HONOLULU, February 28, 2023 /PRNewswire/—Alexander & Baldwin, Inc. (NYSE: ALEX) ("A&B" or "Company"), a Hawai‘i-based company focused on owning and operating high-quality commercial real estate in Hawai‘i, today announced financial results for the fourth quarter and full-year of 2022.

Chris Benjamin, A&B chief executive officer, stated: "Our high-quality portfolio of grocery-anchored retail, industrial and ground lease assets continued to perform well in the fourth quarter, closing out a year of exceptional results. During 2022, commercial real estate ("CRE") portfolio Net Operating Income ("NOI") increased by 6.3% over 2021 to $117.8 million. Leasing activity remained robust as we finished the year with total leased occupancy of 95.0%, along with 4.4% full-year re-leasing spreads."

"We made meaningful progress in advancing our strategic agenda during the year as we closed on the sale of approximately 20,200 acres of non-core landholdings. While we haven't yet sold Grace Pacific, we took the decisive step in the fourth quarter of committing to a plan to sell and classifying the business as a discontinued operation. With our business simplification process nearly complete, we are focused on utilizing our strong balance sheet to expand our premier CRE portfolio. Redevelopment options within our portfolio, as well as a pipeline of potential acquisitions, give us confidence that we will be able to capitalize on opportunities across our target markets and preferred asset classes."

"Lastly, I would like to congratulate Lance Parker on his promotion to president and chief executive officer of A&B, effective July 1. Lance will maintain a keen focus on operating and growing our CRE platform, while I work to complete the Company's strategic transformation into a CRE company. I have the utmost confidence in Lance and our entire team to demonstrate the strength of the A&B platform and create value for shareholders in 2023 and beyond."

During the fourth quarter of 2022, the Company changed its segment reporting in its financial statements to reflect how it now manages its continuing operations. The specific changes were made in conjunction with the Company presenting its materials and construction operations, including Grace Pacific, as held for sale and discontinued operations in its financial statements, pursuant to which the Company eliminated the former Materials & Construction segment and reclassified its joint venture interest in a materials company to the Land Operations segment.

The impact of the changes to the Company's segment reporting has been retrospectively reflected in the financial information for the prior periods presented in this release, resulting in changes in Land Operations segment Operating Profit (Loss) of $0.1 million and $(3.3) million during the three months ended December 31, 2022 and 2021, respectively. The full-year impact to Land Operations Operating Profit (Loss) was $2.7 million and $(2.5) million for the years ended December 31, 2022 and 2021, respectively. Prepaid expenses and other assets for Land Operations increased by $26.1 million and $23.4 million as of December 31, 2022 and 2021, as a result of the change in segment reporting. Additional information about these changes is included in the appendix.

•Net income (loss) available to A&B common shareholders and diluted earnings (loss) per share for the fourth quarter of 2022 were $(71.6) million and $(0.99) per share, respectively, compared to $6.1 million and $0.08 per share in the same quarter of 2021. Results for the fourth quarter of 2022 and 2021 include after-tax losses from discontinued operations of $87.9 million and $31.5 million, respectively.

•Net income (loss) available to A&B common shareholders and diluted earnings (loss) per share for the full-year of 2022 were $(50.8) million and $(0.70) per share, respectively, compared to $35.1 million and $0.48 per share in 2021. Results for the full-year 2022 and 2021 include after-tax losses from discontinued operations of $86.6 million and $39.6 million, respectively.

•Nareit-defined Funds From Operations ("FFO") and FFO per-diluted share for the fourth quarter of 2022 were $25.3 million and $0.35 per share, respectively, compared to $44.6 million and $0.61 per share in the same quarter of 2021. The full-year 2022 FFO and FFO per diluted share were $73.4 million and $1.01 per share, respectively, compared to $110.0 million and $1.52 per share in the same period of 2021.

•Core FFO and Core FFO per-diluted share for the fourth quarter of 2022 were $22.2 million and $0.31 per share, respectively, compared to $17.5 million and $0.24 per share in the same quarter of 2021. The full-year 2022 Core FFO and Core FFO per diluted share were $82.2 million and $1.13 per share, respectively, compared to $69.5 million and $0.96 per share in the same period of 2021.

