ALEXANDER & BALDWIN , INC. S REAL ESTATE SUPPLEMENT AS OF AND FOR THE QUARTERS AND YEARS ENDED DECEMBER 31, 2011 AND 2010 (Unaudited)
About This Supplement This periodic Supplement is designed to provide current and potential shareholders of Alexander & Baldwin, Inc. with additional information regarding the Company’s Real Estate operating segments. This information is supplemental to and does not replace the information provided to shareholders in the Company’s periodic filings with the Securities and Exchange Commission. The information contained in this Supplement is unaudited and should be read in conjunction with the Company’s quarterly and annual reports and other filings with the Securities and Exchange Commission. The Company intends to provide periodic updates to the information contained herein, but is not required, and undertakes no obligation, to revise or update forward-looking statements or any factors that may affect actual results, whether as a result of new information, future events, or circumstances occurring after the dates on the cover of this Supplement. Feedback and suggestions regarding the contents of this Supplement from the investing audience are welcomed, and should be directed to Suzy P. Hollinger, Director, Investor Relations, via telephone at (808) 525-8422 or via email to shollinger@abinc.com.
Alexander & Baldwin, Inc. │Real Estate Supplement INDEX TO REAL ESTATE SUPPLEMENT (Unaudited) AS OF AND FOR THE QUARTERS AND YEARS ENDED DECEMBER 31, 2011 AND 2010 Forward-Looking Statements 3 Basis of Presentation 3 Periodic Updates 4 About the Company 5 Overview of A&B Land Group 7 Financial Overview 8 Management 9 Landholdings 13 Landholdings 14 Landholdings by Geographic Location (Table 1) 14 Landholdings Under Joint Venture Development (Table 2) 14 Landholdings by Type and Location (Table 3) 15 Real Estate Sales 17 Segment Strategy and Operations 18 Real Estate Development Overview (Table 4) 19 Development Project Information Sheets 21 Future Development Project Summaries 29 Entitlement Activity 32 Completed Development Projects 34 Real Estate Leasing 39 Segment Strategy and Operations 40 Acquisition and Disposition Strategy 42 1
Asset Descriptions and Statistics 43 Property Detail – Hawaii Improved Properties - Most Recent 43 Quarter (Table 5) Property Detail – Hawaii Improved Properties - Most Recent 44 Fiscal Year (Table 6) Property Detail – Mainland Improved Properties - Most Recent 45 Quarter (Table 7) Property Detail – Mainland Improved Properties - Most Recent 46 Fiscal Year (Table 8) Comparable Percent Occupancy Data by Geographic Region and 47 Asset Class - Most Recent Quarter and Fiscal Year (Tables 9 and 10) Weighted Average Gross Leasable Area by Geographic Region 48 and Asset Class - Most Recent Quarter and Fiscal Year (Tables 11 and 12) Occupancy Analysis - Last Five Quarters (Table 13) 49 Real Estate Leasing Cash Net Operating Income (NOI) - Most 50 Recent Quarter and Fiscal Year (Tables 14 and 15 ) Real Estate Leasing Same Store Cash NOI - Most Recent 51 Quarter and Fiscal Year (Tables 16 and 17) Statement on Management’s Use of Non-GAAP Financial Measures 52 Reconciliation of Real Estate Leasing Operating Profit to Cash 52 NOI and Same Store Cash NOI (Non-GAAP) (Table 18) Portfolio Acquisitions and Dispositions 53 2011 and 2010 Improved Property Portfolio 53 Acquisitions/Dispositions (Table 19) Lease Renewal Analysis 54 Lease Expirations (Table 20) 54 Portfolio Concentrations 55 Tenant Concentration (Table 21) 55 Hawaii Commercial Property Information Sheets 57 Mainland Commercial Property Information Sheets 69 Where to Find Additional Information 82 Participants in the Merger Solicitation 82 2
Forward-Looking Statements This Supplement contains certain forward-looking statements, such as forecasts and projections of the Company’s future performance or statements of management’s plans and objectives. These statements are “forward-looking” statements as that term is defined in the Private Securities Litigation Reform Act of 1995. Except for historical information contained in this Supplement, such communications contain forward-looking statements. These include, for example, all references to current or future years. New risk factors emerge from time to time and it is not possible for the Company to predict all such risk factors, nor can it assess the impact of all such risk factors on the Company’s business or the extent to which any factor, or combination of factors, may cause actual results to differ materially from those contained in any forward-looking statements. Accordingly, forward-looking statements cannot be relied upon as a guarantee of future results and involve a number of risks and uncertainties that could cause actual results to differ materially from those projected in the statements, including, but not limited to the factors that are described in Part I, Item 1A under the caption of “Risk Factors” of the Company’s 2011 annual report on Form 10-K as well as factors that are discussed in the Company’s other filings, including subsequent filings, with the Securities and Exchange Commission (“SEC”). The Company is not required, and undertakes no obligation, to revise or update forward-looking statements or any factors that may affect actual results, whether as a result of new information, future events, or circumstances occurring after the date of this report. Basis of Presentation The information contained in this Supplement does not purport to disclose all items required by accounting principles generally accepted in the United States of America (GAAP). The information contained in this Supplement is unaudited and should be read in conjunction with the Company’s most recent Form 10-K and other filings with the SEC. 3
Periodic Updates The Company currently intends, but undertakes no obligation, to provide quarterly updates of the information contained in the tables listed below: Table 5: Property Detail – Hawaii Improved Properties Table 7: Property Detail – Mainland Improved Properties Table 9: Comparable Occupancy Data by Geographic Region and Asset Class Table 11: Weighted Average Gross Leasable Area by Geographic Region and Asset Class Table 13: Occupancy Analysis Table 18: Reconciliation of Real Estate Leasing Operating Profit to Cash NOI and Same Store Cash NOI Table 19: Improved Property Portfolio Acquisitions/Dispositions The Company currently intends to update all other information contained herein on an annual basis, except for the management biographies and information about completed development projects, which will not be included in subsequent Supplements. 4
About the Company Alexander & Baldwin, Inc. (“A&B” or “Company”) is a diversified corporation with its operations primarily centered in Hawaii. Founded in 1870 as a sugar plantation and incorporated in 1900, the Company has evolved from its agricultural roots into an integrated network of complementary businesses serving the real estate, agricultural and transportation needs of Hawaii. A&B’s operations reach beyond Hawaii to include a U.S. Mainland commercial property portfolio, Asia-Pacific ocean transportation services and logistics services. Real estate development and leasing activities are conducted by A&B Properties, Inc. (“A&B Properties”), a wholly owned subsidiary of A&B, and various other subsidiaries and affiliates of A&B. Agribusiness operations are conducted by Hawaiian Commercial & Sugar Company (“HC&S”), a division of A&B, and certain other wholly owned subsidiaries of A&B. Ocean transportation operations, related shoreside operations in Hawaii, and logistics services across the Mainland are conducted by a wholly owned subsidiary, Matson Navigation Company, Inc. (“MNC”) and its subsidiaries. In December 2011, the Company announced its intent to separate into two independent, industry-focused, publicly traded companies–one focused on the land-related businesses, including real estate development, real estate leasing and agriculture (A&B Properties and HC&S)–and one focused on ocean transportation and logistics (MNC). Refer to the Company’s website (www.alexanderbaldwin.com) and SEC filings for additional information related to the proposed separation. REAL ESTATE The Company’s real estate business consists of two segments that operate in Hawaii and on the Mainland: Sales and Leasing. The Real Estate Sales segment creates value through an active and comprehensive program of land stewardship, planning, entitlement, investment, development and sale of land and commercial and residential properties, principally in Hawaii. The Real Estate Leasing segment generates significant, stable, recurring cash flows through the ownership, operation and management of a portfolio of high-quality retail, office and industrial properties in Hawaii and on the Mainland. Cash generated by this portfolio serves as an important source of funding for A&B's real estate development activities. AGRIBUSINESS Agribusiness produces and sells bulk raw sugar, specialty food-grade sugars and molasses, and is also a renewable energy provider on the islands of Maui and Kauai through hydroelectric facilities and the cogeneration of electricity from bagasse at its sugar mill. This segment, which operates exclusively in Hawaii, also includes support services for other agricultural operations and includes general trucking services, mobile equipment maintenance and repair services. 5
TRANSPORTATION The Company’s transportation businesses, which will become a separate publicly-traded entity following the aforementioned separation transaction, consist of Ocean Transportation and Logistics Services segments. The Ocean Transportation segment, which is conducted through MNC, is an asset-based business that derives its revenue primarily through the carriage of containerized freight between various ports on the U.S. Pacific Coast, and in Hawaii, Guam, China and other Pacific islands. Additionally, the Ocean Transportation segment has a 35-percent interest in an entity that provides terminal and stevedoring services at U.S. Pacific Coast facilities. The Logistics Services segment, which is conducted through Matson Logistics, Inc. (“MLI”), a wholly owned subsidiary of MNC, is an asset-light-based business providing domestic and international rail intermodal service, long-haul and regional highway brokerage, specialized hauling, flatbed and project work, less-than-truckload, expedited/air freight services, and warehousing and distribution services. Warehousing and distribution services are provided by Matson Logistics Warehousing, Inc., a wholly owned subsidiary of MLI. More information about the Company can be found at www.alexanderbaldwin.com. Corporate Headquarters Websites Alexander & Baldwin, Inc. Alexander & Baldwin, Inc. 822 Bishop Street www.alexanderbaldwin.com Honolulu, HI 96813 A&B Properties, Inc. Investor Relations www.abprop.com Suzy P. Hollinger Director, Investor Relations Hawaiian Commercial & Sugar Company (808) 525-8422 www.hcsugar.com shollinger@abinc.com Matson Navigation Company, Inc. www.matson.com Transfer Agent & Registrar Computershare Shareowner Services P.O. Box 358015, Pittsburgh, PA 15252 (800) 454-0477 http://www.computershare.com/us/Pages/sos.aspx?rocc=1 Stock Exchange Listing NYSE: ALEX 6
