FORM 10-Q
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
(Mark One)
/X/ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended March 31, 2002
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OR
/ / TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the transition period from to
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Commission file number 0-565
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ALEXANDER & BALDWIN, INC.
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(Exact name of registrant as specified in its charter)
HAWAII 99-0032630
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(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
P. O. BOX 3440, HONOLULU, HAWAII 96801
822 BISHOP STREET, HONOLULU, HAWAII 96813
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(Address of principal executive (Zip Code)
offices)
(808) 525-6611
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(Registrant's telephone number, including area code)
N/A
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(Former name, former address and former
fiscal year, if changed since last report)
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 / /
Number of shares of common stock outstanding as of
March 31, 2002: 40,817,306
PART I. FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
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The condensed financial statements and notes for the first quarter of 2002 and
2001 are presented below:
ALEXANDER & BALDWIN, INC. AND SUBSIDIARIES
CONDENSED STATEMENTS OF INCOME
(In thousands, except per share amounts)
Three Months Ended
March 31,
2002 2001
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(unaudited)
Revenue:
Operating revenue $ 231,797 $ 271,909
Interest, dividends and other 2,156 3,058
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Total revenue 233,953 274,967
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Costs and Expenses:
Costs of goods sold, services and rentals 196,290 208,988
Selling, general and administrative 25,809 24,944
Interest 2,957 5,779
Income taxes 3,380 12,517
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Total costs and expenses 228,436 252,228
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Income Before Discontinued Operations 5,517 22,739
Discontinued Operations (net of income taxes)
Properties 4,290 141
Agriculture -- (446)
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Net Income $ 9,807 $ 22,434
========= =========
Basic Earnings Per Share:
From continuing operations $ 0.14 $ 0.56
Discontinued operations 0.10 (0.01)
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Net income $ 0.24 $ 0.55
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Diluted Earnings Per Share:
From continuing operations $ 0.14 $ 0.56
Discontinued operations 0.10 (0.01)
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Net income $ 0.24 $ 0.55
========= =========
Dividends Per Share $ 0.225 $ 0.225
Average Number of Shares Outstanding 40,623 40,508
See notes to financial statements.
ALEXANDER & BALDWIN, INC. AND SUBSIDIARIES
INDUSTRY SEGMENT DATA, NET INCOME
(In thousands)
Three Months Ended
March 31,
2002 2001
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(unaudited)
Revenue:
Ocean Transportation $ 192,744 $ 196,609
Property Development and Management:
Leasing 17,828 17,096
Sales 37,271 43,084
Less amounts reported in discontinued operations (30,318) (864)
Food Products 16,428 18,185
Other -- 857
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Total revenue $ 233,953 $ 274,967
========= =========
Operating Profit, Net Income:
Ocean Transportation $ 2,507 $ 17,455
Property Development and Management:
Leasing 8,242 8,740
Sales 8,878 12,216
Less amounts reported in discontinued operations (6,920) (227)
Food Products 2,095 5,802
Other -- 840
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Total operating profit 14,802 44,826
Interest Expense (2,957) (5,779)
Corporate Expenses (2,948) (3,791)
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Income From Continuing Operations Before Taxes 8,897 35,256
Income Taxes (3,380) (12,517)
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Income From Continuing Operations 5,517 22,739
Discontinued Operations (net of income taxes)
Properties 4,290 141
Agricultrue -- (446)
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Net Income $ 9,807 $ 22,434
========= =========
See notes to financial statements.
