Matson, Inc. 10-Q

ITEM 1. FINANCIAL STATEMENTS ​ MATSON, INC. AND SUBSIDIARIES Condensed Consolidated Statements of Income and Comprehensive Income (Unaudited) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Three Months Ended ​ Nine Months Ended ​ ​ September 30, ​ September 30, (In millions, except per share amounts) 2024 2023 2024 2023 Operating Revenue: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Ocean Transportation ​ $ 798.7 ​ $ 669.4 ​ $ 2,067.6 ​ $ 1,837.3 Logistics ​ 163.3 ​ 158.1 ​ 463.9 ​ 468.4 Total Operating Revenue ​ 962.0 ​ 827.5 ​ 2,531.5 ​ 2,305.7 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Costs and Expenses: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Operating costs ​ ( 654.3 ) ​ ( 624.1 ) ​ ( 1,913.4 ) ​ ( 1,826.3 ) Income (Loss) from SSAT ​ 6.9 ​ 1.3 ​ 8.5 ​ ( 1.9 ) Selling, general and administrative ​ ( 72.3 ) ​ ( 72.6 ) ​ ( 222.8 ) ​ ( 210.0 ) Total Costs and Expenses ​ ( 719.7 ) ​ ( 695.4 ) ​ ( 2,127.7 ) ​ ( 2,038.2 ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Operating Income ​ 242.3 ​ 132.1 ​ 403.8 ​ 267.5 Interest income ​ ​ 10.4 ​ ​ 9.3 ​ ​ 38.0 ​ ​ 26.2 Interest expense ​ ( 1.8 ) ​ ( 2.4 ) ​ ( 6.1 ) ​ ( 9.8 ) Other income (expense), net ​ 1.9 ​ 1.2 ​ 5.5 ​ 4.8 Income before Taxes ​ 252.8 ​ 140.2 ​ 441.2 ​ 288.7 Income taxes ​ ( 53.7 ) ​ ( 20.3 ) ​ ( 92.8 ) ​ ( 54.0 ) Net Income ​ $ 199.1 ​ $ 119.9 ​ $ 348.4 ​ $ 234.7 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Other Comprehensive Income (Loss), Net of Income Taxes: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Net Income ​ $ 199.1 ​ $ 119.9 ​ $ 348.4 ​ $ 234.7 Other Comprehensive Income (Loss): ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Net change in pension and post-retirement liabilities ​ ​ ( 0.8 ) ​ ​ ( 0.8 ) ​ ​ ( 2.3 ) ​ ​ ( 2.5 ) Other adjustments ​ 1.0 ​ ( 0.6 ) ​ 0.5 ​ 0.1 Total Other Comprehensive Income (Loss), Net of Income Taxes ​ 0.2 ​ ( 1.4 ) ​ ( 1.8 ) ​ ( 2.4 ) Comprehensive Income ​ $ 199.3 ​ $ 118.5 ​ $ 346.6 ​ $ 232.3 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Basic Earnings Per Share ​ $ 5.98 ​ $ 3.42 ​ $ 10.28 ​ $ 6.59 Diluted Earnings Per Share ​ $ 5.89 ​ $ 3.40 ​ $ 10.13 ​ $ 6.56 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Weighted Average Number of Shares Outstanding: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Basic ​ 33.3 ​ 35.1 ​ 33.9 ​ 35.6 Diluted ​ 33.8 ​ 35.3 ​ 34.4 ​ 35.8 ​ See Notes to Condensed Consolidated Financial Statements. ​ 1 Table of Contents MATSON, INC. AND SUBSIDIARIES Condensed Consolidated Balance Sheets (Unaudited) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ September 30, ​ December 31, (In millions) 2024 2023 ASSETS ​ ​ ​ ​ ​ ​ Current Assets: ​ ​ ​ ​ ​ ​ Cash and cash equivalents ​ $ 270.3 ​ $ 134.0 Accounts receivable, net of allowance for credit losses of $ 9.0 million and $ 9.9 million, respectively ​ 311.1 ​ 279.4 Prepaid expenses and other assets ​ 70.4 ​ 188.9 Total current assets ​ 651.8 ​ 602.3 Long-term Assets: ​ ​ ​ ​ ​ ​ Investment in SSAT ​ 93.3 ​ 85.5 Property and equipment, net ​ 2,190.6 ​ 2,089.9 Operating lease right of use assets ​ ​ 252.7 ​ ​ 289.6 Goodwill ​ 327.8 ​ 327.8 Intangible assets, net ​ ​ 164.0 ​ ​ 176.4 Capital Construction Fund ​ ​ 635.4 ​ ​ 599.4 Deferred dry-docking costs, net ​ ​ 60.3 ​ ​ 57.3 Other long-term assets ​ 66.3 ​ 66.4 Total long-term assets ​ ​ 3,790.4 ​ ​ 3,692.3 Total Assets ​ $ 4,442.2 ​ $ 4,294.6 ​ ​ ​ ​ ​ ​ ​ LIABILITIES AND SHAREHOLDERS’ EQUITY ​ ​ ​ ​ ​ ​ Current Liabilities: ​ ​ ​ ​ ​ ​ Current portion of debt ​ $ 39.7 ​ $ 39.7 Accounts payable and accruals ​ 294.1 ​ 277.9 Operating lease liabilities ​ ​ 106.6 ​ ​ 136.7 Other liabilities ​ 137.3 ​ 108.0 Total current liabilities ​ 577.7 ​ 562.3 Long-term Liabilities: ​ ​ ​ ​ ​ ​ Long-term debt, net of deferred loan fees ​ 360.2 ​ 389.3 Long-term operating lease liabilities ​ ​ 150.5 ​ ​ 159.3 Deferred income taxes ​ 692.6 ​ 669.3 Other long-term liabilities ​ ​ 104.5 ​ ​ 113.7 Total long-term liabilities ​ 1,307.8 ​ 1,331.6 Commitments and Contingencies (see Note 15) ​ ​ ​ ​ ​ ​ Shareholders’ Equity: ​ ​ ​ ​ ​ ​ Common stock ​ 24.9 ​ 25.8 Additional paid in capital ​ 290.5 ​ 293.4 Accumulated other comprehensive loss, net ​ ( 10.0 ) ​ ( 8.2 ) Retained earnings ​ 2,251.3 ​ 2,089.7 Total shareholders’ equity ​ 2,556.7 ​ 2,400.7 Total Liabilities and Shareholders’ Equity ​ $ 4,442.2 ​ $ 4,294.6 ​ See Notes to Condensed Consolidated Financial Statements. ​ 2 Table of Contents MATSON, INC. AND SUBSIDIARIES Condensed Consolidated Statements of Cash Flows (Unaudited) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Nine Months Ended September 30, ​ (In millions) 2024 2023 Cash Flows From Operating Activities: ​ ​ ​ ​ ​ ​ ​ Net income ​ $ 348.4 ​ $ 234.7 ​ Reconciling adjustments: ​ ​ ​ ​ ​ ​ ​ Depreciation and amortization ​ 114.7 ​ 108.1 ​ Amortization of operating lease right of use assets ​ ​ 102.1 ​ ​ 108.2 ​ Deferred income taxes ​ 16.2 ​ ( 9.3 ) ​ Share-based compensation expense ​ 19.1 ​ 17.6 ​ (Income) loss from SSAT ​ ( 8.5 ) ​ 1.9 ​ Distributions from SSAT ​ ​ 14.0 ​ ​ — ​ Other ​ ​ ( 9.1 ) ​ ​ ( 1.7 ) ​ Changes in assets and liabilities: ​ ​ ​ ​ ​ ​ ​ Accounts receivable, net ​ ( 31.7 ) ​ ( 37.1 ) ​ Deferred dry-docking payments ​ ( 20.2 ) ​ ( 17.3 ) ​ Deferred dry-docking amortization ​ 21.0 ​ 18.6 ​ Prepaid expenses and other assets ​ 116.9 ​ 65.8 ​ Accounts payable, accruals and other liabilities ​ 27.6 ​ 34.4 ​ Operating lease liabilities ​ ​ ( 104.0 ) ​ ​ ( 109.9 ) ​ Other long-term liabilities ​ ( 13.4 ) ​ ( 14.9 ) ​ Net cash provided