Slide 1: Investor Presentation – May 2014
Investor Presentation – May 2014
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 May 7, 2014, the date of this filing. Actual results may differ materially, due to risks and uncertainties, such as those described on pages 8-14 of our 2013 Form 1
Slide 3: Matson – At a Glance
Matson – At a Glance Leading U.S. carrier in the Pacific Lifeline to island economies of Hawaii and Guam Niche, premium, expedited service from China to Southern California 35% ownership in 6 West Coast terminals Top 10 integrated, asset-light logistics services Rail intermodal, highway brokerage an
Slide 4: Ocean Transportation – Core 9-Ship Jones Act Deployment
Ocean Transportation – Core 9-Ship Jones Act Deployment HON = Honolulu; LB = Long Beach; OAK = Oakland; SEA = Seattle 2 Ships HON / OAK / LB 2 Ships HON / SEA / OAK 5 Ships LB / HON / Guam / China South Pacific Service
Slide 5: Hawaii: Poised for Growth
Market and service leader to Hawaii Principal carrier in the trade Most arrivals per week into Honolulu High vessel utilization Dedicated terminal operations Own neighbor island barge network Hawaii: Poised for Growth Positive economic trends Construction activity a key driver Several condominium pr
Slide 6: Honolulu’s Urban Core
Honolulu’s Urban Core Source: DBEDT: Construction and Hawaii’s Economy, February 20, 2014 http://dbebt.hawaii.gov Waikiki Ritz-Carlton Residences Waikiki Beach broke ground in August 2013 Hyatt Regency Waikiki Resort and Spa to begin $100 million renovation in 2014 Sheraton Princess Kaiulani $500 mi
Slide 7: Honolulu Rail Transit Project
Honolulu Rail Transit Project 20-mile rail project will cost an estimated $5.2 billion First 10-miles to begin operating in 2017; entire 20-mile system to be operational in 2019 Source: HART: March 2014 Quarterly Report www.HononluluTransit.org
Slide 8: Freight Super Cycles in Hawaii
Freight Super Cycles in Hawaii Source: Matson, Inc. Super-cycles have characterized Matson container volume Emerging from bottom of cycle
Slide 9: Unique, Premium, Expedited Service
Unique, Premium, Expedited Service Weekly 5 ship string connecting 3 ports in China to Long Beach 3-6 day competitive advantage: Fastest transit time: 10 days (vs. 12-14 day trade standard) Next-day freight availability at Long Beach Achieves freight rate premium to the spot market Utilization of Jo
Slide 10: Critical Link in CLX Network Configuration
Critical Link in CLX Network Configuration Primary carrier to Guam since departure of major competitor in late 2011 Volume in Guam remains stable Connections from Oakland and Pacific Northwest to Guam via Honolulu Guam Service
Slide 11: SSAT Joint Venture – 35% ownership stake in west coast terminals
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 and yard turns Flexibility to receive freight close to departure Increased customer satisfaction Recent expansion of Oakland t
Slide 12: Introducing the Aloha Class
Delivery expected in 3Q/4Q 2018 First ship named in honor of Senator Inouye Introducing the Aloha Class Two 3600 TEU dual fuel, LNG capable containerships from Aker Contract price $418 million
Slide 13: Aloha Class Specifications
Aloha Class Specifications Green Ship Technology 3600 TEU capacity Optimized speed to ensure cargo reliability Additional 45-foot capacity Additional reefer outlets Cell guide spacing (constr. materials) Neighbor Island accessible Fuel efficient hull Dual fuel engines, conventional fuel oils or LNG
Slide 14: Aloha Class – LNG Capable
Aloha Class – LNG Capable Potentially cheaper source of fuel Dual fuel engines part of vessel design Additional ~$20 million per vessel to complete LNG installation Decision will be driven by LNG availability at the US West Coast ports
