Alexander & Baldwin, Inc. Reports Third Quarter 2024 Results
Alexander & Baldwin (NYSE: ALEX) reported strong Q3 2024 results with net income of $19.0 million ($0.26 per diluted share) and Commercial Real Estate operating profit of $22.8 million. The company achieved FFO of $28.2 million ($0.39 per diluted share) and Adjusted FFO of $23.4 million ($0.32 per diluted share). Key highlights include 4.1% CRE Same-Store NOI growth, 94.0% leased occupancy, and 15.3% comparable blending leasing spreads. The company completed the acquisition of an 81,500 square foot food distribution facility and raised its 2024 guidance, with revised FFO guidance of $1.27-$1.35 per diluted share.
Alexander & Baldwin (NYSE: ALEX) ha riportato risultati solidi per il terzo trimestre del 2024, con un utile netto di 19,0 milioni di dollari (0,26 dollari per azione diluita) e un profitto operativo nel settore immobiliare commerciale di 22,8 milioni di dollari. L'azienda ha raggiunto un FFO di 28,2 milioni di dollari (0,39 dollari per azione diluita) e un FFO aggiustato di 23,4 milioni di dollari (0,32 dollari per azione diluita). Tra i punti salienti si segnalano una crescita del 4,1% del NOI Same-Store nel settore CRE, una percentuale di occupazione affittata del 94,0% e una differenza di affitto comparabile di 15,3%. L'azienda ha completato l'acquisizione di un impianto di distribuzione alimentare di 81.500 piedi quadrati e ha aumentato le previsioni per il 2024, con indicazioni riviste per l'FFO tra 1,27 e 1,35 dollari per azione diluita.
Alexander & Baldwin (NYSE: ALEX) reportó resultados sólidos en el tercer trimestre de 2024, con un ingreso neto de 19,0 millones de dólares (0,26 dólares por acción diluida) y un beneficio operativo en bienes raíces comerciales de 22,8 millones de dólares. La empresa logró un FFO de 28,2 millones de dólares (0,39 dólares por acción diluida) y un FFO ajustado de 23,4 millones de dólares (0,32 dólares por acción diluida). Los aspectos más destacados incluyen un crecimiento del 4,1% en el NOI de Same-Store en el sector CRE, una ocupación arrendada del 94,0% y márgenes de arrendamiento comparables del 15,3%. La empresa completó la adquisición de una instalación de distribución de alimentos de 81,500 pies cuadrados y elevó su guía para 2024, con proyecciones revisadas de FFO entre 1,27 y 1,35 dólares por acción diluida.
알렉산더 & 볼드윈 (NYSE: ALEX)는 2024년 3분기 결과로 1,900만 달러(주당 0.26 달러)의 순이익과 2,280만 달러의 상업용 부동산 운영 이익을 보고했습니다. 이 회사는 2,820만 달러의 FFO(주당 0.39 달러)와 2,340만 달러의 조정된 FFO(주당 0.32 달러)를 달성했습니다. 주요 하이라이트에는 CRE 동일 매장 NOI 성장률 4.1%, 임대 점유율 94.0% 및 비교 가능한 임대 스프레드 15.3%이 포함됩니다. 이 회사는 81,500 평방피트의 식품 유통 시설 인수를 완료했으며, 2024년 가이던스를 상향 조정하여 조정된 FFO 가이던스를 1.27~1.35 달러로 제시했습니다.
Alexander & Baldwin (NYSE: ALEX) a annoncé de solides résultats pour le troisième trimestre 2024, avec un revenu net de 19,0 millions de dollars (0,26 dollar par action diluée) et un bénéfice d'exploitation en immobilier commercial de 22,8 millions de dollars. L'entreprise a réalisé un FFO de 28,2 millions de dollars (0,39 dollar par action diluée) et un FFO ajusté de 23,4 millions de dollars (0,32 dollar par action diluée). Parmi les points clés figurent une croissance de 4,1 % du NOI Same-Store dans le secteur CRE, un taux d'occupation locative de 94,0 % et un écart de location comparable de 15,3 %. L'entreprise a finalisé l'acquisition d'un établissement de distribution alimentaire de 81 500 pieds carrés et a relevé ses prévisions pour 2024, avec des prévisions FFO révisées de 1,27 à 1,35 dollar par action diluée.
