Document and Entity Information
Document and Entity Information | 3 Months Ended |
Mar. 31, 2024 shares | |
Cover [Abstract] | |
Document Type | 10-Q |
Document Quarterly Report | true |
Document Transition Report | false |
Document Period End Date | Mar. 31, 2024 |
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 | 34,168,153 |
Entity Central Index Key | 0000003453 |
Current Fiscal Year End Date | --12-31 |
Document Fiscal Year Focus | 2024 |
Document Fiscal Period Focus | Q1 |
Amendment Flag | false |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Income and Comprehensive Income - USD ($) shares in Millions, $ in Millions | 3 Months Ended | |
Mar. 31, 2024 | Mar. 31, 2023 | |
Operating Revenue: | ||
Total Operating Revenue | $ 722.1 | $ 704.8 |
Costs and Expenses: | ||
Operating costs | (612.2) | (597.5) |
Income (Loss) from SSAT | 0.4 | (1.8) |
Selling, general and administrative | (73.4) | (66.8) |
Total Costs and Expenses | (685.2) | (666.1) |
Operating Income | 36.9 | 38.7 |
Interest income | 8.8 | 8.2 |
Interest expense | (2.2) | (4.5) |
Other income (expense), net | 1.8 | 1.8 |
Income before Taxes | 45.3 | 44.2 |
Income taxes | (9.2) | (10.2) |
Net Income | 36.1 | 34 |
Other Comprehensive Income (Loss), Net of Income Taxes: | ||
Net Income (Loss) | 36.1 | 34 |
Other Comprehensive Income (Loss): | ||
Net change in pension and post-retirement liabilities | (0.8) | (0.8) |
Other adjustments | (0.8) | 1.4 |
Total Other Comprehensive Income (Loss), Net of Income Taxes | (1.6) | 0.6 |
Comprehensive Income | $ 34.5 | $ 34.6 |
Basic Earnings Per Share (in dollars per share) | $ 1.05 | $ 0.94 |
Diluted Earnings Per Share (in dollars per share) | $ 1.04 | $ 0.94 |
Weighted Average Number of Shares Outstanding: | ||
Basic (in shares) | 34.4 | 36.1 |
Diluted (in shares) | 34.6 | 36.3 |
Ocean Transportation | ||
Operating Revenue: | ||
Total Operating Revenue | $ 579 | $ 551 |
Logistics | ||
Operating Revenue: | ||
Total Operating Revenue | $ 143.1 | $ 153.8 |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets - USD ($) $ in Millions | Mar. 31, 2024 | Dec. 31, 2023 |
Current Assets: | ||
Cash and cash equivalents | $ 25.9 | $ 134 |
Accounts receivable, net of allowance for credit losses of $10.5 million and $9.9 million, respectively | 302.8 | 279.4 |
Prepaid expenses and other assets | 183.3 | 188.9 |
Total current assets | 512 | 602.3 |
Long-term Assets: | ||
Investment in SSAT | 85.2 | 85.5 |
Property and equipment, net | 2,115.7 | 2,089.9 |
Operating lease right of use assets | 274.9 | 289.6 |
Goodwill | 327.8 | 327.8 |
Intangible assets, net | 172.5 | 176.4 |
Capital Construction Fund | 606.8 | 599.4 |
Deferred dry-docking costs, net | 57 | 57.3 |
Other long-term assets | 68 | 66.4 |
Total long-term assets | 3,707.9 | 3,692.3 |
Total Assets | 4,219.9 | 4,294.6 |
Current Liabilities: | ||
Current portion of debt | 39.7 | 39.7 |
Accounts payable and accruals | 277.5 | 277.9 |
Operating lease liabilities | 131.7 | 136.7 |
Other liabilities | 81.6 | 108 |
Total current liabilities | 530.5 | 562.3 |
Long-term Liabilities: | ||
Long-term debt, net of deferred loan fees | 379.4 | 389.3 |
Long-term operating lease liabilities | 148.9 | 159.3 |
Deferred income taxes | 674.8 | 669.3 |
Other long-term liabilities | 112.5 | 113.7 |
Total long-term liabilities | 1,315.6 | 1,331.6 |
Commitments and Contingencies (see Note 15) | ||
Shareholders' Equity: | ||
Common stock | 25.6 | 25.8 |
Additional paid in capital | 280.2 | 293.4 |
Accumulated other comprehensive loss, net | (9.8) | (8.2) |
Retained earnings | 2,077.8 | 2,089.7 |
Total shareholders' equity | 2,373.8 | 2,400.7 |
Total Liabilities and Shareholders' Equity | $ 4,219.9 | $ 4,294.6 |
Condensed Consolidated Balanc_2
Condensed Consolidated Balance Sheets (Parenthetical) - USD ($) $ in Millions | Mar. 31, 2024 | Dec. 31, 2023 |
Condensed Consolidated Balance Sheets | ||
Accounts receivable, allowance for credit loss | $ 10.5 | $ 9.9 |
Condensed Consolidated Statem_2
Condensed Consolidated Statements of Cash Flows - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2024 | Mar. 31, 2023 | |
Cash Flows From Operating Activities: | ||
Net income | $ 36.1 | $ 34 |
Reconciling adjustments: | ||
Depreciation and amortization | 37.6 | 35.8 |
Amortization of operating lease right of use assets | 33.9 | 39.6 |
Deferred income taxes | 2.3 | (1.4) |
Share-based compensation expense | 5.7 | 4.6 |
(Income) loss from SSAT | (0.4) | 1.8 |
Distributions from SSAT | 14 | |
Other | (2.1) | (0.1) |
Changes in assets and liabilities: | ||
Accounts receivable, net | (23.7) | (14.5) |
Deferred dry-docking payments | (5.2) | (2.4) |
Deferred dry-docking amortization | 6.8 | 6.2 |
Prepaid expenses and other assets | 2.4 | 45.7 |
Accounts payable, accruals and other liabilities | (34.3) | (8.4) |
Operating lease liabilities | (34.6) | (39.4) |
Other long-term liabilities | (1.9) | (4.8) |
Net cash provided by operating activities | 36.6 | 96.7 |
Cash Flows From Investing Activities: | ||
Capitalized vessel construction expenditures | (1.1) | (0.4) |
Capital expenditures (excluding vessel construction expenditures) | (54.2) | (35.5) |
Proceeds from disposal of property and equipment, net | 2.3 | 0.3 |
Payment for intangible asset acquisition | (12.4) | |
Cash and interest deposits into Capital Construction Fund, net | (6) | (105.5) |
Net cash used in investing activities | (59) | (153.5) |
Cash Flows From Financing Activities: | ||
Repayments of debt | (10.1) | (40.8) |
Dividends paid | (11.1) | (11.3) |
Repurchase of Matson common stock | (47.3) | (40) |
Tax withholding related to net share settlements of restricted stock units | (17.2) | (12.4) |
Net cash used in financing activities | (85.7) | (104.5) |
Net Decrease in Cash, Cash Equivalents and Restricted Cash | (108.1) | (161.3) |
Cash, Cash Equivalents and Restricted Cash, Beginning of the Period | 136.3 | 253.7 |
Cash, Cash Equivalents and Restricted Cash, End of the Period | 28.2 | 92.4 |
Reconciliation of Cash, Cash Equivalents, and Restricted Cash, at End of the Year: | ||
Cash and Cash Equivalents | 25.9 | 88.5 |
Restricted Cash | 2.3 | 3.9 |
Total Cash, Cash Equivalents and Restricted Cash, End of the Period | 28.2 | 92.4 |
Supplemental Cash Flow Information: | ||
Interest paid, net of capitalized interest | 0.5 | 5 |
Income tax payments (refunds), net | 1.1 | (30.3) |
Non-cash Information: | ||
Capital expenditures included in accounts payable, accruals and other liabilities | $ 16 | 5.1 |
Non-cash payment for intangible asset acquisition | $ 4.1 |
Condensed Consolidated Statem_3
Condensed Consolidated Statements of Shareholders' Equity - USD ($) shares in Millions, $ in Millions | Common Stock | Additional Paid In Capital | AOCI Attributable to Parent [Member] | Retained Earnings | Total |
Balance at the beginning of the period at Dec. 31, 2022 | $ 27.2 | $ 290.4 | $ (6.9) | $ 1,986.2 | $ 2,296.9 |
Balance (in shares) at Dec. 31, 2022 | 36.3 | ||||
Increase (Decrease) in Shareholders' Equity | |||||
Net income | 34 | 34 | |||
Other comprehensive income (loss), net of tax | 0.6 | 0.6 | |||
Share-based compensation | 4.6 | 4.6 | |||
Shares issued, net of shares withheld for employee taxes | $ 0.2 | (12.6) | (12.4) | ||
Shares issued, net of shares withheld for employee taxes (in shares) | 0.3 | ||||
Shares repurchased | $ (0.5) | (2.7) | (38.9) | (42.1) | |
Shares repurchased (in shares) | (0.7) | ||||
Dividends | (11.3) | (11.3) | |||
Balance at the end of the period at Mar. 31, 2023 | $ 26.9 | 279.7 | (6.3) | 1,970 | 2,270.3 |
Balance (in shares) at Mar. 31, 2023 | 35.9 | ||||
Balance at the beginning of the period at Dec. 31, 2023 | $ 25.8 | 293.4 | (8.2) | 2,089.7 | 2,400.7 |
Balance (in shares) at Dec. 31, 2023 | 34.4 | ||||
Increase (Decrease) in Shareholders' Equity | |||||
Net income | 36.1 | 36.1 | |||
Other comprehensive income (loss), net of tax | (1.6) | (1.6) | |||
Share-based compensation | 5.7 | 5.7 | |||
Shares issued, net of shares withheld for employee taxes | $ 0.1 | (17.3) | (17.2) | ||
Shares issued, net of shares withheld for employee taxes (in shares) | 0.2 | ||||
Shares repurchased | $ (0.3) | (1.6) | (47) | $ (48.9) | |
Shares repurchased (in shares) | (0.4) | (0.4) | |||
Equity interest in SSAT (see Note 4) | 10.1 | $ 10.1 | |||
Dividends | (11.1) | (11.1) | |||
