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Alexander & Baldwin Inc. (ALEX) filed Quarterly Report for the period ended 2011-09-30.
Alexander & Baldwin Inc. has a market cap of $1.76 billion; its shares were traded at around $42.32 with a P/E ratio of 37.1 and P/S ratio of 1.1. The dividend yield of Alexander & Baldwin Inc. stocks is 3%.
This is the annual revenues and earnings per share of ALEX over the last 10 years. For detailed 10-year financial data and charts, go to 10-Year Financials of ALEX.
Highlight of Business Operations:
Ocean Transportation s operating profit of $61.1 million (which includes $6.1 million of CLX2 shutdown expenses) decreased $28.8 million in the first nine months of 2011. The decrease in operating profit was principally due to $15.8 million in lower yields and cargo mix due to competitive pricing pressure, principally in the China trade, and higher fuel costs. Additionally, terminal handling costs increased $6.1 million due primarily to higher rates, and outside transportation costs increased $1.3 million due to higher related volume. Vessel operating costs increased by $3.3 million, primarily due to wages related to annual contract increases and drydock expenses, which were partially offset by recoverable fuel costs. The increase in costs and lower yields were partially offset by $8.3 million in higher overall cargo volumes. Operating profit was also impacted by $3.5 million in lower SSAT earnings due to the same reason cited for the quarter.Agribusiness revenue for the first nine months of 2011 decreased $5.1 million, or 5 percent, compared with the first nine months of 2010. The decrease was primarily due to a $9.3 million decrease in raw sugar revenue, principally due to the timing of sugar voyages, and a $5.6 million decrease in coffee revenue due to the sale of the assets of the coffee operation in the first quarter of 2011. The decrease in revenues was partially offset by $4.1 million in higher molasses revenue resulting from higher sales volume, $2.2 million in higher power sales revenue resulting from higher prices, and $2.0 million in higher third-party charter revenue.
Operating profit for the first nine months of 2011 increased $13.4 million compared to the first nine months of 2010. The increase was primarily due to $11.4 million in lower raw sugar production costs, $4.0 million higher power margins, primarily from higher prices and lower power production costs, $3.3 million improvement in molasses sales margins due to higher sales volumes and prices, $3.1 million improvement due to the sale of the coffee assets and inventory, which recorded a $1.9 million write-down in the prior year, and $2.2 million in higher specialty sugar margin due to higher prices and lower production costs. These increases were partially offset by a $9.3 million decline in raw sugar volume sold.
The following discussion provides an update of the Company s outlook for 2011. All of the forward-looking statements made herein are qualified by the inherent risks of the Company s operations and the markets it serves, as more fully described on pages 17-25 of the Company s 2010 Form 10-K. The Company s overall outlook for 2011 continues to assume a slow recovery of the U.S. economy and modest growth in Hawaii, principally from a continued recovery of the visitor industry. Hawaii s visitor industry is performing well. Visitor expenditures are up nearly 15 percent compared to 2010 and tourism officials forecast $12.6 billion in visitor expenditures for the year, second only to 2007 s record expenditures of $12.8 billion. In September, visitor arrivals from Japan increased modestly compared to last year, the first monthly increase since the March earthquake and tsunami. There are two primary sources of periodic economic forecasts and data for the State of Hawaii: The University of Hawaii Economic Research Organization (UHERO) and the State s Department of Business, Economic Development and Tourism (DBEDT). Economic information included herein has been derived from economic reports available on UHERO s and DBEDT s websites that provide more complete information about the status of and forecast for the Hawaii economy. Second China-Long Beach Express (CLX2): On August 8, 2011, the Company announced the discontinuation of CLX2 and its last eastbound sailing occurred on August 22,2011. In the third quarter of 2011, the Company recorded $18 million of after-tax losses related to the final operations and termination of CLX2. In future quarters, the Company expects to record additional losses primarily related to the off-hiring of excess containers. The aggregate estimate of after-tax losses from the discontinuation of CLX2 remains between $20 and $25 million, consistent with initial projections. The termination of CLX2 has not impacted the Company s Hawaii, Guam or CLX1 services. Ocean Transportation: The Company continues to expect modest volume improvement in 2011 for its Hawaii trade lane; however, fourth quarter Hawaii volume is expected to be relatively flat with last year s fourth quarter. Guam volumes have been lower than last year due to competitive pressures and weaker market conditions, driven primarily by lower Japan tourism and the continued delay of military relocation construction. Recently, a competitor announced that it will be discontinuing service to Guam on November 10. While we expect another carrier to enter the market and provide a replacement service, there may be a moderate near-term increase in Guam container volume resulting from the discontinuation of the competitor s service. In addition, the Company expects that CLX1 s fourth quarter performance, relative to 2010, will continue to be negatively impacted by the overcapacity and lower demand in the Transpacific. As a result, the Company expects that, excluding the impacts from CLX2, Ocean Transportation operating profit for the fourth quarter of 