ALEXANDER & BALDWIN, INC. HONOLULU, Feb. 25, 2016 /PRNewswire/ -- Alexander & Baldwin, Inc. (NYSE:ALEX) ("A&B" or "Company") today announced full-year 2015 net income of $29.6 million, or $0.54(5) per diluted share, which includes a previously reported loss for the Agribusiness segment of $33.9 million, or $0.69 per diluted share, principally arising from operating losses for Hawaiian Commercial & Sugar Company (HC&S) and costs related to the planned 2016 cessation of sugar operations. Earnings for 2014 were $61.4 million, or $1.25 per diluted share, which included $5.7 million, or $0.12 per diluted share, of Agribusiness segment losses. Excluding the Agribusiness losses, which primarily reflect the impact of the soon-to-be-ceased sugar operations, and results from commercial property sales, which are generated primarily in connection with property exchanges, adjusted net income rose from $32.8 million(1) in 2014 to $64.7 million(1 )in 2015, reflecting the high-quality of earnings provided by the Real Estate and Materials & Construction segments. Revenue for 2015 was $570.5 million, compared to revenue of $560.0 million in the prior year.
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"Aside from the challenges in our sugar operation, our Company performed well in 2015. Leading the way was our Leasing segment, which posted an 8.5%(1) increase in NOI, resulting primarily from the strength of the Hawaii economy and our successful migration of assets from the Mainland to Hawaii," said Chris Benjamin, A&B president and chief executive officer. "Not only are we now generating roughly 80% of our commercial portfolio's NOI from Hawaii properties, but our Hawaii assets are performing well, validating our investment thesis. Additionally, we achieved solid sales across our development portfolio in 2015, including 18.4 acres at Maui Business Park, five Kahala Avenue properties, and 22 units at Kukui'ula, plus binding presales of all 450 high-rise and mid-rise units at The Collection condominium project," added Benjamin. "And, our Materials & Construction business finished strongly in 2015, producing $12 million(1) of EBITDA in the fourth quarter, for a total of $41 million(1) for the full year."
"Strong operating performance and cash flows from our Real Estate and Materials & Construction businesses helped us lower our debt levels by 17%, or $118 million, during 2015, strengthening our financial position as we head into 2016. Already this year we have furthered our asset migration and expanded our grocery-anchored retail presence with the acquisition of the well-performing, 139,000-square-foot, Safeway- and CVS/Longs-anchored Manoa Marketplace in January. We're also focused on opportunities to generate organic growth within our expanded Hawaii portfolio and enhance the value of these assets. This year we expect to increase investments in existing assets to position them for sustained long-term growth, including the repositioning of the Kailua Macy's leasehold improvements. In Development, we look forward to continuing the monetization of some developments--such as The Collection--while adding new product to our pipeline with the start of presales and construction of Kamalani, a 630-unit master-planned community in Kihei, Maui. Grace Pacific's $227 million backlog is positive for its outlook, as is the expected start of new master-planned-community construction in West Oahu," said Benjamin. "Much of our focus in Agribusiness in 2016 will be on a successful final harvest and helping smooth the transition for affected employees. As we complete the harvest, our focus for the plantation will shift to implementing our diversified agriculture model, which we believe will put the Agribusiness segment on a path toward stability."
Leasing operating profit of $53.1 million was up 11.8% over last year, and NOI increased 8.5%(1), to $83.9 million(1), compared with 2014. Real Estate Development & Sales operating profit was $65.0 million in 2015, compared to $85.7 million in 2014, though results in 2014 included $56.2 million of commercial property sales, primarily from the sale of a single commercial property to fund a portion of the Kailua Portfolio acquisition. The Agribusiness operating loss for the year was $51.9 million, which included $22.6 million of pre-tax sugar cessation-related costs, compared to operating losses of $11.8 million in 2014. Operating profit for the Materials & Construction segment in 2015 was $30.9 million, a 19.3% increase over prior year's operating profit of $25.9 million, and EBITDA was $41.0 million(1), compared to $38.0 million(1) in 2014.
