Alexander & Baldwin Holdings Inc
Alexander & Baldwin — Investor Presentation (September 2022)
33 slides from Alexander & Baldwin's investor presentation, Sep 9, 2022
Slide 1: September 2022 Investor Presentation
S e p t e m b e r 2 0 2 2 I n v e s t o r P r e s e n t a t i o n S e e k i n g G r o w t h , C o m p l e t i n g S i m p l i f i c a t i o n
Slide 2: Safe Harbor Statement
Statements in this presentation 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
Slide 3: Seeking Growth, Completing Simplification
3Alexander & Baldwin I NYSE: ALEXPartners for Hawai’i S U P E R I O R M A R K E T F U N D A M E N T A L S Dynamic, Growing Market with Structural Limitations on New Supply H I G H - Q U A L I T Y P O R T F O L I O Irreplaceable Assets with Embedded Growth Opportunities S I M P L I F I C A T I O N N
Slide 4: Hawai'i Market: Superior Long-Term Fundamentals
4Alexander & Baldwin I NYSE: ALEXPartners for Hawai‘i Strong Consumer Demand Due to Favorable Market Metrics 2 .2% JOB GROWTH 4 .9% INCOME GROWTH HAWAI‘I MARKET: SUPERIOR LONG-TERM FUNDAMENTALS D Y N A M I C M A R K E T W I T H S U B S T A N T I A L B A R R I E R S T O E N T R Y Source: Green Street
Slide 5: Irreplaceable Assets
I R R E P L A C E A B L E A S S E T S Strategically located portfolio of high-quality, needs-based retail, industrial and ground lease assets Largest portfolio of grocery-anchored, neighborhood shopping centers in Hawai‘i The “one-stop shop” for new market entrants with both retail and light industr
Slide 6: Simplification Nearing Completion
6Alexander & Baldwin I NYSE: ALEXPartners for Hawai’i Well-positioned to complete simplification. Monetization of non-core assets has strengthened balance sheet and provides liquidity for CRE growth. SIMPLIFICATION NEARING COMPLETION F A C I L I T A T E S P I V O T B A C K T O C R E G R O W T H Land
Slide 7: Balance Sheet Update: Strong Balance Sheet
7Alexander & Baldwin I NYSE: ALEXPartners for Hawai‘i Balance Sheet Update: TOTAL LIQUIDITY I $532M CASH I $33M UNDRAWN REVOLVER I $499M $33 M $499 M STRONG BALANCE SHEET A M P L E L I Q U I D I T Y T O S U P P O R T A C C E L E R A T E D C R E G R O W T H $53 2 M T o t a l L i q u i d i t y As of J
Slide 8: CRE Portfolio Growth: Multi-Pronged Approach
8Alexander & Baldwin I NYSE: ALEXPartners for Hawai’i A C T I V E I N V E S T M E N T S T E A M Industrial and land acquisitions announced in Q4 2021, with additional acquisitions expected 1 5 2 - Y E A R H I S T O R Y Successfully operating in high-performing, high barrier to entry Hawai‘i market H
Slide 9: Commitment to Corporate Responsibility
9Alexander & Baldwin I NYSE: ALEXPartners for Hawai‘i COMMITMENT TO CORPORATE RESPONSIBILITY IMPROVING HAWAI‘I’S COMMUNITIES AND CREATING VALUE FOR STAKEHOLDERS AS PARTNERS FOR HAWAI‘I Proactive ESG agenda demonstrates consistency with Company’s DNA and local commitment Published third Corporate Res
Slide 10: Business Overview
10Alexander & Baldwin I NYSE: ALEXPartners for Hawai’i Number of Properties Retail (“Needs-Based”) Industrial Ground Lease Office 80 22 12 42 4 Total GLA (Sq. Ft.)1 Retail Industrial Office Ground Leases 3.9 M 2.5M 1.3M 0.1M 141 acres Portfolio Leased Occupancy % Portfolio Economic Occupancy % 94.6%
Slide 11: Exceptional Q2 2022 CRE Results
EXCEPTIONAL Q2 2022 CRE RESULTS S A M E - S T O R E N O I U P 4 . 4 % Y E A R - O V E R - Y E A R Greatly improved portfolio performance, reflecting improved tenant performance and collections S T R O N G L E A S I N G A C T I V I T Y W I T H A V E R A G E S P R E A D S O F 1 1 . 9 % F O R N E W L E
