ALEXANDER & BALDWIN, INC. HONOLULU, Nov. 5, 2015 /PRNewswire/ -- Alexander & Baldwin, Inc. (NYSE:ALEX) ("A&B" or "Company") today announced net income for the third quarter of 2015 of $6.7 million, or $0.11 per diluted share. Earnings for the quarter reflect a $5.6 million after-tax loss related to the Agribusiness segment.
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Earnings for the third quarter of 2014 were $10.2 million, or $0.21 per diluted share. Revenue for the third quarter of 2015 was $144.7 million, compared to revenue of $153.4 million for the third quarter of last year.
Operating profit for the third quarter of 2015 from the Company's real estate operations (Leasing and Development) was $23.7 million, and the Materials & Construction segment contributed an additional $7.5 million of operating profit. These results were partially offset by an Agribusiness operating loss of $9.0 million.
"With the exception of our Agribusiness segment, operating performance in the third quarter was solid," said Stanley M. Kuriyama, chairman and chief executive officer. "Development & Sales revenue of $20 million for the quarter reflects the closing of an 11-acre Maui Business Park parcel to Lowe's for a 167,000-square-foot store on Maui, which will be a great complementary anchor to the Target store that opened earlier in the year. Leasing NOI increased 7% in the third quarter to $20 million(1), compared to last year, and the Materials & Construction segment generated $10 million of EBITDA(1)."
"We continue to make investments to build our development pipeline, as well as continue to seek new investments in Hawaii," said Kuriyama. "For example, we are pursuing the acquisition of Hawaii commercial assets to complement our retail portfolio, which is the second largest in the state, and are planning for the repositioning of the Kailua Macy's leasehold improvements that we expect will be turned over to us early next year. We are the owner of or primary investor in two of the largest solar farms in Hawaii, and are actively pursuing investments in other renewable energy projects, a number of which have been proposed for development in 2016 due to the state's mandate for renewable energy expansion."
Operating Performance
In addition to the parcel sale to Lowe's, third quarter 2015 Development & Sales operating profit included five sales at Kukui'ula, A&B's resort residential joint venture project on Kauai. Another three sales closed in October, bringing year-to-date sales to 17 units. An additional 12 units are under binding contract, with four of those expected to close this year. This positive momentum at Kukui'ula is carrying over to The Shops, A&B's 89,000-square-foot resort retail center adjacent to Kukui'ula, which is now 99% leased, compared to 88% at this time last year. NOI at The Shops increased 26% year to date through October, compared to the same period last year. In October, a 10,000-square-foot CVS drugstore opened at The Shops, which is expected to draw additional traffic to the center.
Presales at the Company's 70-unit Keala 'O Wailea project, located at the Wailea Resort on Maui, also have been positive. Twenty-one of 30 units released for presale in July are under binding contract, and this success prompted the subsequent release of another 20 units for presale, seven of which have already been sold under binding contract. Construction is expected to begin late this year. Also on Maui, the A&B board recently approved the development of a 630-unit master planned residential community on 95 acres in Kihei, comprising a mix of market and affordable townhomes and single-family homes. The project is expected to break ground in early 2016, with delivery of the first units in late 2017.
On Oahu, A&B is completely sold out of the 450 tower and mid-rise units at The Collection, more than a year prior to the delivery of units, and five of the 14 townhome units are under contract. Given the strong sales results experienced at The Collection, the Company remains positive on the urban Honolulu high-rise market and recently announced a $35 million investment in the form of B-note financing provided for the development of Keauhou Place, a 423-unit high-rise project located in urban Honolulu, two blocks from The Collection. The project is 81% sold under binding contract and broke ground at the end of October.
Maui experienced extremely heavy rainfall in the third quarter, with Central Maui receiving 300% of the normal average rainfall. Muddy fields made harvesting and milling at the sugar plantation difficult if not impossible, and resulted in losses for the Agribusiness segment that were greater than expected.
The Materials & Construction segment's third quarter operating profit increased 27% to $8 million, and its EBITDA increased 13% to $10 million(1), compared to the third quarter of 2014, primarily due to increased aggregate and other construction-related material sales and lower depreciation and amortization. The segment's outlook continues to be positive with $243 million of construction backlog(2) at the end of the third quarter, an 11% increase since the beginning of the year.