by operating activities ​ 593.1 ​ 399.1 ​ ​ ​ ​ ​ ​ ​ ​ ​ Cash Flows From Investing Activities: ​ ​ ​ ​ ​ ​ ​ Capitalized vessel construction expenditures ​ ​ ( 39.8 ) ​ ​ ( 52.1 ) ​ Capital expenditures (excluding vessel construction expenditures) ​ ( 144.9 ) ​ ( 135.4 ) ​ Proceeds from disposal of property and equipment, net ​ 4.4 ​ ​ 0.1 ​ Payments for asset acquisitions ​ ​ ( 0.7 ) ​ ​ ( 12.4 ) ​ Cash and interest deposited into the Capital Construction Fund ​ ( 63.6 ) ​ ( 120.8 ) ​ Withdrawals from Capital Construction Fund ​ ​ 35.8 ​ ​ 49.9 ​ Net cash used in investing activities ​ ( 208.8 ) ​ ( 270.7 ) ​ ​ ​ ​ ​ ​ ​ ​ ​ Cash Flows From Financing Activities: ​ ​ ​ ​ ​ ​ ​ Repayments of debt ​ ( 30.0 ) ​ ( 67.2 ) ​ Dividends paid ​ ​ ( 33.5 ) ​ ( 33.8 ) ​ Repurchase of Matson common stock ​ ​ ( 167.4 ) ​ ( 108.2 ) ​ Tax withholding related to net share settlements of restricted stock units ​ ​ ( 17.0 ) ​ ​ ( 12.5 ) ​ Net cash used in financing activities ​ ( 247.9 ) ​ ( 221.7 ) ​ ​ ​ ​ ​ ​ ​ ​ ​ Net Increase (Decrease) in Cash, Cash Equivalents and Restricted Cash ​ 136.4 ​ ( 93.3 ) ​ Cash and Cash Equivalents, and Restricted Cash, Beginning of the Period ​ 136.3 ​ 253.7 ​ Cash and Cash Equivalents, and Restricted Cash, End of the Period ​ $ 272.7 ​ $ 160.4 ​ ​ ​ ​ ​ ​ ​ ​ ​ Reconciliation of Cash, Cash Equivalents and Restricted Cash, End of the Period: ​ ​ ​ ​ ​ ​ ​ Cash and Cash Equivalents ​ $ 270.3 ​ $ 156.5 ​ Restricted Cash ​ ​ 2.4 ​ ​ 3.9 ​ Total Cash and Cash Equivalents, and Restricted Cash, End of the Period ​ $ 272.7 ​ $ 160.4 ​ ​ ​ ​ ​ ​ ​ ​ ​ Supplemental Cash Flow Information: ​ ​ ​ ​ ​ ​ ​ Interest paid, net of capitalized interest ​ $ 5.3 ​ $ 9.6 ​ Income tax payments (refunds), net ​ $ ( 85.1 ) ​ $ ( 5.3 ) ​ ​ ​ ​ ​ ​ ​ ​ ​ Non-cash Information: ​ ​ ​ ​ ​ ​ ​ Capital expenditures included in accounts payable, accruals and other liabilities ​ $ 26.9 ​ $ 7.8 ​ Non-cash payments for asset acquisitions ​ $ — ​ $ 4.1 ​ ​ See Notes to Condensed Consolidated Financial Statements. ​ 3 Table of Contents MATSON, INC. AND SUBSIDIARIES Condensed Consolidated Statements of Shareholders’ Equity (Unaudited) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Accumulated ​ ​ ​ ​ ​ ​ ​ ​ Common Stock ​ Additional ​ Other ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Stated ​ Paid In ​ Comprehensive ​ Retained ​ ​ ​ (In millions, except per share amounts) Shares Value Capital Income (Loss) Earnings Total Balance at December 31, 2023 34.4 ​ $ 25.8 $ 293.4 ​ $ ( 8.2 ) ​ $ 2,089.7 ​ $ 2,400.7 Net income — ​ — — ​ — ​ 36.1 ​ 36.1 Other comprehensive income (loss), net of tax — ​ — — ​ ( 1.6 ) ​ — ​ ( 1.6 ) Share-based compensation — ​ — 5.7 ​ — ​ — ​ 5.7 Shares issued, net of shares withheld for employee taxes 0.2 ​ ​ 0.1 ( 17.3 ) ​ — ​ — ​ ( 17.2 ) Shares repurchased ( 0.4 ) ​ ​ ( 0.3 ) ​ ​ ( 1.6 ) ​ ​ — ​ ​ ( 47.0 ) ​ ​ ( 48.9 ) Equity interest in SSAT (See Note 4) ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ 10.1 ​ ​ 10.1 Dividends ( $ 0.32 per share) — ​ — — ​ — ​ ( 11.1 ) ​ ( 11.1 ) Balance at March 31, 2024 34.2 ​ ​ 25.6 ​ ​ 280.2 ​ ​ ( 9.8 ) ​ ​ 2,077.8 ​ ​ 2,373.8 Net income — ​ — — ​ — ​ 113.2 ​ 113.2 Other comprehensive income (loss), net of tax ​ — ​ — — ​ ( 0.4 ) ​ — ​ ( 0.4 ) Share-based compensation — ​ — 6.3 ​ — ​ — ​ 6.3 Shares issued, net of shares withheld for employee taxes — ​ — 0.2 ​ — ​ — ​ 0.2 Shares repurchased ( 0.6 ) ​ ​ ( 0.4 ) ​ ​ ( 2.0 ) ​ ​ — ​ ​ ( 69.8 ) ​ ​ ( 72.2 ) Dividends ( $ 0.32 per share and $ 0.34 per share) ​ — ​ — — ​ — ​ ( 22.4 ) ​ ( 22.4 ) Balance at June 30, 2024 33.6 ​ ​ 25.2 ​ 284.7 ​ ​ ( 10.2 ) ​ ​ 2,098.8 ​ ​ 2,398.5 Net income — ​ — — ​ — ​ 199.1 ​ 199.1 Other comprehensive income (loss), net of tax — ​ — — ​ 0.2 ​ — ​ 0.2 Share-based compensation — ​ — ​ 7.1 ​ — ​ — ​ 7.1 Shares issued, net of shares withheld for employee taxes — ​ ​ — ​ ( 0.1 ) ​ — ​ — ​ ( 0.1 ) Shares repurchased ( 0.4 ) ​ ​ ( 0.3 ) ​ ​ ( 1.2 ) ​ ​ — ​ ​ ( 46.6 ) ​ ​ ( 48.1 ) Balance at September 30, 2024 33.2 ​ $ 24.9 $ 290.5 ​ $ ( 10.0 ) ​ $ 2,251.3 ​ $ 2,556.7 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Accumulated ​ ​ ​ ​ ​ ​ ​ ​ Common Stock ​ Additional ​ Other ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Stated ​ Paid In ​ Comprehensive ​ Retained ​ ​ ​ (In millions, except per share amounts) Shares Value Capital Income (Loss) Earnings Total Balance at December 31, 2022 36.3 ​ $ 27.2 $ 290.4 ​ $ ( 6.9 ) ​ $ 1,986.2 ​ $ 2,296.9 Net income — ​ — — ​ — ​ 34.0 ​ 34.0 Other comprehensive income (loss), net of tax — ​ — — ​ 0.6 ​ — ​ 0.6 Share-based compensation — ​ — 4.6 ​ — ​ — ​ 4.6 Shares issued, net of shares withheld for employee taxes 0.3 ​ ​ 0.2 ( 12.6 ) ​ — ​ — ​ ( 12.4 ) Shares repurchased ( 0.7 ) ​ ​ ( 0.5 ) ​ ​ ( 2.7 ) ​ ​ — ​ ​ ( 38.9 ) ​ ​ ( 42.1 ) Dividends ( $ 0.31 per share) — ​ — — ​ — ​ ( 11.3 ) ​ ( 11.3 ) Balance at March 31, 2023 35.9 ​ ​ 26.9 ​ 279.7 ​ ​ ( 6.3 ) ​ ​ 1,970.0 ​ ​ 2,270.3 Net income — ​ — — ​ — ​ 80.8 ​ 80.8 Other comprehensive income (loss), net of tax ​ — ​ — — ​ ( 1.6 ) ​ — ​ ( 1.6 ) Share-based compensation — ​ — 5.2 ​ — ​ — ​ 5.2 Shares issued, net of shares withheld for employee taxes — ​ — 0.1 ​ — ​ — ​ 0.1 Shares repurchased ( 0.6 ) ​ ​ ( 0.6 ) ​ ​ ( 2.3 ) ​ ​ — ​ ​ ( 39.5 ) ​ ​ ( 42.4 ) Dividends ( $ 0.31 per share and $ 0.32 per share) ​ — ​ — — ​ — ​ ( 22.4 ) ​ ​ ( 22.4 ) Balance at June 30, 2023 35.3 ​ ​ 26.3 ​ 282.7 ​ ​ ( 7.9 ) ​ ​ 1,988.9 ​ ​ 2,290.0 Net income — ​ — — ​ — ​ 119.9 ​ 119.9 Other comprehensive income (loss), net of tax — ​ — — ​ ( 1.4 ) ​ — ​ ( 1.4 ) Share-based compensation — ​ — 7.8 ​ — ​ — ​ 7.8 Shares issued, net of shares withheld for employee taxes — ​ ​ — ​ ( 0.2 ) ​ — ​ — ​ ​ ( 0.2 ) Shares repurchased ( 0.4 ) ​ ​ ( 0.1 ) ​ ​ ( 1.2 ) ​ ​ — ​ ​ ( 24.5 ) ​ ( 25.8 ) Balance at September 30, 2023 ​ 34.9 ​ $ 26.2 $ 289.1 ​ $ ( 9.3 ) ​ $ 2,084.3 ​ $ 2,390.3 ​ See Notes to Condensed Consolidated Financial Statements. 