Slide 15: Aloha Class – Compelling Investment
Aloha Class – Compelling Investment Significantly lowers cost per TEU in Hawaii fleet Cost efficiencies driven by: Maintaining 9-ship deployment at significantly higher volumes Lower operating costs of modern vessels Lower fuel consumption – ~30% on a per TEU basis using conventional fuel oils Lower
Slide 16: Matson Logistics
LTM (1) Results Intermodal and highway volume growth Warehouse operating improvements Operating income margin improved Priorities Organic growth as a national provider of integrated logistics solutions Highway and intermodal brokerage Increase cross-selling with Ocean Transportation Pursue growth in
Slide 17: Cash Generation and Uses of Cash
Cash Generation and Uses of Cash * LTM = Last Twelve Months as of March 31, 2014; Does not include $100 million financing in January 2014 or $6.5 million in Other sources of Cash
Slide 18: Investment Highlights
Market and service leader in core Hawaii and Guam trade lanes Primary carrier with operating leverage to recovering economies Unique expedited China Service (CLX) achieving premium rates Unique deployment of Jones Act tonnage in international trade Fastest transit time and cargo availability creates
Slide 19: Appendix: Historical Data and Reconciliations
20 20 Appendix Historical Data and Reconciliations
Slide 20: 1Q2014 Condensed Statements of Income
1Q2014 Condensed Statements of Income (in $ millions) 1Q14 1Q13 Operating Revenue Ocean transportation $294.6 $ 299.9 Logistics 97.9 94.8 Total operating revenue 392.5 394.7 Costs and Expenses Operating costs 347.8 342.8 Selling, general and administrative 35.0 33.4 Equity in income from terminal jo
Slide 21: Condensed Balance Sheet
Condensed Balance Sheet Assets (in $ millions) 3/31/14 12/31/13 Cash and cash equivalents $ 229.7 $ 114.5 Other current assets 227.5 234.4 Total current assets 457.2 348.9 Investment in terminal joint venture 57.8 57.6 Property and equipment, net 722.9 735.4 Other assets 106.4 106.4 Total assets $1,
Slide 22: EBITDA and Capex
EBITDA1, 2 (in $ Millions) EBITDA and Capex 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 primarily
Slide 23: Ocean Transportation Operating Income
Ocean Transportation 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: $101.4 million $ millions Adjusted Operating Income Operating Margin $93.2 $105.6 $126.5 $105.6 $57.8 $73.7
Slide 24: Pre-Tax Income (Loss) SSAT Investment
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: $8.3 million $ millions $3.4 $4.7 $17.1 $13.3 $10.7 $5.2 $6.2 $12.8 $8.6 $3.2 $1.0 $0 $2 $4 $6 $8 $10 $12 $14 $16 $18 $20 2003 2004 2005 2006 2
Slide 25: 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: $10.9 million $ millions Operating Income Operating Margin $4.3 $8.9 $14.4 $20.8 $21.8 $18.5 $6.7 $7.1 $4.9 $0.1 $6.0
Slide 26: 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 27: GAAP to Non-GAAP Reconciliation (Net Debt and EBITDA)
GAAP to Non-GAAP Reconciliation (Net Debt and EBITDA) (in $ millions) First Quarter LTM 2013 2012 2011 2014 2013 Change Net Income 3.4 9.1 (5.7) 48.0 53.7 45.9 34.2 Subtract: Income (loss) from discontinued operations - - - - - (6.1) (11.6) Add: Income tax expense 2.4 5.9 (3.5) 28.7 32.2 33.0 25.1 A
Slide 28: GAAP to Non-GAAP Reconciliation (EBITDA)
GAAP to Non-GAAP Reconciliation (EBITDA) (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 96.7
Slide 29: GAAP to Non-GAAP Reconciliation (Return on Invested Capital)
GAAP to Non-GAAP Reconciliation (Return on Invested Capital) (in $ millions) Year Ended 2013 2012 (2) Net Income 53.7 45.9 Subtract: Loss from discontinued operations - (6.1) Add: Interest expense (tax effected)1 9.0 7.2 Total Return 62.7 59.2 Average Total Debt 302.6 319.1 Average Shareholders’ Equ