Overview of A&B Land Group Alexander & Baldwin, Inc. has significant landholdings in Hawaii; at December 31, 2011, the Company owned 87,695 acres in the state, primarily on the islands of Maui and Kauai. The A&B Land Group, which includes both A&B Properties and A&B’s agribusiness units, is responsible for the stewardship of this land and the long-term enhancement of its value. The vast majority of this land was acquired over 100 years ago to support the cultivation of sugar cane. Historically, these lands have been used for a variety of agricultural purposes, including active farming, the collection and transport of water for purposes of irrigation and hydroelectric power production, and the cultivation and processing of crops into saleable products. For a significant portion of the Company’s core Hawaii landholdings, agriculture and related uses represent the highest and best current use for the foreseeable future, providing significant benefits to the community and shareholders alike. In total, roughly 86,945 acres of the Company’s land, including land leased to others, are currently designated for agriculture and conservation uses. HC&S, the last Hawaii sugar plantation, cultivates sugar on nearly 36,000 acres in Maui’s Central Valley. On Kauai, A&B leases roughly 4,000 acres to third parties engaged in a variety of agricultural activities, including cultivation of coffee and seed corn, and raising of livestock. The Company also utilizes its land assets to produce renewable energy, including biomass combustion, hydroelectric, and planned solar photovoltaic generation facilities. A&B continues to innovate and seek ways to enhance the long-term performance of its agricultural businesses while de-risking the business, including the exploration of renewable energy expansion opportunities. A&B Properties’ integrated approach to land management ensures that lands suitable for development are employed at their highest and best use by undertaking land stewardship, planning, entitlement and development activities, where appropriate, to enhance the value of the Company’s lands, while addressing market demand and community needs. By identifying and pursuing developments and transactions that enhance the value of raw landholdings, and reinvesting proceeds from these efforts into new developments and a portfolio of income-producing properties, A&B Properties creates value for shareholders and diversifies its income stream. The Company’s development activities, once limited to its legacy landholdings on Maui and Kauai, have expanded to encompass lands newly acquired for development and its participation in a number of development joint ventures throughout Hawaii. This expansion of the Company’s development activities has allowed it to leverage its expertise, market knowledge and capital resources, while also mitigating risk. 7
The balance of this document will provide a financial and management overview and will detail the Company’s real estate holdings, while outlining the following aspects of the Real Estate Leasing and Real Estate Sales segments, respectively: Management; Strategy and operations; Portfolio information and statistics; and Asset profiles. Financial Overview 10-Year 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 Average Revenue 1 Real Estate Sales 93.0 63.8 82.3 148.9 97.3 117.8 350.2 125.6 136.1 66.2 128.1 Real Estate Leasing 73.1 80.3 83.8 89.7 100.6 108.5 107.8 103.2 94.4 100.1 94.2 Agribusiness 112.7 112.9 112.8 123.2 127.4 123.7 124.3 107.0 163.9 161.7 127.0 Total 278.8 257.0 278.9 361.8 325.3 350.0 582.3 335.8 394.4 328.0 349.2 Operating Profit 1 Real Estate Sales 19.4 23.9 34.6 44.1 49.7 74.4 95.6 39.1 50.1 15.5 44.6 Real Estate Leasing 32.9 37.0 38.8 43.7 50.3 51.6 47.8 43.2 35.3 39.3 42.0 Agribusiness 13.8 5.1 4.8 11.2 6.9 0.2 (12.9) (27.8) 6.1 22.2 3.0 Total 66.1 66.0 78.2 99.0 106.9 126.2 130.5 54.5 91.5 77.0 89.6 Capital Expenditures Real Estate Sales 16.8 105.8 69.7 74.7 107.2 122.9 79.6 52.7 122.5 43.6 79.6 Real Estate Leasing 15.5 8.8 7.2 33.3 42.8 33.4 54.5 14.3 16.3 8.6 23.5 Agribusiness 9.9 12.6 10.2 13.0 15.0 20.5 13.6 4.8 5.9 10.2 11.6 Total 42.2 127.2 87.1 121.0 165.0 176.8 147.7 71.8 144.7 62.4 114.6 Cash NOI 2 Real Estate Leasing 46.8 51.3 53.7 58.4 65.8 69.3 67.0 65.9 55.7 60.8 59.5 1 Includes real estate discontinued operations and intersegment revenue 2 See page 52 for a statement regarding the Company’s use of Cash NOI and a reconciliation of Leasing operating profit to Cash NOI. 8
Management SELECTED MANAGEMENT BIOS - A & B , INC . & LAND GROUP STANLEY M . KURIYAMA PRESIDENT AND CHIEF EXECUTIVE OFFICER, ALEXANDER & BALDWIN, INC. Kuriyama is president and chief executive officer of Alexander & Baldwin, Inc. He became CEO on January 1, 2010, and has held the position of president since October 2008. Prior to that, he was president and chief executive officer, A&B Land Group from July 2005 until September 2008. He also held positions with A&B Properties, Inc., the property development and management subsidiary of A&B. From December 1999 to September 2008, he was its chief executive officer. Kuriyama’s leadership has been a principal element in A&B’s highly successful growth in real estate. He first joined A&B in 1992. Prior to joining A&B in 1992, Kuriyama was a partner in the law firm of Cades Schutte Fleming & Wright, specializing in real estate and real estate financing. He is a 1977 graduate of Harvard Law School. Kuriyama is the vice-chairman of the Hawaii Real Estate Commission, and currently serves on the boards of various non-profit organizations. Subsequent to separation, Mr. Kuriyama will become chairman and chief executive officer of the new Alexander & Baldwin, Inc. CHRISTOPHER J. BENJAMIN PRESIDENT, A&B LAND GROUP; PRESIDENT, A&B PROPERTIES, INC. Benjamin is president of the Alexander & Baldwin Land Group, which comprises A&B Properties and A&B's agribusiness operations. He also serves as president of A&B Properties, Inc. Benjamin served as A&B's chief financial officer from February 2004 through September 2011. He joined A&B in 2001 as director, corporate development and planning, was promoted to vice president in 2003, and was promoted to chief financial officer the following year. From March 2009 through March 2011, Benjamin additionally served as general manager of Hawaiian Commercial & Sugar Company, overseeing the operational and financial turnaround of that business. Prior to joining A&B, Benjamin held positions with General Motors Corporation, Sony Corporation, Booz-Allen & Hamilton and The Queen's Health Systems. Benjamin holds a bachelor's degree in economics from the University of Michigan and earned a master's degree in business administration from Harvard University. Benjamin currently serves on the boards of various non-profit organizations. Post separation, Mr. Benjamin will serve as president and chief operating officer of the new Alexander & Baldwin, Inc. 9
PAUL K. ITO VICE PRESIDENT, CONTROLLER & ASSISTANT TREASURER, ALEXANDER & BALDWIN, INC. Ito is vice president, controller and assistant treasurer of Alexander & Baldwin. He joined A&B in 2005 as director of internal audit. He was named controller in 2006, and in 2007, he was promoted to vice president, controller and assistant treasurer. Previously, Ito worked for Deloitte & Touche for nine years, where in his most recent position, he was a senior manager in the accounting consultation and research group of Deloitte’s San Francisco national office. Ito is a certified public accountant and holds a master’s degree of professional accounting with a concentration in managerial accounting from the University of Texas at Austin, and a bachelor’s degree in finance and marketing from the University of Hawaii at Manoa. Ito has earned several prestigious academic honors including the Elijah Watt Sells Gold Medal Award for obtaining the highest score in the nation on the May 1996 CPA exam. After the planned separation, Mr. Ito will serve as chief financial officer of the new Alexander & Baldwin, Inc. New Alexander & Baldwin, Inc. Organizational Charts (Post Separation) Stan Kuriyama Chairman & CEO Meredith Ching Nelson Chun Chris Benjamin Paul Ito Son Jai Paik Senior Vice President Senior Vice President President & Vice President & Vice President, Government & & Chief Legal Officer Chief Operating Chief Financial Officer Human Resources Community Relations Officer Real Estate & Agribusiness Operations See Next Page 10
All titles are A&B Properties, Inc. unless otherwise noted Chris Benjamin President & COO Alexander & Baldwin, Inc. Entitilement, Commercial Growth & Agribusiness Development & Portfolio Acquisitions Sales Rick Volner Paul Hallin David Haverly Mike Wright General Manager EVP, Development SVP, Leasing EVP, Acquisitions & HC&S A&B Properties, Inc. Investments Alan Arakawa Dan Ligenza SVP, Planning George Morvis VP VP, Corporate Development Agribusiness Rick Stack Alexander & Baldwin, Inc. SVP, Development Lance Parker Grant Chun VP, Acquisitions & VP, Maui Investments/ Principal Broker Natalie Kiehm VP, Development Diane Shigeta VP, Corporate Planning Randy Endo VP, Development Tom Shigemoto VP, Planning, Kauai SELECTED MANAGEMENT BIOS - A & B PROPERTIES, INC. PAUL W. HAL L I N EXECUTIVE VICE PRESIDENT, DEVELOPMENT, A&B PROPERTIES Hallin is responsible for the Company's entitlement and development activities. Prior to joining the Company in 1992, he was a project manager for Lanai Company, a subsidiary of Castle & Cooke, Ltd., and held a similar position with Hemmeter Development. He has a bachelor's degree in business economics from the University of California, Los Angeles. MIKE G. WRIGHT EXECUTIVE VICE PRESIDENT, ACQUISITIONS & INVESTMENTS, A&B PROPERTIES Wright is in charge of the Company's real estate acquisitions and new investments. He joined the Company in 2001, after nine years with GE Capital Hawaii, where he served as senior vice president and manager of GE's commercial real estate finance business. He has a bachelor's degree in finance from the University of Hawaii at Manoa. 11
ALAN K. ARAKAWA SENIOR VICE PRESIDENT, PLANNING, A&B PROPERTIES Arakawa is responsible for planning, entitlement, and development of lands owned by the Company. Prior to joining the Company in 2008, he served as president of Waiawa Ridge Development, a joint venture between the Company and Gentry Investment Properties, and executive vice president at Castle & Cooke Hawaii. He has a bachelor’s degree in civil engineering and a master’s degree in business administration from the University of Hawaii. DAVID I. HAVERLY SENIOR VICE PRESIDENT, LEASING, A&B PROPERTIES Haverly, who has been with A&B since 1999, is responsible for the asset and property management of the Company's improved and ground-leased real estate portfolio in Hawaii and on the Mainland. He has a bachelor's degree in business administration with an emphasis in real estate from the University of Hawaii. He was previously vice president of property management for Coldwell Banker Commercial Pacific Properties and also spent five years with Colliers Monroe Friedlander. Haverly is a Certified Commercial Investment Member. RICHARD B. STACK , JR. SENIOR VICE PRESIDENT, DEVELOPMENT, A&B PROPERTIES Stack is in charge of the Company's active real estate developments. Prior to joining the Company, he held project manager and operations manager positions at Molokai Ranch and had similar development responsibilities for the State of Hawaii's Housing Finance and Development Corporation. He has a bachelor's degree in electrical engineering from the University of Notre Dame. 12
Alexander & Baldwin, Inc. │Real Estate Supplement LANDHOLDINGS 13
Landholdings As of December 31, 2011, A&B and its subsidiaries owned 88,166 acres, consisting of 87,695 acres in Hawaii and 471 acres on the Mainland. TABLE 1 LANDHOLDINGS BY GEOGRAPHIC LOCATION December 31, 2011 Location Acres Maui 67,240 Kauai 20,375 Oahu 70 Big Island 10 Total Hawaii 87,695 Texas 150 California 100 Georgia 63 Utah 55 Colorado 36 Washington 27 Nevada 21 Arizona 19 Total U.S. Mainland 471 Total landholdings 88,166 In addition to the landholdings included in Table 1, the Company leases an additional 2,990 acres on Maui, Kauai, and Oahu from third parties. Table 1 also does not include 1,069 acres held under joint venture development. TABLE2 LANDHOLDINGS UNDER JOINT VENTURE DEVELOPMENT December 31, 2011 Original Acres at Project acres 12/31/11 Kukui’ula (HI) 1,000 961 Bakersfield (CA) 57 57 Ka Milo (HI) 31 24 Kai Malu (HI) 25 2 Palmdale (CA) 18 18 Crossroads (CA) 7 7 Total 1,138 1,069 14
The bulk of the Company’s 88,166 acres are used for agricultural, pasture, watershed and conservation purposes. A portion of these lands is used or planned for development or other urban uses, including the development projects described in the following pages. Table 3 details the Company’s landholdings by type and location. TABLE 3 LANDHOLDINGS BY TYPE AND LOCATION December 31, 2011 Description Maui Kauai Oahu Big Island Mainland Total Acres Fully entitled Hawaii – development/other Active development/sales 231 - 7 - - 238 Future development 174 44 - - - 218 Ground leases to third parties 64 1 - - - 65 Land used by affiliates 22 4 - - - 26 Other, including land not planned for development 17 54 - - - 71 Total Hawaii – development/other 508 103 7 - - 618 Mainland – development 28 28 Hawaii – commercial improved properties 51 8 63 10 - 132 Mainland – commercial improved properties - - - - 443 443 Subtotal – fully entitled 559 111 70 10 471 1,221 Agricultural, pasture and miscellaneous Hawaiian Commercial & Sugar Company 35,500 - - - - 35,500 Leased to third parties 7,150 4,620 - - - 11,770 Other agricultural, pasture and misc. purposes 8,181 2,324 - - - 10,505 Subtotal – agricultural, pasture & misc. 50,831 6,944 - - - 57,775 Watershed/conservation Wainiha Valley - 10,120 - - - 10,120 Other Kauai - 3,200 - - - 3,200 Maui 15,850 - - - - 15,850 Subtotal – watershed/conservation 15,850 13,320 - - - 29,170 Total landholdings 67,240 20,375 70 10 471 88,166 15
