UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-Q

☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended June 30, 2020

OR

☐ 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

ALEXANDER & BALDWIN, INC.

(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	96801
(Address of principal executive offices)			(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)

Securities registered pursuant to Section 12(b) of the Act:

Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common Stock, without par value	ALEX	New York Stock Exchange

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See the definitions of "large accelerated filer," "accelerated filer," "smaller reporting company," and "emerging growth company" in Rule 12b-2 of the Exchange Act.

Large accelerated filer	☒	Accelerated filer	☐
Non-accelerated filer	☐	Smaller reporting company	☐
		Emerging growth company	☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

Number of shares of common stock outstanding as of June 30, 2020: 72,348,218

1

ALEXANDER & BALDWIN, INC.

FORM 10-Q

For the Quarterly Period Ended June 30, 2020

TABLE OF CONTENTS

			Page
PART I. FINANCIAL INFORMATION
Item 1.	Financial Statements		1
		Condensed Consolidated Balance Sheets - As of June 30, 2020 and December 31, 2019	1
		Condensed Consolidated Statements of Operations - Three and Six Months Ended June 30, 2020 and 2019	2
		Condensed Consolidated Statements of Comprehensive Income (Loss) - Three and Six Months Ended June 30, 2020 and 2019	3
		Condensed Consolidated Statements of Cash Flows - Six Months Ended June 30, 2020 and 2019	4
		Condensed Consolidated Statements of Equity - Three and Six Months Ended June 30, 2020 and 2019	6
		Notes to Condensed Consolidated Financial Statements	8
Item 2.	Management's Discussion and Analysis of Financial Condition and Results of Operations		24
Item 3.	Quantitative and Qualitative Disclosures About Market Risk		43
Item 4.	Controls and Procedures		43
PART II. OTHER INFORMATION
Item 1.	Legal Proceedings		44
Item 1A.	Risk Factors		44
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds		45
Item 4.	Mine Safety Disclosures		45
Item 5.	Other Information		45
Item 6.	Exhibit Index		47
	Signature		48

PART I. FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

ALEXANDER & BALDWIN, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

(In millions) (Unaudited)

	June 30,		December 31,
	2020		2019
ASSETS
Real estate investments
Real estate property	$	1,541.4	$	1,540.2
Accumulated depreciation	(141.4)		(127.5)
Real estate property, net	1,400.0		1,412.7
Real estate developments	77.9		79.1
Investments in real estate joint ventures and partnerships	132.8		133.4
Real estate intangible assets, net	67.9		74.9
Real estate investments, net	1,678.6		1,700.1
Cash and cash equivalents	96.2		15.2
Restricted cash	0.2		0.2
Accounts receivable and retention, net of allowance for credit losses and allowance for doubtful accounts of $4.1 million and $0.4 million as of June 30, 2020 and December 31, 2019, respectively	48.0		51.6
Inventories	20.2		20.7
Other property, net	119.8		124.4
Operating lease right-of-use assets	20.0		21.8
Goodwill	10.5		15.4
Other receivables, net of allowance for credit losses and allowance for doubtful accounts of $4.3 million and $1.6 million as of June 30, 2020 and December 31, 2019, respectively	14.0		27.8
Prepaid expenses and other assets, net of allowance for credit losses and allowance for doubtful accounts of $0.1 million and $0 million as of June 30, 2020 and December 31, 2019, respectively	98.7		107.1
Total assets	$	2,106.2	$	2,084.3
LIABILITIES AND EQUITY
Liabilities:
Notes payable and other debt	$	768.6	$	704.6
Accounts payable	12.4		17.8
Operating lease liabilities	19.8		21.6
Accrued pension and post-retirement benefits	26.9		26.8
Indemnity holdbacks	7.5		7.5
Deferred revenue	66.8		67.6
Accrued and other liabilities	93.4		103.4
Total liabilities	995.4		949.3
Commitments and Contingencies (Note 10)
Redeemable Noncontrolling Interest	6.2		6.3
Equity:
Common stock - no par value; authorized, 150 million shares; outstanding, 72.3 million shares at June 30, 2020 and December 31, 2019, respectively	1,803.1		1,800.1
Accumulated other comprehensive income (loss)	(55.1)		(48.8)
Distributions in excess of accumulated earnings	(643.4)		(626.2)
Total A&B shareholders' equity	1,104.6		1,125.1
Noncontrolling interest	—		3.6
Total equity	1,104.6		1,128.7
Total liabilities and equity	$	2,106.2	$	2,084.3

See Notes to Condensed Consolidated Financial Statements.

