x
|
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
|
|
SECURITIES EXCHANGE ACT OF 1934
|
|
For the quarterly period ended September 30, 2012
|
|
OR
|
o
|
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
|
|
SECURITIES EXCHANGE ACT OF 1934
|
|
For the transition period from ______________________ to _________________
|
|
Commission file number 001-35492
|
|
(Exact name of registrant as specified in its charter)
|
Hawaii
|
45-4849780
|
(State or other jurisdiction of
incorporation or organization)
|
(I.R.S. Employer
Identification No.)
|
P. O. Box 3440, Honolulu, Hawaii
822 Bishop Street, Honolulu, Hawaii
(Address of principal executive offices)
|
9680l
96813
(Zip Code)
|
|
(808) 525-6611
|
|
(Registrant’s telephone number, including area code)
|
|
N/A
|
|
(Former name, former address, and former
|
|
fiscal year, if changed since last report)
|
Large accelerated filer x
|
Accelerated filer o
|
Non-accelerated filer o (Do not check if a smaller reporting company)
|
Smaller reporting company o
|
|
Number of shares of common stock outstanding as of September 30, 2012: 42,865,516
|
Three Months Ended
|
Nine Months Ended
|
||||||||||||
September 30,
|
September 30,
|
||||||||||||
2012
|
2011
|
2012
|
2011
|
||||||||||
Operating Revenue:
|
|||||||||||||
Real estate leasing
|
$
|
24.9
|
$
|
24.0
|
$
|
75.8
|
$
|
72.9
|
|||||
Real estate development and sales
|
0.1
|
0.8
|
9.6
|
11.9
|
|||||||||
Agribusiness
|
67.9
|
37.1
|
121.4
|
96.3
|
|||||||||
Total operating revenue
|
92.9
|
61.9
|
206.8
|
181.1
|
|||||||||
Operating Costs and Expenses:
|
|||||||||||||
Cost of real estate leasing
|
14.4
|
14.9
|
43.2
|
43.4
|
|||||||||
Cost of real estate development and sales
|
0.1
|
0.7
|
4.3
|
7.2
|
|||||||||
Costs of agribusiness revenues
|
58.6
|
33.3
|
101.5
|
81.3
|
|||||||||
Selling, general and administrative
|
6.5
|
7.4
|
21.9
|
21.8
|
|||||||||
Gain on sale of agricultural parcel
|
(7.3
|
)
|
--
|
(7.3
|
)
|
--
|
|||||||
Impairment of real estate assets (Santa Barbara)
|
--
|
--
|
5.1
|
--
|
|||||||||
Separation costs
|
0.7
|
--
|
6.8
|
--
|
|||||||||
Total operating costs and expenses
|
73.0
|
56.3
|
175.5
|
153.7
|
|||||||||
Operating Income
|
19.9
|
5.6
|
31.3
|
27.4
|
|||||||||
Other Income and (Expense):
|
|||||||||||||
Income (loss) related to real estate joint ventures
|
(1.0
|
)
|
(1.0
|
)
|
(3.7
|
)
|
0.6
|
||||||
Impairment and equity losses related to Bakersfield joint venture
|
--
|
--
|
(4.7
|
)
|
--
|
||||||||
Gain on sale of investment and other
|
--
|
--
|
--
|
6.2
|
|||||||||
Interest income
|
--
|
--
|
--
|
0.2
|
|||||||||
Interest expense
|
(3.6
|
)
|
(4.4
|
)
|
(11.7
|
)
|
(12.9
|
)
|
|||||
Income From Continuing Operations Before Income Taxes
|
15.3
|
0.2
|
11.2
|
21.5
|
|||||||||
Income tax expense
|
1.9
|
0.1
|
1.8
|
9.3
|
|||||||||
Income From Continuing Operations
|
13.4
|
0.1
|
9.4
|
12.2
|
|||||||||
Income From Discontinued Operations (net of income taxes)
|
--
|
4.3
|
2.4
|
14.3
|
|||||||||
Net Income
|
$
|
13.4
|
$
|
4.4
|
$
|
11.8
|
$
|
26.5
|
|||||
Basic Earnings Per Share:
|
|||||||||||||
Continuing operations
|
$
|
0.31
|
$
|
--
|
$
|
0.22
|
$
|
0.29
|
|||||
Discontinued operations
|
--
|
0.10
|
0.06
|
0.34
|
|||||||||
Net income
|
$
|
0.31
|
$
|
0.10
|
$
|
0.28
|
$
|
0.63
|
|||||
Diluted Earnings Per Share:
|
|||||||||||||
Continuing operations
|
$
|
0.31
|
$
|
--
|
$
|
0.22
|
$
|
0.29
|
|||||
Discontinued operations
|
--
|
0.10
|
0.06
|
0.34
|
|||||||||
Net income
|
$
|
0.31
|
$
|
0.10
|
$
|
0.28
|
$
|
0.63
|
|||||
Weighted Average Number of Shares Outstanding:
|
|||||||||||||
Basic
|
42.6
|
42.4
|
42.5
|
42.4
|
|||||||||
Diluted
|
43.3
|
42.4
|
42.7
|
42.4
|
Three Months Ended
|
Nine Months Ended
|
||||||||||||
September 30,
|
September 30,
|
||||||||||||
2012
|
2011
|
2012
|
2011
|
||||||||||
Net Income
|
$
|
13.4
|
$
|
4.4
|
$
|
11.8
|
$
|
26.5
|
|||||
Other Comprehensive Income, Net of Tax:
|
|||||||||||||
Defined benefit pension plans:
|
|||||||||||||
Net loss and prior service cost
|
--
|
--
|
(1.9
|
)
|
--
|
||||||||
Less: amortization of prior service cost (credit) included in net periodic pension cost
|
(0.1
|
)
|
0.1
|
(0.5
|
)
|
0.5
|
|||||||
Less: amortization of net loss included in net periodic pension cost
|
1.8
|
1.3
|
5.7
|
3.9
|
|||||||||
Income taxes
|
(0.7
|
)
|
(0.5
|
)
|
(1.6
|
)
|
(1.7
|
)
|
|||||
Other Comprehensive Income
|
1.0
|
0.9
|
1.7
|
2.7
|
|||||||||
Comprehensive Income
|
$
|
14.4
|
$
|
5.3
|
$
|
13.5
|
$
|
29.2
|
September 30,
|
December 31,
|
|||||||
2012
|
2011
|
|||||||
ASSETS
|
||||||||
Current Assets:
|
||||||||
Cash and cash equivalents
|
$
|
4.1
|
$
|
11.7
|
||||
Accounts receivable, net
|
7.7
|
6.7
|
||||||
Inventories
|
42.0
|
36.3
|
||||||
Real estate held for sale
|
1.9
|
2.8
|
||||||
Deferred income taxes
|
4.0
|
3.5
|
||||||
Prepaid expenses and other assets
|
10.7
|
7.8
|
||||||
Total current assets
|
70.4
|
68.8
|
||||||
Investments in Affiliates
|
312.5
|
290.8
|
||||||
Real Estate Developments
|
144.6
|
143.3
|
||||||
Property – net
|
843.8
|
830.6
|
||||||
Other Assets
|
67.1
|
53.1
|
||||||
Total assets
|
$
|
1,438.4
|
$
|
1,386.6
|
||||
LIABILITIES AND EQUITY
|
||||||||
Current Liabilities:
|
||||||||
Notes payable and current portion of long-term debt
|
$
|
8.1
|
$
|
34.5
|
||||
Accounts payable
|
20.4
|
20.8
|
||||||
Accrued and other liabilities
|
27.7
|
34.7
|
||||||
Total current liabilities
|
56.2
|
90.0
|
||||||
Long-term Liabilities:
|
||||||||
Long-term debt
|
244.0
|
327.2
|
||||||
Deferred income taxes
|
156.3
|
164.1
|
||||||
Accrued pension and postretirement benefits
|
54.2
|
54.6
|
||||||
Other non-current liabilities
|
22.2
|
24.9
|
||||||
Total long-term liabilities
|
476.7
|
570.8
|
||||||
Commitments and Contingencies (Note 3)
|
||||||||
Equity:
|
||||||||
Common stock
|
938.0
|
--
|
||||||
Preferred stock
|
--
|
--
|
||||||
Net investment
|
--
|
773.4
|
||||||
Accumulated other comprehensive loss
|
(45.9
|
)
|
(47.6
|
)
|
||||
Retained earnings
|
13.4
|
--
|
||||||
Total equity
|
905.5