2011 and for full-year 2011 will be lower than comparable periods in 2010. Ocean Transportation s performance continues to be highly dependent on the future performance of the national and Hawaii economies, fuel prices, Transpacific freight rates, and other factors that, in the current environment, cannot be predicted with certainty. Logistics Services: The Company expects fourth quarter performance to be consistent with performance in last year s fourth quarter. As a result, overall performance for 2011 will be relatively flat compared to 2010. Real Estate Leasing: Expected stability in market rents and improved occupancy in the Company s Mainland portfolio are supporting an expectation for modest improvement in overall Leasing results as compared to 2010; however, performance for the fourth quarter is expected to be relatively flat with last year. Real Estate Development and Sales: Real estate sales are opportunistic and episodic by nature and, therefore, difficult to predict with certainty. The Company produced good sales results for the first nine months of the year. Real estate sales closings for the remainder of the year, however, are expected to be minimal, due to the timing of sales. Agribusiness: Agribusiness is expected to continue its strong performance for the remainder of the year based on forecasted sugar production and pricing that remains higher than in 2010. Financial performance for the fourth quarter is expected to approximate 2010 performance, despite the non-recurrence of the federal disaster relief payment received in the prior year quarter. OTHER MATTERS Dividends: On October 27, 2011, the Company s Board of Directors announced a fourth-quarter 2011 dividend of $0.315 per share, payable on December 1, 2011 to shareholders of record as of the close of business on November 10, 2011. Share Repurchase Authorization: On October 27, 2011, A&B s Board of Directors authorized A&B to repurchase up to two million shares of its common stock beginning January 1, 2012. The authorization, which replaced a previous authorization expiring December 31, 2011, will expire on December 31, 2013. Significant Accounting Policies: The Company s significant accounting policies are described in Note 1 of the consolidated financial statements included in Item 8 of the Company s 2010 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 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 certainty and actual results will, inevitably, differ from those critical accounting estimates. These differences could be material. The most significant accounting estimates inherent in the preparation of A&B s financial statements were described in Item 7 of the Company s 2010 Form 10-K. Officer and Management Changes: The following management changes were effective between January 1, 2011 and October 31, 2011. On February 11, 2011, the Company announced the retirement of Norbert M. Buelsing, president of A&B Properties, Inc. and the appointment of Christopher J. Benjamin, senior vice president, chief financial officer and treasurer of A&B and general manager of Hawaiian Commercial & Sugar Company (HC&S), to president of the A&B Land Group and president of A&B Properties, Inc. Mr. Benjamin s appointment to his new role was effective on September 1, 2011. On July 6, 2011, the Company announced the appointment of Joel M. Wine as senior vice president, chief financial officer and treasurer of A&B, effective September 1, 2011. Rick Volner, Jr., senior vice president, Agricultural Operations of HC&S, was promoted to general manager of HC&S, effective April 1, 2011. Wendy M. Ludwig was promoted to A&B vice president, tax, effective April 26, 2011. PART II. OTHER INFORMATION ITEM 1. LEGAL PROCEEDINGS The Company and Matson were named as defendants in a consolidated civil lawsuit purporting to be a class action in the U.S. District Court for the Western District of Washington in Seattle. The lawsuit alleged violations of the antitrust laws and also named as a defendant Horizon Lines, Inc., another domestic shipping carrier operating in the Hawaii and Guam trades. On August 18, 2009, the court granted the defendants motion to dismiss the complaint with leave to amend the complaint to allege claims consistent with the court s order. On May 28, 2010, the plaintiffs filed a second amended complaint. On November 30, 2010, the judge dismissed the complaint with prejudice. On December 22, 2010, the plaintiffs filed an appeal to the Ninth Circuit Court of Appeals. On September 29, 2011, the Ninth Circuit affirmed the District Court s dismissal of the complaint with prejudice. In June 2011, the Equal Employment Opportunity Commission ("EEOC") served McBryde Resources, Inc., formerly known as Kauai Coffee Company, Inc. ("McBryde Resources") with a lawsuit, which alleges that McBryde Resources and five other farms were complicit in illegal acts by Global Horizons Inc., a company that had hired Thai workers for the farms. The lawsuit was filed in the U.S. District Court for the District of Hawaii. In July 2011, the EEOC amended the lawsuit to name Alexander & Baldwin, Inc. as a defendant. At a hearing on October 26, 2011, the judge dismissed the lawsuit, but gave the EEOC 45 days from the date the judge issues the order to file an amended complaint. McBryde Resources and Alexander & Baldwin, Inc. will vigorously defend themselves in this matter. The Company is unable to predict, at this time, the outcome or financial impact, if any, of the lawsuit. In a case not involving the Company, but relating to the use of Thai workers in Hawaii, the U.S. Department of Justice had charged the owners of Aloun Farm, Inc., an agricultural business located on the island of Oahu, also with illegal labor actions. In August 2011, the case was dismissed with prejudice by the U.S. District Court in Hawaii after the third day of trial without the defendants having to put on their case. ITEM 3.
