UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-Q


☒			QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended ~~September 30, 2023~~March 31, 2024


☐			TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from ______________________ to _________________

Commission file number 001-35492

ALEXANDER & BALDWIN, INC.

(Exact name of registrant as specified in its charter)


Hawaii			45-4849780
(State or other jurisdiction of incorporation or organization)			(I.R.S. Employer Identification No.)

822 Bishop Street
P. O. Box 3440,	Honolulu,	Hawaii	96801
(Address of principal executive offices)			(Zip Code)

(808) 525-6611

(Registrant's telephone number, including area code)

N/A

(Former name, former address, and former

fiscal year, if changed since last report)

Securities registered pursuant to Section 12(b) of the Act:


Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common Stock, without par value	ALEX	New York Stock Exchange

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See the definitions of "large accelerated filer," "accelerated filer," "smaller reporting company," and "emerging growth company" in Rule 12b-2 of the Exchange Act.

Large accelerated filer

☒

Accelerated filer

☐

Non-accelerated filer

☐

Smaller reporting company

☐

Emerging growth company

☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

Number of shares of common stock outstanding as of ~~September 30, 2023: 72,536,315~~March 31, 2024: 72,592,147

ALEXANDER & BALDWIN, INC.

FORM 10-Q

For the Quarterly Period Ended ~~September 30, 2023~~March 31, 2024

TABLE OF CONTENTS

Page

PART I. FINANCIAL INFORMATION

Item 1.

Financial Statements

Condensed Consolidated Balance Sheets - As of ~~September 30, 2023~~March 31, 2024 and December 31, ~~2022~~2023

Condensed Consolidated Statements of Operations - Three ~~and Nine~~ Months Ended ~~September 30,~~March 31, 2024 and 2023 ~~and 2022~~

Condensed Consolidated Statements of Comprehensive Income (Loss) - Three ~~and Nine~~ Months Ended ~~September 30,~~March 31, 2024 and 2023 ~~and 2022~~

Condensed Consolidated Statements of Cash Flows - ~~Nine~~Three Months Ended ~~September 30,~~March 31, 2024 and 2023 ~~and 2022~~

Condensed Consolidated Statements of Equity and Redeemable Noncontrolling Interest - Three ~~and Nine~~ Months Ended ~~September 30,~~March 31, 2024 and 2023 ~~and 2022~~

Notes to Condensed Consolidated Financial Statements

Item 2.

Management's Discussion and Analysis of Financial Condition and Results of Operations

2423

Item 3.

Quantitative and Qualitative Disclosures About Market Risk

4438

Item 4.

Controls and Procedures

4438

PART II. OTHER INFORMATION

Item 1.

Item 1A.

Item 2.

Unregistered Sales of Equity Securities and Use of Proceeds

~~Item 4.~~

~~Mine Safety Disclosures~~

Item 5.

Item 6.

PART I. FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

ALEXANDER & BALDWIN, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

(~~amounts~~dollars in ~~millions;~~thousands; unaudited)


			September 30,		December 31,
			2023		2022
		March 31,						March 31,	December 31,
		2024						2024	2023
ASSETS	ASSETS
Real estate investments	Real estate investments
Real estate investments
Real estate investments
Real estate property
Real estate property
Real estate property	Real estate property		$	1,619.9	$	1,598.9
Accumulated depreciation	Accumulated depreciation		(223.0)		(202.3)
Real estate property, net	Real estate property, net		1,396.9		1,396.6
Real estate developments	Real estate developments		60.0		59.9
Investments in real estate joint ventures and partnerships	Investments in real estate joint ventures and partnerships		7.4		7.5
Real estate intangible assets, net	Real estate intangible assets, net		38.3		43.6
Real estate investments, net	Real estate investments, net		1,502.6		1,507.6
Cash and cash equivalents	Cash and cash equivalents		11.8		33.3
Restricted cash	Restricted cash		0.2		1.0
Accounts receivable, net of allowances (credit losses and doubtful accounts) of $3.1 million and $2.5 million as of September 30, 2023, and December 31, 2022, respectively			3.6		6.1
Other property, net			2.2		2.5
Operating lease right-of-use assets			2.2		5.4
Accounts receivable, net of allowances (credit losses and doubtful accounts) of $2,503 and $2,888 as of March 31, 2024, and December 31, 2023, respectively

Goodwill	Goodwill		8.7		8.7
Other receivables, net of allowances of $3.7 million and $2.7 million as of September 30, 2023, and December 31, 2022, respectively			7.3		6.9
Goodwill
Goodwill
Other receivables, net of allowances of $3,565 and $3,545 as of March 31, 2024, and December 31, 2023, respectively
Prepaid expenses and other assets	Prepaid expenses and other assets		102.6		89.0
Assets held for sale	Assets held for sale		144.7		126.8
Total assets	Total assets		$	1,785.9	$	1,787.3

LIABILITIES AND EQUITY	LIABILITIES AND EQUITY
LIABILITIES AND EQUITY
LIABILITIES AND EQUITY
Liabilities:
Liabilities:
Liabilities:	Liabilities:
Notes payable and other debt	Notes payable and other debt		$	507.6	$	472.2
Notes payable and other debt
Notes payable and other debt
Accounts payable	Accounts payable		6.1		4.5
Operating lease liabilities			2.0		4.9
Accrued pension and post-retirement benefits			10.1		10.1

Accrued post-retirement benefits
Accrued post-retirement benefits
Accrued post-retirement benefits
Deferred revenue	Deferred revenue		71.9		68.8
Accrued and other liabilities	Accrued and other liabilities		78.4		102.1
Liabilities associated with assets held for sale			71.3		81.0

Total liabilities	Total liabilities		747.4		743.6
Commitments and Contingencies (Note 8)
Redeemable Noncontrolling Interest			9.7		8.0
Total liabilities
Total liabilities
Commitments and Contingencies (Note 7)							Commitments and Contingencies (Note 7)
Equity:	Equity:
Common stock - no par value; authorized, 225.0 million shares; outstanding, 72.5 million and 72.5 million shares at September 30, 2023 and December 31, 2022, respectively			1,809.8		1,808.4
Common stock - no par value; authorized, 225,000,000 shares; outstanding, 72,592,147 and 72,447,510 shares at March 31, 2024, and December 31, 2023, respectively
Common stock - no par value; authorized, 225,000,000 shares; outstanding, 72,592,147 and 72,447,510 shares at March 31, 2024, and December 31, 2023, respectively
Common stock - no par value; authorized, 225,000,000 shares; outstanding, 72,592,147 and 72,447,510 shares at March 31, 2024, and December 31, 2023, respectively
Accumulated other comprehensive income (loss)	Accumulated other comprehensive income (loss)		8.6		1.8
Distributions in excess of accumulated earnings	Distributions in excess of accumulated earnings		(789.6)		(774.5)

Total A&B shareholders' equity			1,028.8		1,035.7
Total shareholders' equity
Total liabilities and equity	Total liabilities and equity		$	1,785.9	$	1,787.3

See Notes to Condensed Consolidated Financial Statements.

ALEXANDER & BALDWIN, INC.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

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


		Three Months Ended September 30,				Nine Months Ended September 30,
		2023		2022		2023		2022
		Three Months Ended March 31,
		Three Months Ended March 31,
		Three Months Ended March 31,
		2024
		2024
		2024
Operating Revenue:
Operating Revenue:
Operating Revenue:	Operating Revenue:
Commercial Real Estate	Commercial Real Estate	$	48.2	$	46.5	$	145.6	$	138.8
Commercial Real Estate
Commercial Real Estate
Land Operations
Land Operations
Land Operations	Land Operations	4.3		2.9		10.4		20.9
Total operating revenue	Total operating revenue	52.5		49.4		156.0		159.7
Total operating revenue
Total operating revenue
Operating Costs and Expenses:
Operating Costs and Expenses:
Operating Costs and Expenses:	Operating Costs and Expenses:
Cost of Commercial Real Estate	Cost of Commercial Real Estate	25.1		25.0		75.1		73.2
Cost of Commercial Real Estate
Cost of Commercial Real Estate
Cost of Land Operations
Cost of Land Operations
Cost of Land Operations	Cost of Land Operations	2.2		4.2		7.8		18.8
Selling, general and administrative	Selling, general and administrative	7.6		9.6		26.2		27.7
Impairment of assets		0.6		—		0.6		—
Selling, general and administrative
Selling, general and administrative

Total operating costs and expenses

Total operating costs and expenses

Total operating costs and expenses	Total operating costs and expenses	35.5		38.8		109.7		119.7

Gain (loss) on disposal of non-core assets, net	Gain (loss) on disposal of non-core assets, net	—		—		1.1		54.0

Gain (loss) on disposal of non-core assets, net

Gain (loss) on disposal of non-core assets, net

Operating Income (Loss)

Operating Income (Loss)

Operating Income (Loss)	Operating Income (Loss)	17.0		10.6		47.4		94.0
Other Income and (Expenses):	Other Income and (Expenses):
Other Income and (Expenses):
Other Income and (Expenses):
Income (loss) related to joint ventures
Income (loss) related to joint ventures
Income (loss) related to joint ventures	Income (loss) related to joint ventures	1.0		0.8		1.9		2.3

Pension termination		—		—		—		(76.9)

Interest and other income (expense), net (Note 2)

Interest and other income (expense), net (Note 2)

Interest and other income (expense), net (Note 2)	Interest and other income (expense), net (Note 2)	0.1		(0.2)		—		0.1
Interest expense	Interest expense	(6.1)		(5.4)		(17.0)		(16.7)
Interest expense
Interest expense
Income (Loss) from Continuing Operations Before Income Taxes
Income (Loss) from Continuing Operations Before Income Taxes
Income (Loss) from Continuing Operations Before Income Taxes	Income (Loss) from Continuing Operations Before Income Taxes	12.0		5.8		32.3		2.8
Income tax benefit (expense)	Income tax benefit (expense)	—		—		—		18.1
Income tax benefit (expense)
Income tax benefit (expense)
Income (Loss) from Continuing Operations
Income (Loss) from Continuing Operations
Income (Loss) from Continuing Operations	Income (Loss) from Continuing Operations	12.0		5.8		32.3		20.9
Income (loss) from discontinued operations, net of income taxes	Income (loss) from discontinued operations, net of income taxes	3.9		1.0		3.9		1.3
Income (loss) from discontinued operations, net of income taxes
Income (loss) from discontinued operations, net of income taxes
Net Income (Loss)
Net Income (Loss)
Net Income (Loss)	Net Income (Loss)	15.9		6.8		36.2		22.2

Loss (income) attributable to discontinued noncontrolling interest	Loss (income) attributable to discontinued noncontrolling interest	$	(1.3)	$	(0.4)	$	(2.9)	$	(1.2)

Loss (income) attributable to discontinued noncontrolling interest

Loss (income) attributable to discontinued noncontrolling interest
Net Income (Loss) Attributable to A&B Shareholders
Net Income (Loss) Attributable to A&B Shareholders
Net Income (Loss) Attributable to A&B Shareholders	Net Income (Loss) Attributable to A&B Shareholders	$	14.6	$	6.4	$	33.3	$	21.0

Earnings (Loss) Per Share Available to A&B Shareholders:	Earnings (Loss) Per Share Available to A&B Shareholders:

Earnings (Loss) Per Share Available to A&B Shareholders:

Earnings (Loss) Per Share Available to A&B Shareholders:
Basic Earnings (Loss) Per Share of Common Stock:
Basic Earnings (Loss) Per Share of Common Stock:
Basic Earnings (Loss) Per Share of Common Stock:	Basic Earnings (Loss) Per Share of Common Stock:
Continuing operations available to A&B shareholders	Continuing operations available to A&B shareholders	$	0.16	$	0.08	$	0.44	$	0.29
Continuing operations available to A&B shareholders
Continuing operations available to A&B shareholders
Discontinued operations available to A&B shareholders	Discontinued operations available to A&B shareholders	0.04		0.01		0.02		—
Discontinued operations available to A&B shareholders
Discontinued operations available to A&B shareholders
Net income (loss) available to A&B shareholders
Net income (loss) available to A&B shareholders
Net income (loss) available to A&B shareholders	Net income (loss) available to A&B shareholders	$	0.20	$	0.09	$	0.46	$	0.29

Diluted Earnings (Loss) Per Share of Common Stock:	Diluted Earnings (Loss) Per Share of Common Stock:

Diluted Earnings (Loss) Per Share of Common Stock:

Diluted Earnings (Loss) Per Share of Common Stock:
Continuing operations available to A&B shareholders
Continuing operations available to A&B shareholders
Continuing operations available to A&B shareholders	Continuing operations available to A&B shareholders	$	0.16	$	0.08	$	0.44	$	0.29
Discontinued operations available to A&B shareholders	Discontinued operations available to A&B shareholders	0.04		0.01		0.02		—
Discontinued operations available to A&B shareholders
Discontinued operations available to A&B shareholders
Net income (loss) available to A&B shareholders
Net income (loss) available to A&B shareholders
Net income (loss) available to A&B shareholders	Net income (loss) available to A&B shareholders	$	0.20	$	0.09	$	0.46	$	0.29

Weighted-Average Number of Shares Outstanding:	Weighted-Average Number of Shares Outstanding:

Weighted-Average Number of Shares Outstanding:

Weighted-Average Number of Shares Outstanding:
Basic
Basic
Basic	Basic	72.6		72.7		72.6		72.7
Diluted	Diluted	72.8		72.8		72.8		72.8
Diluted
Diluted

Amounts Available to A&B Common Shareholders (Note 15):
Amounts Available to A&B Common Shareholders (Note 13):

Amounts Available to A&B Common Shareholders (Note 13):

Amounts Available to A&B Common Shareholders (Note 13):
Continuing operations available to A&B common shareholders
Continuing operations available to A&B common shareholders
Continuing operations available to A&B common shareholders	Continuing operations available to A&B common shareholders	$	12.0	$	5.7	$	32.2	$	20.7
Discontinued operations available to A&B common shareholders	Discontinued operations available to A&B common shareholders	2.6		0.6		1.0		0.1
Discontinued operations available to A&B common shareholders
Discontinued operations available to A&B common shareholders
Net income (loss) available to A&B common shareholders	Net income (loss) available to A&B common shareholders	$	14.6	$	6.3	$	33.2	$	20.8
Net income (loss) available to A&B common shareholders
Net income (loss) available to A&B common shareholders

See Notes to Condensed Consolidated Financial Statements.

ALEXANDER & BALDWIN, INC.

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)

(~~amounts~~dollars in ~~millions;~~thousands; unaudited)

Three Months Ended September 30, Nine Months Ended September 30,
2023 2022 2023 2022
Net Income (Loss) $ 15.9 $ 6.8 $ 36.2 $ 22.2
Other Comprehensive Income (Loss), net of tax:
Cash flow hedges:
Unrealized interest rate hedging gain (loss) 7.5 2.6 8.0 8.0
Impact of reclassification adjustment to interest expense included in Net Income (Loss) (0.4) (0.1) (1.2) 0.5
Realized interest rate hedging gain (loss) — — — (0.5)
Employee benefit plans:
Actuarial gain (loss) — — — 16.6
Amortization of net loss included in net periodic benefit cost — 0.1 — 1.9
Amortization of prior service credit included in net periodic benefit cost — — — 0.1
Pension termination — — — 76.9
Income taxes related to other comprehensive income (loss) — — — (18.3)
Other comprehensive income (loss), net of tax 7.1 2.6 6.8 85.2
Comprehensive Income (Loss) 23.0 9.4 43.0 107.4
Comprehensive (income) loss attributable to discontinued noncontrolling interest (1.3) (0.4) (2.9) (1.2)
Comprehensive Income (Loss) Attributable to A&B Shareholders $ 21.7 $ 9.0 $ 40.1 $ 106.2


	Three Months Ended March 31,
	2024		2023
Net Income (Loss)	$	19,982	$	5,308
Other Comprehensive Income (Loss), net of tax:
Cash flow hedges:
Unrealized interest rate derivative gain (loss)	1,202		(3,702)
Reclassification adjustment to interest expense included in Net Income (Loss)	(473)		(347)







Other comprehensive income (loss), net of tax	729		(4,049)
Comprehensive Income (Loss)	20,711		1,259
Comprehensive (income) loss attributable to discontinued noncontrolling interest	—		28
Comprehensive Income (Loss) Attributable to A&B Shareholders	$	20,711	$	1,287

See Notes to Condensed Consolidated Financial Statements.

ALEXANDER & BALDWIN, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(~~amounts~~dollars in ~~millions;~~thousands; unaudited)


			Nine Months Ended September 30,
		Three Months Ended March 31,								Three Months Ended March 31,
			2023		2022			2024	2023
Cash Flows from Operating Activities:	Cash Flows from Operating Activities:
Net income (loss)	Net income (loss)		$	36.2	$	22.2
Net income (loss)
Net income (loss)
Adjustments to reconcile net income (loss) to net cash provided by (used in) operations:	Adjustments to reconcile net income (loss) to net cash provided by (used in) operations:
Loss (income) from discontinued operations	Loss (income) from discontinued operations		(3.9)		(1.3)
Loss (income) from discontinued operations
Loss (income) from discontinued operations
Depreciation and amortization	Depreciation and amortization		27.6		28.8
Income tax expense (benefit)			—		(18.3)
Loss (gain) from disposals and asset transactions, net			(1.1)		(53.9)
Impairment of assets			0.6		—

Loss (gain) from disposals of non-core assets, net
Loss (gain) from disposals of non-core assets, net
Loss (gain) from disposals of non-core assets, net

Loss (gain) on de-designated interest rate swap valuation adjustment
Loss (gain) on de-designated interest rate swap valuation adjustment
Loss (gain) on de-designated interest rate swap valuation adjustment
Share-based compensation expense	Share-based compensation expense		5.3		4.6
Loss (income) related to joint ventures, net of operating cash distributions	Loss (income) related to joint ventures, net of operating cash distributions		(1.9)		1.0
Pension termination			—		76.9

Changes in operating assets and liabilities:
Changes in operating assets and liabilities:
Changes in operating assets and liabilities:	Changes in operating assets and liabilities:
Trade and other receivables	Trade and other receivables		(0.1)		(2.5)

Trade and other receivables
Trade and other receivables
Prepaid expenses, income tax receivable and other assets	Prepaid expenses, income tax receivable and other assets		(3.5)		(3.7)
Development/other property inventory	Development/other property inventory		(1.5)		9.5
Accrued pension and post-retirement benefits			—		(31.3)
Accrued post-retirement benefits
Accounts payable	Accounts payable		0.3		1.0
Accrued and other liabilities	Accrued and other liabilities		(2.2)		(2.4)
Operating cash flows from continuing operations	Operating cash flows from continuing operations		55.8		30.6
Operating cash flows from discontinued operations	Operating cash flows from discontinued operations		(12.2)		(21.6)
Net cash provided by (used in) operations	Net cash provided by (used in) operations		43.6		9.0
Cash Flows from Investing Activities:	Cash Flows from Investing Activities:						Cash Flows from Investing Activities:
Capital expenditures for acquisitions			(9.5)		—

Capital expenditures for property, plant and equipment
Capital expenditures for property, plant and equipment
Capital expenditures for property, plant and equipment	Capital expenditures for property, plant and equipment		(13.6)		(11.0)
Proceeds from disposal of assets	Proceeds from disposal of assets		3.3		73.1
Payments for purchases of investments in affiliates and other investments	Payments for purchases of investments in affiliates and other investments		(0.2)		(0.5)
Distributions of capital and other receipts from investments in affiliates and other investments			—		0.1

Investing cash flows from continuing operations
Investing cash flows from continuing operations
Investing cash flows from continuing operations	Investing cash flows from continuing operations		(20.0)		61.7
Investing cash flows from discontinued operations	Investing cash flows from discontinued operations		0.6		(5.7)
Net cash provided by (used in) investing activities	Net cash provided by (used in) investing activities		(19.4)		56.0
Cash Flows from Financing Activities:	Cash Flows from Financing Activities:						Cash Flows from Financing Activities:

Payments of notes payable and other debt and deferred financing costs	Payments of notes payable and other debt and deferred financing costs		(33.7)		(21.9)
Payments of notes payable and other debt and deferred financing costs
Payments of notes payable and other debt and deferred financing costs
Borrowings (payments) on line-of-credit agreement, net	Borrowings (payments) on line-of-credit agreement, net		69.0		(50.0)

Cash dividends paid
Cash dividends paid
Cash dividends paid	Cash dividends paid		(64.2)		(57.7)
Repurchases of common stock and other payments	Repurchases of common stock and other payments		(3.6)		(5.0)
Financing cash flows from continuing operations	Financing cash flows from continuing operations		(32.5)		(134.6)
Financing cash flows from discontinued operations	Financing cash flows from discontinued operations		(10.7)		6.1
Net cash provided by (used in) financing activities	Net cash provided by (used in) financing activities		(43.2)		(128.5)

Cash, Cash Equivalents, Restricted Cash, and Cash included in Assets Held for Sale	Cash, Cash Equivalents, Restricted Cash, and Cash included in Assets Held for Sale
Cash, Cash Equivalents, Restricted Cash, and Cash included in Assets Held for Sale
Cash, Cash Equivalents, Restricted Cash, and Cash included in Assets Held for Sale
Net increase (decrease) in cash, cash equivalents, restricted cash, and cash included in assets held for sale	Net increase (decrease) in cash, cash equivalents, restricted cash, and cash included in assets held for sale		(19.0)		(63.5)
Balance, beginning of period	Balance, beginning of period		34.4		71.0
Balance, end of period	Balance, end of period		$	15.4	$	7.5


			Nine Months Ended September 30,
			2023		2022
		Three Months Ended March 31,						Three Months Ended March 31,
		2024					2024		2023
Other Cash Flow Information:	Other Cash Flow Information:
Interest paid, net of capitalized interest, for continuing operations
Interest paid, net of capitalized interest, for continuing operations
Interest paid, net of capitalized interest, for continuing operations	Interest paid, net of capitalized interest, for continuing operations		$	16.6	$	15.7
Interest paid, net of capitalized interest, for discontinued operations	Interest paid, net of capitalized interest, for discontinued operations		$	0.5	$	0.1
Income tax (payments)/refunds, net	Income tax (payments)/refunds, net		$	—	$	0.1

Noncash Investing and Financing Activities from continuing operations:	Noncash Investing and Financing Activities from continuing operations:
Increase (decrease) in capital expenditures included in accounts payable and accrued and other liabilities			$	1.4	$	—
Operating lease liabilities arising from obtaining ROU assets			$	—	$	0.7
Finance lease liabilities arising from obtaining ROU assets			$	—	$	2.6
Noncash Investing and Financing Activities from continuing operations:
Noncash Investing and Financing Activities from continuing operations:
Capital expenditures included in accounts payable and accrued and other liabilities
Capital expenditures included in accounts payable and accrued and other liabilities
Capital expenditures included in accounts payable and accrued and other liabilities

Dividends declared but unpaid at end of period	Dividends declared but unpaid at end of period		$	0.5	$	0.3
Repurchases of capital stock in accrued and other liabilities			$	0.4	$	0.9

Dividends declared but unpaid at end of period

Dividends declared but unpaid at end of period

Increase (decrease) in escrow and other receivables from dispositions
Increase (decrease) in escrow and other receivables from dispositions
Increase (decrease) in escrow and other receivables from dispositions	Increase (decrease) in escrow and other receivables from dispositions		$	—	$	0.9

Noncash Investing and Financing Activities from discontinued operations:	Noncash Investing and Financing Activities from discontinued operations:
Increase (decrease) in capital expenditures included in liabilities associated with assets held for sale			$	(0.1)	$	0.3
Operating lease liabilities arising from obtaining ROU assets			$	—	$	19.3
Finance lease liabilities arising from obtaining ROU assets			$	—	$	0.1

Noncash Investing and Financing Activities from discontinued operations:

Noncash Investing and Financing Activities from discontinued operations:
Capital expenditures included in liabilities associated with assets held for sale
Capital expenditures included in liabilities associated with assets held for sale
Capital expenditures included in liabilities associated with assets held for sale

Distribution to noncontrolling interests included in liabilities associated with assets held for sale

Distribution to noncontrolling interests included in liabilities associated with assets held for sale

Distribution to noncontrolling interests included in liabilities associated with assets held for sale

Reconciliation of cash, cash equivalents, restricted cash, and cash included in assets held for sale:	Reconciliation of cash, cash equivalents, restricted cash, and cash included in assets held for sale:

Reconciliation of cash, cash equivalents, restricted cash, and cash included in assets held for sale:

Reconciliation of cash, cash equivalents, restricted cash, and cash included in assets held for sale:
Beginning of the period:	Beginning of the period:
Beginning of the period:
Beginning of the period:
Cash and cash equivalents
Cash and cash equivalents
Cash and cash equivalents	Cash and cash equivalents		$	33.3	$	65.4
Restricted cash	Restricted cash		1.0		1.0
Cash included in assets held for sale	Cash included in assets held for sale		0.1		4.6
Cash, cash equivalents, restricted cash, and cash included in assets held for sale	Cash, cash equivalents, restricted cash, and cash included in assets held for sale		$	34.4	$	71.0

End of the period:	End of the period:
End of the period:
End of the period:
Cash and cash equivalents
Cash and cash equivalents
Cash and cash equivalents	Cash and cash equivalents		$	11.8	$	6.6
Restricted cash	Restricted cash		0.2		0.2
Cash included in assets held for sale	Cash included in assets held for sale		3.4		0.7
Cash, cash equivalents, restricted cash, and cash included in assets held for sale	Cash, cash equivalents, restricted cash, and cash included in assets held for sale		$	15.4	$	7.5

See Notes to Condensed Consolidated Financial Statements.

