Document and Entity Information
Document and Entity Information | 6 Months Ended |
Jun. 30, 2020shares | |
Cover [Abstract] | |
Document Type | 10-Q |
Document Quarterly Report | true |
Document Transition Report | false |
Document Period End Date | Jun. 30, 2020 |
Entity File Number | 001-34187 |
Entity Registrant Name | Matson, Inc. |
Entity Incorporation, State or Country Code | HI |
Entity Tax Identification Number | 99-0032630 |
Entity Address, Address Line One | 1411 Sand Island Parkway |
Entity Address, City or Town | Honolulu |
Entity Address, State or Province | HI |
Entity Address, Postal Zip Code | 96819 |
City Area Code | 808 |
Local Phone Number | 848-1211 |
Title of 12(b) Security | Common Stock, without par value |
Trading Symbol | MATX |
Security Exchange Name | NYSE |
Entity Current Reporting Status | Yes |
Entity Interactive Data Current | Yes |
Entity Filer Category | Large Accelerated Filer |
Entity Small Business | false |
Entity Emerging Growth Company | false |
Entity Shell Company | false |
Entity Common Stock, Shares Outstanding | 43,075,643 |
Current Fiscal Year End Date | --12-31 |
Document Fiscal Year Focus | 2020 |
Document Fiscal Period Focus | Q2 |
Entity Central Index Key | 0000003453 |
Amendment Flag | false |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Income and Comprehensive Income - USD ($) shares in Millions, $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2020 | Jun. 30, 2019 | Jun. 30, 2020 | Jun. 30, 2019 | |
Operating Revenue: | ||||
Total Operating Revenue | $ 524.1 | $ 557.9 | $ 1,038 | $ 1,090.3 |
Costs and Expenses: | ||||
Operating costs | (426.3) | (472.8) | (874.6) | (939.9) |
Income from SSAT | 3.7 | 0.9 | 7.7 | 9.4 |
Selling, general and administrative | (50.3) | (55) | (106.9) | (111.3) |
Total Costs and Expenses | (472.9) | (526.9) | (973.8) | (1,041.8) |
Operating Income | 51.2 | 31 | 64.2 | 48.5 |
Interest expense | (8.2) | (6.1) | (16.8) | (10.7) |
Other income (expense), net | 1.5 | 0.8 | 2.1 | 1.4 |
Income before Income Taxes | 44.5 | 25.7 | 49.5 | 39.2 |
Income taxes | (11.7) | (7.3) | (12.9) | (8.3) |
Net Income | 32.8 | 18.4 | 36.6 | 30.9 |
Other Comprehensive Income (Loss), Net of Income Taxes: | ||||
Net Income | 32.8 | 18.4 | 36.6 | 30.9 |
Other Comprehensive Income (Loss): | ||||
Amortization of prior service cost | (1.1) | (1.2) | (2.3) | (2.3) |
Amortization of net loss | 1.3 | 0.9 | 2.6 | 1.8 |
Other adjustments | (0.1) | (0.2) | (0.8) | (0.2) |
Total Other Comprehensive Income (Loss) | 0.1 | (0.5) | (0.5) | (0.7) |
Comprehensive Income | $ 32.9 | $ 17.9 | $ 36.1 | $ 30.2 |
Basic Earnings Per-Share: (in dollars per share) | $ 0.76 | $ 0.43 | $ 0.85 | $ 0.72 |
Diluted Earnings Per-Share: (in dollars per share) | $ 0.76 | $ 0.43 | $ 0.85 | $ 0.72 |
Weighted Average Number of Shares Outstanding: | ||||
Basic (in shares) | 43.1 | 42.8 | 43 | 42.8 |
Diluted (in shares) | 43.3 | 43.2 | 43.3 | 43.2 |
Ocean Transportation | ||||
Operating Revenue: | ||||
Total Operating Revenue | $ 410.8 | $ 415.4 | $ 811.7 | $ 813.3 |
Logistics | ||||
Operating Revenue: | ||||
Total Operating Revenue | $ 113.3 | $ 142.5 | $ 226.3 | $ 277 |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets - USD ($) $ in Millions | Jun. 30, 2020 | Dec. 31, 2019 |
Current Assets: | ||
Cash and cash equivalents | $ 19.5 | $ 21.2 |
Accounts receivable, net of allowance for credit loss of $5.9 million and $4.3 million, respectively | 215.2 | 205.9 |
Prepaid expenses and other assets | 38.9 | 62.5 |
Total current assets | 273.6 | 289.6 |
Long-term Assets: | ||
Investment in SSAT | 77.5 | 76.2 |
Property and equipment, net | 1,578.4 | 1,598.1 |
Operating lease right of use assets | 241.9 | 256.1 |
Goodwill | 327.8 | 327.8 |
Intangible assets, net | 197.5 | 202.9 |
Deferred dry-docking costs, net | 52 | 56.9 |
Other long-term assets | 28.9 | 37.8 |
Total long-term assets | 2,504 | 2,555.8 |
Total Assets | 2,777.6 | 2,845.4 |
Current Liabilities: | ||
Current portion of debt | 50.5 | 48.4 |
Accounts payable and accruals | 247.4 | 235.7 |
Operating lease liabilities | 63.5 | 66.6 |
Other liabilities | 88.2 | 86 |
Total current liabilities | 449.6 | 436.7 |
Long-term Liabilities: | ||
Long-term debt, net of deferred loan fees | 823.5 | 910 |
Long-term operating lease liabilities | 186.5 | 198 |
Deferred income taxes | 348.8 | 337.6 |
Other long-term liabilities | 153.7 | 157.4 |
Total long-term liabilities | 1,512.5 | 1,603 |
Commitments and Contingencies | ||
Shareholders' Equity: | ||
Common stock | 32.3 | 32.2 |
Additional paid in capital | 306.7 | 306.2 |
Accumulated other comprehensive loss, net | (37.4) | (36.9) |
Retained earnings | 513.9 | 504.2 |
Total shareholders' equity | 815.5 | 805.7 |
Total liabilities and shareholders' equity | $ 2,777.6 | $ 2,845.4 |
Condensed Consolidated Balanc_2
Condensed Consolidated Balance Sheets (Parenthetical) - USD ($) $ in Millions | Jun. 30, 2020 | Dec. 31, 2019 |
Condensed Consolidated Balance Sheets | ||
Accounts receivable, allowance for credit loss | $ 5.9 | $ 4.3 |
Condensed Consolidated Statem_2
Condensed Consolidated Statements of Cash Flows - USD ($) $ in Millions | 6 Months Ended | |
Jun. 30, 2020 | Jun. 30, 2019 | |
Cash Flows From Operating Activities: | ||
Net income | $ 36.6 | $ 30.9 |
Reconciling adjustments: | ||
Depreciation and amortization | 55.6 | 47.5 |
Amortization of operating lease right of use assets | 35.6 | 33.5 |
Deferred income taxes | 11.4 | 9.9 |
Share-based compensation expense | 6.1 | 6.2 |
Income from SSAT | (7.7) | (9.4) |
Distribution from SSAT | 7.8 | 9.5 |
Other | 0.5 | (1.6) |
Changes in assets and liabilities: | ||
Accounts receivable, net | (9.3) | 10.8 |
Deferred dry-docking payments | (7.6) | (6.9) |
Deferred dry-docking amortization | 11.8 | 17.2 |
Prepaid expenses and other assets | 25.2 | 25.5 |
Accounts payable, accruals and other liabilities | 14 | (29.6) |
Operating lease liabilities | (36) | (33.3) |
Other long-term liabilities | (3.4) | (2) |
Net cash provided by operating activities | 140.6 | 108.2 |
Cash Flows From Investing Activities: | ||
Capitalized vessel construction expenditures | (16.5) | (30.6) |
Other capital expenditures | (34) | (38.4) |
Proceeds from disposal of property and equipment | 15.4 | 2.2 |
Cash deposits into Capital Construction Fund | (97.1) | (26.4) |
Withdrawals from Capital Construction Fund | 97.1 | 26.4 |
Net cash used in investing activities | (35.1) | (66.8) |
Cash Flows From Financing Activities: | ||
Proceeds from issuance of debt | 325.5 | |
Repayments of debt | (192.8) | (11.8) |
Proceeds from revolving credit facility | 411.5 | 212.8 |
Repayments of revolving credit facility | (612.6) | (212.8) |
Payment of financing costs | (18.5) | |
Proceeds from issuance of capital stock | 0.1 | |
Dividends paid | (19.1) | (18.2) |
Tax withholding related to net share settlements of restricted stock units | (5.5) | (3.2) |
Net cash used in financing activities | (111.4) | (33.2) |
Net (Decrease) Increase in Cash, Cash Equivalents and Restricted Cash | (5.9) | 8.2 |
Cash, Cash Equivalents and Restricted Cash, Beginning of the Period | 28.4 | 24.5 |
Cash, Cash Equivalents and Restricted Cash, End of the Period | 22.5 | 32.7 |
Reconciliation of Cash, Cash Equivalents and Restricted Cash, End of the Period: | ||
Cash and Cash Equivalents | 19.5 | 24 |
Restricted Cash | 3 | 8.7 |
Cash, Cash Equivalents and Restricted Cash, End of the Period | 22.5 | 32.7 |
Supplemental Cash Flow Information: | ||
Interest paid, net of capitalized interest | 17.9 | 7.8 |
Income tax (refunds) payments, net | (21) | (26.2) |
Non-cash Information: | ||
Capital expenditures included in accounts payable, accruals and other liabilities | 4.6 | 3.7 |
Accrued dividends | $ 10 | $ 9.4 |
Condensed Consolidated Statem_3
Condensed Consolidated Statements 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 the beginning of the period at Dec. 31, 2018 | $ 32 | $ 297.8 | $ (34.5) | $ 460 | $ 755.3 |
Balance (in shares) at Dec. 31, 2018 | 42.7 | ||||
Increase (Decrease) in Stockholders' Equity | |||||
Net income | 12.5 | 12.5 | |||
Adoption of new lease accounting standard | 4.4 | 4.4 | |||
Other comprehensive income (loss), net of tax | (0.2) | (0.2) | |||
Share-based compensation | 3.2 | 3.2 | |||
Shares issued, net of shares withheld for employee taxes | $ 0.1 | (3.2) | (3.1) | ||
Shares issued, net of shares withheld for employee taxes (in shares) | 0.1 | ||||
Dividends | (9.1) | (9.1) | |||
Balance at the end of the period at Mar. 31, 2019 | $ 32.1 | 297.8 | (34.7) | 467.8 | 763 |
Balance (in shares) at Mar. 31, 2019 | 42.8 | ||||
Balance at the beginning of the period at Dec. 31, 2018 | $ 32 | 297.8 | (34.5) | 460 | 755.3 |
Balance (in shares) at Dec. 31, 2018 | 42.7 | ||||
Increase (Decrease) in Stockholders' Equity | |||||
Net income | 30.9 | ||||
Other comprehensive income (loss), net of tax | (0.7) | ||||
Balance at the end of the period at Jun. 30, 2019 | $ 32.1 | 300.7 | (35.2) | 467.6 | 765.2 |
Balance (in shares) at Jun. 30, 2019 | 42.9 | ||||
Balance at the beginning of the period at Mar. 31, 2019 | $ 32.1 | 297.8 | (34.7) | 467.8 | 763 |
Balance (in shares) at Mar. 31, 2019 | 42.8 | ||||
Increase (Decrease) in Stockholders' Equity | |||||
Net income | 18.4 | 18.4 | |||
Other comprehensive income (loss), net of tax | (0.5) | (0.5) | |||
Share-based compensation | 3 | 3 | |||
Shares issued, net of shares withheld for employee taxes | (0.1) | (0.1) | |||
Shares issued, net of shares withheld for employee taxes (in shares) | 0.1 | ||||
Dividends | (18.6) | (18.6) | |||
Balance at the end of the period at Jun. 30, 2019 | $ 32.1 | 300.7 | (35.2) | 467.6 | 765.2 |
Balance (in shares) at Jun. 30, 2019 | 42.9 | ||||
Balance at the beginning of the period at Dec. 31, 2019 | $ 32.2 | 306.2 | (36.9) | 504.2 | 805.7 |
Balance (in shares) at Dec. 31, 2019 | 42.9 | ||||
Increase (Decrease) in Stockholders' Equity | |||||
Net income | 3.8 | 3.8 | |||
Other comprehensive income (loss), net of tax | (0.6) | (0.6) | |||
Share-based compensation | 3.1 | 3.1 | |||
Shares issued, net of shares withheld for employee taxes | $ 0.1 | (4.6) | (4.5) | ||
Shares issued, net of shares withheld for employee taxes (in shares) | 0.1 | ||||
Equity interest in SSAT | 2.2 | 2.2 | |||
Dividends | (9.5) | (9.5) | |||
Balance at the end of the period at Mar. 31, 2020 | $ 32.3 | 304.7 | (37.5) | 500.7 | 800.2 |
Balance (in shares) at Mar. 31, 2020 | 43 | ||||
Balance at the beginning of the period at Dec. 31, 2019 | $ 32.2 | 306.2 | (36.9) | 504.2 | 805.7 |
Balance (in shares) at Dec. 31, 2019 | 42.9 | ||||
Increase (Decrease) in Stockholders' Equity | |||||
Net income | 36.6 | ||||
Other comprehensive income (loss), net of tax | (0.5) | ||||
Balance at the end of the period at Jun. 30, 2020 | $ 32.3 | 306.7 | (37.4) | 513.9 | 815.5 |
Balance (in shares) at Jun. 30, 2020 | 43.1 | ||||
Balance at the beginning of the period at Mar. 31, 2020 | $ 32.3 | 304.7 | (37.5) | 500.7 | 800.2 |
Balance (in shares) at Mar. 31, 2020 | 43 | ||||
Increase (Decrease) in Stockholders' Equity | |||||
Net income | 32.8 | 32.8 | |||
Other comprehensive income (loss), net of tax | 0.1 | 0.1 | |||
Share-based compensation | 3 | 3 | |||
Shares issued, net of shares withheld for employee taxes | (1) | (1) | |||
Shares issued, net of shares withheld for employee taxes (in shares) | 0.1 | ||||
Dividends | (19.6) | (19.6) | |||
Balance at the end of the period at Jun. 30, 2020 | $ 32.3 | $ 306.7 | $ (37.4) | $ 513.9 | $ 815.5 |
Balance (in shares) at Jun. 30, 2020 | 43.1 |
Condensed Consolidated Statem_4
Condensed Consolidated Statements of Stockholders' Equity (Parenthetical) - $ / shares | Jun. 04, 2020 | Jun. 30, 2020 | Mar. 31, 2020 | Jun. 30, 2019 | Mar. 31, 2019 |
Condensed Consolidated Statement of Stockholders' Equity | |||||