4 Table of Contents MATSON, INC. AND SUBSIDIARIES NOTES TO THE CONDENSED CONSOLIDATED FINANICAL STATEMENTS (Unaudited) ​ 1. DESCRIPTION OF THE BUSINESS ​ Matson, Inc., a holding company incorporated in the State of Hawaii, and its subsidiaries (“Matson” or the “Company”), is a leading provider of ocean transportation and logistics services. The Company consists of two segments, Ocean Transportation and Logistics. ​ Ocean Transportation: Matson’s Ocean Transportation business is conducted through Matson Navigation Company, Inc. (“MatNav”), a wholly-owned subsidiary of Matson, Inc. Founded in 1882, MatNav provides a vital lifeline of ocean freight transportation services to the domestic non-contiguous economies of Hawaii, Alaska and Guam, and to other island economies in Micronesia. MatNav also operates premium, expedited services from China to Long Beach, California, provides services to Okinawa, Japan and various islands in the South Pacific, and operates an international export service from Alaska to Asia. In addition, subsidiaries of MatNav provide stevedoring, refrigerated cargo services, inland transportation and other terminal services for MatNav on the Hawaiian islands of Oahu, Hawaii, Maui and Kauai, and for MatNav and an ocean carrier in Alaska. ​ Matson has a 35 percent ownership interest in SSA Terminals, LLC, a joint venture between Matson Ventures, Inc., a wholly-owned subsidiary of MatNav, and SSA Ventures, Inc., a subsidiary of Carrix, Inc. (“SSAT”). SSAT currently provides terminal and stevedoring services to various carriers at eight terminal facilities on the U.S. West Coast, including three facilities dedicated for MatNav’s use. Matson records its share of income from SSAT in costs and expenses in the Condensed Consolidated Statements of Income and Comprehensive Income, and within the Ocean Transportation segment due to the nature of SSAT’s operations. ​ Logistics: Matson’s logistics business is conducted through Matson Logistics, Inc. (“Matson Logistics”), a wholly-owned subsidiary of MatNav. Established in 1987, Matson Logistics extends the geographic reach of Matson’s transportation network throughout North America and Asia, and is an asset-light business that provides a variety of logistics services to its customers including: (i) multimodal transportation brokerage of domestic and international rail intermodal services, long-haul and regional highway trucking services, specialized hauling, flat-bed and project services, less-than-truckload services, and expedited freight services (collectively, “Transportation Brokerage” services); (ii) less-than-container load (“LCL”) consolidation and freight forwarding services (collectively, “Freight Forwarding” services); (iii) warehousing, trans-loading, value-added packaging and distribution services (collectively, “Warehousing” services); and (iv) purchase order management, booking services, and non-vessel operating common carrier (“NVOCC”) freight forwarding services (collectively, “Supply Chain Management” services). ​ ​ 2. GENERAL AND SIGNIFICANT ACCOUNTING POLICIES ​ Basis of Presentation: The Condensed Consolidated Financial Statements are unaudited, and include the accounts of Matson, Inc. and all wholly-owned subsidiaries, after elimination of intercompany amounts and transactions. Significant investments in businesses, partnerships, and limited liability companies in which the Company does not have a controlling financial interest, but has the ability to exercise significant influence, are accounted for under the equity method. The Company accounts for its investment in SSAT using the equity method of accounting. ​ Due to the nature of the Company’s operations, the results for interim periods are not necessarily indicative of results to be expected for the year. These Condensed Consolidated Financial Statements reflect all normal recurring adjustments that are, in the opinion of management, necessary for fair presentation of the results of the interim periods, and do not include all of the information and footnotes required by U.S. generally accepted accounting principles for complete consolidated financial statements. ​ The Condensed Consolidated Financial Statements should be read in conjunction with the Consolidated Financial Statements and notes thereto included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2023, filed with the Securities and Exchange Commission (“SEC”) on February 23, 2024. ​ 5 Table of Contents Fiscal Period: 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: The Company’s significant accounting policies are described in Note 2 to the Consolidated Financial Statements included in Part II, Item 8 of the Company’s Annual Report on Form 10-K for the year ended December 31, 2023. ​ Use of Estimates: The preparation of the interim Condensed Consolidated Financial Statements in conformity with accounting principles generally accepted in the U.S. requires management to make estimates and assumptions that affect the amounts reported. Estimates and assumptions are used for but not limited to: impairment of investments; impairment of long-lived assets, intangible assets and goodwill; capitalized interest; allowance for