News Releases
News Releases
Net income for the fourth quarter of 2008 was
COMMENTS ON QUARTER & OUTLOOK
“While many of the markets served by Alexander & Baldwin experienced an economic slowdown in 2008, our strong first half performance in development sales, strong property sales throughout the year and increased efficiency measures in our transportation segment enabled the Company to post a favorable full-year result, representing a modest 7 percent year-over-year decline in net income and 3 percent decline in diluted earnings per share,” said
“We are pleased by this performance, but we recognize that our 2009 earnings prospects have been diminished. As a result, we will continue to take all necessary measures – cost containment and expense reduction, deferral of non-essential capital projects, preservation of cash, shoring up of our liquidity sources – to preserve our financial strength. The actions we are taking will give us the flexibility to capitalize on attractive opportunities as they arise, while remaining committed to a strong financial footing.”
“The Ocean Transportation segment posted a 16 percent decline in operating profit in 2008 as compared to 2007, reflecting a considerable decline in container and auto volume, in line with the accelerated contraction of the
“The Logistics Services segment, like Ocean Transportation, experienced lower volume levels in its service lines that negatively impacted operating profit by 15 percent for the year, although higher yields offset the lower volume to some degree. As well, higher expenses related to the ramp-up of Matson Global Distribution Services (“Matson Global”), including an acquisition, modestly impacted earnings but provide a solid foundation for growth in 2009. Matson Integrated Logistics’ fourth quarter operating profit was off from the prior year due to these same volume declines.”
“Historically low sugar production levels resulting from a two-year drought led to a considerable loss of nearly
“Our
“Our Real Estate Sales operating profit in 2008 was very strong, 28 percent higher than 2007, resulting from a diversified mix of residential condominium sales (
“In addition to the financial results achieved, we repurchased nearly 1.5 million shares of the Company’s common stock through open market purchases in 2008 and raised our dividend for the third straight year. These initiatives underscore our commitment to returning cash to shareholders while concurrently making investments that create value over time.”
TRANSPORTATION—OCEAN TRANSPORTATION
Quarter Ended December 31, | |||||||||||
(dollars in millions) | 2008 | 2007 | Change | ||||||||
Revenue | $ | 239.5 | $ | 262.3 | -9 | % | |||||
Operating profit | $ | 21.1 | $ | 30.1 | -30 | % | |||||
Operating profit margin | 8.8 | % | 11.5 | % | |||||||
Volume (Units) | |||||||||||
Hawaii containers | 35,900 | 41,500 | -13 | % | |||||||
Hawaii automobiles | 15,300 | 33,200 | -54 | % | |||||||
China containers | 11,100 | 13,200 | -16 | % | |||||||
Guam containers | 3,300 | 3,900 | -15 | % | |||||||
For the fourth quarter of 2008, lower container volume in all trade lanes resulted in lower revenue and
Year Ended December 31, | |||||||||||
(dollars in millions) | 2008 | 2007 | Change | ||||||||
Revenue | $ | 1,023.7 | $ | 1,006.9 | 2 | % | |||||
Operating profit | $ | 105.8 | $ | 126.5 | -16 | % | |||||
Operating profit margin | 10.3 | % | 12.6 | % | |||||||
Volume (units): | |||||||||||
Hawaii containers | 152,700 | 167,500 | -9 | % | |||||||
Hawaii automobiles | 86,300 | 110,100 | -22 | % | |||||||
China containers | 47,800 | 51,200 | -7 | % | |||||||
Guam containers | 13,900 | 14,600 | -5 | % | |||||||
For the full year 2008, Ocean Transportation revenue increased by 2 percent due to higher revenue from fuel surcharges, including a bunker adjustment factor introduced into our
TRANSPORTATION—LOGISTICS SERVICES
Quarter Ended December 31, | |||||||||||
(dollars in millions) | 2008 | 2007 | Change | ||||||||
Intermodal revenue | $ | 58.8 | $ | 70.4 | -16 | % | |||||
Highway revenue | 41.0 | 37.4 | 10 | % | |||||||
Total Revenue | $ | 99.8 | $ | 107.8 | -7 | % | |||||
Operating profit | $ | 4.1 | $ | 4.7 | -13 | % | |||||
Operating profit margin | 4.1 | % | 4.4 | % | |||||||
Fourth quarter 2008 Logistics services revenue of
Year Ended December 31, | |||||||||||
(dollars in millions) | 2008 | 2007 | Change | ||||||||
Intermodal revenue | $ | 271.0 | $ | 280.2 | -3 | % | |||||
Highway revenue | 165.0 | 153.3 | 8 | % | |||||||
Total Revenue | $ | 436.0 | $ | 433.5 | 1 | % | |||||
Operating profit | $ | 18.5 | $ | 21.8 | -15 | % | |||||
Operating profit margin | 4.2 | % | 5.0 | % | |||||||
Logistics revenue increased
REAL ESTATE—INDUSTRY
Real estate leasing and sales revenue and operating profit are analyzed before discontinued operations are removed. This is consistent with how the Company evaluates segment results and makes decisions.
