| | Current liabilities | $28.1 | $33.5 | | Non-current liabilities | $88.7 | $96.7 | | Total liabilities | $116.8| $130.2| Combined Operating Results of Equity Method Entities (in millions) | Metric | 2021 | 2020 | 2019 | | :------------------------------------ | :------ | :---- | :---- | | Revenues | $243.0 | $174.2| $191.9| | Operating costs and expenses | $214.2 | $147.1| $173.0| | Gross profit (loss) | $28.8 | $27.1 | $18.9 | | Income (loss) from Continuing Operations* | $(288.1)| $12.1 | $6.6 | | Net income (loss)* | $(288.3)| $11.6 | $6.6 | 6. Allowances and Other Reserves This note details the Company's allowances for credit losses and doubtful accounts - The Company adopted ASC 326 (Financial Instruments - Credit Losses) on January 1, 2020, reclassifying certain allowances to an allowance for credit losses[342] - The allowance for credit losses for financing receivables at December 31, 2021, primarily relates to two Land Operations assets, with one having a full allowance due to an estimated zero outcome of expected cash flows[345] Allowance and Reserve Accounts Activity (in millions) | Category | Balance at beginning of year (2020) | Additions/(Reductions) (2020) | Balance at end of year (2020) | | :---------------------------------------- | :---------------------------------- | :---------------------------- | :---------------------------- | | Reserve for cash basis tenants | $0.9 | $10.6 | $12.7 | | Allowance for doubtful accounts | $0.6 | $3.6 | $2.6 | | Allowance for credit losses - financing receivables | $— | $(0.4) | $3.9 | | Allowance for credit losses - contract assets | $— | $(0.9) | $0.7 | Allowance and Reserve Accounts Activity (in millions) | Category | Balance at beginning of year (2021) | Additions/(Reductions) (2021) | Balance at end of year (2021) | | :---------------------------------------- | :---------------------------------- | :---------------------------- | :---------------------------- | | Reserve for cash basis tenants | $12.7 | $(1.3) | $11.1 | | Allowance for doubtful accounts | $2.6 | $(1.7) | $0.8 | | Allowance for credit losses - financing receivables | $3.9 | $(1.4) | $2.5 | | Allowance for credit losses - contract assets | $0.7 | $(0.2) | $0.5 | 7. Inventories This note provides a breakdown of A&B's inventories, primarily related to the Materials & Construction segment Inventories (in millions) | Category | 2021 | 2020 | | :-------------------------------- | :---- | :---- | | Asphalt | $4.7 | $4.2 | | Processed rock and sand | $8.1 | $7.9 | | Work in progress | $3.6 | $3.2 | | Retail merchandise | $2.1 | $2.1 | | Parts, materials and supplies inventories | $1.8 | $1.0 | | Total | $20.3| $18.4| 8. Goodwill This note details the Company's goodwill balance and impairment testing - The Company's goodwill balance decreased from $10.5 million in 2020 to $8.7 million in 2021[349] - In 2021, a non-cash impairment charge of $1.8 million was recorded for the remaining M&C reporting unit's goodwill, based on a discounted cash flow analysis with a 13.0% discount rate[353][354] Changes in Carrying Amount of Goodwill by Segment (in millions) | Metric | Construction Materials & | Commercial Real Estate | Total | | :---------------------------------------- | :----------------------- | :--------------------- | :---- | | Balance, January 1, 2020 | $6.7 | $8.7 | $15.4 | | Gross amount of goodwill included in disposal | $(7.1) | — | $(7.1)| | Accumulated impairment losses included in disposal | $2.2 | — | $2.2 | | Balance, December 31, 2020 | $1.8 | $8.7 | $10.5 | | Impairment losses | $(1.8) | — | $(1.8)| | Balance, December 31, 2021 | $— | $8.7 | $8.7| 9. Fair Value Measurements This note outlines A&B's fair value measurements, categorized into a three-level hierarchy - Fair value of notes payable and other debt was $554.3 million (carrying amount $532.7 million) at December 31, 2021, estimated using discounted cash flow analysis (Level 3)[356] - Interest rate swaps are measured at fair value (Level 2), based on estimated termination amounts using interest rate pricing models and observable inputs[356][382] - Impairment charges of $26.1 million for goodwill/long-lived assets