Slide 12: Dividend and Revised 2022 Guidance
12Alexander & Baldwin I NYSE: ALEXPartners for Hawai‘i Board declared a Q3 2022 dividend of $0.22 per share, a two-cent or 10% increase from Q2 2022, payable on October 5, 2022, to shareholders of record as of September 19, 2022 DIVIDEND • Third consecutive quarterly dividend increase reflects stron
Slide 13: Commercial Real Estate
C O M M E R C I A L R E A L E S T A T E 13Alexander & Baldwin I NYSE: ALEXPartners for Hawai’i
Slide 14: Portfolio Composition
14Alexander & Baldwin I NYSE: ALEXPartners for Hawai’i Strategically diversified portfolio of primarily grocery- anchored, community-based retail and services well positioned for an evolving market as people’s lives increasingly are centered around their neighborhoods. PORTFOLIO COMPOSITION A B R E
Slide 15: High-Quality Assets: ABR by Anchored Property Type
15Alexander & Baldwin I NYSE: ALEXPartners for Hawai’i HIGH-QUALITY ASSETS A B R B Y A N C H O R E D P R O P E R T Y T Y P E Warehouse Club/General Merchandise Retailer 12% Strip Retail 5% Ground Lease 19% Industrial 16% Office 4% Total Portfolio ABR by Anchored Property Type 1: Includes Shadow-Anch
Slide 16: Ground Leases: Secure, with Upside
K A I M U K I S H O P P I N G C E N T E R Kaimuki Shopping Center ground lease FMV reset resulted in a 29% ABR increase with additional contract steps in years 3 and 7. H A R T Honolulu County ground lease contractual step-up resulted in a 34% ABR increase. W I N D W A R D C I T Y S H O P P I N G C
Slide 17: Irreplaceable Assets with Embedded Growth Upside
Estimated return of 8% on refresh capital spend and current leased occupancy of 97.2%. Return of 11% on repositioning capital spent and current leased occupancy of 96.8%. Estimated return of 9% on repositioning capital spend and current leased occupancy of 84.4%. I R R E P L A C E A B L E A S S E T
Slide 18: Competitive Advantage at Maui Business Park II
18Alexander & Baldwin I NYSE: ALEXPartners for Hawai‘i C O M P E T I T I V E A D V A N T A G E A T M A U I B U S I N E S S P A R K I I GROUND-UP DEVELOPMENT OF COMMERCIAL ASSETS I N D U S T R I A L Highly desirable commercial and light industrial development given proximity to Kahului Airport, Kahul
Slide 19: CRE Portfolio Growth via Acquisitions
Alexander & Baldwin – Partners for Hawaii 19Alexander & Baldwin I NYSE: ALEX 19Partners for Hawai’i Structure can provide unique diversification, liquidity and estate benefits to sellers UPREIT • Anchored & strip retail centers • Industrial/flex warehouses • Mixed-use urban with retail components Lo
Slide 20: Acquisitions Focused on CRE Growth
Q 4 2 0 2 1 A C Q U I S I T I O N S FOCUSED ON CRE GROWTH 20Alexander & Baldwin I NYSE: ALEXPartners for Hawai’i • Actively pursuing opportunities across target markets and in preferred asset classes • Strategic advantages from Hawai‘i focus and decades-long relationships will help uncover opportuni
Slide 21: Commitment to Corporate Responsibility
Partners for Hawai’i 21Alexander & Baldwin I NYSE: ALEX C O M M I T M E N T T O C O R P O R A T E R E S P O N S I B I L I T Y
Slide 22: Pearl Highlands Center Sustainability Initiative
PEARL HIGHLANDS CENTER Partners for Hawai’i • Construction is nearing completion of 1.3-megawatt rooftop photovoltaic system • Sized to offset 100% of common area energy and provide additional power to select tenants • Beginning of broader rooftop solar initiative across CRE portfolio OPERATIONAL TI
Slide 23: Supporting Our Communities