Dividends (per share) | $ 0.22 | $ 0.23 | $ 0.22 | $ 0.22 | $ 0.21 |
DESCRIPTION OF THE BUSINESS
DESCRIPTION OF THE BUSINESS | 6 Months Ended |
Jun. 30, 2020 | |
DESCRIPTION OF THE BUSINESS | |
DESCRIPTION OF THE BUSINESS | 1. DESCRIPTION OF THE BUSINESS Matson, Inc., a holding company incorporated 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 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 provides a vital lifeline of ocean freight transportation services to the domestic non-contiguous economies of Hawaii, Alaska and Guam, and to other island economies in Micronesia. MatNav also operates a premium, expedited service from China to Long Beach, California, and also provides services to Okinawa, Japan and various islands in the South Pacific. In addition, subsidiaries of MatNav provide container stevedoring, refrigerated cargo services, inland transportation and other terminal services for MatNav and other ocean carriers on the Hawaiian islands of Oahu, Hawaii, Maui and Kauai, and in the Alaska locations of Anchorage, Kodiak and Dutch Harbor. Matson has a 35 percent ownership interest in SSA Terminals, LLC, a joint venture between Matson Ventures, Inc., a wholly-owned subsidiary of MatNav, and SSA Ventures, Inc., a subsidiary of Carrix, Inc. (“SSAT”). SSAT provides terminal and stevedoring services to various carriers at facilities dedicated for MatNav’s use. Matson records its share of income from SSAT in Costs and Expenses in the Condensed Consolidated Statements of Income and Comprehensive Income, and within the Ocean Transportation segment due to the nature of SSAT’s operations. Logistics: Matson’s Logistics business is conducted through Matson Logistics, Inc. (“Matson Logistics”), a wholly-owned subsidiary of MatNav. Established in 1987, Matson Logistics is an asset-light business that provides a variety of logistics services to its customers including: (i) multimodal transportation brokerage of domestic and international rail intermodal services, long-haul and regional highway trucking services, specialized hauling, flat-bed and project services, less-than-truckload services, and expedited freight services (collectively, “Transportation Brokerage” services); (ii) less-than-container load (“LCL”) consolidation and freight forwarding services (collectively, “Freight Forwarding” services); (iii) warehousing and distribution services; and (iv) supply chain management, non-vessel operating common carrier (“NVOCC”) freight forwarding and other services. |
SIGNIFICANT ACCOUNTING POLICIES
SIGNIFICANT ACCOUNTING POLICIES | 6 Months Ended |
Jun. 30, 2020 | |
SIGNIFICANT ACCOUNTING POLICIES | |
SIGNIFICANT ACCOUNTING POLICIES | 2. SIGNIFICANT ACCOUNTING POLICIES Basis of Presentation: The Condensed Consolidated Financial Statements are unaudited, and include the accounts of Matson, Inc. and all wholly-owned subsidiaries, after elimination of intercompany amounts and transactions. 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. The Company accounts for its investment in SSAT using the equity method of accounting. Due to the nature of the Company’s operations, the results for interim periods are not necessarily indicative of results to be expected for the year. These Condensed Consolidated Financial Statements reflect all normal recurring adjustments that are, in the opinion of management, necessary for fair presentation of the results of the interim periods, and do not include all of the information and footnotes required by U.S. generally accepted accounting principles for complete consolidated financial statements. The Condensed Consolidated Financial Statements should be read in conjunction with the Consolidated Financial Statements and notes thereto included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2019, filed with the Securities and Exchange Commission (“SEC”) on February 28, 2020. Fiscal Period: The period end for Matson covered by this report is June 30, 2020. The period end for MatNav and its subsidiaries covered by this report occurred on the last Friday in June, or June 26, 2020. Significant Accounting Policies: The Company’s significant accounting policies are described in Note 2 to the Consolidated Financial Statements included in Part II, Item 8 of the Company’s Annual Report on Form 10-K for the year ended December 31, 2019. Use of Estimates: The preparation of the interim condensed 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; impairment of long-lived assets, intangible assets and goodwill; capitalized interest; allowance for doubtful accounts; legal contingencies; uninsured risks and related liabilities; accrual estimates; pension and post-retirement estimates; multi-employer withdrawal liabilities; operating lease assets and liabilities; and income taxes. Future results could be materially affected if actual results differ from these estimates and assumptions. Allowance for Doubtful Accounts Receivable: Allowance for doubtful accounts receivable is established by management based on estimates of collectability. Estimates of collectability are principally based on an evaluation of the current financial condition of the customer and the potential risks to collection, the customers’ payment history, expected future credit losses and other factors which are regularly monitored by the Company. Recognition of Revenues and Related Expenses: Revenue in the Company’s Condensed Consolidated Financial Statements is presented net of elimination of intercompany transactions. The following is a description of the Company’s principal revenue generating activities by segment, and the Company’s revenue recognition policy for each activity for the periods presented: Three Months Ended Six Months Ended June 30, June 30, Ocean Transportation (in millions) (1) 2020 2019 2020 2019 Ocean Transportation services $ 402.6 $ 406.6 $ 793.7 $ 794.5 Terminal and other related services 4.6 4.8 10.4 11.5 Fuel sales 2.1 2.6 4.7 4.6 Vessel management and related services 1.5 1.4 2.9 2.7 Total $ 410.8 $ 415.4 $ 811.7 $ 813.3 (1) Ocean Transportation revenue transactions are primarily denominated in U.S. dollars except for less than 3 percent of Ocean Transportation revenues and fuel sales revenue categories which are denominated in foreign currencies. ◾ Ocean Transportation services revenue is recognized ratably over the duration of a voyage based on the relative transit time completed in each reporting period. Vessel operating costs and other ocean transportation operating costs, such as terminal operating overhead and general and administrative expenses, are charged to operating costs as incurred. ◾ Terminal and other related services revenue is recognized as the services are performed. Related costs are recognized as incurred. ◾ Fuel sales revenue and related costs are recognized when the Company has completed delivery of the product to the customer in accordance with the terms and conditions of the contract. ◾ Vessel management and related services revenue is recognized in proportion to the services completed. Related costs are recognized as incurred. Three Months Ended Six Months Ended June 30, June 30, Logistics (in millions) (1) 2020 2019 (2) 2020 2019 (2) Transportation Brokerage and Freight Forwarding services $ 101.9 $ 131.7 $ 204.0 $ 255.0 Warehouse and distribution services 8.2 8.3 16.4 16.7 Supply chain management and other services 3.2 2.5 5.9 5.3 Total $ 113.3 $ 142.5 $ 226.3 $ 277.0 (1) Logistics revenue transactions are primarily denominated in U.S. dollars except for less than 3 percent of transportation brokerage and freight forwarding services revenue, and supply chain management and other services revenue categories which are denominated in foreign currencies. (2) The Company has reclassified $3.0 million and $6.1 million from transportation brokerage and freight forwarding services to warehouse and distribution services for the three and six months ended June 30, 2019, respectively, to be consistent with its current period presentation. There was no change in total Logistics revenue for the three and six months ended June 30, 2019. ◾ Transportation Brokerage and Freight Forwarding services revenue consists of amounts billed to customers for services provided. The primary costs include third-party purchased transportation services, labor and equipment. Revenue and the related purchased third-party transportation costs are recognized over the duration of a delivery based upon the relative transit time completed in each reporting period. Labor and other operating costs are expensed as incurred. The Company reports revenue on a gross basis as the Company serves as the principal in these transactions because it is responsible for fulfilling the contractual arrangements with the customer and has latitude in establishing prices. ◾ Warehousing and distribution services revenue consist of amounts billed to customers for storage, handling, and value-added packaging of customer merchandise. Storage revenue is recognized in the month the service is provided to the customer. Storage related costs are recognized as incurred. Other warehousing and distribution services revenue and related costs are recognized in proportion to the services performed. ◾ Supply chain management and other services revenue, and related costs are recognized in proportion to the services performed. The Company generally invoices its customers at the commencement of the voyage or the transportation service being provided, or as other services are being performed. Revenue is deferred when services are invoiced in advance to the customer. The Company’s receivables are classified as short-term as collection terms are for periods of less than one year. The Company expenses sales commissions and contract acquisition costs as incurred because the amounts are generally immaterial. These expenses are included in selling, general and administrative expenses in the Condensed Consolidated Statements of Income and Comprehensive Income. Capital Construction Fund: The Company’s Capital Construction Fund (“CCF”) is described in Note 7 to the Consolidated Financial Statements included in Part II, Item 8 of the Company’s Annual Report on Form 10-K for the year ended December 31, 2019. million of eligible accounts receivable was assigned to the CCF. Due to the nature of the assignment of eligible accounts receivable into the CCF, such assigned amounts are classified as part of accounts receivable in the Condensed Consolidated Balance Sheets. Cash on deposit in the CCF is held in a money market account and classified as a long-term asset in the Company’s Condensed Consolidated Balance Sheets, as the Company intends to use qualified cash withdrawals to fund long-term investment in the construction of new vessels. During the three and six months ended June 30, 2020, the Company deposited million from the CCF, respectively. The balance of cash on deposit at June 30, 2020 and December 31, 2019 was nominal. Investment in SSAT: Condensed income statement information (unaudited) for SSAT for the three and six months ended June 30, 2020 and 2019 consisted of the following: Three Months Ended Six Months Ended June 30, June 30, (In millions) 2020 2019 2020 2019 Operating revenue $ 243.3 $ 268.8 $ 522.2 $ 536.9 Operating costs and expenses (229.9) (265.0) (495.3) (509.2) Operating income 13.4 3.8 26.9 27.7 Net Income (1) $ 12.3 $ 4.2 $ 25.3 $ 26.8 Company Share of SSAT's Net Income (2) $ 3.7 $ 0.9 $ 7.7 $ 9.4 (1) Includes earnings from equity method investments held by SSAT less earnings allocated to non-controlling interests. (2) The Company records its share of net income from SSAT in costs and expenses in the Condensed Consolidated Statement of Income and Comprehensive Income due to the nature of SSAT’s operations. The