A&B Reports 1994 Net Income Up 11 Percent.

HONOLULU--(BUSINESS WIRE)--Jan. 27, 1995--Alexander & Baldwin, Inc. (NASDAQ:ALEX) Friday reported net income for 1994 of $74,608,000, or $1.62 per share.

Net income for 1993 was $66,989,000, or $1.45 per share. Revenue for 1994 was $1,208,165,000, compared with $979,466,000 a year earlier.

Net income for the fourth quarter of 1994 was $22,951,000, or $0.50 per share, versus $23,721,000, or $0.52 per share, in 1993. Revenue for the fourth quarter of 1994 was $361,520,000, compared with $297,637,000 a year earlier. Comparisons of the full-year results should take into account the differences in tax expenses. The 1993 income tax expense included a one-time charge of $7,741,000, or $0.17 per share, to account for an increase in the federal corporate tax rate on previous years' deferred tax liabilities.

Consolidated Operating Profit

In 1994, consolidated operating profit of $158.3 million was two-percent lower than in 1993. Improved results for ocean transportation, container leasing and property leasing were offset by lower results for food products. Operating profit from property sales was nearly the same in both years.

For the fourth quarter of 1994, consolidated operating profit of $44.7 million was seven-percent less than in the comparable period of 1993. Higher results for container leasing, property sales, ocean transportation and property leasing were more than offset by lower results for food products.

Volume Benefits Matson's Results

Ocean transportation operating profit for all of 1994 rose seven percent, primarily the result of increased cargo, higher rates and new customers served by Matson's stevedoring and intermodal subsidiaries. Higher fuel cost and costs associated with the start-up of Matson's new Pacific Coast Shuttle Service partially offset these improvements. For the year, total Hawaii container volume was up three percent and total Hawaii automobile carriage was seven-percent higher.

For the fourth quarter, ocean transportation operating profit rose two percent, primarily due to higher eastbound Hawaii cargo volume, favorable pension expense adjustments and the benefits of the new customers served by Matson's stevedoring and intermodal subsidiaries. These factors were partially offset by higher fuel costs, the costs of an early retirement program, vessel repairs and costs associated with operations of the Pacific Coast Shuttle. Fourth-quarter 1994 total Hawaii container volume rose two percent and total Hawaii automobile volume rose 25 percent.

Matson's new Pacific Coast Shuttle continued to attract new customers and growing cargo volume. The service, inaugurated at mid-year, was operating near a break-even level at year end. The shuttle builds on Matson's high standards of ocean transportation service and it introduces a convenient, efficient new service for shippers on the West Coast.

Utilization Levels Still Higher In Container Leasing

Container leasing operating profit rose a strong 28 percent in the fourth quarter. For the year, container leasing operating profit was 27-percent higher. Both of these increases were the combined results of a larger container fleet and significant year-to-year improvement in utilization levels. Fleet size increased from 145,000 twenty-foot equivalent units (TEUs) at the end of December 1993 to 160,000 TEUs at the end of 1994. An average utilization rate of more than 89 percent in the fourth quarter of 1994 compared favorably with 85 percent in the year-earlier period. Full-year 1994 average utilization was 88 percent, versus 83 percent in 1993. Although fleet-wide average lease rates remained lower in 1994 than in 1993, growing world trade continues to improve industry fundamentals.

Leased-Property Occupancies High

For all of 1994, property leasing operating profit rose one percent. Fourth-quarter 1994 property leasing operating profit, however, was eight percent higher than that in the comparable period in 1993. Overall, the leased-property portfolio continues to benefit from high occupancy levels and favorable lease rates. For the year, the occupancy rate for the Company's U.S. mainland properties averaged 97 percent and, for Hawaii properties, it averaged 92 percent. Hawaii occupancy rates were affected by relocation of tenants from an older shopping center in Kahului, Maui that is being prepared for redevelopment.

Property Sales Surge in Fourth Quarter

Property sales revenue of $60.8 million in 1994 was nearly double the $32.6 million recorded in 1993. Due to the mix of properties sold, however, operating profit from sales in both years was virtually the same. Sales in 1994 included: a Mainland shopping center; six developed industrial lots, including one acquired as part of the C&H acquisition; four undeveloped parcels and 40 residential lots. In 1993, sales included: one developed industrial lot, four undeveloped parcels and 101 residential lots.

In December 1994, A&B announced the sale of Arapahoe Marketplace, a 192,000 square-foot shopping center in the Denver area. Arapahoe Marketplace had been acquired in 1989 while it was under construction, and the center had become a successful income-producing property. Proceeds from the $21 million sale are planned to be re-invested on a tax-deferred basis in other income-producing real estate.

Total fourth-quarter 1994 property sales revenue was $45.9 million, versus $11.1 million in the 1993 fourth quarter. Operating profit from property sales was $9.1 million, eight-percent higher than in the fourth quarter of 1993. Sales in the fourth quarter of 1994 included: the Arapahoe Marketplace; two parcels of former C&H property, one an industrial site on Oahu and the other undeveloped acreage near Crockett, CA; plus eight residential lots. In the fourth quarter of 1993, two large undeveloped parcels and 13 residential lots were sold.

