Document and Entity Information
Document and Entity Information - USD ($) | 12 Months Ended | ||
Dec. 31, 2015 | Feb. 23, 2016 | Jun. 30, 2015 | |
Document and Entity Information | |||
Entity Registrant Name | Matson, Inc. | ||
Entity Central Index Key | 3,453 | ||
Document Type | 10-K | ||
Document Period End Date | Dec. 31, 2015 | ||
Amendment Flag | false | ||
Current Fiscal Year End Date | --12-31 | ||
Entity Well-known Seasoned Issuer | Yes | ||
Entity Voluntary Filers | No | ||
Entity Current Reporting Status | Yes | ||
Entity Filer Category | Large Accelerated Filer | ||
Entity Public Float | $ 1,812,878,266 | ||
Entity Common Stock, Shares Outstanding | 43,444,091 | ||
Document Fiscal Year Focus | 2,015 | ||
Document Fiscal Period Focus | FY |
Consolidated Statements of Inco
Consolidated Statements of Income and Comprehensive Income - USD ($) shares in Millions, $ in Millions | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Operating Revenue: | |||
Ocean Transportation | $ 1,498 | $ 1,278.4 | $ 1,229.4 |
Logistics | 386.9 | 435.8 | 407.8 |
Total Operating Revenue | 1,884.9 | 1,714.2 | 1,637.2 |
Costs and Expenses: | |||
Operating costs | 1,510.1 | 1,433.5 | 1,402.3 |
Equity in (income) loss of related party Terminal Joint Venture | (16.5) | (6.6) | 2 |
Selling, general and administrative | 195 | 147.3 | 132.6 |
Total Costs and Expenses | 1,688.6 | 1,574.2 | 1,536.9 |
Operating Income | 196.3 | 140 | 100.3 |
Interest expense | (18.5) | (17.3) | (14.4) |
Income before Income Taxes | 177.8 | 122.7 | 85.9 |
Income tax expense | (74.8) | (51.9) | (32.2) |
Net Income | 103 | 70.8 | 53.7 |
Other Comprehensive Income (Loss), Net of Income Taxes: | |||
Net Income | 103 | 70.8 | 53.7 |
Other Comprehensive Income (Loss): | |||
Net gain (loss) in prior service cost | 5.1 | (31.4) | 18.7 |
Amortization of prior service cost included in net periodic pension cost | (1.3) | (1.3) | (1.3) |
Amortization of net loss included in net periodic pension cost | 1.8 | 2.5 | 4.7 |
Foreign currency translation adjustment | 0.7 | 0.4 | (0.1) |
Other comprehensive income | 0.1 | ||
Total Other Comprehensive (Loss) Income | 6.4 | (29.8) | 22 |
Comprehensive Income | $ 109.4 | $ 41 | $ 75.7 |
Basic Earnings Per Share: | |||
Basic Earnings Per Share (in dollars per share) | $ 2.37 | $ 1.65 | $ 1.26 |
Diluted Earnings Per Share: | |||
Diluted Earnings Per Share (in dollars per share) | $ 2.34 | $ 1.63 | $ 1.25 |
Weighted Average Number of Shares Outstanding: | |||
Basic (in shares) | 43.5 | 43 | 42.7 |
Diluted (in shares) | 44 | 43.4 | 43.1 |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) $ in Millions | Dec. 31, 2015 | Dec. 31, 2014 |
Current Assets: | ||
Cash and cash equivalents | $ 25.5 | $ 293.4 |
Accounts receivable, net | 214.3 | 197.6 |
Deferred income taxes | 8 | |
Prepaid expenses and other assets | 38.1 | 20.5 |
Total current assets | 277.9 | 519.5 |
Long-term Assets: | ||
Investment in related party Terminal Joint Venture | 66.4 | 64.4 |
Property and equipment, net | 860.3 | 691.2 |
Goodwill | 241.6 | 27.4 |
Intangible assets, net | 139.1 | 2.5 |
Capital Construction Fund - cash on deposit | 27.5 | |
Deferred dry-docking costs | 57.6 | 47.5 |
Other long-term assets | 26.9 | 21.8 |
Total assets | 1,669.8 | 1,401.8 |
Current Liabilities: | ||
Current portion of debt | 22 | 21.6 |
Accounts payable | 164.9 | 133.2 |
Payroll and vacation benefits | 23.1 | 17.3 |
Uninsured liabilities | 27.1 | 24.5 |
Accrued and other liabilities | 60.5 | 26.9 |
Total current liabilities | 297.6 | 223.5 |
Long-term Liabilities: | ||
Long-term debt | 407.9 | 352 |
Deferred income taxes | 310.5 | 308.4 |
Employee benefit plans | 109.3 | 118.6 |
Uninsured and other liabilities | 37.7 | 35.5 |
Multi-employer withdrawal liabilities | 56.2 | |
Total long-term liabilities | $ 921.6 | $ 814.5 |
Commitments and Contingencies (Note 14) | ||
Shareholders' Equity: | ||
Capital stock - common stock without par value; authorized, 150.0 million shares ($0.75 stated value per share); outstanding, 43.5 million shares in 2015 and 43.2 million shares in 2014 | $ 32.6 | $ 32.4 |
Additional paid in capital | 287.9 | 274.9 |
Accumulated other comprehensive loss | (46.9) | (53.3) |
Retained earnings | 177 | 109.8 |
Total shareholders' equity | 450.6 | 363.8 |
Total liabilities and shareholders' equity | $ 1,669.8 | $ 1,401.8 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - $ / shares shares in Millions | Dec. 31, 2015 | Dec. 31, 2014 |
Consolidated Balance Sheets | ||
Capital stock, shares authorized | 150 | 150 |
Capital stock, stated value (in dollars per share) | $ 0.75 | $ 0.75 |
Capital stock, shares outstanding | 43.5 | 43.2 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Cash Flows From Operating Activities: | |||
Net income | $ 103,000 | $ 70,800 | $ 53,700 |
Reconciling adjustments: | |||
Depreciation and amortization | 83,400 | 69,700 | 69,700 |
Deferred income taxes | 50,700 | 2,700 | 57,500 |
Loss (gain) on disposal of property | 1,200 | (1,500) | 200 |
Post-retirement expense (income) | 2,000 | (5,900) | 1,600 |
Share-based compensation expense | 12,200 | 8,700 | 5,900 |
Equity in (income) loss of related party Terminal Joint Venture | (16,500) | (6,600) | 2,000 |
Distributions from Terminal Joint Venture | 14,000 | ||
Tax benefit from equity issuance | 2,600 | 800 | 1,800 |
Excess tax benefit from stock-based compensation | (900) | (1,100) | (600) |
Changes in assets and liabilities: | |||
Accounts receivable | 13,500 | (15,300) | (7,600) |
Deferred dry-docking payments | (25,700) | (14,100) | (14,000) |
Deferred dry-docking amortization | 23,100 | 21,100 | 22,000 |
Prepaid expenses and other assets | (13,200) | 17,300 | (11,800) |
Accounts payable and accrued liabilities | (9,400) | 13,500 | 2,200 |
Other liabilities | 5,300 | 5,600 | 13,100 |
Net cash provided by operating activities | 245,300 | 165,700 | 195,700 |
Cash Flows From Investing Activities: | |||
Capital expenditures | (67,800) | (27,900) | (35,200) |
Proceeds from disposal of property and equipment | 5,500 | 4,900 | 4,500 |
Cash deposits into Capital Construction Fund | (77,900) | (31,900) | (4,400) |
Withdrawals from Capital Construction Fund | 105,400 | 4,400 | 4,400 |
Payments for Horizon's common stock, net of cash acquired, and other acquisitions | (29,000) | (9,300) | |
Net cash used in investing activities | (63,800) | (50,500) | (40,000) |
Cash Flows From Financing Activities: | |||
Proceeds from issuance of debt | 75,000 | 100,000 | 21,000 |
Excess tax benefit from stock-based compensation | 900 | 1,100 | 600 |
Payments of debt | (20,500) | (11,400) | (45,400) |
Payment of capital leases | (1,500) | (1,100) | (1,200) |
Proceeds from revolving credit facility | 588,000 | ||
Payments of revolving credit facility | (588,000) | (11,000) | |
Payment of financing costs | (900) | ||
Proceeds from issuance of capital stock | 2,200 | 5,800 | 1,700 |
Tax withholding related to net share settlements of restricted stock units | (2,900) | (2,000) | |
Dividends paid | (30,800) | (28,700) | (26,800) |
Shares repurchased | (4,900) | ||
Payments of Horizon debt and redemption of warrants, net | (466,000) | ||
Net cash (used in) provided by financing activities | (449,400) | 63,700 | (61,100) |
Net (Decrease) Increase in Cash and Cash Equivalents | (267,900) | 178,900 | 94,600 |
Cash and cash equivalents, beginning of the period | 293,400 | 114,500 | 19,900 |
Cash and cash equivalents, end of the period | 25,500 | 293,400 | 114,500 |
Supplemental Cash Flow Information: | |||
Interest paid | 17,700 | 15,200 | 13,800 |
Income tax paid (refund) | 40,000 | 30,200 | (3,400) |
Non-cash Information: | |||
Capital expenditures included in accounts payable and accrued liabilities | 13,500 | $ 1,600 | 2,100 |
Capital lease obligations | $ 1,800 | $ 2,900 |
Consolidated Statement of Stock
Consolidated Statement of Stockholders' Equity - USD ($) shares in Millions, $ in Millions | Common Stock | Additional Paid In Capital | Accumulated Other Comprehensive Income (Loss) | Retained Earnings | Total |
Balance at Dec. 31, 2012 | $ 31.9 | $ 252.7 | $ (45.5) | $ 40.8 | $ 279.9 |
Balance (in shares) at Dec. 31, 2012 | 42.6 | ||||
Increase (Decrease) in Stockholders' Equity | |||||
Net Income | 53.7 | 53.7 | |||
Other comprehensive income (loss), net of tax | 22 | 22 | |||
Excess tax benefit and share withholding | 1.8 | 1.8 | |||
Share-based compensation | 5.9 | 5.9 | |||
Shares issued | $ 0.2 | 1.5 | 1.7 | ||
Shares issued (in shares) | 0.2 | ||||
Dividends ($0.70, $0.66, and $0.62 per share) for the years 2015, 2014 and 2013 respectively | (26.8) | (26.8) | |||
Balance at Dec. 31, 2013 | $ 32.1 | 261.9 | (23.5) | 67.7 | 338.2 |
Balance (in shares) at Dec. 31, 2013 | 42.8 | ||||
Increase (Decrease) in Stockholders' Equity | |||||
Net Income | 70.8 | 70.8 | |||
Other comprehensive income (loss), net of tax | (29.8) | (29.8) | |||
Excess tax benefit and share withholding | 0.8 | 0.8 | |||
Share-based compensation | 8.7 | 8.7 | |||
Shares issued | $ 0.3 | 3.5 | 3.8 | ||
Shares issued (in shares) | 0.4 | ||||
Dividends ($0.70, $0.66, and $0.62 per share) for the years 2015, 2014 and 2013 respectively | (28.7) | (28.7) | |||
Balance at Dec. 31, 2014 | $ 32.4 | 274.9 | (53.3) | 109.8 | $ 363.8 |
Balance (in shares) at Dec. 31, 2014 | 43.2 | 43.2 | |||
Increase (Decrease) in Stockholders' Equity | |||||
Net Income | 103 | $ 103 | |||
Other comprehensive income (loss), net of tax | 6.4 | 6.4 | |||
Excess tax benefit and share withholding | 2.6 | 2.6 | |||
Share-based compensation | 12.2 | 12.2 | |||
Shares issued | $ 0.3 | (1) | (0.7) | ||
Shares issued (in shares) | 0.4 | ||||
Shares repurchased | $ (0.1) | (0.8) | (5) | (5.9) | |
Shares repurchased (in shares) | (0.1) | ||||
Dividends ($0.70, $0.66, and $0.62 per share) for the years 2015, 2014 and 2013 respectively | (30.8) | (30.8) | |||
Balance at Dec. 31, 2015 | $ 32.6 | $ 287.9 | $ (46.9) | $ 177 | $ 450.6 |
Balance (in shares) at Dec. 31, 2015 | 43.5 | 43.5 |
Consolidated Statement of Stoc7
Consolidated Statement of Stockholders' Equity (Parenthetical) - $ / shares | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Consolidated Statement of Stockholders' Equity | |||
Dividends (per share) | $ 0.70 | $ 0.66 | $ 0.62 |
DESCRIPTION OF THE BUSINESS
DESCRIPTION OF THE BUSINESS | 12 Months Ended |
Dec. 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. The Company consists of two segments, Ocean Transportation and Logistics. For financial information by segment for the three years ended December 31, 2015, see Note 15). 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 economies of Hawaii, Alaska, and Guam, and to other island economies in Micronesia and in the South Pacific. MatNav also operates a premium, expedited service from China to Long Beach, California. In addition, subsidiaries of MatNav provide 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. Matson 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. SSAT provides terminal and stevedoring services to various carriers at six terminal facilities on the U.S. West Coast, including to MatNav at three of those facilities. Matson records its share of income in the joint venture in operating expenses within the Ocean Transportation segment due to the nature of SSAT’s operations. Horizon Acquisition: On May 29, 2015, Matson completed its acquisition of Horizon Lines, Inc. (“Horizon”). As a result, Matson acquired Horizon’s Alaska operations and assumed all of Horizon’s non-Hawaii assets and liabilities (the “Horizon Acquisition”). For additional information on this Horizon Acquisition, see Note 3 to the consolidated financial statements in Item 8 of Part II below. Logistics: Matson’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”); supply chain management, and warehousing and distribution services. |
SIGNIFICANT ACCOUNTING POLICIES
SIGNIFICANT ACCOUNTING POLICIES | 12 Months Ended |
Dec. 31, 2015 | |
SIGNIFICANT ACCOUNTING POLICIES | |
SIGNIFICANT ACCOUNTING POLICIES | 2. SIGNIFICANT ACCOUNTING POLICIES Principles of Consolidation: The consolidated financial statements include the accounts of Matson, Inc. and all wholly-owned subsidiaries, after elimination of significant intercompany amounts. Significant investments in businesses, partnerships, and limited liability companies in which the Company does not have a controlling financial interest, but has the ability to exercise significant influence, are accounted for under the equity method. A controlling financial interest is one in which the Company has a majority voting interest or one in which the Company is the primary beneficiary of a variable interest entity. Fiscal Year: The period end for Matson, Inc. is December 31. The period end for MatNav occurred on the last Friday in December, except for Matson Logistics Warehousing whose period closed on December 31. There were 52 weeks included in the MatNav 2015, 2014, and 2013 fiscal years. Foreign Currency Transactions: The United States (U.S.) dollar is the functional currency for substantially all of the financial statements of the Company’s foreign subsidiaries. Foreign currency denominated assets and liabilities of the Company’s foreign subsidiaries are translated into U.S. dollars at exchange rates existing at the respective balance sheet dates. Translation adjustments resulting from fluctuations in exchange rates are recorded as a component of Accumulated Other Comprehensive Loss within shareholders’ equity. The Company translates the result of operations of its foreign subsidiaries at the average exchange rate during the respective periods. Gains and losses resulting from foreign currency transactions are included in selling, general and administrative costs in the Consolidated Statements of Income and Comprehensive Income. Use of Estimates: The preparation of the consolidated financial statements in conformity with accounting principles generally accepted in the U.S. requires management to make estimates and assumptions that affect the amounts reported. Estimates and assumptions are used for, but not limited to: impairment of investments, long-lived vessel and equipment impairment, allowance for doubtful accounts, goodwill and other finite-lived intangible assets impairment, legal contingencies, uninsured liabilities, accruals for removal of tank farm, pension and post-retirement estimates, multi-employer withdrawal liabilities, and income taxes. Future results could be materially affected if actual results differ from these estimates and assumptions. Cash and Cash Equivalents: Cash equivalents consist of highly liquid investments with an original maturity of three months or less at the date of purchase. The Company carries these investments at cost, which approximates fair value. Outstanding checks in excess of funds on deposit totaled $13.8 million and $18.9 million at December 31, 2015 and 2014, respectively, and are reflected as current liabilities in the consolidated balance sheets. Fair Value of Financial Instruments: 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 and cash equivalents. The Company uses Level 2 inputs for its accounts receivable, and debt. The fair values of cash and cash equivalents, accounts receivable, and short-term debt approximate their carrying values due to the short-term nature of the instruments. The fair value of the Company’s long-term debt is calculated based upon interest rates available for debt with terms and maturities similar to the Company’s existing debt arrangements (in millions). Quoted Prices in Significant Significant Total Active Markets Observable Unobservable Carrying Value Total (Level 1) Inputs (Level 2) Inputs (Level 3) December 31, 2015 Fair Value Measurements at December 31, 2015 Cash and cash equivalents $ $ $ $ — $ — Accounts receivable, net — — Fixed rate debt — — December 31, 2014 Fair Value Measurements at December 31, 2014 Cash and cash equivalents $ $ $ $ — $ — Accounts receivable, net — — Fixed rate debt — — Accounts Receivable: Accounts receivable are shown net of allowance for doubtful accounts in the consolidated balance sheets. At December 31, 2015, and December 31, 2014, the Company had assigned $176.6 million and $150.7 million of eligible accounts receivable, respectively, to the Capital Construction Fund (see Note 7). Allowance for Doubtful Accounts: Allowances for doubtful accounts receivable are established by management based on estimates of collectability. Estimates of collectability are principally based on an evaluation of the current financial condition of the Company’s customers and potential risks to collection, payment history and other factors which are regularly monitored by the Company. The changes in the allowance for doubtful accounts receivable for the three years ended December 31, 2015 were as follows (in millions): Year Balance at Beginning of Year Expense (1) Write-offs and Other Balance at End of Year 2015 $ $ $ ) $ 2014 ) 2013 ) (1) 2015 expense includes allowances for Alaska service related accounts receivable. Prepaid and Other Assets: Prepaid expenses and other assets consist of the following at December 31, 2015 and 2014 (in millions): As of December 31, Prepaid expenses and other assets 2015 2014 Prepaid fuel $ $ Insurance Income tax receivables — Other Total $ $ Impairment of Terminal Joint Venture Investment: The Company’s investment in its Terminal Joint Venture, a related party, is reviewed for impairment annually, or whenever there is evidence that fair value may be below carrying cost. An investment is written down to fair value if fair value is below carrying cost and the impairment is other-than-temporary. In evaluating the fair value of an investment and whether any identified impairment is other-than-temporary, significant estimates and considerable judgments are involved. These estimates and judgments are based, in part, on the Company’s current and future evaluation of economic conditions in general, as well as the Terminal Joint Venture’s current and future plans. These fair value calculations are highly subjective because they require management to make assumptions and apply judgments to estimates regarding the timing and amount of future cash flows, probabilities related to various cash flow scenarios, and appropriate discount rates based on the perceived risks, among others. In evaluating whether an impairment is other-than-temporary, the Company considers all available information, including the length of time and extent of the impairment, the financial condition and near-term prospects of the Terminal Joint Venture, the Company’s ability and intent to hold the investment for a period of time sufficient to allow for any anticipated recovery in market value, and projected industry and economic trends, among others. Changes in these and other assumptions could affect the projected operational results and fair value of the Terminal Joint Venture, and accordingly, may require valuation adjustments to the Company’s investment that may materially impact the Company’s financial condition or its future operating results. The Company has evaluated its investment in its related party Terminal Joint Venture for impairment and no impairment charges were recorded for the years ended December 31, 2015, 2014, and 2013. Property and Equipment: Property and equipment are stated at cost. Certain costs incurred in the development of internal-use software are capitalized. Property and equipment is depreciated using the straight-line method over the estimated useful lives of the assets. The estimated useful lives of property and equipment range up to the following maximum life: Classification Life Vessels 40 years Machinery and equipment 20 years Terminal facilities 35 years Deferred Dry-docking Costs: The Company ’s U.S. flagged vessels must meet specified seaworthiness standards established by U.S. Coast Guard rules and Classification society requirements. These standards require that the Company’s vessels undergo two dry-docking inspections within a five-year period. However, the majority of the Company’s U.S. flagged vessels are enrolled in the U.S. Coast Guard’s Underwater Survey in Lieu of Dry-docking (“UWILD”) program. The UWILD program allows eligible vessels to have their intermediate dry-docking requirement met with far less costly underwater inspection. The Company operates four non-U.S. flag vessels (one owned; one under a bareboat charter arrangement; and the remaining two on time charter) in the Pacific Islands. The Company is responsible for ensuring that the owned and bareboat chartered vessels meet international standards for seaworthiness, which among other requirements generally mandate that the Company perform two dry-docking inspections every five years. The dry-dockings of the Company’s time chartered vessels are the responsibility of the vessels’ owners. As costs associated with dry-docking inspections provide future economic benefits to the Company through continued operation of the vessels, the costs are deferred and amortized until the next regulated scheduled dry-docking, which is usually over a two to five-year period. Routine vessel maintenance and repairs that do not improve or extend asset lives are charged to expense as incurred. Amortized amounts are charged to operating expenses of the Ocean Transportation segment in the consolidated statements of income and comprehensive income. Goodwill and Intangible Assets: Recorded goodwill arises as a result of acquisitions made by the Company. Intangible assets at December 31, 2015, consisted of customer relationships that are being amortized using the straight-line method over the expected useful lives ranging from 3 to 21 years (see Note 3 and 6). Impairment of Long-Lived Assets, Finite-Lived Intangible Assets and Goodwill: The Company evaluates its long-lived assets, including finite-lived intangible assets for possible impairment in the fourth quarter, or whenever events or changes in circumstances indicate that it is more likely than not that the fair value is less than its carrying amount. During 2015, the Company changed the measurement date of its annual impairment tests from November 30 to October 1. The change was applied prospectively and did not have any impact on the Company’s impairment tests for the year. The change was made to better align the date of the impairment analysis with the preparation of the Company’s financial quarterly cash flow model. The change, if applied retrospective, would not have had any impact on the Company’s impairment analysis for prior periods presented. The Company’s long-lived assets, including finite-lived intangible assets are grouped at the Ocean Transportation and Logistics asset group level, which represents the lowest level for which identifiable cash flows are available. Long-lived Assets: In evaluating impairment, the estimated future undiscounted cash flows generated by each of these asset groups is compared with the amount recorded for each asset group to determine if its carrying value is not recoverable. If this review determines that the amount recorded will not be recovered, the amount recorded for the asset group is reduced to its estimated fair value. These asset impairment analyses are highly subjective because they require management to make assumptions and apply considerable judgments to, among other things, estimates of the timing and amount of future cash flows, expected useful lives of the assets, uncertainty about future events, including changes in economic conditions, changes in operating performance, changes in the use of the assets, and ongoing costs of maintenance and improvements of the assets, and thus, the accounting estimates may change from period to period. If management uses different assumptions or if different conditions occur in future periods, the Company’s financial condition or its future operating results could be materially impacted. During the year ended December 31, 2015, the Company recorded an impairment charge of $2.1 million related to the write-down of inactive vessels to be recycled from its recorded net book value to its estimated fair value of zero. The impairment expense is included in operating costs on the consolidated statements of income and comprehensive income. No impairment charges were recorded for the years ended December 31, 2014, and 2013. Finite-Lived Intangible Assets and Goodwill: The Company’s intangible assets include goodwill and customer relationships. In estimating the fair value of a reporting unit, the Company uses a combination of a discounted cash flow model and fair value based on market multiples of earnings before interest, taxes, depreciation and amortization (“EBITDA”). The discounted cash flow approach requires the Company to use a number of assumptions, including market factors specific to the business, the amount and timing of estimated future cash flows to be generated by the business over an extended period of time, long-term growth rates for the business, and a discount rate that considers the risks related to the amount and timing of the cash flows. Although the assumptions used by the Company in its discounted cash flow model are consistent with the assumptions the Company used to generate its internal strategic plans and forecasts, significant judgment is required to estimate the amount and timing of future cash flows from the reporting unit and the risk of achieving those cash flows. When using market multiples of EBITDA, the Company must make judgments about the comparability of those multiples in closed and proposed transactions. Accordingly, changes in assumptions and estimates, including, but not limited to, changes driven by external factors, such as industry and economic trends, and those driven by internal factors, such as changes in the Company’s business strategy and its internal forecasts, could have a material effect on the Company’s financial condition or its future operating results. The Company has evaluated its goodwill and intangible assets for impairment and determined that the fair value of each reporting unit substantially exceeds book value. No impairment charges were recorded for the years ended December 31, 2015, 2014 and 2013, respectively. Accrued and other liabilities: Accrued and other liabilities consist of the following at December 31, 2015 and 2014 (in millions) : As of December 31, Accrued and other liabilities 2015 2014 Incentives and other benefit accruals $ $ Molasses tank farm removal accrual — Restructuring and severance accruals — Repayments of multi-employer withdrawal liability (see Note 12) — Interest on debt Acquisition related payments — Deferred revenue Post retirement benefit obligations Other liabilities Total $ $ Pension and Post-Retirement Plans: Certain Ocean Transportation subsidiaries are members of the Pacific Maritime Association (“PMA”) and the Hawaii Stevedoring Industry Committee, which negotiate multi-employer pension plans covering certain shoreside bargaining unit personnel. The subsidiaries directly negotiate multi-employer pension plans covering other bargaining unit personnel. Pension costs are accrued in accordance with contribution rates established by the PMA, the parties to a plan or the trustees of a plan. Several trusteed, non-contributory, single-employer defined benefit plans and defined contribution plans cover substantially all other employees. The estimation of the Company’s pension and post-retirement benefit expenses and liabilities requires that the Company make various assumptions. These assumptions include factors such as discount rates, expected long-term rate of return on pension plan assets, salary growth, health care cost trend rates, inflation, retirement rates, mortality rates, and expected contributions. Actual results that differ from the assumptions made could materially affect the Company’s financial condition or its future operating results. The effects of changing assumptions are included in unamortized net gains and losses, which directly affect accumulated other comprehensive income. Additionally, these unamortized gains and losses are amortized and reclassified to income (loss) over future periods. Additional information about the Company’s benefit plans is included in Note 11. Uninsured Liabilities: The Company is uninsured for certain losses including, but not limited to, employee health, workers’ compensation, general liability, real and personal property. Where feasible, the Company obtains third-party excess insurance coverage to limit its exposure to these claims. When estimating its uninsured liabilities, the Company considers a number of factors, including historical claims experience, demographic factors, current trends, and analyses provided by independent third-parties. Periodically, management reviews its assumptions and the analyses provided by independent third-parties to determine the adequacy of the Company’s uninsured liabilities. The Company’s uninsured liabilities contain uncertainties because management is required to apply judgment and make long-term assumptions to estimate the ultimate cost to settle reported claims and claims incurred, but not reported, as of the balance sheet date. If management uses different assumptions or if different conditions occur in future periods, the Company’s financial condition or its future operating results could be materially impacted. Legal Contingencies: The Company’s results of operations could be affected by significant litigation adverse to the Company, including, but not limited to, liability claims, antitrust claims, claims related to coastwise