-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, OWWYWibqA9t16RSudJLpRh0Mz7f/vI1fh3GHMkjM7ykAaEOEVGGkvjKbpWk1WmRT QgkoJ1tEOLzm8nEB3450FQ== 0000003453-96-000002.txt : 19960228 0000003453-96-000002.hdr.sgml : 19960228 ACCESSION NUMBER: 0000003453-96-000002 CONFORMED SUBMISSION TYPE: U-3A-2 PUBLIC DOCUMENT COUNT: 4 CONFORMED PERIOD OF REPORT: 19951231 FILED AS OF DATE: 19960227 SROS: NASD FILER: COMPANY DATA: COMPANY CONFORMED NAME: ALEXANDER & BALDWIN INC CENTRAL INDEX KEY: 0000003453 STANDARD INDUSTRIAL CLASSIFICATION: WATER TRANSPORTATION [4400] IRS NUMBER: 990032630 STATE OF INCORPORATION: HI FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: U-3A-2 SEC ACT: 1935 Act SEC FILE NUMBER: 069-00166 FILM NUMBER: 96525764 BUSINESS ADDRESS: STREET 1: 822 BISHOP STREET CITY: HONOLULU STATE: HI ZIP: 96813 BUSINESS PHONE: 8085256611 MAIL ADDRESS: STREET 1: PO BOX 3440 CITY: HONOLULU STATE: HI ZIP: 96801 U-3A-2 1 FORM U-3A-2 SECURITIES AND EXCHANGE COMMISSION Washington, D. C. FORM U-3A-2 STATEMENT BY HOLDING COMPANY CLAIMING EXEMPTION UNDER RULE U-2 FROM THE PROVISIONS OF THE PUBLIC UTILITY HOLDING COMPANY ACT OF 1935 TO BE FILED ANNUALLY PRIOR TO MARCH 1 ALEXANDER & BALDWIN, INC. (Name of Company) P. O. Box 3440 Honolulu, Hawaii 96801 (hereinafter called the "Claimant") and its wholly-owned subsidiary, A&B-Hawaii, Inc., P. O. Box 3440, Honolulu, Hawaii 96801 (hereinafter called "Co-claimant"), hereby file with the Securities and Exchange Commission, pursuant to Rule U-2, this joint and consolidated statement claiming exemption as a holding company from the provisions of the Public Utility Holding Company Act of 1935. This statement is filed jointly by Claimant and Co-claimant pursuant to oral author- ization to file on a joint and consolidated basis received from the Commission on February 21, 1990. In support of such claim for exemption the following information is submitted: 1. The name, jurisdiction of organization, location and nature of business of Claimant and Co-claimant, and every subsidiary thereof, other than any exempt wholesale generator (EWG) or foreign utility company in which Claimant or Co-claimant directly or indirectly hold an interest, as at January 31, 1996 (indirect subsidiaries are indicated by indentation). Jurisdiction Name: of Organization Location Nature of Business Alexander & Baldwin, Inc. Hawaii Honolulu, Ocean carriage of goods, Hawaii real property management and development, invest- ments Subsidiaries: A&B Inc. Hawaii Honolulu, Inactive Hawaii A&B-Hawaii, Inc. Hawaii Honolulu, Agriculture/food (includ- Hawaii ing sugar cane and coffee plantations), real property management and development, general freight and petro- leum hauling and self-storage services A&B Development California Honolulu, Ownership, manage- Company Hawaii ment and development of (California) real property in California A&B Properties, Hawaii Kahului, Ownership, management, Inc. Hawaii development and selling of real property California and Hawaii Crockett, Refining raw sugar and Hawaiian Sugar California marketing of refined Company, Inc. sugar products and molasses MLM Corporation California Crockett, Marketing of refined California sugar products East Maui Irrigation Hawaii Puunene, Collection and Company, Limited Hawaii distribution of irrigation water on island of Maui Kahului Trucking & Hawaii Kahului, Motor carriage of goods, Storage, Inc. Hawaii self-storage services and stevedoring on island of Maui Kauai Commercial Hawaii Lihue, Motor carriage of goods Company, Hawaii and self-storage services Incorporated on island of Kauai Kukui'ula Hawaii Koloa, Ownership, management Development Hawaii and development of real Company, Inc. property on island of Kauai McBryde Sugar Hawaii Eleele, Sugar cane and coffee Company, Limited Hawaii plantations Island Coffee Hawaii Eleele, Grow,process and sell Company, Inc. Hawaii coffee Ohanui Corporation Hawaii Puunene, Collection and distribution Hawaii of domestic water on island of Maui South Shore Hawaii Koloa, Development and Community Hawaii operation of sewer trans- Services, Inc. mission and treatment system on island of Kauai South Shore Hawaii Koloa, Development and Resources, Inc. Hawaii operation of water source and delivery system on island of Kauai WDCI, INC. Hawaii Honolulu, Ownership, management Hawaii and development of property Hawaiian Sugar & Hawaii Crockett, Ocean carriage of sugar Transportation California from Hawaii Cooperative Matson Navigation Hawaii San Ocean carriage of goods Company, Inc. Francisco, between West Coast of California United States and Hawaii, Western Pacific and Asian ports Matson Intermodal Hawaii San Broker, shipper's agent System, Inc. Francisco, and freight forwarder for California overland cargo services of ocean carriers Matson Leasing Hawaii San Formerly container leasing; Company, Inc. Francisco, in process of winding-down California following the sale of its net assets in June 1995 Matson Services Hawaii San Tugboat services Company, Inc. Francisco, California Matson Terminals, Hawaii San Stevedoring and terminal Inc. Francisco, services California The Matson California San Inactive Company Francisco, California The Oceanic California San Inactive Steamship Francisco, Company California 2. A brief description of the properties of Claimant and Co-claimant, and each of their subsidiary public utility companies, used for the generation, transmission and distribution of electric energy for sale, or for the production, transmission and distribution of natural or manufactured gas: Claimant: None Co-Claimant: 4 steam-driven generators with rated capacities of 1 of 12,000 KW, 2 of 10,000 KW, and 1 of 20,000 KW; 5 hydroelectric plants with rated capacities of 1 of 1,000 KW, 3 of 1,500 KW and 1 of 500 KW; about 80 miles of transmission lines; all located on the island of Maui, State of Hawaii McBryde Sugar Company, 2 steam-driven generators with rated capacities of Limited ("McBryde") 7,500 KW; 2 hydroelectric plants with rated (Note 1) capacities of 1 of 1,000 KW and 1 of 3,600 KW; about 70 miles of transmission lines; all located on the island of Kauai, State of Hawaii 3. Information for the calendar year 1995 with respect to Claimant and Co-claimant, and each of their subsidiary public utility companies: (a)(1) Number of kwh of electric energy sold (all sales were at wholesale): Claimant None Co-claimant 98,031,000 kwh McBryde 19,625,000 kwh _______________ Note 1. McBryde Sugar Company, Limited has filed with the Securities and Exchange Commission an application for an order declaring that it is not an electric utility company. _______________ (2) Number of Mcf of natural or manufactured gas distributed at retail: None. Neither Claimant nor Co-claimant, nor any of their subsidiary public utility companies, distributes any natural or manufactured gas at retail. (b) Number of kwh of electric energy and Mcf of natural or manufactured gas distributed at retail outside the State in which each such company is organized: None. Neither Claimant nor Co-claimant, nor any of their subsidiary public utility companies, distributes any electric energy or natural or manufactured gas at retail outside the State in which each such company is organized. (c) Number of kwh of electric energy and Mcf of natural or manufactured gas sold at wholesale outside the State in which each such company is organized, or at the State line: None. Neither Claimant nor Co-claimant, nor any of their subsidiary public utility companies, sells electric energy or natural or manufactured gas at wholesale (or otherwise) outside the State in which each such company is organized, or at the State line. (d) Number of kwh of electric energy and Mcf of natural or manufactured gas purchased outside the State in which each such company is organized, or at the State line: None. Neither Claimant nor Co-claimant, nor any of their subsidiary public utility companies, purchases any electric energy or natural or manufactured gas outside the State in which each such company is organized, or at the State line. 4. The following information for the reporting period with respect to Claimant and Co-claimant and each interest they hold directly or indirectly in an EWG or a foreign utility company, stating monetary amounts in United States dollars: (a) Name, location, business address and description of the facilities used by the EWG or foreign utility company for the generation, transmission and distribution of electric energy for sale or for the distribution at retail of natural or manufactured gas. Not applicable. Neither Claimant nor Co-claimant holds any interest, directly or indirectly, in an EWG or a foreign utility company. (b) Name of each system company that holds an interest in such EWG or foreign utility company; and description of the interest held. No applicable (see 4(a) above). (c) Type and amount of capital invested, directly or indirectly, by the holding company claiming exemption; any direct or indirect guarantee of the security of the EWG or foreign utility company by the holding company claiming