Company’s investment in SSAT was $77.5 million and $76.2 million at June 30, 2020 and December 31, 2019, respectively. During the six months ended June 30, 2020, the Company recorded an increase of $2.2 million in its investment in SSAT and a corresponding increase in retained earnings related to the formation of a new subsidiary of SSAT, whose controlling interest is retained by SSAT. Deferred Loan Fees: The Company records deferred loan fees, excluding those related to the revolving credit facility, as a reduction to Total Debt in the Company’s Condensed Consolidated Balance Sheets in accordance with Accounting Standards Update (“ASU”) 2015-03, Interest-Imputation of Interest (Subtopic 835-30): Simplifying the Presentation of Debt Issuance Costs (“ASU 2015-03”). These costs are being amortized over the life of the related debt using the effective interest method (see Note 6). Deferred loan fees related to the Company’s revolving credit facility are recorded in other long-term assets in the Company’s Condensed Consolidated Balance Sheets. These deferred loan fees are being amortized using the straight-line method as the difference between that and the use of the effective interest method is not material. These deferred loan fees were $2.8 million and $1.3 million at June 30, 2020 and December 31, 2019, respectively. Contingencies: Environmental Matters: Other Matters: 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. Dividends: The Company’s second quarter 2020 cash dividend of $0.22 per share was paid on June 4, 2020. On June 25, 2020, the Company’s Board of Directors declared a cash dividend of $0.23 per share payable on September 3, 2020. New Accounting Pronouncements: Measurement of Credit Losses on Financial Instruments (“ASU 2016-13”): In June 2016, the Financial Accounting Standards Board (“FASB”) issued ASU 2016- 13 which amends the current approach to estimate credit losses on certain financial assets, including trade and other receivables, available-for-sale securities and other financial instruments. ASU 2016- 13 requires entities to establish a valuation allowance for the expected lifetime losses of certain financial instruments. Subsequent changes in the valuation allowance are recorded in current earnings and reversal of previous losses is permitted. The new standard is effective for interim and annual periods beginning on or after December 15, 2019. The Company adopted ASU 2016- 13 effective January 1, 2020 using the modified retrospective approach. Upon adoption, the Company included an evaluation of expected future credit losses as part of its estimate for determining the allowance for doubtful accounts. The impact of this change was not material to the Company’s allowance for doubtful accounts receivable in the Condensed Consolidated Financial Statements. The Company will continue to monitor the impact of the recent COVID-19 pandemic on expected future credit losses. The Company’s accounting policy related to allowance for doubtful accounts receivable is described above. Customer’s Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That is a Service Contract (“ASU 2018-15”): In August 2018, FASB issued ASU 2018-15 which aligns the requirements for capitalizing implementation costs incurred in a hosting arrangement that is a service contract with the requirements for capitalizing costs incurred to develop or obtain internal-use software. The Company adopted ASU 2018-15 on a prospective basis effective January 1, 2020. During the six months ended June 30, 2020, the Company capitalized costs of $1.3 million related to cloud computing arrangements and which were included in other long-term assets on the Company’s Condensed Consolidated Balance Sheets as of June 30, 2020. |
REPORTABLE SEGMENTS
REPORTABLE SEGMENTS | 6 Months Ended |
Jun. 30, 2020 | |
REPORTABLE SEGMENTS | |
REPORTABLE SEGMENTS | 3. 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 income, exclusive of interest expense and income taxes. In arrangements where the customer purchases ocean transportation and logistics services, the revenues are allocated to each reportable segment based upon the contractual amounts for each type of service. The Company’s SSAT segment has been aggregated into the Company’s Ocean Transportation segment due to the operations of SSAT being an integral part of the Company’s Ocean Transportation business. The Company’s Ocean Transportation segment provides ocean transportation services to the Logistics segment, and the Logistics segment provides logistics services to the Ocean Transportation segment in certain transactions. Accordingly, inter-segment revenue of $24.2 million and $25.3 million for the three months ended June 30, 2020 and 2019, and $43.6 million and $47.1 million for the six months ended June 30, 2020 and 2019, respectively, have been eliminated from operating revenues in the table below. Reportable segment financial information for the three and six months ended June 30, 2020 and 2019 are as follows: Three Months Ended Six Months Ended June 30, June 30, (In millions) 2020 2019 2020 2019 Operating Revenue: Ocean Transportation (1) $ 410.8 $ 415.4 $ 811.7 $ 813.3 Logistics (2) 113.3 142.5 226.3 277.0 Total Operating Revenue $ 524.1 $ 557.9 $ 1,038.0 $ 1,090.3 Operating Income: Ocean Transportation (3) $ 42.3 $ 19.7 $ 50.2 $ 29.1 Logistics 8.9 11.3 14.0 19.4 Total Operating Income 51.2 31.0 64.2 48.5 Interest expense, net (8.2) (6.1) (16.8) (10.7) Other income (expense), net 1.5 0.8 2.1 1.4 Income before Income Taxes 44.5 25.7 49.5 39.2 Income taxes (11.7) (7.3) (12.9) (8.3) Net Income $ 32.8 $ 18.4 $ 36.6 $ 30.9 (1) Ocean Transportation operating revenue excludes inter-segment revenue of $11.9 million and $13.8 million for the three months ended June 30, 2020 and 2019, and $21.3 million and $25.2 million for the six months ended June 30, 2020 and 2019, respectively. (2) Logistics operating revenue excludes inter-segment revenue of $12.3 million and $11.5 million for the three months ended June 30, 2020 and 2019, and $22.3 million and $21.9 million for the six months ended June 30, 2020 and 2019, respectively. (3) Ocean Transportation segment information includes $3.7 million and $0.9 million of equity in income from the Company’s equity investment in SSAT for the three months ended June 30, 2020 and 2019, and $7.7 million and $9.4 million for the six months ended June 30, 2020 and 2019, respectively. |
PROPERTY AND EQUIPMENT
PROPERTY AND EQUIPMENT | 6 Months Ended |
Jun. 30, 2020 | |
PROPERTY AND EQUIPMENT | |
PROPERTY AND EQUIPMENT | 4. PROPERTY AND EQUIPMENT Property and equipment as of June 30, 2020 and December 31, 2019 consisted of the following: June 30, December 31, (In millions) 2020 2019 Cost: Vessels $ 1,898.2 $ 1,653.5 Containers and equipment 525.2 544.5 Terminal facilities and other property 114.7 114.4 Vessel construction in progress 190.6 488.9 Other construction in progress 27.4 35.4 Total Property and Equipment 2,756.1 2,836.7 Less: Accumulated Depreciation (1,177.7) (1,238.6) Total Property and Equipment, net $ 1,578.4 $ 1,598.1 Vessel construction in progress relates to progress payments for the construction of new vessels, capitalized owner’s items and capitalized interest. During the six months ended June 30, 2020, the newly constructed vessel Lurline million of capitalized interest, being transferred from the Vessel construction in progress category to the Vessels category within Property and Equipment. Capitalized interest included in Vessel construction in progress was |
GOODWILL AND INTANGIBLES ASSETS
GOODWILL AND INTANGIBLES ASSETS | 6 Months Ended |
Jun. 30, 2020 | |
GOODWILL AND INTANGIBLES ASSETS | |
GOODWILL AND INTANGIBLES ASSETS | 5. GOODWILL AND INTANGIBLES Goodwill by segment as of June 30, 2020 and December 31, 2019 consisted of the following: Ocean (In millions) Transportation Logistics Total Goodwill $ 222.6 $ 105.2 $ 327.8 Intangible assets as of June 30, 2020 and December 31, 2019 consisted of the following: June 30, December 31, (In millions) 2020 2019 Customer Relationships: Ocean Transportation $ 140.6 $ 140.6 Logistics 90.1 90.1 Total 230.7 230.7 Less: Accumulated Amortization (60.5) (55.1) Total Customer Relationships, net 170.2 175.6 Trade name – Logistics 27.3 27.3 Total Intangible Assets, net $ 197.5 $ 202.9 The Company evaluates its goodwill and 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. The Company has reporting units within the Ocean Transportation and Logistics reportable segments. The Company considered the deterioration in general economic and market conditions due to the COVID-19 pandemic and its impact on the performance of each of the Company’s reporting units. Based on the Company’s assessment of its market capitalization, future forecasts and the amount of excess of fair value over the carrying value of the reporting units in the 2019 annual impairment tests, the Company concluded that an impairment triggering event did not occur during the quarter ended June 30, 2020. The Company will monitor events and changes in circumstances that could negatively impact the key assumptions used in determining the fair value, including the amount and timing of estimated future cash flows generated by the reporting units, long-term growth and discount rates, comparable company market valuations, and industry and economic trends. It is possible that future changes in such circumstances, including a more prolonged and/or severe COVID-19 pandemic, or future changes in the assumptions and estimates used in assessing the fair value of the reporting unit, could require the Company to record a non-cash impairment charge. |
DEBT
DEBT | 6 Months Ended |
Jun. 30, 2020 | |
DEBT | |
DEBT | 6. DEBT As of June 30, 2020 and December 31, 2019, the Company’s debt consisted of the following: June 30, December 31, (In millions) 2020 2019 Private Placement Term Loans: 5.79 %, payable through 2020 $ — $ 3.5 3.66 %, payable through 2023 27.4 31.9 4.16 %, payable through 2027 36.7 39.3 3.37 %, payable through 2027 75.0 75.0 3.14 %, payable through 2031 178.8 188.0 4.31 %, payable through 2032 29.0 30.3 4.35 %, payable through 2044 — 100.0 3.92 %, payable through 2045 — 69.5 Title XI Debt: 5.34 %, payable through 2028 18.7 19.8 5.27 %, payable through 2029 20.9 22.0 1.22 %, payable through 2043 185.9 — 1.35 %, payable through 2044 139.6 — Revolving credit facility, maturity date of June 29, 2022 178.0 379.1 Total Debt 890.0 958.4 Less: Current portion (50.5) (48.4) Total Long-term Debt 839.5 910.0 Less: Deferred loan fees (16.0) — Total Long-term Debt, net of deferred loan fees $ 823.5 $ 910.0 Except as described below, the Company’s debt is described in Note 6 to the Condensed Consolidated Financial Statements included in the Company’s Quarterly Report on Form 10-Q for the three months ended March 31, 2020. Private Placement Term Loans: On May 12, 2020, the Company redeemed private placement term loans totaling 2020 Title XI Debt: On April 27, 2020, MatNav issued Daniel K. Inouye (the “DKI Title XI Debt”). A fee of approximately million was paid to the United States Maritime Administration (“MARAD”) out of the proceeds at closing. The net proceeds of approximately million were used to reduce outstanding debt. The secured bonds mature on October 15, 2043 and have a cash interest rate of On June 22, 2020, MatNav issued $139.6 million in U.S. Government guaranteed vessel financing bonds (Title XI) to partially refinance debt incurred in connection with the construction of Kaimana Hila (together with the DKI Title XI Debt, the “2020 Title XI Debt”). A fee of approximately million was paid to MARAD out of the proceeds at closing. The net proceeds of approximately million were used to reduce outstanding debt. The secured bonds mature on March 15, 2044 and have a cash interest rate of million. Under the 2020 Title XI Debt agreements, MARAD has guaranteed the obligation of MatNav. MatNav has agreed to reimburse MARAD for any payments it makes under the MARAD guarantees and MatNav’s obligations to MARAD are secured by mortgages on the vessels and certain other related assets. The 2020 Title XI Debt is subject to the debt covenants as described in Note 6 to the Condensed Consolidated Financial Statements included in the Company’s Quarterly Report on Form 10-Q for the three months ended March 31, 2020. Revolving Credit Facility: million of remaining borrowing availability under the revolving credit facility. 