ALEXANDER & BALDWIN, INC.

CONDENSED CONSOLIDATED STATEMENTS OF EQUITY AND

REDEEMABLE NONCONTROLLING INTEREST

For the Three Months Ended ~~September 30,~~March 31, 2024 and 2023 ~~and 2022~~

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


		Total Equity
			Common Stock
						Common Stock
			Common Stock															Accumulated Other Comprehensive Income (Loss)	(Distribution in Excess of Accumulated Earnings) Earnings Surplus	Total	Redeemable Non- Controlling Interest
						Total Equity
			Common Stock				Accumulated Other Comprehensive Income (Loss)		(Distribution in Excess of Accumulated Earnings) Earnings Surplus			Total		Redeemable Non- Controlling Interest

						Shares					Stated Value
Balance, July 1, 2022			72.7	$	1,811.2		$	1.9	$	(677.1)		$	1,136.0			$	7.7
Net income (loss)			—	—			—		6.4			6.4		0.4
Other comprehensive income (loss), net of tax			—	—			2.6		—			2.6		—
Dividend on common stock ($0.22 per share)			—	—			—		(16.2)			(16.2)		—

Share-based compensation			—	1.6			—		—			1.6		—
Shares issued (repurchased), net			(0.2)	(3.4)			—		0.2			(3.2)		—
Balance, September 30, 2022			72.5	$	1,809.4		$	4.5	$	(686.7)		$	1,127.2	$	8.1

			Total Equity
			Common Stock				Accumulated Other Comprehensive Income (Loss)		(Distribution in Excess of Accumulated Earnings) Earnings Surplus			Total		Redeemable Non- Controlling Interest

						Shares					Stated Value
Balance, July 1, 2023			72.6	$	1,810.3		$	1.5	$	(788.1)		$	1,023.7			$	9.2
			Shares
			Shares
			Shares
Balance, January 1, 2023
Balance, January 1, 2023
Balance, January 1, 2023
Net income (loss)	Net income (loss)		—	—			—		14.6			14.6		1.3
Other comprehensive income (loss), net of tax	Other comprehensive income (loss), net of tax		—	—			7.1		—			7.1		—
Dividend on common stock ($0.22 per share)	Dividend on common stock ($0.22 per share)		—	—			—		(16.1)			(16.1)		—
Distributions to noncontrolling interest	Distributions to noncontrolling interest		—	—			—		—			—		(0.8)

Share-based compensation
Share-based compensation
Share-based compensation	Share-based compensation		—	1.0			—		—			1.0		—
Shares issued (repurchased), net	Shares issued (repurchased), net		(0.1)	(1.5)			—		—			(1.5)		—
Balance, September 30, 2023			72.5	$	1,809.8		$	8.6	$	(789.6)		$	1,028.8	$	9.7
Balance, March 31, 2023

			Total Equity
			Total Equity
			Total Equity
			Common Stock
						Common Stock
			Common Stock															Accumulated Other Comprehensive Income (Loss)	(Distribution in Excess of Accumulated Earnings) Earnings Surplus	Total	Redeemable Non- Controlling Interest

						Shares
			Shares
			Shares
Balance, January 1, 2024
Balance, January 1, 2024
Balance, January 1, 2024
Net income (loss)
Other comprehensive income (loss), net of tax
Dividend on common stock ($0.2225 per share)

Share-based compensation
Share-based compensation
Share-based compensation
Shares issued (repurchased), net
Balance, March 31, 2024

See Notes to Condensed Consolidated Financial Statements

~~ALEXANDER & BALDWIN, INC.~~

~~CONDENSED CONSOLIDATED STATEMENTS OF EQUITY AND~~

~~REDEEMABLE NONCONTROLLING INTEREST~~

~~For the Nine Months Ended September 30, 2023 and 2022~~

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

Total Equity
Common Stock Accumulated
Other
Comprehensive Income (Loss) (Distribution
in Excess of Accumulated Earnings)
Earnings Surplus Total Redeemable
Non-
Controlling
Interest
Shares Stated Value
Balance, January 1, 2022 72.5 $ 1,810.5 $ (80.7) $ (663.2) $ 1,066.6 $ 6.9
Net income (loss) — — — 21.0 21.0 1.2
Other comprehensive income (loss), net of tax — — 85.2 — 85.2 —
Dividend on common stock ($0.61 per share) — — — (44.8) (44.8) —
Share-based compensation — 4.6 — — 4.6 —
Shares issued (repurchased), net — (5.7) — 0.3 (5.4) —
Balance, September 30, 2022 72.5 $ 1,809.4 $ 4.5 $ (686.7) $ 1,127.2 $ 8.1
Total Equity
Common Stock Accumulated
Other
Comprehensive Income (Loss) (Distribution
in Excess of Accumulated Earnings)
Earnings Surplus Total Redeemable
Non-
Controlling
Interest
Shares Stated Value
Balance, January 1, 2023 72.5 $ 1,808.4 $ 1.8 $ (774.5) $ 1,035.7 $ 8.0
Net income (loss) — — — 33.3 33.3 2.9
Other comprehensive income (loss), net of tax — — 6.8 — 6.8 —
Dividend on common stock ($0.66 per share) — — — (48.4) (48.4) —
Distributions to noncontrolling interest — — — — — (1.2)
Share-based compensation — 5.3 — — 5.3 —
Shares issued (repurchased), net — (3.9) — — (3.9) —
Balance, September 30, 2023 72.5 $ 1,809.8 $ 8.6 $ (789.6) $ 1,028.8 $ 9.7

~~See Notes to Condensed Consolidated Financial Statements~~

Alexander & Baldwin, Inc.

Notes to Condensed Consolidated Financial Statements

(unaudited)

1. Background and Basis of Presentation

Description of Business: Alexander & Baldwin, Inc. ("A&B" or the "Company") is a fully integrated real estate investment trust ("REIT") headquartered in Honolulu, Hawai‘i, whose history in Hawai‘i dates back to 1870. Over time, the Company has evolved from a 571-acre sugar plantation on Maui to become one of Hawai‘i's premier commercial real estate companies and the owner of the largest grocery-anchored, neighborhood shopping center portfolio in the state. The Company operates in two segments: Commercial Real Estate ("CRE") and Land Operations. As of ~~September 30, 2023,~~March 31, 2024, the Company's commercial real estate portfolio resides entirely in Hawai‘i and consists of 22 retail centers, 13 industrial assets and four office properties, representing a total of 3.9 million square feet of gross leasable area ("GLA"), as well as 142.0 acres of commercial land, ~~under~~of which substantially all is leased pursuant to urban ground leases. Throughout this quarterly report on Form 10-Q, references to "we," "our," "us" and "our Company" refer to Alexander & Baldwin, Inc., together with its consolidated subsidiaries.

Basis of Presentation: The interim condensed consolidated financial statements are unaudited. Because of the nature of the Company's operations, the results for interim periods are not necessarily indicative of results to be expected for the year. While these condensed consolidated financial statements reflect all normal recurring adjustments that are, in the opinion of management, necessary for fair presentation of the results of the interim period, they do not include all of the information and footnotes required by accounting principles generally accepted in the United States of America ("GAAP") for complete financial statements. Therefore, the interim condensed consolidated financial statements should be read in conjunction with the consolidated balance sheets as of December 31, ~~2022~~2023 and ~~2021,~~2022, and the related consolidated statements of operations, comprehensive income (loss), cash flows, and equity and redeemable noncontrolling interest for each of the three years ended December 31, 2023, 2022, ~~2021,~~ and ~~2020,~~2021, respectively, and the notes thereto included in the Company's Annual Report filed on Form 10-K for the year ended December 31, ~~2022~~2023 ("~~2022~~2023 Form 10-K"), and other subsequent filings with the U.S. Securities and Exchange Commission ("SEC").

Reclassifications: Prior to December 31, 2022, the Company operated and reported on three segments: Commercial Real Estate; Land Operations; and Materials & Construction ("M&C"). During the fourth quarter of 2022, the Company's wholly-owned subsidiary, Grace Pacific LLC ("Grace Pacific") and Company-owned quarry land on Maui ("Maui Quarries") (collectively, the "Grace Disposal Group"), which made up the majority of activityCertain amounts presented in the ~~Company’s former M&C segment, met~~prior year have been reclassified to conform to the ~~criteria for classification as held for sale and discontinued operations. Accordingly,~~current year presentation (e.g., captions previously presented in the prior years that, in the currently presented periods, are less than five percent of total assets ~~and~~or total liabilities ~~associated with~~were combined in the ~~Grace Disposal Group are classified as held for sale in~~current year condensed consolidated balance sheets). Operating lease right-of-use assets, which was previously reported separately on the condensed consolidated balance sheets, ~~its financial results are classified as discontinued operations~~is now presented inPrepaid expenses and other assets for all periods presented. Operating lease liabilities and Liabilities associated with assets held for sale, which were previously reported separately on the condensed consolidated ~~statements of operations~~balance sheets, are now presented in Accrued and ~~cash flows~~other liabilities for all periods presented, and the Company’s former Materials and Construction ("M&C") segment has been eliminated. As a result of this strategic shift, the chief operating decision maker began reviewing all investments in unconsolidated affiliates together within the Land Operations segment. This change resulted in a reorganization to present the income (loss) related to one joint venture, which historically was included in the results of the former M&C segment, to now be included in the results of the Land Operations segment. All comparable information for the historical periods has been retrospectively adjusted to reflect the impact of these changes. Refer to Note 18 – Held for Sale and Discontinued Operations for additional information regarding the Grace Disposal Group, including the assets held for sale, liabilities associated with held for sale and income (loss) from discontinued operations. Unless otherwise noted, disclosures within the remaining notes to these condensed consolidated financial statements relate solely to the Company's continuing operations.presented.

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

2. Significant Accounting Policies

The Company's significant accounting policies are described in Note 2 to the consolidated financial statements included in Item 8 of the Company's ~~2022~~2023 Form 10-K. Changes to the Company's significant accounting policies are included herein.

Recently issued accounting pronouncements

In ~~March 2020,~~October 2023, the FASB issued ~~Accounting Standards Update ("ASU") No. 2020-04,~~ ~~Reference Rate Reform, establishing ASC Topic 848, and amended the standard thereafter through~~ ASU No. ~~2021-01 and~~ 2023-06 ("ASU ~~No. 2022-06 (collectively, "ASC 848"~~2023-06")~~. ASC 848 provides optional practical expedients and exceptions related~~, Disclosure Improvements - Codification Amendment in Response to the ~~impacts~~SEC’s Disclosure Update and Simplification Initiative. This ASU modified the disclosure and presentation requirements of ~~reference rate reform that affect certain debt, leases, derivatives and other contracts if certain criteria are met.~~a variety of codification topics by aligning them with the SEC’s regulations. The amendments ~~apply only~~ to contracts and hedging relationships that reference London Interbank Offered Rate ("LIBOR") or another reference rate expected to be discontinued due to reference rate reform. These amendments are effective immediately and maythe various topics should be applied prospectively, ~~to contract modifications made~~ and ~~hedging relationships entered into~~the effective date will be determined for each individual disclosure based on the effective date of the SEC’s removal of the related disclosure. If the SEC has not removed the applicable requirements from Regulation S-X or ~~evaluated on or before December 31, 2024.~~Regulation S-K by June 30, 2027, then this ASU will not become effective. Early adoption is prohibited. The Company adopted ASU 2020-04 during the second quarter of 2023 after modifying certain debt to update the reference rate from LIBOR to the Secured Overnight Financing Rate ("SOFR"). The Company will continue to assess the impact of the guidance and may apply other elections as applicable going forward but does not expect the ~~application will~~amendments of this accounting standard update to have a material ~~effect~~impact on its consolidated financial ~~position~~statements and related disclosures.

In November 2023, the FASB issued ASU No. 2023-07 (“ASU 2023-07”), Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures to improve reportable segment disclosure requirements, primarily through enhanced disclosures about significant segment expenses. In addition, the amendments in the ASU enhance interim disclosure requirements, clarify circumstances in which an entity can disclose multiple segment measures of profit or ~~results~~loss, provide new segment disclosure requirements for entities with a single reportable segment, and contain other disclosure requirements. ASU 2023-07 is effective for fiscal years beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024, and requires retrospective application to all prior periods presented in the financial statements. Early adoption is permitted. The Company is currently evaluating the impact of ~~operations.~~this accounting standard update on its consolidated financial statements and related disclosures.

In December 2023, the FASB issued ASU No. 2023-09 (“ASU 2023-09”), Income Taxes (Topic 740): Improvement to Income Tax Disclosures to enhance the transparency and decision usefulness of income tax disclosures, primarily related to the rate reconciliation and income taxes paid information. ASU 2023-09 is effective for annual periods beginning after December 15, 2024, on a prospective basis. Early adoption is permitted. The Company is currently evaluating the impact of this accounting standard update on its consolidated financial statements and related disclosures.

Interest and other income (expense), net

Interest and other income (expense), net for the three ~~and nine~~ months ended ~~September 30,~~March 31, 2024 and 2023, ~~and 2022,~~ included the following (in ~~millions)~~thousands):


		Three Months Ended March 31,
		Three Months Ended March 31,
		Three Months Ended March 31,
		2024
		2024
		2024
Interest income
Interest income
Interest income
Post-retirement benefit (expense)
Post-retirement benefit (expense)
Post-retirement benefit (expense)

		Three Months Ended September 30,				Nine Months Ended September 30,
Gain (loss) on fair value adjustments related to interest rate swaps
		2023		2022		2023		2022
Interest income		$	0.1	$	0.0	$	0.3	$	0.2
Pension and post-retirement benefit (expense)		0.1		(0.1)		(0.2)		(0.6)

Gain (loss) on fair value adjustments related to interest rate swaps

Gain (loss) on fair value adjustments related to interest rate swaps
Financing charges
Financing charges
Financing charges

Other income (expense), net

Other income (expense), net

Other income (expense), net	Other income (expense), net	(0.1)		(0.1)		(0.1)		0.5
Interest and other income (expense), net	Interest and other income (expense), net	$	0.1	$	(0.2)	$	0.0	$	0.1
Interest and other income (expense), net
Interest and other income (expense), net

3. ~~REAL ESTATE ASSET ACQUISITIONS~~

During the nine months ended September 30, 2023, the Company acquired one industrial commercial real estate asset for $9.5 million. A portion of the transaction was structured to qualify as a reverse like-kind exchange under Section 1031 of the Internal Revenue Code and accordingly, was acquired by a variable interest entity ("VIE") formed by an exchange accommodation titleholder using funds loaned by the Company. The Company operated the VIE pursuant to a management agreement. Furthermore, as the primary beneficiary with the ability to control the activities that most significantly impacted the VIE's economic performance and all the risks and rewards of ownership, the Company consolidated the VIE. The Company did not relinquish property to close the reverse like-kind exchange within the 180-day timeframe, as such, on October 30, 2023, the ownership of the property was conveyed to the Company in accordance with the terms of the like-kind exchange agreements and therefore is no longer a VIE.

~~The allocation of purchase price to assets acquired and liabilities assumed is as follows (in millions):~~


~~Fair value of assets acquired~~
~~Assets acquired:~~
~~Land~~	$	~~3.0~~
~~Property and improvements~~	~~6.1~~
~~In-place leases~~	~~0.4~~

~~Total assets acquired~~	$	~~9.5~~

~~As of the acquisition date, the weighted-average amortization periods of the in-place leases was approximately 10.0 years.~~

4. Investments in Affiliates

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

Operating results presented in the Company's condensed consolidated financial statements include the Company's proportionate share of net income (loss) from its equity method investments. Summarized financial information of entities accounted for by the equity method on a combined basis for the three ~~and nine~~ months ended ~~September 30,~~March 31, 2024 and 2023, ~~and 2022,~~ is as follows (in ~~millions)~~thousands):


		Three Months Ended September 30,				Nine Months Ended September 30,
		2023		2022		2023		2022
		Three Months Ended March 31,
		Three Months Ended March 31,
		Three Months Ended March 31,
		2024
		2024
		2024
Revenues
Revenues
Revenues	Revenues	$	41.4	$	37.0	$	120.0	$	97.8
Operating costs and expenses	Operating costs and expenses	36.1		31.8		106.2		89.5
Operating costs and expenses
Operating costs and expenses
Gross Profit (Loss)
Gross Profit (Loss)
Gross Profit (Loss)	Gross Profit (Loss)	$	5.3	$	5.2	$	13.8	$	8.3
Income (Loss) from Continuing Operations1	Income (Loss) from Continuing Operations1	$	1.1	$	2.0	$	0.3	$	(2.7)
Income (Loss) from Continuing Operations1
Income (Loss) from Continuing Operations1
Net Income (Loss)1
Net Income (Loss)1
Net Income (Loss)1	Net Income (Loss)1	$	1.1	$	2.3	$	0.3	$	2.9
										1 Includes earnings from equity method investments held by the investee.
1 Includes earnings from equity method investments held by the investee.

1 Includes earnings from equity method investments held by the investee.

During the ~~nine~~three months ended ~~September 30,~~March 31, 2024 and 2023, ~~and 2022,~~ Income (loss) related to joint ventures was ~~$1.9~~$0.7 million and ~~$2.3~~$0.4 million, respectively, and return on investment operating cash distributions was ~~zero~~$0.7 million and ~~$3.3 million,~~zero, respectively.

5.4. Fair Value Measurements

Recurring Fair Value Measurements

The following tables present the fair value of those assets and (liabilities) measured on a recurring basis as of ~~September 30, 2023~~March 31, 2024 and December 31, ~~2022,~~2023, (in ~~millions)~~thousands):

Fair Value Measurements at

September 30, 2023

Condensed Consolidated Balance Sheet Location

Total

Quoted Prices in Active Markets (Level 1)

Significant Observable Inputs
(Level 2)

Significant Unobservable Inputs
(Level 3)

Fair Value Measurements at

March 31, 2024

Consolidated Balance Sheet Location

Total

Quoted Prices in Active Markets (Level 1)

Significant Observable Inputs
(Level 2)

Significant Unobservable Inputs
(Level 3)

Assets

Derivative financial instruments - interest rate swaps

Prepaid expenses and other assets

9.6

—

9.6

—

Fair Value Measurements at

December 31, 2022

Condensed Consolidated Balance Sheet Location

Total

Quoted Prices in Active Markets (Level 1)

Significant Observable Inputs
(Level 2)

Significant Unobservable Inputs
(Level 3)

Fair Value Measurements at

December 31, 2023

Consolidated Balance Sheet Location

Total

Quoted Prices in Active Markets (Level 1)

Significant Observable Inputs
(Level 2)

Significant Unobservable Inputs
(Level 3)

Assets

Derivative financial instruments - interest rate swaps

Prepaid expenses and other assets

5.5

—

5.5

—

Liabilities

Derivative financial instruments - interest rate swaps

Accrued and other liabilities

(2.8)

—

(2.8)

—

Derivative financial instruments - interest rate swaps

Derivative Financial Instruments: The Company records its interest rate swaps at fair value. The fair values of the Company's interest rate swaps are classified as Level 2 measurements in the fair value hierarchy and are based on the estimated amounts that the Company would receive or pay to terminate the contracts at the reporting date and are determined using interest rate pricing models and interest rate related observable inputs (refer to Note 76 – Derivative Instruments for fair value information regarding the Company's derivative instruments).

~~Non-Recurring Fair Value~~

109

Non-Recurring Fair Value

Certain financial and nonfinancial assets and liabilities are measured at fair value on a nonrecurring basis and are subject to fair value adjustments in certain circumstances, such as when there is evidence of impairment. The Company’s process for identifying and recording impairment is discussed in Note 2 to the consolidated financial statements included in Item 8 of the Company's ~~2022~~2023 Form 10-K.

Impairment of Assets Held for Sale, net: As of March 31, 2024 and December 31, 2023, one CRE improved property met the criteria for classification as held for sale and accordingly, was measured at its fair value less costs to sell, resulting in an impairment charge of $2.2 million recorded during the year ended December 31, 2023. During the three months ended March 31, 2024, the Company recorded no additional fair value adjustment related to assets and liabilities held for sale. The Company classifies these fair value measurements as Level 3 in the fair value hierarchy because they are determined using significant unobservable inputs such as management assumptions about expected sales proceeds from third parties.

The following table presents the fair value hierarchy and quantitative information about the significant unobservable inputs used to determine the fair value of long-lived assets held and used and assets held for sale, net for which a nonrecurring fair value adjustment was recorded (in ~~millions)~~thousands):

Fair Value Measurements at Quantitative Information about
December 31, 2022 Level 3 Fair Value Measurements
Total Quoted Prices in Active Markets (Level 1) Significant Observable Inputs
(Level 2) Significant Unobservable Inputs
(Level 3) Total Gains (Losses) Valuation Technique/ Unobservable Inputs Weighted Average Discount Rate
Assets held for sale, net1,2
$ 50.0 $ — $ — $ 50.0 $ (89.8) Indicative bids N/A
Long-lived assets3
— — — — (5.0) Discounted cash flows/ 16%
Market comparables N/A
Total $ 50.0 $ — $ — $ 50.0 $ (94.8)
1 Assets or liabilities are presented in Assets held for sale or Liabilities associated with assets held for sale, respectively, in the Condensed Consolidated Balance Sheets. Impairment loss is presented in Income (loss) from discontinued operations, net of income taxes in the Condensed Consolidated Statements of Operations.
2 Assets held for sale of $126.8 million, net of liabilities associated with assets held for sale of $81.0 million, and excluding estimated selling costs of $4.2 million.
3 Included in Real estate property in the Condensed Consolidated Balance Sheets. Impairment loss is presented in Cost of Land Operations in the Condensed Consolidated Statements of Operations and is recognized in the Land Operations segment.