The following discussion provides an update of the Company s outlook for 2011. All of the forward-looking statements made herein are qualified by the inherent risks of the Company s operations and the markets it serves, as more fully described on pages 17-25 of the Company s 2010 Form 10-K. The Company s overall outlook for 2011 continues to assume a slow recovery of the U.S. economy and modest growth in Hawaii, principally from a continued recovery of the visitor industry. Hawaii s visitor industry is performing well. Visitor expenditures are up nearly 15 percent compared to 2010 and tourism officials forecast $12.6 billion in visitor expenditures for the year, second only to 2007 s record expenditures of $12.8 billion. In September, visitor arrivals from Japan increased modestly compared to last year, the first monthly increase since the March earthquake and tsunami. There are two primary sources of periodic economic forecasts and data for the State of Hawaii: The University of Hawaii Economic Research Organization (UHERO) and the State s Department of Business, Economic Development and Tourism (DBEDT). Economic information included herein has been derived from economic reports available on UHERO s and DBEDT s websites that provide more complete information about the status of and forecast for the Hawaii economy. Second China-Long Beach Express (CLX2): On August 8, 2011, the Company announced the discontinuation of CLX2 and its last eastbound sailing occurred on August 22,2011. In the third quarter of 2011, the Company recorded $18 million of after-tax losses related to the final operations and termination of CLX2. In future quarters, the Company expects to record additional losses primarily related to the off-hiring of excess containers. The aggregate estimate of after-tax losses from the discontinuation of CLX2 remains between $20 and $25 million, consistent with initial projections. The termination of CLX2 has not impacted the Company s Hawaii, Guam or CLX1 services. Ocean Transportation: The Company continues to expect modest volume improvement in 2011 for its Hawaii trade lane; however, fourth quarter Hawaii volume is expected to be relatively flat with last year s fourth quarter. Guam volumes have been lower than last year due to competitive pressures and weaker market conditions, driven primarily by lower Japan tourism and the continued delay of military relocation construction. Recently, a competitor announced that it will be discontinuing service to Guam on November 10. While we expect another carrier to enter the market and provide a replacement service, there may be a moderate near-term increase in Guam container volume resulting from the discontinuation of the competitor s service. In addition, the Company expects that CLX1 s fourth quarter performance, relative to 2010, will continue to be negatively impacted by the overcapacity and lower demand in the Transpacific. As a result, the Company expects that, excluding the impacts from CLX2, Ocean Transportation operating profit for the fourth quarter of 2011 and for full-year 2011 will be lower than comparable periods in 2010. Ocean Transportation s performance continues to be highly dependent on the future performance of the national and Hawaii economies, fuel prices, Transpacific freight rates, and other factors that, in the current environment, cannot be predicted with certainty. Logistics Services: The Company expects fourth quarter performance to be consistent with performance in last year s fourth quarter. As a result, overall performance for 2011 will be relatively flat compared to 2010. Real Estate Leasing: Expected stability in market rents and improved occupancy in the Company s Mainland portfolio are supporting an expectation for modest improvement in overall Leasing results as compared to 2010; however, performance for the fourth quarter is expected to be relatively flat with last year. Real Estate Development and Sales: Real estate sales are opportunistic and episodic by nature and, therefore, difficult to predict with certainty. The Company produced good sales results for the first nine months of the year. Real estate sales closings for the remainder of the year, however, are expected to be minimal, due to the timing of sales. Agribusiness: Agribusiness is expected to continue its strong performance for the remainder of the year based on forecasted sugar production and pricing that remains higher than in 2010. Financial performance for the fourth quarter is expected to approximate 