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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 September 30, 2022
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)
Hawaii45-4849780
(State or other jurisdiction of
incorporation or organization)		(I.R.S. Employer
Identification No.)
822 Bishop Street
P. O. Box 3440,Honolulu,Hawaii96801
(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 classTrading Symbol(s)Name of each exchange on which registered
Common Stock, without par valueALEXNew 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 September 30, 2022: 72,544,235

1

ALEXANDER & BALDWIN, INC.
FORM 10-Q
For the Quarterly Period Ended September 30, 2022

TABLE OF CONTENTS
Page
PART I. FINANCIAL INFORMATION
Item 1.
Condensed Consolidated Balance Sheets - As of September 30, 2022 and December 31, 2021
Condensed Consolidated Statements of Operations - Three and Nine Months Ended September 30, 2022 and 2021
Condensed Consolidated Statements of Comprehensive Income (Loss) - Three and Nine Months Ended September 30, 2022 and 2021
Condensed Consolidated Statements of Cash Flows - Nine Months Ended September 30, 2022 and 2021
Condensed Consolidated Statements of Equity and Redeemable Noncontrolling Interest - Three and Nine Months Ended September 30, 2022 and 2021
Item 2.
Item 3.
Item 4.
PART II. OTHER INFORMATION
Item 1.
Item 1A.
Item 2.
Item 4.
Item 6.


