UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
x☒QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended September 30, 2017
ORFor the quarterly period ended March 31, 2021
OR
o☐TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from ______________________ to _________________
For the transition period from ______________________ to _________________
Commission file number 001-35492
ALEXANDER & BALDWIN, INC.
(Exact name of registrant as specified in its charter)
Hawaii45-4849780
(State or other jurisdiction of

incorporation or organization)
(I.R.S. Employer

Identification No.)
P. O. Box 3440,
Honolulu,Hawaii
822 Bishop Street, Honolulu, Hawaii
96801
(Address of principal executive offices)
9680l
96813
(Zip Code)
(808) 525-6611
(Registrant’sRegistrant'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 classTrading Symbol(s)Name of each exchange on which registered
Common Stock, without par valueALEXNew 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 x☒No o☐
Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted 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 and post such files). Yes x☒No o☐
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. (Check one):
Large accelerated filer☒Accelerated filer☐
Non-accelerated filer☐Smaller reporting company☐
Large accelerated filer x
Accelerated filer o
Non-accelerated filer o (Do not check if a smaller reporting company)
Smaller reporting company o
Emerging growth companyo
☐
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. o☐
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes o☐No x☒
Number of shares of common stock outstanding as of September 30, 2017:     49,176,369
March 31, 2021: 72,469,682

1

ALEXANDER & BALDWIN, INC.
FORM 10-Q
For the Quarterly Period Ended March 31, 2021

TABLE OF CONTENTS

Page
PART I. FINANCIAL INFORMATION
Item 1.
1
Condensed Consolidated Balance Sheets - As of March 31, 2021 and December 31, 2020
1
Condensed Consolidated Statements of Operations - Three Months Ended March 31, 2021 and 2020
2
Condensed Consolidated Statements of Comprehensive Income (Loss) - Three Months Ended March 31, 2021 and 2020
3
Condensed Consolidated Statements of Cash Flows - Three Months Ended March 31, 2021 and 2020
4
Condensed Consolidated Statements of Equity - Three Months Ended March 31, 2021 and 2020
6
7
Item 2.
21
Item 3.
38
Item 4.
38
PART II. OTHER INFORMATION
Item 1.
39
Item 1A.
39
Item 2.
39
Item 4.
39
Item 6.
40
41


1




PART I. FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS

ALEXANDER & BALDWIN, INC.
Condensed Consolidated Statements of OperationsCONDENSED CONSOLIDATED BALANCE SHEETS
(In millions, except per share amounts) (Unaudited)
amounts in millions; unaudited)
 Quarter Ended September 30, Nine Months Ended September 30,
  
 2017 2016 2017 2016
Operating Revenue:       
Commercial Real Estate$33.9
 $32.7
 $101.4
 $102.0
Land Operations22.6
 18.1
 45.7
 29.6
Materials & Construction55.0
 52.1
 155.7
 144.7
Total operating revenue111.5
 102.9
 302.8
 276.3
Operating Costs and Expenses:       
Cost of Commercial Real Estate19.2
 19.3
 56.9
 60.1
Cost of Land Operations11.7
 6.9
 29.1
 17.6
Cost of Materials & Construction44.3
 41.0
 125.1
 114.9
Selling, general and administrative20.1
 14.7
 51.0
 42.6
REIT evaluation/conversion costs4.4
 1.9
 11.4
 3.8
Total operating costs and expenses99.7
 83.8
 273.5
 239.0
Operating Income11.8
 19.1
 29.3
 37.3
Other Income and (Expenses):       
Income related to joint ventures4.3
 0.1
 7.5
 3.5
Gain on the sale of improved property—
 0.1
 3.0
 8.1
Reductions in solar investments, net(0.4) (0.2) (2.6) (9.7)
Interest and other income, net1.5
 0.5
 3.7
 1.6
Interest expense(6.1) (6.4) (18.5) (20.1)
Total other income and (expenses)(0.7) (5.9) (6.9) (16.6)
Income from Continuing Operations Before Income Taxes11.1
 13.2
 22.4
 20.7
Income tax expense(3.7) (1.0) (6.4) (1.6)
Income from Continuing Operations7.4
 12.2
 16.0
 19.1
Income (loss) from discontinued operations, net of income taxes(0.8) (13.6) 2.4
 (28.1)
Net Income (Loss)6.6
 (1.4) 18.4
 (9.0)
Income attributable to noncontrolling interest(0.5) (0.5) (1.7) (1.1)
Net Income (Loss) Attributable to A&B Shareholders$6.1
 $(1.9) $16.7
 $(10.1)
        
Basic Earnings (Loss) Per Share of Common Stock: 
     
Continuing operations available to A&B shareholders$0.15

$0.25
 $0.32
 $0.39
Discontinued operations available to A&B shareholders(0.02)
(0.28) 0.04
 (0.58)
Net income (loss) available to A&B shareholders$0.13

$(0.03) $0.36
 $(0.19)
Diluted Earnings (Loss) Per Share of Common Stock: 
     
Continuing operations available to A&B shareholders$0.15

$0.24
 $0.31
 $0.38
Discontinued operations available to A&B shareholders(0.02)
(0.27) 0.05
 (0.57)
Net income (loss) available to A&B shareholders$0.13

$(0.03) $0.36
 $(0.19)




    
Weighted-Average Number of Shares Outstanding: 
     
Basic49.2

49.0
 49.1
 49.0
Diluted49.6

49.4
 49.6
 49.4
        
Amounts Available to A&B Shareholders (See Note 4):       
Continuing operations available to A&B shareholders, net of income taxes$7.4
 $12.1
 $15.5
 $18.9
Discontinued operations available to A&B shareholders, net of income taxes(0.8) (13.6) 2.4
 (28.1)
Net income (loss) available to A&B shareholders$6.6
 $(1.5) $17.9
 $(9.2)
        
Cash dividends per share$0.07
 $0.06
 $0.21
 $0.18
March 31,December 31,
20212020
ASSETS
Real estate investments
Real estate property$1,557.2 $1,549.7 
Accumulated depreciation(161.0)(154.4)
Real estate property, net1,396.2 1,395.3 
Real estate developments73.6 75.7 
Investments in real estate joint ventures and partnerships124.0 134.1 
Real estate intangible assets, net59.1 61.9 
Real estate investments, net1,652.9 1,667.0 
Cash and cash equivalents32.0 57.2 
Restricted cash0.2 0.2 
Accounts receivable and retention, net of allowance for credit losses and allowance for doubtful accounts of $3.3 million and $3.3 million as of March 31, 2021 and December 31, 2020, respectively33.2 43.5 
Inventories27.2 18.4 
Other property, net108.7 110.8 
Operating lease right-of-use assets18.2 18.6 
Goodwill10.5 10.5 
Other receivables, net of allowance for credit losses and allowance for doubtful accounts of $3.6 million and $3.9 million as of March 31, 2021 and December 31, 2020, respectively13.9 14.2 
Prepaid expenses and other assets95.1 95.6 
Total assets$1,991.9 $2,036.0 
LIABILITIES AND EQUITY
Liabilities:
Notes payable and other debt$654.6 $687.1 
Accounts payable13.2 9.8 
Operating lease liabilities18.5 18.4 
Accrued pension and post-retirement benefits34.9 34.7 
Deferred revenue68.7 66.9 
Accrued and other liabilities95.7 116.5 
Total liabilities885.6 933.4 
Commitments and Contingencies (Note 8)00
Redeemable Noncontrolling Interest6.5 6.5 
Equity:
Common stock - no par value; authorized, 150.0 million shares; outstanding, 72.5 million and 72.4 million shares at March 31, 2021 and December 31, 2020, respectively1,806.2 1,805.5 
Accumulated other comprehensive income (loss)(56.0)(60.0)
Distributions in excess of accumulated earnings(650.4)(649.4)
Total equity1,099.8 1,096.1 
Total liabilities and equity$1,991.9 $2,036.0 
See Notes to Condensed Consolidated Financial Statements.

1



ALEXANDER & BALDWIN, INC.
Condensed Consolidated Statements of Comprehensive Income (Loss)CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(In millions) (Unaudited)amounts in millions, except per share data; unaudited)
Three Months Ended March 31,
20212020
Operating Revenue:
Commercial Real Estate$39.9 $43.4 
Land Operations17.1 11.0 
Materials & Construction24.0 26.4 
Total operating revenue81.0 80.8 
Operating Costs and Expenses: 
Cost of Commercial Real Estate23.4 24.3 
Cost of Land Operations8.1 8.0 
Cost of Materials & Construction23.7 25.0 
Selling, general and administrative12.2 13.8 
Total operating costs and expenses67.4 71.1 
Gain (loss) on disposal of commercial real estate properties, net0.2 0.5 
Gain (loss) on disposal of non-core assets, net0.1 0 
Total gain (loss) on disposal of assets, net0.3 0.5 
Operating Income (Loss)13.9 10.2 
Other Income and (Expenses):
Income (loss) related to joint ventures3.4 3.2 
Interest and other income (expense), net (Note 2)(0.3)0.2 
Interest expense(7.0)(7.8)
Income (Loss) from Continuing Operations Before Income Taxes10.0 5.8 
Income tax benefit (expense)(0.1)0 
Income (Loss) from Continuing Operations9.9 5.8 
Income (loss) from discontinued operations, net of income taxes0.0 (0.2)
Net Income (Loss)9.9 5.6 
Loss (income) attributable to noncontrolling interest0 0.6 
Net Income (Loss) Attributable to A&B Shareholders$9.9 $6.2 
Earnings (Loss) Per Share Available to A&B Shareholders:
Basic Earnings (Loss) Per Share of Common Stock: 
Continuing operations available to A&B shareholders$0.14 $0.09 
Discontinued operations available to A&B shareholders0.00 0.00 
Net income (loss) available to A&B shareholders$0.14 $0.09 
Diluted Earnings (Loss) Per Share of Common Stock:
Continuing operations available to A&B shareholders$0.14 $0.09 
Discontinued operations available to A&B shareholders0.00 0.00 
Net income (loss) available to A&B shareholders$0.14 $0.09 
Weighted-Average Number of Shares Outstanding:
Basic72.572.3 
Diluted72.672.5 
Amounts Available to A&B Common Shareholders (Note 15):
Continuing operations available to A&B common shareholders$9.9 $6.4 
Discontinued operations available to A&B common shareholders0 (0.2)
Net income (loss) available to A&B common shareholders$9.9 $6.2 
 Quarter Ended September 30, Nine Months Ended September 30,
  
 2017 2016 2017 2016
Net Income (Loss)$6.6
 $(1.4) $18.4
 $(9.0)
Other Comprehensive Income:       
Unrealized interest rate hedging (loss)(0.2) —
 (0.8) (2.8)
Reclassification adjustment for interest expense included in net income (loss)0.1
 0.2
 0.4
 0.2
Defined benefit pension plans:       
Amortization of prior service credit included in net periodic pension cost(0.2) (0.3) (0.7) (0.8)
Amortization of net loss included in net periodic pension cost1.0
 1.9
 3.3
 5.6
Settlement loss1.4
 —
 1.4
 —
Income taxes related to other comprehensive income(0.8) (0.8) (1.4) (0.7)
Other comprehensive income, net of tax1.3
 1.0
 2.2
 1.5
Comprehensive Income (Loss)7.9
 (0.4) 20.6
 (7.5)
Comprehensive income attributable to noncontrolling interest(0.5) (0.5) (1.7) (1.1)
Comprehensive Income (Loss) Attributable to A&B Shareholders$7.4
 $(0.9) $18.9
 $(8.6)

See Notes to Condensed Consolidated Financial Statements.

2



ALEXANDER & BALDWIN, INC.
Condensed Consolidated Balance SheetsCONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)
(In millions) (Unaudited)amounts in millions; unaudited)
 September 30,
2017		 December 31, 2016
ASSETS   
Current Assets:   
Cash and cash equivalents$13.3
 $2.2
Accounts receivable, net34.2
 32.1
Contracts retention12.4
 13.1
Costs and estimated earnings in excess of billings on uncompleted contracts20.7
 16.4
Inventories30.1
 43.3
Real estate held for sale63.8
 1.0
Income tax receivable25.9
 10.6
Prepaid expenses and other assets39.4
 19.6
Total current assets239.8
 138.3
Investments in Affiliates402.0
 390.8
Real Estate Developments151.7
 179.5
Property – Net1,212.4
 1,231.6
Intangible Assets – Net48.7
 53.8
Goodwill102.3
 102.3
Other Assets51.4
 60.0
Total assets$2,208.3
 $2,156.3
    
LIABILITIES AND EQUITY   
Current Liabilities:   
Notes payable and current portion of long-term debt$41.6
 $42.4
Accounts payable36.0
 35.2
Billings in excess of costs and estimated earnings on uncompleted contracts2.6
 3.5
Accrued interest3.8
 6.3
Deferred revenue2.7
 17.6
Indemnity holdback related to Grace acquisition9.3
 9.3
HC&S cessation-related liabilities5.0
 19.1
Accrued and other liabilities28.6
 31.7
Total current liabilities129.6
 165.1
Long-term Liabilities:   
Long-term debt584.2
 472.7
Deferred income taxes202.5
 182.0
Accrued pension and post-retirement benefits16.7
 64.8
Other non-current liabilities41.4
 47.7
Total long-term liabilities844.8
 767.2
Total liabilities974.4
 932.3
Commitments and Contingencies
 
Redeemable Noncontrolling Interest10.8
 10.8
Equity:   
Common stock - no par value; authorized, 150 million shares; outstanding, 49.2 million and 49.0 million shares at September 30, 2017 and December 31, 2016, respectively1,160.5
 1,157.3
Accumulated other comprehensive loss(41.0) (43.2)
Retained earnings99.4
 95.2
Total A&B shareholders' equity1,218.9
 1,209.3
Noncontrolling interest4.2
 3.9
Total equity1,223.1
 1,213.2
Total liabilities and equity$2,208.3
 $2,156.3
Three Months Ended March 31,
 20212020
Net Income (Loss)$9.9 $5.6 
Other Comprehensive Income (Loss), net of tax:
Cash flow hedges:
Unrealized interest rate hedging gain (loss)3.1 (6.9)
Impact of reclassification adjustment to interest expense included in Net Income (Loss)0.3 0 
Employee benefit plans:
Amortization of net loss included in net periodic benefit cost0.6 0.6 
Income taxes related to other comprehensive income (loss)0 0 
Other comprehensive income (loss), net of tax4.0 (6.3)
Comprehensive Income (Loss)13.9 (0.7)
Comprehensive income (loss) attributable to noncontrolling interest0 0.6 
Comprehensive Income (Loss) Attributable to A&B Shareholders$13.9 $(0.1)
See Notes to Condensed Consolidated Financial Statements.

3



ALEXANDER & BALDWIN, INC.
Condensed Consolidated Statements of Cash FlowsCONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(In millions) (Unaudited)amounts in millions; unaudited)
Three Months Ended March 31,
 20212020
Cash Flows from Operating Activities:
Net income (loss)$9.9 $5.6 
Adjustments to reconcile net income (loss) to net cash provided by (used in) operations:
Depreciation and amortization12.6 13.6 
Loss (gain) from disposals and asset transactions, net(0.3)(0.5)
Share-based compensation expense1.4 1.5 
Equity in (income) loss from affiliates, net of operating cash distributions(2.1)(2.9)
Changes in operating assets and liabilities:
Trade, contracts retention, and other contract receivables5.4 7.0 
Inventories(8.8)0 
Prepaid expenses, income tax receivable and other assets(1.0)2.4 
Development/other property inventory2.2 (3.2)
Accrued pension and post-retirement benefits0.9 0.6 
Accounts payable0.8 (3.5)
Accrued and other liabilities(0.4)(1.7)
Net cash provided by (used in) operations20.6 18.9 
Cash Flows from Investing Activities:  
Capital expenditures for property, plant and equipment(5.2)(6.2)
Proceeds from disposal of assets0.5 5.9 
Payments for purchases of investments in affiliates and other investments(0.6)0 
Distributions of capital from investments in affiliates and other investments15.7 3.2 
Net cash provided by (used in) investing activities10.4 2.9 
Cash Flows from Financing Activities:  
Proceeds from issuance of notes payable and other debt0 108.0 
Payments of notes payable and other debt and deferred financing costs(37.7)(44.2)
Borrowings (payments) on line-of-credit agreement, net4.0 51.4 
Cash dividends paid(21.8)(13.8)
Proceeds from issuance (repurchase) of capital stock and other, net(0.7)(0.9)
Net cash provided by (used in) financing activities(56.2)100.5 
Cash, Cash Equivalents and Restricted Cash  
Net increase (decrease) in cash, cash equivalents and restricted cash(25.2)122.3 
Balance, beginning of period57.4 15.4 
Balance, end of period$32.2 $137.7 

4

 Nine Months Ended
 September 30,
 2017 2016
Cash Flows from Operating Activities:
 

Net income (loss)$18.4
 $(9.0)
Adjustments to reconcile net income (loss) to net cash provided by (used in) operations:   
Depreciation and amortization31.4
 83.5
Deferred income taxes19.1
 (18.6)
Gains on asset transactions, net of asset write-downs(22.2) (7.6)
Share-based compensation expense3.4
 3.1
Investments in affiliates, net of distributions3.2
 0.2
Changes in operating assets and liabilities:   
Trade, contracts retention, and other receivables1.0
 (0.3)
Costs and estimated earnings in excess of billings on uncompleted contracts - net(5.2) (0.2)
Inventories13.2
 8.6
Prepaid expenses, income tax receivable and other assets(19.8) 4.8
Accrued pension and post-retirement benefits(48.0) 3.6
Accounts payable and contracts retention(3.0) (4.3)
Accrued and other liabilities(38.2) (7.5)
Real estate inventory sales (real estate developments held for sale)16.5
 2.8
Expenditures for real estate inventory (real estate developments held for sale)(15.0) (10.7)
Net cash provided by (used in) operations(45.2) 48.4
Cash Flows from Investing Activities:   
Capital expenditures for property, plant and equipment(33.7) (105.3)
Capital expenditures related to 1031 commercial property transactions—
 (6.2)
Proceeds from disposal of property and other assets9.8
 11.4
Proceeds from disposals related to 1031 commercial property transactions6.9
 59.3
Payments for purchases of investments in affiliates and other investments(31.5) (36.0)
Proceeds from investments in affiliates and other investments3.9
 6.0
Change in restricted cash associated with 1031 transactions6.6
 16.2
Net cash used in investing activities(38.0) (54.6)
Cash Flows from Financing Activities:   
Proceeds from issuance of long-term debt145.5
 222.0
Payments of long-term debt and deferred financing costs(46.4) (191.1)
Borrowings (payments) on line-of-credit agreement, net9.8

(11.8)
Distribution to noncontrolling interests(0.2) (0.5)
Dividends paid(10.3) (8.8)
Proceeds from issuance (repurchase) of capital stock and other, net(4.1) 0.9
Net cash provided by financing activities94.3
 10.7
Cash and Cash Equivalents:   
Net increase in cash and cash equivalents11.1
 4.5
  Balance, beginning of period2.2
 1.3
  Balance, end of period$13.3
 $5.8
    
Other Cash Flow Information:   
Interest paid, net of capitalized interest$(15.1) $(22.1)
Income taxes paid$(4.0) $—
Noncash Investing and Financing Activities:   
Uncollected proceeds from disposal of equipment$1.9
 $—
Capital expenditures included in accounts payable and accrued expenses$3.2
 $7.7
Other Cash Flow Information:
Interest paid, net of capitalized interest$(6.2)$(7.0)
Income tax (payments)/refunds, net$0.1 $0.5 
Noncash Investing and Financing Activities:
Capital expenditures included in accounts payable and accrued and other liabilities5.5 2.6 
Reconciliation of cash, cash equivalents and restricted cash:
Beginning of the period:
Cash and cash equivalents$57.2 $15.2 
Restricted cash0.2 0.2 
Cash, cash equivalents and restricted cash$57.4 $15.4 
End of the period:
Cash and cash equivalents$32.0 $131.6 
Restricted cash0.2 6.1 
Cash, cash equivalents and restricted cash$32.2 $137.7 
See Notes to Condensed Consolidated Financial Statements.

5
4



ALEXANDER & BALDWIN, INC.
Condensed Consolidated Statements of EquityCONDENSED CONSOLIDATED STATEMENTS OF EQUITY
For the nine months endedSeptember 30, 2017Three Months Ended March 31, 2021 and 20162020
(In millions) (Unaudited)amounts in millions, except per share data; unaudited)
 Total Equity  
     Accumulated      Redeem-
  CommonOther      able
  StockCompre-  Non-   Non-
    StatedhensiveRetained Controlling   Controlling
  Shares Value Loss Earnings interest Total interest
Balance, January 1, 2016 48.9
 $1,151.7
 $(45.3) $117.2
 $3.5
 $1,227.1
 $11.6
Net income (loss) 

 

 

 (10.1) 0.2
 (9.9) 0.9
Other comprehensive income, net of tax 

 

 1.5
 

 
 1.5
 

Dividends paid on common stock ($0.18 per share) 

 

 

 (8.8) 
 (8.8) 

Distributions to noncontrolling interest 

 

 

 

 
 —
 (0.1)
Adjustments to redemption value of redeemable noncontrolling interest 

 

 

 0.8
 
 0.8
 (0.8)
Share-based compensation 

 3.1
 

 

 
 3.1
 

Shares issued or repurchased, net 0.1
 1.4
 

 (0.4) 
 1.0
 

Balance, September 30, 2016 49.0
 $1,156.2
 $(43.8) $98.7
 $3.7
 $1,214.8
 $11.6
 Total Equity  
     Accumulated      Redeem-
  CommonOther      able
  StockCompre-  Non-   Non-
    StatedhensiveRetained Controlling   Controlling
  Shares Value Loss Earnings interest Total interest
Balance, January 1, 2017 49.0
 $1,157.3
 $(43.2) $95.2
 $3.9
 $1,213.2
 $10.8
Net income 

 

 

 16.7
 0.5
 17.2
 1.2
Other comprehensive income, net of tax 

 

 2.2
 

 
 2.2
 

Dividends paid on common stock ($0.21 per share) 

 

 

 (10.3) 
 (10.3) 

Distributions to noncontrolling interest 

 

 

 

 (0.2) (0.2) 

Adjustments to redemption value of redeemable noncontrolling interest 

 

 

 1.2
 

 1.2
 (1.2)
Share-based compensation 

 3.4
 

 

 

 3.4
 

Shares issued or repurchased, net 0.2
 (0.2) 

 (3.4) 
 (3.6) 

Balance, September 30, 2017 49.2
 $1,160.5
 $(41.0) $99.4
 $4.2
 $1,223.1
 $10.8
Total Equity
Common StockAccumulated
 Other
 Compre-
hensive Income (Loss)		(Distribution
in Excess
of Accumulated Earnings)
Earnings Surplus		Non-Controlling
Interest		TotalRedeem-
able
Non-
Controlling
Interest
SharesStated Value
Balance, January 1, 202072.3 $1,800.1 $(48.8)$(626.2)$3.6 $1,128.7 $6.3 
Cumulative impact of adoption of ASC 326— — — (4.0)(0.1)(4.1)— 
Net income (loss)— — — 6.2 (0.5)5.7 (0.1)
Other comprehensive income (loss), net of tax— — (6.3)— — (6.3)— 
Dividend on common stock ($0.19 per share)— — — (13.8)— (13.8)— 
Share-based compensation— 1.5 — — — 1.5 — 
Shares issued or repurchased, net0 0 — (0.9)— (0.9)— 
Balance, March 31, 202072.3 $1,801.6 $(55.1)$(638.7)$3.0 $1,110.8 $6.2 
Total Equity
Common StockAccumulated
 Other
 Compre-
hensive Income (Loss)		(Distribution
in Excess
of Accumulated Earnings)
Earnings Surplus		Non-Controlling
Interest		TotalRedeem-
able
Non-
Controlling
Interest
SharesStated Value
Balance, January 1, 202172.4 $1,805.5 $(60.0)$(649.4)$0 $1,096.1 $6.5 
Net income (loss)— — — 9.9 0 9.9 0 
Other comprehensive income (loss), net of tax— — 4.0 — — 4.0 — 
Dividend on common stock ($0.15 per share)— — — (10.9)— (10.9)— 
Share-based compensation— 1.4 — — — 1.4 — 
Shares issued or repurchased, net0.1 (0.7)— 0 — (0.7)— 
Balance, March 31, 202172.5 $1,806.2 $(56.0)$(650.4)$0 $1,099.8 $6.5 
See Notes to Condensed Consolidated Financial Statements.