doubtful accounts and other receivables; legal contingencies; insurance reserves and other related liabilities; contingent acquisition related consideration; accrual estimates; pension and post-retirement estimates; multi-employer withdrawal liabilities; operating lease assets and liabilities; income (loss) from SSAT; and income taxes. Future results could be materially affected if actual results differ from these estimates and assumptions. ​ Prepaid Expenses and Other Assets: Prepaid expenses and other assets consisted of the following at September 30, 2024 and December 31, 2023: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ September 30, ​ December 31, Prepaid Expenses and Other Assets (in millions) 2024 2023 Prepaid fuel ​ $ 28.5 ​ $ 22.5 ​ Prepaid insurance and insurance related receivables ​ 14.8 ​ 19.3 ​ Prepaid operating expenses ​ ​ 8.6 ​ ​ 8.2 ​ Prepaid leases ​ ​ 3.4 ​ ​ 4.1 ​ Income tax receivables, net ​ ​ 1.8 ​ ​ 125.2 ​ Restricted cash - vessel construction obligations ​ ​ 2.4 ​ ​ 2.3 ​ Other ​ 10.9 ​ 7.3 ​ Total ​ $ 70.4 ​ $ 188.9 ​ ​ Income tax receivables at December 31, 2023 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. ​ Recognition of Revenues and Expenses: Revenue in the Company’s Condensed Consolidated Financial Statements is presented net of elimination of intercompany transactions. The following is a description of the Company’s principal revenue generating activities by segment, and the Company’s revenue recognition policy for each activity for the periods presented: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Three Months Ended Nine Months Ended ​ ​ September 30, September 30, Ocean Transportation (in millions) (1) ​ 2024 2023 2024 2023 Ocean Transportation services ​ $ 787.9 ​ $ 654.3 ​ $ 2,027.9 ​ $ 1,799.6 Terminal and other related services ​ ​ 7.4 ​ ​ 10.8 ​ ​ 27.1 ​ ​ 24.3 Fuel sales ​ ​ 3.3 ​ ​ 2.7 ​ ​ 9.3 ​ ​ 8.4 Vessel management and related services ​ ​ 0.1 ​ ​ 1.6 ​ ​ 3.3 ​ ​ 5.0 Total ​ $ 798.7 ​ $ 669.4 ​ $ 2,067.6 ​ $ 1,837.3 (1) Ocean Transportation revenue transactions are primarily denominated in U.S. dollars except for less than 3 percent of Ocean Transportation services revenues and fuel sales revenue categories which are denominated in foreign currencies. ​ ◾ Ocean Transportation services revenue is recognized ratably over the duration of a voyage based on the relative transit time completed in each reporting period. Vessel operating costs and other ocean transportation operating costs, such as terminal operating overhead and selling, general and administrative expenses, are charged to operating costs as incurred. ◾ Terminal and other related services revenue is recognized as the services are performed. Related costs are recognized as incurred. ◾ Fuel sales revenue and related costs are recognized when the Company has completed delivery of the product to the customer in accordance with the terms and conditions of the contract. 6 Table of Contents ◾ Vessel management and related services revenue is recognized in proportion to the services completed. Related costs are recognized as incurred. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Three Months Ended Nine Months Ended ​ ​ September 30, September 30, Logistics (in millions) (1) ​ 2024 ​ 2023 ​ 2024 ​ 2023 Transportation Brokerage and Freight Forwarding services ​ $ 143.1 ​ $ 138.6 ​ $ 409.7 ​ $ 415.8 Warehousing and distribution services ​ ​ 10.6 ​ ​ 11.9 ​ ​ 30.0 ​ ​ 31.5 Supply Chain Management services ​ 9.6 ​ 7.6 ​ 24.2 ​ 21.1 Total ​ $ 163.3 ​ $ 158.1 ​ $ 463.9 ​ $ 468.4 (1) Logistics revenue transactions are primarily denominated in U.S. dollars except for less than 3 percent of transportation brokerage and freight forwarding services revenue and supply chain management services revenue categories which are denominated in foreign currencies. ​ ◾ Transportation Brokerage and Freight Forwarding services revenue consists of amounts billed to customers for services provided. The primary costs include third-party purchased transportation services, agent commissions, labor and equipment. Revenue and the related purchased third-party transportation costs are recognized over the duration of a delivery based upon the relative transit time completed in each reporting period. Labor, agent commissions, and other operating costs are expensed as incurred. The Company reports revenue on a gross basis as the Company serves as the principal in these transactions because it is responsible for fulfilling the contractual arrangements with the customer and has latitude in establishing prices. ◾ Warehousing and distribution services revenue consist of amounts billed to customers for storage, handling, and value-added packaging of customer merchandise. Storage revenue is recognized in the month the service is provided to the customer. Storage related costs are recognized as incurred. Other warehousing and distribution services revenue and related costs are recognized in proportion to the services performed. ◾ Supply Chain Management services revenue, and related costs are recognized in proportion to the services performed. ​ The Company generally invoices its customers at the commencement of the voyage or the transportation service being provided, or as other services are being performed. Revenue is deferred when services are invoiced in advance to the customer. The Company’s receivables are classified as short-term as collection terms are for periods of less than one year. The Company expenses sales commissions and contract acquisition costs as incurred because the