Document and Entity Information
Document and Entity Information | 3 Months Ended |
Mar. 31, 2020shares | |
Document and Entity Information | |
Document Type | 10-Q |
Document Quarterly Report | true |
Document Transition Report | false |
Document Period End Date | Mar. 31, 2020 |
Entity File Number | 001-34187 |
Entity Registrant Name | Matson, Inc. |
Entity Incorporation, State or Country Code | HI |
Entity Tax Identification Number | 99-0032630 |
Entity Address, Address Line One | 1411 Sand Island Parkway |
Entity Address, City or Town | Honolulu |
Entity Address, State or Province | HI |
Entity Address, Postal Zip Code | 96819 |
City Area Code | 808 |
Local Phone Number | 848-1211 |
Title of 12(b) Security | Common Stock, without par value |
Trading Symbol | MATX |
Security Exchange Name | NYSE |
Entity Current Reporting Status | Yes |
Entity Interactive Data Current | Yes |
Entity Filer Category | Large Accelerated Filer |
Entity Small Business | false |
Entity Emerging Growth Company | false |
Entity Shell Company | false |
Entity Common Stock, Shares Outstanding | 43,041,265 |
Current Fiscal Year End Date | --12-31 |
Document Fiscal Year Focus | 2020 |
Document Fiscal Period Focus | Q1 |
Entity Central Index Key | 0000003453 |
Amendment Flag | false |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Income and Comprehensive Income - USD ($) shares in Millions, $ in Millions | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Operating Revenue: | ||
Total Operating Revenue | $ 513.9 | $ 532.4 |
Costs and Expenses: | ||
Operating costs | (448.3) | (467.1) |
Income from SSAT | 4 | 8.5 |
Selling, general and administrative | (56.6) | (56.3) |
Total Costs and Expenses | (500.9) | (514.9) |
Operating Income | 13 | 17.5 |
Interest expense | (8.6) | (4.6) |
Other income (expense), net | 0.6 | 0.6 |
Income before Income Taxes | 5 | 13.5 |
Income taxes | (1.2) | (1) |
Net Income | 3.8 | 12.5 |
Other Comprehensive Income (Loss), Net of Income Taxes: | ||
Net Income | 3.8 | 12.5 |
Other Comprehensive Income (Loss): | ||
Amortization of prior service cost | (1.2) | (1.1) |
Amortization of net loss | 1.3 | 0.9 |
Other adjustments | (0.7) | |
Total Other Comprehensive (Loss) Income | (0.6) | (0.2) |
Comprehensive Income | $ 3.2 | $ 12.3 |
Basic Earnings Per-Share: (in dollars per share) | $ 0.09 | $ 0.29 |
Diluted Earnings Per-Share: (in dollars per share) | $ 0.09 | $ 0.29 |
Weighted Average Number of Shares Outstanding: | ||
Basic (in shares) | 43 | 42.8 |
Diluted (in shares) | 43.3 | 43.1 |
Ocean Transportation | ||
Operating Revenue: | ||
Total Operating Revenue | $ 400.9 | $ 397.9 |
Logistics | ||
Operating Revenue: | ||
Total Operating Revenue | $ 113 | $ 134.5 |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets - USD ($) $ in Millions | Mar. 31, 2020 | Dec. 31, 2019 |
Current Assets: | ||
Cash and cash equivalents | $ 19.9 | $ 21.2 |
Accounts receivable, net of allowance for credit loss of $4.7 million and $4.3 million, respectively | 218.8 | 205.9 |
Prepaid expenses and other assets | 70 | 62.5 |
Total current assets | 308.7 | 289.6 |
Long-term Assets: | ||
Investment in SSAT | 74.3 | 76.2 |
Property and equipment, net | 1,589.6 | 1,598.1 |
Operating lease right of use assets | 253.8 | 256.1 |
Goodwill | 327.8 | 327.8 |
Intangible assets, net | 200.2 | 202.9 |
Deferred dry-docking costs, net | 52.2 | 56.9 |
Other long-term assets | 29.3 | 37.8 |
Total long-term assets | 2,527.2 | 2,555.8 |
Total Assets | 2,835.9 | 2,845.4 |
Current Liabilities: | ||
Current portion of debt | 53.4 | 48.4 |
Accounts payable and accruals | 275.7 | 235.7 |
Operating lease liabilities | 65.5 | 66.6 |
Other liabilities | 76.3 | 86 |
Total current liabilities | 470.9 | 436.7 |
Long-term Liabilities: | ||
Long-term debt | 871.5 | 910 |
Long-term operating lease liabilities | 197.2 | 198 |
Deferred income taxes | 340.2 | 337.6 |
Other long-term liabilities | 155.9 | 157.4 |
Total long-term liabilities | 1,564.8 | 1,603 |
Commitments and Contingencies | ||
Shareholders' Equity: | ||
Common stock | 32.3 | 32.2 |
Additional paid in capital | 304.7 | 306.2 |
Accumulated other comprehensive loss, net | (37.5) | (36.9) |
Retained earnings | 500.7 | 504.2 |
Total shareholders' equity | 800.2 | 805.7 |
Total liabilities and shareholders' equity | $ 2,835.9 | $ 2,845.4 |
Condensed Consolidated Balanc_2
Condensed Consolidated Balance Sheets (Parenthetical) - USD ($) $ in Millions | Mar. 31, 2020 | Dec. 31, 2019 |
Condensed Consolidated Balance Sheets | ||
Accounts receivable, allowance for credit loss | $ 4.7 | $ 4.3 |
Condensed Consolidated Statem_2
Condensed Consolidated Statements of Cash Flows - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Cash Flows From Operating Activities: | ||
Net income | $ 3.8 | $ 12.5 |
Reconciling adjustments: | ||
Depreciation and amortization | 27 | 23.3 |
Amortization of operating lease right of use assets | 17.4 | 16.7 |
Deferred income taxes | 2.7 | 3.8 |
Share-based compensation expense | 3.1 | 3.2 |
Income from SSAT | (4) | (8.5) |
Distribution from SSAT | 7.8 | 4.2 |
Other | (0.1) | (0.6) |
Changes in assets and liabilities: | ||
Accounts receivable, net | (12.9) | 5.8 |
Deferred dry-docking payments | (2.6) | (3.2) |
Deferred dry-docking amortization | 6.1 | 8.1 |
Prepaid expenses and other assets | (0.2) | 4.8 |
Accounts payable, accruals and other liabilities | 38.9 | (20.4) |
Operating lease liabilities | (16.9) | (16.7) |
Other long-term liabilities | (1.5) | 0.4 |
Net cash provided by operating activities | 68.6 | 33.4 |
Cash Flows From Investing Activities: | ||
Capitalized vessel construction expenditures | (9.1) | (20.9) |
Other capital expenditures | (26.1) | (13.5) |
Proceeds from disposal of property and equipment | 14.5 | 1.2 |
Cash deposits into Capital Construction Fund | (70.4) | (13.4) |
Withdrawals from Capital Construction Fund | 70.4 | 13.4 |
Net cash used in investing activities | (20.7) | (33.2) |
Cash Flows From Financing Activities: | ||
Repayments of debt | (11.4) | (8.2) |
Proceeds from revolving credit facility | 111.4 | 107.8 |
Repayments of revolving credit facility | (133.5) | (87.8) |
Payment of financing costs | (3.1) | |
Dividends paid | (9.5) | (9.1) |
Tax withholding related to net share settlements of restricted stock units | (4.5) | (3.1) |
Net cash provided by (used in) financing activities | (50.6) | (0.4) |
Net Decrease in Cash, Cash Equivalents and Restricted Cash | (2.7) | (0.2) |
Cash, Cash Equivalents and Restricted Cash, Beginning of the Period | 28.4 | 24.5 |
Cash, Cash Equivalents and Restricted Cash, End of the Period | 25.7 | 24.3 |
Reconciliation of Cash, Cash Equivalents, and Restricted Cash, at End of the Year: | ||
Cash and Cash Equivalents | 19.9 | 15.4 |
Restricted Cash | 5.8 | 8.9 |
Cash, Cash Equivalents and Restricted Cash, End of the Period | 25.7 | 24.3 |
Supplemental Cash Flow Information: | ||
Interest paid, net of capitalized interest | 8.6 | 4.8 |
Income tax paid, net | (0.3) | (5.4) |
Non-cash Information: | ||
Capital expenditures included in accounts payable, accruals and other liabilities | $ 3.5 | $ 5.5 |
Condensed Consolidated Statem_3
Condensed Consolidated Statements of Stockholders' Equity - USD ($) shares in Millions, $ in Millions | Common Stock | Additional Paid In Capital | Accumulated Other Comprehensive Income (Loss) | Retained Earnings | Total |
Balance at the beginning of the period at Dec. 31, 2018 | $ 32 | $ 297.8 | $ (34.5) | $ 460 | $ 755.3 |
Balance (in shares) at Dec. 31, 2018 | 42.7 | ||||
Increase (Decrease) in Stockholders' Equity | |||||
Net income | 12.5 | 12.5 | |||
Adoption of new lease accounting standard | 4.4 | 4.4 | |||
Other comprehensive income (loss), net of tax | (0.2) | (0.2) | |||
Share-based compensation | 3.2 | 3.2 | |||
Shares issued, net of shares withheld for employee taxes | $ 0.1 | (3.2) | (3.1) | ||
Shares issued, net of shares withheld for employee taxes (in shares) | 0.1 | ||||
Dividends | (9.1) | (9.1) | |||
Balance at the end of the period at Mar. 31, 2019 | $ 32.1 | 297.8 | (34.7) | 467.8 | 763 |
Balance (in shares) at Mar. 31, 2019 | 42.8 | ||||
Balance at the beginning of the period at Dec. 31, 2019 | $ 32.2 | 306.2 | (36.9) | 504.2 | 805.7 |
Balance (in shares) at Dec. 31, 2019 | 42.9 | ||||
Increase (Decrease) in Stockholders' Equity | |||||
Net income | 3.8 | 3.8 | |||
Other comprehensive income (loss), net of tax | (0.6) | (0.6) | |||
Share-based compensation | 3.1 | 3.1 | |||
Shares issued, net of shares withheld for employee taxes | $ 0.1 | (4.6) | (4.5) | ||
Shares issued, net of shares withheld for employee taxes (in shares) | 0.1 | ||||
Equity interest in SSAT | 2.2 | 2.2 | |||
Dividends | (9.5) | (9.5) | |||
Balance at the end of the period at Mar. 31, 2020 | $ 32.3 | $ 304.7 | $ (37.5) | $ 500.7 | $ 800.2 |
Balance (in shares) at Mar. 31, 2020 | 43 |
Condensed Consolidated Statem_4
Condensed Consolidated Statements of Stockholders' Equity (Parenthetical) - $ / shares | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Condensed Consolidated Statement of Stockholders' Equity | ||
Dividends (per share) | $ 0.22 | $ 0.21 |
DESCRIPTION OF THE BUSINESS
DESCRIPTION OF THE BUSINESS | 3 Months Ended |
Mar. 31, 2020 | |
DESCRIPTION OF THE BUSINESS | |
DESCRIPTION OF THE BUSINESS | 1. DESCRIPTION OF THE BUSINESS Matson, Inc., a holding company incorporated in the State of Hawaii, and its subsidiaries (“Matson” or the “Company”), is a leading provider of ocean transportation and logistics services. The Company consists of Ocean Transportation: Matson’s Ocean Transportation business is conducted through Matson Navigation Company, Inc. (“MatNav”), a wholly-owned subsidiary of Matson, Inc. Founded in 1882, MatNav provides a vital lifeline of ocean freight transportation services to the domestic non-contiguous economies of Hawaii, Alaska and Guam, and to other island economies in Micronesia. MatNav also operates a premium, expedited service from China to Long Beach, California, and also provides services to Okinawa, Japan and various islands in the South Pacific. In addition, subsidiaries of MatNav provide container stevedoring, refrigerated cargo services, inland transportation and other terminal services for MatNav and other ocean carriers on the Hawaiian islands of Oahu, Hawaii, Maui and Kauai, and in the Alaska locations of Anchorage, Kodiak and Dutch Harbor. Matson has a 35 percent ownership interest in SSA Terminals, LLC, a joint venture between Matson Ventures, Inc., a wholly-owned subsidiary of MatNav, and SSA Ventures, Inc., a subsidiary of Carrix, Inc. (“SSAT”). SSAT provides terminal and stevedoring services to various carriers at facilities dedicated for MatNav’s use. Matson records its share of income from SSAT in Costs and Expenses in the Condensed Consolidated Statements of Income and Comprehensive Income, and within the Ocean Transportation segment due to the nature of SSAT’s operations. Logistics: Matson’s Logistics business is conducted through Matson Logistics, Inc. (“Matson Logistics”), a wholly-owned subsidiary of MatNav. Established in 1987, Matson Logistics is an asset-light business that provides a variety of logistics services to its customers including: (i) multimodal transportation brokerage of domestic and international rail intermodal services, long-haul and regional highway trucking services, specialized hauling, flat-bed and project services, less-than-truckload services, and expedited freight services (collectively, “Transportation Brokerage” services); (ii) less-than-container load (“LCL”) consolidation and freight forwarding services (collectively, “Freight Forwarding” services); (iii) warehousing and distribution services; and (iv) supply chain management, non-vessel operating common carrier (“NVOCC”) freight forwarding and other services. |
SIGNIFICANT ACCOUNTING POLICIES
SIGNIFICANT ACCOUNTING POLICIES | 3 Months Ended |
Mar. 31, 2020 | |
SIGNIFICANT ACCOUNTING POLICIES | |