trading matters, lawsuits involving private plaintiffs or government agencies, and environmental related matters. The Company records accruals for legal matters when the information available indicates that it is probable that a liability has been incurred and the amount of the loss can be reasonably estimated. Management makes adjustments to these accruals to reflect the impact and status of negotiations, settlements, rulings, advice of outside legal counsel and other information and events that may pertain to a particular matter. Predicting the outcome of claims and lawsuits and estimating related costs and exposure involves substantial uncertainties that could cause actual costs to vary materially from those estimates. In making determinations of likely outcomes of litigation matters, the Company considers many factors. These factors include, but are not limited to, the nature of specific claims including un-asserted claims, the Company’s experience with similar types of claims, the jurisdiction in which the matter is filed, input from outside legal counsel, the likelihood of resolving the matter through alternative dispute resolution mechanisms and the matter’s current status. Recognition of Revenues and Expenses: Voyage revenue is recognized ratably over the duration of a voyage based on the relative transit time in each reporting period. Voyage expenses are recognized as incurred. Hawaii, Alaska, Guam, and certain Pacific island service freight rates are provided in tariffs filed with the Surface Transportation Board of the U.S. Department of Transportation; for other Pacific island services, the rates are filed with the Federal Maritime Commission. The Alaska and China service rates are predominately established by individual contracts with customers. Revenues and costs from terminal and other related services are recognized upon completion of the services. The revenue for Logistics services includes the total amount billed to customers for transportation services. The primary costs include purchased transportation services. Revenue and the related purchased transportation costs are recognized based on relative transit time. The Company reports revenue on a gross basis. The Company serves as principal in transactions because it is responsible for the contractual relationship with the customer, has latitude in establishing prices, has discretion in supplier selection, and retains credit risk. The primary sources of revenue for warehousing services are storage, handling, and value-added packaging. For customer dedicated warehouses, storage revenue is recognized as earned over the life of the contract. Storage revenue generated by the public warehouses is recognized in the month the service is provided according to the terms of the contract. Handling and value-added packaging revenue and expense are recognized in proportion to the services completed. Non-voyage Costs: Non-voyage costs such as terminal operating overhead, and general and administrative expenses are charged to expense as incurred. Dividends: The Company recognizes dividends as a liability when approved by the Board of Directors. Share-Based Compensation: The Company records compensation expense for all share-based payment awards made to employees and directors. The Company’s various equity plans are more fully described in Note 13. Income Taxes: Deferred income taxes are provided for the tax effect of temporary differences between the tax basis of assets and liabilities and their reported amounts in the consolidated financial statements. Deferred tax assets and deferred tax liabilities are adjusted to the extent necessary to reflect tax rates expected to be in effect when the temporary differences reverse. Adjustments may be required to deferred tax assets and deferred tax liabilities due to changes in tax laws and audit adjustments by tax authorities. To the extent adjustments are required in any given period, the adjustments would be included within the tax provision in the consolidated statements of income and comprehensive income and/or consolidated balance sheets. The Company makes certain estimates and judgments in determining income tax expense for consolidated financial statement purposes. These estimates and judgments are applied in the calculation of tax credits, tax benefits and deductions, and in the calculation of certain deferred tax assets and liabilities, which arise from differences in the timing of recognition of revenue and expense for tax and consolidated financial statement purposes. In addition, judgment is required in determining if, based on the weight of available evidence, management believes that it is more likely than not that some portion or all of a recorded deferred tax asset would not be realized in future periods. A valuation allowance would be established if, based on the weight of available evidence, management believes that it is more likely than not that some portion or all of a recorded deferred tax asset would not be realized in future periods (see Note 3 and 10). Significant changes to these estimates may result in an increase or decrease to the Company’s tax provision in a subsequent period. In addition, the calculation of tax liabilities involves significant judgment in estimating the impact of uncertain tax positions taken or expected to be taken with respect to the application of complex tax laws. Resolution of these uncertainties in a manner inconsistent with management’s expectations could materially affect the Company’s financial condition or its future operating results. Comprehensive Income (Loss): Comprehensive income (loss) includes all changes in Shareholders’ Equity, except those resulting from capital stock transactions. Other comprehensive income (loss) in the consolidated statements of income and comprehensive income are shown net of tax benefit (expense) of $(5.0) million, $19.4 million, and $(14.1) million for the years ended December 2015, 2014, and 2013, respectively. Changes in accumulated other comprehensive loss by component, net of tax, are as follows (in millions): Pensions Post Retirement Non- Qualified Plans Foreign Currency Translation Interest Hedge Accumulated Other Comprehensive Income (Loss) Balance at December 31, 2013 $ ) $ ) $ ) $ ) $ ) $ ) Net loss in prior service costs ) ) ) — — ) Amortization of prior service cost ) — — — — ) Amortization of net loss — — Foreign currency translation adjustment — — — — Balance at December 31, 2014 ) ) ) ) ) Net gain in prior service costs — — — Amortization of prior service cost ) ) — — ) Amortization of net loss ) — — Foreign currency translation adjustment — — — — Other — — — — Balance at December 31, 2015 $ ) $ ) $ ) $ $ ) $ ) Basic and Diluted Earnings per Share (“EPS”) of Common Stock: Basic earnings per share are determined by dividing net income by the weighted-average common shares outstanding during the year. The calculation of diluted earnings per share includes the dilutive effect of unexercised non-qualified stock options and non-vested stock units. The computation of weighted average dilutive shares outstanding excluded non-qualified stock options to purchase 0.1 million shares of common stock for each of the years 2015, 2014, and 2013. These amounts were excluded because 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. The denominator used to compute basic and diluted earnings per share is as follows (in millions): Year Ended December 31, 2015 Year Ended December 31, 2014 Year Ended December 31, 2013 Weighted Per Weighted Per Weighted Per Average Common Average Common Average Common Net Common Share Net Common Share Net Common Share Income Shares Amount Income Shares Amount Income Shares Amount Basic: $ $ $ $ $ $ Effect of Dilutive Securities: — — — Diluted: $ $ $ $ $ $ Rounding: Amounts in the consolidated financial statements and Notes are rounded to millions, but per-share calculations and percentages were determined based on amounts before rounding. Accordingly, a recalculation of some per-share amounts and percentages, if based on the reported data, may be slightly different. Reclassification: Amounts for deferred dry-docking costs at December 31, 2014 have been reclassified from other long-term assets in the Company’s consolidated balance sheet to conform to the current year presentation. New Accounting Pronouncements: Business Combinations : In September 2015, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) ASU 2015-16, “ Business Combinations (Topic 805): Simplifying the Accounting for Measurement-Period Adjustments ” (“ASU 2015-16”). ASU 2015-16 requires an acquirer to recognize adjustments to provisional amounts that are identified during the measurement period in the reporting period in which the adjustment amounts are determined, to record an acquisition-to-date adjustment, in the same period’s financial statements, for the effect on earnings of changes in depreciation, amortization, or other income and to disclose the amount of such adjustment that related to prior periods. The guidance is effective for reporting periods beginning after December 15, 2015, and interim periods within those fiscal years; however, early adoption is permitted. The Company adopted ASU 2015-16 during the fourth quarter 2015. ASU 2015-16 is applied prospectively to adjustments to provisional amounts that occur after the effective date. The adoption of ASU 2015-16 did not have a material effect on the Company’s consolidated financial statements upon adoption. Deferred Taxes : In November 2015, the FASB issued ASU 2015-17, “ Balance Sheet Classifications of Deferred Taxes ” (“ASU 2015-17”) which simplifies the presentation of deferred income taxes. The amended guidance requires that all deferred tax assets and liabilities be classified as non-current on the balance sheet. The guidance is effective for reporting periods beginning after December 15, 2016; however, early adoption is permitted. The Company early adopted ASU 2015-17 during the fourth quarter 2015 on a prospective basis. No prior periods were retrospectively adjusted (see Note 10). Revenue from Contracts with Customers: In May 2014, the FASB issued ASU 2014-09, “ Revenue from Contracts with Customers (Topic 606) ” (“ASU 2014-09”). The guidance establishes principles regarding the nature, timing, and uncertainty of revenue from contracts with customers. It removes inconsistencies in existing revenue requirements, provides a more robust framework for addressing revenue issues and improves comparability of revenue recognition practices across entities, industries, jurisdictions and capital markets. The guidance will be effective for annual reporting periods beginning after December 15, 2016, including interim periods within that reporting period. The Company is in the process of evaluating this guidance. |
BUSINESS COMBINATION
BUSINESS COMBINATION | 12 Months Ended |
Dec. 31, 2015 | |
BUSINESS COMBINATION | |
BUSINESS COMBINATION | 3. BUSINESS COMBINATION Horizon Acquisition: The Company completed the Horizon Acquisition on May 29, 2015 (the “Effective Date”) by which MatNav acquired Horizon’s Alaska operations and assumed all of Horizon’s non-Hawaii assets and liabilities. Immediately before the completion of the Horizon Acquisition, Horizon sold its Hawaii operations, and related assets and liabilities to the Pasha Group (the “Pasha Transaction”). Horizon also completed the termination of its Puerto Rico operations during the first quarter of 2015. 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 Horizon Acquisition, the Company repaid the assumed debt which included accrued interest and breakage fees, and redeemed all of Horizon’s outstanding warrants. Total consideration including debt paid and warrants redeemed by the Company is as follows: (in millions) Total Consideration Common shares $ Warrants Horizon’s debt (including accrued interest and breakage fees) Total $ 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, intangible assets, 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 Company’s final fair value analysis and purchase price calculations. Consequently, the fair value amounts presented are preliminary and are subject to revision. Final estimates of fair value, including the estimated fair value of multi-employer withdrawal liability may be significantly different from those reflected in the Company’s Consolidated Financial Statements as of December 31, 2015. The following table summarizes the estimated fair values assigned to Horizon’s assets acquired and liabilities assumed as a result of the Horizon Acquisition as of December 31, 2015: Purchase Price Allocation (in millions) Total 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 liability ) Capital lease obligations ) Horizon’s debt and warrants ) Total identifiable assets less liabilities ) Total cash paid for common shares ) Goodwill $ The amounts above include $5.5 million of purchase price adjustments recorded to the preliminary purchase price allocation initially reported in the Company’s interim condensed consolidated financial statements for the three and six-months ended June 30, 2015. Purchase price allocation adjustments relate primarily to the receipt of additional information regarding the fair value of certain assets acquired and liabilities assumed. Deferred tax assets, net: The Company recorded Horizon’s deferred tax assets and liabilities, net of any change of ownership limitations and valuation allowance for State operating losses, of $45.6 million. Property and equipment: Property and equipment of $170.4 million includes the fair value acquisition of seven Jones Act qualified containerships and vessel spare parts of $130.7 million, containers and equipment of $17.9 million, terminal facilities and other property of $9.7 million, and construction in progress of $12.1 million. Intangibles, customer relationships: The Company recorded intangible assets of $140.0 million related to customer relationships, which are being amortized over 21 years. In determining the amortization period, the Company considered the historical trends of Horizon’s customers in the Alaska service and related attrition rates. The Company also considered potential future attrition risks, which are mitigated by the limited number of existing Jones Act-qualified vessels available that are required to perform competing ocean transportation services in Alaska, and the long delivery lead times associated with building such vessels in the U.S. The Company also considered existing competition and the high capital investment required to establish an asset-based ocean transportation business, the substantial investment required in infrastructure, and the need to develop a broad base of customer relationships over a period of time. As a result, the Company believes that the Alaska service customers are considered less vulnerable to attrition. Multi-employer withdrawal liability: Horizon ceased all of its operations in Puerto Rico during the first quarter of 2015 which resulted in a mass withdrawal from its multi-employer ILA-PRSSA Pension Fund. The Company estimated the liability related to the multi-employer pension plan of $60.6 million based upon the expected future undiscounted payments of $73.9 million at May 29, 2015, to be paid by quarterly payments of approximately $1.0 million commencing the fourth quarter of 2015, payable over a period of approximately 18 years, discounted using the risk-free U.S. Treasury rate (see Note 12). Debt and warrants: The Company recorded the fair value of debt and warrants of $467.5 million arising from the Horizon Acquisition, which included accrued interest and breakage fees. The Company subsequently repaid all of the debt and redeemed the warrants during the period ended June 30, 2015. Goodwill: The Company recorded goodwill of $214.2 million arising from the Horizon 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 Accounting Standards Codification (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. The goodwill is recorded in the Ocean Transportation segment (see Note 6). Goodwill arises as a result of several factors. The Horizon Acquisition represents an extension of the Company’s existing platform on the U.S. West Coast and extends the geographical reach of the Company’s ocean transportation services to include the port of Tacoma, Washington, to the ports of Anchorage, Kodiak, and Dutch Harbor in Alaska. The Horizon Acquisition also includes container stevedoring, container equipment and maintenance, and other terminal services in the Alaska ports of Anchorage, Kodiak and Dutch Harbor. Furthermore, the Horizon Acquisition 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. The Company’s Consolidated Statements of Income and Comprehensive Income for the year ended December 31, 2015 include operating revenue of $179.3 million, and net losses before income taxes of $7.8 million, respectively, from Horizon’s operations. One-time acquisition related costs of approximately $19.0 million incurred as a result of the Horizon Acquisition, is included in selling, general and administrative costs in the Consolidated Statements of Income and Comprehensive Income. 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 Horizon 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 Horizon 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. Unaudited pro forma financial information for the years ended December 31, 2015 and 2014 is as follows: (Unaudited) Year Ended December 31, (in millions, except per-share amount) 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 The following is a summary of the pro-forma adjustments to the Combined Consolidated Statement of Operations: (1) Eliminate operating revenue and net income related to Horizon’s Hawaii operations to reflect the Pasha Transaction. (2) Eliminate Horizon’s interest expense due to the repayment of Horizon’s debt, and record interest expense based upon an estimated Company borrowings. (3) Record additional depreciation and amortization expense due to increase in fair value of the acquired tangible and intangible assets. (4) Record adjustment to income tax expense based upon Matson’s estimated income tax rate. (5) Record adjustments for certain acquisition related expenses. |
INVESTMENT IN TERMINAL JOINT VE
INVESTMENT IN TERMINAL JOINT VENTURE | 12 Months Ended |
Dec. 31, 2015 | |
INVESTMENT IN TERMINAL JOINT VENTURE | |
INVESTMENT IN TERMINAL JOINT VENTURE | 4. INVESTMENT IN TERMINAL JOINT VENTURE The Company accounts for its 35 percent ownership interest in the related party Terminal Joint Venture using the equity method of accounting. The Company records its share of income or loss in the Terminal Joint Venture in operating expenses within the Ocean Transportation segment, due to operations of the Terminal Joint Venture being an integral part of the Company’s Ocean Transportation business. The Company’s investment in the Terminal Joint Venture was $66.4 million and $64.4 million at December 31, 2015 and 2014, respectively. The Company’s share of income or loss recorded in the Consolidated Statements of Income and Comprehensive Income, and dividends received by the Company during the years ended December 31, 2015, 2014 and 2013 is as follows (in millions): Years Ended December 31, Terminal Joint Venture 2015 2014 2013 Company Share of Net Income (Loss) $ $ $ ) Distributions Received — — The Company’s Ocean Transportation segment operating costs include $174.1 million, $164.8 million and $164.3 million, for 2015, 2014 and 2013, respectively, for terminal services provided by SSAT. Accounts payable and accrued liabilities in the consolidated balance sheets include $19.5 million and $17.5 million for terminal services payable to the Terminal Joint Venture at December 31, 2015 and 2014, respectively. A summary of unaudited financial information for the Terminal Joint Venture at December 31, 2015 and 2014 is as follows (in millions): As of December 31, Balance Sheet (Unaudited) 2015 2014 Current assets $ $ Noncurrent assets Total Assets $ $ Current liabilities $ $ Noncurrent liabilities Equity Total Liabilities and Equity $ $ Years Ended December 31, Statement of Operations (Unaudited) 2015 2014 2013 Operating revenue $ $ $ Operating costs and expenses Operating income (loss) ) ) Net Income (Loss) (1) $ $ $ ) (1) Includes earnings from equity method investments held by the Terminal Joint Venture. |
PROPERTY AND EQUIPMENT
PROPERTY AND EQUIPMENT | 12 Months Ended |
Dec. 31, 2015 | |
PROPERTY AND EQUIPMENT | |
PROPERTY AND EQUIPMENT | 5. PROPERTY AND EQUIPMENT Property and equipment at December 31, 2015 and 2014, and depreciation expense in the three years ended December 31, 2015 includes the following (in millions): As of December 31, 2015 Cost Accumulated Depreciation Net Book Value Vessels $ $ $ Containers and equipment Terminal facilities and other property Construction in progress — Total $ $ $ As of December 31, 2014 Cost Accumulated Depreciation Net Book Value Vessels $ $ $ Containers and equipment Terminal facilities and other property Construction in progress — Total $ $ $ Years Ended December 31, 2015 2014 2013 Depreciation Expense $ $ $ Property and equipment included assets subject to capital leases with a net book value of $6.4 million and $2.6 million, net of accumulated depreciation of $1.1 million and $0.7 million at December 31, 2015 and 2014, respectively. Amortization recorded in the consolidated statement of income and comprehensive income was $0.6 million, $0.3 million and $0.3 million for the years ended December 31, 2015, 2014 and 2013, respectively. During the fourth quarter of 2013, the Company entered into agreements with a shipyard for the construction of two new 3,600 twenty-foot equivalent units Aloha-class container vessels at a cost of $418.0 million. The container vessels are expected to be delivered during the third quarter of 2018 and the first quarter of 2019. Progress payments to the shipyard of $29.3 million and $8.4 million as of December 31, 2015 and 2014, respectively, are included in construction in progress. |
GOODWILL AND INTANGIBLE ASSETS
GOODWILL AND INTANGIBLE ASSETS | 12 Months Ended |
Dec. 31, 2015 | |
GOODWILL AND INTANGIBLE ASSETS | |
GOODWILL AND INTANGIBLE ASSETS | 6. GOODWILL AND INTANGIBLE ASSETS Changes in the Company’s goodwill for the years ended December 31, 2015 and 2014 consist of the following (in millions): Goodwill Ocean Transportation Logistics Total Balance at December 31, 2013 $ $ $ Additions — — — Balance at December 31, 2014 Additions — Balance at December 31, 2015 $ $ $ Goodwill related to the Ocean Transportation reporting unit increased $214.2 million during the year ended December 31, 2015 related to the Horizon Acquisition (see Note 3). There was no accumulated impairment related to goodwill as of December 31, 2015 and 2014. Intangible assets as of December 31, 2015 and 2014 include the following (in millions): Intangible Assets Ocean Transportation Logistics Total Gross Amount at December 31, 2014 $ $ $ Additions Gross Amount at December 31, 2015 Accumulated Amortization ) ) ) Net Amount at December 31, 2015 $ $ $ Intangible Assets Ocean Transportation Logistics Total Gross Amount at December 31, 2013 $ $ $ Additions — — — Gross Amount at December 31, 2014 Accumulated Amortization ) ) ) Net Amount at December 31, 2014 $ $ $ Intangible assets related to Ocean Transportation increased by $140.0 million during the year ended December 31, 2015 related to customer relationships acquired as part of the Horizon Acquisition, and are being amortized over 21 years (see Note 3). A mortization expense was $4.4 million, $1.3 million and $0.8 million for 2015, 2014, and 2013, respectively. Estimated amortization expenses related to intangible assets over the next five years are as follows (in millions): Estimated Amortization Year Expense 2016 $ 2017 2018 2019 2020 Thereafter Total $ |
CAPITAL CONSTRUCTION FUND
CAPITAL CONSTRUCTION FUND | 12 Months Ended |
Dec. 31, 2015 | |
CAPITAL CONSTRUCTION FUND. | |
CAPITAL CONSTRUCTION FUND | 7. CAPITAL CONSTRUCTION FUND The Company is party to an agreement with the U.S. Department of Transportation, Maritime Administration (“MARAD”) that established a Capital Construction Fund (“CCF”) program under provisions of the Merchant Marine Act of 1936, as amended (the “Merchant Marine Act”). The CCF program was created to assist owners and operators of U.S. flag vessels in raising capital necessary for the modernization and expansion of the U.S. merchant marine. CCF funds may be used for the acquisition, construction, or reconstruction of vessels, and for repayment of existing vessel indebtedness through the deferment of federal income taxes on certain deposits of monies and other property placed into the CCF. Qualified withdrawals from the CCF must be used for investment in vessels and certain related equipment built in the U.S., and for use between covered U.S. ports as described by the Merchant Marine Act (see Item 1 of Part 1 for additional information on Maritime Laws and the Jones Act). Participants of the CCF must also meet certain U.S. citizenship requirements. Deposits into the CCF are limited by certain applicable earnings and other conditions. Such deposits, once made, are available as tax deductions in the Company’s tax provision. Qualified withdrawals from the CCF do not give rise to a current tax liability, but reduce the depreciable basis of the vessels or certain related equipment for income tax purposes. However, if withdrawals are made from the CCF for general corporate purposes or other non-qualified purposes, or upon termination of the agreement, they are taxable with interest payable from the year of deposit. Amounts deposited into the CCF are a preference item for calculating federal alternative minimum taxable income. Deposits not committed for qualified purposes within 25 years from the date of deposit will be treated as non-qualified withdrawals over the subsequent five years. Under the terms of the CCF agreement, the Company may designate certain qualified earnings as “accrued deposits” or may designate, as obligations of the CCF, qualified withdrawals to reimburse qualified expenditures initially made with operating funds. Such accrued deposits to, and withdrawals from, the CCF are reflected on the consolidated balance sheets either as obligations of the Company’s current assets or as receivables from the CCF. As of December 31, 2015 and 2014, $176.6 million and $150.7 million of eligible accounts receivable were assigned to the CCF. 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 consolidated balance sheets. At December 31, 2015 and 2014, the Company had a nominal amount and $27.5 million on deposit in the CCF invested in a money market fund, and is classified as a long-term asset in the Company’s Consolidated Balance Sheet. |
DEBT
DEBT | 12 Months Ended |
Dec. 31, 2015 | |
DEBT | |