Year-to-Date Financial Results
Net income for the first nine months of 2015, was $41.8 million, or $0.82 per diluted share, compared to $54.4 million, or $1.11 per diluted share, for the same period last year, due to a large commercial property sale that occurred in the first quarter of 2014. Revenue for the first nine months of 2015 was $449.1 million, compared to revenue of $395.0 million for the same period of last year, as revenue from the aforementioned 2014 commercial property sale was included in discontinued operations.
ANALYSIS OF FINANCIAL RESULTS
REAL ESTATE
Real Estate Leasing and Development & Sales revenue and operating profit are analyzed before subtracting amounts related to discontinued operations. This is consistent with how the Company evaluates performance and makes decisions regarding capital allocation, acquisitions and dispositions. Direct year-over-year comparison of Real Estate Development & Sales results may not provide a consistent, measurable indicator of future performance because results from period to period are significantly affected by the mix and timing of property sales. Operating results, by virtue of each project's asset class, geography and timing, are inherently variable. Earnings from joint venture investments are not included in segment revenue, but are included in operating profit.
Real Estate Leasing - Third quarter of 2015 compared with 2014
Quarter Ended September 30,
---------------------------
(dollars
in
millions) 2015 2014 Change
--------- ---- ---- ------
Revenue $33.0 $31.3 5.4%
Operating
profit $12.5 $12.1 3.3%
Operating
profit
margin 37.9% 38.7%
--------- ---- ----
NOI(1)
Hawaii $16.4 $14.9 10.1%
Mainland 4.0 4.2 (4.8)%
--- ---
Total $20.4 $19.1 6.8%
----- ----- ----- ---
Average
occupancy
rates:
Hawaii 93% 94%
Mainland 96% 94%
Total 95% 94%
----- --- ---
Leasable
space
(million
sq.
ft.) -
at
period
end
Hawaii
improved 2.7 2.4
Mainland
improved 2.3 2.5
---
Total
improved 5.0 4.9
=== ===
Total
Hawaii
urban
ground
leases
(acres) 106 116
-------- === ===
Real Estate Leasing revenue for the third quarter of 2015 was 5.4% higher than 2014, primarily due to the timing of sales and acquisitions.
Operating profit and NOI for the third quarter of 2015 were 3.3% and 6.8%(1) higher, respectively, than 2014 due to the same factors cited for the revenue increase.
Real Estate Leasing - First nine months of 2015 compared with 2014
Nine Months Ended September 30,
-------------------------------
(dollars
in
millions) 2015 2014 Change
--------- ---- ---- ------
Revenue $100.5 $93.5 7.5%
Operating
profit $39.6 $35.9 10.3%
Operating
profit
margin 39.4% 38.4%
--------- ---- ----
NOI(1)
Hawaii $49.8 $45.0 10.7%
Mainland 12.9 13.3 (3.0)%
---- ----
Total $62.7 $58.3 7.5%
----- ----- ----- ---
Average
occupancy
rates:
Hawaii 93% 93%
Mainland 95% 93%
Total 94% 93%
----- --- ---
Real Estate Leasing segment revenue for the first nine months of 2015 was 7.5% higher than 2014, primarily due to the timing of sales and acquisitions activity and higher Hawaii same-store rents. "Same-store" refers to properties that were owned throughout the entire duration of both periods under comparison.
Operating profit and NOI were 10.3% and 7.5%(1) higher, respectively, for the first nine months of 2015, as compared to the same period last year, for the reasons previously cited for the revenue increase.
