What changed in this filing

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Item 8. Financial Statements and Supplementary Data

2025-02-28 compared with 2024-02-23 · 200 added, 165 removed, 1066 unchanged (26% of the section changed)

14 unchanged sentences

Capital Construction Fund ‌

Income Taxes ‌

Pension and Post-Retirement Plans ‌

83 unchanged sentences

Operating costs

Income from SSAT

Selling, general and administrative

(Loss) Income from SSAT

General and administrative

Total Costs and Expenses

65 unchanged sentences

Deferred income taxes

Loss (Gain) on disposal of property and equipment

(Gain) Loss on disposal of property and equipment

Share-based compensation expense

Income from SSAT

Loss (Income) from SSAT

Distributions from SSAT

5 unchanged sentences

Accounts payable, accruals and other liabilities

Operating lease liabilities

Operating lease assets and liabilities, net

Other long-term liabilities

3 unchanged sentences

Capital expenditures (excluding vessel construction expenditures)

Proceeds from disposal of property and equipment

Payments for intangible asset acquisitions

Proceeds from disposal of property and equipment, net

Payments for asset acquisitions

Cash and interest deposits into Capital Construction Fund

3 unchanged sentences

Repayments of debt

Proceeds from revolving credit facility

Repayments of revolving credit facility

Payment of financing costs

Dividends paid

2 unchanged sentences

Net cash used in financing activities

Net (Decrease) Increase in Cash, Cash Equivalents and Restricted Cash

Net Increase (Decrease) in Cash, Cash Equivalents and Restricted Cash

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

22 unchanged sentences

Share repurchase

Equity interest in SSAT (see Note 4)

Dividends ($ 1.22 per share)

4 unchanged sentences

Share repurchase

Equity interest in SSAT (see Note 4)

Dividends ($ 1.26 per share)

4 unchanged sentences

Share repurchase

Equity interest in SSAT (see Note 4)

Dividends ($ 1.32 per share)

11 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 Dutch Harbor, 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.

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

SSAT currently provides terminal and stevedoring services to various carriers at eight terminal facilities on the U.S.

7 unchanged sentences

(iii) warehousing, trans-loading, value-added packaging and distribution services (collectively, “Warehousing” services);

and (iv) supply chain management, non-vessel operating common carrier (“NVOCC”) freight forwarding and other services.

and (iv) purchase order management, booking services, and non-vessel operating common carrier (“NVOCC”) freight forwarding services (collectively, “Supply Chain Management” services).

SIGNIFICANT ACCOUNTING POLICIES

6 unchanged sentences

The period end for MatNav occurred on the last Friday in December, except for certain Company subsidiaries whose period closed on December 31.

Included in these Consolidated Financial Statements are 52 weeks in fiscal years 2023 and 2022 and 53 weeks in fiscal year 2021 for MatNav.

Included in these Consolidated Financial Statements are 52 weeks in fiscal years 2024, 2023 and 2022 for MatNav.

Foreign Currency Transactions:

21 unchanged sentences

operating lease assets and liabilities;

income (loss) from SSAT;

income (loss) from SSAT including estimates for impairment charges;

and income taxes.

4 unchanged sentences

Restricted cash relates to amounts that are subject to contractual restrictions and are not readily available.

Restricted cash was $ 2.3 million and $ 3.9 million at December 31, 2023 and 2022, respectively, and are included in prepaid expenses and other assets in the Consolidated Balance Sheets.

Restricted cash was $ 2.3 million at December 31, 2023 and was included in prepaid expenses and other assets in the Consolidated Balance Sheets.

The Company did not have any restricted cash at December 31, 2024.

Accounts Receivable, net:

11 unchanged sentences

Prepaid Expenses and Other Assets (in millions)

Income tax receivables, net

Prepaid insurance and insurance related receivables

Prepaid operating expenses

Income tax receivables, net

Restricted cash - vessel construction obligations

Income tax receivables primarily include a federal income tax refund related to the Company’s 2021 federal tax return of approximately $ 118.6 million, overpayments of federal and state taxes paid during the year ended December 31, 2023, and other income tax receivables.

Income tax receivables for the year ended December 31, 2023 included a 2021 federal tax return refund of $ 118.6 million.