23Alexander & Baldwin I NYSE: ALEXPartners for Hawai‘i SUPPORTING OUR COMMUNITIES In 2021, A&B made charitable contributions to 175 Hawai‘i-based non-profit organizations, with a particular focus on expanding support for DEI, social justice and housing-related causes. The Company allocated 20% of it
Slide 24: Governance Aligned with Commitment to ESG
24Alexander & Baldwin I NYSE: ALEXPartners for Hawai‘i GOVERNANCE ALIGNED WITH COMMITMENT TO PRINCIPLES OF ESG Chris Benjamin CHAIR Independent INDEPENDENT (NYSE) 86% FEMALE 29% CURRENT/FORMER A&B CEO 1 ETHNICALLY DIVERSE 43% REIT EXPERTISE 43% BOARD OF DIRECTORS METRICS • Diverse, independent Board
Slide 25: Seeking Growth, Completing Simplification
25Alexander & Baldwin I NYSE: ALEXPartners for Hawai’i S U P E R I O R M A R K E T F U N D A M E N T A L S Dynamic, Growing Market with Structural Limitations on New Supply H I G H - Q U A L I T Y P O R T F O L I O Irreplaceable Assets with Embedded Growth Opportunities S I M P L I F I C A T I O N N
Slide 26: Appendix
A P P E N D I X 26Alexander & Baldwin I NYSE: ALEXPartners for Hawai’i
Slide 27: Simplification Efforts
SIMPLIFICATION EFFORTS • Closed on the sale of approximately 18,900 acres of non-core landholdings Conservation and agricultural land on Kaua‘i 100% ownership interest in McBryde Resources, Inc. • Another large step toward completing strategic transformation efforts • In active discussions with
Slide 28: Materials & Construction
MATERIALS & CONSTRUCTION • Timing of key projects, COVID impacts on workforce, and inflationary cost pressure affected Q2 2022 results • Pleased with improvements made over past few years in operations, cost management, and bidding • Strongest book of business in four years, with paving and infrastr
Slide 29: Land Operations NAV Components
29Alexander & Baldwin I NYSE: ALEXPartners for Hawai‘i DOLLARS IN MILLIONS; AS OF JUNE 30, 2022 LAND OPERATIONS NAV COMPONENTS Acres Book Value Assets Kapolei Business Park West 3 $6.2 Non-core landholdings 5,342 48.6 Total Landholdings 5,345 $54.8 Investments in real estate joint ventures and partn
Slide 30: Reconciliation of GAAP to Non-GAAP Measures: CRE NOI
30Alexander & Baldwin I NYSE: ALEXPartners for Hawai‘i RECONCILIATION OF GAAP TO NON- GAAP MEASURES DOLLARS IN MILLIONS CRE NET OPERATING INCOME Three Months Ended June 30, 2022 Three Months Ended June 30, 2021 Change CRE Operating Profit (Loss) $19.4 $18.6 $0.8 Plus: Depreciation and amortization 9
Slide 31: Reconciliation of Net Income to FFO and Core FFO
31Alexander & Baldwin I NYSE: ALEXPartners for Hawai‘i RECONCILIATION OF NET INCOME (LOSS) AVAILABLE TO A&B COMMON SHAREHOLDERS TO FFO AND CORE FFO DOLLARS IN MILLIONS FUNDS FROM OPERATIONS (FFO) AND CORE FFO Three Months Ended June 30, 2022 Three Months Ended June 30, 2021 Net income (loss) availab
Slide 32: Reconciliation of Core FFO from CRE Operating Profit
32Alexander & Baldwin I NYSE: ALEXPartners for Hawai‘i RECONCILIATION OF CORE FFO STARTING FROM COMMERCIAL REAL ESTATE OPERATING PROFIT DOLLARS IN MILLIONS CORE FUNDS FROM OPERATIONS (CORE FFO) Three Months Ended June 30, 2022 Three Months Ended June 30, 2021 CRE Operating Profit $19.4 $18.6 Depreci
Slide 33: Reconciliation of Net Income to Consolidated Adjusted EBITDA
33Alexander & Baldwin I NYSE: ALEXPartners for Hawai‘i RECONCILIATION OF CONSOLIDATED NET INCOME TO CONSOLIDATED ADJUSTED EBITDA DOLLARS IN MILLIONS CONSOLIDATED ADJUSTED EBITDA Three Months Ended June 30, 2022 Three Months Ended June 30, 2021 TTM June 30, 2022 Net Income (Loss) $4.4 $13.0 $28.3 Dep
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