FOURTH QUARTER 2015 FINANCIAL RESULTS
The Company reported a fourth quarter 2015 net loss of $12.2 million, or $0.29(5) per diluted share, which includes a $26.2 million after-tax loss, or $0.54 per diluted share, related to the Agribusiness segment. Fourth quarter 2014 earnings were $7.0 million, or $0.14 per diluted share, and included $4.8 million, or $0.10 per diluted share, of Agribusiness segment losses. Revenue for the fourth quarter of 2015 was $121.4 million, compared to revenue of $165.1 million for the fourth quarter of 2014.
Leasing operating profit for the fourth quarter of 2015 was $13.5 million compared to $11.6 million for the fourth quarter of 2014. Leasing NOI increased 11.6%(1) to $21.2 million(1). Fourth quarter 2015 Real Estate Development & Sales operating profit was $7.5 million, compared to $14.2 million in last year's fourth quarter. The Agribusiness segment operating loss for the fourth quarter was $40.1 million, which includes $22.6 million of cessation costs, compared to an operating loss of $7.9 million in the fourth quarter of 2014. Fourth quarter operating profit for the Materials & Construction segment was $9.2 million, compared to $8.6 million for the fourth quarter of 2014, and EBITDA was $11.7 million(1), a 12.5%(1 )increase over the fourth quarter of 2014.
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. 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 - Fourth quarter of 2015 compared with 2014
Quarter Ended December 31,
--------------------------
(dollars
in
millions) 2015 2014 Change
--------- ---- ---- ------
Revenue $33.3 $32.1 3.7%
Operating
profit $13.5 $11.6 16.4%
Operating
profit
margin 40.5% 36.1%
--------- ---- ----
NOI(1)
Hawaii $16.5 $14.8 11.5%
Mainland $4.7 $4.2 11.9%
---- ----
Total $21.2 $19.0 11.6%
----- ----- ----- ----
Average
occupancy
rates:
Hawaii 94% 94%
Mainland 94% 94%
Total 94% 94%
----- --- ---
Leasable
space
-
at
period
end
Hawaii
improved
(million
sq.
ft.) 2.7 2.6
Mainland
improved
(million
sq.
ft.) 2.2 2.5
Total
improved
(million
sq.
ft.) 4.9 5.1
=== ===
Total
Hawaii
urban
ground
leases
(acres) 106 115
------- === ===
Real Estate Leasing revenue and operating profit for the fourth quarter of 2015 were 3.7% and 16.4% higher, respectively, than 2014, primarily due to improved Hawaii performance, the timing of sales and acquisitions, and the receipt of a Mainland lease termination payment. NOI grew 11.6%(1) in the fourth quarter of 2015 to $21.2 million(1) compared to $19.0 million(1) for the fourth quarter 2014. Seventy-eight percent of portfolio NOI was generated by the Hawaii portfolio and 22% from the Mainland portfolio.
Real Estate Leasing - 2015 compared with 2014
(dollars in
millions) 2015 2014 Change
----------- ---- ---- ------
Revenue $133.8 $125.6 6.5%
Operating
profit $53.1 $47.5 11.8%
Operating
profit margin 39.7% 37.8%
-------------- ---- ----
NOI(1)
Hawaii $66.2 $59.8 10.7%
Mainland $17.7 $17.5 1.1%
----- -----
Total $83.9 $77.3 8.5%
----- ----- ----- ---
Average
occupancy
rates:
Hawaii 93% 94%
Mainland 95% 93%
Total 94% 94%
--- ---
Leasable space
-at period
end
Hawaii improved
(million sq.
ft.) 2.7 2.6
Mainland
improved
(million sq.
ft.) 2.2 2.5
--- ---
Total improved
(million sq.
ft.) 4.9 5.1
=== ===
Total Hawaii
urban ground
leases (acres) 106 115
--------------- === ===
Real Estate Leasing revenue and operating profit for 2015 were 6.5% and 11.8% higher, respectively, than 2014, primarily due to improved performance from Hawaii properties and the timing of acquisitions and dispositions. Depreciation expense was 3.2% higher year-over-year, as proceeds from commercial property sales under 1031 exchange transactions are reinvested in commercial properties at a higher relative book basis than the property sold. NOI was 8.5%(1) higher in 2015 compared to 2014 for the same reasons cited for the operating profit increase.
