Hawaii
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45-4849780
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(State or other jurisdiction of
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(I.R.S. Employer
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incorporation or organization)
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Identification No.)
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Name of each exchange
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Title of each class
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on which registered
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Common Stock, without par value
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NYSE
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Large accelerated filer
x
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Accelerated filer
o
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Non-accelerated filer
o
(Do not check if a smaller reporting company)
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Smaller reporting company
o
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Page
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Items 1 & 2.
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Business and Properties
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A.
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Real Estate Development and Sales Segment
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(1)
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Landholdings
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(2)
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Planning and Zoning
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(3)
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Development Projects
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B.
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Real Estate Leasing Segment
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C.
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Materials and Construction
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D.
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Agribusiness
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(1)
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Sugar Production
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(2)
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Marketing of Sugar
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(3)
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Sugar Competition and Legislation
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(4)
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Land Designations and Water
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(5)
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Energy
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Employees and Labor Relations
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Available Information
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Item 1A.
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Risk Factors
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Item 1B.
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Unresolved Staff Comments
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Item 3.
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Legal Proceedings
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Item 4.
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Mine Safety Disclosures
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Item 5.
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Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities
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Item 6.
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Selected Financial Data
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Item 7.
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Management’s Discussion and Analysis of Financial Condition and Results of Operations
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Items 7A.
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Quantitative and Qualitative Disclosures About Market Risk
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Item 8.
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Financial Statements and Supplementary Data
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Item 10.
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Directors, Executive Officers and Corporate Governance
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A.
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Directors
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B.
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Executive Officers
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C.
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Corporate Governance
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D.
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Code of Ethics
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Item 11.
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Executive Compensation
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Item 12.
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Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters
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Item 13.
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Certain Relationships and Related Transactions, and Director Independence
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Item 14.
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Principal Accounting Fees and Services
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A.
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Real Estate:
The Company's two real estate segments engage in real estate development and ownership activities, including planning, zoning, financing, constructing, purchasing, managing, leasing, selling, exchanging and investing in real property. Real estate activities are conducted through A&B Properties, Inc. and other wholly owned subsidiaries of A&B.
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▪
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Real Estate Development and Sales
- generates its revenues and creates value through an active and comprehensive program of land stewardship, planning, entitlement, development, real estate investment and sale of land and commercial and residential properties, principally in Hawaii.
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▪
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Real Estate Leasing -
owns, operates, and manages a portfolio of
60
high-quality retail, office and industrial properties in Hawaii and on the Mainland totaling
5.1 million
square feet of GLA. The Company also leases urban land in Hawaii to third-party lessees, including
51
acres on Oahu (improved with
760,000
square feet of commercial space owned by the lessees) and 64 acres on the neighbor islands. The significant recurring cash flow generated by this portfolio and ground leases serves as an important source of funding for A&B’s Real Estate Development and Sales segment activities.
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B.
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Materials and Construction:
performs asphalt paving as prime contractor and subcontractor; imports and sells liquid asphalt; mines, processes and sells basalt aggregate; produces and sells asphaltic concrete; provides and sells various construction- and traffic-control-related products and manufactures and sells precast concrete products.
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C.
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Agribusiness:
produces bulk raw sugar, specialty food grade sugars and molasses; produces and sells specialty food-grade sugars; provides general trucking services, mobile equipment maintenance and repair services; leases agricultural land to third parties; and generates and sells electricity to the extent not used in segment operations.
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Segment
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2014 Revenue
(in millions) |
Percentage of
Total 2014 Revenue |
2014
Operating Profit (in millions) |
Percentage of
Total 2014 Operating Profit |
Key Facts
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Real Estate Development and Sales
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$
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150.0
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24
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%
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$
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85.7
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58
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%
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Hawaii-focused, experienced developer with a large development pipeline encompassing over a dozen projects entitled for over 3,000 units. Fourth largest private landowner in Hawaii with over 88,000 acres.
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Real Estate Leasing
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125.6
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20
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%
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47.5
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32
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%
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High-quality commercial portfolio consisting of 60 improved properties in Hawaii and seven Mainland states, totaling 5.1 million square feet, and 115 acres of urban commercial ground leases to third parties. A&B is the second largest commercial retail property owner in Hawaii.
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Materials and Construction
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234.3
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37
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%
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25.9
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18
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%
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Holds a leading market position in asphalt paving and in the production of asphaltic concrete and is the largest producer of aggregate in the State of Hawaii.
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Agribusiness
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120.5
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19
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%
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(11.8
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)
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(8
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)%
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Largest farmer in Hawaii and only producer of raw sugar in Hawaii, producing over 162,000 tons of sugar in 2014.
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Total
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$
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630.4
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100
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%
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$
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147.3
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100
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%
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•
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Extensive and irreplaceable landholdings:
A&B is the fourth largest private landowner in Hawaii, with over 88,000 acres, primarily on Maui and Kauai, including 901 acres fully entitled for urban use, and 181 acres under commercial properties.
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High-quality commercial real estate portfolio and ground leases producing strong free cash flow:
A&B owns and manages a high-quality commercial portfolio of 60 properties in Hawaii and seven Mainland states, totaling 5.1 million square feet, and has 115 acres of urban land ground leased to third parties, both of which provide significant, stable recurring cash flows that support A&B’s real estate investment activities. A&B's retail holdings make it the second largest retail owner in Hawaii (by GLA).
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Diverse pipeline of development projects:
A&B’s development pipeline encompasses over a dozen resort residential, primary residential and commercial projects comprising more than 3,000 units throughout the State of Hawaii, providing for substantial embedded growth opportunities.
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Largest agricultural operation in Hawaii:
A&B farms roughly 36,000 acres of mostly contiguous lands in Maui’s central valley with extensive infrastructure to meet water, power and transportation needs, consistent with large-scale agronomic activity. Additionally, A&B owns approximately 7,000 acres of high-quality agricultural land on
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Infrastructure-related assets:
Grace owns over 800 acres in the state related to its quarrying operations, including 541 acres on Oahu's growing west side. Grace's Makakilo, Oahu quarry facility is nearing completion of a multi-year, capital improvement program, including three new crushing and finishing plants, which is expected to result in greater operational efficiencies and lower costs going forward. Due to the high cost of transporting aggregate, Grace’s quarry is ideally situated on Oahu's west side, which is expected to see significant growth over the next two decades. Grace also owns strategically placed asphaltic concrete plants located throughout the state, including Oahu (three locations), Maui (one location), Kauai (one location), Hawaii Island (one location) and Molokai (two locations).
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Experienced management team with deep local knowledge and expertise:
A&B has been in the development business in Hawaii since 1949 when it established Kahului Development Co., Ltd. to develop and market “Dream City,” which today is Kahului, Maui’s principal population center and commercial hub. In the ensuing decades, A&B has expanded and diversified its pipeline of development projects and broadened its development capabilities and expertise. For instance, A&B developed the world famous Wailea master-planned resort community on Maui’s south shore. The Company’s knowledge, expertise and relationships forged through over six decades of Hawaii development activity, combined with disciplined underwriting, enable it to profitably pursue a wide range of long-term commercial and residential developments in a manner that is both responsive to market needs and sensitive to local concerns. This local knowledge and expertise, combined with the Company’s strong financial position, also serve to make A&B an ideal partner for landowners, developers and others seeking to participate in the Hawaii real estate sector.
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Track record of success:
A&B has an extensive track record of investing in Hawaii real estate. Since 2000, A&B has invested approximately $700 million in Hawaii real estate development projects outside of its legacy holdings--including five high-rise condominiums in urban Honolulu--and over $1.5 billion in the acquisition of Hawaii and Mainland commercial properties, mainly through tax-deferred property exchanges.
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Leading market position:
Grace holds a leading market position in asphalt paving and in the production of asphaltic concrete, and is also the largest producer of aggregate in the State of Hawaii. Due to relatively high capital requirements needed to compete in the market, Grace’s scale provides a cost advantage relative to other competitors in the state. Grace expects to benefit from the impact that the improving Hawaii economy is expected to have on spending on infrastructure and private development. For example, the condition of Hawaii’s roads, in general, and Oahu’s roads, in particular, are consistently ranked near the bottom as compared to other states and metropolitan areas, and as a result, the City and County of Honolulu administration increased its road maintenance budget from $100 million in 2012 to $120 million in 2013 and $132 million in 2014 (the City's fiscal year runs from July 1 to June 30).
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Experienced management team:
In addition to its unique tangible assets, the segment's management team has extensive expertise in quarry management and operations, asphaltic concrete production and asphalt paving.
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Vertically integrated business model:
Grace’s vertically integrated business model, which includes the mining of basalt aggregate and the importation and distribution of liquid asphalt, provides it with cost benefits at higher throughput rates, while also increasing cost certainty due to the ability to manage costs throughout the supply chain. This cost certainty allows Grace to compete effectively as an efficient, high-quality, low-cost provider. In addition, Grace provides and markets various construction- and traffic-control-related products and services.
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Employ lands at their highest and best use:
A&B strives to maximize values in its legacy landholdings by employing its land at its highest and best use to the benefit of shareholders, employees, its communities and other key stakeholder groups. For a significant portion of A&B’s substantial Hawaii landholdings, this implies a wide spectrum of non-development uses, ranging from conservation/watershed to pasture to active farming. While a material portion of A&B’s landholdings has limited or no long-term urban development potential, these landholdings remain valuable for farming and other uses, such as providing access to natural resources or hydro-electric generation capability.
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Entitle and develop core Hawaii lands:
A&B continually focuses on entitling and developing a portion of its core landholdings in Hawaii to respond to market demand while meeting community needs.
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Optimize returns of A&B’s commercial portfolio:
A&B actively manages its commercial portfolio to increase occupancy, secure quality tenants and reduce costs, with the ultimate goal of maximizing the financial performance of these properties. Periodically, when A&B identifies superior financial return potential in a new commercial asset, it may market an existing asset for sale to facilitate a Section 1031 tax deferred exchange into the new property.
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Migrate the commercial portfolio to Hawaii from the Mainland:
A&B is focused on opportunistically migrating its Mainland portfolio to Hawaii over time, where it believes it can leverage its market knowledge and proximity to generate greater incremental shareholder value over the long run.
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Invest in high-returning real estate opportunities in Hawaii:
A&B is focused on pursuing and investing in attractive real estate opportunities in Hawaii where it can leverage its market knowledge, experience and financial strength to create significant value and, at the same time, expand and diversify its existing portfolio and pipeline.
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Build a pipeline of development projects scaled to market opportunities and designed to optimize risk-adjusted returns:
A&B owns a valuable pipeline of development projects encompassing a wide-range of product types, from resort residential real estate, to commercial and industrial, to primary residential housing. A&B employs a disciplined approach to its investments and prudently invests capital to position select projects to meet anticipated market demand. A&B pursues joint ventures, where appropriate, to supplement its in-house capabilities, access third-party capital, gain access to new opportunities in the Hawaii market, diversify its pipeline and optimize risk-adjusted returns.
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•
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Leverage vertically integrated business model to lower costs:
Grace maintains cost benefits through a vertically integrated business model that encompasses the production of aggregate and the importation of liquid asphalt and sand. These activities help ensure that Grace has adequate access to raw materials needed to produce asphaltic concrete and, therefore, also provides for a level of cost certainty that allows Grace to compete effectively on sealed bid contracts. In addition, Grace and non-consolidated affiliated companies provide and market various construction- and traffic-control-related products and services.
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Capitalize on strategically located quarry adjacent to fast-growing area on Oahu:
Grace owns one of two operating quarries on the island of Oahu that has suitable grade A material required for the production of hot mix asphalt. Grace's quarry is also the only quarry located adjacent to the fast-growing region on the west side of Oahu. It is proximate to the first two phases of the Honolulu Rail Project and to more than 15,000 residential units and commercial projects, which are projected in the future. Due to the high cost of transporting aggregate and the
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•
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De-risk agricultural operations:
A&B continuously seeks to stabilize and de-risk its agricultural operations. For example, A&B has enhanced the management of field and factory at its sugar operations, resulting in improved yields in recent years. However, notwithstanding operational improvements, fluctuating sugar prices and inclement weather conditions generate significant earnings volatility, and therefore, A&B continues to evaluate alternative business models that could dampen this volatility.
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•
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Grow renewable energy operations:
A&B is a leading provider of renewable energy on Maui and Kauai, and in recent years, has added high-returning renewable solar generation to its portfolio. A&B continues to evaluate and further capitalize on new renewable energy opportunities in Hawaii to expand its portfolio and support the State of Hawaii's Clean Energy Initiative.
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Acres
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Location
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Urban/Entitled*
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Agriculture
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Conservation
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Total
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Maui
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593
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49,717
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15,870
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66,180
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Kauai
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117
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6,918
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13,325
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20,360
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Oahu
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181
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615
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640
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1,436
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Molokai
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—
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265
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—
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265
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Big Island
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10
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—
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—
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10
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TOTAL HAWAII
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901
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57,515
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29,835
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88,251
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TOTAL MAINLAND
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166
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—
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—
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166
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TOTAL LANDHOLDINGS
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1,067
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57,515
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29,835
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88,417
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*
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Land is designated "fully entitled urban" when all four land use approvals described in the "Planning and Zoning" section have been obtained. The total also includes 347 acres under commercial properties.
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Project
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Original Acres
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Acres at December 31, 2014
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Kukui’ula (HI)
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1,000
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936
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California joint ventures
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97
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97
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Ka Milo (HI)
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31
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17
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The Collection (HI)
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3
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3
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Waihonua (HI)
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2
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2
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TOTAL
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1,133
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1,055
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•
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County amendment of the County General Plan to reflect residential use;
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•
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State Land Use Commission approval to reclassify the parcel from the Agricultural district to the Urban district;
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•
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County amendment of the County Community Plan to reflect residential use; and
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•
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County approval to rezone the property to the precise residential use desired.
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Project
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Location
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Product type
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Acres at
12/31/14
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Original planned units, saleable acres or
gross
leasable
square feet
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Estimated
project
cost (1)
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A&B
net investment
as of
12/31/14 ($mil; including capitalized interest)
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Estimated
substantial
completion of construction
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ACTIVE PLANNING, DEVELOPMENT AND SALES
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Wholly owned
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Haliimaile
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Haliimaile, Maui
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Primary residential
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55
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(2)
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175-200 lots
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tbd
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1
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tbd
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Kahala Avenue Portfolio
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Honolulu, Oahu
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Residential
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9
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30 lots
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135
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78
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n/a
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Kihei Residential
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Kihei, Maui
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Primary residential
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95
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600 units
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tbd
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1
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tbd
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Maui Business Park II
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Kahului, Maui
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Light industrial lots
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143
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(3)
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136 acres
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81
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52
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2021
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Mililani Mauka South
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Mililani, Oahu
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Retail/office developed for commercial portfolio
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1
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18,500 sf
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9
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3
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2015
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The Ridge at Wailea (MF-19)
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Wailea, Maui
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Resort residential
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6
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9 lots
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9
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8
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2009
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Wailea B-1
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Wailea, Maui
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Commercial/retail
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11
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60,000 sf
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tbd
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5
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tbd
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Wailea MF-7
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Wailea, Maui
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Resort residential
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13
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75 units
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84
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9
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2018
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Total
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333
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Project
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Location
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Product type
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Acres at
12/31/14
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Planned units, saleable acres or
gross
leasable
square feet
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Estimated
project
cost (1)
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A&B
net investment
as of
12/31/14 ($mil; including capitalized interest)
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Estimated
substantial
completion of construction
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ACTIVE PLANNING, DEVELOPMENT AND SALES
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Joint ventures
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Ka Milo at Mauna Lani
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Kona, Hawaii
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Resort residential
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17
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137 units
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120
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11
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2016
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Keala 'O Wailea (MF-11)
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Wailea, Maui
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Resort residential
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7
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70 units
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60
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9
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2017
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Kukui'ula
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Poipu, Kauai
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Resort residential
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936
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Up to 1,500 units on 640 saleable acres
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805
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277
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2030
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The Collection
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Honolulu, Oahu
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Primary residential/commercial
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3
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465 units
(464 salable) |
275
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46
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2016
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Waihonua at Kewalo
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Honolulu, Oahu
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Primary residential high-rise
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2
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341 units
(340 salable) |
207
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36
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2014
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Total
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965
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|||
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(1)
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Includes land cost at book value and capitalized interest, but excludes sales commissions and closing costs.
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(2)
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Eighteen of the 55 acres are designated for parks, open space, drainage and a waste water treatment plant.
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(3)
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Includes 18 acres of roadways and other infrastructure that are not saleable.
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Project
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Location
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Product type
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Acres at
12/31/14 |
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FUTURE DEVELOPMENT
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Wholly owned
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Aina 'O Kane
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Kahului, Maui
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Primary residential/commercial
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4
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1
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Brydeswood
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Kalaheo, Kauai
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Agricultural lots
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336
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3
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Kahului Town Center
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Kahului, Maui
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Primary residential/commercial
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19
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2
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Kai Olino
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Port Allen, Kauai
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Primary residential
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4
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11
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Wailea SF-8
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Kihei, Maui
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Primary residential
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13
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1
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Wailea MF-6
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Wailea, Maui
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Resort residential lots
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23
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6
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Wailea MF-10
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Wailea, Maui
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Resort/commercial
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7
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2
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Wailea MF-16
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Wailea, Maui
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Resort residential lots
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7
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3
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Wailea, other
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Wailea, Maui
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Various
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76
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|
20
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Total
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489
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|
|
||
|
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|
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||
Joint ventures
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|
|
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Bakersfield
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Bakersfield, CA
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Retail
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57
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7
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Palmdale Center
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Palmdale, CA
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Office/industrial
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18
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5
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Santa Barbara Ranch
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Santa Barbara, CA
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Primary residential lots
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22
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|
6
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Total
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|
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97
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Project
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Location
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Product type
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Acres at
12/31/14
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Planned units,
saleable acres or
gross leasable
square feet
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||
|
|
|
|
|||
ENTITLEMENT
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Ele'ele Community Phase I
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Ele'ele, Kauai
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Primary residential
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260
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|
tbd
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Wai'ale
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Kahului, Maui
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Primary residential
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545
|
|
up to 2,550 units
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Total
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|
|
805
|
|
|
•
|
At the 7.4-acre MF-11 (Keala ‘O Wailea) project, A&B has obtained final regulatory approval for a planned joint venture development of 70 multi-family units. Presales are expected to commence in 2015.
|
•
|
The 7.0-acre MF-19 parcel (Ridge at Wailea) was developed into nine residential lots. In 2014, one lot was sold and eight remain available for sale.
|
•
|
The 13.0-acre MF-7 parcel is fully designed and permitted for the development of a 75-unit multi-family project. The project has secured the required affordable housing credits and water meters. Timing of presales will depend on market conditions.
|
•
|
At the 11.0-acre B-1 parcel, A&B is evaluating bulk sale or development options.
|
Property
|
Location
|
Type
|
Leasable Area
(sq. ft.)
|
|
|
|
|
|
|
Pearl Highlands Center
|
Pearl City, Oahu
|
Retail
|
415,400
|
|
Kailua-Retail (15 properties)
|
Kailua, Oahu
|
Retail
|
316,200
|
|
Komohana Industrial Park
|
Kapolei, Oahu
|
Industrial
|
238,300
|
|
Kaka'ako Commerce Center
|
Honolulu, Oahu
|
Industrial
|
204,400
|
|
Waianae Mall
|
Waianae, Oahu
|
Retail
|
170,300
|
|
Waipio Industrial
|
Waipahu, Oahu
|
Industrial
|
158,400
|
|
Kaneohe Bay Shopping Center
|
Kaneohe, Oahu
|
Retail
|
125,100
|
|
Waipio Shopping Center
|
Waipahu, Oahu
|
Retail
|
113,800
|
|
P&L Building
|
Kahului, Maui
|
Industrial
|
104,100
|
|
Lanihau Marketplace
|
Kailua-Kona, Hawaii
|
Retail
|
88,300
|
|
Port Allen (4 buildings)
|
Port Allen, Kauai
|
Industrial/Retail
|
87,400
|
|
The Shops at Kukui'ula
|
Poipu, Kauai
|
Retail
|
78,900
|
|
Kailua-Industrial (6 properties)
|
Kailua, Oahu
|
Industrial
|
68,800
|
|
Kunia Shopping Center
|
Waipahu, Oahu
|
Retail
|
60,400
|
|
Kahului Office Building
|
Kahului, Maui
|
Office
|
59,600
|
|
Lahaina Square
|
Lahaina, Maui
|
Retail
|
50,200
|
|
Kahului Shopping Center
|
Kahului, Maui
|
Retail
|
47,200
|
|
Napili Plaza
|
Napili, Maui
|
Retail
|
45,100
|
|
Kahului Office Center
|
Kahului, Maui
|
Office
|
33,400
|
|
Stangenwald Building
|
Honolulu, Oahu
|
Office
|
27,100
|
|
Judd Building
|
Honolulu, Oahu
|
Office
|
20,200
|
|
Gateway at Mililani Mauka
|
Mililani, Oahu
|
Retail
|
18,900
|
|
Gateway at Mililani Mauka South
|
Mililani, Oahu
|
Office
|
18,700
|
|
Maui Clinic Building
|
Kahului, Maui
|
Office
|
16,600
|
|
Lono Center
|
Kahului, Maui
|
Office
|
13,400
|
|
Total
|
|
|
2,580,200
|
|
*
|
Refer to page
47
for a discussion of management's use of a non-GAAP financial measure and the required reconciliation of non-GAAP measures to GAAP measures.
|
Property
|
Location
|
Type
|
Leasable Area
(sq. ft.)