Statements
5
6



Alexander & Baldwin, Inc.
Notes to Condensed Consolidated Financial Statements
(Unaudited)(unaudited)
1.DESCRIPTION OF BUSINESS
Business Overview
1.    BACKGROUND AND BASIS OF PRESENTATION
Description of Business:Alexander & Baldwin, Inc. ("A&B" or the "Company") is headquartered in Honolulu and operates three segments: Commercial Real Estate (formerly Leasing); Land Operations (formerly Real Estate Development and Sales and Agribusiness); and Materials & Construction.
On July 10, 2017, the Company’s board of directors unanimously approved a plan for the Company to be subject to tax as a real estate investment trust (a “REIT”("REIT") for U.S. federal income tax purposes commencing with the Company’s taxable year ending Decemberheadquartered in Honolulu, Hawai‘i. The Company operates in 3 segments: Commercial Real Estate ("CRE"); Land Operations; and Materials & Construction ("M&C"). As of March 31, 2017 (the “REIT Election”).
Although2021, the Company began operatingowns a portfolio of commercial real estate improved properties in compliance with the requirements for qualificationHawai‘i consisting of 22 retail centers, 10 industrial assets and taxation4 office properties, representing a total of 3.9 million square feet of gross leasable area, as well as a REIT (the “REIT requirements”) for the taxable year ending December 31, 2017, the Company intendsportfolio of ground leases in Hawai‘i representing 152.0 acres. Throughout this quarterly report on Form 10-Q, references to complete a merger that will facilitate the Company’s ongoing compliance with the REIT requirements by ensuring that certain standard REIT ownership limitations"we," "our," "us" and transfer restrictions apply"our Company" refer to the Company’s capital stock.
Pursuant to the merger agreement entered into on July 10, 2017 among the Company, Alexander & Baldwin, REIT Holdings, Inc., a Hawaii corporation and a direct, wholly owned subsidiarytogether with its consolidated subsidiaries.
Basis of the Company (“A&B REIT Holdings”), and A&B REIT Merger Corporation, a Hawaii corporation and a direct, wholly owned subsidiary of A&B REIT Holdings (“Merger Sub”), Merger Sub will be merged with and into the Company, with the Company continuing as the surviving corporation. As a result of the merger, A&B REIT Holdings will replace the Company as the Hawaii-based, publicly held corporation through which the Company’s operations are now conducted, and promptly following the merger A&B REIT Holdings will be renamed “Alexander & Baldwin, Inc.”
During the third quarter of 2017, A&B REIT Holdings filed a registration statement on Form S-4 with the Securities and Exchange Commission (“SEC”), which included a preliminary proxy statement/prospectus that provides information regarding the REIT Election, the proposed merger and the special meeting at which the Company’s shareholders were given the opportunity to vote on the holding company merger proposal. The special meeting was held on October 27, 2017, during which A&B shareholders approved the holding company merger proposal pursuant to the registration statement.

Business Segments
Commercial Real Estate: The Commercial Real Estate segment owns, operates and manages retail, office and industrial properties in Hawaii and on the mainland. The Commercial Real Estate segment also leases urban land in Hawaii to third-party lessees.
Land Operations: Primary activities of the Land Operations segment include planning, zoning, financing, constructing, purchasing, managing, selling, and investing in real property; renewable energy; and diversified agribusiness activities. The Land Operations segment also provides general trucking services, equipment maintenance and repair services, and generates and sells electricity to the extent not used elsewhere in the Company's operations. In December 2016, the Company's sugar plantation on Maui, Hawaiian Commercial & Sugar Company ("HC&S") completed its final harvest and ceased operations (the "Cessation"). See Note 14, "Cessation of Sugar Operations" for further discussion regarding the Cessation and the related costs associated with such exit and disposal activities.
Materials & Construction: The Materials & Construction segment, which primarily includes the results of Grace Pacific ("Grace"), performs asphalt paving as prime contractor and subcontractor; imports and sells liquid asphalt; mines, processes and sells rock and sand aggregate; produces and sells asphaltic concrete and ready-mix concrete; provides and sells various construction- and traffic-control-related products; and manufactures and sells precast concrete products.

6


2.BASIS OF PRESENTATION
Presentation: The interim condensed consolidated financial statements are unaudited. Because of the nature of the Company’sCompany'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, 20162020 and 2015,2019, and the related consolidated statements of operations, comprehensive income (loss), equity,cash flows and cash flowsequity for each of the three years in the period ended December 31, 20162020, 2019 and 2018, respectively, and the notes thereto included in the Company’sCompany's Annual Report filed on Form 10-K for the year ended December 31, 20162020 ("20162020 Form 10-K"), and other subsequent filings with the U.S. Securities and Exchange Commission.Commission ("SEC").
Reclassifications: Prior year financial statementCertain amounts arepresented in the prior periods have been reclassified as necessary to conform to the current year presentation including presentationdue to a change in reportable segments in the current period resulting from a reorganization of a component of the Company historically included in the results of discontinued operations and reportable operating segments. There was no impact on net income, retained earnings or cash flows as a resultLand Operations that will now be included in the results of the reclassifications. See Note 17 "Discontinued Operations" andMaterials & Construction. Refer to Note 18 "Segment Results" in the accompanying condensed consolidated financial statements for additional information.
Rounding: Amounts in the condensed consolidated financial statements and notes are rounded to the nearest tenth of a million. Accordingly, a recalculation of some per-share amounts and percentages, if based on the reported data, may be slightly different.result in differences.
New Accounting Pronouncements:
2.    SUMMARY OF 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 2020 Form 10-K. There have not been any changes to the Company's significant accounting policies as described in the Company's 2020 Form 10-K.
Recently issued accounting pronouncements
In May 2014,March 2020, the Financial Accounting Standards Board (FASB)("FASB") issued Accounting Standards Update (ASU)("ASU") No. 2014-09, Revenue from Contracts with Customers (Topic 606)2020-04, Reference Rate Reform, (“ASU 2014-09”establishing ASC Topic 848, and amended the standard thereafter ("ASC 848") which. ASC 848 provides guidance for revenue recognition. ASU 2014-09 affects any entityoptional practical expedients and exceptions related to the impacts of reference rate reform that either enters intoaffect certain debt, leases, derivatives and other contracts with customersif certain criteria are met. The amendments apply only to transfer goodscontracts and hedging relationships that reference LIBOR or services or enters into contracts for the transfer of non-financial assets. ASU 2014-09 will supersede the revenue recognition requirements in FASB Accounting Standards Codification Topic 605, Revenue Recognition, and most industry-specific guidance. Under ASU 2014-09, revenue is recognized when a customer obtains control of promised goods or services in an amount that reflects the consideration the entity expectsanother reference rate expected to be entitleddiscontinued due to in exchange for those goods or services. ASU 2014-09 provides a five-step analysis of transactions to determine whenreference rate reform. These amendments are effective immediately and how revenue is recognized including (i) identify the contract(s) with a customer, (ii) identify the performance obligations in the contract(s), (iii) determine the transaction price, (iv) allocate the transaction price to the performance obligations in the contract(s), and (v) recognize revenue when, or as, the entity satisfies a performance obligation. In addition, ASU 2014-09 requires disclosure of the nature, amount, timing, and uncertainty of revenue and cash flows arising from contracts with customers.
In August 2015, the FASB issued ASU No. 2015-14, Revenue from Contracts with Customers (Topic 606): Deferral of the Effective Date, deferring the effective date of this standard. As a result, ASU 2014-09 and related amendments will be effective for the Company for its fiscal year beginning January 1, 2018, including interim periods within that fiscal year. Early adoption is permitted, but not before August 1, 2017, the original effective date of ASU 2014-09.
In March, April, May, and December 2016, the FASB issued ASU No. 2016-08, Revenue from Contracts with Customers (Topic 606): Principal Versus Agent Consideration (Reporting Revenue Gross Versus Net), ASU No. 2016-10, Revenue from Contracts with Customers (Topic 606): Identifying Performance Obligations and Licensing, and ASU No. 2016-12, Revenue from Contracts with Customers (Topic 606): Narrow-Scope Improvements and Practical Expedients, and ASU No. 2016-20, Technical Corrections and Improvements to Topic 606, Revenue from Contracts with Customers, respectively (collectively, the “Amendments”). The Amendments serve to clarify certain aspects of and have the same effective date as ASU 2014-09.
The Company is completing its evaluation of the impact of adopting ASU 2014-09 and the related Amendments (collectively, “Topic 606”) on its consolidated financial statements and disclosures, internal controls and accounting policies. Topic 606 permits two methods of adoption: retrospectively to each prior reporting period presented, or retrospectively with the cumulative effect of initially applying the guidance recognized at the date of initial application (the “Modified Retrospective Method”). The Company will adopt Topic 606 on January 1, 2018 and intends to apply the Modified Retrospective Method of transition. The Company expects to provide expanded disclosures regarding our revenues from contracts with customers. The Company will continue to monitor and assess the impact of changes to Topic 606 and interpretations as they become available.

7


In February 2016, the FASB issued ASU No. 2016-02, Leases (Topic 842) ("ASU 2016-02"). ASU 2016-02 requires the identification of arrangements that should be accounted for as leases by lessees. In general, lease arrangements exceeding a twelve month term must now be recognized as assets and liabilities on the balance sheet of the lessee. Under ASU 2016-02, a right-of-use asset and lease obligation will be recorded for all leases, whether operating or financing, while the income statement will reflect lease expense for operating leases and amortization/interest expense for financing leases. The balance sheet amount recorded for existing leases at the date of adoption of ASU 2016-02 must be calculated using the applicable incremental borrowing rate at the date of adoption. In addition, ASU 2016-02 requires the use of the modified retrospective method, which will require adjustment to all comparative periods presented in the consolidated financial statements. ASU 2016-02 is effective for financial statements issued for fiscal years beginning after December 15, 2018. The Company is currently assessing the impact that adopting this new accounting standard will have on its consolidated financial statements and footnote disclosures.
In August 2016, the FASB issued ASU No. 2016-15, Statement of Cash Flows (Topic 230) ("ASU 2016-15"). ASU 2016-15 is an update that addresses eight specific cash flow issues with the objective of reducing the existing diversity in practice of cash receipts and cash payments presentation and classification in the statement of cash flows. ASU 2016-15 is effective for financial statements issued for fiscal years beginning after December 15, 2017. The Company is currently assessing the impact that adopting this new accounting standard will have on its consolidated financial statements and footnote disclosures.
In November 2016, the FASB issued ASU No. 2016-18, Statement of Cash Flows (Topic 230): Restricted Cash ("ASU 2016-18"). ASU 2016-18 will require entities to show the changes on the total cash, cash equivalents, restricted cash and restricted cash equivalents in the statement of cash flows. As a result, entities will no longer present transfers between these items on the statement of cash flows. The guidance will be applied retrospectively and is effective for fiscal years beginning after December 15, 2017, including interim periods within those fiscal years. Early adoption is permitted. The Company is currently evaluating the impact of adopting this new accounting standard on the Company’s consolidated financial statements and footnote disclosures.
In January 2017, the FASB issued ASU No. 2017-01, Clarifying the Definition of a Business ("ASU 2017-01"). ASU 2017-01 provides guidance regarding the definition of a business with the objective of providing guidance to assist entities with evaluating whether transactions should be accounted for as acquisitions (or disposals) of assets or businesses. ASU 2017-01 is effective for fiscal years beginning after December 15, 2017, including interim periods within those years. ASU 2017-01 shouldmay be applied prospectively to contract modifications made and early adoption is permitted. The new guidance will result in many real estate transactions being classified as an asset acquisition and transaction costs being capitalized. The Company elected to early adopt FASB ASU No. 2017-01 in the second quarter of fiscal year 2017. The adoption of this standard didhedging relationships entered into or evaluated on or before December 31, 2022. Reference rate reform has not havehad a material impact on any of the Company’sCompany's existing contracts. Therefore, the Company has not elected to apply any of the optional practical expedients and exceptions under ASC 848 as of the current date. The Company will assess future changes in its contracts and the impact of electing to apply the optional practical expedients and exceptions provided by ASC 848 as they occur, but does not expect their application will have a material effect on its financial position or results of operation.

In January 2017, the FASB issued ASU No. 2017-04, Simplifying the Test for Goodwill Impairment ("ASU 2017-04"). ASU 2017-04 removes Step 2 of the goodwill impairment test, which requires a hypothetical purchase price allocation. A goodwill impairment will now be the amount by which a reporting unit's carrying value exceeds fair value, not to exceed the carrying amount of goodwill. ASU 2017-04 is effective for fiscal years or interim periods beginning after December 15, 2019. ASU 2017-04 should be applied prospectively and early adoption is permitted. The Company is currently assessing the impact that adopting this new accounting standard will have on its consolidated financial statements and footnote disclosures.

In March 2017, the FASB issued ASU No. 2017-07, Improving the Presentation of Net Periodic Pension Cost and Net Periodic Postretirement Benefit Cost ("ASU 2017-07"). ASU 2017-07 provides that entities will present the service cost component of net periodic benefit cost in the same income statement line item(s) as other employee compensation costs arising from services rendered during the period. Only the service cost component will be eligible for capitalization in assets. In addition, entities will present the other components of net periodic benefit cost separately from the line item(s) that includes the service cost and outside of any subtotal of operating income, if one is presented. These components will not be eligible for capitalization in assets. ASU 2017-07 is effective for fiscal years or interim periods beginning after December 15, 2017 and early adoption is permitted. The Company is currently assessing the impact that adopting this new accounting standard will have on its consolidated financial statements and footnote disclosures.

In May 2017, the FASB issued ASU No. 2017-09, Compensation - Stock Compensation (Topic 718), Scope of Modification Accounting (“ASU 2017-09”). ASU 2017-09 clarifies when changes to the terms or conditions of a shared-based payment award must be accounted for as modifications. Entities will apply the modification accounting guidance if the value, vesting conditions or classification of the award changes. ASU 2017-09 is effective for financial statements issued for fiscal years beginning after December 15, 2017 and early adoption is permitted. The Company is currently assessing the impact that adopting this new accounting standard will have on its consolidated financial statements and footnote disclosures.

operations.
8
7



Interest and other income (expense), net

In August 2017,Interest and other income (expense),net for the FASB issued ASU 2017-12, “Derivativesthree months ended March 31, 2021 and Hedging (Topic 815): Targeted Improvements to Accounting for Hedging Activities.”This ASU eliminates the requirement to separately measure and report hedge ineffectiveness and generally requires the entire change in the fair value of a hedging instrument to be presented in the same income statement line as the hedged item. This ASU is effective for fiscal years beginning after December 15, 2018, and interim periods within those fiscal years. Early application is permitted. The Company is currently evaluating the impact of this ASU.

3.COMMITMENTS AND CONTINGENCIES
Commitments, Guarantees and Contingencies:  Commitments and financial arrangements not recorded on the Company's condensed consolidated balance sheet, excluding lease commitments that are disclosed in Note 9 of the Company’s 2016 Form 10-K,2020 included the following (in millions) as of September 30, 2017::
Three Months Ended March 31,
20212020
Interest income$0.3 $0.6 
Pension and postretirement benefit (expense)(0.6)(0.7)
Other income (expense), net0 0.3 
Interest and other income (expense), net$(0.3)$0.2 

3.    INVESTMENTS IN AFFILIATES
Standby letters of credit(a)
$11.8
Bonds(b)
$409.7
(a) Consists of standby letters of credit, issued by the Company’s lenders under the Company’s revolving credit facilities, and relate primarily to the Company’s real estate activities. In the event the letters of credit are drawn upon, the Company would be obligated to reimburse the issuer of the letter of credit. None of the letters of credit have been drawn upon to date.
(b) Represents bonds related to construction and real estate activities in Hawaii. Approximately$387.1 million is related to construction bonds issued by third party sureties (bid, performance and payment bonds) and the remainder is related to commercial bonds issued by third party sureties (permit, subdivision, license and notary bonds). In the event the bonds are drawn upon, the Company would be obligated to reimburse the surety that issued the bond. None of the bonds has been drawn upon to date.
Indemnity Agreements: For certain real estate joint ventures, the Company may be obligated under bond indemnities to complete construction of the real estate development if the joint venture does not perform. These indemnities are designed to protect the surety in exchange for the issuance of surety bonds that cover joint venture construction activities, such as project amenities, roads, utilities, and other infrastructure, at its joint ventures. Under the indemnities, the Company and its 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 maximum potential amount of aggregate future payments is a function of the amount covered by outstanding bonds at the time of default by the joint venture, reduced by the amount of work completed to date. The recorded amounts of the indemnity liabilities were not material individually or in the aggregate.
The Company is a guarantor of indebtedness for certain of its unconsolidated joint ventures' borrowings with third party lenders, relating to the repayment of construction loans and performance of construction for the underlying project. As of September 30, 2017, the Company's limited guarantees on indebtedness related to five of its unconsolidated joint ventures totaled $6.1 million. The Company has not incurred any significant historical losses related to guarantees on its joint venture indebtedness.
Other than the obligations described above and those described in the Company's 2016 Form 10-K, obligations of the Company’s non-consolidated 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: A&B owns 16,000 acres of watershed lands in East Maui. A&B also held four water licenses to another 30,000 acres owned by the State of Hawaii in East 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 conclusion by the BLNR of this contested case hearing on the request for the long-term lease, the BLNR has kept the existing permits on a holdover basis. Three parties filed a lawsuit on April 10, 2015 (the "4/10/15 Lawsuit") alleging that the BLNR has been renewing the revocable permits annually rather than keeping them in holdover status. The lawsuit asks 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 is being challenged by the three parties. In January 2016, the court ruled in the 4/10/15 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 court has allowed the parties to make an immediate appeal of this ruling. In May 2016, the Hawaii 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

9


exceed three years. The governor signed this bill into law as Act 126 in June 2016. Pursuant to Act 126, the first annual authorization of the existing holdover permits was sought and granted by the BLNR in December 2016.
In addition, on May 24, 2001, petitions were filed by a third party, requesting that the Commission on Water Resource Management of the State of Hawaii ("Water Commission") establish interim instream flow standards ("IIFS") in 27 East Maui streams that feed the Company's irrigation system. The Water Commission initially took action on the petitions in 2008 and 2010, but the petitioners requested a contested case hearing to challenge the Water Commission's decisions on certain petitions. The Water Commission denied the contested case hearing request, but the petitioners successfully appealed the denial to the Hawaii Intermediate Court of Appeals, which ordered the Water Commission to grant the request. The Commission then authorized the appointment of a hearings officer for the contested case hearing and expanded the scope of the contested case hearing to encompass all 27 petitions for amendment of the IIFS for East Maui streams in 23 hydrologic units. The evidentiary phase of the hearing before the Commission-appointed hearings officer was completed on April 2, 2015. On January 15, 2016, the Commission-appointed hearings officer issued his recommended decision on the petitions. The recommended decision would restore water to streams in 11 of the 23 hydrologic units. In March 2016, the hearings officer ordered a reopening of the contested case proceedings in light of the Company’s January 2016 announcement to cease sugar operations at HC&S by the end of the year and to transition to a new diversified agricultural model on the former sugar lands. In April 2016, the Company announced its commitment to fully and permanently restore the priority taro streams identified by the petitioners. Re-opened evidentiary hearings occurred in the first quarter of 2017 and a decision is pending. In August 2017, the hearings officer in the reopened evidentiary hearing issued his proposed decision. The Commission heard arguments on the proposed decision in October 2017.
HC&S also used water from four streams in Central Maui ("Na Wai Eha") to irrigate its agricultural lands in Central Maui.  Beginning in 2004, the Water Commission began proceedings to establish IIFS for the Na Wai Eha streams. Before the IIFS proceedings were concluded, the Water Commission designated Na Wai Eha as a surface water management area, meaning that all uses of water from these streams required water use permits issued by the Water Commission. Following contested case proceedings, the Water Commission established IIFS in 2010, but that decision was appealed, and the Hawaii Supreme Court remanded the case to the Water Commission for further proceedings. The parties to the IIFS contested case settled the case in 2014. Thereafter, proceedings for the issuance of water use permits commenced with over 100 applicants, including HC&S, vying for permits. While the water use permit proceedings were ongoing, A&B announced the cessation of sugar cane cultivation at the end of 2016.  This announcement triggered a re-opening and reconsideration of the 2014 IIFS decision. Reconsideration of the IIFS is taking place simultaneously with consideration of the applications for water use permits.
If the Company is not permitted to use sufficient quantities of stream waters, it would have a material adverse effect on the Company’s pursuit of a diversified agribusiness model in subsequent years and the value of the Company’s agricultural lands.
A&B is a party to, or may be contingently liable in connection with, other legal actions arising in the normal conduct of its businesses, the outcomes of which, in the opinion of management after consultation with counsel, would not have a material effect on A&B’s condensed consolidated financial statements as a whole.

