A&B Reports 1st Quarter 2006 Net Income of $37.4 Million

COMMENTS ON QUARTER & OUTLOOK

"From both operating and financial perspectives, 2006 is off to agood start," said Allen Doane, president and chief executive officerof A&B. "Matson launched its Guam and China services, and we arepleased to report that performance to date is in line with ourexpectations. Our A&B Properties subsidiary continued to achievesignificant milestones, completing sales at one major development andmoving forward several other important developments.

"Matson's financial performance was negatively impacted by thepreviously disclosed termination of our alliance with APL. We expectthe gap between the loss of APL-related earnings and earningsgenerated by our new Guam and China services to moderate toward thesecond half of the year. In the Hawaii trade, increases in containeryields were offset by lower automobile volumes and yields and highercosts, especially fuel price increases that outpaced increases in ourfuel surcharge, as well as reduced contributions from a stevedoringjoint venture. Our logistics services business, Matson IntegratedLogistics, continued its significant growth in earnings, up 57 percentyear over year.

"The real estate segments continued their strong performance.Highlights of the quarter included a substantial contribution from theJanuary closing of all sales at our highly successful Hokua jointventure residential condominium development. In addition, the leasedproperties portfolio performed particularly well, reflecting extremelyhigh occupancy rates. Based on the first quarter's accomplishments, webelieve real estate is well positioned for another excellent year.

"Food products segment operating profit in first quarter 2006 waslower than the comparable quarter a year ago due to the receipt of aone-time payment from the federal government in the year ago period.Recent inclement weather delayed the start of the sugar harvest, butcontributed to higher profits from power sales. Overall, A&B's Hawaiioperations stood up well given the first quarter's unprecedentedrainfall.

"Hawaii's economy continues to perform at a high level. While homesales are slowing and the double digit price increases experiencedover the past few years are showing signs of moderating in the firstquarter 2006, the absolute level of home prices remains high -- up 14percent year over year on Maui, 18 percent on Oahu, and 27 percent onKauai.

"In summary, we are pleased with the first quarter results, andexpect that real estate profitability for the year should meet orexceed our growth targets. Consistent with earlier guidance, we expectlower full-year consolidated earnings due to the termination of theAPL Alliance and the launch of the new Guam and China services.However, we continue to benefit from strategies the Company hasundertaken in the past several years that are materially reducing, ona consolidated basis, the 2006 impact of Guam and China. Our outlookfor 2007, while still formative, is positive."
TRANSPORTATION--OCEAN TRANSPORTATION

Quarter Ended March 31
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Dollars in Millions 2006 2005 Change
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Revenue $ 219.3 $ 206.2 6%
Operating Profit $ 18.3 $ 29.7 - 38%
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Volume (Units)
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Hawaii Containers 41,800 41,400 1%
Hawaii Automobiles 31,800 35,600 - 11%
Guam Containers 3,800 4,000 - 5%
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For the first quarter of 2006, Ocean Transportation revenue of$219.3 million was $13.1 million, or 6 percent, higher than the firstquarter of 2005. This increase was due to China service revenue,improved yields, and increases in the bunker fuel surchargenecessitated by higher fuel costs, offset by lower volumes of Hawaiiautomobiles. Total Hawaii container volume was slightly higher thanthe first quarter of 2005, while total Hawaii automobile volume was 11percent lower.

Operating profit of $18.3 million was $11.4 million, or 38percent, lower than the first quarter of 2005. This decrease wasprimarily the result of the termination of the APL Alliance, lowerprofitability in the Hawaii trade, and lower equity in the earnings ofSSA Terminals, LLC, (SSAT) of which Matson is a minority owner, dueprimarily to a $3.2 million favorable adjustment in the 2005 quarterfor 2004 performance. The decrease in profit was partially offset by a$3.3 million gain on the sale of two surplus and obsolete vesselsduring the quarter.

The Guam and China services succeed the former 10-year APLAlliance in which Matson and APL shared vessel deployments. Followingsix weeks of operation during the first quarter, results for the Guamand China services have met expectations, with higher than anticipatedvolumes more than offsetting lower than planned yields. Revenue forthe Guam and China services, however, was insufficient to offsetdecreases in revenue from the termination of the charter hirearrangement with APL and start up costs for the new services.

