What changed in this filing

/stocks — the workspaceLOADING

Item 1. Financial Statements

2024-05-01 compared with 2023-10-31 · 153 added, 186 removed, 367 unchanged (48% of the section changed)

3 unchanged sentences

Three Months Ended

Nine Months Ended

September 30,

(In millions, except per share amounts)

24 unchanged sentences

Condensed Consolidated Balance Sheets

September 30,

(In millions)

36 unchanged sentences

Condensed Consolidated Statements of Cash Flows

Nine Months Ended September 30,

Three Months Ended March 31,

(In millions)

5 unchanged sentences

Share-based compensation expense

Loss (income) from SSAT

(Income) loss from SSAT

Distributions from SSAT

10 unchanged sentences

Capitalized vessel construction expenditures

Other capital expenditures

Capital expenditures (excluding vessel construction expenditures)

Proceeds from disposal of property and equipment, net

Payment for intangible asset acquisition

Cash deposits and interest into the Capital Construction Fund

Withdrawals from Capital Construction Fund

Cash deposits and interest into the Capital Construction Fund, net

Net cash used in investing activities

6 unchanged sentences

Net Decrease in Cash, Cash Equivalents and Restricted Cash

Cash, Cash Equivalents and Restricted Cash, Beginning of the Period

Cash, Cash Equivalents and Restricted Cash, End of the Period

Cash and Cash Equivalents, and Restricted Cash, Beginning of the Period

Cash and Cash Equivalents, and Restricted Cash, End of the Period

Reconciliation of Cash, Cash Equivalents and Restricted Cash, End of the Period:

1 unchanged sentence

Restricted Cash

Total Cash, Cash Equivalents and Restricted Cash, End of the Period

Total Cash and Cash Equivalents, and Restricted Cash, End of the Period

Supplemental Cash Flow Information:

Interest paid, net of capitalized interest (including debt prepaid fees)

Interest paid, net of capitalized interest

Income tax payments (refunds), net

13 unchanged sentences

Shares repurchased

Equity interest in SSAT (See Note 4)

Dividends ( $ 0.32 per share)

Balance at March 31, 2024

Other comprehensive income (loss), net of tax

Share-based compensation

Shares issued, net of shares withheld for employee taxes

Shares repurchased

Dividends ( $ 0.31 per share and $ 0.32 per share)

Balance at June 30, 2023

Other comprehensive income (loss), net of tax

Share-based compensation

Shares issued, net of shares withheld for employee taxes

Shares repurchased

Balance at September 30, 2023

Comprehensive

8 unchanged sentences

Balance at March 31, 2023

Other comprehensive income (loss), net of tax

Share-based compensation

Shares issued, net of shares withheld for employee taxes

Shares repurchased

Dividends ( $ 0.30 per share and $ 0.31 per share)

Balance at June 30, 2022

Other comprehensive income (loss), net of tax

Share-based compensation

Equity interest in SSAT

Shares repurchased

Balance at September 30, 2022

See Notes to Condensed Consolidated Financial Statements.

8 unchanged sentences

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 ports in Alaska to Asia.

In addition, subsidiaries of MatNav provide stevedoring, refrigerated cargo services, inland transportation and other terminal services for MatNav on the Hawaiian islands of Oahu, Hawaii, Maui and Kauai, and for MatNav and other ocean carriers in Alaska.

Matson has a 35 percent ownership interest in SSA Terminals, LLC, a joint venture between Matson Ventures, Inc., a wholly-owned subsidiary of MatNav, and SSA Ventures, Inc., a subsidiary of Carrix, Inc.

20 unchanged sentences

Fiscal Period:

The period end for Matson covered by this report is September 30, 2023.

The period end for MatNav and its subsidiaries covered by this report is September 29, 2023.

The period end for Matson covered by this report is March 31, 2024.

The period end for MatNav and its subsidiaries covered by this report is March 29, 2024.

Significant Accounting Policies:

10 unchanged sentences

insurance reserves and other related liabilities;

contingent acquisition related consideration;

accrual estimates;

6 unchanged sentences

Prepaid Expenses and Other Assets:

Prepaid expenses and other assets consisted of the following at September 30, 2023 and December 31, 2022:

September 30,

Prepaid expenses and other assets consisted of the following at March 31, 2024 and December 31, 2023:

Prepaid Expenses and Other Assets (in millions)

1 unchanged sentence

Prepaid insurance and insurance related receivables

Prepaid operating expenses

Prepaid leases

Restricted cash - vessel construction obligations

Income tax receivables include an expected federal income tax refund related to the Company’s 2021 federal tax return and other income tax receivables, offset by current federal income tax payables.

