Slide 1: Third Quarter 2012 Earnings Conference Call - November 7, 2012
Third Quarter 2012 Earnings Conference Call - November 7, 2012
Slide 2: 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, November 7, 2012. We believe that our expectations and assumptions are rea
Slide 3: Opening Remarks
Steady overall financial and operational results during the quarter, mixed performance by unit Expenses rose, as expected, due primarily to planned dry-docking Dry-docking to be completed with return to optimal fleet structure by YE Strong volume gains in Guam, rate & volume gain in China, slight up
Slide 4: Consolidated Operating Income
Consolidated Operating Income $34.2 $1.3 $32.9 3Q2012 ($0.7) $2.0 Logistics $3.3 $30.9 TOTAL Change 3Q2011 $4.0 Ocean Transportation $28.9 Net of separation/shutdown expenses on a YOY basis, Operating Income decreased $2.5 million in 3Q and increased $9.0 million YTD $72.8 $2.9 $69.9 YTD 2012 ($2.7)
Slide 5: Ocean Transportation
Ocean Transportation Net of separation/shutdown expenses, Operating Income decreased $1.8 million in 3Q2012 and increased $11.7 million YTD on a YOY basis SSAT contributed $0.7 million in 3Q and $3.1 million YTD on a YOY basis 10.7% $32.9 $307.1 3Q2012 $4.0 $28.9 Operating Income 10.3% Oper. Income
Slide 6: Hawaii Service
Hawaii Service Third Quarter Performance Container volume up modestly Hawaii automobiles up on timing Dry-docking of large ship triggered 10th ship deployment Barge dry-docking led to higher outside transportation costs Outlook for Fourth Quarter Hawaii general economic activity and construction to
Slide 7: Hawaii Economic Indicators
Hawaii Economic Indicators 8.6 9.3 7.7 0.6 (2.0) (8.1) Construction Jobs 2 9.3 5.0 2.6 2.4 2014F 4.2 4.6 2.5 2.4 2015F 3.5 8.6 4.0 7.7 Visitor Arrivals 1 Indicator (% Change YOY, except Unemployment rate) 2010 2011 2012F 2013F Real Gross Domestic Product 1 1.4 (0.2) 1.5 2.3 Unemployment Rate 2 6.9 6
Slide 8: Guam Service
Guam Service Outlook for Fourth Quarter Volume is expected to remain strong until new entrant emerges U.S. military redeployment continues to be delayed Third Quarter Performance Container volume up significantly YOY reflecting competitor exit in 4Q2011 Overall market has contracted slightly Contain
Slide 9: China Expedited Service (CLX)
China Expedited Service (CLX) Third Quarter Performance YOY spot freight rates up significantly, benefits approximately 50% of volume Container volume up 11.0% One extra sailing in quarter Ships at full capacity Outlook for Fourth Quarter Expected seasonal weakening of freight rates, but significant
Slide 10: Matson Logistics
Matson Logistics Third Quarter Performance Int’l intermodal volume off YOY Loss of major ocean carrier customer, and shutdown of CLX2 Domestic intermodal volume strong 53’ container pilot program launched Outlook for Fourth Quarter Income expected to be breakeven Expense control focus 1.1% $2.9 $275
Slide 11: Income Statement (Unaudited)
Income Statement (Unaudited) A clean quarter, with minimal separation costs or discontinued operations Interest expense increased as expected with full quarter of debt now on balance sheet; provides good run rate estimate for future Effective tax rate of 37.1% modestly lower than expected due primar
Slide 12: EBITDA Generation (YOY)
EBITDA Generation (YOY) Net of separation/shutdown expenses, EBITDA decreased $2.2 million in 3Q YOY and increased $11.7 million YTD See the Addendum for a reconciliation of GAAP to non-GAAP for EBITDA and Adjusted EBITDA 3Q2012 EBITDA ($millions) $48.9 $52.5 $20 $30 $40 $50 $60 3Q2011 3Q2012 YTD 20
Slide 13: Capital Expenditures & Dividends
Capital Expenditures & Dividends $9.0 0.1 $8.9 Q2 2012 0.6 0.3 0.2 Logistics $30.8 $13.3 $8.5 Total Capex $13.0 Q3 2012 Dollars in Millions Q1 2012 YTD 2012 Capital Expenditures Ocean Transportation $8.3 $30.2 Capex outlook for 4Q2012 of $10 to $15 million $0.15 quarterly dividend declared on Octobe
Slide 14: Condensed Balance Sheet
Condensed Balance Sheet 9.8 11.5 Cash Assets (dollars in millions) 9/30/12 12/31/11 Other total current assets 199.0 265.2 Investments in affiliates 59.5 56.5 Property, net 776.5 800.5 Other assets 112.0 95.2 LT assets related to A&B discontinued operations -- 1,317.1 Total $1,158.5 $2,544.3 24.8 33
Slide 15: 4Q2012 Outlook
4Q2012 Outlook Ocean Transportation operating income for 4Q2012 expected to be significantly higher than 4Q2011 of $13.0 million, impacted by: Strong freight rate environment in China trade Continued strong Guam volume Logistics operating profit expected to be breakeven in the 4Q2012, impacted by: I
Slide 16: Summary Remarks
Summary Remarks Financial results for the quarter steady Ocean transportation margin improvement, but YTD below long-term goal of 10 – 12 percent Logistics performance remains muted due to weaker highway volume and weak Northern California warehouse results Progress on debt pay down during quarter S
Slide 17: Addendum
Addendum
Slide 18: Use of Non-GAAP Measures
Use of 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 ser
Slide 19: GAAP to Non-GAAP Reconciliation (Consolidated Operating Income)
GAAP to Non-GAAP Reconciliation (Consolidated Operating Income) 8.6 0.0 8.6 0.3 0.0 0.3 Add: Separation Cost 81.9 0.5 72.8 2012 Year to Date 72.9 6.1 66.8 2011 9.0 (5.6) 6.0 Change Third Quarter Dollars in Millions 34.5 0.0 34.2 2012 37.0 6.1 30.9 2011 (2.5) (6.1) 3.3 Change Operating Income Add: Sh
Slide 20: GAAP to Non-GAAP Reconciliation (Ocean Transportation Operating Income)
GAAP to Non-GAAP Reconciliation (Ocean Transportation Operating Income) 8.6 0.0 8.6 0.3 0.0 0.3 Add: Separation Cost 79.0 0.5 69.9 2012 Year to Date 67.3 6.1 61.2 2011 11.7 (5.6) 8.7 Change Third Quarter Dollars in Millions 33.2 0.0 32.9 2012 35.0 6.1 28.9 2011 (1.8) (6.1) 4.0 Change Operating Incom
Slide 21: GAAP to Non-GAAP Reconciliation (Net Debt, EBITDA and Adjusted EBITDA)
GAAP to Non-GAAP Reconciliation (Net Debt, EBITDA and Adjusted EBITDA) 165.5 70.8 7.7 35.3 1.1 52.8 2011 159.1 74.3 9.9 30.6 (12.3) 32.0 2012 Trailing Twelve Months 11.7 125.9 137.6 (2.2) 55.0 52.8 Adjusted EBITDA (net of separation/shutdown cost) 8.7 119.8 128.5 3.6 48.9 52.5 EBITDA 8.6 0.0 8.6 0.3