A&B Reports 2002 Earnings Per Share of $1.42.Business Editors HONOLULU--(BUSINESS WIRE)--Jan. 23, 2003 Alexander & Baldwin Baldwin, cities, United States Baldwin. 1 Uninc. city (1990 pop. 22,719), Nassau co., SE N.Y., on the south shore of Long Island, on Baldwin Bay; settled 1640s. A fishing center and summer resort, it has varied manufactures. , Inc. (Nasdaq:ALEX) today reported that its net income for full-year 2002 was $58,156,000, or $1.42 per basic share. For 2001, the Company reported net income of $110,628,000, or $2.73 per share. Net income in 2001 included one-time one-time adj. 1. or one·time a. Occurring or undertaken only once: a one-time winner in 1995. b. gains of $1.92 per share on the sale of marketable Marketable are securities that can be easily converted into cash. Such securities will generally have highly liquid markets allowing the security to be sold at a reasonable price very quickly. bank securities. Revenue in 2002 was $1,088,885,000, compared with $1,189,152,000 in 2001. In the fourth quarter of 2002, net income was $17,327,000, or $0.43 per basic share. Net income in the fourth quarter of 2001 was $46,368,000, or $1.15 per share, including a one-time gain of $1.69 per share on the sale of a marketable bank security. Revenue in the fourth quarter of 2002 was $281,873,000, compared with $355,188,000 in 2001. COMMENTS ON 2002 RESULTS, 2003 OUTLOOK "In the fourth quarter, the West Coast longshore long·shore adj. Occurring, living, or working along a seacoast. [Short for alongshore.] labor disruptions spoiled what had been, up to that time, a strong improvement in quarterly earnings since the start of the year," said Allen Al·len , Edgar 1892-1943. American anatomist who is noted for his studies of hormones and for the discovery (1923) of estrogen. Doane Doane is a surname, and may refer to:
adj. Existing before tax deductions: pretax income. pretax adj [profit] → vor (Abzug der) Steuern "hit" of more than $12 million in added expense and lost revenue, but still nearly equaled the earnings level of the third quarter. That was good performance, considering the uncertainty we had in October October: see month. , when the third quarter results were released." "It is fairly complex to compare these two years. In 2001, we had earnings per share of $2.73. If you were to take out of that figure the large items that were one-time in nature, like the benefit of the sale of bank stocks, which netted shareholders a total of $1.92 per share; offset, in part, by $0.67 in one-time asset revaluations, the remainder is $1.48. Putting that figure alongside the $1.42 in earnings we just reported for 2002, it is clear how close we came to improvement, even with the burden of the labor disruptions and the economic overhang Overhang Calculated as stock options granted, plus the remaining options to still be granted, and then divided by the total shares outstanding. Notes: A high percentage for the overhang is usually a bad thing. of 9/11 on the Hawaii Hawaii, island, United States Hawaii, island (1990 pop. 120,217), 4,037 sq mi (10,456 sq km), largest and southernmost island of the state of Hawaii and coextensive with Hawaii co.; known as the Big Island. economy in the first half of 2002. "Hawaii's economy continues to grow reasonably well. In addition, the prospective longshore labor agreement is for six years; we have two attractively priced new Jones Act vessels under construction; our Kukui'Ula real estate development on Kauai Kauai (kou'wī`), circular island (1990 pop. 51,177), 549 sq mi (1,422 sq km), 32 mi (52 km) in diameter, N Hawaii, separated from Oahu island to the southeast by Kauai Channel. Lihue (1990 pop. has an outstanding partner and a solid development plan; and our sugar operations are benefiting from the new Farm Bill enacted in 2002. A&B also continues actively to acquire real estate, both in Hawaii and on the Mainland, and our financial resources remain strong. "The Company is committed to increase its earnings in 2003, and we have taken a number of actions already to do so. Matson Matson is a surname, and may refer to:
A surcharge is an added liability imposed on something that is already due, such as a tax on tax. It also refers to the penalty a court can impose on a fiduciary for breaching a duty. in its rate structure that is intended to provide a means to neutralize neutralize to render neutral. its cost increases. With the gradual return of "steady state" operations, and normal schedules, we again can target improvements in Matson's cost structure. A&B Properties continues to expand and expects to maintain its position as a leading acquirer of real estate in Hawaii. Our agricultural operations, principally the HC&S sugar operation, had an outstanding 2002, and we expect a good year in 2003." OCEAN TRANSPORTATION Starting with this release, revenue and operating profit Operating profit (or loss) Revenue from a firm's regular activities less costs and expenses and before income deductions. operating profit See operating income. from ocean transportation and intermodal in·ter·mod·al adj. Relating to transportation by more than one means of conveyance, as by truck and rail: intermodal transport. services will be reported separately. This change is intended to make the respective growth rates Growth Rates The compounded annualized rate of growth of a company's revenues, earnings, dividends, or other figures. Notes: Remember, historically high growth rates don't always mean a high rate of growth looking into the future. and profit contributions of each of these different business activities clearer for investors. The fourth quarters of 2002 and 2001 both were marked by unusual events that had negative effects on Matson's results. During the fourth quarter of 2001, the effects of the events of 9/11 were felt most sharply in Hawaii. In the course of the recent longshore contract negotiations, West Coast labor disruptions led to a ten-day lockout lockout, intentional closing up of a company, factory, or shop by an employer to prevent employees from working during a strike or labor dispute. The term lockout from September September: see month. 29 to October 9, 2002. The lockout was followed by an extended period of port congestion The condition of a network when there is not enough bandwidth to support the current traffic load. congestion - When the offered load of a data communication path exceeds the capacity. , vessel delays, and low productivity. Agreement on contract terms was reached ultimately, and the contract is presently in the process of ratification The confirmation or adoption of an act that has already been performed. A principal can, for example, ratify something that has been done on his or her behalf by another individual who assumed the authority to act in the capacity of an agent. . In the fourth quarter of 2002, ocean transportation revenue was $174.7 million. That was an increase of $14.4 million, or nine percent, from $160.3 million in the fourth quarter of 2001. The principal sources of the increase in revenue were higher cargo volume and, to a lesser extent, higher freight rates Noun 1. freight rate - the charge for transporting something by common carrier; "we pay the freight"; "the freight rate is usually cheaper" freightage, freight and a higher bunker bunk, bunker large storage bin. bunk forage forage, usually ensilage stored in a large storage bunk and made available to cattle or other livestock along a face of the storage. surcharge. Hawaii service container volume was one-percent higher than in the fourth quarter of 2001; automobile volume was 11-percent higher. The rise in container volume was due primarily to westbound demand. Higher auto movements reflected increased rental car activity and higher retail auto demand in Hawaii. Fourth quarter 2002 operating profit in ocean transportation was $9.2 million. That was an increase of $7.6 million from the $1.6 million reported in the fourth quarter of 2001. As noted earlier, the latter period was unusually depressed by the aftereffects aftereffects after npl → Nachwirkungen pl of 9/11. The year-to-year quarterly improvement was in spite of in opposition to all efforts of; in defiance or contempt of; notwithstanding. See also: Spite more than $12 million in higher costs and lost revenue directly attributable to the longshore labor disruptions. To a lesser extent, also contributing to the improvement in the quarter was slightly better productivity at the Sand Island container terminal A container terminal is a facility where cargo containers are transhipped between different transport vehicles, for onward transportation. The transhipment may be between ships and land vehicles, for example trains or trucks, in which case the terminal is described as a in Honolulu Honolulu (hŏn'əl  `l, hōnō–), city (1990 pop. .
