Document_and_Entity_Informatio
Document and Entity Information | 3 Months Ended |
Mar. 31, 2015 | |
Document and Entity Information | |
Entity Registrant Name | Matson, Inc. |
Entity Central Index Key | 3453 |
Document Type | 10-Q |
Document Period End Date | 31-Mar-15 |
Amendment Flag | FALSE |
Current Fiscal Year End Date | -19 |
Entity Current Reporting Status | Yes |
Entity Filer Category | Large Accelerated Filer |
Entity Common Stock, Shares Outstanding | 43,454,400 |
Document Fiscal Year Focus | 2015 |
Document Fiscal Period Focus | Q1 |
Condensed_Consolidated_Stateme
Condensed Consolidated Statements of Income and Comprehensive Income (USD $) | 3 Months Ended | |
In Millions, except Per Share data, unless otherwise specified | Mar. 31, 2015 | Mar. 31, 2014 |
Operating Revenue: | ||
Ocean transportation | $305.50 | $294.60 |
Logistics | 92.7 | 97.9 |
Total Operating Revenue | 398.2 | 392.5 |
Costs and Expenses: | ||
Operating costs | 318.2 | 347.8 |
Equity in income of terminal joint venture | -3.4 | -0.2 |
Selling, general and administrative | 38.5 | 35 |
Total Costs and Expenses | 353.3 | 382.6 |
Operating Income | 44.9 | 9.9 |
Interest expense | -4.3 | -4.1 |
Income before income taxes | 40.6 | 5.8 |
Income tax expense | -15.6 | -2.4 |
Net Income | 25 | 3.4 |
Net Income | 25 | 3.4 |
Other Comprehensive Income (Loss), Net of Income Taxes: | ||
Net Income | 25 | 3.4 |
Other Comprehensive Income (Loss): | ||
Net loss in prior service cost | -0.2 | |
Amortization of prior service cost included in net periodic pension cost | -0.4 | -0.3 |
Amortization of net loss included in net periodic pension cost | 1.4 | 0.7 |
Foreign currency translation adjustment | 0.1 | -0.1 |
Total Other Comprehensive Income | 0.9 | 0.3 |
Comprehensive Income | $25.90 | $3.70 |
Basic Earnings Per Share: | ||
Earnings Per Share, Basic | $0.58 | $0.08 |
Diluted Earnings Per Share: | ||
Earnings Per Share, Diluted | $0.57 | $0.08 |
Weighted Average Number of Shares Outstanding: | ||
Basic (in shares) | 43.4 | 42.9 |
Diluted (in shares) | 43.9 | 43.3 |
Dividends: | ||
Cash dividends declared per share (in dollars per share) | $0.17 | $0.16 |
Condensed_Consolidated_Balance
Condensed Consolidated Balance Sheets (USD $) | Mar. 31, 2015 | Dec. 31, 2014 |
In Millions, unless otherwise specified | ||
Current Assets: | ||
Cash and cash equivalents | $325.80 | $293.40 |
Accounts receivable, net | 201.8 | 197.6 |
Deferred income taxes | 7.8 | 8 |
Prepaid expenses and other assets | 19.6 | 20.5 |
Total current assets | 555 | 519.5 |
Investment in terminal joint venture | 67.8 | 64.4 |
Property and equipment, net | 678.7 | 691.2 |
Goodwill and intangible assets, net | 29.8 | 29.9 |
Capital Construction Fund deposits | 27.5 | 27.5 |
Other long-term assets | 68.1 | 69.3 |
Total assets | 1,426.90 | 1,401.80 |
Current Liabilities: | ||
Current portion of debt | 21.6 | 21.6 |
Accounts payable | 140.6 | 133.2 |
Payroll and vacation benefits | 15.9 | 17.3 |
Uninsured liabilities | 25 | 24.5 |
Accrued and other liabilities | 20.7 | 26.9 |
Total current liabilities | 223.8 | 223.5 |
Long-term Liabilities: | ||
Long-term debt | 349.6 | 352 |
Deferred income taxes | 313.3 | 308.4 |
Employee benefit plans | 119.2 | 118.6 |
Uninsured and other liabilities | 35.7 | 35.5 |
Total long-term liabilities | 817.8 | 814.5 |
Commitments and Contingencies (Note 7) | ||
Shareholders' Equity: | ||
Capital stock | 32.4 | 32.4 |
Additional paid in capital | 278 | 274.9 |
Accumulated other comprehensive loss | -52.4 | -53.3 |
Retained earnings | 127.3 | 109.8 |
Total shareholders' equity | 385.3 | 363.8 |
Total liabilities and shareholders' equity | $1,426.90 | $1,401.80 |
Condensed_Consolidated_Stateme1
Condensed Consolidated Statements of Cash Flows (USD $) | 3 Months Ended | |
In Millions, unless otherwise specified | Mar. 31, 2015 | Mar. 31, 2014 |
Cash Flows From Operating Activities: | ||
Net income | $25 | $3.40 |
Reconciling adjustments: | ||
Depreciation and amortization | 16.8 | 17.5 |
Deferred income taxes | 4.5 | 0.7 |
Share-based compensation expense | 2.8 | 1.8 |
Equity in income of terminal joint venture | -3.4 | -0.2 |
Other | 3.3 | -0.4 |
Changes in assets and liabilities: | ||
Accounts receivable | -4.2 | 4.4 |
Deferred dry-docking payments | -5.1 | -7.3 |
Deferred dry-docking amortization | 5.5 | 5.3 |
Prepaid expenses and other assets | 0.7 | 0.8 |
Accounts payable and accrued liabilities | 7.4 | 4.7 |
Other liabilities | -7 | -0.6 |
Net cash provided by operating activities | 46.3 | 30.1 |
Cash Flows From Investing Activities: | ||
Capital expenditures | -3.3 | -4.9 |
Proceeds from disposal of property and equipment | 0.3 | 0.4 |
Deposits into Capital Construction Fund | -2.2 | -2.2 |
Withdrawals from Capital Construction Fund | 2.2 | 2.2 |
Net cash used in investing activities | -3 | -4.5 |
Cash Flows From Financing Activities: | ||