PART I. FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
ALEXANDER & BALDWIN, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(amounts in millions; unaudited)
September 30,December 31,
20222021
ASSETS
Real estate investments
Real estate property$1,598.3 $1,588.2 
Accumulated depreciation(197.6)(180.5)
Real estate property, net1,400.7 1,407.7 
Real estate developments64.8 65.0 
Investments in real estate joint ventures and partnerships8.2 8.8 
Real estate intangible assets, net45.4 51.6 
Real estate investments, net1,519.1 1,533.1 
Cash and cash equivalents7.3 70.0 
Restricted cash0.2 1.0 
Accounts receivable and retention, net of allowance for credit losses and allowance for doubtful accounts of $1.1 million and $1.3 million as of September 30, 2022, and December 31, 2021, respectively
35.9 28.9 
Inventories30.1 20.3 
Other property, net69.6 83.5 
Operating lease right-of-use assets37.0 20.1 
Goodwill8.7 8.7 
Other receivables, net of allowance for credit losses and allowance for doubtful accounts of $2.2 million and $2.5 million as of September 30, 2022, and December 31, 2021, respectively
6.1 11.6 
Prepaid expenses and other assets133.9 102.6 
Total assets$1,847.9 $1,879.8 
LIABILITIES AND EQUITY
Liabilities:
Notes payable and other debt$469.7 $532.7 
Accounts payable18.5 9.9 
Operating lease liabilities36.8 19.4 
Accrued pension and post-retirement benefits10.4 56.3 
Deferred revenue71.3 68.5 
Accrued and other liabilities105.9 119.5 
Total liabilities712.6 806.3 
Commitments and Contingencies (Note 8)
Redeemable Noncontrolling Interest8.1 6.9 
Equity:
Common stock - no par value; authorized, 150.0 million shares; outstanding, 72.5 million and 72.5 million shares at September 30, 2022 and December 31, 2021, respectively
1,809.4 1,810.5 
Accumulated other comprehensive income (loss)4.5 (80.7)
Distributions in excess of accumulated earnings(686.7)(663.2)
Total equity1,127.2 1,066.6 
Total liabilities and equity$1,847.9 $1,879.8 
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 September 30,Nine Months Ended September 30,
2022202120222021
Operating Revenue:
Commercial Real Estate$46.2 $44.0 $138.1 $127.2 
Land Operations2.9 5.4 20.9 38.5 
Materials & Construction48.1 34.9 124.5 88.9 
Total operating revenue97.2 84.3 283.5 254.6 
Operating Costs and Expenses: 
Cost of Commercial Real Estate25.0 24.1 73.2 71.0 
Cost of Land Operations4.2 4.7 19.1 23.4 
Cost of Materials & Construction43.3 31.8 111.5 84.2 
Selling, general and administrative12.7 12.6 38.3 37.2 
Total operating costs and expenses85.2 73.2 242.1 215.8 
Gain (loss) on disposal of commercial real estate properties, net— — — 0.2 
Gain (loss) on disposal of non-core assets, net— — 54.0 0.2 
Total gain (loss) on disposal of assets, net— — 54.0 0.4 
Operating Income (Loss)12.0 11.1 95.4 39.2 
Other Income and (Expenses):
Income (loss) related to joint ventures0.4 2.7 1.8 12.2 
Pension termination— — (76.9)— 
Interest and other income (expense), net (Note 2)
(0.1)(0.2)0.7 (1.0)
Interest expense(5.5)(6.5)(16.8)(20.2)
Income (Loss) from Continuing Operations Before Income Taxes6.8 7.1 4.2 30.2 
Income tax benefit (expense)— — 18.1 (0.1)
Income (Loss) from Continuing Operations6.8 7.1 22.3 30.1 
Income (loss) from discontinued operations, net of income taxes— (0.6)(0.1)(0.7)
Net Income (Loss)6.8 6.5 22.2 29.4 
Loss (income) attributable to noncontrolling interest(0.4)(0.1)(1.2)(0.3)
Net Income (Loss) Attributable to A&B Shareholders$6.4 $6.4 $21.0 $29.1 
Earnings (Loss) Per Share Available to A&B Shareholders:
Basic Earnings (Loss) Per Share of Common Stock: 
Continuing operations available to A&B shareholders$0.09 $0.10 $0.29 $0.41 
Discontinued operations available to A&B shareholders— (0.01)— (0.01)
Net income (loss) available to A&B shareholders$0.09 $0.09 $0.29 $0.40 
Diluted Earnings (Loss) Per Share of Common Stock:
Continuing operations available to A&B shareholders$0.09 $0.10 $0.29 $0.41 
Discontinued operations available to A&B shareholders— (0.01)— (0.01)
Net income (loss) available to A&B shareholders$0.09 $0.09 $0.29 $0.40 
Weighted-Average Number of Shares Outstanding:
Basic72.772.5 72.7 72.5 
Diluted72.872.7 72.8 72.6 
Amounts Available to A&B Common Shareholders (Note 15):
Continuing operations available to A&B common shareholders$6.3 $6.9 $20.9 $29.7 
Discontinued operations available to A&B common shareholders— (0.6)(0.1)(0.7)
Net income (loss) available to A&B common shareholders$6.3 $6.3 $20.8 $29.0 
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 September 30,Nine Months Ended September 30,
 2022202120222021
Net Income (Loss)$6.8 $6.5 $22.2 $29.4 
Other Comprehensive Income (Loss), net of tax:
Cash flow hedges:
Unrealized interest rate hedging gain (loss)2.6 0.2 8.0 1.9 
Impact of reclassification adjustment to interest expense included in Net Income (Loss)(0.1)0.4 0.5 1.2 
Realized interest rate hedging gain (loss)— — (0.5)— 
Employee benefit plans:
Actuarial gain (loss)— (4.7)16.6 (4.7)
Amortization of net loss included in net periodic benefit cost0.1 0.5 1.9 1.9 
Amortization of prior service cost included in net periodic benefit cost— — 0.1 — 
Pension termination— — 76.9 — 
Income taxes related to other comprehensive income (loss)— — (18.3)— 
Other comprehensive income (loss), net of tax2.6 (3.6)85.2 0.3 
Comprehensive Income (Loss)9.4 2.9 107.4 29.7 
Comprehensive (income) loss attributable to noncontrolling interest(0.4)(0.1)(1.2)(0.3)
Comprehensive Income (Loss) Attributable to A&B Shareholders$9.0 $2.8 $106.2 $29.4 
See Notes to Condensed Consolidated Financial Statements.
3