|
725.8
|
||||||
Total liabilities and equity
|
$
|
1,438.4
|
$
|
1,386.6
|
Nine Months Ended
|
||||||||
September 30,
|
||||||||
2012
|
2011
|
|||||||
Cash Flows used in Operating Activities:
|
(12.8
|
)
|
(6.1
|
)
|
||||
Cash Flows from Investing Activities:
|
||||||||
Capital expenditures
|
(34.4
|
)
|
(11.5
|
)
|
||||
Proceeds from disposal of property and other assets
|
0.8
|
8.7
|
||||||
Payments for purchases of investments in affiliates
|
(8.0
|
)
|
(22.9
|
)
|
||||
Proceeds from investments in affiliates
|
1.8
|
7.9
|
||||||
Net cash used in investing activities
|
(39.8
|
)
|
(17.8
|
)
|
||||
Cash Flows from Financing Activities:
|
||||||||
Proceeds from issuances of debt
|
122.0
|
120.0
|
||||||
Payments of debt and deferred financing costs
|
(231.1
|
)
|
(70.7
|
)
|
||||
Proceeds from (payments on) line-of-credit agreements, net
|
(3.5
|
)
|
0.7
|
|||||
Contributions from (distribution to) Alexander & Baldwin Holdings, Inc., net (a)
|
146.0
|
(29.0
|
)
|
|||||
Proceeds from issuances of capital stock, including excess tax benefit
|
11.6
|
--
|
||||||
Net cash provided by financing activities
|
45.0
|
21.0
|
||||||
Cash and Cash Equivalents:
|
||||||||
Net decrease for the period
|
(7.6
|
)
|
(2.9
|
)
|
||||
Balance, beginning of period
|
11.7
|
5.5
|
||||||
Balance, end of period
|
$
|
4.1
|
$
|
2.6
|
||||
Other Cash Flow Information:
|
||||||||
Interest paid
|
$
|
(11.9
|
)
|
$
|
(13.8
|
)
|
||
Income taxes paid
|
$
|
(6.3
|
)
|
$
|
(14.7
|
)
|
||
Other Non-cash Information:
|
||||||||
Depreciation and amortization expense
|
$
|
26.3
|
$
|
26.0
|
||||
Tax-deferred property sales
|
$
|
17.2
|
$
|
44.3
|
||||
Tax-deferred property purchases
|
$
|
(9.4
|
)
|
$
|
(30.9
|
)
|
||
Transfer of real estate development assets to Waihonua joint venture investment
|
$
|
24.2
|
$
|
--
|
||||
Capital expenditures included in accounts payable and accrued expenses
|
$
|
5.6
|
$
|
4.3
|
Accumulated
|
||||||||||||||||||||||
Other
|
||||||||||||||||||||||
Compre-
|
||||||||||||||||||||||
Common Stock
|
Net
|
hensive
|
Retained
|
|||||||||||||||||||
Shares
|
Value
|
Investment
|
Loss
|
Earnings
|
Total
|
|||||||||||||||||
Balance at January 1, 2012
|
—
|
$
|
—
|
$
|
773.4
|
$
|
(47.6
|
)
|
$
|
—
|
$
|
725.8
|
||||||||||
Net income (loss)
|
—
|
—
|
(1.6
|
)
|
—
|
13.4
|
11.8
|
|||||||||||||||
Other comprehensive income, net of tax
|
—
|
—
|
—
|
1.7
|
—
|
1.7
|
||||||||||||||||
Contribution from Alexander & Baldwin Holdings, Inc.—net (a)
|
—
|
—
|
154.5
|
—
|
—
|
154.5
|
||||||||||||||||
Conversion of net investment of Alexander & Baldwin Holdings, Inc. into common stock
|
42.4
|
926.3
|
(926.3
|
)
|
—
|
—
|
—
|
|||||||||||||||
Share-based compensation
|
—
|
0.9
|
—
|
—
|
—
|
0.9
|
||||||||||||||||
Shares issued
|
0.5
|
10.2
|
—
|
—
|
—
|
10.2
|
||||||||||||||||
Excess tax benefit from share-based awards
|
—
|
0.6
|
—
|
—
|
—
|
0.6
|
||||||||||||||||
Balance, September 30, 2012
|
42.9
|
$
|
938.0
|
$
|
—
|
$
|
(45.9
|
)
|
$
|
13.4
|
$
|
905.5
|
(1)
|
Description of Business. Prior to June 29, 2012, Alexander & Baldwin, Inc. (“A&B” or the “Company”) was a wholly owned subsidiary of Alexander & Baldwin Holdings, Inc. (“Holdings”). On June 29, 2012, Holdings distributed to its shareholders all of the shares of A&B stock in a tax-free distribution (the “Separation”). Holders of Holdings common stock received one share of A&B common stock for each share of Holdings common stock held at the close of business on June 18, 2012, the record date. On July 2, 2012, A&B began regular trading on the New York Stock Exchange under the ticker symbol “ALEX” as an independent, public company. A&B is headquartered in Honolulu and operates in three segments in two industries—Real Estate and Agribusiness.
|
|
Real Estate: Real Estate consists of two segments, both of which have operations in Hawaii and on the Mainland. The Real Estate Development and Sales segment generates its revenues through the development and sale of land and commercial and residential properties. The Real Estate Leasing segment owns, operates, and manages retail, office, and industrial properties. Real estate activities are conducted through A&B Properties, Inc. and various other wholly owned subsidiaries of A&B.
|
|
Agribusiness: Agribusiness, which contains one segment, produces bulk raw sugar, specialty food grade sugars, and molasses; markets and distributes specialty food-grade sugars; provides general trucking services, mobile equipment maintenance, and repair services in Hawaii; leases agricultural land to third parties; and generates and sells electricity, to the extent not used in the Company’s Agribusiness operations.
|
|
Separation. On June 29, 2012, the Company completed its legal separation from Alexander & Baldwin Holdings, Inc. In connection with the Separation, Holdings entered into several agreements with the Company that govern the ongoing relationship between Holdings and the Company, including a Separation and Distribution Agreement, Tax Matters Agreement, Employee Matters Agreement and Transition Services Agreement.
|
(2)
|
Basis of Presentation. The financial statements and related financial information pertaining to the period preceding the Separation have been presented on a combined basis and reflect the financial position, results of operations and cash flows of the real estate and agriculture businesses and corporate functions of Alexander & Baldwin, Inc., all of which were under common ownership and common management prior to the Separation. The financial statements and related financial information pertaining to the period subsequent to the Separation have been presented on a consolidated basis. The financial statements for periods prior to the Separation included herein may not necessarily reflect A&B’s results of operations, financial position and cash flows in the future or what its results of operations, financial position and cash flows would have been had A&B been a stand-alone company during the periods presented.
