HONOLULU, HI (February 28, 2024) /PRNewswire/—Alexander & Baldwin, Inc. (NYSE: ALEX) ("A&B" or "Company"), a Hawai‘i-based company focused on owning, operating, and developing high-quality commercial real estate in Hawai‘i, today announced net loss available to A&B common shareholders of $3.5 million, or $0.05 per diluted share, and Commercial Real Estate ("CRE") operating profit of $17.0 million for the fourth quarter of 2023. The Company reported net income available to A&B common shareholders of $29.7 million, or $0.41 per diluted share, and CRE operating profit of $81.2 million for the full year of 2023.

•Funds From Operations ("FFO") of $19.9 million, or $0.27 per diluted share / Core FFO of $21.0 million, or $0.29 per diluted share

•CRE Same-Store Net Operating Income ("NOI") growth of 4.3% / CRE Same-Store NOI growth of 4.8% excluding collections of previously reserved amounts

•Leased occupancy as of December 31, 2023, was 94.7%

•Comparable new and renewal leasing spreads for the improved portfolio were 11.4% and 7.0%, respectively

•Completed the sale of Grace Pacific LLC ("Grace Pacific") and the Company-owned quarry land on Maui, as well as Grace Pacific's 50% interest in Maui Paving, LLC for a combined $60.0 million (cash proceeds of $45.0 million and a $15.0 million note, which was paid in full subsequent to year-end)

•FFO of $79.4 million, or $1.09 per diluted share / Core FFO of $85.3 million, or $1.17 per diluted share

•CRE Same-Store NOI growth of 4.3% / CRE Same-Store NOI growth of 6.8% excluding collections of previously reserved amounts

•Comparable new and renewal leasing spreads for the improved portfolio were 8.0% and 7.6%, respectively

•Reduced general and administrative expense by $1.9 million, or 5.3%, compared to 2022

Lance Parker, president and chief executive officer, stated: "In the fourth quarter, our commercial real estate portfolio continued to perform well. CRE Same-Store NOI increased by 4.3%, and total leased occupancy ticked up from last quarter to 94.7%. Importantly, we continue to see leasing demand for our high-quality retail and industrial properties, with blended comparable leasing spreads for the quarter at 7.8%."

"We also achieved a major milestone in A&B's simplification strategy with the sale of Grace Pacific, allowing us to sharpen our focus on our core business as the preeminent commercial real estate company in Hawai‘i. As we look ahead, our experienced team is now fully-focused on creating value within our existing CRE assets through capital recycling, and the pursuit of incremental investment opportunities."

•Net loss available to A&B common shareholders and diluted loss per share available to A&B shareholders for the fourth quarter of 2023 were $3.5 million and $0.05 per diluted share, respectively, compared to $71.6 million and $0.99 per diluted share in the same quarter of 2022. Net income available to A&B common shareholders and diluted earnings per share available to A&B shareholders for the full-year 2023 were $29.7 million and $0.41 per diluted share, respectively compared to net loss available to A&B common shareholders and diluted loss per share available to A&B shareholders of $50.8 million and $0.70 per diluted share in 2022.

•Income from continuing operations available to A&B shareholders for the fourth quarter of 2023 was $8.5 million, or $0.12 per diluted share, compared to $16.2 million, or $0.22 per diluted share, in the same quarter of 2022. Income from continuing operations available to A&B shareholders for the full-year 2023 was $40.7 million, or $0.56 per diluted share, compared to $36.9 million, or $0.50 per diluted share in 2022.

•FFO and FFO per diluted share for the fourth quarter of 2023 were $19.9 million and $0.27 per diluted share, respectively, compared to $25.3 million and $0.35 per diluted share, in the same quarter of 2022. FFO and FFO per diluted share for the full-year 2023 were $79.4 million and $1.09 per diluted share, respectively, compared to $73.4 million and $1.01 per diluted share in 2022.

•Core FFO and Core FFO per diluted share for the fourth quarter of 2023 were $21.0 million and $0.29 per diluted share, respectively, compared to $22.2 million and $0.31 per diluted share in the same quarter of 2022. The change in Core FFO from the prior year quarter was due primarily to higher interest expense. Core FFO and Core FFO per diluted share for the full-year 2023 were $85.3 million and $1.17 per diluted share, respectively, compared to $82.2 million and $1.13 per diluted share in 2022. The increase in full-year Core FFO was due primarily to higher CRE income, partially offset by higher interest expense.