Increased container yields in the Hawaii trade were more thanoffset by reductions in vehicle volume and yields and increases invessel and other operating costs. Competitive pressures from the entryof a dedicated car carrying vessel at the end of the first quarter2005 contributed to the reduction in auto volumes during the 2006first quarter. The financial impact of this reduction, however, wassomewhat muted because it reduced the number of cars carried incontainers, a more expensive mode of shipment than the Company'sprimary roll-on/roll-off mode. Fuel surcharge revenue in the firstquarter did not fully offset a 64 percent increase in fuel prices. Theaverage price per barrel of fuel consumed in first quarter 2006 was$51.70, versus $31.52 in the first quarter of 2005.

As noted, the decline in SSAT financial results is primarilyattributable to a year-end 2004 closing adjustment at SSAT thatpositively impacted Matson's first quarter 2005 results. The outlookfor this investment remains favorable, based on expected increases inWest Coast port volumes at the terminals which SSAT operates.
TRANSPORTATION--LOGISTICS SERVICES

Quarter Ended March 31
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Dollars in Millions 2006 2005 Change
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Revenue $108.4 $ 96.1 13%
Operating Profit $ 4.7 $ 3.0 57%
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Logistics Services revenue of $108.4 million was $12.3 million, or13 percent, higher than the first quarter of 2005. Operating profit of$4.7 million was 57 percent higher than the comparable period lastyear. Revenue and operating profit improvements were the result ofimproved yields in all business lines and increased customer volumesin the domestic, highway and expedited business lines, partiallyoffset by lower international volumes.

The operating profit margin for the logistics services businesswas 4.3 percent in the first quarter of 2006, compared with 3.1percent for the first quarter of 2005, due in part to the strategicshift toward the higher-margin highway brokerage business line.
REAL ESTATE--LEASING

Quarter Ended March 31
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Dollars in Millions 2006 2005 Change
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Revenue $ 24.6 $ 21.9 12%
Operating Profit $ 12.1 $ 10.7 13%
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Occupancy Rates
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Mainland 97% 96% 1%
Hawaii 98% 90% 8%
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Leasable Space (Million sq. ft.)
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Mainland 3.7 3.4 9%
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Hawaii 1.6 1.7 - 6%
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Real estate leasing revenue for the first quarter of 2006 (beforeremoving amounts treated as discontinued operations) of $24.6 millionwas $2.7 million, or 12 percent, higher than the first quarter of2005. Operating profit of $12.1 million was $1.4 million, or 13percent, higher than the first quarter of 2005. The improved revenueand operating profit resulted from property acquired subsequent to thefirst quarter of 2005, as well as higher occupancy rates in bothHawaii and the Mainland. High occupancy rates of 98% and 97% for theHawaii and Mainland properties, respectively, are a reflection of boththe high quality of the Company's properties as well as the strongeconomic performance of the markets in which these properties arelocated.

In the first quarter of 2006, the Company acquired a two-buildingoffice complex, Ninigret Business Park, in Salt Lake City and, asdetailed below, sold one Hawaii office building and several neighborisland parcels, some of which were subject to ground leases.
REAL ESTATE--SALES

Quarter Ended March 31
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Dollars in Millions 2006 2005 Change
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Revenue $ 23.8 $ 45.9 - 48%
Operating Profit $ 27.1 $ 16.5 64%
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Although real estate sales revenue in the first quarter of 2006 of$23.8 million was $22.1 million, or 48 percent, lower than the firstquarter of 2005, operating profit from property sales of $27.1 millionwas $10.6 million, or 64 percent, higher than first quarter 2005.Operating profit for the quarter exceeds revenue due to income frominvestments in joint ventures, which is included in operating profit,but not in segment revenue.

In the first quarter of 2006, sales included an office building inWailuku, Maui, three commercial parcels totaling 4.6 acres on Maui, acommercial property on Oahu and a parcel on Kauai. In addition, in thefirst quarter of 2006, sales of all 247 residential condominium unitsand a commercial space at the Company's Hokua joint venture closed, asdid the sale of a parcel of land in Valencia, California owned by aseparate joint venture.