|
|
Midstate Hayes
|
Visalia, CA
|
Industrial
|
790,200
|
|
Sparks Business Center
|
Sparks, NV
|
Industrial
|
396,100
|
|
1800 and 1820 Preston Park
|
Plano, TX
|
Office
|
198,800
|
|
Ninigret Office Park
|
Salt Lake City, UT
|
Office
|
185,500
|
|
San Pedro Plaza
|
San Antonio, TX
|
Office/Retail
|
171,900
|
|
2868 Prospect Park
|
Sacramento, CA
|
Office
|
162,900
|
|
Little Cottonwood Center
|
Sandy, UT
|
Retail
|
141,500
|
|
Concorde Commerce Center
|
Phoenix, AZ
|
Office
|
138,700
|
|
Deer Valley Financial Center
|
Phoenix, AZ
|
Office
|
126,600
|
|
Union Bank
|
Everett, WA
|
Office
|
84,000
|
|
Gateway Oaks
|
Sacramento, CA
|
Office
|
58,700
|
|
Wilshire Shopping Center
|
Greeley, CO
|
Retail
|
46,500
|
|
Royal MacArthur Center
|
Dallas, TX
|
Retail
|
44,800
|
|
Total
|
|
|
2,546,200
|
|
Year of expiration
|
Sq. ft. of
expiring
leases
|
Percentage
of total
leased GLA
|
Annual
gross rent
expiring
(1)
($ in millions)
|
Percentage
of total
annual gross
rent
|
||||||||
|
|
|
|
|
|
|
|
|
||||
2015
|
713,192
|
|
|
15.3
|
%
|
|
10.5
|
|
|
13.5
|
%
|
|
2016
|
930,594
|
|
|
19.9
|
%
|
|
11.3
|
|
|
14.5
|
%
|
|
2017
|
815,409
|
|
|
17.5
|
%
|
|
13.6
|
|
|
17.5
|
%
|
|
2018
|
570,792
|
|
|
12.2
|
%
|
|
7.3
|
|
|
9.4
|
%
|
|
2019
|
450,061
|
|
|
9.6
|
%
|
|
10.7
|
|
|
13.8
|
%
|
|
2020
|
362,210
|
|
|
7.8
|
%
|
|
6.6
|
|
|
8.5
|
%
|
|
2021
|
224,285
|
|
|
4.8
|
%
|
|
4.6
|
|
|
5.9
|
%
|
|
2022
|
69,277
|
|
|
1.5
|
%
|
|
1.8
|
|
|
2.3
|
%
|
|
2023
|
128,251
|
|
|
2.8
|
%
|
|
2.1
|
|
|
2.7
|
%
|
|
2024
|
136,936
|
|
|
2.9
|
%
|
|
3.5
|
|
|
4.5
|
%
|
|
2025
|
15,775
|
|
|
0.3
|
%
|
|
0.7
|
|
|
0.9
|
%
|
|
Thereafter
|
249,527
|
|
|
5.4
|
%
|
|
5.1
|
|
|
6.5
|
%
|
|
Total
|
4,666,309
|
|
|
100.0
|
%
|
|
77.8
|
|
|
100.0
|
%
|
|
(1)
|
Annual gross rent means the annualized base rent amounts of expiring leases and includes improved properties only and excludes 0.2 million square feet of month-to-month leases.
|
(1)
|
Annual gross rent means the annualized base rent amounts of expiring leases and includes improved properties only and excludes 0.2 million square feet of month-to-month leases.
|
•
|
an inability of A&B or buyers to secure sufficient financing or insurance on favorable terms, or at all;
|
•
|
construction delays, defects, or cost overruns, which may increase project development costs;
|
•
|
an increase in commodity or construction costs, including labor costs;
|
•
|
the discovery of hazardous or toxic substances, or other environmental, culturally-sensitive, or related issues;
|
•
|
an inability to obtain, or significant delay in obtaining, zoning, construction, occupancy and other required governmental permits and authorizations;
|
•
|
difficulty in complying with local, city, county and state rules and regulations regarding permitting, zoning, subdivision, utilities, affordable housing and water quality, as well as federal rules and regulations regarding air and water quality and protection of endangered species and their habitats;
|
•
|
an inability to have access to sufficient and reliable sources of water or to secure water service or meters for its projects;
|
•
|
an inability to secure tenants or buyers necessary to support the project or maintain compliance with debt covenants;
|
•
|
failure to achieve or sustain anticipated occupancy or sales levels;
|
•
|
buyer defaults, including defaults under executed or binding contracts;
|
•
|
condemnation of all or parts of development or operating properties, which could adversely affect the value or viability of such projects; and
|
•
|
an inability to sell A&B’s constructed inventory.
|
•
|
a significant number of A&B’s tenants are unable to meet their obligations;
|
•
|
increases in non-recoverable operating and ownership costs;
|
•
|
A&B is unable to lease space at its properties when the space becomes available;
|
•
|
the rental rates upon a renewal or a new lease are significantly lower than prior rents or do not increase sufficiently to cover increases in operating and ownership costs;
|
•
|
the providing of lease concessions, such as free or discounted rents and tenant improvement allowances; and
|
•
|
the discovery of hazardous or toxic substances, or other environmental, culturally-sensitive, or related issues at the property.
|
•
|
A&B may not have voting control over the joint venture;
|
•
|
A&B may not be able to maintain good relationships with its venture partners;
|
•
|
the venture partner at any time may have economic or business interests that are inconsistent with A&B’s economic or business interests;
|
•
|
the venture partner may fail to fund its share of capital for operations and development activities, or to fulfill its other commitments, including providing accurate and timely accounting and financial information to A&B;
|
•
|
the joint venture or venture partner could lose key personnel
|
•
|
the venture partner could become insolvent, requiring A&B to assume all risks and capital requirements related to the joint venture project, and any resulting bankruptcy proceedings could have an adverse impact on the operation of the project or the joint venture; and
|
•
|
A&B may be required to perform on guarantees it has provided or agrees to provide in the future related to the completion of a joint venture's construction and development of a project, joint venture indebtedness, or on indemnification of a third party serving as surety for a joint venture's bonds for such completion.
|
•
|
decreased government funding for infrastructure projects (see the "
Economic downturns or reductions in government funding of infrastructure projects could reduce A&B's revenues and profits from its materials and construction businesses."
risk factor below);
|
•
|
reduced spending by private sector customers resulting from poor economic conditions in Hawaii;
|
•
|
an increased number of competitors;
|
•
|
less success in competitive bidding for contracts;
|
•
|
limitations on access to necessary working capital and investment capital to sustain growth;
|
•
|
inability to hire and retain essential personnel and to acquire equipment to support growth; and
|
•
|
inability to identify acquisition candidates and successfully acquire and integrate them into A&B's materials and construction businesses.
|
•
|
equipment accidents or failures in the factory or the power plant, particularly where equipment is old and difficult to repair or replace;
|
•
|
government restrictions on farming practices, including cane burning and pesticide use;
|
•
|
loss of A&B's major customer;
|
•
|
weather and natural disasters, such as excessive rain, which impacts the efficiency of harvesting operations, and vog, which leads to inefficient and costly no-burn cane harvesting;
|
•
|
increases in costs, including, but not limited to fuel, fertilizer, herbicide and drip tubing;
|
•
|
labor, including labor availability (see risk factor above regarding labor disruptions) and loss of qualified personnel;
|
•
|
lack of demand for sugar production;
|
•
|
failure to comply with food quality and safety requirements;
|
•
|
disease;
|
•
|
uncontrolled fires, including arson; and
|
•
|
weed control.
|
|
Dividends Paid Per Share
|
|
Market Price
|
||||||||||||
|
|
|
High
|
|
Low
|
|
Close
|
||||||||
2013
|
|
|
|
|
|
|
|
||||||||
First Quarter
|
$
|
—
|
|
|
$
|
36.86
|
|
|
$
|
28.82
|
|
|
$
|
35.75
|
|
Second Quarter
|
$
|
—
|
|
|
$
|
40.95
|
|
|
$
|
32.55
|
|
|
$
|
39.75
|
|
Third Quarter
|
$
|
—
|
|
|
$
|
46.23
|
|
|
$
|
34.32
|
|
|
$
|
36.02
|
|
Fourth Quarter
|
$
|
0.04
|
|
|
$
|
41.97
|
|
|
$
|
35.71
|
|
|
$
|
41.73
|
|
|
|
|
|
|
|
|
|
||||||||
2014
|
|
|
|
|
|
|
|
||||||||
First Quarter
|
$
|
0.04
|
|
|
$
|
45.16
|
|
|
$
|
36.98
|
|
|
$
|
42.56
|
|
Second Quarter
|
$
|
0.04
|
|
|
$
|
43.19
|
|
|
$
|
36.61
|
|
|
$
|
41.45
|
|
Third Quarter
|
$
|
0.04
|
|
|
$
|
42.38
|
|
|
$
|
35.96
|
|
|
$
|
35.97
|
|
Fourth Quarter
|
$
|
0.05
|
|
|
$
|
40.99
|
|
|
$
|
33.98
|
|
|
$
|
39.26
|
|
*
|
Under the 2013 Incentive Compensation Plan, 1,376,473 shares may be issued either as restricted stock grants, restricted stock unit grants, or stock option grants.
|
|
2014
|
|
2013
|
|
2012
|
|
2011
|
|
2010
|
||||||||||
Revenue:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Real Estate:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Leasing
|
$
|
125.6
|
|
|
$
|
110.4
|
|
|
$
|
100.6
|
|
|
$
|
99.7
|
|
|
$
|
93.8
|
|
Development and Sales
|
150.0
|
|
|
423.0
|
|
|
32.2
|
|
|
59.8
|
|
|
131.0
|
|
|||||
Less amounts reported in discontinued operations
1
|
(70.4
|
)
|
|
(369.2
|
)
|
|
(45.3
|
)
|
|
(81.9
|
)
|
|
(154.0
|
)
|
|||||
Materials and Construction
2
|
234.3
|
|
|
54.9
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Agribusiness
3
|
120.5
|
|
|
146.1
|
|
|
182.3
|
|
|
157.5
|
|
|
165.6
|
|
|||||
Reconciling items
4
|
—
|
|
|
—
|
|
|
(8.3
|
)
|
|
—
|
|
|
—
|
|
|||||
Total revenue
|
$
|
560.0
|
|
|
$
|
365.2
|
|
|
$
|
261.5
|
|
|
$
|
235.1
|
|
|
$
|
236.4
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Operating Profit (Loss)
:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Real Estate:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Leasing
|
$
|
47.5
|
|
|
$
|
43.4
|
|
|
$
|
41.6
|
|
|
$
|
39.3
|
|
|
$
|
35.3
|
|
Development and Sales
5
|
85.7
|
|
|
44.4
|
|
|
(4.4
|
)
|
|
15.5
|
|
|
50.1
|
|
|||||
Less amounts reported in discontinued operations
1
|
(56.2
|
)
|
|
(36.7
|
)
|
|
(21.1
|
)
|
|
(38.8
|
)
|
|
(64.6
|
)
|
|||||
Materials and Construction
2
|
25.9
|
|
|
2.9
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Agribusiness
3
|
(11.8
|
)
|
|
10.7
|
|
|
20.8
|
|
|
22.2
|
|
|
6.1
|
|
|||||
Total operating profit
|
91.1
|
|
|
64.7
|
|
|
36.9
|
|
|
38.2
|
|
|
26.9
|
|
|||||
Interest expense
|
(29.0
|
)
|
|
(19.1
|
)
|
|
(14.9
|
)
|
|
(17.1
|
)
|
|
(17.3
|
)
|
|||||
General corporate expenses
|
(18.6
|
)
|
|
(17.4
|
)
|
|
(15.1
|
)
|
|
(19.9
|
)
|
|
(22.7
|
)
|
|||||
Reduction in KRS II carrying value, net
6
|
(14.7
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Acquisition/Separation costs
|
—
|
|
|
(4.6
|
)
|
|
(6.8
|
)
|
|
—
|
|
|
—
|
|
|||||
Income (loss) from continuing operations before income taxes
|
28.8
|
|
|
23.6
|
|
|
0.1
|
|
|
1.2
|
|
|
(13.1
|
)
|
|||||
Income tax expense (benefit)
7
|
(1.4
|
)
|
|
11.1
|
|
|
(5.9
|
)
|
|
2.8
|
|
|
(5.0
|
)
|
|||||
Income (loss) from continuing operations
|
30.2
|
|
|
12.5
|
|
|
6.0
|
|
|
(1.6
|
)
|
|
(8.1
|
)
|
|||||
Income from discontinued operations
|
34.3
|
|
|
22.3
|
|
|
12.8
|
|
|
23.3
|
|
|
41.2
|
|
|||||
Net income
|
64.5
|
|
|
34.8
|
|
|
18.8
|
|
|
21.7
|
|
|
33.1
|
|
|||||
Income attributable to non-controlling interest
|
(3.1
|
)
|
|
(0.5
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Net income attributable to A&B
|
$
|
61.4
|
|
|
$
|
34.3
|
|
|
$
|
18.8
|
|
|
$
|
21.7
|
|
|
$
|
33.1
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Identifiable Assets:
|
|
|
|
|
|
|
|
|
|
||||||||||
Real Estate:
|
|
|
|
|
|
|
|
|
|
||||||||||
Leasing
|
$
|
1,121.6
|
|
|
$
|
1,113.4
|
|
|
$
|
771.3
|
|
|
$
|
772.0
|
|
|
$
|
761.3
|
|
Development and Sales
8
|
$
|
634.3
|
|
|
$
|
640.9
|
|
|
$
|
504.8
|
|
|
$
|
451.5
|
|
|
$
|
420.3
|
|
Agribusiness
|
$
|
162.8
|
|
|
$
|
160.0
|
|
|
$
|
149.9
|
|
|
$
|
157.8
|
|
|
$
|
153.3
|
|
Materials and Construction
|
$
|
385.9
|
|
|
$
|
358.7
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Other
|
$
|
25.3
|
|
|
$
|
10.6
|
|
|
$
|
11.3
|
|
|
$
|
5.3
|
|
|
$
|
6.6
|
|
Total assets
|
$
|
2,329.9
|
|
|
$
|
2,283.6
|
|
|
$
|
1,437.3
|
|
|
$
|
1,386.6
|
|
|
$
|
1,341.5
|
|
|
2014
|
|
2013
|
|
2012
|
|
2011
|
|
2010
|
||||||||||
Capital Expenditures:
|
|
|
|
|
|
|
|
|
|
||||||||||
Real Estate:
|
|
|
|
|
|
|
|
|
|
||||||||||
Leasing
9
|
$
|
51.8
|
|
|
$
|
488.5
|
|
|
$
|
23.1
|
|
|
$
|
43.6
|
|
|
$
|
164.7
|
|
Development and Sales
10
|
—
|
|
|
0.1
|
|
|
—
|
|
|
5.2
|
|
|
0.1
|
|
|||||
Agribusiness
11
|
10.8
|
|
|
11.8
|
|
|
31.7
|
|
|
10.5
|
|
|
6.8
|
|
|||||
Materials and Construction
2
|
10.7
|
|
|
4.8
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Other
|
1.8
|
|
|
0.1
|
|
|
—
|
|
|
—
|
|
|
0.3
|
|
|||||
Total capital expenditures
|
$
|
75.1
|
|
|
$
|
505.3
|
|
|
$
|
54.8
|
|
|
$
|
59.3
|
|
|
$
|
171.9
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Depreciation and Amortization:
|
|
|
|
|
|
|
|
|
|
||||||||||
Real Estate:
|
|
|
|
|
|
|
|
|
|
||||||||||
Leasing
1
|
$
|
26.9
|
|
|
$
|
24.3
|
|
|
$
|
22.0
|
|
|
$
|
21.6
|
|
|
$
|
20.3
|
|
Development and Sales
|
0.2
|
|
|
0.2
|
|
|
0.2
|
|
|
0.2
|
|
|
0.2
|
|
|||||
Agribusiness
|
11.5
|
|
|
11.7
|
|
|
11.6
|
|
|
11.9
|
|
|
12.7
|
|
|||||
Materials and Construction
2
|
15.2
|
|
|
4.4
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Other
|
1.2
|
|
|
1.1
|
|
|
1.3
|
|
|
1.1
|
|
|
2.0
|
|
|||||
Total depreciation and amortization
|
$
|
55.0
|
|
|
$
|
41.7
|
|
|
$
|
35.1
|
|
|
$
|
34.8
|
|
|
$
|
35.2
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Earnings (loss) per share
12
:
|
|
|
|
|
|
|
|
|
|
||||||||||
Basic:
|
|
|
|
|
|
|
|
|
|
||||||||||
Continuing operations attributable to A&B
|
$
|
0.56
|
|
|
$
|
0.27
|
|
|
$
|
0.14
|
|
|
$
|
(0.04
|
)
|
|
$
|
(0.19
|
)
|
Discontinued operations attributable to A&B
|
$
|
0.70
|
|
|
$
|
0.50
|
|
|
$
|
0.30
|
|
|
$
|
0.55
|
|
|
$
|
0.97
|
|
Basic earnings per share attributable to A&B
|
$
|
1.26
|
|
|
$
|
0.77
|
|
|
$
|
0.44
|
|
|
$
|
0.51
|
|
|
$
|
0.78
|
|
Diluted:
|
|
|
|
|
|
|
|
|
|
||||||||||
Continuing operations attributable to A&B
|
$
|
0.55
|
|
|
$
|
0.26
|
|
|
$
|
0.14
|
|
|
$
|
(0.04
|
)
|
|
$
|
(0.19
|
)
|
Discontinued operations attributable to A&B
|
$
|
0.70
|
|
|
$
|
0.50
|
|
|
$
|
0.30
|
|
|
$
|
0.55
|
|
|
$
|
0.97
|
|
Diluted earnings per share attributable to A&B
|
$
|
1.25
|
|
|
$
|
0.76
|
|
|
$
|
0.44
|
|
|
$
|
0.51
|
|
|
$
|
0.78
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Cash dividends declared per common share
|
$
|
0.17
|
|
|
$
|
0.04
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Balance sheet data (in millions):
|
|
|
|
|
|
|
|
|
|
||||||||||
Investment in real estate and joint ventures
|
$
|
1,639.9
|
|
|
$
|
1,606.8
|
|
|
$
|
1,203.4
|
|
|
$
|
1,165.0
|
|
|
$
|
1,123.8
|
|
Total assets
|
$
|
2,329.9
|
|
|
$
|
2,283.6
|
|
|
$
|
1,437.3
|
|
|
$
|
1,386.6
|
|
|
$
|
1,341.5
|
|
Total liabilities
|
$
|
1,115.1
|
|
|
$
|
1,114.9
|
|
|
$
|
526.4
|
|
|
$
|
662.6
|
|
|
$
|
652.9
|
|
Long-term debt – non-current
|
$
|
631.5
|
|
|
$
|
605.5
|
|
|
$
|
220.0
|
|
|
$
|
327.2
|
|
|
$
|
249.6
|
|
Total equity (includes non-controlling interest)
|
$
|
1,214.8
|
|
|
$
|
1,168.7
|
|
|
$
|
910.9
|
|
|
$
|
724.0
|
|
|
$
|
688.6
|
|
1
|
Amounts recast to reflect discontinued operations.
|
2
|
2013 includes the results, capital expenditures, and depreciation and amortization of Grace from the acquisition date of October 1, 2013 through December 31, 2013.
|
3
|
Includes a $4.9 million gain in 2010 related to an agriculture disaster relief payment for drought experienced in prior years.
|
4
|
Represents the sale of a 286-acre agricultural parcel in 2012 classified as “Gain on sale of agricultural parcel” in the Consolidated Statements of Income, but reflected as revenue for segment reporting purposes.
|
5
|
The Real Estate Development and Sales segment includes approximately
$2.0 million
, $4.2 million, $(8.3) million, $(7.9) million, and $2.0 million in equity in earnings (losses) from its various real estate joint ventures for
2014
,
2013
,
2012
,
2011
, and
2010
, respectively. Included in operating profit are non-cash impairment and equity losses of
$0.3 million
related to the sale of Crossroads in 2014, $6.3 million related to the consolidation of The Shops at Kukui'ula in 2013, $9.8 million related to the Bakersfield joint venture and Santa Barbara real estate project in 2012, and $6.4 million related to the Waiawa real estate joint venture in 2011.
|
6
|
Represents a non-cash reduction in the carrying value of a $23.8 million tax equity investment in a 12-megawatt solar farm on Kauai (KRS II) that was made in July 2014. Tax benefits associated with the KRS II investment are accompanied by non-cash reductions of the investment's carrying value. Tax benefits associated with the investment are included in the
Income tax expense (benefit)
line item in the Consolidated Statements of Income.
|
7
|
The Company has revised income taxes for misstatements as further detailed in Note 1 to the consolidated financial statements. The Company has corrected these misstatements and revised balances are reflected in the Selected Financial Data table. The correction of these errors was immaterial to the consolidated financial statements taken as a whole and had no impact on pre-tax income or cash flows from operating, investing or financing activities. For the year ended December 31, 2014, income taxes were overstated due to a
$1.6 million
out-of-period income tax adjustment recorded in the first quarter of 2014 that was related to 2013. For the year ended December 31, 2013, income tax expense was understated and net income attributable to A&B was overstated by
$2.6 million
, which includes the previously mentioned
$1.6 million
out-of-period adjustment. For the year ended December 31, 2012, income tax expense was understated and net income attributable to A&B was overstated by
$1.7 million
. Total equity as of January 1, 2012 was overstated by $1.8 million.
|
8
|
The Real Estate Development and Sales segment includes approximately
$383.8 million
, $335.0 million, $319.7 million, $290.1 million and $274.8 million related to its investment in various real estate joint ventures as of December 31,
2014
,
2013
,
2012
,
2011
and
2010
, respectively.
|
9
|
Represents gross capital additions to the leasing portfolio, including gross tax-deferred property purchases, but excluding the assumption of debt, that are reflected as non-cash transactions in the Consolidated Statements of Cash Flows.