SIGNIFICANT ACCOUNTING POLICIES | 2. SIGNIFICANT ACCOUNTING POLICIES Basis of Presentation: The Condensed Consolidated Financial Statements are unaudited, and include the accounts of Matson, Inc. and all wholly-owned subsidiaries, after elimination of intercompany amounts and transactions. Significant investments in businesses, partnerships, and limited liability companies in which the Company does not have a controlling financial interest, but has the ability to exercise significant influence, are accounted for under the equity method. The Company accounts for its investment in SSAT using the equity method of accounting. Due to the nature of the Company’s operations, the results for interim periods are not necessarily indicative of results to be expected for the year. These Condensed Consolidated Financial Statements reflect all normal recurring adjustments that are, in the opinion of management, necessary for fair presentation of the results of the interim periods, and do not include all of the information and footnotes required by U.S. generally accepted accounting principles for complete consolidated financial statements. The Condensed Consolidated Financial Statements should be read in conjunction with the Consolidated Financial Statements and notes thereto included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2019, filed with the Securities and Exchange Commission (“SEC”) on February 28, 2020. Fiscal Period: The period end for Matson covered by this report is March 31, 2020. The period end for MatNav and its subsidiaries covered by this report occurred on the last Friday in March, or March 27, 2020, for the first quarter 2020. Significant Accounting Policies: The Company’s significant accounting policies are described in Note 2 to the Consolidated Financial Statements included in Part II, Item 8 of the Company’s Annual Report on Form 10-K for the year ended December 31, 2019. Use of Estimates: The preparation of the interim condensed consolidated financial statements in conformity with accounting principles generally accepted in the U.S. requires management to make estimates and assumptions that affect the amounts reported. Estimates and assumptions are used for, but not limited to: impairment of investments; impairment of long-lived assets, intangible assets and goodwill; capitalized interest; allowance for doubtful accounts; legal contingencies; uninsured risks and related liabilities; accrual estimates; pension and post-retirement estimates; multi-employer withdrawal liabilities; operating lease assets and liabilities; and income taxes. Future results could be materially affected if actual results differ from these estimates and assumptions. Allowance for Doubtful Accounts Receivable: Allowance for doubtful accounts receivable is established by management based on estimates of collectability. Estimates of collectability are principally based on an evaluation of the current financial condition of the customer and the potential risks to collection, the customers’ payment history, expected future credit losses and other factors which are regularly monitored by the Company. Recognition of Revenues and Related Expenses: Revenue in the Company’s Condensed Consolidated Financial Statements is presented net of elimination of intercompany transactions. The following is a description of the Company’s principal revenue generating activities by segment, and the Company’s revenue recognition policy for each activity for the periods presented: March 31, Ocean Transportation (in millions) (1) 2020 2019 Ocean Transportation services $ 391.1 $ 387.9 Terminal and other related services 5.8 6.7 Fuel sales 2.6 2.0 Vessel management and related services 1.4 1.3 Total $ 400.9 $ 397.9 (1) Ocean Transportation revenue transactions are primarily denominated in U.S. dollars except for less than 3 percent of Ocean Transportation revenues and fuel sales revenue categories which are denominated in foreign currencies. ◾ Ocean Transportation services revenue is recognized ratably over the duration of a voyage based on the relative transit time completed in each reporting period. Vessel operating costs and other ocean transportation operating costs, such as terminal operating overhead and general and administrative expenses, are charged to operating costs as incurred. ◾ Terminal and other related services revenue is recognized as the services are performed. Related costs are recognized as incurred. ◾ Fuel sales revenue and related costs are recognized when the Company has completed delivery of the product to the customer in accordance with the terms and conditions of the contract. ◾ Vessel management and related services revenue is recognized in proportion to the services completed. Related costs are recognized as incurred. March 31, Logistics (in millions) (1) 2020 2019 (2) Transportation Brokerage and Freight Forwarding services $ 102.1 $ 123.3 Warehouse and distribution services 8.2 8.4 Supply chain management and other services 2.7 2.8 Total $ 113.0 $ 134.5 (1) Logistics revenue transactions are primarily denominated in U.S. dollars except for less than 3 percent of transportation brokerage and freight forwarding services revenue, and supply chain management and other services revenue categories which are denominated in foreign currencies. (2) The Company has reclassified $3.1 million from transportation brokerage and freight forwarding services to warehouse and distribution services for the quarter ended March 31, 2019 to be consistent with its current period presentation. There was no change in total Logistics revenue for the quarter ended March 31, 2019. ◾ Transportation Brokerage and Freight Forwarding services revenue consists of amounts billed to customers for services provided. The primary costs include third-party purchased transportation services, labor and equipment. Revenue and the related purchased third-party transportation costs are recognized over the duration of a delivery based upon the relative transit time completed in each reporting period. Labor and other operating costs are expensed as incurred. The Company reports revenue on a gross basis as the Company serves as the principal in these transactions because it is responsible for fulfilling the contractual arrangements with the customer and has latitude in establishing prices. ◾ Warehousing and distribution services revenue consist of amounts billed to customers for storage, handling, and value-added packaging of customer merchandise. Storage revenue is recognized in the month the service is provided to the customer. Storage related costs are recognized as incurred. Other warehousing and distribution services revenue and related costs are recognized in proportion to the services performed. ◾ Supply chain management and other services revenue, and related costs are recognized in proportion to the services performed. The Company generally invoices its customers at the commencement of the voyage or the transportation service being provided, or as other services are being performed. Revenue is deferred when services are invoiced in advance to the customer. The Company’s receivables are classified as short-term as collection terms are for periods of less than one year. The Company expenses sales commissions and contract acquisition costs as incurred because the amounts are generally immaterial. These expenses are included in selling, general and administrative expenses in the Condensed Consolidated Statements of Income and Comprehensive Income. Capital Construction Fund: The Company’s Capital Construction Fund (“CCF”) is described in Note 7 to the Consolidated Financial Statements included in Part II, Item 8 of the Company’s Annual Report on Form 10-K for the year ended December 31, 2019. million of eligible accounts receivable was assigned to the CCF. Due to the nature of the assignment of eligible accounts receivable into the CCF, such assigned amounts are classified as part of accounts receivable in the Condensed Consolidated Balance Sheets. Cash on deposit in the CCF is held in a money market account and classified as a long-term asset in the Company’s Condensed Consolidated Balance Sheets, as the Company intends to use qualified cash withdrawals to fund long-term investment in the construction of new vessels. During the three months ended March 31, 2020 and 2019, the Company deposited million from the CCF, respectively. The balance of cash on deposit at March 31, 2020 and December 31, 2019 was nominal. Investment in SSAT: Condensed income statement information (unaudited) for SSAT for the three months ended March 31, 2020 and 2019 consisted of the following: Three Months Ended March 31, (In millions) 2020 2019 Operating revenue $ 278.9 $ 268.1 Operating costs and expenses (265.4) (244.2) Operating income 13.5 23.9 Net Income (1) $ 13.0 $ 22.5 Company Share of SSAT's Net Income (2) $ 4.0 $ 8.5 (1) Includes earnings from equity method investments held by SSAT less earnings allocated to non-controlling interests. (2) The Company records its share of net income from SSAT in costs and expenses in the Condensed Consolidated Statement of Income and Comprehensive Income due to the nature of SSAT’s operations. The Company’s investment in SSAT was $74.3 million and $76.2 million at March 31, 2020 and December 31, 2019, respectively. During the three months ended March 31, 2020, the Company recorded an increase of $2.2 million in its investment in SSAT and a corresponding increase in retained earnings related to the formation of a new subsidiary of SSAT, whose controlling interest is retained by SSAT. Contingencies: Environmental Matters: Other Matters: The Company and its subsidiaries are parties to, or may be contingently liable in connection with other legal actions arising in the normal course of their businesses, the outcomes of which, in the opinion of management after consultation with counsel, would not have a material effect on the Company’s financial condition, results of operations, or cash flows. Dividends: The Company’s first quarter 2020 cash dividend of $0.22 per share was paid on March 5, 2020. On April 23, 2020, the Company’s Board of Directors declared a cash dividend of $0.22 per share payable on June 4, 2020. New Accounting Pronouncements: Measurement of Credit Losses on Financial Instruments : In June 2016, the Financial Accounting Standards Board issued ASU 2016- 13 which amends the current approach to estimate credit losses on certain financial assets, including trade and other receivables, available-for-sale securities and other financial instruments. ASU 2016- 13 requires entities to establish a valuation allowance for the expected lifetime losses of certain financial instruments. Subsequent changes in the valuation allowance are recorded in current earnings and reversal of previous losses is permitted. The new standard is effective for interim and annual periods beginning on or after December 15, 2019. The Company adopted ASU 2016- 13 effective January 1, 2020 using the modified retrospective approach. Upon adoption, the Company included an evaluation of expected future credit losses as part of its estimate for determining the allowance for doubtful accounts. The impact of this change was not material to the Company’s allowance for doubtful accounts receivable in the Condensed Consolidated Financial Statements. The Company will continue to monitor the impact of the recent COVID-19 pandemic on expected future credit losses. The Company’s accounting policy related to allowance for doubtful accounts receivable is described above. |
REPORTABLE SEGMENTS
REPORTABLE SEGMENTS | 3 Months Ended |
Mar. 31, 2020 | |
REPORTABLE SEGMENTS | |
REPORTABLE SEGMENTS | 3. REPORTABLE SEGMENTS Reportable segments are components of an enterprise that engage in business activities from which it may earn revenues and incur expenses, whose operating results are regularly reviewed by the chief operating decision maker to make decisions about resources to be allocated to the segment and assess its performance, and for which discrete financial information is available. The Company’s chief operating decision maker is its Chief Executive Officer. The Company consists of two reportable segments, Ocean Transportation and Logistics, which are further described in Note 1. Reportable segments are measured based on operating income, exclusive of interest expense and income taxes. In arrangements where the customer purchases ocean transportation and logistics services, the revenues are allocated to each reportable segment based upon the contractual amounts for each type of service. The Company’s SSAT segment has been aggregated into the Company’s Ocean Transportation segment due to the operations of SSAT being an integral part of the Company’s Ocean Transportation business. The Company’s Ocean Transportation segment provides ocean transportation services to the Logistics segment, and the Logistics segment provides logistics services to the Ocean Transportation segment in certain transactions. Accordingly, inter-segment revenue of $19.4 million and $21.8 million for the three months ended March 31, 2020 and 2019, respectively, have been eliminated from operating revenues in the table below. Reportable segment financial information for the three months ended March 31, 2020 and 2019 are as follows: Three Months Ended March 31, (In millions) 2020 2019 Operating Revenue: Ocean Transportation (1) $ 400.9 $ 397.9 Logistics (2) 113.0 134.5 Total Operating Revenue $ 513.9 $ 532.4 Operating Income: Ocean Transportation (3) $ 7.9 $ 9.4 Logistics 5.1 8.1 Total Operating Income 13.0 17.5 Interest expense, net (8.6) (4.6) Other income (expense), net 0.6 0.6 Income before Income Taxes 5.0 13.5 Income taxes (1.2) (1.0) Net Income $ 3.8 $ 12.5 (1) Ocean Transportation operating revenue excludes inter-segment revenue of $9.4 million and $11.4 million for the three months ended March 31, 2020 and 2019, respectively. (2) Logistics operating revenue excludes inter-segment revenue of $10.0 million and $10.4 million for the three months ended March 31, 2020 and 2019, respectively. (3) Ocean Transportation segment information includes $4.0 million and $8.5 million of equity in income from the Company’s equity investment in SSAT for the three months ended March 31, 2020 and 2019, respectively. |