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

Deferred Loan Fees:

The Company records deferred loan fees, excluding those related to the revolving credit facility, as a reduction to Total Debt in the Company’s Consolidated Balance Sheets in accordance with Accounting Standards Update (“ASU”) 2015-03, Interest-Imputation of Interest (Subtopic 835-30):

Simplifying the Presentation of Debt Issuance Costs (“ASU 2015-03”).

The Company records deferred loan fees, excluding those related to the revolving credit facility, as a reduction to Total Debt in the Company’s Consolidated Balance Sheets.

These costs are being amortized over the life of the related debt using the effective interest method (see Note 8).

4 unchanged sentences

Other Long-Term Assets (in millions)

Vessel and equipment spare parts

Pension plan assets

Vessel and equipment spare parts

Insurance related receivables

2 unchanged sentences

Property and equipment is depreciated using the straight-line method over the estimated useful lives of the assets.

The estimated useful lives of property and equipment range up to the following maximum life as follows:

The estimated useful lives of property and equipment range up to the following maximum lives:

Classification

1 unchanged sentence

Containers and chassis

Terminal facilities and other property

Terminal equipment and other property

Capitalized Interest:

26 unchanged sentences

Impairment Evaluation of Long-Lived Assets, Intangible Assets and Goodwill :

The Company evaluates its long-lived assets, intangible assets and goodwill for possible impairment in the fourth quarter, or whenever events or changes in

circumstances indicate that it is more likely than not that the fair value is less than its carrying amount.

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

The Company has reporting units within the Ocean Transportation and Logistics reportable segments.

10 unchanged sentences

If any impairment is identified, the Company evaluates if the decrease in the fair value of the investment below its carrying value is other-than-temporary.

No impairment of the Company’s investment in SSAT was identified during the years ended December 31, 2023, 2022 and 2021.

The Company did not identify any impairment of its equity investment in SSAT during the years ended December 31, 2024, 2023 and 2022.

Other Liabilities:

2 unchanged sentences

Other Liabilities (in millions)

Payroll and vacation

Employee incentives and other benefits

Payroll and vacation

Insurance reserves and other related liabilities - short term

Multi-employer withdrawal liabilities - short term

Income tax and other tax related liabilities

Deferred revenues

Multi-employer withdrawal liabilities - short term

Other short-term liabilities

6 unchanged sentences

Pension and post-retirement liabilities

Long-term tax liabilities

Other long-term liabilities

26 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 general and administrative expenses, are charged to operating costs as incurred.

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

3 unchanged sentences

Related costs are recognized as incurred.

In July 2024, the Company discontinued its vessel management and related services.

Years Ended December 31,

1 unchanged sentence

Transportation Brokerage and Freight Forwarding services

Warehousing and distribution services

Supply chain management and other services

Warehousing services

Supply Chain Management services

(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 and other services revenue categories 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 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.

3 unchanged sentences

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.

● Warehousing services revenue consist of amounts billed to customers for storage, handling, and value-added packaging of customer merchandise.

Storage revenue is recognized in the month the service is provided to the

Storage related costs are recognized as incurred.

Other warehousing and distribution services revenue and related costs are recognized in proportion to the services performed.

Other Warehousing services revenue and related costs are recognized in proportion to the services performed.

● Supply Chain Management and other services revenue, and related costs are recognized in proportion to the services performed.

3 unchanged sentences

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 administration expenses in the Consolidated Statements of Income and Comprehensive Income.

Customer Concentration:

The Ocean Transportation segment serves customers in numerous industries and carries a wide variety of cargo, mitigating its dependence upon any single customer or single type of cargo.

In 2023, the Company’s 10 largest Ocean Transportation customers accounted for approximately 16 percent of the Company’s Ocean Transportation operating revenue.

The Logistics segment serves customers in numerous industries and geographical locations.

In 2023, the Company’s 10 largest Logistics customers accounted for approximately 21 percent of the Company’s Logistics operating revenue.

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

The Company recognizes dividends as a liability when approved by the Board of Directors.

2 unchanged sentences

As of December 31, 2024, the number of remaining shares that may be repurchased under the Company’s share repurchase program was approximately 0.8 million shares.

On February 27, 2025, the Company’s Board of Directors approved an additional 3.0 million shares of common stock to be added to the Company’s existing share repurchase program and extended the program’s expiration date to December 31, 2027.

Shares may be repurchased in the open market from time to time, and may be made pursuant to a trading plan in accordance with Rule 10b5-1 of the Security Exchange Act of 1934.