DEBT | 8. DEBT At December 31, 2015 and 2014, the Company’s debt consisted of the following (in millions): As of 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 3.92%, payable through 2045 — 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 $ $ Description of Debt: The following is a description of the Company’s debt: Term Loans: The 5.79 percent notes payable through 2020 are amortized by semi-annual principal payments of $3.5 million plus interest. During the second quarter of 2012, the Company issued new unsecured, fixed rate, amortizing long-term debt of $170.0 million, which funded in three tranches, $77.5 million at an interest rate of 3.66 percent maturing in 2023, $55.0 million at an interest rate of 4.16 percent maturing in 2027, and $37.5 million at an interest rate of 4.31 percent maturing in 2032. Interest is payable semi-annually. The weighted average coupon and average life of the three tranches of debt are 3.97 percent and 9.2 years, respectively. The notes began to amortize in 2015 with aggregate semi-annual payments of $4.6 million, which will continue through 2016, followed by $8.4 million in 2017 through mid-year 2023, $3.8 million through mid-year 2027, and $1.2 million thereafter. In January 2014, the Company issued $100 million of 30-year senior unsecured private placement notes (the “2014 Notes”). The 2014 Notes have a weighted average life of 14.5 years and bear interest at a rate of 4.35 percent, payable semi-annually. The 2014 Notes will begin to amortize in 2021, with annual principal payments of $5.0 million in 2021, $7.5 million in 2022 and 2023, $10.0 million from 2024 to 2027, and $8.0 million in 2028. Starting in 2029, and in each year thereafter until 2044, annual principal payments will be $2.0 million. In July 2015, the Company entered into a private placement note purchase agreement for the issuance of $75.0 million of 30-year senior unsecured notes (the “2015 Notes”). The 2015 Notes funded on October 1, 2015, have a weighted average life of approximately 13 years, and will bear interest at a rate of 3.92 percent, payable semi-annually. The 2015 Notes will begin to amortize in 2017, with annual principal payments of approximately $1.8 million through 2019. During the years 2020 to 2026, the annual principal payments will range between approximately $1.3 million and $8.0 million. Starting in 2027, and in each year thereafter, the annual principal payments will be approximately $1.5 million. Title XI Bonds: In September 2003, the Company issued $55.0 million in U.S. Government guaranteed vessel finance bonds (Title XI) to partial ly finance the delivery of the MV Manukai . The secured bonds have a final maturity in September 2028 with a coupon of 5.34 percent. The bonds are amortized by semi-annual payments of $1.1 million plus interest. In August 2004, the Company issued $55.0 million of U.S. Government guaranteed vessel finance bonds (Title XI) to partially finance the delivery of the MV Maunawili . The secured bonds have a final maturity in July 2029, with a coupon of 5.27 percent. The bonds are amortized by semi-annual payments of $1.1 million plus interest. Revolving Credit Facility: In 2012, the Company entered into a $375.0 million, five-year unsecured revolving credit facility with a syndicate of banks to provide the Company with additional sources of liquidity for working capital requirements and investment opportunities (the “Credit Facility”). The Credit Facility includes a $100 million sub-limit for the issuance of standby and commercial letters of credit, and a $50 million sub-limit for swing line loans. The Credit Facility also includes an uncommitted option to increase the Credit Facility by $75 million. On July 30, 2015, the Company entered into an amendment to the credit facility (the “Credit Facility Amendment). The amendment includes an increase in the borrowing capacity to $400 million, and a five year extension of the maturity date to July 30, 2020. In addition, the Credit Facility Amendment includes a number of amended terms, including modifications to certain definitions and covenants, and includes an uncommitted option to increase the borrowing capacity of the Credit Facility Amendment by an additional $150 million. 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 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 Credit Facility 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 Credit Facility Amendment, plus a margin that ranges from zero percent to 0.75 percent. Based upon the Company’s Leverage Ratio, the interest rate applicable to any borrowings would have been approximately 1.4 percent at December 31, 2015. The Company also entered into other amendments to its existing term loan agreements that included modifications to certain definitions and covenants, as defined within the agreements. Interest rates and other substantive terms remained unchanged. As of December 31, 2015 and 2014, the Company had no borrowings outstanding under the amended Credit Facility Amendment. As of December 31, 2015, the Company had $389.0 million of availability under the amended Credit Facility. The Company used $11.0 million of the sub-limit for letters of credit outstanding as of December 31, 2015. Capital leases: As of December 31, 2015, the Company had capital lease obligations of $3.1 million related to certain containers and equipment . Capital leases have been classified as current and long-term debt in the Company’s consolidated balance sheets. Debt Guarantees: All of the Company’s debt as of December 31, 2015 was unsecured, except for $59.4 million in Title XI bonds, which is guaranteed by the Company’s significant subsidiaries. All of the Company’s debt is fixed rate debt except for the amended Credit Facility. Debt Covenants: Principal financial covenants as defined in Matson’s Credit Facility and long term fixed rate debt include, but are not limited to: · The ratio of debt to consolidated EBITDA cannot exceed 3.25 to 1.00 for each fiscal four quarter period; · The ratio of consolidated EBITDA to interest expense as of the end of any fiscal four quarter period cannot be less than 3.50 to 1.00; and · The principal amount of priority debt at any time cannot exceed 20 percent of consolidated tangible assets; and the principal amount of priority debt that is not Title XI priority debt at any time cannot exceed 10 percent of consolidated tangible assets. Priority debt, as further defined in the Credit Facility Amendment, is all debt secured by a lien on the Company’s assets and certain subsidiary debt. The Company was in compliance with these covenants as of December 31, 2015. Debt Maturities: At December 31, 2015, debt maturities during the next five years and thereafter are as follows (in millions): Year Total 2016 $ 2017 2018 2019 2020 Thereafter Total debt $ |
LEASES
LEASES | 12 Months Ended |
Dec. 31, 2015 | |
LEASES | |
LEASES | 9. LEASES The Company leases certain property and equipment, and other facilities under various operating lease agreements, with terms that range from 1 to 50 years. Such leases generally include provisions for the maintenance of the leased assets, options to purchase the assets at fair value, and renewal options to extend the lease agreements. Rent expense recorded in costs and expenses in the Consolidated Statement of Income and Comprehensive Income from operating leases totaled $65.6 million, $58.3 million and $58.2 million for the years ended December 31, 2015, 2014 and 2013, respectively, and includes volume-based terminal rent. Additionally, rent expense for short-term and cancelable equipment rentals was $39.9 million, $27.6 million and $20.5 million in 2015, 2014, and 2013, respectively. Management expects that in the normal course of business most operating leases will be renewed or replaced by other similar leases. Future minimum payments under operating leases as of December 31, 2015 were as follows (in millions): Total Operating Year Leases 2016 $ 2017 2018 2019 2020 Thereafter Total minimum lease payments $ |
INCOME TAXES
INCOME TAXES | 12 Months Ended |
Dec. 31, 2015 | |
INCOME TAXES | |
INCOME TAXES | 10. INCOME TAXES The income tax expense on income from continuing operations for the years ended December 31, 2015, 2014 and 2013 consisted of the following (in millions): Years Ended December 31, 2015 2014 2013 Current: Federal $ $ $ ) State ) Total ) Deferred: Total income tax expense $ $ $ Income tax expense for 2015, 2014, and 2013 differs from amounts computed by applying the statutory federal rate to income from continuing operations before income taxes for the following reasons: Years Ended December 31, 2015 2014 2013 Computed federal income tax expense % % % State income tax % % % Valuation allowance % % — Foreign taxes % % — Deferred tax adjustment % )% — Unrecognized tax benefits % )% )% Other — net % % % Effective income tax rate % % % The Company recorded a valuation allowance against operating losses related to a foreign subsidiary of $1.8 million and $4.1 million in 2015 and 2014, respectively, as the Company determined the tax benefits associated with such losses may not be realized in future periods. No valuation allowance was recorded in 2013. The tax effects of temporary differences that give rise to significant portions of the deferred tax assets and deferred tax liabilities at December 31 of each year are as follows (in millions): As of December 31, 2015 2014 Deferred tax assets: Benefit plans $ $ Federal net operating losses — Insurance reserves State net operating losses — Foreign losses Alternative minimum tax credits Allowance for doubtful accounts Other Total deferred tax assets Valuation allowance ) ) Total Deferred tax assets, net of valuation allowance Deferred tax liabilities: Basis differences for property and equipment Capital Construction Fund Intangibles Deferred revenue Joint ventures and other investments Reserves ) Total deferred tax liabilities Deferred tax liability, net $ $ Effective December 31, 2015, the Company early adopted ASU 2015-17 on a prospective basis as current net deferred tax assets are not significant to the Company’s consolidated balance sheets, and no prior periods were retrospectively adjusted (see Note 2). As of December 31, 2014, the Company’s net current deferred income taxes were $8.0 million. The Company’s income taxes payable has been reduced by the tax benefits from share-based compensation. The Company receives an income tax benefit for exercised stock options calculated as the difference between the fair market value of the stock issued at the time of exercise and the option exercise price, tax effected. The Company also receives an income tax benefit for non-vested stock when it vests, measured as the fair market value of the stock at the time of vesting, tax effected. The net tax benefits from share-based transactions were $2.6 million and $0.8 million for 2015 and 2014, respectively, and the portion of the tax benefit related to the excess of the amount reported as the tax deduction over expense was reflected as an increase to additional paid in capital in the Consolidated Statements of Shareholders’ Equity. Operating Loss and Tax Credit Carryforwards: The Company’s U.S. federal income tax net operating losses (“NOL”) carryforwards were $194.2 million, state income tax NOLs were $192.4 million, and foreign income tax NOLs were $20.2 million as of December 31, 2015, respectively. The Company’s foreign income tax NOLs were $14.6 million as of December 31, 2014 and the Company had no U.S. federal or state NOLs at that date. The Company’s U.S. federal and state income tax NOL’s will expire on various dates through December 31, 2034. The Company’s alternative minimum tax credit carryforwards were $3.6 million and $1.5 million as of December 31, 2015 and December 31, 2014, respectively, and have no expiration dates. The Company recorded a valuation allowance of $12.6 million against all of the Company’s foreign income tax NOLs and a portion of the state income tax NOLs that it believes it is more likely than not that the benefit from these amounts will not be realized. The U.S. federal and state income tax NOL carryforwards in the income tax returns filed included unrecognized tax benefits. The deferred tax assets recognized for those NOLs are presented net of these unrecognized tax benefits. Because of the change of ownership provisions of the Tax Reform Act of 1986, use of a portion of the Company’s domestic NOL and tax credit carryforwards may be limited in future periods. Further, a portion of the carryforwards may expire before being applied to reduce future income tax liabilities. Unrecognized Tax Benefits: Total unrecognized benefits represent the amount that, if recognized, would favorably affect the Company’s effective rate in future periods. The Company does not expect a material change in gross unrecognized benefits in the next twelve months. A reconciliation of the beginning and ending amount of gross unrecognized tax benefits is as follows (in millions): Unrecognized Tax Benefits: Amount Balance at December 31, 2012 $ Additions for tax positions of prior years Reductions for lapse of statute of limitations ) Balance at December 31, 2013 Additions for tax positions of prior years Reductions for lapse of statute of limitations ) Balance at December 31, 2014 Additions for tax positions of prior years Additions from unrecognized tax benefits acquired Reductions for lapse of statute of limitations ) Balance at December 31, 2015 $ The Company recognizes potential accrued interest and penalties related to unrecognized tax benefits in income tax expense. To the extent interest and penalties are not ultimately assessed with respect to the settlement of uncertain tax positions, amounts accrued will be reduced and reflected as a reduction of the overall income tax provision. Interest accrued related to the balance of unrecognized tax benefits totaled $0.4 million, $0.2 million and $0.3 million as of December 31, 2015, 2014 and 2013, respectively. The Company is no longer subject to U.S. federal income tax audits for years before 2012, and substantially all material income tax matters have been concluded for years through 2010. The Company is routinely involved in State, local income and excise tax audits. |
PENSION AND POST-RETIREMENT PLA
PENSION AND POST-RETIREMENT PLANS | 12 Months Ended |
Dec. 31, 2015 | |
PENSION AND POST-RETIREMENT PLANS | |
PENSION AND POST-RETIREMENT PLANS | 11. PENSION AND POST-RETIREMENT PLANS Non-bargaining Plans: The Company has two funded qualified single-employer defined benefit pension plans that cover certain non-bargaining unit employees and bargaining unit employees. In addition, the Company has plans that provide certain retiree health care and life insurance benefits to substantially all salaried, non-bargaining employees hired before 2008 and to certain bargaining unit employees. Employees are generally eligible for such benefits upon retirement and completion of a specified number of years of service. The Company does not pre-fund these health care and life insurance benefits, and has the right to modify or terminate certain of these plans in the future. Certain groups of retirees pay a portion of the benefit costs. Plan Administration, Investments and Asset Allocations: The Company has an Investment Committee that meets regularly with investment advisors to establish investment policies, direct investments and select investment options for the qualified plans. The Investment Committee is also responsible for appointing investment managers and monitoring their performance. The Company’s investment policy permits investments in marketable equity securities, such as domestic and foreign stocks, domestic and foreign bonds, venture capital, real estate investments, and cash equivalents. The Company’s investment policy does not permit direct investment in certain types of assets, such as options or commodities, or the use of certain strategies, such as short selling or the purchase of securities on margin. The Company’s investment strategy for its qualified pension plan assets is to achieve a diversified mix of investments that provides for long-term growth at an acceptable level of risk, and to provide sufficient liquidity to fund ongoing benefit payments. The Company has engaged a number of investment managers to implement various investment strategies to achieve the desired asset class mix, liquidity and risk diversification objectives. The Company’s target and actual asset allocations at December 31, 2015 and 2014 were as follows: Asset categories Target 2015 2014 Domestic equity securities % % % International equity securities % % % Debt securities % % % Real estate % % % Other and cash % % % Total % % % The Company’s investments in equity securities primarily include domestic large-cap and mid-cap companies, but also includes an allocation to small-cap and international equity securities. Equity investments do not include any direct holdings of the Company’s stock but may include such holdings to the extent that the stock is included as part of certain mutual fund holdings. Debt securities include investment-grade and high-yield corporate bonds from diversified industries, mortgage-backed securities, and U.S. Treasuries. Other types of investments include funds that invest in commercial real estate assets, and to a lesser extent, private equity investments in technology companies. All assets within specific funds are allocated to the targeted asset allocation of the fund. The expected return on plan assets is principally based on the Company’s historical returns combined with the Company’s long-term future expectations regarding asset class returns, the mix of plan assets, and inflation assumptions. The one-, three-, and five-year pension asset returns (losses) were (2.0) percent, 8.0 percent, and 6.8 percent, respectively, and the long-term average return (since plan inception in 1989) has been approximately 8.3 percent. Over the long-term, the actual returns have generally exceeded the benchmark returns used by the Company to evaluate performance of its fund managers. The Company’s pension plan assets are held in a master trust and are stated at estimated fair values of the underlying investments. Purchases and sales of securities are recorded on a trade-date basis. Interest income is recorded on the accrual basis. Dividends are recorded on the ex-dividend date. Equity Securities: Domestic and international common stocks are valued by obtaining quoted prices on recognized and highly liquid exchanges. Fixed Income Securities: Corporate bonds and U.S. government treasury and agency securities are valued based upon the closing price reported in the market in which the security is traded. U.S. government agency and corporate asset-backed securities may utilize models, such as a matrix pricing model, that incorporate other observable inputs when broker/dealer quotes are not available, such as cash flow, security structure, or market information. Real Estate, Private Equity and Insurance Contract Interests : The fair value of real estate, private equity and insurance contract interests are determined by the issuer based on the unit values of the funds. Unit values are determined by dividing the fund’s net assets by the number of units outstanding at the valuation date. Fair value for underlying investments in real estate is determined through independent property appraisals. Fair value of underlying investments in private equity is determined based on information provided by the general partner taking into consideration the purchase price of the underlying securities, developments concerning the investee company subsequent to the acquisition of the investment, financial data and projections of the investee company provided by the general partner, and such other factors as the general partner deems relevant. Insurance contracts are principally invested in real estate assets, which are valued based upon independent appraisals. The fair values of the Company’s pension plan assets at December 31, 2015 and 2014, by asset category, are as follows (in millions): Fair Value Measurements at December 31, 2015 Asset Category Total Quoted Prices in Active Markets (Level 1) Significant Observable Inputs (Level 2) Significant Unobservable Inputs (Level 3) Cash $ $ $ — $ — Equity securities: U.S. large-cap — U.S. mid- and small-cap — International large-cap — — International small-cap — — Fixed income securities: U.S. Treasuries — — Municipal bonds — — Investment grade U.S. corporate bonds — — High-yield U.S. corporate bonds — — Emerging markets fixed income — — Other types of investments: Real estate partnership interests — — Private equity partnership interests — — Total $ $ $ $ Fair Value Measurements at December 31, 2014 Asset Category Total Quoted Prices in Active Markets (Level 1) Significant Observable Inputs (Level 2) Significant Unobservable Inputs (Level 3) Cash $ $ $ — $ — Equity securities: U.S. large-cap — — U.S. mid- and small-cap — — International large-cap — International small-cap — — Fixed income securities: U.S. Treasuries — — Municipal bonds — — Investment grade U.S. corporate bonds — — High-yield U.S. corporate bonds — — Emerging markets fixed income — — Other types of investments: Real estate partnership interests — — Private equity partnership interests — — Total $ $ $ $ The table below presents a reconciliation of all pension plan investments measured at fair value on a recurring basis using significant unobservable inputs (Level 3) for the years ended December 31, 2015 and 2014 (in millions): Fair Value Measurements Using Significant Unobservable Inputs (Level 3) Real Estate Private Equity Total Balance at December 31, 2013 $ $ $ Actual return (loss) on plan assets: Assets held at the reporting date — Assets sold during the period — Purchases, sales and settlements, net ) — ) Balance at December 31, 2014 Actual return (loss) on plan assets: Assets held at the reporting date ) Assets sold during the period — Purchases, sales and settlements, net ) — ) Balance at December 31, 2015 $ $ $ Contributions to each of the qualified single-employer defined benefit pension plans are determined annually by the Company’s pension administrative committee, based upon the actuarially determined minimum required contribution under the Employee Retirement Income Security Act of 1974 (“ERISA”), as amended, the Pension Protection Act of 2006, and the maximum deductible contribution allowed for tax purposes. In 2015, 2014 and 2013, the Company contributed $4.7 million, $6.5 million and $3.5 million, respectively. The Company’s funding policy is to contribute cash to its pension plans so that it meets at least the minimum contribution requirements. The benefit formulas for employees who are members of collective bargaining units are determined according to the collective bargaining agreements, either using final average pay as the base or a flat dollar amount per year of service. Effective December 31, 2011, the Company froze benefit accruals under the final average pay formula for salaried, non-bargaining unit employees hired before January 1, 2008 and transitioned them to the same cash balance formula for employees hired on or after January 1, 2008. Retirement benefits under the cash balance formula are based on a fixed percentage of employee eligible compensation, plus interest. The plan interest credit rate will vary from year to year based on the ten-year U.S. Treasury rate. Benefit Plan Assets and Obligations: The measurement date for the Company’s benefit plan disclosures is December 31 of each year. The status of the funded qualified defined benefit pension plans and the unfunded post-retirement benefit plans at December 31, 2015 and 2014 are shown below (in millions): Pension Benefits Other Post-retirement Benefits December 31, December 31, 2015 2014 2015 2014 Change in Benefit Obligation: Benefit obligation at beginning of year $ $ $ $ Service cost Interest cost Plan participants’ contributions — — Actuarial (gain) loss ) ) Benefits paid, net of subsidies received ) ) ) ) Expenses paid ) ) — — Benefit obligation at end of year $ Change in Plan Assets: Fair value of plan assets at beginning of year — — Actual return on plan assets ) — — Plan participants’ contributions — — Employer contributions Benefits paid, net of subsidies received ) ) ) ) Expenses paid ) ) — — Fair value of plan assets at end of year — — Funded Status and Recognized Liability $ ) $ ) $ ) $ ) Amounts recognized on the consolidated balance sheets and in accumulated other comprehensive loss at December 31, 2015 and 2014 were as follows (in millions): Pension Benefits Other Post-retirement Benefits December 31, December 31, 2015 2014 2015 2014 Current liabilities $ — $ — $ ) $ ) Non-current liabilities, net ) ) ) ) Total $ ) $ ) $ ) $ ) Net loss (net of taxes) $ $ $ $ Prior service credit (net of taxes) ) ) — — Total $ $ $ $ The information for qualified pension plans with an accumulated benefit obligation in excess of plan assets at December 31, 2015 and 2014 is shown below (in millions): 2015 2014 Projected benefit obligation $ $ Accumulated benefit obligation $ $ Fair value of plan assets $ $ The estimated net loss and prior service credit for the qualified pension plans that will be amortized from accumulated other comprehensive loss into net periodic benefit cost, net of tax, in 2016 is $1.8 million. The estimated net loss and prior service cost for the other post-retirement benefit plans that will be amortized from accumulated other comprehensive loss into net periodic benefit cost, net of tax, in 2016 is $0.8 million. Unrecognized gains and losses of the post-retirement benefit plans are amortized over five years. Although current health care costs are expected to increase, the Company attempts to mitigate these increases by maintaining caps on certain of its benefit plans, using lower cost health care plan options where possible, requiring that certain groups of employees pay a portion of their benefit costs, self-insuring for certain insurance plans, encouraging wellness programs for employees, and implementing measures to mitigate future benefit cost increases. Components of the net periodic benefit cost and other amounts recognized in other comprehensive income (loss) for the qualified pension plans and the post-retirement health care and life insurance benefit plans during 2015, 2014, and 2013, are shown below (in millions): Pension Benefits Other Post-retirement Benefits December 31, December 31, 2015 2014 2013 2015 2014 2013 Components of Net Periodic Benefit Cost: Service cost $ $ $ $ $ $ Interest cost Expected return on plan assets ) ) ) — — — Amortization of net loss Amortization of prior service cost ) ) ) — — — Net periodic benefit cost $ $ ) $ $ $ $ Other Changes in Plan Assets and Benefit Obligations Recognized in Other Comprehensive Income (net of tax) Net loss (gain) $ ) $ $ ) $ ) $ $ New prior service cost — — — — — Amortization of unrecognized loss ) ) ) ) ) ) Amortization of prior service credit — — — Total recognized in other comprehensive income $ ) $ $ ) $ ) $ $ Total recognized in net periodic benefit cost and other comprehensive income $ ) $ $ ) $ $ $ The weighted average assumptions used to determine benefit information during 2015, 2014, and 2013, were as follows: Pension Benefits Other Post-retirement Benefits December 31, December 31, 2015 2014 2013 2015 2014 2013 Weighted Average Assumptions: Discount rate (1) % % % % % % Expected return on plan assets % % % Rate of compensation increase % % % % % % Initial health care cost trend rate (2) % % Pre-65 group % Post-65 group % Ultimate health care cost trend rate % % % Year ultimate health care cost trend rate is reached (2) Pre-65 group Post-65 group (1) The Company derives a single equivalent rate utilizing a yield curve constructed from a portfolio of high-quality corporate bonds with various maturities. (2) Starting in 2015, initial and ultimate health care trend rates used to determine obligations are different for pre-65 and post-65 populations. In 2014, the Company adopted a modified version of the new mortality table (RP-2014) issued by the Society of Actuaries in October 2014 along with a modified mortality improvement scale for the purposes of determining the Company’s mortality assumption used in its defined benefit and other post-retirement plan liability calculations. The use of the new table resulted in an increase of approximately $17.6 million and $3.9 million to the projected benefit obligation for pension and other post-retirement benefits, respectively as of December 31, 2014. If the assumed health care cost trend rate were increased or decreased one percentage point, the accumulated post-retirement benefit obligation, as of December 31, 2015, 2014, and 2013 and the net periodic post-retirement benefit cost for 2015, 2014 and 2013, would have increased or decreased as follows (in millions): Other Post-retirement Benefits One Percentage Point Increase Decrease 2015 2014 2013 2015 2014 2013 Effect on total of service and interest cost components $ $ $ $ ) $ ) $ ) Effect on post-retirement benefit obligation $ $ $ $ ) $ ) $ ) Current liabilities of $3.7 million and $4.1 million, related to non-qualified pension benefits and post-retirement benefits, are classified as accrued and other liabilities in the consolidated balance sheets as of December 31, 2015 and 2014, respectively. Non-qualified Pension Plans: The Company has non-qualified supplemental pension plans covering certain employees and retirees, which provide for incremental pension payments from the Company’s general funds so that total pension benefits would be substantially equal to amounts that would have been payable from the Company’s qualified pension plans if it were not for limitations imposed by income tax law. A few employees and retirees receive additional supplemental pension benefits. The Company also has a frozen non-qualified pension plan that covers one outside director and pays retirement benefits in a lump sum from the Company’s general funds. The obligations relating to these plans totaled $4.3 million and $5.4 million at December 31, 2015 and 2014, respectively. The expense associated with the non-qualified plans was $0.6 million in 2015, 2014 and 2013. A 3.4 percent discount rate was used to determine the 2015 obligation. As of December 31, 2015, the amount recognized in accumulated other comprehensive loss for net loss for non-qualified pension costs, net of tax, was $0.8 million, and the amount recognized as prior service credit, net of tax, was $0.6 million. The net loss amortization and prior service credit amortization for the non-qualified plans to be recognized into net periodic pension costs in 2016, net of tax, is $0.1 million and $0.1 million, respectively. Estimated Benefit Payments: The estimated future benefit payments for the next ten years are as follows (in millions): Qualified Pension Non-qualified Post-retirement Year Benefits Pension Benefits Benefits (1) 2016 $ $ $ 2017 2018 2019 2020 2021-2025 Total $ $ $ (1) Net of plan participants’ contributions and Medicare D subsidies. Defined Contribution Plans : The Company sponsors defined contribution plans that qualify under Sections 401(a) and 401(k) of the Internal Revenue Code. The Company may make discretionary matching contributions equal to a specified percentage of each participant’s 401(k) contributions. For the plan year ended December 31, 2015, the Company provided matching contributions of up to 6 percent of eligible employee compensation. The Company’s matching contributions expensed under these plans totaled $2.0 million for year ended December 31, 2015, and $1.6 million for each of the years ended December 31, 2014, and 2013. The Company may also provide a discretionary Profit Sharing contribution under the qualified defined contribution plans. The Company will provide profit sharing contributions to salaried, non-bargaining unit employees, if both a minimum threshold of Company performance is achieved and the Board has approved the profit sharing contribution. For the plan year ended December 31, 2015, the Company provided profit sharing contributions equal