Real Estate Development & Sales - Third quarter of 2015 compared with 2014
Quarter Ended September 30,
---------------------------
(dollars in millions) 2015 2014 Change
-------------------- ---- ----
Improved property sales
revenue $ - $ - NM
Development sales revenue 19.6 2.7 7X
Unimproved/other property
sales revenue 0.3 15.5 (98.1)%
--- ----
Total revenue $19.9 $18.2 9.3%
------------- ----- ----- ---
Operating profit before
joint ventures $9.6 $9.9 (3.0)%
Earnings from joint ventures 1.6 1.5 6.7%
--- ---
Total operating profit $11.2 $11.4 (1.8)%
---------------------- ----- ----- -----
Real Estate Development & Sales - First nine months of 2015 compared with 2014
Nine Months Ended September 30,
-------------------------------
(dollars in millions) 2015 2014 Change
-------------------- ---- ---- ------
Improved property sales
revenue $21.0 $64.1 (67.2)%
Development sales revenue 71.5 19.0 4X
Unimproved/other property
sales revenue 16.3 27.5 (40.7)%
---- ----
Total revenue $108.8 $110.6 (1.6)%
------------- ------ ------ -----
Operating profit before
joint ventures $31.3 $70.5 (55.6)%
Earnings from joint ventures 26.2 1.0 26X
---- ---
Total operating profit $57.5 $71.5 (19.6)%
---------------------- ----- ----- ------
Third quarter 2015: Real Estate Development & Sales revenue and operating profit were $19.9 million and $11.2 million, respectively. Results included the sale of 11.0 acres at Maui Business Park II to Lowe's. Operating profit also included the following joint venture unit sales: five units on Kauai and seven units on Hawaii Island, partially offset by joint venture expenses.
First nine months 2015: Real Estate Development & Sales revenue and operating profit were $108.8 million and $57.5 million, respectively. Sales included five residential properties on Oahu, an office property in Texas, 17.4 acres at Maui Business Park II, five Maui parcels, a parcel in Santa Barbara, California, and a retail property in Colorado. Operating profit also included joint venture sales of all remaining units at the 340-unit Waihonua condominium on Oahu (12 units closed in December 2014), 14 units on Kauai, 11 units on Hawaii Island, and one unit on Maui, partially offset by joint venture expenses.
Third quarter 2014: Real Estate Development & Sales revenue and operating profit were $18.2 million and $11.4 million, respectively, and were principally related to the sales of a parcel in Wailea, a residential unit on Oahu, and three non-core land parcels on Maui. Operating profit also included joint venture sales of six units on Hawaii Island, one unit on Maui, and two units on Kauai, partially offset by joint venture expenses.
First nine months 2014: Real Estate Development & Sales revenue and operating profit were $110.6 million and $71.5 million, respectively, and included the lot and parcel sales in the third quarter of 2014 described above, sale of a Maui retail property and recognition of $6.0 million in deferred revenue associated with the sale of three Mainland retail properties in the fourth quarter of 2013, three residential lots on Oahu, six non-core land parcels on Maui, and one residential lot on Maui. Operating profit also included joint venture sales of ten units on Kauai, two units on Maui, and 12 units on Hawaii Island, partially offset by joint venture expenses.
MATERIALS & CONSTRUCTION
Materials & Construction - Third quarter of 2015 compared with 2014
Quarter Ended September 30,
---------------------------
(dollars in
millions) 2015 2014 Change
----------- ---- ---- ------
Revenue $51.0 $58.4 (12.7)%
Operating
profit $7.5 $5.9 27.1%
Operating
profit
margin 14.7% 10.1%
EBITDA(1) $10.2 $9.0 13.3%
-------- ----- ---- ----
September 30, June 30, December 31,
------------- -------- ------------
(dollars
in
millions) 2015 2015 Change 2014 Change
--------- ---- ---- ------ ---- ------
Backlog(2) $243.1 $251.4 (3.3)% $219.4 10.8%
--------- ------ ------ ----- ------ ----
Materials & Construction revenue for the third quarter of 2015 decreased $7.4 million, or 12.7%, compared to the third quarter of 2014 and was primarily attributable to lower available paving days resulting from wet weather, and a reduction in the price of asphalt sold due to the decline in oil prices, partially offset by higher aggregate sales. Backlog at the end of September 30, 2015 was $243.1 million, compared to $219.4 million as of December 31, 2014. Backlog increased from year-end due primarily to the timing of government bid award activity.
Operating profit was $7.5 million for the third quarter of 2015, compared to $5.9 million for the third quarter of 2014. The increase in operating profit was principally related to increased aggregate and other construction-related material sales, and lower depreciation and amortization.
Materials & Construction - First nine months of 2015 compared with 2014
Nine Months Ended September 30,
-------------------------------
(dollars
in
millions) 2015 2014 Change
--------- ---- ---- ------
Revenue $165.3 $173.1 (4.5)%
Operating
profit $21.7 $17.3 25.4%
Operating
profit
margin 13.1% 10.0%
EBITDA(1) $29.3 $27.6 6.2%
-------- ----- ----- ---
Materials & Construction revenue was $165.3 million for the first nine months of 2015, 4.5% lower than the first nine months of 2014, primarily due to a reduction in the price of asphalt sold due to the decline in oil prices.
