Alexander & Baldwin : 2023 Annual Report

2023 ANNUAL REPORT + FORM 10-K

Dear Fellow Shareholders,

For several years now, we have achieved milestones that have improved our position as the premier Hawai'i-focused commercial real estate platform, including converting to a real estate investment trust ("REIT"), selling non-income producing land, and strategically exiting non-core businesses and joint ventures. These accomplishments have positioned us to be the best public vehicle to invest in Hawai'i commercial real estate.

Going forward, our investment strategy remains unchanged.

Geographic Focus and Asset Class Diversification: Embrace that Hawa'i is a special place - a high- barrier-to-entermarket with a unique culture and community - and that we have a competitive advantage by being local and understanding it. We will continue our geographic focus and look to expand our portfolio through strategic investments in asset classes that provide accretive returns.

Best Properties and Best Service: Provide the best platform for our tenants to succeed. Grow our local tenants throughout the state and attract new ones from outside our market that want to do business here.

Our commitment to these objectives was reinforced during 2023. Our commercial real estate portfolio performed well in 2023. Same-Store Net Operating Income increased 4.3% for the year, or 6.8% excluding collections of previously reserved amounts1. We ended the year 94.7% leased and continue to see robust leasing demand across our portfolio. We closed on the off-market acquisition of an industrial property in West Oahu; refreshed Manoa Marketplace, a well-located asset in urban Honolulu, which we expect to generate an 8.0% to 8.5% return; welcomed another new-to-market tenant, with the state's first SONIC Drive-In at Ho'okele Shopping Center; and pre-leased a warehouse and distribution center that we intend to build at Maui Business Park to a national food manufacturer. Importantly, we achieved a significant milestone in our simplification process: we sold Grace Pacific.

These accomplishments are a testament to our unwavering commitment to deliver value to you, our shareholders, and demonstrate the capabilities of our talented team. We will continue to practice prudent capital allocation, but with Net Debt to Trailing Twelve Month Consolidated Adjusted EBITDA of 4.2x at the end of 2023 compared to a target of 5x to 6x and $476.5 million of available liquidity, we are able and ready to invest in growth. Most of our recent acquisitions have been off-market or first-look opportunities because sellers in Hawaii know us and know that we close deals. We expect our local presence and deep relationships will enable us to source opportunities, and our creative deal making and strong balance sheet to close them.

• For definitions and reconciliations of non-GAAP financial measures referenced in this letter to their most comparable GAAP measure, please refer to the section entitled "Use of Non-GAAP Financial Measures".

Sustainability remains at the forefront of our initiatives, with measured investments in expanding rooftop photovoltaic ("PV") projects, including the installation of a 464 kW PV system at Kaka'ako Commerce Center, the second of many on-site renewable energy generation installations planned for our portfolio. These opportunities align with our environmental sustainability goals and provide attractive investment yields.

Our commitment extends to social responsibility, providing contributions to non-profit organizations supporting our employees, tenants, and community. The devastating wildfire in the town of Lahaina, Maui was a stark reminder of the role a company like A&B can and must play in the community. The transformation of Napili Plaza into an emergency command center immediately after the fire is just one example of our commitment to the local communities in our home state.

I want to express my sincere gratitude to Chris Benjamin, who retired as A&B's chief executive officer in 2023. His leadership and strategic direction during his tenure as CEO have played a pivotal role in our past and future success. I would also like to thank our Board for entrusting me with the role of CEO. I am honored by the confidence placed in me and am committed to leading our talented team as we pursue our vision as a Hawai'i-focused commercial real estate company. Together with you, our valued shareholders, we look forward to continued success and growth.

Lance K. Parker

President and Chief Executive Officer

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CORPORATE INFORMATION

Board of Directors
Shelee M. T. Kimura (50)	Thomas A. Lewis, Jr. (71)	Douglas M. Pasquale (69)
President and	Chief Executive Officer	Founder and
Chief Executive Officer	Realty Income Corporation	Chief Executive Officer
Hawaiian Electric Company, Inc.	(Retired)	Capstone Enterprises Corporation
Diana M. Laing (69)	Lance K. Parker (50)	Chairman and
Chief Financial Officer	President and	Chief Executive Officer
American Homes 4 Rent	Chief Executive Officer	Nationwide Health
(Retired)	Alexander & Baldwin, Inc.	Properties, Inc.
John T. Leong (46)		(Retired)
	Eric K. Yeaman (56)
Co-Founder and
Chief Executive Officer		Founder and Managing Partner
Kupu		Hoku Capital LLC
Co-Founder and
Chief Executive Officer
Pono Pacific Land
Management, LLC

Titles and ages as of March 1, 2024

Executive Management
Lance K. Parker (50)	Jeffrey W. Pauker (42)	Meredith J. Ching (67)
President and	Executive Vice President and	Executive Vice President,
Chief Executive Officer	Chief Investment Officer	External Affairs
Clayton K.Y. Chun (46)
Executive Vice President,
Chief Financial Officer and
Treasurer

Titles and ages as of March 1, 2024

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CORPORATE INFORMATION

Investor Information

Alexander & Baldwin, Inc. ("A&B" or "Company") was founded in 1870. A&B's corporate headquarters are located in Honolulu, Hawai'i. Its common stock is traded on the New York Stock Exchange under the symbol ALEX.