ALEXANDER & BALDWIN, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(amounts in millions; unaudited)
Nine Months Ended September 30,
 20222021
Cash Flows from Operating Activities:
Net income (loss)$22.2 $29.4 
Adjustments to reconcile net income (loss) to net cash provided by (used in) operations:
Depreciation and amortization33.1 37.7 
Income tax benefit related to pension termination and other, net(18.3)— 
Loss (gain) from disposals and asset transactions, net(54.0)(0.4)
Share-based compensation expense4.6 4.4 
Equity in (income) loss from affiliates, net of operating cash distributions(1.1)(10.1)
Pension termination76.9 — 
Changes in operating assets and liabilities:
Trade, contracts retention, and other contract receivables(8.7)9.5 
Inventories(9.8)(3.8)
Prepaid expenses, income tax receivable and other assets(13.1)0.3 
Development/other property inventory9.5 0.4 
Accrued pension and post-retirement benefits(31.3)(4.0)
Accounts payable5.7 2.9 
Accrued and other liabilities(6.7)0.9 
Net cash provided by (used in) operations9.0 67.2 
Cash Flows from Investing Activities:  
Capital expenditures for property, plant and equipment(15.7)(26.1)
Proceeds from disposal of assets73.1 0.6 
Payments for purchases of investments in affiliates and other investments(1.5)(0.8)
Distributions of capital and other receipts from investments in affiliates and other investments0.1 40.2 
Net cash provided by (used in) investing activities56.0 13.9 
Cash Flows from Financing Activities:  
Proceeds from issuance of notes payable and other debt13.5 128.0 
Payments of notes payable and other debt and deferred financing costs(29.3)(192.2)
Borrowings (payments) on line-of-credit agreement, net(50.0)— 
Cash dividends paid(57.7)(46.5)
Repurchases of common stock and other payments(5.0)(1.1)
Net cash provided by (used in) financing activities(128.5)(111.8)
Cash, Cash Equivalents and Restricted Cash  
Net increase (decrease) in cash, cash equivalents and restricted cash(63.5)(30.7)
Balance, beginning of period71.0 57.4 
Balance, end of period$7.5 $26.7 
4

Other Cash Flow Information:
Interest paid, net of capitalized interest$(15.8)$(18.4)
Income tax (payments)/refunds, net$0.1 $0.4 
Noncash Investing and Financing Activities:
Capital expenditures included in accounts payable and accrued and other liabilities$0.3 $1.6 
Operating lease liabilities arising from obtaining ROU assets$20.0 $5.5 
Finance lease liabilities arising from obtaining ROU assets$2.7 $0.1 
Dividends declared but unpaid at end of period$0.3 $— 
Repurchases of capital stock in accrued and other liabilities$0.9 $— 
Escrow receivable from disposal of assets$0.9 $— 
Reconciliation of cash, cash equivalents and restricted cash:
Beginning of the period:
Cash and cash equivalents$70.0 $57.2 
Restricted cash1.0 0.2 
Cash, cash equivalents and restricted cash$71.0 $57.4 
End of the period:
Cash and cash equivalents$7.3 $26.5 
Restricted cash0.2 0.2 
Cash, cash equivalents and restricted cash$7.5 $26.7 
See Notes to Condensed Consolidated Financial Statements.
5

ALEXANDER & BALDWIN, INC.
CONDENSED CONSOLIDATED STATEMENTS OF EQUITY AND
REDEEMABLE NONCONTROLLING INTEREST
For the Three Months Ended September 30, 2022 and 2021
(amounts in millions, except per share data; unaudited)
Total Equity
Common StockAccumulated
 Other
 Compre-
hensive Income (Loss)		(Distribution
in Excess of Accumulated Earnings)
Earnings Surplus		TotalRedeemable
Non-
Controlling
Interest
SharesStated Value
Balance, July 1, 202172.5 $1,807.5 $(56.1)$(649.2)$1,102.2 $6.7 
Net income (loss)— — — 6.4 6.4 0.1 
Other comprehensive income (loss), net of tax— — (3.6)— (3.6)— 
Dividend on common stock ($0.18 per share)
— — — (13.2)(13.2)— 
Share-based compensation— 1.6 — — 1.6 — 
Shares issued (repurchased), net— (0.1)— — (0.1)— 
Balance, September 30, 202172.5 $1,809.0 $(59.7)$(656.0)$1,093.3 $6.8 
Total Equity
Common StockAccumulated
 Other
 Compre-
hensive Income (Loss)		(Distribution
in Excess
of Accumulated Earnings)
Earnings Surplus		TotalRedeemable
Non-
Controlling
Interest
SharesStated Value
Balance, July 1, 202272.7 $1,811.2 $1.9 $(677.1)$1,136.0 $7.7 
Net income (loss)— — — 6.4 6.4 0.4 
Other comprehensive income (loss), net of tax— — 2.6 — 2.6 — 
Dividend on common stock ($0.20 per share)
— — — (16.2)(16.2)— 
Share-based compensation— 1.6 — — 1.6 — 
Shares issued (repurchased), net(0.2)(3.4)— 0.2 (3.2)— 
Balance, September 30, 202272.5 $1,809.4 $4.5 $(686.7)$1,127.2 $8.1 
See Notes to Condensed Consolidated Financial Statements
6

