x | QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE |
SECURITIES EXCHANGE ACT OF 1934 | |
For the quarterly period ended March 31, 2016 |
o | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE |
SECURITIES EXCHANGE ACT OF 1934 | |
For the transition period from ______________________ to _________________ |
Hawaii | 45-4849780 |
(State or other jurisdiction of incorporation or organization) | (I.R.S. Employer Identification No.) |
P. O. Box 3440, Honolulu, Hawaii 822 Bishop Street, Honolulu, Hawaii (Address of principal executive offices) | 9680l 96813 (Zip Code) |
Large accelerated filer x | Accelerated filer o |
Non-accelerated filer o (Do not check if a smaller reporting company) | Smaller reporting company o |
Quarter Ended March 31, | |||||||
2016 | 2015 | ||||||
Operating Revenue: | |||||||
Real estate leasing | $ | 34.8 | $ | 32.7 | |||
Real estate development and sales | 0.3 | 32.2 | |||||
Materials and construction | 50.7 | 56.9 | |||||
Agribusiness | 23.0 | 28.9 | |||||
Total operating revenue | 108.8 | 150.7 | |||||
Operating Costs and Expenses: | |||||||
Cost of real estate leasing | 20.7 | 19.6 | |||||
Cost of real estate development and sales | 0.1 | 21.3 | |||||
Cost of construction contracts and materials | 39.4 | 45.8 | |||||
Cost of agribusiness revenue | 21.7 | 26.8 | |||||
Selling, general and administrative | 16.6 | 14.6 | |||||
HC&S cessation costs | 15.5 | — | |||||
Gain on the sale of improved property | — | (1.9 | ) | ||||
Total operating costs and expenses | 114.0 | 126.2 | |||||
Operating Income (Loss) | (5.2 | ) | 24.5 | ||||
Other Income and (Expense): | |||||||
Income related to joint ventures | 2.1 | 24.0 | |||||
Reduction in KRS II carrying value | — | (0.1 | ) | ||||
Interest income and other | 0.3 | 0.2 | |||||
Interest expense | (6.9 | ) | (7.1 | ) | |||
Income (Loss) Before Income Taxes | (9.7 | ) | 41.5 | ||||
Income tax expense (benefit) | (2.7 | ) | 15.6 | ||||
Net Income (Loss) | (7.0 | ) | 25.9 | ||||
Income attributable to noncontrolling interest | (0.5 | ) | (0.6 | ) | |||
Net Income (Loss) Attributable to A&B Shareholders | $ | (7.5 | ) | $ | 25.3 | ||
Earnings (Loss) Per Share (Note 4): | |||||||
Basic - Net income (loss) available to A&B shareholders | $ | (0.15 | ) | $ | 0.52 | ||
Diluted - Net income (loss) available to A&B shareholders | $ | (0.15 | ) | $ | 0.51 | ||
Weighted Average Number of Shares Outstanding: | |||||||
Basic | 48.9 | 48.8 | |||||
Diluted | 48.9 | 49.3 | |||||
Cash dividends per share | $ | 0.06 | $ | 0.05 |
Quarter Ended March 31, | |||||||
2016 | 2015 | ||||||
Net Income (Loss) | $ | (7.0 | ) | $ | 25.9 | ||
Other Comprehensive Income: | |||||||
Defined benefit pension plans: | |||||||
Amortization of prior service credit included in net periodic pension cost | (0.3 | ) | (0.3 | ) | |||
Amortization of net loss included in net periodic pension cost | 1.8 | 1.1 | |||||
Income taxes related to other comprehensive income | (0.5 | ) | (0.3 | ) | |||
Other Comprehensive Income | 1.0 | 0.5 | |||||
Comprehensive Income (Loss) | $ | (6.0 | ) | $ | 26.4 | ||
Comprehensive income attributable to noncontrolling interest | (0.5 | ) | (0.6 | ) | |||
Comprehensive income (loss) attributable to A&B shareholders | $ | (6.5 | ) | $ | 25.8 |
March 31, 2016 | December 31, 2015 | ||||||
ASSETS | |||||||
Current Assets: | |||||||
Cash and cash equivalents | $ | 3.5 | $ | 1.3 | |||
Accounts and other notes receivable, net | 38.0 | 38.6 | |||||
Contracts retention | 12.1 | 11.5 | |||||
Costs and estimated earnings in excess of billings on uncompleted contracts | 14.3 | 16.3 | |||||
Inventories | 63.7 | 55.9 | |||||
Income tax receivable | 11.6 | 14.0 | |||||
Prepaid expenses and other assets | 14.7 | 14.9 | |||||
Total current assets | 157.9 | 152.5 | |||||
Investments in Affiliates | 422.7 | 416.4 | |||||
Real Estate Developments | 184.9 | 183.5 | |||||
Property – net | 1,337.1 | 1,269.4 | |||||
Intangible Assets - net | 60.4 | 54.4 | |||||
Goodwill | 102.3 | 102.3 | |||||
Other Assets | 53.7 | 63.8 | |||||
Total assets | $ | 2,319.0 | $ | 2,242.3 | |||
LIABILITIES AND EQUITY | |||||||
Current Liabilities: | |||||||
Notes payable and current portion of long-term debt | $ | 91.9 | $ | 90.4 | |||
Accounts payable | 28.8 | 35.5 | |||||
Billings in excess of costs and estimated earnings on uncompleted contracts | 2.6 | 2.6 | |||||
Accrued interest | 3.7 | 5.5 | |||||
Deferred revenue | 1.9 | 0.1 | |||||
Indemnity holdback related to Grace acquisition | 9.3 | 9.3 | |||||
HC&S cessation related liabilities - current | 14.6 | 6.4 | |||||
Accrued and other liabilities | 33.4 | 34.9 | |||||
Total current liabilities | 186.2 | 184.7 | |||||
Long-term Liabilities: | |||||||
Long-term debt | 591.8 | 496.6 | |||||
Deferred income taxes | 197.7 | 202.1 | |||||
Accrued pension and postretirement benefits | 59.5 | 59.7 | |||||
Other non-current liabilities | 52.3 | 60.5 | |||||
Total long-term liabilities | 901.3 | 818.9 | |||||
Commitments and Contingencies (Note 3) | |||||||
Redeemable Noncontrolling Interest | 11.6 | 11.6 | |||||
Equity: | |||||||
Common stock | 1,153.8 | 1,151.7 | |||||
Accumulated other comprehensive loss | (44.3 | ) | (45.3 | ) | |||
Retained earnings | 106.8 | 117.2 | |||||
Total A&B Shareholders' equity | 1,216.3 | 1,223.6 | |||||
Noncontrolling interest | 3.6 | 3.5 | |||||
Total equity | 1,219.9 | 1,227.1 | |||||
Total liabilities and equity | $ | 2,319.0 | $ | 2,242.3 |
Three Months Ended | |||||||
March 31, | |||||||
2016 | 2015 | ||||||
Cash Flows from Operating Activities: | $ | 5.5 | $ | 26.8 | |||
Cash Flows from Investing Activities: | |||||||
Capital expenditures for property, plant and equipment | (92.1 | ) | (8.6 | ) | |||
Capital expenditures related to 1031 commercial property transactions | (6.3 | ) | — | ||||
Proceeds from disposal of property and other assets | — | 5.1 | |||||
Proceeds from disposals related to 1031 commercial property transactions | — | 4.6 | |||||
Payments for purchases of investments in affiliates | (5.4 | ) | (11.1 | ) | |||
Proceeds from investments in affiliates | 0.3 | 33.4 | |||||
Change in restricted cash associated with 1031 transactions | 6.3 | — | |||||
Net cash provided by (used in) investing activities | (97.2 | ) | 23.4 | ||||
Cash Flows from Financing Activities: | |||||||
Proceeds from issuances of long-term debt | 122.0 | 20.0 | |||||
Payments of long-term debt and deferred financing costs | (22.6 | ) | (68.5 | ) | |||
Borrowings (payments) under line-of-credit, net | (2.9 | ) | 3.3 | ||||
Dividends paid | (2.9 | ) | (2.5 | ) | |||
Distributions to non-controlling interest | (0.5 | ) | (1.1 | ) | |||
(Repurchase) proceeds from issuance of capital stock and other, net | 0.8 | (0.8 | ) | ||||
Net cash provided by (used in) financing activities | 93.9 | (49.6 | ) | ||||
Cash and Cash Equivalents: | |||||||
Net increase for the period | 2.2 | 0.6 | |||||
Balance, beginning of period | 1.3 | 2.8 | |||||
Balance, end of period | $ | 3.5 | $ | 3.4 | |||
Other Cash Flow Information: | |||||||
Interest paid | $ | 8.6 | $ | 9.7 | |||
Other Non-cash Information: | |||||||
Capital expenditures included in accounts payable and accrued expenses | $ | 4.5 | $ | 4.2 |
Total Equity | |||||||||||||||||||||||||||
Accumulated | Redeem- | ||||||||||||||||||||||||||
Common | Other | able | |||||||||||||||||||||||||
Stock | Compre- | Non- | Non- | ||||||||||||||||||||||||
Stated | hensive | Retained | Controlling | Controlling | |||||||||||||||||||||||
Shares | Value | Loss | Earnings | interest | Total | interest | |||||||||||||||||||||
Balance, December 31, 2014 | 48.8 | $ | 1,147.3 | $ | (44.4 | ) | $ | 101.0 | $ | 10.9 | $ | 1,214.8 | $ | — | |||||||||||||
Net income | 25.3 | 0.6 | 25.9 | — | |||||||||||||||||||||||
Other comprehensive income, net of tax | 0.5 | 0.5 | |||||||||||||||||||||||||
Dividends paid on common stock ($0.05 per share) | (2.5 | ) | (2.5 | ) | |||||||||||||||||||||||
Share-based compensation | 1.2 | 1.2 | |||||||||||||||||||||||||
Shares issued or repurchased, net | — | (0.9 | ) | — | (0.9 | ) | |||||||||||||||||||||
Balance, March 31, 2015 | 48.8 | $ | 1,147.6 | $ | (43.9 | ) | $ | 123.8 | $ | 11.5 | $ | 1,239.0 | $ | — |
Total Equity | |||||||||||||||||||||||||||
Accumulated | Redeem- | ||||||||||||||||||||||||||
Common | Other | able | |||||||||||||||||||||||||
Stock | Compre- | Non- | Non- | ||||||||||||||||||||||||
Stated | hensive | Retained | Controlling | Controlling | |||||||||||||||||||||||
Shares | Value | Loss | Earnings | interest | Total | interest | |||||||||||||||||||||
Balance, December 31, 2015 | 48.9 | $ | 1,151.7 | $ | (45.3 | ) | $ | 117.2 | $ | 3.5 | $ | 1,227.1 | $ | 11.6 | |||||||||||||
Net (loss) income | (7.5 | ) | 0.1 | (7.4 | ) | 0.4 | |||||||||||||||||||||
Other comprehensive income, net of tax | 1.0 | 1.0 | |||||||||||||||||||||||||
Dividends paid on common stock ($0.06 per share) | (3.0 | ) | (3.0 | ) | |||||||||||||||||||||||
Distributions to noncontrolling interest | — | (0.1 | ) | ||||||||||||||||||||||||
Adjustments to redemption value of redeemable noncontrolling interest | 0.3 | 0.3 | (0.3 | ) | |||||||||||||||||||||||
Share-based compensation | 1.1 | 1.1 | |||||||||||||||||||||||||
Shares issued or repurchased, net | 0.1 | 1.0 | (0.2 | ) | 0.8 | ||||||||||||||||||||||
Balance, March 31, 2016 | 49.0 | $ | 1,153.8 | $ | (44.3 | ) | $ | 106.8 | $ | 3.6 | $ | 1,219.9 | $ | 11.6 |
1. | DESCRIPTION OF BUSINESS |
2. | BASIS OF PRESENTATION |
Other assets | Total assets | Long-term debt | Total liabilities and equity | ||||||||||||
Previously reported | $ | 65.0 | $ | 2,243.5 | $ | 497.8 | $ | 2,243.5 | |||||||
Debt Issuance Costs | (1.2 | ) | (1.2 | ) | (1.2 | ) | (1.2 | ) | |||||||
Current presentation | $ | 63.8 | $ | 2,242.3 | $ | 496.6 | $ | 2,242.3 |
3. | COMMITMENTS AND CONTINGENCIES |
Standby letters of credit1 | $ | 11.8 | |
Bonds related to real estate and construction2 | $ | 403.6 |
4. | EARNINGS PER SHARE ("EPS") |
Quarter Ended | ||||||||
March 31, | ||||||||
2016 | 2015 | |||||||
Net income (loss) | $ | (7.0 | ) | $ | 25.9 | |||
Less: Income attributable to noncontrolling interest | (0.5 | ) | (0.6 | ) | ||||
Net income (loss) attributable to A&B shareholders | (7.5 | ) | 25.3 | |||||
Less: Undistributed earnings allocated from redeemable noncontrolling interests | 0.4 | — | ||||||
Net income (loss) available to A&B shareholders | $ | (7.1 | ) | $ | 25.3 |
Quarter Ended | ||||||
March 31, | ||||||
2016 | 2015 | |||||
Denominator for basic EPS – weighted average shares | 48.9 | 48.8 | ||||
Effect of dilutive securities: | ||||||
Employee/director stock options and restricted stock units | — | 0.5 | ||||
Denominator for diluted EPS – weighted average shares | 48.9 | 49.3 |
5. | FAIR VALUE OF FINANCIAL INSTRUMENTS |
6. | INVENTORIES |
March 31, 2016 | December 31, 2015 | ||||||
Sugar inventories | $ | 11.4 | $ | 16.3 | |||
Work in process - sugar | 15.5 | — | |||||
Asphalt | 11.6 | 12.8 | |||||
Processed rock, portland cement, and sand | 12.0 | 12.2 | |||||
Work in process | 3.5 | 3.7 | |||||
Retail merchandise | 1.6 | 1.6 | |||||
Parts, materials and supplies inventories | 8.1 | 9.3 | |||||
Total | $ | 63.7 | $ | 55.9 |
7. | SHARE-BASED AWARDS |