Income tax receivables primarily include a federal income tax refund related to the Company’s 2021 federal tax return of $ 118.6 million and other income tax receivables.

On April 19, 2024, the Company received the federal income tax refund of $ 118.6 million and interest of $ 10.2 million earned on the federal income tax refund.

Capital Construction Fund Investments:

Capital Construction Fund (“CCF”) investments are held in fixed-rate U.S.

Treasuries with various maturity dates of up to three years.

These held-to-maturity debt securities are initially recognized at cost and subsequently measured at accreted cost, less any expected credit losses.

The accreted cost is adjusted for accretion of discounts to maturity.

The Company has classified these securities as held-to-maturity as the Company has the intent and ability to hold such securities until maturity.

Recognition of Revenues and Expenses:

1 unchanged sentence

The following is a description of the Company’s principal revenue generating activities by segment, and the Company’s revenue recognition policy for each activity for the periods presented:

Three Months Ended

Nine Months Ended

September 30,

Ocean Transportation (in millions) (1)

3 unchanged sentences

(1) Ocean Transportation revenue transactions are primarily denominated in U.S.

dollars except for less than 3 percent of Ocean Transportation revenues which are denominated in foreign currencies.

dollars except for less than 3 percent of Ocean Transportation services revenues and fuel sales revenue categories which are denominated in foreign currencies.

◾ Ocean Transportation services revenue is recognized ratably over the duration of a voyage based on the relative transit time completed in each reporting period.

5 unchanged sentences

Related costs are recognized as incurred.

Three Months Ended

Nine Months Ended

September 30,

Logistics (in millions) (1)

3 unchanged sentences

(1) Logistics revenue transactions are primarily denominated in U.S.

dollars except for less than 3 percent of Logistics revenues which are denominated in foreign currencies.

dollars except for less than 3 percent of transportation brokerage and freight forwarding services revenue and supply chain management and other services revenue categories which are denominated in foreign currencies.

◾ Transportation Brokerage and Freight Forwarding services revenue consists of amounts billed to customers for services provided.

13 unchanged sentences

These expenses are included in selling, general and administrative expenses in the Condensed Consolidated Statements of Income and Comprehensive Income.

Capital Construction Fund:

The Company’s Capital Construction Fund (“CCF”) is described in Note 7 to the Consolidated Financial Statements included in Part II, Item 8 of the Company’s Annual Report on Form 10-K for the year ended December 31, 2022.

A summary of the CCF cash account for the nine months ended September 30, 2023 and 2022 consisted of the following:

Nine Months Ended

September 30,

(In millions)

CCF balance at beginning of period

Cash deposits into CCF

Interest earned on deposits

Qualifying withdrawal payments

CCF balance at end of period

The Company had $ 591.6 million and $ 518.2 million on deposit in the CCF as of September 30, 2023, and December 31, 2022, respectively.

Cash on deposit in the CCF is invested in a U.S.

Treasury obligations fund with daily liquidity.

At September 30, 2023, securities held within this fund had a weighted average life of 44 days .

Cash on deposit in the CCF is 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.

During the nine months ended September 30, 2023, the Company pledged $ 200.0 million of accounts receivable into the CCF.

There were no pledged amounts during the nine months ended September 30, 2022.

As of September 30, 2023 and December 31, 2022, $ 213.2 million and $ 9.9 million of eligible accounts receivable were assigned to the CCF, respectively.

Due to the nature of the assignment of eligible accounts receivable into the CCF, such assigned amounts are classified as part of accounts receivable in the Condensed Consolidated Balance Sheets.

Investment in SSAT:

Condensed income statement information for SSAT for the three and nine months ended September 30, 2023 and 2022 consisted of the following:

Three Months Ended

Nine Months Ended

September 30,

(In millions)

Operating revenue

Operating costs and expenses

Operating (loss) income

Net Income (Loss) (1)

Company Share of SSAT’s Net Income (Loss) (2)

(1) Includes earnings from equity method investments held by SSAT less earnings allocated to non-controlling interests.

(2) The Company records its share of net income (loss) from SSAT in costs and expenses in the Condensed Consolidated Statement of Income and Comprehensive Income due to the nature of SSAT’s operations.

