Value Creation Through Economic Cycles BB&T Capital Markets Transportation Services Conference

Transcription

1 Value Creation Through Economic Cycles BB&T Capital Markets Transportation Services Conference BB&T Capital Markets Transportation February Services 11, 2010 Conference February 11,

2 Presenter Alexander & Baldwin, Inc. Mr. Christopher J. Benjamin Senior Vice President, Chief Financial Officer and Treasurer Statements in this presentation that set forth expectations or predictions are based on facts and situations that are known to us as of today, February 11, Actual results may differ materially, due to risks and uncertainties, such as those described on pages of the Form 10-K in our 2008 annual report and our other subsequent filings with the SEC. Statements in this presentation are not guarantees of future performance. 1

3 Who We Are Transportation and Real Estate Transportation Real Estate 2

4 2009 Operating Metrics Who We Are Revenue $1.40 Billion Operating Profit $120 Million Assets $2.38 Billion Transportation Real Estate Agribusiness Pie chart does not include Agribusiness losses 3

5 Who We Are Real Estate and Land Management Premier, regional real estate company with extensive entitlement and development expertise, significant landholdings and diversified commercial commercial property earnings base 4 th largest private landholder in Hawaii (88K acres) Developer of high quality residential, resort residential and commercial projects throughout Hawaii Commercial income property portfolio (42 properties) totaling 8.3 MM square feet with geographic and asset class diversity Large scale Hawaii sugar and coffee grower Maui Brand, Kauai Coffee brands Significant renewable energy provider on Maui (hydro and bagasse) and Kauai (hydro) 4

6 Core Hawaii Landholdings Maui Kauai Oahu Urban/Entitled 580 1,110* 40 Agriculture 51,480 7, Conservation 15,880 13, * Includes 1,000 acres at Kukui ula JV 5

7 Commercial Property Portfolio - Hawaii # of Properties: 19 Square Feet: 1.1 MM Retail 560K Industrial 390K Office 170K 2009 Occupancy 95% Kauai Oahu 2009 NOI $29 MM * Includes income from non-improved lands Maui A&B Leasing portfolio property A&B Development pipeline property 6

8 Commercial Property Portfolio Mainland # of Properties: 23 # of States: 8 Square Feet: 7.2 MM Retail 560K Industrial 5,590K Office 1,060K 2009 Occupancy 85% 2009 NOI $37 MM 7

9 Targeted Real Estate Investments Development Pipeline Current Status and Beyond Kai Malu at Wailea Wailea MF-11 Wailea MF-19 MAUI Wailea MF-7 Additional Wailea Kane Street Kahului Town Center Maui Business Park II CA BI OAHU KAUAI Kukui'ula (Res. and Comm) Kai Olino Brydeswood Keola La'i Waiawa Ka Milo Valencia Entitled Constructed/Under construction Sales/Leasing in progress 8

10 A Track Record of Creating Value Targeted Hawaii real estate investments 700, , ,000 Oceanview Haseko Kaneohe Bay PGL Mililani Napili/ Fairview Keola Lai Lanihau SC Waipio Industrial Waipio Shopping Center Kukui ula 400, ,000 Lanikea Wailea Hokua Kukui ula Increased investment in Kukui ula 200, Median price of single family Commercial property acquisitions home on Oahu Pricing Data Source: Honolulu Board of Realtors, Oahu Median Price Developments 9

11 A Track Record of Realizing Value Targeted Hawaii real estate sales 700, , , , ,000 Lanikea Ocean View Haseko Kukui ula Lanihau SC Hokua Wailea Napili/ Fairway Keola Lai Hawaii Business Park Pacific Guardian Tower Mililani SC 200, YTD2010 Median price of single family home on Oahu Commercial property sales Development sales Pricing Data Source: Honolulu Board of Realtors, Oahu Median Price 10

12 Value Creation: Wailea, Maui Maui Fully Entitled Acreage Acres Net Invested Acquisition/Improvements 270 ($78) Kai Malu JV (25) $36 Sold (78) $57 Remaining 167 $15 Under development 27 Future development