ALEXANDER & BALDWIN, INC. AND SUBSIDIARIES
CONDENSED BALANCE SHEETS
(In thousands)
March 31, December 31,
2002 2001
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(unaudited)
ASSETS
Current Assets:
Cash and cash equivalents $ 12,210 $ 19,291
Accounts and notes receivable, net 127,611 130,491
Inventories 26,356 16,280
Real estate and other assets held for sale 18,487 35,584
Deferred income taxes 10,676 9,324
Prepaid expenses and other assets 13,988 13,044
Accrued deposits to Capital Construction Fund (4,000) (4,000)
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Total current assets 205,328 220,014
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Investments 36,324 33,021
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Real Estate Developments 47,526 47,840
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Property, at cost 1,789,980 1,816,679
Less accumulated depreciation and amortization 847,296 839,631
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Property - net 942,684 977,048
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Capital Construction Fund 171,436 158,737
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Other Assets 138,727 107,759
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Total $1,542,025 $1,544,419
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LIABILITIES AND
SHAREHOLDERS' EQUITY
Current Liabilities:
Notes payable and current portion of long-term debt $ 31,400 $ 19,900
Accounts payable 62,276 78,911
Other 57,787 96,758
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Total current liabilities 151,463 195,569
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Long-term Liabilities:
Long-term debt 240,417 207,378
Deferred Income Taxes 343,017 338,709
Post-retirement benefit obligations 43,045 42,915
Other 45,884 49,181
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Total long-term liabilities 672,363 638,183
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Shareholders' Equity:
Capital stock 33,507 33,328
Additional capital 73,218 66,659
Retained earnings 623,258 622,615
Cost of treasury stock (11,784) (11,935)
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Total shareholders' equity 718,199 710,667
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Total $1,542,025 $1,544,419
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See notes to financial statements.
ALEXANDER & BALDWIN, INC. AND SUBSIDIARIES
CONDENSED STATEMENTS OF CASH FLOWS
(In thousands)
Three Months Ended
March 31,
2002 2001
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(unaudited)
Cash Flows from (used in) Operating Activities $ (38,281) $ 36,584
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Cash Flows from Investing Activities:
Capital expenditures (8,239) (25,551)
Proceeds from disposal of property, investments
and other assets 17,869 450
Capital Construction Fund, net (12,991) (2,409)
Change in investments, net (6,300) --
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Net cash used in investing activities (9,661) (27,510)
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Cash Flows from Financing Activities:
Proceeds from issuances of long-term debt 32,956 4,500
Payments of long-term debt -- (2,500)
Net proceeds (payments) of short-term debt 11,500 (5,500)
Proceeds from issuances of capital stock 5,543 3,409
Dividends paid (9,138) (9,123)
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Net cash from (used in) financing activities 40,861 (9,214)
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Net Decrease in Cash and Cash Equivalents $ (7,081) $ (140)
========= =========
Other Cash Flow Information:
Interest paid, net of amounts capitalized $ (2,691) $ (6,095)
Income taxes paid, net of refunds (36,719) (24)
Other Non-cash Information:
Accrued deposits to (withdrawals from) Capital
Construction Fund, net -- 275
Depreciation 17,926 18,030
Tax-deferred property sales 31,304 30,470
Tax-deferred property purchases -- (26,784)
Change in unrealized holding gains -- (7,598)
See notes to financial statements.
Financial Notes
(Unaudited)
(a) The Condensed Balance Sheet as of March 31, 2002, the Condensed
Statements of Income for the three months ended March 31, 2002
and 2001, and the Condensed Statements of Cash Flows for the three
months ended March 31, 2002 and 2001 are unaudited. Because of the
nature of the Company's operations, the results for interim periods are
not necessarily indicative of results to be expected for the year.
In the opinion of management, all material adjustments necessary for the
fair presentation of interim period results have been included in the
interim financial statements.
(b) Estimated effective annual income tax rates differ from statutory rates,
primarily due to the dividends-received deduction, various tax credits
and the charitable donation of appreciated stock.
(c) As a result of the adoption of Statement of Financial Accounting
Standards (SFAS) No. 144, "Accounting for the Impairment or Disposal
of Long-Lived Assets," and additional guidance from the February 2002
meeting of the Financial Accounting Standards Board, the sales of certain
income-producing assets--even individual buildings within a real estate
portfolio--are reported as "discontinued operations" if their earnings
and cash flows are separately identifiable and are material, if the cash
flows for the assets have been, or will be, eliminated from the ongoing
operations of the Company, and if the Company will not have a significant
continuing involvement in the operations of the assets sold. This
accounting standard requires A&B to segregate its property sales based
on these criteria, which is a change from the Company's long-standing
practice.