|
|
The condensed consolidated financial statements are unaudited. Because of the nature of the Company’s operations, the results for interim periods are not necessarily indicative of results to be expected for the year. While these condensed consolidated financial statements reflect all normal recurring adjustments that are, in the opinion of management, necessary for fair presentation of the results of the interim period, they do not include all of the information and footnotes required by U.S. generally accepted accounting principles (GAAP) for complete financial statements. Therefore, the interim condensed consolidated financial statements should be read in conjunction with the combined balance sheets as of December 31, 2011 and 2010, and the related combined statements of income, comprehensive income, equity, and cash flows for each of the three years in the period ended December 31, 2011 and the notes thereto included in the information statement filed as exhibit 99.1 to the Company’s registration statement on Form 10.
|
(3)
|
Commitments, Guarantees and Contingencies: Commitments and financial arrangements (excluding capital lease commitments that are disclosed in Note 8 of the information statement filed as exhibit 99.1 to the Company’s registration statement on Form 10), included the following (in millions):
|
Standby letters of credit related to real estate development projects
|
$11.9
|
Performance bonds related to real estate construction
|
$36.1
|
|
A&B is a party to, or may be contingently liable in connection with, other legal actions arising in the normal conduct of its businesses, the outcomes of which, in the opinion of management after consultation with counsel, would not have a material effect on A&B’s condensed combined financial statements as a whole.
|
(4)
|
Earnings Per Share (“EPS”). The computation of basic and diluted earnings per common share for all periods prior to Separation is calculated using the number of shares of ALEX common stock outstanding on July 2, 2012, the first day of trading following the June 29, 2012 distribution of ALEX common stock to Holdings shareholders, as if those shares were outstanding for those periods. For all periods prior to Separation, there were no dilutive shares because no actual A&B shares or share-based awards were outstanding prior to the Separation.
|
|
Earnings Per Share (“EPS”): The number of shares used to compute basic and diluted earnings per share is as follows (in millions):
|
Quarter Ended
September 30,
|
Nine Months
Ended
September 30,
|
||||||||
2012
|
2011
|
2012
|
2011
|
||||||
Denominator for basic EPS – weighted average shares
|
42.6
|
42.4
|
42.5
|
42.4
|
|||||
Effect of dilutive securities:
|
|||||||||
Employee/director stock options and restricted stock units
|
0.7
|
--
|
0.2
|
--
|
|||||
Denominator for diluted EPS – weighted average shares
|
43.3
|
42.4
|
42.7
|
42.4
|
(5)
|
Fair Value of Financial Instruments. The fair values of receivables and short-term borrowings approximate their carrying values due to the short-term nature of the instruments. The Company’s cash and cash equivalents, consisting principally of cash on deposit, may from time to time include short-term money markets funds. The fair values of these money market funds, based on market prices (level 2), approximate their carrying values due to their short-maturities. The carrying amount and fair value of the Company’s long-term debt at September 30, 2012 was $244.0 million and $267.2 million, respectively, and $327.2 million and $342.2 million at December 31, 2011, respectively. The fair value of long-term debt is calculated by discounting the future cash flows of the debt at rates based on instruments with similar risk, terms and maturities as compared to the Company’s existing debt arrangements (level 2).
|
|
Non-financial assets measured at fair value on a nonrecurring basis at September 30, 2012 consisted of land held for real estate development and an investment in affiliate that was written-down to estimated fair value during the second quarter of 2012. The aggregate fair values of these assets were classified in level 3 of the fair value hierarchy.
|
|
|
(6)
|
Share-Based Compensation. Effective as of the completion of the Separation, all A&B employees that held Holdings restricted stock units (“RSUs”) on June 29, 2012 (the “Distribution Date”) received replacement A&B RSUs with terms and conditions substantially identical to the terms and conditions formerly applicable to the Holdings RSUs replaced. Additionally, effective as of the completion of the Separation, A&B employees that held Holdings stock options on the Distribution Date received replacement A&B stock options with terms and conditions substantially identical to the terms and conditions formerly applicable to the Holdings stock options. The number of shares and exercise price of each replacement award were adjusted in order to preserve the aggregate intrinsic value of the awards held by such employee.
|
|
Weighted
|
Weighted
|
|||||||||
Average
|
Average
|
Aggregate
|
||||||||
2012
|
Exercise
|
Contractual
|
Intrinsic
|
|||||||
Plan
|
Price
|
Life
|
Value
|
|||||||
Outstanding, January 1, 2012
|
--
|
--
|
||||||||
Replacement awards granted upon Separation
|
2,410.1
|
$20.01
|
||||||||
Exercised
|
(495.3
|
)
|
$22.85
|
|||||||
Forfeited and expired
|
--
|
--
|
||||||||
Outstanding, September 30, 2012
|
1,914.8
|
$19.27
|
5.8
|
$19,600
|
||||||
Exercisable, September 30, 2012
|
1,423.9
|
$19.18
|
4.9
|
$14,700
|
2012
|
||||||||||||
Plan
|
Weighted
|
|||||||||||
Restricted
|
Average
|
|||||||||||
Stock
|
Grant-Date
|
|||||||||||
Units
|
Fair Value
|
|||||||||||
Outstanding, January 1, 2012
|
--
|
--
|
||||||||||
Replacement awards granted upon Separation
|
316.8
|
$20.23
|
||||||||||
Granted
|
13.2
|
$25.30
|
||||||||||
Vested
|
--
|
--
|
||||||||||
Canceled
|
--
|
--
|
||||||||||
Outstanding, September 30, 2012
|
330.0
|
$20.43
|
Quarter Ended
|
Nine Months Ended
|
|||||||||||||||
September 30,
|
September 30,
|
|||||||||||||||
2012
|
2011
|
2012
|
2011
|
|||||||||||||
Share-based expense (net of estimated forfeitures):
|
||||||||||||||||
Stock options
|
$
|
0.4
|
$
|
0.3
|
$
|
1.8
|
$
|
0.9
|
||||||||
Restricted stock units
|
0.4
|
0.9
|
2.4
|
2.7
|
||||||||||||
Total share-based expense
|
0.8
|
1.2
|
4.2
|
3.6
|
||||||||||||
Total recognized tax benefit
|
(0.3
|
)
|
(0.3
|
)
|
(1.4
|
)
|
(0.8
|
)
|
||||||||
Share-based expense (net of tax)
|
$
|
0.5
|
$
|
0.9
|
$
|
2.8
|
$
|
2.8
|
(7)
|
Discontinued Operations. In 2012, the revenues and expenses of Firestone Boulevard Building and an industrial property in California have been classified as discontinued operations. In 2011, the revenues and expenses of 1420 Kapiolani, Triangle Square, Arbor Park Shopping Center, Wakea Business Center II, and two commercial buildings on Maui and Oahu were classified as discontinued operations.