amounts are generally immaterial. These expenses are included in selling, general and administrative expenses in the Condensed Consolidated Statements of Income and Comprehensive Income. ​ Capitalized Interest: The Company capitalizes interest costs during the period as the qualified assets are being readied for their intended use. The Company determined that the vessel construction costs are considered qualifying assets for the purposes of capitalizing interest on these assets. The amount of capitalized interest is calculated based on the amount of expenditures incurred related to the construction of these vessels using a weighted average interest rate. The weighted average interest rate is determined using the Company’s average borrowings outstanding during the period. Capitalized interest is included in vessel construction in progress in property and equipment in the Company’s Condensed Consolidated Balance Sheets (see Note 5). 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. ​ Dividends: 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 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: 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 7 Table of Contents 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 adopting ASU 2023-09 but does not expect it to have a material impact on the Company’s consolidated financial statements. ​ ​ ​ 3. REPORTABLE SEGMENTS ​ Reportable segments are components of an enterprise that engage in business activities from which it may earn revenues and incur expenses, whose operating results are regularly reviewed by the chief operating decision maker to make decisions about resources to be allocated to the segment and assess its performance, and for which discrete financial information is available. The Company’s chief operating decision maker is its Chief Executive Officer. ​ The Company consists of two reportable segments, Ocean Transportation and Logistics, which are further described in Note 1. Reportable segments are measured based on operating income. In arrangements where the customer purchases ocean transportation and logistics services, the revenues are allocated to each reportable segment based upon the contractual amounts for each type of service. The Company’s SSAT segment has been aggregated into the Company’s Ocean Transportation segment due to the operations of SSAT being an integral part of the Company’s Ocean Transportation business. ​ The Company’s Ocean Transportation segment provides ocean transportation services to the Logistics segment, and the Logistics segment provides logistics services to the Ocean Transportation segment in certain transactions. Accordingly, inter-segment revenue of $ 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 ​ Nine Months Ended ​ ​ September 30, ​ September 30, (In millions) 2024 2023 2024 2023 Operating Revenue: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Ocean Transportation (1) ​ $ 798.7 ​ $ 669.4 ​ $ 2,067.6 ​ $ 1,837.3 Logistics (2) ​ 163.3 ​ 158.1 ​ 463.9 ​ 468.4 Total Operating Revenue ​ $ 962.0 ​ $ 827.5 ​ $ 2,531.5 ​ $ 2,305.7 Operating Income: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Ocean Transportation (3) ​ $ 226.9 ​ $ 118.2 ​ $ 363.5 ​ $ 228.4 Logistics ​ 15.4 ​ 13.9 ​ 40.3 ​ 39.1 Total Operating Income ​ 242.3 ​ 132.1 ​ 403.8 ​ 267.5 Interest income ​ ​ 10.4 ​ ​ 9.3 ​ 38.0 ​ 26.2 Interest expense ​ ( 1.8 ) ​ ( 2.4 ) ​ ( 6.1 ) ​ ( 9.8 ) Other income (expense), net ​ 1.9 ​ 1.2 ​ 5.5 ​ 4.8 Income before Taxes ​ 252.8 ​ 140.2 ​ 441.2 ​ 288.7 Income taxes ​ ( 53.7 ) ​ ( 20.3 ) ​ ( 92.8 ) ​ ( 54.0 ) Net Income ​ $ 199.1 ​ $ 119.9 ​ $ 348.4 ​ $ 234.7 (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. ​ 8 Table of Contents ​ 4. INVESTMENT IN SSAT ​ The Company’s investment in SSAT is described in Note 4 to the Consolidated Financial Statements included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2023. Condensed income statement information for SSAT for the three and nine months ended September 30, 2024 and 2023 consisted of the following: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Three Months Ended Nine Months Ended ​ ​ September 30, September 30, (In millions) ​ 2024 2023 2024 2023 Operating revenue ​ $ 320.8 ​ $ 268.4 ​ $ 865.0 ​ $ 742.1 ​ Operating costs and expenses ​ ​ ( 301.3 ) ​ ​ ( 269.4 ) ​ ​ ( 858.2 ) ​ ​ ( 754.2 ) ​ Operating profit (loss) ​ ​ 19.5 ​ ​ ( 1.0 ) ​ ​ 6.8 ​ ​ ( 12.1 ) ​ Net Profit (Loss) (1) ​ $ 21.6 ​ $ 1.5 ​ $ 19.9 ​ $ ( 7.4 ) ​ Company Share of SSAT’s Net Income (Loss) (2) ​ $ 6.9 ​ $ 1.3 ​ $ 8.5 ​ $ ( 1.9 ) ​ (1) Includes earnings and losses from equity method investment held by SSAT less earnings and losses allocated to non-controlling interests. (2) The Company records its share of net income (loss) from SSAT in costs and expenses in the Condensed Consolidated Statement of Income and Comprehensive Income due to the nature of SSAT’s operations. ​ The Company’s investment in SSAT was $ 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 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. ​ ​ 5. PROPERTY AND EQUIPMENT ​ Property and equipment as of September 30, 2024 and December 31, 2023 consisted of the following: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ September 30, ​ December 31, (In millions) 2024 2023 Cost: ​ ​ ​ ​ ​ ​ Vessels ​ $ 2,398.2 ​ $ 2,323.4 Containers and equipment ​ ​ 880.4 ​ ​ 845.0 Terminal facilities and other property ​ ​ 149.2 ​ ​ 148.0 New vessel construction in progress ​ ​ 142.9 ​ ​ 103.1 Other construction in progress ​ ​ 87.5 ​ ​ 67.7 Total Property and