Operating profit was $21.7 million for the first nine months of 2015, compared to $17.3 million for the first nine months of 2014. The increase in operating profit related principally to increased aggregate and other construction-related material sales, and lower depreciation and amortization.
AGRIBUSINESS
The quarterly results of the Agribusiness segment are subject to fluctuations from a number of factors, including the timing of sugar deliveries, which typically commence after the first quarter of each year. Additionally, each delivery is generally priced independently, which could result in significant variations in margins between deliveries. Accordingly, quarterly results are not indicative of the results that may be achieved for a full year.
Agribusiness - Third quarter 2015 compared with 2014
Quarter Ended September 30,
---------------------------
(dollars
in
millions) 2015 2014 Change
--------- ---- ---- ------
Revenue $40.8 $45.5 (10.3)%
Operating
loss $(9.0) $(7.3) 23.3%
--------- ----- ----- ----
Tons
sugar
produced 42,500 67,000 (36.6)%
Tons
sugar
sold
(raw
and
specialty
sugar) 58,000 75,200 (22.9)%
--------- ------ ------ ------
Agribusiness revenue for the third quarter of 2015 decreased $4.7 million, or 10.3%, compared to the third quarter of 2014. The decrease was primarily due to lower raw sugar revenue in the third quarter of 2015, as compared to the third quarter of 2014, resulting principally from lower tonnage carried per voyage on the sugar vessel as a result of vessel improvements. These improvements reduce overall transportation cost by allowing the vessel to carry both raw sugar and molasses to the West Coast, but lower the per voyage tonnage capacity of raw sugar transported.
Operating loss for the third quarter of 2015 increased by $1.7 million compared to the third quarter of 2014. The increased loss was principally due to lower raw and specialty sugar margins from higher per ton production costs due to lower total expected annual production, partially offset by increased power margins.
Tons of sugar produced for the third quarter of 2015 was 36.6% lower than the third quarter of 2014 due to a decrease in the number of acres harvested and lower yields. Yields (tons of sugar per acre) continue to be negatively impacted by unusually poor weather conditions, resulting in sugar production levels that are substantially lower than the third quarter of last year and earlier projections. Although there were two voyages in both the third quarter of 2015 and 2014, sugar volume sold in the third quarter of 2015 was lower than last year, due to the sugar vessel improvements described above.
Agribusiness - First nine months 2015 compared with 2014
Nine Months Ended September 30,
-------------------------------
(dollars
in
millions) 2015 2014 Change
--------- ---- ---- ------
Revenue $95.5 $88.2 8.3%
Operating
loss $(11.8) $(3.8) 3X
--------- ------ ----- ---
Tons
sugar
produced 98,700 115,200 (14.3)%
Tons
sugar
sold
(raw
and
specialty
sugar) 126,000 116,400 8.2%
--------- ------- ------- ---
Agribusiness revenue for the first nine months of 2015 increased $7.3 million, or 8.3%, compared to the first nine months of 2014. The increase was due to an additional raw sugar voyage in 2015 at higher prices as compared to 2014, partially offset by lower power revenue.
Operating loss for the first nine months of 2015 increased $8.0 million compared to the first nine months of 2014. The increase in loss was primarily due to a land sale in 2014, lower power margins from lower volume and prices, and lower raw and specialty sugar margins due to higher production costs from lower annual production estimates.
Year-to-date tons of sugar produced was 14.3% lower in 2015 than in 2014, due to a decrease in the number of acres harvested and yields due to poor weather conditions. Sugar volume sold was 8.2% higher for the same period last year, primarily due to one additional raw sugar voyage completed year to date as compared to 2014.
OTHER INCOME STATEMENT ITEMS
Other Income Statement Items - Third quarter 2015 compared with 2014
Quarter Ended September 30,
---------------------------
(dollars in millions) 2015 2014
-------------------- ---- ----
Interest expense $6.5 $7.2 (9.7)%
General corporate expenses $4.8 $3.9 23.1%
Income tax expense
(benefit) $3.8 $(14.9) NM
------------------ ---- ------ ---
Third quarter 2015 interest expense was $6.5 million, compared to $7.2 million for the third quarter of 2014. The reduction in interest expense resulted from lower levels of debt in the quarter compared to last year. Corporate expenses were $4.8 million for the third quarter of 2015, compared to $3.9 million for the third quarter of 2014. The increase was due principally to increased professional services expenses.