•In the fourth quarter of 2022, CRE revenue increased by $2.2 million, or 4.8%, to $48.4 million, as compared to $46.2 million in the same quarter of 2021. CRE revenue increased $13.1 million, or 7.5%, to $187.2 million for the full-year of 2022, as compared to $174.1 million in the same period of 2021.

•In the fourth quarter of 2022, CRE net operating income ("NOI") increased by $0.4 million, or 1.3%, to $29.2 million, as compared to $28.8 million in the same quarter of 2021. CRE NOI increased by $7.0 million, or 6.3%, to $117.8 million for the full-year of 2022, as compared to $110.7 million in the same period of 2021.

•In the fourth quarter of 2022, CRE Same-Store NOI increased 1.1% compared to the prior year fourth quarter. Full-year Same-Store NOI increased 6.0% compared to the same period in 2021.

•During the fourth quarter of 2022, the Company executed a total of 61 leases, covering approximately 129,500 square feet of gross leasable area ("GLA"). There were 261 total leases executed in 2022, covering approximately 777,800 square feet of GLA.

•Comparable leasing spreads were 5.5% portfolio-wide for the fourth quarter of 2022 and 5.2% for retail spaces. Full-year comparable leasing spreads stand at 4.4% portfolio-wide and 3.9% for retail spaces.

•Significant leases executed during the fourth quarter of 2022 include:

◦Fifteen leases related to properties located in Kailua, including Aikahi Park Shopping Center, totaling approximately 23,000 square feet of GLA.

◦Six leases at Kaka‘ako Commerce Center totaling approximately 21,000 square feet of GLA.

•Significant leases executed during 2022 include:

◦Fifty-six leases related to properties located in Kailua, including Aikahi Park Shopping Center, totaling approximately 77,100 square feet of GLA.

◦Twenty-four leases at Kaka‘ako Commerce Center totaling approximately 61,500 square feet of GLA.

◦Sixteen leases at Manoa Marketplace totaling approximately 23,500 square feet of GLA.

◦Nine leases at Kaneohe Bay Shopping Center totaling approximately 52,200 square feet of GLA.

◦Eight leases at Pearl Highlands Center totaling approximately 189,000 square feet of GLA.

•Both overall leased and Same-Store leased occupancy were 95.0% as of December 31, 2022, an increase of 70 basis points compared to December 31, 2021.

◦Both leased and Same-Store leased occupancy in the retail portfolio were 93.8% as of December 31, 2022, an increase of 70 basis points compared to December 31, 2021, primarily due to strong leasing activity at Manoa Marketplace and Pu‘unene Shopping Center.

◦Leased occupancy in the industrial portfolio was 98.4% as of December 31, 2022, an increase of 140 basis points compared to December 31, 2021, primarily due to robust leasing activity at Port Allen and Harbor Industrial. Same-Store leased occupancy in the industrial portfolio was 98.3% as of December 31, 2022, an increase of 140 basis points compared to December 31, 2021.

•The Manoa Marketplace redevelopment project, incorporating sustainable design and building elements, is progressing and remains on schedule to be completed in the third quarter of 2023. Efforts to enhance the visitor experience at this well-located neighborhood center are expected to realize between 8.0% and 8.5% stabilized yield on total estimated project costs, and follow the successful redevelopment of Aikahi Park Shopping Center.

•Land Operations operating profit was $5.7 million in the fourth quarter of 2022, as compared to $29.9 million in the fourth quarter of 2021. Land Operations operating loss was $1.4 million for the year ended December 31, 2022, as compared to an operating profit of $53.2 million for the year ended December 31, 2021. The year-over-year decline in performance was partly attributable to charges during 2022 to the Land Operations segment related to the termination of the defined benefit pension plans, and lower non-core monetization compared to the elevated amount in the prior year (sale of Kukui‘ula residential development and unimproved property sales), partially offset by gain recognized upon the sale of McBryde Sugar and McBryde Resources in the second quarter of 2022.

•Land Operations Adjusted Earnings Before Interest, Taxes, Depreciation and Amortization ("Adjusted EBITDA") was $10.7 million for the fourth quarter of 2022, as compared to $30.2 million in the fourth quarter of 2021. Land Operations Adjusted EBITDA was $67.0 million for the year ended December 31, 2022, as compared to $54.3 million for the year ended December 31, 2021.