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Alexander & Baldwin, Inc. │Real Estate Supplement REAL ESTATE SALES 17
Real Estate Sales Segment Strategy and Operations The Real Estate Sales segment generates its operating profit through the development and sale of pipeline projects, raw lands and commercial properties from the Real Estate Leasing segment portfolio, and the equity in earnings of joint ventures. The Real Estate Sales segment primarily seeks to create shareholder value through an active, comprehensive, Hawaii-centric program of land stewardship, planning, entitlement, investment, development and sale of real estate. The segment’s primary strategic objectives include: FOCUS ON ENTITLEMENT AND DEVELOPMENT OF CORE HAWAII LANDS A&B focuses on the development of a portion of its core landholdings in Hawaii, pursuing appropriate entitlement and development projects that respond to market demand while meeting community needs. The large amount of land that the Company owns on Maui and Kauai provides opportunities for A&B to serve a wide range of markets. INVEST IN HIGH- RETURNING REAL ESTATE OPPORTUNITIES IN HAWAII In addition to the development of its legacy lands, since 1998 A&B has invested in attractive development opportunities across Hawaii, leveraging market knowledge, development expertise, entitlement experience and financial strength to both create shareholder value and diversify its development portfolio and pipeline. SCALE DEVELOPMENT PORTFOLIO OF PIPELINE PROJECTS TO MARKET OPPORTUNITY A&B’s pipeline of development projects encompasses a broad range of real estate product types, including residential and commercial properties. A&B employs a disciplined approach to its investments and prudently meters development capital to position select projects with ready inventory to meet market demand. UTILIZE STRATEGIC JOINT VENTURES WITH A WIDE VARIETY OF PARTNERS A&B pursues joint ventures and other strategic relationships, where appropriate, with a wide variety of locally, nationally and globally prominent land owners, real estate planning, development, and financing companies, home builders, and construction firms. In doing so, it supplements its in-house capabilities, accesses third-party capital, gains access to new opportunities in the Hawaii market, diversifies its pipeline, and optimizes risk-adjusted returns. 18
Table 4 provides an overview of all of the Company’s wholly owned and joint venture development projects, and is further supplemented by project information sheets that follow the table. T A B L E 4 REAL ESTATE DEVELOPMENT OVERVIEW December 31, 2011 (Dollars in millions) Construction timing Sales Timing Planned units, saleable acres Units/acres A&B A&B or gross Average closed Targeted sales price Estimated investment capital Estimated Acres at leasable square unit or lot through range per square project through estimated Outstanding Estimated substantial Estimated Estimated Project Location Product type 12/31/11 feet size 12/31/11 foot or NOI cost1 2011 20122 debt start completion start end ACTIVE DEVELOPMENT/SALES Wholly owned Brydeswood Kalaheo, Kauai Agricultural lots 3524 24 lots 12.3 acres - $2-$5 17 2 1 - 2012 2014 2014 2015 Gateway at Mililani Mauka Mililani, Oahu Retail 4.3 28,400 sf n/a - $1.0M stabilized NOI 19 8 3 - 2012 2013 n/a n/a Maui Business Park II Kahului, Maui Light industrial lots 179 155 acres n/a 4 acres $40-$60 102 26 34 - 2011 2019 2012 2028 Waihonua at Kewalo Honolulu, Oahu Primary residential highrise 1.7 341 units 1,000 sf - $450-$970 206 21 13 - 2012 2014 2014 2015 The Bluffs at Wailea (MF-11) Wailea, Maui Resort residential 7.4 12 lots 0.6 acres - $45-$100 9 9 - - 2007 2008 2008 2015 The Ridge at Wailea (MF-19) Wailea, Maui Resort residential 6.7 9 lots 0.7 acres - $65-$140 9 9 - - 2007 2009 2009 2015 Wailea B-1 Wailea, Maui Commercial/retail 11 60,000 sf n/a - tbd tbd 4 1 - 2013 2014 n/a n/a Wailea MF-7 Wailea, Maui Resort residential multi-family 13 75 units 1,700 sf - $450-$1,000 tbd 9 - - 2014 2015 2015 2017 Total 575.14 Joint ventures Ka Milo Kona, Hawaii Resort residential 24 137 units 2,000 sf 28 units $375-$920 120 12 2 - 2005 2015 2007 2015 up to 1,500 units Kukui'ula Koloa, Kauai Resort residential on 640 saleable 951 acres 0.42 acres 81 lots $40-$130 830 252 20 - 2006 20303 2006 2030 Kai Malu at Wailea Wailea, Maui Resort residential 2 150 units 2,800 sf 138 units $540-$1,080 124 12 - - 2004 2008 2006 2013 FUTURE DEVELOPMEN T Wholly owned Aina 'O Kane Kahului, Maui Primary res./commercial 4 103 units Haliimaile Haliimaile, Maui Primary residential lots 555 170 lots 440 units, Kahului Town Center Kahului, Maui Primary res./commercial 196 225,000 s.f. Wailea SF-8 Kihei, Maui Primary residential 13 90 units Wailea MF-6 Wailea, Maui Resort residential lots 23 60 lots 9 lots, 36 units, Wailea MF-10 Wailea, Maui Resort residential/commercial 13.7 64,000 s.f. Wailea MF-16 Wailea, Maui Resort residential lots 7 20 lots Wailea, other Wailea, Maui Various 72 400-600 units Total 206.75,6 Joint ventures Bakersfield Bakersfield, CA Retail 57 575,000 s.f. Palmdale Center Palmdale, CA Office/Industrial 18 315,000 s.f. Santa Barbara Ranch Santa Barbara, CA Primary residential lots 22 tbd 19
TABLE 4 (CONTINUED) REAL ESTATE DEVELOPMENT OVERVIEW December 31, 2011 (Dollars in millions) Construction timing Sales Timing Planned units, saleable acres Units/acres A&B A&B or gross Average closed Targeted sales price Estimated investment capital Estimated Acres at leasable square unit or lot through range per square project through estimated Outstanding Estimated substantial Estimated Estimated Project Location Product type 12/31/11 feet size 12/31/11 foot or NOI cost1 2011 20122 debt start completion start end ENTITLEMENT Eleele Community Kauai Primary residential 8407 tbd Kihei Residential Kihei, Maui Primary residential 95 up to 600 units Waiale Kahului, Maui Primary residential 765 up to 2,550 units JOINT VENTURE DEVELOPMENTS HELD FOR LEASE Crossroads Plaza Valencia, CA Office/Retail 7 56,000 s.f. 89% occup. The Shops at Kukui'ula Poipu, Kauai Retail 10 78,900 s.f. 75% occup. 1 Includes land cost at book value and capitalized interest, but excludes sales commissions and closings costs, except for Kukui’ula, which includes holding costs 2 Estimated 2012 capital is dependent on a number of factors, including timing of sales proceeds, project costs and construction progress . Construction progress, even on fully entitled projects, depends on additional government approvals, such as building permits. As a result, estimated capital expenditures, sales or leasing timing are subject to change. 3 Represents estimated completion date for major project infrastructure and amenities . Construction activities related to parcel development will be ongoing. 4 Brydeswood acreage is included in agricultural, pasture and miscellaneous landholdings 5 Ten of the 55 acres are designated for parks and open space. In addition to the 55 acres, another eight acres are designated for drainage and a waste water treatment plant, and are included in the “Agricultural, pasture and miscellaneous” classification in Table 3. 6 Kahului Town Center acreage is included in Hawaii-commercial improved properties fully entitled landholdings 7 44 acres of the Eleele Community Project are entitled, however, those acres will not be developed until the additional 796 acres are entitled 20
Development Project Information Sheets ACTIVE DEVELOPMENT/SALES Wholly Owned Brydeswood 22 Gateway at Mililani Mauka 22 Maui Business Park II 23 Waihonua at Kewalo 23 Wailea 24 The Bluffs at Wailea 25 The Ridge at Wailea 25 Wailea B-1 25 Wailea MF-7 25 Kai Malu at Wailea 25 Joint Venture Ka Milo at Mauna Lani 26 Kai Malu at Wailea 26 Kukui’ula 27 FUTURE DEVELOPMENTS Wholly Owned Aina ‘O Kane 29 Haliimaile Subdivision 29 Kahului Town Center 30 Wailea Sites 30 Joint Venture Bakersfield 31 Palmdale Center 31 Santa Barbara Ranch 31 ENTITLEMENTS Kihei Residential 32 Waiale Community 33 Eleele Community 33 21
Active Development BRYDESWOOD LOCATION Kalaheo, Kauai ACQUISITION DATE Historic lands A CRES 352 LOTS 24 PROJECT OVERVIEW Planned development of 24 large estate lots (average size is Pre-development activities continuing 12 acres) Potable test well completed with acceptable water quality and Final subdivision approval received in 2011 quantity Construction plans for roads and utilities approved Water system design is proceeding Oceanview and pasture lots GATEWAY AT MILILANI MAUKA LOCATION Mililani, Oahu ACQUISITION DATE December 29, 2011 A CRES 4.35 GLA (IN SQ. FT.) 28,400 – future 5,900 – existing PROJEC T OVERVIEW 4.35-acre fee simple parcel Design & engineering commenced Fully zoned for commercial development Marketing in progress Well-located within the only retail shopping area in the Mililani Targeting restaurant, neighborhood retail and medical and office Mauka community (pop. 20,000) in Central Oahu tenants Existing, fully leased 5,900 square-foot multi-tenant retail building Onsite and offsite infrastructure to be completed by seller by (see page 63) 3Q2012 Additional 28,400 square feet of retail space development planned Construction start scheduled 3Q2012 Existing retail and land acquired with 1031 exchange funds 22
Active Development MAUI BUSINESS PARK I I LOCATION Kahului, Maui ACQUISITION DATE Historic lands ACRES 179 LOTS 131 PROJECT OVERVIEW Zoned for light industrial use (commercial, retail, office) Offsite infrastructure work completed 179 gross acres (155 saleable acres) located in Central Onsite work progressing Maui near Kahului Airport Adjacent to 76-acre Maui Business Park I project, which sold 4-acre parcel sold to Costco in January 2012 for out in 2005 $38 per square foot Historic company-owned lands Increment I construction to be completed in 4Q2012 WAIHONUA AT KEWALO LOCATION Honolulu, Oahu ACQUISITION DATE June 30, 2010 U N I T S 341 FLOORS 43 PROJECT OVERVIEW Amenities include recreation deck, pool, spa, barbeque Highrise condominium in urban Honolulu dining pavilions, fitness center, private movie theatre and visitor guest suites Well located near shopping, restaurants and beaches Presales commenced in December 2011 Sales prices average approx. $700/sq. ft. Conversion to binding contracts in April 2012 One-, two- and three-bedroom residences averaging 1,000 Vertical construction dependent upon achieving satisfactory square feet level of binding sales
Active Development WAILEA A&B was the original developer of the Wailea Resort on Maui, beginning in the 1970s and continuing until A&B sold the Resort to a Japanese company in 1989. In October 2003, A&B re-acquired from the Japanese company all of the remaining undeveloped land in the Resort, consisting of 270 acres of fully zoned, residential and commercial land, for $67.1 million. The Resort encompasses a number of specific development sites, which are described below. This map shows the sites that were reacquired in 2003. Since that time, sites MF-15, the Golf Vistas, B-II, MF-9, MF-5 and MF-4 were sold or developed, and MF-8 was contributed to the Kai Malu joint venture. Active development Future development or Sale Sold ACTIVE DEVELOPMENT WHOLLY OWNED The Bluffs at Wailea (MF-11), The Ridge at Wailea (MF-19), B-1, MF-7 JOINT VENTURES Kai Malu at Wailea (MF-8) FUTURE DEVELOPMENT ORSAL E MF-6, MF-10, MF-12, MF-13, MF-16, SF-8, SF-7, SF-S 24
WAILEA ACTIVE DEVELOPMENT THE BLUFFS AT WAILEA (MF-11) The Bluffs at Wailea (MF-11) is a 12-lot single family home site development currently listed for sale at prices ranging from $45 to $100 per square foot, with an average listing price of $1.5 million. THE RIDGE AT WAILEA (MF- 19) The Ridge at Wailea (MF-19) consists of nine, half-acre, oceanview estate lots situated on 6.7 acres. The estimated sales price range is $65 to $140 per square foot, with an average list price of $1.6 million. WAILEA B- 1 The 11-acre B-1 parcel, which contains the only approved gas station site within the Wailea master plan, is planned for a retail commercial center with approximately 60,000 square feet of leasable space. The project is in the design stage. WAILEA MF- 7 The 13-acre MF-7 parcel is fully designed and permitted for the development of a 75-unit multi-family project. KAI MALU AT WAILEA (MF- 8) The 25-acre MF-8 parcel was contributed to the Kai Malu joint venture, which is detailed on the following page. 25