PROPERTY AND EQUIPMENT
PROPERTY AND EQUIPMENT | 3 Months Ended |
Mar. 31, 2020 | |
PROPERTY AND EQUIPMENT | |
PROPERTY AND EQUIPMENT | 4. PROPERTY AND EQUIPMENT Property and equipment as of March 31, 2020 and December 31, 2019 consisted of the following: March 31, December 31, (In millions) 2020 2019 Cost: Vessels $ 1,966.1 $ 1,653.5 Containers and equipment 528.8 544.5 Terminal facilities and other property 114.6 114.4 Vessel construction in progress 185.4 488.9 Other construction in progress 48.1 35.4 Total Property and Equipment 2,843.0 2,836.7 Less: Accumulated Depreciation (1,253.4) (1,238.6) Total Property and Equipment, net $ 1,589.6 $ 1,598.1 Vessel construction in progress relates to progress payments for the construction of new vessels, capitalized owner’s items and capitalized interest. During the three months ended March 31, 2020, the newly constructed vessel, Lurline million of capitalized interest, being transferred from the Vessel construction in progress category to the Vessels category within Property and Equipment. Capitalized interest included in Vessel construction in progress was |
GOODWILL AND INTANGIBLES ASSETS
GOODWILL AND INTANGIBLES ASSETS | 3 Months Ended |
Mar. 31, 2020 | |
GOODWILL AND INTANGIBLES ASSETS | |
GOODWILL AND INTANGIBLES ASSETS | 5. GOODWILL AND INTANGIBLES Goodwill by segment as of March 31, 2020 and December 31, 2019 consisted of the following: Ocean (In millions) Transportation Logistics Total Goodwill $ 222.6 $ 105.2 $ 327.8 Intangible assets as of March 31, 2020 and December 31, 2019 consisted of the following: March 31, December 31, (In millions) 2020 2019 Customer Relationships: Ocean Transportation $ 140.6 $ 140.6 Logistics 90.1 90.1 Total 230.7 230.7 Less: Accumulated Amortization (57.8) (55.1) Total Customer Relationships, net 172.9 175.6 Trade name – Logistics 27.3 27.3 Total Intangible Assets, net $ 200.2 $ 202.9 The Company evaluates its goodwill and intangible assets for possible impairment in the fourth quarter, or whenever events or changes in circumstances indicate that it is more likely than not that the fair value is less than its carrying amount. The Company has reporting units within the Ocean Transportation and Logistics reportable segments. The Company considered the deterioration in general economic and market conditions due to the COVID-19 pandemic and its impact on the performance of each of the Company’s reporting units. Based on the Company’s assessment of its market capitalization, future forecasts and the amount of excess of fair value over the carrying value of the reporting units in the 2019 annual impairment tests, the Company concluded that an impairment triggering event did not occur during the quarter ended March 31, 2020. The Company will monitor events and changes in circumstances that could negatively impact the key assumptions used in determining the fair value, including the amount and timing of estimated future cash flows generated by the reporting units, long-term growth and discount rates, comparable company market valuations, and industry and economic trends. It is possible that future changes in such circumstances, including a more prolonged and/or severe COVID-19 pandemic, or future changes in the assumptions and estimates used in assessing the fair value of the reporting unit, could require the Company to record a non-cash impairment charge. |
DEBT
DEBT | 3 Months Ended |
Mar. 31, 2020 | |
DEBT | |
DEBT | 6. DEBT At March 31, 2020 and December 31, 2019, the Company’s debt consisted of the following: March 31, December 31, (In millions) 2020 2019 Private Placement Term Loans: 5.79 %, payable through 2020 $ 3.5 $ 3.5 3.66 %, payable through 2023 31.9 31.9 4.16 %, payable through 2027 39.3 39.3 3.37 %, payable through 2027 75.0 75.0 3.14 %, payable through 2031 178.8 188.0 4.31 %, payable through 2032 30.3 30.3 4.35 %, payable through 2044 100.0 100.0 3.92 %, payable through 2045 69.5 69.5 Title XI Debt: 5.34 %, payable through 2028 18.7 19.8 5.27 %, payable through 2029 20.9 22.0 Revolving credit facility, maturity date of June 29, 2022 357.0 379.1 Total Debt 924.9 958.4 Less: Current portion (53.4) (48.4) Total Long-term Debt $ 871.5 $ 910.0 The following is a description of the Company’s debt: Private Placement Term Loans : The During the second quarter of 2012, the Company issued $170.0 million of unsecured notes, which funded in three tranches, $77.5 million at an interest rate of 3.66 percent, $55.0 million at an interest rate of 4.16 percent, and $37.5 million at an interest rate of 4.31 percent (the “2012 Notes”). Principal and interest are payable semi-annually. The 2012 Notes began to amortize in 2015 with aggregate semi-annual payments of In January 2014, the Company issued $100.0 million of 30-year percent, payable semi-annually (the “2014 Notes”). The 2014 Notes will begin to amortize in 2021, with annual principal payments of million in 2028. Starting in 2029, and in each year thereafter until 2044, annual principal payments will be In July 2015, the Company issued $75.0 million of 30-year percent, payable semi-annually (the “2015 Notes”). The 2015 Notes began to amortize in 2017, with annual principal payments of approximately million through 2019. During the years 2020 to 2026, the annual principal payments will range between approximately million. Starting in 2027, and in each year thereafter, the annual principal payments will be approximately In September 2016, the Company issued $200.0 million of 15-year percent, payable semi-annually. The Series D Notes began to amortize in 2019, with semi-annual principal payments of million. During the years 2020 through 2023, semi-annual principal payments will be million. Starting in 2024, and in each year thereafter through maturity in 2031, the semi-annual principal payments will be In December 2016, the Company issued $75 million of 11-year percent, payable semi-annually (the “Series A Notes”). The Series A Notes will begin to amortize in 2021, with principal payments of Existing and 2020 Title XI Bonds: Manukai (the “Existing Title XI Bonds”). The bonds have a final maturity in September 2028 with a coupon rate of percent. The bonds are amortized by semi-annual payments of million plus interest. In August 2004, MatNav issued Maunawili . The bonds have a final maturity in July 2029 with a coupon rate of percent. The bonds are amortized by semi-annual payments of On April 27, 2020, MatNav entered into (i) a consolidated agreement (the “Consolidated Agreement”) among MatNav, the United States of America, represented by the Maritime Administrator of the Maritime Administration (“MARAD”) and, with respect to certain provisions, the Company and (ii) a Note Purchase Agreement (the “Note Purchase Agreement”) among MatNav, MARAD, and the Federal Financing Bank (the “FFB”). Pursuant to the Consolidated Agreement, the Note Purchase Agreement and certain related agreements (collectively, the “2020 Title XI Debt Agreements”), MatNav obtained Title XI financing in the amount of $ million (the “2020 Title XI Bonds” and, collectively with the Existing Title XI Bonds, the “Title XI Bonds”). A fee of approximately million was paid to MARAD out of the proceeds at closing. The net proceeds of approximately million were used to reduce outstanding debt. The 2020 Title XI Bonds mature on October 15, 2043 and have a cash interest rate of 1.22 percent, payable semi-annually in arrears on April 15 and October 15, commencing on October 15, 2020, together with a principal payment of approximately $4.0 million. MatNav may prepay any amounts outstanding under the Consolidated Agreement subject to a potential prepayment premium or other adjustment, in accordance with the 2020 Title XI Debt Agreements. Once amounts under the 2020 Title XI Bonds are repaid, they may not be reborrowed. Mandatory prepayments are required under certain limited circumstances, including specified casualty events with respect to the vessel Daniel K. Inouye (the “Vessel”). Revolving Credit Facility: On June 29, 2017 (the “Closing Date”), the Company entered into an amended and restated credit agreement that provides the Company with additional sources of liquidity for working capital, capital expenditures and investment opportunities, and amends and restates the Company’s previously amended and restated credit agreement (the “Credit Agreement” or the “revolving credit facility”). The Credit Agreement expires on June 29, 2022, and provides for committed aggregate borrowing of up to million. The aggregate borrowing within the Credit Agreement includes a million sublimit for swing line loans. The Company may prepay any amounts outstanding under the Credit Agreement without premium or penalty. All obligations of the Company under the Credit Agreement are guaranteed by Matson’s principal operating subsidiary MatNav and by certain other subsidiaries. On March 31, 2020 the Company entered into a First Amendment to Amended and Restated Credit Agreement (the “Credit Agreement Amendment”) to the Credit Agreement. The Credit Agreement Amendment provides for amendments to certain covenants and other terms, including increasing the permitted consolidated leverage ratio from March 31, 2020 to December 30, 2021, amending the pricing grid to provide for pricing ranging from, at the Company’s election, LIBOR plus a margin between percent and percent depending on the Company’s consolidated net leverage ratio; providing for additional limitations on stock redemptions and repurchases, sale leaseback transactions and asset sales during the period from March 31, 2020 through December 30, 2021; and providing for additional limitations on incurrence of priority debt through December 21, 2027. In addition, the Credit Agreement Amendment adds a “most favored lender” provision for the benefit of the lenders with respect to the Company’s Pursuant to the Credit Agreement Amendment, commencing March 31, 2020, borrowings under the Credit Agreement bear interest at either LIBOR plus a margin of between 1.75 percent and 3.50 percent or the base rate plus a margin of between 0.75 percent and 2.50 percent . Letters of credit are subject to fees based on the Company’s consolidated net leverage ratio at a rate of between As of March 31, 2020, the Company had $163.6 million of remaining borrowing availability under the revolving credit facility. million of the sublimit for letters of credit outstanding as of March 31, 2020. Based on the Company’s consolidated net leverage ratio, which stipulates borrowing margins, the interest rate applicable to revolving credit facility Amendments to Existing Private Placement Term Loan Facilities and New Shelf Facilities (“Private Debt Agreements”): On June 29, 2017, the Company and the holders of the Company’s term loans entered into amendments (collectively, the “2017 Amendments”) to each of Company’s Private Debt Agreements, previously issued prior to the Closing Date. The 2017 Amendments provide for amendments to certain covenants and other terms, including (at the Company’s option under certain circumstances) adjustments to the required consolidated leverage ratio, and, in connection with the exercise of such option, the payment of additional interest for certain pre-defined periods. On