Document and Entity Information
Document and Entity Information | 9 Months Ended |
Sep. 30, 2021shares | |
Cover [Abstract] | |
Document Type | 10-Q |
Document Quarterly Report | true |
Document Transition Report | false |
Document Period End Date | Sep. 30, 2021 |
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 | 42,031,967 |
Current Fiscal Year End Date | --12-31 |
Document Fiscal Year Focus | 2021 |
Document Fiscal Period Focus | Q3 |
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 | 9 Months Ended | ||
Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | |
Operating Revenue: | ||||
Total Operating Revenue | $ 1,071.6 | $ 645.2 | $ 2,658.3 | $ 1,683.2 |
Costs and Expenses: | ||||
Operating costs | (649.3) | (495.8) | (1,809.6) | (1,370.4) |
Income from SSAT | 13 | 7.7 | 35 | 15.4 |
Selling, general and administrative | (57.4) | (58.7) | (171.7) | (165.6) |
Total Costs and Expenses | (693.7) | (546.8) | (1,946.3) | (1,520.6) |
Operating Income | 377.9 | 98.4 | 712 | 162.6 |
Interest expense | (5.1) | (5.7) | (17.9) | (22.5) |
Other income (expense), net | 1.8 | 2.4 | 4.7 | 4.5 |
Income before Income Taxes | 374.6 | 95.1 | 698.8 | 144.6 |
Income taxes | (91.4) | (24.2) | (165.9) | (37.1) |
Net Income | 283.2 | 70.9 | 532.9 | 107.5 |
Other Comprehensive Income (Loss), Net of Income Taxes: | ||||
Net Income | 283.2 | 70.9 | 532.9 | 107.5 |
Other Comprehensive Income (Loss): | ||||
Amortization of prior service cost | (1.1) | (1.2) | (3.4) | (3.5) |
Amortization of net loss (gain) | 1 | 0.5 | 3.5 | 3.1 |
Other adjustments | (0.1) | 0.2 | (0.2) | (0.6) |
Total Other Comprehensive Income (Loss) | (0.2) | (0.5) | (0.1) | (1) |
Comprehensive Income | $ 283 | $ 70.4 | $ 532.8 | $ 106.5 |
Basic Earnings Per Share (in dollars per share) | $ 6.60 | $ 1.65 | $ 12.31 | $ 2.50 |
Diluted Earnings Per Share (in dollars per share) | $ 6.53 | $ 1.63 | $ 12.19 | $ 2.48 |
Weighted Average Number of Shares Outstanding: | ||||
Basic | 42.9 | 43.1 | 43.3 | 43 |
Diluted | 43.4 | 43.5 | 43.7 | 43.4 |
Ocean Transportation Services | ||||
Operating Revenue: | ||||
Total Operating Revenue | $ 863.5 | $ 498.3 | $ 2,106.9 | $ 1,310 |
Logistics Services | ||||
Operating Revenue: | ||||
Total Operating Revenue | $ 208.1 | $ 146.9 | $ 551.4 | $ 373.2 |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets - USD ($) $ in Millions | Sep. 30, 2021 | Dec. 31, 2020 |
Current Assets: | ||
Cash and cash equivalents | $ 75.9 | $ 14.4 |
Accounts receivable, net of allowance for credit loss of $9.0 million and $6.3 million, respectively | 328.6 | 253.4 |
Prepaid expenses and other assets | 77.2 | 38.1 |
Total current assets | 481.7 | 305.9 |
Long-term Assets: | ||
Investment in SSAT | 37.2 | 48.7 |
Property and equipment, net | 1,826.8 | 1,689.9 |
Operating lease right of use assets | 264 | 251.4 |
Goodwill | 327.8 | 327.8 |
Intangible assets, net | 183.8 | 192 |
Deferred dry-docking costs, net | 63.1 | 51.9 |
Other long-term assets | 38.4 | 33 |
Total long-term assets | 2,741.1 | 2,594.7 |
Total Assets | 3,222.8 | 2,900.6 |
Current Liabilities: | ||
Current portion of debt | 65 | 59.2 |
Accounts payable and accruals | 299 | 283.1 |
Operating lease liabilities | 86.9 | 72.4 |
Other liabilities | 96.4 | 96.8 |
Total current liabilities | 547.3 | 511.5 |
Long-term Liabilities: | ||
Long-term debt, net of deferred loan fees | 567.5 | 685.6 |
Long-term operating lease liabilities | 185.8 | 186.9 |
Deferred income taxes | 420 | 389.6 |
Other long-term liabilities | 157.4 | 165.8 |
Total long-term liabilities | 1,330.7 | 1,427.9 |
Commitments and Contingencies | ||
Shareholders' Equity: | ||
Common stock | 31.5 | 32.4 |
Additional paid in capital | 313.9 | 321.5 |
Accumulated other comprehensive loss, net | (50.9) | (50.8) |
Retained earnings | 1,050.3 | 658.1 |
Total shareholders' equity | 1,344.8 | 961.2 |
Total Liabilities and Shareholders' Equity | $ 3,222.8 | $ 2,900.6 |
Condensed Consolidated Balanc_2
Condensed Consolidated Balance Sheets (Parenthetical) - USD ($) $ in Millions | Sep. 30, 2021 | Dec. 31, 2020 |
Condensed Consolidated Balance Sheets | ||
Accounts receivable, allowance for credit loss | $ 9 | $ 6.3 |
Condensed Consolidated Statem_2
Condensed Consolidated Statements of Cash Flows - USD ($) $ in Millions | 9 Months Ended | |
Sep. 30, 2021 | Sep. 30, 2020 | |
Cash Flows From Operating Activities: | ||
Net income | $ 532.9 | $ 107.5 |
Reconciling adjustments: | ||
Depreciation and amortization | 100.9 | 84.5 |
Amortization of operating lease right of use assets | 73.9 | 53.1 |
Deferred income taxes | 30.3 | 33.5 |
Share-based compensation expense | 14.2 | 12 |
Income from SSAT | (35) | (15.4) |
Distribution from SSAT | 46.9 | 37.9 |
Other | (1.1) | 0.5 |
Changes in assets and liabilities: | ||
Accounts receivable, net | (75.2) | (28.9) |
Deferred dry-docking payments | (25.8) | (11.1) |
Deferred dry-docking amortization | 18 | 17.8 |
Prepaid expenses and other assets | (46.7) | 19.6 |
Accounts payable, accruals and other liabilities | 30.2 | 24 |
Operating lease liabilities | (72.1) | (53.7) |
Other long-term liabilities | (8.1) | (10.5) |
Net cash provided by operating activities | 583.3 | 270.8 |
Cash Flows From Investing Activities: | ||
Capitalized vessel construction expenditures | (57.8) | |
Other capital expenditures | (244.7) | (53.5) |
Proceeds from disposal of property and equipment | 2.2 | 15.7 |
Cash deposits into Capital Construction Fund | (31.2) | (97.1) |
Withdrawals from Capital Construction Fund | 31.2 | 97.1 |
Net cash used in investing activities | (242.5) | (95.6) |
Cash Flows From Financing Activities: | ||
Proceeds from issuance of debt | 325.5 | |
Repayments of debt | (41.1) | (204.2) |
Proceeds from revolving credit facility | 304.3 | 547.4 |
Repayments of revolving credit facility | (376.1) | (803.5) |
Payment of financing costs | (3) | (18.5) |
Proceeds from issuance of capital stock | 0.1 | |
Dividends paid | (33.3) | (29.1) |
Repurchase of Matson common stock | (115.7) | |
Tax withholding related to net share settlements of restricted stock units | (14.4) | (5.6) |
Net cash used in financing activities | (279.3) | (187.9) |
Net Increase (Decrease) in Cash, Cash Equivalents and Restricted Cash | 61.5 | (12.7) |
Cash, Cash Equivalents and Restricted Cash, Beginning of the Period | 19.7 | 28.4 |
Cash, Cash Equivalents and Restricted Cash, End of the Period | 81.2 | 15.7 |
Reconciliation of Cash, Cash Equivalents, and Restricted Cash, at End of the Period: | ||
Cash and Cash Equivalents | 75.9 | 12.7 |
Restricted Cash | 5.3 | 3 |
Total Cash, Cash Equivalents and Restricted Cash, End of the Period | 81.2 | 15.7 |
Supplemental Cash Flow Information: | ||
Interest paid, net of capitalized interest | 15.3 | 22.4 |
Income tax payments and (refunds), net | 162.1 | (18) |
Non-cash Information: | ||
Capital expenditures included in accounts payable, accruals and other liabilities | $ 5.6 | $ 5.9 |
Condensed Consolidated Statem_3
Condensed Consolidated Statements of Shareholders' 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, 2019 | $ 32.2 | $ 306.2 | $ (36.9) | $ 504.2 | $ 805.7 |
Balance (in shares) at Dec. 31, 2019 | 42.9 | ||||
