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 March 31, 2021

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 March 31, 2021: 72,469,682

1

ALEXANDER & BALDWIN, INC.

FORM 10-Q

For the Quarterly Period Ended March 31, 2021

TABLE OF CONTENTS

			Page
PART I. FINANCIAL INFORMATION
Item 1.	Financial Statements		1
		Condensed Consolidated Balance Sheets - As of March 31, 2021 and December 31, 2020	1
		Condensed Consolidated Statements of Operations - Three Months Ended March 31, 2021 and 2020	2
		Condensed Consolidated Statements of Comprehensive Income (Loss) - Three Months Ended March 31, 2021 and 2020	3
		Condensed Consolidated Statements of Cash Flows - Three Months Ended March 31, 2021 and 2020	4
		Condensed Consolidated Statements of Equity - Three Months Ended March 31, 2021 and 2020	6
		Notes to Condensed Consolidated Financial Statements	7
Item 2.	Management's Discussion and Analysis of Financial Condition and Results of Operations		21
Item 3.	Quantitative and Qualitative Disclosures About Market Risk		38
Item 4.	Controls and Procedures		38
PART II. OTHER INFORMATION
Item 1.	Legal Proceedings		39
Item 1A.	Risk Factors		39
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds		39
Item 4.	Mine Safety Disclosures		39
Item 6.	Exhibit Index		40
	Signature		41

PART I. FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

ALEXANDER & BALDWIN, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

(amounts in millions; unaudited)

	March 31,		December 31,
	2021		2020
ASSETS
Real estate investments
Real estate property	$	1,557.2	$	1,549.7
Accumulated depreciation	(161.0)		(154.4)
Real estate property, net	1,396.2		1,395.3
Real estate developments	73.6		75.7
Investments in real estate joint ventures and partnerships	124.0		134.1
Real estate intangible assets, net	59.1		61.9
Real estate investments, net	1,652.9		1,667.0
Cash and cash equivalents	32.0		57.2
Restricted cash	0.2		0.2
Accounts receivable and retention, net of allowance for credit losses and allowance for doubtful accounts of $3.3 million and $3.3 million as of March 31, 2021 and December 31, 2020, respectively	33.2		43.5
Inventories	27.2		18.4
Other property, net	108.7		110.8
Operating lease right-of-use assets	18.2		18.6
Goodwill	10.5		10.5
Other receivables, net of allowance for credit losses and allowance for doubtful accounts of $3.6 million and $3.9 million as of March 31, 2021 and December 31, 2020, respectively	13.9		14.2
Prepaid expenses and other assets	95.1		95.6
Total assets	$	1,991.9	$	2,036.0
LIABILITIES AND EQUITY
Liabilities:
Notes payable and other debt	$	654.6	$	687.1
Accounts payable	13.2		9.8
Operating lease liabilities	18.5		18.4
Accrued pension and post-retirement benefits	34.9		34.7
Deferred revenue	68.7		66.9
Accrued and other liabilities	95.7		116.5
Total liabilities	885.6		933.4
Commitments and Contingencies (Note 8)
Redeemable Noncontrolling Interest	6.5		6.5
Equity:
Common stock - no par value; authorized, 150.0 million shares; outstanding, 72.5 million and 72.4 million shares at March 31, 2021 and December 31, 2020, respectively	1,806.2		1,805.5
Accumulated other comprehensive income (loss)	(56.0)		(60.0)
Distributions in excess of accumulated earnings	(650.4)		(649.4)
Total equity	1,099.8		1,096.1
Total liabilities and equity	$	1,991.9	$	2,036.0

See Notes to Condensed Consolidated Financial Statements.

1

ALEXANDER & BALDWIN, INC.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(amounts in millions, except per share data; unaudited)

	Three Months Ended March 31,
	2021		2020
Operating Revenue:
Commercial Real Estate	$	39.9	$	43.4
Land Operations	17.1		11.0
Materials & Construction	24.0		26.4
Total operating revenue	81.0		80.8
Operating Costs and Expenses:
Cost of Commercial Real Estate	23.4		24.3
Cost of Land Operations	8.1		8.0
Cost of Materials & Construction	23.7		25.0
Selling, general and administrative	12.2		13.8
Total operating costs and expenses	67.4		71.1
Gain (loss) on disposal of commercial real estate properties, net	0.2		0.5
Gain (loss) on disposal of non-core assets, net	0.1		—
Total gain (loss) on disposal of assets, net	0.3		0.5
Operating Income (Loss)	13.9		10.2
Other Income and (Expenses):
Income (loss) related to joint ventures	3.4		3.2
Interest and other income (expense), net (Note 2)	(0.3)		0.2
Interest expense	(7.0)		(7.8)
Income (Loss) from Continuing Operations Before Income Taxes	10.0		5.8
Income tax benefit (expense)	(0.1)		—
Income (Loss) from Continuing Operations	9.9		5.8
Income (loss) from discontinued operations, net of income taxes	0.0		(0.2)
Net Income (Loss)	9.9		5.6
Loss (income) attributable to noncontrolling interest	—		0.6
Net Income (Loss) Attributable to A&B Shareholders	$	9.9	$	6.2
Earnings (Loss) Per Share Available to A&B Shareholders:
Basic Earnings (Loss) Per Share of Common Stock:
Continuing operations available to A&B shareholders	$	0.14	$	0.09
Discontinued operations available to A&B shareholders	0.00		0.00
Net income (loss) available to A&B shareholders	$	0.14	$	0.09
Diluted Earnings (Loss) Per Share of Common Stock:
Continuing operations available to A&B shareholders	$	0.14	$	0.09
Discontinued operations available to A&B shareholders	0.00		0.00
Net income (loss) available to A&B shareholders	$	0.14	$	0.09
Weighted-Average Number of Shares Outstanding:
Basic	72.5		72.3
Diluted	72.6		72.5
Amounts Available to A&B Common Shareholders (Note 15):
Continuing operations available to A&B common shareholders	$	9.9	$	6.4
Discontinued operations available to A&B common shareholders	—		(0.2)
Net income (loss) available to A&B common shareholders	$	9.9	$	6.2

See Notes to Condensed Consolidated Financial Statements.

