Hawai`i
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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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Emerging growth company
o
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Page
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Items 1 & 2.
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Business and Properties by Business Segments
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A.
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Commercial Real Estate
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B.
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Land Operations
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(1)
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Landholdings
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(2)
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Development-for-sale Projects
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(3)
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Renewable Energy
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C.
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Materials & Construction
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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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•
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Commercial Real Estate ("CRE"):
includes leasing, property management, redevelopment and development-for-hold activities. Significant assets include improved commercial real estate and urban ground leases. Income from this segment is principally generated by leasing and operating real estate assets.
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Land Operations:
includes planning, zoning, financing, constructing, purchasing, managing, selling, and investing in real property; leasing agricultural land; renewable energy; and diversified agribusiness. Primary assets include landholdings, renewable energy assets (investments in hydroelectric and solar facilities and power purchase agreements) and development projects. Income from this segment is principally generated by renewable energy operations, agricultural leases, select farming operations, development sales and fees, and parcel sales.
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•
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Materials & Construction ("M&C"):
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. Assets include two grade A (prime) rock quarries, an asphalt storage terminal, hot mix asphalt plants and quarry and paving equipment. Income is generated principally by materials supply and paving construction.
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Growing recurring income streams from its commercial real estate portfolio;
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Employing landholdings at their highest and best use, including for diversified agribusiness purposes;
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Entitling, planning, developing and selling real estate;
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Leveraging its strong Materials & Construction's market position and vertical integration to increase earnings and cash flow; and
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Continuing to practice disciplined and prudent financial management to maintain balance sheet strength and financial flexibility.
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Grow income and optimize returns on A&B’s commercial portfolio by:
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◦
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Developing new properties for hold and redevelop properties that provide an appropriate risk adjusted return on capital invested and are accretive to the Company’s value;
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Being the landlord of choice by providing desirable locations, quality properties, landlord services and community amenities;
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Leveraging internal property management to efficiently manage operations and maximize cash returns;
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Executing effective marketing and leasing strategies that attract quality tenants in the marketplace and new tenants to Hawai`i by leveraging our position as the largest owner of grocery/drug anchored shopping centers in Hawai`i; and
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Selectively acquire retail and industrial properties within desirable Hawaiian markets at returns that exceed the Company’s risk adjusted cost of capital.
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Evaluate other commercial property investment opportunities, such as leased fee assets or other commercial real estate types, when the acquisitions are strategically consistent with the value creation objectives of the Company.
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Complete the Migration Strategy primarily through the sale of mainland assets and tax efficient reinvestment of proceeds into strategically appropriate commercial real estate assets in Hawai`i.
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Actively market and sell available development inventory;
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Entitle certain Hawai`i lands to respond to market demand while meeting community needs;
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Monetize development assets when appropriate to manage risk and return;
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Undertake opportunistic development of fully entitled land while limiting investment risk and capital commitment through joint venture structures and selective monetization;
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Emphasize short-term developments as compared with the Company’s historical long-term, master-planned community approach; and
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Maintain a disciplined approach to risk management that includes careful assessment of market conditions/risks, prudent structuring of transactions, and maintaining fiscal discipline.
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Operate and maintain infrastructure, including roads, irrigation ditches and power distribution systems, among others;
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Pursue select diversified agricultural operations;
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Lease land to diversified agricultural producers;
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Advance crop, livestock and bioenergy initiatives through trials to commercial operations, as merited; and
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Maintain access to irrigation water to support current and future diversified agriculture activities.
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Enhancing sales efforts to increase the volume of third party aggregate sales, taking advantage of the availability of high quality materials and the strategic location of the quarry;
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Optimizing labor management to reduce the variable costs of paving operations;
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Implementing state of the art information systems to improve cost management and contract bidding; and
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Positioning the Company for the anticipated increases in State and Federal contracts later in 2018.
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Target a 5x to 6x net debt to EBITDA ratio;
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Ensure well-laddered debt maturities and minimize near term maturing debt;
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Maintain a high proportion of fixed-rate debt and longer weighted-average maturity;
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Maintain a large unencumbered portfolio of assets; and
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Maintain a disciplined capital allocation strategy with a focus on investments that have attractive risk-adjusted returns relative to the Company’s internal cost of capital.
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($ in thousands)
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Cash NOI by Geography and Type
1
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Cash NOI as a % of Total Cash NOI
1
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Hawai`i
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Mainland
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Total
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Hawai`i
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Mainland
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Total
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Retail
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$
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45,729
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$
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2,255
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$
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47,984
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53.9%
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2.7%
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56.6%
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Industrial
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12,032
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4,455
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16,487
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14.2%
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5.2%
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19.4%
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Office
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4,368
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4,142
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8,510
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5.1%
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4.9%
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10.0%
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Ground
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11,835
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—
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11,835
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14.0%
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—%
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14.0%
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Total
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$
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73,964
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$
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10,852
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$
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84,816
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87.2%
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12.8%
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100.0%
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1
Refer to page 45 for a discussion of management's use of a non-GAAP financial measure and the required reconciliation of non-GAAP measures to GAAP measures.
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Expiration Year
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Number
of Leases |
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Square
Footage of Expiring Leases |
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% of Total
Portfolio Leased GLA |
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ABR
Expiring
($ in 000s)
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% of Total
Portfolio Expiring ABR |
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2018
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154
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530,808
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14.1%
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$
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9,523
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11.6%
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2019
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152
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634,441
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16.9%
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12,279
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14.9%
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2020
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143
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493,356
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13.2%
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11,297
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13.7%
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2021
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101
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477,561
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12.7%
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11,196
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13.6%
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2022
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102
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333,549
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8.9%
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9,498
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11.6%
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2023
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44
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225,549
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6.0%
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4,796
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5.8%
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2024
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16
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180,876
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4.8%
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4,617
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5.6%
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2025
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20
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58,050
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1.5%
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2,263
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2.8%
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2026
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13
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43,546
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1.2%
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1,918
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2.3%
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2027
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13
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135,756
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3.6%
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3,370
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4.1%
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Thereafter
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19
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273,323
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7.2%
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5,574
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6.9%
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Month-to-month
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131
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371,021
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9.9%
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5,847
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7.1%
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Total
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908
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3,757,836
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100.0%
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$
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82,178
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100.0%
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Type
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Segment
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Maui
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Kauai
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Oahu
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Molokai
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Hawai`i Island
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Total
Hawai`i Acres |
Mainland
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Total Acres
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Land under commercial properties/ urban ground leases
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CRE
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96
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19
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184
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—
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15
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314
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81
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395
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Land in active development
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Development for sale
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Land Operations
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106
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—
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4
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—
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—
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110
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—
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110
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Development for hold
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CRE
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9
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—
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—
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—
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—
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9
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—
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9
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Other
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Land Operations
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81
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—
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—
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—
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—
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81
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—
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81
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Subtotal - Land in active development
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196
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—
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4
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—
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—
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200
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—
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200
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Land used in other operations
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Land Operations
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22
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20
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—
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—
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—
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42
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—
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42
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Urban land, not in active development/use
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Developable, with full or partial infrastructure
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Land Operations
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149
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7
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—
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—
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—
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156
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—
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156
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Developable, with limited or no infrastructure
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Land Operations
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186
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28
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—
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—
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—
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214
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—
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214
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Other
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Land Operations
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13
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7
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—
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—
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—
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20
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—
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20
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Subtotal - Urban land, not in active development
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348
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42
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—
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—
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—
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390
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—
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390
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Agriculture-related
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Agriculture
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Land Operations
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47,769
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6,358
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75
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—
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—
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54,202
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—
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54,202
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In urban entitlement process
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Land Operations
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357
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260
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—
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—
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—
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617
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—
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617
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Conservation & preservation
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Land Operations
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15,845
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13,309
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|
509
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—
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—
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29,663
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—
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29,663
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Subtotal - Agriculture-related
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63,971
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19,927
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584
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—
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—
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84,482
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—
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84,482
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Materials & Construction
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M&C
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1
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—
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541
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264
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—
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806
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—
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806
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Total Landholdings
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64,634
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20,008
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1,313
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264
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15
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86,234
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81
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86,315
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Joint Venture Projects
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Original Acres
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Acres at December 31, 2017
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Kukui'ula (Kauai, HI)
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1,010
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895
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California joint ventures
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75
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75
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Ka Milo (Big Island, HI)
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31
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8
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Keala o Wailea (Maui, HI)
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7
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7
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The Collection (Oahu, HI)
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3
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—
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Total
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1,126
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985
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•
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County amendment of the County Community/General Plan to reflect intended use;
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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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County approval to rezone the property to the precise land use desired.
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At the Keala o Wailea (MF-11) project, A&B’s 70 multi-family unit joint venture development with Armstrong Builders, sitework construction commenced in December 2015. As of
December 31, 2017
, 66 units were under binding contracts and closings commenced in the fourth quarter of 2017
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At the Ridge at Wailea (MF-19) project, 4 acres remain available for sale.
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our inability to secure sufficient financing or insurance on favorable terms, or at all;
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construction delays, defects, or cost overruns, which may increase project development costs;
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an increase in commodity or construction costs, including labor costs;
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the discovery of hazardous or toxic substances, or other environmental, culturally-sensitive, or related issues;
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an inability to obtain, or a significant delay in obtaining, zoning, construction, occupancy and other required governmental permits and authorizations;
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difficulty in complying with local, city, county and state rules and regulations regarding permitting, zoning, subdivision, utilities, water quality, as well as federal rules and regulations regarding air and water quality and protection of endangered species and their habitats;
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insufficient infrastructure capacity or availability (e.g., water, sewer and roads) to serve the needs of our projects;
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an inability to secure tenants necessary to support the project or maintain compliance with debt covenants;
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failure to achieve or sustain anticipated occupancy levels;
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condemnation of all or parts of development or operating properties, which could adversely affect the value or viability of such projects; and
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instability in the financial industry could reduce the availability of financing.
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a significant number of our tenants are unable to meet their obligations;
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increases in non-recoverable operating and ownership costs;
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we are unable to lease space at our properties when the space becomes available;
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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;
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the providing of lease concessions, such as free or discounted rents and tenant improvement allowances; and
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the discovery of hazardous or toxic substances, or other environmental, culturally-sensitive, or related issues at the property.
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our inability or that of buyers to secure sufficient financing or insurance on favorable terms, or at all;
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construction delays, defects, or cost overruns, which may increase project development costs;
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an increase in commodity or construction costs, including labor costs;
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the discovery of hazardous or toxic substances, or other environmental, culturally-sensitive, or related issues;
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an inability to obtain, or a significant delay in obtaining, zoning, construction, occupancy and other required governmental permits and authorizations;
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•
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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;
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insufficient infrastructure capacity or availability (e.g., water, sewer and roads) to serve the needs of our projects;
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an inability to secure buyers necessary to support the project or maintain compliance with debt covenants;
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failure to achieve or sustain anticipated sales levels;
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buyer defaults, including defaults under executed or binding contracts;
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•
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condemnation of all or parts of development or operating properties, which could adversely affect the value or viability of such projects;
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•
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an inability to sell our constructed inventory; and
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•
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instability in the financial industry could reduce the availability of financing.
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we may not have voting control over the joint venture;
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•
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we may not be able to maintain good relationships with our venture partners;
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the venture partner at any time may have economic or business interests that are inconsistent with our economic or business interests;
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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 us;
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the joint venture or venture partner could lose key personnel;
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•
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the venture partner could become insolvent, requiring us 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
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•
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we may be required to perform on guarantees we have provided or agree 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.
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•
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the extent to which management has properly understood and is able to manage the dynamics and demands of the various farming operations comprising the diversified agricultural model, in which we may have limited or no prior experience;
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•
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the ability to secure applicable permits and/or licenses from governmental agencies that may be necessary for executing the strategy;
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•
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the ability to respond to any unanticipated changes in expected cash flows, liquidity, cash needs and cash expenditures with respect to the new diversified model, including our ability to obtain any additional financing or other liquidity enhancing transactions, if and when needed;
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•
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the ability to execute strategic initiatives in a cost-effective manner, including identifying business partners to explore potential opportunities; and
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•
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our ability to access adequate, affordable and uninterrupted sources of water (see the “The lack of water for agricultural irrigation could adversely affect the operations and profitability of the Land Operations segment” risk factor below).
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•
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decreased government funding for infrastructure projects (see the “Economic downturns or reductions in government funding of infrastructure projects could reduce our revenues and profits from our materials and construction businesses.” risk factor below);
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•
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reduced spending by private sector customers resulting from poor economic conditions in Hawai`i;
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•
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an increased number of competitors;
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•
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less success in competitive bidding for contracts;
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•
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a decline in transportation and logistical costs, which may result in customers purchasing material from sources located outside of Hawai`i in a more cost-efficient manner;
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•
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limitations on access to necessary working capital and investment capital to sustain growth; and
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•
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inability to hire and retain essential personnel and to acquire equipment to support growth.
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Dividends Paid Per Share
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Market Price
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||||||||||||
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High
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Low
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Close
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||||||||
2016
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|
|
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||||||||
First Quarter
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$
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0.06
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|
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$
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37.83
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|
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$
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28.82
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$
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36.68
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Second Quarter
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$
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0.06
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$
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39.36
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$
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32.94
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|
|
$
|
36.14
|
|
Third Quarter
|
$
|
0.06
|
|
|
$
|
42.80
|
|
|
$
|
35.12
|
|
|
$
|
38.42
|
|
Fourth Quarter
|
$
|
0.07
|
|
|
$
|
46.43
|
|
|
$
|
36.98
|
|
|
$
|
44.87
|
|
|
|
|
|
|
|
|
|
||||||||
2017
|
|
|
|
|
|
|
|
||||||||
First Quarter
|
$
|
0.07
|
|
|
$
|
46.27
|
|
|
$
|
40.78
|
|
|
$
|
44.52
|
|
Second Quarter
|
$
|
0.07
|
|
|
$
|
46.87
|
|
|
$
|
39.53
|
|
|
$
|
41.38
|
|
Third Quarter
|
$
|
0.07
|
|
|
$
|
46.67
|
|
|
$
|
40.58
|
|
|
$
|
46.33
|
|
Fourth Quarter
|
$
|
15.92
|
|
|
$
|
46.96
|
|
|
$
|
27.50
|
|
|
$
|
27.74
|
|
Plan Category
|
Number of securities to be issued upon exercise of outstanding options, warrants and rights
|
Weighted-average exercise price of outstanding options, warrants and rights
|
Number of securities remaining available for future issuance under equity compensation plans (excluding securities reflected in column (a))
|
|
(a)
1
|
(b)
1
|
(c)
2
|
Equity compensation plans approved by security holders
|
630,500
|
$12.58
|
1,064,838
|
Total
|
630,500
|
$12.58
|
1,064,838
|
Issuer Purchases of Equity Securities
|
||||
Period
|
Total Number of
Shares Purchased 1 |
Average Price
Paid per Share |
Total Number of
Shares Purchased as Part of Publicly Announced Plans or Programs |
Maximum Number
of Shares that May Yet Be Purchased Under the Plans or Programs |
October 1-31, 2017
|
1,672
|
$45.24
|
—
|
—
|
November 1-30, 2017
|
—
|
$—
|
—
|
—
|
December 1-31, 2017
|
256,928
|
$28.72
|
—
|
—
|
|
Year Ended December 31,
|
||||||||||||||||||
(In millions, except per share amounts)
|
2017
|
|
2016
|
|
2015
|
|
2014
|
|
2013
1
|
||||||||||
Consolidated statements of operations data
2
:
|
|
|
|
|
|
|
|
|
|
||||||||||
Operating Revenue:
|
|
|
|
|
|
|
|
|
|
||||||||||
Commercial Real Estate
|
$
|
136.9
|
|
|
$
|
134.7
|
|
|
$
|
133.6
|
|
|
$
|
125.3
|
|
|
$
|
78.5
|
|
Land Operations
|
84.5
|
|
|
61.9
|
|
|
120.2
|
|
|
96.7
|
|
|
104.7
|
|
|||||
Materials & Construction
|
204.1
|
|
|
190.9
|
|
|
219.0
|
|
|
234.3
|
|
|
54.9
|
|
|||||
Total Operating Revenue
|
425.5
|
|
|
387.5
|
|
|
472.8
|
|
|
456.3
|
|
|
238.1
|
|
|||||
Operating Costs and Expenses:
|
|
|
|
|
|
|
|
|
|
||||||||||
Cost of Commercial Real Estate
|
75.5
|
|
|
79.0
|
|
|
80.4
|
|
|
78.0
|
|
|
46.6
|
|
|||||
Cost of Land Operations
|
60.4
|
|
|
35.0
|
|
|
71.1
|
|
|
57.4
|
|
|
69.4
|
|
|||||
Cost of Materials & Construction
|
166.1
|
|
|
154.5
|
|
|
175.7
|
|
|
191.3
|
|
|
47.6
|
|
|||||
Selling, general and administrative
|
66.4
|
|
|
52.0
|
|
|
51.6
|
|
|
52.9
|
|
|
41.2
|
|
|||||
REIT evaluation/conversion costs
3
|
15.2
|
|
|
9.5
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Impairment of real estate assets
4
|
22.4
|
|
|
11.7
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Acquisition/ separation costs
5
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
4.6
|
|
|||||
Total operating costs and expenses
|
406.0
|
|
|
341.7
|
|
|
378.8
|
|
|
379.6
|
|
|
209.4
|
|
|||||
Operating Income
|
19.5
|
|
|
45.8
|
|
|
94.0
|
|
|
76.7
|
|
|
28.7
|
|
|||||
Income related to joint ventures
6
|
7.2
|
|
|
19.2
|
|
|
36.8
|
|
|
1.8
|
|
|
(2.3
|
)
|
|||||
Reductions in solar investments, net
7
|
(2.6
|
)
|
|
(9.8
|
)
|
|
(2.6
|
)
|
|
(14.7
|
)
|
|
—
|
|
|||||
Interest and other income, net
|
2.1
|
|
|
(1.7
|
)
|
|
(2.5
|
)
|
|
6.1
|
|
|
2.7
|
|
|||||
Interest expense, net
|
(25.6
|
)
|
|
(26.3
|
)
|
|
(26.8
|
)
|
|
(29.0
|
)
|
|
(19.1
|
)
|
|||||
Gain on insurance proceeds
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
2.4
|
|
|||||
Income from continuing operations before income taxes and net gain (loss) on sale of improved properties
|
0.6
|
|
|
27.2
|
|
|
98.9
|
|
|
40.9
|
|
|
12.4
|
|
|||||
Income tax benefit (expense)
7
|
218.2
|
|
|
0.5
|
|
|
(37.0
|
)
|
|
(4.1
|
)
|
|
(7.0
|
)
|
|||||
Income from continuing operations before net gain (loss) on sale of improved properties
|
218.8
|
|
|
27.7
|
|
|
61.9
|
|
|
36.8
|
|
|
5.4
|
|
|||||
Net gain (loss) on sale of improved properties, net of income taxes
8
|
9.3
|
|
|
5.0
|
|
|
(1.1
|
)
|
|
—
|
|
|
—
|
|
|||||
Income from continuing operations
|
228.1
|
|
|
32.7
|
|
|
60.8
|
|
|
36.8
|
|
|
5.4
|
|
|||||
Income (loss) from discontinued operations, net of tax
|
2.4
|
|
|
(41.1
|
)
|
|
(29.7
|
)
|
|
27.7
|
|
|
29.4
|
|
|||||
Net income (loss)
|
230.5
|
|
|
(8.4
|
)
|
|
31.1
|
|
|
64.5
|
|
|
34.8
|
|
|||||
Income attributable to noncontrolling interest
|
(2.2
|
)
|
|
(1.8
|
)
|
|
(1.5
|
)
|
|
(3.1
|
)
|
|
(0.5
|
)
|
|||||
Net income (loss) attributable to A&B
|
$
|
228.3
|
|
|
$
|
(10.2
|
)
|
|
$
|
29.6
|
|
|
$
|
61.4
|
|
|
$
|
34.3
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Capital expenditures
9,10,11
|
$
|
42.5
|
|
|
$
|
119.6
|
|
|
$
|
44.7
|
|
|
$
|
75.1
|
|
|
$
|
505.3
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Depreciation and amortization
11
|
$
|
41.4
|
|
|
$
|
119.5
|
|
|
$
|
55.7
|
|
|
$
|
55.0
|
|
|
$
|
41.7
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Earnings (loss) available to A&B shareholders per share:
|
|
|
|
|
|
|
|
|
|
||||||||||
Basic:
|
|
|
|
|
|
|
|
|
|
||||||||||
Continuing operations available to A&B Shareholders
|
$
|
4.63
|
|
|
$
|
0.66
|
|
|
$
|
1.15
|
|
|
$
|
0.69
|
|
|
$
|
0.11
|
|
Discontinued operations available to A&B Shareholders
|
0.05
|
|
|
(0.84
|
)
|
|
(0.61
|
)
|
|
0.57
|
|
|
0.66
|
|
|||||
Basic earnings per share available to A&B Shareholders
|
$
|
4.68
|
|
|
$
|
(0.18
|
)
|
|
$
|
0.54
|
|
|
$
|
1.26
|
|
|
$
|
0.77
|
|
Diluted:
|
|
|
|
|
|
|
|
|
|
||||||||||
Continuing operations available to A&B Shareholders
|
$
|
4.30
|
|
|
$
|
0.65
|
|
|
$
|
1.14
|
|
|
$
|
0.68
|
|
|
$
|
0.11
|
|
Discontinued operations available to A&B Shareholders
|
0.04
|
|
|
(0.83
|
)
|
|
(0.60
|
)
|
|
0.57
|
|
|
0.65
|
|
|||||
Diluted earnings per share available to A&B Shareholders
|
$
|
4.34
|
|
|
$
|
(0.18
|
)
|
|
$
|
0.54
|
|
|
$
|
1.25
|
|
|
$
|
0.76
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Cash dividends declared per common share
|
$
|
4.48
|
|
|
$
|
0.25
|
|
|
$
|
0.21
|
|
|
$
|
0.17
|
|
|
$
|
0.04
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
|
As of December 31,
|
||||||||||||||||||
(In millions)
|
2017
|
|
2016
|
|
2015
|
|
2014
|
|
2013
1
|
||||||||||
Consolidated balance sheet data:
|
|
|
|
|
|
|
|
|
|
||||||||||
Investment in real estate and joint ventures
|
$
|
1,557.5
|
|
|
$
|
1,573.9
|
|
|
$
|
1,564.6
|
|
|
$
|
1,639.9
|
|
|
$
|
1,606.8
|
|
Total assets
12
|
$
|
2,231.2
|
|
|
$
|
2,156.3
|
|
|
$
|
2,242.3
|
|
|
$
|
2,321.1
|
|
|
$
|
2,274.7
|
|
Total liabilities
12
|
$
|
1,572.1
|
|
|
$
|
932.3
|
|
|
$
|
1,003.6
|
|
|
$
|
1,107.3
|
|
|
$
|
1,108.2
|
|
Redeemable noncontrolling interest
|
$
|
8.0
|
|
|
$
|
10.8
|
|
|
$
|
11.6
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Total equity (includes noncontrolling interest)
|
$
|
651.1
|
|
|
$
|
1,213.2
|
|
|
$
|
1,227.1
|
|
|
$
|
1,213.8
|
|
|
$
|
1,166.5
|
|
Long-term debt – non-current
12
|
$
|
585.2
|
|
|
$
|
472.7
|
|
|
$
|
496.6
|
|
|
$
|
632.0
|
|
|
$
|
606.6
|
|
1
|
2013 includes the results, capital expenditures, and depreciation and amortization of Grace from the acquisition date of October 1, 2013 through December 31, 2013.
|
2
|
Amounts recast to reflect the adoption of Financial Accounting Standards Board Accounting Standards Update No. 2017-07,
Improving the Presentation of Net Periodic Pension Cost and Net Periodic Postretirement Benefit Cost
.
|
4
|
During the year ended
December 31, 2017
, the Company recorded impairments of
$22.4 million
related to three mainland commercial properties classified as held for sale as of
December 31, 2017
. During the year ended December 31, 2016, A&B recorded non-cash impairment charges of $11.7 million related to certain non-active, long-term development projects in its Land Operations segment.
|
6
|
Income (loss) related to joint ventures include non-cash impairment and equity losses as follows: (1) $5.1 million in 2016 related to certain joint venture development projects in the Land Operations segment and a surplus parcel held by an unconsolidated joint venture in the Materials & Construction segment, (2) $0.3 million related to the sale of Crossroads in 2014, and (3) $6.3 million in 2013 related to the consolidation of The Shops at Kukui`ula.
|
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
$20.8 million
,
$15.3 million
,
$7.2 million
,
$41.7 million
, and
$150.6 million
for
2017
,
2016
,
2015
,
2014
and 2013, respectively. Investments in real estate joint ventures were
$16.4 million
,
$20.8 million
,
$25.8 million
,
$28.7 million
, and
$22.2 million
in
2017
,
2016
,
2015
,
2014
and 2013, respectively.