Increase (Decrease) in Shareholders' 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 Shareholders' Equity | |||||
Net income | 107.5 | ||||
Other comprehensive income (loss), net of tax | (1) | ||||
Balance at the end of the period at Sep. 30, 2020 | $ 32.3 | 312.6 | (37.9) | 584.8 | 891.8 |
Balance (in shares) at Sep. 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 Shareholders' 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 | ||||
Increase (Decrease) in Shareholders' Equity | |||||
Net income | 70.9 | 70.9 | |||
Other comprehensive income (loss), net of tax | (0.5) | (0.5) | |||
Share-based compensation | 6 | 6 | |||
Shares issued, net of shares withheld for employee taxes | (0.1) | (0.1) | |||
Balance at the end of the period at Sep. 30, 2020 | $ 32.3 | 312.6 | (37.9) | 584.8 | 891.8 |
Balance (in shares) at Sep. 30, 2020 | 43.1 | ||||
Balance at the beginning of the period at Dec. 31, 2020 | $ 32.4 | 321.5 | (50.8) | 658.1 | 961.2 |
Balance (in shares) at Dec. 31, 2020 | 43.2 | ||||
Increase (Decrease) in Shareholders' Equity | |||||
Net income | 87.2 | 87.2 | |||
Other comprehensive income (loss), net of tax | (0.1) | (0.1) | |||
Share-based compensation | 4.8 | 4.8 | |||
Shares issued, net of shares withheld for employee taxes | $ 0.2 | (14.3) | (14.1) | ||
Shares issued, net of shares withheld for employee taxes (in shares) | 0.2 | ||||
Dividends | (10.1) | (10.1) | |||
Balance at the end of the period at Mar. 31, 2021 | $ 32.6 | 312 | (50.9) | 735.2 | 1,028.9 |
Balance (in shares) at Mar. 31, 2021 | 43.4 | ||||
Balance at the beginning of the period at Dec. 31, 2020 | $ 32.4 | 321.5 | (50.8) | 658.1 | 961.2 |
Balance (in shares) at Dec. 31, 2020 | 43.2 | ||||
Increase (Decrease) in Shareholders' Equity | |||||
Net income | 532.9 | ||||
Other comprehensive income (loss), net of tax | (0.1) | ||||
Balance at the end of the period at Sep. 30, 2021 | $ 31.5 | 313.9 | (50.9) | 1,050.3 | 1,344.8 |
Balance (in shares) at Sep. 30, 2021 | 42 | ||||
Balance at the beginning of the period at Mar. 31, 2021 | $ 32.6 | 312 | (50.9) | 735.2 | 1,028.9 |
Balance (in shares) at Mar. 31, 2021 | 43.4 | ||||
Increase (Decrease) in Shareholders' Equity | |||||
Net income | 162.5 | 162.5 | |||
Other comprehensive income (loss), net of tax | 0.2 | 0.2 | |||
Share-based compensation | 4.7 | 4.7 | |||
Shares issued, net of shares withheld for employee taxes | (0.2) | (0.2) | |||
Shares issued, net of shares withheld for employee taxes (in shares) | 0.1 | ||||
Dividends | (23.3) | (23.3) | |||
Balance at the end of the period at Jun. 30, 2021 | $ 32.6 | 316.5 | (50.7) | 874.4 | 1,172.8 |
Balance (in shares) at Jun. 30, 2021 | 43.5 | ||||
Increase (Decrease) in Shareholders' Equity | |||||
Net income | 283.2 | 283.2 | |||
Other comprehensive income (loss), net of tax | (0.2) | (0.2) | |||
Share-based compensation | 4.7 | 4.7 | |||
Shares issued, net of shares withheld for employee taxes | (0.1) | 0.1 | |||
Shares repurchased | $ (1.1) | (7.2) | (107.4) | (115.7) | |
Shares repurchased (in shares) | (1.5) | ||||
Balance at the end of the period at Sep. 30, 2021 | $ 31.5 | $ 313.9 | $ (50.9) | $ 1,050.3 | $ 1,344.8 |
Balance (in shares) at Sep. 30, 2021 | 42 |
Condensed Consolidated Statem_4
Condensed Consolidated Statements of Shareholders' Equity (Parenthetical) - $ / shares | Sep. 02, 2021 | Jun. 30, 2021 | Mar. 31, 2021 | Jun. 30, 2020 | Mar. 31, 2020 |
Condensed Consolidated Statement of Shareholders' Equity | |||||
Dividends (per share) | $ 0.30 | $ 0.30 | $ 0.23 | $ 0.23 | $ 0.22 |
DESCRIPTION OF THE BUSINESS
DESCRIPTION OF THE BUSINESS | 9 Months Ended |
Sep. 30, 2021 | |
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 premium, expedited services from China to Long Beach, California, and provides services to Okinawa, Japan and various islands in the South Pacific, and operates an international export service from Dutch Harbor to Asia. In addition, subsidiaries of MatNav provide 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 currently 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. Matson Logistics, established in 1987, extends the geographic reach of Matson’s transportation network throughout North America, and 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 | 9 Months Ended |
Sep. 30, 2021 | |
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, 2020, filed with the Securities and Exchange Commission (“SEC”) on February 26, 2021. Fiscal Period: The period end for Matson covered by this report is September 30, 2021. The period end for MatNav and its subsidiaries covered by this report occurred on the last Friday in September, or September 24, 2021. 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, 2020. 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; insurance reserves and other 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. Recognition of Revenues and 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 Nine Months Ended September 30, September 30, Ocean Transportation (in millions) (1) 2021 2020 2021 2020 Ocean Transportation services $ 855.2 $ 490.8 $ 2,083.8 $ 1,284.5 Terminal and other related services 4.8 5.1 12.5 15.5 Fuel sales 1.9 1.3 5.1 6.0 Vessel management and related services 1.6 1.1 5.5 4.0 Total $ 863.5 $ 498.3 $ 2,106.9 $ 1,310.0 (1) Ocean Transportation revenue transactions are primarily denominated in U.S. dollars except for less than 3 percent of Ocean Transportation services revenue 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 selling, 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 Nine Months Ended September 30, September 30, Logistics (in millions) (1) 2021 2020 2021 2020 Transportation Brokerage and Freight Forwarding services $ 186.1 $ 133.0 $ 495.9 $ 337.0 Warehouse and distribution services 12.2 9.5 31.8 25.9 Supply chain management and other services 9.8 4.4 23.7 10.3 Total $ 208.1 $ 146.9 $ 551.4 $ 373.2 (1) Logistics revenue transactions are primarily denominated in U.S. dollars except for less than 5 percent of transportation brokerage and freight forwarding services revenue, and supply chain management and other services revenue categories which are denominated in foreign currencies. ◾ 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, agent commissions, 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, agent commissions, 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: 31, 2020. million of eligible accounts receivable was assigned to the CCF, respectively. 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 nine months ended September 30, 2021, the Company deposited million from the CCF. The Company made withdrawals 30, 2021. The balance of cash on deposit at September 30, 2021 and December 31, 2020 was nominal. Investment in SSAT: Condensed income statement information for SSAT for the three and nine months ended September 30, 2021 and 2020 consisted of the following: Three Months Ended Nine Months Ended September 30, September 30, (In millions) 2021 2020 2021 2020 Operating revenue $ 316.3 $ 273.9 $ 944.6 $ 796.1 Operating costs and expenses (274.2) (243.1) (831.3) (738.4) Operating income 42.1 30.8 113.3 57.7 Net Income (1) $ 37.3 $ 26.2 $ 100.5 $ 51.5 Company Share of SSAT’s Net Income (2) $ 13.0 $ 7.7 $ 35.0 $ 15.4 (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 $37.2 million and $48.7 million at September 30, 2021 and December 31, 2020, 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 third quarter 2021 cash dividend of $0.30 2, 2021. On October 28, 2021, the Company’s Board of Directors declared a cash dividend of $0.30 per share payable on December 2, 2021. |