2

ALEXANDER & BALDWIN, INC.

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)

(amounts in millions; unaudited)

	Three Months Ended March 31,
	2021		2020
Net Income (Loss)	$	9.9	$	5.6
Other Comprehensive Income (Loss), net of tax:
Cash flow hedges:
Unrealized interest rate hedging gain (loss)	3.1		(6.9)
Impact of reclassification adjustment to interest expense included in Net Income (Loss)	0.3		—
Employee benefit plans:
Amortization of net loss included in net periodic benefit cost	0.6		0.6
Income taxes related to other comprehensive income (loss)	—		—
Other comprehensive income (loss), net of tax	4.0		(6.3)
Comprehensive Income (Loss)	13.9		(0.7)
Comprehensive income (loss) attributable to noncontrolling interest	—		0.6
Comprehensive Income (Loss) Attributable to A&B Shareholders	$	13.9	$	(0.1)

See Notes to Condensed Consolidated Financial Statements.

3

ALEXANDER & BALDWIN, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(amounts in millions; unaudited)

	Three Months Ended March 31,
	2021		2020
Cash Flows from Operating Activities:
Net income (loss)	$	9.9	$	5.6
Adjustments to reconcile net income (loss) to net cash provided by (used in) operations:
Depreciation and amortization	12.6		13.6
Loss (gain) from disposals and asset transactions, net	(0.3)		(0.5)
Share-based compensation expense	1.4		1.5
Equity in (income) loss from affiliates, net of operating cash distributions	(2.1)		(2.9)
Changes in operating assets and liabilities:
Trade, contracts retention, and other contract receivables	5.4		7.0
Inventories	(8.8)		—
Prepaid expenses, income tax receivable and other assets	(1.0)		2.4
Development/other property inventory	2.2		(3.2)
Accrued pension and post-retirement benefits	0.9		0.6
Accounts payable	0.8		(3.5)
Accrued and other liabilities	(0.4)		(1.7)
Net cash provided by (used in) operations	20.6		18.9
Cash Flows from Investing Activities:
Capital expenditures for property, plant and equipment	(5.2)		(6.2)
Proceeds from disposal of assets	0.5		5.9
Payments for purchases of investments in affiliates and other investments	(0.6)		—
Distributions of capital from investments in affiliates and other investments	15.7		3.2
Net cash provided by (used in) investing activities	10.4		2.9
Cash Flows from Financing Activities:
Proceeds from issuance of notes payable and other debt	—		108.0
Payments of notes payable and other debt and deferred financing costs	(37.7)		(44.2)
Borrowings (payments) on line-of-credit agreement, net	4.0		51.4
Cash dividends paid	(21.8)		(13.8)
Proceeds from issuance (repurchase) of capital stock and other, net	(0.7)		(0.9)
Net cash provided by (used in) financing activities	(56.2)		100.5
Cash, Cash Equivalents and Restricted Cash
Net increase (decrease) in cash, cash equivalents and restricted cash	(25.2)		122.3
Balance, beginning of period	57.4		15.4
Balance, end of period	$	32.2	$	137.7

4

Other Cash Flow Information:
Interest paid, net of capitalized interest	$	(6.2)	$	(7.0)
Income tax (payments)/refunds, net	$	0.1	$	0.5
Noncash Investing and Financing Activities:
Capital expenditures included in accounts payable and accrued and other liabilities	5.5		2.6
Reconciliation of cash, cash equivalents and restricted cash:
Beginning of the period:
Cash and cash equivalents	$	57.2	$	15.2
Restricted cash	0.2		0.2
Cash, cash equivalents and restricted cash	$	57.4	$	15.4
End of the period:
Cash and cash equivalents	$	32.0	$	131.6
Restricted cash	0.2		6.1
Cash, cash equivalents and restricted cash	$	32.2	$	137.7

See Notes to Condensed Consolidated Financial Statements.

5

ALEXANDER & BALDWIN, INC.

CONDENSED CONSOLIDATED STATEMENTS OF EQUITY

For the Three Months Ended March 31, 2021 and 2020

(amounts in millions, except per share data; 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, 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)	—	—		—		6.2		(0.5)		5.7		(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)		—
Share-based compensation	—	1.5		—		—		—		1.5		—
Shares issued or repurchased, net	—	—		—		(0.9)		—		(0.9)		—
Balance, March 31, 2020	72.3	$	1,801.6	$	(55.1)	$	(638.7)	$	3.0	$	1,110.8	$	6.2
	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, 2021	72.4	$	1,805.5	$	(60.0)	$	(649.4)	$	—	$	1,096.1	$	6.5
Net income (loss)	—	—		—		9.9		—		9.9		—
Other comprehensive income (loss), net of tax	—	—		4.0		—		—		4.0		—
Dividend on common stock ($0.15 per share)	—	—		—		(10.9)		—		(10.9)		—
Share-based compensation	—	1.4		—		—		—		1.4		—
Shares issued or repurchased, net	0.1	(0.7)		—		—		—		(0.7)		—
Balance, March 31, 2021	72.5	$	1,806.2	$	(56.0)	$	(650.4)	$	—	$	1,099.8	$	6.5

See Notes to Condensed Consolidated Financial Statements

6

Alexander & Baldwin, Inc.

