Item 2. Management’s Discussion and Analysis
ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
The following discussion and analysis should be read in conjunction with the Condensed Consolidated Financial Statements and related notes, and other financial information appearing elsewhere in this Quarterly Report on Form 10-Q.
FORWARD-LOOKING STATEMENTS
Except for historical information, the statements made in this Quarterly Report on Form 10-Q are forward-looking statements made pursuant to the safe-harbor provisions of the Private Security Litigation Reform Act of 1995. Such forward-looking statements may be contained in, among other things, SEC filings, such as reports on Forms 10-K, 10-Q and 8-K, the Annual Report to Shareholders, 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.
This report, and other statements that the Company may make, may contain forward-looking statements with respect to the Company’s future financial or business performance, strategies or expectations. Forward-looking statements are typically identified by words or phrases such as “trend,” “potential,” “opportunity,” “pipeline,” “believe,” “comfortable,” “expect,” “anticipate,” “current,” “intention,” “estimate,” “position,” “assume,” “outlook,” “continue,” “remain,” “maintain,” “sustain,” “seek,” “achieve,” or similar expressions, or future or conditional verbs such as “will,” “would,” “should,” “could,” “may” or similar expressions.
The Company cautions that forward-looking statements are subject to numerous assumptions, risks and uncertainties, which change over time, including, but not limited to, the risk factors that are described in Part I, Item 1A, “Risk Factors” of Matson’s Annual Report on Form 10-K for the year ended December 31, 2020. Forward-looking statements speak only as of the date they are made, and the Company assumes no duty to and does not undertake any obligation to update forward-looking statements. Actual results could differ materially from those anticipated in forward-looking statements and future results could differ materially from historical performance.
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 will assist in understanding the changes in the Company’s financial statements from period to period, the primary factors that accounted for those changes, and how certain accounting principles, policies and estimates affect the Company’s financial statements. MD&A is provided as a supplement to the Condensed Consolidated Financial Statements and notes herein, and should be read in conjunction with the Company’s Annual Report on Form 10-K for the year ended December 31, 2020 , the Company’s reports on Forms 10-Q and 8-K, and other publicly available information.
SECOND QUARTER 2021 DISCUSSION AND UPDATE ON BUSINESS CONDITIONS
Ocean Transportation: The Company’s container volume in the Hawaii service in the second quarter 2021 was 9.9 percent higher year-over-year. The increase was primarily due to higher retail and hospitality-related demand due to the reopening of the Hawaii economy compared to the pandemic low in the year ago period, partially offset by volume associated with the dry-docking of a competitor’s vessel in the year ago period. Domestic visitor travel to the state accelerated since the beginning of the year and the local economy continued to reopen with COVID-19 vaccinations, leading to a sharp rebound in Hawaii’s tourism industry and economy. The economic recovery in the state is on a cautiously optimistic trajectory due to improving tourism and unemployment trends.
In China, the Company’s container volume in the second quarter 2021 increased 59.1 percent year-over-year. The increase was primarily due to incremental volume from the CLX+ service in addition to higher volume in the CLX service as a result of our increased capacity in the tradelane. The total number of eastbound voyages in the China service increased by nine year-over-year of which six were from incremental CLX+ voyages and three from extra loaders. Volume demand in the quarter was driven by e-commerce, garments and other goods. Matson continued to realize a significant rate premium in the second quarter 2021 and achieved average freight rates that were considerably
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higher than in the year ago period . Currently in the Transpacific tradelane, supply chain congestion continues, and consumption trends remain elevated. We expect these conditions to remain in place and lead to a high level of demand at least until Lunar New Year in the first quarter of 2022. As a result of the exceptional level of demand for our expedited Transpacific services, Matson recently announced the initiation of our CCX service as a seasonal string with Matson-owned vessels from China to the U.S. West Coast with Oakland as the first call. Consequently, we expect our vessels in the CLX, CLX+ and CCX services to be operating at capacity at least until Lunar New Year next year.
In Guam, the Company’s container volume in the second quarter 2021 increased 35.7 percent year-over-year primarily due to higher retail-related demand compared to the pandemic low in the year ago period as well as volume attributable to a competitor’s schedule issues. The economic recovery trajectory in Guam remains uncertain as the economy recovers slowly and tourism remains constrained.