•CRE operating revenue for the fourth quarter of 2023 was flat compared to the same quarter in 2022 at $48.4 million. CRE operating revenue for the full-year 2023 increased $6.8 million, or 3.6%, to $194.0 million compared to $187.2 million in 2022.

•CRE operating profit for the fourth quarter of 2023 decreased by $4.2 million, or 19.8%, to $17.0 million, compared to $21.2 million in the same quarter of 2022. The decrease is related primarily to the impairment of assets recognized as a result of the abandonment of potential CRE development projects and changes in the expected holding period assumption for a CRE improved property. CRE operating profit for the full-year 2023 decreased by $0.3 million, or 0.4%, to $81.2 million, compared to $81.5 million in 2022.

•CRE NOI for the fourth quarter of 2023 increased by $1.4 million, or 4.7%, to $30.6 million, compared to $29.2 million in the same quarter of 2022. CRE NOI for the full-year 2023 increased by $5.5 million, or 4.7%, to $123.3 million, compared to $117.8 million in 2022.

•CRE Same-Store NOI for the fourth quarter of 2023 increased by $1.2 million, or 4.3%, to $30.1 million, compared to $28.9 million in the same quarter of 2022. CRE Same-Store NOI for the full-year 2023 increased $5.1 million, or 4.3%, to $122.4 million, compared to $117.4 million in 2022.

•Collections of previously reserved amounts in the fourth quarter of 2023 were $0.4 million compared to $0.5 million in the same quarter of 2022. Collections of previously reserved amounts in 2023 were $2.1 million compared to $4.7 million in 2022.

•During the fourth quarter of 2023, the Company executed a total of 50 improved-property leases, covering approximately 114,300 square feet of gross leasable area ("GLA"). There were 239 leases executed in 2023, comprised of 233 improved-property, covering approximately 623,600 square feet of GLA and six ground leases.

•Comparable leasing spreads in our improved property portfolio were 7.8% for the fourth quarter of 2023, 14.7% for industrial spaces and 7.4% for retail spaces. Full-year comparable leasing spreads for the improved property portfolio were 7.7%, 7.5% for industrial spaces and 7.8% for retail spaces.

•Significant leases executed in our improved property portfolio during the fourth quarter of 2023 included:

◦Two leases at Pearl Highlands Center totaling approximately 46,600 square feet of GLA and $1.8 million of annualized base rent ("ABR").

◦Nine leases related to properties located in Kailua, including Aikahi Park Shopping Center, totaling approximately 11,100 square feet of GLA and $0.6 million of ABR.

•Significant leases executed in our improved property portfolio in 2023 included:

◦Fifty-one leases related to properties located in Kailua, including Aikahi Park Shopping Center, totaling approximately 85,100 square feet of GLA and $3.4 million of ABR.

◦Eight leases at Pearl Highlands Center totaling approximately 92,300 square feet of GLA and $3.3 million of ABR.

◦Twelve leases at Laulani Village totaling approximately 41,700 square feet of GLA and $1.9 million of ABR.

◦Fifteen leases at Queens' Marketplace totaling approximately 35,700 square feet of GLA and $1.5 million of ABR.

◦Seventeen leases at Waipio Industrial totaling approximately 63,000 square feet of GLA and $1.2 million of ABR.

•Significant leasing activity in the ground portfolio during the year included the ground lease renewal at Windward City Shopping Center which increased ABR from $2.8 million to $3.9 million, an increase of $1.1 million, or approximately 39%.

•Overall leased and Same-Store leased occupancy was 95.5% as of December 31, 2023, a decrease of 30 basis points compared to December 31, 2022.

◦Leased occupancy in the retail portfolio was 94.3% as of December 31, 2023, an increase of 50 basis points compared to December 31, 2022. Same-Store leased occupancy in the retail portfolio was 95.6% as of December 31, 2023, an increase of 60 basis points compared to December 31, 2022.

◦Leased occupancy in the industrial portfolio was 96.8% as of December 31, 2023, a decrease of 160 basis points compared to December 31, 2022. Same-Store leased occupancy in the industrial portfolio was 96.7% as of December 31, 2023, a decrease of 170 basis points compared to December 31, 2022.