•The Company continued to monetize assets including the following transactions that closed in 2022:

◦Approximately 18,900 acres of primarily non-core conservation and agricultural land on the island of Kaua‘i and 100% of the Company's ownership interest in McBryde Resources, Inc., associated with the McBryde Sale in exchange for cash proceeds of $73.9 million.

◦Approximately 1,300 acres of other non-core landholdings in exchange for cash proceeds of $18.3 million

◦4.9 acres at Maui Business Park II in exchange for cash proceeds of $7.7 million.

•Performance of this segment prospectively will be driven by future land sales activity.

•In 2022, the following financing activities were completed:

◦In September, the Company established a plan to repurchase up to $10 million in shares of its common stock when certain market conditions were met. Prior to the expiration of this plan on December 31, 2022, the Company had repurchased shares totaling $4.6 million.

◦In October, the Company entered into two forward-starting interest rate swap agreements with a blended 4.86% interest rate on $130.0 million of future financing.

◦During the year, the Company repaid $38.0 million, net, on its revolving credit facility and repaid $23.2 million related to term debt and mortgages, while initiating no new term debt or mortgages.

•As of December 31, 2022, the Company had an equity market capitalization of $1.4 billion and $472.2 million in total debt, for a total market capitalization of approximately $1.8 billion. The Company's debt-to-total market capitalization was 25.8% as of December 31, 2022. The Company's debt has a weighted-average maturity of 3.3 years, with a weighted-average interest rate of 4.3%. Ninety-eight percent of the Company's debt was at fixed rates at year end.

•As of December 31, 2022, the Company had total liquidity of $520.2 million, consisting of cash on hand of $33.3 million and $486.9 million available on its revolving line of credit.

•The Company reported Consolidated Adjusted EBITDA of $160.7 million for the twelve-month period ended December 31, 2022, compared to $144.1 million for the same period ended December 31, 2021. Net Debt to TTM (trailing twelve months) Consolidated Adjusted EBITDA was 2.7 times as of December 31, 2022, compared to 3.3 times for the same period last year.

•The Company paid a fourth quarter 2022 dividend of $0.22 per share on January 6, 2023.

•The Company's Board declared a first quarter 2023 dividend of $0.22 per share, payable on April 4, 2023, to shareholders of record as of the close of business on March 17, 2023.

•Initial outlook for 2023 includes:

•In 2022, the following ESG activities and highlights occurred:

◦In August, released A&B's Third Annual Corporate Responsibility Report, with enhanced SASB, TCFD and GHG disclosures.

◦In November, completed construction of a 1.3-megawatt rooftop photovoltaic system at Pearl Highlands Center, marking the first of a pipeline of on-site renewable energy generation projects across A&B's CRE portfolio.

◦During the year, made charitable contributions to 181 Hawai‘i-based non-profit organizations, with a particular focus on expanding support for ESG, DEI and social justice-related causes.

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, 12 industrial assets and four office properties, as well as 141 acres of ground leases. A&B is expanding and strengthening its Hawai‘i CRE portfolio and achieving its strategic focus on commercial real estate by monetizing its remaining non-core assets. Over its 153-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.

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NOI is a non-GAAP measure used internally in evaluating the unlevered performance of the Company's Commercial Real Estate portfolio. The Company 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 expenses or 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). The Company 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.

Reconciliations of Commercial Real Estate operating profit (loss) to Commercial Real Estate NOI and Same-Store NOI are as follows:

FFO is presented by the Company as a widely used non-GAAP measure of operating performance for real estate companies. The Company believes that, subject to the following limitations, FFO provides a supplemental measure to net income (calculated in accordance with GAAP) for comparing its performance and operations to those of other REITs. FFO does not represent an alternative to net income calculated in accordance with GAAP. In addition, FFO does not represent cash generated from operating activities in accordance with GAAP, nor does it represent cash available to pay distributions and should not be considered as an alternative to cash flow from operating activities, determined in accordance with GAAP, as a measure of the Company’s liquidity.