Real Estate Development & Sales - Fourth quarter of 2015 compared with 2014
Quarter Ended December 31, Year Ended December 31,
-------------------------- -----------------------
(dollars in millions) 2015 2014 2015 2014
-------------------- ---- ---- ---- ----
Improved property sales
revenue $10.0 $ - $31.0 $64.1
Development sales revenue 3.5 37.6 75.0 56.6
Unimproved/other property
sales revenue 9.2 1.8 25.5 29.3
--- ---
Total revenue $22.7 $39.4 $131.5 $150.0
------------- ----- ----- ------ ------
Operating profit before
joint ventures $3.5 $13.2 $34.8 $83.7
Earnings from joint
ventures 4.0 1.0 30.2 2.0
--- ---
Total operating profit $7.5 $14.2 $65.0 $85.7
---------------------- ---- ----- ----- -----
Fourth quarter 2015: Revenue and operating profit were $22.7 million and $7.5 million, respectively, and were principally driven by the sales of eight parcels on Maui (five) and Kauai (three), and a one-acre parcel at Maui Business Park II (MBP). Results also include the sale of an office building in Washington. Operating profit also included nine joint venture sales (eight on Kauai and one on Hawaii Island), partially offset by joint venture expenses.
Fourth quarter 2014: Revenue and operating profit were $39.4 million and $14.2 million, respectively, and were principally driven by the sales of 7.2 acres at MBP, three residential lots on Oahu, returns from the Company's investment in the ONE Ala Moana condominium on Oahu, and two Maui parcels. Operating profit also included 19 joint venture sales (12 on Oahu, four on Kauai and three on Hawaii Island), partially offset by joint venture expenses.
2015: Revenue from Real Estate Development and Sales was $131.5 million, principally related to the sales of five residential lots on Oahu, 18.4 acres at MBP, sales of three Mainland properties, 13 parcels on Maui (10) and Kauai (three), and a parcel in Santa Barbara, California. Operating profit was $65.0 million and also included joint venture residential sales of 329 condominium units on Oahu, 22 units on Kauai, 12 units on the Island of Hawaii, and one unit on Maui, partially offset by joint venture expenses.
2014: Revenue and operating profit were $150.0 million and $85.7 million respectively, and included the sale of a Maui commercial property, 11 Maui parcels, 7.2 acres at MBP, seven Kahala Avenue properties, a parcel at the Wailea Resort on Maui, the recognition of deferred revenue associated with the sale of three Mainland commercial properties in the fourth quarter of 2013, and returns from the Company's investment in the ONE Ala Moana condominium. Operating profit additionally included the sales of 43 joint venture resort residential units (12 on Oahu, 14 on Kauai, two on Maui and 15 on Hawaii Island), partially offset by joint venture expenses.
MATERIALS & CONSTRUCTION
Materials & Construction - Fourth quarter of 2015 compared with 2014
Quarter Ended December 31,
--------------------------
(dollars
in
millions) 2015 2014 Change
--------- ---- ---- ------
Revenue $53.7 $61.3 (12.4)%
Operating
profit 9.2 8.6 7.0%
Operating
profit
margin 17.1% 14.0%
--------- ----
EBITDA(1) $11.7 $10.4 12.5%
-------- ----- ----- ----
Materials and Construction revenue was $53.7 million for the fourth quarter of 2015, compared to $61.3 million for the fourth quarter of 2014. Revenue declined 12.4% primarily due to a reduction in the price of asphalt sold resulting from the decline in oil prices, partially offset by increased material and construction- and traffic-control-related product sales.
The Materials & Construction segment reported operating profit of $9.2 million and $11.7 million(1) of EBITDA for the fourth quarter of 2015. These results compare to fourth quarter 2014 operating profit of $8.6 million, and EBITDA of $10.4 million(1). The segment's performance in the fourth quarter of 2015 improved compared to last year due principally to increased tons paved and construction material sales, as well as earnings from joint ventures, partially offset by lower asphalt sales margin. Earnings from joint venture investments are not included in segment revenue, but are included in operating profit.