Notes to Condensed Consolidated Financial Statements

(unaudited)

1.    BACKGROUND AND BASIS OF PRESENTATION

Description of Business: Alexander & Baldwin, Inc. ("A&B" or the "Company") is a real estate investment trust ("REIT") headquartered in Honolulu, Hawai‘i. The Company operates in three segments: Commercial Real Estate ("CRE"); Land Operations; and Materials & Construction ("M&C"). As of March 31, 2021, the Company owns a portfolio of commercial real estate improved properties in Hawai‘i consisting of 22 retail centers, ten industrial assets and four office properties, representing a total of 3.9 million square feet of gross leasable area, as well as a portfolio of ground leases in Hawai‘i representing 152.0 acres. Throughout this quarterly report on Form 10-Q, references to "we," "our," "us" and "our Company" refer to Alexander & Baldwin, Inc., together with its consolidated subsidiaries.

Basis of Presentation: The interim 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 accounting principles generally accepted in the United States of America ("GAAP") for complete financial statements. Therefore, the interim condensed consolidated financial statements should be read in conjunction with the consolidated balance sheets as of December 31, 2020 and 2019, and the related consolidated statements of operations, comprehensive income (loss), cash flows and equity for each of the three years ended December 31, 2020, 2019 and 2018, respectively, and the notes thereto included in the Company's Annual Report filed on Form 10-K for the year ended December 31, 2020 ("2020 Form 10-K"), and other subsequent filings with the U.S. Securities and Exchange Commission ("SEC").

Reclassifications: Certain amounts presented in the prior periods have been reclassified to conform to the current year presentation due to a change in reportable segments in the current period resulting from a reorganization of a component of the Company historically included in the results of Land Operations that will now be included in the results of Materials & Construction. Refer to Note 18 for additional information.

Rounding: Amounts in the condensed consolidated financial statements and notes are rounded to the nearest tenth of a million. Accordingly, a recalculation of some per-share amounts and percentages, if based on the reported data, may result in differences.

2.    SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

The Company's significant accounting policies are described in Note 2 to the consolidated financial statements included in Item 8 of the Company's 2020 Form 10-K. There have not been any changes to the Company's significant accounting policies as described in the Company's 2020 Form 10-K.

Recently issued accounting pronouncements

In March 2020, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") No. 2020-04, Reference Rate Reform, establishing ASC Topic 848, and amended the standard thereafter ("ASC 848"). ASC 848 provides optional practical expedients and exceptions related to the impacts of reference rate reform that affect certain debt, leases, derivatives and other contracts if certain criteria are met. The amendments apply only to contracts and hedging relationships that reference LIBOR or another reference rate expected to be discontinued due to reference rate reform. These amendments are effective immediately and may be applied prospectively to contract modifications made and hedging relationships entered into or evaluated on or before December 31, 2022. Reference rate reform has not had a material impact on any of the Company's existing contracts. Therefore, the Company has not elected to apply any of the optional practical expedients and exceptions under ASC 848 as of the current date. The Company will assess future changes in its contracts and the impact of electing to apply the optional practical expedients and exceptions provided by ASC 848 as they occur, but does not expect their application will have a material effect on its financial position or results of operations.

7

Interest and other income (expense), net

Interest and other income (expense), net for the three months ended March 31, 2021 and 2020 included the following (in millions):

	Three Months Ended March 31,
	2021		2020
Interest income	$	0.3	$	0.6
Pension and postretirement benefit (expense)	(0.6)		(0.7)
Other income (expense), net	—		0.3
Interest and other income (expense), net	$	(0.3)	$	0.2

3.    INVESTMENTS IN AFFILIATES

The Company's investments in affiliates principally consist of equity investments in limited liability companies in which the Company has the ability to exercise significant influence over the operating and financial policies of these investments. Accordingly, the Company accounts for its investments using the equity method of accounting.

Operating results presented in the Company's condensed consolidated financial statements include the Company's proportionate share of net income (loss) from its equity method investments. Summarized financial information of entities accounted for by the equity method on a combined basis for the three months ended March 31, 2021 and 2020 is as follows (in millions):

	Three Months Ended March 31,
	2021		2020
Revenues	$	69.9	$	52.0
Operating costs and expenses	63.0		39.9
Gross Profit (Loss)	$	6.9	$	12.1
Income (Loss) from Continuing Operations1	$	3.9	$	7.6
Net Income (Loss)1	$	3.7	$	7.6
1 Includes earnings from equity method investments held by the investee.

4.    INVENTORIES

Inventories are stated at the lower of cost (principally first-in, first-out basis) or net realizable value. Inventories as of March 31, 2021 and December 31, 2020 were as follows (in millions):

	March 31,		December 31,
	2021		2020
Asphalt	$	12.1	$	4.2
Processed rock and sand	8.4		7.9
Work in progress	3.6		3.2
Retail merchandise	2.1		2.1
Parts, materials and supplies inventories	1.0		1.0
Total	$	27.2	$	18.4

8

5.    FAIR VALUE MEASUREMENTS

The fair value of the Company's cash and cash equivalents, accounts receivable, net and short-term borrowings approximate their carrying values due to the short-term nature of the instruments.

The fair value of the Company's notes receivable approximates the carrying amount of $9.5 million as of March 31, 2021. The fair value and carrying amount of these notes was $11.5 million at December 31, 2020. The fair value of these notes is estimated using a discounted cash flow analysis in which the Company uses unobservable inputs such as market interest rates determined by the loan-to-value and market capitalization rates related to the underlying collateral at which management believes similar loans would be made and classified as a Level 3 measurement in the fair value hierarchy.

