Document and Entity Information
Document and Entity Information - Jun. 30, 2015 - shares | Total |
Document and Entity Information | |
Entity Registrant Name | Matson, Inc. |
Entity Central Index Key | 3,453 |
Document Type | 10-Q |
Document Period End Date | Jun. 30, 2015 |
Amendment Flag | false |
Current Fiscal Year End Date | --12-31 |
Entity Current Reporting Status | Yes |
Entity Filer Category | Large Accelerated Filer |
Entity Common Stock, Shares Outstanding | 43,527,032 |
Document Fiscal Year Focus | 2,015 |
Document Fiscal Period Focus | Q2 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Income and Comprehensive Income - USD ($) shares in Millions, $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2015 | Jun. 30, 2014 | Jun. 30, 2015 | Jun. 30, 2014 | |
Operating Revenue: | ||||
Ocean Transportation | $ 346.7 | $ 321.1 | $ 652.2 | $ 615.7 |
Logistics | 100.9 | 115.3 | 193.6 | 213.2 |
Total Operating Revenue | 447.6 | 436.4 | 845.8 | 828.9 |
Costs and Expenses: | ||||
Operating costs | 364.5 | 366.9 | 682.7 | 714.7 |
Equity in income of terminal joint venture | (5.2) | (2.1) | (8.6) | (2.3) |
Selling, general and administrative | 54.6 | 35.9 | 93.1 | 70.9 |
Total Costs and Expenses | 413.9 | 400.7 | 767.2 | 783.3 |
Operating Income | 33.7 | 35.7 | 78.6 | 45.6 |
Interest expense | (4.6) | (4.5) | (8.9) | (8.6) |
Income before Income Taxes | 29.1 | 31.2 | 69.7 | 37 |
Income tax expense | (19.2) | (13.1) | (34.8) | (15.5) |
Net Income | 9.9 | 18.1 | 34.9 | 21.5 |
Other Comprehensive Income (Loss), Net of Income Taxes: | ||||
Net Income | 9.9 | 18.1 | 34.9 | 21.5 |
Other Comprehensive Income (Loss): | ||||
Net loss in prior service cost | (0.2) | |||
Amortization of prior service cost included in net periodic pension cost | (0.2) | (0.2) | (0.6) | (0.5) |
Amortization of net gain included in net periodic pension cost | 0.9 | 0.7 | 2.3 | 1.4 |
Foreign currency translation adjustment | 0.6 | 0.7 | (0.1) | |
Total Other Comprehensive Income | 1.3 | 0.5 | 2.2 | 0.8 |
Comprehensive Income | $ 11.2 | $ 18.6 | $ 37.1 | $ 22.3 |
Basic Earnings Per Share: | ||||
Basic Earnings Per Share (in dollars per share) | $ 0.23 | $ 0.42 | $ 0.80 | $ 0.50 |
Diluted Earnings Per Share: | ||||
Diluted Earnings Per Share (in dollars per share) | $ 0.23 | $ 0.42 | $ 0.79 | $ 0.50 |
Weighted Average Number of Shares Outstanding: | ||||
Basic (in shares) | 43.5 | 43 | 43.4 | 43 |
Diluted (in shares) | 44 | 43.2 | 43.9 | 43.2 |
Dividends: | ||||
Cash Dividends Per Share (in dollars per share) | $ 0.17 | $ 0.16 | $ 0.34 | $ 0.32 |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets - USD ($) $ in Millions | Jun. 30, 2015 | Dec. 31, 2014 |
Current Assets: | ||
Cash and cash equivalents | $ 15.8 | $ 293.4 |
Accounts receivable, net | 223.6 | 197.6 |
Deferred income taxes | 42.1 | 8 |
Prepaid expenses and other assets | 41.4 | 20.5 |
Total current assets | 322.9 | 519.5 |
Investment in terminal joint venture | 68.9 | 64.4 |
Property and equipment, net | 839.2 | 691.2 |
Intangible assets, net | 141.7 | 2.5 |
Goodwill | 247.1 | 27.4 |
Capital Construction Fund deposits | 27.5 | 27.5 |
Other long-term assets | 78.9 | 69.3 |
Total assets | 1,726.2 | 1,401.8 |
Current Liabilities: | ||
Current portion of debt | 24.3 | 21.6 |
Accounts payable | 156.8 | 133.2 |
Payroll and vacation benefits | 21.4 | 17.3 |
Uninsured liabilities | 26.9 | 24.5 |
Accrued and other liabilities | 77.3 | 26.9 |
Total current liabilities | 306.7 | 223.5 |
Long-term Liabilities: | ||
Long-term debt | 492.3 | 352 |
Deferred income taxes | 325.2 | 308.4 |
Employee benefit plans | 117.8 | 118.6 |
Uninsured and other liabilities | 38.8 | 35.5 |
Multi-employer withdrawal liabilities | 58.5 | |
Total long-term liabilities | $ 1,032.6 | $ 814.5 |
Commitments and Contingencies (Note 8) | ||
Shareholders' Equity: | ||
Capital stock | $ 32.4 | $ 32.4 |
Additional paid in capital | 283.7 | 274.9 |
Accumulated other comprehensive loss | (51.1) | (53.3) |
Retained earnings | 121.9 | 109.8 |
Total shareholders' equity | 386.9 | 363.8 |
Total liabilities and shareholders' equity | $ 1,726.2 | $ 1,401.8 |
Condensed Consolidated Stateme4
Condensed Consolidated Statements of Cash Flows - USD ($) $ in Millions | 6 Months Ended | |
Jun. 30, 2015 | Jun. 30, 2014 | |
Cash Flows From Operating Activities: | ||
Net income | $ 34.9 | $ 21.5 |
Reconciling adjustments: | ||
Depreciation and amortization | 35.6 | 35.2 |
Deferred income taxes | 20.7 | 3.6 |
Share-based compensation expense | 7.6 | 3.7 |
Equity in income of terminal joint venture | (8.6) | (2.3) |
Distribution from terminal joint venture | 3.5 | |
Other | 3 | (1.5) |
Changes in assets and liabilities: | ||
Accounts receivable | 5.8 | (14.4) |
Deferred dry-docking payments | (12.3) | (11.8) |
Deferred dry-docking amortization | 11.1 | 10.6 |
Prepaid expenses and other assets | (12.6) | (7) |
Accounts payable and accrued liabilities | (1.9) | 7 |
Other liabilities | 16.1 | 4.6 |
Net cash provided by operating activities | 102.9 | 49.2 |
Cash Flows From Investing Activities: | ||
Capital expenditures | (12.2) | (20.2) |
Proceeds from disposal of property and equipment | 1.6 | 1.2 |
Deposits into Capital Construction Fund | (2.2) | (2.2) |
Withdrawals from Capital Construction Fund | 2.2 | 2.2 |
Payments for Horizon's common stock, net of cash acquired | (28.7) | |
Net cash used in investing activities | (39.3) | (19) |
Cash Flows From Financing Activities: | ||
Proceeds from issuance of debt | 175 | 100 |
Payments of Horizon debt and redeemed warrants | (467.5) | |
Payments of other debt | (33.4) | (6.2) |
Proceeds from issuance of capital stock | 2.5 | 0.8 |
Tax withholding related to net share settlements of restricted stock units | (2.9) | (1.7) |
Dividends paid | (14.9) | (13.9) |
