Slide 1: 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, February 23, 2016. We believe that our expectations and assumptions are re
Slide 2: Opening Remarks: 2015 was an exceptional year
2015 was an exceptional year Delivered best financial results in our history Substantially grew our ocean transportation platform with the acquisition of the Alaska trade Reinforced our position as the service leader in Hawaii, Guam, China and Micronesia Hawaii container volume up 17.8% YOY in 4Q15
Slide 3: EBITDA, EPS – 4Q 2015
EBITDA, EPS – 4Q 2015 4Q15 Net Income of $26.6 million versus 4Q14 Net Income of $27.8 million 4Q15 Net Income would have been $30.3 million excluding Acquisition related SG&A Impact of Acquisition related SG&A in excess of incremental run-rate target $82.5 $0.68 $6.1 $0.08 See the Addendum for a re
Slide 4: EBITDA, EPS, ROIC – Full Year 2015
EBITDA, EPS , ROIC – Full Year 2015 2015 Net Income of $103.0 million versus 2014 Net Income of $70.8 million 2015 Net Income would have been $128.9 million excluding Acquisition related SG&A and Molasses Settlement $345.0 $2.93 $13.3 $29.6 $0.18 $0.41 Impact of Acquisition related SG&A in excess of
Slide 5: Hawaii Service
Hawaii Service Fourth Quarter Performance Modest westbound market growth 4Q15 volume up 17.8% YOY Deployed additional vessels in response to a competitor’s service reconfiguration 11 ships deployed for majority of 4Q15 2016 Outlook Modest market growth expected Hawaii economy remains healthy Expect
Slide 6: Hawaii Economic Indicators
Hawaii Economic Indicators Indicator (% Change YOY) 2014 2015 2016F 2017F Real Gross Domestic Product 1.6 3.4 3.1 2.1 Visitor Arrivals 2.3 4.2 1.5 0.9 Construction Jobs 3.5 5.5 5.8 5.0 Unemployment Rate (%) 4.4 3.8 3.1 2.9 Residential Building Permits (9.8) 52.4 12.0 5.9 Non-Residential Building Per
Slide 7: Hawaii Fleet Renewal
On October 1, 2015, construction commenced on Matson’s two 3,600 TEU “Aloha Class” vessels at Philly Shipyard Expected delivery dates: 3Q18 and 1Q19 Expected progress payments: 2016 $67.2 million, 2017 $159.1 million, 2018 $154.1 million, 2019 $8.4 million Expected benefits of new vessels Significan
Slide 8: China Expedited Service (CLX)
China Expedited Service (CLX) Source: Shanghai Shipping Exchange Fourth Quarter Performance International ocean freight rates, as represented by the SCFI, fell to historic lows As expected, 4Q15 volume was modestly lower One fewer sailing and absence of extraordinarily high demand experienced during
Slide 9: Guam Service
Guam Service 2016 Outlook Stable economic activity Competitor’s service launched at the beginning of January Competitive volume losses expected Fourth Quarter Performance Economic activity was steady Achieved modest volume growth The expected launch of competitor’s bi-weekly U.S. flagged containersh
Slide 10: Alaska Service
Alaska Service 2016 Outlook Economic headwinds expected Sustained low oil prices, lower state capital budget and spending State jobs and Anchorage population forecast to decline by 0.7 percent Annual container volume expected to be modestly lower than the 67,300 containers carried by Horizon and Mat
Slide 11: Alaska Integration Update
Integration of Alaska operations continues to progress well Completed system conversions Expect integration to be substantially complete by end of 3Q16; well ahead of initial plan 2016 SG&A expenses related to the Alaska Acquisition are not expected to materially exceed the incremental run-rate targ
Slide 12: SSAT Joint Venture
SSAT Joint Venture Fourth Quarter Performance Continued to benefit from improved lift volumes 2016 Outlook Well positioned in Oakland for increased lift volumes due to closure of competitor’s terminal Expect operating income contribution modestly lower than 2015, primarily due to the absence of incr
Slide 13: Matson Logistics
Matson Logistics Fourth Quarter Performance Volume declines in Logistics’ businesses extended into the fourth quarter 2015 Achieved an operating income margin of 2.5 percent Source: Association of American Railroads 2016 Outlook Expect 2016 operating income to modestly exceed the 2015 level of $8.5
Slide 14: 4Q2015 Operating Income
4Q2015 Operating Income SSAT had a $3.4 million contribution in 4Q15 compared to a $1.2 million contribution in 4Q14 4Q14 4Q15 Change Revenue $333.2 $401.0 $67.8 Operating Income $46.3 $43.6 ($2.7) Oper. Income Margin 13.9% 10.9% 4Q14 4Q15 Change Revenue $110.3 $93.8 ($16.5) Operating Income $3.1 $2