The Company’s investment in SSAT was $ 81.4 million and $ 81.2 million at September 30, 2023 and December 31, 2022, respectively.

Capitalized Interest:

1 unchanged sentence

The Company determined that the vessel construction costs are considered qualifying assets for the purposes of capitalizing interest on these assets.

Capitalized interest is determined based on the number of payments incurred related to the construction of these vessels using a weighted average interest rate.

The amount of capitalized interest is calculated based on the amount of expenditures incurred related to the construction of these vessels using a weighted average interest rate.

The weighted average interest rate is determined using the Company’s average borrowings outstanding during the period.

Capitalized interest is included in vessel construction in progress in property and equipment in the Company’s Condensed Consolidated Balance Sheets (see Note 5).

During the three and nine months ended September 30, 2023, the Company capitalized $ 0.8 million and $ 1.7 million of interest related to the construction of new vessels, respectively.

There was no capitalized interest during the three months ended September 30, 2022.

During the nine months ended September 30, 2022, the Company capitalized $ 0.4 million of interest related to the construction of new vessels.

The Company’s third quarter 2023 cash dividend of $ 0.32 per share was paid on September 7, 2023.

On October 26, 2023, the Company’s Board of Directors declared a cash dividend of $ 0.32 per share payable on December 7, 2023 to shareholders of record on November 9, 2023.

During the three months ended March 31, 2024 and 2023, the Company capitalized $ 0.8 million and $ 0.4 million of interest related to the construction of new vessels, respectively.

The Company’s first quarter 2024 cash dividend of $ 0.32 per share was paid on March 7, 2024.

On April 25, 2024, the Company’s Board of Directors declared a cash dividend of $ 0.32 per share payable on June 6, 2024 to shareholders of record on May 9, 2024.

Repurchase of Shares:

During the three months ended September 30, 2023, the Company repurchased approximately 0.3 million shares for a total cost of $ 25.8 million.

As of September 30, 2023, the maximum number of remaining shares that may be repurchased under the Company’s share repurchase program was approximately 3.0 million shares.

During the three months ended March 31, 2024, the Company repurchased approximately 0.4 million shares for a total cost of $ 48.9 million.

As of March 31, 2024, the maximum number of remaining shares that may be repurchased under the Company’s share repurchase program was approximately 2.0 million shares.

New Accounting Pronouncements:

In November 2023, the Financial Accounting Standards Board (“FASB”) issued Accounting Standard Update (“ASU”) 2023-07, Segment Reporting (Topic 280):

Improvements to Reportable Segment Disclosures (“ASU 2023-07”).

ASU 2023-07 requires disclosure of incremental segment information on an annual and interim basis.

The ASU is effective for fiscal years beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024, and requires retrospective application to all prior periods presented in the

financial statements.

Early adoption is permitted.

The Company is currently evaluating the effects of adopting ASU 2023-07 but does not expect it will have a material impact on the Company’s consolidated financial statements.

In December 2023, the FASB issued ASU 2023-09, Improvements to Income Tax Disclosures (“ASU 2023-09”).

ASU 2023-09 requires disaggregated information about a reporting entity’s effective tax rate reconciliation as well as information on income taxes paid.

ASU 2023-09 is effective for annual periods beginning after December 15, 2024, and interim periods within fiscal years beginning after December 15, 2025.

The Company is currently evaluating the effects of adoption ASU 2023-09 but does not expect it to have a material impact on the Company’s consolidated financial statements.

REPORTABLE SEGMENTS

6 unchanged sentences

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 $ 61.1 million and $ 78.2 million for the three months ended September 30, 2023 and 2022, and $ 155.6 million and $ 220.6 million for the nine months ended September 30, 2023 and 2022, respectively, have been eliminated from operating revenues in the table below.

Reportable segment financial information for the three and nine months ended September 30, 2023 and 2022 are as follows:

Accordingly, inter-segment revenue of $ 46.6 million and $ 40.1 million for the three months ended March 31, 2024 and 2023, respectively, have been eliminated from operating revenues in the table below.

Reportable segment financial information for the three months ended March 31, 2024 and 2023 are as follows:

Three Months Ended

Nine Months Ended

September 30,

(In millions)

10 unchanged sentences

Income before Taxes

(1) Ocean Transportation operating revenue excludes inter-segment revenue of $ 22.5 million and $ 28.0 million for the three months ended September 30, 2023 and 2022, and $ 57.6 million and $ 73.8 million for the nine months ended September 30, 2023 and 2022, respectively.

