EX-99.1 2 v417023_ex99-1.htm EXHIBIT 99.1

 

Exhibit 99.1

 

 

 

 

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

 

 

 

Second 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 Second 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)

 

Second 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

 

1
 

 

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.

 

2
 

 

Real Estate Leasing Segment – Asset Descriptions and Statistics

 

 

Table 7

Property Detail - Hawaii

 

Property  Number of
properties
at 06/30/15		   Island  Gross
leasable
area at
06/30/15
(sq. ft.)		   Leased1
(percent)		   Outstanding
debt
($ in 000s)		   2Q2015
NOI2
($ in 000s)		   2Q2015 % NOI
to total Hawaii
portfolio		 
Retail:                                 
Pearl Highlands Center   1   Oahu   415,400    97   $92,706   $2,356    13.8 
Kailua Retail3   16   Oahu   414,300    94    11,087    2,903    17.0 
Waianae Mall   1   Oahu   170,300    87    -    655    3.8 
Kaneohe Bay Shopping Center4   1   Oahu   125,100    99    -    550    3.2 
Waipio Shopping Center   1   Oahu   113,800    94    -    763    4.5 
Lanihau Marketplace   1   Hawaii   88,300    99    -    488    2.8 
The Shops at Kukui'ula   1   Kauai   78,900    93    38,763    482    2.8 
Kunia Shopping Center   1   Oahu   60,400    92    -    547    3.2 
Lahaina Square   1   Maui   50,200    79    -    173    1.0 
Kahului Shopping Center   1   Maui   49,700    99    -    132    0.8 
Napili Plaza   1   Maui   45,700    88    -    330    1.9 
Gateway at Mililani Mauka   1   Oahu   34,900    84    -    308    1.8 
Port Allen Marina Center   1   Kauai   23,600    79    -    97    0.6 
Subtotal – Retail   28       1,670,600    94   $142,556   $9,784    57.2 
                                  
Industrial:                                 
Komohana Industrial Park5   1   Oahu   238,300    100   $-   $1,029    6.0 
Kakaako Commerce Center   1   Oahu   204,400    88    -    554    3.2 
Waipio Industrial   1   Oahu   158,400    98    -    560    3.3 
P&L Building   1   Maui   104,100    90    -    287    1.7 
Kailua Industrial/Other   6   Oahu   68,800    96    -    138    0.8 
Port Allen   3   Kauai   63,800    84    -    135    0.8 
Subtotal – Industrial   13       837,800    94   $-   $2,703    15.8 
                                  
Office:                                 
Kahului Office Building   1   Maui   59,600    82   $-   $362    2.1 
Kahului Office Center   1   Maui   33,400    91    -    215    1.2 
Stangenwald Building   1   Oahu   27,100    84    -    74    0.4 
Judd Building   1   Oahu   20,200    71    -    36    0.2 
Gateway at Mililani Mauka South   1   Oahu   18,700    100    -    200    1.2 
Maui Clinic Building   1   Maui   16,600    53    -    46    0.3 
Lono Center   1   Maui   13,700    92    -    85    0.5 
Subtotal – Office   7       189,300    83   $-   $1,018    5.9 

 

Table 7 continued on the next page

 

3
 

 

Table 7

Property Detail - Hawaii (Continued from previous page)

 

Property  Number of
properties
at 06/30/15		  Island  Gross
leasable
area at
06/30/15
(sq. ft.)		   Leased1
(percent)		   Outstanding
debt
($ in 000s)		   2Q2015
NOI2
($ in 000s)		   2Q2015 % NOI
to total Hawaii
portfolio		 
Ground Leases                               
Kailua3  20 acres  Oahu   -        $-   $1,610    9.4 
Other Oahu  23 acres  Oahu   -         -    1,202    7.0 
Neighbor Island  2,808 acres6 Kauai, Maui, Hawaii   -         -    795    4.6 
Subtotal - Ground Leases   2,851 acres      -        $-   $3,607    21.1 
Total Hawaii  48      2,697,700    93   $142,556   $17,112    100.0 

 

 

1Represents 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.
2See 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.
3On May 1, 2015, the Company acquired the ground leasee’s interest in Aikahi Park Shopping Center in Kailua. NOI prior to the close date is included in Kailua Ground Leases and NOI after the close date is included in Kailua Retail.
4Kaneohe Bay Shopping Center is a leasehold property.
5Includes ground leased income.
6Includes 64 of 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.