~~Assets Held for Sale, net:~~ As a result of the Grace Disposal Group's classification as held for sale as of December 31, 2022, the Company measured the disposal group at its fair value less costs to sell and recorded an impairment charge of $89.8 million for the year ended December 31, 2022. During the nine months ended September 30, 2023, the Company recorded no additional fair value adjustments related to assets and liabilities held for sale. The fair value of the Grace Disposal Group is classified as a Level 3 measurement in the fair value hierarchy because it is determined using significant unobservable inputs such as management assumptions about expected sales proceeds from third parties.

~~Impairment of Long-lived Assets Held and Used and Finite-Lived Intangible Assets:~~ During the year ended December 31, 2022, the Company recognized an impairment charge of $5.0 million related to parcels of conservation and agriculture zoned land on Oahu. During the nine months ended September 30, 2023, the Company did not recognize any impairment of long-lived assets held and used or finite-lived intangible assets. The Company classifies these fair value measurements as Level 3 in the fair value hierarchy because they involve significant unobservable inputs such as cash flow projections, discount rates, and management assumptions.

~~Abandoned development costs: During the nine months ended September 30, 2023, the Company recorded an impairment charge of $0.6 million related to the abandonment of potential CRE development projects, which is presented in~~ ~~Impairment of assets~~ ~~in the Condensed Consolidated Statements of Operations.~~


	Fair Value Measurements at										Quantitative Information about
	December 31, 2023										Level 3 Fair Value Measurements
	Total		Quoted Prices in Active Markets (Level 1)		Significant Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)		Total Gains (Losses)		Valuation Technique/ Unobservable Inputs	Weighted Average Discount Rate
Assets held for sale, net1,2	$	14,209	$	—	$	—	$	14,209	$	(2,183)	Contract value	N/A


Total	$	14,209	$	—	$	—	$	14,209	$	(2,183)

1 Assets or liabilities are presented in Assets held for sale or Accrued and other liabilities, respectively, in the Condensed Consolidated Balance Sheets. Impairment loss was recorded during year ended December 31, 2023, in Impairment of assets in the Consolidated Statements of Operations.
2 Assets held for sale of $14.0 million, net, excluding estimated selling costs of $0.3 million.

Financial Assets and Liabilities not Measured at Fair Value

Financial assets and liabilities that are not measured at fair value on our condensed consolidated balance sheets include cash and cash equivalents, restricted cash, accounts and notes receivable, net and notes payable and other debt. The fair value of the Company's cash and cash equivalents, restricted cash, accounts receivable, net and short-term borrowings approximate their carrying values due to the short-term nature of the instruments, which is classified as Level 1 measurement in the fair value hierarchy.

The fair value of the Company's notes receivable approximated the carrying amount of ~~$3.3~~$11.4 million and ~~$1.9~~$20.8 million as of ~~September 30, 2023~~March 31, 2024 and December 31, ~~2022,~~2023, respectively. The fair value of these notes is estimated using a discounted cash flow analysis in which the Company uses unobservable inputs such as market interest rates determined by the loan-to-value and market capitalization rates related to the underlying collateral at which management believes similar loans would be made, and is classified as a Level 3 measurement in the fair value hierarchy.

At ~~September 30,~~March 31, 2024, the carrying amount of the Company's notes payable and other debt was $457.6 million and the corresponding fair value was $448.1 million. At December 31, 2023, the carrying amount of the Company's notes payable and other debt was ~~$507.6~~$464.0 million and the corresponding fair value was ~~$488.3 million. At December 31, 2022, the carrying amount of the Company's notes payable and other debt was $472.2 million and the corresponding fair value was $449.2~~$452.5 million. The fair value of debt is calculated by discounting the future cash flows of the debt at rates based on instruments with similar risk, terms and maturities as compared to the Company's existing debt arrangements, and is classified as a Level 3 measurement in the fair value hierarchy.

5. Notes Payable and Other Debt

As of ~~September 30, 2023~~March 31, 2024 and December 31, ~~2022,~~2023, notes payable and other debt consisted of the following (dollars in ~~millions)~~thousands):

Interest Rate (%) Maturity Date Principal Outstanding
September 30, 2023 December 31, 2022
Secured:
Laulani Village 3.93% 2024 $ 58.1 $ 59.0
Pearl Highlands 4.15% 2024 75.7 77.3
Photovoltaic Financing (1) 2027 2.4 2.6
Manoa Marketplace (2) 2029 53.1 54.5
Subtotal $ 189.3 $ 193.4
Unsecured:
Series A Note 5.53% 2024 $ 7.1 $ 14.2
Series J Note 4.66% 2025 10.0 10.0
Series B Note 5.55% 2026 27.0 36.0
Series C Note 5.56% 2026 9.0 11.0
Series F Note 4.35% 2026 9.7 15.2
Series H Note 4.04% 2026 50.0 50.0
Series K Note 4.81% 2027 34.5 34.5
Series G Note 3.88% 2027 22.1 28.1
Series L Note 4.89% 2028 18.0 18.0
Series I Note 4.16% 2028 25.0 25.0
Term Loan 5 4.30% 2029 25.0 25.0
Subtotal $ 237.4 $ 267.0
Revolving Credit Facilities:
A&B Revolver (3) 2025 (4) 81.0 12.0
Total debt (contractual) $ 507.7 $ 472.4
Unamortized debt issuance costs (0.1) (0.2)
Total debt (carrying value) $ 507.6 $ 472.2
(1) Financing lease has an interest rate of 4.14%.
(2) Loan has a stated interest rate of SOFR plus 1.35%. Prior to August 1, 2023, loan had a stated interest rate of LIBOR plus 1.35%. Loan is swapped through maturity to a 3.14% fixed rate.
(3) Loan has a stated interest rate of SOFR plus 1.05% based on a pricing grid, plus a SOFR adjustment of 0.10%. Prior to April 28, 2023, loan had a stated interest rate of LIBOR plus 1.05% based on a pricing grid. $50.0 million was swapped through June 2022 to a 2.40% fixed rate.
(4) A&B Revolver has two six-month optional term extensions.

On March 5, 2021, the Financial Conduct Authority announced a timeline for the phase-out of LIBOR. The Federal Reserve, the Federal Deposit Insurance Corporation, and the Office of the Comptroller of the Currency subsequently issued a joint statement saying that banks should stop entering into new contracts with LIBOR as soon as possible but at least by December 31, 2021. As of January 1, 2022, LIBOR could only be used for legacy LIBOR obligations entered into prior to December 31, 2021, and the publication of US dollar LIBOR ceased on June 30, 2023. The Secured Overnight Financing Rate ("SOFR") and Bloomberg Short Term Bank Yield Index ("BSBY") were identified as replacements to LIBOR by the Federal Reserve-formed Alternative Reference Rates Committee. As of September 30, 2023, the Company had entered into agreements that transitioned its LIBOR-based notes payable and other debt to other acceptable benchmarks, as described below.

On April 28, 2023, the Company entered into the First Amendment to the Third Amended and Restated Credit Agreement ("A&B Revolver") with Bank of America N.A., as administrative agent, First Hawaiian Bank, KeyBank National Association, Wells Fargo Bank, National Association, and other lenders party thereto, which transitioned the interest rate from LIBOR to a benchmark based on SOFR. All other terms of the agreement remain substantially unchanged.

The Company entered into a note modification agreement with First Hawaiian Bank which transitioned the interest rate on the Manoa Marketplace secured note from LIBOR to a benchmark based on SOFR effective August 1, 2023. All other terms of the agreement remain substantially unchanged.


	Interest Rate (%)	Maturity Date		Principal Outstanding
				March 31, 2024		December 31, 2023
Secured:
Laulani Village	3.93%	2024		$	57,517	$	57,798
Pearl Highlands	4.15%	2024		74,570		75,137
Photovoltaic Financing	(1)	(1)		4,000		4,073
Manoa Marketplace	(2)	2029		52,254		52,705
Subtotal				$	188,341	$	189,713
Unsecured:
Series A Note	5.53%	2024		$	7,125	$	7,125
Series J Note	4.66%	2025		10,000		10,000
Series B Note	5.55%	2026		18,000		27,000
Series C Note	5.56%	2026		9,000		9,000
Series F Note	4.35%	2026		9,625		9,650
Series H Note	4.04%	2026		50,000		50,000
Series K Note	4.81%	2027		34,500		34,500
Series G Note	3.88%	2027		17,125		22,125
Series L Note	4.89%	2028		18,000		18,000
Series I Note	4.16%	2028		25,000		25,000
Term Loan 5	4.30%	2029		25,000		25,000
Subtotal				$	223,375	$	237,400
Revolving Credit Facilities:
A&B Revolver	(3)	2025	(4)	46,000		37,000

Total debt (contractual)				$	457,716	$	464,113
Unamortized debt premium (discount)				$	91	$	—
Unamortized debt issuance costs				(233)		(149)
Total debt (carrying value)				$	457,574	$	463,964

(1) Financing leases have a weighted average discount rate of 4.75% and maturity dates ranging from 2027 to 2028.
(2) Loan has a stated interest rate of SOFR plus 1.35%. Loan is swapped through maturity to a 3.14% fixed rate.
(3) Loan has a stated interest rate of SOFR plus 1.05% based on a pricing grid, plus a SOFR adjustment of 0.10%.
(4) A&B Revolver has two six-month optional term extensions.

7.6. Derivative Instruments

The Company is exposed to interest rate risk related to its variable-rate interest debt. From time to time, the Company may use interest rate swaps to manage its exposure to interest rate risk.

Cash Flow Hedges of Interest Rate Risk

~~The~~As of March 31, 2024, the Company ~~has~~had three interest rate swap agreements, all three of which were designated as cash flow ~~hedges, whose~~hedges. The key terms are as follows (dollars in ~~millions)~~thousands):

Effective Maturity Fixed Interest Notional Amount at Asset (Liability) Fair Value at
Date Date Rate September 30, 2023 September 30, 2023 December 31, 2022
Interest Rate Swap Agreements
4/7/2016 8/1/2029 3.14% $ 53.1 $ 6.2 $ 5.5
Forward Interest Rate Swap Agreements
5/1/2024 12/9/2031 4.88% $ 57.0 $ 1.7 $ (1.3)
12/9/2024 12/9/2031 4.83% $ 73.0 $ 1.7 $ (1.5)


Effective	Maturity	Fixed Interest	Notional Amount at		Asset (Liability) Fair Value at
Date	Date	Rate	March 31, 2024		March 31, 2024		December 31, 2023
Interest Rate Swap Agreements
4/7/2016	8/1/2029	3.14%	$	52,254	$	4,902	$	4,142
Forward Interest Rate Swap Agreements
5/1/2024	12/9/2031	4.88%	$	57,000	$	584	$	(1,144)
12/9/2024	12/9/2031	4.83%	$	73,000	$	343	$	(1,574)

The asset related to the interest rate swap and ~~the~~ forward interest rate swaps as of ~~September 30, 2023,~~March 31, 2024, is presented within Prepaid expenses and other assets in the condensed consolidated balance sheets. The asset related to the interest rate swap and liability related to the forward interest rate swaps ~~and the asset related to the interest rate swap~~ as of December 31, ~~2022,~~2023, are presented within~~Accrued and other liabilities~~ ~~and~~ Prepaid expenses and other assets and Accrued and other liabilities, respectively, in the condensed consolidated balance sheets. ~~The changes~~Changes in fair value of ~~the~~designated cash flow hedges are recorded in Accumulated other comprehensive income (loss) and subsequently reclassified into interest expense as interest is incurred on the related variable-rate debt. Changes in fair value of undesignated cash flow hedges, including de-designated hedges, are recorded in Interest and other income (expense), net.

In 2022, the Company entered into two forward starting interest rate swap agreements with notional amounts of $57.0 million and $73.0 million in order to hedge interest rate fluctuations related to $130.0 million of future financing aligned with the effective and maturity dates listed. The Company designated the hedging relationships of these two forward interest swap agreements as cash flow hedges at their inception. In December 2023, the Company de-designated the forward interest swap agreements as it was determined that underlying cash flows related to the designated hedging relationships were no longer probable of occurring. As a result, for the year ended December 31, 2023, the Company reclassified from Accumulated other comprehensive income (loss) and recognized in Interest and other income (expense), net a $2.7 million loss related to the fair value adjustment of the de-designated hedging relationships. Subsequent changes in fair value of the forward interest rate swaps were recorded in earnings until, on February 29, 2024, the Company re-designated the hedging relationships of both forward interest rate swaps in anticipation of future financing. The Company recorded a gain on forward interest rate swap valuation adjustment of $3.7 million during the three months ended March 31, 2024, that occurred prior to the date of re-designation.

Statement of Comprehensive Income (Loss) Derivative Instruments Impact

The following table represents the pre-tax effect of the derivative instruments in the Company's condensed consolidated statements of comprehensive income (loss) during the three ~~and nine~~ months ended ~~September 30,~~March 31, 2024 and 2023, ~~and 2022,~~ (in ~~millions)~~thousands):


			Three Months Ended March 31,
			Three Months Ended March 31,
			Three Months Ended March 31,
					2024					2024	2023
Information regarding derivatives designated as hedging instruments
Amount of gain (loss) recognized in OCI on derivatives
Amount of gain (loss) recognized in OCI on derivatives
Amount of gain (loss) recognized in OCI on derivatives
Impact of reclassification adjustment to interest expense included in Net Income (Loss)

	Three Months Ended September 30,					Nine Months Ended September 30,
	2023		2022			2023		2022
Derivatives in Designated Cash Flow Hedging Relationships:
Amount of gain (loss) recognized in OCI on derivatives	$	7.5	$	2.6		$	8.0	$	8.0
Impact of reclassification adjustment to interest expense included in Net Income (Loss)	$	(0.4)	$	(0.1)		$	(1.2)	$	0.5
Realized interest rate hedging gain (loss)	$	—	$	—		$	—	$	(0.5)

As of ~~September 30, 2023,~~March 31, 2024, the Company expects to reclassify ~~$2.3~~$2.8 million of net gains (losses) on derivative instruments from accumulated other comprehensive income to earnings during the next 12 months.

8.7. Commitments and Contingencies

Commitments and other financial arrangements

The Company has various financial commitments and other arrangements including standby letters of credit and bonds that are not recorded as liabilities on the Company's condensed consolidated balance sheet as of September 30, 2023:

•Standby letters of credit issued by the Company's lenders under the Company's revolving credit facility totaled $1.1 million as of September 30, 2023. These letters of credit primarily relate to the Company's workers' compensation plans and if drawn upon, the Company would be obligated to reimburse the issuer.

•Bonds related to the Company's real estate activities totaled $18.7 million as of ~~September 30, 2023,~~March 31, 2024, and represent commercial bonds issued by third party sureties (permit, subdivision, license and notary ~~bonds). If drawn upon, the~~

~~Company would be obligated to reimburse the surety that issued the bond for the amount of the bond, reduced for the work completed to date.~~

•~~Bonds related to Grace Pacific totaled $357.4 million as of September 30, 2023, and represent the face value of construction bonds issued by third party sureties (bid, performance and payment~~ bonds). If drawn upon, the Company would be obligated to reimburse the surety that issued the bond for the amount of the bond, reduced for the work completed to date. ~~As of September 30, 2023, the Company's maximum remaining exposure, in the event of defaults on all existing contractual construction obligations, was approximately $139.1 million.~~

~~The Company also provides certain bond indemnities and guarantees of indebtedness for unconsolidated affiliates accounted for as equity method investments related to Grace Pacific.~~

•Bond indemnities are provided for the benefit of the third-party surety in exchange for construction bonds (bid, performance and payment bonds). Under such bond indemnities, the Company and the joint venture partners agree to indemnify the surety bond issuer from all losses and expenses arising from the failure of the joint venture to complete the specified bonded construction; the Company may be obligated to reimburse the surety that issued the bond for the amount of the bond, reduced for the work completed to date if the joint venture does not perform.

•Guarantees of indebtedness may be provided by the Company for the benefit of financial institutions providing credit to unconsolidated equity method investees. As of September 30, 2023, the Company had no such arrangements with third party lenders related to its unconsolidated equity method investees and no amounts outstanding.

The recorded amounts of the bond indemnities and guarantee of indebtedness were not material individually or in the aggregate. Other than those described above, obligations of the Company's joint ventures do not have recourse to the Company, and the Company's "at-risk" amounts are limited to its investment.

Legal proceedings and other contingencies

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

The last of these water license agreements expired in 1986, and all four agreements were then extended as revocable permits that were renewed annually. In 2001, a request was made to the State Board of Land and Natural Resources (the "BLNR") to replace these revocable permits with a long-term water lease. Pending the completion by the BLNR of a contested case hearing it ordered to be held on the request for the long-term lease, the BLNR has kept the existing permits on a holdover basis. Three parties (Healoha Carmichael; Lezley Jacintho; and Na Moku Aupuni O Ko‘olau Hui) filed a lawsuit on April 10, 2015, (the "Initial Lawsuit") alleging that the BLNR has been renewing the revocable permits annually rather than keeping them in holdover status. The lawsuit challenged the BLNR’s decision to continue the revocable permits for calendar year 2015 and asked the court to void the revocable permits and to declare that the renewals were illegally issued without preparation of an environmental assessment ("EA"). In December 2015, the BLNR decided to reaffirm its prior decisions to keep the permits in holdover status. This decision by the BLNR was challenged by the three parties. In January 2016, the court ruled in the Initial Lawsuit that the renewals were not subject to the EA requirement, but that the BLNR lacked legal authority to keep the revocable permits in holdover status beyond one year (the "Initial Ruling"). The Initial Ruling was appealed to the Intermediate Court of Appeals ("ICA") of the State of Hawai‘i.

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

In June 2019, the ICA vacated the Initial Ruling, effectively reversing the determination that the BLNR lacked authority to keep the revocable permits in holdover status beyond one year (the "ICA Ruling"). The ICA remanded the case back to the trial court to determine whether the holdover status of the permits was both (a) "temporary" and (b) in the best interest of the State, as required by statute. The plaintiffs filed a motion with the ICA for reconsideration of its decision, which was denied on July 5, 2019. On September 30, 2019, the plaintiffs filed a request with the Supreme Court of Hawai‘i to review

and reverse the ICA Ruling. On November 25, 2019, the Supreme Court of Hawai‘i granted the plaintiffs' request to review the ICA Ruling and, on May 5, 2020, oral argument was held.

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

On March 2, 2022, the Supreme Court of Hawai’i vacated the ICA’s ruling relating to the BLNR's decision to continue the revocable permits for the calendar year 2015, holding that Hawaii Revised Statutes Chapter 343 (the Hawaii Environmental Policy Act) did apply to the permits. The court remanded the matter back to the Circuit Court to determine if any exceptions would apply and, if not, how HRS Chapter 343 should be applied in light of the steps taken by A&B/EMI toward the long-term water lease. The Supreme Court of Hawai’i also determined that the BLNR had the statutory authority to continue the permits for more than one year, but required the BLNR to make findings of fact and conclusions of law determining that the action would serve the best interests of the State. On remand, the Carmichael Plaintiffs filed a motion for partial summary judgment asking the Circuit Court to conclude that the BLNR and A&B/EMI ~~will continue to defend against~~violated HRS Chapter 343 when the BLNR continued the revocable permits for calendar year 2015. On December 21, 2023, the Circuit Court entered its order granting in part and denying in part the motion for partial summary judgment, determining that the BLNR and A&B/EMI had violated HRS Chapter 343 when the BLNR continued the revocable permits for calendar year 2015, but denying the plaintiffs’ ~~claims~~request for a declaration that A&B/EMI had no authority to divert any water until a final environmental impact statement had been accepted.

Also on ~~remand.~~remand, the Carmichael Plaintiffs sought and were granted leave to file an amended complaint asserting a claim for unjust enrichment against A&B/EMI. The plaintiffs assert that they had a superior right to the water diverted by EMI from at least 2015 until September 2021 when BLNR accepted the final environmental impact statement for the long-term water lease, and EMI lacked the authority to divert water during that time period. In December 2023, the Carmichael Plaintiffs filed their amended complaint.

In the companion case brought by Na Moku Aupuni O Ko‘olau Hui challenging the BLNR’s decision to continue the revocable permits for calendar year 2016, Na Moku filed a motion asking for a decision on appeal and requesting that the Circuit Court limit the current diversion of water pursuant to the revocable permits and order the BLNR to allow Na Moku to intervene in the contested case hearing ordered by the Circuit Court in the Sierra Club litigation addressed below. On January 2, 2024, the Circuit Court entered its order granting Na Moku’s request to invalidate the BLNR’s decision reaffirming the holdover status of the revocable permits for calendar year 2016 and denying Na Moku’s request to (1) impose a cap on the current amount of water diverted pursuant to the revocable permits, (2) order the BLNR to allow Na Moku to intervene in Sierra Club’s contested case hearing; and (3) declare that A&B/EMI had no legal authority to divert water pursuant to then-valid revocable permits. In January 2024, the circuit court entered final judgment in this case.

In a separate matter, on December 7, 2018, a contested case request filed by the Sierra Club (contesting the BLNR's November 2018 approval of the 2019 revocable permits) was denied by the BLNR. On January 7, 2019, the Sierra Club filed a lawsuit in the circuit court of the first circuit in Hawai‘i against the BLNR, A&B and EMI, seeking to invalidate the 2019 and 2020 holdovers of the revocable permits for, among other things, failure to perform an EA. The lawsuit also sought to enjoin A&B/EMI from diverting more than 25 million gallons a day until a permit or lease is properly issued by the BLNR, and for the imposition of certain conditions on the revocable permits by the BLNR. The count seeking to invalidate the revocable permits based on the failure to perform an EA was dismissed by the court, based on the ICA Ruling in the Initial Lawsuit. The Sierra Club’s lawsuit was amended to include a challenge to the BLNR’s renewal of the revocable permits for calendar year 2020. After a full trial on the merits held beginning in August of 2020, the court ruled, on April 6, 2021, against the Sierra Club on its lawsuit challenging the 2019 and 2020 revocable permits. On February 17, 2022, the Sierra Club filed its notice of appeal challenging the decision on the August 2020 trial. The court separately considered a lawsuit filed by the Sierra Club appealing the BLNR’s decision to deny it a contested case hearing on the 2021 revocable permits, which were granted by the BLNR on or about November 13, 2020. In that case, on May 28, 2021, the court issued an interim decision that the Sierra Club’s due process rights were violated, ordered the BLNR to hold a contested case hearing on the 2021 permits, and that the permits would be vacated. On July 30, 2021, the court modified its ruling to say that the permits would not be invalidated, but left in place pending the outcome of the contested case hearing. The contested case hearing was held by the BLNR in December 2021 to address the continuation of the revocable permits for both calendar years 2021 and 2022 and the BLNR issued a decision on June 30, 2022. On December 27, 2021, while the BLNR’s decision in the contested case hearing was pending, the court further modified its ruling to allow the permits to remain in place until the earlier of May 1, 2022, the date on which the BLNR renders a substantive decision on the continuation of the permits for calendar year 2022, or further order of the court. On April 26, 2022, the court orally granted an extension of the May 1, 2022 deadline to the earlier of June 15, 2022, or the date on which the BLNR renders a substantive decision on the continuation of the permits for calendar year 2022, or as may be further ordered by the court. On June 1, 2022, the court granted an extension of the June 15, 2022 deadline to the earlier of July 15, 2022 or the date on which the BLNR renders a substantive decision on the continuation of the permits for calendar year 2022 or as may be further ordered by the court. On June 30, 2022, the BLNR issued its final decision on the contested case hearing on the permits for calendar years 2021 and 2022, approving the continuation of the permits through the end of calendar year 2022. The Sierra Club filed a notice of appeal of that decision to the Circuit Court of the First Circuit in Hawai‘i and on March 31, 2023, the Circuit Court entered its Order on Appeal dismissing the Sierra Club's appeal as moot. The Company and the BLNR ~~also~~ appealed the court’s determination that the Sierra Club was entitled to a contested case hearing on the 2021 revocable permits. At the request of Sierra Club, the Intermediate Court of Appeals held oral argument on the matter on December 13, 2023. On April 12, 2024, the ICA issued its opinion holding that Sierra Club was not entitled to a contested case hearing, the circuit court erred by modifying the permits, and Sierra Club was not entitled to attorneys’ fees and costs. In July 2022, the Sierra Club filed a separate appeal challenging the BLNR’s June 30, 2022 decision on the contested case hearing on the permits for calendar years 2021 and 2022. On March 31, 2023, the court entered its decision on appeal, dismissing the appeal as moot. On January 29, 2024, the court entered final judgment in this case. On February 8, 2024, the Sierra Club filed a notice of appeal with the Hawaii Intermediate Court of Appeals.

