2024 ANNUAL REPORT
+ FORM 10-K
Board of
directors
Executive
management
Ages as of March 1, 2025
(a) Lead Independent Director
(b) Audit Committee Member
(c) Compensation Committee Member
(d) Nominating and Corporate Governance Committee Member
Stanley M. Kuriyama | 71
Retired Chairman of the
Board and Chief Executive
Offi cer, Alexander &
Baldwin, Inc. (a)
John P. Lauer | 64
Executive Vice President
and Chief Commercial
Offi cer
Vicente S. Angoco, Jr. | 58
Senior Vice President,
Alaska
Matthew J. Cox | 63
Chairman of the Board and
Chief Executive Offi cer,
Matson, Inc.
Peter T. Heilmann | 56
Executive Vice President,
Chief Administrative Offi cer
and General Counsel
Grace M. Cerocke | 46
Senior Vice President,
Finance, Matson Logistics
Meredith J. Ching | 68
Executive Vice President,
External Aff airs, Alexander
& Baldwin, Inc. (c)(d)
Joel M. Wine | 53
Executive Vice President
and Chief Financial Offi cer
Laura L. Rascon | 61
Senior Vice President,
Customer Experience
Constance H. Lau | 72
Retired President, Chief
Executive Offi cer and
Director, Hawaiian Electric
Industries, Inc. (b)(d)
Jason L. Taylor | 51
Senior Vice President,
Human Resources
Qiang Gao | 61
Senior Vice President,
Asia
John W. Sullivan | 71
Senior Vice President,
Vessel Operations and
Engineering
Bradley D. Tilden | 64
Retired Chairman and
Chief Executive Offi cer,
Alaska Air Group, Inc. (b)(c)
Christopher A. Scott | 51
Senior Vice President,
Transpacifi c Services
Jenai S. Wall | 66
Chairman and Chief
Executive Offi cer,
Foodland Super Market,
Limited (b)(d)
Leonard P. Isotoff | 53
Senior Vice President,
Pacifi c
Ku`uhaku T. Park | 58
Senior Vice President,
Government and
Community Relations
Rusty K. Rolfe | 67
Executive Vice President
and President, Matson
Logistics
Richard S. Kinney | 61
Senior Vice President,
Network Operations
Mark H. Fukunaga | 69
Executive Chairman and
former Chief Executive
Offi cer, Servco Pacifi c
Inc. (b)(c)
2024 was another strong year for Matson, as
our premium, expedited services resonated with
shippers amid continued global supply chain
disruptions. Coupled with a resilient U.S. economy
and ongoing consumer appetite for high-value
and time-sensitive goods, our results exceeded
expectations.
During the year, we renewed our commitment to
move freight better than anyone. With each voyage,
we strived to maintain on-time cargo availability
and premium customer service. In times of supply
chain disruption, Matson shines by putting our
assets and expertise to work for our customers
to fi nd solutions to their needs — both great and
small. When others fall short, Matson delivers.
To our
shareholders:
2024
Annual Report
In a few short years, we have
strengthened the Matson
brand by operating the two
fastest ocean Transpacifi c
services with best-in-class
on-time arrivals, reliability,
and customer service.
Matson earned $476.4 million in net
income and generated $767.8 million
in cash fl ow from operations in 2024,
signifi cantly outpacing 2023 returns. We
benefi ted from elevated freight rates and
heightened demand for our expedited
China-Long Beach (the CLX and MAX)
services, running these vessels full or
nearly so throughout the year.
And while we expect our Transpacifi c rates
to moderate in the coming year, underlying
demand for our expedited China service,
predicated on the growth of high-value
garments, e-goods and e-commerce, and
the conversion of air freight, is increasing.
Domestically, our core tradelanes (Hawaii,
Alaska, and Guam) continue to serve as
the backbone of our network and provide
critical effi ciencies and fl exibility for our
entire fl eet. And our growing Logistics
segment extends our reach further into
customers’ supply chains with end-to-end
solutions, providing a single source for
ocean, land, and intermodal transport.
Our year
in review
Multiple
demand
drivers for
our China
service
Signifi cant
cost savings
versus air
freight, without
meaningful
additional time
Fastest, most
reliable ocean
services out
of Shanghai
(the CLX
and MAX)
Only U.S.
customs-bonded
off -dock facility
on the West
Coast providing
quick turn times
High-touch
service
at origin
(Shanghai)
and destination
(Long Beach)
A differentiated and
expanding business model
The Matson brand has become synonymous
with speed, service, and reliability in
providing critical supply lifelines to
communities across the Pacific. During
the pandemic, we strengthened the Matson
brand through our operational excellence,
particularly in Asia. When supply chain
disruptions occurred, we delivered on
schedule with regularity. While those
less familiar with Matson may view us
as a recent success, our reputation
has been earned over decades of
voyages and millions of containers.
We focus on unique, niche businesses
where we can maintain and grow strong
market positions and long-term customer
relationships. From our first trade routes
to Hawaii, Matson has expanded to serve
Guam and the islands in the Western Pacific
region for almost 30 years and Alaska for
nearly a decade. Together, these trade routes
utilize our overlapping terminal network
along the U.S. West Coast, providing the
scale for cost-effective operations.
Logistics grew out of our ocean transportation
business, formed to coordinate the movement
of our intermodal containers inland and then
back to the port. We later added truckload
brokerage, warehousing, freight forwarding,
and supply chain management services,
while keeping the Matson ethos in each
service expansion. Most recently, Matson
and Logistics were recognized by Logistics
Management magazine for outstanding
performance in the publication’s annual
Quest for Quality Awards.
In early 2006, we launched the CLX, our
first ocean service from Shanghai, China
to Long Beach, California, to address
nascent demand for an expedited service.
The CLX offers customers a viable
alternative to air freight, with significantly
lower transportation costs and reduced
emissions, in exchange for a few extra
shipping days on the water. The service
is distinguished by its 10-day transit
time and unique destination services,
enhancing speed-to-market in an
otherwise commoditized ocean tradelane.
Based on strong customer demand for
the CLX during the pandemic, we doubled
our capacity in the Transpacific tradelane
by adding a second string of vessels
we call our MAX service. This allows us
to offer twice weekly departures from
Shanghai, grow our presence in China,
build on our well-established reputation,
and meet the rising e-commerce demand.
We also have a partnership with SSA
Terminals, LLC (“SSAT”) to support our
vessels with terminal and stevedoring
services at port. Today, SSAT provides our
CLX and MAX services with timely cargo
discharge to Shippers Transport Express,
the only U.S. customs-bonded off-dock
facility on the West Coast. This facility
reduces truck turn times, alleviates port
and terminal congestion, and offers our
customers faster access to their products.
In summary, we have built a business
that is financially diversified and
operationally integrated.
The need for speed
and reliability
Since its inception over 18 years ago,
demand for our China service has
significantly broadened due to our
differentiated value proposition,
superior performance, evolving
retail trends, and increased
complexity in global supply chains.
When we started our CLX service,
we carried an assortment of products,
including high-end apparel, footwear,
luggage, and furniture, for some of the
largest U.S. brick-and-mortar retailers.
Reliability was critical, as inventories
would change seasonally and predictably.
Long lead times for production and
shipment were the norm. We distinguished
our service through leading on-time
performance and service reliability in a
tradelane historically characterized by
underperformance in these key metrics.
With the advent of e-tailing, the
traditional retail experience expanded to
include “influencer” marketing and large
e-commerce platforms. The pandemic
accelerated these trends and necessitated
speed-to-market to meet customer
expectations. Manufacturing and inventory
management evolved to keep pace. Lead
times tightened from months to weeks.
Technology reduced production cycles
and “just-in-time” manufacturing became
common. Forecasted demand has given
way to pull-through manufacturing and
online orders now dictate demand.
With this added complexity came a greater
need for both speed and reliability —
areas where Matson excels. We operate
the two fastest Transpacific services
from Shanghai (the CLX and MAX)
supported by company-owned chassis,
containers, and reserve vessels for a
seamless, reliable customer experience.
And demand regularly exceeds our
capacity, leading to premium rates for
time-sensitive and high-value goods.
Going forward, we expect continued
evolution of the retail customer buying
experience, leading to e-commerce growth
and sales of high-value goods. Further, we
expect the ongoing conversion of air freight
to ocean transportation to accelerate, as
customers appreciate the lower cost and
reduced environmental footprint our service
offers, without a sacrifice in time to market.
We have been both at the convergence
and, in some cases, the leader, of these
fortuitous trends and fully expect to
advance our offerings in lock-step with
changes to the retail, manufacturing,
and distribution landscape.
EPS has
grown from
$1.08 to $13.93
Net income
has grown from
$45.9 million to
$476.4 million
EBITDA
has grown from
$168.8 million to
$738.9 million
Book value
has grown from
$279.9 million to
$2,652.0 million
Dividends
per share have
grown from
$0.93 to $1.32
Note: Compounded annual growth rate is abbreviated as CAGR. Earnings per share is abbreviated as
EPS. Earnings before interest, income taxes, depreciation, and amortization is abbreviated as EBITDA.
1. Measured from fi scal year ended December 31, 2012 to December 31, 2024.
23.7 %
CAGR
21.5 %
CAGR
13.1%
CAGR
20.6%
CAGR
41.9 %
INCREASE
Since our fi rst year
as a public company 1
In our view, return on invested capital (“ROIC”) is the best fi nancial
metric to measure our performance as both an operator and capital
allocator over the long run. For 2024, our ROIC was 15.1% and we
have averaged 16.4% since 2012. For added perspective, the chart
below shows our annual ROIC performance as well as the return of
capital as a percentage of cash fl ow from operations (“CFFO”).
CUMULATIVE CFFO DIVIDED BY CUMULATIVE RETURN OF CAPITAL BY YEAR
ROIC
Note: Return of capital is defi ned as the sum of share repurchases and dividends.
*Based on operations from July 1, 2012 through December 31, 2012.
*
01
02
Stewards of capital
Market Expansion Through
Mergers and Acquisitions
We strategically use our balance
sheet to propel our growth via
M&A. From 2015 to 2016, we
expanded into Alaska through
two significant acquisitions
totaling approximately $700
million. These acquisitions offered
highly complementary services,
a differentiated value proposition,
and a long-term opportunity for
growth. They were a natural fit
for Matson, adding new routes
for our vessels and leveraging
our operational expertise.
Long-Lived Assets
Create Sustainable,
Recurring Cash Flows
We make annual investments to
maintain the quality of our fleet,
increase capacity, and add to
shoreside assets. These invest-
ments, including cranes, containers,
and chassis, serve as the foundation
of our operations, allowing us to
uphold our commitment to service
reliability. We have also committed
significant resources in the past
few years to upgrade our fleet
with LNG capabilities.
In 2022, we contracted with Philly
Shipyard to build three new Aloha
Class vessels for expected delivery
in 2027 and 2028. With these
vessels, annual capacity in our China
service will increase by ~15,000
containers, which we expect will
provide a significant lift to net income
and EBITDA. We will also have our
youngest fleet since becoming a
public company. As such, we do
not currently expect to build any
new vessels for another decade.
We have successfully driven shareholder returns by
balancing strategic long-term planning with opportunistic
growth and a steady share repurchase program.
04
03
Consistent Return of
Capital Leads to Exceptional
Shareholder Returns
We have returned approximately
$1.5 billion of capital to our
investors in the form of dividends
and share repurchases since
going public and this past year
marked the twelfth consecutive
annual increase of our dividend,
a testament to the strength of
our business and consistency
of our cash flows. Since its
inception four years ago, our share
repurchase program has retired
~26% of our then outstanding
stock, which is a meaningful
value creator for our shareholders.
We expect to continue to grow
our dividend in line with the
growth in our long-term cash
flows and we expect to be a
steady purchaser of our shares in
the absence of any large organic
or inorganic growth investments.
Investment-Grade Metrics
Provide a Key Advantage
Our balance sheet remains a
pillar of strength, and we view
it as a competitive advantage.
We have strategically pursued
low financial leverage to provide
flexibility as we explore strategic
opportunities. We like to think
of our low leverage as a coiled
spring to be utilized for the
right investment opportunity.
We invest, we scale,
and we optimize
to compound
shareholder returns in
niches where service
matters and where
we can earn premium
rates and returns on
invested capital.
Our growth is both incremental
and punctuated by leaps forward,
as exemplified by our large investments
in Alaska and our China trade.
This specifically includes potential
opportunities in the China and Asian
markets, but we also know from prior
experience and success that the size,
demand, and freight quality must
be aligned.
We approach M&A in the same manner.
As we carefully evaluate potential
acquisitions, we weigh each opportunity
against reinvesting in our own operations
and returning capital to our shareholders.
Potential growth, cultural alignment, and
seasoned management are prerequisite
for any investment we might make.
While our bar is admittedly high and
we only pursue a transaction when it
meets all our criteria, we continue to
look for opportunities to take yet another
leap forward.
We remain an unapologetically patient,
disciplined, and nimble investor.
A patient and
disciplined investor
In closing
This is testament to the dedicated
effort of all our employees who work
united in a singular mission to move our
customers’ freight better than anyone
else. I am grateful for our Board of
Directors who provide guidance and
expertise to assist us on our journey.
We remain, as always, stewards of
your capital, dedicated to providing
outstanding ocean and logistics
services, pursuing growth opportunities,
and growing shareholder value through
disciplined, reasoned investments.
Sincerely,
Matt Cox
Chairman and Chief Executive Officer
February 28, 2025
The past several years have been defined by supply
chain and geopolitical uncertainty. Yet from this
Matson has emerged stronger than it has ever been,
poised for an even better future.
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-K
☒
ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended December 31, 2024
OR
☐
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from to
Commission file number 001-34187
Matson, Inc.
(Exact name of registrant as specified in its charter)
Hawaii
99-0032630
(State or other jurisdiction of
(I.R.S. Employer
incorporation or organization)
Identification No.)
1411 Sand Island Parkway
Honolulu, HI 96819
(Address of principal executive offices) (Zip code)
(808) 848-1211
(Registrant’s telephone number, including area code)
Securities registered pursuant to Section 12(b) of the Act:
Title of each class
Trading Symbol(s)
Name of each exchange on which registered
Common Stock, without par value
MATX
New York Stock Exchange
Securities registered pursuant to Section 12(g) of the Act: None
Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes No
Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. Yes No
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding
12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes
No
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T
(§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes No
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth
company. See the definition of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange
Act.
Large accelerated filer ☒
Accelerated filer ☐
Non-accelerated filer ☐
Smaller reporting company ☐
Emerging growth company ☐
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial
accounting standards provided pursuant to Section 13(a) of the Exchange Act.
Indicate by check mark whether the registrant has filed a report on and attestation to its management’s assessment of the effectiveness of its internal control over financial
reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered public accounting firm that prepared or issued its audit report. ☒
If securities are registered pursuant to Section 12(b) of the Act, indicate by check mark whether the financial statements of the registrant included in the filing reflect the
correction of an error to previously issued financial statements. ☐
Indicate by check mark whether any of those error corrections are restatements that required a recovery analysis of incentive-based compensation received by any of the
registrant’s executive officers during the relevant recovery period pursuant to §240.10D-1(b). ☐
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒
Aggregate market value of Common Stock held by non-affiliates at June 30, 2024: $4,307,855,048
Number of shares of Common Stock outstanding at February 14, 2025: 32,863,714
Documents Incorporated By Reference
The following document is incorporated by reference in Part III of the Annual Report on Form 10-K to the extent described therein: Proxy statement for the annual meeting
of shareholders of Matson, Inc. to be held on April 24, 2025.
i
TABLE OF CONTENTS
Page
PART I
Item 1.
Business . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
1
A. Company Overview. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
1
B. Business Description . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2
(1) Ocean Transportation Segment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2
(2) Logistics Segment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
9
C. Employees and Labor Relations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
10
D. Available Information . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
12
Item 1A.
Risk Factors . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
12
Item 1B.
Unresolved Staff Comments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
23
Item 1C.
Cybersecurity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
24
Item 2.
Properties . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
26
Item 3.
Legal Proceedings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
26
Item 4.
Mine Safety Disclosures . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
26
PART II
Item 5.
Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases
of Equity Securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
27
Item 6.
Removed and Reserved . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
28
Item 7.
Management’s Discussion and Analysis of Financial Condition and Results of Operations . . .
29
Item 7A.
Quantitative and Qualitative Disclosures About Market Risk . . . . . . . . . . . . . . . . . . . . . . . . . . . .
40
Item 8.
Financial Statements and Supplementary Data . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
41
Item 9.
Changes in and Disagreements with Accountants on Accounting and Financial Disclosure . . .
76
Item 9A.
Controls and Procedures . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
76
Conclusion Regarding Effectiveness of Disclosure Controls and Procedures . . . . . . . . . . . . . . .
76
Internal Control over Financial Reporting . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
76
Item 9B.
Other Information . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
77
Item 9C.
Disclosure Regarding Foreign Jurisdictions that Prevent Inspections . . . . . . . . . . . . . . . . . . . . .
77
PART III
Item 10.
Directors, Executive Officers and Corporate Governance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
77
A. Directors . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
77
B. Information About Our Executive Officers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
77
C. Corporate Governance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
77
D. Code of Ethics . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
77
E. Insider Trading Policy . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
77
Item 11.
Executive Compensation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
78
Item 12.
Security Ownership of Certain Beneficial Owners and Management and Related
Stockholder Matters . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
78
Item 13.
Certain Relationships and Related Transactions, and Director Independence . . . . . . . . . . . . . . .
78
Item 14.
Principal Accountant Fees and Services . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
78
PART IV
Item 15.
Exhibits and Financial Statement Schedules . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
79
A. Financial Statements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
79
B. Financial Statement Schedules . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
79
C. Exhibits Required by Item 601 of Regulation S-K . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
79
Item 16.
Form 10-K Summary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
83
Signatures. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
84
1
MATSON, INC.
FORM 10-K
Annual Report for the Fiscal Year
Ended December 31, 2024
PART I
ITEM 1. BUSINESS
A.
COMPANY OVERVIEW
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 two segments, Ocean
Transportation and Logistics.
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 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 in Alaska.
Matson has a 35 percent ownership interest in SSA Terminals, LLC (“SSAT”), a joint venture between Matson
Ventures, Inc., a wholly-owned subsidiary of MatNav, and SSA Ventures, Inc., a subsidiary of Carrix, Inc. SSAT
currently provides terminal and stevedoring services to various carriers at eight terminal facilities on the U.S. West
Coast, including three facilities dedicated for MatNav’s use. Matson records its share of income from SSAT in costs and
expenses in the 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) purchase order management, booking services, and non-vessel operating common carrier (“NVOCC”)
freight forwarding services (collectively, “Supply Chain Management” services).
Our Mission and Vision:
Our mission is to move freight better than anyone. Our vision is to create value for our shareholders by:
Being our customers’ first choice,
Leveraging our core strengths to drive growth and increase profitability,
Improving the communities in which we work and live,
Being an environmental leader in our industry, and
Being a great place to work.
2
B.
BUSINESS DESCRIPTION
(1)
OCEAN TRANSPORTATION SEGMENT
Ocean Transportation Services:
Matson’s Ocean Transportation segment provides the following services:
Hawaii Service: Matson’s Hawaii service provides ocean carriage (lift-on/lift-off, roll-on/roll-off and conventional
services) between the ports of Long Beach and Oakland, California; Tacoma, Washington; and Honolulu, Hawaii.
Matson also operates a network of inter-island barges that provide connecting services from its hub at Honolulu to other
major Hawaii ports on the islands of Hawaii, Maui and Kauai. Matson is the largest carrier of ocean cargo between the
U.S. West Coast and Hawaii.
Westbound cargo carried by Matson to Hawaii includes dry containers of mixed commodities, refrigerated commodities,
food, beverages, retail merchandise, building materials, automobiles and household goods. Matson’s eastbound cargo
from Hawaii includes automobiles, household goods, dry containers of mixed commodities and livestock. The majority
of Matson’s Hawaii service revenue is derived from the westbound carriage of containerized freight.
China Service: Matson’s expedited China-Long Beach Express (“CLX”) service is part of an integrated service that
carries cargo from Long Beach, California to Honolulu, Hawaii, Guam, and Okinawa, Japan. The vessels then continue
on to Ningbo and Shanghai, China, where they are loaded with cargo to be discharged primarily in Long Beach,
California at a Matson-exclusive terminal operated by SSAT. These vessels also carry cargo destined for Hawaii which
originated in Guam, Micronesia, Okinawa, China and other Asian countries.
Matson operates a second expedited service to the U.S. West Coast with the Matson Asia Express (“MAX”) service.
The MAX service primarily uses chartered vessels and operates weekly from Ningbo and Shanghai, China where they
are loaded with cargo to be discharged primarily at Long Beach, California, calling at an SSAT-operated terminal.
Both services also carry transshipment cargo originating in many locations throughout Asia, including Vietnam and
Southern China to the U.S. via Shanghai, China.
Eastbound cargo from China to Long Beach, California consists mainly of e-commerce related goods, garments,
consumer electronics, footwear and other merchandise.
Guam Service: Matson’s Guam service provides weekly carriage between the U.S. West Coast and Guam, as part of its
CLX service. Matson also provides weekly U.S. flag barge service connecting Guam to the Commonwealth of the
Northern Mariana Islands. Cargo destined to Guam mainly includes dry containers of mixed commodities, refrigerated
containers of food, beverages, retail merchandise, building materials and household goods.
Japan Service: Matson’s Japan service provides weekly carriage between the U.S. West Coast and the port of Naha in
Okinawa, Japan, as part of its CLX service. This service mainly carries freight supporting the U.S. government
including general sustenance cargo in both dry and refrigerated containers and household goods.
Micronesia Service: Matson’s Micronesia service provides carriage between the U.S. West Coast and the islands of
Kwajalein, Ebeye and Majuro in the Republic of the Marshall Islands, the islands of Yap, Pohnpei, Chuuk and Kosrae in
the Federated States of Micronesia, and the Republic of Palau. Cargo destined for these locations is transshipped
through Guam and consists mainly of general sustenance cargo, building materials, hardware and retail merchandise.
The service to Kwajalein is provided by a U.S. flag vessel or barge.
Alaska Service: Matson’s Alaska service provides ocean carriage between the port of Tacoma, Washington, and the
ports of Anchorage, Kodiak and Dutch Harbor, Alaska. Matson also provides a barge service between Dutch Harbor and
Akutan in Alaska, and transportation services to other locations in Alaska including the Kenai Peninsula, Fairbanks and
the North Slope.
3
Northbound cargo to Alaska consists mainly of dry containers of mixed commodities, refrigerated commodities, food,
beverages, retail merchandise, household goods and automobiles. Southbound cargo from Alaska primarily consists of
seafood, household goods and automobiles.
Matson’s Alaska-Asia Express (“AAX”) service provides carriage of seafood primarily from Kodiak and Dutch Harbor,
Alaska to many locations in Asia via Matson’s transshipment ports of Shanghai and Ningbo, China. The AAX service
utilizes MAX vessels on their westbound return voyages to China.
South Pacific Service: Matson’s New Zealand Express (“NZX”) service provides carriage of general sustenance cargo
between Auckland, New Zealand and select islands in the South Pacific, including Fiji (Suva and Lautoka), Samoa
(Apia), American Samoa (Pago Pago), the Cook Islands (Rarotonga and Aitutaki), Tonga (Nukualofa and Vava’u), and
Niue. Additionally, Matson provides slot charter arrangements for the transportation of cargo from major ports on the
east coast of Australia to ports in the South Pacific islands. The NZX service also delivers and sells domestic bulk fuel
to a variety of these islands.
Terminal and Other Related Services:
Matson provides stevedoring, refrigerated cargo services, inland transportation, container equipment maintenance and
other terminal services (collectively, “terminal services”) at terminals located on the Hawaiian islands of Oahu, Hawaii,
Maui and Kauai; and in the Alaska terminal locations of Anchorage, Kodiak and Dutch Harbor.
SSAT currently provides terminal and stevedoring services to various carriers at eight terminal facilities on the U.S.
West Coast, including three facilities dedicated for MatNav’s use, in Long Beach and Oakland, California and in
Tacoma, Washington.
Matson utilizes the services of other third-party terminal operators at the other ports where its vessels are served.
4
Vessel Information:
Vessels:
Matson’s fleet includes both owned and chartered vessels and barges. Matson’s owned fleet represents an investment of
approximately $2.5 billion. The majority of Matson’s owned fleet is made up of U.S. flagged and Jones Act qualified
vessels that operate in Matson’s Hawaii, China, Guam, Japan, Micronesia and Alaska services. Details of Matson’s
active and reserve fleet as of December 31, 2024 are as follows:
Usable Cargo Capacity
Vessel
Containers (1) Vehicles
Design Approximate
Charter
Year Official
Reefer
Speed Deadweight
Expiration
Name of Vessel
Built Number
TEUs
Slots
Autos
Length (Knots) (2)
(Long Tons)
Date (3)
Vessels-Owned:
DANIEL K. INOUYE (4)(8)
2018 1274136 3,160
408
— 854’ 0”
23.5
51,000
—
KAIMANA HILA (4)(8)
2019
1274135 3,020
408
—
854’ 0”
23.5
52,000
—
MANOA (4)(7)
1982 651627 2,824
408
— 860’ 2”
23.0
35,000
—
MAHIMAHI (4)(7)
1982 653424 2,824
408
— 860’ 2”
23.0
35,000
—
LURLINE (4)
2019
1274143 2,750
432
500
869’ 5”
23.0
51,000
—
MATSONIA (4)
2020
1274123 2,750
432
500
869’ 5”
23.0
51,000
—
MANULANI (4)(7)
2005 1168529 2,378
284
— 712’ 0”
22.5
38,000
—
MAUNAWILI (4)(7)
2004 1153166 2,378
326
— 711’ 9”
22.5
37,000
—
MANUKAI (4)(7)(8)
2003 1141163 2,000
270
— 711’ 9”
22.5
36,000
—
R.J. PFEIFFER (4)(7)
1992 979814 2,245
300
— 713’ 6”
23.0
28,000
—
MOKIHANA (4)
1983 655397 1,994
354
1,323 860’ 2”
23.0
30,000
—
MAUNALEI (4)(7)
2006 1181627 1,992
328
— 681’ 1”
22.1
33,000
—
MATSON KODIAK (4)(7)
1987 910308 1,668
280
— 710’ 0”
20.0
20,000
—
MATSON ANCHORAGE (4)(7)
1987 910306 1,668
280
— 710’ 0”
20.0
20,000
—
MATSON TACOMA (4)(7)
1987 910307 1,668
280
— 710’ 0”
20.0
20,000
—
KAMOKUIKI (5)
2000 9232979
707
100
— 433’ 9”
17.5
8,000
—
OLOMANA (6)
2004
9184225
645
120
—
388’ 7”
14.0
8,000
—
IMUA (6)
2004 9184237
645
90
— 388’ 6”
15.0
8,000
—
LILOA II (6)
2006 9184249
630
90
— 388’ 6”
15.0
8,000
—
PAPA MAU (6)
1999 9141704
521
60
— 381’ 5”
14.0
6,000
—
Vessels-Chartered:
MATSON MAGNOLIA (6)
2006
9302578 5,060
454
—
964’ 9”
23.0
67,000
December 2027
MATSON WAIKIKI (6)
2008
9349801 4,946
400
—
902’ 0”
22.5
62,000 September 2028
MATSON LANAI (6)
2007
9334143 4,253
400
—
855’ 2”
24.3
53,000
August 2027
MATSON MAUI (6)
2007
9340764 4,253
400
—
854’ 8”
24.5
50,000
March 2026
MATSON OAHU (6)
2008
9352406 4,245
535
—
853’ 0”
24.3
53,000 November 2027
MATSON KAUAI (6)
2008
9353278 4,218
350
— 881’ 11”
24.8
52,000
August 2027
Barges-Owned:
MAUNA LOA (4)
2013 1247426
500
78
— 362’ 6”
—
13,000
—
HALEAKALA (4)
2022 1324310
620
72
— 362’ 6”
—
15,000
—
ISLANDER (5)
2024
1348946
100
—
—
180’ 0”
—
2,000
—
Barges-Chartered:
ILIULIUK BAY (4)
2013 1249384
178
—
— 250’ 0”
—
4,000 December 2025
(1)
Container numbers are based upon vessel construction specifications. Twenty-foot Equivalent Units (“TEU”) is a standard measure of cargo
volume correlated to a standard 20-foot dry cargo container. Actual loadable containers may vary from these amounts.
(2)
Operating speed of the vessel may vary from the Vessel Design Speed.
(3)
Charter expiration dates represent the approximate month the vessel can be returned to its owner. Some vessel charter agreements include
options for the Company to further extend the charter period.
(4)
U.S. flagged and Jones Act qualified vessel or barge.
(5)
U.S. flagged vessel or barge.
(6)
Foreign-flagged vessel.
(7)
Vessel installed with exhaust gas cleaning systems (commonly referred to as “scrubbers”).
(8)
Vessel can operate on liquified natural gas (“LNG”), conventional or alternative fuels.
5
Fleet Renewal Program:
Matson is constructing three new vessels with the following specifications and expected delivery dates:
Usable Cargo Capacity
Containers
Maximum
Maximum
Type of
Expected
Reefer
Speed
Deadweight
Class of Vessel
Vessel
Delivery Date
TEUs
Slots
Length
(Knots)
(Long Tons)
Aloha Class
Containership
Q1 2027
3,620
400
853’ 2”
23.5
53,000
Aloha Class
Containership
Q3 2027
3,620
400
853’ 2”
23.5
53,000
Aloha Class
Containership
Q2 2028
3,620
400
853’ 2”
23.5
53,000
Matson expects to deploy the three new Aloha Class vessels in the CLX service and redeploy three existing vessels into
the Alaska service. The new vessels will have dual-fuel engines and be equipped with tanks, piping and cryogenic
equipment designed to operate on LNG, conventional and alternative fuels. The new vessels are also being designed
with state-of-the-art green technology features and fuel-efficient hulls. Each new vessel is expected to provide
approximately 500 containers of additional capacity per voyage in the CLX service.
The initial contract cost of the new vessel program is approximately $1.0 billion, with milestone payments expected to
be financed with cash currently on deposit in the Company’s Capital Construction Fund, cash and cash equivalents on
the Company’s Consolidated Balance Sheets and through cash flows generated from future operations, borrowings
available under the Company’s unsecured revolving credit facility or additional debt financings. Actual and future
vessel construction progress milestone payments based on signed agreements and change orders, excluding vessel steel
price adjustments, owners’ items and capitalized interest, are expected to be as follows:
Paid
Future Milestone Payments
Vessel Construction Obligations
(in millions)
As of
December 31,
2024
2025
2026
2027
2028
Thereafter
Total
Three Aloha Class Containerships
$
189.5
$ 290.3
$ 313.6
$ 185.0
$
22.2
$
2.9
$ 1,003.5
The three new Aloha Class vessels represent an important step towards Matson’s medium-term greenhouse gas (“GHG”)
emissions goal to reduce Scope 1 GHG emissions from its owned fleet by 40% by 2030, using 2016 as a baseline year.
Matson has also set a long-term goal to achieve net zero Scope 1 GHG emissions from its owned fleet by 2050. For
more information on Matson’s environmental stewardship initiatives, including GHG reduction goals, see Matson’s
Sustainability Report and other information available at https://www.matson.com/sustainability.
Vessel Emission Regulations:
Being a leader in environmental stewardship is one of Matson’s core values. Matson’s vessels transit through some of
the most environmentally sensitive areas in the United States including the Hawaiian Islands and the coasts of
California, Oregon, Washington and Alaska. In particular, Matson is focused on reducing transportation emissions,
including carbon dioxide, methane, nitrous oxide, particulate matter and sulfur dioxide through improvements in vessel
fuel consumption, choice of fuel types and the development of more fuel-efficient transportation solutions. Matson
further contributes positively to the environment by testing and deploying leading technologies as the fleet is
modernized.
The International Maritime Organization (“IMO”), of which the U.S. and over 150 other countries are members, is a
specialized agency of the United Nations that sets international environmental standards applicable to vessels operating
under the flag of any member state. Effective January 1, 2020, the IMO imposed regulations that generally require all
vessels to burn fuel oil with a maximum sulfur content of ≤0.5 percent. With respect to North America, all waters, with
certain limited exceptions, within 200 nautical miles of U.S. and Canadian coastlines have been designated emission
control areas (“ECAs”). Since January 1, 2015, U.S. Environmental Protection Agency regulations have reduced the
fuel oil maximum sulfur content in designated ECAs to ≤0.1 percent. In addition, since August 1, 2012, the California
Air Resources Board has reduced the fuel oil maximum sulfur content to ≤0.1 percent within 24 miles of the California
coastline.
Matson’s vessels are designed to operate in compliance with current IMO and ECA regulations as applicable.
6
Beginning in 2023, IMO regulations require containerships operating internationally with over 5,000 gross tonnage to
comply with annual Carbon Intensity Indicator (“CII”) requirements that become increasingly stringent towards 2030.
CII measures how efficiently a ship transports goods, and uses calculated carbon dioxide (“CO2”) emissions to determine
an annual rating. For ships that are not in compliance, a corrective action plan needs to be developed as part of the
vessels’ Ship Energy Efficiency Management Plan (“SEEMP”) and approved by port state authorities. The Company
believes that its vessels are currently in compliance with these regulations. For more information on Matson’s
environmental stewardship initiatives, including GHG emission reduction goals, see Matson’s Sustainability Report and
other information available at https://www.matson.com/sustainability.
Hawaii Terminal Modernization and Expansion Program:
Matson completed the first phase of its program to modernize and renovate its terminal facility at Sand Island, Honolulu,
and is progressing on the second phase. As part of this program, Matson completed the installation of three new
65 long-ton capacity gantry cranes, upgraded and renovated three existing cranes, demolished four outdated cranes, and
installed upgrades to the electrical infrastructure at the terminal. In addition, Matson completed the installation,
energization and transition to a new redundant main switchgear. Additional projects for the second phase relate to
improvements to its existing backup power generators and other terminal upgrades, which are expected to be completed
within the next two years.
The third phase represents a broader and long-term expansion program at the Sand Island terminal facility. Matson
expects to expand into Pier 51A and portions of Pier 51B after Pasha Hawaii (“Pasha”) relocates to, and is operational at,
the Kapalama Container Terminal (“KCT”) facility in late 2025 or early 2026. Matson is currently performing
surveying, planning and design work in preparation for this expansion.