|
10
|
Excludes expenditures for real estate developments held for sale which are classified as Cash Flows from Operating Activities within the Consolidated Statements of Cash Flows and excludes investment in joint ventures classified as Cash Flows from Investing Activities. Operating cash flows for expenditures related to real estate developments were $41.7 million, $150.6 million, $37.2 million, $13.8 million and $21.6 million for
2014
,
2013
,
2012
,
2011
and
2010
, respectively. Investments in real estate joint ventures were $28.7 million, $22.2 million, $17.4 million, $27.9 million and $100.5 million in
2014
,
2013
,
2012
,
2011
and
2010
, respectively.
|
11
|
Includes $21.8 million of capital in 2012 related to the Company’s Port Allen solar project before tax credits.
|
12
|
The computation of basic and diluted earnings per common share for all periods prior to Separation is calculated using 42.4 million, the number of shares of A&B common stock outstanding on July 2, 2012, which was the first day of trading following the June 29, 2012 distribution of A&B common stock to Holdings shareholders, as if those shares were outstanding for those periods. For all periods prior to Separation, there were no dilutive shares because no actual A&B shares or share-based awards were outstanding prior to the Separation.
|
•
|
Basis of Presentation:
This section provides a discussion of the basis on which A&B’s consolidated financial statements were prepared, including A&B’s historical results of operations.
|
•
|
Business Overview:
This section provides a general description of A&B’s business, as well as recent developments that A&B believes are important in understanding its results of operations and financial condition or in understanding anticipated future trends.
|
•
|
Critical Accounting Estimates:
This section identifies and summarizes those accounting policies that significantly impact A&B’s reported results of operations and financial condition and require significant judgment or estimates on the part of management in their application.
|
•
|
Consolidated Results of Operations:
This section provides an analysis of A&B’s results of operations for the three years ended
December 31, 2014
,
2013
and
2012
.
|
•
|
Analysis of Operating Revenue and Profit by Segment:
This section provides an analysis of A&B’s results of operations by business segment.
|
•
|
Liquidity and Capital Resources:
This section provides a discussion of A&B’s financial condition and an analysis of A&B’s cash flows for the years ended
December 31, 2014
,
2013
and
2012
, as well as a discussion of A&B’s ability to fund its future commitments and ongoing operating activities through internal and external sources of capital.
|
•
|
Contractual Obligations, Commitments, Contingencies and Off-Balance-Sheet Arrangements:
This section provides a discussion of A&B’s contractual obligations and other commitments and contingencies that existed at
December 31, 2014
.
|
•
|
Quantitative and Qualitative Disclosures about Market Risk:
This section discusses how A&B monitors and manages exposure to potential gains and losses associated with changes in interest rates.
|
•
|
Outlook:
This section provides a discussion of management’s general outlook about its markets and A&B’s competitive position.
|
•
|
Discount rates
|
•
|
Expected long-term rate of return on pension plan assets
|
•
|
Health care cost trend rates
|
•
|
Salary growth
|
•
|
Inflation
|
•
|
Retirement rates
|
•
|
Mortality rates
|
•
|
Expected contributions
|
(dollars in millions, except per-share amounts)
|
2014
|
|
Chg.
|
|
2013
|
|
Chg.
|
|
2012
|
||||||
Operating Revenue
|
$
|
560.0
|
|
|
53%
|
|
$
|
365.2
|
|
|
40%
|
|
$
|
261.5
|
|
Operating Costs and Expenses
|
495.4
|
|
|
52%
|
|
325.3
|
|
|
37%
|
|
237.5
|
|
|||
Operating Income
|
64.6
|
|
|
62%
|
|
39.9
|
|
|
66%
|
|
24.0
|
|
|||
Other Income and (Expense)
|
(35.8
|
)
|
|
120%
|
|
(16.3
|
)
|
|
(32)%
|
|
(23.9
|
)
|
|||
Income Taxes Expense (Benefit)
|
(1.4
|
)
|
|
NM
|
|
11.1
|
|
|
NM
|
|
(5.9
|
)
|
|||
Income From Continuing Operations
|
30.2
|
|
|
142%
|
|
12.5
|
|
|
108%
|
|
6.0
|
|
|||
Discontinued Operations (net of taxes)
|
34.3
|
|
|
54%
|
|
22.3
|
|
|
74%
|
|
12.8
|
|
|||
Net Income
|
64.5
|
|
|
85%
|
|
34.8
|
|
|
85%
|
|
18.8
|
|
|||
Income attributable to non-controlling interest
|
(3.1
|
)
|
|
6X
|
|
(0.5
|
)
|
|
—%
|
|
—
|
|
|||
Net income attributable to A&B
|
$
|
61.4
|
|
|
79%
|
|
$
|
34.3
|
|
|
82%
|
|
$
|
18.8
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Basic Earnings Per Share
|
$
|
1.26
|
|
|
64%
|
|
$
|
0.77
|
|
|
75%
|
|
$
|
0.44
|
|
Diluted Earnings Per Share
|
$
|
1.25
|
|
|
64%
|
|
$
|
0.76
|
|
|
73%
|
|
$
|
0.44
|
|
(dollars in millions)
|
2014
|
|
2013
|
|
Change
|
|||||
Real Estate Leasing segment revenue
|
$
|
125.6
|
|
|
$
|
110.4
|
|
|
14
|
%
|
Real Estate Leasing operating costs and expenses
|
76.0
|
|
|
64.4
|
|
|
18
|
%
|
||
Selling, general and administrative expenses
|
1.7
|
|
|
2.3
|
|
|
(26
|
)%
|
||
Other segment expense
|
0.4
|
|
|
0.3
|
|
|
33
|
%
|
||
Segment operating profit
|
$
|
47.5
|
|
|
$
|
43.4
|
|
|
9
|
%
|
Operating profit margin
|
37.8
|
%
|
|
39.3
|
%
|
|
|
|||
Net Operating Income*
|
$
|
77.3
|
|
|
$
|
68.8
|
|
|
12
|
%
|
Leasable Area (million sq. ft.) - Improved (at year end)
|
|
|
|
|
|
|||||
Hawaii - improved
|
2.6
|
|
|
2.6
|
|
|
|
|||
Mainland - improved
|
2.5
|
|
|
2.5
|
|
|
|
|||
Total improved
|
5.1
|
|
|
5.1
|
|
|
|
|||
Hawaii urban ground leases (acres at year end)
|
115
|
|
|
116
|
|
|
|
*
|
Refer to page
47
for a discussion of management's use of a non-GAAP financial measure and the required reconciliation of non-GAAP measures to GAAP measures.
|
Dispositions
|
|
Acquisitions
|
||||||||
Date
|
|
Property
|
|
Leasable sq. ft
|
|
Date
|
|
Property
|
|
Leasable sq. ft
|
1-14
|
|
Maui Mall
|
|
185,700
|
|
12-14
|
|
Kaka'ako Commerce Center
|
|
204,400
|
|
|
Total Dispositions
|
|
185,700
|
|
|
|
Total Acquisitions
|
|
204,400
|
(dollars in millions)
|
2013
|
|
2012
|
|
Change
|
|||||
Real Estate Leasing segment revenue
|
$
|
110.4
|
|
|
$
|
100.6
|
|
|
10
|
%
|
Real Estate Leasing operating costs and expenses
|
64.4
|
|
|
57.2
|
|
|
13
|
%
|
||
Selling, general and administrative expenses
|
2.3
|
|
|
1.7
|
|
|
35
|
%
|
||
Other segment expense
|
0.3
|
|
|
0.1
|
|
|
3X
|
|
||
Segment operating profit
|
$
|
43.4
|
|
|
$
|
41.6
|
|
|
4
|
%
|
Operating profit margin
|
39.3
|
%
|
|
41.4
|
%
|
|
|
|||
Net Operating Income*
|
$
|
68.8
|
|
|
$
|
63.1
|
|
|
9
|
%
|
Leasable Area (million sq. ft.) - Improved (at year end)
|
|
|
|
|
|
|
||||
Hawaii - improved
|
2.6
|
|
|
1.4
|
|
|
|
|
||
Mainland - improved
|
2.5
|
|
|
6.5
|
|
|
|
|
||
Total improved
|
5.1
|
|
|
7.9
|
|
|
|
|||
Hawaii urban ground leases (acres at year end)
|
116
|
|
|
65
|
|
|
|
*
|
Refer to page
47
for a discussion of management's use of a non-GAAP financial measure and the required reconciliation of non-GAAP measures to GAAP measures.
|
Dispositions
|
|
Acquisitions
|
||||||||
Date
|
|
Property
|
|
Leasable sq. ft
|
|
Date
|
|
Property
|
|
Leasable sq. ft
|
1-13
|
|
Northpoint Industrial
|
|
119,400
|
|
1-13
|
|
Waianae Mall
|
|
170,300
|
9-13
|
|
Centennial Plaza
|
|
244,000
|
|
5-13
|
|
Napili Plaza
|
|
45,100
|
9-13
|
|
Issaquah Office Center
|
|
146,900
|
|
9-13
|
|
Pearl Highlands Center
|
|
415,400
|
10-13
|
|
Republic Distribution Center
|
|
312,500
|
|
9-13
|
|
The Shops at Kukui’ula
|
|
78,900
|
12-13
|
|
Activity Distribution Center
|
|
252,300
|
|
12-13
|
|
Kailua Portfolio
|
|
386,200
|
12-13
|
|
Heritage Business Park
|
|
1,316,400
|
|
|
|
Kailua Ground Leases*
|
|
51 acres
|
12-13
|
|
Savannah Logistics Park
|
|
1,035,700
|
|
|
|
|
|
|
12-13
|
|
Broadlands Marketplace
|
|
103,900
|
|
|
|
|
|
|
12-13
|
|
Meadows on the Parkway
|
|
216,400
|
|
|
|
|
|
|
12-13
|
|
Rancho Temecula Town Center
|
|
165,500
|
|
|
|
Total Improved Acquisitions
|
|
1,095,900
|
|
|
Total Dispositions
|
|
3,913,000
|
|
|
|
Total Ground Lease Acquisitions
|
|
51 acres
|
|
2014
|
|
2013
|
|
2012
|
||||||
Real Estate Leasing segment operating profit before discontinued operations
|
$
|
47.5
|
|
|
$
|
43.4
|
|
|
$
|
41.6
|
|
Less amounts reported in discontinued operations (pre-tax)
|
(0.3
|
)
|
|
(14.6
|
)
|
|
(17.1
|
)
|
|||
Real Estate Leasing segment operating profit after subtracting discontinued operations
|
47.2
|
|
|
28.8
|
|
|
24.5
|
|
|||
|
|
|
|
|
|
||||||
Depreciation and amortization
|
28.0
|
|
|
24.8
|
|
|
22.2
|
|
|||
Straight-line lease adjustments
|
(2.7
|
)
|
|
(2.9
|
)
|
|
(3.6
|
)
|
|||
General and administrative expenses
|
4.5
|
|
|
3.5
|
|
|
2.9
|
|
|||
Discontinued operations
|
0.3
|
|
|
14.6
|
|
|
17.1
|
|
|||
Real Estate Leasing segment NOI
|
$
|
77.3
|
|
|
$
|
68.8
|
|
|
$
|
63.1
|
|
(dollars in millions)
|
2014
|
|
2013
|
|
2012
|
||||||
Improved property sales revenue
|
$
|
64.1
|
|
|
$
|
331.6
|
|
|
$
|
5.0
|
|
Development sales revenue
|
56.6
|
|
|
41.8
|
|
|
8.7
|
|
|||
Unimproved/other property sales revenue
|
29.3
|
|
|
49.6
|
|
|
18.5
|
|
|||
Total Real Estate Development and Sales segment revenue
|
150.0
|
|
|
423.0
|
|
|
32.2
|
|
|||
Cost of Real Estate Development and Sales
|
(55.2
|
)
|
|
(362.3
|
)
|
|
(11.0
|
)
|
|||
Operating expenses
|
(16.7
|
)
|
|
(16.0
|
)
|
|
(11.4
|
)
|
|||
Write down of The Shops at Kukui'ula joint venture investment
|
—
|
|
|
(6.3
|
)
|
|
—
|
|
|||
Write down of Santa Barbara
|
—
|
|
|
—
|
|
|
(5.1
|
)
|
|||
Impairment of Bakersfield
|
—
|
|
|
—
|
|
|
(4.7
|
)
|
|||
Earnings (loss) from joint ventures
|
2.0
|
|
|
4.3
|
|
|
(4.4
|
)
|
|||
Other income
|
5.6
|
|
|
1.7
|
|
|
—
|
|
|||
Total Real Estate Development and Sales operating profit (loss)
|
$
|
85.7
|
|
|
$
|
44.4
|
|
|
$
|
(4.4
|
)
|
Real Estate Development and Sales operating profit margin
|
57.1
|
%
|
|
10.5
|
%
|
|
NM
|
|
|
2014
|
|
2013
|
|
2012
|
||||||
Proceeds from the sale of income-producing properties (Real Estate Development and Sales Segment)
|
$
|
70.1
|
|
|
$
|
337.6
|
|
|
$
|
8.9
|
|
Real Estate Leasing revenue (Real Estate Leasing Segment)
|
0.3
|
|
|
31.6
|
|
|
36.4
|
|
|||
|
|
|
|
|
|
||||||
Gain on sale of income-producing properties
|
$
|
55.9
|
|
|
$
|
22.1
|
|
|
$
|
4.0
|
|
Real Estate Leasing operating profit
|
0.3
|
|
|
14.6
|
|
|
17.1
|
|
|||
Total operating profit before taxes
|
56.2
|
|
|
36.7
|
|
|
21.1
|
|
|||
Income tax expense
|
21.9
|
|
|
14.4
|
|
|
8.3
|
|
|||
Income from discontinued operations
|
$
|
34.3
|
|
|
$
|
22.3
|
|
|
$
|
12.8
|
|
(dollars in millions)
|
2014
|
2013
|
||||
Revenue
|
$
|
234.3
|
|
$
|
54.9
|
|
Operating profit
|
$
|
25.9
|
|
$
|
2.9
|
|
Operating profit margin
|
11.1
|
%
|
5.3
|
%
|
||
Depreciation and amortization
|
$
|
15.2
|
|
$
|
4.4
|
|
Aggregate produced (tons in thousands)
|
793.7
|
|
193.1
|
|
||
Aggregate used and sold (tons in thousands)
|
711.4
|
|
112.3
|
|
||
Asphaltic concrete placed (tons in thousands)
|
470.5
|
|
114.5
|
|
||
Backlog
|
$
|
219.4
|
|
$
|
218.1
|
|
(dollars in millions)
|
2014
|
|
2013
|
|
Change
|
|||||
Revenue
|
$
|
120.5
|
|
|
$
|
146.1
|
|
|
(18
|
)%
|
Operating profit (loss)
|
$
|
(11.8
|
)
|
|
$
|
10.7
|
|
|
NM
|
|
Operating profit margin
|
NM
|
|
|
7.3
|
%
|
|
|
|||
Tons sugar produced
|
162,100
|
|
|
191,500
|
|
|
(15
|
)%
|
||
Tons sugar sold (raw and specialty sugar)
|
154,300
|
|
|
159,600
|
|
|
(3
|
)%
|
(dollars in millions)
|
2013
|
|
2012
|
|
Change
|
||||
Revenue
|
$
|
146.1
|
|
|
182.3
|
|
|
(20
|
)%
|
Operating profit
|
$
|
10.7
|
|
|
20.8
|
|
|
(49
|
)%
|
Operating profit margin
|
7.3
|
%
|
|
11.4
|
%
|
|
|
||
Tons sugar produced
|
191,500
|
|
|
178,300
|
|
|
7
|
%
|
|
Tons sugar sold (raw and specialty sugar)
|
159,600
|
|
|
198,200
|
|
|
(19
|
)%
|
|
|
December 31,
|
|||||||||
(dollars in millions)
|
|
2014
|
|
2013
|
|
Change
|
|||||
Commercial real estate property improvements
|
|
$
|
32.6
|
|
|
$
|
7.7
|
|
|
4X
|
|
Tenant improvements
|
|
4.3
|
|
|
8.0
|
|
|
(46
|
)%
|
||
Quarrying and paving
|
|
10.7
|
|
|
4.9
|
|
|
118
|
%
|
||
Agribusiness and other
|
|
12.6
|
|
|
11.9
|
|
|
6
|
%
|
||
Total capital expenditures*
|
|
$
|
60.2
|
|
|
$
|
32.5
|
|
|
85
|
%
|
*
|
Capital expenditures for real estate developments to be held and sold as real estate development inventory are classified in the Consolidated Statements of Cash Flows as operating activities.
|
|
|
|
|
Payment due by period
|
|
|
||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Contractual Obligations
|
|
Total
|
|
2015
|
|
2016-2017
|
|
2018-2019
|
|
Thereafter
|
||||||||||
Long-term debt obligations
|
(a)
|
$
|
705.6
|
|
|
$
|
74.5
|
|
|
$
|
290.0
|
|
|
$
|
66.7
|
|
|
$
|
274.4
|
|
Estimated interest on debt
|
(b)
|
155.1
|
|
|
29.6
|
|
|
48.3
|
|
|
30.0
|
|
|
47.2
|
|
|||||
Purchase obligations
|
(c)
|
15.3
|
|
|
15.3
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Post-retirement obligations
|
(d)
|
7.6
|
|
|
0.9
|
|
|
1.7
|
|
|
1.6
|
|
|
3.4
|
|
|||||
Non-qualified benefit obligations
|
(e)
|
6.2
|
|
|
0.7
|
|
|
3.7
|
|
|
1.1
|
|
|
0.7
|
|
|||||
Operating lease obligations
|
(f)
|
45.1
|
|
|
5.6
|
|
|
10.8
|
|
|
8.6
|
|
|
20.1
|
|
|||||
Total
|
|
$
|
934.9
|
|
|
$
|
126.6
|
|
|
$
|
354.5
|
|
|
$
|
108.0
|
|
|
$
|
345.8
|
|
(a)
|
Long-term debt obligations (including current portion, but excluding debt premium or discount) include principal repayments of short-term and long-term debt for the respective period(s) described (see Note 9 to the Consolidated Financial Statements for principal repayments for each of the next five years). Short-term debt includes amounts borrowed under revolving credit facilities and have been reflected as payments due in 2015.
|
(b)
|
Estimated cash paid for interest on debt is determined based on (1) the stated interest rate for fixed debt and (2) the rate in effect on
December 31, 2014
for variable rate debt. Because the Company’s variable rate debt may be rolled over, actual interest may be greater or less than the amounts indicated. Estimated interest on debt also includes swap payments on the Company's interest rate swaps.
|
(c)
|
Purchase obligations include only non-cancelable contractual obligations for the purchases of goods and services. Arrangements are considered purchase obligations if a contract specifies all significant terms, including fixed or minimum quantities to be purchased, a pricing structure and approximate timing of the transaction. Any amounts reflected on the consolidated balance sheet as accounts payable and accrued liabilities are excluded from the table above.
|
(d)
|
Post-retirement obligations include expected payments to medical service providers in connection with providing benefits to the Company’s employees and retirees. The
$3.4 million
noted in the column labeled “Thereafter” comprises estimated benefit payments for 2020 through 2024. Post-retirement obligations are described further in Note 12 to the Consolidated Financial Statements. The obligation for pensions reflected on the Company’s consolidated balance sheet is excluded from the table above because the Company is unable to reliably estimate the timing and amount of contributions.
|
(e)
|
Non-qualified benefit obligations include estimated payments to executives and directors under the Company’s three non-qualified plans. The
$0.7 million
noted in the column labeled “Thereafter” comprises estimated benefit
|
(f)
|
Operating lease obligations include principally land, office space and equipment under non-cancelable, long-term lease arrangements that do not transfer the rights and risks of ownership to A&B. These amounts are further described in Note 10 to the Consolidated Financial Statements.
|
Property Type
|
Vacancy Rate for the Quarter Ended
December 31, 2014
|
Average Asking Rent Per Square Foot Per Month (NNN)
for the Quarter Ended December 31, 2014 |
Retail
|
4.1%
|
$3.64
|
Industrial
|
2.1%
|
$1.10
|
Office
|
13.2%
|
$1.64
|
*
|
Refer to page
47
for a discussion of management's use of a non-GAAP financial measure and the required reconciliation of non-GAAP measures to GAAP measures.
|
|
Expected Fiscal Year of Repayment as of December 31, 2014 (dollars in millions)
|
|||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Fair Value at
|
|||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
December 31,
|
|||||||||||||||
|
2015
|
|
2016
|
|
2017
|
|
2018
|
|
2019
|
|
Thereafter
|
|
Total
|
|
2014
|
|||||||||||||||
Liabilities
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Fixed rate
|
$
|
43.7
|
|
|
$31.8
|
|
$
|
39.0
|
|
|
$
|
32.0
|
|
|
$
|
31.2
|
|
|
$
|
262.2
|
|
|
$439.9
|
|
$
|
464.9
|
|
|||
Average interest rate
|
5.02
|
%
|
|
5.00
|
%
|
|
4.97
|
%
|
|
4.89
|
%
|
|
4.80
|
%
|
|
4.60
|
%
|
|
4.74
|
%
|
|
|
||||||||
Variable rate
|
$
|
30.9
|
|
|
$
|
62.6
|
|
|
$156.6
|
|
$
|
1.7
|
|
|
$
|
1.8
|
|
|
$
|
12.1
|
|
|
$265.7
|
|
$
|
264.7
|
|
|||
Average interest rate*
|
2.43
|
%
|
|
2.41
|
%
|
|
2.16
|
%
|
|
1.83
|
%
|
|
1.89
|
%
|
|
2.03
|
%
|
|
2.11
|
%
|
|
|
*
|
Estimated interest rates on variable debt are determined based on the rate in effect on
December 31, 2014
. Actual interest rates may be greater or less than the amounts indicated when variable rate debt is rolled over.