In Alaska, the Company’s container volume for the second quarter 2021 increased 15.2 percent year-over-year due to higher northbound volume primarily due to (i) higher retail-related demand compared to the pandemic low in the year ago period, (ii) higher southbound volume and (iii) the addition of volume from the Alaska-Asia Express service, partially offset by one less northbound sailing. In the near-term, we expect improving economic trends in Alaska, but the recovery’s trajectory continues to remain uncertain.
The contribution in the second quarter 2021 from the Company’s SSAT joint venture investment was $12.8 million, or $9.1 million higher than the second quarter 2020. The increase was driven by higher lift volume.
Logistics: In the second quarter 2021, operating income for the Company’s Logistics segment was $12.9 million, or $4.0 million higher compared to the pandemic low operating income achieved in the second quarter 2020. The increase was due primarily to higher contributions from transportation brokerage, freight forwarding and supply chain management as a result of elevated goods consumption and inventory restocking in addition to favorable supply and demand fundamentals in our core markets.
CONSOLIDATED RESULTS OF OPERATIONS
Consolidated Results - Three months ended June 30, 2021, compared with 2020:
Three Months Ended June 30,
(Dollars in millions, except per share amounts)
2021
2020
Change
Operating revenue
$
874.9
$
524.1
$
350.8
66.9
%
Operating costs and expenses
(661.0)
(472.9)
(188.1)
39.8
%
Operating income
213.9
51.2
162.7
317.8
%
Interest expense
(5.5)
(8.2)
2.7
(32.9)
%
Other income (expense), net
1.5
1.5
—
0.0
%
Income before income taxes
209.9
44.5
165.4
371.7
%
Income taxes
(47.4)
(11.7)
(35.7)
305.1
%
Net income
$
162.5
$
32.8
$
129.7
395.4
%
Basic earnings per share
$
3.74
$
0.76
$
2.98
392.1
%
Diluted earnings per share
$
3.71
$
0.76
$
2.95
388.2
%
Changes in operating revenue, and operating costs and expenses are further described below in the Analysis of Operating Revenue and Income by Segment.
The decrease in interest expense for the three months ended June 30, 2021, compared to the three months ended June 30, 2020, was due to lower outstanding debt during the period.
Other income (expense) relates to the amortization of certain components of net periodic benefit costs or gains related to the Company’s pension and post-retirement plans.
Income tax expense was $47.4 million or 22.6 percent of income before income taxes for the three months ended June 30, 2021, compared to $11.7 million or 26.3 percent of income before income taxes for the three months ended June 30, 2020. The effective tax rate for the three months ended June 30, 2021 was lower than the effective tax rate for the three months ended June 30, 2020 as it benefitted from discrete adjustments related to the valuation allowance
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against the Company’s foreign income tax net operating losses and stock compensation that lowered the effective tax rate for that period.
Consolidated Results - Six months ended June 30, 2021, compared with 2020:
Six Months Ended June 30,
(Dollars in millions, except per share amounts)
2021
2020
Change
Operating revenue
$
1,586.7
$
1,038.0
$
548.7
52.9
%
Operating costs and expenses
(1,252.6)
(973.8)
(278.8)
28.6
%
Operating income
334.1
64.2
269.9
420.4
%
Interest expense
(12.8)
(16.8)
4.0
(23.8)
%
Other income (expense), net
2.9
2.1
0.8
38.1
%
Income before income taxes
324.2
49.5
274.7
554.9
%
Income taxes
(74.5)
(12.9)
(61.6)
477.5
%
Net income
$
249.7
$
36.6
$
213.1
582.2
%
Basic earnings per share
$
5.75
$
0.85
$
4.90
576.5
%
Diluted earnings per share
$
5.70
$
0.85
$
4.85
570.6
%
Changes in operating revenue, and operating costs and expenses are further described below in the Analysis of Operating Revenue and Income by Segment.
The decrease in interest expense for the six months ended June 30, 2021, compared to the six months ended June 30, 2020, was due to a lower outstanding debt during the period.
Other income (expense) 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 adjustments related to the Company’s pension and post-retirement plan liabilities during the six months ended June 30, 2021.