Net cash (used in) provided by financing activities | (341.2) | 79 |
Net (decrease) increase in cash and cash equivalents | (277.6) | 109.2 |
Cash and cash equivalents, beginning of the period | 293.4 | 114.5 |
Cash and cash equivalents, end of the period | 15.8 | 223.7 |
Supplemental Cash Flow Information: | ||
Interest paid | 8.6 | 6.6 |
Income tax paid | 27 | 12.7 |
Non-cash Information: | ||
Capital expenditures included in accounts payable and accrued liabilities | 2.9 | 2.1 |
Accrued dividend | $ 7.9 | $ 7.4 |
DESCRIPTION OF THE BUSINESS
DESCRIPTION OF THE BUSINESS | 6 Months Ended |
Jun. 30, 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 domestic offshore economies of Hawaii, Alaska, and Guam, and to other island economies including Micronesia and various islands in the South Pacific. MatNav also operates a premium, expedited service from China to Long Beach, California. In addition, subsidiaries of MatNav provides container stevedoring, container equipment maintenance and other terminal services for MatNav and other ocean carriers on the Hawaii islands of Oahu, Hawaii, Maui and Kauai, and in the Alaska locations of Anchorage, Kodiak, Dutch Harbor and Akutan. The Company has a 35 percent ownership interest in SSA Terminals, LLC (“SSAT”), a joint venture between Matson Ventures, Inc., a wholly-owned subsidiary of MatNav, and SSA Ventures, Inc., a subsidiary of Carrix, Inc. SSAT provides terminal and stevedoring services to various carriers at six terminal facilities on the West Coast of the United States of America (“U.S.”), including to MatNav at several of those facilities. Matson records its share of income or 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”), 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; and warehousing and distribution services. |
SIGNIFICANT ACCOUNTING POLICIES
SIGNIFICANT ACCOUNTING POLICIES | 6 Months Ended |
Jun. 30, 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. covered by this report is June 30, 2015. The period end for MatNav and its subsidiaries covered by this report occurred on the last Friday in June, or June 26, 2015. 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. Income Taxes: During the three months ended June 30, 2015, the Company recorded a non-cash adjustment to income tax expense to write off long-term deferred tax assets that are not expected to reverse in future periods. The impact of the out-of-period adjustment to the three and six months ended June 30, 2015 was to increase tax expense by $4.8 million and a corresponding decrease in long-term deferred tax assets , and resulted in a decrease of earnings per-share by $0.11 . The Company determined that the adjustment was not material to the current or previously reported periods. |
BUSINESS COMBINATION
BUSINESS COMBINATION | 6 Months Ended |
Jun. 30, 2015 | |
BUSINESS COMBINATION | |
BUSINESS COMBINATION | 3. BUSINESS COMBINATION Acquisition: On November 11, 2014, MatNav entered into a definitive merger agreement with Horizon Lines, Inc. (“Horizon”) pursuant to which MatNav would acquire Horizon’s Alaska operations and assume all of Horizon’s non-Hawaii assets and liabilities (the “Acquisition”). Horizon’s Alaska operations include four Jones Act qualified containerships and related terminal operations at the Ports of Anchorage, Dutch Harbor, Kodiak and Akutan. Also on November 11, 2014, Horizon agreed to sell its Hawaii operations, and related assets and liabilities to The Pasha Group (“Pasha”) for $141.5 million (the “Pasha Transaction”), and announced the termination of its Puerto Rico operations during the first quarter of 2015. The Acquisition and the Pasha Transaction were completed on May 29, 2015 (the “Effective Date”). On the Effective Date, a subsidiary of the Company merged with Horizon and as a result, the Company acquired 100 percent of Horizon’s outstanding shares and warrants for a cash price of $0.72 per-share. The Company also acquired Horizon’s assets and assumed its liabilities including Horizon’s debt (net of proceeds from the Pasha Transaction). Immediately following the Acquisition, the Company repaid the assumed debt which included accrued interest and breakage fees, and redeemed all of Horizon’s outstanding warrants. Total cash consideration paid by the Company is as follows: (in millions) Cash Consideration May 29, 2015 Common shares $ Warrants Horizon’s debt (including accrued interest and breakage fees) Total cash consideration $ Horizon’s assets acquired and liabilities assumed were recorded based on fair value estimates as of the Effective Date with the remaining unallocated purchase price recorded as goodwill. Such fair value estimates require significant judgment including the valuation of property and equipment, and intangible assets, the valuation of debt and warrants, the assumptions used in calculating the multi-employer withdrawal pension liabilities, and the determination of net deferred tax assets. The Company’s fair value estimates are subject to revision pending the finalization of information from the Trustee of the multi-employer pension plan and the Company’s final fair value analysis, and consequently, the final fair value amounts may be significantly different from those reflected in the Company’s Condensed Consolidated Financial Statements as of June 30, 2015. Estimated fair values assigned to Horizon’s assets acquired and liabilities assumed at the Effective Date were as follows: (in millions) Estimated Fair Values May 29, 2015 Cash and cash equivalents $ Accounts receivable Other current assets Deferred tax assets, net Property and equipment Intangibles - Customer relationships Other long-term assets Accounts payable ) Accruals and other current liabilities ) Multi-employer withdrawal liabilities ) Debt, capital lease obligations and warrants ) Total identifiable assets less liabilities ) Total cash paid for common shares ) Goodwill $ Deferred tax assets, net: The Company recorded Horizon’s deferred tax assets and liabilities net of any change of ownership limitations. The Company also recorded a valuation allowance against the portions of deferred tax assets that the Company determined may not be realized in future periods. Property and equipment, and intangibles: Property and equipment of $171.0 million includes the acquisition of four Jones Act qualified containerships, containers, chassis, and other property and terminal equipment. The Company also recorded intangible assets of $140.0 million related to customer relationships, which will be amortized over 21 years. Goodwill: The Company recorded goodwill of $219.7 million arising from the Acquisition , which represents the excess of the fair value of the consideration paid by the Company over the fair value of the underlying identifiable Horizon assets acquired and liabilities assumed. In accordance with ASC 805, Business Combination , goodwill will not be amortized, but instead will be tested for impairment at least annually, and whenever events or circumstances have occurred that may indicate a possible impairment. Goodwill arises as a result of several factors. The Acquisition extends the geographical reach of the Company’s ocean transportation services to Alaska, and represents an extension of the Company’s existing platform on the U.S. West Coast. The Acquisition also provides an assembled workforce of experienced personnel with knowledge of the Alaska shipping industry and of its customers. The Company expects to leverage its existing infrastructure and operations to integrate the Alaska operations and eliminate duplicative corporate overhead costs. Multi-employer withdrawal liabilities: Horizon’s decision to terminate its Puerto Rico service during the first quarter of 2015 resulted in mass withdrawal from the multi-employer ILA-PRSSA Pension Fund. Horizon’s current and long-term liabilities related to the multi-employer pension plan of $60.6 million , included in assumed liabilities , were based upon the expected future undiscounted payments of $73.9 million to be paid over approximately 18 years, discounted using the risk-free U.S. Treasury rate. Expected annual cash outflows related to the multi-employer pension plan are as follows (in millions): Year ended June 30 (in millions): Repayments 2016 $ 2017 2018 2019 2020 Thereafter Total $ Debt and Warrants: The Company repaid debt, including accrued interest and breakage fees, and redeemed all of Horizon’s outstanding warrants for a total of $466.0 million during the period ended June 30, 2015, net of proceeds from the Pasha Transaction. Remaining debt of $1.2 million at June 30, 2015 consisted of capital lease obligations. Condensed Consolidated Statements of Income and Comprehensive Income: The amounts of revenue and net loss before income taxes from Horizon’s financial results included in the Company’s Condensed Consolidated Statements of Income and Comprehensive Income for the three and six months ended June 30, 2015 were $24.5 million and $2.6 million, respectively. Selling, general and administrative expenses from Horizon’s financial results included in the Company’s Condensed Consolidated Statements of Income and Comprehensive Income for the three and six months ended June 30, 2015 included $14.7 million and $15.6 million, respectively, of expenses incurred during these periods, primarily composed of transaction costs, integration costs and incremental corporate overhead expenses related to the Acquisition. Pro Forma Financial Information (Unaudited): The following unaudited pro forma financial information presents the combined operating results of the Company and those of Horizon excluding its Hawaii operations, as if the Acquisition had been completed at the beginning of each period presented below. The unaudited pro forma financial information includes the accounting effects of the business combination, including the amortization of intangible assets, depreciation of property and equipment, and interest expense. The unaudited pro forma financial information is presented for informational purposes only and is not indicative of the result of operations that would have been achieved if the Acquisition had taken place at the beginning of the periods presented, nor should it be taken as an indication of our future consolidated results of operations. In addition, pro forma information excludes the impact of restructuring activities implemented by the Company since completion of the Acquisition. (unaudited) (unaudited) Three Months Ended Six Months Ended June 30 June 30 (in millions, except per-share amount) 2015 2014 2015 2014 Pro forma combined: Operating Revenue $ $ $ $ Net income from continuing operations $ $ $ $ Basic Earnings per share: $ $ $ $ Diluted Earnings per share: $ $ $ $ Weighted Average Number of Shares Outstanding: Basic Diluted |
CAPITAL CONSTRUCTION FUND
CAPITAL CONSTRUCTION FUND | 6 Months Ended |
Jun. 30, 2015 | |
CAPITAL CONSTRUCTION FUND | |
CAPITAL CONSTRUCTION FUND | 4. CAPITAL CONSTRUCTION FUND At June 30, 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): CCF Deposits and Withdrawals Eligible Accounts Receivable Assigned to CCF Total Three Months Ended June 30, 2015 : Balance at March 31, 2015 $ $ $ Deposits — — — Qualified withdrawals — — — Interest earned — Balance at June 30, 2015 $ $ $ Six Months Ended June 30, 2015 : Balance at December 31, 2014 $ $ $ Deposits — Qualified withdrawals ) — ) Interest earned — Balance at June 30, 2015 $ $ $ Due to the nature of the assignment of eligible account 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 June 30, 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 Sheets. 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 | 6 Months Ended |
