Alexander & Baldwin, Inc.

Good day and welcome to the Alexander and Baldwin third quarter 2021 earnings conference call. All participants will be in a listen-only mode. Should you need assistance, please signal a conference specialist by pressing the star key followed by zero. After today's presentation, there will be an opportunity to ask questions. To ask a question, you may press star then one on your telephone keypad. To withdraw your question, please press star then two. Please note, this event is being recorded. I would now like to turn the conference over to Steve Sweat with Investor Relations. Please go ahead.

Thank you. Aloha and welcome to our call to discuss Alexander Baldwin's third quarter 2021 earnings. With me today for our earnings call are A&B's President and Chief Executive Officer Chris Benjamin, Lance Parker, our Chief Operating Officer, and Brett Brown, Chief Financial Officer. Clayton Chun, Chief Accounting Officer, is also present and will be available for the Q&A portion of the call. Before we commence, please note that statements in this call and presentation that are not historical facts are forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 that 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, as well as the rapidly changing challenges with and the company's plans and responses to the novel COVID-19 pandemic and related economic disruptions. 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 and uncertainties, assumptions, and other factors that could cause actual results in 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 risks associated with the COVID-19 pandemic and its impacts on the company's businesses, results of operations, liquidity, and financial condition, evaluation of alternatives by the company related to its materials and construction business, and by the company's joint venture related to the development of Cucuyula, generally discussed in the company's most recent Form 10-K, Form 10-Q, and other filings with the SEC. The information in this call and the presentation should be evaluated in light of these important risk factors. We do not undertake any obligation to update the company's forward-looking statements. Management will be referring to non-GAAP financial measures during our call today. Included in the appendix of today's presentation slides is a statement regarding our use of these non-GAAP measures and reconciliations. Slides from this presentation are available for download at the investor section of our website at www.alexanderbaldwin.com. Chris will open today's presentation with a strategic update. He will then turn the presentation over to Lance for an update on our real estate operations, and then Brett will discuss financial matters. Chris will return for some closing remarks, and then we will open it up for your questions. With that, let me turn it over to Chris.

Thanks, Steve, and good afternoon to our listeners. I'm excited to report on a strong quarter of operating performance and simplification progress. But before I do that, I'd like to acknowledge two recent promotions that were announced on Monday. First, Lance Parker has been promoted to Chief Operating Officer of the company. Lance has played a huge role in transforming A&B into a focused Hawaii commercial real estate company. Under his leadership, A&B's commercial real estate portfolio has expanded and thrived and is now our core business. Our non-core businesses, such as Grace, will continue to report to me until we monetize them so that Lance and his team can focus on commercial real estate operations and expansion. Also, Scott Merida has been named Vice President and Corporate Counsel, replacing Chief Legal Officer Nelson Chun, who previously announced his plan to retire in early 2022. I'm pleased to be promoting from within for this position and by doing so, ensuring that we'll be preserving the tremendous collaboration we have between our legal and commercial real estate teams. I'm excited about Lance's and Scott's new roles and what they signal about our progress in advancing our agenda as a focused commercial real estate company. Now on to our third quarter results. Our commercial real estate portfolio produced excellent results once again this quarter, delivering core FFO of 25 cents per diluted share, up 56% from the same quarter last year. This performance reflects not only the strong fundamentals of Hawaii's economy, but also the strength of our portfolio and the leasing environment. The foundation of that strong leasing environment is Hawaii's dramatically improved economy. We spoke last quarter of the significant recovery during the first half of 2021. And now that we've dodged the worst of the Delta variant, our outlook remains very positive. The state's unemployment levels continue to improve, sinking to an 18-month low of 6.6% in September. Passenger arrivals for peak summer travel in July were at 89% of 2019 levels. And while we did have a small pullback due to the Delta variant, expectations are for a strong holiday season. Further, just this week, the governor announced loosened gathering restrictions in Hawaii and alignment with federal international travel requirements, which should help welcome more meaningful levels of international travelers beginning November 8th. It's important to note that the state's strong tourism levels so far in 2021 are with essentially no international travelers, thus a great sign for further growth to come. Although we're not heavily dependent on tourist activity to drive traffic at our community-based retail properties, the resurgence in Hawaii's tourism is providing a broad benefit to economic activity, which is driving positive results across our portfolio. The market for residential real estate also remains strong, and we continue to see good sales results at Kukuiula in the third quarter. where we closed 11 units and a bulk parcel, generating $10 million in total cash proceeds from joint venture projects during the third quarter. Year to date at the project, we've closed sales of 37 units and two bulk parcels, making this the best annual sales result of the last decade. This is the third quarter in a row that the main partnership made distributions, bringing year-to-date cash proceeds from the various Kukuyula joint ventures to approximately $43 million. Turning to our simplification efforts, I'm pleased with our progress in advancing several potential land sales. We're always cautious about discussing transactions before they close, but we do expect to close additional non-core land transactions before year-end, possibly including some agricultural land, some urban zone land, and perhaps our interest in Kukuyula. The combination of non-core sales and improved cash flow from our commercial real estate portfolio has improved our debt metrics and strengthened our balance sheet such that we now have dry powder to focus again on commercial real estate growth. At quarter end, leverage was 5.5 times net debt to adjusted EBITDA compared to 6.6 times a year ago. and we expect to achieve even further de-levering as we move toward the conclusion of our monetization efforts. Lance will describe how we're taking advantage of our stronger balance sheet and positioning ourselves for growth, both with reinvestment into our existing assets and through acquisition efforts. Turning to materials and construction, in the third quarter, the MNC segment generated positive adjusted EBITDA of $2.2 million, reflecting another quarter of sequential improvement in performance. We're encouraged by the underlying factors that should support a continuation of this positive trend. Most notably, we're finally seeing more of the backlog that we built in 2020 and added to in 2021 be converted to contracted work. As a result, work is added, I'm sorry, as a reminder, work is added to backlog when we're confirmed as the winning bidder. But it must be converted to a contract before we can do the work and generate the revenue. The significant uptick in contracted work in the third quarter, as shown in the chart on this slide, positions us to be more productive and drive greater earnings in the quarters ahead. Already in the fourth quarter, we've started to see the benefits of these additional jobs with an uptick in paving volumes. With that, I'm pleased to turn the call over to our new Chief Operating Officer, Lance Parker, who will review our recent commercial real estate highlights. Lance?