A&B 2nd Quarter 2000 Earnings Per Share Up 28%; Property Transactions, Ocean Transportation Led Improvement

July 20, 2000

HONOLULU--(BUSINESS WIRE)--July 20, 2000--Alexander & Baldwin, Inc. (Nasdaq:ALEX) today reported that its second quarter 2000 net income increased 21 percent, to $28,243,000, and that its second quarter earnings per share increased 28 percent, to $0.69 per share, on fewer shares outstanding. Net income in the second quarter of 1999 was $23,249,000, or $0.54 per share. Revenue in the second quarter of 2000 was $276,368,000, compared with revenue of $263,843,000 in the second quarter of 1999.

After an accounting change, net income for the first half of 2000 was $54,674,000, or $1.32 per share, versus $39,087,000, or $0.90 per share in the first half of 1999. The accounting change resulted in a one-time, non-cash increase to first quarter 2000 earnings of $12,250,000. Revenue in the first half of 2000 was $496,259,000, compared with $461,285,000 in the first half of 1999.

Second Quarter Results Very Good

"Results for the second quarter were very good," said W. Allen Doane, president and chief executive officer of A&B. "Matson had a solid gain over its prior year performance despite a significant increase in fuel prices. Our real estate business benefited from a large property sale in the quarter, as well as double-digit growth in property leasing income. As we had expected, the negatives in the quarter were low sugar prices and a continuing drought in the state of Hawaii, which hurt food products results.

"Hawaii's economy continues to show improvement and the outlook for next year indicates moderate growth in the State, after years of little, or no growth. The strength of the U.S. economy appears to be the principal contributor to Hawaii's re-emerging economic growth."

Consolidated Operating Profit Higher In 2nd Quarter, 1st Half

In the second quarter of 2000, A&B's consolidated operating profit was $53.1 million. That was $8.8 million, or 20-percent, higher than the $44.4 million operating profit in the second quarter of 1999. For the first half, operating profit was $83.7 million, an increase of $5.8 million, or seven percent, versus $77.9 million in the first half of 1999. In both the second quarter and first half of 2000, operating profit improved in ocean transportation and in property development and management, but operating results for the food products segment were lower.

Interest expense in both periods of 2000 was higher than in the corresponding periods in 1999, reflecting both higher rates and increased debt balances. Corporate expenses were lower in both periods.

Matson Operating Profit Up 10 Percent

In the second quarter of 2000, ocean transportation operating profit was $27.9 million. That was an increase of $2.6 million, or 10 percent, from $25.3 million in the second quarter of 1999. The improvement was made in spite of a virtual doubling of bunker fuel prices from the year-earlier quarter, and it was due primarily to higher Hawaii auto volume, an improved mix of cargo and better results for non-Hawaii operations. Second quarter 2000 Hawaii service container volume was about the same as in the 1999 second quarter, but automobile volume was 34-percent higher.

In the first half of 2000, ocean transportation operating profit was $47.8 million. This was an increase of $4.2 million, also 10 percent, from $43.6 million in the first half of 1999. Matson's first half 2000 Hawaii service container volume was two-percent higher than in the 1999 first half, but automobile volume was 49-percent higher.

Sale of Maui Property Highlights Quarter

A&B Properties, Inc. (Properties) carries out the property management and development activities of A&B. In the second quarter of 2000, Properties operating profit was $26.5 million, an increase of $10.2 million, or 62 percent, from $16.3 million a year earlier. For the first half of 2000, operating profit of $34.4 million was up $4.9 million, or 17 percent, from $29.5 million a year earlier.

In the second quarter, operating profit from property leasing was $7.6 million. This was $1.2 million, or 19-percent, higher than $6.4 million in the second quarter of 1999. The increase was due primarily to additions to the property portfolio in the latter part of 1999 and higher occupancies.

In the first half of 2000, property leasing operating profit was $14.8 million. This was six-percent higher than the $14.0 million earned in the first half of 1999. The first half of 1999 had benefited from the one-time buyout of a long-term ground lease. Year-to-date 2000 occupancy levels for Mainland properties averaged 96 percent, versus 93 percent in the first half of 1999. Average occupancy levels for Hawaii properties improved to 85 percent, versus 73 percent in the comparable period of 1999.

Property sales revenue totaled $25.0 million in the second quarter of 2000, compared with $27.2 million in the second quarter of 1999. In the second quarter of 2000, operating profit resulting from property sales was $18.9 million, nearly twice the second quarter 1999 operating profit of $9.9 million. Results in the second quarter of 2000 included the planned sale of a ground lease under a Costco store in Kahului, Maui.

Property sales revenue totaled $28.0 million in the first half of 2000, compared with $35.1 million in the first half of 1999. In the first half of 2000, operating profit resulting from property sales was $19.6 million. This was $4.1 million, or 27 percent, higher than the $15.5 million in the first half of 1999.