March 31, 2020, the Company and the holders of notes party thereto entered into amendments (collectively, the “2020 Amendments”) to each of the Company’s Private Loan Facilities. The 2020 Amendments modify certain covenants and other terms, including increasing the permitted consolidated leverage ratio from March 31, 2020 to December 30, 2021; providing for additional quarterly interest enhancement payments based on the Company’s consolidated leverage ratio from the quarter ended March 31, 2020 through the quarters ending December 31, 2021; providing for an additional 3:00 30, 2021 and September 30, 2021; providing for prepayment at par at the option of the holders with proceeds of certain Title XI debt and dispositions of capital assets; providing for additional limitations on stock redemptions and repurchases, sale leaseback transactions and asset sales during the period from March 31, 2020 through and including December 30, 2021; and providing for additional limitations on incurrence of priority debt through December 21, 2027. In addition, the 2020 Amendments add a “most favored lender” provision for the benefit of the noteholders with respect to the other Private Loan Facilities and the Credit Agreement. Financing Costs: million related to the Credit Agreement Amendment and the 2020 Amendments, respectively. These amounts have been included in other assets in the Condensed Consolidated Balance Sheet as of March 31, 2020. Debt Covenants in the Private Placement Term Loans and the Revolving Credit Facility : The Credit Agreement and Private Loan Facilities (collectively, the “Private Debt Agreements”) contain affirmative, negative and financial covenants customary for financings of this type, including, among other things, limitations on certain other indebtedness, loans and investments, liens, mergers, asset sales, and transactions with affiliates as defined within the Private Debt Agreements. The Private Debt Agreements also contain customary events of default, including cross defaults to other material indebtedness, including the Title XI debt. A brief description of the principal covenants contained in the Private Debt Agreements includes, but is not limited to the following (as defined within the Private Debt Agreements): ● Minimum Consolidated Interest Coverage Ratio as of the end of any fiscal quarter is not permitted to be less than 3.50 to 1.0; ● Maximum Consolidated Leverage Ratio as of the end of any fiscal quarter is not permitted to exceed the ratios specified in the Private Debt Agreements for the applicable quarter; and ● No Priority Debt may be incurred other than: (i) an aggregate of $331,000,000 principal amount of Title XI Priority Debt and (ii) Priority Debt incurred by Foreign Subsidiaries in an aggregate principal amount not to exceed $20,000,000 . Principal covenants generally will restrict the incurrence of liens except for permitted liens, which include, without limitation, liens securing Title XI debt up to certain thresholds, as defined within the Private Debt Agreements. The Company was in compliance with these covenants as of March 31, 2020. Debt Covenants in Existing Title XI Bonds and 2020 Title XI Debt Agreements : The Existing Title XI Bonds contain customary representations and warranties as well as affirmative and negative covenants, defaults and other provisions typical for MARAD-guaranteed financings of this type, with definitions and limitations as defined within the Existing Title XI Bonds. These covenants include, among other things, minimum working capital and net worth requirements, limitations on certain other indebtedness, loans and investments, liens, mergers, asset sales, sale and leaseback transactions, and transactions with affiliates as defined within the Existing Title XI Bonds. Certain of the covenants in the Existing Title XI Bonds are applicable only upon and during the continuance of either (i) an event of default or (ii) the failure of MatNav to meet certain financial requirements. The 2020 Title XI Debt Agreements contain customary representations and warranties as well as affirmative and negative covenants, defaults and other provisions typical for MARAD-guaranteed financings of this type, with definitions, limitations and financial tests all as negotiated between MatNav and MARAD. As part of the 2020 Title XI Debt Agreements, certain covenants contained in the Existing Title XI Bonds were eliminated. The covenants in the 2020 Title XI Debt Agreements include, among other things, limitations on certain other indebtedness, loans and investments, liens, mergers, asset sales, sale-leasebacks, and transactions with affiliates as defined within the 2020 Title XI Debt Agreements. Certain of the covenants in the 2020 Title XI Debt Agreements are applicable only upon and during the continuance of either (i) an event of default or (ii) the failure of either the Company or MatNav to meet certain supplemental financial tests. ● The supplemental financial tests applicable to MatNav include maintenance of a working capital minimum of $1 , and maintenance of a long term debt to net worth ratio of greater than or equal to 2.0 to 1.0; and ● The supplemental financial tests applicable to the Company include maintenance of a net worth greater than or equal to 90% of the net worth of the Company as set forth in the most recent audited financial statements prior to closing of the issuance of the 2020 Title XI Bonds and compliance with the leverage ratio set forth in the Company’s Credit Agreement. Debt Security and Guarantees: All of the debt of the Company and MatNav, including related guarantees, as of March 31, 2020 was unsecured, except for the Title XI debt. Under the 2020 Title XI Debt Agreements, MARAD has guaranteed certain obligations of MatNav to the FFB. MatNav has agreed to reimburse MARAD for any payments it makes under the MARAD guaranty, and MatNav’s obligations to MARAD with respect to the 2020 Title XI Bonds are secured by a mortgage on the Vessel and certain related assets (the “Collateral”), as well as the Existing Vessels (as defined below). In addition, MatNav’s obligations to MARAD with respect to the 2020 Title XI Bonds are guaranteed by the Company under an Affiliate Guaranty (the “Guaranty”). The 2020 Title XI Debt Agreements also provide that the two vessels securing MatNav’s Existing Title XI Bonds – Manukai Maunawili Debt Maturities: Year (in millions) Total 2020 $ 37.0 2021 54.2 2022 416.9 2023 59.9 2024 55.8 Thereafter 301.1 Total debt $ 924.9 |
LEASES
LEASES | 3 Months Ended |
Mar. 31, 2020 | |
LEASES | |
LEASES | 7. LEASES Description of Operating Leases: The Company has different types of operating leases, the specific terms and conditions of which vary from lease to lease. Certain operating lease agreements include terms such as: (i) renewal and early termination options; (ii) early buy-out and purchase options; and (iii) rent escalation clauses. The lease agreements also include provisions for the maintenance of the leased asset and payment of lease related costs. The Company reviews the specific terms and conditions of each lease and, as appropriate, notifies the lessor of any intent to exercise any option in accordance with the terms of the lease. In the normal course of business, the Company expects to be able to renew or replace most of its operating leases with other similar leases as they expire. Except for the residual value guarantee described below, the Company’s leases do not contain any other residual value guarantees. The Company’s sub-lease income was nominal to the Company’s Condensed Consolidated Statements of Income and Comprehensive Income for the three months ended March 31, 2020 and 2019. The Company did not have any finance leases during the three months ended March 31, 2020 and 2019. Certain of the Company’s lease agreements include rental payments that may be adjusted in the future based on economic conditions and others include rental payments adjusted periodically for inflation. Variable lease expense is disclosed for the adjusted portion of such payments. The lease type by underlying asset class and maximum terms of the Company’s operating leases are as follows: Lease Type: Life Real estate and terminal leases 65 years Vessel charter leases 10 years Operations equipment and other leases 8 years Incremental Borrowing Rate: As most of the Company’s operating leases do not provide an implicit rate, the Company uses an estimated incremental borrowing rate based on information available at the lease commencement dates in calculating the present value of its operating lease liabilities. The incremental borrowing rate is determined using the U.S. Treasury rate adjusted to account for the Company’s credit rating and the collateralized nature of operating leases. Components of Lease Cost: Components of lease cost recorded in the Company’s Condensed Consolidated Statement of Income and Comprehensive Income for the three months ended March 31, 2020 and 2019 consisted of the following: Three Months Ended March 31, (In millions) 2020 2019 Operating lease cost $ 20.0 $ 16.7 Short-term lease cost 0.1 2.4 Variable lease cost 0.2 0.1 Total lease cost $ 20.3 $ 19.2 Sale and Leaseback of Equipment: On March 25, 2020, the Company entered into an agreement for the sale and leaseback of multiple tranches of chassis and container equipment. The net proceeds from the sales were million, and the gain on the disposal of the equipment was not material to the Company’s Condensed Consolidated Financial Statements. The Company subsequently leased back the equipment under a operating lease agreement that includes purchase options exercisable at fair market value. The Company has included the right of use asset and related lease liabilities in other lease information below. There were Other Lease Information: Other information related to the Company’s operating leases for the three months ended March 31, 2020 and 2019 consisted of the following: Three Months Ended March 31, (In millions) 2020 2019 Cash paid for amounts included in operating lease liabilities $ 20.5 $ 16.7 Right of use assets obtained in the exchange for new operating lease liabilities $ 16.1 $ 5.8 March 31, 2020 December 31, 2019 Weighted average remaining operating lease term 7.4 years 7.5 years Weighted average incremental borrowing rate 4.1% 4.2% Maturities of operating lease liabilities at March 31, 2020 are as follows: As of Year (in millions) March 31, 2020 2020 $ 58.7 2021 58.4 2022 46.7 2023 41.2 2024 26.2 Thereafter 79.8 Total lease payments 311.0 Less: Interest (48.3) Present value of operating lease liabilities 262.7 Less: Short-term portion (65.5) Long-term operating lease liabilities $ 197.2 Vessel Charter: On November 26, 2018, a wholly-owned subsidiary of the Company entered into a Bareboat Charter Agreement (the “Charter”). Charter lease payments are approximately $3.0 million per quarter and are included in the operating lease liabilities described above. The base term of the Charter is five years with a two year end-of-term renewal option. The Charter also includes a maximum residual value guarantee amount of $50.9 million after five years , or $47.7 million after the extended term . The residual value guarantee is excluded from operating lease liabilities described above as the Company determined that it is not probable that any portion of the residual value guarantee will be paid by the Company. The Charter and residual value guarantee are described in Note 9 to the Consolidated Financial Statements included in Part II, Item 8 of the Company’s Annual Report on Form 10-K for the year ended December 31, 2019. |
ACCUMULATED OTHER COMPREHENSIVE
ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS) | 3 Months Ended |
Mar. 31, 2020 | |
ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS). | |
ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS) | 8. ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS) Changes in accumulated other comprehensive income (loss) by component, net of tax, for the three months ended March 31, 2020 are as follows: Accumulated Non- Other Post- Qualified Comprehensive (In millions) Pensions Retirement Plans Other Income (Loss) Balance at December 31, 2019 $ (51.9) $ 16.3 $ (0.4) $ (0.9) $ (36.9) Amortization of prior service cost (0.5) (0.6) (0.1) — (1.2) Amortization of net loss 1.1 0.1 0.1 — 1.3 Foreign currency exchange — — — (0.5) (0.5) Other adjustments — — — (0.2) (0.2) Balance at March 31, 2020 $ (51.3) $ 15.8 $ (0.4) $ (1.6) $ (37.5) Changes in accumulated other comprehensive income (loss) by component, net of tax, for the three months ended March 31, 2019 consisted of the following: Accumulated Non- Other Post- Qualified Comprehensive (In millions) Pensions Retirement Plans Other Income (Loss) Balance at December 31, 2018 $ (55.8) $ 21.7 $ (0.1) $ (0.3) $ (34.5) Amortization of prior service cost (0.4) (0.7) — — (1.1) Amortization of net loss 0.7 0.2 — — 0.9 Balance at March 31, 2019 $ (55.5) $ 21.2 $ (0.1) $ (0.3) $ (34.7) |