REPORTABLE SEGMENTS
REPORTABLE SEGMENTS | 9 Months Ended |
Sep. 30, 2021 | |
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. 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 $57.8 million and $40.2 million for the three months ended September 30, 2021 and 2020, and $140.5 million and $83.8 million for the nine months ended September 30, 2021 and 2020, respectively, have been eliminated from operating revenues in the table below. Reportable segment financial information for the three and nine months ended September 30, 2021 and 2020 are as follows: Three Months Ended Nine Months Ended September 30, September 30, (In millions) 2021 2020 2021 2020 Operating Revenue: Ocean Transportation (1) $ 863.5 $ 498.3 $ 2,106.9 $ 1,310.0 Logistics (2) 208.1 146.9 551.4 373.2 Total Operating Revenue $ 1,071.6 $ 645.2 $ 2,658.3 $ 1,683.2 Operating Income: Ocean Transportation (3) $ 361.9 $ 86.5 $ 677.0 $ 136.7 Logistics 16.0 11.9 35.0 25.9 Total Operating Income 377.9 98.4 712.0 162.6 Interest expense, net (5.1) (5.7) (17.9) (22.5) Other income (expense), net 1.8 2.4 4.7 4.5 Income before Income Taxes 374.6 95.1 698.8 144.6 Income taxes (91.4) (24.2) (165.9) (37.1) Net Income $ 283.2 $ 70.9 $ 532.9 $ 107.5 (1) Ocean Transportation operating revenue excludes inter-segment revenue of $21.8 million and $22.4 million for the three months ended September 30, 2021 and 2020, and $55.6 million and $43.7 million for the nine months ended September 30, 2021 and 2020, respectively. (2) Logistics operating revenue excludes inter-segment revenue of $36.0 million and $17.8 million for the three months ended September 30, 2021 and 2020, and $84.9 million and $40.1 million for the nine months ended September 30, 2021 and 2020, respectively. (3) Ocean Transportation segment information includes $13.0 million and $7.7 million of equity in income from the Company’s equity investment in SSAT for the three months ended September 30, 2021 and 2020, and $35.0 million and $15.4 million for the nine months ended September 30, 2021 and 2020, respectively. |
PROPERTY AND EQUIPMENT
PROPERTY AND EQUIPMENT | 9 Months Ended |
Sep. 30, 2021 | |
PROPERTY AND EQUIPMENT | |
PROPERTY AND EQUIPMENT | 4. PROPERTY AND EQUIPMENT Property and equipment as of September 30, 2021 and December 31, 2020 consisted of the following: September 30, December 31, (In millions) 2021 2020 Cost: Vessels $ 2,323.8 $ 2,191.6 Containers and equipment 611.7 572.3 Terminal facilities and other property 120.2 119.8 Construction in progress 52.7 28.6 Total Property and Equipment 3,108.4 2,912.3 Less: Accumulated Depreciation (1,281.6) (1,222.4) Total Property and Equipment, net $ 1,826.8 $ 1,689.9 |
GOODWILL AND INTANGIBLES
GOODWILL AND INTANGIBLES | 9 Months Ended |
Sep. 30, 2021 | |
GOODWILL AND INTANGIBLES | |
GOODWILL AND INTANGIBLES | 5. GOODWILL AND INTANGIBLES Goodwill by segment as of September 30, 2021 and December 31, 2020 consisted of the following: Ocean (In millions) Transportation Logistics Total Goodwill $ 222.6 $ 105.2 $ 327.8 Intangible assets as of September 30, 2021 and December 31, 2020 consisted of the following: September 30, December 31, (In millions) 2021 2020 Customer Relationships: Ocean Transportation $ 140.6 $ 140.6 Logistics 90.1 90.1 Total 230.7 230.7 Less: Accumulated Amortization (74.2) (66.0) Total Customer Relationships, net 156.5 164.7 Trade name – Logistics 27.3 27.3 Total Intangible Assets, net $ 183.8 $ 192.0 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 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 2020 annual impairment tests, the Company concluded that an impairment triggering event did not occur during the quarter ended September 30, 2021. 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 | 9 Months Ended |
Sep. 30, 2021 | |
DEBT | |
DEBT | 6. DEBT As of September 30, 2021 and December 31, 2020, the Company’s debt consisted of the following: September 30, December 31, (In millions) 2021 2020 Private Placement Term Loans: 3.66 %, payable through 2023 $ 18.2 $ 22.8 4.16 %, payable through 2027 31.4 34.0 3.37 %, payable through 2027 75.0 75.0 3.14 %, payable through 2031 151.2 169.6 4.31 %, payable through 2032 26.7 27.9 Title XI Debt: 5.34 %, payable through 2028 15.4 17.6 5.27 %, payable through 2029 17.6 19.8 1.22 %, payable through 2043 178.0 182.0 1.35 %, payable through 2044 133.7 139.6 Revolving credit facility, maturity date of March 31, 2026 — 71.8 Total Debt 647.2 760.1 Less: Current portion (65.0) (59.2) Total Long-term Debt 582.2 700.9 Less: Deferred loan fees (14.7) (15.3) Total Long-term Debt, net of deferred loan fees $ 567.5 $ 685.6 Except as described below, the Company’s debt is described in Note 8 to the Consolidated Financial Statements included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2020 and 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, 2021. Revolving Credit Facility: As of September 30, 2021, the Company had million of remaining borrowing availability under the revolving credit facility. 30, 2021. Although there were 30, 2021. 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. Debt Security and Guarantees: All of the debt of the Company and MatNav, including related guarantees, as of September 30, 2021 was unsecured, except for the Title XI debt. Debt Maturities: As of September 30, 2021, debt maturities during the next five years and thereafter are as follows: As of Year (in millions) September 30, 2021 Remainder of 2021 $ 18.1 2022 65.0 2023 60.4 2024 51.7 2025 51.7 Thereafter 400.3 Total Debt $ 647.2 |
LEASES
LEASES | 9 Months Ended |
Sep. 30, 2021 | |
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, 2020. 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 nine months ended September 30, 2021 and 2020 consisted of the following: Three Months Ended Nine Months Ended September 30, September 30, (In millions) 2021 2020 2021 2020 Operating lease cost $ 26.7 $ 20.0 $ 79.4 $ 60.5 Short-term lease cost 0.1 4.4 2.9 6.9 Variable lease cost 0.1 0.2 0.5 0.6 Total lease cost $ 26.9 $ 24.6 $ 82.8 $ 68.0 Sale and Leaseback of Equipment: 30, 2021. During the three months ended March 31, 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 no sale and leaseback transactions during the three months ended June 30, 2020 and September 30, 2020. Termination of Vessel Charter: On July 7, 2021, a wholly-owned subsidiary of the Company entered into an agreement to terminate a Bareboat Charter Agreement (the “Charter”) on the vessel, Maunalei, million thereby acquiring the vessel. The Company paid the termination payment with a combination of cash on hand and borrowing on the revolving credit facility. The Company derecognized the related right-of-use (“ROU”) asset of million, net. Concurrent with the termination of the Charter, the Company was released from obligations under a Guaranty related to the Charter. |