Total income tax expense for the third quarter of 2015 of $3.8 million was higher than 2014 primarily due to 2014 tax benefits associated with the KRS II solar farm investment and higher 2015 income from continuing operations.
Other Income Statement Items - First nine months 2015 compared with 2014
Nine Months Ended September 30,
-------------------------------
(dollars in
millions) 2015 2014
----------- ---- ----
Interest expense $20.2 $21.6 (6.5)%
General corporate
expenses $15.7 $13.5 16.3%
Income tax expense
(benefit) $26.4 $(7.6) NM
------------------ ----- ----- ---
Interest expense for the first nine months of 2015 was $20.2 million, compared to $21.6 million for the first nine months of 2014. The reduction in interest expense resulted from lower levels of debt in the first nine months of 2015 compared to last year. Corporate expenses were $15.7 million for the first nine months of 2015, compared to $13.5 million for the first nine months of 2014. The increase was due principally to increased professional services expenses.
Income tax expense for the first nine months of 2015 of $26.4 million was higher than 2014 primarily due to 2014 tax benefits associated with the KRS II solar farm investment and higher 2015 income from continuing operations.
ALEXANDER & BALDWIN, INC. AND SUBSIDIARIES
CONDENSED INDUSTRY SEGMENT DATA, NET INCOME
(In Millions, Except Per Share Amounts, Unaudited)
Three Months Ended Nine Months Ended
September 30, September 30,
------------- -------------
Revenue: 2015 2014 2015 2014
-------- ---- ---- ---- ----
Real Estate3:
Leasing $33.0 $31.3 $100.5 $93.5
Development & Sales 19.9 18.2 108.8 110.6
Less amounts reported in
discontinued operations - - - (70.4)
Materials & Construction 51.0 58.4 165.3 173.1
Agribusiness 40.8 45.5 95.5 88.2
Reconciling item4 - - (21.0) -
--- --- ----- ---
Total revenue $144.7 $153.4 $449.1 $395.0
------ ------ ------ ------
Operating profit (loss),
net income:
------------------------
Real Estate(3):
Leasing $12.5 $12.1 $39.6 $35.9
Development & Sales 11.2 11.4 57.5 71.5
Less amounts reported in
discontinued operations - - - (56.2)
Materials & Construction 7.5 5.9 21.7 17.3
Agribusiness (9.0) (7.3) (11.8) (3.8)
---- ---- ----- ----
Total operating profit 22.2 22.1 107.0 64.7
Interest expense (6.5) (7.2) (20.2) (21.6)
General corporate
expenses (4.8) (3.9) (15.7) (13.5)
Reduction in KRS II
carrying value (0.1) (15.1) (1.7) (15.1)
---- ----- ---- -----
Income from continuing
operations before
income taxes 10.8 (4.1) 69.4 14.5
Income tax expense
(benefit) 3.8 (14.9) 26.4 (7.6)
--- ----- ---- ----
Income from continuing
operations 7.0 10.8 43.0 22.1
Income from discontinued
operations, net of
income taxes - - - 34.3
--- --- --- ----
Net income 7.0 10.8 43.0 56.4
Income attributable to
non-controlling
interest (0.3) (0.6) (1.2) (2.0)
---- ----
Net income attributable
to A&B shareholders $6.7 $10.2 $41.8 $54.4
==== ===== ===== =====
Basic earnings per share
attributable to A&B
shareholders5:
------------------------
Continuing operations $0.11 $0.21 $0.83 $0.41
Net income $0.11 $0.21 $0.83 $1.12
Diluted earnings per
share attributable to
A&B shareholders5:
----------------------
Continuing operations $0.11 $0.21 $0.82 $0.41
Net income $0.11 $0.21 $0.82 $1.11
Weighted average number
of shares outstanding:
-----------------------
Basic 48.9 48.8 48.8 48.7
Diluted 49.4 49.3 49.3 49.2
ALEXANDER & BALDWIN, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEET
(In Millions, Unaudited)
September 30, December 31,
2015 2014
-------------- -------------
Assets
Current
assets $152.9 $175.9
Investments
in
affiliates 413.6 418.6
Real
estate
developments 181.2 224.0
Property,
net 1,288.9 1,301.7
Intangible
assets,
net 56.5 63.9
Goodwill 102.3 102.3
Other
assets 50.1 43.5
---- ----
$2,245.5 $2,329.9
======== ========
Liabilities
& equity
Current
liabilities $127.1 $183.0
Long-term
debt,
non-
current
portion 546.7 631.5
Deferred
income
taxes 210.9 194.0
Accrued
pension
and post-
retirement
benefits 53.2 54.8
Other non-
current
liabilities 52.0 51.8
Redeemable
noncontrolling
interest 9.8 -
Equity 1,245.8 1,214.8
$2,245.5 $2,329.9
======== ========