FAIR VALUE OF FINANCIAL INSTRUM
FAIR VALUE OF FINANCIAL INSTRUMENTS | 3 Months Ended |
Mar. 31, 2020 | |
FAIR VALUE OF FINANCIAL INSTRUMENTS | |
FAIR VALUE OF FINANCIAL INSTRUMENTS | 9. FAIR VALUE OF FINANCIAL INSTRUMENTS The Company values its financial instruments based on the fair value hierarchy of valuation techniques for fair value measurements. Level 1 inputs are unadjusted quoted prices in active markets for identical assets or liabilities at the measurement date. Level 2 inputs include quoted prices for similar assets and liabilities in active markets and inputs other than quoted prices observable for the asset or liability. Level 3 inputs are unobservable inputs for the asset or liability. If the technique used to measure fair value includes inputs from multiple levels of the fair value hierarchy, the lowest level of significant input determines the placement of the entire fair value measurement in the hierarchy. The Company uses Level 1 inputs for the fair values of its cash, cash equivalents and restricted cash, and Level 2 inputs for its variable and fixed rate debt. The fair values of cash, cash equivalents and restricted cash, and variable rate debt approximate their carrying values due to the nature of the instruments. The fair value of fixed rate debt is calculated based upon interest rates available for debt with terms and maturities similar to the Company’s existing debt arrangements. The carrying value and fair value of the Company’s financial instruments as of March 31, 2020 and December 31, 2019 are as follows: Quoted Prices in Significant Significant Total Active Markets Observable Unobservable Carrying Value Total (Level 1) Inputs (Level 2) Inputs (Level 3) (In millions) March 31, 2020 Fair Value Measurements at March 31, 2020 Cash and cash equivalents $ 19.9 $ 19.9 $ 19.9 $ — $ — Restricted cash $ 5.8 $ 5.8 $ 5.8 $ — $ — Variable rate debt $ 357.0 $ 357.0 $ — $ 357.0 $ — Fixed rate debt $ 567.9 $ 558.7 $ — $ 558.7 $ — (In millions) December 31, 2019 Fair Value Measurements at December 31, 2019 Cash and cash equivalents $ 21.2 $ 21.2 $ 21.2 $ — $ — Restricted cash $ 7.2 $ 7.2 $ 7.2 $ — $ — Variable rate debt $ 379.1 $ 379.1 $ — $ 379.1 $ — Fixed rate debt $ 579.3 $ 585.9 $ — $ 585.9 $ — |
EARNINGS PER-SHARE
EARNINGS PER-SHARE | 3 Months Ended |
Mar. 31, 2020 | |
EARNINGS PER-SHARE | |
EARNINGS PER-SHARE | 10. EARNINGS PER SHARE Basic earnings per share is determined by dividing net income by the weighted average common shares outstanding during the period. The calculation of diluted earnings per share includes the dilutive effect of unexercised non-qualified stock options and non-vested restricted stock units. The computation of weighted average common shares outstanding excluded a nominal amount of anti-dilutive non-qualified stock options for each period ended March 31, 2020 and 2019. The denominators used to compute basic and diluted earnings per share for the three months ended March 31, 2020 and 2019 are as follows: Three Months Ended March 31, 2020 Three Months Ended March 31, 2019 Weighted Per Weighted Per Average Common Average Common Net Common Share Net Common Share (In millions, except per share amounts) Income Shares Amount Income Shares Amount Basic: $ 3.8 43.0 $ 0.09 $ 12.5 42.8 $ 0.29 Effect of Dilutive Securities: 0.3 — 0.3 — Diluted: $ 3.8 43.3 $ 0.09 $ 12.5 43.1 $ 0.29 |
SHARE-BASED COMPENSATION
SHARE-BASED COMPENSATION | 3 Months Ended |
Mar. 31, 2020 | |
SHARE-BASED COMPENSATION | |
SHARE-BASED COMPENSATION | 11. SHARE-BASED COMPENSATION During the three months ended March 31, 2020, the Company granted approximately 316,200 in total of time-based restricted stock units and performance-based shares to certain of its employees at a weighted average grant date fair value of $39.43. Total share-based compensation cost recognized in the Condensed Consolidated Statements of Income and Comprehensive Income as a component of selling, general and administrative expenses was $3.1 million and $3.2 million for the three months ended March 31, 2020 and 2019, respectively. Total unrecognized compensation cost related to unvested share-based compensation arrangements was years. Total unrecognized compensation cost may be adjusted for any unearned performance shares or forfeited shares. |
PENSION AND POST-RETIREMENT PLA
PENSION AND POST-RETIREMENT PLANS | 3 Months Ended |
Mar. 31, 2020 | |
PENSION AND POST-RETIREMENT PLANS | |
PENSION AND POST-RETIREMENT PLANS | 12. PENSION AND POST-RETIREMENT PLANS The Company’s pension and post-retirement plans are described in Note 11 to the Consolidated Financial Statements included in Part II, Item 8 of the Company’s Annual Report on Form 10-K for the year ended December 31, 2019 . Components of net periodic benefit cost and other amounts recognized in Other Comprehensive Income (Loss) for the qualified pension plans and the post-retirement benefit plans for the three months ended March 31, 2020 and 2019 consisted of the following: Pension Benefits Post-retirement Benefits Three Months Ended March 31, Three Months Ended March 31, (In millions) 2020 2019 2020 2019 Components of net periodic benefit cost (benefit): Service cost $ 1.2 $ 1.1 $ 0.1 $ 0.1 Interest cost 1.9 2.3 0.2 0.3 Expected return on plan assets (3.2) (3.1) — — Amortization of net loss 1.5 0.9 0.2 0.2 Amortization of prior service credit (0.6) (0.6) (0.9) (0.9) Net periodic benefit cost (benefit) $ 0.8 $ 0.6 $ (0.4) $ (0.3) |
SIGNIFICANT ACCOUNTING POLICI_2
SIGNIFICANT ACCOUNTING POLICIES (Policies) | 3 Months Ended |
Mar. 31, 2020 | |
SIGNIFICANT ACCOUNTING POLICIES | |
Basis of Presentation | Basis of Presentation: The Condensed Consolidated Financial Statements are unaudited, and include the accounts of Matson, Inc. and all wholly-owned subsidiaries, after elimination of intercompany amounts and transactions. Significant investments in businesses, partnerships, and limited liability companies in which the Company does not have a controlling financial interest, but has the ability to exercise significant influence, are accounted for under the equity method. The Company accounts for its investment in SSAT using the equity method of accounting. Due to the nature of the Company’s operations, the results for interim periods are not necessarily indicative of results to be expected for the year. These Condensed Consolidated Financial Statements reflect all normal recurring adjustments that are, in the opinion of management, necessary for fair presentation of the results of the interim periods, and do not include all of the information and footnotes required by U.S. generally accepted accounting principles for complete consolidated financial statements. The Condensed Consolidated Financial Statements should be read in conjunction with the Consolidated Financial Statements and notes thereto included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2019, filed with the Securities and Exchange Commission (“SEC”) on February 28, 2020. |
Fiscal Period | Fiscal Period: The period end for Matson covered by this report is March 31, 2020. The period end for MatNav and its subsidiaries covered by this report occurred on the last Friday in March, or March 27, 2020, for the first quarter 2020. |
Significant Accounting Policies | Significant Accounting Policies: The Company’s significant accounting policies are described in Note 2 to the Consolidated Financial Statements included in Part II, Item 8 of the Company’s Annual Report on Form 10-K for the year ended December 31, 2019. |
Use of Estimates | Use of Estimates: The preparation of the interim condensed consolidated financial statements in conformity with accounting principles generally accepted in the U.S. requires management to make estimates and assumptions that affect the amounts reported. Estimates and assumptions are used for, but not limited to: impairment of investments; impairment of long-lived assets, intangible assets and goodwill; capitalized interest; allowance for doubtful accounts; legal contingencies; uninsured risks and related liabilities; accrual estimates; pension and post-retirement estimates; multi-employer withdrawal liabilities; operating lease assets and liabilities; and income taxes. Future results could be materially affected if actual results differ from these estimates and assumptions. |
Allowance for Doubtful Accounts Receivable | Allowance for Doubtful Accounts Receivable: Allowance for doubtful accounts receivable is established by management based on estimates of collectability. Estimates of collectability are principally based on an evaluation of the current financial condition of the customer and the potential risks to collection, the customers’ payment history, expected future credit losses and other factors which are regularly monitored by the Company. |
Recognition of Revenues and Related Expenses | Recognition of Revenues and Related Expenses: Revenue in the Company’s Condensed Consolidated Financial Statements is presented net of elimination of intercompany transactions. The following is a description of the Company’s principal revenue generating activities by segment, and the Company’s revenue recognition policy for each activity for the periods presented: March 31, Ocean Transportation (in millions) (1) 2020 2019 Ocean Transportation services $ 391.1 $ 387.9 Terminal and other related services 5.8 6.7 Fuel sales 2.6 2.0 Vessel management and related services 1.4 1.3 Total $ 400.9 $ 397.9 (1) Ocean Transportation revenue transactions are primarily denominated in U.S. dollars except for less than 3 percent of Ocean Transportation revenues and fuel sales revenue categories which are denominated in foreign currencies. ◾ Ocean Transportation services revenue is recognized ratably over the duration of a voyage based on the relative transit time completed in each reporting period. Vessel operating costs and other ocean transportation operating costs, such as terminal operating overhead and general and administrative expenses, are charged to operating costs as incurred. ◾ Terminal and other related services revenue is recognized as the services are performed. Related costs are recognized as incurred. ◾ Fuel sales revenue and related costs are recognized when the Company has completed delivery of the product to the customer in accordance with the terms and conditions of the contract. ◾ Vessel management and related services revenue is recognized in proportion to the services completed. Related costs are recognized as incurred. March 31, Logistics (in millions) (1) 2020 2019 (2) Transportation Brokerage and Freight Forwarding services $ 102.1 $ 123.3 Warehouse and distribution services 8.2 8.4 Supply chain management and other services 2.7 2.8 Total $ 113.0 $ 134.5 (1) Logistics revenue transactions are primarily denominated in U.S. dollars except for less than 3 percent of transportation brokerage and freight forwarding services revenue, and supply chain management and other services revenue categories which are denominated in foreign currencies. (2) The Company has reclassified $3.1 million from transportation brokerage and freight forwarding services to warehouse and distribution services for the quarter ended March 31, 2019 to be consistent with its current period presentation. There was no change in total Logistics revenue for the quarter ended March 31, 2019. ◾ Transportation Brokerage and Freight Forwarding services revenue consists of amounts billed to customers for services provided. The primary costs include third-party purchased transportation services, labor and equipment. Revenue and the related purchased third-party transportation costs are recognized over the duration of a delivery based upon the relative transit time completed in each reporting period. Labor and other operating costs are expensed as incurred. The Company reports revenue on a gross basis as the Company serves as the principal in these transactions because it is responsible for fulfilling the contractual arrangements with the customer and has latitude in establishing prices. ◾ Warehousing and distribution services revenue consist of amounts billed to customers for storage, handling, and value-added packaging of customer merchandise. Storage revenue is recognized in the month the service is provided to the customer. Storage related costs are recognized as incurred. Other warehousing and distribution services revenue and related costs are recognized in proportion to the services performed. ◾ Supply chain management and other services revenue, and related costs are recognized in proportion to the services performed. The Company generally invoices its customers at the commencement of the voyage or the transportation service being provided, or as other services are being performed. Revenue is deferred when services are invoiced in advance to the customer. The Company’s receivables are classified as short-term as collection terms are for periods of less than one year. The Company expenses sales commissions and contract acquisition costs as incurred because the amounts are generally immaterial. These expenses are included in selling, general and administrative expenses in the Condensed Consolidated Statements of Income and Comprehensive Income. |