ACCUMULATED OTHER COMPREHENSIVE
ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS) | 9 Months Ended |
Sep. 30, 2021 | |
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 nine months ended September 30, 2021 consisted of the following: Accumulated Post- Non- Other Pension Retirement Qualified Comprehensive (In millions) Benefits Benefits Plans Other Income (Loss) Balance at December 31, 2020 $ (61.7) $ 12.2 $ (0.6) $ (0.7) $ (50.8) Amortization of prior service cost (0.4) (0.7) — — (1.1) Amortization of net loss 0.9 0.2 0.1 — 1.2 Foreign currency exchange — — — (0.2) (0.2) Balance at March 31, 2021 (61.2) 11.7 (0.5) (0.9) (50.9) Amortization of prior service cost (0.4) (0.7) (0.1) — (1.2) Amortization of net loss 1.0 0.3 — — 1.3 Foreign currency exchange — — — (0.1) (0.1) Other adjustments — — — 0.2 0.2 Balance at June 30, 2021 (60.6) 11.3 (0.6) (0.8) (50.7) Amortization of prior service cost (0.5) (0.6) — — (1.1) Amortization of net loss 1.0 — — — 1.0 Foreign currency exchange — — — (0.1) (0.1) Balance at September 30, 2021 $ (60.1) $ 10.7 $ (0.6) $ (0.9) $ (50.9) Changes in accumulated other comprehensive income (loss) by component, net of tax, for the nine months ended September 30, 2020 consisted of the following: Accumulated Post- Non- Other Pension Retirement Qualified Comprehensive (In millions) Benefits Benefits 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) Amortization of prior service cost (0.4) (0.8) — — (1.2) Amortization of net loss (gain) 0.3 0.3 (0.1) — 0.5 Foreign currency exchange — — — 0.1 0.1 Other adjustments — — — 0.1 0.1 Balance at September 30, 2020 $ (50.7) $ 14.7 $ (0.4) $ (1.5) $ (37.9) |
FAIR VALUE OF FINANCIAL INSTRUM
FAIR VALUE OF FINANCIAL INSTRUMENTS | 9 Months Ended |
Sep. 30, 2021 | |
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 September 30, 2021 and December 31, 2020 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) September 30, 2021 Fair Value Measurements at September 30, 2021 Cash and cash equivalents $ 75.9 $ 75.9 $ 75.9 $ — $ — Restricted cash $ 5.3 $ 5.3 $ 5.3 $ — $ — Variable rate debt $ — $ — $ — $ — $ — Fixed rate debt $ 647.2 $ 636.0 $ — $ 636.0 $ — (In millions) December 31, 2020 Fair Value Measurements at December 31, 2020 Cash and cash equivalents $ 14.4 $ 14.4 $ 14.4 $ — $ — Restricted cash $ 5.3 $ 5.3 $ 5.3 $ — $ — Variable rate debt $ 71.8 $ 71.8 $ — $ 71.8 $ — Fixed rate debt $ 688.3 $ 686.7 $ — $ 686.7 $ — |
EARNINGS PER SHARE
EARNINGS PER SHARE | 9 Months Ended |
Sep. 30, 2021 | |
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 September 30, 2021 and 2020. The computations for basic and diluted earnings per share for the three and nine months ended September 30, 2021 and 2020 are as follows: Three Months Ended September 30, 2021 Nine Months Ended September 30, 2021 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 $ 283.2 42.9 $ 6.60 $ 532.9 43.3 $ 12.31 Effect of Dilutive Securities 0.5 (0.07) 0.4 (0.12) Diluted $ 283.2 43.4 $ 6.53 $ 532.9 43.7 $ 12.19 Three Months Ended September 30, 2020 Nine Months Ended September 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 $ 70.9 43.1 $ 1.65 $ 107.5 43.0 $ 2.50 Effect of Dilutive Securities 0.4 (0.02) 0.4 (0.02) Diluted $ 70.9 43.5 $ 1.63 $ 107.5 43.4 $ 2.48 |
SHARE-BASED COMPENSATION
SHARE-BASED COMPENSATION | 9 Months Ended |
Sep. 30, 2021 | |
SHARE-BASED COMPENSATION | |
SHARE-BASED COMPENSATION | 11. SHARE-BASED COMPENSATION During the three and nine months ended September 30, 2021, the Company granted approximately 900 and 238,400 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 $75.07 and $68.39 per share, 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 $4.7 million and $5.9 million for the three months ended September 30, 2021 and 2020, and $14.2 million and $12.0 million for the nine months ended September 30, 2021 and 2020, 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 | 9 Months Ended |
Sep. 30, 2021 | |
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, 2020 . 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 nine months ended September 30, 2021 and 2020 consisted of the following: Pension Benefits Post-retirement Benefits Three Months Ended September 30, Three Months Ended September 30, (In millions) 2021 2020 2021 2020 Components of net periodic benefit cost (benefit): Service cost $ 1.3 $ 1.3 $ 0.2 $ 0.1 Interest cost 1.4 2.1 0.1 0.2 Expected return on plan assets (3.5) (3.9) — — Amortization of net loss 1.3 0.5 0.1 0.1 Amortization of prior service credit (0.6) (0.6) (0.9) (1.0) Net periodic benefit cost (benefit) $ (0.1) $ (0.6) $ (0.5) $ (0.6) Pension Benefits Post-retirement Benefits Nine Months Ended September 30, Nine Months Ended September 30, (In millions) 2021 2020 2021 2020 Components of net periodic benefit cost (benefit): Service cost $ 3.6 $ 3.8 $ 0.5 $ 0.4 Interest cost 4.6 5.9 0.5 0.6 Expected return on plan assets (10.8) (10.4) — — Amortization of net loss 3.8 3.4 0.7 0.4 Amortization of prior service credit (1.7) (1.8) (2.7) (2.8) Net periodic benefit cost (benefit) $ (0.5) $ 0.9 $ (1.0) $ (1.4) |
SIGNIFICANT ACCOUNTING POLICI_2
SIGNIFICANT ACCOUNTING POLICIES (Policies) | 9 Months Ended |
Sep. 30, 2021 | |
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, 2020, filed with the Securities and Exchange Commission (“SEC”) on February 26, 2021. |
Fiscal Period | Fiscal Period: The period end for Matson covered by this report is September 30, 2021. The period end for MatNav and its subsidiaries covered by this report occurred on the last Friday in September, or September 24, 2021. |
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, 2020. |
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; insurance reserves and other 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. |
Recognition of Revenues and Expenses | Recognition of Revenues and 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 Nine Months Ended September 30, September 30, Ocean Transportation (in millions) (1) 2021 2020 2021 2020 Ocean Transportation services $ 855.2 $ 490.8 $ 2,083.8 $ 1,284.5 Terminal and other related services 4.8 5.1 12.5 15.5 Fuel sales 1.9 1.3 5.1 6.0 Vessel management and related services 1.6 1.1 5.5 4.0 Total $ 863.5 $ 498.3 $ 2,106.9 $ 1,310.0 (1) Ocean Transportation revenue transactions are primarily denominated in U.S. dollars except for less than 3 percent of Ocean Transportation services revenue 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 selling, 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 Nine Months Ended September 30, September 30, Logistics (in millions) (1) 2021 2020 2021 2020 Transportation Brokerage and Freight Forwarding services $ 186.1 $ 133.0 $ 495.9 $ 337.0 Warehouse and distribution services 12.2 9.5 31.8 25.9 Supply chain management and other services 9.8 4.4 23.7 10.3 Total $ 208.1 $ 146.9 $ 551.4 $ 373.2 (1) Logistics revenue transactions are primarily denominated in U.S. dollars except for less than 5 percent of transportation brokerage and freight forwarding services revenue, and supply chain management and other services revenue categories which are denominated in foreign currencies. ◾ 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, agent commissions, 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, agent commissions, 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: 31, 2020. million of eligible accounts receivable was assigned to the CCF, respectively. 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 nine months ended September 30, 2021, the Company deposited million from the CCF. The Company made withdrawals 30, 2021. The balance of cash on deposit at September 30, 2021 and December 31, 2020 was nominal. |
