Slide 1: Forward Looking Statements
Forward Looking Statements Statements made during this presentation that set forth expectations, predictions, projections or are about future events are based on facts and situations that are known to us as of May 10, 2016. We believe that our expectations and assumptions are reasonable. Actual resu
Slide 2: Matson Today: Connecting the Pacific
Matson Today: Connecting the Pacific Alaska SEA/OAK/HI OAK/HI and LB/HI China-Long Beach Express Hawaiian Islands Guam/Micronesia South Pacific
Slide 3: Investment Highlights
Investment Highlights Leveraging the Matson brand and network into growth opportunities Well maintained fleet with leading on-time vessel arrivals Fastest transit and cargo availability creates 4 to 10 day advantage and premium rates for China service Dedicated terminals with best in class truck tur
Slide 4: Matson is the leading carrier into Oahu and Neighbor Islands
Matson is the leading carrier into Oahu and Neighbor Islands, providing “just-in-time” supply lifeline 5 weekly USWC departures 4 weekly Honolulu arrivals 11-ship fleet deployment offering most frequent and reliable service Matson deploys ~70% of weekly containership capacity to Honolulu Only contai
Slide 5: Hawaii Fleet Update: Aloha Class vessels under construction
Construction in progress on Matson’s two 3,600 TEU “Aloha Class” vessels at Philly Shipyard Expected delivery dates: 3Q18 and 1Q19 Expected benefits of Aloha Class vessels Significantly lowers cost per container in Hawaii fleet Carry higher freight volumes with fewer vessels deployed Expect 10-ship
Slide 6: Unique Expedited China Service (CLX)
Utilization of Jones Act ships in round trip dual head-haul revenue model Weekly 5 ship string connecting 3 ports in China to LA / Long Beach Matson’s expedited service results in 4 to 10 day competitive advantage and premium rates During USWC labor disruption service advantage was as much as 3 week
Slide 7: Matson's China Service Differential from Shanghai International Service
Matson’s China Service Differential from Shanghai International Service Matson CLX Service Matson Advantage Receiving: Customs Declaration and Terminal Cut-off Times 2 to 4 days 1 to 2 days 1 to 2 days Transit: Vessel Speed and Last Call vs Other Port Calls 12 to 15 days 10 days 2 to 5 days Discharg
Slide 8: Guam a Critical Link in CLX Network Configuration
Guam a Critical Link in CLX Network Configuration Connections from Oakland and Pacific Northwest to Guam via Honolulu Volume in Guam remains stable; approximately 75% of Guam cargo is sourced from the U.S. On 8/29/15, the Department of the Navy signed the Record of Decision for relocating U.S. Marin
Slide 9: Alaska Service Similarities with Hawaii Market
Alaska Service Similarities with Hawaii Market Remote, non-contiguous economy dependent on reliable container service as part of vital supply lifeline A market that values premium service Loyal customer base; ~80% overlap with Matson’s Hawaii customers Long-term Stable Revenue Profile Northbound vol
Slide 10: Matson's 35% interest in SSAT terminal operator
Matson’s 35% interest in leading U.S. West Coast terminal operator Contributed assets and terminal leases to JV in 1999 Terminals remain dedicated to Matson Services Vessel stevedoring, terminal services, container equipment maintenance, chassis pools, on-dock Rail Reduced Matson’s capital investmen
Slide 11: Matson Logistics: A National Network of Integrated Services
Matson Logistics A National Network of Integrated Services Leverages Matson brand Scalable model with high ROIC Improving results Warehouse operating improvements Returned operating margins to 2 - 4% target range Focus Organic growth as a national provider of integrated logistics solutions Pursue gr
Slide 12: EBITDA, EPS – 1Q 2016
EBITDA, EPS – 1Q 2016 1Q16 Net Income of $18.1 million versus 1Q15 Net Income of $25.0 million See the Addendum for a reconciliation of GAAP to non-GAAP for Financial Metrics
Slide 13: 1Q2016 Operating Income
1Q2016 Operating Income SSAT had a $2.6 million contribution in 1Q16 compared to a $3.4 million contribution in 1Q15 1Q15 1Q16 Change Revenue $305.5 $366.1 $60.6 Operating Income $43.9 $33.0 ($10.9) Oper. Income Margin 14.4% 9.0% 1Q15 1Q16 Change Revenue $92.7 $88.1 ($4.6) Operating Income $1.0 $1.6
Slide 14: Consolidated Results
Consolidated Results EBITDA essentially flat year-over-year Operating income impacted by additional depreciation & amortization and vessel dry dock amortization Intangibles amortization from Alaska Acquisition Relatively heavy dry docking schedule Higher than normal maintenance capex Expect 2016 dep
Slide 15: Condensed Balance Sheet
Condensed Balance Sheet Assets (in $ millions) 3/31/16 12/31/15 Cash and cash equivalents $ 20.1 $ 25.5 Other current assets 238.8 252.4 Total current assets 258.9 277.9 Investment in terminal joint venture 69.0 66.4 Property and equipment, net 857.4 860.3 Capital Construction Fund – cash on deposit
Slide 16: Cash Generation and Uses of Cash
Cash Generation and Uses of Cash Includes $15 million net CCF withdrawal; does not include $0.6 million in other sources of cash Based on total cash consideration (including common shares, warrants, repaid debt, accrued interest and breakage fees)
Slide 17: Capital Expenditures
2016 maintenance capital spending expected to be approximately $65 million Higher than normal expected range of $40-50 million due to installation of scrubbers on Alaska vessels, and capital projects related to a relatively heavy dry docking schedule New vessel progress payments for two Aloha Class
Slide 18: Vessel Dry-Docking
Expect 2016 vessel dry-docking expenditures of approximately $60 million Hawaii fleet – Vessels dry-dock once every 5 years 2011 and 2012 has heavy dry-docking expenditures; therefore, expect 2016 and 2017 to have relatively heavy dry-docking expenditures Alaska fleet – Vessels dry-dock twice every
Slide 19: 2016 Outlook
Outlook is being provided relative to 2015 operating income Ocean Transportation operating income for full year 2016 is expected to be approximately 15 to 20 percent lower than the $187.8 million achieved in 2015, and for 2Q16 is expected to approximate the $31.4 million achieved in 2Q15 Significant
Slide 20: Addendum – Non-GAAP Measures
Addendum – Non-GAAP Measures Matson reports financial results in accordance with U.S. generally accepted accounting principles (“GAAP”). The Company also considers other non-GAAP measures to evaluate performance, make day-to-day operating decisions, help investors understand our ability to incur and
Slide 21: Addendum — Non-GAAP Measures
Addendum — Non-GAAP Measures Matson reports financial results in accordance with U.S. generally accepted accounting principles ("GAAP"). The Company also considers other non-GAAP measures to evaluate performance, make day-to-day operating decisions, help investors understand our ability to incur and