Capital Construction Fund | Capital Construction Fund: The Company’s Capital Construction Fund (“CCF”) is described in Note 7 to the Consolidated Financial Statements included in Part II, Item 8 of the Company’s Annual Report on Form 10-K for the year ended December 31, 2019. million of eligible accounts receivable was assigned to the CCF. Due to the nature of the assignment of eligible accounts receivable into the CCF, such assigned amounts are classified as part of accounts receivable in the Condensed Consolidated Balance Sheets. Cash on deposit in the CCF is held in a money market account and classified as a long-term asset in the Company’s Condensed Consolidated Balance Sheets, as the Company intends to use qualified cash withdrawals to fund long-term investment in the construction of new vessels. During the three months ended March 31, 2020 and 2019, the Company deposited million from the CCF, respectively. The balance of cash on deposit at March 31, 2020 and December 31, 2019 was nominal. |
Investment in SSAT | Investment in SSAT: Condensed income statement information (unaudited) for SSAT for the three months ended March 31, 2020 and 2019 consisted of the following: Three Months Ended March 31, (In millions) 2020 2019 Operating revenue $ 278.9 $ 268.1 Operating costs and expenses (265.4) (244.2) Operating income 13.5 23.9 Net Income (1) $ 13.0 $ 22.5 Company Share of SSAT's Net Income (2) $ 4.0 $ 8.5 (1) Includes earnings from equity method investments held by SSAT less earnings allocated to non-controlling interests. (2) The Company records its share of net income from SSAT in costs and expenses in the Condensed Consolidated Statement of Income and Comprehensive Income due to the nature of SSAT’s operations. The Company’s investment in SSAT was $74.3 million and $76.2 million at March 31, 2020 and December 31, 2019, respectively. During the three months ended March 31, 2020, the Company recorded an increase of $2.2 million in its investment in SSAT and a corresponding increase in retained earnings related to the formation of a new subsidiary of SSAT, whose controlling interest is retained by SSAT. |
Contingencies and Other Matters | Contingencies: Environmental Matters: Other Matters: The Company and its subsidiaries are parties to, or may be contingently liable in connection with other legal actions arising in the normal course of their businesses, the outcomes of which, in the opinion of management after consultation with counsel, would not have a material effect on the Company’s financial condition, results of operations, or cash flows. |
Dividends | Dividends: The Company’s first quarter 2020 cash dividend of $0.22 per share was paid on March 5, 2020. On April 23, 2020, the Company’s Board of Directors declared a cash dividend of $0.22 per share payable on June 4, 2020. |
New Accounting Pronouncements | New Accounting Pronouncements: Measurement of Credit Losses on Financial Instruments : In June 2016, the Financial Accounting Standards Board issued ASU 2016- 13 which amends the current approach to estimate credit losses on certain financial assets, including trade and other receivables, available-for-sale securities and other financial instruments. ASU 2016- 13 requires entities to establish a valuation allowance for the expected lifetime losses of certain financial instruments. Subsequent changes in the valuation allowance are recorded in current earnings and reversal of previous losses is permitted. The new standard is effective for interim and annual periods beginning on or after December 15, 2019. The Company adopted ASU 2016- 13 effective January 1, 2020 using the modified retrospective approach. Upon adoption, the Company included an evaluation of expected future credit losses as part of its estimate for determining the allowance for doubtful accounts. The impact of this change was not material to the Company’s allowance for doubtful accounts receivable in the Condensed Consolidated Financial Statements. The Company will continue to monitor the impact of the recent COVID-19 pandemic on expected future credit losses. The Company’s accounting policy related to allowance for doubtful accounts receivable is described above. |
SIGNIFICANT ACCOUNTING POLICI_3
SIGNIFICANT ACCOUNTING POLICIES (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
Schedule of condensed income statement information (unaudited) for SSAT | Three Months Ended March 31, (In millions) 2020 2019 Operating revenue $ 278.9 $ 268.1 Operating costs and expenses (265.4) (244.2) Operating income 13.5 23.9 Net Income (1) $ 13.0 $ 22.5 Company Share of SSAT's Net Income (2) $ 4.0 $ 8.5 (1) Includes earnings from equity method investments held by SSAT less earnings allocated to non-controlling interests. (2) The Company records its share of net income from SSAT in costs and expenses in the Condensed Consolidated Statement of Income and Comprehensive Income due to the nature of SSAT’s operations. |
Ocean Transportation | |
Schedule of principal revenue generating activities by segment | March 31, Ocean Transportation (in millions) (1) 2020 2019 Ocean Transportation services $ 391.1 $ 387.9 Terminal and other related services 5.8 6.7 Fuel sales 2.6 2.0 Vessel management and related services 1.4 1.3 Total $ 400.9 $ 397.9 (1) Ocean Transportation revenue transactions are primarily denominated in U.S. dollars except for less than 3 percent of Ocean Transportation revenues and fuel sales revenue categories which are denominated in foreign currencies. ◾ Ocean Transportation services revenue is recognized ratably over the duration of a voyage based on the relative transit time completed in each reporting period. Vessel operating costs and other ocean transportation operating costs, such as terminal operating overhead and general and administrative expenses, are charged to operating costs as incurred. ◾ Terminal and other related services revenue is recognized as the services are performed. Related costs are recognized as incurred. ◾ Fuel sales revenue and related costs are recognized when the Company has completed delivery of the product to the customer in accordance with the terms and conditions of the contract. ◾ Vessel management and related services revenue is recognized in proportion to the services completed. Related costs are recognized as incurred. |
Logistics | |
Schedule of principal revenue generating activities by segment | March 31, Logistics (in millions) (1) 2020 2019 (2) Transportation Brokerage and Freight Forwarding services $ 102.1 $ 123.3 Warehouse and distribution services 8.2 8.4 Supply chain management and other services 2.7 2.8 Total $ 113.0 $ 134.5 (1) Logistics revenue transactions are primarily denominated in U.S. dollars except for less than 3 percent of transportation brokerage and freight forwarding services revenue, and supply chain management and other services revenue categories which are denominated in foreign currencies. (2) The Company has reclassified $3.1 million from transportation brokerage and freight forwarding services to warehouse and distribution services for the quarter ended March 31, 2019 to be consistent with its current period presentation. There was no change in total Logistics revenue for the quarter ended March 31, 2019. ◾ Transportation Brokerage and Freight Forwarding services revenue consists of amounts billed to customers for services provided. The primary costs include third-party purchased transportation services, labor and equipment. Revenue and the related purchased third-party transportation costs are recognized over the duration of a delivery based upon the relative transit time completed in each reporting period. Labor and other operating costs are expensed as incurred. The Company reports revenue on a gross basis as the Company serves as the principal in these transactions because it is responsible for fulfilling the contractual arrangements with the customer and has latitude in establishing prices. ◾ Warehousing and distribution services revenue consist of amounts billed to customers for storage, handling, and value-added packaging of customer merchandise. Storage revenue is recognized in the month the service is provided to the customer. Storage related costs are recognized as incurred. Other warehousing and distribution services revenue and related costs are recognized in proportion to the services performed. ◾ Supply chain management and other services revenue, and related costs are recognized in proportion to the services performed. |
REPORTABLE SEGMENTS (Tables)
REPORTABLE SEGMENTS (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
REPORTABLE SEGMENTS | |
Schedule of reportable segment information | Three Months Ended March 31, (In millions) 2020 2019 Operating Revenue: Ocean Transportation (1) $ 400.9 $ 397.9 Logistics (2) 113.0 134.5 Total Operating Revenue $ 513.9 $ 532.4 Operating Income: Ocean Transportation (3) $ 7.9 $ 9.4 Logistics 5.1 8.1 Total Operating Income 13.0 17.5 Interest expense, net (8.6) (4.6) Other income (expense), net 0.6 0.6 Income before Income Taxes 5.0 13.5 Income taxes (1.2) (1.0) Net Income $ 3.8 $ 12.5 (1) Ocean Transportation operating revenue excludes inter-segment revenue of $9.4 million and $11.4 million for the three months ended March 31, 2020 and 2019, respectively. (2) Logistics operating revenue excludes inter-segment revenue of $10.0 million and $10.4 million for the three months ended March 31, 2020 and 2019, respectively. (3) Ocean Transportation segment information includes $4.0 million and $8.5 million of equity in income from the Company’s equity investment in SSAT for the three months ended March 31, 2020 and 2019, respectively. |
PROPERTY AND EQUIPMENT (Tables)
PROPERTY AND EQUIPMENT (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
PROPERTY AND EQUIPMENT | |
Schedule of property and equipment | March 31, December 31, (In millions) 2020 2019 Cost: Vessels $ 1,966.1 $ 1,653.5 Containers and equipment 528.8 544.5 Terminal facilities and other property 114.6 114.4 Vessel construction in progress 185.4 488.9 Other construction in progress 48.1 35.4 Total Property and Equipment 2,843.0 2,836.7 Less: Accumulated Depreciation (1,253.4) (1,238.6) Total Property and Equipment, net $ 1,589.6 $ 1,598.1 |
GOODWILL AND INTANGIBLES ASSE_2
GOODWILL AND INTANGIBLES ASSETS (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
GOODWILL AND INTANGIBLES ASSETS | |
Schedule of goodwill | Goodwill by segment as of March 31, 2020 and December 31, 2019 consisted of the following: Ocean (In millions) Transportation Logistics Total Goodwill $ 222.6 $ 105.2 $ 327.8 |
Schedule of intangible assets | March 31, December 31, (In millions) 2020 2019 Customer Relationships: Ocean Transportation $ 140.6 $ 140.6 Logistics 90.1 90.1 Total 230.7 230.7 Less: Accumulated Amortization (57.8) (55.1) Total Customer Relationships, net 172.9 175.6 Trade name – Logistics 27.3 27.3 Total Intangible Assets, net $ 200.2 $ 202.9 |
DEBT (Tables)
DEBT (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
DEBT | |
