SEC Filing | MATSON

FORM 10-Q SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 (Mark One) /X/ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended June 30, 2000 ------------- OR / / TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to --------------- --------------- Commission file number 0-565 ----- ALEXANDER & BALDWIN, INC. ------------------------- (Exact name of registrant as specified in its charter) HAWAII 99-0032630 ------ ---------- (State or other jurisdiction of (I.R.S. Employer incorporation or organization) Identification No.) P. O. BOX 3440, HONOLULU, HAWAII 96801 822 BISHOP STREET, HONOLULU, HAWAII 96813 ----------------------------------- ----- (Address of principal executive (Zip Code) offices) (808) 525-6611 -------------- (Registrant's telephone number, including area code) N/A --- (Former name, former address and former fiscal year, if changed since last report) Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes /X/ No / / Number of shares of common stock outstanding as of June 30, 2000: 40,431,360

PART I. FINANCIAL INFORMATION ITEM 1. FINANCIAL STATEMENTS - ----------------------------- The condensed financial statements and notes for the second quarter and first six months of 2000 are presented below, with comparative figures from the 1999 financial statements. ALEXANDER & BALDWIN, INC. AND SUBSIDIARIES CONDENSED STATEMENTS OF INCOME (In thousands except per share amounts) Three Months Ended Six Months Ended June 30 June 30 2000 1999 2000 1999 ---- ---- ---- ---- (unaudited) (unaudited) Revenue: Net sales, revenue from services and rentals $270,657 $258,729 $485,124 $449,794 Interest, dividends and other 5,711 5,114 11,135 11,491 -------- -------- -------- -------- Total revenue 276,368 263,843 496,259 461,285 -------- -------- -------- -------- Costs and Expenses: Costs of goods sold, services and rentals 200,901 198,834 371,477 343,483 Selling, general and administrative 25,032 23,739 47,294 46,864 Interest 5,959 4,369 11,306 8,896 Income taxes 16,233 13,652 23,758 22,955 -------- -------- -------- -------- Total costs and expenses 248,125 240,594 453,835 422,198 -------- -------- -------- -------- Income before cumulative effect of change in accounting method 28,243 23,249 42,424 39,087 Cumulative effect of change in accounting method for drydocking costs (net of income taxes of $7,668) (note d) -- -- 12,250 -- -------- -------- -------- -------- Net Income $ 28,243 $ 23,249 $ 54,674 $ 39,087 ======== ======== ======== ======== Basic and Diluted Earnings Per Share: Before cumulative effect of accounting change $ 0.69 $ 0.54 $ 1.03 $ 0.90 Accounting change (note d) -- -- 0.29 -- -------- -------- -------- -------- Net income $ 0.69 $ 0.54 $ 1.32 $ 0.90 ======== ======== ======== ======== Dividends Per Share $ 0.225 $ 0.225 $ 0.450 $ 0.450 Average Numbers of Shares Outstanding 40,722 43,318 41,427 43,438 Outstanding

ALEXANDER & BALDWIN, INC. AND SUBSIDIARIES INDUSTRY SEGMENT DATA, NET INCOME (In thousands) Three Months Ended Six Months Ended June 30 June 30 2000 1999 2000 1999 ---- ---- ---- ---- (unaudited) (unaudited) Revenue: Ocean Transportation $ 204,670 $ 187,836 $ 395,183 $ 357,031 Property Development and Management: 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 Development and Management: 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 66,182 62,042 Income Taxes (16,233) (13,652) (23,758) (22,955) --------- --------- --------- --------- Income Before Accounting Change 28,243 23,249 42,424 39,087 Cumulative Effect of Accounting Change -- -- 12,250 -- --------- --------- --------- --------- Net Income $ 28,243 $ 23,249 $ 54,674 $ 39,087 ========= ========= ========= =========