Alexander & Baldwin (NYSE: ALEX) hat im dritten Quartal 2024 starke Ergebnisse bekannt gegeben, mit einem Nettogewinn von 19,0 Millionen Dollar (0,26 Dollar pro verwässerter Aktie) und einem Betriebsergebnis im Bereich Gewerbeimmobilien von 22,8 Millionen Dollar. Das Unternehmen erzielte ein FFO von 28,2 Millionen Dollar (0,39 Dollar pro verwässerter Aktie) und ein angepasstes FFO von 23,4 Millionen Dollar (0,32 Dollar pro verwässerter Aktie). Zu den Hauptpunkten gehören ein 4,1 % Wachstum des NOI im Same-Store-Bereich für CRE, eine vermietete Belegungsquote von 94,0 % und vergleichbare Mietspreads von 15,3 %. Das Unternehmen schloss die Übernahme einer 81.500 Quadratfuß großen Lebensmitteldistributionsanlage ab und hob seine Prognosen für 2024 an, mit überarbeiteten FFO-Prognosen von 1,27 bis 1,35 Dollar pro verwässerter Aktie.
- Net income increased 30.1% YoY to $19.0 million from $14.6 million
- FFO grew 33% YoY to $28.2 million from $21.2 million
- CRE operating profit increased 10.6% to $22.8 million
- Strong leasing spreads of 15.3% for improved portfolio
- Industrial portfolio occupancy improved to 97.4%
- Company raised full-year 2024 guidance
- Overall leased occupancy decreased 60 basis points YoY to 94.0%
- Retail portfolio occupancy declined 110 basis points YoY to 92.9%
- Weighted-average debt maturity decreased to 2.9 years
Insights
Alexander & Baldwin delivered strong Q3 2024 results with notable improvements across key metrics. Net income increased to
Key financial strengths include:
- FFO growth to
$28.2 million ($0.39 /share) from$21.2 million - Strong balance sheet with
25.3% debt-to-market cap ratio - Improved guidance for full-year 2024
Q3 2024 Highlights
- Funds From Operations ("FFO") of
, or$28.2 million per diluted share / Adjusted FFO of$0.39 , or$23.4 million per diluted share$0.32 - CRE Same-Store Net Operating Income ("NOI") growth of
4.1% / CRE Same-Store NOI growth of4.7% excluding collections of prior year reserves - Leased occupancy as of September 30, 2024, was
94.0% - Comparable blended leasing spreads for the improved portfolio were
15.3% - Closed on the acquisition of an 81,500 square foot food and distribution facility.
Lance Parker, president and chief executive officer, stated: "I am pleased with our performance during the third quarter. Our portfolio continued to demonstrate organic growth and leasing demand was healthy, as evidenced by our CRE and Corporate FFO performance. Additionally, Land Operations generated strong FFO during the quarter. As a result, we are again raising our 2024 guidance. We also completed the acquisition of an industrial asset on
Financial Results for Q3 2024
- Net income available to A&B common shareholders and diluted earnings per share available to A&B shareholders for the third quarter of 2024 were
and$19.0 million per diluted share, respectively, compared to$0.26 and$14.6 million per diluted share in the same quarter of 2023.$0.20 - FFO and FFO per diluted share for the third quarter of 2024 were
and$28.2 million per diluted share, respectively, compared to$0.39 and$21.2 million per diluted share in the same quarter of 2023.$0.29 - CRE and Corporate-related FFO per diluted share for the third quarter of 2024 was
per diluted share compared to$0.28 per diluted share in the same quarter of 2023.$0.25
- CRE and Corporate-related FFO per diluted share for the third quarter of 2024 was
- Adjusted FFO and Adjusted FFO per diluted share for the third quarter of 2024 were
and$23.4 million per diluted share, respectively, compared to$0.32 and$17.4 million per diluted share in the same quarter of 2023.$0.24 - Selling, general and administrative expense decreased by
, or$0.2 million 1.7% , to , from$7.4 million in the same quarter of 2023.$7.6 million
CRE Highlights for Q3 2024
- CRE operating revenue for the third quarter of 2024 increased by
, or$1.2 million 2.4% , to , from$49.4 million in the same quarter of 2023.$48.2 million - CRE operating profit for the third quarter of 2024 increased by
, or$2.2 million 10.6% , to , from$22.8 million in the same quarter of 2023.$20.6 million - CRE NOI for the third quarter of 2024 increased by
, or$1.4 million 4.4% , to , from$32.4 million in the same quarter of 2023.$31.0 million - CRE Same-Store NOI for the third quarter of 2024 increased by
, or$1.3 million 4.1% , to , from$32.2 million in the same quarter of 2023.$30.9 million - Collections of prior year reserves in the third quarter of 2024 were
compared to$0.3 million in the same quarter of 2023.$0.5 million
- Collections of prior year reserves in the third quarter of 2024 were
- During the third quarter of 2024, the Company executed a total of 71 improved-property leases, covering approximately 182,100 square feet of gross leasable area ("GLA").
