Alexander & Baldwin, Inc. Reports Second Quarter 2024 Results

HONOLULU, July 25, 2024 -- Alexander & Baldwin, Inc. (NYSE: ALEX) ("A&B" or "Company"), a Hawai'i-based owner, operator and developer of high-quality commercial real estate in Hawai'i, today announced net income available to A&B common shareholders of $9.1 million, or $0.13 per diluted share, and Commercial Real Estate ("CRE") operating profit of $22.6 million for the second quarter of 2024.

Q2 2024 Highlights

• Funds From Operations ("FFO") of $20.6 million, or $0.28 per diluted share / Adjusted FFO of $16.9 million, or $0.23 per diluted share
• CRE Same-Store Net Operating Income ("NOI") growth of 0.9% / CRE Same-Store NOI growth of 1.7% excluding collections of prior year reserves
• Leased occupancy as of June 30, 2024, was 93.9%
• Comparable blended leasing spreads for the improved portfolio were 7.3%

Lance Parker, president and chief executive officer, stated: "I am encouraged by our performance during the second quarter. Our portfolio continued to demonstrate organic growth and leasing demand was healthy. We took steps to fully fix the interest rate of our debt, strengthening our balance sheet and providing ample liquidity to pursue investment opportunities as they arise. We continued our non-core land disposition efforts and made meaningful progress toward reducing G&A. As a result of our year-to-date performance and improved outlook, we are raising our 2024 guidance."

Financial Results for Q2 2024

• Net income available to A&B common shareholders and diluted earnings per share available to A&B shareholders for the second quarter of 2024 were $9.1 million and $0.13 per diluted share, respectively, compared to $13.3 million and $0.18 per diluted share in the same quarter of 2023.
• Income from continuing operations available to A&B shareholders for the second quarter of 2024 was $11.7 million, or $0.16 per diluted share, compared to $10.8 million, or $0.15 per diluted share, in the same quarter of 2023.
• FFO and FFO per diluted share for the second quarter of 2024 were $20.6 million and $0.28 per diluted share, respectively, compared to $19.8 million and $0.27 per diluted share in the same quarter of 2023.
• Adjusted FFO and Adjusted FFO per diluted share for the second quarter of 2024 were $16.9 million and $0.23 per diluted share, respectively, compared to $18.0 million and $0.25 per diluted share in the same quarter of 2023.
• Selling, general and administrative expense decreased by $2.7 million, or 26.8%, to $7.3 million, from $9.9 million in the same quarter of 2023.

CRE Highlights for Q2 2024

• CRE operating revenue for the second quarter of 2024 decreased by $0.3 million, or 0.6%, to $49.2 million, from $49.5 million in the same quarter of 2023.
• CRE operating profit for the second quarter of 2024 decreased by $0.1 million, or 0.4%, to $22.6 million, from $22.7 million in the same quarter of 2023.
• CRE NOI for the second quarter of 2024 increased by $0.3 million, or 1.1%, to $31.6 million, from $31.3 million in the same quarter of 2023.
• CRE Same-Store NOI for the second quarter of 2024 increased by $0.3 million, or 0.9%, to $31.5 million, from $31.2 million in the same quarter of 2023.
• Collections of prior year reserves in the second quarter of 2024 were $0.4 million compared to $0.6 million in the same quarter of 2023.
• During the second quarter of 2024, the Company executed a total of 47 improved-property leases, covering approximately 96,300 square feet of gross leasable area ("GLA").
• Comparable leasing spreads in our improved property portfolio were 7.3% for the second quarter of 2024, which included 7.7% for retail spaces and 7.6% for industrial spaces.
• Leasing activity related to our improved property portfolio during the second quarter of 2024 included:
  • 13 leases related to properties located in Kailua, including Aikahi Park Shopping Center, totaling approximately 15,000 square feet of GLA and $0.7 million of annualized base rent ("ABR").
  • Six leases at Manoa Marketplace totaling approximately 10,000 square feet of GLA and $0.4 million of ABR.
  • Two leases at P&L Warehouse totaling approximately 20,000 square feet of GLA and $0.3 million of ABR.
• Overall leased occupancy was 93.9% as of June 30, 2024, a decrease of 50 basis points compared to June 30, 2023, and a decrease of 10 basis points compared to March 31, 2024.
  • Leased occupancy in the retail portfolio was 92.8% as of June 30, 2024, a decrease of 120 basis points compared to June 30, 2023, and a decrease of 40 basis points compared to March 31, 2024.
  • Leased occupancy in the industrial portfolio was 97.1% as of June 30, 2024, an increase of 120 basis points compared to June 30, 2023, and an increase of 30 basis points compared to March 31, 2024.
• Same-Store leased occupancy was 94.8% as of June 30, 2024, a decrease of 50 basis points compared to June 30, 2023, and a decrease of 20 basis points compared to March 31, 2024.
  • Same-Store leased occupancy in the retail portfolio was 94.0% as of June 30, 2024, a decrease of 130 basis points compared to June 30, 2023, and a decrease of 40 basis points compared to March 31, 2024.
  • Same-Store leased occupancy in the industrial portfolio was 97.0% as of June 30, 2024, an increase of 120 basis points compared to June 30, 2023, and an increase of 20 basis points compared to March 31, 2024.