Share-Based Compensation:

10 unchanged sentences

Accordingly, a recalculation of some per-share amounts and percentages, if based on the reported data, may be slightly different.

New Accounting Pronouncements:

Reclassifications:

The Company reclassified amortization of deferred loan fees of $ 2.2 million and $ 2.1 million from Depreciation and amortization to Other within cash flows from operating activities in the Consolidated Statements of Cash Flows for the years ended December 31, 2023 and 2022, respectively, to conform to current year cash flow presentation.

There were no changes in Net cash provided by operating activities as a result of this reclassification for the years ended December 31, 2023 and 2022.

Recently adopted accounting pronouncements:

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

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

ASU 2023-07 requires 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.

ASU 2023-07 requires companies to disclose on an annual and interim basis, significant segment expenses that are regularly provided to the chief operating decision maker.

The Company adopted ASU 2023-07 during the year ended December 31, 2024 (see Note 3).

New Accounting Pronouncements:

In November 2024, the FASB issued ASU 2024-03, Income Statement - Reporting Comprehensive Income - Expense Disaggregation Disclosures (Subtopic 220-40):

Disaggregation of Income Statement Expenses (“ASU 2024-03”).

ASU 2024-03 requires disclosure of certain expenses in the financial statements including

employee compensation, depreciation and amortization of intangible assets on an annual and interim basis.

ASU 2024-03 is effective for fiscal years beginning after December 15, 2026 and interim periods within fiscal years beginning after December 15, 2027.

ASU 2024-03 can be adopted either:

(i) prospectively to the financial statements issued for reporting periods after the effective date of the ASU or (ii) retrospectively to any or all prior periods presented in the financial statements.

The Company is currently evaluating the effects of adopting ASU 2024-03 but does not expect it will have a material impact on the Company’s consolidated financial statements.

2 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

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 (see Note 4).

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 $ 208.7 million, $ 270.9 million and $ 213.8 million for the years ended December 31, 2023, 2022 and 2021, respectively, have been eliminated from operating revenues in the table below.

Reportable segments are components of an enterprise that engage in business activities from which it may earn revenues and incur expenses, whose operating results are regularly reviewed by the chief operating decision maker (“CODM”) to make decisions about resources to be allocated to the segment and assess its performance, and for which discrete financial information is available.

The Company’s CODM is its Chief Executive Officer.

The Company identified two reportable segments on the basis of internal information provided to the CODM:

Ocean Transportation and Logistics which are described in Note 1.

Each segment is managed separately based upon fundamental differences in the operations of each segment.

The Company’s Ocean Transportation service primarily involves the transportation of customer cargo on Company owned and chartered vessels.

The Company’s Logistics service provides customers with logistics solutions primarily using third-party purchased transportation.

The Company’s CODM assesses the performance of each segment using operating income.

The Company’s CODM reviews the performance of each segment using monthly internal reports which provide variance analysis of actual results by segment compared to budget, forecast and prior year.

The Company’s CODM uses this information when making decisions about the allocation of operating and capital resources to each segment.

Segment balance sheet information is not provided to the CODM as capital decisions are based upon the Company’s consolidated balance sheet.

Reportable segment financial information for the years ended December 31, 2024, 2023 and 2022, are as follows:

Years Ended December 31,

December 31, 2024

December 31, 2023

December 31, 2022

(In millions)

Operating Revenue:

Ocean Transportation

Logistics (2)

Total Operating Revenue

Operating Income:

Ocean Transportation

Total Operating Income

Ocean Transportation

Operating Revenue (1)(2)

Operating Expenses:

Operating costs:

Direct cargo expense

Vessel operating expense

Operating overhead (3)

Direct operating costs

Depreciation and amortization

Total operating costs

Loss (Income) from SSAT

General and administrative

Total Costs and Expenses

Operating Income:

Interest income

3 unchanged sentences

Capital Expenditures (4)

Ocean Transportation

Total Capital Expenditures

Depreciation and Amortization:

Ocean Transportation

Deferred dry-docking amortization - Ocean Transportation

Total Depreciation and Amortization

(1) Ocean Transportation operating revenue excludes inter-segment revenue of $ 92.8 million, $ 76.5 million and $ 93.6 million for the years ended December 31, 2024, 2023 and 2022, respectively.

(2) Logistics operating revenue excludes inter-segment revenue of $ 153.0 million, $ 132.2 million and $ 177.3 million for the years ended December 31, 2024, 2023 and 2022, respectively.