Proceeds from issuance of debt | 100 | |
Payments of debt | -2.4 | -2.5 |
Proceeds from issuance of capital stock | 1.9 | 0.7 |
Tax withholding related to net share settlements of restricted stock units | -2.9 | -1.7 |
Dividends paid | -7.5 | -6.9 |
Net cash (used in) provided by financing activities | -10.9 | 89.6 |
Net increase in cash and cash equivalents | 32.4 | 115.2 |
Cash and cash equivalents, beginning of the period | 293.4 | 114.5 |
Cash and cash equivalents, end of the period | 325.8 | 229.7 |
Supplemental Cash Flow Information: | ||
Interest paid | 3.9 | 1.9 |
Income tax paid (refunded) | 4.2 | -0.9 |
Non-cash Information: | ||
Capital expenditures included in accounts payable and accrued liabilities | $1 | $1.30 |
DESCRIPTION_OF_THE_BUSINESS
DESCRIPTION OF THE BUSINESS | 3 Months Ended |
Mar. 31, 2015 | |
DESCRIPTION OF THE BUSINESS | |
DESCRIPTION OF THE BUSINESS | |
1.DESCRIPTION OF THE BUSINESS | |
Matson, Inc., a holding company incorporated in January 2012, in the State of Hawaii, and its subsidiaries (“Matson” or the “Company”), is a leading provider of ocean transportation and logistics services. | |
Ocean Transportation: Matson’s ocean transportation business is conducted through Matson Navigation Company, Inc. (“MatNav”), a wholly-owned subsidiary of Matson, Inc. Founded in 1882, MatNav is an asset-based business that provides a vital lifeline of ocean freight transportation services to the island economies of Hawaii, Guam, Micronesia, and various islands in the South Pacific. MatNav also operates a premium, expedited service from China to Long Beach, California. In addition, a subsidiary of MatNav provides container stevedoring, container equipment maintenance and other terminal services for MatNav and other ocean carriers on the islands of Oahu, Hawaii, Maui and Kauai. | |
The Company has a 35 percent ownership interest in SSA Terminals, LLC (“SSAT”) through a joint venture between Matson Ventures, Inc., a wholly-owned subsidiary of MatNav, and SSA Ventures, Inc. (“SSA”), a subsidiary of Carrix, Inc. (the “Terminal Joint Venture”). SSAT provides terminal and stevedoring services to various carriers at six terminal facilities on the Pacific Coast of the United States of America (“U.S.”), including to MatNav at several of those facilities. Matson records its share of income (loss) in the joint venture in operating costs in the Condensed Consolidated Statements of Income and Comprehensive Income, and within the ocean transportation segment due to the nature of SSAT’s operations. | |
Logistics: The Company’s logistics business is conducted through Matson Logistics, Inc. (“Matson Logistics” or “Logistics”), a wholly-owned subsidiary of MatNav. Established in 1987, Matson Logistics is an asset-light business that provides multimodal transportation services, including domestic and international rail intermodal service (“Intermodal”); long-haul and regional highway brokerage, specialized hauling, flat-bed and project services, less-than-truckload services, and expedited freight services (collectively “Highway”); and warehousing and distribution services. | |
Horizon Acquisition: On November 11, 2014, Matson and Horizon Lines, Inc. (“Horizon”) announced that MatNav and Horizon entered into a definitive merger agreement pursuant to which Horizon will be merged with a subsidiary of MatNav. As a result, Matson will acquire Horizon’s Alaska operations and assume all of Horizon’s non-Hawaii assets and liabilities (the “Horizon Transaction”). Separately, on the same day, Horizon announced that it agreed to sell its Hawaii operations to The Pasha Group (“Pasha”), (the “Pasha Transaction”), and shut-down all of its operations in Puerto Rico. | |
The total value for the Horizon Transaction is approximately $456 million (before transaction costs), based on Horizon’s net debt outstanding as of March 22, 2015, less the anticipated proceeds from the Pasha Transaction. The Horizon Transaction is conditioned on the Pasha Transaction closing and other customary closing conditions. The Company expects to fund the Horizon Transaction from cash on hand and available borrowings under its revolving credit facility. The Pasha Transaction is also subject to customary closing conditions. The Company expects to close the Horizon Transaction by the end of the second quarter. | |
SIGNIFICANT_ACCOUNTING_POLICIE
SIGNIFICANT ACCOUNTING POLICIES | 3 Months Ended |
Mar. 31, 2015 | |
SIGNIFICANT ACCOUNTING POLICIES | |
SIGNIFICANT ACCOUNTING POLICIES | |
2.SIGNIFICANT ACCOUNTING POLICIES | |