At March 31, 2021, the carrying amount of the Company's notes payable and other debt was $654.6 million and the corresponding fair value was $677.4 million. At December 31, 2020, the carrying amount of the Company's notes payable and other debt was $687.1 million, and the corresponding fair value was $704.1 million. The fair value of 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 3).

The Company records its interest rate swaps at fair value. The fair values of the Company's interest rate swaps (Level 2 measurements) are based on the estimated amounts that the Company would receive or pay to terminate the contracts at the reporting date and are determined using interest rate pricing models and interest rate related observable inputs (refer to Note 7 for fair value information regarding the Company's derivative instruments).

9

6.    NOTES PAYABLE AND OTHER DEBT

At March 31, 2021 and December 31, 2020, notes payable and total debt consisted of the following (dollars in millions):

	Interest Rate (%)	Maturity Date	Principal Outstanding
			March 31, 2021		December 31, 2020
Secured:
Kailua Town Center	(1)	2021	$	9.7	$	9.8
Kailua Town Center #2	3.15%	2021	4.4		4.5
Heavy Equipment Financing	(2)	(2)	2.8		3.2
Laulani Village	3.93%	2024	61.1		61.3
Pearl Highlands	4.15%	2024	80.9		81.4
Manoa Marketplace	(3)	2029	57.5		57.9
Subtotal			$	216.4	$	218.1
Unsecured:
Bank syndicated loan	(4)	2023	$	50.0	$	50.0
Series A Note	5.53%	2024	28.4		28.4
Series J Note	4.66%	2025	10.0		10.0
Series B Note	5.55%	2026	45.0		46.0
Series C Note	5.56%	2026	22.0		22.0
Series F Note	4.35%	2026	19.7		19.7
Series H Note	4.04%	2026	50.0		50.0
Series K Note	4.81%	2027	34.5		34.5
Series G Note	3.88%	2027	29.6		29.6
Series L Note	4.89%	2028	18.0		18.0
Series I Note	4.16%	2028	25.0		25.0
Term Loan 5	4.30%	2029	25.0		25.0
Subtotal			$	357.2	$	358.2
Revolving Credit Facilities:
GLP Asphalt revolving credit facility	(5)	2021	$	1.2	$	—
A&B Revolver	(6)	2022	80.0		111.0
Subtotal			$	81.2	$	111.0
Total Debt (contractual)			$	654.8	$	687.3
Unamortized debt premium (discount)			(0.2)		(0.2)
Total debt (carrying value)			$	654.6	$	687.1
(1) Loan has a stated interest rate of LIBOR plus 1.50%, but is swapped through maturity to a 5.95% fixed rate.
(2) Loans have a weighted average stated interest rate of approximately 3.0% and stated maturity dates ranging from 2021 to 2024.
(3) Loan has a stated interest rate of LIBOR plus 1.35%, but is swapped through maturity to a 3.14% fixed rate.
(4) Loan has a stated interest rate of LIBOR plus 1.80%, based on a pricing grid, and its LIBOR component is swapped through maturity (total rate currently at 3.15% based on the spread calculated by the pricing grid).
(5) Loan has a stated interest rate of LIBOR plus 1.25%.
(6) Loan has a stated interest rate of LIBOR plus 1.85% based on a pricing grid.

7.    DERIVATIVE INSTRUMENTS

The Company is exposed to interest rate risk related to its variable-rate interest debt. The Company balances its cost of debt and exposure to interest rates primarily through its mix of fixed-rate and variable-rate debt. From time to time, the Company may use interest rate swaps to manage its exposure to interest rate risk.

10

Cash Flow Hedges of Interest Rate Risk

The Company has two interest rate swap agreements designated as cash flow hedges whose key terms are as follows (dollars in millions):

Effective	Maturity	Fixed Interest	Notional Amount at		Asset (Liability) Fair Value at				Classification on
Date	Date	Rate	March 31, 2021		March 31, 2021		December 31, 2020		Balance Sheet
4/7/2016	8/1/2029	3.14%	$	57.5	$	(1.6)	$	(4.8)	Accrued and other liabilities
2/13/2020	2/27/2023	3.15%	$	50.0	$	(1.1)	$	(1.3)	Accrued and other liabilities

Liabilities related to the interest rate swap are presented within Accrued and other liabilities, and assets are presented within Prepaid expenses and other assets in the consolidated balance sheets. The changes in fair value of the cash flow hedge are recorded in Accumulated other comprehensive income (loss) and subsequently reclassified into interest expense as interest is incurred on the related variable-rate debt.

The following table represents the pre-tax effect of the derivative instruments in the Company's condensed consolidated statement of comprehensive income (loss) during the three months ended March 31, 2021 and 2020 (in millions):

	2021		2020
Derivatives in Designated Cash Flow Hedging Relationships:
Amount of gain (loss) recognized in OCI on derivatives	$	3.1	$	(6.9)
Impact of reclassification adjustment to interest expense included in Net Income (Loss)	$	0.3	$	—

As of March 31, 2021, the Company expects to reclassify $1.5 million of net gains (losses) on derivative instruments from accumulated other comprehensive income to earnings during the next 12 months.

Non-designated Hedges

As of March 31, 2021, the Company has one interest rate swap that has not been designated as a cash flow hedge whose key terms are as follows (dollars in millions):

Effective	Maturity	Fixed Interest	Notional Amount at		Asset (Liability) Fair Value at				Classification on
Date	Date	Rate	March 31, 2021		March 31, 2021		December 31, 2020		Balance Sheet
1/1/2014	9/1/2021	5.95%	$	9.7	$	(0.2)	$	(0.3)	Accrued and other liabilities

The Company records gains or losses related to interest rate swaps that have not been designated as cash flow hedges in Interest and other income (expense), net in its condensed consolidated statements of operations. The Company recognized a gain of $0.1 million in the three months ended March 31, 2021 and a loss of $0.1 million in the three months ended March 31, 2020 related to changes in fair value.