Active Development - Joint Ventures KA MILO AT MAUNA LANI LOCATION Kona, Hawaii ACQUISITION DATE May 2004 ACRES 31 (24 remaining) UNITS / HOMES 137 total (29 sold; 108 to be built) PROJECT OVERVIEW 137-unit resort residential community, with a mix of single- Average estimated sales price is $1.1 million family and paired homes The first phase consisted of 27 single-family and multi-family Units are constructed in two- to 20-unit increments, based units, completed in 2008 on buyer demand Onsite resort amenities include two pools, spa, exercise room, function pavilion KAIMALU AT WAILE A LOCATION Wailea, Maui ACQUISITION DATE October 1, 2003 A C R E S 25 (2 remaining) U N I T S 150 total (138 sold; 12 unsold) PROJECT OVERVIEW 150 single-family paired units Average sales price $1.3 million Construction completed 2008 138 units have closed; 12 units were available at 12/31/11 26
Active Development - Joint Ventures KUKUI‘ULA LOCATION Poipu, Kauai ACQUISITION DATE Historic lands ACRES 1,000 (961 remaining) UNITS Up to 1,500 PROJECT OVERVIEW Luxury resort residential community in Poipu, Kauai Spectacular ocean views from the Plantation House Development of up to 1,500 residential units on 1,000 fully Custom homesites and plantation style cottages available entitled acres for sale Joint venture with DMB, developer of premier resort Tom Weiskopf golf course recognized as best new private communities course in 2011 by Golf and Links Magazines The Kukui’ula Spa features indoor/outdoor treatment rooms, 75,000 sq. ft. private club, including spa, golf clubhouse, a movement studio and a dramatic lap pool with a beach bar and grill cascading waterfall and spa Members enjoy local food and flowers at the Community 78,900 sq. ft. retail center (The Shops at Kukui’ula) Farm and Gardens, tucked beside a 20-acre lake for fishing and canoeing 81 lots closed; 93 lots available at 12/31/11 Incomparable product with limited competition FINANCIAL & CAPITAL OVERVIEW Kukui’ula is a long-term, master planned project, designed to accommodate high-end resort residential growth on Kauai’s south shore over the next 15 to 25 years, and significant fluctuations in annual absorption over that time frame can be expected. The Company experienced similar absorption fluctuations over the course of its earlier, highly successful Wailea project. During normal, steady state market conditions, the joint venture can anticipate absorption of approximately 80 units per year, which would represent roughly 15% of Hawaii’s “normalized” number of $1 million+ resort residential unit sales per year. A&B believes this is achievable given the lack of competing inventory. (On a cash flow basis, 15-25 lot sales per year are needed to cover all project overhead, operating and sales and marketing costs.) 27
Active Development - Joint Ventures KUKUI’ULA FINANCIAL & CAPITAL OVERVIEW (CONT.) Sufficient project infrastructure is in place today to sell about 280 additional acres (500 to 800 units). Future infrastructure requirements would be paid for from project cash flows. GAAP accounting for the project will differ materially from cash flows, due to percentage of completion accounting. No project level debt on core project; all equity financed by partners. Total capital contributions to the venture as of December 31, 2011, were $252 million by A&B, which includes $30 million for the value of land contributed, and $188 million by DMB. Distributions to A&B and DMB are based on project performance over the duration of the project. Based on the JV's current projections, approximately 90% of all future distributable proceeds, in the aggregate, will be paid to A&B. 28
Future Development Project Summaries HAWAII AINA ‘O KANE (MAUI) Aina ‘O Kane is planned for 103 residential condominium units averaging 1,000 in square feet and 20,000 square feet of ground-floor commercial space, in Kahului, Maui. The project is situated near the Kahului Town Center redevelopment project. Together, the projects’ conceptual designs aim to create a vibrant downtown living environment for future residents. HALIIMAILE SUBDIVISION (MAUI) Haliimaile is a 55-acre, 170-lot residential subdivision planned for Haliimaile (Upcountry, Maui). Lots are planned to be 6,000 to 10,000 square feet in size. Ten acres are allocated for a park. 29
KAHULUI TOWN CENTER (MAUI) The redevelopment plan for the 19-acre Kahului Shopping Center block reflects the creation of a traditional town center, consisting of up to 440 residential condominium units, as well as approximately 225,000 square feet of retail/office space. WAILEA SITES (MAUI) The company is in the long-range planning and design stages for Wailea’s remaining parcels: Planned units, saleable Acres at acres or gross leasable Project Product type 12/31/11 square feet Wailea SF-8 Primary residential 13 90 units Wailea MF-6 Resort residential lots 23 60 lots Wailea MF-10 Resort residential/commercial 13.7 9 lots, 36 units, 64,000 s.f. Wailea MF-16 Resort residential lots 7 20 lots Wailea, other Various 72 400-600 units 30
MAINLAND BAKERSFIELD (CALIFORNIA) A&B entered into a joint venture with Intertex P&G Retail, LLC, for the planned development of a 575,000 square-foot retail center on a 57.3-acre commercial-zoned parcel in Bakersfield, California. The parcel was acquired in November 2006. Although development plans remain on hold due to current market conditions, the venture continues negotiations with a national anchor tenant and is evaluating development options. PALMDALE CENTER (CALIFORNIA) A&B entered into a joint venture with Intertex Palmdale Trade & Commerce Center LLC, for the development of a planned 315,000 square-foot mixed-use commercial office and light industrial condominium complex on 18.2 acres in Palmdale, California, located 60 miles northeast of Los Angeles and 25 miles northeast of Valencia. The parcel was contributed to the venture in 2008. The venture is negotiating with a potential tenant for a 300,000 square-foot build-to-suit facility. SANTA BARBARA RANCH (CALIFORNIA) The Company invested in a joint venture that controls 22 acres located 12 miles north of the City of Santa Barbara, which it is currently marketing for sale. 31
Entitlement Activity Successful land entitlement is a challenging, yet critical step in the development process. Similar to other high-demand, high-quality locales with a limited supply of land suitable for development, the entitlement process in Hawaii is complex, time-consuming and costly, involving a variety of state and county regulatory approvals. For example, conversion of an agriculturally zoned parcel to residential zoning usually requires the following approvals: County amendment of the county general plan and community plan to reflect the desired residential use; State Land Use Commission (SLUC) reclassification of the parcel from the Agricultural district to the Urban district; and County rezoning of the property to the precise residential use desired. A&B actively works with regulatory agencies, commissions and legislative bodies at various levels of government to entitle lands. A&B designates a parcel as fully entitled or fully zoned when all of the above-mentioned land use approvals have been obtained. Ongoing planning and entitlement efforts are focused on the following projects: KIHEI RESIDENTIAL (MAUI) A primary residential subdivision situated on 95 acres in Kihei, on Maui’s south shore, planned for up to 600 housing units, plus complementary commercial uses. In January 2009, the SLUC approved the project’s district boundary amendment application for urban designation. Applications for zoning and community plan amendment were filed with the County in 2010. In December 2010, the Planning Commission recommended approval of the change in zoning and community plan amendment applications, and these applications have been transmitted to the County Council for review and final approval. 32
WAIALE COMMUNITY (MAUI) Waiale is a master-planned community located in Central Maui. Approximately 545 acres of the project have been proposed for urban growth in the ongoing Maui General Plan Update to accommodate up to 2,550 primary housing units, together with parks, school, civic and commercial uses. In 2010, Properties submitted an application for SLUC Urban designation of the site. In 2011, the project’s final Environmental Impact Statement was completed and accepted by the SLUC. SLUC hearings on a petition for urban designation began in February 2012 and are scheduled to be completed later in the year. Upon receipt of SLUC approval, the Company will apply for project district zoning and community plan amendments with the County. ELEELE COMMUNITY (KAUAI) The Eleele Community Master Plan seeks entitlement of 840 acres for a new primary residential community east of Port Allen on Kauai, and is being pursued through Kauai’s multi-year General Plan Update Process. This process will take approximately two to three years, after which applications for state and county zoning would be pursued. 33
Completed Development Projects Summaries of selected completed projects undertaken by the Company during the past 15 years are intended to show the variety of projects developed and markets served. Since 2000, the Company has invested, either directly or through joint ventures, approximately $845 million in 38 development projects — including three high-rise condominiums in urban Honolulu and premier resort destination communities in Hawaii, such as the Wailea Resort on Maui and Kukui’ula on Kauai. The internal rates of return (unlevered for wholly-owned projects and levered for joint venture projects) on 20 projects which were completed at December 31, 2011 of the 38 total projects, representing $470 million of total invested capital (and $410 million of the total capital invested since 2000), had a weighted average of 22%. In addition, $30 million of capital was expended on four completed commercial property development projects where A&B, or A&B and its joint venture partners, retain ownership. Descriptions of a representative sampling of these projects follow. These returns are not necessarily indicative of returns on uncompleted projects, or of the overall profitability of A&B’s current and future development activities. The returns were based on each project’s readily identifiable cash flows and do not include allocations of general and administrative costs at the segment or corporate levels. PAST DEVELOPMENTS Alakea Corporate Tower 35 Hokua 35 801 Kaheka 36 Kai Lani at Ko Olina 36 Keola La‘i 37 Kunia Shopping Center 37 Lanikea 37 34
Past Development Project Summaries ALAKEA CORPORATE TOWER (OAHU) In 2003, A&B acquired this underperforming Class “A” office building, located in Honolulu’s central business district, at well below replacement cost with the intent of converting the property into an office condominium. The strategy was a resounding success, with all 52 units across 31 floors selling out by 2005. Project revenue amounted to $35 million (including leasing). HOKUA (OAHU) In 2003, A&B was invited to participate in the joint venture development of Hokua, a 247-unit luxury condominium located on 3.7 acres in urban Honolulu. The development met considerable pent-up demand for high-end product in the area, resulting in substantial pre-sales and the closing of nearly all of the units in a single month. A&B’s contribution to the venture was $40 million and total project venture revenue was $282 million. 35
801 KAHEKA (OAHU) The Company’s investment discipline is reflected in the 2005 purchase and subsequent sale of this four-acre parcel in urban Honolulu that was purchased for potential condominium development. The site, which was purchased for $19 million, was improved with 105,000 square feet of retail space. In 2007, an unsolicited offer triggered the opportunistic sale of the property, at a margin similar to the margin expected from development. KAI LANI AT KO OLINA (OAHU) In 2001, A&B partnered with a prominent local homebuilder to develop 116 residential condominiums in the Ko Olina Resort. The project was sold over 14 months, generating $57 million in revenue for the venture. A&B contributed $5 million to the venture. 36
KEOLA LA‘I (OAHU) A&B acquired this 2.7-acre urban Honolulu site in a private transaction in 2004. Construction of a 42-story, 352-residential unit, four-commercial unit project was completed and substantially sold in 2008. Sales here generated $224 million in revenue, with only three units unsold as of year-end 2011. KUNIA SHOPPING CENTER (OAHU) A&B commenced development of this 60,400 square-foot neighborhood shopping center in Central Oahu in 2002. The Center was completed in 2005 at a cost of $13 million and as of year-end 2011 was 96% occupied. Please refer to page 64 for additional information on the property. LANIKEA (OAHU) In 2001, a private transaction led to the purchase of a 1.6-acre condominium site in Waikiki. In 2005, A&B completed the construction of a 100-unit condominium project, the first high-rise project developed in Waikiki in over a decade. Sales were completed over a two-month period, generating revenue of $63 million. 37