ALEXANDER & BALDWIN, INC.
CONDENSED CONSOLIDATED STATEMENTS OF EQUITY AND
REDEEMABLE NONCONTROLLING INTEREST
For the Nine Months Ended September 30, 2022 and 2021
(amounts in millions, except per share data; unaudited)
Total Equity
Common StockAccumulated
 Other
 Compre-
hensive Income (Loss)		(Distribution
in Excess of Accumulated Earnings)
Earnings Surplus		TotalRedeemable
Non-
Controlling
Interest
SharesStated Value
Balance, January 1, 202172.4 $1,805.5 $(60.0)$(649.4)$1,096.1 $6.5 
Net income (loss)— — — 29.1 29.1 0.3 
Other comprehensive income (loss), net of tax— — 0.3 — 0.3 — 
Dividend on common stock ($0.49 per share)
— — — (35.7)(35.7)— 
Share-based compensation— 4.4 — — 4.4 — 
Shares issued (repurchased), net0.1 (0.9)— — (0.9)— 
Balance, September 30, 202172.5 $1,809.0 $(59.7)$(656.0)$1,093.3 $6.8 
Total Equity
Common StockAccumulated
 Other
 Compre-
hensive Income (Loss)		(Distribution
in Excess
of Accumulated Earnings)
Earnings Surplus		TotalRedeemable
Non-
Controlling
Interest
SharesStated Value
Balance, January 1, 202272.5 $1,810.5 $(80.7)$(663.2)$1,066.6 $6.9 
Net income (loss)— — — 21.0 21.0 1.2 
Other comprehensive income (loss), net of tax— — 85.2 — 85.2 — 
Dividend on common stock ($0.61 per share)
— — — (44.8)(44.8)— 
Share-based compensation— 4.6 — — 4.6 — 
Shares issued (repurchased), net— (5.7)— 0.3 (5.4)— 
Balance, September 30, 202272.5 $1,809.4 $4.5 $(686.7)$1,127.2 $8.1 
See Notes to Condensed Consolidated Financial Statements
7

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 September 30, 2022, the Company owns a portfolio of commercial real estate improved properties in Hawai‘i consisting of 22 retail centers, 12 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 140.8 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, 2021 and 2020, and the related consolidated statements of operations, comprehensive income (loss), cash flows, and equity and redeemable noncontrolling interest for each of the three years ended December 31, 2021, 2020, and 2019, respectively, and the notes thereto included in the Company's Annual Report filed on Form 10-K for the year ended December 31, 2021 ("2021 Form 10-K"), and other subsequent filings with the U.S. Securities and Exchange Commission ("SEC").
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 2021 Form 10-K. There have not been any changes to the Company's significant accounting policies as described in the Company's 2021 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 through ASU No. 2021-01 (collectively, "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 expects their application will not have a material effect on its financial position or results of operations.
8

Interest and other income (expense), net
Interest and other income (expense), net for the three and nine months ended September 30, 2022 and 2021, included the following (in millions):
Three Months Ended September 30,Nine Months Ended September 30,
2022202120222021
Interest income$— $0.2 $0.2 $0.8 
Pension and post-retirement benefit (expense)(0.1)(0.7)(0.6)(2.1)
Other income (expense), net— 0.3 1.1 0.3 
Interest and other income (expense), net$(0.1)$(0.2)$0.7 $(1.0)