|
Quarter Ended
|
Nine Months Ended
|
||||||||||||||
September 30,
|
September 30,
|
||||||||||||||
2012
|
2011
|
2012
|
2011
|
||||||||||||
Proceeds from the Sale of Income-Producing Properties
|
$
|
--
|
$
|
8.5
|
$
|
8.9
|
$
|
45.1
|
|||||||
Real Estate Leasing Revenue
|
--
|
0.5
|
0.1
|
2.6
|
|||||||||||
Gain on Sale of Income-Producing Properties
|
--
|
6.9
|
3.9
|
22.2
|
|||||||||||
Real Estate Leasing Operating Profit
|
--
|
0.3
|
--
|
1.7
|
|||||||||||
Total Operating Profit Before Taxes
|
--
|
7.2
|
3.9
|
23.9
|
|||||||||||
Income Tax Expense
|
--
|
2.9
|
1.5
|
9.6
|
|||||||||||
Income from Discontinued Operations
|
$
|
--
|
$
|
4.3
|
$
|
2.4
|
$
|
14.3
|
(8)
|
Pension and Post-retirement Plans. The Company has defined benefit pension plans that cover substantially all non-bargaining unit and certain bargaining unit employees. The Company also has unfunded non-qualified plans that provide benefits in excess of the amounts permitted to be paid under the provisions of the tax law to participants in qualified plans.
|
|
Effective January 1, 2012, the Company froze benefit accruals under its traditional defined benefit plans for non-bargaining unit employees hired before January 1, 2008 and instituted a cash balance defined benefit pension plan. Non-bargaining unit employees hired after January 1, 2008 were not eligible to participate in the traditional defined benefit pension plan, which has since been frozen for all non-bargaining unit employees, but these employees are participants in the cash balance defined benefit pension plan. Retirement benefits under the cash balance pension plan are based on a fixed percentage of employee eligible compensation, plus interest. The plan interest credit rate will vary from year-to-year based on the ten-year U.S. Treasury rate.
|
|
The assumptions related to discount rates, expected long-term rates of return on invested plan assets, salary increases, age, mortality and health care cost trend rates, along with other factors, are used in determining the assets, liabilities and expenses associated with pension benefits. Management reviews the assumptions annually with its independent actuaries, taking into consideration existing and future economic conditions and the Company’s intentions with respect to these plans. Management believes that its assumptions and estimates are reasonable. Different assumptions, however, could result in material changes to the assets, obligations and costs associated with benefit plans.
|
Pension Benefits
|
Post-retirement Benefits
|
|||||||||||||||
2012
|
2011
|
2012
|
2011
|
|||||||||||||
Service cost
|
$
|
0.6
|
$
|
0.8
|
$
|
--
|
$
|
--
|
||||||||
Interest cost
|
2.0
|
2.3
|
0.1
|
0.2
|
||||||||||||
Expected return on plan assets
|
(2.6
|
)
|
(2.9
|
)
|
--
|
--
|
||||||||||
Amortization of prior service cost (credit)
|
(0.2
|
)
|
0.1
|
--
|
--
|
|||||||||||
Amortization of net loss (gain)
|
2.0
|
1.2
|
(0.1
|
)
|
--
|
|||||||||||
Net periodic benefit cost
|
$
|
1.8
|
$
|
1.5
|
$
|
--
|
$
|
0.2
|
|
The components of net periodic benefit cost recorded for the nine months of 2012 and 2011 were as follows (in millions):
|
Pension Benefits
|
Post-retirement Benefits
|
|||||||||||||||
2012
|
2011
|
2012
|
2011
|
|||||||||||||
Service cost
|
$
|
1.8
|
$
|
2.6
|
$
|
0.1
|
$
|
0.2
|
||||||||
Interest cost
|
6.1
|
6.9
|
0.4
|
0.6
|
||||||||||||
Expected return on plan assets
|
(7.8
|
)
|
(8.7
|
)
|
--
|
--
|
||||||||||
Amortization of prior service cost (credit)
|
(0.6
|
)
|
0.5
|
--
|
--
|
|||||||||||
Amortization of net loss (gain)
|
6.0
|
3.6
|
(0.2
|
)
|
--
|
|||||||||||
Net periodic benefit cost
|
$
|
5.5
|
$
|
4.9
|
$
|
0.3
|
$
|
0.8
|
|
Net periodic benefit cost for 2012 is expected to total $7.2 million for pension benefits and $0.4 million for post-retirement benefits. In the nine months ended September 30, 2012, the Company made cash contributions to its pension plans totaling approximately $2.6 million.
|
(9)
|
Investments in Affiliates. At September 30, 2012, investments in affiliates consisted principally of equity investments in limited liability companies. The Company has the ability to exercise significant influence over the operating and financial policies of these investments and, accordingly, accounts for its investments using the equity method of accounting. The Company’s operating results include its proportionate share of net loss from its equity method investments. Summarized financial information for the Company’s significant equity method investments in its Bakersfield and Kukui’ula joint ventures for the three and nine months ended September 30, 2012 and 2011 was as follows (in millions):
|
Three Months Ended September 30,
|
Nine Months Ended September 30,
|
|||
2012
|
2011
|
2012
|
2011
|
|
Real Estate joint ventures:
|
||||
Operating revenue
|
$ 3.6
|
$ 1.7
|
$ 10.9
|
$ 10.6
|
Operating income*
|
$ (0.6)
|
$ (1.5)
|
$ (9.3)
|
$ 0.2
|
Loss from continuing operations*
|
$ (1.1)
|
$ (2.1)
|
$ (10.9)
|
$ (1.4)
|
Net loss*
|
$ (1.1)
|
$ (2.1)
|
$ (10.9)
|
$ (1.4)
|
|
*
|
Includes a $6.5 million non-cash impairment write-down of entitled land (recognized at the joint venture level) owned by the Bakersfield joint venture in the nine months ended September 30, 2012.
|
(10)
|
Related Party Transactions. Effective upon the completion of the Separation, A&B ceased to be a related party of Holdings. Prior to the Separation, transactions with Holdings were considered related party transactions, as discussed below.
|
|
Services and lease agreements. Historically, Holdings provided vessel management services to the Company for its bulk sugar vessel, the MV Moku Pahu, the cost of which is included in the cost of Agribusiness revenues. Additionally, the Company recognized lease income in Real Estate Leasing revenue for an industrial warehouse space in Savannah, Georgia, that is leased to Holdings. The Company also recognized Agribusiness revenue for equipment and repair services provided to Holdings, and is reimbursed at cost for various other services provided to Holdings.
|
|
The amounts of these related party transactions are as follows:
|
Three Months Ended September 30,
|
Nine Months Ended September 30,
|
|||
(In millions)
|
2012
|
2011
|
2012
|
2011
|
Vessel management services expenses
|
$ --
|
$ (1.0)
|
$ (2.0)
|
$ (2.9)
|
Lease income from affiliate
|
--
|
1.1
|
2.1
|
3.2
|
Equipment and repair services income and other
|
--
|
0.7
|
1.4
|
1.9
|
Related party income, net
|
$ --
|
$ 0.8
|
$ 1.5
|
$ 2.2
|
(11)
|
New Accounting Pronouncements. Comprehensive Income - In June 2011, the Financial Accounting Standards Board (“FASB”) issued ASU No. 2011-05, Comprehensive Income (Topic 220)—Presentation of Comprehensive Income (ASU 2011-05), to require an entity to present the total of comprehensive income, the components of net income, and the components of other comprehensive income either in a single continuous statement of comprehensive income or in two separate but consecutive statements. ASU 2011-05 eliminates the option to present the components of other comprehensive income as part of the statement of equity. ASU 2011-05 is to be applied retrospectively and is effective for fiscal years and interim periods within those years, beginning after December 15, 2011. The Company adopted the standard effective January 1, 2012. The standard changed the presentation of the Company’s condensed consolidated financial statements but did not affect the calculation of net income, comprehensive income or earnings per share.