30, 2020. Based on the Company’s consolidated net leverage ratio, which stipulates borrowing margins, the interest rate applicable to revolving credit facility percent at June 30, 2020. Borrowings under the revolving credit facility are classified as long-term debt in the Condensed Consolidated Balance Sheets, as principal payments are not required until the maturity date of June 29, 2022. Debt Security and Guarantees: All of the debt of the Company and MatNav, including related guarantees, as of June 30, 2020 was unsecured, except for the 2020 Title XI Debt and other Title XI debt. Debt Maturities: As of Year (in millions) June 30, 2020 Remainder of 2020 $ 23.7 2021 59.2 2022 243.0 2023 60.4 2024 51.7 Thereafter 452.0 Total Debt $ 890.0 Deferred Loan Fees: Imputation of Interest . Activity relating to deferred loan fees for the six months ended June 30, 2020 are as follows: Deferred Loan Fees (in millions) Amount Deferred financing costs related to Title XI bonds and private placement debt amendments $ 16.5 Deferred fees expensed related to the redemption of private placement debt (0.3) Amortization expense for the six months ended June 30, 2020 (0.2) Balance at June 30, 2020 $ 16.0 As of June 30, 2020, amortization expense relating to deferred loan fees during the next five years and thereafter are as follows: Year (in millions) Amount Remainder of 2020 $ 0.8 2021 1.5 2022 1.2 2023 1.1 2024 1.1 Thereafter 10.3 Total amortization expense of deferred loan fees $ 16.0 |
LEASES
LEASES | 6 Months Ended |
Jun. 30, 2020 | |
LEASES | |
LEASES | 7. LEASES The Company’s leases are described in Note 9 to the Consolidated Financial Statements included in Part II, Item 8 of the Company’s Annual Report on Form 10-K for the year ended December 31, 2019. Components of Lease Cost: Components of lease cost recorded in the Company’s Condensed Consolidated Statement of Income and Comprehensive Income for the three and six months ended June 30, 2020 and 2019 consisted of the following: Three Months Ended Six Months Ended June 30, June 30, (In millions) 2020 2019 2020 2019 Operating lease cost $ 20.5 $ 16.8 $ 40.5 $ 33.5 Short-term lease cost 2.4 2.5 2.5 4.9 Variable lease cost 0.2 0.1 0.4 0.2 Total lease cost $ 23.1 $ 19.4 $ 43.4 $ 38.6 Sale and Leaseback of Equipment: On March 25, 2020, the Company entered into an agreement for the sale and leaseback of multiple tranches of chassis and container equipment. The net proceeds from the sales were million, and the gain on the disposal of the equipment was not material to the Company’s Condensed Consolidated Financial Statements. The Company subsequently leased back the equipment under a operating lease agreement that includes purchase options exercisable at fair market value. There were |
ACCUMULATED OTHER COMPREHENSIVE
ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS) | 6 Months Ended |
Jun. 30, 2020 | |
ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS). | |
ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS) | 8. ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS) Changes in accumulated other comprehensive income (loss) by component, net of tax, for the six months ended June 30, 2020 are as follows: Accumulated Non- Other Post- Qualified Comprehensive (In millions) Pensions Retirement Plans Other Income (Loss) Balance at December 31, 2019 $ (51.9) $ 16.3 $ (0.4) $ (0.9) $ (36.9) Amortization of prior service cost (0.5) (0.6) (0.1) — (1.2) Amortization of net loss 1.1 0.1 0.1 — 1.3 Foreign currency exchange — — — (0.5) (0.5) Other adjustments — — — (0.2) (0.2) Balance at March 31, 2020 (51.3) 15.8 (0.4) (1.6) (37.5) Amortization of prior service cost (0.4) (0.7) — — (1.1) Amortization of net loss 1.1 0.1 0.1 — 1.3 Foreign currency exchange — — — 0.3 0.3 Other adjustments — — — (0.4) (0.4) Balance at June 30, 2020 $ (50.6) $ 15.2 $ (0.3) $ (1.7) $ (37.4) Changes in accumulated other comprehensive income (loss) by component, net of tax, for the six months ended June 30, 2019 consisted of the following: Accumulated Non- Other Post- Qualified Comprehensive (In millions) Pensions Retirement Plans Other Income (Loss) Balance at December 31, 2018 $ (55.8) $ 21.7 $ (0.1) $ (0.3) $ (34.5) Amortization of prior service cost (0.4) (0.7) — — (1.1) Amortization of net loss 0.7 0.2 — — 0.9 Balance at March 31, 2019 (55.5) 21.2 (0.1) (0.3) (34.7) Amortization of prior service cost (0.5) (0.7) (0.1) 0.1 (1.2) Amortization of net loss 0.7 0.1 0.1 — 0.9 Other adjustments — — — (0.2) (0.2) Balance at June 30, 2019 $ (55.3) $ 20.6 $ (0.1) $ (0.4) $ (35.2) |
FAIR VALUE OF FINANCIAL INSTRUM
FAIR VALUE OF FINANCIAL INSTRUMENTS | 6 Months Ended |
Jun. 30, 2020 | |
FAIR VALUE OF FINANCIAL INSTRUMENTS | |
FAIR VALUE OF FINANCIAL INSTRUMENTS | 9. 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, cash equivalents and restricted cash, and Level 2 inputs for its variable and fixed rate debt. The fair values of cash, cash equivalents and restricted cash, and variable rate debt approximate their carrying values due to the nature of the instruments. The fair value of fixed rate debt is calculated based upon interest rates available for debt with terms and maturities similar to the Company’s existing debt arrangements. The carrying value and fair value of the Company’s financial instruments as of June 30, 2020 and December 31, 2019 are as follows: Quoted Prices in Significant Significant Total Active Markets Observable Unobservable Carrying Value Total (Level 1) Inputs (Level 2) Inputs (Level 3) (In millions) June 30, 2020 Fair Value Measurements at June 30, 2020 Cash and cash equivalents $ 19.5 $ 19.5 $ 19.5 $ — $ — Restricted cash $ 3.0 $ 3.0 $ 3.0 $ — $ — Variable rate debt $ 178.0 $ 178.0 $ — $ 178.0 $ — Fixed rate debt $ 712.0 $ 708.9 $ — $ 708.9 $ — (In millions) December 31, 2019 Fair Value Measurements at December 31, 2019 Cash and cash equivalents $ 21.2 $ 21.2 $ 21.2 $ — $ — Restricted cash $ 7.2 $ 7.2 $ 7.2 $ — $ — Variable rate debt $ 379.1 $ 379.1 $ — $ 379.1 $ — Fixed rate debt $ 579.3 $ 585.9 $ — $ 585.9 $ — |
EARNINGS PER-SHARE
EARNINGS PER-SHARE | 6 Months Ended |
Jun. 30, 2020 | |
EARNINGS PER-SHARE | |
EARNINGS PER-SHARE | 10. EARNINGS PER SHARE Basic earnings per share is determined by dividing net income by the weighted average common shares outstanding during the period. The calculation of diluted earnings per share includes the dilutive effect of unexercised non-qualified stock options and non-vested restricted stock units. The computation of weighted average common shares outstanding excluded a nominal amount of anti-dilutive non-qualified stock options for each period ended June 30, 2020 and 2019. The denominators used to compute basic and diluted earnings per share for the three and six months ended June 30, 2020 and 2019 are as follows: Three Months Ended June 30, 2020 Six Months Ended June 30, 2020 Weighted Per Weighted Per Average Common Average Common Net Common Share Net Common Share (In millions, except per share amounts) Income Shares Amount Income Shares Amount Basic $ 32.8 43.1 $ 0.76 $ 36.6 43.0 $ 0.85 Effect of Dilutive Securities 0.2 — 0.3 — Diluted $ 32.8 43.3 $ 0.76 $ 36.6 43.3 $ 0.85 Three Months Ended June 30, 2019 Six Months Ended June 30, 2019 Weighted Per Weighted Per Average Common Average Common Net Common Share Net Common Share (In millions, except per share amounts) Income Shares Amount Income Shares Amount Basic $ 18.4 42.8 $ 0.43 $ 30.9 42.8 $ 0.72 Effect of Dilutive Securities 0.4 — 0.4 — Diluted $ 18.4 43.2 $ 0.43 $ 30.9 43.2 $ 0.72 |
SHARE-BASED COMPENSATION
SHARE-BASED COMPENSATION | 6 Months Ended |
Jun. 30, 2020 | |
SHARE-BASED COMPENSATION | |
SHARE-BASED COMPENSATION | 11. SHARE-BASED COMPENSATION During the three and six months ended June 30, 2020, the Company granted approximately 22,000 and 338,200 in total of time-based restricted stock units and performance-based shares to certain of its employees at a weighted average grant date fair value of $27.30 and $38.64, respectively. Total share-based compensation cost recognized in the Condensed Consolidated Statements of Income and Comprehensive Income as a component of selling, general and administrative expenses was $3.0 million and $3.0 million for the three months ended June 30, 2020 and 2019, and $6.1 million and $6.2 million for the six months ended June 30, 2020 and 2019, respectively. Total unrecognized compensation cost related to unvested share-based compensation arrangements was years. Total unrecognized compensation cost may be adjusted for any unearned performance shares or forfeited shares. |
PENSION AND POST-RETIREMENT PLA
PENSION AND POST-RETIREMENT PLANS | 6 Months Ended |
Jun. 30, 2020 | |
PENSION AND POST-RETIREMENT PLANS | |
PENSION AND POST-RETIREMENT PLANS | 12. PENSION AND POST-RETIREMENT PLANS The Company’s pension and post-retirement plans are described in Note 11 to the Consolidated Financial Statements included in Part II, Item 8 of the Company’s Annual Report on Form 10-K for the year ended December 31, 2019 . Components of net periodic benefit cost and other amounts recognized in Other Comprehensive Income (Loss) for the qualified pension plans and the post-retirement benefit plans for the three and six months ended June 30, 2020 and 2019 consisted of the following: Pension Benefits Post-retirement Benefits Three Months Ended June 30, Three Months Ended June 30, (In millions) 2020 2019 2020 2019 Components of net periodic benefit cost (benefit): Service cost $ 1.3 $ 1.1 $ 0.2 $ 0.2 Interest cost 1.9 2.3 0.2 0.3 Expected return on plan assets (3.3) (3.2) — — Amortization of net loss 1.4 0.9 0.1 0.2 Amortization of prior service credit (0.6) (0.6) (0.9) (1.0) Net periodic benefit cost (benefit) $ 0.7 $ 0.5 $ (0.4) $ (0.3) Pension Benefits Post-retirement Benefits Six Months Ended June 30, Six Months Ended June 30, (In millions) 2020 2019 2020 2019 Components of net periodic benefit cost (benefit): Service cost $ 2.5 $ 2.2 $ 0.3 $ 0.3 Interest cost 3.8 4.6 0.4 0.6 Expected return on plan assets (6.5) (6.3) — — Amortization of net loss 2.9 1.8 0.3 0.4 Amortization of prior service credit (1.2) (1.2) (1.8) (1.9) Net periodic benefit cost (benefit) $ 1.5 $ 1.1 $ (0.8) $ (0.6) |
SIGNIFICANT ACCOUNTING POLICI_2
SIGNIFICANT ACCOUNTING POLICIES (Policies) | 6 Months Ended |
Jun. 30, 2020 | |
SIGNIFICANT ACCOUNTING POLICIES | |
Basis of Presentation | Basis of Presentation: The Condensed Consolidated Financial Statements are unaudited, and include the accounts of Matson, Inc. and all wholly-owned subsidiaries, after elimination of intercompany amounts and transactions. 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. The Company accounts for its investment in SSAT using the equity method of accounting. Due to the nature of the Company’s operations, the results for interim periods are not necessarily indicative of results to be expected for the year. These Condensed Consolidated Financial Statements reflect all normal recurring adjustments that are, in the opinion of management, necessary for fair presentation of the results of the interim periods, and do not include all of the information and footnotes required by U.S. generally accepted accounting principles for complete consolidated financial statements. The Condensed Consolidated Financial Statements should be read in conjunction with the Consolidated Financial Statements and notes thereto included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2019, filed with the Securities and Exchange Commission (“SEC”) on February 28, 2020. |