ALEXANDER & BALDWIN, INC. AND SUBSIDIARIES CONDENSED BALANCE SHEETS (In thousands) June 30 December 31 2000 1999 ---- ---- (unaudited) (audited) ASSETS Current Assets: Cash and cash equivalents $ 5,000 $ 3,333 Accounts and notes receivable, net 136,046 136,637 Inventories 15,743 15,927 Real estate held for sale 9,140 12,706 Deferred income taxes 12,582 16,260 Prepaid expenses and other assets 9,278 20,739 Accrued deposits to Capital Construction Fund (1,948) (3,152) ---------- ---------- Total current assets 185,841 202,450 ---------- ---------- Investments 143,703 158,726 ---------- ---------- Real Estate Developments 62,585 60,810 ---------- ---------- Property, at cost 1,782,077 1,748,586 Less accumulated depreciation and amortization 841,808 819,959 ---------- ---------- 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 AND SHAREHOLDERS' EQUITY Current Liabilities: Bank overdraft $ 5,970 $ -- Notes payable and current portion of long-term debt 27,500 22,500 Accounts payable 54,837 55,655 Other 53,106 64,490 ---------- ---------- Total current liabilities 141,413 142,645 ---------- ---------- Long-term Liabilities: Long-term debt 329,249 277,570 Post-retirement benefit obligations 47,182 60,767 Other 45,466 51,161 ---------- ---------- Total long-term liabilities 421,897 389,498 ---------- ---------- Deferred Income Taxes 364,028 358,354 ---------- ---------- Shareholders' Equity: Capital stock 33,307 34,933 Additional capital 54,609 53,124 Unrealized holding gains on securities 39,167 49,461 Retained earnings 531,131 545,849 Cost of treasury stock (12,179) (12,404) ---------- ---------- Total shareholders' equity 646,035 670,963 ---------- ---------- Total $1,573,373 $1,561,460 ========== ==========

ALEXANDER & BALDWIN, INC. AND SUBSIDIARIES CONDENSED STATEMENTS OF CASH FLOWS (In thousands) Six Months Ended June 30 2000 1999 ---- ---- (unaudited) Cash Flows from Operating Activities $ 50,265 $ 49,235 ---------- ---------- Cash Flows from Investing Activities: Capital expenditures (51,764) (27,854) Proceeds from disposal of property, investments and other assets 752 2,856 Deposits into Capital Construction Fund (5,909) (4,702) Withdrawals from Capital Construction Fund 7,716 6,168 Change in investments, net 5 (808) ---------- ---------- Net cash used in investing activities (49,200) (24,340) ---------- ---------- Cash Flows from Financing Activities: Proceeds from issuances of long-term debt 64,000 5,000 Payments of long-term debt (12,500) (67,430) Proceeds (payments) of short-term commercial paper borrowings, net 5,000 (5,000) Proceeds from issuances of capital stock 51 54 Repurchases of capital stock (43,294) (15,792) Dividends paid (18,625) (19,539) ---------- ---------- Net cash used in financing activities (5,368) (102,707) ---------- ---------- Net Decrease in Cash and Cash Equivalents $ (4,303) $ (77,812) ========== ========== Other Cash Flow Information: Interest paid, net of amounts capitalized $ 11,123 $ 8,824 Income taxes paid, net of refunds 17,098 14,832 Other Non-Cash Information: Accrued deposits to (withdrawals from) Capital Construction Fund, net (1,204) 1,811 Depreciation 34,478 38,973 Tax-deferred property sales 23,056 30,813 Tax-deferred property purchases 3,139 5,308 Change in unrealized holding gains (10,295) (13,730)