Ocean Transportation Equipment:
As a complement to its fleet of vessels and barges, Matson owns a variety of equipment including terminal cranes and
equipment, containers, chassis and other property which represents an investment of approximately $0.9 billion as of
December 31, 2024. Matson also leases containers, chassis and other equipment under various operating lease
agreements.
Operating Costs:
Major components of Matson’s Ocean Transportation operating costs are as follows:
Direct Cargo Expense includes terminal handling costs including labor and wharfage, outside purchased transportation
and other related costs.
Vessel Operating Expense includes crew wages and related costs; fuel; pilots, tugs, lines and related costs; vessel charter
expenses; and other vessel operating related expenses.
Operating Overhead Expense includes vessel repair and maintenance costs, inactive vessel costs, dry-docking
amortization, equipment lease costs, equipment repair costs, insurance, port engineers and other maintenance costs, and
other vessel and shoreside related overhead and other indirect costs.
Competition:
The following is a summary of major competitors in Matson’s Ocean Transportation segment:
Hawaii Service: Matson’s Hawaii service has one major U.S. flagged Jones Act competitor, Pasha, which operates
container and roll-on/roll-off services between the ports of Long Beach, Oakland and San Diego, California to Hawaii.
A U.S. flagged Jones Act barge operator, Aloha Marine Lines, offers barge service between Seattle, Washington and
Hawaii.
Foreign-flagged vessels carrying cargo to Hawaii from non-U.S. locations also provide alternatives for companies
shipping to Hawaii. Other competitors in the Hawaii service include proprietary operators and contract carriers of bulk
cargo, and air freight carriers.
7
Matson operates three strings of vessels to Hawaii. These strings provide customers an industry-leading five departures
from ports on the U.S. West Coast – two each from Long Beach and Oakland, California and one from Tacoma,
Washington, with three arrivals in Honolulu each week. Each of these strings operates on a fixed day-of-the-week
schedule. One of the vessel strings continues from Honolulu to China before returning to Long Beach. Matson’s
frequent sailings and punctuality permit customers to reduce inventory carrying costs. Matson also competes by offering
a comprehensive service network to customers, including: the only container service to and from the three largest U.S.
West Coast ports; the most efficient terminal network on the U.S. West Coast with three exclusive use terminals
provided by SSAT that allow for quicker and more reliable port calls; a dedicated inter-island barge network which is
integrated with Matson’s line haul schedule; roll-on/roll-off service from Long Beach and Oakland; a world-class
customer service team; and efficiency and experience in handling cargo of many types.
Alaska Service: Matson’s Alaska service has one major U.S. flagged Jones Act competitor, Totem Ocean Trailer
Express, Inc., which operates a roll-on/roll-off service between Tacoma, Washington and Anchorage, Alaska. There are
also two primary U.S. flagged Jones Act barge operators, Alaska Marine Lines, which mainly provides services from
Seattle, Washington to the ports of Anchorage, Dutch Harbor, and other locations in Alaska, and Samson Tug & Barge,
which mainly serves Western Alaska and other locations. The barge operators have historically shipped lower value
commodities that can accommodate a longer transit time, as well as construction materials and other cargo that are not
conducive to movement in containers. Other competitors include air freight carriers and over-the-road trucking services.
Foreign-flagged vessels provide alternatives for companies shipping cargo (mainly seafood) from the Alaska ports of
Kodiak and Dutch Harbor to international destinations. The primary competitor of Matson’s AAX service is CMA
CGM, which provides services between Dutch Harbor, Alaska and Asia.
Matson offers customers twice weekly scheduled service from Tacoma, Washington to Anchorage and Kodiak, Alaska,
and a weekly service to Dutch Harbor, Alaska. The Company also provides a barge service between Dutch Harbor and
Akutan in Alaska. Matson is the only Jones Act containership operator providing service to Kodiak and Dutch Harbor in
Alaska, which are the primary loading ports for southbound seafood. Matson offers dedicated terminal services at the
Alaska ports of Anchorage, Kodiak and Dutch Harbor performed by Matson, and at the port of Tacoma, Washington
performed by SSAT. Matson’s AAX service also offers customers a service from Kodiak and Dutch Harbor, Alaska to
Ningbo and Shanghai, China, and Busan, South Korea, with transshipment services from those ports to other locations in
Asia.
China Service: Major competitors to Matson’s China service include international transpacific carriers such as CMA
CGM, Zim, Hede and Cosco. Other competitors include air freight carriers.
Matson’s China service (CLX and MAX) competes by offering fast and reliable service from the ports of Ningbo and
Shanghai in China, and feeder services from other Asian ports of origin connecting in Shanghai, China, to Long Beach,
California. Matson provides fixed day-of-the-week arrivals and industry leading cargo availability. Matson’s service is
further differentiated by best-in-class stevedoring services provided by SSAT, Matson dedicated terminal space, access
to Shippers Transport Express off-dock container yards for faster truck turn times, Matson-dedicated equipment
including chassis to speed cargo availability, one-stop intermodal connections, and world-class customer service.
Matson also provides intermodal services in coordination with Matson Logistics. Matson has offices located in
Shanghai, Ningbo, Shenzhen, Xiamen and Hong Kong, and has contracted with terminal operators in Ningbo and
Shanghai.
Guam Service: Matson’s Guam service has one major competitor, APL, a subsidiary of CMA CGM, which operates a
U.S. flagged container service connecting the U.S. West Coast to Guam and Saipan, via transshipments to U.S. flagged
feeder vessels in Yokohama, Japan and Busan, South Korea via a two-ship feeder service, and a third-party U.S. flagged
service with transshipments from Guam to Saipan. There are also multiple foreign carriers that call at Guam from
foreign origin ports, and air freight carriers.
Matson offers customers a weekly sailing to Guam as part of the CLX service from three ports on the U.S. West Coast.
Matson’s ocean transit times, best-in-class services from all three U.S. West Coast terminals and reliable on-time
performance provides an industry-leading service to its customers.
Japan Service: Matson’s Japan service has one major competitor, APL, which operates a U.S. flagged containership
service from the U.S. West Coast to the port of Naha in Okinawa, Japan.
8
Matson offers customers a fast and reliable weekly service to the port of Naha in Okinawa, Japan as part of the CLX
service from three ports on the U.S. West Coast.
Micronesia and South Pacific Services: Matson’s Micronesia and South Pacific services compete with a variety of local
and international carriers that provide freight services to the area.
Customer Concentration:
Matson serves customers in numerous industries and carries a wide variety of cargo, mitigating its dependence upon any
single customer or single type of cargo. The Company’s 10 largest Ocean Transportation customers account for
approximately 18 percent of the Company’s Ocean Transportation revenue. For additional information on Ocean
Transportation revenues for the years ended December 31, 2024, 2023 and 2022, see Note 2 to the Consolidated
Financial Statements in Item 8 of Part II below.
Seasonality:
Historically, Matson’s Ocean Transportation services have typically experienced seasonality in volume, generally
following a pattern of increasing volume starting in the second quarter of each year culminating in the early part of the
fourth quarter. This seasonality is amplified in the Alaska service primarily due to winter weather and the timing of
southbound seafood trade. As a result, earnings have tended to follow a similar pattern, offset by periodic vessel dry-
docking and other episodic cost factors, which can lead to earnings variability. In addition, in the China trade, volume
demand is generally stronger in the second and third quarters primarily driven by U.S. consumer demand for goods
ahead of key retail selling seasons. Freight rates can be impacted by these seasonality trends as well as macro supply
and demand variables.
Maritime Laws and the Jones Act:
Maritime Laws: All interstate and intrastate marine commerce within the U.S. falls under the Merchant Marine Act of
1920 (commonly referred to as the Jones Act).
The Jones Act is a long-standing cornerstone of U.S. maritime policy. Under the Jones Act, all vessels transporting
cargo between covered U.S. ports must, subject to limited exceptions, be built in the U.S., registered under the U.S. flag,
be manned predominantly by U.S. crews, and owned and operated by U.S.-organized companies that are controlled and
75 percent owned by U.S. citizens. U.S. flagged vessels are generally required to be maintained at higher standards than
foreign-flagged vessels and are subject to rigorous supervision and inspections by, or on behalf of, the U.S. Coast Guard,
which requires appropriate certifications and background checks of the crew members. Under Section 27 of the Jones
Act, the carriage of cargo between the U.S. West Coast, Hawaii and Alaska on foreign-built or foreign-documented
vessels is prohibited.
During the years ended December 31, 2024, 2023 and 2022, approximately 50 percent, 55 percent and 39 percent,
respectively, of Matson’s Ocean Transportation revenues came from the Hawaii and Alaska trades that were subject to
the Jones Act. Matson’s Hawaii and Alaska trade routes are included within the non-contiguous Jones Act market. The
commerce of both Hawaii, as an island economy, and Alaska, due to its geographical location, are dependent on ocean
transportation. The Jones Act ensures frequent, reliable, roundtrip service to these locations. Matson’s vessels operating
in these trade routes are Jones Act qualified and maintained in compliance with such requirements.
Matson is a member of the American Maritime Partnership (“AMP”), which supports the retention of the Jones Act and
similar cabotage laws. The Jones Act has broad support from both houses of Congress and the Executive Branch.
Matson believes that the geopolitical environment has further solidified political support for U.S. flagged vessels
because a vital and dedicated U.S. merchant marine is a cornerstone for a strong homeland defense, as well as a critical
source of trained U.S. mariners for wartime support. AMP seeks to inform elected officials and the public about the
economic, national security, commercial, safety and environmental benefits of the Jones Act and similar cabotage laws.
Other U.S. maritime laws require vessels operating between Guam, a U.S. territory, and U.S. ports to be U.S. flagged
and predominantly U.S. crewed, but not U.S. built.
9
Cabotage laws are not unique to the United States, and similar laws exist around the world in over 90 countries,
including regions in which Matson provides ocean transportation services. Any changes in such laws may have an
impact on the services provided by Matson in those regions.
Rate Regulations and Fuel-Related Surcharges:
Matson is subject to the jurisdiction of the Surface Transportation Board with respect to its domestic ocean rates. A rate
in the non-contiguous domestic trade is presumed reasonable and will not be subject to investigation if the aggregate of
increases and decreases is not more than 7.5 percent above, or more than 10 percent below, the rate in effect one year
before the effective date of the proposed rate, subject to increase or decrease by the percentage change in the U.S.
Producer Price Index. Matson generally seeks to provide a 30-day notice to customers of any increases in general rates
and other charges, and passes along decreases as soon as possible.
Matson’s Ocean Transportation services engaged in U.S.-foreign commerce are subject to the jurisdiction of the Federal
Maritime Commission (“FMC”). The FMC is a federal independent regulatory agency that is responsible for the
regulation of international ocean-borne transportation to and from the U.S.
Matson applies a fuel-related surcharge rate to its Ocean Transportation customers. Matson’s fuel-related surcharge is
correlated to market rates for fuel prices and other factors, and is intended to help Matson recover fuel-related expenses.
Other Environmental Regulations:
In addition to the vessel emission regulations discussed above, Matson’s operations are required to comply with other
environmental regulations and requirements including the Oil Pollution Act of 1990, the Comprehensive Environmental
Response Compensation & Liability Act of 1980, the Rivers and Harbors Act of 1899, the Clean Water Act, the Invasive
Species Act and the Clean Air Act. Matson is also subject to state regulations affecting terminal and vessel emissions,
such as the requirement to shut down vessel generator engines while at berth at California ports and switch to shore
electrical power or achieve equivalent emissions reductions. The Company actively monitors its operations for
compliance with these and other regulations.
For more information on Matson’s environmental stewardship initiatives, including its environmental goals, see
Matson’s Sustainability Report and other information available at https://www.matson.com/sustainability.
(2)
LOGISTICS SEGMENT
Logistics Services:
Matson Logistics provides the following services:
Transportation Brokerage Services: Matson Logistics provides intermodal rail, highway, and other third-party logistics
services for North American customers and international ocean carrier customers, including MatNav. Matson Logistics
creates significant benefits and value for its customers through volume purchases of rail, motor carrier and ocean
transportation services, augmented by services such as shipment tracking and tracing, accessibility to its owned fleet of
53-foot intermodal containers and single-vendor invoicing. Matson Logistics operates customer service centers and has
sales offices throughout North America.
Freight Forwarding Services: Matson Logistics provides Freight Forwarding services primarily to the Alaska market
through its wholly-owned subsidiary, Span Intermediate, LLC (“Span Alaska”). Span Alaska’s business aggregates LCL
freight at its cross-dock facility in Auburn, Washington for consolidation and shipment to its service center in Anchorage
and a network of other facilities in Alaska. Span Alaska also provides trucking services to its Auburn cross-dock facility
and from its Alaska based cross-dock facilities to final customer destinations in Alaska.
Warehousing Services: Matson Logistics operates two warehouses in Georgia and two warehouses in Northern
California providing warehousing, trans-loading, value-added packaging and distribution services.
Supply Chain Management and Other Services: Matson Logistics provides customers with a variety of logistics services
including purchase order management, booking services, customs brokerage, LCL and full container load NVOCC
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freight forwarding services. Matson Logistics has supply chain operations in North America, China, Southeast Asia and
other locations.
Operating Costs:
Matson Logistics’ operating costs include transportation costs, transportation brokerage expenses, agency commissions,
leases of warehouses, cross-dock and other facility operating costs, wages and other related costs, and other operating
overhead.
Competition:
Matson Logistics competes with hundreds of local, regional, national and international companies that provide
transportation and third-party logistics services. The industry is highly fragmented and, therefore, competition varies by
geography and areas of service.
Matson Logistics’ Transportation Brokerage services compete most directly with C.H. Robinson Worldwide, Hub
Group, RXO and other freight brokers and intermodal marketing companies, and asset-invested market leaders such as
J.B. Hunt. Matson Logistics competes by relying on the depth, scale and scope of its customer relationships; vendor
relationships and rates; network capacity; real-time visibility into the movement of customers’ goods; and other
technology solutions. Additionally, while Matson Logistics primarily provides surface transportation brokerage, it also
competes to a lesser degree with other forms of transportation for the movement of cargo such as air freight.
Matson Logistics’ Freight Forwarding services compete most directly with a variety of freight forwarding companies
that operate within Alaska including Carlile, Lynden and Odyssey.
Customer Concentration:
Matson Logistics serves customers in numerous industries. The Company’s 10 largest logistics customers account for
approximately 17 percent of the Company’s Logistics revenue. For additional information on Logistics revenues for the
years ended December 31, 2024, 2023 and 2022, see Note 2 to the Consolidated Financial Statements in Item 8 of Part II
below.
Seasonality:
Matson Logistics’ businesses experience seasonality in demand for their services as follows: (i) Transportation
Brokerage Services generally sees elevated truckload and intermodal shipment activity starting in the second quarter of
each year, culminating in a peak season throughout the third quarter; (ii) Freight Forwarding Services experiences
seasonal trends similar to Matson’s Ocean Transportation Alaska service; and (iii) Supply Chain Management and Other
Services demand is generally stronger in the second and third quarters similar to Matson’s Ocean Transportation China
service.
C.
EMPLOYEES AND LABOR RELATIONS
Human Capital Strategy:
In support of Matson’s vision to be a great place to work for all employees, the Company focuses on a variety of human
capital programs that have been developed to attract, retain and motivate its employee workforce. As a company that
operates in various global locations, the Company’s human capital programs are designed to reflect the unique market
practices in each geographic location. The Company’s success depends in part on employing a diverse, talented and
engaged workforce that reflects its local communities, supports an environment of high standards and performance, and
thrives in the Company’s collaborative and respectful culture.
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As of December 31, 2024, Matson had 4,356 employees worldwide, of which 161 employees were based in international
locations and 3,017 employees were covered by collective bargaining agreements with unions. These numbers include
seagoing personnel who rotate through billets (as described below) and temporary employees, but do not include
employees of SSAT or other non-employee affiliates such as agents and contractors. The composition of Matson’s
workforce by geography is as follows:
As of December 31, 2024, Matson’s fleet of active vessels requires 370 billets to operate. Each billet corresponds to a
position on a vessel that typically is filled by two or more employees because seagoing personnel rotate between active
sea-duty and time ashore. These amounts exclude billets related to Matson’s foreign-flagged chartered vessels where the
vessel owner is responsible for its seagoing personnel.
As part of its overall human capital strategy, Matson continues to focus on developing and promoting equal employment
opportunities, particularly for leadership positions. The Company utilizes both internal and external learning and
development programs to encourage and promote career opportunities for all employees. Matson is also focused on
supporting a more diverse talent pool over the long-term by encouraging historically underrepresented groups to pursue
careers in the maritime and logistics sectors. Matson makes all employment decisions based on merit without regard to
an individual’s race, gender, or other protected characteristics.
Total Rewards Programs:
Matson provides a highly competitive and balanced total rewards program designed to attract, retain and motivate its
employees. While factors such as job, location and business unit ultimately determine plans for which an employee may
be eligible, the Company’s total rewards offering includes market competitive base salaries, cash and equity incentives,
recognition awards, health and welfare benefits, and employee and employer funded retirement plans. The Company
believes that management level positions should have a portion of pay aligned with its short- and long-term business
objectives. Accordingly, the Company’s total rewards program contains several pay-for-performance components tied
to individual, business unit and Company performance, as well as Matson’s stock price performance.
Succession and Career Planning:
Matson’s workforce is characterized by uniquely skilled, long-tenured employees. To create career pathways for future
leaders while planning for the loss of retiring employees, the Company takes a proactive approach to succession and
career planning. The Company focuses on providing the next generation of promising talent with the tools they need to
build their own careers at Matson. In 2024, 49 percent of open positions were filled with internal candidates. The
Company also provided nearly 3,000 hours of employee training and professional development training, and tuition
reimbursement programs, while giving annual performance reviews to its non-union workforce.
For more information on Matson’s human capital programs, see Matson’s Sustainability Report which is available
at https://www.matson.com/sustainability.
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Bargaining Agreements:
Matson’s shoreside and seagoing employees are represented by a variety of unions. Matson has collective bargaining
agreements with these unions that expire at various dates in the future. As shown in the chart below, Matson’s shoreside
and seagoing union employees comprise 69 percent of Matson’s global workforce.
Matson and SSAT are also members of the Pacific Maritime Association (“PMA”), which on behalf of its members
negotiates collective bargaining agreements with the International Longshore and Warehouse Union (“ILWU”) on the
U.S. West Coast. The PMA/ILWU collective bargaining agreements cover substantially all U.S. West Coast longshore
labor. ILWU employees employed by SSAT are not included in the chart above.
Multi-employer Pension and Post-retirement Plans:
Matson contributes to several multi-employer pension and post-retirement plans. Matson has no present intention of
withdrawing from and does not anticipate the termination of any of the multi-employer pension plans to which it
contributes (see Notes 11 and 12 to the Consolidated Financial Statements in Item 8 of Part II below for a discussion of
withdrawal liabilities under certain multi-employer pension plans).
D.
AVAILABLE INFORMATION
Matson makes available, free of charge on or through its Internet website, Matson’s annual reports on Form 10-K,
quarterly reports on Form 10-Q, current reports on Form 8-K and amendments to those reports filed or furnished
pursuant to Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended, as soon as reasonably practicable
after it electronically files such material with, or furnishes them to, the U.S. Securities and Exchange Commission
(“SEC”). The address of Matson’s Internet website is www.matson.com. This website and other websites included in
this document are provided for convenience only, and the contents of such websites do not constitute a part of and are
not incorporated by reference into this Form 10-K.
The SEC maintains an Internet website that contains reports, proxy and information statements, and other information
regarding Matson and other issuers that file electronically with the SEC. The address of the SEC’s Internet website is
www.sec.gov.
ITEM 1A. RISK FACTORS
The following material risks, events and uncertainties may make an investment in the Company speculative or risky and
should be reviewed carefully. The Company faces the material risks set forth below; however, the description below
does not purport to include all risks the Company faces, and additional risks or uncertainties that are currently unknown
or are not currently believed to be material may occur or become material. Moreover, some of the factors, events and
contingencies discussed below may have occurred in the past, but the disclosures below are not representations as to
whether or not the factors, events or contingencies have occurred in the past, and instead reflect our beliefs and opinions
as to the factors, events, or contingencies that could materially and adversely affect us in the future. The occurrence of
these or the risks and uncertainties described below may, in ways the Company may not be able to accurately predict,
recognize or mitigate, adversely affect the Company’s business, competitive environment, strategy, financial condition,
operating results, cash flows, liquidity, demand, revenue, growth, prospects, reputation or stock price. All forward-
looking statements made in this Form 10-K are qualified by the risks and uncertainties described below.
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Risks Related to the Jones Act
Repeal, substantial amendment, or waiver of the Jones Act or changes in its application would have an adverse
effect on the Company’s business.
The Merchant Marine Act of 1920 (commonly referred to as the Jones Act) regulates all interstate and intrastate marine
commerce within the U.S. If the Jones Act were to be repealed, substantially amended or waived and, as a consequence,
competitors were to enter the Hawaii or Alaska markets with lower operating costs by utilizing their ability to acquire
and operate foreign-flagged and foreign-built vessels and/or being exempt from other U.S. regulations, the Company’s
business would be adversely affected. In addition, the Company’s position as a U.S. citizen operator of Jones Act
vessels would be negatively impacted if periodic efforts and attempts by foreign interests, including recent campaigns by
foreign governments, to circumvent or repeal certain aspects of the Jones Act were successful. If maritime cabotage
services were included in the General Agreement on Trade in Services, the United States-Mexico-Canada Agreement, or
other international trade agreements, or if the restrictions contained in the Jones Act were otherwise altered, the shipping
of cargo between covered U.S. ports could be opened to foreign-flagged or foreign-built vessels, which could have other
adverse impacts to our business.
The Company’s business would be adversely affected if the Company were determined not to be a U.S. citizen
under the Jones Act.
Certain provisions of the Company’s articles of incorporation protect the Company’s ability to maintain its status as a
U.S. citizen under the Jones Act. If non-U.S. citizens were able to defeat such articles of incorporation restrictions and
own, in the aggregate, more than 25 percent of the Company’s common stock, the Company would no longer be
considered a U.S. citizen under the Jones Act. Such an event could result in the Company’s ineligibility to engage in
coastwise trade and the imposition of substantial penalties against the Company, including seizure or forfeiture of its
vessels.
Risks Related to the Company’s Operations
Changes in macroeconomic conditions, geopolitical developments, or governmental policies, including due to
outbreaks of disease, have affected and could in the future affect the Company.
The transportation industry in which the Company operates has been and could in the future be impacted by
macroeconomic fluctuations, volatility, downturns, inflation, recessions, interest rates and other economic shifts or
market instabilities, including due to outbreaks of disease and instability in financial institutions, as well as the
development of and changes in governmental policies, relations, priorities and budgeting constraints, and uncertainties
resulting from the U.S. political environment, including increased political polarization and the potential for political
gridlock (such as the prospect of a shutdown of the U.S. federal government), and geopolitical developments across the
jurisdictions in which it operates. For example, there have been increases in geopolitical and trade tensions among a
number of the world’s major economies. These tensions have resulted in the rising threat, implementation or increase of
tariffs, non-tariff trade barriers and sanctions, including the use of export control restrictions and sanctions against
certain countries and individual companies, which have, and may continue to have, an adverse economic impact in the
markets in which the Company operates and could result in a reduced demand for the Company’s services.
These adverse economic conditions may also impact the Company’s customers’ business levels and needs. Within the
U.S., a weakening of economic drivers in Hawaii, Alaska or Guam, which include tourism, military spending,
construction, personal income growth and employment, the weakening of consumer confidence, market demand, the
economy in the U.S. Mainland, inflation, interest rates, recession, increased political polarization and the potential for
political gridlock (such as the prospect of a shutdown of the U.S. federal government), and the effect of a change in the
strength of the U.S. dollar against other foreign currencies has reduced and could in the future reduce the demand for
goods, adversely affecting inland and ocean transportation volumes or rates. In addition, overcapacity in the global or
transpacific ocean transportation markets, a change in the cost of goods or currency exchange rates, pressure from U.S.
or foreign governments, imposition of or increases in tariffs and uncertainties regarding tariff policies or other changes
in international trade policies could adversely affect freight volumes and rates in the Company’s China services.
Additionally, fluctuations in the price of oil could further impact the Alaskan economy, which in turn could impact the
Company’s business.
14
The shipping industry is competitive, and the Company has been and may continue to be impacted by new or
increased competition.
The Company has faced and may continue to face new competition by established or start-up shipping operators that
enter into the Company’s markets. The shipping industry is competitive with limited barriers to entry. Ocean carriers
can shift vessels in and out of tradelanes or charter vessels to manage capacity and meet customer demands. The
Company also competes with air freight carriers some of which are able to offer more attractive schedules and services,
or to increase capacity. The entry of a new competitor or the addition of new vessels or capacity by existing competitors
on any of the Company’s existing routes could result in a significant increase in available shipping capacity that could
have an adverse effect on the Company’s volumes and rates.
The loss of or damage to key customer relationships may adversely affect the Company’s business.
The Company’s businesses are dependent on their relationships with customers and derive a significant portion of their
revenues from the Company’s largest customers. The Company’s business relies on its relationships with the U.S.
military, freight forwarders and non-vessel owning common carriers, large retailers and consumer goods manufacturers,
as well as other larger customers. For more information regarding the Company’s significant customers, see the
discussion in Part I, Item 1 of this Annual Report. The loss of or damage to any of these key relationships may adversely
affect the Company’s business and revenue.
The Company is dependent upon key vendors and third parties for equipment, capacity, facilities, infrastructure
and services essential to operate its business, and if the Company fails to secure sufficient third-party services, its
business could be adversely affected.
The Company’s businesses are dependent upon key vendors who provide terminal, rail, truck, agent and ocean
transportation services. Service structures and relationships with these parties are important in the Company’s
intermodal business, as well as in the China, Guam, Micronesia, Japan, Alaska export and South Pacific services. If the
Company cannot reliably secure sufficient transportation equipment, capacity or services from these third parties at
reasonable prices or rates to meet its or its customers’ needs and schedules, or if there are changes to the costs of such
services, customers may seek to have their transportation and logistics needs met by others on a temporary or permanent
basis. If this were to occur, the Company’s business, results of operations and financial condition could be adversely
affected. The loss of or damage to any of these key relationships may also adversely affect the Company’s business and
revenue.
An increase in fuel prices, changes in the Company’s ability to collect fuel-related surcharges, and/or the cost or
limited availability of required fuels may adversely affect the Company’s profits.
Fuel, including LNG fuels and biofuels, is a significant operating expense for the Company’s Ocean Transportation
business. The price and supply of fuel are difficult to predict and fluctuate based on events beyond the Company’s
control, including impacts from global macroeconomic conditions and geopolitical events. Increases in the price of fuel
may adversely affect the Company’s results of operations. Any such increases also can lead to increases in other
expenses, such as energy costs and costs to purchase outside transportation services. In the Company’s Ocean
Transportation and Logistics services segments, the Company utilizes fuel-related surcharges, although increases in the
fuel-related surcharges may adversely affect the Company’s competitive position and may not correspond exactly with
the timing of increases in fuel expense. Changes in the Company’s ability to collect fuel-related surcharges, including
recovery of all or most fuel-related expenses, also may adversely affect its results of operations.
The development of alternative fuels (such as low- or carbon-neutral fuels), including the necessary infrastructure and
technology to utilize such fuels, is still in early experimental stages. There is significant uncertainty as to when, if at all,
these alternative fuels will become commercially available or viable at a reasonable cost and in sufficient quantities, and
whether Matson will be able to utilize or have access to these alternative fuels (or any such alternative fuels developed in
the future) in a timely and cost-effective manner. In addition, advances in fuel technology could require Matson to incur
significant capital costs to utilize any such technologies (including, for example, efforts to accelerate building of new
vessels, retrofit existing vessels, retire vessels early or make reserve vessels unusable) and Matson may be unable to
equip its vessels with these technologies on a timely basis, if at all. It is also uncertain to what extent charter vessel
owners may be willing to experiment with, or make the necessary investments to utilize, alternative fuels.
15
Evolving regulations and stakeholder expectations related to sustainability matters exposes the Company to
heightened scrutiny, additional costs, operational challenges and a number of risks.
The SEC, the state of California, and other regulators, investors, advisory firms, employees, customers, suppliers,
governments and other stakeholders are increasingly focused on and have established regulations and expectations
related to sustainability matters and related corporate practices, disclosures and initiatives. These evolving regulations
and expectations may impact the Company’s reputation, business and attractiveness as an investment, employer or
business partner to the extent the Company – including its initiatives, goals and reporting – fails to satisfy or is perceived
to fail to satisfy those regulations and expectations, including as a result of any third-party rating or assessment. The
adoption and expansion of related legislation and regulations have also resulted and may again result in increased capital
expenditures and compliance, operational and other costs to the Company. For example, the state of California has
adopted climate change disclosure requirements. Compliance with such rules could require significant effort and
resources and result in changes to the Company’s current GHG emission reduction goals.
The Company’s public disclosures on its climate, sustainability, human capital and other initiatives include its goals or
expectations with respect to those matters, including GHG emission reduction targets. These disclosures are aspirational
and based on standards and frameworks for presenting and measuring progress that are not harmonized and are still
developing, assumptions that may change, disclosure controls and procedures that continue to evolve, and with respect to
our GHG emissions targets, dependent in part on the industry’s successful and timely development of alternative fuels
and technologies. The Company’s use of disclosure frameworks and standards, and the interpretation or application of
those frameworks and standards, may change from time to time or differ from those of others. This may result in a lack
of consistent or meaningful comparative data from period to period or between the Company and other companies in the
same industry. The Company’s initiatives and goals may not be favored by certain stakeholders and could impact the
attraction and retention of investors, customers and employees, as well as the Company’s willingness to do business with
other companies or customers or their willingness to do business with the Company. Efforts to achieve or accurately
track the Company’s initiatives and goals face numerous risks and may be untimely, be unsuccessful, result in additional
costs or experience delays, and as a result may have an adverse impact on the Company, including its brand, reputation,
financial performance and growth and stock price, and may expose the Company to increased scrutiny from the
investment community as well as enforcement authorities.
The Company may not be timely or successful in completing its fleet upgrade initiatives, which may result in
significant costs and adversely impact the Company’s ability to meet its climate goals.
The Company’s four commissioned Aloha and Kanaloa class vessels include dual fuel capable engines that can run on
low sulfur fuel oil or LNG. The Company has completed the installation of tanks, piping and cryogenic equipment on
Daniel K. Inouye and Kaimana Hila and re-engined Manukai to operate on LNG. In addition, construction has begun on
three new LNG-ready Aloha Class vessels. The Company has made and anticipates making significant capital
expenditures in connection with these fleet initiatives. Additional operating costs may be incurred to the extent use of
LNG presents new maintenance requirements or unforeseen complications.
The Company’s investments in LNG-ready vessels, whether on their own or in addition to other Company initiatives,
may be insufficient to meet the Company’s previously announced GHG emission reduction goals on a timely basis or at
all. There is no guarantee that the Company will be able to secure LNG via bunker barges or other methods on the U.S.
West Coast or in China in sufficient amounts to fuel its vessels or at a reasonable cost, as increased demand for LNG
could decrease available supply of LNG and increase prices. Governments have in the past and may again in the future
impose tariffs on LNG that also may increase supply costs. As a result of these risks, the Company may not fully realize
the benefits of these investments.
The Company’s vessel construction agreements with Philly Shipyard subject the Company to risks.
On November 1, 2022, MatNav and Philly Shipyard entered into vessel construction agreements pursuant to which
Philly Shipyard will construct three new 3,600-TEU Aloha Class dual-fuel capable containerships, with expected
delivery dates during the first quarter 2027, the third quarter 2027 and the second quarter 2028. Failure of any party to
the vessel construction agreements to fulfill its obligations under the agreements could have an adverse effect on the
Company’s financial position and results of operations. Such a failure could happen for a variety of reasons, including
but not limited to (i) delivery delays, (ii) delivery of vessels that fail to meet any of the required operating specifications
(for example, capacity, fuel efficiency or speed), (iii) events in South Korea that prevent one or more significant
16
subcontractors to Philly Shipyard from performing, (iv) loss of key personnel at either Philly Shipyard or any of its
subcontractors, (v) work stoppages or other labor disruptions that may occur as a result of the failure of Philly Shipyard
to negotiate collective bargaining agreements with its unions, (vi) the insolvency of, or the refusal or inability to perform
for any reason, by Philly Shipyard or any of its subcontractors, (vii) the ability of Hanwha Ocean and Hanwha Systems
(collectively, “Hanwha”) to integrate Philly Shipyard successfully into their global operations following Hanwha’s
acquisition of Philly Shipyard, or (viii) delays in the construction of vessels scheduled to be completed before the
Company’s vessels. Significant delays in the delivery of the new vessels could limit our ability to replace aging vessels
in the Alaska service without substantial modifications and delay the Company’s ability to upsize the CLX service,
which could also have an adverse impact on our business plans, financial condition and results of operations.
The Company’s operations are susceptible to weather, natural disasters, risks arising from climate change,
maritime accidents, spill events and other physical and operating risks.
As a maritime transportation company, the Company’s operations are vulnerable to delay, disruptions and loss of life
and property as a result of weather, natural disasters and other climate-driven events, such as rising temperatures and
heat waves, rising sea levels, bad weather at sea (including increased storm severity), lightning strikes, wildfires, lava
flows, hurricanes, typhoons, tsunamis, droughts, windstorms, floods and earthquakes. Climate change has increased and
may continue to increase the frequency, severity and uncertainty of such events. For example, sea level rise could
potentially impact coastal and other low-lying areas, cause erosion of shorelines, higher water tables and increased
flooding, which could damage the Company’s vessels, terminals or facilities. In addition, the Company’s customers and
the island communities it serves throughout the Pacific are particularly vulnerable to rising sea levels and severe storms,
which may drive inhabitants away from these regions and reduce demand for the Company’s services in the affected
areas and adversely impact our business.
The Company’s operations are also vulnerable to risks related to the operation of ocean-going vessels, including risks of
potential marine accidents, or disasters, including grounding, fires, explosions, collisions, mechanical failures, human
error, maintenance issues, latent defects, oil or other spill or environmental accidents, whale strikes, war, terrorism and
piracy, lost or damaged cargo, delays, injury and loss of life. These risks could be exacerbated by severe weather or
other climate-driven events. Changing macroeconomic and geopolitical conditions, including geopolitical conflict, may
also result increased attacks on vessels, piracy or terrorism.