|
12
|
Amounts recast to reflect the adoption of Financial Accounting Standards Update No. 2015-03,
Interest- Imputation of Interest (Subtopic 835-30), Simplifying the Presentation of Debt Issuance Costs
.
|
•
|
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 consolidated results of operations for the three years ended
December 31, 2017
,
2016
, and
2015
.
|
•
|
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 three years ended
December 31, 2017
,
2016
, and
2015
, 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, 2017
.
|
•
|
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.
|
•
|
Rounding:
Amounts in the MD&A are rounded to the nearest tenth of a million. Accordingly, a recalculation of totals and percentages, if based on the reported data, and may be slightly different.
|
(dollars in millions, except per share amounts)
|
2017
|
|
Change
|
|
2016
|
|
Change
|
|
2015
|
||||||
Operating revenue
|
$
|
425.5
|
|
|
9.8%
|
|
$
|
387.5
|
|
|
(18.0)%
|
|
$
|
472.8
|
|
Operating costs and expenses
|
406.0
|
|
|
18.8%
|
|
341.7
|
|
|
(9.8)%
|
|
378.8
|
|
|||
Operating income
|
19.5
|
|
|
(57.4)%
|
|
45.8
|
|
|
(51.3)%
|
|
94.0
|
|
|||
Other income (expense), net
|
(18.9
|
)
|
|
(1.6)%
|
|
(18.6
|
)
|
|
NM
|
|
4.9
|
|
|||
Income tax benefit (expense)
|
218.2
|
|
|
436X
|
|
0.5
|
|
|
NM
|
|
(37.0
|
)
|
|||
Net gain (loss) on the sale of improved property, net of income taxes
|
9.3
|
|
|
86.0%
|
|
5.0
|
|
|
NM
|
|
(1.1
|
)
|
|||
Income from continuing operations
|
228.1
|
|
|
7X
|
|
32.7
|
|
|
(46.2)%
|
|
60.8
|
|
|||
Discontinued operations (net of income taxes)
|
2.4
|
|
|
NM
|
|
(41.1
|
)
|
|
(38.4)%
|
|
(29.7
|
)
|
|||
Net income (loss)
|
230.5
|
|
|
NM
|
|
(8.4
|
)
|
|
NM
|
|
31.1
|
|
|||
Income attributable to noncontrolling interest
|
(2.2
|
)
|
|
(22.2)%
|
|
(1.8
|
)
|
|
(20.0)%
|
|
(1.5
|
)
|
|||
Net income (loss) attributable to A&B
|
$
|
228.3
|
|
|
NM
|
|
$
|
(10.2
|
)
|
|
NM
|
|
$
|
29.6
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Basic earnings (loss) per share - continuing operations
|
$
|
4.63
|
|
|
7X
|
|
$
|
0.66
|
|
|
(42.8)%
|
|
$
|
1.15
|
|
Basic earnings (loss) per share - discontinued operations
|
0.05
|
|
|
NM
|
|
(0.84
|
)
|
|
(37.7)%
|
|
(0.61
|
)
|
|||
Net income (loss) available to A&B shareholders
|
$
|
4.68
|
|
|
NM
|
|
$
|
(0.18
|
)
|
|
NM
|
|
$
|
0.54
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Diluted earnings (loss) per share - continuing operations
|
$
|
4.30
|
|
|
7X
|
|
$
|
0.65
|
|
|
(43.0)%
|
|
$
|
1.14
|
|
Diluted earnings (loss) per share - discontinued operations
|
0.04
|
|
|
NM
|
|
(0.83
|
)
|
|
(38.3)%
|
|
(0.60
|
)
|
|||
Net income (loss) available to A&B shareholders
|
$
|
4.34
|
|
|
NM
|
|
$
|
(0.18
|
)
|
|
NM
|
|
$
|
0.54
|
|
(dollars in millions)
|
2017
|
|
2016
|
|
Change
|
||||
Commercial Real Estate operating revenue
|
$
|
136.9
|
|
|
$
|
134.7
|
|
|
1.6%
|
Commercial Real Estate operating costs and expenses
|
(75.5
|
)
|
|
(79.0
|
)
|
|
4.4%
|
||
Selling, general and administrative
|
(6.8
|
)
|
|
(2.5
|
)
|
|
(172.0)%
|
||
Intersegment operating revenue, net
1
|
2.5
|
|
|
2.0
|
|
|
25.0%
|
||
Impairment of real estate assets
|
(22.4
|
)
|
|
—
|
|
|
NM
|
||
Other income/(expense), net
|
(0.3
|
)
|
|
(0.4
|
)
|
|
25.0%
|
||
Commercial Real Estate operating profit
|
$
|
34.4
|
|
|
$
|
54.8
|
|
|
(37.2)%
|
Operating profit margin
|
25.1%
|
|
40.7%
|
|
|
||||
Cash Net Operating Income ("Cash NOI")
2
|
|
|
|
|
|
||||
Hawai`i
|
$
|
74.0
|
|
|
$
|
69.8
|
|
|
6.0%
|
Mainland
|
10.9
|
|
|
13.2
|
|
|
(17.6)%
|
||
Total
|
$
|
84.8
|
|
|
$
|
83.0
|
|
|
2.2%
|
Same-Store Cash Net Operating Income ("Same-Store Cash NOI")
2
|
|
|
|
|
|
||||
Hawai`i
|
$
|
67.4
|
|
|
$
|
64.4
|
|
|
4.5%
|
Mainland
|
8.3
|
|
|
7.7
|
|
|
6.8%
|
||
Total
|
$
|
75.6
|
|
|
$
|
72.2
|
|
|
4.8%
|
Gross Leasable Area ("GLA") (million sq. ft.) - Improved (at year end)
|
|
|
|
|
|
||||
Hawai`i
|
3.0
|
|
|
2.9
|
|
|
|
||
Mainland
|
1.0
|
|
|
1.8
|
|
|
|
||
Total improved
|
4.0
|
|
|
4.7
|
|
|
|
||
Hawai`i ground leases (acres at year end)
|
117
|
|
|
106
|
|
|
|
Occupancy
|
|||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
As of December 31, 2017
|
|
As of December 31, 2016
|
|
Percentage Point Change
|
||||||
|
Hawai`i
|
Mainland
|
Total
|
|
Hawai`i
|
Mainland
|
Total
|
|
Hawai`i
|
Mainland
|
Total
|
Retail
|
93.1%
|
96.9%
|
93.4%
|
|
92.8%
|
96.1%
|
93.1%
|
|
0.3
|
0.8
|
0.3
|
Industrial
|
95.1%
|
100.0%
|
96.5%
|
|
96.6%
|
89.4%
|
92.5%
|
|
(1.5)
|
10.6
|
4.0
|
Office
|
89.1%
|
88.0%
|
88.3%
|
|
84.7%
|
90.5%
|
88.7%
|
|
4.4
|
(2.5)
|
(0.4)
|
Total
|
93.5%
|
94.1%
|
93.6%
|
|
93.4%
|
90.4%
|
92.2%
|
|
0.1
|
3.7
|
1.4
|
Same-Store Occupancy
|
|||||||||||
|
|
|
|
|
|
|
|||||
|
As of December 31, 2017
|
|
As of December 31, 2016
|
|
Percentage Point Change
|
||||||
|
Hawai`i
|
Mainland
|
Total
|
|
Hawai`i
|
Mainland
|
Total
|
|
Hawai`i
|
Mainland
|
Total
|
Retail
|
92.9%
|
96.9%
|
93.3%
|
|
92.5%
|
96.1%
|
92.9%
|
|
0.4
|
0.8
|
0.4
|
Industrial
|
95.3%
|
100.0%
|
96.7%
|
|
96.6%
|
100.0%
|
97.7%
|
|
(1.3)
|
—
|
(1.0)
|
Office
|
86.5%
|
88.0%
|
87.6%
|
|
87.7%
|
90.5%
|
89.8%
|
|
(1.2)
|
(2.5)
|
(2.2)
|
Total
|
93.3%
|
94.1%
|
93.5%
|
|
93.6%
|
95.1%
|
94.0%
|
|
(0.3)
|
(1.0)
|
(0.5)
|
Dispositions
|
|
Acquisitions
|
||||||||||
Date
|
|
Property
|
|
GLA
|
|
Date
|
|
Property
|
|
GLA
|
||
11/17
|
|
Midstate 99 Distribution Center
|
|
790,200
|
|
|
6/17
|
|
Honokohau Industrial
|
|
73,200
|
|
1/17
|
|
The Maui Clinic Building
|
|
16,600
|
|
|
|
|
|
|
|
|
|
|
Total dispositions
|
|
806,800
|
|
|
|
|
Total improved acquisitions
|
|
73,200
|
|
(dollars in millions)
|
2016
|
|
2015
|
|
Change
|
||||
Commercial Real Estate operating revenue
|
$
|
134.7
|
|
|
$
|
133.6
|
|
|
0.8%
|
Commercial Real Estate operating costs and expenses
|
(79.0
|
)
|
|
(80.4
|
)
|
|
1.7%
|
||
Selling, general and administrative
|
(2.5
|
)
|
|
(1.4
|
)
|
|
(78.6)%
|
||
Intersegment operating revenue, net
1
|
2.0
|
|
|
1.8
|
|
|
11.1%
|
||
Other income (expense), net
|
(0.4
|
)
|
|
(0.4
|
)
|
|
—%
|
||
Commercial Real Estate operating profit
|
$
|
54.8
|
|
|
$
|
53.2
|
|
|
3.0%
|
Operating profit margin
|
40.7%
|
|
39.8%
|
|
|
||||
Cash NOI
2
|
|
|
|
|
|
||||
Hawai`i
|
$
|
69.8
|
|
|
$
|
62.6
|
|
|
11.5%
|
Mainland
|
13.2
|
|
|
16.7
|
|
|
(21.0)%
|
||
Total
|
$
|
83.0
|
|
|
$
|
79.3
|
|
|
4.7%
|
GLA - Improved (at year end)
|
|
|
|
|
|
||||
Hawai`i
|
2.9
|
|
|
2.7
|
|
|
|
||
Mainland
|
1.8
|
|
|
2.2
|
|
|
|
||
Total improved
|
4.7
|
|
|
4.9
|
|
|
|
||
Hawai`i ground leases (acres at year end)
|
106
|
|
|
106
|
|
|
|
Dispositions
|
|
Acquisitions
|
||||||||||
Date
|
|
Property
|
|
GLA
|
|
Date
|
|
Property
|
|
GLA
|
||
6/16
|
|
Ninigret Office Park
|
|
185,500
|
|
|
12/16
|
|
2927 East Manoa Road (Ground Lease)
|
|
N/A
|
|
6/16
|
|
Gateway Oaks
|
|
59,700
|
|
|
1/16
|
|
Manoa Marketplace
|
|
139,300
|
|
6/16
|
|
Prospect Park
|
|
163,300
|
|
|
|
|
|
|
|
|
|
|
Total dispositions
|
|
408,500
|
|
|
|
|
Total improved acquisitions
|
|
139,300
|
|
|
|
2017
|
|
2016
|
|
2015
|
||||||
Commercial Real Estate Operating Profit
|
|
$
|
34.4
|
|
|
$
|
54.8
|
|
|
$
|
53.2
|
|
Plus: Depreciation and amortization
|
|
26.0
|
|
|
28.4
|
|
|
28.9
|
|
|||
Less: Straight-line lease adjustments
|
|
(1.6
|
)
|
|
(2.1
|
)
|
|
(2.3
|
)
|
|||
Plus: Lease incentive amortization
|
|
—
|
|
|
0.1
|
|
|
0.1
|
|
|||
Less: Favorable/(unfavorable) lease amortization
|
|
(2.9
|
)
|
|
(3.3
|
)
|
|
(3.6
|
)
|
|||
Less: Termination income
|
|
(1.7
|
)
|
|
(0.1
|
)
|
|
(0.7
|
)
|
|||
Plus: Other (income)/expense, net
|
|
0.3
|
|
|
0.4
|
|
|
(0.5
|
)
|
|||
Plus: Impairment of real estate assets
|
|
22.4
|
|
|
—
|
|
|
—
|
|
|||
Plus: Selling, general, administrative and other expenses
|
|
7.9
|
|
|
4.8
|
|
|
4.2
|
|
|||
Commercial Real Estate Cash NOI
|
|
$
|
84.8
|
|
|
$
|
83.0
|
|
|
$
|
79.3
|
|
(in millions)
|
2017
|
|
2016
|
|
2015
|
||||||
Development sales revenue
|
$
|
35.0
|
|
|
$
|
12.5
|
|
|
$
|
75.0
|
|
Unimproved/other property sales revenue
|
25.6
|
|
|
28.7
|
|
|
26.3
|
|
|||
Other operating revenues
1
|
23.9
|
|
|
20.7
|
|
|
18.9
|
|
|||
Total Land Operations operating revenue
|
84.5
|
|
|
61.9
|
|
|
120.2
|
|
|||
Operating expenses
|
(73.9
|
)
|
|
(46.3
|
)
|
|
(83.8
|
)
|
|||
Impairment of real estate assets
|
—
|
|
|
(11.7
|
)
|
|
—
|
|
|||
Earnings from joint ventures
|
3.3
|
|
|
15.1
|
|
|
30.2
|
|
|||
Reductions in solar investments, net
|
(2.6
|
)
|
|
(9.8
|
)
|
|
(2.6
|
)
|
|||
Interest and other income
|
2.9
|
|
|
(2.2
|
)
|
|
(2.3
|
)
|
|||
Total Land Operations operating profit
|
$
|
14.2
|
|
|
$
|
7.0
|
|
|
$
|
61.7
|
|
Land Operations operating profit margin
|
16.8%
|
|
11.3%
|
|
51.3%
|
1
|
Other operating revenues includes revenue related to trucking, renewable energy and diversified agriculture. In December 2016, the Company completed its final sugar harvest and ceased its sugar operations. The results of sugar operations have been presented within discontinued operations for all periods presented.
|
|
2017
|
|
2016
|
|
2015
|
||||||
Sugar operations revenue
|
$
|
22.9
|
|
|
$
|
98.4
|
|
|
$
|
97.7
|
|
Cost of sugar operations
|
22.5
|
|
|
87.5
|
|
|
124.6
|
|
|||
Operating income (loss) from sugar operations
|
0.4
|
|
|
10.9
|
|
|
(26.9
|
)
|
|||
Sugar operations cessation costs
|
(2.7
|
)
|
|
(77.6
|
)
|
|
(22.6
|
)
|
|||
Gain on asset dispositions
|
6.0
|
|
|
—
|
|
|
—
|
|
|||
Income (loss) from discontinued operations before income taxes
|
3.7
|
|
|
(66.7
|
)
|
|
(49.5
|
)
|
|||
Income tax (expense) benefit
|
(1.3
|
)
|
|
25.6
|
|
|
19.8
|
|
|||
Income (loss) from discontinued operations
|
$
|
2.4
|
|
|
$
|
(41.1
|
)
|
|
$
|
(29.7
|
)
|
(dollars in millions)
|
2017
|
|
2016
|
|
Change
|
||||
Materials & Construction operating revenue
|
$
|
204.1
|
|
|
$
|
190.9
|
|
|
6.9%
|
Operating profit
|
$
|
22.0
|
|
|
$
|
23.3
|
|
|
(5.6)%
|
Operating profit margin
|
10.8%
|
|
12.2%
|
|
|
||||
Depreciation and amortization
|
$
|
12.2
|
|
|
$
|
11.7
|
|
|
4.3%
|
Aggregate tons delivered (tons in thousands)
|
691.6
|
|
|
696.1
|
|
|
(0.6)%
|
||
Asphalt tons delivered (tons in thousands)
|
553.8
|
|
|
444.9
|
|
|
24.5%
|
||
Backlog
1,2
at period end
|
$
|
202.1
|
|
|
$
|
242.9
|
|
|
(16.8)%
|
(dollars in millions)
|
2016
|
|
2015
|
|
Change
|
||||
Materials & Construction operating revenue
|
$
|
190.9
|
|
|
$
|
219.0
|
|
|
(12.8)%
|
Operating profit
|
$
|
23.3
|
|
|
$
|
30.9
|
|
|
(24.6)%
|
Operating profit margin
|
12.2%
|
|
14.1%
|
|
|
||||
Depreciation and amortization
|
$
|
11.7
|
|
|
$
|
11.6
|
|
|
0.9%
|
Aggregate tons delivered (tons in thousands)
|
696.1
|
|
|
840.2
|
|
|
(17.2)%
|
||
Asphalt tons delivered (tons in thousands)
|
444.9
|
|
|
466.7
|
|
|
(4.7)%
|
||
Backlog at period end
|
$
|
242.9
|
|
|
$
|
226.5
|
|
|
7.2%
|
(in millions)
|
2017
|
|
2016
|
|
Change
|
||||
Commercial real estate property acquisitions/improvements
|
$
|
26.7
|
|
|
$
|
95.0
|
|
|
(71.9)%
|
Tenant improvements
|
6.1
|
|
|
3.8
|
|
|
60.5%
|
||
Quarrying and paving
|
6.3
|
|
|
9.3
|
|
|
(32.3)%
|
||
Agribusiness and other
|
3.4
|
|
|
8.0
|
|
|
(57.5)%
|
||
Total capital expenditures
1
|
$
|
42.5
|
|
|
$
|
116.1
|
|
|
(63.4)%
|
|
|
|
|
Payment due by period
|
||||||||||||||||
Contractual Obligations
|
|
Total
|
|
2018
|
|
2019-2020
|
|
2021-2022
|
|
Thereafter
|
||||||||||
Long-term debt obligations
|
(a)
|
$
|
631.8
|
|
|
$
|
41.8
|
|
|
$
|
80.9
|
|
|
$
|
166.8
|
|
|
$
|
342.3
|
|
Estimated interest on debt
|
(b)
|
150.3
|
|
|
24.2
|
|
|
42.2
|
|
|
34.3
|
|
|
49.6
|
|
|||||
Purchase obligations
|
(c)
|
40.6
|
|
|
40.6
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Pension benefits
|
|
126.2
|
|
|
12.6
|
|
|
25.3
|
|
|
25.5
|
|
|
62.8
|
|
|||||
Post-retirement obligations
|
(d)
|
7.8
|
|
|
0.9
|
|
|
1.8
|
|
|
1.6
|
|
|
3.5
|
|
|||||
Non-qualified benefit obligations
|
(e)
|
4.2
|
|
|
0.7
|
|
|
1.4
|
|
|
—
|
|
|
2.1
|
|
|||||
Operating lease obligations
|
(f)
|
42.4
|
|
|
5.5
|
|
|
10.2
|
|
|
8.8
|
|
|
17.9
|
|
|||||
Total
|
|
$
|
1,003.3
|
|
|
$
|
126.3
|
|
|
$
|
161.8
|
|
|
$
|
237.0
|
|
|
$
|
478.2
|
|
(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 8 to the Consolidated Financial Statements for principal repayments for each of the next five years). Long-term debt includes amounts borrowed under revolving credit facilities, which have been reflected as payments due in 2022. This amount does not include the debt issuance cost.
|
(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, 2017
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
$3.5 million
noted in the column labeled “Thereafter” comprises estimated benefit payments for 2023 through 2027. Post-retirement obligations are described further in Note 11 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
$2.1 million
noted in the column labeled “Thereafter” comprises estimated benefit payments for 2023 through 2027. Additional information about the Company’s non-qualified plans is included in Note 11 to the Consolidated Financial Statements.
|
(f)
|
Operating lease obligations primarily include 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 9 to the Consolidated Financial Statements.
|
|
Expected Fiscal Year of Repayment as of December 31, 2017
(dollars in millions)
|
||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Fair Value at
|
||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
December 31,
|
||||||||||||||||
|
2018
|
|
2019
|
|
2020
|
|
2021
|
|
2022
|
|
Thereafter
|
|
Total
|
|
2017
|
||||||||||||||||
Liabilities
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Fixed rate
|
$
|
41.3
|
|
|
$
|
41.2
|
|
|
$
|
39.7
|
|
|
$
|
51.0
|
|
|
$
|
40.4
|
|
|
$
|
342.3
|
|
|
$
|
555.9
|
|
|
$
|
491.3
|
|
Average interest rate
|
4.60%
|
|
4.54%
|
|
4.47%
|
|
4.46%
|
|
4.42%
|
|
4.26%
|
|
4.36%
|
|
|
||||||||||||||||
Variable rate
|
$
|
0.5
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
9.4
|
|
|
$
|
66.0
|
|
|
$
|
—
|
|
|
$
|
75.9
|
|
|
$
|
151.0
|
|
Average interest rate*
|
3.27%
|
|
3.24%
|
|
3.21%
|
|
3.16%
|
|
3.00%
|
|
3.02%
|
|
3.09%
|
|
|
|
|
|
Page
|
|
|
|
|||
Report of Independent Registered Public Accounting Firm
|
||||
Consolidated Statements of Operations
|
||||
Consolidated Statements of Comprehensive Income (Loss)
|
||||
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.
|
Related Party Transactions
|
||
|
4.
|
Discontinued Operations
|
||
|
5.
|
Investments in Affiliates
|
||
|
6.
|
Uncompleted Contracts
|
||
|
7.
|
Property
|
||
|
8.
|
Notes Payable and Long-Term Debt
|
||
|
9.
|
Leases – The Company as Lessee
|
||
|
10
|
Leases – The Company as Lessor
|
||
|
11.
|
Employee Benefit Plans
|
||
|
12.
|
Income Taxes
|
||
|
13.
|
Share-Based Awards
|
||
|
14.
|
Commitments and Contingencies
|
||
|
15.
|
Derivative Instruments
|
||
|
16.
|
Earnings Per Share ("EPS")
|
||
|
17.
|
Redeemable Noncontrolling Interest
|
||
|
18.
|
Cessation of Sugar Operations
|
||
|
19.
|
Segment Results
|
||
|
20.