Options | Weighted Average Exercise Price | Weighted Average Contractual Life | Aggregate Intrinsic Value | |||||||||
Outstanding, January 1, 2016 | 1,098.6 | $ | 18.81 | |||||||||
Exercised | (98.5 | ) | $ | 24.04 | ||||||||
Outstanding, March 31, 2016 | 1,000.1 | $ | 18.30 | 3.5 | $ | 18,199 | ||||||
Exercisable, March 31, 2016 | 1,000.1 | $ | 18.30 | 3.5 | $ | 18,199 |
2012 Plan Restricted Stock Units | Weighted Average Grant-Date Fair Value | |||||
Outstanding, January 1, 2016 | 271.9 | $ | 37.74 | |||
Granted | 135.3 | $ | 29.93 | |||
Vested | (56.3 | ) | $ | 38.07 | ||
Canceled | (53.3 | ) | $ | 39.19 | ||
Outstanding, March 31, 2016 | 297.6 | $ | 33.87 |
2016 Grants | 2015 Grants | |
Volatility of A&B common stock | 26.3% | 29.5% |
Average volatility of peer companies | 27.7% | 34.2% |
Risk-free interest rate | 1.1% | 0.7% |
Quarter Ended | ||||||||
March 31, | ||||||||
2016 | 2015 | |||||||
Share-based compensation expense (net of estimated forfeitures): | ||||||||
Restricted stock units | $ | 1.1 | $ | 1.2 | ||||
Total share-based expense | 1.1 | 1.2 | ||||||
Total recognized tax benefit | (0.3 | ) | (0.3 | ) | ||||
Share-based compensation expense (net of tax) | $ | 0.8 | $ | 0.9 |
8. | RELATED PARTY TRANSA CTIONS |
9. | EMPLOYEE BENEFIT PLANS |
Pension Benefits | Post-retirement Benefits | ||||||||||||||
2016 | 2015 | 2016 | 2015 | ||||||||||||
Service cost | $ | 0.8 | $ | 0.8 | $ | — | $ | — | |||||||
Interest cost | 2.3 | 2.3 | 0.1 | 0.2 | |||||||||||
Expected return on plan assets | (2.5 | ) | (2.7 | ) | — | — | |||||||||
Curtailment | (0.2 | ) | — | — | — | ||||||||||
Amortization of prior service credit | (0.3 | ) | (0.2 | ) | — | — | |||||||||
Amortization of net loss | 1.8 | 1.0 | — | 0.1 | |||||||||||
Net periodic benefit cost | $ | 1.9 | $ | 1.2 | $ | 0.1 | $ | 0.3 |
10. | ACQUISITIONS |
Assets acquired: | |||
Land | $ | 40.5 | |
Building | 36.8 | ||
In-place leases | 7.0 | ||
Favorable leases | 1.3 | ||
Total assets acquired | 85.6 | ||
Total liabilities assumed | 3.2 | ||
Net assets acquired | $ | 82.4 |
11. | ACCUMULATED OTHER COMPREHENSIVE LOSS |
Pension and Postretirement Plans | |||
Three Months Ended March 31, 2016 | |||
Beginning balance | $ | (45.3 | ) |
Amounts reclassified from accumulated other comprehensive income, net of tax | 1.0 | ||
Ending balance | $ | (44.3 | ) |
Quarter Ended March 31, | ||||||||
Details about Other Comprehensive Income Components | 2016 | 2015 | ||||||
Amortization of defined benefit pension items reclassified to net periodic pension cost: | ||||||||
Net loss* | $ | 1.8 | $ | 1.1 | ||||
Prior service credit* | (0.3 | ) | (0.3 | ) | ||||
Total before income tax | 1.5 | 0.8 | ||||||
Income taxes | (0.5 | ) | (0.3 | ) | ||||
Other comprehensive income net of tax | $ | 1.0 | $ | 0.5 |
12. | INCOME TAXES |
13. | CESSATION OF HC&S SUGAR OPERATIONS |
Charges Recognized During Quarter | Cumulative Amount Recognized as of March 31, 2016 | Range of Expected Remaining Cessation Charges | Total | |||||||||||||||||||
Low | High | Low | High | |||||||||||||||||||
Employee severance benefits and related costs | $ | 0.4 | $ | 13.8 | $ | 9.2 | $ | 14.2 | $ | 23.0 | $ | 28.0 | ||||||||||
Asset write-offs and accelerated depreciation | 14.9 | 24.1 | 44.9 | 51.9 | 69.0 | 76.0 | ||||||||||||||||
Property removal, restoration and other exit-related costs | 0.2 | 0.2 | 19.8 | 28.8 | 20.0 | 29.0 | ||||||||||||||||
Total cessation costs | $ | 15.5 | $ | 38.1 | $ | 73.9 | $ | 94.9 | $ | 112.0 | $ | 133.0 |
Employee Severance Benefits and Related Costs | Other Exit Costs1 | Total | ||||||||||
Balance at December 31, 2015 | $ | 13.4 | $ | 4.1 | $ | 17.5 | ||||||
Expense | 0.8 | 0.2 | 1.0 | |||||||||
Cash payments | (1.5 | ) | (0.2 | ) | (1.7 | ) | ||||||
Change in estimates2 | (0.4 | ) | — | (0.4 | ) | |||||||
Balance at March 31, 2016 | $ | 12.3 | $ | 4.1 | $ | 16.4 |
Classification on Balance Sheet | March 31, 2016 | December 31, 2015 | ||||||||
Current: | ||||||||||
Employee severance benefits and related costs | HC&S Cessation Related Liabilities - Current | $ | 12.3 | $ | 5.8 | |||||
Other exit costs | HC&S Cessation Related Liabilities - Current | 2.3 | 0.6 | |||||||
Total current portion | 14.6 | 6.4 | ||||||||
Long-term: | ||||||||||
Employee severance benefits and related costs | Other Non-Current Liabilities | — | 7.6 | |||||||
Other exit costs | Other Non-Current Liabilities | 1.8 | 3.5 | |||||||
Total long-term portion | 1.8 | 11.1 | ||||||||
Total Cessation-related liabilities | $ | 16.4 | $ | 17.5 |
15. | DERIVATIVE INSTRUMENTS |
As of March 31, | As of December 31, | ||||||
2016 | 2015 | ||||||
Interest rate swap liability - floating to fixed rate | $ | 2.7 | $ | 2.5 |
16. | SEGMENT RESULTS |
Quarter Ended March 31, | |||||||
2016 | 2015 | ||||||
Revenue: | |||||||
Real Estate: | |||||||
Leasing | $ | 34.8 | $ | 32.7 | |||
Development and sales | 0.3 | 36.5 | |||||
Reconciling item1 | — | (4.3 | ) | ||||
Materials and construction | 50.7 | 56.9 | |||||
Agribusiness | 23.0 | 28.9 | |||||
Total revenue | $ | 108.8 | $ | 150.7 | |||
Operating Profit (Loss): | |||||||
Real Estate: | |||||||
Leasing | $ | 14.1 | $ | 13.2 | |||
Development and sales | (3.8 | ) | 32.0 | ||||
Materials and construction | 8.0 | 7.2 | |||||
Agribusiness operations | 1.2 | 1.9 | |||||
HC&S cessation costs2 | (15.5 | ) | — | ||||
Total operating profit | 4.0 | 54.3 | |||||
Interest expense | (6.9 | ) | (7.1 | ) | |||
General corporate expenses | (6.8 | ) | (5.6 | ) | |||
Reduction in KRS II carrying value | — | (0.1 | ) | ||||
Income (loss) before income taxes | (9.7 | ) | 41.5 | ||||
Income tax expense (benefit) | (2.7 | ) | 15.6 | ||||
Net income (loss) | (7.0 | ) | 25.9 | ||||
Income attributable to noncontrolling interest | (0.5 | ) | (0.6 | ) | |||
Net income (loss) attributable to A&B | $ | (7.5 | ) | $ | 25.3 |
1 | Represents the sales of a Colorado retail property in March 2015 that is classified as "Gain on the sale of improved property" in the Condensed Consolidated Statements of Operations, but reflected as revenue for segment reporting purposes. |
2 | Costs related to the cessation of HC&S sugar operations, see Note 13. |
17. | SUBSEQUENT EVENTS |
• | Business Overview: This section provides a general description of A&B’s business, as well as recent developments that the Company believes are important in understanding its results of operations and financial condition or in understanding anticipated future trends. |
• | Consolidated Results of Operations: This section provides an analysis of A&B’s consolidated results of operations for the three months ended March 31, 2016 and 2015. |
• | Analysis of Operating Revenue and Profit by Segment: This section provides an analysis of A&B’s results of operations by business segment. |
• | Liquidity and Capital Resources: This section provides a discussion of A&B’s financial condition and an analysis of A&B’s cash flows for the three months ended March 31, 2016 and 2015, as well as a discussion of A&B’s ability to fund its future commitments and ongoing operating activities through internal and external sources of capital. |
• | Outlook: This section provides a discussion of management’s general outlook about the Hawaii economy and the Company’s markets. |
• | Other Matters: This section provides a summary of other matters, such as officer and management changes. |
Quarter Ended March 31, | ||||||||||
(dollars in millions) | 2016 | 2015 | Change | |||||||
Operating revenue | $ | 108.8 | $ | 150.7 | (27.8 | )% | ||||
Operating costs and expenses | 114.0 | 126.2 | (9.7 | )% | ||||||
Operating income (loss) | (5.2 | ) | 24.5 | NM | ||||||
Other income (expense) | (4.5 | ) | 17.0 | NM | ||||||
Income (loss) before income taxes | (9.7 | ) | 41.5 | NM | ||||||
Income tax expense (benefit) | (2.7 | ) | 15.6 | NM | ||||||
Net income (loss) | (7.0 | ) | 25.9 | NM | ||||||
Income attributable to noncontrolling interest | (0.5 | ) | (0.6 | ) | 16.7 | % | ||||
Net income (loss) attributable to A&B | $ | (7.5 | ) | $ | 25.3 | NM | ||||
Basic earnings (loss) per share available to A&B | $ | (0.15 | ) | $ | 0.52 | NM | ||||
Diluted earnings (loss) per share available to A&B | $ | (0.15 | ) | $ | 0.51 | NM |
Quarter Ended March 31, | ||||||||||
(dollars in millions) | 2016 | 2015 | Change | |||||||
Real estate leasing segment operating revenue | $ | 34.8 | $ | 32.7 | 6.4 | % | ||||
Real estate leasing segment operating costs and expenses | (20.4 | ) | (19.2 | ) | (6.3 | )% | ||||
Selling, general and administrative | (0.5 | ) | (0.5 | ) | — | % | ||||
Other income | 0.2 | 0.2 | — | % | ||||||
Real estate leasing operating profit | $ | 14.1 | $ | 13.2 | 6.8 | % | ||||
Operating profit margin | 40.5 | % | 40.4 | % | ||||||
Net Operating Income* | ||||||||||
Hawaii | $ | 18.5 | $ | 16.3 | 13.5 | % | ||||
Mainland | 3.9 | 4.6 | (15.2 | )% | ||||||
Total | $ | 22.4 | $ | 20.9 | 7.2 | % | ||||
Leasable Space (million sq. ft.) at period end | ||||||||||
Hawaii - improved | 2.9 | 2.6 | ||||||||
Mainland - improved | 2.2 | 2.5 | ||||||||
Total improved | 5.1 | 5.1 | ||||||||
Hawaii urban ground leases (acres) | 106 | 115 |
* | Refer to page 21 for a discussion of management's use of a non-GAAP financial measure and the required reconciliation of non-GAAP measures to GAAP measures. |
Weighted average occupancy - percent | Hawaii | Mainland | Total |
Retail | 93% | 93% | 93% |
Industrial | 95% | 99% | 97% |
Office | 82% | 91% | 89% |
Total | 93% | 95% | 94% |
Dispositions | Acquisitions | |||||||||||
Date | Property | Leasable sq. ft. | Date | Property | Leasable sq. ft. | |||||||
5-15 | San Pedro Plaza | 171,900 | 5-15 | Aikahi Shopping Center* | 98,000 | |||||||
12-15 | Union Bank | 84,000 | 1-16 | Manoa Marketplace | 139,300 | |||||||
Total Dispositions | 255,900 | Total Improved Acquisitions | 237,300 |
Quarter Ended March 31, | |||||||
(In Millions, Unaudited) | 2016 | 2015 | |||||
Real Estate Leasing segment operating profit | $ | 14.1 | $ | 13.2 | |||
Adjustments: | |||||||
Depreciation and amortization | 7.4 | 7.2 | |||||
Straight-line lease adjustments | (0.5 | ) | (0.6 | ) | |||
General and administrative expenses | 1.4 | 1.1 | |||||
Real Estate Leasing segment NOI | $ | 22.4 | $ | 20.9 |
Quarter Ended March 31, | |||||||
(dollars in millions) | 2016 | 2015 | |||||
Improved property sales revenue | $ | — | $ | 4.3 | |||
Development sales revenue | — | 23.2 | |||||
Unimproved/other property sales revenue | 0.3 | 9.0 | |||||
Total Real Estate Development and Sales segment operating revenue | 0.3 | 36.5 | |||||
Cost of Real Estate Development and Sales | — | (24.6 | ) | ||||
Operating expenses | (4.9 | ) | (3.8 | ) | |||
Earnings from joint ventures | 0.5 | 22.8 | |||||
Other income | 0.3 | 1.1 | |||||
Total Real Estate Development and Sales operating profit (loss) | $ | (3.8 | ) | $ | 32.0 |
Quarter Ended March 31, | ||||||||||
(dollars in millions) | 2016 | 2015 | Change | |||||||
Revenue | $ | 50.7 | $ | 56.9 | (10.9 | )% | ||||
Operating profit | $ | 8.0 | $ | 7.2 | 11.1 | % | ||||
Operating profit margin | 15.8 | % | 12.7 | % | ||||||
Depreciation and amortization | $ | 2.9 | $ | 2.9 | — | % | ||||
Aggregate used and sold (tons in thousands) | 183.2 | 235.0 | (22.0 | )% | ||||||