The Company presents different forms of FFO:

•Core FFO represents a non-GAAP measure relevant to the operating performance of the Company's commercial real estate business (i.e., its core business). Core FFO is calculated by adjusting CRE operating profit to exclude items in a manner consistent with FFO (i.e., depreciation and amortization related to real estate included in CRE operating profit) and to make further adjustments to include expenses not included in CRE operating profit but that are necessary to accurately reflect the operating performance of its core business (i.e., corporate expenses and interest expense attributable to this core business) or to exclude items that are non-recurring, infrequent, unusual and unrelated to the core business operating performance (i.e., not likely to recur within two years or has not occurred within the prior two years). The Company believes such adjustments facilitate the comparable measurement of the Company's core operating performance over time. The Company believes that Core FFO, which is a supplemental non-GAAP financial measure, provides an additional and useful means to assess and compare the operating performance of REITs.

•FFO represents the Nareit-defined non-GAAP measure for the operating performance of the Company as a whole. The Company's calculation refers to net income (loss) available to A&B common shareholders as its starting point in the calculation of FFO.

Reconciliations of net income (loss) available to A&B common shareholders to FFO and Core FFO are as follows:

Reconciliations of Core FFO starting from Commercial Real Estate operating profit (loss) are as follows:

The Company may report various forms of Earnings Before Interest, Taxes, Depreciation and Amortization (“EBITDA”), on a consolidated basis or a segment basis (e.g., “Consolidated EBITDA” or “Land Operations EBITDA”), as non-GAAP measures used by the Company in evaluating the Company’s and segments’ 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 Company’s and segments’ ongoing operations.

Consolidated EBITDA is calculated by adjusting the Company’s consolidated net income (loss) to exclude the impact of interest expense, income taxes and depreciation and amortization. Land Operations EBITDA is calculated by adjusting Land Operations operating profit (which excludes interest expense and income taxes) to add back depreciation and amortization recorded at the Land Operations segment.

The Company also adjusts Consolidated EBITDA or Land Operations EBITDA (to arrive at “Consolidated Adjusted EBITDA” or “Land Operations Adjusted EBITDA”) for items identified as non-recurring, infrequent or unusual that are not expected to recur in the Company’s core business or segment’s normal operations.

Reconciliations of the Company's consolidated net income to Consolidated EBITDA and Consolidated Adjusted EBITDA are as follows:

						Year Ended December 31,
(amounts in millions, unaudited)						2022						2021
Net Income (Loss)						$	(49.5)					$	35.8
Adjustments:
Depreciation and amortization						38.0						39.6
Interest expense						22.0						26.2
Income tax expense (benefit)						(18.3)						—
Depreciation and amortization related to discontinued operations						5.8						10.8
Interest expense related to discontinued operations						0.2						0.1
Consolidated EBITDA						$	(1.8)					$	112.5
Asset impairments related to the Land Operations Segment						5.0						—
Equity method investment impairment related to discontinued operations						—						2.9
Pension termination						76.9						—
(Income) loss from discontinued operations, net of income taxes and excluding depreciation, amortization and interest expense						80.6						28.7
Consolidated Adjusted EBITDA						$	160.7					$	144.1

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 business, 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.

During the fourth quarter of 2022, the Company changed its segment reporting in its financial statements to reflect how it now manages its continuing operations. The specific changes were made in conjunction with the Company presenting its materials and construction operations, including Grace Pacific, as held for sale and discontinued operations in its financial statements, pursuant to which the Company eliminated the former Materials & Construction segment and reclassified its joint venture interest in a materials company to the Land Operations segment. Below is a reconciliation of the changes that occurred as part of the segment realignment and discontinued operations for the years ended December 31, 2022 and 2021.

Below is a reconciliation of the changes that occurred as part of the segment realignment and discontinued operations for the quarters ended December 31, 2022 and 2021.

Table of Contents

  

Company Overview
Company Profile			4
Glossary of Terms			6
Statement on Management's Use of Non-GAAP Financial Measures			8
Financial Summary
Table 1 – Consolidated Balance Sheets			11
Table 2 – Consolidated Statements of Operations			12
Table 3 – Segment Results			13
Table 4 – Consolidated Statements of Cash Flows			15
Table 5 – Debt Summary			16
Table 6 – Capitalization & Financial Ratios			17
Table 7 – Consolidated Metrics			18
Commercial Real Estate
Table 8 – CRE Metrics			21
Table 9 – Occupancy			23
Table 10 – NOI and Same-Store NOI by Type			24
Table 11 – Improved Property Report			26
Table 12 – Ground Lease Report			28
Table 13 – Top 10 Tenants Ranked by ABR			29
Table 14 – Lease Expiration Schedule			30
Table 15 – New & Renewal Lease Summary			31
Table 16 – Portfolio Repositioning, Redevelopment & Development Summary			32
Table 17 – Transactional Activity (2021 - 2022)			33
Land Operations
Table 18 – Statement of Operating Profit, EBITDA and Adjusted EBITDA			35
Table 19 – Core Real Estate Development-for-sale Projects			36
Table 20 – Components of Land Operations			37