Equipment ​ ​ 3,658.2 ​ ​ 3,487.2 Less: Accumulated Depreciation ​ ​ ( 1,467.6 ) ​ ​ ( 1,397.3 ) Total Property and Equipment, net ​ $ 2,190.6 ​ $ 2,089.9 ​ ​ ​ 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. ​ ​ 6. GOODWILL AND INTANGIBLES ​ Goodwill by segment as of September 30, 2024 and December 31, 2023 consisted of the following: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Ocean ​ ​ ​ ​ ​ ​ (In millions) Transportation Logistics Total Goodwill ​ $ 222.6 ​ $ 105.2 ​ $ 327.8 ​ ​ ​ 9 Table of Contents Intangible assets as of September 30, 2024 and December 31, 2023 consisted of the following: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ September 30, ​ December 31, ​ (In millions) 2024 2023 ​ Customer Relationships: ​ ​ ​ ​ ​ ​ ​ Ocean Transportation ​ $ 140.6 ​ $ 140.6 ​ Logistics ​ ​ 107.9 ​ ​ 110.4 ​ Total ​ ​ 248.5 ​ ​ 251.0 ​ Less: Accumulated Amortization ​ ​ ( 111.8 ) ​ ​ ( 101.9 ) ​ Total Customer Relationships, net ​ ​ 136.7 ​ ​ 149.1 ​ Trade name – Logistics ​ ​ 27.3 ​ ​ 27.3 ​ Total Intangible Assets, net ​ $ 164.0 ​ $ 176.4 ​ ​ On February 27, 2023, the Company completed an asset acquisition consisting of Logistics customer relationship intangible assets for $ 16.5 million, which are being amortized over seven years . ​ The Company evaluates its goodwill and intangible assets for possible impairment in the fourth quarter, or whenever events or changes in circumstances indicate that it is more likely than not that the fair value is less than its carrying amount. The Company has reporting units within the Ocean Transportation and Logistics reportable segments. The Company considered the general economic and market conditions and its impact on the performance of each of the Company’s reporting units. Based on the Company’s assessment of its market capitalization, future forecasts and the amount of excess of fair value over the carrying value of the reporting units in the 2023 annual impairment tests, the Company concluded that an impairment triggering event did not occur during the three months ended September 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. 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. ​ ​ 7. CAPITAL CONSTRUCTION FUND ​ 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) 2024 2023 CCF Cash and Cash Equivalents: ​ ​ ​ ​ ​ ​ CCF cash balance at beginning of period ​ $ 596.7 ​ $ 518.2 Cash deposits into the CCF ​ ​ 50.0 ​ ​ 100.0 Cash paid for purchase of U.S. Treasury debt securities and accrued interest ​ ​ ( 449.8 ) ​ ​ — Interest income deposited into the CCF ​ ​ 15.4 ​ ​ 20.8 Qualifying withdrawal payments out of the CCF ​ ​ ( 35.8 ) ​ ​ ( 49.9 ) Total CCF cash balance at end of period ​ ​ 176.5 ​ ​ 589.1 Accrued interest earned on CCF Cash and Investments at end of period ​ ​ 2.2 ​ ​ 2.5 Total CCF cash and cash equivalents balance at end of period ​ ​ 178.7 ​ ​ 591.6 CCF Investments: ​ ​ ​ ​ ​ ​ CCF investments balance at beginning of period ​ ​ — ​ ​ — Purchase of U.S. Treasury debt securities ​ ​ 448.1 ​ ​ — Accretion of investments ​ ​ 8.6 ​ ​ — Total CCF investments balance at end of period ​ ​ 456.7 ​ ​ — Total CCF cash and cash equivalents, and investments balance at end of period ​ $ 635.4 ​ $ 591.6 ​ CCF Cash and Cash Equivalents: Cash on deposit in the CCF account is invested in a short-term U.S. Treasury obligations fund with daily liquidity. At September 30, 2024, these short-term securities held within this CCF cash 10 Table of Contents 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: 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 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 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: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ As of ​ ​ September 30, 2024 Year (in millions) Cost ​ Fair Value Remainder of 2024 ​ $ 47.8 ​ $ 47.8 2025 ​ 189.8 ​ 190.5 2026 ​ 166.9 ​ 168.6 2027 ​ 52.2 ​ 53.0 Total CCF investments ​ $ 456.7 ​ $ 459.9 ​ 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 nine months ended September 30, 2024 and 2023 consisted of the following: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Nine Months Ended ​ ​ September 30, (In millions) 2024 2023 CCF assigned accounts receivable balance at beginning of period ​ $ 218.1 ​ $ 9.9 Assigned accounts receivable ​ ​ — ​ ​ 200.0 Interest earned on assigned accounts receivable ​ ​ 10.2 ​ ​ 3.3 CCF assigned accounts receivable balance at end of period ​ $ 228.3 ​ $ 213.2 ​ 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. ​ ​ 8. DEBT ​ As of September 30, 2024 and December 31, 2023, the Company’s debt consisted of the following: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ September 30, ​ December 31, (In millions) 2024 2023 Private Placement Term Loans: ​ ​ ​ ​ ​ ​ 3.37 %, payable through 2027 ​ $ 40.3 ​ $ 46.2 3.14 %, payable through 2031 ​ ​ 100.1 ​ ​ 114.4 Title XI Debt: ​ ​ ​ ​ ​ ​ 1.22 %, payable through 2043 ​ ​ 154.3 ​ ​ 158.2 1.35 %, payable through 2044 ​ ​ 115.9 ​ ​ 121.8 Total Debt ​ 410.6 ​ 440.6 Less: Current portion ​ ( 39.7 ) ​ ( 39.7 ) Total Long-term Debt ​ ​ 370.9 ​ ​ 400.9 Less: Deferred loan fees ​ ​ ( 10.7 ) ​ ( 11.6 ) Total Long-term Debt, net of deferred loan fees ​ $ 360.2 ​ $ 389.3 ​ 11 Table of Contents Except as described below, the Company’s debt is described in Note 8 to the Consolidated Financial Statements included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2023. ​ Revolving Credit Facility: The Company’s revolving credit facility has committed available borrowing of up to $ 650 million and matures on March 31, 2026. 