13 Prominent transportation franchises with market leading positions Who We Are Transportation Leading West Coast/Hawaii Jones Act container and auto carrier Premium, niche China-Long Beach container service Principal Guam/Pacific Island container carrier Prominent West Coast U.S. stevedoring joint venture Terminal operations in Long Beach, Oakland, Seattle 9 th largest U.S. freight brokerage National rail, highway and expedited services Emerging warehousing/distribution services segment 12

14 Inside the Supply Chain Matson Ocean Services Jones Act & International Historic trades Seattle Portland Shanghai Ningbo Xiamen Historic Jones Act Trades Oakland Long Beach Guam Honolulu FSM 13

15 Ocean Transportation Hawaii Trade Lane 50 Largest Jones Act West Coast to Hawaii container and auto carrier - 17 Jones Act vessels - 23,500 containers Hawaii Containers (in thousands) Lifeline to Hawaii since Dedicated terminal operations acre Sand Island facility - SSAT joint venture 0 40 Q1 Q2 Q3 Q Automobiles (in thousands) Q1 Q2 Q3 Q4 14

16 Ocean Transportation Guam Trade Lane Lifeline to Guam Stable market - Relatively flat volume Increased military cargo movement opportunities - Dedicated Guam project office 4,000 3,000 Guam Container Volume 2,000 1Q 2Q 3Q 4Q

17 Ocean Transportation China Trade Lane Established in 2006 >90% next-day cargo availability - Dedicated Long Beach terminal Primary goods: Electronics, apparel Drewry 4Q09 report - 92% on-time arrival - Regularly ranked #1 or #2 by Drewry for on-time performance 16,000 12,000 8,000 4,000 0 China Container Volume 1Q 2Q 3Q 4Q

18 A Track Record of Creating Value Ship Investments Recent Acquisitions: MV Manukai 2003 MV Maunawili 2004 MV Manulani 2005 MV Maunalei 2006 Average cost per ship: Replacement cost/ship: (est.) $125 MM $225 - $275 MM 17

19 Inside the Supply Chain Matson Integrated Logistics Domestic Port to Door 18

20 Warehousing and Distribution Locations Matson Integrated Logistics Domestic Port to Door Strategic toeholds West and East Coast Warehousing/distribution, specialty high touch service Incrementally higher margins due to high-touch service 19

21 Investment Rationale 20

22 Market Disconnect Share price is at levels of six years ago; Asset base grew $620 million from 12/31/03 to 12/31/09 2, Asset Value ($MMs) 2,000 1,500 2/05/04 $ /05/10 $ Share Price ,000 Sep-02 Sep-03 Sep-04 Sep-05 Sep-06 Sep-07 Sep-08 Sep ALEX Total Assets ALEX Share Price 21

23 Quality Assets with Low Historical Basis Asset Base/Balance Sheet/Cash Flow 88,000 acres with much at $150/acre basis 17 owned Jones Act vessels, shoreside assets Balance sheet strength is key Low leverage allows for unencumbered expansion (30% debt to debt + equity) Corporate borrowing power ($425M available under existing lines) Low debt maturities (< $40M/year through 2012) Cash Flow Stability Diversified, self-funded operations generate strong, stable cash flow Vast majority of capital expenditures are discretionary Ample powder for opportunistic investments in RE, transportation 22

24 Experienced Management Team; Disciplined in Capital Allocation Experienced management team with strong vertical industry expertise, local market knowledge Focus on capital allocation at three levels Between making incremental investments in Company and returning cash to shareholders Between and among our various operating businesses Between and among specific investment opportunities within each of our operating business Strive to maintain discipline in all market conditions Core businesses and adjacencies only Consistent, conservative investment underwriting 23

25 A Track Record of Returning Cash Quarterly Dividend Cash Returned to Shareholders % $397 Million Total Cash Payout Ratio in last 10 years: 63% 2.0 million shares remaining under 2009 share repurchase authorization 24

26 Poised for Earnings/Performance Recovery Economic Stabilization Cost cutting and other moves made in 2008 and early 2009 will serve us well as economy stabilizes Industry Cycles Core businesses at or near industry cycle bottoms Operating Profit Recovery Anticipated in 2010 Ocean Transportation driven by stabilizing Hawaii volumes, increased Guam volumes and higher China rates Agribusiness driven by higher sugar pricing and increased sugar production 25