(3) Ocean Transportation segment information includes $ 2.2 million, $ 83.1 million, and $ 56.3 million of income from the Company’s investment in SSAT for the years ended December 31, 2023, 2022 and 2021, respectively.

As of December 31,

(In millions)

Identifiable Assets:

Ocean Transportation (1)

(1) The Ocean Transportation segment includes $ 85.5 million and $ 81.2 million related to the Company’s investment in SSAT as of December 31, 2023 and 2022, respectively.

(3) Ocean Transportation operating overhead includes dry-docking amortization of $ 27.2 million, $ 25.3 million and $ 24.9 million for the year ended December 31, 2024, 2023 and 2022, respectively.

(4) Capital expenditures exclude accrued capital expenditures of $ 7.9 million, $ 10.8 million and $ 5.5 million as of December 31, 2024, 2023 and 2022, respectively.

Ocean Transportation’s operating expenses includes the following:

● Operating costs includes:

o Direct Cargo Expense includes terminal handling costs including labor and wharfage, outside purchased transportation and other related costs.

o Vessel Operating Expense includes crew wages and related costs;

pilots, tugs, lines and related costs;

vessel charter expenses;

and other vessel operating related expenses.

o Operating Overhead Expense includes vessel repair and maintenance costs, inactive vessel costs, dry-docking amortization, equipment lease costs, equipment repair costs, insurance, port engineers and other maintenance costs, other vessel and shoreside related overhead and other indirect costs.

o Depreciation and Amortization Expense includes depreciation of property and equipment and amortization of intangible assets.

● Income from SSAT includes the Company’s share of income from its equity investment in SSAT and has been aggregated into the Ocean Transportation segment due to the operations of SSAT being an integral part of the Company’s Ocean Transportation business (see Note 4).

● General and Administrative Expense includes employee salaries, wages and other related costs, equipment maintenance, computer hardware and software, professional fees and other general and administrative expenses.

Logistics’ operating expenses includes the following:

● Operating costs includes:

o Direct Operating Expense includes transportation costs, transportation brokerage expenses, agency commissions, leases of warehouses, cross-dock and other facility operating costs, wages and other related costs, and other operating overhead.

o Depreciation and Amortization Expense includes depreciation of property and equipment and amortization of intangible assets.

● General and Administrative Expense includes employee salaries, wages and other related costs, computer hardware and software, professional fees and other general and administrative expenses.

Accordingly, inter-segment revenue of $ 245.8 million, $ 208.7 million and $ 270.9 million for the years ended December 31, 2024, 2023 and 2022, respectively, have been eliminated from operating revenues.

Customer Concentration:

The Company’s Ocean Transportation segment serves customers in numerous industries and carries a wide variety of cargo, mitigating its dependence upon any single customer or single type of cargo.

The Company’s 10 largest Ocean Transportation customers account for approximately 18 percent of the Company’s Ocean Transportation revenue.

The Company’s Logistics segment serves customers in numerous industries.

The Company’s 10 largest logistics customers account for approximately 17 percent of the Company’s Logistics revenue.

INVESTMENT IN SSAT

2 unchanged sentences

The Company’s investment in SSAT was $ 84.1 million and $ 85.5 million at December 31, 2024 and 2023, respectively.

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

After the completion of this transaction, SSAT retains a 50 percent

controlling interest in SSAT ST, while the third-party company increased its non-controlling interest to 50 percent in SSAT ST.

As a result of this transaction, the Company recorded an increase in its investment in SSAT of approximately $ 13.2 million, an increase in deferred income taxes of $ 3.1 million, and a corresponding increase in retained earnings of $ 10.1 million during the year ended December 31, 2024.

On September 16, 2022, SSAT completed the purchase of a 20 percent equity interest in SSAT Terminals (Oakland), LLC (“SSAT Oakland”) from a third-party company.

2 unchanged sentences

As a result of this transaction, the Company recorded a decrease of $ 15.5 million in its investment in SSAT, an increase in deferred tax assets of $ 3.9 million, and a corresponding decrease in retained earnings of $ 11.6 million during the year ended December 31, 2022.

