Slide 1: Investor Presentation – February 2014
Investor Presentation – February 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 February 12, 2014, 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
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 LTM = Last twelve months as of September 30, 2013 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: Unique, Premium, Expedited Service – China Service (CLX)
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 7: Guam Service
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 8: SSAT Joint Venture – U.S. 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 9: 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 10: 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 11: LNG Capable
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 12: Compelling Investment
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 crewing, main
Slide 13: 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 Warehousing & Distribution China Supply Chain Services Domestic & In
Slide 14: 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 15: 3Q2013 Condensed Income Statement
3Q2013 Condensed Income Statement (in $ millions) 3Q13 3Q12 Operating Revenue Ocean transportation $310.1 $ 307.1 Logistics revenue 104.9 94.3 Total operating revenue 415.0 401.4 Costs and Expenses Operating costs 353.6 337.0 Selling, general and administrative 31.8 30.6 Equity in loss (income) of t
Slide 16: Cash Generation and Uses of Cash
Generated $137.8 million in cash flow from operations Maintenance capex of $19.7 million Paid $19.9 million in dividends Reduction of debt by $32.7 million Increased cash position by $61.9 million Cash Generation and Uses of Cash * Does not include $5.7 million in Other Uses of Cash For the 9 Months
Slide 17: Condensed Balance Sheet
Condensed Balance Sheet Assets (in $ millions) 9/30/13 12/31/12 Cash $ 81.8 $ 19.9 Other current assets 230.3 214.2 Total current assets 312.1 234.1 Investment in terminal joint venture 56.6 59.6 Property, net 736.2 762.5 Other assets 115.3 118.1 Total $1,220.2 $1,174.3 Liabilities & Shareholders’ E
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
19 Appendix Historical Data and Reconciliations
Slide 20: 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 21: 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 LTM = Last twelve months as of Septemb
Slide 22: 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: $8.5 million $ millions LTM = Last twelve months as of September 30, 2013 $3.4 $4.7 $17.1 $13.3 $10.7 $5.2 $6.2 $12.8 $8.6 $3.2 - $2.9 -$5 $0 $
Slide 23: 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 LTM = Last twelve months as of September 30, 2013 $4.3 $8.9
Slide 24: 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 25: 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 26: GAAP to Non-GAAP Reconciliation (Net Debt and EBITDA)
GAAP to Non-GAAP Reconciliation (Net Debt and EBITDA) (in $ millions) Last Twelve Months (LTM) Year Ended December 31 As of September 30, 2013 2012 2011 Net Income 62.0 45.9 34.2 Subtract: Income (loss) from discontinued operations (0.1) (6.1) (11.6) Add: Income tax expense 29.5 33.0 25.1 Add: Inter
Slide 27: GAAP to Non-GAAP Reconciliation (ROIC)
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 Re
Slide 28: 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