Asphaltic concrete placed (tons in thousands) | 117.9 | 116.4 | 1.3 | % | ||||||
Backlog1 at period end | $ | 226.7 | $ | 206.1 | 10.0 | % |
1 | 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 March 31, 2016 and 2015 were $12.3 million and $30.2 million, respectively. |
Quarter Ended March 31, | ||||||||||
(dollars in millions) | 2016 | 2015 | Change | |||||||
Revenue | $ | 23.0 | $ | 28.9 | (20.4 | )% | ||||
Operating profit | $ | 1.2 | $ | 1.9 | (36.8 | )% | ||||
Cessation costs | $ | (15.5 | ) | $ | — | NM | ||||
Tons sugar produced | 11,800 | 3,200 | 4X | |||||||
Tons sugar sold (raw and specialty sugar) | 21,400 | 37,100 | (42.3 | )% |
Three Months Ended March 31, | ||||||||||
(dollars in millions) | 2016 | 2015 | Change | |||||||
Quarrying and paving | $ | 2.8 | $ | 1.6 | 75.0 | % | ||||
Commercial real estate property improvements | 84.2 | 1.8 | 47X | |||||||
Tenant improvements | 1.4 | 1.7 | (17.6 | )% | ||||||
Agribusiness and other | 3.7 | 3.5 | 5.7 | % | ||||||
Total capital expenditures* | $ | 92.1 | $ | 8.6 | 11X |
* | Capital expenditures for real estate developments to be held and sold as real estate development inventory are classified in condensed consolidated statement of cash flows as operating activities. |
Property Type | Vacancy Rate for the Quarter Ended March 31, 2016 | Vacancy Rate for the Quarter Ended March 31, 2015 | Percentage Point Change | Average Asking Rent Per Square Foot Per Month for the Quarter Ended March 31, 2016 | Average Asking Rent Per Square Foot Per Month for the Quarter Ended March 31, 2015 | Percent Change | ||||||||||||||
Retail | 4.6 | % | 4.3 | % | 0.3 | $ | 3.93 | $ | 3.69 | 6.5 | % | |||||||||
Industrial | 1.5 | % | 2.1 | % | (0.6 | ) | $ | 1.17 | $ | 1.15 | 1.7 | % | ||||||||
Office | 12.2 | % | 13.4 | % | (1.2 | ) | $ | 1.67 | $ | 1.65 | 1.2 | % |
1 | Refer to page 21 for a discussion of management's use of a non-GAAP financial measure and the required reconciliation of non-GAAP measures to GAAP measures. |
(a) | Disclosure Controls and Procedures |
Period | Total Number of Shares Purchased1 | Average Price Paid per Share | Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs | Maximum Number of Shares that May Yet Be Purchased Under the Plans or Programs |
Jan 1 - 31, 2016 | 24,042 | $30.47 | — | — |
Feb 1 - 29, 2016 | 12,916 | $30.24 | — | — |
Mar 1 - 31, 2016 | 10,823 | $36.09 | — | — |
1 | Represents shares accepted in satisfaction of tax withholding obligations arising upon option exercises or the vesting of restricted stock units. |
31.1 | Certification of Chief Executive Officer, as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. |
31.2 | Certification of Chief Financial Officer, as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. |
32 | Certification of Chief Executive Officer and Chief Financial Officer Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. |
101 | The following information from Alexander & Baldwin, Inc.’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2016, formatted in XBRL (eXtensible Business Reporting Language): (i) Condensed Consolidated Statements of Operations for the three and three months ended March 31, 2016 and March 31, 2015, (ii) Condensed Consolidated Statement of Comprehensive Income (Loss) for the three months ended March 31, 2016 and March 31, 2015, (iii) Condensed Consolidated Balance Sheets at March 31, 2016 and December 31, 2015, (iv) Condensed Consolidated Statement of Cash Flows for the three months ended March 31, 2016 and March 31, 2015, (v) Condensed Consolidated Statements of Equity for the three months ended March 31, 2016 and March 31, 2015, and (vi) the Notes to the Condensed Consolidated Financial Statements. |
95 | Mine Safety Disclosure |
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized. | |||
ALEXANDER & BALDWIN, INC. | |||
(Registrant) | |||
Date: | May 6, 2016 | /s/ Paul K. Ito | |
Paul K. Ito | |||
Senior Vice President, | |||
Chief Financial Officer and Treasurer | |||
31.1 | Certification of Chief Executive Officer, as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. |
31.2 | Certification of Chief Financial Officer, as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. |
32 | Certification of Chief Executive Officer and Chief Financial Officer Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. |
101 | The following information from Alexander & Baldwin, Inc.’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2016, formatted in XBRL (eXtensible Business Reporting Language): (i) Condensed Consolidated Statements of Operations for the three months ended March 31, 2016 and March 31, 2015, (ii) Condensed Consolidated Statement of Comprehensive Income (Loss) for the three months ended March 31, 2016 and March 31, 2015, (iii) Condensed Consolidated Balance Sheets at March 31, 2016 and December 31, 2015, (iv) Condensed Consolidated Statement of Cash Flows for the three months ended March 31, 2016 and March 31, 2015, (v) Condensed Consolidated Statements of Equity for the three months ended March 31, 2016 and March 31, 2015 and (vi) the Notes to the Condensed Consolidated Financial Statements. |
95 | Mine Safety Disclosure |
1. | I have reviewed this quarterly report on Form 10-Q of Alexander & Baldwin, Inc.; |
2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; |
4. | The registrant's other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: |
(a) | Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; |
(b) | Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; |
(c) | Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and |
(d) | Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and |
5. | The registrant's other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions): |
(a) | All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and |
(b) | Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting. |
By /s/ Christopher J. Benjamin | ||
Christopher J. Benjamin | ||
President and Chief Executive Officer | ||
Date: | May 6, 2016 |
1. | I have reviewed this quarterly report on Form 10-Q of Alexander & Baldwin, Inc.; |
2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; |
4. | The registrant's other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: |
(a) | Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; |
(b) | Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; |
(c) | Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and |
(d) | Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and |
5. | The registrant's other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions): |
(a) | All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and |
(b) | Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting. |
By /s/ Paul K. Ito | ||
Paul K. Ito, Senior Vice President, | ||
Chief Financial Officer and Treasurer | ||
Date: | May 6, 2016 |
(1) | The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and |
(2) | The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company. |
/s/ Christopher J. Benjamin | |
Name: | Christopher J. Benjamin |
Title: | President and Chief Executive Officer |
Date: | May 6, 2016 |
/s/ Paul K. Ito | |
Name: | Paul K. Ito |
Title: | Senior Vice President, Chief Financial Officer and Treasurer |
Date: | May 6, 2016 |
Total Number of S&S Citations | 0 |
Mine Act § 104(b) Orders | 0 |
Mine Act § 104(d) Citations and Orders | 3 |
Mine Act § 110(b)(2) Violations | 0 |
Mine Act § 107(a) Orders | 0 |
Total Dollar Value of Proposed MSHA Assessments | 0 |
Total Number of Mining Related Fatalities | 0 |
Received Written Notice of Pattern of Violation under Mine Act §104(e) (yes/no) | No |
Received Written Notice of Potential to Have Pattern under Mine Act §104(e) (yes/no) | No |
Document and Entity Information |
3 Months Ended |
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Mar. 31, 2016
shares
| |
Document and Entity Information [Abstract] | |
Entity Registrant Information | Alexander & Baldwin, Inc. |
Entity Central Index Key | 0001545654 |
Current Fiscal Year End Date | --12-31 |
Entity Well-known Seasoned Issuer | Yes |
Entity Voluntary Filers | No |
Entity Current Reporting Status | Yes |
Entity Filer Category | Large Accelerated Filer |
Entity Common Stock, Shares Outstanding | 48,982,235 |
Document Fiscal Year Focus | 2016 |
Document Fiscal Period Focus | Q1 |
Document Type | 10-Q |
Amendment Flag | false |
Document Period End Date | Mar. 31, 2016 |
Condensed Consolidated Statements of Comprehensive Income (Unaudited) - USD ($) $ in Millions |
3 Months Ended | ||||
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Mar. 31, 2016 |
Mar. 31, 2015 |
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Statement of Comprehensive Income [Abstract] | |||||
Net Income (Loss) | $ (7.0) | $ 25.9 | |||
Defined benefit pension plans: | |||||
Amortization of prior service credit included in net periodic pension cost | [1] | (0.3) | (0.3) | ||
Amortization of net loss included in net periodic pension cost | [1] | 1.8 | 1.1 | ||
Income taxes related to other comprehensive income | (0.5) | (0.3) | |||
Other Comprehensive Income | 1.0 | 0.5 | |||
Comprehensive Income (Loss) | (6.0) | 26.4 | |||
Comprehensive income attributable to noncontrolling interest | (0.5) | (0.6) | |||
Comprehensive income (loss) attributable to A&B shareholders | $ (6.5) | $ 25.8 | |||
|
Condensed Consolidated Statements of Equity (Parenthetical) - $ / shares |
3 Months Ended | |
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Mar. 31, 2016 |
Mar. 31, 2015 |
|
Statement of Stockholders' Equity [Abstract] | ||
Dividends declared (in dollars per share) | $ 0.06 | $ 0.05 |
Description of Business |
3 Months Ended |
---|---|
Mar. 31, 2016 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Description of Business | DESCRIPTION OF BUSINESS Alexander & Baldwin, Inc. ("A&B" or the "Company") is headquartered in Honolulu and operates four segments: Real Estate Development and Sales; Real Estate Leasing; Agribusiness; and Materials and Construction. Real Estate Development and Sales: The Real Estate Development and Sales segment generates its revenue through the investment in and development and sale of land and commercial and residential properties in Hawaii and through the sale of properties in the Company's Leasing portfolio. Real Estate Leasing: The Real Estate Leasing segment owns, operates and manages retail, office and industrial properties in Hawaii and on the Mainland. The Real Estate Leasing segment also leases urban land in Hawaii to third-party lessees. Agribusiness: The Agribusiness segment produces bulk raw sugar, specialty food grade sugars and molasses; provides general trucking services, equipment maintenance and repair services; leases agricultural land to third parties; and generates and sells electricity to the extent not used in A&B’s Agribusiness operations. On December 31, 2015, the Company determined it would cease its Hawaiian Commercial & Sugar Company ("HC&S") sugar operations on Maui upon completion of its final harvest in 2016. See Note 13, "Cessation of HC&S Operations" ("Cessation") for further discussion regarding the Cessation and the related costs associated with such exit and disposal activities. Materials and Construction: The Materials and Construction segment performs asphalt paving as prime contractor and subcontractor; imports and sells liquid asphalt; mines, processes and sells rock and sand aggregate; produces and sells asphaltic concrete and ready-mix concrete; provides and sells various construction- and traffic-control-related products; and manufactures and sells precast concrete products. |