During the first quarter, the sale of the seven-building
distribution complex in Texas and the sale of a land parcel subject to a
ground lease met the criteria for classification as discontinued
operations, despite the fact that the proceeds from these sales were put
in escrow for tax-deferred reinvestment in accordance with Section 1031
of the Internal Revenue Code. The after-tax gain on the sales and the
earnings of these properties are classified, therefore, under the caption
"Discontinued Operations: Properties." As such, revenue and operating
profit generated from these properties in prior quarters were removed
from continuing operations and the after-tax operating profit for prior
quarters has been reclassified as discontinued operations.
As permitted by SFAS No. 144, comparable property sales that were
initiated prior to the Company's adoption of this accounting standard on
January 1, 2001 have not been reported as discontinued operations. The
2001 first quarter includes the sales of three properties on Bainbridge
Island, Washington for an aggregate price of $12.1 million and a gross
profit of $3.3 million.
(d) Commitments that are not included in the Company's Condensed Balance
Sheet at March 31, 2002 include a guarantee by Matson of $31,500,000 of
debt of an unconsolidated affiliate, a Company guarantee of up to
$15,000,000 of debt of an unconsolidated sugar marketing and
transportation cooperative, and standby letters of credit totaling
$22,447,000. It is expected that the Company or its subsidiaries will
not be called upon to advance funds under these commitments.
(e) Certain amounts have been reclassified to conform with the current year's
presentation.
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
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The following analysis of the consolidated financial condition and results of
operations of Alexander & Baldwin, Inc. and its subsidiaries (collectively,
the "Company") should be read in conjunction with the condensed consolidated
financial statements and related notes thereto.
FORWARD-LOOKING STATEMENTS
The Company, from time to time, may make or may have made certain forward-
looking statements, whether orally or in writing, such as forecasts and
projections 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, Securities and Exchange Commission (SEC) filings, such as the Forms
10-K, 10-Q and 8-K, press releases made by the Company, the Company's Internet
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. These forward-looking statements involve a number of risks
and uncertainties that could cause actual results to differ materially from
those projected in the statements, including, but not limited to: (1) impact of
events of September 11, 2001; (2) economic conditions in Hawaii and elsewhere;
(3) market demand; (4) competitive factors and pricing pressures in the
Company's primary markets; (5) legislative and regulatory environments at the
federal, state and local levels, such as government rate regulations, land-use
regulations, government administration of the U.S. sugar program, and
modifications to or retention of cabotage laws; (6) dependence on third-party
suppliers; (7) fuel prices; (8) raw sugar prices; (9) labor relations;
(10) risks associated with current or future litigation and resolution of tax
issues with the IRS and state tax authorities; (11) the performance of
unconsolidated affiliates and ventures; and (12) other risk factors described
elsewhere in these communications and from time to time in the Company's
filings with the SEC.
FIRST QUARTER EVENTS:
Operating Results: Net income for the first quarter of 2002 was $9,807,000,
or $0.24 per share. In the first quarter of 2001, net income was
$22,434,000, or $0.55 per share. First quarter 2002 income from continuing
operations was $5,517,000, or $0.14 per share, compared with first quarter 2001
income from continuing operations of $22,739,000, or $0.56 per share. Revenue
in the first quarter of 2002 was $233,953,000 compared with revenue of
$274,967,000 in the first quarter of 2001.
Discontinued Operations: As a result of the adoption of Statement of Financial
Accounting Standards No. 144, "Accounting for the Impairment or Disposal of
Long-Lived Assets," and additional guidance from the February 2002 meeting of
the Financial Accounting Standards Board, the sales of certain income-
producing assets are classified as discontinued operations if the operations
and cash flows of the assets can be clearly distinguished from the remaining
assets of the Company, if the cash flows for the assets have been, or will be,
eliminated from the ongoing operations of the Company, and if the Company will
not have a significant continuing involvement in the operations of the assets
sold. This accounting standard requires A&B to segregate its property sales
based on these criteria, which is a change from the Company's long-standing
practice. Accordingly, the sales of many income-producing real-estate assets
are now required to be reported as discontinued operations.