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 September 30, 2024 was unsecured, except for the Title XI debt. ​ Debt Maturities: As of September 30, 2024, debt maturities are as follows: ​ ​ ​ ​ ​ ​ ​ As of Year (in millions) September 30, 2024 Remainder of 2024 ​ $ 9.7 2025 ​ 39.7 2026 ​ 39.7 2027 ​ 39.7 2028 ​ 28.2 Thereafter ​ 253.6 Total Debt ​ $ 410.6 ​ ​ ​ 9. LEASES ​ The Company’s leases are described in Note 9 to the Consolidated Financial Statements included in Part II, Item 8 of the Company’s Annual Report on Form 10-K for the year ended December 31, 2023. ​ Components of Lease Cost: Components of lease cost recorded in the Company’s Condensed Consolidated Statement of Income and Comprehensive Income for the three and nine months ended September 30, 2024 and 2023 consisted of the following: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Three Months Ended ​ Nine Months Ended ​ ​ September 30, ​ September 30, (In millions) 2024 ​ 2023 ​ 2024 ​ 2023 Operating lease cost ​ $ 36.2 ​ $ 34.7 ​ $ 108.4 ​ $ 114.8 Short-term lease cost ​ 2.5 ​ 3.8 ​ 9.9 ​ 5.5 Variable lease cost ​ 0.1 ​ 0.1 ​ 0.5 ​ 0.5 Total lease cost ​ $ 38.8 ​ $ 38.6 ​ $ 118.8 ​ $ 120.8 ​ Maturities of operating lease liabilities at September 30, 2024 are as follows: ​ ​ ​ ​ ​ ​ As of Year (in millions) September 30, 2024 Remainder of 2024 ​ $ 36.3 2025 ​ 98.7 2026 ​ 48.2 2027 ​ 31.2 2028 ​ 18.6 Thereafter ​ 65.0 Total lease payments ​ ​ 298.0 Less: Interest ​ ​ ( 40.9 ) Present value of operating lease liabilities ​ ​ 257.1 Less: Short-term portion ​ ​ ( 106.6 ) Long-term operating lease liabilities ​ $ 150.5 ​ ​ ​ ​ ​ 12 Table of Contents 10. ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS) ​ Changes in accumulated other comprehensive income (loss) by component, net of tax, for the nine months ended September 30, 2024 consisted of the following: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Accumulated ​ ​ ​ ​ ​ ​ Post- ​ Non- ​ ​ ​ Other ​ ​ ​ Pension ​ Retirement ​ Qualified ​ ​ ​ Comprehensive ​ (In millions) Benefits Benefits Plans Other Income (Loss) Balance at December 31, 2023 ​ $ ( 20.3 ) ​ $ 11.0 ​ $ ( 0.2 ) ​ $ 1.3 ​ $ ( 8.2 ) ​ Amortization of prior service cost ​ ​ — ​ ​ ( 0.7 ) ​ ​ — ​ ​ — ​ ​ ( 0.7 ) ​ Amortization of net gain (loss) ​ ​ 0.1 ​ ​ ( 0.2 ) ​ ​ — ​ ​ — ​ ​ ( 0.1 ) ​ Foreign currency exchange ​ ​ — ​ ​ — ​ ​ — ​ ​ ( 0.9 ) ​ ​ ( 0.9 ) ​ Other adjustments ​ ​ — ​ ​ — ​ ​ — ​ ​ 0.1 ​ ​ 0.1 ​ Balance at March 31, 2024 ​ ​ ( 20.2 ) ​ ​ 10.1 ​ ​ ( 0.2 ) ​ ​ 0.5 ​ ​ ( 9.8 ) ​ Amortization of prior service cost ​ ​ — ​ ​ ( 0.7 ) ​ ​ — ​ ​ — ​ ​ ( 0.7 ) ​ Amortization of net gain (loss) ​ ​ 0.1 ​ ​ ( 0.1 ) ​ ​ — ​ ​ — ​ ​ — ​ Foreign currency exchange ​ ​ — ​ ​ — ​ ​ — ​ ​ 0.3 ​ ​ 0.3 ​ Balance at June 30, 2024 ​ ​ ( 20.1 ) ​ ​ 9.3 ​ ​ ( 0.2 ) ​ ​ 0.8 ​ ​ ( 10.2 ) ​ Amortization of prior service cost ​ ​ — ​ ​ ( 0.7 ) ​ ​ — ​ ​ — ​ ​ ( 0.7 ) ​ Amortization of net gain (loss) ​ ​ — ​ ​ ( 0.1 ) ​ ​ — ​ ​ — ​ ​ ( 0.1 ) ​ Foreign currency exchange ​ ​ — ​ ​ — ​ ​ — ​ ​ 1.0 ​ ​ 1.0 ​ Balance at September 30, 2024 ​ $ ( 20.1 ) ​ $ 8.5 ​ $ ( 0.2 ) ​ $ 1.8 ​ $ ( 10.0 ) ​ ​ Changes in accumulated other comprehensive income (loss) by component, net of tax, for the nine months ended September 30, 2023 consisted of the following: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Accumulated ​ ​ ​ ​ ​ ​ Post- ​ Non- ​ ​ ​ Other ​ ​ ​ Pension ​ Retirement ​ Qualified ​ ​ ​ Comprehensive ​ (In millions) Benefits Benefits Plans Other Income (Loss) Balance at December 31, 2022 ​ $ ( 25.8 ) ​ $ 18.7 ​ $ 0.1 ​ $ 0.1 ​ $ ( 6.9 ) ​ Amortization of prior service cost ​ ​ — ​ ​ ( 0.7 ) ​ ​ — ​ ​ — ​ ​ ( 0.7 ) ​ Amortization of net gain (loss) ​ ​ 0.3 ​ ​ ( 0.4 ) ​ ​ — ​ ​ — ​ ​ ( 0.1 ) ​ Foreign currency exchange ​ ​ — ​ ​ — ​ ​ — ​ ​ ( 0.3 ) ​ ​ ( 0.3 ) ​ Other adjustments ​ ​ — ​ ​ — ​ ​ — ​ ​ 1.7 ​ ​ 1.7 ​ Balance at March 31, 2023 ​ ​ ( 25.5 ) ​ ​ 17.6 ​ ​ 0.1 ​ ​ 1.5 ​ ​ ( 6.3 ) ​ Amortization of prior service cost ​ ​ — ​ ​ ( 0.7 ) ​ ​ — ​ ​ — ​ ​ ( 0.7 ) ​ Amortization of net gain (loss) ​ ​ 0.2 ​ ​ ( 0.4 ) ​ ​ — ​ ​ — ​ ​ ( 0.2 ) ​ Foreign currency exchange ​ ​ — ​ ​ — ​ ​ — ​ ​ ( 0.7 ) ​ ​ ( 0.7 ) ​ Balance at June 30, 2023 ​ ​ ( 25.3 ) ​ ​ 16.5 ​ ​ 0.1 ​ ​ 0.8 ​ ​ ( 7.9 ) ​ Amortization of prior service cost ​ ​ — ​ ​ ( 0.7 ) ​ ​ — ​ ​ — ​ ​ ( 0.7 ) ​ Amortization of net gain (loss) ​ ​ 0.2 ​ ​ ( 0.3 ) ​ ​ — ​ ​ — ​ ​ ( 0.1 ) ​ Foreign currency exchange ​ ​ — ​ ​ — ​ ​ — ​ ​ ( 0.6 ) ​ ​ ( 0.6 ) ​ Balance at September 30, 2023 ​ $ ( 25.1 ) ​ $ 15.5 ​ $ 0.1 ​ $ 0.2 ​ $ ( 9.3 ) ​ ​ ​ ​ ​ 11. FAIR VALUE OF FINANCIAL INSTRUMENTS ​ The Company values its financial instruments based on the fair value hierarchy of valuation techniques for fair value measurements. Level 1 inputs are unadjusted quoted prices in active markets for identical assets or liabilities at the measurement date. Level 2 inputs include quoted prices for similar assets and liabilities in active markets and inputs other than quoted prices observable for the asset or liability. Level 3 inputs are unobservable inputs for the asset or liability. If the technique used to measure fair value includes inputs from multiple levels of the fair value hierarchy, the lowest level of significant input determines the placement of the entire fair value measurement in the hierarchy. ​ 13 Table of Contents 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 ​ Significant ​ Significant ​ ​ ​ Total ​ ​ ​ Active Markets ​ Observable ​ Unobservable ​ ​ Carrying Value Total (Level 1) Inputs (Level 2) Inputs (Level 3) ​ (In