to 3 percent of eligible employee compensation. For certain eligible employees, supplemental profit sharing contributions are credited under a non-qualified plan to be paid after separation from service from the Company’s general funds so that total profit sharing contributions would be substantially equal to amounts that would have been contributed to the Company’s qualified defined contribution plans if it were not for limitations imposed by income tax law. Profit sharing expenses recorded in 2015, 2014 and 2013 under this plan totaled $1.9 million, $1.6 million and $1.2 million, respectively. Multi-employer Bargaining Plans: The Company contributes to multi-employer defined benefit pension plans under the terms of collective-bargaining agreements that cover its bargaining unit employees. Contributions are generally based on amounts paid for union labor or cargo volume. The risks of participating in multi-employer plans are different from single-employer plans because assets contributed to the multi-employer plan by one employer may be used to provide benefits to employees of other participating employers. Additionally, if one employer stops contributing to the plan, the unfunded obligations of the plan may be borne by the remaining participating employers. The multi-employer pension plans are subject to the plan termination insurance provisions of ERISA and are paying premiums to the Pension Benefit Guaranty Corporation (“PBGC”). The statutes provide that an employer who withdraws from, or significantly reduces its contribution obligation to, a multi-employer plan generally will be required to continue funding its proportional share of the plan’s unfunded vested benefits. As of December 31, 2015, the Company’s estimated benefit plan withdrawal obligations were $216.8 million. Except as described in Note 14, no withdrawal obligations have been recorded by the Company in the consolidated balance sheets at December 31, 2015 and 2014 as the Company has no present intention of withdrawing from and does not anticipate termination of any of these plans. Information regarding the Company’s participation in multi-employer pension plans is outlined in the table below. The “EIN/Pension Plan Number” column provides the Employer Identification Number (“EIN”) and the three-digit plan number, if applicable. Unless otherwise noted, the most recent Pension Protection Act zone status available in 2015 and 2014 is for the plan’s year-end at December 31, 2015 and 2014, respectively. The zone status is based on information that the Company received from the plan and is certified by the plan’s actuary. Among other factors, plans in the red zone are generally less than 65 percent funded, plans in the yellow zone are less than 80 percent funded, and plans in the green zone are at least 80 percent funded. The funding improvement plan (“FIP”) or rehabilitation plan (“RP”) column indicates the status which is either pending or has been implemented. The last column lists the expiration dates of the collective-bargaining agreements to which the plans are subject. Pension Protection Act Zone as of FIP/RP Status Contributions of Matson EIN/ Pension December 31, Pending/ 5% ($ in millions) Surcharge Expiration Pension Funds Plan Number Notes 2015 2014 Implemented Contributor 2015 2014 2013 Imposed Date (6) Hawaii Terminals Multiemployer Pension Plan 20-0389370-001 Yellow Yellow Implemented Yes $ $ $ No 6/30/2019 Hawaii Stevedoring Multiemployer Retirement Plan 99-0314293-001 Yellow Yellow Implemented Yes No 6/30/2019 Master, Mates and Pilots Pension Plan 13-6372630-001 (1) Green Green No Yes No 6/15/2023, 6/15/2027 Masters, Mates and Pilots Adjustable Pension Plan 37-1719247-001 (1) (2) (2) No Yes No 6/15/2023, 6/15/2027 MEBA Pension Trust - Defined Benefit Plan 51-6029896-001 (3) Red Green Implemented Yes No 8/15/2018, 6/15/2022 OCU Trust Pension Plan 26-1574440-001 Green Green No No No 6/30/2021 MFOW Supplementary Pension Plan 94-6201677-001 Green Green No Yes — — — No 6/30/2017 Alaska Teamster - Employer Pension Plan 92-6003463-024 (4) Red Red Implemented Yes — — Yes 6/30/2016, 6/30/2018, 6/30/2019 All Alaska Longshore Pension Plan 91-6085352-001 (4) Green Green No Yes — — No 6/30/2020 Western Conference of Teamsters Pension Plan 91-6145047-001 (4) Green Green No No — — No 3/31/2018 Western Conference of Teamsters Supplemental Benefit Trust 95-3746907-001 (4) Green Green No No — — — No 3/31/2018 OPEIU Local 153 Pension Plan 13-2864289-001 (4) Red Red Implemented No — — No 11/9/2017 Seafarers Pension Trust 13-6100329-001 (4)(5) Green Green No Yes — — — No 6/30/2017 Total $ $ $ (1) Effective December 31, 2012, the Masters, Mates and Pilots Pension Plan was frozen for all new benefit accruals. Commencing January 1, 2013, all new benefits accrue under a new Masters, Mates and Pilots Adjustable Pension Plan. (2) The Plan is not subject to the PPA funding requirements under IRS Section 432 as the Plan was not in effect on July 16, 2006. (3) In 2012, the Company agreed to contribute at least 11.7 percent of total wages paid to employees in covered Marine Engineer Benefits Association (“MEBA”) employment to the MEBA Pension Trust by a reallocation of the total labor cost under the collective bargaining agreement. The pension contribution rate was determined by the plan’s actuary to be necessary to maintain full funding of the pension plan and is fully offset by a reallocation of wages and other benefits. (4) Matson’s contributions to these plans commenced after the Horizon Acquisition on May 29, 2015. (5) The Company does not make contributions directly to the Seafarers Pension Plan. Instead, contributions are made to the Seafarers Health and Benefits Plan, and are subsequently re-allocated to the Seafarers Pension Plan at the discretion of the plan Trustee. (6) Represents the expiration date of the collective bargaining agreement. The Company also contributes to multi-employer plans that provide health and other benefits other than pensions under the terms of collective-bargaining agreements. Benefits provided to active and retired employees and their eligible dependents under these plans include medical, dental, vision, hearing, prescription drug, death, accidental death and dismemberment, disability, legal aid, scholarship program, wage insurance and license insurance, although not all of these benefits are provided by each plan. These plans are not subject to the PBGC plan termination and withdrawal liability provisions of ERISA applicable to multi-employer defined benefit pension plans. Information related to the Company’s health and benefit plans is as follows: Contributions of Matson 5% ($ in millions) Surcharge Expiration Health and Benefit Plans EIN Number Notes Contributor 2015 2014 2013 Imposed Date (3) Stevedore Industry Committee Welfare Benefit Plan 99-0313967-501 Yes $ $ $ No 6/30/2019 OCU Health and Welfare Trust 26-1574455-501 No No 6/30/2021 SUP Welfare Plan, Inc. 94-1243666-502 Yes No 6/30/2017 MEBA Medical and Benefits Plan 13-5590515-501 Yes No 8/15/2018, 6/15/2022 MFOW Welfare Fund 94-1254186-501 Yes No 6/30/2017 ARA Pension and Welfare Plan 13-6083690-501 Yes No 8/15/2016 Masters, Mates and Pilots Health and Benefit Plan 13-6696938-501 Yes No 6/15/2023, 6/15//2027 Seafarers Health and Benefits Plan 13-5557534-501 (1)(2) Yes — — No 6/30/2017 Alaska Teamster - Employer Welfare Trust 91-6034674-501 (2) Yes — — No 6/30/2016, 6/30/2018, 6/30/2019 All Alaska Longshore Health and Welfare Trust Fund 91-6070467-501 (2) Yes — — No 6/30/2020 Western Teamsters Welfare Trust 91-6033601-501 (2) No — — No 3/31/2018 Total $ $ $ (1) Contributions made to the Seafarers Health and Benefits Plan are re-allocated to the Seafarers Pension Plan at the discretion of the plan Trustee. (2) Matson’s contributions to these plans commenced after the Horizon Acquisition on May 29, 2015. (3) Represents the expiration date of the collective bargaining agreement. Multi-employer Defined Contribution Plans : The Company contributes to six multi-employer defined contribution pension plans. These plans are not subject to the withdrawal liability provisions of ERISA or the PBGC applicable to multi-employer defined benefit pension plans. Contributions made to these plans by the Company were $3.8 million in 2015, and $3.0 million in 2014 and 2013. |
MULTI-EMPLOYER WITHDRAWAL LIABI
MULTI-EMPLOYER WITHDRAWAL LIABILITY | 12 Months Ended |
Dec. 31, 2015 | |
MULTI-EMPLOYER WITHDRAWAL LIABILITY | |
MULTI-EMPLOYER WITHDRAWAL LIABILITY | 12. MULTI-EMPLOYER WITHDRAWAL LIABILITY Horizon ceased all of its operations in Puerto Rico during the first quarter of 2015, which resulted in a mass withdrawal from its multi-employer ILA-PRSSA pension fund (see Note 3). The Company estimated the mass withdrawal liability based upon the expected future undiscounted payments to be paid by the Company, discounted using the risk-free U.S. Treasury rate. Payments of approximately $1.0 million are made quarterly to the ILA-PRSSA over an estimated remaining period of approximately 18 years. Future estimated annual cash payments to the multi-employer pension plan as of December 31, 2015 were as follows (in millions): As of December 31, Year (in millions) 2016 $ 2017 2018 2019 2020 Thereafter Total future payments Less: amount representing interest ) Present value of remaining withdrawal liability Current portion of withdrawal liability ) Long-term portion of withdrawal liability $ The current portion of $4.1 million of the mass withdrawal liability is included in accrued and other liabilities in the consolidated balance sheet (see Note 2). The Company’s estimate of the mass withdrawal liability is subject to revision pending the final calculation and assessment to be issued by the ILA-PRSSA, expected in 2016 (see Note 3). |
SHARE-BASED AWARDS
SHARE-BASED AWARDS | 12 Months Ended |
Dec. 31, 2015 | |
SHARE-BASED AWARDS | |
SHARE-BASED AWARDS | 13. SHARE-BASED AWARDS 2007 Incentive Compensation Plan: The 2007 Incentive Compensation Plan (the “2007 Plan”) serves as a successor to the 1998 Stock Option/Stock Incentive Plan, the 1998 Non-Employee Director Stock Option Plan, the Restricted Stock Bonus Plan and the Non-Employee Director Stock Retainer Plan (the “Predecessor Plans”). Under the 2007 Plan, approximately 2.2 million shares of common stock were initially reserved for issuance. On January 28, 2010, the Board of Directors adopted an amended and restated 2007 Plan, which, among other things, authorized the issuance of an additional approximately 2.2 million shares of stock under the 2007 Plan. Shareholders approved the amended 2007 Plan at the 2010 Annual Meeting of Shareholders. In connection with the Company’s separation from its former parent company on June 29, 2012 (the “Separation”), each stock option held by a Matson employee was converted into an adjusted Matson stock option. The exercise prices of the adjusted Matson stock options and the number of shares subject to each such stock option reflects a mechanism that was intended to preserve the intrinsic value of the original stock option. The modification of the awards did not result in any additional stock compensation expense to be recorded upon Separation. The resulting Matson stock options are subject to substantially the same terms, vesting conditions and other restrictions, if any, that were applicable to the former parent company stock options immediately prior to the Separation. Also, in connection with the Separation, any non-vested restricted stock units (“RSUs”) granted to Matson employees were converted into Matson RSUs. The RSU grants were converted in a manner that was intended to preserve the fair market value of the awards. The resulting Matson RSU grants are subject to substantially the same terms, vesting conditions and other restrictions, if any, that were applicable to the grants immediately prior to the Separation. After the Separation was completed, approximately 8.7 million shares of the Company’s common stock were reserved for issuance under the plans, with approximately 5.8 million shares remaining as available for future issuance under all equity compensation plans (excluding 0.5 million shares to be issued upon exercise of outstanding options, warrants and rights as of December 31, 2015). The 2007 Plan consists of four separate incentive compensation programs: (i) the discretionary grant program, (ii) the stock issuance program, (iii) the incentive bonus program and (iv) the automatic grant program for the non-employee members of the Company’s Board of Directors. Share-based compensation is generally awarded under three of the four programs, as more fully described below. Discretionary Grant Program — Under the Discretionary Grant Program, stock options may be granted with an exercise price no less than 100 percent of the fair market value (defined as the closing market price) of the Company’s common stock on the date of the grant. Options generally become exercisable ratably over three years and have a maximum contractual term of 10 years. Stock Issuance Program — Under the Stock Issuance Program, shares of common stock, restricted stock units or performance shares may be granted. Time-based equity awards vest ratably over three years. Provided certain three-year performance targets are achieved, performance-based equity awards generally vest on the three-year anniversary date of the grant. During the first quarter of 2013, the Company granted performance-based awards tied to the Company’s average annual return on invested capital (which the Company refers to as “average ROIC”), as measured over the three-year period beginning January 1, 2013 and ending December 31, 2015. During the first quarter of 2014, the Company granted similarly structured performance share awards that will be measured over the three-year period beginning January 1, 2014 and ending December 31, 2016. During the first quarter of 2015, the Company granted similarly structured performance share awards that will be measured over the three-year period beginning January 1, 2015 and ending December 31, 2017. Performance Share awards for the senior leadership team will also be modified based on relative total shareholder return performance (which the Company refers to as the “TSR modifier”) measured over the same respective three-year period. The TSR modifier is based on the Company’s total shareholder return over the three-year measurement period relative to the shareholder return over the same period for the companies comprising the S&P Transportation Select Industry Index and S&P Mid-Cap 400 Index (with each index weighted 50 percent). The service-vesting provisions of each performance-based award require the award recipient to remain in continuous service with the Company until the end of the three-year measurement period, subject to certain exceptions due to retirement, disability, or death, in order to vest in any shares that become issuable on the basis of the performance-vesting criteria. Automatic Grant Program — The Automatic Grant Program supersedes and replaces the Company’s 1998 Non-Employee Director Stock Option Plan and the Non-Employee Director Stock Retainer Plan. At each annual shareholder meeting, non-employee directors will receive an award of restricted stock units that entitle the holder to an equivalent number of shares of common stock upon vesting. Awards of restricted stock units granted under the program generally vest ratably over one or three years. The shares of common stock authorized to be issued under the 2007 Plan may be drawn from shares of the Company’s authorized but unissued common stock or from shares of its common stock that the Company acquires, including shares purchased on the open market or in private transactions. Predecessor Plans: Adopted in 1998, the Company’s 1998 Stock Option/Stock Incentive Plan (“1998 Plan”) provided for the issuance of non-qualified stock options and common stock to employees of the Company. Under the 1998 Plan, option prices could not be less than the fair market value of the Company’s common stock on the dates of grant and the options became exercisable over periods determined, at the dates of grant, by the Compensation Committee of the Former Parent Company Board of Directors that administer the plan. Generally, options vested ratably over three years and expired ten years from the date of grant. Payments for options exercised may be made in cash or in shares of the Company’s stock. If an option to purchase shares is exercised within five years of the date of grant and if payment is made in shares of the Company’s stock, the option holder may receive, under a reload feature, a new stock option grant for such number of shares as is equal to the number surrendered, with an option price not less than the greater of the fair market value of the Company’s stock on the date of exercise or one and one-half times the original option price. The 1998 Plan also permitted the issuance of shares of the Company’s common stock. Generally, grants of time-based, non-vested stock vested ratably over three years and performance-based, non-vested stock vested in one year, provided that certain performance targets were achieved. The 1998 Plan was superseded by the 2007 Plan, and no further grants have been or will be made under the 1998 Plan. Director Stock Option Plans: The 1998 Non-Employee Director Stock Option Plan (“1998 Director Plan”) was superseded by the 2007 Plan. Under the 1998 Director Plan, each non-employee Director of the Company, elected at an Annual Meeting of Shareholders, was automatically granted, on the date of each such Annual Meeting, an option to purchase 8,000 shares of the Company’s common stock at the fair market value of the shares on the date of grant. Each option to purchase shares generally became exercisable ratably over three years following the date granted. Application of alternative assumptions could produce significantly different estimates of the fair value of share-based compensation and, consequently, significantly affect the related amounts recognized in the Consolidated Statements of Income and Comprehensive Income. Activity in the Company’s stock option plans for the year ended December 31, 2015, was as follows (in thousands, except weighted average exercise price and weighted average contractual life): Weighted Weighted 1998 Average Average Aggregate 2007 1998 Director Total Exercise Contractual Intrinsic Plan Plan Plan Shares Price Life Value Outstanding at December 31, 2014 $ Granted — — — — Exercised ) ) ) ) $ Forfeited and expired — ) — ) $ Outstanding at December 31, 2015 $ $ Exercisable at December 31, 2015 $ $ The following table summarizes non-vested restricted stock unit activity through December 31, 2015, (in thousands, except weighted average grant-date fair value amounts): 2007 Plan Restricted Stock Units Weighted Average Grant- Date Fair Value Outstanding at December 31, 2014 $ Granted Vested ) Canceled ) Outstanding at December 31, 2015 $ A summary of compensation cost related to share-based payments for each of the three years in the period ended December 31, 2015, is as follows (in millions): Years Ended December 31, 2015 2014 2013 Share-based expense (net of estimated forfeitures): Non-vested stock and restricted stock units $ $ $ Stock options — Total share-based expense Total recognized tax benefit ) ) ) Total Share-based expense (net of tax) $ $ $ Cash received by Matson upon option exercise $ $ $ Intrinsic value of options exercised $ $ $ Tax benefit realized upon option exercise $ $ $ Fair value of stock vested $ $ $ As of December 31, 2015, there was no unrecognized compensation cost related to non-vested stock options. As of December 31, 2015, unrecognized compensation cost related to non-vested restricted stock units and performance-based equity awards were $8.9 million. That unrecognized compensation cost is expected to be recognized over a weighted average period of approximately 1.7 years. |
COMMITMENTS AND CONTINGENCIES
COMMITMENTS AND CONTINGENCIES | 12 Months Ended |
Dec. 31, 2015 | |
COMMITMENTS AND CONTINGENCIES | |
COMMITMENTS AND CONTINGENCIES | 14. COMMITMENTS AND CONTINGENCIES Commitments and Contingencies: Commitments and financial arrangements, excluding lease commitments (see Note 9), and pension and post-retirement plan commitments (see Note 11), include the following as of December 31, 2015 (in millions): Commitments and financial arrangements Total Standby letters of credit (1) $ Bonds (2) $ Benefit plan withdrawal obligations (3) $ Capital expenditure obligations (4) $ (1) Letters of credit are required for the Company’s uninsured workers’ compensation and other insurance programs, and other needs. (2) Bonds are required for the U.S. Customs and other related matters. (3) Represents the withdrawal liabilities as of the most recent valuation dates for multiemployer pension plans, in which the Company is a participant. Management has no present intention of withdrawing from, and does not anticipate the termination of, any of the aforementioned plans. (4) Capital expenditure obligations includes contractual progress payments related to the construction of two new vessels based upon the shipbuilding agreements with Philly Shipyard, and other capital expenditure obligations. These amounts are not recorded on the Company’s consolidated balance sheets and it is not expected that the Company or its subsidiaries will be called upon to advance funds under these commitments. Litigation: 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. |
REPORTABLE SEGMENTS
REPORTABLE SEGMENTS | 12 Months Ended |
Dec. 31, 2015 | |
REPORTABLE SEGMENTS | |
REPORTABLE SEGMENTS | 15. REPORTABLE SEGMENTS Reportable segments are components of an enterprise that engage in business activities from which it may earn revenues and incur expenses, whose operating results are regularly reviewed by the chief operating decision maker to make decisions about resources to be allocated to the segment and assess its performance, and for which discrete financial information is available. The Company’s chief operating decision maker is its Chief Executive Officer. The Company consists of two reportable segments, Ocean Transportation and Logistics, which are further described in Note 1. Reportable segments are measured based on operating profit, exclusive of interest expense, general corporate expenses, 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. The Company’s Terminal Joint Venture segment has been aggregated into the Company’s Ocean Transportation segment due to the operations of the Terminal Joint Venture being an integral part of the Company’s Ocean Transportation business and has similar economic characteristics (see Note 4). Reportable segment information for 2015, 2014, and 2013 is summarized below (in millions): Years Ended December 31, 2015 2014 2013 Revenue: Ocean Transportation $ $ $ Logistics Total Revenue $ $ $ Operating Income: Ocean Transportation (1) $ $ $ Logistics Total Operating Income Interest expense, net ) ) ) Income before Income Taxes Income taxes ) ) ) Net Income $ $ $ (1) The Ocean Transportation segment includes $16.5 million, $6.6 million and $(2.0) million of equity in income (loss) from the Company’s Terminal Joint Venture, SSAT, for 2015, 2014, and 2013, respectively. As of December 31, 2015 2014 2013 As of December 31: Identifiable Assets: Ocean Transportation (2) $ $ $ Logistics Total Assets $ $ $ Capital Expenditures: Ocean Transportation $ $ $ Logistics Total Capital Expenditures $ $ $ Depreciation and Amortization: Ocean Transportation $ $ $ Logistics Total Depreciation and Amortization $ $ $ (2) The Ocean Transportation segment includes $66.4 million, $64.4 million and $57.6 million related to the Company’s Terminal Joint Venture equity investment in SSAT as of December 31, 2015, 2014, and 2013, respectively. |
QUARTERLY INFORMATION (Unaudite
QUARTERLY INFORMATION (Unaudited) | 12 Months Ended |
Dec. 31, 2015 | |
QUARTERLY INFORMATION (Unaudited) | |
QUARTERLY INFORMATION (Unaudited) | 16. QUARTERLY INFORMATION (Unaudited) Segment results by quarter for 2015 and 2014 are listed below (in millions, except per-share amounts): Quarters During the Year Ended December 31, 2015 Q1 Q2 Q3 Q4 Operating Revenue: Ocean Transportation $ $ $ $ Logistics Total Operating Revenue $ $ $ $ Operating Income: Ocean Transportation $ $ $ $ Logistics Total Operating Income Interest Expense ) ) ) ) Income before Income Taxes Income Tax Expense ) ) ) ) Net Income $ $ $ $ Basic Earnings Per Share: $ $ $ $ Diluted Earnings Per Share: $ $ $ $ Quarters During the Year Ended December 31, 2014 Q1 Q2 Q3 Q4 Operating Revenue: Ocean Transportation $ $ $ $ Logistics Total Operating Revenue $ $ $ $ Operating Income (loss): Ocean Transportation $ $ $ $ Logistics Total Operating Income Interest Expense ) ) ) ) Income before Income Taxes Income Tax Expense ) ) ) ) Net Income $ $ $ $ Basic Earnings Per Share: $ $ $ $ Diluted Earnings Per Share: $ $ $ $ The following infrequent transactions impacted the Company’s quarterly segment results during 2015 and 2014 (in millions): Quarters During the Year Ended December 31, 2015 Q1 Q2 Q3 Q4 Horizon Acquisition Related Costs (1): $ $ ) $ ) $ ) Molasses Settlement (2): $ $ ) $ $ ) Quarters During the Year Ended December 31, 2014 Q1 Q2 Q3 Q4 Molasses Settlement (2): $ $ $ $ ) (1) One-time costs related to the Horizon Acquisition on May 29, 2015, included in selling, general and administrative costs of the Ocean Transportation segment (see Note 3). (2) Litigation settlement entered into by the Company during 2015 and 2014 resulting from molasses spill in September 2013, are included in selling, general and administrative costs of the Ocean Transportation segment. There were no infrequent transactions impacting the Company’s the Logistic segment results in 2015 or 2014. |
SIGNIFICANT ACCOUNTING POLICI24
SIGNIFICANT ACCOUNTING POLICIES (Policies) | 12 Months Ended |
Dec. 31, 2015 | |
SIGNIFICANT ACCOUNTING POLICIES | |
Principles of Consolidation | Principles of Consolidation: The consolidated financial statements include the accounts of Matson, Inc. and all wholly-owned subsidiaries, after elimination of significant intercompany amounts. Significant investments in businesses, partnerships, and limited liability companies in which the Company does not have a controlling financial interest, but has the ability to exercise significant influence, are accounted for under the equity method. A controlling financial interest is one in which the Company has a majority voting interest or one in which the Company is the primary beneficiary of a variable interest entity. |
Fiscal Year | Fiscal Year: The period end for Matson, Inc. is December 31. The period end for MatNav occurred on the last Friday in December, except for Matson Logistics Warehousing whose period closed on December 31. There were 52 weeks included in the MatNav 2015, 2014, and 2013 fiscal years. |
Foreign Currency Transactions | Foreign Currency Transactions: The United States (U.S.) dollar is the functional currency for substantially all of the financial statements of the Company’s foreign subsidiaries. Foreign currency denominated assets and liabilities of the Company’s foreign subsidiaries are translated into U.S. dollars at exchange rates existing at the respective balance sheet dates. Translation adjustments resulting from fluctuations in exchange rates are recorded as a component of Accumulated Other Comprehensive Loss within shareholders’ equity. The Company translates the result of operations of its foreign subsidiaries at the average exchange rate during the respective periods. Gains and losses resulting from foreign currency transactions are included in selling, general and administrative costs in the Consolidated Statements of Income and Comprehensive Income. |
Use of Estimates | Use of Estimates: The preparation of the consolidated financial statements in conformity with accounting principles generally accepted in the U.S. requires management to make estimates and assumptions that affect the amounts reported. Estimates and assumptions are used for, but not limited to: impairment of investments, long-lived vessel and equipment impairment, allowance for doubtful accounts, goodwill and other finite-lived intangible assets impairment, legal contingencies, uninsured liabilities, accruals for removal of tank farm, pension and post-retirement estimates, multi-employer withdrawal liabilities, and income taxes. Future results could be materially affected if actual results differ from these estimates and assumptions. |
Cash and Cash Equivalents | Cash and Cash Equivalents: Cash equivalents consist of highly liquid investments with an original maturity of three months or less at the date of purchase. The Company carries these investments at cost, which approximates fair value. Outstanding checks in excess of funds on deposit totaled $13.8 million and $18.9 million at December 31, 2015 and 2014, respectively, and are reflected as current liabilities in the consolidated balance sheets. |