2010 performance, despite the non-recurrence of the federal disaster relief payment received in the prior year quarter. OTHER MATTERS Dividends: On October 27, 2011, the Company s Board of Directors announced a fourth-quarter 2011 dividend of $0.315 per share, payable on December 1, 2011 to shareholders of record as of the close of business on November 10, 2011. Share Repurchase Authorization: On October 27, 2011, A&B s Board of Directors authorized A&B to repurchase up to two million shares of its common stock beginning January 1, 2012. The authorization, which replaced a previous authorization expiring December 31, 2011, will expire on December 31, 2013. Significant Accounting Policies: The Company s significant accounting policies are described in Note 1 of the consolidated financial statements included in Item 8 of the Company s 2010 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 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 certainty and actual results will, inevitably, differ from those critical accounting estimates. These differences could be material. The most significant accounting estimates inherent in the preparation of A&B s financial statements were described in Item 7 of the Company s 2010 Form 10-K. Officer and Management Changes: The following management changes were effective between January 1, 2011 and October 31, 2011. On February 11, 2011, the Company announced the retirement of Norbert M. Buelsing, president of A&B Properties, Inc. and the appointment of Christopher J. Benjamin, senior vice president, chief financial officer and treasurer of A&B and general manager of Hawaiian Commercial & Sugar Company (HC&S), to president of the A&B Land Group and president of A&B Properties, Inc. Mr. Benjamin s appointment to his new role was effective on September 1, 2011. On July 6, 2011, the Company announced the appointment of Joel M. Wine as senior vice president, chief financial officer and treasurer of A&B, effective September 1, 2011. Rick Volner, Jr., senior vice president, Agricultural Operations of HC&S, was promoted to general manager of HC&S, effective April 1, 2011. Wendy M. Ludwig was promoted to A&B vice president, tax, effective April 26, 2011. PART II. OTHER INFORMATION ITEM 1. LEGAL PROCEEDINGS The Company and Matson were named as defendants in a consolidated civil lawsuit purporting to be a class action in the U.S. District Court for the Western District of Washington in Seattle. The lawsuit alleged violations of the antitrust laws and also named as a defendant Horizon Lines, Inc., another domestic shipping carrier operating in the Hawaii and Guam trades. On August 18, 2009, the court granted the defendants motion to dismiss the complaint with leave to amend the complaint to allege claims consistent with the court s order. On May 28, 2010, the plaintiffs filed a second amended complaint. On November 30, 2010, the judge dismissed the complaint with prejudice. On December 22, 2010, the plaintiffs filed an appeal to the Ninth Circuit Court of Appeals. On September 29, 2011, the Ninth Circuit affirmed the District Court s dismissal of the complaint with prejudice. In June 2011, the Equal Employment Opportunity Commission ("EEOC") served McBryde Resources, Inc., formerly known as Kauai Coffee Company, Inc. ("McBryde Resources") with a lawsuit, which alleges that McBryde Resources and five other farms were complicit in illegal acts by Global Horizons Inc., a company that had hired Thai workers for the farms. The lawsuit was filed in the U.S. District Court for the District of Hawaii. In July 2011, the EEOC amended the lawsuit to name Alexander & Baldwin, Inc. as a defendant. At a hearing on October 26, 2011, the judge dismissed the lawsuit, but gave the EEOC 45 days from the date the judge issues the order to file an amended complaint. McBryde Resources and Alexander & Baldwin, Inc. will vigorously defend themselves in this matter. The Company is unable to predict, at this time, the outcome or financial impact, if any, of the lawsuit. In a case not involving the Company, but relating to the use of Thai workers in Hawaii, the U.S. Department of Justice had charged the owners of Aloun Farm, Inc., an agricultural business located on the island of Oahu, also with illegal labor actions. In August 2011, the case was dismissed with prejudice by the U.S. District Court in Hawaii after the third day of trial without the defendants having to put on their case. ITEM 3.
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