Income tax expense was $74.5 million or 23.0 percent of income before income taxes for the six months ended June 30, 2021, compared to $12.9 million or 26.1 percent of income before income taxes for the six months ended June 30, 2020. The effective tax rate for the six months ended June 30, 2021 was lower than the effective tax rate for the six months ended June 30, 2020 as it benefitted from discrete adjustments related to the valuation allowance against the Company’s foreign income tax net operating losses and stock compensation that lowered the effective tax rate for that period.
ANALYSIS OF OPERATING REVENUE AND INCOME BY SEGMENT
Ocean Transportation Operating Results - Three months ended June 30, 2021, compared with 2020:
Three Months Ended June 30,
(Dollars in millions)
2021
2020
Change
Ocean Transportation revenue
$
682.9
$
410.8
$
272.1
66.2
%
Operating costs and expenses
(481.9)
(368.5)
(113.4)
30.8
%
Operating income
$
201.0
$
42.3
$
158.7
375.2
%
Operating income margin
29.4
%
10.3
%
Volume (Forty-foot equivalent units (FEU), except for automobiles) (1)
Hawaii containers
39,800
36,200
3,600
9.9
%
Hawaii automobiles
12,700
8,200
4,500
54.9
%
Alaska containers
19,700
17,100
2,600
15.2
%
China containers
43,600
27,400
16,200
59.1
%
Guam containers
5,700
4,200
1,500
35.7
%
Other containers (2)
5,200
3,900
1,300
33.3
%
(1) Approximate volumes 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.
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Ocean Transportation revenue increased $272.1 million, or 66.2 percent, during the three months ended June 30, 2021, compared with the three months ended June 30, 2020. The increase was primarily due to higher revenue in China and Hawaii, higher fuel-related surcharge revenue and higher revenue in Alaska and Guam.
On a year-over-year FEU basis, Hawaii container volume increased 9.9 percent primarily due to higher retail and hospitality-related demand due to the reopening of the Hawaii economy compared to the pandemic low in the year ago period as a result of the state’s COVID-19 mitigation efforts, including restrictions on tourism, partially offset by volume associated with the dry-docking of a competitor’s vessel in the year ago period; Alaska volume increased 15.2 percent due to higher northbound volume primarily due to higher retail-related demand compared to the pandemic low in the year ago period as a result of the state’s COVID-19 mitigation efforts, higher southbound volume and the addition of volume from the Alaska-Asia Express service, partially offset by one less northbound sailing; China volume was 59.1 percent higher primarily due to incremental volume from the CLX+ service in addition to higher volume in the CLX service as a result of our increased capacity in the tradelane; Guam volume was 35.7 percent higher primarily due to higher retail-related demand compared to the pandemic low in the year ago period as a result of the island’s COVID-19 mitigation measures as well as volume attributable to a competitor’s schedule issues; and Other containers volume increased 33.3 percent primarily due to higher volume in Okinawa.
Ocean Transportation operating income increased $158.7 million during the three months ended June 30, 2021, compared with the three months ended June 30, 2020. The increase was primarily due to higher contributions from the China and Hawaii services and SSAT, partially offset by higher vessel operating costs, higher terminal handling costs and higher depreciation.
The Company’s SSAT terminal joint venture investment contributed $12.8 million during the three months ended June 30, 2021, compared to a contribution of $3.7 million during the three months ended June 30, 2020. The increase was driven by higher lift volume.
Ocean Transportation Operating Results - Six months ended June 30, 2021, compared with 2020:
Six Months Ended June 30,
(Dollars in millions)
2021
2020
Change
Ocean Transportation revenue
$
1,243.4
$
811.7
$
431.7
53.2
%
Operating costs and expenses
(928.3)
(761.5)
(166.8)
21.9
%
Operating income
$
315.1
$
50.2
$
264.9
527.7
%
Operating income margin
25.3
%
6.2
%
Volume (Forty-foot equivalent units (FEU), except for automobiles) (1)
Hawaii containers
75,500
71,700
3,800
5.3
%
Hawaii automobiles
23,400
21,500
1,900
8.8
%
Alaska containers
37,000
35,300
1,700
4.8
%
China containers
84,700
40,300
44,400
110.2
%
Guam containers
10,700
9,100
1,600
17.6
%
Other containers (2)
9,200
8,000
1,200
15.0
%
(1) Approximate volumes 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 $431.7 million, or 53.2 percent, during the six months ended June 30, 2021, compared with the six months ended June 30, 2020. The increase was primarily due to higher revenue in China, Hawaii and Guam.