1

ALEXANDER & BALDWIN, INC.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(In millions, except per share amounts) (Unaudited)

	Three Months Ended June 30,				Six Months Ended June 30,
	2020		2019		2020		2019
Operating Revenue:
Commercial Real Estate	$	34.0	$	39.1	$	77.4	$	75.9
Land Operations	9.8		24.9		21.3		73.9
Materials & Construction	30.1		45.1		56.0		88.7
Total operating revenue	73.9		109.1		154.7		238.5
Operating Costs and Expenses:
Cost of Commercial Real Estate	24.0		21.3		48.3		40.5
Cost of Land Operations	2.9		23.2		10.9		62.6
Cost of Materials & Construction	28.2		43.2		53.2		85.2
Selling, general and administrative	9.0		16.2		22.8		31.8
Impairment of assets related to Materials & Construction	5.6		—		5.6		—
Total operating costs and expenses	69.7		103.9		140.8		220.1
Gain (loss) on the disposal of assets, net	—		—		0.5		—
Operating Income (Loss)	4.2		5.2		14.4		18.4
Other Income and (Expenses):
Income (loss) related to joint ventures	(0.1)		1.0		3.1		3.7
Interest and other income (expense), net (Note 2)	(0.4)		0.6		(0.2)		2.2
Interest expense	(7.8)		(8.1)		(15.6)		(17.2)
Income (Loss) from Continuing Operations Before Income Taxes	(4.1)		(1.3)		1.7		7.1
Income tax benefit (expense)	—		—		—		1.1
Income (Loss) from Continuing Operations	(4.1)		(1.3)		1.7		8.2
Income (loss) from discontinued operations, net of income taxes	(0.6)		0.1		(0.8)		(0.7)
Net Income (Loss)	(4.7)		(1.2)		0.9		7.5
Loss (income) attributable to noncontrolling interest	—		0.4		0.6		0.7
Net Income (Loss) Attributable to A&B Shareholders	$	(4.7)	$	(0.8)	$	1.5	$	8.2
Earnings (Loss) Per Share Available to A&B Shareholders:
Basic Earnings (Loss) Per Share of Common Stock:
Continuing operations available to A&B shareholders	$	(0.06)	$	(0.01)	$	0.03	$	0.12
Discontinued operations available to A&B shareholders	(0.01)		—		(0.01)		(0.01)
Net income (loss) available to A&B shareholders	$	(0.07)	$	(0.01)	$	0.02	$	0.11
Diluted Earnings (Loss) Per Share of Common Stock:
Continuing operations available to A&B shareholders	$	(0.06)	$	(0.01)	$	0.03	$	0.12
Discontinued operations available to A&B shareholders	(0.01)		—		(0.01)		(0.01)
Net income (loss) available to A&B shareholders	$	(0.07)	$	(0.01)	$	0.02	$	0.11
Weighted-Average Number of Shares Outstanding:
Basic	72.3		72.2		72.3		72.1
Diluted	72.3		72.2		72.4		72.5
Amounts Available to A&B Common Shareholders (Note 17):
Continuing operations available to A&B common shareholders	$	(4.1)	$	(0.9)	$	2.3	$	8.9
Discontinued operations available to A&B common shareholders	(0.6)		0.1		(0.8)		(0.7)
Net income (loss) available to A&B common shareholders	$	(4.7)	$	(0.8)	$	1.5	$	8.2

See Notes to Condensed Consolidated Financial Statements.

2

ALEXANDER & BALDWIN, INC.