REAL ESTATE—LEASING
The Company regularly makes dispositions of commercial properties from its leasing portfolio and land under ground leases and subsequently reinvests proceeds, on a tax-deferred basis, in new properties. As a result, the Company often incurs higher depreciation expenses attributable to the replacement of formerly non-depreciable property with depreciable property, or a step-up in the cost basis of its properties. Further, due to the inherent timing lag between disposition and reinvestment, the Company incurs modest loss of revenue and income in these interim periods.
Quarter Ended December 31, | |||||||||||
(dollars in millions) | 2008 | 2007 | Change | ||||||||
Revenue | $ | 25.5 | $ |
27.0 |
-6 | % | |||||
Operating profit | $ | 10.2 | $ |
12.1 |
-16 | % | |||||
Operating profit margin | 40.0 | % |
44.8 |
% |
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During the quarter, the company sold its Venture Oaks office building (
Year Ended December 31, | |||||||||||
(dollars in millions) | 2008 | 2007 | Change | ||||||||
Revenue | $ | 107.8 | $ | 108.5 | -1 | % | |||||
Operating profit | $ | 47.8 | $ | 51.6 | -7 | % | |||||
Operating profit margin | 44.3 | % | 47.6 | % | |||||||
Average Occupancy Rate: | |||||||||||
Mainland | 95 | % | 97 | % | |||||||
Hawaii | 98 | % | 98 | % | |||||||
Leasable Space (million sq. ft.): | |||||||||||
Mainland | 6.6 | 5.2 | 27 | % | |||||||
Hawaii | 1.3 | 1.4 | -7 | % | |||||||
For the full year 2008,
Leasable space increased by a net 1.3 million square feet in 2008 compared with 2007, due to the net effect of four acquisitions of warehouse and distribution facilities and the disposition of two retail centers and one office building.
REAL ESTATE—SALES
Quarter Ended December 31, | ||||||||||
(dollars in millions) | 2008 | 2007 | Change | |||||||
Improved property sales | $ | 30.3 | $ | 16.6 | 83 | % | ||||
Development sales | 5.6 | 10.7 | -48 | % | ||||||
Unimproved/other property sales | 18.5 | 5.1 | 4 | X | ||||||
Total revenue | $ | 54.4 | $ | 32.4 | 68 | % | ||||
Operating profit before joint ventures | $ | 20.6 | $ | 16.2 | 27 | % | ||||
Earnings/(loss) from joint ventures | (1.3 | ) | 7.0 | NM | ||||||
Total operating profit | $ | 19.3 | $ | 23.2 | -17 | % | ||||
In the fourth quarter of 2008, Real Estate Sales revenue increased by
Year Ended December 31, | ||||||||||
(dollars in millions) | 2008 | 2007 | Change | |||||||
Improved property sales | $ | 103.6 | $ | 90.2 | 15 | % | ||||
Development sales | 217.4 | 14.9 | 15 | X | ||||||
Unimproved/other property sales | 29.2 | 12.7 | 130 | % | ||||||
Total revenue | $ | 350.2 | $ | 117.8 | 197 | % | ||||
Operating profit before joint ventures | $ | 86.6 | $ | 51.8 | 67 | % | ||||
Earnings from joint ventures | 9.0 | 22.6 | -60 | % | ||||||
Total operating profit | $ | 95.6 | $ | 74.4 | 28 | % | ||||
Real Estate Sales revenue in 2008 was
AGRIBUSINESS
The operating results of the Agribusiness segment are dependent on a number of factors, particularly weather conditions, which affect yields, volume of hydro-electric generation, planting, harvesting, and factory operations. Consequently, operating results from the Agribusiness segment will vary from period to period.