CRE Investment Activity for Q2 2024

• In the second quarter of 2024, the Company began permitting a 29,550-square-foot warehouse and distribution center at Maui Business Park II. The single-user space includes 32' clear height and can accommodate up to 14 dock-high loading bays. Construction of this pre-leased space will begin in the second half of 2024, with an in-service date expected in the fourth quarter of 2025.

Land Operations

• Land Operations operating profit was $0.2 million for the quarter ended June 30, 2024, compared to an operating profit of $1.7 million for the quarter ended June 30, 2023.
• As of June 30, 2024, the Company was under contract to sell an 81-acre residential-zoned parcel on Maui for approximately $10.5 million. The sale closed on July 3, 2024, and resulted in margin of approximately $5.2 million.

Balance Sheet, Market Value and Liquidity

• As of June 30, 2024, the Company had an equity market capitalization of $1.2 billion and $469.8 million in total debt, for a total market capitalization of approximately $1.7 billion. The Company's debt-to-total market capitalization was 27.6% as of June 30, 2024. The Company's debt has a weighted-average maturity of 3.1 years.
• On April 15, 2024, the Company completed the issuance of a $60.0 million unsecured private placement note (the "Note"). The Note has a coupon rate of 6.09% and matures on April 15, 2032. Interest only is paid semi-annually and the principal balance is due at maturity. Proceeds from the Note were used to pay down the mortgage note secured by Laulani Village when it matured on May 1, 2024, and for general corporate purposes.
• Including the effects of interest rate swaps, at quarter end, all of the Company's debt was at fixed rates, with a weighted-average interest rate of 4.75%.
• As of June 30, 2024, the Company had total liquidity of $472.5 million, consisting of cash on hand of $29.5 million and $443.0 million available on its revolving line of credit.
• Net Debt to Trailing Twelve Months ("TTM") Consolidated Adjusted EBITDA was 3.7 times as of June 30, 2024, with TTM Consolidated Adjusted EBITDA of $118.7 million for the period ended June 30, 2024.

Dividend

• The Company paid a second quarter 2024 dividend of $0.2225 per share on July 8, 2024.
• The Company's Board declared a third quarter 2024 dividend of $0.2225 per share, payable on October 7, 2024, to shareholders of record as of the close of business on September 20, 2024.

ABOUT ALEXANDER & BALDWIN

Alexander & Baldwin, Inc. (NYSE: ALEX) (A&B) is the only publicly-traded real estate investment trust to focus exclusively on Hawai'i commercial real estate and is the state's largest owner of grocery-anchored, neighborhood shopping centers. A&B owns, operates and manages approximately 3.9 million square feet of commercial space in Hawai'i, including 22 retail centers, 13 industrial assets and four office properties, as well as 142.0 acres of ground lease assets. Over its 154-year history, A&B has evolved with the state's economy and played a leadership role in the development of the agricultural, transportation, tourism, construction, residential and commercial real estate industries.

Learn more about A&B at www.alexanderbaldwin.com.