Balance at the end of the period at Mar. 31, 2024 | $ 25.6 | $ 280.2 | $ (9.8) | $ 2,077.8 | $ 2,373.8 |
Balance (in shares) at Mar. 31, 2024 | 34.2 |
Condensed Consolidated Statem_4
Condensed Consolidated Statements of Shareholders' Equity (Parenthetical) - $ / shares | 3 Months Ended | ||
Apr. 25, 2024 | Mar. 31, 2024 | Mar. 31, 2023 | |
Condensed Condensed Consolidated Statements of Shareholders' Equity | |||
Dividends declared per share (in dollars per share) | $ 0.32 | $ 0.32 | $ 0.31 |
Dividends (in dollars per share) | $ 0.32 |
DESCRIPTION OF THE BUSINESS
DESCRIPTION OF THE BUSINESS | 3 Months Ended |
Mar. 31, 2024 | |
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, provides services to Okinawa, Japan and various islands in the South Pacific, and operates an international export service from Dutch Harbor, Alaska to Asia. In addition, subsidiaries of MatNav provide stevedoring, refrigerated cargo services, inland transportation and other terminal services for MatNav on the Hawaiian islands of Oahu, Hawaii, Maui and Kauai, and for MatNav and an ocean carrier in Alaska. 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. Established in 1987, Matson Logistics extends the geographic reach of Matson’s transportation network throughout North America and Asia, 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, trans-loading, value-added packaging and distribution services (collectively, “Warehousing” services); and (iv) supply chain management, non-vessel operating common carrier (“NVOCC”) freight forwarding and other services. |
GENERAL AND SIGNIFICANT ACCOUNT
GENERAL AND SIGNIFICANT ACCOUNTING POLICIES | 3 Months Ended |
Mar. 31, 2024 | |
GENERAL AND SIGNIFICANT ACCOUNTING POLICIES | |
GENERAL AND SIGNIFICANT ACCOUNTING POLICIES | 2. GENERAL AND 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, 2023, filed with the Securities and Exchange Commission (“SEC”) on February 23, 2024. Fiscal Period: The period end for Matson covered by this report is March 31, 2024. The period end for MatNav and its subsidiaries covered by this report is March 29, 2024. 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, 2023. 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 and other receivables; legal contingencies; insurance reserves and other related liabilities; contingent acquisition related consideration; accrual estimates; pension and post-retirement estimates; multi-employer withdrawal liabilities; operating lease assets and liabilities; income (loss) from SSAT; and income taxes. Future results could be materially affected if actual results differ from these estimates and assumptions. Prepaid Expenses and Other Assets: March 31, December 31, Prepaid Expenses and Other Assets (in millions) 2024 2023 Income tax receivables, net $ 119.7 $ 125.2 Prepaid fuel 26.0 22.5 Prepaid insurance and insurance related receivables 16.9 19.3 Restricted cash - vessel construction obligations 2.3 2.3 Other 18.4 19.6 Total $ 183.3 $ 188.9 Income tax receivables primarily include a federal income tax refund related to the Company’s 2021 federal tax return of $118.6 million and other income tax receivables. On April 19, 2024, the Company received the federal income tax refund of Capital Construction Fund Investments: Capital Construction Fund (“CCF”) investments are held in fixed-rate U.S. Treasuries with various maturity dates of up to three years. These held-to-maturity debt securities are initially recognized at cost and subsequently measured at accreted cost, less any expected credit losses. The accreted cost is adjusted for accretion of discounts to maturity. The Company has classified these securities as held-to-maturity as the Company has the intent and ability to hold such securities until maturity. 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: March 31, Ocean Transportation (in millions) (1) 2024 2023 Ocean Transportation services $ 565.8 $ 539.5 Terminal and other related services 8.7 6.9 Fuel sales 2.9 2.9 Vessel management and related services 1.6 1.7 Total $ 579.0 $ 551.0 (1) Ocean Transportation revenue transactions are primarily denominated in U.S. dollars except for less than 3 percent of Ocean Transportation services 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 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. March 31, Logistics (in millions) (1) 2024 2023 Transportation Brokerage and Freight Forwarding services $ 127.4 $ 137.7 Warehousing and distribution services 9.1 9.6 Supply chain management and other services 6.6 6.5 Total $ 143.1 $ 153.8 (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. ◾ 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. Capitalized Interest: The Company capitalizes interest costs during the period the qualified assets are being readied for their intended use. The Company determined that the vessel construction costs are considered qualifying assets for the purposes of capitalizing interest on these assets. The amount of capitalized interest is calculated based on the amount of expenditures incurred related to the construction of these vessels using a weighted average interest rate. The weighted average interest rate is determined using the Company’s average borrowings outstanding during the period. Capitalized interest is included in vessel construction in progress in property and equipment in the Company’s Condensed Consolidated Balance Sheets (see Note 5). During the three months ended March 31, 2024 and 2023, the Company capitalized Dividends: The Company’s first quarter 2024 cash dividend of 7, 2024. On April 25, 2024, the Company’s Board of Directors declared a cash dividend of Repurchase of Shares: million. As of March 31, 2024, the maximum number of remaining shares that may be repurchased under the Company’s share repurchase program was approximately New Accounting Pronouncements: In November 2023, the Financial Accounting Standards Board (“FASB”) issued Accounting Standard Update (“ASU”) 2023-07, Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures (“ASU 2023-07”). ASU 2023-07 requires disclosure of incremental segment information on an annual and interim basis. The ASU is effective for fiscal years beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024, and requires retrospective application to all prior periods presented in the financial statements. Early adoption is permitted. The Company is currently evaluating the effects of adopting ASU 2023-07 but does not expect it will have a material impact on the Company’s consolidated financial statements. In December 2023, the FASB issued ASU 2023-09, Improvements to Income Tax Disclosures (“ASU 2023-09”). ASU 2023-09 requires disaggregated information about a reporting entity’s effective tax rate reconciliation as well as information on income taxes paid. ASU 2023-09 is effective for annual periods beginning after December 15, 2024, and interim periods within fiscal years beginning after December 15, 2025. The Company is currently evaluating the effects of adoption ASU 2023-09 but does not expect it to have a material impact on the Company’s consolidated financial statements. |
REPORTABLE SEGMENTS
REPORTABLE SEGMENTS | 3 Months Ended |
Mar. 31, 2024 | |
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 $46.6 million and $40.1 million for the three months ended March 31, 2024 and 2023, respectively, have been eliminated from operating revenues in the table below. Reportable segment financial information for the three months ended March 31, 2024 and 2023 are as follows: Three Months Ended March 31, (In millions) 2024 2023 Operating Revenue: Ocean Transportation (1) $ 579.0 $ 551.0 Logistics (2) 143.1 153.8 Total Operating Revenue $ 722.1 $ 704.8 Operating Income: Ocean Transportation (3) $ 27.6 $ 27.8 Logistics 9.3 10.9 Total Operating Income 36.9 38.7 Interest income 8.8 8.2 Interest expense (2.2) (4.5) Other income (expense), net 1.8 1.8 Income before Taxes 45.3 44.2 Income taxes (9.2) (10.2) Net Income $ 36.1 $ 34.0 (1) Ocean Transportation operating revenue excludes inter-segment revenue of $19.7 million and $16.1 million for the three months ended March 31, 2024 and 2023, respectively. (2) Logistics operating revenue excludes inter-segment revenue of $26.9 million and $24.0 million for the three months ended March 31, 2024 and 2023, respectively. (3) Ocean Transportation segment information includes $ 0.4 million and $(1.8) million of net income (loss) from the Company’s equity investment in SSAT for the three months ended March 31, 2024 and 2023, respectively. |