10


4.EARNINGS PER SHARE ("EPS")
The following table provides a reconciliation of income from continuing operations to income from continuing operations available to A&B shareholders (in millions):
 Quarter Ended Nine Months Ended
 September 30, September 30,
 2017 2016 2017 2016
Income from continuing operations$7.4
 $12.2
 $16.0
 $19.1
Less: Income attributable to noncontrolling interest(0.5) (0.5) (1.7) (1.1)
Income from continuing operations attributable to A&B shareholders, net of income taxes6.9
 11.7
 14.3
 18.0
Undistributed earnings allocated to redeemable noncontrolling interest0.5
 0.4
 1.2
 0.9
Income from continuing operations available to A&B shareholders, net of income taxes7.4
 12.1
 15.5
 18.9
Income (loss) from discontinued operations available to A&B shareholders, net of income taxes(0.8) (13.6) 2.4
 (28.1)
Net income (loss) available to A&B shareholders$6.6
 $(1.5) $17.9
 $(9.2)
The number of shares used to compute basic and diluted earnings per share is as follows (in millions):
 Quarter Ended Nine Months Ended
 September 30, September 30,
 2017 2016 2017 2016
Denominator for basic EPS – weighted-average shares outstanding49.2
 49.0
 49.1
 49.0
Effect of dilutive securities: 
  
    
Non-participating stock options and restricted stock unit awards0.4
 0.4
 0.5
 0.4
Denominator for diluted EPS – weighted-average shares outstanding49.6
 49.4
 49.6
 49.4
Basic earnings per share is computed by dividing net earnings allocated to common shares by the weighted-average number of common shares outstanding during the period. Diluted earnings per share is computed by dividing net earnings allocated to common shares by the weighted-average number of common shares outstanding adjusted by the number of additional shares, if any, that would have been outstanding had the potentially dilutive common shares been issued. Potentially dilutive shares of common stock include non-qualified stock options and restricted stock units.
There were no anti-dilutive securities outstanding during the quarter and nine months ended September 30, 2017. During the quarter and nine months ended September 30, 2016, anti-dilutive securities totaled 0.4 million shares.
5.FAIR VALUE OF FINANCIAL INSTRUMENTS
The fair values of receivables and short-term borrowings approximate their carrying values due to the short-term nature of the instruments. The Company’s cash and cash equivalents, consisting principally of cash on deposit, may from time to time include short-term money market funds. The fair values of these money market funds, based on market prices (Level 2), approximate their carrying values due to their short-maturities. The carrying amount and fair value of the Company’s long-term debt at September 30, 2017 was $625.8 million and $642.0 million, respectively, and $515.1 million and $529.3 million at December 31, 2016, respectively. The fair value of long-term 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 (Level 2).

11


6.INVENTORIES
Materials & Construction segment inventory, including materials and supplies, are stated at the lower of cost (principally average cost, first-in, first-out basis) or market value. Sugar inventories are stated at the lower of cost (first-in, first-out basis) or market value.
Inventories at September 30, 2017 and December 31, 2016 were as follows (in millions):
 September 30, 2017 December 31, 2016
Sugar inventories$—
 $17.5
Asphalt10.1
 7.4
Processed rock, Portland cement, and sand13.3
 12.6
Work in progress3.1
 3.0
Construction-related retail merchandise2.0
 1.7
Parts, materials and supplies inventories1.6
 1.1
Total$30.1
 $43.3

7.SHARE-BASED PAYMENT AWARDS
The time-based restricted stock units vest ratably over 3 years and the performance share units cliff vest over 3 years, provided that the total shareholder return of the Company’s common stock over the relevant period meets or exceeds pre-defined levels of relative total shareholder returns of the Standard & Poor’s MidCap 400 Index and the Dow Jones U.S. Real Estate Index.

The following table summarizes the Company's stock option activity during 2017 (in thousands, except weighted average exercise price and weighted average contractual life):
 2012 Plan Weighted-
Average
Exercise
Price		 Weighted-
Average
Contractual
Life		 Aggregate
Intrinsic
Value
Outstanding, January 1, 2017903.5
 $17.78
    
Exercised(230.9) $16.45
    
Outstanding, September 30, 2017672.6
 $18.24
 3.0 years $18,947
Vested or expected to vest672.6
 $18.24
 3.0 years $18,947
Exercisable, September 30, 2017672.6
 $18.24
 3.0 years $18,947
The following table summarizes 2017 non-vested restricted stock unit activity (in thousands, except weighted-average grant-date fair value amounts):
 2012 Plan
Restricted
Stock Units
Weighted-
Average
Grant-date
Fair Value
Outstanding, January 1, 2017293.5
 $33.81
Granted139.1
 $37.41
Vested(96.3) $37.20
Canceled(17.4) $35.03
Outstanding, September 30, 2017318.9
 $34.29

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The fair value of the Company’s time-based awards is determined using the Company's stock price on the date of grant. The fair value of the Company's market-based awards is estimated using the Company's stock price on the date of grant and the probability of vesting using a Monte Carlo simulation with the following weighted-average assumptions:
 2017 Grants 2016 Grants
Volatility of A&B common stock24.1% 26.3%
Average volatility of peer companies25.6% 27.7%
Risk-free interest rate1.6% 1.1%
A summary of compensation cost related to share-based payments is as follows (in millions):
 Quarter Ended Nine Months Ended
 September 30, September 30,
 2017 2016 2017 2016
Share-based expense:       
Time-based and market-based restricted stock units$1.2
 $1.0
 $3.4
 $3.1
Total recognized tax benefit(0.5) (0.5) (1.3) (1.1)
Share-based expense (net of tax)$0.7
 $0.5
 $2.1
 $2.0
8.RELATED PARTY TRANSACTIONS
Construction Contracts and Material Sales. The Company entered into contracts in the ordinary course of business, as a supplier, with affiliates that are members in entities in which the Company also is a member. Revenues earned from transactions with affiliates totaled approximately $5.5 million and $1.8 million for the quarters ended September 30, 2017 and 2016, respectively. Revenues earned from transactions with affiliates totaled approximately $15.4 million and $6.0 million for the nine months ended September 30, 2017 and 2016, respectively. Receivables from these affiliates were $4.0 million and $2.1 million at September 30, 2017 and December 31, 2016, respectively. Amounts due to these affiliates were $0.5 million and $0.2 million at September 30, 2017 and December 31, 2016, respectively.
Commercial Real Estate. The Company entered into contracts in the ordinary course of business, as a lessor of property, with unconsolidated affiliates in which the Company has an interest, as well as with certain entities that are owned by a director of the Company. Revenues earned from these transactions were $1.4 million and $4.0 million for the quarter and nine months ended September 30, 2017, respectively, and immaterial for the quarter and nine months ended September 30, 2016. Receivables from these affiliates were immaterial as of September 30, 2017 and December 31, 2016.
During the quarters ended September 30, 2017 and 2016, the Company recorded developer fee revenues of approximately $0.5 million and $0.2 million related to management and administrative services provided to certain unconsolidated investments in affiliates. Developer fee revenues recorded for the nine months ended September 30, 2017 and 2016 were $2.1 million and $0.7 million, respectively. Receivables from these affiliates were immaterial as of September 30, 2017 and December 31, 2016.

13


9.EMPLOYEE BENEFIT PLANS
The components of net periodic benefit cost recorded for the quarters ended September 30, 2017 and 2016 were as follows (in millions):
 Pension Benefits Post-retirement Benefits
 2017 2016 2017 2016
Service cost$0.7
 $0.8
 $—
 $—
Interest cost2.0
 2.2
 0.1
 0.2
Expected return on plan assets(2.3) (2.5) —
 —
Amortization of net loss included in net periodic pension cost1.0
 1.9
 (0.1) —
Amortization of prior service credit included in net periodic pension cost(0.2) (0.3) —
 —
Curtailment gain—
 (0.2) —
 —
Settlement loss1.4
 —
 —
 —
Net periodic benefit cost$2.6
 $1.9
 $—
 $0.2
The components of net periodic benefit cost recorded for the nine months ended September 30, 2017 and 2016 were as follows (in millions):
 Pension Benefits Post-retirement Benefits
 2017 2016 2017 2016
Service cost$2.2
 $2.4
 $0.1
 $0.1
Interest cost6.2
 6.7
 0.3
 0.4
Expected return on plan assets(7.1) (7.5) —
 —
Amortization of net loss included in net periodic pension cost3.3
 5.5
 —
 0.1
Amortization of prior service credit included in net periodic pension cost(0.7) (0.8) —
 —
Curtailment gain(0.3) (0.7) —
 —
Settlement loss1.4
 —
 —
 —
Net periodic benefit cost$5.0
 $5.6
 $0.4
 $0.6
10.ACQUISITIONS
Manoa Marketplace Acquisition. The Company applies the provisions of FASB ASC Topic No. 805, Business Combinations, ("ASC 805") to acquisitions that constitute a business, as defined. Under ASC 805, assets acquired and liabilities assumed are recorded at fair value. The excess of the purchase price over the net fair value of assets acquired and liabilities assumed is recorded as goodwill. The fair values of assets acquired and liabilities assumed are determined through the market, income or cost approaches, and the valuation approach is generally based on the specific characteristics of the asset or liability. Under the market approach, value is estimated using information from transactions in which other participants in the market have paid for reasonably similar assets that have been sold within a reasonable period from the valuation date. Adjustments are made to compensate for differences between reasonably similar assets and the item being valued. Under the income approach, the future cash flows expected to be received over the life of the asset, taking into account a variety of factors, such as long-term growth rates and the amount and timing of cash flows, are discounted to present value using a rate of return that accounts for the time value of money and investment risk factors. Under the cost approach, the Company estimates the cost to replace the asset with a new asset taking into consideration a variety of factors such as age, physical condition, functional obsolescence and economic obsolescence. The fair value of liabilities assumed is calculated as the net present value of estimated payments using prevailing market interest rates for liabilities with similar credit risk and terms.
On January 29, 2016, the Company consummated the purchase of the leasehold and leased fee interests in Manoa Marketplace, a multi-tenant neighborhood shopping center in Honolulu for $82.4 million through a 1031 transaction.

14


The allocation of purchase price to assets acquired and liabilities assumed is as follows (in millions):
Assets acquired: 
Land$40.5
Building36.8
In-place leases7.0
Favorable leases1.3
Total assets acquired85.6
  
Total liabilities assumed3.2
  
Net assets acquired$82.4
The finite-lived intangible assets related to in-place leases and favorable leases are amortized over their respective lease terms. As of the acquisition date, the weighted-average remaining lives of the in-place leases and favorable leases were approximately 5 and 3 years, respectively.
In connection with the Manoa Marketplace transaction, the Company incurred approximately $1.1 million of acquisition-related expenses during the nine months ended September 30, 2016. The costs are included in selling, general and administrative costs in the accompanying condensed consolidated statements of operations and are reported in the Commercial Real Estate segment for segment reporting purposes.
11.ACCUMULATED OTHER COMPREHENSIVE LOSS
The changes in accumulated other comprehensive loss by component for the nine months ended September 30, 2017 were as follows (in millions, net of tax):
 Employee Benefit Plans Interest Rate Swap Total
Beginning balance, January 1, 2017$(45.0) $1.8
 $(43.2)
Unrealized interest rate hedging loss, net of taxes of $0.3—
 (0.5) (0.5)
Amounts reclassified from accumulated other comprehensive loss, net of taxes of $1.5 and $0.2 for employee benefit plans and interest rate swap, respectively2.5
 0.2
 2.7
Ending balance, September 30, 2017$(42.5) $1.5
 $(41.0)
The reclassifications of other comprehensive income components out of accumulated other comprehensive loss for the quarters and nine months ended September 30, 2017 and 2016 were as follows (in millions):
  Quarter Ended September 30, Nine Months Ended September 30,
  2017 2016 2017 2016
Reclassification adjustment for interest expense included in net income (loss) $0.1
 $0.2
 $0.4
 $0.2
Amortization of defined benefit pension items reclassified to net periodic pension cost:   —
   —
Prior service credit (0.2) (0.3) (0.7) (0.8)
Net loss 1.0
 1.9
 3.3
 5.6
Settlement loss 1.4
 —
 1.4
 —
Total reclassifications before income tax 2.3
 1.8
 4.4
 5.0
Income taxes related to reclassifications of other comprehensive income (0.9) (0.8) (1.7) (1.9)
Total reclassifications of other comprehensive income components, net of tax $1.4
 $1.0
 $2.7
 $3.1

15


12.INCOME TAXES
The Company's effective tax rate was higher for the nine months ended September 30, 2017 compared to the same period in 2016 primarily due to the 2016 recognition of non-refundable federal tax credits related to the Company’s investment in two photovoltaic facilities, discussed below.
In 2016, the Company invested $15.4 million in Waihonu Equity Holdings, LLC ("Waihonu"), an entity that operates two photovoltaic facilities with a combined capacity of 6.5 megawatts in Mililani, Oahu. The Company accounts for its investment in Waihonu under the equity method. The investment return from the Company's investment in Waihonu is principally composed of non-refundable federal and refundable state tax credits. The federal tax credits are accounted for using the flow through method, which reduces the provision for income taxes in the year that the federal tax credits first become available. During 2016, the Company recognized income tax benefits of approximately $8.7 million related to the non-refundable tax credits, $2.9 million related to the refundable state tax credits in Income Tax Receivable, as well as a corresponding reduction to the carrying amount of its investment in Waihonu, recorded in Investments in Affiliates in the accompanying condensed consolidated balance sheets.
For the quarter and nine months ended September 30, 2017, the Company recorded reductions to the carrying value of its Waihonu and KIUC Renewable Solutions Two ("KRS II") investments of $0.4 million and $2.6 million, respectively, in Reduction in Solar Investments, net in the accompanying condensed consolidated statements of operations. For the quarter and nine months ended September 30, 2016, the Company recorded reductions to the carrying value of its Waihonu and KRS II investments of $0.2 million and $9.7 million, respectively, in Reduction in Solar Investments, net in the accompanying condensed consolidated statements of operations.
The Company recognizes accrued interest on income taxes in income tax expense. As of September 30, 2017, accrued interest was not material. As of September 30, 2017, the Company has not identified any material unrecognized tax positions.
13.NOTES PAYABLE AND LONG-TERM DEBT
Revolving Credit Facility Amendment: On September 15, 2017, the Company entered into a Second Amended and Restated Credit Agreement ("A&B Revolver") with Bank of America N.A., as administrative agent, First Hawaiian Bank, and other lenders party thereto, which amended and restated its existing $350 million committed revolving credit facility ("Revolving Credit Facility"). The A&B Revolver increased the total revolving commitments to $450 million, extended the term of the Revolving Credit Facility to September 15, 2022, amended certain covenants (see below), and reduced the interest rates and fees charged under the Revolving Credit Facility. All other terms of the Revolving Credit Facility remain substantially unchanged.
Private Shelf Facility Amendment: On September 15, 2017, the Company entered into an amendment ("Pru Amendment") of its Second Amended and Restated Note Purchase and Private Shelf Agreement, dated as of December 10, 2015, with Prudential Investment Management, Inc. and certain affiliates (individually and collectively with “Prudential”), which amended certain covenants (see below). Additionally, the Pru Amendment included a provision for a contingent incremental interest rate increase of 20 basis points on all outstanding notes unless, following the Company's planned earnings and profits purge, the maximum ratio of debt to total adjusted asset value is equal to or less than 0.35 to 1.00 with respect to any fiscal quarter ending on or before September 30, 2018. The contingent interest rate adjustment, if triggered, will continue until such time that the Company's ratio of debt to total adjusted asset value declines to 0.35 to 1.00 or below. If the contingent interest rate adjustment is not triggered on September 30, 2018, or if triggered, but subsequently the Company's ratio of debt to total adjusted asset value declines to 0.35 to 1.00 or below, the contingent interest rate adjustment shall have no further force or effect.
Changes to Revolver Amendment and Pru Amendment Covenants: The principal amendments under the A&B Revolver and the Pru Amendment are as follows:
An increase in the maximum ratio of debt to total adjusted asset value from 0.50:1.0 to 0.60:1.0.
An increase in the aggregate maximum amount of priority debt at any time from 20 percent to 25 percent.
Allows the Company to consummate the holding company merger to adopt certain governance changes and facilitate the Company's ongoing compliance with REIT requirements.
Sets the minimum shareholders' equity amount to be $850.6 million plus 75 percent of the net proceeds received from equity issuances, less non-recurring costs related to the REIT conversion, among other additions and subtractions.
Allows for the payment of minimum dividends required to maintain REIT status and other dividends in any amount so long as no event of default shall then exist or would exist after giving effect to such dividends.

16



New Unsecured Term Debt - Rate Locks: On October 10, 2017, the Company entered into a rate lock commitment to draw $50 million under its Second Amended and Restated Note Purchase and Private Shelf Agreement, as amended, with Prudential (“Prudential Shelf Facility”). Under the commitment, the Company will draw $50 million on November 21, 2017 and will use the proceeds for general corporate purposes. The note bears interest at 4.04 percent and matures on November 21, 2026. Interest only is paid semi-annually and the principal balance is due at maturity.
On October 30, 2017, the Company entered into a second rate lock commitment to draw $25 million under its Prudential Shelf Facility. Under the commitment, the Company will draw $25 million on December 8, 2017 and will use the proceeds for general corporate purposes. The note bears interest at 4.16 percent and matures on December 8, 2028. Interest only is paid semi-annually and the principal balance is due at maturity.

At September 30, 2017 and December 31, 2016, notes payable and long-term debt consisted of the following (in millions):
 2017 2016
Revolving credit facilities:   
Wells Fargo GLP Revolver, matures in 2018 (a)—
 —
A&B Revolver, matures in 2022 ($283.0 million available) (b)155.2
 14.9
Term loans:   
6.38%, payable through 2017, secured by Midstate Hayes—
 8.2
1.85%, payable through 2017, unsecured0.5
 2.5
2.00%, payable through 2018, unsecured0.3
 0.8
3.31%, payable through 2018, unsecured1.5
 2.8
5.19%, payable through 2019, unsecured5.1
 6.5
LIBOR plus 2.00%, payable through 2019 (c)

9.4
 9.4
6.90%, payable through 2020, unsecured48.8
 65.0
LIBOR plus 1.00%, payable through 2021, secured by asphalt terminal (d)5.1
 6.1
3.15%, payable through 2021, second mortgage secured by Kailua Town Center III4.9
 —
LIBOR plus 1.50%, payable through 2021, secured by Kailua Town Center III (e)10.9
 11.2
5.53%, payable through 2024, unsecured28.5
 28.5
3.90%, payable through 2024, unsecured65.9
 68.1
4.15%, payable through 2024, secured by Pearl Highlands Center87.5
 88.8
5.55%, payable through 2026, unsecured46.0
 46.0
5.56%, payable through 2026, unsecured25.0
 25.0
4.35%, payable through 2026, unsecured22.0
 22.0
3.88%, payable through 2027, unsecured50.0
 50.0
LIBOR plus 1.35%, payable through 2029, secured by Manoa Marketplace (f)60.0
 60.0
Total debt (contractual)626.6
 515.8
Unamortized debt premium (discount)0.4
 0.5
Unamortized debt issuance costs(1.2) (1.2)
Total debt (carrying value)625.8
 515.1
Less current portion(41.6) (42.4)
Long-term debt$584.2
 $472.7
(a) Loan has a stated interest rate of LIBOR plus 1.50%.
(b) Loan has a stated interest rate of LIBOR plus 1.65%, based on pricing grid.
(c) Loan is secured by a letter of credit.
(d) Loan has a stated interest rate of LIBOR plus 1.00%, but is swapped through maturity to a 5.98% fixed rate.
(e) Loan has a stated interest rate of LIBOR plus 1.50%, but is swapped through maturity to a 5.95% fixed rate.
(f) Loan has a stated interest rate of LIBOR plus 1.35%, but is swapped through maturity to a 3.14% fixed rate.

17


14.CESSATION OF SUGAR OPERATIONS
A summary of the pre-tax costs and remaining costs associated with the Cessation is as follows (in millions):
  Nine Months Ended September 30, 2017 
Cumulative
Amount
Recognized
as of September 30, 2017
 
Remaining
to be
Recognized
 Total
Employee severance benefits and related costs $0.3
 $22.1
 $—
 $22.1
Asset write-offs and accelerated depreciation —
 71.3
 —
 71.3
Property removal, restoration and other exit-related costs 2.1
 9.2
 1.2
 10.4
Total Cessation-related costs $2.4
 $102.6
 $1.2
 $103.8
A rollforward of the Cessation-related liabilities during the nine months ended September 30, 2017 is as follows (in millions):

 Employee Severance Benefits and Related Costs 
Other Exit Costs1
 Total
Balance at December 31, 2016 $13.7
 $5.4
 $19.1
Expense 0.3
 2.1
 2.4
Cash payments (14.0) (2.5) (16.5)
Balance at September 30, 2017 $—
 $5.0
 $5.0
1Includes asset retirement obligations.
The Cessation-related liabilities were included in the accompanying condensed consolidated balance sheets as follows (in millions):
  Classification on Balance Sheet September 30, 2017 December 31, 2016
Employee severance benefits and related costs HC&S cessation-related liabilities $—
 $13.7
Other exit costs HC&S cessation-related liabilities 5.0
 5.4
Total Cessation-related liabilities   $5.0
 $19.1

18


15.INVESTMENTS IN AFFILIATES
The Company's investments in affiliates principally consist principally 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. A summary of combinedSummarized financial information related toof entities accounted for by the Company's equity method investmentson a combined basis for the quarters and ninethree months ended September 30, 2017March 31, 2021 and 20162020 is as follows (in millions):
Three Months Ended March 31,
20212020
Revenues$69.9 $52.0 
Operating costs and expenses63.0 39.9 
Gross Profit (Loss)$6.9 $12.1 
Income (Loss) from Continuing Operations1
$3.9 $7.6 
Net Income (Loss)1
$3.7 $7.6 
1 Includes earnings from equity method investments held by the investee.