Materials & Construction - 2015 compared with 2014
(dollars in
millions) 2015 2014 Change
----------- ---- ---- ------
Revenue $219.0 $234.3 (6.5)%
Operating
profit $30.9 $25.9 19.3%
Operating
profit
margin 14.1% 11.1%
--------- ---- ----
EBITDA(1) $41.0 $38.0 7.9%
-------- ----- -----
Backlog at
period
end(2) $226.5 $219.4 3.2%
---------- ------ ------ ---
Materials and Construction revenue was $219.0 million in 2015, compared to $234.3 million in 2014. Revenue declined 6.5% primarily due to a reduction in the price of asphalt sold due to the decline in oil prices, partially offset by increased material and construction- and traffic-control-related product sales.
Operating profit was $30.9 million for 2015, compared to $25.9 million for 2014. The increase was primarily related to increased paving, quarrying, and material sales, as well as earnings from joint ventures, partially offset by lower asphalt sales margin.
Backlog at the end of December 31, 2015 was $226.5 million, compared to $219.4 million as of December 31, 2014. Backlog includes the entire backlog of Maui Paving, a 50 percent-owned non-consolidated affiliate.
AGRIBUSINESS
Agribusiness - Fourth quarter of 2015 compared with 2014
Quarter Ended December 31,
--------------------------
(dollars in
millions) 2015 2014 Change
----------- ---- ---- ------
Revenue $21.7 $32.3 (32.8)%
Operating
loss
(includes
$22.6
million of
sugar
cessation
costs) $(40.1) $(7.9) (5X)
------
Tons sugar
produced 37,700 46,900 (19.6)%
Tons sugar
sold (raw
and
specialty
sugar) 26,300 37,900 (30.6)%
---------- ------ ------ ------
Agribusiness revenue for the fourth quarter of 2015 decreased $10.6 million, or 32.8%, compared to the fourth quarter of 2014, due to lower raw sugar, power and molasses sales in the quarter compared to last year. The operating loss for the fourth quarter of 2015 was $40.1 million, compared to an operating loss of $7.9 million in the fourth quarter of 2014, due principally to $22.6 million of charges recognized in connection with the planned cessation of sugar operations at HC&S, lower raw sugar margin due to lower production during the year, and lower power and lower molasses margins.
Sugar production for the fourth quarter of 2015 was lower than the fourth quarter of 2014 due to a decrease in the number of acres harvested resulting from inclement weather, and lower yields. Sugar volume sold was lower in the fourth quarter of 2015, primarily due to sugar vessel improvements that allow it to carry both raw sugar and molasses to the West Coast, but lower the per voyage tonnage capacity of raw sugar that can be transported.
Agribusiness - 2015 compared with 2014
(dollars
in
millions) 2015 2014 Change
--------- ---- ---- ------
Revenue $117.2 $120.5 (2.7)%
Operating
loss
(includes
$22.6
million
of
sugar
cessation
costs) $(51.9) $(11.8) (4X)
------
Tons
sugar
produced 136,400 162,100 (15.9)%
Tons
sugar
sold
(raw
and
specialty
sugar) 152,300 154,300 (1.3)%
--------- ------- ------- -----
Agribusiness revenue decreased $3.3 million, or 2.7 percent, in 2015 as compared to 2014. The decrease was primarily due to lower power sales revenue due principally to lower deliveries under a newly amended power contract, and lower molasses revenue due to lower production and sales during the year, partially offset by higher raw sugar revenue from a higher price.
Operating loss increased $40.1 million in 2015 compared with 2014. The increase was primarily due to $22.6 million of charges recognized in connection with the planned cessation of sugar operations at HC&S, lower raw sugar margin due to lower production during the year, lower power margin from lower pricing and volume, and higher income in 2014 related to a land sale.
Sugar production in 2015 was 15.9% lower than 2014 due principally to a lower number of acres harvested as a result of inclement weather during the harvesting season, and lower yields. Tons of sugar sold was 1.3% percent lower in 2015 than in 2014, due principally to lower volume of specialty sugar sold.