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 and nine months ended September 30, 2022 and 2021, is as follows (in millions):
Three Months Ended September 30,Nine Months Ended September 30,
2022202120222021
Revenues$46.8 $60.6 $120.9 $188.9 
Operating costs and expenses41.4 58.3 111.6 167.2 
Gross Profit (Loss)$5.4 $2.3 $9.3 $21.7 
Income (Loss) from Continuing Operations1
$1.2 $1.0 $(3.5)$10.0 
Net Income (Loss)1
$1.3 $(0.5)$2.0 $9.1 
1 Includes earnings from equity method investments held by the investee.
During the nine months ended September 30, 2022 and 2021, Income (loss) related to joint ventures was $1.8 million and $12.2 million, respectively, and return on investment operating cash distributions was $0.7 million and $2.1 million, respectively.
4.    INVENTORIES
Inventories are stated at the lower of cost (principally first-in, first-out basis) or net realizable value. Inventories as of September 30, 2022, and December 31, 2021, were as follows (in millions):
September 30,December 31,
20222021
Asphalt$9.0 $4.7 
Processed rock and sand12.5 8.1 
Retail merchandise2.4 2.1 
Parts, materials and supplies inventories6.2 5.4 
Total$30.1 $20.3 
5.    FAIR VALUE MEASUREMENTS
The fair value of the Company's cash and cash equivalents, accounts receivable and retention, 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 approximated the carrying amount of $1.9 million as of September 30, 2022, and $8.4 million as of December 31, 2021. The fair value of these notes is estimated using a discounted
9

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.
As of September 30, 2022, the carrying amount of the Company's notes payable and other debt was $469.7 million and the corresponding fair value was $442.3 million. As of December 31, 2021, the carrying amount of the Company's notes payable and other debt was $532.7 million, and the corresponding fair value was $554.3 million. The fair value of debt is calculated by discounting the future cash flows of the debt at market rates for instruments with similar risk, terms and maturities as compared to the Company's existing debt arrangements and classified as a Level 3 measurement in the fair value hierarchy.
The Company records its interest rate swaps at fair value. The fair values of the Company's interest rate swaps 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). The fair values of the Company's interest rate swaps are classified as a Level 2 measurement in the fair value hierarchy.

6.    NOTES PAYABLE AND OTHER DEBT
As of September 30, 2022, and December 31, 2021, notes payable and other debt consisted of the following (dollars in millions):

Interest Rate (%)Maturity DatePrincipal Outstanding
September 30, 2022December 31, 2021
Secured:
Heavy Equipment Financing(1)(1)$1.3 $1.9 
Laulani Village3.93%202459.4 60.2 
Pearl Highlands4.15%202477.9 79.4 
Photovoltaic Financing(2)20272.6 — 
Manoa Marketplace(3)202954.9 56.3 
Subtotal$196.1 $197.8 
Unsecured:
Series A Note5.53%2024$14.2 $21.3 
Series J Note4.66%202510.0 10.0 
Series B Note5.55%202636.0 45.0 
Series C Note5.56%202611.0 13.0 
Series F Note4.35%202615.2 15.2 
Series H Note4.04%202650.0 50.0 
Series K Note4.81%202734.5 34.5 
Series G Note3.88%202728.1 28.1 
Series L Note4.89%202818.0 18.0 
Series I Note4.16%202825.0 25.0 
Term Loan 54.30%202925.0 25.0 
Subtotal$267.0 $285.1 
Revolving Credit Facilities:
GLP Asphalt Wells Fargo revolving credit facility(4)2022$— $— 
GLP Asphalt FHB revolving credit facility(5)20246.8 — 
A&B Revolver(6)2025— 50.0 
Subtotal$6.8 $50.0 
Total debt (contractual)$469.9 $532.9 
Unamortized debt issuance costs(0.2)(0.2)
Total debt (carrying value)$469.7 $532.7 
(1) Financing leases have a weighted average stated interest rate of approximately 2.90% and stated maturity dates ranging from 2022 to 2027.
(2) Financing lease has a discount rate of 4.14%.
(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 had a stated interest rate of SOFR plus 1.75%. Credit agreement terminated on June 15, 2022.
(5) Loan has a stated interest rate of BSBY plus 1.25%.
(6) Loan has a stated interest rate of LIBOR plus 1.05% based on a pricing grid. $50.0 million was swapped through June 2022 to a 2.40% fixed rate.
10

On March 5, 2021, the Financial Conduct Authority announced a timeline for the phase-out of the London Interbank Offered Rate ("LIBOR"). The Federal Reserve, the Federal Deposit Insurance Corporation, and the Office of the Comptroller of the Currency subsequently issued a joint statement saying that banks should stop entering into new contracts with LIBOR as soon as possible but at least by December 31, 2021. As of January 1, 2022, LIBOR can only be used for legacy LIBOR obligations entered into prior to December 31, 2021. In addition, LIBOR will cease to be available after June 30, 2023. The Secured Overnight Financing Rate ("SOFR") and Bloomberg Short Term Bank Yield Index ("BSBY") have been identified as replacements to LIBOR, with the former being recommended by the Federal Reserve-formed Alternative Reference Rates Committee.

