Alexander & Baldwin, Inc.

Good day and welcome to the Alexander and Baldwin second quarter 2022 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. Please note that this event is being recorded. I would now like to turn the conference over to Steve Sweat and Investor Relations. Please go ahead, sir.

Thank you. Aloha and welcome to our call to discuss Alexander and Baldwin's second quarter 2022 earnings. With me today for our earnings call are A&B's President and Chief Executive Officer, Chris Benjamin, our Chief Operating Officer, Lance Parker, and our Chief Financial Officer, Brett Brown. Clayton Shun, Chief Accounting Officer, is also present and will be available for 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 COVID-19 pandemic and related economic disruptions. Such forward-looking statements speak only as to the date of 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, risks associated with COVID-19 and its impacts on the company's businesses, results of operations, liquidity, and financial condition, and the evaluation of alternatives by the company related to its materials and construction business, as well as other factors 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 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.alexanderbalvin.com. Chris will open up 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 up the call for your questions. With that, let me turn it over to Chris.

Thanks, Steve, and good afternoon to our listeners. The second quarter was another outstanding quarter for Alexander and Baldwin. Our portfolio of high-quality retail, industrial, and ground lease properties produced excellent results, and we ended the quarter with lease occupancy of 94.6%, approaching pre-pandemic levels. Beyond the continued stellar CRE performance, we meaningfully advanced our strategic agenda during the quarter, as we closed on the sale of approximately 18,900 acres of non-core land holdings on Kauai. I'm pleased that we're now on the verge of successfully completing our strategic transformation to a pure commercial real estate company. I'll provide a high-level summary of our results, and then Lance and Brett will provide more details on our portfolio performance, the non-core land sale transaction, and our financials. Commercial real estate revenue in the second quarter increased 5.8% over the prior year quarter. Portfolio NOI was up 4.5%, and same-store NOI grew by 4.4%. Core FFO was up 9.7%, and core FFO per share was up 12%. As I mentioned, we ended the quarter at 94.6% leased occupancy, just 30 basis points below our occupancy at the end of the first quarter of 2020. Our industrial portfolio had leased occupancy of 98.4%, up 60 basis points from one year ago, and our retail portfolio occupancy was 93.1%, up 80 basis points from last year. During the second quarter, we signed 76 leases for about 174,000 square feet of gross leasable area and captured blended rent spreads of 6.2% for comparable leases. We continue to benefit from strong underlying economic growth across the state. Domestic visitor arrivals for each of the first six months of 2022 have exceeded pre-pandemic levels. and we're up over 11% year-to-date compared to 2019. Additionally, international visitor arrivals are increasing, which should provide incremental economic benefits. While our portfolio is community-based and not heavily dependent on tourist activity, the resurgence in Hawaii tourism is providing a broad benefit to Hawaii's economy. With the state unemployment rate down to 4.3% for June 2022, an improvement of over 18 percentage points from the peak nearly two years ago. Inflationary pressures and economic uncertainty are potential concerns, but so far we've not seen significant impacts across our business. Our portfolio performance remains strong due to excellent leasing activity. Interest in Hawaii real estate remains robust also, allowing us to make significant progress on our non-core land sales. including the 18,900-acre transaction we closed during the second quarter. On the acquisition front, the market remains tight, but we continue to pursue opportunities. With a strong balance sheet and local market presence, we have historically been able to take advantage of market dislocations, so this environment may play to our strengths, but we are maintaining our investment disciplines. Financial results in our materials and construction segment were below our expectations for the quarter, primarily due to the timing of key projects, COVID impacts on our workforce, and inflationary cost pressure. Still, we made good progress in ramping up paving operations late in the quarter and securing new work. And this positions us well for the balance of the year. Given the improvements made over the past few years in operations, cost management, and bidding, our great progress with simplification and the fact that Grace Pacific is now the lone significant non-core asset we still own, our board has authorized a formal marketing process to sell Grace. This is a compelling business with a long history, strong market position, and many competitive advantages. We hope to find a strategic buyer for whom Grace is a more natural fit. We will provide updates as we progress, but cannot comment further on the process or our expectations at this time. With that, I'll now turn the call over to our Chief Operating Officer, Lance Parker, to review our recent CRE highlights and land sales activity. Lance?