|
|
|
|
Page
|
|
|
|
|||
Report of Independent Registered Public Accounting Firm
|
||||
Consolidated Statements of Income
|
||||
Consolidated Statements of Comprehensive Income
|
||||
Consolidated Balance Sheets
|
||||
Consolidated Statements of Cash Flows
|
||||
Consolidated Statements of Equity
|
||||
Notes to Consolidated Financial Statements
|
||||
|
1.
|
Background and Basis of Presentation
|
||
|
2.
|
Significant Accounting Policies
|
||
|
3.
|
Acquisitions
|
||
|
4.
|
Related Party Transactions
|
||
|
5.
|
Discontinued Operations
|
||
|
6.
|
Investments in Affiliates
|
||
|
7.
|
Uncompleted Contracts
|
||
|
8.
|
Property
|
||
|
9.
|
Notes Payable and Long-Term Debt
|
||
|
10.
|
Leases – The Company as Lessee
|
||
|
11
|
Leases – The Company as Lessor
|
||
|
12.
|
Employee Benefit Plans
|
||
|
13.
|
Income Taxes
|
||
|
14.
|
Share-Based Awards
|
||
|
15.
|
Commitments and Contingencies
|
||
|
16.
|
Derivative Instruments
|
||
|
17.
|
Segment Results
|
|
Year Ended December 31,
|
||||||||||
|
2014
|
|
2013
|
|
2012
|
||||||
Operating Revenue:
|
|
|
|
|
|
||||||
Real estate leasing
|
$
|
125.2
|
|
|
$
|
78.8
|
|
|
$
|
64.2
|
|
Real estate development and sales
|
80.0
|
|
|
85.4
|
|
|
15.0
|
|
|||
Materials and construction
|
234.3
|
|
|
54.9
|
|
|
—
|
|
|||
Agribusiness
|
120.5
|
|
|
146.1
|
|
|
182.3
|
|
|||
Total operating revenue
|
560.0
|
|
|
365.2
|
|
|
261.5
|
|
|||
Operating Costs and Expenses:
|
|
|
|
|
|
||||||
Cost of real estate leasing
|
78.3
|
|
|
48.4
|
|
|
38.4
|
|
|||
Cost of real estate sales
|
41.0
|
|
|
46.7
|
|
|
5.2
|
|
|||
Cost of materials and construction contracts
|
191.3
|
|
|
47.6
|
|
|
—
|
|
|||
Cost of agribusiness goods and services
|
131.9
|
|
|
136.8
|
|
|
161.0
|
|
|||
Selling, general and administrative
|
52.9
|
|
|
41.2
|
|
|
37.7
|
|
|||
Gain on sale of agricultural parcel
|
—
|
|
|
—
|
|
|
(7.3
|
)
|
|||
Gain on charitable donation of appreciated land
|
—
|
|
|
—
|
|
|
(9.4
|
)
|
|||
Impairment of real estate assets (Santa Barbara)
|
—
|
|
|
—
|
|
|
5.1
|
|
|||
Separation/acquisition costs
|
—
|
|
|
4.6
|
|
|
6.8
|
|
|||
Total operating costs and expenses
|
495.4
|
|
|
325.3
|
|
|
237.5
|
|
|||
Operating Income
|
64.6
|
|
|
39.9
|
|
|
24.0
|
|
|||
Other Income and (Expense):
|
|
|
|
|
|
||||||
Income (loss) related to joint ventures
|
2.1
|
|
|
4.3
|
|
|
(4.4
|
)
|
|||
Gain on insurance proceeds
|
—
|
|
|
2.4
|
|
|
—
|
|
|||
Impairment and equity losses related to joint ventures
|
(0.3
|
)
|
|
(6.6
|
)
|
|
(4.7
|
)
|
|||
Reduction in KRS II carrying value, net (Note 6, 13)
|
(14.7
|
)
|
|
—
|
|
|
—
|
|
|||
Interest income and other
|
6.1
|
|
|
2.7
|
|
|
0.1
|
|
|||
Interest expense
|
(29.0
|
)
|
|
(19.1
|
)
|
|
(14.9
|
)
|
|||
Income From Continuing Operations Before Income Taxes
|
28.8
|
|
|
23.6
|
|
|
0.1
|
|
|||
Income tax expense (benefit)
|
(1.4
|
)
|
|
11.1
|
|
|
(5.9
|
)
|
|||
Income From Continuing Operations
|
30.2
|
|
|
12.5
|
|
|
6.0
|
|
|||
Income from discontinued operations, net of income taxes (Note 5)
|
34.3
|
|
|
22.3
|
|
|
12.8
|
|
|||
Net Income
|
64.5
|
|
|
34.8
|
|
|
18.8
|
|
|||
Income attributable to non-controlling interest
|
(3.1
|
)
|
|
(0.5
|
)
|
|
—
|
|
|||
Net Income Attributable to A&B
|
$
|
61.4
|
|
|
$
|
34.3
|
|
|
$
|
18.8
|
|
|
|
|
|
|
|
||||||
Basic Earnings per Share of Common Stock:
|
|
|
|
|
|
||||||
Continuing operations attributable to A&B shareholders
|
$
|
0.56
|
|
|
$
|
0.27
|
|
|
$
|
0.14
|
|
Discontinued operations attributable to A&B shareholders
|
0.70
|
|
|
0.50
|
|
|
0.30
|
|
|||
Net income attributable to A&B shareholders
|
$
|
1.26
|
|
|
$
|
0.77
|
|
|
$
|
0.44
|
|
Diluted Earnings per Share of Common Stock:
|
|
|
|
|
|
||||||
Continuing operations attributable to A&B shareholders
|
$
|
0.55
|
|
|
$
|
0.26
|
|
|
$
|
0.14
|
|
Discontinued operations attributable to A&B shareholders
|
0.70
|
|
|
0.50
|
|
|
0.30
|
|
|||
Net income attributable to A&B shareholders
|
$
|
1.25
|
|
|
$
|
0.76
|
|
|
$
|
0.44
|
|
|
|
|
|
|
|
||||||
Weighted Average Number of Shares Outstanding:
|
|
|
|
|
|
||||||
Basic
|
48.7
|
|
|
44.4
|
|
|
42.6
|
|
|||
Diluted
|
49.3
|
|
|
45.1
|
|
|
42.9
|
|
|||
|
|
|
|
|
|
||||||
Amounts Attributable to A&B Shareholders:
|
|
|
|
|
|
||||||
Income from continuing operations, net of tax
|
$
|
27.1
|
|
|
$
|
12.0
|
|
|
$
|
6.0
|
|
Discontinued operations, net of tax
|
34.3
|
|
|
22.3
|
|
|
12.8
|
|
|||
Net income
|
$
|
61.4
|
|
|
$
|
34.3
|
|
|
$
|
18.8
|
|
|
Year Ended December 31,
|
||||||||||
|
2014
|
|
2013
|
|
2012
|
||||||
Net Income
|
$
|
64.5
|
|
|
$
|
34.8
|
|
|
$
|
18.8
|
|
Other Comprehensive Income (Loss), Net of Tax:
|
|
|
|
|
|
||||||
Defined benefit pension plans:
|
|
|
|
|
|
||||||
Net gain (loss) / prior service credit (cost)
|
(26.7
|
)
|
|
22.4
|
|
|
(6.0
|
)
|
|||
Amortization of net loss included in net periodic pension cost
|
4.5
|
|
|
7.7
|
|
|
8.0
|
|
|||
Amortization of prior service credit included in net periodic pension cost
|
(1.3
|
)
|
|
(1.3
|
)
|
|
(1.3
|
)
|
|||
Income taxes related to other comprehensive income
|
9.2
|
|
|
(11.7
|
)
|
|
(0.3
|
)
|
|||
Other Comprehensive Income (Loss)
|
(14.3
|
)
|
|
17.1
|
|
|
0.4
|
|
|||
Comprehensive Income
|
50.2
|
|
|
51.9
|
|
|
19.2
|
|
|||
Comprehensive income attributable to non-controlling interest
|
(3.1
|
)
|
|
(0.5
|
)
|
|
—
|
|
|||
Comprehensive income attributable to A&B
|
$
|
47.1
|
|
|
$
|
51.4
|
|
|
$
|
19.2
|
|
|
December 31,
|
||||||
|
2014
|
|
2013
|
||||
ASSETS
|
|
|
|
||||
Current Assets
|
|
|
|
||||
Cash and cash equivalents
|
$
|
2.8
|
|
|
$
|
3.3
|
|
Accounts receivable, less allowances of $1.7 for 2014 and $1.3 for 2013
|
33.1
|
|
|
36.5
|
|
||
Contracts retention
|
9.1
|
|
|
9.3
|
|
||
Costs and estimated earnings in excess of billings on uncompleted contracts
|
15.9
|
|
|
10.5
|
|
||
Inventories
|
81.9
|
|
|
68.1
|
|
||
Real estate held for sale
|
2.5
|
|
|
15.9
|
|
||
Deferred income taxes
|
8.3
|
|
|
7.8
|
|
||
Income tax receivable
|
6.7
|
|
|
1.4
|
|
||
Prepaid expenses and other assets
|
15.6
|
|
|
17.0
|
|
||
Total current assets
|
175.9
|
|
|
169.8
|
|
||
Investments in Affiliates
|
418.6
|
|
|
341.4
|
|
||
Real Estate Developments
|
224.0
|
|
|
249.1
|
|
||
Property - Net
|
1,301.7
|
|
|
1,273.7
|
|
||
Intangible Assets - Net
|
63.9
|
|
|
74.1
|
|
||
Goodwill
|
102.3
|
|
|
99.6
|
|
||
Other Assets
|
43.5
|
|
|
75.9
|
|
||
Total assets
|
$
|
2,329.9
|
|
|
$
|
2,283.6
|
|
LIABILITIES AND EQUITY
|
|
|
|
||||
Current Liabilities
|
|
|
|
||||
Notes payable and current portion of long-term debt
|
$
|
74.5
|
|
|
$
|
105.2
|
|
Accounts payable
|
37.6
|
|
|
32.6
|
|
||
Billings in excess of costs and estimated earnings on uncompleted contracts
|
3.6
|
|
|
4.4
|
|
||
Accrued interest
|
5.7
|
|
|
5.9
|
|
||
Deferred revenue
|
16.5
|
|
|
17.8
|
|
||
Indemnity holdback related to Grace acquisition
|
9.3
|
|
|
18.8
|
|
||
Accrued and other liabilities
|
35.8
|
|
|
33.5
|
|
||
Total current liabilities
|
183.0
|
|
|
218.2
|
|
||
Long-term Liabilities
|
|
|
|
||||
Long-term debt
|
631.5
|
|
|
605.5
|
|
||
Deferred income taxes
|
194.0
|
|
|
193.2
|
|
||
Accrued pension and post-retirement benefits
|
54.8
|
|
|
37.3
|
|
||
Other non-current liabilities
|
51.8
|
|
|
60.7
|
|
||
Total long-term liabilities
|
932.1
|
|
|
896.7
|
|
||
Commitments and Contingencies (Note 15)
|
|
|
|
|
|
||
Equity
|
|
|
|
|
|
||
Common stock - no par value; authorized, 150 million shares; outstanding, 48.8 million and 48.6 million shares at December 31, 2014 and 2013, respectively
|
1,147.3
|
|
|
1,140.5
|
|
||
Accumulated other comprehensive loss
|
(44.4
|
)
|
|
(30.1
|
)
|
||
Retained earnings
|
101.0
|
|
|
49.4
|
|
||
Total A&B shareholders' equity
|
1,203.9
|
|
|
1,159.8
|
|
||
Non-controlling interest
|
10.9
|
|
|
8.9
|
|
||
Total equity
|
1,214.8
|
|
|
1,168.7
|
|
||
Total liabilities and equity
|
$
|
2,329.9
|
|
|
$
|
2,283.6
|
|
|
Year Ended December 31,
|
||||||||||
|
2014
|
|
2013
|
|
2012
|
||||||
Cash Flows from Operating Activities:
|
|
|
|
|
|
|
|
|
|||
Net income
|
$
|
64.5
|
|
|
$
|
34.8
|
|
|
$
|
18.8
|
|
Adjustments to reconcile net income to net cash provided by (used in) operations:
|
|
|
|
|
|
|
|
|
|||
Depreciation and amortization
|
55.0
|
|
|
41.7
|
|
|
35.1
|
|
|||
Deferred income taxes
|
8.8
|
|
|
(0.6
|
)
|
|
(4.6
|
)
|
|||
Gains on asset transactions, net of impairment losses
|
(82.2
|
)
|
|
(52.8
|
)
|
|
(14.8
|
)
|
|||
Share-based expense
|
4.9
|
|
|
4.2
|
|
|
5.4
|
|
|||
Equity in (income) loss of affiliates, net of distributions
|
0.1
|
|
|
(2.9
|
)
|
|
8.4
|
|
|||
Changes in operating assets and liabilities:
|
|
|
|
|
|
|
|
|
|||
Trade, contracts retention, and other receivables
|
1.6
|
|
|
3.3
|
|
|
0.1
|
|
|||
Costs and estimated earnings in excess of billings on uncompleted contracts - net
|
(6.4
|
)
|
|
(1.9
|
)
|
|
—
|
|
|||
Inventories
|
(13.5
|
)
|
|
(2.7
|
)
|
|
12.8
|
|
|||
Prepaid expenses and other assets
|
5.0
|
|
|
(0.4
|
)
|
|
(10.0
|
)
|
|||
Accrued pension and post-retirement benefits
|
(2.3
|
)
|
|
5.2
|
|
|
4.2
|
|
|||
Accounts payable, contracts retention, and income taxes
|
(2.3
|
)
|
|
(4.9
|
)
|
|
(1.5
|
)
|
|||
Accrued and other liabilities
|
(6.0
|
)
|
|
7.6
|
|
|
(14.2
|
)
|
|||
Real estate inventory sales (real estate developments held for sale)
|
53.6
|
|
|
81.7
|
|
|
8.4
|
|
|||
Expenditures for real estate inventory (real estate developments held for sale)
|
(41.7
|
)
|
|
(150.6
|
)
|
|
(37.2
|
)
|
|||
Net cash provided by (used in) operations
|
39.1
|
|
|
(38.3
|
)
|
|
10.9
|
|
|||
Cash Flows from Investing Activities:
|
|
|
|
|
|
|
|
|
|||
Capital expenditures for property, plant and equipment
|
(60.2
|
)
|
|
(32.5
|
)
|
|
(45.4
|
)
|
|||
Capital expenditures related to 1031 commercial property transactions
|
(14.9
|
)
|
|
(472.8
|
)
|
|
(9.4
|
)
|
|||
Proceeds from investment tax credits and grants related to Port Allen Solar Farm
|
4.5
|
|
|
2.4
|
|
|
7.5
|
|
|||
Proceeds from disposal of property and other assets
|
9.5
|
|
|
1.2
|
|
|
2.2
|
|
|||
Proceeds from disposals related to 1031 commercial property transactions
|
85.6
|
|
|
330.8
|
|
|
18.8
|
|
|||
Payments for purchases of investments in affiliates and preferred investment
|
(75.1
|
)
|
|
(43.4
|
)
|
|
(17.5
|
)
|
|||
Proceeds from investments in affiliates and preferred investment
|
36.2
|
|
|
5.1
|
|
|
2.9
|
|
|||
Change in restricted cash associated with 1031 transactions
|
0.6
|
|
|
3.2
|
|
|
(9.2
|
)
|
|||
Acquisition of business, net of cash (including Grace indemnity holdback)
|
(14.2
|
)
|
|
(5.7
|
)
|
|
—
|
|
|||
Net cash used in investing activities
|
(28.0
|
)
|
|
(211.7
|
)
|
|
(50.1
|
)
|
|||
Cash Flows from Financing Activities:
|
|
|
|
|
|
|
|
|
|||
Proceeds from issuance of long-term debt
|
283.0
|
|
|
585.0
|
|
|
134.0
|
|
|||
Payments of long-term debt and deferred financing costs
|
(224.2
|
)
|
|
(380.3
|
)
|
|
(257.2
|
)
|
|||
Proceeds from (payments on) line-of-credit agreement, net
|
(62.3
|
)
|
|
51.6
|
|
|
(6.0
|
)
|
|||
Distributions to Alexander & Baldwin Holdings, Inc.(a)
|
—
|
|
|
—
|
|
|
(26.7
|
)
|
|||
Contributions from Alexander & Baldwin Holdings, Inc.(a)
|
—
|
|
|
—
|
|
|
172.7
|
|
|||
Distribution to non-controlling interests
|
(0.2
|
)
|
|
(1.1
|
)
|
|
—
|
|
|||
Dividends paid
|
(8.3
|
)
|
|
(2.0
|
)
|
|
—
|
|
|||
Proceeds from issuance (repurchase) of capital stock and other, net
|
0.4
|
|
|
(1.0
|
)
|
|
11.8
|
|
|||
Net cash provided by (used in) financing activities
|
(11.6
|
)
|
|
252.2
|
|
|
28.6
|
|
|||
Cash and Cash Equivalents:
|
|
|
|
|
|
|
|
|
|||
Net increase (decrease) for the year
|
(0.5
|
)
|
|
2.2
|
|
|
(10.6
|
)
|
|||
Balance, beginning of year
|
3.3
|
|
|
1.1
|
|
|
11.7
|
|
|||
Balance, end of year
|
$
|
2.8
|
|
|
$
|
3.3
|
|
|
$
|
1.1
|
|
Other Cash Flow Information:
|
|
|
|
|
|
|
|
|
|||
Interest paid, net of amounts capitalized
|
$
|
(29.8
|
)
|
|
$
|
(19.1
|
)
|
|
$
|
(14.9
|
)
|
Income taxes paid
|
$
|
(14.2
|
)
|
|
$
|
(12.0
|
)
|
|
$
|
(2.0
|
)
|
Non-cash Activities:
|
|
|
|
|
|
|
|
|
|||
Contribution of land and development assets to The Collection joint venture
|
$
|
33.8
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Real estate exchanged for note receivable
|
$
|
3.6
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Acquisition of Grace (issuance of equity and indemnity holdback)
|
$
|
—
|
|
|
$
|
219.8
|
|
|
$
|
—
|
|
Mortgage debt assumed at fair value in real estate acquisitions
|
$
|
—
|
|
|
$
|
142.2
|
|
|
$
|
—
|
|
Property (net) acquired in connection with the consolidation of The Shops at Kukui'ula
|
$
|
—
|
|
|
$
|
39.0
|
|
|
$
|
—
|
|
Capital expenditures included in accounts payable and accrued expenses
|
$
|
5.7
|
|
|
$
|
6.6
|
|
|
$
|
12.2
|
|
Contribution of land and development assets to Waihonua joint venture
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
24.2
|
|
Conversion of net investment of A&B Holdings into common stock
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
926.3
|
|
(a)
|
Refer to Note 4, “Related Party Transactions.”
|
|
|
|
|
|
|
|
Accumulated
|
|
|
|
|
|
|||||||||||||||
|
|
Common
|
|
|
Other
|
|
|
|
|
|
|||||||||||||||||
|
|
Stock
|
|
Net
|
Compre-
|
|
|
Non-
|
|
|
|||||||||||||||||
|
|
|
|
Stated
|
|
Invest-
|
hensive
|
Retained
|
|
Controlling
|
|
|
|||||||||||||||
|
|
Shares
|
|
Value
|
|
ment
|
|
Loss
|
|
Earnings
|
|
interest
|
|
Total
|
|||||||||||||
Balance, January 1, 2012
|
|
—
|
|
|
$
|
—
|
|
|
$
|
771.6
|
|
|
$
|
(47.6
|
)
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
724.0
|
|
Net income
|
|
|
|
|
|
(1.6
|
)
|
|
|
|
20.4
|
|
|
|
|
18.8
|
|
||||||||||
Other comprehensive income, net of tax
|
|
|
|
|
|
|
|
0.4
|
|
|
|
|
|
|
0.4
|
|
|||||||||||
Contribution from Alexander & Baldwin Holdings, Inc., net
|
|
|
|
|
|
154.5
|
|
|
|
|
|
|
|
|
154.5
|
|
|||||||||||
Conversion of net investment of Alexander & Baldwin Holdings, Inc. into common stock
|
|
42.4
|
|
|
924.5
|
|
|
(924.5
|
)
|
|
|
|
|
|
|
|
—
|
|
|||||||||
Share-based compensation
|
|
|
|
2.1
|
|
|
|
|
|
|
|
|
|
|
2.1
|
|
|||||||||||
Shares issued, net
|
|
0.5
|
|
|
10.2
|
|
|
|
|
|
|
(0.3
|
)
|
|
|
|
9.9
|
|
|||||||||
Excess tax benefit from share-based awards
|
|
|
|
1.2
|
|
|
|
|
|
|
|
|
|
|
1.2
|
|
|||||||||||
Balance, December 31, 2012
|
|
42.9
|
|
|
938.0
|
|
|
—
|
|
|
(47.2
|
)
|
|
20.1
|
|
|
—
|
|
|
910.9
|
|
||||||
Net income
|
|
|
|
|
|
|
|
|
|
34.3
|
|
|
0.5
|
|
|
34.8
|
|
||||||||||
Other comprehensive income, net of tax
|
|
|
|
|
|
|
|
17.1
|
|
|
|
|
|
|
17.1
|
|
|||||||||||
Dividends paid on common stock ($0.04 per share)
|
|
|
|
|
|
|
|
|
|
(2.0
|
)
|
|
|
|
(2.0
|
)
|
|||||||||||
Distributions to non-controlling interest
|
|
|
|
|
|
|
|
|
|
|
|
(0.7
|
)
|
|
(0.7
|
)
|
|||||||||||
Share-based compensation
|
|
|
|
4.2
|
|
|
|
|
|
|
|
|
|
|
4.2
|
|
|||||||||||
Grace acquisition
|
|
5.4
|
|
|
196.3
|
|
|
|
|
|
|
|
|
9.1
|
|
|
205.4
|
|
|||||||||
Shares issued or repurchased, net
|
|
0.3
|
|
|
0.4
|
|
|
|
|
|
|
(3.0
|
)
|
|
|
|
(2.6
|
)
|
|||||||||
Excess tax benefit from share-based awards
|
|
|
|
1.6
|
|
|
|
|
|
|
|
|
|
|
1.6
|
|
|||||||||||
Balance, December 31, 2013
|
|
48.6
|
|
|
1,140.5
|
|
|
—
|
|
|
(30.1
|
)
|
|
49.4
|
|
|
8.9
|
|
|
1,168.7
|
|
||||||
Net income
|
|
|
|
|
|
|
|
|
|
61.4
|
|
|
3.1
|
|
|
64.5
|
|
||||||||||
Other comprehensive income, net of tax
|
|
|
|
|
|
|
|
(14.3
|
)
|
|
|
|
|
|
(14.3
|
)
|
|||||||||||
Dividends paid on common stock ($0.17 per share)
|
|
|
|
|
|
|
|
|
|
(8.3
|
)
|
|
|
|
(8.3
|
)
|
|||||||||||
Distributions to non-controlling interest
|
|
|
|
|
|
|
|
|
|
|
|
(1.1
|
)
|
|
(1.1
|
)
|
|||||||||||
Share-based compensation
|
|
|
|
4.9
|
|
|
|
|
|
|
|
|
|
|
4.9
|
|
|||||||||||
Shares issued or repurchased, net
|
|
0.2
|
|
|
0.6
|
|
|
|
|
|
|
(1.5
|
)
|
|
|
|
(0.9
|
)
|
|||||||||
Excess tax benefit from share-based awards
|
|
|
|
1.3
|
|
|
|
|
|
|
|
|
|
|
1.3
|
|
|||||||||||
Balance, December 31, 2014
|
|
48.8
|
|
|
$
|
1,147.3
|
|
|
$
|
—
|
|
|
$
|
(44.4
|
)
|
|
$
|
101.0
|
|
|
$
|
10.9
|
|
|
$
|
1,214.8
|
|
2.