- Comparable leasing spreads in our improved property portfolio were
15.3% for the third quarter of 2024, which included18.2% for retail spaces and9.9% for industrial spaces. - Leasing activity related to our improved property portfolio during the third quarter of 2024 included:
- Six leases at Queens' Marketplace totaling approximately 30,000 square feet of GLA and
of annualized base rent ("ABR").$2.3 million - 12 leases related to properties located in
Kailua , including Aikahi Park Shopping Center, totaling approximately 26,000 square feet of GLA and of ABR.$0.9 million - Five leases at Waipio Shopping Center totaling approximately 16,000 square feet of GLA and
of ABR.$0.7 million - One lease at Komohana Industrial Park totaling approximately 31,000 square feet of GLA and
of ABR.$0.5 million
- Six leases at Queens' Marketplace totaling approximately 30,000 square feet of GLA and
- Overall leased occupancy was
94.0% as of September 30, 2024, an increase of 10 basis points compared to June 30, 2024, and a decrease of 60 basis points compared to September 30, 2023.- Leased occupancy in the retail portfolio was
92.9% as of September 30, 2024, an increase of 10 basis points compared to June 30, 2024, and a decrease of 110 basis points compared to September 30, 2023. - Leased occupancy in the industrial portfolio was
97.4% as of September 30, 2024, an increase of 30 basis points compared to June 30, 2024, and an increase of 60 basis points compared to September 30, 2023.
- Leased occupancy in the retail portfolio was
- Same-Store leased occupancy was
94.8% as of September 30, 2024, flat compared to June 30, 2024, and a decrease of 80 basis points compared to September 30, 2023.- Same-Store leased occupancy in the retail portfolio was
94.1% as of September 30, 2024, an increase of 10 basis points compared to June 30, 2024, and a decrease of 130 basis points compared to September 30, 2023. - Same-Store leased occupancy in the industrial portfolio was
97.2% as of September 30, 2024, an increase of 20 basis points compared to June 30, 2024, and an increase of 50 basis points compared to September 30, 2023.
- Same-Store leased occupancy in the retail portfolio was
CRE Investment Activity for Q3 2024
- On September 20, 2024, the Company closed on the off-market acquisition of an 81,500-square-foot distribution facility for
. The facility is fully leased to Hansen Distribution Group, a broadline food service subsidiary of C&S Wholesale Grocers and was an opportunity to recycle capital from Waipouli Town Center which was sold in October 2024.$29.7 million - The permitting process continues for the 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 early 2025, with an in-service date expected in late 2025.
Land Operations
- Land Operations operating profit was
for the quarter ended September 30, 2024, compared to an operating profit of$7.9 million for the quarter ended September 30, 2023. The increase in operating profit from the prior year quarter is due primarily to higher unimproved land and development lot sales, including an 81-acre parcel on$2.9 million Maui and one Maui Business Park lot, as well as higher legacy joint venture income in the third quarter of 2024 as compared to the same quarter in 2023.
Balance Sheet, Capital Markets Activities, and Liquidity
- As of September 30, 2024, the Company had an equity market capitalization of
and$1.4 billion in total debt, for a total market capitalization of approximately$472.2 million . The Company's debt-to-total market capitalization was$1.9 billion 25.3% as of September 30, 2024. The Company's debt has a weighted-average maturity of 2.9 years. - Including the effects of interest rate swaps, at quarter end, the Company had a weighted-average interest rate of
4.58% and96.8% of the Company's debt was at fixed rates. - In the third quarter of 2024, the Company's previously established ATM equity offering program (the "2021 ATM") expired. On August 13, 2024, the Company established a new ATM (the "2024 ATM") to issue and sell common stock up to an aggregate offering price of
. The Company did not sell any shares under the 2021 ATM or 2024 ATM in the current year.$200.0 million - As of September 30, 2024, the Company had total liquidity of
, consisting of cash on hand of$445.9 million and$17.9 million available on its revolving line of credit.$428.0 million - Net Debt to Trailing Twelve Months ("TTM") Consolidated Adjusted EBITDA was 3.6 times as of September 30, 2024, with TTM Consolidated Adjusted EBITDA of
for the period ended September 30, 2024.$124.8 million - Subsequent to quarter end, the Company amended its revolving credit facility, which extends the term of the facility to October 2028 with two six-month extension options and provides for
of borrowing capacity. The interest rate under the amended revolving credit facility remains unchanged from the prior facility at a rate of SOFR plus$450.0 million 1.15% , based on a pricing grid and a SOFR adjustment. - The Company paid a third quarter 2024 dividend of
per share on October 7, 2024.$0.22 25 - Consistent with historical practice, the Company's Board plans to declare a fourth quarter 2024 dividend in December 2024, with payment in January 2025.
