Hawaii
|
0-565
|
99-0032630
|
(State
or other jurisdiction of incorporation)
|
(Commission
File Number)
|
(I.R.S.
Employer
Identification
No.)
|
□
|
Written
communications pursuant to Rule 425 under the Securities Act
(17 CFR
230.425)
|
□
|
Soliciting
material pursuant to Rule 14a-12 under the Exchange Act (17
CFR
240.14a-12)
|
□
|
Pre-commencement
communications pursuant to Rule 14d-2(b) under the Exchange
Act (17
CFR 240.14d-2(b))
|
□
|
Pre-commencement
communications pursuant to Rule 13e-4(c) under the Exchange
Act (17
CFR 240.13e-4(c))
|
99.1
|
Transcript
of Analyst Webcast; September 30,
2005.
|
99.2
|
Slides
Related to Analyst Webcast; September 30,
2005.
|
ALEXANDER
&
BALDWIN, INC.
|
|
/s/ Christopher J. Benjamin | |
Christopher J. Benjamin | |
Senior Vice President & | |
Chief Financial Officer |
Alexander
& Baldwin, Inc.
Strategic
Update 9/30/05
|
Statements
in this presentation that set forth expectations and predictions
are based
on facts and situations that are known to us as of today, September
30,
2005. Actual results may differ materially due to risks and uncertainties,
such as those described on page 22 of the Form 10-K in our 2004 annual
report and our other subsequent filings with the SEC. Statements
in this
call are not guarantees of future
performance.
|
Strategic
Direction
Matson
A&B
Properties
Agribusiness
Financial
Overview, Summary
|
A&B
Properties has become the most competitive real estate organization
in
Hawaii
Matson’s
profitability levels have been restored
Increased
growth expectations and capital investment
Solid
financial position
Key
challenges:
Sustaining
profit momentum at Matson in spite of recurring external challenges;
Guam
replacement choice
Continuing
success in identifying and investing in profitable real
estate
|
Context:
Hawaii
economic pace strong, sustainable
Real
estate markets strong; price growth moderating
Matson:
Guam-China
service
Startup
challenges and risks
Excellent
long-term potential
Auto
competitor
Responded
to new entrant
Expect
ongoing Matson actions to reduce cost of auto business
Properties:
Solid
outlook for existing developments Increased
confidence in investment pipeline
|
2001
|
2002
|
2003
|
2004
|
2005
|
||||||||||||||
1st
Qtr
|
2nd
Qtr
|
3rd
Qtr
|
4th
Qtr
|
1st
Qtr
|
2nd
Qtr
|
3rd
Qtr
|
4th
Qtr
|
1st
Qtr
|
2nd
Qtr
|
3rd Qtr
|
4th Qtr
|
1st
Qtr
|
2nd
Qtr
|
3rd
Qtr
|
4th
Qtr
|
1st
Qtr
|
||
Yr-Yr
% Chg (Left Scale)
|
-10.3
|
-5.4
|
2.9
|
24.2
|
1.6
|
-5.2
|
1.5
|
1.5
|
4.6
|
14.2
|
7.6
|
7
|
12.3
|
2.2
|
||||
Visitor
Arrivals (Right Scale)
|
1,715
|
1,674
|
1,647
|
1,268
|
1,538
|
1,583
|
1,694
|
1,574
|
1,563
|
1,501
|
1,719
|
1,597
|
1,635
|
1,714
|
1,849
|
1,709
|
1,837
|
1750
|
2001
|
2002
|
2003
|
2004
|
2005
|
||||||||||||||
1st
Qtr
|
2nd
Qtr
|
3rd
Qtr
|
4th
Qtr
|
1st
Qtr
|
2nd
Qtr
|
3rd
Qtr
|
4th
Qtr
|
1st
Qtr
|
2nd
Qtr
|
3rd
Qtr
|
4th
Qtr
|
1st
Qtr
|
2nd
Qtr
|
3rd
Qtr
|
4th
Qtr
|
1st
Qtr
|
||
Yr-Yr
% Chg (Left Scale)
|
2.2
|
1.1
|
0.7
|
-1.7
|
-1.2