Basis of Presentation: The condensed consolidated financial statements are unaudited. Due to the nature of the Company’s operations, the results for interim periods are not necessarily indicative of results to be expected for the year. These condensed consolidated financial statements reflect all normal recurring adjustments that are, in the opinion of management, necessary for fair presentation of the results of the interim periods, and do not include all of the information and footnotes required by U.S. generally accepted accounting principles for complete financial statements. The condensed consolidated financial statements should be read in conjunction with the consolidated financial statements and notes thereto included in the Company’s Annual Report filed on Form 10-K for the year ended December 31, 2014. | |
Fiscal Period: The period end for Matson, Inc. is March 31. The period end for MatNav occurred on the last Friday in March, except for Matson Logistics Warehousing for which the period closed on March 31. | |
Significant Accounting Policies: The Company’s significant accounting policies are described in Note 2 to the consolidated financial statements included in Item 8 of the Company’s Annual Report filed on Form 10-K for the year ended December 31, 2014. | |
CAPITAL_CONSTRUCTION_FUND
CAPITAL CONSTRUCTION FUND | 3 Months Ended | |||||||
Mar. 31, 2015 | ||||||||
CAPITAL CONSTRUCTION FUND | ||||||||
CAPITAL CONSTRUCTION FUND | ||||||||
3.CAPITAL CONSTRUCTION FUND | ||||||||
At March 31, 2015 and December 31, 2014, the Company had the following amounts of assigned eligible accounts receivable, and on deposit to the Capital Construction Fund (“CCF”) (in millions): | ||||||||
March 31 | December 31 | |||||||
2015 | 2014 | |||||||
CCF on deposit | $ | 27.5 | $ | 27.5 | ||||
Eligible accounts receivable assigned to CCF | 150.9 | 150.7 | ||||||
Total | $ | 178.4 | $ | 178.2 | ||||
Due to the nature of the assignment of eligible accounts receivables into the CCF, such assigned amounts are classified as part of accounts receivable in the condensed consolidated balance sheets. The Company’s CCF on deposit of $27.5 million at March 31, 2015 and December 31, 2014, was invested in a money market fund, and is classified as a long-term asset in the Company’s condensed consolidated balance sheet. | ||||||||
The Company’s CCF is described in Note 6 to the consolidated financial statements included in Item 8 of the Company’s Annual Report filed on Form 10-K for the year ended December 31, 2014. | ||||||||
DEBT
DEBT | 3 Months Ended | |||||||
Mar. 31, 2015 | ||||||||
DEBT | ||||||||
DEBT | ||||||||
4.DEBT | ||||||||
At March 31, 2015 and December 31, 2014, the Company’s debt consisted of the following (in millions): | ||||||||
March 31 | December 31 | |||||||
2015 | 2014 | |||||||
Term Loans: | ||||||||
5.79%, payable through 2020 | $ | 38.5 | $ | 38.5 | ||||
3.66%, payable through 2023 | 77.5 | 77.5 | ||||||
4.16%, payable through 2027 | 55 | 55 | ||||||
4.31%, payable through 2032 | 37.5 | 37.5 | ||||||
4.35%, payable through 2044 | 100 | 100 | ||||||
Title XI Bonds: | ||||||||
5.34%, payable through 2028 | 29.7 | 30.8 | ||||||
5.27%, payable through 2029 | 31.9 | 33 | ||||||
Capital leases | 1.1 | 1.3 | ||||||
Total Debt | 371.2 | 373.6 | ||||||
Less current portion | (21.6 | ) | (21.6 | ) | ||||
Total Long-term Debt | $ | 349.6 | $ | 352 | ||||
The Company’s Debt is described in Note 7 to the consolidated financial statements included in Item 8 of the Company’s Annual Report filed on Form 10-K for the year ended December 31, 2014. | ||||||||
PENSION_AND_POSTRETIREMENT_PLA
PENSION AND POST-RETIREMENT PLANS | 3 Months Ended | |||||||||||||
Mar. 31, 2015 | ||||||||||||||
PENSION AND POST-RETIREMENT PLANS | ||||||||||||||
PENSION AND POST-RETIREMENT PLANS | ||||||||||||||
5.PENSION AND POST-RETIREMENT PLANS | ||||||||||||||
The Company sponsors qualified defined-benefit pension and post-retirement plans (collectively, the “Plans”). The following table provides the components of net periodic benefit cost for the Plans for the three-months periods ended March 31, 2015 and 2014 (in millions): | ||||||||||||||
Pension Benefits | Post-retirement Benefits | |||||||||||||
March 31 | March 31 | |||||||||||||
2015 | 2014 | 2015 | 2014 | |||||||||||
Service cost | $ | 0.9 | $ | 0.8 | $ | 0.4 | $ | 0.3 | ||||||
Interest cost | 2.4 | 2.4 | 0.6 | 0.6 | ||||||||||
Expected return on plan assets | (3.5 | ) | (3.5 | ) | — | — | ||||||||
Amortization of net loss | 1.6 | 0.8 | 0.6 | 0.1 | ||||||||||
Amortization of prior service cost | (0.6 | ) | (0.6 | ) | — | — | ||||||||
Net Periodic Cost (Benefit) | $ | 0.8 | $ | (0.1 | ) | $ | 1.6 | $ | 1 | |||||
On April 10, 2015, the Company paid an initial contribution of $1.6 million to its defined benefit pension plans, of total expected contributions of $6.2 million to be made for 2015. | ||||||||||||||
SHAREBASED_COMPENSATION
SHARE-BASED COMPENSATION | 3 Months Ended |
Mar. 31, 2015 | |
SHARE-BASED COMPENSATION | |
SHARE-BASED COMPENSATION | |
6.SHARE-BASED COMPENSATION | |
