Alexander & Baldwin, Inc.

822 Bishop Street
Post Office Box 3440, Honolulu, Hawaii 96801
808-525-6611
www.alexanderbaldwin.com

Sales

$1.2 billion

Business Description
Alexander & Baldwin, Inc. ("A&B") is a diversified corporation with
most of its operations centered in Hawaii. It was founded in 1870 and
incorporated in 1900. Ocean transportation operations, related shoreside
operations in Hawaii, and intermodal, truck brokerage and logistics services are
conducted by a wholly-owned subsidiary, Matson Navigation Company, Inc.
("Matson") and several Matson subsidiaries. Property development and food
products operations are conducted by A&B and certain other subsidiaries of A&B.

The business industries of A&B are as follows:

A. Transportation - carrying freight, primarily between various
ports on the U.S. Pacific Coast and major Hawaii ports and
Guam; chartering vessels to third parties; arranging
intermodal and motor carrier services and providing logistics
services in North America; and providing terminal, stevedoring
and container equipment maintenance services in Hawaii.

B. Property Development and Management - purchasing, developing,
selling, managing, leasing and investing in commercial
(including retail, office and industrial) and residential
properties, in Hawaii and on the U.S. mainland.

C. Food Products - growing sugar cane and coffee in Hawaii;
producing bulk raw sugar, specialty food-grade sugars,
molasses and green coffee; marketing and distributing roasted
coffee and green coffee; providing sugar and molasses hauling
in Hawaii; and generating and selling electricity.

DESCRIPTION OF BUSINESS AND PROPERTIES

A. Transportation

(1) Freight Services

Matson's Hawaii Service offers containership freight services between
the ports of Long Beach, Oakland, Seattle, and the major ports in Hawaii on the
islands of Oahu, Kauai, Maui and Hawaii. Roll-on/roll-off service is provided
between California and the major ports in Hawaii.

Matson is the principal carrier of ocean cargo between the U.S. Pacific
Coast and Hawaii. In 2003, Matson carried approximately 162,400 containers
(compared with 152,500 in 2002) and 145,200 automobiles (compared with 120,500
in 2002) between those destinations. Principal westbound cargoes carried by
Matson to Hawaii include dry containers of mixed commodities, refrigerated
commodities, building materials, automobiles and packaged foods. Principal
eastbound cargoes carried by Matson from Hawaii include automobiles, household
goods, refrigerated containers of fresh pineapple, canned pineapple and dry
containers of mixed commodities. The preponderance of Matson's Hawaii Service
revenue is derived from the westbound carriage of containerized freight and
automobiles.

Matson's Guam Service provides containership freight services between
the U.S. Pacific Coast and Guam and Micronesia. Matson's Guam Service is a
component of the Pacific Alliance Service, a strategic alliance established by
Matson and American President Lines, Ltd. ("APL") to provide freight services
between the U.S. Pacific Coast and Hawaii, Guam and several Far East ports. In
2003, Matson carried approximately 17,800 containers (compared with 16,300 in
2002) and 4,660 automobiles (compared with 3,760 in 2002) in the Guam Service.
The alliance currently utilizes three Matson vessels and two APL vessels.

Matson's Mid-Pacific Service offers container and conventional freight
services between the U.S. Pacific Coast and the ports of Kwajalein, Ebeye and
Majuro in the Republic of the Marshall Islands and Johnston Island, all via
Honolulu.

See "Rate Regulation" below for a discussion of Matson's freight rates.

(2) Vessels

Matson's fleet consists of ten containerships, three combination
container/trailerships, including a combination ship time-chartered from a third
party, one roll-on/roll-off barge, two container barges equipped with cranes
that service the neighbor islands of Hawaii, and one container barge equipped
with cranes in the Mid-Pacific service. The 16 Matson-owned vessels in its fleet
represent an investment of approximately $745 million expended over the past 33
years. The majority of vessels in the Matson fleet have been acquired with the
assistance of withdrawals from a Capital Construction Fund established under
Section 607 of the Merchant Marine Act, 1936, as amended.

Matson is actively pursuing a vessel renewal program because its fleet
is aging, with five vessels that will be more than 30 years old in 2004. In
2002, Matson contracted with Kvaerner Philadelphia Shipyard Inc. for two new
containerships for the Hawaii Service, each at a total project cost of
approximately $107 million. The first ship was delivered in the third quarter of
2003, and the second is scheduled for delivery in the third or fourth quarter of
2004.

Ships owned by Matson are described on the following page.

As a complement to its fleet, Matson owns approximately 19,600
containers, 10,700 container chassis, 500 auto-frames and miscellaneous other
equipment. Capital expenditures incurred by Matson in 2003 for vessels,
equipment and systems totaled approximately $132 million.

(3) Terminals

Matson Terminals, Inc. ("Matson Terminals"), a wholly-owned subsidiary
of Matson, provides container stevedoring, container equipment maintenance and
other terminal services for Matson and other ocean carriers at its 105-acre
marine terminal in Honolulu. Matson Terminals owns and operates seven cranes at
the terminal, which handled approximately 419,600 containers in 2003 (compared
with 378,600 in 2002) and can accommodate three vessels at one time. Matson
Terminals' lease with the State of Hawaii runs through September 2016. Matson
Terminals has completed a $32 million terminal improvement project at the
Honolulu terminal that included the conversion from a straddle carrier-based
container handling system to a wheeled chassis- and toppick-based system. The
conversion has resulted in improved productivity at the terminal, with marginal
improvements in stevedoring operations, increased storage density, and reduced
costs. In October 2003, Matson Terminals began operating a dedicated
roll-on/roll-off terminal facility in Honolulu that provides premium service to
automobile shippers and consignees.

SSA Terminals, LLC ("SSAT"), a joint venture of Matson and Stevedoring
Services of America ("SSA"), provides terminal and stevedoring services at U.S.
Pacific Coast terminal facilities in Long Beach, Oakland and Seattle.
 

4) Logistics and Other Services

Matson Integrated Logistics, Inc. ("Matson Integrated Logistics"), a
wholly-owned subsidiary of Matson, arranges rail, highway, air, ocean and other
surface transportation and provides other third-party logistics services for
North American shippers. Through volume purchases of rail, motor carrier, air
and ocean transportation services, augmented by such services as shipment
tracing and single-vendor invoicing, Matson Integrated Logistics is able to
reduce transportation costs for its customers. Matson Integrated Logistics
operates eight regional operating centers and has 23 sales offices across the
U.S. mainland.

Matson Logistics Solutions, Inc. ("Matson Logistics"), a wholly-owned
subsidiary of Matson, provides third-party logistics services primarily for the
automotive industry in Hawaii, Alaska, Puerto Rico and Guam-Micronesia.

Water Vessels - Category Directory

Alexander & Baldwin

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