(2) Logistics operating revenue excludes inter-segment revenue of $ 38.6 million and $ 50.2 million for the three months ended September 30, 2023 and 2022, and $ 98.0 million and $ 146.8 million for the nine months ended September 30, 2023 and 2022, respectively.

(3) Ocean Transportation segment information includes $ 1.3 million and $ 23.4 million of income from the Company’s equity investment in SSAT for the three months ended September 30, 2023 and 2022, and $ ( 1.9 ) million and $ 82.1 million of (loss) income for the nine months ended September 30, 2023 and 2022, respectively.

(1) Ocean Transportation operating revenue excludes inter-segment revenue of $ 19.7 million and $ 16.1 million for the three months ended March 31, 2024 and 2023, respectively.

(2) Logistics operating revenue excludes inter-segment revenue of $ 26.9 million and $ 24.0 million for the three months ended March 31, 2024 and 2023, respectively.

(3) Ocean Transportation segment information includes $ 0.4 million and $( 1.8 ) million of net income (loss) from the Company’s equity investment in SSAT for the three months ended March 31, 2024 and 2023, respectively.

INVESTMENT IN SSAT

The Company’s investment in SSAT is described in Note 4 to the Consolidated Financial Statements included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2023.

Condensed income statement information for SSAT for the three months ended March 31, 2024 and 2023 consisted of the following:

Three Months Ended

(In millions)

Operating revenue

Operating costs and expenses

Operating loss

Company Share of SSAT’s Net Income (Loss) (2)

(1) Includes earnings and losses from equity method investment held by SSAT less earnings and losses allocated to non-controlling interests.

The Company’s investment in SSAT was $ 85.2 million and $ 85.5 million at March 31, 2024 and December 31, 2023, respectively.

On March 1, 2024, SSAT completed the sale of 25 percent of its equity interest in SSA Terminals (Seattle Terminals), LLC (“SSAT ST”) to a third-party company.

After the completion of this transaction, SSAT retains a 50 percent 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 and increase in deferred income taxes of $ 3.1 million, and a corresponding increase in retained earnings of $ 10.1 million.

PROPERTY AND EQUIPMENT

Property and equipment as of September 30, 2023 and December 31, 2022 consisted of the following:

September 30,

Property and equipment as of March 31, 2024 and December 31, 2023 consisted of the following:

(In millions)

6 unchanged sentences

Total Property and Equipment, net

New vessel construction in progress at September 30, 2023 and December 31, 2022 includes milestone progress payments, capitalized interest and other costs related to the construction of three new Jones Act vessels.

New vessel construction in progress at March 31, 2024 and December 31, 2023 includes milestone progress payments, capitalized interest and other costs related to the construction of three new Jones Act vessels.

GOODWILL AND INTANGIBLES

Goodwill by segment as of September 30, 2023 and December 31, 2022 consisted of the following:

Goodwill by segment as of March 31, 2024 and December 31, 2023 consisted of the following:

(In millions)

Transportation

Intangible assets as of September 30, 2023 and December 31, 2022 consisted of the following:

September 30,

Intangible assets as of March 31, 2024 and December 31, 2023 consisted of the following:

(In millions)

5 unchanged sentences

Total Intangible Assets, net

On February 27, 2023, the Company completed an asset acquisition consisting of customer relationship intangible assets for $ 16.5 million, which are being amortized over seven years .

On February 27, 2023, the Company completed an asset acquisition consisting of Logistics customer relationship intangible assets for $ 16.5 million, which are being amortized over seven years .

The Company evaluates its goodwill and intangible assets for possible impairment in the fourth quarter, or whenever events or changes in circumstances indicate that it is more likely than not that the fair value is less than its carrying amount.

1 unchanged sentence

The Company considered the general economic and market conditions and its impact on the performance of each of the Company’s reporting units.

Based on the Company’s assessment of its market capitalization, future forecasts and the amount of excess of fair value over the carrying value of the reporting units in the 2022 annual impairment tests, the Company concluded that an impairment triggering event did not occur during the three months ended September 30, 2023.

Based on the Company’s assessment of its market capitalization, future forecasts and the amount of excess of fair value over the carrying value of the reporting units in the 2023 annual impairment tests, the Company concluded that an impairment triggering event did not occur during the three months ended March 31, 2024.