Quarter Ended December 31, | |||||||||||
(dollars in millions) | 2008 | 2007 | Change | ||||||||
Revenue | $ | 28.1 | $ | 30.7 | -8 | % | |||||
Operating loss | $ | (6.1 | ) | $ | (0.7 | ) | -9 | X | |||
Tons sugar produced | 30,400 | 34,000 | -11 | % | |||||||
Agribusiness revenue for the fourth quarter of 2008 decreased 8 percent primarily due to lower raw sugar sales, lower coffee sales and lower power sales, partially offset by an increase in sales of specialty sugars. Operating loss increased significantly due principally to the decrease in raw sugar production and higher fuel-related operating costs and to lower power sales volume stemming from a lack of hydro-power associated with prolonged drought conditions.
Year Ended December 31, | |||||||||||
(dollars in millions) | 2008 | 2007 | Change | ||||||||
Revenue | $ | 124.3 | $ | 123.7 | -- | ||||||
Operating profit (loss) | $ | (12.9 | ) | $ | 0.2 | NM | |||||
Operating profit margin | NM | 0.2 | % | ||||||||
Tons sugar produced | 145,200 | 164,500 | -12 | % | |||||||
Full year revenues for Agribusiness were essentially flat as compared to the prior year, as higher power sales prices and specialty sugar sales volume were offset by lower volume of raw sugar and soil sales and lower molasses sales prices. Operating losses were significant and are due to the 12 percent reduction in sugar volume and higher fuel-related operating costs, partially offset by higher power prices.
CORPORATE EXPENSE
Fourth quarter 2008 corporate expenses of
CONDENSED CASH FLOW TABLE –
Year Ended December 31, | |||||||||||
(dollars in millions, unaudited) | 2008 | 2007 | Change | ||||||||
Cash Flow from Operating Activities | $ | 275 | $ | 124 | 2 | X | |||||
Capital Expenditures (1) | |||||||||||
Transportation | (38 | ) | (68 | ) | -44 | % | |||||
Real Estate | (55 | ) | (34 | ) | 62 | % | |||||
Agribusiness and other | (16 | ) | (20 | ) | -20 | % | |||||
Total Capital Expenditures | (109 | ) | (122 | ) | -11 | % | |||||
Other Investing Activities, Net | (40 | ) | (23 | ) | 74 | % | |||||
Cash Used in Investing Activities | $ | (149 | ) | $ | (145 | ) | 3 | % | |||
Net Debt Proceeds/(Payments) | (16 | ) | 66 | NM | |||||||
Repurchase of Capital Stock | (59 | ) | (33 | ) | 79 | % | |||||
Dividends Paid | (51 | ) | (48 | ) | 6 | % | |||||
Other Financing Activities, Net | 2 | 8 | -75 | % | |||||||
Cash Used in Financing Activities | $ | (124 | ) | $ | (7 | ) | 18 | X | |||
Net Increase/(Decrease) in Cash | $ | 2 | $ | (28 | ) | NM | |||||
(1) Excludes non-cash 1031 transactions and real estate development activity. |
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Statements in this press release that are not historical facts are “forward-looking statements,” within the meaning of the Private Securities Litigation Reform Act of 1995, that involve a number of risks and uncertainties that could cause actual results to differ materially from those contemplated by the relevant forward-looking statement. These forward-looking statements are not guarantees of future performance. This release should be read in conjunction with our Annual Report on Form 10-K and our other filings with the