In full-year 2002, ocean transportation revenue of $686.9 million was $4.6 million, or one percent, higher than $682.3 million in full-year 2001. Hawaii service container volume was two percent higher than in the full-year 2001; automobile volume was two-percent lower. In this case, the small increase in revenue was due to a variety of rate changes, including a general rate increase, bunker surcharge and changes in the mix of commodities carried. Ocean transportation operating profit in full-year 2002 was $42.4 million. This was a decrease of $18.3 million, or 30 percent, from $60.7 million in full-year 2001. The decrease resulted primarily from effects of the previously mentioned longshore labor disruptions on the West Coast during the third and fourth quarters. INTERMODAL SERVICES In the fourth quarter of 2002, intermodal services revenue was $52.4 million. That was an increase of $21.5 million, or 70 percent, from $30.9 million in the fourth quarter of 2001. New customers were the principal source of the increase in revenue. Fourth quarter 2002 operating profit in intermodal services was $0.6 million. That was an increase of $0.3 million from the $0.3 million earned in the fourth quarter of 2001. In full-year 2002, intermodal services revenue of $195.1 million was $73.1 million, or 60 percent, higher than $122.0 million in full-year 2001. This increase also was due to the new customer activity. Intermodal services operating profit in full-year 2002 was $3.1 million. This was an increase of $1.5 million, or 94 percent, from $1.6 million in full-year 2001. PROPERTY LEASING Prior to excluding properties treated as discontinued operations Discontinued operations Divisions of a business that have been sold or written off and that no longer are maintained by the business. (described further below), operating profit from property leasing activities in the fourth quarter of 2002 was $8.4 million. This was $0.4 million, or five percent, greater than $8.0 million in the fourth quarter of 2001. Fourth quarter 2002 occupancy levels for Mainland properties averaged 94 percent, versus 93 percent in the fourth quarter of 2001. The fourth quarter 2002 occupancy level for Hawaii properties was 90 percent, versus 88 percent in the fourth quarter of 2001. The improvement was due to contributions from newly acquired properties and re-tenanting of available space. In full-year 2002, also prior to excluding several properties treated as discontinued operations, property leasing operating profit was $32.9 million. This was $1.2 million, or four-percent, lower than the $34.1 million earned in full-year 2001. Year-to-date Year-to-date (YTD) The period beginning at the start of the calendar year up to the current date. 2002 occupancy levels for Mainland properties averaged 92 percent, versus 93 percent in full-year 2001. Average occupancy levels for Hawaii properties were 89 percent, versus 90 percent in the comparable period of 2001. Lower operating profit was the net result of lower occupancies and higher expenses, offset, in part, by contributions from newly acquired properties. During 2002, four properties in the leasing portfolio were sold and three acquired. Sold were two shopping centers shopping center, a concentration of retail, service, and entertainment enterprises designed to serve the surrounding region. The modern shopping center differs from its antecedents—bazaars and marketplaces—in that the shops are usually amalgamated into , in Colorado Colorado, state, United States Colorado (kŏlərăd`ə, –răd`ō, –rä`dō), state, W central United States, one of the Rocky Mt. states. and Southern California Southern California, also colloquially known as SoCal, is the southern portion of the U.S. state of California. Centered on the cities of Los Angeles and San Diego, Southern California is home to nearly 24 million people and is the nation's second most populated region, , and two industrial properties, in Texas and California California (kăl'ĭfôr`nyə), most populous state in the United States, located in the Far West; bordered by Oregon (N), Nevada and, across the Colorado River, Arizona (E), Mexico (S), and the Pacific Ocean (W). . A&B acquired a 180,000 square foot shopping center in Mililani (Oahu Oahu (ōä`h ), island (1990 pop. 836,231), 593 sq mi (1,536 sq km), third largest and chief island of Hawaii, part of Honolulu co., between Molokai and Kauai. ), Hawaii; a 68,000 square foot shopping center in Long Beach,
Calif.; and a 396,000 square foot warehouse/office property in Sparks Sparks, city (1990 pop. 53,367), Washoe co., W Nev., just E of Reno; inc. 1905. The Southern Pacific RR was the major employer until the dieselization of railroad engines forced the closing (1957) of the railroad shops there. ,
Nev.