•In the fourth quarter of 2023, the Company began permitting for a 29,500-square-foot warehouse and distribution center at Maui Business Park II. The single-user space includes 32' clear height and can accommodate up to 14 dock-high loading bays. Construction of this pre-leased space will begin in the second half of 2024, with an in-service date expected in the fourth quarter of 2025.

•In the fourth quarter of 2023, the Company completed construction of a 464-kilowatt rooftop photovoltaic system at Kaka‘ako Commerce Center, the second of many on-site renewable energy generation projects planned for our CRE portfolio.

•In the third quarter of 2023, the Company completed the Manoa Marketplace redevelopment project. The project is expected to generate a stabilized yield on total estimated project costs in the range of 8.0% to 8.5%.

•In the second quarter of 2023, the Company completed the sale-leaseback acquisition of a 33,000-square-foot industrial property located on the island of O‘ahu for $9.5 million, representing a going-in cap rate of 5.6%.

•Land Operations operating profit was $6.3 million for the quarter ended December 31, 2023, compared to an operating profit of $5.7 million for the quarter ended December 31, 2022. Land Operations operating profit for the full-year 2023 was $10.8 million compared to an operating loss of $1.4 million in 2022. The change in full-year Land Operations operating profit is due primarily to activity that occurred in 2022 that did not occur in 2023, including charges to the Land Operations segment related to the termination of the defined benefit pension plans, partially offset by the gain on disposal recognized upon the sale of conservation and agricultural land on the island of Kaua‘i and 100% of the Company's ownership interest in McBryde Resources, Inc.

•Land Operations Adjusted Earnings Before Interest, Taxes, Depreciation and Amortization ("EBITDA") was $6.3 million for the fourth quarter of 2023, as compared to $10.7 million in the fourth quarter of 2022. Land Operations Adjusted EBITDA was $10.8 million for the full-year 2023 compared to $67.0 million in 2022. The change in full-year Land Operations Adjusted EBITDA is due primarily to charges to the Land Operations segment related to the termination of the defined benefit pension plans that occurred in 2022.

•As of December 31, 2023, the Company had an equity market capitalization of $1.4 billion and $464.0 million in total debt, for a total market capitalization of approximately $1.8 billion. The Company's debt-to-total market capitalization was 25.2% as of December 31, 2023. The Company's debt has a weighted-average maturity of 2.5 years, with a weighted-average interest rate of 4.41%. At year end, 92% of the Company's debt was at fixed rates.

•As of December 31, 2023, the Company had total liquidity of $476.5 million, consisting of cash on hand of $13.5 million and $463.0 million available on its revolving line of credit.

•Net Debt to Trailing Twelve Months ("TTM") Consolidated Adjusted EBITDA was 4.2 times as of December 31, 2023, with TTM Consolidated Adjusted EBITDA of $108.1 million for the period ended December 31, 2023.

•During the quarter ended December 31, 2023, the Company repurchased 89,781 of its common shares at a weighted-average price of $16.34 per share, for a total investment of $1.5 million. During 2023, the Company repurchased 181,491 of its common shares at a weighted-average price of $16.53 per share, for a total investment of $3.0 million. These shares were retired upon repurchase.

•The Company paid a fourth quarter 2023 dividend of $0.2225 per share on January 8, 2024.

•The Company's Board declared a first quarter 2024 dividend of $0.2225 per share, payable on April 5, 2024, to shareholders of record as of the close of business on March 15, 2024.

In 2024, the Company will no longer report Core FFO and will begin to report Adjusted FFO. The Company will also provide full-year guidance for FFO per share and Adjusted FFO per share in addition to CRE Same-Store NOI growth % and CRE Same-Store NOI growth %.

•Full-year 2024 guidance is as follows.

•FFO per diluted share guidance is comprised of:

Alexander & Baldwin, Inc. (NYSE: ALEX) (A&B) is the only publicly-traded real estate investment trust to focus exclusively on Hawai‘i commercial real estate and is the state's largest owner of grocery-anchored, neighborhood shopping centers. A&B owns, operates and manages approximately 3.9 million square feet of commercial space in Hawai‘i, including 22 retail centers, 13 industrial assets and four office properties, as well as 142.0 acres of ground lease assets. A&B is expanding and strengthening its CRE portfolio and achieving its strategic focus on commercial real estate in Hawai‘i. 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.

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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:

•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.