Such events could interfere with the Company’s ability to provide on-time scheduled service, require evacuation of
personnel or stoppage of services or impact the Company’s customer’s operations, resulting in increased expenses and
potential loss of business associated with such events. In addition, severe weather and natural disasters can result in
interference with the Company’s terminal operations and may cause serious damage to its vessels and cranes. These
impacts could be particularly acute in ports such as Dutch Harbor and Kodiak, Alaska where the Company is dependent
on a single crane. The Company’s vessels and their cargoes, terminals and other facilities are also subject to operating
risks such as mechanical failure, collisions and human error.
The occurrence of any of these events may result in damage to or loss of terminals, port facilities and infrastructure,
vessels, containers, cargo and other equipment, increased maintenance expense, loss of life or physical injury to its
employees or people, pollution, or the slow down or suspension of operations. For example, damage to the Company’s
vessels could require repair at a dry-docking facility. The costs of repairs may be substantial which may adversely affect
the Company’s business and financial condition. Further, the Company may be unable to find space at a suitable dry-
docking facility, the vessels may be forced to wait for space or be towed to a different facility, all of which could result
in additional expenses and delays, and may adversely affect the Company’s business.
These events can also expose the Company to reputational harm and liability for resulting damages, including for loss of
life and property, and possible penalties that, pursuant to typical maritime industry policies, it must pay and then seek
reimbursement from its insurer. Affected vessels may also be removed from service and thus would be unavailable for
income-generating activity. Furthermore, the Port of Alaska requires upgrades to its port facilities and infrastructure to
improve operational safety and efficiency, accommodate modern shipping operations and improve resiliency, as well as
to mitigate the risk of failure due to corrosion, deterioration or loss of load bearing capacity. As a result, there is an
increased risk that an earthquake or other natural disaster could damage or render inoperable, in whole or in part, port
facilities and infrastructure at the Port of Alaska. This, in turn, could adversely affect transportation volumes or rates in
Alaska and adversely impact the Company’s Ocean Transportation business and Span Alaska’s freight forwarding
business, particularly given the Alaskan economy’s dependence on this port for ocean cargo.
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There is no assurance that our efforts to mitigate the impact of these risks, including from severe weather or other
climate-driven events on our operations, will be effective. Although we take measures that we believe are reasonable to
mitigate these risks, it is not practicable to eliminate such risks altogether. The Company’s casualty and liability
insurance policies are generally subject to large retentions and deductibles and may not cover all losses the Company
may incur. Some types of losses, such as losses resulting from a port blockage, generally are not insured. In some cases,
the Company retains the entire risk of loss because it is not economically prudent to purchase insurance coverage or
because of the perceived remoteness of the risk. Other risks are uninsured because insurance coverage may not be
commercially available. Finally, the Company retains all risk of loss that exceeds the limits of its insurance.
The Company may be impacted by transitional and other risks arising from climate change.
The Company may be impacted by transitional and other risks arising from climate change and the global shift toward a
low carbon future. Organizational, industrial and governmental shifts in operations as well as legal and regulatory
requirements to reduce or eliminate emissions and/or increase efficiency, or any amendments, modifications or changes
in the interpretation, application or enforcement of any such operations or requirements, may require the Company to
increase expenditures, make changes to existing infrastructure, vessels and equipment, limit the speed at which the
Company’s vessels are permitted to travel, and make other changes to its business model. For example, the maritime
industry is moving toward deployment of clean energy technologies and use of electricity powered by renewable energy
sources to power terminal operations as a way to reduce shoreside GHG emissions. As the Company and SSAT increase
their reliance on the power grid at terminals, including for cold-ironing and ground service fleets, the Company may
experience increased risks related to power outages, brown outs or black outs. The likelihood of these risks is
compounded by uncertainties regarding the reliability of renewable energy sources as well as any increased frequency of
extreme weather events that may disrupt the generation or transmission of electricity.
In addition, compliance with climate change requirements or regulations such as the IMO’s CII requirements, or any
amendments, modifications or changes in the interpretation, application or enforcement of any such requirements or
regulations, may create schedule disruptions and could require Matson’s fleet to slow down if efficiency improvements
or transitions to alternative fuels together are not enough to reduce GHG emissions sufficiently, thus impacting Matson’s
expedited business model and competitive advantage.
New environmental requirements for vessel performance and operation could also require the Company to accelerate the
building of new vessels, increase the construction costs for new vessels and equipment to accommodate even newer
technology as it emerges while today’s technology becomes obsolete, initiate unexpected retrofit projects for existing
vessels, retire older vessels earlier than expected, or render reserve vessels unusable. If these outcomes were to occur,
the Company’s business, results of operations, cash flows and financial condition could be adversely affected.
The Company faces risks related to actual or threatened health epidemics, outbreaks of disease, pandemics or
other major health crises, which could significantly disrupt the Company’s business.
The Company’s business has in the past, and could in the future, be impacted adversely by outbreaks of disease, the
effects of public health epidemics, pandemics or other major heath crises (which the Company refers to collectively as
public health crises), such as the COVID-19 pandemic. Actual or threatened public health crises can have a number of
adverse impacts, including volatility in the global economy, impacts to the Company’s customers’ business operations,
reduced tourism in the markets the Company serves, potential restrictions on employee travel, or significant disruptions
in ocean-borne transportation of goods, logistics demand and supply chain activity, caused by a variety of factors such as
quarantines, factory and office closures, port closures, or other government-imposed restrictions, any of which can
adversely impact the Company’s business, financial condition, operating results and cash flows.
The Company’s significant operating agreements and leases could be renewed/replaced on less favorable terms or
may not be renewed/replaced on acceptable terms, if at all.
The significant operating agreements and leases entered into by the Company in the course of its operations, including
those related to terminals, chartered vessels, bonded and unbonded container yards, cross-dock facilities, warehouses and
offices as well as those entered into with SSAT, expire at various points in time and may not be renewed/replaced with
comparable assets with the specifications necessary for the Company’s or SSAT’s businesses or could be
18
renewed/replaced on less favorable terms, if at all, thereby adversely affecting the Company’s future financial position,
results of operations and cash flows.
The Company may face unexpected dry-docking or repair costs for its vessels.
The Company routinely engages shipyards to dry-dock its vessels for regulatory compliance and to provide repair and
maintenance, and capital enhancements. Vessels may also have to be dry-docked or repaired at sea in the event of
accidents or other unforeseen damage. Unexpected dry-dockings or repairs could require the Company to activate a
reserve vessel, purchase additional fuel and operate a less-efficient, smaller vessel for a period of time. The Company
also operates a number of older active and reserve vessels that may require more frequent and extensive maintenance.
The cost of repairs is difficult to predict and can be substantial. In addition, the time when a vessel is out of service for
maintenance is determined by a number of factors, including regulatory deadlines, market conditions, shipyard
availability, shipyard location, availability of employees and repairmen, and customer requirements, and accordingly, the
length of time that a vessel may be out of service may be longer than anticipated, which could adversely affect the
Company’s business, financial condition, results of operations and cash flows. The timing and expense required for
repairs could be exacerbated by compliance with MARAD and Jones Act requirements.
The Company is involved in a joint venture and is subject to risks associated with joint venture relationships.
The Company is involved in a terminal joint venture with SSAT (and through SSAT, other joint ventures at various U.S.
West Coast terminals), and may initiate future joint venture projects. A joint venture involves certain risks for the
Company such as:
The Company’s lack of voting control over the joint venture, including the risk that the joint venture takes actions
resulting in reputational harm to the Company;
Misalignment or inconsistency of interests between the Company and the joint venture partner;
Reliance on the joint venture partner to fund its share of capital or fulfill its other commitments, including the risk
that the joint venture partner could become bankrupt; and
Operating difficulties and financial losses, including from abandonment or termination of terminal lease agreements,
at the joint venture, which may lead to SSAT writing down assets or incurring impairment charges.
In addition, the Company relies on SSAT for its stevedoring services at the ports of Long Beach and Oakland, California
and Tacoma, Washington on the U.S. West Coast. The Company could be adversely affected by any changes in the
services provided or to the costs of such services provided by SSAT. Furthermore, the Company’s results of operations
have been and may continue to be impacted by lower share of income from SSAT, including as a result of declines in lift
volumes due to reduced carrier volumes into U.S. West Coast ports.
The Company is subject to risks associated with conducting business in foreign markets.
Matson’s China service and other international services are subject to risks associated with conducting business in
foreign markets, which include:
Challenges associated with operating in foreign countries and developing relationships with foreign companies,
business associates and governments, including as a result of cultural differences;
Difficulties in staffing and managing foreign operations, including dynamic employment and immigration laws;
The Company’s ability to comply with U.S. and foreign legal and regulatory restrictions, including anti-corruption
laws such as the Foreign Corrupt Practices Act;
Not having continued access to existing port facilities or feeder vessels;
The Company’s ability to manage changes in the cost of goods or currency exchange rate fluctuations;
Geopolitical and economic instability;
Economic downturns or slower growth in the local markets or geographic areas in which we conduct business;
Dynamics involving U.S. trade relations with other countries, including the imposition or threatening of or
uncertainty associated with the level, magnitude and product range of tariffs, non-tariff trade barriers or sanctions,
including the use of export control restrictions and sanctions against certain countries and individual companies, or
other governmental actions, and responsive actions taken by the Company’s customers, including with respect to
their supply chains;
19
The Company’s ability to offer a differentiated service for which customers are willing to pay a significant
premium; and
Customer preferences to diversify supply chains away from, or otherwise limit sourcing from, certain countries.
The Company’s terminals in Hawaii and Alaska require modernization.
The Company has completed the first phase of renovating and modernizing its Sand Island terminal in Honolulu Harbor.
However, significant upgrades remain, including the long-term expansion program at the Sand Island terminal and
projects to improve resiliency to risks from events such as severe weather, natural disasters, sea level rise and other
climate-change related risks. The Company is continuing discussions with state and local authorities regarding a port
modernization program for the Port of Alaska. Significant upgrades to the terminal and port facilities at the Port of
Alaska are needed to improve operational safety and efficiency, accommodate modern shipping operations, and improve
resiliency, including to risks due to severe weather events, natural disasters and climate-change related risks. For
example, the aging cranes and dock facilities of the port are increasingly exposed to the risk of failure due to corrosion,
deterioration, and the loss of load-bearing capacity particularly in the event of extreme seismic events or other natural
disasters. Regulatory, construction or other delays or cost overruns related to the expansion and modernization of the
terminals could have an adverse impact on the Company’s business plans, financial condition and results of operations.
In addition, the terminal modernization programs may not result in improved operational productivity or improved
resiliency to severe weather events, extreme seismic events or other natural disasters or generate expected returns.
Heightened security measures, war, actual or threatened terrorist attacks, efforts to combat terrorism and other
acts of violence may adversely impact the Company’s operations and profitability.
War, terrorist attacks and other acts of violence may cause consumer confidence and spending to decrease, or may affect
the ability or willingness of tourists to travel to Hawaii, Guam or Alaska, thereby adversely affecting those economies
and the Company. Wars or terrorism could impact global supply chains due to changes in vessel routing, product
sourcing decisions, or governmental sanctions or restrictions. Additionally, acts of war and future terrorist attacks could
increase volatility in the U.S. and worldwide financial markets. Acts of war or terrorism may also be directed at the
Company’s shipping operations or may cause the U.S. government to take control of Matson’s vessels for military
operations. Heightened security measures, including customs inspections and related procedures in countries of origin
and destination, potentially slow the movement and increase the cost of freight through U.S. or foreign ports, across
borders or on U.S. or foreign railroads or highways.
Acquisitions may have an adverse effect on the Company’s business.
The Company’s growth strategy includes expansion through acquisitions, including, for example, the Company’s
acquisitions of Horizon Lines, Inc. (“Horizon”) in 2015 and Span Alaska in 2016. There is no assurance that the
Company will be successful in identifying, negotiating or consummating any future acquisitions. Even if suitable
candidates are identified, such transactions may result in regulatory scrutiny, litigation or difficulties assimilating
acquired assets or companies, and may result in the diversion of the Company’s capital and its management attention
from other business issues and opportunities. The Company may not be able to integrate companies that it acquires
successfully, including their personnel, financial systems, distribution, operations and general operating procedures. The
Company may also encounter challenges in achieving appropriate internal control over financial reporting in connection
with the integration of an acquired company. The Company may pay a premium for an acquisition, resulting in goodwill
that may later be determined to be impaired.
Risks Related to Employees
Work stoppages or other labor disruptions caused by the Company’s unionized workers and other workers or
their unions in related industries could adversely affect the Company’s operations.
A significant portion of Matson’s employees are covered by collective bargaining agreements. Furthermore, the
Company relies on the services of third parties, including SSAT, which employ persons covered by collective bargaining
agreements. For additional information on collective bargaining agreements with unions, see Part I, Item 1, Subheading
C. Employees and Labor Relations of this Annual Report.
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Previously, the Company has been adversely affected by actions taken by employees of the Company or other
companies in related industries against efforts by management of the Company or other companies to control labor costs,
restrain wage or benefit increases or modify work practices. In the past, strikes, slow-downs and disruptions have
occurred as a result of the failure of Matson or other companies in its industry to negotiate collective bargaining
agreements with such unions successfully.
In addition, any slow-downs, strikes, lock-outs or other disruptions, including limits on the availability of labor through
trade union hiring halls, have had and in the future, particularly in years when collective bargaining agreements are
being negotiated, could have an adverse impact on Matson’s or SSAT’s operations.
Loss of the Company’s key personnel or failure to adequately manage human capital could adversely affect its
business.
The Company’s future success depends, in significant part, upon the continued services of its key personnel and skilled
employees, including its senior management, as well as key personnel at its joint venture partners. The permanent or
temporary loss of the services of key personnel could adversely affect the Company’s future operating results because of
such employees’ experience with and knowledge of the Company’s business and customer relationships. If key
personnel and skilled employees depart or are unable or unwilling to work, the Company’s ability to execute its business
model could be impaired to the extent it cannot replace such personnel or sufficiently train new personnel in a timely
manner. In addition, the Company may incur significant costs to replace these employees. Whether the Company can
meet its labor needs is subject to a variety of pressures, including market compensation and benefit levels, which may be
impacted by pressure within the industry to increase wages, including due to the threat of a labor strike; the availability
of labor, which may be impacted by national and global labor trends including higher-than-normal levels of individuals
leaving the workforce and industry trends including aging workforces that may reduce the available pool of skilled
workers; a mismatch of skills or experience to support the evolving needs of the Company’s business; and employee
expectations or desire for changes in the work environment. In addition, the Company’s workforce is aging, and within
the next few years an increasing number of employees will be eligible to retire, which may result in a period of higher
turnover rates than we have historically experienced and could amplify these challenges. The Company does not
maintain key person insurance on any of its key personnel.
The Company’s investments in and efforts to manage its human capital and maintain a desirable workplace culture,
including to create a safe and healthy work environment, and foster a rewarding workplace for employee development
and advancement, may not be successful in identifying, attracting, developing, motivating, retaining, competing for or
replacing qualified personnel. These efforts and the Company’s reputation may also be impacted by any failure or
perceived failure to meet or timely progress on publicly disclosed human capital-related goals and initiatives, or to
compare favorably with the progress or goals of its industry or peers.
Risks Related to Information Technology
If the Company is not able to use its information technology and communications systems effectively, the
Company’s ability to conduct business might be negatively impacted.
The Company is highly dependent on the proper functioning of its information technology systems to enable operations
and compete effectively. The Company regularly updates its information technology systems or implements new
systems, which could cause substantial business interruption. There is no assurance that the systems upgrades or new
systems will meet the Company’s current or future business needs, or that they will operate as designed. In addition,
adoption of new and rapid changes in technology, such as the rise in artificial intelligence applications, may impact the
transportation and logistics industry. If Matson does not appropriately adapt its operations to these new technologies as
quickly or effectively as its competitors, the Company’s business could be adversely affected.
The Company’s information technology systems also rely on third-party service providers for access to the Internet,
satellite-based communications systems, the electric grid, database storage facilities and telecommunications providers.
The Company has no control over the operations of these third-party service providers. In the past, disruptions in the
Company’s third-party service providers have impacted the Company’s operations, including the Company’s ability to
book and manage freight, stow vessels, and process customs declarations. Some of the Company’s employees work
from home or remotely, increasing the Company’s dependence on its information technology systems and third-party
providers during those times. If the Company’s information technology and communications systems experience
21
reliability issues, integration or compatibility concerns or if the Company’s third-party providers are unable to perform
effectively or experience disruptions, cyber attacks or failures, there could be an adverse impact on the availability and
functioning of the Company’s information technology and communications systems, which could lead to business
disruption or inefficiencies, reputational harm or loss of customers.
The Company’s information technology systems have in the past and may in the future be exposed to
cybersecurity risks and other disruptions that could impair the Company’s ability to operate and adversely affect
its business.
The shipping industry is a more frequent target of cyber attacks than some other industries because of the essential
nature of these services. The Company relies extensively on its information technology systems and third-party service
providers in many aspects of its business, including cloud services for accounting, billing, disbursement, cargo booking
and tracking, vessel scheduling and stowage, equipment tracking, customer service, banking, payroll and employee
communication systems. The Company also collects, stores and transmits sensitive data, including its proprietary
business information and that of its customers, and personally identifiable information of its customers and employees.
The Company’s practices, policies and other efforts, including as described in Part I, Item 1C of this Annual Report on
Form 10-K, may not be sufficient to prevent, detect or remediate all cybersecurity risks or other disruptions, and the
Company and its service providers have in the past experienced and may in the future experience cybersecurity
incidents, disruptions, threats and vulnerabilities such as malware (including computer viruses and ransomware),
software bugs, denial-of-service (“DoS”) attacks, phishing, spoofing, identity-based attacks, code injection attacks, cyber
terrorism, sabotage, circumvention of security systems (whether physical or virtual), malfeasance, breaches due to
employee error, natural disasters, accidents, power disruptions or loss, telecommunications failure, unauthorized access
or other catastrophic events or failures at the Company’s facilities, aboard its vessels or at third-party locations.
Any failure, breach or unauthorized access to the Company’s systems or those of third parties on which the Company
relies could result in the loss of confidential, sensitive or proprietary information, interruptions in its service or
production or otherwise impact the Company’s ability to conduct business operations, and potentially could result in
reductions in revenue and profits, damage to its reputation or liability.
Risks Related to Financial Matters
A deterioration of the Company’s credit profile, disruptions of the credit markets or higher interest rates could
restrict its ability to access the debt capital markets or increase the cost of debt.
Deterioration in the Company’s credit profile may have an adverse effect on the Company’s ability to access the private
or public debt markets and also may increase its borrowing costs. If the Company’s credit profile deteriorates
significantly, its access to the debt capital markets or its ability to renew its revolving credit facility and other committed
lines of credit may become restricted, or the Company may not be able to refinance debt at the same levels or on the
same terms. Because the Company relies on its ability to draw on its revolving credit facility to support its operations
when required, any volatility or disruption in the credit and financial markets or other development that prevents the
Company from accessing funds (for example, a lender that does not fulfill its lending obligation) or renewing its
revolving credit facility could have an adverse effect on the Company’s financial condition and cash flows.
Additionally, the Company’s credit agreements generally include an increase in borrowing rates if the Company’s credit
profile deteriorates. Furthermore, the Company incurs interest under its revolving credit facility based on floating rates.
Floating rate debt creates higher debt service requirements as market interest rates increase, as was the case in
connection with the U.S. Federal Reserve’s interest rate increases in 2022 and 2023, and high interest rates can adversely
affect the Company’s cash flow and results of operations. Disruptions to the credit markets as a result of
macroeconomic, geopolitical, or financial market developments could increase the Company’s cost of capital and limit
the Company’s access to capital.
Failure to comply with certain restrictive financial covenants contained in the Company’s credit facilities could
preclude the payment of dividends, impose restrictions on the Company’s business segments, capital resources or
other activities or otherwise adversely affect the Company.
The Company’s credit facilities contain certain restrictive financial covenants, the most restrictive of which include a
maximum ratio of debt to earnings before interest, taxes, depreciation and amortization (“EBITDA”), a minimum ratio
of EBITDA to interest expense, certain prohibitions on additional priority debt and the maintenance of minimum
22
shareholders’ equity. If the Company does not maintain these and other required covenants, and a breach of such
covenants is not cured timely or waived by the lenders, resulting in a default, the Company’s access to credit may be
limited or terminated, dividends may be suspended, and the lenders could declare any outstanding amounts due and
payable. The Company’s continued ability to borrow under its credit facilities is subject to compliance with these
financial and other non-financial covenants.
The Company’s effective income tax rate may vary.
Various internal and external factors may have favorable or unfavorable material or immaterial effects on the
Company’s effective income tax rate and, therefore, impact the Company’s net income and earnings per share. These
factors include, but are not limited to changes in tax rates; changes in tax laws, regulations, and rulings; changes in
interpretations of existing tax laws, regulations and rulings; changes in the evaluation of the Company’s ability to realize
deferred tax assets, and changes in uncertain tax positions; changes in accounting principles; changes in current pre-tax
income as well as changes in forecasted pre-tax income; changes in the level of Capital Construction Fund (“CCF”)
deductions, non-deductible expenses, and expenses eligible for tax credits; changes in the mix of earnings among
countries with varying tax rates; changes to the allowable amounts of foreign derived intangible income deductions; and
acquisitions and changes in the Company’s corporate structure. These factors may result in periodic revisions to the
Company’s effective income tax rate, which could affect the Company’s cash flow and results of operations.
Changes in the value of pension assets, or a change in pension law or key assumptions, may adversely affect the
Company’s financial performance.
The amount of the Company’s employee pension and post-retirement benefit costs and obligations is calculated on
assumptions used in the relevant actuarial calculations. Adverse changes in any of these assumptions due to economic or
other factors, changes in discount rates, higher health care costs, or lower actual or expected returns on plan assets, may
adversely affect the Company’s operating results, cash flows, and financial condition. In addition, a change in federal
law, including changes to the Employee Retirement Income Security Act or Pension Benefit Guaranty Corporation
premiums, may adversely affect the Company’s single-employer and multi-employer pension plans and plan funding.
These factors, as well as a decline in the fair value of pension plan assets, may put upward pressure on the cost of
providing pension and medical benefits and may increase future pension expense and required funding contributions.
There can be no assurance that the Company will be successful in limiting future cost and expense increases, and
continued upward pressure in costs and expenses could further reduce the profitability of the Company’s businesses.
The Company may have exposure under its multi-employer pension and post-retirement plans in which it
participates that extends beyond its funding obligation with respect to the Company’s employees.
The Company contributes to various multi-employer pension plans. In the event of a partial or complete withdrawal by
the Company from any plan that is underfunded, the Company would be liable for a proportionate share of such plan’s
unfunded vested benefits (see Note 11 to the Consolidated Financial Statements in Item 8 of Part II of this Annual
Report). Based on the limited information available from plan administrators, which the Company cannot independently
validate, the Company believes that its portion of the contingent liability in the case of a full withdrawal or termination
may be material to its financial position and results of operations. If any other contributing employer withdraws from
any plan that is underfunded, and such employer (or any member of its controlled group) cannot satisfy its obligations
under the plan at the time of withdrawal, then the Company, along with the other remaining contributing employers,
would be liable for its proportionate share of such plan’s unfunded vested benefits. In addition, if any of the multi-
employer plans to which the Company contributes fails to satisfy the minimum funding requirements, the Internal
Revenue Service will impose certain penalties and taxes on the Company and other contributing employers.
Risks Related to Legal, Regulatory and Compliance Matters
As an ocean transportation and logistics services company, the Company is subject to numerous safety,
environmental, and other laws and regulations that impact the Company’s operations, are costly to comply with
and expose the Company to liability.
The Company, including its vessels and terminals, is subject to numerous federal, state and local laws and regulations,
including those related to safety, cabotage, equipment standards and government rates. In addition, the Company is
subject to environmental laws and regulations, including those relating to air quality initiatives at port locations; air
23
emissions; use of shore power at California ports; wastewater discharges; management of storm water; the storage,
transportation, handling, emission and disposal of solid and hazardous materials, oil and oil related products, hazardous
substances and wastes; the investigation and remediation of contamination and liability for damages to the environment;
health, safety and the protection of the environment and natural resources; and climate change, including any
regulations, mandates or restrictions related to GHG emissions, such as a potential carbon tax, and energy use. Any
changes in applicable laws and regulations, including their enforcement, interpretation or implementation that results in
more stringent requirements than currently anticipated, as well as any new laws and regulations that are adopted could
impose significant additional costs and limitations on the Company’s ability to operate. Mitigation strategies or
contingency plans to remain in compliance with applicable laws and regulations may be unsuccessful, result in
additional costs or experience delays. Such costs may not be recoverable through increased payments from customers.
For a discussion of specific laws and regulations, see Part I, Item 1 of this Annual Report.
Federal, state and local laws and regulations require us to obtain certificates of financial responsibility and to adopt
procedures for oil and hazardous substance spill prevention, response and clean up, among other requirements impacting
the Company’s business. In complying with applicable laws and regulations, the Company has incurred expenses and
may incur material future costs and expenses related to vessel and equipment modifications, new equipment, higher-
priced fuel, changes in operating practices and procedures, tracking emissions, changing routes, adopting or modifying
energy sources and undergoing additional oversight inspections, all of which could adversely affect the Company’s
business and financial condition. For example, Matson’s vessels operate within emissions control areas, and the
Company’s U.S. flagged vessels generally must be maintained “in class” and are subject to periodic inspections by the
American Bureau of Shipping or similar classification societies. They also must be periodically inspected by, or on
behalf of, the United States Coast Guard. The Company’s vessels’ operating certificates and licenses are renewed
periodically during the required annual surveys of the vessels, but there is no assurance that the Company’s programs
and policies will be sufficient to have such certificates and licenses renewed. The EPA also requires vessels to obtain
coverage under a general permit and to comply with inspection, monitoring, discharge, recordkeeping and reporting
requirements.
These laws and regulations provide for substantial fines, sanctions, as well as criminal and civil penalties and significant
environmental liabilities, in the event of any violations of, or non-compliance with, their requirements (including any
waivers, permits or recordkeeping and other reporting requirements). Any vessel-generated pollution from incidents in
U.S. waters within three nautical miles, and in some cases, within the 200-mile exclusive economic zone, for example,
could expose us to such fines or penalties.
The Company is subject to, and may in the future be subject to, disputes, legal or other proceedings, and
government inquiries or investigations that could have an adverse effect on the Company.
The nature of the Company’s business exposes it to the potential for disputes, legal or other proceedings, and
government inquiries or investigations relating to antitrust matters, labor and employment matters, personal injury, loss
of life and property damage, environmental, shore power and other matters, as discussed in the other risk factors
disclosed in this section or in other Company filings with the SEC. For example, Matson is a common carrier, whose
tariffs, rates, rules and practices in dealing with its customers are governed by extensive and complex foreign, federal,
state and local regulations, which may be the subject of disputes or administrative or judicial proceedings. If these
disputes develop into proceedings, these proceedings, individually or collectively, could involve or result in significant
expenditures or losses by the Company, or result in significant changes to Matson’s tariffs, rates, rules and practices in
dealing with its customers.
ITEM 1B. UNRESOLVED STAFF COMMENTS
None.
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ITEM 1C. CYBERSECURITY
Risk management and strategy: Matson’s information security, internal audit, business continuity and risk management
teams help to identify and assess cyber and information security threats and vulnerabilities, and establish the appropriate
business systems, preventive controls and risk mitigation strategies. The main objectives of Matson’s approach to cyber
and information security are to protect confidential information while maintaining data integrity and availability; support
legal and regulatory compliance; and prevent disruptions to business operations. The Company regularly enhances its
systems, controls and strategies in an effort to guard against security breaches and unauthorized access to Matson
systems or data and develops policies to guide the appropriate handling and protection of sensitive information by
Matson. This includes managing third-party supply chain risks with its key vendors and business partners. It also
maintains incident response and remediation plans which provide that cybersecurity incidents be communicated to the
Company’s senior leaders who are responsible for assessing the risks associated with a cybersecurity incident and
initiating the Company’s incident response plan. The Company’s incident response and remediation plans are further
supported by ongoing security monitoring services as well as a dedicated management team focused on business
continuity to help support operations and mitigate disruptions should a breach, unauthorized access or other disruption
event occur. In addition, the Company has established a zero trust network access roadmap that includes key security
controls designed to help protect Matson employees and contractors with access to Matson systems against phishing and
brute force password attacks.
The risk management process occurs throughout the organization, but is facilitated through a risk management steering
committee comprised of senior management whose members meet regularly to identify and address specific significant
risks. At least twice a year, management assesses and categorizes key risks based on their potential impact to the
Company and the likelihood of the risk occurring as part of Matson’s enterprise risk management (“ERM”) program.
The ERM program includes regular cyber and information security risk assessments conducted by independent, third-
party cybersecurity professionals, including assessors, consultants, auditors and penetration testers. Results from these
risk assessments, along with remediation recommendations, are provided to executive leadership and the Company’s
Board of Directors (the “Board”). The Board also consults with outside advisors and experts, when appropriate, to
anticipate future threats and trends, and their impact on the Company’s risk environment. In addition, the Company
utilizes third-party audits to test its cybersecurity systems, incident response and remediation plans to help spot
vulnerabilities and improve its ability to respond to unexpected events. For more information on Matson’s ERM
program, see “—Governance” below.
As part of its approach, the Company conducts varied due diligence on its key technology vendors to review their
cybersecurity risk profiles and scores. This includes pre-contract award due diligence reviews of such vendors and cyber
and information security requirements within its vendor contracts. Additionally, the Company leverages independent,
third-party services to monitor the cyber and information security posture of key suppliers and vendors. The Company’s
quarterly information security update to the Chief Executive Officer and Chief Financial Officer includes an update on
the results of these reviews.
Training, education and awareness-building are mechanisms Matson uses to help embed a strong culture of cyber and
information security within its workplace. The Company’s long-term aim is to have a workforce with high-functioning
knowledge of cybersecurity. In furtherance of this aim, the Company conducts training annually for employees that
addresses cyber and information security, and holds additional training typically at least three times per year for specific
topics such as data and email security. Furthermore, Matson requires enhanced training for employees with access to
particularly sensitive information. The Company also has specific escalation processes and resources in place for
employees to raise a concern should they notice anything suspicious.
The design of Matson’s information technology systems is informed in part by the following third-party frameworks or
standards:
ISO 27001
NIST Cybersecurity Framework
NIST 800-171
NIST 800-82
DFARS 252.204-7012
IMO MSC-FAL.1/Circ.3/Rev.2
BIMCO’s Guidelines for Cyber Security Onboard Ships
IAPH’s Cybersecurity Guidelines for Ports and Port Facilities
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In addition, Matson participates in the following organizations in its effort to better understand best practices and
advance its systems and policies over time:
National Security Administration (“NSA”)’s Cybersecurity Collaboration Center
U.S. Cybersecurity and Infrastructure Security Agency’s Critical Partnership
Federal Bureau of Investigation (“FBI”) InfraGard
U.S. Coast Guard Area Maritime Security Committees and Cybersecurity Subcommittees
Cyber-Hawaii
Maritime Transportation System Information Sharing and Analysis Center (“MTS-ISAC”)
Since the beginning of the last fiscal year, Matson has not identified risks from known cybersecurity threats, including as
a result of any prior cybersecurity incidents, that have materially affected the Company, but the Company faces certain
ongoing cybersecurity risks threats that, if realized, are reasonably likely to materially affect the Company. For more
information on the risks and impacts of these matters to Matson, see Part I, Item 1A. Risk Factors – “The Company’s
information technology systems have in the past and may in the future be exposed to cybersecurity risks and other
disruptions that could impair the Company’s ability to operate and adversely affect its business.”
Governance: The Board has oversight of the Company’s risk management process, which includes overseeing our
process for identifying, assessing and mitigating significant financial, operational, legal, strategic, and other risks that
may affect the Company. These risks include, among other things, risks related to cybersecurity and information
security. Risk oversight plays a role in major Board decisions, and the evaluation of key risks is a core part of the
decision-making process – from guidance on strategy to review of major capital expenditures.
The Board administers its oversight role in part through its committees. The Audit Committee is responsible for
overseeing and reviewing cyber and information security risks, policies and programs and reviews the Company’s risk
assessment, risk management and compliance policies twice a year. Senior leaders, including Matson’s Chief
Information Officer, review the Company’s cybersecurity program with the Board at least annually, and the Chief
Information Officer meets with the Audit Committee at least twice per year. Matson’s information security efforts are
led by its Chief Information Officer, who has over 25 years of experience in enterprise software development,
infrastructure and management, including over 18 years with Matson and 7 years at Charles Schwab as Senior Manager
of Middleware Security, and the Chief Information Security Officer, who is a Certified Information Systems Security
Professional, Certified Information Systems Auditor, and is AWS Certified. The Chief Information Officer and the
Chief Information Security Officer provide regular briefings to the Chief Executive Officer, the Chief Financial Officer,
the Board, and the Audit Committee. In addition, the Corporate Compliance Committee, comprised of business unit
leaders, helps oversee cybersecurity initiatives and reports twice per year to the Audit Committee. These processes are
part of the risk management processes described in the risk management and strategy section above.
The Audit Committee also oversees Matson’s ERM program, which includes cyber and information security risks. The
ERM process, which follows the Committee of Sponsoring Organization Framework, is designed to promote visibility to
the Board and management of critical risks and risk mitigation strategies across various time frames, including the
short-, medium- and long-term. Risk mitigation efforts are integrated into strategic plans and budgets. The Chief
Financial Officer and the head of internal audit review the Company’s risk management activities with the Audit
Committee and the Board on a regular basis. Management also regularly updates the full Board at and between Board
meetings on the ERM program and other risk-related matters. In addition, executive sessions of the Board, which are led
by the Lead Independent Director, have focused on certain risk oversight topics from time to time. The Lead
Independent Director consults with the Chairman of the Board regarding risk-focused topics at Board meetings.
26
ITEM 2. PROPERTIES
Matson leases terminal facilities including berth, yard, office and storage spaces. Material terminal facilities used by the
Company’s Ocean Transportation segment include the following:
Terminal Location
Acreage
Honolulu, Hawaii
105
Anchorage, Alaska
38
Dutch Harbor, Alaska
24
Kodiak, Alaska
6
Tacoma, Washington
15
Polaris Point, Guam
30
The Company’s other primary terminal facilities located at the ports of Oakland and Long Beach, California, and
Tacoma, Washington are leased by SSAT.