Fiscal Period | Fiscal Period: The period end for Matson covered by this report is June 30, 2020. The period end for MatNav and its subsidiaries covered by this report occurred on the last Friday in June, or June 26, 2020. |
Significant Accounting Policies | Significant Accounting Policies: The Company’s significant accounting policies are described in Note 2 to the Consolidated Financial Statements included in Part II, Item 8 of the Company’s Annual Report on Form 10-K for the year ended December 31, 2019. |
Use of Estimates | Use of Estimates: The preparation of the interim condensed 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; impairment of long-lived assets, intangible assets and goodwill; capitalized interest; allowance for doubtful accounts; legal contingencies; uninsured risks and related liabilities; accrual estimates; pension and post-retirement estimates; multi-employer withdrawal liabilities; operating lease assets and liabilities; and income taxes. Future results could be materially affected if actual results differ from these estimates and assumptions. |
Allowance for Doubtful Accounts Receivable | Allowance for Doubtful Accounts Receivable: Allowance for doubtful accounts receivable is established by management based on estimates of collectability. Estimates of collectability are principally based on an evaluation of the current financial condition of the customer and the potential risks to collection, the customers’ payment history, expected future credit losses and other factors which are regularly monitored by the Company. |
Recognition of Revenues and Related Expenses | Recognition of Revenues and Related Expenses: Revenue in the Company’s Condensed Consolidated Financial Statements is presented net of elimination of intercompany transactions. The following is a description of the Company’s principal revenue generating activities by segment, and the Company’s revenue recognition policy for each activity for the periods presented: Three Months Ended Six Months Ended June 30, June 30, Ocean Transportation (in millions) (1) 2020 2019 2020 2019 Ocean Transportation services $ 402.6 $ 406.6 $ 793.7 $ 794.5 Terminal and other related services 4.6 4.8 10.4 11.5 Fuel sales 2.1 2.6 4.7 4.6 Vessel management and related services 1.5 1.4 2.9 2.7 Total $ 410.8 $ 415.4 $ 811.7 $ 813.3 (1) Ocean Transportation revenue transactions are primarily denominated in U.S. dollars except for less than 3 percent of Ocean Transportation revenues and fuel sales revenue categories which are denominated in foreign currencies. ◾ Ocean Transportation services revenue is recognized ratably over the duration of a voyage based on the relative transit time completed in each reporting period. Vessel operating costs and other ocean transportation operating costs, such as terminal operating overhead and general and administrative expenses, are charged to operating costs as incurred. ◾ Terminal and other related services revenue is recognized as the services are performed. Related costs are recognized as incurred. ◾ Fuel sales revenue and related costs are recognized when the Company has completed delivery of the product to the customer in accordance with the terms and conditions of the contract. ◾ Vessel management and related services revenue is recognized in proportion to the services completed. Related costs are recognized as incurred. Three Months Ended Six Months Ended June 30, June 30, Logistics (in millions) (1) 2020 2019 (2) 2020 2019 (2) Transportation Brokerage and Freight Forwarding services $ 101.9 $ 131.7 $ 204.0 $ 255.0 Warehouse and distribution services 8.2 8.3 16.4 16.7 Supply chain management and other services 3.2 2.5 5.9 5.3 Total $ 113.3 $ 142.5 $ 226.3 $ 277.0 (1) Logistics revenue transactions are primarily denominated in U.S. dollars except for less than 3 percent of transportation brokerage and freight forwarding services revenue, and supply chain management and other services revenue categories which are denominated in foreign currencies. (2) The Company has reclassified $3.0 million and $6.1 million from transportation brokerage and freight forwarding services to warehouse and distribution services for the three and six months ended June 30, 2019, respectively, to be consistent with its current period presentation. There was no change in total Logistics revenue for the three and six months ended June 30, 2019. ◾ Transportation Brokerage and Freight Forwarding services revenue consists of amounts billed to customers for services provided. The primary costs include third-party purchased transportation services, labor and equipment. Revenue and the related purchased third-party transportation costs are recognized over the duration of a delivery based upon the relative transit time completed in each reporting period. Labor and other operating costs are expensed as incurred. The Company reports revenue on a gross basis as the Company serves as the principal in these transactions because it is responsible for fulfilling the contractual arrangements with the customer and has latitude in establishing prices. ◾ Warehousing and distribution services revenue consist of amounts billed to customers for storage, handling, and value-added packaging of customer merchandise. Storage revenue is recognized in the month the service is provided to the customer. Storage related costs are recognized as incurred. Other warehousing and distribution services revenue and related costs are recognized in proportion to the services performed. ◾ Supply chain management and other services revenue, and related costs are recognized in proportion to the services performed. The Company generally invoices its customers at the commencement of the voyage or the transportation service being provided, or as other services are being performed. Revenue is deferred when services are invoiced in advance to the customer. The Company’s receivables are classified as short-term as collection terms are for periods of less than one year. The Company expenses sales commissions and contract acquisition costs as incurred because the amounts are generally immaterial. These expenses are included in selling, general and administrative expenses in the Condensed Consolidated Statements of Income and Comprehensive Income. |
Capital Construction Fund | Capital Construction Fund: The Company’s Capital Construction Fund (“CCF”) is described in Note 7 to the Consolidated Financial Statements included in Part II, Item 8 of the Company’s Annual Report on Form 10-K for the year ended December 31, 2019. million of eligible accounts receivable was assigned to the CCF. Due to the nature of the assignment of eligible accounts receivable into the CCF, such assigned amounts are classified as part of accounts receivable in the Condensed Consolidated Balance Sheets. Cash on deposit in the CCF is held in a money market account and classified as a long-term asset in the Company’s Condensed Consolidated Balance Sheets, as the Company intends to use qualified cash withdrawals to fund long-term investment in the construction of new vessels. During the three and six months ended June 30, 2020, the Company deposited million from the CCF, respectively. The balance of cash on deposit at June 30, 2020 and December 31, 2019 was nominal. |
Investment in SSAT | Investment in SSAT: Condensed income statement information (unaudited) for SSAT for the three and six months ended June 30, 2020 and 2019 consisted of the following: Three Months Ended Six Months Ended June 30, June 30, (In millions) 2020 2019 2020 2019 Operating revenue $ 243.3 $ 268.8 $ 522.2 $ 536.9 Operating costs and expenses (229.9) (265.0) (495.3) (509.2) Operating income 13.4 3.8 26.9 27.7 Net Income (1) $ 12.3 $ 4.2 $ 25.3 $ 26.8 Company Share of SSAT's Net Income (2) $ 3.7 $ 0.9 $ 7.7 $ 9.4 (1) Includes earnings from equity method investments held by SSAT less earnings allocated to non-controlling interests. (2) The Company records its share of net income from SSAT in costs and expenses in the Condensed Consolidated Statement of Income and Comprehensive Income due to the nature of SSAT’s operations. The Company’s investment in SSAT was $77.5 million and $76.2 million at June 30, 2020 and December 31, 2019, respectively. During the six months ended June 30, 2020, the Company recorded an increase of $2.2 million in its investment in SSAT and a corresponding increase in retained earnings related to the formation of a new subsidiary of SSAT, whose controlling interest is retained by SSAT. |
Deferred Loan Fees | Deferred Loan Fees: The Company records deferred loan fees, excluding those related to the revolving credit facility, as a reduction to Total Debt in the Company’s Condensed Consolidated Balance Sheets in accordance with Accounting Standards Update (“ASU”) 2015-03, Interest-Imputation of Interest (Subtopic 835-30): Simplifying the Presentation of Debt Issuance Costs (“ASU 2015-03”). These costs are being amortized over the life of the related debt using the effective interest method (see Note 6). Deferred loan fees related to the Company’s revolving credit facility are recorded in other long-term assets in the Company’s Condensed Consolidated Balance Sheets. These deferred loan fees are being amortized using the straight-line method as the difference between that and the use of the effective interest method is not material. These deferred loan fees were $2.8 million and $1.3 million at June 30, 2020 and December 31, 2019, respectively. |
Contingencies and Other Matters | Contingencies: Environmental Matters: Other Matters: 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. |
Dividends | Dividends: The Company’s second quarter 2020 cash dividend of $0.22 per share was paid on June 4, 2020. On June 25, 2020, the Company’s Board of Directors declared a cash dividend of $0.23 per share payable on September 3, 2020. |
New Accounting Pronouncements | New Accounting Pronouncements: Measurement of Credit Losses on Financial Instruments (“ASU 2016-13”): In June 2016, the Financial Accounting Standards Board (“FASB”) issued ASU 2016- 13 which amends the current approach to estimate credit losses on certain financial assets, including trade and other receivables, available-for-sale securities and other financial instruments. ASU 2016- 13 requires entities to establish a valuation allowance for the expected lifetime losses of certain financial instruments. Subsequent changes in the valuation allowance are recorded in current earnings and reversal of previous losses is permitted. The new standard is effective for interim and annual periods beginning on or after December 15, 2019. The Company adopted ASU 2016- 13 effective January 1, 2020 using the modified retrospective approach. Upon adoption, the Company included an evaluation of expected future credit losses as part of its estimate for determining the allowance for doubtful accounts. The impact of this change was not material to the Company’s allowance for doubtful accounts receivable in the Condensed Consolidated Financial Statements. The Company will continue to monitor the impact of the recent COVID-19 pandemic on expected future credit losses. The Company’s accounting policy related to allowance for doubtful accounts receivable is described above. Customer’s Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That is a Service Contract (“ASU 2018-15”): In August 2018, FASB issued ASU 2018-15 which aligns the requirements for capitalizing implementation costs incurred in a hosting arrangement that is a service contract with the requirements for capitalizing costs incurred to develop or obtain internal-use software. The Company adopted ASU 2018-15 on a prospective basis effective January 1, 2020. During the six months ended June 30, 2020, the Company capitalized costs of $1.3 million related to cloud computing arrangements and which were included in other long-term assets on the Company’s Condensed Consolidated Balance Sheets as of June 30, 2020. |