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Alexander & Baldwin, Inc. │Real Estate Supplement REAL ESTATE LEASING 39
Real Estate Leasing Segment Strategy and Operations The Real Estate Leasing segment owns, operates and manages commercial properties. It focuses on acquiring high-quality retail, office and industrial properties in good locations, effectively managing those properties to increase margins through higher occupancies and cost management, and positioning these assets for potential sale when full market value has been achieved.1 Real Estate Leasing income also includes revenue from a variety of land leases, licenses and other agreements related to real estate in Hawaii. From a strategic perspective, the relatively stable, recurring cash flows generated by the Real Estate Leasing business act to counterbalance the cyclicality inherent in Real Estate Sales segment results, as well as fund or finance development activities. A&B strives to increase the value of its commercial property portfolio through active management of a comprehensive program designed to increase occupancy, secure high- quality tenants, and reduce costs, thereby maximizing the financial performance of these properties over time. Periodically, when A&B believes it has maximized the value of a select asset, it may market the asset for sale, or sell in response to an unsolicited offer. Upon sale, A&B will seek to redeploy the proceeds on a 1031 tax-deferred basis into a new asset with a higher return potential, with a focus on opportunistically migrating the portfolio to Hawaii over time. The Company’s commercial property portfolio originated in the early 1950s, and prior to 1989, consisted primarily of income properties developed by the Company on its historic landholdings on Maui and Kauai. In 1989, the Company broadened its strategy, reinvesting a portion from the sale of the Wailea Resort (since repurchased) into five commercial properties on the Mainland using Internal Revenue Code Section 1031 tax-deferred exchanges. Income taxes that are deferred utilizing the 1031 exchange process represent an interest-free source of capital that is used by the Company to generate incremental cash flow. Given the low historical cost basis of the Company’s lands, the strategy is particularly appealing to A&B. Over the years, the Company has deferred over $200 million of income taxes on the sale of raw land and improved properties. The tax benefits of the 1031 program also allow the Company to compete effectively for acquisitions, and earn attractive returns. A&B’s current portfolio, which includes 45 income-producing properties comprising 7.9 million square feet of gross leasable area, is well balanced among retail, office and industrial sectors and is geographically dispersed in eight Mainland states and Hawaii. 1 Any financial impact from such a sale would be reported in Real Estate Sales segment results. 40
PORT FOLIO SEGMENT DESCRIPTION HAWAII IMPROVED PROPERTIES A&B’s Hawaii improved property portfolio consists of 21 retail, office and industrial properties, comprising approximately 1.4 million square feet of leasable space. The majority of the commercial properties are located on Maui and Oahu, with smaller holdings in the area of Port Allen, Kauai, and the Big Island of Hawaii. HAWAII UNIMPROVED PROPERTIES The Company leases and licenses a relatively small portion of its historic lands on Maui and Kauai to third parties. These leases and licenses cover a wide variety of urban and agricultural lands, ranging from ground leases covering the fee interest in land underlying commercial properties, to farming and pasture leases, to licenses of remnant parcels and easement areas, to sand and aggregate quarry leases whose lease or royalty payments are based on extraction rates. Accordingly, both period-to-period results and rental revenue per land unit may be highly variable. MAINLAND IMPROVED PROPERTIES On the Mainland, A&B owns a portfolio of 24 retail, office and industrial properties acquired primarily by way of 1031 tax-deferred exchanges. The Company’s Mainland portfolio comprises approximately 6.5 million square feet of leasable space. Summarized information for the Company’s portfolio as of and for the year ended December 31, 2011 follows. Hawaii Mainland Total GLA (in millions) Industrial 0.5 4.5 5.0 Office 0.2 1.3 1.5 Retail 0.7 0.7 1.4 Total 1.4 6.5 7.9 Occupancy Industrial 89% 95% 94% Office 92% 84% 85% Retail 92% 88% 90% Total 91% 92% 92% Cash NOI (in millions)1 $ 26.52 $ 34.3 $ 60.8 1 See page 52 for a statement on the Company’s use of NOI and a reconciliation of Leasing operating profit to Real Estate Leasing Cash NOI 2 Includes $3.5 million of NOI from unimproved Hawaii properties 41
Acquisition and Disposition Strategy The Company seeks to acquire income properties in markets with strong growth prospects and to enhance asset values through facility upgrades, re-tenanting, asset repositioning and general market growth. When management believes a property has achieved full value, it will market the property for sale, or occasionally respond to unsolicited offers. The Company believes that Hawaii is poised for growth, and further believes that given A&B’s combination of local market knowledge, relationship, and financial strength, it has a sustainable competitive advantage in investing in Hawaii commercial properties. As a result, it will seek to increasingly focus the portfolio’s geographic concentration to Hawaii over time. The Company sells selected properties from its portfolio when it believes the value of an asset has been maximized and the asset’s full fair market value can be realized. Given (1) the Company’s strategic decision to increasingly focus its portfolio in Hawaii over time; (2) the relatively small number of suitable investment properties available in Hawaii at any given time; and (3) the significant transactional restrictions that accompany the 1031 process, it is likely that the pace of commercial portfolio property sales in the future will be dictated largely by the availability of suitable Hawaii replacement investment opportunities. 42
Real Estate Leasing Segment – Asset Descriptions and Statistics Tables 5 to 8 provide detail on the Company’s commercial real estate portfolio. TABLE 5 PROPERTY DETAIL -HAWAII IMPROVED PROPERTIES – MOST RECENT QUARTER For the Quarter Ended 12/31/11 Gross % cash net leasable 4Q2011 Cash operating area at net operating income to total Number of 12/31/11 Leased1 Outstanding income (NOI)2 Hawaii Property properties Island (sq. ft.) (percent) debt ($ in 000s) portfolio Industrial: Komohana Industrial Park 1 Oahu 238,300 81.0 $ - $ 784 14.7 P&L Building 1 Maui 104,100 97.7 - 267 5.0 Port Allen 3 Kauai 63,800 94.3 - 142 2.7 Waipio Industrial 1 Oahu 158,400 97.3 - 509 9.5 Subtotal – Industrial 6 564,600 $ - $ 1,702 31.9 Office: Judd Building 1 Oahu 20,200 100.0 $ - $ 93 1.7 Kahului Office Building 1 Maui 58,300 92.0 - 302 5.7 Kahului Office Center 1 Maui 32,900 86.0 - 156 2.9 Lono Center 1 Maui 13,400 84.0 - 52 1.0 Maui Clinic Building 1 Maui 16,600 96.0 - 89 1.7 Stangenwald Building 1 Oahu 27,100 87.7 - 63 1.2 Subtotal – Office 6 168,500 $ - $ 755 14.2 Retail: Gateway at Mililani Mauka3 1 Oahu 5,900 100.0 $ - $ 2 0.0 Kahului Shopping Center 1 Maui 43,200 69.3 - 59 1.1 Kaneohe Bay Shopping Center 1 Oahu 123,900 95.0 - 405 7.6 Kunia Shopping Center Oahu 60,400 96.0 - 437 8.2 1 Lahaina Square Maui 50,200 62.0 - 88 1.7 1 Lanihau Marketplace Hawaii 88,300 99.0 - 527 9.9 1 Maui Mall 1 Maui 185,700 95.0 - 669 12.6 Port Allen Marina Center 1 Kauai 23,600 77.0 - 102 1.9 Waipio Shopping Center 1 Oahu 113,800 97.0 - 582 10.9 Subtotal – Retail 9 695,000 $ - $ 2,871 53.9 Total Hawaii 21 1,428,100 $ - $ 5,328 100.0 1 Represents the average percentage of space leased during the period referenced or A&B’s ownership period, whichever is shorter. Space is considered leased when a tenancy agreement has been fully executed or the space is revenue producing. 2 See page 52 for a statement regarding the Company’s use of Cash NOI and a reconciliation of Leasing operating profit to Cash NOI for the total portfolio. 3 Property acquired at the end of 2011. Note: For portfolio asset class and geographic occupancy see Table 9. 43
TABLE 6 PROPERTY DETAIL -HAWAII IMPROVED PROPERTIES – MOST RECENT FISCAL YEAR For the Year Ended 12/31/11 Gross % cash net leasable Annual Cash operating area at Leased1 net operating income to Number of 12/31/11 2011 Outstanding income (NOI)2 total Hawaii Property properties Island (sq. ft.) (percent) debt ($ in 000s) portfolio Industrial: Komohana Industrial Park 1 Oahu 238,300 76.9 $ - $ 2,883 13.0 P&L Building 1 Maui 104,100 95.5 - 1,032 4.6 Port Allen 3 Kauai 63,800 94.3 - 508 2.3 Waipio Industrial 1 Oahu 158,400 97.9 - 2,154 9.7 Subtotal – Industrial 6 564,600 $ - $ 6,577 29.6 Office: Judd Building 1 Oahu 20,200 100.0 $ - $ 372 1.7 Kahului Office Building 1 Maui 58,300 91.7 - 1,115 5.0 Kahului Office Center 1 Maui 32,900 85.0 - 648 2.9 Lono Center 1 Maui 13,400 84.0 - 164 0.7 Maui Clinic Building 1 Maui 16,600 97.7 - 370 1.7 Stangenwald Building 1 Oahu 27,100 94.1 - 351 1.6 Subtotal – Office 6 168,500 $ - $ 3,020 13.6 Retail: Gateway at Mililani Mauka3 1 Oahu 5,900 100.0 $ - $ 2 0.0 Kahului Shopping Center 1 Maui 43,200 79.5 - 231 1.0 Kaneohe Bay Shopping Center 1 Oahu 123,900 97.3 - 1,853 8.4 Kunia Shopping Center 1 Oahu 60,400 90.2 - 1,842 8.3 Lahaina Square 1 Maui 50,200 66.5 - 446 2.0 Lanihau Marketplace 1 Hawaii 88,300 99.0 - 2,224 10.0 Maui Mall 1 Maui 185,700 93.9 - 2,736 12.3 Port Allen Marina Center 1 Kauai 23,600 77.0 - 421 1.9 Waipio Shopping Center 1 Oahu 113,800 97.8 - 2,863 12.9 Subtotal – Retail 9 695,000 $ - $ 12,618 56.8 Total Hawaii 21 1,428,100 $ - $ 22,215 100.0 1 Represents the average percentage of space leased during the period referenced or A&B’s ownership period, whichever is shorter. Space is considered leased when a tenancy agreement has been fully executed or the space is revenue producing. 2 See page 52 for a statement regarding the Company’s use of Cash NOI and a reconciliation of Leasing operating profit to Cash NOI for the total portfolio. 3 Property acquired at the end of 2011. Note: For portfolio asset class and geographic occupancy see Table 10. 44
TABLE 7 PROPERTY DETAIL -MAINLAND IMPROVED PROPERTIES – MOST RECENT QUARTER For the Quarter Ended 12/31/11 % cash net Gross operating leasable 4Q2011 cash income to area at Outstanding net operating total Number of 12/31/11 Leased1 debt income (NOI)2 Mainland Property properties Location (sq. ft.) (percent) ($ in 000s) ($ in 000s) portfolio Industrial: Activity Distribution Center 1 San Diego, CA 252,300 100.0 $ - $ 531 5.9 Centennial Plaza 1 Salt Lake City, UT 244,000 87.0 - 219 2.4 Heritage Business Park 1 Dallas, TX 1,316,400 100.0 - 1,405 15.6 Midstate Hayes 1 Visalia, CA 789,100 85.0 11,517 598 6.7 Northpoint Portfolio 1 Fullerton, CA 119,400 100.0 - 235 2.6 Republic Distribution Center 1 Pasadena, TX 312,500 100.0 - 85 0.9 Savannah Logistics Park 1 Savannah, GA 1,035,700 100.0 - 977 10.8 Sparks Business Center 1 Sparks, NV 396,100 89.7 - 461 5.1 Subtotal – Industrial 8 4,465,500 $ 11,517 $ 4,511 50.0 Office: Concorde Commerce Center 1 Phoenix, AZ 140,700 82.0 $ - $ 271 3.0 Deer Valley Financial Center 1 Phoenix, AZ 126,600 70.0 10,316 154 1.7 Firestone Blvd Building 1 La Mirada, CA 28,100 100.0 - 121 1.3 Gateway Oaks 1 Sacramento, CA 58,700 86.0 - 115 1.3 Issaquah Office Center 1 Issaquah, WA 146,900 100.0 - 523 5.8 Ninigret Office Park 1 Salt Lake City, UT 185,500 100.0 - 592 6.6 1800 and 1820 Preston Park 1 Plano, TX 198,800 87.0 - 446 4.9 2868 Prospect Park 1 Sacramento, CA 162,900 63.0 - 120 1.3 San Pedro Plaza 1 San Antonio, TX 171,900 80.0 - 313 3.5 Union Bank 1 Everett, WA 84,000 100.0 - 335 3.7 Subtotal – Office 10 1,304,100 $ 10,316 $ 2,990 33.1 Retail: Broadlands Marketplace 1 Broomfield, CO 103,900 90.7 $ - $ 181 2.0 Little Cottonwood Center 1 Sandy, UT 141,600 94.0 6,496 257 2.9 Meadows on the Parkway 1 Boulder, CO 216,400 79.0 - 658 7.3 Rancho Temecula Town Center 1 Temecula, CA 165,500 91.3 - 208 2.3 Royal MacArthur Center 1 Dallas, TX 44,100 79.0 - 181 2.0 Wilshire Shopping Center 1 Greeley, CO 46,500 57.0 - 38 0.4 Subtotal – Retail 6 718,000 $ 6,496 $ 1,523 16.9 Total Mainland 24 6,487,600 $ 28,329 $ 9,024 100.0 1 Represents the average percentage of space leased during the period referenced or A&B’s ownership period, whichever is shorter. Space is considered leased when a tenancy agreement has been fully executed or the space is revenue producing. 2 See page 52 for a statement regarding the Company’s use of Cash NOI and a reconciliation of Leasing operating profit to Cash NOI for the total portfolio. Note: For portfolio asset class and geographic occupancy see Table 9. 45