4.    INVENTORIES
Inventories are stated at the lower of cost (principally first-in, first-out basis) or net realizable value. Inventories as of March 31, 2021 and December 31, 2020 were as follows (in millions):
March 31,December 31,
20212020
Asphalt$12.1 $4.2 
Processed rock and sand8.4 7.9 
Work in progress3.6 3.2 
Retail merchandise2.1 2.1 
Parts, materials and supplies inventories1.0 1.0 
Total$27.2 $18.4 

8
 Quarter Ended September 30, Nine Months Ended September 30,
 2017 2016 2017 2016
Revenues$52.4
 $46.4
 $136.6
 $142.5
Gross Profit$8.5
 $7.5
 $23.2
 $24.5
Income from Continuing Operations*$4.0
 $(0.2) $10.6
 $8.7
Net Income (Loss)*$3.8
 $(0.5) $10.2
 $8.1
* Includes earnings from equity method investments held by the investee.  

5.    FAIR VALUE MEASUREMENTS
16.DERIVATIVE INSTRUMENTS
The fair value of the Company's cash and cash equivalents, accounts receivable, net and short-term borrowings approximate their carrying values due to the short-term nature of the instruments.
The fair value of the Company's notes receivable approximates the carrying amount of $9.5 million as of March 31, 2021. The fair value and carrying amount of these notes was $11.5 million at December 31, 2020. 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 classified as a Level 3 measurement in the fair value hierarchy.
At March 31, 2021, the carrying amount of the Company's notes payable and other debt was $654.6 million and the corresponding fair value was $677.4 million. At December 31, 2020, the carrying amount of the Company's notes payable and other debt was $687.1 million, and the corresponding fair value was $704.1 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 (Level 3).
The Company records its interest rate swaps at fair value. The fair values of the Company's interest rate swaps (Level 2 measurements) 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 7 for fair value information regarding the Company's derivative instruments).
9

6.    NOTES PAYABLE AND OTHER DEBT
At March 31, 2021 and December 31, 2020, notes payable and total debt consisted of the following (dollars in millions):
Interest Rate (%)Maturity DatePrincipal Outstanding
March 31, 2021December 31, 2020
Secured:
Kailua Town Center(1)2021$9.7 $9.8 
Kailua Town Center #23.15%20214.4 4.5 
Heavy Equipment Financing(2)(2)2.8 3.2 
Laulani Village3.93%202461.1 61.3 
Pearl Highlands4.15%202480.9 81.4 
Manoa Marketplace(3)202957.5 57.9 
Subtotal$216.4 $218.1 
Unsecured:
Bank syndicated loan(4)2023$50.0 $50.0 
Series A Note5.53%202428.4 28.4 
Series J Note4.66%202510.0 10.0 
Series B Note5.55%202645.0 46.0 
Series C Note5.56%202622.0 22.0 
Series F Note4.35%202619.7 19.7 
Series H Note4.04%202650.0 50.0 
Series K Note4.81%202734.5 34.5 
Series G Note3.88%202729.6 29.6 
Series L Note4.89%202818.0 18.0 
Series I Note4.16%202825.0 25.0 
Term Loan 54.30%202925.0 25.0 
Subtotal$357.2 $358.2 
Revolving Credit Facilities:
GLP Asphalt revolving credit facility(5)2021$1.2 $0 
A&B Revolver(6)202280.0 111.0 
Subtotal$81.2 $111.0 
Total Debt (contractual)$654.8 $687.3 
Unamortized debt premium (discount)(0.2)(0.2)
Total debt (carrying value)$654.6 $687.1 
(1) Loan has a stated interest rate of LIBOR plus 1.50%, but is swapped through maturity to a 5.95% fixed rate.
(2) Loans have a weighted average stated interest rate of approximately 3.0% and stated maturity dates ranging from 2021 to 2024.
(3) Loan has a stated interest rate of LIBOR plus 1.35%, but is swapped through maturity to a 3.14% fixed rate.
(4) Loan has a stated interest rate of LIBOR plus 1.80%, based on a pricing grid, and its LIBOR component is swapped through maturity (total rate currently at 3.15% based on the spread calculated by the pricing grid).
(5) Loan has a stated interest rate of LIBOR plus 1.25%.
(6) Loan has a stated interest rate of LIBOR plus 1.85% based on a pricing grid.

7.    DERIVATIVE INSTRUMENTS
The Company is exposed to interest rate risk related to its floating ratevariable-rate interest debt. The Company balances its cost of debt and exposure to interest rates primarily through its mix of fixedfixed-rate and floating ratevariable-rate debt. From time to time, the Company may use interest rate swaps to manage its exposure to interest rate risk.
10

Cash Flow Hedges of Interest Rate Risk
During 2016, theThe Company entered into anhas 2 interest rate swap agreement with a notional amount of $60.0 million which was designated as a cash flow hedge. The Company structured the interest rate swap agreement to hedge the variability of future interest payments due to changes in interest rates with regards to the Company's long-term debt. A summary of the key terms related to the Company's outstanding cash flow hedge as of September 30, 2017 is as follows (dollars in millions):
    Notional Amount at Fair Value atClassification on
Effective DateMaturity DateInterest Rate September 30, 2017 September 30, 2017 December 31, 2016Balance Sheet
4/7/20168/1/20293.14% $60.0
 $2.4
 $2.8
Other assets
The Company assessed the effectiveness of the cash flow hedge at inception and will continue to do so on an ongoing basis. The effective portion of the changes in fair value of the cash flow hedge is recorded in accumulated other comprehensive loss and subsequently reclassified into interest expense as interest is incurred on the related-variable rate debt. When ineffectiveness exists, the ineffective portion of changes in fair value of the cash flow hedge is recognized in earnings in the period affected.
Non-designated Hedges
As of September 30, 2017, the Company has two interest rate swaps that have not beenagreements designated as cash flow hedges whose key terms are as follows (dollars in millions):

    Notional Amount at Fair Value atClassification on
Effective DateMaturity DateInterest Rate September 30, 2017 September 30, 2017 December 31, 2016Balance Sheet
1/1/20149/1/20215.95% $10.9
 $(1.1) $(1.3)Other non-current liabilities
6/18/20083/1/20215.98% $5.1
 $(0.3) $(0.5)Other non-current liabilities
Total   $16.0
 $(1.4) $(1.8) 
EffectiveMaturityFixed InterestNotional Amount atAsset (Liability) Fair Value atClassification on
DateDateRateMarch 31, 2021March 31, 2021December 31, 2020Balance Sheet
4/7/20168/1/20293.14%$57.5 $(1.6)$(4.8)Accrued and other liabilities
2/13/20202/27/20233.15%$50.0 $(1.1)$(1.3)Accrued and other liabilities


19


Liabilities related to the interest rate swap are presented within Accrued and other liabilities, and assets are presented within Prepaid expenses and other assets in the consolidated balance sheets. The changes in fair value of the cash flow hedge are recorded in Accumulated other comprehensive income (loss) and subsequently reclassified into interest expense as interest is incurred on the related variable-rate debt.
The following table represents the pre-tax effect of the derivative instruments in the Company's condensed consolidated statement of comprehensive income (loss) during the three months ended March 31, 2021 and 2020 (in millions):

  Quarter Ended September 30, Nine Months Ended September 30,
Derivatives in Designated Cash Flow Hedging Relationships: 2017 2016 2017 2016
Amount of (gain) loss recognized in OCI on derivatives (effective portion) $0.2
 $—
 $0.8
 $2.8
Amounts of (gain) loss reclassified from accumulated OCI into earnings under "interest expense" (ineffective portion and amount excluded from effectiveness testing) $(0.1) $(0.2) $(0.4) $(0.2)
20212020
Derivatives in Designated Cash Flow Hedging Relationships:
Amount of gain (loss) recognized in OCI on derivatives$3.1 $(6.9)
Impact of reclassification adjustment to interest expense included in Net Income (Loss)$0.3 $0 

As of March 31, 2021, the Company expects to reclassify $1.5 million of net gains (losses) on derivative instruments from accumulated other comprehensive income to earnings during the next 12 months.
Non-designated Hedges
As of March 31, 2021, the Company has 1 interest rate swap that has not been designated as a cash flow hedge whose key terms are as follows (dollars in millions):

EffectiveMaturityFixed InterestNotional Amount atAsset (Liability) Fair Value atClassification on
DateDateRateMarch 31, 2021March 31, 2021December 31, 2020Balance Sheet
1/1/20149/1/20215.95%$9.7 $(0.2)$(0.3)Accrued and other liabilities

The Company records gains or losses related to interest rate swaps that have not been designated as cash flow hedges in interest expenseInterest and other income (expense), net in its condensed consolidated statements of operations,operations. The Company recognized a gain of $0.1 million in the three months ended March 31, 2021 and a loss of $0.1 million in the amounts were immaterial during each of the quartersthree months ended September 30, 2017 and 2016.March 31, 2020 related to changes in fair value.
The Company measures all of its interest rate swaps at fair value. The fair values of the Company's interest rate swaps (Level 2) 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.
11
17.DISCONTINUED OPERATIONS

8.    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 March 31, 2021:
•Standby letters of credit issued by the Company's lenders under the Company's revolving credit facilities totaled $1.1 million as of March 31, 2021. These letters of credit primarily relate to the Company's workers' compensation plans and construction activities; if drawn upon the Company would be obligated to reimburse the issuer.
•Bonds related to the Company's construction and real estate activities totaled $250.7 million as of March 31, 2021. Approximately $231.4 million represents the face value of construction bonds issued by third party sureties (bid, performance and payment bonds), and the remainder is related to commercial bonds issued by third party sureties (permit, subdivision, license and notary bonds); 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 March 31, 2021, the Company's maximum remaining exposure, in the event of defaults on all existing contractual construction obligations, was approximately $46.5 million.
The Company also provides certain bond indemnities and guarantees of indebtedness for certain of its unconsolidated affiliates that it accounts for as equity method investments (e.g., real estate joint ventures).
•Bond indemnities are provided for the benefit of the surety in exchange for the issuance of surety bonds and cover joint venture construction activities (such as project amenities, roads, utilities, and other infrastructure). 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 complete construction of the joint ventures' construction projects if the joint venture does not perform. The maximum potential amount of aggregate future payments is a function of the amount covered by outstanding bonds at the time of default by the joint venture, reduced by the amount of work completed to date.
•Guarantees of indebtedness may be provided by the Company for the benefit of financial institutions providing credit to unconsolidated equity method investees. As of March 31, 2021, the Company had one arrangement with third party lenders that provided for a limited guarantee on any outstanding amounts related to an unconsolidated equity method investee's line of credit; related to borrowings on such line of credit by the equity method investee, there was NaN outstanding as of March 31, 2021.
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 also held 4 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 4 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. NaN 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 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 3 parties. In January 2016, HC&S completedthe 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.
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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 final harvestdecision, 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. No decision has yet been rendered by the Supreme Court of Hawai‘i.
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 4 East Maui water revocable permits for another one-year period through December 31, 2020; on November 13, 2020, the BLNR considered and approved a renewal of the four revocable permits for an additional year, through December 31, 2021.
On December 7, 2018, a contested case request filed by the Sierra Club (regarding the BLNR's November 2018 approval of the 2019 revocable permits) was denied by the BLNR. On January 7, 2019, Sierra Club filed a lawsuit in the circuit court of the first circuit in Hawai‘i against BLNR, A&B and EMI, seeking to invalidate the 2019 extension 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. The time to appeal has not yet run. The court is separately considering, but has not yet ruled upon, a lawsuit filed by the Sierra Club appealing the BLNR’s decision to deny them a contested case hearing on the 2021 revocable permits.
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.
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, the outcomes of which, in the opinion of management after consultation with counsel, 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.
9.    REVENUE AND CONTRACT BALANCES
The Company ceasedgenerates revenue through its sugar operations.Commercial Real Estate, Land Operations and Materials & Construction 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 Note10 for further discussion of lessor income recognition. The Land Operations and Materials & Construction segments generate 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
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and cash flows are affected by economic factors. Revenue by type for the three months ended March 31, 2021 and 2020 was as follows (in millions):
Three Months Ended March 31,
20212020
Revenues:
     Commercial Real Estate$39.9 $43.4 
     Land Operations:
Development sales revenue0 3.6 
Unimproved/other property sales revenue11.3 2.1 
Other operating revenue5.8 5.3 
Land Operations1
17.1 11.0 
     Materials & Construction1
24.0 26.4 
Total revenues$81.0 $80.8 
1As described elsewhere in this Form 10-Q, during the current year, the Company changed the composition of its reportable segments which caused reported amounts (i.e., revenue and operating profit) in the historical period to be reclassified from Land Operations to Materials & Construction. All comparable information for the historical periods has been restated to reflect the impact of these changes.

Timing of revenue recognition may differ from the timing of invoicing to customers. Certain construction contracts include retainage provisions that are customary in the industry (i.e., are not for financing purposes) and are included in Accounts receivable and contracts retention, net. The balances billed but not paid by customers pursuant to these provisions generally become due upon completion and acceptance of the project work or products by the customers. Within Prepaid and other assets, the Company records assets for "costs and estimated earnings in excess of billings on uncompleted contracts" which represent amounts earned and reimbursable under contracts, but have a conditional right for billing and payment, such as achievement of milestones or completion of the project. When events or conditions indicate that it is probable that the amounts outstanding become unbillable, the transaction price and associated contract asset is reduced. Within Accrued and other liabilities, the Company records liabilities for "billings in excess of costs and estimated earnings on uncompleted contracts" which represent billings to customers on contracts in advance of work performed, including advance payments negotiated as a contract condition. Generally, unearned project-related costs will be earned over the next twelve months.
The following table provides information about receivables, contract assets and contract liabilities from contracts with customers (in millions):

March 31, 2021December 31, 2020
Accounts receivable$30.7 $39.5 
Contracts retention5.8 7.3 
Allowances (credit losses and doubtful accounts)(3.3)(3.3)
Accounts receivable and retention, net$33.2 $43.5 
Costs and estimated earnings in excess of billings on uncompleted contracts$4.0 $2.3 
Billings in excess of costs and estimated earnings on uncompleted contracts$5.4 $8.5 
Variable consideration1
$62.0 $62.0 
Other deferred revenue$6.7 $4.9 
1Variable 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 months ended March 31, 2021, the Company recognized revenue of approximately $5.5 million related to the Company's contract liabilities reported as of January 1, 2021. For the three months ended March 31, 2020, the Company recognized revenue of approximately $4.5 million related to the Company's contract liabilities reported as of January 1, 2020.

Regarding other information related to the Company's contracts with customers, the amount of revenue recognized from performance obligations satisfied in prior periods (e.g., due to changes in transaction price) was not material in any of the periods presented. Further, the total amount of the transaction price allocated to either wholly unsatisfied or partially satisfied performance obligations was $123.5 million and $120.8 million as of March 31, 2021 and December 31, 2020, respectively. Of the amount presented as of March 31, 2021, the Company expects to recognize as revenue approximately 45% - 50% of the
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remaining contract consideration allocated to either wholly unsatisfied or partially satisfied performance obligations over the next twelve months, with the remaining recognized thereafter.
10.    LEASES - THE COMPANY AS LESSOR
The Company leases land and buildings to third parties under operating leases. Such activity is primarily composed of operating leases within its CRE segment.
Under various circumstances and on a case-by-case basis, the Company may offer certain of its tenants rent relief arrangements (for example, those offered during the year ended December 31, 2020 and in the current period due to the continuing impacts of the coronavirus pandemic that was first reported in Wuhan, China, in December 2019, henceforth, "COVID-19") in the form of rent deferrals or other relief modifications that result in changes to fixed contractual lease payments for specified months. Such other relief modifications may include changing the nature of payments from fixed to variable (i.e., variable based on a percentage of the tenant's sales, typically subject to a minimum "floor" amount) or, in some cases, payment forgiveness. Consistent with lease accounting guidance and interpretations provided by the FASB for rent relief arrangements specifically related to COVID-19, the Company elected to treat such eligible lease concessions (i.e., such rent deferrals, fixed-to-variable modifications or payment forgiveness arrangements that do not result in a substantial increase in the rights of the lessor or obligations of the lessee) outside of the lease accounting modification framework.
For such eligible rent deferrals, the Company accounts for the event as if no changes to the lease contract were made and continues to record lease receivables and recognize income during the deferral period. For the eligible other relief modifications mentioned above that resulted in reductions to fixed contractual lease payments the Company reports, for periods covered by the modification, reduced rental income (i.e., revenue) equal to the agreed-upon amounts (offset by any variable lease payments).
The Company continues to assess collectability on all such amounts due under leases and only recognizes revenue to the extent such amounts are probable of collection (or payment is received). The following table provides information about reductions in revenue for CRE accounts receivable and unbilled straight-line lease receivables for which the Company assessed that the tenant's future payment of amounts due under leases was not probable (i.e., those due to general circumstances or those primarily due to COVID-19), as well as reductions of revenue related to the allowance for doubtful accounts for other impacted operating lease receivables during the three months ended March 31, 2021 and 2020 (in millions):

Three Months Ended March 31,
20212020
Impact to billed accounts receivable$1.3 $0.7 
Impact to straight-line lease receivables0.3 (0.1)
Total revenue reductions (increases) - tenant collectability assessments$1.6 $0.6 
Provision for allowance for doubtful accounts1
0.2 (0.1)
Total revenue reductions (increases)$1.8 $0.5 
1 Related to other impacted operating lease receivables.

As a result of COVID-19, certain tenants experiencing economic difficulties have sought and may continue to seek current and future rent relief, which may be provided in the form of additional rent deferrals or other relief modifications, among other possible agreements. The Company is evaluating each request on a case-by-case basis and will apply lease accounting guidance (including the interpretations specifically related to COVID-19) consistently to leases with similar characteristics and similar circumstances. The future impact of any potential rent concessions in the context of lease accounting guidance and related interpretations is dependent upon the extent of relief granted to tenants as a result of COVID-19 in future periods and the elections made by the Company at the time of entering into such agreements.
The historical resultscost of, operations have been presentedand accumulated depreciation on, leased property as discontinued operations in the condensed consolidated financial statementsof March 31, 2021 and prior periods have been recast.
The revenue, operating loss, gain (loss) on asset dispositions, income tax (expense) benefit and after-tax effects of these transactions for the quarters and nine months ended September 30, 2017 and 2016December 31, 2020 were as follows (in millions):
March 31, 2021December 31, 2020
Leased property - real estate$1,532.5 $1,525.3 
Less: Accumulated depreciation(162.4)(152.2)
Property under operating leases, net$1,370.1 $1,373.1 
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 Quarter Ended September 30, Nine Months Ended September 30,
 2017 2016 2017 2016
Sugar operations revenue (Land Operations)$0.4
 $35.7
 $22.9
 $73.7
        
Operating loss before income taxes$(1.1) $(17.1) $(2.2) $(51.2)
Gain (loss) on asset dispositions, net(0.2) —
 6.0
 —
Income (loss) from discontinued operations before income taxes(1.3) (17.1) 3.8
 (51.2)
Income tax (expense) benefit0.5
 3.5
 (1.4) 23.1
Income (loss) from discontinued operations$(0.8) $(13.6) $2.4
 $(28.1)
        
Basic earnings (loss) per share$(0.02) $(0.28) $0.04
 $(0.58)
Diluted earnings (loss) per share$(0.02) $(0.27) $0.05
 $(0.57)
There was no depreciation and amortization related to discontinued operations forTotal rental income (i.e., revenue) under these operating leases during the quarter and ninethree months ended September 30, 2017. DepreciationMarch 31, 2021 and amortization related2020 relating to discontinued operations was $12.6 millionlease payments and $47.3 million for the quarter and nine months ended September 30, 2016, respectively.

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18.SEGMENT RESULTS
Segment resultsvariable lease payments were as follows (in millions):
Three Months Ended March 31,
20212020
Lease payments$29.6 $30.2 
Variable lease payments11.7 1.4 
Total rental income$41.3 $31.6 
Contractual future lease payments to be received on non-cancelable operating leases as of March 31, 2021 were as follows (in millions):
2021$89.2 
2022110.9 
202399.9 
202486.6 
202574.2 
202660.5 
Thereafter448.6 
Total future lease payments to be received$969.9 

11.    LEASES - THE COMPANY AS LESSEE
There have been no material changes from the Company's leasing activities as a lessee described in Note 15 to the consolidated financial statements included in Item 8 of the Company's 2020 Form 10-K. The following table provides information about the Company's operating lease costs and finance lease costs recognized during the three months ended March 31, 2021 and 2020 (in millions):

Three Months Ended March 31,
20212020
Operating lease cost$1.1 $1.2 
Finance lease cost$0.3 $0.3 

12.    SHARE-BASED PAYMENT AWARDS
The 2012 Incentive Compensation Plan ("2012 Plan") allows for the granting of stock options, restricted stock units and common stock. The shares of common stock authorized to be issued under the 2012 Plan may be drawn from the shares of the Company's authorized but unissued common stock or from shares of its common stock that the Company acquires, including shares purchased on the open market or private transactions. During the three months ended March 31, 2021, the Company granted approximately 342,700 restricted stock unit awards with a weighted average grant date fair value of $16.50 under the 2012 Plan. During the three months ended March 31, 2020, the Company granted approximately 225,700 restricted stock units with a weighted average grant date fair value of $24.59 under the 2012 Plan.
The fair value of the Company's time-based awards is determined using the Company's stock price on the date of grant. The fair value of the Company's market-based awards is estimated using the Company's stock price on the date of grant and the probability of vesting using a Monte Carlo simulation with the following weighted-average assumptions:
2021 Grants2020 Grants
Volatility of A&B common stock47.2%22.6%
Average volatility of peer companies49.6%23.2%
Risk-free interest rate0.2%1.3%
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Quarter Ended September 30, Nine Months Ended September 30,

2017 2016 2017 2016
Revenue:       
Commercial Real Estate$33.9
 $32.7
 $101.4
 $102.0
Land Operations22.6
 18.1
 45.7
 29.6
Materials & Construction55.0
 52.1
 155.7
 144.7
Total revenue111.5
 102.9
 302.8
 276.3
Operating Profit (Loss):       
Commercial Real Estate1
13.6
 13.5
 41.3
 41.3
Land Operations2
10.4
 7.8
 9.7
 (7.3)
Materials & Construction6.5
 5.6
 18.8
 18.5
Total operating profit30.5
 26.9
 69.8
 52.5
Interest expense(6.1) (6.4) (18.5) (20.1)
Gain on the sale of improved property—
 0.1
 3.0
 8.1
General corporate expenses(8.9) (5.5) (20.5) (16.0)
REIT evaluation/conversion costs3
(4.4) (1.9) (11.4) (3.8)
Income From Continuing Operations Before Income Taxes11.1
 13.2
 22.4
 20.7
Income tax expense(3.7) (1.0) (6.4) (1.6)
Income From Continuing Operations7.4
 12.2
 16.0
 19.1
Income (loss) from discontinued operations, net of income tax(0.8) (13.6) 2.4
 (28.1)
Net Income (Loss)6.6
 (1.4) 18.4
 (9.0)
Income attributable to noncontrolling interest(0.5) (0.5) (1.7) (1.1)
Net Income (Loss) Attributable to A&B Shareholders$6.1
 $(1.9) $16.7
 $(10.1)

1 Commercial Real Estate operating profit includes intersegment operating revenue,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):
Three Months Ended March 31,
20212020
Share-based expense:
Time-based and market-based restricted stock units$1.4 $1.5 

13.    EMPLOYEE BENEFIT PLANS
On February 23, 2021, the Company’s Board of Directors approved a plan to effect the termination of the A&B Retirement Plan for Salaried Employees of Alexander & Baldwin, LLC and the Pension Plan for Employees of A&B Agricultural Companies (collectively, the “Defined Benefit Plans”), to be effective May 31, 2021.
In addition, the Board of Directors authorized the Company to take the following steps to prepare for the termination of the Defined Benefit Plans, which are tax-qualified, including:
a.Prepare and execute any necessary amendments to the Defined Benefit Plans and/or restatements regarding the termination of the Defined Benefit Plans, including amending the Defined Benefit Plans to provide for a limited lump-sum window for eligible participants;
b.Prepare and file an Application for Determination for Terminating Plan with the Internal Revenue Service (“IRS”) for a determination as to the tax-qualified status of the Defined Benefit Plans at the time of termination; and
c.Prepare and file all appropriate notices and documents related to the termination of the Defined Benefit Plans and wind-down with the Pension Benefit Guaranty Corporation (the “PBGC”), the U.S. Department of Labor, the Internal Revenue Service, the trustee and any other appropriate parties.
Except for retirees currently receiving payments under the Defined Benefit Plans, participants will have the choice of receiving a single lump sum payment or an annuity from a highly-rated insurance company that will pay and administer future benefit payments. The amount of any lump sum payment will equal the actuarial-equivalent present value of the participant’s accrued benefit under the applicable pension plan as of the distribution date. Annuity payments to current retirees will continue under their current elections, but will be administered by the selected insurance company.
Components of the net periodic benefit cost for the Company's pension and post-retirement plans for the three months ended March 31, 2021 and 2020 are shown below (in millions):
Three Months Ended March 31,
20212020
Service cost$0.2 $0.2 
Interest cost1.7 1.7 
Expected return on plan assets(1.7)(1.7)
Amortization of net loss0.6 0.6 
Net periodic benefit cost$0.8 $0.8 
The Company has made 0 contributions to its defined benefit pension plans during the three months ended March 31, 2021 and expects to make 0 contributions in the current fiscal year.
14.    INCOME TAXES
The Company has been organized and operates in a manner that enables it to qualify, and believes it will continue to qualify, as a REIT for federal income tax purposes. The Company’s effective tax rate for the three months ended March 31, 2021 differed from the effective tax rate for the same period in 2020, primarily from our Materials & Construction segment,due to the taxable built-in gain on a REIT land sale in 2021.