Fair Value of Financial Instruments | Fair Value of Financial Instruments: 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 and cash equivalents. The Company uses Level 2 inputs for its accounts receivable, and debt. The fair values of cash and cash equivalents, accounts receivable, and short-term debt approximate their carrying values due to the short-term nature of the instruments. The fair value of the Company’s long-term debt is calculated based upon interest rates available for debt with terms and maturities similar to the Company’s existing debt arrangements (in millions). Quoted Prices in Significant Significant Total Active Markets Observable Unobservable Carrying Value Total (Level 1) Inputs (Level 2) Inputs (Level 3) December 31, 2015 Fair Value Measurements at December 31, 2015 Cash and cash equivalents $ $ $ $ — $ — Accounts receivable, net — — Fixed rate debt — — December 31, 2014 Fair Value Measurements at December 31, 2014 Cash and cash equivalents $ $ $ $ — $ — Accounts receivable, net — — Fixed rate debt — — |
Accounts Receivable | Accounts Receivable: Accounts receivable are shown net of allowance for doubtful accounts in the consolidated balance sheets. At December 31, 2015, and December 31, 2014, the Company had assigned $176.6 million and $150.7 million of eligible accounts receivable, respectively, to the Capital Construction Fund (see Note 7). |
Allowance for Doubtful Accounts | Allowance for Doubtful Accounts: Allowances for doubtful accounts receivable are established by management based on estimates of collectability. Estimates of collectability are principally based on an evaluation of the current financial condition of the Company’s customers and potential risks to collection, payment history and other factors which are regularly monitored by the Company. The changes in the allowance for doubtful accounts receivable for the three years ended December 31, 2015 were as follows (in millions): Year Balance at Beginning of Year Expense (1) Write-offs and Other Balance at End of Year 2015 $ $ $ ) $ 2014 ) 2013 ) (1) 2015 expense includes allowances for Alaska service related accounts receivable. |
Prepaid and Other Assets | Prepaid and Other Assets: Prepaid expenses and other assets consist of the following at December 31, 2015 and 2014 (in millions): As of December 31, Prepaid expenses and other assets 2015 2014 Prepaid fuel $ $ Insurance Income tax receivables — Other Total $ $ |
Impairment of Terminal Joint Venture Investment | Impairment of Terminal Joint Venture Investment: The Company’s investment in its Terminal Joint Venture, a related party, is reviewed for impairment annually, or whenever there is evidence that fair value may be below carrying cost. An investment is written down to fair value if fair value is below carrying cost and the impairment is other-than-temporary. In evaluating the fair value of an investment and whether any identified impairment is other-than-temporary, significant estimates and considerable judgments are involved. These estimates and judgments are based, in part, on the Company’s current and future evaluation of economic conditions in general, as well as the Terminal Joint Venture’s current and future plans. These fair value calculations are highly subjective because they require management to make assumptions and apply judgments to estimates regarding the timing and amount of future cash flows, probabilities related to various cash flow scenarios, and appropriate discount rates based on the perceived risks, among others. In evaluating whether an impairment is other-than-temporary, the Company considers all available information, including the length of time and extent of the impairment, the financial condition and near-term prospects of the Terminal Joint Venture, the Company’s ability and intent to hold the investment for a period of time sufficient to allow for any anticipated recovery in market value, and projected industry and economic trends, among others. Changes in these and other assumptions could affect the projected operational results and fair value of the Terminal Joint Venture, and accordingly, may require valuation adjustments to the Company’s investment that may materially impact the Company’s financial condition or its future operating results. The Company has evaluated its investment in its related party Terminal Joint Venture for impairment and no impairment charges were recorded for the years ended December 31, 2015, 2014, and 2013. |
Property and Equipment | Property and Equipment: Property and equipment are stated at cost. Certain costs incurred in the development of internal-use software are capitalized. Property and equipment is depreciated using the straight-line method over the estimated useful lives of the assets. The estimated useful lives of property and equipment range up to the following maximum life: Classification Life Vessels 40 years Machinery and equipment 20 years Terminal facilities 35 years |
Deferred Dry-docking Costs | Deferred Dry-docking Costs: The Company ’s U.S. flagged vessels must meet specified seaworthiness standards established by U.S. Coast Guard rules and Classification society requirements. These standards require that the Company’s vessels undergo two dry-docking inspections within a five-year period. However, the majority of the Company’s U.S. flagged vessels are enrolled in the U.S. Coast Guard’s Underwater Survey in Lieu of Dry-docking (“UWILD”) program. The UWILD program allows eligible vessels to have their intermediate dry-docking requirement met with far less costly underwater inspection. The Company operates four non-U.S. flag vessels (one owned; one under a bareboat charter arrangement; and the remaining two on time charter) in the Pacific Islands. The Company is responsible for ensuring that the owned and bareboat chartered vessels meet international standards for seaworthiness, which among other requirements generally mandate that the Company perform two dry-docking inspections every five years. The dry-dockings of the Company’s time chartered vessels are the responsibility of the vessels’ owners. As costs associated with dry-docking inspections provide future economic benefits to the Company through continued operation of the vessels, the costs are deferred and amortized until the next regulated scheduled dry-docking, which is usually over a two to five-year period. Routine vessel maintenance and repairs that do not improve or extend asset lives are charged to expense as incurred. Amortized amounts are charged to operating expenses of the Ocean Transportation segment in the consolidated statements of income and comprehensive income. |
Goodwill and Intangible Assets | Goodwill and Intangible Assets: Recorded goodwill arises as a result of acquisitions made by the Company. Intangible assets at December 31, 2015, consisted of customer relationships that are being amortized using the straight-line method over the expected useful lives ranging from 3 to 21 years (see Note 3 and 6). |
Impairment of Long-Lived Assets, Finite-Lived Intangible Assets and Goodwill | Impairment of Long-Lived Assets, Finite-Lived Intangible Assets and Goodwill: The Company evaluates its long-lived assets, including finite-lived intangible assets for possible impairment in the fourth quarter, or whenever events or changes in circumstances indicate that it is more likely than not that the fair value is less than its carrying amount. During 2015, the Company changed the measurement date of its annual impairment tests from November 30 to October 1. The change was applied prospectively and did not have any impact on the Company’s impairment tests for the year. The change was made to better align the date of the impairment analysis with the preparation of the Company’s financial quarterly cash flow model. The change, if applied retrospective, would not have had any impact on the Company’s impairment analysis for prior periods presented. The Company’s long-lived assets, including finite-lived intangible assets are grouped at the Ocean Transportation and Logistics asset group level, which represents the lowest level for which identifiable cash flows are available. Long-lived Assets: In evaluating impairment, the estimated future undiscounted cash flows generated by each of these asset groups is compared with the amount recorded for each asset group to determine if its carrying value is not recoverable. If this review determines that the amount recorded will not be recovered, the amount recorded for the asset group is reduced to its estimated fair value. These asset impairment analyses are highly subjective because they require management to make assumptions and apply considerable judgments to, among other things, estimates of the timing and amount of future cash flows, expected useful lives of the assets, uncertainty about future events, including changes in economic conditions, changes in operating performance, changes in the use of the assets, and ongoing costs of maintenance and improvements of the assets, and thus, the accounting estimates may change from period to period. If management uses different assumptions or if different conditions occur in future periods, the Company’s financial condition or its future operating results could be materially impacted. During the year ended December 31, 2015, the Company recorded an impairment charge of $2.1 million related to the write-down of inactive vessels to be recycled from its recorded net book value to its estimated fair value of zero. The impairment expense is included in operating costs on the consolidated statements of income and comprehensive income. No impairment charges were recorded for the years ended December 31, 2014, and 2013. Finite-Lived Intangible Assets and Goodwill: The Company’s intangible assets include goodwill and customer relationships. In estimating the fair value of a reporting unit, the Company uses a combination of a discounted cash flow model and fair value based on market multiples of earnings before interest, taxes, depreciation and amortization (“EBITDA”). The discounted cash flow approach requires the Company to use a number of assumptions, including market factors specific to the business, the amount and timing of estimated future cash flows to be generated by the business over an extended period of time, long-term growth rates for the business, and a discount rate that considers the risks related to the amount and timing of the cash flows. Although the assumptions used by the Company in its discounted cash flow model are consistent with the assumptions the Company used to generate its internal strategic plans and forecasts, significant judgment is required to estimate the amount and timing of future cash flows from the reporting unit and the risk of achieving those cash flows. When using market multiples of EBITDA, the Company must make judgments about the comparability of those multiples in closed and proposed transactions. Accordingly, changes in assumptions and estimates, including, but not limited to, changes driven by external factors, such as industry and economic trends, and those driven by internal factors, such as changes in the Company’s business strategy and its internal forecasts, could have a material effect on the Company’s financial condition or its future operating results. The Company has evaluated its goodwill and intangible assets for impairment and determined that the fair value of each reporting unit substantially exceeds book value. No impairment charges were recorded for the years ended December 31, 2015, 2014 and 2013, respectively. |
Accrued and other liabilities | Accrued and other liabilities: Accrued and other liabilities consist of the following at December 31, 2015 and 2014 (in millions) : As of December 31, Accrued and other liabilities 2015 2014 Incentives and other benefit accruals $ $ Molasses tank farm removal accrual — Restructuring and severance accruals — Repayments of multi-employer withdrawal liability (see Note 12) — Interest on debt Acquisition related payments — Deferred revenue Post retirement benefit obligations Other liabilities Total $ $ |
Pension and Post-Retirement Plans | Pension and Post-Retirement Plans: Certain Ocean Transportation subsidiaries are members of the Pacific Maritime Association (“PMA”) and the Hawaii Stevedoring Industry Committee, which negotiate multi-employer pension plans covering certain shoreside bargaining unit personnel. The subsidiaries directly negotiate multi-employer pension plans covering other bargaining unit personnel. Pension costs are accrued in accordance with contribution rates established by the PMA, the parties to a plan or the trustees of a plan. Several trusteed, non-contributory, single-employer defined benefit plans and defined contribution plans cover substantially all other employees. The estimation of the Company’s pension and post-retirement benefit expenses and liabilities requires that the Company make various assumptions. These assumptions include factors such as discount rates, expected long-term rate of return on pension plan assets, salary growth, health care cost trend rates, inflation, retirement rates, mortality rates, and expected contributions. Actual results that differ from the assumptions made could materially affect the Company’s financial condition or its future operating results. The effects of changing assumptions are included in unamortized net gains and losses, which directly affect accumulated other comprehensive income. Additionally, these unamortized gains and losses are amortized and reclassified to income (loss) over future periods. Additional information about the Company’s benefit plans is included in Note 11. |
Uninsured Liabilities | Uninsured Liabilities: The Company is uninsured for certain losses including, but not limited to, employee health, workers’ compensation, general liability, real and personal property. Where feasible, the Company obtains third-party excess insurance coverage to limit its exposure to these claims. When estimating its uninsured liabilities, the Company considers a number of factors, including historical claims experience, demographic factors, current trends, and analyses provided by independent third-parties. Periodically, management reviews its assumptions and the analyses provided by independent third-parties to determine the adequacy of the Company’s uninsured liabilities. The Company’s uninsured liabilities contain uncertainties because management is required to apply judgment and make long-term assumptions to estimate the ultimate cost to settle reported claims and claims incurred, but not reported, as of the balance sheet date. If management uses different assumptions or if different conditions occur in future periods, the Company’s financial condition or its future operating results could be materially impacted. |
Legal Contingencies | Legal Contingencies: The Company’s results of operations could be affected by significant litigation adverse to the Company, including, but not limited to, liability claims, antitrust claims, claims related to coastwise trading matters, lawsuits involving private plaintiffs or government agencies, and environmental related matters. The Company records accruals for legal matters when the information available indicates that it is probable that a liability has been incurred and the amount of the loss can be reasonably estimated. Management makes adjustments to these accruals to reflect the impact and status of negotiations, settlements, rulings, advice of outside legal counsel and other information and events that may pertain to a particular matter. Predicting the outcome of claims and lawsuits and estimating related costs and exposure involves substantial uncertainties that could cause actual costs to vary materially from those estimates. In making determinations of likely outcomes of litigation matters, the Company considers many factors. These factors include, but are not limited to, the nature of specific claims including un-asserted claims, the Company’s experience with similar types of claims, the jurisdiction in which the matter is filed, input from outside legal counsel, the likelihood of resolving the matter through alternative dispute resolution mechanisms and the matter’s current status. |
Recognition of Revenues and Expenses | Recognition of Revenues and Expenses: Voyage revenue is recognized ratably over the duration of a voyage based on the relative transit time in each reporting period. Voyage expenses are recognized as incurred. Hawaii, Alaska, Guam, and certain Pacific island service freight rates are provided in tariffs filed with the Surface Transportation Board of the U.S. Department of Transportation; for other Pacific island services, the rates are filed with the Federal Maritime Commission. The Alaska and China service rates are predominately established by individual contracts with customers. Revenues and costs from terminal and other related services are recognized upon completion of the services. The revenue for Logistics services includes the total amount billed to customers for transportation services. The primary costs include purchased transportation services. Revenue and the related purchased transportation costs are recognized based on relative transit time. The Company reports revenue on a gross basis. The Company serves as principal in transactions because it is responsible for the contractual relationship with the customer, has latitude in establishing prices, has discretion in supplier selection, and retains credit risk. The primary sources of revenue for warehousing services are storage, handling, and value-added packaging. For customer dedicated warehouses, storage revenue is recognized as earned over the life of the contract. Storage revenue generated by the public warehouses is recognized in the month the service is provided according to the terms of the contract. Handling and value-added packaging revenue and expense are recognized in proportion to the services completed. |
Non-voyage Costs | Non-voyage Costs: Non-voyage costs such as terminal operating overhead, and general and administrative expenses are charged to expense as incurred. |
Dividends | Dividends: The Company recognizes dividends as a liability when approved by the Board of Directors. |
Share-Based Compensation | Share-Based Compensation: The Company records compensation expense for all share-based payment awards made to employees and directors. The Company’s various equity plans are more fully described in Note 13. |
Income Taxes | Income Taxes: Deferred income taxes are provided for the tax effect of temporary differences between the tax basis of assets and liabilities and their reported amounts in the consolidated financial statements. Deferred tax assets and deferred tax liabilities are adjusted to the extent necessary to reflect tax rates expected to be in effect when the temporary differences reverse. Adjustments may be required to deferred tax assets and deferred tax liabilities due to changes in tax laws and audit adjustments by tax authorities. To the extent adjustments are required in any given period, the adjustments would be included within the tax provision in the consolidated statements of income and comprehensive income and/or consolidated balance sheets. The Company makes certain estimates and judgments in determining income tax expense for consolidated financial statement purposes. These estimates and judgments are applied in the calculation of tax credits, tax benefits and deductions, and in the calculation of certain deferred tax assets and liabilities, which arise from differences in the timing of recognition of revenue and expense for tax and consolidated financial statement purposes. In addition, judgment is required in determining if, based on the weight of available evidence, management believes that it is more likely than not that some portion or all of a recorded deferred tax asset would not be realized in future periods. A valuation allowance would be established if, based on the weight of available evidence, management believes that it is more likely than not that some portion or all of a recorded deferred tax asset would not be realized in future periods (see Note 3 and 10). Significant changes to these estimates may result in an increase or decrease to the Company’s tax provision in a subsequent period. In addition, the calculation of tax liabilities involves significant judgment in estimating the impact of uncertain tax positions taken or expected to be taken with respect to the application of complex tax laws. Resolution of these uncertainties in a manner inconsistent with management’s expectations could materially affect the Company’s financial condition or its future operating results. |
Comprehensive Income (Loss) | Comprehensive Income (Loss): Comprehensive income (loss) includes all changes in Shareholders’ Equity, except those resulting from capital stock transactions. Other comprehensive income (loss) in the consolidated statements of income and comprehensive income are shown net of tax benefit (expense) of $(5.0) million, $19.4 million, and $(14.1) million for the years ended December 2015, 2014, and 2013, respectively. Changes in accumulated other comprehensive loss by component, net of tax, are as follows (in millions): Pensions Post Retirement Non- Qualified Plans Foreign Currency Translation Interest Hedge Accumulated Other Comprehensive Income (Loss) Balance at December 31, 2013 $ ) $ ) $ ) $ ) $ ) $ ) Net loss in prior service costs ) ) ) — — ) Amortization of prior service cost ) — — — — ) Amortization of net loss — — Foreign currency translation adjustment — — — — Balance at December 31, 2014 ) ) ) ) ) Net gain in prior service costs — — — Amortization of prior service cost ) ) — — ) Amortization of net loss ) — — Foreign currency translation adjustment — — — — Other — — — — Balance at December 31, 2015 $ ) $ ) $ ) $ $ ) $ ) |
Basic and Diluted Earnings per Share ("EPS") of Common Stock | Basic and Diluted Earnings per Share (“EPS”) of Common Stock: Basic earnings per share are determined by dividing net income by the weighted-average common shares outstanding during the year. The calculation of diluted earnings per share includes the dilutive effect of unexercised non-qualified stock options and non-vested stock units. The computation of weighted average dilutive shares outstanding excluded non-qualified stock options to purchase 0.1 million shares of common stock for each of the years 2015, 2014, and 2013. These amounts were excluded because 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. The denominator used to compute basic and diluted earnings per share is as follows (in millions): Year Ended December 31, 2015 Year Ended December 31, 2014 Year Ended December 31, 2013 Weighted Per Weighted Per Weighted Per Average Common Average Common Average Common Net Common Share Net Common Share Net Common Share Income Shares Amount Income Shares Amount Income Shares Amount Basic: $ $ $ $ $ $ Effect of Dilutive Securities: — — — Diluted: $ $ $ $ $ $ |
Rounding | Rounding: Amounts in the consolidated financial statements and Notes are rounded to millions, but per-share calculations and percentages were determined based on amounts before rounding. Accordingly, a recalculation of some per-share amounts and percentages, if based on the reported data, may be slightly different. |
Reclassification | Reclassification: Amounts for deferred dry-docking costs at December 31, 2014 have been reclassified from other long-term assets in the Company’s consolidated balance sheet to conform to the current year presentation. |
New Accounting Pronouncements | New Accounting Pronouncements: Business Combinations : In September 2015, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) ASU 2015-16, “ Business Combinations (Topic 805): Simplifying the Accounting for Measurement-Period Adjustments ” (“ASU 2015-16”). ASU 2015-16 requires an acquirer to recognize adjustments to provisional amounts that are identified during the measurement period in the reporting period in which the adjustment amounts are determined, to record an acquisition-to-date adjustment, in the same period’s financial statements, for the effect on earnings of changes in depreciation, amortization, or other income and to disclose the amount of such adjustment that related to prior periods. The guidance is effective for reporting periods beginning after December 15, 2015, and interim periods within those fiscal years; however, early adoption is permitted. The Company adopted ASU 2015-16 during the fourth quarter 2015. ASU 2015-16 is applied prospectively to adjustments to provisional amounts that occur after the effective date. The adoption of ASU 2015-16 did not have a material effect on the Company’s consolidated financial statements upon adoption. |
Deferred Taxes | Deferred Taxes : In November 2015, the FASB issued ASU 2015-17, “ Balance Sheet Classifications of Deferred Taxes ” (“ASU 2015-17”) which simplifies the presentation of deferred income taxes. The amended guidance requires that all deferred tax assets and liabilities be classified as non-current on the balance sheet. The guidance is effective for reporting periods beginning after December 15, 2016; however, early adoption is permitted. The Company early adopted ASU 2015-17 during the fourth quarter 2015 on a prospective basis. No prior periods were retrospectively adjusted (see Note 10). |
Revenue from Contracts with Customers | Revenue from Contracts with Customers: In May 2014, the FASB issued ASU 2014-09, “ Revenue from Contracts with Customers (Topic 606) ” (“ASU 2014-09”). The guidance establishes principles regarding the nature, timing, and uncertainty of revenue from contracts with customers. It removes inconsistencies in existing revenue requirements, provides a more robust framework for addressing revenue issues and improves comparability of revenue recognition practices across entities, industries, jurisdictions and capital markets. The guidance will be effective for annual reporting periods beginning after December 15, 2016, including interim periods within that reporting period. The Company is in the process of evaluating this guidance. |
SIGNIFICANT ACCOUNTING POLICI25
SIGNIFICANT ACCOUNTING POLICIES (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
SIGNIFICANT ACCOUNTING POLICIES | |
Schedule of fair value measurement | Quoted Prices in Significant Significant Total Active Markets Observable Unobservable Carrying Value Total (Level 1) Inputs (Level 2) Inputs (Level 3) December 31, 2015 Fair Value Measurements at December 31, 2015 Cash and cash equivalents $ $ $ $ — $ — Accounts receivable, net — — Fixed rate debt — — December 31, 2014 Fair Value Measurements at December 31, 2014 Cash and cash equivalents $ $ $ $ — $ — Accounts receivable, net — — Fixed rate debt — — |
Schedule of changes in the allowance for doubtful accounts receivable | Year Balance at Beginning of Year Expense (1) Write-offs and Other Balance at End of Year 2015 $ $ $ ) $ 2014 ) 2013 ) (1) 2015 expense includes allowances for Alaska service related accounts receivable. |
Schedule of prepaid expenses and other assets | As of December 31, Prepaid expenses and other assets 2015 2014 Prepaid fuel $ $ Insurance Income tax receivables — Other Total $ $ |
Schedule of estimated useful lives of property and equipment | Classification Life Vessels 40 years Machinery and equipment 20 years Terminal facilities 35 years |
Schedule of accrued and other liabilities | As of December 31, Accrued and other liabilities 2015 2014 Incentives and other benefit accruals $ $ Molasses tank farm removal accrual — Restructuring and severance accruals — Repayments of multi-employer withdrawal liability (see Note 12) — Interest on debt Acquisition related payments — Deferred revenue Post retirement benefit obligations Other liabilities Total $ $ |
Schedule of changes in accumulated other comprehensive income (loss) by component, net of tax | Pensions Post Retirement Non- Qualified Plans Foreign Currency Translation Interest Hedge Accumulated Other Comprehensive Income (Loss) Balance at December 31, 2013 $ ) $ ) $ ) $ ) $ ) $ ) Net loss in prior service costs ) ) ) — — ) Amortization of prior service cost ) — — — — ) Amortization of net loss — — Foreign currency translation adjustment — — — — Balance at December 31, 2014 ) ) ) ) ) Net gain in prior service costs — — — Amortization of prior service cost ) ) — — ) Amortization of net loss ) — — Foreign currency translation adjustment — — — — Other — — — — Balance at December 31, 2015 $ ) $ ) $ ) $ $ ) $ ) |
Schedule of basic and diluted earnings per share | Year Ended December 31, 2015 Year Ended December 31, 2014 Year Ended December 31, 2013 Weighted Per Weighted Per Weighted Per Average Common Average Common Average Common Net Common Share Net Common Share Net Common Share Income Shares Amount Income Shares Amount Income Shares Amount Basic: $ $ $ $ $ $ Effect of Dilutive Securities: — — — Diluted: $ $ $ $ $ $ |
BUSINESS COMBINATION (Tables)
BUSINESS COMBINATION (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
BUSINESS COMBINATION | |
Schedule of total consideration paid | (in millions) Total Consideration Common shares $ Warrants Horizon’s debt (including accrued interest and breakage fees) Total $ |
Schedule of purchase price allocation | Purchase Price Allocation (in millions) Total 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 liability ) Capital lease obligations ) Horizon’s debt and warrants ) Total identifiable assets less liabilities ) Total cash paid for common shares ) Goodwill $ |