As of March 31, 2022, the GLP Asphalt Wells Fargo Revolving Credit Facility had transitioned from LIBOR to a benchmark based on SOFR. On April 29, 2022, the Company entered into a Sixth Amendment to this credit agreement with Wells Fargo Bank, NA, extending the maturity date by 45 days from May 1, 2022, to June 15, 2022. The credit agreement terminated on June 15, 2022.

On June 15, 2022, GLP Asphalt entered into a revolving credit facility with First Hawaiian Bank that provides for an aggregate $20.0 million, two-year secured line of credit. The credit line is collateralized by GLP inventory and accounts receivable. Grace Pacific, LLC, a wholly-owned subsidiary of the Company, and the noncontrolling interest holders are guarantors, on a several basis, for their pro rata shares (based on membership interests) of borrowings under the line of credit.

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.
Cash Flow Hedges of Interest Rate Risk
As of September 30, 2022, the Company had one interest rate swap agreement designated as a cash flow hedge, while as of December 31, 2021, there were two such swaps, whose key terms are as follows (dollars in millions):

EffectiveMaturityFixed InterestNotional Amount atAsset (Liability) Fair Value at
DateDateRateSeptember 30, 2022September 30, 2022December 31, 2021
4/7/20168/1/20293.14%$54.9 $5.9 $(1.7)
2/13/20202/27/2023(1)$— $— $(0.5)
(1) $50.0 million in notional interest rate swap was terminated on June 30, 2022, resulting in a realized gain of $0.5 million included within Interest and other income (expense), net.

The asset related to the interest rate swap as of September 30, 2022, is presented within Prepaid expenses and other assets in the condensed consolidated balance sheet. The liability related to the interest rate swaps as of December 31, 2021, is presented within Accrued and other liabilities. The changes in fair value of the cash flow hedges 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 and nine months ended September 30, 2022 and 2021, (in millions):

Three Months Ended September 30,Nine Months Ended September 30,
2022202120222021
Derivatives in Designated Cash Flow Hedging Relationships:
Amount of gain (loss) recognized in OCI on derivatives$2.6 $0.2 $8.0 $1.9 
Impact of reclassification adjustment to interest expense included in Net Income (Loss)$(0.1)$0.4 $0.5 $1.2 
Realized interest rate hedging gain (loss)$— $— $(0.5)$— 

As of September 30, 2022, the Company expects to reclassify $0.3 million of net gains (losses) on derivative instruments from accumulated other comprehensive income to earnings during the next 12 months.
11

The Company measures interest rate swaps at fair value, which is based on the estimated amounts that the Company would receive or pay to terminate the contract at the reporting date and determined using interest rate pricing models and interest rate related observable inputs. The fair value of the Company's interest rate swap is classified as a Level 2 measurement in the fair value hierarchy.
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 September 30, 2022:
•Standby letters of credit issued by the Company's lenders under the Company's revolving credit facilities totaled $1.1 million as of September 30, 2022. 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 $332.3 million as of September 30, 2022. Approximately $313.7 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 September 30, 2022, the Company's maximum remaining exposure, in the event of defaults on all existing contractual construction obligations, was approximately $128.1 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 September 30, 2022, 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 $0.5 million outstanding as of September 30, 2022.
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 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 challenged the BLNR’s decision to continue the revocable permits for calendar year 2015 and asked the court to void the revocable permits and to declare that the renewals were illegally issued without preparation of
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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.
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.
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 approved another renewal of such permits through December 31, 2021.
On March 2, 2022, the Supreme Court of Hawai’i vacated the ICA’s ruling relating to the BLNR's decision to continue the revocable permits for the calendar year 2015, holding that Hawaii Revised Statutes Chapter 343 (the Hawaii Environmental Policy Act) did apply to the