On November 10, 2022, the BLNR voted to continue the revocable permits for calendar year 2023 and, at that same meeting, denied the Sierra Club’s oral request for a contested case hearing. The Sierra Club subsequently submitted a written request to the BLNR for a contested case hearing on the continuation of the revocable permits, which the BLNR denied on December 9, 2022. On November 29, 2022, the Sierra Club filed an appeal of the BLNR’s decisions to deny its oral request for a contested case hearing and to continue the revocable permits for 2023 and on December 15, 2022, the Sierra Club amended its appeal to also challenge the BLNR’s denial of its written request for a contested case hearing. On June 16, 2023, the Circuit Court entered its Decision on Appeal; and Interim Modification of Permits Pursuant to HRS 91-14(g) in which the court concluded that the Sierra Club was again entitled to a contested case hearing on the continuation of the revocable permits for calendar year 2023. The court also modified the BLNR’s decision to continue the revocable permits by reducing the cap to 31.50 million gallons per day. A&B/EMI filed motions to increase the modified cap and for leave to take an immediate appeal. On August 11, 2023, the court entered its order denying A&B/EMI’s motion for leave to take an immediate appeal. On September 8, 2023, the court entered its ruling denying without prejudice A&B/EMI’s motion to increase the modified cap. On August 17, 2023, Sierra Club filed its First Motion to Modify Permits, asking the court to impose conditions on the revocable

permits requiring A&B/EMI to determine the water needs of the County of Maui Fire Department and to line one ~~reservoir.~~reservoir, which the court granted in

part, ordering the parties to meet with the County of Maui Fire Department to discuss the Department’s water needs. In January 2024, the court entered final judgment in this case. In February 2024, A&B/EMI and BLNR filed separate notices of appeal with the Hawaii Intermediate Court of Appeals.

On December 8, 2023, the BLNR issued a new revocable permit to the Company for calendar year 2024. On that same date, after the BLNR voted to grant the new revocable permit to the Company, Sierra Club made an oral request for a contested case hearing and, on December 18, 2023, filed a written request for the same. The ~~court~~BLNR has not ~~yet ruled~~decided on ~~that motion.~~Sierra Club’s requests for a contested case hearing.

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

In addition to the litigation described above, the Company is a party to, or may be contingently liable in connection with, other legal actions arising in the normal conduct of its businesses. While the outcomes of such litigation and claims cannot be predicted with certainty, in the opinion of management after consultation with counsel, the reasonably possible losses would not have a material effect on the Company's consolidated financial statements as a whole.

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

8. Revenue and Contract Balances

The Company generates revenue through its Commercial Real Estate and Land Operations segments. Through its Commercial Real Estate segment, the Company owns and operates a portfolio of commercial real estate properties and generates income (i.e., revenue) as a lessor through leases of such assets. Refer to Note 109 – Leases - The Company as a Lessor for further discussion of lessor income recognition. The Land Operations segment generates revenue from contracts with customers. The Company further disaggregates revenue from contracts with customers by revenue type when appropriate if the Company believes disaggregation best depicts how the nature, amount, timing, and uncertainty of the Company's revenue and cash flows are affected by economic factors. Revenue by type for the three ~~and nine~~ months ended ~~September 30,~~March 31, 2024 and 2023, ~~and 2022,~~ was as follows (in ~~millions)~~thousands):


		Three Months Ended September 30,				Nine Months Ended September 30,
		2023		2022		2023		2022
		Three Months Ended March 31,
		Three Months Ended March 31,
		Three Months Ended March 31,
		2024
		2024
		2024
Revenues:
Revenues:
Revenues:	Revenues:
Commercial Real Estate	Commercial Real Estate	$	48.2	$	46.5	$	145.6	$	138.8
Commercial Real Estate
Commercial Real Estate
Land Operations:
Land Operations:
Land Operations:	Land Operations:
Development sales revenue	Development sales revenue	—		—		—		6.3
Development sales revenue
Development sales revenue
Unimproved/other property sales revenue
Unimproved/other property sales revenue
Unimproved/other property sales revenue	Unimproved/other property sales revenue	4.0		—		8.1		2.0
Other operating revenue	Other operating revenue	0.3		2.9		2.3		12.6
Other operating revenue
Other operating revenue
Land Operations
Land Operations
Land Operations	Land Operations	4.3		2.9		10.4		20.9
Total revenues	Total revenues	$	52.5	$	49.4	$	156.0	$	159.7
Total revenues
Total revenues

The following table provides information about receivables, contract assets and contract liabilities from contracts with customers as of March 31, 2024 and December 31, 2023 (in ~~millions)~~thousands):

September 30, 2023 December 31, 2022
Accounts receivable $ 6.7 $ 8.6
Allowances (credit losses and doubtful accounts) (3.1) (2.5)
Accounts receivable, net of allowance for credit losses and allowance for doubtful accounts $ 3.6 $ 6.1
Variable consideration1
$ 62.0 $ 62.0
Prepaid rent 7.4 4.4
Other deferred revenue 2.5 2.4
Deferred revenue $ 71.9 $ 68.8
1 Variable consideration deferred as of the end of the periods related to amounts received in the sale of agricultural land on Maui in 2018 that, under revenue recognition guidance, could not be included in the transaction price.


	March 31, 2024		December 31, 2023
Accounts receivable	$	6,218	$	7,421
Allowances (credit losses and doubtful accounts)	(2,503)		(2,888)
Accounts receivable, net of allowance for credit losses and allowance for doubtful accounts	$	3,715	$	4,533

Variable consideration1	$	62,000	$	62,000
Prepaid rent	7,067		4,985
Other deferred revenue	3,393		3,368
Deferred revenue	$	72,460	$	70,353

1 Variable consideration deferred as of the end of the periods related to amounts received in the sale of agricultural land on Maui in 2018 that, under revenue recognition guidance, could not be included in the transaction price.

For the three ~~and nine~~ months ended ~~September 30, 2023,~~March 31, 2024, the Company did not recognize any revenue related to the Company's variable consideration and other deferred revenue reported as of December 31, ~~2022.~~2023.

~~10.~~

9. Leases - The Company as a Lessor

The Company leases real estate property to tenants under operating leases. Such activity is primarily composed of operating leases within its CRE segment.

The historical cost of, and accumulated depreciation on, leased property as of ~~September 30, 2023,~~March 31, 2024, and December 31, ~~2022,~~2023, were as follows (in ~~millions)~~thousands):


			September 30, 2023		December 31, 2022
		March 31, 2024						March 31, 2024	December 31, 2023
Leased property - real estate	Leased property - real estate		$	1,597.4	$	1,572.0
Less: accumulated depreciation	Less: accumulated depreciation		(222.6)		(201.8)
Property under operating leases - net			$	1,374.8	$	1,370.2
Property under operating leases - net1
1Property under operating leases as of March 31, 2024, and December 31, 2023, includes leased property included in Assets held for sale.							1Property under operating leases as of March 31, 2024, and December 31, 2023, includes leased property included in Assets held for sale.

Total rental income (i.e., revenue) under these operating leases during the three ~~and nine~~ months ended ~~September 30,~~March 31, 2024 and 2023, ~~and 2022,~~ relating to lease payments and variable lease payments were as follows (in ~~millions)~~thousands):


		Three Months Ended September 30,				Nine Months Ended September 30,
		2023		2022		2023		2022
		Three Months Ended March 31,
		Three Months Ended March 31,
		Three Months Ended March 31,
		2024
		2024
		2024
Lease payments
Lease payments
Lease payments	Lease payments	$	33.4	$	32.8	$	100.6	$	96.6
Variable lease payments	Variable lease payments	15.3		14.2		46.3		44.4
Variable lease payments
Variable lease payments
Revenues deemed uncollectible, net
Revenues deemed uncollectible, net
Revenues deemed uncollectible, net	Revenues deemed uncollectible, net	(0.3)		(0.2)		(0.8)		0.5
Total rental income	Total rental income	$	48.4	$	46.8	$	146.1	$	141.5
Total rental income
Total rental income

Contractual future lease payments to be received on non-cancelable operating leases as of ~~September 30, 2023,~~March 31, 2024, were as follows (in ~~millions)~~thousands):

September 30, 2023
2023 $ 32.8
2024 126.6
2025 110.5
2026 96.8
2027 85.1
2028 70.9
Thereafter 552.3
Total future lease payments to be received $ 1,075.0


	March 31, 2024
2024	97,815
2025	120,052
2026	106,642
2027	94,345
2028	79,135
2029	62,174
Thereafter	509,979
Total future lease payments to be received	$	1,070,142

~~11.~~10. Leases - The Company as a Lessee

There have been no material changes from the Company's leasing activities as a lessee described in Note 13 to the consolidated financial statements included in Item 8 of the Company's ~~2022~~2023 Form 10-K. The following table provides information about the Company's operating lease costs and finance lease costs recognized during the three ~~and nine~~ months ended ~~September 30,~~March 31, 2024 and 2023, ~~and 2022,~~ (in ~~millions)~~thousands):


		Three Months Ended September 30,				Nine Months Ended September 30,
		2023		2022		2023		2022
		Three Months Ended March 31,
		Three Months Ended March 31,
		Three Months Ended March 31,
		2024
		2024
		2024
Operating lease cost
Operating lease cost
Operating lease cost	Operating lease cost	$	0.4	$	0.7	$	1.5	$	2.0
Finance lease cost:	Finance lease cost:
Finance lease cost:
Finance lease cost:
Amortization of right-of-use assets
Amortization of right-of-use assets
Amortization of right-of-use assets	Amortization of right-of-use assets	—		—		0.1		—
Interest on lease liabilities	Interest on lease liabilities	0.1		—		0.1		—
Total lease cost		$	0.5	$	0.7	$	1.7	$	2.0
Interest on lease liabilities
Interest on lease liabilities
Total lease cost - operating and finance leases
Total lease cost - operating and finance leases
Total lease cost - operating and finance leases

~~12.~~

11. Share-based Payment Awards

The 2022 Incentive Compensation Plan ("2022 Plan") allows for the granting of stock options, stock appreciation rights, stock awards, restricted stock units, dividend equivalent rights, and other awards. The shares of common stock authorized to be issued under the 2022 Plan are to be drawn from the shares of the Company's authorized but unissued common stock or from shares of its common stock that the Company acquired, including shares purchased on the open market or private transactions.

During the ~~nine~~three months ended ~~September 30, 2023,~~March 31, 2024, the Company granted approximately ~~403,400~~310,100 of restricted stock unit awards with a weighted average grant date fair value of ~~$21.82.~~$17.91. During the ~~nine~~three months ended ~~September 30, 2022,~~March 31, 2023, the Company granted approximately ~~306,300~~310,200 of restricted stock unit awards with a weighted average grant date fair value of ~~$25.56.~~$22.36.

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

~~2023 Grants~~

~~2022 Grants~~

~~Volatility of A&B common stock~~

~~31.8% - 49.1%~~

~~47.7%~~

~~Average volatility of peer companies~~

~~33.6% - 48.2%~~

~~49.5%~~

~~Risk-free interest rate~~

~~3.8% - 4.5%~~

~~1.4%~~


	2024 Grants	2023 Grants
Volatility of A&B common stock	27.4%	49.1%
Average volatility of peer companies	29.9%	48.2%
Risk-free interest rate	4.0%	3.8%

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

Three Months Ended September 30, Nine Months Ended September 30,
2023 2022 2023 2022
Share-based expense:
Time-based and market-based restricted stock units $ 1.0 $ 1.6 $ 5.3 $ 4.6

~~13. Employee Benefit Plans~~

During 2022, the Company completed the termination of its funded single-employer defined benefit pension plans that covered certain non-bargaining unit employees and bargaining unit employees of the Company and transferred the life insurance benefits for retirees as of June 30, 2022, to an insurance company. The Company continues to maintain its plans that provide retiree health care and the remaining life insurance benefits to certain salaried and hourly employees.

~~Components of the net periodic benefit cost for the Company's pension and post-retirement plans for the three and nine months ended September 30, 2023 and 2022, are shown below (in millions):~~

Three Months Ended September 30, Nine Months Ended September 30,
2023 2022 2023 2022
Service cost $ 0.1 $ 0.1 $ 0.1 $ 1.5
Interest cost 0.1 — 0.4 0.9
Expected return on plan assets — — — (2.5)
Amortization of net loss — 0.1 — 1.9
Amortization of prior service credit — — — 0.1
Pension termination — — — 76.9
Net periodic benefit cost $ 0.2 $ 0.2 $ 0.5 $ 78.8


	Three Months Ended March 31,
	2024		2023
Share-based expense:
Time-based and market-based restricted stock units	$	1,126	$	1,576

~~14.~~12. Income Taxes

The Company has been organized and operates in a manner that enables it to qualify, and management believes it will continue to qualify, as a REIT for federal income tax purposes. The Company’s effective tax rate for the nine months ended September 30, 2023, differed from the effective tax rate for the same period in 2022 primarily due to the tax benefit recognized in 2022 on the termination of the Company's defined benefit pension plans.

As of ~~September 30, 2023,~~March 31, 2024, tax years ~~2019~~2020 and later are open to audit by the tax authorities. ~~The Company~~Management believes the result of any potential audits will not have a material adverse effect on its results of operations, financial condition, or liquidity.

~~15.~~13. Earnings Per Share ("EPS")

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

1918

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


		Three Months Ended September 30,				Nine Months Ended September 30,
		2023		2022		2023		2022
		Three Months Ended March 31,
		Three Months Ended March 31,
		Three Months Ended March 31,
		2024
		2024
		2024
Income (loss) from continuing operations
Income (loss) from continuing operations
Income (loss) from continuing operations	Income (loss) from continuing operations	$	12.0	$	5.8	$	32.3	$	20.9

Distributions and allocations to participating securities	Distributions and allocations to participating securities	—		(0.1)		(0.1)		(0.2)

Distributions and allocations to participating securities

Distributions and allocations to participating securities
Income (loss) from continuing operations available to A&B shareholders
Income (loss) from continuing operations available to A&B shareholders
Income (loss) from continuing operations available to A&B shareholders	Income (loss) from continuing operations available to A&B shareholders	12.0		5.7		32.2		20.7
Income (loss) from discontinued operations	Income (loss) from discontinued operations	3.9		1.0		3.9		1.3
Income (loss) from discontinued operations
Income (loss) from discontinued operations
Exclude: Loss (income) attributable to discontinued noncontrolling interest
Exclude: Loss (income) attributable to discontinued noncontrolling interest
Exclude: Loss (income) attributable to discontinued noncontrolling interest	Exclude: Loss (income) attributable to discontinued noncontrolling interest	(1.3)		(0.4)		(2.9)		(1.2)
Net income (loss) available to A&B common shareholders	Net income (loss) available to A&B common shareholders	$	14.6	$	6.3	$	33.2	$	20.8
Net income (loss) available to A&B common shareholders
Net income (loss) available to A&B common shareholders

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


		Three Months Ended September 30,		Nine Months Ended September 30,
		2023	2022	2023	2022
		Three Months Ended March 31,
		Three Months Ended March 31,
		Three Months Ended March 31,
		2024
		2024
		2024
Denominator for basic EPS - weighted average shares outstanding
Denominator for basic EPS - weighted average shares outstanding
Denominator for basic EPS - weighted average shares outstanding	Denominator for basic EPS - weighted average shares outstanding	72.6	72.7	72.6	72.7
Effect of dilutive securities:	Effect of dilutive securities:
Effect of dilutive securities:
Effect of dilutive securities:
Restricted stock unit awards
Restricted stock unit awards
Restricted stock unit awards	Restricted stock unit awards	0.2	0.1	0.2	0.1

Denominator for diluted EPS - weighted average shares outstanding	Denominator for diluted EPS - weighted average shares outstanding	72.8	72.8	72.8	72.8

Denominator for diluted EPS - weighted average shares outstanding

Denominator for diluted EPS - weighted average shares outstanding

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

Three Months Ended September 30, Nine Months Ended September 30,
2023 2022 2023 2022
Number of anti-dilutive securities 0.1 0.1 0.1 0.1


	Three Months Ended March 31,
	2024	2023
Number of anti-dilutive securities	100	38

~~16.~~14. Accumulated Other Comprehensive Income (Loss)

For the ~~nine~~three months ended ~~September 30, 2023,~~March 31, 2024, other comprehensive income (loss) principally includes unrealized interest rate hedging gains and losses and associated reclassification adjustments to interest expense. The components of Accumulated other comprehensive income (loss), net of taxes, were as follows as of ~~September 30, 2023~~March 31, 2024, and December 31, ~~2022,~~2023, (in ~~millions)~~thousands):


			September 30, 2023		December 31, 2022
		March 31, 2024					March 31, 2024	December 31, 2023
Post-retirement plans	Post-retirement plans		$	(0.3)	$	(0.3)
Non-qualified benefit plans
Interest rate swap	Interest rate swap		8.9		2.1
Accumulated other comprehensive income (loss)	Accumulated other comprehensive income (loss)		$	8.6	$	1.8

2019

The changes in Accumulated other comprehensive income (loss) by component for the ~~nine~~three months ended ~~September 30, 2023,~~March 31, 2024, were as follows (in ~~millions,~~thousands, net of taxes):


			Employee Benefit Plans		Interest Rate Swap		Total
Balance, January 1, 2023			$	(0.3)	$	2.1	$	1.8
		Employee Benefit Plans							Employee Benefit Plans	Interest Rate Swap	Total
Balance, January 1, 2024
Other comprehensive income (loss) before reclassifications, net of taxes of $0	Other comprehensive income (loss) before reclassifications, net of taxes of $0		—		8.0		8.0
Amounts reclassified from accumulated other comprehensive income (loss)1	Amounts reclassified from accumulated other comprehensive income (loss)1		—		(1.2)		(1.2)

Other comprehensive income (loss), net of taxes	Other comprehensive income (loss), net of taxes		—		6.8		6.8
Balance, September 30, 2023			$	(0.3)	$	8.9	$	8.6
Other comprehensive income (loss), net of taxes
Other comprehensive income (loss), net of taxes
Balance, March 31, 2024

1 Amounts reclassified from Accumulated other comprehensive income (loss) related to interest rate swap settlements are presented as an adjustment to Interest expense in the Condensed Consolidated Statements of Operations. Amounts reclassified from Accumulated other comprehensive income (loss) related to employee benefit plan items are presented as part of Interest and other income (expense), net in the Condensed Consolidated Statements of Operations.

~~17.~~15. Segment Results

Operating segments are components of an enterprise that engage in business activities from which it may earn revenues and incur expenses, whose operating results are regularly reviewed by the chief operating decision maker (its Chief Executive Officer) to make decisions about resources to be allocated to the segment and assess its performance, and for which discrete financial information is available. The Company operates and reports on two segments: Commercial Real Estate and Land Operations.

Reportable segment information for the three ~~and nine~~ months ended ~~September 30,~~March 31, 2024 and 2023, ~~and 2022,~~ is summarized below (in ~~millions)~~thousands):

Three Months Ended September 30, Nine Months Ended September 30,
2023 2022 2023 2022
Operating Revenue:
Commercial Real Estate $ 48.2 $ 46.5 $ 145.6 $ 138.8
Land Operations 4.3 2.9 10.4 20.9
Total operating revenue 52.5 49.4 156.0 159.7
Operating Profit (Loss):
Commercial Real Estate1
20.6 20.3 64.2 60.3
Land Operations2,3
2.9 (1.3) 4.5 (7.1)
Total operating profit (loss)2
23.5 19.0 68.7 53.2
Interest expense (6.1) (5.4) (17.0) (16.7)
Corporate and other expense4
(5.4) (7.8) (19.4) (33.7)
Income (Loss) from Continuing Operations Before Income Taxes $ 12.0 $ 5.8 $ 32.3 $ 2.8
1 Commercial Real Estate segment operating profit (loss) includes intersegment operating revenue, primarily from the Land Operations segment that is eliminated in consolidation as well as pension termination charges of $0.7 million for the nine months ended September 30, 2022, related to the 2022 termination of the defined benefit plans.
2 In December 2022, the Grace Disposal Group met the classification as held for sale and discontinued operations, and the Company changed the composition of its reportable segments based on how the chief operating decision maker assesses the performance of the Company's continuing operations. This caused reported amounts (i.e., operating profit and segment operating profit) in the historical period to be reclassified from the former M&C segment to the Land Operations segment or discontinued operations. All comparable information for the historical periods has been retrospectively adjusted to reflect the impact of these changes, resulting in changes to Land Operations Operating Profit (Loss) and Total operating profit (loss) of $0.9 million and $(0.9) million, respectively, for the three months ended September 30, 2022, and $2.9 million and $(1.5) million, respectively, for the nine months ended September 30, 2022.
3 For the three and nine months ended September 30, 2022, Land Operations segment operating profit (loss) included equity in earnings (losses) from the Company's various joint ventures of $0.8 million and $2.3 million, respectively, as well as pension termination charges of $62.2 million related to the 2022 termination of the defined benefit plans and a gain on the sale of non-core assets, net, of $54.0 million for the nine months ended September 30, 2022. For the three and nine months ended September 30, 2023, Land Operations segment operating profit (loss) includes $1.0 million and $1.9 million of equity in earnings (losses) from the Company's various joint ventures, as well as a gain on sale of non-core assets, net, of $1.1 million for the nine months ended September 30, 2023, related to the sale of the Company's legacy trucking and storage business.
4 Corporate and other expense includes pension termination charges of $14.0 million for the nine months ended September 30, 2022, related to the 2022 termination of the defined benefit plans.


	Three Months Ended March 31,
	2024		2023
Operating Revenue:
Commercial Real Estate	$	48,888	$	47,870
Land Operations	12,314		2,520
Total operating revenue	61,202		50,390
Operating Profit (Loss):
Commercial Real Estate1	21,981		20,877
Land Operations	7,931		(92)
Total operating profit (loss)	29,912		20,785

Interest expense	(5,510)		(5,041)
Corporate and other expense	(4,164)		(6,233)
Income (Loss) from Continuing Operations Before Income Taxes	$	20,238	$	9,511

1 Commercial Real Estate segment operating profit (loss) includes intersegment operating revenue, primarily from the Land Operations segment that is eliminated in the consolidated results of operations.