Schedule of pro forma financial information | (Unaudited) Year Ended December 31, (in millions, except per-share amount) 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 The following is a summary of the pro-forma adjustments to the Combined Consolidated Statement of Operations: (1) Eliminate operating revenue and net income related to Horizon’s Hawaii operations to reflect the Pasha Transaction. (2) Eliminate Horizon’s interest expense due to the repayment of Horizon’s debt, and record interest expense based upon an estimated Company borrowings. (3) Record additional depreciation and amortization expense due to increase in fair value of the acquired tangible and intangible assets. (4) Record adjustment to income tax expense based upon Matson’s estimated income tax rate. (5) Record adjustments for certain acquisition related expenses. |
INVESTMENT IN TERMINAL JOINT 27
INVESTMENT IN TERMINAL JOINT VENTURE (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
INVESTMENT IN TERMINAL JOINT VENTURE | |
Schedule of company share of net income (loss) and dividends received from investments in terminal joint venture | Years Ended December 31, Terminal Joint Venture 2015 2014 2013 Company Share of Net Income (Loss) $ $ $ ) Distributions Received — — |
Unaudited financial information for the Terminal Joint Venture - Balance Sheet | As of December 31, Balance Sheet (Unaudited) 2015 2014 Current assets $ $ Noncurrent assets Total Assets $ $ Current liabilities $ $ Noncurrent liabilities Equity Total Liabilities and Equity $ $ |
Unaudited financial information for the Terminal Joint Venture - Statement of Operations | Years Ended December 31, Statement of Operations (Unaudited) 2015 2014 2013 Operating revenue $ $ $ Operating costs and expenses Operating income (loss) ) ) Net Income (Loss) (1) $ $ $ ) (1) Includes earnings from equity method investments held by the Terminal Joint Venture. |
PROPERTY AND EQUIPMENT (Tables)
PROPERTY AND EQUIPMENT (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
PROPERTY AND EQUIPMENT | |
Schedule of property and equipment | As of December 31, 2015 Cost Accumulated Depreciation Net Book Value Vessels $ $ $ Containers and equipment Terminal facilities and other property Construction in progress — Total $ $ $ As of December 31, 2014 Cost Accumulated Depreciation Net Book Value Vessels $ $ $ Containers and equipment Terminal facilities and other property Construction in progress — Total $ $ $ |
Schedule of depreciation expense | Years Ended December 31, 2015 2014 2013 Depreciation Expense $ $ $ |
GOODWILL AND INTANGIBLE ASSETS
GOODWILL AND INTANGIBLE ASSETS (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
GOODWILL AND INTANGIBLE ASSETS | |
Schedule of goodwill | Goodwill Ocean Transportation Logistics Total Balance at December 31, 2013 $ $ $ Additions — — — Balance at December 31, 2014 Additions — Balance at December 31, 2015 $ $ $ |
Schedule of intangible assets | Intangible Assets Ocean Transportation Logistics Total Gross Amount at December 31, 2014 $ $ $ Additions Gross Amount at December 31, 2015 Accumulated Amortization ) ) ) Net Amount at December 31, 2015 $ $ $ Intangible Assets Ocean Transportation Logistics Total Gross Amount at December 31, 2013 $ $ $ Additions — — — Gross Amount at December 31, 2014 Accumulated Amortization ) ) ) Net Amount at December 31, 2014 $ $ $ |
Schedule of estimated amortization expenses related to intangible assets | Estimated Amortization Year Expense 2016 $ 2017 2018 2019 2020 Thereafter Total $ |
DEBT (Tables)
DEBT (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
DEBT | |
Schedule of debt | As of 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 3.92%, payable through 2045 — 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 $ $ |
Schedule of maturities of debt | Year Total 2016 $ 2017 2018 2019 2020 Thereafter Total debt $ |
LEASES (Tables)
LEASES (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
LEASES | |
Schedule of future minimum payments under operating leases | Total Operating Year Leases 2016 $ 2017 2018 2019 2020 Thereafter Total minimum lease payments $ |
INCOME TAXES (Tables)
INCOME TAXES (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
INCOME TAXES | |
Schedule of income tax expense on income from continuing operations | Years Ended December 31, 2015 2014 2013 Current: Federal $ $ $ ) State ) Total ) Deferred: Total income tax expense $ $ $ |
Schedule of effective income tax rate | Years Ended December 31, 2015 2014 2013 Computed federal income tax expense % % % State income tax % % % Valuation allowance % % — Foreign taxes % % — Deferred tax adjustment % )% — Unrecognized tax benefits % )% )% Other — net % % % Effective income tax rate % % % |
Schedule of tax effects of temporary differences | As of December 31, 2015 2014 Deferred tax assets: Benefit plans $ $ Federal net operating losses — Insurance reserves State net operating losses — Foreign losses Alternative minimum tax credits Allowance for doubtful accounts Other Total deferred tax assets Valuation allowance ) ) Total Deferred tax assets, net of valuation allowance Deferred tax liabilities: Basis differences for property and equipment Capital Construction Fund Intangibles Deferred revenue Joint ventures and other investments Reserves ) Total deferred tax liabilities Deferred tax liability, net $ $ |
Reconciliation of unrecognized tax benefits | Unrecognized Tax Benefits: Amount Balance at December 31, 2012 $ Additions for tax positions of prior years Reductions for lapse of statute of limitations ) Balance at December 31, 2013 Additions for tax positions of prior years Reductions for lapse of statute of limitations ) Balance at December 31, 2014 Additions for tax positions of prior years Additions from unrecognized tax benefits acquired Reductions for lapse of statute of limitations ) Balance at December 31, 2015 $ |
PENSION AND POST-RETIREMENT P33
PENSION AND POST-RETIREMENT PLANS (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
PENSION AND POST-RETIREMENT PLANS | |
Schedule of the Company's target and actual asset allocations | Asset categories Target 2015 2014 Domestic equity securities % % % International equity securities % % % Debt securities % % % Real estate % % % Other and cash % % % Total % % % |
Schedule of the fair values of the Company's pension plan assets, by asset category | Fair Value Measurements at December 31, 2015 Asset Category Total Quoted Prices in Active Markets (Level 1) Significant Observable Inputs (Level 2) Significant Unobservable Inputs (Level 3) Cash $ $ $ — $ — Equity securities: U.S. large-cap — U.S. mid- and small-cap — International large-cap — — International small-cap — — Fixed income securities: U.S. Treasuries — — Municipal bonds — — Investment grade U.S. corporate bonds — — High-yield U.S. corporate bonds — — Emerging markets fixed income — — Other types of investments: Real estate partnership interests — — Private equity partnership interests — — Total $ $ $ $ Fair Value Measurements at December 31, 2014 Asset Category Total Quoted Prices in Active Markets (Level 1) Significant Observable Inputs (Level 2) Significant Unobservable Inputs (Level 3) Cash $ $ $ — $ — Equity securities: U.S. large-cap — — U.S. mid- and small-cap — — International large-cap — International small-cap — — Fixed income securities: U.S. Treasuries — — Municipal bonds — — Investment grade U.S. corporate bonds — — High-yield U.S. corporate bonds — — Emerging markets fixed income — — Other types of investments: Real estate partnership interests — — Private equity partnership interests — — Total $ $ $ $ |
Reconciliation of all pension plan fair value measurements using significant unobservable inputs (level 3) | Fair Value Measurements Using Significant Unobservable Inputs (Level 3) Real Estate Private Equity Total Balance at December 31, 2013 $ $ $ Actual return (loss) on plan assets: Assets held at the reporting date — Assets sold during the period — Purchases, sales and settlements, net ) — ) Balance at December 31, 2014 Actual return (loss) on plan assets: Assets held at the reporting date ) Assets sold during the period — Purchases, sales and settlements, net ) — ) Balance at December 31, 2015 $ $ $ |
Schedule of change in benefit obligation and plan assets | Pension Benefits Other Post-retirement Benefits December 31, December 31, 2015 2014 2015 2014 Change in Benefit Obligation: Benefit obligation at beginning of year $ $ $ $ Service cost Interest cost Plan participants’ contributions — — Actuarial (gain) loss ) ) Benefits paid, net of subsidies received ) ) ) ) Expenses paid ) ) — — Benefit obligation at end of year $ Change in Plan Assets: Fair value of plan assets at beginning of year — — Actual return on plan assets ) — — Plan participants’ contributions — — Employer contributions Benefits paid, net of subsidies received ) ) ) ) Expenses paid ) ) — — Fair value of plan assets at end of year — — Funded Status and Recognized Liability $ ) $ ) $ ) $ ) |
Schedule of amounts recognized on the consolidated balance sheets and in accumulated other comprehensive loss | Pension Benefits Other Post-retirement Benefits December 31, December 31, 2015 2014 2015 2014 Current liabilities $ — $ — $ ) $ ) Non-current liabilities, net ) ) ) ) Total $ ) $ ) $ ) $ ) Net loss (net of taxes) $ $ $ $ Prior service credit (net of taxes) ) ) — — Total $ $ $ $ |
Schedule of information for qualified pension plans with an accumulated benefit obligation in excess of plan assets | 2015 2014 Projected benefit obligation $ $ Accumulated benefit obligation $ $ Fair value of plan assets $ $ |
Schedule of components of the net periodic benefit cost and other changes in plan assets and benefit obligations recognised in other comprehensive income | Pension Benefits Other Post-retirement Benefits December 31, December 31, 2015 2014 2013 2015 2014 2013 Components of Net Periodic Benefit Cost: Service cost $ $ $ $ $ $ Interest cost Expected return on plan assets ) ) ) — — — Amortization of net loss Amortization of prior service cost ) ) ) — — — Net periodic benefit cost $ $ ) $ $ $ $ Other Changes in Plan Assets and Benefit Obligations Recognized in Other Comprehensive Income (net of tax) Net loss (gain) $ ) $ $ ) $ ) $ $ New prior service cost — — — — — Amortization of unrecognized loss ) ) ) ) ) ) Amortization of prior service credit — — — Total recognized in other comprehensive income $ ) $ $ ) $ ) $ $ Total recognized in net periodic benefit cost and other comprehensive income $ ) $ $ ) $ $ $ |
Schedule of weighted average assumptions used to determine benefit information | Pension Benefits Other Post-retirement Benefits December 31, December 31, 2015 2014 2013 2015 2014 2013 Weighted Average Assumptions: Discount rate (1) % % % % % % Expected return on plan assets % % % Rate of compensation increase % % % % % % Initial health care cost trend rate (2) % % Pre-65 group % Post-65 group % Ultimate health care cost trend rate % % % Year ultimate health care cost trend rate is reached (2) Pre-65 group Post-65 group (1) The Company derives a single equivalent rate utilizing a yield curve constructed from a portfolio of high-quality corporate bonds with various maturities. (2) Starting in 2015, initial and ultimate health care trend rates used to determine obligations are different for pre-65 and post-65 populations. |
Schedule of effect of one percentage point increase or decrease in other post-retirement benefits | Other Post-retirement Benefits One Percentage Point Increase Decrease 2015 2014 2013 2015 2014 2013 Effect on total of service and interest cost components $ $ $ $ ) $ ) $ ) Effect on post-retirement benefit obligation $ $ $ $ ) $ ) $ ) |
Schedule of estimated benefit payments | Qualified Pension Non-qualified Post-retirement Year Benefits Pension Benefits Benefits (1) 2016 $ $ $ 2017 2018 2019 2020 2021-2025 Total $ $ $ (1) Net of plan participants’ contributions and Medicare D subsidies. |
Schedule of information regarding the entity's participation in the multiemployer pension plans | Pension Protection Act Zone as of FIP/RP Status Contributions of Matson EIN/ Pension December 31, Pending/ 5% ($ in millions) Surcharge Expiration Pension Funds Plan Number Notes 2015 2014 Implemented Contributor 2015 2014 2013 Imposed Date (6) Hawaii Terminals Multiemployer Pension Plan 20-0389370-001 Yellow Yellow Implemented Yes $ $ $ No 6/30/2019 Hawaii Stevedoring Multiemployer Retirement Plan 99-0314293-001 Yellow Yellow Implemented Yes No 6/30/2019 Master, Mates and Pilots Pension Plan 13-6372630-001 (1) Green Green No Yes No 6/15/2023, 6/15/2027 Masters, Mates and Pilots Adjustable Pension Plan 37-1719247-001 (1) (2) (2) No Yes No 6/15/2023, 6/15/2027 MEBA Pension Trust - Defined Benefit Plan 51-6029896-001 (3) Red Green Implemented Yes No 8/15/2018, 6/15/2022 OCU Trust Pension Plan 26-1574440-001 Green Green No No No 6/30/2021 MFOW Supplementary Pension Plan 94-6201677-001 Green Green No Yes — — — No 6/30/2017 Alaska Teamster - Employer Pension Plan 92-6003463-024 (4) Red Red Implemented Yes — — Yes 6/30/2016, 6/30/2018, 6/30/2019 All Alaska Longshore Pension Plan 91-6085352-001 (4) Green Green No Yes — — No 6/30/2020 Western Conference of Teamsters Pension Plan 91-6145047-001 (4) Green Green No No — — No 3/31/2018 Western Conference of Teamsters Supplemental Benefit Trust 95-3746907-001 (4) Green Green No No — — — No 3/31/2018 OPEIU Local 153 Pension Plan 13-2864289-001 (4) Red Red Implemented No — — No 11/9/2017 Seafarers Pension Trust 13-6100329-001 (4)(5) Green Green No Yes — — — No 6/30/2017 Total $ $ $ (1) Effective December 31, 2012, the Masters, Mates and Pilots Pension Plan was frozen for all new benefit accruals. Commencing January 1, 2013, all new benefits accrue under a new Masters, Mates and Pilots Adjustable Pension Plan. (2) The Plan is not subject to the PPA funding requirements under IRS Section 432 as the Plan was not in effect on July 16, 2006. (3) In 2012, the Company agreed to contribute at least 11.7 percent of total wages paid to employees in covered Marine Engineer Benefits Association (“MEBA”) employment to the MEBA Pension Trust by a reallocation of the total labor cost under the collective bargaining agreement. The pension contribution rate was determined by the plan’s actuary to be necessary to maintain full funding of the pension plan and is fully offset by a reallocation of wages and other benefits. (4) Matson’s contributions to these plans commenced after the Horizon Acquisition on May 29, 2015. (5) The Company does not make contributions directly to the Seafarers Pension Plan. Instead, contributions are made to the Seafarers Health and Benefits Plan, and are subsequently re-allocated to the Seafarers Pension Plan at the discretion of the plan Trustee. (6) Represents the expiration date of the collective bargaining agreement. |
Schedule of information related to the Company's health and benefit plans | Contributions of Matson 5% ($ in millions) Surcharge Expiration Health and Benefit Plans EIN Number Notes Contributor 2015 2014 2013 Imposed Date (3) Stevedore Industry Committee Welfare Benefit Plan 99-0313967-501 Yes $ $ $ No 6/30/2019 OCU Health and Welfare Trust 26-1574455-501 No No 6/30/2021 SUP Welfare Plan, Inc. 94-1243666-502 Yes No 6/30/2017 MEBA Medical and Benefits Plan 13-5590515-501 Yes No 8/15/2018, 6/15/2022 MFOW Welfare Fund 94-1254186-501 Yes No 6/30/2017 ARA Pension and Welfare Plan 13-6083690-501 Yes No 8/15/2016 Masters, Mates and Pilots Health and Benefit Plan 13-6696938-501 Yes No 6/15/2023, 6/15//2027 Seafarers Health and Benefits Plan 13-5557534-501 (1)(2) Yes — — No 6/30/2017 Alaska Teamster - Employer Welfare Trust 91-6034674-501 (2) Yes — — No 6/30/2016, 6/30/2018, 6/30/2019 All Alaska Longshore Health and Welfare Trust Fund 91-6070467-501 (2) Yes — — No 6/30/2020 Western Teamsters Welfare Trust 91-6033601-501 (2) No — — No 3/31/2018 Total $ $ $ (1) Contributions made to the Seafarers Health and Benefits Plan are re-allocated to the Seafarers Pension Plan at the discretion of the plan Trustee. (2) Matson’s contributions to these plans commenced after the Horizon Acquisition on May 29, 2015. (3) Represents the expiration date of the collective bargaining agreement. |
MULTI-EMPLOYER WITHDRAWAL LIA34
MULTI-EMPLOYER WITHDRAWAL LIABILITY (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
MULTI-EMPLOYER WITHDRAWAL LIABILITY | |
Schedule of future estimated annual cash payments to the multi-employer pension plan | As of December 31, Year (in millions) 2016 $ 2017 2018 2019 2020 Thereafter Total future payments Less: amount representing interest ) Present value of remaining withdrawal liability Current portion of withdrawal liability ) Long-term portion of withdrawal liability $ |
SHARE-BASED AWARDS (Tables)
SHARE-BASED AWARDS (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
SHARE-BASED AWARDS | |
Stock Option Activity | Weighted Weighted 1998 Average Average Aggregate 2007 1998 Director Total Exercise Contractual Intrinsic Plan Plan Plan Shares Price Life Value Outstanding at December 31, 2014 $ Granted — — — — Exercised ) ) ) ) $ Forfeited and expired — ) — ) $ Outstanding at December 31, 2015 $ $ Exercisable at December 31, 2015 $ $ |
Non-Vested Restricted Stock Unit Activity | 2007 Plan Restricted Stock Units Weighted Average Grant- Date Fair Value Outstanding at December 31, 2014 $ Granted Vested ) Canceled ) Outstanding at December 31, 2015 $ |
Summary of Compensation Cost and Other Measures Related to Share-Based Payments | Years Ended December 31, 2015 2014 2013 Share-based expense (net of estimated forfeitures): Non-vested stock and restricted stock units $ $ $ Stock options — Total share-based expense Total recognized tax benefit ) ) ) Total Share-based expense (net of tax) $ $ $ Cash received by Matson upon option exercise $ $ $ Intrinsic value of options exercised $ $ $ Tax benefit realized upon option exercise $ $ $ Fair value of stock vested $ $ $ |
COMMITMENTS AND CONTINGENCIES (
COMMITMENTS AND CONTINGENCIES (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
COMMITMENTS AND CONTINGENCIES | |
Schedule of Commitments and Contingencies | Commitments and financial arrangements Total Standby letters of credit (1) $ Bonds (2) $ Benefit plan withdrawal obligations (3) $ Capital expenditure obligations (4) $ (1) Letters of credit are required for the Company’s uninsured workers’ compensation and other insurance programs, and other needs. (2) Bonds are required for the U.S. Customs and other related matters. (3) Represents the withdrawal liabilities as of the most recent valuation dates for multiemployer pension plans, in which the Company is a participant. Management has no present intention of withdrawing from, and does not anticipate the termination of, any of the aforementioned plans. (4) Capital expenditure obligations includes contractual progress payments related to the construction of two new vessels based upon the shipbuilding agreements with Philly Shipyard, and other capital expenditure obligations. |
REPORTABLE SEGMENTS (Tables)
REPORTABLE SEGMENTS (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
REPORTABLE SEGMENTS | |
Schedule of reportable segment information | Years Ended December 31, 2015 2014 2013 Revenue: Ocean Transportation $ $ $ Logistics Total Revenue $ $ $ Operating Income: Ocean Transportation (1) $ $ $ Logistics Total Operating Income Interest expense, net ) ) ) Income before Income Taxes Income taxes ) ) ) Net Income $ $ $ (1) The Ocean Transportation segment includes $16.5 million, $6.6 million and $(2.0) million of equity in income (loss) from the Company’s Terminal Joint Venture, SSAT, for 2015, 2014, and 2013, respectively. As of December 31, 2015 2014 2013 As of December 31: Identifiable Assets: Ocean Transportation (2) $ $ $ Logistics Total Assets $ $ $ Capital Expenditures: Ocean Transportation $ $ $ Logistics Total Capital Expenditures $ $ $ Depreciation and Amortization: Ocean Transportation $ $ $ Logistics Total Depreciation and Amortization $ $ $ (2) The Ocean Transportation segment includes $66.4 million, $64.4 million and $57.6 million related to the Company’s Terminal Joint Venture equity investment in SSAT as of December 31, 2015, 2014, and 2013, respectively. |
QUARTERLY INFORMATION (Unaudi38
QUARTERLY INFORMATION (Unaudited) (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
QUARTERLY INFORMATION (Unaudited) | |
Schedule of quarterly financial information | Quarters During the Year Ended December 31, 2015 Q1 Q2 Q3 Q4 Operating Revenue: Ocean Transportation $ $ $ $ Logistics Total Operating Revenue $ $ $ $ Operating Income: Ocean Transportation $ $ $ $ Logistics Total Operating Income Interest Expense ) ) ) ) Income before Income Taxes Income Tax Expense ) ) ) ) Net Income $ $ $ $ Basic Earnings Per Share: $ $ $ $ Diluted Earnings Per Share: $ $ $ $ Quarters During the Year Ended December 31, 2014 Q1 Q2 Q3 Q4 Operating Revenue: Ocean Transportation $ $ $ $ Logistics Total Operating Revenue $ $ $ $ Operating Income (loss): Ocean Transportation $ $ $ $ Logistics Total Operating Income Interest Expense ) ) ) ) Income before Income Taxes Income Tax Expense ) ) ) ) Net Income $ $ $ $ Basic Earnings Per Share: $ $ $ $ Diluted Earnings Per Share: $ $ $ $ |
Schedule of infrequent transactions impacting the segment results | Quarters During the Year Ended December 31, 2015 Q1 Q2 Q3 Q4 Horizon Acquisition Related Costs (1): $ $ ) $ ) $ ) Molasses Settlement (2): $ $ ) $ $ ) Quarters During the Year Ended December 31, 2014 Q1 Q2 Q3 Q4 Molasses Settlement (2): $ $ $ $ ) (1) One-time costs related to the Horizon Acquisition on May 29, 2015, included in selling, general and administrative costs of the Ocean Transportation segment (see Note 3). (2) Litigation settlement entered into by the Company during 2015 and 2014 resulting from molasses spill in September 2013, are included in selling, general and administrative costs of the Ocean Transportation segment. |
DESCRIPTION OF THE BUSINESS (De
DESCRIPTION OF THE BUSINESS (Details) | 12 Months Ended |
Dec. 31, 2015segmentfacility | |
DESCRIPTION OF THE BUSINESS | |
Number of Reportable Segments | segment | 2 |
Ocean Transportation | SSAT | |
DESCRIPTION OF THE BUSINESS | |
Ownership interest in SSAT (as a percent) | 35.00% |
Number of terminal facilities on which SSAT provided terminal and stevedoring services on the U.S. West Coast | 6 |
MatNav | Ocean Transportation | SSAT | |
DESCRIPTION OF THE BUSINESS | |
Number of terminal facilities on which SSAT provided terminal and stevedoring services on the U.S. West Coast | 3 |
SIGNIFICANT ACCOUNTING POLICI40
SIGNIFICANT ACCOUNTING POLICIES - FISCAL YEAR (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Fiscal Year | |||
Fiscal Period Duration | 364 days | 364 days | 364 days |
Cash and Cash Equivalents | |||
Outstanding checks in excess of funds on deposits | $ 13.8 | $ 18.9 | |
Accounts Receivable | |||
Eligible accounts receivable assigned to CCF | 176.6 | 150.7 | |
Allowance for doubtful accounts | |||
Balance at Beginning of year | 5 | 4.1 | $ 4.7 |
Expense | 2 | 1.8 | 0.6 |
Write-offs and Other | (0.4) | (0.9) | (1.2) |
Balance at End of Year | 6.6 | 5 | $ 4.1 |
Prepaid and Other Assets: | |||
Prepaid fuel | 9.3 | 11 | |
Insurance | 4.9 | 2.9 | |
Income tax receivable | 15.1 | ||
Other | 8.8 | 6.6 | |
Total | 38.1 | 20.5 | |
Carrying value | |||
Cash and Cash Equivalents | |||
Cash and cash equivalents | 25.5 | 293.4 | |
Accounts receivable, net | 214.3 | 197.6 | |
Fixed rate debt | 429.9 | 373.6 | |
Fair Value Measurement | |||
Cash and Cash Equivalents | |||
Cash and cash equivalents | 25.5 | 293.4 | |
Accounts receivable, net | 214.3 | 197.6 | |
Fixed rate debt | 443.8 | 395.7 | |
Fair Value Measurement | Quoted Prices in Active Markets (Level 1) | |||
Cash and Cash Equivalents | |||
Cash and cash equivalents | 25.5 | 293.4 | |
Fair Value Measurement | Significant Observable Inputs (Level 2) | |||
Cash and Cash Equivalents | |||
Accounts receivable, net | 214.3 | 197.6 | |
Fixed rate debt | $ 443.8 | $ 395.7 |
SIGNIFICANT ACCOUNTING POLICI41
SIGNIFICANT ACCOUNTING POLICIES - PROPERTY AND EQUIPMENT (Details) $ in Millions | 12 Months Ended | ||
Dec. 31, 2015USD ($)item | Dec. 31, 2014USD ($) | Dec. 31, 2013USD ($) | |
Impairment of Investment | |||
Impairment charges related to investment in Terminal joint venture | $ | $ 0 | $ 0 | $ 0 |
Dry-docking | |||
Number of dry-docking inspections to be made within a specified period | 2 | ||
Period within which number of specified dry-docking inspections to be made | 5 years | ||
Number of non-U.S. flag vessels in operations | 4 | ||
Number of non-U.S. flag vessels owned | 1 | ||
Number of non-U.S. flag vessels under bareboat charter | 1 | ||
Number of non-U.S. flag vessels under time charter | 2 | ||
Dry-dock inspections interval, minimum | 2 years | ||
Dry-dock inspections interval, maximum | 5 years | ||
Vessels | Maximum | |||
Depreciation | |||
Useful life | 40 years | ||
Machinery And Equipment | Maximum | |||
Depreciation | |||
Useful life | 20 years | ||
Terminal Facilities | Maximum | |||
Depreciation | |||
Useful life | 35 years | ||
Operating costs | |||
Long-lived Assets | |||
Impairment charges related to long-lived assets | $ | $ 2.1 | $ 0 | $ 0 |
SIGNIFICANT ACCOUNTING POLICI42
SIGNIFICANT ACCOUNTING POLICIES - ACCRUED AND OTHER LIABILITIES (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Intangible assets | |||
Impairment charges related to finite-lived intangible assets | $ 0 | $ 0 | $ 0 |
Accrued and other liabilities | |||
Incentives and other benefit accruals | 20.7 | 16.1 | |
Molasses tank farm removal accrual | 7.4 | ||
Restructuring and severance accruals | 5 | ||
Repayments of multi-employer withdrawal liability | 4.1 | ||
Interest on debt | 3.9 | 3.3 | |
Horizon Acquisition related payments | 3.8 | ||
Deferred revenue | 3.6 | 2.4 | |
Post retirement benefit obligations | 2.5 | 2.5 | |
Other liabilities | 9.5 | 2.6 | |
Total Assets | $ 60.5 | $ 26.9 | |
Customer Relationships. | Minimum | |||
Intangible assets | |||
Expected useful lives | 3 years | ||
Customer Relationships. | Maximum | |||
Intangible assets | |||
Expected useful lives | 21 years |
SIGNIFICANT ACCOUNTING POLICI43
SIGNIFICANT ACCOUNTING POLICIES - COMPREHENSIVE INCOME (LOSS) (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Changes in accumulated other comprehensive loss by component, net of taxes | |||
Balance | $ 363.8 | $ 338.2 | $ 279.9 |
Net gain (loss) in prior service cost | 5.1 | (31.4) | 18.7 |
Amortization of prior service cost | (1.3) | (1.3) | (1.3) |
Amortization of net loss included in net periodic pension cost | 1.8 | 2.5 | 4.7 |
Foreign currency translation adjustment | 0.7 | 0.4 | (0.1) |
Other | 0.1 | ||
Balance | 450.6 | 363.8 | 338.2 |
Comprehensive Income (Loss): | |||
Tax benefit (expense) on other comprehensive income (loss) | (5) | 19.4 | (14.1) |
Qualified Pension Benefits | |||
Changes in accumulated other comprehensive loss by component, net of taxes | |||
Balance | (45) | (20.1) | |
Net gain (loss) in prior service cost | 3.7 | (25.4) | |
Amortization of prior service cost | (1.3) | (1.3) | |
Amortization of net loss included in net periodic pension cost | 0.9 | 1.8 | |
Balance | (41.7) | (45) | (20.1) |
Post-retirement Benefits | |||
Changes in accumulated other comprehensive loss by component, net of taxes | |||
Balance | (7.2) | (1.7) | |
Net gain (loss) in prior service cost | 1.4 | (5.9) | |
Amortization of prior service cost | 0.1 | ||
Amortization of net loss included in net periodic pension cost | 1 | 0.4 | |
Balance | (4.7) | (7.2) | (1.7) |
Non-qualified Pension Benefits | |||
Changes in accumulated other comprehensive loss by component, net of taxes | |||
Balance | (0.7) | (0.9) | |
Net gain (loss) in prior service cost | (0.1) | ||
Amortization of prior service cost | (0.1) | ||
Amortization of net loss included in net periodic pension cost | (0.1) | 0.3 | |
Balance | (0.9) | (0.7) | (0.9) |
Foreign Currency Translation | |||
Changes in accumulated other comprehensive loss by component, net of taxes | |||
Balance | 0.3 | (0.1) | |
Foreign currency translation adjustment | 0.7 | 0.4 | |
Balance | 1 | 0.3 | (0.1) |
Interest Hedge | |||
Changes in accumulated other comprehensive loss by component, net of taxes | |||
Balance | (0.7) | (0.7) | |
Other | 0.1 | ||
Balance | (0.6) | (0.7) | (0.7) |
Accumulated Other Comprehensive Income (Loss) | |||
Changes in accumulated other comprehensive loss by component, net of taxes | |||
Balance | (53.3) | (23.5) | (45.5) |
Net gain (loss) in prior service cost | 5.1 | (31.4) | |
Amortization of prior service cost | (1.3) | (1.3) | |
Amortization of net loss included in net periodic pension cost | 1.8 | 2.5 | |
Foreign currency translation adjustment | 0.7 | 0.4 | |
Other | 0.1 | ||
Balance | $ (46.9) | $ (53.3) | $ (23.5) |
SIGNIFICANT ACCOUNTING POLICI44
SIGNIFICANT ACCOUNTING POLICIES - BASIC AND DILUTED EPS (Details) - USD ($) $ / shares in Units, shares in Millions, $ in Millions | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2015 | Sep. 30, 2015 | Jun. 30, 2015 | Mar. 31, 2015 | Dec. 31, 2014 | Sep. 30, 2014 | Jun. 30, 2014 | Mar. 31, 2014 | Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Net Income | |||||||||||
Net Income, Basic | $ 103 | $ 70.8 | $ 53.7 | ||||||||
Net Income, Diluted | $ 103 | $ 70.8 | $ 53.7 | ||||||||
Weighted Average Common Shares | |||||||||||
Basic (in shares) | 43.5 | 43 | 42.7 | ||||||||
Effect of Dilutive Securities (in shares) | 0.5 | 0.4 | 0.4 | ||||||||
Diluted (in shares) | 44 | 43.4 | 43.1 | ||||||||
Per Common Share Amount, Basic | |||||||||||
Net income (in dollars per share) | $ 0.61 | $ 0.95 | $ 0.23 | $ 0.58 | $ 0.65 | $ 0.50 | $ 0.42 | $ 0.08 | $ 2.37 | $ 1.65 | $ 1.26 |
Per Common Share Amount, Diluted | |||||||||||
Net income (in dollars per share) | $ 0.60 | $ 0.94 | $ 0.23 | $ 0.57 | $ 0.63 | $ 0.50 | $ 0.42 | $ 0.08 | $ 2.34 | $ 1.63 | $ 1.25 |
Stock options | |||||||||||
Earnings Per Share ("EPS") | |||||||||||