2024 Full-Year Guidance | |||||
The Company revised its 2024 Full-Year guidance as follows: | |||||
2024 Guidance | |||||
Q3 YTD | Revised | Prior | |||
Net Income (Loss) available to A&B common | |||||
FFO per diluted share | |||||
Adjusted FFO per diluted share | |||||
CRE Same-Store NOI growth % | 3.0 % | ||||
CRE Same-Store NOI growth %, excluding collections of prior year reserves | 3.4 % | ||||
FFO per diluted share guidance is comprised of: | |||||
2024 Guidance | |||||
Q3 YTD | Revised | Prior | |||
FFO per share related to CRE and Corporate | |||||
FFO per share related to Land Operations | |||||
FFO per diluted share |
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 four million square feet of commercial space in Hawai'i, including 21 retail centers, 14 industrial assets and four office properties, as well as 142 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.
Contact: |
Jordan Hino |
(808) 525-8475 |
ALEXANDER & BALDWIN, INC. AND SUBSIDIARIES | ||||||||
Three Months Ended September 30, | Nine Months Ended September 30, | |||||||
2024 | 2023 | 2024 | 2023 | |||||
Operating Revenue: | ||||||||
Commercial Real Estate | $ 49,381 | $ 48,232 | $ 147,477 | $ 145,635 | ||||
Land Operations | 12,563 | 4,263 | 26,716 | 10,366 | ||||
Total operating revenue | 61,944 | 52,495 | 174,193 | 156,001 | ||||
Operating Profit (Loss): | ||||||||
Commercial Real Estate | 22,829 | 20,649 | 67,421 | 64,206 | ||||
Land Operations | 7,881 | 2,878 | 15,980 | 4,485 | ||||
Total operating profit (loss) | 30,710 | 23,527 | 83,401 | 68,691 | ||||
Interest expense | (5,680) | (6,077) | (17,119) | (16,975) | ||||
Corporate and other expense | (5,651) | (5,445) | (14,833) | (19,410) | ||||
Income (Loss) from Continuing Operations Before Income Taxes | 19,379 | 12,005 | 51,449 | 32,306 | ||||
Income tax benefit (expense) | (75) | — | (174) | (7) | ||||
Income (Loss) from Continuing Operations | 19,304 | 12,005 | 51,275 | 32,299 | ||||
Income (loss) from discontinued operations, net of income taxes | (300) | 3,894 | (3,181) | 3,902 | ||||
Net Income (Loss) | 19,004 | 15,899 | 48,094 | 36,201 | ||||
Loss (income) attributable to discontinued noncontrolling interest | — | (1,250) | — | (2,883) | ||||
Net Income (Loss) Attributable to A&B Shareholders | $ 19,004 | $ 14,649 | $ 48,094 | $ 33,318 | ||||
Basic Earnings (Loss) Per Share of Common Stock: | ||||||||
Continuing operations available to A&B shareholders | $ 0.27 | $ 0.16 | $ 0.71 | $ 0.44 | ||||
Discontinued operations available to A&B shareholders | (0.01) | 0.04 | (0.05) | 0.02 | ||||
Net income (loss) available to A&B shareholders | $ 0.26 | $ 0.20 | $ 0.66 | $ 0.46 | ||||
Diluted Earnings (Loss) Per Share of Common Stock: | ||||||||
Continuing operations available to A&B shareholders | $ 0.27 | $ 0.16 | $ 0.70 | $ 0.44 | ||||
Discontinued operations available to A&B shareholders | (0.01) | 0.04 | (0.04) | 0.02 | ||||
Net income (loss) available to A&B shareholders | $ 0.26 | $ 0.20 | $ 0.66 | $ 0.46 | ||||
Weighted-Average Number of Shares Outstanding: | ||||||||
Basic | 72,630 | 72,623 | 72,597 | 72,597 | ||||
Diluted | 72,817 | 72,844 | 72,718 | 72,800 | ||||
Amounts Available to A&B Common Shareholders: | ||||||||
Continuing operations available to A&B common shareholders | $ 19,298 | $ 11,984 | $ 51,257 | $ 32,217 | ||||
Discontinued operations available to A&B common shareholders | (300) | 2,644 | (3,181) | 1,019 | ||||
Net income (loss) available to A&B common shareholders | $ 18,998 | $ 14,628 | $ 48,076 | $ 33,236 | ||||
ALEXANDER & BALDWIN, INC. AND SUBSIDIARIES | ||||
September 30, | December 31, | |||
2024 | 2023 | |||
ASSETS | ||||
Real estate investments | ||||
Real estate property | $ 1,644,293 | $ 1,609,013 | ||
Accumulated depreciation | (249,281) | (227,282) | ||
Real estate property, net | 1,395,012 | 1,381,731 | ||
Real estate developments | 54,696 | 58,110 | ||
Investments in real estate joint ventures and partnerships | 5,907 | 6,850 | ||
Real estate intangible assets, net | 32,564 | 36,298 | ||
Real estate investments, net | 1,488,179 | 1,482,989 | ||
Cash and cash equivalents | 17,919 | 13,517 | ||
Restricted cash | 236 | 236 | ||
Accounts receivable, net | 3,501 | 4,533 | ||
Goodwill | 8,729 | 8,729 | ||