The Company measures all of its interest rate swaps at fair value. The fair values of the Company's interest rate swaps (Level 2) are based on the estimated amounts that the Company would receive or pay to terminate the contracts at the reporting date and are determined using interest rate pricing models and interest rate related observable inputs.

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8.    COMMITMENTS AND CONTINGENCIES

Commitments and other financial arrangements

The Company has various financial commitments and other arrangements including standby letters of credit and bonds that are not recorded as liabilities on the Company's condensed consolidated balance sheet as of March 31, 2021:

•Standby letters of credit issued by the Company's lenders under the Company's revolving credit facilities totaled $1.1 million as of March 31, 2021. These letters of credit primarily relate to the Company's workers' compensation plans and construction activities; if drawn upon the Company would be obligated to reimburse the issuer.

•Bonds related to the Company's construction and real estate activities totaled $250.7 million as of March 31, 2021. Approximately $231.4 million represents the face value of construction bonds issued by third party sureties (bid, performance and payment bonds), and the remainder is related to commercial bonds issued by third party sureties (permit, subdivision, license and notary bonds); if drawn upon, the Company would be obligated to reimburse the surety that issued the bond for the amount of the bond, reduced for the work completed to date. As of March 31, 2021, the Company's maximum remaining exposure, in the event of defaults on all existing contractual construction obligations, was approximately $46.5 million.

The Company also provides certain bond indemnities and guarantees of indebtedness for certain of its unconsolidated affiliates that it accounts for as equity method investments (e.g., real estate joint ventures).

•Bond indemnities are provided for the benefit of the surety in exchange for the issuance of surety bonds and cover joint venture construction activities (such as project amenities, roads, utilities, and other infrastructure). Under such bond indemnities, the Company and the 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 Company may be obligated to complete construction of the joint ventures' construction projects if the joint venture does not perform. 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.

•Guarantees of indebtedness may be provided by the Company for the benefit of financial institutions providing credit to unconsolidated equity method investees. As of March 31, 2021, the Company had one arrangement with third party lenders that provided for a limited guarantee on any outstanding amounts related to an unconsolidated equity method investee's line of credit; related to borrowings on such line of credit by the equity method investee, there was none outstanding as of March 31, 2021.

The recorded amounts of the bond indemnities and guarantee of indebtedness were not material individually or in the aggregate. Other than those 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

Prior to the sale of approximately 41,000 acres of agricultural land on Maui to Mahi Pono Holdings, LLC ("Mahi Pono") in December 2018, the Company, through East Maui Irrigation Company, LLC ("EMI"), also owned approximately 16,000 acres of watershed lands in East Maui and also held four water licenses to approximately 30,000 acres owned by the State of Hawai‘i in East Maui. The sale to Mahi Pono included the sale of a 50% interest in EMI (which closed February 1, 2019), and provided for the Company and Mahi Pono, through EMI, to jointly continue the existing process to secure a long-term lease from the State for delivery of irrigation water to Mahi Pono for use in Central Maui.

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 completion by the BLNR of a contested case hearing it ordered to be held on the request for the long-term lease, the BLNR has kept the existing permits on a holdover basis. Three parties (Healoha Carmichael; Lezley Jacintho; and Na Moku Aupuni O Ko‘olau Hui) filed a lawsuit on April 10, 2015 (the "Initial Lawsuit") alleging that the BLNR has been renewing the revocable permits annually rather than keeping them in holdover status. The lawsuit asked the court to void the revocable permits and to declare that the renewals were illegally issued without preparation of an environmental assessment ("EA"). In December 2015, the BLNR decided to reaffirm its prior decisions to keep the permits in holdover status. This decision by the BLNR was challenged by the three parties. In January 2016, the court ruled in the Initial Lawsuit that the renewals were not subject to the EA requirement, but that the BLNR lacked legal authority to keep the revocable permits in holdover status beyond one year (the "Initial Ruling"). The Initial Ruling was appealed to the Intermediate Court of Appeals ("ICA") of the State of Hawai‘i.

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In May 2016, while the appeal of the Initial Ruling was pending, the Hawai‘i State Legislature passed House Bill 2501, which specified that the BLNR has the legal authority to issue holdover revocable permits for the disposition of water rights for a period not to exceed three years. The governor signed this bill into law as Act 126 in June 2016. Pursuant to Act 126, the annual authorization of the existing holdover permits was sought and granted by the BLNR in December 2016, November 2017 and November 2018 for calendar years 2017, 2018 and 2019. No extension of Act 126 was approved by the Hawai‘i State Legislature in 2019.

In June 2019, the ICA vacated the Initial Ruling, effectively reversing the determination that the BLNR lacked authority to keep the revocable permits in holdover status beyond one year (the "ICA Ruling"). The ICA remanded the case back to the trial court to determine whether the holdover status of the permits was both (a) "temporary" and (b) in the best interest of the State, as required by statute. The plaintiffs filed a motion with the ICA for reconsideration of its decision, which was denied on July 5, 2019. On September 30, 2019, the plaintiffs filed a request with the Supreme Court of Hawai‘i to review and reverse the ICA Ruling. On November 25, 2019, the Supreme Court of Hawai‘i granted the plaintiffs' request to review the ICA Ruling and, on May 5, 2020, oral argument was held. No decision has yet been rendered by the Supreme Court of Hawai‘i.