|
Subsequent Events
|
|
|
Year Ended December 31,
|
||||||||||
|
|
2017
|
|
2016
|
|
2015
|
||||||
Operating Revenue:
|
|
|
|
|
|
|
||||||
Commercial Real Estate
|
|
$
|
136.9
|
|
|
$
|
134.7
|
|
|
$
|
133.6
|
|
Land Operations
|
|
84.5
|
|
|
61.9
|
|
|
120.2
|
|
|||
Materials & Construction
|
|
204.1
|
|
|
190.9
|
|
|
219.0
|
|
|||
Total operating revenue
|
|
425.5
|
|
|
387.5
|
|
|
472.8
|
|
|||
Operating Costs and Expenses:
|
|
|
|
|
|
|
||||||
Cost of Commercial Real Estate
|
|
75.5
|
|
|
79.0
|
|
|
80.4
|
|
|||
Cost of Land Operations
|
|
60.4
|
|
|
35.0
|
|
|
71.1
|
|
|||
Cost of Materials & Construction
|
|
166.1
|
|
|
154.5
|
|
|
175.7
|
|
|||
Selling, general and administrative
|
|
66.4
|
|
|
52.0
|
|
|
51.6
|
|
|||
REIT evaluation/conversion costs
|
|
15.2
|
|
|
9.5
|
|
|
—
|
|
|||
Impairment of real estate assets
|
|
22.4
|
|
|
11.7
|
|
|
—
|
|
|||
Total operating costs and expenses
|
|
406.0
|
|
|
341.7
|
|
|
378.8
|
|
|||
Operating Income
|
|
19.5
|
|
|
45.8
|
|
|
94.0
|
|
|||
Income related to joint ventures
|
|
7.2
|
|
|
19.2
|
|
|
36.8
|
|
|||
Reductions in solar investments, net (Note 5, 12, 14)
|
|
(2.6
|
)
|
|
(9.8
|
)
|
|
(2.6
|
)
|
|||
Interest and other income (expense), net
|
|
2.1
|
|
|
(1.7
|
)
|
|
(2.5
|
)
|
|||
Interest expense
|
|
(25.6
|
)
|
|
(26.3
|
)
|
|
(26.8
|
)
|
|||
Income from Continuing Operations Before Income Taxes and Net Gain (Loss) on Sale of Improved Properties
|
|
0.6
|
|
|
27.2
|
|
|
98.9
|
|
|||
Income tax benefit (expense)
|
|
218.2
|
|
|
0.5
|
|
|
(37.0
|
)
|
|||
Income from Continuing Operations Before Net Gain (Loss) on Sale of Improved Properties
|
|
218.8
|
|
|
27.7
|
|
|
61.9
|
|
|||
Net gain (loss) on the sale of improved properties, net of income taxes
|
|
9.3
|
|
|
5.0
|
|
|
(1.1
|
)
|
|||
Income from Continuing Operations
|
|
228.1
|
|
|
32.7
|
|
|
60.8
|
|
|||
Income (loss) from discontinued operations, net of income taxes (Note 4)
|
|
2.4
|
|
|
(41.1
|
)
|
|
(29.7
|
)
|
|||
Net Income (Loss)
|
|
230.5
|
|
|
(8.4
|
)
|
|
31.1
|
|
|||
Income attributable to noncontrolling interest
|
|
(2.2
|
)
|
|
(1.8
|
)
|
|
(1.5
|
)
|
|||
Net Income (Loss) Attributable to A&B Shareholders
|
|
$
|
228.3
|
|
|
$
|
(10.2
|
)
|
|
$
|
29.6
|
|
|
|
|
|
|
|
|
||||||
Basic Earnings (Loss) Per Share of Common Stock:
|
|
|
|
|
|
|
||||||
Continuing operations available to A&B shareholders
|
|
$
|
4.63
|
|
|
$
|
0.66
|
|
|
$
|
1.15
|
|
Discontinued operations available to A&B shareholders
|
|
0.05
|
|
|
(0.84
|
)
|
|
(0.61
|
)
|
|||
Net income (loss) available to A&B shareholders
|
|
$
|
4.68
|
|
|
$
|
(0.18
|
)
|
|
$
|
0.54
|
|
Diluted Earnings (Loss) Per Share of Common Stock:
|
|
|
|
|
|
|
||||||
Continuing operations available to A&B shareholders
|
|
$
|
4.30
|
|
|
$
|
0.65
|
|
|
$
|
1.14
|
|
Discontinued operations available to A&B shareholders
|
|
0.04
|
|
|
(0.83
|
)
|
|
(0.60
|
)
|
|||
Net income (loss) available to A&B shareholders
|
|
$
|
4.34
|
|
|
$
|
(0.18
|
)
|
|
$
|
0.54
|
|
|
|
|
|
|
|
|
||||||
Weighted-Average Number of Shares Outstanding:
|
|
|
|
|
|
|
||||||
Basic
|
|
49.2
|
|
|
49.0
|
|
|
48.9
|
|
|||
Diluted
|
|
53.0
|
|
|
49.4
|
|
|
49.3
|
|
|||
|
|
|
|
|
|
|
|
|||||
Amounts Available to A&B Shareholders (Note 16):
|
|
|
|
|
|
|
|
|||||
Continuing operations available to A&B shareholders, net of income taxes
|
|
$
|
227.7
|
|
|
$
|
32.2
|
|
|
$
|
56.2
|
|
Discontinued operations available to A&B shareholders, net of income taxes
|
|
2.4
|
|
|
(41.1
|
)
|
|
(29.7
|
)
|
|||
Net income (loss) available to A&B shareholders
|
|
$
|
230.1
|
|
|
$
|
(8.9
|
)
|
|
$
|
26.5
|
|
|
|
Year Ended December 31,
|
||||||||||
|
|
2017
|
|
2016
|
|
2015
|
||||||
Net Income (Loss)
|
|
$
|
230.5
|
|
|
$
|
(8.4
|
)
|
|
$
|
31.1
|
|
Other Comprehensive Income (Loss), net of tax:
|
|
|
|
|
|
|
||||||
Unrealized interest rate hedging gain (loss)
|
|
(0.4
|
)
|
|
2.6
|
|
|
—
|
|
|||
Reclassification adjustment for interest expense included in net income or loss
|
|
0.5
|
|
|
0.4
|
|
|
—
|
|
|||
Defined benefit pension plans:
|
|
|
|
|
|
|
||||||
Actuarial loss
|
|
(3.2
|
)
|
|
(4.6
|
)
|
|
(7.1
|
)
|
|||
Amortization of net loss included in net periodic pension cost
|
|
5.7
|
|
|
7.5
|
|
|
7.3
|
|
|||
Amortization of prior service credit included in net periodic pension cost
|
|
(1.1
|
)
|
|
(0.9
|
)
|
|
(1.3
|
)
|
|||
Curtailment
|
|
—
|
|
|
(1.5
|
)
|
|
—
|
|
|||
Prior service cost
|
|
—
|
|
|
—
|
|
|
(0.4
|
)
|
|||
Income taxes related to other comprehensive income
|
|
(0.6
|
)
|
|
(1.4
|
)
|
|
0.6
|
|
|||
Other comprehensive income (loss), net of tax
|
|
0.9
|
|
|
2.1
|
|
|
(0.9
|
)
|
|||
Comprehensive Income (Loss)
|
|
231.4
|
|
|
(6.3
|
)
|
|
30.2
|
|
|||
Comprehensive income attributable to noncontrolling interest
|
|
(2.2
|
)
|
|
(1.8
|
)
|
|
(1.5
|
)
|
|||
Comprehensive Income (Loss) Attributable to A&B Shareholders
|
|
$
|
229.2
|
|
|
$
|
(8.1
|
)
|
|
$
|
28.7
|
|
|
December 31,
|
||||||
|
2017
|
|
2016
|
||||
ASSETS
|
|
|
|
||||
Current Assets:
|
|
|
|
||||
Cash and cash equivalents
|
$
|
68.9
|
|
|
$
|
2.2
|
|
Accounts receivable, net
|
34.1
|
|
|
32.1
|
|
||
Contracts retention
|
13.2
|
|
|
13.1
|
|
||
Costs and estimated earnings in excess of billings on uncompleted contracts
|
20.2
|
|
|
16.4
|
|
||
Inventories
|
31.9
|
|
|
43.3
|
|
||
Real estate held for sale
|
67.4
|
|
|
1.0
|
|
||
Income tax receivable
|
27.7
|
|
|
10.6
|
|
||
Prepaid expenses and other assets
|
11.4
|
|
|
19.6
|
|
||
Total current assets
|
274.8
|
|
|
138.3
|
|
||
Investments in Affiliates
|
401.7
|
|
|
390.8
|
|
||
Real Estate Developments
|
151.0
|
|
|
179.5
|
|
||
Property – Net
|
1,147.5
|
|
|
1,231.6
|
|
||
Intangible Assets – Net
|
46.9
|
|
|
53.8
|
|
||
Deferred Tax Asset
|
16.5
|
|
|
—
|
|
||
Goodwill
|
102.3
|
|
|
102.3
|
|
||
Restricted Cash
|
34.3
|
|
|
10.1
|
|
||
Other Assets
|
56.2
|
|
|
49.9
|
|
||
Total assets
|
$
|
2,231.2
|
|
|
$
|
2,156.3
|
|
|
|
|
|
||||
LIABILITIES AND EQUITY
|
|
|
|
||||
Current Liabilities:
|
|
|
|
||||
Notes payable and current portion of long-term debt
|
$
|
46.0
|
|
|
$
|
42.4
|
|
Accounts payable
|
43.3
|
|
|
35.2
|
|
||
Billings in excess of costs and estimated earnings on uncompleted contracts
|
5.7
|
|
|
3.5
|
|
||
Accrued interest
|
6.5
|
|
|
6.3
|
|
||
Deferred revenue
|
0.9
|
|
|
17.6
|
|
||
Indemnity holdback related to Grace acquisition
|
9.3
|
|
|
9.3
|
|
||
HC&S cessation-related liabilities
|
4.6
|
|
|
19.1
|
|
||
Accrued dividends
|
783.0
|
|
|
—
|
|
||
Accrued and other liabilities
|
27.5
|
|
|
31.7
|
|
||
Total current liabilities
|
926.8
|
|
|
165.1
|
|
||
Long-term Liabilities:
|
|
|
|
||||
Long-term debt
|
585.2
|
|
|
472.7
|
|
||
Deferred income taxes
|
—
|
|
|
182.0
|
|
||
Accrued pension and post-retirement benefits
|
19.9
|
|
|
64.8
|
|
||
Other non-current liabilities
|
40.2
|
|
|
47.7
|
|
||
Total long-term liabilities
|
645.3
|
|
|
767.2
|
|
||
Total liabilities
|
1,572.1
|
|
|
932.3
|
|
||
Commitments and Contingencies (Note 14)
|
|
|
|
||||
Redeemable Noncontrolling Interest (Note 17)
|
8.0
|
|
|
10.8
|
|
||
Equity:
|
|
|
|
||||
Common stock - no par value; authorized, 150 million shares; outstanding, 49.3 million and 49.0 million shares at December 31, 2017 and December 31, 2016, respectively
|
1,161.7
|
|
|
1,157.3
|
|
||
Accumulated other comprehensive loss
|
(42.3
|
)
|
|
(43.2
|
)
|
||
(Distributions in excess of accumulated earnings) Retained earnings
|
(473.0
|
)
|
|
95.2
|
|
||
Total A&B shareholders' equity
|
646.4
|
|
|
1,209.3
|
|
||
Noncontrolling interest
|
4.7
|
|
|
3.9
|
|
||
Total equity
|
651.1
|
|
|
1,213.2
|
|
||
Total liabilities and equity
|
$
|
2,231.2
|
|
|
$
|
2,156.3
|
|
|
Year Ended December 31,
|
||||||||||
|
2017
|
|
2016
|
|
2015
|
||||||
Cash Flows from Operating Activities:
|
|
|
|
|
|
||||||
Net income (loss)
|
$
|
230.5
|
|
|
$
|
(8.4
|
)
|
|
$
|
31.1
|
|
Adjustments to reconcile net income (loss) to net cash provided by (used in) operations:
|
|
|
|
|
|
||||||
Depreciation and amortization
|
41.4
|
|
|
119.5
|
|
|
55.7
|
|
|||
Deferred income taxes
|
(199.0
|
)
|
|
(20.1
|
)
|
|
16.9
|
|
|||
Gains on asset transactions, net of asset write-downs
|
(12.7
|
)
|
|
(11.6
|
)
|
|
(35.8
|
)
|
|||
Share-based compensation expense
|
4.4
|
|
|
4.1
|
|
|
4.7
|
|
|||
Investments in affiliates, net of distributions
|
5.5
|
|
|
1.4
|
|
|
(3.7
|
)
|
|||
Changes in operating assets and liabilities:
|
|
|
|
|
|
||||||
Trade, contracts retention, and other receivables
|
(0.9
|
)
|
|
4.3
|
|
|
(3.1
|
)
|
|||
Costs and estimated earnings in excess of billings on uncompleted contracts - net
|
(1.5
|
)
|
|
0.7
|
|
|
(1.4
|
)
|
|||
Inventories
|
11.4
|
|
|
12.7
|
|
|
25.9
|
|
|||
Prepaid expenses, income tax receivable and other assets
|
(23.0
|
)
|
|
(0.1
|
)
|
|
(12.5
|
)
|
|||
Accrued pension and post-retirement benefits
|
(47.4
|
)
|
|
6.3
|
|
|
3.6
|
|
|||
Accounts payable and contracts retention
|
3.3
|
|
|
(0.4
|
)
|
|
0.1
|
|
|||
Accrued and other liabilities
|
(40.1
|
)
|
|
10.7
|
|
|
(18.2
|
)
|
|||
Real estate inventory sales (real estate developments held for sale)
|
47.6
|
|
|
7.4
|
|
|
73.0
|
|
|||
Expenditures for real estate inventory (real estate developments held for sale)
|
(20.8
|
)
|
|
(15.3
|
)
|
|
(7.2
|
)
|
|||
Net cash (used in) provided by operations
|
(1.3
|
)
|
|
111.2
|
|
|
129.1
|
|
|||
|
|
|
|
|
|
||||||
Cash Flows from Investing Activities:
|
|
|
|
|
|
||||||
Capital expenditures for property, plant and equipment
|
(42.5
|
)
|
|
(116.1
|
)
|
|
(44.7
|
)
|
|||
Proceeds from disposal of property and other assets
|
47.2
|
|
|
88.8
|
|
|
48.1
|
|
|||
Payments for purchases of investments in affiliates and other investments
|
(41.9
|
)
|
|
(47.2
|
)
|
|
(29.4
|
)
|
|||
Proceeds from investments in affiliates and other investments
|
33.3
|
|
|
41.3
|
|
|
44.4
|
|
|||
Net cash (used in) provided by investing activities
|
(3.9
|
)
|
|
(33.2
|
)
|
|
18.4
|
|
|||
|
|
|
|
|
|
||||||
Cash Flows from Financing Activities:
|
|
|
|
|
|
||||||
Proceeds from issuance of long-term debt
|
292.5
|
|
|
272.0
|
|
|
132.0
|
|
|||
Payments of long-term debt and deferred financing costs
|
(181.0
|
)
|
|
(334.3
|
)
|
|
(248.1
|
)
|
|||
Borrowings (payments) on line-of-credit agreement, net
|
2.6
|
|
|
(9.9
|
)
|
|
(3.0
|
)
|
|||
Distribution to noncontrolling interests
|
(0.5
|
)
|
|
(1.4
|
)
|
|
(1.1
|
)
|
|||
Dividends paid
|
(10.3
|
)
|
|
(12.3
|
)
|
|
(10.3
|
)
|
|||
Proceeds from issuance (repurchase) of capital stock and other, net
|
(7.2
|
)
|
|
1.2
|
|
|
(1.1
|
)
|
|||
Net cash provided by (used in) financing activities
|
96.1
|
|
|
(84.7
|
)
|
|
(131.6
|
)
|
|||
|
|
|
|
|
|
||||||
Cash, Cash Equivalents and Restricted Cash:
|
|
|
|
|
|
||||||
Net increase (decrease) in cash, cash equivalents, and restricted cash
|
90.9
|
|
|
(6.7
|
)
|
|
15.9
|
|
|||
Balance, beginning of period
|
12.3
|
|
|
19.0
|
|
|
3.1
|
|
|||
Balance, end of period
|
$
|
103.2
|
|
|
$
|
12.3
|
|
|
$
|
19.0
|
|
|
Year Ended December 31,
|
||||||||||
|
2017
|
|
2016
|
|
2015
|
||||||
Other Cash Flow Information:
|
|
|
|
|
|
||||||
Interest paid, net of capitalized interest
|
$
|
(24.9
|
)
|
|
$
|
(26.2
|
)
|
|
$
|
(27.3
|
)
|
Income taxes paid
|
$
|
(4.0
|
)
|
|
$
|
—
|
|
|
$
|
(6.4
|
)
|
|
|
|
|
|
|
||||||
Noncash Investing and Financing Activities:
|
|
|
|
|
|
||||||
Contribution of land and development assets to joint ventures
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
9.6
|
|
Real estate exchanged for note receivable
|
$
|
2.5
|
|
|
$
|
—
|
|
|
$
|
1.9
|
|
Declared distribution from investment in affiliate
|
$
|
—
|
|
|
$
|
8.0
|
|
|
$
|
—
|
|
Declared distribution to noncontrolling interest
|
$
|
—
|
|
|
$
|
0.9
|
|
|
$
|
0.4
|
|
Asset retirement obligations
|
$
|
—
|
|
|
$
|
5.4
|
|
|
$
|
6.0
|
|
Uncollected proceeds from disposal of equipment
|
$
|
1.9
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Capital expenditures included in accounts payable and accrued expenses
|
$
|
4.5
|
|
|
$
|
1.3
|
|
|
$
|
8.0
|
|
Dividends declared
|
$
|
783.0
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
Total Equity
|
|
|
||||||||||||||||||||||||
|
|
|
|
|
|
(Distributions
|
|
|
|
|
|
|
|||||||||||||||
|
|
|
Accumulated
|
in Excess of
|
|
|
|
|
|
Redeem-
|
|||||||||||||||||
|
|
Common
|
Other
|
Accumulated
|
|
|
|
|
|
able
|
|||||||||||||||||
|
|
Stock
|
Compre-
|
Earnings)
|
|
Non-
|
|
|
|
Non-
|
|||||||||||||||||
|
|
|
|
Stated
|
hensive
|
Retained
|
|
Controlling
|
|
|
|
Controlling
|
|||||||||||||||
|
|
Shares
|
|
Value
|
|
Loss
|
|
Earnings
|
|
Interest
|
|
Total
|
|
Interest
|
|||||||||||||
Balance, January 1, 2015
|
|
48.8
|
|
|
$
|
1,147.3
|
|
|
$
|
(44.4
|
)
|
|
$
|
101.0
|
|
|
$
|
10.9
|
|
|
$
|
1,214.8
|
|
|
$
|
—
|
|
Net income
|
|
|
|
|
|
|
|
29.6
|
|
|
1.1
|
|
|
30.7
|
|
|
0.4
|
|
|||||||||
Other comprehensive income, net of tax
|
|
|
|
|
|
(0.9
|
)
|
|
|
|
|
|
(0.9
|
)
|
|
|
|||||||||||
Dividends on common stock ($0.21 per share)
|
|
|
|
|
|
|
|
(10.3
|
)
|
|
|
|
(10.3
|
)
|
|
|
|||||||||||
Reclassification of redeemable noncontrolling interest (Note 17)
|
|
|
|
|
|
|
|
|
|
(8.5
|
)
|
|
(8.5
|
)
|
|
8.5
|
|
||||||||||
Distributions to noncontrolling interest
|
|
|
|
|
|
|
|
|
|
|
|
—
|
|
|
(0.4
|
)
|
|||||||||||
Adjustments to redemption value of redeemable noncontrolling interest (Note 17)
|
|
|
|
|
|
|
|
(3.1
|
)
|
|
|
|
(3.1
|
)
|
|
3.1
|
|
||||||||||
Share-based compensation
|
|
|
|
4.7
|
|
|
|
|
|
|
|
|
4.7
|
|
|
|
|||||||||||
Shares issued or repurchased, net
|
|
0.1
|
|
|
(0.9
|
)
|
|
|
|
|
|
|
|
(0.9
|
)
|
|
|
||||||||||
Excess tax benefit from share-based awards
|
|
|
|
0.6
|
|
|
|
|
|
|
|
|
0.6
|
|
|
|
|||||||||||
Balance, December 31, 2015
|
|
48.9
|
|
|
1,151.7
|
|
|
(45.3
|
)
|
|
117.2
|
|
|
3.5
|
|
|
1,227.1
|
|
|
11.6
|
|
||||||
Net income (loss)
|
|
|
|
|
|
|
|
(10.2
|
)
|
|
0.4
|
|
|
(9.8
|
)
|
|
1.4
|
|
|||||||||
Other comprehensive income, net of tax
|
|
|
|
|
|
2.1
|
|
|
|
|
|
|
2.1
|
|
|
|
|||||||||||
Dividends on common stock ($0.25 per share)
|
|
|
|
|
|
|
|
(12.3
|
)
|
|
|
|
(12.3
|
)
|
|
|
|||||||||||
Distributions to noncontrolling interest
|
|
|
|
|
|
|
|
|
|
|
|
—
|
|
|
(0.9
|
)
|
|||||||||||
Adjustments to redemption value of redeemable noncontrolling interest (Note 17)
|
|
|
|
|
|
|
|
1.3
|
|
|
|
|
1.3
|
|
|
(1.3
|
)
|
||||||||||
Share-based compensation
|
|
|
|
4.1
|
|
|
|
|
|
|
|
|
4.1
|
|
|
|
|||||||||||
Shares issued or repurchased, net
|
|
0.1
|
|
|
1.5
|
|
|
|
|
(0.8
|
)
|
|
|
|
0.7
|
|
|
|
|||||||||
Balance, December 31, 2016
|
|
49.0
|
|
|
1,157.3
|
|
|
(43.2
|
)
|
|
95.2
|
|
|
3.9
|
|
|
1,213.2
|
|
|
10.8
|
|
||||||
Net income
|
|
|
|
|
|
|
|
|
|
|
228.3
|
|
|
1.0
|
|
|
229.3
|
|
|
1.2
|
|
||||||
Other comprehensive income, net of tax
|
|
|
|
|
|
|
|
0.9
|
|
|
|
|
|
|
|
0.9
|
|
|
|
|
|||||||
Dividends on common stock ($16.13 per share)
|
|
|
|
|
|
|
|
|
|
|
(793.3
|
)
|
|
|
|
(793.3
|
)
|
|
|
|
|||||||
Distributions to noncontrolling interest
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(0.2
|
)
|
|
(0.2
|
)
|
|
(0.3
|
)
|
||||||
Adjustments to redemption value of redeemable noncontrolling interest (Note 17)
|
|
|
|
|
|
|
|
|
|
|
3.7
|
|
|
|
|
|
3.7
|
|
|
(3.7
|
)
|
||||||
Share-based compensation
|
|
|
|
|
4.4
|
|
|
|
|
|
|
|
|
|
|
|
4.4
|
|
|
|
|
||||||
Shares issued or repurchased, net
|
|
0.3
|
|
|
—
|
|
|
|
|
|
(6.9
|
)
|
|
|
|
(6.9
|
)
|
|
|
|
|||||||
Balance, December 31, 2017
|
|
49.3
|
|
|
$
|
1,161.7
|
|
|
$
|
(42.3
|
)
|
|
$
|
(473.0
|
)
|
|
$
|
4.7
|
|
|
$
|
651.1
|
|
|
$
|
8.0
|
|
1.
|
BACKGROUND AND BASIS OF PRESENTATION
|
•
|
Commercial Real Estate:
includes leasing, property management, redevelopment and development-for-hold activities. Significant assets include improved commercial real estate and urban ground leases. Income from this segment is principally generated by leasing and operating real estate assets.
|
•
|
Land Operations:
includes planning, zoning, financing, constructing, purchasing, managing, selling, and investing in real property; leasing agricultural land; renewable energy; and diversified agribusiness. Primary assets include landholdings, renewable energy assets (investments in hydroelectric and solar facilities and power purchase agreements) and development projects. Income from this segment is principally generated by renewable energy operations, agricultural leases, select farming operations, development sales and fees, and parcel sales.
|
•
|
Materials & Construction:
performs asphalt paving as prime contractor and subcontractor; imports and sells liquid asphalt; mines, processes and sells basalt aggregate; produces and sells asphaltic and ready-mix concrete; provides and sells various construction- and traffic-control-related products; and manufactures and sells precast concrete products. Assets include two grade A (prime) rock quarries, an asphalt storage terminal, paving hot mix plants and quarry and paving equipment. Income is generated principally by materials supply and paving construction.
|
•
|
On November 8, 2017, the Company completed a holding company merger ("Holding Company Merger") in order to facilitate the Company's ongoing REIT compliance. Pursuant to the Holding Company Merger, the then-existing Alexander & Baldwin, Inc. ("A&B Predecessor"), Alexander & Baldwin REIT Holdings, Inc., a Hawai`i corporation and a direct, wholly owned subsidiary of A&B Predecessor (“A&B REIT Holdings”), and A&B REIT Merger Corporation, a Hawai`i corporation and a direct, wholly owned subsidiary of A&B REIT Holdings (“Merger Sub”) completed a merger through which Merger Sub was merged with and into A&B Predecessor, with A&B Predecessor continuing as the surviving corporation and being renamed "Alexander & Baldwin Investments, LLC." Additionally, as a result of the Holding Company Merger, A&B REIT Holdings replaced A&B Predecessor as the Hawai`i-based, publicly held corporation through which the Company’s operations are conducted, and all shares of common stock, including the reserve of common stock issuable under the outstanding awards and equity incentive compensation plans, of A&B Predecessor were converted into shares of A&B REIT Holdings common stock on a one-for-one basis; promptly following the merger A&B REIT Holdings was renamed “Alexander & Baldwin, Inc.” In these Notes to the Financial Statements, unless the context requires otherwise, references to A&B or the Company refer to Alexander & Baldwin, Inc. prior to the consummation of the Holding Company Merger (subsequently renamed Alexander & Baldwin Investments, LLC) and to A&B REIT Holdings following consummation of the Holding Company Merger (subsequently renamed Alexander & Baldwin, Inc.).
|
•
|
On November 16, 2017 (the "Declaration Date"), the Company declared a distribution to its shareholders in the aggregate amount of
$783 million
(approximately
$15.92
per share) (the "Special Distribution"), which represented the Company's previously undistributed non-REIT earnings and profits accumulated prior to January 1, 2017, the Company's REIT taxable income for the 2017 taxable year, and a substantial portion of the Company's estimated REIT taxable income for the 2018 taxable year. The Company completed the payment of the Special Distribution on January 23, 2018 ("the Distribution Date") through an aggregate of
$156.6 million
in cash and the issuance of
22,587,299
shares of the Company's common stock.
|
2.