OTHER INCOME STATEMENT ITEMS
Other Income Statement Items - Fourth quarter 2015 compared with 2014
Quarter Ended December 31,
--------------------------
(dollars
in
millions) 2015 2014 Change
--------- ---- ---- ------
Interest
expense $(6.6) $(7.4) 10.8%
General
corporate
expenses $(4.4) $(5.2) 15.4%
Income
tax
expense
(benefit) $(9.9) $6.2 NM
--------- ----- ---- ---
Fourth quarter 2015 interest expense was $6.6 million, compared to $7.4 million for the fourth quarter of 2014. The reduction in interest expense resulted primarily from lower levels of debt in the quarter compared to last year. Corporate expenses were $4.4 million for the fourth quarter of 2015, compared to $5.2 million for the fourth quarter of 2014. The decrease was due principally to lower professional services expenses.
Total income tax benefit for the fourth quarter of 2015 was $9.9 million, compared to $6.2 million of income tax expense in the fourth quarter of 2014. The change in income taxes was primarily due to 2015 tax benefits associated with Agribusiness losses.
Other Income Statement Items - 2015 compared with 2014
(dollars in
millions) 2015 2014 Change
----------- ---- ---- ------
Interest
expense $(26.8) $(29.0) 7.6%
General
corporate
expenses $(20.1) $(18.6) (8.1)%
Income tax
expense
(benefit) $16.5 $(1.4) NM
---------- ----- ----- ---
Interest expense for 2015 was $26.8 million compared to $29.0 million for 2014. The reduction in interest expense resulted from lower levels of debt in 2015 compared to last year. Corporate expenses were $20.1 million for 2015, compared to $18.6 million for 2014. The increase was due principally to increased professional services expenses.
Income tax expense for 2015 of $16.5 million was higher than 2014, primarily due to 2014 tax benefits associated with the KRS II solar farm investment.
ALEXANDER & BALDWIN, INC. AND SUBSIDIARIES
SEGMENT DATA & OTHER FINANCIAL INFORMATION
(In Millions, Except Per Share Amounts, Unaudited)
Three Months Ended December 31, Year Ended December 31,
------------------------------- -----------------------
Revenue: 2015 2014 2015 2014
-------- ---- ---- ---- ----
Real Estate3:
Leasing $33.3 $32.1 $133.8 $125.6
Development & Sales 22.7 39.4 131.5 150.0
Reconciling item4 (10.0) - (31.0) -
Less amounts reported
as discontinued
operations - - - (70.4)
Materials &
Construction 53.7 61.3 219.0 234.3
Agribusiness 21.7 32.3 117.2 120.5
Total revenue $121.4 $165.1 $570.5 $560.0
====== ====== ====== ======
Operating profit (loss), net income
(loss):
-----------------------------------
Real Estate3:
Leasing $13.5 $11.6 $53.1 $47.5
Development & Sales 7.5 14.2 65.0 85.7
Less amounts reported
as discontinued
operations - - - (56.2)
Materials &
Construction 9.2 8.6 30.9 25.9
Agribusiness
operations (17.5) (7.9) (29.3) (11.8)
Agribusiness cessation
costs (22.6) - (22.6) -
----- -----
Total operating profit
(loss) $(9.9) $26.5 $97.1 $91.1
Interest expense (6.6) (7.4) (26.8) (29.0)
General corporate
expenses (4.4) (5.2) (20.1) (18.6)
KRSII pre-tax income
(reduction in
carrying value), net (0.9) 0.4 (2.6) (14.7)
---- --- ---- -----
Income (loss) from
continuing operations
before income taxes (21.8) 14.3 47.6 28.8
Income tax expense
(benefit) (9.9) 6.2 16.5 (1.4)
---- --- ---- ----
Income (loss) from
continuing operations (11.9) 8.1 31.1 30.2
Income from
discontinued
operations, net of
income taxes - - - 34.3
--- --- --- ----
Net income (loss) (11.9) 8.1 31.1 64.5
Income attributable to
noncontrolling
interest (0.3) (1.1) (1.5) (3.1)
---- ---- ---- ----
Net income (loss)
attributable to A&B
shareholders (12.2) 7.0 29.6 61.4
===== === ==== ====
Basic earnings (loss) per share
attributable to A&B shareholders5:
-----------------------------------
Continuing operations $(0.29) $0.14 $0.54 $0.56
Net income (loss) $(0.29) $0.14 $0.54 $1.26
Diluted earnings (loss) per share
attributable to A&B shareholders5:
-----------------------------------
Continuing operations $(0.29) $0.14 $0.54 $0.55
Net income (loss) $(0.29) $0.14 $0.54 $1.25
Weighted average number of shares