exemption; and any debt or other financial obligation for which there is recourse, directly or indirectly, to the holding company claiming exemption or another system company, other than the EWG or foreign utility company. Not applicable (see 4(a) above). (d) Capitalization and earnings of the EWG or foreign utility company during the reporting period. Not applicable (see 4(a) above). (e) Identify any service, sales or construction contract(s) between the EWG or foreign utility company and a system company, and describe the services to be rendered or goods sold and fees or revenues under such agreement(s). Not applicable (see 4(a) above). EXHIBIT A Consolidating statements of income and retained earnings of Claimant and Co-claimant, and their subsidiary companies, for the last calendar year, together with a consolidating balance sheet of Claimant and Co-claimant, and their subsidiary companies, as of the close of such calendar year, are attached hereto. EXHIBIT B FINANCIAL DATA SCHEDULE The registrant is required to submit this report and any amendments thereto electronically via EDGAR. Attached hereto is a Financial Data Schedule that sets forth the financial and other data specified below that are applicable to the registrant on a consolidated basis: ITEM NO. CAPTION HEADING 1 Total Assets 2 Total Operating Revenues 3 Net Income EXHIBIT C An organizational chart showing the relationship of each EWG or foreign utility company to associate companies in the holding-company system. Not applicable. Neither Claimant nor Co-claimant holds any interest, directly or indirectly, in an EWG or a foreign utility company. The above-named Claimant and Co-claimant have caused this joint and consolidated statement to be duly executed on their behalf by their authorized officers this 26th day of February, 1996. ALEXANDER & BALDWIN, INC. A&B-HAWAII, INC. (Name of Claimant) (Name of Co-Claimant) By: /s/ Glenn R. Rogers By: /s/ Glenn R. Rogers Glenn R. Rogers Glenn R. Rogers Vice President Senior Vice President (Corporate Seal) (Corporate Seal) Attest: Attest: /s/ Alyson J. Nakamura /s/ Alyson J. Nakamura Asst. Secretary Secretary Name, title and address of Officer to whom notices and correspondence concerning this statement should be addressed: If to Claimant Alexander & Baldwin Inc.: Michael J. Marks Vice President, General Counsel and Secretary Alexander & Baldwin, Inc. P. O. Box 3440 Honolulu, Hawaii 96801 If to Co-claimant A&B-Hawaii, Inc.: Michael J. Marks Senior Vice President and General Counsel A&B-Hawaii, Inc. P. O. Box 3440 Honolulu, Hawaii 96801 EX-1 2 CONSOL STMTS & FNOTES EXHIBIT A ALEXANDER & BALDWIN, INC. CONSOLIDATING STATEMENT OF INCOME FOR THE YEAR ENDED DECEMBER 31, 1995 ($000 omitted)
ABIC Elim ABI MNC ABHIC OPERATING REVENUES: Net sales 40,687 0 2,400 0 38,287 Net sugar sales 335,260 0 0 335,260 Transportation and terminal services 511,673 0 0 505,774 5,899 Rentals and other services 100,423 0 7,887 63,195 29,341 Total operating revenues 988,043 0 10,287 568,969 408,787 OPERATING COSTS AND EXPENSES: Cost of goods sold 23,887 0 243 0 23,644 Cost of sugar sold 316,367 0 0 316,367 Cost of services 473,757 0 2,703 439,486 31,568 Plantation closure 8,100 8,100 Total operating costs and expenses 822,111 0 2,946 439,486 379,679 GROSS MARGIN 165,932 0 7,341 129,483 29,108 GENERAL, ADMIN & SELLING EXPENSES 103,678 0 9,111 63,768 30,799 SELLING EXPENSES 0 0 0 INCOME (LOSS) FROM OPERATIONS 62,254 0 (1,770) 65,715 (1,691) OTHER INCOME: Interest - other 19,571 0 19 19,086 466 Total interest (other than intercompany) 19,571 0 19 19,086 466 Interest - intercompany 0 (1,817) 1,057 713 47 Total interest 19,571 (1,817) 1,076 19,799 513 Dividends 2,683 0 2,683 0 0 Gain on disposal of property (243) (5,816) 8 (9) 5,574 Gain of sale of securities 0 0 0 0 0 Other 10,401 0 31 5,761 4,609 Total securities and other 10,401 0 31 5,761 4,609 Total other income 32,412 (7,633) 3,798 25,551 10,696 OTHER DEDUCTIONS: Interest - other 37,365 0 1,384 16,879 19,102 Interest capitalized (3,936) 0 0 (3,936) Total interest (other than intercompany) 33,429 0 1,384 16,879 15,166 Interest - intercompany 0 (1,817) 43 0 1,774 Total interest 33,429 (1,817) 1,427 16,879 16,940 Other 9,283 0 177 2,784 6,322 Total other deductions 42,712 (1,817) 1,604 19,663 23,262 INCOME (LOSS) BEFORE INCOME TAXES 51,954 (5,816) 424 71,603 (14,257) PROVISION FOR INCOME TAXES (CREDIT): Current - Federal (23,833) 0 (715) (19,379) (3,739) Current - State 403 0 72 760 (429) Deferred income taxes 42,965 (2,168) 1,070 45,691 (1,628) Total provision for income taxes 19,535 (2,168) 427 27,072 (5,796) INCOME FROM CONTINUING OPERATIONS 32,419 (3,648) (3) 44,531 (8,461) DISCONTINUED OPS: MLC 5,336 0 0 5,336 0 GAIN ON SALE OF MLC NET ASSETS 18,000 18,000 NET INCOME 55,755 (3,648) (3) 67,867 (8,461) A&B-HAWAII, INC. CONSOLIDATING STATEMENT OF INCOME FOR THE YEAR ENDED DECEMBER 31, 1995 ($000 omitted) ABHIC Elim ABHI ABP ABD OPERATING REVENUES: Net sales 38,287 (6,763) 17,364 20,075 0 Net sugar sales 335,260 (93,559) 89,849 0 0 Transportation and terminal services 5,899 0 0 0 0 Rentals and other services 29,341 (4,193) 762 17,101 13 Total operating revenues 408,787 (104,515) 107,975 37,176 13 OPERATING COSTS AND EXPENSES: Cost of goods sold 23,644 (3,288) 8,763 10,067 0 Cost of sugar sold 316,367 (93,559) 90,468 0 0 Cost of services 31,568 (3,506) 92 5,683 13 Plantation closure 8,100 Total operating costs and expenses 379,679 (100,353) 99,323 15,750 13 GROSS MARGIN 29,108 (4,162) 8,652 21,426 0 GENERAL, ADMIN & SELLING EXPENSES 30,799 (686) 5,636 4,894 0 SELLING EXPENSES 0 0 0 0 0 INCOME (LOSS) FROM OPERATIONS (1,691) (3,476) 3,016 16,532 0 OTHER INCOME: Interest - other 466 0 129 320 0 Total interest (other than intercompany) 466 0 129 320 0 Interest - intercompany 47 (576) 623 0 0 Total interest 513 (576) 752 320 0 Dividends 0 0 0 0 0 Gain on disposal of property 5,574 (9,999) 8,484 0 0 Gain of sale of securities 0 0 0 0 0 Other 4,609 0 1,474 1 0 Total securities and other 4,609 0 1,474 1 0 Total other income 10,696 (10,575) 10,710 321 0 OTHER DEDUCTIONS: Interest - other 19,102 3,936 11,926 (655) 0 Interest capitalized (3,936) (3,936) 0 0 0 Total interest (other than intercompany) 15,166 0 11,926 (655) 0 Interest - intercompany 1,774 (576) 1,774 0 0 Total interest 16,940 (576) 13,700 (655) 0 Other 6,322 0 441 0 0 Total other deductions 23,262 (576) 14,141 (655) 0 INCOME (LOSS) BEFORE INCOME TAXES (14,257) (13,475) (415) 17,508 0 PROVISION FOR INCOME TAXES (CREDIT): Current - Federal (3,739) 1 950 6,937 66 Current - State (429) 1 (326) 383 (2) Deferred income taxes (1,628) (4,933) (381) (780) (64) Total provision for income taxes (5,796) (4,931) 243 6,540 0 INCOME FROM CONTINUING OPERATIONS (8,461) (8,544) (658) 10,968 0 DISCONTINUED OPS: MLC 0 0 0 0 0 GAIN ON SALE OF MLC NET ASSETS NET INCOME (8,461) (8,544) (658) 10,968 0
A&B-HAWAII, INC. CONSOLIDATING STATEMENT OF INCOME FOR THE YEAR ENDED DECEMBER 31, 1995 ($000 omitted)
WDCI KDC SSR SSC C&H MCB OPERATING REVENUES: Net sales 2,810 0 0 0 760 Net sugar sales 0 0 0 0 333,674 5,296 Transportation and terminal services 0 0 0 0 0 Rentals and other services 11,938 0 0 18 0 Total operating revenues 14,748 0 0 18 333,674 6,056 OPERATING COSTS AND EXPENSES: Cost of goods sold 69 0 0 0 130 Cost of sugar sold 0 0 0 0 312,176 7,282 Cost of services 4,535 0 0 18 17,635 0 Plantation closure 8,100 Total operating costs and expenses 4,604 0 0 18 329,811 15,512 GROSS MARGIN 10,144 0 0 0 3,863 (9,456) GENERAL, ADMIN & SELLING EXPENSES 120 84 0 0 19,778 0 SELLING EXPENSES 0 0 0 0 INCOME (LOSS) FROM OPERATIONS 10,024 (84) 0 0 (15,915) (9,456) OTHER INCOME: Interest - other 14 0 0 0 1 0 Total interest (other than intercompany) 14 0 0 0 1 0 Interest - intercompany 0 0 0 0 0 Total interest 14 0 0 0 1 0 Dividends 0 0 0 0 0 Gain on disposal of property 0 0 0 0 (166) 7,342 Gain of sale of securities 0 0 0 0 0 Other 499 0 0 0 1,392 454 Total securities and other 499 0 0 0 1,392 454 Total other income 513 0 0 0 1,227 7,796 OTHER DEDUCTIONS: Interest - other 20 (2,115) (57) (1,105) 7,152 0 Interest capitalized 0 0 0 0 0 Total interest (other than intercompany) 20 (2,115) (57) (1,105) 7,152 0 Interest - intercompany 0 0 0 0 576 0 Total interest 20 (2,115) (57) (1,105) 7,728 0 Other 0 0 0 0 5,535 36 Total other deductions 20 (2,115) (57) (1,105) 13,263 36 INCOME (LOSS) BEFORE INCOME TAXES 10,517 2,031 57 1,105 (27,951) (1,696) PROVISION FOR INCOME TAXES (CREDIT): Current - Federal 2,422 708 37 (563) (12,349) (724) Current - State (35) 75 4 (13) (351) (14) Deferred income taxes 746 (25) (20) 988 2,282 (22) Total provision for income taxes 3,133 758 21 412 (10,418) (760) INCOME FROM CONTINUING OPERATIONS 7,384 1,273 36 693 (17,533) (936) DISCONTINUED OPS: MLC 0 0 0 0 0 GAIN ON SALE OF MLC NET ASSETS NET INCOME 7,384 1,273 36 693 (17,533) (936) A&B-HAWAII, INC. CONSOLIDATING STATEMENT OF INCOME FOR THE YEAR ENDED DECEMBER 31, 1995 ($000 omitted) MCBF KCC KTS OC EMI OPERATING REVENUES: Net sales 3,092 0 949 Net sugar sales 0 0 0 Transportation and terminal services 0 2,569 3,330 0 0 Rentals and