During the three-months period ended March 31, 2015, the Company granted approximately 226,000 in total of time-based and performance-based shares to certain of its employees at a weighted-average grant date fair value of $35.28. The number of performance shares awarded represents the maximum that can be earned, and will ultimately depend on the Company’s performance. | |
Total stock-based compensation cost recognized in the Condensed Consolidated Financial Statements of Income and Comprehensive Income as a component of selling, general and administrative costs was $2.8 million and $1.8 million for the three-months periods ended March 31, 2015 and 2014, respectively. Total unrecognized compensation cost related to unvested share-based compensation arrangements was $14.8 million at March 31, 2015, and is expected to be recognized over a weighted-average period of 2.2 years. Total unrecognized compensation cost may be adjusted for any unearned performance shares or forfeited shares. | |
CONTINGENCIES
CONTINGENCIES | 3 Months Ended |
Mar. 31, 2015 | |
CONTINGENCIES | |
CONTINGENCIES | |
7.CONTINGENCIES | |
Employee Matters: Matson and SSAT are members of the Pacific Maritime Association (“PMA”), which on behalf of its members negotiates collective bargaining agreements with the International Longshore and Warehouse Union (“ILWU”) on the U.S. West Coast. The PMA/ILWU collective bargaining agreements that cover substantially all U.S. West Coast longshore labor expired on July 1, 2014. On February 20, 2015, the PMA and the ILWU announced a tentative agreement on a new five-year contract covering longshore workers at all 29 U.S. West Coast ports. The tentative agreement is subject to ratification by both the PMA and ILWU, and no assurance can be given that the tentative agreement will be ratified by both parties. If the tentative agreement is not ratified, Matson and SSAT could be subject to future slow-downs, strikes, lock-outs or other disruptions that may adversely impact Matson’s or SSAT’s operations. | |
Matson also has collective bargaining agreements with ILWU labor in Hawaii, and ILWU office clerical workers in Oakland, each of which expired on June 30, 2014. Workers under these agreements are operating under extensions with the unions. With a tentative agreement reached between the PMA and the ILWU, negotiations with the ILWU labor in Hawaii have resumed, and negotiations with the ILWU office clerical workers in Oakland are expected to commence; however no assurance can be given that agreements will be reached without slow-downs, strikes, lock-outs or other disruptions that may adversely impact Matson’s operations. | |
Environmental Matter: Molasses was released into Honolulu Harbor from a pipeline system operated by a subsidiary of the Company in September 2013. The Company is cooperating with federal and state agencies involved in responding to and investigating the incident. On September 20, 2013, the Hawaii Department of Health (“DOH”) and other responding governmental agencies announced that they had officially transitioned their role from a response phase to a recovery and restoration phase. The DOH also reported on September 20, 2013 that dissolved oxygen and pH levels in the harbor and nearby Keehi Lagoon had returned to normal target levels and that there was no longer discoloration of the water in those same areas attributable to the molasses release. Keehi Lagoon was reopened to the public on September 21, 2013. | |
On October 10, 2013, the Company was served with a federal grand jury subpoena seeking documents in connection with a criminal investigation into the release of molasses into Honolulu Harbor. In addition, in April 2014, the Company received two subpoenas from the Hawaii Attorney General and written requests for information regarding the release from the following governmental agencies: (i) the DOH; (ii) the State of Hawaii Office of Hawaiian Affairs; and (iii) the U.S. Environmental Protection Agency (the “EPA”) (Region IX). | |
On January 29, 2015, the Company resolved the federal criminal investigation with the U.S. Attorney for the District of Hawaii by pleading guilty to two misdemeanor violations of the Rivers and Harbors Act of 1899 arising from the molasses release and paying $1.0 million, comprised of a $0.4 million fine and restitution payments of $0.6 million to community organizations involved in the protection of Hawaii’s shoreline and ocean resources. In addition, on February 24, 2015, the EPA informed the Company that it will not seek to debar MTI and its affiliates from obtaining future U.S. government contracts. | |
The Company has not yet resolved any potential civil claims by other governmental agencies arising out of the molasses release. However, except with respect to the matters discussed above, government agencies have not initiated any legal actions in connection with the release of molasses. Therefore, the Company is not able to estimate the future costs, penalties, damages or expenses that it may incur related to the incident. As a result, at this time no assurance can be given that the impact of the incident on the Company’s financial position, results of operations, or cash flows will not be material. The Company continues to respond to governmental requests for information, and is engaging in dialogue with governmental agencies in order to reasonably resolve these matters. | |
