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Form 8-K Alexander & Baldwin, For: May 06

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May 7, 2015 4:22 PM EDT


 




UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D. C. 20549
 
______________
 
 
FORM 8-K
 
______________
 
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934

Date of Report (Date of earliest event reported):  May 7, 2015

ALEXANDER & BALDWIN, INC.
(Exact name of registrant as specified in its charter)

Hawaii
001-35492
45-4849780
(State or other jurisdiction of incorporation)
(Commission File Number)
(I.R.S. Employer
Identification No.)

822 Bishop Street, P. O. Box 3440
Honolulu, Hawaii 96801
(Address of principal executive office and zip code)

(808) 525-6611
(Registrant’s telephone number, including area code)

Not Applicable
(Former Name or Former Address, if Changed Since Last Report)

 
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2.):

 
o
Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
o
Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
o
Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
o
Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

 





Item 7.01.  Regulation FD Disclosure.

On May 7, 2015, Alexander & Baldwin, Inc. made available on its website its Real Estate Supplement Update, which provides certain supplemental operating and financial information for its Real Estate operating segments for the quarters ended March 31, 2015 and 2014. A copy of this Real Estate Supplement Update is being furnished as Exhibit 99.1 to this report.

Item 9.01.  Financial Statements and Exhibits.

(d)           Exhibits

99.1

Alexander & Baldwin, Inc.’s Real Estate Supplement Update, as of and for the quarters ended March 31, 2015 and 2014.




SIGNATURE


Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

Date:  May 7, 2015

ALEXANDER & BALDWIN, INC.


/s/ Paul K. Ito                                                    
Paul K. Ito
Senior Vice President, Chief Financial Officer,
Treasurer and Controller





ALEXANDER & BALDWIN, INC.’S REAL ESTATE SUPPLEMENT UPDATE

FIRST QUARTER 2015
(Unaudited)




About This Supplement Update

This periodic Supplement Update is designed to provide current and potential shareholders of Alexander & Baldwin, Inc. with additional information regarding the Company’s Real Estate operating segments. This information is supplemental to and does not replace the information provided to shareholders in the Company’s periodic filings with the Securities and Exchange Commission.
This First Quarter 2015 Supplement updates Tables 7-15 of the Company’s 2014 Real Estate Supplement.
The information contained in this Supplement Update is unaudited and should be read in conjunction with the Company’s 2014 Real Estate Supplement, 2014 Form 10-K and other filings with the SEC through the date of this Supplement Update.
Feedback and suggestions regarding the contents of this Supplement Update are welcomed, and should be directed to Suzy P. Hollinger, Director, Investor Relations, via telephone at (808) 525-8422 or via email to [email protected].







Alexander & Baldwin, Inc. | Real Estate Supplement Update

INDEX TO REAL ESTATE SUPPLEMENT UPDATE
(Unaudited)
FIRST QUARTER 2015
 


Forward-Looking Statements
Basis of Presentation
Real Estate Leasing Segment – Asset Descriptions and Statistics
Property Detail – Hawaii (Table 7)
Property Detail – Mainland (Table 8)
Comparable % Occupancy Data by Geographic Region and
Asset Class (Table 9)
Weighted Average Gross Leasable Area by Geographic
Region and Asset Class (Table 10)
Occupancy Analysis Trend – Last Five Quarters (Table 11)
Real Estate Leasing Net Operating Income (NOI) (Table 12)
Real Estate Leasing Same Store NOI (Table 13)
Statement on Management’s Use of Non-GAAP Financial Measures
Reconciliation of Real Estate Leasing Operating Profit to NOI and
Same Store NOI (Table 14)
Portfolio Acquisitions and Dispositions
2015 and 2014 Improved Property Portfolio Acquisitions/Dispositions (Table 15)
 
 
 
 
 
 
 
 
 
 





1

Forward-Looking Statements

Statements in this Supplement Update that are not historical facts are “forward-looking statements,” within the meaning of the Private Securities Litigation Reform Act of 1995, that involve a number of risks and uncertainties that could cause actual results to differ materially from those contemplated by the relevant forward-looking statement. These forward-looking statements are not guarantees of future performance. This Supplement Update should be read in conjunction with pages 17-30 of Alexander & Baldwin, Inc.’s 2014 Form 10-K and other filings with the SEC through the date of this Supplement Update, which identify important factors that could affect the forward-looking statements in this Supplement Update. We do not undertake any obligation to update our forward-looking statements.

Basis of Presentation

The information contained in this Supplement Update does not purport to disclose all items required by accounting principles generally accepted in the United States of America (GAAP). The information contained in this Supplement Update is unaudited and should be read in conjunction with Alexander & Baldwin, Inc.’s 2014 Real Estate Supplement, 2014 Form 10-K and other filings with the SEC through the date of this Supplement Update.