TABLE 8 PROPERTY DETAIL -MAINLAND IMPROVED PROPERTIES – MOST RECENT FISCAL YEAR For the Year Ended 12/31/11 % cash net Gross operating leasable Annual cash income to net operating area at Outstanding total Number of 12/31/11 Leased1 debt income (NOI)2 Mainland Property properties Location (sq. ft.) (percent) ($ in 000s) ($ in 000s) portfolio Industrial: Activity Distribution Center 1 San Diego, CA 252,300 92.2 $ - $ 1,963 5.8 Centennial Plaza 1 Salt Lake City, UT 244,000 89.3 - 909 2.7 Heritage Business Park 1 Dallas, TX 1,316,400 97.7 - 4,733 14.1 Midstate 99 Distribution Center 1 Visalia, CA 789,100 92.2 11,517 2,530 7.5 Northpoint Industrial 1 Fullerton, CA 119,400 100.0 - 823 2.5 Republic Distribution Center 1 Pasadena, TX 312,500 100.0 - (123) (0.4) Savannah Logistics Park 1 Savannah, GA 1,035,700 100.0 - 3,483 10.4 Sparks Business Center 1 Sparks, NV 396,100 79.8 - 1,482 4.4 Subtotal – Industrial 8 4,465,500 $ 11,517 $ 15,800 47.0 Office: Concorde Commerce Center 1 Phoenix, AZ 140,700 81.8 $ - $ 1,360 4.0 Deer Valley Financial Center 1 Phoenix, AZ 126,600 67.7 10,316 328 1.0 Firestone Boulevard Building 1 La Mirada, CA 28,100 100.0 - 480 1.4 Gateway Oaks 1 Sacramento, CA 58,700 86.0 - 677 2.0 Issaquah Office Center3 1 Issaquah, WA 146,900 100.0 - 626 1.8 Ninigret Office Park 1 Salt Lake City, UT 185,500 99.4 - 1,893 5.6 1800 and 1820 Preston Park 1 Plano, TX 198,800 83.2 - 1,401 4.2 2868 Prospect Park 1 Sacramento, CA 162,900 77.0 - 1,064 3.2 San Pedro Plaza 1 San Antonio, TX 171,900 76.8 - 875 2.6 Union Bank3 1 Everett, WA 84,000 100.0 - 727 2.2 Subtotal – Office 10 1,304,100 $ 10,316 $ 9,431 28.0 Retail: Broadlands Marketplace 1 Broomfield, CO 103,900 90.2 $ - $ 714 2.1 Little Cottonwood Center 1 Sandy, UT 141,600 95.4 6,496 1,405 4.2 Meadows on the Parkway 1 Boulder, CO 216,400 79.3 - 2,661 7.9 Rancho Temecula Town Center 1 Temecula, CA 165,500 95.4 - 2,721 8.1 Royal MacArthur Center 1 Dallas, TX 44,100 80.8 - 675 2.0 Wilshire Shopping Center 1 Greeley, CO 46,500 65.7 - 223 0.7 Subtotal – Retail 6 718,000 $ 6,496 $ 8,399 25.0 Total Mainland 24 6,487,600 $ 28,329 $ 33,630 100.0 1 Represents the average percentage of space leased during the period referenced or A&B’s ownership period, whichever is shorter. Space is considered leased when a tenancy agreement has been fully executed or the space is revenue producing. 2 See page 52 for a statement regarding the Company’s use of Cash NOI and a reconciliation of Leasing operating profit to Cash NOI for the total portfolio. 3 Properties acquired in 2011. Note: For portfolio asset class and geographic occupancy see Table 10. 46
TABLE 9 COMPARABLE PERCENT OCCUPANCY DATA BY GEOGRAPHIC REGION AND ASSET CLASS – MOST RECENT QUARTER 4Q 2011 4Q 2010 Percentage point change Location Industrial Office Retail Total Industrial Office Retail Total Industrial Office Retail Total Hawaii improved 90.2 90.9 91.3 90.8 86.9 92.5 93.7 90.7 3.3 (1.6) (2.4) 0.1 Mainland improved 95.7 85.3 85.1 92.4 86.5 82.5 90.2 86.3 9.2 2.8 (5.1) 6.1 Total 95.1 85.9 88.1 92.1 86.6 83.9 91.8 87.1 8.5 2.0 (3.7) 5.0 TABLE 1 0 COMPARABLE PERCENT OCCUPANCY DATA BY GEOGRAPHIC REGION AND ASSET CLASS – MOST RECENT FISCAL YEAR 2011 2010 Percentage point change Location Industrial Office Retail Total Industrial Office Retail Total Industrial Office Retail Total Hawaii improved 88.9 91.7 92.1 90.7 89.2 90.9 94.4 91.9 (0.3) 0.8 (2.3) (1.2) Mainland improved 95.1 84.1 87.6 92.2 85.1 84.2 88.4 85.3 10.0 (0.1) (0.8) 6.9 Total 94.4 85.0 89.7 91.9 85.5 85.1 91.4 86.4 8.9 (0.1) (1.7) 5.5 47
TABLE 11 WEIGHTED AVERAGE GROSS LEASABLE AREA BY GEOGRAPHIC REGION AND ASSET CLASS – MOST RECENT QUARTER 4Q 2011 (in sq. ft.) 4Q 2010 (in sq. ft.) Percentage Change Location Industrial Office Retail Total Industrial Office Retail Total Industrial Office Retail Total Hawaii improved 564,600 168,500 691,100 1,424,200 626,100 167,200 687,400 1,480,700 (9.8) 0.8 0.5 (3.8) Mainland improved 4,466,800 1,303,900 718,300 6,489,000 4,466,800 1,072,900 802,200 6,341,900 - 21.5 (10.5) 2.3 Total 5,031,400 1,472,400 1,409,400 7,913,200 5,092,900 1,240,100 1,489,600 7,822,600 (1.2) 18.7 (5.4) 1.2 TABLE 1 2 WEIGHTED AVERAGE GROSS LEASABLE AREA BY GEOGRAPHIC REGION AND ASSET CLASS – MOST RECENT FISCAL YEAR 2011 (in sq. ft.) 2010 (in sq. ft.) Percentage Change Location Industrial Office Retail Total Industrial Office Retail Total Industrial Office Retail Total Hawaii improved 605,600 168,500 691,300 1,465,400 507,000 167,200 641,500 1,315,700 19.4 0.8 7.8 11.4 Mainland improved 4,466,800 1,170,900 776,200 6,413,900 5,216,700 1,072,900 613,300 6,902,900 (14.4) 9.1 26.6 (7.1) Total 5,072,400 1,339,400 1,467,500 7,879,300 5,723,700 1,240,100 1,254,800 8,218,600 (11.4) 8.0 17.0 (4.1) 48
TABLE 13 OCCUPANCY ANALYSIS TREND – LAST FIVE QUARTERS 4Q2011 3Q2011 2Q2011 1Q2011 4Q2010 Number of Percentage Number of Percentage Number of Percentage Number of Percentage Number of Percentage properties Sq. ft. leased properties Sq. ft. leased properties Sq. ft. leased properties Sq. ft. leased properties Sq. ft. leased Industrial 14 5,031,400 95.1 14 5,072,500 94.4 15 5,093,000 95.2 15 5,093,000 92.8 15 5,092,900 86.6 Office 16 1,472,400 85.9 16 1,374,400 85.1 15 1,269,500 84.6 14 1,241,400 84.3 14 1,240,100 83.9 Retail 15 1,409,400 88.1 14 1,407,300 89.1 14 1,500,100 90.5 15 1,553,300 90.8 16 1,489,600 91.8 Total 45 7,913,200 92.1 44 7,854,200 91.8 44 7,862,600 92.6 44 7,887,700 91.1 45 7,822,600 87.1 49
TABLE 1 4 REAL ESTATE LEASING CASH NET OPERATING INCOME (NOI) – MOST RECENT QUARTER (in millions) 4Q 2011 4Q 2010 Percentage Change Location Industrial Office Retail Total Industrial Office Retail Total Industrial Office Retail Total Hawaii improved $ 1.7 $ 0.8 $ 2.9 $ 5.4 $ 1.8 $ 0.7 $ 2.6 $ 5.1 (5.6) 14.3 11.5 5.9 Hawaii unimproved - - - 0.8 - - - 0.9 - - - (11.1) Total Hawaii $ 1.7 $ 0.8 $ 2.9 $ 6.2 $ 1.8 $ 0.7 $ 2.6 $ 6.0 (5.6) 14.3 11.5 3.3 Mainland improved 4.5 3.0 1.5 9.0 4.1 1.5 2.0 7.6 9.8 100.0 (25.0) 18.4 Total $ 6.2 $ 3.8 $ 4.4 $ 15.2 $ 5.9 $ 2.2 $ 4.6 $ 13.6 5.1 72.7 (4.3) 11.8 TABLE 15 REAL ESTATE LEASING CASH NET OPERATING INCOME (NOI) – MOST RECENT FISCAL YEAR (in millions) 2011 2010 Percentage Change Location Industrial Office Retail Total Industrial Office Retail Total Industrial Office Retail Total Hawaii improved $ 7.2 $ 3.1 $ 12.7 $ 23.0 $ 5.8 $ 3.5 $ 11.1 $ 20.4 24.1 (11.4) 14.4 12.7 Hawaii unimproved - - - 3.5 - - - 3.9 - - - (10.3) Total Hawaii $ 7.2 $ 3.1 $ 12.7 $ 26.5 $ 5.8 $ 3.5 $ 11.1 $ 24.3 24.1 (11.4) 14.4 9.1 Mainland improved 15.8 9.4 9.1 34.3 18.7 6.6 6.1 31.4 (15.5) 42.4 49.2 9.2 Total $ 23.0 $ 12.5 $ 21.8 $ 60.8 $ 24.5 $ 10.1 $ 17.2 $ 55.7 (6.1) 23.8 26.7 9.2 Note: See page 52 for a statement on the Company’s use of NOI and a reconciliation of Leasing operating profit to Real Estate Leasing Cash NOI and Real Estate Leasing Same Store NOI. 50
TABLE 16 REAL ESTATE LEASING SAME STORE CASH NOI1 – MOST RECENT QUARTER (in millions) 4Q 2011 4Q 2010 Percentage Change Location Office Industrial Retail Total Office Industrial Retail Total Office Industrial Retail Total Hawaii improved $ 0.8 $ 1.7 $ 2.8 $ 5.3 $ 0.8 $ 1.6 $ 2.3 $ 4.7 - 6.2 21.7 12.8 Hawaii unimproved - - - 0.8 - - - 0.9 - - - (9.7) Total Hawaii $ 0.8 $ 1.7 $ 2.8 $ 6.1 $ 0.8 $ 1.6 $ 2.3 $ 5.6 - 6.2 21.7 9.2 Mainland improved 2.1 4.5 1.1 7.7 1.5 4.0 1.0 6.5 40.0 12.5 10.0 18.5 Total $ 2.9 $ 6.2 $ 3.9 $ 13.8 $ 2.3 $ 5.6 $ 3.3 $ 12.1 26.1 10.7 18.2 14.2 TABLE 1 7 REAL ESTATE LEASING SAME STORE CASH NOI1 – MOST RECENT FISCAL YEAR (in millions) 2011 2010 Percentage Change Location Office Industrial Retail Total Office Industrial Retail Total Office Industrial Retail Total Hawaii improved $ 3.0 $ 3.7 $ 9.9 $ 16.6 $ 3.3 $ 3.6 $ 8.7 $ 15.6 (9.1) 2.8 13.8 6.4 Hawaii unimproved - - - 3.6 - - - 3.8 - - - (5.3) Total Hawaii $ 3.0 $ 3.7 $ 9.9 $ 20.2 $ 3.3 $ 3.6 $ 8.7 $ 19.4 (9.1) 2.8 13.8 4.1 Mainland improved 8.1 15.8 1.6 25.5 6.6 15.6 1.7 $ 23.9 22.7 1.3 (5.9) 6.7 Total $ 11.1 $ 19.5 $ 11.5 $ 45.7 $ 9.9 $ 19.2 $ 10.4 $ 43.3 12.1 1.6 10.6 5.5 1 Same Store Cash NOI relates to properties that were operated throughout the duration of both periods under comparison . Note: See page 52 for a statement on the Company’s use of NOI and a reconciliation of Leasing operating profit to Real Estate Leasing Cash NOI and Real Estate Leasing Same Store NOI. 51
Statement on Management’s Use of Non-GAAP Financial Measures Cash net operating income (NOI) is a non-GAAP measure derived from real estate revenues (determined in accordance with GAAP, less straight-line rental adjustments) minus property operating expenses (determined in accordance with GAAP). Cash NOI does not have any standardized meaning prescribed by GAAP, and therefore, may differ from definitions of cash NOI used by other companies. Cash NOI should not be considered as an alternative to net income (determined in accordance with GAAP) as an indicator of the Company’s financial performance, or as an alternative to cash flow from operating activities as a measure of the Company’s liquidity. Cash NOI is commonly used as a measure of operating performance because it is an indicator of the return on property investment, and provides a method of comparing property performance over time. Cash NOI excludes general and administrative expenses, straight-line rental adjustments, bad debt expense, interest income, interest expense, depreciation and amortization, and gains on sales of interests in real estate. The Company believes that the Real Estate Leasing segment’s operating profit after discontinued operations is the most directly comparable GAAP measurement to cash NOI. A required reconciliation of Real Estate Leasing operating profit to Real Estate Leasing segment same store cash NOI is as follows: TABLE 18 RECONCILIATION OF REAL ESTATE LEASING OPERATING PROFIT TO CASH NOI AND SAME STORE CASH NOI (NON- GAAP) (in millions) Year ended Year ended December 31, December 31, 4Q 2011 4Q 2010 2011 2010 Real Estate Leasing segment operating profit before discontinued operations $ 9.1 $ 8.4 $ 39.3 $ 35.3 Less amounts reported in discontinued operations - (0.2) (1.3) (5.9) Real Estate Leasing segment operating profit after subtracting discontinued operations $ 9.1 $ 8.2 $ 38.0 $ 29.4 Adjustments: Depreciation and amortization $ 5.5 $ 5.7 $ 21.7 $ 21.1 FASB 13 straight-line lease adjustments (0.5) (1.2) (3.8) (4.1) General and administrative expense 0.9 0.7 2.8 2.9 Discontinued operations - 0.2 1.3 5.9 Bad debt expense 0.2 0.0 0.8 0.5 Real Estate Leasing total cash NOI $ 15.2 $ 13.6 $ 60.8 $ 55.7 Acquisitions/ disposition adjustments/ other (1.4) (1.5) (15.1) (12.4) Real Estate Leasing segment same store cash NOI1 $ 13.8 $ 12.1 $ 45.7 $ 43.3 1 Cash NOI related to properties that were operated throughout the duration of both periods under comparison. 52
Portfolio Acquisitions and Dispositions TABLE 19 2011 IMPROVED PROPERTY PORTFOLIO ACQUISITIONS /DISPOSITIONS Acquisition date Acquisition price Gross leasable area Leased percentage Property acquired in 2011 (month/year) ($ in millions) (sq. ft.) at acquisition Union Bank 6/11 10.9 84,000 100.0 Issaquah Office Center 9/11 19.9 146,900 100.0 Gateway at Mililani Mauka 12/11 8.21 5,900 100.0 Total 39.0 236,800 Disposition date Disposition price Gross leasable area Leased percentage Property disposed in 2011 (month/year) ($ in millions) (sq. ft.) at disposition Apex Building 1/11 9.0 28,100 91.0 Arbor Park Shopping Center 6/11 22.5 139,500 94.0 Wakea Business Center 9/11 8.5 61,500 98.0 Total 40.0 229,100 2010 IMPROVED PROPERTY PORTFOLIO ACQUISITIONS /DISPOSITIONS Acquisition date Acquisition price Gross leasable area Leased percentage Property acquired in 2010 (month/year) ($ in millions) (sq. ft.) at acquisition Meadows on the Parkway 1/10 30.8 216,400 83.0 Lanihau Marketplace 4/10 22.5 88,300 98.0 Komohana Industrial Park 7/10 37.7 238,300 74.0 Little Cottonwood Center 10/10 20.8 141,600 96.0 Rancho Temecula Town Center 11/10 48.9 165,500 97.0 Lahaina Square 11/10 4.9 50,200 70.0 Total 165.6 900,300 Disposition date Disposition price Gross leasable area Leased percentage Property disposed of in 2010 (month/year) ($ in millions) (sq. ft.) at disposition Mililani Shopping Center 1/10 50.3 180,300 99.0 Kele Center 2/10 4.9 14,800 91.0 Valley Freeway Corporate Park 5/10 15.5 228,200 96.0 Ontario Distribution Center 10/10 43.0 898,400 100.0 Total 113.7 1,321,700 1 $8.2M acquisition price includes an existing 5,900 square-foot building and a 4.3-acre development parcel 53