INVESTMENT IN SSAT
INVESTMENT IN SSAT | 3 Months Ended |
Mar. 31, 2024 | |
INVESTMENT IN SSAT | |
INVESTMENT IN SSAT | 4. INVESTMENT IN SSAT The Company’s investment in SSAT is described in Note 4 to the Consolidated Financial Statements included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2023. Condensed income statement information for SSAT for the three months ended March 31, 2024 and 2023 consisted of the following: Three Months Ended March 31, (In millions) 2024 2023 Operating revenue $ 270.3 $ 230.8 Operating costs and expenses (278.4) (235.9) Operating loss (8.1) (5.1) Net Loss (1) $ (3.8) $ (4.8) Company Share of SSAT’s Net Income (Loss) (2) $ 0.4 $ (1.8) (1) Includes earnings and losses from equity method investment held by SSAT less earnings and losses allocated to non-controlling interests. (2) The Company records its share of net income (loss) 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 $85.2 million and $85.5 million at March 31, 2024 and December 31, 2023, respectively. On March 1, 2024, SSAT completed the sale of 25 percent of its equity interest in SSA Terminals (Seattle Terminals), LLC (“SSAT ST”) to a third-party company. After the completion of this transaction, SSAT retains a percent in SSAT ST. As a result of this transaction, the Company recorded an increase in its investment in SSAT of approximately |
PROPERTY AND EQUIPMENT
PROPERTY AND EQUIPMENT | 3 Months Ended |
Mar. 31, 2024 | |
PROPERTY AND EQUIPMENT | |
PROPERTY AND EQUIPMENT | 5. PROPERTY AND EQUIPMENT Property and equipment as of March 31, 2024 and December 31, 2023 consisted of the following: March 31, December 31, (In millions) 2024 2023 Cost: Vessels $ 2,329.3 $ 2,323.4 Containers and equipment 859.5 845.0 Terminal facilities and other property 148.9 148.0 New vessel construction in progress 104.3 103.1 Other construction in progress 93.9 67.7 Total Property and Equipment 3,535.9 3,487.2 Less: Accumulated Depreciation (1,420.2) (1,397.3) Total Property and Equipment, net $ 2,115.7 $ 2,089.9 New vessel construction in progress at March 31, 2024 and December 31, 2023 includes milestone progress payments, capitalized interest and other costs related to the construction of three new Jones Act vessels. |
GOODWILL AND INTANGIBLES
GOODWILL AND INTANGIBLES | 3 Months Ended |
Mar. 31, 2024 | |
GOODWILL AND INTANGIBLES | |
GOODWILL AND INTANGIBLES | 6. GOODWILL AND INTANGIBLES Goodwill by segment as of March 31, 2024 and December 31, 2023 consisted of the following: Ocean (In millions) Transportation Logistics Total Goodwill $ 222.6 $ 105.2 $ 327.8 Intangible assets as of March 31, 2024 and December 31, 2023 consisted of the following: March 31, December 31, (In millions) 2024 2023 Customer Relationships: Ocean Transportation $ 140.6 $ 140.6 Logistics 109.7 110.4 Total 250.3 251.0 Less: Accumulated Amortization (105.1) (101.9) Total Customer Relationships, net 145.2 149.1 Trade name – Logistics 27.3 27.3 Total Intangible Assets, net $ 172.5 $ 176.4 On February 27, 2023, the Company completed an asset acquisition consisting of Logistics customer relationship intangible assets for $16.5 million, which are being amortized over seven years. 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 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 2023 annual impairment tests, the Company concluded that an impairment triggering event did not occur during the three months ended March 31, 2024. 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 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. |
CAPITAL CONSTRUCTION FUND
CAPITAL CONSTRUCTION FUND | 3 Months Ended |
Mar. 31, 2024 | |
CAPITAL CONSTRUCTION FUND | |
CAPITAL CONSTRUCTION FUND | 7. CAPITAL CONSTRUCTION FUND The 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, 2023. Three Months Ended March 31, (In millions) 2024 2023 CCF Cash and Cash Equivalents: CCF cash and cash equivalents balance at beginning of period $ 599.4 $ 518.2 Cash deposits into the CCF — 100.0 Cash paid for purchase of U.S. Treasury debt securities and accrued interest (449.8) — Interest earned on deposits and investments, net 5.1 5.5 Total CCF cash and cash equivalents balance at end of period 154.7 623.7 CCF Investments: CCF investments balance at beginning of period — — Purchase of U.S. Treasury debt securities 448.1 — Accretion of investments 1.9 — Total CCF investments balance at end of period 450.0 — Accrued interest earned on Cash and Cash Equivalents, and Investments at end of period: 2.1 — Total CCF cash and cash equivalents, and investments balance at end of period $ 606.8 $ 623.7 CCF Cash and Cash Equivalents: Cash on deposit in the CCF cash and cash equivalents account is invested in a short-term U.S. Treasury obligations fund with daily liquidity. At March 31, 2024, short-term securities held within this account had a weighted average life of 77 days . The Company had CCF Investments: In February 2024, the Company purchased approximately million using CCF cash. The fixed-rate debt securities were purchased at a discount and have various maturity dates of up to 3 years . The cost of investments is adjusted for accretion of the discount until the securities mature. Such accretion is included in interest income in the Condensed Consolidated Statements of Income and Comprehensive Income. As of March 31, 2024, the Company had As of March 31, 2024, CCF investments maturities are as follows: As of March 31, 2024 Year (in millions) Cost Fair Value Remainder of 2024 $ 47.0 $ 46.9 2025 186.3 185.7 2026 164.5 163.6 2027 52.2 51.9 Total CCF investments $ 450.0 $ 448.1 CCF cash and cash equivalents, and investments are classified as a long-term asset on the Company’s Condensed Consolidated Balance Sheets as the Company intends to use withdrawals to fund qualified milestone progress payments for the construction of three new Jones Act vessels. CCF Assigned Accounts Receivable: Three Months Ended March 31, (In millions) 2024 2023 CCF assigned accounts receivable balance at beginning of period $ 218.1 $ 9.9 Assigned accounts receivable — 200.0 Interest earned on assigned accounts receivable 3.2 — CCF assigned accounts receivable balance at end of period $ 221.3 $ 209.9 During the three months ended March 31, 2023, the Company pledged $200.0 million of accounts receivable into the CCF. The Company did not pledge any accounts receivable into the CCF during the three months ended March 31, 2024. million were 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. |
DEBT
DEBT | 3 Months Ended |
Mar. 31, 2024 | |
DEBT | |
DEBT | 8. DEBT As of March 31, 2024 and December 31, 2023, the Company’s debt consisted of the following: March 31, December 31, (In millions) 2024 2023 Private Placement Term Loans: 3.37 %, payable through 2027 $ 46.2 $ 46.2 3.14 %, payable through 2031 107.3 114.4 Title XI Debt: 1.22 %, payable through 2043 158.2 158.2 1.35 %, payable through 2044 118.8 121.8 Total Debt 430.5 440.6 Less: Current portion (39.7) (39.7) Total Long-term Debt 390.8 400.9 Less: Deferred loan fees (11.4) (11.6) Total Long-term Debt, net of deferred loan fees $ 379.4 $ 389.3 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, 2023. Revolving Credit Facility: The Company’s revolving credit facility has committed available borrowing of up to 31, 2026. As of March 31, 2024, the Company had million of remaining borrowing availability under the revolving credit facility. 31, 2024. There were Title XI Bonds: On January 27, 2023, the Company prepaid percent Title XI Bond representing all of the remaining outstanding principal for this bond. On March 3, 2023, the Company also prepaid Debt Security and Guarantees: All of the debt of the Company and MatNav, including related guarantees, as of March 31, 2024 was unsecured, except for the Title XI debt. Debt Maturities: As of March 31, 2024, debt maturities during the next five years and thereafter are as follows: As of Year (in millions) March 31, 2024 Remainder of 2024 $ 29.6 2025 39.7 2026 39.7 2027 39.7 2028 28.2 Thereafter 253.6 Total Debt $ 430.5 |
LEASES
LEASES | 3 Months Ended |
Mar. 31, 2024 | |
LEASES | |