ALEXANDER & BALDWIN, INC. AND SUBSIDIARIES
CONDENSED CASH FLOW TABLE
(In Millions, Unaudited)
Nine Months Ended
June 30,
--------
2015 2014
---- ----
Cash flows
from
operating
activities: $115.3 $3.3
Cash flows
from
investing
activities:
Capital
expenditures
for
property,
plant and
equipment (34.9) (27.3)
Capital
expenditures
related to
1031
commercial
property
transactions (1.3) -
Proceeds from
investment
tax credits
and grants
related to
Port Allen
Solar Farm - 4.5
Proceeds from
disposal of
property and
other assets 5.1 8.5
Proceeds from
disposals
related to
1031
commercial
property
transactions 25.2 86.4
Payments for
purchases of
investments
in
affiliates (22.5) (37.9)
Proceeds from
investments
in
affiliates 37.6 14.4
Change in
restricted
cash
associated
with 1031
transactions (2.7) (15.2)
---- -----
Net cash
provided by
investing
activities $6.5 $33.4
---- -----
Cash flows
from
financing
activities:
Proceeds from
the issuance
of long-
term debt $71.0 $126.0
Payments of
long-term
debt and
deferred
financing
costs (182.1) (86.5)
Payments of
line-of-
credit
agreements,
net (0.4) (64.5)
Dividends
paid (7.4) (5.9)
Distributions
to non-
controlling
interests (1.1) -
Proceeds from
issuance
(repurchase)
of capital
stock and
other, net (0.5) 0.1
Net cash used
in financing
activities $(120.5) $(30.8)
------- ------
Net increase
in cash and
cash
equivalents $1.3 $5.9
==== ====
USE OF NON-GAAP FINANCIAL MEASURES
The Company calculates NOI as operating profit from continuing operations, less general and administrative expenses, straight-line rental adjustments, interest income, interest expense, depreciation and amortization, and gains on sales of interests in real estate. NOI is considered by management to be an important and appropriate supplemental performance metric because management believes it helps both investors and management understand the ongoing core operations of our properties excluding corporate and financing-related costs and noncash depreciation and amortization. NOI is an unlevered operating performance metric of our properties and allows for a useful comparison of the operating performance of individual assets or groups of assets. This measure thereby provides an operating perspective not immediately apparent from GAAP income (loss) from operations or net income (loss). NOI should not be considered as an alternative to GAAP net income as an indicator of the Company's financial performance, or as an alternative to cash flow from operating activities as a measure of the Company's liquidity. Other real estate companies may use different methodologies for calculating NOI, and accordingly, the Company's presentation of NOI may not be comparable to other real estate companies. The Company believes that the Real Estate Leasing segment's operating profit from continuing operations is the most directly comparable GAAP measurement to NOI. A reconciliation of Real Estate Leasing segment operating profit to Real Estate Leasing segment NOI is as follows:
Three Months Ended Nine Months Ended
September 30, September 30,
------------- -------------
(dollars in millions) 2015 2014 2015 2014
---- ---- ---- ----
Real Estate Leasing
segment operating profit
before discontinued
operations $12.5 $12.1 $39.6 $35.9
Less amounts reported in
discontinued operations - - - (0.3)
(pre-tax)
Real Estate Leasing
segment operating profit
from continuing
operations $12.5 $12.1 $39.6 $35.6
Adjustments:
Depreciation and
amortization 7.4 6.8 21.8 21.0
Straight-line lease
adjustments (0.8) (0.7) (2.1) (1.8)
General and
administrative expenses 1.3 0.9 3.1 3.2
Other - - 0.3 -
Discontinued operations - - - 0.3
--- --- --- ---
Real Estate Leasing
segment NOI $20.4 $19.1 $62.7 $58.3
===== ===== ===== =====
Percent change over prior
comparative period 6.8% 7.5%
=== ===