The Company’s share of income recorded in the Consolidated Statements of Income and Comprehensive Income and dividends received by the Company during the years ended December 31, 2023, 2022 and 2021 are as follows:

The Company’s share of income recorded in the Consolidated Statements of Income and Comprehensive Income and distributions received by the Company during the years ended December 31, 2024, 2023 and 2022 are as follows:

Years Ended December 31,

2 unchanged sentences

Distributions received from SSAT

Includes an impairment charge of $ 18.4 million representing the Company’s portion of an impairment charge recorded by SSAT, which related to the write-down of an asset group which includes a terminal operating lease asset during the year ended December 31, 2024.

No impairment charges were recorded during the years ended December 31, 2023 and 2022.

The Company’s Ocean Transportation segment operating costs for terminal services provided by SSAT include $ 320.9 million, $ 297.2 million and $ 308.3 million for the years ended December 31, 2024, 2023 and 2022, respectively.

Accounts payable and accrued liabilities in the Consolidated Balance Sheets for terminal services payable to SSAT include $ 34.4 million and $ 43.4 million at December 31, 2024 and 2023, respectively.

A summary of the Condensed Balance Sheets of SSAT at December 31, 2023 and 2022 are as follows:

A summary of SSAT’s Condensed Balance Sheets at December 31, 2024 and 2023 are as follows:

As of December 31,

5 unchanged sentences

Total Liabilities and Equity

A summary of the Condensed Statements of Operating Income and Net Income of SSAT for the years ended December 31, 2023, 2022 and 2021 are as follows:

A summary of SSAT’s Condensed Statements of Operating Income and Net Income for the years ended December 31, 2024, 2023 and 2022 are as follows:

Years Ended December 31,

3 unchanged sentences

Operating income

Net Income (1)(2)

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

(2) Includes net income or loss attributable to noncontrolling interests.

Net (Loss) Income (1)(2)

(1) Includes an impairment charge related to the write-down of an asset group which includes a terminal operating lease asset during the year ended December 31, 2024.

No impairment amounts were recorded during the years ended December 31, 2023 and 2022.

(2) Includes earnings from equity method investments held by SSAT less earnings allocated to non-controlling interests and includes net income or loss attributable to noncontrolling interests.

PROPERTY AND EQUIPMENT

6 unchanged sentences

Containers and equipment

Terminal facilities and other property

Terminal equipment and other property

New vessel construction in progress

1 unchanged sentence

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

Delivery of the first vessel is currently anticipated to be in the fourth quarter of 2026, with subsequent deliveries expected in the second and fourth quarters of 2027.

Delivery of the first vessel is currently anticipated to be in the first quarter 2027, with subsequent deliveries expected in the third quarter 2027 and second quarter 2028.

Depreciation expense for the years ended December 31, 2024, 2023 and 2022 are as follows:

20 unchanged sentences

Ocean Transportation intangible assets of $ 140.6 million relate to customer relationships acquired as part of the acquisition of Horizon, and are being amortized over 21 years .

Logistics intangible assets include $ 79.3 million of customer relationships which are being amortized over 20 years , and $ 27.3 million of an indefinite life trade name, both

acquired as part of the Span Alaska acquisition.

Logistics intangible assets include $ 79.3 million of customer relationships which are being amortized over 20 years , and $ 27.3 million of an indefinite life trade name, both acquired as part of the Span Alaska acquisition.

The remaining Logistics customer relationships relate to various acquisitions and are being amortized over a period of 3 to 13 years .

27 unchanged sentences

Treasury Obligation Funds or other eligible credit-based investments for maturities of up to 3 years.

A summary of the activities within the CCF cash account for the years ended December 31, 2023 and 2022 consists of the following:

A summary of the activities within the CCF cash and cash equivalents, and investment accounts for the years ended December 31, 2024 and 2023 consists of the following:

(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

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

Proceeds from U.S.

Treasury debt securities at maturity

Interest income deposited into the CCF

Repurchase of assigned accounts receivable

Qualifying withdrawal payments out of the CCF

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

Withdrawals of U.S.

Treasury debt securities at maturity

Accretion of investments

Total CCF investments balance at end of period

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

Cash on deposit and assigned accounts receivables in the CCF as of December 31, 2024 and 2023 are as follows:

2 unchanged sentences

Capital Construction Fund:

Cash on deposit

Cash and cash equivalents, and investments account

Assigned accounts receivables

3 unchanged sentences

Treasury obligations fund had a weighted average life of 96 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.

In February 2024, the Company purchased approximately $ 450 million of fixed-rate U.S.

Treasuries with CCF cash deposits.

The fixed-rate investments have various maturity dates up to 3 years .