LEASES | 9. 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, 2023. Components of Lease Cost: Components of lease cost recorded in the Company’s Condensed Consolidated Statement of Income and Comprehensive Income for the three months ended March 31, 2024 and 2023 consisted of the following: Three Months Ended March 31, (In millions) 2024 2023 Operating lease cost $ 35.9 $ 41.8 Short-term lease cost 2.0 0.2 Variable lease cost 0.2 0.2 Total lease cost $ 38.1 $ 42.2 Maturities of operating lease liabilities at March 31, 2024 are as follows: As of Year (in millions) March 31, 2024 Remainder of 2024 $ 109.9 2025 85.4 2026 36.6 2027 19.8 2028 10.7 Thereafter 52.1 Total lease payments 314.5 Less: Interest (33.9) Present value of operating lease liabilities 280.6 Less: Short-term portion (131.7) Long-term operating lease liabilities $ 148.9 |
ACCUMULATED OTHER COMPREHENSIVE
ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS) | 3 Months Ended |
Mar. 31, 2024 | |
ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS) | |
ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS) | 10. ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS) Changes in accumulated other comprehensive income (loss) by component, net of tax, for the three months ended March 31, 2024 consisted of the following: Accumulated Post- Non- Other Pension Retirement Qualified Comprehensive (In millions) Benefits Benefits Plans Other Income (Loss) Balance at December 31, 2023 $ (20.3) $ 11.0 $ (0.2) $ 1.3 $ (8.2) Amortization of prior service cost — (0.7) — — (0.7) Amortization of net gain (loss) 0.1 (0.2) — — (0.1) Foreign currency exchange — — — (0.9) (0.9) Other adjustments — — — 0.1 0.1 Balance at March 31, 2024 $ (20.2) $ 10.1 $ (0.2) $ 0.5 $ (9.8) Changes in accumulated other comprehensive income (loss) by component, net of tax, for the three months ended March 31, 2023 consisted of the following: Accumulated Post- Non- Other Pension Retirement Qualified Comprehensive (In millions) Benefits Benefits Plans Other Income (Loss) Balance at December 31, 2022 $ (25.8) $ 18.7 $ 0.1 $ 0.1 $ (6.9) Amortization of prior service cost — (0.7) — — (0.7) Amortization of net gain (loss) 0.3 (0.4) — — (0.1) Foreign currency exchange — — — (0.3) (0.3) Other adjustments — — — 1.7 1.7 Balance at March 31, 2023 $ (25.5) $ 17.6 $ 0.1 $ 1.5 $ (6.3) |
FAIR VALUE OF FINANCIAL INSTRUM
FAIR VALUE OF FINANCIAL INSTRUMENTS | 3 Months Ended |
Mar. 31, 2024 | |
FAIR VALUE OF FINANCIAL INSTRUMENTS | |
FAIR VALUE OF FINANCIAL INSTRUMENTS | 11. 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 carrying value and fair value of the Company’s financial instruments as of March 31, 2024 and December 31, 2023 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) March 31, 2024 Fair Value Measurements at March 31, 2024 Cash and cash equivalents $ 25.9 $ 25.9 $ 25.9 $ — $ — Restricted cash $ 2.3 $ 2.3 $ 2.3 $ — $ — CCF - Cash and cash equivalent $ 156.8 $ 156.8 $ 156.8 $ — $ — CCF - Investments $ 450.0 $ 448.1 $ 448.1 $ — $ — Fixed rate debt $ 430.5 $ 345.8 $ — $ 345.8 $ — (In millions) December 31, 2023 Fair Value Measurements at December 31, 2023 Cash and cash equivalents $ 134.0 $ 134.0 $ 134.0 $ — $ — Restricted cash $ 2.3 $ 2.3 $ 2.3 $ — $ — CCF - Cash and cash equivalent $ 599.4 $ 599.4 $ 599.4 $ — $ — Fixed rate debt $ 440.6 $ 359.9 $ — $ 359.9 $ — The Company uses Level 1 inputs for the fair values of its cash and cash equivalents, restricted cash, and CCF cash and cash equivalents and investments, and Level 2 inputs for fixed rate debt. The fair values of cash and cash equivalents, restricted cash, and cash and cash equivalents in the CCF approximate their carrying values due to the nature of the instruments. The fair value of investments in the CCF is calculated based upon quoted prices available in active market. 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. |
EARNINGS PER SHARE
EARNINGS PER SHARE | 3 Months Ended |
Mar. 31, 2024 | |
EARNINGS PER SHARE | |
EARNINGS PER SHARE | 12. 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 March 31, 2024 and 2023. The computations for basic and diluted earnings per share for the three months ended March 31, 2024 and 2023 are as follows: Three Months Ended March 31, 2024 Three Months Ended March 31, 2023 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: $ 36.1 34.4 $ 1.05 $ 34.0 36.1 $ 0.94 Effect of Dilutive Securities: — 0.2 (0.01) — 0.2 — Diluted: $ 36.1 34.6 $ 1.04 $ 34.0 36.3 $ 0.94 |
SHARE-BASED COMPENSATION
SHARE-BASED COMPENSATION | 3 Months Ended |
Mar. 31, 2024 | |
SHARE-BASED COMPENSATION | |
SHARE-BASED COMPENSATION | 13. SHARE-BASED COMPENSATION The Company granted time-based restricted stock units and performance-based shares to certain of its employees totaling approximately 144,700 shares with a weighted average grant date fair value of $122.79 per share during the three months ended March 31, 2024. 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 $5.7 million and $4.6 million for the three months ended March 31, 2024 and 2023, 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 | 3 Months Ended |
Mar. 31, 2024 | |
PENSION AND POST-RETIREMENT PLANS | |
PENSION AND POST-RETIREMENT PLANS | 14. 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, 2023 . 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 months ended March 31, 2024 and 2023 consisted of the following: Pension Benefits Post-retirement Benefits Three Months Ended March 31, Three Months Ended March 31, (In millions) 2024 2023 2024 2023 Components of net periodic benefit cost (credit): Service cost $ 0.9 $ 1.0 $ 0.1 $ 0.1 Interest cost 2.4 2.5 0.3 0.2 Expected return on plan assets (3.8) (3.7) — — Amortization of net loss (gain) 0.1 0.3 (0.2) (0.5) Amortization of prior service credit — — (0.9) (0.9) Net periodic benefit cost (credit) $ (0.4) $ 0.1 $ (0.7) $ (1.1) |
COMMITMENTS AND CONTINGENCIES
COMMITMENTS AND CONTINGENCIES | 3 Months Ended |
Mar. 31, 2024 | |
COMMITMENTS AND CONTINGENCIES | |
COMMITMENTS AND CONTINGENCIES | 15. COMMITMENTS AND CONTINGENCIES Environmental Matters: The Company’s Ocean Transportation business has certain risks that could result in expenditures for environmental remediation. The Company believes that based on all information available to it, the Company is currently in compliance, in all material respects, with applicable environmental laws and regulations. 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. |
GENERAL AND SIGNIFICANT ACCOU_2
GENERAL AND SIGNIFICANT ACCOUNTING POLICIES (Policies) | 3 Months Ended |
Mar. 31, 2024 | |
GENERAL AND 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, 2023, filed with the Securities and Exchange Commission (“SEC”) on February 23, 2024. |
Fiscal Year | Fiscal Period: The period end for Matson covered by this report is March 31, 2024. The period end for MatNav and its subsidiaries covered by this report is March 29, 2024. |
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, 2023. |
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 and other receivables; legal contingencies; insurance reserves and other related liabilities; contingent acquisition related consideration; accrual estimates; pension and post-retirement estimates; multi-employer withdrawal liabilities; operating lease assets and liabilities; income (loss) from SSAT; and income taxes. Future results could be materially affected if actual results differ from these estimates and assumptions. |
Prepaid Expenses and Other Assets | Prepaid Expenses and Other Assets: March 31, December 31, Prepaid Expenses and Other Assets (in millions) 2024 2023 Income tax receivables, net $ 119.7 $ 125.2 Prepaid fuel 26.0 22.5 Prepaid insurance and insurance related receivables 16.9 19.3 Restricted cash - vessel construction obligations 2.3 2.3 Other 18.4 19.6 Total $ 183.3 $ 188.9 Income tax receivables primarily include a federal income tax refund related to the Company’s 2021 federal tax return of $118.6 million and other income tax receivables. On April 19, 2024, the Company received the federal income tax refund of |
Capital Construction Fund Investments | Capital Construction Fund Investments: Capital Construction Fund (“CCF”) investments are held in fixed-rate U.S. Treasuries with various maturity dates of up to three years. These held-to-maturity debt securities are initially recognized at cost and subsequently measured at accreted cost, less any expected credit losses. The accreted cost is adjusted for accretion of discounts to maturity. The Company has classified these securities as held-to-maturity as the Company has the intent and ability to hold such securities until maturity. |