FINANCIAL NOTES (Unaudited) (a) The condensed balance sheet as of June 30, 2000, the condensed statements of income for the three months and six months ended June 30, 2000 and 1999, and the condensed statements of cash flows for the six months ended June 30, 2000 and 1999, are unaudited. Because of the nature of the Company's operations, the results for interim periods are not necessarily indicative of results to be expected for the year, but in the opinion of management, all material adjustments necessary for the fair presentation of interim period results have been included in the interim financial statements. (b) Estimated effective annual income tax rates differ from statutory rates, primarily due to the dividends-received deduction, various tax credits and the donation of appreciated stock. (c) The Company's total non-owner changes in shareholders' equity consist of net income adjusted for unrealized holding gains (losses) on securities (other comprehensive income). On this basis, comprehensive income for the three months ended June 30, 2000 and 1999 was $17 million and $18 million, respectively. Comprehensive income for the six months ended June 30, 2000 and 1999 was $44 million and $25 million, respectively. (d) The cumulative effect of an accounting change in 2000 related to the treatment of vessel drydocking costs. The Company changed its method of accounting for these costs from the accrual method to the deferral method. Drydocking costs had been accrued as a liability and an expense on an estimated basis, in advance of the next scheduled drydocking. Under the deferral method, actual drydocking costs are capitalized when incurred and amortized over the period to the next drydocking. The new method amortizes the costs over the period of benefit and eliminates the uncertainty in estimating these costs. This change was made to conform with prevailing industry accounting practices. The cumulative effect of this accounting change, as of January 1, 2000, is shown separately in the condensed statements of income for the six months ended June 30, 2000 and resulted in income of $12,250,000 (net of income tax expense of $7,668,000), or $0.29 per share. The effect of this change in accounting method as of January 1, 2000, on the condensed balance sheets, was to increase other assets by $4,765,000, eliminate drydocking reserves of $15,153,000, increase deferred taxes by $7,668,000, and increase total shareholders' equity by $12,250,000. The pro forma net income (assuming the new accounting method was applied retroactively) for the six months ended June 30, 2000 is $42,424,000 (or $1.03 per share). The pro forma effect of this accounting change to 1999 net income was not material. (e) Certain amounts have been reclassified to conform with the current year's presentation.

ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS - ------------------------------------------------ SECOND QUARTER EVENTS: OPERATING RESULTS: Net income for the second quarter of 2000 was $28.2 million, or $0.69 per share. This represented a 21-percent increase over net income in the comparable period of 1999 of $23.2 million, or $0.54 per share. Revenue in the second quarter of 2000 was $276.4 million, compared with revenue of $263.8 million in the second quarter of 1999. After an accounting change, net income for the first half of 2000 was $54.7 million, or $1.32 per share, versus $39.1 million, 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 $12.3 million. Revenue in the first half of 2000 was $496.3 million, compared with $461.3 million in the first half of 1999. In the second quarter of 2000, operating profit was $53.1 million, which 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 of 2000, 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. FINANCIAL CONDITION AND LIQUIDITY The Company's principal liquid resources, comprising cash and cash equivalents, receivables, sugar and coffee inventories and unused lines of credit, less accrued deposits to the Capital Construction Fund (CCF), totaled $211.6 million at June 30, 2000, a decrease of $41.7 million from December 31, 1999. This net reduction was due primarily to an increase in outstanding debt to fund share repurchases totaling $43.3 million. Working capital was $44.4 million at June 30, 2000, a decrease of $15.4 million from the amount at the end of 1999. This net decrease was due primarily to a decrease in other current assets, a decline in cash balances and an increase in short-term debt, partially offset by a decrease in short-term liabilities. The decrease in other current assets and in short-term liabilities was due primarily to the elimination of vessel drydocking accruals and related deferred income taxes (see Note d to the Company's condensed financial statements). RESULTS OF SEGMENT OPERATIONS - SECOND QUARTER 2000 COMPARED WITH THE SECOND QUARTER OF 1999 OCEAN TRANSPORTATION revenue of $204.7 million for the second quarter of 2000 was nine-percent higher than the 1999 second-quarter revenue. Operating profit of $27.9 million for the second quarter of 2000 was 10-percent higher than $25.3 million in the second quarter of 1999. The improvement was achieved in spite of a virtual doubling of bunker fuel prices from the second quarter of 1999, and it was due primarily to higher Hawaii auto volume, an improved mix of cargo and better results for non-Hawaii operations. Matson's second quarter 2000 Hawaii service container volume was about the same as in the 1999 second quarter, but automobile volume was 34-percent higher. The increase in automobile volume was due primarily to competitive gains. PROPERTY DEVELOPMENT AND MANAGEMENT - LEASING revenue of $12.4 million for the second quarter of 2000 was 15-percent higher than the second quarter 1999 revenue, and operating profit of $7.6 million was 19-percent higher than in the comparable 1999 period. The increases were due primarily to additions to the property portfolio in the latter part of 1999 and higher rates of occupancy. PROPERTY DEVELOPMENT AND MANAGEMENT - SALES revenue for the second quarter of 2000 was $25.0 million, compared with $27.2 million in sales recorded in the second quarter of 1999. In the second quarter of 2000, operating profit from property sales was $18.9 million, nearly twice the second quarter 1999 operating profit of $9.9 million. Sales in the second quarter of 2000 included the sale of a ground lease under a Costco store in Kahului, Maui. Other sales in the second quarter of 2000 included six business parcels and six residential properties. Sales in the second quarter of 1999 included the sale of a 109,000 square foot office and research facility, one business parcel and three residential properties. FOOD PRODUCTS revenue of $33.5 million for the second quarter of 2000 compared with $37.3 million in revenue reported for the comparable period of 1999. 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. The primary reasons for the unfavorable comparison were low U.S. raw sugar prices and continuing drought conditions that have lowered sugar production. U. S. raw sugar prices are at the lowest level in 22 years and the outlook is uncertain. RESULTS OF SEGMENT OPERATIONS - FIRST SIX MONTHS 2000 COMPARED WITH THE FIRST SIX MONTHS OF 1999 OCEAN TRANSPORTATION revenue of $395.2 million for the first half of 2000 was 11-percent higher than in the first half of 1999 and operating profit of $47.8 million increased $4.2 million, or 10 percent, from $43.6 million in the first half of 1999. The year-to-date improvement was due to the same reasons cited for the second-quarter improvement, primarily higher Hawaii auto volume, an improved mix of cargo and better results for non-Hawaii operations. For the first half of 2000, Matson's Hawaii service container volume was two-percent higher than in the 1999 first half, but automobile volume was 49-percent higher. The increase in automobile volume was due primarily to competitive gains. PROPERTY DEVELOPMENT AND MANAGEMENT - LEASING revenue of $24.3 million for the first half of 2000 was eight-percent higher than the results in the comparable 1999 period. First-half 2000 operating profit of $14.8 million was six-percent higher than in the first half of 1999. The increases were due primarily to additions to the property portfolio in the latter part of 1999 and higher occupancies. 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. The increase in Hawaii occupancy was experienced in retail and warehouse properties. PROPERTY DEVELOPMENT AND MANAGEMENT - SALES revenue of $28.0 million in the first half of 2000 compared with $35.1 million recorded in the first half of 1999. Operating profit of $19.6 million from property sales in the first half of 2000 was $4.1 million, or 27 percent, higher than $15.5 million in the first half of 1999. Sales in the first half of 2000 included the Costco ground lease, eight business parcels and 17 residential properties. Among the first half 1999 sales were the office and research facility, plus five business parcels and 11 residential properties. FOOD PRODUCTS revenue of $47.2 million in the first half of 2000 compared with $45.3 million in revenue for the comparable period of 1999. However, in the first half of 2000, food products broke even on an operating profit basis, compared with operating profit of $3.5 million in the first half of 1999. Again, the reduction in operating profit was primarily the result of low U.S. raw sugar prices and continuing drought conditions that have lowered sugar production. Furthermore, U. S. raw sugar prices are at the lowest level in 22 years and the outlook is uncertain. OTHER MATTERS PROPERTY SALES: The mix of property sales in any year or quarter can be diverse. Sales can include property sold under threat of condemnation, developed residential real estate, commercial properties, developable subdivision lots and undeveloped land. The sale of undeveloped land and subdivision lots generally provides a greater contribution margin than does the sale of developed and commercial property, due to the low historical-cost basis of the Company's Hawaii land. Consequently, property sales revenue trends and the amount of real estate held for sale on the balance sheets do not necessarily indicate future profitability trends for this segment. ACCOUNTING CHANGE: The Company recorded an accounting change of $12.3 million (after-tax) in the first half of 2000, relating to the treatment of vessel drydocking costs. The Company changed its method of accounting for these costs from the accrual method to the deferral method. This change was made to conform to prevailing industry accounting practices (see Note d to the Company's condensed financial statements). CORPORATE ORGANIZATION: The Company merged its wholly owned subsidiary, A&B-Hawaii, Inc., into the Company on December 31, 1999. This merger had no adverse impact on operations or consolidated assets and obligations. TAX-DEFERRED REAL ESTATE EXCHANGES: In the first half of 2000, the Company sold six parcels of land for $23.1 million. The proceeds from these sales are reflected in the Statements of Cash Flows under the caption "Other Non-Cash Information." During the first half of 2000, the Company reinvested proceeds of $3.1 million on a tax-deferred basis. The reinvested proceeds are also reported under Other Non-Cash Information in the Statements of Cash Flows. SHARE REPURCHASES: In the first half of 2000, the Company repurchased 2,173,395 shares of its common stock for an aggregate of $43.3 million (average of $19.92 per share). ENVIRONMENTAL MATTERS: As with most industrial and land-development companies of its size, the Company's operations have certain risks, which could result in expenditures for environmental remediation. The Company believes that it is in compliance, in all material respects, with applicable environmental laws and regulations, and works proactively to identify potential environmental concerns. Management believes that appropriate liabilities have been accrued for environmental matters. ECONOMIC CONDITIONS: The economic performance for the state of Hawaii continues to improve. The index of leading economic indicators published by the State of Hawaii's Department of Business, Economic Development & Tourism (DBEDT) has leveled off in recent months, however is near its high point. Some economic measures already are improving nonetheless, such as unemployment, jobs and personal income growth. Construction jobs grew by a rapid 8.8% in the first quarter of 2000, the fastest rate of first-quarter growth since 1991. The contracting tax base, a measure of actual construction activity, expanded by a sharp 19.9% in the first quarter of 2000, relative to the year-earlier quarter. In its June 2000 outlook, DBEDT raised its projections for growth in real gross state product for the year 2000 to 3.5% (from 2.5% in its March 2000 outlook), for 2001 to 3.0% (from 2.7%), and for 2002, it remained the same at 2.6%. The external factors cited for raising the projections were the continuing strength of the U.S. mainland economy and improvement in the Asian economies. Rising growth in visitor arrivals is anticipated, with the projection for growth in 2000 now at 3.8% percent (up from 2.3%). This increase is the net result of continued growth in the number of arrivals from the U. S. mainland, offset, in part, by a diminishing rate of decrease in visitor arrivals from Japan. PRIVATE SECURITIES LITIGATION REFORM ACT OF 1995 The Company, from time to time, may make or may have made certain forward- looking statements, whether orally or in writing, such as forecasts and projections of the Company's future performance or statements of management's plans and objectives. Such forward-looking statements may be contained in, among other things, Securities and Exchange Commission (SEC) filings, such as the Forms 10-Q, press releases made by the Company and oral statements made by the officers of the Company. Except for historical information contained in these written or oral communications, such communications contain forward- looking statements. These forward-looking statements involve a number of risks and uncertainties that could cause actual results to differ materially from those projected in the statements, including, but not limited to: (1) economic conditions in Hawaii and elsewhere; (2) market demand; (3) competitive factors and pricing pressures in the Company's primary markets; (4) legislative and regulatory environments at the federal, state and local levels, such as government rate regulations, land-use regulations, government administration of the U.S. sugar program, and modifications to or retention of cabotage laws; (5) dependence on third-party suppliers; (6) fuel prices; (7) raw sugar prices; (8) labor relations; (9) risks associated with current or future litigation; and (10) other risk factors described elsewhere in such communications and from time to time in the Company's filings with the SEC.