The Company’s CCF investments are in fixed-rate U.S.

Treasury obligations with various maturity dates of up to 3 years.

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

Assigned accounts receivable in the CCF are classified as part of accounts receivable on the Company’s Consolidated Balance Sheets due to the nature of the assignment.

During the year ended December 31, 2024, the Company repurchased assigned accounts receivables of $ 53.8 million.

During the year ended December 31, 2023, the Company assigned $ 200.0 million of accounts receivables into the CCF.

The Company’s debt consists of the following as of December 31, 2024 and 2023:

4 unchanged sentences

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

4 unchanged sentences

Private Placement Term Loans :

During 2012, the Company issued $ 170.0 million of unsecured notes, which were funded in three tranches.

The remaining tranche, at an interest rate of 3.66 percent, was fully repaid during 2023.

In September 2016, the Company issued $ 200.0 million of 15 -year senior unsecured notes (the “Series D Notes”) at an interest rate of 3.14 percent, payable semi-annually.

In December 2016, the Company issued $ 75 million of 11 -year senior unsecured notes at an interest rate of 3.37 percent, payable semi-annually (the “Series A Notes”).

In December 2016, the Company issued $ 75 million of 11 -year senior unsecured notes at an interest rate of 3.37 percent, payable semi-annually.

Title XI Bonds:

In September 2003, MatNav issued $ 55.0 million in U.S.

government guaranteed ship financing bonds (“Title XI”) to finance the delivery of Manukai (the “Manukai Title XI Bonds”).

In August 2004, MatNav issued $ 55.0 million of U.S.

government guaranteed ship financing bonds (Title XI) to finance the delivery of Maunawili (the “Maunawili Title XI Bonds”).

In January 2023, the Company prepaid $ 14.3 million of outstanding principal on the Maunawili Title XI Bonds representing all of the remaining outstanding principal for this bond.

In March 2023, the Company also prepaid the outstanding principal of approximately $ 12.1 million on the Manukai Title XI Bonds, representing all of the remaining outstanding principal for this bond.

In April 2020, MatNav issued $ 185.9 million in U.S.

19 unchanged sentences

As of December 31, 2024, the Company had $ 643.9 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 December 31, 2023.

The Company used $ 6.1 million of the revolving credit facility for letters of credit outstanding as of

December 31, 2024.

Borrowings under the revolving credit facility are classified as long-term debt in the Company’s Consolidated Balance Sheets, as principal payments are not required until the maturity date.

17 unchanged sentences

Total amortization expense of deferred loan fees

Debt Covenants in 2020 Title XI Debt Agreements:

Title XI Debt Covenants:

The Title XI Debt agreements contain customary representations and warranties as well as affirmative and negative covenants, defaults and other provisions typical for MARAD-guaranteed financings of this type, with definitions, limitations and financial tests all as negotiated between MatNav and MARAD.

6 unchanged sentences

Under the Title XI Debt agreements, MARAD has guaranteed certain obligations of MatNav.

MatNav has agreed to reimburse MARAD for any payments it makes under the MARAD guaranty, and MatNav’s obligations to MARAD

with respect to the 2020 Title XI Debt are secured by a mortgage on the Vessels and certain other related assets (the “Collateral”).

MatNav has agreed to reimburse MARAD for any payments it makes under the MARAD guaranty, and MatNav’s obligations to MARAD with respect to the Title XI Debt are secured by a mortgage on the Vessels and certain other related assets (the “Collateral”).

In addition, MatNav’s obligations to MARAD with respect to the Title XI Debt are guaranteed by the Company under an Affiliate Guaranty.

50 unchanged sentences

Total income taxes

Income taxes for the years ended December 31, 2023, 2022 and 2021 differ from amounts computed by applying the statutory federal rate to income before income taxes as follows:

Income taxes for the years ended December 31, 2024, 2023 and 2022 vary from amounts computed by applying the statutory U.S.

federal income tax rate due to the following:

Years Ended December 31,

Computed federal income tax expense

State income tax

federal income tax rate

State and local taxes, net of federal benefit

Foreign-derived intangible income (FDII)

Valuation allowance

Foreign taxes

2 unchanged sentences

Effective income tax rate

The tax effects of temporary differences that gave rise to significant portions of the deferred tax assets and deferred tax liabilities at December 31, 2023 and 2022, were as follows:

The tax effects of temporary differences that gave rise to significant positions of deferred tax assets and deferred tax liabilities at December 31, 2024 and 2023, were as follows:

As of December 31,

2 unchanged sentences

Operating lease liabilities

Multi-employer withdrawal liabilities

Deferred compensation

state alternative minimum tax credits

Multi-employer withdrawal liabilities

Insurance reserves

state alternative minimum tax credits

Total deferred tax assets

7 unchanged sentences

Deferred tax liability, net

Valuation Allowance:

Valuation allowances are recorded against the Company’s unusable state income tax net operating losses (“NOLs”) and alternative minimum tax credits, and were $ 5.3 million and $ 7.4 million as of December 31, 2023 and 2022, respectively.