During the first quarter, the sale of the seven-building distribution complex
in Texas and the sale of a land parcel subject to a ground lease met the
criteria for classification as discontinued operations. The after-tax gain on
the sales and the earnings of these properties, totaling $4,290,000, or $0.10
per share, for the first quarter of 2002, are classified, therefore, under the
caption "Discontinued Operations: Properties." The revenue and operating profit
generated from these properties in prior years were removed from continuing
operations. The after-tax operating profit during the first quarter of 2001
that was reclassified as discontinued operations following the sale of the
properties in 2002 totaled $141,000. Consistent with the Company's intention
to reinvest the sales proceeds into new investment property, the amounts
received from these sales were put in escrow accounts for tax-deferred
reinvestment in accordance with Section 1031 of the Internal Revenue Code.
As permitted by SFAS No. 144, comparable property sales that were initiated
prior to the Company's adoption of this accounting standard on January 1, 2001
have not been reported as discontinued operations. The 2001 first quarter
includes the sales of three properties on Bainbridge Island, Washington for an
aggregate price of $12.1 million and a gross profit of $3.3 million.
RESULTS OF SEGMENT OPERATIONS -
FIRST-QUARTER 2002 COMPARED WITH THE FIRST-QUARTER 2001
Ocean Transportation revenue of $192,744,000 for the first quarter of 2002
decreased two percent from that in the comparable period of 2001 and operating
profit of $2,507,000 decreased 86 percent. Hawaii container volume for the
first quarter of 2002 was three percent lower than in the first quarter of
2001, primarily because of post-9/11 lower cargo volume and from competitive
losses due to Sand Island service disruptions caused by a conversion in the
mode of terminal operations. In January 2002, the fleet serving Hawaii was
reduced from eight to seven vessels in anticipation of reduced cargo volume.
Automobile volume decreased 23 percent compared with the first quarter of 2001
due to a reduction of the rental car fleet in Hawaii, again because of
post-9/11 actions taken by rental car companies. Matson's operating costs
were higher due to ongoing, but moderating, transitional effects of the
terminal improvement project in Honolulu as well as costs incurred to
accommodate scheduled vessel drydocking. Results also were lower due to
comparatively weaker results from Matson's Guam service. A general rate
increase of 2.75% became effective April 14, 2002. Additionally, Matson
increased its fuel surcharge from 3.25% to 4.75%, due to recent increases
in the prices of bunker fuel, effective May 5, 2002.
Prospectively, auto shipments are expected to increase as rental car fleets
in Hawaii are renewed and shipping margins are expected to increase modestly
during the second quarter. Beneficial changes are also expected in Matson's
stevedoring joint venture and in the Puerto Rico trade conditions. Matson
participates in the latter through a minority investment in Sea Star Line, LLC
(Sea Star).
In January 2002, Matson sold two vessels to Sea Star for $17,000,000, which
approximated the vessels' carrying value.
Property Development and Management - Leasing operating profit, including
discontinued operations, of $8,242,000 was six percent lower than the
$8,740,000 reported in the first quarter of 2001. This decrease was the
net result of property acquisitions and sales, the timing of some expenses and
marginally lower occupancies. First-quarter 2002 occupancy levels for
Mainland properties averaged 91 percent, versus 94 percent in the first quarter
of 2001. Occupancy levels for Hawaii properties averaged 87 percent in the
first quarter of 2002, versus 89 percent in the comparable period of 2001.
During the first quarter, the Company withdrew from its pursuit of the purchase
of a 65-acre commercial property in Honolulu owned by Victoria Ward, Limited.
The Company's interest in the property is, however, a reflection of
management's belief in Hawaii's future and the ability to improve value through
strategic acquisitions. The Company is actively evaluating and pursuing new
real estate acquisitions and developments.
Property Development and Management - Sales revenue, including discontinued
operations, of $37,271,000 and operating profit, including discontinued
operations, of $8,878,000 for the first quarter of 2002 were the result of the
sales of a seven-building distribution complex in Texas and a number of smaller
Hawaii commercial properties, including residential resort homes. Sales
revenue of $43,084,000 and operating profit of $12,216,000 for the first
quarter of 2001 were the result of sales of several properties on Bainbridge
Island, Washington, comprised of a shopping center, office building and a
retail building, a 14-acre industrial lot on Maui for a planned Wal-Mart
store, two commercial lots and 22 residential properties.
