Exhibit 99.1

 

 

 

 

Alexander & Baldwin, Inc.’s Real Estate Supplement Update

 

 

Fourth Quarter 2015

 

(Unaudited)

 

 

About This Supplement Update

 

 

This periodic Supplement Update is designed to provide current and potential shareholders of Alexander & Baldwin, Inc. with additional information regarding the Company’s Real Estate operating segments. This information is supplemental to and does not replace the information provided to shareholders in the Company’s periodic filings with the Securities and Exchange Commission.

 

This Fourth Quarter 2015 Supplement updates Tables 7-15 of the Company’s 2014 Real Estate Supplement.

 

The information contained in this Supplement Update is unaudited and should be read in conjunction with the Company’s 2014 Real Estate Supplement, 2014 Form 10-K and other filings with the SEC through the date of this Supplement Update.

 

Feedback and suggestions regarding the contents of this Supplement Update are welcomed, and should be directed to Suzy P. Hollinger, Director, Investor Relations, via telephone at (808) 525-8422 or via email to shollinger@abinc.com.

 

 

 

Alexander & Baldwin, Inc. │Real Estate Supplement Update

 

Index to Real Estate Supplement Update

(Unaudited)

 

Fourth Quarter 2015

 

 

Forward-Looking Statements	2
Basis of Presentation	2
Real Estate Leasing Segment – Asset Descriptions and Statistics	3
Property Detail – Hawaii (Table 7)	3
Property Detail – Mainland (Table 8)	5
Comparable % Occupancy Data by Geographic Region and Asset Class (Table 9)	6
Weighted Average Gross Leasable Area by Geographic Region and Asset Class (Table 10)	6
Occupancy Trend Analysis – Last Five Quarters (Table 11)	6
Real Estate Leasing Net Operating Income (NOI) (Table 12)	7
Real Estate Leasing Same Store NOI (Table 13)	7
Statement on Management’s Use of Non-GAAP Financial Measures	8
Reconciliation of Real Estate Leasing Operating Profit to NOI and Same Store NOI (Table 14)	8
Portfolio Acquisitions and Dispositions	9
2015 and 2014 Improved Property Portfolio Acquisitions/Dispositions (Table 15)	9

 

 

Forward-Looking Statements

 

Statements in this Supplement Update 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 Supplement Update 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 Supplement Update, which identify important factors that could affect the forward-looking statements in this Supplement Update. We do not undertake any obligation to update our forward-looking statements.

 

Basis of Presentation

 

 

The information contained in this Supplement Update does not purport to disclose all items required by accounting principles generally accepted in the United States of America (GAAP). The information contained in this Supplement Update is unaudited and should be read in conjunction with Alexander & Baldwin, Inc.’s 2014 Real Estate Supplement, 2014 Form 10-K and other filings with the SEC through the date of this Supplement Update.

 

 

Real Estate Leasing Segment – Asset Descriptions and Statistics

 

Table 7

Property Detail - Hawaii

 