Schedule of debt | March 31, December 31, (In millions) 2020 2019 Private Placement Term Loans: 5.79 %, payable through 2020 $ 3.5 $ 3.5 3.66 %, payable through 2023 31.9 31.9 4.16 %, payable through 2027 39.3 39.3 3.37 %, payable through 2027 75.0 75.0 3.14 %, payable through 2031 178.8 188.0 4.31 %, payable through 2032 30.3 30.3 4.35 %, payable through 2044 100.0 100.0 3.92 %, payable through 2045 69.5 69.5 Title XI Debt: 5.34 %, payable through 2028 18.7 19.8 5.27 %, payable through 2029 20.9 22.0 Revolving credit facility, maturity date of June 29, 2022 357.0 379.1 Total Debt 924.9 958.4 Less: Current portion (53.4) (48.4) Total Long-term Debt $ 871.5 $ 910.0 |
Schedule of maturities of debt | Year (in millions) Total 2020 $ 37.0 2021 54.2 2022 416.9 2023 59.9 2024 55.8 Thereafter 301.1 Total debt $ 924.9 |
LEASES (Tables)
LEASES (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
LEASES | |
Summary of underlying asset class and maximum terms | Lease Type: Life Real estate and terminal leases 65 years Vessel charter leases 10 years Operations equipment and other leases 8 years |
Summary of lease cost | Components of Lease Cost: Components of lease cost recorded in the Company’s Condensed Consolidated Statement of Income and Comprehensive Income for the three months ended March 31, 2020 and 2019 consisted of the following: Three Months Ended March 31, (In millions) 2020 2019 Operating lease cost $ 20.0 $ 16.7 Short-term lease cost 0.1 2.4 Variable lease cost 0.2 0.1 Total lease cost $ 20.3 $ 19.2 Other Lease Information: Other information related to the Company’s operating leases for the three months ended March 31, 2020 and 2019 consisted of the following: Three Months Ended March 31, (In millions) 2020 2019 Cash paid for amounts included in operating lease liabilities $ 20.5 $ 16.7 Right of use assets obtained in the exchange for new operating lease liabilities $ 16.1 $ 5.8 March 31, 2020 December 31, 2019 Weighted average remaining operating lease term 7.4 years 7.5 years Weighted average incremental borrowing rate 4.1% 4.2% |
Summary of maturities of operating lease liabilities at March 31, 2020 | As of Year (in millions) March 31, 2020 2020 $ 58.7 2021 58.4 2022 46.7 2023 41.2 2024 26.2 Thereafter 79.8 Total lease payments 311.0 Less: Interest (48.3) Present value of operating lease liabilities 262.7 Less: Short-term portion (65.5) Long-term operating lease liabilities $ 197.2 |
ACCUMULATED OTHER COMPREHENSI_2
ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS) (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS). | |
Schedule of changes in accumulated other comprehensive income (loss) by component, net of tax | Accumulated Non- Other Post- Qualified Comprehensive (In millions) Pensions Retirement Plans Other Income (Loss) Balance at December 31, 2019 $ (51.9) $ 16.3 $ (0.4) $ (0.9) $ (36.9) Amortization of prior service cost (0.5) (0.6) (0.1) — (1.2) Amortization of net loss 1.1 0.1 0.1 — 1.3 Foreign currency exchange — — — (0.5) (0.5) Other adjustments — — — (0.2) (0.2) Balance at March 31, 2020 $ (51.3) $ 15.8 $ (0.4) $ (1.6) $ (37.5) Accumulated Non- Other Post- Qualified Comprehensive (In millions) Pensions Retirement Plans Other Income (Loss) Balance at December 31, 2018 $ (55.8) $ 21.7 $ (0.1) $ (0.3) $ (34.5) Amortization of prior service cost (0.4) (0.7) — — (1.1) Amortization of net loss 0.7 0.2 — — 0.9 Balance at March 31, 2019 $ (55.5) $ 21.2 $ (0.1) $ (0.3) $ (34.7) |
FAIR VALUE OF FINANCIAL INSTR_2
FAIR VALUE OF FINANCIAL INSTRUMENTS (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
FAIR VALUE OF FINANCIAL INSTRUMENTS | |
Scehdule of fair value of financial instruments | Quoted Prices in Significant Significant Total Active Markets Observable Unobservable Carrying Value Total (Level 1) Inputs (Level 2) Inputs (Level 3) (In millions) March 31, 2020 Fair Value Measurements at March 31, 2020 Cash and cash equivalents $ 19.9 $ 19.9 $ 19.9 $ — $ — Restricted cash $ 5.8 $ 5.8 $ 5.8 $ — $ — Variable rate debt $ 357.0 $ 357.0 $ — $ 357.0 $ — Fixed rate debt $ 567.9 $ 558.7 $ — $ 558.7 $ — (In millions) December 31, 2019 Fair Value Measurements at December 31, 2019 Cash and cash equivalents $ 21.2 $ 21.2 $ 21.2 $ — $ — Restricted cash $ 7.2 $ 7.2 $ 7.2 $ — $ — Variable rate debt $ 379.1 $ 379.1 $ — $ 379.1 $ — Fixed rate debt $ 579.3 $ 585.9 $ — $ 585.9 $ — |
EARNINGS PER-SHARE (Tables)
EARNINGS PER-SHARE (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
EARNINGS PER-SHARE | |
Schedule of basic and diluted earnings per share | Three Months Ended March 31, 2020 Three Months Ended March 31, 2019 Weighted Per Weighted Per Average Common Average Common Net Common Share Net Common Share (In millions, except per share amounts) Income Shares Amount Income Shares Amount Basic: $ 3.8 43.0 $ 0.09 $ 12.5 42.8 $ 0.29 Effect of Dilutive Securities: 0.3 — 0.3 — Diluted: $ 3.8 43.3 $ 0.09 $ 12.5 43.1 $ 0.29 |
PENSION AND POST-RETIREMENT P_2
PENSION AND POST-RETIREMENT PLANS (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
PENSION AND POST-RETIREMENT PLANS | |
Components of net periodic benefit cost (benefit) | Pension Benefits Post-retirement Benefits Three Months Ended March 31, Three Months Ended March 31, (In millions) 2020 2019 2020 2019 Components of net periodic benefit cost (benefit): Service cost $ 1.2 $ 1.1 $ 0.1 $ 0.1 Interest cost 1.9 2.3 0.2 0.3 Expected return on plan assets (3.2) (3.1) — — Amortization of net loss 1.5 0.9 0.2 0.2 Amortization of prior service credit (0.6) (0.6) (0.9) (0.9) Net periodic benefit cost (benefit) $ 0.8 $ 0.6 $ (0.4) $ (0.3) |
DESCRIPTION OF THE BUSINESS (De
DESCRIPTION OF THE BUSINESS (Details) | 3 Months Ended | |
Mar. 31, 2020segmentfacility | Mar. 31, 2019segment | |
DESCRIPTION OF THE BUSINESS | ||
Number of reportable segments | segment | 2 | 2 |
Ocean Transportation | SSAT | ||
DESCRIPTION OF THE BUSINESS | ||
Ownership interest in SSAT (as a percent) | 35.00% | |
Number of terminal facilities on which SSAT provided terminal and stevedoring services on the U.S. West Coast | 8 | |
MatNav | SSAT | ||
DESCRIPTION OF THE BUSINESS | ||
Number of terminal facilities on which SSAT provided terminal and stevedoring services on the U.S. West Coast | 4 |
SIGNIFICANT ACCOUNTING POLICI_4
SIGNIFICANT ACCOUNTING POLICIES - RECOGNITION OF REVENUES AND EXPENSES (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Total | $ 513.9 | $ 532.4 |
Ocean Transportation | ||
Ocean Transportation services | 391.1 | 387.9 |
Terminal and other related services | 5.8 | 6.7 |
Fuel sales | 2.6 | 2 |
Vessel management services and related costs | $ 1.4 | $ 1.3 |
Percentage of ocean transportation revenues and fuel sales denominated in foreign currency | 3.00% | 3.00% |
Total | $ 400.9 | $ 397.9 |
Logistics | ||
Transportation Brokerage and Freight Forwarding Services | 102.1 | 123.3 |
Warehouse and distribution services | 8.2 | 8.4 |
Supply chain management and other services | 2.7 | 2.8 |
Total | $ 113 | $ 134.5 |
Percentage of transportation brokerage and freight forwarding services revenue denominated in foreign currency | 3.00% | 3.00% |
Ocean Transportation | ||
Total | $ 400.9 | $ 397.9 |
Logistics | ||
Total | $ 113 | 134.5 |
Reclassify Transportation Brokerage and Freight Forwarding Services | ||
Transportation Brokerage and Freight Forwarding Services | (3.1) | |
Warehouse and distribution services | $ 3.1 |
SIGNIFICANT ACCOUNTING POLICI_5
SIGNIFICANT ACCOUNTING POLICIES - CAPITAL CONSTRUCTION FUND (Details) - USD ($) $ in Millions | 3 Months Ended | ||
Mar. 31, 2020 | Mar. 31, 2019 | Dec. 31, 2019 | |
Accounts receivable, net | $ 218.8 | $ 205.9 | |
Cash Deposits Into CCF | 70.4 | $ 13.4 | |
Qualifying withdrawal from CCF | 70.4 | 13.4 | |
Eligible Accounts Receivable Assigned to CCF | |||
Accounts receivable, net | 1.7 | $ 1.7 | |
Cash Deposits Into CCF | 70.4 | 13.4 | |
Qualifying withdrawal from CCF | $ 70.4 | $ 13.4 |
SIGNIFICANT ACCOUNTING POLICI_6
SIGNIFICANT ACCOUNTING POLICIES - INVESTMENT IN SSAT (Details) - USD ($) $ in Millions | 3 Months Ended | ||
Mar. 31, 2020 | Mar. 31, 2019 | Dec. 31, 2019 | |
Investments in affiliates | |||
Investment in Terminal Joint Venture | $ 74.3 | $ 76.2 | |
Financial information for equity method investment | |||
Company Share of Net Income | 4 | $ 8.5 | |
Ocean Transportation | |||
Financial information for equity method investment | |||
Company Share of Net Income | 4 | 8.5 | |
SSAT | |||
Investments in affiliates | |||
Increase in investment in SSAT | 2.2 | ||
Investment in Terminal Joint Venture | 74.3 | $ 76.2 | |
Financial information for equity method investment | |||
Operating revenue | 278.9 | 268.1 | |
Operating costs and expenses | (265.4) | (244.2) | |
Operating Income | 13.5 | 23.9 | |
Net Income | $ 13 | $ 22.5 |
SIGNIFICANT ACCOUNTING POLICI_7
SIGNIFICANT ACCOUNTING POLICIES - DIVIDENDS (Details) - $ / shares | Apr. 23, 2020 | Mar. 31, 2020 | Mar. 31, 2019 |
Dividends | |||
Dividends (per share) | $ 0.22 | $ 0.21 | |
Cash dividends declared per share (in dollars per share) | $ 0.22 |
REPORTABLE SEGMENTS (Details)
REPORTABLE SEGMENTS (Details) $ in Millions | 3 Months Ended | |
Mar. 31, 2020USD ($)segment | Mar. 31, 2019USD ($)segment | |
Segment results | ||
Number of reportable segments | segment | 2 | 2 |
Total Operating Revenue | $ 513.9 | $ 532.4 |
Total Operating Income | 13 | 17.5 |
Interest expense, net | (8.6) | (4.6) |
Other income (expense), net | 0.6 | 0.6 |
Income before Income Taxes | 5 | 13.5 |
Income tax expense | (1.2) | (1) |
Net Income | 3.8 | 12.5 |
Income from SSAT | 4 | 8.5 |
Operating segments | ||
Segment results | ||
Total Operating Revenue | 513.9 | 532.4 |
Total Operating Income | 13 | 17.5 |
Intersegment Eliminations | ||
Segment results | ||
Total Operating Revenue | 19.4 | 21.8 |
Ocean Transportation | ||
Segment results | ||
Total Operating Revenue | 400.9 | 397.9 |
Income from SSAT | 4 | 8.5 |
Ocean Transportation | Operating segments | ||
Segment results | ||
Total Operating Revenue | 400.9 | 397.9 |
Total Operating Income | 7.9 | 9.4 |
Ocean Transportation | Intersegment Eliminations | ||
Segment results | ||
Total Operating Revenue | 9.4 | 11.4 |
Logistics | ||
Segment results | ||
Total Operating Revenue | 113 | 134.5 |
Logistics | Operating segments | ||
Segment results | ||
Total Operating Revenue | 113 | 134.5 |
Total Operating Income | 5.1 | 8.1 |
Logistics | Intersegment Eliminations | ||
Segment results | ||
Total Operating Revenue | $ 10 | $ 10.4 |
PROPERTY AND EQUIPMENT (Details
PROPERTY AND EQUIPMENT (Details) - USD ($) $ in Millions | 3 Months Ended | 12 Months Ended |
Mar. 31, 2020 | Dec. 31, 2019 | |
Property and equipment | ||
Cost | $ 2,843 | $ 2,836.7 |
Less: Accumulated Depreciation | (1,253.4) | (1,238.6) |
Property and equipment, net | 1,589.6 | 1,598.1 |
Vessels | ||
Property and equipment | ||
Cost | 1,966.1 | 1,653.5 |
Capitalized Interest | ||
Interest Costs Capitalized | 16.5 | |
Transfer amount to Property and Equipment | 308.2 | |
Containers and equipment | ||
Property and equipment | ||
Cost | 528.8 | 544.5 |
Terminal facilities and other property | ||
Property and equipment | ||
Cost | 114.6 | 114.4 |
Vessel construction in progress | ||
Property and equipment | ||
Cost | 185.4 | 488.9 |
Capitalized Interest | ||
Interest Costs Capitalized | 7.4 | 22 |
Other construction in progress | ||
Property and equipment | ||
Cost | $ 48.1 | $ 35.4 |
GOODWILL AND INTANGIBLES ASSE_3
GOODWILL AND INTANGIBLES ASSETS - CHANGES IN GOODWILL (Details) - USD ($) $ in Millions | Mar. 31, 2020 | Dec. 31, 2019 |
Goodwill [Line Items] | ||
Goodwill | $ 327.8 | $ 327.8 |
Ocean Transportation | ||
Goodwill [Line Items] | ||
Goodwill | 222.6 | |
Logistics | ||
Goodwill [Line Items] | ||
Goodwill | $ 105.2 |
GOODWILL AND INTANGIBLES - INTA
GOODWILL AND INTANGIBLES - INTANGIBLE ASSETS NET (Details) - USD ($) $ in Millions | Mar. 31, 2020 | Dec. 31, 2019 |
Finite-lived Intangible Assets | ||
Net Amount | $ 200.2 | $ 202.9 |
Trade Names | ||
Finite-lived Intangible Assets | ||
Indefinite-Lived intangible asset | 27.3 | 27.3 |
Customer Relationships. | ||
Finite-lived Intangible Assets | ||
Total | 230.7 | 230.7 |
Less: Accumulated Amortization | (57.8) | (55.1) |
Net Amount | 172.9 | 175.6 |
Ocean Transportation | Customer Relationships. | ||
Finite-lived Intangible Assets | ||
Total | 140.6 | 140.6 |
Logistics | Customer Relationships. | ||
Finite-lived Intangible Assets | ||
Total | $ 90.1 | $ 90.1 |
DEBT - SUMMARY (Details)
DEBT - SUMMARY (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2020 | Dec. 31, 2019 | |
Debt | ||
Total Debt | $ 924.9 | $ 958.4 |
Less current portion | (53.4) | (48.4) |
Total Long-term Debt | 871.5 | 910 |
5.79%, payable through 2020 | ||
Debt | ||
Total Debt | $ 3.5 | $ 3.5 |