Basis of Presentation |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Basis of Presentation [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Basis of Presentation | BASIS OF PRESENTATION The interim condensed consolidated financial statements are unaudited. Because of the nature of the Company’s operations, the results for interim periods are not necessarily indicative of results to be expected for the year. While these condensed consolidated financial statements reflect all normal recurring adjustments that are, in the opinion of management, necessary for fair presentation of the results of the interim period, they do not include all of the information and footnotes required by accounting principles generally accepted in the United States of America ("GAAP") for complete financial statements. Therefore, the interim condensed consolidated financial statements should be read in conjunction with the consolidated balance sheets as of December 31, 2015 and 2014, and the related consolidated statements of operations, comprehensive income (loss), equity, and cash flows for each of the three years in the period ended December 31, 2015 and the notes thereto included in the Company’s Annual Report filed on Form 10-K for the year ended December 31, 2015 ("2015 Form 10-K"), and other subsequent filings with the U.S. Securities and Exchange Commission. Rounding. Amounts in the condensed consolidated financial statements and notes are rounded to the nearest tenth of a million, but per-share calculations and percentages were determined based on amounts before rounding. Accordingly, a recalculation of some per-share amounts and percentages, if based on the reported data, may be slightly different. New Accounting Pronouncements. In April 2015, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2015-03, Interest—Imputation of Interest (Subtopic 835-30), Simplifying the Presentation of Debt Issuance Costs, ("ASU 2015-03"). ASU 2015-03 requires that debt issuance costs related to a recognized debt liability be presented in the balance sheet as a direct deduction from the carrying amount of that debt liability, consistent with debt discounts. The amendments in ASU 2015-03 are effective for financial statements issued for fiscal years beginning after December 15, 2015, and interim periods within those fiscal years. The Company adopted this guidance in the first quarter of 2016. The impact of adopting the above guidance as of December 31, 2015 was as follows:
In February 2016, the FASB issued ASU No. 2016-02, Leases (Topic 842) (“ASU 2016-02”). ASU 2016-02 requires the identification of arrangements that should be accounted for as leases by lessees. In general, lease arrangements exceeding a twelve month term must now be recognized as assets and liabilities on the balance sheet of the lessee. Under ASU 2016-02, a right-of-use asset and lease obligation will be recorded for all leases, whether operating or financing, while the income statement will reflect lease expense for operating leases and amortization/interest expense for financing leases. The balance sheet amount recorded for existing leases at the date of adoption of ASU 2016-02 must be calculated using the applicable incremental borrowing rate at the date of adoption. In addition, ASU 2016-02 requires the use of the modified retrospective method, which will require adjustment to all comparative periods presented in the consolidated financial statements. ASU 2016-02 is effective for financial statements issued for fiscal years beginning after December 15, 2018. The Company is currently assessing the impact that adopting this new accounting standard will have on its consolidated financial statements and footnote disclosures. In March 2016, the FASB issued ASU No. 2016-09, Compensation - Stock Compensation (Topic 718) (“ASU 2016-09”). ASU 2016-09 identifies areas for simplification involving several aspects of accounting for share-based payment transactions, including the income tax consequences, classification of awards as either equity or liabilities, an option to recognize gross stock compensation expense with actual forfeitures recognized as they occur, as well as certain classifications on the statement of cash flows. ASU 2016-09 is effective for financial statements issued for fiscal years beginning after December 15, 2016. The Company is currently assessing the impact that adopting this new accounting standard will have on its consolidated financial statements and footnote disclosures. |
Commitments and Contingencies |
3 Months Ended | ||||||||||||||||
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Mar. 31, 2016 | |||||||||||||||||
Commitments and Contingencies Disclosure [Abstract] | |||||||||||||||||
Commitments and Contingencies | COMMITMENTS AND CONTINGENCIES Commitments, Guarantees and Contingencies: Commitments and financial arrangements not recorded on the Company's condensed consolidated balance sheet, excluding lease commitments that are disclosed in Note 9 of the Company’s 2015 Form 10-K, included the following (in millions) as of March 31, 2016:
1 Consists of standby letters of credit, issued by the Company’s lenders under the Company’s revolving credit facilities, and relate primarily to the Company’s real estate activities. In the event the letters of credit are drawn upon, the Company would be obligated to reimburse the issuer of the letter of credit. None of the letters of credit has been drawn upon to date, and the Company believes it is unlikely that any of these letters of credit will be drawn upon. 2 Represents bonds related to construction and real estate activities in Hawaii. Approximately $380.9 million is related to construction bonds issued by third party sureties (bid, performance and payment bonds) and the remainder is related to commercial bonds issued by third party sureties (permit, subdivision, license and notary bonds). In the event the bonds are drawn upon, the Company would be obligated to reimburse the surety that issued the bond. None of the bonds has been drawn upon to date, and the Company believes it is unlikely that any of these bonds will be drawn upon. Indemnity Agreements: For certain real estate joint ventures, the Company may be obligated under bond indemnities to complete construction of the real estate development if the joint venture does not perform. These indemnities are designed to protect the surety in exchange for the issuance of surety bonds that cover joint venture construction activities, such as project amenities, roads, utilities, and other infrastructure, at its joint ventures. Under the indemnities, the Company and its joint venture partners agree to indemnify the surety bond issuer from all losses and expenses arising from the failure of the joint venture to complete the specified bonded construction. The maximum potential amount of aggregate future payments is a function of the amount covered by outstanding bonds at the time of default by the joint venture, reduced by the amount of work completed to date. The recorded amounts of the indemnity liabilities were not material individually or in the aggregate. Other than the above items and those described in the Company's 2015 Form 10-K, obligations of the Company’s non-consolidated joint ventures do not have recourse to the Company and the Company’s “at-risk” amounts are limited to its investment. Legal Proceedings and Other Contingencies: A&B owns 16,000 acres of watershed lands in East Maui that supply a significant portion of the irrigation water used by Hawaiian Commercial & Sugar Company (“HC&S”), a division of A&B that produces raw sugar. A&B also held four water licenses to another 30,000 acres owned by the State of Hawaii in East Maui which, over the last ten years, have supplied approximately 56 percent of the irrigation water used by HC&S. The last of these water license agreements expired in 1986, and all four agreements were then extended as revocable permits that were renewed annually. In 2001, a request was made to the State Board of Land and Natural Resources (the “BLNR”) to replace these revocable permits with a long-term water lease. Pending the conclusion by the BLNR of this contested case hearing on the request for the long-term lease, the BLNR has kept the existing permits on a holdover basis. Three parties filed a lawsuit on April 10, 2015 (the "4/10/15 Lawsuit") alleging that the BLNR has been renewing the revocable permits annually rather than keeping them in holdover status. The lawsuit asks the court to void the revocable permits and to declare that the renewals were illegally issued without preparation of an environmental assessment ("EA"). In December 2015, the BLNR decided to re-affirm its prior decisions to keep the permits in holdover status. This decision by the BLNR is being challenged by one of the three parties. In January 2016, the court in the 4/10/15 Lawsuit ruled that the renewals were not subject to the EA requirement but that the BLNR lacked legal authority to keep the revocable permits in holdover status beyond one year. The court has allowed the parties to take an immediate appeal of this ruling. On April 5, 2016, a party in the contested case on A&B's request for a long-term lease filed a motion for denial of the request. The BLNR has not yet set a schedule for briefing and oral argument on the motion. On April 14, 2016, the BLNR issued an order directing A&B to commence the environmental review process in support of its application for a long-term water lease. In addition, on May 24, 2001, petitions were filed by a third party, requesting that the Commission on Water Resource Management of the State of Hawaii (“Water Commission”) establish interim instream flow standards (“IIFS”) in 27 East Maui streams that feed the Company’s irrigation system. The Water Commission initially took action on the petitions in 2008 and 2010, but the petitioners requested a contested case hearing to challenge the Water Commission's decisions on certain petitions. The Water Commission denied the contested case hearing request, but the petitioners successfully appealed the denial to the Hawaii Intermediate Court of Appeals, which ordered the Water Commission to grant the request. The Commission then authorized the appointment of a hearings officer for the contested case hearing and expanded the scope of the contested case hearing to encompass all 27 petitions for amendment of the IIFS for East Maui streams in 23 hydrologic units. The evidentiary phase of the hearing before the Commission-appointed hearings officer was completed on April 2, 2015. On January 15, 2016, the Commission-appointed hearings officer issued his recommended decision on the petitions. The recommended decision would restore water to streams