SIGNIFICANT ACCOUNTING POLICI_3
SIGNIFICANT ACCOUNTING POLICIES (Tables) | 6 Months Ended |
Jun. 30, 2020 | |
Schedule of condensed income statement information (unaudited) for SSAT | Three Months Ended Six Months Ended June 30, June 30, (In millions) 2020 2019 2020 2019 Operating revenue $ 243.3 $ 268.8 $ 522.2 $ 536.9 Operating costs and expenses (229.9) (265.0) (495.3) (509.2) Operating income 13.4 3.8 26.9 27.7 Net Income (1) $ 12.3 $ 4.2 $ 25.3 $ 26.8 Company Share of SSAT's Net Income (2) $ 3.7 $ 0.9 $ 7.7 $ 9.4 (1) Includes earnings from equity method investments held by SSAT less earnings allocated to non-controlling interests. (2) The Company records its share of net income from SSAT in costs and expenses in the Condensed Consolidated Statement of Income and Comprehensive Income due to the nature of SSAT’s operations. |
Ocean Transportation | |
Schedule of principal revenue generating activities by segment | Three Months Ended Six Months Ended June 30, June 30, Ocean Transportation (in millions) (1) 2020 2019 2020 2019 Ocean Transportation services $ 402.6 $ 406.6 $ 793.7 $ 794.5 Terminal and other related services 4.6 4.8 10.4 11.5 Fuel sales 2.1 2.6 4.7 4.6 Vessel management and related services 1.5 1.4 2.9 2.7 Total $ 410.8 $ 415.4 $ 811.7 $ 813.3 (1) Ocean Transportation revenue transactions are primarily denominated in U.S. dollars except for less than 3 percent of Ocean Transportation revenues and fuel sales revenue categories which are denominated in foreign currencies. ◾ Ocean Transportation services revenue is recognized ratably over the duration of a voyage based on the relative transit time completed in each reporting period. Vessel operating costs and other ocean transportation operating costs, such as terminal operating overhead and general and administrative expenses, are charged to operating costs as incurred. ◾ Terminal and other related services revenue is recognized as the services are performed. Related costs are recognized as incurred. ◾ Fuel sales revenue and related costs are recognized when the Company has completed delivery of the product to the customer in accordance with the terms and conditions of the contract. ◾ Vessel management and related services revenue is recognized in proportion to the services completed. Related costs are recognized as incurred. |
Logistics | |
Schedule of principal revenue generating activities by segment | Three Months Ended Six Months Ended June 30, June 30, Logistics (in millions) (1) 2020 2019 (2) 2020 2019 (2) Transportation Brokerage and Freight Forwarding services $ 101.9 $ 131.7 $ 204.0 $ 255.0 Warehouse and distribution services 8.2 8.3 16.4 16.7 Supply chain management and other services 3.2 2.5 5.9 5.3 Total $ 113.3 $ 142.5 $ 226.3 $ 277.0 (1) Logistics revenue transactions are primarily denominated in U.S. dollars except for less than 3 percent of transportation brokerage and freight forwarding services revenue, and supply chain management and other services revenue categories which are denominated in foreign currencies. (2) The Company has reclassified $3.0 million and $6.1 million from transportation brokerage and freight forwarding services to warehouse and distribution services for the three and six months ended June 30, 2019, respectively, to be consistent with its current period presentation. There was no change in total Logistics revenue for the three and six months ended June 30, 2019. ◾ Transportation Brokerage and Freight Forwarding services revenue consists of amounts billed to customers for services provided. The primary costs include third-party purchased transportation services, labor and equipment. Revenue and the related purchased third-party transportation costs are recognized over the duration of a delivery based upon the relative transit time completed in each reporting period. Labor and other operating costs are expensed as incurred. The Company reports revenue on a gross basis as the Company serves as the principal in these transactions because it is responsible for fulfilling the contractual arrangements with the customer and has latitude in establishing prices. ◾ Warehousing and distribution services revenue consist of amounts billed to customers for storage, handling, and value-added packaging of customer merchandise. Storage revenue is recognized in the month the service is provided to the customer. Storage related costs are recognized as incurred. Other warehousing and distribution services revenue and related costs are recognized in proportion to the services performed. ◾ Supply chain management and other services revenue, and related costs are recognized in proportion to the services performed. |
REPORTABLE SEGMENTS (Tables)
REPORTABLE SEGMENTS (Tables) | 6 Months Ended |
Jun. 30, 2020 | |
REPORTABLE SEGMENTS | |
Schedule of reportable segment information | Three Months Ended Six Months Ended June 30, June 30, (In millions) 2020 2019 2020 2019 Operating Revenue: Ocean Transportation (1) $ 410.8 $ 415.4 $ 811.7 $ 813.3 Logistics (2) 113.3 142.5 226.3 277.0 Total Operating Revenue $ 524.1 $ 557.9 $ 1,038.0 $ 1,090.3 Operating Income: Ocean Transportation (3) $ 42.3 $ 19.7 $ 50.2 $ 29.1 Logistics 8.9 11.3 14.0 19.4 Total Operating Income 51.2 31.0 64.2 48.5 Interest expense, net (8.2) (6.1) (16.8) (10.7) Other income (expense), net 1.5 0.8 2.1 1.4 Income before Income Taxes 44.5 25.7 49.5 39.2 Income taxes (11.7) (7.3) (12.9) (8.3) Net Income $ 32.8 $ 18.4 $ 36.6 $ 30.9 (1) Ocean Transportation operating revenue excludes inter-segment revenue of $11.9 million and $13.8 million for the three months ended June 30, 2020 and 2019, and $21.3 million and $25.2 million for the six months ended June 30, 2020 and 2019, respectively. (2) Logistics operating revenue excludes inter-segment revenue of $12.3 million and $11.5 million for the three months ended June 30, 2020 and 2019, and $22.3 million and $21.9 million for the six months ended June 30, 2020 and 2019, respectively. (3) Ocean Transportation segment information includes $3.7 million and $0.9 million of equity in income from the Company’s equity investment in SSAT for the three months ended June 30, 2020 and 2019, and $7.7 million and $9.4 million for the six months ended June 30, 2020 and 2019, respectively. |
PROPERTY AND EQUIPMENT (Tables)
PROPERTY AND EQUIPMENT (Tables) | 6 Months Ended |
Jun. 30, 2020 | |
PROPERTY AND EQUIPMENT | |
Schedule of property and equipment | June 30, December 31, (In millions) 2020 2019 Cost: Vessels $ 1,898.2 $ 1,653.5 Containers and equipment 525.2 544.5 Terminal facilities and other property 114.7 114.4 Vessel construction in progress 190.6 488.9 Other construction in progress 27.4 35.4 Total Property and Equipment 2,756.1 2,836.7 Less: Accumulated Depreciation (1,177.7) (1,238.6) Total Property and Equipment, net $ 1,578.4 $ 1,598.1 |
GOODWILL AND INTANGIBLES ASSE_2
GOODWILL AND INTANGIBLES ASSETS (Tables) | 6 Months Ended |
Jun. 30, 2020 | |
GOODWILL AND INTANGIBLES ASSETS | |
Schedule of goodwill | Goodwill by segment as of June 30, 2020 and December 31, 2019 consisted of the following: Ocean (In millions) Transportation Logistics Total Goodwill $ 222.6 $ 105.2 $ 327.8 |
Schedule of intangible assets | June 30, December 31, (In millions) 2020 2019 Customer Relationships: Ocean Transportation $ 140.6 $ 140.6 Logistics 90.1 90.1 Total 230.7 230.7 Less: Accumulated Amortization (60.5) (55.1) Total Customer Relationships, net 170.2 175.6 Trade name – Logistics 27.3 27.3 Total Intangible Assets, net $ 197.5 $ 202.9 |
DEBT (Tables)
DEBT (Tables) | 6 Months Ended |
Jun. 30, 2020 | |
DEBT | |
Schedule of debt | June 30, December 31, (In millions) 2020 2019 Private Placement Term Loans: 5.79 %, payable through 2020 $ — $ 3.5 3.66 %, payable through 2023 27.4 31.9 4.16 %, payable through 2027 36.7 39.3 3.37 %, payable through 2027 75.0 75.0 3.14 %, payable through 2031 178.8 188.0 4.31 %, payable through 2032 29.0 30.3 4.35 %, payable through 2044 — 100.0 3.92 %, payable through 2045 — 69.5 Title XI Debt: 5.34 %, payable through 2028 18.7 19.8 5.27 %, payable through 2029 20.9 22.0 1.22 %, payable through 2043 185.9 — 1.35 %, payable through 2044 139.6 — Revolving credit facility, maturity date of June 29, 2022 178.0 379.1 Total Debt 890.0 958.4 Less: Current portion (50.5) (48.4) Total Long-term Debt 839.5 910.0 Less: Deferred loan fees (16.0) — Total Long-term Debt, net of deferred loan fees $ 823.5 $ 910.0 |
Schedule of maturities of debt | As of Year (in millions) June 30, 2020 Remainder of 2020 $ 23.7 2021 59.2 2022 243.0 2023 60.4 2024 51.7 Thereafter 452.0 Total Debt $ 890.0 |
Schedule of deferred loan fees | Deferred Loan Fees (in millions) Amount Deferred financing costs related to Title XI bonds and private placement debt amendments $ 16.5 Deferred fees expensed related to the redemption of private placement debt (0.3) Amortization expense for the six months ended June 30, 2020 (0.2) Balance at June 30, 2020 $ 16.0 |
Schedule of estimated amortization expense relating to deferred laon fees | Year (in millions) Amount Remainder of 2020 $ 0.8 2021 1.5 2022 1.2 2023 1.1 2024 1.1 Thereafter 10.3 Total amortization expense of deferred loan fees $ 16.0 |
LEASES (Tables)
LEASES (Tables) | 6 Months Ended |
Jun. 30, 2020 | |
LEASES | |
Summary of lease cost | Three Months Ended Six Months Ended June 30, June 30, (In millions) 2020 2019 2020 2019 Operating lease cost $ 20.5 $ 16.8 $ 40.5 $ 33.5 Short-term lease cost 2.4 2.5 2.5 4.9 Variable lease cost 0.2 0.1 0.4 0.2 Total lease cost $ 23.1 $ 19.4 $ 43.4 $ 38.6 |
ACCUMULATED OTHER COMPREHENSI_2
ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS) (Tables) | 6 Months Ended |
Jun. 30, 2020 | |
ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS). | |
Schedule of changes in accumulated other comprehensive income (loss) by component, net of tax | Accumulated Non- Other Post- Qualified Comprehensive (In millions) Pensions Retirement Plans Other Income (Loss) Balance at December 31, 2019 $ (51.9) $ 16.3 $ (0.4) $ (0.9) $ (36.9) Amortization of prior service cost (0.5) (0.6) (0.1) — (1.2) Amortization of net loss 1.1 0.1 0.1 — 1.3 Foreign currency exchange — — — (0.5) (0.5) Other adjustments — — — (0.2) (0.2) Balance at March 31, 2020 (51.3) 15.8 (0.4) (1.6) (37.5) Amortization of prior service cost (0.4) (0.7) — — (1.1) Amortization of net loss 1.1 0.1 0.1 — 1.3 Foreign currency exchange — — — 0.3 0.3 Other adjustments — — — (0.4) (0.4) Balance at June 30, 2020 $ (50.6) $ 15.2 $ (0.3) $ (1.7) $ (37.4) Accumulated Non- Other Post- Qualified Comprehensive (In millions) Pensions Retirement Plans Other Income (Loss) Balance at December 31, 2018 $ (55.8) $ 21.7 $ (0.1) $ (0.3) $ (34.5) Amortization of prior service cost (0.4) (0.7) — — (1.1) Amortization of net loss 0.7 0.2 — — 0.9 Balance at March 31, 2019 (55.5) 21.2 (0.1) (0.3) (34.7) Amortization of prior service cost (0.5) (0.7) (0.1) 0.1 (1.2) Amortization of net loss 0.7 0.1 0.1 — 0.9 Other adjustments — — — (0.2) (0.2) Balance at June 30, 2019 $ (55.3) $ 20.6 $ (0.1) $ (0.4) $ (35.2) |
FAIR VALUE OF FINANCIAL INSTR_2
FAIR VALUE OF FINANCIAL INSTRUMENTS (Tables) | 6 Months Ended |
Jun. 30, 2020 | |