The Company will monitor events and changes in circumstances that could negatively impact the key assumptions used in determining the fair value, including the amount and timing of estimated future cash flows generated by the reporting units, long-term growth and discount rates, comparable company market valuations, and industry and economic trends.

It is possible that future changes in such circumstances, including future changes in the assumptions and estimates used in assessing the fair value of the reporting unit, could require the Company to record a non-cash impairment charge.

As of September 30, 2023 and December 31, 2022, the Company’s debt consisted of the following:

September 30,

CAPITAL CONSTRUCTION FUND

The CCF is described in Note 7 to the Consolidated Financial Statements included in Part II, Item 8 of the Company’s Annual Report on Form 10-K for the year ended December 31, 2023.

A summary of the activities within the CCF cash and cash equivalents, and investments account for the three months ended March 31, 2024 and 2023 consisted of the following:

Three Months Ended

(In millions)

CCF Cash and Cash Equivalents:

CCF cash and cash equivalents balance at beginning of period

Cash deposits into the CCF

Cash paid for purchase of U.S.

Treasury debt securities and accrued interest

Interest earned on deposits and investments, net

Total CCF cash and cash equivalents balance at end of period

CCF Investments:

CCF investments balance at beginning of period

Purchase of U.S.

Treasury debt securities

Accretion of investments

Total CCF investments balance at end of period

Accrued interest earned on Cash and Cash Equivalents, and Investments at end of period:

Total CCF cash and cash equivalents, and investments balance at end of period

CCF Cash and Cash Equivalents:

Cash on deposit in the CCF cash and cash equivalents account is invested in a short-term U.S.

Treasury obligations fund with daily liquidity.

At March 31, 2024, short-term securities held within this account had a weighted average life of 77 days .

The Company had $ 154.7 million and $ 599.4 million on deposit in the CCF cash and cash equivalents account as of March 31, 2024 and December 31, 2023, respectively.

CCF Investments:

In February 2024, the Company purchased approximately $ 448.1 million of fixed-rate U.S.

Treasuries with accrued interest of $ 1.7 million using CCF cash.

The fixed-rate debt securities were purchased at a discount and have various maturity dates of up to 3 years .

The cost of investments is adjusted for accretion of the discount until the securities mature.

Such accretion is included in interest income in the Condensed Consolidated Statements of Income and Comprehensive Income.

As of March 31, 2024, the Company had $ 450.0 million in held-to-maturity debt securities in the CCF investments account.

As of March 31, 2024, CCF investments maturities are as follows:

March 31, 2024

Year (in millions)

Remainder of 2024

Total CCF investments

CCF cash and cash equivalents, and investments are classified as a long-term asset on the Company’s Condensed Consolidated Balance Sheets as the Company intends to use withdrawals to fund qualified milestone progress payments for the construction of three new Jones Act vessels.

CCF Assigned Accounts Receivable:

Activities within the CCF assigned accounts receivable account for the three months ended March 31, 2024 and 2023 consisted of the following:

Three Months Ended

(In millions)

CCF assigned accounts receivable balance at beginning of period

Assigned accounts receivable

Interest earned on assigned accounts receivable

CCF assigned accounts receivable balance at end of period

During the three months ended March 31, 2023, the Company pledged $ 200.0 million of accounts receivable into the CCF.

The Company did not pledge any accounts receivable into the CCF during the three months ended March 31, 2024.

As of March 31, 2024 and December 31, 2023, eligible accounts receivable of $ 221.3 million and $ 218.1 million were assigned to the CCF, respectively.

Due to the nature of the assignment of eligible accounts receivable into the CCF, such assigned amounts are classified as part of accounts receivable in the Condensed Consolidated Balance Sheets.

As of March 31, 2024 and December 31, 2023, the Company’s debt consisted of the following:

(In millions)

Private Placement Term Loans:

1 unchanged sentence

3.14 %, payable through 2031

Title XI Debt:

1 unchanged sentence

1.35 %, payable through 2044

1.22 %, payable through 2043

1.35 %, payable through 2044

Current portion

5 unchanged sentences

The Company’s revolving credit facility has committed available borrowing of up to $ 650 million and matures on March 31, 2026.

As of September 30, 2023, the Company had $ 642.6 million of remaining

borrowing availability under the revolving credit facility.

The Company used $ 7.4 million of the revolving credit facility for letters of credit outstanding as of September 30, 2023.