Jun. 30, 2015 | |
DEBT | |
DEBT | 5. DEBT At June 30, 2015 and December 31, 2014, the Company’s debt consisted of the following (in millions): June 30 December 31 2015 2014 Term Loans: 5.79%, payable through 2020 $ $ 3.66%, payable through 2023 4.16%, payable through 2027 4.31%, payable through 2032 4.35%, payable through 2044 Title XI Bonds: 5.34%, payable through 2028 5.27%, payable through 2029 Revolving credit facility — Capital leases Total Debt Less current portion ) ) Total Long-term Debt $ $ 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. Revolving Credit Facility: On May 27, 2015, the Company borrowed $175.0 million under the revolving credit facility to fund the Acquisition, of which $152.5 million was outstanding as of June 30, 2015. Borrowings under the revolving credit facility are classified as long-term debt in the Condensed Consolidated Balance Sheet as principal payments under the revolving credit facility are not required until maturity. As of June 30, 2015, the Company had $215.9 million of availability under the revolving credit facility. The interest rate on borrowings under the revolving credit facility approximated 2.3 percent during the period ended June 30, 2015. 2015 Note Purchase Agreement: On July 30, 2015, the Company entered into a private placement note purchase agreement pursuant to which the Company expects to issue $75.0 million of 30-year senior unsecured notes (the “Notes”). The Notes will have a weighted average life of approximately 13 years and will bear interest at a rate of 3.92 percent, payable semi-annually. The Notes are expected to be issued in September 2015, subject to satisfaction of customary closing conditions. The proceeds from the Notes are expected to be used for general corporate purposes, which may include paying down the Company’s revolving credit facility. The Notes will begin to amortize in 2017, with annual principal payments of approximately $1.8 million through 2019. During the years 2020 to 2026, annual principal payments will range from approximately $1.3 million to $8.0 million. Starting in 2027, and in each year thereafter, the annual principal payments will be approximately $1.5 million. The Notes have financial and other covenants that are substantially the same as those of the Company’s outstanding senior unsecured notes. The Notes will be guaranteed by MatNav, and by certain other subsidiaries of the Company. Amendment to Revolving Credit Facility: On July 30, 2015, the Company entered into amendments to its unsecured revolving credit facility (the “Credit Facility”) and its long-term private debt note agreements (the “Notes”). The amendment to the Credit Facility increases the borrowing capacity of the Credit Facility from $375 million to $400 million, and extends the maturity date for five years to July 2020. The amendment to the Credit Facility also modifies certain pricing terms, covenants and other definitions within the agreement, and includes an uncommitted option to increase the borrowing capacity of the Credit Facility by an additional $150 million. The amendment to the Credit Facility is subject to commitment fees, letter of credit fees, and interest on borrowings based on the Company’s ratio of total debt to earnings before interest, taxes, depreciation and amortization (“EBITDA”) (the “Leverage Ratio”). Commitment fees and letter of credit fees are computed using rates tied to a sliding scale, which range from 0.15 percent to 0.30 percent, and 1.00 percent to 1.75 percent, respectively, based on the Consolidated Net Leverage Ratio, as defined within the amendment. Interest rates on borrowings are based upon the Eurodollar Rate (“LIBOR”) plus 1.00 percent to 1.75 percent using a sliding scale based on the Consolidated Net Leverage Ratio. The Company may also select an interest rate at a Base Rate as defined in the agreement, plus a margin that ranges from zero percent to 0.75 percent. The Company also entered into other amendments to its existing long-term private note agreements including modifications to certain definitions and covenants. |
PENSION AND POST-RETIREMENT PLA
PENSION AND POST-RETIREMENT PLANS | 6 Months Ended |
Jun. 30, 2015 | |
PENSION AND POST-RETIREMENT PLANS | |
PENSION AND POST-RETIREMENT PLANS | 6. 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 (benefit) for the Plans for the six months ended June 30, 2015 and 2014 (in millions): Pension Benefits Post-retirement Benefits June 30 June 30 2015 2014 2015 2014 Service cost $ $ $ $ Interest cost Expected return on plan assets ) ) — — Amortization of net gain Amortization of prior service cost ) ) — — Net periodic cost (benefit) $ $ ) $ $ 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. |
SHARE-BASED COMPENSATION
SHARE-BASED COMPENSATION | 6 Months Ended |
Jun. 30, 2015 | |
SHARE-BASED COMPENSATION | |
SHARE-BASED COMPENSATION | 7. SHARE-BASED COMPENSATION During the three months ended June 30, 2015, the Company granted approximately 20,000 in total of time-based and performance-based shares to certain of its employees at a weighted-average grant date fair value of $42.23. The number of performance shares awarded represents the amount that can be earned based upon established targets, and will ultimately depend on the Company’s performance. Total stock-based compensation cost recognized in the Condensed Consolidated Statements of Income and Comprehensive Income as a component of selling, general and administrative expenses was $4.8 million and $1.9 million for the three months ended June 30, 2015 and June 30, 2014, respectively, and $7.6 million and $3.7 million for the six months ended June 30, 2015 and June 30, 2014, respectively. Total unrecognized compensation cost related to unvested share-based compensation arrangements was $13.3 million at June 30, 2015, and is expected to be recognized over a weighted-average period of 2.0 years. Total unrecognized compensation cost may be adjusted for any unearned performance shares or forfeited shares. |