|
SIGNIFICANT ACCOUNTING POLICIES
|
|
Balance at
Beginning of year |
|
Provision for bad debt
|
|
Write-offs
and Other |
|
Balance at
End of Year |
2014
|
$1.3
|
|
$0.8
|
|
$(0.4)
|
|
$1.7
|
2013
|
$1.6
|
|
$0.1
|
|
$(0.4)
|
|
$1.3
|
2012
|
$1.7
|
|
$0.2
|
|
$(0.3)
|
|
$1.6
|
|
2014
|
|
2013
|
||||
Sugar inventories
|
$
|
23.3
|
|
|
$
|
16.8
|
|
Asphalt
|
21.3
|
|
|
17.9
|
|
||
Processed rock, portland cement, and sand
|
15.7
|
|
|
12.9
|
|
||
Work in progress
|
2.8
|
|
|
2.7
|
|
||
Retail merchandise
|
1.5
|
|
|
1.8
|
|
||
Parts, materials and supplies inventories
|
17.3
|
|
|
16.0
|
|
||
Total
|
$
|
81.9
|
|
|
$
|
68.1
|
|
Classification
|
Range of Life (in years)
|
Buildings
|
10 to 40
|
Water, power and sewer systems
|
5 to 50
|
Rock crushing and asphalt plants
|
25 to 35
|
Machinery and equipment
|
2 to 35
|
Other property improvements
|
3 to 35
|
|
2014
|
|
2013
|
|||||||||
|
Amount
|
|
Weighted Average Life (Years)
|
|
Amount
|
|
Weighted Average Life (Years)
|
|||||
Amortized intangible assets:
|
|
|
|
|
|
|
|
|||||
In-place/favorable leases
|
$
|
2.1
|
|
|
1.8
|
|
|
$
|
51.3
|
|
|
7.2
|
Permitted quarry rights
|
—
|
|
|
—
|
|
|
18.0
|
|
|
19.0
|
||
Contract backlog
|
—
|
|
|
—
|
|
|
2.6
|
|
|
2.2
|
||
Trade name/customer relationships
|
—
|
|
|
—
|
|
|
3.1
|
|
|
8.0
|
||
Total
|
$
|
2.1
|
|
|
1.8
|
|
|
$
|
75.0
|
|
|
9.9
|
|
2014
|
|
2013
|
||||||||||||
|
Cost
|
|
Accumulated Amortization
|
|
Cost
|
|
Accumulated Amortization
|
||||||||
Amortized intangible assets:
|
|
|
|
|
|
|
|
||||||||
In-place leases
|
$
|
61.6
|
|
|
$
|
(25.8
|
)
|
|
$
|
59.6
|
|
|
$
|
(18.6
|
)
|
Favorable leases
|
16.6
|
|
|
(7.8
|
)
|
|
16.6
|
|
|
(6.1
|
)
|
||||
Permitted quarry rights
|
18.0
|
|
|
(0.7
|
)
|
|
18.0
|
|
|
(0.1
|
)
|
||||
Contract backlog
|
2.6
|
|
|
(2.5
|
)
|
|
2.6
|
|
|
(1.0
|
)
|
||||
Trade name/customer relationships
|
2.2
|
|
|
(0.3
|
)
|
|
3.1
|
|
|
—
|
|
||||
Total assets
|
$
|
101.0
|
|
|
$
|
(37.1
|
)
|
|
$
|
99.9
|
|
|
$
|
(25.8
|
)
|
|
Materials & Construction
|
|
Real Estate Leasing
|
|
Total
|
||||||
Balance, January 1, 2013
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Goodwill acquired during the year
|
90.3
|
|
|
9.3
|
|
|
99.6
|
|
|||
Balance, December 31, 2013
|
90.3
|
|
|
9.3
|
|
|
99.6
|
|
|||
Goodwill increase during the year
|
3.3
|
|
|
—
|
|
|
3.3
|
|
|||
Goodwill allocated to sale of Maui Mall
|
—
|
|
|
(0.6
|
)
|
|
(0.6
|
)
|
|||
Balance, December 31, 2014
|
$
|
93.6
|
|
|
$
|
8.7
|
|
|
$
|
102.3
|
|
|
2014
|
|
2013
|
|
2012
|
||||||
Income from continuing operations
|
$
|
30.2
|
|
|
$
|
12.5
|
|
|
$
|
6.0
|
|
Non-controlling interest
|
(3.1
|
)
|
|
(0.5
|
)
|
|
—
|
|
|||
Income from continuing operations attributable to A&B
|
$
|
27.1
|
|
|
$
|
12.0
|
|
|
$
|
6.0
|
|
|
December 31,
|
||||||
|
2014
|
|
2013
|
||||
Beginning balance
|
$
|
(30.1
|
)
|
|
$
|
(47.2
|
)
|
Amounts reclassified from accumulated other comprehensive income, net of tax
|
(14.3
|
)
|
|
17.1
|
|
||
Ending balance
|
$
|
(44.4
|
)
|
|
$
|
(30.1
|
)
|
|
|
|
|
|
|
|
||||||
Details about Accumulated Other Comprehensive Income Components
|
2014
|
|
2013
|
|
2012
|
|
||||||
Actuarial gain (loss)*
|
$
|
(26.7
|
)
|
|
$
|
22.4
|
|
|
$
|
(6.0
|
)
|
|
Amortization of defined benefit pension items reclassified to net periodic pension cost:
|
|
|
|
|
|
|
||||||
Net loss*
|
4.5
|
|
|
7.7
|
|
|
8.0
|
|
|
|||
Prior service credit*
|
(1.3
|
)
|
|
(1.3
|
)
|
|
(1.3
|
)
|
|
|||
Total before income tax
|
(23.5
|
)
|
|
28.8
|
|
|
0.7
|
|
|
|||
Income taxes
|
9.2
|
|
|
(11.7
|
)
|
|
(0.3
|
)
|
|
|||
Other comprehensive income (loss) net of tax
|
$
|
(14.3
|
)
|
|
$
|
17.1
|
|
|
$
|
0.4
|
|
|
*
|
These accumulated other comprehensive income components are included in the computation of net periodic pension cost (see Note 12 for additional details).
|
|
Preliminary Valuation October 1, 2013
|
Modifications
|
Final Valuation
|
||||||
Cash consideration
|
$
|
35.3
|
|
$
|
—
|
|
$
|
35.3
|
|
Common stock issued as consideration
|
196.3
|
|
—
|
|
196.3
|
|
|||
Fair value of consideration transferred
|
231.6
|
|
—
|
|
231.6
|
|
|||
|
|
|
|
||||||
Fair value of assets acquired and liabilities assumed
|
|
|
|||||||
Assets acquired:
|
|
|
|
||||||
Cash and cash equivalents
|
5.7
|
|
—
|
|
5.7
|
|
|||
Accounts receivable
|
37.1
|
|
—
|
|
37.1
|
|
|||
Contracts retention
|
9.6
|
|
—
|
|
9.6
|
|
|||
Costs and estimated earnings in excess of billings on uncompleted contracts
|
11.7
|
|
—
|
|
11.7
|
|
|||
Inventories
|
42.0
|
|
—
|
|
42.0
|
|
|||
Property, plant and equipment
|
148.6
|
|
—
|
|
148.6
|
|
|||
Mineral rights
|
18.0
|
|
—
|
|
18.0
|
|
|||
Intangible assets
|
5.8
|
|
(1.0
|
)
|
4.8
|
|
|||
All other, net
|
10.4
|
|
0.9
|
|
11.3
|
|
|||
Total assets acquired
|
288.9
|
|
(0.1
|
)
|
288.8
|
|
|||
|
|
|
|
||||||
Liabilities assumed:
|
|
|
|
||||||
Accounts payable and accrued liabilities
|
26.3
|
|
—
|
|
26.3
|
|
|||
Billings in excess of cost and estimated earnings on uncompleted contracts
|
7.5
|
|
0.6
|
|
8.1
|
|
|||
Deferred tax liability, long-term
|
27.1
|
|
(0.6
|
)
|
26.5
|
|
|||
Long-term debt, including current portion
|
72.7
|
|
(0.2
|
)
|
72.5
|
|
|||
All other, net
|
4.9
|
|
3.4
|
|
8.3
|
|
|||
Total liabilities assumed
|
138.5
|
|
3.2
|
|
141.7
|
|
|||
|
|
|
|
||||||
Non-controlling interest
|
9.1
|
|
—
|
|
9.1
|
|
|||
Excess of purchase price over net assets acquired
|
$
|
90.3
|
|
$
|
3.3
|
|
$
|
93.6
|
|
|
Year Ended December 31,
|
||||||
|
2013
|
|
2012
|
||||
Operating revenue
|
$
|
539.1
|
|
|
$
|
454.1
|
|
Income from continuing operations, after tax
|
$
|
31.7
|
|
|
$
|
14.8
|
|
|
Year Ended December 31,
|
||||||
|
2013
|
|
2012
|
||||
Operating revenue
|
$
|
391.0
|
|
|
$
|
285.5
|
|
Income from continuing operations, after tax
|
$
|
23.3
|
|
|
$
|
14.2
|
|
4.
|
RELATED PARTY TRANSACTIONS
|
|
|
2014
|
|
2013
|
|
2012
|
||||||
Vessel management services expenses
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
(2.0
|
)
|
Lease income from affiliate
|
|
—
|
|
|
—
|
|
|
2.1
|
|
|||
Equipment and repair services income and other
|
|
—
|
|
|
—
|
|
|
1.4
|
|
|||
Related party revenue, net
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
1.5
|
|
5.
|
DISCONTINUED OPERATIONS
|
|
2014
|
|
2013
|
|
2012
|
||||||
Proceeds from the sale of income-producing properties
|
$
|
70.1
|
|
|
$
|
337.6
|
|
|
$
|
8.9
|
|
Real Estate Leasing revenue
|
$
|
0.3
|
|
|
$
|
31.6
|
|
|
$
|
36.4
|
|
|
|
|
|
|
|
||||||
Gain on sale of income-producing properties, net
|
$
|
55.9
|
|
|
$
|
22.1
|
|
|
$
|
4.0
|
|
Real Estate Leasing operating profit
|
0.3
|
|
|
14.6
|
|
|
17.1
|
|
|||
Total operating profit before taxes
|
56.2
|
|
|
36.7
|
|
|
21.1
|
|
|||
Income tax expense
|
21.9
|
|
|
14.4
|
|
|
8.3
|
|
|||
Income from discontinued operations
|
$
|
34.3
|
|
|
$
|
22.3
|
|
|
$
|
12.8
|
|
Basic Earnings Per Share
|
$
|
0.70
|
|
|
$
|
0.50
|
|
|
$
|
0.30
|
|
Diluted Earnings Per Share
|
$
|
0.70
|
|
|
$
|
0.50
|
|
|
$
|
0.30
|
|
6.
|
INVESTMENTS IN AFFILIATES
|
|
2014
|
|
2013
|
||||
Current assets
|
$
|
52.7
|
|
|
$
|
43.5
|
|
Non-current assets
|
935.6
|
|
|
673.2
|
|
||
Total assets
|
$
|
988.3
|
|
|
$
|
716.7
|
|
|
|
|
|
||||
Current liabilities
|
$
|
53.0
|
|
|
$
|
44.2
|
|
Non-current liabilities
|
245.9
|
|
|
107.9
|
|
||
Total liabilities
|
$
|
298.9
|
|
|
$
|
152.1
|
|
|
Year Ended December 31,
|
||||||||||
|
2014
|
|
2013
|
|
2012
|
||||||
Operating revenue
|
$
|
71.0
|
|
|
$
|
37.8
|
|
|
$
|
29.8
|
|
Operating costs and expenses
|
65.9
|
|
|
31.1
|
|
|
32.5
|
|
|||
Operating (loss) income
|
$
|
5.1
|
|
|
$
|
6.7
|
|
|
$
|
(2.7
|
)
|
Income (loss) from continuing operations*
|
$
|
5.0
|
|
|
$
|
6.8
|
|
|
$
|
(11.5
|
)
|
Net income (loss)
|
$
|
5.0
|
|
|
$
|
6.8
|
|
|
$
|
(11.5
|
)
|
|
Total Fair Value Measurement as of Year End
|
|
Quoted Prices in Active Markets for Identical Assets (Level 1)
|
|
Significant Other Observable Inputs (Level 2)
|
|
Significant Un-observable Inputs
(Level 3) |
|
Total Loss for the Year
|
||||||||||
Year Ended December 31, 2013
|
|
|
|
|
|
|
|
|
|
||||||||||
The Shops at Kukui'ula Investment
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
6.3
|
|
|
$
|
6.3
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Year Ended December 31, 2012
|
|
|
|
|
|
|
|
|
|
||||||||||
Santa Barbara (CA) landholdings
|
$
|
5.9
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
5.9
|
|
|
$
|
5.1
|
|
Bakersfield (CA) joint venture*
|
7.0
|
|
|
—
|
|
|
—
|
|
|
7.0
|
|
|
4.7
|
|
|||||
Total
|
$
|
12.9
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
12.9
|
|
|
$
|
9.8
|
|
|
2014
|
2013
|
||||
Costs incurred on uncompleted contracts
|
$
|
126.7
|
|
$
|
135.8
|
|
Estimated earnings
|
32.8
|
|
26.6
|
|
||
Subtotal
|
159.5
|
|
162.4
|
|
||
Less: billings to date
|
147.2
|
|
156.3
|
|
||
Total
|
$
|
12.3
|
|
$
|
6.1
|
|
|
|
|
||||
Included in accompanying consolidated balance sheets under the following captions:
|
|
|
|
|||
Costs and estimated earnings in excess of billings on uncompleted contracts
|
$
|
15.9
|
|
$
|
10.5
|
|
Estimated billings in excess of costs and estimated earnings on uncompleted contracts
|
(3.6
|
)
|
(4.4
|
)
|
||
Total
|
$
|
12.3
|
|
$
|
6.1
|
|
|
December 31,
|
||||||
|
2014
|
|
2013
|
||||
Buildings
|
$
|
586.7
|
|
|
$
|
560.0
|
|
Land
|
588.5
|
|
|
572.7
|
|
||
Machinery and equipment
|
236.1
|
|
|
230.9
|
|
||
Asphalt plants
|
65.5
|
|
|
48.0
|
|
||
Water, power and sewer systems
|
142.6
|
|
|
138.8
|
|
||
Other property improvements
|
90.7
|
|
|
90.2
|
|
||
Vessel
|
7.2
|
|
|
7.2
|
|
||
Subtotal
|
1,717.3
|
|
|
1,647.8
|
|
||
Accumulated depreciation
|
(415.6
|
)
|
|
(374.1
|
)
|
||
Property - net
|
$
|
1,301.7
|
|
|
$
|
1,273.7
|
|
|
2014
|
|
2013
|
||||
Revolving Credit loans, (2.37% for 2014 and 2.53% for 2013)
|
$
|
169.8
|
|
|
$
|
112.1
|
|
Term Loans:
|
|
|
|
||||
6.90%, payable through 2020
|
80.0
|
|
|
85.0
|
|
||
5.55%, payable through 2026
|
50.0
|
|
|
50.0
|
|
||
5.53%, payable through 2024
|
37.5
|
|
|
37.5
|
|
||
5.56%, payable through 2026
|
25.0
|
|
|
25.0
|
|
||
3.90%, payable through 2024
|
75.0
|
|
|
75.0
|
|
||
4.35%, payable through 2026
|
25.0
|
|
|
25.0
|
|
||
4.15%, payable through 2024, secured by Pearl Highlands Center (a)
|
93.6
|
|
|
61.8
|
|
||
2.08%, payable through 2021, secured by Kailua Town Center III (b)
|
11.2
|
|
|
11.3
|
|
||
2.82%, payable through 2016, secured by The Shops at Kukui'ula (c)
|
40.5
|
|
|
44.0
|
|
||
2.78%, payable through 2016, secured by Kahala Estate Properties (d)
|
35.2
|
|
|
42.0
|
|
||
5.39%, payable through 2015, secured by Waianae Mall
|
19.1
|
|
|
19.9
|
|
||
5.19%, payable through 2019
|
10.2
|
|
|
11.9
|
|
||
6.38%, payable through 2017, secured by Midstate Hayes
|
8.3
|
|
|
8.3
|
|
||
1.17%, payable through 2021, secured by asphalt terminal (e)
|
8.0
|
|
|
8.9
|
|
||
1.85%, payable through 2017
|
7.9
|
|
|
10.7
|
|
||
3.31%, payable through 2018
|
6.3
|
|
|
8.0
|
|
||
2.00%, payable through 2018
|
2.2
|
|
|
2.9
|
|
||
2.65%, payable through 2016
|
1.2
|
|
|
1.8
|
|
||
5.50%, payable through 2014, secured by Little Cottonwood Center
|
—
|
|
|
6.1
|
|
||
5.88%, payable through 2014, secured by Midstate 99 Distribution Ctr.
|
—
|
|
|
3.2
|
|
||
3.05%, payable through 2014, secured by Maui Mall (f)
|
—
|
|
|
60.0
|
|
||
5.00%, payable through 2014
|
—
|
|
|
0.3
|
|
||
Total debt
|
706.0
|
|
|
710.7
|
|
||
Less debt (premium) discount
|
(0.4
|
)
|
|
(1.8
|
)
|
||
Total debt (contractual)
|
705.6
|
|
|
708.9
|
|
||
Less current portion
|
(74.5
|
)
|
|
(105.2
|
)
|
||
Add debt premium (discount)
|
0.4
|
|
|
1.8
|
|
||
Long-term debt
|
$
|
631.5
|
|
|
$
|
605.5
|
|
(a)
|
On December 1, 2014, the Company refinanced and increased the amount of the loan secured by Pearl Highlands Center.
|
(b)
|
Loan has a stated interest rate of
LIBOR
plus
1.5%
, but is swapped through maturity to a
5.95%
fixed rate.
|
(c)
|
Loan has a stated interest rate of
LIBOR
plus
2.66%
.
|
(d)
|
Loan has a stated interest rate of
LIBOR
plus
2.63%
.
|
(e)
|
Loan has a stated interest rate of
LIBOR
plus
1.0%
, but is swapped through maturity to a
5.98%
fixed rate.
|
(f)
|
Loan has a stated interest rate of LIBOR plus
3.00%
. The loan was used as temporary financing for the acquisition of the Kailua Portfolio in December 2013. The loan was paid off with reverse 1031 proceeds from Maui Mall on January 6, 2014.