outstanding:
---------------------------------
Basic 48.9 48.8 48.9 48.7
Diluted 48.9 49.3 49.3 49.3
ALEXANDER & BALDWIN, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEET
(In Millions, Unaudited)
December 31, December 31,
2015 2014
------------- -------------
Assets
Current
assets $152.5 $167.6
Investments
in
affiliates 416.4 418.6
Real estate
developments 183.5 224.0
Property,
net 1,269.4 1,301.7
Intangible
assets,
net 54.4 63.9
Goodwill 102.3 102.3
Other
assets 65.0 43.5
---- ----
$2,243.5 $2,321.6
======== ========
Liabilities & equity
Current
liabilities $184.7 $183.0
Long-term
debt, non-
current
portion 497.8 631.5
Deferred
income
taxes 202.1 185.7
Accrued
pension
and post-
retirement
benefits 59.7 54.8
Other non-
current
liabilities 60.5 51.8
Redeemable
noncontrolling
interest 11.6 -
Equity 1,227.1 1,214.8
------- -------
$2,243.5 $2,321.6
======== ========
ALEXANDER & BALDWIN, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED CASH FLOW TABLE
(In Millions, Unaudited)
2015 2014
---- ----
Cash flows
provided by
operating
activities: $128.5 $39.1
Cash flows from investing
activities:
Capital
expenditures
for
property,
plant and
equipment (43.4) (60.2)
Capital
expenditures
related to
1031
commercial
property
transactions (1.3) (14.9)
Proceeds
from
investment
tax credits
and grants
related to
Port Allen
Solar Farm - 4.5
Proceeds
from
disposal of
property
and other
assets 8.1 9.5
Proceeds
from
disposals
related to
1031
commercial
property
transactions 40.0 85.6
Payments for
purchases
of
investments
in
affiliates
and
preferred
investment (29.4) (75.1)
Proceeds
from
investments
in
affiliates
and
preferred
investment 44.4 36.2
Change in
restricted
cash
associated
with 1031
transactions (17.4) 0.6
Acquisition
of
business,
net of cash
(including
Grace
indemnity
holdback) $ - $(14.2)
--- --- ------
Net cash
provided by
(used in)
investing
activities $1.0 $(28.0)
---- ------
Cash flows from financing
activities:
Proceeds
from the
issuance of
long-term
debt $132.0 $283.0
Payments of
long-term
debt and
deferred
financing
costs (248.1) (224.2)
Payments on
line-of-
credit
agreements,
net (3.0) (62.3)
Distributions
to
noncontrolling
interests (1.1) (0.2)
Dividends
paid (10.3) (8.3)
Proceeds
from
issuance
(repurchase)
of capital
stock and
other, net (0.5) 0.4
---- ---
Net cash
used in
financing
activities $(131.0) $(11.6)
------- ------
Net decrease
in cash and
cash
equivalents $(1.5) $(0.5)
===== =====
USE OF NON-GAAP FINANCIAL MEASURES
The Company presents net income adjusted to exclude Agribusiness losses, which primarily reflect the performance of the soon-to-be-ceased sugar operations, and results from commercial property sales, which are generated primarily in connection with property exchanges. The Company provides this information to investors as an additional means of evaluating performance. Adjusted net income attributable to A&B shareholders should not be considered as an alternative to net income attributable to A&B shareholders (determined in accordance with GAAP) as an indicator of the Company's overall financial performance. The Company believes that net income attributable to A&B shareholders is the most directly comparable GAAP measurement to adjusted net income attributable to A&B shareholders. A reconciliation of net income attributable to A&B shareholders to adjusted net income attributable to shareholders is as follows:
Year Ended December 31,
-----------------------
(dollars in millions) 2015 2014
---- ----
Net income attributable to
A&B shareholders $29.6 $61.4
Agribusiness loss net of
taxes 33.9 5.7
Results from commercial
property sales net of taxes 1.2 (34.3)
Adjusted net income
attributable to A&B
shareholders $64.7 $32.8
===== =====