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK - ------------------------------------------------------------------- Information concerning market risk is incorporated herein by reference to Item 7A of the Company's Form 10-K for the fiscal year ended December 31, 1999. There has been no material change in the quantitative and qualitative disclosure about market risk since December 31, 1999.

PART II. OTHER INFORMATION ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS - ------------------------------------------------------------- At the Annual Meeting of Shareholders of the Company held on April 27, 2000, the Company's shareholders voted in favor of: (i) the election of ten directors to the Company's Board of Directors, and (ii) the election of Deloitte & Touche LLP as the Company's independent auditors. The number of votes for, against or withheld, as well as the number of abstentions and broker non-votes, as to each matter voted upon at the Annual Meeting of Shareholders, were as follows: (i) Election of Directors For Withheld Michael J. Chun 38,436,664 706,301 Leo E. Denlea, Jr. 38,415,634 727,331 W. Allen Doane 38,432,720 710,245 Walter A. Dods, Jr. 38,251,213 891,752 Charles G. King 38,423,840 719,125 Carson R. McKissick 38,432,365 710,600 C. Bradley Mulholland 38,797,371 345,594 Lynn M. Sedway 38,438,423 704,542 Maryanna G. Shaw 38,422,680 720,285 Charles M. Stockholm 38,432,617 710,348 (ii) Election of Auditors For Against Abstain --- ------- ------- 38,978,648 53,437 110,880 There were no broker non-votes at the Annual Meeting. ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K - ----------------------------------------- (a) Exhibits 10. Material contracts. 10.a.(xxvii) Eighth Amendment dated May 3, 2000 to the Revolving Credit Agreement ("Agreement") between Alexander & Baldwin, Inc. and First Hawaiian Bank, dated December 30, 1993 (A&B-Hawaii, Inc., an original party to the Agreement, was merged into Alexander & Baldwin, Inc. effective December 31, 1999). 11. Statement re Computation of Per Share Earnings. 27. Financial Data Schedule. (b) Reports on Form 8-K No reports on Form 8-K were filed during the quarter.