Other material facilities used by the Company’s Logistics segment include the following:
Other Material Facilities
Description of Facility
Square Footage
Leased facilities:
Pooler, Georgia
Warehouse
710,844
Oakland, California
Warehouse
406,463
Pooler, Georgia
Warehouse
324,832
Oakland, California
Warehouse
132,000
Auburn, Washington
Office / Cross-dock
51,250
Owned facilities:
Anchorage, Alaska
Office / Cross-dock
54,000
Fairbanks, Alaska
Office / Cross-dock
25,350
ITEM 3. LEGAL PROCEEDINGS
Environmental Matters: The Company faces certain risks that could result in material expenditures related to
environmental remediation. The Company believes that based on all information currently available to it, the Company
is currently in compliance, in all material respects, with applicable environmental laws and regulations.
In accordance with SEC rules, with respect to administrative or judicial proceedings involving the environment, the
Company has determined that it will disclose any such proceeding if it reasonably believes such proceeding will result in
monetary sanctions, exclusive of interest and costs, at or in excess of $1 million. The Company believes that such
threshold is reasonably designed to result in disclosure of environmental proceedings that are material to its business or
financial condition.
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.
ITEM 4. MINE SAFETY DISCLOSURES
Not applicable.
27
PART II
ITEM 5. MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS
AND ISSUER PURCHASES OF EQUITY SECURITIES
General Information: Matson’s common stock is traded on the New York Stock Exchange under the ticker symbol
“MATX”. As of February 14, 2025, there were 1,796 shareholders of record of Matson common stock.
Stockholder Return Performance Graph and Trading Information: The following information in this Item 5 shall not be
deemed filed for purposes of Section 18 of the Securities Exchange Act of 1934, nor shall it be deemed incorporated by
reference in any filing under the Securities Act of 1933.
The cumulative total return listed below assumed an initial investment of $100 and reinvestment of dividends at each
fiscal end and measures the performance of this investment as of the last trading day in the month of December for each
of the five years ended December 31, 2024. The graph is a historical representation of past performance only and is not
necessarily indicative of future performance.
The graph above represents $100 invested on December 31, 2019 in the Company’s stock or the indicated index,
including reinvestment of dividends.
Trading volume averaged 271,862 shares a day in 2024, compared with 274,339 shares a day in 2023 and 431,336 shares
a day in 2022, as reported by the New York Stock Exchange.
28
Dividends: Dividends per share of common stock declared by the Company for each fiscal quarter during 2024, 2023
and 2022 were as follows:
Dividends Declared
2024
2023
2022
First Quarter
$
0.32 $
0.31 $
0.30
Second Quarter
0.32
0.31
0.30
Third Quarter
0.34
0.32
0.31
Fourth Quarter
0.34
0.32
0.31
Total
$
1.32 $
1.26 $
1.22
The Board also declared a cash dividend of $0.34 per share for the first quarter 2025, payable on March 6, 2025 to
shareholders of record on February 6, 2025. Although Matson expects to continue paying quarterly cash dividends on its
common stock, the declaration and payment of dividends are subject to the discretion of the Board and depends upon
Matson’s financial condition, results of operations, cash requirements and other factors deemed relevant by the Board.
Share Repurchases: The following is a summary of common stock repurchased by the Company during the three
months ended December 31, 2024:
Total Number of Maximum Number
Shares Purchased
of Shares that May
Total Number of
as Part of Publicly
Yet Be Purchased
Shares
Average Price Announced Plans or
Under the Plans or
Period
Purchased
Paid Per Share
Programs (1) (2)
Programs
October 1 – 31, 2024
75,000 $
136.20
75,000
969,077
November 1 – 30, 2024
61,550
157.20
61,550
907,527
December 1 – 31, 2024
77,000
148.86
77,000
830,527
Total
213,550 $
146.81
213,550
(1)
On June 24, 2021, Matson’s Board approved a share repurchase program of up to 3.0 million shares of common stock, with subsequent approvals
for the addition of 3.0 million shares on each of January 27, 2022, August 23, 2022 and April 27, 2023, for an aggregate total authorization of
12.0 million shares of common stock. The share repurchase program expires on December 31, 2025. Shares may be repurchased in the open
market from time to time, and may be made pursuant to a trading plan in accordance with Rule 10b5-1 of the Security Exchange Act of 1934.
(2)
Amounts exclude shares withheld for employee taxes upon vesting of stock-based awards.
On February 27, 2025, the Company’s Board approved an additional 3.0 million shares of common stock to be added to
the Company’s existing share repurchase program and extended the program’s expiration date to December 31, 2027.
ITEM 6. REMOVED AND RESERVED
29
ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS
FORWARD-LOOKING STATEMENTS AND RISK FACTORS
The Company, from time to time, may make or may have made certain forward-looking statements, whether orally or in
writing, such as, among others, forecasts or projections of the Company’s future performance or statements of
management’s plans and objectives. These statements are considered “forward-looking” statements as that term is
defined in the Private Securities Litigation Reform Act of 1995. Such forward-looking statements may be contained in,
among other things, SEC filings such as Forms 10-K, 10-Q and 8-K, the Company’s Annual Report to Shareholders, the
Company’s Sustainability Report, press releases made by the Company, the Company’s Internet websites (including
websites of its subsidiaries), and oral statements made by officers of the Company. Except for historical information
contained in these written or oral communications, all other statements are forward-looking statements. These include,
for example, all references to 2025 or future years, including such references included under “Fourth Quarter 2024
Discussion and Outlook for 2025,” as well as statements generally identified through the inclusion of words such as
“anticipate,” “believe,” “can,” “commit,” “estimate,” “expect,” “goal,” “intend,” “may,” “plan,” “seek,” “should,”
“target,” and “will,” or similar statements or variations of such terms and other similar expressions. New risks or
uncertainties may emerge from time to time, risks that the Company currently does not consider to be material could
become material, and it is not possible for the Company to predict all such risks, nor can it assess the impact of all such
risks on the Company’s business or the extent to which any factor, or combination of factors, may cause actual results or
outcomes, or the timing of results or outcomes, to differ materially from those contained in any forward-looking
statements. Accordingly, forward-looking statements cannot be relied upon as a guarantee of future results or outcomes
and involve a number of risks and uncertainties that could cause actual results or outcomes to differ materially from
those projected in the statements, including but not limited to the factors that are described in Part I, Item 1A under the
caption “Risk Factors” of this Annual Report on Form 10-K, which section is incorporated herein by reference, and
elsewhere in this report. Except as required by law, the Company undertakes no obligation to revise or update publicly
forward-looking statements or any factors that may affect actual results, whether as a result of new information, future
events, circumstances occurring after the date of this report, or otherwise.
OVERVIEW
Management’s Discussion and Analysis of Financial Condition and Results of Operations (“MD&A”) is designed to
provide a discussion of the Company’s financial condition, results of operations, liquidity and certain other factors that
may affect its future results from the perspective of management. The discussion that follows is intended to provide
information that assists in understanding the changes in the Company’s Consolidated Financial Statements from year to
year, the primary factors that accounted for those changes, and how certain accounting principles, policies and estimates
affected the Company’s Consolidated Financial Statements. The MD&A is provided as a supplement to the
Consolidated Financial Statements and the accompanying notes to the Consolidated Financial Statements in Item 8 of
Part II below, and should be read in conjunction with the entirety of the Company’s Annual Report on Form 10-K and
other reports on Forms 10-Q and 8-K, and other publicly available information. Discussion and analysis of the financial
condition and results of operations of Matson for the year ended December 31, 2023 compared with the year ended
December 31, 2022 can be found in Part II, Item 7 of the Company’s Annual Report on Form 10-K for the year ended
December 31, 2023, filed with the SEC on February 23, 2024.
The MD&A is presented in the following sections:
Historical Financial Information
Fourth Quarter 2024 Discussion and Outlook for 2025
Consolidated Results of Operations
Analysis of Operating Revenue and Income by Segment
Liquidity and Capital Resources
Commitments, Contingencies and Off-Balance Sheet Arrangements
Critical Accounting Estimates
Other Matters
30
HISTORICAL FINANCIAL INFORMATION
The comparative selected financial information of the Company is presented for each of the past five years ended
December 31, 2024. The information should be read in conjunction with Item 8, “Financial Statements and
Supplementary Data.” All fiscal years include 52 weeks, except for the year ended December 31, 2021 which includes
53 weeks (a description of the Company’s fiscal year is included in Note 2 to the Consolidated Financial Statements in
Item 8 of Part II below):
(In millions, except per share amounts)
2024
2023
2022
2021
2020
Operating Revenue:
Ocean Transportation
$ 2,809.7 $ 2,477.0 $ 3,544.6 $ 3,132.8 $ 1,853.9
Logistics
612.1 617.6 798.4 792.5 529.4
Total Operating Revenue
$ 3,421.8 $ 3,094.6 $ 4,343.0 $ 3,925.3 $ 2,383.3
Operating and Net Income:
Ocean Transportation (1)
$ 500.9 $ 294.8 $ 1,281.2 $ 1,137.7 $ 244.8
Logistics
50.4
48.0
72.4
49.8
35.5
Total Operating Income
551.3 342.8 1,353.6 1,187.5 280.3
Interest income
48.3
36.0
8.2
—
—
Interest expense
(7.5) (12.2) (18.0) (22.6) (27.4)
Other income (expense), net
7.3
6.4
8.5
6.4
6.1
Income before Taxes
599.4 373.0 1,352.3 1,171.3 259.0
Income taxes
(123.0) (75.9) (288.4) (243.9) (65.9)
Net Income
$ 476.4 $ 297.1 $ 1,063.9 $ 927.4 $ 193.1
Capital Expenditures (2):
Ocean Transportation
$ 298.9 $ 240.2 $ 190.9 $ 322.4 $ 190.0
Logistics
11.2
8.2
18.4
2.9
2.3
Total Capital Expenditures
$ 310.1 $ 248.4 $ 209.3 $ 325.3 $ 192.3
Depreciation and Amortization:
Ocean Transportation
$ 141.1 $ 130.6 $ 131.1 $ 124.8 $ 104.7
Logistics
12.0
11.6
8.1
7.3
7.5
153.1
142.2
139.2
132.1
112.2
Deferred Dry-docking Amortization — Ocean Transportation
27.2
25.3
24.9
24.3
25.1
Total Depreciation and Amortization
$ 180.3 $ 167.5 $ 164.1 $ 156.4 $ 137.3
Earnings Per Share in Net Income:
Basic
$ 14.14 $
8.42 $ 27.28 $ 21.67 $
4.48
Diluted
$ 13.93 $
8.32 $ 27.07 $ 21.47 $
4.44
Cash dividends per share declared
$
1.32 $
1.26 $
1.22 $
1.06 $
0.90
As of December 31:
Cash and cash equivalents
$ 266.8 $ 134.0 $ 249.8 $ 282.4 $
14.4
Capital Construction Fund (“CCF”) (3)
$ 642.6 $ 599.4 $ 518.2 $
— $
—
Total Debt (before deferred loan fees deduction) (4)
$ 400.9 $ 440.6 $ 517.5 $ 629.0 $ 760.1
Total Shareholders’ equity
$ 2,652.0 $ 2,400.7 $ 2,296.9 $ 1,667.4 $ 961.2
Shares outstanding
33.0
34.4
36.3
41.0
43.2
(1)
The Ocean Transportation segment includes $(1.0) million, $2.2 million, $83.1 million, $56.3 million and $26.3 million of equity in (loss)/income from the
Company’s investment in SSAT for 2024, 2023, 2022, 2021 and 2020, respectively.
(2)
Capital expenditures represent amounts included in cash flows from investing activities in the Company’s Consolidated Statements of Cash Flows for the years
presented.
(3)
The Company’s Capital Construction Fund is described in Note 7 to the Consolidated Financial Statements in Item 8 of Part II.
(4)
The Company’s debt is described in Note 8 to the Consolidated Financial Statements in Item 8 of Part II.
31
FOURTH QUARTER 2024 DISCUSSION AND OUTLOOK FOR 2025
Ocean Transportation: The Company’s container volume in the Hawaii service in the fourth quarter 2024 was
1.7 percent lower year-over-year. The decrease was primarily due to lower general demand. Hawaii’s economy is
expected to continue to grow slowly supported by modest gains in tourism, a low unemployment rate, and increased
construction activity, but partially restrained by continued challenges in population growth and lower discretionary
income as a result of high inflation and interest rates. The Company expects volume in 2025 to be comparable to the
level achieved in 2024, reflecting modest economic growth in Hawaii and stable market share.
In China, the Company achieved significantly higher freight rates in the fourth quarter 2024 compared to the year ago
period. The Company’s container volume in the fourth quarter 2024 also increased 7.2 percent year-over-year due to
seasonally stronger freight demand. The elevated freight rates in the fourth quarter 2024 were supported by a resilient
U.S. economy and a stable consumer demand environment coupled with tighter supply chain conditions. The Company
expects elevated freight rates to continue into the first quarter 2025. Beyond the first quarter, the Company expects
freight rates will largely be driven by the timing of trade flow normalization in the Red Sea, other geopolitical factors,
supply chain activity and the trajectory of the U.S. economy. With respect to the Red Sea, assuming trade conditions
normalize by the middle of the year, the Company expects freight rates to moderate in the second half of the year.
However, if the Red Sea remains disrupted through year end, the Company expects freight rates to remain elevated
throughout the year.
In Guam, the Company’s container volume in the fourth quarter 2024 decreased 10.0 percent year-over-year. The
decrease was primarily due to lower demand from retail and food and beverage segments. In the near term, the
Company expects Guam’s economy to grow modestly supported by a low unemployment rate and an increase in
construction activity. For the full year 2025, the Company expects volume to be modestly higher than the level achieved
last year.
In Alaska, the Company’s container volume for the fourth quarter 2024 increased 1.1 percent year-over-year. The
increase was primarily due to higher northbound volume, partially offset by an additional sailing in the year ago period.
In the near term, the Company expects continued economic growth in Alaska supported by a low unemployment rate,
jobs growth and continued oil and gas exploration and production activity. For the full year 2025, the Company expects
volume to approximate the level achieved last year.
The loss in the fourth quarter 2024 from the Company’s SSAT joint venture investment was $9.5 million, or
$13.6 million lower than the income of $4.1 million in fourth quarter 2023. The decrease was due to a $18.4 million
impairment charge related to the write-down of a terminal operating lease asset, partially offset by higher year-over-year
lift volume. On an after-tax basis, the impairment charge impacted fourth quarter 2024 net income and diluted EPS by
$14.0 million and $0.42 per share, respectively. For 2025, the Company expects the contribution from SSAT to
approximate the level achieved in 2024, without taking into account the $18.4 million impairment charge in the fourth
quarter 2024.
Based on the outlook trends noted above, the Company expects Ocean Transportation operating income for the first
quarter 2025 to be meaningfully higher than the $27.6 million achieved in the first quarter 2024. For full year 2025, the
Company expects Ocean Transportation operating income to be largely driven by the timing of trade flow normalization
in the Red Sea, other geopolitical factors, supply chain activity and the trajectory of the U.S. economy. Assuming trade
conditions in the Red Sea normalize by the middle of the year and there are no significant changes from today in the
other factors referenced above, the Company expects full year 2025 Ocean Transportation operating income to be
moderately lower than the $500.9 million achieved in 2024. However, if trade conditions in the Red Sea remain
disrupted through year end and there are no significant changes from today in the other factors noted above, the
Company expects full year 2025 Ocean Transportation operating income to approach the level achieved in 2024.
Logistics: In the fourth quarter 2024, operating income for the Company’s Logistics segment was $10.1 million, or
$1.2 million higher compared to the level achieved in the fourth quarter 2023. The increase was primarily due to a
higher contribution from supply chain management. For 2025, the Company expects challenging business conditions for
transportation brokerage for most of the year and a lower contribution from supply chain management, which the
Company expects to lead to modestly lower operating income compared to the level achieved in 2024. For the first
quarter 2025, the Company expects Logistics operating income to be modestly lower than the $9.3 million achieved in
the first quarter 2024.
32
Consolidated Operating Income: For the first quarter 2025, the Company expects consolidated operating income to be
meaningfully higher than the $36.9 million achieved in the first quarter 2024. For full year 2025, the Company expects
consolidated operating income to be largely driven by the timing of trade flow normalization in the Red Sea, other
geopolitical factors, supply chain activity and the trajectory of the U.S. economy. Assuming trade conditions in the Red
Sea normalize by the end of the first half of the year and there are no significant changes from today in the other factors
referenced above, the Company expects full year 2025 consolidated operating income to be moderately lower than the
$551.3 million achieved in 2024. However, if trade conditions in the Red Sea remain disrupted through year end and
there are no significant changes from today in the other factors noted above, the Company expects full year 2025
consolidated operating income to approach the level achieved in 2024.
Depreciation and Amortization: For full year 2025, the Company expects depreciation and amortization expense to be
approximately $200 million, inclusive of dry-docking amortization of approximately $26 million.
Interest Income: The Company expects interest income for the full year 2025 to be approximately $31 million.
Interest Expense: The Company expects interest expense for the full year 2025 to be approximately $7 million.
Other Income (Expense): The Company expects full year 2025 other income (expense) to be approximately $9 million
in income, which is attributable to the amortization of certain components of net periodic benefit costs or gains related to
the Company’s pension and post-retirement plans.
Income Taxes: In the fourth quarter 2024, the Company’s effective tax rate was 19.1 percent. For the full year 2025, the
Company expects its effective tax rate to be approximately 22.0 percent.
Capital and Vessel Dry-docking Expenditures: For the full year 2024, the Company made capital expenditure payments
excluding new vessel construction expenditures of $214.5 million, new vessel construction expenditures (including
capitalized interest and owner’s items) of $95.6 million, and dry-docking payments of $30.2 million. For the full year
2025, the Company expects to make other capital expenditure payments, including maintenance capital expenditures, of
approximately $120 to $140 million, new vessel construction expenditures (including capitalized interest and owner’s
items) of approximately $305 million, and dry-docking payments of approximately $40 million.
CONSOLIDATED RESULTS OF OPERATIONS
The following analysis of the financial results of operations of Matson for the years ended December 31, 2024 and 2023
should be read in conjunction with the Consolidated Financial Statements in Item 8 of Part II below.
Consolidated Results: 2024 compared with 2023:
Years Ended December 31,
(Dollars in millions, except per share amounts)
2024
2023
Change
Operating revenue
$ 3,421.8 $ 3,094.6 $ 327.2 10.6 %
Operating costs and expenses
(2,870.5)
(2,751.8)
(118.7)
4.3 %
Operating income
551.3
342.8
208.5
60.8 %
Interest income
48.3
36.0
12.3
34.2 %
Interest expense
(7.5)
(12.2)
4.7 (38.5)%
Other income (expense), net
7.3
6.4
0.9 14.1 %
Income before taxes
599.4
373.0
226.4 60.7 %
Income taxes
(123.0)
(75.9)
(47.1) 62.1 %
Net income
$
476.4 $
297.1
$ 179.3 60.4 %
Basic earnings per share
$
14.14 $
8.42
$ 5.72 67.9 %
Diluted earnings per share
$
13.93 $
8.32
$ 5.61 67.4 %
33
Fiscal Year: Fiscal years ended December 31, 2024 and 2023 include 52 weeks.
Consolidated Operating Revenue for the year ended December 31, 2024 increased $327.2 million, or 10.6 percent,
compared to the prior year. The increase was due to an increase in Ocean Transportation revenue of $332.7 million
which was partially offset by a decrease in Logistics revenue of $5.5 million.
Operating Costs and Expenses for the year ended December 31, 2024 increased $118.7 million, or 4.3 percent,
compared to the prior year. The increase was due to an increase in Ocean Transportation operating costs and expenses
of $126.6 million which was partially offset by a decrease in Logistics operating costs and expenses of $7.9 million.
Operating Income for the year ended December 31, 2024 increased $208.5 million, or 60.8 percent, compared to the
prior year. The increase was due to an increase in Ocean Transportation operating income of $206.1 million and an
increase in Logistics operating income of $2.4 million.
The reasons for changes in operating revenue, operating costs and expenses, and operating income are described below,
by business segment, in “Analysis of Operating Revenue and Income by Segment.”
Interest Income was $48.3 million for the year ended December 31, 2024, compared to $36.0 million in the prior year.
The increase in interest income was due to interest of $10.2 million earned on a federal income tax refund received
during the year ended December 31, 2024. The increase in interest income was also due to increased amounts of cash
and cash equivalent accounts, and cash on deposit within the Capital Construction Fund that were invested in interest
bearing accounts during the year ended December 31, 2024, compared to the prior year.
Interest Expense was $7.5 million for the year ended December 31, 2024, compared to $12.2 million in the prior year.
The decrease in interest expense was due to lower outstanding debt and a higher offset of capitalized interest related to
the construction of new vessels during the year ended December 31, 2024, compared to the prior year.
Other Income (Expense), net was $7.3 million for the year ended December 31, 2024, compared to $6.4 million in the
prior year, and relates to the amortization of certain components of net periodic benefit costs or gains related to the
Company’s pension and post-retirement plans. The increase in other income (expense) was due to favorable adjustments
reflected in the Company’s pension and post-retirement plan liabilities during the year ended December 31, 2024,
compared to the prior year.
Income Taxes for the year ended December 31, 2024 were $123.0 million, or 20.5 percent of income before income
taxes, compared to $75.9 million, or 20.3 percent of income before income taxes in the prior year. The 2023 income tax
rate benefited from certain discrete tax adjustments that lowered the effective tax rate in the prior year.
Net Income during the year ended December 31, 2024 increased $179.3 million, or 60.4 percent, to $476.4 million,
compared to the prior year.
ANALYSIS OF OPERATING REVENUE AND INCOME BY SEGMENT
The following analysis of operating revenue and income by segment for the years ended December 31, 2024 and 2023
should be read in conjunction with the Company’s reportable segments information included in Note 3 to the
Consolidated Financial Statements in Item 8 of Part II.
34
Ocean Transportation: 2024 compared with 2023:
Years Ended December 31,
(Dollars in millions)
2024
2023
Change
Ocean Transportation revenue
$ 2,809.7 $ 2,477.0 $ 332.7 13.4 %
Operating costs and expenses
(2,308.8) (2,182.2) (126.6)
5.8 %
Operating income
$
500.9 $
294.8 $ 206.1
69.9 %
Operating income margin
17.8 %
11.9 %
Volume (Forty-foot equivalent units (FEU), except for automobiles) (1)
Hawaii containers
140,700 144,000
(3,300)
(2.3)%
Hawaii automobiles
30,400
39,400
(9,000) (22.8)%
Alaska containers
80,500
80,000
500
0.6 %
China containers
144,100 140,700
3,400
2.4 %
Guam containers
18,800
20,100
(1,300)
(6.5)%
Other containers (2)
17,000
17,500
(500)
(2.9)%
(1)
Approximate volume included for the period are based on the voyage departure date, but revenue and operating income are adjusted to reflect the
percentage of revenue and operating income earned during the reporting period for voyages in transit at the end of each reporting period.
(2)
Includes containers from services in various islands in Micronesia and the South Pacific, and Okinawa, Japan.
Ocean Transportation revenue increased $332.7 million, or 13.4 percent, during the year ended December 31, 2024,
compared with the year ended December 31, 2023. The increase was primarily due to significantly higher freight rates
in China, higher freight rates in the domestic tradelanes, and higher volume in China, partially offset by lower domestic
tradelane volume.
On a year-over-year FEU basis, Hawaii container volume decreased 2.3 percent primarily due to lower general demand;
Alaska volume increased 0.6 percent due to higher general demand, partially offset by one less northbound sailing;
China volume increased 2.4 percent due to stronger seasonal volume in the fourth quarter 2024 and one additional
sailing; Guam volume decreased 6.5 percent primarily due to lower general demand; and Other containers volume
decreased 2.9 percent.
Ocean Transportation operating income increased $206.1 million, or 69.9 percent, during the year ended December 31,
2024, compared with the year ended December 31, 2023. The increase was primarily due to significantly higher freight
rates in China, higher freight rates in the domestic tradelanes, and higher volume in China, partially offset by higher
operating costs and general and administrative expenses.
The Company’s SSAT terminal joint venture investment incurred a loss of $1.0 million during the year ended
December 31, 2024, compared to income of $2.2 million during the year ended December 31, 2023. The decrease was
due to an impairment charge related to the write-down of a terminal operating lease asset in the fourth quarter 2024 of
$18.4 million, partially offset by higher lift volume.
Logistics: 2024 compared with 2023:
Years Ended December 31,
(Dollars in millions)
2024
2023
Change
Logistics revenue
$ 612.1 $ 617.6 $ (5.5) (0.9)%
Operating costs and expenses
(561.7) (569.6)
7.9
(1.4)%
Operating income
$ 50.4 $ 48.0 $ 2.4
5.0 %
Operating income margin
8.2 %
7.8 %
Logistics revenue decreased $5.5 million, or 0.9 percent, during the year ended December 31, 2024, compared with the
year ended December 31, 2023. The decrease was primarily due to lower revenue in transportation brokerage, partially
offset by higher revenue in supply chain management.
Logistics operating income increased $2.4 million, or 5.0 percent, during the year ended December 31, 2024, compared
with the year ended December 31, 2023. The increase was primarily due to a higher contribution from supply chain
management.
35
LIQUIDITY AND CAPITAL RESOURCES
The Company’s primary sources of liquidity are its cash flows generated from operating activities and its debt. Sources
of liquidity available to the Company as of December 31, 2024 compared to December 31, 2023, were as follows:
Cash and Cash Equivalents, Restricted Cash and Accounts Receivable: Cash and cash equivalents, restricted cash and
accounts receivable, net as of December 31, 2024 and 2023 were as follows:
As of December 31,
(In millions)
2024
2023
Change
Cash and cash equivalents
$ 266.8
$ 134.0 $ 132.8
Restricted cash
$
—
$
2.3 $ (2.3)
Accounts receivable, net (1)
$ 268.9
$ 279.4 $ (10.5)
CCF - cash and cash equivalents, and investments account
$ 642.6
$ 599.4 $ 43.2
(1)
Eligible accounts receivable of $178.1 million and $218.1 million at December 31, 2024 and 2023, respectively, were assigned to the CCF. For
additional information on the CCF, see Note 7 to the Consolidated Financial Statements.
Changes in the Company’s cash and cash equivalents and restricted cash for the years ended December 31, 2024, 2023
and 2022 were as follows:
As of December 31,
Change
(In millions)
2024
2023
2022
2024-2023 2023-2022
Net cash provided by operating activities (1)
$ 767.8 $ 510.5 $ 1,271.9 $ 257.3 $ (761.4)
Net cash used in investing activities (2)
(336.1) (338.2) (729.3)
2.1 391.1
Net cash used in financing activities (3)
(301.2) (289.7) (576.6) (11.5) 286.9
Net increase (decrease) in cash, cash equivalents and restricted cash
130.5 (117.4)
(34.0) 247.9 (83.4)
Cash and cash equivalents, and restricted cash, beginning of the period
136.3 253.7 287.7 (117.4) (34.0)
Cash and cash equivalents, and restricted cash, end of the period
$ 266.8 $ 136.3 $ 253.7 $ 130.5 $ (117.4)
(1) Changes in Net Cash Provided by Operating Activities: Changes in net cash provided by operating activities for the
years ended December 31, 2024, 2023 and 2022 were as follows:
Change
(In millions)
2024-2023
2023-2022
Net income
$ 179.3
$
(766.8)
Non-cash depreciation and amortization
10.9
3.0
Deferred income taxes
1.3
(70.6)
Other non-cash related changes, net
(10.0)
5.0
Income and distribution from SSAT, net
17.2
33.6
Accounts receivable, net
20.7
(85.5)
Prepaid expenses and other assets
61.3
78.7
Accounts payable, accruals and other liabilities
(16.5)
42.6
Operating lease assets and liabilities, net
5.3
9.3
Non-cash amortization of operating lease right of use assets
(8.3)
(11.0)
Deferred dry-docking payments
(6.1)
1.6
Non-cash deferred dry-docking amortization
1.9
0.4
Other long-term liabilities
0.3
(1.7)
Total
$ 257.3
$
(761.4)
Loss from SSAT was $1.0 million for the year ended December 31, 2024, compared to income from SSAT of
$2.2 million in the prior year. Excluding the Company’s portion of an impairment charge of $18.4 million that was
included in the loss from SSAT during the year ended December 31, 2024 related to the write-down of a terminal
operating lease asset, the increase in income from SSAT was due to higher operating profits generated by SSAT during
the year ended December 31, 2024 due to increased lift volume. No impairment charge was recorded by SSAT during
the year ended December 31, 2023. Cash dividends received from SSAT was $14.0 million for the year ended
December 31, 2024, compared to no cash distributions received in the prior year. Cash distributions from SSAT are
dependent on the level of cash available for distribution after consideration of SSAT’s operational and capital needs.
Changes in accounts receivable were primarily due to the timing of collections associated with those receivables.
Changes in prepaid expenses and other assets were primarily due to a decrease in prepaid income tax receivables at
36
December 31, 2024 due to a refund of $118.6 million related to the Company’s 2021 federal tax return that was received
during the year ended December 31, 2024, offset by higher prepaid fuel. Changes in accounts payable, accruals and
other liabilities were primarily due to the timing of payments associated with those liabilities. Changes in operating
lease liabilities were primarily due to new operating leases entered into during the year ended December 31, 2024, offset
by operating leases that expired during the year ended December 31, 2024. Deferred dry-docking payments were
$30.2 million for the year ended December 31, 2024, compared to $24.1 million in the prior year. The increase in
deferred dry-docking payments was due to an increase in vessel dry-dock related activities during the year ended
December 31, 2024. Changes in other long-term liabilities primarily related to payments of pension and post-retirement
liabilities, and multi-employer liabilities.
(2) Changes in Net Cash Used in Investing Activities: Changes in net cash used in investing activities for the years
ended December 31, 2024, 2023 and 2022 were as follows:
Change
(In millions)
2024-2023
2023-2022
Cash deposits and interest into the CCF
$
7.8 $ 454.3
Withdrawals from CCF
39.7
(14.7)
Capitalized vessel construction expenditures
(42.7)
9.5
Capital expenditures (excluding vessel construction expenditures)
(19.0)
(48.6)
Proceeds from disposal of property and equipment, net, and other
4.7
—
Payments for asset acquisitions
11.6
(9.4)
Total
$
2.1 $ 391.1
During the year ended December 31, 2024, cash and interest deposited into the CCF were $50.0 million and
$18.8 million, compared to $100.0 million and $31.1 million in the prior year, respectively. During the year ended
December 31, 2024, cash withdrawals from the CCF were $89.6 million, compared to $49.9 million in the prior year,
related to vessel construction milestone payments. During the year ended December 31, 2024, the Company
repurchased $53.8 million of assigned accounts receivable. No assigned accounts receivable were repurchased during
the year ended December 31, 2023. Capitalized vessel construction expenditures were $95.6 million for the year ended
December 31, 2024, compared to $52.9 million in the prior year. The increase in capitalized vessel construction
expenditures was due to the timing of milestone payments related to the Company’s fleet renewal program. Capital
expenditures (excluding vessel construction expenditures) were $214.5 million for the year ended December 31, 2024,
compared to $195.5 million for the prior year. Capital expenditures (excluding vessel construction expenditures) during
the year ended December 31, 2024 included costs associated with LNG installations, the reengining of an existing
vessel, and the purchase of additional containers, chassis and other terminal equipment to support the Company’s
operating activities. During the year ended December 31, 2024, the Company paid $0.8 million related to asset
acquisitions, compared to $12.4 million in the prior year.
(3) Changes in Net Cash Used in Financing Activities: Changes in net cash used in financing activities for the years
ended December 31, 2024, 2023 and 2022 were as follows:
Change
(In millions)
2024-2023
2023-2022
Repurchase of Matson common stock
$ (43.9) $
241.8
Repayments of fixed interest debt
37.2
34.6
Shares withheld for taxes related to settlement of restricted stock units
(5.0)
7.5
Dividends paid
0.2
3.0
Total
$ (11.5) $
286.9
The Company paid $199.1 million to repurchase common stock during the year ended December 31, 2024, compared to
$155.2 million in the prior year. The Company did not issue any new fixed interest debt during the years ended
December 31, 2024 and 2023. The Company paid $39.7 million of scheduled fixed interest debt principal payments
during the year ended December 31, 2024, compared to $76.9 million of prepaid and scheduled fixed interest debt
principal payments during the prior year. The value of shares withheld by the Company for taxes related to the
settlement of restricted stock units was $17.6 million for the year ended December 31, 2024, compared to $12.6 million
in the prior year.
37
Capital Construction Fund: The Company utilizes its CCF to fund milestone payments for the construction of new
vessels. The Company’s CCF is described in Note 7 to the Consolidated Financial Statements. Cash on deposit and
investments in the CCF and assigned accounts receivable as of December 31, 2024 and 2023 were as follows:
As of December 31,
(In millions)
2024
2023
Capital Construction Fund:
Cash and cash equivalents, and investments account
$
642.6
$
599.4
Assigned accounts receivables
$
178.1
$
218.1
Cash on deposit in the CCF is invested in a U.S. Treasury obligations fund with daily liquidity. At December 31, 2024,
securities held within the U.S. Treasury obligations fund had a weighted average life of 96 days. The Company’s CCF
investments are in fixed-rate U.S. Treasury obligations with various maturity dates of up to 3 years. Cash on deposit and
investments in the CCF are classified as a long-term asset in the Company’s Consolidated Balance Sheets, as the
Company intends to use qualified cash withdrawals from the CCF to fund long-term investments in the construction of
new vessels.
Assigned accounts receivable in the CCF are classified as part of accounts receivable in the Consolidated Balance Sheets
due to the nature of the assignment.
Debt: The Company utilizes a mix of fixed and variable debt for liquidity and to fund the Company’s operations. Total
debt as of December 31, 2024 and 2023 is as follows:
As of December 31,
(In millions)
2024
2023
Change
Variable interest debt
$
—
$
— $
—
Fixed interest debt
400.9
440.6 (39.7)
Total Debt (excluding deferred loan fees)
$ 400.9
$ 440.6 $ (39.7)
Total debt decreased by $39.7 million during the year ended December 31, 2024 compared to the prior year. The
decrease in fixed interest debt was due to the scheduled debt repayments made during the year ended December 31,
2024.
