Slide 1: Second Quarter 2014 Earnings Conference Call
Second Quarter 2014 Earnings Conference Call — July 31, 2014
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, July 31, 2014. We believe that our expectations and assumptions are reason
Slide 3: Opening Remarks
A solid second quarter 2014, benefitting from: 4.8 percent YOY revenue growth Higher freight yields in major trades Improved lift volume at SSAT Continuing YOY improvement in Logistics Board authorized 6.25 percent increase in quarterly dividend to $0.17 per share Outlook for 2H 2014 Operating Incom
Slide 4: EBITDA, EPS – 2Q 2014
EBITDA, EPS – 2Q 2014 2Q14 Net Income of $18.1 million versus 2Q13 Net Income of $20.1 million See the Addendum for a reconciliation of GAAP to non-GAAP for Financial Metrics
Slide 5: EBITDA, EPS – YTD 2014
EBITDA, EPS – YTD 2014 YTD 2014 Net Income of $21.5 million versus YTD 2013 Net Income of $29.2 million See the Addendum for a reconciliation of GAAP to non-GAAP for Financial Metrics
Slide 6: Hawaii Service
Hawaii Service Second Quarter Performance Market growth returned Container volume down 2.5 percent, offset by higher rates Modest competitive market share loss on EB and PNW freight impacted volume Automobile volume down 15.5 percent due to select customer losses Outlook for 2H 2014 Expect growth in
Slide 7: Hawaii Economic Indicators
Hawaii Economic Indicators Indicator (% Change YOY) 2013 2014F 2015F 2016F Real Gross Domestic Product 2.7 2.5 3.2 3.1 Visitor Arrivals 2.5 1.0 1.6 1.2 Construction Jobs 4.7 3.6 10.4 9.4 Residential Building Permits 16.5 32.3 38.5 11.7 Non-Residential Building Permits (10.7) 20.1 17.5 8.0 Source: UH
Slide 8: Guam Service
Guam Service Outlook for 2H 2014 Modest volume improvement expected, assuming no new competitor enters market Second Quarter Performance Modest increase in volume Steady ongoing economic activity
Slide 9: China Expedited Service (CLX)
China Expedited Service (CLX) Source: Shanghai Shipping Exchange Second Quarter Performance Volume increased modestly Continued strong demand for expedited services amid challenging market rate environment Outlook for 2H 2014 Market overcapacity expected to continue Matson expects to maintain volume
Slide 10: SSAT Joint Venture
SSAT Joint Venture Second Quarter Performance Improved lift volume throughout operations Continuing to optimize Oakland terminal Outlook for 2H 2014 Modest profit expected Incremental volume gains
Slide 11: Matson Logistics
Matson Logistics Second Quarter Performance Favorable litigation settlement Warehouse operating improvements Highway volume growth Source: Association of American Railroads Outlook for 2H 2014 Improvement in core brokerage business, expense control and improvements in warehouse operations Operating
Slide 12: 2Q2014 Operating Income
2Q2014 Operating Income SSAT had a $2.1 million contribution in 2Q14 compared to a $0.8 million loss in 2Q13 2Q13 2Q14 Change Revenue $310.0 $321.1 $11.1 Operating Income $34.3 $32.8 ($1.5) Oper. Income Margin 11.1% 10.2% 2Q13 2Q14 Change Revenue $106.6 $115.3 $8.7 Operating Income $2.2 $2.9 $0.7 Op
Slide 13: YTD 2014 Operating Income
YTD 2014 Operating Income SSAT had a $2.3 million contribution YTD 2014 compared to a $0.6 million loss YTD 2013 YTD13 YTD14 Change Revenue $609.9 $615.7 $5.8 Operating Income $52.8 $42.2 ($10.6) Oper. Income Margin 8.7% 6.9% YTD13 YTD14 Change Revenue $201.4 $213.2 $11.8 Operating Income $2.4 $3.4
Slide 14: Condensed Statements of Income
Condensed Statements of Income Key Items Total Revenue increased 4.8% Operating costs increased 5.4% Effective tax rate of 42.0% LTM EBITDA of $159.8 million See the Addendum for a reconciliation of GAAP to non-GAAP for Financial Metrics (in $ millions) 2Q14 2Q13 Operating Revenue Ocean transportati
Slide 15: Condensed Balance Sheet
Condensed Balance Sheet Assets (in $ millions) 6/30/14 12/31/13 Cash and cash equivalents $ 223.7 $ 114.5 Other current assets 254.5 234.4 Total current assets 478.2 348.9 Investment in terminal joint venture 60.1 57.6 Property and equipment, net 721.4 735.4 Other assets 104.9 106.4 Total assets $1,
Slide 16: Cash Generation and Uses of Cash
Cash Generation and Uses of Cash * LTM = Last Twelve Months as of June 30, 2014; Does not include $100 million financing in January 2014 or $7.5 million in Other sources of Cash; Does not include $9.95 million litigation settlement paid July 17, 2014.
Slide 17: Second Half 2014 Outlook
Outlook excludes any future impact of the molasses incident, which is unknown, and is being provided relative to 2013 operating income excluding the $9.95 million Litigation Charge taken in 4Q13 Ocean Transportation operating income for 2H 2014 expected to increase significantly from 2H 2013 level o
Slide 18: Summary Remarks
Summary Remarks Continued confidence about Hawaii growth prospects as construction cycle begins to materialize Activity in Guam muted, but Matson performing well Unique, expedited CLX service running at full capacity with strong demand Logistics and SSAT businesses improving Strong balance sheet and
Slide 19: Addendum – Use of Non-GAAP Measures
Addendum – 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 in
Slide 20: GAAP to Non-GAAP Reconciliation (Net Debt and EBITDA)
GAAP to Non-GAAP Reconciliation (Net Debt and EBITDA) (in $ millions) Second Quarter LTM 2014 2013 Change Net Income 18.1 20.1 (2.0) 46.0 Add: Income tax expense 13.1 12.8 0.3 29.0 Add: Interest expense 4.5 3.6 0.9 15.7 Add: Depreciation & amortization 17.4 17.3 0.1 69.1 EBITDA $53.1 $53.8 ($0.7) $1