What changed in this filing

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Item 1. Financial Statements

2024-10-31 compared with 2024-08-02 · 116 added, 91 removed, 480 unchanged (30% of the section changed)

3 unchanged sentences

Three Months Ended

Six 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

Six Months Ended June 30,

Nine Months Ended September 30,

(In millions)

20 unchanged sentences

Proceeds from disposal of property and equipment, net

Payment for intangible asset acquisition

Cash deposits and interest into the Capital Construction Fund, net

Withdrawals from Capital Construction Fund, net

Payments for asset acquisitions

Cash and interest deposited into the Capital Construction Fund

Withdrawals from Capital Construction Fund

Net cash used in investing activities

17 unchanged sentences

Capital expenditures included in accounts payable, accruals and other liabilities

Non-cash payment for intangible asset acquisition

Accrued dividends

Non-cash payments for asset acquisitions

See Notes to Condensed Consolidated Financial Statements.

18 unchanged sentences

Balance at June 30, 2024

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, 2024

Comprehensive

14 unchanged sentences

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

See Notes to Condensed Consolidated Financial Statements.

32 unchanged sentences

Fiscal Period:

The period end for Matson covered by this report is June 30, 2024.

The period end for MatNav and its subsidiaries covered by this report is June 28, 2024.

The period end for Matson covered by this report is September 30, 2024.

The period end for MatNav and its subsidiaries covered by this report is September 27, 2024.

Significant Accounting Policies:

19 unchanged sentences

Prepaid Expenses and Other Assets:

Prepaid expenses and other assets consisted of the following at June 30, 2024 and December 31, 2023:

Prepaid expenses and other assets consisted of the following at September 30, 2024 and December 31, 2023:

September 30,

Prepaid Expenses and Other Assets (in millions)

6 unchanged sentences

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:

2 unchanged sentences

Three Months Ended

Six Months Ended

Nine Months Ended

September 30,

Ocean Transportation (in millions) (1)

5 unchanged sentences

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

Vessel operating costs and other ocean transportation operating

costs, such as terminal operating overhead and selling, general and administrative expenses, are charged to operating costs as incurred.

Vessel operating costs and other ocean transportation operating costs, such as terminal operating overhead and selling, general and administrative expenses, are charged to operating costs as incurred.

◾ Terminal and other related services revenue is recognized as the services are performed.

4 unchanged sentences

Three Months Ended

Six Months Ended

Nine Months Ended

September 30,

Logistics (in millions) (1)

25 unchanged sentences

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

The Company capitalized $ 1.0 million and $ 0.5 million of interest related to the construction of new vessels for the three months ended June 30, 2024 and 2023, and $ 1.8 million and $ 0.9 million for the six months ended June 30, 2024 and 2023, respectively.

The Company’s second quarter 2024 cash dividend of $ 0.32 per share was paid on June 6, 2024.

On June 27, 2024, the Company’s Board of Directors declared a cash dividend of $ 0.34 per share payable on September 5, 2024 to shareholders of record on August 1, 2024.

The Company capitalized $ 1.2 million and $ 0.8 million of interest related to the construction of new vessels for the three months ended September 30, 2024 and 2023, and $ 3.0 million and $ 1.7 million for the nine months ended September 30, 2024 and 2023, respectively.

The Company’s third quarter 2024 cash dividend of $ 0.34 per share was paid on September 5, 2024.

On October 24, 2024 , the Company’s Board of Directors declared a cash dividend of $ 0.34 per share payable on December 5, 2024 to shareholders of record on November 7, 2024 .

Repurchase of Shares:

During the three and six months ended June 30, 2024, the Company repurchased approximately 0.6 million and 1.0 million shares for a total cost of $ 72.2 million and $ 121.1 million, respectively.

As of June 30, 2024, the maximum number of remaining shares that may be repurchased under the Company’s share repurchase program was approximately 1.4 million shares.

During the three and nine months ended September 30, 2024, the Company repurchased approximately 0.4 million and 1.4 million shares for a total cost of $ 48.1 million and $ 169.2 million, respectively.