As of December 31, 2024, the Company had $643.9 million of unused capacity under the revolving credit facility, with a
maturity date of March 31, 2026. The Company’s debt is described in Note 8 to the Consolidated Financial Statements
in Item 8 of Part II.
Working Capital: The Company had a working capital surplus of $49.2 million at December 31, 2024, compared to a
working capital surplus of $40.0 million at December 31, 2023. Working capital is primarily impacted by the amount of
net cash provided by operating activities, the amount of capital expenditures, the amount and timing of collections
associated with accounts receivable, prepaid expenses and other assets, and the amount and timing of payments
associated with accounts payable, accruals, income taxes, debt and other liabilities. The increase in the Company’s
working capital surplus during the year ended December 31, 2024 was due to the increase in cash provided by operating
activities offset by higher capital expenditures during the year.
Capital Expenditures: The Company expects to make the following capital expenditures during the years ending
December 31, 2025, 2026 and 2027:
(In millions)
2025
2026
2027
New vessel construction milestone payments and related costs
$305
$350
$220
Maintenance and other capital expenditures
120 - 140
~100
~100
Total Estimated Capital Expenditures
$425 - $445
~$450
~$320
New vessel construction milestone payments and related costs are for the Company’s construction of three new vessels
at a cost of approximately $1.0 billion (excluding owners’ items and change orders) with expected delivery dates during
the first quarter 2027, the third quarter 2027 and the second quarter 2028. Future milestone payments are expected to be
financed with cash currently on deposit in the Company’s CCF, cash and cash equivalents on the Consolidated Balance
Sheets, cash flows generated from future operations, borrowings available under the Company’s unsecured revolving
credit facility or additional debt financings.
38
Maintenance and other capital expenditures include amounts that the Company expects to spend on various capital
projects, including capital expenditures related to the second and third phase of its program to modernize and renovate
its terminal facility at Sand Island, Honolulu, Hawaii, repurchases of leased equipment, vessel capital maintenance and
annual equipment purchases to support the Company’s operations. The Company expects to fund these capital
expenditures with cash and cash equivalents on the Consolidated Balance Sheets and through cash flows generated from
future operating activities.
Repurchase of Shares: During the year ended December 31, 2024, the Company repurchased approximately 1.6 million
shares for a total cost of $201.0 million. The remaining number of shares that may be repurchased under the Company’s
stock repurchase program was 830,527 shares at December 31, 2024. On February 27, 2025, the Company’s Board
approved an additional 3.0 million shares of common stock to be added to the Company’s existing share repurchase
program and extended the program’s expiration date to December 31, 2027.
COMMITMENTS, CONTINGENCIES AND OFF-BALANCE SHEET ARRANGEMENTS
Commitments and Contingencies: A description of other commitments and contingencies is set forth in Note 9, Note 11
and Note 17 to the Consolidated Financial Statements in Item 8 of Part II below, and is incorporated herein by reference.
Off-balance Sheet Arrangements: The Company is not currently party to any off-balance sheet arrangements that have,
or are reasonably likely to have, a current or future material effect on the Company’s financial condition, results of
operations or cash flows.
CRITICAL ACCOUNTING ESTIMATES
The Company’s significant accounting policies are described in Note 2 to the Consolidated Financial Statements in
Item 8 of Part II below. The preparation of Consolidated Financial Statements in conformity with accounting principles
generally accepted in the United States of America, upon which the Company’s Management Discussion and Analysis of
Financial Condition and Results of Operations is based, requires that management exercise judgment in making
accounting estimates about future events that may affect the amounts reported in the Consolidated Financial Statements
and accompanying notes. Future events and their effects cannot be determined with certainty and actual results will,
inevitably, differ from those accounting estimates. These differences could be material.
The Company considers an accounting estimate to be critical if (i)(a) the accounting estimate requires the Company to
make assumptions that are difficult or subjective about matters that were highly uncertain at the time that the accounting
estimate was made, (b) changes in the estimate are reasonably likely to occur in periods after the period in which the
estimate was made, or (c) the Company could have used different estimates; and (ii) changes in those accounting
estimates would have had a material impact on the financial condition or results of operations of the Company. The
critical accounting policies and estimates considered in the preparation of the Company’s Consolidated Financial
Statements are described below. Management has discussed the development and selection of these critical accounting
estimates with the Audit Committee of our Board.
Long-Lived Assets, Intangible Assets and Goodwill: The Company evaluates its long-lived assets, intangible assets
and goodwill 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.
Long-lived Assets and Finite-lived Intangible Assets: Long-lived assets and finite-lived intangible assets are grouped at
the lowest level for which identifiable cash flows are available. In evaluating for impairment, the estimated future
undiscounted cash flows generated by each of these asset groups are compared with the carrying value recorded for each
asset group to determine if its carrying value is recoverable. If this review determines that the amount recorded will not
be recovered, the amount recorded for the asset group is reduced to its estimated fair value. These asset impairment
analyses are highly subjective because they require management to make assumptions and apply considerable judgments
to, among other things, estimates of the timing and amount of future cash flows, expected useful lives of the assets,
potential impact of future events, including changes in economic conditions and operating performance, and future costs
39
of maintenance and improvements of the assets. If management uses different assumptions or if different conditions
occur in future periods, the Company’s financial condition or its future operating results could be materially impacted.
The Company has evaluated its long-lived assets and finite-lived intangible assets for impairment and determined that
there was no impairment for the years ended December 31, 2024, 2023, and 2022.
Indefinite-life Intangible Assets and Goodwill: The Company’s intangible assets include goodwill and a trade name, and
are grouped at the lowest level reporting unit for which identifiable cash flows are available. In estimating the fair value
of a reporting unit, the Company uses a combination of a discounted cash flow model and fair value based on market
multiples of earnings before interest, income taxes, depreciation and amortization (“EBITDA”). The discounted cash
flow approach requires the Company to use a number of assumptions, including market factors specific to the business,
the amount and timing of estimated future cash flows generated by the business over an extended period of time, long-
term growth rates for the business, and a discount rate that considers the risks related to the amount and timing of the
cash flows. Although the assumptions used by the Company in its discounted cash flow model are consistent with the
assumptions the Company used to generate its internal strategic plans and forecasts, significant judgment is required to
estimate the amount and timing of future cash flows from the reporting unit and the risk of achieving those cash flows.
When using market multiples of EBITDA, the Company makes judgments about the comparability of multiples in closed
and proposed transactions. Accordingly, changes in assumptions and estimates, including, but not limited to, changes
driven by external factors, such as industry and economic trends, and those driven by internal factors, such as changes in
the Company’s business strategy and its internal forecasts, could have a material effect on the Company’s financial
condition or its future operating results. The Company has evaluated its indefinite-life intangible assets and goodwill for
impairment and determined that there was no impairment for the years ended December 31, 2024, 2023, and 2022.
Insurance Related Liabilities: The Company purchases insurance with deductibles or self-insured retentions to
mitigate significant risks that it is exposed to. Such insurance includes, but is not limited to, employee health, workers’
compensation, marine liability, cybersecurity, auto liability and physical damage to property and equipment. For certain
risks, the Company elects to not purchase insurance because of the excessive cost of such insurance, the perceived
remoteness of the risk or insurance coverage is not commercially available. The Company retains the risk of loss for
insurance deductibles and self-insured retentions, for amounts that exceed the limits of the Company’s insurance
policies, and for other risks not covered by insurance.
When estimating its reserves for retained risks and related liabilities, the Company considers a number of factors,
including historical claims experience, demographic factors, current trends, and analyses provided by independent third
parties. Periodically, management reviews its assumptions and estimates used to determine the adequacy of the
Company’s reserves for retained risks and other related liabilities. The Company’s retained risks and other related
liabilities contain uncertainties because management is required to apply judgment and make long-term assumptions to
estimate the ultimate cost to settle reported claims, and of claims incurred but not reported, as of the balance sheet date.
Insurance related liabilities were $52.8 million and $41.3 million at December 31, 2024 and 2023, respectively. The
Company’s estimate of insurance related liabilities could change if management uses different assumptions or if
different conditions occur in future periods, however the Company does not expect any such change would have a
material impact on the Company’s financial condition and results of operations.
Pension and Post-Retirement Plans: The estimation of the Company’s pension and post-retirement benefit expenses
and liabilities requires the Company to make various assumptions. These assumptions include factors such as discount
rates, expected long-term rate of return on pension plan assets, salary growth, health care cost trend rates, inflation,
retirement rates, mortality rates and expected contributions. Actual results that differ from the assumptions made could
materially affect the Company’s financial condition or its future operating results. The effects of changing assumptions
are included in unamortized net gains and losses, which directly affect accumulated other comprehensive income (loss).
Additionally, these unamortized gains and losses are amortized and reclassified to income (loss) over future periods.
Additional information about the Company’s pension and post-retirement plans and assumptions used is included in
Note 11 to the Consolidated Financial Statements in Item 8 of Part II below.
Income Taxes: The Company’s income tax expense requires the Company to make various estimates and judgments.
These estimates and judgments are applied in the calculation of taxable income, tax credits, tax benefits, CCF related tax
deductions, foreign-derived intangible income and other tax deductions, and in the calculation of certain deferred tax
assets and liabilities, which arise from differences in the timing of recognition of revenue, costs and expenses for tax
purposes. The calculation of deferred tax assets and liabilities may be impacted by various factors including but not
limited to changes in tax rates; changes in tax laws, regulations, rulings and interpretations of existing tax laws; and
40
changes in the evaluation of the Company’s ability to realize deferred tax assets including operating loss and tax credit
carryforwards. Significant changes to these estimates may result in an increase or decrease to the Company’s income
taxes in a subsequent period.
Additional information about the Company’s income taxes is included in Note 10 to the Consolidated Financial
Statements in Item 8 of Part II below.
OTHER MATTERS
New Accounting Pronouncements: See Note 2 to the Consolidated Financial Statements in Item 8 of Part II below for
additional information on new accounting pronouncements.
ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
Debt and Interest Rate Risks: The Company is exposed to changes in interest rates, primarily as a result of its borrowing
and investing activities used to maintain liquidity and to fund business operations, including borrowings under its
revolving credit facility, private placement term loans and Title XI debt. In order to manage its exposure to changes in
interest rates, the Company utilizes a balanced mix of both fixed-rate and variable-rate debt with various maturity dates.
The nature and amount of the Company’s outstanding debt are expected to fluctuate as a result of future business
requirements, market conditions and other factors.
Other than in certain events of default, the Company is not obligated to prepay its variable and fixed rate debt prior to
maturity. For fixed rate debt, changes in market interest rates would not affect the Company’s financial condition or
results of operations.
Additional information about the Company’s debt is included in Note 8 to the Consolidated Financial Statements in
Item 8 of Part II below.
Investment Risks: The Company invests excess cash in short-term money market funds that purchase government
securities or corporate debt securities, or in other deposit products. These money market funds and deposits maintain a
weighted average maturity of less than 90 days. A one percent change in interest rates is not expected to have a material
impact on the fair value of these investments or on the Company’s results of operations.
The Company may invest funds on deposit in the CCF in money market funds, U.S. Treasury Obligation Funds or other
eligible credit-based investments for maturities of up to three years. A one percent change in interest rates is not
expected to have a material impact on the fair value of these investments or on the Company’s results of operations.
Foreign Currency Risks: The Company has no material exposure to foreign currency risks, although it is indirectly
affected by changes in currency rates to the extent that changes in rates affect tourism in Hawaii, Guam, Alaska and
other locations. Transactions related to the Company’s China and Japan services are primarily denominated in U.S.
dollars, and therefore, a one percent change in the Chinese Yuan or Japanese Yen exchange rate would not have a
material effect on the Company’s results of operations. Transactions related to the Company’s South Pacific service are
primarily denominated in New Zealand dollars. A one percent change in the New Zealand dollar exchange rate is not
expected to have a material effect on the Company’s results of operations.
41
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
Page
Management’s Annual Report on Internal Control Over Financial Reporting . . . . . . . . . . . . . . . . . . . . . . . . . . .
42
Report of Independent Registered Public Accounting Firm (PCAOB ID No. 34) . . . . . . . . . . . . . . . . . . . . . . . .
43
Consolidated Statements of Income and Comprehensive Income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
45
Consolidated Balance Sheets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
46
Consolidated Statements of Cash Flows . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
47
Consolidated Statements of Shareholders’ Equity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
48
Notes to Consolidated Financial Statements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
49
1.
Description of the Business . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
49
2.
Significant Accounting Policies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
49
3.
Reportable Segments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
55
4.
Investment in SSAT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
56
5.
Property and Equipment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
58
6.
Goodwill and Intangible Assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
58
7.
Capital Construction Fund . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
59
8.
Debt . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
61
9.
Leases . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
63
10.
Income Taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
64
11.
Pension and Post-Retirement Plans . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
66
12.
Multi-Employer Withdrawal Liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
73
13.
Accumulated Other Comprehensive Income (Loss) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
73
14.
Earnings Per Share . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
74
15.
Share-Based Awards . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
74
16.
Fair Value of Financial Instruments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
75
17.
Commitments and Contingencies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
76
42
MANAGEMENT’S ANNUAL REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING
The management of Matson, Inc. and subsidiaries (the “Company”) has the responsibility for establishing and
maintaining adequate internal control over financial reporting. Internal control over financial reporting is defined in
Rules 13a-15(f) and 15d-15(f) under the Securities Exchange Act of 1934, as a process designed by, or under the
supervision of, the Company’s principal executive and principal financial officers and effected by the Company’s Board
of Directors, management and other personnel to provide reasonable assurance regarding the reliability of financial
reporting and the preparation of financial statements for external purposes in accordance with accounting principles
generally accepted in the United States of America and includes those policies and procedures that:
Pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and
dispositions of assets of the company;
Provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial
statements in accordance with accounting principles generally accepted in the United States of America, and that
receipts and expenditures of the company are being made only in accordance with authorizations of management
and directors of the company; and
Provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or
disposition of the company’s assets that could have a material effect on the financial statements.
Because of its inherent limitations, internal control over financial reporting only provides reasonable assurance with
respect to financial statement presentation and preparation. Projections of any evaluation of effectiveness to future
periods are subject to the risks that controls may become inadequate because of changes in conditions, or that the degree
of compliance with the policies or procedures may deteriorate.
Management assessed the effectiveness of the Company’s internal control over financial reporting as of December 31,
2024. In making this assessment, management used the criteria set forth by the Committee of Sponsoring Organizations
of the Treadway Commission (COSO) in Internal Control-Integrated Framework (2013). Based on its assessment,
management believes that, as of December 31, 2024, the Company’s internal control over financial reporting is effective.
The Company’s independent registered public accounting firm, Deloitte & Touche LLP, has issued an attestation report
on the Company’s internal control over financial reporting.
/s/ Matthew J. Cox
/s/ Joel M. Wine
Matthew J. Cox
Joel M. Wine
Chairman and Chief Executive Officer
Executive Vice President and Chief Financial Officer
February 28, 2025
February 28, 2025
43
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
To the Board of Directors and the shareholders of Matson, Inc.
Opinions on the Financial Statements and Internal Control over Financial Reporting
We have audited the accompanying consolidated balance sheets of Matson, Inc. and subsidiaries (the “Company”) as of
December 31, 2024 and 2023, the related consolidated statements of income and comprehensive income, shareholders’ equity,
and cash flows, for each of the three years in the period ended December 31, 2024, and the related notes (collectively referred
to as the “financial statements”). We also have audited the Company’s internal control over financial reporting as of
December 31, 2024, based on criteria established in Internal Control — Integrated Framework (2013) issued by the Committee
of Sponsoring Organizations of the Treadway Commission (COSO).
In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of the
Company as of December 31, 2024 and 2023, and the results of its operations and its cash flows for each of the three years in
the period ended December 31, 2024, in conformity with accounting principles generally accepted in the United States of
America. Also, in our opinion, the Company maintained, in all material respects, effective internal control over financial
reporting as of December 31, 2024, based on criteria established in Internal Control — Integrated Framework (2013) issued by
COSO.
Basis for Opinions
The Company’s management is responsible for these financial statements, for maintaining effective internal control over
financial reporting, and for its assessment of the effectiveness of internal control over financial reporting, included in the
accompanying Management’s Annual Report on Internal Control Over Financial Reporting. Our responsibility is to express an
opinion on these financial statements and an opinion on the Company’s internal control over financial reporting based on our
audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States)
(PCAOB) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws
and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform
the audits to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due
to error or fraud, and whether effective internal control over financial reporting was maintained in all material respects.
Our audits of the financial statements included performing procedures to assess the risks of material misstatement of the
financial statements, whether due to error or fraud, and performing procedures to respond to those risks. Such procedures
included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also
included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the
overall presentation of the financial statements. Our audit of internal control over financial reporting included obtaining an
understanding of internal control over financial reporting, assessing the risk that a material weakness exists, and testing and
evaluating the design and operating effectiveness of internal control based on the assessed risk. Our audits also included
performing such other procedures as we considered necessary in the circumstances. We believe that our audits provide a
reasonable basis for our opinions.
Definition and Limitations of Internal Control over Financial Reporting
A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the
reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally
accepted accounting principles. A company’s internal control over financial reporting includes those policies and procedures
that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and
dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to
permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and
expenditures of the company are being made only in accordance with authorizations of management and directors of the
company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or
disposition of the company’s assets that could have a material effect on the financial statements.
Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also,
projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate
because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.
Critical Audit Matter
The critical audit matter communicated below is a matter arising from the current-period audit of the financial statements that
was communicated or required to be communicated to the audit committee and that (1) relates to accounts or disclosures that
44
are material to the financial statements and (2) involved our especially challenging, subjective, or complex judgments. The
communication of critical audit matters does not alter in any way our opinion on the financial statements, taken as a whole, and
we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the
accounts or disclosures to which it relates.
Goodwill – Span Alaska Reporting Unit — Refer to Notes 2 and 6 to the financial statements
Critical Audit Matter Description
The Company’s evaluation of goodwill for impairment involves the comparison of the fair value of each reporting unit to its
carrying value. In estimating the fair value of a reporting unit, the Company uses a combination of a discounted cash flow
model and fair value based on market multiples of earnings before interest, taxes, depreciation and amortization (“EBITDA”).
The discounted cash flow approach requires the Company to make several business and valuation assumptions, including, but
not limited to, those related to the discount rate. Changes in assumptions and estimates could have a material effect on either
the fair value, the amount of any goodwill impairment charge, or both. The goodwill balance was $327.8 million as of
December 31, 2024, of which $78.6 million is allocated to the Span Alaska reporting unit in the Logistics reportable segment,
resulting from the acquisition of Span Intermediate, LLC (“Span Alaska”) in fiscal year 2016. The Company has evaluated its
goodwill for impairment as part of its annual assessment in fiscal year 2024 and determined that the fair value of the Span
Alaska reporting unit exceeded the carrying amount as of the date of the impairment review.
We identified goodwill related to Span Alaska as a critical audit matter because of the significant estimates and assumptions
management made to estimate the fair value of Span Alaska. Specifically, performing audit procedures to evaluate the
reasonableness of management’s estimates and assumptions related to the selection of the discount rate required a high degree
of auditor judgment and an increased extent of effort, including the need to involve our fair value specialists.
How the Critical Audit Matter Was Addressed in the Audit
Our audit procedures related to the selection of the discount rate for Span Alaska included the following, among others:
We tested the effectiveness of controls over management’s goodwill impairment evaluation, including those over the
selection of the discount rate.
With the assistance of our fair value specialists, we evaluated the reasonableness of the discount rate, including testing the
source information underlying the determination of the discount rate, testing the mathematical accuracy of the calculation,
and developing a range of independent estimates and comparing those to the discount rate selected by management.
/s/ Deloitte & Touche LLP
Honolulu, Hawaii
February 28, 2025
We have served as the Company’s auditor since at least 1976; however, an earlier year could not be reliably determined.
45
MATSON, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME AND COMPREHENSIVE INCOME
Years Ended December 31,
(In millions, except per share amounts)
2024
2023
2022
Operating Revenue:
Ocean Transportation
$ 2,809.7 $ 2,477.0 $ 3,544.6
Logistics
612.1
617.6
798.4
Total Operating Revenue
3,421.8 3,094.6 4,343.0
Costs and Expenses:
Operating costs
(2,565.9) (2,470.7) (2,811.5)
(Loss) Income from SSAT
(1.0)
2.2
83.1
General and administrative
(303.6) (283.3) (261.0)
Total Costs and Expenses
(2,870.5) (2,751.8) (2,989.4)
Operating Income
551.3
342.8 1,353.6
Interest income
48.3
36.0
8.2
Interest expense
(7.5)
(12.2)
(18.0)
Other income (expense), net
7.3
6.4
8.5
Income before Taxes
599.4
373.0 1,352.3
Income taxes
(123.0)
(75.9) (288.4)
Net Income
$
476.4 $
297.1 $ 1,063.9
Other Comprehensive Income (Loss), Net of Income Taxes:
Net Income
$
476.4 $
297.1 $ 1,063.9
Other Comprehensive Income (Loss):
Net change in pension and post-retirement liabilities
3.2
(2.5)
23.8
Other adjustments
(1.5)
1.2
0.2
Total Other Comprehensive Income (Loss), Net of Income Taxes
1.7
(1.3)
24.0
Comprehensive Income
$
478.1 $
295.8 $ 1,087.9
Basic Earnings Per Share
$
14.14 $
8.42 $
27.28
Diluted Earnings Per Share
$
13.93 $
8.32 $
27.07
Weighted Average Number of Shares Outstanding:
Basic
33.7
35.3
39.0
Diluted
34.2
35.7
39.3
See Notes to Consolidated Financial Statements.
46
MATSON, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
As of December 31,
(In millions)
2024
2023
ASSETS
Current Assets:
Cash and cash equivalents
$
266.8
$
134.0
Accounts receivable, net of allowance for credit losses of $9.8 million and
$9.9 million, respectively
268.9
279.4
Prepaid expenses and other assets
73.9
188.9
Total current assets
609.6
602.3
Long-term Assets:
Investment in SSAT
84.1
85.5
Property and equipment, net
2,260.9
2,089.9
Operating lease right of use assets
357.7
289.6
Goodwill
327.8
327.8
Intangible assets, net
159.4
176.4
Capital Construction Fund
642.6
599.4
Deferred dry-docking costs, net
73.7
57.3
Other long-term assets
79.6
66.4
Total long-term assets
3,985.8
3,692.3
Total Assets
$
4,595.4
$
4,294.6
LIABILITIES AND SHAREHOLDERS’ EQUITY
Current Liabilities:
Current portion of debt
$
39.7
$
39.7
Accounts payable and accruals
268.5
277.9
Operating lease liabilities
129.0
136.7
Other liabilities
123.2
108.0
Total current liabilities
560.4
562.3
Long-term Liabilities:
Long-term debt, net of deferred loan fees
350.8
389.3
Long-term operating lease liabilities
229.5
159.3
Deferred income taxes
693.4
669.3
Other long-term liabilities
109.3
113.7
Total long-term liabilities
1,383.0
1,331.6
Commitments and Contingencies (see Note 17)
Shareholders’ Equity:
Common stock - common stock without par value; authorized, 150 million
shares ($0.75 stated value per share): outstanding, 33.0 million shares in 2024
and 34.4 million shares in 2023
24.7
25.8
Additional paid in capital
296.7
293.4
Accumulated other comprehensive loss, net
(6.5)
(8.2)
Retained earnings
2,337.1
2,089.7
Total shareholders’ equity
2,652.0
2,400.7
Total Liabilities and Shareholders’ Equity
$
4,595.4
$
4,294.6
See Notes to Consolidated Financial Statements.
47
MATSON, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
Years Ended December 31,
(In millions)
2024
2023
2022
Cash Flows From Operating Activities:
Net income
$
476.4
$
297.1
$ 1,063.9
Reconciling adjustments:
Depreciation and amortization
153.1
142.2
139.2
Amortization of operating lease right of use assets
133.7
142.0
153.0
Deferred income taxes
20.9
19.6
90.2
(Gain) Loss on disposal of property and equipment
(2.3)
0.6
(1.5)
Share-based compensation expense
26.5
23.8
18.3
Loss (Income) from SSAT
1.0
(2.2)
(83.1)
Distributions from SSAT
14.0
—
47.3
Other
(10.3)
(0.5)
2.1
Changes in assets and liabilities:
Accounts receivable, net
9.8
(10.9)
74.6
Deferred dry-docking payments
(30.2)
(24.1)
(25.7)
Deferred dry-docking amortization
27.2
25.3
24.9
Prepaid expenses and other assets
94.8
33.5
(45.2)
Accounts payable, accruals and other liabilities
(5.6)
10.9
(31.7)
Operating lease assets and liabilities, net
(139.5)
(144.8)
(154.1)
Other long-term liabilities
(1.7)
(2.0)
(0.3)
Net cash provided by operating activities
767.8
510.5
1,271.9
Cash Flows From Investing Activities:
Capitalized vessel construction expenditures
(95.6)
(52.9)
(62.4)
Capital expenditures (excluding vessel construction expenditures)
(214.5)
(195.5)
(146.9)
Proceeds from disposal of property and equipment, net
5.9
1.2
1.2
Payments for asset acquisitions
(0.8)
(12.4)
(3.0)
Cash and interest deposits into Capital Construction Fund
(120.7)
(128.5)
(582.8)
Withdrawals from Capital Construction Fund
89.6
49.9
64.6
Net cash used in investing activities
(336.1)
(338.2)
(729.3)
Cash Flows From Financing Activities:
Repayments of debt
(39.7)
(76.9)
(111.5)
Dividends paid
(44.8)
(45.0)
(48.0)
Repurchase of Matson common stock
(199.1)
(155.2)
(397.0)
Tax withholding related to net share settlements of restricted stock units
(17.6)
(12.6)
(20.1)
Net cash used in financing activities
(301.2)
(289.7)
(576.6)
Net Increase (Decrease) in Cash, Cash Equivalents and Restricted Cash
130.5
(117.4)
(34.0)
Cash, Cash Equivalents and Restricted Cash, Beginning of the Year
136.3
253.7
287.7
Cash, Cash Equivalents and Restricted Cash, End of the Year
$
266.8
$
136.3
$
253.7
Reconciliation of Cash, Cash Equivalents, and Restricted Cash, at End of the Year:
Cash and Cash Equivalents
$
266.8
$
134.0
$
249.8
Restricted Cash
—
2.3
3.9
Total Cash, Cash Equivalents and Restricted Cash, End of the Year
$
266.8
$
136.3
$
253.7
Supplemental Cash Flow Information:
Interest paid, net of capitalized interest
$
5.9
$
11.1
$
16.2
Income tax paid, net of income tax refunds
$
(26.5)
$
7.5
$
215.2
Non-cash Information:
Capital expenditures included in accounts payable, accruals and other liabilities
$
7.9
$
10.8
$
5.5
Non-cash payments for intangible asset acquisitions
$
—
$
2.7
$
2.2
See Notes to Consolidated Financial Statements.
48
MATSON, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF SHAREHOLDERS’ EQUITY
FOR THE THREE YEARS ENDED DECEMBER 31, 2024
Accumulated
Common Stock Additional
Other
Stated
Paid In
Comprehensive Retained
(In millions, except per share amounts)
Shares Value Capital Income (Loss) Earnings
Total
Balance at December 31, 2021
41.0 $ 30.7 $ 314.1 $
(30.9) $ 1,353.5 $ 1,667.4
Net income
—
—
—
— 1,063.9 1,063.9
Other comprehensive income (loss), net of tax
—
—
—
24.0
—
24.0
Share-based compensation
—
—
18.3
—
—
18.3
Shares issued, net of shares withheld for employee taxes 0.3 0.2 (20.3)
—
—
(20.1)
Share repurchase
(5.0) (3.7) (21.7)
— (371.6) (397.0)
Equity interest in SSAT (see Note 4)
—
—
—
—
(11.6)
(11.6)
Dividends ($1.22 per share)
—
—
—
—
(48.0)
(48.0)
Balance at December 31, 2022
36.3 27.2 290.4
(6.9) 1,986.2 2,296.9
Net income
—
—
—
— 297.1 297.1
Other comprehensive income (loss), net of tax
—
—
—
(1.3)
—
(1.3)
Share-based compensation
—
—
23.8
—
—
23.8
Shares issued, net of shares withheld for employee taxes 0.2 0.2 (12.7)
—
(0.1)
(12.6)
Share repurchase
(2.1) (1.6)
(8.1)
— (148.5) (158.2)
Dividends ($1.26 per share)
—
—
—
—
(45.0)
(45.0)
Balance at December 31, 2023
34.4 25.8 293.4
(8.2) 2,089.7 2,400.7
Net income
—
—
—
— 476.4 476.4
Other comprehensive income (loss), net of tax
—
—
—
1.7
—
1.7
Share-based compensation
—
—
26.5
—
—
26.5
Shares issued, net of shares withheld for employee taxes 0.2 0.1 (17.7)
—
—
(17.6)
Share repurchase
(1.6) (1.2)
(5.5)
— (194.3) (201.0)
Equity interest in SSAT (see Note 4)
—
—
—
—
10.1
10.1
Dividends ($1.32 per share)
—
—
—
—
(44.8)
(44.8)
Balance at December 31, 2024
33.0 $ 24.7 $ 296.7 $
(6.5) $ 2,337.1 $ 2,652.0
See Notes to Consolidated Financial Statements.
49
MATSON, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
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 two segments, Ocean
Transportation and Logistics. For financial information on the Company’s reportable segments for the three years ended
December 31, 2024 (see Note 3).
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 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 in Alaska.
Matson has a 35 percent ownership interest in SSA Terminals, LLC (“SSAT”), a joint venture between Matson
Ventures, Inc., a wholly-owned subsidiary of MatNav, and SSA Ventures, Inc., a subsidiary of Carrix, Inc. SSAT
currently provides terminal and stevedoring services to various carriers at eight terminal facilities on the U.S. West
Coast, including three facilities dedicated for MatNav’s use. Matson records its share of income from SSAT in costs and
expenses in the Consolidated Statements of Income and Comprehensive Income, and within the Ocean Transportation
segment due to the nature of SSAT’s operations (see Note 4).
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) purchase order management, booking services, and non-vessel operating common carrier (“NVOCC”)
freight forwarding services (collectively, “Supply Chain Management” services).
2.
SIGNIFICANT ACCOUNTING POLICIES
Principles of Consolidation: The Consolidated Financial Statements include the accounts of Matson, Inc. and all
wholly-owned subsidiaries, after elimination of 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 (see Note 4).
Fiscal Year: The year end for Matson is December 31. The period end for MatNav occurred on the last Friday in
December, except for certain Company subsidiaries whose period closed on December 31. Included in these
Consolidated Financial Statements are 52 weeks in fiscal years 2024, 2023 and 2022 for MatNav.
Foreign Currency Transactions: The United States (U.S.) dollar is the functional currency for substantially all of the
financial statements of the Company’s foreign subsidiaries. Foreign currency denominated assets and liabilities of the
Company’s foreign subsidiaries are translated into U.S. dollars at exchange rates existing at the respective balance sheet
dates. Translation adjustments resulting from fluctuations in exchange rates are recorded as a component of
accumulated other comprehensive loss (gain) within shareholders’ equity. The Company translates the result of
operations of its foreign subsidiaries at the average exchange rate during the respective periods. Gains and losses
50
resulting from foreign currency transactions are included in Costs and Expenses in the Consolidated Statements of
Income and Comprehensive Income.
Use of Estimates: The preparation of the Consolidated Financial Statements in conformity with accounting principles
generally accepted in the U.S. requires management to make estimates and assumptions that affect the amounts reported.
Estimates and assumptions are used for, but not limited to: impairment of investments; 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 including estimates for impairment charges; and income taxes. Future results could
be materially affected if actual results differ from these estimates and assumptions.
Cash, Cash Equivalents and Restricted Cash: Cash equivalents consist of highly-liquid investments with original
maturities of three months or less. The Company carries these investments at cost, which approximates fair value.
Restricted cash relates to amounts that are subject to contractual restrictions and are not readily available. Restricted
cash was $2.3 million at December 31, 2023 and was included in prepaid expenses and other assets in the Consolidated
Balance Sheets. The Company did not have any restricted cash at December 31, 2024.
Accounts Receivable, net: Accounts receivable represent amounts due from trade customers arising in the normal course
of business. Accounts receivable are shown net of allowance for doubtful accounts receivable in the Consolidated
Balance Sheets. Allowance for doubtful accounts receivable is established by management based on estimates of
collectability. Estimates of collectability are principally based on an evaluation of the current financial condition of the
customer and the potential risks to collection, the customer’s payment history, expected future credit losses and other
factors which are regularly monitored by the Company.
Changes in the allowance for doubtful accounts receivable for the three years ended December 31, 2024, 2023 and 2022
were as follows:
Balance at
Write-offs
Balance at
Year (in millions)
Beginning of Year
Expense (1)
and Other
End of Year
2024
$
9.9 $
0.8 $
(0.9) $
9.8
2023
$
13.0 $
(2.1) $
(1.0) $
9.9
2022
$
10.1 $
3.2 $
(0.3) $
13.0
(1)
Expense is shown net of amounts recovered from previously reserved doubtful accounts receivable.
Prepaid Expenses and Other Assets: Prepaid expenses and other assets consist of the following at December 31, 2024
and 2023:
As of December 31,
Prepaid Expenses and Other Assets (in millions)
2024
2023
Prepaid fuel
$
31.2
$
22.5
Prepaid insurance and insurance related receivables
19.1
19.3
Prepaid operating expenses
8.8
8.2
Income tax receivables, net
2.0
125.2
Restricted cash - vessel construction obligations
—
2.3
Other
12.8
11.4
Total
$
73.9
$ 188.9
Income tax receivables for the year ended December 31, 2023 included a 2021 federal tax return refund of
$118.6 million. On April 19, 2024, the Company received the federal income tax refund of $118.6 million and interest
of $10.2 million earned on the federal income tax refund.
Deferred Loan Fees: The Company records deferred loan fees, excluding those related to the revolving credit facility, as
a reduction to Total Debt in the Company’s Consolidated Balance Sheets. These costs are being amortized over the life
of the related debt using the effective interest method (see Note 8).
Deferred loan fees related to the Company’s revolving credit facility are recorded in other long-term assets in the
Company’s Consolidated Balance Sheets and are amortized using the straight-line method, as the difference between
that method and the use of the effective interest method is not material.