On a year-over-year FEU basis, Hawaii container volume increased 5.3 percent primarily due to higher retail and hospitality-related demand due to the reopening of the Hawaii economy compared to the negatively impacted volume in the year ago period as a result of the pandemic and the state’s COVID-19 mitigation efforts, partially offset by volume associated with the dry-docking of a competitor’s vessel in the second quarter of last year; Alaska volume increased by 4.8 percent due to higher northbound volume primarily due to higher retail-related demand compared to the negatively impacted volume in the year ago period as a result of the pandemic and the state’s COVID-19 mitigation efforts, higher southbound volume and the addition of volume from the Alaska-Asia Express service, partially offset by two less northbound sailings; China volume was 110.2 percent higher primarily due to incremental volume from the CLX+
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service in addition to higher volume on the CLX service as a result of increased capacity in the tradelane; Guam volume was 17.6 percent higher primarily due to higher retail-related demand compared to the negatively impacted volume in the year ago period as a result of the pandemic and the island’s COVID-19 mitigation measures as well as volume attributable to a competitor’s schedule issues; and Other container volume increased 15.0 percent primarily due to higher volume in Okinawa.
Ocean Transportation operating income increased $264.9 million during the six months ended June 30, 2021, compared with the six months ended June 30, 2020. The increase was primarily due to higher contributions from the China and Hawaii services and SSAT, partially offset by higher vessel operating costs, higher terminal handling costs and higher depreciation.
The Company’s SSAT terminal joint venture investment contributed $22.0 million during the six months ended June 30, 2021, compared to a contribution of $7.7 million during the six months ended June 30, 2020. The increase was largely attributable to higher lift volume.
Logistics Operating Results: Three months ended June 30, 2021, compared with 2020:
Three Months Ended June 30,
(Dollars in millions)
2021
2020
Change
Logistics revenue
$
192.0
$
113.3
$
78.7
69.5
%
Operating costs and expenses
(179.1)
(104.4)
(74.7)
71.6
%
Operating income
$
12.9
$
8.9
$
4.0
44.9
%
Operating income margin
6.7
%
7.9
%
Logistics revenue increased $78.7 million, or 69.5 percent, during the three months ended June 30, 2021, compared with the three months ended June 30, 2020. The increase was primarily due to higher transportation brokerage revenue.
Logistics operating income increased $4.0 million, or 44.9 percent, for the three months ended June 30, 2021, compared with the three months ended June 30, 2020. The increase was primarily due to higher contributions from transportation brokerage, freight forwarding and supply chain management.
Logistics Operating Results: Six months ended June 30, 2021, compared with 2020:
Six Months Ended June 30,
(Dollars in millions)
2021
2020
Change
Logistics revenue
$
343.3
$
226.3
$
117.0
51.7
%
Operating costs and expenses
(324.3)
(212.3)
(112.0)
52.8
%
Operating income
$
19.0
$
14.0
$
5.0
35.7
%
Operating income margin
5.5
%
6.2
%
Logistics revenue increased $117.0 million, or 51.7 percent, during the six months ended June 30, 2021, compared with the six months ended June 30, 2020. The increase was primarily due to higher transportation brokerage revenue.
Logistics operating income increased $5.0 million, or 35.7 percent, for the six months ended June 30, 2021, compared with the six months ended June 30, 2020. The increase was due primarily to higher contributions from transportation brokerage, freight forwarding and supply chain management.
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LIQUIDITY AND CAPITAL RESOURCES
Sources of liquidity available to the Company as of June 30, 2021, compared to December 31, 2020 were as follows:
Cash, Cash Equivalents, Restricted Cash and Accounts Receivable: Cash and cash equivalents, restricted cash and accounts receivable as of June 30, 2021, compared to December 31, 2020 were as follows:
June 30,
December 31,
(In millions)
2021
2020
Change
Cash and cash equivalents
$
17.4
$
14.4
$
3.0
Restricted cash
$
5.3
$
5.3
$
—
Accounts receivable, net (1)
$
313.6
$
253.4
$
60.2
(1) As of June 30, 2021 and December 31, 2020, $1.7 million of eligible accounts receivable were assigned to the CCF.