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: March 31, Ocean Transportation (in millions) (1) 2024 2023 Ocean Transportation services $ 565.8 $ 539.5 Terminal and other related services 8.7 6.9 Fuel sales 2.9 2.9 Vessel management and related services 1.6 1.7 Total $ 579.0 $ 551.0 (1) Ocean Transportation revenue transactions are primarily denominated in U.S. dollars except for less than 3 percent of Ocean Transportation services 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 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. March 31, Logistics (in millions) (1) 2024 2023 Transportation Brokerage and Freight Forwarding services $ 127.4 $ 137.7 Warehousing and distribution services 9.1 9.6 Supply chain management and other services 6.6 6.5 Total $ 143.1 $ 153.8 (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. ◾ 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. |
Capitalized Interest | Capitalized Interest: The Company capitalizes interest costs during the period the qualified assets are being readied for their intended use. The Company determined that the vessel construction costs are considered qualifying assets for the purposes of capitalizing interest on these assets. The amount of capitalized interest is calculated based on the amount of expenditures incurred related to the construction of these vessels using a weighted average interest rate. The weighted average interest rate is determined using the Company’s average borrowings outstanding during the period. Capitalized interest is included in vessel construction in progress in property and equipment in the Company’s Condensed Consolidated Balance Sheets (see Note 5). During the three months ended March 31, 2024 and 2023, the Company capitalized |
Dividends | Dividends: The Company’s first quarter 2024 cash dividend of 7, 2024. On April 25, 2024, the Company’s Board of Directors declared a cash dividend of |
Repurchase of Shares | Repurchase of Shares: million. As of March 31, 2024, the maximum number of remaining shares that may be repurchased under the Company’s share repurchase program was approximately |
New Accounting Pronouncements | New Accounting Pronouncements: In November 2023, the Financial Accounting Standards Board (“FASB”) issued Accounting Standard Update (“ASU”) 2023-07, Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures (“ASU 2023-07”). ASU 2023-07 requires disclosure of incremental segment information on an annual and interim basis. The ASU is effective for fiscal years beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024, and requires retrospective application to all prior periods presented in the financial statements. Early adoption is permitted. The Company is currently evaluating the effects of adopting ASU 2023-07 but does not expect it will have a material impact on the Company’s consolidated financial statements. In December 2023, the FASB issued ASU 2023-09, Improvements to Income Tax Disclosures (“ASU 2023-09”). ASU 2023-09 requires disaggregated information about a reporting entity’s effective tax rate reconciliation as well as information on income taxes paid. ASU 2023-09 is effective for annual periods beginning after December 15, 2024, and interim periods within fiscal years beginning after December 15, 2025. The Company is currently evaluating the effects of adoption ASU 2023-09 but does not expect it to have a material impact on the Company’s consolidated financial statements. |
GENERAL AND SIGNIFICANT ACCOU_3
GENERAL AND SIGNIFICANT ACCOUNTING POLICIES (Tables) | 3 Months Ended |
Mar. 31, 2024 | |
Schedule of prepaid expenses and other assets | March 31, December 31, Prepaid Expenses and Other Assets (in millions) 2024 2023 Income tax receivables, net $ 119.7 $ 125.2 Prepaid fuel 26.0 22.5 Prepaid insurance and insurance related receivables 16.9 19.3 Restricted cash - vessel construction obligations 2.3 2.3 Other 18.4 19.6 Total $ 183.3 $ 188.9 |
Ocean Transportation | |
Schedule of principal revenue generating activities by segment | March 31, Ocean Transportation (in millions) (1) 2024 2023 Ocean Transportation services $ 565.8 $ 539.5 Terminal and other related services 8.7 6.9 Fuel sales 2.9 2.9 Vessel management and related services 1.6 1.7 Total $ 579.0 $ 551.0 (1) Ocean Transportation revenue transactions are primarily denominated in U.S. dollars except for less than 3 percent of Ocean Transportation services 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 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 | March 31, Logistics (in millions) (1) 2024 2023 Transportation Brokerage and Freight Forwarding services $ 127.4 $ 137.7 Warehousing and distribution services 9.1 9.6 Supply chain management and other services 6.6 6.5 Total $ 143.1 $ 153.8 (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. ◾ 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) | 3 Months Ended |
Mar. 31, 2024 | |
REPORTABLE SEGMENTS | |
Schedule of reportable segment financial information | Three Months Ended March 31, (In millions) 2024 2023 Operating Revenue: Ocean Transportation (1) $ 579.0 $ 551.0 Logistics (2) 143.1 153.8 Total Operating Revenue $ 722.1 $ 704.8 Operating Income: Ocean Transportation (3) $ 27.6 $ 27.8 Logistics 9.3 10.9 Total Operating Income 36.9 38.7 Interest income 8.8 8.2 Interest expense (2.2) (4.5) Other income (expense), net 1.8 1.8 Income before Taxes 45.3 44.2 Income taxes (9.2) (10.2) Net Income $ 36.1 $ 34.0 (1) Ocean Transportation operating revenue excludes inter-segment revenue of $19.7 million and $16.1 million for the three months ended March 31, 2024 and 2023, respectively. (2) Logistics operating revenue excludes inter-segment revenue of $26.9 million and $24.0 million for the three months ended March 31, 2024 and 2023, respectively. (3) Ocean Transportation segment information includes $ 0.4 million and $(1.8) million of net income (loss) from the Company’s equity investment in SSAT for the three months ended March 31, 2024 and 2023, respectively. |
INVESTMENT IN SSAT (Tables)
INVESTMENT IN SSAT (Tables) | 3 Months Ended |
Mar. 31, 2024 | |
INVESTMENT IN SSAT | |
Schedule of condensed income statement information for SSAT | Three Months Ended March 31, (In millions) 2024 2023 Operating revenue $ 270.3 $ 230.8 Operating costs and expenses (278.4) (235.9) Operating loss (8.1) (5.1) Net Loss (1) $ (3.8) $ (4.8) Company Share of SSAT’s Net Income (Loss) (2) $ 0.4 $ (1.8) (1) Includes earnings and losses from equity method investment held by SSAT less earnings and losses allocated to non-controlling interests. (2) The Company records its share of net income (loss) from SSAT in costs and expenses in the Condensed Consolidated Statement of Income and Comprehensive Income due to the nature of SSAT’s operations. |
PROPERTY AND EQUIPMENT (Tables)
PROPERTY AND EQUIPMENT (Tables) | 3 Months Ended |
Mar. 31, 2024 | |
PROPERTY AND EQUIPMENT | |
Schedule of property and equipment | March 31, December 31, (In millions) 2024 2023 Cost: Vessels $ 2,329.3 $ 2,323.4 Containers and equipment 859.5 845.0 Terminal facilities and other property 148.9 148.0 New vessel construction in progress 104.3 103.1 Other construction in progress 93.9 67.7 Total Property and Equipment 3,535.9 3,487.2 Less: Accumulated Depreciation (1,420.2) (1,397.3) Total Property and Equipment, net $ 2,115.7 $ 2,089.9 |
GOODWILL AND INTANGIBLES (Table
GOODWILL AND INTANGIBLES (Tables) | 3 Months Ended |
Mar. 31, 2024 | |
GOODWILL AND INTANGIBLES | |
Schedule of goodwill | Ocean (In millions) Transportation Logistics Total Goodwill $ 222.6 $ 105.2 $ 327.8 |
Schedule of intangible assets | March 31, December 31, (In millions) 2024 2023 Customer Relationships: Ocean Transportation $ 140.6 $ 140.6 Logistics 109.7 110.4 Total 250.3 251.0 Less: Accumulated Amortization (105.1) (101.9) Total Customer Relationships, net 145.2 149.1 Trade name – Logistics 27.3 27.3 Total Intangible Assets, net $ 172.5 $ 176.4 |
CAPITAL CONSTRUCTION FUND (Tabl
CAPITAL CONSTRUCTION FUND (Tables) | 3 Months Ended |
Mar. 31, 2024 | |
CAPITAL CONSTRUCTION FUND | |