Lease Renewal Analysis The weighted average lease terms of our Hawaii and Mainland portfolios are 92 and 84 months, respectively, for a total portfolio lease term of 88 months. The weighted average remaining lease terms for the Hawaii and Mainland portfolios are 45 and 36 months, respectively, for a total portfolio remaining lease term of 40 months. The following Table 20 details portfolio lease expirations by year. TABLE 20 LEASE EXPIRATIONS December 31, 2011 Percentage change in Percentage of Annual gross Percentage of Percentage annual gross Expiration Sq. ft. of total leased rent expiring2 total annual renewed or rent on year expiring leases GLA1 ($ in millions) gross rent2 re-leased renewed leases 2010 835,815 72.0 (11.7) 2011 791,686 70.0 (3.0) 2012 577,581 8.0 $ 8.2 11.1 2013 2,119,0983 29.3 16.4 22.2 2014 525,533 7.2 6.9 9.3 2015 1,140,483 15.7 11.4 15.4 2016 1,075,492 14.9 11.3 15.3 2017 570,821 7.9 6.1 8.3 2018 114,829 1.6 1.2 1.6 2019 59,325 0.8 1.3 1.7 2020 187,923 2.6 2.8 3.8 2021 143,151 2.0 1.1 1.5 2022 84,122 1.2 1.5 2.0 Thereafter 637,089 8.8 5.8 7.8 7,235,447 100.0 $ 74.0 99.9 1 Gross Leasable Area 2 Annual gross rent means the annualized base rent amounts of expiring leases and includes improved properties only. 3 Includes 1,035,676 square feet related to the Savannah Logistics Park, which is 100% leased to Matson Logistics, Inc. See page 73 for a detailed property description. . 54
Portfolio Concentrations TABLE 21 TENANT CONCENTRATION AS OF 12/31/11 Largest Tenants (In-Service Properties) Based Upon Annual Gross Revenue Percentage of annual Percentage Annual gross gross GLA2 of total Tenant Primary industry Lease expiration year revenue 1 revenue (sq. ft.) GLA2 Matson Global Distribution Services, Inc.1 Logistics 2013 $ 3,572,198 4.0 1,035,676 13.1 Cigna Healthcare Healthcare 2013 1,943,976 2.2 87,370 1.1 GP/RM Prestress, LLC Construction Equipment & Materials Supplier 2014 1,443,732 1.6 1,002,595 12.7 Teleperformance USA Call Center/Communications 2015 1,311,504 1.5 92,036 1.2 Office Max, Inc. Retail 2012 1,236,577 1.4 75,824 1.0 Henry Schein, Inc. Dental Supplier 2013 1,173,252 1.3 241,909 3.1 Safeway Store Retail 2014, 2027 1,015,248 1.1 152,128 1.9 International Paper Paper Packaging/Distribution 2013 1,011,362 1.1 252,040 3.2 Siemens Corporation Electronics & Electrical Engineering 2013, 2016 994,866 1.1 174,959 2.2 Rackspace DAL 1 DC Management Technology 2015 926,688 1.0 144,423 1.8 Total $ 14,629,403 16.3 3,258,960 41.3 1 GAAP revenue less straight line rent adjustments for the indicated period. 2 Gross Leasable Area 55
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Hawaii Commercial Property Information Sheets Industrial Komohana Industrial Park 58 P&L Building 58 Port Allen 59 Waipio Industrial 59 Office Judd Building 60 Kahului Office Building 60 Kahului Office Center 61 Lono Center 61 Maui Clinic Building 62 Stangenwald Building 62 Retail Gateway at Mililani Mauka 63 Kahului Shopping Center 63 Kaneohe Bay Shopping Center 64 Kunia Shopping Center 64 Lahaina Square 65 Lanihau Marketplace 65 Maui Mall 66 Port Allen Marina Center 66 Waipio Shopping Center 67 57
Real Estate Leasing - Hawaii KOMOHANA INDUSTRIAL PARK TYPE GLA (IN SQ. FT.) Industrial 238,300 LOCATION Plus 29.4 acres leased to Oahu third-parties ACQUISITION DATE TOP TENANTS July 20, 2010 GP/RM Prestress LLC Simmons Manufacturing ACQUISITION PRICE S&K Sales Co. $37.7 million DATE CONSTRUCTED 1990 ($ IN THOUSANDS) 2 0 1 1 2 0 1 0 * 2 0 0 9 Gross Revenue 3,726 1,730 n/a OCCUPANCY AT 12/31/11 Cash NOI 2,883 1,363 n/a 81% Capital Improvements 167 - n/a Average Occupancy (%) 77 74 n/a * Partial year P & L BUILDING TYPE Industrial LOCATION Maui DEVELOPMENT DATE 1970 OCCUPANCY AT 12/31/11 96% GLA (IN SQ. FT.) ( $ IN THOUSANDS) 2011 2010 2009 104,100 Gross Revenue 1,292 1,276 1,450 TOP TENANTS Cash NOI 1,032 1,029 1,138 A-American Self Storage Alii Glass & Metal Capital Improvements 23 3 - Honsador Lumber Corporation Mary Charles & Associates Average Occupancy (%) 96 89 98 Maui Laminates 58
Real Estate Leasing - Hawaii PORT ALLEN TYPE Industrial LOCATION Kauai DEVELOPMENT DATE 1983 through 1993 OCCUPANCY AT 1 2 / 3 1 / 1 1 95% GLA (IN SQ. FT.) ($ IN THOUSANDS) 2011 2010 2009 63,800 Gross Revenue 684 683 688 T O P T E N A N T S Cash NOI 508 527 518 Aloha Professional Auto Body Kauai Island Brewing Company Capital Improvements 57 17 22 Lappert’s Inc. Nite Owl Average Occupancy (%) 94 90 98 Paradise Sports Wear WAIPIO INDUSTRIAL TYPE TOP TENANTS Industrial Arcadia Industries for the Blind LOCATION Oahu Painting & Decorating Oahu OfficeMax USC International ACQUISITION DATE March 4, 2009 ACQUISITION PRICE $28.3 million DATE CONSTRUCTED 1988-1989 ( $ IN THOUSANDS) 2011 2010 2009 * Gross Revenue 2,849 2,742 2,149 OCCUPANCY AT 12/31/11 Cash NOI 2,154 2,078 1,654 98% Capital Improvements 33 82 - GLA (IN SQ. FT.) 158,400 Average Occupancy (%) 98 97 92 * Partial year 59
Real Estate Leasing - Hawaii JUDD BUILDING TYPE TOP TENANTS Office Davis, Levin, Livingston, Grande Attorneys LOCATION RIM Architects Oahu ACQUISITION DATE June 26, 2000 ACQUISITION PRICE $3.1 million DATE CONSTRUCTED 1898, renovated 1979 ($ IN THOUSANDS) 2011 2010 2009 Gross Revenue 691 674 669 OCCUPANCY AT 12/31/11 Cash NOI 372 372 379 100% Capital Improvements - - - GLA (IN SQ. FT.) 20,200 Average Occupancy (%) 100 100 100 KAHULUI OFFICE BUILDING TYPE TOP TENANTS Office Bistro Casanova Central Pacific Bank LOCATION Hawaii Medical Service Maui Association Mancini, Welch & Geiger DEVELOPMENT DATE Law Firm 1974, renovated 1996 Morgan Stanley Smith Barney West Maui Land Co. OCCUPANCY AT 12/31/11 92% GLA (IN SQ. FT.) ($ IN THOUSANDS) 2011 2010 2009 58,300 Gross Revenue 2,163 2,006 2,200 Cash NOI 1,115 1,100 1,300 Capital Improvements 502 9 97 Average Occupancy (%) 92 85 85 60
Real Estate Leasing - Hawaii KAHULUI OFFICE CENTER TYPE Office LOCATION Maui DEVELOPMENT DATE 1991 OCCUPANCY AT 1 2 / 3 1 / 1 1 86% GLA (IN SQ. FT.) ($ IN THOUSANDS) 2011 2010 2009 32,900 Gross Revenue 1,007 1,148 1,241 TOP TENANTS Cash NOI 648 818 877 Blockbuster Video Finance Factors Capital Improvements 79 11 23 Hawaiiana Management Average Occupancy (%) 85 91 97 LONO CENTER TYPE TOP TENANTS Office Dr. James Hattaway D.C. Hawaii Dental Group LOCATION U.S. Coast Guard Maui ACQUISITION DATE January 9, 1991 ACQUISITION PRICE $1.4 million D A T E CONSTRUCTED 1973 ($ IN THOUSANDS) 2011 2010 2009 Gross Revenue 438 477 553 OCCUPANCY A T 12/31/11 Cash NOI 164 196 274 84% Capital Improvements 7 (8) 65 GLA (IN SQ. FT.) 13,400 Average Occupancy (%) 84 83 92 61
Real Estate Leasing - Hawaii MAUI CLINIC BUILDING TYPE TOP TENANTS Office Maui Clinic Pharmacy Maui Diagnostic Imaging LOCATION Physical Therapy and Wellness Maui Center ACQUISITION DATE December 1, 2008 (already owned, but ground leased to tenant, A&B took over at lease expiration on 12/1/08) DATE CONSTRUCTED 1958, renovated 2010 ($ IN THOUSANDS) 2 0 1 1 2 0 1 0 2 0 0 9 Gross Revenue 690 721 680 OCCUPANCY AT 12/31/11 Cash NOI 370 397 301 96% Capital Improvements 36 450 - GLA (IN SQ. FT.) 16,600 Average Occupancy (%) 98 92 86 STANGENWALD BUILDING TYPE TOP TENANTS Office Burke McPheeters Bordner and Estes LOCATION Mason Architects Oahu Mortgage Specialists The American Institute of ACQUISITION DATE Architects December 10, 1996 ACQUISITION PRICE $2.8 million DATE C O N S T R U C T E D 1901, renovated 1980 ($ IN THOUSANDS) 2011 2010 2009 Gross Revenue 762 761 654 OCCUPANCY AT 12/31/11 Cash NOI 351 384 284 87% Capital Improvements - 10 168 GLA (IN SQ. FT.) 27,100 Average Occupancy (%) 94 99 87 62
Real Estate Leasing - Hawaii GATEWAY AT MILILANI MAUKA TYPE Retail LOCATION Oahu ACQUISITION DATE December 29, 2011 ACQUISITION PRICE $8.2 million DATE CONSTRUCTED 2008, renovated 2011 ($ IN THOUSANDS) 2 0 1 1 * 2 0 1 0 2 0 0 9 OCCUPANCY AT Gross Revenue nm n/a n/a 12/31/11 Cash NOI nm n/a n/a 100% Capital Improvements nm n/a n/a GLA (IN SQ. FT.) 1 Acquisition price includes a 5,900 – current 4.3-acre development parcel. See development project information Average Occupancy (%) nm n/a n/a 28,400 – projected1 on page 22. * Acquired at year end KAHULUI SHOPPING CENTER TYPE Retail LOCATION Maui DEVELOPMENT DATE 1951 OCCUPANCY AT 12/31/11 66% GLA (IN SQ. FT.) ($ IN THOUSANDS) 2011 2010 2009 43,200 Gross Revenue 679 433 481 TOP TENANTS Cash NOI 231 29 53 Ah Fook’s Market Asian Cuisine Capital Improvements 10 385 9 Ichiban Restaurant Average Occupancy (%) 80 91 91 63
Real Estate Leasing - Hawaii KANEOHE BAY SHOPPING CENTER TYPE TOP TENANTS Retail Central Pacific Bank First Hawaiian Bank LOCATION Longs Drug Store Oahu Safeway ACQUISITION DATE June 8, 2001 ACQUISITION PRICE $13.3 million (leasehold) DATE CONSTRUCTED 1971, renovated 2008 ($ IN THOUSANDS) 2011 2010 2009 Gross Revenue 4,465 4,269 3,879 OCCUPANCY AT 12/31/11 Cash NOI 1,853 1,472 1,942 95% Capital Improvements 88 12 44 GLA (IN SQ. FT. ) 123,900 Average Occupancy (%) 97 99 100 KUNIA SHOPPING CENTER TYPE TOP TENANTS Retail Bank of Hawaii Cole Academy LOCATION Denny’s Oahu Jack In The Box Jamba Juice DEVELOPMENT DATE Starbucks 20041 OCCUPANCY AT 12/31/11 96% GLA (IN SQ. FT.) ($ IN THOUSANDS) 2011 2010 2009 60,400 Gross Revenue 2,849 2,791 3,075 Cash NOI 1,842 1,821 2,098 Capital Improvements 36 - - 1A&B was the original developer of the shopping center. See page 36 for more Average Occupancy (%) 90 90 96 information. 64
Real Estate Leasing - Hawaii LAHAINA SQUARE TYPE TOP TENANTS Retail Ace Hardware Maui Tacos LOCATION Maui ACQUISITION DATE November 5, 2010 ACQUISITION PRICE $4.9 million DATE CONSTRUCTED 1973 ($ IN THOUSANDS) 2011 2010 * 2009 Gross Revenue 900 147 n/a OCCUPANCY AT 12/31/11 Cash NOI 446 86 n/a 64% Capital Improvements 159 - n/a GLA (IN SQ. FT.) 50,200 Average Occupancy (%) 67 70 n/a * Partial year LANIHAU MARKETPLACE TYPE TOP TENANTS Retail American Savings Bank Bank of Hawaii LOCATION Longs Drug Store Hawaii Sack N Save Supercuts ACQUISITION DATE April 9, 2010 ACQUISITION PRICE $22.5 million DATE CONSTRUCTED 1987 ($ IN THOUSANDS) 2011 2010 * 2009 Gross Revenue 3,427 2,178 n/a OCCUPANCY AT 12/31/11 Cash NOI 2,224 1,380 n/a 99% Capital Improvements 26 78 n/a GLA (IN SQ. FT.) 88,300 Average Occupancy (%) 99 98 n/a * Partial year 65
Real Estate Leasing - Hawaii MAUI MALL TYPE Retail LOCATION Maui DEVELOPMENT DATE 1971, renovated 2010 OCCUPANCY AT 1 2 / 3 1 / 1 1 95% GLA (IN SQ. FT.) ($ IN THOUSANDS) 2011 2010 2009 185,700 Gross Revenue 4,538 4,270 3,794 TOP TENANTS Cash NOI 2,736 2,388 2,075 Checker’s Automotive IHOP Capital Improvements 660 1,402 524 Longs Drug Stores Wallace Theatres Average Occupancy (%) 94 92 91 Whole Foods PORT ALLEN MARINA CENTER. TYPE Retail LOCATION Kauai DEVELOPMENT DATE 2002 OCCUPANCY AT 12/31/11 77% GLA (IN SQ. FT.) ($ IN THOUSANDS) 2011 2010 2009 23,600 Gross Revenue 623 590 589 TOP TENANTS Cash NOI 421 383 392 Blue Dolphin Charters Captain Andy’s Capital Improvements 13 - 62 Holo Holo Charters Kauai Chocolate Company Average Occupancy (%) 77 78 83 Port Allen Bar & Grill 66
Real Estate Leasing - Hawaii WAIPIO SHOPPING CENTER TYPE TOP TENANTS Retail Aloha Gas Big City Diner LOCATION Foodland Oahu Jack-In-The-Box Outback Steakhouse ACQUISITION DATE September 4, 2009 ACQUISITION PRICE $30.9 million DATE CONSTRUCTED 1986-2004 ($ IN THOUSANDS) 2011 2010 2009 * Gross Revenue 4,174 3,874 1,375 OCCUPANCY AT 12/31/11 Cash NOI 2,863 2,603 982 97% Capital Improvements 67 88 20 GLA (IN SQ. FT.) 113,800 Average Occupancy (%) 98 98 98 * Partial year 67
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Mainland Commercial Property Information Sheets Industrial Activity Distribution Center 70 Centennial Plaza 70 Heritage Business Park 71 Midstate 99 Distribution Center 71 Northpoint Industrial 72 Republic Distribution Center 72 Savannah Logistics Park 73 Sparks Business Center 73 Office Concorde Commerce Center 74 Deer Valley Financial Center 74 Firestone Boulevard Building 75 Gateway Oaks 75 Issaquah Office Center 76 Ninigret Office Park 76 1800 and 1820 Preston Park 77 2868 Prospect Park 77 San Pedro Plaza 78 Union Bank 78 Retail Broadlands Marketplace 79 Little Cottonwood Center 79 Meadows on the Parkway 80 Rancho Temecula Town Center 80 Royal MacArthur Center 81 Wilshire Shopping Center 81 69