Investment in SSAT | Investment in SSAT: Condensed income statement information for SSAT for the three and nine months ended September 30, 2021 and 2020 consisted of the following: Three Months Ended Nine Months Ended September 30, September 30, (In millions) 2021 2020 2021 2020 Operating revenue $ 316.3 $ 273.9 $ 944.6 $ 796.1 Operating costs and expenses (274.2) (243.1) (831.3) (738.4) Operating income 42.1 30.8 113.3 57.7 Net Income (1) $ 37.3 $ 26.2 $ 100.5 $ 51.5 Company Share of SSAT’s Net Income (2) $ 13.0 $ 7.7 $ 35.0 $ 15.4 (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 $37.2 million and $48.7 million at September 30, 2021 and December 31, 2020, 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 third quarter 2021 cash dividend of $0.30 2, 2021. On October 28, 2021, the Company’s Board of Directors declared a cash dividend of $0.30 per share payable on December 2, 2021. |
SIGNIFICANT ACCOUNTING POLICI_3
SIGNIFICANT ACCOUNTING POLICIES (Tables) | 9 Months Ended |
Sep. 30, 2021 | |
Schedule of condensed income statement information for SSAT | Three Months Ended Nine Months Ended September 30, September 30, (In millions) 2021 2020 2021 2020 Operating revenue $ 316.3 $ 273.9 $ 944.6 $ 796.1 Operating costs and expenses (274.2) (243.1) (831.3) (738.4) Operating income 42.1 30.8 113.3 57.7 Net Income (1) $ 37.3 $ 26.2 $ 100.5 $ 51.5 Company Share of SSAT’s Net Income (2) $ 13.0 $ 7.7 $ 35.0 $ 15.4 (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 Nine Months Ended September 30, September 30, Ocean Transportation (in millions) (1) 2021 2020 2021 2020 Ocean Transportation services $ 855.2 $ 490.8 $ 2,083.8 $ 1,284.5 Terminal and other related services 4.8 5.1 12.5 15.5 Fuel sales 1.9 1.3 5.1 6.0 Vessel management and related services 1.6 1.1 5.5 4.0 Total $ 863.5 $ 498.3 $ 2,106.9 $ 1,310.0 (1) Ocean Transportation revenue transactions are primarily denominated in U.S. dollars except for less than 3 percent of Ocean Transportation services revenue 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 selling, 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 Nine Months Ended September 30, September 30, Logistics (in millions) (1) 2021 2020 2021 2020 Transportation Brokerage and Freight Forwarding services $ 186.1 $ 133.0 $ 495.9 $ 337.0 Warehouse and distribution services 12.2 9.5 31.8 25.9 Supply chain management and other services 9.8 4.4 23.7 10.3 Total $ 208.1 $ 146.9 $ 551.4 $ 373.2 (1) Logistics revenue transactions are primarily denominated in U.S. dollars except for less than 5 percent of transportation brokerage and freight forwarding services revenue, and supply chain management and other services revenue categories which are denominated in foreign currencies. ◾ 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, agent commissions, 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, agent commissions, 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) | 9 Months Ended |
Sep. 30, 2021 | |
REPORTABLE SEGMENTS | |
Schedule of reportable segment information | Three Months Ended Nine Months Ended September 30, September 30, (In millions) 2021 2020 2021 2020 Operating Revenue: Ocean Transportation (1) $ 863.5 $ 498.3 $ 2,106.9 $ 1,310.0 Logistics (2) 208.1 146.9 551.4 373.2 Total Operating Revenue $ 1,071.6 $ 645.2 $ 2,658.3 $ 1,683.2 Operating Income: Ocean Transportation (3) $ 361.9 $ 86.5 $ 677.0 $ 136.7 Logistics 16.0 11.9 35.0 25.9 Total Operating Income 377.9 98.4 712.0 162.6 Interest expense, net (5.1) (5.7) (17.9) (22.5) Other income (expense), net 1.8 2.4 4.7 4.5 Income before Income Taxes 374.6 95.1 698.8 144.6 Income taxes (91.4) (24.2) (165.9) (37.1) Net Income $ 283.2 $ 70.9 $ 532.9 $ 107.5 (1) Ocean Transportation operating revenue excludes inter-segment revenue of $21.8 million and $22.4 million for the three months ended September 30, 2021 and 2020, and $55.6 million and $43.7 million for the nine months ended September 30, 2021 and 2020, respectively. (2) Logistics operating revenue excludes inter-segment revenue of $36.0 million and $17.8 million for the three months ended September 30, 2021 and 2020, and $84.9 million and $40.1 million for the nine months ended September 30, 2021 and 2020, respectively. (3) Ocean Transportation segment information includes $13.0 million and $7.7 million of equity in income from the Company’s equity investment in SSAT for the three months ended September 30, 2021 and 2020, and $35.0 million and $15.4 million for the nine months ended September 30, 2021 and 2020, respectively. |
PROPERTY AND EQUIPMENT (Tables)
PROPERTY AND EQUIPMENT (Tables) | 9 Months Ended |
Sep. 30, 2021 | |
PROPERTY AND EQUIPMENT | |
Schedule of property and equipment | September 30, December 31, (In millions) 2021 2020 Cost: Vessels $ 2,323.8 $ 2,191.6 Containers and equipment 611.7 572.3 Terminal facilities and other property 120.2 119.8 Construction in progress 52.7 28.6 Total Property and Equipment 3,108.4 2,912.3 Less: Accumulated Depreciation (1,281.6) (1,222.4) Total Property and Equipment, net $ 1,826.8 $ 1,689.9 |
GOODWILL AND INTANGIBLES (Table
GOODWILL AND INTANGIBLES (Tables) | 9 Months Ended |
Sep. 30, 2021 | |
GOODWILL AND INTANGIBLES | |
Schedule of goodwill | Goodwill by segment as of September 30, 2021 and December 31, 2020 consisted of the following: Ocean (In millions) Transportation Logistics Total Goodwill $ 222.6 $ 105.2 $ 327.8 |
Schedule of intangible assets | September 30, December 31, (In millions) 2021 2020 Customer Relationships: Ocean Transportation $ 140.6 $ 140.6 Logistics 90.1 90.1 Total 230.7 230.7 Less: Accumulated Amortization (74.2) (66.0) Total Customer Relationships, net 156.5 164.7 Trade name – Logistics 27.3 27.3 Total Intangible Assets, net $ 183.8 $ 192.0 |
DEBT (Tables)
DEBT (Tables) | 9 Months Ended |
Sep. 30, 2021 | |
DEBT | |
Schedule of debt | September 30, December 31, (In millions) 2021 2020 Private Placement Term Loans: 3.66 %, payable through 2023 $ 18.2 $ 22.8 4.16 %, payable through 2027 31.4 34.0 3.37 %, payable through 2027 75.0 75.0 3.14 %, payable through 2031 151.2 169.6 4.31 %, payable through 2032 26.7 27.9 Title XI Debt: 5.34 %, payable through 2028 15.4 17.6 5.27 %, payable through 2029 17.6 19.8 1.22 %, payable through 2043 178.0 182.0 1.35 %, payable through 2044 133.7 139.6 Revolving credit facility, maturity date of March 31, 2026 — 71.8 Total Debt 647.2 760.1 Less: Current portion (65.0) (59.2) Total Long-term Debt 582.2 700.9 Less: Deferred loan fees (14.7) (15.3) Total Long-term Debt, net of deferred loan fees $ 567.5 $ 685.6 |