2



Real Estate Leasing Segment – Asset Descriptions and Statistics
TABLE 7
PROPERTY DETAIL - HAWAII
Property
Number of properties at 3/31/15
Island
Gross leasable area at 3/31/15 (sq. ft.)
Leased1        (percent)
Outstanding
debt
($ in 000s)
1Q 2015 NOI2 ($ in 000s)
1Q 2015 % NOI to total Hawaii portfolio
Retail:
 
 
 
 
 
 
 
Pearl Highlands Center
1

Oahu
415,400

97

$
93,130

$
2,411

14.8

Kailua Retail
15

Oahu
316,300

96

11,133

2,422

14.9

Waianae Mall
1

Oahu
170,300

89

18,939

672

4.1

Kaneohe Bay Shopping Center3
1

Oahu
125,100

99

—

551

3.4

Waipio Shopping Center
1

Oahu
113,800

95

—

800

4.9

Lanihau Marketplace
1

Hawaii
88,300

99

—

447

2.8

The Shops at Kukui'ula
1

Kauai
78,900

92

39,628

687

4.2

Kunia Shopping Center
1

Oahu
60,400

93

—

584

3.6

Lahaina Square
1

Maui
50,200

79

—

157

1.0

Kahului Shopping Center
1

Maui
49,700

99

—

131

0.8

Napili Plaza
1

Maui
45,700

87

—

264

1.6

Port Allen Marina Center
1

Kauai
23,600

76

—

111

0.7

Gateway at Mililani Mauka
1

Oahu
18,900

87

—

264

1.6

Subtotal – Retail
27

 
1,556,600

94

$
162,830

9,501

58.4

 
 
 
 
 
 
 
 
Industrial:
 
 
 
 
 
 
 
Komohana Industrial Park4
1

Oahu
238,300

100

$
—

$
994

6.1

Kakaako Commerce Center
1

Oahu
204,400

90

—

541

3.3

Waipio Industrial
1

Oahu
158,400

99

—

541

3.3

P&L Building
1

Maui
104,100

96

—

299

1.8

Kailua Industrial/Other
6

Oahu
68,800

99

—

157

1.0

Port Allen
3

Kauai
63,800

87

—

140

0.9

Subtotal – Industrial
13

 
837,800

96

$
—

$
2,672

16.4

 
 
 
 
 
 
 
 
Office:
 
 
 
 
 
 
 
Kahului Office Building
1

Maui
59,600

83

$
—

$
365

2.2

Kahului Office Center
1

Maui
33,400

90

—

187

1.2

Stangenwald Building
1

Oahu
27,100

88

—

95

0.6

Judd Building
1

Oahu
20,200

64

—

31

0.2

Gateway at Mililani Mauka South
1

Oahu
18,700

100

—

166

1.0

Maui Clinic Building
1

Maui
16,600

53

—

35

0.2

Lono Center
1

Maui
13,700

89

—

60

0.4

Subtotal – Office
7

 
189,300

82

$
—

$
939

5.8

Table 7 continued on the next page.

3

Property
Number of properties at 3/31/15
Island
Gross leasable area at 3/31/15 (sq. ft.)
Leased1        (percent)
Outstanding
debt
($ in 000s)
1Q 2015 NOI2 ($ in 000s)
1Q 2015 % NOI to total Hawaii portfolio
 
 
 
 
 
 
 
 
Ground Leases
 
 
 
 
 
 
 
Kailua
28 acres

Oahu
—

 
$
—

$
1,065

6.5

Other Oahu
23 acres

Oahu
—

 
—

1,203

7.4

Neighbor Island
2,818 acres5

Neighbor Island
—

 
—

900

5.5

Subtotal - Ground Leases
 2,869 acres

 
—

 
$
—

$
3,168

19.4

Total Hawaii
47

 
2,583,700

94

$
162,830

$
16,280

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 8 for a statement regarding the Company’s use of non-GAAP financial measures and a reconciliation of Leasing operating profit to NOI for the total portfolio.
3 
Kaneohe Bay Shopping Center is a leasehold property.
4 
Includes ground leased income.
5 
Represents 64 of ground leased urban acres.

Note: For portfolio asset class and geographic occupancy see Table 9 on page 6. Gross leasable area is periodically adjusted based on remeasurement or reconfiguration of space.