On October 11, 2019, the BLNR took up the renewal of all the existing water revocable permits in the state, acting under the ICA Ruling, and approved the continuation of the four East Maui water revocable permits for another one-year period through December 31, 2020; on November 13, 2020, the BLNR considered and approved a renewal of the four revocable permits for an additional year, through December 31, 2021.

On December 7, 2018, a contested case request filed by the Sierra Club (regarding the BLNR's November 2018 approval of the 2019 revocable permits) was denied by the BLNR. On January 7, 2019, Sierra Club filed a lawsuit in the circuit court of the first circuit in Hawai‘i against BLNR, A&B and EMI, seeking to invalidate the 2019 extension of the revocable permits for, among other things, failure to perform an EA. The lawsuit also sought to enjoin A&B/EMI from diverting more than 25 million gallons a day until a permit or lease is properly issued by the BLNR, and for the imposition of certain conditions on the revocable permits by the BLNR. The count seeking to invalidate the revocable permits based on the failure to perform an EA was dismissed by the court, based on the ICA Ruling in the Initial Lawsuit. The Sierra Club’s lawsuit was amended to include a challenge to the BLNR’s renewal of the revocable permits for calendar year 2020. After a full trial on the merits held beginning in August of 2020, the court ruled, on April 6, 2021, against the Sierra Club on its lawsuit challenging the 2019 and 2020 revocable permits. The time to appeal has not yet run. The court is separately considering, but has not yet ruled upon, a lawsuit filed by the Sierra Club appealing the BLNR’s decision to deny them a contested case hearing on the 2021 revocable permits.

In connection with A&B’s obligation to continue the existing process to secure a long-term water lease from the State, A&B and EMI will defend against the remaining claims made by the Sierra Club.

The Company 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 the Company's consolidated financial statements as a whole.

Further note that certain of the Company's properties and assets may become the subject of other types of claims and assessments at various times (e.g., environmental matters based on normal operations of such assets). Depending on the facts and circumstances surrounding such potential claims and assessments, the Company records an accrual if it is deemed probable that a liability has been incurred and the amount of loss can be reasonably estimated/valued as of the date of the financial statements.

9.    REVENUE AND CONTRACT BALANCES

The Company generates revenue through its Commercial Real Estate, Land Operations and Materials & Construction segments. Through its Commercial Real Estate segment, the Company owns and operates a portfolio of commercial real estate properties and generates income (i.e., revenue) as a lessor through leases of such assets. Refer to Note 10 for further discussion of lessor income recognition. The Land Operations and Materials & Construction segments generate revenue from contracts with customers. The Company further disaggregates revenue from contracts with customers by revenue type when appropriate if the Company believes disaggregation best depicts how the nature, amount, timing and uncertainty of the Company's revenue

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and cash flows are affected by economic factors. Revenue by type for the three months ended March 31, 2021 and 2020 was as follows (in millions):

	Three Months Ended March 31,
	2021		2020
Revenues:
Commercial Real Estate	$	39.9	$	43.4
Land Operations:
Development sales revenue	—		3.6
Unimproved/other property sales revenue	11.3		2.1
Other operating revenue	5.8		5.3
Land Operations1	17.1		11.0
Materials & Construction1	24.0		26.4
Total revenues	$	81.0	$	80.8
1As described elsewhere in this Form 10-Q, during the current year, the Company changed the composition of its reportable segments which caused reported amounts (i.e., revenue and operating profit) in the historical period to be reclassified from Land Operations to Materials & Construction. All comparable information for the historical periods has been restated to reflect the impact of these changes.

Timing of revenue recognition may differ from the timing of invoicing to customers. Certain construction contracts include retainage provisions that are customary in the industry (i.e., are not for financing purposes) and are included in Accounts receivable and contracts retention, net. The balances billed but not paid by customers pursuant to these provisions generally become due upon completion and acceptance of the project work or products by the customers. Within Prepaid and other assets, the Company records assets for "costs and estimated earnings in excess of billings on uncompleted contracts" which represent amounts earned and reimbursable under contracts, but have a conditional right for billing and payment, such as achievement of milestones or completion of the project. When events or conditions indicate that it is probable that the amounts outstanding become unbillable, the transaction price and associated contract asset is reduced. Within Accrued and other liabilities, the Company records liabilities for "billings in excess of costs and estimated earnings on uncompleted contracts" which represent billings to customers on contracts in advance of work performed, including advance payments negotiated as a contract condition. Generally, unearned project-related costs will be earned over the next twelve months.

The following table provides information about receivables, contract assets and contract liabilities from contracts with customers (in millions):

	March 31, 2021		December 31, 2020
Accounts receivable	$	30.7	$	39.5
Contracts retention	5.8		7.3
Allowances (credit losses and doubtful accounts)	(3.3)		(3.3)
Accounts receivable and retention, net	$	33.2	$	43.5
Costs and estimated earnings in excess of billings on uncompleted contracts	$	4.0	$	2.3
Billings in excess of costs and estimated earnings on uncompleted contracts	$	5.4	$	8.5
Variable consideration1	$	62.0	$	62.0
Other deferred revenue	$	6.7	$	4.9
1Variable consideration deferred as of the end of the periods related to amounts received in the sale of agricultural land on Maui in 2018 that, under revenue recognition guidance, could not be included in the transaction price.

For the three months ended March 31, 2021, the Company recognized revenue of approximately $5.5 million related to the Company's contract liabilities reported as of January 1, 2021. For the three months ended March 31, 2020, the Company recognized revenue of approximately $4.5 million related to the Company's contract liabilities reported as of January 1, 2020.