Schedule of maturities of debt | As of Year (in millions) September 30, 2021 Remainder of 2021 $ 18.1 2022 65.0 2023 60.4 2024 51.7 2025 51.7 Thereafter 400.3 Total Debt $ 647.2 |
LEASES (Tables)
LEASES (Tables) | 9 Months Ended |
Sep. 30, 2021 | |
LEASES | |
Summary of lease cost | Three Months Ended Nine Months Ended September 30, September 30, (In millions) 2021 2020 2021 2020 Operating lease cost $ 26.7 $ 20.0 $ 79.4 $ 60.5 Short-term lease cost 0.1 4.4 2.9 6.9 Variable lease cost 0.1 0.2 0.5 0.6 Total lease cost $ 26.9 $ 24.6 $ 82.8 $ 68.0 |
ACCUMULATED OTHER COMPREHENSI_2
ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS) (Tables) | 9 Months Ended |
Sep. 30, 2021 | |
ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS). | |
Schedule of changes in accumulated other comprehensive income (loss) by component, net of tax | Changes in accumulated other comprehensive income (loss) by component, net of tax, for the nine months ended September 30, 2021 consisted of the following: Accumulated Post- Non- Other Pension Retirement Qualified Comprehensive (In millions) Benefits Benefits Plans Other Income (Loss) Balance at December 31, 2020 $ (61.7) $ 12.2 $ (0.6) $ (0.7) $ (50.8) Amortization of prior service cost (0.4) (0.7) — — (1.1) Amortization of net loss 0.9 0.2 0.1 — 1.2 Foreign currency exchange — — — (0.2) (0.2) Balance at March 31, 2021 (61.2) 11.7 (0.5) (0.9) (50.9) Amortization of prior service cost (0.4) (0.7) (0.1) — (1.2) Amortization of net loss 1.0 0.3 — — 1.3 Foreign currency exchange — — — (0.1) (0.1) Other adjustments — — — 0.2 0.2 Balance at June 30, 2021 (60.6) 11.3 (0.6) (0.8) (50.7) Amortization of prior service cost (0.5) (0.6) — — (1.1) Amortization of net loss 1.0 — — — 1.0 Foreign currency exchange — — — (0.1) (0.1) Balance at September 30, 2021 $ (60.1) $ 10.7 $ (0.6) $ (0.9) $ (50.9) Changes in accumulated other comprehensive income (loss) by component, net of tax, for the nine months ended September 30, 2020 consisted of the following: Accumulated Post- Non- Other Pension Retirement Qualified Comprehensive (In millions) Benefits Benefits 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) Amortization of prior service cost (0.4) (0.8) — — (1.2) Amortization of net loss (gain) 0.3 0.3 (0.1) — 0.5 Foreign currency exchange — — — 0.1 0.1 Other adjustments — — — 0.1 0.1 Balance at September 30, 2020 $ (50.7) $ 14.7 $ (0.4) $ (1.5) $ (37.9) |
FAIR VALUE OF FINANCIAL INSTR_2
FAIR VALUE OF FINANCIAL INSTRUMENTS (Tables) | 9 Months Ended |
Sep. 30, 2021 | |
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) September 30, 2021 Fair Value Measurements at September 30, 2021 Cash and cash equivalents $ 75.9 $ 75.9 $ 75.9 $ — $ — Restricted cash $ 5.3 $ 5.3 $ 5.3 $ — $ — Variable rate debt $ — $ — $ — $ — $ — Fixed rate debt $ 647.2 $ 636.0 $ — $ 636.0 $ — (In millions) December 31, 2020 Fair Value Measurements at December 31, 2020 Cash and cash equivalents $ 14.4 $ 14.4 $ 14.4 $ — $ — Restricted cash $ 5.3 $ 5.3 $ 5.3 $ — $ — Variable rate debt $ 71.8 $ 71.8 $ — $ 71.8 $ — Fixed rate debt $ 688.3 $ 686.7 $ — $ 686.7 $ — |
EARNINGS PER SHARE (Tables)
EARNINGS PER SHARE (Tables) | 9 Months Ended |
Sep. 30, 2021 | |
EARNINGS PER SHARE | |
Schedule of basic and diluted earnings per share | Three Months Ended September 30, 2021 Nine Months Ended September 30, 2021 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 $ 283.2 42.9 $ 6.60 $ 532.9 43.3 $ 12.31 Effect of Dilutive Securities 0.5 (0.07) 0.4 (0.12) Diluted $ 283.2 43.4 $ 6.53 $ 532.9 43.7 $ 12.19 Three Months Ended September 30, 2020 Nine Months Ended September 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 $ 70.9 43.1 $ 1.65 $ 107.5 43.0 $ 2.50 Effect of Dilutive Securities 0.4 (0.02) 0.4 (0.02) Diluted $ 70.9 43.5 $ 1.63 $ 107.5 43.4 $ 2.48 |
PENSION AND POST-RETIREMENT P_2
PENSION AND POST-RETIREMENT PLANS (Tables) | 9 Months Ended |
Sep. 30, 2021 | |
PENSION AND POST-RETIREMENT PLANS | |
Components of net periodic benefit cost (benefit) | Pension Benefits Post-retirement Benefits Three Months Ended September 30, Three Months Ended September 30, (In millions) 2021 2020 2021 2020 Components of net periodic benefit cost (benefit): Service cost $ 1.3 $ 1.3 $ 0.2 $ 0.1 Interest cost 1.4 2.1 0.1 0.2 Expected return on plan assets (3.5) (3.9) — — Amortization of net loss 1.3 0.5 0.1 0.1 Amortization of prior service credit (0.6) (0.6) (0.9) (1.0) Net periodic benefit cost (benefit) $ (0.1) $ (0.6) $ (0.5) $ (0.6) Pension Benefits Post-retirement Benefits Nine Months Ended September 30, Nine Months Ended September 30, (In millions) 2021 2020 2021 2020 Components of net periodic benefit cost (benefit): Service cost $ 3.6 $ 3.8 $ 0.5 $ 0.4 Interest cost 4.6 5.9 0.5 0.6 Expected return on plan assets (10.8) (10.4) — — Amortization of net loss 3.8 3.4 0.7 0.4 Amortization of prior service credit (1.7) (1.8) (2.7) (2.8) Net periodic benefit cost (benefit) $ (0.5) $ 0.9 $ (1.0) $ (1.4) |
DESCRIPTION OF THE BUSINESS (De
DESCRIPTION OF THE BUSINESS (Details) | 6 Months Ended | 9 Months Ended | |
Jun. 30, 2021segment | Jun. 30, 2020segment | Sep. 30, 2021segmentfacility | |
DESCRIPTION OF THE BUSINESS | |||
Number of reportable segments | segment | 2 | 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 | 7 | ||
MatNav | SSAT | |||
DESCRIPTION OF THE BUSINESS | |||
Number of terminal facilities on which SSAT provided terminal and stevedoring services on the U.S. West Coast | 3 |
SIGNIFICANT ACCOUNTING POLICI_4
SIGNIFICANT ACCOUNTING POLICIES - RECOGNITION OF REVENUES AND EXPENSES (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | |
Total | $ 1,071.6 | $ 645.2 | $ 2,658.3 | $ 1,683.2 |
Ocean Transportation | ||||
Total | 863.5 | 498.3 | 2,106.9 | 1,310 |
Logistics | ||||
Total | 208.1 | 146.9 | 551.4 | 373.2 |
Ocean Transportation Services | ||||
Ocean Transportation services | 855.2 | 490.8 | 2,083.8 | 1,284.5 |
Terminal and other related services | 4.8 | 5.1 | 12.5 | 15.5 |
Fuel sales | 1.9 | 1.3 | 5.1 | 6 |
Vessel management and related services | 1.6 | 1.1 | 5.5 | 4 |
Total | 863.5 | 498.3 | $ 2,106.9 | $ 1,310 |
Percentage of ocean transportation revenues and fuel sales denominated in foreign currency | 3.00% | 3.00% | ||
Logistics Services | ||||
Transportation Brokerage and Freight Forwarding Services | 186.1 | 133 | $ 495.9 | $ 337 |
Warehouse and distribution services | 12.2 | 9.5 | 31.8 | 25.9 |
Supply chain management and other services | 9.8 | 4.4 | 23.7 | 10.3 |
Total | $ 208.1 | $ 146.9 | $ 551.4 | $ 373.2 |
Percentage of transportation brokerage and freight forwarding services revenue denominated in foreign currency | 5.00% | 5.00% |
SIGNIFICANT ACCOUNTING POLICI_5
SIGNIFICANT ACCOUNTING POLICIES - CAPITAL CONSTRUCTION FUND (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2021 | Sep. 30, 2021 | Sep. 30, 2020 | Dec. 31, 2020 | |
Accounts receivable, net | $ 328.6 | $ 328.6 | $ 253.4 | |
Cash Deposits Into CCF | 31.2 | $ 97.1 | ||
Withdrawals from CCF | 31.2 | $ 97.1 | ||
Eligible Accounts Receivable Assigned to CCF | ||||
Accounts receivable, net | 1.8 | 1.8 | $ 1.7 | |
Cash Deposits Into CCF | 0 | 31.2 | ||
Withdrawals from CCF | $ 0 | $ 31.2 |
SIGNIFICANT ACCOUNTING POLICI_6