~~18.~~16. Held for Sale and Discontinued Operations

~~Assets~~In November 2023, the Company entered into a disposition agreement with an unrelated third party for the sale of Waipouli Town Center, a retail property within the Commercial Real Estate segment. The transaction is structured to qualify under section §1031 of the Internal Revenue Code of 1986, as amended (the "Code"). In order to allow time for the Company to identify suitable replacement property, the Company has up to one year from the agreement execution date to close the transaction, at its option. The Company determined that the property met the criteria to be classified as held for sale as of the agreement execution date of November 15, 2023, but would not be considered discontinued operations as it neither represents a strategic shift, nor will it have a material impact on the Company's operations and ~~liabilities~~financial results. Assets associated with ~~the Grace Disposal Group~~Waipouli Town Center are presented in the Condensed Consolidated Balance Sheets as Assets held for sale as of March 31, 2024, and December 31, 2023. Liabilities associated with assets held for sale are presented in Accrued and other liabilities, ~~respectively,~~as of March 31, 2024, and December 31, 2023.

Income (loss) from discontinued operations for the three months ended March 31, 2023, primarily relates to Grace Pacific and the ~~results of operations are presented as~~Company-owned quarry land on Maui (collectively, the “Grace Disposal Group”), which was sold in November 2023. Income (loss) from discontinued operations infor the ~~Condensed Consolidated Statements of Operations and Cash Flows. While~~three months ended March 31, 2024, relates to the ultimate outcome of the plan to dispose of the Grace Disposal Group is neither certain nor guaranteed, the Company intends to conduct the respective businesses in the ordinary course in substantially the same manner in which it previously has been conducted until a sale occurs.Company's former sugar operations.

The following table summarizes income (loss) from discontinued operations included in the Condensed Consolidated Statements of Operations for the three ~~and nine~~ months ended ~~September 30,~~March 31, 2024 and 2023, ~~and 2022,~~ (in ~~millions)~~thousands):


		Three Months Ended March 31,
		Three Months Ended March 31,
		Three Months Ended March 31,
		2024
		2024
		2024
		Three Months Ended September 30,				Nine Months Ended September 30,
Revenue
		2023		2022		2023		2022
Revenue

Revenue	Revenue	$	59.9	$	48.1	$	169.6	$	124.5
Cost of sales1	Cost of sales1	(51.4)		(43.6)		(149.7)		(112.3)
Cost of sales1
Cost of sales1
Selling, general and administrative
Selling, general and administrative
Selling, general and administrative	Selling, general and administrative	(4.2)		(3.2)		(14.1)		(10.9)

Gain (loss) on disposal of non-core assets, net

Gain (loss) on disposal of non-core assets, net

Gain (loss) on disposal of non-core assets, net
Operating income (loss) from discontinued operations1	Operating income (loss) from discontinued operations1	4.3		1.3		5.8		1.3
Operating income (loss) from discontinued operations1
Operating income (loss) from discontinued operations1
Income (loss) related to joint ventures
Income (loss) related to joint ventures
Income (loss) related to joint ventures	Income (loss) related to joint ventures	(0.3)		(0.4)		(1.5)		(0.5)

Interest and other income (expense), net	Interest and other income (expense), net	—		0.2		0.1		0.6

Interest and other income (expense), net

Interest and other income (expense), net
Interest expense
Interest expense
Interest expense	Interest expense	(0.1)		(0.1)		(0.5)		(0.1)
Income (loss) from discontinued operations before income taxes1	Income (loss) from discontinued operations before income taxes1	3.9		1.0		3.9		1.3
Income (loss) from discontinued operations before income taxes1
Income (loss) from discontinued operations before income taxes1
Income tax benefit (expense) attributable to discontinued operations
Income tax benefit (expense) attributable to discontinued operations
Income tax benefit (expense) attributable to discontinued operations	Income tax benefit (expense) attributable to discontinued operations	—		—		—		—
Income (loss) from discontinued operations1	Income (loss) from discontinued operations1	3.9		1.0		3.9		1.3
Income (loss) from discontinued operations1
Income (loss) from discontinued operations1
Loss (income) attributable to discontinued noncontrolling interest
Loss (income) attributable to discontinued noncontrolling interest
Loss (income) attributable to discontinued noncontrolling interest	Loss (income) attributable to discontinued noncontrolling interest	(1.3)		(0.4)		(2.9)		(1.2)
Income (loss) from discontinued operations attributable to A&B Shareholders1	Income (loss) from discontinued operations attributable to A&B Shareholders1	$	2.6	$	0.6	$	1.0	$	0.1
1Includes $(0.1) million and $(0.1) million in costs associated with the resolution of liabilities from the Company’s former sugar operations for the three months ended September 30, 2023 and 2022, respectively, and zero and $(0.2) million for the nine months ended September 30, 2023 and 2022, respectively
Income (loss) from discontinued operations attributable to A&B Shareholders1
Income (loss) from discontinued operations attributable to A&B Shareholders1
1For both of the three month periods ended March 31, 2024 and March 31, 2023, the Company recognized $0.1 million in income due to the favorable resolution of liabilities related to the Company’s former sugar operations.
1For both of the three month periods ended March 31, 2024 and March 31, 2023, the Company recognized $0.1 million in income due to the favorable resolution of liabilities related to the Company’s former sugar operations.
1For both of the three month periods ended March 31, 2024 and March 31, 2023, the Company recognized $0.1 million in income due to the favorable resolution of liabilities related to the Company’s former sugar operations.

The following table presents information related to the major classes of assets and liabilities that were classified as held for sale ~~included~~ in the Condensed Consolidated Balance Sheets as of ~~September 30,~~March 31, 2024 and December 31, 2023, ~~and 2022, were as follows~~ (in ~~millions)~~thousands):

September 30, 2023 December 31, 2022
Cash and cash equivalents $ 3.4 $ 0.1
Accounts receivable and retention, net of allowance for credit losses and allowance for doubtful accounts of $4.3 million and $0.4 million as of September 30, 2023 and December 31, 2022, respectively 37.5 30.8
Inventories 31.0 45.0
Other property, net 69.2 67.4
Operating lease right-of-use assets 29.7 31.3
Prepaid expenses and other assets 63.7 42.0
Less: Impairment recognized on classification as held for sale (89.8) (89.8)
Total Assets held for sale $ 144.7 $ 126.8
Notes payable and other debt $ 4.7 $ 14.1
Accounts payable 10.1 10.2
Operating lease liabilities 29.8 31.3
Accrued and other liabilities 26.7 25.4
Total Liabilities associated with assets held for sale $ 71.3 $ 81.0


	March 31, 2024		December 31, 2023

Real estate investments
Real estate property	$	17,556	$	17,556
Accumulated depreciation	(1,817)		(1,817)
Real estate property, net	15,739		15,739
Real estate intangible assets, net	307		307
Real estate investments, net	16,046		16,046







Prepaid expenses and other assets	141		121
Less: Impairment recognized on classification as held for sale	(2,183)		(2,183)
Total Assets held for sale	$	14,004	$	13,984





Accrued and other liabilities	55		55
Total Liabilities associated with assets held for sale1	$	55	$	55
1Liabilities associated with assets held for sale is presented in Accrued and other liabilities on the Condensed Consolidated Balance Sheets for all periods presented.

During the ~~nine~~three months ended ~~September 30, 2023,~~March 31, 2024, the Company recorded no additional fair value ~~adjustments~~adjustment related to assets and liabilities held for sale.

Related Party Transactions within Discontinued Operations and Held for Sale: ~~The~~Related to the Grace Disposal Group, the Company ~~enters~~entered into contracts in the ordinary course of business, as a supplier, with affiliate entities that ~~require~~required accounting under the equity method due to the Company's financial interests in such entities and also with affiliate parties that are members in entities in which the Company also iswas a member and ~~holds~~held a controlling financial interest. ~~Related to~~For the ~~periods~~three months ended March 31, 2023, during which such relationships existed, revenues earned and expenses recognized from transactions with ~~such~~ affiliates were ~~$5.1~~$3.9 million and ~~$9.0~~$1.4 million, respectively. Due to the sale of the Grace Disposal Group in November 2023, these relationships no longer exist and consequently, for the three months ended ~~September 30, 2023 and 2022, respectively, and $13.2 million and $12.9 million for the nine months ended September 30, 2023 and 2022, respectively. Expenses~~March 31, 2024, there were no revenues earned or expenses recognized from transactions with such affiliates.

17. Subsequent Events

On April 15, 2024, the Company entered into an agreement (the "Prudential Agreement") with PGIM, Inc. and its affiliates ~~were $0.9~~("Prudential") for an unsecured note purchase and private shelf facility that enables the Company to issue notes in an aggregate amount up to $300.0 million, less the sum of all principal amounts then outstanding on any notes issued by the Company or any of its subsidiaries to Prudential and ~~$1.6~~the amounts of any notes that are committed under the Prudential Agreement for a period of three years from execution of the agreement. In addition, on April 15, 2024, the Company issued a $60.0 million ~~for~~note (the "Series M Note") under its Prudential Agreement. The Series M Note has a coupon rate of 6.09%, paid semiannually, and matures in full on April 15, 2032.

On April 23, 2024, the three months ended September 30, 2023 and 2022, respectively, and $4.4 million and $4.0 million for the nine months ended September 30, 2023 and 2022, respectively. Receivables from these affiliates were $1.3 million and $6.9 millionCompany's Board of Directors declared a cash dividend of $0.2225 per share on outstanding common stock, payable on July 8, 2024, to shareholders of record as of ~~September 30, 2023 and December 31, 2022, respectively. Amounts due to these affiliates were $0.2 million and $0.4 million as~~the close of ~~September 30, 2023 and December 31, 2022, respectively.~~business on June 14, 2024.

2322

ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The following analysis of the consolidated financial condition and results of operations of Alexander & Baldwin, Inc. ("A&B" or the "Company") and its subsidiaries should be read in conjunction with the condensed consolidated financial statements and related notes thereto included in Item 1 of this Form 10-Q and the Company's Annual Report on Form 10-K for the year ended December 31, ~~2022,~~2023, ("~~2022~~2023 Form 10-K") filed with the U.S. Securities and Exchange Commission ("SEC").

Throughout this quarterly report on Form 10-Q, references to "we," "our," "us" and "our Company" refer to Alexander & Baldwin, Inc., together with its consolidated subsidiaries.

Forward-Looking Statements

Statements in this Form 10-Q that are not historical facts are forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 and involve a number of risks and uncertainties that could cause actual results to differ materially from those contemplated by the relevant forward-looking statements. These forward-looking statements include, but are not limited to, statements regarding possible or assumed future results of operations, business strategies, growth opportunities and competitive positions. Such forward-looking statements speak only as of the date the statements were made and are not guarantees of future performance. Forward-looking statements are subject to a number of risks, uncertainties, assumptions and other factors that could cause actual results and the timing of certain events to differ materially from those expressed in or implied by the forward-looking statements. These factors include, but are not limited to, prevailing market conditions and other factors related to the Company's REIT status and the Company's business, the evaluation of alternatives by the Company related to its non-core assets and business, and the risk factors discussed in the Company's most recent Form 10-K, Form 10-Q and other filings with the SEC. The information in this Form 10-Q should be evaluated in light of these important risk factors. We do not undertake any obligation to update the Company's forward-looking statements.

Introduction and Objective

Management's Discussion and Analysis of Financial Condition and Results of Operations ("MD&A") provides additional material information about the Company's business, recent developments and financial condition; its results of operations at a consolidated and segment level; its liquidity and capital resources including an evaluation of the amounts and certainty of cash flows from operations and from outside sources; and how certain accounting principles, policies and estimates affect its financial statements. MD&A is organized as follows:

•Business Overview: This section provides a general description of the Company's business, as well as recent developments that management believes are important in understanding its results of operations and financial condition or in understanding anticipated future trends.

•Consolidated Results of Operations: This section provides an analysis of the Company's consolidated results of operations for the three ~~and nine~~ months ended ~~September 30, 2023,~~March 31, 2024, as compared to the corresponding period of the preceding fiscal year.

•Analysis of Operating Revenue and Profit by Segment: This section provides an analysis of the Company's results of operations by business segment for the three ~~and nine~~ months ended ~~September 30, 2023,~~March 31, 2024, as compared to the corresponding period of the preceding fiscal year.

•Use of Non-GAAP Financial Measures: This section provides a discussion of the Company's non-GAAP financial measures included in this report and presents quantitative reconciliations between the non-GAAP financial measures and the most directly comparable financial measures calculated and presented in accordance with U.S. GAAP. It also describes why ~~the Company~~management believes that presentation of the non-GAAP financial measure provides useful information to investors regarding the Company's financial condition and results of operations and, to the extent material, describes additional purposes for which the Company uses the non-GAAP financial measures.

•Liquidity and Capital Resources: This section provides a discussion of any material changes in the Company's liquidity, financial condition and cash flows, including a discussion of any material changes in the Company's ability to fund its future commitments and ongoing operating activities in the short-term (i.e., over the next twelve months from the most recent fiscal period end) and in the long-term (i.e., beyond the next twelve months) through internal and external sources of capital, as compared to the end of preceding fiscal year ended December 31, ~~2022.~~2023. It includes an evaluation of the amounts and certainty of cash flows from operations and from outside sources.

2423

•Other Matters: This section identifies and summarizes other matters to be discussed in Item 2 of this report including any changes in the significant judgments or critical accounting estimates on the part of management in preparing the Company's consolidated financial statements that may materially impact the Company's reported results of operations and financial condition from the end of the preceding fiscal year ended December 31, ~~2022,~~2023, the potential impact of recently issued accounting pronouncements and other miscellaneous matters as needed.

Amounts in the MD&A are rounded to the nearest ~~tenth of a million.~~thousand. Accordingly, a recalculation of totals and percentages, if based on the reported data, may be slightly different.

Business Overview

Reportable segments

The Company operates two segments: Commercial Real Estate and Land Operations. A description of each of the Company's reporting segments is as follows:

•Commercial Real Estate ("CRE") - This segment functions as a vertically integrated real estate investment company with core competencies in property management and in-house leasing (i.e., executing new and renegotiating renewal lease arrangements, managing its properties' day-to-day operations and maintaining positive tenant relationships); investments and acquisitions (i.e., identifying opportunities and acquiring properties); and construction and development (i.e., designing and ground-up development of new properties or repositioning and redevelopment of existing properties); and in-house leasing and property management (i.e., executing new and renegotiating renewal lease arrangements, managing its properties' day-to-day operations and maintaining positive tenant relationships). The Company's preferred asset classes include improved properties in retail and industrial spaces, and also urban ground leases. Its focus within improved retail properties, in particular, is on grocery-anchored neighborhood shopping centers that meet the daily needs of Hawai‘i communities. Through its core competencies and with its experience and relationships in Hawai‘i, the Company seeks to create special places that enhance the lives of Hawai‘i residents and to provide venues and opportunities that enable its tenants to thrive. Income from this segment is principally generated by owning, operating, and leasing real estate assets.

•Land Operations - This segment includes the Company's legacy landholdings, assets, and liabilities that are subject to the Company's simplification and monetization effort. Financial results from this segment are principally derived from real estate development and land sales, and joint ~~ventures, and other legacy business activities.~~venture activity.

Simplification strategy

As a REIT focused on Hawai‘i commercial real estate, the Company has pursued the monetization and disposition of legacy, non-core assets and landholdings in order to simplify its business and allocate its capital resources to commercial real estate.

In ~~December 2022,~~November 2023, the Company completed the sale of its interests in ~~connection with the evaluation of strategic alternatives to monetize and dispose of~~ Grace Pacific, a materials and ~~the~~construction company, and Company-owned quarry land on Maui ~~Quarries~~ (collectively, the ~~“Grace~~"Grace Disposal ~~Group”~~Group"), marking the last major step in the Company's ~~Board of Directors authorized Management to complete a sale of the Grace Disposal Group. In conjunction with the Board's authorization, the Company concluded~~simplification efforts that ~~the Grace Disposal Group met the criteria for classification as held for sale and discontinued operations as of December 31, 2022.~~began in 2016. The ~~assets and liabilities~~financial results associated with the Grace Disposal Group are classified as ~~held for sale in the condensed consolidated balance sheets, and its financial results are classified as~~ discontinued operations in the ~~condensed~~ consolidated statements of operations and cash flows for ~~all periods presented and~~ the Company’s former Materials and Construction ("M&C") segment has been eliminated. In conjunction with the elimination of the M&C segment, the Company's equity interest in an unconsolidated materials company was incorporated withthree months ended March 31, 2023. Related to the Land Operations ~~reportable segment.~~

~~The outcome of~~segment, during the three months ended March 31, 2024, the Company completed the sale of the Grace Disposal Group is not certain, as any transaction would be dependent upon various external factors beyond the Company's control, including, among others, market conditions, industry trends, interestapproximately 330 acres of ~~third parties,~~land holdings on Maui and the availability of financing to potential buyer(s) on reasonable terms. Further, there can be no assurance that any potential transaction will result in the Company being able to recover the carrying value of the Grace Disposal Group.

Kauai for $9.6 million.

2524

Consolidated Results of Operations

The following analysis of the consolidated financial condition and results of operations of the Company and its subsidiaries should be read in conjunction with the condensed consolidated financial statements and related notes thereto.

Financial results - ~~Third~~First quarter of ~~2023~~2024 compared with ~~2022~~2023


(amounts in millions, except percentage data and per share data; unaudited)			Three Months Ended September 30,				2023 vs 2022
			2023		2022		$		%
(amounts in thousands, except percentage and per share data; unaudited)											(amounts in thousands, except percentage and per share data; unaudited)			Three Months Ended March 31,													2024 vs 2023
														2024								2023								$							%
Operating revenue	Operating revenue		$	52.5	$	49.4	$	3.1	6.3	%	Operating revenue			$	61,202		$					$	50,390		$					$	10,812		21.5					21.5		%
Cost of operations	Cost of operations		(27.3)		(29.2)		1.9		6.5	%	Cost of operations			(30,203)			(28,534)						(28,534)			(1,669)						(1,669)			(5.8)					(5.8)		%
Selling, general and administrative	Selling, general and administrative		(7.6)		(9.6)		2.0		20.8	%	Selling, general and administrative			(7,239)			(8,729)						(8,729)			1,490						1,490			17.1					17.1		%
Impairment of assets			(0.6)		—		(0.6)		NM

Gain (loss) on disposal of non-core assets, net
Gain (loss) on disposal of non-core assets, net
Gain (loss) on disposal of non-core assets, net														23								1,117								(1,094)							(97.9)		%
Operating income (loss)	Operating income (loss)		17.0		10.6		6.4		60.4	%	Operating income (loss)			23,783			14,244						14,244			9,539						9,539			67.0					67.0		%
Income (loss) related to joint ventures	Income (loss) related to joint ventures		1.0		0.8		0.2		25.0	%	Income (loss) related to joint ventures			698			388						388			310						310			79.9					79.9		%

Interest and other income (expense), net	Interest and other income (expense), net		0.1		(0.2)		0.3		NM

Interest and other income (expense), net

Interest and other income (expense), net														1,267								(80)								1,347							NM
Interest expense	Interest expense		(6.1)		(5.4)		(0.7)		(13.0)	%	Interest expense			(5,510)			(5,041)						(5,041)			(469)						(469)			(9.3)					(9.3)		%

Income tax benefit (expense)											Income tax benefit (expense)			—								(5)								5							100.0		%
Income (loss) from continuing operations	Income (loss) from continuing operations		12.0		5.8		6.2		106.9	%	Income (loss) from continuing operations			20,238			9,506						9,506			10,732						10,732			112.9					112.9		%
Discontinued operations (net of income taxes)			3.9		1.0		2.9		3X
Income (loss) from discontinued operations (net of income taxes)											Income (loss) from discontinued operations (net of income taxes)			(256)								(4,198)								3,942							93.9		%
Net income (loss)	Net income (loss)		15.9		6.8		9.1		133.8	%	Net income (loss)			19,982			5,308						5,308			14,674						14,674			3X						3X
(Income) loss attributable to discontinued noncontrolling interest	(Income) loss attributable to discontinued noncontrolling interest		(1.3)		(0.4)		(0.9)		2X		(Income) loss attributable to discontinued noncontrolling interest			—			28						28			(28)						(28)			(100.0)					(100.0)		%
Net income (loss) attributable to A&B	Net income (loss) attributable to A&B		$	14.6	$	6.4	$	8.2	128.1	%	Net income (loss) attributable to A&B			$	19,982		$					$	5,336		$					$	14,646		3X						3X

Basic Earnings (Loss) Per Share of Common Stock:	Basic Earnings (Loss) Per Share of Common Stock:
Basic Earnings (Loss) Per Share of Common Stock:
Basic Earnings (Loss) Per Share of Common Stock:
Basic earnings (loss) per share - continuing operations
Basic earnings (loss) per share - continuing operations
Basic earnings (loss) per share - continuing operations	Basic earnings (loss) per share - continuing operations		$	0.16	$	0.08	$	0.08	100.0	%		$	0.28			$				$	0.13			$				$	0.15			115.4				115.4		%
Basic earnings (loss) per share - discontinued operations	Basic earnings (loss) per share - discontinued operations		0.04		0.01		0.03		3X		Basic earnings (loss) per share - discontinued operations			—			(0.06)						(0.06)			0.06						0.06			100.0					100.0		%
			$	0.20	$	0.09	$	0.11	122.2	%
		$																$	0.28							$	0.07							$	0.21							3X
Diluted Earnings (Loss) Per Share of Common Stock:	Diluted Earnings (Loss) Per Share of Common Stock:
Diluted earnings (loss) per share - continuing operations	Diluted earnings (loss) per share - continuing operations		$	0.16	$	0.08	$	0.08	100.0	%
Diluted earnings (loss) per share - continuing operations
Diluted earnings (loss) per share - continuing operations														$	0.28							$	0.13							$	0.15						115.4		%
Diluted earnings (loss) per share - discontinued operations	Diluted earnings (loss) per share - discontinued operations		0.04		0.01		0.03		3X		Diluted earnings (loss) per share - discontinued operations			—			(0.06)						(0.06)			0.06						0.06			100.0					100.0		%
		$																$	0.28							$	0.07							$	0.21							3X
			$	0.20	$	0.09	$	0.11	122.2	%

Continuing operations available to A&B common shareholders
Continuing operations available to A&B common shareholders
Continuing operations available to A&B common shareholders	Continuing operations available to A&B common shareholders		$	12.0	$	5.7	$	6.3	110.5	%		$	20,230			$				$	9,476			$				$	10,754			113.5				113.5		%
Discontinued operations available to A&B common shareholders	Discontinued operations available to A&B common shareholders		2.6		0.6		2.0		3X		Discontinued operations available to A&B common shareholders			(256)			(4,170)						(4,170)			3,914						3,914			93.9					93.9		%
Net income (loss) available to A&B common shareholders	Net income (loss) available to A&B common shareholders		$	14.6	$	6.3	$	8.3	131.7	%	Net income (loss) available to A&B common shareholders			$	19,974		$					$	5,306		$					$	14,668		3X						3X

Funds From Operations ("FFO")1	Funds From Operations ("FFO")1		$	21.1	$	14.7	$	6.4	43.5	%
Core FFO1			$	21.8	$	18.7	$	3.1	16.6	%

Funds From Operations ("FFO")1

Funds From Operations ("FFO")1														$	29,205							$	18,568							$	10,637						57.3		%
Adjusted FFO1											Adjusted FFO1			$	25,530							$	16,012							$	9,518						59.4		%

FFO per diluted share	FFO per diluted share		$	0.29	$	0.20	$	0.09	45.0	%
Core FFO per diluted share			$	0.30	$	0.26	$	0.04	15.4	%
Weighted average diluted shares outstanding (FFO/Core FFO)2			72.8		72.8
FFO per diluted share
FFO per diluted share														$	0.40							$	0.26							$	0.14						53.8		%
Weighted average diluted shares outstanding (FFO/Adjusted FFO)2
											1 For definitions of capitalized terms and a discussion of management's use of a non-GAAP financial measure and the required reconciliation of non-GAAP measures to GAAP measures, refer to page 35.																				2 May differ from figure used in the consolidated statements of operations based on differing dilutive effects for net income (loss) versus FFO/Core FFO.
1 For definitions of capitalized terms and a discussion of management's use of a non-GAAP financial measure and the required reconciliation of non-GAAP measures to GAAP measures, refer to page 30.