The Company has accelerated development plans for its Kukui'Ula project on the
Island of Kauai and has entered into a joint venture agreement with DMB
Associates, Inc. The venture will be tasked with planning, development and
sales of the project. The Kukui'Ula project comprises 1,045 acres on the
southern coast of Kauai, adjacent to the Poipu Resort. The project consists of
837 acres fully entitled for a resort, an 18-hole golf course, and
residential and commercial use. The remaining 208 acres are partially
entitled. Land use entitlements were obtained in 1999; since then, A&B has
actively pursued necessary pre-development activities, including archaeological
preservation, water source development, surveying, beach enhancement and other
land planning. Kukui'Ula's initial residential development project, the 32-lot
Koloa Estates, is sold out.
Discontinued Operations: Properties - Revenue and operating profit in the
Industry Segment Data for the property management and development segment,
discussed above, include properties sold that are reported as discontinued
operations, since this is how management views and evaluates this business
segment. In addition, the Company intends to continue its practice of
reinvesting the proceeds from the sales of investment property into new
income-earning property using tax-deferred exchanges. This presentation is
also consistent with how investment analysts have advised that they view the
Company's real estate businesses. As noted earlier, the sales of certain
property are required by SFAS No. 144 to be accounted for as discontinued
operations. These amounts are subtracted in deriving total revenue and
operating profit and are shown, net of tax, under the caption "Discontinued
Operations: Properties."
As mentioned earlier, the 2002 first quarter discontinued operations included
the sales of a seven-building distribution complex in Texas and the sale of a
land parcel subject to a ground lease.
Food Products revenue of $16,428,000 for the first quarter of 2002 was
$1,757,000 lower than that in the comparable period of 2001. Operating profit
for the first quarter of 2002 was $2,095,000, compared with $5,802,000 for the
first quarter of 2001. Both of these decreases were due primarily to a first
quarter 2001 one-time distribution from the sugar marketing and transportation
cooperative that handles the Hawaii sugar growers' production and to lower raw
sugar prices. Domestic sugar prices for 2002 are expected to be slightly lower
than for 2001. Sugar production for 2002 is expected to improve, compared with
the 191,512 tons produced during 2001.
In 2001, the Company ceased the operations of and abandoned its panelboard
manufacturing business operated by Hawaiian DuraGreen, Inc., a wholly owned
subsidiary of the Company (reported in 2001 discontinued operations). This is
discussed further in Item 8 of the Company's Form 10-K for the year ended
December 31, 2001.
FINANCIAL CONDITION AND LIQUIDITY, FINANCING ARRANGEMENTS AND WORKING CAPITAL
The Company's principal liquid resources, comprising cash and cash equivalents,
receivables, sugar and coffee inventories and unused lines of credit, less
accrued deposits to the Capital Construction Fund, totaled $487,495,000 at
March 31, 2002, a decrease of $40,361,000 from December 31, 2001. This net
decrease was due primarily to $33,000,000 in higher drawn balances on variable
rate facilities following the payment of federal income taxes related to the
December 2001 bank stock sales, lower cash balances and lower receivables,
partially offset by agricultural inventories that were $10,600,000 higher than
at year-end 2001 due to seasonality of production cycles.
Other financing arrangements at the end of the first quarter included a
guarantee by Matson of $31,500,000 of debt of an unconsolidated affiliate, a
Company guarantee of up to $15,000,000 of debt of an unconsolidated sugar
marketing and transportation cooperative, and standby letters of credit
totaling $22,447,000. These amounts are not recorded on the Company's
balance sheet and it is not expected that the Company or its subsidiaries
will be called upon to advance funds under these commitments.
Working capital was $53,865,000 at March 31, 2002, an increase of $29,420,000
from the amount at the end of 2001. The higher working capital was due
primarily to paying the federal income taxes (due on the sale of bank stocks),
higher agricultural products inventory, and lower trade payables, partially
offset by lower cash balances and trade receivables.
Cash Flows used in Operating Activities were $38,281,000 for the first quarter
of 2002 compared with Cash Flows from Operating Activities of $36,584,000 for
the first quarter of 2001. This decline was due principally to the timing of
payments for taxes and accounts payable.