There were no outstanding borrowings under the revolving credit facility as of September 30, 2023 and December 31, 2022.

On February 9, 2023, the Company amended the revolving credit facility to replace LIBOR with a new benchmark interest rate, the Secured Overnight Financing Rate (“SOFR”).

There were no other significant changes to the revolving credit facility as a result of this amendment.

As of March 31, 2024, the Company had $ 644.2 million of remaining borrowing availability under the revolving credit facility.

The Company used $ 5.8 million of the revolving credit facility for letters of credit outstanding as of March 31, 2024.

There were no outstanding borrowings under the revolving credit facility as of March 31, 2024 and December 31, 2023.

Title XI Bonds:

2 unchanged sentences

Debt Security and Guarantees:

All of the debt of the Company and MatNav, including related guarantees, as of September 30, 2023 was unsecured, except for the Title XI debt.

All of the debt of the Company and MatNav, including related guarantees, as of March 31, 2024 was unsecured, except for the Title XI debt.

Debt Maturities:

As of September 30, 2023, debt maturities during the next five years and thereafter are as follows:

As of March 31, 2024, debt maturities during the next five years and thereafter are as follows:

Year (in millions)

September 30, 2023

March 31, 2024

Remainder of 2024

1 unchanged sentence

Components of Lease Cost:

Components of lease cost recorded in the Company’s Condensed Consolidated Statement of Income and Comprehensive Income for the three and nine months ended September 30, 2023 and 2022 consisted of the following:

Components of lease cost recorded in the Company’s Condensed Consolidated Statement of Income and Comprehensive Income for the three months ended March 31, 2024 and 2023 consisted of the following:

Three Months Ended

Nine Months Ended

September 30,

(In millions)

3 unchanged sentences

Total lease cost

Maturities of operating lease liabilities at September 30, 2023 are as follows:

Maturities of operating lease liabilities at March 31, 2024 are as follows:

Year (in millions)

September 30, 2023

March 31, 2024

Remainder of 2024

4 unchanged sentences

ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS)

Changes in accumulated other comprehensive income (loss) by component, net of tax, for the nine months ended September 30, 2023 consisted of the following:

Changes in accumulated other comprehensive income (loss) by component, net of tax, for the three months ended March 31, 2024 consisted of the following:

Comprehensive

5 unchanged sentences

Foreign currency exchange

Other adjustments

Balance at March 31, 2024

Amortization of prior service cost

Amortization of net gain (loss)

Foreign currency exchange

Balance at June 30, 2023

Amortization of prior service cost

Amortization of net gain (loss)

Foreign currency exchange

Balance at September 30, 2023

Changes in accumulated other comprehensive income (loss) by component, net of tax, for the nine months ended September 30, 2022 consisted of the following:

Changes in accumulated other comprehensive income (loss) by component, net of tax, for the three months ended March 31, 2023 consisted of the following:

Comprehensive

5 unchanged sentences

Foreign currency exchange

Balance at March 31, 2022

Amortization of prior service cost

Amortization of net gain (loss)

Foreign currency exchange

Other adjustments

Balance at June 30, 2022

Amortization of prior service cost

Amortization of net gain (loss)

Foreign currency exchange

Other adjustments

Balance at September 30, 2022

Balance at March 31, 2023

FAIR VALUE OF FINANCIAL INSTRUMENTS

4 unchanged sentences

If the technique used to measure fair value includes inputs from multiple levels of the fair value hierarchy, the lowest level of significant input determines the placement of the entire fair value measurement in the hierarchy.

The Company uses Level 1 inputs for the fair values of its cash, cash equivalents, restricted cash and cash in the CCF, and Level 2 inputs for its variable and fixed rate debt.

The fair values of cash, cash equivalents, restricted cash and cash on deposit in the CCF, and variable rate debt approximate their carrying values due to the nature of the instruments.

The fair value of fixed rate debt is calculated based upon interest rates available for debt with terms and maturities similar to the Company’s existing debt arrangements.

The carrying value and fair value of the Company’s financial instruments as of September 30, 2023 and December 31, 2022 are as follows:

The carrying value and fair value of the Company’s financial instruments as of March 31, 2024 and December 31, 2023 are as follows:

Quoted Prices in

4 unchanged sentences

(In millions)

September 30, 2023

Fair Value Measurements at September 30, 2023

March 31, 2024

Fair Value Measurements at March 31, 2024

Cash and cash equivalents

Restricted cash

Capital Construction Fund

CCF - Cash and cash equivalent

CCF - Investments

Fixed rate debt

4 unchanged sentences

Restricted cash

Capital Construction Fund

CCF - Cash and cash equivalent

Fixed rate debt

The Company uses Level 1 inputs for the fair values of its cash and cash equivalents, restricted cash, and CCF cash and cash equivalents and investments, and Level 2 inputs for fixed rate debt.