|
-0.4
|
0.1
|
2.6
|
2.8
|
1.7
|
1.6
|
1.5
|
1.7
|
2.5
|
2.8
|
3.3
|
2.9
|
2.8
|
Total
Jobs (Thousands) (Right Scale)
|
562
|
566
|
562
|
560
|
556
|
564
|
562
|
574
|
571
|
574
|
571
|
583
|
581
|
588
|
587
|
602
|
598
|
604.5
|
2001
|
2002
|
2003
|
2004
|
2005
|
||||||||||||||
1st
Qtr
|
2nd
Qtr
|
3rd
Qtr
|
4th
Qtr
|
1st
Qtr
|
2nd
Qtr
|
3rd
Qtr
|
4th
Qtr
|
1st
Qtr
|
2nd
Qtr
|
3rd
Qtr
|
4th
Qtr
|
1st
Qtr
|
2nd
Qtr
|
3rd
Qtr
|
4th
Qtr
|
1st
Qtr
|
||
Yr-Yr
% Chg (Left Scale)
|
||||||||||||||||||
Total
Private Building Authorizations ($M)
|
363
|
424
|
421
|
379
|
336
|
437
|
498
|
501
|
655
|
708
|
531
|
458
|
781
|
719
|
598
|
629
|
665
|
620.3
|
Single
Family Media Sales Prices
Condominium
Median Sales Prices
|
Strategic
Direction
Matson
A&B
Properties
AgribusinessFinancial
Overview, Summary
|
Stronger
than anticipated Hawaii economy and trade
Guam-China
service
Long-term
upside, increased capital and risks
Anticipated
transition impacts unchanged
Increasingly
competitive auto trade
Initial
Matson responses good
Taking
competitor seriously
Logistics:
continued growth, new challenges
Positive
outlook for SSAT
|
Start
of new service now five months away
Across-the-board
effort--41 teams
One
vessel weekly:
Less
than 1% total export market
About
5% of Ningbo, Shanghai market
Target:
50,000 annual containers, $100M
revenue
|
Accomplished
|
Under
Way
|
Ports selected | Terminals |
Offices leased | Equipment depots |
Agents selected | EDI interface with agents |
Management selected | Additional staffing, training |
Legal issues set | APL transition |
Media plans set | Sand Island preparations |
Ships acquired | Compliance: SOX, FCPA |
Equipment acquired | Building WB Hawaii-China service |
Central planning | Regulatory: security, customs |
Cargo
Volume
Startup,
trade contracts don't expire until May 1
Scope
of service is limited
Matson
name new in China, will have to build track record
Competition
New
capacity entering market
ImponderableUS/China
relations
|
Sales
Strategy
Retail,
service-based focus, not wholesale
Broad
customer base
70%
of cargo US-controlled
Many
existing customers
Sales
force selected
30%
of cargo China-controlled
Brand
presence in China
Key
success factors:
Competitive
pricingPremium
service
|
Service
Advantages
Timeliness
Fast
transit time
Faster
cargo throughput, dedicated terminal
Faster
vessel loading/unloading
Reliability
Convenience
of off-dock facility
Seamless
intermodal services, MIL
Customer
Service
Dedicated
US-based China customer service team
Dedicated
China staff in Shanghai and NingboBuild
a stable niche position
|
Automobile
Strategy
Pasha
initial impact muted
Strong
auto market
Matson's
long term contracts with manufacturers
Strategic
investments planned to lower business cost, improve service
Vessel
conversions: add Ro/Ro capacityTerminal
improvements in Oakland &
Honolulu
|
New
C-9G Design
Converted
ships’ capacity: 1,000 vehicles and 2,000 TEUsNearly
equivalent to a C-8 and S.S. Great Land,