|
Years Ending December 31,
|
|
Minimum Lease Payments
|
||
2015
|
|
$
|
5.6
|
|
2016
|
|
5.4
|
|
|
2017
|
|
5.4
|
|
|
2018
|
|
4.7
|
|
|
2019
|
|
3.9
|
|
|
Thereafter
|
|
20.1
|
|
|
Total
|
|
$
|
45.1
|
|
|
2014
|
|
2013
|
||||
Leased property - real estate
|
$
|
1,149.9
|
|
|
$
|
1,100.0
|
|
Less accumulated depreciation
|
(118.5
|
)
|
|
(99.5
|
)
|
||
Property under operating leases - net
|
$
|
1,031.4
|
|
|
$
|
1,000.5
|
|
Years Ending December 31,
|
2014
|
|
2013
|
|
2012
|
||||||
Minimum rentals
|
$
|
89.8
|
|
|
$
|
80.5
|
|
|
$
|
74.3
|
|
Contingent rentals (based on sales volume)
|
4.7
|
|
|
3.0
|
|
|
2.8
|
|
|||
Total
|
$
|
94.5
|
|
|
$
|
83.5
|
|
|
$
|
77.1
|
|
|
Operating Leases
|
||
2015
|
$
|
85.9
|
|
2016
|
76.1
|
|
|
2017
|
64.2
|
|
|
2018
|
52.5
|
|
|
2019
|
44.9
|
|
|
Thereafter
|
307.9
|
|
|
Total
|
$
|
631.5
|
|
|
Target
|
|
2014
|
|
2013
|
|||
Domestic equity securities
|
28
|
%
|
|
32
|
%
|
|
29
|
%
|
International equity securities
|
15
|
%
|
|
15
|
%
|
|
16
|
%
|
Debt securities
|
46
|
%
|
|
44
|
%
|
|
44
|
%
|
Alternatives and other
|
11
|
%
|
|
6
|
%
|
|
8
|
%
|
Cash
|
—
|
%
|
|
3
|
%
|
|
3
|
%
|
Total
|
100
|
%
|
|
100
|
%
|
|
100
|
%
|
|
Fair Value Measurements as of
|
||||||||||||||
|
December 31, 2014
|
||||||||||||||
|
Total
|
|
Quoted Prices in Active Markets (Level 1)
|
|
Significant Observable Inputs (Level 2)
|
|
Significant Unobservable Inputs (Level 3)
|
||||||||
Asset Category
|
|
|
|
|
|
|
|
||||||||
Cash
|
$
|
3.5
|
|
|
$
|
3.5
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Equity securities:
|
|
|
|
|
|
|
|
||||||||
Domestic
|
18.2
|
|
|
18.2
|
|
|
—
|
|
|
—
|
|
||||
Domestic exchange-traded funds
|
33.0
|
|
|
33.0
|
|
|
—
|
|
|
—
|
|
||||
International
|
9.8
|
|
|
9.7
|
|
|
0.1
|
|
|
—
|
|
||||
International and emerging markets exchange-traded funds
|
14.9
|
|
|
14.9
|
|
|
—
|
|
|
—
|
|
||||
Fixed income securities:
|
|
|
|
|
|
|
|
||||||||
U.S. Treasury obligations
|
24.7
|
|
|
24.7
|
|
|
—
|
|
|
—
|
|
||||
Domestic corporate bonds and notes
|
40.9
|
|
|
—
|
|
|
40.9
|
|
|
—
|
|
||||
Foreign corporate bonds
|
5.4
|
|
|
—
|
|
|
5.4
|
|
|
—
|
|
||||
Other types of investments:
|
|
|
|
|
|
|
|
||||||||
Limited partnership interest in private equity fund
|
0.3
|
|
|
—
|
|
|
—
|
|
|
0.3
|
|
||||
Exchange-traded global real estate fund
|
5.1
|
|
|
5.1
|
|
|
—
|
|
|
—
|
|
||||
Insurance contracts
|
1.4
|
|
|
—
|
|
|
—
|
|
|
1.4
|
|
||||
Exchange-traded commodity fund
|
2.8
|
|
|
2.8
|
|
|
—
|
|
|
—
|
|
||||
Other receivables
|
0.8
|
|
|
0.8
|
|
|
—
|
|
|
—
|
|
||||
Total
|
$
|
160.8
|
|
|
$
|
112.7
|
|
|
$
|
46.4
|
|
|
$
|
1.7
|
|
|
Fair Value Measurements as of
|
||||||||||||||
|
December 31, 2013
|
||||||||||||||
|
Total
|
|
Quoted Prices in Active Markets (Level 1)
|
|
Significant Observable Inputs (Level 2)
|
|
Significant Unobservable Inputs (Level 3)
|
||||||||
Asset Category
|
|
|
|
|
|
|
|
||||||||
Cash
|
$
|
5.2
|
|
|
$
|
5.2
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Equity securities:
|
|
|
|
|
|
|
|
||||||||
Domestic
|
44.8
|
|
|
44.8
|
|
|
—
|
|
|
—
|
|
||||
International
|
24.4
|
|
|
24.4
|
|
|
—
|
|
|
—
|
|
||||
Fixed income securities:
|
|
|
|
|
|
|
|
||||||||
Exchange traded funds - U.S. Treasuries
|
16.3
|
|
|
16.3
|
|
|
—
|
|
|
—
|
|
||||
Exchange traded funds - Investment grade U.S. corporate bonds
|
45.0
|
|
|
45.0
|
|
|
—
|
|
|
—
|
|
||||
Limited partnership investment in high-yield U.S. corporate bonds
|
6.4
|
|
|
—
|
|
|
—
|
|
|
6.4
|
|
||||
Other types of investments:
|
|
|
|
|
|
|
|
||||||||
Real estate partnership interests
|
7.5
|
|
|
—
|
|
|
—
|
|
|
7.5
|
|
||||
Limited partnership interest in private equity fund
|
0.3
|
|
|
—
|
|
|
—
|
|
|
0.3
|
|
||||
Exchange-traded commodity fund
|
2.5
|
|
|
2.5
|
|
|
—
|
|
|
—
|
|
||||
Insurance contracts
|
1.0
|
|
|
—
|
|
|
—
|
|
|
1.0
|
|
||||
Total
|
$
|
153.4
|
|
|
$
|
138.2
|
|
|
$
|
—
|
|
|
$
|
15.2
|
|
|
Fair Value Measurements Using Significant
|
||||||||||||||||||
|
Unobservable Inputs (Level 3)
|
||||||||||||||||||
|
Real Estate
|
|
Private Equity
|
|
Insurance
|
|
Limited Partnership
|
|
Total
|
||||||||||
Beginning balance, January 1, 2013
|
$
|
7.8
|
|
|
$
|
0.7
|
|
|
$
|
0.9
|
|
|
$
|
—
|
|
|
$
|
9.4
|
|
Actual return on plan assets:
|
|
|
|
|
|
|
|
|
|
||||||||||
Assets held at the reporting date
|
1.1
|
|
|
(0.2
|
)
|
|
0.1
|
|
|
0.3
|
|
|
1.3
|
|
|||||
Assets sold during the period
|
0.3
|
|
|
0.1
|
|
|
—
|
|
|
—
|
|
|
0.4
|
|
|||||
Purchases, sales and settlements
|
(1.7
|
)
|
|
(0.3
|
)
|
|
—
|
|
|
6.1
|
|
|
4.1
|
|
|||||
Ending balance, December 31, 2013
|
7.5
|
|
|
0.3
|
|
|
1.0
|
|
|
6.4
|
|
|
15.2
|
|
|||||
Actual return on plan assets:
|
|
|
|
|
|
|
|
|
|
||||||||||
Assets held at the reporting date
|
—
|
|
|
—
|
|
|
0.4
|
|
|
—
|
|
|
0.4
|
|
|||||
Assets sold during the period
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Purchases, sales and settlements
|
(7.5
|
)
|
|
—
|
|
|
—
|
|
|
(6.4
|
)
|
|
(13.9
|
)
|
|||||
Ending balance, December 31, 2014
|
$
|
—
|
|
|
$
|
0.3
|
|
|
$
|
1.4
|
|
|
$
|
—
|
|
|
$
|
1.7
|
|
|
Pension Benefits
|
|
Other Post-retirement Benefits
|
||||||||||||
|
2014
|
|
2013
|
|
2014
|
|
2013
|
||||||||
Change in Benefit Obligation
|
|
|
|
|
|
|
|
||||||||
Benefit obligation at beginning of year
|
$
|
175.4
|
|
|
$
|
189.7
|
|
|
$
|
12.9
|
|
|
$
|
10.9
|
|
Service cost
|
2.6
|
|
|
2.6
|
|
|
0.1
|
|
|
0.1
|
|
||||
Interest cost
|
8.3
|
|
|
7.6
|
|
|
0.6
|
|
|
0.4
|
|
||||
Plan participants’ contributions
|
—
|
|
|
—
|
|
|
0.8
|
|
|
0.9
|
|
||||
Actuarial (gain) loss
|
29.7
|
|
|
(13.2
|
)
|
|
(0.7
|
)
|
|
3.0
|
|
||||
Benefits paid
|
(11.6
|
)
|
|
(11.1
|
)
|
|
(1.7
|
)
|
|
(1.8
|
)
|
||||
Special or contractual termination benefits
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Curtailment
|
—
|
|
|
(0.2
|
)
|
|
—
|
|
|
(0.6
|
)
|
||||
Benefit obligation at end of year
|
$
|
204.4
|
|
|
$
|
175.4
|
|
|
$
|
12.0
|
|
|
$
|
12.9
|
|
Change in Plan Assets
|
|
|
|
|
|
|
|
||||||||
Fair value of plan assets at beginning of year
|
153.4
|
|
|
142.3
|
|
|
—
|
|
|
—
|
|
||||
Actual return on plan assets
|
13.3
|
|
|
22.1
|
|
|
—
|
|
|
—
|
|
||||
Employer contributions
|
5.7
|
|
|
0.1
|
|
|
—
|
|
|
—
|
|
||||
Benefits paid
|
(11.6
|
)
|
|
(11.1
|
)
|
|
—
|
|
|
—
|
|
||||
Fair value of plan assets at end of year
|
$
|
160.8
|
|
|
$
|
153.4
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
|
|
|
|
|
|
|
||||||||
Funded Status and Recognized Liability
|
$
|
(43.6
|
)
|
|
$
|
(22.0
|
)
|
|
$
|
(12.0
|
)
|
|
$
|
(12.9
|
)
|
|
Pension Benefits
|
|
Other Post-retirement Benefits
|
||||||||||||
|
2014
|
|
2013
|
|
2014
|
|
2013
|
||||||||
Non-current assets
|
$
|
—
|
|
|
$
|
3.3
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Current liabilities
|
—
|
|
|
—
|
|
|
(0.8
|
)
|
|
(0.9
|
)
|
||||
Non-current liabilities
|
(43.6
|
)
|
|
(25.3
|
)
|
|
(11.2
|
)
|
|
(12.0
|
)
|
||||
Total
|
$
|
(43.6
|
)
|
|
$
|
(22.0
|
)
|
|
$
|
(12.0
|
)
|
|
$
|
(12.9
|
)
|
|
|
|
|
|
|
|
|
||||||||
Net loss (net of taxes)
|
$
|
47.3
|
|
|
$
|
33.2
|
|
|
$
|
0.5
|
|
|
$
|
1.1
|
|
Unrecognized prior service credit (net of taxes)
|
(3.4
|
)
|
|
(3.9
|
)
|
|
—
|
|
|
—
|
|
||||
Total
|
$
|
43.9
|
|
|
$
|
29.3
|
|
|
$
|
0.5
|
|
|
$
|
1.1
|
|
|
2014
|
|
2013
|
||||
Projected benefit obligation
|
$
|
204.4
|
|
|
$
|
167.7
|
|
Accumulated benefit obligation
|
$
|
203.2
|
|
|
$
|
166.0
|
|
Fair value of plan assets
|
$
|
160.8
|
|
|
$
|
142.4
|
|
|
Pension Benefits
|
|
Other Post-retirement Benefits
|
||||||||||||||||||||
|
2014
|
|
2013
|
|
2012
|
|
2014
|
|
2013
|
|
2012
|
||||||||||||
Components of Net Periodic Benefit Cost
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Service cost
|
$
|
2.6
|
|
|
$
|
2.6
|
|
|
$
|
2.4
|
|
|
$
|
0.1
|
|
|
$
|
0.1
|
|
|
$
|
0.1
|
|
Interest cost
|
8.3
|
|
|
7.6
|
|
|
8.2
|
|
|
0.6
|
|
|
0.4
|
|
|
0.5
|
|
||||||
Expected return on plan assets
|
(10.7
|
)
|
|
(10.9
|
)
|
|
(10.5
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Amortization of net loss
|
4.0
|
|
|
7.7
|
|
|
7.9
|
|
|
0.3
|
|
|
(0.2
|
)
|
|
(0.2
|
)
|
||||||
Amortization of prior service cost
|
(0.8
|
)
|
|
(0.8
|
)
|
|
(0.8
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Curtailment gain
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(0.5
|
)
|
|
—
|
|
||||||
Recognition of loss on special termination benefit
|
—
|
|
|
—
|
|
|
0.1
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Net periodic benefit cost
|
3.4
|
|
|
6.2
|
|
|
7.3
|
|
|
1.0
|
|
|
(0.2
|
)
|
|
0.4
|
|
||||||
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Other Changes in Plan Assets and Benefit Obligations Recognized in Other Comprehensive Income
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Net loss (gain)
|
$
|
27.1
|
|
|
$
|
(24.7
|
)
|
|
$
|
7.0
|
|
|
$
|
(0.6
|
)
|
|
$
|
3.0
|
|
|
$
|
(0.4
|
)
|
Amortization of unrecognized gain (loss)
|
(4.0
|
)
|
|
(7.7
|
)
|
|
(7.9
|
)
|
|
(0.3
|
)
|
|
0.2
|
|
|
0.3
|
|
||||||
Amortization of prior service cost
|
0.8
|
|
|
0.8
|
|
|
0.8
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Total recognized in other comprehensive income
|
23.9
|
|
|
(31.6
|
)
|
|
(0.1
|
)
|
|
(0.9
|
)
|
|
3.2
|
|
|
(0.1
|
)
|
||||||
Total recognized in net periodic benefit cost and other comprehensive income
|
$
|
27.3
|
|
|
$
|
(25.4
|
)
|
|
$
|
7.2
|
|
|
$
|
0.1
|
|
|
$
|
3.0
|
|
|
$
|
0.3
|
|
|
Pension Benefits
|
|
Other Post-retirement Benefits
|
||||||||||||||
|
2014
|
|
2013
|
|
2012
|
|
2014
|
|
2013
|
|
2012
|
||||||
Weighted Average Assumptions:
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Discount rate
|
4.00
|
%
|
|
4.90
|
%
|
|
4.10
|
%
|
|
4.10
|
%
|
|
4.90
|
%
|
|
4.10
|
%
|
Expected return on plan assets
|
7.10
|
%
|
|
8.00
|
%
|
|
8.25
|
%
|
|
—
|
%
|
|
—
|
%
|
|
—
|
%
|
Rate of compensation increase
|
0.5%-3%
|
|
|
3.00
|
%
|
|
3.00
|
%
|
|
3.00
|
%
|
|
3.00
|
%
|
|
3.00
|
%
|
Initial health care cost trend rate
|
|
|
|
|
|
|
7.30
|
%
|
|
7.50
|
%
|
|
8.00
|
%
|
|||
Ultimate rate
|
|
|
|
|
|
|
4.50
|
%
|
|
4.50
|
%
|
|
4.50
|
%
|
|||
Year ultimate rate is reached
|
|
|
|
|
|
|
2028
|
|
|
2028
|
|
2020
|
|
Other Post-retirement Benefits
|
||||||||||||||||||||||
|
One Percentage Point
|
||||||||||||||||||||||
|
Increase
|
|
Decrease
|
||||||||||||||||||||
|
2014
|
|
2013
|
|
2012
|
|
2014
|
|
2013
|
|
2012
|
||||||||||||
Effect on total of service and interest cost components
|
$
|
0.1
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
(0.1
|
)
|
|
$
|
—
|
|
|
$
|
—
|
|
Effect on post-retirement benefit obligation
|
$
|
1.1
|
|
|
$
|
1.2
|
|
|
$
|
0.6
|
|
|
$
|
(0.9
|
)
|
|
$
|
(1.0
|
)
|
|
$
|
(0.5
|
)
|
|
|
Pension
|
|
Non-qualified
|
|
Post-retirement
|
||||||
Year
|
|
Benefits
|
|
Plan Benefits
|
|
Benefits
|
||||||
2015
|
|
$
|
10.9
|
|
|
$
|
0.7
|
|
|
$
|
0.9
|
|
2016
|
|
$
|
11.2
|
|
|
$
|
3.6
|
|
|
$
|
0.9
|
|
2017
|
|
$
|
11.4
|
|
|
$
|
0.1
|
|
|
$
|
0.8
|
|
2018
|
|
$
|
11.6
|
|
|
$
|
1.0
|
|
|
$
|
0.8
|
|
2019
|
|
$
|
11.8
|
|
|
$
|
0.1
|
|
|
$
|
0.8
|
|
2020-2024
|
|
$
|
62.5
|
|
|
$
|
0.7
|
|
|
$
|
3.4
|
|
a.
|
Assets contributed to the multiemployer plan by one employer may be used to provide benefits to employees of other participating employers.
|
b.
|
If a participating employer stops contributing to the plan, the unfunded obligations of the plan may be borne by the remaining participating employers.
|
c.
|
If the Company chooses to stop participating in some of its multiemployer plans, the Company may be required to pay those plans an amount based on the underfunded status of the plan, referred to as a withdrawal liability.
|
|
|
Pension Protection Act Zone Status
|
FIP/RP Status
|
Contribution by Entity
|
Contribution by Entity
|
Surcharge Imposed
|
Expiration Date
|
Current Plan Year End
|
||||
|
EIN Plan No.
|
2014 and 2013
|
Pending/Implemented
|
Jan. 1 - Dec. 31, 2014
|
Oct. 1 - Dec. 31, 2013
|
|||||||
Fund
|
|
|
|
|
|
|
|
|
||||
Operating Engineers
|
94-6090764; 001
|
Red
|
Yes
|
$
|
4.3
|
|
$
|
1.0
|
|
No
|
9/2/19*
|
12/31/14
|
Laborers National
|
52-6074345; 001
|
Red
|
Yes
|
0.1
|
|
—
|
|
No
|
8/31/15
|
12/31/14
|
||
Hawaii Laborers
|
99-6012128; 001
|
Green
|
No
|
0.5
|
|
0.1
|
|
No
|
8/31/15
|
2/28/14
|
||
Hawaii Laborers
|
99-6012128; 001
|
Green
|
No
|
0.1
|
|
—
|
|
No
|
9/30/19
|
2/28/14
|
||
|
|
|
|
$
|
5.0
|
|
$
|
1.1
|
|
|
|
|
|
2014
|
|
2013
|
|
2012
|
||||||
Current:
|
|
|
|
|
|
||||||
Federal
|
$
|
11.2
|
|
|
$
|
17.1
|
|
|
$
|
4.3
|
|
State
|
2.8
|
|
|
2.1
|
|
|
0.8
|
|
|||
Current
|
14.0
|
|
|
19.2
|
|
|
5.1
|
|
|||
Deferred:
|
|
|
|
|
|
|
|
|
|||
Federal
|
(7.8
|
)
|
|
(5.7
|
)
|
|
(9.0
|
)
|
|||
State
|
(7.6
|
)
|
|
(2.4
|
)
|
|
(2.0
|
)
|
|||
Deferred
|
(15.4
|
)
|
|
(8.1
|
)
|
|
(11.0
|
)
|
|||
Total continuing operations tax expense (benefit)
|
$
|
(1.4
|
)
|
|
$
|
11.1
|
|
|
$
|
(5.9
|
)
|
|
2014
|
|
2013
|
|
2012
|
||||||
Computed federal income tax expense
|
$
|
10.1
|
|
|
$
|
8.3
|
|
|
$
|
—
|
|
State income taxes
|
(4.1
|
)
|
|
1.0
|
|
|
(0.3
|
)
|
|||
Non-deductible transaction costs
|
—
|
|
|
1.6
|
|
|
1.7
|
|
|||
Charitable contribution
|
—
|
|
|
(0.2
|
)
|
|
(3.5
|
)
|
|||
Federal solar tax credits
|
(11.3
|
)
|
|
—
|
|
|
(2.9
|
)
|
|||
Other—net
|
3.9
|
|
|
0.4
|
|
|
(0.9
|
)
|
|||
Income tax expense (benefit)
|
$
|
(1.4
|
)
|
|
$
|
11.1
|
|
|
$
|
(5.9
|
)
|
|
2014
|
|
2013
|
||||
Deferred tax assets:
|
|
|
|
||||
Benefit plans
|
$
|
30.7
|
|
|
$
|
21.1
|
|
Capitalized costs
|
21.9
|
|
|
24.1
|
|
||
Charitable contribution
|
—
|
|
|
1.5
|
|
||
Joint ventures and other investments
|
19.0
|
|
|
13.0
|
|
||
Impairment and amortization
|
6.7
|
|
|
0.5
|
|
||
Insurance and other reserves
|
4.2
|
|
|
6.7
|
|
||
Solar credit*
|
4.9
|
|
|
3.5
|
|
||
Other
|
9.8
|
|
|
5.4
|
|
||
Total deferred tax assets
|
97.2
|
|
|
75.8
|
|
||
|
|
|
|
||||
Deferred tax liabilities:
|
|
|
|
|
|
||
Tax-deferred gains on real estate transactions
|
252.5
|
|
|
225.4
|
|
||
Basis differences for property and equipment
|
19.3
|
|
|
23.4
|
|
||
Straight-line rental income and advanced rent
|
8.4
|
|
|
7.2
|
|
||
Other
|
2.7
|
|
|
5.2
|
|
||
Total deferred tax liabilities
|
282.9
|
|
|
261.2
|
|
||
|
|
|
|
||||
Net deferred tax liability
|
$
|
185.7
|
|
|
$
|
185.4
|
|
Balance at January 1, 2012
|
$
|
2.5
|
|
Additions for tax positions of prior years
|
—
|
|
|
Additions for tax positions of current year
|
—
|
|
|
Reductions for tax positions of prior years
|
(2.5
|
)
|
|
Reductions for lapse of statute of limitations
|
—
|
|
|
Balance at December 31, 2012
|
—
|
|
|
Additions for tax positions of prior years
|
—
|
|
|
Additions for tax positions of current year
|
—
|
|
|
Reductions for tax positions of prior years
|
—
|
|
|
Reductions for lapse of statute of limitations
|
—
|
|
|
Balance at December 31, 2013
|
—
|
|
|
Additions for tax positions of prior years
|
—
|
|
|
Additions for tax positions of current year
|
—
|
|
|
Reductions for tax positions of prior years
|
—
|
|
|
Reductions for lapse of statute of limitations
|
—
|
|
|
Balance at December 31, 2014
|
$
|
—
|
|
|
2012
Plan
Restricted
Stock
Units
|
|
Weighted
Average
Grant-Date
Fair Value
|
|
Outstanding, January 1, 2014
|
242.3
|
|
|
$27.92
|
Granted
|
123.0
|
|
|
$39.38
|
Vested
|
(86.3
|
)
|
|
$25.37
|
Canceled
|
—
|
|
|
$—
|
Outstanding, December 31, 2014
|
279.0
|
|
|
$33.76
|
|
2014
|
|
2013
|
||
Volatility of A&B common stock
|
25.4
|
%
|
|
31.8
|
%
|
Average volatility of peer companies
|
27.3
|
%
|
|
35.7
|
%
|
Risk-free interest rate
|
0.37
|
%
|
|
0.29
|
%
|
|
2014
|
|
2013
|
|
2012
|
||||||
Share-based expense (net of estimated forfeitures):
|
|
|
|
|
|
||||||
Stock options
|
$
|
0.3
|
|
|
$
|
0.7
|
|
|
$
|
1.1
|
|
Incremental share-based compensation cost related to separation
|
0.2
|
|
|
0.5
|
|
|
1.2
|
|
|||
Non-vested stock & restricted stock units
|
4.4
|
|
|
3.0
|
|
|
3.1
|
|
|||
Total share-based expense
|
4.9
|
|
|
4.2
|
|
|
5.4
|
|
|||
Total recognized tax benefit
|
(1.5
|
)
|
|
(1.3
|
)
|
|
(1.8
|
)
|
|||
Share-based expense (net of tax)
|
$
|
3.4
|
|
|
$
|
2.9
|
|
|
$
|
3.6
|
|
|
|
|
|
|
|
||||||
Cash received upon option exercise
|
$
|
4.5
|
|
|
$
|
7.6
|
|
|
$
|
20.9
|
|
Intrinsic value of options exercised
|
$
|
5.4
|
|
|
$
|
6.7
|
|
|
$
|
13.4
|
|
Tax benefit realized upon option exercise
|
$
|
2.0
|
|
|
$
|
2.5
|
|
|
$
|
2.3
|
|
Fair value of stock vested
|
$
|
2.6
|
|
|
$
|
5.2
|
|
|
$
|
4.2
|
|
Standby letters of credit
|
(a)
|
$
|
12.2
|
|
Bonds
|
(b)
|
$
|
329.1
|
|
(a)
|
Consists of standby letters of credit, issued by the Company’s lenders under the Company’s revolving credit facilities, and relate primarily to the Company’s real estate activities. In the event the letters of credit are drawn upon, the Company would be obligated to reimburse the issuer of the letter of credit. None of the letters of credit has been drawn upon to date, and the Company believes it is unlikely that any of these letters of credit will be drawn upon.