In addition to the molasses release discussed above, the Company’s shipping business has certain other risks that could result in expenditures for environmental remediation. The Company believes that based on all information available to it, the Company is currently in compliance, in all material respects, with applicable environmental laws and regulations. | |
The Company and its subsidiaries are parties to, or may be contingently liable in connection with other legal actions arising in the normal course of their businesses, the outcomes of which, in the opinion of management after consultation with counsel, would not have a material effect on the Company’s financial condition, results of operations, or cash flows. | |
EARNINGS_PER_SHARE
EARNINGS PER SHARE | 3 Months Ended | |||||||||||||||||
Mar. 31, 2015 | ||||||||||||||||||
EARNINGS PER SHARE | ||||||||||||||||||
EARNINGS PER SHARE | ||||||||||||||||||
8.EARNINGS PER SHARE | ||||||||||||||||||
The number of shares used to compute basic and diluted earnings per share for the three-months periods ended March 31, 2015 and 2014, is as follows (in millions, except per share data): | ||||||||||||||||||
Three-Months Ended March 31, 2015 | Three-Months Ended March 31, 2014 | |||||||||||||||||
Weighted | Per | Weighted | Per | |||||||||||||||
Average | Common | Average | Common | |||||||||||||||
Net | Common | Share | Net | Common | Share | |||||||||||||
Income | Shares | Amount | Income | Shares | Amount | |||||||||||||
Basic: | $ | 25 | 43.4 | $ | 0.58 | $ | 3.4 | 42.9 | $ | 0.08 | ||||||||
Effect of dilutive securities | 0.5 | (0.1 | ) | 0.4 | — | |||||||||||||
Diluted: | $ | 25 | 43.9 | $ | 0.57 | $ | 3.4 | 43.3 | $ | 0.08 | ||||||||
Basic earnings per share are determined by dividing net income by the weighted-average common shares outstanding during the period. The calculation of diluted earnings per share includes the dilutive effect of unexercised non-qualified stock options and non-vested restricted stock units. | ||||||||||||||||||
The computation of weighted average dilutive shares outstanding excludes certain non-qualified stock options to purchase shares of common stock where the options’ exercise prices were greater than the average market price of the Company’s common stock for the periods presented and, therefore, the effect would be anti-dilutive. | ||||||||||||||||||
FAIR_VALUE_MEASUREMENTS
FAIR VALUE MEASUREMENTS | 3 Months Ended | |||||||||||||
Mar. 31, 2015 | ||||||||||||||
FAIR VALUE MEASUREMENTS | ||||||||||||||
FAIR VALUE MEASUREMENTS | ||||||||||||||
9.FAIR VALUE MEASUREMENTS | ||||||||||||||
The Company values its financial instruments based on the fair value hierarchy of valuation techniques for fair value measurements. Level 1 inputs are unadjusted, quoted prices in active markets for identical assets or liabilities at the measurement date. Level 2 inputs include quoted prices for similar assets and liabilities in active markets and inputs other than quoted prices observable for the asset or liability. Level 3 inputs are unobservable inputs for the asset or liability. If the technique used to measure fair value includes inputs from multiple levels of the fair value hierarchy, the lowest level of significant input determines the placement of the entire fair value measurement in the hierarchy. | ||||||||||||||
The Company uses Level 1 inputs for the fair values of its cash equivalents and Level 2 inputs for its long-term debt. The fair values of cash and cash equivalents, receivables and short-term borrowings approximate their carrying values due to the short-term nature of the instruments. The fair value of the Company’s debt is calculated based upon interest rates available for debt with terms and maturities similar to the Company’s existing debt arrangements. | ||||||||||||||
The carrying value and fair value of the Company’s financial instruments as of March 31, 2015 and December 31, 2014 are as follows (in millions): | ||||||||||||||
Carrying Value at | Quoted Prices in | Significant | Significant | |||||||||||
Active Markets | Observable | Unobservable | ||||||||||||
(Level 1) | Inputs (Level 2) | Inputs (Level 3) | ||||||||||||
March 31, 2015 | Fair Value Measurements at March 31, 2015 | |||||||||||||
Cash and cash equivalents | $ | 325.8 | $ | 325.8 | $ | — | $ | — | ||||||
Accounts receivable, net | 201.8 | — | 201.8 | — | ||||||||||
Fixed rate debt | 371.2 | — | 397.3 | — | ||||||||||
Carrying Value at | Fair Value Measurements at December 31, 2014 | |||||||||||||