|
SIGNIFICANT ACCOUNTING POLICIES
|
|
Balance at
Beginning of Year |
|
Provision for Bad Debt
|
|
Write-offs
and Other |
|
Balance at
End of Year |
2017
|
$1.0
|
|
$1.0
|
|
$(0.6)
|
|
$1.4
|
2016
|
$1.7
|
|
$0.8
|
|
$(1.5)
|
|
$1.0
|
2015
|
$1.7
|
|
$0.4
|
|
$(0.4)
|
|
$1.7
|
|
2017
|
|
2016
|
||||
Sugar inventories
|
$
|
—
|
|
|
$
|
17.5
|
|
Asphalt
|
12.2
|
|
|
7.4
|
|
||
Processed rock, Portland cement, and sand
|
13.5
|
|
|
12.6
|
|
||
Work in progress
|
2.8
|
|
|
3.0
|
|
||
Retail merchandise
|
1.7
|
|
|
1.7
|
|
||
Parts, materials and supplies inventories
|
1.7
|
|
|
1.1
|
|
||
Total
|
$
|
31.9
|
|
|
$
|
43.3
|
|
Classification
|
Range of Life (in years)
|
Building and improvements
|
10 to 40
|
Leasehold improvements
|
5 to 10 (lesser of useful life or lease term)
|
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
|
Real Estate Developments
|
$
|
21.1
|
|
Property – Net
|
64.8
|
|
|
Other Assets
|
3.9
|
|
|
Total assets
|
89.8
|
|
|
Impairment of real estate assets
|
(22.4
|
)
|
|
Real estate held for sale
|
$
|
67.4
|
|
|
2017
|
|
2016
|
||||||||
|
Amount
|
|
Weighted Average Life (Years)
|
|
Amount
|
|
Weighted Average Life (Years)
|
||||
In-place/favorable leases
|
$
|
0.3
|
|
|
1.6
|
|
$
|
8.5
|
|
|
7.0
|
|
2017
|
|
2016
|
||||
In-place leases
|
$
|
70.2
|
|
|
$
|
69.9
|
|
Favorable leases
|
17.9
|
|
|
17.9
|
|
||
Permitted quarry rights
|
18.0
|
|
|
18.0
|
|
||
Contract backlog
|
2.6
|
|
|
2.6
|
|
||
Trade name/customer relationships
|
2.2
|
|
|
2.2
|
|
||
Accumulated amortization
|
(64.0
|
)
|
|
(56.8
|
)
|
||
Total assets
|
$
|
46.9
|
|
|
$
|
53.8
|
|
|
Estimated
Amortization |
||
2018
|
$
|
5.4
|
|
2019
|
$
|
4.5
|
|
2020
|
$
|
3.6
|
|
2021
|
$
|
3.1
|
|
2022
|
$
|
2.9
|
|
|
Materials & Construction
|
|
Commercial Real Estate
|
|
Total
|
||||||
Balance, January 1, 2016
|
$
|
93.6
|
|
|
$
|
8.7
|
|
|
$
|
102.3
|
|
Changes to goodwill
|
—
|
|
|
—
|
|
|
—
|
|
|||
Balance, December 31, 2016
|
93.6
|
|
|
8.7
|
|
|
102.3
|
|
|||
Changes to goodwill
|
—
|
|
|
—
|
|
|
—
|
|
|||
Balance, December 31, 2017
|
$
|
93.6
|
|
|
$
|
8.7
|
|
|
$
|
102.3
|
|
|
2017
|
|
2016
|
||||
Unrealized components of benefit plans:
|
|
|
|
||||
Pension plans
|
$
|
(43.1
|
)
|
|
$
|
(43.8
|
)
|
Post-retirement plans
|
(1.0
|
)
|
|
(0.6
|
)
|
||
Non-qualified benefit plans
|
(0.1
|
)
|
|
(0.6
|
)
|
||
Interest rate swap
|
1.9
|
|
|
1.8
|
|
||
Accumulated other comprehensive loss
|
$
|
(42.3
|
)
|
|
$
|
(43.2
|
)
|
|
Employee
Benefit Plans |
|
Interest Rate Swap
|
|
Total
|
||||||
Balance, January 1, 2015
|
$
|
(44.4
|
)
|
|
$
|
—
|
|
|
$
|
(44.4
|
)
|
Other comprehensive loss before reclassifications, net of taxes of $2.9 for employee benefit plans
|
(4.6
|
)
|
|
—
|
|
|
(4.6
|
)
|
|||
Amounts reclassified from accumulated other comprehensive loss, net of taxes of $2.3 for employee benefit plans
|
3.7
|
|
|
—
|
|
|
3.7
|
|
|||
Balance, December 31, 2015
|
$
|
(45.3
|
)
|
|
$
|
—
|
|
|
$
|
(45.3
|
)
|
Other comprehensive loss before reclassifications, net of taxes of $2.1 and $1.0 for employee benefit plans and interest rate swap, respectively
|
(3.4
|
)
|
|
1.6
|
|
|
(1.8
|
)
|
|||
Amounts reclassified from accumulated other comprehensive loss, net of taxes of $2.3 and $0.2 for employee benefit plans and interest rate swap, respectively
|
3.7
|
|
|
0.2
|
|
|
3.9
|
|
|||
Balance, December 31, 2016
|
$
|
(45.0
|
)
|
|
$
|
1.8
|
|
|
$
|
(43.2
|
)
|
Other comprehensive loss before reclassifications, net of taxes of $1.2 and $0.2 for employee benefit plans and interest rate swap, respectively
|
(2.0
|
)
|
|
(0.2
|
)
|
|
(2.2
|
)
|
|||
Amounts reclassified from accumulated other comprehensive loss, net of taxes of $1.8 and $0.2 for employee benefit plans and interest rate swap, respectively
|
2.8
|
|
|
0.3
|
|
|
3.1
|
|
|||
Balance, December 31, 2017
|
$
|
(44.2
|
)
|
|
$
|
1.9
|
|
|
$
|
(42.3
|
)
|
|
2017
|
|
2016
|
|
2015
|
||||||
Unrealized hedging gain (loss)
|
$
|
(0.4
|
)
|
|
$
|
2.6
|
|
|
$
|
—
|
|
Reclassification adjustment for interest expense included in net income or loss
|
0.5
|
|
|
0.4
|
|
|
—
|
|
|||
Actuarial loss*
|
(3.2
|
)
|
|
(4.6
|
)
|
|
(7.1
|
)
|
|||
Amortization of defined benefit pension items reclassified to net periodic pension cost:
|
|
|
|
|
|
||||||
Prior service cost
|
—
|
|
|
—
|
|
|
(0.4
|
)
|
|||
Net loss*
|
5.7
|
|
|
7.5
|
|
|
7.3
|
|
|||
Prior service credit*
|
(1.1
|
)
|
|
(0.9
|
)
|
|
(1.3
|
)
|
|||
Curtailment
|
—
|
|
|
(1.5
|
)
|
|
—
|
|
|||
Total before income tax
|
1.5
|
|
|
3.5
|
|
|
(1.5
|
)
|
|||
Income taxes
|
(0.6
|
)
|
|
(1.4
|
)
|
|
0.6
|
|
|||
Other comprehensive income (loss), net of tax
|
$
|
0.9
|
|
|
$
|
2.1
|
|
|
$
|
(0.9
|
)
|
|
2017
|
|
2016
|
|
2015
|
||||||
Interest income
|
$
|
5.3
|
|
|
$
|
1.8
|
|
|
$
|
0.8
|
|
Pension and postretirement benefit expense
|
(2.6
|
)
|
|
(4.2
|
)
|
|
(3.7
|
)
|
|||
Other income (expense)
|
(0.6
|
)
|
|
0.7
|
|
|
0.4
|
|
|||
Interest and other income (expense), net
|
$
|
2.1
|
|
|
$
|
(1.7
|
)
|
|
$
|
(2.5
|
)
|
|
2016
|
|
2015
|
||||||||||||||||
|
Previously Reported
|
Impact of Adoption
|
Current Presentation
|
|
Previously Reported
|
Impact of Adoption
|
Current Presentation
|
||||||||||||
Cash Flows from Operating Activities
|
$
|
111.2
|
|
$
|
—
|
|
$
|
111.2
|
|
|
$
|
129.1
|
|
$
|
—
|
|
$
|
129.1
|
|
Cash Flows from Investing Activities
|
$
|
(25.6
|
)
|
$
|
(7.6
|
)
|
$
|
(33.2
|
)
|
|
$
|
1.0
|
|
$
|
17.4
|
|
$
|
18.4
|
|
Cash Flows from Financing Activities
|
$
|
(84.7
|
)
|
$
|
—
|
|
$
|
(84.7
|
)
|
|
$
|
(131.6
|
)
|
$
|
—
|
|
$
|
(131.6
|
)
|
|
|
|
|
|
|
|
|
||||||||||||
Cash, Cash Equivalents and Restricted Cash
|
|
|
|
|
|
|
|
||||||||||||
Net increase in cash and cash equivalents and restricted cash
|
$
|
0.9
|
|
$
|
(7.6
|
)
|
$
|
(6.7
|
)
|
|
$
|
(1.5
|
)
|
$
|
17.4
|
|
$
|
15.9
|
|
Balance, beginning of period
|
1.3
|
|
17.7
|
|
19.0
|
|
|
2.8
|
|
0.3
|
|
3.1
|
|
||||||
Balance, end of period
|
$
|
2.2
|
|
$
|
10.1
|
|
$
|
12.3
|
|
|
$
|
1.3
|
|
$
|
17.7
|
|
$
|
19.0
|
|
|
2017
|
|
2016
|
|
2015
|
||||||
Cash and Cash Equivalents
|
$
|
68.9
|
|
|
$
|
2.2
|
|
|
$
|
1.3
|
|
Restricted Cash
|
34.3
|
|
|
10.1
|
|
|
17.7
|
|
|||
Cash, Cash Equivalents and Restricted Cash
|
$
|
103.2
|
|
|
$
|
12.3
|
|
|
$
|
19.0
|
|
|
2016
|
|
2015
|
||||||||||||||||
|
Previously Reported
|
Impact of Adoption
|
Current Presentation
|
|
Previously Reported
|
Impact of Adoption
|
Current Presentation
|
||||||||||||
Selling, general and administrative
|
$
|
56.2
|
|
$
|
(4.2
|
)
|
$
|
52.0
|
|
|
$
|
55.3
|
|
$
|
(3.7
|
)
|
$
|
51.6
|
|
Interest and other income, net
|
$
|
2.5
|
|
$
|
(4.2
|
)
|
$
|
(1.7
|
)
|
|
$
|
1.2
|
|
$
|
(3.7
|
)
|
$
|
(2.5
|
)
|
3.
|
RELATED PARTY TRANSACTIONS
|
4.
|
DISCONTINUED OPERATIONS
|
|
2017
|
|
2016
|
|
2015
|
||||||
Sugar operations revenue
|
$
|
22.9
|
|
|
$
|
98.4
|
|
|
$
|
97.7
|
|
Cost of sugar operations
|
22.5
|
|
|
87.5
|
|
|
124.6
|
|
|||
Operating income (loss) from sugar operations
|
0.4
|
|
|
10.9
|
|
|
(26.9
|
)
|
|||
Sugar operations cessation costs
|
(2.7
|
)
|
|
(77.6
|
)
|
|
(22.6
|
)
|
|||
Gain on asset dispositions
|
6.0
|
|
|
—
|
|
|
—
|
|
|||
Income (loss) from discontinued operations before income taxes
|
3.7
|
|
|
(66.7
|
)
|
|
(49.5
|
)
|
|||
Income tax (expense) benefit
|
(1.3
|
)
|
|
25.6
|
|
|
19.8
|
|
|||
Income (loss) from discontinued operations
|
$
|
2.4
|
|
|
$
|
(41.1
|
)
|
|
$
|
(29.7
|
)
|
|
|
|
|
|
|
||||||
Basic earnings (loss) per share
|
$
|
0.05
|
|
|
$
|
(0.84
|
)
|
|
$
|
(0.61
|
)
|
Diluted earnings (loss) per share
|
$
|
0.04
|
|
|
$
|
(0.83
|
)
|
|
$
|
(0.60
|
)
|
5.
|
INVESTMENTS IN AFFILIATES
|
|
2017
|
|
2016
|
||||
Current assets
|
$
|
153.1
|
|
|
$
|
154.3
|
|
Non-current assets
|
754.9
|
|
|
727.8
|
|
||
Total assets
|
$
|
908.0
|
|
|
$
|
882.1
|
|
|
|
|
|
||||
Current liabilities
|
$
|
52.5
|
|
|
$
|
65.8
|
|
Non-current liabilities
|
192.8
|
|
|
175.0
|
|
||
Total liabilities
|
$
|
245.3
|
|
|
$
|
240.8
|
|
|
Year Ended December 31,
|
||||||||||
|
2017
|
|
2016
|
|
2015
|
||||||
Revenues
|
$
|
200.5
|
|
|
$
|
489.3
|
|
|
$
|
471.7
|
|
Operating costs and expenses
|
166.3
|
|
|
449.8
|
|
|
411.6
|
|
|||
Operating income
|
$
|
34.2
|
|
|
$
|
39.5
|
|
|
$
|
60.1
|
|
Income from Continuing Operations*
|
$
|
16.0
|
|
|
$
|
31.7
|
|
|
$
|
57.2
|
|
Net Income*
|
$
|
15.5
|
|
|
$
|
31.7
|
|
|
$
|
56.1
|
|
* Includes earnings from equity method investments held by the investee.
|
6.
|
UNCOMPLETED CONTRACTS
|
|
2017
|
|
2016
|
||||
Costs incurred on uncompleted contracts
|
$
|
137.5
|
|
|
$
|
92.2
|
|
Estimated earnings
|
35.8
|
|
|
26.8
|
|
||
Subtotal
|
173.3
|
|
|
119.0
|
|
||
Less: billings to date
|
158.8
|
|
|
106.1
|
|
||
Total
|
$
|
14.5
|
|
|
$
|
12.9
|
|
|
|
|
|
||||
Included in accompanying balance sheet under the following captions:
|
|
|
|
||||
Costs and estimated earnings in excess of billings on uncompleted contracts
|
$
|
20.2
|
|
|
$
|
16.4
|
|
Estimated billings in excess of costs and estimated earnings on uncompleted contracts
|
(5.7
|
)
|
|
(3.5
|
)
|
||
Total
|
$
|
14.5
|
|
|
$
|
12.9
|
|
7.
|
PROPERTY
|
|
December 31,
|
||||||
|
2017
|
|
2016
|
||||
Buildings
|
$
|
471.6
|
|
|
$
|
566.5
|
|
Land
|
613.3
|
|
|
622.6
|
|
||
Machinery and equipment
|
74.7
|
|
|
254.0
|
|
||
Asphalt plants and quarry assets
|
80.2
|
|
|
78.2
|
|
||
Water, power and sewer systems
|
109.9
|
|
|
156.4
|
|
||
Other property improvements
|
70.5
|
|
|
65.9
|
|
||
Vessel
|
—
|
|
|
11.3
|
|
||
Subtotal
|
1,420.2
|
|
|
1,754.9
|
|
||
Accumulated depreciation
|
(272.7
|
)
|
|
(523.3
|
)
|
||
Property - net
|
$
|
1,147.5
|
|
|
$
|
1,231.6
|
|
8.
|
NOTES PAYABLE AND LONG-TERM DEBT
|
|
2017
|
|
2016
|
||||
Revolving credit facilities:
|
|
|
|
||||
Wells Fargo GLP Revolver, matures in 2018 (a)
|
$
|
0.5
|
|
|
$
|
—
|
|
Revolving credit facility, matures in 2022 ($372.2 million available) (b)
|
66.0
|
|
|
14.9
|
|
||
Term loans:
|
|
|
|
||||
6.38%, payable through 2017, secured by Midstate Hayes
|
—
|
|
|
8.2
|
|
||
1.85%, payable through 2017, unsecured
|
—
|
|
|
2.5
|
|
||
2.00%, payable through 2018, unsecured
|
0.1
|
|
|
0.8
|
|
||
3.31%, payable through 2018, unsecured
|
1.0
|
|
|
2.8
|
|
||
5.19%, payable through 2019, unsecured
|
4.4
|
|
|
6.5
|
|
||
6.90%, payable through 2020, unsecured
|
48.8
|
|
|
65.0
|
|
||
LIBOR plus 2.00%, payable through 2021 (c)
|
9.4
|
|
|
9.4
|
|
||
LIBOR plus 1.00%, payable through 2021, secured by asphalt terminal (d)
|
4.8
|
|
|
6.1
|
|
||
3.15%, payable through 2021, second mortgage secured by Kailua Town Center III
|
4.9
|
|
|
—
|
|
||
LIBOR plus 1.50%, payable through 2021, secured by Kailua Town Center III (e)
|
10.8
|
|
|
11.2
|
|
||
5.53%, payable through 2024, unsecured
|
28.5
|
|
|
28.5
|
|
||
3.90%, payable through 2024, unsecured
|
62.6
|
|
|
68.1
|
|
||
4.15%, payable through 2024, secured by Pearl Highlands Center
|
87.0
|
|
|
88.8
|
|
||
5.55%, payable through 2026, unsecured
|
46.0
|
|
|
46.0
|
|
||
5.56%, payable through 2026, unsecured
|
25.0
|
|
|
25.0
|
|
||
4.35%, payable through 2026, unsecured
|
22.0
|
|
|
22.0
|
|
||
4.04%, payable through 2026, unsecured
|
50.0
|
|
|
—
|
|
||
3.88%, payable through 2027, unsecured
|
50.0
|
|
|
50.0
|
|
||
4.16%, payable through 2028, unsecured
|
25.0
|
|
|
—
|
|
||
4.30%, payable through 2029, unsecured
|
25.0
|
|
|
—
|
|
||
LIBOR plus 1.35%, payable through 2029, secured by Manoa Marketplace (f)
|
60.0
|
|
|
60.0
|
|
||
Total debt (contractual)
|
631.8
|
|
|
515.8
|
|
||
Unamortized debt premium (discount)
|
0.5
|
|
|
0.5
|
|
||
Unamortized debt issuance costs
|
(1.1
|
)
|
|
(1.2
|
)
|
||
Total debt (carrying value)
|
631.2
|
|
|
515.1
|
|
||
Less current portion
|
(46.0
|
)
|
|
(42.4
|
)
|
||
Long-term debt
|
$
|
585.2
|
|
|
$
|
472.7
|
|
•
|
An increase in the maximum ratio of debt to total adjusted asset value from
0.50
:
1.0
to
0.60
:
1.0
.
|
•
|
An increase in the aggregate maximum amount of priority debt at any time from
20 percent
to
25 percent
.
|
•
|
Allows the Company to consummate the holding company merger to adopt certain governance changes and facilitate the Company's ongoing compliance with REIT requirements.
|
•
|
Sets the minimum shareholders' equity amount to be
$850.6 million
plus
75 percent
of the net proceeds received from equity issuances, less non-recurring costs related to the REIT conversion, among other additions and subtractions.
|
•
|
Allows for the payment of minimum dividends required to maintain REIT status and other dividends in any amount so long as no event of default shall then exist or would exist after giving effect to such dividends.
|
9.
|
LEASES - THE COMPANY AS LESSEE
|
|
|
Minimum Lease Payments
|
||
2018
|
|
$
|
5.5
|
|
2019
|
|
5.1
|
|
|
2020
|
|
5.1
|
|
|
2021
|
|
5.1
|
|
|
2022
|
|
3.7
|
|
|
Thereafter
|
|
17.9
|
|
|
Total
|
|
$
|
42.4
|
|
10.
|
LEASES - THE COMPANY AS LESSOR
|
|
2017
|
|
2016
|
||||
Leased property - real estate
|
$
|
1,089.0
|
|
|
$
|
1,149.0
|
|
Less accumulated depreciation
|
(104.0
|
)
|
|
(120.4
|
)
|
||
Property under operating leases - net
|
$
|
985.0
|
|
|
$
|
1,028.6
|
|
|
2017
|
|
2016
|
|
2015
|
||||||
Minimum rentals
|
$
|
95.4
|
|
|
$
|
95.2
|
|
|
$
|
96.2
|
|
Contingent rentals (based on sales volume)
|
4.4
|
|
|
5.4
|
|
|
4.8
|
|
|||
Total
|
$
|
99.8
|
|
|
$
|
100.6
|
|
|
$
|
101.0
|
|
|
Operating Leases
|
||
2018
|
$
|
84.6
|
|
2019
|
76.1
|
|
|
2020
|
65.3
|
|
|
2021
|
51.6
|
|
|
2022
|
42.2
|
|
|
Thereafter
|
279.7
|
|
|
Total
|
$
|
599.5
|
|
11.