The Company believes that it is more likely than not that the benefit from these deferred assets will not be realized.

Income Tax Receivables:

The Company has income tax receivables, net of income tax payables, of approximately $ 125.2 million and $ 170.8 million at December 31, 2023 and 2022, respectively, related to a 2021 federal income tax refund of approximately $ 118.6 million, overpayments of federal and state taxes paid during the year ended December 31, 2023, and other income tax receivables.

The Company had income tax receivables of approximately $ 2.0 million and $ 125.2 million at December 31, 2024 and 2023, respectively.

The income tax receivable for the year ended December 31, 2023 included a 2021 federal income tax refund of approximately $ 118.6 million.

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

These income tax receivable amounts have been included in prepaid expenses and other assets in the Company’s Consolidated Balance Sheets (see Note 2).

Net Operating Losses and Tax Credit Carryforwards:

The Company’s NOLs and tax credit carryforwards consist of the following at December 31, 2023 and 2022:

State Income Tax Operating Losses, State Tax Credit and Valuation Allowance:

The Company’s U.S.

state income tax net operating losses (“NOLs”) and U.S.

state tax credit carryforwards consist of the following at December 31, 2024 and 2023:

(In millions)

Expiration Date

federal income tax NOLs

Various dates beginning in 2027

state income tax NOLs (1)

Various dates beginning in 2032

state alternative minimum tax credit

state alternative minimum tax credits

No expiration date

State income tax NOLs are presented on a gross tax basis.

The Company does not expect to benefit from $ 152.3 million of U.S.

state income tax NOLs as of December 31, 2023.

federal and state income tax NOLs in the Company’s filed income tax returns include unrecognized tax benefits.

The deferred tax assets recognized for those NOLs are presented net of these unrecognized tax benefits.

As a result of changes in tax legislation, the use of a portion of the Company’s domestic NOL and tax credit carryforwards may be limited in future periods.

Further, a portion of the federal and state income tax NOLs and tax credit carryforwards may expire before being applied to reduce future income tax liabilities.

State income tax NOLs were acquired as part of the Horizon acquisition and are presented on a gross tax basis.

state income tax NOLs are excluded from the Company’s deferred tax assets and deferred tax liabilities above as the Company does not expect to benefit from any of the $ 136.5 million and $ 152.3 million balance as of December 31, 2024 and 2023, respectively.

The Company recorded a valuation allowance against its unusable portion of U.S.

state income tax NOLs of $ 5.0 million and $ 5.3 million as of December 31, 2024 and 2023, respectively, as the Company believes that it is more likely than not that the benefit from these deferred assets will not be realized.

Unrecognized Tax Benefits:

Total unrecognized benefits represent the amount that, if recognized, would favorably affect the Company’s income taxes and effective tax rate in future periods.

The Company does not expect a material

change in gross unrecognized benefits in the next twelve months.

The Company does not expect a material change in gross unrecognized benefits in the next twelve months.

A reconciliation of the beginning and ending amount of gross unrecognized tax benefits is as follows:

Years Ended December 31,

Unrecognized Tax Benefits (in millions)

Balance at December 31, 2020

Tax position changes in current year

Tax position changes in prior years

Reductions for lapse of statute of limitations

Balance at December 31, 2021

Tax position changes in current year

Tax position changes in prior years

Reductions for lapse of statute of limitations

Balance at December 31, 2022

Balance at beginning of year

Tax position changes in current year

1 unchanged sentence

Reductions for lapse of statute of limitations

Balance at December 31, 2023

Balance at end of year

Included in the balance of unrecognized tax benefits at December 31, 2024 are potential benefits of $ 22.9 million that, if recognized, would affect the Company’s income taxes and effective tax rate.