other services 0 307 3,395 0 0 Total operating revenues 3,092 2,876 6,725 0 949 OPERATING COSTS AND EXPENSES: Cost of goods sold 6,954 0 949 Cost of sugar sold 0 0 0 Cost of services 0 2,324 4,774 0 0 Plantation closure 0 Total operating costs and expenses 6,954 2,324 4,774 0 949 GROSS MARGIN (3,862) 552 1,951 0 0 GENERAL, ADMIN & SELLING EXPENSES 0 470 503 SELLING EXPENSES INCOME (LOSS) FROM OPERATIONS (3,862) 82 1,448 0 0 OTHER INCOME: Interest - other 0 2 0 0 Total interest (other than intercompany) 2 0 0 Interest - intercompany 0 0 0 0 0 Total interest 0 0 2 0 0 Dividends 0 0 0 Gain on disposal of property (87) 0 0 Gain of sale of securities 0 0 0 Other 479 5 305 Total securities and other 479 0 0 5 305 Total other income 392 0 2 5 305 OTHER DEDUCTIONS: I Interest - other 0 0 0 Interest capitalized 0 0 0 Total interest (other than intercompany) 0 0 0 Interest - intercompany 0 0 0 0 Total interest 0 0 0 0 0 Other 0 5 305 Total other deductions 0 0 0 5 305 INCOME (LOSS) BEFORE INCOME TAXES (3,470) 82 1,450 0 0 PROVISION FOR INCOME TAXES (CREDIT): Current - Federal (1,695) (2) 490 0 (17) Current - State (159) (2) 13 0 (3) Deferred income taxes 503 35 24 0 19 Total provision for income taxes (1,351) 31 527 0 (1) INCOME FROM CONTINUING OPERATIONS (2,119) 51 923 0 1 DISCONTINUED OPS: MLC 0 0 0 GAIN ON SALE OF MLC NET ASSETS NET INCOME (2,119) 51 923 0 1
ALEXANDER & BALDWIN, INC. CONSOLIDATING BALANCE SHEET DECEMBER 31, 1995 ($000 omitted)
ABIC Elim ABI MNC ABHIC CURRENT ASSETS: Cash (4,453) 44 (6,023) 1,526 Certificates of deposit 0 0 0 0 Short-term investments 36,603 0 36,603 0 Accounts and notes receivable: 0 0 0 Trade 107,196 52 75,726 31,418 Sugar receivable 3,501 0 0 3,501 Other 36,070 23 17,398 18,649 0 0 0 Undistributed return from sugar 47,604 0 0 47,604 Production costs deferred (accrued) 0 0 0 0 Property held for Resale 23,550 0 0 23,550 Saleable inventories 3,681 0 0 3,681 Materials and supplies 34,821 0 11,717 23,104 Deferred income tax 11,439 (1,071) (104) 5,503 7,111 Prepaid expenses and other current assets 13,413 1,195 845 7,302 4,071 Accrued for deposit in CCF (6,233) 0 (6,233) 0 Total current assets 307,192 124 860 141,993 164,215 INVESTMENTS: Subsidiaries consolidated 0 (513,470) 513,470 0 0 Divisions 0 (66,903) 66,903 0 0 Other 82,246 81,538 0 708 REAL ESTATE DEVELOPMENTS 56,104 0 0 56,104 PROPERTY: Land 60,101 (3,683) 17,542 46,242 Buildings 202,769 (2,133) 58,476 0 146,426 Vessels 657,238 0 657,238 0 Machinery and equipment 660,499 11,599 388,678 260,222 Water, power and sewer system 82,208 6,821 0 75,387 Other property improvements 91,091 2,755 54,713 33,623 Total 1,753,906 (5,816) 97,193 1,100,629 561,900 Less accumulated depreciation 780,392 10,512 565,006 204,874 Property - net 973,514 (5,816) 86,681 535,623 357,026 CAPITAL CONSTRUCTION FUND 317,212 0 317,212 0 NONCURRENT INTERCOMPANY RECEIVABLES 0 16,876 20,529 (37,405) DEFERRED CHARGES AND OTHER ASSETS 46,491 1,234 2,402 42,855 TOTAL 1,782,759 (586,065) 767,562 1,017,759 583,503 ALEXANDER & BALDWIN, INC. CONSOLIDATING BALANCE SHEET DECEMBER 31, 1995 ($000 omitted) ABIC Elim ABI MNC ABHIC CURRENT LIABILITIES: Notes payable 83,000 0 0 0 83,000 Current portion of long-term debt 24,794 (1) 850 15,294 8,651 Capital lease obligations (current) 11,061 0 0 10,561 500 Accounts payable 30,916 1 319 19,040 11,556 Payrolls and vacation pay 19,891 0 649 9,766 9,476 Income taxes - current 0 3,225 (6,292) (1,105) 4,172 Income taxes - deferred 0 0 0 0 Other taxes 6,099 0 508 3,952 1,639 Postretirement benefits obligations-current 5,118 50 4 667 4,397 Uninsured claims 13,076 0 0 9,529 3,547 Reserve for drydocking 4,725 0 0 4,725 0 Other liabilities 24,113 (50) 2,350 10,321 11,492 Total current liabilities 222,793 3,225 (1,612) 82,750 138,430 LONG-TERM LIABILITIES: Long-term debt 380,389 0 0 212,819 167,570 Long-term intercompany notes payable 0 0 0 0 0 Capital lease obligations (noncurrent) 24,186 0 0 21,186 3,000 Postretirement benefits obligations-noncurrent 118,418 (373) 39 27,797 90,955 Other 56,916 373 5,088 32,181 19,274 Total long-term liabilities 579,909 0 5,127 293,983 280,799 DEFERRED CREDITS: Deferred income taxes (noncurrent) 330,379 (5,269) 43,818 240,127 51,703 Deferred income 0 0 0 0 Total deferred credits 330,379 (5,269) 43,818 240,127 51,703 Total liabilities 1,133,081 (2,044) 47,333 616,860 470,932 SHAREHOLDERS' EQUITY: Capital stock 37,133 (2) 37,133 1 1 Additional capital 40,138 (149,381) 40,138 21,836 127,545 Unrealized holding gains 39,830 0 39,830 0 0 Retained earnings 546,394 (380,264) 562,571 379,062 (14,975) Treasury stock (13,817) (13,817) 0 0 Division investment 0 (54,374) 54,374 0 0 Total shareholders' equity 649,678 (584,021) 720,229 400,899 112,571 TOTAL 1,782,759 (586,065) 767,562 1,017,759 583,503
A&B - HAWAII, INC. CONSOLIDATING BALANCE SHEET DECEMBER 31, 1995 ($000 omitted)
ABHIC Elim ABHI ABP ABD CURRENT ASSETS: Cash 1,526 (7) 2,879 (3,187) Certificates of deposit 0 0 Short-term investments 0 0 Accounts and notes receivable: 0 Trade 31,418 1,456 789 Sugar receivable 3,501 96 3,405 Other 18,649 (178) 2,363 3,421 0 Undistributed return from sugar 47,604 (96) 96 Production costs deferred (accrued) 0 Property held for Resale 23,550 6,584 16,966 Saleable inventories 3,681 0 Materials and supplies 23,104 6,700 Deferred income tax 7,111 3,248 548 (1) Prepaid expenses and other current assets 4,071 178 1,446 975 1 Accrued for deposit in CCF 0 0 Total current assets 164,215 6,577 21,593 19,512 0 INVESTMENTS: Subsidiaries consolidated 0 (215,877) 207,207 Divisions 0 (70,126) 70,126 Other 708 (2,331) 2,807 225 REAL ESTATE DEVELOPMENTS 56,104 9,765 6,018 PROPERTY: Land 46,242 (12,894) 16,843 11,503 413 Buildings 146,426 (5,999) 6,029 29,166 5 Vessels 0 0 Machinery and equipment 260,222 136,022 1,747 Water, power and sewer system 75,387 66,238 3,126 Other property improvements 33,623 (24,955) 2,806 25,052 746 Total 561,900 (43,848) 227,938 70,594 1,164 Less accumulated depreciation 204,874 137,889 17,574 7 Property - net 357,026 (43,848) 90,049 53,020 1,157 CAPITAL CONSTRUCTION FUND 0 0 NONCURRENT INTERCOMPANY RECEIVABLES (37,405) 5,707 3,315 (77,225) 17,021 DEFERRED CHARGES AND OTHER ASSETS 42,855 (2) 810 30 TOTAL 583,503 (310,135) 395,907 1,580 18,178 A&B - HAWAII, INC. CONSOLIDATING BALANCE SHEET DECEMBER 31, 1995 ($000 omitted) ABHIC Elim ABHI ABP ABD CURRENT LIABILITIES: Notes payable 83,000 0 Current portion of long-term debt 8,651 5,916 Capital lease obligations (current) 500 0 Accounts payable 11,556 (20) 2,873 3,296 (1) Payrolls and vacation pay 9,476 2,594 258 Income taxes - current 4,172 1,653 2,728 57 Income taxes - deferred 0 Other taxes 1,639 51 58 Postretirement benefits obligations-current 4,397 83 1,206 Uninsured claims 3,547 0 Reserve for drydocking 0 0 Other liabilities 11,492 (83) 7,277 1,344 0 Total current liabilities 138,430 (20) 21,570 7,684 56 LONG-TERM LIABILITIES: Long-term debt 167,570 136,285 Long-term intercompany notes payable 0 Capital lease obligations (noncurrent) 3,000 0 Postretirement benefits obligations-noncurrent 90,955 2 25,358 499 Other 19,274 284 (2,260) Total long-term liabilities 280,799 286 159,383 499 0 DEFERRED CREDITS: Deferred income taxes (noncurrent) 51,703 (7,339) 18,358 8,567 8 Deferred income 0 (286) 254 Total deferred credits 51,703 (7,625) 18,612 8,567 8 Total liabilities 470,932 (7,359) 199,565 16,750 64 SHAREHOLDERS' EQUITY: Capital stock 1 (40,329) 1 452 1 Additional capital 127,545 (185,414) 127,545 34,658 11,519 Unrealized holding gains 0 Retained earnings (14,975) (583) (4,606) (50,280) 6,594 Treasury stock 0 83 0 Division investment 0 (76,533) 73,402 Total shareholders' equity 112,571 (302,776) 196,342 (15,170) 18,114 TOTAL 583,503 (310,135) 395,907 1,580 18,178
A&B - HAWAII, INC. CONSOLIDATING BALANCE SHEET DECEMBER 31, 1995 ($000 omitted)