CONTINGENCIES
CONTINGENCIES | 6 Months Ended |
Jun. 30, 2015 | |
CONTINGENCIES | |
CONTINGENCIES | 8. CONTINGENCIES Environmental Matter: In September 2013, molasses was released into Honolulu Harbor from a pipeline system operated by a subsidiary of the Company. The Company cooperated 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, consisting 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, o n February 24, 2015, the EPA informed the Company that it will not seek to debar Matson Terminals Inc. and its affiliates from obtaining future U.S. government contracts. On July 29, 2015, the Company entered into a settlement agreement with the State of Hawaii settling all civil, criminal and administrative claims that the State may have had arising from the molasses release (the “Molasses Settlement”). Pursuant to the Molasses Settlement, the Company paid $5.9 million in cash to the State and agreed to remove the molasses tank farm and pier risers at Sand Island Terminal in Honolulu, which is estimated to cost between $5.5 million and $9.5 million. The Company’s results for the second quarter 2015 were negatively impacted by approximately $11.4 million of costs related to the Molasses Settlement , which the Company has included in accrued and other liabilities in the Condensed Consolidated Balance Sheet at June 30, 2015. In addition to the molasses release discussed above, the Company’s ocean transportation 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 | 6 Months Ended |
Jun. 30, 2015 | |
EARNINGS PER-SHARE | |
EARNINGS PER-SHARE | 9. EARNINGS PER-SHARE The number of shares used to compute basic and diluted earnings per-share for the three and six months ended June 30, 2015 and 2014, is as follows (in millions, except per-share amounts): Three Months Ended June 30, 2015 Six Months Ended June 30, 2015 Weighted Per Weighted Per Average Common Average Common Net Common Share Net Common Share 2015 Income Shares Amount Income Shares Amount Basic: $ $ $ $ Effect of Dilutive Securities: — — Diluted: $ $ $ $ Three Months Ended June 30, 2014 Six Months Ended June 30, 2014 Weighted Per Weighted Per Average Common Average Common Net Common Share Net Common Share 2014 Income Shares Amount Income Shares Amount Basic: $ $ $ $ Effect of Dilutive Securities: — — Diluted: $ $ $ $ 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 | 6 Months Ended |
Jun. 30, 2015 | |
FAIR VALUE MEASUREMENTS | |
FAIR VALUE MEASUREMENTS | 10. 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 variable rate debt, and Level 2 inputs for its account receivables and fixed rate debt. The fair values of cash and cash equivalents, account receivables and variable rate debt approximate their carrying values due to the nature of the instruments. The fair value of the Company’s fixed rate 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 June 30, 2015 and December 31, 2014 are as follows (in millions): Carrying Value at Quoted Prices in Active Markets (Level 1) Significant Observable Inputs (Level 2) Significant Unobservable Inputs (Level 3) June 30, 2015 Fair Value Measurements at June 30, 2015 Cash and cash equivalents $ $ $ — $ — Accounts receivable, net — — Variable rate debt — — Fixed rate debt — — Carrying Value at December 31, 2014 Fair Value Measurements at December 31, 2014 Cash and cash equivalents $ $ $ — $ — Accounts receivable, net — — Fixed rate debt — — |
REPORTABLE SEGMENTS
REPORTABLE SEGMENTS | 6 Months Ended |
Jun. 30, 2015 | |
REPORTABLE SEGMENTS | |
REPORTABLE SEGMENTS | 11. 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 and six months ended June 30, 2015 and 2014 were as follows (in millions): Three Months Ended Six Months Ended June 30 June 30 2015 2014 2015 2014 Revenue: Ocean Transportation $ $ $ $ Logistics Total Revenue $ $ $ $ Operating Income: Ocean Transportation $ $ $ $ Logistics Total Operating Income Interest expense, net ) ) ) ) Income before Income Taxes Income taxes ) ) ) ) Net Income $ $ $ $ |
SIGNIFICANT ACCOUNTING POLICI16
SIGNIFICANT ACCOUNTING POLICIES (Policies) | 6 Months Ended |
Jun. 30, 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. covered by this report is June 30, 2015. The period end for MatNav and its subsidiaries covered by this report occurred on the last Friday in June, or June 26, 2015. |
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. |
Income Taxes | Income Taxes: During the three months ended June 30, 2015, the Company recorded a non-cash adjustment to income tax expense to write off long-term deferred tax assets that are not expected to reverse in future periods. The impact of the out-of-period adjustment to the three and six months ended June 30, 2015 was to incre ase tax expense by $4.8 million and a corresponding decrease in long-term deferred tax assets , and resulted in a decrease of earnings per-share by $0.11 . The Company determined that the adjustment was not material to the current or previously reported periods. |
BUSINESS COMBINATION (Tables)
BUSINESS COMBINATION (Tables) | 6 Months Ended |
Jun. 30, 2015 | |
BUSINESS COMBINATION | |
Schedule of total cash consideration paid | (in millions) Cash Consideration May 29, 2015 Common shares $ Warrants Horizon’s debt (including accrued interest and breakage fees) Total cash consideration $ |