1 For definitions of capitalized terms and a discussion of management's use of a non-GAAP financial measure and the required reconciliation of non-GAAP measures to GAAP measures, refer to page 30.

1 For definitions of capitalized terms and a discussion of management's use of a non-GAAP financial measure and the required reconciliation of non-GAAP measures to GAAP measures, refer to page 30.
2 May differ from figure used in the consolidated statements of operations based on differing dilutive effects for net income (loss) versus FFO/Adjusted FFO.											2 May differ from figure used in the consolidated statements of operations based on differing dilutive effects for net income (loss) versus FFO/Adjusted FFO.

The causes of material changes in the condensed consolidated statements of operations for the three months ended ~~September 30, 2023,~~March 31, 2024, as compared to the three months ended ~~September 30, 2022,~~March 31, 2023, are described below or in the Analysis of Operating Revenue and Profit by Segment sections below.

Operating revenue during the ~~third~~first quarter ended ~~September 30, 2023,~~March 31, 2024, increased ~~6.3%~~21.5%, or ~~$3.1~~$10.8 million, to ~~$52.5~~$61.2 million, due primarily to higher revenues from the ~~Commercial Real Estate operating segment from higher rental income~~Land Operations segment's unimproved and other land sales, as well as the sale of two development parcels at Maui Business Park in the first quarter of 2024.

2625

recoveries, and higher revenues from the Land Operations operating segment from unimproved land sales, which was partially offset by lower revenue from the Company's legacy trucking and storage business that was sold in the first quarter of 2023.

Cost of operations during the ~~third~~first quarter ended ~~September 30, 2023, decreased 6.5%~~March 31, 2024, increased 5.8%, or ~~$1.9~~$1.7 million, to ~~$27.3~~$30.2 million, due primarily to ~~lower costs incurred by~~ the Land Operations ~~operating segment from the Company's legacy trucking~~segment's higher cost of sales associated with unimproved and ~~storage business that was sold in the first quarter of 2023.~~other land sales and Maui Business Park development parcel sales.

Selling, general and administrative during the ~~third~~first quarter ended ~~September 30, 2023,~~March 31, 2024, decreased ~~20.8%~~17.1%, or ~~$2.0~~$1.5 million, to ~~$7.6~~$7.2 million, due primarily to lower personnel-related expenses.

~~Impairment~~Gain (loss) on disposal of non-core assets, net of ~~$0.6~~$1.1 million during the ~~third~~first quarter ended ~~September 30,~~March 31, 2023, ~~related~~was due primarily to ~~abandonment~~the sale of ~~potential CRE development projects.~~the Company's ownership interest in a legacy trucking and storage business on Maui in 2023.

Income (loss) related to joint ventures during the ~~third~~first quarter ended ~~September 30, 2023,~~March 31, 2024, increased ~~25.0%~~79.9%, or ~~$0.2~~$0.3 million, to ~~$1.0~~$0.7 million due primarily to higher earnings from the Company's unconsolidated investment in a materials company.

~~Income (loss)~~Interest and other income (expense), net of$1.3 million for three months ended March 31, 2024, was due primarily to a gain on the fair value adjustment for two forward interest rate swaps, partially offset by a one-time financing charge.

Interest expense during the first quarter ended March 31, 2024, increased 9.3%, or $0.5 million, to $5.5 million due to higher borrowings and higher interest rate on variable rate debt.

Loss from discontinued operations (net of income taxes) during the ~~third~~first quarter ended ~~September 30, 2023, increased $2.9~~March 31, 2024, of $0.3 million relates to ~~$3.9 million due primarily to higher volumes from Grace Pacific's asphalt and paving operations and liquid asphalt sales product mix.~~

~~Financial results - First Nine Months of 2023 compared with 2022~~

(amounts in millions, except percentage data and per share data; unaudited) Nine Months Ended September 30, 2023 vs 2022
2023 2022 $ %
Operating revenue $ 156.0 $ 159.7 $ (3.7) (2.3) %
Cost of operations (82.9) (92.0) 9.1 9.9 %
Selling, general and administrative (26.2) (27.7) 1.5 5.4 %
Impairment of assets (0.6) — (0.6) — %
Gain (loss) on disposal of non-core assets, net 1.1 54.0 (52.9) (98.0) %
Operating income (loss) 47.4 94.0 (46.6) (49.6) %
Income (loss) related to joint ventures 1.9 2.3 (0.4) (17.4) %
Pension termination — (76.9) 76.9 100.0 %
Interest and other income (expense), net — 0.1 (0.1) (100.0) %
Interest expense (17.0) (16.7) (0.3) (1.8) %
Income tax benefit (expense) — 18.1 (18.1) (100.0) %
Income (loss) from continuing operations 32.3 20.9 11.4 54.5 %
Discontinued operations (net of income taxes) 3.9 1.3 2.6 200.0 %
Net income (loss) 36.2 22.2 14.0 63.1 %
(Income) loss attributable to discontinued noncontrolling interest (2.9) (1.2) (1.7) (141.7) %
Net income (loss) attributable to A&B $ 33.3 $ 21.0 $ 12.3 58.6 %
Basic Earnings (Loss) Per Share of Common Stock:
Basic earnings (loss) per share - continuing operations $ 0.44 $ 0.29 $ 0.15 51.7 %
Basic earnings (loss) per share - discontinued operations 0.02 — 0.02 — %
$ 0.46 $ 0.29 $ 0.17 58.6 %
Diluted Earnings (Loss) Per Share of Common Stock:
Diluted earnings (loss) per share - continuing operations $ 0.44 $ 0.29 $ 0.15 51.7 %
Diluted earnings (loss) per share - discontinued operations 0.02 — 0.02 — %
$ 0.46 $ 0.29 $ 0.17 58.6 %
Continuing operations available to A&B common shareholders $ 32.2 $ 20.7 $ 11.5 55.6 %
Discontinued operations available to A&B common shareholders 1.0 0.1 0.9 9X
Net income (loss) available to A&B common shareholders $ 33.2 $ 20.8 $ 12.4 59.6 %
Funds From Operations ("FFO")1
$ 59.5 $ 48.1 $ 11.4 23.7 %
Core FFO1
$ 64.3 $ 60.0 $ 4.3 7.2 %
FFO per diluted share $ 0.82 $ 0.66 $ 0.16 24.2 %
Core FFO per diluted share $ 0.88 $ 0.82 $ 0.06 7.3 %
Weighted average diluted shares outstanding (FFO/Core FFO)2
72.8 72.8
1 For definitions of capitalized terms and a discussion of management's use of a non-GAAP financial measure and the required reconciliation of non-GAAP measures to GAAP measures, refer to page 35.
2 May differ from figure used in the consolidated statements of operations based on differing dilutive effects for net income (loss) versus FFO/Core FFO.

~~The causes of material changes in the condensed consolidated statements of operations~~cessation expenses for the ~~nine months ended September 30, 2023, as compared~~Company's former sugar operations which primarily relates to ~~the nine months ended September 30, 2022, are described below or in the Analysis~~resolution of ~~Operating Revenue and Profit by Segment sections below.~~

~~Operating revenue~~ for the nine months ended September 30, 2023, decreased 2.3%, or $3.7 million, to $156.0 million, primarily due to lower revenue from the Land Operations segment from the sales of legacy business activities in the second

~~quarter of 2022 and first quarter of 2023, partially offset by higher revenues from the Commercial Real Estate segment from higher rental income and recoveries.~~

~~Cost of operations~~ for the nine months ended September 30, 2023, decreased 9.9% or $9.1 million, to $82.9 million, primarily due to a decrease in costs incurred by the Land Operations segment from legacy business activities that were sold in the second quarter of 2022 and first quarter of 2023, and lower development property sales.

~~Selling, general and administrative~~cessation-related liabilities. ~~for the nine months ended September 30, 2023, decreased 5.4%, or $1.5 million, to $26.2 million, due primarily to higher pension service expense and personnel-related costs in the prior year period.~~

~~Impairment of assets~~ ~~of $0.6 million for the nine months ended September 30, 2023, related to abandonment of potential CRE development projects.~~

~~Gain (loss) on disposal of assets, net~~ of $1.1 million for the nine months ended September 30, 2023, was primarily due to the sale of the Company's ownership interest in a legacy trucking and storage business on Maui. Gain (loss) on disposal of assets, net of $54.0 million for the nine months ended September 30, 2022, was due to the sale of approximately 18,900 acres of primarily agricultural and conservation land on the island of Kauai and 100% of the Company's ownership interest in McBryde Resources, Inc., the operator of hydroelectric power facilities on Kauai.

~~Income (loss) related to joint ventures~~ ~~for the nine months ended September 30, 2023, decreased 17.4%, or $0.4 million, to $1.9 million, due primarily to lower earnings from the Company's unconsolidated investment in a materials company.~~

~~Pension termination~~ loss of $76.9 million for the nine months ended September 30, 2022, resulted from the termination of the Defined Benefit Plans in 2022 and represents the acceleration of deferred charges previously included within accumulated other comprehensive loss and the impact of remeasuring the plan assets and obligations at termination.

~~Income tax benefit (expense)~~ ~~of $18.1 million for the nine months ended September 30, 2022, was due primarily to the termination of the Company’s Defined Benefit Plans.~~

~~Income (loss)~~Loss from discontinued operations (net of income taxes) ~~for~~during the ~~nine months~~first quarter ended ~~September 30,~~March 31, 2023, ~~increased $2.6~~of $4.2 million primarily relates to ~~$3.9 million due to higher volumes from~~operations of the Grace ~~Pacific's asphalt and paving operations and liquid asphalt sales product mix.~~Disposal Group, which was sold in November 2023.

2926

Analysis of Operating Revenue and Profit by Segment

The following analysis should be read in conjunction with the condensed consolidated financial statements and related notes thereto.

Commercial Real Estate

Financial results - ~~Third~~First quarter of ~~2023~~2024 compared with ~~2022~~2023

Results of operations for the ~~third~~first quarter ended ~~September 30,~~March 31, 2024 and 2023, ~~and 2022,~~ were as follows:


(amounts in millions, except percentage data and acres; unaudited)		Three Months Ended September 30,				2023 vs 2022
		2023		2022		$		%1
(amounts in thousands, except percentage data and acres; unaudited)										(amounts in thousands, except percentage data and acres; unaudited)			Three Months Ended March 31,												2024 vs 2023
													2024						2023									$						%
Commercial Real Estate operating revenue	Commercial Real Estate operating revenue	$	48.2	$	46.5	$	1.7	3.7	%	Commercial Real Estate operating revenue			$	48,888		$			$	47,870			$					$	1,018		2.1				2.1		%
Commercial Real Estate operating costs and expenses	Commercial Real Estate operating costs and expenses	(25.1)		(25.0)		(0.1)		(0.4)	%	Commercial Real Estate operating costs and expenses			(25,416)			(24,948)				(24,948)				(468)						(468)		(1.9)					(1.9)	%
Selling, general and administrative	Selling, general and administrative	(1.7)		(1.8)		0.1		5.6	%	Selling, general and administrative			(1,556)			(2,066)				(2,066)				510						510		24.7					24.7	%
Intersegment operating revenue, net1										Intersegment operating revenue, net1			6						23									(17)						(73.9)		%

Impairment of real estate assets		(0.6)		—		(0.6)		—	%

Interest and other income (expense), net

Interest and other income (expense), net

Interest and other income (expense), net	Interest and other income (expense), net	(0.2)		0.6		(0.8)		NM			59				(2)			(2)				61						61			NM					NM
Commercial Real Estate operating profit (loss)	Commercial Real Estate operating profit (loss)	$	20.6	$	20.3	$	0.3	1.5	%	Commercial Real Estate operating profit (loss)			$	21,981		$			$	20,877			$					$	1,104		5.3				5.3		%

Net Operating Income ("NOI")2	Net Operating Income ("NOI")2	$	31.0	$	29.0	$	2.0	6.9	%
Net Operating Income ("NOI")2
Net Operating Income ("NOI")2													$	31,764					$	30,427								$	1,337					4.4		%

Same-Store Net Operating Income ("Same-Store NOI")2
Same-Store Net Operating Income ("Same-Store NOI")2
Same-Store Net Operating Income ("Same-Store NOI")2	Same-Store Net Operating Income ("Same-Store NOI")2	$	30.8	$	29.0	$	1.8	6.3	%		$	31,547			$		$	30,313			$					$	1,234			4.1			4.1		%
Gross leasable area ("GLA") in square feet ("SF") for improved properties at end of period	Gross leasable area ("GLA") in square feet ("SF") for improved properties at end of period	3.9		3.9		—		—	%	Gross leasable area ("GLA") in square feet ("SF") for improved properties at end of period			3,932			3,905				3,905				27						27		1					1	%
										1 Amounts in this table are rounded to the nearest tenth of a million, but percentages were calculated based on thousands. Accordingly, a recalculation of some percentages, if based on the reported data, may be slightly different.																					2 For a discussion of management's use of non-GAAP financial measures and the required reconciliation of non-GAAP measures to GAAP measures, refer to page 35.
1 Intersegment operating revenue, net for Commercial Real Estate is primarily from the Land Operations segment and is eliminated in the consolidated results of operations.
1 Intersegment operating revenue, net for Commercial Real Estate is primarily from the Land Operations segment and is eliminated in the consolidated results of operations.
1 Intersegment operating revenue, net for Commercial Real Estate is primarily from the Land Operations segment and is eliminated in the consolidated results of operations.
2 For a discussion of management's use of non-GAAP financial measures and the required reconciliation of non-GAAP measures to GAAP measures, refer to page 30.										2 For a discussion of management's use of non-GAAP financial measures and the required reconciliation of non-GAAP measures to GAAP measures, refer to page 30.

Commercial Real Estate operating revenue increased ~~3.7%~~2.1% or ~~$1.7~~$1.0 million, to ~~$48.2~~$48.9 million for the ~~third~~first quarter ended ~~September 30, 2023,~~March 31, 2024, as compared to the ~~third~~first quarter ended ~~September 30, 2022.~~March 31, 2023. Operating profit increased ~~1.5%~~5.3%, or ~~$0.3~~$1.1 million, to ~~$20.6~~$22.0 million for the ~~third~~first quarter ended ~~September 30, 2023,~~March 31, 2024, as compared to the ~~third~~first quarter ended ~~September 30, 2022.~~March 31, 2023. The increase in operating revenue and operating profit from the prior year period was due primarily to higher rental revenue and ~~recoveries from tenants. Impairment of real estate assets of $0.6 million for the three months ended September 30, 2023, related to abandonment of potential CRE development projects.~~

~~Financial results - First Nine Months of 2023 compared with 2022~~

~~Operating results for the nine months ended September 30, 2023, as compared to the nine months ended September 30, 2022, were as follows:~~

Nine Months Ended September 30, 2023 vs 2022
(amounts in millions, except percentage data; unaudited) 2023 2022 $
%1
Commercial Real Estate operating revenue $ 145.6 $ 138.8 $ 6.8 4.9 %
Commercial Real Estate operating costs and expenses (75.1) (73.2) (1.9) (2.6) %
Selling, general and administrative (5.6) (5.2) (0.4) (7.7) %
Intersegment operating revenue, net2
— 0.2 (0.2) (100.0) %
Impairment of real estate assets (0.6) — (0.6) — %
Pension termination — (0.7) 0.7 100.0 %
Interest and other income (expense), net (0.1) 0.4 (0.5) NM
Commercial Real Estate operating profit (loss) $ 64.2 $ 60.3 $ 3.9 6.5 %
Net Operating Income ("NOI")3
$ 92.7 $ 88.6 $ 4.1 4.7 %
Same-Store Net Operating Income ("Same-Store NOI")3
$ 92.4 $ 88.5 $ 3.9 4.3 %
1 Amounts in this table are rounded to the nearest tenth of a million, but percentages were calculated based on thousands. Accordingly, a recalculation of some percentages, if based on the reported data, may be slightly different.
2 Intersegment operating revenue, net for Commercial Real Estate is primarily from the Land Operations segment and is eliminated in the consolidated results of operations.
3 For a discussion of management's use of a non-GAAP financial measure and the required reconciliation of non-GAAP measures to GAAP measures, refer to page 35.

Commercial Real Estate operating revenue increased 4.9% or $6.8 million, to $145.6 million for the nine months ended September 30, 2023, as compared to the nine months ended September 30, 2022. Operating profit increased 6.5%, or $3.9 million, to $64.2 million for the nine months ended September 30, 2023, as compared to the nine months ended September 30, 2022. The increase in operating revenue and operating profit from the prior year was primarily driven by higher rental revenue and recoveries from tenants, partially offset by higherlower net bad debt expense. Operating costs and expenses for the nine months ended September 30, 2023, increased by $1.9 million due primarily to higher property operating costs. Impairment of real estate assets of $0.6 million for the nine months ended September 30, 2023, related to abandonment of potential CRE development projects.

Commercial Real Estate portfolio additions, transfers, and dispositions

During the three ~~and nine~~ months ended ~~September 30, 2023,~~March 31, 2024, the ~~Company's acquisitions~~Company had no additions, transfers, or dispositions of commercial real estate ~~properties were as follows (dollars in millions):~~

Acquisitions
Property Location Date
(Month/Year) Purchase Price GLA (SF)
Kaomi Loop Industrial Oahu, HI 05/2023 $9.5 33,200

~~During the three and nine months ended September 30, 2023, there were no dispositions of CRE improved properties or ground lease interests in land.~~properties.

Leasing activity

During the ~~third~~first quarter ended ~~September 30, 2023,~~March 31, 2024, the Company signed 2412 new leases and 3832 renewal leases for its improved properties across its retail, industrial, and office asset classes, covering ~~149,900~~212,000 square feet of GLA. The 2412 new leases consist of ~~42,400~~27,800 square feet with an average annual base rent of ~~$25.65~~$27.10 per-square-foot. Of the 2412 new leases, 98 leases with a total GLA of ~~17,500~~21,200 square feet were considered comparable (i.e., renewals, for the same units, or new leases executed for units that have been vacated in the previous 12 months for comparable space and comparable lease terms) and, for these 98 leases, resulted in an ~~5.5%~~11.8% average base rent increase over comparable expiring leases. The 3832 renewal leases consist of ~~107,500~~184,200 square feet with an average annual base rent of ~~$27.98~~$24.69 per square foot. Of the 3832 renewal leases, 2826 leases with a total GLA of ~~56,700~~103,200 square feet were considered comparable and resulted in an ~~12.3%~~7.2% average base rent increase over comparable expiring leases. The Company signed ~~two~~no new ground lease renewals during the ~~third~~first quarter ended ~~September 30, 2023, of which one was considered comparable and resulted in a 27.6% base rent increase over the comparable expiring lease.~~March 31, 2024.

Leasing activity summarized by asset class for the three ~~and nine~~ months ended ~~September 30, 2023,~~March 31, 2024, were as follows:

Three Months Ended September 30, 2023 Nine Months Ended September 30, 2023
Leases GLA (SF)
ABR2,4/SF
Rent Spread3
Leases GLA (SF)
ABR2,4/SF
Rent Spread3
Retail 42 71,053 $41.44 13.8% 119 265,203 $40.43 8.0%
Industrial 18 77,176 $14.51 4.1% 56 232,331 $16.01 7.1%
Office 2 1,710 $18.60 —% 8 11,771 $31.07 3.8%
Subtotal - Improved 62 149,939 $27.32 11.2% 183 509,305 $29.07 7.6%
Ground 2
N/A1
$0.3 27.6% 6
N/A1
$5.0 37.8%
1 Not applicable for ground leases as such leases would not be comparable from a GLA (SF) perspective
2Annualized Base Rent ("ABR") is the current month's contractual base rent multiplied by 12. Base rent is presented without consideration of percentage rent that may, in some cases, be significant.
3 Rent spread is calculated for comparable leases, a subset of the total population of leases for the period presented (described above).
4 Current ABR, in millions, is presented for ground leases


	Three Months Ended March 31, 2024
	Leases	GLA (SF)	ABR2,4/SF		Rent Spread3
Retail	33	74,912	$	41.82	9.1	%
Industrial	11	137,088	$	15.82	4.6	%
Office	—	—	N/A		N/A
Subtotal - Improved properties	44	212,000	$	25.01	7.8	%
Ground	—	N/A1	N/A		N/A
1 Not applicable for ground leases as such leases would not be comparable from a GLA (SF) perspective
2Annualized Base Rent ("ABR") is the current month's contractual base rent multiplied by 12. Base rent is presented without consideration of percentage rent that may, in some cases, be significant.
3 Rent spread is calculated for comparable leases, a subset of the total population of leases for the period presented (described above).
4 Current ABR, in millions, is presented for ground leases

Occupancy

The Company reports three types of occupancy: "Leased Occupancy," "Physical Occupancy," and "Economic Occupancy."

The Leased Occupancy percentage calculates the square footage leased (i.e., the space has been committed to by a lessee under a signed lease agreement) as a percentage of total available improved property square footage as of the end of the period reported.

The Physical Occupancy percentage calculates the square footage leased and commenced (i.e., measured when the lessee has physical access to the space) as a percentage of total available improved property space at the end of the period reported.

The Economic Occupancy percentage calculates the square footage under leases for which the lessee is contractually obligated to make lease-related payments (i.e., subsequent to the rent commencement date) to total available improved property square footage as of the end of the period reported.


	As of	As of	Basis Points
	March 31, 2024	March 31, 2023
Leased Occupancy	94.0%	93.9%	10
Physical Occupancy	93.5%	93.3%	20
Economic Occupancy	92.3%	92.4%	(10)

~~The Company's improved portfolio occupancy metrics as of September 30, 2023 and 2022, were as follows:~~

As of As of Basis Point Change
September 30, 2023 September 30, 2022
Leased Occupancy 94.6% 94.6% —
Physical Occupancy 93.9% 93.8% 10
Economic Occupancy 92.9% 93.1% (20)

For further context, the Company's Leased Occupancy and Economic Occupancy metrics for its improved portfolio summarized by asset class – and the corresponding occupancy metrics for a category of properties that were owned and operated for the entirety of the prior calendar year and current period, to date ("Same-Store" as more fully described below) – as of ~~September 30,~~March 31, 2024 and 2023, ~~and 2022,~~ were as follows:


Leased Occupancy	Leased Occupancy					Leased Occupancy
			As of	As of	Basis Point Change
			September 30, 2023	September 30, 2022
		As of							As of		As of		Basis Points
		March 31, 2024
Retail
Retail
Retail	Retail		94.0%	93.3%	70		93.2%		93.6%		(40)
Industrial	Industrial		96.8%	98.0%	(120)	Industrial		96.8%		95.2%		160
Office	Office		84.5%	89.1%	(460)	Office		83.9%		87.1%		(320)
Total Leased Occupancy	Total Leased Occupancy		94.6%	94.6%	—	Total Leased Occupancy		94.0%		93.9%		10


Economic Occupancy	Economic Occupancy					Economic Occupancy
			As of	As of	Basis Point Change
			September 30, 2023	September 30, 2022
		As of							As of		As of		Basis Point Change
		March 31, 2024
Retail
Retail
Retail	Retail		91.9%	91.3%	60		91.2%		91.7%		(50)
Industrial	Industrial		95.9%	97.6%	(170)	Industrial		95.7%		94.6%		110
Office	Office		83.5%	85.7%	(220)	Office		83.3%		86.5%		(320)
Total Economic Occupancy	Total Economic Occupancy		92.9%	93.1%	(20)	Total Economic Occupancy		92.3%		92.4%		(10)


Same-Store Leased Occupancy	Same-Store Leased Occupancy					Same-Store Leased Occupancy
			As of	As of	Basis Point Change
			September 30, 2023	September 30, 2022
		As of							As of		As of		Basis Point Change
		March 31, 2024
Retail
Retail
Retail	Retail		94.0%	93.3%	70		94.4%		94.9%		(50)
Industrial	Industrial		96.7%	98.0%	(130)	Industrial		96.8%		95.2%		160
Office	Office		84.5%	89.1%	(460)	Office		87.4%		91.0%		(360)
Total Same-Store Leased Occupancy	Total Same-Store Leased Occupancy		94.5%	94.6%	(10)	Total Same-Store Leased Occupancy		95.0%		94.8%		20


Same-Store Economic Occupancy	Same-Store Economic Occupancy					Same-Store Economic Occupancy
			As of	As of	Basis Point Change
			September 30, 2023	September 30, 2022
		As of							As of		As of		Basis Point Change
		March 31, 2024
Retail
Retail
Retail	Retail		91.9%	91.3%	60		92.4%		93.0%		(60)
Industrial	Industrial		95.8%	97.5%	(170)	Industrial		95.6%		94.6%		100
Office	Office		83.5%	85.7%	(220)	Office		86.7%		90.3%		(360)
Total Same-Store Economic Occupancy	Total Same-Store Economic Occupancy		92.8%	93.1%	(30)	Total Same-Store Economic Occupancy		93.3%		93.4%		(10)

Land Operations

Trends, events and uncertainties

The asset class mix of Land Operations segment real estate sales in any given period can be diverse and may include developable subdivision lots, undeveloped land, or property sold under threat of condemnation. Further, the timing of property or parcel sales can significantly affect operating results in a given period.