Changes in the Company’s cash, cash equivalents and restricted cash for the six months ended June 30, 2021, compared to the six months ended June 30, 2020 were as follows:
Six Months Ended June 30,
(In millions)
2021
2020
Change
Net cash provided by operating activities (1)
$
238.8
$
140.6
$
98.2
Net cash used in investing activities (2)
(99.6)
(35.1)
(64.5)
Net cash used in financing activities (3)
(136.2)
(111.4)
(24.8)
Net increase (decrease) in cash, cash equivalents and restricted cash
3.0
(5.9)
8.9
Cash, cash equivalents and restricted cash, beginning of the period
19.7
28.4
(8.7)
Cash, cash equivalents and restricted cash, end of the period
$
22.7
$
22.5
$
0.2
(1) Change in net cash provided by operating activities:
Changes in net cash provided by operating activities for the six months ended June 30, 2021, compared to the six months ended June 30, 2020, were due to the following:
(In millions)
Change
Net income
$
213.1
Amortization of operating lease right of use assets
13.6
Depreciation and amortization
12.3
Non-cash deferred income taxes
3.8
Other non-cash related changes, net
1.9
Income and distributions from SSAT, net
(1.1)
Accounts receivable, net
(50.9)
Prepaid expenses and other assets
(63.9)
Accounts payable, accruals and other liabilities
(10.3)
Operating lease liabilities
(11.1)
Deferred dry-docking payments
(9.8)
Deferred dry-docking amortization
0.8
Other long-term liabilities
(0.2)
Total
$
98.2
Income and cash distributions from SSAT was $22.0 million and $21.0 million for the six months ended June 30, 2021, respectively, compared to $7.7 million and $7.8 million for the six months ended June 30, 2020. The change in income and cash distributions was due to greater levels of operating profits generated by SSAT during the six months ended June 30, 2021 as compared to the same prior year period. Changes in accounts receivable were primarily due to increased levels of revenues, and the timing of collections associated with those receivables. Changes in prepaid expenses and other assets were primarily due to increased prepaid fuel and other operating related costs, and prepaid income taxes, primarily due to increased levels of operations for the six months ended June 30, 2021, as compared to the same prior year period. Changes in accounts payable, accruals and other liabilities were primarily due to increased level of operating costs and the timing of payments associated with those liabilities. Deferred dry-docking payments for the six months ended June 30, 2021 were $17.4 million, compared to $7.6 million for the six months ended June 30, 2020.
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The increase in deferred dry-docking payments was due to an increase in dry-dock related activity during the six months ended June 30, 2021 as compared to the same prior year period.
(2) Change in net cash used in investing activities:
Changes in net cash used in investing activities for the six months ended June 30, 2021, compared to the six months ended June 30, 2020, were due to the following:
(In millions)
Change
Cash deposits into CCF
$
65.9
Withdrawals from CCF
(65.9)
Other capital expenditures
(67.3)
Capitalized vessel construction expenditures
16.5
Proceeds from disposal of property and equipment, net
(13.7)
Total
$
(64.5)
Capitalized vessel construction expenditures (including capitalized interest) were $16.5 million for the six months ended June 30, 2020. There were no capitalized vessel construction expenditures during the six months ended June 30, 2021 due to the completion of the Company’s fleet renewal program in 2020. Changes in cash deposits into CCF and withdrawals from CCF primarily relate to the timing of when deposits are made into the CCF, and when the subsequent withdrawals are made out of the CCF for the purposes of vessel construction progress payments. Other capital expenditures payments were $101.3 million for the six months ended June 30, 2021, compared to $34.0 million for the six months ended June 30, 2020. During the six months ended June 30, 2021, the Company increased its acquisition of containers, chassis and other terminal equipment, as compared to the same prior year period. The increase in capital expenditure payments was also due to the timing of certain capital project activities incurred during 2021 as compared to 2020. The decrease in proceeds from disposal of property and equipment was primarily due to the sale and leaseback of chassis and container equipment for net proceeds of $14.3 million during the six months ended June 30, 2020. There were no sale and leaseback transactions during the six months ended June 30, 2021.