December 31, 2014 | ||||||||||||||
Cash and cash equivalents | $ | 293.4 | $ | 293.4 | $ | — | $ | — | ||||||
Accounts receivable, net | 197.6 | — | 197.6 | — | ||||||||||
Fixed rate debt | 373.6 | — | 395.7 | — | ||||||||||
REPORTABLE_SEGMENTS
REPORTABLE SEGMENTS | 3 Months Ended | |||||||
Mar. 31, 2015 | ||||||||
REPORTABLE SEGMENTS | ||||||||
REPORTABLE SEGMENTS | ||||||||
10.REPORTABLE SEGMENTS | ||||||||
The Company consists of two segments, ocean transportation and logistics, which are further described in Note 1. Reportable segments are measured based on operating income, exclusive of interest expense and income taxes. In arrangements where the customer purchases ocean transportation and logistics services, the revenues are allocated to each reportable segment based upon the contractual amounts for each type of service. | ||||||||
Segment results for the three-months periods ended March 31, 2015 and 2014 were as follows (in millions): | ||||||||
Three-Months Ended | ||||||||
March 31 | ||||||||
2015 | 2014 | |||||||
Revenue: | ||||||||
Ocean Transportation | $ | 305.5 | $ | 294.6 | ||||
Logistics | 92.7 | 97.9 | ||||||
Total Revenue | $ | 398.2 | $ | 392.5 | ||||
Operating Income: | ||||||||
Ocean Transportation | $ | 43.9 | $ | 9.4 | ||||
Logistics | 1 | 0.5 | ||||||
Total Operating Income | 44.9 | 9.9 | ||||||
Interest expense, net | (4.3 | ) | (4.1 | ) | ||||
Income before Income Taxes | 40.6 | 5.8 | ||||||
Income taxes | (15.6 | ) | (2.4 | ) | ||||
Net Income | $ | 25 | $ | 3.4 | ||||
SIGNIFICANT_ACCOUNTING_POLICIE1
SIGNIFICANT ACCOUNTING POLICIES (Policies) | 3 Months Ended |
Mar. 31, 2015 | |
SIGNIFICANT ACCOUNTING POLICIES | |
Basis of Presentation | |
Basis of Presentation: The condensed consolidated financial statements are unaudited. Due to the nature of the Company’s operations, the results for interim periods are not necessarily indicative of results to be expected for the year. These condensed consolidated financial statements reflect all normal recurring adjustments that are, in the opinion of management, necessary for fair presentation of the results of the interim periods, and do not include all of the information and footnotes required by U.S. generally accepted accounting principles for complete financial statements. The condensed consolidated financial statements should be read in conjunction with the consolidated financial statements and notes thereto included in the Company’s Annual Report filed on Form 10-K for the year ended December 31, 2014. | |
Fiscal Period | |
Fiscal Period: The period end for Matson, Inc. is March 31. The period end for MatNav occurred on the last Friday in March, except for Matson Logistics Warehousing for which the period closed on March 31. | |
Significant Accounting Policies | |
Significant Accounting Policies: The Company’s significant accounting policies are described in Note 2 to the consolidated financial statements included in Item 8 of the Company’s Annual Report filed on Form 10-K for the year ended December 31, 2014. | |
CAPITAL_CONSTRUCTION_FUND_Tabl
CAPITAL CONSTRUCTION FUND (Tables) | 3 Months Ended | |||||||
Mar. 31, 2015 | ||||||||
CAPITAL CONSTRUCTION FUND | ||||||||
Schedule of assigned eligible accounts receivable, and on deposit to the Capital Construction Fund | ||||||||
At March 31, 2015 and December 31, 2014, the Company had the following amounts of assigned eligible accounts receivable, and on deposit to the Capital Construction Fund (“CCF”) (in millions): | ||||||||
March 31 | December 31 | |||||||
2015 | 2014 | |||||||
CCF on deposit | $ | 27.5 | $ | 27.5 | ||||
Eligible accounts receivable assigned to CCF | 150.9 | 150.7 | ||||||
Total | $ | 178.4 | $ | 178.2 | ||||
DEBT_Tables
DEBT (Tables) | 3 Months Ended | |||||||
Mar. 31, 2015 | ||||||||
DEBT | ||||||||
Schedule of debt | ||||||||
At March 31, 2015 and December 31, 2014, the Company’s debt consisted of the following (in millions): | ||||||||
March 31 | December 31 | |||||||
2015 | 2014 | |||||||
Term Loans: | ||||||||
5.79%, payable through 2020 | $ | 38.5 | $ | 38.5 | ||||
3.66%, payable through 2023 | 77.5 | 77.5 | ||||||
4.16%, payable through 2027 | 55 | 55 | ||||||
4.31%, payable through 2032 | 37.5 | 37.5 | ||||||
4.35%, payable through 2044 | 100 | 100 | ||||||
Title XI Bonds: | ||||||||
5.34%, payable through 2028 | 29.7 | 30.8 | ||||||
5.27%, payable through 2029 | 31.9 | 33 | ||||||
Capital leases | 1.1 | 1.3 | ||||||
Total Debt | 371.2 | 373.6 | ||||||
Less current portion | (21.6 | ) | (21.6 | ) | ||||
Total Long-term Debt | $ | 349.6 | $ | 352 | ||||
PENSION_AND_POSTRETIREMENT_PLA1
PENSION AND POST-RETIREMENT PLANS (Tables) | 3 Months Ended | |||||||||||||
Mar. 31, 2015 | ||||||||||||||
PENSION AND POST-RETIREMENT PLANS | ||||||||||||||
Components of net periodic benefit cost and benefit | ||||||||||||||
