A&B Net Income $23.2 Million In Second Quarter 1999; Ocean Transportation, Property Leasing Lead Earnings Improvement.

HONOLULU--(BUSINESS WIRE)--July 15, 1999--

Alexander & Baldwin, Inc. (Nasdaq:ALEX) today reported that its second quarter 1999 net income increased 23 percent to $23,249,000, or $0.54 per share. Net income in the second quarter of 1998 was $18,970,000, or $0.42 per share. Revenue in the second quarter of 1999 was $263,843,000, compared with revenue of $365,825,000 in the second quarter of 1998. (The significant decrease in revenue resulted primarily from the sale, in December 1998, of A&B's majority interest in California and Hawaiian Sugar Company, Inc. (C&H).)

Net income for the first half of 1999 was $39,087,000, or $0.90 per share, versus $26,943,000, or $0.60 per share in the first half of 1998. The 1998 net income included a charge of $5,801,000, or $0.13 per share, to reflect the cumulative effect of an accounting change. Revenue in the first half of 1999 was $461,285,000, compared with $657,232,000 in the first half of 1998. (The decrease in revenue in the first half also resulted primarily from the sale of A&B's majority interest in C&H.)

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

In the second quarter of 1999, A&B's consolidated operating profit was $44.4 million, 11-percent higher than the $40.1 million operating profit in the second quarter of 1998. For the first half, operating profit was $77.9 million, an increase of nine percent versus $71.7 million in the first half of 1998. In both the second quarter and first half of 1999, operating profit for ocean transportation and property leasing improved, but the operating results for property sales and the food products segment were lower.

Interest expense in both periods of 1999 was considerably lower than in the corresponding periods in 1998, primarily reflecting lower debt balances. Net proceeds from the C&H sale contributed the majority of a nearly $110 million reduction in debt from the second quarter of 1998 to the second quarter of 1999.

Corporate expenses in the second quarter of 1999 were lower than in the second quarter of 1998. Corporate expenses in the first half of 1999 were unchanged from the first half of 1998.

Higher Volume, Lower Costs Lift Ocean Transportation Results

In the second quarter of 1999, ocean transportation operating profit was $25.3 million. This was an increase of $8.5 million from $16.8 million in the second quarter of 1998. The improvement was due primarily to higher cargo volume and lower costs. Second quarter 1999 Hawaii service container volume was eight-percent higher than in the 1998 second quarter and automobile volume was 32-percent higher. Cargo was higher, in part, due to shipments in advance of the expiration of the West Coast longshore contract on July 1, and competitive gains in the carriage of automobiles and household goods.

In the first half of 1999, ocean transportation operating profit was $43.6 million. This was an increase of $9.4 million, or 28 percent, from $34.2 million in the first half of 1998. The competitive gains in cargo volume and lower operating costs also were the primary reasons for this improvement. Matson's first half 1999 Hawaii service container volume was two-percent higher than in the 1998 first half and automobile volume was 12-percent higher.

Portfolio Changes Boost Income-Property Results

In the second quarter of 1999, property leasing operating profit was $6.4 million. This was $0.8 million, or 14-percent, higher than $5.6 million in the second quarter of 1998. The increase was due primarily to changes in the property portfolio occurring in the latter part of 1998.

In the first half of 1999, property leasing operating profit was $14.0 million. This was 22-percent higher than the $11.5 million earned in the first half of 1998. Year-to-date 1999 occupancy levels for Mainland properties averaged 93 percent, the same as in the first half of 1998, while average occupancy levels for Hawaii properties improved to 73 percent, versus 66 percent in the comparable period of 1998. The first half of 1999 also benefited from the one-time buyout of a long-term ground lease.

Second Quarter Property Sales Led By Seattle Transaction

Property sales totaled $27.2 million in the second quarter of 1999, compared with $60.8 million in the second quarter of 1998. In the second quarter of 1999, operating profit from property sales was a strong $9.9 million, but it still was $4.0 million less than the unusually high $14.0 million recorded in the second quarter of 1998. Results in the second quarter of 1999 included the sale of 4225 Roosevelt, a 109,000 square foot office and research facility in Seattle, Wash.