(3) Change in net cash used in financing activities:
Changes in net cash used in financing activities for the six months ended June 30, 2021, compared to the six months ended June 30, 2020, were due to the following:
(In millions)
Change
Proceeds received from issuance of fixed interest debt
$
(325.5)
Repayments of fixed interest debt
166.0
Repayments and borrowings under revolving credit facility, net
129.3
Payment of financing costs
15.5
Tax withholding related to net share settlements of restricted stock units
(8.9)
Dividends paid
(1.1)
Change in other payments, net
(0.1)
Total
$
(24.8)
During the six months ended June 30, 2021, the Company paid $26.8 million in fixed debt payments, compared to $192.8 million during the six months ended June 30, 2020. During the six months ended June 30, 2021, the Company decreased net borrowings under the revolving credit facility by $71.8 million, compared to a $201.1 million decrease during the six months ended June 30, 2020. During the six months ended June 30, 2021, the Company paid $3.0 million in financing costs, compared to $18.5 million paid during the six months ended June 30, 2020, related to amendments of its revolving credit facility, private placement term loans and Title XI debt. During the six months ended June 30, 2021, the Company paid $14.4 million in taxes related to vested restricted stock units, compared to $5.5 million for the six months ended June 30, 2020. The increase in taxes was primarily due to the increase of the Company’s stock price as of the vesting date of the restricted stock units. During the six months ended June 30, 2021, the Company paid $20.2 million in dividends, compared to $19.1 million during the six months ended June 30, 2020. The increase in dividend payments resulted from an increase in dividends declared per share of common stock by the Company.
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Debt: Total Debt as of June 30, 2021 and December 31, 2020 is as follows:
June 30,
December 31,
(In millions)
2021
2020
Change
Revolving credit facility
$
—
$
71.8
$
(71.8)
Fixed interest debt
661.5
688.3
(26.8)
Total Debt
$
661.5
$
760.1
$
(98.6)
Total Debt decreased by $98.6 million during the six months ended June 30, 2021. The decrease in the Company’s outstanding revolving credit borrowings was primarily due to the increase in net cash provided by operating activities during that same period. The decrease in fixed interest debt was due to the scheduled repayments of private placement term loans and Title XI debt during the six months ended June 30, 2021.
As of June 30, 2021, the Company had $641.9 million of remaining borrowing availability under the revolving credit facility, with a maturity date of March 31, 2026. The Company’s debt is described in Note 6 of Part I, Item 1 above.
Working Capital: The Company had a working capital deficit of $129.6 million and $205.6 million at June 30, 2021 and December 31, 2020, respectively. The Company manages its working capital needs through the use of borrowings on its revolving credit facility which can be received on short notice. The decrease in working capital deficit at June 30, 2021 is primarily due to the increase in revenues generated during the six months ended June 30, 2021, compared to the six months ended June 30, 2020. Working capital is also impacted by the timing of collections associated with accounts receivable and other assets, and the timing of payments associated with accounts payable, accruals, income taxes and other liabilities.
CONTRACTUAL OBLIGATIONS, COMMITMENTS, CONTINGENCIES AND OFF-BALANCE SHEET ARRANGEMENTS
Except as described below, there were no material changes during this quarter to the Company’s contractual obligations, commitments, contingencies and off-balance sheet arrangements that are described in Part II, Item 7 of the Company’s Annual Report on Form 10-K for the year ended December 31, 2020 , which is incorporated herein by reference.
The Company’s debt is described in Note 6 to the Condensed Consolidated Financial Statements included in the Company’s Quarterly Report on Form 10-Q for the three months ended March 31, 2021 , which is incorporated herein by reference.
On July 7, 2021, the Company terminated a Bareboat Charter Operating Lease agreement as described in Note 7 of Part I, Item 1 above.
CRITICAL ACCOUNTING ESTIMATES
There have been no changes during this quarter to the Company’s critical accounting estimates as discussed in Part II, Item 7 of the Company’s Annual Report on Form 10-K for the year ended December 31, 2020.
OTHER MATTERS
The Company’s second quarter 2021 cash dividend of $0.23 per share was paid on June 3, 2021. On June 24, 2021, the Company’s Board of Directors declared a cash dividend of $0.30 per share payable on September 2, 2021.
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
There have been no material changes to the Company’s market risk position from the information provided under Part II, Item 7A, “Quantitative and Qualitative Disclosures About Market Risk,” of our Annual Report on Form 10-K for the year ended December 31, 2020.
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