SIGNATURES ---------- Pursuant to the requirements of the Securities Exchange Act of l934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized. ALEXANDER & BALDWIN, INC. ------------------------------- (Registrant) Date: August 11, 2000 /s/ James S. Andrasick ------------------------------- James S. Andrasick Sr. Vice President, Chief Financial Officer and Treasurer Date: August 11, 2000 /s/ Thomas A. Wellman ------------------------------- Thomas A. Wellman Controller

EXHIBIT INDEX ------------- 10. Material contracts. 10.a.(xxvii) Eighth Amendment dated May 3, 2000 to the Revolving Credit Agreement ("Agreement") between Alexander & Baldwin, Inc. and First Hawaiian Bank, dated December 30, 1993 (A&B-Hawaii, Inc., an original party to the Agreement, was merged into Alexander & Baldwin, Inc. effective December 31, 1999). 11. Statement re Computation of Per Share Earnings. 27. Financial Data Schedule.

EIGHTH AMENDMENT TO GRID NOTE ----------------------------- THIS AMENDMENT TO GRID NOTE executed this 3rd day of May, 2000, and effective as of the first day of May 2000, by and between ALEXANDER & BALDWIN, INC., a Hawaii corporation, hereinafter called the "Maker", and FIRST HAWAIIAN BANK, a Hawaii corporation, hereinafter called the "Bank"; WITNESSETH THAT: ---------------- WHEREAS, the Bank has extended to the Maker that certain uncommitted line of credit facility in the principal amount not to exceed FORTY MILLION AND NO/100 DOLLARS ($40,000.000.00) which line of credit is evidenced by that certain Grid Note (the "Note") dated December 30, 1993, with a final maturity of said Note being November 30, 1994; and WHEREAS, the Maker and the Bank subsequently entered into that certain Amendment to Grid Note dated August 31, 1994, whereby the Note was increased to SIXTY-FIVE MILLION AND NO/100 DOLLARS ($65,000,000.00), Section 4 of the Note, entitled "Limitation" was deleted in its entirety and replaced, and the Note ------------ was extended to November 30, 1995; and WHEREAS, the Maker and the Bank subsequently entered into that Second Amendment to Grid Note dated March 29, 1995, whereby the Note was decreased to FORTY-FIVE MILLION AND NO/100 DOLLARS ($45,000,000.00), and Section 4 of the Note, entitled "Limitation" was deleted in its entirety and replaced; and ------------ WHEREAS, the Maker and the Bank subsequently entered into that Third Amendment to Grid Note dated November 17, 1995, whereby the Note was extended to November 30, 1996; and WHEREAS, the Maker and the Bank subsequently entered into that Fourth Amendment to Grid Note dated November 25, 1996, whereby the Note was extended to November 30, 1997; and WHEREAS, the Maker and the Bank subsequently entered into that Fifth Amendment to Grid Note dated November 28, 1997, whereby the Note was extended to November 30, 1998; and WHEREAS, the Maker and the Bank subsequently entered into that Sixth Amendment to Grid Note dated November 30, 1998, whereby the Note was extended to November 30, 1999; and WHEREAS, the Maker and the Bank subsequently entered into that Seventh Amendment to Grid Note dated November 23, 1999, whereby the Note was extended to November 30, 2000 and with the merger of A&B-Hawaii, Inc. into Alexander & Baldwin, Inc. with Alexander & Baldwin, Inc. being the surviving corporation, the obligations of A&B-Hawaii, Inc. under the Note were terminated with all references in the Note to the Maker to be deemed to be references to Alexander & Baldwin, Inc.; and WHEREAS, the Maker and the Bank desire to further amend the Note as hereinafter provided. NOW, THEREFORE, in consideration of the mutual covenants contained herein, the Maker and the Bank agree as follows: 1. In the first full paragraph of the Note, the Maximum Commitment shall be changed from $40,000,000.00 to $70,000,000.00. In the top left corner of the first page of the Note, the reference to $40,000,000.00 shall be deleted and replaced by $70,000,000.00. For the valued received, pursuant and subject to the terms of the Note, the Maker promises to pay to the order of the Bank the principal sum of SEVENTY MILLION AND NO/100 DOLLARS ($70,000,000.00) (the "Maximum Commitment"), or so much thereof as may be advanced, with interest on the unpaid principal amount from time to time outstanding at the rates specified in the Note. 2. Section 4 of the Note, entitled "Limitation.", shall be deleted in ---------- its entirety and replaced by the following: 4. Limitation. Notwithstanding any contrary provision ---------- hereunder, the unpaid principal balance outstanding under this Note shall not at any time be greater than an amount which, when added to the unpaid principal balance or balances owing under the $140,000,000.00 Second Amended and Restated Credit and Term Loan Agreement dated as of December 31, 1996, as amended from time to time, among the Maker, the Bank and banks that are parties thereto, exceeds the aggregate principal sum of $140,000,000.00. In all other respects, the Note, as amended, shall remain unmodified and in full force and effect, and the Maker hereby reaffirms all of its obligations under the Note, as previously amended, and as amended hereby. Without limiting the generality of the foregoing, the Maker hereby expressly acknowledges and agrees that, as of the date of this EIGHTH AMENDMENT TO GRID NOTE, the Maker has no offsets, claims or defenses whatsoever against the Bank or against any of the Maker's obligations under the Note, as previously amended, and as amended hereby. IN WITNESS WHEREOF, this Eighth Amendment to Grid Note is executed by the undersigned parties as of this 3rd day of May, 2000. ALEXANDER & BALDWIN, INC. FIRST HAWAIIAN BANK a Hawaii Corporation a Hawaii Corporation By: /s/ Thomas A. Wellman By: /s/ Adolph F. Chang Its: Controller & Treasurer Its: Vice President By: /s/ John B. Kelley Its: Vice President