and $2.9 million for an equity method investment in 2021 were classified as Level 3 fair value measurements due to significant unobservable inputs[356][357] - The investment in Maui Paving was deemed other-than-temporarily impaired in 2021, resulting in a $2.9 million non-cash impairment charge[359] 10. Notes Payable and Other Debt This note details A&B's debt structure, which was significantly reduced in 2021 - The Kailua Town Center mortgage notes were repaid in full in September 2021[363] - The A&B Revolver was amended in August 2021, increasing commitments to $500.0 million and extending the term to August 29, 2025, with $448.9 million available capacity as of December 31, 2021[370] Notes Payable and Other Debt (in millions) | Debt Type | December 31, 2021 | December 31, 2020 | | :------------------------ | :---------------- | :---------------- | | Secured Debt | $197.8 | $218.1 | | Unsecured Debt | $285.1 | $358.2 | | Revolving Credit Facilities | $50.0 | $111.0 | | Total Debt (contractual)| $532.9 | $687.3 | | Total debt (carrying value) | $532.7 | $687.1 | Scheduled Debt Principal Payments (in millions) | Year | Secured Debt | Unsecured Debt | Revolving Credit Facilities | Total Principal | | :------------------------ | :----------- | :------------- | :-------------------------- | :-------------- | | 2022 | $6.0 | $24.1 | $— | $30.1 | | 2023 | $6.0 | $28.6 | $— | $34.6 | | 2024 | $135.0 | $22.0 | $— | $157.0 | | 2025 | $1.9 | $38.3 | $50.0 | $90.2 | | 2026 | $1.9 | $67.0 | $— | $68.9 | | Thereafter | $47.0 | $105.1 | $— | $152.1 | | Total Principal | $197.8 | $285.1 | $50.0 | $532.9 | 11. Derivative Instruments This note describes A&B's use of interest rate swaps to manage exposure to variable-rate debt - A&B uses interest rate swaps to manage its exposure to interest rate risk on variable-rate debt[375] - The pre-tax effect of derivative instruments recognized in OCI was a gain of $2.3 million in 2021, with a reclassification adjustment to interest expense of $1.6 million[379] - A non-designated interest rate swap matured on September 1, 2021, and generated $0.3 million in gains related to changes in fair value in 2021[382] Cash Flow Hedges of Interest Rate Risk (in millions) | Effective Date | Maturity Date | Fixed Interest Rate | Notional Amount at Dec 31, 2021 | Asset (Liability) Fair Value at Dec 31, 2021 | | :------------- | :------------ | :------------------ | :------------------------------ | :------------------------------------------- | | 4/7/2016 | 8/1/2029 | 3.14% | $56.3 | $(1.7) | | 2/13/2020 | 2/27/2023 | 3.15% | $50.0 | $(0.5) | 12. Commitments and Contingencies This note outlines A&B's financial commitments, guarantees, and ongoing legal proceedings - As of December 31, 2021, standby letters of credit totaled $1.1 million, and bonds for construction and real estate activities totaled $250.4 million, with a maximum remaining exposure of $61.2 million for construction obligations[383] - The Company provides bond indemnities and guarantees of indebtedness for certain unconsolidated affiliates, with no outstanding borrowings on guaranteed lines of credit as of December 31, 2021[383] - A&B is involved in legal proceedings, including a lawsuit by the Sierra Club challenging the renewal of East Maui water revocable permits, with a court decision pending on the continuation of permits[385][386][387] 13. Revenue and Contract Balances This note disaggregates A&B's revenue by segment and type, and provides information on contract balances - The Company has $62.0 million in deferred revenue related to performance obligations for the sale of agricultural land to Mahi Pono[392] - Total transaction price allocated to wholly unsatisfied or partially satisfied performance obligations was $140.5 million in 2021, with 65% to 75% expected to be recognized in 2022[393] Revenues by Segment and Type (in millions) | Revenues | 2021 | 2020 | 2019 | | :-------------------------------------- | :---- | :---- | :---- | | Commercial Real Estate | $173.2| $150.0| $160.6| | Land Operations: | | | | | Development sales revenue | $16.0 | $7.9 | $57.2 | | Unimproved/other property sales revenue | $41.3 | $9.7 | $32.4 | | Other operating revenue | $22.6 | $21.1 | $22.6 | | Total Land Operations | $79.9| $38.7| $112.2| | Materials & Construction | $126.2| $116.6| $162.4| | Total revenues | $379.3| $305.3| $435.2| Receivables, Contract Assets, and Contract Liabilities (in millions) | Category | 2021 | 2020 | | :------------------------------------------------ | :---- | :---- | | Accounts receivable and retention, net | $28.9 | $43.5 | | Costs and estimated earnings in excess of billings on uncompleted contracts | $10.4 | $2.3 | | Billings in excess of costs and estimated earnings on uncompleted contracts | $6.8 | $8.5 | | Variable consideration | $62.0 | $62.0 | | Other deferred revenue | $6.5 | $4.9 | 14. Leases - The Company As Lessor This note details A&B's activities as a lessor, primarily within its Commercial Real Estate segment - A&B provided rent relief to tenants due to COVID-19, accounting for eligible concessions outside the lease modification framework[396] - Contractual future lease payments to be received on non-cancelable operating leases totaled $947.5 million as of December 31, 2021[403] Impact of Revenue Reductions (Increases) Related to Tenant Collectability (in millions) | Category | 2021 | 2020 | | :-------------------------------------------------------------------- | :---- | :---- | | Total revenue reductions (increases) - tenant collectability assessments and allowance for doubtful accounts | $(2.9) | $19.0 | | Other relief modifications and other adjustments | $7.5 | $6.4 | | Total revenue reductions (increases) | $4.6| $25.4| Property Under Operating Leases, Net (in millions) | Category | 2021 | 2020 | | :-------------------------------- | :-------- | :-------- | | Leased property - real estate | $1,563.2 | $1,525.3 | | Less: Accumulated depreciation | $(182.2) | $(152.2) | | Property under operating leases, net | $1,381.0| $1,373.1| Total Rental Income (in millions) | Category | 2021 | 2020 | | :---------------------- | :---- | :---- | | Lease payments | $123.6| $113.7| | Variable lease payments | $56.0 | $39.3 | | Total rental income | $179.6| $153.0| 15. Leases - The Company As Lessee This note outlines A&B's lease arrangements as a lessee for land, office space, and equipment - Weighted-average remaining lease term for operating leases was 12.1 years, and for finance leases was 2.1 years, as of December 31, 2021[408] Lease Cost - Operating and Finance Leases (in millions) | Category | 2021 | 2020 | | :-------------------------------------- | :---- | :---- | | Operating lease cost | $4.8 | $4.6 | | Finance lease cost: | | | | Amortization of right-of-use assets | $1.3 | $1.2 | | Interest on lease liabilities | $0.1 | $0.1 | | Total lease cost | $6.2| $5.9| | Short-term lease cost | $0.9 | $0.6 | | Variable lease cost | $0.8 | $0.6 | Future Lease Payments (in millions) | Year | Operating Leases | Finance Leases | | :------------------------ | :--------------- | :------------- | | 2022 | $4.8 | $1.0 | | 2023 | $3.7 | $0.8 | | 2024 | $3.0 | $0.2 | | 2025 | $1.5 | — | | 2026 | $1.4 | — | | Thereafter | $12.0 | — | | Total lease payments | $26.4 | $2.0 | | Less: Interest | $(7.0) | $(0.1) | | Total lease liabilities | $19.4 | $1.9 | 16. Share-Based Payment Awards This note describes A&B's 2012 Incentive Compensation Plan and related stock unit activity - The 2012 Incentive Compensation Plan had 1.0 million shares remaining available for grants as of December 31, 2021[411] - As of December 31, 2021, $6.3 million of unrecognized compensation cost related to non-vested RSUs is expected to be recognized over a weighted-average period of 1.7 years[417] Non-Vested Restricted Stock Unit Activity (Year Ended December 31, 2021) | Metric | 2012 Plan Restricted Stock Units (thousands) | Weighted-Average Grant-date Fair Value | | :------------------------------------ | :------------------------------------------- | :------------------------------------- | | Outstanding, January 1, 2021 | 550.5 | $25.44 | | Granted | 376.6 | $16.63 | | Vested | (167.4) | $20.48 | | Canceled | (82.0) | $29.62 | | Outstanding, December 31, 2021 | 677.7 | $21.26 | Share-Based Expense (in millions) | Metric | 2021 | 2020 | 2019 | | :---------------------------------------- | :---- | :---- | :---- | | Time-based and market-based restricted stock units | $5.9 | $5.8 | $5.4 | | Total share-based expense | $5.9| $5.8| $5.4| 17. Employee Benefit Plans This note details A&B's employee benefit plans, including the termination of its Defined Benefit Plans - The Company is terminating its Defined Benefit Plans, effective May 31, 2021, expecting $34 million to $48 million in cash contributions and $80 million to $95 million in pre-tax non-cash pension settlement charges in 2022[177][425] - The pension plan assets are managed with a liability-driven investment strategy, weighted towards fixed income securities (98% in 2021)[429][430] - A&B contributed $3.9 million to multiemployer defined benefit pension plans in 2021 and $0.6 million to its 401(k) plans for matching contributions[447][448] Funded Status of Defined Benefit Plans (in millions) | Metric | 2021 | 2020 | | :------------------------------------ | :-------- | :-------- | | Pension Benefits: | | | | Benefit obligation at end of year | $227.2 | $218.7 | | Fair value of plan assets at end of year | $186.6 | $200.6 | | Funded Status (Recognized Liability) | $(40.6) | $(18.1) | | Other Post-retirement Benefits: | | | | Benefit obligation at end of year | $12.6 | $13.5 | | Funded Status (Recognized Liability) | $(12.6) | $(13.5) | | Non-qualified Plan Benefits: | | | | Benefit obligation at end of year | $3.1 | $3.1 | | Funded Status (Recognized Liability) | $(3.1) | $(3.1) | Net Periodic Benefit Cost (in millions) | Component of Net Periodic Benefit Cost | Pension Benefits (2021) | Other Post-retirement Benefits (2021) | Non-qualified Plan Benefits (2021) | | :------------------------------------- | :---------------------- | :------------------------------------ | :--------------------------------- | | Service cost | $(1.2) | $(0.1) | — | | Interest cost | $(5.1) | $(0.3) | — | | Expected return on plan assets | $5.0 | — | — | | Amortization of net loss | $(2.5) | — | $(0.1) | | Net periodic benefit cost | $(3.8) | $(0.4) | $(0.1) | 18. Income Taxes This note details A&B's income tax expense and deferred tax assets and liabilities - As a REIT, A&B is generally allowed a deduction for dividends paid and is not subject to federal corporate income tax on distributed taxable income[451] - The valuation allowance increased by $5.6 million in 2021 to $109.6 million, reflecting the Company's assessment that U.S. and state deferred tax assets are not more likely than not to be realized[457] - As of December 31, 2021, the Company had gross federal net operating loss carryforwards of $201.1 million and state NOLs of $204.8 million[456] Income Tax Expense (Benefit) from Continuing Operations (in millions) | Category | 2021 | 2020 | 2019 | | :------- | :---- | :---- | :---- | | Current | $— | $(0.4)| $(2.0)| | Deferred | $— | $— | $— | | Total| $— | $(0.4)| $(2.0)| Deferred Tax Assets and Liabilities (in millions) | Category | 2021 | 2020 | | :---------------------------- | :-------- | :-------- | | Total deferred tax assets | $116.8 | $118.1 | | Valuation allowance | $(109.6) | $(104.0) | | Total net deferred tax assets | $7.2 | $14.1 | | Total deferred tax liabilities | $7.2 | $14.1 | | Net deferred tax assets (liabilities) | $— | $— | 19. Earnings Per Share ("EPS") This note provides the calculation of basic and diluted Earnings Per Share (EPS) - Basic and diluted EPS are computed using the two-class method, adjusting for redeemable noncontrolling interests and participating securities[321] Income (Loss) from Continuing Operations Available to A&B Shareholders (in millions) | Metric | 2021 | 2020 | 2019 | | :-------------------------------------------------------- | :---- | :---- | :----- | | Income (loss) from continuing operations attributable to A&B shareholders | $36.5 | $6.4 | $(34.9)| | Distributions and allocations to participating securities | $(0.3)| $(0.1)| $(0.2) | | Income (loss) from continuing operations available to A&B shareholders | $36.2| $6.3 | $(35.1)| | Income (loss) from discontinued operations available to A&B shareholders | $(1.1)| $(0.8)| $(1.5) | | Net income (loss) available to A&B common shareholders | $35.1| $5.5 | $(36.6)| Weighted-Average Number of Shares Outstanding (in millions) | Metric | 2021 | 2020 | 2019 | | :---------------------------------------- | :---- | :---- | :---- | | Denominator for basic EPS | 72.5 | 72.3 | 72.2 | | Effect of dilutive securities | 0.1 | 0.1 | — | | Denominator for diluted EPS | 72.6| 72.4| 72.2| 20. Accumulated Other Comprehensive Income (Loss) This note details the components of accumulated other comprehensive income (loss) - The net change in accumulated other comprehensive income (loss) for 2021 was a loss of $(20.7) million, primarily driven by actuarial losses in employee benefit plans[467] Components of Accumulated Other Comprehensive Loss (in millions) | Category | 2021 | 2020 | | :-------------------------------- | :-------- | :-------- | | Employee benefit plans: | | | | Pension plans | $(74.6) | $(48.9) | | Post-retirement plans | $(2.6) | $(3.6) | | Non-qualified benefit plans | $(0.7) | $(0.8) | | Total employee benefit plans | $(77.9) | $(53.3) | | Interest rate swap | $(2.8) | $(6.7) | | Accumulated other comprehensive income (loss) | $(80.7) | $(60.0) | 21. Related Party Transactions This note discloses A&B's related party transactions with affiliate entities - Revenues from construction contracts and material sales with affiliate entities were $9.3 million in 2021, and expenses were $1.4 million[469] - Receivables from these affiliates were $1.1 million, and amounts due to them were $0.3 million as of December 31, 2021[469] - The note receivable with a Land Operations joint venture, which had a carrying value of $9.5 million in 2020, was repaid in full in November 2021[470] 22. Segment Results This note provides detailed financial information for A&B's three reportable segments - The Company's reportable segments are Commercial Real Estate, Land Operations, and Materials & Construction, with operating results reviewed by the chief operating decision maker[471] - In Q1 2021, the composition of reportable segments changed, reclassifying activity and results of Company-owned quarries on Maui from Land Operations to Materials & Construction, with historical periods restated[475] - Materials & Construction segment operating profit (loss) for 2021 includes impairment charges of $29.0 million related to long-lived assets, equity method investment, and goodwill[477] Operating Revenue by Segment (in millions) | Segment | 2021 | 2020 | 2019 | | :----------------------- | :---- | :---- | :---- | | Commercial Real Estate | $173.2| $150.0| $160.6| | Land Operations | $79.9 | $38.7 | $112.2| | Materials & Construction | $126.2| $116.6| $162.4| | Total operating revenue| $379.3| $305.3| $435.2| Operating Profit (Loss) by Segment (in millions) | Segment | 2021 | 2020 | 2019 | | :----------------------- | :------ | :------ | :------ | | Commercial Real Estate | $72.6 | $49.8 | $66.2 | | Land Operations | $55.4 | $15.4 | $18.9 | | Materials & Construction | $(40.5) | $(10.5) | $(67.3) | | Total operating profit (loss) | $87.5| $54.7| $17.8| 23. Long-lived Assets - Impairments This note details the impairment charges recorded for long-lived assets in 2021 - In Q4 2021, A&B recorded $24.3 million in impairment charges for Materials & Construction segment assets[479] - The impairment was driven by downward revisions of management's forecasts on future projected earnings and cash flows due to strategic alternatives review[479] - Fair value measurements for these impairments were classified as Level 3, using a discount rate of 13.0% and other unobservable inputs[479] Changes to Materials & Construction Long-lived Assets (in millions) | Metric | Materials & Construction | | :------------------------------------ | :----------------------- | | Balance, January 1, 2021 | $92.8 | | Additions to long-lived assets | $6.3 | | Depreciation | $(9.1) | | Long-lived asset impairment | $(24.3) | | Balance, December 31, 2021 | $65.7 | 24. Long-lived Assets - Held for sale or Disposals This note details significant asset disposals in 2020 - In Q3 2020, A&B sold its solar power facility in Port Allen for $17.1 