Operating profit reported in each period for the Land Operations segment does not necessarily follow a percentage of sales trend because the cost basis of property sold can differ significantly between transactions. For example, the sale of undeveloped land and vacant parcels in Hawai‘i may result in higher margins than the sale of developed property due to the low historical cost basis of the Company's legacy landholdings.

As a result, direct year-over-year comparison of the Land Operations segment results may not provide a consistent, measurable indicator of future performance. Further, Land Operations revenue trends, cash flows from the sales of real estate, and the amounts of real estate developments for sale on the Company's condensed consolidated balance sheet do not necessarily indicate future profitability trends for this segment.

Financial results - ~~Third~~First quarter of ~~2023~~2024 compared with ~~2022~~2023

Results of operations for the ~~third~~first quarter ended ~~September 30,~~March 31, 2024 and 2023, ~~and 2022,~~ were as follows:

Three Months Ended September 30,

(amounts in millions; unaudited)

2023

2022

Three Months Ended March 31,

(amounts in thousands; unaudited)

2024

2023

Development sales revenue

Unimproved/other property sales revenue

4.0

—

Other operating revenue1

0.3

2.9

Total Land Operations operating revenue

4.3

2.9

Land Operations operating costs and expenses

(2.2)

(4.2)

Selling, general and administrative

(0.5)

(0.6)

Gain (loss) on disposal of assets, net

Intersegment operating charges, net2

—

(0.1)

Earnings (loss) from joint ventures

1.0

0.8

Interest and other income (expense), net

0.3

(0.1)

Interest and other income (expense), net

Total Land Operations operating profit (loss)

2.9

(1.3)

1 Other operating revenue includes revenue related to licensing and leasing of non-core legacy agricultural lands during the periods ended 2023 and 2022. Other revenue also includes trucking during the period ended 2022.

1 Other operating revenue includes revenue related to licensing and leasing of non-core legacy agricultural lands during the three months ended March 31, 2024 and 2023. Other revenue also includes trucking and storage operations during the three months ended March 31, 2023.

2 Intersegment operating charges for Land Operations are primarily from the Commercial Real Estate segment and are eliminated in the consolidated results of operations.

~~Third~~First quarter of ~~2023:~~2024: Land Operations revenue of ~~$4.3~~$12.3 million during the ~~third~~first quarter ended ~~September 30, 2023,~~March 31, 2024, was primarily related to unimproved and other land sales on the ~~island~~islands of ~~Maui.~~Maui and Kauai, as well as sales of two development parcels at Maui Business Park.

Land Operations operating profit of ~~$2.9~~$7.9 million during the ~~third~~first quarter ended ~~September 30, 2023,~~March 31, 2024, was composed of the margins from unimproved and other and development land sales and equity ~~earnings in the Company's joint venture projects. Earnings from joint ventures of $1.0 million for the three months ended September 30, 2023, was primarily driven by the equity~~ in earnings primarily from the Company's unconsolidated investment in a materials company.

~~Third~~First quarter of ~~2022:~~2023: Operating revenue of ~~$2.9~~$2.5 million primarily consisted of revenue related to the Company's legacy business activities in the Land Operations segment (primarily trucking and storage services and licensing and leasing of non-core legacy land).

~~Segment operating loss~~, as well as the sale of $1.3 million during the third quarter ended September 30, 2022, was due primarily to costs related to the Company's non-core legacy land, partially offset by the margins from the operations of the segment's other legacy business activities and equity in earnings from the Company's unconsolidated investment in a materials company.

~~Financial Results - First Nine Months of 2023 compared with 2022~~

Nine Months Ended September 30,
(amounts in millions; unaudited) 2023 2022
Development sales revenue $ — $ 6.3
Unimproved/other property sales revenue 8.1 2.0
Other operating revenue1
2.3 12.6
Total Land Operations operating revenue 10.4 20.9
Land Operations operating costs and expenses (7.8) (18.8)
Selling, general and administrative (1.4) (3.0)
Gain (loss) on disposal of assets, net 1.1 54.0
Intersegment operating charges, net2
(0.1) (0.2)
Earnings (loss) from joint ventures 1.9 2.3
Pension termination — (62.2)
Interest and other income (expense), net 0.4 (0.1)
Total Land Operations operating profit (loss) $ 4.5 $ (7.1)
1 Other operating revenue includes revenue related to trucking and licensing and leasing of non-core legacy agricultural lands during the periods ended 2023 and 2022. Other revenue also includes renewable energy during the period ended 2022.
2 Intersegment operating charges primarily from CRE that are eliminated in the consolidated results of operations.

~~First Nine Months of 2023:~~ ~~Land Operations revenue during the nine months ended September 30, 2023, was $10.4 million and included revenue from~~an unimproved land ~~sales~~parcel on the ~~islands~~island of ~~Maui and Kauai and revenue from the Company's legacy business activities in the Land Operations segment (primarily trucking services and licensing and leasing of non-core legacy lands).~~Kauai.

Land Operations operating ~~profit~~loss of ~~$4.5~~$0.1 million during the ~~nine months~~first quarter ended ~~September 30,~~March 31, 2023, was composed of the margins resulting from ~~unimproved land sales, equity in earnings from~~ the ~~Company's unconsolidated investment in a materials company,~~real estate sale and legacy business activities noted above, the gain on disposal of the Company's ownership interest in a legacy trucking and storage business on Maui, ~~partially offset by costs related to the Company's non-core legacy land.~~

~~First Nine Months of 2022:~~ ~~Land Operations revenue was $20.9 million~~ and included the sales of development parcels at Maui Business Park and unimproved land on the islands of Maui and Kauai. Revenue also included other operating revenues related to the Company's legacy business activitiesequity in ~~the Land Operations segment (primarily licensing and leasing of non-core legacy lands, trucking services, and renewable energy).~~

~~Land Operations operating loss of $7.1 million during the nine months ended September 30, 2022, was composed of a gain on disposal of non-core assets, net of $54.0 million resulting~~earnings primarily from the completion of the sale of approximately 18,900 acres of primarily agricultural and conservation land on the island of Kauai and 100% of the Company's ownership interest in McBryde Resources, Inc., the operator of hydroelectric power facilities on Kauai and the margins resulting from the real estate sales activity noted above, profits generated from the operations of the segment's other legacy business activities. Additionally, the segment incurred a settlement charge of $62.2 million in connection with the termination of the Defined Benefit Plans. Earnings from joint ventures of $2.3 million during the nine months ended September 30, 2022, was primarily driven by the Company's unconsolidated investment in a materials ~~company.~~company, offset by the carrying costs of landholdings.

Use of Non-GAAP Financial Measures

The Company uses non-GAAP measures when evaluating operating performance because management believes that they provide additional insight into the Company's and segments' core operating results, and/or the underlying business trends affecting performance on a consistent and comparable basis from period to period. These measures generally are provided to investors as an additional means of evaluating the performance of ongoing core operations. The non-GAAP financial information presented herein should be considered supplemental to, and not as a substitute for or superior to, financial measures calculated in accordance with GAAP.

~~FFO~~Funds from Operations and Adjusted Funds From Operations

Funds from operations (“FFO”) is ~~presented by the Company as~~ a widely used supplemental non-GAAP financial measure of REITs' operating ~~performance for real estate companies.~~performance. FFO is computed in accordance with standards established by the National Association of Real Estate Investment Trusts ~~("Nareit"~~(“Nareit”) ~~defines FFO~~and is calculated as follows: net income (loss) available to A&B common shareholders (calculated in accordance with GAAP), excluding (1) depreciation and amortization related to real estate, (2) gains and losses from the sale of certain real estate assets, (3) gains and losses from change in control,

(4) impairment write-downs of certain real estate assets and investments in entities when the impairment is directly attributable to decreases in the value of depreciable real estate held by the entity, and (5) income (loss) from discontinued operations ~~that are incidental~~related to ~~CRE.~~legacy business operations.

~~The Company~~

Management believes that ~~subject to the following limitations,~~ FFO ~~provides~~serves as a supplemental measure to net income ~~(calculated~~calculated in accordance with ~~GAAP)~~GAAP for comparing its performance and operations to those of other ~~REITs.~~REITs because it excludes items included in net income that do not relate to or are not indicative of the Company’s operating and financial performance, such as depreciation and amortization related to real estate, which assumes that the value of real estate assets diminishes predictably over time instead of fluctuating with market conditions, and items that can make periodic or peer analysis more difficult, such as gains and losses from the sale of CRE properties, impairment losses related to CRE properties, and income (loss) from discontinued operations. Management believes that FFO ~~does~~more accurately provides an investor an indication of our ability to incur and service debt, make capital expenditures and fund other needs.

The Company has been executing a simplification strategy to focus on the growth and expansion of its commercial real estate portfolio in Hawai‘i by monetizing its legacy assets and operations. The sale of Grace Pacific, LLC and the Company-owned quarry land on Maui in 2023 marked the culmination of the Company’s simplification strategy. Although the Company has some remaining legacy assets that will continue to be monetized, investors and analysts now view the Company as a pure-play REIT. In order to enhance comparability to other REITs, the Company will provide an additional performance metric, Adjusted FFO, to further adjust FFO to exclude the effects of certain items not related to ongoing property operations. Management believes Adjusted FFO is a widely recognized measure of the property operations of REITs and may be more useful than FFO in evaluating the operating performance of the Company’s properties over the long term, as well as enabling investors and analysts to assess performance in comparison to other real estate companies

Adjusted FFO is an additional supplemental non-GAAP measure of REITs' operating performance. It is calculated by adjusting FFO to exclude share-based compensation, straight-line lease revenue and other non-cash adjustments, such as amortization of market lease adjustments, debt premium or discount and deferred financing cost amortization, maintenance capital expenditures, leasing commissions, and other non-comparable and non-operating items, including certain gains, losses, income, and expenses related to the Company’s legacy business operations and assets.

FFO and Adjusted FFO do not represent ~~an alternative~~alternatives to net income calculated in accordance with GAAP and should not be viewed as more prominent measures of performance than net income (loss) or cash flows from operations prepared in accordance with GAAP. In addition, FFO ~~does~~and Adjusted FFO do not represent ~~cash generated from operating activities in accordance with GAAP, nor does it represent cash available to pay distributions~~ and should not be considered ~~as an alternative~~alternatives to cash ~~flow~~generated from operating activities determined in accordance with GAAP, nor should they be used as measures of the Company’s liquidity, or cash available to fund the Company’s needs or pay distributions. FFO and Adjusted FFO should be considered only as supplements to net income as a measure of the Company’s ~~liquidity. The Company presents different forms of FFO:~~

•"Core FFO" represents a non-GAAP measure relevant to the operating performance of the Company's commercial real estate business (i.e., its core business). Core FFO is calculated by adjusting CRE operating profit to exclude items noted above (i.e., depreciation and amortization related to real estate included in CRE operating profit) and to make further adjustments to include expenses not included in CRE operating profit but that are necessary to accurately reflect the operating performance of its core business (i.e., corporate expenses and interest expense attributable to this core business) or to exclude items that are non-recurring, infrequent, unusual and unrelated to the core business operating performance (i.e., not likely to recur within two years or has not occurred within the prior two years). The Company believes such adjustments facilitate the comparable measurement of the Company's core operating performance over time. The Company believes that Core FFO, which is a supplemental non-GAAP financial measure, provides an additional and useful means to assess and compare the operating performance of REITs.

•FFO represents the Nareit-defined non-GAAP measure for the operating performance of the Company as a whole. The Company's calculation refers to net income (loss) available to A&B common shareholders as its starting point in the calculation of FFO.performance.

The Company presents both non-GAAP measures and reconciles ~~each~~FFO to the most directly-comparable GAAP measure, ~~as well as reconciling~~Net Income (Loss) available to A&B common shareholders, and FFO to ~~Core~~Adjusted FFO. The Company's FFO and ~~Core~~Adjusted FFO may not be comparable to ~~FFO non-GAAP measures~~such metrics reported by other ~~REITs. These other~~ REITs ~~may not define~~due to possible differences in the ~~term in accordance with~~interpretation of the current Nareit definition ~~or may interpret~~used by such REITs.

Reconciliations of net income (loss) available to A&B common shareholders to FFO and Adjusted FFO for the ~~current Nareit definition differently.~~three months ended March 31, 2024and 2023, are as follows (in thousands):


	Three Months Ended March 31,
	2024		2023
Net Income (Loss) available to A&B common shareholders	$	19,974	$	5,306
Depreciation and amortization of commercial real estate properties	8,975		9,092


(Income) loss from discontinued operations, net of income taxes	256		4,198
Income (loss) attributable to discontinued noncontrolling interest	—		(28)
FFO	$	29,205	$	18,568
Add (deduct) Adjusted FFO defined adjustments

(Gain)/loss on sale of legacy business	—		(1,117)
Non-cash changes to liabilities related to legacy operations1	—		350

Legacy joint venture (income)/loss2	(698)		(388)
(Gain)/loss on fair value adjustments related to interest rate swaps	(3,675)		—
Non-recurring financing charges	2,350		—
Amortization of share-based compensation	1,126		1,576
Maintenance capital expenditures3	(2,018)		(1,312)
Leasing commissions paid	(315)		(294)
Straight-line lease revenue	(592)		(1,335)
Amortization of net debt premiums or discounts and deferred financing costs	243		239
Amortization of above and below-market leases, net	(96)		(275)
Adjusted FFO	$	25,530	$	16,012

1 Primarily related to environmental reserves associated with legacy business activities in the Land Operations segment
2 Includes joint ventures engaged in legacy business activities within the Land Operations segment
3 Includes ongoing maintenance capital expenditures only

Net Operating Income and Same-Store Net Operating Income

NOI is a non-GAAP measure used internally in evaluating the unlevered performance of the Company's Commercial Real Estate portfolio. ~~The Company~~Management believes NOI provides useful information to investors regarding the Company's financial condition and results of operations because it reflects only the contract-based income and cash-based expense items that are incurred at the property level. When compared across periods, NOI can be used to determine trends in earnings of the Company's properties as this measure is not affected by non-contract-based revenue (e.g., straight-line lease adjustments required under GAAP); by non-cash expense recognition items (e.g., the impact of depreciation and amortization expense or impairments); or by other income, expenses, or gains, or losses that do not directly relate to the Company's ownership and operations of the properties (e.g., indirect selling, general, administrative and other expenses, as well as lease termination income). ~~The Company~~Management believes the exclusion of these items from operating profit (loss) is useful because the resulting measure captures the contract-based revenue that is realizable (i.e., assuming collectability is deemed probable) and the direct property-related expenses paid or payable in cash that are incurred in operating the Company's Commercial Real Estate portfolio, as well as trends in occupancy rates, rental rates and operating costs. NOI should not be viewed as a substitute for, or superior to, financial measures calculated in accordance with GAAP.

NOI represents total Commercial Real Estate contract-based operating revenue that is realizable (i.e., assuming collectability is deemed probable) less the direct property-related operating expenses paid or payable in cash. The calculation of NOI excludes the impact of depreciation and amortization (e.g., depreciation related to capitalized costs for improved properties, other capital expenditures for building/area improvements and tenant space improvements, as well as amortization of leasing commissions); straight-line lease adjustments (including amortization of lease incentives); amortization of favorable/unfavorable lease assets/liabilities; lease termination income; interest and other income (expense), net; selling, general, administrative and other expenses (not directly associated with the property); and impairment of commercial real estate assets.

The Company reports NOI and Occupancy on a Same-Store basis, which includes the results of properties that were owned, operated, and ~~operated~~stabilized for the entirety of the prior calendar year and current reporting period, year-to-date. The Same-Store

pool excludes properties under development, ~~or redevelopment~~ and ~~also excludes~~ properties acquired or sold during either of the comparable reporting periods. ~~New developments and redevelopments are moved into the~~The Same-Store pool ~~after one full calendar year~~may also exclude properties that are fully or partially taken out of ~~stabilized operation.~~service for the purpose of redevelopment or repositioning. Management ~~judgement~~judgment is involved in the classification of properties for exclusion from the same-store pool when they are no longer considered stabilized due to redevelopment or other factors. Properties are moved into the Same-Store pool after one full calendar year of stabilized operation.

~~The Company~~Management believes that reporting on a Same-Store basis provides investors with additional information regarding the operating performance of comparable assets separate from other factors (such as the effect of developments, redevelopments, acquisitions or dispositions).

To emphasize, the Company's methods of calculating non-GAAP measures may differ from methods employed by other companies and thus may not be comparable to such other companies.

~~Reconciliations of net income (loss) available to A&B common shareholders to FFO and Core FFO for the three and nine months ended September 30, 2023and 2022, are as follows (in millions):~~

Three Months Ended September 30, Nine Months Ended September 30,
2023 2022 2023 2022
Net Income (Loss) available to A&B common shareholders $ 14.6 $ 6.3 $ 33.2 $ 20.8
Depreciation and amortization of commercial real estate properties 9.1 9.0 27.3 27.4
(Income) loss from discontinued operations, net of income taxes (3.9) (1.0) (3.9) (1.3)
Income (loss) attributable to discontinued noncontrolling interest 1.3 0.4 2.9 1.2
FFO $ 21.1 $ 14.7 $ 59.5 $ 48.1
Exclude items not related to core business:
Land Operations operating (profit) loss (2.9) 1.3 (4.5) 7.1
Income tax expense (benefit) — — — (18.1)
Non-core business interest expense 3.0 2.7 8.7 8.2
Impairment losses - abandoned development costs 0.6 — 0.6 —
Pension termination - CRE and Corporate — — — 14.7
Core FFO $ 21.8 $ 18.7 $ 64.3 $ 60.0

~~Reconciliations of Core FFO starting from Commercial Real Estate operating profit (loss) for the three and nine months ended September 30, 2023 and 2022, are as follows (in millions):~~

Three Months Ended September 30, Nine Months Ended September 30,
2023 2022 2023 2022
Commercial Real Estate Operating Profit (Loss) $ 20.6 $ 20.3 $ 64.2 $ 60.3
Depreciation and amortization of commercial real estate properties 9.1 9.0 27.3 27.4
Corporate and other expense (5.4) (7.8) (19.4) (33.7)
Core business interest expense (3.1) (2.7) (8.3) (8.5)
Impairment losses - abandoned development costs 0.6 — 0.6 —
Distributions to participating securities — (0.1) (0.1) (0.2)
Pension termination - CRE and Corporate — — — 14.7
Core FFO $ 21.8 $ 18.7 $ 64.3 $ 60.0

Reconciliations of Commercial Real Estate operating profit to Commercial Real Estate NOI for the three ~~and nine~~ months ended ~~September 30,~~March 31, 2024 and 2023, ~~and 2022,~~ are as follows (in ~~millions)~~thousands):

Three Months Ended September 30, Nine Months Ended September 30,
2023 2022 2023 2022
CRE Operating Profit (Loss) $ 20.6 $ 20.3 $ 64.2 $ 60.3
Plus: Depreciation and amortization 9.1 9.0 27.3 27.4
Less: Straight-line lease adjustments (0.8) (1.2) (4.2) (3.7)
Less: Favorable/(unfavorable) lease amortization (0.3) (0.2) (0.8) (0.8)
Less: Termination income (0.1) (0.1) (0.1) (0.1)
Plus: Other (income)/expense, net 0.2 (0.6) 0.1 0.3
Plus: Impairment losses - abandoned development costs 0.6 — 0.6 —
Plus: Selling, general, administrative and other expenses 1.7 1.8 5.6 5.2
NOI 31.0 29.0 92.7 88.6
Less: NOI from acquisitions, dispositions, and other adjustments (0.2) — (0.3) (0.1)
Same-Store NOI $ 30.8 $ 29.0 $ 92.4 $ 88.5


	Three Months Ended March 31,
	2024		2023
CRE Operating Profit	$	21,981	$	20,877
Depreciation and amortization	8,975		9,092
Straight-line lease adjustments	(592)		(1,335)
Favorable/(unfavorable) lease amortization	(96)		(275)
Termination income	(1)		—
Other (income)/expense, net	(59)		2

Selling, general, administrative and other expenses	1,556		2,066
NOI	31,764		30,427
Less: NOI from acquisitions, dispositions, and other adjustments	(217)		(114)
Same-Store NOI	$	31,547	$	30,313

3833

Liquidity and Capital Resources

Overview

The Company's principal sources of liquidity to meet its business requirements and plans both in the short-term (i.e., the next twelve months from ~~September 30, 2023)~~March 31, 2024) and long-term (i.e., beyond the next twelve months) have generally been cash provided by operating activities; available cash and cash equivalents; and borrowing capacity under its credit facility. The Company's primary liquidity needs for its business requirements and plans have generally been supporting its known contractual obligations and also funding capital expenditures (including recent commercial real estate acquisitions and real estate developments); shareholder distributions; and working capital needs.

The Company's ability to retain outstanding borrowings and utilize remaining amounts available under its revolving credit facility will depend on its continued compliance with the applicable financial covenants and other terms of the Company's notes payable and other debt arrangements. The Company was in compliance with its financial covenants for all outstanding balances as of ~~September 30, 2023,~~March 31, 2024, and intends to operate in compliance with these covenants or seek to obtain waivers or modifications to these financial covenants to enable the Company to maintain compliance in the future. However, due to various uncertainties and factors outside of Management's control, the Company may be unable to continue to maintain compliance with certain of its financial covenants. Failure to maintain compliance with its financial covenants or obtain waivers or agree to modifications with its lenders would have a material adverse impact on the Company's financial condition.

As of ~~September 30, 2023,~~March 31, 2024, the Company had ~~$426.6~~$411.6 million of fixed rate debt (after the effects of interest rate swaps) and ~~$81.0~~$46.0 million of variable-rate debt with weighted average interest rates of 4.2% and 6.5%, respectively, including ~~$87.9~~$163.2 million that will become due in the next twelve months. Other than in default, the Company does not have an obligation, nor the option in some cases, to prepay its fixed-rate debt prior to maturity and, as a result, interest rate fluctuations and the resulting changes in fair value would have little impact on the Company’s financial condition or results of operations unless the Company was required to refinance such debt.