As of September 30, 2024, the maximum number of remaining shares that may be repurchased under the Company’s share repurchase program was approximately 1.0 million shares.

New Accounting Pronouncements:

2 unchanged sentences

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.

financial statements.

Early adoption is permitted.

3 unchanged sentences

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.

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.

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 $ 61.8 million and $ 54.4 million for the three months ended June 30, 2024 and 2023, and $ 108.4 million and $ 94.5 million for the six months ended June 30, 2024 and 2023, respectively, have been eliminated from operating revenues in the table below.

Reportable segment financial information for the three and six months ended June 30, 2024 and 2023 are as follows:

Accordingly, inter-segment revenue of $ 72.8 million and $ 61.1 million for the three months ended September 30, 2024 and 2023, and $ 181.2 million and $ 155.6 million for the nine months ended September 30, 2024 and 2023, respectively, have been eliminated from operating revenues in the table below.

Reportable segment financial information for the three and nine months ended September 30, 2024 and 2023 are as follows:

Three Months Ended

Six 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 $ 22.8 million and $ 19.0 million for the three months ended June 30, 2024 and 2023, and $ 42.5 million and $ 35.1 million for the six months ended June 30, 2024 and 2023, respectively.

(2) Logistics operating revenue excludes inter-segment revenue of $ 39.0 million and $ 35.4 million for the three months ended June 30, 2024 and 2023, and $ 65.9 million and $ 59.4 million for the six months ended June 30, 2024 and 2023, respectively.

(3) Ocean Transportation segment information includes net income (loss) of $ 1.2 million and $( 1.4 ) million from the Company’s equity investment in SSAT for the three months ended June 30, 2024 and 2023, and $ 1.6 million and $( 3.2 ) million for the six months ended June 30, 2024 a n d 2023, respectively.

(1) Ocean Transportation operating revenue excludes inter-segment revenue of $ 26.7 million and $ 22.5 million for the three months ended September 30, 2024 and 2023, and $ 69.2 million and $ 57.6 million for the nine months ended September 30, 2024 and 2023, respectively.

(2) Logistics operating revenue excludes inter-segment revenue of $ 46.1 million and $ 38.6 million for the three months ended September 30, 2024 and 2023, and $ 112.0 million and $ 98.0 million for the nine months ended September 30, 2024 and 2023, respectively.

(3) Ocean Transportation segment information includes net income (loss) of $ 6.9 million and $ 1.3 million from the Company’s equity investment in SSAT for the three months ended September 30, 2024 and 2023, and $ 8.5 million and $( 1.9 ) million for the nine months ended September 30, 2024 a n d 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 and six months ended June 30, 2024 and 2023 consisted of the following:

Condensed income statement information for SSAT for the three and nine months ended September 30, 2024 and 2023 consisted of the following:

Three Months Ended

Six Months Ended

Nine Months Ended

September 30,

(In millions)

1 unchanged sentence

Operating costs and expenses

Operating loss

Operating profit (loss)

Net Profit (Loss) (1)

2 unchanged sentences

(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 $ 86.4 million and $ 85.5 million at June 30, 2024 and December 31, 2023, respectively.

The Company’s investment in SSAT was $ 93.3 million and $ 85.5 million at September 30, 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.

As a result of this transaction during the three months ended March 31, 2024, 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 June 30, 2024 and December 31, 2023 consisted of the following:

Property and equipment as of September 30, 2024 and December 31, 2023 consisted of the following:

September 30,

(In millions)

6 unchanged sentences

Total Property and Equipment, net

New vessel construction in progress at June 30, 2024 and December 31, 2023 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 September 30, 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 June 30, 2024 and December 31, 2023 consisted of the following:

Goodwill by segment as of September 30, 2024 and December 31, 2023 consisted of the following:

(In millions)

Transportation

Intangible assets as of June 30, 2024 and December 31, 2023 consisted of the following:

Intangible assets as of September 30, 2024 and December 31, 2023 consisted of the following:

September 30,

(In millions)

9 unchanged sentences

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

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

1 unchanged sentence

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 six months ended June 30, 2024 and 2023 consisted of the following:

Six Months Ended

The 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, 2023.