Other receivables, net | 12,607 | 23,601 | ||
Prepaid expenses and other assets | 104,795 | 98,652 | ||
Assets held for sale | 14,036 | 13,984 | ||
Total assets | $ 1,650,002 | $ 1,646,241 | ||
LIABILITIES AND EQUITY | ||||
Liabilities: | ||||
Notes payable and other debt | $ 472,179 | $ 463,964 | ||
Accounts payable | 4,910 | 5,845 | ||
Accrued post-retirement benefits | 8,173 | 9,972 | ||
Deferred revenue | 72,499 | 70,353 | ||
Accrued and other liabilities | 94,059 | 93,096 | ||
Equity | 998,182 | 1,003,011 | ||
Total liabilities and equity | $ 1,650,002 | $ 1,646,241 |
ALEXANDER & BALDWIN, INC. AND SUBSIDIARIES | ||||
Nine Months Ended September 30, | ||||
2024 | 2023 | |||
Cash Flows from Operating Activities: | ||||
Net income (loss) | $ 48,094 | $ 36,201 | ||
Adjustments to reconcile net income (loss) to net cash provided by (used in) operations: | ||||
Loss (income) from discontinued operations | 3,181 | (3,902) | ||
Depreciation and amortization | 26,979 | 27,572 | ||
Provision for credit losses | (628) | — | ||
Loss (gain) from disposals, net | (2,148) | (1,117) | ||
Impairment of assets | — | 649 | ||
Loss (gain) on de-designated interest rate swap valuation adjustment | (3,675) | — | ||
Share-based compensation expense | 3,654 | 5,283 | ||
Loss (income) related to joint ventures, net of operating cash distributions | (3,062) | (1,851) | ||
Changes in operating assets and liabilities: | ||||
Trade and other receivables | (611) | (92) | ||
Prepaid expenses and other assets | (3,649) | (3,531) | ||
Development/other property inventory | 8,018 | (1,518) | ||
Accrued post-retirement benefits | (1,798) | (10) | ||
Accounts payable | (1,188) | 258 | ||
Accrued and other liabilities | 2,225 | (2,179) | ||
Operating cash flows from continuing operations | 75,392 | 55,763 | ||
Operating cash flows from discontinued operations | (1,718) | (12,150) | ||
Net cash provided by (used in) operations | 73,674 | 43,613 | ||
Cash Flows from Investing Activities: | ||||
Capital expenditures for acquisitions | (29,826) | (9,464) | ||
Capital expenditures for property, plant and equipment | (11,878) | (13,595) | ||
Proceeds from disposal of assets | 41 | 3,294 | ||
Payments for purchases of investments in affiliates and other investments | (158) | (236) | ||
Distributions of capital and other receipts from investments in affiliates and other investments | 974 | 1 | ||
Investing cash flows from continuing operations | (40,847) | (20,000) | ||
Investing cash flows from discontinued operations | 15,000 | 647 | ||
Net cash provided by (used in) investing activities | (25,847) | (19,353) | ||
Cash Flows from Financing Activities: | ||||
Proceeds from issuance of notes payable and other debt | 60,000 | — | ||
Payments of notes payable and other debt and deferred financing costs | (86,785) | (33,674) | ||
Borrowings (payments) on line-of-credit agreement, net | 35,000 | 69,000 | ||
Cash dividends paid | (48,822) | (64,249) | ||
Repurchases of common stock and other payments | (2,818) | (3,576) | ||
Financing cash flows from continuing operations | (43,425) | (32,499) | ||
Financing cash flows from discontinued operations | — | (10,721) | ||
Net cash provided by (used in) financing activities | (43,425) | (43,220) | ||
Cash, Cash Equivalents, Restricted Cash, and Cash included in Assets Held for Sale | ||||
Net increase (decrease) in cash, cash equivalents, restricted cash, and cash included in assets | 4,402 | (18,960) | ||
Balance, beginning of period | 13,753 | 34,409 | ||
Balance, end of period | $ 18,155 | $ 15,449 |
USE OF NON-GAAP FINANCIAL MEASURES
The Company uses non-GAAP measures when evaluating operating performance because management believes that they provide additional insight into the Company's and segments' core operating results, and/or the underlying business trends affecting performance on a consistent and comparable basis from period to period. These measures generally are provided to investors as an additional means of evaluating the performance of ongoing core operations. The non-GAAP financial information presented herein should be considered supplemental to, and not as a substitute for or superior to, financial measures calculated in accordance with GAAP.