Property		Number of properties at 12/31/15				Island				Gross leasable area at 12/31/15 (sq. ft.)				Leased1 (percent)				Outstanding debt ($ in 000s)				4Q2015 NOI2 ($ in 000s)				4Q2015 % NOI to total Hawaii portfolio
Retail:
Pearl Highlands Center			1				Oahu				415,400				96			$	91,835			$	2,194				13.3
Kailua Retail			16				Oahu				414,300				93				10,992				3,096				18.8
Waianae Mall			1				Oahu				170,300				86				-				411				2.5
Kaneohe Bay Shopping Center3			1				Oahu				125,100				100				-				548				3.3
Waipio Shopping Center			1				Oahu				113,800				95				-				764				4.6
The Shops at Kukui'ula			1				Kauai				89,000				98				37,033				753				4.6
Lanihau Marketplace			1				Hawaii				88,300				99				-				397				2.4
Kunia Shopping Center			1				Oahu				60,400				87				-				480				2.9
Lahaina Square			1				Maui				50,200				73				-				113				0.7
Kahului Shopping Center			1				Maui				49,700				97				-				122				0.7
Napili Plaza			1				Maui				45,700				88				-				209				1.3
Gateway at Mililani Mauka			1				Oahu				34,900				94				-				317				1.9
Port Allen Marina Center			1				Kauai				23,600				84				-				106				0.7
Subtotal – Retail			28								1,680,700				93			$	139,860			$	9,510				57.7
Industrial:
Komohana Industrial Park4			1				Oahu				238,300				100			$	-			$	1,014				6.1
Kakaako Commerce Center			1				Oahu				204,400				93				-				555				3.4
Waipio Industrial			1				Oahu				158,400				99				-				534				3.2
P&L Building			1				Maui				104,100				98				-				305				1.8
Kailua Industrial/Other			6				Oahu				68,800				96				-				198				1.2
Port Allen			3				Kauai				63,800				89				-				145				0.9
Subtotal – Industrial			13								837,800				97			$	-			$	2,751				16.6
Office:
Kahului Office Building			1				Maui				59,600				82			$	-			$	305				1.9
Kahului Office Center			1				Maui				33,400				89				-				207				1.3
Stangenwald Building			1				Oahu				27,100				84				-				82				0.5
Judd Building5			1				Oahu				20,200				86				-				2				0.0
Gateway at Mililani Mauka South			1				Oahu				18,700				100				-				171				1.0
Maui Clinic Building			1				Maui				16,600				46				-				20				0.1
Lono Center			1				Maui				13,700				95				-				69				0.4
Subtotal – Office			7								189,300				83			$	-			$	856				5.2

 

Table 7 continued on the next page

 

 

Table 7

Property Detail - Hawaii (Continued from previous page)

 

Property		Number of properties at 12/31/15				Island		Gross leasable area at 12/31/15 (sq. ft.)				Leased1 (percent)				Outstanding debt ($ in 000s)				4Q2015 NOI2 ($ in 000s)				4Q2015 % NOI to total Hawaii portfolio
Ground Leases
Kailua			20 acres			Oahu			-							$	-			$	904				5.5
Other Oahu			22 acres			Oahu			-								-				1,207				7.3
Neighbor Island			2,691 acres6			Neighbor Island			-								-				1,263				7.7
Subtotal - Ground Leases			2,733 acres						-							$	-			$	3,374				20.5
Total Hawaii			48						2,707,800				94			$	139,860			$	16,491				100.0

 

1

Represents the average percentage of space leased during the period referenced or A&B’s ownership period, whichever is shorter. Space is considered leased when a tenancy agreement has been fully executed or the space is revenue producing.

2	See page 8 for a statement regarding the Company’s use of non-GAAP financial measures and a reconciliation of Leasing operating profit to NOI for the total portfolio.

3	Kaneohe Bay Shopping Center is a leasehold property.

4	Includes ground leased income.

5	NOI for the quarter was lower due to a tenant rent credit related to the impact of a fire at the building.

6	Includes 64 ground leased urban acres.

 

 

Note:

For portfolio asset class and geographic occupancy see Table 9 on page 6. Gross leasable area is periodically adjusted based on remeasurement or reconfiguration of space

 

 

Table 8

Property Detail - Mainland

 

Property		Number of properties at 12/31/15				Location		Gross leasable area at 12/31/15 (sq. ft.)				Leased1 (percent)				Outstanding debt ($ in 000s)				4Q2015 NOI2 ($ in 000s)				4Q2015 % NOI to total Mainland portfolio
Retail:
Little Cottonwood Center			1			Sandy, UT			141,500				92			$	-			$	372				8.4
Royal MacArthur Center			1			Dallas, TX			44,800				96				-				247				5.6
Subtotal – Retail			2						186,300				93			$	-			$	619				14.0
Industrial:
Midstate Hayes			1			Visalia, CA			790,200				100			$	8,243			$	709				15.9
Sparks Business Center			1			Sparks, NV			396,100				96				-				427				9.6
Subtotal – Industrial			2						1,186,300				99			$	8,243			$	1,136				25.5
Office:
1800 and 1820 Preston Park			1			Plano, TX			198,800				89			$	-			$	983				22.1
Ninigret Office Park			1			Salt Lake City, UT			185,500				100				-				514				11.6
2868 Prospect Park			1			Sacramento, CA			163,300				100				-				565				12.7
Concorde Commerce Center			1			Phoenix, AZ			138,700				91				-				437				9.8
Deer Valley Financial Center			1			Phoenix, AZ			126,600				60				-				51				1.1
Gateway Oaks			1			Sacramento, CA			59,700				92				-				142				3.2
Subtotal – Office			6						872,600				89			$	-			$	2,692				60.5
Total Mainland			10						2,245,200				94			$	8,243			$	4,447				100.0