|
Income Taxes. The Company will be included in the consolidated tax return of Matson, Inc. (formerly Alexander & Baldwin Holdings, Inc.) for results occurring prior to June 30, 2012. Subsequent to June 30, 2012, the Company will report as a separate taxpayer. The current and deferred income tax expense recorded in the condensed consolidated financial statements has been determined by applying the provisions of ASC 740 as if the Company were a separate taxpayer.
|
|
The Company makes certain estimates and judgments in determining income tax expense for financial statement purposes. These estimates and judgments are applied in the calculation of tax credits, tax benefits and deductions, and in the calculation of certain deferred tax assets and liabilities, which arise from differences in the timing of recognition of revenue and expense for tax and financial statement purposes. Deferred tax assets and deferred tax liabilities are adjusted to the extent necessary to reflect tax rates expected to be in effect when the temporary differences reverse. Adjustments may be required to deferred tax assets and deferred tax liabilities due to changes in tax laws and audit adjustments by tax authorities. To the extent adjustments are required in any given period, the adjustments would be included within the tax provision in the condensed consolidated statements of income or balance sheets.
|
(13)
|
Segment Results. Segment results for the quarter and the nine months ended September 30, 2012 and 2011 were as follows (in millions):
|
Three Months Ended
|
Nine Months Ended
|
||||||||||||
September 30,
|
September 30,
|
||||||||||||
2012
|
2011
|
2012
|
2011
|
||||||||||
Revenue:
|
|||||||||||||
Real Estate:
|
|||||||||||||
Leasing
|
$
|
24.9
|
$
|
24.5
|
$
|
75.9
|
$
|
75.5
|
|||||
Development and Sales
|
8.4
|
9.3
|
26.8
|
57.0
|
|||||||||
Less amounts reported in discontinued operations
|
--
|
(9.0
|
)
|
(9.0
|
)
|
(47.7
|
)
|
||||||
Agribusiness
|
67.9
|
37.1
|
121.4
|
96.3
|
|||||||||
Reconciling items*
|
(8.3
|
)
|
--
|
(8.3
|
)
|
--
|
|||||||
Total revenue
|
$
|
92.9
|
$
|
61.9
|
$
|
206.8
|
$
|
181.1
|
|||||
Operating Profit (Loss), Net Income:
|
|||||||||||||
Real Estate:
|
|||||||||||||
Leasing
|
$
|
10.2
|
$
|
9.2
|
$
|
31.4
|
$
|
30.2
|
|||||
Development and Sales
|
3.3
|
3.5
|
(5.7
|
)
|
26.1
|
||||||||
Less amounts reported in discontinued operations
|
--
|
(7.2
|
)
|
(3.9
|
)
|
(23.9
|
)
|
||||||
Agribusiness
|
9.1
|
3.8
|
19.6
|
14.9
|
|||||||||
Total operating profit
|
22.6
|
9.3
|
41.4
|
47.3
|
|||||||||
Interest Expense
|
(3.6
|
)
|
(4.4
|
)
|
(11.7
|
)
|
(12.9
|
)
|
|||||
General Corporate Expenses
|
(3.0
|
)
|
(4.7
|
)
|
(11.7
|
)
|
(12.9
|
)
|
|||||
Separation Costs
|
(0.7
|
)
|
--
|
(6.8
|
)
|
--
|
|||||||
Income From Continuing Operations Before
Income Taxes
|
15.3
|
0.2
|
11.2
|
21.5
|
|||||||||
Income Tax Expense
|
1.9
|
0.1
|
1.8
|
9.3
|
|||||||||
Income From Continuing Operations
|
13.4
|
0.1
|
9.4
|
12.2
|
|||||||||
Income From Discontinued Operations
(net of income taxes)
|
--
|
4.3
|
2.4
|
14.3
|
|||||||||
Net Income
|
$
|
13.4
|
$
|
4.4
|
$
|
11.8
|
$
|
26.5
|
|
•
|
Business Overview: This section provides a general description of A&B’s business, as well as recent developments that the Company believes are important in understanding its results of operations and financial condition or in understanding anticipated future trends.
|
|
•
|
Consolidated Results of Operations: This section provides an analysis of A&B’s consolidated results of operations for the three and nine months ended September 30, 2012 and 2011.
|
|
•
|
Analysis of Operating Revenue and Profit by Segment: This section provides an analysis of A&B’s results of operations by business segment.
|
|
•
|
Liquidity and Capital Resources: This section provides a discussion of A&B’s financial condition and an analysis of A&B’s cash flows for the nine months ended September 30, 2012 and 2011, as well as a discussion of A&B’s ability to fund the its future commitments and ongoing operating activities through internal and external sources of capital.
|
|
•
|
Outlook: This section provides a discussion of management’s general outlook about the Hawaii economy and the Company’s markets.
|
|
•
|
Other Matters: This section provides a summary of other matters, such as officer and management changes.
|
Quarter Ended September 30,
|
||||||||||
(dollars in millions)
|
2012
|
2011
|
Change
|
|||||||
Operating revenue
|
$
|
92.9
|
$
|
61.9
|
50
|
%
|
||||
Operating costs and expenses
|
73.0
|
56.3
|
30
|
%
|
||||||
Operating income
|
19.9
|
5.6
|
4
|
X
|
||||||
Other income and (expense)
|
(4.6
|
)
|
(5.4
|
)
|
-15
|
%
|
||||
Income from continuing operations before income taxes
|
15.3
|
0.2
|
77
|
X
|
||||||
Income tax expense
|
1.9
|
0.1
|
19
|
X
|
||||||
Discontinued operations (net of income taxes)
|
--
|
4.3
|
N
|
M
|
||||||
Net income
|
$
|
13.4
|
$
|
4.4
|
3
|
X
|
||||
Basic earnings per share
|
$
|
0.31
|
$
|
0.10
|
3
|
X
|
||||
Diluted earnings per share
|
$
|
0.31
|
$
|
0.10
|
3
|
X
|
Nine Months Ended September 30,
|
||||||||||
(dollars in millions)
|
2012
|
2011
|
Change
|
|||||||
Operating revenue
|
$
|
206.8
|
$
|
181.1
|
14
|
%
|
||||
Operating costs and expenses
|
175.5
|
153.7
|
14
|
%
|
||||||
Operating income
|
31.3
|
27.4
|
14
|
%
|
||||||
Other income and (expense)
|
(20.1
|
)
|
(5.9
|
)
|
3
|
X
|
||||
Income from continuing operations before income taxes
|
11.2
|
21.5
|
-48
|
%
|
||||||
Income tax expense
|
1.8
|
9.3
|
-81
|
%
|
||||||
Discontinued operations (net of income taxes)
|
2.4
|
14.3
|
-83
|
%
|
||||||
Net income
|
$
|
11.8
|
$
|
26.5
|
-55
|
%
|
||||
Basic earnings per share
|
$
|
0.28
|
$
|
0.63
|
-56
|
%
|
||||
Diluted earnings per share
|
$
|
0.28
|
$
|
0.63
|
-56
|
%
|
Quarter Ended September 30,
|
||||||||||