Property sales during the first quarter of 2005 included twoMainland income properties; 5-1/2 floors at Alakea Corporate Tower, aHonolulu office condominium; a development parcel at Wailea; acommercial development parcel in Waikiki; and multiple subdivision lotsales.

Discontinued operations in the first quarter of 2006 included theoffice building and the fee interests in the three parcels on Maui.The amounts reported as continuing and discontinued operations inprior quarters are restated each time a property is designated asdiscontinued.
FOOD PRODUCTS
Quarter Ended March 31
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Dollars in Millions 2006 2005 Change
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Revenue $ 15.5 $ 22.4 - 31%
Operating Profit $ 6.5 $ 9.0 - 28%
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Tons Sugar Produced 800 19,500 - 96%
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Food products revenue of $15.5 million decreased $6.9 million or31 percent compared with the first quarter 2005 due mainly to a $5.5million payment received last year as part of an agricultural disasterrelief program and a $4.9 million reduction in sugar sales, partiallyoffset by $1.3 million for higher power sales. These factors resultedin a $2.5 million decrease in operating profit as compared to thefirst quarter of 2005.

Sugar production was substantially lower than 2005 becauseoperations commenced one month later than the prior year, and adverseweather hindered field and factory operations.

CORPORATE EXPENSE, STOCK OPTION EXPENSE, TAX RATE

For the first quarter of 2006, corporate expenses of $5.2 millionapproximated the prior year quarter. First quarter 2006 earningsincluded $639,000 of expenses ($396,000 after tax) related to stockoptions as a result of adoption of FASB Statement No. 123 (revised),Share-Based Payment, on January 1, 2006. This equaled $0.01 per fullydiluted share after tax. The tax rate was 38 percent for both thefirst quarter of 2006 and 2005. That rate approximates the Company'sstatutory combined federal and state tax rate.

BALANCE SHEET, CASH FLOW COMMENTS

Working capital increased by $26 million since year-end 2005,primarily the combined result of higher cash balances and inventories,partially offset by lower accounts receivable. A portion of the cashbalances, along with the $112 million capital construction fundbalance, is expected to be used in connection with the purchase of acontainership later in the year. Additional cash will be invested inreal estate development projects. Of note, and as disclosed in a Form8-K filing last week, the Company has entered into a ten-yearterm-financing agreement with Prudential Investment Management, Inc.to borrow $125 million in three tranches drawn between December, 2006and June, 2007 at fixed rates of 5.53%, 5.55% and 5.56%, respectively.

Comparing the cash flows in the first quarters of 2006 and 2005,cash flows from operating activities declined by $5 million. Capitalexpenditures for the quarter increased $38 million over the sameperiod in 2005, primarily as a result of equipment purchases for thenew China service. The net increase in cash and cash equivalents was$25 million in the first quarter of 2006, versus $27 million in thefirst quarter of 2005.

Alexander & Baldwin, Inc., headquartered in Honolulu, is engagedin ocean transportation and intermodal services, through itssubsidiaries, Matson Navigation Company, Inc. and Matson IntegratedLogistics, Inc.; in real estate, through A&B Properties, Inc.; and infood products, through Hawaiian Commercial & Sugar Company and KauaiCoffee Company, Inc. Additional information about A&B may be found atits web site: www.alexanderbaldwin.com.