Regarding other information related to the Company's contracts with customers, the amount of revenue recognized from performance obligations satisfied in prior periods (e.g., due to changes in transaction price) was not material in any of the periods presented. Further, the total amount of the transaction price allocated to either wholly unsatisfied or partially satisfied performance obligations was $123.5 million and $120.8 million as of March 31, 2021 and December 31, 2020, respectively. Of the amount presented as of March 31, 2021, the Company expects to recognize as revenue approximately 45% - 50% of the

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remaining contract consideration allocated to either wholly unsatisfied or partially satisfied performance obligations over the next twelve months, with the remaining recognized thereafter.

10.    LEASES - THE COMPANY AS LESSOR

The Company leases land and buildings to third parties under operating leases. Such activity is primarily composed of operating leases within its CRE segment.

Under various circumstances and on a case-by-case basis, the Company may offer certain of its tenants rent relief arrangements (for example, those offered during the year ended December 31, 2020 and in the current period due to the continuing impacts of the coronavirus pandemic that was first reported in Wuhan, China, in December 2019, henceforth, "COVID-19") in the form of rent deferrals or other relief modifications that result in changes to fixed contractual lease payments for specified months. Such other relief modifications may include changing the nature of payments from fixed to variable (i.e., variable based on a percentage of the tenant's sales, typically subject to a minimum "floor" amount) or, in some cases, payment forgiveness. Consistent with lease accounting guidance and interpretations provided by the FASB for rent relief arrangements specifically related to COVID-19, the Company elected to treat such eligible lease concessions (i.e., such rent deferrals, fixed-to-variable modifications or payment forgiveness arrangements that do not result in a substantial increase in the rights of the lessor or obligations of the lessee) outside of the lease accounting modification framework.

For such eligible rent deferrals, the Company accounts for the event as if no changes to the lease contract were made and continues to record lease receivables and recognize income during the deferral period. For the eligible other relief modifications mentioned above that resulted in reductions to fixed contractual lease payments the Company reports, for periods covered by the modification, reduced rental income (i.e., revenue) equal to the agreed-upon amounts (offset by any variable lease payments).

The Company continues to assess collectability on all such amounts due under leases and only recognizes revenue to the extent such amounts are probable of collection (or payment is received). The following table provides information about reductions in revenue for CRE accounts receivable and unbilled straight-line lease receivables for which the Company assessed that the tenant's future payment of amounts due under leases was not probable (i.e., those due to general circumstances or those primarily due to COVID-19), as well as reductions of revenue related to the allowance for doubtful accounts for other impacted operating lease receivables during the three months ended March 31, 2021 and 2020 (in millions):

	Three Months Ended March 31,
	2021		2020
Impact to billed accounts receivable	$	1.3	$	0.7
Impact to straight-line lease receivables	0.3		(0.1)
Total revenue reductions (increases) - tenant collectability assessments	$	1.6	$	0.6
Provision for allowance for doubtful accounts1	0.2		(0.1)
Total revenue reductions (increases)	$	1.8	$	0.5
1 Related to other impacted operating lease receivables.

As a result of COVID-19, certain tenants experiencing economic difficulties have sought and may continue to seek current and future rent relief, which may be provided in the form of additional rent deferrals or other relief modifications, among other possible agreements. The Company is evaluating each request on a case-by-case basis and will apply lease accounting guidance (including the interpretations specifically related to COVID-19) consistently to leases with similar characteristics and similar circumstances. The future impact of any potential rent concessions in the context of lease accounting guidance and related interpretations is dependent upon the extent of relief granted to tenants as a result of COVID-19 in future periods and the elections made by the Company at the time of entering into such agreements.

The historical cost of, and accumulated depreciation on, leased property as of March 31, 2021 and December 31, 2020 were as follows (in millions):

	March 31, 2021		December 31, 2020
Leased property - real estate	$	1,532.5	$	1,525.3
Less: Accumulated depreciation	(162.4)		(152.2)
Property under operating leases, net	$	1,370.1	$	1,373.1

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Total rental income (i.e., revenue) under these operating leases during the three months ended March 31, 2021 and 2020 relating to lease payments and variable lease payments were as follows (in millions):

	Three Months Ended March 31,
	2021		2020
Lease payments	$	29.6	$	30.2
Variable lease payments	11.7		1.4
Total rental income	$	41.3	$	31.6

Contractual future lease payments to be received on non-cancelable operating leases as of March 31, 2021 were as follows (in millions):

2021	$	89.2
2022	110.9
2023	99.9
2024	86.6
2025	74.2
2026	60.5
Thereafter	448.6
Total future lease payments to be received	$	969.9

11.    LEASES - THE COMPANY AS LESSEE

There have been no material changes from the Company's leasing activities as a lessee described in Note 15 to the consolidated financial statements included in Item 8 of the Company's 2020 Form 10-K. The following table provides information about the Company's operating lease costs and finance lease costs recognized during the three months ended March 31, 2021 and 2020 (in millions):

	Three Months Ended March 31,
	2021		2020
Operating lease cost	$	1.1	$	1.2
Finance lease cost	$	0.3	$	0.3

12.    SHARE-BASED PAYMENT AWARDS

The 2012 Incentive Compensation Plan ("2012 Plan") allows for the granting of stock options, restricted stock units and common stock. The shares of common stock authorized to be issued under the 2012 Plan may be drawn from the shares of the Company's authorized but unissued common stock or from shares of its common stock that the Company acquires, including shares purchased on the open market or private transactions. During the three months ended March 31, 2021, the Company granted approximately 342,700 restricted stock unit awards with a weighted average grant date fair value of $16.50 under the 2012 Plan. During the three months ended March 31, 2020, the Company granted approximately 225,700 restricted stock units with a weighted average grant date fair value of $24.59 under the 2012 Plan.