EXHIBIT 11 ALEXANDER & BALDWIN, INC. COMPUTATION OF EARNINGS PER SHARE (In thousands, except per share amounts) - ------------------------------------------------------------------------------- Three Months Ended Six Months Ended June 30 June 30 2000 1999 2000 1999 ---- ---- ---- ---- Basic Earnings Per Share - ------------------------ Net income $ 28,243 $ 23,249 $ 54,674 $ 39,087 ======== ======== ======== ======== Average number of shares outstanding 40,722 43,318 41,427 43,438 ======== ======== ======== ======== Basic earnings per share $ 0.69 $ 0.54 $ 1.32 $ 0.90 ======== ======== ======== ======== Diluted Earnings Per Share - -------------------------- Net income $ 28,243 $ 23,249 $ 54,674 $ 39,087 ======== ======== ======== ======== Average number of shares outstanding 40,722 43,318 41,427 43,438 Effect of assumed exercise of outstanding stock options 37 12 12 2 -------- -------- -------- -------- Average number of shares outstanding after assumed exercise of outstanding stock options 40,759 43,330 41,439 43,440 ======== ======== ======== ======== Diluted earnings per share $ 0.69 $ 0.54 $ 1.32 $ 0.90 ======== ======== ======== ========

5 The schedule contains summary financial information extracted from the condensed balance sheet as of June 30, 2000 and the condensed statement of income for the six months ended June 30, 2000 and is qualified in its entirety by reference to such financial statements. 1000 6-MOS DEC-31-2000 JUN-30-2000 (5,970) 5,000 144,421 8,375 15,743 185,841 1,782,077 841,808 1,573,373 141,413 329,249 0 0 33,307 612,728 1,573,373 485,124 496,259 371,477 371,477 0 0 11,306 86,100 23,758 54,674 0 0 0 54,674 1.32 1.32