(dollars in millions)
|
2012
|
2011
|
Change
|
|||||||
Real estate leasing segment revenue
|
$
|
24.9
|
$
|
24.5
|
2
|
%
|
||||
Real estate leasing segment operating costs and expenses
|
(14.4
|
)
|
(14.9
|
)
|
-3
|
%
|
||||
Selling, general and administrative
|
(0.5
|
)
|
(0.3
|
)
|
67
|
%
|
||||
Other income
|
0.2
|
(0.1
|
)
|
N
|
M
|
|||||
Real estate leasing operating profit
|
$
|
10.2
|
$
|
9.2
|
11
|
%
|
||||
Operating profit margin
|
41.0
|
%
|
37.6
|
%
|
||||||
Average Occupancy Rates:
|
||||||||||
Mainland
|
93
|
%
|
92
|
%
|
||||||
Hawaii
|
93
|
%
|
91
|
%
|
||||||
Leasable Space (million sq. ft.) — Improved
|
||||||||||
Mainland
|
6.5
|
6.5
|
||||||||
Hawaii
|
1.4
|
1.4
|
Dispositions
|
Acquisitions
|
|||||
Date
|
Property
|
Leasable sq. ft
|
Date
|
Property
|
Leasable sq. ft
|
|
9-11
|
Wakea Business Center II (HI)
|
61,500
|
9-11
|
Issaquah Office Center (WA)
|
146,900
|
|
3-12
|
Firestone Boulevard Building (CA)
|
28,100
|
12-11
|
Gateway at Mililani Mauka (HI)
|
5,900
|
|
6-12
|
Gateway at Mililani Mauka South (HI)
|
18,700
|
||||
Total Dispositions
|
89,600
|
Total Acquisitions
|
171,500
|
Nine Months Ended September 30,
|
||||||||||
(dollars in millions)
|
2012
|
2011
|
Change
|
|||||||
Real estate leasing segment revenue
|
$
|
75.9
|
$
|
75.5
|
1
|
%
|
||||
Real estate leasing segment operating costs and expenses
|
(43.2
|
)
|
(44.3
|
)
|
-2
|
%
|
||||
Selling, general and administrative
|
(1.5
|
)
|
(1.1
|
)
|
36
|
%
|
||||
Other income
|
0.2
|
0.1
|
2
|
X
|
||||||
Real estate leasing operating profit
|
$
|
31.4
|
$
|
30.2
|
4
|
%
|
||||
Operating profit margin
|
41.4
|
%
|
40.0
|
%
|
||||||
Average Occupancy Rates:
|
||||||||||
Mainland
|
93
|
%
|
92
|
%
|
||||||
Hawaii
|
92
|
%
|
91
|
%
|
||||||
Leasable Space (million sq. ft.) — Improved
|
||||||||||
Mainland
|
6.5
|
6.5
|
||||||||
Hawaii
|
1.4
|
1.4
|
Quarter Ended September 30,
|
||||||||||
(dollars in millions)
|
2012
|
2011
|
Change
|
|||||||
Improved property sales revenue
|
$
|
--
|
$
|
8.5
|
N
|
M
|
||||
Development sales revenue
|
--
|
0.7
|
N
|
M
|
||||||
Unimproved/other property sales revenue
|
8.4
|
0.1
|
84
|
X
|
||||||
Total real estate development and sales segment revenue
|
8.4
|
9.3
|
-10
|
%
|
||||||
Cost of real estate development and sales
|
(1.1
|
)
|
(2.4
|
)
|
-54
|
%
|
||||
Operating expenses
|
(2.9
|
)
|
(2.4
|
)
|
21
|
%
|
||||
Loss from joint ventures
|
(1.1
|
)
|
(1.0
|
)
|
10
|
%
|
||||
Total real estate development and sales operating profit
|
$
|
3.3
|
$
|
3.5
|
-6
|
%
|
||||
Real estate development and sales operating profit margin
|
39.3
|
%
|
37.6
|
%
|
Nine Months Ended September 30,
|
||||||||||
(dollars in millions)
|
2012
|
2011
|
Change
|
|||||||
Improved property sales revenue
|
$
|
5.0
|
$
|
45.1
|
-89
|
%
|
||||
Development sales revenue
|
8.1
|
5.5
|
47
|
%
|
||||||
Unimproved/other property sales revenue
|
13.7
|
6.4
|
2
|
X
|
||||||
Total real estate development and sales segment revenue
|
26.8
|
57.0
|
-53
|
%
|
||||||
Cost of real estate development and sales
|
(10.2
|
)
|
(30.1
|
)
|
-66
|
%
|
||||
Operating expenses
|
(8.8
|
)
|
(8.2
|
)
|
7
|
%
|
||||
Impairment of Santa Barbara development project
|
(5.1
|
)
|
--
|
N
|
M
|
|||||
Impairment and equity loss related to Bakersfield joint venture
|
(4.7
|
)
|
--
|
N
|
M
|
|||||
Earnings (loss) from joint ventures
|
(3.7
|
)
|
0.6
|
N
|
M
|
|||||
Other income (loss)
|
--
|
6.8
|
N
|
M
|
||||||
Total real estate development and sales operating profit (loss)
|
$
|
(5.7
|
)
|
$
|
26.1
|
N
|
M
|
|||
Real estate development and sales operating profit margin
|
N
|
M
|
45.8
|
%
|
Quarter Ended
|
Nine Months Ended
|
||||||||||||||
September 30,
|
September 30,
|
||||||||||||||
2012
|
2011
|
2012
|
2011
|
||||||||||||
Proceeds from the Sale of Income-Producing Properties
|
$
|
--
|
$
|
8.5
|
$
|
8.9
|
$
|
45.1
|
|||||||
Real Estate Leasing Revenue
|
$
|
--
|
$
|
0.5
|
$
|
0.1
|
$
|
2.6
|
|||||||
Gain on Sale of Income-Producing Properties
|
$
|
--
|
$
|
6.9
|
$
|
3.9
|
$
|
22.2
|
|||||||
Real Estate Leasing Operating Profit
|
--
|
0.3
|
--
|
1.7
|
|||||||||||
Total Operating Profit Before Taxes
|
--
|
7.2
|
3.9
|
23.9
|
|||||||||||
Income Tax Expense
|
--
|
2.9
|
1.5
|
9.6
|
|||||||||||
Income from Discontinued Operations
|
$
|
--
|
$
|
4.3
|
$
|
2.4
|
$
|
14.3
|
Quarter Ended September 30,
|
||||||||||
(dollars in millions)
|
2012
|
2011
|
Change
|
|||||||
Revenue
|
$
|
67.9
|
$
|
37.1
|
83
|
%
|
||||
Operating profit
|
$
|
9.1
|
$
|
3.8
|
2
|
X
|
||||
Operating profit margin
|
13.4
|
%
|
10.2
|
%
|
||||||
Tons sugar produced
|
78,200
|
74,300
|
5
|
%
|
||||||
Tons sugar sold (bulk raw sugar)
|
72,400
|
36,300
|
99
|
%
|
Nine Months Ended September 30,
|
||||||||||
(dollars in millions)
|
2012
|
2011
|
Change
|
|||||||
Revenue
|
$
|
121.4
|
$
|
96.3
|
26
|
%
|
||||
Operating profit
|
$
|
19.6
|
$
|
14.9
|
32
|
%
|
||||
Operating profit margin
|
16.1
|
%
|
15.5
|
%
|
||||||
Tons sugar produced
|
137,500
|
148,700
|
-8
|
%
|
||||||
Tons sugar sold (bulk raw sugar)
|
108,400
|
72,600
|
49
|
%
|
Property Type
|
Vacancy Rate
|
Average Asking Rent Per Square Foot Per Month (NNN)
|
Retail
|
4.3%
|
$3.35
|
Industrial
|
4.3%
|
$0.98
|
Office
|
13.4%
|
$1.57
|
(a)
|
Disclosure Controls and Procedures. The Company’s management, with the participation of the Company’s Chief Executive Officer and Chief Financial Officer, has evaluated the effectiveness of the Company’s disclosure controls and procedures (as such term is defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended (the “Exchange Act”)) as of the end of the period covered by this report. Based on such evaluation, the Company’s Chief Executive Officer and Chief Financial Officer have concluded that, as of the end of such period, the Company’s disclosure controls and procedures are effective.