16 unchanged sentences

The Benefits Investment Committee is also responsible for appointing investment managers and monitoring their performance.

The Company’s investment policy permits investments in marketable equity securities, such as domestic and foreign stocks, domestic and foreign bonds, venture capital, real estate investments, and cash equivalents.

The Company’s investment policy permits investments in marketable equity securities, such as domestic and foreign stocks, domestic and foreign bonds, real estate investments, and cash equivalents.

The Company’s investment policy does not permit direct investment in certain types of assets, such as options or commodities, or the use of certain strategies, such as short selling or the purchase of securities on margin.

92 unchanged sentences

Benefits paid, net of subsidies received

Expenses paid

Benefit obligation at end of year

5 unchanged sentences

Benefits paid, net of subsidies received

Expenses paid

Fair value of plan assets at end of year

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Expected return on plan assets

Amortization of net loss (gain)

Amortization of net actuarial loss (gain)

Amortization of prior service credit

2 unchanged sentences

Net (gain) loss

Amortization of net (loss) gain

Amortization of net actuarial (loss) gain

Amortization of prior service credit

38 unchanged sentences

The Company may make discretionary matching contributions equal to a specified percentage of each participant’s 401(k) contributions and makes other non-discretionary contributions.

For the year ended December 31, 2023, the Company provided discretionary matching contributions of up to 4 percent of eligible employee compensation.

For the year ended December 31, 2024, the Company provided employees with discretionary matching contributions of up to 3 percent of eligible employee compensation, and for a select group of employees, up to 4 percent of eligible employee compensation.

The Company’s matching contributions and other contributions expensed in 2024, 2023 and 2022 were $ 4.6 million, $ 4.2 million and $ 3.6 million, respectively.

The Company may also provide a discretionary profit sharing contribution under the qualified defined contribution plans to non-bargaining unit employees, if both a minimum threshold of Company performance is achieved and the Board has approved the profit sharing contribution.

For certain eligible employees, supplemental profit sharing contributions are credited under a non-qualified plan to be paid after separation from service from the Company’s general funds so that total profit sharing contributions would be substantially equal to amounts that would have been contributed to the Company’s qualified defined contribution plans if it were not for limitations imposed by income tax law.

13 unchanged sentences

The zone status is based on information that the Company received from the plan and is certified by the plan’s actuary.

Among other factors, plans in the red zone are generally less than 65 percent funded;

plans in the orange zone are both a) less than 80 percent funded and

b) have an accumulated/expected funding deficiency in any of the next six plan years, net of any amortization extensions;

Among other factors, plans in the red

zone are generally less than 65 percent funded;

plans in the orange zone are both a) less than 80 percent funded and b) have an accumulated/expected funding deficiency in any of the next six plan years, net of any amortization extensions;

plans in the yellow zone meet either one of the criteria mentioned in the orange zone;

76 unchanged sentences

Basic earnings per share are determined by dividing net income by the weighted-average common shares outstanding during the year.

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

The computation of weighted average dilutive shares outstanding excluded a nominal amount of anti-dilutive non-qualified stock options for each of the years 2023, 2022 and 2021.

The denominators used to compute basic and diluted earnings per share for the years ended December 31, 2023, 2022 and 2021 are as follows:

The calculation of diluted earnings per share includes the dilutive effect of unvested restricted stock units.

The computation of weighted average common shares excluded a nominal amount of anti-dilutive restricted stock units for each of the years 2024, 2023 and 2022.

The computations for basic and diluted earnings per share for the years ended December 31, 2024, 2023 and 2022 are as follows:

Year Ended December 31, 2024

42 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 and cash equivalents, restricted cash and cash on deposit in the CCF, and Level 2 inputs for its fixed rate debt.

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

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

11 unchanged sentences

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

14 unchanged sentences

Amounts are considered obligations if a contract has been agreed to specifying significant terms of the contract, and the amounts are not reflected in the Consolidated Balance Sheets as of December 31, 2024.

These amounts are not recorded on the Company’s Consolidated Balance Sheets as of December 31, 2023 and it is not expected that the Company or its subsidiaries will be called upon to advance funds under these commitments and contractual obligations.

These amounts are not recorded on the Company’s Consolidated Balance Sheet as of December 31, 2024 and it is not expected that the Company or its subsidiaries will be called upon to advance funds under these commitments and contractual obligations.

Contingencies:

7 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-K

Item 8. Financial Statements and Supplementary Data