Statements in this press release that are not historical facts are"forward-looking statements," within the meaning of the PrivateSecurities Litigation Reform Act of 1995, that involve a number ofrisks and uncertainties that could cause actual results to differmaterially from those contemplated by the relevant forward-lookingstatement. These forward-looking statements are not guarantees offuture performance. This release should be read in conjunction withour Annual Report on Form 10-K and our other filings with the SECthrough the date of this release, which identify important factorsthat could affect the forward-looking statements in this release.
ALEXANDER & BALDWIN, INC.
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2006 and 2005 First-Quarter Results (Condensed)
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2006 2005
------------ ------------
Three Months Ended March 31:
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Revenue $362,200,000 $364,600,000
Income From Continuing Operations $ 27,900,000 $ 33,400,000
Discontinued Operations: Properties(1) $ 9,500,000 $ 4,300,000
Net Income $ 37,400,000 $ 37,700,000
Basic Share Earnings
Continuing Operations $ 0.64 $ 0.77
Net Income $ 0.85 $ 0.87
Diluted Share Earnings
Continuing Operations $ 0.63 $ 0.76
Net Income $ 0.84 $ 0.86
Average Shares Outstanding 43,900,000 43,400,000
Diluted Average Shares Outstanding 44,300,000 44,000,000


(1) "Discontinued Operations: Properties" consists of sales, or
intended sales, of certain lands and buildings that are material and
have separately identifiable earnings and cash flows.

Industry Segment Data, Net Income (Condensed)
(In Millions, Except Per Share Amounts, Unaudited)
Three Months Ended
-------------------------
March 31,
------------------------
2006 2005
----------- -----------
Revenue:
--------
Transportation
Ocean Transportation $ 219.3 $ 206.2
Logistics Services 108.4 96.1
Real Estate
Leasing 24.6 21.9
Sales 23.8 45.9
Less Amounts Reported In
Discontinued Operations (23.3) (26.4)
Food Products 15.5 22.4
Reconciling Items (6.1) (1.5)
----------- -----------
Total Revenue $ 362.2 $ 364.6
=========== ===========

Operating Profit, Net Income:
-----------------------------
Transportation
Ocean Transportation $ 18.3 $ 29.7
Logistics Services 4.7 3.0
Real Estate
Leasing 12.1 10.7
Sales 27.1 16.5
Less Amounts Reported In
Discontinued Operations (15.2) (7.0)
Food Products 6.5 9.0
----------- -----------
Total Operating Profit 53.5 61.9
Interest Expense (3.2) (2.8)
Corporate Expenses (5.2) (5.3)
----------- -----------
Income From Continuing Operations
Before Income Taxes 45.1 53.8
Income Taxes (17.2) (20.4)
----------- -----------
Income From Continuing Operations 27.9 33.4
Discontinued Operations: Properties 9.5 4.3
----------- -----------
Net Income $ 37.4 $ 37.7
=========== ===========

Basic Earnings Per Share, Continuing
Operations $ 0.64 $ 0.77
Basic Earnings Per Share, Net Income $ 0.85 $ 0.87

Diluted Earnings Per Share, Net Income $ 0.84 $ 0.86

Average Shares 43.9 43.4
Diluted Shares 44.3 44.0

Consolidated Balance Sheets (Condensed)
-----------------------------------------
(In Millions)

March 31, December 31,
-------------- ------------
2006 2005
--------- ---------
(Unaudited)
ASSETS
Current Assets $ 330 $ 303
Investments 115 154
Real Estate Developments 83 71
Property, Net 1,321 1,289
Capital Construction Fund 112 93
Other Assets 166 161
--------- ---------
Total $ 2,127 $ 2,071
========= =========

LIABILITIES & EQUITY
Current Liabilities $ 255 $ 254
Long-Term Debt 294 296
Post-Retirement Benefit Obligs. 48 47
Other Long-Term Liabilities 61 45
Deferred Income Taxes 421 415
Shareholders' Equity 1,048 1,014
--------- ---------
Total $ 2,127 $ 2,071
========= =========

Consolidated Statements of Cash Flows (Condensed)
--------------------------------------------------
(In Millions)

Three Months Ended
---------------------
March 31,
---------------------
2006 2005
-------- --------
(Unaudited)

Operating Cash Flows $ 41 $ 46
Capital Expenditures (47) (9)
CCF Withdrawals/(Deposits), Net (18) 2
Proceeds From Issuance of
(Payment of) Debt, Net (2) (7)
Dividends Paid (10) (10)
Disposal of Assets/Other, Net 61 5
-------- --------
Increase/(Decrease) In Cash $ 25 $ 27
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Depreciation $ (21) $ (20)
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