NOI and Same-Store NOI
NOI is a non-GAAP measure used internally in evaluating the unlevered performance of the Company's Commercial Real Estate portfolio. Management believes NOI provides useful information to investors regarding the Company's financial condition and results of operations because it reflects only the contract-based income and cash-based expense items that are incurred at the property level. When compared across periods, NOI can be used to determine trends in earnings of the Company's properties as this measure is not affected by non-contract-based revenue (e.g., straight-line lease adjustments required under GAAP); by non-cash expense recognition items (e.g., the impact of depreciation and amortization expense or impairments); or by other income, expenses, gains, or losses that do not directly relate to the Company's ownership and operations of the properties (e.g., indirect selling, general, administrative and other expenses, as well as lease termination income). Management believes the exclusion of these items from operating profit (loss) is useful because the resulting measure captures the contract-based revenue that is realizable (i.e., assuming collectability is deemed probable) and the direct property-related expenses paid or payable in cash that are incurred in operating the Company's Commercial Real Estate portfolio, as well as trends in occupancy rates, rental rates and operating costs. NOI should not be viewed as a substitute for, or superior to, financial measures calculated in accordance with GAAP.
The Company reports NOI and Occupancy on a Same-Store basis, which includes the results of properties that were owned, operated, and stabilized for the entirety of the prior calendar year and current reporting period, year-to-date. Management believes that reporting on a Same-Store basis provides investors with additional information regarding the operating performance of comparable assets separate from other factors (such as the effect of developments, redevelopments, acquisitions or dispositions).
Reconciliations of CRE operating profit to CRE NOI, Same-Store NOI and Same-Store NOI Excluding Collections of Amounts Reserved in Previous Years are as follows:
Three Months Ended September 30, | ||||||
(amounts in thousands; unaudited) | 2024 | 2023 | Change | |||
CRE Operating Profit | $ 22,829 | $ 20,649 | $ 2,180 | |||
Depreciation and amortization | 8,932 | 9,166 | (234) | |||
Straight-line lease adjustments | (564) | (849) | 285 | |||
Favorable/(unfavorable) lease amortization | (103) | (334) | 231 | |||
Termination fees and other | 8 | (132) | 140 | |||
Interest and other income (expense), net | (26) | 159 | (185) | |||
Impairment losses | — | 649 | (649) | |||
Selling, general, administrative | 1,292 | 1,703 | (411) | |||
NOI | 32,368 | 31,011 | 1,357 | |||
Less: NOI from acquisitions, dispositions, and other adjustments | (212) | (132) | (80) | |||
Same-Store NOI | 32,156 | 30,879 | 1,277 | |||
Less: Collections of amounts reserved in previous years | (310) | (460) | 150 | |||
Same-Store NOI excluding collections of amounts reserved in prior years | $ 31,846 | $ 30,419 | $ 1,427 |
The forward looking guidance included in this release includes certain forward-looking information, including CRE Same-Store NOI growth % and CRE Same-Store NOI growth %, excluding collections of prior year reserves, that is not presented in accordance with GAAP. In reliance on the exception in Item 10(e)(1)(i)(B) of Regulation S-K, we do not provide a quantitative reconciliation of such forward-looking CRE Same-Store NOI growth % amounts to the most directly comparable GAAP financial measure. These forward-looking same-store calculations include only activity from properties owned for comparable periods. We are unable, without unreasonable effort, to provide a meaningful or reasonably accurate calculation or estimation of certain reconciling items, including but not limited to, (i) occupancy changes; (ii) terms for new and renewal leases; (iii) collections from tenants; and (iv) other nonrecurring/unplanned income or expense items. These items are inherently uncertain and depend on various factors, many of which are beyond our control, and the unavailable components could have a significant impact on our future financial results.
Funds From Operations and Adjusted Funds From Operations
Management believes that FFO serves as a supplemental measure to net income calculated in accordance with GAAP for comparing its performance and operations to those of other REITs because it excludes items included in net income that do not relate to or are not indicative of the Company's operating and financial performance, such as depreciation and amortization related to real estate, which assumes that the value of real estate assets diminishes predictably over time instead of fluctuating with market conditions, and items that can make periodic or peer analysis more difficult, such as gains and losses from the sale of CRE properties, impairment losses related to CRE properties, and income (loss) from discontinued operations. Management believes that FFO more accurately provides an investor an indication of our ability to incur and service debt, make capital expenditures and fund other needs.