in 11 of the 23 hydrologic units. Based on the announced closure of HC&S, the commission has ordered the re-opening of the evidentiary portion of the hearing to address changes in the water needs of HC&S. A decision from the Commission on the scope of the re-opened evidentiary hearing is pending. The Commission is not expected to issue a final decision on the petitions until at least the fourth quarter of 2016. In light of the announced closure, on April 20, 2016, the Company announced its decision to fully and permanently restore 7 priority taro streams in East Maui, and to continue to participate in the East Maui IIFS proceedings to address appropriate restoration of the other streams. On March 9, 2016, two organizations filed a petition with the Water Commission to return more water to four streams in West Maui in light of the announced closure of HC&S’s sugar operations. Previously, the parties involved in the petition, including HC&S, had entered into a settlement of a petition filed in 2004 with the Commission to establish IIFS for the four streams on the amount of water to be returned to the streams, and the Water Commission approved the settlement in 2014. No hearing date has been set by the Commission on this latest petition. If the Company is not permitted to use sufficient quantities of stream waters, it would have a material adverse effect on the Company's sugar-growing operations in 2016 and the Company's pursuit of a diversified agricultural model in subsequent years. In January 2013, the Environmental Protection Agency (“EPA”) finalized nationwide standards for controlling hazardous air pollutant emissions from industrial, commercial, institutional boilers and process heaters (the “Boiler MACT” rule), which apply to HC&S's three boilers at the Puunene Sugar Mill. The initial deadline for compliance with the Boiler MACT rule was January 2016, with full compliance required by July 2016. The Company anticipates that the Puunene Mill boilers will meet all applicable compliance deadlines and that the remaining compliance costs will be less than $250,000, based on currently available information. The Company is currently developing strategies for achieving compliance with the new regulations, including identifying required upgrades to boiler and air pollution control instrumentation and developing the complex compliance monitoring approaches necessary to accommodate the facility’s multi-fuel operations. There remains significant uncertainty as to the final requirements of the Boiler MACT rule, pending an EPA response to various petitions for reconsideration and ongoing litigation. Any resulting changes to the Boiler MACT rule could adversely impact the Company’s compliance schedule or cost of compliance. On June 24, 2014, the Hawaii State Department of Health (“DOH”) Clean Air Branch issued a Notice and Finding of Violation and Order (“NFVO”) to HC&S alleging various violations relating to the operation of HC&S’s three boilers at its sugar mill. The DOH reviewed a five-year period (2009-2013) and alleged violations relating primarily to periods of excess visible emissions and operation of the wet scrubbers installed to control particulate matter emissions from the boiler stacks. All incidents included in the NFVO were self-reported by HC&S to the DOH prior to the DOH’s review, and there is no indication that these deviations resulted in any violation of health-based air quality standards. The NFVO includes an administrative penalty of $1.3 million, which HC&S has contested. The Company is unable to predict, at this time, the outcome or financial impact of the NFVO, but does not believe that the financial impact of the NFVO will be material to its financial position, cash flows or results of operations. On July 1, 2015, a lawsuit was filed against the State of Hawaii and the Director of the Department of Health, alleging that the sugar cane burning permits issued by the State to HC&S were unlawfully issued, and seeking an injunction against the burning of cane. On July 6, 2015, the plaintiffs added the Company as a defendant. If the Company is not permitted or is substantially limited in its ability to burn sugar cane, this would have a material adverse effect on the Company’s sugar operations. The Company will vigorously defend itself in this matter. A&B is a party to, or may be contingently liable in connection with, other legal actions arising in the normal conduct of its businesses, the outcomes of which, in the opinion of management after consultation with counsel, would not have a material effect on A&B’s condensed consolidated financial statements as a whole. |
Earnings Per Share (“EPS”) |
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Earnings Per Share [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Earnings Per Share (“EPS”) | EARNINGS PER SHARE ("EPS") Basic earnings per common share excludes dilution and is calculated by dividing net earnings allocated to common shares by the weighted-average number of common shares outstanding for the period. Diluted earnings per common share is calculated by dividing net earnings allocated to common shares by the weighted-average number of common shares outstanding for the period, as adjusted for the potential dilutive effect of non-participating share-based awards. The following table provides a reconciliation of net income (loss) to net income (loss) available to A&B shareholders (in millions):
The number of shares used to compute basic and diluted EPS is as follows (in millions):
During the quarter ended March 31, 2016, anti-dilutive securities totaled 0.3 million shares. There were no anti-dilutive securities outstanding for the quarter ended March 31, 2015. |
Fair Value of Financial Instruments |
3 Months Ended |
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Mar. 31, 2016 | |
Fair Value Disclosures [Abstract] | |
Fair Value of Financial Instruments | FAIR VALUE OF FINANCIAL INSTRUMENTS The fair values of receivables and short-term borrowings approximate their carrying values due to the short-term nature of the instruments. The Company’s cash and cash equivalents, consisting principally of cash on deposit, may from time to time include short-term money market funds. The fair values of these money market funds, based on market prices (level 2), approximate their carrying values due to their short-maturities. The carrying amount and fair value of the Company’s long-term debt at March 31, 2016 was $683.7 million and $690.3 million, respectively, and $587.0 million and $595.8 million at December 31, 2015, respectively. The fair value of long-term debt is calculated by discounting the future cash flows of the debt at rates based on instruments with similar risk, terms and maturities as compared to the Company’s existing debt arrangements (Level 2). |
Inventories |
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Inventory Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Inventories | INVENTORIES Sugar inventories are stated at the lower of cost (first-in, first-out basis) or market value. Materials and supplies and Materials and Construction segment inventory are stated at the lower of cost (principally average cost, first-in, first-out basis) or market value. Inventories at March 31, 2016 and December 31, 2015 were as follows (in millions):
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Share-Based Awards |
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Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Share-Based Awards | SHARE-BASED AWARDS As of March 31, 2016, 1,195,151 shares of the Company’s common stock remained available for future issuance, which is reflective of a 2.7 million share reduction for outstanding equity awards replaced in the separation transaction from Matson, Inc. ("Matson") in 2012. The shares of common stock authorized to be issued under the 2012 Plan may be drawn from the shares of the Company’s authorized but unissued common stock or from shares of its common stock that the Company acquires, including shares purchased on the open market or in private transactions. The Company does not currently grant stock options under its share-based equity program. The last grant of options occurred in January 2012. Activity in the Company’s equity compensation plan in 2016 was as follows (in thousands, except weighted average exercise price and weighted average contractual life):
The following table summarizes non-vested restricted stock unit activity through March 31, 2016 (in thousands, except weighted average grant-date fair value amounts):
A portion of the restricted stock unit awards are time-based awards that vest ratably over three years. The remaining portion of the awards represents market-based awards that cliff vest after two or three years, provided that the total shareholder return of the Company’s common stock over the relevant measurement period meets or exceeds pre-defined levels of relative total shareholder returns of the Standard & Poor’s MidCap 400 index and the Russell 2000 index. The fair value of the Company’s time-based awards is determined using the Company’s stock price on the date of grant. The fair value of the Company’s market-based awards is estimated using the Company’s stock price on the date of grant and the probability of vesting using a Monte Carlo simulation with the following weighted average assumptions:
A summary of compensation cost related to share-based payments is as follows (in millions):
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Related Party Transactions |
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Mar. 31, 2016 | |
Related Party Transactions [Abstract] | |
Related Party Transactions | RELATED PARTY TRANSA CTIONS Construction Contracts and Material Sales. The Company has contracts in the ordinary course of business, as a supplier, with affiliates that are members in entities in which the Company also is a member. Revenues earned from transactions with affiliates totaled approximately $2.1 million and $6.2 million for the quarters ended March 31, 2016 and 2015, respectively. Receivables from these affiliates were $1.6 million and $3.0 million at March 31, 2016 and 2015, respectively. Amounts due to these affiliates were $0.5 million and $0.2 million at March 31, 2016 and 2015, respectively. Real Estate Leasing and Development. The Company has contracts in the ordinary course of business, as a lessor of property, with unconsolidated affiliates in which the Company has an interest, as well as with certain entities that are owned by a director of the Company. Revenues earned from these transactions were immaterial for each of the quarters ended March 31, 2016 and 2015. Receivables from these affiliates were immaterial as of March 31, 2016 and 2015. During the quarter ended March 31, 2016, the Company recorded developer fee revenues of approximately $0.2 million related to management and administrative services provided to certain unconsolidated investments in affiliates. Developer fee revenues recorded for the quarter ended March 31, 2015 were $0.6 million. |
Employee Benefit Plans |