|
EMPLOYEE BENEFIT PLANS
|
|
Target
|
|
2017
|
|
2016
|
|||
Domestic equity securities
|
—
|
%
|
|
—
|
%
|
|
31
|
%
|
International equity securities
|
—
|
%
|
|
—
|
%
|
|
20
|
%
|
Fixed income securities
|
99
|
%
|
|
98
|
%
|
|
35
|
%
|
Other
|
—
|
%
|
|
—
|
%
|
|
9
|
%
|
Cash and cash equivalents
|
1
|
%
|
|
2
|
%
|
|
5
|
%
|
Total
|
100
|
%
|
|
100
|
%
|
|
100
|
%
|
|
Fair Value Measurements as of
|
||||||||||
|
December 31, 2017
|
||||||||||
|
Total
|
|
Quoted Prices in Active Markets (Level 1)
|
|
Significant Observable Inputs
(Level 2)
|
||||||
Asset Category
|
|
|
|
|
|
||||||
Cash and cash equivalents
|
$
|
4.5
|
|
|
$
|
4.5
|
|
|
$
|
—
|
|
Fixed income securities:
|
|
|
|
|
|
||||||
U.S. Treasury obligations
|
81.2
|
|
|
81.2
|
|
|
—
|
|
|||
Domestic corporate bonds and notes
|
102.3
|
|
|
—
|
|
|
102.3
|
|
|||
Foreign corporate bonds
|
9.6
|
|
|
—
|
|
|
9.6
|
|
|||
Total
|
$
|
197.6
|
|
|
$
|
85.7
|
|
|
$
|
111.9
|
|
|
Fair Value Measurements as of
|
||||||||||||||
|
December 31, 2016
|
||||||||||||||
|
Total
|
|
Quoted Prices in Active Markets (Level 1)
|
|
Significant Observable Inputs (Level 2)
|
|
Significant Unobservable Inputs (Level 3)
|
||||||||
Asset Category
|
|
|
|
|
|
|
|
||||||||
Cash and Cash equivalents
|
$
|
6.1
|
|
|
$
|
6.1
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Equity securities:
|
|
|
|
|
|
|
|
||||||||
Domestic
|
28.1
|
|
|
28.1
|
|
|
—
|
|
|
—
|
|
||||
Domestic exchange-traded funds
|
16.9
|
|
|
16.9
|
|
|
—
|
|
|
—
|
|
||||
International
|
24.5
|
|
|
24.5
|
|
|
—
|
|
|
—
|
|
||||
International and emerging markets exchange-traded funds
|
4.1
|
|
|
4.1
|
|
|
—
|
|
|
—
|
|
||||
Fixed income securities:
|
|
|
|
|
|
|
|
||||||||
U.S. Treasury obligations
|
21.7
|
|
|
21.7
|
|
|
—
|
|
|
—
|
|
||||
Domestic corporate bonds and notes
|
26.6
|
|
|
—
|
|
|
26.6
|
|
|
—
|
|
||||
Foreign corporate bonds
|
1.5
|
|
|
—
|
|
|
1.5
|
|
|
—
|
|
||||
Other types of investments:
|
|
|
|
|
|
|
|
||||||||
Limited partnership interest in private equity fund
|
0.1
|
|
|
—
|
|
|
—
|
|
|
0.1
|
|
||||
Exchange-traded global real estate securities
|
9.9
|
|
|
9.9
|
|
|
—
|
|
|
—
|
|
||||
Insurance contracts
|
0.1
|
|
|
—
|
|
|
—
|
|
|
0.1
|
|
||||
Exchange-traded commodity fund
|
2.9
|
|
|
2.9
|
|
|
—
|
|
|
—
|
|
||||
Other receivables
|
0.6
|
|
|
0.6
|
|
|
—
|
|
|
—
|
|
||||
Total
|
$
|
143.1
|
|
|
$
|
114.8
|
|
|
$
|
28.1
|
|
|
$
|
0.2
|
|
|
Fair Value Measurements Using Significant
|
||||||||||
|
Unobservable Inputs (Level 3)
|
||||||||||
|
Private Equity
|
|
Insurance
|
|
Total
|
||||||
Beginning balance, January 1, 2016
|
$
|
0.2
|
|
|
$
|
0.2
|
|
|
$
|
0.4
|
|
Actual return on plan assets:
|
|
|
|
|
|
||||||
Assets held at the reporting date
|
(0.1
|
)
|
|
(0.1
|
)
|
|
(0.2
|
)
|
|||
Ending balance, December 31, 2016
|
0.1
|
|
|
0.1
|
|
|
0.2
|
|
|||
Actual return on plan assets:
|
|
|
|
|
|
||||||
Assets held at the reporting date
|
(0.1
|
)
|
|
(0.1
|
)
|
|
(0.2
|
)
|
|||
Ending balance, December 31, 2017
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
Pension Benefits
|
|
Other Post-retirement Benefits
|
||||||||||||
|
2017
|
|
2016
|
|
2017
|
|
2016
|
||||||||
Change in Benefit Obligation
|
|
|
|
|
|
|
|
||||||||
Benefit obligation at beginning of year
|
$
|
197.0
|
|
|
$
|
194.6
|
|
|
$
|
11.9
|
|
|
$
|
12.2
|
|
Service cost
|
2.8
|
|
|
3.1
|
|
|
0.1
|
|
|
0.1
|
|
||||
Interest cost
|
8.0
|
|
|
8.5
|
|
|
0.4
|
|
|
0.5
|
|
||||
Plan participants’ contributions
|
—
|
|
|
—
|
|
|
1.0
|
|
|
1.1
|
|
||||
Actuarial (gain) loss
|
12.3
|
|
|
4.7
|
|
|
0.7
|
|
|
—
|
|
||||
Benefits paid
|
(14.0
|
)
|
|
(13.0
|
)
|
|
(1.8
|
)
|
|
(2.1
|
)
|
||||
Curtailment
|
—
|
|
|
(0.9
|
)
|
|
—
|
|
|
0.1
|
|
||||
Benefit obligation at end of year
|
$
|
206.1
|
|
|
$
|
197.0
|
|
|
$
|
12.3
|
|
|
$
|
11.9
|
|
Change in Plan Assets
|
|
|
|
|
|
|
|
||||||||
Fair value of plan assets at beginning of year
|
$
|
143.1
|
|
|
$
|
146.2
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Actual return on plan assets
|
19.3
|
|
|
9.4
|
|
|
—
|
|
|
—
|
|
||||
Employer contributions
|
49.2
|
|
|
0.5
|
|
|
0.8
|
|
|
0.9
|
|
||||
Participant contributions
|
—
|
|
|
—
|
|
|
1.0
|
|
|
1.1
|
|
||||
Benefits paid
|
(14.0
|
)
|
|
(13.0
|
)
|
|
(1.8
|
)
|
|
(2.1
|
)
|
||||
Other
|
—
|
|
|
—
|
|
|
|
|
|
0.1
|
|
||||
Fair value of plan assets at end of year
|
$
|
197.6
|
|
|
$
|
143.1
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
|
|
|
|
|
|
|
||||||||
Funded Status and Recognized Liability
|
$
|
(8.5
|
)
|
|
$
|
(53.9
|
)
|
|
$
|
(12.3
|
)
|
|
$
|
(11.9
|
)
|
|
Pension Benefits
|
|
Other Post-retirement Benefits
|
||||||||||||
|
2017
|
|
2016
|
|
2017
|
|
2016
|
||||||||
Non-current assets
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Current liabilities
|
—
|
|
|
—
|
|
|
(0.8
|
)
|
|
(1.0
|
)
|
||||
Non-current liabilities
|
(8.5
|
)
|
|
(53.9
|
)
|
|
(11.5
|
)
|
|
(10.9
|
)
|
||||
Total
|
$
|
(8.5
|
)
|
|
$
|
(53.9
|
)
|
|
$
|
(12.3
|
)
|
|
$
|
(11.9
|
)
|
|
|
|
|
|
|
|
|
||||||||
Net loss (gain) (net of taxes)
|
$
|
44.6
|
|
|
$
|
45.6
|
|
|
$
|
1.0
|
|
|
$
|
0.6
|
|
Unrecognized prior service credit (net of taxes)
|
(1.5
|
)
|
|
(1.8
|
)
|
|
—
|
|
|
—
|
|
||||
Total
|
$
|
43.1
|
|
|
$
|
43.8
|
|
|
$
|
1.0
|
|
|
$
|
0.6
|
|
|
2017
|
|
2016
|
||||
Projected benefit obligation
|
$
|
206.1
|
|
|
$
|
197.0
|
|
Accumulated benefit obligation
|
$
|
206.0
|
|
|
$
|
197.0
|
|
Fair value of plan assets
|
$
|
197.6
|
|
|
$
|
143.1
|
|
|
Pension Benefits
|
|
Postretirement Benefits
|
||||||||||||||||||||
Components of Net Periodic Benefit Cost
|
2017
|
|
2016
|
|
2015
|
|
2017
|
|
2016
|
|
2015
|
||||||||||||
Service cost
|
$
|
2.8
|
|
|
$
|
3.1
|
|
|
$
|
3.1
|
|
|
$
|
0.1
|
|
|
$
|
0.1
|
|
|
$
|
0.1
|
|
Interest cost
|
8.0
|
|
|
8.5
|
|
|
8.0
|
|
|
0.4
|
|
|
0.5
|
|
|
0.5
|
|
||||||
Expected return on plan assets
|
(9.4
|
)
|
|
(10.0
|
)
|
|
(11.1
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Amortization of net loss
|
4.1
|
|
|
7.1
|
|
|
6.9
|
|
|
—
|
|
|
0.2
|
|
|
0.1
|
|
||||||
Amortization of prior service cost
|
(0.5
|
)
|
|
(0.5
|
)
|
|
(0.8
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Curtailment (gain)/loss
|
—
|
|
|
(0.9
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
0.1
|
|
||||||
Net periodic benefit cost
|
$
|
5.0
|
|
|
$
|
7.3
|
|
|
$
|
6.1
|
|
|
$
|
0.5
|
|
|
$
|
0.8
|
|
|
$
|
0.8
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Other Changes in Plan Assets and Benefit Obligations Recognized in Other Comprehensive Income
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Net loss (gain)
|
$
|
2.4
|
|
|
$
|
4.4
|
|
|
$
|
7.0
|
|
|
$
|
0.7
|
|
|
$
|
—
|
|
|
$
|
0.4
|
|
Amortization of unrecognized gain (loss)
|
(4.1
|
)
|
|
(7.1
|
)
|
|
(6.9
|
)
|
|
—
|
|
|
(0.2
|
)
|
|
(0.1
|
)
|
||||||
Prior service cost
|
—
|
|
|
—
|
|
|
0.4
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Amortization of prior service credit
|
0.5
|
|
|
1.4
|
|
|
0.8
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Total recognized in other comprehensive income
|
(1.2
|
)
|
|
(1.3
|
)
|
|
1.3
|
|
|
0.7
|
|
|
(0.2
|
)
|
|
0.3
|
|
||||||
Total recognized in net periodic benefit cost and
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Other comprehensive income
|
$
|
3.8
|
|
|
$
|
6.0
|
|
|
$
|
7.4
|
|
|
$
|
1.2
|
|
|
$
|
0.6
|
|
|
$
|
1.1
|
|
|
Pension Benefits
|
|
Other Post-retirement Benefits
|
||||||||
|
2017
|
|
2016
|
|
2015
|
|
2017
|
|
2016
|
|
2015
|
Weighted Average Assumptions:
|
|
|
|
|
|
|
|
|
|
|
|
Discount rate
|
3.70%
|
|
4.20%
|
|
4.50%
|
|
3.70%
|
|
4.20%
|
|
4.50%
|
Expected return on plan assets
|
6.80%
|
|
7.10%
|
|
7.10%
|
|
—%
|
|
—%
|
|
—%
|
Rate of compensation increase
|
0.5%-3%
|
|
0.5%-3%
|
|
0.5%-3%
|
|
0.5%-3%
|
|
0.5%-3%
|
|
0.5%-3%
|
Initial health care cost trend rate
|
|
|
|
|
|
|
6.50%
|
|
6.80%
|
|
7.00%
|
Ultimate rate
|
|
|
|
|
|
|
4.50%
|
|
4.50%
|
|
4.50%
|
Year ultimate rate is reached
|
|
|
|
|
|
|
2037
|
|
2037
|
|
2037
|
|
Other Post-retirement Benefits
|
||||||||||||||||||||||
|
One Percentage Point
|
||||||||||||||||||||||
|
Increase
|
|
Decrease
|
||||||||||||||||||||
|
2017
|
|
2016
|
|
2015
|
|
2017
|
|
2016
|
|
2015
|
||||||||||||
Effect on total of service and interest cost components
|
$
|
0.1
|
|
|
$
|
0.1
|
|
|
$
|
0.1
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Effect on post-retirement benefit obligation
|
$
|
1.3
|
|
|
$
|
1.0
|
|
|
$
|
1.1
|
|
|
$
|
(1.0
|
)
|
|
$
|
(0.9
|
)
|
|
$
|
(0.9
|
)
|
|
|
Pension
|
|
Non-qualified
|
|
Post-retirement
|
||||||
|
|
Benefits
|
|
Plan Benefits
|
|
Benefits
|
||||||
2018
|
|
$
|
12.6
|
|
|
$
|
0.7
|
|
|
$
|
0.9
|
|
2019
|
|
$
|
12.7
|
|
|
$
|
1.4
|
|
|
$
|
0.9
|
|
2020
|
|
$
|
12.6
|
|
|
$
|
—
|
|
|
$
|
0.9
|
|
2021
|
|
$
|
12.7
|
|
|
$
|
—
|
|
|
$
|
0.8
|
|
2022
|
|
$
|
12.8
|
|
|
$
|
—
|
|
|
$
|
0.8
|
|
2023-2027
|
|
$
|
62.8
|
|
|
$
|
2.1
|
|
|
$
|
3.5
|
|
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
|
Contribution by Entity
|
Surcharge Imposed
|
Expiration Date
|
Current Plan Year End
|
||||||
Fund
|
EIN Plan No.
|
2017 and 2016
|
Pending/Implemented
|
Jan. 1 - Dec. 31, 2017
|
Jan. 1 - Dec. 31, 2016
|
Jan. 1 - Dec. 31, 2015
|
|||||||||
Operating Engineers
|
94-6090764; 001
|
Red
|
Yes
|
$
|
4.9
|
|
$
|
4.7
|
|
$
|
4.6
|
|
No
|
9/2/19
|
12/31/17
|
Laborers National
|
52-6074345; 001
|
Red
|
Yes
|
0.2
|
|
0.1
|
|
0.1
|
|
No
|
8/31/18
|
12/31/17
|
|||
Hawai`i Laborers
|
99-6025107; 001
|
Green
|
No
|
0.8
|
|
0.7
|
|
0.8
|
|
No
|
8/31/19
|
2/28/17
|
|||
Hawai`i Laborers
|
99-6025107; 001
|
Green
|
No
|
0.2
|
|
0.2
|
|
0.2
|
|
No
|
9/30/19
|
2/28/17
|
|||
Total
|
|
|
|
$
|
6.1
|
|
$
|
5.7
|
|
$
|
5.7
|
|
|
|
|
12.
|
INCOME TAXES
|
|
2017
|
|
2016
|
|
2015
|
||||||
Current:
|
|
|
|
|
|
||||||
Federal
|
$
|
(2.6
|
)
|
|
$
|
2.9
|
|
|
$
|
13.4
|
|
State
|
(0.5
|
)
|
|
0.9
|
|
|
1.6
|
|
|||
Current
|
$
|
(3.1
|
)
|
|
$
|
3.8
|
|
|
$
|
15.0
|
|
Deferred:
|
|
|
|
|
|
||||||
Federal
|
$
|
(200.7
|
)
|
|
$
|
(1.4
|
)
|
|
$
|
18.5
|
|
State
|
(14.4
|
)
|
|
0.2
|
|
|
2.8
|
|
|||
Deferred
|
$
|
(215.1
|
)
|
|
$
|
(1.2
|
)
|
|
$
|
21.3
|
|
Income tax expense (benefit)
|
$
|
(218.2
|
)
|
|
$
|
2.6
|
|
|
$
|
36.3
|
|
|
2017
|
|
2016
|
|
2015
|
||||||
Computed federal income tax expense
|
$
|
3.3
|
|
|
$
|
12.3
|
|
|
$
|
34.0
|
|
State income taxes
|
0.1
|
|
|
0.6
|
|
|
4.4
|
|
|||
Valuation allowance - state tax credit
|
6.9
|
|
|
—
|
|
|
—
|
|
|||
REIT rate differential
|
(2.2
|
)
|
|
—
|
|
|
—
|
|
|||
Nondeductible transaction costs
|
—
|
|
|
2.4
|
|
|
—
|
|
|||
Tax credits, including solar
|
(0.3
|
)
|
|
(8.7
|
)
|
|
—
|
|
|||
Return to provision
|
(1.1
|
)
|
|
0.1
|
|
|
(0.7
|
)
|
|||
Amended return
|
(0.1
|
)
|
|
(0.2
|
)
|
|
0.1
|
|
|||
Share-based compensation
|
(4.0
|
)
|
|
(1.5
|
)
|
|
—
|
|
|||
Noncontrolling interest
|
(0.7
|
)
|
|
(0.7
|
)
|
|
(0.5
|
)
|
|||
Rate change effect related to REIT conversion
|
(223.0
|
)
|
|
—
|
|
|
—
|
|
|||
Rate change effect related to Tax Cuts and Jobs Act of 2017
|
3.0
|
|
|
—
|
|
|
—
|
|
|||
Other—net
|
(0.1
|
)
|
|
(1.7
|
)
|
|
(1.0
|
)
|
|||
Income tax expense (benefit)
|
$
|
(218.2
|
)
|
|
$
|
2.6
|
|
|
$
|
36.3
|
|
|
2017
|
|
2016
|
||||
Deferred tax assets:
|
|
|
|
||||
Employee benefits
|
$
|
9.1
|
|
|
$
|
35.8
|
|
Capitalized costs
|
10.7
|
|
|
23.0
|
|
||
Joint ventures and other investments
|
2.8
|
|
|
1.3
|
|
||
Impairment and amortization
|
0.7
|
|
|
11.4
|
|
||
Solar investment benefits
|
16.6
|
|
|
15.0
|
|
||
Insurance and other reserves
|
2.9
|
|
|
6.0
|
|
||
Net operating losses
|
7.7
|
|
|
—
|
|
||
Other
|
1.4
|
|
|
3.5
|
|
||
Total deferred tax assets
|
$
|
51.9
|
|
|
$
|
96.0
|
|
Valuation allowance
|
(6.9
|
)
|
|
—
|
|
||
Total net deferred tax assets
|
$
|
45.0
|
|
|
$
|
96.0
|
|
|
|
|
|
||||
Deferred tax liabilities:
|
|
|
|
||||
Property (including tax-deferred gains on real estate transactions)
|
$
|
25.7
|
|
|
$
|
260.3
|
|
Straight-line rental income and advanced rent
|
—
|
|
|
8.4
|
|
||
Other
|
2.8
|
|
|
9.3
|
|
||
Total deferred tax liabilities
|
$
|
28.5
|
|
|
$
|
278.0
|
|
|
|
|
|
||||
Net deferred tax assets (liabilities)
|
$
|
16.5
|
|
|
$
|
(182.0
|
)
|
13.
|
SHARE-BASED PAYMENT AWARDS
|
|
2012 Plan
Stock Options |
|
Weighted-
Average Exercise Price |
|
Weighted-
Average Contractual Life |
|
Aggregate
Intrinsic Value |
|||||
Outstanding, January 1, 2017
|
903.5
|
|
|
$
|
17.78
|
|
|
|
|
|
||
Exercised Prior to Special Distribution
|
(233.6
|
)
|
|
$
|
16.47
|
|
|
|
|
|
||
Anti-dilutive Adjustment for Special Distribution
|
342.2
|
|
|
|
|
|
|
|
||||
Exercised Subsequent to Special Distribution
|
(381.6
|
)
|
|
$
|
11.25
|
|
|
|
|
|
||
Outstanding, December 31, 2017
|
630.5
|
|
|
$
|
12.58
|
|
|
2.9 years
|
|
$
|
9,516
|
|
Vested or expected to vest
|
630.5
|
|
|
$
|
12.58
|
|
|
2.9 years
|
|
$
|
9,516
|
|
Exercisable, December 31, 2017
|
630.5
|
|
|
$
|
12.58
|
|
|
2.9 years
|
|
$
|
9,516
|
|
|
2012 Plan
Restricted Stock Units |
|
Weighted-
Average Grant-date Fair Value |
|||
Outstanding, January 1, 2017
|
293.5
|
|
|
$
|
33.81
|
|
Granted
|
139.1
|
|
|
$
|
42.85
|
|
Vested
|
(96.3
|
)
|
|
$
|
37.20
|
|
Canceled
|
(17.4
|
)
|
|
$
|
35.03
|
|
Outstanding, December 31, 2017
|
318.9
|
|
|
$
|
36.66
|
|
|
2017 Grants
|
|
2016 Grants
|
Volatility of A&B common stock
|
24.1%
|
|
26.3%
|
Average volatility of peer companies
|
25.6%
|
|
35.3%
|
Risk-free interest rate
|
1.6%
|
|
1.1%
|
|
2017
|
|
2016
|
|
2015
|
||||||
Share-based expense (net of estimated forfeitures):
|
|
|
|
|
|
||||||
Time-based and market-based restricted stock units
|
$
|
4.4
|
|
|
$
|
4.1
|
|
|
$
|
4.6
|
|
Total share-based expense
|
4.4
|
|
|
4.1
|
|
|
4.6
|
|
|||
Total recognized tax benefit
|
(0.5
|
)
|
|
(1.4
|
)
|
|
(1.2
|
)
|
|||
Share-based expense (net of tax)
|
$
|
3.9
|
|
|
$
|
2.7
|
|
|
$
|
3.4
|
|
|
|
|
|
|
|
||||||
Cash received upon option exercise
|
$
|
8.1
|
|
|
$
|
4.6
|
|
|
$
|
0.5
|
|
Intrinsic value of options exercised
|
$
|
13.2
|
|
|
$
|
2.6
|
|
|
$
|
0.5
|
|
Tax benefit realized upon option exercise
|
$
|
4.2
|
|
|
$
|
1.0
|
|
|
$
|
0.2
|
|
Fair value of stock vested
|
$
|
3.7
|
|
|
$
|
2.2
|
|
|
$
|
4.2
|
|
14.
|
COMMITMENTS AND CONTINGENCIES
|
Standby letters of credit
(a)
|
$
|
11.8
|
|
Bonds
(b)
|
$
|
428.3
|
|
15.
|
DERIVATIVE INSTRUMENTS
|
|
|
|
|
Notional Amount at
|
|
Fair Value at
|
Classification on
|
||||||||
Effective Date
|
Maturity Date
|
Interest Rate
|
|
December 31, 2017
|
|
December 31, 2017
|
|
December 31, 2016
|
Balance Sheet
|
||||||
4/7/2016
|
8/1/2029
|
3.14%
|
|
$
|
60.0
|
|
|
$
|
2.8
|
|
|
$
|
2.8
|
|
Other assets
|
|
|
|
|
Notional Amount at
|
|
Fair Value at
|
Classification on
|
||||||||
Effective Date
|
Maturity Date
|
Interest Rate
|
|
December 31, 2017
|
|
December 31, 2017
|
|
December 31, 2016
|
Balance Sheet
|
||||||
1/1/2014
|
9/1/2021
|
5.95%
|
|
$
|
10.9
|
|
|
$
|
(0.9
|
)
|
|
$
|
(1.3
|
)
|
Other non-current liabilities
|
6/18/2008
|
3/1/2021
|
5.98%
|
|
$
|
4.8
|
|
|
$
|
(0.3
|
)
|
|
$
|
(0.5
|
)
|
Other non-current liabilities
|
Total
|
|
|
|
$
|
15.7
|
|
|
$
|
(1.2
|
)
|
|
$
|
(1.8
|
)
|
|
|
|
2017
|
|
2016
|
||||
Derivatives in Designated Cash Flow Hedging Relationships:
|
|
|
|
|
||||
Amount of (gain) loss recognized in OCI on derivatives (effective portion)
|
|
$
|
0.4
|
|
|
$
|
(2.6
|
)
|
Amounts of (gain) loss reclassified from accumulated OCI into earnings under "interest expense" (ineffective portion and amount excluded from effectiveness testing)
|
|
$
|
(0.5
|
)
|
|
$
|
(0.4
|
)
|
Derivatives Not Designated as Cash Flow Hedges:
|
|
|
|
|
||||
Amount of realized and unrealized loss on derivatives recognized in earnings under "interest income and other"
|
|
$
|
0.6
|
|
|
$
|
0.7
|
|
16.
|
EARNINGS PER SHARE ("EPS")
|
|
2017
|
|
2016
|
|
2015
|
||||||
Income from continuing operations, net of income taxes
|
$
|
228.1
|
|
|
$
|
32.7
|
|
|
$
|
60.8
|
|
Less: Income attributable to noncontrolling interest
|
(2.2
|
)
|
|
(1.8
|
)
|
|
(1.5
|
)
|
|||
Income from continuing operations attributable to A&B shareholders, net of income taxes
|
225.9
|
|
|
30.9
|
|
|
59.3
|
|
|||
Undistributed earnings (losses) allocated to redeemable noncontrolling interest
|
1.8
|
|
|
1.3
|
|
|
(3.1
|
)
|
|||
Income from continuing operations available to A&B shareholders, net of income taxes
|
227.7
|
|
|
32.2
|
|
|
56.2
|
|
|||
Income (loss) from discontinued operations available to A&B shareholders, net of income taxes
|
2.4
|
|
|
(41.1
|
)
|
|
(29.7
|
)
|
|||
Net income (loss) available to A&B shareholders
|
$
|
230.1
|
|
|
$
|
(8.9
|
)
|
|
$
|
26.5
|
|
|
2017
|
|
2016
|
|
2015
|
|||
Denominator for basic EPS – weighted-average shares outstanding
|
49.2
|
|
|
49.0
|
|
|
48.9
|
|
Effect of dilutive securities:
|
|
|
|
|
|
|||
Non-participating stock options and restricted stock unit awards
|
0.8
|
|
|
0.4
|
|
|
0.4
|
|
Special Distribution
|
3.0
|
|
|
—
|
|
|
—
|
|
Denominator for diluted EPS – weighted-average shares outstanding
|
53.0
|
|
|
49.4
|
|
|
49.3
|
|
18.
|
CESSATION OF SUGAR OPERATIONS
|
|
|
Charges Recognized During 2017
|
|
Cumulative Amount Recognized as of
December 31, 2017 |
|
Remaining to be Recognized
|
|
Total
|
||||||||
Employee severance benefits and related costs
|
|
$
|
0.3
|
|
|
$
|
22.1
|
|
|
$
|
—
|
|
|
$
|
22.1
|
|
Asset write-offs and accelerated depreciation
|
|
—
|
|
|
71.3
|
|
|
—
|
|
|
71.3
|
|
||||
Property removal, restoration and other exit-related costs
|
|
2.4
|
|
|
9.5
|
|
|
0.9
|
|
|
10.4
|
|
||||
Total Cessation-related costs
|
|
$
|
2.7
|
|
|
$
|
102.9
|
|
|
$
|
0.9
|
|
|
$
|
103.8
|
|
|
|
Employee Severance Benefits and Related Costs
|
|
Other Exit Costs
1
|
|
Total
|
||||||
Balance at December 31, 2016
|
|
$
|
13.7
|
|
|
$
|
5.4
|
|
|
$
|
19.1
|
|
Expense
|
|
0.3
|
|
|
2.4
|
|
|
2.7
|
|
|||
Cash payments
|
|
(14.0
|
)
|
|
(3.2
|
)
|
|
(17.2
|
)
|
|||
Balance at December 31, 2017
|
|
$
|
—
|
|
|
$
|
4.6
|
|
|
$
|
4.6
|
|
|
|
Classification on Balance Sheet
|
|
December 31, 2017
|
|
December 31, 2016
|
||||
Employee severance benefits and related costs
|
|
HC&S cessation-related liabilities
|
|
$
|
—
|
|
|
$
|
13.7
|
|
Other exit costs
|
|
HC&S cessation-related liabilities
|
|
4.6
|
|
|
5.4
|
|
||
Total Cessation-related liabilities
|
|
|
|
$
|
4.6
|
|
|
$
|
19.1
|
|
19.