combined
|
Matson
Integrated Logistics
Continued
growth in earnings and margins
Scale
driven; consolidation of industry underway
Rail
segment problematic; highway more favorableActive
acquisition program
|
Agenda
Strategic
Direction
Matson
A&B
Properties
AgribusinessFinancial
Overview, Summary
|
Strategic
Direction: Properties
Strength
of Hawaii economy
Real
estate markets strong; price growth moderating
Consistent
stability in leased portfolio
Challenges
Construction
costs
Government
approvals
Acquisition
pricing
Increased
investment
Solid
outlook for existing projects, e.g., Wailea, Kai Malu, Kukui'ula,
Keola
La'iShift
from undesignated to designated
investments
|
Strategic
Shift
Focus
on our roots
Entitlements
Development,
Sales
Maintain
agriculture operations for foreseeable future
Opportunistic
sales of low-basis, non-core holdings
Growth
beyond A&B lands
Capitalize
on market knowledge, reputation
Started
with "one-offs," pattern of successNow,
increased focus on longer-lived
investments
|
2005
|
Daiei
|
Oahu
|
|||
2003
|
Napili
Plaza
|
Maui
|
|||
2002
|
Mililani
Shopping Ctr.
|
Oahu
|
|||
2001
|
Pacific
Guardian Tower
|
Oahu
|
|||
9
Income
|
2001
|
Kaneohe
Bay Shopping Ctr.
|
Oahu
|
||
2000
|
Judd
Building
|
Oahu
|
|||
1999
|
Ocean
View
|
Oahu
|
|||
1999
|
Haseko
|
Oahu
|
|||
1999
|
Hawaii
Business Park
|
Oahu
|
|||
|
2005
|
Lanihau
|
Hawaii
|
||
2004
|
Keola
La’i
|
Oahu
|
|||
2004
|
Ka
Milo at Mauna Lani
|
Hawaii
|
|||
2004
|
Kai
Malu
|
Maui
|
|||
2003
|
Wailea
|
Maui
|
|||
2003
|
Hokua
|
Oahu
|
|||
2003
|
Alakea
Corporate Tower
|
Oahu
|
|||
15
Development
|
2002
|
Kunia
Commercial
|
Oahu
|
||
2001
|
Lanikea
at Waikiki
|
Oahu
|
|||
2001
|
Kai
Lani
|
Oahu
|
|||
2001
|
HoloHolo
Ku
|
Hawaii
|
|||
2000
|
Summit
|
Maui
|
|||
2000
|
Fairway
Shops
|
Maui
|
|||
1999
|
Vintage
|
Maui
|
|||
1998
|
Mill
Town
|
Oahu
|
No.
|
GLA
|
2004
|
||||||||
|
of Properties |
(MM
sf)
|
|
GM
($MM)
|
|
|||||
Hawaii
|
24
|
1.7
|
22
|
|||||||
Mainland
|
19
|
3.5
|
19.4
|
|||||||
Total
|
43
|
5.2
|
41.4
|
Occupancy
|
Mainland
|
Hawaii
|
2004
|
95%
|
90%
|
Current
|
94%
|
93%
|
Lanikea
at Waikiki
100
units, 1,100 sf
$582,000
avg. price ($565/sf)
Total
development cost $45M
Total
margin $12-13M
Construction
completed Jul 2005
Closed
all sales Jul-Aug 2005
|
Kunia
Shopping Center
Neighborhood
center, adjacent to Wal-Mart
Total
cost $14M
60,500
sf total, in-line and pads
100%
leased
Grand
opening Nov 2005
|
Kohua
JV
JV
w/MacNaughton/Kobayashi
247
units, 1,800 sf
247
binding contracts
$1.1M
avg. price ($610/sf)
Total
development cost $210M
A&B
investment $40M
Complete
construction Dec 2005
Close
initial sales Jan 2006
Complete
closings Mar 2006
|
Maui
Business Park Phase II
179
acres, State Land Use: 2004-2005
County
Zoning: Expected 1Q 2006
Commence
construction 2008
|
Kukui`ula
JV
JV
with DMB Associates
1,000
acres
1,200
units
Sales
from 2006 to 2016
A&B
investment $75M
Total
development cost $750M
|
Kukui'ula
Sales Launch
Founders