Shareholders with questions about A&B are encouraged to write to Alyson J. Nakamura, Vice President and Corporate Secretary. Shareholders who wish to communicate with any or all members of the Board of Directors may send correspondence to A&B's headquarters, c/o A&B Law Department, 822 Bishop Street, Honolulu, HI 96813.

Inquiries from professional investors may be directed to:

Clayton Chun

Executive Vice President, Chief Financial Officer and Treasurer

Phone: [phone]

E-mail: [e-mail]

Corporate news releases, the Annual Report and other information about the Company are available at A&B's website: www.alexanderbaldwin.com

Transfer Agent & Registrar

Computershare Shareowner Services

For questions regarding stock certificates or other transfer-related matters, representatives of the Transfer Agent may be reached Monday - Friday from 8:00 A.M. to 8:00 P.M., Eastern time or Saturday from 9:00 A.M. to 5:30 P.M., Eastern Time by calling 1-866-442-6551 or online at www.computershare.com/ investor or www-us.computershare.com/investor/contact.

Correspondence may be sent to:	Overnight Correspondence:
Computershare	Computershare
P.O. Box 43006	150 Royall Street, Suite 101
Providence, RI 02940-3006	Canton, MA 02021
Auditors
Deloitte & Touche LLP	Honolulu, Hawai'i

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USE OF NON-GAAP FINANCIAL MEASURES

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

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

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

The Company also reports NOI on a Same-Store basis, which includes the results of properties that were owned, operated, and stabilized for the entirety of the prior calendar year and current reporting period, year-to-date. The Same-Store pool excludes properties under development, and properties acquired or sold during either of the comparable reporting periods. The Same-Store pool may also exclude properties under redevelopment. Management judgment is involved in the classification of properties for exclusion from the same-store pool when they are no longer considered stabilized due to redevelopment or other factors. Properties are moved into the Same-Store pool after one full calendar year of stabilized operation.

Reconciliations of Commercial Real Estate operating profit (loss) to Commercial Real Estate NOI and Same-Store NOI are as follows (amounts in millions; unaudited):

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	Twelve Months Ended December 31,
	2023				2022			Change1
CRE Operating Profit (Loss)	$	81.2		$	81.5		$	(0.3)
Plus: Depreciation and amortization		36.5			36.5			-
Less: Straight-line lease adjustments		(5.1)			(6.3)			1.2
Less: Favorable/(unfavorable) lease amortization		(1.1)			(1.1)			-
Less: Termination income		(0.1)			(0.1)			-
Plus: Other (income)/expense, net		0.1			0.5			(0.4)
Plus: Impairment losses		4.8			-		4.8
Plus: Selling, general, administrative and other expenses		7.0			6.8			0.2
NOI		123.3			117.8			5.5
Less: NOI from acquisitions, dispositions, and other		(0.9)			(0.4)			(0.5)
adjustments
Same-Store NOI	$	122.4		$	117.4		$	5.0
Less: Collections of amounts reserved in previous years		(2.1)			(4.7)			2.6
Same-Store NOI excluding collections of amounts reserved in	$	120.3		$	112.7		$	2.4
previous years

• Amounts in this table are rounded to the nearest tenth of a million, but percentages were calculated based on thousands. Accordingly, a recalculation of some percentages, if based on the reported data, may be slightly different.

The Company may report various forms of Earnings Before Interest, Taxes, Depreciation and Amortization ("EBITDA"), on a consolidated basis or a segment basis (e.g., "Consolidated EBITDA" or "Land Operations EBITDA"), as non-GAAP measures used by the Company in evaluating the Company's and segments' operating performance on a consistent and comparable basis from period to period. The Company provides this information to investors as an additional means of evaluating the performance of the Company's and segments' ongoing operations.

Consolidated EBITDA is calculated by adjusting the Company's consolidated net income (loss) to exclude the impact of interest expense, income taxes and depreciation and amortization. Land Operations EBITDA is calculated by adjusting Land Operations operating profit (which excludes interest expense and income taxes) to add back depreciation and amortization recorded at the Land Operations segment.