|
(b)
|
Represents bonds related to construction and real estate activities in Hawaii. Approximately
$305.4 million
is related to 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). In the event the bonds are drawn upon, the Company would be obligated to reimburse the surety that issued the bond. None of the bonds has been drawn upon to date, and the Company believes it is unlikely that any of these bonds will be drawn upon.
|
|
As of December 31,
|
||||||
Classified in Other non-current liabilities
|
2014
|
|
2013
|
||||
Interest rate swap liability - floating to fixed rate
|
$
|
2.9
|
|
|
$
|
2.8
|
|
|
|
||||||||||
For the Year Ended December 31,
|
2014
|
|
2013
|
|
2012
|
||||||
Revenue:
|
|
|
|
|
|
||||||
Real Estate:
|
|
|
|
|
|
||||||
Leasing
|
$
|
125.6
|
|
|
$
|
110.4
|
|
|
$
|
100.6
|
|
Development and Sales
|
150.0
|
|
|
423.0
|
|
|
32.2
|
|
|||
Less amounts reported in discontinued operations
1
|
(70.4
|
)
|
|
(369.2
|
)
|
|
(45.3
|
)
|
|||
Materials and Construction
2
|
234.3
|
|
|
54.9
|
|
|
—
|
|
|||
Agribusiness
|
120.5
|
|
|
146.1
|
|
|
182.3
|
|
|||
Reconciling items
3
|
—
|
|
|
—
|
|
|
(8.3
|
)
|
|||
Total revenue
|
$
|
560.0
|
|
|
$
|
365.2
|
|
|
$
|
261.5
|
|
Operating profit (loss)
|
|
|
|
|
|
||||||
Real Estate:
|
|
|
|
|
|
||||||
Leasing
|
$
|
47.5
|
|
|
$
|
43.4
|
|
|
$
|
41.6
|
|
Development and Sales
4
|
85.7
|
|
|
44.4
|
|
|
(4.4
|
)
|
|||
Less amounts reported in discontinued operations
1
|
(56.2
|
)
|
|
(36.7
|
)
|
|
(21.1
|
)
|
|||
Materials and Construction
2
|
25.9
|
|
|
2.9
|
|
|
—
|
|
|||
Agribusiness
|
(11.8
|
)
|
|
10.7
|
|
|
20.8
|
|
|||
Total operating profit
|
91.1
|
|
|
64.7
|
|
|
36.9
|
|
|||
Interest expense
|
(29.0
|
)
|
|
(19.1
|
)
|
|
(14.9
|
)
|
|||
General corporate expenses
|
(18.6
|
)
|
|
(17.4
|
)
|
|
(15.1
|
)
|
|||
Reduction in KRS II carrying value, net (Note 6, 13)
|
(14.7
|
)
|
|
—
|
|
|
—
|
|
|||
Separation/Acquisition Costs
|
—
|
|
|
(4.6
|
)
|
|
(6.8
|
)
|
|||
Income from continuing operations before income taxes
|
28.8
|
|
|
23.6
|
|
|
0.1
|
|
|||
Income tax expense (benefit)
|
(1.4
|
)
|
|
11.1
|
|
|
(5.9
|
)
|
|||
Income from continuing operations
|
30.2
|
|
|
12.5
|
|
|
6.0
|
|
|||
Income from discontinued operations (net of income taxes)
|
34.3
|
|
|
22.3
|
|
|
12.8
|
|
|||
Net income
|
64.5
|
|
|
34.8
|
|
|
18.8
|
|
|||
Income attributable to non-controlling interest
|
(3.1
|
)
|
|
(0.5
|
)
|
|
—
|
|
|||
Net income attributable to A&B
|
$
|
61.4
|
|
|
$
|
34.3
|
|
|
$
|
18.8
|
|
1
|
Amounts recast to reflect discontinued operations.
|
2
|
2013 includes the results, capital expenditures, and depreciation and amortization of Grace from the acquisition date of October 1, 2013 through December 31, 2013.
|
3
|
Represents the sale of a
286
-acre agricultural parcel in 2012 classified as "Gain on sale of agricultural parcel" in the Consolidated Statements of Income, but reflected as revenue for segment reporting purposes.
|
4
|
The Real Estate Development and Sales segment includes approximately
$2.0 million
,
$4.2 million
, and
($8.3) million
in equity in earnings (losses) from its various real estate joint ventures for
2014
,
2013
, and
2012
, respectively. Included in operating profit are non-cash impairment and equity losses of
$0.3 million
related to the sale of Crossroads in 2014,
$6.3 million
related to the consolidation of The Shops at Kukui'ula in 2013, and
$9.8 million
related to the Bakersfield joint venture and Santa Barbara real estate project in 2012.
|
As of December 31,
|
2014
|
|
2013
|
|
2012
|
||||||
Identifiable Assets:
|
|
|
|
|
|
||||||
Real Estate:
|
|
|
|
|
|
||||||
Leasing
|
$
|
1,121.6
|
|
|
$
|
1,113.4
|
|
|
$
|
771.3
|
|
Development and Sales
5
|
634.3
|
|
|
640.9
|
|
|
504.8
|
|
|||
Agribusiness
|
162.8
|
|
|
160.0
|
|
|
149.9
|
|
|||
Materials and Construction
|
385.9
|
|
|
358.7
|
|
|
—
|
|
|||
Other
|
25.3
|
|
|
10.6
|
|
|
11.3
|
|
|||
Total assets
|
$
|
2,329.9
|
|
|
$
|
2,283.6
|
|
|
$
|
1,437.3
|
|
|
|
|
|
|
|
||||||
Capital Expenditures:
|
|
|
|
|
|
||||||
Real Estate:
|
|
|
|
|
|
||||||
Leasing
6
|
$
|
51.8
|
|
|
$
|
488.5
|
|
|
$
|
23.1
|
|
Development and Sales
7
|
—
|
|
|
0.1
|
|
|
—
|
|
|||
Agribusiness
8
|
10.8
|
|
|
11.8
|
|
|
31.7
|
|
|||
Materials and Construction
2
|
10.7
|
|
|
4.8
|
|
|
—
|
|
|||
Other
|
1.8
|
|
|
0.1
|
|
|
—
|
|
|||
Total capital expenditures
|
$
|
75.1
|
|
|
$
|
505.3
|
|
|
$
|
54.8
|
|
|
|
|
|
|
|
||||||
Depreciation and Amortization:
|
|
|
|
|
|
||||||
Real Estate:
|
|
|
|
|
|
||||||
Leasing
1
|
$
|
26.9
|
|
|
$
|
24.3
|
|
|
$
|
22.0
|
|
Development and Sales
|
0.2
|
|
|
0.2
|
|
|
0.2
|
|
|||
Agribusiness
|
11.5
|
|
|
11.7
|
|
|
11.6
|
|
|||
Materials and Construction
2
|
15.2
|
|
|
4.4
|
|
|
—
|
|
|||
Other
|
1.2
|
|
|
1.1
|
|
|
1.3
|
|
|||
Total depreciation and amortization
|
$
|
55.0
|
|
|
$
|
41.7
|
|
|
$
|
35.1
|
|
5
|
The Real Estate Development and Sales segment includes approximately
$383.8 million
,
$335.0 million
, and
$319.7 million
related to its investment in various real estate joint ventures as of December 31,
2014
,
2013
, and
2012
, respectively.
|
6
|
Represents gross capital additions to the leasing portfolio, including gross tax-deferred property purchases, but excluding the assumption of debt, that are reflected as non-cash transactions in the Consolidated Statements of Cash Flows.
|
7
|
Excludes expenditures for real estate developments held for sale which are classified as Cash Flows from Operating Activities within the Consolidated Statements of Cash Flows and excludes investment in joint ventures classified as Cash Flows from Investing Activities. Operating cash flows for expenditures related to real estate developments were
$41.7 million
,
$150.6 million
, and
$37.2 million
for
2014
,
2013
, and
2012
, respectively. Investments in real estate joint ventures were
$28.7 million
,
$22.2 million
, and
$17.4 million
in
2014
,
2013
, and
2012
, respectively.
|
8
|
Includes
$21.8 million
of capital in 2012 related to the Company’s Port Allen solar project before tax credits.
|
|
2014
|
||||||||||||||
(Unaudited)
|
Q1
|
|
Q2
|
|
Q3
|
|
Q4
|
||||||||
Revenue:
|
|
|
|
|
|
|
|
||||||||
Real Estate:
|
|
|
|
|
|
|
|
||||||||
Leasing
|
$
|
31.2
|
|
|
$
|
31.0
|
|
|
$
|
31.3
|
|
|
$
|
32.1
|
|
Development and Sales
|
71.0
|
|
|
21.4
|
|
|
18.2
|
|
|
39.4
|
|
||||
Less amounts reported in discontinued operations
1
|
(70.4
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Materials and Construction
|
50.1
|
|
|
64.5
|
|
|
58.4
|
|
|
61.3
|
|
||||
Agribusiness
|
12.9
|
|
|
29.8
|
|
|
45.5
|
|
|
32.3
|
|
||||
Total revenue
|
$
|
94.8
|
|
|
$
|
146.7
|
|
|
$
|
153.4
|
|
|
$
|
165.1
|
|
Operating profit (loss)
|
|
|
|
|
|
|
|
||||||||
Real Estate:
|
|
|
|
|
|
|
|
||||||||
Leasing
|
$
|
11.8
|
|
|
$
|
12.0
|
|
|
$
|
12.1
|
|
|
$
|
11.6
|
|
Development and Sales
2
|
52.3
|
|
|
7.8
|
|
|
11.4
|
|
|
14.2
|
|
||||
Less amounts reported in discontinued operations
1
|
(56.2
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Materials and Construction
|
3.4
|
|
|
8.0
|
|
|
5.9
|
|
|
8.6
|
|
||||
Agribusiness
|
3.0
|
|
|
0.4
|
|
|
(7.3
|
)
|
|
(7.9
|
)
|
||||
Total operating profit
|
14.3
|
|
|
28.2
|
|
|
22.1
|
|
|
26.5
|
|
||||
Interest expense
|
(7.2
|
)
|
|
(7.2
|
)
|
|
(7.2
|
)
|
|
(7.4
|
)
|
||||
General corporate expenses
|
(5.2
|
)
|
|
(4.3
|
)
|
|
(3.9
|
)
|
|
(5.2
|
)
|
||||
Reduction in KRS II carrying value (Note 6, 13)
|
—
|
|
|
—
|
|
|
(15.1
|
)
|
|
0.4
|
|
||||
Income (loss) from continuing operations before income taxes
|
1.9
|
|
|
16.7
|
|
|
(4.1
|
)
|
|
14.3
|
|
||||
Income tax expense (benefit)
3
|
0.8
|
|
|
6.5
|
|
|
(14.9
|
)
|
|
6.2
|
|
||||
Income (loss) from continuing operations
|
1.1
|
|
|
10.2
|
|
|
10.8
|
|
|
8.1
|
|
||||
Income from discontinued operations (net of income taxes)
|
34.3
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Net income
|
35.4
|
|
|
10.2
|
|
|
10.8
|
|
|
8.1
|
|
||||
Income attributable to non-controlling interest
|
(0.4
|
)
|
|
(1.0
|
)
|
|
(0.6
|
)
|
|
(1.1
|
)
|
||||
Net income attributable to A&B
|
$
|
35.0
|
|
|
$
|
9.2
|
|
|
$
|
10.2
|
|
|
$
|
7.0
|
|
|
2013
|
||||||||||||||
(Unaudited)
|
Q1
|
|
Q2
|
|
Q3
|
|
Q4
|
||||||||
Revenue:
|
|
|
|
|
|
|
|
||||||||
Real Estate:
|
|
|
|
|
|
|
|
||||||||
Leasing
|
$
|
26.3
|
|
|
$
|
26.2
|
|
|
$
|
27.5
|
|
|
$
|
30.4
|
|
Development and Sales
|
15.4
|
|
|
1.4
|
|
|
47.4
|
|
|
358.8
|
|
||||
Less amounts reported in discontinued operations
1
|
(23.6
|
)
|
|
(8.4
|
)
|
|
(45.9
|
)
|
|
(291.3
|
)
|
||||
Materials and Construction
4
|
—
|
|
|
—
|
|
|
—
|
|
|
54.9
|
|
||||
Agribusiness
|
14.7
|
|
|
43.5
|
|
|
35.9
|
|
|
52.0
|
|
||||
Total revenue
|
$
|
32.8
|
|
|
$
|
62.7
|
|
|
$
|
64.9
|
|
|
$
|
204.8
|
|
Operating profit (loss)
|
|
|
|
|
|
|
|
||||||||
Real Estate:
|
|
|
|
|
|
|
|
||||||||
Leasing
|
$
|
10.9
|
|
|
$
|
10.6
|
|
|
$
|
11.2
|
|
|
$
|
10.7
|
|
Development and Sales
2
|
2.4
|
|
|
(0.7
|
)
|
|
4.6
|
|
|
38.1
|
|
||||
Less amounts reported in discontinued operations
1
|
(8.2
|
)
|
|
(3.8
|
)
|
|
(11.8
|
)
|
|
(12.9
|
)
|
||||
Materials and Construction
4
|
—
|
|
|
—
|
|
|
—
|
|
|
2.9
|
|
||||
Agribusiness
|
3.8
|
|
|
8.3
|
|
|
2.2
|
|
|
(3.6
|
)
|
||||
Total operating profit
|
8.9
|
|
|
14.4
|
|
|
6.2
|
|
|
35.2
|
|
||||
Interest expense
|
(3.6
|
)
|
|
(3.9
|
)
|
|
(4.2
|
)
|
|
(7.4
|
)
|
||||
General corporate expenses
|
(4.4
|
)
|
|
(3.7
|
)
|
|
(3.4
|
)
|
|
(5.9
|
)
|
||||
Grace acquisition costs
|
(1.0
|
)
|
|
(1.5
|
)
|
|
(2.0
|
)
|
|
(0.1
|
)
|
||||
Income (loss) from continuing operations before income taxes
|
(0.1
|
)
|
|
5.3
|
|
|
(3.4
|
)
|
|
21.8
|
|
||||
Income tax expense (benefit)
3
|
0.1
|
|
|
2.8
|
|
|
(0.3
|
)
|
|
8.5
|
|
||||
Income (loss) from continuing operations
3
|
(0.2
|
)
|
|
2.5
|
|
|
(3.1
|
)
|
|
13.3
|
|
||||
Income from discontinued operations (net of income taxes)
|
5.0
|
|
|
2.3
|
|
|
7.2
|
|
|
7.8
|
|
||||
Net income (loss)
3
|
4.8
|
|
|
4.8
|
|
|
4.1
|
|
|
21.1
|
|
||||
Income attributable to non-controlling interest
|
—
|
|
|
—
|
|
|
—
|
|
|
(0.5
|
)
|
||||
Net income (loss) attributable to A&B
3
|
$
|
4.8
|
|
|
$
|
4.8
|
|
|
$
|
4.1
|
|
|
$
|
20.6
|
|
1
|
Amounts recast to reflect discontinued operations.
|
2
|
The Real Estate Development and Sales segment operating profit includes a non-cash impairment loss of
$6.3 million
in the third quarter of 2013 related to the consolidation of The Shops at Kukui'ula.
|
3
|
Income tax expense (benefit) for the first quarter of 2014 was revised to remove an out-of-period tax adjustment of
$1.6 million
related to 2013. Income tax expense (benefit) for the quarterly periods in 2013 were increased by
$0.2 million
,
$0.2 million
,
$0.3 million
, and
$1.9 million
related to the immaterial revisions (see Note 1).
|
4
|
Grace results are included from its acquisition date, October 1, 2013.
|
•
|
Pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of assets of the company;
|
•
|
Provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with accounting principles generally accepted in the United States of America, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and
|
•
|
Provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of the company’s assets that could have a material effect on the financial statements.
|
•
|
recruit additional qualified personnel;
|
•
|
provide additional training and education for tax and accounting staff; and
|
•
|
retain outside consultants to identify and assist with implementation of enhanced tax accounting processes and related internal control procedures, including the enhancement of documentation related to all deferred tax items.