Antidilutive securities excluded from computation of earnings per share (in shares) | 0.1 | 0.1 | 0.1 |
BUSINESS COMBINATION - CONSIDER
BUSINESS COMBINATION - CONSIDERATION PAID (Details) $ / shares in Units, $ in Millions | May. 29, 2015USD ($)item$ / shares | Dec. 31, 2015USD ($) | Jun. 30, 2015USD ($) | Dec. 31, 2014USD ($) | Dec. 31, 2013USD ($) |
Assets acquired and liabilities assumed | |||||
Multi-employer withdrawal liabilities | $ (56.2) | ||||
Goodwill | 241.6 | $ 27.4 | $ 27.4 | ||
Horizon | |||||
Business acquisition | |||||
Business Combination, Ownership Percentage | 100.00% | ||||
Cash price (in dollars per share) | $ / shares | $ 0.72 | ||||
Number of Jones Act qualified containerships | item | 7 | ||||
Assets acquired and liabilities assumed | |||||
Cash and cash equivalent | 0.8 | ||||
Accounts receivable | 31.7 | ||||
Other current assets | 7.2 | ||||
Deferred tax assets, net | 45.6 | ||||
Property and equipment | $ 170.4 | 170.4 | |||
Intangibles - Customer relationships | 140 | ||||
Other long-term assets | 4.1 | ||||
Accounts payable | (22.8) | ||||
Accruals and other current liabilities | (32.1) | ||||
Multi-employer withdrawal liabilities | (60.6) | ||||
Capital lease obligations | (1.6) | ||||
Horizon's debt and warrants | (467.5) | ||||
Total identifiable assets less liabilities | (184.8) | ||||
Total cash paid for common shares | (29.4) | ||||
Goodwill | $ 214.2 | ||||
Horizon | Vessels | |||||
Assets acquired and liabilities assumed | |||||
Property and equipment | 130.7 | ||||
Horizon | Containers and equipment | |||||
Assets acquired and liabilities assumed | |||||
Property and equipment | 17.9 | ||||
Horizon | Terminal facilities and other property | |||||
Assets acquired and liabilities assumed | |||||
Property and equipment | 9.7 | ||||
Horizon | Construction in progress | |||||
Assets acquired and liabilities assumed | |||||
Property and equipment | 12.1 | ||||
Horizon | Customer relationships | |||||
Assets acquired and liabilities assumed | |||||
Intangibles - Customer relationships | $ 140 | ||||
Expected useful lives | 21 years | ||||
Horizon | As previously Reported | |||||
Total cash consideration | |||||
Common shares | $ 29.4 | ||||
Warrants | 37.1 | ||||
Horizon's debt (including accrued interest and breakage fees) | 428.9 | ||||
Total | $ 495.4 | ||||
Horizon | Adjustments | |||||
Assets acquired and liabilities assumed | |||||
Total identifiable assets less liabilities | $ (5.5) |
BUSINESS COMBINATION - PROFORMA
BUSINESS COMBINATION - PROFORMA (Details) - USD ($) $ / shares in Units, shares in Millions, $ in Millions | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | May. 29, 2015 | |
Estimated future benefit payments | |||
Benefit payment period | 18 years | ||
Horizon | |||
Estimated future benefit payments | |||
Total | $ 72.8 | $ 73.9 | |
Quarterly payments to ILA-PRSSA over an estimated period | $ 1 | ||
Benefit payment period | 18 years | ||
Condensed Consolidated Statements of Income and Comprehensive Income | |||
Revenue | $ 179.3 | ||
Net income before income taxes | 7.8 | ||
Pro-forma Financial Information | |||
Operating Revenue | 2,019.7 | $ 2,045.1 | |
Net income from continuing operations | $ 100.2 | $ 61.7 | |
Basic Earnings Per Share (in dollars per share) | $ 2.30 | $ 1.43 | |
Diluted Earnings Per Share (in dollars per share) | $ 2.28 | $ 1.42 | |
Weighted Average Number of Shares Outstanding: | |||
Basic | 43.5 | 43 | |
Diluted | 44 | 43.4 | |
Horizon | Selling, general and administrative costs | |||
Condensed Consolidated Statements of Income and Comprehensive Income | |||
Acquisition related costs | $ 19 |
INVESTMENT IN TERMINAL JOINT 47
INVESTMENT IN TERMINAL JOINT VENTURE (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Investments in affiliates | |||
Investment in related party Terminal Joint Venture | $ 66.4 | $ 64.4 | |
Financial information for equity method investment | |||
Company Share of Net Income (Loss) | 16.5 | 6.6 | $ (2) |
Distributions Received | 14 | ||
Current assets | 107 | 80.7 | |
Noncurrent assets | 121.2 | 140.9 | |
Total assets | 228.2 | 221.6 | |
Current liabilities | 42 | 40.9 | |
Noncurrent liabilities | 9.4 | 7.1 | |
Equity | 176.8 | 173.6 | |
Total Liabilities and Equity | 228.2 | 221.6 | |
Operating revenue | 621 | 586.2 | 498.4 |
Operating costs and expenses | 610.2 | 589.7 | 517.4 |
Operating Income (loss) | 10.8 | (3.5) | (19) |
Net Income (Loss) | $ 44.9 | 21.2 | (5.7) |
SSAT | Ocean Transportation | |||
Investments in affiliates | |||
Ownership interest accounted in the related party terminal joint venture (as a percent) | 35.00% | ||
Cost of services from transactions with unconsolidated affiliate | $ 174.1 | 164.8 | $ 164.3 |
Accounts payable and accrued liabilities | $ 19.5 | $ 17.5 |
PROPERTY AND EQUIPMENT - SUMMAR
PROPERTY AND EQUIPMENT - SUMMARY (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Property and equipment | |||
Cost | $ 1,988.9 | $ 1,798.2 | |
Accumulated Depreciation | 1,128.6 | 1,107 | |
Property and equipment, net | 860.3 | 691.2 | |
Depreciation Expense | 76.4 | 66.8 | $ 67.4 |
Property and equipment subject to capital leases | 6.4 | 2.6 | |
Net of accumulated depreciation | 1.1 | 0.7 | |
Amortization expenses | 0.6 | 0.3 | $ 0.3 |
Vessels | |||
Property and equipment | |||
Cost | 1,384.8 | 1,263.8 | |
Accumulated Depreciation | 787.4 | 757.7 | |
Property and equipment, net | 597.4 | 506.1 | |
Containers and equipment | |||
Property and equipment | |||
Cost | 496 | 466.8 | |
Accumulated Depreciation | 307.8 | 316.1 | |
Property and equipment, net | 188.2 | 150.7 | |
Terminal facilities and other property | |||
Property and equipment | |||
Cost | 42 | 39.2 | |
Accumulated Depreciation | 33.4 | 33.2 | |
Property and equipment, net | 8.6 | 6 | |
Construction in progress | |||
Property and equipment | |||
Cost | 66.1 | 28.4 | |
Property and equipment, net | $ 66.1 | $ 28.4 |
PROPERTY AND EQUIPMENT - NEW CO
PROPERTY AND EQUIPMENT - NEW CONSTRUCTION (Details) $ in Millions | 3 Months Ended | 12 Months Ended | |
Dec. 31, 2013USD ($)item | Dec. 31, 2015USD ($) | Dec. 31, 2014USD ($) | |
Property and equipment | |||
Number of 3,600 twenty-foot equivalent units Aloha-class container ships to be constructed | item | 2 | ||
APSI | Aloha-class dual-fuel capable container vessels | |||
Property and equipment | |||
Number of 3,600 twenty-foot equivalent units Aloha-class container ships to be constructed | item | 2 | ||
Cost for construction of containerships | $ | $ 418 | ||
Progress payments made under the agreement | $ | $ 29.3 | $ 8.4 |
GOODWILL AND INTANGIBLE ASSET50
GOODWILL AND INTANGIBLE ASSETS - GOODWILL (Details) - USD ($) $ in Millions | 12 Months Ended | |
Dec. 31, 2015 | Dec. 31, 2014 | |
Changes in the Company's goodwill | ||
Balance at the beginning of the period | $ 27.4 | $ 27.4 |
Additions | 214.2 | |
Balance at the end of the period | 241.6 | $ 27.4 |
Accumulated impairment related to goodwill | 0 | 0 |
Horizon | ||
Changes in the Company's goodwill | ||
Balance at the end of the period | 214.2 | |
Ocean Transportation | ||
Changes in the Company's goodwill | ||
Balance at the beginning of the period | 0.8 | $ 0.8 |
Additions | 214.2 | |
Balance at the end of the period | 215 | $ 0.8 |
Ocean Transportation | Horizon | ||
Changes in the Company's goodwill | ||
Goodwill increase | 214.2 | |
Logistics | ||
Changes in the Company's goodwill | ||
Balance at the beginning of the period | 26.6 | $ 26.6 |
Additions | ||
Balance at the end of the period | $ 26.6 | $ 26.6 |
GOODWILL AND INTANGIBLE ASSET51
GOODWILL AND INTANGIBLE ASSETS - INTANGIBLE ASSETS (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Finite-lived Intangible Assets | |||
Gross Amount at the beginning of the period | $ 10.4 | $ 10.4 | |
Additions | 141 | ||
Gross Amount at the end of the period | 151.4 | 10.4 | $ 10.4 |
Accumulated Amortization | (12.3) | (7.9) | |
Net Amount | 139.1 | 2.5 | |
Aggregate intangible asset amortization | 4.4 | 1.3 | 0.8 |
Estimated amortization expenses related to intangibles | |||
2,016 | 7.4 | ||
2,017 | 7.4 | ||
2,018 | 7.2 | ||
2,019 | 7 | ||
2,020 | 7 | ||
Thereafter | 103.1 | ||
Net Amount | 139.1 | 2.5 | |
Ocean Transportation | |||
Finite-lived Intangible Assets | |||
Gross Amount at the beginning of the period | 0.6 | 0.6 | |
Gross Amount at the end of the period | 140.6 | 0.6 | 0.6 |
Accumulated Amortization | (4.2) | (0.3) | |
Net Amount | 136.4 | 0.3 | |
Estimated amortization expenses related to intangibles | |||
Net Amount | 136.4 | 0.3 | |
Ocean Transportation | Horizon | |||
Finite-lived Intangible Assets | |||
Additions | $ 140 | ||
Ocean Transportation | Customer Relationships. | Horizon | |||
Estimated amortization expenses related to intangibles | |||
Expected useful life | 21 years | ||
Logistics | |||
Finite-lived Intangible Assets | |||
Gross Amount at the beginning of the period | $ 9.8 | 9.8 | |
Additions | 1 | ||
Gross Amount at the end of the period | 12 | 9.8 | $ 9.8 |
Accumulated Amortization | (8.1) | (7.6) | |
Net Amount | 2.7 | 2.2 | |
Estimated amortization expenses related to intangibles | |||
Net Amount | $ 2.7 | $ 2.2 |
CAPITAL CONSTRUCTION FUND (Deta
CAPITAL CONSTRUCTION FUND (Details) - USD ($) $ in Millions | 12 Months Ended | |
Dec. 31, 2015 | Dec. 31, 2014 | |
Maximum period to commit fund deposits for qualified purposes | 25 years | |
Period over which deposits will be treated as non-qualified withdrawals | 5 years | |
Accounts receivable, net | $ 214.3 | $ 197.6 |
Capital Construction Fund - cash on deposit | 27.5 | |
Eligible Accounts Receivable Assigned to CCF | ||
Accounts receivable, net | $ 176.6 | 150.7 |
CCF Cash Deposits and Withdrawals | Long-term Assets | ||
Capital Construction Fund - cash on deposit | $ 27.5 |
DEBT - SUMMARY (Details)
DEBT - SUMMARY (Details) - USD ($) $ in Millions | Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 |
Debt | |||
Capital leases | $ 3.1 | $ 1.3 | |
Total Debt | 429.9 | 373.6 | |
Less current portion | (22) | (21.6) | |
Total Long-term Debt | 407.9 | 352 | |
5.79%, payable through 2020 | |||
Debt | |||
Total Debt | $ 31.5 | $ 38.5 | |
Interest rate (as a percent) | 5.79% | 5.79% | 5.79% |
3.66%, payable through 2023 | |||
Debt | |||
Total Debt | $ 68.4 | $ 77.5 | |
Interest rate (as a percent) | 3.66% | 3.66% | 3.66% |
4.16%, payable through 2027 | |||
Debt | |||
Total Debt | $ 55 | $ 55 | |
Interest rate (as a percent) | 4.16% | 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% | 4.31% |
4.35%, payable through 2044 | |||
Debt | |||
Total Debt | $ 100 | $ 100 | |
Interest rate (as a percent) | 4.35% | 4.35% | |
3.92%, payable through 2045 | |||
Debt | |||
Total Debt | $ 75 | ||
Interest rate (as a percent) | 3.92% | ||
5.34%, payable through 2028 | |||
Debt | |||
Total Debt | $ 28.6 | $ 30.8 | |
Interest rate (as a percent) | 5.34% | 5.34% | 5.34% |
5.27%, payable through 2029 | |||
Debt | |||
Total Debt | $ 30.8 | $ 33 | |
Interest rate (as a percent) | 5.27% | 5.27% | 5.27% |
Revolving Credit Facility | |||
Debt | |||
Long-term Line of Credit | $ 0 | $ 0 |
DEBT - DESCRIPTION (Details)
DEBT - DESCRIPTION (Details) $ in Millions | Jul. 30, 2015USD ($) | Jul. 31, 2015USD ($) | Jan. 31, 2014USD ($) | Jun. 30, 2012USD ($)tranche | Dec. 31, 2015USD ($) | Dec. 31, 2014USD ($) | Dec. 31, 2013 | Sep. 30, 2013USD ($) |
Debt | ||||||||
Letters of credit | $ 11 | |||||||
Debt maturities | ||||||||
2,016 | 22 | |||||||
2,017 | 31 | |||||||
2,018 | 30.6 | |||||||
2,019 | 30 | |||||||
2,020 | 30 | |||||||
Thereafter | 286.3 | |||||||
Total Debt | 429.9 | $ 373.6 | ||||||
Revolving Credit Facility | ||||||||
Debt | ||||||||
Long-term Line of Credit | 0 | $ 0 | ||||||
Debt instrument term | 5 years | |||||||
Maximum borrowing capacity | $ 400 | $ 375 | ||||||
Uncommitted option to increase credit facility | $ 150 | 75 | ||||||
Unused portion of credit facility | $ 389 | |||||||
Interest rate applicable to any borrowings | 1.40% | |||||||
Revolving Credit Facility | Extension of maturity | ||||||||
Debt | ||||||||
Debt instrument term | 5 years | |||||||
Revolving Credit Facility | Minimum | ||||||||
Debt | ||||||||
Ratio of consolidated EBITDA to interest expense | 0.0350 | |||||||
Credit facility commitment fee percentage | 0.15% | |||||||
Revolving Credit Facility | Minimum | London Interbank Offered Rate (LIBOR) | ||||||||
Debt | ||||||||
Variable rate margin | 1.00% | |||||||
Revolving Credit Facility | Minimum | Base rate | ||||||||
Debt | ||||||||
Variable rate margin | 0.00% | |||||||
Revolving Credit Facility | Maximum | ||||||||
Debt | ||||||||
Debt covenant, required ratio of debt to consolidated EBITDA | 0.0325 | |||||||
Debt covenant, required principal amount of priority debt as a percentage of consolidated tangible assets | 20.00% | |||||||
Debt covenant, required principal amount of priority debt (excluding Title XI) as a percentage of consolidated tangible assets | 10.00% | |||||||
Credit facility commitment fee percentage | 0.30% | |||||||
Revolving Credit Facility | Maximum | London Interbank Offered Rate (LIBOR) | ||||||||
Debt | ||||||||
Variable rate margin | 1.75% | |||||||
Revolving Credit Facility | Maximum | Base rate | ||||||||
Debt | ||||||||
Variable rate margin | 0.75% | |||||||
Standby and commercial letters of credit | ||||||||
Debt | ||||||||
Maximum borrowing capacity | 100 | |||||||
Letters of credit | $ 11 | |||||||
Standby and commercial letters of credit | Minimum | ||||||||
Debt | ||||||||
Line of credit fees percentage | 1.00% | |||||||
Standby and commercial letters of credit | Maximum | ||||||||
Debt | ||||||||
Line of credit fees percentage | 1.75% | |||||||
Swing Line Loans | ||||||||
Debt | ||||||||
Maximum borrowing capacity | 50 | |||||||
5.34%, payable through 2028 | ||||||||
Debt | ||||||||
Debt issued | $ 55 | |||||||
Interest rate (as a percent) | 5.34% | 5.34% | 5.34% | |||||
Semi-annual payments | $ 1.1 | |||||||
Debt maturities | ||||||||
Total Debt | $ 28.6 | $ 30.8 | ||||||
5.79%, payable through 2020 | ||||||||
Debt | ||||||||
Interest rate (as a percent) | 5.79% | 5.79% | 5.79% | |||||
Annual principal payments | $ 3.5 | |||||||
Debt maturities | ||||||||
Total Debt | 31.5 | $ 38.5 | ||||||
5.27%, payable through 2029 | ||||||||
Debt | ||||||||
Debt issued | $ 55 | |||||||
Interest rate (as a percent) | 5.27% | 5.27% | 5.27% | |||||
Semi-annual payments | $ 1.1 | |||||||
Debt maturities | ||||||||
Total Debt | $ 30.8 | $ 33 | ||||||
Senior Unsecured Long Term Debt | ||||||||
Debt | ||||||||
Debt issued | $ 100 | |||||||
Debt instrument term | 30 years | |||||||
Weighted average period | 14 years 6 months | |||||||
Interest rate (as a percent) | 4.35% | |||||||
Senior Unsecured Long Term Debt | Debt Instrument Redemption 2021 | ||||||||
Debt | ||||||||
Annual principal payments | $ 5 | |||||||
Senior Unsecured Long Term Debt | Debt Instrument Redemption 2022 and 2023 | ||||||||
Debt | ||||||||
Annual principal payments | 7.5 | |||||||
Senior Unsecured Long Term Debt | Debt Instrument Redemption 2024 to 2027 | ||||||||
Debt | ||||||||
Annual principal payments | 10 | |||||||
Senior Unsecured Long Term Debt | Debt Instrument Redemption 2028 | ||||||||
Debt | ||||||||
Annual principal payments | 8 | |||||||
Senior Unsecured Long Term Debt | Debt Instrument Redemption 2029 and thereafter until 2044 | ||||||||
Debt | ||||||||
Annual principal payments | $ 2 | |||||||
4.35%, payable through 2044 | ||||||||
Debt | ||||||||
Interest rate (as a percent) | 4.35% | 4.35% | ||||||
Debt maturities | ||||||||
Total Debt | $ 100 | $ 100 | ||||||
Unsecured debt | ||||||||
Debt | ||||||||
Debt issued | $ 170 | |||||||
Weighted average coupon rate (as a percent) | 3.97% | |||||||
Weighted average period | 9 years 2 months 12 days | |||||||
Number of tranches | tranche | 3 | |||||||
Unsecured debt | Debt Instrument Redemption 2015 through 2016 | ||||||||
Debt | ||||||||
Semi-annual payments | $ 4.6 | |||||||
Unsecured debt | Debt Instrument Redemption 2017 through mid-year 2023 | ||||||||
Debt | ||||||||
Semi-annual payments | 8.4 | |||||||
Unsecured debt | Debt Instrument Redemption Mid-year 2023 through mid-year 2027 | ||||||||
Debt | ||||||||
Semi-annual payments | 3.8 | |||||||
Unsecured debt | Debt Instrument Redemption 2017 through 2019 | ||||||||
Debt | ||||||||
Semi-annual payments | 1.2 | |||||||
Unsecured debt, tranche maturing in 2023 | ||||||||
Debt | ||||||||
Debt issued | $ 77.5 | |||||||
Interest rate (as a percent) | 3.66% | |||||||
Unsecured debt, tranche maturing in 2027 | ||||||||
Debt | ||||||||
Debt issued | $ 55 | |||||||
Interest rate (as a percent) | 4.16% | |||||||
Unsecured debt, tranche maturing in 2032 | ||||||||
Debt | ||||||||
Debt issued | $ 37.5 | |||||||
Interest rate (as a percent) | 4.31% | |||||||
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 | Debt Instrument Redemption After 2026 | ||||||||
Debt | ||||||||
Annual principal payments | $ 1.5 | |||||||
Notes 30 years | Debt Instrument Redemption 2017 through 2019 | ||||||||
Debt | ||||||||
Annual principal payments | 1.8 | |||||||
Notes 30 years | Minimum | Debt Instrument Redemption 2020 through 2026 | ||||||||
Debt | ||||||||
Annual principal payments | 1.3 | |||||||
Notes 30 years | Maximum | Debt Instrument Redemption 2020 through 2026 | ||||||||
Debt | ||||||||
Annual principal payments | $ 8 | |||||||
Title XI Notes | Financial Guarantee | ||||||||
Debt maturities | ||||||||
Total Debt | $ 59.4 |
LEASES (Details)
LEASES (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Leases | |||
Rent expenses for short-term and cancelable equipment | $ 39.9 | $ 27.6 | $ 20.5 |
Future minimum payments under operating leases | |||
2,016 | 32.3 | ||
2,017 | 24.8 | ||
2,018 | 18.5 | ||
2,019 | 13.7 | ||
2,020 | 11.7 | ||
Thereafter | 28.9 | ||
Total minimum lease payments | 129.9 | ||
Costs And Expenses | |||
Leases | |||
Rent expense | $ 65.6 | $ 58.3 | $ 58.2 |
Minimum | |||
Leases | |||
Term of existing operating leases | 1 year | ||
Maximum | |||
Leases | |||
Term of existing operating leases | 50 years |
INCOME TAXES - SUMMARY (Details
INCOME TAXES - SUMMARY (Details) - USD ($) $ in Millions | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2015 | Sep. 30, 2015 | Jun. 30, 2015 | Mar. 31, 2015 | Dec. 31, 2014 | Sep. 30, 2014 | Jun. 30, 2014 | Mar. 31, 2014 | Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Current: | |||||||||||
Federal | $ 22.6 | $ 45.5 | $ (24.3) | ||||||||
State | 2.9 | 3.7 | (1) | ||||||||
Total | 25.5 | 49.2 | (25.3) | ||||||||
Deferred: | 49.3 | 2.7 | 57.5 | ||||||||
Total income taxes expense | $ 14.4 | $ 25.6 | $ 19.2 | $ 15.6 | $ 17.3 | $ 19.1 | $ 13.1 | $ 2.4 | $ 74.8 | $ 51.9 | $ 32.2 |
Difference of Income tax expense from amounts computed by applying the statutory federal rate to income from continuing operations before income taxes | |||||||||||
Computed federal income tax expense (as a percent) | 35.00% | 35.00% | 35.00% | ||||||||
State income tax (as a percent) | 2.50% | 2.20% | 2.90% | ||||||||
Valuation allowance (as a percent) | 1.10% | 3.30% | |||||||||
Foreign taxes (as a percent) | 0.60% | 0.40% | |||||||||
Deferred tax adjustment (as a percent) | 1.10% | (0.90%) | |||||||||
Unrecognized tax benefit (as a percent) | 0.40% | (0.40%) | (2.10%) | ||||||||
Other-net (as a percent) | 1.40% | 2.70% | 1.70% | ||||||||
Effective income tax rate , Percent, Total | 42.10% | 42.30% | 37.50% | ||||||||
Valuation allowance related to foreign subsidiary losses | $ 1.8 | $ 4.1 | |||||||||
Valuation allowance recorded | $ 0 | ||||||||||
Deferred tax assets: | |||||||||||
Benefit plans | 79.1 | 63.6 | 79.1 | 63.6 | |||||||
Federal net operating losses | 68 | 68 | |||||||||
Insurance reserves | 15.4 | 11.4 | 15.4 | 11.4 | |||||||
State net operating losses | 7.8 | 7.8 | |||||||||
Foreign losses | 5.7 | 4.1 | 5.7 | 4.1 | |||||||
Alternative minimum tax credits | 3.6 | 1.5 | 3.6 | 1.5 | |||||||
Allowance for doubtful accounts | 2.4 | 1.4 | 2.4 | 1.4 | |||||||
Other | 1.9 | 0.8 | 1.9 | 0.8 | |||||||
Total deferred tax assets | 183.9 | 82.8 | 183.9 | 82.8 | |||||||
Valuation allowance | (12.6) | (4.1) | (12.6) | (4.1) | |||||||
Total Deferred tax assets, net of valuation allowance | 171.3 | 78.7 | 171.3 | 78.7 | |||||||
Deferred tax liabilities: | |||||||||||
Basis differences for property and equipment | 300.8 | 252.7 | 300.8 | 252.7 | |||||||
Capital Construction Fund | 95.6 | 106.9 | 95.6 | 106.9 | |||||||
Intangibles | 53 | 3.8 | 53 | 3.8 | |||||||
Deferred revenue | 11.8 | 10.1 | 11.8 | 10.1 | |||||||
Joint ventures and other investments | 10.6 | 7.7 | 10.6 | 7.7 | |||||||
Reserves - Assets | (2.1) | (2.1) | |||||||||
Reserves - Liabilities | 10 | 10 | |||||||||
Total deferred tax liabilities | 481.8 | 379.1 | 481.8 | 379.1 | |||||||
Deferred tax liability, net , Total | $ 310.5 | 300.4 | $ 310.5 | 300.4 | |||||||
Deferred income taxes, net current | $ 8 | $ 8 |
INCOME TAXES - OPERATING LOSS A
INCOME TAXES - OPERATING LOSS AND TAX CREDIT CARRYFORWARDS (Details) - USD ($) $ in Millions | Dec. 31, 2015 | Dec. 31, 2014 |
Operating Loss and Tax Credit Carryforwards | ||
Alternative minimum tax credit carryforwards | $ 3.6 | $ 1.5 |
Valuation allowance | 12.6 | 4.1 |
U.S. Federal Income Tax | ||
Operating Loss and Tax Credit Carryforwards | ||
Net operating losses carryforwards | 194.2 | 0 |
State Income Tax | ||
Operating Loss and Tax Credit Carryforwards | ||
Net operating losses carryforwards | 192.4 | 0 |
Foreign Income Tax | ||
Operating Loss and Tax Credit Carryforwards | ||
Net operating losses carryforwards | $ 20.2 | $ 14.6 |
INCOME TAXES - UNRECOGNIZED TAX
INCOME TAXES - UNRECOGNIZED TAX BENEFITS (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Net tax benefits from share-based transactions | $ 4.8 | $ 3.4 | $ 2.2 |
Reconciliation of the beginning and ending amount of gross unrecognized tax benefits | |||
Balance at beginning of the period | 6.7 | 7.2 | 8.3 |
Additions for tax positions of prior years | 1.5 | 0.5 | 2 |
Additions from unrecognized tax benefits acquired | 14.4 | ||
Reductions for lapse of statute of limitations | (0.5) | (1) | (3.1) |
Balance at the end | 22.1 | 6.7 | 7.2 |
Interest accrued related to unrecognized tax benefits | 0.4 | 0.2 | $ 0.3 |
Stock options | |||
Net tax benefits from share-based transactions | $ 2.6 | $ 0.8 |
PENSION AND POST-RETIREMENT P59
PENSION AND POST-RETIREMENT PLANS - ASSET ALLOCATION (Details) - plan | 12 Months Ended | |
Dec. 31, 2015 | Dec. 31, 2014 | |
Employee benefit plans | ||
Number of single-employer defined benefit pension funded plans | 2 | |
Qualified Pension Benefits | ||
Employee benefit plans | ||
Target allocation (as a percent) | 100.00% | |
Asset allocations (as a percent) | 100.00% | 100.00% |
One year returns (losses) on plan assets (as a percent) | (2.00%) | |
Three year returns (losses) on plan assets (as a percent) | 8.00% | |
Five year returns (losses) on plan assets (as a percent) | 6.80% | |
Long-term average return on plan assets since inception (as a percent) | 8.30% | |
Qualified Pension Benefits | Domestic equity securities | ||
Employee benefit plans | ||
Target allocation (as a percent) | 53.00% | |
Asset allocations (as a percent) | 62.00% | 63.00% |
Qualified Pension Benefits | International equity securities | ||
Employee benefit plans | ||
Target allocation (as a percent) | 15.00% | |
Asset allocations (as a percent) | 13.00% | 14.00% |
Qualified Pension Benefits | Debt securities | ||
Employee benefit plans | ||
Target allocation (as a percent) | 22.00% | |
Asset allocations (as a percent) | 18.00% | 17.00% |
Qualified Pension Benefits | Real estate | ||
Employee benefit plans | ||
Target allocation (as a percent) | 5.00% | |
Asset allocations (as a percent) | 6.00% | 5.00% |
Qualified Pension Benefits | Other and cash | ||
Employee benefit plans | ||
Target allocation (as a percent) | 5.00% | |
Asset allocations (as a percent) | 1.00% | 1.00% |
PENSION AND POST-RETIREMENT P60
PENSION AND POST-RETIREMENT PLANS - FAIR VALUE (Details) - Qualified Pension Benefits - USD ($) $ in Millions | Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 |
Pension and Post-retirement Plans | |||
Total | $ 168.9 | $ 178.9 | $ 172.8 |
Quoted Prices in Active Markets (Level 1) | |||
Pension and Post-retirement Plans | |||
Total | 94.6 | 141.2 | |
Quoted Prices in Active Markets (Level 1) | CCF Cash Deposits and Withdrawals | |||
Pension and Post-retirement Plans | |||
Total | 6.9 | 19.4 | |
Quoted Prices in Active Markets (Level 1) | U.S. large-cap | |||
Pension and Post-retirement Plans | |||
Total | 48.6 | 69.5 | |
Quoted Prices in Active Markets (Level 1) | U.S. mid- and small-cap | |||
Pension and Post-retirement Plans | |||
Total | 28.7 | 35.6 | |
Quoted Prices in Active Markets (Level 1) | International large-cap | |||
Pension and Post-retirement Plans | |||
Total | 5.9 | ||
Quoted Prices in Active Markets (Level 1) | Emerging markets fixed income | |||
Pension and Post-retirement Plans | |||
Total | 10.4 | 10.8 | |
Significant Observable Inputs (Level 2) | |||
Pension and Post-retirement Plans | |||
Total | 63.8 | 28.1 | |
Significant Observable Inputs (Level 2) | U.S. large-cap | |||
Pension and Post-retirement Plans | |||
Total | 15.9 | ||
Significant Observable Inputs (Level 2) | U.S. mid- and small-cap | |||
Pension and Post-retirement Plans | |||
Total | 6 | ||
Significant Observable Inputs (Level 2) | International large-cap | |||
Pension and Post-retirement Plans | |||
Total | 16.5 | 11.7 | |
Significant Observable Inputs (Level 2) | International small-cap | |||
Pension and Post-retirement Plans | |||
Total | 6.1 | 6.9 | |
Significant Observable Inputs (Level 2) | U.S. Treasuries | |||
Pension and Post-retirement Plans | |||
Total | 5.6 | 0.4 | |
Significant Observable Inputs (Level 2) | Municipal bonds | |||
Pension and Post-retirement Plans | |||
Total | 5.3 | 0.1 | |
Significant Observable Inputs (Level 2) | Investment grade U.S. corporate bonds | |||
Pension and Post-retirement Plans | |||
Total | 2.4 | 2.3 | |
Significant Observable Inputs (Level 2) | High-yield U.S. corporate bonds | |||
Pension and Post-retirement Plans | |||
Total | 6 | 6.7 | |
Significant Unobservable Inputs (Level 3) | |||
Pension and Post-retirement Plans | |||
Total | 10.5 | 9.6 | |
Significant Unobservable Inputs (Level 3) | Real estate partnerships interests | |||
Pension and Post-retirement Plans | |||
Total | 10.3 | 9.3 | |
Significant Unobservable Inputs (Level 3) | Private equity partnership interests | |||
Pension and Post-retirement Plans | |||
Total | 0.2 | 0.3 | |
Fair Value Measurement | |||
Pension and Post-retirement Plans | |||
Total | 168.9 | 178.9 | |
Fair Value Measurement | CCF Cash Deposits and Withdrawals | |||
Pension and Post-retirement Plans | |||
Total | 6.9 | 19.4 | |
Fair Value Measurement | U.S. large-cap | |||
Pension and Post-retirement Plans | |||
Total | 64.5 | 69.5 | |
Fair Value Measurement | U.S. mid- and small-cap | |||
Pension and Post-retirement Plans | |||
Total | 34.7 | 35.6 | |
Fair Value Measurement | International large-cap | |||
Pension and Post-retirement Plans | |||
Total | 16.5 | 17.6 | |
Fair Value Measurement | International small-cap | |||
Pension and Post-retirement Plans | |||
Total | 6.1 | 6.9 | |
Fair Value Measurement | U.S. Treasuries | |||
Pension and Post-retirement Plans | |||
Total | 5.6 | 0.4 | |
Fair Value Measurement | Municipal bonds | |||
Pension and Post-retirement Plans | |||
Total | 5.3 | 0.1 | |
Fair Value Measurement | Investment grade U.S. corporate bonds | |||
Pension and Post-retirement Plans | |||
Total | 2.4 | 2.3 | |
Fair Value Measurement | High-yield U.S. corporate bonds | |||
Pension and Post-retirement Plans | |||
Total | 6 | 6.7 | |
Fair Value Measurement | Emerging markets fixed income | |||
Pension and Post-retirement Plans | |||
Total | 10.4 | 10.8 | |
Fair Value Measurement | Real estate partnerships interests | |||
Pension and Post-retirement Plans | |||
Total | 10.3 | 9.3 | |
Fair Value Measurement | Private equity partnership interests | |||
Pension and Post-retirement Plans | |||
Total | $ 0.2 | $ 0.3 |
PENSION AND POST-RETIREMENT P61
PENSION AND POST-RETIREMENT PLANS - RETURN ON PLAN ASSETS (Details) - Qualified Pension Benefits - USD ($) $ in Millions | 12 Months Ended | |
Dec. 31, 2015 | Dec. 31, 2014 | |
Changes in plan assets: | ||
Balance at the beginning of the period | $ 178.9 | $ 172.8 |
Actual return (loss) on plan assets: | ||
Balance at the end of the period | 168.9 | 178.9 |
Significant Unobservable Inputs (Level 3) | ||
Changes in plan assets: | ||
Balance at the beginning of the period | 9.6 | |
Actual return (loss) on plan assets: | ||
Balance at the end of the period | 10.5 | 9.6 |
Significant Unobservable Inputs (Level 3) | Real estate partnerships interests | ||
Changes in plan assets: | ||
Balance at the beginning of the period | 9.3 | |
Actual return (loss) on plan assets: | ||
Balance at the end of the period | 10.3 | 9.3 |
Significant Unobservable Inputs (Level 3) | Private equity partnership interests | ||
Changes in plan assets: | ||
Balance at the beginning of the period | 0.3 | |
Actual return (loss) on plan assets: | ||
Balance at the end of the period | 0.2 | 0.3 |
Fair Value Measurements Recurring | Significant Unobservable Inputs (Level 3) | ||
Changes in plan assets: | ||
Balance at the beginning of the period | 9.6 | 8.9 |
Actual return (loss) on plan assets: | ||
Assets held at the reporting date | 1 | 0.8 |
Assets sold during the period | 0.4 | 0.3 |
Purchases, sales and settlements, net | (0.5) | (0.4) |
Balance at the end of the period | 10.5 | 9.6 |