As of March 31, 2021, tax years 2017 and later are open to audit by the tax authorities. The Company believes that the result of any potential audits will not have a material adverse effect on its results of operations, financial condition, or liquidity.
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15.    EARNINGS PER SHARE ("EPS")
Basic earnings per common share excludes dilution and is eliminatedcalculated 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.
The following table provides a reconciliation of income (loss) from continuing operations to income (loss) from continuing operations available to A&B common shareholders and net income (loss) available to A&B common shareholders (in millions):
Three Months Ended March 31,
20212020
Income (loss) from continuing operations$9.9 $5.8 
Exclude: (Income) loss attributable to noncontrolling interest0 0.6 
Income (loss) from continuing operations attributable to A&B shareholders9.9 6.4 
Distributions and allocations to participating securities0 0 
Income (loss) from continuing operations available to A&B common shareholders9.9 6.4 
Income (loss) from discontinued operations available to A&B common shareholders0 (0.2)
Net income (loss) available to A&B common shareholders$9.9 $6.2 

The number of shares used to compute basic and diluted earnings per share is as follows (in millions):
Three Months Ended March 31,
20212020
Denominator for basic EPS - weighted average shares outstanding72.5 72.3 
Effect of dilutive securities:
Stock options and restricted stock unit awards0.1 0.2 
Denominator for diluted EPS - weighted average shares outstanding72.6 72.5 

The number of anti-dilutive securities, excluded from the calculation of diluted earnings per common share, consisted of the following (in millions):
Three Months Ended March 31,
20212020
Number of anti-dilutive securities0.3 0.1 

16.    ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS)
Other comprehensive income (loss) principally includes amortization of deferred pension and postretirement costs. The components of Accumulated other comprehensive loss, net of taxes, were as follows as of March 31, 2021 and December 31, 2020 (in millions):
March 31, 2021December 31, 2020
Employee benefit plans:
Pension plans$(48.3)$(48.9)
Post-retirement plans(3.6)(3.6)
Non-qualified benefit plans(0.8)(0.8)
Total employee benefit plans(52.7)(53.3)
Interest rate swap(3.3)(6.7)
Accumulated other comprehensive income (loss)$(56.0)$(60.0)
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The changes in our consolidated results of operations.
2 ForAccumulated other comprehensive income (loss) by component for the quarter and ninethree months ended September 30, 2017, Land Operations segment operating profit includes non-cash reductionsMarch 31, 2021 were as follows (in millions, net of $0.4taxes):
Employee Benefit PlansInterest Rate SwapTotal
Balance, January 1, 2021$(53.3)$(6.7)$(60.0)
Other comprehensive income (loss) before reclassifications0 3.1 3.1 
Amounts reclassified from accumulated other comprehensive income (loss)1
0.6 0.3 0.9 
Taxes on other comprehensive income (loss)0 0 0 
Other comprehensive income (loss), net of taxes0.6 3.4 4.0 
Balance, March 31, 2021$(52.7)$(3.3)$(56.0)
1 Amounts reclassified from Accumulated other comprehensive income 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 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.    RELATED PARTY TRANSACTIONS
Construction Contracts and Material Sales. The Company entered into contracts in the ordinary course of business, as a supplier, with affiliate entities that require accounting under the equity method due to the Company's financial interests in such entities (refer to Note 3) and also with affiliate parties that are members in entities in which the Company also is a member and holds a controlling financial interest. Related to the periods during which the relationship existed, revenues earned from transactions with such affiliates were $1.4 million and $2.6$0.7 million for the three months ended March 31, 2021 and 2020, respectively. Expenses recognized from transactions with such affiliates were $0.3 million and $0.2 million for the three months ended March 31, 2021 and 2020, respectively. Receivables from these affiliates were $0.8 million and $0.9 million as of March 31, 2021 and December 31, 2020, respectively. Amounts due to these affiliates were $0.1 million and $0.3 million as of March 31, 2021 and December 31, 2020, respectively.
Land Operations. During the three months ended March 31, 2021 and 2020, the Company recognized $1.5 million and $0.8 million, respectively, related to revenue for materials and services provided to certain unconsolidated investments in affiliates and interest earned on notes receivables from such related parties. Receivables from service arrangements with these affiliates were less than $0.1 million as of March 31, 2021 and December 31, 2020. Notes receivable from related parties were held at carrying values of $7.6 million and $9.5 million as of March 31, 2021 and December 31, 2020, respectively, related to a construction loan secured by a mortgage on real property with one of the Company's solar tax equity investments. Forjoint ventures.
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18.    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. As noted above, the Company operates and reports on 3 segments: Commercial Real Estate; Land Operations; and Materials & Construction.
During the first quarter ended March 31, 2021, the Company changed the structure of its internal organization in a manner that caused the composition of its reportable segments to change. Specifically, the change resulted from a reorganization to present the activity and nineresults of operations of Company-owned quarries on the island of Maui (utilized and operated by third parties who pay for such extraction rights under operating agreements) historically included in the results of Land Operations that will now be included in the results of Materials & Construction. The corresponding information for all historical periods has been restated and resulted in changes in segment Operating Revenue and Operating Profit (Loss) of $0.5 million (from Land Operations to Materials & Construction) during the three months ended September 30, 2016, Land OperationsMarch 31, 2020.
Reportable segment operating profit included non-cash reductionsinformation for the three months ended March 31, 2021 and 2020 is summarized below (in millions):
Three Months Ended March 31,
20212020
Operating Revenue:
Commercial Real Estate$39.9 $43.4 
Land Operations1
17.1 11.0 
Materials & Construction1
24.0 26.4 
Total operating revenue81.0 80.8 
Operating Profit (Loss): 
Commercial Real Estate2
15.4 18.1 
Land Operations1,3
11.4 4.5 
Materials & Construction1
(4.0)(3.3)
Total operating profit (loss)22.8 19.3 
Gain (loss) on disposal of commercial real estate properties, net0.2 0.5 
Interest expense(7.0)(7.8)
Corporate and other expense(6.0)(6.2)
Income (Loss) from Continuing Operations Before Income Taxes$10.0 $5.8 
1As described above, during the current year, the Company changed the composition of its reportable segments which caused reported amounts (i.e., revenue and operating profit) in the historical period to be reclassified from Land Operations to Materials & Construction. All comparable information for the historical periods has been restated to reflect the impact of these changes.
2 Commercial Real Estate segment operating profit (loss) includes intersegment operating revenue, primarily from the Materials & Construction segment, and is eliminated in the condensed consolidated statements of operations.
3 Land Operations segment operating profit (loss) includes equity in earnings (losses) from the Company's various equity method investments (primarily real estate joint ventures).

19.    SUBSEQUENT EVENTS
On April 27, 2021, the Company's Board of $0.2 million and $9.7 million, respectively. The non-cash reductions are recorded in Reductions in solar investment, netDirectors declared a cash dividend of $0.16 per share of outstanding common stock, payable on July 6, 2021 to shareholders of record as of the condensed consolidated statementclose of operations.
3
Costs related to the Company's in-depth evaluation of and conversion to a REIT.

business on June 28, 2021.
21
20



ITEM 2.  MANAGEMENT’SMANAGEMENT'S DISCUSSION AND ANALYSISOF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
The following analysis of the condensed consolidated financial condition and results of operations of Alexander & Baldwin, Inc. ("A&B" or the "Company") and its subsidiaries (collectively, the "Company") 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’sCompany's Annual Report on Form 10-K for the year ended December 31, 20162020 ("2020 Form 10-K") filed with the U.S. Securities and Exchange Commission ("SEC").

FORWARD-LOOKING STATEMENTS
Throughout this quarterly report on Form 10-Q, references to "we," "our," "us" and "our Company" refer to Alexander & Baldwin, Inc. ("A&B" or the "Company"), from time to time, may make or may have made certaintogether with its consolidated subsidiaries.
Forward-Looking Statements
Statements in this Form 10-Q that are not historical facts are forward-looking statements whether orally or in writing, such as forecasts and projectionswithin the meaning of the Company’s future performance or statements of management’s plans and objectives. These statements are "forward-looking" statements as that term is defined in the Private Securities Litigation Reform Act of 1995. Such forward-looking statements may be contained in, among other things, SEC filings, such as the Forms 10-K, 10-Q and 8-K, the Annual Report to Shareholders, press releases made by the Company, the Company’s web sites (including web sites of its subsidiaries), and oral statements made by the officers of the Company. Except for historical information contained in these written or oral communications, such communications contain forward-looking statements. New risk factors emerge from time to time and it is not possible for the Company to predict all such risk factors, nor can it assess the impact of all such risk factors on the Company’s business or the extent to which any factor, or combination of factors, may cause actual results to differ materially from those contained in any forward-looking statements. Accordingly, forward-looking statements cannot be relied upon as a guarantee of future results1995 and involve a number of risks and uncertainties that could cause actual results to differ materially from those projectedcontemplated 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, as well as the rapidly changing challenges with, and the Company's plans and responses to, the coronavirus 2019 ("COVID-19") pandemic and related economic disruptions. 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, risks associated with COVID-19 and its impact on the Company's businesses, results of operations, liquidity and financial condition, the evaluation of alternatives by the Company related to its materials and construction business and by the Company's joint venture related to the development of Kukui‘ula, and the risk factors discussed in the statements, including the Company’s 2016 Annual Report onCompany's most recent Form 10-K, Form 10-Q and other filings with the SEC. The Company isinformation in this Form 10-Q should be evaluated in light of these important risk factors. We do not required, and undertakes noundertake any obligation to revise or update the Company's forward-looking statements or any factors that may affect actual results, whether as a result of new information, future events, or circumstances occurring after the date of this report.statements.
INTRODUCTIONIntroduction and Objective
Management’sManagement's Discussion and Analysis of Financial Condition and Results of Operations ("MD&A") is a supplement to the accompanying condensed consolidated financial statements and provides additional material information about A&B’sthe Company's business, recent developments and financial condition,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 results offrom operations and from outside sources; and how certain accounting principles, policies and estimates affect A&B’sits financial statements. MD&A is organized as follows:
•Business Overview: This section provides a general description of A&B’sthe Company's business, as well as recent developments that A&Bmanagement believes are important in understanding its results of operations and financial condition or in understanding anticipated future trends.
Critical Accounting Estimates: This section identifies and summarizes those accounting policies that significantly impact A&B’s reported results of operations and financial condition and require significant judgment or estimates on the part of management in their application.
•ConsolidatedResults of Operations: This section provides an analysis of A&B’sthe Company's consolidated results of operations for the quarters and ninethree months ended September 30, 2017 and 2016.
March 31, 2021 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 A&B’sthe Company's results of operations by business segment.
segment for the three months ended March 31, 2021 as compared to the corresponding period of the preceding fiscal year.
Liquidity and Capital Resources:•Use of Non-GAAP Financial Measures: This section provides a discussion of A&B’sthe 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 believes that presentation of the non-GAAP financial measure provides useful information to investors regarding the Company's financial condition and an analysisresults of A&B’s cash flowsoperations and, to the extent material, describes additional purposes for which the nine months ended September 30, 2017Company uses the non-GAAP financial measures.
•Liquidity and 2016, as well asCapital Resources: This section provides a discussion of A&B’sany 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
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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.
capital, as compared to the end of preceding fiscal year ended December 31, 2020. It includes an evaluation of the amounts and certainty of cash flows from operations and from outside sources.
Quantitative and Qualitative Disclosures about Market Risk:•Other Matters: This section discusses how A&B monitorsidentifies and manages exposuresummarizes other matters to potential gains and losses associated withbe discussed in Item 2 of this report including any changes in interest rates.
the significant judgments or 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, 2020, the potential impact of recently issued accounting pronouncements and other miscellaneous matters as needed.
Rounding:Amounts in the MD&A are rounded to the nearest tenth of a million. Accordingly, a recalculation of totals and percentages, if based on the reported data, and may be slightly different.

22
Business Overview

Reportable segments

BUSINESS OVERVIEW
A&B, whose history dates back to 1870, is headquartered in Honolulu andThe Company operates through three reportable segments: Commercial Real Estate; Land Operations; and Materials & Construction. The Company's three reportable segments reflect an internal reorganizationA description of each of the operations andCompany's reporting structure that the Company completed in the fourth quarter of 2016 to facilitate operational efficiencies and enhance the execution of the Company’s businesses. Prior to October 1, 2016, the Company operated under four reportable segments: segments is as follows:
•Commercial Real Estate Real Estate Development("CRE") - This segment functions as a vertically integrated real estate investment company with core competencies in investments and Sales, acquisitions (i.e., identifying opportunities and acquiring properties); 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 citizens. 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 assets and landholdings 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, income/loss from real estate joint ventures, hydroelectric energy and other legacy business activities.
•Materials & Construction ("M&C") - This segment operates as Hawai‘i's largest asphalt paving contractor and Agribusiness. is one of the state's largest natural materials and infrastructure construction companies. Such activities are primarily conducted through its wholly-owned subsidiary, Grace Pacific LLC ("Grace Pacific"), a materials and construction company in Hawai‘i.
Simplification strategy
As a result of its conversion to a REIT and consequent de-emphasis of non-REIT operating businesses, the segment reorganization,Company has established a strategy to simplify its business, which includes ongoing efforts to accelerate the monetization of land and related assets and also includes evaluating strategic options for the eventual monetization of some or all of its Materials & Construction businesses.
Moreover, related to its unconsolidated equity method investments in joint venture development projects at Kukui‘ula, the Company continues its evaluation of opportunities to monetize these investments or, in conjunction with the joint venture partners, its evaluation of a range of alternative strategies to accelerate the monetization of the land in the joint venture projects. Any potential transaction related to either the investments or the assets within the joint venture projects would be dependent upon a number of external factors that may be beyond the Company's and/or joint venture projects' control, including, among other factors, market conditions, industry trends and the interest of third parties in the Kukui‘ula development projects. Accordingly, there can be no assurance that any of the options evaluated will be pursued or completed. Further, there can be no assurance that the outcome of the evaluation of strategic alternatives or any potential transaction will result in the Company being able to maintain the carrying value of the Kukui‘ula joint venture development projects.
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Termination of certain employee benefit plans
On February 23, 2021, the Company’s former Real Estate Development and Sales and Agribusiness segments have been combined into the new Land Operations reportable segment. Additionally, the following items were realigned in connection with the segment changes: (1) agricultural leases that previously were included in the Commercial Real Estate segment were reclassified to the Land Operations segment, (2) certain industrial leases that previously were included in the former Agribusiness segment were reclassified to the Commercial Real Estate segment, (3) salesBoard of commercial properties that previously were included in the former Real Estate Development and Sales segment were reclassified to the Commercial Real Estate segment, and (4) the Company's solar energy investments that previously were presented as Corporate investments were reclassified to Land Operations. The financial information for all prior periods has been recast to correspond to these segment changes.
On July 10, 2017, the Company’s board of directors unanimouslyDirectors approved a plan to effect the termination of the A&B Retirement Plan for Salaried Employees of Alexander & Baldwin, LLC and the Pension Plan for Employees of A&B Agricultural Companies (collectively, the “Defined Benefit Plans”), to be effective May 31, 2021.
In addition, the Board of Directors authorized the Company to be subjecttake the following steps to tax asprepare for the termination of the Defined Benefit Plans, which are tax-qualified, including:
a.Prepare and execute any necessary amendments to the Defined Benefit Plans and/or restatements regarding the termination of the Defined Benefit Plans, including amending the Defined Benefit Plans to provide for a real estate investment trust (a “REIT”limited lump-sum window for eligible participants;
b.Prepare and file an Application for Determination for Terminating Plan with the Internal Revenue Service (“IRS”) for U.S. federal income tax purposes commencinga determination as to the tax-qualified status of the Defined Benefit Plans at the time of termination; and
c.Prepare and file all appropriate notices and documents related to the termination of the Defined Benefit Plans and wind-down with the Company’s taxable year ending December 31, 2017Pension Benefit Guaranty Corporation (the “REIT Election”“PBGC”)., the U.S. Department of Labor, the Internal Revenue Service, the trustee and any other appropriate parties.
AlthoughExcept for retirees currently receiving payments under the Defined Benefit Plans, participants will have the choice of receiving a single lump sum payment or an annuity from a highly-rated insurance company that will pay and administer future benefit payments. The amount of any lump sum payment will equal the actuarial-equivalent present value of the participant’s accrued benefit under the applicable pension plan as of the distribution date. Annuity payments to current retirees will continue under their current elections, but will be administered by the selected insurance company.
In 2022, after receiving approval from the IRS and the PBGC and following completion of the limited lump-sum offering, the Company beganexpects to make an additional cash contribution in order to fully fund the Defined Benefit Plans on a plan termination basis, followed by the purchase of annuity contracts to transfer its remaining liabilities under the Defined Benefit Plans. These additional cash contributions are expected to range between $25 million and $40 million. However, the actual amount of this cash contribution requirement will depend upon the nature and timing of participant settlements, interest rates, as well as prevailing market conditions. In addition, the Company expects to recognize non-cash pension settlement charges totaling between $80 million and $90 million, related to actuarial losses currently in Accumulated other comprehensive income (loss) in the consolidated balance sheets, upon settlement of the obligations of the Defined Benefit Plans. These charges are currently expected to occur in 2022, with the specific timing and final amounts dependent upon completion of the activities enumerated above.
Coronavirus outbreak
In December 2019, COVID-19 was first reported in Wuhan, China, and on March 11, 2020, the World Health Organization declared COVID-19 a pandemic. The COVID-19 pandemic has adversely impacted the global economy and has contributed to significant volatility in financial markets. Considerable uncertainty continues to surround COVID-19 and its effects on the population, as well as the effectiveness of any responses taken by government authorities and the availability and efficacy of vaccinations and therapeutic treatments for COVID-19. The pandemic resulted in a significant decline in Hawai‘i tourism and an increase in business closures; it has significantly impacted the Company's business due largely to the extreme hardships facing its retail tenants. The ultimate extent of the impact that the COVID-19 pandemic 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 duration and spread of the outbreak, the severity of economic disruptions and resulting impact on economic growth/recession, the response by all levels of government in their efforts to contain the outbreak and to mitigate the economic disruptions, the impact on travel and tourism behavior and the impact on consumer confidence and spending, all of which are highly uncertain and cannot be reasonably predicted.
As of April 16, 2021, all of the Company's properties within its CRE portfolio remain open and substantially all of its existing tenants remain open and operating in compliance withsome capacity. Further, as of this date, the requirements for qualificationCRE portfolio tenants have paid approximately 87% of their first quarter billings (which includes base rents and taxationrecoveries from tenants). Within this population, the Company's grocer tenants (designated as a REIT (the “REIT requirements”) for the taxable year ending December 31, 2017, the Company intends to complete a merger that will facilitate the Company’s ongoing compliance with the REIT requirements by ensuring that certain standard REIT ownership limitationsessential businesses and transfer restrictions apply to the Company’s capital stock.located within its grocery-anchored neighborhood shopping centers), have paid approximately 94% of their first quarter billings.
Pursuant to the merger agreement entered into on July 10, 2017 among the Company, Alexander & Baldwin REIT Holdings, Inc., a Hawaii corporation and a direct, wholly owned subsidiary of the Company (“A&B REIT Holdings”), and A&B REIT Merger Corporation, a Hawaii corporation and a direct, wholly owned subsidiary of A&B REIT Holdings (“Merger Sub”), Merger Sub will be merged with and into the Company, with the Company continuing as the surviving corporation. As a result of COVID-19, certain tenants experiencing economic difficulties have sought and may continue to seek current and future rent relief, which may be provided in the merger, A&B REIT Holdings will replaceform of rent deferrals, which has varied in terms of months covered and the repayment period (e.g., repaid in 2020 or to be repaid over 2021) or other relief modifications, including modifying the
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nature of rent payments from fixed to variable (i.e., variable based on a percentage of the tenant's sales, typically subject to a minimum "floor" amount) or, in some cases, payment forgiveness.
As it pertains to rent deferrals, as of March 31, 2021, since the Company began providing rent relief arrangements as a result of COVID-19, the Hawaii-based, publicly held corporation throughCompany has agreed to rent deferrals with tenants which has impacted total billings of $7.1 million (net of amounts subsequently forgiven under other relief modifications) and has subsequently collected $3.6 million of these amounts from tenants. The remaining $3.5 million outstanding has been subject to the Company's ongoing assessments of uncollectable tenant billings, pursuant to which the Company’s operations are now conducted, and promptly followingCompany records adjustments to revenue based on changes in the merger A&B REIT Holdings will be renamed “Alexander & Baldwin, Inc.”assessments during the period (further described below).
During the third quarter of 2017, A&B REIT Holdings filed a registration statement on Form S-4 withthree months ended March 31, 2021 and 2020, the Securities and Exchange Commission (“SEC”), which included a preliminary proxy statement/prospectusreductions (or increases) to revenue that provides information regarding the REIT Election, the proposed merger and the special meeting at which the Company’s shareholders were given the opportunity to vote on the holding company merger proposal. The special meeting was held on October 27, 2017, during which A&B shareholders approved the holding company merger proposal pursuant to the registration statement.
Commercial Real Estate
The Commercial Real Estate segment owns, operates and manages retail, industrial, and office properties in Hawaii and on the mainland. The Commercial Real Estate segment also leases urban land in Hawaii to third-party lessees.
Land Operations
The Land Operations segment actively manages the Company's land and real estate-related assets and deploys these assets to their highest and best use. Primary activities of the Land Operations segment include planning, zoning, financing, constructing, purchasing, managing, selling, and investing in real property; renewable energy; and diversified agribusiness activities. As a result of the previously mentioned segment realignment, the Company has reclassifiedrecorded as result of other relief modifications and other adjustments, as well as those recorded based on its assessments of uncollectable tenant billings were as follows (in millions):
Three Months Ended March 31,
20212020
Other relief modifications and other adjustments1
$2.5 $0.1 
Tenant collectability assessments and allowance for doubtful accounts
Impact to billed accounts receivable$1.3 $0.7 
Impact to straight-line lease receivables0.3 (0.1)
Total revenue reductions (increases) - tenant collectability assessments1.6 0.6 
Provision for allowance for doubtful accounts2
0.2 (0.1)
Total revenue reductions (increases) for assessments and provisions$1.8 $0.5 
Total revenue reductions (increases) related to adjustments, assessments and provisions$4.3 $0.6 
Total revenue reductions (increases) impacting billed accounts receivable only3
$4.0 $0.7 
1 Primarily related to COVID-19, but may include other adjustments (e.g., adjustments due to tenant bankruptcies).
2 Related to other impacted operating lease receivables.
3 Excludes the impact to unbilled straight-line lease receivables.
The Company’s financial results for the HC&S sugar operations, which completedthree months ended March 31, 2021 were significantly impacted by the COVID-19 pandemic resulting in reductions in operating profit and its final harvest and ceased operations in December 2016, tonon-GAAP performance measures. As such, the Land Operations segment and also presentedcomparability of the operations as discontinuedCompany’s results of operations for all periods.the three months ended March 31, 2021 to future periods may be limited.
Materials & Construction
24