51
Other Long-Term Assets: Other long-term assets consist of the following at December 31, 2024 and 2023:
As of December 31,
Other Long-Term Assets (in millions)
2024
2023
Pension plan assets
$
49.0
$
34.8
Vessel and equipment spare parts
15.9
14.2
Insurance related receivables
9.8
10.2
Other
4.9
7.2
Total
$
79.6
$
66.4
Property and Equipment: Property and equipment is stated at cost. Property and equipment is depreciated using the
straight-line method over the estimated useful lives of the assets. The estimated useful lives of property and equipment
range up to the following maximum lives:
Classification
Life
Vessels
40 years
Terminal cranes
30 years
Containers and chassis
15 years
Terminal equipment and other property
35 years
Capitalized Interest: The Company capitalizes interest costs during the period the qualified assets are being readied for
their intended use. The Company determined that 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
payments 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 Consolidated Balance
Sheets (see Note 5). During the years ended December 31, 2024, 2023 and 2022, the Company capitalized $4.4 million,
$2.6 million and $0.7 million of interest related to the construction of new vessels, respectively.
Leases: Accounting Standards Codification (“ASC”) 842, Leases (“ASC 842”) requires lessees to record leases on their
balance sheets but recognize the expenses in their income statements. ASC 842 states that a lessee would recognize a
lease liability for the obligation to make lease payments, and a right-of-use asset for the underlying leased asset for the
period of the lease term. Refer to Note 9 for additional information on the Company’s lease related disclosures.
Deferred Dry-docking Costs: U.S. flagged vessels must meet specified seaworthiness standards established by U.S.
Coast Guard rules and classification society rules. These standards require U.S. flagged vessels to undergo two dry-
docking inspections within a five-year period, with a maximum of 36 months between them. However, U.S. flagged
vessels that are enrolled in the U.S. Coast Guard’s Underwater Survey in lieu of Dry-docking (“UWILD”) program are
allowed to have their Intermediate Survey dry-docking requirement met with a less costly underwater inspection. Non-
U.S. flagged vessels are required to meet applicable classification society rules and their own local standards for
seaworthiness, which also mandate vessels to undergo two dry-docking inspections every five years.
The Company is responsible for maintaining its vessels in compliance with U.S. and international standards. As costs
associated with dry-docking inspections provide future economic benefits to the Company through continued operation
of the vessels, the costs are deferred and amortized until the scheduled date of the next required dry-docking, which is
usually over a two to five-year period. Amortization of deferred dry-docking costs are charged to operating expenses of
the Ocean Transportation segment in the Consolidated Statements of Income and Comprehensive Income. Routine
vessel maintenance and repairs are charged to expense as incurred.
Goodwill and Intangible Assets: Goodwill and intangible assets arise as a result of acquisitions made by the Company
(see Note 6). Intangible assets consist of customer relationships which are being amortized using the straight-line
method over the expected useful lives ranging up to 21 years, and a trade name that has an indefinite life.
Impairment Evaluation of Long-Lived Assets, Intangible Assets and Goodwill: The Company evaluates its long-lived
assets, intangible assets and goodwill 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.
52
Long-lived assets and finite-lived intangible assets are grouped at the lowest level reporting unit for which identifiable
cash flows are available. In evaluating for impairment, the estimated future undiscounted cash flows generated by each
of these asset groups are compared with the carrying value recorded for each asset group to determine if its carrying
value is recoverable. If this review determines that the amount recorded will not be recovered, the amount recorded for
the asset group is reduced to its estimated fair value. No impairment charges of long-lived assets and finite-lived
intangible assets were recorded for the years ended December 31, 2024, 2023 and 2022.
Indefinite-life intangible assets and goodwill are grouped at the lowest level reporting unit for which identifiable cash
flows are available. In estimating the fair value of a reporting unit, the Company uses a combination of a discounted
cash flow model and fair value based on market multiples of earnings before interest, taxes, depreciation and
amortization. Based upon the Company’s evaluation of its indefinite-life intangible assets and goodwill for impairment,
the Company determined that the fair value of each reporting unit exceeds book value. No impairment charges of
indefinite-life intangible assets and goodwill were recorded for the years ended December 31, 2024, 2023 and 2022.
Impairment Evaluation of SSAT: The Company’s investment in SSAT, a related party, is evaluated for impairment
whenever there is evidence of impairment during the reporting period. If any impairment is identified, the Company
evaluates if the decrease in the fair value of the investment below its carrying value is other-than-temporary. The
Company did not identify any impairment of its equity investment in SSAT during the years ended December 31, 2024,
2023 and 2022.
Other Liabilities: Other liabilities consist of the following at December 31, 2024 and 2023:
As of December 31,
Other Liabilities (in millions)
2024
2023
Employee incentives and other benefits
$
36.6
$
33.9
Payroll and vacation
36.1
38.3
Insurance reserves and other related liabilities - short term
27.2
17.5
Income tax and other tax related liabilities
8.6
1.6
Deferred revenues
5.5
6.4
Multi-employer withdrawal liabilities - short term
4.1
4.1
Other short-term liabilities
5.1
6.2
Total
$ 123.2 $ 108.0
Other Long-Term Liabilities: Other long-term liabilities consist of the following at December 31, 2024 and 2023:
As of December 31,
Other Long-Term Liabilities (in millions)
2024
2023
Multi-employer withdrawal liability
$
44.2
$
46.5
Insurance reserves and other related liabilities
25.6
23.8
Pension and post-retirement liabilities
21.3
21.8
Long-term tax liabilities
9.1
8.9
Other long-term liabilities
9.1
12.7
Total
$ 109.3
$ 113.7
Pension and Post-Retirement Plans: The Company is a member of the Pacific Maritime Association (“PMA”) and the
Hawaii Stevedoring Industry Committee, which negotiate multi-employer pension plans covering certain shoreside
bargaining unit personnel. The Company directly negotiates multi-employer pension plans covering other bargaining
unit personnel. Pension costs are accrued in accordance with contribution rates established by the PMA, the parties to a
plan or the trustees of a plan. Several trusteed, non-contributory, single employer defined benefit plans and defined
contribution plans cover substantially all other employees.
The estimation of the Company’s pension and post-retirement benefit expenses and liabilities requires that the Company
make various assumptions. These assumptions include factors such as discount rates, expected long-term rates of return
on pension plan assets, salary growth, health care cost trend rates, inflation, retirement rates, mortality rates, and
expected contributions. Actual results that differ from the assumptions made could materially affect the Company’s
financial condition or its future operating results. Additional information about the Company’s pension and post-
retirement plans is included in Note 11.
53
Insurance Related Liabilities: The Company purchases insurance with deductibles or self-insured retentions to mitigate
significant risks that it is exposed to. Such insurance includes, but is not limited to, employee health, workers’
compensation, marine liability, cybersecurity, auto liability and physical damage to property and equipment. For certain
risks, the Company elects to not purchase insurance because of the excessive cost of insurance, the perceived remoteness
of the risk or insurance coverage is not commercially available. The Company retains the risk of loss for insurance
deductibles and self-insured retentions, for amounts that exceed the limits of the Company’s insurance policies, and for
other risks not covered by insurance.
When estimating its reserves for retained risks and related liabilities, the Company considers a number of factors,
including historical claims experience, demographic factors, current trends, and analyses provided by independent third
parties. Periodically, management reviews its assumptions and estimates used to determine the adequacy of the
Company’s reserves for retained risks and other related liabilities.
Recognition of Revenues and Expenses: Revenue in the Company’s 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:
Years Ended December 31,
Ocean Transportation (in millions) (1)
2024
2023
2022
Ocean Transportation services
$ 2,762.0 $ 2,420.8 $ 3,508.0
Terminal and other related services
32.0
36.9
18.5
Fuel sales
12.4
12.3
11.3
Vessel management and related services
3.3
7.0
6.8
Total
$ 2,809.7 $ 2,477.0 $ 3,544.6
(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 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. In July 2024, the Company discontinued its vessel management and related
services.
Years Ended December 31,
Logistics (in millions) (1)
2024
2023
2022
Transportation Brokerage and Freight Forwarding services
$
538.1 $
546.8 $
695.1
Warehousing services
40.0
42.5
53.5
Supply Chain Management services
34.0
28.3
49.8
Total
$
612.1 $
617.6 $
798.4
(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 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 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
54
customer. Storage related costs are recognized as incurred. Other Warehousing 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 general and administrative expenses in the Consolidated
Statements of Income and Comprehensive Income.
Dividends: The Company recognizes dividends as a liability when approved by the Board of Directors.
Repurchase of Shares: During the years ended December 31, 2024, 2023 and 2022, the Company repurchased
approximately 1.6 million, 2.1 million and 5.0 million shares, respectively, for $201.0 million, $158.2 million and
$397.0 million, respectively. As of December 31, 2024, the number of remaining shares that may be repurchased under
the Company’s share repurchase program was approximately 0.8 million shares. On February 27, 2025, the Company’s
Board of Directors approved an additional 3.0 million shares of common stock to be added to the Company’s existing
share repurchase program and extended the program’s expiration date to December 31, 2027. Shares may be
repurchased in the open market from time to time, and may be made pursuant to a trading plan in accordance with Rule
10b5-1 of the Security Exchange Act of 1934.
Share-Based Compensation: The Company records compensation expense for all share-based awards made to
employees and directors. The Company’s various stock-based compensation plans are more fully described in Note 15.
Income Taxes: The estimate of the Company’s income tax expense requires the Company to make various estimates and
judgments. These estimates and judgments are applied in the calculation of taxable income, tax credits, tax benefits,
CCF and other tax deductions, and in the calculation of certain deferred tax assets and liabilities, which arise from
differences in the timing of recognition of revenue, costs and expenses for tax purposes. The Company also considers
the impact of expected future events such as changes in tax rates, changes in tax laws, regulations and rulings. Deferred
tax assets and liabilities are adjusted to the extent necessary to reflect tax rates expected to be in effect when the
temporary differences reverse.
The Company records a valuation allowance if, based on the weight of available evidence, management believes that it
is more likely than not that some portion or all of a recorded deferred tax asset would not be realized in future periods.
The Company’s income taxes are more fully described in Note 10.
Rounding: Amounts in the Consolidated Financial Statements and Notes to the Consolidated Financial Statements are
rounded to tenth of millions, except for per share calculations and percentages which were determined based on amounts
before rounding. Accordingly, a recalculation of some per-share amounts and percentages, if based on the reported data,
may be slightly different.
Reclassifications: The Company reclassified amortization of deferred loan fees of $2.2 million and $2.1 million from
Depreciation and amortization to Other within cash flows from operating activities in the Consolidated Statements of
Cash Flows for the years ended December 31, 2023 and 2022, respectively, to conform to current year cash flow
presentation. There were no changes in Net cash provided by operating activities as a result of this reclassification for
the years ended December 31, 2023 and 2022.
Recently adopted 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 companies to disclose on an annual and
interim basis, significant segment expenses that are regularly provided to the chief operating decision maker. The
Company adopted ASU 2023-07 during the year ended December 31, 2024 (see Note 3).
New Accounting Pronouncements: In November 2024, the FASB issued ASU 2024-03, Income Statement - Reporting
Comprehensive Income - Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement
Expenses (“ASU 2024-03”). ASU 2024-03 requires disclosure of certain expenses in the financial statements including
55
employee compensation, depreciation and amortization of intangible assets on an annual and interim basis. ASU 2024-
03 is effective for fiscal years beginning after December 15, 2026 and interim periods within fiscal years beginning after
December 15, 2027. ASU 2024-03 can be adopted either: (i) prospectively to the financial statements issued for
reporting periods after the effective date of the ASU or (ii) retrospectively to any or all prior periods presented in the
financial statements. The Company is currently evaluating the effects of adopting ASU 2024-03 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 adopting ASU 2023-09 but does not expect it to have a material impact on the Company’s consolidated financial
statements.
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 (“CODM”) 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 CODM is its Chief Executive Officer.
The Company identified two reportable segments on the basis of internal information provided to the CODM: Ocean
Transportation and Logistics which are described in Note 1. Each segment is managed separately based upon
fundamental differences in the operations of each segment. The Company’s Ocean Transportation service primarily
involves the transportation of customer cargo on Company owned and chartered vessels. The Company’s Logistics
service provides customers with logistics solutions primarily using third-party purchased transportation. The Company’s
CODM assesses the performance of each segment using operating income. The Company’s CODM reviews the
performance of each segment using monthly internal reports which provide variance analysis of actual results by
segment compared to budget, forecast and prior year. The Company’s CODM uses this information when making
decisions about the allocation of operating and capital resources to each segment. Segment balance sheet information is
not provided to the CODM as capital decisions are based upon the Company’s consolidated balance sheet.
Reportable segment financial information for the years ended December 31, 2024, 2023 and 2022, are as follows:
Year Ended
Year Ended
Year Ended
December 31, 2024
December 31, 2023
December 31, 2022
(In millions)
Ocean
Transportation Logistics
Total
Ocean
Transportation Logistics
Total
Ocean
Transportation Logistics
Total
Operating Revenue (1)(2)
$
2,809.7
$ 612.1
$ 3,421.8
$
2,477.0
$
617.6
$ 3,094.6
$
3,544.6
$
798.4
$ 4,343.0
Operating Expenses:
Operating costs:
Direct cargo expense
980.1
—
980.1
946.2
—
946.2
1,003.8
—
1,003.8
Vessel operating expense
610.5
—
610.5
580.4
—
580.4
703.6
—
703.6
Operating overhead (3)
329.1
—
329.1
297.7
—
297.7
301.2
—
301.2
Direct operating costs
—
493.1
493.1
—
504.2
504.2
—
663.7
663.7
Depreciation and amortization
141.1
12.0
153.1
130.6
11.6
142.2
131.1
8.1
139.2
Total operating costs
2,060.8
505.1
2,565.9
1,954.9
515.8
2,470.7
2,139.7
671.8
2,811.5
Loss (Income) from SSAT
1.0
—
1.0
(2.2)
—
(2.2)
(83.1)
—
(83.1)
General and administrative
247.0
56.6
303.6
229.5
53.8
283.3
206.8
54.2
261.0
Total Costs and Expenses
2,308.8
561.7
2,870.5
2,182.2
569.6
2,751.8
2,263.4
726.0
2,989.4
Operating Income:
$
500.9
$
50.4
551.3
$
294.8
$
48.0
342.8
$
1,281.2
$
72.4
1,353.6
Interest income
48.3
36.0
8.2
Interest expense
(7.5)
(12.2)
(18.0)
Other income (expense), net
7.3
6.4
8.5
Income before Taxes
599.4
373.0
1,352.3
Income taxes
(123.0)
(75.9)
(288.4)
Net Income
$ 476.4
$
297.1
$ 1,063.9
Capital Expenditures (4)
$
298.9
$
11.2
$ 310.1
$
240.2
$
8.2
$
248.4
$
190.9
$
18.4
$
209.3
(1)
Ocean Transportation operating revenue excludes inter-segment revenue of $92.8 million, $76.5 million and $93.6 million for the years ended
December 31, 2024, 2023 and 2022, respectively.
56
(2)
Logistics operating revenue excludes inter-segment revenue of $153.0 million, $132.2 million and $177.3 million for the years ended
December 31, 2024, 2023 and 2022, respectively.
(3)
Ocean Transportation operating overhead includes dry-docking amortization of $27.2 million, $25.3 million and $24.9 million for the year ended
December 31, 2024, 2023 and 2022, respectively.
(4)
Capital expenditures exclude accrued capital expenditures of $7.9 million, $10.8 million and $5.5 million as of December 31, 2024, 2023 and
2022, respectively.
Ocean Transportation’s operating expenses includes the following:
Operating costs includes:
o
Direct Cargo Expense includes terminal handling costs including labor and wharfage, outside purchased
transportation and other related costs.
o
Vessel Operating Expense includes crew wages and related costs; fuel; pilots, tugs, lines and related costs;
vessel charter expenses; and other vessel operating related expenses.
o
Operating Overhead Expense includes vessel repair and maintenance costs, inactive vessel costs, dry-docking
amortization, equipment lease costs, equipment repair costs, insurance, port engineers and other maintenance
costs, other vessel and shoreside related overhead and other indirect costs.
o
Depreciation and Amortization Expense includes depreciation of property and equipment and amortization of
intangible assets.
Income from SSAT includes the Company’s share of income from its equity investment in SSAT and has been
aggregated into the Ocean Transportation segment due to the operations of SSAT being an integral part of the
Company’s Ocean Transportation business (see Note 4).
General and Administrative Expense includes employee salaries, wages and other related costs, equipment
maintenance, computer hardware and software, professional fees and other general and administrative expenses.
Logistics’ operating expenses includes the following:
Operating costs includes:
o
Direct Operating Expense includes transportation costs, transportation brokerage expenses, agency
commissions, leases of warehouses, cross-dock and other facility operating costs, wages and other related costs,
and other operating overhead.
o
Depreciation and Amortization Expense includes depreciation of property and equipment and amortization of
intangible assets.
General and Administrative Expense includes employee salaries, wages and other related costs, computer hardware
and software, professional fees and other general and administrative expenses.
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 $245.8 million, $208.7 million and $270.9 million for the years ended December 31, 2024,
2023 and 2022, respectively, have been eliminated from operating revenues. 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.
Customer Concentration: The Company’s Ocean Transportation segment serves customers in numerous industries and
carries a wide variety of cargo, mitigating its dependence upon any single customer or single type of cargo. The
Company’s 10 largest Ocean Transportation customers account for approximately 18 percent of the Company’s Ocean
Transportation revenue.
The Company’s Logistics segment serves customers in numerous industries. The Company’s 10 largest logistics
customers account for approximately 17 percent of the Company’s Logistics revenue.
4.
INVESTMENT IN SSAT
The Company accounts for its 35 percent ownership interest in SSAT using the equity method of accounting. The
Company records its share of income from SSAT in costs and expenses within the Ocean Transportation segment due to
operations of SSAT being an integral part of the Company’s Ocean Transportation business. The Company’s investment
in SSAT was $84.1 million and $85.5 million at December 31, 2024 and 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 50 percent
57
controlling interest in SSAT ST, while the third-party company increased its non-controlling interest to 50 percent in
SSAT ST. As a result of this transaction, the Company recorded an increase in its investment in SSAT of approximately
$13.2 million, an increase in deferred income taxes of $3.1 million, and a corresponding increase in retained earnings of
$10.1 million during the year ended December 31, 2024.
On September 16, 2022, SSAT completed the purchase of a 20 percent equity interest in SSAT Terminals (Oakland),
LLC (“SSAT Oakland”) from a third-party company. After completion of this transaction, SSAT Oakland became a
wholly owned subsidiary of SSAT. The operating results of SSAT Oakland consolidate into the operating results of
SSAT. As a result of this transaction, the Company recorded a decrease of $15.5 million in its investment in SSAT, an
increase in deferred tax assets of $3.9 million, and a corresponding decrease in retained earnings of $11.6 million during
the year ended December 31, 2022.
The Company’s share of income recorded in the Consolidated Statements of Income and Comprehensive Income and
distributions received by the Company during the years ended December 31, 2024, 2023 and 2022 are as follows:
Years Ended December 31,
(In millions)
2024
2023
2022
Company’s share of income from SSAT (1)
$ (1.0)
$ 2.2
$ 83.1
Distributions received from SSAT
$ 14.0
$
—
$ 47.3
(1)
Includes an impairment charge of $18.4 million representing the Company’s portion of an impairment charge recorded by SSAT, which related
to the write-down of an asset group which includes a terminal operating lease asset during the year ended December 31, 2024. No impairment
charges were recorded during the years ended December 31, 2023 and 2022.
The Company’s Ocean Transportation segment operating costs for terminal services provided by SSAT include
$320.9 million, $297.2 million and $308.3 million for the years ended December 31, 2024, 2023 and 2022, respectively.
Accounts payable and accrued liabilities in the Consolidated Balance Sheets for terminal services payable to SSAT
include $34.4 million and $43.4 million at December 31, 2024 and 2023, respectively.
A summary of SSAT’s Condensed Balance Sheets at December 31, 2024 and 2023 are as follows:
As of December 31,
Condensed Balance Sheets (in millions)
2024
2023
Current assets
$ 305.7
$ 304.0
Non-current assets
1,625.8
1,510.2
Total Assets
$ 1,931.5
$ 1,814.2
Current liabilities
$ 271.9
$ 271.8
Non-current liabilities
1,371.5
1,255.3
Equity
288.1
287.1
Total Liabilities and Equity
$ 1,931.5
$ 1,814.2
A summary of SSAT’s Condensed Statements of Operating Income and Net Income for the years ended December 31,
2024, 2023 and 2022 are as follows:
Years Ended December 31,
Condensed Statements of Operating Income and Net Income (in millions)
2024
2023
2022
Operating revenue
$ 1,193.3
$ 1,025.1
$ 1,466.9
Operating costs and expenses
1,162.6
1,019.6
1,168.8
Operating income
30.7
5.5
298.1
Net (Loss) Income (1)(2)
$
(6.4)
$
11.9
$ 249.6
(1)
Includes an impairment charge related to the write-down of an asset group which includes a terminal operating lease asset during the year ended
December 31, 2024. No impairment amounts were recorded during the years ended December 31, 2023 and 2022.
(2)
Includes earnings from equity method investments held by SSAT less earnings allocated to non-controlling interests and includes net income or
loss attributable to noncontrolling interests.
58
5.
PROPERTY AND EQUIPMENT
Property and equipment consists of the following as of December 31, 2024 and 2023:
As of December 31, 2024
As of December 31, 2023
Accumulated
Accumulated
(In millions)
Cost
Depreciation
Net Book Value
Cost
Depreciation
Net Book Value
Vessels
$ 2,475.2 $
961.9 $
1,513.3 $ 2,323.4 $
886.8 $
1,436.6
Containers and equipment
883.8
465.9
417.9 845.0
451.9
393.1
Terminal equipment and other property
152.3
64.0
88.3 148.0
58.6
89.4
New vessel construction in progress
198.8
—
198.8
103.1
—
103.1
Other construction in progress
42.6
—
42.6
67.7
—
67.7
Total
$ 3,752.7 $ 1,491.8 $
2,260.9 $ 3,487.2 $ 1,397.3 $
2,089.9
New vessel construction in progress at December 31, 2024 and 2023 includes milestone progress payments, capitalized
interest and other costs related to the construction of three new Jones Act vessels. Delivery of the first vessel is currently
anticipated to be in the first quarter 2027, with subsequent deliveries expected in the third quarter 2027 and second
quarter 2028.
Depreciation expense for the years ended December 31, 2024, 2023 and 2022 are as follows:
Years Ended December 31,
(In millions)
2024
2023
2022
Depreciation expense
$
135.4 $
124.4 $
123.5
6.
GOODWILL AND INTANGIBLE ASSETS
Goodwill by segment consists of the following as of December 31, 2024 and 2023:
Ocean
(In millions)
Transportation Logistics
Total
Goodwill
$
222.6 $ 105.2 $ 327.8
Ocean Transportation goodwill of $222.6 million includes $221.8 million related to the acquisition of Horizon Lines,
Inc. (“Horizon”) in May 2015. Logistics goodwill of $105.2 million includes $78.6 million related to the acquisition of
Span Intermediate, LLC (“Span Alaska”) in August 2016 that was allocated to the Span Alaska reporting unit, and
$26.6 million of other Logistics acquisitions that were allocated to the Logistics reporting unit.
Intangible assets by segment consist of the following as of December 31, 2024 and 2023:
As of December 31, 2024
As of December 31, 2023
Gross Accumulated
Gross Accumulated
(In millions)
Amount Amortization Net Book Value Amount Amortization Net Book Value
Ocean Transportation - Customer relationships $ 140.6 $
64.4 $
76.2 $ 140.6 $
57.9 $
82.7
Logistics:
Customer relationships
106.2
50.3
55.9 110.4
44.0
66.4
Trade name
27.3
—
27.3 27.3
—
27.3
Total Logistics
133.5
50.3
83.2 137.7
44.0
93.7
Total
$ 274.1 $
114.7 $
159.4 $ 278.3 $
101.9 $
176.4
In February 2023, the Company completed an asset acquisition consisting of customer relationship intangible assets for
$16.5 million, which are being amortized over seven years.
Ocean Transportation intangible assets of $140.6 million relate to customer relationships acquired as part of the
acquisition of Horizon, and are being amortized over 21 years. Logistics intangible assets include $79.3 million of
customer relationships which are being amortized over 20 years, and $27.3 million of an indefinite life trade name, both
acquired as part of the Span Alaska acquisition. The remaining Logistics customer relationships relate to various
acquisitions and are being amortized over a period of 3 to 13 years.
59
Intangible assets related amortization expense for the years ended December 31, 2024, 2023 and 2022, are as follows:
Years Ended December 31,
(In millions)
2024
2023
2022
Amortization expense
$
12.8
$
13.6
$
11.4
As of December 31, 2024, estimated amortization expense related to customer relationship intangible assets during the
next five years and thereafter are as follows:
Customer
Year (in millions)
Relationships
2025
$
13.0
2026
12.5
2027
12.6
2028
12.5
2029
12.5
Thereafter
69.0
Total
$
132.1
7.
CAPITAL CONSTRUCTION FUND
The Company is party to an agreement with the U.S. Department of Transportation, Maritime Administration
(“MARAD”) that established a Capital Construction Fund (“CCF”) program under provisions of the Merchant Marine
Act of 1936, as amended (the “Merchant Marine Act”). The CCF program was created to assist owners and operators of
U.S. flagged vessels in raising capital necessary for the modernization and expansion of the U.S. merchant marine fleet.
CCF funds may be used for the acquisition, construction, or reconstruction of vessels, and for repayment of existing
vessel indebtedness through the deferment of federal income taxes on certain deposits of monies and other property
placed into the CCF. Qualified withdrawals from the CCF must be used for investment in vessels built in the U.S. and
used between covered U.S. ports as described by the Merchant Marine Act, and for other qualifying expenditures (see
Item 1 of Part 1 for additional information on Maritime Laws and the Jones Act). Participants of the CCF must also
meet certain U.S. citizenship requirements.
Cash deposits into the CCF are limited by certain applicable earnings and other conditions. Such cash deposits, once
made, are available as tax deductions in the Company’s income tax provision. Qualified withdrawals from the CCF do
not give rise to a current income tax liability, but reduce the depreciable basis of the vessels or certain related equipment
for income tax purposes. However, if withdrawals are made from the CCF for general corporate purposes or other non-
qualified purposes, or upon termination of the agreement, they are taxable with interest payable from the year of deposit.
Deposits not committed for qualified purposes within 25 years from the date of deposit will be treated as non-qualified
withdrawals over the subsequent five years. Under the terms of the CCF agreement, the Company may designate certain
qualified earnings as “accrued deposits” or may designate, as obligations of the CCF, qualified withdrawals to reimburse
qualified expenditures initially made with operating funds. Such accrued deposits to, and withdrawals from, the CCF are
reflected in the Consolidated Balance Sheets either as obligations of the Company’s current assets or as receivables from
the CCF.
The Company may invest funds on deposit in the CCF in money market funds, U.S. Treasury Obligation Funds or other
eligible credit-based investments for maturities of up to 3 years.
60
A summary of the activities within the CCF cash and cash equivalents, and investment accounts for the years ended
December 31, 2024 and 2023 consists of the following:
Years Ended
December 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
50.0
100.0
Cash paid for purchase of U.S. Treasury debt securities and accrued interest
(449.8)
—
Proceeds from U.S. Treasury debt securities at maturity
48.1
—
Interest income deposited into the CCF
18.8
31.1
Repurchase of assigned accounts receivable
53.8
—
Qualifying withdrawal payments out of the CCF
(89.6)
(49.9)
Total CCF cash and cash equivalents balance at end of period
$
230.7
$
599.4
CCF Investments:
CCF investments balance at beginning of period
$
—
$
—
Purchase of U.S. Treasury debt securities
448.1
—
Withdrawals of U.S. Treasury debt securities at maturity
(48.1)
—
Accretion of investments
11.9
—
Total CCF investments balance at end of period
411.9
—
Total CCF cash and cash equivalents, and investments balance at end of period
$
642.6
$
599.4
Cash on deposit and assigned accounts receivables in the CCF as of December 31, 2024 and 2023 are as follows:
As of December 31,
(In millions)
2024
2023
Capital Construction Fund:
Cash and cash equivalents, and investments account
$
642.6
$
599.4
Assigned accounts receivables
$
178.1
$
218.1
Cash on deposit in the CCF is invested in a U.S. Treasury obligations fund with daily liquidity. At December 31, 2024,
securities held within the U.S. Treasury obligations fund had a weighted average life of 96 days. The Company’s CCF
investments are in fixed-rate U.S. Treasury obligations with various maturity dates of up to 3 years. Cash on deposit and
investment in the CCF 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.
Assigned accounts receivable in the CCF are classified as part of accounts receivable on the Company’s Consolidated
Balance Sheets due to the nature of the assignment. During the year ended December 31, 2024, the Company
repurchased assigned accounts receivables of $53.8 million. During the year ended December 31, 2023, the Company
assigned $200.0 million of accounts receivables into the CCF.
61
8.
DEBT
The Company’s debt consists of the following as of December 31, 2024 and 2023:
As of December 31,
(In millions)
2024
2023
Private Placement Term Loans:
3.37 %, payable through 2027
$
34.6 $ 46.2
3.14 %, payable through 2031
100.1
114.4
Title XI Debt:
1.22 %, payable through 2043
150.3
158.2
1.35 %, payable through 2044
115.9
121.8
Total Debt
400.9 440.6
Less: Current portion
(39.7) (39.7)
Total Long-term Debt
361.2 400.9
Less: Deferred loan fees
(10.4)
(11.6)
Total Long-term Debt, net of deferred loan fees
$ 350.8 $ 389.3
The following is a description of the Company’s debt:
Private Placement Term Loans: In September 2016, the Company issued $200.0 million of 15-year senior unsecured
notes (the “Series D Notes”) at an interest rate of 3.14 percent, payable semi-annually. In December 2016, the Company
issued $75 million of 11-year senior unsecured notes at an interest rate of 3.37 percent, payable semi-annually.
Title XI Bonds: In April 2020, MatNav issued $185.9 million in U.S. government guaranteed vessel financing bonds to
partially refinance debt incurred in connection with the construction of Daniel K. Inouye (the “DKI Title XI Debt”). The
secured DKI Title XI Debt matures in October 2043 and has a cash interest rate of 1.22 percent, payable semi-annually
in arrears.
In June 2020, MatNav issued $139.6 million in U.S. government guaranteed vessel financing bonds to partially refinance
debt incurred in connection with the construction of Kaimana Hila (the “KMH Title XI Debt”, and together with the
DKI Title XI Debt, the “Title XI Debt”). The secured KMH Title XI Debt matures in March 2044 and has a cash
interest rate of 1.35 percent, payable semi-annually in arrears.
MatNav may prepay any amounts outstanding under the Title XI Debt agreements subject to a potential prepayment
premium or other adjustment, in accordance with the Title XI Debt agreements. Once amounts under the Title XI Debt
are repaid, they may not be reborrowed. Mandatory prepayments are required under certain limited circumstances,
including specified casualty events with respect to Daniel K. Inouye and Kaimana Hila (the “Vessels”).
Revolving Credit Facility: In March 2021, the Company entered into the Second Amended and Restated Credit
Agreement (the “Credit Agreement”), which extended the maturity date to March 31, 2026, and retained the committed
aggregate borrowings of up to $650 million. The Credit Agreement amended certain covenants and other terms
including (i) amending the pricing grid to provide for pricing ranging from, at the Company’s election, LIBOR plus a
margin between 1.00 percent and 1.75 percent depending on the Company’s consolidated net leverage ratio, or base rate
plus a margin between 0.00 percent and 0.75 percent depending on the Company’s consolidated net leverage ratio; and
(ii) reducing the maximum permitted consolidated leverage ratio to 3.50 to 1.0, with an option for a one-time increase to
4.0 to 1.0 in connection with a material acquisition. The Company may prepay any amounts outstanding under the
Credit Agreement without premium or penalty. The Credit Agreement contains affirmative, negative and financial
covenants customary for financings of this type, including, among other things, limitations on certain other indebtedness,
loans and investments, liens, mergers, asset sales, and transactions with affiliates. The Credit Agreement also contains
customary events of default.
In February 2023, the Company further amended the Credit Agreement to replace LIBOR with a new benchmark interest
rate, the Secured Overnight Financing Rate (“SOFR”). There were no other significant changes to the Credit Agreement
as a result of this amendment.
As of December 31, 2024, the Company had $643.9 million of remaining borrowing availability under the revolving
credit facility. The Company used $6.1 million of the revolving credit facility for letters of credit outstanding as of
62
December 31, 2024. Borrowings under the revolving credit facility are classified as long-term debt in the Company’s
Consolidated Balance Sheets, as principal payments are not required until the maturity date.
Amendments to Existing Private Placement Term Loan Facilities and New Shelf Facilities (“Private Loan
Facilities”): In March 2021, the Company and the holders of the notes party thereto entered into amendments
(collectively, the “2021 Note Amendments”) to each of (i) the Third Amended and Restated Note Purchase Agreement
and Private Shelf Agreement dated as of September 14, 2016, among the Company and the holders of the notes issued
thereunder, as amended; and (ii) the Note Purchase Agreement dated December 21, 2016 among the Company and the
holders of the notes issued thereunder, in each case as amended prior to such date.
The 2021 Note Amendments amended certain covenants and other terms, including the reduction of the maximum
permitted consolidated leverage ratio to 3.50 to 1.0, with an option for a one-time increase to 4.0 to 1.0 in connection
with a material acquisition, with potential interest enhancement payments if leverage is over 3.25 to 1.0. The Company
paid fees of approximately $0.8 million related to the 2021 Note Amendments which is included in deferred loan fees in
debt in the Company’s Consolidated Balance Sheets.