program (123 units):
35
Mauka home sites
17
Cottage home sites
71
Cottages
Exceptional
response:
300+
non-binding reservations
$50,000
Deposits
Expanded
program to 270 units
General
price range: $1M - $4M
|
Starting
|
|
Mass grading |
1Q
2006
|
Western bpass road |
1Q
2006
|
Major project road |
2Q
2006
|
Bond subdivision improvements |
3Q
2006
|
Close initial sales |
4Q
2006
|
Onsite civil construction |
2Q
2007
|
Complete golf course & club |
4Q
2008
|
First occupancies |
1Q
2009
|
Acres
|
Revenue
|
Year(s)
|
|
Bulk Sales: |
$17.7
|
2004-5
|
|
MF-9 |
30
|
4.7
|
2004
|
MF-15 |
9
|
5.5
|
2004
|
MF-4 |
11
|
4.5
|
2004
|
MF-5 |
8
|
|
|
Retail Lot Sales: |
25.4
|
2004-5
|
|
Golf Vistas |
12
|
57.8
|
|
Subtotal |
70
|
||
Joint Venture: |
12.2*
|
2006-7
|
|
MF-8 |
25
|
||
Remaining Balance: |
175
|
||
Total Revenue |
$70.0
|
||
*Agreed-upon
value of capital contribution
|
Next
Wailea Development
MF-11
10
acres
12
1/2-acres residential lots, 3 acres commercial
Close
initial sales 2006
MF-19
6.7
acres
9
1/2-acre residential lots
Close
initial sales 2007
MF-10
13.7
acres
2
multi-family parcels, 9 golf course residential lots, 60,000+ sf
retail
Close
initial sales 2008
|
Keola
La'i
352
units, 1,000 sf avg.
Includes
63 gap housing
225
units released, 200 non-binding contracts
$630,000
est. avg. price ($630/sf)
Total
development cost $163M
Commence
construction 1Q 2006
Complete
construction 1Q 2008
Close
initial sales 1Q 008
|
Port
Allen Residential (Kauai)
Keala'ula:
60 single family homes on 12 acres -- $375,000 avg. price
Kai
`Olino: 75 condo units on 5 acres -- $425,000 avg. price
Total
project cost $42M
Commenced
marketing May 2005
Commence
construction 1Q 2006
Close
initial sales 1Q 2007
|
Ka
Milo at Mauna Laniu (Big Island)
50:50
JV w/Brookfield Homes
30
acres, 137 units
37
single family homes
2,100
to 2,500 sf
100
duplex townhomes
1,600
to 2,400 sf
Total
project cost $123M
Commence
construction 4Q 2005
Complete
construction 2008
Close
initial sales 4Q 2006
|
Kahului
Town Center Redevelopment
Fire
destroyed historic Kahului Shopping Center
Completed
master redevelopment plan
2-300
residential units, 150,000 sf GLA commercial space
Commence
construction 2007
Complete
construction 2010
Close
initial sales 2009
|
Haliimaile
Subdivision (Maui)
63
acres
150-200
single-family lots
Council
zoning approval Sep 2005
Commence
construction 2007
Complete
construction 2008
Close
initial sales 2008
|
Lanihau
Phases I & II (Big Island)
Phase
I
88,100
sf existing GLA
9.7
acres
Fee
simple
100%
occupancy
Phase
II
22.3
acres, fully settled
238,000
sf new GLA
$85M
investment
JV
partner anticipated
Commence
construction 2007
Complete
construction 2008
|
Kaka'ako
Makai (Oahu)
36
acres
7.5
acres for mid-rise residential (fee simple), 950 units
20
acres for 200,000+ sf retail (leasehold)
4
months planned for negotiation of terms
$650M
total development capital (75% phased
residential)
|
Agenda
Strategic
Direction
Matson
A&B
Properties
Agribusiness