Consolidated Results of Operations
The Materials & Construction segment performs asphalt paving as prime contractorfollowing analysis of the consolidated financial condition and subcontractor; importsresults of operations of the Company and sells liquid asphalt; mines, processesits subsidiaries should be read in conjunction with the condensed consolidated financial statements and sells basalt aggregate; produces and sells asphaltic and ready-mix concrete; provides and sells various construction- and traffic-control-related products and manufactures and sells precast concrete products.related notes thereto.

23


CONSOLIDATED RESULTS OF OPERATIONS
Consolidated – ThirdFinancial results - First quarter of 20172021 compared with 20162020
(amounts in millions, except percentage data and per share data; unaudited)Three Months Ended March 31,2021 vs 2020
20212020$%
Operating revenue$81.0 $80.8 $0.2 0.2 %
Cost of operations(55.2)(57.3)2.1 (3.7)%
Selling, general and administrative(12.2)(13.8)1.6 (11.6)%
Gain (loss) on disposal of assets, net0.3 0.5 (0.2)(40.0)%
Operating income (loss)13.9 10.2 3.7 36.3 %
Income (loss) related to joint ventures3.4 3.2 0.2 6.3 %
Interest and other income (expense), net(0.3)0.2 (0.5)(250.0)%
Interest expense(7.0)(7.8)0.8 (10.3)%
Income tax benefit (expense)(0.1)— (0.1)— %
Income (loss) from continuing operations9.9 5.8 4.1 70.7 %
Discontinued operations (net of income taxes)— (0.2)0.2 (100.0)%
Net income (loss)9.9 5.6 4.3 76.8 %
(Income) loss attributable to noncontrolling interest— 0.6 (0.6)(100.0)%
Net income (loss) attributable to A&B$9.9 $6.2 $3.7 59.7 %
Basic Earnings (Loss) Per Share of Common Stock:
Basic earnings (loss) per share - continuing operations$0.14 $0.09 $0.05 55.6 %
Basic earnings (loss) per share - discontinued operations0.00 0.00 — NM
$0.14 $0.09 $0.05 55.6 %
Diluted Earnings (Loss) Per Share of Common Stock:
Diluted earnings (loss) per share - continuing operations$0.14 $0.09 $0.05 55.6 %
Diluted earnings (loss) per share - discontinued operations0.00 0.00 — NM
$0.14 $0.09 $0.05 55.6 %
Continuing operations available to A&B common shareholders$9.9 $6.4 $3.5 54.7 %
Discontinued operations available to A&B common shareholders— (0.2)0.2 (100.0)%
Net income (loss) available to A&B common shareholders$9.9 $6.2 $3.7 59.7 %
Funds From Operations ("FFO")1
$19.2 $15.9 $3.3 20.8 %
Core FFO1
$15.4 $18.3 $(2.9)(15.8)%
FFO per diluted share$0.26 $0.22 $0.04 18.2 %
Core FFO per diluted share$0.21 $0.25 $(0.04)(16.0)%
Weighted average diluted shares outstanding (FFO/Core FFO)2
72.6 72.5 
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 31.
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.
 Quarter Ended September 30,
(dollars in millions, except per-share amounts)2017 2016 $ Change Change
Operating revenue$111.5
 $102.9
 8.6
 8.4%
Operating costs and expenses99.7
 83.8
 15.9
 19.0%
Operating income11.8
 19.1
 (7.3) (38.2)%
Other expense, net(0.7) (5.9) 5.2
 (88.1)%
Income tax expense(3.7) (1.0) (2.7) 270.0%
Income from continuing operations7.4
 12.2
 (4.8) (39.3)%
Discontinued operations (net of income taxes)(0.8) (13.6) 12.8
 (94.1)%
Net income (loss)6.6
 (1.4) 8.0
 NM
Income attributable to noncontrolling interest(0.5) (0.5) —
 —%
Net income (loss) attributable to A&B$6.1
 $(1.9) 8.0
 NM
     
  
Basic earnings per share - continuing operations$0.15
 $0.25
 (0.10) (40.0)%
Basic earnings (loss) per share - discontinued operations(0.02) (0.28) 0.26
 (92.9)%
Net income (loss) available to A&B shareholders$0.13
 $(0.03) 0.16
 NM
        
Diluted earnings per share - continuing operations$0.15
 $0.24
 (0.09) (37.5)%
Diluted earnings (loss) per share - discontinued operations(0.02) (0.27) 0.25
 (92.6)%
Net income (loss) available to A&B shareholders$0.13
 $(0.03) 0.16
 NM

The Company'scauses of material changes in the condensed consolidated operating revenue increased $8.6 million, or 8.4%, to $111.5 millionstatements of operations for the third quarter of 2017three months ended March 31, 2021 as compared to the third quarter of 2016, reflecting an increase in revenue for Land Operations of $4.5 million, and an increase in Materials & Construction revenue of $2.9 million.
Consolidated operating costs and expenses for the third quarter of 2017 increased $15.9 million, or 19.0%, to $99.7 million compared to the third quarter of 2016. The reasons for the operating cost and expense changesthree months ended March 31, 2020 are described below by business segment,or in the Analysis of Operating Revenue and Profit by Segment. Segment sections below.
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Operating costs and expenses revenue for the thirdfirst quarter ended March 31, 2021 increased 0.2%, or $0.2 million, to $81.0 million, due primarily to higher revenue from Land Operations partially offset by lower revenue from each of 2017 also included $4.4the Commercial Real Estate and Materials & Construction segments.
Cost of operations for the first quarter ended March 31, 2021 decreased 3.7%, or $2.1 million, related to $55.2 million, due primarily to decreases in costs incurred by the Company's evaluationMaterials & Construction and conversionCommercial Real Estate segments.
Selling, general and administrative for the first quarter ended March 31, 2021 decreased 11.6%, or $1.6 million, to a REIT.
The Company's other expenses, net were $0.7$12.2 million, in the third quarter of 2017 compared to $5.9 million in the third quarter of 2016. The change in other income (expense) was primarily due to higher income from the Company's equity method investments, partially offset by a higher non-cash reduction to solar investments, net in the third quarter of 2017 as compared to the third quarter of 2016.lower personnel-related costs.
The Company recorded an income tax expense of $3.7 million on pre-tax income of $11.1 million for the third quarter of 2017, and an income tax expense of $1.0 million on pre-tax income of $13.2 million for the third quarter of 2016. The Company's effective tax rate was higher for the quarter ended September 30, 2017, compared to the same period in 2016, primarily due to the 2016 recognition of non-refundable federal tax credits related to the Company’s investment in two photovoltaic facilities.


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26



Consolidated – First nine months of 2017 compared with 2016
 Nine Months Ended September 30,
(dollars in millions, except per-share amounts)2017 2016 $ Change Change
Operating revenue$302.8
 $276.3
 26.5
 9.6%
Operating costs and expenses273.5
 239.0
 34.5
 14.4%
    Operating income29.3
 37.3
 (8.0) (21.4)%
Other expense, net(6.9) (16.6) 9.7
 (58.4)%
Income tax expense(6.4) (1.6) (4.8) 300.0%
     Income from continuing operations16.0
 19.1
 (3.1) (16.2)%
Discontinued operations (net of income taxes)2.4
 (28.1) 30.5
 NM
     Net income (loss)18.4
 (9.0) 27.4
 NM
Income attributable to noncontrolling interest(1.7) (1.1) (0.6) 54.5%
     Net income (loss) attributable to A&B$16.7
 $(10.1) 26.8
 NM
        
Basic earnings per share - continuing operations$0.32
 $0.39
 (0.07) (17.9)%
Basic earnings (loss) per share - discontinued operations0.04
 (0.58) 0.62
 NM
     Net income (loss) available to A&B shareholders$0.36
 $(0.19) 0.55
 NM
        
Diluted earnings per share - continuing operations$0.31
 $0.38
 (0.07) (18.4)%
Diluted earnings (loss) per share - discontinued operations0.05
 (0.57) 0.62
 NM
     Net income (loss) available to A&B shareholders$0.36
 $(0.19) 0.55
 NM

The Company's consolidated operating revenue increased $26.5 million, or 9.6%, to $302.8 million for the first nine months of 2017 as compared to the first nine months of 2016, reflecting an increase in revenue for Land Operations of $16.1 million, and an increase in revenue for Materials & Construction of $11.0 million.
Consolidated operating costs and expenses for the first nine months of 2017 increased $34.5 million, or 14.4%, to $273.5 million compared to the first nine months of 2016. The reasons for the operating cost and expense changes are described below, by business segment, in the Analysis of Operating Revenue and Profit by Segment. Operating costsSegment
The following analysis should be read in conjunction with the consolidated financial statements and expensesrelated notes thereto.
Commercial Real Estate
Financial results - First quarter of 2021 compared with 2020
Results of operations for the first nine months of 2017 also included $11.4quarter ended March 31, 2021 and 2020 were as follows:
(amounts in millions, except percentage data and acres; unaudited)Three Months Ended March 31,2021 vs 2020
20212020$%
Commercial Real Estate operating revenue$39.9 $43.4 $(3.5)(8.1)%
Commercial Real Estate operating costs and expenses(23.4)(24.3)0.9 (3.7)%
Selling, general and administrative(1.5)(2.1)0.6 (28.6)%
Intersegment operating revenue, net1
0.3 0.7 (0.4)(57.1)%
Interest and other income (expense), net0.1 0.4 (0.3)(75.0)%
Commercial Real Estate operating profit (loss)$15.4 $18.1 $(2.7)(14.9)%
Operating profit (loss) margin38.6 %41.7 %
Net Operating Income ("NOI")2
$25.3 $28.9 $(3.6)(12.4)%
Same-Store Net Operating Income ("Same-Store NOI")2
$24.7 $28.3 $(3.6)(12.6)%
Gross leasable area ("GLA") in square feet ("SF") for improved properties at end of period3.9 3.9 ——%
Ground leases (acres at end of period)152.0 153.7 (1.7)(1.1)%
1 Intersegment operating revenue, net for Commercial Real Estate is primarily from the Materials & Construction segment and is eliminated in the consolidated results of operations.
2 For a discussion of management's use of a non-GAAP financial measures and the required reconciliation of non-GAAP measures to GAAP measures, refer to page 31.

Commercial Real Estate operating revenue decreased 8.1% or $3.5 million, related to the Company's evaluation of a REIT conversion.
The Company's other expenses, net, were $6.9 million in the first nine months of 2017 compared to $16.6 million in the first nine months of 2016. The change in other income (expense) was primarily due to a lower reduction in solar investments, net, partially offset by lower gains on sales of improved property.
The Company recorded an income tax expense of $6.4 million on pre-tax income of $22.4$39.9 million for the first nine months of 2017, and an income tax expense of $1.6quarter ended March 31, 2021, as compared to the first quarter ended March 31, 2020. Operating profit decreased 14.9%, or $2.7 million, on pre-tax income of $20.7to $15.4 million for the first nine months of 2016. The Company's effective tax rate was higher for the first nine monthsquarter ended September 30, 2017March 31, 2021, as compared to the samefirst quarter ended March 31, 2020. The decrease in operating revenue and operating profit from the prior year is primarily driven by reductions in revenue that the Company has recorded as a result of other relief modifications and other adjustments, as well as those recorded based on its assessments of uncollectable tenant billings (totals of $4.3 million during the three months ended March 31, 2021, as compared to $0.6 million during the comparable prior year period, inclusive of the impact to unbilled straight-line lease receivables). Such impact was partially offset by a decrease in 2016operating costs and expenses of $0.9 million due to variable operational costs and other activity at its commercial real estate properties due to COVID-19, as well as lower selling, general and administrative expenses, which decreased $0.6 million from the prior year's quarter primarily to the 2016 recognition of non-refundable federal tax credits related to the Company’s investment in two photovoltaic facilities.


25


ANALYSIS OF OPERATING REVENUE AND PROFIT BY SEGMENTdriven by lower personnel cost.
Commercial Real Estate – Third quarterportfolio acquisitions and dispositions
There were no acquisitions of 2017 compared with 2016CRE improved properties or ground lease interests in land during the three months ended March 31, 2021.
27

 Quarter Ended September 30,
(dollars in millions)2017 2016 Change
Commercial Real Estate segment operating revenue$33.9
 $32.7
 3.7%
Commercial Real Estate segment operating costs and expenses(19.2) (19.3) (0.5)%
Selling, general and administrative(1.9) (0.4) 375.0%
Intersegment operating revenue2
0.8
 0.6
 33.3%
Other income (expense), net—
 (0.1) (100.0)%
Commercial Real Estate operating profit$13.6
 $13.5
 0.7%
Operating profit margin40.1% 41.3%
 
Cash Net Operating Income ("Cash NOI")1
    
   Hawaii$18.5
 $17.6
 5.2%
   Mainland2.7
 2.6
 2.4%
Total$21.2
 $20.2
 4.8%
Same-Store Cash Net Operating Income ("Same-Store Cash NOI")1
     
   Hawaii$16.7
 $16.1
 3.5%
   Mainland2.7
 2.5
 7.2%
Total$19.4
 $18.7
 4.0%
Gross Leasable Area ("GLA") (million sq. ft.) - Improved, end of period     
Hawaii3.0
 2.9
  
Mainland1.8
 1.8
  
Total improved4.8
 4.7
  
Hawaii ground leases (acres)117
 115
  
During the three months ended March 31, 2021, the Company had the following disposition related to a parcel of land (which was subject to a ground lease in the CRE segment) that was sold in conjunction with a larger, non-core asset sale in the Land Operations segment (dollars in millions):
Dispositions
PropertyLocationDate
(Month/Year)		Sales PriceGLA (SF)
Residual Maui landMaui, HI2/21$0.3  N/A
Leasing activity
During the first quarter ended March 31, 2021, the Company signed 11 new leases and 40 renewal leases for its improved properties across its three asset classes, covering 121,600 square feet of GLA. The 11 new leases consist of 15,800 square feet with an average annual base rent of $37.89 per-square-foot. Of the 11 new leases, four leases with a total GLA of 5,300 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 four leases, resulted in a 23.2% average base rent increase over comparable expiring leases. The 40 renewal leases consist of 105,800 square feet with an average annual base rent of $21.92 per square foot. Of the 40 renewal leases, 22 leases with a total GLA of 72,000 square feet were considered comparable and resulted in a 0.2% average base rent decrease over comparable expiring leases.
Leasing activity summarized by asset class for the three months ended March 31, 2021 was as follows:

Three Months Ended March 31, 2021
LeasesGLAABR/SF
Rent Spread1
Retail3254,402$37.303.0%
Industrial1664,709$12.39(0.2)%
Office32,460$34.83—%
1ReferRent spread is calculated for comparable leases, a subset of the total population of leases for the period presented (described above).
Occupancy
The Company has historically (through the period ended December 31, 2020) reported occupancy on a physical basis (i.e., based on timing of when the lessee has physical access to page the space, henceforth, “Physical Occupancy”). Beginning in the period ended March 31, 2021, to provide additional transparency regarding the status of the spaces available in its improved properties, the Company presents two different types of occupancy ("Leased 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 space as of 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 space as of the end of the period reported.
The Company's improved portfolio occupancy metrics as of March 31, 2021 and 2020 were as follows:

As ofAs ofBasis Point Change
March 31, 2021March 31, 2020
Leased Occupancy93.8%94.9%(110)
Physical Occupancy93.1%94.7%(160)
Economic Occupancy92.4%93.8%(140)

28

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 discussioncategory of management's use of a non-GAAP financial measure and the required reconciliation of non-GAAP measures to GAAP measures.
2Intersegment operating revenue for Commercial Real Estate is primarily from our Materials & Construction segment, and is eliminated in our consolidated results of operations.
Commercial Real Estate revenue for the third quarter of 2017 and 2016 was $33.9 million and $32.7 million, respectively. The increase was primarily attributable to the increases in Hawaii same-store rents. "Same-store" refers to properties that were owned and operated for the entirety of the prior calendar year. The same-store pool excludes properties under development or redevelopmentyear and also excludes properties acquired or sold during the comparable reporting periods, including stabilized properties. New developments and redevelopments are moved into the same-store pool upon one full calendar year of stabilized operation, which is typically upon attainment of market occupancy.
Operating profit and cash net operating incomecurrent period, to date ("Cash NOI") for the third quarter of 2017 increased by 0.7% and 4.8%, respectively, compared to the third quarter of 2016. The period-over-period increase in operating profit was primarily due to performance of the Hawaii properties, including higher Hawaii same-store rents, offset by an increase in general and administrative expenses. The higher general and administrative expenses reflect the Company’s strategic shift to focus on the growth of the commercial real estate portfolio through acquisition, development and redevelopment, which resulted in the alignment of certain personnel and related costs to the Commercial Real Estate segment,Same-Store" as well as costs incurred related to transitioning existing third-party property management and leasing functions internally. The period-over-period increase in Cash NOI was primarily due to performance of the Hawaii portfolio, including higher Hawaii same-store rents. Same-Store Cash NOI for the third quarter of 2017 increased by 4.0% compared to the third quarter of 2016, primarily due to an increase in same-store rents.
Tenant improvement costs were $2.5 million and $0.6 million for the quarter ended September 30, 2017 and 2016, respectively. Leasing commissions were $1.0 million and $0.6 million for the quarter ended September 30, 2017 and 2016, respectively.

26


The Company's commercial portfolio's occupancy percentage summarized by geographic location and property typemore fully described below) – as of September 30, 2017 wasMarch 31, 2021 and 2020 were as follows:
Leased Occupancy
As ofAs ofBasis Point Change
March 31, 2021March 31, 2020
Retail91.9%93.7%(180)
Industrial97.8%97.4%40
Office93.0%94.3%(130)
Total Improved Portfolio93.8%94.9%(110)
Economic Occupancy
As ofAs ofBasis Point Change
March 31, 2021March 31, 2020
Retail89.9%92.4%(250)
Industrial97.7%97.4%30
Office91.2%87.5%370
Total Improved Portfolio92.4%93.8%(140)
Percent occupancyHawaiiMainlandTotal
Retail92.5%96.0%92.9%
Industrial94.2%99.2%97.0%
Office91.9%87.5%88.8%
Total93.0%95.9%94.1%

Same-Store Leased Occupancy
As ofAs ofBasis Point Change
March 31, 2021March 31, 2020
Retail91.8%93.7%(190)
Industrial97.8%97.4%40
Office93.0%94.3%(130)
Total Improved Portfolio93.8%94.9%(110)

Same-Store Economic Occupancy
As ofAs ofBasis Point Change
March 31, 2021March 31, 2020
Retail89.9%92.4%(250)
Industrial97.7%97.4%30
Office91.2%87.5%370
Total Improved Portfolio92.4%93.8%(140)
Land Operations
Trends, events and uncertainties
The Company's commercial portfolio's quarter end same-store occupancy as of September 30, 2017 was 94.1% as compared to 91.3% as of September 30, 2016.
The table below identifies sales and acquisitions between December 31, 2016 and September 30, 2017:
Dispositions Acquisitions
Date Property Leasable sq. ft. Date Property Leasable sq. ft.
1/17 The Maui Clinic Building 16,600
 6/17 Honokohau Industrial 73,200
  Total dispositions 16,600
   Total improved acquisitions 73,200
The table below identifies sales and acquisitions between December 31, 2015 and December 31, 2016:
Dispositions Acquisitions
Date Property Leasable sq. ft. Date Property Leasable sq. ft.
6/16 Ninigret Office Park 185,500
 12/16 2927 East Manoa Road (Ground Lease) N/A
6/16 Gateway Oaks 59,700
 1/16 Manoa Marketplace 139,300
6/16 Prospect Park 163,300
      
  Total dispositions 408,500
   Total improved acquisitions 139,300

Commercial Real Estate – First nine months of 2017 compared with 2016
 Nine Months Ended September 30,
(dollars in millions)2017 2016 Change
Commercial Real Estate segment operating revenue$101.4
 $102.0
 (0.6)%
Commercial Real Estate segment operating costs and expenses(56.9) (60.1) (5.3)%
Selling, general and administrative(5.1) (2.3) 121.7%
Intersegment operating revenue2
2.1
 1.9
 10.5%
Other income (expense), net(0.2) (0.2) —%
Commercial Real Estate operating profit$41.3
 $41.3
 —%
Operating profit margin40.7% 40.5%  
Net Operating Income ("Cash NOI")1
     
   Hawaii$55.5
 $52.5
 5.8%
   Mainland8.3
 10.5
 (21.6)%
Total$63.8
 $63.0
 1.2%
Same-Store Net Operating Income ("Same-Store Cash NOI")1
     
   Hawaii$50.7
 $48.6
 4.3%
   Mainland8.2
 7.9
 4.5%
Total$58.9
 $56.5
 4.3%
1Refer to page 28 for a discussion of management's use of a non-GAAP financial measure and the required reconciliation of non-GAAP measures to GAAP measures.
2Intersegment operating revenue for Commercial Real Estate is primarily from our Materials & Construction segment, and is eliminated in our consolidated results of operations.