 

1

Represents the average percentage of space leased during the period referenced or A&B’s ownership period, whichever is shorter. Space is considered leased when a tenancy agreement has been fully executed or the space is revenue producing.

2

See page 8 for a statement regarding the Company’s use of non-GAAP financial measures and a reconciliation of Leasing operating profit to NOI for the total portfolio.

 

Note:

For portfolio asset class and geographic occupancy see Table 9 on page 6. Gross leasable area is periodically adjusted based on remeasurement or reconfiguration of space.

 

 

Table 9

Comparable % Occupancy Data by Geographic Region and Asset Class

 

		4Q 2015																4Q 2014																Percentage point change
Location		Retail				Industrial				Office				Total				Retail				Industrial				Office				Total				Retail				Industrial				Office				Total
Hawaii improved			93				97				83				94				94				98				84				94				(1	)			(1	)			(1	)			-
Mainland improved			93				99				89				94				90				99				89				94				3				-				-				-
Total			93				98				88				94				93				99				88				94				-				(1	)			-				-

 

Table 10

Weighted Average Gross Leasable Area by Geographic Region and Asset Class

 

		4Q 2015 (in sq. ft.)																4Q 2014 (in sq. ft.)																Percentage Change
Location		Retail				Industrial				Office				Total				Retail				Industrial				Office				Total				Retail				Industrial				Office				Total
Hawaii improved			1,680,700				837,800				189,300				2,707,800				1,553,400				701,600				189,000				2,444,000				8.2				19.4				0.2				10.8
Mainland improved			186,300				1,186,300				928,600				2,301,200				232,800				1,186,300				1,127,100				2,546,200				(20.0	)			-				(17.6	)			(9.6	)
Total			1,867,000				2,024,100				1,117,900				5,009,000				1,786,200				1,887,900				1,316,100				4,990,200				4.5				7.2				(15.1	)			0.4

 

Table 11

Occupancy Trend Analysis – Last Five Quarters¹

 

		4Q2015												3Q2015												2Q2015												1Q2015												4Q2014
		Number of properties				Weighted average sq. ft.				Percent Leased				Number of properties				Weighted average sq. ft.				Percent Leased				Number of properties				Weighted average sq. ft.				Percent Leased				Number of properties				Weighted average sq. ft.				Percent Leased				Number of properties				Weighted average sq. ft.				Percent Leased
Retail			30				1,867,000				93				30				1,856,900				94				30				1,856,900				94				29				1,773,900				94				30				1,786,200				93
Industrial			15				2,024,100				98				15				2,024,100				97				15				2,024,100				97				15				2,024,100				98				15				1,887,900				99
Office			13				1,117,900				88				14				1,145,900				91				14				1,145,900				91				15				1,317,800				88				15				1,316,100				88
Total			58				5,009,000				94				59				5,026,900				95				59				5,026,900				94				59				5,115,800				94				60				4,990,200				94

 

1

Number of properties is as of quarter end.

 

Note: Gross leasable area is periodically adjusted based on remeasurement of reconfiguration of space.

 

 

 

Table 12

Real Estate Leasing Net Operating Income (NOI)

(in millions)

 

		4Q 2015																4Q 2014																Percentage Change
Location		Retail				Industrial				Office				Total				Retail				Industrial				Office				Total				Retail				Industrial				Office				Total
Hawaii improved		$	9.5			$	2.8			$	0.8			$	13.1			$	8.7			$	2.3			$	0.8			$	11.8				9.2				21.7				-				11.0
Hawaii unimproved			-				-				-				3.4				-				-				-				3.0				-				-				-				13.3
Total Hawaii		$	9.5			$	2.8			$	0.8			$	16.5			$	8.7			$	2.3			$	0.8			$	14.8				9.2				21.7				-				11.5
Mainland improved			0.6				1.1				3.0				4.7				0.5				1.2				2.5				4.2				20.0				(8.3	)			20.0				11.9
Total		$	10.1			$	3.9			$	3.8			$	21.2			$	9.2			$	3.5			$	3.3			$	19.0				9.8				11.4				15.2				11.6