Debt Maturities: At December 31, 2024, debt maturities during the next five years and thereafter are as follows:
As of
Year (in millions)
December 31, 2024
2025
$
39.7
2026
39.7
2027
39.7
2028
28.2
2029
28.2
Thereafter
225.4
Total Debt
$
400.9
Deferred Loan Fees: Activity relating to deferred loan fees for the year ended December 31, 2024 are as follows:
Deferred Loan Fees (in millions)
Amount
Balance at December 31, 2023
$
11.6
Amortization expense for the year ended December 31, 2024
(1.2)
Balance at December 31, 2024
$
10.4
As of December 31, 2024, amortization expense relating to deferred loan fees during the next five years and thereafter
are as follows:
Year (in millions)
Amount
2025
$
1.1
2026
1.0
2027
0.9
2028
0.9
2029
0.8
Thereafter
5.7
Total amortization expense of deferred loan fees
$
10.4
Title XI Debt Covenants: The Title XI Debt agreements contain customary representations and warranties as well as
affirmative and negative covenants, defaults and other provisions typical for MARAD-guaranteed financings of this
type, with definitions, limitations and financial tests all as negotiated between MatNav and MARAD. The covenants in
the Title XI Debt agreements include, among other things, limitations on certain other indebtedness, loans and
investments, liens, mergers, asset sales, sale and leasebacks, and transactions with affiliates as defined within the Title
XI Debt agreements. Certain of the covenants in the Title XI Debt agreements are applicable only upon and during the
continuance of either (i) an event of default or (ii) the failure of either the Company or MatNav to meet certain
supplemental financial tests, including the following:
63
The supplemental financial tests applicable to MatNav include maintenance of a working capital minimum of $1,
and maintenance of a long-term debt to net worth ratio of greater than or equal to 2.0 to 1.0; and
The supplemental financial tests applicable to the Company include maintenance of a net worth greater than or
equal to 90% of the net worth of the Company as set forth in the most recent audited financial statements prior to
closing of the issuance of the Title XI Bonds and compliance with the leverage ratio set forth in the Credit
Agreement.
Debt Security and Guarantees: All of the debt of the Company and MatNav, including related guarantees, as of
December 31, 2024 was unsecured, except for the Title XI Debt.
Under the Title XI Debt agreements, MARAD has guaranteed certain obligations of MatNav. MatNav has agreed to
reimburse MARAD for any payments it makes under the MARAD guaranty, and MatNav’s obligations to MARAD with
respect to the Title XI Debt are secured by a mortgage on the Vessels and certain other related assets (the “Collateral”).
In addition, MatNav’s obligations to MARAD with respect to the Title XI Debt are guaranteed by the Company under an
Affiliate Guaranty.
9.
LEASES
Description of Operating Leases: The Company has different types of operating leases, the specific terms and
conditions of which vary from lease to lease. Certain operating lease agreements include terms such as: (i) renewal and
early termination options; (ii) early buy-out and purchase options; and (iii) rent escalation clauses. The lease agreements
also include provisions for the maintenance of the leased asset and payment of lease related costs. The Company
reviews the specific terms and conditions of each lease and, as appropriate, notifies the lessor of any intent to exercise
any option in accordance with the terms of the lease. In the normal course of business, the Company expects to be able
to renew or replace most of its operating leases with other similar leases as they expire. The Company’s leases do not
contain any residual value guarantees.
The Company’s sub-lease income was nominal to the Company’s Consolidated Statements of Income and
Comprehensive Income for the years ended December 31, 2024 and 2023. The Company did not have any finance
leases during the years ended December 31, 2024 and 2023. Certain of the Company’s lease agreements include rental
payments that may be adjusted in the future based on economic conditions and others include rental payments adjusted
periodically for inflation. Variable lease expense is disclosed for the adjusted portion of such payments.
The lease type by underlying asset class and maximum terms of the Company’s operating leases are as follows:
Lease Type:
Term
Real estate and terminal leases
50 years
Vessel and barge charter leases
4 years
Operations equipment and other leases
14 years
Incremental Borrowing Rate: As most of the Company’s operating leases do not provide an implicit rate, the Company
uses an estimated incremental borrowing rate based on information available at the date of adoption and subsequent
lease commencement dates in calculating the present value of its operating lease liabilities. The incremental borrowing
rate is determined using the U.S. Treasury rate adjusted to account for the Company’s credit rating and the collateralized
nature of operating leases.
Components of Lease Cost: Components of lease cost recorded in the Company’s Consolidated Statement of Income
and Comprehensive Income consists of the following for the years ended December 31, 2024, 2023 and 2022:
Years Ended
December 31,
(In millions)
2024
2023
2022
Operating lease cost
$
143.4 $
151.0 $
162.2
Short-term lease cost
10.4
7.7
0.6
Variable lease cost
0.6
0.6
0.8
Total lease cost
$
154.4 $
159.3 $
163.6
64
Other Lease Information: Other information related to the Company’s operating leases consists of the following for the
years ended December 31, 2024 and 2023:
Years Ended
December 31,
(In millions)
2024
2023
Cash paid for amounts included in operating lease liabilities
$
148.7
$
154.3
Right of use assets obtained in the exchange for new operating lease liabilities
$
205.8
$
40.0
As of December 31,
2024
2023
Weighted average remaining operating lease term
5.3 years
4.8 years
Weighted average incremental borrowing rate
4.3%
3.1%
Maturities of operating lease liabilities consist of the following at December 31, 2024:
As of
Year (in millions)
December 31, 2024
2025
$
133.3
2026
98.0
2027
71.2
2028
21.4
2029
10.1
Thereafter
79.9
Total lease payments
413.9
Less: Interest
(55.4)
Present value of operating lease liabilities
358.5
Less: Short-term portion
(129.0)
Long-term operating lease liabilities
$
229.5
10.
INCOME TAXES
Income Taxes: Income taxes consist of the following for the years ended December 31, 2024, 2023 and 2022:
Years Ended December 31,
(In millions)
2024
2023
2022
Current:
Federal
$
86.8
$
44.0
$ 171.5
State
12.4
9.2
18.3
Foreign
3.5
3.0
1.3
Total current tax expense
102.7
56.2
191.1
Deferred:
Federal
17.9
18.2
71.1
State
2.8
—
24.3
Foreign
(0.4)
1.5
1.9
Total deferred tax expense
20.3
19.7
97.3
Total income taxes
$ 123.0
$
75.9
$ 288.4
65
Income taxes for the years ended December 31, 2024, 2023 and 2022 vary from amounts computed by applying the
statutory U.S. federal income tax rate due to the following:
Years Ended December 31,
2024
2023
2022
U.S. federal income tax rate
21.0 % 21.0 %
21.0 %
State and local taxes, net of federal benefit
2.3 %
2.6 %
2.8 %
Foreign-derived intangible income (FDII)
(2.6)%
(2.0)%
(2.4) %
Foreign taxes
0.3 %
0.4 %
0.1 %
Share-based payments
0.2 %
0.5 %
— %
Return to provision true-ups
(0.7)% (2.8)%
0.1 %
Other, net
— %
0.6 % (0.3) %
Effective income tax rate
20.5 % 20.3 %
21.3 %
The tax effects of temporary differences that gave rise to significant positions of deferred tax assets and deferred tax
liabilities at December 31, 2024 and 2023, were as follows:
As of December 31,
(In millions)
2024
2023
Deferred tax assets:
Operating lease liabilities
$
84.0
$ 77.4
Deferred compensation
12.1
11.8
Multi-employer withdrawal liabilities
11.4
12.8
Insurance reserves
7.8
6.3
U.S. state alternative minimum tax credits
5.9
7.4
Other
15.8
12.9
Total deferred tax assets
137.0
128.6
Valuation allowance
(5.0)
(5.3)
Total deferred tax assets, net of valuation allowance
132.0
123.3
Deferred tax liabilities:
Basis differences for property and equipment
482.7
451.4
Capital Construction Fund
192.1
206.9
Operating lease right of use assets
83.8
75.8
Intangibles
40.3
42.3
Other
26.5
16.2
Total deferred tax liabilities
825.4
792.6
Deferred tax liability, net
$
693.4
$ 669.3
Income Tax Receivables: The Company had income tax receivables of approximately $2.0 million and $125.2 million at
December 31, 2024 and 2023, respectively. The income tax receivable for the year ended December 31, 2023 included a
2021 federal income tax refund of approximately $118.6 million. On April 19, 2024, the Company received the federal
income tax refund of $118.6 million and interest of $10.2 million earned on the federal income tax refund. These
income tax receivable amounts have been included in prepaid expenses and other assets in the Company’s Consolidated
Balance Sheets (see Note 2).
State Income Tax Operating Losses, State Tax Credit and Valuation Allowance: The Company’s U.S. state income tax
net operating losses (“NOLs”) and U.S. state tax credit carryforwards consist of the following at December 31, 2024 and
2023:
(In millions)
Expiration Date
2024
2023
U.S. state income tax NOLs (1)
Various dates beginning in 2032
$
136.5
$
152.3
U.S. state alternative minimum tax credits
No expiration date
$
5.9
$
7.3
(1)
U.S. State income tax NOLs were acquired as part of the Horizon acquisition and are presented on a gross tax basis. These U.S. state income tax
NOLs are excluded from the Company’s deferred tax assets and deferred tax liabilities above as the Company does not expect to benefit from any
of the $136.5 million and $152.3 million balance as of December 31, 2024 and 2023, respectively.
66
The Company recorded a valuation allowance against its unusable portion of U.S. state income tax NOLs of $5.0 million
and $5.3 million as of December 31, 2024 and 2023, respectively, as the Company believes that it is more likely than not
that the benefit from these deferred assets will not be realized.
Unrecognized Tax Benefits: Total unrecognized benefits represent the amount that, if recognized, would favorably
affect the Company’s income taxes and effective tax rate in future periods. The Company does not expect a material
change in gross unrecognized benefits in the next twelve months. A reconciliation of the beginning and ending amount
of gross unrecognized tax benefits is as follows:
Years Ended December 31,
Unrecognized Tax Benefits (in millions)
2024
2023
2022
Balance at beginning of year
$
28.4
$
25.1
$
19.2
Tax position changes in current year
(0.7)
3.6
5.8
Tax position changes in prior years
(0.1)
(0.1)
0.3
Reductions for lapse of statute of limitations
(0.9)
(0.2)
(0.2)
Balance at end of year
$
26.7
$
28.4
$
25.1
Included in the balance of unrecognized tax benefits at December 31, 2024 are potential benefits of $22.9 million that, if
recognized, would affect the Company’s income taxes and effective tax rate. The Company recognizes potential accrued
interest and penalties related to unrecognized tax benefits in income taxes. To the extent interest and penalties are not
ultimately assessed with respect to the settlement of uncertain tax positions, amounts accrued will be reduced and
reflected as a reduction of the Company’s income taxes. Interest and penalties accrued related to the balance of
unrecognized tax benefits were $1.2 million and $1.4 million as of December 31, 2024, and $0.9 million and
$1.5 million as of December 31, 2023, respectively. During the years ended December 31, 2024 and 2023, the Company
recognized $0.4 million and $0.7 million, respectively, in income taxes related to interest and penalties.
The Company is no longer subject to U.S. federal income tax audits for years before 2017. The Company is routinely
involved in federal, state, local income and excise tax audits, and foreign tax audits.
11.
PENSION AND POST-RETIREMENT PLANS
Qualified Pension and Post-retirement Benefits Plans: The Company provides a funded qualified single employer
defined benefit pension plan that covers most non-bargaining employees and certain clerical bargaining unit employees.
The Company also provides a post-retirement benefit plan that provides health and life insurance benefits, and covers
substantially all salaried, non-bargaining employees hired before 2008, and certain bargaining unit employees.
Employees are generally eligible for such benefits upon retirement and completion of a specified number of years of
service. The Company does not pre-fund the post-retirement benefit plan and has the right to modify or terminate the
plan in the future, with the exception of the benefits pertaining to the bargaining unit employees. Most non-bargaining
retirees pay a portion of these post-retirement benefit costs.
Plan Administration, Investments and Asset Allocations: The Company has a Benefits Investment Committee that meets
regularly with investment advisors to establish investment policies, direct investments and select investment options for
the qualified plan. The Benefits Investment Committee is also responsible for appointing investment managers and
monitoring their performance. The Company’s investment policy permits investments in marketable equity securities,
such as domestic and foreign stocks, domestic and foreign bonds, real estate investments, and cash equivalents. The
Company’s investment policy does not permit direct investment in certain types of assets, such as options or
commodities, or the use of certain strategies, such as short selling or the purchase of securities on margin.
The Company’s investment strategy for its qualified pension plan assets is to achieve a diversified mix of investments
that provides for long-term growth at an acceptable level of risk, and to provide sufficient liquidity to fund ongoing
benefit payments. The Company has engaged a number of investment managers to implement various investment
strategies to achieve the desired asset class mix, liquidity and risk diversification objectives.
67
The Company’s target and actual asset allocations at December 31, 2024 and 2023 were as follows:
Asset Categories
Target
2024
2023
Domestic equity securities
55 % 58 % 57 %
International equity securities
15 % 16 % 16 %
Debt securities
20 % 19 % 19 %
Real estate
5 %
5 %
5 %
Other and cash
5 %
2 %
3 %
Total
100 % 100 % 100 %
The Company’s investments in equity securities primarily include domestic large-cap and mid-cap companies, but also
includes an allocation to small-cap and international equity securities. Equity investments do not include any direct
holdings of the Company’s stock but may include such holdings to the extent that the stock is included as part of certain
mutual fund holdings. Debt securities include investment-grade and high-yield corporate bonds from diversified
industries, mortgage-backed securities, and U.S. Treasuries. Other types of investments include funds that invest in
commercial real estate assets. All assets within specific funds are allocated to the target asset allocation of the fund.
The expected return on plan assets is principally based on the Company’s historical returns combined with the
Company’s long-term future expectations regarding asset class returns, the mix of plan assets, and inflation assumptions.
Actual return on plan assets for the periods presented are as follows:
Actual Return on Plan Assets
Returns
One-year return
9.9 %
Three-year return
3.1 %
Five-year return
7.1 %
Long-term average return (since plan inception in 1989)
8.2 %
The Company’s pension plan assets are held in a trust and are stated at estimated fair values of the underlying
investments. Purchases and sales of securities are recorded on a trade-date basis. Interest income is recorded on an
accrual basis. Dividends are recorded on the ex-dividend date.
Equity Securities: Domestic and international common stocks are valued by obtaining quoted prices on recognized and
highly liquid exchanges.
Fixed Income Securities: Corporate bonds and U.S. government treasury and agency securities are valued based on the
closing price reported in the market in which the security is traded. U.S. government agency and corporate asset-backed
securities may utilize models, such as a matrix pricing model, that incorporate other observable inputs when
broker/dealer quotes are not available, such as cash flow, security structure, or market information.
Real Estate and Certain International Equity Funds: The fair value of real estate and certain developed and emerging
market equity funds is determined by the issuer based on their net asset value (“NAV”). NAV is determined by dividing
the fund’s net assets, as recorded in the fund’s audited financial statements, by the number of units outstanding at the
valuation date. Fair value for the underlying investments in real estate is determined through independent property
appraisals.
68
The fair values of the Company’s pension plan assets at December 31, 2024 and 2023 by asset category were as follows:
Fair Value Measurements at December 31, 2024
Quoted Prices in
Significant
Significant
Active Markets
Observable
Unobservable
Asset Category (in millions)
Total
(Level 1)
Inputs (Level 2) Inputs (Level 3)
Cash
$
5.1 $
5.1 $
— $
—
Equity securities:
U.S. large-cap
90.9
90.9
—
—
U.S. mid- and small-cap
50.2
50.2
—
—
International large-cap
7.1
7.1
—
—
Fixed income securities:
U.S. Treasuries
20.0
12.9
7.1
—
Municipal bonds
0.2
—
0.2
—
Investment grade U.S. corporate bonds
24.9
—
24.9
—
Convertible bonds
0.1
—
0.1
—
International fixed income securities
0.1
—
0.1
—
Total
198.6 $
166.2 $
32.4 $
—
Investment measured at NAV (1)
42.6
Total plan assets
$ 241.2
Fair Value Measurements at December 31, 2023
Quoted Prices in
Significant
Significant
Active Markets
Observable
Unobservable
Asset Category (in millions)
Total
(Level 1)
Inputs (Level 2) Inputs (Level 3)
Cash
$
6.1 $
6.1 $
— $
—
Equity securities:
U.S. large-cap
82.8
82.8
—
—
U.S. mid- and small-cap
46.0
46.0
—
—
International large-cap
7.1
7.1
—
—
Fixed income securities:
U.S. Treasuries
19.2
—
19.2
—
Municipal bonds
0.2
—
0.2
—
Investment grade U.S. corporate bonds
24.7
—
24.7
—
Convertible bonds
0.1
—
0.1
International fixed income securities
0.1
—
0.1
—
Total
186.3 $
142.0 $
44.3 $
—
Investment measured at NAV (1)
41.6
Total plan assets
$ 227.9
(1)
Certain funds for which fair value is measured using the NAV per share as a practical expedient are not leveled within the fair value hierarchy
and are included as a reconciling item to total plan assets. These investments include real estate and certain developed and emerging market
equity funds.
Contributions to the qualified single employer defined benefit pension plan are determined annually by the Company,
taking into consideration recommendations from the actuary based upon the actuarially determined minimum required
contributions under the Employee Retirement Income Security Act of 1974 (“ERISA”), as amended, the Pension
Protection Act of 2006, and the maximum deductible contribution allowed for tax purposes. The Company’s funding
policy is to contribute cash so that it meets at least the minimum required contributions, with an allowance for
discretionary contributions. In 2024, 2023 and 2022, the Company contributed $4.5 million, $9.0 million and
$9.0 million, respectively, in pension contributions to this plan, which were in excess of the minimum required
contributions.
The benefit formulas for employees who are members of collective bargaining units are determined according to the
collective bargaining agreements, either using final average pay as the base, a flat dollar amount per year of service, or a
cash balance formula.
Effective December 31, 2011, the Company froze benefit accruals under the final average pay formula for salaried, non-
bargaining unit employees hired before January 1, 2008 and transitioned them to the same cash balance formula for
69
employees hired on or after January 1, 2008. Retirement benefits under the cash balance formula are based on a fixed
percentage of employee eligible compensation, plus interest. The plan interest credit rate will vary from year to year
based on the ten-year U.S. Treasury rate.
Effective December 31, 2022, the Matson Pension Plan for Clerical Bargaining Unit Employees was merged into the
Retirement Plan for Employees of Matson.
Benefit Plan Assets and Obligations: The measurement date for the Company’s benefit plan disclosures is December 31
of each year. The status of the funded qualified defined benefit pension plan and the unfunded post-retirement benefit
plan at December 31, 2024 and 2023 are shown below:
Post-retirement
Pension Benefits
Benefits
December 31,
December 31,
(In millions)
2024
2023
2024
2023
Change in Benefit Obligation:
Benefit obligation at beginning of year
$ 193.1 $ 187.4 $ 19.5 $ 15.3
Service cost
3.7
3.1
0.2
0.2
Interest cost
9.7 10.0
1.0
0.8
Participant contributions
—
—
0.6
0.7
Actuarial loss (gain)
(1.2)
5.5 (0.6)
4.5
Benefits paid, net of subsidies received
(13.1) (12.9) (2.3) (2.0)
Benefit obligation at end of year
192.2 193.1 18.4 19.5
Change in Plan Assets:
Fair value of plan assets at beginning of year
227.9 206.3
—
—
Actual return on plan assets
21.9 25.5
—
—
Participant contributions
—
—
0.6
0.7
Employer contributions
4.5
9.0
1.7
1.3
Benefits paid, net of subsidies received
(13.1) (12.9) (2.3) (2.0)
Fair value of plan assets at end of year
241.2 227.9
—
—
Funded Status and Recognized Plan Assets and Benefit Obligations
$ 49.0 $ 34.8 $ (18.4) $ (19.5)
Qualified pension and post-retirement benefit plan assets and liabilities recognized in the Consolidated Balance Sheets
and expenses recognized in accumulated other comprehensive income (loss) at December 31, 2024 and 2023 were as
follows:
Post-retirement
Pension Benefits
Benefits
December 31,
December 31,
(In millions)
2024
2023
2024
2023
Non-current assets
$ 49.0 $ 34.8 $
— $
—
Current liabilities
—
—
(1.1)
(1.1)
Non-current liabilities
—
— (17.3) (18.4)
Total
$ 49.0 $ 34.8 $ (18.4) $ (19.5)
Net (loss) gain, net of taxes
$ (14.0) $ (20.3) $ 2.5 $ 2.7
Prior service credit, net of taxes
—
—
5.6
8.3
Total
$ (14.0) $ (20.3) $ 8.1 $ 11.0
Unrecognized gains and losses of the post-retirement benefit plans are amortized over five years. Although current
health care costs are expected to increase, the Company attempts to mitigate these increases by maintaining caps on
certain of its benefit plans, using lower cost health care plan options where possible, requiring that certain groups of
employees pay a portion of their benefit costs, self-insuring for certain insurance plans, encouraging wellness programs
for employees, and implementing measures to mitigate future benefit cost increases.
70
Components of the net periodic benefit cost and other amounts recognized in other comprehensive income (loss) for the
qualified pension plan and the post-retirement benefit plan during 2024, 2023 and 2022 were as follows:
Pension Benefits
Post-retirement Benefits
December 31,
December 31,
(In millions)
2024
2023
2022
2024
2023
2022
Components of Net Periodic Benefit Cost (Credit):
Service cost
$
3.7 $
3.1 $ 4.8 $
0.2 $
0.2 $
0.7
Interest cost
9.7 10.0
7.0
1.0
0.8
0.8
Expected return on plan assets
(15.1) (13.9) (16.0)
—
—
—
Amortization of net actuarial loss (gain)
0.4
1.3
2.4
(0.8)
(2.0)
0.8
Amortization of prior service credit
—
— (1.0)
(3.7)
(3.7) (3.6)
Net periodic benefit cost (credit)
(1.3)
0.5 (2.8)
(3.3)
(4.7) (1.3)
Other Changes in Plan Assets and Benefit Obligations
Recognized in Other Comprehensive Income, net of tax:
Net (gain) loss
(6.0)
(4.5) (12.3)
(0.5)
3.4 (10.7)
Amortization of net actuarial (loss) gain
(0.3) (1.0) (1.8)
0.6
1.5 (0.6)
Amortization of prior service credit
—
—
0.8
2.8
2.8
2.7
Total recognized in other comprehensive (income) loss
(6.3)
(5.5) (13.3)
2.9
7.7 (8.6)
Total recognized in net periodic benefit cost and other
comprehensive (income) loss
$ (7.6) $ (5.0) $ (16.1) $
(0.4) $
3.0 $ (9.9)
The weighted average assumptions used to determine benefit information during 2024, 2023 and 2022 were as follows:
Pension Benefits
Post-retirement Benefits
December 31,
December 31,
2024
2023
2022
2024 2023
2022
Discount rate (1)
5.60 %
5.30 %
5.60 % 5.60 % 5.40 %
5.50 %
Expected return on plan assets
6.85 %
6.85 %
6.75 %
Rate of compensation increase
3.50 %
3.50 % 4.00 % - 3.50 % 3.50 % 3.50 % 4.00 % - 3.50 %
Cash balance interest credit rate
3.90 % - 4.42 % 4.50 % - 3.25 % 3.50 % - 3.25 %
Immediate health care cost trend rate:
Pre-65 group
6.30 % 6.80 %
6.60 %
Post-65 group
6.50 % 7.10 %
6.10 %
Ultimate health care cost trend rate
3.90 % 3.90 %
4.00 %
Year ultimate health care cost trend rate
is reached
2048
2048
2046
(1)
The Company derives a single equivalent rate utilizing a yield curve constructed from a portfolio of high-quality corporate bonds with various
maturities.
Non-qualified Pension Plans: The Company has non-qualified supplemental pension plans covering certain employees
and retirees, which provide for incremental pension payments from the Company’s general funds so that total pension
benefits would be substantially equal to amounts that would have been payable from the Company’s qualified pension
plans if it were not for limitations imposed by income tax law. A few employees and retirees receive additional
supplemental pension benefits. Non-qualified pension plan liabilities recognized in the Consolidated Balance Sheets and
expenses recognized in accumulated other comprehensive income (loss) at December 31, 2024 and 2023 are as follows:
Non-qualified
Pension Benefits
December 31,
(In millions)
2024
2023
Current liabilities
$
(0.4)
$
(1.2)
Non-current liabilities
(4.0)
(3.4)
Total
$
(4.4)
$
(4.6)
Net (loss), net of taxes
$
(0.4)
$
(0.2)
Total
$
(0.4)
$
(0.2)
71
Discount rates of 5.4 percent and 5.2 percent were used in determining the 2024 and 2023 non-qualified pension plan
obligations, respectively.
Estimated Benefit Payments: The estimated future benefit payments for the next ten years consist of the following as of
December 31, 2024:
Non-qualified
Pension
Pension
Post-retirement
Year (in millions)
Benefits
Benefits
Benefits (1)
2025
$
15.3 $
0.4 $
1.1
2026
15.3
0.5
1.1
2027
15.8
0.5
1.1
2028
16.2
0.5
1.1
2029
16.1
0.7
1.1
2030-2034
80.1
2.7
5.7
Total
$
158.8 $
5.3 $
11.2
(1)
Net of participant contributions and Medicare Part D subsidies.
Defined Contribution Plans: The Company sponsors defined contribution plans that qualify under Sections 401(a) and
401(k) of the Internal Revenue Code. The Company may make discretionary matching contributions equal to a specified
percentage of each participant’s 401(k) contributions and makes other non-discretionary contributions. For the year
ended December 31, 2024, the Company provided employees with discretionary matching contributions of up to
3 percent of eligible employee compensation, and for a select group of employees, up to 4 percent of eligible employee
compensation. The Company’s matching contributions and other contributions expensed in 2024, 2023 and 2022 were
$4.6 million, $4.2 million and $3.6 million, respectively.
The Company may also provide a discretionary profit sharing contribution under the qualified defined contribution plans
to non-bargaining unit employees, if both a minimum threshold of Company performance is achieved and the Board of
Directors has approved the profit sharing contribution. For certain eligible employees, supplemental profit sharing
contributions are credited under a non-qualified plan to be paid after separation from service from the Company’s
general funds so that total profit sharing contributions would be substantially equal to amounts that would have been
contributed to the Company’s qualified defined contribution plans if it were not for limitations imposed by income tax
law. Discretionary profit sharing contributions expensed in 2024, 2023 and 2022 were $3.1 million, $3.1 million and
$2.8 million, respectively.
Multi-employer Bargaining Plans:
The Company contributes to multi-employer defined benefit pension plans under the terms of collective-bargaining
agreements that cover its bargaining unit employees. Contributions are generally based on amounts paid for union labor
or cargo volume. The risks of participating in multi-employer plans are different from single employer plans because
assets contributed to the multi-employer plan by one employer may be used to provide benefits to employees of other
participating employers. Additionally, if one employer stops contributing to the plan, the unfunded obligations of the
plan may be borne by the remaining participating employers.
The multi-employer pension plans are subject to the plan termination insurance provisions of ERISA and are paying
premiums to the Pension Benefit Guaranty Corporation (“PBGC”). The statutes provide that an employer who
withdraws from, or significantly reduces its contribution obligation to, a multi-employer plan generally will be required
to continue funding its proportional share of the plan’s unfunded vested benefits. As of December 31, 2024, the
Company’s estimated benefit plan withdrawal obligations were $155.5 million. Except as described in Note 12, no
withdrawal obligations have been recorded by the Company in the Consolidated Balance Sheets at December 31, 2024
and 2023, as the Company has no present intention of withdrawing from and does not anticipate termination of any of
these plans.
Information regarding the Company’s participation in multi-employer pension plans is outlined in the table below. The
“EIN/Pension Plan Number” column provides the Employer Identification Number (“EIN”) and the three-digit plan
number, if applicable. Unless otherwise noted, the most recent Pension Protection Act zone status available in 2024 and
2023 is for the plan’s year-end at December 31, 2024 and 2023, respectively. The zone status is based on information
that the Company received from the plan and is certified by the plan’s actuary. Among other factors, plans in the red
72
zone are generally less than 65 percent funded; plans in the orange zone are both a) less than 80 percent funded and
b) have an accumulated/expected funding deficiency in any of the next six plan years, net of any amortization
extensions; plans in the yellow zone meet either one of the criteria mentioned in the orange zone; and plans in the green
zone are at least 80 percent funded. The funding improvement plan (“FIP”) or rehabilitation plan (“RP”) column
indicates the status which is either pending or has been implemented. The last column lists the expiration dates of the
collective-bargaining agreements to which the plans are subject.
Pension
Protection Act
Zone as of
FIP/RP Status
5%
Contributions of Matson
EIN/Pension
December 31,
Pending/
Contributor
(in millions)
Surcharge
Expiration
Pension Funds
Plan Number Notes 2024 2023 Implemented
in 2024
2024 2023 2022 Imposed
Date (1)
American Radio Association Pension Fund
13-6161999-001
Green Green Implemented
Yes
$ 1.0 $ 1.0 $ 1.1
No
6/15/2028
Hawaii Longshore Pension Plan
99-0314293-001
Green
Green
No
Yes
12.9 12.1 11.9
No
6/30/2028
Master, Mates and Pilots Pension Plan
13-6372630-001
Green Green
No
Yes
3.7 3.6 3.8
No
6/15/2027,
6/15/2028
Masters, Mates and Pilots Adjustable Pension
Plan
37-1719247-001
Green Green
No
Yes
2.1 2.0 2.1
No
6/15/2027,
6/15/2028
MEBA Pension Trust - Defined Benefit Plan 51-6029896-001
Green Green
No
Yes
4.6 4.2 4.5
No
6/15/2028
OCU Pension Trust Plan
26-1574440-001
Green Green
No
No
0.6 0.4 0.5
No
6/30/2030
MFOW Supplementary Pension Plan
94-6201677-001
Yellow Yellow
No
Yes
0.1 0.1 0.1
No
6/30/2026
SIU Pacific District Pension Plan
94-6061923-001
Green
Green
No
Yes
1.3 1.3 1.5
No
6/30/2026
Alaska Teamster - Employer Pension Plan
92-6003463-024
Red
Red Implemented
Yes
3.8 3.9 4.0
No
6/30/2025,
6/30/2026,
6/30/2027,
6/30/2028
All Alaska Longshore Pension Plan
91-6085352-001
Green
Green
No
Yes
2.2 1.8 2.0
No
6/30/2028
Western Conference of Teamsters Pension
Plan
91-6145047-001
Green
Green
No
No
2.3 2.1 2.1
No
3/31/2028
Western Conference of Teamsters
Supplemental Benefit Trust
95-3746907-001
Green
Green
No
No
0.1 0.1 0.1
No
3/31/2028
OPEIU Local 153 Pension Plan
13-2864289-001
Red
Red Implemented
No
0.1 0.1 0.1
No
11/9/2028
Seafarers Pension Plan
13-6100329-001
(2)
Green
Green
No
No
—
—
—
No
6/30/2027
Total
$ 34.8 $ 32.7 $ 33.8
(1)
Represents the expiration date of the collective bargaining agreement.
(2)
The Company does not make contributions directly to the Seafarers Pension Plan. Instead, contributions are made to the Seafarers Health and Benefits Plan, and are
subsequently re-allocated to the Seafarers Pension Plan at the discretion of the plan Trustees.
The Company also contributes to multi-employer plans that provide post-retirement health and other benefits other than
pensions under the terms of collective-bargaining agreements. Benefits provided to active and retired employees and
their eligible dependents under these plans include medical, dental, vision and prescription drugs. These plans are not
subject to the PBGC plan termination and withdrawal liability provisions of ERISA applicable to multi-employer
defined benefit pension plans. Contributions made to these plans were $41.2 million, $37.7 million and $37.7 million in
2024, 2023 and 2022, respectively.
Multi-employer Defined Contribution Plans: The Company contributes to six multi-employer defined contribution
pension plans. These plans are not subject to the withdrawal liability provisions of ERISA or the PBGC applicable to
multi-employer defined benefit pension plans. Contributions made to these plans by the Company were $6.0 million,
$5.7 million and $6.0 million in 2024, 2023 and 2022, respectively.
73
12.
MULTI-EMPLOYER WITHDRAWAL LIABILITIES
Horizon ceased all of its operations in Puerto Rico during the first quarter of 2015, which resulted in a mass withdrawal
from its multi-employer ILA-PRSSA pension fund. The Company assumed this liability as part of the acquisition of
Horizon on May 29, 2015. The Company estimated the mass withdrawal liability based upon the required undiscounted
quarterly payment of approximately $1.0 million to be paid to the ILA-PRSSA pension fund over a period which ends in
March 2040, discounted to present value using the Company’s incremental borrowing rate. Future estimated annual
payments to be paid to the ILA-PRSSA pension fund as of December 31, 2024 were as follows:
Year (in millions)
Total
2025
$
4.1
2026
4.1
2027
4.1
2028
4.1
2029
4.1
Thereafter
43.1
Total remaining future undiscounted payments due to the ILA-PRSSA pension fund
63.6
Less: amount representing interest
(15.3)
Present value of multi-employer withdrawal liability
48.3
Current portion of multi-employer withdrawal liability (see Note 2)
(4.1)
Long-term portion of multi-employer withdrawal liability (see Note 2)
$
44.2
13.
ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS)
Changes in accumulated other comprehensive income (loss) by component, net of tax, consist of the following for the
years ended December 31, 2024 and 2023:
Non-
Accumulated
Post-
Qualified
Other
Pension Retirement
Pension
Comprehensive
(In millions)
Benefits
Benefits
Benefits
Other
Income (Loss)
Balance at December 31, 2022
$ (25.8) $
18.7 $ 0.1 $ 0.1 $
(6.9)
Amortization of prior service cost
—
(2.8)
—
—
(2.8)
Amortization of net gain (loss)
5.5
(4.9) (0.3)
—
0.3
Foreign currency exchange
—
—
— (0.5)
(0.5)
Other adjustments
—
—
— 1.7
1.7
Balance at December 31, 2023
(20.3)
11.0 (0.2) 1.3
(8.2)
Amortization of prior service cost
—
(2.8)
—
—
(2.8)
Amortization of net gain (loss)
6.3
(0.1) (0.2)
—
6.0
Foreign currency exchange
—
—
— (1.9)
(1.9)
Other adjustments
—
—
— 0.4
0.4
Balance at December 31, 2024
$ (14.0) $
8.1 $ (0.4) $ (0.2) $
(6.5)
Other comprehensive income (loss) in the Consolidated Statements of Income and Comprehensive Income is shown net
of tax benefit (expense) of $(2.5) million, $(1.2) million and $(9.3) million for the years ended December 2024, 2023
and 2022, respectively.
74
14.
EARNINGS PER SHARE
Basic earnings per share are determined by dividing net income by the weighted-average common shares outstanding
during the year. The calculation of diluted earnings per share includes the dilutive effect of unvested restricted stock
units. The computation of weighted average common shares excluded a nominal amount of anti-dilutive restricted stock
units for each of the years 2024, 2023 and 2022.