27


Commercial Real Estate revenue for the first nine months of 2017 was 0.6% lower than the first nine months of 2016, primarily due to the timing of sales and acquisitions during 2016, partially offset by an increase in Hawaii same-store rents.
Operating profit for the first nine months of 2017 was consistent with the same period last year, while Cash NOI increased by 1.2%. Operating profit did not change period-over-period, which reflected an increase in operating profit related to same-store properties as described above, offset by an increase in general and administrative expenses. The general and administrative expenses reflect the Company’s strategic shift to focus on the growth of the commercial real estate portfolio through acquisition, development and redevelopment, which resulted in the alignment of certain personnel and related costs to the Commercial Real Estate segment, as well as costs incurred related to transitioning existing third-party property management and leasing functions internally. The period-over-period increase in Cash NOI was primarily due to increases in same-store rents, partially offset by the impact of acquisitions and dispositions between the reported periods. Same-Store Cash NOI for the first nine months of 2017 increased by 4.3% compared to the first nine months of 2016.  The period over period increase in Same-Store Cash NOI was primarily due to an increase in same-store rents throughout the Hawaii and Mainland portfolios.
Tenant improvement costs were $4.0 million and $3.0 million for the nine months ended September 30, 2017 and 2016, respectively. Leasing commissions were $4.6 million and $2.1 million for the nine months ended September 30, 2017 and 2016, respectively.
Use of Non-GAAP Financial Measures
Cash net operating income ("Cash NOI") is presented for the Commercial Real Estate segment, and is calculated by adjusting segment operating profit for depreciation and amortization, straight-line lease adjustments, and general, administration and other expenses. Other real estate companies may use different methodologies for calculating Cash NOI, and accordingly, the Company's presentation of Cash NOI may not be comparable to other real estate companies.

Cash NOI is a non-GAAP measure used by the Company in evaluating the CRE segment’s operating performance as it is an indicator of the return on property investment, and provides a method of comparing performance of operations, on an unlevered basis, over time. Cash NOI should be not be viewed as a substitute for, or superior to, financial measures calculated in accordance with GAAP. In connection with the Company's decision to convert to a REIT in 2017, the Company has revised its definition of NOI to adjust Operating Profit for termination income, lease incentive amortization, and favorable/unfavorable lease amortization. We refer to amounts reported in this MD&A under our new definition as "Cash NOI" to distinguish from the amounts previously reported under our prior definition. While there is no standard industry definition of NOI, the Company believes its revised definition is more closely aligned with current practices of other REITs.

A reconciliation of Commercial Real Estate segment operating profit to Commercial Real Estate segment Cash NOI is as follows:
  Quarter Ended September 30, Nine Months Ended September 30,
(dollars in millions) 2017 2016 Change 2017 2016 Change
Commercial Real Estate Operating Profit $13.6
 $13.5
 
 $41.3
 $41.3
 
Adjustments:     
      
Depreciation and amortization 6.6
 7.0
 
 19.7
 21.7
 
Straight-line lease adjustments (0.3) (0.4) 
 (1.3) (1.6) 
Lease incentive amortization —
 —
 
 —
 0.1
 
Favorable/(unfavorable) lease amortization (0.6) (0.9) 
 (2.2) (2.6) 
Termination income —
 —
 
 —
 (0.1) 
Other (income)/expense, net —
 0.1
 
 0.2
 0.2
 
Selling, general, administrative and other expenses 1.9
 0.9
 
 6.1
 4.0
 
Commercial Real Estate Cash NOI 21.2
 20.2
 4.8% 63.8
 63.0
 1.2%
Acquisitions/disposition and other adjustments (1.8) (1.5) 
 (4.9) (6.5) 
Commercial Real Estate Same-Store Cash NOI $19.4
 $18.7
 4.0% $58.9
 $56.5
 4.3%



28


Land Operations – Third quarter of 2017 compared with 2016
Effect of Property Sales Mix on Operating Results: Direct year-over-year comparison of the Land Operations segment results may not provide a consistent, measurable indicator of future performance because results from period to period are significantly affected by the mix and timing of property sales. Operating results, by virtue of each project’s asset class geography and timing are inherently variable. Earnings from joint venture investments are not included in segment revenue, but are included in operating profit. The mix of real estate sales in any year or quartergiven period can be diverse and can includehas historically included developed residential real estate, developable subdivision lots, undeveloped land andor property sold under threat of condemnation. The saleFurther, the timing of undeveloped landproperty or parcel sales has affected and vacant parcelscan significantly affect operating results in Hawaii generally provides higher margins than does the sale of developed property, due to the low historical cost basis of the Company’s Hawaii land. Consequently, Land Operations revenue trends, cash flows from the sales of real estate, and the amount of real estate held for sale on the Company's balance sheet do not necessarily indicate future profitability trends for this segment. a given period.
Additionally, the operating profit reported in each quarterperiod 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 land owned in Hawai‘i.
29

 Quarter Ended September 30,
(dollars in millions)2017 2016
Development sales revenue$1.5
 $3.3
Unimproved/other property sales revenue15.4
 9.5
Agribusiness revenue5.6
 5.2
Other operating revenues0.1
 0.1
Total Land Operations segment revenue$22.6
 $18.1
Operating expenses(16.4) (11.2)
Earnings from joint ventures2.9
 0.6
Reductions in solar investments, net(0.4) (0.2)
Interest and other income1.7
 0.5
Total Land Operations operating profit$10.4
 $7.8
Third quarter 2017: Land Operations operating revenue and operating profit were $22.6 million and $10.4 million, respectively. Operating results forAs a result, direct year-over-year comparison of the Land Operations segment results may not provide a consistent, measurable indicator of future performance. Further, Land Operations revenue trends, cash flows from the sales of real estate, and the amounts of real estate developments for sale on the Company's condensed consolidated balance sheet do not necessarily indicate future profitability trends for this segment.
Financial results - First quarter of 2021 compared with 2020
Results of operations for the first quarter ended March 31, 2021 and 2020 were as follows:
Three Months Ended March 31,
(amounts in millions; unaudited)20212020
Development sales revenue$— $3.6 
Unimproved/other property sales revenue11.3 2.1 
Other operating revenue1
5.8 5.3 
Total Land Operations operating revenue2
17.1 11.0 
Land Operations operating costs and expenses3
(8.2)(8.1)
Selling, general and administrative(0.9)(1.2)
Gain (loss) on disposal of assets, net0.1 — 
Earnings (loss) from joint ventures3.6 3.0 
Interest and other income (expense), net(0.3)(0.2)
Total Land Operations operating profit (loss)2
$11.4 $4.5 
1 Other operating revenue includes revenue related to trucking, renewable energy and diversified agriculture.
2 As described elsewhere in this Form 10-Q, during the current year, the Company changed the composition of its reportable segments which caused reported amounts (i.e., revenue and operating profit) in the historical period to be reclassified from Land Operations to Materials & Construction. All comparable information for the historical periods has been restated to reflect the impact of these changes.
3 Includes intersegment operating charges primarily from CRE that are eliminated in the consolidated results of operations.

First quarter of 2021: Land Operations revenue during the quarter ended March 31, 2021 was $17.1 million and included sales related tothe sale of unimproved/other properties, notably a 293-acre parcelresidential lot in Haiku, Maui, a 273-acre parcelHali‘imaile on the island of Kauai,Maui, as well as lots and a 1.5-acre parcelparcels to buyers (Grove Ranch and Valley Isle Produce) on Maui. Revenue also included other operating revenue related to the Company's legacy business activities in the Land Operations segment (primarily trucking service and renewable energy).
Land Operations operating profit of $11.4 million during the first quarter ended March 31, 2021 was primarily composed of the margins on the aforementioned sales activity, as well as profits generated from the operations of the segment's other legacy business activities. Earnings from joint ventures of $3.6 million during the first quarter ended March 31, 2021 was primarily driven by profitable closings at the Kukui‘ula joint venture projects in the period (discussion of cash distributed to the Company from the joint venture projects is included below).
First quarter of 2020: Operating revenue was $11.0 million and included the impact of current period development sales at Maui Business Park II as well as earnings fromand an unimproved land sale on the island of Kauai. Revenue also included other operating revenues related to the Company's real estate development-related joint ventures and investments. The segment results also included segment operating expenses of $16.4 million and non-cash reductionslegacy business activities in the carrying value of the Company's tax equity solar investments of $0.4 million.
Third quarter 2016: Land Operations operating revenue and operating profit were $18.1 million and $7.8 million, respectively. Operating results included sales of a 267-acre parcel in Haiku, Maui, a Kahala lot, as well as earnings from the Company's real estate development-related joint ventures and investments, partially offset by operating expenses of the segment and a $0.2 million non-cash reduction in the carrying value of the Company’s tax equity solar investments.

29


Land Operations – First nine months of 2017 compared with 2016
 Nine Months Ended September 30,
(dollars in millions)2017 2016
Development sales revenue$6.1
 $3.3
Unimproved/other property sales revenue21.4
 10.1
Agribusiness revenue18.0
 16.0
Other operating revenues0.2
 0.2
Total Land Operations segment revenue$45.7
 $29.6
Operating expenses(40.7) (29.3)
Earnings from joint ventures3.6
 1.0
Reductions in solar investments, net(2.6) (9.7)
Interest and other income3.7
 1.1
Total Land Operations operating profit (loss)$9.7
 $(7.3)
First nine months of 2017: Land Operations operating revenue and operating profit were $45.7 million and $9.7 million, respectively. Operating results for the Land Operations segment included sales related to a 293-acre parcel in Haiku, Maui, a 273-acre parcel(e.g., trucking service, renewable energy and diversified agribusiness operations).
Land Operations operating profit of $4.5 million during the first quarter ended March 31, 2020 was composed of the margins on the island of Kauai, a 3-acre parcel in Wailea, Maui, a 6-acre parcel in Haliimaile, Maui, two lots at Maui Business Park II development lot and a 0.8-acre vacant, urban parcel on Maui,Kauai unimproved property, as well as earningsincome/loss from the Company's real estate development-related joint ventures and investments. Thefrom the operations of the Land Operations segment's other legacy business activities.
30

Materials & Construction
Financial results - First quarter of 2021 compared with 2020
Results of operations for the first quarter ended March 31, 2021 and 2020 were as follows:
(dollars in millions; unaudited)Three Months Ended March 31,2021 vs 2020
20212020$%
Materials & Construction
Operating revenue1
$24.0 $26.4 $(2.4)(9.1)%
Operating costs and expenses(23.7)(25.0)1.3 (5.2)%
Selling, general and administrative(3.9)(4.5)0.6 (13.3)%
Intersegment operating charges, net2
(0.2)(0.6)0.4 (66.7)%
Income (loss) related to joint ventures(0.2)0.3 (0.5)(166.7)%
Interest and other income (expense), net— 0.1 (0.1)(100.0)%
Materials & Construction operating profit (loss)1
$(4.0)$(3.3)$(0.7)21.2%
Operating margin percentage(16.7)%(12.5)%
Depreciation and amortization$2.6 $2.8 $(0.2)(7.1)%
Backlog at period end3
$127.2 $62.1 $65.1 104.8%
1 As described elsewhere in this Form 10-Q, during the current year, the Company changed the composition of its reportable segments which caused reported amounts (i.e., revenue and operating profit) in the historical period to be reclassified from Land Operations to Materials & Construction. All comparable information for the historical periods has been restated to reflect the impact of these changes.
2 Intersegment operating charges, net for Materials & Construction represent amounts primarily from the Commercial Real Estate segment and are eliminated in the consolidated results of operations.
3 Backlog represents the total amount of revenue that Grace Pacific and Maui Paving, LLC, a 50-percent-owned unconsolidated affiliate, expect to realize on contracts awarded. Backlog primarily consists of asphalt paving and, to a lesser extent, Grace Pacific’s consolidated revenue from its construction-and traffic control-related products. Backlog includes estimated revenue from the remaining portion of contracts not yet completed, as well as revenue from approved change orders. The length of time that projects remain in backlog can span from a few days for a small volume of work to 36 months for large paving contracts and contracts performed in phases. This amount includes opportunity backlog consisting of government contracts in which Grace Pacific has been confirmed to be the lowest bidder and formal communication of the award is perfunctory at the time of this disclosure (such amounts were $51.9 million and $6.4 million as of March 31, 2021 and 2020, respectively. Circumstances outside the Company's control such as procurement or technical protests may arise that prevent the finalization of such contracts. Maui Paving's backlog as of March 31, 2021 and 2020 was $3.7 million and $7.6 million, respectively.

Materials & Construction revenue was $24.0 million for the first quarter ended March 31, 2021, compared to $26.4 million for the first quarter ended March 31, 2020. Operating loss was $4.0 million for the first quarter ended March 31, 2021, compared to operating loss of $3.3 million for the first quarter ended March 31, 2020. During the quarter ended March 31, 2021, the segment results also included a $2.6 million non-cash reductionoperating loss was primarily driven by low paving volumes driven by the timing of projects and inclement weather in the carrying value of the Company's Solar Investment.
First nine months of 2016: Land Operations operating revenue and operating loss were $29.6 million and $7.3 million, respectively. Operating results included a $9.7 million non-cash reduction in the carrying value of the Company’s Solar Investments, segment operating expenses,period, partially offset by revenuerobust materials (i.e., construction aggregate) production and sales. During the quarter ended March 31, 2020, the segment operating loss was primarily driven by project delays resulting from inclement weather, government agency-imposed delays and the then-emerging impacts of COVID-19 (including travel restrictions and resource availability for projects on neighbor islands).
The Company is continuing to monitor the performance of the M&C segment in the context of the overall industry and economy as impacted by the COVID-19 pandemic. However, based on the inherent uncertainty in the general economic environment, there can be no assurance that the carrying values associated with the long-lived assets and goodwill will be recoverable and impairments on such long-lived assets and goodwill may be required.
Backlog at March 31, 2021 was $127.2 million (as a result of the disposal of GPRM at the end of the second quarter ended June 30, 2020, this metric excludes backlog related to GPRM). On a comparable basis (i.e., adjusted to exclude GPRM backlog of $19.9 million as of March 31, 2020), backlog increased from $62.1 million at March 31, 2020. The increase in backlog was primarily driven by an increase in the amount of marketed bid opportunities and an improvement in the rate of bids won by the Company.
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
31

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 is presented by the Company as a widely used non-GAAP measure of operating performance for real estate companies. FFO is defined by the National Association of Real Estate Investment Trusts ("Nareit") December 2018 Financial Standards White Paper as follows: net income (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 and (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.
The Company believes that, subject to the following limitations, FFO provides a 267-acre parcelsupplemental measure to net income (calculated in Haiku, Maui,accordance with GAAP) for comparing its performance and operations to those of other REITs. FFO does not represent an alternative to net income calculated in accordance with GAAP. In addition, FFO does 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 to cash flow from operating activities, determined in accordance with GAAP, as a Kahala lot, nine Ka Milo units,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.

The Company presents both non-GAAP measures and reconciles each to the most directly-comparable GAAP measure as well as reconciling FFO to Core FFO. The Company's FFO and Core FFO may not be comparable to FFO non-GAAP measures reported by other REITs. These other REITs may not define the term in accordance with the current Nareit definition or may interpret the current Nareit definition differently.
NOI is a non-GAAP measure used internally in evaluating the unlevered performance of the Company's Commercial Real Estate portfolio. The Company 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 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 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 sale of electricity generated bydirect property-related expenses paid or payable in cash that are incurred in operating the Company's renewable energyCommercial 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.

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Discontinued Operations
The revenue, operating loss,Company reports NOI and after-tax effectsOccupancy on a Same-Store basis, which includes the results of discontinued operationsproperties that were owned and operated for the quarterentirety of the prior calendar year and ninecurrent 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. While there is management judgment involved in classifications, new developments and redevelopments are moved into the Same-Store pool after one full calendar year of stabilized operation. Properties included in held for sale are excluded from Same-Store.
The Company 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 months ended September 30, 2017 March 31, 2021and 2016 were2020 are as follows (in millions):
Three Months Ended March 31,
20212020
Net income (loss) available to A&B common shareholders$9.9 $6.2 
Depreciation and amortization of commercial real estate properties9.5 10.2 
Gain on the disposal of commercial real estate properties, net(0.2)(0.5)
FFO$19.2 $15.9 
Exclude items not related to core business:
Land Operations Operating Profit(11.4)(4.5)
Materials & Construction Operating (Profit) Loss4.0 3.3 
Loss from discontinued operations— 0.2 
Income (loss) attributable to noncontrolling interest— (0.6)
Income tax expense (benefit)0.1 — 
Non-core business interest expense3.5 4.0 
Core FFO$15.4 $18.3 
Reconciliations of Core FFO starting from CRE operating profit for the three months ended March 31, 2021 and 2020 are as follows (in millions):
Three Months Ended March 31,
20212020
CRE Operating Profit$15.4 $18.1 
Depreciation and amortization of commercial real estate properties9.5 10.2 
Corporate and other expense(6.0)(6.2)
Core business interest expense(3.5)(3.8)
Core FFO$15.4 $18.3 
 Quarter Ended September 30, Nine Months Ended September 30,
 2017 2016 2017 2016
Sugar operations revenue (Land Operations)$0.4
 $35.7
 $22.9
 $73.7
        
Operating loss before income taxes$(1.1) $(17.1) $(2.2) $(51.2)
Gain (loss) on asset dispositions(0.2) —
 6.0
 —
Income (loss) from discontinued operations before income taxes(1.3) (17.1) 3.8
 (51.2)
Income tax (expense) benefit0.5
 3.5
 (1.4) 23.1
Income (loss) from discontinued operations$(0.8) $(13.6) $2.4
 $(28.1)
        
Basic earnings (loss) per share$(0.02) $(0.28) $0.04
 $(0.58)
Diluted earnings (loss) per share$(0.02) $(0.27) $0.05
 $(0.57)
Third quarter 2017: Loss from discontinued operations of $0.8 million during the third quarter of 2017 reflected exit related costs, as well as property removal and restoration costs. See Note 14, "Cessation of Sugar Operations" for further discussion regarding the cessation and the related costs associated with such exit and disposal activities.


30
33



Third quarter 2016: Loss from discontinued operationsReconciliations of $13.6 million duringCommercial Real Estate operating profit to Commercial Real Estate NOI for the third quarter of 2016 reflected sugar operations cessation costs, partially offset by results of the sugar operations. The cessation charges included accelerated depreciation, employee severance benefits and related costs, and property removal, restoration and other exit-related costs.
First nine months of 2017: Income from discontinued operations of $2.4 million during the first nine months of 2017 reflected the gain on asset dispositions and the results of operations related to the final sugar voyage, partially offset by cessation-related costs. During the first ninethree months ended September 30, 2017, the Company sold mobile equipment assets, its bulk sugar transportation vesselMarch 31, 2021 and factory equipment, which resulted in a total gain of $6.0 million. Additionally, the Company recognized revenue2020 are as follows (in millions):
Three Months Ended March 31,
20212020
Commercial Real Estate Operating Profit (Loss)$15.4 $18.1 
Plus: Depreciation and amortization9.5 10.2 
Less: Straight-line lease adjustments(0.8)(0.8)
Less: Favorable/(unfavorable) lease amortization(0.2)(0.3)
Plus: Other (income)/expense, net(0.1)(0.4)
Plus: Selling, general, administrative and other expenses1.5 2.1 
Commercial Real Estate NOI25.3 28.9 
Less: NOI from acquisitions, dispositions, and other adjustments(0.6)(0.6)
Same-Store NOI$24.7 $28.3 

Liquidity and operating profit during the first nine months of 2017, primarily related to the final delivery of sugar inventory, which occurred in January 2017. Capital Resources
Overview
The cessation charges included costs related to employee severance and benefits, as well as property removal, restoration and other exit-related costs. See Note 14, "Cessation of Sugar Operations" for further discussion regarding the cessation and the related costs associated with such exit and disposal activities.
First nine months of 2016: Loss from discontinued operations of $28.1 million during the first nine months of 2016 reflected sugar operations cessation costs, partially offset by results of the sugar operations. The cessation charges included accelerated depreciation, employee severance benefits and related costs, and property removal, restoration and other exit-related costs.