|
|
(b)
|
Internal Control Over Financial Reporting. There have not been any changes in the Company’s internal control over financial reporting (as such term is defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) during the fiscal quarter to which this report relates that have materially affected, or are reasonably likely to materially affect, the Company’s internal control over financial reporting.
|
Period
|
Total Number of
Shares Purchased
|
Average Price
Paid per Share
|
Total Number of
Shares Purchased as
Part of Publicly
Announced Plans
or Programs
|
Maximum Number
of Shares that
May Yet Be Purchased
Under the Plans
or Programs
|
Jul 1 - 31, 2012
|
3,076 (1)
|
$34.19
|
--
|
--
|
Aug 1 - 31, 2012
|
25,164 (1)
|
$32.07
|
--
|
--
|
Sep 1 - 30, 2012
|
5,191 (1)
|
$30.12
|
--
|
--
|
|
(1)
|
Represents shares accepted for the exercise of options and/or in satisfaction of tax withholding obligations arising upon option exercises or the vesting of restricted stock units.
|
|
31.1
|
Certification of Chief Executive Officer, as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
|
|
31.2
|
Certification of Chief Financial Officer, as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
|
|
32
|
Certification of Chief Executive Officer and Chief Financial Officer Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
|
|
101
|
The following information from Alexander & Baldwin, Inc.’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2012, formatted in XBRL (eXtensible Business Reporting Language): (i) Condensed Consolidated Statements of Income for the three and nine months ended September 30, 2012, and September 30, 2011, (ii) Condensed Consolidated Statement of Comprehensive Income for the three and nine months ended September 30, 2012, and September 30, 2011, (iii) Condensed Consolidated Balance Sheets at September 30, 2012 and December 31, 2011, (iv) Condensed Consolidated Statement of Cash Flows for the three and nine months ended September 30, 2012, and September 30, 2011, and (v) the Notes to the Condensed Consolidated Financial Statements.
|
ALEXANDER & BALDWIN, INC.
|
||
(Registrant)
|
||
Date: November 9, 2012
|
/s/ Paul K. Ito
|
|
Paul K. Ito
|
||
Senior Vice President,
|
||
Chief Financial Officer, Treasurer
|
||
and Controller
|
||
|
31.1
|
Certification of Chief Executive Officer, as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
|
|
31.2
|
Certification of Chief Financial Officer, as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
|
|
32
|
Certification of Chief Executive Officer and Chief Financial Officer Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
|
|
101
|
The following information from Alexander & Baldwin, Inc.’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2012, formatted in XBRL (eXtensible Business Reporting Language): (i) Condensed Consolidated Statements of Income for the three and nine months ended September 30, 2012, and September 30, 2011, (ii) Condensed Consolidated Statement of Comprehensive Income for the three and nine months ended September 30, 2012, and September 30, 2011, (iii) Condensed Consolidated Balance Sheets at September 30, 2012 and December 31, 2011, (iv) Condensed Consolidated Statement of Cash Flows for the three and nine months ended September 30, 2012, and September 30, 2011, and (v) the Notes to the Condensed Consolidated Financial Statements.
|
/s/ Stanley M. Kuriyama
|
|
Name:
|
Stanley M. Kuriyama
|
Title:
|
Chairman and Chief Executive Officer
|
Date:
|
November 9, 2012
|
/s/ Paul K. Ito
|
|
Name:
|
Paul K. Ito
|
Title:
|
Senior Vice President, Chief Financial Officer, Treasurer and Controller
|
Date:
|
November 9, 2012
|
Discontinued Operations (Details) (USD $)
In Millions, unless otherwise specified |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Sep. 30, 2012
|
Sep. 30, 2011
|
Sep. 30, 2012
|
Sep. 30, 2011
|
|
Discontinued Operations [Abstract] | ||||
Number of commercial buildings | 2 | |||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||||
Proceeds from the Sale of Income-Producing Properties | $ 0 | $ 8.5 | $ 8.9 | $ 45.1 |
Gain on Sale of Income-Producing Properties | 0 | 6.9 | 3.9 | 22.2 |
Total Operating Profit Before Taxes | 0 | 7.2 | 3.9 | 23.9 |
Income Tax Expense | 0 | 2.9 | 1.5 | 9.6 |
Income from Discontinued Operations | 0 | 4.3 | 2.4 | 14.3 |
Real Estate Leasing [Member]
|
||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||||
Real Estate Leasing Revenue | 0 | 0.5 | 0.1 | 2.6 |
Real Estate Leasing Operating Profit | $ 0 | $ 0.3 | $ 0 | $ 1.7 |
Investments in Affiliates (Tables)
|
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Sep. 30, 2012
|
|||||||||||||||||||||||||||||||||||||||||
Investments in Affiliates [Abstract] | |||||||||||||||||||||||||||||||||||||||||
Summary of Financial Information for Equity Method Investments |
|
Segment Results (Details) (USD $)
In Millions, unless otherwise specified |
3 Months Ended | 9 Months Ended | ||||||||
---|---|---|---|---|---|---|---|---|---|---|
Sep. 30, 2012
acre
|
Sep. 30, 2011
|
Sep. 30, 2012
acre
|
Sep. 30, 2011
|
|||||||
Segment Reporting Information [Line Items] | ||||||||||
Revenue | $ 92.9 | $ 61.9 | $ 206.8 | $ 181.1 | ||||||
Operating Profit | 22.6 | 9.3 | 41.4 | 47.3 | ||||||
Interest expense | (3.6) | (4.4) | (11.7) | (12.9) | ||||||
General Corporate Expenses | (3.0) | (4.7) | (11.7) | (12.9) | ||||||
Separation Costs | (0.7) | 0 | (6.8) | 0 | ||||||
Income From Continuing Operations Before Income Taxes | 15.3 | 0.2 | 11.2 | 21.5 | ||||||
Income tax expense | 1.9 | 0.1 | 1.8 | 9.3 | ||||||
Income From Continuing Operations | 13.4 | 0.1 | 9.4 | 12.2 | ||||||
Income From Discontinued Operations (net of income taxes) | 0 | 4.3 | 2.4 | 14.3 | ||||||
Net Income | 13.4 | 4.4 | 11.8 | 26.5 | ||||||
Area of agricultural parcel sold (in acres) | 286 | 286 | ||||||||
Agribusiness [Member]
|
||||||||||
Segment Reporting Information [Line Items] | ||||||||||
Operating Profit | 9.1 | 3.8 | 19.6 | 14.9 | ||||||
Real Estate Industry [Member] | Less amounts reported in discontinued operations [Member]
|
||||||||||
Segment Reporting Information [Line Items] | ||||||||||
Revenue | 0 | (9.0) | (9.0) | (47.7) | ||||||
Operating Profit | 0 | (7.2) | (3.9) | (23.9) | ||||||
Real Estate Industry [Member] | Development and Sales segment [Member]
|
||||||||||
Segment Reporting Information [Line Items] | ||||||||||
Revenue | 8.4 | 9.3 | 26.8 | 57.0 | ||||||
Operating Profit | 3.3 | 3.5 | (5.7) | 26.1 | ||||||
Real Estate Industry [Member] | Leasing segment [Member]
|
||||||||||
Segment Reporting Information [Line Items] | ||||||||||
Revenue | 24.9 | 24.5 | 75.9 | 75.5 | ||||||
Operating Profit | 10.2 | 9.2 | 31.4 | 30.2 | ||||||
Real Estate Industry [Member] | Agribusiness [Member]
|
||||||||||
Segment Reporting Information [Line Items] | ||||||||||
Revenue | 67.9 | 37.1 | 121.4 | 96.3 | ||||||
Real Estate Industry [Member] | Reconciling Items [Member]
|
||||||||||
Segment Reporting Information [Line Items] | ||||||||||
Revenue | $ (8.3) | [1] | $ 0 | [1] | $ (8.3) | [1] | $ 0 | [1] | ||
|
Commitments, Guarantees and Contingencies
|
9 Months Ended | ||||||||
---|---|---|---|---|---|---|---|---|---|
Sep. 30, 2012
|
|||||||||
Commitments, Guarantees and Contingencies [Abstract] | |||||||||
Commitments, Guarantees and Contingencies |
