Slide 1: Forward Looking Statements
Forward Looking Statements Statements made during this call and 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 today, May 4, 2016. We believe that our expectations and assumptions are reasonab
Slide 2: Opening Remarks
Businesses performed largely as expected with operating results lower YOY Significantly lower China freight rates Continued China market softness amid slower than normal post-lunar new year recovery Hawaii container volume up 8.4% YOY Integration of Alaska operations continues to progress well 2016
Slide 3: 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 4: Hawaii Service
Hawaii Service First Quarter Performance YOY container volume growth Sustained competitive gains Modest market growth Higher freight yields 2016 Outlook Modest market growth expected Construction activity expected to be a primary driver Expect moderate YOY volume growth in 2016 Higher volume expecte
Slide 5: Hawaii Fleet Update
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: Hawaii Economic Indicators
Hawaii Economic Indicators Indicator (% Change YOY) 2014 2015 2016F 2017F Real Gross Domestic Product 1.3 4.0 3.2 2.1 Visitor Arrivals 2.3 4.3 1.3 1.0 Construction Jobs 3.5 8.3 6.5 3.4 Unemployment Rate (%) 4.4 3.7 3.0 2.8 Residential Building Permits (9.8) 59.3 10.0 3.2 Non-Residential Building Per
Slide 7: China Expedited Service (CLX)
China Expedited Service (CLX) First Quarter Performance International ocean freight rates, as represented by the SCFI, at historic lows Significantly lower China freight rates and volume Absence of extraordinarily high demand in 1Q15 during USWC labor disruption Continued China market softness amid
Slide 8: Alaska Service
Alaska Service 2016 Outlook Economic headwinds expected Annual container volume expected to be modestly lower than the 67,300 containers carried by Horizon and Matson combined in 2015 First Quarter Performance 1Q16 volume approximated Horizon’s volume in 1Q15 Muted economic activity Lower northbound
Slide 9: SSAT Joint Venture
SSAT Joint Venture First Quarter Performance Terminal joint venture contribution was $0.8 million lower YOY Decrease primarily attributable to lower lift volume 2016 Outlook Well positioned in Oakland for increased lift volumes due to closure of competitor’s terminal Expect operating income contribu
Slide 10: Matson Logistics
Matson Logistics First Quarter Performance Higher intermodal volume Warehouse operating improvements Highway yield improvements Partially offset by higher G&A and lower intermodal yield Source: Association of American Railroads 2016 Outlook Expect 2016 operating income to modestly exceed the 2015 le
Slide 11: 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 12: 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 13: 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 14: 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 15: 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 16: Summary Remarks
Summary Remarks Hawaii Expect to benefit from continued market growth and a stronger market position Alaska Integration progressing well Low energy prices create near-term economic headwinds China International market continues to be chronically oversupplied with freight rates near historic lows Exp
Slide 17: Summary Remarks
Summary Remarks + Hawaii - Expect to benefit from continued market growth and a stronger market position + Alaska - Integration progressing well - Low energy prices create near-term economic headwinds + China - International market continues to be chronically oversupplied with freight rates near his
Slide 18: 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 19: 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