FAIR VALUE OF FINANCIAL INSTRUMENTS | |
Schedule of fair value of financial instruments | Quoted Prices in Significant Significant Total Active Markets Observable Unobservable Carrying Value Total (Level 1) Inputs (Level 2) Inputs (Level 3) (In millions) June 30, 2020 Fair Value Measurements at June 30, 2020 Cash and cash equivalents $ 19.5 $ 19.5 $ 19.5 $ — $ — Restricted cash $ 3.0 $ 3.0 $ 3.0 $ — $ — Variable rate debt $ 178.0 $ 178.0 $ — $ 178.0 $ — Fixed rate debt $ 712.0 $ 708.9 $ — $ 708.9 $ — (In millions) December 31, 2019 Fair Value Measurements at December 31, 2019 Cash and cash equivalents $ 21.2 $ 21.2 $ 21.2 $ — $ — Restricted cash $ 7.2 $ 7.2 $ 7.2 $ — $ — Variable rate debt $ 379.1 $ 379.1 $ — $ 379.1 $ — Fixed rate debt $ 579.3 $ 585.9 $ — $ 585.9 $ — |
EARNINGS PER-SHARE (Tables)
EARNINGS PER-SHARE (Tables) | 6 Months Ended |
Jun. 30, 2020 | |
EARNINGS PER-SHARE | |
Schedule of basic and diluted earnings per share | Three Months Ended June 30, 2020 Six Months Ended June 30, 2020 Weighted Per Weighted Per Average Common Average Common Net Common Share Net Common Share (In millions, except per share amounts) Income Shares Amount Income Shares Amount Basic $ 32.8 43.1 $ 0.76 $ 36.6 43.0 $ 0.85 Effect of Dilutive Securities 0.2 — 0.3 — Diluted $ 32.8 43.3 $ 0.76 $ 36.6 43.3 $ 0.85 Three Months Ended June 30, 2019 Six Months Ended June 30, 2019 Weighted Per Weighted Per Average Common Average Common Net Common Share Net Common Share (In millions, except per share amounts) Income Shares Amount Income Shares Amount Basic $ 18.4 42.8 $ 0.43 $ 30.9 42.8 $ 0.72 Effect of Dilutive Securities 0.4 — 0.4 — Diluted $ 18.4 43.2 $ 0.43 $ 30.9 43.2 $ 0.72 |
PENSION AND POST-RETIREMENT P_2
PENSION AND POST-RETIREMENT PLANS (Tables) | 6 Months Ended |
Jun. 30, 2020 | |
PENSION AND POST-RETIREMENT PLANS | |
Components of net periodic benefit cost (benefit) | Pension Benefits Post-retirement Benefits Three Months Ended June 30, Three Months Ended June 30, (In millions) 2020 2019 2020 2019 Components of net periodic benefit cost (benefit): Service cost $ 1.3 $ 1.1 $ 0.2 $ 0.2 Interest cost 1.9 2.3 0.2 0.3 Expected return on plan assets (3.3) (3.2) — — Amortization of net loss 1.4 0.9 0.1 0.2 Amortization of prior service credit (0.6) (0.6) (0.9) (1.0) Net periodic benefit cost (benefit) $ 0.7 $ 0.5 $ (0.4) $ (0.3) Pension Benefits Post-retirement Benefits Six Months Ended June 30, Six Months Ended June 30, (In millions) 2020 2019 2020 2019 Components of net periodic benefit cost (benefit): Service cost $ 2.5 $ 2.2 $ 0.3 $ 0.3 Interest cost 3.8 4.6 0.4 0.6 Expected return on plan assets (6.5) (6.3) — — Amortization of net loss 2.9 1.8 0.3 0.4 Amortization of prior service credit (1.2) (1.2) (1.8) (1.9) Net periodic benefit cost (benefit) $ 1.5 $ 1.1 $ (0.8) $ (0.6) |
DESCRIPTION OF THE BUSINESS (De
DESCRIPTION OF THE BUSINESS (Details) | 6 Months Ended | |
Jun. 30, 2020facilitysegment | Jun. 30, 2019segment | |
DESCRIPTION OF THE BUSINESS | ||
Number of reportable segments | segment | 2 | 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 | 8 | |
MatNav | SSAT | ||
DESCRIPTION OF THE BUSINESS | ||
Number of terminal facilities on which SSAT provided terminal and stevedoring services on the U.S. West Coast | 4 |
SIGNIFICANT ACCOUNTING POLICI_4
SIGNIFICANT ACCOUNTING POLICIES - RECOGNITION OF REVENUES AND EXPENSES (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | |||
Jun. 30, 2020 | Jun. 30, 2019 | Mar. 31, 2019 | Jun. 30, 2020 | Jun. 30, 2019 | |
Total | $ 524.1 | $ 557.9 | $ 1,038 | $ 1,090.3 | |
Ocean Transportation | |||||
Ocean Transportation services | 402.6 | 406.6 | |||
Terminal and other related services | 4.6 | 4.8 | |||
Fuel sales | 2.1 | 2.6 | |||
Vessel management services and related costs | 1.5 | 1.4 | |||
Percentage of ocean transportation revenues and fuel sales denominated in foreign currency | 3.00% | 3.00% | |||
Total | 410.8 | 415.4 | |||
Logistics | |||||
Transportation Brokerage and Freight Forwarding Services | 101.9 | 131.7 | |||
Warehouse and distribution services | 8.2 | 8.3 | |||
Supply chain management and other services | 3.2 | 2.5 | |||
Total | 113.3 | 142.5 | |||
Percentage of transportation brokerage and freight forwarding services revenue denominated in foreign currency | 3.00% | 3.00% | |||
Ocean Transportation | |||||
Ocean Transportation services | $ 793.7 | $ 794.5 | |||
Terminal and other related services | 10.4 | 11.5 | |||
Fuel sales | 4.7 | 4.6 | |||
Vessel management services and related costs | 2.9 | 2.7 | |||
Total | 410.8 | 415.4 | 811.7 | 813.3 | |
Logistics | |||||
Transportation Brokerage and Freight Forwarding Services | 204 | 255 | |||
Warehouse and distribution services | 16.4 | 16.7 | |||
Supply chain management and other services | 5.9 | 5.3 | |||
Total | $ 113.3 | $ 142.5 | $ 226.3 | 277 | |
Reclassify Transportation Brokerage and Freight Forwarding Services | |||||
Transportation Brokerage and Freight Forwarding Services | $ (3) | (6.1) | |||
Warehouse and distribution services | $ 3.1 | $ 6.1 |
SIGNIFICANT ACCOUNTING POLICI_5
SIGNIFICANT ACCOUNTING POLICIES - CAPITAL CONSTRUCTION FUND (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2020 | Jun. 30, 2020 | Jun. 30, 2019 | Dec. 31, 2019 | |
Accounts receivable, net | $ 215.2 | $ 215.2 | $ 205.9 | |
Cash Deposits Into CCF | 97.1 | $ 26.4 | ||
Withdrawals from Capital Construction Fund | 97.1 | $ 26.4 | ||
Eligible Accounts Receivable Assigned to CCF | ||||
Accounts receivable, net | 1.7 | 1.7 | $ 1.7 | |
Cash Deposits Into CCF | 26.7 | 97.1 | ||
Withdrawals from Capital Construction Fund | $ 26.7 | $ 97.1 |
SIGNIFICANT ACCOUNTING POLICI_6
SIGNIFICANT ACCOUNTING POLICIES - INVESTMENT IN SSAT (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | |||
Jun. 30, 2020 | Jun. 30, 2019 | Jun. 30, 2020 | Jun. 30, 2019 | Dec. 31, 2019 | |
Investments in affiliates | |||||
Investment in Terminal Joint Venture | $ 77.5 | $ 77.5 | $ 76.2 | ||
Financial information for equity method investment | |||||
Current assets | 273.6 | 273.6 | 289.6 | ||
Noncurrent assets | 2,504 | 2,504 | 2,555.8 | ||
Total Assets | 2,777.6 | 2,777.6 | 2,845.4 | ||
Current liabilities | 449.6 | 449.6 | 436.7 | ||
Noncurrent liabilities | 1,512.5 | 1,512.5 | 1,603 | ||
Total liabilities and shareholders' equity | 2,777.6 | 2,777.6 | 2,845.4 | ||
Company Share of Net Income | 3.7 | $ 0.9 | 7.7 | $ 9.4 | |
Ocean Transportation | |||||
Financial information for equity method investment | |||||
Company Share of Net Income | 3.7 | 0.9 | 7.7 | 9.4 | |
SSAT | |||||
Investments in affiliates | |||||
Increase in investment in SSAT | 2.2 | ||||
Investment in Terminal Joint Venture | 77.5 | 77.5 | $ 76.2 | ||
Financial information for equity method investment | |||||
Operating revenue | 243.3 | 268.8 | 522.2 | 536.9 | |
Operating costs and expenses | (229.9) | (265) | (495.3) | (509.2) | |
Operating Income | 13.4 | 3.8 | 26.9 | 27.7 | |
Net Income | $ 12.3 | $ 4.2 | $ 25.3 | $ 26.8 |
SIGNIFICANT ACCOUNTING POLICI_7
SIGNIFICANT ACCOUNTING POLICIES - DEFERRED LOAN, DIVIDENDS AND OTHER (Details) - USD ($) $ / shares in Units, $ in Millions | Jun. 25, 2020 | Jun. 04, 2020 | Jun. 30, 2020 | Mar. 31, 2020 | Jun. 30, 2019 | Mar. 31, 2019 | Jun. 30, 2020 | Dec. 31, 2019 |
Dividends | ||||||||
Dividends (per share) | $ 0.22 | $ 0.23 | $ 0.22 | $ 0.22 | $ 0.21 | |||
Cash dividends declared per share (in dollars per share) | $ 0.23 | |||||||
Debt Issuance Costs | ||||||||
Deferred loan fees related to revolving credit facility | $ 2.8 | $ 2.8 | $ 1.3 | |||||
Capitalized Computer Software Costs | ||||||||
Capitalized software costs | $ 1.3 |
REPORTABLE SEGMENTS (Details)
REPORTABLE SEGMENTS (Details) $ in Millions | 3 Months Ended | 6 Months Ended | ||||
Jun. 30, 2020USD ($) | Mar. 31, 2020USD ($) | Jun. 30, 2019USD ($) | Mar. 31, 2019USD ($) | Jun. 30, 2020USD ($)segment | Jun. 30, 2019USD ($)segment | |
Segment results | ||||||
Number of reportable segments | segment | 2 | 2 | ||||
Total Operating Revenue | $ 524.1 | $ 557.9 | $ 1,038 | $ 1,090.3 | ||
Total Operating Income | 51.2 | 31 | 64.2 | 48.5 | ||
Interest expense, net | (8.2) | (6.1) | (16.8) | (10.7) | ||
Other income (expense), net | 1.5 | 0.8 | 2.1 | 1.4 | ||
Income before Income Taxes | 44.5 | 25.7 | 49.5 | 39.2 | ||
Income tax expense | (11.7) | (7.3) | (12.9) | (8.3) | ||
Net Income | 32.8 | $ 3.8 | 18.4 | $ 12.5 | 36.6 | 30.9 |
Income from SSAT | 3.7 | 0.9 | 7.7 | 9.4 | ||
Operating segments | ||||||
Segment results | ||||||
Total Operating Revenue | 524.1 | 557.9 | 1,038 | 1,090.3 | ||
Total Operating Income | 51.2 | 31 | 64.2 | 48.5 | ||
Intersegment Eliminations | ||||||
Segment results | ||||||
Total Operating Revenue | 24.2 | 25.3 | 43.6 | 47.1 | ||
Ocean Transportation | ||||||
Segment results | ||||||
Total Operating Revenue | 410.8 | 415.4 | ||||
Income from SSAT | 3.7 | 0.9 | 7.7 | 9.4 | ||
Ocean Transportation | Operating segments | ||||||
Segment results | ||||||
Total Operating Revenue | 410.8 | 415.4 | 811.7 | 813.3 | ||
Total Operating Income | 42.3 | 19.7 | 50.2 | 29.1 | ||
Ocean Transportation | Intersegment Eliminations | ||||||
Segment results | ||||||
Total Operating Revenue | 11.9 | 13.8 | 21.3 | 25.2 | ||
Logistics | ||||||
Segment results | ||||||
Total Operating Revenue | 113.3 | 142.5 | ||||
Logistics | Operating segments | ||||||
Segment results | ||||||
Total Operating Revenue | 113.3 | 142.5 | 226.3 | 277 | ||
Total Operating Income | 8.9 | 11.3 | 14 | 19.4 | ||
Logistics | Intersegment Eliminations | ||||||
Segment results | ||||||
Total Operating Revenue | $ 12.3 | $ 11.5 | $ 22.3 | $ 21.9 |
PROPERTY AND EQUIPMENT (Details
PROPERTY AND EQUIPMENT (Details) - USD ($) $ in Millions | 6 Months Ended | 12 Months Ended |
Jun. 30, 2020 | Dec. 31, 2019 | |
Property and equipment | ||
Cost | $ 2,756.1 | $ 2,836.7 |
Less: Accumulated Depreciation | (1,177.7) | (1,238.6) |
Property and equipment, net | 1,578.4 | 1,598.1 |
Vessels | ||
Property and equipment | ||
Cost | 1,898.2 | 1,653.5 |
Capitalized Interest | ||
Interest Costs Capitalized | 16.5 | |
Transfer amount to Property and Equipment | 308.2 | |
Containers and equipment | ||
Property and equipment | ||
Cost | 525.2 | 544.5 |
Terminal facilities and other property | ||
Property and equipment | ||
Cost | 114.7 | 114.4 |
Vessel construction in progress | ||
Property and equipment | ||
Cost | 190.6 | 488.9 |
Capitalized Interest | ||
Interest Costs Capitalized | 9.1 | 22 |
Other construction in progress | ||
Property and equipment | ||
Cost | $ 27.4 | $ 35.4 |
GOODWILL AND INTANGIBLES ASSE_3
GOODWILL AND INTANGIBLES ASSETS - CHANGES IN GOODWILL (Details) - USD ($) $ in Millions | Jun. 30, 2020 | Dec. 31, 2019 |
Goodwill [Line Items] | ||
Goodwill | $ 327.8 | $ 327.8 |
Ocean Transportation | ||
Goodwill [Line Items] | ||
Goodwill | 222.6 | |
Logistics | ||
Goodwill [Line Items] | ||
Goodwill | $ 105.2 |
GOODWILL AND INTANGIBLES - INTA
GOODWILL AND INTANGIBLES - INTANGIBLE ASSETS NET (Details) - USD ($) $ in Millions | Jun. 30, 2020 | Dec. 31, 2019 |
Finite-lived Intangible Assets | ||
Net Amount | $ 197.5 | $ 202.9 |
Trade Names | ||
Finite-lived Intangible Assets | ||
Indefinite-Lived intangible asset | 27.3 | 27.3 |
Customer Relationships. | ||
Finite-lived Intangible Assets | ||
Total | 230.7 | 230.7 |
Less: Accumulated Amortization | (60.5) | (55.1) |
Net Amount | 170.2 | 175.6 |
Ocean Transportation | Customer Relationships. | ||
Finite-lived Intangible Assets | ||
Total | 140.6 | 140.6 |
Logistics | Customer Relationships. | ||
Finite-lived Intangible Assets | ||
Total | $ 90.1 | $ 90.1 |
DEBT - SUMMARY (Details)
DEBT - SUMMARY (Details) - USD ($) $ in Millions | 6 Months Ended | |
Jun. 30, 2020 | Dec. 31, 2019 | |
Debt | ||
Total Debt | $ 890 | $ 958.4 |
Less current portion | (50.5) | (48.4) |