ALEXANDER & BALDWIN, INC. 2008 and 2007 Fourth-Quarter and Full-Year Results (Condensed) (In Millions, Except Per Share Amounts, Unaudited) |
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2008 |
2007 |
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Three Months Ended December 31: |
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Revenue | $ | 400.0 | $ | 433.0 | |||
Income From Continuing Operations | $ | 10.9 | $ | 25.6 | |||
Discontinued Operations: Properties1 | $ | 13.0 | $ | 10.8 | |||
Net Income | $ | 23.9 | $ | 36.4 | |||
Basic Share Earnings | |||||||
Continuing Operations | $ | 0.26 | $ | 0.61 | |||
Discontinued Operations | $ | 0.32 | $ | 0.25 | |||
Net Income | $ | 0.58 | $ | 0.86 | |||
Diluted Share Earnings | |||||||
Continuing Operations | $ | 0.26 | $ | 0.59 | |||
Discontinued Operations | $ | 0.32 | $ | 0.26 | |||
Net Income | $ | 0.58 | $ | 0.85 | |||
Basic Average Shares Outstanding | 41.1 | 42.3 | |||||
Diluted Average Shares Outstanding | 41.2 | 42.9 | |||||
2008 |
2007 |
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Years Ended December 31: |
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Revenue | $ | 1,898.3 | $ | 1,669.2 | |||
Income From Continuing Operations | $ | 95.9 | $ | 104.2 | |||
Discontinued Operations: Properties1 | $ | 36.5 | $ | 38.0 | |||
Net Income | $ | 132.4 | $ | 142.2 | |||
Basic Share Earnings | |||||||
Continuing Operations | $ | 2.32 | $ | 2.45 | |||
Discontinued Operations | $ | 0.89 | $ | 0.89 | |||
Net Income | $ | 3.21 | $ | 3.34 | |||
Diluted Share Earnings | |||||||
Continuing Operations | $ | 2.31 | $ | 2.42 | |||
Discontinued Operations | $ | 0.88 | $ | 0.88 | |||
Net Income | $ | 3.19 | $ | 3.30 | |||
Basic Average Shares Outstanding | 41.2 | 42.5 | |||||
Diluted Average Shares Outstanding | 41.5 | 43.1 | |||||
1 “Discontinued Operations: Properties” consists of sales, or intended sales, of certain lands |
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Industry Segment Data, Net Income (Condensed) (In Millions, Except Per Share Amounts, Unaudited) |
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Three Months Ended |
Year Ended |
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December 31, |
December 31, |
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2008 |
2007 |
2008 |
2007 |
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Revenue: |
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Transportation | ||||||||||||||||
Ocean Transportation | $ | 239.5 | $ | 262.3 | $ | 1,023.7 | $ | 1,006.9 | ||||||||
Logistics Services | 99.8 | 107.8 | 436.0 | 433.5 | ||||||||||||
Real Estate | ||||||||||||||||
Leasing | 25.5 | 27.0 | 107.8 | 108.5 | ||||||||||||
Sales | 54.4 | 32.4 | 350.2 | 117.8 | ||||||||||||
Less Amounts Reported In Discontinued Operations | (43.7 | ) | (24.2 | ) | (133.0 | ) | (112.0 | ) | ||||||||
Agribusiness | 28.1 | 30.7 | 124.3 | 123.7 | ||||||||||||