Low Sugar Prices, Drought Impact Food Products' Results

In the second quarter of 2000, the food products segment had an operating loss of $2.1 million, compared with $2.0 million of operating profit in the second quarter of 1999. In the first half of 2000, food products broke even on an operating basis, compared with operating profit of $3.5 million in the first half of 1999. The primary reasons for the unfavorable comparison were low U.S. raw sugar prices and continuing drought conditions that have lowered sugar production.

Alexander & Baldwin, Inc., headquartered in Honolulu, is engaged in ocean transportation, through its subsidiary, Matson Navigation Company, Inc, in property development and management, through A&B Properties, Inc., and in food products. Additional information about A&B may be found at its web site: www.alexanderbaldwin.com. Statements in this press release that are not historical facts are "forward-looking" statements that involve a number of risks and uncertainties described on page 29 of the Company's 1999 annual report to shareholders. These factors could cause actual results to differ materially from those projected in the statements. -0-

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                       ALEXANDER & BALDWIN, INC.
          2000 and 1999 Second-Quarter And First-Half Results

                                         2000              1999

Three Months Ended June 30:
Revenue                              $276,368,000      $263,843,000
Net Income                           $ 28,243,000      $ 23,249,000
Basic & Diluted Share Earnings       $       0.69      $       0.54
Average Shares Outstanding             40,722,000        43,318,000

Six Months Ended June 30:
Revenue                              $496,259,000      $461,285,000
Income Before Accounting Change      $ 42,424,000      $ 39,087,000
Net Income                           $ 54,674,000      $ 39,087,000
Basic & Diluted Share Earnings:
  Income Before Accounting Change    $       1.03      $       0.90
  Net Income                         $       1.32      $       0.90
Average Shares Outstanding             41,427,000        43,438,000

                   Industry Segment Data, Net Income
                            (In Thousands)

                               Three Months Ended    Six Months Ended
                                    June 30,             June 30,
                                 2000      1999       2000      1999

Revenue:
  Ocean Transportation        $204,670  $187,836   $395,183  $357,031
  Property Devel. & Mgmt.
    Leasing                     12,409    10,833     24,305    22,420
    Sales                       24,987    27,179     28,039    35,111
  Food Products                 33,504    37,269     47,170    45,271
  Other                            798       726      1,562     1,452
    Total Revenue             $276,368  $263,843   $496,259  $461,285

Operating Profit, Net Income:
  Ocean Transportation        $ 27,914  $ 25,318   $ 47,807  $ 43,583
  Property Devel. & Mgmt.
    Leasing                      7,606     6,394     14,790    14,016
    Sales                       18,917     9,949     19,618    15,489
  Food Products                 (2,060)    2,019          8     3,490
  Other                            764       690      1,473     1,340
    Total Operating Profit      53,141    44,370     83,696    77,918
  Interest Expense              (5,959)   (4,369)   (11,306)   (8,896)
  Corporate Expenses            (2,706)   (3,100)    (6,208)   (6,980)
  Income Before Taxes
    & Accounting Change         44,476    36,901      6,182    62,042
  Income Taxes                 (16,233)  (13,652)   (23,758)  (22,955)
  Income Before Acctg. Change   28,243    23,249     42,424    39,087
  Cumulative Effect of
    Acctg. Change                   --        --     12,250        --
  Net Income                  $ 28,243  $ 23,249   $ 54,674   $39,087

                      ALEXANDER & BALDWIN, INC.
                    Consolidated Balance Sheets
                          (In Thousands)

                                            June 30,     December 31,
                                             2000            1999
                                          (unaudited)
ASSETS
Current Assets                          $   185,841     $   202,450
Investments                                 143,703         158,726
Real Estate Developments                     62,585          60,810
Property, Net                               940,269         928,627
Capital Construction Fund                   142,380         145,391
Other Assets                                 98,595          65,456
  Total                                 $ 1,573,373     $ 1,561,460

LIABILITIES & EQUITY
Current Liabilities                     $   141,413     $   142,645
Long-Term Debt                              329,249         277,570
Post-Retirement Benefit Obligs.              47,182          60,767
Other Long-Term Liabilities                  45,466          51,161
Deferred Income Taxes                       364,028         358,354
Shareholders' Equity                        646,035         670,963
  Total                                 $ 1,573,373     $ 1,561,460

               Consolidated Statements of Cash Flows
                    (In Thousands, Unaudited)

                                               Six Months Ended
                                                   June 30,
                                              2000            1999

Operating Cash Flows                       $ 50,265        $ 49,235
Capital Expenditures                        (51,764)        (27,854)
CCF Withdrawals, Net                          1,807           1,466
Proceeds From/
 (Payment of) Debt, Net                      56,500         (67,430)
Repurchases of Capital Stock                (43,294)        (15,792)
Dividends Paid                              (18,625)        (19,539)
All Other, Net                                  808           2,102
Decrease in Cash                           $ (4,303)       $(77,812)
Depreciation                               $ 34,478        $ 38,973
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    CONTACT: Alexander & Baldwin, Inc.
             John B. Kelley, 808/525-8422