  

Statements in this Supplemental Information document 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 business, 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 (“SEC”). The information in this Supplemental Information document should be evaluated in light of these important risk factors. We do not undertake any obligation to update the Company's forward-looking statements.

The information contained in this Supplemental Information document does not purport to disclose all items required by accounting principles generally accepted in the United States of America (GAAP).

Company Overview
Company Profile

Alexander & Baldwin, Inc. ("A&B" or the "Company") is a fully integrated real estate investment trust ("REIT") headquartered in Honolulu, Hawai‘i. The Company has a history of over 150 years of being an integral piece of Hawai‘i and its economy making it uniquely qualified to create value for shareholders through a strategy focused on asset management and growth primarily in its commercial real estate holdings in Hawai‘i.

The Company operates in two reportable segments: Commercial Real Estate ("CRE") and Land Operations, and is composed of the following as of December 31, 2022:

•A commercial real estate portfolio composed of 3.9 million square feet of improved properties and 140.7 acres of ground leases throughout the Hawaiian islands, including 2.5 million square feet of largely grocery/drugstore-anchored retail centers; and

•A land operations portfolio consisting of approximately 4,112 acres of legacy landholdings and assets that are subject to the Company's simplification and monetization efforts, and 56 acres of core landholdings, including development-for-hold and development-for-sale activities on Oahu and Maui.

In December 2022, the Company's Board of Directors authorized Management to sell the Company's wholly-owned subsidiary, Grace Pacific LLC ("Grace Pacific"), a materials and construction company in Hawai‘i, and Company-owned quarry land on Maui ("Maui Quarries"). The assets and liabilities associated with Grace Pacific and the Maui Quarries have been classified as held for sale and its financial results are classified as discontinued operations for all periods presented herein. Collectively, Grace Pacific and the Maui Quarries made up the majority of activity in the Company's Materials and Construction reportable segment ("M&C"). Accordingly, the former M&C segment has been eliminated and the segment information presented herein excludes the results of Grace Pacific and the Maui Quarries for all periods presented. In conjunction with the elimination of the M&C segment, the Company's remaining equity interest in an unconsolidated materials company was incorporated with the Land Operations reportable segment.

Throughout this Supplemental Information document, references to "we," "our," "us" and "our Company" refer to Alexander & Baldwin, Inc., together with its consolidated subsidiaries.

Company Overview
Glossary of Terms

Company Overview
Statement on Management's Use of Non-GAAP Financial Measures

The Company presents the following non-GAAP financial measures in this Supplemental Information document:

•Consolidated EBITDA

•Consolidated Adjusted EBITDA

•FFO

•Core FFO

•Commercial Real Estate NOI and Same-Store NOI

•Commercial Real Estate EBITDA

•Land Operations EBITDA and Land Operations Adjusted EBITDA

The Company may report various forms of EBITDA (e.g., Segment EBITDA — also referred to as Commercial Real Estate EBITDA and Land Operations EBITDA — and Consolidated 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 Segment EBITDA or Consolidated EBITDA to arrive at Segment Adjusted EBITDA or 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). Segment Adjusted EBITDA may also be referred to as CRE Adjusted EBITDA or Land Operations Adjusted EBITDA (when applicable).