Total Long-term Debt | 839.5 | 910 |
Less: Deferred loan fees | (16) | |
Total Long-term Debt, net of deferred loan fees | $ 823.5 | 910 |
5.79%, payable through 2020 | ||
Debt | ||
Total Debt | $ 3.5 | |
Interest rate (as a percent) | 5.79% | 5.79% |
3.66%, payable through 2023 | ||
Debt | ||
Total Debt | $ 27.4 | $ 31.9 |
Interest rate (as a percent) | 3.66% | 3.66% |
4.16%, payable through 2027 | ||
Debt | ||
Total Debt | $ 36.7 | $ 39.3 |
Interest rate (as a percent) | 4.16% | 4.16% |
3.37 %, payable through 2027 | ||
Debt | ||
Total Debt | $ 75 | $ 75 |
Interest rate (as a percent) | 3.37% | 3.37% |
3.14%, payable through 2031 | ||
Debt | ||
Total Debt | $ 178.8 | $ 188 |
Interest rate (as a percent) | 3.14% | 3.14% |
4.31%, payable through 2032 | ||
Debt | ||
Total Debt | $ 29 | $ 30.3 |
Interest rate (as a percent) | 4.31% | 4.31% |
4.35%, payable through 2044 | ||
Debt | ||
Total Debt | $ 100 | |
Interest rate (as a percent) | 4.35% | 4.35% |
3.92%, payable through 2045 | ||
Debt | ||
Total Debt | $ 69.5 | |
Interest rate (as a percent) | 3.92% | 3.92% |
5.34%, payable through 2028 | ||
Debt | ||
Total Debt | $ 18.7 | $ 19.8 |
Interest rate (as a percent) | 5.34% | 5.34% |
5.27%, payable through 2029 | ||
Debt | ||
Total Debt | $ 20.9 | $ 22 |
Interest rate (as a percent) | 5.27% | 5.27% |
1.22 %, payable through 2043 | ||
Debt | ||
Total Debt | $ 185.9 | |
Interest rate (as a percent) | 1.22% | |
1.35 %, payable through 2044 | ||
Debt | ||
Total Debt | $ 139.6 | |
Interest rate (as a percent) | 1.35% | |
Revolving Credit Facility | ||
Debt | ||
Total Debt | $ 178 | $ 379.1 |
Funds available under the revolving credit facility | $ 433.2 | |
Interest rate during period (as a percent) | 3.25% |
DEBT - DESCRIPTION (Details)
DEBT - DESCRIPTION (Details) - USD ($) $ in Millions | Jun. 22, 2020 | May 12, 2020 | Apr. 27, 2020 | Jun. 30, 2020 | Dec. 31, 2019 |
Debt | |||||
Payment of debt financing costs | $ 18.5 | ||||
Proceeds from issuance of debt | $ 325.5 | ||||
Revolving Credit Facility | |||||
Debt | |||||
Interest rate during period (as a percent) | 3.25% | ||||
Unused portion of credit facility | $ 433.2 | ||||
Standby and commercial letters of credit | |||||
Debt | |||||
Standby letters of credit | $ 8.1 | ||||
Private Placement Term Loans | |||||
Debt | |||||
Repayment of debt | $ 169.5 | ||||
5.34%, payable through 2028 | |||||
Debt | |||||
Interest rate (as a percent) | 5.34% | 5.34% | |||
5.79%, payable through 2020 | |||||
Debt | |||||
Interest rate (as a percent) | 5.79% | 5.79% | |||
5.27%, payable through 2029 | |||||
Debt | |||||
Interest rate (as a percent) | 5.27% | 5.27% | |||
4.35%, payable through 2044 | |||||
Debt | |||||
Interest rate (as a percent) | 4.35% | 4.35% | |||
Title XI Notes | MatNav | |||||
Debt | |||||
Debt issued | $ 139.6 | $ 185.9 | |||
Interest rate (as a percent) | 1.35% | 1.22% | |||
Annual principal payments | $ 3 | $ 4 | |||
Payment of debt financing costs | 6.7 | 8.7 | |||
Proceeds from issuance of debt | $ 132.9 | $ 177 |
DEBT - REVOLVING CREDIT FACILIT
DEBT - REVOLVING CREDIT FACILITY (Details) - USD ($) $ in Millions | Jun. 22, 2020 | Apr. 27, 2020 | Jun. 30, 2020 |
Debt | |||
Payment of debt financing costs | $ 18.5 | ||
Revolving Credit Facility | |||
Debt | |||
Funds available under the revolving credit facility | $ 433.2 | ||
Interest rate during period (as a percent) | 3.25% | ||
Standby and commercial letters of credit | |||
Debt | |||
Standby letters of credit | $ 8.1 | ||
MatNav | Title XI Notes | |||
Debt | |||
Payment of debt financing costs | $ 6.7 | $ 8.7 | |
Debt issued | $ 139.6 | $ 185.9 | |
Interest rate (as a percent) | 1.35% | 1.22% | |
Annual principal payments | $ 3 | $ 4 |
DEBT - MATURITIES (Details)
DEBT - MATURITIES (Details) - USD ($) $ in Millions | Jun. 30, 2020 | Dec. 31, 2019 |
Debt maturities | ||
Remainder of 2020 | $ 23.7 | |
2021 | 59.2 | |
2022 | 243 | |
2023 | 60.4 | |
2024 | 51.7 | |
Thereafter | 452 | |
Total Debt | $ 890 | $ 958.4 |
DEBT - DEFERRED LOAN FEES (Deta
DEBT - DEFERRED LOAN FEES (Details) $ in Millions | 6 Months Ended |
Jun. 30, 2020USD ($) | |
DEBT | |
Deferred financing costs related to Title XI bonds and private placement debt amendments | $ 16.5 |
Deferred fees expensed related to the paydown of private placement debt | (0.3) |
Amortization expense | (0.2) |
Ending Balance | $ 16 |
DEBT - AMORTIZATION EXPENSE (De
DEBT - AMORTIZATION EXPENSE (Details) $ in Millions | Jun. 30, 2020USD ($) |
DEBT | |
Remainder of 2020 | $ 0.8 |
2021 | 1.5 |
2022 | 1.2 |
2023 | 1.1 |
2024 | 1.1 |
Thereafter | 10.3 |
Total amortization expense of deferred loan fees | $ 16 |
LEASE - COMPONENTS OF LEASE COS
LEASE - COMPONENTS OF LEASE COST (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2020 | Jun. 30, 2019 | Jun. 30, 2020 | Jun. 30, 2019 | |
Lease Cost | ||||
Operating lease cost | $ 20.5 | $ 16.8 | $ 40.5 | $ 33.5 |
Short-term lease cost | 2.4 | 2.5 | 2.5 | 4.9 |
Variable lease cost | 0.2 | 0.1 | 0.4 | 0.2 |
Total lease cost | $ 23.1 | $ 19.4 | $ 43.4 | $ 38.6 |
LEASE - SALE AND LEASEBACK OF E
LEASE - SALE AND LEASEBACK OF EQUIPMENT (Details) $ in Millions | Mar. 25, 2020USD ($) | Jun. 30, 2020item | Jun. 30, 2020item |
Sale Leaseback Transaction [Line Items] | |||
Number of sale leaseback transactions | item | 0 | 0 | |
Multiple Tranches of Chassis and Container Equipment | |||
Sale Leaseback Transaction [Line Items] | |||
Net proceeds | $ | $ 14.3 | ||
Base term | 5 years |
ACCUMULATED OTHER COMPREHENSI_3
ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS) (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||||
Jun. 30, 2020 | Mar. 31, 2020 | Jun. 30, 2019 | Mar. 31, 2019 | Jun. 30, 2020 | Jun. 30, 2019 | |
Changes in accumulated other comprehensive loss by component, net of taxes | ||||||
Balance at the beginning of the period | $ 800.2 | $ 805.7 | $ 763 | $ 755.3 | $ 805.7 | $ 755.3 |
Amortization of prior service cost | (1.1) | (1.2) | (2.3) | (2.3) | ||
Amortization of net loss | 1.3 | 0.9 | 2.6 | 1.8 | ||
Other adjustments | (0.1) | (0.2) | (0.8) | (0.2) | ||
Balance at the end of the period | 815.5 | 800.2 | 765.2 | 763 | 815.5 | 765.2 |
Pensions | ||||||
Changes in accumulated other comprehensive loss by component, net of taxes | ||||||
Balance at the beginning of the period | (51.3) | (51.9) | (55.5) | (55.8) | (51.9) | (55.8) |
Amortization of prior service cost | (0.4) | (0.5) | (0.5) | (0.4) | ||
Amortization of net loss | 1.1 | 1.1 | 0.7 | 0.7 | ||
Balance at the end of the period | (50.6) | (51.3) | (55.3) | (55.5) | (50.6) | (55.3) |
Post Retirement | ||||||
Changes in accumulated other comprehensive loss by component, net of taxes | ||||||
Balance at the beginning of the period | 15.8 | 16.3 | 21.2 | 21.7 | 16.3 | 21.7 |
Amortization of prior service cost | (0.7) | (0.6) | (0.7) | (0.7) | ||
Amortization of net loss | 0.1 | 0.1 | 0.1 | 0.2 | ||
Balance at the end of the period | 15.2 | 15.8 | 20.6 | 21.2 | 15.2 | 20.6 |
Non-Qualified Plans | ||||||
Changes in accumulated other comprehensive loss by component, net of taxes | ||||||
Balance at the beginning of the period | (0.4) | (0.4) | (0.1) | (0.1) | (0.4) | (0.1) |
Amortization of prior service cost | (0.1) | (0.1) | ||||
Amortization of net loss | 0.1 | 0.1 | 0.1 | |||
Balance at the end of the period | (0.3) | (0.4) | (0.1) | (0.1) | (0.3) | (0.1) |
Other | ||||||
Changes in accumulated other comprehensive loss by component, net of taxes | ||||||
Balance at the beginning of the period | (1.6) | (0.9) | (0.3) | (0.3) | (0.9) | (0.3) |
Amortization of prior service cost | 0.1 | |||||
Foreign currency exchange | 0.3 | (0.5) | ||||
Other adjustments | (0.4) | (0.2) | (0.2) | |||
Balance at the end of the period | (1.7) | (1.6) | (0.4) | (0.3) | (1.7) | (0.4) |
Accumulated Other Comprehensive Income (Loss) | ||||||
Changes in accumulated other comprehensive loss by component, net of taxes | ||||||
Balance at the beginning of the period | (37.5) | (36.9) | (34.7) | (34.5) | (36.9) | (34.5) |
Amortization of prior service cost | (1.1) | (1.2) | (1.2) | (1.1) | ||
Amortization of net loss | 1.3 | 1.3 | 0.9 | 0.9 | ||
Foreign currency exchange | 0.3 | (0.5) | ||||
Other adjustments | (0.4) | (0.2) | (0.2) | |||
Balance at the end of the period | $ (37.4) | $ (37.5) | $ (35.2) | $ (34.7) | $ (37.4) | $ (35.2) |
FAIR VALUE OF FINANCIAL INSTR_3
FAIR VALUE OF FINANCIAL INSTRUMENTS (Details) - USD ($) $ in Millions | Jun. 30, 2020 | Dec. 31, 2019 | Jun. 30, 2019 |
Fair value of financial instruments | |||
Restricted Cash | $ 3 | $ 8.7 | |
Carrying value | |||
Fair value of financial instruments | |||
Cash and cash equivalents | 19.5 | $ 21.2 | |
Restricted Cash | 3 | 7.2 | |
Variable rate debt | 178 | 379.1 | |
Fixed rate debt | 712 | 579.3 | |
Fair Value Measurement | |||
Fair value of financial instruments | |||
Cash and cash equivalents | 19.5 | 21.2 | |
Restricted Cash | 3 | 7.2 | |
Variable rate debt | 178 | 379.1 | |
Fixed rate debt | 708.9 | 585.9 | |
Fair Value Measurement | Quoted Prices in Active Markets (Level 1) | |||
Fair value of financial instruments | |||
Cash and cash equivalents | 19.5 | 21.2 | |
Restricted Cash | 3 | 7.2 | |
Fair Value Measurement | Significant Observable Inputs (Level 2) | |||
Fair value of financial instruments | |||
Variable rate debt | 178 | 379.1 | |
Fixed rate debt | $ 708.9 | $ 585.9 |
EARNINGS PER-SHARE (Details)
EARNINGS PER-SHARE (Details) - USD ($) $ / shares in Units, shares in Millions, $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2020 | Jun. 30, 2019 | Jun. 30, 2020 | Jun. 30, 2019 | |
Net Income | ||||
Net Income, Basic | $ 32.8 | $ 18.4 | $ 36.6 | $ 30.9 |
Net Income, Diluted | $ 32.8 | $ 18.4 | $ 36.6 | $ 30.9 |
Weighted Average Common Shares | ||||
Basic (in shares) | 43.1 | 42.8 | 43 | 42.8 |
Effect of Dilutive Securities (in shares) | 0.2 | 0.4 | 0.3 | 0.4 |
Diluted (in shares) | 43.3 | 43.2 | 43.3 | 43.2 |
Per Common Share Amount | ||||
Net income, Basic (in dollars per share) | $ 0.76 | $ 0.43 | $ 0.85 | $ 0.72 |
Net income, Diluted (in dollars per share) | $ 0.76 | $ 0.43 | $ 0.85 | $ 0.72 |
SHARE-BASED COMPENSATION (Detai
SHARE-BASED COMPENSATION (Details) - Time-based and performance-based shares - USD ($) $ / shares in Units, $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2020 | Jun. 30, 2019 | Jun. 30, 2020 | Jun. 30, 2019 | |
Share-based compensation | ||||
Shares granted | 22,000 | 338,200 | ||
Weighted-average grant date fair value (in dollars per share) | $ 27.30 | $ 38.64 | ||
Total unrecognized compensation cost | $ 17.5 | $ 17.5 | ||
Unrecognized compensation cost over weighted-average period to be recognized | 2 years | |||
Selling, general and administrative expenses | ||||
Share-based compensation | ||||
Total stock-based compensation cost | $ 3 | $ 3 | $ 6.1 | $ 6.2 |
PENSION AND POST-RETIREMENT P_3
PENSION AND POST-RETIREMENT PLANS - COMPONENTS OF NET PERIODIC BENEFIT COST (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2020 | Jun. 30, 2019 | Jun. 30, 2020 | Jun. 30, 2019 | |
Pension Benefits | ||||
Components of Net Periodic Benefit Cost (Benefit): | ||||
Service cost | $ 1.3 | $ 1.1 | $ 2.5 | $ 2.2 |
Interest cost | 1.9 | 2.3 | 3.8 | 4.6 |
Expected return on plan assets | (3.3) | (3.2) | (6.5) | (6.3) |
Amortization of net loss | 1.4 | 0.9 | 2.9 | 1.8 |
Amortization of prior service credit | (0.6) | (0.6) | (1.2) | (1.2) |
Net periodic benefit cost (benefit) | 0.7 | 0.5 | 1.5 | 1.1 |
Post-retirement Benefits | ||||
Components of Net Periodic Benefit Cost (Benefit): | ||||
Service cost | 0.2 | 0.2 | 0.3 | 0.3 |
Interest cost | 0.2 | 0.3 | 0.4 | 0.6 |
Amortization of net loss | 0.1 | 0.2 | 0.3 | 0.4 |
Amortization of prior service credit | (0.9) | (1) | (1.8) | (1.9) |
Net periodic benefit cost (benefit) | $ (0.4) | $ (0.3) | $ (0.8) | $ (0.6) |