PROPERTY SALES Prior to treating several properties as discontinued operations, property sales revenue totaled $31.9 million in the fourth quarter of 2002, compared with $11.9 million in the fourth quarter of 2001. In the fourth quarter of 2002, operating profit resulting from property sales was $5.2 million, an increase of $2.6 million, from $2.6 million in the fourth quarter of 2001. Results for the fourth quarter of 2002 include the sales of a shopping center and an industrial property in Southern California, plus a number of lots in a business park on Maui Maui (mou`ē), island (1990 est. pop. 82,500), 728 sq mi (1,886 sq km), second largest island in the state of Hawaii, separated from the island of Hawaii by the Alenuihaha Channel and from Molokai by the Pailolo Channel. . Sales in the fourth quarter of 2001 included no similar income-producing properties. Variability in sales revenue and operating profit is an inherent characteristic of property sales activity. Property sales revenue totaled $93.0 million in full-year 2002. That was $3.8 million, or four percent, more than $89.2 million in full-year 2001. In full-year 2002, operating profit resulting from property sales was $19.4 million. This was $1.5 million, or eight percent, more than the $17.9 million in full-year 2001. Sales in 2002 included a number of developed, income-producing properties, whereas 2001 had a larger number of lower-margin residential properties. As a result of the adoption by A&B of SFAS SFAS Statement of Financial Accounting Standards SFAS Special Forces Assessment and Selection SFAS Student Financial Aid Services SFAS Sport Fishing Association of Singapore SFAS Safety Features Actuation System SFAS Statewide Fixed Assets System No. 144, "Accounting for the Impairment Impairment 1. A reduction in a company's stated capital. 2. The total capital that is less than the par value of the company's capital stock. Notes: 1. This is usually reduced because of poorly estimated losses or gains. 2. or Disposal of Long-Lived long-lived adj. 1. Having a long life: a long-lived aunt. 2. Lasting a long time; persistent: a long-lived rumor. 3. Assets" in 2001, the sales of certain income-producing assets--even individual buildings within a real estate portfolio-- now are reported as "discontinued operations" if their earnings and cash flows are separately identifiable and are material. One additional property was so classified in the fourth quarter and, in the full year, a total of nine were. The after-tax gains on the sales, and the current and historical earnings of all of these properties, are classified in the financial statements under the caption "Discontinued Operations: Properties." FOOD PRODUCTS In the fourth quarter of 2002, the food products segment had an operating profit of $5.9 million. That was an improvement of $9.8 million from the operating loss operating loss The excess of operating expenses over revenue. As with operating income, operating losses exclude revenues and expenses from operations that are not considered a regular part of the business. Also called deficit. Compare operating income. of $3.9 million in the fourth quarter of 2001. The improvement was primarily due to higher sugar production and lower costs per ton. Also, in the fourth quarter of 2001, there had been a write-off Write-Off A reduction in the value of an asset or earnings by the amount of an expense or loss. Companies are able to write off certain expenses that are required to run the business, or have been incurred in the operation of the business and detract from retained revenues. of residual power generating assets. In full-year 2002, food products had an operating profit of $13.8 million. This was $8.1 million greater than the $5.7 million in full-year 2001. 2002 benefited from greater production and sales of raw and specialty sugars and molasses molasses, sugar byproduct, the brownish liquid residue left after heat crystallization of sucrose (commercial sugar) in the process of refining. Molasses contains chiefly the uncrystallizable sugars as well as some remnant sucrose. ; higher sugar and molasses prices; tight cost control; higher power Higher power is a term used in a 12-step program, such as Alcoholics Anonymous, to describe "a power greater than yourself." Although many participants equate their higher power with God, a belief in God or in formal religion is not mandatory; the higher power is intended as a sales; and better results from a residual investment in C&H Sugar