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)

(In millions) (Unaudited)

	Three Months Ended June 30,				Six Months Ended June 30,
	2020		2019		2020		2019
Net Income (Loss)	$	(4.7)	$	(1.2)	$	0.9	$	7.5
Other Comprehensive Income (Loss), net of tax:
Cash flow hedges:
Unrealized interest rate hedging gain (loss)	(0.7)		(2.0)		(7.6)		(3.5)
Impact of reclassification adjustment to interest expense included in Net Income (Loss)	0.1		(0.2)		0.1		(0.3)
Defined benefit plans:
Amortization of net loss included in net periodic benefit cost	0.6		1.0		1.2		2.0
Amortization of prior service credit included in net periodic benefit cost	—		(0.2)		—		(0.3)
Income taxes related to other comprehensive income (loss)	—		—		—		—
Other comprehensive income (loss), net of tax	—		(1.4)		(6.3)		(2.1)
Comprehensive Income (Loss)	(4.7)		(2.6)		(5.4)		5.4
Comprehensive income (loss) attributable to noncontrolling interest	—		0.4		0.6		0.7
Comprehensive Income (Loss) Attributable to A&B Shareholders	$	(4.7)	$	(2.2)	$	(4.8)	$	6.1

See Notes to Condensed Consolidated Financial Statements.

3

ALEXANDER & BALDWIN, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(In millions) (Unaudited)

	Six Months Ended June 30,
	2020		2019
Cash Flows from Operating Activities:
Net income (loss)	$	0.9	$	7.5
Adjustments to reconcile net income (loss) to net cash provided by (used in) operations:
Depreciation and amortization	27.4		23.4
Loss (gain) from disposals and asset transactions, net	(0.5)		(2.5)
Impairment of assets	5.6		—
Share-based compensation expense	3.0		2.7
(Income) loss from affiliates, net of distributions of income	(2.9)		(1.4)
Changes in operating assets and liabilities:
Trade, contracts retention, and other contract receivables	0.1		(11.0)
Inventories	0.3		(1.7)
Prepaid expenses, income tax receivable and other assets	14.3		31.4
Development/other property inventory	0.7		41.4
Accrued pension and post-retirement benefits	1.3		3.1
Accounts payable	(3.7)		(10.4)
Accrued and other liabilities	(18.3)		(1.4)
Net cash provided by (used in) operations	28.2		81.1
Cash Flows from Investing Activities:
Capital expenditures for acquisitions	—		(218.4)
Capital expenditures for property, plant and equipment	(10.9)		(27.4)
Proceeds from disposal of property, investments and other assets	9.4		3.0
Payments for purchases of investments in affiliates and other investments	—		(3.3)
Distributions of capital from investments in affiliates and other investments	5.3		10.6
Net cash provided by (used in) investing activities	3.8		(235.5)
Cash Flows from Financing Activities:
Proceeds from issuance of notes payable and other debt	173.0		53.9
Payments of notes payable and other debt and deferred financing costs	(100.5)		(109.2)
Borrowings (payments) on line-of-credit agreement, net	(8.7)		4.0
Cash dividends paid	(13.8)		(22.4)
Proceeds from issuance (repurchase) of capital stock and other, net	(1.0)		(1.1)
Net cash provided by (used in) financing activities	49.0		(74.8)
Cash, Cash Equivalents and Restricted Cash
Net increase (decrease) in cash, cash equivalents and restricted cash	81.0		(229.2)
Balance, beginning of period	15.4		234.9
Balance, end of period	$	96.4	$	5.7

4

Other Cash Flow Information:
Interest paid, net of capitalized interest	$	(10.8)	$	(15.3)
Income tax (payments)/refunds, net	$	0.5	$	25.8
Noncash Investing and Financing Activities:
Capital expenditures included in accounts payable and accrued and other liabilities	3.0		3.1
Receivable from disposal of a M&C subsidiary	0.5		—
Right-of-use ("ROU") assets and corresponding lease liability recorded upon ASC 842 adoption	—		31.0
Finance lease liabilities arising from obtaining ROU assets	0.4		1.7
Declared distribution to noncontrolling interest	—		0.3
Reconciliation of cash, cash equivalents and restricted cash:
Beginning of the period:
Cash and cash equivalents	$	15.2	$	11.4
Restricted cash	0.2		223.5
Cash, cash equivalents and restricted cash	$	15.4	$	234.9
End of the period:
Cash and cash equivalents	$	96.2	$	5.5
Restricted cash	0.2		0.2
Cash, cash equivalents and restricted cash	$	96.4	$	5.7

See Notes to Condensed Consolidated Financial Statements.