Fair Value Measurements Recurring | Significant Unobservable Inputs (Level 3) | Real estate partnerships interests | ||
Changes in plan assets: | ||
Balance at the beginning of the period | 9.3 | 8.6 |
Actual return (loss) on plan assets: | ||
Assets held at the reporting date | 1.1 | 0.8 |
Assets sold during the period | 0.4 | 0.3 |
Purchases, sales and settlements, net | (0.5) | (0.4) |
Balance at the end of the period | 10.3 | 9.3 |
Fair Value Measurements Recurring | Significant Unobservable Inputs (Level 3) | Private equity partnership interests | ||
Changes in plan assets: | ||
Balance at the beginning of the period | 0.3 | 0.3 |
Actual return (loss) on plan assets: | ||
Assets held at the reporting date | (0.1) | |
Balance at the end of the period | $ 0.2 | $ 0.3 |
PENSION AND POST-RETIREMENT P62
PENSION AND POST-RETIREMENT PLANS - STATUS (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Qualified Pension Benefits | |||
Change in Benefit Obligation: | |||
Benefit obligation at beginning of year | $ 237.4 | $ 197.5 | |
Service cost | 3.3 | 3.3 | $ 2.9 |
Interest cost | 9.5 | 9.4 | 8.6 |
Actuarial (gain) loss | (17.9) | 38.2 | |
Benefits paid, net of subsidies received | (10.9) | (10) | |
Expenses paid | (1.2) | (1) | |
Benefit obligation at end of year | 220.2 | 237.4 | 197.5 |
Changes in plan assets: | |||
Balance at the beginning of the period | 178.9 | 172.8 | |
Actual return on plan assets | (2.6) | 10.6 | |
Employer contribution | 4.7 | 6.5 | 3.5 |
Benefits paid, net of subsidies received | (10.9) | (10) | |
Expenses paid | (1.2) | (1) | |
Balance at the end of the period | 168.9 | 178.9 | 172.8 |
Funded Status and Recognized Liability | (51.3) | (58.5) | |
Post-retirement Benefits | |||
Change in Benefit Obligation: | |||
Benefit obligation at beginning of year | 62.6 | 52.1 | |
Service cost | 1.5 | 1.1 | |
Interest cost | 2.5 | 2.6 | |
Plan participants' contributions | 0.9 | 0.7 | |
Actuarial (gain) loss | (3.1) | 9.7 | |
Benefits paid, net of subsidies received | (3.9) | (3.6) | |
Benefit obligation at end of year | 60.5 | 62.6 | $ 52.1 |
Changes in plan assets: | |||
Plan participants' contributions | 0.9 | 0.7 | |
Employer contribution | 3 | 2.9 | |
Benefits paid, net of subsidies received | (3.9) | (3.6) | |
Funded Status and Recognized Liability | $ (60.5) | $ (62.6) |
PENSION AND POST-RETIREMENT P63
PENSION AND POST-RETIREMENT PLANS - AMOUNTS INCLUDED IN FINANCIAL STATEMENTS (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Employee benefit plans | |||
Current liabilities | $ (2.5) | $ (2.5) | |
Non-current liabilities, net | (109.3) | (118.6) | |
Qualified Pension Benefits | |||
Employee benefit plans | |||
Non-current liabilities, net | (51.3) | (58.5) | |
Total | (51.3) | (58.5) | |
Net loss (net of taxes) | 50.8 | 55.5 | |
Prior service credit (net of taxes) | (9.1) | (10.6) | |
Total | 41.7 | 44.9 | |
Benefit obligation | 220.2 | 237.4 | $ 197.5 |
Fair value of plan assets at end of year | 168.9 | 178.9 | 172.8 |
Estimated net loss and prior service credit that will be amortized from accumulated other comprehensive loss into net periodic benefit cost in 2016 | 1.8 | ||
Post-retirement Benefits | |||
Employee benefit plans | |||
Current liabilities | (2.5) | (2.5) | |
Non-current liabilities, net | (58) | (60.1) | |
Total | (60.5) | (62.6) | |
Net loss (net of taxes) | 4.7 | 7.2 | |
Total | 4.7 | 7.2 | |
Benefit obligation | 60.5 | 62.6 | $ 52.1 |
Estimated net loss and prior service credit that will be amortized from accumulated other comprehensive loss into net periodic benefit cost in 2016 | $ 0.8 | ||
Amortization period of unrecognized gains and losses | 5 years | ||
Qualified Plans | |||
Employee benefit plans | |||
Benefit obligation | $ 218 | 235 | |
Accumulated benefit obligation | 217.7 | 234.6 | |
Fair value of plan assets at end of year | $ 166.2 | $ 176.1 |
PENSION AND POST-RETIREMENT P64
PENSION AND POST-RETIREMENT PLANS - COMPONENTS OF NET PERIODIC BENEFIT COST (Details) $ in Millions | 12 Months Ended | ||
Dec. 31, 2015USD ($)director | Dec. 31, 2014USD ($) | Dec. 31, 2013USD ($) | |
Components of Net Periodic Benefit Cost: | |||
Current liabilities | $ 2.5 | $ 2.5 | |
Other Changes in Plan Assets and Benefit Obligations Recognized in Other Comprehensive Income (net of tax) | |||
New prior service cost | (5.1) | 31.4 | $ (18.7) |
Amortization of unrecognized loss | (1.8) | (2.5) | (4.7) |
Amortization of prior service cost | 1.3 | 1.3 | 1.3 |
Qualified Pension Benefits | |||
Components of Net Periodic Benefit Cost: | |||
Service cost | 3.3 | 3.3 | 2.9 |
Interest cost | 9.5 | 9.4 | 8.6 |
Expected return on plan assets | (14) | (14.1) | (11.9) |
Amortization of net loss | 6.4 | 3 | 6.8 |
Amortization of prior service cost | (2.3) | (2.3) | (2.3) |
Net periodic benefit cost | 2.9 | (0.7) | 4.1 |
Other Changes in Plan Assets and Benefit Obligations Recognized in Other Comprehensive Income (net of tax) | |||
Net loss (gain) | (1) | 25.4 | (19.6) |
New prior service cost | 0.1 | ||
Amortization of unrecognized loss | (3.9) | (1.8) | (4.2) |
Amortization of prior service cost | 1.4 | 1.4 | 1.4 |
Total recognized in other comprehensive income | (3.4) | 25 | (22.4) |
Total recognized in net periodic benefit cost and other comprehensive income | $ (0.5) | $ 24.3 | $ (18.3) |
Weighted Average Assumptions: | |||
Discount rate (as a percent) | 4.50% | 4.10% | 4.90% |
Expected return plan assets (as a percent) | 8.00% | 8.25% | 8.25% |
Rate of compensation increase (as a percent) | 3.00% | 3.00% | 3.00% |
Defined Benefit Plan, Benefit Obligation, Period Increase (Decrease) | $ 17.6 | ||
Projected benefit obligation change | 17.6 | ||
Qualified Pension Plans, Non-qualified Pension Plans and Post-retirement Plans | |||
Total obligation | $ 220.2 | 237.4 | $ 197.5 |
Amounts recognized in accumulated other comprehensive income for net loss, net of tax | 50.8 | 55.5 | |
Amount recognized as prior service credit, net of tax | (9.1) | (10.6) | |
Estimated net loss and prior service credit, net of tax, that will be recognized in net periodic pension cost | 41.7 | 44.9 | |
Post-retirement Benefits | |||
Components of Net Periodic Benefit Cost: | |||
Service cost | 1.5 | 1.1 | |
Interest cost | 2.5 | 2.6 | |
Current liabilities | $ 2.5 | $ 2.5 | |
Weighted Average Assumptions: | |||
Discount rate (as a percent) | 4.60% | 4.20% | 5.00% |
Rate of compensation increase (as a percent) | 3.00% | 3.00% | 3.00% |
Initial health care cost trend rate (as a percent) | 7.10% | 7.30% | |
Initial health care cost trend rate, Pre-65 group (as a percent) | 6.80% | ||
Initial health care cost trend rate, Post-65 group (as a percent) | 7.60% | ||
Ultimate health care cost trend rate (as a percent) | 4.40% | 4.50% | 4.50% |
Defined Benefit Plan, Benefit Obligation, Period Increase (Decrease) | $ 3.9 | ||
Projected benefit obligation change | 3.9 | ||
Effect of one percentage point change in the assumed health care cost trend rates | |||
Effect of one percentage point increase on post-retirement benefit obligation | $ 9.4 | 10 | $ 7.1 |
Effect of one percentage point decrease on post-retirement benefit obligation | (7.4) | (7.8) | (5.7) |
Qualified Pension Plans, Non-qualified Pension Plans and Post-retirement Plans | |||
Total obligation | 60.5 | 62.6 | 52.1 |
Amounts recognized in accumulated other comprehensive income for net loss, net of tax | 4.7 | 7.2 | |
Estimated net loss and prior service credit, net of tax, that will be recognized in net periodic pension cost | 4.7 | 7.2 | |
Non-qualified Pension Benefits | |||
Components of Net Periodic Benefit Cost: | |||
Amortization of net loss | 0.1 | ||
Amortization of prior service cost | 0.1 | ||
Net periodic benefit cost | 0.6 | 0.6 | 0.6 |
Effect of one percentage point change in the assumed health care cost trend rates | |||
Effect of one percentage point increase on total of service and interest cost components | 0.9 | 0.7 | 0.6 |
Effect of one percentage point decrease on total of service and interest cost components | $ (0.7) | (0.5) | (0.5) |
Qualified Pension Plans, Non-qualified Pension Plans and Post-retirement Plans | |||
Number of outside directors covered under the frozen non-qualified pension plan | director | 1 | ||
Total obligation | $ 4.3 | 5.4 | |
Discount rate used to determine obligation (as a percent) | 3.40% | ||
Amounts recognized in accumulated other comprehensive income for net loss, net of tax | $ 0.8 | ||
Amount recognized as prior service credit, net of tax | 0.6 | ||
Non-qualified pension benefits and post-retirement benefits | |||
Components of Net Periodic Benefit Cost: | |||
Service cost | 1.5 | 1.1 | 1.1 |
Interest cost | 2.5 | 2.6 | 2.1 |
Amortization of net loss | 2.2 | 0.6 | 0.3 |
Net periodic benefit cost | 6.2 | 4.3 | 3.5 |
Current liabilities | 3.7 | 4.1 | |
Other Changes in Plan Assets and Benefit Obligations Recognized in Other Comprehensive Income (net of tax) | |||
Net loss (gain) | (1.9) | 5.9 | 1.2 |
Amortization of unrecognized loss | (1.3) | (0.4) | (0.2) |
Total recognized in other comprehensive income | (3.2) | 5.5 | 1 |
Total recognized in net periodic benefit cost and other comprehensive income | $ 3 | $ 9.8 | $ 4.5 |
PENSION AND POST-RETIREMENT P65
PENSION AND POST-RETIREMENT PLANS - ESTIMATED BENEFIT PAYMENTS (Details) $ in Millions | Dec. 31, 2015USD ($) |
Qualified Pension Benefits | |
Estimated future benefit payments | |
2,016 | $ 11.7 |
2,017 | 12.1 |
2,018 | 12.5 |
2,019 | 12.8 |
2,020 | 13.2 |
2021-2025 | 70.5 |
Total | 132.8 |
Non-qualified Pension Benefits | |
Estimated future benefit payments | |
2,016 | 1.2 |
2,017 | 0.3 |
2,018 | 1 |
2,019 | 0.2 |
2,020 | 0.4 |
2021-2025 | 2 |
Total | 5.1 |
Post-retirement Benefits | |
Estimated future benefit payments | |
2,016 | 2.5 |
2,017 | 2.6 |
2,018 | 2.7 |
2,019 | 2.8 |
2,020 | 2.9 |
2021-2025 | 15.9 |
Total | $ 29.4 |
PENSION AND POST-RETIREMENT P66
PENSION AND POST-RETIREMENT PLANS - DEFINED CONTRIBUTION PLANS (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
401(K) plan | |||
Defined Contribution Plans | |||
Employer matching contribution (as a percent) | 6.00% | ||
Employer matching contribution expenses | $ 2 | $ 1.6 | $ 1.6 |
Profit sharing plan | |||
Defined Contribution Plans | |||
Profit sharing expense recorded | $ 1.9 | $ 1.6 | $ 1.2 |
Profit sharing plan | Maximum | |||
Defined Contribution Plans | |||
Contribution percentage | 3.00% |
PENSION AND POST-RETIREMENT P67
PENSION AND POST-RETIREMENT PLANS - MULTI-EMPLOYER DEFINED BENEFIT PLANS (Details) - USD ($) $ in Millions | 12 Months Ended | |||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | |
Multiemployer Plans | ||||
Multiemployer Plans, Accumulated Benefit Obligation | $ 216.8 | |||
Minimum | ||||
Multiemployer Plans | ||||
Employer matching contribution to MEBA Pension Trust (as a percent) | 11.70% | |||
Multiemployer Benefit Pension Plans | ||||
Multiemployer Plans | ||||
Contributions of Matson | 17.8 | $ 13.1 | $ 13.1 | |
Multiemployer Benefit Pension Plans | Masters, Mates and Pilots Adjustable Pension Plan | ||||
Multiemployer Plans | ||||
Contributions of Matson | $ 1.7 | 1 | 0.8 | |
Multiemployer Benefit Pension Plans | Red Zone | Maximum | ||||
Multiemployer Plans | ||||
Funded status of multiemployer plan (as a percent) | 65.00% | |||
Multiemployer Benefit Pension Plans | Red Zone | M E B A Pension Trust - Defined Benefit Plan | ||||
Multiemployer Plans | ||||
Contributions of Matson | $ 3.2 | |||
Multiemployer Benefit Pension Plans | Red Zone | Alaska Teamster - Employer Pension Plan | ||||
Multiemployer Plans | ||||
Contributions of Matson | 1.5 | |||
Multiemployer Benefit Pension Plans | Red Zone | O P E I U Local 153 Pension Plan | ||||
Multiemployer Plans | ||||
Contributions of Matson | $ 0.1 | |||
Multiemployer Benefit Pension Plans | Yellow Zone | Maximum | ||||
Multiemployer Plans | ||||
Funded status of multiemployer plan (as a percent) | 80.00% | |||
Multiemployer Benefit Pension Plans | Yellow Zone | Hawaii Terminals Multiemployer Pension Plan | ||||
Multiemployer Plans | ||||
Contributions of Matson | $ 4.9 | 5.1 | 5.3 | |
Multiemployer Benefit Pension Plans | Yellow Zone | Hawaii Stevedoring Multiemployer Retirement Plan | ||||
Multiemployer Plans | ||||
Contributions of Matson | $ 2.8 | 2.9 | 2.7 | |
Multiemployer Benefit Pension Plans | Green Zone | Minimum | ||||
Multiemployer Plans | ||||
Funded status of multiemployer plan (as a percent) | 80.00% | |||
Multiemployer Benefit Pension Plans | Green Zone | Master Mates And Pilots Pension Plan | ||||
Multiemployer Plans | ||||
Contributions of Matson | $ 2.2 | 1.9 | 2.1 | |
Multiemployer Benefit Pension Plans | Green Zone | M E B A Pension Trust - Defined Benefit Plan | ||||
Multiemployer Plans | ||||
Contributions of Matson | 2.1 | 2.1 | ||
Multiemployer Benefit Pension Plans | Green Zone | O C U Trust Pension Plan | ||||
Multiemployer Plans | ||||
Contributions of Matson | 0.1 | 0.1 | 0.1 | |
Multiemployer Benefit Pension Plans | Green Zone | All Alaska Longshore Pension Plan | ||||
Multiemployer Plans | ||||
Contributions of Matson | 0.5 | |||
Multiemployer Benefit Pension Plans | Green Zone | Western Conference of Teamsters Pension Plan | ||||
Multiemployer Plans | ||||
Contributions of Matson | 0.8 | |||
Multiemployer Health and Benefit Plans | ||||
Multiemployer Plans | ||||
Contributions of Matson | 18.1 | 11.1 | 10.5 | |
Multiemployer Health and Benefit Plans | Stevedore Industry Committee Welfare Benefit Plan | ||||
Multiemployer Plans | ||||
Contributions of Matson | 3.8 | 3.1 | 2.6 | |
Multiemployer Health and Benefit Plans | O C U Health and Welfare Trust | ||||
Multiemployer Plans | ||||
Contributions of Matson | 0.2 | 0.2 | 0.2 | |
Multiemployer Health and Benefit Plans | S U P Welfare Plan, Inc. | ||||
Multiemployer Plans | ||||
Contributions of Matson | 2.9 | 2.7 | 2.7 | |
Multiemployer Health and Benefit Plans | M E B A Medical and Benefits Plan | ||||
Multiemployer Plans | ||||
Contributions of Matson | 2.2 | 1.8 | 1.7 | |
Multiemployer Health and Benefit Plans | M F O W Welfare Fund | ||||
Multiemployer Plans | ||||
Contributions of Matson | 1.3 | 1.2 | 1.2 | |
Multiemployer Health and Benefit Plans | A R A Pension and Welfare Plan | ||||
Multiemployer Plans | ||||
Contributions of Matson | 0.5 | 0.5 | 0.5 | |
Multiemployer Health and Benefit Plans | Masters, Mates and Pilots Health and Benefit Plan | ||||
Multiemployer Plans | ||||
Contributions of Matson | 2.3 | $ 1.6 | $ 1.6 | |
Multiemployer Health and Benefit Plans | Seafarers Health and Benefits Plan | ||||
Multiemployer Plans | ||||
Contributions of Matson | 1.8 | |||
Multiemployer Health and Benefit Plans | Alaska Teamster - Employer Welfare Trust | ||||
Multiemployer Plans | ||||
Contributions of Matson | 1.2 | |||
Multiemployer Health and Benefit Plans | All Alaska Longshore Health and Welfare Trust Fund | ||||
Multiemployer Plans | ||||
Contributions of Matson | 1.3 | |||
Multiemployer Health and Benefit Plans | Western Teamsters Welfare Trust | ||||
Multiemployer Plans | ||||
Contributions of Matson | $ 0.6 |
PENSION AND POST-RETIREMENT P68
PENSION AND POST-RETIREMENT PLANS - MULTI-EMPLOYER DEFINED CONTRIBUTION PLANS (Details) - Multi-employer defined contribution pension plans $ in Millions | 12 Months Ended | ||
Dec. 31, 2015USD ($)plan | Dec. 31, 2014USD ($) | Dec. 31, 2013USD ($) | |
Defined Contribution Plans | |||
Number of Multiemployer Plans | plan | 6 | ||
Employer contributions | $ | $ 3.8 | $ 3 | $ 3 |
MULTI-EMPLOYER WITHDRAWAL LIA69
MULTI-EMPLOYER WITHDRAWAL LIABILITY (Details) - USD ($) $ in Millions | 12 Months Ended | |
Dec. 31, 2015 | May. 29, 2015 | |
Multiemployer withdrawal liability | ||
Benefit payment period | 18 years | |
Estimated future benefit payments | ||
Current portion of withdrawal liability | $ (4.1) | |
Horizon | ||
Multiemployer withdrawal liability | ||
Quarterly payments to ILA-PRSSA over an estimated period | $ 1 | |
Benefit payment period | 18 years | |
Estimated future benefit payments | ||
2,016 | $ 4.1 | |
2,017 | 4.1 | |
2,018 | 4.1 | |
2,019 | 4.1 | |
2,020 | 4.1 | |
Thereafter | 52.3 | |
Total | 72.8 | $ 73.9 |
Less: amount representing interest | (12.5) | |
Present value of remaining withdrawal liability | 60.3 | |
Current portion of withdrawal liability | (4.1) | |
Long-term portion of withdrawal liability | $ 56.2 |
SHARE-BASED AWARDS - SUMMARY (D
SHARE-BASED AWARDS - SUMMARY (Details) $ / shares in Units, $ in Thousands | Jan. 28, 2010shares | Mar. 31, 2015$ / sharesshares | Mar. 31, 2014 | Mar. 31, 2013 | Dec. 31, 2015USD ($)plan$ / sharesshares | Dec. 31, 2014$ / sharesshares |
Stock options | ||||||
Activity in the entity's stock option plans | ||||||
Outstanding, beginning of period (in shares) | 852,000 | 852,000 | ||||
Exercised (in shares) | (386,000) | |||||
Forfeited and expired (in shares) | (5,000) | |||||
Outstanding, end of period (in shares) | 461,000 | 852,000 | ||||
Exercisable (in shares) | 461,000 | |||||
Weighted average exercise price | ||||||
Outstanding, weighted average exercise price, beginning of period (in dollars per share) | $ / shares | $ 21.24 | $ 21.24 | ||||
Exercised, weighted average exercise price (in dollars per share) | $ / shares | 20.44 | |||||
Forfeited and expired, weighted average exercise price (in dollars per share) | $ / shares | 22.80 | |||||
Outstanding, weighted average exercise price, end of period (in dollars per share) | $ / shares | 21.90 | $ 21.24 | ||||
Exercisable, weighted average exercise price (in dollars per share) | $ / shares | $ 21.90 | |||||
Outstanding, weighted average contractual life | 3 years 9 months 18 days | |||||
Exercisable, weighted average contractual life | 3 years 9 months 18 days | |||||
Outstanding, aggregate intrinsic value (in dollars) | $ | $ 9,555 | |||||
Exercisable, aggregate intrinsic value (in dollars) | $ | $ 9,555 | |||||
Restricted Stock Units | Automatic Grant Program | Minimum | ||||||
Share-based compensation | ||||||
Vesting period of awards granted | 1 year | |||||
2007 Plan | ||||||
Share-based compensation | ||||||
Common stock initially available for future issuance (in shares) | 2,200,000 | |||||
Additional shares authorized for issuance | 2,200,000 | |||||
Number of separate incentive compensation programs | plan | 4 | |||||
Number of share based compensation plans within the entity's incentive compensation programs | plan | 3 | |||||
2007 Plan | Discretionary Grant Program | ||||||
Share-based compensation | ||||||
Minimum exercise price as a percentage of fair market value of common stock | 100.00% | |||||
Exercisable period | 3 years | |||||
Expiration Term | 10 years | |||||
2007 Plan | Stock Issuance Program | Performance Vesting | ||||||
Share-based compensation | ||||||
Average ROIC, period for measurement | 3 years | 3 years | 3 years | |||
TSR modifier, period for measurement | 3 years | |||||
Weighted percentage of the entities comprising each index considered for calculation of total shareholder return | 50.00% | |||||
Continuous service period for vesting of shares issuable on the basis of the performance-vesting criteria | 3 years | |||||
2007 Plan | Stock options | ||||||
Activity in the entity's stock option plans | ||||||
Outstanding, beginning of period (in shares) | 657,000 | 657,000 | ||||
Exercised (in shares) | (254,000) | |||||
Outstanding, end of period (in shares) | 403,000 | 657,000 | ||||
Exercisable (in shares) | 403,000 | |||||
2007 Plan | Time-Based Restricted Stock Units | Stock Issuance Program | ||||||
Share-based compensation | ||||||
Vesting period of awards granted | 3 years | |||||
2007 Plan | Performance-Based Restricted Stock Units | Stock Issuance Program | ||||||
Share-based compensation | ||||||
Vesting period of awards granted | 3 years | |||||
2007 Plan | Restricted Stock Units | ||||||
Share-based compensation | ||||||
Common stock initially available for future issuance (in shares) | 8,700,000 | |||||
Common stock available for future issuance (in shares) | 5,800,000 | |||||
Number of shares to be issued upon exercise of outstanding options, warrants and rights | 500,000 | |||||
Options granted, weighted average grant-date fair value (in dollars per share) | $ / shares | $ 37.19 | |||||
2007 Plan | Restricted Stock Units | Automatic Grant Program | Maximum | ||||||
Share-based compensation | ||||||
Vesting period of awards granted | 3 years | |||||
1998 Plan | Stock options | ||||||
Activity in the entity's stock option plans | ||||||
Outstanding, beginning of period (in shares) | 132,000 | 132,000 | ||||
Exercised (in shares) | (85,000) | |||||
Forfeited and expired (in shares) | (5,000) | |||||
Outstanding, end of period (in shares) | 42,000 | 132,000 | ||||
Exercisable (in shares) | 42,000 | |||||
Predecessor Plans 1998 Plan | Stock options | ||||||
Share-based compensation | ||||||
Vesting period of awards granted | 3 years | |||||
Expiration Term | 10 years | |||||
Period of time within for an option to be exercised for eligibility for reload feature and new stock option grant | 5 years | |||||
Ratio to convert original option price under reload feature | 1.5 | |||||
Activity in the entity's stock option plans | ||||||
Granted (in shares) | 0 | |||||
Predecessor Plans 1998 Plan | Time-Based Restricted Stock Units | ||||||
Share-based compensation | ||||||
Vesting period of awards granted | 3 years | |||||
Predecessor Plans 1998 Plan | Performance-Based Restricted Stock Units | ||||||
Share-based compensation | ||||||
Vesting period of awards granted | 1 year | |||||
Predecessor Plan 1998 Directors' Plan | Stock options | ||||||
Share-based compensation | ||||||
Number of shares that can be purchased with the annual option | 8,000 | |||||
Exercisable period | 3 years | |||||
Activity in the entity's stock option plans | ||||||
Outstanding, beginning of period (in shares) | 63,000 | 63,000 | ||||
Exercised (in shares) | (47,000) | |||||
Outstanding, end of period (in shares) | 16,000 | 63,000 | ||||
Exercisable (in shares) | 16,000 |
SHARE-BASED AWARDS - RESTRICTED
SHARE-BASED AWARDS - RESTRICTED STOCK UNIT ACTIVITY (Details) - 2007 Plan - Restricted Stock Units shares in Thousands | 12 Months Ended |
Dec. 31, 2015$ / sharesshares | |
Non-vested restricted stock unit activity | |
Outstanding, beginning of period (in shares) | shares | 678 |
Granted (in shares) | shares | 250 |
Vested (in shares) | shares | (232) |
Cancelled (in shares) | shares | (18) |
Outstanding, end of period (in shares) | shares | 678 |
Weighted Average Grant-Date Fair Value | |
Outstanding, weighted average grant-date fair value, beginning of period (in dollars per share) | $ / shares | $ 24.78 |
Granted, weighted average grant-date fair value (in dollars per share) | $ / shares | 37.19 |
Exercised, weighted average grant-date fair value (in dollars per share) | $ / shares | 24.99 |
Cancelled, weighted average grant-date fair value (in dollars per shares) | $ / shares | 27.46 |
Outstanding, weighted average grant-date fair value, end of period (in dollars per shares) | $ / shares | $ 29.21 |
SHARE-BASED AWARDS - EXPENSE (D
SHARE-BASED AWARDS - EXPENSE (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Share-based expense (net of estimated forfeitures) | |||
Total share-based expense | $ 12.2 | $ 8.7 | $ 5.9 |
Total recognized tax benefit | (4.8) | (3.4) | (2.2) |
Total Share-based expense (net of tax) | 7.4 | 5.3 | 3.7 |
Cash received by Matson upon option exercise | 2.2 | 5.8 | 1.7 |
Intrinsic value of options exercised | 9.2 | 3.4 | 1.1 |
Tax benefit realized upon option exercise | 3.4 | 1.9 | 1.7 |
Fair value of stock vested | 8.6 | 5 | 4.4 |
Non-vested stock and restricted stock units | |||
Share-based expense (net of estimated forfeitures) | |||
Total share-based expense | 12.2 | 8.4 | 5.5 |
Non-vested restricted stock units and performance-based equity awards | |||
Share-based expense (net of estimated forfeitures) | |||
Unrecognized compensation cost | $ 8.9 | ||
Unrecognized compensation cost, weighted average period for recognition | 1 year 8 months 12 days | ||
Stock options | |||
Share-based expense (net of estimated forfeitures) | |||
Total share-based expense | 0.3 | $ 0.4 | |
Total recognized tax benefit | $ (2.6) | $ (0.8) | |
Unrecognized compensation cost | $ 0 |
COMMITMENTS AND CONTINGENCIES73
COMMITMENTS AND CONTINGENCIES (Details) $ in Millions | Dec. 31, 2015USD ($) | Dec. 31, 2013item |
Commitments, Guarantees and Contingencies | ||
Standby letters of credit | $ 11 | |
Commitments and financial arrangements, Bonds | 32.8 | |
Capital expenditure obligations | 408.9 | |
Number of new vessels to be constructed | item | 2 | |
Benefit plan withdrawal obligations | ||
Commitments, Guarantees and Contingencies | ||
Multiemployer Plan Withdrawal Obligation | $ 216.8 |
REPORTABLE SEGMENTS (Details)
REPORTABLE SEGMENTS (Details) $ in Millions | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2015USD ($) | Sep. 30, 2015USD ($) | Jun. 30, 2015USD ($) | Mar. 31, 2015USD ($) | Dec. 31, 2014USD ($) | Sep. 30, 2014USD ($) | Jun. 30, 2014USD ($) | Mar. 31, 2014USD ($) | Dec. 31, 2015USD ($)segment | Dec. 31, 2014USD ($) | Dec. 31, 2013USD ($) | |
Segment results | |||||||||||
Number of reportable segments | segment | 2 | ||||||||||
Revenue | $ 494.8 | $ 544.3 | $ 447.6 | $ 398.2 | $ 443.5 | $ 441.8 | $ 436.4 | $ 392.5 | $ 1,884.9 | $ 1,714.2 | $ 1,637.2 |
Operating Income | 45.9 | 71.8 | 33.7 | 44.9 | 49.4 | 45 | 35.7 | 9.9 | 196.3 | 140 | 100.3 |
Interest expense, net | (4.9) | (4.7) | (4.6) | (4.3) | (4.3) | (4.4) | (4.5) | (4.1) | (18.5) | (17.3) | (14.4) |
Income before Income Taxes | 41 | 67.1 | 29.1 | 40.6 | 45.1 | 40.6 | 31.2 | 5.8 | 177.8 | 122.7 | 85.9 |
Income tax expense | (14.4) | (25.6) | (19.2) | (15.6) | (17.3) | (19.1) | (13.1) | (2.4) | (74.8) | (51.9) | (32.2) |
Net Income | 26.6 | 41.5 | 9.9 | 25 | 27.8 | 21.5 | 18.1 | 3.4 | 103 | 70.8 | 53.7 |
Assets | 1,669.8 | 1,401.8 | 1,669.8 | 1,401.8 | 1,248.3 | ||||||
Capital Expenditures | 67.8 | 27.9 | 35.2 | ||||||||
Depreciation and Amortization | 83.4 | 69.7 | 69.7 | ||||||||
Ocean Transportation | |||||||||||
Segment results | |||||||||||
Revenue | 401 | 444.8 | 346.7 | 305.5 | 333.2 | 329.5 | 321.1 | 294.6 | 1,498 | 1,278.4 | 1,229.4 |
Operating Income | 43.6 | 68.9 | 31.4 | 43.9 | 46.3 | 42.6 | 32.8 | 9.4 | 187.8 | 131.1 | 94.3 |
Assets | 1,601 | 1,313.9 | 1,601 | 1,313.9 | 1,168.6 | ||||||
Capital Expenditures | 67.5 | 27.8 | 33.8 | ||||||||
Depreciation and Amortization | 81.4 | 66.6 | 66.4 | ||||||||
Ocean Transportation | SSAT | |||||||||||
Segment results | |||||||||||
Equity in earnings from affiliates | 16.5 | 6.6 | 16.5 | 6.6 | (2) | ||||||
Equity method investments | 66.4 | 64.4 | 66.4 | 64.4 | 57.6 | ||||||
Logistics | |||||||||||
Segment results | |||||||||||
Revenue | 93.8 | 99.5 | 100.9 | 92.7 | 110.3 | 112.3 | 115.3 | 97.9 | 386.9 | 435.8 | 407.8 |
Operating Income | 2.3 | $ 2.9 | $ 2.3 | $ 1 | 3.1 | $ 2.4 | $ 2.9 | $ 0.5 | 8.5 | 8.9 | 6 |
Assets | $ 68.8 | $ 87.9 | 68.8 | 87.9 | 79.7 | ||||||
Capital Expenditures | 0.3 | 0.1 | 1.4 | ||||||||
Depreciation and Amortization | $ 2 | $ 3.1 | $ 3.3 |
QUARTERLY INFORMATION (Unaudi75
QUARTERLY INFORMATION (Unaudited) (Details) - USD ($) $ / shares in Units, $ in Millions | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2015 | Sep. 30, 2015 | Jun. 30, 2015 | Mar. 31, 2015 | Dec. 31, 2014 | Sep. 30, 2014 | Jun. 30, 2014 | Mar. 31, 2014 | Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Quarterly information by segments | |||||||||||
Operating Revenue | $ 494.8 | $ 544.3 | $ 447.6 | $ 398.2 | $ 443.5 | $ 441.8 | $ 436.4 | $ 392.5 | $ 1,884.9 | $ 1,714.2 | $ 1,637.2 |
Operating Income | 45.9 | 71.8 | 33.7 | 44.9 | 49.4 | 45 | 35.7 | 9.9 | 196.3 | 140 | 100.3 |
Interest expense | (4.9) | (4.7) | (4.6) | (4.3) | (4.3) | (4.4) | (4.5) | (4.1) | (18.5) | (17.3) | (14.4) |
Income before Income Taxes | 41 | 67.1 | 29.1 | 40.6 | 45.1 | 40.6 | 31.2 | 5.8 | 177.8 | 122.7 | 85.9 |
Income tax expense | (14.4) | (25.6) | (19.2) | (15.6) | (17.3) | (19.1) | (13.1) | (2.4) | (74.8) | (51.9) | (32.2) |
Net Income | $ 26.6 | $ 41.5 | $ 9.9 | $ 25 | $ 27.8 | $ 21.5 | $ 18.1 | $ 3.4 | $ 103 | $ 70.8 | $ 53.7 |
Net Income, Earnings Per Share: | |||||||||||
Basic Earnings Per Share (in dollars per share) | $ 0.61 | $ 0.95 | $ 0.23 | $ 0.58 | $ 0.65 | $ 0.50 | $ 0.42 | $ 0.08 | $ 2.37 | $ 1.65 | $ 1.26 |
Diluted Earnings Per Share (in dollars per share) | $ 0.60 | $ 0.94 | $ 0.23 | $ 0.57 | $ 0.63 | $ 0.50 | $ 0.42 | $ 0.08 | $ 2.34 | $ 1.63 | $ 1.25 |
Horizon | Selling, general and administrative costs | |||||||||||
Quarterly information by segments | |||||||||||
Acquisition Related Selling, General and Administrative Costs | $ (19) | ||||||||||
Ocean Transportation | |||||||||||
Quarterly information by segments | |||||||||||
Operating Revenue | $ 401 | $ 444.8 | $ 346.7 | $ 305.5 | $ 333.2 | $ 329.5 | $ 321.1 | $ 294.6 | 1,498 | $ 1,278.4 | $ 1,229.4 |
Operating Income | 43.6 | 68.9 | 31.4 | 43.9 | 46.3 | 42.6 | 32.8 | 9.4 | 187.8 | 131.1 | 94.3 |
Ocean Transportation | Selling, general and administrative costs | |||||||||||
Quarterly information by segments | |||||||||||
Molasses Settlement | (1.9) | (11.4) | (1) | ||||||||
Ocean Transportation | Horizon | Selling, general and administrative costs | |||||||||||
Quarterly information by segments | |||||||||||
Acquisition Related Selling, General and Administrative Costs | (1.5) | (5.1) | (12.4) | ||||||||
Logistics | |||||||||||
Quarterly information by segments | |||||||||||
Operating Revenue | 93.8 | 99.5 | 100.9 | 92.7 | 110.3 | 112.3 | 115.3 | 97.9 | 386.9 | 435.8 | 407.8 |
Operating Income | $ 2.3 | $ 2.9 | $ 2.3 | $ 1 | $ 3.1 | $ 2.4 | $ 2.9 | $ 0.5 | $ 8.5 | $ 8.9 | $ 6 |