SIGNIFICANT ACCOUNTING POLICIES - INVESTMENT IN SSAT (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | Dec. 31, 2020 | |
Investments in affiliates | |||||
Investment in SSAT | $ 37.2 | $ 37.2 | $ 48.7 | ||
Financial information for equity method investment | |||||
Company Share of Net Income | 13 | $ 7.7 | 35 | $ 15.4 | |
Ocean Transportation | |||||
Financial information for equity method investment | |||||
Company Share of Net Income | 13 | 7.7 | |||
SSAT | |||||
Investments in affiliates | |||||
Investment in SSAT | 37.2 | 37.2 | $ 48.7 | ||
Financial information for equity method investment | |||||
Operating revenue | 316.3 | 273.9 | 944.6 | 796.1 | |
Operating costs and expenses | (274.2) | (243.1) | (831.3) | (738.4) | |
Operating Income | 42.1 | 30.8 | 113.3 | 57.7 | |
Net Income | 37.3 | 26.2 | 100.5 | 51.5 | |
Company Share of Net Income | $ 13 | $ 7.7 | $ 35 | $ 15.4 |
SIGNIFICANT ACCOUNTING POLICI_7
SIGNIFICANT ACCOUNTING POLICIES - DIVIDENDS AND OTHER (Details) - $ / shares | Oct. 28, 2021 | Sep. 02, 2021 | Jun. 30, 2021 | Mar. 31, 2021 | Jun. 30, 2020 | Mar. 31, 2020 |
Dividends | ||||||
Dividends (per share) | $ 0.30 | $ 0.30 | $ 0.23 | $ 0.23 | $ 0.22 | |
Cash dividends declared per share (in dollars per share) | $ 0.30 |
REPORTABLE SEGMENTS (Details)
REPORTABLE SEGMENTS (Details) $ in Millions | 3 Months Ended | 6 Months Ended | 9 Months Ended | |||||||
Sep. 30, 2021USD ($) | Jun. 30, 2021USD ($) | Mar. 31, 2021USD ($) | Sep. 30, 2020USD ($) | Jun. 30, 2020USD ($) | Mar. 31, 2020USD ($) | Jun. 30, 2021segment | Jun. 30, 2020segment | Sep. 30, 2021USD ($)segment | Sep. 30, 2020USD ($) | |
Segment results | ||||||||||
Number of reportable segments | segment | 2 | 2 | 2 | |||||||
Total Operating Revenue | $ 1,071.6 | $ 645.2 | $ 2,658.3 | $ 1,683.2 | ||||||
Total Operating Income | 377.9 | 98.4 | 712 | 162.6 | ||||||
Interest expense, net | (5.1) | (5.7) | (17.9) | (22.5) | ||||||
Other income (expense), net | 1.8 | 2.4 | 4.7 | 4.5 | ||||||
Income before Income Taxes | 374.6 | 95.1 | 698.8 | 144.6 | ||||||
Income taxes | (91.4) | (24.2) | (165.9) | (37.1) | ||||||
Net Income | 283.2 | $ 162.5 | $ 87.2 | 70.9 | $ 32.8 | $ 3.8 | 532.9 | 107.5 | ||
Income from SSAT | 13 | 7.7 | 35 | 15.4 | ||||||
SSAT | ||||||||||
Segment results | ||||||||||
Income from SSAT | 13 | 7.7 | 35 | 15.4 | ||||||
Intersegment Eliminations | ||||||||||
Segment results | ||||||||||
Total Operating Revenue | 57.8 | 40.2 | 140.5 | 83.8 | ||||||
Ocean Transportation | ||||||||||
Segment results | ||||||||||
Total Operating Revenue | 863.5 | 498.3 | 2,106.9 | 1,310 | ||||||
Total Operating Income | 361.9 | 86.5 | 677 | 136.7 | ||||||
Income from SSAT | 13 | 7.7 | ||||||||
Ocean Transportation | Intersegment Eliminations | ||||||||||
Segment results | ||||||||||
Total Operating Revenue | 21.8 | 22.4 | 55.6 | 43.7 | ||||||
Logistics | ||||||||||
Segment results | ||||||||||
Total Operating Revenue | 208.1 | 146.9 | 551.4 | 373.2 | ||||||
Total Operating Income | 16 | 11.9 | 35 | 25.9 | ||||||
Logistics | Intersegment Eliminations | ||||||||||
Segment results | ||||||||||
Total Operating Revenue | $ 36 | $ 17.8 | $ 84.9 | $ 40.1 |
PROPERTY AND EQUIPMENT (Details
PROPERTY AND EQUIPMENT (Details) - USD ($) $ in Millions | Sep. 30, 2021 | Dec. 31, 2020 |
Property and equipment | ||
Property and Equipment | $ 3,108.4 | $ 2,912.3 |
Less: Accumulated Depreciation | (1,281.6) | (1,222.4) |
Property and equipment, net | 1,826.8 | 1,689.9 |
Vessels | ||
Property and equipment | ||
Property and Equipment | 2,323.8 | 2,191.6 |
Containers and equipment | ||
Property and equipment | ||
Property and Equipment | 611.7 | 572.3 |
Terminal facilities and other property | ||
Property and equipment | ||
Property and Equipment | 120.2 | 119.8 |
Construction in progress | ||
Property and equipment | ||
Property and Equipment | $ 52.7 | $ 28.6 |
GOODWILL AND INTANGIBLES ASSETS
GOODWILL AND INTANGIBLES ASSETS - CHANGES IN GOODWILL (Details) - USD ($) $ in Millions | Sep. 30, 2021 | Dec. 31, 2020 |
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 | Sep. 30, 2021 | Dec. 31, 2020 |
Finite-lived Intangible Assets | ||
Total Intangible Assets, net | $ 183.8 | $ 192 |
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 | (74.2) | (66) |
Total | 156.5 | 164.7 |
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 | Sep. 30, 2021 | Dec. 31, 2020 |
Debt | ||
Total debt | $ 647.2 | $ 760.1 |
Less: Current portion | (65) | (59.2) |
Total Long-term Debt | 582.2 | 700.9 |
Less: Deferred loan fees | (14.7) | (15.3) |
Total Long-term Debt, net of deferred loan fees | 567.5 | 685.6 |
3.66% payable through 2023 | ||
Debt | ||
Total debt | $ 18.2 | 22.8 |
Interest rate (as a percent) | 3.66% | |
4.16% payable through 2027 | ||
Debt | ||
Total debt | $ 31.4 | 34 |
Interest rate (as a percent) | 4.16% | |
3.37 %, payable through 2027 | ||
Debt | ||
Total debt | $ 75 | 75 |
Interest rate (as a percent) | 3.37% | |
3.14%, payable through 2031 | ||
Debt | ||
Total debt | $ 151.2 | 169.6 |
Interest rate (as a percent) | 3.14% | |
4.31% payable through2032 | ||
Debt | ||
Total debt | $ 26.7 | 27.9 |
Interest rate (as a percent) | 4.31% | |
5.34% payable through2028 | ||
Debt | ||
Total debt | $ 15.4 | 17.6 |
Interest rate (as a percent) | 5.34% | |
5.27% payable through 2029 | ||
Debt | ||
Total debt | $ 17.6 | 19.8 |
Interest rate (as a percent) | 5.27% | |
1.22 %, payable through 2043 | ||
Debt | ||
Total debt | $ 178 | 182 |
Interest rate (as a percent) | 1.22% | |
1.35 %, payable through 2044 | ||
Debt | ||
Total debt | $ 133.7 | 139.6 |
Interest rate (as a percent) | 1.35% | |
Revolving Credit Facility | ||
Debt | ||
Total debt | $ 71.8 |
DEBT - REVOLVING CREDIT FACILIT
DEBT - REVOLVING CREDIT FACILITY (Details) $ in Millions | 9 Months Ended |
Sep. 30, 2021USD ($) | |
Revolving Credit Facility | |
Debt | |
Funds available under the revolving credit facility | $ 641.9 |
Used portion of revolving credit facility | $ 0 |
Interest rate during period (as a percent) | 1.10% |
Standby and commercial letters of credit | |
Debt | |
Used portion of revolving credit facility | $ 8.1 |
DEBT - PRIVATE PLACEMENT TERM L
DEBT - PRIVATE PLACEMENT TERM LOANS (Details) $ in Millions | 9 Months Ended |
Sep. 30, 2020USD ($) | |
DEBT | |
Proceeds from issuance of debt | $ 325.5 |
DEBT - MATURITIES (Details)
DEBT - MATURITIES (Details) - USD ($) $ in Millions | Sep. 30, 2021 | Dec. 31, 2020 |
Debt maturities | ||
Remainder of 2021 | $ 18.1 | |
2022 | 65 | |
2023 | 60.4 | |
2024 | 51.7 | |
2025 | 51.7 | |
Thereafter | 400.3 | |
Total Debt | $ 647.2 | $ 760.1 |
LEASE - COMPONENTS OF LEASE COS
LEASE - COMPONENTS OF LEASE COST (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | |
Lease Cost | ||||
Operating lease cost | $ 26.7 | $ 20 | $ 79.4 | $ 60.5 |
Short-term lease cost | 0.1 | 4.4 | 2.9 | 6.9 |
Variable lease cost | 0.1 | 0.2 | 0.5 | 0.6 |
Total lease cost | $ 26.9 | $ 24.6 | $ 82.8 | $ 68 |
LEASE - SALE AND LEASEBACK OF E
LEASE - SALE AND LEASEBACK OF EQUIPMENT (Details) $ in Millions | Mar. 25, 2020USD ($) | Sep. 30, 2021item |
Termination of Vessel Charter | ||
Number of sale leaseback transactions | item | 0 | |
Multiple Tranches of Chassis and Container Equipment | ||
Termination of Vessel Charter | ||