Reconciling Items | (3.6 | ) | (3.0 | ) | (10.7 | ) | (9.2 | ) | ||||||||
Total Revenue | $ | 400.0 | $ | 433.0 | $ | 1,898.3 | $ | 1,669.2 | ||||||||
Operating Profit, Net Income: |
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Transportation | ||||||||||||||||
Ocean Transportation | $ | 21.1 | $ | 30.1 | $ | 105.8 | $ | 126.5 | ||||||||
Logistics Services | 4.1 | 4.7 | 18.5 | 21.8 | ||||||||||||
Real Estate | ||||||||||||||||
Leasing | 10.2 | 12.1 | 47.8 | 51.6 | ||||||||||||
Sales | 19.3 | 23.2 | 95.6 | 74.4 | ||||||||||||
Less Amounts Reported In Discontinued Operations | (21.0 | ) | (17.4 | ) | (59.1 | ) | (61.0 | ) | ||||||||
Agribusiness | (6.1 | ) | (0.7 | ) | (12.9 | ) | 0.2 | |||||||||
Total Operating Profit | 27.6 | 52.0 | 195.7 | 213.5 | ||||||||||||
Interest Expense | (6.2 | ) | (5.6 | ) | (23.7 | ) | (18.8 | ) | ||||||||
General Corporate Expenses | (4.6 | ) | (7.8 | ) | (21.0 | ) | (27.3 | ) | ||||||||
Income From Continuing Operations Before Income Taxes | 16.8 | 38.6 | 151.0 | 167.4 | ||||||||||||
Income Taxes | (5.9 | ) | (13.0 | ) | (55.1 | ) | (63.2 | ) | ||||||||
Income From Continuing Operations | 10.9 | 25.6 | 95.9 | 104.2 | ||||||||||||
Discontinued Operations | 13.0 | 10.8 | 36.5 | 38.0 | ||||||||||||
Net Income | $ | 23.9 | $ | 36.4 | $ | 132.4 | $ | 142.2 | ||||||||
Basic Earnings Per Share, Continuing Operations | $ | 0.26 | $ | 0.61 | $ | 2.32 | $ | 2.45 | ||||||||
Basic Earnings Per Share, Discontinued Operations | $ | 0.32 | $ | 0.25 | $ | 0.89 | $ | 0.89 | ||||||||
Basic Earnings Per Share, Net Income | $ | 0.58 | $ | 0.86 | $ | 3.21 | $ | 3.34 | ||||||||
Diluted Earnings Per Share, Continuing Operations | $ | 0.26 | $ | 0.59 | $ | 2.31 | $ | 2.42 | ||||||||
Diluted Earnings Per Share, Discontinued Operations | $ | 0.32 | $ | 0.26 | $ | 0.88 | $ | 0.88 | ||||||||
Diluted Earnings Per Share, Net Income | $ | 0.58 | $ | 0.85 | $ | 3.19 | $ | 3.30 | ||||||||
Basic Average Shares Outstanding | 41.1 | 42.3 | 41.2 | 42.5 | ||||||||||||
Diluted Average Shares Outstanding | 41.2 | 42.9 | 41.5 | 43.1 | ||||||||||||
Consolidated Balance Sheets (Condensed) (In Millions, Unaudited) |
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December 31, |
December 31, |
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2008 |
2007 |
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ASSETS | |||||||
Current Assets | $ | 284 | $ | 421 | |||
Investments in Affiliates | 208 | 184 | |||||
Real Estate Developments | 78 | 99 | |||||
Property, Net | 1,590 | 1,582 | |||||
Other Long-Term Assets | 190 | 193 | |||||
Total | $ | 2,350 | $ | 2,479 | |||
LIABILITIES & EQUITY | |||||||
Current Liabilities | $ | 238 | $ | 322 | |||
Long-Term Debt | 452 | 452 | |||||
Employee Benefit Plans | 122 | 50 | |||||
Other Long-Term Liabilities | 52 | 57 | |||||
Deferred Income Taxes | 414 | 468 | |||||
Shareholders’ Equity | 1,072 | 1,130 | |||||
Total | $ | 2,350 | $ | 2,479 |
Source:
Alexander & Baldwin, Inc.
Meredith Ching, 808-525-6669 (Media)
mching@abinc.com
Kevin L. Halloran, 808-525-8422 (Investor Relations)
khalloran@abinc.com