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Compensation and Retirement Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Employee Benefit Plans | EMPLOYEE BENEFIT PLANS The Company has defined benefit pension plans that cover substantially all non-bargaining unit and certain bargaining unit employees. The Company also has unfunded non-qualified plans that provide benefits in excess of the amounts permitted to be paid under the provisions of the tax law to participants in qualified plans. In 2007, the Company changed the traditional defined benefit pension plan formula for new non-bargaining unit employees hired after January 1, 2008 and replaced it with a cash balance defined benefit pension plan formula. Subsequently, effective January 1, 2012, the Company froze the benefits under its traditional defined benefit plans for non-bargaining unit employees hired before January 1, 2008 and replaced the benefit with the same cash balance defined benefit pension plan formula provided to those employees hired after January 1, 2008. Retirement benefits under the cash balance pension plan formula are based on a fixed percentage of employee eligible compensation, plus interest. The plan interest credit rate will vary from year-to-year based on the ten-year U.S. Treasury rate. The assumptions related to discount rates, expected long-term rates of return on invested plan assets, salary increases, age, mortality and health care cost trend rates, along with other factors, are used in determining the assets, liabilities and expenses associated with pension benefits. Management reviews the assumptions annually with its independent actuaries, taking into consideration existing and future economic conditions and the Company’s intentions with respect to these plans. Management believes that its assumptions and estimates are reasonable. Different assumptions, however, could result in material changes to the assets, obligations and costs associated with benefit plans. The components of net periodic benefit cost recorded for the three months ended March 31, 2016 and 2015 were as follows (in millions):
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Acquisitions |
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Business Combinations [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||
Acquisitions | ACQUISITIONS Manoa Marketplace Acquisition. The Company applies the provisions of FASB ASC Topic No. 805, Business Combinations, ("ASC 805") to acquisitions. Under ASC 805, assets acquired and liabilities assumed are recorded at fair value. The excess of the purchase price over the net fair value of assets acquired and liabilities assumed is recorded as goodwill. The fair values of assets acquired and liabilities assumed are determined through the market, income or cost approaches, and the valuation approach is generally based on the specific characteristics of the asset or liability. Under the market approach, value is estimated using information from transactions in which other participants in the market have paid for reasonably similar assets that have been sold within a reasonable period from the valuation date. Adjustments are made to compensate for differences between reasonably similar assets and the item being valued. Under the income approach, the future cash flows expected to be received over the life of the asset, taking into account a variety of factors, such as long-term growth rates and the amount and timing of cash flows, are discounted to present value using a rate of return that accounts for the time value of money and investment risk factors. Under the cost approach, the Company estimates the cost to replace the asset with a new asset taking into consideration a variety of factors such as age, physical condition, functional obsolescence and economic obsolescence. The fair value of liabilities assumed is calculated as the net present value of estimated payments using prevailing market interest rates for liabilities with similar credit risk and terms. On January 29, 2016 the Company consummated the purchase of the leasehold and leased fee interests in Manoa Marketplace, a multi-tenant neighborhood shopping center in Honolulu for $82.4 million. The allocation of purchase price to assets acquired and liabilities assumed is as follows (in millions):
The finite-lived intangible assets related to in-place leases and favorable leases are amortized over their respective lease terms. As of March 31, 2016, the weighted-average remaining lives of the in-place leases and favorable leases were approximately 5 and 3 years, respectively. In connection with the Manoa Marketplace transaction, the Company incurred approximately $1.1 million of acquisition-related expenses during the quarter ended March 31, 2016. The costs are included in selling, general and administrative costs in the accompanying condensed consolidated statements of operations and are reported in the Development and Sales segment for segment reporting purposes. |
Accumulated Other Comprehensive Loss |
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Accumulated Other Comprehensive Income (Loss), Net of Tax [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Accumulated Other Comprehensive Loss | ACCUMULATED OTHER COMPREHENSIVE LOSS The changes in accumulated other comprehensive loss by component for the three months ended March 31, 2016 were as follows (in millions, net of tax):
The reclassifications of other comprehensive income components out of accumulated other comprehensive loss for the quarter ended March 31, 2016 and 2015 were as follows (in millions):
* These other comprehensive income components are included in the computation of net periodic pension cost (see Note 9 for additional details). |
Income Taxes |
3 Months Ended |
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Mar. 31, 2016 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | INCOME TAXES The Company makes certain estimates and judgments in determining income tax expense for financial statement purposes. These estimates and judgments are applied in the calculation of tax credits, tax benefits and deductions, and in the calculation of certain deferred tax assets and liabilities, which arise from differences in the timing of recognition of revenue and expense for tax and financial statement purposes. Deferred tax assets and deferred tax liabilities are adjusted to the extent necessary to reflect tax rates expected to be in effect when the temporary differences reverse. Adjustments may be required to deferred tax assets and deferred tax liabilities due to changes in tax laws and audit adjustments by tax authorities. To the extent adjustments are required in any given period, the adjustments would be included within the tax provision in the condensed consolidated statements of operations or balance sheet. Subsequent to the separation from Matson, Inc. (formerly "Alexander & Baldwin Holding, Inc.") on June 30, 2012, the Company began reporting as a separate taxpayer. Upon separation, the Company's unrecognized tax benefits were reflected on Matson Inc.'s ("Matson") financial statements because Matson is considered the successor parent to the former Alexander & Baldwin, Inc. affiliated tax group. In connection with the separation, the Company entered into a Tax Sharing Agreement with Matson. As of March 31, 2016, the Company's liability for the indemnity to Matson in the event the Company's pre-separation unrecognized tax benefits are not realized was $0.1 million. As of March 31, 2016, the Company has not identified any material unrecognized tax positions. The Company is subject to taxation by the United States and various state and local jurisdictions. As of March 31, 2016, the Company’s tax years 2012, 2013 and 2014 are open to examination by the tax authorities. In addition, tax year 2012, for which the Company was included in the consolidated tax group with Matson, is open to examination by the tax authorities in the Company's material jurisdictions. In addition, the 2011 tax year is also open to examination by California. The 2012 tax return for the Company on a standalone basis and the 2012 tax return for which the Company was included in the consolidated tax group with Matson are currently under examination by the Internal Revenue Service. |
Cessation of HC&S Sugar Operations |
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Restructuring and Related Activities [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Cessation of HC&S Sugar Operations | CESSATION OF HC&S SUGAR OPERATIONS In connection with the Cessation, the Company currently projects recording total pre-tax book charges in the range of $112 million to $133 million, which consists of $23 million to $28 million of employee severance and related benefit charges, $69 million to $76 million of asset write-offs and accelerated depreciation, and $20 million to $29 million of property removal, restoration and other exit-related costs. The Company expects that the activities related to the Cessation will be substantially completed by the end of 2016. During the quarter ended March 31, 2016, the Company recorded pre-tax restructuring charges of $15.5 million related to employee severance benefits, accelerated depreciation, and other exit-related costs in connection with the Cessation. A summary of the pre-tax costs and remaining costs associated with the restructuring is as follows (in millions):
A rollforward of the Cessation-related liabilities during the quarter ended March 31, 2016 is as follows (in millions):
1 Includes asset retirement obligations of $4.1 million. 2 Changes in estimates primarily relate to voluntary employee attrition which resulted in the forfeiture of severance and related benefits. The Cessation-related liabilities were included in the accompanying condensed consolidated balance sheets as follows (in millions):
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Investment in Affiliates |
3 Months Ended |
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Mar. 31, 2016 | |
Equity Method Investments and Joint Ventures [Abstract] | |
Investment in Affiliates | INVESTMENT IN AFFILIATES At March 31, 2016, investments in affiliates consisted of equity investments in limited liability companies. The Company has the ability to exercise significant influence over the operating and financial policies of these investments and, accordingly, accounts for its investments using the equity method of accounting. The Company’s operating results include its share of net earnings from its equity method investments. During the quarter ended March 31, 2015, the Company closed the remaining units and completed its Waihonua joint venture project which resulted in $242.3 million of operating revenue and $32.2 million for operating income and net income. |
Derivative Instruments |
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Derivative Instruments and Hedging Activities Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||
