Slide 1: Fourth Quarter 2022 Earnings Conference Call
1 Fourth Quarter 2022 Earnings Conference Call Fourth Quarter 2022 Earnings Conference Call February 21, 2023
Slide 2: Forward-Looking Statements
2 Fourth Quarter 2022 Earnings Conference Call 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 February 21, 2023. We believe that our expe
Slide 3: Opening Remarks
3 Fourth Quarter 2022 Earnings Conference Call Opening Remarks • In 4Q22, Matson’s Ocean Transportation and Logistics business segments performed well in a difficult business environment • Matson is in a solid financial position – Low leverage – Currently, ~$622 million in Capital Construction Fund
Slide 4: Hawaii Service Fourth Quarter 2022 Performance
4 Fourth Quarter 2022 Earnings Conference Call Hawaii Service Fourth Quarter 2022 Performance • Container volume decreased 13.0% YoY – Lower retail- and hospitality-related demand compared to elevated pandemic levels in 4Q21 – Extra week in 4Q21 – 4Q22 volume lower than volume achieved in 4Q19 • Dur
Slide 5: Hawaii Service – Current Business Trends
5 Fourth Quarter 2022 Earnings Conference Call Hawaii Service – Current Business Trends UHERO Projections (2) (1) Source: https://files.hawaii.gov/dbedt/economic/data_reports/mei/2022-12-state.xls (2) Source: https://uhero.hawaii.edu/wp-content/uploads/2022/12/22Q4_Forecast.pdf 2021 2022 2023P 2024P
Slide 6: China Service Fourth Quarter 2022 Performance
6 Fourth Quarter 2022 Earnings Conference Call China Service Fourth Quarter 2022 Performance Container Volume (FEU Basis) 8,000 13,000 18,000 23,000 28,000 33,000 38,000 43,000 48,000 53,000 58,000 Q1 Q2 Q3 Q4 2021 2022 Note: CCX service started in 3Q21 and ended in 3Q22. 4Q21 volume figure includes
Slide 7: China Service – Current Business Trends
7 Fourth Quarter 2022 Earnings Conference Call China Service – Current Business Trends • Currently in the Transpacific marketplace, business conditions remain challenging – Retailers continue to right-size inventories amid weakening consumer demand, increasing interest rates and economic uncertainty
Slide 8: Guam Service Fourth Quarter 2022 Performance
8 Fourth Quarter 2022 Earnings Conference Call Guam Service Fourth Quarter 2022 Performance Container Volume (FEU Basis) 3,000 3,500 4,000 4,500 5,000 5,500 6,000 Q1 Q2 Q3 Q4 2021 2022 • Container volume decreased 14.0% YoY primarily due to lower retail-related demand – No impact from 53rd week in 4
Slide 9: Alaska Service Fourth Quarter 2022 Performance
9 Fourth Quarter 2022 Earnings Conference Call Alaska Service Fourth Quarter 2022 Performance • Container volume decreased 7.7% YoY – Lower northbound volume primarily due to one less sailing and one less week – Lower southbound volume primarily due to lower domestic seafood volume and one less week
Slide 10: Alaska Service – Current Business Trends
10 Fourth Quarter 2022 Earnings Conference Call Alaska Service – Current Business Trends • Alaska economy continues to show good growth and improvement in key indicators from the depths of the pandemic – Low unemployment rate • In the near-term, we expect continued economic growth in the State – Con
Slide 11: SSAT Joint Venture Fourth Quarter 2022 Performance
11 Fourth Quarter 2022 Earnings Conference Call SSAT Joint Venture Fourth Quarter 2022 Performance Equity in Income of Joint Venture $ 0.0 $ 5.0 $ 10.0 $ 15.0 $ 20.0 $ 25.0 $ 30.0 $ 35.0 $ 40.0 Q1 Q2 Q3 Q4 $ in millions 2021 2022 • Terminal joint venture contribution was $1.0 million; YoY decrease o
Slide 12: Matson Logistics Fourth Quarter 2022 Performance
12 Fourth Quarter 2022 Earnings Conference Call Matson Logistics Fourth Quarter 2022 Performance Operating Income $ 0.0 $ 5.0 $ 10.0 $ 15.0 $ 20.0 $ 25.0 Q1 Q2 Q3 Q4 $ in millions 2021 2022 • Operating income of $12.8 million; YoY decrease of $2.0 million – Primarily due to lower contribution from s
Slide 13: Financial Results – Summary Income Statement
13 Fourth Quarter 2022 Earnings Conference Call Financial Results – Summary Income Statement See the Addendum for a reconciliation of GAAP to non-GAAP Financial Metrics. Year-to-Date Fourth Quarter YTD Ended 12/31 D Quarters Ended 12/31 D ($ in millions, except per share data) 2022 2021 $ 2022 2021
Slide 14: Cash Generation and Uses of Cash
14 Fourth Quarter 2022 Earnings Conference Call Cash Generation and Uses of Cash ($ 200.0) $ 0.0 $ 200.0 $ 400.0 $ 600.0 $ 800.0 $ 1,000.0 $ 1,200.0 $ 1,400.0 Cash Flow from Operations Paydown of Borrowings, net Maintenance & Other Capex New Vessel Capex (1) Capital Construction Fund (2) Dividends S
Slide 15: Financial Results – Summary Balance Sheet
15 Fourth Quarter 2022 Earnings Conference Call Financial Results – Summary Balance Sheet • Total Debt of $517.5 million(1) – In 2022, reduced total debt by $111.5 million – Prepaid $50.4 million in debt in 3Q22 • In January 2023, prepaid $14.3 million for all outstanding principal on Maunawili Titl
Slide 16: Capital Construction Fund (CCF)
16 Fourth Quarter 2022 Earnings Conference Call Capital Construction Fund (CCF) • In February 2023, deposited $100 million in cash into CCF and pledged accounts receivable to reduce taxable income in 2022 – Following $100 million cash deposit, will have cash deposits in the CCF to cover ~66%(1) of t
Slide 17: Review of 2022 Capital Expenditures
17 Fourth Quarter 2022 Earnings Conference Call Review of 2022 Capital Expenditures FY 2022 Comments Capitalized vessel construction expenditures $62.4 million • $11.9 million for new inter-island barge placed into service in 3Q22 • $50.5 million for new vessel milestone payment in 4Q22 and other re
Slide 18: Capital Expenditures Update
18 Fourth Quarter 2022 Earnings Conference Call Capital Expenditures Update ($ in millions) FY 2023 FY 2024 FY 2025 Comments Maintenance and other capital expenditures $80 – 90 $80 – 90 $80 – 90 • Includes Phase II and III work at Sand Island, Honolulu New vessel construction milestone payments and
Slide 19: Closing Thoughts
19 Fourth Quarter 2022 Earnings Conference Call Closing Thoughts • We expect the financial performance in 1Q23 to be the weakest of the year – Normal seasonality returns to our domestic tradelanes and Logistics – Expect our China service to experience freight demand below normalized conditions • In
Slide 20: Closing Thoughts (continued)
20 Fourth Quarter 2022 Earnings Conference Call Closing Thoughts (continued) • Matson is well-positioned financially and operationally to capitalize on opportunities as they emerge – The Matson brand has never been stronger – Matson is in a solid financial position • Investment grade balance sheet w
Slide 21: Appendix
21 Fourth Quarter 2022 Earnings Conference Call Appendix
Slide 22: Appendix – Non-GAAP Measures
22 Fourth Quarter 2022 Earnings Conference Call Appendix – 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, he