 

4
 

 

Table 8

Property Detail - Mainland

 

Property  Number of
properties
at 06/30/15		  Location  Gross
leasable
area at
06/30/15
(sq. ft.)		   Leased1
(percent)		   Outstanding
debt
($ in 000s)		   2Q2015
NOI2
($ in 000s)		   2Q2015 %
NOI to total
Mainland
portfolio		 
Retail:                               
Little Cottonwood Center  1  Sandy, UT   141,500    93   $-   $364    8.5 
Royal MacArthur Center  1  Dallas, TX   44,800    96    -    304    7.1 
Subtotal – Retail  2      186,300    94   $-   $668    15.6 
                                
Industrial:                               
Midstate Hayes  1  Visalia, CA   790,200    100   $8,256   $728    17.0 
Sparks Business Center  1  Sparks, NV   396,100    96    -    427    10.0 
Subtotal – Industrial  2      1,186,300    99   $8,256   $1,155    27.0 
                                
Office:                               
1800 and 1820 Preston Park  1  Plano, TX   198,800    92   $-   $473    11.0 
Ninigret Office Park  1  Salt Lake City, UT   185,500    100    -    529    12.4 
2868 Prospect Park  1  Sacramento, CA   163,300    100    -    545    12.7 
Concorde Commerce Center  1  Phoenix, AZ   138,700    92    -    303    7.1 
Deer Valley Financial Center  1  Phoenix, AZ   126,600    75    -    116    2.7 
Union Bank  1  Everett, WA   84,000    100    -    350    8.2 
Gateway Oaks  1  Sacramento, CA   59,700    92    -    141    3.3 
Subtotal – Office  7      956,600    92   $-   $2,457    57.4 
                                
Total Mainland  11      2,329,200    95   $8,256   $4,280    100.0 

 

 

1Represents 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.
2See 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.

 

5
 

 

Table 9

Comparable % Occupancy Data by Geographic Region and Asset Class

 

   2Q 2015   2Q 2014   Percentage point change 
Location  Retail   Industrial   Office   Total   Retail   Industrial   Office   Total   Retail   Industrial   Office   Total 
Hawaii improved   94    94    83    93    93    98    81    93    1    (4)   2    - 
Mainland improved   94    99    92    95    91    97    90    93    3    2    2    2 
Total   94    97    91    94    92    98    88    93    2    (1)   3    1 

 

Table 10

Weighted Average Gross Leasable Area by Geographic Region and Asset Class

 

   2Q 2015 (in sq. ft.)   2Q 2014 (in sq. ft.)   Percentage Change 
Location  Retail   Industrial   Office   Total   Retail   Industrial   Office   Total   Retail   Industrial   Office   Total 
Hawaii improved   1,670,600    837,800    189,300    2,697,700    1,553,400    633,400    189,000    2,375,800    7.5    32.3    0.2    13.5 
Mainland improved   186,300    1,186,300    956,600    2,329,200    232,800    1,186,300    1,127,100    2,546,200    (20.0)   -    (15.1)   (8.5)
Total   1,856,900    2,024,100    1,145,900    5,026,900    1,786,200    1,819,700    1,316,100    4,922,000    4.0    11.2    (12.9)   2.1 

 

Table 11

Occupancy Trend Analysis – Last Five Quarters1

 

   2Q2015   1Q2015   4Q2014   3Q2014   2Q2014 
   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    1,856,900    94    29    1,773,900    94    30    1,786,200    93    30    1,786,200    92    30    1,786,200    92 
Industrial   15    2,024,100    97    15    2,024,100    98    15    1,887,900    99    14    1,819,700    99    14    1,819,700    98 
Office   14    1,145,900    91    15    1,317,800    88    15    1,316,100    88    15    1,316,100    88    15    1,316,100    88 
Total   59    5,026,900    94    59    5,115,800    94    60    4,990,200    94    59    4,922,000    94    59    4,922,000    93 

 

 

1Number of properties is as of quarter end.