The fair values of cash and cash equivalents, restricted cash, and cash and cash equivalents in the CCF approximate their carrying values due to the nature of the instruments.

The fair value of investments in the CCF is calculated based upon quoted prices available in active market.

The fair value of fixed rate debt is calculated based upon interest rates available for debt with terms and maturities similar to the Company’s existing debt arrangements.

EARNINGS PER SHARE

1 unchanged sentence

The calculation of diluted earnings per share includes the dilutive effect of unexercised non-qualified stock options and non-vested restricted stock units.

The computation of weighted average common shares outstanding excluded a nominal amount of anti-dilutive non-qualified stock options for each period ended September 30, 2023 and 2022.

The computations for basic and diluted earnings per share for the three and nine months ended September 30, 2023 and 2022 are as follows:

Three Months Ended September 30, 2023

Nine Months Ended September 30, 2023

(In millions, except per share amounts)

Effect of Dilutive Securities

Three Months Ended September 30, 2022

Nine Months Ended September 30, 2022

The computation of weighted average common shares outstanding excluded a nominal amount of anti-dilutive non-qualified stock options for each period ended March 31, 2024 and 2023.

The computations for basic and diluted earnings per share for the three months ended March 31, 2024 and 2023 are as follows:

Three Months Ended March 31, 2024

Three Months Ended March 31, 2023

(In millions, except per share amounts)

1 unchanged sentence

SHARE-BASED COMPENSATION

The Company granted time-based restricted stock units and performance-based shares to certain of its employees totaling approximately 1,100 and 267,100 shares with a weighted average grant date fair value of $ 76.50 and $ 65.89 per share during the three and nine months ended September 30, 2023, respectively.

Total share-based compensation cost recognized in the Condensed Consolidated Statements of Income and Comprehensive Income as a component of selling, general and administrative expenses was $ 7.8 million and $ 5.0 million for the three months ended September 30, 2023 and 2022, and $ 17.6 million and $ 15.5 million for the nine months ended September 30, 2023 and 2022, respectively.

Total unrecognized compensation cost related to unvested share-based compensation arrangements was $ 30.2 million at September 30, 2023, and is expected to be recognized over a weighted average period of approximately 1.8 years.

The Company granted time-based restricted stock units and performance-based shares to certain of its employees totaling approximately 144,700 shares with a weighted average grant date fair value of $ 122.79 per share during the three months ended March 31, 2024.

Total share-based compensation cost recognized in the Condensed Consolidated Statements of Income and Comprehensive Income as a component of selling, general and administrative expenses was $ 5.7 million and $ 4.6 million for the three months ended March 31, 2024 and 2023, respectively.

Total unrecognized compensation cost related to unvested share-based compensation arrangements was $ 37.4 million at March 31, 2024, and is expected to be recognized over a weighted average period of approximately 2.2 years.

Total unrecognized compensation cost may be adjusted for any unearned performance shares or forfeited shares.

1 unchanged sentence

The Company’s pension and post-retirement plans are described in Note 11 to the Consolidated Financial Statements included in Part II, Item 8 of the Company’s Annual Report on Form 10-K for the year ended December 31, 2023 .

Components of net periodic benefit cost and other amounts recognized in Other Comprehensive Income (Loss) for the qualified pension plans and the post-retirement benefit plans for the three and nine months ended September 30, 2023 and 2022 consisted of the following:

Pension Benefits

Post-retirement Benefits

Three Months Ended September 30,

(In millions)

Components of net periodic benefit cost (credit):

Interest cost

Expected return on plan assets

Amortization of net loss (gain)

Amortization of prior service credit

Net periodic benefit cost (credit)

Components of net periodic benefit cost and other amounts recognized in Other Comprehensive Income (Loss) for the qualified pension plans and the post-retirement benefit plans for the three months ended March 31, 2024 and 2023 consisted of the following:

Pension Benefits

Post-retirement Benefits

Nine Months Ended September 30,

Three Months Ended March 31,

(In millions)

12 unchanged sentences

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 1. Financial Statements