In the fourth quarter, construction bids were received for Phase I of Kahului Industrial Park, a new 76-acre, centrally-located light industrial development in Kahului, Maui. Construction is expected to start by the second quarter, following contractor selection and issuance of required permits. Nearby, a groundbreaking ceremony early this month marked the start of construction of the 134,000 square-foot Costco Wholesale Warehouse on land leased from A&B.

Food Products Profitable in Fourth Quarter

Low selling prices for refined sugar and relatively high raw sugar costs caused the food products segment to record an operating loss for 1994 of $418,000, versus an operating profit of $12.7 million in 1993. (1993 operating results include California and Hawaiian Sugar Company only for the period subsequent to its acquisition by A&B in June 1993.)

Results in the fourth quarter benefited from seasonal sales of sweetener products, somewhat higher refined product prices and lower raw sugar costs. The volume of refined sugar sold rose five percent over the fourth quarter of 1993. The segment, however, had an operating profit of just $1.0 million in the fourth quarter of 1994, versus $7.6 million in the 1993 fourth quarter.

Early in the Fall, the U.S. Department of Agriculture adjusted the quota for imports of foreign raw cane sugar into the U.S. and also imposed domestic marketing allotments. These actions were intended to provide a more stable supply of both refined sugar products and raw sugar available for processors.

As the effects of these actions began to be reflected in the marketplace, refiner margins improved modestly. Unfortunately, raw cane sugar prices again have risen in early 1995 and expanded beet sugar production continues to put pressure on refiner margins. The inequities caused by the current sugar legislation are an issue that will be of central concern during debate on renewal of domestic agricultural programs in this session of Congress.

Cautious Outlook Continues

"Earnings in 1994 were not as strong as we had hoped," said John C. Couch, president and chief executive officer of A&B. "The progress made by the ocean transportation, container leasing and property development and management segments was reassuring, but the food products segment was unable to overcome the market adversity it continues to face.

"We are encouraged by the gradually improving outlook for the economy of Hawaii. There still is uncertainty over the lack of strength in the local construction industry, but the visitor industry has improved steadily and we anticipate that its growth ultimately will benefit the entire economy. International trade and container leasing demand also continue to grow at a healthy pace. We look forward to having the opportunity to benefit from these favorable trends."

Alexander & Baldwin, Inc. is a diversified corporation, headquartered in Honolulu, with two major subsidiaries: Matson Navigation Company, Inc. (ocean transportation and marine container leasing) and A&B-Hawaii, Inc. (property development and management, and food products).

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                    Alexander & Baldwin, Inc.
     1994 and 1993 Fourth Quarter and Twelve Months Results

Three Months Ended December 31:               1994          1993

Revenue                                  $361,520,000    $297,637,000
Net Income                                $22,951,000     $23,721,000
Share Earnings                                  $0.50           $0.52
Average Shares                             45,842,000      46,343,000

Twelve Months Ended December 31:

Revenue                                $1,208,165,000    $979,466,000
Net Income                                $74,608,000     $66,989,000
Share Earnings                                  $1.62           $1.45
Average Shares                             46,059,000      46,338,000

                  Industry Segment Data, Net Income
                            (In Thousands)

                           Three Months Ended     Twelve Months Ended
                               December 31              December 31
                            1994        1993         1994        1993
Revenue:
Ocean Transportation  $154,318    $142,627    $  604,754    $551,687
Container Leasing       17,623      14,862        64,132      55,662
Property Devel./Mgmt.
     Leasing             8,322       7,989        33,387      32,606
     Sales              45,940      11,072        60,767      32,559
Food Products          133,569     120,315       441,209     304,007
Other                    1,748         772         3,916       2,945
        Total Revenue $361,520    $297,637    $1,208,165    $979,466
Operating Profit: (1)
Ocean Transportation   $23,322     $22,795       $97,319     $91,194
Container Leasing (2)    4,719       3,686        16,604      13,047
Property Devel./Mgmt.
     Leasing             5,382       4,974        23,163      22,975
     Sales               9,115       8,458        18,522      18,570
Food Products            1,036       7,606          (418)     12,692
Other                    1,146         583         3,143       2,357
  Total Oper. Profit   $44,720     $48,102      $158,333    $160,835
Net Income:
Operating Profit       $44,720     $48,102      $158,333    $160,835
Interest Expense        (7,300)     (9,203)      (27,702)    (28,802)
Corporate Expense       (3,941)     (5,220)      (17,396)    (18,864)
Pretax Income           33,479      33,679       113,235     113,169
Income Taxes           (10,528)     (9,958)      (38,627)    (46,180)
        Net Income     $22,951     $23,721       $74,608     $66,989

(1)  Before interest expense (except for Container Leasing), corporate
expense and income taxes

(2)  After interest expense

    Twelve-month figures for 1994 include the results of California
and Hawaiian Sugar Company (C&H), which was acquired in June 1993.
1993 figures include the results of C&H subsequent to its
acquisition.

CONTACT: Alexander & Baldwin

John B. Kelley, 808/525-8422