Alexander & Baldwin, Inc. (ALEX Q1 FY2024 earnings call

• Started the year strong with total NOI growth 4.4% and same-store NOI growth 4.1%.
• Executed 44 leases in improved property portfolio with blended spreads of 7.8%.
• Land Operations sold over 300 acres, exceeding initial target, recognizing significant operating profit.
• Financials: Net income available to shareholders $20M ($0.28 per diluted share), FFO $29.2M ($0.40 per diluted share), AFFO $25.5M ($0.35 per diluted share). G&A expenses decreased by $1.5M (17.1%) to $7.2M.
• Balance Sheet: Total debt $458M, liquidity $470M (cash $16M, revolver $454M). 90% fixed rate debt. Net debt to trailing 12 months consolidated adjusted EBITDA 3.8x.
• Dividend: First quarter dividend $0.2225 per share paid, second quarter declared $0.2225 per share payable July 8.

Commercial Real Estate: Total NOI growth was 4.4%, same-store NOI growth was 4.1% (excluding reserved collections 3.9%). Same-store lease occupancy was 95% (down 70 basis points from prior quarter due to Waianae Mall move-out), same-store economic occupancy at quarter end was 93.3% (down 70 basis points from prior quarter). Executed 44 leases in improved property portfolio for approximately 212,000 square feet, with blended spreads of 7.8% (new leases 11.8%, renewal leases 7.2%). Land Operations: Sold more than 300 acres of land holdings, recognizing nearly $7.9 million of operating profit in Q1 2024 compared to an operating loss of $92,000 in Q1 2023. Revenue contribution: Commercial Real Estate and Land Operations details as above.

• Raised Same-Store NOI growth guidance to 1.1%-2.1% (excluding reserved collections 2.1%-3.1%).
• FFO guidance $1.05-$1.16 per share, AFFO $0.89-$1 per share.
• Land operations FFO per share range increased due to strong first quarter land sales. CRE and corporate FFO per share increased due to stronger-than-expected performance.

• Forward-looking statements subject to risks like market conditions, REIT status, noncore asset evaluations, and factors in SEC filings.
• Ground lease renewals last year provided step-up, no significant resets this year; office move-outs affecting repositioning.
• Interest rate risks and potential timing differences in land sales.

Q: How much was FFO from land sales in Q1 and how it relates to annual guidance?

A: The $0.11 was built into the revised guidance, and the rest of the year's land sales are not certain yet as discussions with potential buyers of additional parcels are ongoing.

Q: Plans for Waianae Mall space?

A: In discussions for a backfill with a high credit tenant, optimistic about getting the deal done.

Q: Industrial development plans?

A: Opportunistic, one deal announced, investment team looking for off-market transactions in Hawaii.

Q: Ground lease and office impact on same-store NOI guidance?

A: Ground lease renewals last year provided a large rent step-up, no significant fair market value resets this year; office move-outs affecting repositioning of assets impact the guidance.

Q: Balance sheet swaps and debt?

A: Refinanced Laulani Village mortgage with private placement notes, using interest swap to hedge revolver debt, expecting 10-15 basis points reduction in cost of debt.

Q: 300-acre land sale details?

A: Not disclosed for competitive reasons, related to a strong pre-existing buyer relationship who also bought Grace Pacific late last year.

Q: Leverage target?

A: Long-term target 5x-6x net debt-to-EBITDA, current 3.8x is favorable for growth opportunities.