Property sales totaled $35.1 million in the first half of 1999, compared with $68.6 million in the first half of 1998. In the first half of 1999, operating profit from property sales was $15.5 million. This was $3.1 million lower than $18.6 million in the first half of 1998.

Unit Sale is Primary Reason For Food Products Decline

In the second quarter of 1999, food products operating profit was $2.0 million. This compares with $3.0 million in the second quarter of 1998. In the first half of 1999, food products operating profit was $3.5 million, compared with $6.0 million in the first half of 1998. In both periods, the reduction primarily resulted from the sale of A&B's majority interest in C&H.

Second Quarter "A Distinct Improvement"

"The second quarter performance was a distinct improvement over the prior year's quarter, largely as a result of Matson recovering from a poor 1998," said W. Allen Doane, president and chief executive officer of A&B. "However, with the expiration of the West Coast longshore labor contract on July 1, reductions in productivity have occurred which are affecting operations negatively as negotiations continue. The lack of growth in the Hawaii economy makes the cost structure at Matson an ongoing top priority.

"The real estate business is achieving good results on the Mainland, and the Hawaii real estate performance is beginning to improve. Sugar production and related costs are also favorable at this point. As noted in the first quarter report, we remain committed to improved performance in 1999."

Alexander & Baldwin, Inc., headquartered in Honolulu, has two major subsidiaries: Matson Navigation Company, Inc. (ocean transportation) and A&B-Hawaii, Inc. (property development and management, and 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 25 of the Company's 1998 annual report to shareholders. These factors could cause actual results to differ materially from those projected in the statements. -0-

                    Alexander & Baldwin, Inc.
       1999 and 1998 Second-Quarter and First-Half Results

Three Months Ended June 30:              1999              1998

Revenue                              $263,843,000      $365,825,000
Net Income                            $23,249,000       $18,970,000
Basic & Diluted Share Earnings              $0.54             $0.42
Average Shares Outstanding             43,318,000        44,869,000

Six Months Ended June 30:

Revenue                              $461,285,000      $657,232,000
Income Before Accounting Change       $39,087,000       $32,744,000
Net Income                            $39,087,000       $26,943,000
Basic & Diluted Share Earnings:
  Income Before Accounting Change           $0.90             $0.73
  Net Income                                $0.90             $0.60
Average Shares Outstanding             43,438,000        44,855,000


                 Industry Segment Data, Net Income
                          (In Thousands)

                            Three Months Ended      Six Months Ended
                                 June 30               June 30
                              1999       1998       1999       1998

Revenue:
  Ocean Transportation      $187,836   $182,124   $357,031   $360,924
  Property Devel. & Mgmt.:
    Leasing                   10,833      9,198     22,420     18,433
    Sales                     27,179     60,792     35,111     68,573
  Food Products               37,269    112,994     45,271    207,868
  Other                          726        717      1,452      1,434
    Total Revenue           $263,843   $365,825   $461,285   $657,232

Operating Profit, Net Income:
  Ocean Transportation       $25,318    $16,787    $43,583    $34,157
  Property Devel. & Mgmt.:
    Leasing                    6,394      5,589     14,016     11,488
    Sales                      9,949     13,994     15,489     18,636
  Food Products                2,019      3,047      3,490      6,045
  Other                          690        685      1,340      1,363
    Total Operating Profit    44,370     40,102     77,918     71,689
  Interest Expense            (4,369)    (6,293)    (8,896)   (12,373)
  Corporate Expenses          (3,100)    (3,459)    (6,980)    (6,928)
  Income Before Taxes
    & Accounting Change       36,901     30,350     62,042     52,388
  Income Taxes               (13,652)   (11,380)   (22,955)   (19,644)
  Cumulative Effect of
    Acctg. Change                 --         --         --     (5,801)
  Net Income                 $23,249    $18,970    $39,087    $26,943