WDCI KDC SSR SSC C&H MCB CURRENT ASSETS: Cash 230 (3) (1) 1,845 (25) Certificates of deposit 0 Short-term investments 0 Accounts and notes receivable: 0 Trade 161 27,761 175 Sugar receivable 0 Other 42 12,972 0 Undistributed return from sugar 47,604 Production costs deferred (accrued) 0 Property held for Resale 0 Saleable inventories 0 Materials and supplies 15,964 Deferred income tax (3) (106) 3,362 (145) Prepaid expenses and other current assets 233 6 (5) 1,065 Accrued for deposit in CCF 0 Total current assets 663 3 0 (112) 110,573 5 INVESTMENTS: Subsidiaries consolidated 0 8,670 Divisions 0 Other 0 7 REAL ESTATE DEVELOPMENTS 22,647 812 16,862 0 PROPERTY: Land 26,590 1,680 1,827 Buildings 84,179 26,959 Vessels 0 Machinery and equipment 14 109 111,343 Water, power and sewer system 90 0 1,770 Other property improvements 1,270 7,736 209 10,264 Total 112,143 7,845 0 209 150,246 3,597 Less accumulated depreciation 13,074 69 22,552 Property - net 99,069 7,776 0 209 127,694 3,597 CAPITAL CONSTRUCTION FUND 0 NONCURRENT INTERCOMPANY RECEIVABLES 32,948 (1,139) 176 1,076 (11,584) 2,705 DEFERRED CHARGES AND OTHER ASSETS (4) 39,777 TOTAL 132,676 29,287 988 18,035 266,460 14,984 A&B - HAWAII, INC. CONSOLIDATING BALANCE SHEET DECEMBER 31, 1995 ($000 omitted) WDCI KDC SSR SSC C&H MCB CURRENT LIABILITIES: Notes payable 83,000 Current portion of long-term debt 2,735 Capital lease obligations (current) 500 Accounts payable 78 240 (1) 4,688 89 Payrolls and vacation pay 33 5,910 434 Income taxes - current (8) 810 21 (592) (678) 993 Income taxes - deferred 0 Other taxes 45 1 1,463 (7) Postretirement benefits obligations-current 2,516 362 Uninsured claims 3,547 Reserve for drydocking 0 Other liabilities 342 40 3,469 (1,061) Total current liabilities 457 1,124 21 (593) 107,150 810 LONG-TERM LIABILITIES: Long-term debt 31,285 Long-term intercompany notes payable 0 Capital lease obligations (noncurrent) 3,000 Postretirement benefits obligations-noncurrent 52,164 9,782 Other 2 17,538 3,707 Total long-term liabilities 0 2 0 103,987 13,489 DEFERRED CREDITS: Deferred income taxes (noncurrent) 31,355 (1,247) 2,222 (4) (1,840) Deferred income 0 32 Total deferred credits 31,355 (1,247) 0 2,222 (4) (1,808) Total liabilities 31,812 (121) 21 1,629 211,133 12,491 SHAREHOLDERS' EQUITY: Capital stock 912 15,501 501 4,001 15,179 2,350 Additional capital 59,849 0 63,330 10,185 Unrealized holding gains 0 Retained earnings 40,103 13,907 466 12,405 (23,182) (9,959) Treasury stock 0 0 (83) Division investment 0 0 0 Total shareholders' equity 100,864 29,408 967 16,406 55,327 2,493 TOTAL 132,676 29,287 988 18,035 266,460 14,984 A&B - HAWAII, INC. CONSOLIDATING BALANCE SHEET DECEMBER 31, 1995 ($000 omitted) MCBF KCC KTS OC EMI CURRENT ASSETS: Cash (111) (88) (6) 0 0 Certificates of deposit 0 0 0 0 Short-term investments 0 0 0 0 Accounts and notes receivable: 0 0 Trade 683 189 204 0 0 Sugar receivable 0 0 0 0 Other 4 38 (13) 0 0 0 0 Undistributed return from sugar 0 0 0 0 Production costs deferred (accrued) 0 0 Property held for Resale 0 0 Saleable inventories 3,681 0 0 0 0 Materials and supplies 96 22 322 0 0 Deferred income tax 84 123 0 1 Prepaid expenses and other current assets 24 44 81 0 23 Accrued for deposit in CCF 0 0 0 0 Total current assets 4,377 289 711 0 24 INVESTMENTS: Subsidiaries consolidated 0 0 Divisions 0 0 Other 0 0 REAL ESTATE DEVELOPMENTS 0 0 PROPERTY: Land 0 0 0 280 Buildings 418 1,664 3,961 0 44 Vessels 0 0 0 0 Machinery and equipment 5,304 1,647 3,305 0 731 Water, power and sewer system 0 201 7 3,955 Other property improvements 10,415 16 64 0 0 Total 16,137 3,327 7,531 7 5,010 Less accumulated depreciation 1,997 1,680 5,611 7 4,414 Property - net 14,140 1,647 1,920 0 596 CAPITAL CONSTRUCTION FUND 0 0 NONCURRENT INTERCOMPANY RECEIVABLES (12,538) 2 2,131 DEFERRED CHARGES AND OTHER ASSETS 42 419 1,623 0 160 TOTAL 6,021 2,355 4,254 2 2,911 A&B - HAWAII, INC. CONSOLIDATING BALANCE SHEET DECEMBER 31, 1995 ($000 omitted) MCBF KCC KTS OC EMI CURRENT LIABILITIES: Notes payable 0 0 0 0 Current portion of long-term debt 0 0 0 0 Capital lease obligations (current) 0 0 0 0 Accounts payable 30 72 212 0 0 Payrolls and vacation pay 28 75 132 0 12 Income taxes - current (793) 15 (18) 0 (16) Income taxes - deferred 0 0 0 Other taxes 2 10 16 0 0 Postretirement benefits obligations-current 30 182 0 18 Uninsured claims 0 0 Reserve for drydocking 0 0 0 0 Other liabilities 39 125 0 0 Total current liabilities (733) 241 649 0 14 LONG-TERM LIABILITIES: Long-term debt 0 0 0 0 Long-term intercompany notes payable 0 0 0 0 Capital lease obligations (noncurrent) 0 0 0 0 Postretirement benefits obligations-noncurrent 651 2,206 0 293 Other 0 0 3 Total long-term liabilities 0 651 2,206 0 296 DEFERRED CREDITS: Deferred income taxes (noncurrent) 1,773 127 (173) 0 (104) Deferred income 0 0 0 0 Total deferred credits 1,773 127 (173) 0 (104) Total liabilities 1,040 1,019 2,682 0 206 SHAREHOLDERS' EQUITY: Capital stock 1 1 1 2 1,427 Additional capital 1,804 250 2,917 0 902 Unrealized holding gains 0 0 Retained earnings 45 1,085 (1,346) 0 376 Treasury stock 0 0 0 0 0 Division investment 3,131 0 0 0 0 Total shareholders' equity 4,981 1,336 1,572 2 2,705 TOTAL 6,021 2,355 4,254 2 2,911
ALEXANDER & BALDWIN, INC. CONSOLIDATING STATEMENT OF RETAINED EARNINGS FOR THE YEAR ENDED DECEMBER 31, 1995 ($000 omitted)
ABIC Elim ABI MNC ABHIC Balance at December 31, 1994 541,910 (445,362) 541,910 381,195 64,167 Net income 55,755 (3,648) (3) 67,867 (8,461) Dividends to shareholders (40,035) (40,035) 0 Capital stock purchased and retired (11,196) (11,196) 0 Intercompany dividends 0 133,871 0 (70,000) (63,871) Intercompany property sales 0 6,334 (6,334) Stock acquired in payment of options (40) (40) 0 Investment in subsidiaries changed from cost to equity method 0 (63,804) 63,804 0 Other 0 8,497 (8,021) (476) Balance at December 31, 1995 546,394 (364,112) 546,419 379,062 (14,975) A&B - HAWAII, INC. CONSOLIDATING STATEMENT OF RETAINED EARNINGS FOR THE YEAR ENDED DECEMBER 31, 1995 ($000 omitted) ABHIC Elim ABHI ABP ABD Balance at December 31, 1994 64,167 (95,126) 65,491 63,508 6,594 Net income (8,461) (8,544) (658) 10,968 0 Dividends to shareholders 0 Capital stock purchased and retired 0 0 Intercompany dividends (63,871) 104,466 (63,871)(124,802) Intercompany sale - HNL Building (6,334) (6,334) Stock acquired in payment of options 0 Investment in subsidiaries changed from 0 cost to equity method 0 (4,818) 4,818 Other (476) 5,674 (6,287) 46 Balance at December 31, 1995 (14,975) 1,652 (6,841) (50,280) 6,594
A&B - HAWAII, INC. CONSOLIDATING STATEMENT OF RETAINED EARNINGS FOR THE YEAR ENDED DECEMBER 31, 1995 ($000 omitted)
WDCI KDC SSR SSC C&H MCB Balance at December 31, 1994 32,622 (46) 555 (5,649) (9,025) Net income 7,384 1,273 36 693 (17,533) (936) Dividends to shareholders Capital stock purchased and retired Intercompany dividends 12,681 430 11,156 Intercompany sale - HNL Building Stock acquired in payment of options Investment in subsidiaries changed from cost to equity method Other 97 (1) 1 2 Balance at December 31, 1995 40,103 13,907 466 12,405 (23,182) (9,959) A&B - HAWAII, INC. CONSOLIDATING STATEMENT OF RETAINED EARNINGS FOR THE YEAR ENDED DECEMBER 31, 1995 ($000 omitted) MCBF KCC KTS OC EMI Balance at December 31, 1994 2,171 1,796 901 0 375 Net income (2,119) 51 923 0 1 Dividends to shareholders Capital stock purchased and retired Intercompany dividends (762) (3,169) Intercompany sale - HNL Building Stock acquired in payment of options Investment in subsidiaries changed from cost to equity method Other (7) (1) Balance at December 31, 1995 45 1,085 (1,346) 0 376
LEGEND OF COMPANY REFERENCES IN CONSOLIDATING FINANCIAL SCHEDULES: Elim Eliminations ABIC Alexander & Baldwin, Inc. Consolidated ABI Alexander & Baldwin, Inc. MNC Matson Navigation Company, Inc. ABHIC A&B- Hawaii, Inc. Consolidated ABHI A&B- Hawaii, Inc. ABP A&B Properties, Inc. ADB A&B Development Co. (Calif), Inc. WDCI Wailea Development Co., Inc. KDC Kukuiula Development Co. Inc. SSR South Shore Resources, Inc. SSC South Shore Community Services, Inc. C&H California & Hawaiian Sugar Co. MCB McBryde Sugar Co., Limited MCBF McBryde Farms, Inc. KCC Kauai Commercial Co., Inc. KTS Kahului Trucking & Storage, Inc. OC Ohanui Corp. EMI East Maui Irrigation Company Limited EX-5 3 NOTES TO FINANCIAL STATEMENTS ALEXANDER & BALDWIN, INC. AND SUBSIDIARIES 1.SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES BASIS OF CONSOLIDATION: The consolidated financial statements include the accounts of Alexander & Baldwin, Inc. and all subsidiaries, after elimination of significant intercompany amounts. OCEAN TRANSPORTATION: Voyage revenue and variable costs and expenses are included in income at the time each voyage leg commences. This method of accounting does not differ materially from other acceptable accounting methods. Vessel depreciation, charter hire, terminal operating overhead, and general and administrative expenses are charged to expense as incurred. Expected costs of regularly-scheduled dry docking of vessels and planned major vessel repairs performed during dry docking are accrued. PROPERTY DEVELOPMENT AND MANAGEMENT: Sales are recorded when the risks and benefits of ownership have passed to the buyers (generally at closing dates), adequate down payments have been received and collection of remaining balances is reasonably assured. Expenditures for real estate developments are capitalized during construction and are classified as Real Estate Developments on the balance sheet. When construction is complete, the costs are reclassified either as Property or as Real Estate Held For Sale, based upon the Company's intent to sell the completed asset or to hold it as an investment. Cash flows related to real estate developments are classified as operating or investing activities, based upon the Company's intention either to sell the property or to retain ownership of the property as an investment following completion of construction. FOOD PRODUCTS: Revenue is recorded when refined sugar products and coffee are sold to third parties. Costs of growing sugar cane are charged to the cost of production in the year incurred and to cost of sales as refined products are sold. The cost of raw cane sugar purchased from third parties is recorded as inventory at the purchase price. Costs of developing coffee are capitalized during the development