The fair value of the Company's time-based awards is determined using the Company's stock price on the date of grant. The fair value of the Company's market-based awards is estimated using the Company's stock price on the date of grant and the probability of vesting using a Monte Carlo simulation with the following weighted-average assumptions:

	2021 Grants	2020 Grants
Volatility of A&B common stock	47.2%	22.6%
Average volatility of peer companies	49.6%	23.2%
Risk-free interest rate	0.2%	1.3%

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The Company recognizes compensation cost net of actual forfeitures of time-based or market-based awards. A summary of compensation cost related to share-based payments is as follows (in millions):

	Three Months Ended March 31,
	2021		2020
Share-based expense:
Time-based and market-based restricted stock units	$	1.4	$	1.5

13.    EMPLOYEE BENEFIT PLANS

On February 23, 2021, the Company’s Board of Directors approved a plan to effect the termination of the A&B Retirement Plan for Salaried Employees of Alexander & Baldwin, LLC and the Pension Plan for Employees of A&B Agricultural Companies (collectively, the “Defined Benefit Plans”), to be effective May 31, 2021.

In addition, the Board of Directors authorized the Company to take the following steps to prepare for the termination of the Defined Benefit Plans, which are tax-qualified, including:

a.Prepare and execute any necessary amendments to the Defined Benefit Plans and/or restatements regarding the termination of the Defined Benefit Plans, including amending the Defined Benefit Plans to provide for a limited lump-sum window for eligible participants;

b.Prepare and file an Application for Determination for Terminating Plan with the Internal Revenue Service (“IRS”) for a determination as to the tax-qualified status of the Defined Benefit Plans at the time of termination; and

c.Prepare and file all appropriate notices and documents related to the termination of the Defined Benefit Plans and wind-down with the Pension Benefit Guaranty Corporation (the “PBGC”), the U.S. Department of Labor, the Internal Revenue Service, the trustee and any other appropriate parties.

Except for retirees currently receiving payments under the Defined Benefit Plans, participants will have the choice of receiving a single lump sum payment or an annuity from a highly-rated insurance company that will pay and administer future benefit payments. The amount of any lump sum payment will equal the actuarial-equivalent present value of the participant’s accrued benefit under the applicable pension plan as of the distribution date. Annuity payments to current retirees will continue under their current elections, but will be administered by the selected insurance company.

Components of the net periodic benefit cost for the Company's pension and post-retirement plans for the three months ended March 31, 2021 and 2020 are shown below (in millions):

	Three Months Ended March 31,
	2021		2020
Service cost	$	0.2	$	0.2
Interest cost	1.7		1.7
Expected return on plan assets	(1.7)		(1.7)
Amortization of net loss	0.6		0.6
Net periodic benefit cost	$	0.8	$	0.8

The Company has made no contributions to its defined benefit pension plans during the three months ended March 31, 2021 and expects to make no contributions in the current fiscal year.

14.    INCOME TAXES

The Company has been organized and operates in a manner that enables it to qualify, and believes it will continue to qualify, as a REIT for federal income tax purposes. The Company’s effective tax rate for the three months ended March 31, 2021 differed from the effective tax rate for the same period in 2020, primarily due to the taxable built-in gain on a REIT land sale in 2021.

As of March 31, 2021, tax years 2017 and later are open to audit by the tax authorities. The Company believes that the result of any potential audits will not have a material adverse effect on its results of operations, financial condition, or liquidity.

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15.    EARNINGS PER SHARE ("EPS")

Basic earnings per common share excludes dilution and is calculated by dividing net earnings allocated to common shares by the weighted-average number of common shares outstanding for the period. Diluted earnings per common share is calculated by dividing net earnings allocated to common shares by the weighted-average number of common shares outstanding for the period, as adjusted for the potential dilutive effect of non-participating share-based awards as well as adjusted by the number of additional shares, if any, that would have been outstanding had the potentially dilutive common shares been issued.

The following table provides a reconciliation of income (loss) from continuing operations to income (loss) from continuing operations available to A&B common shareholders and net income (loss) available to A&B common shareholders (in millions):

	Three Months Ended March 31,
	2021		2020
Income (loss) from continuing operations	$	9.9	$	5.8
Exclude: (Income) loss attributable to noncontrolling interest	—		0.6
Income (loss) from continuing operations attributable to A&B shareholders	9.9		6.4
Distributions and allocations to participating securities	—		—
Income (loss) from continuing operations available to A&B common shareholders	9.9		6.4
Income (loss) from discontinued operations available to A&B common shareholders	—		(0.2)
Net income (loss) available to A&B common shareholders	$	9.9	$	6.2

The number of shares used to compute basic and diluted earnings per share is as follows (in millions):

	Three Months Ended March 31,
	2021	2020
Denominator for basic EPS - weighted average shares outstanding	72.5	72.3
Effect of dilutive securities:
Stock options and restricted stock unit awards	0.1	0.2
Denominator for diluted EPS - weighted average shares outstanding	72.6	72.5

The number of anti-dilutive securities, excluded from the calculation of diluted earnings per common share, consisted of the following (in millions):

	Three Months Ended March 31,
	2021	2020
Number of anti-dilutive securities	0.3	0.1

16.    ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS)

Other comprehensive income (loss) principally includes amortization of deferred pension and postretirement costs. The components of Accumulated other comprehensive loss, net of taxes, were as follows as of March 31, 2021 and December 31, 2020 (in millions):

	March 31, 2021		December 31, 2020
Employee benefit plans:
Pension plans	$	(48.3)	$	(48.9)
Post-retirement plans	(3.6)		(3.6)
Non-qualified benefit plans	(0.8)		(0.8)
Total employee benefit plans	(52.7)		(53.3)
Interest rate swap	(3.3)		(6.7)
Accumulated other comprehensive income (loss)	$	(56.0)	$