Derivative Instruments | DERIVATIVE INSTRUMENTS The Company is exposed to interest rate risk related to its floating rate debt. The Company balances its cost of debt and exposure to interest rates primarily through its mix of fixed and floating rate debt. From time to time, the Company may use interest rate swaps to manage its exposure to interest rate risk. The Company measures its interest rate swaps at fair value. The fair values of the Company's interest rate swaps (Level 2) are determined based on discounted cash flow analysis, reflecting the terms of the contracts, and utilize observable inputs such as interest rates and yield curves. As of March 31, 2016, the Company had a gross notional amount of $18.4 million related to interest rate swaps that were assumed in connection with 2013 acquisitions, in which the floating rates were swapped for fixed rates. The table below presents the fair value of derivative financial instruments, which are included in Other non-current liabilities in the condensed consolidated balance sheets (in millions):
The amount of expense the Company recorded in Interest income and other in the condensed consolidated statements of operations for the change in the fair values of the interest rate swaps was not material in 2015 or 2016. |
Segment Results |
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Segment Reporting [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Segment Results | SEGMENT RESULTS Segment results were as follows (in millions):
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Subsequent Events |
3 Months Ended |
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Mar. 31, 2016 | |
Subsequent Events [Abstract] | |
Subsequent Events | SUBSEQUENT EVENTS On April 26, 2016, the Company's Board of Directors declared a quarterly cash dividend of $0.06 per share of outstanding common stock, which will be paid on June 2, 2016 to shareholders of record as of May 9, 2016. |
Basis of Presentation (Tables) |
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Mar. 31, 2016 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Basis of Presentation [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Impact of Adopting New Accounting Guidance, ASU 2015-03 | The impact of adopting the above guidance as of December 31, 2015 was as follows:
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Commitments and Contingencies (Tables) |
3 Months Ended | ||||||||||||||||
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Mar. 31, 2016 | |||||||||||||||||
Commitments and Contingencies Disclosure [Abstract] | |||||||||||||||||
Summary of Commitments and Financial Arrangements | Commitments and financial arrangements not recorded on the Company's condensed consolidated balance sheet, excluding lease commitments that are disclosed in Note 9 of the Company’s 2015 Form 10-K, included the following (in millions) as of March 31, 2016:
1 Consists of standby letters of credit, issued by the Company’s lenders under the Company’s revolving credit facilities, and relate primarily to the Company’s real estate activities. In the event the letters of credit are drawn upon, the Company would be obligated to reimburse the issuer of the letter of credit. None of the letters of credit has been drawn upon to date, and the Company believes it is unlikely that any of these letters of credit will be drawn upon. 2 Represents bonds related to construction and real estate activities in Hawaii. Approximately $380.9 million is related to construction bonds issued by third party sureties (bid, performance and payment bonds) and the remainder is related to commercial bonds issued by third party sureties (permit, subdivision, license and notary bonds). In the event the bonds are drawn upon, the Company would be obligated to reimburse the surety that issued the bond. None of the bonds has been drawn upon to date, and the Company believes it is unlikely that any of these bonds will be drawn upon. |
Earnings Per Share (“EPS”) (Tables) |
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Mar. 31, 2016 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Earnings Per Share [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Reconciliation of Income from Continuing Operations and Computation of Earnings per Share | The following table provides a reconciliation of net income (loss) to net income (loss) available to A&B shareholders (in millions):
The number of shares used to compute basic and diluted EPS is as follows (in millions):
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Inventories (Tables) |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Mar. 31, 2016 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Inventory Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Inventories | Inventories at March 31, 2016 and December 31, 2015 were as follows (in millions):
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Share-Based Awards (Tables) |
3 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Mar. 31, 2016 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Stock Option Activity | Activity in the Company’s equity compensation plan in 2016 was as follows (in thousands, except weighted average exercise price and weighted average contractual life):
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Summary of Non-vested Restricted Stock Unit Activity | The following table summarizes non-vested restricted stock unit activity through March 31, 2016 (in thousands, except weighted average grant-date fair value amounts):
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Schedule of Fair Value Assumptions of Market-based Awards | The fair value of the Company’s market-based awards is estimated using the Company’s stock price on the date of grant and the probability of vesting using a Monte Carlo simulation with the following weighted average assumptions:
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Summary of Compensation Cost related to Share-based Payments | A summary of compensation cost related to share-based payments is as follows (in millions):
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Employee Benefit Plans (Tables) |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Mar. 31, 2016 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Compensation and Retirement Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Summary of Components of Net Periodic Benefit Cost | The components of net periodic benefit cost recorded for the three months ended March 31, 2016 and 2015 were as follows (in millions):
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Acquisitions (Tables) |
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Mar. 31, 2016 | |||||||||||||||||||||||||||||||||||||||||||||||||
Business Combinations [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||
Allocation of Purchase Price to Assets Acquired and Liabilities Assumed | The allocation of purchase price to assets acquired and liabilities assumed is as follows (in millions):
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Accumulated Other Comprehensive Loss (Tables) |
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Mar. 31, 2016 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Accumulated Other Comprehensive Income (Loss), Net of Tax [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Summary of Changes in Accumulated Other Comprehensive Income | The changes in accumulated other comprehensive loss by component for the three months ended March 31, 2016 were as follows (in millions, net of tax):
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Summary of Reclassifications of Other Comprehensive Income | The reclassifications of other comprehensive income components out of accumulated other comprehensive loss for the quarter ended March 31, 2016 and 2015 were as follows (in millions):
* These other comprehensive income components are included in the computation of net periodic pension cost (see Note 9 for additional details). |
Cessation of HC&S Sugar Operations (Tables) |
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Restructuring and Related Activities [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Summary of Pre-tax Costs and Remaining Costs Associated with Restructuring and Summary of Activity Related to Cessation Accruals | A summary of the pre-tax costs and remaining costs associated with the restructuring is as follows (in millions):
A rollforward of the Cessation-related liabilities during the quarter ended March 31, 2016 is as follows (in millions):
1 Includes asset retirement obligations of $4.1 million. 2 Changes in estimates primarily relate to voluntary employee attrition which resulted in the forfeiture of severance and related benefits. The Cessation-related liabilities were included in the accompanying condensed consolidated balance sheets as follows (in millions):
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Derivative Instruments (Tables) |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||
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Mar. 31, 2016 | |||||||||||||||||||||||||||||||||||||||||
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||
Schedule of Fair Value of Derivative Financial Instruments | The table below presents the fair value of derivative financial instruments, which are included in Other non-current liabilities in the condensed consolidated balance sheets (in millions):
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Segment Results (Tables) |
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Segment Reporting [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Segment Results | Segment results were as follows (in millions):
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Commitments and Contingencies - Summary of Commitments, Guarantees and Contingencies (Details) - Maximum $ in Millions |
Mar. 31, 2016
USD ($)
|
|||||
---|---|---|---|---|---|---|
Standby letters of credit | ||||||
Loss Contingencies [Line Items] | ||||||
Maximum amount of possible loss contingency | $ 11.8 | [1] | ||||
Bonds related to real estate and construction | ||||||
Loss Contingencies [Line Items] | ||||||
Maximum amount of possible loss contingency | 403.6 | [2] | ||||
Performance Bond | ||||||
Loss Contingencies [Line Items] | ||||||
Maximum amount of possible loss contingency | $ 380.9 | |||||
|
Earnings Per Share (“EPS”) - Schedule of Reconciliation of Income from Continuing Operations and Computation of Earnings per Share (Details) - USD ($) shares in Millions, $ in Millions |
3 Months Ended | |
---|---|---|
Mar. 31, 2016 |
Mar. 31, 2015 |
|
Earnings Per Share [Abstract] | ||
Net income (loss) | $ (7.0) | $ 25.9 |
Less: Income attributable to noncontrolling interest | (0.5) | (0.6) |
Net income (loss) attributable to A&B shareholders | (7.5) | 25.3 |
Less: Undistributed earnings allocated from redeemable noncontrolling interests | 0.4 | 0.0 |
Net income (loss) available to A&B shareholders | $ (7.1) | $ 25.3 |
Shares used to compute basic and diluted earnings per share [Abstract] | ||
Denominator for basic EPS - weighted average shares (in shares) | 48.9 | 48.8 |
Effect of dilutive securities: | ||
Employee/director stock options and restricted stock units (in shares) | 0.0 | 0.5 |
Denominator for diluted EPS - weighted average shares (in shares) | 48.9 | 49.3 |
Earnings Per Share (“EPS”) - Narrative (Details) - shares |