The Company has been executing a simplification strategy to focus on the growth and expansion of its commercial real estate portfolio in Hawai'i by monetizing its legacy assets and operations. The sale of Grace Pacific, LLC and the Company-owned quarry land on
FFO and Adjusted FFO do not represent alternatives to net income calculated in accordance with GAAP and should not be viewed as more prominent measures of performance than net income (loss) or cash flows from operations prepared in accordance with GAAP. In addition, FFO and Adjusted FFO do not represent and should not be considered alternatives to cash generated from operating activities determined in accordance with GAAP, nor should they be used as measures of the Company's liquidity, or cash available to fund the Company's needs or pay distributions. FFO and Adjusted FFO should be considered only as supplements to net income as a measure of the Company's performance.
The Company presents both non-GAAP measures and reconciles FFO to the most directly-comparable GAAP measure, Net Income (Loss) available to A&B common shareholders, and FFO to Adjusted FFO. The Company's FFO and Adjusted FFO may not be comparable to such metrics reported by other REITs due to possible differences in the interpretation of the current Nareit definition used by such REITs.
Reconciliations of net income (loss) available to A&B common shareholders to FFO and Adjusted FFO are as follows:
Three Months Ended September 30, | ||||
(amounts in thousands; unaudited) | 2024 | 2023 | ||
Net Income (Loss) available to A&B common shareholders | $ 18,998 | $ 14,628 | ||
Depreciation and amortization of commercial real estate properties | 8,932 | 9,166 | ||
(Income) loss from discontinued operations, net of income taxes | 300 | (3,894) | ||
Income (loss) attributable to discontinued noncontrolling interest | — | 1,250 | ||
FFO | 28,230 | $ 21,150 | ||
Add (deduct) Adjusted FFO defined adjustments | ||||
Impairment losses - abandoned development costs | $ — | $ 649 | ||
Non-cash changes to liabilities related to legacy operations1 | — | 200 | ||
Provision for current expected credit losses | (628) | — | ||
Legacy joint venture (income)/loss2 | (2,142) | (950) | ||
Amortization of share-based compensation | 1,266 | 1,023 | ||
Maintenance capital expenditures3 | (2,503) | (3,463) | ||
Leasing commissions paid | (389) | (293) | ||
Straight-line lease adjustments | (564) | (849) | ||
Amortization of net debt premiums or discounts and deferred financing costs | 247 | 243 | ||
Amortization of above and below-market leases, net | (103) | (280) | ||
Adjusted FFO | $ 23,414 | $ 17,430 | ||
1 Primarily related to environmental reserves associated with legacy business activities in the Land Operations segment. | ||||
2 Includes joint ventures engaged in legacy business activities within the Land Operations segment. | ||||
3 Includes ongoing maintenance capital expenditures only. |
Reconciliations of net income (loss) available to A&B common shareholders per diluted share, to both the forward-looking range of FFO per diluted share and the forward-looking range of Adjusted FFO per diluted share, are as follows:
Reconciliations of Net Income available to A&B common shareholders to FFO and Adjusted FFO | ||||||||||
Nine Months Ended | Full-Year 2024 Estimate - Revised1 | Full-Year 2024 Estimate - Prior1 | ||||||||
Low | High | |||||||||
Net Income (Loss) available to A&B common shareholders per diluted share | $ 0.66 | $ 0.74 | $ 0.82 | $ 0.64 | $ 0.73 | |||||
Depreciation and amortization of commercial real estate properties | 0.37 | 0.49 | 0.49 | 0.49 | 0.49 | |||||
(Income) loss from discontinued operations, net of income taxes | 0.04 | 0.04 | 0.04 | 0.04 | 0.04 | |||||
FFO per diluted share | $ 1.07 | $ 1.27 | $ 1.35 | $ 1.17 | $ 1.26 | |||||
Add (deduct) Adjusted FFO defined adjustments | ||||||||||
Amortization of share-based compensation | 0.05 | 0.06 | 0.06 | 0.07 | 0.07 | |||||
Maintenance capital expenditures | (0.11) | (0.18) | (0.16) | (0.17) | (0.15) | |||||
Legacy joint venture (income)/loss | (0.05) | (0.05) | (0.07) | (0.02) | (0.03) | |||||
Leasing commissions paid | (0.01) | (0.02) | (0.02) | (0.02) | (0.02) | |||||
Straight-line lease adjustments | (0.03) | (0.03) | (0.04) | (0.03) | (0.04) | |||||
Amortization of net debt premiums or discounts and deferred financing costs | 0.01 | 0.02 | 0.02 | 0.02 | 0.02 | |||||
Other2 | (0.02) | (0.02) | (0.02) | (0.03) | (0.03) | |||||
Adjusted FFO per diluted share | $ 0.91 | $ 1.05 | $ 1.12 | $ 0.99 | $ 1.08 | |||||
FFO per share related to CRE and Corporate | $ 0.85 | $ 1.06 | $ 1.11 | $ 1.04 | $ 1.08 | |||||
FFO per diluted share related to Land Operations3 | 0.22 | 0.20 | 0.24 | 0.13 | 0.18 | |||||
FFO per diluted share | $ 1.07 | $ 1.27 | $ 1.35 | $ 1.17 | $ 1.26 | |||||
1 The full-year 2024 estimate reflects guidance as of the date of this earnings release and assumes that diluted shares equal the latest year-to-date ending | ||||||||||
2 Other adjustments in the Adjusted FFO reconciliation include non-recurring and other items that are not forecasted for guidance purposes such as, but not | ||||||||||
3 FFO per diluted share related to Land Operations is equal to Land Operations operating profit (loss) divided by diluted shares, as there are no reconciling |
Net Debt
Net Debt is calculated by adjusting the Company's total debt to its notional amount (by excluding unamortized premium, discount and capitalized loan fees) and by subtracting cash and cash equivalents recorded in the Company's consolidated balance sheets.