|
SEGMENT RESULTS
|
|
2017
|
|
2016
|
|
2015
|
||||||
Revenue:
|
|
|
|
|
|
||||||
Commercial Real Estate
|
$
|
136.9
|
|
|
$
|
134.7
|
|
|
$
|
133.6
|
|
Land Operations
|
84.5
|
|
|
61.9
|
|
|
120.2
|
|
|||
Materials & Construction
|
204.1
|
|
|
190.9
|
|
|
219.0
|
|
|||
Total revenue
|
425.5
|
|
|
387.5
|
|
|
472.8
|
|
|||
Operating Profit (Loss):
|
|
|
|
|
|
||||||
Commercial Real Estate
1,2
|
34.4
|
|
|
54.8
|
|
|
53.2
|
|
|||
Land Operations
3,4
|
14.2
|
|
|
7.0
|
|
|
61.7
|
|
|||
Materials & Construction
5
|
22.0
|
|
|
23.3
|
|
|
30.9
|
|
|||
Total operating profit
|
70.6
|
|
|
85.1
|
|
|
145.8
|
|
|||
Interest expense
|
(25.6
|
)
|
|
(26.3
|
)
|
|
(26.8
|
)
|
|||
General corporate expenses
|
(29.2
|
)
|
|
(22.1
|
)
|
|
(20.1
|
)
|
|||
REIT evaluation/conversion costs
6
|
(15.2
|
)
|
|
(9.5
|
)
|
|
—
|
|
|||
Income from Continuing Operations Before Income Taxes and Net Gain (Loss) on Sale of Improved Properties
|
0.6
|
|
|
27.2
|
|
|
98.9
|
|
|||
Income tax benefit (expense)
7
|
218.2
|
|
|
0.5
|
|
|
(37.0
|
)
|
|||
Income from Continuing Operations Before Net Gain (Loss) on Sale of Improved Properties
|
218.8
|
|
|
27.7
|
|
|
61.9
|
|
|||
Net gain (loss) on the sale of improved properties, net of income taxes
8
|
9.3
|
|
|
5.0
|
|
|
(1.1
|
)
|
|||
Income From Continuing Operations
|
228.1
|
|
|
32.7
|
|
|
60.8
|
|
|||
Income (loss) from discontinued operations, net of income taxes
|
2.4
|
|
|
(41.1
|
)
|
|
(29.7
|
)
|
|||
Net Income (Loss)
|
230.5
|
|
|
(8.4
|
)
|
|
31.1
|
|
|||
Income attributable to noncontrolling interest
|
(2.2
|
)
|
|
(1.8
|
)
|
|
(1.5
|
)
|
|||
Net Income (Loss) Attributable to A&B Shareholders
|
$
|
228.3
|
|
|
$
|
(10.2
|
)
|
|
$
|
29.6
|
|
|
2017
|
|
2016
|
|
2015
|
||||||
Identifiable Assets:
|
|
|
|
|
|
||||||
Commercial Real Estate
|
$
|
1,128.1
|
|
|
$
|
1,119.5
|
|
|
$
|
1,075.7
|
|
Land Operations
9
|
604.2
|
|
|
632.8
|
|
|
759.7
|
|
|||
Materials & Construction
|
379.2
|
|
|
371.8
|
|
|
386.6
|
|
|||
Other
|
119.7
|
|
|
32.2
|
|
|
20.3
|
|
|||
Total assets
|
$
|
2,231.2
|
|
|
$
|
2,156.3
|
|
|
$
|
2,242.3
|
|
|
|
|
|
|
|
||||||
Capital Expenditures:
|
|
|
|
|
|
||||||
Commercial Real Estate
10
|
$
|
32.8
|
|
|
$
|
98.7
|
|
|
$
|
23.0
|
|
Land Operations
11,12
|
1.4
|
|
|
5.3
|
|
|
2.1
|
|
|||
Materials & Construction
|
6.3
|
|
|
9.3
|
|
|
7.2
|
|
|||
Other
|
0.2
|
|
|
0.3
|
|
|
1.4
|
|
|||
Total capital expenditures
|
$
|
40.7
|
|
|
$
|
113.6
|
|
|
$
|
33.7
|
|
|
|
|
|
|
|
||||||
Depreciation and Amortization:
|
|
|
|
|
|
||||||
Commercial Real Estate
|
$
|
26.0
|
|
|
$
|
28.4
|
|
|
$
|
28.9
|
|
Land Operations
12
|
1.6
|
|
|
6.7
|
|
|
1.3
|
|
|||
Materials & Construction
|
12.2
|
|
|
11.7
|
|
|
11.6
|
|
|||
Other
|
1.6
|
|
|
1.8
|
|
|
1.5
|
|
|||
Total depreciation and amortization
|
$
|
41.4
|
|
|
$
|
48.6
|
|
|
$
|
43.3
|
|
9
|
The Land Operations segment includes approximately
$369.9 million
,
$357.5 million
, and
$379.7 million
related to its investment in various real estate joint ventures as of
December 31,
2017
,
2016
, and
2015
, respectively.
|
10
|
Represents gross capital additions to the commercial real estate 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.
|
11
|
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
$20.8 million
,
$15.3 million
, and
$7.2 million
for
2017
,
2016
, and
2015
, respectively. Investments in real estate joint ventures were
$16.4 million
,
$20.8 million
, and
$25.8 million
in
2017
,
2016
, and
2015
, respectively. Excludes expenditures from discontinued operations, which are classified as Cash Flows from Investing Activities within the Consolidated Statements of Cash Flows of
$1.8 million
,
$2.5 million
, and
$11.0 million
for
2017
,
2016
, and
2015
, respectively.
|
12
|
Amounts recast to reflect discontinued operations.
|
|
2017
|
||||||||||||||
|
Q1
|
|
Q2
|
|
Q3
|
|
Q4
|
||||||||
Revenue:
|
|
|
|
|
|
|
|
||||||||
Commercial Real Estate
|
$
|
33.7
|
|
|
$
|
33.8
|
|
|
$
|
33.9
|
|
|
$
|
35.5
|
|
Land Operations
|
11.0
|
|
|
12.1
|
|
|
22.6
|
|
|
38.8
|
|
||||
Materials & Construction
|
48.5
|
|
|
52.2
|
|
|
55.0
|
|
|
48.4
|
|
||||
Total revenue
|
93.2
|
|
|
98.1
|
|
|
111.5
|
|
|
122.7
|
|
||||
Operating Profit (Loss):
|
|
|
|
|
|
|
|
||||||||
Commercial Real Estate
1,2
|
14.3
|
|
|
13.4
|
|
|
13.6
|
|
|
(6.9
|
)
|
||||
Land Operations
3
|
(2.4
|
)
|
|
1.7
|
|
|
10.4
|
|
|
4.5
|
|
||||
Materials & Construction
4
|
5.6
|
|
|
6.7
|
|
|
6.7
|
|
|
3.0
|
|
||||
Total operating profit
|
17.5
|
|
|
21.8
|
|
|
30.7
|
|
|
0.6
|
|
||||
Interest expense
|
(6.2
|
)
|
|
(6.2
|
)
|
|
(6.1
|
)
|
|
(7.1
|
)
|
||||
General corporate expenses
|
(5.7
|
)
|
|
(5.9
|
)
|
|
(8.9
|
)
|
|
(8.7
|
)
|
||||
REIT evaluation/conversion costs
5
|
(4.8
|
)
|
|
(2.2
|
)
|
|
(4.4
|
)
|
|
(3.8
|
)
|
||||
Income (Loss) from Continuing Operations Before Income Taxes and Net Gain on Sale of Improved Properties
|
0.8
|
|
|
7.5
|
|
|
11.3
|
|
|
(19.0
|
)
|
||||
Income tax benefit (expense)
6
|
0.8
|
|
|
(3.5
|
)
|
|
(3.7
|
)
|
|
224.6
|
|
||||
Income from Continuing Operations Before Net Gain on Sale of Improved Properties
|
1.6
|
|
|
4.0
|
|
|
7.6
|
|
|
205.6
|
|
||||
Net gain on the sale of improved properties
7
|
3.0
|
|
|
—
|
|
|
—
|
|
|
6.3
|
|
||||
Income from Continuing Operations
|
4.6
|
|
|
4.0
|
|
|
7.6
|
|
|
211.9
|
|
||||
Income (loss) from discontinued operations, net of income taxes
|
2.4
|
|
|
0.8
|
|
|
(0.8
|
)
|
|
—
|
|
||||
Net Income
|
7.0
|
|
|
4.8
|
|
|
6.8
|
|
|
211.9
|
|
||||
Income attributable to noncontrolling interest
|
(0.7
|
)
|
|
(0.5
|
)
|
|
(0.7
|
)
|
|
(0.3
|
)
|
||||
Net Income Attributable to A&B Shareholders
|
$
|
6.3
|
|
|
$
|
4.3
|
|
|
$
|
6.1
|
|
|
$
|
211.6
|
|
|
|
|
|
|
|
|
|
||||||||
Amounts Available to A&B Shareholders:
|
|
|
|
|
|
|
|
||||||||
Income from Continuing Operations, Net of Taxes
|
$
|
4.6
|
|
|
$
|
4.0
|
|
|
$
|
7.6
|
|
|
$
|
211.9
|
|
Less: Income attributable to noncontrolling interests
|
(0.7
|
)
|
|
(0.5
|
)
|
|
(0.7
|
)
|
|
(0.3
|
)
|
||||
Income from Continuing Operations Attributable to A&B Shareholders, Net of Taxes
|
3.9
|
|
|
3.5
|
|
|
6.9
|
|
|
211.6
|
|
||||
Less: Undistributed earnings allocated to redeemable noncontrolling interest
|
0.5
|
|
|
0.2
|
|
|
0.5
|
|
|
0.6
|
|
||||
Income from Continuing Operations Available to A&B Shareholders, Net of Taxes
|
4.4
|
|
|
3.7
|
|
|
7.4
|
|
|
212.2
|
|
||||
Income from discontinuing operations
|
2.4
|
|
|
0.8
|
|
|
(0.8
|
)
|
|
—
|
|
||||
Net Income Available to A&B Shareholders
|
$
|
6.8
|
|
|
$
|
4.5
|
|
|
$
|
6.6
|
|
|
$
|
212.2
|
|
|
|
2017
|
||||||||||||||
|
Q1
|
|
Q2
|
|
Q3
|
|
Q4
|
|||||||||
Earnings (Loss) Per Share Available to A&B Shareholders:
|
|
|
|
|
|
|
|
|||||||||
|
Basic Earnings (Loss) Per Share of Common Stock:
|
|
|
|
|
|
|
|
||||||||
|
Continuing operations available to A&B shareholders
|
$
|
0.09
|
|
|
$
|
0.08
|
|
|
$
|
0.15
|
|
|
$
|
4.31
|
|
|
Discontinued operations available to A&B shareholders
|
0.05
|
|
|
0.02
|
|
|
(0.02
|
)
|
|
—
|
|
||||
|
Net income available to A&B shareholders
|
$
|
0.14
|
|
|
$
|
0.10
|
|
|
$
|
0.13
|
|
|
$
|
4.31
|
|
|
Diluted Earnings (Loss) Per Share of Common Stock:
|
|
|
|
|
|
|
|
||||||||
|
Continuing operations available to A&B shareholders
|
$
|
0.09
|
|
|
$
|
0.07
|
|
|
$
|
0.15
|
|
|
$
|
3.42
|
|
|
Discontinued operations available to A&B shareholders
|
0.05
|
|
|
0.02
|
|
|
(0.02
|
)
|
|
—
|
|
||||
|
Net income available to A&B shareholders
|
$
|
0.14
|
|
|
$
|
0.09
|
|
|
$
|
0.13
|
|
|
$
|
3.42
|
|
|
|
|
|
|
|
|
|
|
||||||||
Weighted-Average Number of Shares Outstanding:
|
|
|
|
|
|
|
|
|||||||||
|
Basic
|
49.1
|
|
|
49.2
|
|
|
49.2
|
|
|
49.2
|
|
||||
|
Diluted
8
|
49.6
|
|
|
49.6
|
|
|
49.6
|
|
|
62.0
|
|
|
2016
|
||||||||||||||
|
Q1
|
|
Q2
|
|
Q3
|
|
Q4
|
||||||||
Revenue:
|
|
|
|
|
|
|
|
||||||||
Commercial Real Estate
|
$
|
34.8
|
|
|
$
|
34.5
|
|
|
$
|
32.7
|
|
|
$
|
32.7
|
|
Land Operations
|
6.0
|
|
|
5.5
|
|
|
18.1
|
|
|
32.3
|
|
||||
Materials & Construction
|
50.6
|
|
|
42.0
|
|
|
52.1
|
|
|
46.2
|
|
||||
Total revenue
|
91.4
|
|
|
82.0
|
|
|
102.9
|
|
|
111.2
|
|
||||
Operating Profit (Loss):
|
|
|
|
|
|
|
|
||||||||
Commercial Real Estate
1,2
|
14.2
|
|
|
13.6
|
|
|
13.5
|
|
|
13.5
|
|
||||
Land Operations
3
|
(4.3
|
)
|
|
(10.4
|
)
|
|
7.8
|
|
|
13.9
|
|
||||
Materials & Construction
4
|
8.0
|
|
|
4.9
|
|
|
5.6
|
|
|
4.8
|
|
||||
Total operating profit
|
17.9
|
|
|
8.1
|
|
|
26.9
|
|
|
32.2
|
|
||||
Interest expense
|
(6.9
|
)
|
|
(6.8
|
)
|
|
(6.4
|
)
|
|
(6.2
|
)
|
||||
General corporate expenses
|
(6.9
|
)
|
|
(4.0
|
)
|
|
(5.5
|
)
|
|
(5.7
|
)
|
||||
REIT evaluation/conversion costs
5
|
—
|
|
|
(1.9
|
)
|
|
(1.9
|
)
|
|
(5.7
|
)
|
||||
Income (Loss) from Continuing Operations Before Income Taxes and Net Gain on Sale of Improved Properties
|
4.1
|
|
|
(4.6
|
)
|
|
13.1
|
|
|
14.6
|
|
||||
Income tax benefit (expense)
6
|
(0.3
|
)
|
|
2.8
|
|
|
(1.0
|
)
|
|
(1.0
|
)
|
||||
Income (Loss) From Continuing Operations Before Net Gain on Sale of Improved Properties
|
3.8
|
|
|
(1.8
|
)
|
|
12.1
|
|
|
13.6
|
|
||||
Net gain on the sale of improved properties, net of income taxes
7
|
—
|
|
|
4.9
|
|
|
0.1
|
|
|
—
|
|
||||
Income From Continuing Operations
|
3.8
|
|
|
3.1
|
|
|
12.2
|
|
|
13.6
|
|
||||
Loss from discontinued operations, net of income taxes
|
(10.8
|
)
|
|
(3.7
|
)
|
|
(13.6
|
)
|
|
(13.0
|
)
|
||||
Net Income (Loss)
|
(7.0
|
)
|
|
(0.6
|
)
|
|
(1.4
|
)
|
|
0.6
|
|
||||
Income attributable to noncontrolling interest
|
(0.5
|
)
|
|
(0.1
|
)
|
|
(0.5
|
)
|
|
(0.7
|
)
|
||||
Net Loss Attributable to A&B
|
$
|
(7.5
|
)
|
|
$
|
(0.7
|
)
|
|
$
|
(1.9
|
)
|
|
$
|
(0.1
|
)
|
|
|
|
|
|
|
|
|
||||||||
Amounts Available to A&B Shareholders:
|
|
|
|
|
|
|
|
||||||||
Income from Continuing Operations, Net of Taxes
|
$
|
3.8
|
|
|
$
|
3.1
|
|
|
$
|
12.2
|
|
|
$
|
13.6
|
|
Less: Income attributable to noncontrolling interests
|
(0.5
|
)
|
|
(0.1
|
)
|
|
(0.5
|
)
|
|
(0.7
|
)
|
||||
Income from Continuing Operations Attributable to A&B Shareholders, Net of Taxes
|
3.3
|
|
|
3.0
|
|
|
11.7
|
|
|
12.9
|
|
||||
Less: Undistributed earnings allocated to redeemable noncontrolling interest
|
0.4
|
|
|
0.1
|
|
|
0.4
|
|
|
0.4
|
|
||||
Income from Continuing Operations Available to A&B Shareholders, Net of Taxes
|
3.7
|
|
|
3.1
|
|
|
12.1
|
|
|
13.3
|
|
||||
Income from discontinuing operations
|
(10.8
|
)
|
|
(3.7
|
)
|
|
(13.6
|
)
|
|
(13.0
|
)
|
||||
Net Income (Loss) Available to A&B Shareholders
|
$
|
(7.1
|
)
|
|
$
|
(0.6
|
)
|
|
$
|
(1.5
|
)
|
|
$
|
0.3
|
|
|
|
2016
|
||||||||||||||
|
Q1
|
|
Q2
|
|
Q3
|
|
Q4
|
|||||||||
Earnings (Loss) Per Share Available to A&B Shareholders:
|
|
|
|
|
|
|
|
|||||||||
|
Basic Earnings (Loss) Per Share of Common Stock:
|
|
|
|
|
|
|
|
||||||||
|
Continuing operations available to A&B shareholders
|
$
|
0.08
|
|
|
$
|
0.06
|
|
|
$
|
0.25
|
|
|
$
|
0.27
|
|
|
Discontinued operations available to A&B shareholders
|
(0.23
|
)
|
|
(0.07
|
)
|
|
(0.28
|
)
|
|
(0.26
|
)
|
||||
|
Net income (loss) available to A&B shareholders
|
$
|
(0.15
|
)
|
|
$
|
(0.01
|
)
|
|
$
|
(0.03
|
)
|
|
$
|
0.01
|
|
|
Diluted Earnings (Loss) Per Share of Common Stock:
|
|
|
|
|
|
|
|
||||||||
|
Continuing operations available to A&B shareholders
|
$
|
0.08
|
|
|
$
|
0.06
|
|
|
$
|
0.24
|
|
|
$
|
0.27
|
|
|
Discontinued operations available to A&B shareholders
|
(0.22
|
)
|
|
(0.07
|
)
|
|
(0.28
|
)
|
|
(0.26
|
)
|
||||
|
Net income (loss) available to A&B shareholders
|
$
|
(0.14
|
)
|
|
$
|
(0.01
|
)
|
|
$
|
(0.04
|
)
|
|
$
|
0.01
|
|
|
|
|
|
|
|
|
|
|
||||||||
Weighted-Average Number of Shares Outstanding:
|
|
|
|
|
|
|
|
|||||||||
|
Basic
|
48.9
|
|
|
49.0
|
|
|
49.0
|
|
|
49.0
|
|
||||
|
Diluted
|
49.3
|
|
|
49.4
|
|
|
49.4
|
|
|
49.4
|
|
1
|
Commercial Real Estate operating profit includes intersegment operating revenue, primarily from our Materials & Construction segment, and is eliminated in our consolidated results of operations.
|
2
|
Commercial Real Estate operating profit includes
$22.4 million
of impairments of real estate for three mainland properties classified as held for sale as of
December 31, 2017
.
|
3
|
During the fourth quarter of 2016, the Company recorded
$11.7 million
of non-cash impairment charges related to certain non-active, long-term development projects.
|
4
|
During the year ended December 31, 2016, the Company recorded charges of
$2.6 million
for environmental costs related to the management of a former quarry site, a gain of
$0.6 million
on the sale of a vacant non-core land parcel in the fourth quarter of 2016, and a loss of
$1.6 million
related to the sale of vacant non-core land parcel by an unconsolidated affiliate in the third quarter of 2016.
|
5
|
Costs related to the Company's in-depth evaluation of a REIT conversion.
|
6
|
The Company has completed a conversion process to comply with the requirements to be treated as a REIT for federal income tax purposes commencing with the taxable year ended December 31, 2017. As a result, the income tax provision for the quarter ended December 31, 2017 included a
$223 million
deferred tax benefit related to the de-recognition of the deferred tax assets and liabilities associated with the entities included in the REIT. The income tax provision for the quarter ended December 31, 2016 included non-cash reductions in the carrying value of A&B’s KRS II and Waihonu joint venture solar investments. Tax benefits associated with the KRS II and Waihonu investments are included in the Income tax expense line item in the Consolidated Statements of Operations.
|
7
|
Amounts in 2017 represent the sales of
one
office building in Maui, Hawai`i in January 2017 and
one
industrial property in California in November 2017. Amounts in 2016 represent the sales of
two
California and
one
Utah office properties in June 2016. Amounts in 2015 represent the sales of
one
Colorado retail property in March 2015,
one
Texas office building in May 2015, and
one
Washington office building in December 2015.
|
20.
|
SUBSEQUENT EVENTS
|
(a)
|
Disclosure Controls and Procedures
|
•
|
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.
