Slide 1: Investor Presentation – September 2013
Investor Presentation – September 2013
Slide 2: Forward-looking statements
Statements in this presentation that set forth expectations or predictions are based on facts and situations that are known to us as of the date of this filing. Actual results may differ materially, due to risks and uncertainties, such as those described on pages 9-15 of our 2012 Form 10-K and other
Slide 3: Key Investment Highlights
Key Investment Highlights Great brand equity Leading market share in core Hawaii and Guam shipping lanes Significant advantages in premium China service Superior asset quality and flexibility Experienced management team Strong balance sheet and cash flow generation Attractive cash dividend
Slide 4: The Matson Brand
The Matson Brand Premier Ocean Transportation and Logistics Provider 130 years of Leadership in the Pacific Service and Reliability Beyond the Norm Financial Stability Delivering Value to Our Customers
Slide 5: Matson Ocean Transportation
Matson Ocean Transportation Hawaii: 3 Inter-island Barges LTM = Last twelve months as of June 30, 2013 HON = Honolulu; LB = Long Beach; OAK = Oakland; SEA = Seattle Source: Matson 10-K and 10-Q filings 2 Ships HON / OAK / LB 2 Ships HON / SEA / OAK 5 Ships LB / HON / Guam / China
Slide 6: Hawaii: Poised for Growth
Hawaii: Poised for Growth Indicator (% Change YOY, except Unemployment rate) 2011 2012 2013F 2014F 2015F 2016F Real Gross Domestic Product 1 2.1 1.6 2.6 2.4 2.4 2.3 Visitor Arrivals 1 4.0 9.6 4.3 3.0 2.1 2.0 Construction Jobs 2 (0.3) 2.4 9.0 11.0 10.0 7.4 Residential Building Permits 2 (13.5) 18.6 4
Slide 7: Dedicated Terminals Via SSAT Joint Venture
35% ownership stake in 6 west coast terminals Strategic Benefits Guaranteed berth/cranes Quick turn of vessels Maintain sailing schedules Fast cargo availability Quick truck turns Quick yard turns Flexibility to receive freight close to departure Increased customer satisfaction Dedicated Terminals V
Slide 8: Matson Logistics: A National Network of Integrated Services
Matson Logistics A National Network of Integrated Services Seattle Portland Houston Reno St Paul Chicago Birmingham Dallas Philadelphia Atlanta Savannah Jacksonville Akron Indianapolis Long Beach Phoenix Boston Columbus SF/ Oakland Source: Matson management Warehousing & Distribution China Supply Ch
Slide 9: Matson Logistics Priorities
Matson Logistics Priorities Achieve organic growth Highway and intermodal brokerage Distribution and warehouse services Increase coordinated cross-selling with Ocean Transportation Further develop the 53-foot intermodal domestic container pilot program Goal to return operating margins to historical
Slide 10: Seasoned Management Team
Seasoned Management Team Name Title Matson Years in Transportation Matthew J. Cox President & CEO 2001 24 Joel M. Wine SVP & CFO 2011 2 Ronald J. Forest SVP, Operations 1995 35 David L. Hoppes SVP, Ocean Services 1989 32 Kevin C. O’Rourke SVP, General Counsel 1992 35 Vic S. Angoco SVP, Pacific 1996
Slide 11: Matson Financial Data: EBITDA and Capital Expenditures
EBITDA1, 2 (in $ Millions) Matson Financial Data 1 EDITDA and capital expenditure information extracted from previously filed Form 10-Ks which include other income and exclude intercompany income. 2Operating Income is from continuing operations. 2011 expenses included CLX2 costs of $7.1 million prim
Slide 12: Condensed Balance Sheet
Condensed Balance Sheet Assets (in $ millions) 6/30/13 12/31/12 Cash $ 39.1 $ 19.9 Other current assets 214.6 214.2 Total current assets 253.7 234.1 Investment in terminal joint venture 59.0 59.6 Property, net 744.0 762.5 Other assets 111.8 118.1 Total $1,168.5 $1,174.3 Liabilities & Shareholders’ E
Slide 13: Cash Generation and Uses of Cash
Cash Generation and Uses of Cash Generated $79.5 million in cash flow from operations YTD Maintenance capex of $9.8 million YTD Paid $13.0 million in dividends Reduction of debt by $26.7 million ($8.7 million in 2Q) Increased cash position by $19.2 million * Does not include $1.2 million in Other Us
Slide 14: Appendix: Historical Data and Reconciliations
14 Appendix Historical Data and Reconciliations
Slide 15: Ocean Transportation Operating Income
More detailed information is available in previously filed Form 10-Ks and 10-Qs Ocean Transportation Operating Income Operating Income Operating Margin 10-year Average Annual Operating Income: $101.4 million $ millions Adjusted Operating Income Operating Margin $93.2 $105.6 $126.5 $105.6 $57.8 $73.7
Slide 16: SSAT Investment Pre-Tax Income
Pre-Tax Income (Loss) SSAT Investment More detailed information is available in previously filed Form 10-Ks and 10-Qs 10-year Average Annual Pre-tax Income: $8.5 million $ millions $4.7 $17.1 $13.3 $10.7 $5.2 $6.2 $12.8 $8.6 $3.2 $3.4 $0 $2 $4 $6 $8 $10 $12 $14 $16 $18 $20 2003 2004 2005 2006 2007 2
Slide 17: Logistics Operating Income
Logistics Operating Income More detailed information is available in previously filed Form 10-Ks and 10-Qs Operating Income Operating Margin 10-year Average Annual Operating Income: $10.8 million $ millions Operating Income Operating Margin $4.3 $8.9 $20.8 $21.8 $18.5 $6.7 $7.1 $14.4 $4.9 $0.1 $0 $5
Slide 18: Selected Segment Data
Selected Segment Data More detailed information is available in previously filed Form 10-Ks and 10-Qs 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 Capital Expenditures Ocean Transportation $133.2 $128.6 $173.9 $217.1 $65.8 $35.5 $12.7 $69.4 $44.2 $37.0 Vessel Purchases $100.1 $ 98.2 $148.8 $154
Slide 19: Non-GAAP measures definitions
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 service debt and to make cap
Slide 20: GAAP to Non-GAAP Reconciliation (ROIC)
Dollars in Millions, unless otherwise noted 2012 Net Income 45.9 Subtract: Loss from discontinued operations (6.1) Add: Interest expense (tax effected)1 7.2 Total Return 59.2 Total Debt 319.1 Shareholder Equity 279.9 Total Invested Capital2 599.0 ROIC (Total Return/Total Invested Capital) 9.9% The e
Slide 21: GAAP to Non-GAAP Reconciliation (Net Debt & EBITDA)
GAAP to Non-GAAP Reconciliation (Net Debt & EBITDA) (in $ millions) Second Quarter Last Twelve Months (LTM) Year Ended December 31, 2012 2013 Change As of June 30, 2013 2012 2011 Net Income 7.8 20.1 12.3 63.9 45.9 34.2 Subtract: Loss from discontinued operations (7.5) - 7.5 - (6.1) (11.6) Add: Incom
Slide 22: GAAP to Non-GAAP Reconciliation (EBITDA)
GAAP to Non-GAAP Reconciliation (EBITDA) Dollars in Millions 2002 2003 2004 2005 2006 2007 2008 2009 2010 Segment Operating Income Excluding Discontinued Ops 45.5 97.5 119.0 142.6 126.8 148.0 124.1 64.5 125.4 Segment Depreciation and Amortization 51.2 51.9 58.0 60.9 59.6 65.2 68.5 70.6 70.8 EBITDA 9