Company, Inc. The previously mentioned write-off of power-generating assets also depressed the 2001 results. "OTHER" SEGMENT BEING DISCONTINUED dis·con·tin·ue v. dis·con·tin·ued, dis·con·tin·u·ing, dis·con·tin·ues v.tr. 1. To stop doing or providing (something); end or abandon: This release marks the last time that the "Other" segment will be shown. Substantially all of the revenue and operating profit for this category ended with the sales of bank stock holdings in calendar year 2001. BALANCE SHEET COMMENTS Balances on deposit in the Capital Construction Fund have risen by a net of $50.0 million since year-end 2001. The increase reflects the deposit of proceeds from the sale of two vessels early in 2002 and additional deposits during the third quarter, in preparation for Matson's construction and purchase of two new ships. Current liabilities Current Liabilities Usually appearing on a company's balance sheet, it represents the amount owed for interest, accounts payable, short-term loans, expenses incurred but unpaid, and other debts due within one year. declined and debt balances rose, primarily reflecting tax payments due in 2002 for the sale of bank stock in late 2001. Other long-term liabilities Other Long-Term Liabilities A balance sheet item that includes obligations that do not currently require interest payments. Notes: This would include items such as remaining leases, future employee benefits and deferred taxes. rose by $45.4 million, primarily due to recording an additional minimum pension liability, pursuant to pension accounting rules. CASH FLOW COMMENT Most of the substantial changes in the cash flow summary derive from the previously mentioned sales of bank stocks, and associated tax payments. Alexander & Baldwin, Inc., headquartered in Honolulu, is engaged in ocean transportation and intermodal services, through its subsidiary, Matson Navigation Company Matson Navigation Company, a subsidiary of Alexander & Baldwin, is a private ocean transportation company with roots extending into the late 19th century. It is credited with introducing mass tourism to Hawaii with the opening of the Moana Hotel (now known as the Moana Surfrider Hotel) , Inc.; in property development and management, through A&B Properties, Inc.; and in food products, through Hawaiian Commercial & Sugar Company and Kauai Coffee Company, Inc. Additional information about A&B may be found at its web site: www.alexanderbaldwin.com. Statements in this press release that are not historical facts are "forward-looking" statements that involve a number of risks and uncertainties described on page 19 of the Company's Annual Report on Form 10-K Form 10-K A report required by the SEC from exchange-listed companies that provides for annual disclosure of certain financial information. Form 10-K See 10-K. , which is included in the Company's 2001 annual report to shareholders, and in subsequent filings of Forms 10-Q. These factors could cause actual results to differ materially from those projected in the statements.
ALEXANDER & BALDWIN, INC.
-------------------------
2002 and 2001 Fourth-Quarter And Full-Year Results
--------------------------------------------------
Three Months Ended December 31: 2002 2001
------------------------------- ---- ----
Revenue $281,873,000 $355,188,000
Income From Continuing Operations $13,490,000 $53,202,000
Discontinued Operations: Properties(1) $3,837,000 $866,000
Discontinued Operations:
Agriculture(2) - ($7,700,000)
Net Income $17,327,000 $46,368,000
Basic Share Earnings
Continuing Operations $0.33 $1.31
Net Income $0.43 $1.15
Diluted Share Earnings
Continuing Operations $0.33 $1.31
Net Income $0.42 $1.15
Average Shares Outstanding 41,211,000 40,498,000
Year Ended December 31:
-----------------------
Revenue $1,088,885,000 $1,189,152,000
Income From Continuing Operations $46,498,000 $116,382,000
Discontinued Operations: Properties(1) $11,658,000 $3,431,000
Discontinued Operations:
Agriculture(2) - ($9,185,000)
Net Income $58,156,000 $110,628,000
Basic Share Earnings
Continuing Operations $1.13 $2.87
Net Income $1.42 $2.73
Diluted Share Earnings
Continuing Operations $1.13 $2.86
Net Income $1.41 $2.72
Average Shares Outstanding 41,008,000 40,535,000
(1) "Discontinued Operations: Properties" consists of sales, or
intended sales, of certain lands and buildings that are material and
have separately identifiable earnings and cash flows.
(2) "Discontinued Operations: Agriculture" consists of an abandoned
panelboard manufacturing business.