million, recognizing an $8.9 million gain on disposal[481] - In Q2 2020, the Company sold its 51% ownership interest in GPRM for $5.0 million, after recording a $5.6 million write-down[482] - Neither the solar power facility nor the GPRM disposal qualified for presentation as discontinued operations[481][482] 25. Subsequent Events This note discloses events occurring after the balance sheet date - On February 22, 2022, the Board declared a cash dividend of $0.19 per share, payable on April 5, 2022[483] ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE There have been no changes in or disagreements with accountants on accounting and financial disclosure matters ITEM 9A. CONTROLS AND PROCEDURES Management concluded that the Company's disclosure controls and internal control over financial reporting were effective - The Company's disclosure controls and procedures were effective as of December 31, 2021[486] - No material changes in internal control over financial reporting occurred during the fiscal fourth quarter[487] - Management assessed and concluded that the Company's internal control over financial reporting was effective as of December 31, 2021, based on COSO criteria[489] - Deloitte & Touche LLP issued an unqualified audit report on the Company's internal control over financial reporting[492] ITEM 9B. OTHER INFORMATION This item states that there is no other information to report ITEM 9C. DISCLOSURE REGARDING FOREIGN JURISDICTIONS THAT PREVENT INSPECTIONS This item is not applicable to the Company PART III ITEM 10. DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE This section provides information on A&B's directors, executive officers, and corporate governance practices - Information on directors is incorporated by reference from A&B's 2022 Proxy Statement[498] - Key executive officers include Christopher J. Benjamin (CEO and President), Brett A. Brown (EVP and CFO), and Lance K. Parker (EVP and COO)[500][501][503] - Details on the Audit Committee and Code of Ethics are incorporated by reference from the 2022 Proxy Statement[504] ITEM 11. EXECUTIVE COMPENSATION Information regarding executive and director compensation is incorporated by reference from the 2022 Proxy Statement - Executive compensation details are incorporated by reference from A&B's 2022 Proxy Statement[504] ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS Information on security ownership is incorporated by reference from the 2022 Proxy Statement and Item 5 - Security ownership information is incorporated by reference from A&B's 2022 Proxy Statement and Item 5 of Part II[505] ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE Information on related transactions and director independence is incorporated by reference from the 2022 Proxy Statement - Information on related party transactions and director independence is incorporated by reference from A&B's 2022 Proxy Statement[505] ITEM 14. PRINCIPAL ACCOUNTING FEES AND SERVICES Information regarding principal accounting fees and services is incorporated by reference from the 2022 Proxy Statement - Principal accounting fees and services information is incorporated by reference from A&B's 2022 Proxy Statement[505] PART IV ITEM 15. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES This section lists all exhibits and financial statement schedules required for the Form 10-K - Financial statements are set forth in Item 8 of Part II[506] - Schedule III provides details on real estate and accumulated depreciation, with an aggregate tax basis of approximately $690.8 million for CRE and Land Operations assets as of December 31, 2021[509][512] - A comprehensive list of exhibits, including organizational documents, material contracts, and compensation plans, is provided[517][520][526][529] ITEM 16. FORM 10-K SUMMARY This item indicates that there is no Form 10-K summary provided Signatures This section contains the required signatures certifying the Form 10-K submission - The report is signed by Christopher J. Benjamin, President and Chief Executive Officer, and other principal officers and directors[534][535] - The report was signed on February 25, 2022[534][535]