|
(in millions)
|
|
Initial Cost
|
Costs Capitalized Subsequent to Acquisition
|
Gross Amounts of 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 |
||||||||||||||||||
Commercial Real Estate Segment
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||
Industrial :
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||
Honokohau Industrial (HI)
|
$
|
—
|
|
$
|
4.9
|
|
$
|
4.8
|
|
$
|
—
|
|
$
|
—
|
|
$
|
4.9
|
|
$
|
4.8
|
|
$
|
9.7
|
|
$
|
(0.1
|
)
|
Various
|
2017
|
Kailua Industrial/Other (HI)
|
—
|
|
10.5
|
|
2.0
|
|
0.1
|
|
—
|
|
10.5
|
|
2.1
|
|
12.6
|
|
(0.3
|
)
|
Various
|
2013
|
|||||||||
Kaka'ako Commerce Center (HI)
|
—
|
|
16.9
|
|
20.6
|
|
1.2
|
|
—
|
|
16.9
|
|
21.8
|
|
38.7
|
|
(1.6
|
)
|
1969
|
2014
|
|||||||||
Komohana Industrial Park (HI)
|
—
|
|
25.2
|
|
10.8
|
|
0.6
|
|
—
|
|
25.2
|
|
11.4
|
|
36.6
|
|
(2.3
|
)
|
1990
|
2010
|
|||||||||
P&L Warehouse (HI)
|
—
|
|
—
|
|
—
|
|
1.2
|
|
—
|
|
—
|
|
1.2
|
|
1.2
|
|
(0.7
|
)
|
1970
|
1970
|
|||||||||
Port Allen (HI)
|
—
|
|
—
|
|
0.7
|
|
2.4
|
|
—
|
|
—
|
|
3.1
|
|
3.1
|
|
(2.0
|
)
|
1983, 1993
|
1983-1993
|
|||||||||
Sparks Business Center (NV)
|
—
|
|
3.2
|
|
17.2
|
|
3.3
|
|
—
|
|
3.2
|
|
20.5
|
|
23.7
|
|
(8.9
|
)
|
1996-1998
|
2002
|
|||||||||
Waipio Industrial (HI)
|
—
|
|
19.6
|
|
7.7
|
|
0.1
|
|
—
|
|
19.6
|
|
7.8
|
|
27.4
|
|
(1.9
|
)
|
1988-1989
|
2009
|
|||||||||
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||
Office :
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||
1800 and 1820 Preston Park (TX) (4)
|
—
|
|
4.5
|
|
19.9
|
|
7.5
|
|
(0.5
|
)
|
4.5
|
|
26.9
|
|
31.4
|
|
(8.6
|
)
|
1997, 1998
|
2006
|
|||||||||
Concorde Commerce Center (AZ) (4)
|
—
|
|
3.9
|
|
20.9
|
|
6.3
|
|
(12.9
|
)
|
3.9
|
|
14.3
|
|
18.2
|
|
(9.0
|
)
|
1998
|
2006
|
|||||||||
Deer Valley Financial Center (AZ) (4)
|
—
|
|
3.4
|
|
19.2
|
|
5.4
|
|
(5.4
|
)
|
3.4
|
|
19.2
|
|
22.6
|
|
(8.5
|
)
|
2001
|
2005
|
|||||||||
Judd Building (HI)
|
—
|
|
1.0
|
|
2.1
|
|
2.3
|
|
—
|
|
1.0
|
|
4.4
|
|
5.4
|
|
(1.9
|
)
|
1898, 1979
|
2000
|
|||||||||
Kahului Office Building (HI)
|
—
|
|
1.0
|
|
0.4
|
|
6.9
|
|
—
|
|
1.0
|
|
7.3
|
|
8.3
|
|
(8.0
|
)
|
1974
|
1989
|
|||||||||
Kahului Office Center (HI)
|
—
|
|
—
|
|
—
|
|
5.7
|
|
—
|
|
—
|
|
5.7
|
|
5.7
|
|
(4.1
|
)
|
1991
|
1991
|
|||||||||
Lono Center (HI)
|
—
|
|
—
|
|
1.4
|
|
1.2
|
|
—
|
|
—
|
|
2.6
|
|
2.6
|
|
(1.5
|
)
|
1973
|
1991
|
|||||||||
Gateway at Mililani Mauka South (HI)
|
—
|
|
7.0
|
|
3.5
|
|
5.8
|
|
—
|
|
7.0
|
|
9.3
|
|
16.3
|
|
(0.8
|
)
|
1992, 2006
|
2012
|
|||||||||
Stangenwald Building (HI)
|
—
|
|
1.8
|
|
1.0
|
|
1.4
|
|
—
|
|
1.8
|
|
2.4
|
|
4.2
|
|
(1.1
|
)
|
1901, 1980
|
1996
|
|||||||||
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||
Retail :
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||
Aikahi Park Shopping Center (HI)
|
—
|
|
23.5
|
|
6.7
|
|
0.5
|
|
—
|
|
23.5
|
|
7.2
|
|
30.7
|
|
(1.3
|
)
|
1971
|
2015
|
|||||||||
Gateway at Mililani Mauka (HI)
|
—
|
|
7.3
|
|
4.7
|
|
5.7
|
|
—
|
|
7.3
|
|
10.4
|
|
17.7
|
|
(1.1
|
)
|
2008, 2013
|
2011
|
|||||||||
Kahului Shopping Center (HI)
|
—
|
|
—
|
|
—
|
|
2.3
|
|
—
|
|
—
|
|
2.3
|
|
2.3
|
|
(1.3
|
)
|
1951
|
1951
|
|||||||||
Kailua Retail Other (HI)
|
15.7
|
|
84.0
|
|
73.8
|
|
6.8
|
|
—
|
|
84.0
|
|
80.6
|
|
164.6
|
|
(9.3
|
)
|
Various
|
2013
|
|||||||||
Kaneohe Bay Shopping Ctr. (HI)
|
—
|
|
—
|
|
13.4
|
|
2.2
|
|
—
|
|
—
|
|
15.6
|
|
15.6
|
|
(6.3
|
)
|
1971
|
2001
|
|||||||||
Kunia Shopping Center (HI)
|
—
|
|
2.7
|
|
10.6
|
|
1.4
|
|
—
|
|
2.7
|
|
12.0
|
|
14.7
|
|
(4.5
|
)
|
2004
|
2002
|
|||||||||
Lahaina Square (HI)
|
—
|
|
4.6
|
|
3.7
|
|
2.7
|
|
—
|
|
4.6
|
|
6.4
|
|
11.0
|
|
(0.8
|
)
|
1973
|
2010
|
|||||||||
Lanihau Marketplace (HI)
|
—
|
|
9.4
|
|
13.2
|
|
2.1
|
|
—
|
|
9.4
|
|
15.3
|
|
24.7
|
|
(3.1
|
)
|
1987
|
2010
|
|||||||||
Little Cottonwood Center (UT)
|
—
|
|
12.2
|
|
9.1
|
|
1.4
|
|
—
|
|
12.2
|
|
10.5
|
|
22.7
|
|
(2.2
|
)
|
1998, 2008
|
2010
|
|||||||||
Manoa Marketplace (HI)
|
60.0
|
|
43.3
|
|
35.9
|
|
1.2
|
|
—
|
|
43.3
|
|
37.1
|
|
80.4
|
|
(2.2
|
)
|
1977
|
2016
|
|||||||||
Napili Plaza (HI)
|
—
|
|
9.4
|
|
8.0
|
|
0.6
|
|
—
|
|
9.4
|
|
8.6
|
|
18.0
|
|
(1.5
|
)
|
1991
|
2003, 2013
|
|||||||||
Pearl Highlands Center (HI)
|
87.0
|
|
43.4
|
|
96.2
|
|
7.9
|
|
—
|
|
43.4
|
|
104.1
|
|
147.5
|
|
(13.2
|
)
|
1992-1994
|
2013
|
|||||||||
Port Allen Marina Ctr. (HI)
|
—
|
|
—
|
|
3.4
|
|
1.1
|
|
—
|
|
—
|
|
4.5
|
|
4.5
|
|
(2.2
|
)
|
2002
|
1971
|
|||||||||
Royal MacArthur Center (TX)
|
—
|
|
3.5
|
|
10.1
|
|
2.7
|
|
—
|
|
3.5
|
|
12.8
|
|
16.3
|
|
(3.7
|
)
|
2006
|
2007
|
|||||||||
The Shops at Kukui'ula (HI)
|
—
|
|
8.9
|
|
30.1
|
|
3.5
|
|
—
|
|
8.9
|
|
33.6
|
|
42.5
|
|
(4.1
|
)
|
2009
|
2013
|
|||||||||
Waianae Mall (HI)
|
—
|
|
17.4
|
|
10.1
|
|
4.3
|
|
—
|
|
17.4
|
|
14.4
|
|
31.8
|
|
(2.1
|
)
|
1975
|
2013
|
|||||||||
Waipio Shopping Center (HI)
|
—
|
|
24.0
|
|
7.6
|
|
0.7
|
|
—
|
|
24.0
|
|
8.3
|
|
32.3
|
|
(1.8
|
)
|
1986, 2004
|
2009
|
|||||||||
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||
Other :
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||
Ho'okele Shopping Center (HI)
|
—
|
|
—
|
|
—
|
|
5.5
|
|
—
|
|
—
|
|
5.5
|
|
5.5
|
|
—
|
|
2017
|
|
|||||||||
Oahu Ground Leases (HI)
|
—
|
|
170.5
|
|
0.6
|
|
—
|
|
—
|
|
170.5
|
|
0.6
|
|
171.1
|
|
(0.1
|
)
|
|
2013
|
|||||||||
Other miscellaneous investments
|
—
|
|
2.6
|
|
0.1
|
|
18.5
|
|
—
|
|
2.6
|
|
18.6
|
|
21.2
|
|
(7.7
|
)
|
|
|
|||||||||
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||
Total
|
$
|
162.7
|
|
$
|
569.6
|
|
$
|
469.5
|
|
$
|
122.5
|
|
$
|
(18.8
|
)
|
$
|
569.6
|
|
$
|
573.2
|
|
$
|
1,142.8
|
|
$
|
(129.8
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||
Total for Hawai`i
|
$
|
162.7
|
|
$
|
538.9
|
|
$
|
373.1
|
|
$
|
95.9
|
|
$
|
—
|
|
$
|
538.9
|
|
$
|
469.0
|
|
$
|
1,007.9
|
|
$
|
(88.9
|
)
|
|
|
Total for U.S. Mainland
|
—
|
|
30.7
|
|
96.4
|
|
26.6
|
|
(18.8
|
)
|
30.7
|
|
104.2
|
|
134.9
|
|
(40.9
|
)
|
|
|
|||||||||
Total
|
$
|
162.7
|
|
$
|
569.6
|
|
$
|
469.5
|
|
$
|
122.5
|
|
$
|
(18.8
|
)
|
$
|
569.6
|
|
$
|
573.2
|
|
$
|
1,142.8
|
|
$
|
(129.8
|
)
|
|
|
Description (amounts in millions)
|
Encum-
brances (1) |
Land
|
Buildings and Improvements
|
Improvements
|
Carrying Costs
|
Land
|
Buildings and Improvements
|
Total (2)
|
Accumulated
Depreciation (3) |
||||||||||||||||||
Land Operations Segment
|
|
|
|
|
|
|
|
||||||||||||||||||||
Agricultural Land
|
$
|
—
|
|
$
|
9.7
|
|
$
|
—
|
|
$
|
—
|
|
$
|
—
|
|
$
|
9.7
|
|
$
|
—
|
|
$
|
9.7
|
|
$
|
—
|
|
Aina ‘O Kane
|
—
|
|
—
|
|
—
|
|
1.2
|
|
—
|
|
—
|
|
1.2
|
|
$
|
1.2
|
|
—
|
|
||||||||
Brydeswood
|
—
|
|
—
|
|
—
|
|
0.6
|
|
—
|
|
—
|
|
0.6
|
|
$
|
0.6
|
|
—
|
|
||||||||
Grove Ranch
|
—
|
|
—
|
|
—
|
|
1.5
|
|
—
|
|
—
|
|
1.5
|
|
$
|
1.5
|
|
—
|
|
||||||||
Haliimaile
|
—
|
|
—
|
|
—
|
|
0.8
|
|
—
|
|
—
|
|
0.8
|
|
$
|
0.8
|
|
—
|
|
||||||||
Kahala Portfolio
|
—
|
|
34.4
|
|
—
|
|
—
|
|
—
|
|
34.4
|
|
—
|
|
$
|
34.4
|
|
—
|
|
||||||||
Kamalani
|
—
|
|
—
|
|
—
|
|
26.5
|
|
—
|
|
—
|
|
26.5
|
|
$
|
26.5
|
|
—
|
|
||||||||
Maui Business Park II
|
—
|
|
—
|
|
—
|
|
38.3
|
|
—
|
|
—
|
|
38.3
|
|
$
|
38.3
|
|
—
|
|
||||||||
The Ridge at Wailea (MF-19)
|
—
|
|
1.7
|
|
—
|
|
6.2
|
|
—
|
|
1.7
|
|
6.2
|
|
$
|
7.9
|
|
—
|
|
||||||||
Waiale Community
|
—
|
|
—
|
|
—
|
|
1.8
|
|
—
|
|
—
|
|
1.8
|
|
$
|
1.8
|
|
—
|
|
||||||||
Wailea B-1
|
—
|
|
4.6
|
|
—
|
|
—
|
|
—
|
|
4.6
|
|
—
|
|
$
|
4.6
|
|
—
|
|
||||||||
Wailea B-II
|
—
|
|
3.3
|
|
—
|
|
—
|
|
—
|
|
3.3
|
|
—
|
|
$
|
3.3
|
|
—
|
|
||||||||
Wailea MF-7
|
—
|
|
2.9
|
|
—
|
|
5.9
|
|
—
|
|
2.9
|
|
5.9
|
|
$
|
8.8
|
|
—
|
|
||||||||
Wailea SF-S
|
—
|
|
4.0
|
|
—
|
|
—
|
|
—
|
|
4.0
|
|
—
|
|
$
|
4.0
|
|
—
|
|
||||||||
Wailea SF-8
|
—
|
|
1.3
|
|
—
|
|
—
|
|
—
|
|
1.3
|
|
—
|
|
$
|
1.3
|
|
—
|
|
||||||||
Wailea, other
|
—
|
|
15.3
|
|
—
|
|
8.3
|
|
—
|
|
15.3
|
|
8.3
|
|
$
|
23.6
|
|
—
|
|
||||||||
Other Kauai landholdings
|
—
|
|
—
|
|
0.1
|
|
13.4
|
|
(9.1
|
)
|
—
|
|
4.4
|
|
$
|
4.4
|
|
(0.6
|
)
|
||||||||
Other Maui Landholdings
|
—
|
|
0.2
|
|
0.2
|
|
1.4
|
|
—
|
|
0.2
|
|
1.6
|
|
$
|
1.8
|
|
(0.7
|
)
|
||||||||
Other miscellaneous investments
|
—
|
|
3.1
|
|
1.1
|
|
6.1
|
|
(2.5
|
)
|
3.1
|
|
4.7
|
|
$
|
7.8
|
|
(2.4
|
)
|
||||||||
Total
|
$
|
—
|
|
$
|
80.5
|
|
$
|
1.4
|
|
$
|
112.0
|
|
$
|
(11.6
|
)
|
$
|
80.5
|
|
$
|
101.8
|
|
$
|
182.3
|
|
$
|
(3.7
|
)
|
(1)
|
See Note 8 to consolidated financial statements.
|
(2)
|
The aggregate tax basis, as of
December 31, 2017
, for the Commercial Real Estate segment and Land Operations segment assets was approximately
$633.3 million
, including outside tax basis of consolidated joint venture investments.
|
(3)
|
Depreciation is computed based upon the following estimated useful lives:
|
(4)
|
During the fourth quarter of
2017
, the Company recorded impairment charges of
$0.5 million
,
$12.9 million
, and
$5.4 million
for 1800 and 1820 Preston Park, Concorde Commerce Center, and Deer Valley Financial Center, respectively. See Note 2 "Significant Accounting Policies" for additional information
.
|
Reconciliation of Real Estate (in millions)
|
2017
|
|
2016
|
|
2015
|
||||||
Balance at beginning of year
|
$
|
1,352.7
|
|
|
$
|
1,332.5
|
|
|
$
|
1,397.1
|
|
Additions and improvements
|
57.8
|
|
|
118.8
|
|
|
32.2
|
|
|||
Dispositions, retirements and other adjustments
|
(66.6
|
)
|
|
(87.0
|
)
|
|
(96.8
|
)
|
|||
Impairment of real estate assets
|
(18.8
|
)
|
|
(11.6
|
)
|
|
—
|
|
|||
Balance at end of year
|
$
|
1,325.1
|
|
|
$
|
1,352.7
|
|
|
$
|
1,332.5
|
|
Reconciliation of Accumulated Depreciation (in millions)
|
2017
|
|
2016
|
|
2015
|
||||||
Balance at beginning of year
|
$
|
122.7
|
|
|
$
|
128.0
|
|
|
$
|
120.5
|
|
Depreciation expense
|
18.8
|
|
|
20.2
|
|
|
20.5
|
|
|||
Dispositions, retirements and other adjustments
|
(8.0
|
)
|
|
(25.5
|
)
|
|
(13.0
|
)
|
|||
Balance at end of year
|
$
|
133.5
|
|
|
$
|
122.7
|
|
|
$
|
128.0
|
|
|
|
ALEXANDER & BALDWIN, INC.
|
|
|
(Registrant)
|
|
|
|
|
|
|
March 1, 2018
|
|
By: /s/ Christopher J. Benjamin
|
|
|
Christopher J. Benjamin
|
|
|
President and Chief Executive Officer
|
Signature
|
|
Title
|
|
Date
|
|
|
|
|
|
/s/ Stanley M. Kuriyama
|
|
Chairman of the Board
|
|
March 1, 2018
|
Stanley M. Kuriyama
|
|
|
|
|
|
|
|
|
|
/s/ Christopher J. Benjamin
|
|
President, Chief Executive
|
|
March 1, 2018
|
Christopher J. Benjamin
|
|
Officer, and Director
|
|
|
|
|
|
|
|
/s/ James E. Mead
|
|
Executive Vice President and
|
|
March 1, 2018
|
James E. Mead
|
|
Chief Financial Officer
|
|
|
|
|
|
|
|
/s/ Clayton K.Y. Chun
|
|
Vice President, Chief
|
|
March 1, 2018
|
Clayton K.Y. Chun
|
|
Accounting Officer and Controller
|
|
|
|
|
|
|
|
/s/ W. Allen Doane
|
|
Director
|
|
March 1, 2018
|
W. Allen Doane
|
|
|
|
|
|
|
|
|
|
/s/ Robert S. Harrison
|
|
Director
|
|
March 1, 2018
|
Robert S. Harrison
|
|
|
|
|
|
|
|
|
|
/s/ David C. Hulihee
|
|
Director
|
|
March 1, 2018
|
David C. Hulihee
|
|
|
|
|
|
|
|
|
|
/s/ Charles G. King
|
|
Lead Independent Director
|
|
March 1, 2018
|
Charles G. King
|
|
|
|
|
|
|
|
|
|
/s/ Thomas A. Lewis, Jr.
|
|
Director
|
|
March 1, 2018
|
Thomas A. Lewis, Jr.
|
|
|
|
|
|
|
|
|
|
/s/ Douglas M. Pasquale
|
|
Director
|
|
March 1, 2018
|
Douglas M. Pasquale
|
|
|
|
|
|
|
|
|
|
/s/ Michele K. Saito
|
|
Director
|
|
March 1, 2018
|
Michele K. Saito
|
|
|
|
|
|
|
|
|
|
/s/ Jenai S. Wall
|
|
Director
|
|
March 1, 2018
|
Jenai S. Wall
|
|
|
|
|
|
|
|
|
|
/s/ Eric K. Yeaman
|
|
Director
|
|
March 1, 2018
|
Eric K. Yeaman
|
|
|
|
|
Re:
|
Second Amendment to Second Amended
and
Restated
Note
Purchase
and Private Shelf Agreement
|
1.2
|
Paragraph 10B is amended by amending and restating the following terms:
|
1.4
|
A new paragraph 12S is inserted in the Agreement, as follows:
|
6.
|
Miscellaneous
.
|
Name of Subsidiary
|
State or Other Jurisdiction
Under Which Organized
|
|
SUBSIDIARIES AND RELATED ENTITIES*
|
|
|
Alexander & Baldwin Investments, LLC
|
Delaware
|
|
Alexander & Baldwin, LLC
|
Delaware
|
|
Alexander & Baldwin, LLC, Series R
|
Delaware
|
|
A&B Deer Valley LLC
|
Delaware
|
|
A&B Gateway LLC
|
Hawaii
|
|
A&B Little Cottonwood LLC
|
Delaware
|
|
A&B Lot 100 LLC
|
Hawaii
|
|
A&B Mililani Investment LLC
|
Hawaii
|
|
A&B Napili LLC
|
Hawaii
|
|
A & B Properties Hawaii, LLC, Series R
|
Delaware
|
|
A&B Lanihau LLC
|
Hawaii
|
|
A&B Manoa LLC
|
Hawaii
|
|
A&B Ninigret LLC
|
Hawaii
|
|
A&B P&L LLC
|
Hawaii
|
|
A&B Visalia 1 LLC
|
Hawaii
|
|
A&B Visalia 3 LLC
|
Delaware
|
|
A&B Wailea LLC
|
Hawaii
|
|
A&B Waipio 100 LLC
|
Hawaii
|
|
A&B Waipio Shopping Center LLC
|
Hawaii
|
|
AB Properties Concorde LLC
|
Hawaii
|
|
ABP Deer Valley LLC
|
Delaware
|
|
ABP E1 LLC
|
Hawaii
|
|
ABP ER1 LLC***
|
Hawaii
|
|
ABP Honokohau LLC
|
Hawaii
|
|
ABP Kailua Road LLC
|
Hawaii
|
|
ABP Kakaako Commerce 1 LLC
|
Hawaii
|
|
ABP Kakaako Commerce 2 LLC
|
Hawaii
|
|
ABP Komohana LLC
|
Hawaii
|
|
ABP KR1 LLC***
|
Hawaii
|
|
ABP KR2 LLC***
|
Hawaii
|
|
ABP KR3 LLC***
|
Hawaii
|
|
ABP LR1 LLC***
|
Hawaii
|
|
ABP LR2 LLC***
|
Hawaii
|
|
ABP LR3 LLC***
|
Hawaii
|
|
ABP Manoa Marketplace LH LLC
|
Hawaii
|
|
ABP Mililani Gateway LLC
|
Hawaii
|
|
ABP Mililani Gateway South LLC
|
Hawaii
|
|
ABP Napili LLC
|
Hawaii
|
|
ABP Pearl Highlands LLC
|
Hawaii
|
Name of Subsidiary
|
State or Other Jurisdiction
Under Which Organized
|
|
ABP Residuary LLC
|
Hawaii
|
|
ABP 2927 East Manoa Road LLC
|
Hawaii
|
|
ABP Ulupuni LLC
|
Hawaii
|
|
ABP Windward LLC
|
Hawaii
|
|
Aikahi Park Holdings LLC
|
Hawaii
|
|
EOK Kihei LLC
|
Hawaii
|
|
Kahului Town Center LLC
|
Hawaii
|
|
KKV Management LLC
|
Hawaii
|
|
Palmdale Trade & Commerce Center,
|
California
|
|
LLC**
|
|
|
Panama and Gosford Retail, LLC**
|
California
|
|
Port Allen Residential LLC
|
Hawaii
|
|
Rye Canyon Office Partners, LLC**
|
California
|
|
Square One Lahaina LLC
|
Hawaii
|
|
Wailea Estates LLC
|
Hawaii
|
|
WDCI Deer Valley LLC
|
Delaware
|
|
WDCI Komohana LLC
|
Hawaii
|
|
A&B Waianae LLC
|
Delaware
|
|
AB Hawaii Royal MacArthur LLC
|
Hawaii
|
|
ABI Concorde LLC
|
Hawaii
|
|
ABI Mililani Gateway South LLC
|
Hawaii
|
|
ABL Ag. LLC
|
Hawaii
|
|
ABL Exchange LLC
|
Hawaii
|
|
ABL Hahani LLC
|
Hawaii
|
|
ABL Hamakua LLC
|
Hawaii
|
|
ABL Kakaako Commerce 1 LLC
|
Hawaii
|
|
ABL Kakaako Commerce 2 LLC
|
Hawaii
|
|
ABL Kelo LLC
|
Hawaii
|
|
ABL Manoa Marketplace LF LLC
|
Hawaii
|
|
ABL Manoa Marketplace LH LLC
|
Hawaii
|
|
ABL 233 Lahainaluna Road LLC
|
Hawaii
|
|
ABX Napili LLC
|
Hawaii
|
|
DSD LLC
|
Hawaii
|
|
East Maui Landholdings, LLC
|
Hawaii
|
|
EMI Kakaako Commerce LLC
|
Hawaii
|
|
EMI Residuary LLC
|
Hawaii
|
|
Kukui’ula Acres LLC
|
Hawaii
|
|
Kukui’ula Village LLC**
|
Delaware
|
|
Kukui’ula Web IP LLC
|
Hawaii
|
|
Lodge IP LLC**
|
Hawaii
|
|
McBryde Sugar Company, LLC, Series R
|
Delaware
|
|
McBryde Concorde LLC
|
Hawaii
|
|
Alexander & Baldwin, LLC, Series T
|
Delaware
|
Name of Subsidiary
|
State or Other Jurisdiction
Under Which Organized
|
|
A&B KRS II LLC
|
Hawaii
|
|
A & B Properties Hawaii, LLC, Series T
|
Delaware
|
|
A&B Airport Hotel LLC
|
Hawaii
|
|
A&B Guam LLC
|
Hawaii
|
|
A&B Ka Milo LLC
|
Hawaii
|
|
A&B Kakaako LLC
|
Hawaii
|
|
A&B Kane LLC
|
Hawaii
|
|
A&B Kihei LLC
|
Hawaii
|
|
Kamalani Ventures LLC
|
Hawaii
|
|
A&B Kukui’ula Fairway Homes LLC
|
Hawaii
|
|
ABP-EWP Development LLC**
|
Hawaii
|
|
A&B MF-11 LLC
|
Hawaii
|
|
Keala O Wailea LLC**
|
Hawaii
|
|
A&B MLR LLC
|
Hawaii
|
|
MLR Golf Partners LLC**
|
Hawaii
|
|
A&B Riverside LLC
|
Hawaii
|
|
A&B Santa Barbara LLC
|
Hawaii
|
|
Santa Barbara Land and Ranching
|
Delaware
|
|
Company, LLC**
|
|
|
A&B Waiawa LLC
|
Hawaii
|
|
A&B Waikiki LLC
|
Hawaii
|
|
A&B Wailea Ridge Holdings LLC
|
Hawaii
|
|
Blacksand Hawaii Investment LLC
|
Hawaii
|
|
EOK 4607 LLC
|
Hawaii
|
|
4607 Kahala LLC**
|
Hawaii
|
|
Estates of Kahala LLC
|
Hawaii
|
|
Keawe Development LLC
|
Hawaii
|
|
The Collection LLC**
|
Hawaii
|
|
Wailea MF-7 LLC
|
Hawaii
|
|
Wailea MF-8 LLC
|
Hawaii
|
|
Kai Malu Wailea LLC**
|
Hawaii
|
|
Waimanu Development LLC
|
Hawaii
|
|
Kewalo Development LLC**
|
Hawaii
|
|
A&B II, LLC
|
Hawaii
|
|
A&B EKS Holdings LLC
|
Hawaii
|
|
A&B EKS LH LLC
|
Hawaii
|
|
Grace Pacific LLC
|
Hawaii
|
|
G P Maintenance Solutions, Inc.
|
Hawaii
|
|
G P Roadway Solutions, Inc.
|
Hawaii
|
|
GLP Asphalt LLC**
|
Hawaii
|
|
Grace Pacific Precast, Inc.
|
Hawaii
|
|
GP/RM Prestress, LLC**
|
Hawaii
|
|
Maui Paving, LLC**
|
Hawaii
|
Name of Subsidiary
|
State or Other Jurisdiction
Under Which Organized
|
|
Niu Construction, Inc.
|
Hawaii
|
|
Oahu Paving Company, Inc.
|
Hawaii
|
|
Pohaku Pa’a, LLC**
|
Hawaii
|
|
ABHI Management LLC
|
Hawaii
|
|
Agri-Quest Development Company, Inc.
|
Hawaii
|
|
Central Maui Feedstocks LLC
|
Hawaii
|
|
East Maui Irrigation Company, LLC
|
Hawaii
|
|
Kahului Trucking & Storage, Inc.
|
Hawaii
|
|
Kauai Commercial Company, Incorporated
|
Hawaii
|
|
KDC, LLC
|
Hawaii
|
|
BKDC Kauai Estates LLC**
|
Hawaii
|
|
Kukui’ula Development Company (Hawaii),
|
Hawaii
|
|
LLC
|
|
|
KDCH Workforce Housing LLC**
|
Hawaii
|
|
Koloa Housing I LLC**
|
Hawaii
|
|
Kukui’ula Makai LLC**
|
Hawaii
|
|
Kukui’ula Realty Group LLC**
|
Hawaii
|
|
Kukui’ula South Shore Community
|
Hawaii
|
|
Services, LLC**
|
|
|
Makai Cottage Model, LLC**
|
|
|
Kukui’ula Housing Development LLC**
|
Hawaii
|
|
Kukui’ula Model Home LLC**
|
Hawaii
|
|
Lodge Hale Development, LLC**
|
Hawaii
|
|
Kukui’ula Housing Development II, LLC**
|
Hawaii
|
|
Kainani Villas, LLC**
|
Hawaii
|
|
Kukui’ula Residential Development,
|
Hawaii
|
|
LLC**
|
|
|
Kukui’ula Development, LLC
|
Hawaii
|
|
South Shore Resources LLC
|
Hawaii
|
|
Kulolio Ranch LLC
|
Hawaii
|
|
McBryde Sugar Company, LLC, Series T
|
Delaware
|
|
McBryde Camp Housing LLC
|
Hawaii
|
|
McBryde Resources, Inc.
|
Hawaii
|
|
Ohanui Corporation
|
Hawaii
|
|
WTEI, LLC
|
Hawaii
|
|
WAISOLARTEI, Inc.
|
Hawaii
|
|
|
|
|
OTHER RELATED ENTITIES
|
|
|
Alexander & Baldwin Foundation
|
Hawaii
|
|
Alexander & Baldwin Sugar Museum
|
Hawaii
|
|
Brydeswood Water Company
|
Hawaii
|
|
Hawaiian Sugar & Transportation Cooperative
|
Hawaii
|
|
|
|
Name of Subsidiary
|
State or Other Jurisdiction
Under Which Organized
|
|
INACTIVE SUBSIDIARIES*
|
|
|
A & B Inc.