|
(in millions)
|
|
Initial Cost
|
Costs Capitalized Subsequent to Acquisition
|
Gross Amounts at Which Carried at Close of Period
|
|
|
|
||||||||||||||||||||||
Description
|
Encum-
brances (1) |
Land
|
Buildings
and Improvements |
Improvements
|
Carrying Costs
|
Land
|
Buildings
and Improvements |
Total (2)
|
Accumulated
Depreciation (3) |
Date of
Construction |
Date
Acquired/ Completed |
||||||||||||||||||
Real Estate Leasing Segment
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||
Industrial:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||
Kailua Industrial/Other (HI)
|
$
|
—
|
|
$
|
10.5
|
|
$
|
2.0
|
|
$
|
—
|
|
$
|
—
|
|
$
|
10.5
|
|
$
|
2.0
|
|
$
|
12.5
|
|
$
|
(0.1
|
)
|
Various
|
2013
|
Kaka'ako Commerce Center (HI)
|
—
|
|
16.9
|
|
20.6
|
|
—
|
|
—
|
|
16.9
|
|
20.6
|
|
37.5
|
|
—
|
|
1969
|
2014
|
|||||||||
Komohana Industrial Park (HI)
|
—
|
|
25.2
|
|
10.8
|
|
0.4
|
|
—
|
|
25.2
|
|
11.2
|
|
36.4
|
|
(1.4
|
)
|
1990
|
2010
|
|||||||||
P&L Warehouse (HI)
|
—
|
|
—
|
|
—
|
|
1.1
|
|
—
|
|
—
|
|
1.1
|
|
1.1
|
|
(0.6
|
)
|
1970
|
1970
|
|||||||||
Port Allen (HI)
|
—
|
|
—
|
|
0.7
|
|
1.9
|
|
—
|
|
—
|
|
2.6
|
|
2.6
|
|
(1.8
|
)
|
1985, 1993
|
1983-1993
|
|||||||||
Waipio Industrial (HI)
|
—
|
|
19.6
|
|
7.7
|
|
0.2
|
|
—
|
|
19.6
|
|
7.9
|
|
27.5
|
|
(1.3
|
)
|
1988, 1989
|
2009
|
|||||||||
Midstate Hayes (CA)
|
8.3
|
|
2.7
|
|
29.6
|
|
1.2
|
|
—
|
|
2.7
|
|
30.8
|
|
33.5
|
|
(5.2
|
)
|
2002-2008
|
2008
|
|||||||||
Sparks Business Center (NV)
|
—
|
|
3.2
|
|
17.2
|
|
3.0
|
|
—
|
|
3.2
|
|
20.2
|
|
23.4
|
|
(7.3
|
)
|
1996-1998
|
2002
|
|||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Office:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Judd Building (HI)
|
—
|
|
1.0
|
|
2.1
|
|
1.1
|
|
—
|
|
1.0
|
|
3.2
|
|
4.2
|
|
(1.3
|
)
|
1898, 1979
|
2000
|
|||||||||
Kahului Office Building (HI)
|
—
|
|
1.0
|
|
0.4
|
|
5.4
|
|
—
|
|
1.0
|
|
5.8
|
|
6.8
|
|
(6.6
|
)
|
1974
|
1989
|
|||||||||
Kahului Office Center (HI)
|
—
|
|
—
|
|
—
|
|
5.6
|
|
—
|
|
—
|
|
5.6
|
|
5.6
|
|
(3.3
|
)
|
1991
|
1991
|
|||||||||
Lono Center (HI)
|
—
|
|
—
|
|
1.4
|
|
0.9
|
|
—
|
|
—
|
|
2.3
|
|
2.3
|
|
(1.3
|
)
|
1973
|
1991
|
|||||||||
Maui Clinic Building (HI)
|
—
|
|
—
|
|
—
|
|
0.5
|
|
—
|
|
—
|
|
0.5
|
|
0.5
|
|
(0.1
|
)
|
1958
|
2013
|
|||||||||
Mililani South (HI)
|
—
|
|
7.0
|
|
3.5
|
|
0.8
|
|
—
|
|
7.0
|
|
4.3
|
|
11.3
|
|
(0.3
|
)
|
1992, 2006
|
2012
|
|||||||||
Stangenwald Building (HI)
|
—
|
|
1.8
|
|
1.0
|
|
1.2
|
|
—
|
|
1.8
|
|
2.2
|
|
4.0
|
|
(0.7
|
)
|
1901, 1980
|
1996
|
|||||||||
1800 and 1820 Preston Park (TX)
|
—
|
|
4.5
|
|
19.9
|
|
4.7
|
|
—
|
|
4.5
|
|
24.6
|
|
29.1
|
|
(6.0
|
)
|
1997, 1998
|
2006
|
|||||||||
2868 Prospect Park (CA)
|
—
|
|
2.9
|
|
18.1
|
|
9.3
|
|
—
|
|
2.9
|
|
27.4
|
|
30.3
|
|
(12.6
|
)
|
1998
|
1998
|
|||||||||
2890 Gateway Oaks (CA)
|
—
|
|
1.7
|
|
10.8
|
|
1.7
|
|
—
|
|
1.7
|
|
12.5
|
|
14.2
|
|
(2.9
|
)
|
1999
|
2006
|
|||||||||
Concorde Commerce Center (AZ)
|
—
|
|
3.9
|
|
20.9
|
|
5.9
|
|
—
|
|
3.9
|
|
26.8
|
|
30.7
|
|
(5.4
|
)
|
1998
|
2006
|
|||||||||
Deer Valley Financial Center (AZ)
|
—
|
|
3.4
|
|
19.2
|
|
2.9
|
|
—
|
|
3.4
|
|
22.1
|
|
25.5
|
|
(6.2
|
)
|
2001
|
2005
|
|||||||||
Ninigret Office X and XI (TX)
|
—
|
|
3.1
|
|
17.7
|
|
3.0
|
|
—
|
|
3.1
|
|
20.7
|
|
23.8
|
|
(6.1
|
)
|
1999, 2002
|
2006
|
|||||||||
San Pedro Plaza (TX)
|
—
|
|
4.6
|
|
11.9
|
|
8.2
|
|
—
|
|
4.6
|
|
20.1
|
|
24.7
|
|
(9.8
|
)
|
1985
|
1998, 2000
|
|||||||||
Union Bank (WA)
|
—
|
|
3.4
|
|
10.5
|
|
0.4
|
|
—
|
|
3.4
|
|
10.9
|
|
14.3
|
|
(1.2
|
)
|
1993, 2008
|
2011
|
|||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Retail:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Gateway at Mililani Mauka (HI)
|
—
|
|
5.0
|
|
4.7
|
|
7.2
|
|
—
|
|
5.0
|
|
11.9
|
|
16.9
|
|
(0.3
|
)
|
2006, 2013
|
2011
|
|||||||||
Kahului Shopping Center (HI)
|
—
|
|
—
|
|
—
|
|
2.5
|
|
—
|
|
—
|
|
2.5
|
|
2.5
|
|
(1.4
|
)
|
1951
|
1951
|
|||||||||
Kailua Grocery Anchored (HI)
|
11.2
|
|
54.4
|
|
49.3
|
|
0.4
|
|
—
|
|
54.4
|
|
49.7
|
|
104.1
|
|
(1.5
|
)
|
Various
|
2013
|
|||||||||
Kailua Retail Other (HI)
|
—
|
|
29.6
|
|
26.7
|
|
0.4
|
|
—
|
|
29.6
|
|
27.1
|
|
56.7
|
|
(0.9
|
)
|
Various
|
2013
|
|||||||||
Kaneohe Bay Shopping Ctr. (HI)
|
—
|
|
—
|
|
13.4
|
|
1.9
|
|
—
|
|
—
|
|
15.3
|
|
15.3
|
|
(5.0
|
)
|
1971
|
2001
|
|||||||||
Kunia Shopping Center (HI)
|
—
|
|
2.7
|
|
10.6
|
|
1.3
|
|
—
|
|
2.7
|
|
11.9
|
|
14.6
|
|
(3.4
|
)
|
2004
|
2002
|
|||||||||
Lahaina Square (HI)
|
—
|
|
4.6
|
|
3.7
|
|
0.3
|
|
—
|
|
4.6
|
|
4.0
|
|
8.6
|
|
(0.5
|
)
|
1973
|
2010
|
|||||||||
Lanihau Marketplace (HI)
|
—
|
|
9.4
|
|
13.2
|
|
1.0
|
|
—
|
|
9.4
|
|
14.2
|
|
23.6
|
|
(1.7
|
)
|
1987
|
2010
|
|||||||||
Napili Plaza (HI)
|
—
|
|
9.4
|
|
8.0
|
|
0.2
|
|
—
|
|
9.4
|
|
8.2
|
|
17.6
|
|
(0.5
|
)
|
1991
|
2003, 2013
|
|||||||||
Pearl Highlands Center (HI)
|
93.6
|
|
43.4
|
|
96.2
|
|
0.4
|
|
—
|
|
43.4
|
|
96.6
|
|
140.0
|
|
(3.8
|
)
|
1993
|
2013
|
|||||||||
Port Allen Marina Ctr. (HI)
|
—
|
|
—
|
|
3.4
|
|
1.1
|
|
—
|
|
—
|
|
4.5
|
|
4.5
|
|
(1.8
|
)
|
2002
|
1971
|
|||||||||
The Shops at Kukui'ula (HI)
|
40.5
|
|
8.9
|
|
30.1
|
|
0.3
|
|
—
|
|
8.9
|
|
30.4
|
|
39.3
|
|
(1.1
|
)
|
2009
|
2013
|
|||||||||
Waianae Mall (HI)
|
19.1
|
|
17.4
|
|
10.1
|
|
4.2
|
|
—
|
|
17.4
|
|
14.3
|
|
31.7
|
|
(0.7
|
)
|
1975
|
2013
|
|||||||||
Waipio Shopping Center (HI)
|
—
|
|
24.0
|
|
7.6
|
|
0.5
|
|
—
|
|
24.0
|
|
8.1
|
|
32.1
|
|
(1.1
|
)
|
1986-2004
|
2009
|
|||||||||
Little Cottonwood Center (UT)
|
—
|
|
12.2
|
|
9.1
|
|
1.0
|
|
—
|
|
12.2
|
|
10.1
|
|
22.3
|
|
(1.3
|
)
|
1998-2008
|
2010
|
|||||||||
Royal MacArthur Center (TX)
|
—
|
|
3.5
|
|
10.1
|
|
1.6
|
|
—
|
|
3.5
|
|
11.7
|
|
15.2
|
|
(2.5
|
)
|
2006
|
2007
|
|||||||||
Wilshire Shopping Center (CO)
|
—
|
|
1.3
|
|
1.3
|
|
0.4
|
|
—
|
|
1.3
|
|
1.7
|
|
3.0
|
|
(0.9
|
)
|
1970
|
1997
|
|||||||||
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||
Other:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||
Oahu Ground Leases (HI)
|
—
|
|
187.7
|
|
0.6
|
|
—
|
|
—
|
|
187.7
|
|
0.6
|
|
188.3
|
|
—
|
|
|
2013
|
|||||||||
Other miscellaneous investments
|
—
|
|
18.6
|
|
1.3
|
|
12.6
|
|
—
|
|
18.6
|
|
13.9
|
|
32.5
|
|
(10.6
|
)
|
|
|
|||||||||
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||
Total
|
$
|
172.7
|
|
$
|
548.5
|
|
$
|
525.4
|
|
$
|
96.7
|
|
$
|
—
|
|
$
|
548.5
|
|
$
|
622.1
|
|
$
|
1,170.6
|
|
$
|
(120.5
|
)
|
|
|
(1)
|
See Note 9 to consolidated financial statements.
|
(2)
|
The aggregate tax basis, as of December 31, 2014, for the Real Estate Leasing segment and Real Estate Development and Sales segment assets was approximately $
632.3
million, including the outside tax basis of consolidated joint venture investments.
|
(3)
|
Depreciation is computed based upon the following estimated useful lives:
|
Reconciliation of Real Estate (in millions)
|
2014
|
|
2013
|
|
2012
|
||||||
Balance at beginning of year
|
$
|
1,402.1
|
|
|
$
|
1,022.0
|
|
|
$
|
998.5
|
|
Additions and improvements
|
57.0
|
|
|
758.5
|
|
|
63.2
|
|
|||
Impairments
|
—
|
|
|
—
|
|
|
(5.1
|
)
|
|||
Dispositions, retirements and other adjustments
|
(62.0
|
)
|
|
(378.4
|
)
|
|
(34.6
|
)
|
|||
Balance at end of year
|
$
|
1,397.1
|
|
|
$
|
1,402.1
|
|
|
$
|
1,022.0
|
|
Reconciliation of Accumulated Depreciation (in millions)
|
2014
|
|
2013
|
|
2012
|
||||||
Balance at beginning of year
|
$
|
116.9
|
|
|
$
|
133.8
|
|
|
$
|
115.9
|
|
Depreciation expense
|
19.2
|
|
|
19.5
|
|
|
18.3
|
|
|||
Dispositions, retirements and other adjustments
|
(15.6
|
)
|
|
(36.4
|
)
|
|
(0.4
|
)
|
|||
Balance at end of year
|
$
|
120.5
|
|
|
$
|
116.9
|
|
|
$
|
133.8
|
|
|
|
ALEXANDER & BALDWIN, INC.
|
|
|
(Registrant)
|
|
|
|
|
|
|
Date: March 9, 2015
|
|
By: /s/ Stanley M. Kuriyama
|
|
|
Stanley M. Kuriyama, Chairman of the Board
|
|
|
and Chief Executive Officer
|
Signature
|
|
Title
|
|
Date
|
|
|
|
|
|
/s/ Stanley M. Kuriyama
|
|
Chairman of the Board
|
|
March 9, 2015
|
Stanley M. Kuriyama
|
|
and Chief Executive Officer
|
|
|
|
|
|
|
|
/s/ Paul K. Ito
|
|
Senior Vice President,
|
|
March 9, 2015
|
Paul K. Ito
|
|
Chief Financial Officer, Treasurer and Controller
|
|
|
|
|
|
|
|
/s/ W. Allen Doane
|
|
Director
|
|
March 9, 2015
|
W. Allen Doane
|
|
|
|
|
|
|
|
|
|
/s/ Robert S. Harrison
|
|
Director
|
|
March 9, 2015
|
Robert S. Harrison
|
|
|
|
|
|
|
|
|
|
/s/ David C. Hulihee
|
|
Director
|
|
March 9, 2015
|
David C. Hulihee
|
|
|
|
|
|
|
|
|
|
/s/ Charles G. King
|
|
Director
|
|
March 9, 2015
|
Charles G. King
|
|
|
|
|
|
|
|
|
|
/s/ Douglas M. Pasquale
|
|
Director
|
|
March 9, 2015
|
Douglas M. Pasquale
|
|
|
|
|
|
|
|
|
|
/s/ Michele K. Saito
|
|
Director
|
|
March 9, 2015
|
Michele K. Saito
|
|
|
|
|
|
|
|
|
|
/s/ Jeffrey N. Watanabe
|
|
Lead Director
|
|
March 9, 2015
|
Jeffrey N. Watanabe
|
|
|
|
|
|
|
|
|
|
/s/ Eric K. Yeaman
|
|
Director
|
|
March 9, 2015
|
Eric K. Yeaman
|
|
|
|
|
|
|
1.
Section 3.1. Term
|
The Contract term is extended to include crop year 2014.
|
2.
Section 4.1. Quantity
|
The Contract shall additionally cover Seller’s crop year 2014.
|
3.
Section 8.2. Shipment
|
The shipment schedule of the crop year 2014 Benchmark Quantity shall be in accordance with Exhibit D, which is attached hereto and incorporated into this Amendment.
|
4.
Section 9.3. Pricing
|
The pricing of the crop year 2014 Benchmark Quantity shall be in accordance with Exhibit D, which is attached hereto and incorporated into this Amendment.
|
1.
|
Shipment
|
1.1
|
34,000 st – May 2014 Shipment
|
1.2
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34,000 st – July 2014 Shipment
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1.3
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34,000 st – September 2014 Shipment
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2.
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Pricing
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2.1
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For Shipment 1.1 above – the average of
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2.1.1
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405 lots of Seller’s Executable Orders vs May 2014 No16 less 0.45c/lb
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2.1.2
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101 lots of Seller’s Puts vs May 2014 No16 less 0.45c/lb
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2.1.3
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101 lots of Buyer’s Calls vs May 2014 No16 less 0.45c/lb
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2.2
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For Shipment 1.2 above – the average of
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2.2.1
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405 lots of Seller’s Executable Orders vs July 2014 No16 less 0.45c/lb
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2.2.2
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101 lots of Seller’s Puts vs July 2014 No16 less 0.45c/lb
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2.2.3
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101 lots of Buyer’s Calls vs July 2014 No16 less 0.45c/lb
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2.3
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For Shipment 1.3 above - the average of
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2.3.1
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405 lots of Seller’s Executable Orders vs September 2014 No16 less 0.45c/lb
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2.3.2
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101 lots of Seller’s Puts vs September 2014 No16 less 0.45c/lb
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2.3.3
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101 lots of Buyer’s Calls vs September 2014 No16 less 0.45c/lb
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1.
Section 3.1. Term
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The following language is added to Section 3.1: “The Contract term is extended to include crop years 2015, 2016, and 2017.”
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2.
Section 4.1. Quantity
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The following language is added to Section 4.1: “The Contract shall additionally cover Seller’s crop years 2015, 2016, and 2017.”
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3.
Section 4.2 Quantity
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The following language is added to Section 4.2: “Seller shall deliver a minimum of 100,000 commercial tons (ct) per crop year.”
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4.
Section 4.3 Quantity
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Section 4.3 is deleted in its entirety.
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5.
Section 4.4 Quantity
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Section 4.4 is deleted in its entirety.
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6.
Section 5.1 Quality
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The following language is added to Section 5.1: “The quality of the Sugar shall be the average of Seller’s lab results, Buyer’s internal lab results, and the Markey & Sons’ independent results. The cost for the Markey & Sons’ results shall be shared equally between Buyer and Seller.”
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7.
Section 6.1 Substitution.
8.
Section 8.1 Shipment
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For Section 6.1, the words “grown in the United States” is inserted before the words “from a third party” in the first sentence.
Section 8.1 is deleted in its entirety and replaced as follows: “Shipments shall be in cargos (“Cargos”) as determined by Seller in its sole discretion, provided that there is a minimum of 25,536 ct per voyage (456 lots) and no more than 33,992 ct per voyage (607 lots), with up to 7 voyages per crop year.”
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9.
Section 8.2. Shipment
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Section 8.2 is deleted in its entirety and replaced as follows: “Seller shall declare voyages at least four (4) months in advance of the earlier of (i) the expected delivery or (ii) the beginning of the relevant contract month available under the Intercontinental Exchange (ICE) Futures U.S. Sugar No. 16 market. Seller shall have the right to declare voyages up to eighteen (18) months in advance of the expected delivery. Seller may cancel voyages with at least four (4) months’ prior written notice to Buyer. In the event Seller declares cancellation of any previously priced tonnage on a timely manner, any existing futures priced between Buyer and Seller for that previously priced tonnage shall be washed out. To the extent that the existing priced futures are ‘in the money’ at the time of Seller’s declaration of cancellation, the profit derived from the washout shall be shared equally by Buyer and Seller. To the extent that the existing priced futures are ‘out of the money’ at the time of Seller’s declaration of cancellation, the costs shall be at Seller’s expense.”
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10.
Section 8.3 Shipment
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Section 8.3 is deleted in its entirety.
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11.
Section 9.1 Pricing
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The references to the “appropriate discount as defined in section 9.2” are deleted. The last sentence of Section 9.1 is deleted in its entirety. For Moku Pahu voyage 320 scheduled for May 2015 and Moku Pahu voyage 321 scheduled for July 2015, Seller and Buyer agree to a fixed price of 26.25c/lb (total amount of Sugar is approximately 607 lots).
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12.
Section 9.2 Pricing
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Section 9.2 is deleted in its entirety.
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13.
Section 11.3 Stevedoring
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The following language is added to Section 11.3: “Notwithstanding the foregoing, for crop years 2015, 2016, and 2017, actual stevedoring charges shall be paid by Buyer and an allowance for stevedoring shall be charged to Seller at the rate of $15.00 per long ton of 2,240 pounds.”
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Participant
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_________________________
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Award Date:
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______________, 20__
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Performance Share Units:
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The actual number of shares of Common Stock that may become issuable pursuant to this Award shall be determined in accordance with the performance-vesting provisions of attached Schedule I and the service-vesting provisions of the attached form Performance Share Unit Award Agreement. For purposes of the applicable calculations under those vesting provisions, the number of shares of Common Stock to be utilized is
shares (the “Performance Share Units”).
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Vesting Schedule:
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The number of shares of Common Stock which may actually vest and become issuable pursuant to the Award shall be determined pursuant to a two-step process: (i) first there shall be calculated the maximum number of shares of Common Stock in which Participant can vest as a result of the level at which each of the Performance Goals specified on attached Schedule I is in fact attained and (ii) then the number of shares calculated under clause (i) in which Participant may actually vest shall be determined on the basis of his or her satisfaction of the applicable Service vesting requirements set forth in the attached form Performance Share Unit Award Agreement.
Performance Vesting
: Attached Schedule I specifies the two Performance Goals and Performance Period established for this Award. For each Performance Goal, there are three designated levels of attainment set forth in Schedule I: Threshold, Target and Extraordinary. The Performance Shares Units designated for this Award are hereby allotted fifty percent (50%) to each Performance Goal. Within sixty (60) days after the completion of the Performance Period, the Plan Administrator shall determine and certify the actual level of attainment for each Performance Goal and shall then measure that level of attainment against the Threshold, Target and Extraordinary Levels set forth for that Performance Goal in attached Schedule I. The maximum number of shares in which Participant can vest based upon the actual level of attainment of each Performance Goal shall be determined by applying the corresponding percentage below for that level of attainment to the number of Performance Share Units allotted to that particular Performance Goal in accordance with the foregoing allocations (the “Allotted Performance Share Units”):
Attainment below the Threshold Level: 0% of the Allotted Performance Share Units
Attainment at the Threshold Level: 35% of the Allotted Performance Share Units
Attainment at the Target Level: 100% of the Allotted Performance Share Units
Attainment at Extraordinary Level: 150% of the Allotted Performance Share Units
To the extent the actual level of attainment of a Performance Goal is at a point between the Threshold and Target Levels, the maximum number of shares allotted to that Performance Goal in which Participant can vest shall be pro-rated between the two points on a straight line basis in accordance with the payout slope set forth in attached Schedule I.
To the extent the actual level of attainment of a Performance Goal is at a point between the Target and Extraordinary Levels, the maximum number of shares allotted to that Performance Goal in which Participant can vest shall be pro-rated between the two points on a straight line basis in accordance with the payout slope set forth in attached Schedule I.
The maximum number of shares of Common Stock in which Participant can vest in the aggregate on the basis of the actual level of attainment of both Performance Goals shall be hereinafter designated the “Performance- Qualified Shares” and shall in no event exceed in the aggregate 150% of the number of Performance Share Units set forth above.
Service Vesting.
The number of Performance-Qualified Shares in which Participant actually vests shall be determined on the basis of his or her satisfaction of the Service-vesting requirements set forth in Paragraph 3 of the attached form Performance Share Unit Agreement.
Resulting Shares.
Each Performance-Qualified Share in which Participant vests in accordance with the applicable performance-vesting and service-vesting provisions of this Award shall entitle such Participant to receive one share of Common Stock on the designated issuance date for that share determined in accordance with the provisions of the attached Performance Share Unit Award Agreement.
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ALEXANDER & BALDWIN, INC.
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By:
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Title:
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Address:
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Perce
ntile
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Percentage of Performance Share Units Allotted to the Performance Goal in which Participant may vest*
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<35th
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0
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%
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35th
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35
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%
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45th
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67.5
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%
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55th
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100
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%
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65th
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125
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%
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75th
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150
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%
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Name of Subsidiary
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State or Other Jurisdiction
Under Which Organized
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/s/ Stanley M. Kuriyama
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Name:
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Stanley M. Kuriyama
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Title:
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President and Chief Executive Officer
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Date:
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March 9, 2015
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/s/ Paul K. Ito
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Name:
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Paul K. Ito
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Title:
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Senior Vice President, Chief Financial Officer, Controller and Treasurer
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Date:
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March 9, 2015
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Total Number of S&S Citations
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4
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Mine Act § 104(b) Orders
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0
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Mine Act § 104(d) Citations and Orders
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0
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Mine Act § 110(b)(2) Violations
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0
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Mine Act § 107(a) Orders
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0
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Total Dollar Value of Proposed MSHA Assessments
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$462
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Total Number of Mining Related Fatalities
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0
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Received Written Notice of Pattern of Violation under Mine Act §104(e) (yes/no)
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No
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Received Written Notice of Potential to Have Pattern under Mine Act §104(e) (yes/no)
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No
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