Schedule of capital construction fund | Three Months Ended March 31, (In millions) 2024 2023 CCF Cash and Cash Equivalents: CCF cash and cash equivalents balance at beginning of period $ 599.4 $ 518.2 Cash deposits into the CCF — 100.0 Cash paid for purchase of U.S. Treasury debt securities and accrued interest (449.8) — Interest earned on deposits and investments, net 5.1 5.5 Total CCF cash and cash equivalents balance at end of period 154.7 623.7 CCF Investments: CCF investments balance at beginning of period — — Purchase of U.S. Treasury debt securities 448.1 — Accretion of investments 1.9 — Total CCF investments balance at end of period 450.0 — Accrued interest earned on Cash and Cash Equivalents, and Investments at end of period: 2.1 — Total CCF cash and cash equivalents, and investments balance at end of period $ 606.8 $ 623.7 |
Schedule of maturities of capital construction fund investments | As of March 31, 2024 Year (in millions) Cost Fair Value Remainder of 2024 $ 47.0 $ 46.9 2025 186.3 185.7 2026 164.5 163.6 2027 52.2 51.9 Total CCF investments $ 450.0 $ 448.1 |
Schedule of CCF assigned accounts receivable | Three Months Ended March 31, (In millions) 2024 2023 CCF assigned accounts receivable balance at beginning of period $ 218.1 $ 9.9 Assigned accounts receivable — 200.0 Interest earned on assigned accounts receivable 3.2 — CCF assigned accounts receivable balance at end of period $ 221.3 $ 209.9 |
DEBT (Tables)
DEBT (Tables) | 3 Months Ended |
Mar. 31, 2024 | |
DEBT | |
Schedule of debt | March 31, December 31, (In millions) 2024 2023 Private Placement Term Loans: 3.37 %, payable through 2027 $ 46.2 $ 46.2 3.14 %, payable through 2031 107.3 114.4 Title XI Debt: 1.22 %, payable through 2043 158.2 158.2 1.35 %, payable through 2044 118.8 121.8 Total Debt 430.5 440.6 Less: Current portion (39.7) (39.7) Total Long-term Debt 390.8 400.9 Less: Deferred loan fees (11.4) (11.6) Total Long-term Debt, net of deferred loan fees $ 379.4 $ 389.3 |
Schedule of maturities of debt | As of Year (in millions) March 31, 2024 Remainder of 2024 $ 29.6 2025 39.7 2026 39.7 2027 39.7 2028 28.2 Thereafter 253.6 Total Debt $ 430.5 |
LEASES (Tables)
LEASES (Tables) | 3 Months Ended |
Mar. 31, 2024 | |
LEASES | |
Components of Lease Cost | Three Months Ended March 31, (In millions) 2024 2023 Operating lease cost $ 35.9 $ 41.8 Short-term lease cost 2.0 0.2 Variable lease cost 0.2 0.2 Total lease cost $ 38.1 $ 42.2 |
Summary of maturities of operating lease liabilities | As of Year (in millions) March 31, 2024 Remainder of 2024 $ 109.9 2025 85.4 2026 36.6 2027 19.8 2028 10.7 Thereafter 52.1 Total lease payments 314.5 Less: Interest (33.9) Present value of operating lease liabilities 280.6 Less: Short-term portion (131.7) Long-term operating lease liabilities $ 148.9 |
ACCUMULATED OTHER COMPREHENSI_2
ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS) (Tables) | 3 Months Ended |
Mar. 31, 2024 | |
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 three months ended March 31, 2024 consisted of the following: Accumulated Post- Non- Other Pension Retirement Qualified Comprehensive (In millions) Benefits Benefits Plans Other Income (Loss) Balance at December 31, 2023 $ (20.3) $ 11.0 $ (0.2) $ 1.3 $ (8.2) Amortization of prior service cost — (0.7) — — (0.7) Amortization of net gain (loss) 0.1 (0.2) — — (0.1) Foreign currency exchange — — — (0.9) (0.9) Other adjustments — — — 0.1 0.1 Balance at March 31, 2024 $ (20.2) $ 10.1 $ (0.2) $ 0.5 $ (9.8) Changes in accumulated other comprehensive income (loss) by component, net of tax, for the three months ended March 31, 2023 consisted of the following: Accumulated Post- Non- Other Pension Retirement Qualified Comprehensive (In millions) Benefits Benefits Plans Other Income (Loss) Balance at December 31, 2022 $ (25.8) $ 18.7 $ 0.1 $ 0.1 $ (6.9) Amortization of prior service cost — (0.7) — — (0.7) Amortization of net gain (loss) 0.3 (0.4) — — (0.1) Foreign currency exchange — — — (0.3) (0.3) Other adjustments — — — 1.7 1.7 Balance at March 31, 2023 $ (25.5) $ 17.6 $ 0.1 $ 1.5 $ (6.3) |
FAIR VALUE OF FINANCIAL INSTR_2
FAIR VALUE OF FINANCIAL INSTRUMENTS (Tables) | 3 Months Ended |
Mar. 31, 2024 | |
FAIR VALUE OF FINANCIAL INSTRUMENTS | |
Schedule of fair value measurement | Quoted Prices in Significant Significant Total Active Markets Observable Unobservable Carrying Value Total (Level 1) Inputs (Level 2) Inputs (Level 3) (In millions) March 31, 2024 Fair Value Measurements at March 31, 2024 Cash and cash equivalents $ 25.9 $ 25.9 $ 25.9 $ — $ — Restricted cash $ 2.3 $ 2.3 $ 2.3 $ — $ — CCF - Cash and cash equivalent $ 156.8 $ 156.8 $ 156.8 $ — $ — CCF - Investments $ 450.0 $ 448.1 $ 448.1 $ — $ — Fixed rate debt $ 430.5 $ 345.8 $ — $ 345.8 $ — (In millions) December 31, 2023 Fair Value Measurements at December 31, 2023 Cash and cash equivalents $ 134.0 $ 134.0 $ 134.0 $ — $ — Restricted cash $ 2.3 $ 2.3 $ 2.3 $ — $ — CCF - Cash and cash equivalent $ 599.4 $ 599.4 $ 599.4 $ — $ — Fixed rate debt $ 440.6 $ 359.9 $ — $ 359.9 $ — |
EARNINGS PER SHARE (Tables)
EARNINGS PER SHARE (Tables) | 3 Months Ended |
Mar. 31, 2024 | |
EARNINGS PER SHARE | |
Schedule of basic and diluted earnings per share | The computations for basic and diluted earnings per share for the three months ended March 31, 2024 and 2023 are as follows: Three Months Ended March 31, 2024 Three Months Ended March 31, 2023 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: $ 36.1 34.4 $ 1.05 $ 34.0 36.1 $ 0.94 Effect of Dilutive Securities: — 0.2 (0.01) — 0.2 — Diluted: $ 36.1 34.6 $ 1.04 $ 34.0 36.3 $ 0.94 |
PENSION AND POST-RETIREMENT P_2
PENSION AND POST-RETIREMENT PLANS (Tables) | 3 Months Ended |
Mar. 31, 2024 | |
PENSION AND POST-RETIREMENT PLANS | |
Components of net periodic benefit cost (credit) | Pension Benefits Post-retirement Benefits Three Months Ended March 31, Three Months Ended March 31, (In millions) 2024 2023 2024 2023 Components of net periodic benefit cost (credit): Service cost $ 0.9 $ 1.0 $ 0.1 $ 0.1 Interest cost 2.4 2.5 0.3 0.2 Expected return on plan assets (3.8) (3.7) — — Amortization of net loss (gain) 0.1 0.3 (0.2) (0.5) Amortization of prior service credit — — (0.9) (0.9) Net periodic benefit cost (credit) $ (0.4) $ 0.1 $ (0.7) $ (1.1) |
DESCRIPTION OF THE BUSINESS (De
DESCRIPTION OF THE BUSINESS (Details) | 3 Months Ended |
Mar. 31, 2024 facility segment | |
DESCRIPTION OF THE BUSINESS | |
Number of reportable segments | segment | 2 |
Ocean Transportation | SSAT | |
DESCRIPTION OF THE BUSINESS | |
Ownership interest in SSAT (as a percent) | 35% |
Number of terminal facilities on which SSAT provides terminal and stevedoring services on the U.S. West Coast | 8 |
MatNav | SSAT | |
DESCRIPTION OF THE BUSINESS | |
Number of terminal facilities on which SSAT provides terminal and stevedoring services on the U.S. West Coast | 3 |
GENERAL AND SIGNIFICANT ACCOU_4
GENERAL AND SIGNIFICANT ACCOUNTING POLICIES - PREPAID EXPENSES AND OTHER ASSETS (Details) - USD ($) $ in Millions | Apr. 19, 2024 | Mar. 31, 2024 | Dec. 31, 2023 |
Prepaid Expenses and Other Assets: | |||
Income tax receivables, net | $ 119.7 | $ 125.2 | |
Prepaid fuel | 26 | 22.5 | |
Prepaid insurance and insurance related receivables | 16.9 | 19.3 | |
Restricted cash - vessel construction obligations | 2.3 | 2.3 | |
Other | 18.4 | 19.6 | |
Total | 183.3 | $ 188.9 | |
Other Long-term Assets | |||
Income taxes receivable | $ 118.6 | ||
Income tax refund | $ 118.6 | ||
Interest on income tax refund | $ 10.2 |
GENERAL AND SIGNIFICANT ACCOU_5
GENERAL AND SIGNIFICANT ACCOUNTING POLICIES- PROPERTY AND EQUIPMENT AND OTHER (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2024 | Mar. 31, 2023 | |
Vessels | ||
Capitalized Interest | ||
Interest Costs Capitalized | $ 0.8 | $ 0.4 |
GENERAL AND SIGNIFICANT ACCOU_6
GENERAL AND SIGNIFICANT ACCOUNTING POLICIES ACCOUNTING POLICIES - RECOGNITION OF REVENUES AND EXPENSES (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2024 | Mar. 31, 2023 | |
Total | $ 722.1 | $ 704.8 |
Ocean Transportation | ||
Ocean Transportation services | 565.8 | 539.5 |
Terminal and other related services | 8.7 | 6.9 |
Fuel sales | 2.9 | 2.9 |
Vessel management and related services | 1.6 | 1.7 |
Total | $ 579 | $ 551 |
Percentage of ocean transportation revenues and fuel sales denominated in foreign currency | 3% | 3% |
Logistics | ||
Transportation Brokerage and Freight Forwarding services | $ 127.4 | $ 137.7 |
Warehousing and distribution services | 9.1 | 9.6 |
