Shareholders' Letter

While we entered the year facing great economic uncertainty, 2010 proved to be an excellent year for Alexander & Baldwin, Inc. Our financial results staged a marked recovery and, as signs of economic stabilization emerged, we made several significant investments in our Transportation and Real Estate businesses during the year.

Net income was $92 million, or $2.22 per share, more than double 2009 results, and total shareholder returns were 21 percent. A strong recovery of the China trade helped drive a 70 percent increase in Matson's operating profit and provided an opportunity to expand our services to Southern China with a second China-Long Beach Express service (CLX2). Favorable demand for our commercial properties resulted in an $11 million increase in profit from Real Estate Sales, and a recovery in sugar production attributable to better growing conditions and farming practices, coupled with higher sugar prices, produced a remarkable turnaround in Agribusiness performance.

Overall, 2010 was an important year of recovery for Alexander & Baldwin, but now it is time to focus on what lies ahead.

In this, our first letter to you, we want to share our perspectives on the strategies and strengths of Alexander & Baldwin, Inc., and convey our excitement at our prospects for value creation in coming years. We believe that A&B has never been better positioned to create value from its greatest assets: our Hawaii land and local knowledge, and Matson's brand and expertise.

Hawaii is more than just our address. Since 1870, we have helped shape Hawaii and have been shaped by it. We have played important roles in the development of two industries in Hawaii - agriculture and tourism - and are well-positioned to play a major role in the development of a third - renewable energy. We understand Hawaii, and have a hard-earned reputation for integrity and commitment to the community. Our deep knowledge of Hawaii allows us to identify opportunities, while our balance sheet allows us to pursue them.

Meanwhile, Matson - a company and a brand born in Hawaii - has successfully gone well beyond its shores, establishing a reputation that spans hemispheres and is synonymous with quality, reliability and integrity. While staying close to our Hawaii roots and leveraging our culture of providing the highest-quality customer service, Matson has successfully expanded into adjacent businesses and markets. Matson understands its brand, and the Aloha Spirit is just as evident in its Hong Kong office and Savannah warehouse as it is in Honolulu.

Our strategy is simple: leverage these irreplaceable assets - our Hawaii land and knowledge and Matson's brand and expertise - to create shareholder value. We are redoubling our efforts to do just that.

Through the A&B Land Group, we will continue to integrate our Hawaii land management, development and sales efforts. We are committed to ensuring that our lands are employed in the highest and best use, aligned with Hawaii's long-term interests, and wellpositioned for an economic resurgence. From enhancing the performance of our agricultural operations, to continuing to invest in our robust development pipeline, we laid the groundwork in 2010 for value growth. In 2011, utilizing our knowledge of Hawaii and our strong network of relationships, we will further the development and management of our lands, seek out additional investment opportunities, enhance returns from our coffee plantation through a unique new structure, and pursue property sales where we believe they will maximize value.

Similarly, Matson is seeking new ways to leverage its brand, with CLX2 perhaps its boldest move yet. Reinvestments in the Hawaii trade, a ramp up in Guam shore-side capabilities in advance of the military buildup, and continued organic investments in Matson Integrated Logistics all position Matson to create value in 2011 and beyond.

While the particular steps we take to unlock value from our assets may change in the coming years, some things won't. Foremost is our commitment to the disciplined allocation and investment of capital. The same discipline that facilitated our highly successful investments in 2002 through 2005, and kept us on the sideline during the frothy days of 2006 through 2008, is guiding our approach in the current environment. Our commitment to a healthy balance sheet and to the steady return of cash to shareholders also will remain unwavering.

And, our reliance on dedicated, hardworking and talented employees also remains unchanged. In this respect, we are very fortunate to benefit from the efforts of our 2,300 employees and their commitment to the Company.

We also express our deep appreciation for the leadership of our Board, whose wisdom and guidance have been invaluable as we strive to create value. Finally, we thank you, our shareholders, for your continued support of Alexander & Baldwin.

Walter A. Dods, Jr.

• Chairman of the Board, Alexander & Baldwin, Inc.

Stanley M. Kuriyama

• President & Chief Executive Officer, Alexander & Baldwin, Inc.