OTHER MATTERS
Pensions: As noted in Item 8 of the Company's 2001 Form 10-K, the Company has
realized earnings benefits from pension returns and the excess of pension
assets over pension obligations. For 2001, the total year benefit was
approximately $12.7 million. For 2002, the Company expects that the full year
benefit will be approximately $1.4 million.
Property Sales and Trends: The mix of property sales in any year or quarter
can be diverse. Sales can include developed residential real estate,
commercial properties, developable subdivision lots, undeveloped land and
property sold under threat of condemnation. The sale of undeveloped land and
vacant parcels generally provides a greater contribution to earnings than does
the sale of developed and commercial property, due to the low historical-cost
basis of the Company's Hawaii land. Consequently, property sales revenue
trends, cash flows from the sales of real estate and the amount of real estate
held for sale on the balance sheets do not necessarily indicate future
profitability trends for this segment.
New Accounting Standards: The impacts of newly issued accounting standards are
discussed in Item 8 of the Company's Form 10-K for the year ended December 31,
2001.
Tax-Deferred Real Estate Exchanges: During the first three months of 2002, the
Company recorded real-estate sales of $31,304,000 that are expected to be
reinvested in replacement property on a tax-deferred basis. The funds from
these sales are held in escrow, pending future use to purchase new real estate
assets. These amounts are not included in "Cash Flows from Operating
Activities" and "Capital Expenditures," but are reported under the caption
"Other Non-cash Information" in the Condensed Statements of Cash Flows. There
were no purchases during the first three months of 2002.
Environmental Matters: As with most industrial and land-development companies
of its size, the Company's operations have certain risks, which could result in
expenditures for environmental remediation. The Company believes that it is in
compliance, in all material respects, with applicable environmental laws and
regulations, and works proactively to identify potential environmental
concerns. Management believes that appropriate liabilities have been accrued
for environmental matters.
Economic Conditions: The outlook for Hawaii's economy is improving, due in
part to the recovery apparently under way in the U.S. economy overall. Although
there still are concerns about the strength of the Mainland recovery, the weak
Japanese tourism, and the risk of energy price rises, the outlook now is
considerably brighter, and clearer than it was in the period immediately
following the events of 9/11. Three trends are affecting Hawaii:
o The U.S. recovery and demographic trends have brought domestic visitor
travel statistics back to pre 9/11 levels faster than many had
anticipated. This recovery has favored the economies of Hawaii's neighbor
islands because they tend to be preferred destinations for visitors from
domestic markets. In addition, some of these visitors, especially those
of the "baby boom" generation, are a source of demand for residential
resort real estate.
o Continuing weakness, however, in Japan's economy and in the value of the
Japanese yen continues to delay a recovery in the number of visitors from
Japan. Those factors have reduced visitor arrivals on Oahu, which tends
to be the destination of choice for visitors from Japan.
o Lastly, interest-sensitive sectors, such as construction, and sales of
real estate, autos and consumer durables, have benefited from recent rate
cuts by the Federal Reserve Bank, and appear to be "holding up" well in
spite of the broader uncertainties.
In response to demand, long-haul domestic airlines have restored their
schedules to Hawaii and, for competitive reasons, the inter-island carriers
have been adding U.S. Mainland destinations to their flight schedules. As a
result, domestic seat capacity serving the Islands will be at an improved
level for the important summer season.
The outlook for A&B's businesses continues to reflect, in large measure, that
of Hawaii. Matson's cargo demand, both for freight and for autos involved in
the visitor rental-car trade, will benefit from prospective improvements in
visitor traffic and resulting greater overall demand within Hawaii's business
community. Similarly, leasing of commercial properties and residential sales
also will benefit from these trends. Food products results, however, remain
primarily tied to the size of the sugar crop, domestic raw sugar prices and the
effectiveness of internal cost controls.
With the likely prospect of economic improvement during 2002, and as management
initiatives gain strength, it is expected that quarterly results will
improve, especially at Matson, as the economy and year progess.