The following table provides the components of net periodic benefit cost for the Plans for the three-months periods ended March 31, 2015 and 2014 (in millions): | ||||||||||||||
Pension Benefits | Post-retirement Benefits | |||||||||||||
March 31 | March 31 | |||||||||||||
2015 | 2014 | 2015 | 2014 | |||||||||||
Service cost | $ | 0.9 | $ | 0.8 | $ | 0.4 | $ | 0.3 | ||||||
Interest cost | 2.4 | 2.4 | 0.6 | 0.6 | ||||||||||
Expected return on plan assets | (3.5 | ) | (3.5 | ) | — | — | ||||||||
Amortization of net loss | 1.6 | 0.8 | 0.6 | 0.1 | ||||||||||
Amortization of prior service cost | (0.6 | ) | (0.6 | ) | — | — | ||||||||
Net Periodic Cost (Benefit) | $ | 0.8 | $ | (0.1 | ) | $ | 1.6 | $ | 1 | |||||
EARNINGS_PER_SHARE_Tables
EARNINGS PER SHARE (Tables) | 3 Months Ended | |||||||||||||||||
Mar. 31, 2015 | ||||||||||||||||||
EARNINGS PER SHARE | ||||||||||||||||||
Schedule of basic and diluted earnings per share | ||||||||||||||||||
The number of shares used to compute basic and diluted earnings per share for the three-months periods ended March 31, 2015 and 2014, is as follows (in millions, except per share data): | ||||||||||||||||||
Three-Months Ended March 31, 2015 | Three-Months Ended March 31, 2014 | |||||||||||||||||
Weighted | Per | Weighted | Per | |||||||||||||||
Average | Common | Average | Common | |||||||||||||||
Net | Common | Share | Net | Common | Share | |||||||||||||
Income | Shares | Amount | Income | Shares | Amount | |||||||||||||
Basic: | $ | 25 | 43.4 | $ | 0.58 | $ | 3.4 | 42.9 | $ | 0.08 | ||||||||
Effect of dilutive securities | 0.5 | (0.1 | ) | 0.4 | — | |||||||||||||
Diluted: | $ | 25 | 43.9 | $ | 0.57 | $ | 3.4 | 43.3 | $ | 0.08 | ||||||||
FAIR_VALUE_MEASUREMENTS_Tables
FAIR VALUE MEASUREMENTS (Tables) | 3 Months Ended | |||||||||||||
Mar. 31, 2015 | ||||||||||||||
FAIR VALUE MEASUREMENTS | ||||||||||||||
Schedule of fair value measurement | ||||||||||||||
The carrying value and fair value of the Company’s financial instruments as of March 31, 2015 and December 31, 2014 are as follows (in millions): | ||||||||||||||
Carrying Value at | Quoted Prices in | Significant | Significant | |||||||||||
Active Markets | Observable | Unobservable | ||||||||||||
(Level 1) | Inputs (Level 2) | Inputs (Level 3) | ||||||||||||
March 31, 2015 | Fair Value Measurements at March 31, 2015 | |||||||||||||
Cash and cash equivalents | $ | 325.8 | $ | 325.8 | $ | — | $ | — | ||||||
Accounts receivable, net | 201.8 | — | 201.8 | — | ||||||||||
Fixed rate debt | 371.2 | — | 397.3 | — | ||||||||||
Carrying Value at | Fair Value Measurements at December 31, 2014 | |||||||||||||
December 31, 2014 | ||||||||||||||
Cash and cash equivalents | $ | 293.4 | $ | 293.4 | $ | — | $ | — | ||||||
Accounts receivable, net | 197.6 | — | 197.6 | — | ||||||||||
Fixed rate debt | 373.6 | — | 395.7 | — | ||||||||||
REPORTABLE_SEGMENTS_Tables
REPORTABLE SEGMENTS (Tables) | 3 Months Ended | |||||||
Mar. 31, 2015 | ||||||||
REPORTABLE SEGMENTS | ||||||||
Schedule of reportable segment information | ||||||||
Segment results for the three-months periods ended March 31, 2015 and 2014 were as follows (in millions): | ||||||||
Three-Months Ended | ||||||||
March 31 | ||||||||
2015 | 2014 | |||||||
Revenue: | ||||||||
Ocean Transportation | $ | 305.5 | $ | 294.6 | ||||
Logistics | 92.7 | 97.9 | ||||||
Total Revenue | $ | 398.2 | $ | 392.5 | ||||
Operating Income: | ||||||||
Ocean Transportation | $ | 43.9 | $ | 9.4 | ||||
Logistics | 1 | 0.5 | ||||||
Total Operating Income | 44.9 | 9.9 | ||||||
Interest expense, net | (4.3 | ) | (4.1 | ) | ||||
Income before Income Taxes | 40.6 | 5.8 | ||||||
Income taxes | (15.6 | ) | (2.4 | ) | ||||
Net Income | $ | 25 | $ | 3.4 | ||||
DESCRIPTION_OF_THE_BUSINESS_De
DESCRIPTION OF THE BUSINESS (Details) (USD $) | 0 Months Ended | 3 Months Ended |
In Millions, unless otherwise specified | Mar. 22, 2015 | Mar. 31, 2015 |
facility | ||
Horizon Acquisition | ||
Acquisition Value | $456 | |
Ocean Transportation | SSAT | ||
DESCRIPTION OF THE BUSINESS | ||
Ownership interest in SSAT (as a percent) | 35.00% | |
Number of terminal facilities on which SSAT provides terminal and stevedoring services to Matnav and numerous carriers | 6 |
CAPITAL_CONSTRUCTION_FUND_Deta
CAPITAL CONSTRUCTION FUND (Detail) (USD $) | 3 Months Ended | 12 Months Ended |
In Millions, unless otherwise specified | Mar. 31, 2015 | Dec. 31, 2014 |
CAPITAL CONSTRUCTION FUND | ||
CCF on deposit | $27.50 | $27.50 |
Eligible accounts receivable assigned to CCF | 150.9 | 150.7 |
Total | 178.4 | 178.2 |
Cash Deposits Into CCF | $27.50 | $27.50 |
DEBT_Details
DEBT (Details) (USD $) | Mar. 31, 2015 | Dec. 31, 2014 |
In Millions, unless otherwise specified | ||
Debt | ||
Capital leases | $1.10 | $1.30 |
Total Debt | 371.2 | 373.6 |
Less current portion | -21.6 | -21.6 |
Total Long-term debt | 349.6 | 352 |
5.79%, payable through 2020 | ||
Debt | ||
Total Debt | 38.5 | 38.5 |