period and depreciated over the estimated productive lives of the orchards. Costs of growing coffee are charged to inventory in the year incurred and to cost of sales as coffee is sold. CASH AND CASH EQUIVALENTS: The Company considers highly liquid investments purchased with original maturities of three months or less, which have no significant risk of change in value, to be cash equivalents. INVENTORIES: Sugar inventory, consisting of raw and refined sugar and coffee inventory, are stated at the lower of cost (first-in, first-out basis) or market. Other inventories, composed principally of materials and supplies, are stated at the lower of cost (principally average cost) or market. PROPERTY: Property is stated at cost. Major renewals and betterments are capitalized. Replacements, maintenance and repairs which do not improve or extend asset lives are charged to expense as incurred. Assets held under capital leases are included with property owned. Gains or losses from property disposals are included in income. CAPITALIZED INTEREST: Interest costs incurred in connection with significant expenditures for real estate developments or the construction of assets are capitalized. DEPRECIATION: Depreciation is computed using the straight-line method. Depreciation expense includes amortization of assets under capital leases and vessel spare parts. Estimated useful lives of property are as follows: Buildings 10 to 50 years Vessels 14 to 40 years Marine containers 15 years Machinery and equipment 3 to 35 years Utility systems and other depreciable property 5 to 60 years OTHER NON-CURRENT ASSETS: Other non-current assets consist principally of supply contracts and intangible assets. These assets are being amortized using the straight-line method over periods not exceeding 30 years. OTHER LONG-TERM LIABILITIES: Other long-term liabilities include the Company's estimate of the liability for uninsured claims and self insurance, and reserves for dry-docking, pensions and other liabilities not expected to be paid within the next year. PENSION PLANS: Certain ocean transportation subsidiaries are members of the Pacific Maritime Association (PMA), the Maritime Service Committee or the Hawaii Stevedore Committee, which negotiate multi-employer pension plans covering certain seagoing and shoreside bargaining unit personnel. The subsidiaries negotiate multi-employer pension plans covering other bargaining-unit personnel. Pension costs are accrued in accordance with contribution rates established by the PMA, the parties to a plan or the trustees of a plan. Several trusteed, noncontributory, single-employer defined benefit plans cover substantially all other employees. INCOME TAXES: Current income tax expense is based on revenue and expenses in the Statements of Income. Deferred income tax liabilities and assets are computed at current tax rates for temporary differences between the financial statement and income tax bases of assets and liabilities. FAIR VALUES: The carrying values of current assets (other than inventories, real estate held for sale, deferred income taxes and prepaid and other assets) and of debt instruments are reasonable estimates of their fair values. Real estate is carried at the lower of cost or net realizable value. Net realizable values are generally determined using the expected market value for the property less sales costs. For residential units and lots held for sale, market value is determined by reference to the sales of similar property, market studies, tax assessments and discounted cash flows. For commercial property, market value is determined using recent comparable sales, tax assessments and cash flow analysis. A large portion of the Company's real estate is undeveloped land located in Hawaii. This land has a cost basis which averages $145 per acre, a value which is much lower than market values. FUTURES CONTRACTS: Realized and unrealized gains and losses on commodity futures contracts are deferred and recorded in inventory in the period in which the related inventory purchases occur. These amounts are not significant. ENVIRONMENTAL COSTS: Environmental expenditures that relate to current operations are expensed or capitalized as appropriate. Expenditures that relate to an existing condition caused by past operations or events, and which do not contribute to current or future revenue generation, are charged to expense. Liabilities are recorded when environmental assessments or remedial efforts are probable and the costs can be reasonably estimated. USE OF ESTIMATES: The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reporting period. Future actual amounts could differ from those estimates. RECLASSIFICATIONS: Certain amounts in the 1994 and 1993 financial statements have been reclassified to conform with the 1995 presentation. RESTATEMENTS: The financial statements for all periods presented have been restated to reflect the sale of certain net assets of the Company's container leasing segment as described in Note 4. 2. EMPLOYEE BENEFIT PLANS Total contributions to the multi-employer pension plans covering personnel in shoreside and seagoing bargaining units were $5,903,000 in 1995, $8,216,000 in 1994 and $8,626,000 in 1993. Union collective bargaining agreements provide that total employer contributions during the terms of the agreements be sufficient to meet the normal costs and amortization payments required to be funded during those periods. Contributions are generally based on union labor used or cargo handled or carried. A portion of such contributions is for unfunded accrued actuarial liabilities of the plans being funded over periods of 25 to 40 years, which began between 1967 and 1976. The multi-employer plans are subject to the plan termination insurance provisions of the Employee Retirement Income Security Act of 1974, as amended, and are paying premiums to the Pension Benefit Guarantee Corporation (PBGC). The statutes provide that an employer which withdraws from or significantly reduces its contribution obligation to a multi-employer plan generally will be required to continue funding its proportional share of the plan's unfunded vested benefits. Under special rules approved by the PBGC and adopted by the longshore plan in 1984, the Company could cease Pacific Coast cargo-handling operations permanently and stop contributing to the plan without any withdrawal liability, provided that the plan meets certain funding obligations as defined in the plan. The estimated withdrawal liabilities under the Hawaii longshore plan and the seagoing plans aggregated approximately $6,437,000 for various plan years ended December 1995 and 1994, and July 1995, based on estimates by plan actuaries. Management has no present intention of withdrawing from and does not anticipate termination of any of the aforementioned plans. The net pension cost (benefit) and components for 1995, 1994 and 1993, of single-employer defined benefit pension plans, which cover substantially all other employees, were as follows: 1995 1994 1993 (In thousands) Service cost--benefits earned during the year $6,210 $ 7,317 $ 5,907 Interest cost on projected benefit obligation 21,785 20,542 17,584 Actual return on plan assets (26,361) (24,122) (18,776) Net amortization and deferral (2,054) (1,221) (2,514) Curtailments and terminations (1,761) 1,300 2,117 Net pension cost (benefit) $(2,181) $3,816 $4,318 The funded status of the single-employer plans at December 31, 1995 and 1994 was as follows: 1995 1994 Assets Assets Accumulated Exceed Exceed Benefits Accumulated Accumulated Exceed Benefits Benefits Assets (In thousands) Actuarial present value of benefit obligation: Vested benefits $ 241,422 $ 122,153 $ 112,925 Non-vested benefits 9,881 3,830 4,297 Accumulated benefit obligation 251,303 125,983 117,222 Additional amounts related to projected compensation levels 34,276 22,927 11,277 Projected benefit obligation 285,579 148,910 128,499 Plan assets at fair value 348,208 178,118 104,867 Deficiency (Excess) of plan assets over projected benefit obligation (62,629) (29,208) 23,632 Prior service costs to be recognized in future years (3,739) (2,121) (1,656) Unrecognized actuarial net gain (loss) 75,759 27,468 (1,227) Unrecognized net asset at January 1, 1987 (being amortized overperiods of 4 to 15 years) 3,954 4,660 385 Accrued pension liability $ 13,345 $ 799 $ 21,134 For 1995 and 1994, the projected benefit obligation was determined using a discount rate of 8% and assumed increases in future compensation levels of 5%. The expected long-term rate of return on assets was 9% for 1995 and 8 1/4% for 1994. The assets of the plans consist principally of listed stocks and bonds. Contributions are determined annually for each plan by the Company's pension administrative committee, based upon the actuarially determined minimum required contribution under ERISA and the maximum deductible contribution allowed for tax purposes. For the plans covering employees who are members of collective bargaining units, the benefit formulas are determined according to the collective bargaining agreements, either using career average pay as the base or a flat dollar amount per year of service. The benefit formulas for the remaining defined benefit plans are based on final average pay. The Company has non-qualified supplemental pension plans covering certain employees and retirees, which provide for incremental pension payments from the Company's general funds, so that total pension benefits would be substantially equal to amounts that would have been payable from the Company's qualified pension plans if it were not for limitations imposed by income tax regulations. The projected benefit obligation, included with other non-current liabilities, relating to these unfunded plans, totaled $8,680,000 and $7,661,000 at December 31, 1995 and 1994, respectively. 