3 Months Ended | |
---|---|---|
Mar. 31, 2016 |
Mar. 31, 2015 |
|
Earnings Per Share [Abstract] | ||
Anti-dilutive securities excluded from the computation of weighted average dilutive shares outstanding (in shares) | 300,000 | 0 |
Fair Value of Financial Instruments (Details) - USD ($) $ in Millions |
Mar. 31, 2016 |
Dec. 31, 2015 |
---|---|---|
Carrying Amount | ||
Fair Value Measuremnt of Long-term Debt [Line Items] | ||
Long-term debt value | $ 683.7 | $ 587.0 |
Fair Value | ||
Fair Value Measuremnt of Long-term Debt [Line Items] | ||
Long-term debt value | $ 690.3 | $ 595.8 |
Inventories - Schedule of Inventories (Details) - USD ($) $ in Millions |
Mar. 31, 2016 |
Dec. 31, 2015 |
---|---|---|
Inventory [Line Items] | ||
Inventories | $ 63.7 | $ 55.9 |
Sugar inventories | ||
Inventory [Line Items] | ||
Inventories | 11.4 | 16.3 |
Work in process - sugar | ||
Inventory [Line Items] | ||
Inventories | 15.5 | 0.0 |
Asphalt | ||
Inventory [Line Items] | ||
Inventories | 11.6 | 12.8 |
Processed rock, portland cement, and sand | ||
Inventory [Line Items] | ||
Inventories | 12.0 | 12.2 |
Work in process | ||
Inventory [Line Items] | ||
Inventories | 3.5 | 3.7 |
Retail merchandise | ||
Inventory [Line Items] | ||
Inventories | 1.6 | 1.6 |
Parts, materials and supplies inventories | ||
Inventory [Line Items] | ||
Inventories | $ 8.1 | $ 9.3 |
Share-Based Awards - Summary of Non-vested Restricted Stock Unit Activity (Details) - Restricted Stock Units (RSUs) - 2012 Plan |
3 Months Ended |
---|---|
Mar. 31, 2016
$ / shares
shares
| |
2012 Plan Restricted Stock Units [Roll Forward] | |
Outstanding, beginning balance (in shares) | shares | 271,900 |
Granted (in shares) | shares | 135,300 |
Vested (in shares) | shares | (56,300) |
Canceled (in shares) | shares | (53,300) |
Outstanding, ending balance (in shares) | shares | 297,600 |
Weighted Average Grant Date Fair Value [Roll Forward] | |
Outstanding, beginning balance (in dollars per share) | $ / shares | $ 37.74 |
Granted (in dollars per share) | $ / shares | 29.93 |
Vested (in dollars per share) | $ / shares | 38.07 |
Canceled (in dollars per share) | $ / shares | 39.19 |
Outstanding, ending balance (in dollars per share) | $ / shares | $ 33.87 |
Share-Based Awards - Schedule of Fair Value Assumptions of Market-based Awards (Details) - Restricted Stock Units (RSUs) - 2012 Plan - Time-Based Vesting |
3 Months Ended | |
---|---|---|
Mar. 31, 2016 |
Mar. 31, 2015 |
|
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Volatility of A&B common stock | 26.30% | 29.50% |
Average volatility of peer companies | 27.70% | 34.20% |
Risk-free interest rate | 1.10% | 0.70% |
Share-Based Awards - Summary of Compensation Cost related to Share-based Payments (Details) - USD ($) $ in Millions |
3 Months Ended | |
---|---|---|
Mar. 31, 2016 |
Mar. 31, 2015 |
|
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Total share-based expense | $ 1.1 | $ 1.2 |
Total recognized tax benefit | (0.3) | (0.3) |
Share-based compensation expense (net of tax) | 0.8 | 0.9 |
Restricted Stock Units (RSUs) | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Total share-based expense | $ 1.1 | $ 1.2 |
Related Party Transactions (Details) - Affiliated Entity - USD ($) $ in Millions |
3 Months Ended | |
---|---|---|
Mar. 31, 2016 |
Mar. 31, 2015 |
|
Materials and construction | Supplier Contracts | ||
Related Party Transaction [Line Items] | ||
Revenue from related parties | $ 2.1 | $ 6.2 |
Receivables from related parties | 1.6 | 3.0 |
Due to related parties | 0.5 | 0.2 |
Real estate leasing and development | Management And Administrative Services, Developer Fee Revenue | ||
Related Party Transaction [Line Items] | ||
Revenue from related parties | $ 0.2 | $ 0.6 |
Employee Benefit Plans - Summary of Components of Net Periodic Benefit Cost (Details) - USD ($) $ in Millions |
3 Months Ended | |
---|---|---|
Mar. 31, 2016 |
Mar. 31, 2015 |
|
Pension Benefits | ||
Components of net periodic benefit cost [Abstract] | ||
Service cost | $ 0.8 | $ 0.8 |
Interest cost | 2.3 | 2.3 |
Expected return on plan assets | (2.5) | (2.7) |
Curtailment | (0.2) | 0.0 |
Amortization of prior service credit | (0.3) | (0.2) |
Amortization of net loss | 1.8 | 1.0 |
Net periodic benefit cost | 1.9 | 1.2 |
Post-retirement Benefits | ||
Components of net periodic benefit cost [Abstract] | ||
Service cost | 0.0 | 0.0 |
Interest cost | 0.1 | 0.2 |
Expected return on plan assets | 0.0 | 0.0 |
Curtailment | 0.0 | 0.0 |
Amortization of prior service credit | 0.0 | 0.0 |
Amortization of net loss | 0.0 | 0.1 |
Net periodic benefit cost | $ 0.1 | $ 0.3 |
Acquisitions - Narrative (Details) - Manoa Marketplace - USD ($) $ in Millions |
3 Months Ended | |
---|---|---|
Jan. 29, 2016 |
Mar. 31, 2016 |
|
Business Acquisition [Line Items] | ||
Consideration transferred | $ 82.4 | |
Leases, Acquired-in-Place | ||
Business Acquisition [Line Items] | ||
Weighted-average remaining lives of acquired finite-lived intangible assets | 5 years | |
Above Market Leases | ||
Business Acquisition [Line Items] | ||
Weighted-average remaining lives of acquired finite-lived intangible assets | 3 years | |
Selling, General and Administrative Expenses | ||
Business Acquisition [Line Items] | ||
Business acquisition related expenses | $ 1.1 |
Acquisitions - Allocation of Purchase Price (Details) - Manoa Marketplace $ in Millions |
Jan. 29, 2016
USD ($)
|
---|---|
Assets acquired: | |
Land | $ 40.5 |
Building | 36.8 |
Total assets acquired | 85.6 |
Total liabilities assumed | 3.2 |
Net assets acquired | 82.4 |
Leases, Acquired-in-Place | |
Assets acquired: | |
Finite-lived intangibles | 7.0 |
Above Market Leases | |
Assets acquired: | |
Finite-lived intangibles | $ 1.3 |
Accumulated Other Comprehensive Loss - Summary of Changes in Accumulated Other Comprehensive Income (Details) $ in Millions |
3 Months Ended |
---|---|
Mar. 31, 2016
USD ($)
| |
Changes In Accumulated Other Comprehensive Income [Roll Forward] | |
Pension and postretirement plans, Beginning balance | $ (45.3) |
Amounts reclassified from accumulated other comprehensive income, net of tax | (1.0) |
Pension and postretirement plans, Ending balance | $ (44.3) |
Accumulated Other Comprehensive Loss - Summary of Reclassifications of Other Comprehensive Income (Details) - USD ($) $ in Millions |
3 Months Ended | ||||
---|---|---|---|---|---|
Mar. 31, 2016 |
Mar. 31, 2015 |
||||
Amortization of defined benefit pension items reclassified to net periodic pension cost: | |||||
Net loss | [1] | $ 1.8 | $ 1.1 | ||
Prior service credit | [1] | (0.3) | (0.3) | ||
Total before income tax | 1.5 | 0.8 | |||
Income taxes | (0.5) | (0.3) | |||
Other Comprehensive Income | $ 1.0 | $ 0.5 | |||
|
Income Taxes (Details) $ in Millions |
Mar. 31, 2016
USD ($)
|
---|---|
Matson, Inc. | |
Income Tax Contingency [Line Items] | |
Liability for unrecognized tax benefits not realized | $ 0.1 |
Cessation of HC&S Sugar Operations - Cessation-related Liabilities Included in the Condensed Consolidated Balance Sheets (Details) - USD ($) $ in Millions |
Mar. 31, 2016 |
Dec. 31, 2015 |
||
---|---|---|---|---|
Restructuring Cost and Reserve [Line Items] | ||||
Total current portion | $ 14.6 | $ 6.4 | ||
HC&S | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Total current portion | 14.6 | 6.4 | ||
Total long-term portion | 1.8 | 11.1 | ||
Total Cessation-related liabilities | 16.4 | 17.5 | ||
HC&S | Employee severance benefits and related costs | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Total Cessation-related liabilities | 12.3 | 13.4 | ||
HC&S | Other exit costs | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Total Cessation-related liabilities | [1] | 4.1 | 4.1 | |
HC&S Cessation Related Liabilities - Current | HC&S | Employee severance benefits and related costs | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Total current portion | 12.3 | 5.8 | ||
HC&S Cessation Related Liabilities - Current | HC&S | Other exit costs | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Total current portion | 2.3 | 0.6 | ||
Other Non-Current Liabilities | HC&S | Employee severance benefits and related costs | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Total long-term portion | 0.0 | 7.6 | ||
Other Non-Current Liabilities | HC&S | Other exit costs | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Total long-term portion | $ 1.8 | $ 3.5 | ||
|
Investment in Affiliates (Details) $ in Millions |
3 Months Ended |
---|---|
Mar. 31, 2015
USD ($)
| |
Equity Method Investments and Joint Ventures [Abstract] | |
Operating revenue | $ 242.3 |
Operating income | $ 32.2 |
Derivative Instruments - Narrative (Details) $ in Millions |
Mar. 31, 2016
USD ($)
|
---|---|
Interest Rate Swap | Not Designated as Hedging Instrument | |
Derivative [Line Items] | |
Gross notional amount related to interest rate swaps | $ 18.4 |
Derivative Instruments - Schedule of Fair Value of Derivative Financial Instruments (Details) - USD ($) $ in Millions |
Mar. 31, 2016 |
Dec. 31, 2015 |
---|---|---|
Other Non-Current Liabilities | ||
Derivative [Line Items] | ||
Interest rate swap liability - floating to fixed rate | $ 2.7 | $ 2.5 |
Segment Results - Schedule of Segment Results (Details) - USD ($) $ in Millions |
3 Months Ended | ||||||
---|---|---|---|---|---|---|---|
Mar. 31, 2016 |
Mar. 31, 2015 |
||||||
Segment Reporting Information [Line Items] | |||||||
Revenue | $ 108.8 | $ 150.7 | |||||
Operating profit | 4.0 | 54.3 | |||||
HC&S cessation costs | (15.5) | 0.0 | |||||
Interest expense | (6.9) | (7.1) | |||||
General corporate expenses | (6.8) | (5.6) | |||||
Reduction in KRS II carrying value | 0.0 | (0.1) | |||||
Income (Loss) Before Income Taxes | (9.7) | 41.5 | |||||
Income tax expense (benefit) | (2.7) | 15.6 | |||||
Net Income (Loss) | (7.0) | 25.9 | |||||
Income attributable to noncontrolling interest | (0.5) | (0.6) | |||||
Net Income (Loss) Attributable to A&B Shareholders | (7.5) | 25.3 | |||||
Operating Segments | Leasing | |||||||
Segment Reporting Information [Line Items] | |||||||
Revenue | 34.8 | 32.7 | |||||
Operating profit | 14.1 | 13.2 | |||||
Operating Segments | Development and sales | |||||||
Segment Reporting Information [Line Items] | |||||||
Revenue | 0.3 | 36.5 | |||||
Operating profit | (3.8) | 32.0 | |||||
Operating Segments | Materials and construction | |||||||
Segment Reporting Information [Line Items] | |||||||
Revenue | 50.7 | 56.9 | |||||
Operating profit | 8.0 | 7.2 | |||||
Operating Segments | Agribusiness | |||||||
Segment Reporting Information [Line Items] | |||||||
Revenue | 23.0 | 28.9 | |||||
Operating profit | 1.2 | 1.9 | |||||
HC&S cessation costs | [1] | (15.5) | 0.0 | ||||
Reconciling item | |||||||
Segment Reporting Information [Line Items] | |||||||
Revenue | [2] | $ 0.0 | $ (4.3) | ||||
|
Subsequent Events (Details) - $ / shares |
3 Months Ended | ||
---|---|---|---|
Apr. 26, 2016 |
Mar. 31, 2016 |
Mar. 31, 2015 |
|
Subsequent Event [Line Items] | |||
Cash dividends per share (in dollars per share) | $ 0.06 | $ 0.05 | |
Subsequent Event | |||
Subsequent Event [Line Items] | |||
Cash dividends per share (in dollars per share) | $ 0.06 |
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