Based on its current outlook, the Company believes that funds generated from cash provided by operating activities; available cash and cash equivalent balances; ~~and~~ borrowing capacity under its credit ~~facility~~facility; and proceeds from debt financings will be sufficient to meet the needs of the Company's business requirements and plans both in the short-term (i.e., the next twelve months from ~~September 30, 2023)~~March 31, 2024) and long-term (i.e., beyond the next twelve months).

On April 15, 2024, the Company entered into an agreement (the "Prudential Agreement") with PGIM, Inc. and its affiliates ("Prudential") for an unsecured note purchase and private shelf facility that enables the Company to issue notes in an aggregate amount up to $300.0 million, less the sum of all principal amounts then outstanding on any notes issued by the Company or any of its subsidiaries to Prudential and the amounts of any notes that are committed under the Prudential Agreement for a period of three years from execution of the agreement. In addition, on April 15, 2024, the Company issued a $60.0 million note (the "Series M Note") under its Prudential Agreement. The Series M Note has a coupon rate of 6.09%, paid semiannually, and matures in full on April 15, 2032.

Known contractual obligations

A description of material contractual commitments is contained in the Notes to Consolidated Financial Statements included in Part II, Item 8 of the ~~2022~~2023 Form 10-K, and relates to the Company's Notes payable and other debt and Accrued ~~pension and~~ post-retirement benefits. In addition, a description of other material cash requirements, including capital expenditures, is provided in Management's Discussion and Analysis of Financial Condition and Results of Operations included in Part II, Item 7 of the ~~2022~~2023 Form 10-K, and includes contractual interest payments for Notes payable and other debt as well as amounts to be spent on contractual non-cancellable purchase obligations (that specifies all significant terms, including fixed or minimum quantities to be purchased, pricing structure and approximate timing of the transaction that are not recorded as liabilities in the consolidated balance sheet).

As of ~~September 30, 2023,~~March 31, 2024, there were no material changes in the Company's known contractual obligations from the end of the preceding fiscal year ended December 31, ~~2022.~~2023. Refer to Note 65 – Notes Payable and Other Debt ~~and Note 13 – Employee Benefit Plans~~ in this report for further discussion.

Further, a description of other commitments, contingencies and off-balance sheet arrangements is contained in the Notes to Consolidated Financial Statements included in Part II, Item 8 of the ~~2022~~2023 Form 10-K. As of ~~September 30, 2023,~~March 31, 2024, there have been no material changes in the Company's other commitments, contingencies and off-balance sheet arrangements from the end of the preceding fiscal year ended December 31, ~~2022.~~2023. Refer to Note 87 – Commitments and Contingencies in this report for further discussion.

Sources of liquidity

As noted above, one of the Company's principal sources of liquidity has been operating cash flows from continuing operations. For the ~~nine~~three months ended ~~September 30, 2023,~~March 31, 2024, operating cash flows from continuing operations of ~~$55.8~~$16.5 million was primarily driven by cash generated by the Commercial Real Estate segment (the Company's core business). The Company's operating cash flows from continuing operations for the ~~nine~~three months ended ~~September 30, 2023,~~March 31, 2024, represents an increase of ~~$25.2~~$3.8 million from ~~$30.6~~$12.7 million for the ~~nine~~three months ended ~~September 30, 2022,~~March 31, 2023, due primarily to ~~the~~higher cash ~~contributions of $29.9~~

~~million~~proceeds from unimproved land and development sales in 2024 as compared to ~~the Defined Benefit Plans made during 2022 in connection with the termination that did not recur in~~ 2023. Total cash flows in future periods may be subject to variation from the Land Operations segment due to the varying activity in completing sales on remaining non-core assets as part of the Company's continued execution on its simplification strategy and development property sales.

The Company's other primary sources of liquidity include its cash on-hand of ~~$11.8~~$15.7 million as of ~~September 30, 2023,~~March 31, 2024, and the Company's revolving credit and term facilities, which provide liquidity and flexibility on a short-term (i.e., the next twelve months from ~~September 30, 2023)~~March 31, 2024), as well as long-term basis. With respect to the $500.0 million A&B Revolver available for general A&B purposes, as of ~~September 30, 2023,~~March 31, 2024, the Company had ~~$81.0~~$46.0 million of borrowings outstanding, ~~$1.1 million~~no letters of credit issued against, and ~~$417.9~~$454.0 million of available capacity. This credit facility has a term through August 29, 2025, plus two six-month optional extensions.

On August 13, 2021, the Company entered into an at-the-market equity distribution agreement, or ATM Agreement, pursuant to which it may sell common stock up to an aggregate sales price of $150.0 million. Sales of common stock, if any, made pursuant to the ATM Agreement may be sold in negotiated transactions or transactions that are deemed to be “at the market” offerings, as defined in Rule 415 of the Securities Act of 1933, as amended. Actual sales will depend on a variety of factors including market conditions, the trading price of the Company's common stock, capital needs, and the Company's determination of the appropriate sources of funding to meet such needs. As of ~~September 30, 2023,~~March 31, 2024, the Company has not sold any shares under the at-the-market offering program, nor has any obligation to sell shares under the at-the-market offering program.

Other uses (or sources) of liquidity

The Company may use (or, in some periods, generate) cash through various investing activities or financing activities. Cash used in investing activities for continuing operations was ~~$20.0~~$3.7 million for the ~~nine~~three months ended ~~September 30, 2023,~~March 31, 2024, as compared to ~~$61.7~~$1.5 million ~~provided by investing activities~~ for the ~~nine~~three months ended ~~September 30, 2022.~~March 31, 2023. Cash used in investing activities for continuing operations during the ~~nine~~three months ended ~~September 30,~~March 31, 2024, was primarily driven by capital expenditures of $3.7 million. Net cash used in investing activities for continuing operations during the three months ended March 31, 2023, was primarily driven by capital expenditures of ~~$23.1~~$3.0 million, ~~including the acquisition of an industrial property on Oahu for $9.5 million and $13.6 million in capital expenditures for property, plant, and equipment. This was~~ partially offset by ~~$1.9 million of~~ cash proceeds from the sale of the Company's legacy trucking and storage business in the Land Operations segment. Net cash provided by investing activities for continuing operations during the nine months ended September 30, 2022, was primarily driven by the Company's the sale of approximately 18,900 acres of primarily agricultural and conservation land on the island of Kauai and 100% of the Company's ownership interest in McBryde Resources, Inc., the operator of hydroelectric power facilities on Kauai, in exchange for cash consideration of approximately $73.9 million. This was partially offset by $11.0 million in capital expenditures during the nine months ended September 30, 2022.

As it relates to the CRE segment, ~~(i.e., its core business),~~ the Company differentiates capital expenditures as follows (based on management's perspective on discretionary versus non-discretionary areas of spending for its CRE business):

•Growth Capital Expenditures: Property acquisition, development and redevelopment activity to generate income and cash flow growth.

•Maintenance Capital Expenditures: Activity necessary to maintain building value, the current income stream and position in the market.

4035

Capital expenditures for the respective periods for all segments were as ~~follows:~~follows (dollars in thousands, unaudited):

Nine Months Ended September 30,
(dollars in millions; unaudited) 2023 2022 Change
CRE property acquisitions, development and redevelopment $ 15.6 $ 4.8 225.0%
Building/area improvements (Maintenance Capital Expenditures) 5.2 3.5 48.6%
Tenant space improvements (Maintenance Capital Expenditures) 2.1 2.4 (12.5)%
Tenant space improvements - nonrecurring (Maintenance Capital Expenditures) 0.1 — NM
Land Operations and Corporate 0.1 0.3 (66.7)%
Total capital expenditures1
$ 23.1 $ 11.0 110.0%


	Three Months Ended March 31,
	2024		2023
Capital expenditures for real estate
Ongoing maintenance capital expenditures
Building/area improvements	$	1,164	$	728
Tenant space improvements	854		584
Total ongoing maintenance capital expenditures for real estate	2,018		1,312
Discretionary capital expenditures

Development and redevelopment1	1,022		1,056
Tenant space improvements - nonrecurring	—		7
Total discretionary capital expenditures for real estate	1,022		1,063
Capitalized indirect costs	666		617
Total capital expenditures for real estate1	3,706		2,992
Corporate and other capital expenditures	40		26
Total Capital Expenditures1	3,746		3,018

1 Excludes capital expenditures for real estate developments to be held and sold as real estate development inventory, which are classified in the condensed consolidated statement of cash flows as operating activities and are excluded from the tables above.

Cash used in financing activities for continuing operations was ~~$32.5~~$25.2 million for the ~~nine~~three months ended ~~September 30, 2023,~~March 31, 2024, as compared to ~~$134.6~~$27.4 million for the ~~nine~~three months ended ~~September 30, 2022.~~March 31, 2023. During the ~~nine~~three months ended ~~September 30,~~March 31, 2024, the Company's net cash outlays related to financing activities were due primarily to cash dividend payments totaling $16.4 million and repayments of secured and unsecured notes payable and other debt of $15.4 million, partially offset by net borrowings of $9.0 million on the Company's revolving credit facility. During the three months ended March 31, 2023, the Company's net cash outlays related to financing activities were due primarily to cash dividend payments totaling ~~$64.2~~$32.0 million and repayments of secured and unsecured notes payable and other debt of ~~$33.7~~$18.0 million, partially offset by net borrowings of ~~$69.0~~$25.0 million on the Company's revolving credit facilities. During the nine months ended September 30, 2022, the Company's net cash outlays related to financing activities were due primarily to its net payments on the Company's revolving credit facilities and repayments of notes payable and other debt and deferred financing costs of $71.9 million, as well as cash dividend payments totaling $57.7 million.facility.

The Company's Board of Directors authorized the Company to repurchase up to ~~$150.0~~$100.0 million of its common stock between January 1, ~~2022~~2024 and December 31, ~~2023.~~2025. During the three ~~and nine~~ months ended ~~September 30, 2023,~~March 31, 2024, the Company ~~repurchased 91,710~~did not repurchase any shares ~~on the open market for an aggregate purchase price, including commissions~~ of ~~$1.5 million. $143.9 million remains available under the stock repurchase program as of September 30, 2023.~~its common stock.

Other capital resource matters

The Company frequently utilizes §1031 and §1033 of the Internal Revenue Code of 1986, as amended (the "Code"), to obtain tax-deferral treatment when qualifying real estate assets are sold or become subject to involuntary conversion and the resulting proceeds are reinvested in replacement properties within the required time period. Proceeds from potential tax-deferred sales under §1031 of the Code are held in escrow (and presented as part of Restricted cash on the consolidated balance sheets) pending future reinvestment or are returned to the Company for general use if eligibility for tax-deferral treatment based on the required time period lapses. The proceeds from involuntary conversions under §1033 of the Code are held by the Company until the funds are redeployed.

During the ~~nine~~three months ended ~~September 30, 2023,~~March 31, 2024, the Company did not complete any transactions that would give rise to cash proceeds from sales or involuntary conversion activity that qualified under §1031 or §1033 of the ~~Code and, over the same period, completed one acquisition utilizing eligible/available proceeds from tax-deferred sales or involuntary conversions.~~Code. As of ~~September 30, 2023,~~March 31, 2024, no funds from tax-deferred sales or involuntary conversions were available for use and had not yet been reinvested under §1031 or §1033 of the Code.

4136

Trends, events and uncertainties

General economic conditions and consumer spending patterns can negatively impact our operating results. Unfavorable local, regional, national, or global economic developments or uncertainties, including market volatility, supply chain and labor constraints, inflationary pressures, travel restrictions, war, natural disasters or effects of climate change, or a prolonged economic downturn could adversely affect our business. ~~During the quarter ended September 30, 2023, the Federal Reserve continued its campaign to lower inflation by raising the federal funds rate by 0.25% to 5.25%.~~ The impact of the rapid increase in the federal funds rate, ~~from 0.25% at January 1, 2022,~~ has resulted in a tightening of credit and contributed to volatility in the banking, technology, and housing industries. The ultimate extent of the impact that these trends and events will have on the Company's business, financial condition, results of operations and liquidity and capital resources will largely depend on future developments, including the resulting impact on economic growth/recession, the impact on travel and tourism behavior and the impact on consumer confidence and discretionary and non-discretionary spending, all of which are highly uncertain and cannot be reasonably predicted.

Other Matters

Critical accounting estimates

The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America, upon which Management's Discussion and Analysis is based, requires that management exercise judgment when making estimates and assumptions about future events that may affect the amounts reported in the financial statements and accompanying notes. Future events and their effects cannot be determined with absolute certainty and actual results will, inevitably, differ from those critical accounting estimates. These differences could be material. The most significant accounting estimates inherent in the preparation of the Company's financial statements were described in Management's Discussion and Analysis of Financial Condition and Results of Operations contained in the Company's ~~2022~~2023 Form 10-K. ~~Changes to the Company's critical accounting estimates are included herein.~~

~~Assets and Liabilities Held for Sale~~

~~The Company presents the assets and liabilities of a disposal group as held for sale upon meeting all of the following criteria:~~

•~~Management, having the authority to approve the action, commits to a plan to sell the asset (disposal group).~~

•~~The asset (disposal group) is available for immediate sale in its present condition subject only to terms that are usual and customary for sales of such assets (disposal groups).~~

•~~An active program to locate a buyer and other actions required to complete the plan to sell the asset (disposal group) have been initiated.~~

•~~The sale of the asset (disposal group) is probable, and transfer of the asset (disposal group) is expected to qualify for recognition as a completed sale, within one year.~~

•~~The asset (disposal group) is being actively marketed for sale at a price that is reasonable in relation to its current fair value.~~

•~~Actions required to complete the plan indicate that it is unlikely that significant changes to the plan will be made or that the plan will be withdrawn.~~

The determination as to whether the sale of the disposal group is probable may include significant judgments from management related to the estimated timing of the closing of a future sales transaction. For information regarding significant judgments related to fair value estimates of the disposal group held for sale, refer to the ~~Impairment~~ ~~subheading within the~~ ~~Critical Accounting Estimates~~.

As of December 31, 2022, the Company concluded that the Grace Disposal Group met all of the criteria listed above for classification as held for sale. The Grace Disposal Group continued to meet all the criteria for classification as held for sale as of September 30, 2023.

~~Discontinued Operations~~

Discontinued operations comprise activities that were disposed of, discontinued, or held for sale at the end of the period; represent a component of an entity or a group of components that can be clearly distinguished for operational and financial reporting purposes; and represent a strategic business shift that has (or will have) a major effect on the Company’s operations and financial results.

Based on the significance of the Grace Disposal Group’s historical revenue and net income (loss) to the Company and because the Grace Disposal Group comprises primarily all of the Company’s previously reported Materials & Construction reportable segment, the Company determined that the planned sale represents a strategic shift that will have a material effect on the Company’s operations and financial results.

New accounting pronouncements

Refer to Notes to Consolidated Financial Statements, included in Part 1, Item 1 of this report, for a full description of the impact of recently issued accounting standards, which is incorporated herein by reference, including the expected dates of adoption and estimated effects on the Company's results of operations and financial condition.

4337

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Information concerning market risk is incorporated herein by reference to Item 7A of the Company's Form 10-K for the fiscal year ended December 31, ~~2022.~~2023. There have been no material changes in the quantitative and qualitative disclosures about market risk since December 31, ~~2022.~~2023.

ITEM 4. CONTROLS AND PROCEDURES

Disclosure Controls and Procedures

The Company's management, with the participation of the Company's Chief Executive Officer and Chief Financial Officer, has evaluated the effectiveness of the Company's disclosure controls and procedures (as such term is defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act) as of the end of the period covered by this report. Based on such evaluation, the Company's Chief Executive Officer and Chief Financial Officer have concluded that, as of ~~September 30, 2023,~~March 31, 2024, the Company’s disclosure controls and procedures were effective.

Internal Control Over Financial Reporting

There have not been any changes in the Company's internal control over financial reporting (as such term is defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) during the Company's fiscal ~~third~~first quarter that have materially affected, or are reasonably likely to materially affect, the Company's internal control over financial reporting.

4438

PART II. OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS

The information set forth under the "Legal Proceedings and Other Contingencies" section in Note 87 of Notes to Condensed Consolidated Financial Statements, included in Part I, Item 1 of this report, is incorporated herein by reference.

ITEM 1A. RISK FACTORS

There have been no material changes to the risk factors previously disclosed in Item 1A. "Risk Factors" in the Company's most recent annual report on Form 10-K.

ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

There were no equity securities sold by the Company during the period covered by this report that were not registered under the Securities Act.

In October ~~2021, the Company's Board of Directors authorized the Company to repurchase up to $150.0 million of its common stock beginning on January 1, 2022, and ending on December 31, 2023. In October~~ 2023, the Company's Board of Directors authorized the Company to repurchase up to $100.0 million of its common stock beginning on January 1, 2024, and ending on December 31, 2025.

During the quarter ended ~~September 30, 2023,~~March 31, 2024, the Company repurchased ~~91,710~~no shares of ~~our~~its common ~~stock in the open market for an aggregate purchase price, including commissions, of $1.5 million. These shares were retired upon repurchase.~~stock. As of ~~September 30, 2023, $143.9~~March 31, 2024, $100.0 million remains available under the stock repurchase program.

Issuer Purchases of Equity Securities
Period Total Number of Shares Purchased Average Price Paid per Share¹ Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs Approximate Dollar Value of Shares that May Yet Be Purchased Under the Plans or Programs
(in thousands)
July 1-31, 2023 — $ — 277,010 $ 145,400
August 1-31, 2023 — $ — 277,010 $ 145,400
September 1-30, 2023 91,710 $ 16.72 368,720 $ 143,867

1~~The average price paid per share includes $0.02 commission fee per share.~~

~~ITEM 4. MINE SAFETY DISCLOSURES~~

The information concerning mine safety violations or other regulatory matters required by Section 1503(a) of the Dodd-Frank Wall Street Reform and Consumer Protection Act and Item 104 of Regulations S-K (17 CFR 229.104) is included in Exhibit 95 to this periodic report on Form 10-Q.

ITEM 5. OTHER INFORMATION

~~The last date Jerrod M. Schreck is expected to serve as Executive Vice President~~None of the ~~Company~~Company’s directors or officers adopted, modified, or terminated a Rule 10b5-1 trading arrangement or a non-Rule 10b5-1 trading arrangement (as each term is ~~December~~defined in Item 408 of Regulation S-K) during the quarter ended March 31, 2023. In connection with Mr. Schreck’s departure from the Company and Grace Pacific, the Company and Mr. Schreck have entered into a letter agreement, dated October 30, 2023. The letter agreement contains non-disclosure and release provisions in exchange for benefits provided under the Company’s Executive Severance Plan, as well as certain other benefits, including a payment of $250,000 and eligibility to receive a Success Fee, as described in the letter agreement. The foregoing description of Mr. Schreck’s letter agreement is qualified in its entirety by reference to the actual terms of the agreement, which is attached as an exhibit hereto and is incorporated by reference herein.2024.

4539

ITEM 6. EXHIBITS

EXHIBIT INDEX

10. Material Contracts

~~10.b.1.(liv)~~10.a.(xvii) ~~Amendment to Consulting~~Third Amended and Restated Note Purchase and Private Shelf Agreement ~~dated July 1, 2023, between~~among Alexander & Baldwin, Inc. ~~and Christopher J. Benjamin.~~

~~10.b.1.(lv)~~ ~~Letter Agreement, date~~d ~~October 30, 2023~~, ~~between~~ Alexander & Baldwin, LLC, PGIM, Inc., and ~~Jerrod M. Schreck.~~certain affiliates of PGIM, Inc., dated April 15, 2024 .

31.1 Certification of Chief Executive Officer, as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

31.2 Certification of Chief Financial Officer, as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

32 Certification of Chief Executive Officer and Chief Financial Officer Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

95 ~~Mine Safety Disclosure~~.

101 The following information from Alexander & Baldwin, Inc.'s Quarterly Report on Form 10-Q for the quarterly period ended ~~September 30, 2023,~~March 31, 2024, formatted in Inline XBRL (eXtensible Business Reporting Language): (i) Condensed Consolidated Balance Sheets as of ~~September 30, 2023~~March 31, 2024 and December 31, ~~2022;~~2023; (ii) Condensed Consolidated Statements of Operations for the three ~~and nine~~ months ended ~~September 30, 2023~~March 31, 2024 and ~~2022;~~2023; (iii) Condensed Consolidated Statements of Comprehensive Income (Loss) for the three ~~and nine~~ months ended ~~September 30, 2023~~March 31, 2024 and ~~2022;~~2023; (iv) Condensed Consolidated Statements of Cash Flows for the ~~nine~~three months ended ~~September 30, 2023~~March 31, 2024 and ~~2022;~~2023; (v) Condensed Consolidated Statements of Equity and Redeemable Noncontrolling Interest for the three ~~and nine~~ months ended ~~September 30, 2023~~March 31, 2024 and ~~2022;~~2023; and (vi) Notes to Condensed Consolidated Financial Statements.

104 Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101).

4640

SIGNATURES


Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.


						ALEXANDER & BALDWIN, INC.



~~November 3, 2023~~April 26, 2024						By: /s/ Clayton K.Y. Chun
						Clayton K.Y. Chun
						Executive Vice President, Chief Financial Officer and Treasurer


~~November 3, 2023~~April 26, 2024						By: /s/ Anthony J. Tommasino
						Anthony J. Tommasino
						Vice President and Controller

4741


	Three Months Ended September 30, 2023				Nine Months Ended September 30, 2023
	Leases	GLA (SF)	ABR2,4/SF	Rent Spread3	Leases	GLA (SF)	ABR2,4/SF	Rent Spread3
Retail	42	71,053	$41.44	13.8%	119	265,203	$40.43	8.0%
Industrial	18	77,176	$14.51	4.1%	56	232,331	$16.01	7.1%
Office	2	1,710	$18.60	—%	8	11,771	$31.07	3.8%
Subtotal - Improved	62	149,939	$27.32	11.2%	183	509,305	$29.07	7.6%
Ground	2	N/A1	$0.3	27.6%	6	N/A1	$5.0	37.8%
1 Not applicable for ground leases as such leases would not be comparable from a GLA (SF) perspective
2Annualized Base Rent ("ABR") is the current month's contractual base rent multiplied by 12. Base rent is presented without consideration of percentage rent that may, in some cases, be significant.
3 Rent spread is calculated for comparable leases, a subset of the total population of leases for the period presented (described above).
4 Current ABR, in millions, is presented for ground leases


	Nine Months Ended September 30,
(dollars in millions; unaudited)	2023		2022		Change
CRE property acquisitions, development and redevelopment	$	15.6	$	4.8	225.0%
Building/area improvements (Maintenance Capital Expenditures)	5.2		3.5		48.6%
Tenant space improvements (Maintenance Capital Expenditures)	2.1		2.4		(12.5)%
Tenant space improvements - nonrecurring (Maintenance Capital Expenditures)	0.1		—		NM
Land Operations and Corporate	0.1		0.3		(66.7)%
Total capital expenditures1	$	23.1	$	11.0	110.0%


Issuer Purchases of Equity Securities
Period	Total Number of Shares Purchased	Average Price Paid per Share¹		Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs	Approximate Dollar Value of Shares that May Yet Be Purchased Under the Plans or Programs
					(in thousands)
July 1-31, 2023	—	$	—	277,010	$	145,400
August 1-31, 2023	—	$	—	277,010	$	145,400
September 1-30, 2023	91,710	$	16.72	368,720	$	143,867