3. LEASES THE COMPANY AS LESSEE: Various subsidiaries of the Company lease a vessel and certain land, buildings and equipment under both capital and operating leases. Capital leases include one vessel leased for a term of 25 years ending in 1998; containers, machinery and equipment for terms of 5 to 12 years expiring through 1997; and a wastewater treatment facility in California, the title to which will revert to a subsidiary in 2002. Principal operating leases cover office and terminal facilities for periods which expire between 1996 and 2026. Management expects that in the normal course of business, most operating leases will be renewed or replaced by other similar leases. Rental expense under operating leases totaled $46,680,000, $48,169,000, and $43,270,000 for the years ended December 31, 1995, 1994 and 1993, respectively. Contingent rents and income from sublease rents were not significant. Assets recorded under capital lease obligations and included in property at December 31, 1995 and 1994 were as follows: 1995 1994 (In thousands) Vessel $ 55,253 $ 55,253 Machinery and equipment 42,688 42,870 Total 97,941 98,123 Less accumulated amortization 84,813 74,674 Property under capital leases--net $ 13,128 $ 23,449 Future minimum payments under all leases and the present value of minimum capital lease payments as of December 31, 1995 were as follows: Capital Operating Leases Leases (In thousands) 1996 $ 14,759 $ 15,960 1997 15,026 14,590 1998 10,703 14,837 1999 609 14,834 2000 576 12,868 Thereafter 1,063 114,072 Total minimum lease payments 42,736 $ 187,161 Less amount representing interest 7,489 Present value of future minimum payments 35,247 Less current portion 11,061 Long-term obligations at December 31, 1995 $ 24,186 A subsidiary is obligated to pay terminal facility rent equal to the principal and interest on Special Facility Revenue Bonds issued by the Department of Transportation of the State of Hawaii. Interest on the bonds is payable semi- annually and principal, in the amount of $16,500,000 is due in 2013. An accrued liability of $7,170,000 and $6,626,000 at December 31, 1995 and 1994, respectively, included in other long-term liabilities, provides for a pro-rata portion of the principal due on these bonds. THE COMPANY AS LESSOR: Various Company subsidiaries lease land, buildings and land improvements under operating leases. The historical cost of and accumulated depreciation on leased property at December 31, 1995 and 1994 were as follows: 1995 1994 (In thousands) Leased property $ 246,609 $210,217 Less accumulated amortization 37,555 32,567 Property under operating leases--net $ 209,054 $177,650 Total rental income under these operating leases for the three years ended December 31, 1995 was as follows: 1995 1994 1993 (In thousands) Minimum rentals $ 28,164 $ 31,792 $ 30,968 Contingent rentals (based on sales volume) 880 1,515 1,111 Total $ 29,044 $ 33,307 $ 32,079 Future minimum rental income on non-cancelable leases at December 31, 1995 was as follows: Operating Leases (In thousands) 1996 $ 31,551 1997 26,689 1998 18,930 1999 15,169 2000 12,324 Thereafter 159,912 Total $ 264,575 4. DISCONTINUED OPERATIONS In June 1995, the Company sold the net assets of its container leasing subsidiary, Matson Leasing Company, Inc., for $361.7 million in cash, and realized an after-tax gain of $18 million. Specifically excluded from the sale were long-term debt and U. S. tax obligations of the business. Summary operating results of discontinued operations, excluding the above gain, were as follows: 1995 1994 1993 (In thousands) Net sales $ 35,251 $ 63,060 $ 55,544 Gross profit $ 14,762 $ 24,499 $ 20,500 Earnings before income taxes $ 8,564 $ 16,604 $ 13,047 Income taxes 3,228 5,975 4,794 Net earnings from discontinued operations $ 5,336 $10,629 $ 8,253 The components of net assets of discontinued operations included in the Consolidated Balance Sheet at December 31, 1994 were as follows (in thousands): Current assets $ 14,829 Containers and equipment, net 305,874 Current liabilities (1,505) Other long-term liabilities (5,508) Net assets $ 313,690 5. INCOME TAXES The income tax expense for the three years ended December 31, 1995 consisted of the following: 1995 1994 1993 (In thousands) Current: Federal $ (23,833) $ 29,796 $ 23,894 State 403 1,444 2,830 Total (23,430) 31,240 26,724 Deferred 42,965 1,412 14,662 Income tax expense $ 19,535 $ 32,652 $ 41,386 Total income tax expense for the three years ended December 31, 1995 differs from amounts computed by applying the statutory Federal rate to pre-tax income, for the following reasons: 1995 1994 1993 (In thousands) Computed income tax expense $ 18,184 $ 33,821 $ 35,043 Increase (decrease) resulting from: Tax rate increases - - 6,963 State tax on income, less applicable Federal tax 326 1,332 1,999 Fair market value over cost of donations - (2,138) - Low-income housing credits (1,224) (1,219) (1,214) Other-net 2,249 856 (1,405) Income tax expense $ 19,535 $ 32,652 $ 41,386 The tax effects of temporary differences that give rise to significant portions of the net deferred tax liability at December 31, 1995 and 1994 were as follows: 1995 1994 (In thousands) Deposits to the CCF $ 252,348 $ 201,963 Tax-deferred gains on real estate transactions 69,317 68,488 Accelerated depreciation 44,136 111,253 Unrealized holding gains on securities 23,664 17,273 Post-retirement benefits (47,813) (45,209) Alternative minimum tax benefits (14,264) (6,531) Insurance reserves (6,766) (1,759) Capitalized leases (957) 2,409 Other-net (725) (13,292) Total $ 318,940 $ 334,595 The Internal Revenue Service (IRS) has completed its audits of the Company's tax returns through 1988 and, with one exception, has settled all issues raised during such audits. No settlement had a material effect on the Company's financial position or results of operations. The Company is contesting the remaining issue, which relates to the timing of a deduction for tax purposes. The IRS has commenced an audit of the tax returns for 1989 through 1991. Management believes that the ultimate resolution of any adjustment resulting from the 1987, 1988 and the current audits will not have a material effect on the Company's financial position or results of operations. 6. POST-RETIREMENT BENEFIT PLANS The Company has plans that provide certain retiree health care and life insurance benefits to substantially all salaried and to certain hourly employees. Employees are generally eligible for such benefits upon retirement and completion of a specified number of years of credited service. The Company does not pre-fund these benefits and has the right to modify or terminate certain of these plans in the future. Certain groups of retirees pay a portion of the benefit costs. The net periodic cost for post-retirement health care and life insurance benefits during 1995, 1994 and 1993 included the following: 1995 1994 1993 (In thousands) Service cost $ 1,512 $ 2,149 $ 1,524 Interest cost 7,031 7,825 4,742 Net amortization (1,524) (216) - Curtailment gain (2,045) - - Post-retirement benefit cost $ 4,974 $ 9,758 $ 6,266 The unfunded accumulated post-retirement benefit obligation at December 31, 1995 and 1994 is summarized below: 1995 1994 (In thousands) Accumulated post-retirement benefit obligation: Retirees $ 56,606 $ 64,619 Fully-eligible active plan participants 9,073 10,577 Other active plan participants 25,373 30,359 Unrecognized prior service cost 5,676 3,215 Unrecognized net gain 26,862 14,422 Total 123,590 123,192 Current obligation 5,118 6,582 Non-current obligation $ 118,472 $ 116,610 For 1995 and 1994, the weighted average discount rate used in determining the accumulated post-retirement benefit obligation was 8%, and the assumed health care cost trend rate used in measuring the accumulated post-retirement benefit obligation was 10% through 2001, decreasing to 5% thereafter. If the assumed health care cost trend rate were increased by one percentage point, the accumulated post-retirement benefit obligation as of December 31, 1995 and 1994 would have increased by approximately $10,405,000 and $12,235,000, respectively, and the net periodic post-retirement benefit cost for 1995 and 1994 would have increased by approximately $1,190,000 and $2,153,000, respectively. 