MATERIALS & CONSTRUCTION
Materials & Construction -Third quarterof 2017 compared with 2016
 Quarter Ended September 30,
(dollars in millions)2017 2016 Change
Revenue$55.0
 $52.1
 5.6%
Operating profit$6.5
 $5.6
 16.1%
Operating profit margin11.8% 10.7%  
Depreciation and amortization$3.1
 $2.9
 6.9%
Aggregate used and sold (tons in thousands)179.7
 158.1
 13.7%
Asphaltic concrete placed (tons in thousands)165.8
 126.9
 30.7%
Backlog1,2 at period end
$211.3
 $242.5
 (12.9)%
1
Backlog represents the total of (1) the amount of revenue that Grace Pacific and Maui Paving, LLC, a 50-percent-owned unconsolidated affiliate, expect to realize on contracts awarded and (2) government contracts in which Grace Pacific has been confirmed to be the lowest bidder and formal communication of the award is perfunctory ($31.8 million as of September 30, 2017). Backlog primarily consists of asphalt paving and, to a lesser extent, Grace Pacific’s consolidated revenue from its Prestress and construction-and traffic control-related products. Backlog includes estimated revenue from the remaining portion of contracts not yet completed, as well as revenue from approved change orders. The length of time that projects remain in backlog can span from a few days for a small volume of work to 36 months for large paving contracts and contracts performed in phases. Maui Paving's backlog at September 30, 2017 and 2016 was $12.9 million and $19.1 million, respectively.
2
As of September 30, 2017 and 2016, the backlog included contractual revenue with related parties of $1.0 million and $1.8 million, respectively.
Materials & Construction revenue for the third quarter of 2017 increased $2.9 million, or 5.6%, as compared to the third quarter of 2016, primarily due to higher paving and Prestress volumes and a bulk sale of imported aggregates, partially offset by lower average prices per unit sold in paving, Prestress and GLP, as well as lower sales volumes for hot mix and liquid asphalt. Revenue during the third quarter of 2017 reflected approximately 179.7 thousand tons of aggregate used and sold and 165.8 thousand tons of asphaltic concrete placed, as compared to 158.1 thousand tons of aggregate used and sold and 126.9 thousand tons of asphaltic concrete placed during 2016. Backlog at the end of September 30, 2017 was $211.3 million compared to $242.9 million as of December 31, 2016. The decrease in backlog from the fourth quarter of 2016 is primarily due to the amount of work completed and billed work during the period and the lack of major bids offered by governmental entities during the first nine months of 2017 compared to first nine months 2016. Backlog reasonably expected to be filled in the current fiscal year is approximately $153.0 million.
Operating profit increased $0.9 million, or 16.1%, in the third quarter of 2017, as compared to the third quarter of 2016, primarily due to higher earnings from unconsolidated affiliates and Prestress, partially offset by lower paving margins resulting from competitive pricing pressures.


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Materials & Construction -First nine months of 2017compared with 2016
 Nine Months Ended September 30,
(dollars in millions)2017 2016 Change
Revenue$155.7
 $144.7
 7.6%
Operating profit$18.8
 $18.5
 1.6%
Operating profit margin12.1% 12.8%  
Depreciation and amortization$9.2
 $8.8
 4.5%
Aggregate used and sold (tons in thousands)526.3
 500.8
 5.1%
Asphaltic concrete placed (tons in thousands)442.9
 331.7
 33.5%
Materials & Construction revenue for the first nine months of 2017 increase $11.0 million, or 7.6%, as compared to the first nine months of 2016, primarily due to higher paving and Prestress volumes, a bulk sale of imported aggregates and higher levels of construction-related services, partially offset by lower average prices per unit sold in paving, Prestress product and liquid asphalt, as well as lower sales volumes for hot mix and liquid asphalt. Revenue during the first nine months of 2017 reflected approximately 526.3 thousand tons of aggregate used and sold and 442.9 thousand tons of asphaltic concrete placed, as compared to 500.8 thousand tons of aggregate used and sold and 331.7 thousand tons of asphaltic concrete placed during 2016.
Operating profit increased $0.3 million, or 1.6%, in the first nine months of 2017, as compared to the first nine months of 2016, primarily due to higher volumes in paving and Prestress products, an improved mix of Roadway higher margin work, lower unit inventory costs for liquid asphalt, and lower hot mix asphalt production cost per ton partially offset by paving work completed that were bid at lower margins due to competitive pricing pressures and lower volumes of hot mix asphalt and third party aggregate sales. The Company expects the competitive pricing and market conditions that have impacted the segment financial performance to persist.

LIQUIDITY AND CAPITAL RESOURCES
Overview: A&B's primary liquidity needs have historically been to support working capital requirements and fund capital expenditures, commercial real estate acquisitions and real estate developments. A&B’sCompany's principal sources of liquidity to meet its business requirements and plans both in the short-term (i.e., the next twelve months from March 31, 2021) and long-term (i.e., beyond the next twelve months) have generally been cash flows provided by operating activities,activities; available cash and cash equivalent balances,equivalents; and borrowing capacity under its various credit facilities. 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; shareholder distributions; and working capital needs.
A&B’s operating income is generated by its subsidiaries. There areAs of March 31, 2021, there have been no material restrictions onchanges in the Company's ability to generate and obtain adequate amounts of A&B’s wholly owned subsidiariescash to pay dividends or make other distributionsmeet its business requirements and plans in the short-term and long-term from the end of the preceding fiscal year ended December 31, 2020.
Known contractual obligations
A description of material contractual commitments is contained in the Notes to A&B. A&B regularly evaluates investment opportunities, including development projects, commercial real estate acquisitions, joint venture investments, share repurchases, business acquisitionsConsolidated Financial Statements included in Part II, Item 8 of the 2020 Form 10-K, and relates to the Company's Notes payable and other strategic transactionsdebt, Operating lease liabilities 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 2020 Form 10-K, and includes contractual interest payments for Notes payable and other debt as well as amounts to increase shareholder value. A&B cannot predict whetherbe spent on contractual non-cancellable purchase obligations (that specifies all significant terms, including fixed or when it may make investments or what impact any such transactions could have on A&B’s resultsminimum quantities to be purchased, pricing structure and approximate timing of operations, cash flows or financial condition. A&B’s cash flows from operations, borrowing availability and overall liquiditythe transaction that are subject to certain risks and uncertainties, including those describednot recorded as liabilities in the section entitled "Risk Factors"consolidated balance sheet).
As of March 31, 2021, there have been no material changes in the Company's known contractual obligations from the end of the Company’s 2016 Annual Reportpreceding fiscal year ended December 31, 2020. Refer to Note 6, Note 11 and Note 13 in this report for further discussion.
As noted above, regarding the approved plan to effect the termination of the Defined Benefit Plans, in 2022, after receiving approval from the IRS and the PBGC and following completion of the limited lump-sum offering, the Company expects to make an additional cash contribution in order to fully fund the Defined Benefit Plans on a plan termination basis, followed by the purchase of annuity contracts to transfer its remaining liabilities under the Defined Benefit Plans. These additional cash contributions are expected to range between $25 million and $40 million. However, the actual amount of this cash contribution requirement will depend upon the nature and timing of participant settlements, interest rates, as well as prevailing market conditions.
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 2020 Form 10-K. As of March 31, 2021, 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, 2020. Refer to Note 8 in this report for further discussion.
Cash Flows: Cash flows used in operating activities totaled $45.2 million for
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Sources of liquidity
As noted above, one of the nine months ended September 30, 2017 as compared toCompany's principal sources of liquidity has been cash flows provided by operating activities of $48.4operations, which were $20.6 million for the ninethree months ended September 30, 2016. The decreaseMarch 31, 2021, primarily driven in the current year by cash generated from the CRE segment (the Company's core business). Total cash flows provided by operations did not fluctuate materially from operatingthe prior year ($18.9 million for the three months ended March 31, 2020), but, 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.
The Company's other primary sources of liquidity include its cash and cash equivalents of $32.0 million as of March 31, 2021, 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 March 31, 2021), as well as long-term basis. With respect to the revolving credit facility for general A&B purposes, as of March 31, 2021, the Company had $80.0 million of borrowings outstanding, $1.1 million letters of credit issued against and $368.9 million of available capacity on such revolving credit facility (which currently has a term through September 15, 2022). Further, other sources of liquidity for the Company include trade receivables, contracts retention, and inventories (excluding parts, materials and supplies), totaling $59.4 million at March 31, 2021. As of March 31, 2021, there were no material changes to the Company's other primary sources of liquidity from the end of the preceding fiscal year ended December 31, 2020.
Other uses (or sources) of liquidity
The Company may use (or, in some periods, generate) cash through various investing activities or financing activities. Net cash provided by investing activities was $10.4 million for the three months ended March 31, 2021, as compared to net cash provided of $2.9 million for the three months ended March 31, 2020. The increase is net cash provided by investing activities during the three months ended March 31, 2021 was primarily attributed to cash outlays for working capital purposes,driven by distributions from the Company's land development joint ventures (primarily at its Kukui‘ula joint venture projects), including a discretionary pension contribution and employee severance payments$10.0 million distribution related to a large land parcel sale closed by the cessation of HC&S sugar operations.main joint venture project in the period.
Cash flows used in investing activities totaled $38.0 million during the first nineperiod is primarily composed of capital expenditures. In the three months ended March 31, 2021 the Company had capital expenditures for property, plant and equipment of 2017, as compared to $54.6 million during the first nine months of 2016. The period-to-period change in cash flows used in investing activities was primarily due to cash outlays of $82.4 million related$5.2 million. 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, of Manoa Marketplacedevelopment 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 first quarter of 2016.market.

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Capital expenditures for the third quarter of 2017 and 2016 was $10.3 million and $5.5 million, respectively. Capital expendituresrespective periods for the first nine months of 2017 totaled $33.7 million as compared to $105.3 million for the first nine months of 2016. Net cash flows used in investing activities for capital expendituresall segments were as follows:
Three Months Ended March 31,
(dollars in millions; unaudited)20212020Change
CRE property acquisitions, development and redevelopment$3.2 $3.5 (8.6)%
Building/area improvements (Maintenance Capital Expenditures)1.2 1.3 (7.7)%
Tenant space improvements (Maintenance Capital Expenditures)0.2 0.7 (71.4)%
Quarrying and paving0.6 0.2 200.0%
Agribusiness and other— 0.5 (100.0)%
Total capital expenditures¹$5.2 $6.2 (16.1)%
 Quarter Ended September 30,
(dollars in millions)2017 2016 Change
Commercial real estate property acquisitions/improvements$5.6
 $1.6
 250.0%
Tenant improvements2.5
 0.6
 316.7%
Quarrying and paving1.1
 1.7
 (35.3)%
Agribusiness and other1.1
 1.6
 (31.3)%
Total capital expenditures1
$10.3
 $5.5
 87.3%
      
 Nine Months Ended September 30,
(dollars in millions)2017 2016 Change
Commercial real estate property acquisitions/improvements$22.0
 $88.1
 (75.0)%
Tenant improvements4.0
 3.0
 33.3%
Quarrying and paving5.1
 7.1
 (28.2)%
Agribusiness and other2.6
 7.1
 (63.4)%
Total capital expenditures1
$33.7
 $105.3
 (68.0)%
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 tabletables above.
CashGiven the uncertainty around the duration and economic impact of the COVID-19 pandemic, the Company is not able to project capital expenditures for 2021 related to any of its segments. However, for 2021, the Company anticipates activity related to property acquisitions, development and redevelopment and building/area improvements and tenant space improvements to be higher than 2020 expenditures.
35

Net cash flows used in financing activities was $56.2 million for the three months ended March 31, 2021, as compared to net cash provided by financing activities were $94.3 million for the first ninethree months ended March 31, 2020 of 2017,$100.5 million. The change in cash flows from financing activities in 2021 as compared to $10.72020 was due primarily to prior year activity (the Company drawing $120 million on its credit facility as a safeguard due to uncertainty caused by the COVID-19 pandemic during the first ninequarter ended March 31, 2020) as compared to current year activity (most notably, the Company making a $31 million payment on its credit facility in the quarter ended March 31, 2021 in addition to the timing of dividend payments).
Other capital resource matters
The Company frequently utilizes §1031 or §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 three months ended March 31, 2021, 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 2016. the Code. Further, during the three months ended March 31, 2021, there were no acquisitions utilizing eligible/available proceeds from tax-deferred sales or involuntary conversions.
As of March 31, 2021, there are no amounts from tax-deferred sales that are available for use and have not been reinvested under §1031 of the Code. As of March 31, 2021, the Company holds approximately $14.3 million from tax-deferred involuntary conversions that had not yet been reinvested under §1033 of the Code.
Trends, events and uncertainties
As noted above, the COVID-19 pandemic has adversely impacted the global economy; has contributed to significant volatility in financial markets; and both its near-term and long-term economic impacts remain uncertain. This uncertainty includes the potential need for additional capital resources to maintain the Company's business and operations during a period of potential declining or delayed rent payments from CRE tenants and/or potential declining revenue from its other businesses.
The change fromCompany's ability to retain outstanding borrowings and utilize remaining amounts available under its revolving credit facility will depend on its continued compliance with the prior yearapplicable financial covenants and other terms of the Company's notes payable and other debt arrangements. The Company was primarily duein compliance with its financial covenants for all outstanding balances as of March 31, 2021. However, as a result of the various uncertainties and factors surrounding COVID-19, the Company may be unable to higher repayment amounts madecontinue 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 long term debt, offsettingfinancial condition. The Company intends to closely monitor the higher amounts borrowed underimpact of COVID-19 on its business and intends to operate in compliance with these covenants or seek to obtain waivers or modifications to these financial covenants to enable the Company's revolving senior credit facility duringCompany to maintain compliance.
Based on its current outlook, the nine months ended September 30, 2016.
The Company believes that funds generated from results of operations,cash provided by operating activities; available cash and cash equivalents,equivalent balances; and available borrowingsborrowing capacity under its various credit facilities will be sufficient to financemeet the Company’sneeds of the Company's business requirements forand plans both in the short-term (i.e., the next fiscal year, including working capital, capital expenditures,twelve months from March 31, 2021) and potential acquisitions and stock repurchases.long-term (i.e., beyond the next twelve months). There can be no assurance, however, that the Company will continue to generate cash flows at or above current levels or that it will be able to maintain its ability to borrow under its available credit facilities.
Other Sources of Liquidity: Additional sources of liquidity for As the Company consisted of cash and cash equivalents, trade and income tax receivables, contracts retention, and inventories, that totaled $114.3 million at September 30, 2017, an increase of $13.9 million from December 31, 2016. This net increase is primarily due to an increase in cash and cash equivalents of $11.1 million, income tax receivables of $15.3 million, partially offset by a decrease in sugar inventories of $17.5 million as a result of the cessation of the sugar operations.
The Company also has revolving credit and term facilities that provide additional sources of liquidity for working capital requirements or investment opportunities on a short-term as well as longer-term basis. On September 15, 2017, the Company entered into a Second Amended and Restated Credit Agreement ("A&B Revolver") with Bank of America N.A., as administrative agent, First Hawaiian Bank, and other lenders party thereto, which amended and restatedcircumstances underlying its existing $350 million committed revolving credit facility ("Revolving Credit Facility"). The A&B Revolver increased the total revolving commitments to $450 million, extended the term of the Revolving Credit Facility to September 15, 2022, amended certain covenants, and reduced the interest rates and fees charged under the Revolving Credit Facility. All other terms of the Revolving Credit Facility remain substantially unchanged.
Total debt as of September 30, 2017 was $625.8 million compared to $515.1 million as of December 31, 2016. The increase in debt of 21.5% during the first nine months of 2017 was primarily attributed to net borrowings of $108.9 million, inclusive of net draws on the A&B Revolver of $140.3 million and a new second mortgage of $5.0 million related to Kailua Town Center, offset by amortization and other repayments of the Company's term loans. As of September 30, 2017, available capacity under the unsecured, committed credit facility totaled $283.0 million.

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Balance Sheet: The Company has a working capital surplus of $110.2 million as of September 30, 2017, which is an increase of $137.0 million, from a $26.8 million deficit as of December 31, 2016. Thecurrent outlook may change, in the working capital surplus is primarily due to an increase in prepaid and other assets, cash, real estate held for sale, and income tax receivables.
At September 30, 2017, the Company believes it was in compliance with all of its covenants under its credit facilities. While there can be no assurance that the Company will remain in compliance with its covenants,continue to actively monitor the Company expectssituation and may take further actions that it will remaindetermines is in compliance.the best interest of its business, financial condition and liquidity and capital resources.

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Other Matters

Critical accounting estimates
Tax-Deferred Real Estate Exchanges:
Sales & Purchases- During the third quarter of 2017, the Company had no sales that qualified for tax-deferral treatment under Internal Revenue Code Section 1031.  During the second quarter of 2017, the Company utilized $10.1 million from tax-deferred sales to acquire Honokohau Industrial Park under a reverse 1031 exchange transaction. During the first quarter of 2016, the Company acquired both the leasehold and leased fee interests of Manoa Marketplace, a retail center on Oahu for $82.4 million. The proceeds from the sales of the three Mainland properties that were completed during the second quarter of 2016 were applied to the Manoa Marketplace acquisition under a reverse 1031 transaction that qualifies for tax-deferral treatment under Internal Revenue Code 1031.
Proceeds from 1031 tax-deferred sales are held in escrow pending future use to purchase new real estate assets. The proceeds from 1033 condemnations are held by the Company until the funds are redeployed. As of September 30, 2017, there were approximately $3.6 million from tax-deferred sales or condemnations that had not been reinvested.
Commitments, Contingencies and Off-balance Sheet Arrangements: A description of other commitments, contingencies, and off-balance sheet arrangements at September 30, 2017, and herein incorporated by reference, is included in Note 3 to the condensed consolidated financial statements of Item 1 in this Form 10-Q.
OTHER MATTERS
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 2016 Form 10-K.
Critical Accounting Estimates:The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America, upon which the Management’sManagement'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,
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inevitably, differ from those critical accounting estimates. These differences could be material. The most significant accounting estimates inherent in the preparation of A&B’sthe Company's financial statements were described inManagement’sManagement's Discussion and Analysis of Financial Condition and Results of Operations contained in the Company’s 2016Company's 2020 Form 10-K.

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.
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ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
Information concerning market risk is incorporated herein by reference to Item 7A of the Company’sCompany's Form 10-K for the fiscal year ended December 31, 2016.2020. There hashave been no material changechanges in the quantitative and qualitative disclosures about market risk since December 31, 2016.2020.

ITEM 4. CONTROLS AND PROCEDURES
(a)Disclosure 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 Securities Exchange Act of 1934), as amended (the "Exchange Act")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 March 31, 2021, the end of such period, the Company'sCompany’s disclosure controls and procedures arewere effective.
(b)    Changes in Internal Control Over Financial Reporting
There have not been noany changes in the Company's internal controlscontrol 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 first quarter to which this report relates that have materially affected, or are reasonably likely to materially affect, the Company's internal control over financial reporting.

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PART II. OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
The information set forth under the "Legal Proceedings and Other Contingencies" section in Note 38 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
Issuer PurchasesThere were no equity securities sold by the Company during the period covered by this report that were not registered under the Securities Act.
There were no purchases or repurchases of Equity Securitiesequity securities made by or on behalf of the Company during the period covered by this report.
 
 
 
 
Period
 
 
 
Total number of
shares purchased1
 
 
 
Average price
paid per share
Total number of
shares purchased as
part of publicly
announced plans
or programs
Maximum number
of shares that
may yet be purchased
under the plans
or programs
July 1-31, 201760$42.19——
August 1-31, 201716,954$43.53——
September 1-30, 20173,025$43.68——
1
Represents shares accepted in satisfaction of tax withholding obligations arising upon option exercises.
ITEM 3. DEFAULTS UPON SENIOR SECURITIES
None.
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
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None.

ITEM 6. EXHIBITS
EXHIBIT INDEX
10. Material Contracts
10.b.1.(xl)     Alexander & Baldwin, Inc. 2021 Executive Simplification Incentive Program, effective February 22, 2021.
10.b.1.(xxx)    Amendment No. 2 to Alexander & Baldwin, Inc. One-Year Performance Improvement Incentive Plan, effective January 1, 2018.
10.b.1.(xxxiv)    Amendment No. 3 to the Alexander & Baldwin, Inc. Excess Benefits Plan, effective as of April 1, 2020.
*All exhibits listed under 10.b.1. are management contracts or compensatory plans or arrangements.
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 March 31, 2021, formatted in XBRL (eXtensible Business Reporting Language): (i) Condensed Consolidated Balance Sheets as of March 31, 2021 and December 31, 2020; (ii) Condensed Consolidated Statements of Operations for the three months ended March 31, 2021 and 2020; (iii) Condensed Consolidated Statements of Comprehensive Income (Loss) for the three months ended March 31, 2021 and 2020; (iv) Condensed Consolidated Statements of Cash Flows for the three months ended March 31, 2021 and 2020; (v) Condensed Consolidated Statements of Equity for the three months ended March 31, 2021 and 2020; and (vi) Notes to Condensed Consolidated Financial Statements.
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SIGNATURES
31.1Certification of Chief Executive Officer, as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
31.2Certification of Chief Financial Officer, as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
32Certification 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.
101The following information from Alexander & Baldwin, Inc.’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2017, formatted in XBRL (eXtensible Business Reporting Language): (i) Condensed Consolidated Statements of Operations for the nine months ended September 30, 2017 and September 30, 2016, (ii) Condensed Consolidated Statement of Comprehensive Income (Loss) for the three and nine months ended September 30, 2017 and September 30, 2016, (iii) Condensed Consolidated Balance Sheets at September 30, 2017 and December 31, 2016, (iv) Condensed Consolidated Statement of Cash Flows for the nine months ended September 30, 2017 and September 30, 2016, (v) Condensed Consolidated Statements of Equity for the nine months ended September 30, 2017 and September 30, 2016, and (vi) the Notes to the Condensed Consolidated Financial Statements.
95Mine Safety Disclosure

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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.
(Registrant)
Date:November 8, 2017/s/ James E. Mead
James E. Mead
Chief Financial Officer
Date:November 8, 2017/s/ Paul K. Ito
Paul K. Ito
Senior Vice President, Finance and Treasurer


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EXHIBIT INDEX
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.
32April 30, 2021
Certification of Chief
By: /s/ Brett A. Brown
Brett A. Brown
Executive OfficerVice President 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.
101
The following information from Alexander & Baldwin, Inc.’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2017, formatted in XBRL (eXtensible Business Reporting Language): (i) Condensed Consolidated Statements of Operations for the three and nine months ended September 30, 2017 and September 30, 2016, (ii) Condensed Consolidated Statement of Comprehensive Income (Loss) for the three and nine months ended September 30, 2017 and September 30, 2016, (iii) Condensed Consolidated Balance Sheets at September 30, 2017 and December 31, 2016, (iv) Condensed Consolidated Statement of Cash Flows for the nine months ended September 30, 2017 and September 30, 2016, (v) Condensed Consolidated Statements of Equity for the nine months ended September 30, 2017 and September 30, 2016 and (vi) the Notes to the Condensed Consolidated Financial Statements.
95April 30, 2021
Mine Safety Disclosure
By: /s/ Clayton K.Y. Chun
Clayton K.Y. Chun
Senior Vice President, Chief Accounting Officer and Controller


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