Financial
Overview, Summary
|
Strategic
Direction: Agribusiness
Volume-driven,
commodity priced business
--Reduced
sugar production
--Raw
sugar prices depressed
--Reaching
limits of cost containment
Sustainable
business model needed: energy & specialty sugar, with commodity
component
--Specialty
sugar: not solution on its own
--Capital required to increase capacity
--Modest profitability improvement
--Energy
farm: enhanced by higher energy prices
--Ethanol yields are dependent on technology
--Significant earnings potential, high capital
investment
|
Agenda
Strategic
Direction
Matson
A&B
Properties
Agribusiness
Financial
Overview, Summary
|
Significant
Capital Program
Continued
active investment program -- more than $1B
Emphasis
on real estate
Previously
announced projects
--Kukui'ula:
$75M
--Keola
La'i: $160M
--Guam-China
Service: $365M
Pending/future
projects
--Wailea
developments
--Kaka'ako
Waterfront
--Acquisitions
--Development properties
--Matson Integrated Logistics growth
--Auto
business investments
|
Business
Composition
ASSET
DISTRIBUTION
2004
Actual:
Matson
53%
Properties
41%
Agribusiness
6%
2009
Projection
Matson
48%
Properties
47%
Agribusiness
5%
INCOME
FROM OPERATIONS DISTRIBUTION
2004
Actual
Matson
60%
Properties
39%
Agribusiness
1%
2009
Projection
Matson
50%
Properties
48%
Agribusiness
2%
|
Financing
Strategy Review
Leverage
Current
debt to debt-plus-equity: 27%
Will
increase over next two years, peaking between 35-40%, declining
thereafter
Strong
long-term cash flows, with Properties harvesting investments
Maintain
investment grade
Current
capacity
Revolving
facilities and overnight lines: ~$300 million
Undrawn
$105M DNBNor facility for MV Maunalei
Prudential
$75 million shelf facility
Future
financing
Existing
facilities
New
unsecured term debt
JVs/Partnerships
Project
finance as needed
|
|
Net
|
Dividends
|
Dividend
|
Cash
For
|
Total
Cash
|
Year
|
Income
|
Paid
|
Ratio
|
Repurchases
|
Ratio
|
1995
|
$55.8
|
$40.0
|
72%
|
$0.5
|
73%
|
1996
|
62.3
|
39.9
|
64%
|
1.3
|
66%
|
1997
|
81.4
|
39.8
|
49%
|
16.6
|
69%
|
1998
|
25.1
|
40.3
|
161%
|
20.8
|
243%
|
1999
|
62.6
|
38.9
|
62%
|
34.8
|
118%
|
2000
|
90.6
|
36.8
|
41%
|
48.3
|
94%
|
2001
|
110.6
|
36.5
|
33%
|
2.3
|
35%
|
2002
|
58.2
|
36.9
|
63%
|
--
|
63%
|
2003
|
81.3
|
37.4
|
46%
|
--
|
46%
|
2004
|
100.7
|
38.3
|
38%
|
2.3
|
40%
|
$728.6
|
$ 384.8
|
53%
|
$126.9
|
70%
|
Summary:
Outlook For 2006
Consistenet
with prior guidance
Transportation
--
8-10% earnings growth objective, excluding Guam-China
--
$20-25M operating profit impact of Guam-China, $12M interest
expense
Agriculture
--
Minimal to moderate profitability
Real
Estate:
--
13-15% earnings growth objective
--
Lower in income portfolio
--
Higher in development, sales
Overall:
--
Expect 2006 earnings below 2005
|
Beyond
2006
Sustainable
growth
--
Guam-China upside
--
Multi-year development projects
Progress
toward balance between segments
Financial
capacity to pursue growth
opportunities
|