Real Estate Leasing - Mainland ACTIVITY DISTRIBUTION CENTER TYPE TOP TENANTS Industrial Beam One LLC Cold Pack Systems LOCATION Regal-Piedmont Plastics San Diego, California ACQUISITION DATE February 24, 2009 ACQUISITION PRICE $26.2 million DATE CONSTRUCTED 1991 ($ IN THOUSANDS) 2011 2010 2009 * Gross Revenue 2,573 2,183 2,363 OCCUPANCY AT 12/31/11 Cash NOI 1,963 1,608 1,825 100% Capital Improvements 275 544 28 GLA (IN SQ. FT.) 252,300 Average Occupancy (%) 92 85 92 * Partial year CENTENNIAL PLAZA TYPE TOP TENANTS Industrial JMH International Sulzer Pump LOCATION Salt Lake City, Utah ACQUISITION DATE September 4, 2003 ACQUISITION PRICE $7.9 million DATE CONSTRUCTED 1979 ($ IN THOUSANDS) 2011 2010 2009 Gross Revenue 1,219 1,206 1,239 OCCUPANCY AT 12/31/11 Cash NOI 909 900 955 87% Capital Improvements 157 6 106 GLA (IN SQ. FT. ) 244,000 Average Occupancy (%) 89 95 92 70
Real Estate Leasing - Mainland HERITAGE BUSINESS PARK TYPE TOP TENANTS Industrial Dallas Airmotive Dal-Tile LOCATION Hawker Beechcraft Dallas, Texas Henry Schein Mitsubishi Electric ACQUISITION DATE Rack Space November 1, 2007 ACQUISITION PRICE $102.0 million DATE CONSTRUCTED 1997-2002 ($ IN THOUSANDS) 2011 2010 2009 Gross Revenue 6,978 6,723 7,765 OCCUPANCY AT 12/31/11 Cash NOI 4,733 4,444 5,102 100% Capital Improvements 891 1,379 16 GLA (IN SQ. FT.) 1,316,400 Average Occupancy (%) 98 89 86 MIDSTATE 99 DISTRIBUTION CENTER TYPE GLA (IN SQ. FT.) Industrial 789,100 LOCATION TOP TENANTS Visalia, California Coast Distribution International Paper ACQUISITION DATE OnTrac Buildings 2/4: Sarnova November 14, 2008 Buildings 1/3: December 11, 2008 ACQUISITION PRICE Buildings 2/4: $19.7 million ($ IN THOUSANDS) 2011 2010 2009 Buildings 1/3: $15.5 million Gross Revenue 3,349 3,818 3,554 DATE CONSTRUCTED Cash NOI 2,530 3,031 2,849 2002-2008 Capital Improvements 63 413 22 OCCUPANCY AT 12/31/11 Average Occupancy (%) 92 96 97 85% 71
Real Estate Leasing - Mainland NORTHPOINT INDUSTRIAL TYPE TOP TENANTS Industrial Iron Mountain Records Management, Inc. LOCATION Meadowbrook Meat Company Fullerton, California ACQUISITION DATE August 26, 2009 ACQUISITION PRICE $11.2 million DATE CONSTRUCTED 1991 ($ IN THOUSANDS) 2011 2010 2009 * Gross Revenue 1,049 1,204 394 OCCUPANCY AT 12/31/11 Cash NOI 823 999 342 100% Capital Improvements 175 - - GLA (IN SQ. FT.) 119,400 Average Occupancy (%) 100 100 100 * Partial year REPUBLIC DISTRIBUTION CENTER TYPE TOP TENANTS Industrial Nestle Waters North America LOCATION Pasadena, Texas ACQUISITION DATE September 23, 2008 ACQUISITION PRICE $17.5 million DATE CONSTRUCTED 2007 ($ IN THOUSANDS) 2011 2010 2009 Gross Revenue 316 777 821 OCCUPANCY AT 12/31/11 Cash NOI (123) 281 326 100% Capital Improvements 20 1,607 53 GLA (IN SQ. FT. ) 312,500 Average Occupancy (%) 100 60 47 72
Real Estate Leasing - Mainland SAVANNAH LOGISTICS PARK TYPE GLA (IN SQ. FT.) Industrial 1,035,700 LOCATION TOP TENANTS Savannah, Georgia Matson Logistics Warehousing ACQUISITION DATE Building A: February 7, 2008 Building B: March 3, 2008 ACQUISITION PRICE Building A: $32.9 million Building B: $15.1 million ($ IN THOUSANDS) 2 0 1 1 2 0 1 0 2 0 0 9 DATE CONSTRUCTED Gross Revenue 4,491 3,956 3,427 2008 Cash NOI 3,483 2,977 2,462 OCCUPANCY AT 1 2 / 3 1 / 1 1 Capital Improvements 5 131 2,008 100% Average Occupancy (%) 100 80 76 SPARKS BUSINESS CENTER TYPE TOP TENANTS Industrial BSI Inspectorate America Corp. Golden Phoenix LOCATION St. Mary’s Health Group Sparks, Nevada State of Nevada ACQUISITION DATE December 23, 2002 ACQUISITION PRICE $20.1 million DATE CONSTRUCTED 1996-1998 ($ IN THOUSANDS) 2011 2010 2009 Gross Revenue 1,982 1,903 1,989 OCCUPANCY A T 12/31/11 Cash NOI 1,482 1,347 1,419 89% Capital Improvements 309 466 138 GLA (IN SQ. FT.) 396,100 Average Occupancy (%) 80 48 55 73
Real Estate Leasing - Mainland CONCORDE COMMERCE CENTER TYPE TOP TENANTS Office Cigna Fiserv Solutions LOCATION Jan-Pro Phoenix, AZ ACQUISITION DATE December 22, 2006 ACQUISITION PRICE $24.7 million DATE CONSTRUCTED 1998 ($ IN THOUSANDS) 2011 2010 2009 Gross Revenue 2,730 2,741 2,688 OCCUPANCY AT 12/31/11 Cash NOI 1,360 1,368 1,364 82% Capital Improvements 301 - 119 GLA (IN SQ. FT.) 140,700 Average Occupancy (%) 82 79 78 DEER VALLEY FINANCIAL CENTER TYPE TOP TENANTS Office Blackboard Campus Cooper Castle Law Firm, LLP LOCATION Viridian Health Management Phoenix, AZ ACQUISITION DATE June 7, 2005 ACQUISITION PRICE $22.3 million DATE CONSTRUCTED 2001 ($ IN THOUSANDS) 2011 2010 2009 Gross Revenue 1,364 477 2,313 OCCUPANCY AT 12/31/11 Cash NOI 328 (662) 1,144 70% Capital Improvements 228 1,465 59 GLA (IN SQ. FT.) 126,600 Average Occupancy (%) 68 73 75 74
Real Estate Leasing - Mainland FIRESTONE BOULEVARD BUILDING TYPE TOP TENANTS Office Siemens Hearing Instruments LOCATION La Mirada, California ACQUISITION DATE December 23, 2009 ACQUISITION PRICE $4.8 million DATE CONSTRUCTED 2002 ($ IN THOUSANDS) 2011 2010 2009 * Gross Revenue 547 541 12 OCCUPANCY AT 12/31/11 Cash NOI 480 484 12 100% Capital Improvements - - - GLA (IN SQ. FT.) 28,100 Average Occupancy (%) 100 100 100 * Partial year GATEWAY OAKS TYPE TOP TENANTS Office Gateway Deli IKON LOCATION University of Phoenix Sacramento, California ACQUISITION DATE June 14, 2006 ACQUISITION PRICE $12.3 million DATE CONSTRUCTED 1999 ($ IN THOUSANDS) 2011 2010 2009 Gross Revenue 1,273 1,304 1,473 OCCUPANCY AT 12/31/11 Cash NOI 677 753 916 86% Capital Improvements 9 - 27 GLA (IN SQ. FT.) 58,700 Average Occupancy (%) 86 88 100 75
Real Estate Leasing - Mainland ISSAQUAH OFFICE CENTER TYPE TOP TENANTS Office Siemens LOCATION Issaquah, Washington ACQUISITION DATE September 13, 2011 ACQUISITION PRICE $19.9 million DATE CONSTRUCTED 1994 ( $ IN THOUSANDS) 2011 * 2010 2009 Gross Revenue 630 n/a n/a OCCUPANCY AT 12/31/11 Cash NOI 626 n/a n/a 100% Capital Improvements - n/a n/a GLA (IN SQ. FT.) 146,900 Average Occupancy (%) 100 n/a n/a * Partial year NINIGRET OFFICE PARK TYPE TOP TENANTS Office BPR Bechtel FedEx LOCATION Silicon Valley Bank Salt Lake City, Utah Sun Products Teleperformance USA ACQUISITION DATE January 26, 2006 ACQUISITION PRICE $21.4 million DATE CONSTRUCTED 1999 & 2002, renovated 2010 ($ IN THOUSANDS) 2011 2010 2009 Gross Revenue 2,983 2,441 2,955 OCCUPANCY AT 12/31/11 Cash NOI 1,893 1,307 1,865 100% Capital Improvements 671 - 471 GLA (IN SQ. FT. ) 185,500 Average Occupancy (%) 99 97 99 76
Real Estate Leasing - Mainland 1800 AND 1820 PRESTON PARK TYPE TOP TENANTS Office American Flood Research Arrow Electronics LOCATION Batrus Hollweg International Plano, Texas CMA Pepsi Cola Company ACQUISITION DATE June 30, 2006 ACQUISITION PRICE $24.3 million DATE CONSTRUCTED 1997-1998, renovated 2010 ($ IN THOUSANDS) 2011 2010 2009 Gross Revenue 3,107 2,678 3,285 OCCUPANCY AT 12/31/11 Cash NOI 1,401 1,021 1,725 89% Capital Improvements 499 373 482 GLA (IN SQ. FT.) 198,800 Average Occupancy (%) 83 82 82 2868 PROSPECT PARK TYPE TOP TENANTS Office Cisco GEI LOCATION Sacramento, California ACQUISITION DATE August 25, 1998 ACQUISITION PRICE $20.6 million DATE CONSTRUCTED 1998, renovated 2008 ($ IN THOUSANDS) 2011 2010 2009 Gross Revenue 2,258 3,276 4,221 OCCUPANCY AT 12/31/11 Cash NOI 1,064 1,868 2,802 65% Capital Improvements 1,070 82 92 GLA (IN SQ. FT.) 162,900 Average Occupancy (%) 77 100 100 77
Real Estate Leasing - Mainland SAN PEDRO PLAZA TYPE GLA (IN SQ. FT.) Office 163,800 (office) 8,100 (retail) LOCATION San Antonio, Texas TOP TENANTS El Paso Energy Services ACQUISITION DATE Reata Real Estate June 4, 1998 (office) Rosenbaum Law Services September 14, 2000 (retail) Southwest Home Health Care Starbucks ACQUISITION PRICE $15.3 million (office) $1.1 million (retail) ($ IN THOUSANDS) 2 0 1 1 2 0 1 0 2 0 0 9 DATE CONSTRUCTED Gross Revenue 2,270 1,927 2,824 1985 Cash NOI 875 507 1,347 OCCUPANCY AT 12/31/11 Capital Improvements 419 780 389 80% Average Occupancy (%) 77 67 70 UNION BANK TYPE TOP TENANTS Office Union Bank LOCATION Everett, Washington ACQUISITION D A T E June 7, 2011 ACQUISITION PRICE $10.9 million DATE CONSTRUCTED 1993 & 2008 ($ IN THOUSANDS) 2011 * 2010 2009 Gross Revenue 749 n/a n/a OCCUPANCY AT 12/31/11 Cash NOI 727 n/a n/a 100% Capital Improvements - n/a n/a GLA (IN SQ. FT.) 84,000 Average Occupancy (%) 100 n/a n/a * Partial year 78
Real Estate Leasing - Mainland BROADLANDS MARKETPLACE TYPE TOP TENANTS Retail H&R Block Muttz Pet Foods LOCATION Safeway Broomfield, Colorado Subway ACQUISITION DATE October 15, 2003 ACQUISITION PRICE $10.8 million DATE CONSTRUCTED 2002 ($ IN THOUSANDS) 2011 2010 2009 Gross Revenue 1,485 1,466 1,326 OCCUPANCY AT 12/31/11 Cash NOI 714 732 1,039 91% Capital Improvements 80 2 143 GLA (IN SQ. FT.) 103,900 Average Occupancy (%) 90 90 88 LITTLE COTTONWOOD CENTER TYPE TOPTENANTS Retail Albertson’s Starbucks LOCATION McDonald’s Sandy, Utah Quiznos Washington Mutual ACQUISITION DATE October 26, 2010 ACQUISITION PRICE $20.8 million DATE CONSTRUCTED 1998-2008 ($ IN THOUSANDS) 2 0 1 1 2 0 1 0 * 2 0 0 9 Gross Revenue 2,106 353 n/a OCCUPANCY AT 12/31/11 Cash NOI 1,405 239 n/a 94% Capital Improvements 79 - n/a GLA ( IN SQ. FT. ) 141,600 Average Occupancy (%) 95 96 n/a * Partial year 79
Real Estate Leasing - Mainland MEADOWS ON THE PARKWAY TYPE TOP TENANTS Retail Michaels Stores REMAX Real Estate LOCATION Rite-Aid Drugs Boulder, Colorado Safeway ACQUISITION DATE January 21, 2010 ACQUISITION PRICE $30.8 million DATE CONSTRUCTED 1989 ($ IN THOUSANDS) 2011 2010 * 2009 Gross Revenue 4,159 3,456 n/a OCCUPANCY AT 12/31/11 Cash NOI 2,661 2,169 n/a 79% Capital Improvements 221 60 n/a GLA (IN SQ. FT.) 216,400 Average Occupancy (%) 79 83 n/a * Partial year RANCHO TEMECULA TOWN CENTER TYPE TOP TENANTS Retail Bev-Mo Bruegger’s Bagel LOCATION Henry’s Farmers Market Temecula, California LA Fitness Starbucks ACQUISITION DATE November 24, 2010 ACQUISITION PRICE $48.9 million DATE CONSTRUCTED 2007 ($ IN THOUSANDS) 2 0 1 1 2 0 1 0 * 2 0 0 9 Gross Revenue 3,882 387 n/a OCCUPANCY AT 12/31/11 Cash NOI 2,721 298 n/a 91% Capital Improvements 15 - n/a GLA (IN SQ. FT.) 165,500 Average Occupancy (%) 95 97 n/a * Partial year 80
Real Estate Leasing - Mainland ROYAL MACARTHUR CENTER TYPE TOP TENANTS Retail Citibank Five Guys Burgers LOCATION Jamba Juice Dallas, Texas La Madeleine Scottrade ACQUISITION DATE March 1, 2007 ACQUISITION PRICE $13.5 million DATE CONSTRUCTED 2006 ($ IN THOUSANDS) 2011 2010 2009 Gross Revenue 1,212 1,298 1,360 OCCUPANCY AT 12/31/11 Cash NOI 675 750 824 89% Capital Improvements 184 430 97 GLA (IN SQ. FT.) 44,100 Average Occupancy (%) 81 91 89 WILSHIRE SHOPPING CENTER TYPE TOP TENANTS Retail Dollar Tree Kentucky Fried Chicken LOCATION McDonald’s Greeley, Colorado Sherwin-Williams ACQUISITION DATE March 19, 1997 ACQUISITION PRICE $2.5 million DATE CONSTRUCTED 1970 ($ IN THOUSANDS) 2011 2010 2009 Gross Revenue 367 386 435 OCCUPANCY AT 12/31/11 Cash NOI 223 257 291 57% Capital Improvements - - 13 GLA (IN SQ. FT.) 46,500 Average Occupancy (%) 66 77 84 81
Where to Find Additional Information This communication does not constitute an offer to sell or the solicitation of an offer to buy any securities or a solicitation of any vote or approval. Alexander & Baldwin Holdings, Inc. (“Holdings”) filed a registration statement that includes a preliminary proxy statement/prospectus and other relevant documents in connection with the proposed reorganization on February 15, 2012. ALEXANDER & BALDWIN, INC. (“A&B”) SHAREHOLDERS ARE URGED TO CAREFULLY READ THESE DOCUMENTS AND THE DEFINITIVE PROXY STATEMENT/PROSPECTUS, WHEN FILED AND MAILED, BECAUSE THEY CONTAIN AND WILL CONTAIN IMPORTANT INFORMATION ABOUT THE PROPOSED REORGANIZATION. The definitive proxy statement/prospectus will be mailed to A&B shareholders prior to the shareholder meeting. In addition, investors may obtain a free copy of the preliminary proxy statement/prospectus and other filings containing information about A&B, Holdings, and the holding company reorganization, from the SEC at the SEC’s website at http://www.sec.gov. In addition, copies of the preliminary proxy statement/prospectus and other filings containing information about A&B, Holdings, and the holding company reorganization can be obtained without charge by sending a request to Alexander & Baldwin, Inc., P.O. Box 3440, Honolulu, Hawaii 96801-3440, Attention: Investor Relations; by calling (808) 525-6611; or by accessing them on A&B’s web site at http://www.alexanderbaldwin.com. Participants in the Merger Solicitation A&B, its directors, executive officers, certain other members of management, and employees may be deemed to be participants in the solicitation of proxies from the shareholders of A&B in favor of the proposed holding company reorganization. Additional information regarding the interests of potential participants in the proxy solicitation is included in the preliminary proxy statement/prospectus and will be included in the definitive proxy statement/prospectus and other relevant documents that A&B and Holdings intend to file with the SEC in connection with the annual meeting of shareholders of A&B. 82