Slide 15: Full Year 2015 Operating Income
Full Year 2015 Operating Income SSAT had a $16.5 million contribution in 2015 compared to a $6.6 million contribution in 2014 2014 2015 Change Revenue $1,278.4 $1,498.0 $219.6 Operating Income $131.1 $187.8 $56.7 Oper. Income Margin 10.3% 12.5% 2014 2015 Change Revenue $435.8 $386.9 ($48.9) Operatin
Slide 16: Condensed Balance Sheet
Condensed Balance Sheet Assets (in $ millions) 12/31/15 12/31/14 Cash and cash equivalents $ 25.5 $ 293.4 Other current assets 252.4 226.1 Total current assets 277.9 519.5 Investment in terminal joint venture 66.4 64.4 Property and equipment, net 860.3 691.2 Capital Construction Fund – cash on depos
Slide 17: 2015 Cash Generation and Uses of Cash
2015 Cash Generation and Uses of Cash Includes $27.5 million net CCF withdrawal; does not include $3.7 million in other uses of cash Based on total cash consideration (including common shares, warrants, repaid debt, accrued interest and breakage fees)
Slide 18: Share Repurchase Program
On November 4, announced Board authorization of share repurchase program for up to 3.0 million common shares over three years Since inception of repurchase program and as of February 22, 2016, Matson had repurchased a total 460,500 shares of common stock at an average price of $40.90 per share Matso
Slide 19: Capital Expenditures
2016 maintenance capital spending expected to be approximately $65 million Higher than normal expected range of $40-50 million due to installation of scrubbers on Alaska vessels, and capital projects related to a relatively heavy dry docking schedule New vessel progress payments for two Aloha Class
Slide 20: Vessel Dry-Docking
Expect 2016 vessel dry-docking expenditures of approximately $60 million Hawaii fleet – Vessels dry-dock once every 5 years 2011 and 2012 has heavy dry-docking expenditures; therefore, expect 2016 and 2017 to have relatively heavy dry-docking expenditures Alaska fleet – Vessels dry-dock twice every
Slide 21: 2016 Outlook
Outlook is being provided relative to 2015 operating income Ocean Transportation operating income for full year 2016 is expected to be modestly lower than the $187.8 million achieved in 2015, and for 1Q16 is expected to be approximately 25 percent lower than the $43.9 million achieved in 1Q15 Signif
Slide 22: Summary Remarks
Summary Remarks Hawaii Expect to benefit from continued market growth and a stronger market position Alaska Integration progressing well Low energy prices create near-term economic headwinds China International market continues to be chronically oversupplied with freight rates near historic lows Exp
Slide 23: Summary Remarks
Summary Remarks oy NYSE Hawaii - Expect to benefit from continued market growth and a stronger market position Alaska - Integration progressing well - Low energy prices create near-term economic headwinds China - International market continues to be chronically oversupplied with freight rates near h
Slide 24: 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 25: GAAP to Non-GAAP Reconciliation
GAAP to Non-GAAP Reconciliation (In millions) Total Debt: $ 429.9 Less: Total cash and cash equivalents (25.5) Net Debt $ 404.4 (In millions) Net Income $ 26.6 $ 27.8 $ (1.2) Add: Income tax expense 14.4 17.3 (2.9) Add: Interest expense 4.9 4.3 0.6 Add: Depreciation and amortization 24.2 17.0 7.2 Ad
Slide 26: GAAP to Non-GAAP Reconciliation
GAAP to Non-GAAP Reconciliation (in millions, except per share amount) Cash flow from operations $ 245.3 Subtract: Capital expenditures (67.8) Free Cash Flow 177.5 Weighted Average Number of Shares – Diluted 44.0 Free Cash Flow per Share $ 4.03 Return on Invested Capital (in millions) Net Income $ 1
Slide 27: GAAP to Non-GAAP Reconciliation
GAAP to Non-GAAP Reconciliation (in millions, except per share amount) Year Ended December 31, 2015 Acquisition related SG&A in excess of run-rate target 6.1 29.6 Less: Income tax expense effect of Acquisition related SG&A in excess of run-rate target (2.4) (11.7) After-tax Impact 3.7 17.9 Weighted
Slide 28: GAAP to Non-GAAP Reconciliation
GAAP to Non-GAAP Reconciliation ‘Three Months Ended Year Ended December 31, December 31, (in millions, except per share amount) 2015, 2015 ‘Acquisition related SG&A in excess of run-rate target 61 296 Less: Income tax expense effect of Acquisition related SG&A in excess ofrun-rate target 24) ay Afte