7. INVESTMENTS At December 31, 1995 and 1994, investments principally consisted of marketable equity securities, limited partnership interests and purchase-money mortgages. Effective January 1, 1994, the Company adopted SFAS No. 115, "Accounting for Certain Investments in Debt and Equity Securities." The marketable equity securities are classified as "available for sale" and are stated at quoted market values. The unrealized holding gain on these securities, net of deferred income taxes, has been recorded as a separate component of shareholders' equity. The components of the net unrealized holding gains at December 31, 1995 and 1994 were as follows: 1995 1994 (In thousands) Market value $ 73,460 $ 56,312 Less historical cost 9,966 9,966 Unrealized holding gain 63,494 46,346 Less deferred income taxes 23,664 17,273 Net unrealized holding gain $ 39,830 $ 29,073 The investments in limited partnership interests and purchase money mortgages are recorded at cost, which approximated market values, of $8,786,000 and $8,601,000 at December 31, 1995 and 1994, respectively. The purchase money mortgages are intended to be held to maturity. The value of the underlying investments of the limited partnership interests are assessed annually and are approximately equal to the original cost. See Note 11 for a discussion of market values of investments in the Capital Construction Fund. 8. LONG-TERM DEBT, CREDIT AGREEMENTS At December 31, 1995 and 1994, long-term debt consisted of the following: 1995 1994 (In thousands) Commercial paper, 5.83% - 6.19% due 1996 $ 246,437 $ 304,301 Bank revolving credit loans (1995 high 6.88%, low 5.99%) due after 1995 40,000 52,500 Term loans: 7.19%, payable through 2007 75,000 75,000 8%, payable through 2000 . 47,500 50,000 9.05%, payable through 1999 27,201 32,611 9%, payable through 1999 .. 21,176 50,000 9.8%, payable through 2004 18,750 20,833 7.65%, payable through 2001 10,000 10,000 11.78%, payable through 1997 1,269 1,848 Mortgage loans, collateralized by land and buildings: 11%, repaid in 1995 - 3,046 12.5%, repaid in 1995 - 2,724 Other, repaid in 1995 - 281 Limited partnership subscription notes, no interest, payable through 1996 850 1,700 Total 488,183 604,844 Less current portion 24,794 27,239 Commercial paper classified as current 83,000 58,000 Long-term debt $ 380,389 $ 519,605 REVOLVING CREDIT FACILITIES: The Company and a subsidiary have a revolving credit and term loan agreement with five commercial banks, whereby they may borrow up to $155,000,000, under revolving loans to November 30, 1997, at varying rates of interest. Any revolving loan outstanding on that date may be converted into a term loan, which would be payable in 16 equal quarterly installments. The agreement contains certain restrictive covenants, the most significant of which requires the maintenance of an interest coverage ratio of 2:1. At December 31, 1995 and 1994, $10,000,000 and $20,000,000, respectively, were outstanding under this agreement. The Company and a subsidiary have an uncommitted $45,000,000 short-term revolving credit agreement with a commercial bank. The agreement extends to November 30, 1996, but may be canceled by the bank at any time. At December 31, 1995 and 1994, $17,000,000 and $12,500,000, respectively, were outstanding under this agreement. In 1994, the Company and a subsidiary entered into an uncommitted $25,000,000 revolving credit agreement with a commercial bank. The agreement extends to July 18, 1997. At December 31, 1995 and 1994, $13,000,000 and $20,000,000, respectively, were outstanding under this agreement. During 1995, a subsidiary entered into a $50,000,000 one-year Revolving Credit Agreement to replace two previous credit facilities. Up to $25,000,000 of this agreement serves as a commercial paper liquidity back-up line, with the balance available for general corporate funds. At December 31, 1995, there were no amounts outstanding under this agreement. COMMERCIAL PAPER: At December 31, 1995 there were two commercial paper programs. The first program was used by a subsidiary to finance the construction of a vessel, which was delivered in 1992. At December 31, 1995, $149,437,000 of commercial paper notes was outstanding under this program. Maturities ranged from 4 to 39 days. The borrowings outstanding under this program are classified as long-term, because the subsidiary intends to continue the program indefinitely and eventually to repay the program with qualified withdrawals from the Capital Construction Fund. The second commercial paper program is used by a subsidiary to fund the purchases of sugar inventory from Hawaii sugar growers and to provide working capital for sugar refining and marketing operations. At December 31, 1995, $97,000,000 of commercial paper notes was outstanding under this program. Maturities ranged from 11 to 23 days. The interest cost and certain fees on the borrowings relating to sugar inventory advances to growers are reimbursed by the growers. At December 31, 1995, $31,378,000 was outstanding as advances to growers under this program. Of the total commercial paper borrowing outstanding at December 31, 1995, $83,000,000 was classified as current. The commercial paper is supported by a $100,000,000 backup revolving credit facility with six commercial banks. Both the commercial paper program and the backup facility are guaranteed by the subsidiary's parent and by the Company. In 1995, the Company repaid the outstanding commercial paper notes of a third program which had been used to finance container purchases of the discontinued container leasing business. LONG-TERM DEBT MATURITIES: At December 31, 1995, maturities and planned prepayments of all long-term debt during the next five years totaled $24,794,000 for 1996, $31,967,000 for 1997, $24,453,000 for 1998, $32,616,000 for 1999 and $19,584,000 for 2000. 9. CAPITAL STOCK AND STOCK OPTIONS A&B has a stock option plan ("1989 Plan") under which key employees may be granted stock purchase options and stock appreciation rights. A second stock option plan for key employees terminated in 1993, but shares previously granted under the plan are still exercisable. Under the 1989 Plan, option prices may not be less than the fair market value of a share of the Company's common stock on the dates of grant, and each option generally becomes exercisable in-full one year after the date granted. Payment for options exercised, to the extent not reduced by the application or surrender of stock appreciation rights, may be made in cash or in shares of the Company's stock. If payment is made in shares of the Company's stock, the option holder may receive, under a reload feature of the 1989 Plan, a new stock option for the number of shares equal to that surrendered, with an option price not less than at the fair market value of the Company's stock on the date of exercise. During 1995, 527,800 new options were granted under the 1989 Plan. The 1989 Plan also permits issuance of shares of the Company's common stock as a reward for past service rendered to the Company or one of its subsidiaries or as an incentive for future service with such entities. The recipients' interest in such shares may be fully vested upon issuance or may vest in one or more installments, upon such terms and conditions as are determined by the committee which administers the plan. The Company also has a Directors' stock option plan, under which each non- employee Director of the Company, elected at an Annual Meeting of Shareholders, is automatically granted, on the date of each such Annual Meeting, an option to purchase 3,000 shares of the Company's common stock at the average fair market value of the shares for the five consecutive trading days prior to the grant date. Each option becomes exercisable six months after the date granted. At December 31, 1995, a total of 171,000 options have been granted under the plan, 3,000 options have been canceled and no options have been exercised. Changes in shares under all option plans, for the three years ended December 31, 1995, were as follows: Price Range Shares Per Share 1993: Granted 423,200 $24.250-24.500 Exercised 23,576) 17.375-24.750 Canceled (73,400) 24.250-36.250 Outstanding, December 31 2,037,128 17.375-37.875 1994: Granted 475,200 24.700-27.000 Exercised (12,300) 17.375-24.750 Canceled (55,996) 24.250-36.250 Outstanding, December 31 2,444,032 17.375-37.875 1995: Granted 551,800 21.750-22.500 Exercised (23,550) 17.375-24.750 Canceled (385,531) 24.250-36.250 Outstanding, December 31 (2,045,051 exercisable) 2,586,751 $17.375-37.875 Options outstanding at December 31, 1995 include 60,166 shares that carry stock appreciation rights which expire in 1997. The outstanding options do not have a material dilutive effect in the calculation of earnings per share of common stock. The Company has a Shareholder Rights Plan, designed to protect the interests of shareholders in the event an attempt is made to acquire the Company. The rights initially will trade with the Company's outstanding common stock and will not be exercisable absent certain acquisitions or attempted acquisitions of specified percentages of such stock. If exercisable, the rights generally entitle shareholders to purchase additional shares of the Company's stock or shares of an acquiring company's stock at prices below market value. 