FFO is presented by the Company as a widely used non-GAAP measure of operating performance for real estate companies. The Company believes that, subject to the following limitations, FFO provides a supplemental measure to net income (calculated in accordance with GAAP) for comparing its performance and operations to those of other REITs. FFO does not represent an alternative to net income calculated in accordance with GAAP. In addition, FFO does not represent cash generated from operating activities in accordance with GAAP, nor does it represent cash available to pay distributions and should not be considered as an alternative to cash flow from operating activities, determined in accordance with GAAP, as a measure of the Company’s liquidity. The Company presents different forms of FFO:

•Core FFO represents a non-GAAP measure relevant to the operating performance of the Company's commercial real estate business (i.e., its core business). Core FFO is calculated by adjusting CRE operating profit to exclude items in a manner consistent with FFO (i.e., depreciation and amortization related to real estate included in CRE operating profit) and to make further adjustments to include expenses not included in CRE operating profit but that are necessary to accurately reflect the operating performance of its core business (i.e., corporate expenses and interest expense attributable to this core business) or to exclude items that are non-recurring, infrequent, unusual and unrelated to the core business operating performance (i.e., not likely to recur within two years or has not occurred within the prior two years). The Company believes such adjustments facilitate the comparable measurement of the Company's core operating performance over time. The Company believes that Core FFO, which is a supplemental non-GAAP financial measure, provides an additional and useful means to assess and compare the operating performance of REITs.

•FFO represents the Nareit-defined non-GAAP measure for the operating performance of the Company as a whole. The Company's calculation refers to net income (loss) available to A&B common shareholders as its starting point in the calculation of FFO.

NOI is a non-GAAP measure used internally in evaluating the unlevered performance of the Company's Commercial Real Estate portfolio. The Company 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 expenses or 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). The Company 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 calculations of these financial measures are described in the Glossary of Terms of this Supplemental Information document. To emphasize, the Company's methods of calculating non-GAAP measures may differ from methods employed by other companies and thus may not be comparable to such other companies.

Required reconciliations of these non-GAAP financial measures to the most directly comparable financial measure calculated and presented in accordance with GAAP are set forth in the following tables of this Supplemental Information document:

•Refer to Table 7 – Consolidated Metrics for a reconciliation of consolidated net income to Consolidated EBITDA and Consolidated Adjusted EBITDA, a reconciliation of consolidated net income (loss) available to A&B common shareholders to FFO and Core FFO, as well as a reconciliation of Commercial Real Estate operating profit to Core FFO.

•Refer to Table 8 – CRE Metrics for a reconciliation of Commercial Real Estate operating profit to NOI and Same-Store NOI and a reconciliation of Commercial Real Estate operating profit to Commercial Real Estate EBITDA.

•Refer to Table 18 – Statement of Operating Profit, EBITDA and Adjusted EBITDA for a reconciliation of Land Operations operating profit to Land Operations EBITDA.

Financial Summary
Table 1 – Consolidated Balance Sheets

Financial Summary
Table 2 – Consolidated Statements of Operations

Financial Summary
Table 3 – Segment Results

Financial Summary
Table 4 – Consolidated Statements of Cash Flows    

Financial Summary
Table 5 – Debt Summary

Financial Summary
Table 6 – Capitalization & Financial Ratios

(dollars in millions, except stock price; unaudited)

Debt
Secured debt									$	193.4
Unsecured term debt									266.8
Unsecured revolving credit facility									12.0
Total debt (A)									$	472.2
Add: Net unamortized deferred financing cost / discount (premium)									0.2
Less: Cash and cash equivalents									(33.3)
Net Debt									$	439.1
Market Capitalization			Shares			Stock Price			Market Value
Common stock (NYSE:ALEX)			72,463,275			$18.73			$	1,357.2
Total equity market capitalization (B)									$	1,357.2
Total Market Capitalization (C) = (A) + (B)									$	1,829.4
Total Debt to Total Market Capitalization (A) / (C)									25.8		%
Liquidity
Cash on hand									$	33.3
Unused committed line of credit									486.9
Total liquidity									$	520.2
Financial Ratios
Net Debt to TTM Consolidated Adjusted EBITDA1									2.7
Debt-service Coverage Ratio2									3.6
Fixed-rate debt to total debt									97.5%
Unencumbered CRE Property Ratio3									77.4%

1 Consolidated Adjusted EBITDA for the trailing twelve months is $160.7 million and is calculated on Table 7.

2 The ratio of Consolidated Adjusted EBITDA ($160.7 million) to the sum of debt service ($45.2 million) – which includes interest expense, principal payments for financing leases and term debt, as well as principal amortization of mortgage debt, but excludes balloon payments – for the trailing twelve months.

3 Measured using gross book value, represents unencumbered CRE property ($1,230.2 million) as a percent of total CRE property ($1,590.3 million).

Financial Summary
Table 7 – Consolidated Metrics