The Company also adjusts Consolidated EBITDA or Land Operations EBITDA (to arrive at "Consolidated Adjusted EBITDA" or "Land Operations Adjusted EBITDA") for items identified as non- recurring, infrequent or unusual that are not expected to recur in the Company's core business or segment's normal operations.

As an illustrative example, the Company identified non-cash pension termination charges as a non- recurring, infrequent or unusual item that is not expected to recur in the consolidated or segment's normal operations (or in the Company's core business). By excluding these items from Segment EBITDA and Consolidated EBITDA to arrive at Segment Adjusted EBITDA or Consolidated Adjusted EBITDA, the Company believes it provides meaningful supplemental information about its core operating performance and facilitates comparisons to historical operating results. Such non-GAAP measures should not be viewed as a substitute for, or superior to, financial measures calculated in accordance with GAAP.

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Reconciliations of the Company's consolidated net income to Consolidated EBITDA and Consolidated Adjusted EBITDA are as follows (amounts in millions, unaudited):

	TTM December 31,
		2023
Net Income (Loss)	$	33.0
Adjustments:
Depreciation and amortization		36.8
Interest expense		23.0
Interest expense related to discontinued operations		0.5
Consolidated EBITDA	$	93.3
Asset impairments		4.8
Interest rate swap fair value adjustment		2.7
(Income) loss from discontinued operations, net of income taxes and excluding depreciation,		7.3
amortization and interest expense
Consolidated Adjusted EBITDA	$	108.1

Net Debt is calculated by adjusting the Company's total debt to its notional amount (by excluding unamortized premium, discount and capitalized loan fees) and by subtracting cash and cash equivalents recorded in the Company's consolidated balance sheets. Net Debt as of December 31, 2023, is calculated as follows (in millions, unaudited):

Debt

Secured debt	$	189.7
Unsecured term debt		237.3
Unsecured revolving credit facility		37.0
Total Debt	$	464.0
Add: Net unamortized deferred financing cost / discount (premium)		0.1
Less: Cash and cash equivalents		(13.5)
Net Debt	$	450.6

Net Debt to TTM Consolidated Adjusted EBITDA is calculated by dividing TTM Consolidated Adjusted EBITDA by Net Debt. A calculation of Net Debt to TTM Consolidated Adjusted EBITDA is as follows (dollars in millions, unaudited):

	As of December 31,
		2023
Net Debt	$	450.6
TTM Consolidated Adjusted EBITDA	$	108.1
Net Debt to TTM Consolidated Adjusted EBITDA		4.2x

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FORWARD-LOOKING STATEMENTS

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

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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-K

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

For the fiscal year ended December 31, 2023

OR

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

For the transition period from [_______ to _______]

Commission file number 001-35492

Alexander & Baldwin, Inc.

(Exact name of registrant as specified in its charter)

Hawaii	45-4849780
(State or other jurisdiction of	(I.R.S. Employer
incorporation or organization)	Identification No.)
	822 Bishop Street
Post Office Box 3440, Honolulu, Hawaii 96801
(Address of principal executive offices and zip code)
	808-525-6611
(Registrant's telephone number, including area code)
Securities registered pursuant to Section 12(b) of the Act:
Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common Stock, without par value	ALEX	New York Stock Exchange

Securities registered pursuant to Section 12(g) of the Act: None

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes ☒ No ☐ Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. Yes ☐ No ☒

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

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

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

Large accelerated filer	☒	Accelerated filer	☐
Non-accelerated filer	☐	Smaller reporting company	☐
		Emerging growth company	☐

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

Indicate by check mark whether the registrant has filed a report on and attestation to its management's assessment of the effectiveness of its internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered public accounting firm that prepared or issued its audit report. ☒

If securities are registered pursuant to Section 12(b) of the Act, indicate by check mark whether the financial statements of the registrant included in the filing reflect the correction of an error to previously issued financial statements. ☐

Indicate by check mark whether any of those error corrections are restatements that required a recovery analysis of incentive-based compensation received by any of the registrant's executive officers during the relevant recovery period pursuant to § 240.10D-1(b).☐

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

Aggregate market value of Common Stock held by non-affiliates computed by reference to the price at which the Common Stock was last sold, or the average bid and asked price of such Common Stock, as of the last business day of the most recently completed second fiscal quarter June 30, 2023: $1,349,372,500

Number of shares of Common Stock outstanding as of latest practicable date (February 14, 2024): 72,592,147

Documents Incorporated By Reference

Portions of Registrant's Proxy Statement for the 2024 Annual Meeting of Shareholders (Part III of Form 10-K)

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