Summary of fair value of assets acquired and liabilities assumed at the acquisition date | (in millions) Estimated Fair Values May 29, 2015 Cash and cash equivalents $ Accounts receivable Other current assets Deferred tax assets, net Property and equipment Intangibles - Customer relationships Other long-term assets Accounts payable ) Accruals and other current liabilities ) Multi-employer withdrawal liabilities ) Debt, capital lease obligations and warrants ) Total identifiable assets less liabilities ) Total cash paid for common shares ) Goodwill $ |
Schedule of annual cash outflows related to the multi-employer pension plan | Expected annual cash outflows related to the multi-employer pension plan are as follows (in millions): Year ended June 30 (in millions): Repayments 2016 $ 2017 2018 2019 2020 Thereafter Total $ |
Summary of pro forma financial information | (unaudited) (unaudited) Three Months Ended Six Months Ended June 30 June 30 (in millions, except per-share amount) 2015 2014 2015 2014 Pro forma combined: Operating Revenue $ $ $ $ Net income from continuing operations $ $ $ $ Basic Earnings per share: $ $ $ $ Diluted Earnings per share: $ $ $ $ Weighted Average Number of Shares Outstanding: Basic Diluted |
CAPITAL CONSTRUCTION FUND (Tabl
CAPITAL CONSTRUCTION FUND (Tables) | 6 Months Ended |
Jun. 30, 2015 | |
CAPITAL CONSTRUCTION FUND | |
Schedule of assigned eligible accounts receivable, and on deposit to the Capital Construction Fund | At June 30, 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): CCF Deposits and Withdrawals Eligible Accounts Receivable Assigned to CCF Total Three Months Ended June 30, 2015 : Balance at March 31, 2015 $ $ $ Deposits — — — Qualified withdrawals — — — Interest earned — Balance at June 30, 2015 $ $ $ Six Months Ended June 30, 2015 : Balance at December 31, 2014 $ $ $ Deposits — Qualified withdrawals ) — ) Interest earned — Balance at June 30, 2015 $ $ $ |
DEBT (Tables)
DEBT (Tables) | 6 Months Ended |
Jun. 30, 2015 | |
DEBT | |
Schedule of debt | At June 30, 2015 and December 31, 2014, the Company’s debt consisted of the following (in millions): June 30 December 31 2015 2014 Term Loans: 5.79%, payable through 2020 $ $ 3.66%, payable through 2023 4.16%, payable through 2027 4.31%, payable through 2032 4.35%, payable through 2044 Title XI Bonds: 5.34%, payable through 2028 5.27%, payable through 2029 Revolving credit facility — Capital leases Total Debt Less current portion ) ) Total Long-term Debt $ $ |
PENSION AND POST-RETIREMENT P20
PENSION AND POST-RETIREMENT PLANS (Tables) | 6 Months Ended |
Jun. 30, 2015 | |
PENSION AND POST-RETIREMENT PLANS | |
Components of net periodic cost ( benefit) | The following table provides the components of net periodic benefit cost (benefit) for the Plans for the six months ended June 30, 2015 and 2014 (in millions): Pension Benefits Post-retirement Benefits June 30 June 30 2015 2014 2015 2014 Service cost $ $ $ $ Interest cost Expected return on plan assets ) ) — — Amortization of net gain Amortization of prior service cost ) ) — — Net periodic cost (benefit) $ $ ) $ $ |
EARNINGS PER-SHARE (Tables)
EARNINGS PER-SHARE (Tables) | 6 Months Ended |
Jun. 30, 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 and six months ended June 30, 2015 and 2014, is as follows (in millions, except per-share amounts): Three Months Ended June 30, 2015 Six Months Ended June 30, 2015 Weighted Per Weighted Per Average Common Average Common Net Common Share Net Common Share 2015 Income Shares Amount Income Shares Amount Basic: $ $ $ $ Effect of Dilutive Securities: — — Diluted: $ $ $ $ Three Months Ended June 30, 2014 Six Months Ended June 30, 2014 Weighted Per Weighted Per Average Common Average Common Net Common Share Net Common Share 2014 Income Shares Amount Income Shares Amount Basic: $ $ $ $ Effect of Dilutive Securities: — — Diluted: $ $ $ $ |
FAIR VALUE MEASUREMENTS (Tables
FAIR VALUE MEASUREMENTS (Tables) | 6 Months Ended |
Jun. 30, 2015 | |
FAIR VALUE MEASUREMENTS | |
Schedule of fair value measurement | The carrying value and fair value of the Company’s financial instruments as of June 30, 2015 and December 31, 2014 are as follows (in millions): Carrying Value at Quoted Prices in Active Markets (Level 1) Significant Observable Inputs (Level 2) Significant Unobservable Inputs (Level 3) June 30, 2015 Fair Value Measurements at June 30, 2015 Cash and cash equivalents $ $ $ — $ — Accounts receivable, net — — Variable rate debt — — Fixed rate debt — — Carrying Value at December 31, 2014 Fair Value Measurements at December 31, 2014 Cash and cash equivalents $ $ $ — $ — Accounts receivable, net — — Fixed rate debt — — |
REPORTABLE SEGMENTS (Tables)
REPORTABLE SEGMENTS (Tables) | 6 Months Ended |
Jun. 30, 2015 | |
REPORTABLE SEGMENTS | |
Schedule of reportable segment information | Segment results for the three and six months ended June 30, 2015 and 2014 were as follows (in millions): Three Months Ended Six Months Ended June 30 June 30 2015 2014 2015 2014 Revenue: Ocean Transportation $ $ $ $ Logistics Total Revenue $ $ $ $ Operating Income: Ocean Transportation $ $ $ $ Logistics Total Operating Income Interest expense, net ) ) ) ) Income before Income Taxes Income taxes ) ) ) ) Net Income $ $ $ $ |
DESCRIPTION OF THE BUSINESS (De
DESCRIPTION OF THE BUSINESS (Details) - Jun. 30, 2015 - Ocean Transportation - SSAT - facility | Total |
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 |
SIGNIFICANT ACCOUNTING POLICI25
SIGNIFICANT ACCOUNTING POLICIES (Details) - 6 months ended Jun. 30, 2015 - USD ($) $ / shares in Units, $ in Millions | Total |
Income Taxes | |
Non-cash adjustment to income tax expense to write-off long-term deferred tax assets | $ 4.8 |