4


TABLE 8
PROPERTY DETAIL - MAINLAND
Property
Number of properties at 3/31/15
Location
Gross leasable area at 3/31/15 (sq. ft.)
Leased1     (percent)
Outstanding
debt
($ in 000s)
1Q 2015 NOI2 ($ in 000s)
1Q 2015 % NOI to total Mainland portfolio
Retail:
 
 
 
 
 
 
 
Little Cottonwood Center
1

Sandy, UT
141,500

94

$
—

$
353

7.8

Royal MacArthur Center
1

Dallas, TX
44,800

94

—

245

5.4

Subtotal – Retail
2

 
186,300

91

$
—

$
598

13.2

 
 
 
 
 
 
 
 
Industrial:
 
 
 
 
 
 
 
Midstate Hayes
1

Visalia, CA
790,200

100

$
8,261

$
754

16.6

Sparks Business Center
1

Sparks, NV
396,100

100

—

486

10.7

Subtotal – Industrial
2

 
1,186,300

100

$
8,261

$
1,240

27.3

 
 
 
 
 
 
 
 
Office:
 
 
 
 
 
 
 
Concorde Commerce Center
1

Phoenix, AZ
138,700

94

$
—

$
460

10.1

Deer Valley Financial Center
1

Phoenix, AZ
126,600

75

—

188

4.1

Gateway Oaks
1

Sacramento, CA
59,700

92

—

75

1.7

Ninigret Office Park
1

Salt Lake City, UT
185,500

100

—

448

9.9

1800 and 1820 Preston Park
1

Plano, TX
198,800

89

—

480

10.5

2868 Prospect Park
1

Sacramento, CA
163,300

100

—

531

11.7

San Pedro Plaza
1

San Antonio, TX
171,900

68

—

173

3.8

Union Bank
1

Everett, WA
84,000

100

—

350

7.7

Subtotal – Office
8

 
1,128,500

89

$
—

$
2,705

59.5

 
 
 
 
 
 
 
 
Total Mainland
12

 
2,501,100

94

$
8,261

$
4,543

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 8 for a statement regarding the Company’s use of non-GAAP financial measures and a reconciliation of Leasing operating profit to NOI for the total portfolio.


Note: For portfolio asset class and geographic occupancy see Table 9 on page 6. Gross leasable area is periodically adjusted based on remeasurement or reconfiguration of space.





5

TABLE 9
COMPARABLE % OCCUPANCY DATA BY GEOGRAPHIC REGION AND ASSET CLASS
 
1Q 2015
1Q 2014
Percentage point change
Location
Retail
Industrial
Office
Total
Retail
Industrial
Office
Total
Retail
Industrial
Office
Total
Hawaii improved
94

96

82

94

93

99

81

94

1

(3
)
1

—

Mainland improved
91

100

89

94

90

100

87

93

1

—

2

1

Total
94

98

88

94

93

100

86

93

1

(2
)
2

1



TABLE 10
WEIGHTED AVERAGE GROSS LEASABLE AREA BY GEOGRAPHIC REGION AND ASSET CLASS1
 
1Q 2015 (in sq. ft.)
1Q 2014 (in sq. ft.)
Percentage Change
Location
Retail
Industrial
Office
Total
Retail
Industrial
Office
Total
Retail
Industrial
Office
Total
Hawaii improved
1,556,600

837,800

189,300

2,583,700

1,553,400

633,400

189,000

2,375,800

0.2

32.3

0.2

8.8

Mainland improved
217,300

1,186,300

1,128,500

2,532,100

232,800

1,186,300

1,127,100

2,546,200

(6.7
)
—

0.1

(0.6
)
Total
1,773,900

2,024,100

1,317,800

5,115,800

1,786,200

1,819,700

1,316,100

4,922,000

(0.7
)
11.2

0.1

3.9



TABLE 11
OCCUPANCY ANALYSIS TREND – LAST FIVE QUARTERS2 
 
1Q 2015
4Q 2014
3Q 2014
2Q 2014
1Q 2014
 
Number of Properties
Weighted Average
sq. ft.
Percent Leased
Number of Properties
Weighted Average
sq. ft.
Percent Leased
Number of Properties
Weighted Average
sq. ft.
Percent Leased
Number of Properties
Weighted Average
sq. ft.
Percent Leased
Number of Properties
Weighted Average
sq. ft.
Percent Leased
Retail
29

1,773,900

94

30

1,786,200

93

30

1,786,200

92

30

1,786,200

92

30

1,786,200

93

Industrial
15

2,024,100

98

15

1,887,900

99

14

1,819,700

99

14

1,819,700

98

14

1,819,700

100

Office
15

1,317,800

88

15

1,316,100

88

15

1,316,100

88

15

1,316,100

88

15

1,316,100

86

Total
59

5,115,800

94

60

4,990,200

94

59

4,922,000

94

59

4,922,000

93

59

4,922,000

93


1 Number of properties is as of quarter end.

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



6


TABLE 12
REAL ESTATE LEASING NET OPERATING INCOME (NOI)  
(in millions)
 
1Q 2015
1Q 2014
Percentage Change
Location
Retail
Industrial
Office
Total
Retail
Industrial
Office
Total
Retail
Industrial
Office
Total
Hawaii improved
$
9.5