 

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

 

6
 

 

Table 12

Real Estate Leasing Net Operating Income (NOI)

(in millions)

 

   2Q 2015   2Q 2014   Percentage Change 
Location  Retail   Industrial   Office   Total   Retail   Industrial   Office   Total   Retail   Industrial   Office   Total 
Hawaii improved  $9.7   $2.7   $1.0   $13.4   $8.8   $2.1   $0.9   $11.8    10.2    28.6    11.1    13.6 
Hawaii unimproved   -    -    -    3.6    -    -    -    3.1    -    -    -    16.1 
Total Hawaii  $9.7   $2.7   $1.0   $17.0   $8.8   $2.1   $0.9   $14.9    10.2    28.6    11.1    14.1 
Mainland improved   0.7    1.2    2.5    4.4    0.7    1.2    2.8    4.7    -    -    (10.7)   (6.4)
Total  $10.4   $3.9   $3.5   $21.4   $9.5   $3.3   $3.7   $19.6    9.5    18.2    (5.4)   9.2 

 

Table 13

Real Estate Leasing Same Store NOI1

(in millions)

 

Location

  Retail   Industrial   Office   Total   Retail   Industrial   Office   Total   Retail   Industrial   Office   Total 
Hawaii improved  $9.5   $2.1   $1.0   $12.6   $8.6   $2.1   $0.9   $11.6    10.5    -    11.1    8.6 
Hawaii unimproved   -    -    -    3.6    -    -    -    3.1    -    -    -    16.1 
Total Hawaii  $9.5   $2.1   $1.0   $16.2   $8.6   $2.1   $0.9   $14.7    10.5    -    11.1    10.2 
Mainland improved   0.7    1.2    2.4    4.3    0.6    1.1    2.6    4.3    16.7    9.1    (7.7)   - 
Total  $10.2   $3.3   $3.4   $20.5   $9.2   $3.2   $3.5   $19.0    10.9    3.1    (2.9)   7.9 

 

 

1Same 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.

 

7
 

 

Statement on Management’s Use of Non-GAAP Financial Measures

 

 

Net operating income (NOI) is a non-GAAP measure derived from real estate revenues (determined in accordance with GAAP, 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. 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 and same store NOI is as follows:

 

Table 14

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

(in millions)

 

   2Q 2015   2Q 2014 
Real Estate Leasing segment operating profit before discontinued operations  $13.9   $12.0 
Less amounts reported in discontinued operations   -    - 
Real Estate Leasing segment operating profit after subtracting discontinued operations  $13.9   $12.0 
Adjustments:          
Depreciation and amortization  $7.2   $7.1 
Straight-line lease adjustments   (0.7)   (0.6)
General and administrative expenses   0.7    1.1 
Other   0.3    - 
Real Estate Leasing segment NOI  $21.4   $19.6 
Acquisitions/ disposition and other adjustments   (0.9)   (0.6)
Real Estate Leasing segment same store NOI1  $20.5   $19.0 

 

 

1NOI related to properties that were operated throughout the duration of both periods under comparison.

 

8
 

 

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 - Improved Property  5/15  $  2    98,011    86 

 

Property disposed in 2015  Disposition date
(month/year)		  Disposition price
(in millions)		   Gross leasable
area (sq. ft.)		   Leased percentage
at disposition		 
San Pedro Plaza  5/15  $17    171,900    69 
Wilshire Shopping Center  3/15  $4    46,500    72 
Total     $21   $218,400      

 

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 

 

9