A summary of the activities within the CCF cash and cash equivalents, and investments account for the nine months ended September 30, 2024 and 2023 consisted of the following:

Nine Months Ended

September 30,

(In millions)

5 unchanged sentences

Interest income deposited into the CCF

Repurchase of assigned accounts receivable

Qualifying withdrawal payments out of the CCF

12 unchanged sentences

Treasury obligations fund with daily liquidity.

At June 30, 2024, these short-term securities held within this CCF cash account had a weighted average life of 83 days .

Total CCF cash and cash equivalents was $ 160.6 million and $ 599.4 million as of June 30, 2024 and December 31, 2023, respectively.

At September 30, 2024, these short-term securities held within this CCF cash

account had a weighted average life of 68 days .

Total CCF cash and cash equivalents was $ 178.7 million including accrued interest of $ 2.2 million as of September 30, 2024, and $ 599.4 million including accrued interest of $ 2.7 million as of December 31, 2023.

CCF Investments:

2 unchanged sentences

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.

The cost of these investments accretes to face value on a straight-line basis until maturity.

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

As of June 30, 2024, the Company had $ 453.3 million in held-to-maturity debt securities in the CCF investments account.

As of June 30, 2024, CCF investments maturities are as follows:

June 30, 2024

As of September 30, 2024, the Company had $ 456.7 million in held-to-maturity debt securities in the CCF investments account.

As of September 30, 2024, CCF investments maturities are as follows:

September 30, 2024

Year (in millions)

3 unchanged sentences

CCF Assigned Accounts Receivable:

Activities within the CCF assigned accounts receivable account for the six months ended June 30, 2024 and 2023 consisted of the following:

Six Months Ended

Activities within the CCF assigned accounts receivable account for the nine months ended September 30, 2024 and 2023 consisted of the following:

Nine Months Ended

September 30,

(In millions)

1 unchanged sentence

Assigned accounts receivable

Repurchase of assigned accounts receivable

Interest earned on assigned accounts receivable

CCF assigned accounts receivable balance at end of period

The Company did not pledge any accounts receivable into the CCF during the six months ended June 30, 2024.

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

During the six months ended June 30, 2024, the Company repurchased $ 35.8 million of assigned accounts receivable from the CCF.

The Company did not repurchase any assigned accounts receivable from the CCF during the six months ended June 30, 2023.

As of June 30, 2024 and December 31, 2023, eligible accounts receivable of $ 185.9 million and $ 218.1 million were assigned to the CCF, respectively.

As of September 30, 2024 and December 31, 2023, eligible accounts receivable of $ 228.3 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 June 30, 2024 and December 31, 2023, the Company’s debt consisted of the following:

As of September 30, 2024 and December 31, 2023, the Company’s debt consisted of the following:

September 30,

(In millions)

12 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 June 30, 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 June 30, 2024.

There were no outstanding borrowings under the revolving credit facility as of June 30, 2024 and December 31, 2023.

As of September 30, 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 September 30, 2024.

There were no outstanding borrowings under the revolving credit facility as of September 30, 2024 and December 31, 2023.

Debt Security and Guarantees:

All of the debt of the Company and MatNav, including related guarantees, as of June 30, 2024 was unsecured, except for the Title XI debt.

All of the debt of the Company and MatNav, including related guarantees, as of September 30, 2024 was unsecured, except for the Title XI debt.