The Company presents EBITDA for the Materials & Construction segment, which is a non-GAAP measure. The Company uses EBITDA when evaluating operating performance for the Materials & Construction segment because management believes that it provides insight into the segment's core operating results, future cash flow generation, and the underlying business trends affecting performance on a consistent and comparable basis from period to period. The Company provides this information to investors as an additional means of evaluating the segment's ongoing core operations. The non-GAAP financial information presented herein should be considered supplemental to, and not as a substitute for, or superior to, financial measures calculated in accordance with GAAP. The Company believes that Materials & Construction operating profit is the most directly comparable GAAP measurement to the segment's EBITDA. A reconciliation of segment operating profit to EBITDA follows:
Three Months Ended Nine Months Ended
September 30, September 30,
------------- -------------
(dollars in millions) 2015 2014 2015 2014
---- ---- ---- ----
Operating profit $7.5 $5.9 $21.7 $17.3
Depreciation &
amortization expense 3.0 3.7 8.8 12.3
Income attributable to
non-controlling
interest (0.3) (0.6) (1.2) (2.0)
---- ---- ---- ----
EBITDA $10.2 $9.0 $29.3 $27.6
===== ==== ===== =====
Percent change over
comparative period 13.3% 6.2%
==== ===
1 This is a non-
GAAP
disclosure.
See above for
a discussion
of
management's
use of non-
GAAP financial
measures and
required
reconciliations
from GAAP to
non-GAAP
measures.
2 Backlog
represents the
amount of
revenue that
Grace (and
consolidated
subsidiaries)
and Maui
Paving, LLC, a
50-percent-
owned non-
consolidated
affiliate,
expect to
realize on
contracts
awarded,
primarily
related to
asphalt paving
and, to a
lesser extent,
Grace's
consolidated
revenue from
its
construction-
and traffic-
control-
related
products.
Backlog
includes
estimated
revenue from
the remaining
portion of
contracts not
yet completed,
as well as
revenue from
approved
change orders.
The length of
time that
projects
remain in
backlog can
span from a
few days for a
small volume
of work to 36
months for
large paving
contracts and
contracts
performed in
phases. Maui
Paving's
backlog at
September 30,
2015 and 2014
were $18.9
million and
$39.6 million,
respectively.
3 Prior period
amounts
adjusted for
amounts
treated as
discontinued
operations.
4 Represents the
sales of a
Colorado
retail
property in
March 2015 and
a Texas office
building in
May 2015 that
are classified
as "Gain on
sale of
improved
property" in
the Condensed
Consolidated
Statements of
Income, but
reflected as
revenue for
segment
reporting
purposes.
5 Earnings per
share
attributable
to A&B
shareholders
reflect $1.3
million of
undistributed
earnings
allocated to
redeemable
noncontrolling
interests.
ABOUT ALEXANDER & BALDWIN
Alexander & Baldwin, Inc. is a Hawaii-based public company, with interests in real estate development, commercial real estate, agriculture, materials and infrastructure construction. With ownership of over 88,000 acres in Hawaii, A&B is the state's fourth largest private landowner, and one of the state's most active real estate investors. The Company manages a portfolio comprising five million square feet of leasable space in Hawaii and on the U.S. Mainland and is the second largest owner of retail assets in the state. It owns and operates the state's only sugar plantation. A&B is also Hawaii's largest materials company and paving contractor. Additional information about A&B may be found at www.alexanderbaldwin.com.
FORWARD-LOOKING STATEMENTS
Statements in this press release that are not historical facts are "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995, that involve a number of risks and uncertainties that could cause actual results to differ materially from those contemplated by the relevant forward-looking statement. These forward-looking statements are not guarantees of future performance. This release should be read in conjunction with pages 17-30 of Alexander & Baldwin, Inc.'s 2014 Form 10-K and other filings with the SEC through the date of this release, which identify important factors that could affect the forward-looking statements in this release. We do not undertake any obligation to update our forward-looking statements.
Contact:
Suzy Hollinger
808.525.8422
shollinger@abinc.com
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SOURCE Alexander & Baldwin, Inc.