Earnings per share adjustment related to the change in income tax expense due to write-off long-term deferred tax assets | $ 0.11 |
BUSINESS COMBINATION (Details)
BUSINESS COMBINATION (Details) $ / shares in Units, $ in Millions | May. 29, 2015USD ($)item$ / shares | Jun. 30, 2015USD ($) | Dec. 31, 2014USD ($) |
Assets acquired and liabilities assumed | |||
Multi-employer withdrawal liabilities | $ (58.5) | ||
Goodwill | $ 247.1 | $ 27.4 | |
Horizon | |||
Business acquisition | |||
Number of Ships Owned | item | 4 | ||
Business Combination, Ownership Percentage | 100.00% | ||
Price of Warrant (in dollars per share) | $ / shares | $ 0.72 | ||
Total cash consideration | |||
Common shares | $ 29.4 | ||
Warrants | 37.1 | ||
Horizon's debt (including accrued interest and breakage fees) | 428.9 | ||
Total cash consideration | 495.4 | ||
Assets acquired and liabilities assumed | |||
Cash and cash equivalent | 0.8 | ||
Accounts receivable | 31.7 | ||
Other current assets | 7.1 | ||
Deferred tax assets, net | 38.9 | ||
Property and equipment | 171 | ||
Intangibles-Customer relationships | 140 | ||
Other long-term assets | 5 | ||
Accounts payable | (23.2) | ||
Accruals and other current liabilities | (32.1) | ||
Multi-employer withdrawal liabilities | (60.6) | ||
Debt, capital lease obligations and warrants | (468.9) | ||
Total identifiable assets less liabilities | (190.3) | ||
Total cash paid for common shares | (29.4) | ||
Goodwill | $ 219.7 | ||
Horizon | Customer relationships | |||
Assets acquired and liabilities assumed | |||
Expected useful lives | 21 years | ||
Horizon | Pasha | Horizon Hawaii Operations | |||
Business acquisition | |||
Pasha transaction proceeds | $ 141.5 |
BUSINESS COMBINATION (Details 2
BUSINESS COMBINATION (Details 2) - USD ($) $ / shares in Units, shares in Millions, $ in Millions | 3 Months Ended | 6 Months Ended | |||
Jun. 30, 2015 | Jun. 30, 2014 | Jun. 30, 2015 | Jun. 30, 2014 | Dec. 31, 2014 | |
Estimated future multi-employer pension benefit payments | |||||
Benefit payment period | 18 years | ||||
Debt and Warrants | |||||
Capital lease obligations | $ 2.1 | $ 2.1 | $ 1.3 | ||
Condensed Consolidated Statements of Income and Comprehensive Income | |||||
Selling, general and administrative | 54.6 | $ 35.9 | 93.1 | $ 70.9 | |
Horizon | |||||
Estimated future multi-employer pension benefit payments | |||||
2,016 | 2.1 | 2.1 | |||
2,017 | 4.1 | 4.1 | |||
2,018 | 4.1 | 4.1 | |||
2,019 | 4.1 | 4.1 | |||
2,020 | 4.1 | 4.1 | |||
Thereafter | 55.4 | 55.4 | |||
Total | 73.9 | 73.9 | |||
Debt and Warrants | |||||
Long-term Debt | 466 | ||||
Capital lease obligations | 1.2 | 1.2 | |||
Condensed Consolidated Statements of Income and Comprehensive Income | |||||
Revenue | 24.5 | 24.5 | |||
Net income | 2.6 | 2.6 | |||
Selling, general and administrative | 14.7 | 15.6 | |||
Pro-forma Financial Information | |||||
Operating Revenue | 507.2 | 526.2 | 980.6 | 994.1 | |
Net income from continuing operations | $ 7.6 | $ 8.9 | $ 25.1 | $ 0.4 | |
Basic Earnings Per Share (in dollars per share) | $ 0.17 | $ 0.21 | $ 0.58 | $ 0.01 | |
Diluted Earnings Per Share (in dollars per share) | $ 0.17 | $ 0.21 | $ 0.57 | $ 0.01 | |
Weighted Average Number of Shares Outstanding: | |||||
Basic | 43.5 | 43 | 43.4 | 43 | |
Diluted | 44 | 43.2 | 43.9 | 43.2 |
CAPITAL CONSTRUCTION FUND (Deta
CAPITAL CONSTRUCTION FUND (Detail) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2015 | Jun. 30, 2015 | Mar. 31, 2015 | Dec. 31, 2014 | |
Eligible Accounts Receivable Assigned to CCF | ||||
Balance | $ 151.1 | $ 151.1 | $ 150.9 | $ 150.7 |
Interest earned | 0.2 | 0.4 | ||
CCF Deposits and Withdrawals | ||||
Balance | 27.5 | 27.5 | 27.5 | 27.5 |
Deposits | 2.2 | |||
Qualified withdrawals | (2.2) | |||
CAPITAL CONSTRUCTION FUND Total | ||||
Balance | 178.6 | 178.6 | $ 178.4 | $ 178.2 |
Deposits | 2.2 | |||
Qualified withdrawals | (2.2) | |||
Interest earned | $ 0.2 | $ 0.4 |
DEBT (Details)
DEBT (Details) - USD ($) $ in Millions | Jun. 30, 2015 | Dec. 31, 2014 |
Debt | ||
Capital leases | $ 2.1 | $ 1.3 |
Total Debt | 516.6 | 373.6 |
Less current portion | (24.3) | (21.6) |
Total Long-term debt | 492.3 | 352 |
5.79%, payable through 2020 | ||
Debt | ||
Total Debt | $ 35 | $ 38.5 |
Interest rate (as a percent) | 5.79% | 5.79% |
3.66%, payable through 2023 | ||
Debt | ||
Total Debt | $ 72.9 | $ 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 | $ 31.9 | $ 33 |
Interest rate (as a percent) | 5.27% | 5.27% |
Credit Facility | ||
Debt | ||
Total Debt | $ 152.5 | |
Interest rate (as a percent) | 2.30% |
DEBT (Details 2)
DEBT (Details 2) - USD ($) $ in Millions | 6 Months Ended | ||
Jun. 30, 2015 | Jul. 30, 2015 | May. 27, 2015 | |
Credit Facility | |||
Debt | |||
Long-term Line of Credit | $ 175 | ||
Debt instrument term | 5 years | ||
Interest rate (as a percent) | 2.30% | ||
Maximum borrowing capacity | $ 375 | $ 400 | |
Uncommitted option to increase credit facility | 150 | ||
Unused portion of credit facility | $ 215.9 | ||
Credit Facility | Minimum | |||
Debt | |||
Credit facility commitment fee percentage | 0.15% | ||
Line of credit fees percentage | 1.00% | ||
Credit Facility | Minimum | London Interbank Offered Rate (LIBOR) | |||
Debt | |||
Variable rate margin | 1.00% | ||
Credit Facility | Minimum | Base rate | |||
Debt | |||
Variable rate margin | 0.00% | ||
Credit Facility | Maximum | |||
Debt | |||
Credit facility commitment fee percentage | 0.30% | ||
Line of credit fees percentage | 1.75% | ||
Credit Facility | Maximum | London Interbank Offered Rate (LIBOR) | |||
Debt | |||
Variable rate margin | 1.75% | ||
Credit Facility | Maximum | Base rate | |||
Debt | |||
Variable rate margin | 0.75% | ||
Notes 30 years | |||
Debt | |||
Debt issued | $ 75 | ||
Debt instrument term | 30 years | ||