Management Changes: James S. Andrasick was promoted to Executive Vice
President of Alexander & Baldwin, Inc. on April 25, 2002. Mr. Andrasick is
also the Chief Financial Officer and Treasurer of the Company.
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
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Information concerning market risk is incorporated herein by reference to Item
7A of the Company's Form 10-K for the fiscal year ended December 31, 2001.
There has been no material change in the quantitative and qualitative
disclosure about market risk since December 31, 2001.
PART II. OTHER INFORMATION
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
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(a) Exhibits
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10. Material contracts.
10.b.1.(xlvi) Amendment No. 2 to the Alexander & Baldwin, Inc.
1998 Stock Option/Stock Incentive Plan.
11. Statement re Computation of Per Share Earnings.
(b) Reports on Form 8-K
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No reports on Form 8-K were filed during the quarter.
SIGNATURES
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Pursuant to the requirements of the Securities Exchange Act of l934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
ALEXANDER & BALDWIN, INC.
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(Registrant)
Date: May 14, 2002 /s/ James S. Andrasick
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James S. Andrasick
Executive Vice President, Chief
Financial Officer and Treasurer
Date: May 14, 2002 /s/ Thomas A. Wellman
-------------------------
Thomas A. Wellman
Controller
EXHIBIT INDEX
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10. Material contracts.
10.b.1.(xlvi) Amendment No. 2 to the Alexander & Baldwin, Inc. 1998
Stock Option/Stock Incentive Plan.
11. Statement re Computation of Per Share Earnings.
ALEXANDER & BALDWIN, INC.
1998 STOCK OPTION/STOCK INCENTIVE PLAN
AMENDMENT NO. 2
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The Alexander & Baldwin, Inc. 1998 Stock Option/Stock Incentive Plan (the
"Plan"), is hereby amended, effective as of January 23, 2002, in the following
respects:
1. Paragraph A of Section V ("STOCK SUBJECT TO THE PLAN") of Article One
of the Plan is hereby amended in its entirety to read as follows:
"A. The stock issuable under the Plan shall be shares of authorized
but unissued or reacquired Common Stock, including shares repurchased by
the Corporation on the open market. The maximum number of shares of
Common Stock issuable over the term of the Plan shall not exceed
4,000,000 shares. Such share reserve includes the 1,900,000 share
increase authorized by the Board on January 24, 2002, subject to
stockholder approval."
2. There is hereby added to Section II ("EFFECTIVE DATE AND TERM OF
THE PLAN") of Article Five of the Plan, a new Paragraph C, to read as follows:
"C. No stock options granted under the Plan in respect of the
1,900,000 share increase, authorized by the Board on January 24, 2002,
may be exercised in whole or in part prior to approval of such share
increase by the Corporation's stockholders at a meeting of stockholders."
3. Except as modified by this Amendment No. 2, all the terms and
provisions of the Alexander & Baldwin, Inc. 1998 Stock Option/Stock Incentive
Plan shall continue in full force and effect.
4. If shareholder approval of this Amendment No. 2 is not obtained
within twelve (12) months from the date hereof, this Amendment No. 2 shall
terminate and be of no force or effect.
IN WITNESS WHEREOF, Alexander & Baldwin, Inc. has caused this Amendment
No. 2 to be executed on its behalf by its duly-authorized officers on this
24th day of January, 2002.
ALEXANDER & BALDWIN, INC.
By /s/ John F. Gasher
Its Vice President
By /s/ Alyson J. Nakamura
Its Secretary
EXHIBIT 11
ALEXANDER & BALDWIN, INC.
COMPUTATION OF EARNINGS PER SHARE
(In thousands, except per share amounts)
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Three Months Ended
March 31,
2002 2001
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Basic Earnings Per Share
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Net income $ 9,807 $ 22,434
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Average number of shares outstanding 40,623 40,508
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Basic earnings per share $ 0.24 $ 0.55
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Diluted Earnings Per Share
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Net income $ 9,807 $ 22,434
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Average number of shares outstanding 40,623 40,508
Effect of assumed exercise of
outstanding stock options 287 302
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Average number of shares outstanding
after assumed exercise of
outstanding stock options 40,910 40,810
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Diluted earnings per share $ 0.24 $ 0.55
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