Debt Maturities:

As of June 30, 2024, debt maturities during the next five years and thereafter are as follows:

As of September 30, 2024, debt maturities are as follows:

Year (in millions)

June 30, 2024

September 30, 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 six months ended June 30, 2024 and 2023 consisted of the following:

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, 2024 and 2023 consisted of the following:

Three Months Ended

Six Months Ended

Nine Months Ended

September 30,

(In millions)

3 unchanged sentences

Total lease cost

Maturities of operating lease liabilities at June 30, 2024 are as follows:

Maturities of operating lease liabilities at September 30, 2024 are as follows:

Year (in millions)

June 30, 2024

September 30, 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 six months ended June 30, 2024 consisted of the following:

Changes in accumulated other comprehensive income (loss) by component, net of tax, for the nine months ended September 30, 2024 consisted of the following:

Comprehensive

11 unchanged sentences

Balance at June 30, 2024

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

Amortization of prior service cost

Amortization of net gain (loss)

Foreign currency exchange

Balance at September 30, 2024

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

Comprehensive

11 unchanged sentences

Balance at June 30, 2023

Amortization of prior service cost

Amortization of net gain (loss)

Foreign currency exchange

Balance at September 30, 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 carrying value and fair value of the Company’s financial instruments as of June 30, 2024 and December 31, 2023 are as follows:

The carrying value and fair value of the Company’s financial instruments as of September 30, 2024 and December 31, 2023 are as follows:

Quoted Prices in

4 unchanged sentences

(In millions)

June 30, 2024

Fair Value Measurements at June 30, 2024

September 30, 2024

Fair Value Measurements at September 30, 2024

Cash and cash equivalents

17 unchanged sentences

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

The computation of weighted average common shares outstanding excluded a nominal amount of anti-dilutive restricted stock units for each period ended June 30, 2024 and 2023.

The computations for basic and diluted earnings per share for the three and six months ended June 30, 2024 and 2023 are as follows:

Three Months Ended June 30, 2024

Six Months Ended June 30, 2024

The computation of weighted average common shares outstanding excluded a nominal amount of anti-dilutive restricted stock units for each period ended September 30, 2024 and 2023.

The computations for basic and diluted earnings per share for the three and nine months ended September 30, 2024 and 2023 are as follows:

Three Months Ended September 30, 2024

Nine Months Ended September 30, 2024

(In millions, except per share amounts)

Effect of Dilutive Securities

Three Months Ended June 30, 2023

Six Months Ended June 30, 2023

Three Months Ended September 30, 2023

Nine Months Ended September 30, 2023

(In millions, except per share amounts)

1 unchanged sentence

SHARE-BASED COMPENSATION

During the three and six months ended June 30, 2024, the Company granted time-based restricted stock units and performance-based shares to certain of its employees totaling approximately 7,400 and 152,100 shares, respectively, with a combined weighted average grant date fair value of $ 109.64 and $ 122.15 per share, respectively.

Total share-based compensation cost recognized in the Condensed Consolidated Statements of Income and Comprehensive Income as a component of selling, general and administrative expenses was $ 6.3 million and $ 5.2 million for the three months ended June 30, 2024 and 2023 and $ 12.0 million and $ 9.8 million for the six months ended June 30, 2024 and 2023, respectively.

Total unrecognized compensation cost related to unvested share-based compensation arrangements was $ 34.1 million at June 30, 2024, and is expected to be recognized over a weighted average period of approximately 2.0 years.

During the three and nine months ended September 30, 2024, the Company granted time-based restricted stock units and performance-based shares to certain of its employees totaling approximately 500 and 152,600 shares, respectively, with a combined weighted average grant date fair value of $ 129.25 and $ 122.17 per share, respectively.

Total share-based compensation cost recognized in the Condensed Consolidated Statements of Income and Comprehensive Income as a component of selling, general and administrative expenses was $ 7.1 million and $ 7.8 million for the three months ended September 30, 2024 and 2023 and $ 19.1 million and $ 17.6 million for the nine months ended September 30, 2024 and 2023, respectively.

Total unrecognized compensation cost related to unvested share-based compensation arrangements was $ 28.1 million at September 30, 2024, and is expected to be recognized over a weighted average period of approximately 1.7 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 six months ended June 30, 2024 and 2023 consisted of the following:

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, 2024 and 2023 consisted of the following:

Pension Benefits

Post-retirement Benefits

Three Months Ended June 30,

Three Months Ended September 30,

(In millions)

7 unchanged sentences

Post-retirement Benefits

Six Months Ended June 30,

Nine Months Ended September 30,

(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