Supply chain management and other services | 6.6 | 6.5 |
Total | $ 143.1 | $ 153.8 |
Percentage of transportation brokerage and freight forwarding services revenue denominated in foreign currency | 3% | 3% |
GENERAL AND SIGNIFICANT ACCOU_7
GENERAL AND SIGNIFICANT ACCOUNTING POLICIES - DIVIDENDS AND OTHERS (Details) - USD ($) $ / shares in Units, shares in Millions, $ in Millions | 3 Months Ended | ||
Apr. 25, 2024 | Mar. 31, 2024 | Mar. 31, 2023 | |
Per Common Share Amount | |||
Dividends (in dollars per share) | $ 0.32 | ||
Dividends declared per share (in dollars per share) | $ 0.32 | $ 0.32 | $ 0.31 |
Shares repurchased (in shares) | 0.4 | ||
Shares repurchased | $ 48.9 | $ 42.1 | |
Maximum number of shares remaining to be repurchased | 2 |
REPORTABLE SEGMENTS (Details)
REPORTABLE SEGMENTS (Details) $ in Millions | 3 Months Ended | ||
Mar. 31, 2024 USD ($) segment | Mar. 31, 2023 USD ($) | Dec. 31, 2023 USD ($) | |
Segment results | |||
Number of segments | segment | 2 | ||
Total Operating Revenue | $ 722.1 | $ 704.8 | |
Total Operating Income | 36.9 | 38.7 | |
Interest income | 8.8 | 8.2 | |
Interest expense | (2.2) | (4.5) | |
Other income (expense), net | 1.8 | 1.8 | |
Income before Taxes | 45.3 | 44.2 | |
Income taxes | (9.2) | (10.2) | |
Net Income | 36.1 | 34 | |
Deferred dry-docking amortization | 6.8 | 6.2 | |
Total Assets | 4,219.9 | $ 4,294.6 | |
Income (Loss) from SSAT | 0.4 | (1.8) | |
SSAT | |||
Segment results | |||
Income (Loss) from SSAT | 0.4 | (1.8) | |
Intersegment Eliminations | |||
Segment results | |||
Total Operating Revenue | 46.6 | 40.1 | |
Ocean Transportation | |||
Segment results | |||
Income (Loss) from SSAT | 0.4 | (1.8) | |
Ocean Transportation | Operating segments | |||
Segment results | |||
Total Operating Revenue | 579 | 551 | |
Total Operating Income | 27.6 | 27.8 | |
Ocean Transportation | Intersegment Eliminations | |||
Segment results | |||
Total Operating Revenue | 19.7 | 16.1 | |
Logistics | Operating segments | |||
Segment results | |||
Total Operating Revenue | 143.1 | 153.8 | |
Total Operating Income | 9.3 | 10.9 | |
Logistics | Intersegment Eliminations | |||
Segment results | |||
Total Operating Revenue | $ 26.9 | $ 24 |
INVESTMENT IN SSAT (Details)
INVESTMENT IN SSAT (Details) - USD ($) $ in Millions | 3 Months Ended | |||
Mar. 01, 2024 | Mar. 31, 2024 | Mar. 31, 2023 | Dec. 31, 2023 | |
Investments in affiliates | ||||
Investment in SSAT | $ 85.2 | $ 85.5 | ||
Financial information for equity method investment | ||||
Company Share of SSAT's Net Income (Loss) | 0.4 | $ (1.8) | ||
SSAT ST | ||||
Investments in affiliates | ||||
Ownership percentage, noncontrolling owner | 50% | |||
SSAT | ||||
Investments in affiliates | ||||
Investment in SSAT | 85.2 | $ 85.5 | ||
Increase in equity method investment in SSAT | $ 13.2 | |||
Equity Method Investments, Increase (decrease) in deferred income taxes expense (benefit), | 3.1 | |||
Equity method investments, increase (decrease) in retained earnings | $ 10.1 | |||
Financial information for equity method investment | ||||
Operating revenue | 270.3 | 230.8 | ||
Operating costs and expenses | (278.4) | (235.9) | ||
Operating loss | (8.1) | (5.1) | ||
Net Loss | (3.8) | (4.8) | ||
SSAT | ||||
Financial information for equity method investment | ||||
Company Share of SSAT's Net Income (Loss) | $ 0.4 | $ (1.8) | ||
SSAT | SSAT ST | ||||
Investments in affiliates | ||||
Percentage of interests sold in SSAT ST | 25% | |||
SSAT's ownership interest in SSAT ST (as a percent) | 50% |
PROPERTY AND EQUIPMENT (Details
PROPERTY AND EQUIPMENT (Details) $ in Millions | Mar. 31, 2024 USD ($) item | Dec. 31, 2023 USD ($) item |
Property and equipment | ||
Property and Equipment | $ 3,535.9 | $ 3,487.2 |
Less: Accumulated Depreciation | (1,420.2) | (1,397.3) |
Property and equipment, net | $ 2,115.7 | 2,089.9 |
Number of vessels under agreements for construction | item | 3 | |
Vessels | ||
Property and equipment | ||
Property and Equipment | $ 2,329.3 | 2,323.4 |
Containers and equipment | ||
Property and equipment | ||
Property and Equipment | 859.5 | 845 |
Terminal facilities and other property | ||
Property and equipment | ||
Property and Equipment | 148.9 | 148 |
Vessel construction in progress | ||
Property and equipment | ||
Property and Equipment | $ 104.3 | $ 103.1 |
Number of vessels under agreements for construction | item | 3 | 3 |
Other construction in progress | ||
Property and equipment | ||
Property and Equipment | $ 93.9 | $ 67.7 |
GOODWILL AND INTANGIBLE ASSETS
GOODWILL AND INTANGIBLE ASSETS - GOODWILL (Details) - USD ($) $ in Millions | Mar. 31, 2024 | Dec. 31, 2023 |
Goodwill [Line Items] | ||
Total Goodwill | $ 327.8 | $ 327.8 |
Ocean Transportation | ||
Goodwill [Line Items] | ||
Total Goodwill | 222.6 | |
Logistics | ||
Goodwill [Line Items] | ||
Total Goodwill | $ 105.2 |
GOODWILL AND INTANGIBLE ASSET_2
GOODWILL AND INTANGIBLE ASSETS - INTANGIBLE ASSETS (Details) - USD ($) $ in Millions | Feb. 27, 2023 | Mar. 31, 2024 | Dec. 31, 2023 |
Intangible assets | |||
Total Intangible Assets, net | $ 172.5 | $ 176.4 | |
Trade Names | |||
Intangible assets | |||
Indefinite-Lived intangible asset | 27.3 | 27.3 | |
Customer Relationships | |||
Intangible assets | |||
Expected useful life | 7 years | ||
Finite-Lived intangible assets acquired | $ 16.5 | ||
Total | 250.3 | 251 | |
Less: Accumulated Amortization | (105.1) | (101.9) | |
Total estimated amortization expense related to intangibles | 145.2 | 149.1 | |
Ocean Transportation | Customer Relationships | |||
Intangible assets | |||
Total | 140.6 | 140.6 | |
Logistics | Customer Relationships | |||
Intangible assets | |||
Total | $ 109.7 | $ 110.4 |
CAPITAL CONSTRUCTION FUND - Sum
CAPITAL CONSTRUCTION FUND - Summary of the activities of the CCF cash and cash equivalents, and investments account (Details) - USD ($) $ in Millions | 1 Months Ended | 3 Months Ended | ||
Feb. 29, 2024 | Mar. 31, 2024 | Mar. 31, 2023 | Dec. 31, 2023 | |
CCF Cash and Cash Equivalents: | ||||
CCF cash and cash equivalents balance at beginning of period | $ 599.4 | $ 518.2 | ||
Cash deposits into the CCF | 100 | |||
Cash paid for purchase of U.S. Treasury debt securities and accrued interest | (449.8) | |||
Interest earned on deposits and investments, net | 5.1 | 5.5 | ||
Total CCF cash and cash equivalents balance at end of period | 154.7 | 623.7 | ||
CCF Investments: | ||||
Purchase of U.S. Treasury debt securities | $ 448.1 | 448.1 | ||
Accretion of investments | 1.9 | |||
Total CCF investments balance at end of period | 450 | |||
Accrued interest earned on Cash and Cash Equivalents, and Investments at end of period: | 2.1 | |||
Total CCF cash and cash equivalents, and investments balance at end of period | $ 606.8 | $ 623.7 | $ 599.4 | |
Weighted average life of securities held within the fund | 77 days | |||
Capital construction fund, accrued interest on investments | $ 1.7 | |||
Debt security investments maturity term | 3 years |
CAPITAL CONSTRUCTION FUND - Inv
CAPITAL CONSTRUCTION FUND - Investment maturity (Details) $ in Millions | Mar. 31, 2024 USD ($) item |
CAPITAL CONSTRUCTION FUND | |
Remainder of 2024 | $ 47 |
2025 | 186.3 |
2026 | 164.5 |
2027 | 52.2 |
Total CCF investments | 450 |
Remainder of 2024 | 46.9 |
2025 | 185.7 |
2026 | 163.6 |
2027 | 51.9 |
Total CCF investments | $ 448.1 |
Number of vessels under agreements for construction | item | 3 |
CAPITAL CONSTRUCTION FUND - S_2
CAPITAL CONSTRUCTION FUND - Summary of the activities within the CCF Assigned receivables account (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2024 | Mar. 31, 2023 | |
CAPITAL CONSTRUCTION FUND | ||
CCF assigned receivables balance at beginning of period | $ 218.1 | $ 9.9 |
Assigned account receivables | 200 | |
Interest earned on assigned receivables | 3.2 | |
CCF assigned receivables balance at end of period | $ 221.3 | $ 209.9 |
CAPITAL CONSTRUCTION FUND (Deta
CAPITAL CONSTRUCTION FUND (Details) - USD ($) $ in Millions | Mar. 31, 2024 | Dec. 31, 2023 | Mar. 31, 2023 |
Accounts receivable, net | $ 302.8 | $ 279.4 | |
Eligible Accounts Receivable Assigned to CCF | |||
Accounts receivable, net | $ 221.3 | $ 218.1 | |
Amount pledged to capital construction fund | $ 200 |
DEBT - SUMMARY (Details)
DEBT - SUMMARY (Details) - USD ($) $ in Millions | Mar. 31, 2024 | Dec. 31, 2023 | Mar. 03, 2023 | Jan. 27, 2023 |