millions) ​ September 30, 2024 ​ Fair Value Measurements at September 30, 2024 ​ Cash and cash equivalents ​ $ 270.3 ​ $ 270.3 ​ $ 270.3 ​ $ — ​ $ — ​ Restricted cash ​ $ 2.4 ​ $ 2.4 ​ $ 2.4 ​ $ — ​ $ — ​ CCF - Cash and cash equivalent ​ $ 178.7 ​ $ 178.7 ​ $ 178.7 ​ $ — ​ $ — ​ CCF - Investments ​ $ 456.7 ​ $ 459.9 ​ $ 459.9 ​ $ — ​ $ — ​ Fixed rate debt ​ $ 410.6 ​ $ 340.1 ​ $ — ​ $ 340.1 ​ $ — ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ (In millions) December 31, 2023 ​ Fair Value Measurements at December 31, 2023 ​ Cash and cash equivalents ​ $ 134.0 ​ $ 134.0 $ 134.0 ​ $ — ​ $ — ​ Restricted cash ​ $ 2.3 ​ $ 2.3 ​ $ 2.3 ​ $ — ​ $ — ​ CCF - Cash and cash equivalent ​ $ 599.4 ​ $ 599.4 ​ $ 599.4 ​ $ — ​ $ — ​ Fixed rate debt ​ $ 440.6 ​ $ 359.9 ​ $ — ​ $ 359.9 ​ $ — ​ ​ ​ The Company uses Level 1 inputs for the fair values of its cash and cash equivalents, restricted cash, and CCF cash and cash equivalents and investments, and Level 2 inputs for fixed rate debt. The fair values of cash and cash equivalents, restricted cash, and cash and cash equivalents in the CCF approximate their carrying values due to the nature of the instruments. The fair value of investments in the CCF is calculated based upon quoted prices available in active market. The fair value of fixed rate debt is calculated based upon interest rates available for debt with terms and maturities similar to the Company’s existing debt arrangements. ​ ​ 12. EARNINGS PER SHARE ​ Basic earnings per share is determined by dividing net income by the weighted average common shares outstanding during the period. The calculation of diluted earnings per share includes the dilutive effect of 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 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 ​ ​ ​ Weighted Per ​ ​ Weighted Per ​ ​ ​ ​ ​ Average ​ Common ​ ​ ​ ​ Average ​ Common ​ ​ Net ​ Common ​ Share ​ Net ​ Common ​ Share (In millions, except per share amounts) ​ Income ​ Shares ​ Amount ​ Income ​ Shares ​ Amount Basic ​ $ 199.1 33.3 ​ $ 5.98 ​ $ 348.4 33.9 ​ $ 10.28 Effect of Dilutive Securities ​ ​ ​ 0.5 ​ ​ ( 0.09 ) ​ ​ ​ 0.5 ​ ​ ( 0.15 ) Diluted ​ $ 199.1 ​ 33.8 ​ $ 5.89 ​ $ 348.4 ​ 34.4 ​ $ 10.13 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Three Months Ended September 30, 2023 ​ Nine Months Ended September 30, 2023 ​ ​ ​ ​ Weighted Per ​ ​ Weighted Per ​ ​ ​ ​ ​ Average ​ Common ​ ​ ​ ​ Average ​ Common ​ ​ Net ​ Common ​ Share ​ Net ​ Common ​ Share (In millions, except per share amounts) ​ Income ​ Shares ​ Amount ​ Income ​ Shares ​ Amount Basic ​ $ 119.9 35.1 ​ $ 3.42 ​ $ 234.7 35.6 ​ $ 6.59 Effect of Dilutive Securities ​ ​ ​ 0.2 ​ ​ ( 0.02 ) ​ ​ ​ 0.2 ​ ​ ( 0.03 ) Diluted ​ $ 119.9 ​ 35.3 ​ $ 3.40 ​ $ 234.7 ​ 35.8 ​ $ 6.56 ​ ​ ​ ​ ​ ​ 13. SHARE-BASED COMPENSATION ​ 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. ​ 14 Table of Contents 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. ​ ​ 14. PENSION AND POST-RETIREMENT PLANS ​ The Company’s pension and post-retirement plans are described in Note 11 to the Consolidated Financial Statements included in Part II, Item 8 of the Company’s Annual Report on Form 10-K for the year ended December 31, 2023 . Components of net periodic benefit cost and other amounts recognized in Other Comprehensive Income (Loss) for the qualified pension plans and the post-retirement benefit plans for the three and nine months ended September 30, 2024 and 2023 consisted of the following: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Pension Benefits ​ Post-retirement Benefits ​ ​ Three Months Ended September 30, ​ Three Months Ended September 30, (In millions) 2024 2023 2024 2023 Components of net periodic benefit cost (credit): ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Service cost ​ $ 1.1 ​ $ 0.3 ​ $ — ​ $ 0.1 Interest cost ​ 2.4 ​ 2.5 ​ 0.3 ​ 0.3 Expected return on plan assets ​ ( 3.8 ) ​ ( 3.0 ) ​ — ​ — Amortization of net loss (gain) ​ 0.1 ​ 0.2 ​ ( 0.2 ) ​ ( 0.5 ) Amortization of prior service credit ​ — ​ — ​ ( 1.0 ) ​ ( 1.0 ) Net periodic benefit cost (credit) ​ $ ( 0.2 ) ​ $ ( 0.0 ) ​ $ ( 0.9 ) ​ $ ( 1.1 ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Pension Benefits ​ Post-retirement Benefits ​ ​ Nine Months Ended September 30, ​ Nine Months Ended September 30, (In millions) 2024 2023 2024 2023 Components of net periodic benefit cost (credit): ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Service cost ​ $ 2.8 ​ $ 2.3 ​ $ 0.2 ​ $ 0.2 Interest cost ​ 7.3 ​ 7.5 ​ 0.8 ​ 0.7 Expected return on plan assets ​ ( 11.4 ) ​ ( 10.4 ) ​ — ​ — Amortization of net loss (gain) ​ 0.3 ​ 0.9 ​ ( 0.6 ) ​ ( 1.5 ) Amortization of prior service credit ​ — ​ — ​ ( 2.8 ) ​ ( 2.8 ) Net periodic benefit cost (credit) ​ $ ( 1.0 ) ​ $ 0.3 ​ $ ( 2.4 ) ​ $ ( 3.4 ) ​ ​ ​ ​ ​ 15. COMMITMENTS AND CONTINGENCIES ​ Environmental Matters: The Company’s Ocean Transportation business has certain risks that could result in expenditures for environmental remediation. The Company believes that based on all information available to it, the Company is currently in compliance, in all material respects, with applicable environmental laws and regulations. ​ Other Matters: The Company and its subsidiaries are parties to, or may be contingently liable in connection with other legal actions arising in the normal course of their businesses, the outcomes of which, in the opinion of management after consultation with counsel, would not have a material effect on the Company’s financial condition, results of operations, or cash flows. ​ ​ ****** 15 Table of Contents