These amounts are not recorded on the Company's condensed consolidated balance sheet and it is not expected that the Company or its subsidiaries will be called upon to advance funds under these commitments. Indemnity Agreements: For certain real estate joint ventures, the Company may be obligated under bond indemnities to complete construction of the real estate development if the joint venture does not perform. These indemnities are designed to protect the surety in exchange for the issuance of surety bonds that cover construction activities, such as project amenities, roads, utilities, and other infrastructure. The recorded amounts of the indemnity liabilities were not material. Under the indemnities, the Company and its joint venture partners agree to indemnify the surety bond issuer from all losses and expenses arising from the failure of the joint venture to complete the specified bonded construction. The maximum potential amount of aggregate future payments is a function of the amount covered by outstanding bonds at the time of default by the joint venture, reduced by the amount of work completed to date. Other Obligations: Certain of the real estate businesses in which the Company holds a non-controlling interest have long-term debt obligations. One of the Company's joint ventures has a $10 million loan that matures in August 2015. As a condition to providing the loan to the joint venture, the lender required that the Company and its joint venture partner guarantee certain obligations of the joint venture under a maintenance agreement. The maintenance agreement specifies that the Company and its joint venture partner make payments to the lender to the extent that the loan-to-value measure or debt service ratio of the property held by the joint venture is below pre-determined thresholds. The Company has determined that the fair value of its obligation under this maintenance agreement is not material, and as of September 30, 2012, the Company had not paid any amounts under the guaranty. Other than obligations described above, obligations of the Company's joint ventures do not have recourse to the Company and the Company's "at-risk" amounts are limited to its investment. Legal Proceedings and Other Contingencies: A&B owns 16,000 acres of watershed lands in East Maui that supply a significant portion of the irrigation water used by Hawaiian Commercial & Sugar Company ("HC&S"), a division of A&B that produces raw sugar. A&B also held four water licenses to another 30,000 acres owned by the State of Hawaii in East Maui which, over the last ten years, have supplied approximately 58 percent of the irrigation water used by HC&S. The last of these water license agreements expired in 1986, and all four agreements were then extended as revocable permits that were renewed annually. In 2001, a request was made to the State Board of Land and Natural Resources (the "BLNR") to replace these revocable permits with a long-term water lease. Pending the conclusion by the BLNR of this contested case hearing on the request for the long-term lease, the BLNR has renewed the existing permits on a holdover basis. If the Company is not permitted to utilize sufficient quantities of stream waters from State lands in East Maui, it could have a material adverse effect on the Company's sugar-growing operations. In addition, on May 24, 2001, petitions were filed by a third party, requesting that the Commission on Water Resource Management of the State of Hawaii ("Water Commission") establish interim instream flow standards ("IIFS") in 27 East Maui streams that feed the Company's irrigation system. On September 25, 2008, the Water Commission took action on eight of the petitions, resulting in some quantity of water being returned to the streams rather than being utilized for irrigation purposes. In May 2010, the Water Commission took action on the remaining 19 petitions resulting in additional water being returned to the streams. A petition requesting a contested case hearing to challenge the Water Commission's decisions was filed with the Commission by the opposing third party. On October 18, 2010, the Water Commission denied the petitioner's request for a contested case hearing. On November 17, 2010, the petitioner filed an appeal of the Water Commission's denial to the Hawaii Intermediate Court of Appeals. On August 31, 2011, the Intermediate Court of Appeals dismissed the petitioner's appeal. On November 29, 2011, the petitioner appealed the Intermediate Court of Appeals' dismissal to the Hawaii Supreme Court. On January 11, 2012, the Hawaii Supreme Court vacated the Intermediate Court of Appeals' dismissal of the petitioner's appeal and remanded the appeal back to the Intermediate Court of Appeals. On June 25, 2004, two organizations filed a petition with the Water Commission to establish IIFS for four streams in West Maui to increase the amount of water to be returned to these streams. The West Maui irrigation system provided approximately 15 percent of the irrigation water used by HC&S over the last ten years. The Water Commission issued a decision in June 2010, which required the return of water in two of the four streams. In July 2010, the two organizations appealed the Water Commission's decision to the Hawaii Intermediate Court of Appeals. On June 23, 2011, the case was transferred to the Hawaii Supreme Court. On August 15, 2012, the Hawaii Supreme Court overturned the Water Commission's decision and remanded the case to the Water Commission for further consideration in connection with the establishment of the IIFS. The loss of East Maui and West Maui water as a result of the Water Commission's decisions imposes challenges to the Company's sugar growing operations. While the resulting water loss does not immediately threaten near-term sugar production, it will result in a future suppression of sugar yields and will have an impact on the Company that will only be quantifiable over time. Accordingly, the Company is unable to predict, at this time, the outcome or financial impact of the water proceedings. In March 2011, the Environmental Protection Agency ("EPA") published nationwide standards for controlling hazardous air pollutant emissions from industrial, commercial, institutional boilers and process heaters (the "Boiler MACT" rule), which would apply to Hawaiian Commercial & Sugar Company's three boilers. The standards require that prescribed emissions be reduced to allowable levels as detailed in the final regulations by early 2014. The EPA subsequently reconsidered the March 2011 rule, and in December 2011, re-proposed the Boiler MACT rule. The Company is not able to evaluate the impact of the new standards until the rule is finalized, which is expected to occur in the fourth quarter of 2012. Given the potential for changes to the rule, the Company's continuing evaluation of alternative operating models for its sugar business, and the requirement to perform a thorough analysis of the new standards, the Company is unable to predict at this time, the financial impact of the regulations. In June 2011, the Equal Employment Opportunity Commission ("EEOC") served McBryde Resources, Inc., formerly known as Kauai Coffee Company, Inc. ("McBryde Resources") with a lawsuit, which alleged that McBryde Resources and five other farms were complicit in illegal acts by Global Horizons Inc., a company that had hired Thai workers for the farms. The lawsuit was filed in the U.S. District Court for the District of Hawaii. In July 2011, the EEOC amended the lawsuit to name Alexander & Baldwin, LLC (formerly known as Alexander & Baldwin, Inc.), a wholly-owned subsidiary of the Company, as a defendant. At a hearing on October 26, 2011, the judge dismissed the lawsuit, without prejudice. The EEOC filed a second amended complaint on December 16, 2011. In response, McBryde Resources and Alexander & Baldwin, LLC filed a motion to dismiss the second amended complaint. The motion was granted in part and denied in part, however, the Court allowed the EEOC to file yet another amended complaint, which it did on July 3, 2012. McBryde Resources and Alexander & Baldwin, LLC filed motions to dismiss the third amended complaint. The Court granted in part, and denied in part, the motions. The Company is unable to predict, at this time, the outcome or financial impact, if any, of the lawsuit.
|