10. RELATED PARTY TRANSACTIONS, COMMITMENTS AND CONTINGENCIES At December 31, 1995, the Company and its subsidiaries had an unspent balance of total appropriations for capital expenditures of approximately $216,971,000. However, there is no contractual obligation to spend this entire amount. Of this amount, $155,500,000 is for the planned vessels described in Note 12. A subsidiary has arranged for standby letters of credit of approximately $13,800,000, necessary to qualify as a self-insurer for state and federal workers' compensation liabilities. A subsidiary has received a favorable court judgment resulting from a contested insurance claim. The claim was for reimbursement of certain expenses incurred by the subsidiary in connection with repairing port facilities damaged by a 1989 earthquake. Although the award has been appealed, management and its outside counsel believe that the ultimate outcome of this litigation will be an award at least equal to the claim recorded in the financial statements. A subsidiary is a party, acting as the steam host, to a Steam Purchase Agreement with a developer which has received regulatory authority approval to construct and operate a cogeneration facility contiguous to the subsidiary's California refinery. The agreement provides that, during the 30-year period of the agreement, the subsidiary will receive steam necessary for refinery operations at a reduced price, compared to the market price of fuel which presently must be purchased to generate its steam requirements. A subsidiary is party to a long-term sugar supply contract with Hawaiian Sugar & Transportation Cooperative (HSTC), a raw sugar marketing and transportation cooperative owned by two other subsidiaries and by the other Hawaii sugar growers. Under the terms of this contract, the subsidiary is obligated to purchase, and HSTC is obligated to sell, all of the raw sugar delivered to HSTC by the Hawaii sugar growers, at prices determined by the quoted domestic sugar market. The subsidiary made purchases of raw sugar totaling $158,284,000 and $271,212,000 under the contract during 1995 and 1994, respectively. The contract also requires that the subsidiary provide cash advances to HSTC prior to the physical receipt of the sugar at its refineries (see Note 8). Such advances are determined by the estimated raw sugar market prices. Amounts due to HSTC are credited against outstanding advances to HSTC upon delivery of raw sugar to the subsidiary's refineries. The Company and certain subsidiaries are parties to various legal actions and are contingently liable in connection with claims and contracts arising in the normal course of business, the outcome of which, in the opinion of management after consultation with legal counsel, will not have a material adverse effect on the Company's financial position or results of operations. 11. CAPITAL CONSTRUCTION FUND A subsidiary is party to an agreement with the United States Government which established a Capital Construction Fund (CCF) under provisions of the Merchant Marine Act, 1936, as amended. The agreement has program objectives for the acquisition, construction or reconstruction of vessels and for repayment of existing vessel indebtedness. Deposits to the CCF are limited by certain applicable earnings. Such deposits are not subject to Federal income taxes in the year earned, but are taxable, with interest payable from the year of deposit, if withdrawn for general corporate purposes or other non-qualified purposes, or upon termination of the agreement. Qualified withdrawals for investment in vessels having adequate tax bases do not give rise to a current tax liability, but reduce the depreciable bases of the vessels or other assets for income tax purposes. Amounts deposited into the CCF are preference items for inclusion in Federal alternative minimum taxable income. Deposits not committed for qualified purposes within 25 years from December 31, 1986, or later date of deposit, will be treated as non-qualified withdrawals. As of December 31, 1995, the oldest CCF deposits date from 1987. Management believes that all amounts deposited in the CCF at the end of 1995 will be used or committed for qualified purposes prior to the expiration of the 25-year period. Under the terms of the CCF agreement, the subsidiary may designate certain qualified earnings as "accrued deposits" or may designate, as obligations of the CCF, qualified withdrawals to reimburse qualified expenditures initially made with operating funds. Such accrued deposits to and withdrawals from the CCF are reflected on the balance sheet either as an obligation of the Company's current assets or as a receivable from the CCF. As discussed in Note 7, in 1994 the Company adopted the provisions of SFAS No. 115. The Company has classified its investments in the CCF as "held-to- maturity" and, accordingly, has not reflected temporary unrealized market gains and losses in the Balance Sheets or Statements of Income. The long-term nature of the CCF program supports the Company's intention to hold these investments to maturity. At December 31, 1995 and 1994, the balances on deposit in the CCF are summarized in Table 1. TABLE 1 (In thousands) 1995 Amortized Fair Unrealized Cost Value Gain(Loss) Mortgage-backed securities $ 95,156 $ 91,132 $ (4,024) Cash and cash equivalents 215,823 215,856 33 Treasury notes - - - Accrued deposits 6,233 6,233 - Total $ 317,212 $ 313,221 $ (3,991) 1994 Amortized Fair Unrealized Cost Value Loss Mortgage-backed securities $ 108,247 $ 96,678 (11,569) Cash and cash equivalents 64,263 64,263 - Treasury notes 2,984 2,984 - Accrued deposits 550 550 - Total $ 176,044 $ 164,475 $ (11,569) Fair value of the mortgage-backed securities ("MBS") was determined by an outside investment management company, based on the experience of trading identical or substantially similar securities. No central exchange exists for these securities; they are traded over-the-counter. At the end of 1995, the fair value of the Company's investments in MBS is less than amortized cost, due to interest rate sensitivity inherent in the fair value determination of such securities. While an unrealized market loss exists, the Company intends to hold these investments to maturity, which ranges from 1996 through 2024. The MBS have a weighted average life of approximately six years, based on information currently available to the Company. The Company earned $7,655,000 in 1995, $8,292,000 in 1994, and $7,218,000 in 1993 on its investments in MBS. Fair values of the remaining CCF investments were based on quoted market prices, if available. If a quoted market price was not available, fair value was estimated, using quoted market prices of similar securities and investments. These remaining investments mature in 1996. During 1995 and 1994, there were no sales of securities classified as "held-to- maturity" included in the CCF. 12. SUBSEQUENT EVENT - VESSEL ACQUISITION In January 1996, the Company purchased five container ships from American President Lines, Ltd. (APL) for $155,500,000, of which $145,500,000 was financed by qualified withdrawals from the CCF. The Company intends to use four of these container ships and one existing fleet unit in a joint service with APL, between the United States West Coast and Hawaii, Korea, Japan and Guam. The Company will have the full reach of the vessels on each westbound voyage from the United States West Coast to Hawaii, Guam, Japan and Korea. APL will take each vessel on time charter in Korea and redeliver the vessel at the end of its eastbound voyage on the United States West Coast. APL will reimburse the Company for vessel operating costs incurred while under time charter to APL. The Company expects to commence the joint service with APL in February 1996. 13. INDUSTRY SEGMENTS Industry segment information for 1995, 1994 and 1993, on page 28, is incorporated herein by reference. Segments are: Ocean transportation -- carrying freight between various U.S. and Canadian West Coast, Hawaii and Western Pacific ports, and providing terminal services. Property development and management -- developing, managing and selling residential, commercial and industrial properties. Food products -- growing, processing and marketing sugar, molasses and coffee, and generating and selling electricity. As discussed in Note 4, the net assets of the container leasing segment were sold in 1995. EX-2 4 FINANCIAL DATA SCHEDULE EXIBIT B ALEXANDER & BALDWIN, INC. AND SUBSIDIARIES FINANCIAL DATA SCHEDULE DECEMBER 31, 1995 (In thousands) THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE CONSOLIDATING BALANCE SHEET AND CONSOLIDATING INCOME STATEMENT AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS. Item No. Caption Heading 1 Total Assets $1,782,759 2 Total Operating Revenues $988,043 3 Net Income $55,755 -----END PRIVACY-ENHANCED MESSAGE-----