 

Table 13

Real Estate Leasing Same Store NOI¹

(in millions)

 

		4Q 2015																4Q 2014																Percentage Change
Location		Retail				Industrial				Office				Total				Retail				Industrial				Office				Total				Retail				Industrial				Office				Total
Hawaii improved		$	8.8			$	2.2			$	0.9			$	11.9			$	8.4			$	2.1			$	0.8			$	11.3				4.8				4.8				12.5				5.3
Hawaii unimproved			-				-				-				3.4				-				-				-				3.0				-				-				-				13.3
Total Hawaii		$	8.8			$	2.2			$	0.9			$	15.3			$	8.4			$	2.1			$	0.8			$	14.3				4.8				4.8				12.5				7.0
Mainland improved			0.6				1.1				2.7				4.4				0.6				1.2				1.9				3.7				-				(8.3	)			42.1				18.9
Total		$	9.4			$	3.3			$	3.6			$	19.7			$	9.0			$	3.3			$	2.7			$	18.0				4.4				-				33.3				9.4

 

1

Same Store NOI relates to properties that were operated throughout the duration of both periods under comparison.

 

Note: See page 8 for a statement on the Company’s use of non-GAAP financial measures and a reconciliation of Leasing operating profit to Real Estate Leasing NOI and Real Estate Leasing same store NOI.

 

 

Statement on Management’s 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. The Company also calculates NOI for properties that were owned throughout the entire duration of both periods under comparison and refers to this calculation as “same-store NOI.” A reconciliation of Real Estate Leasing segment operating profit to Real Estate Leasing segment NOI and same-store NOI is as follows:

 

Table 14

Reconciliation of Real Estate Operating Profit to NOI and Same Store NOI¹ (Non-GAAP)

(in millions)

 

		4Q 2015				4Q 2014
Real Estate Leasing segment operating profit before discontinued operations		$	13.5			$	11.6
Less amounts reported in discontinued operations			-				-
Real Estate Leasing segment operating profit after subtracting discontinued operations		$	13.5			$	11.6
Adjustments:
Depreciation and amortization		$	7.1			$	7.0
Straight-line lease adjustments			(0.2	)			(0.9	)
General and administrative expenses			0.8				1.3
Real Estate Leasing segment NOI		$	21.2			$	19.0
Acquisitions/ disposition and other adjustments			(1.5	)			(1.0	)
Real Estate Leasing segment same store NOI1		$	19.7			$	18.0

 

1

NOI related to properties that were operated throughout the duration of both periods under comparison.

 

 

Portfolio Acquisitions and Dispositions

 

Table 15

2015 Property Portfolio Acquisitions/Dispositions

 

Property acquired in 2015

Acquisition date (month/year)

Acquisition price (in millions)

Gross leasable area (sq. ft.)

Leased percentage at acquisition

Aikahi Park Shopping Center - Leasehold Improvements

5/15

$

2

98,000

86

 

 

Property disposed in 2015		Disposition date (month/year)				Disposition price (in millions)				Gross leasable area (sq. ft.)				Leased percentage at disposition
Union Bank			12/15			$	10				84,000				53
San Pedro Plaza			5/15			$	17				171,900				69
Wilshire Shopping Center			3/15			$	4				46,500				72
Total						$	31				302,400

 

2014 Property Portfolio Acquisitions/Dispositions

 

Property acquired in 2014

Acquisition date (month/year)

Acquisition price (in millions)

Gross leasable area (sq. ft.)

Leased percentage at acquisition

Kakaako Commerce Center

12/14

$

39

204,400

90

 

Property disposed in 2014

Disposition date (month/year)

Disposition price (in millions)

Gross leasable area (sq. ft.)

Leased percentage at disposition

Maui Mall

1/14

$

64

185,700

97