$
2.7

$
0.9

$
13.1

$
9.2

$
2.1

$
0.7

$
12.0

3.3

28.6

28.6

9.2

Hawaii unimproved
—

—

—

3.2

—

—

—

3.2

—

—

—

—

Total Hawaii
$
9.5

$
2.7

$
0.9

$
16.3

$
9.2

$
2.1

$
0.7

$
15.2

3.3

28.6

28.6

7.2

Mainland improved
0.7

1.2

2.7

4.6

0.6

1.2

2.6

4.4

16.7

—

3.8

4.5

Total
$
10.2

$
3.9

$
3.6

$
20.9

$
9.8

$
3.3

$
3.3

$
19.6

4.1

18.2

9.1

6.6



TABLE 13
REAL ESTATE LEASING SAME STORE NOI1 
(in millions)
 
1Q 2015
1Q 2014
Percentage Change
Location
Retail
Industrial
Office
Total
Retail
Industrial
Office
Total
Retail
Industrial
Office
Total
Hawaii improved
$
9.5

$
2.1

$
0.9

$
12.5

$
9.0

$
2.1

$
0.7

$
11.8

5.6

—

28.6

5.9

Hawaii unimproved
—

—

—

3.2

—

—

—

3.2

—

—

—

—

Total Hawaii
$
9.5

$
2.1

$
0.9

$
15.7

$
9.0

$
2.1

$
0.7

$
15.0

5.6

—

28.6

4.7

Mainland improved
0.7

1.2

2.7

4.6

0.6

1.2

2.6

4.4

16.7

—

3.8

4.5

Total
$
10.2

$
3.3

$
3.6

$
20.3

$
9.6

$
3.3

$
3.3

$
19.4

6.3

—

9.1

4.6



1 Same Store NOI relates to properties that were operated throughout the duration of both periods under comparison.
Note: See page 8 for a statement on the Company’s use of non-GAAP financial measures and a reconciliation of Leasing operating profit to Real Estate Leasing NOI and Real Estate Leasing same store NOI.


7

Statement on Management’s Use of Non-GAAP Financial Measures
Net operating income (NOI) is a non-GAAP measure derived from real estate revenues (determined in accordance with GAAP, less straight-line rental adjustments) minus property operating expenses (determined in accordance with GAAP). NOI does not have any standardized meaning prescribed by GAAP, and therefore, may differ from definitions of NOI used by other companies. NOI should not be considered as an alternative to net income (determined in accordance with GAAP) as an indicator of the Company’s financial performance, or as an alternative to cash flow from operating activities as a measure of the Company’s liquidity. NOI is commonly used as a measure of operating performance because it is an indicator of the return on property investment, and provides a method of comparing property performance over time. NOI excludes general and administrative expenses, straight-line rental adjustments, interest income, interest expense, depreciation and amortization, and gains on sales of interests in real estate. The Company believes that the Real Estate Leasing segment’s operating profit after discontinued operations is the most directly comparable GAAP measurement to NOI. A reconciliation of Real Estate Leasing operating profit to Real Estate Leasing segment NOI and same store NOI is as follows:
TABLE 14
RECONCILIATION OF REAL ESTATE OPERATING PROFIT TO NOI AND SAME STORE NOI (NON-GAAP)
(in millions)
 
1Q 2015
1Q 2014
Real Estate Leasing segment operating profit before discontinued operations
$
13.2

$
11.8

Less amounts reported in discontinued operations
—

(0.3
)
Real Estate Leasing segment operating profit after subtracting discontinued operations
$
13.2

$
11.5

Adjustments:
 
 
Depreciation and amortization
$
7.2

$
7.1

Straight-line lease adjustments
(0.6
)
(0.5
)
General and administrative expense
1.1

1.2

Discontinued operations
—

0.3

Real Estate Leasing total NOI
$
20.9

$
19.6

Acquisitions/ disposition and other adjustments
(0.6
)
(0.2
)
Real Estate Leasing segment same store NOI1
$
20.3

$
19.4



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


8


Portfolio Acquisitions and Dispositions

TABLE 15
2015 PROPERTY PORTFOLIO ACQUISITIONS/DISPOSITIONS
Property disposed in 2015
Disposition date
(month/year)
 Disposition price
(in millions)
 Gross leasable area (sq. ft.)
Leased percentage at disposition
Wilshire Shopping Center
3/15
$
4

46,500
72


2014 PROPERTY PORTFOLIO ACQUISITIONS/DISPOSITIONS
Property acquired in 2014
Acquisition date
(month/year)
 Acquisition price
(in millions)
 Gross leasable area (sq. ft.)
Leased percentage
at acquisition
Kakaako Commerce Center
12/14
$
39

                      204,400
90

Property disposed in 2014
Disposition date
(month/year)
 Disposition price
(in millions)
 Gross leasable area (sq. ft.)
Leased percentage at disposition
Maui Mall
1/14
$
64

                      185,700
97



9

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