The computations for basic and diluted earnings per share for the years ended December 31, 2024, 2023 and 2022 are as
follows:
Year Ended December 31, 2024
Year Ended December 31, 2023
Year Ended December 31, 2022
Weighted
Per
Weighted
Per
Weighted
Per
Average
Common
Average
Common
Average
Common
Net
Common
Share
Net
Common
Share
Net
Common
Share
(In millions, except per share amounts)
Income
Shares
Amount
Income
Shares
Amount
Income
Shares
Amount
Basic:
$ 476.4
33.7 $ 14.14
$ 297.1
35.3 $
8.42
$ 1,063.9
39.0
$ 27.28
Effect of Dilutive Securities:
—
0.5
(0.21)
—
0.4
(0.10)
—
0.3
(0.21)
Diluted:
$ 476.4
34.2 $ 13.93
$ 297.1
35.7 $
8.32
$ 1,063.9
39.3
$ 27.07
15.
SHARE-BASED AWARDS
The Company has share-based compensation plans which are described as follows:
2016 Incentive Compensation Plan: The Amended and Restated Matson, Inc. 2016 Incentive Compensation Plan (the
“2016 Plan”) serves as a successor to the 2007 Incentive Compensation Plan and all other predecessor plans. No further
grants were made under the predecessor stock option plans. Under the 2016 Plan, 4.35 million shares of common stock
were reserved for issuance.
The 2016 Plan consists of four separate incentive compensation programs: (i) the discretionary grant program, (ii) the
stock issuance program, (iii) the incentive bonus program, and (iv) the automatic grant program for the non-employee
members of the Company’s Board of Directors. Share-based compensation is generally awarded under three of the four
programs, as more fully described below.
Discretionary Grant Program — Under the Discretionary Grant Program, stock options may be granted with an exercise
price no less than 100 percent of the fair market value (defined as the closing market price) of the Company’s common
stock on the date of the grant. No stock options have been granted under the 2016 Plan.
Stock Issuance Program — Under the Stock Issuance Program, shares of common stock, restricted stock units or
performance shares may be granted. Time-based equity awards generally vest ratably over three years. Provided certain
three-year performance targets are achieved, performance-based equity awards generally vest on the three-year
anniversary date of the grant.
Automatic Grant Program — At each annual shareholder meeting, non-employee directors will receive an award of
restricted stock units that entitle the holder to an equivalent number of shares of common stock upon vesting, under the
Automatic Grant Program. Awards of restricted stock units granted under the program generally vest on the one-year
anniversary of the grant date.
The shares of common stock authorized to be issued under the 2016 Plan may be drawn from shares of the Company’s
authorized but unissued common stock or from shares of its common stock that the Company acquires, including shares
purchased on the open market or in private transactions.
Share-based compensation expense and other information related to share-based awards for the years ended
December 31, 2024, 2023 and 2022 are as follows:
Years Ended December 31,
Share-based compensation expense, net of estimated forfeitures (in millions)
2024
2023
2022
Share-based compensation expense
$ 26.5
$ 23.8
$ 18.3
Tax benefit realized upon stock vesting
$ 5.6
$ 6.1
$ 10.6
Fair value of stock vested
$ 25.6
$ 27.8
$ 44.0
75
As of December 31, 2024, unrecognized compensation cost related to non-vested restricted stock units and performance-
based equity awards was $24.5 million. Unrecognized compensation cost is expected to be recognized over a weighted
average period of approximately 1.7 years.
The following table summarizes non-vested restricted stock unit activity through December 31, 2024 (in thousands,
except weighted average grant-date fair value amounts):
2016 Plan
Weighted
Restricted
Average Grant-
Stock Units
Date Fair Value
Outstanding at December 31, 2023
533 $
75.82
Granted
153
$
122.23
Vested
(352)
$
72.71
Canceled
(5)
$
85.27
Added by performance factor (1)
119
$
122.35
Outstanding at December 31, 2024
448 $
93.83
(1)
Represents shares paid out above target.
16.
FAIR VALUE OF FINANCIAL INSTRUMENTS
The Company values its financial instruments based on the fair value hierarchy of valuation techniques for fair value
measurements. Level 1 inputs are unadjusted, quoted prices in active markets for identical assets or liabilities at the
measurement date. Level 2 inputs include quoted prices for similar assets and liabilities in active markets and inputs
other than quoted prices observable for the asset or liability. Level 3 inputs are unobservable inputs for the asset or
liability. If the technique used to measure fair value includes inputs from multiple levels of the fair value hierarchy, the
lowest level of significant input determines the placement of the entire fair value measurement in the hierarchy.
The Company uses Level 1 inputs for the fair values of its cash and cash equivalents, restricted cash and cash on deposit,
and investments in the CCF, and Level 2 inputs for its fixed rate debt. The fair values of cash and cash equivalents,
restricted cash and cash on deposit in the CCF 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 consists of the following as of December 31,
2024 and 2023:
Quoted Prices in
Significant
Significant
Total
Active Markets
Observable
Unobservable
Carrying Value Total
(Level 1)
Inputs (Level 2) Inputs (Level 3)
(In millions)
December 31, 2024
Fair Value Measurements at December 31, 2024
Cash and cash equivalents
$
266.8 $
266.8 $
266.8 $
— $
—
Restricted cash
$
— $
— $
— $
— $
—
CCF - Cash and cash equivalent
$
230.7 $
230.7 $
230.7 $
— $
—
CCF - Investments
$
411.9 $
412.5 $
412.5 $
— $
—
Fixed rate debt
$
400.9 $
317.7 $
— $
317.7 $
—
(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 $
—
76
17.
COMMITMENTS AND CONTINGENCIES
Commitments: Commitments and contractual obligations, excluding debt obligations (see Note 8), lease commitments
(see Note 9), pension and post-retirement plan obligations (see Note 11), and multi-employer withdrawal liabilities (see
Note 12), are as follows as of December 31, 2024:
Commitments and Contractual Obligations (in millions)
Total
Standby letters of credit (1)
$
6.1
Bonds (2)
$
65.1
Vessel construction obligations (3)
$
814.0
Vendor and other obligations (4)
$
214.6
(1)
Standby letters of credit are required for the Company’s uninsured workers’ compensation and other insurance programs, and other needs.
(2)
Bonds are required for U.S. Customs and other related matters.
(3)
Vessel construction obligations represent remaining contractual obligations entered into for the construction of three new Jones Act vessels.
(4)
Vendor and other obligations include: (i) non-cancellable contractual capital project obligations; (ii) dry-docking related obligations; and
(iii) other contractual obligations. Amounts are considered obligations if a contract has been agreed to specifying significant terms of the
contract, and the amounts are not reflected in the Consolidated Balance Sheets as of December 31, 2024.
These amounts are not recorded on the Company’s Consolidated Balance Sheet as of December 31, 2024 and it is not
expected that the Company or its subsidiaries will be called upon to advance funds under these commitments and
contractual obligations.
Contingencies: Contingencies and other litigation related matters are described as follows:
Environmental Matters: The Company faces certain risks that could result in material expenditures related to
environmental remediation. The Company believes, that based on all information currently 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.
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE
None.
ITEM 9A. CONTROLS AND PROCEDURES
Conclusion Regarding Effectiveness of Disclosure Controls and Procedures
The Company’s management, with the participation of the Company’s Chief Executive Officer and Chief Financial
Officer, has evaluated the effectiveness of the Company’s disclosure controls and procedures (as such term is defined in
Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended (the “Exchange Act”)) as of the
end of the period covered by this report. Based on such evaluation, the Company’s Chief Executive Officer and Chief
Financial Officer have concluded that, as of the end of such period, the Company’s disclosure controls and procedures
were effective.
Internal Control over Financial Reporting
See page 42 for management’s annual report on internal control over financial reporting, which is incorporated herein by
reference.
See page 43 for the attestation report of the independent registered public accounting firm on the Company’s internal
control over financial reporting, which is incorporated herein by reference.
77
There have not been any changes in the Company’s internal control over financial reporting (as such term is defined in
Rules 13a-15(f) and 15d-15(f) under the Exchange Act) during the Company’s fiscal fourth quarter ended December 31,
2024, that have materially affected, or are reasonably likely to materially affect, the Company’s internal control over
financial reporting.
ITEM 9B. OTHER INFORMATION
Trading Plans: During the quarter ended December 31, 2024, no director or Section 16 officer adopted or terminated
any Rule 10b5-1 trading arrangements or non-Rule 10b5-1 trading arrangements (as defined in Item 408(a) of
Regulation S-K).
ITEM 9C. DISCLOSURE REGARDING FOREIGN JURISDICTIONS THAT PREVENT INSPECTIONS
Not applicable.
PART III
ITEM 10. DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE
A.
Directors
The information about the directors of Matson required under this item will be included under the section captioned
“Election of Directors” in Matson’s Proxy Statement for the 2025 Annual Meeting of Shareholders to be filed with the
SEC within 120 days of the fiscal year ended December 31, 2024 (“Matson’s 2025 Proxy Statement”), which section is
incorporated herein by reference.
B.
Information About Our Executive Officers
The information about the executive officers of Matson required under this item will be included under the subsection
captioned “Executive Officers” in Matson’s 2025 Proxy Statement, which subsection is incorporated herein by
reference.
C.
Corporate Governance
The information about the Audit Committee of the Matson Board of Directors and compliance with Section 16(a) of the
Exchange Act, will be included under the subsections captioned “Board of Directors and Committees of Board” and, if
applicable, “Delinquent Section 16(a) Reports” in Matson’s 2025 Proxy Statement, which subsections are incorporated
herein by reference.
D.
Code of Ethics
The information about Matson’s Code of Ethics required under this item will be included under the subsection captioned
“Code of Ethics” in Matson’s 2025 Proxy Statement, which subsection is incorporated herein by reference.
E.
Insider Trading Policy
The information about Matson’s Insider Trading Policy required under this item will be included under the subsection
captioned “Insider Trading Policy” in Matson’s 2025 Proxy Statement, which subsection is incorporated herein by
reference.
78
ITEM 11. EXECUTIVE COMPENSATION
The information required under this item will be included under the section captioned “Executive Compensation” and
the subsections captioned “Compensation of Directors” and “Pay Risk Assessment” in Matson’s 2025 Proxy Statement,
which section and subsections are incorporated herein by reference.
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
AND RELATED STOCKHOLDER MATTERS
Equity Compensation Plan Information: The following table sets forth, as of December 31, 2024, certain information
regarding Matson’s equity compensation plan:
Number of shares
Number of shares
remaining available for
to be issued
Weighted-average
future issuance under
upon exercise of
exercise price of
equity compensation
outstanding options, outstanding options, plans (excluding shares
Plan Category
warrants and rights warrants and rights reflected in column (a))
(a)
(b)
(c)
Equity compensation plans approved by shareholders
448,079 (1) $
— (2)
1,423,994 (3)
Equity compensation plans not approved by shareholders
—
—
—
Total
448,079
$
—
1,423,994
(1)
This includes 228,135 shares subject to unvested restricted stock unit awards and 219,944 shares subject to unvested Performance Share awards.
(2)
Restricted stock unit and Performance Share awards do not have exercise prices.
(3)
These shares are available for issuance under the 2016 Plan.
Other information required under this item will be included under the section captioned “Security Ownership of Certain
Shareholders” and the subsection captioned “Security Ownership of Directors and Executive Officers” in Matson’s 2025
Proxy Statement, which section and subsection are incorporated herein by reference.
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR
INDEPENDENCE
The information required under this item will be included in the section captioned “Election of Directors” and the
subsection captioned “Certain Relationships and Transactions” in Matson’s 2025 Proxy Statement, which section and
subsection are incorporated herein by reference.
ITEM 14. PRINCIPAL ACCOUNTANT FEES AND SERVICES
The information required under this item will be included under the sections captioned “Audit Committee Report” and
“Ratification of Appointment of Independent Registered Public Accounting Firm” in Matson’s 2025 Proxy Statement,
which sections are incorporated herein by reference.
79
PART IV
ITEM 15. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES
A.
Financial Statements
The Consolidated Financial Statements are set forth in Item 8 of Part II above.
B.
Financial Statement Schedules
All schedules are omitted because of the absence of the conditions under which they are required or because the
information called for is included in the Consolidated Financial Statements or notes thereto.
C.
Exhibits Required by Item 601 of Regulation S-K
Exhibits not filed herewith are incorporated by reference to the exhibit number and previous filing shown in parentheses.
All previous exhibits were filed with the Securities and Exchange Commission in Washington, D.C.
Exhibits filed pursuant to the Securities Exchange Act of 1934 were filed under file number 001-34187. Shareholders
may obtain copies of exhibits for a copying and handling charge of $0.15 per page by writing to Corporate Secretary,
Matson, Inc., 555 12th Street, Oakland, California 94607.
2
Plan of acquisition, reorganization, arrangement, liquidation or succession.
2.1
Agreement and Plan of Merger, dated as of November 11, 2014, by and among Matson Navigation
Company, Inc., Hogan Acquisition Inc. and Horizon Lines, Inc. (incorporated by reference to Exhibit 2.1
of Matson’s Form 8-K dated November 11, 2014).
2.2
Amendment No. 1 to Agreement and Plan of Merger, dated as of February 13, 2015, by and among
Matson Navigation Company, Inc., Hogan Acquisition Inc. and Horizon Lines, Inc. (incorporated by
reference to Exhibit 2.1 of Matson’s Form 8-K dated February 17, 2015).
2.3
Contribution, Assumption and Purchase Agreement, dated as of November 11, 2014, by and among The
Pasha Group, SR Holding LLC, Horizon Lines, Inc. and Sunrise Operations LLC (incorporated by
reference to Exhibit 2.2 of Horizon Lines, Inc.’s Form 8-K dated November 13, 2014).
2.4
Amendment No. 1 to the Contribution, Assumption and Purchase Agreement, dated as of May 29, 2015,
by and among The Pasha Group, SR Holding LLC, Horizon Lines, Inc. and Sunrise Operations LLC
(incorporated by reference to Exhibit 2.2 of Matson’s Form 10-Q for the quarter ended June 30, 2015).
3
Articles of incorporation and bylaws.
3.1
Amended and Restated Articles of Incorporation of Matson, Inc. (incorporated by reference to Exhibit 3.1
of Matson’s Form 10-Q for the quarter ended June 30, 2012).
3.2
Articles of Amendment to Change Corporate Name (incorporated by reference to Exhibit 4.2 of Matson’s
Form S-8 dated October 26, 2012).
3.3
Amended and Restated Bylaws of Matson, Inc. (as amended as of November 6, 2013) (incorporated by
reference to Exhibit 3.1 of Matson’s Form 10-Q for the quarter ended September 30, 2013).
4
Description of Registered Securities (incorporated by reference to Exhibit 4 of Matson’s Form 10-K for
the year ended December 31, 2019).
10
Material contracts.
80
10.1
First Amendment to Credit Agreement among Matson, Inc., Bank of America, N.A., as the Agent, and the
lenders thereto, dated as of February 9, 2023 (incorporated by reference to Exhibit 10.1 of Matson’ s Form
10-K for the year ended December 31, 2022).
10.2
Amendment to Third Amended and Restated Note Purchase Agreement among Matson, Inc. and the
purchasers named therein, dated as of June 29, 2017 (incorporated by reference to Exhibit 10.4 of
Matson’s Form 8-K dated June 30, 2017).
10.3
Amendment to Note Purchase Agreement among Matson, Inc. and the purchasers named therein, dated as
of June 29, 2017 (incorporated by reference to Exhibit 10.5 of Matson’s Form 8-K dated June 30, 2017).
10.4
Note Purchase Agreement among Matson, Inc. and the purchasers party thereto, dated as of December 21,
2016 (incorporated by reference to Exhibit 10.1 of Matson’s Form 8-K dated December 22, 2016).
10.5
Third Amended and Restated Note Purchase and Private Shelf Agreement among Matson, Inc. and the
purchasers party thereto, dated as of September 14, 2016 (incorporated by reference to Exhibit 10.1 of
Matson’s Form 8-K dated September 14, 2016).
10.6
Amendment to Third Amended and Restated Note Purchase and Private Shelf Agreement among Matson,
Inc. and the purchasers named therein, dated as of March 31, 2020 (incorporated by reference to Exhibit
10.4 of Matson’s Form 8-K dated April 6, 2020).
10.7
Amendment to December 21, 2016 Note Purchase Agreement among Matson, Inc. and the purchasers
named therein, dated as of March 31, 2020 (incorporated by reference to Exhibit 10.5 of Matson’s Form
8-K dated April 6, 2020).
10.8
Amended and Restated Limited Liability Company Agreement of SSA Terminals, LLC by and between
SSA Ventures, Inc. and Matson Ventures, Inc., dated as of April 24, 2002 (certain portions of this exhibit
have been omitted pursuant to a confidential treatment request submitted to the Commission)
(incorporated by reference to Exhibit 10.1 of Matson’s Form 10-Q for the quarter ended June 30, 2012).
10.9
Parent Company Agreement, dated as of April 24, 2002, by and among SSA Pacific Terminals, Inc.,
formerly known as Stevedoring Services of America, Inc., SSA Ventures, Inc., Matson Navigation
Company, Inc. and Matson Ventures, Inc. (incorporated by reference to Exhibit 10.2 of Matson’s
Form 10-Q for the quarter ended June 30, 2012).
10.10*
Matson, Inc. Deferred Compensation Plan for Outside Directors (incorporated by reference to
Exhibit 10.34 of Matson’s Form 10-K for the year ended December 31, 2012).
10.11
Consolidated Agreement, Contract No. MA-14454 dated as of April 27, 2020 among Matson Navigation
Company, Inc., the United States of America, represented by the Maritime Administrator of the Maritime
Administration and, with respect to certain provisions, Matson, Inc. (incorporated by reference to Exhibit
10.1 of Matson’s Form 8-K dated April 30, 2020).
10.12
Note Purchase Agreement dated as of April 27, 2020 among Matson Navigation Company, Inc., the
United States of America, represented by the Maritime Administrator of the Maritime Administration and
the Federal Financing Bank (incorporated by reference to Exhibit 10.2 of Matson’s Form 8-K dated
April 30, 2020).
10.13
Affiliate Guaranty dated as of April 27, 2020 executed by Matson, Inc. (incorporated by reference to
Exhibit 10.3 of Matson’s Form 8-K dated April 30, 2020).
10.14
Amendment No. 1 dated June 22, 2020, to Consolidated Agreement, Contract No. MA-14454 dated as of
April 27, 2020 among Matson Navigation Company, Inc., the United States of America, represented by
the Maritime Administrator of the Maritime Administration and, with respect to certain provisions,
Matson, Inc. (incorporated by reference to Exhibit 10.1 of Matson’s Form 8-K dated June 25, 2020).
81
10.15
Note Purchase Agreement dated as of June 22, 2020 among Matson Navigation Company, Inc., the United
States of America, represented by the Maritime Administrator of the Maritime Administration and the
Federal Financing Bank (incorporated by reference to Exhibit 10.2 of Matson’s Form 8-K dated June 25,
2020).
10.16
Amendment dated June 22, 2020 to Affiliate Guaranty dated as of April 27, 2020 executed by
Matson, Inc. and consented to by MARAD (incorporated by reference to Exhibit 10.3 of Matson’s Form
8-K dated June 25, 2020).
10.17*
Matson, Inc. Excess Benefits Plan, amended and restated effective August 27, 2014 (incorporated by
reference to Exhibit 10.1 of Matson’s Form 8-K dated August 28, 2014).
10.18*
Form of Letter Agreement entered into with certain executive officers (incorporated by reference to
Exhibit 10.45 of Matson’s Form 10-K for the year ended December 31, 2012).
10.19*
Schedule identifying executive officers who have entered into Form of Letter Agreement (incorporated by
reference to Exhibit 10.42 of Matson’s Form 10-K for the year ended December 31, 2014).
10.20*
Form of Letter Agreement entered into with executive officer (incorporated by reference to Exhibit 10.1
of Matson’s Form 8-K dated October 24, 2014).
10.21*
Letter Agreement Counter Parties (incorporated by reference to Exhibit 10.23 of Matson’ s Form 10-K for
the year ended December 31, 2022).
10.22*
Amended and Restated Matson, Inc. Executive Severance Plan (incorporated by reference to
Exhibit 10.28 of Matson’s Form 10-K for the year ended December 31, 2020).
10.23*
Matson, Inc. Deferred Compensation Plan (incorporated by reference to Exhibit 10.51 of Matson’s
Form 10-K for the year ended December 31, 2012).
10.24*
Amendment No. 1 to the Matson, Inc. Deferred Compensation Plan (incorporated by reference to
Exhibit 10.30 of Matson’s Form 10-K for the year ended December 31, 2020).
10.25
Form of Capital Construction Fund Agreement with Matson Navigation Company, as amended by
Addendums No. 2, No. 5, No. 18, No. 20, No. 31 and No. 33 thereto (incorporated by reference to Exhibit
10.35 of Matson’s Form 10-K for the year ended December 31, 2021).
10.26
Form of Voting Agreement, dated as of November 11, 2014, among Matson Navigation Company, Inc.
and certain holders of voting securities of Horizon Lines, Inc. (incorporated by reference to Exhibit 10.1
of Matson’s Form 8-K dated November 11, 2014).
10.27*
Amended and Restated Matson, Inc. 2016 Incentive Compensation Plan (incorporated by reference to
Exhibit 99.1 of Matson’s Form S-8 date July 30, 2021).
10.28*
Amended and Restated Matson, Inc. Cash Incentive Plan, effective January 1, 2016 (incorporated by
reference to Exhibit 10.63 of Matson’s Form 10-K for the year ended December 31, 2016).
10.29*
Form of 2016 Plan Restricted Stock Unit Award Agreement for Non-Employee Directors (Deferral
Election) (incorporated by reference to Exhibit 10.65 of Matson’s Form 10-K for the year ended
December 31, 2016).
10.30*
Form of 2016 Plan Performance Share Award Agreement for Executive Employees (ROIC) (incorporated
by reference to Exhibit 10.47 of Matson’s Form 10-K for the year ended December 31, 2020).
10.31*
Form of 2016 Plan Performance Share Award Agreement for Executive Employees (TSR) (incorporated
by reference to Exhibit 10.48 of Matson’s Form 10-K for the year ended December 31, 2020).
82
10.32*
Form of 2016 Plan Performance Share Award Agreement for Non-Executive Employees (incorporated by
reference to Exhibit 10.49 of Matson’s Form 10-K for the year ended December 31, 2020).
10.33*
Form of 2016 Plan Time-Based Restricted Stock Unit Agreement for Executive Employees (incorporated
by reference to Exhibit 10.50 of Matson’s Form 10-K for the year ended December 31, 2020).
10.34*
Form of 2016 Plan Time-Based Restricted Stock Unit Agreement for Non-Executive Employees
(incorporated by reference to Exhibit 10.51 of Matson’s Form 10-K for the year ended December 31,
2020).
10.35*
Form of 2016 Plan Restricted Stock Unit Award Agreement for Non-Employee Directors (No Deferral)
(incorporated by reference to Exhibit 10.52 of Matson’s Form 10-K for the year ended December 31,
2020).
10.36*
Form of 2016 Plan Restricted Stock Unit Award Agreement for Non-Employee Directors (Deferral
Election) (incorporated by reference to Exhibit 10.53 of Matson’s Form 10-K for the year ended
December 31, 2020).
10.37
Amendment to Third Amended and Restated Note Purchase and Private Shelf Agreement, dated as of
March 31, 2021 (incorporated by reference to Exhibit 10.2 of Matson’s Form 8-K dated April 5, 2021).
10.38
Amendment to Note Purchase Agreement dated December 21, 2016, dated as of March 31, 2021
(incorporated by reference to Exhibit 10.3 of Matson’s Form 8-K dated April 5, 2021).
10.39†
Shipbuilding Contract Vessel Type Aloha Class L – Hull No. 040, by and between Philly Shipyard, Inc.
and Matson Navigation Company, Inc., dated as of November 1, 2022 (incorporated by reference to
Exhibit 10.48 of Matson’ s Form 10-K for the year ended December 31, 2022).
10.40†
Shipbuilding Contract Vessel Type Aloha Class L – Hull No. 041, by and between Philly Shipyard, Inc.
and Matson Navigation Company, Inc., dated as of November 1, 2022 (incorporated by reference to
Exhibit 10.49 of Matson’ s Form 10-K for the year ended December 31, 2022).
10.41†
Shipbuilding Contract Vessel Type Aloha Class L – Hull No. 042, by and between Philly Shipyard, Inc.
and Matson Navigation Company, Inc., dated as of November 1, 2022 (incorporated by reference to
Exhibit 10.50 of Matson’ s Form 10-K for the year ended December 31, 2022).
10.42*
Form of 2016 Plan Performance Share Award Agreement for Executive Employees (ROIC) for grants
awarded after January 1, 2023 (incorporated by reference to Exhibit 10.45 of Matson’s Form 10-K for the
year ended December 31, 2023).
10.43*
Form of 2016 Plan Performance Share Award Agreement for Non-Executive Employees (ROIC) for
grants awarded after January 1, 2023 (incorporated by reference to Exhibit 10.46 of Matson’s Form 10-K
for the year ended December 31, 2023).
10.44*
Form of 2016 Plan Performance Share Award Agreement for Executive Employees (TSR) for grants
awarded after January 1, 2024 (incorporated by reference to Exhibit 10.47 of Matson’s Form 10-K for the
year ended December 31, 2023).
10.45*
Form of 2016 Plan Time-Based Restricted Stock Unit Agreement for Executive Employees for grants
awarded after January 1, 2024 (incorporated by reference to Exhibit 10.48 of Matson’s Form 10-K for the
year ended December 31, 2023).
10.46*
Form of 2016 Plan Time-Based Restricted Stock Unit Agreement for Non-Executive Employees for
grants awarded after January 1, 2024 (incorporated by reference to Exhibit 10.49 of Matson’s Form 10-K
for the year ended December 31, 2023).
19**
Matson, Inc. Insider Trading Policy
83
21**
Matson, Inc. Subsidiaries as of December 31, 2024.
23**
Consent of Deloitte & Touche, LLP dated February 28, 2025.
31.1**
Certification of Chief Executive Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
31.2**
Certification of Chief Financial Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
32***
Certifications of Chief Executive Officer and Chief Financial Officer Pursuant to 18 U.S.C. Section 1350,
as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
97
Policy Regarding Recoupment of Certain Compensation (as amended and restated October 26, 2023)
(incorporated by reference to Exhibit 97 of Matson’s Form 10-K for the year ended December 31, 2023).
101.INS**
Inline XBRL Instance Document – the instance document does not appear in the Interactive Data File
because its XBRL tags are embedded within the Inline XBRL document.
101.SCH**
Inline XBRL Taxonomy Extension Schema Document
101.CAL**
Inline XBRL Taxonomy Extension Calculation Linkbase Document
101.DEF**
Inline XBRL Taxonomy Extension Definition Linkbase Document
101.LAB**
Inline XBRL Taxonomy Extension Label Linkbase Document
101.PRE** Inline XBRL Taxonomy Extension Presentation Linkbase Document
104**
Cover Page Interactive Data File – the cover page interactive data file does not appear in the Interactive
Data File because its XBRL tags are embedded within the Inline XBRL document.
* Indicates management contract or compensatory plan or arrangement.
** Filed herewith.
*** Furnished herewith.
† Certain identified information has been excluded from this exhibit pursuant to Item 601(b)(10)(iv) of
Regulation S-K because it is both (i) not material and (ii) the type that the registrant treats as private or
confidential.
ITEM 16. FORM 10-K SUMMARY
None.
84
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly
caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
MATSON, INC.
(Registrant)
Date: February 28, 2025
/s/ Matthew J. Cox
Matthew J. Cox
Chairman and
Chief Executive Officer
Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following
persons on behalf of the registrant in the capacities and on the dates indicated.
Signature
Title
Date
/s/ Matthew J. Cox
Chairman and Chief Executive Officer
February 28, 2025
Matthew J. Cox
(principal executive officer)
/s/ Meredith J. Ching
Director
February 28, 2025
Meredith J. Ching
/s/ Mark H. Fukunaga
Director
February 28, 2025
Mark H. Fukunaga
/s/ Stanley M. Kuriyama
Director
February 28, 2025
Stanley M. Kuriyama
/s/ Constance H. Lau
Director
February 28, 2025
Constance H. Lau
/s/ Bradley D. Tilden
Director
February 28, 2025
Bradley D. Tilden
/s/ Jenai S. Wall
Director
February 28, 2025
Jenai S. Wall
/s/ Joel M. Wine
Executive Vice President and Chief Financial Officer
February 28, 2025
Joel M. Wine
(principal financial officer)
/s/ Kevin L. Stuck
Vice President and Controller
February 28, 2025
Kevin L. Stuck
(principal accounting officer)
*****
INVESTOR INFORMATION
Corporate news releases, SEC filings, the company’s annual report and other
pertinent information about the company are available at www.matson.com.
Shareholders and institutional investors with questions about the company may
correspond with Investor Relations at investor-relations@matson.com.
DESIGN & PHOTOGRAPHY John McNeil Studio, CA | ADDITIONAL PHOTOGRAPHY Tim Rue, CA | PRINTED IN CALIFORNIA by Sprinkel Media
FORWARD-LOOKING STATEMENTS
Statements in this Annual Report that are not historical facts are “forward-looking statements,”
within the meaning of the Private Securities Litigation Reform Act of 1995, including without
limitation those statements regarding performance and fi nancial results, net income, EBITDA,
cash fl ows, capital allocation strategy, rates, demand for our China service, conversion of air
freight to ocean transportation, cost savings of expedited ocean services versus air freight, our
ability to grow our businesses, evolution of the retail customer buying experience and sales
growth, the new-build program including delivery dates for new vessels, refl eeting initiatives,
vessel and tradelane capacity, vessel speeds, acquisitions, dividends, execution of our share
repurchase program, and maintaining investment-grade metrics. These statements involve
a number of risks and uncertainties that could cause actual results to diff er materially from
those contemplated by the relevant forward-looking statement, including but not limited to
risks and uncertainties relating to repeal, substantial amendment, or waiver of the Jones Act or
changes in its application, or the company were determined not to be a United States citizen
under the Jones Act; changes in macroeconomic conditions, geopolitical developments, or
governmental policies; our ability to off er a diff erentiated service in China for which customers
are willing to pay a signifi cant premium; new or increased competition; loss or damage to
key customer relationships; agreements with key vendors and third parties; fuel prices, our
ability to collect fuel-related surcharges and/or the cost or limited availability of required fuels;
evolving regulations and stakeholder expectations related to sustainability matters; timely
or successful completion of fl eet upgrade initiatives; the company’s vessel construction
agreements with Philly Shipyard; the occurrence of weather, natural disasters, maritime
accidents, spill events, and other physical and operating risks; transitional and other risks
arising from climate change; actual or threatened health epidemics, outbreaks of disease,
pandemics, or other major health crises; signifi cant operating agreements and leases that
may not be renewed/replaced on favorable or acceptable terms, if at all; any unanticipated
dry-docking or repair costs for our vessels; joint venture relationships; conducting business
in foreign markets; modernization of terminals in Hawaii and Alaska; heightened security
measures, war, actual or threatened terrorist attacks, eff orts to combat terrorism and other
acts of violence; consummating and integrating acquisitions; work stoppages or other labor
disruptions caused by our unionized workers and other workers or their unions in related
industries; loss of key personnel or failure to adequately manage human capital; the use of
our information technology and communication systems; cybersecurity attacks; our ability
to access the debt capital markets or increases in the cost of debt; changes in the value
of pension assets; exposure under multi-employer pension and post-retirement plans;
continuation of the Title XI and CCF programs; costs to comply with and liability related to
numerous safety, environmental, and other laws and regulations; and disputes, legal and other
proceedings, and government inquiries or investigations. These forward-looking statements
are not guarantees of future performance. This Annual Report should be read in conjunction
with our Annual Report on Form 10-K and our other fi lings with the SEC through the date of
this report, which identify important factors that could aff ect the forward-looking statements in
this release. We do not undertake any obligation to update our forward-looking statements.
NON-GAAP MEASURES
Matson reports fi nancial results in accordance with U.S. generally accepted accounting
principles (“GAAP”). The company also considers other non-GAAP measures to evaluate
performance, make day-to-day operating decisions, help investors understand our ability to
incur and service debt and to make capital expenditures, and to understand period-over-
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AUDITORS | Deloitte & Touche LLP, Honolulu, HI
period operating results separate and apart from items that may, or could, have a disproportional
positive or negative impact on results in any particular period. These non-GAAP measures include but
are not limited to net debt, earnings before interest, income taxes, depreciation and amortization
(“EBITDA”), return on invested capital (“ROIC”), and return on equity (“ROE”).
Note: Total debt is presented before any reduction for deferred loan fees as required by GAAP.
1. The eff ective tax rates each year in the period 2020-2024 were 25.4%, 20.8%, 21.3%, 20.3%, and 20.5% respectively.
For the years ended December 31
($ in millions, except ROIC and ROE)
2024
2023
2022
2021
2020
Total debt
400.9
440.6
517.5
629.0
760.1
Less: total cash and cash equivalents
(266.8)
(134.0)
(249.8)
(282.4)
(14.4)
Net debt
134.1
306.6
267.7
346.6
745.7
Net income
476.4
297.1
1,063.9
927.4
193.1
Add: income taxes
123.0
75.9
288.4
243.9
65.9
Subtract: interest income
(48.3)
(36.0)
(8.2)
—
—
Add: interest expense
7.5
12.2
18.0
22.6
27.4
Add: depreciation and amortization
180.3
167.5
164.1
156.4
137.3
EBITDA
738.9
516.7
1,526.2
1,350.3
423.7
Net income (A)
476.4
297.1
1,063.9
927.4
193.1
Subtract: interest income (tax-effected)1
(38.4)
(28.7)
(6.5)
—
—
Add: interest expense (tax-effected)1
6.0
9.7
14.2
17.9
20.4
Total return (B)
444.0
278.1
1,071.6
945.3
213.5
Average total debt
420.8
479.1
573.3
694.6
859.3
Average shareholders' equity (C)
2,526.4
2,348.8
1,982.2
1,314.3
883.5
Total invested capital (D)
2,947.2
2,827.9
2,555.5
2,008.9
1,742.8
ROIC = (B)/(D)
15.1%
9.8%
41.9%
47.1%
12.3%
ROE = (A)/(C)
18.9%
12.6%
53.7%
70.6%
21.9%