5

ALEXANDER & BALDWIN, INC.

CONDENSED CONSOLIDATED STATEMENTS OF EQUITY

For the Six Months Ended June 30, 2020 and 2019

(In millions) (Unaudited)

	Total Equity
	Common Stock			Accumulated Other Compre- hensive Income (Loss)		(Distribution in Excess of Accumulated Earnings) Earnings Surplus		Non-Controlling Interest		Total		Redeem- able Non- Controlling Interest
	Shares	Stated Value
Balance, January 1, 2019	72.0	$	1,793.4	$	(51.9)	$	(538.9)	$	5.7	$	1,208.3	$	7.9
Net income (loss)	—	—		—		8.2		(0.7)		7.5		—
Other comprehensive income (loss), net of tax	—	—		(2.1)		—		—		(2.1)		—
Dividend on common stock ($0.31 per share)	—	—		—		(22.4)		—		(22.4)		—
Distributions to noncontrolling interest	—	—		—		—		(0.3)		(0.3)		—
Share-based compensation	—	2.7		—		—		—		2.7		—
Shares issued or repurchased, net	0.2	(0.2)		—		(0.9)		—		(1.1)		—
Balance, June 30, 2019	72.2	$	1,795.9	$	(54.0)	$	(554.0)	$	4.7	$	1,192.6	$	7.9
	Total Equity
	Common Stock			Accumulated Other Compre- hensive Income (Loss)		(Distribution in Excess of Accumulated Earnings) Earnings Surplus		Non-Controlling Interest		Total		Redeem- able Non- Controlling Interest
	Shares	Stated Value
Balance, January 1, 2020	72.3	$	1,800.1	$	(48.8)	$	(626.2)	$	3.6	$	1,128.7	$	6.3
Cumulative impact of adoption of ASC 326	—	—		—		(4.0)		(0.1)		(4.1)		—
Net income (loss)	—	—		—		1.5		(0.5)		1.0		(0.1)
Other comprehensive income (loss), net of tax	—	—		(6.3)		—		—		(6.3)		—
Dividend on common stock ($0.19 per share)	—	—		—		(13.8)		—		(13.8)		—
Disposal of M&C subsidiary	—	—		—		—		(3.0)		(3.0)		—
Share-based compensation	—	3.0		—		—		—		3.0		—
Shares issued or repurchased, net	—	—		—		(0.9)		—		(0.9)		—
Balance, June 30, 2020	72.3	$	1,803.1	$	(55.1)	$	(643.4)	$	—	$	1,104.6	$	6.2

See Notes to Condensed Consolidated Financial Statements

6

ALEXANDER & BALDWIN, INC.

CONDENSED CONSOLIDATED STATEMENTS OF EQUITY

For the Three Months Ended June 30, 2020 and 2019

(In millions) (Unaudited)

	Total Equity
	Common Stock			Accumulated Other Compre- hensive Income (Loss)		(Distribution in Excess of Accumulated Earnings) Earnings Surplus		Non-Controlling Interest		Total		Redeem- able Non- Controlling Interest
	Shares	Stated Value
Balance, April 1, 2019	72.1	$	1,794.0	$	(52.6)	$	(541.3)	$	5.4	$	1,205.5	$	7.9
Net income (loss)	—	—		—		(0.8)		(0.4)		(1.2)		—
Other comprehensive income (loss), net of tax	—	—		(1.4)		—		—		(1.4)		—
Dividend on common stock ($0.165 per share)	—	—		—		(11.9)		—		(11.9)		—
Distributions to noncontrolling interest	—	—		—		—		(0.3)		(0.3)		—
Share-based compensation	—	1.3		—		—		—		1.3		—
Shares issued or repurchased, net	0.1	0.6		—		—		—		0.6		—
Balance, June 30, 2019	72.2	$	1,795.9	$	(54.0)	$	(554.0)	$	4.7	$	1,192.6	$	7.9