Weighted average period | 13 years | ||
Interest rate (as a percent) | 3.92% | ||
Notes 30 years | 2017 through 2019 | |||
Debt | |||
Annual principal payments | $ 1.8 | ||
Notes 30 years | After 2026 | |||
Debt | |||
Annual principal payments | 1.5 | ||
Notes 30 years | Minimum | 2020 through 2026 | |||
Debt | |||
Annual principal payments | 1.3 | ||
Notes 30 years | Maximum | 2020 through 2026 | |||
Debt | |||
Annual principal payments | $ 8 |
PENSION AND POST-RETIREMENT P31
PENSION AND POST-RETIREMENT PLANS (Details) - USD ($) $ in Millions | Apr. 10, 2015 | Jun. 30, 2015 | Jun. 30, 2014 |
Pension Benefits | |||
Components of Net Periodic Benefit Cost | |||
Service cost | $ 1.7 | $ 1.7 | |
Interest cost | 4.8 | 4.7 | |
Expected return on plan assets | (6.9) | (7) | |
Amortization of net gain | 3.2 | 1.5 | |
Amortization of prior service cost | (1.2) | (1.2) | |
Net periodic cost (benefit) | 1.6 | (0.3) | |
Initial contribution | $ 1.6 | ||
Full year expected cash contributions to pension plan | 6.2 | ||
Post-retirement Benefits | |||
Components of Net Periodic Benefit Cost | |||
Service cost | 0.8 | 0.5 | |
Interest cost | 1.3 | 1.3 | |
Amortization of net gain | 1.2 | 0.3 | |
Net periodic cost (benefit) | $ 3.3 | $ 2.1 |
SHARE-BASED COMPENSATION (Detai
SHARE-BASED COMPENSATION (Details) - Time Based And Performance Based Shares - Employee - USD ($) $ / shares in Units, $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2015 | Jun. 30, 2014 | Jun. 30, 2015 | Jun. 30, 2014 | |
Share-based compensation | ||||
Shares granted | 20,000 | |||
Weighted average grant date fair value (in dollars per share) | $ 42.23 | |||
Total stock-based compensation cost | $ 4.8 | $ 1.9 | $ 7.6 | $ 3.7 |
Total unrecognized compensation cost | $ 13.3 | $ 13.3 | ||
Unrecognized compensation cost over weighted-average period to be recognized | 2 years |
CONTINGENCIES (Details)
CONTINGENCIES (Details) $ in Millions | Jul. 29, 2015USD ($) | Jan. 29, 2015USD ($)item | Jun. 30, 2015USD ($) | Apr. 30, 2014item |
Environmental Matters | ||||
Number of subpoenas received from the Hawaii Attorney General | item | 2 | |||
Federal investigation | ||||
Environmental Matters | ||||
Number of counts of violating the refuse act accepted | item | 2 | |||
Settlement amount | $ 1 | |||
Penalty payment in the form of a fine | 0.4 | |||
Penalty payment in the form of a community restitution payment | $ 0.6 | |||
State of Hawaii investigation | ||||
Environmental Matters | ||||
Settlement amount | $ 5.9 | |||
Costs related to settlement | $ 11.4 | |||
Accrued and other liabilities | $ 11.4 | |||
State of Hawaii investigation | Minimum | ||||
Environmental Matters | ||||
Removal of molasses tank farm and pier risers | 5.5 | |||
State of Hawaii investigation | Maximum | ||||
Environmental Matters | ||||
Removal of molasses tank farm and pier risers | $ 9.5 |
EARNING PER-SHARE (Details)
EARNING PER-SHARE (Details) - USD ($) $ / shares in Units, shares in Millions, $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2015 | Jun. 30, 2014 | Jun. 30, 2015 | Jun. 30, 2014 | |
Net Income | ||||
Net Income, Basic | $ 9.9 | $ 18.1 | $ 34.9 | $ 21.5 |
Net Income, Diluted | $ 9.9 | $ 18.1 | $ 34.9 | $ 21.5 |
Weighted Average Common Shares | ||||
Basic (in shares) | 43.5 | 43 | 43.4 | 43 |
Effect of Dilutive Securities (in shares) | 0.5 | 0.2 | 0.5 | 0.2 |
Diluted (in shares) | 44 | 43.2 | 43.9 | 43.2 |
Per Common Share Amount, Basic | ||||
Net income (in dollars per share) | $ 0.23 | $ 0.42 | $ 0.80 | $ 0.50 |
Per Common Share Amount, Diluted | ||||
Net income (in dollars per share) | $ 0.23 | $ 0.42 | $ 0.79 | $ 0.50 |
FAIR VALUE MEASUREMENTS (Detail
FAIR VALUE MEASUREMENTS (Details) - USD ($) $ in Millions | Jun. 30, 2015 | Dec. 31, 2014 |
Carrying value | ||
Fair value of financial instruments | ||
Cash and cash equivalents | $ 15.8 | $ 293.4 |
Accounts receivable, net | 223.6 | 197.6 |
Variable debt | 152.5 | |
Fixed rate debt | 364.1 | 373.6 |
Fair Value Measurement | Quoted Prices in Active Markets (Level 1) | ||
Fair value of financial instruments | ||
Cash and cash equivalents | 15.8 | 293.4 |
Variable debt | 152.5 | |
Fair Value Measurement | Significant Observable Inputs (Level 2) | ||
Fair value of financial instruments | ||
Accounts receivable, net | 223.6 | 197.6 |
Fixed rate debt | $ 378.5 | $ 395.7 |
REPORTABLE SEGMENTS (Details)
REPORTABLE SEGMENTS (Details) $ in Millions | 3 Months Ended | 6 Months Ended | |||
Jun. 30, 2015USD ($) | Jun. 30, 2014USD ($) | Jun. 30, 2015USD ($)segment | Jun. 30, 2014USD ($) | Dec. 31, 2014USD ($) | |
Segment results | |||||
Number of segments | segment | 2 | ||||
Revenue | $ 447.6 | $ 436.4 | $ 845.8 | $ 828.9 | |
Operating Income | 33.7 | 35.7 | 78.6 | 45.6 | |
Interest expense, net | (4.6) | (4.5) | (8.9) | (8.6) | |
Income before Income Taxes | 29.1 | 31.2 | 69.7 | 37 | |
Income tax expense | (19.2) | (13.1) | (34.8) | (15.5) | |
Net Income | 9.9 | 18.1 | 34.9 | 21.5 | |
Assets | 1,726.2 | 1,726.2 | $ 1,401.8 | ||
Capital expenditures | 12.2 | 20.2 | |||
Depreciation and amortization | 35.6 | 35.2 | |||
Operating segments | |||||
Segment results | |||||
Operating Income | 33.7 | 35.7 | 78.6 | 45.6 | |
Ocean Transportation | Operating segments | |||||
Segment results | |||||
Revenue | 346.7 | 321.1 | 652.2 | 615.7 | |
Operating Income | 31.4 | 32.8 | 75.3 | 42.2 | |
Logistics | Operating segments | |||||
Segment results | |||||
Revenue | 100.9 | 115.3 | 193.6 | 213.2 | |
Operating Income | $ 2.3 | $ 2.9 | $ 3.3 | $ 3.4 |
Uncategorized Items - matx-2015
Label | Element | Value |
Income (Loss) from Equity Method Investments | us-gaap_IncomeLossFromEquityMethodInvestments | $ 2.1 |
Income (Loss) from Equity Method Investments | us-gaap_IncomeLossFromEquityMethodInvestments | $ 5.2 |