A reconciliation of the Company's Net Debt is as follows.
September 30, | December 31, | |||
(amounts in thousands; unaudited) | 2024 | 2023 | ||
Debt | ||||
Secured debt | $ 128,572 | $ 189,713 | ||
Unsecured term debt | 271,607 | 237,251 | ||
Unsecured revolving credit facility | 72,000 | 37,000 | ||
Total debt | 472,179 | 463,964 | ||
Net unamortized deferred financing cost / discount (premium) | 329 | 149 | ||
Cash and cash equivalents | (17,919) | (13,517) | ||
Net debt | $ 454,589 | $ 450,596 |
EBITDA and Adjusted EBITDA
The Company may report various forms of EBITDA (e.g. Consolidated EBITDA, Consolidated Adjusted EBITDA, and Land Operations EBITDA) as non-GAAP measures used by the Company in evaluating the segments' and Company's operating performance on a consistent and comparable basis from period to period. The Company provides this information to investors as an additional means of evaluating the performance of the segments' and Company's ongoing operations.
The Company also adjusts Consolidated EBITDA to arrive at Consolidated Adjusted EBITDA for items identified as non-recurring, infrequent or unusual that are not expected to recur in the segment's normal operations (or in the Company's core business).
As an illustrative example, the Company identified non-cash impairment as non-recurring, infrequent or unusual items that are not expected to recur in the consolidated or segment's normal operations. By excluding these items from Consolidated EBITDA to arrive at Consolidated Adjusted EBITDA, the Company believes it provides meaningful supplemental information about its operating performance and facilitates comparisons to historical operating results. Such non-GAAP measures should not be viewed as a substitute for, or superior to, financial measures calculated in accordance with GAAP.
Reconciliations of the Company's consolidated net income to Consolidated EBITDA and Consolidated Adjusted EBITDA are as follows:
TTM September 30, | TTM December 31, | |||
(amounts in thousands, unaudited) | 2024 | 2023 | ||
Net Income (Loss) | $ 44,856 | $ 32,963 | ||
Adjustments: | ||||
Depreciation and amortization | 36,198 | 36,791 | ||
Interest expense | 23,107 | 22,963 | ||
Income tax expense (benefit) | 202 | 35 | ||
Interest expense related to discontinued operations | 12 | 496 | ||
Consolidated EBITDA | 104,375 | 93,248 | ||
Asset impairments | 4,119 | 4,768 | ||
(Gain)/loss on fair value adjustments related to interest rate swaps | (957) | 2,718 | ||
Non-recurring financing charges | 2,350 | — | ||
(Income) loss from discontinued operations, net of income taxes and excluding depreciation, amortization and interest expense | 14,918 | 7,351 | ||
Consolidated Adjusted EBITDA | $ 124,805 | $ 108,085 |
FORWARD-LOOKING STATEMENTS
Statements in this release that are not historical facts are forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 and involve a number of risks and uncertainties that could cause actual results to differ materially from those contemplated by the relevant forward-looking statements. These forward-looking statements include, but are not limited to, statements regarding possible or assumed future results of operations, business strategies, growth opportunities and competitive positions. Such forward-looking statements speak only as of the date the statements were made and are not guarantees of future performance. Forward-looking statements are subject to a number of risks, uncertainties, assumptions and other factors that could cause actual results and the timing of certain events to differ materially from those expressed in or implied by the forward-looking statements. These factors include, but are not limited to, prevailing market conditions and other factors related to the Company's REIT status and the Company's business, the evaluation of alternatives by the Company related to its non-core assets, and the risk factors discussed in the Company's most recent Form 10-K, Form 10-Q and other filings with the Securities and Exchange Commission. The information in this release should be evaluated in light of these important risk factors. We do not undertake any obligation to update the Company's forward-looking statements.
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SOURCE Alexander & Baldwin
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