|
Hawaii
|
1.
|
I have reviewed this Annual Report on Form 10-K of Alexander & Baldwin, Inc.;
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
4.
|
The registrant's other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
(a)
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
(b)
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
(c)
|
Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
(d)
|
Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and
|
5.
|
The registrant's other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):
|
(a)
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and
|
(b)
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.
|
|
|
By /s/ Christopher J. Benjamin
|
|
|
Christopher J. Benjamin
|
|
|
President and Chief Executive Officer
|
Date:
|
March 1, 2018
|
|
1.
|
I have reviewed this Annual Report on Form 10-K of Alexander & Baldwin, Inc.;
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
4.
|
The registrant's other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
(a)
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
(b)
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
(c)
|
Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
(d)
|
Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and
|
5.
|
The registrant's other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):
|
(a)
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and
|
(b)
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.
|
|
|
By /s/ James E. Mead
|
|
|
James E. Mead
|
|
|
Executive Vice President and Chief Financial Officer
|
Date:
|
March 1, 2018
|
|
(1)
|
The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
|
(2)
|
The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
|
/
s/ Christopher J. Benjamin
|
|
Name:
|
Christopher J. Benjamin
|
Title:
|
President and Chief Executive Officer
|
Date:
|
March 1, 2018
|
/
s/ James E. Mead
|
|
Name:
|
James E. Mead
|
Title:
|
Executive Vice President and Chief Financial Officer
|
Date:
|
March 1, 2018
|
Total Number of S&S Citations
|
0
|
Mine Act § 104(b) Orders
|
0
|
Mine Act § 104(d) Citations and Orders
|
6
|
Mine Act § 110(b)(2) Violations
|
0
|
Mine Act § 107(a) Orders
|
0
|
Total Dollar Value of Proposed MSHA Assessments
|
$696
|
Total Number of Mining Related Fatalities
|
0
|
Received Written Notice of Pattern of Violation under Mine Act §104(e) (yes/no)
|
no
|
Received Written Notice of Potential to Have Pattern under Mine Act §104(e) (yes/no)
|
no
|
|
|
|
|
|
2014
|
||||
|
|
Assets
|
2015
|
|
(Unaudited)
|
||||
|
|
|
|
|
|
||||
Cash
|
$
|
2,573,165
|
|
|
$
|
485,513
|
|
||
Real Estate Development Costs
|
|
|
192,649,651
|
|
|||||
Deferred Financing Costs
|
|
|
8,901
|
|
|||||
|
|
Total Assets
|
$
|
2,573,165
|
|
|
$
|
193,144,065
|
|
|
|
|
|
|
|
||||
|
|
Liabilities and Members' Equity
|
|
|
|
||||
|
|
|
|
|
|
||||
Liabilities:
|
|
|
|
||||||
|
Contingency Reserve
|
$
|
2,457,823
|
|
|
$
|
96,596
|
|
|
|
Accounts Payable and Accrued Expenses
|
|
|
212,881
|
|
||||
|
Retention Payable
|
|
|
14,743,123
|
|
||||
|
Loan Payable
|
|
|
76,068,549
|
|
||||
|
Deposits
|
|
|
|
36,072,303
|
|
|||
|
|
Total Liabilities
|
2,457,823
|
|
|
127,193,452
|
|
||
|
|
|
|
|
|
||||
Members' Equity
|
115,342
|
|
|
65,950,613
|
|
||||
|
|
|
|
|
|
||||
|
|
|
$
|
2,573,165
|
|
|
$
|
193,144,065
|
|
|
|
|
|
|
2014
|
||||
|
|
|
2015
|
|
(Unaudited)
|
||||
|
|
|
|
|
|
||||
Real Estate Sales, Net
|
$
|
242,952,850
|
|
|
$
|
9,659,590
|
|
||
Cost of Sales
|
208,911,678
|
|
|
8,268,443
|
|
||||
|
|
|
34,041,172
|
|
|
1,391,147
|
|
||
|
|
|
|
|
|
||||
Operating Expenses
|
1,413
|
|
|
178,842
|
|
||||
|
|
|
|
|
|
||||
|
Operating Income
|
34,039,759
|
|
|
1,212,305
|
|
|||
|
|
|
|
|
|||||
Other Income (Expense):
|
|
|
|
||||||
|
Rental and Other Income
|
36,544
|
|
|
80,992
|
|
|||
|
Other Expense
|
(7,841
|
)
|
|
(8,994
|
)
|
|||
|
|
Net Income
|
34,068,462
|
|
|
1,284,303
|
|
||
|
|
|
|
|
|
||||
Members' Equity at Beginning of Year
|
65,950,613
|
|
|
53,092,321
|
|
||||
Member's Contributions
|
—
|
|
|
11,573,989
|
|
||||
Distributions to Members
|
(99,903,733
|
)
|
|
—
|
|
||||
|
|
|
|
|
|
||||
|
|
|
$
|
115,342
|
|
|
$
|
65,950,613
|
|
|
|
|
|
|
|
|
2014
|
||||
|
|
|
|
|
2015
|
|
(Unaudited)
|
||||
|
|
|
|
|
|
|
|
||||
Cash Flows from Operating Activities:
|
|
|
|
|
|||||||
|
Net Income
|
|
|
$
|
34,068,462
|
|
|
$
|
1,284,303
|
|
|
|
Adjustments to Reconcile Net Income to Net Cash Provided (Used In) Operating Activities:
|
|
|
|
|||||||
|
|
Real Estate Development Costs
|
192,649,651
|
|
|
(88,449,655
|
)
|
||||
|
|
Prepaid Expenses
|
8,901
|
|
|
134
|
|
||||
|
|
Contingency Reserve
|
2,361,227
|
|
|
96,596
|
|
||||
|
|
Accounts Payable and Accrued Expenses
|
(212,881
|
)
|
|
(8,962,494
|
)
|
||||
|
|
Retention Payable
|
(14,743,123
|
)
|
|
8,072,229
|
|
||||
|
|
Deposits
|
(36,072,303
|
)
|
|
(1,407,864
|
)
|
||||
|
|
|
Net Cash Provided by (Used In) Operating Activities
|
178,059,934
|
|
|
(89,366,751
|
)
|
|||
|
|
|
|
|
|
||||||
Cash Flows From Financing Activities:
|
|
|
|
||||||||
|
Distributions to Members
|
|
(99,903,733
|
)
|
|
—
|
|
||||
|
Principal Payment on Debt
|
|
(76,068,549
|
)
|
|
(7,878,179
|
)
|
||||
|
Proceeds From Issuance of Debt
|
|
—
|
|
|
83,946,728
|
|
||||
|
Contributions from Members
|
|
—
|
|
|
11,573,989
|
|
||||
|
|
Net Cash Provided by (Used In) Financing Activities
|
(175,972,282
|
)
|
|
87,642,538
|
|
||||
|
|
Net Increase (Decrease) in Cash
|
2,087,652
|
|
|
(1,724,213
|
)
|
||||
Cash at Beginning of Year
|
|
485,513
|
|
|
2,209,726
|
|
|||||
Cash at End of Year
|
|
$
|
2,573,165
|
|
|
$
|
485,513
|
|
|||
|
|
|
|
|
|
|
|
||||
Supplemental Cash Flow Information:
|
|
|
|
||||||||
|
Interest Paid
|
|
$
|
203,663
|
|
|
$
|
953,825
|
|
||
Supplemental Noncash Operating Information:
|
|
|
|
||||||||
|
Deferred Financing Cost Amortized to Real Estate Development Costs
|
$
|
—
|
|
|
$
|
882,826
|
|
|||
|
|
|
|
|
|
|
|
(1)
|
Organization and Description of Business
|
|
Economic
|
|
Voting
|
||
|
Interest
|
|
Interest
|
||
|
|
|
|
||
Waimanu Development LLC
|
50.000
|
%
|
|
50
|
%
|
N1189 LLC
|
19.231
|
%
|
|
25
|
%
|
BSC Waihonua LLC
|
29.231
|
%
|
|
23
|
%
|
Armstrong Homes, Ltd.
|
1.538
|
%
|
|
2
|
%
|
(2)
|
Summary of Significant Accounting Principles
|
(3)
|
Cash Reserve
|
(4)
|
Debt
|
(5)
|
Deferred Financing Costs
|
(6)
|
Related-Party Transactions
|
(7)
|
Commitments and Contingencies
|
(8)
|
Subsequent Events
|
KEWALO DEVELOPMENT LLC
|
||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
Statements of Operations and Changes in Members' Equity
|
||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
Years Ended December 31, 2017, 2016, and 2015
|
||||||||||||
(See accompanying independent accountants' compilation report)
|
||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2017
(Unaudited) |
|
2016
(Unaudited) |
|
2015
(Audited) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Real estate sales, net
|
|
$ -
|
|
$230,300
|
|
$242,952,850
|
||||||
Cost of sales
|
|
|
-
|
|
-
|
|
208,911,678
|
|||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gross profit
|
|
-
|
|
230,300
|
|
34,041,172
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating expenses
|
|
17,756
|
|
80,130
|
|
1,413
|
||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating income (loss)
|
|
(17,756)
|
|
150,170
|
|
34,039,759
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other income (expense):
|
|
|
|
|
|
|
||||||
|
Rental and other income
|
|
34,593
|
|
102,947
|
|
36,544
|
|||||
|
Other expense
|
|
-
|
|
-
|
|
(7,841)
|
|||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income
|
|
16,837
|
|
253,117
|
|
34,068,462
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Members' equity at beginning of year
|
|
368,459
|
|
115,342
|
|
65,950,613
|
||||||
Distributions to members
|
|
-
|
|
-
|
|
(99,903,733)
|
||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
Members' equity at end of year
|
|
$385,296
|
|
$368,459
|
|
$115,342
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
|
|
|
|
|
|
|
|
2017
(Unaudited) |
|
2016
(Unaudited) |
|
2015
(Audited) |
||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Cash flows from operating activities:
|
|
|
|
|
|
|
||||||||||||
|
Net income
|
|
$
|
16,837
|
|
|
$
|
253,117
|
|
|
$
|
34,068,462
|
|
|||||
|
Adjustments to reconcile net income to net cash provided
|
|
|
|
|
|
|
|||||||||||
|
|
by operating activities:
|
|
|
|
|
|
|
||||||||||
|
|
|
Contingency reserve
|
|
-
|
|
|
(68,972)
|
|
|
2,361,227
|
|
||||||
|
|
|
Real estate development costs
|
|
-
|
|
|
-
|
|
|
192,649,651
|
|
||||||
|
|
|
Prepaid expenses
|
|
-
|
|
|
-
|
|
|
8,901
|
|
||||||
|
|
|
Accounts payable and accrued expenses
|
|
-
|
|
|
-
|
|
|
(212,881)
|
|
||||||
|
|
|
Retention payable
|
|
-
|
|
|
-
|
|
|
(14,743,123)
|
|
||||||
|
|
|
Deposits
|
|
-
|
|
|
-
|
|
|
(36,072,303)
|
|
||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
|
|
|
|
|
Net cash provided by operating activities
|
|
16,837
|
|
|
184,145
|
|
|
178,059,934
|
|
||||
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Cash flows from financing activities:
|
|
|
|
|
|
|
||||||||||||
|
Distributions to members
|
|
-
|
|
|
-
|
|
|
(99,903,733)
|
|
||||||||
|
Principal payments on debt
|
|
-
|
|
|
-
|
|
|
(76,068,549)
|
|
||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
|
|
|
|
|
Net cash used in financing activities
|
|
-
|
|
|
-
|
|
|
(175,972,282)
|
|
||||
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
|
|
|
|
|
Net increase in cash
|
|
16,837
|
|
|
184,145
|
|
|
2,087,652
|
|
||||
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Cash at beginning of year
|
|
2,757,310
|
|
|
2,573,165
|
|
|
485,513
|
|
|||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Cash at end of year
|
|
$
|
2,774,147
|
|
|
$
|
2,757,310
|
|
|
$
|
2,573,165
|
|
||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Supplemental cash flow information:
|
|
|
|
|
|
|
||||||||||||
|
Interest paid
|
|
$ -
|
|
|
$ -
|
|
|
$
|
203,663
|
|
(1)
|
Organization and Description of Business
|
(2)
|
Summary of Significant Accounting Principles
|
(3)
|
Debt
|
(4)
|
Related-Party Transactions
|
(5)
|
Commitments and Contingencies
|
(6)
|
Subsequent Events
|
THE COLLECTION LLC
|
|||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
||
Balance Sheets
|
|||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
||
December 31, 2016 and 2015
|
|||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
||
|
|
|
|
|
|
|
|
|
|
|
|
||
|
|
|
|
|
|
|
|
|
|
|
|
||
Assets
|
2016
(Audited)
|
|
2015
(Unaudited)
|
||||||||||
Cash
|
|
|
|
|
|
|
$ 34,002,132
|
|
|
$ 1,133,598
|
|
||
Real estate development costs
|
|
15,279,643
|
|
|
138,431,436
|
|
|||||||
|
|
|
|
|
Total assets
|
|
$ 49,281,775
|
|
|
$ 139,565,034
|
|
||
|
|
|
|
|
|
|
|
|
|
|
|
||
|
|
|
|
|
|
|
|
|
|
|
|
||
Liabilities and Members' Equity
|
|
|
|
||||||||||
Liabilities:
|
|
|
|
|
|
|
|
|
|||||
|
Accounts payable and accrued expenses
|
|
$ 10,482,680
|
|
|
$ 23,232,853
|
|
||||||
|
Contingency reserve
|
|
3,019,570
|
|
|
—
|
|
||||||
|
Deposits
|
|
|
|
|
254,250
|
|
|
40,815,275
|
|
|||
|
Retention payable
|
|
19,498,478
|
|
|
8,678,230
|
|
||||||
|
Loan payable
|
|
|
—
|
|
|
4,352,459
|
|
|||||
|
|
|
|
|
Total liabilities
|
|
33,254,978
|
|
|
77,078,817
|
|
||
|
|
|
|
|
|
|
|
|
|
|
|
||
Members' equity
|
|
|
16,026,797
|
|
|
62,486,217
|
|
||||||
|
|
|
|
|
Total liabilities and members' equity
|
|
$ 49,281,775
|
|
|
$ 139,565,034
|
|
||
|
|
|
|
|
|
|
|
|
|
|
|
THE COLLECTION LLC
|
||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Statements of Operations and Changes in Members' Equity
|
||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Years ended December 31, 2016, 2015, and 2014
|
||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
|
|
|
|
|
|
|
|
2016
(Audited)
|
|
2015 (Unaudited)
|
|
2014 (Unaudited)
|
||||||
Real estate sales, net
|
|
$
|
303,761,796
|
|
|
$
|
—
|
|
|
$
|
—
|
|
||||||
Cost of sales
|
|
|
280,146,553
|
|
|
—
|
|
|
—
|
|
||||||||
|
|
|
|
|
Gross profit
|
|
23,615,243
|
|
|
—
|
|
|
—
|
|
||||
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Operating expenses
|
|
—
|
|
|
—
|
|
|
91,771
|
|
|||||||||
|
|
|
|
|
Operating income (loss)
|
|
23,615,243
|
|
|
—
|
|
|
(91,771)
|
|
||||
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Other income (expense):
|
|
|
|
|
|
|
||||||||||||
|
Other income
|
|
23,021
|
|
|
—
|
|
|
—
|
|
||||||||
|
Other expense
|
|
—
|
|
|
(225,499)
|
|
|
—
|
|
||||||||
|
|
|
|
|
Net income (loss)
|
|
23,638,264
|
|
|
(225,499)
|
|
|
(91,771)
|
|
||||
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Members' equity at beginning of year
|
|
62,486,217
|
|
|
46,794,081
|
|
|
—
|
|
|||||||||
Members' contributions
|
|
4,193,095
|
|
|
15,917,635
|
|
|
46,885,852
|
|
|||||||||
Distributions to members
|
|
(74,290,779)
|
|
|
—
|
|
|
—
|
|
|||||||||
Members' equity at end of year
|
|
$
|
16,026,797
|
|
|
$
|
62,486,217
|
|
|
$
|
46,794,081
|
|
THE COLLECTION LLC
|
||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Statements of Cash Flows
|
||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Years Ended December 31, 2016, 2015, and 2014
|
||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
|
|
|
|
|
|
|
|
2016
(Audited)
|
|
2015 (Unaudited)
|
|
2014 (Unaudited)
|
||||||
Cash flows from operating activities:
|
|
|
|
|
|
|
||||||||||||
|
Net income (loss)
|
|
$
|
23,638,264
|
|
|
$
|
(225,499
|
)
|
|
$
|
(91,771
|
)
|
|||||
|
Adjustments to reconcile net income (loss) to net cash
|
|
|
|
|
|
|
|||||||||||
|
|
provided by (used in) operating activities:
|
|
|
|
|
|
|
||||||||||
|
|
Changes in operating assets and liabilities:
|
|
|
|
|
|
|
||||||||||
|
|
|
Real estate development costs
|
|
123,151,793
|
|
|
(90,354,202
|
)
|
|
(7,191,382
|
)
|
||||||
|
|
|
Contingency reserve
|
|
3,019,570
|
|
|
—
|
|
|
—
|
|
||||||
|
|
|
Accounts payable and accrued expenses
|
|
(12,750,173
|
)
|
|
20,389,775
|
|
|
2,843,078
|
|
||||||
|
|
|
Retention payable
|
|
10,820,248
|
|
|
8,476,107
|
|
|
202,123
|
|
||||||
|
|
|
Deposits
|
|
(40,561,025
|
)
|
|
40,815,275
|
|
|
—
|
|
||||||
|
|
|
|
|
Net cash provided by (used in) operating activities
|
107,318,677
|
|
|
(20,898,544
|
)
|
|
(4,237,952
|
)
|
|||||
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Cash flows from financing activities:
|
|
|
|
|
|
|
||||||||||||
|
Distributions to members
|
|
(74,290,779
|
)
|
|
—
|
|
|
—
|
|
||||||||
|
Principal payments on debt
|
|
(129,297,992
|
)
|
|
—
|
|
|
—
|
|
||||||||
|
Proceeds from issuance of debt
|
|
124,945,533
|
|
|
4,352,459
|
|
|
—
|
|
||||||||
|
Contributions from members
|
|
4,193,095
|
|
|
15,917,635
|
|
|
6,000,000
|
|
||||||||
|
|
|
|
|
Net cash provided by (used in) financing activities
|
|
(74,450,143
|
)
|
|
20,270,094
|
|
|
6,000,000
|
|
||||
|
|
|
|
|
Net increase (decrease) in cash
|
|
32,868,534
|
|
|
(628,450
|
)
|
|
1,762,048
|
|
||||
Cash at beginning of year
|
|
1,133,598
|
|
|
1,762,048
|
|
|
—
|
|
|||||||||
Cash at end of year
|
|
$
|
34,002,132
|
|
|
$
|
1,133,598
|
|
|
$
|
1,762,048
|
|
||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Supplemental cash flow information:
|
|
|
|
|
|
|
||||||||||||
|
Interest paid
|
|
$
|
1,904,860
|
|
|
$
|
12,157
|
|
|
$
|
—
|
|
(1)
|
Organization and Description of Business
|
(2)
|
Summary of Significant Accounting Principles
|
(3)
|
Contingency Reserve
|
(4)
|
Debt
|
(5)
|
Deferred Financing Costs
|
(6)
|
Related-Party Transactions
|
(7)
|
Commitments and Contingencies
|
(8)
|
Subsequent Events
|
THE COLLECTION LLC
|
|||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
Balance Sheets
|
|||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
December 31, 2017 and 2016
|
|||||||||||
(See accompanying independent accountants' compilation report)
|
|||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Assets
|
2017
(Unaudited) |
|
2016
(Audited) |
||||||||
|
|
|
|
|
|
|
|
|
|
|
|
Cash
|
|
|
|
|
|
|
$14,748,411
|
|
$34,002,132
|
||
Real estate development costs
|
|
8,963,548
|
|
15,279,643
|
|||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total assets
|
|
$23,711,959
|
|
$49,281,775
|
||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Liabilities and Members' Equity
|
|
|
|
||||||||
Liabilities:
|
|
|
|
|
|
|
|
|
|||
|
Accounts payable and accrued expenses
|
|
$982,110
|
|
$10,482,680
|
||||||
|
Contingency reserve
|
|
2,924,625
|
|
3,019,570
|
||||||
|
Retention payable
|
|
119,622
|
|
19,498,478
|
||||||
|
Deposits
|
|
|
|
|
-
|
|
254,250
|
|||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total liabilities
|
|
4,026,357
|
|
33,254,978
|
||
|
|
|
|
|
|
|
|
|
|
|
|
Members' equity
|
|
|
19,685,602
|
|
16,026,797
|
||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total liabilities and members' equity
|
|
$23,711,959
|
|
$49,281,775
|
THE COLLECTION LLC
|
||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
Statements of Operations and Changes in Members' Equity
|
||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
Years Ended December 31, 2017, 2016, and 2015
|
||||||||||||
(See accompanying independent accountants' compilation report)
|
||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2017
(Unaudited) |
|
2016
(Audited) |
|
2015 (Unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Real estate sales, net
|
|
$14,751,650
|
|
$303,761,796
|
|
$ -
|
||||||
Cost of sales
|
|
|
11,167,019
|
|
280,146,553
|
|
-
|
|||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gross profit
|
|
3,584,631
|
|
23,615,243
|
|
-
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other income (expense):
|
|
|
|
|
|
|
||||||
|
Other income
|
|
74,174
|
|
23,021
|
|
-
|
|||||
|
Other expense
|
|
-
|
|
-
|
|
(225,499)
|
|||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income (loss)
|
|
3,658,805
|
|
23,638,264
|
|
(225,499)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Members' equity at beginning of year
|
|
16,026,797
|
|
62,486,217
|
|
46,794,081
|
||||||
Members' contributions
|
|
-
|
|
4,193,095
|
|
15,917,635
|
||||||
Distributions to members
|
|
-
|
|
(74,290,779)
|
|
-
|
||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
Members' equity at end of year
|
|
$19,685,602
|
|
$16,026,797
|
|
$62,486,217
|
THE COLLECTION LLC
|
|||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Statements of Cash Flows
|
|||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Years Ended December 31, 2017, 2016, and 2015
|
|||||||||||||
(See accompanying independent accountants' compilation report)
|
|||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2017
(Unaudited) |
|
2016
(Audited) |
|
2015 (Unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash flows from operating activities:
|
|
|
|
|
|
|
|||||||
|
Net income (loss)
|
|
$3,658,805
|
|
$23,638,264
|
|
$(225,499)
|
||||||
|
Adjustments to reconcile net income (loss) to net cash
|
|
|
|
|
|
|
||||||
|
|
provided by (used in) operating activities:
|
|
|
|
|
|
|
|||||
|
|
Changes in operating assets and liabilities:
|
|
|
|
|
|
|
|||||
|
|
|
Real estate development costs
|
|
6,316,095
|
|
123,151,793
|
|
(90,354,202)
|
|
|||
|
|
|
Accounts payable and accrued expenses
|
|
(9,500,570)
|
|
(12,750,173)
|
|
20,389,775
|
|
|||
|
|
|
Contingency reserve
|
|
(94,945)
|
|
3,019,570
|
|
-
|
|
|||
|
|
|
Retention payable
|
|
(19,378,856)
|
|
10,820,248
|
|
8,476,107
|
|
|||
|
|
|
Deposits
|
|
(254,250)
|
|
(40,561,025)
|
|
40,815,275
|
|
|||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net cash provided by (used in) operating activities
|
|
(19,253,721)
|
|
107,318,677
|
|
(20,898,544)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash flows from financing activities:
|
|
|
|
|
|
|
|||||||
|
Principal payments on debt
|
|
-
|
|
(129,297,992)
|
|
-
|
||||||
|
Proceeds from issuance of debt
|
|
-
|
|
124,945,533
|
|
4,352,459
|
||||||
|
Distributions to members
|
|
-
|
|
(74,290,779)
|
|
-
|
||||||
|
Contributions from members
|
|
-
|
|
4,193,095
|
|
15,917,635
|
||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net cash provided by (used in) financing activities
|
|
-
|
|
(74,450,143)
|
|
20,270,094
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net increase (decrease) in cash
|
|
(19,253,721)
|
|
32,868,534
|
|
(628,450)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash at beginning of year
|
|
34,002,132
|
|
1,133,598
|
|
1,762,048
|
|||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash at end of year
|
|
$14,748,411
|
|
$34,002,132
|
|
$1,133,598
|
|||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Supplemental cash flow information:
|
|
|
|
|
|
|
|||||||
|
Interest paid
|
|
$ -
|
|
$1,904,860
|
|
$12,157
|
(1)
|
Organization and Description of Business
|
(2)
|
Summary of Significant Accounting Principles
|
(3)
|
Debt
|
(4)
|
Deferred Financing Costs
|
(5)
|
Related-Party Transactions
|
(6)
|
Commitments and Contingencies
|
(7)
|
Subsequent Events
|