The Company presents NOI, which is a non-GAAP measure derived from Real Estate Leasing revenue (determined in accordance with GAAP, including discontinued operations, less straight-line rental adjustments) minus property operating expenses (determined in accordance with GAAP). NOI does not have any standardized meaning prescribed by GAAP, and therefore, may differ from definitions of NOI used by other companies. The Company provides this information to investors as an additional means of evaluating ongoing core operations. NOI should not be considered as an alternative to net income (determined in accordance with GAAP) 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. NOI is commonly used as a measure of operating performance because it is an indicator of the return on property investment, and provides a method of comparing property performance over time. NOI excludes general and administrative expenses, straight-line rental adjustments, interest income, interest expense, depreciation and amortization, and gains on sales of interests in real estate. The Company believes that the Real Estate Leasing segment's operating profit after discontinued operations is the most directly comparable GAAP measurement to NOI. A reconciliation of Real Estate Leasing operating profit to Real Estate Leasing segment NOI is as follows:
Three Months Ended December 31, Year Ended December 31,
------------------------------- -----------------------
(dollars in millions) 2015 2014 2015 2014
---- ---- ---- ----
Real Estate Leasing
segment operating
profit before
discontinued operations $13.5 $11.6 $53.1 $47.5
Less amounts reported in
discontinued operations - - - (0.3)
(pre-tax)
Real Estate Leasing
segment operating
profit after
subtracting
discontinued operations $13.5 $11.6 $53.1 $47.2
Adjustments:
Depreciation and
amortization 7.1 7.0 28.9 28.0
Straight-line lease
adjustments (0.2) (0.9) (2.3) (2.7)
General and
administrative expenses 0.8 1.3 3.9 4.5
Other - - 0.3 -
Discontinued operations - - - 0.3
--- --- ---
Real Estate Leasing
segment NOI $21.2 $19.0 $83.9 $77.3
===== ===== ===== =====
Percent change over
prior comparative
period 11.6% 8.5%
==== ===
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/or 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. Reconciliation of the Materials & Construction segment's operating profit to EBITDA follows:
Three Months Ended December 31, Year Ended December 31,
------------------------------- -----------------------
(dollars in millions) 2015 2014 2015 2014
---- ---- ---- ----
Materials & Construction
operating profit $9.2 $8.6 $30.9 $25.9
Depreciation & amortization
expense 2.8 2.9 11.6 15.2
Income attributable to non-
controlling interest (0.3) (1.1) (1.5) (3.1)
---- ---- ---- ----
Materials & Construction EBITDA $11.7 $10.4 $41.0 $38.0
===== ===== ===== =====
Change in Materials &
Construction EBITDA 12.5% 7.9%
==== ===
(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 December 31, 2015 and 2014 was
$13.9 million and $38.1 million,
respectively.
(3) For periods prior to the adoption
of Accounting Standards Updated
2014-08 in 2014, the Company
accounted for leased commercial
properties that it intended to
sell as discontinued operations.
4 Represents the sales of commercial
properties 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 The Company deducted $1.8 million
and $3.1 million of undistributed
earnings allocated to redeemable
noncontrolling interests from "Net
income (loss) attributable to A&B
shareholders" in calculating
"Earnings (loss) per share
attributable to A&B shareholders"
for the three months and year
ended December 31, 2015,
respectively, as follows:
Three Months Year Ended
Ended December December 31,
31,
(dollars in
millions) 2015 2015
---- ----
Net income (loss)
attributable to
A&B shareholders $(12.2) $29.6
Less: Undistributed
earnings allocated
to redeemable
noncontrolling
interest (1.8) (3.1)
Net income (loss)
available to A&B
shareholders $(14.0) $26.5
====== =====
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 approximately 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 about five million square feet of leasable space in Hawaii and on the U.S. Mainland and is the largest owner of grocery-anchored retail assets in the state. 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.