Net proceeds | $ | $ 14.3 | |
Base term | 5 years |
LEASES - TERMINATION OF VESSEL
LEASES - TERMINATION OF VESSEL CHARTER (Details) - Bareboat Charter Agreement $ in Millions | Jul. 07, 2021USD ($) |
Termination of Vessel Charter | |
Payment of termination of vessel charter | $ 95.8 |
Derecognized right-of-use asset | (27.4) |
Derecognized right-of-use liability | 28.5 |
Increase in property and equipment | $ 94.7 |
ACCUMULATED OTHER COMPREHENSI_3
ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS) (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||||||
Sep. 30, 2021 | Jun. 30, 2021 | Mar. 31, 2021 | Sep. 30, 2020 | Jun. 30, 2020 | Mar. 31, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | |
Changes in accumulated other comprehensive income (loss) by component, net of taxes | ||||||||
Balance at the beginning of the period | $ 1,172.8 | $ 1,028.9 | $ 961.2 | $ 815.5 | $ 800.2 | $ 805.7 | $ 961.2 | $ 805.7 |
Amortization of prior service cost | (1.1) | (1.2) | (3.4) | (3.5) | ||||
Amortization of net loss (gain) | 1 | 0.5 | 3.5 | 3.1 | ||||
Other adjustments | (0.1) | 0.2 | (0.2) | (0.6) | ||||
Balance at the end of the period | 1,344.8 | 1,172.8 | 1,028.9 | 891.8 | 815.5 | 800.2 | 1,344.8 | 891.8 |
Pensions | ||||||||
Changes in accumulated other comprehensive income (loss) by component, net of taxes | ||||||||
Balance at the beginning of the period | (60.6) | (61.2) | (61.7) | (50.6) | (51.3) | (51.9) | (61.7) | (51.9) |
Amortization of prior service cost | (0.5) | (0.4) | (0.4) | (0.4) | (0.4) | (0.5) | ||
Amortization of net loss (gain) | 1 | 1 | 0.9 | 0.3 | 1.1 | 1.1 | ||
Balance at the end of the period | (60.1) | (60.6) | (61.2) | (50.7) | (50.6) | (51.3) | (60.1) | (50.7) |
Post Retirement | ||||||||
Changes in accumulated other comprehensive income (loss) by component, net of taxes | ||||||||
Balance at the beginning of the period | 11.3 | 11.7 | 12.2 | 15.2 | 15.8 | 16.3 | 12.2 | 16.3 |
Amortization of prior service cost | (0.6) | (0.7) | (0.7) | (0.8) | (0.7) | (0.6) | ||
Amortization of net loss (gain) | 0.3 | 0.2 | 0.3 | 0.1 | 0.1 | |||
Balance at the end of the period | 10.7 | 11.3 | 11.7 | 14.7 | 15.2 | 15.8 | 10.7 | 14.7 |
Non-Qualified Plans | ||||||||
Changes in accumulated other comprehensive income (loss) by component, net of taxes | ||||||||
Balance at the beginning of the period | (0.6) | (0.5) | (0.6) | (0.3) | (0.4) | (0.4) | (0.6) | (0.4) |
Amortization of prior service cost | (0.1) | (0.1) | ||||||
Amortization of net loss (gain) | 0.1 | (0.1) | 0.1 | 0.1 | ||||
Balance at the end of the period | (0.6) | (0.6) | (0.5) | (0.4) | (0.3) | (0.4) | (0.6) | (0.4) |
Other | ||||||||
Changes in accumulated other comprehensive income (loss) by component, net of taxes | ||||||||
Balance at the beginning of the period | (0.8) | (0.9) | (0.7) | (1.7) | (1.6) | (0.9) | (0.7) | (0.9) |
Foreign currency exchange | (0.1) | (0.1) | (0.2) | 0.1 | 0.3 | (0.5) | ||
Other adjustments | 0.2 | 0.1 | (0.4) | (0.2) | ||||
Balance at the end of the period | (0.9) | (0.8) | (0.9) | (1.5) | (1.7) | (1.6) | (0.9) | (1.5) |
Accumulated Other Comprehensive Income (Loss) | ||||||||
Changes in accumulated other comprehensive income (loss) by component, net of taxes | ||||||||
Balance at the beginning of the period | (50.7) | (50.9) | (50.8) | (37.4) | (37.5) | (36.9) | (50.8) | (36.9) |
Amortization of prior service cost | (1.1) | (1.2) | (1.1) | (1.2) | (1.1) | (1.2) | ||
Amortization of net loss (gain) | 1 | 1.3 | 1.2 | 0.5 | 1.3 | 1.3 | ||
Foreign currency exchange | (0.1) | (0.1) | (0.2) | 0.1 | 0.3 | (0.5) | ||
Other adjustments | 0.2 | 0.1 | (0.4) | (0.2) | ||||
Balance at the end of the period | $ (50.9) | $ (50.7) | $ (50.9) | $ (37.9) | $ (37.4) | $ (37.5) | $ (50.9) | $ (37.9) |
FAIR VALUE OF FINANCIAL INSTR_3
FAIR VALUE OF FINANCIAL INSTRUMENTS (Details) - USD ($) $ in Millions | Sep. 30, 2021 | Dec. 31, 2020 | Sep. 30, 2020 |
Fair value of financial instruments | |||
Restricted Cash | $ 5.3 | $ 3 | |
Carrying value | |||
Fair value of financial instruments | |||
Cash and cash equivalents | 75.9 | $ 14.4 | |
Restricted Cash | 5.3 | 5.3 | |
Variable rate debt | 71.8 | ||
Fixed rate debt | 647.2 | 688.3 | |
Fair Value Measurement | |||
Fair value of financial instruments | |||
Cash and cash equivalents | 75.9 | 14.4 | |
Restricted Cash | 5.3 | 5.3 | |
Variable rate debt | 71.8 | ||
Fixed rate debt | 636 | 686.7 | |
Fair Value Measurement | Quoted Prices in Active Markets (Level 1) | |||
Fair value of financial instruments | |||
Cash and cash equivalents | 75.9 | 14.4 | |
Restricted Cash | 5.3 | 5.3 | |
Fair Value Measurement | Significant Observable Inputs (Level 2) | |||
Fair value of financial instruments | |||
Variable rate debt | 71.8 | ||
Fixed rate debt | $ 636 | $ 686.7 |
EARNINGS PER SHARE (Details)
EARNINGS PER SHARE (Details) - USD ($) $ / shares in Units, shares in Millions, $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | |
Net Income | ||||
Net Income, Basic | $ 283.2 | $ 70.9 | $ 532.9 | $ 107.5 |
Net Income, Diluted | $ 283.2 | $ 70.9 | $ 532.9 | $ 107.5 |
Weighted Average Common Shares | ||||
Basic | 42.9 | 43.1 | 43.3 | 43 |
Effect of Dilutive Securities (in shares) | 0.5 | 0.4 | 0.4 | 0.4 |
Diluted (in shares) | 43.4 | 43.5 | 43.7 | 43.4 |
Per Common Share Amount | ||||
Net income, Basic (in dollars per share) | $ 6.60 | $ 1.65 | $ 12.31 | $ 2.50 |
Effect of Dilutive Securities (in dollars per shares) | (0.07) | (0.02) | (0.12) | (0.02) |
Net income, Diluted (in dollars per share) | $ 6.53 | $ 1.63 | $ 12.19 | $ 2.48 |
SHARE-BASED COMPENSATION (Detai
SHARE-BASED COMPENSATION (Details) - Time-based and performance-based shares - USD ($) $ / shares in Units, $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | |
Share-based compensation | ||||
Shares granted | 900 | 238,400 | ||
Weighted-average grant date fair value (in dollars per share) | $ 75.07 | $ 68.39 | ||
Total unrecognized compensation cost | $ 25.8 | $ 25.8 | ||
Unrecognized compensation cost over weighted-average period to be recognized | 1 year 8 months 12 days | |||
Selling, general and administrative expenses | ||||
Share-based compensation | ||||
Total stock-based compensation cost | $ 4.7 | $ 5.9 | $ 14.2 | $ 12 |
PENSION AND POST-RETIREMENT P_3
PENSION AND POST-RETIREMENT PLANS - COMPONENTS OF NET PERIODIC BENEFIT COST (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | |
Pension Benefits | ||||
Components of Net Periodic Benefit Cost (Benefit): | ||||
Service cost | $ 1.3 | $ 1.3 | $ 3.6 | $ 3.8 |
Interest cost | 1.4 | 2.1 | 4.6 | 5.9 |
Expected return on plan assets | (3.5) | (3.9) | (10.8) | (10.4) |
Amortization of net loss | 1.3 | 0.5 | 3.8 | 3.4 |
Amortization of prior service credit | (0.6) | (0.6) | (1.7) | (1.8) |
Net periodic benefit cost (benefit) | (0.1) | (0.6) | (0.5) | 0.9 |
Post-retirement Benefits | ||||
Components of Net Periodic Benefit Cost (Benefit): | ||||
Service cost | 0.2 | 0.1 | 0.5 | 0.4 |
Interest cost | 0.1 | 0.2 | 0.5 | 0.6 |
Amortization of net loss | 0.1 | 0.1 | 0.7 | 0.4 |
Amortization of prior service credit | (0.9) | (1) | (2.7) | (2.8) |
Net periodic benefit cost (benefit) | $ (0.5) | $ (0.6) | $ (1) | $ (1.4) |