Interest rate (as a percent) | 5.79% | 5.79% |
3.66%, payable through 2023 | ||
Debt | ||
Total Debt | 77.5 | 77.5 |
Interest rate (as a percent) | 3.66% | 3.66% |
4.16%, payable through 2027 | ||
Debt | ||
Total Debt | 55 | 55 |
Interest rate (as a percent) | 4.16% | 4.16% |
4.31%, payable through 2032 | ||
Debt | ||
Total Debt | 37.5 | 37.5 |
Interest rate (as a percent) | 4.31% | 4.31% |
4.35%, payable through 2044 | ||
Debt | ||
Total Debt | 100 | 100 |
Interest rate (as a percent) | 4.35% | 4.35% |
5.34%, payable through 2028 | ||
Debt | ||
Total Debt | 29.7 | 30.8 |
Interest rate (as a percent) | 5.34% | 5.34% |
5.27%, payable through 2029 | ||
Debt | ||
Total Debt | $31.90 | $33 |
Interest rate (as a percent) | 5.27% | 5.27% |
PENSION_AND_POSTRETIREMENT_PLA2
PENSION AND POST-RETIREMENT PLANS (Details) (USD $) | 3 Months Ended | 0 Months Ended | |
In Millions, unless otherwise specified | Mar. 31, 2015 | Mar. 31, 2014 | Apr. 10, 2015 |
Pension Benefits | |||
Components of Net Periodic Benefit Cost | |||
Service cost | $0.90 | $0.80 | |
Interest cost | 2.4 | 2.4 | |
Expected return on plan assets | -3.5 | -3.5 | |
Amortization of net loss | 1.6 | 0.8 | |
Amortization of prior service cost | -0.6 | -0.6 | |
Net Periodic Cost (Benefit) | 0.8 | -0.1 | |
Full year expected cash contributions to pension plan | 6.2 | ||
Pension Benefits | Subsequent event | |||
Components of Net Periodic Benefit Cost | |||
Initial contribution | 1.6 | ||
Post-retirement Benefits | |||
Components of Net Periodic Benefit Cost | |||
Service cost | 0.4 | 0.3 | |
Interest cost | 0.6 | 0.6 | |
Amortization of net loss | 0.6 | 0.1 | |
Net Periodic Cost (Benefit) | $1.60 | $1 |
SHAREBASED_COMPENSATION_Detail
SHARE-BASED COMPENSATION (Details) (Time Based And Performance Based Shares, Employee, USD $) | 3 Months Ended | |
In Millions, except Share data, unless otherwise specified | Mar. 31, 2015 | Mar. 31, 2014 |
Time Based And Performance Based Shares | Employee | ||
Share-based compensation | ||
Shares granted | 226,000 | |
Weighted average grant date fair value (in dollars per share) | $35.28 | |
Total stock-based compensation cost | $2.80 | $1.80 |
Total unrecognized compensation cost | $14.80 | |
Unrecognized compensation cost over weighted-average period | 2 years 2 months 12 days |
CONTINGENCIES_Details
CONTINGENCIES (Details) (USD $) | 0 Months Ended | |||
In Millions, unless otherwise specified | Feb. 20, 2015 | Feb. 20, 2015 | Jan. 29, 2015 | Apr. 30, 2014 |
item | item | item | ||
Employee Matters | ||||
Term of collective bargaining agreement | 5 years | |||
Number of ports | 29 | |||
Environmental Matters | ||||
Number of subpoenas received from the Hawaii Attorney General | 2 | |||
Number of counts of violating the refuse act accepted | 2 | |||
Penalty payment | $1 | |||
Penalty payment in the form of a fine | 0.4 | |||
Penalty payment in the form of a community restitution payment | $0.60 |
EARNING_PER_SHARE_Details
EARNING PER SHARE (Details) (USD $) | 3 Months Ended | |
In Millions, except Per Share data, unless otherwise specified | Mar. 31, 2015 | Mar. 31, 2014 |
Net Income | ||
Net Income, Basic | $25 | $3.40 |
Net Income, Diluted | $25 | $3.40 |
Weighted Average Common Shares | ||
Basic (in shares) | 43.4 | 42.9 |
Effect of dilutive securities (in shares) | 0.5 | 0.4 |
Diluted (in shares) | 43.9 | 43.3 |
Per Common Share Amount, Basic | ||
Net income (in dollars per share) | $0.58 | $0.08 |
Per Common Share Amount, Diluted | ||
Effect of dilutive securities (in dollars per shares) | ($0.10) | |
Net income (in dollars per share) | $0.57 | $0.08 |
FAIR_VALUE_MEASUREMENTS_Detail
FAIR VALUE MEASUREMENTS (Details) (USD $) | Mar. 31, 2015 | Dec. 31, 2014 |
In Millions, unless otherwise specified | ||
Carrying value | ||
Fair value of financial instruments | ||
Cash and cash equivalents | $325.80 | $293.40 |
Accounts receivable, net | 201.8 | 197.6 |
Fixed rate debt | 371.2 | 373.6 |
Fair Value Measurement | Quoted Prices in Active Markets (Level 1) | ||
Fair value of financial instruments | ||
Cash and cash equivalents | 325.8 | 293.4 |
Fair Value Measurement | Significant Observable Inputs (Level 2) | ||
Fair value of financial instruments | ||
Accounts receivable, net | 201.8 | 197.6 |
Fixed rate debt | $397.30 | $395.70 |
REPORTABLE_SEGMENTS_Details
REPORTABLE SEGMENTS (Details) (USD $) | 3 Months Ended | |
In Millions, unless otherwise specified | Mar. 31, 2015 | Mar. 31, 2014 |
segment | ||
Segment results | ||
Number of segments | 2 | |
Revenue | $398.20 | $392.50 |
Operating Income | 44.9 | 9.9 |
Interest expense, net | -4.3 | -4.1 |
Income before income taxes | 40.6 | 5.8 |
Income tax expense | -15.6 | -2.4 |
Net Income | 25 | 3.4 |
Ocean Transportation | ||
Segment results | ||
Revenue | 305.5 | 294.6 |
Operating Income | 43.9 | 9.4 |
Logistics | ||
Segment results | ||
Revenue | 92.7 | 97.9 |
Operating Income | $1 | $0.50 |