Slide 1: Matson to Acquire Horizon's Alaska Operations
MATSON TO ACQUIRE HORIZON’S ALASKA OPERATIONS
Slide 2: Forward Looking Statements
Forward Looking Statements Certain information set forth in this communication, including financial estimates, projections about the industries and markets in which Matson and Horizon operate, and statements as to the expected timing, completion and effects of the proposed merger between Matson and
Slide 3: Additional Information
Additional Information This communication is being made in respect of the proposed transaction involving Matson and Horizon. Horizon intends to file with the SEC a proxy statement in connection with the proposed transaction with Matson. Horizon also intends to file with the SEC other documents regar
Slide 4: Compelling Strategic Rationale
Compelling Strategic Rationale Annual revenue of ~$330 million Unique opportunity to leverage Matson’s platform into Alaska Attractive Alaska market a natural geographic extension in the Pacific Geographic revenue diversification Significantly grows and enhances Matson’s platform, providing multiple
Slide 5: Transaction Highlights
$0.72 per common share in cash, plus repayment of Horizon’s debt at closing Equity value of $69.2 million(1); transaction value of $456.1 million(2) Transaction Highlights Matson to acquire the stock of Horizon which will include the Alaska operations and the assumption of all non-Hawaii business li
Slide 6: Two Step Transaction Structure
Matson to Acquire Horizon after Hawaii Business Sale Two Step Transaction Structure Horizon Alaska Hawaii Pasha Horizon Matson Puerto Rico Step 1: Hawaii Business Sale to Pasha Step 2: Matson Acquires Stock of Horizon Alaska Horizon to cease service by end of 2014 $141.5 M
Slide 7: A Valuable Franchise in an Attractive Market
A Valuable Franchise in an Attractive Market Horizon pioneered container shipping into Alaska over 50 years ago and continues to be a market leader Long-term steady economic growth High vessel utilization Well-Balanced Demand and Supply Remote, non-contiguous economy dependent on reliable container
Slide 8: Reliable Alaska Operating Platform
Kodiak Anchorage Tacoma Dutch Harbor Reliable Alaska Operating Platform 2X Weekly 1X Weekly Vessel Name Year Built Power Plant TEU Status Anchorage 1987 Diesel 1,668 Active Tacoma 1987 Diesel 1,668 Active Kodiak 1987 Diesel 1,668 Active Consumer 1973 Steam 1,690 Reserve Active vessels are well-maint
Slide 9: Meaningful EPS and Cash Flow Accretion
Meaningful EPS and Cash Flow Accretion Illustrative Cash Flow per share Accretion ($ in millions, except per share amounts) Run-rate EBITDA (within 2 years post-closing) $70 $70 Less: Maintenance capital expenditures ($8) ($5) Less: Interest expense ($10) ($9) Less: Income tax expense ($10) ($11) Il
Slide 10: Near-term Scrubber Investment and Capex Profile
Near-term Scrubber Investment and Capex Profile Current plans to install main engine exhaust scrubbers on the three active diesel powered vessels To comply with ECA emissions requirements Estimated capital cost of $6-8 million per vessel; $18-24 million in aggregate in 2015-2016 Expect installation
Slide 11: Transaction Funded Through Existing Liquidity
Transaction Funded Through Existing Liquidity Matson expects to fund transaction from existing cash on hand and available borrowings under its existing revolving credit facility Sources and Uses of Funds ($ in millions) Sources of Funds: Cash and Cash Equivalents $225 Borrowing on Revolving Credit F
Slide 12: Investment Grade Credit Metrics Maintained
Investment Grade Credit Metrics Maintained Headroom on existing bank revolver debt covenants: Debt/EBITDA < 3.25 Can increase to < 3.9 for 4 quarters at Matson’s election following the Transaction EBITDA/Interest > 3.50 Transaction will not impact: Matson’s previously announced newbuild vessel progr
Slide 13: Financial Summary of Transaction
Financial Summary of Transaction Expect run-rate EBITDA contribution of $70 million within 2 years post-closing Operational efficiencies and reduction of duplicative corporate overhead and SG&A Excludes one-time pre-tax items ~$25 million transaction closing costs ~$20-25 million restructuring and i
Slide 14: Multiple Near-term and Longer-Term Value Creation Catalysts
EXISTING MATSON VALUE DRIVERS Hawaii trade poised for multi-year construction cycle increases and significant longer-term upside from investment in new Aloha class vessels Premium China rates showing continued strength Guam volume steady with incremental potential Logistics and SSAT businesses impro