Debt | ||||
Total Debt | $ 430.5 | $ 440.6 | ||
Less: Current portion | (39.7) | (39.7) | ||
Total Long-term Debt | 390.8 | 400.9 | ||
Less: Deferred loan fees | (11.4) | (11.6) | ||
Total Long-term Debt, net of deferred loan fees | 379.4 | 389.3 | ||
3.37 %, payable through 2027 | ||||
Debt | ||||
Total Debt | $ 46.2 | 46.2 | ||
Interest rate (as a percent) | 3.37% | |||
3.14%, payable through 2031 | ||||
Debt | ||||
Total Debt | $ 107.3 | 114.4 | ||
Interest rate (as a percent) | 3.14% | |||
5.34 %, payable through 2028 | ||||
Debt | ||||
Interest rate (as a percent) | 5.34% | |||
5.27 %, payable through 2029 | ||||
Debt | ||||
Interest rate (as a percent) | 5.27% | |||
1.22 %, payable through 2043 | ||||
Debt | ||||
Total Debt | $ 158.2 | 158.2 | ||
Interest rate (as a percent) | 1.22% | |||
1.35 %, payable through 2044 | ||||
Debt | ||||
Total Debt | $ 118.8 | $ 121.8 | ||
Interest rate (as a percent) | 1.35% |
DEBT - REVOLVING CREDIT FACILIT
DEBT - REVOLVING CREDIT FACILITY (Details) - USD ($) $ in Millions | Mar. 03, 2023 | Jan. 27, 2023 | Mar. 31, 2024 | Dec. 31, 2023 |
Standby commercial letters of credit | ||||
Debt | ||||
Used portion of revolving credit facility | $ 5.8 | |||
Revolving Credit Facility | ||||
Debt | ||||
Maximum borrowing capacity under revolving credit facility | 650 | |||
Funds available under the revolving credit facility | 644.2 | |||
Used portion of revolving credit facility | $ 0 | $ 0 | ||
5.34 %, payable through 2028 | ||||
Debt | ||||
Repayment of debt | $ 12.1 | |||
Interest rate (as a percent) | 5.34% | |||
5.27 %, payable through 2029 | ||||
Debt | ||||
Repayment of debt | $ 14.3 | |||
Interest rate (as a percent) | 5.27% |
DEBT - MATURITIES (Details)
DEBT - MATURITIES (Details) - USD ($) $ in Millions | Mar. 31, 2024 | Dec. 31, 2023 |
Debt maturities | ||
Remainder of 2024 | $ 29.6 | |
2025 | 39.7 | |
2026 | 39.7 | |
2027 | 39.7 | |
2028 | 28.2 | |
Thereafter | 253.6 | |
Total Debt | $ 430.5 | $ 440.6 |
LEASES - COMPONENTS OF LEASE CO
LEASES - COMPONENTS OF LEASE COST (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2024 | Mar. 31, 2023 | |
Components of Lease Cost | ||
Operating lease cost | $ 35.9 | $ 41.8 |
Short-term lease cost | 2 | 0.2 |
Variable lease cost | 0.2 | 0.2 |
Total lease cost | $ 38.1 | $ 42.2 |
LEASES - MATURITIES OF OPERATIN
LEASES - MATURITIES OF OPERATING LEASE LIABILITIES (Details) - USD ($) $ in Millions | Mar. 31, 2024 | Dec. 31, 2023 |
Maturities of operating lease liabilities | ||
Remainder of 2024 | $ 109.9 | |
2025 | 85.4 | |
2026 | 36.6 | |
2027 | 19.8 | |
2028 | 10.7 | |
Thereafter | 52.1 | |
Total lease payments | 314.5 | |
Less: Interest | (33.9) | |
Present value of operating lease liabilities | 280.6 | |
Less: Short-term portion | (131.7) | $ (136.7) |
Long-term operating lease liabilities | $ 148.9 | $ 159.3 |
ACCUMULATED OTHER COMPREHENSI_3
ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS) (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2024 | Mar. 31, 2023 | |
Changes in accumulated other comprehensive income (loss) by component, net of taxes | ||
Balance at the beginning of the period | $ 2,400.7 | $ 2,296.9 |
Other adjustments | (0.8) | 1.4 |
Balance at the end of the period | 2,373.8 | 2,270.3 |
Pensions | ||
Changes in accumulated other comprehensive income (loss) by component, net of taxes | ||
Balance at the beginning of the period | (20.3) | (25.8) |
Amortization of net gain (loss) | 0.1 | 0.3 |
Balance at the end of the period | (20.2) | (25.5) |
Post Retirement | ||
Changes in accumulated other comprehensive income (loss) by component, net of taxes | ||
Balance at the beginning of the period | 11 | 18.7 |
Amortization of prior service cost | (0.7) | (0.7) |
Amortization of net gain (loss) | (0.2) | (0.4) |
Balance at the end of the period | 10.1 | 17.6 |
Non-Qualified Plans | ||
Changes in accumulated other comprehensive income (loss) by component, net of taxes | ||
Balance at the beginning of the period | (0.2) | 0.1 |
Balance at the end of the period | (0.2) | 0.1 |
Other | ||
Changes in accumulated other comprehensive income (loss) by component, net of taxes | ||
Balance at the beginning of the period | 1.3 | 0.1 |
Foreign currency exchange | (0.9) | (0.3) |
Other adjustments | 0.1 | 1.7 |
Balance at the end of the period | 0.5 | 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 | (8.2) | (6.9) |
Amortization of prior service cost | (0.7) | (0.7) |
Amortization of net gain (loss) | (0.1) | (0.1) |
Foreign currency exchange | (0.9) | (0.3) |
Other adjustments | 0.1 | 1.7 |
Balance at the end of the period | $ (9.8) | $ (6.3) |
FAIR VALUE OF FINANCIAL INSTR_3
FAIR VALUE OF FINANCIAL INSTRUMENTS (Details) - USD ($) $ in Millions | Mar. 31, 2024 | Dec. 31, 2023 | Mar. 31, 2023 |
Fair value of financial instruments | |||
Restricted Cash | $ 2.3 | $ 3.9 | |
Carrying value | |||
Fair value of financial instruments | |||
Cash and cash equivalents | 25.9 | $ 134 | |
Restricted Cash | 2.3 | 2.3 | |
CCF - Cash and cash equivalent | 156.8 | 599.4 | |
CCF - Investments | 450 | ||
Fixed rate debt | 430.5 | 440.6 | |
Fair Value Measurement | |||
Fair value of financial instruments | |||
Cash and cash equivalents | 25.9 | 134 | |
Restricted Cash | 2.3 | 2.3 | |
CCF - Cash and cash equivalent | 156.8 | 599.4 | |
CCF - Investments | 448.1 | ||
Fixed rate debt | 345.8 | 359.9 | |
Fair Value Measurement | Quoted Prices in Active Markets (Level 1) | |||
Fair value of financial instruments | |||
Cash and cash equivalents | 25.9 | 134 | |
Restricted Cash | 2.3 | 2.3 | |
CCF - Cash and cash equivalent | 156.8 | 599.4 | |
CCF - Investments | 448.1 | ||
Fair Value Measurement | Significant Observable Inputs (Level 2) | |||
Fair value of financial instruments | |||
Fixed rate debt | $ 345.8 | $ 359.9 |
EARNINGS PER SHARE (Details)
EARNINGS PER SHARE (Details) - USD ($) $ / shares in Units, shares in Millions, $ in Millions | 3 Months Ended | |
Mar. 31, 2024 | Mar. 31, 2023 | |
Net Income | ||
Net Income, Basic | $ 36.1 | $ 34 |
Net Income, Diluted | $ 36.1 | $ 34 |
Weighted Average Common Shares | ||
Basic (in shares) | 34.4 | 36.1 |
Effect of Dilutive Securities (in shares) | 0.2 | 0.2 |
Diluted (in shares) | 34.6 | 36.3 |
Per Common Share Amount | ||
Net income, Basic (in dollars per share) | $ 1.05 | $ 0.94 |
Effect of dilutive securities (in dollars per shares) | (0.01) | |
Net income, Diluted (in dollars per share) | $ 1.04 | $ 0.94 |
SHARE-BASED COMPENSATION (Detai
SHARE-BASED COMPENSATION (Details) - Time Based And Performance Based Shares - USD ($) $ / shares in Units, $ in Millions | 3 Months Ended | |
Mar. 31, 2024 | Mar. 31, 2023 | |
SHARE-BASED AWARDS | ||
Shares granted | 144,700 | |
Weighted average grant date fair value (in dollars per share) | $ 122.79 | |
Total unrecognized compensation cost | $ 37.4 | |
Unrecognized compensation cost over weighted average period to be recognized | 2 years 2 months 12 days | |
Selling, general and administrative expenses | ||
SHARE-BASED AWARDS | ||
Total stock-based compensation cost | $ 5.7 | $ 4.6 |
PENSION AND POST-RETIREMENT P_3
PENSION AND POST-RETIREMENT PLANS - COMPONENTS OF NET PERIODIC BENEFIT COST (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2024 | Mar. 31, 2023 | |
Pension Benefits | ||
Components of Net Periodic Benefit Cost (Credit): | ||
Service cost | $ 0.9 | $ 1 |
Interest cost | 2.4 | 2.5 |
Expected return on plan assets | (3.8) | (3.7) |
Amortization of net loss (gain) | 0.1 | 0.3 |
Net periodic benefit cost (credit) | (0.4) | 0.1 |
Post-retirement benefits | ||
Components of Net Periodic Benefit Cost (Credit): | ||
Service cost | 0.1 | 0.1 |
Interest cost | 0.3 | 0.2 |
Amortization of net loss (gain) | (0.2) | (0.5) |
Amortization of prior service credit | (0.9) | (0.9) |
Net periodic benefit cost (credit) | $ (0.7) | $ (1.1) |
Pay vs Performance Disclosure
Pay vs Performance Disclosure - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2024 | Mar. 31, 2023 | |
Pay vs Performance Disclosure | ||
Net Income (Loss) | $ 36.1 | $ 34 |
Insider Trading Arrangements
Insider Trading Arrangements | 3 Months Ended |
Mar. 31, 2024 | |
Trading Arrangements, by Individual | |
Rule 10b5-1 Arrangement Adopted | false |
Non-Rule 10b5-1 Arrangement Adopted | false |
Rule 10b5-1 Arrangement Terminated | false |
Non-Rule 10b5-1 Arrangement Terminated | false |