Industry Segment Data, Net Income
---------------------------------
(In Thousands)
Three Months Ended Year Ended
------------------ ----------
December 31, December 31,
------------ ------------
2002 2001 2002 2001
Revenue: ---- ---- ---- ----
--------
Transportation
Ocean Transportation $174,705 $160,321 $686,927 $682,272
Intermodal Services 52,426 30,909 195,114 121,960
Property Development &
Management
Leasing 19,107 17,996 73,087 70,685
Sales 31,853 11,854 92,965 89,156
Less Amounts Reported In
Discontinued Operations (29,697) (2,480) (71,935) (9,913)
Food Products 33,479 25,420 112,727 105,976
Other - 111,168 - 129,016
-------- --------- ---------- -----------
Total Revenue $281,873 $355,188 $1,088,885 $1,189,152
======== ========= ========== ===========
Operating Profit, Net Income:
-----------------------------
Transportation
Ocean Transportation $9,243 $1,580 $42,430 $60,704
Intermodal Services 623 271 3,068 1,560
Property Development &
Management
Leasing 8,400 8,016 32,905 34,139
Sales 5,220 2,564 19,418 17,926
Less Amounts Reported In
Discontinued Operations (6,109) (1,375) (18,565) (5,446)
Food Products 5,864 (3,886) 13,841 5,660
Other - 109,921 - 127,635
-------- --------- ---------- -----------
Total Operating Profit 23,241 117,091 93,097 242,178
Writedown of C&H - (28,600) - (28,600)
Interest Expense (2,718) (3,679) (11,680) (18,658)
Corporate Expenses (3,630) (3,301) (13,185) (13,161)
-------- --------- ---------- -----------
Income From Continuing
Operations
Before Income Taxes 16,893 81,511 68,232 181,759
Income Taxes (3,403) (28,309) (21,734) (65,377)
-------- --------- ---------- -----------
Income From Continuing
Operations 13,490 53,202 46,498 116,382
Discontinued Operations:
Properties 3,837 866 11,658 3,431
Discontinued Operations:
Agriculture - (7,700) - (9,185)
-------- --------- ---------- -----------
Net Income $17,327 $46,368 $58,156 $110,628
======== ========= ========== ===========
Basic Earnings Per Share,
Continuing Operations $0.33 $1.31 $1.13 $2.87
Basic Earnings Per Share,
Net Income $0.43 $1.15 $1.42 $2.73
Average Shares 41,211 40,498 41,008 40,535
Consolidated Balance Sheets
---------------------------
(In Thousands)
December 31, December 31,
------------- ------------
2002 2001
ASSETS ---- ----
Current Assets $233,671 $220,014
Investments 32,923 33,021
Real Estate Developments 42,050 47,840
Property, Net 942,574 977,048
Capital Construction Fund 208,400 158,737
Other Assets 137,951 107,759
----------- -------------
Total $1,597,569 $1,544,419
=========== =============
LIABILITIES & EQUITY
Current Liabilities $151,087 $195,569
Long-Term Debt 247,789 207,378
Post-Retirement Benefit Obligs. 42,640 42,915
Other Long-Term Liabilities 94,602 49,181
Deferred Income Taxes 337,803 338,709
Shareholders' Equity 723,648 710,667
----------- -------------
Total $1,597,569 $1,544,419
=========== =============
Consolidated Statements of Cash Flows
-------------------------------------
(In Thousands)
Year Ended
----------
December 31,
------------
2002 2001
---- ----
Operating Cash Flows $55,654 $150,968
Capital Expenditures (44,613) (99,183)
CCF Deposits, Net (53,663) (7,854)
Proceeds From Sale of Bank Stocks - 134,720
Proceeds From Issuance of
(Payment of) Debt, Net 30,100 (134,100)
Repurchases of Capital Stock - (2,270)
Dividends Paid (36,889) (36,488)
All Other, Net 30,678 10,047
--------- ----------
Increase/(Decrease) In Cash $(18,733) $15,840
========= ==========
Depreciation $70,717 $75,433
========= ==========
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