As an illustrative example, the Company identified non-cash pension termination charges as a non-recurring, infrequent or unusual item that is not expected to recur in the consolidated or segment’s normal operations (or in the Company’s core business). By excluding these items from Segment EBITDA and Consolidated EBITDA to arrive at Segment Adjusted EBITDA or Consolidated Adjusted EBITDA, the Company believes it provides meaningful supplemental information about its core 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 December 31,
(amounts in millions, unaudited)						2023						2022
Net Income (Loss)						$	33.0					$	(49.5)
Adjustments:
Depreciation and amortization						36.8						38.0
Interest expense						23.0						22.0
Income tax expense (benefit)						—						(18.3)
Depreciation and amortization related to discontinued operations						—						5.8
Interest expense related to discontinued operations						0.5						0.2
Consolidated EBITDA						$	93.3					$	(1.8)
Asset impairments						4.8						5.0
Pension termination						—						76.9
Interest rate swap fair value adjustment						2.7						—
(Income) loss from discontinued operations, net of income taxes and excluding depreciation, amortization and interest expense						7.3						80.6
Consolidated Adjusted EBITDA						$	108.1					$	160.7

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.

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 – Condensed Consolidated Balance Sheets			11
Table 2 – Condensed Consolidated Statements of Operations			12
Table 3 – Segment Results			13
Table 4 – Condensed 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 Redevelopment & Development Summary			32
Table 17 – Transactional Activity (2022 - 2023)			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, 2023:

•A commercial real estate portfolio composed of 22 retail centers, 13 industrial assets, and four office properties, representing a total of 3.9 million square feet of improved properties, including 2.5 million square feet of largely grocery/drugstore-anchored retail centers, as well as 142.0 acres of ground lease assets throughout the Hawaiian islands; and

•A land operations portfolio consisting of approximately 3,652 acres of legacy landholdings and assets that are subject to the Company's simplification and monetization efforts, and 53 acres of core landholdings, including development-for-hold and development-for-sale activities on Oahu and Maui.

In November 2023, the Company completed the sale of its interests in Grace Pacific, a materials and construction company, and the Company-owned quarry land on Maui (collectively, the “Grace Disposal Group”). The assets and liabilities associated with the Grace Disposal Group were classified as held for sale in the consolidated balance sheet as of December 31, 2022, and financial results are classified as discontinued operations in the consolidated statements of operations and cash flows for all periods presented.

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 and Commercial Real Estate Adjusted 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).

As an illustrative example, the Company identified non-cash impairment and pension termination charges as non-recurring, infrequent or unusual items that are not expected to recur in the consolidated or segment’s normal operations (or in the Company’s core business). By excluding these items from Segment EBITDA and Consolidated EBITDA to arrive at Segment Adjusted EBITDA or Consolidated Adjusted EBITDA, the Company believes it provides meaningful supplemental information about its core 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.

•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.

•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.

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 and Commercial Real Estate Adjusted 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 and Land Operations Adjusted EBITDA.

Financial Summary
Table 1 – Condensed Consolidated Balance Sheets

Financial Summary
Table 2 – Condensed Consolidated Statements of Operations

Financial Summary
Table 3 – Segment Results

Financial Summary
Table 4 – Condensed 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									$	189.7
Unsecured term debt									237.3
Unsecured revolving credit facility									37.0
Total debt (A)									$	464.0
Add: Net unamortized deferred financing cost / discount (premium)									0.1
Less: Cash and cash equivalents									(13.5)
Net Debt									$	450.6
Market Capitalization			Shares			Stock Price			Market Value
Common stock (NYSE:ALEX)			72,447,510			$19.02			$	1,378.0
Total equity market capitalization (B)									$	1,378.0
Total Market Capitalization (C) = (A) + (B)									$	1,842.0
Total Debt to Total Market Capitalization (A) / (C)									25.2%
Liquidity
Cash on hand									$	13.5
Unused committed line of credit									463.0
Total liquidity									$	476.5
Financial Ratios
Net Debt to TTM Consolidated Adjusted EBITDA1									4.2
Debt-service Coverage Ratio2									1.9
Fixed-rate debt to total debt									92.0%
Unencumbered CRE Property Ratio3									77.4%

1 Consolidated Adjusted EBITDA for the trailing twelve months is $108.1 million and is calculated on Table 7.

2 The ratio of Consolidated Adjusted EBITDA ($108.1 million) to the sum of debt service ($58.0 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 ($1,251.4 million) as a percent of total CRE property ($1,616.6 million).

Financial Summary
Table 7 – Consolidated Metrics