Interest rate (as a percent) | 5.79% | 5.79% |
3.66%, payable through 2023 | ||
Debt | ||
Total Debt | $ 31.9 | $ 31.9 |
Interest rate (as a percent) | 3.66% | 3.66% |
4.16%, payable through 2027 | ||
Debt | ||
Total Debt | $ 39.3 | $ 39.3 |
Interest rate (as a percent) | 4.16% | 4.16% |
3.37 %, payable through 2027 | ||
Debt | ||
Total Debt | $ 75 | $ 75 |
Interest rate (as a percent) | 3.37% | 3.37% |
3.14%, payable through 2031 | ||
Debt | ||
Total Debt | $ 178.8 | $ 188 |
Interest rate (as a percent) | 3.14% | 3.14% |
4.31%, payable through 2032 | ||
Debt | ||
Total Debt | $ 30.3 | $ 30.3 |
Interest rate (as a percent) | 4.31% | 4.31% |
4.35%, payable through 2044 | ||
Debt | ||
Total Debt | $ 100 | $ 100 |
Interest rate (as a percent) | 4.35% | 4.35% |
3.92%, payable through 2045 | ||
Debt | ||
Total Debt | $ 69.5 | $ 69.5 |
Interest rate (as a percent) | 3.92% | 3.92% |
5.34%, payable through 2028 | ||
Debt | ||
Total Debt | $ 18.7 | $ 19.8 |
Interest rate (as a percent) | 5.34% | 5.34% |
5.27%, payable through 2029 | ||
Debt | ||
Total Debt | $ 20.9 | $ 22 |
Interest rate (as a percent) | 5.27% | 5.27% |
Revolving Credit Facility | ||
Debt | ||
Total Debt | $ 357 | $ 379.1 |
Funds available under the revolving credit facility | $ 163.6 | |
Interest rate during period (as a percent) | 3.50% |
DEBT - DESCRIPTION (Details)
DEBT - DESCRIPTION (Details) $ in Thousands | Apr. 27, 2020USD ($) | Dec. 31, 2016USD ($) | Sep. 30, 2016USD ($) | Jul. 31, 2015USD ($) | Jan. 31, 2014USD ($) | Aug. 31, 2004USD ($) | Sep. 30, 2003USD ($) | Mar. 31, 2020USD ($) | Jun. 30, 2012USD ($)item | Dec. 31, 2019 |
Debt | ||||||||||
Payment of debt financing costs | $ 3,100 | |||||||||
Revolving Credit Facility | ||||||||||
Debt | ||||||||||
Interest rate during period (as a percent) | 3.50% | |||||||||
Maximum borrowing capacity under revolving credit facility | $ 650,000 | |||||||||
Uncommitted option to increase credit facility | 250,000 | |||||||||
Unused portion of credit facility | 163,600 | |||||||||
Payment of debt financing costs | $ 2,000 | |||||||||
Revolving Credit Facility | Minimum | ||||||||||
Debt | ||||||||||
Ratio of consolidated EBITDA to interest expense | 3.50 | |||||||||
Credit facility commitment fee percentage | 0.25% | |||||||||
Revolving Credit Facility | Minimum | London Interbank Offered Rate (LIBOR) | ||||||||||
Debt | ||||||||||
Variable rate margin | 1.75% | |||||||||
Revolving Credit Facility | Minimum | Base rate | ||||||||||
Debt | ||||||||||
Variable rate margin | 0.75% | |||||||||
Revolving Credit Facility | Maximum | ||||||||||
Debt | ||||||||||
Credit facility commitment fee percentage | 0.55% | |||||||||
Revolving Credit Facility | Maximum | London Interbank Offered Rate (LIBOR) | ||||||||||
Debt | ||||||||||
Variable rate margin | 3.50% | |||||||||
Revolving Credit Facility | Maximum | Base rate | ||||||||||
Debt | ||||||||||
Variable rate margin | 2.50% | |||||||||
Standby and commercial letters of credit | ||||||||||
Debt | ||||||||||
Maximum borrowing capacity under revolving credit facility | $ 100,000 | |||||||||
Unused portion of credit facility | $ 7,700 | |||||||||
Standby and commercial letters of credit | Minimum | ||||||||||
Debt | ||||||||||
Line of credit fees percentage | 1.75% | |||||||||
Standby and commercial letters of credit | Maximum | ||||||||||
Debt | ||||||||||
Line of credit fees percentage | 3.50% | |||||||||
Swing Line Loans | ||||||||||
Debt | ||||||||||
Maximum borrowing capacity under revolving credit facility | $ 50,000 | |||||||||
5.34%, payable through 2028 | ||||||||||
Debt | ||||||||||
Interest rate (as a percent) | 5.34% | 5.34% | ||||||||
5.34%, payable through 2028 | MatNav | ||||||||||
Debt | ||||||||||
Debt issued | $ 55,000 | |||||||||
Interest rate (as a percent) | 5.34% | |||||||||
Semi-annual payments | $ 1,100 | |||||||||
5.79%, payable through 2020 | ||||||||||
Debt | ||||||||||
Interest rate (as a percent) | 5.79% | 5.79% | ||||||||
Annual principal payments | $ 3,500 | |||||||||
5.27%, payable through 2029 | ||||||||||
Debt | ||||||||||
Interest rate (as a percent) | 5.27% | 5.27% | ||||||||
5.27%, payable through 2029 | MatNav | ||||||||||
Debt | ||||||||||
Debt issued | $ 55,000 | |||||||||
Interest rate (as a percent) | 5.27% | |||||||||
Semi-annual payments | $ 1,100 | |||||||||
Senior Unsecured Long Term Debt | ||||||||||
Debt | ||||||||||
Debt issued | $ 100,000 | |||||||||
Debt instrument term | 30 years | |||||||||
Interest rate (as a percent) | 4.35% | |||||||||
Senior Unsecured Long Term Debt | Debt Instrument Redemption 2021 | ||||||||||
Debt | ||||||||||
Annual principal payments | $ 5,000 | |||||||||
Senior Unsecured Long Term Debt | Debt Instrument Redemption 2022 and 2023 | ||||||||||
Debt | ||||||||||
Annual principal payments | 7,500 | |||||||||
Senior Unsecured Long Term Debt | Debt Instrument Redemption 2024 to 2027 | ||||||||||
Debt | ||||||||||
Annual principal payments | 10,000 | |||||||||
Senior Unsecured Long Term Debt | Debt Instrument Redemption 2028 | ||||||||||
Debt | ||||||||||
Annual principal payments | 8,000 | |||||||||
Senior Unsecured Long Term Debt | Debt Instrument Redemption 2029 and thereafter until 2044 | ||||||||||
Debt | ||||||||||
Annual principal payments | $ 2,000 | |||||||||
4.35%, payable through 2044 | ||||||||||
Debt | ||||||||||
Interest rate (as a percent) | 4.35% | 4.35% | ||||||||
Unsecured debt | ||||||||||
Debt | ||||||||||
Debt issued | $ 170,000 | |||||||||
Number of tranches | item | 3 | |||||||||
Unsecured debt | Debt Instrument Redemption 2015 through 2016 | ||||||||||
Debt | ||||||||||
Semi-annual payments | $ 4,600 | |||||||||
Unsecured debt | Debt Instrument Redemption 2017 through mid-year 2023 | ||||||||||
Debt | ||||||||||
Semi-annual payments | 8,400 | |||||||||
Unsecured debt | Debt Instrument Redemption Mid-year 2023 through mid-year 2027 | ||||||||||
Debt | ||||||||||
Semi-annual payments | 3,800 | |||||||||
Unsecured debt | Debt Instrument Redemption After mid-year 2027 | ||||||||||
Debt | ||||||||||
Semi-annual payments | 1,200 | |||||||||
Unsecured debt, tranche maturing in 2023 | ||||||||||
Debt | ||||||||||
Debt issued | $ 77,500 | |||||||||
Interest rate (as a percent) | 3.66% | |||||||||
Unsecured debt, tranche maturing in 2027 | ||||||||||
Debt | ||||||||||
Debt issued | $ 55,000 | |||||||||
Interest rate (as a percent) | 4.16% | |||||||||
Unsecured debt, tranche maturing in 2032 | ||||||||||
Debt | ||||||||||
Debt issued | $ 37,500 | |||||||||
Interest rate (as a percent) | 4.31% | |||||||||
Notes 30 years | ||||||||||
Debt | ||||||||||
Debt issued | $ 75,000 | |||||||||
Debt instrument term | 30 years | |||||||||
Interest rate (as a percent) | 3.92% | |||||||||
Notes 30 years | Debt Instrument Redemption After 2026 | ||||||||||
Debt | ||||||||||
Annual principal payments | $ 1,500 | |||||||||
Notes 30 years | Debt Instrument Redemption 2017 through 2019 | ||||||||||
Debt | ||||||||||
Annual principal payments | 1,800 | |||||||||
Notes 30 years | Minimum | Debt Instrument Redemption 2020 through 2026 | ||||||||||
Debt | ||||||||||
Annual principal payments | 1,300 | |||||||||
Notes 30 years | Maximum | Debt Instrument Redemption 2020 through 2026 | ||||||||||
Debt | ||||||||||
Annual principal payments | $ 8,000 | |||||||||
Senior Unsecured Series A Notes | ||||||||||
Debt | ||||||||||
Debt issued | $ 75,000 | |||||||||
Debt instrument term | 11 years | |||||||||
Interest rate (as a percent) | 3.37% | |||||||||
Senior Unsecured Series A Notes | Debt Instrument Redemption 2021 | ||||||||||
Debt | ||||||||||
Semi-annual payments | $ 5,800 | |||||||||
Senior Unsecured Series A Notes | Debt Instrument Redemption 2022 through 2027 | ||||||||||
Debt | ||||||||||
Semi-annual payments | $ 11,500 | |||||||||
Title XI Notes | MatNav | ||||||||||
Debt | ||||||||||
Debt issued | $ 185,900 | |||||||||
Interest rate (as a percent) | 1.22% | |||||||||
Annual principal payments | $ 4,000 | |||||||||
Payment of debt financing costs | 8,700 | |||||||||
Proceeds from issuance of debt | $ 177,000 | |||||||||
The Senior Unsecured Notes (The "Series D Notes") | ||||||||||
Debt | ||||||||||
Debt issued | $ 200,000 | |||||||||
Debt instrument term | 15 years | |||||||||
Interest rate (as a percent) | 3.14% | |||||||||
Maturities of Long-term Debt | ||||||||||
Semi-annual principal payments in year 2019 | $ 6,000 | |||||||||
Semi-annual principal payments in 2020 to 2023 | 9,200 | |||||||||
Semi-annual principal payments in 2024 to 2031 | $ 7,150 |
DEBT - REVOLVING CREDIT FACILIT
DEBT - REVOLVING CREDIT FACILITY (Details) | Apr. 27, 2020USD ($) | Sep. 30, 2016USD ($) | Mar. 31, 2020USD ($)item |
Debt | |||
Payment of debt financing costs | $ 3,100,000 | ||
Revolving Credit Facility | |||
Debt | |||
Maximum borrowing capacity under revolving credit facility | 650,000,000 | ||
Uncommitted option to increase credit facility | 250,000,000 | ||
Funds available under the revolving credit facility | $ 163,600,000 | ||
Interest rate during period (as a percent) | 3.50% | ||
Payment of debt financing costs | $ 2,000,000 | ||
Covenant threshold for debt incurred | $ 331,000,000 | ||
Revolving Credit Facility | Minimum | |||
Debt | |||
Credit facility commitment fee percentage | 0.25% | ||
Ratio of consolidated EBITDA to interest expense | 3.50 | ||
Revolving Credit Facility | Maximum | |||
Debt | |||
Credit facility commitment fee percentage | 0.55% | ||
Covenant threshold for debt incurred by foreign subsidiaries | $ 20,000,000 | ||
Standby and commercial letters of credit | |||
Debt | |||
Maximum borrowing capacity under revolving credit facility | 100,000,000 | ||
Funds available under the revolving credit facility | $ 7,700,000 | ||
Standby and commercial letters of credit | Minimum | |||
Debt | |||
Line of credit fees percentage | 1.75% | ||
Standby and commercial letters of credit | Maximum | |||
Debt | |||
Line of credit fees percentage | 3.50% | ||
Swing Line Loans | |||
Debt | |||
Maximum borrowing capacity under revolving credit facility | $ 50,000,000 | ||
The Senior Unsecured Notes (The "Series D Notes") | |||
Debt | |||
Debt issued | $ 200,000,000 | ||
Interest rate (as a percent) | 3.14% | ||
Debt instrument term | 15 years | ||
Maturities of Long-term Debt | |||
Semi-annual principal payments in year 2019 | $ 6,000,000 | ||
Semi-annual principal payments in 2020 to 2023 | 9,200,000 | ||
Semi-annual principal payments in 2024 to 2031 | $ 7,150,000 | ||
Private Debt Agreements | |||
Debt | |||
Number of consecutive quarters | item | 2 | ||
Additional interest rate based on the entity's consolidated leverage ratio | 0.25% | ||
Payment of debt financing costs | $ 800,000 | ||
Private Debt Agreements | Maximum | |||
Debt | |||
Debt covenant, ratio of debt to consolidated EBITDA | 3 | ||
London Interbank Offered Rate (LIBOR) | Revolving Credit Facility | Minimum | |||
Debt | |||
Variable rate margin | 1.75% | ||
London Interbank Offered Rate (LIBOR) | Revolving Credit Facility | Maximum | |||
Debt | |||
Variable rate margin | 3.50% | ||
Base rate | Revolving Credit Facility | Minimum | |||
Debt | |||
Variable rate margin | 0.75% | ||
Base rate | Revolving Credit Facility | Maximum | |||
Debt | |||
Variable rate margin | 2.50% | ||
MatNav | Title XI Notes | |||
Debt | |||
Minimum working capital covenant | $ 1 | ||
Debt instrument covenant ratio, maintenance of net worth | 90.00% | ||
Payment of debt financing costs | $ 8,700,000 | ||
Debt issued | $ 185,900,000 | ||
Interest rate (as a percent) | 1.22% | ||
Annual principal payments | $ 4,000,000 | ||
MatNav | Minimum | Title XI Notes | |||
Debt | |||
Debt instrument covenant, long-term debt to net worth | 200.00% |
DEBT - MATURITIES (Details)
DEBT - MATURITIES (Details) - USD ($) $ in Millions | Mar. 31, 2020 | Dec. 31, 2019 |
Debt maturities | ||
2020 | $ 37 | |
2021 | 54.2 | |
2022 | 416.9 | |
2023 | 59.9 | |
2024 | 55.8 | |
Thereafter | 301.1 | |
Total Debt | $ 924.9 | $ 958.4 |
LEASES - LEASE TERM (Details)
LEASES - LEASE TERM (Details) | Mar. 31, 2020 |
Real estate and terminal leases | |
Lessee, Lease, Description [Line Items] | |
Base term | 65 years |
Vessel charter leases | |
Lessee, Lease, Description [Line Items] | |
Base term | 10 years |
Operations equipment and other leases | |
Lessee, Lease, Description [Line Items] | |
Base term | 8 years |
LEASE - COMPONENTS OF LEASE COS
LEASE - COMPONENTS OF LEASE COST (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Lease Cost | ||
Operating lease cost | $ 20 | $ 16.7 |
Short-term lease cost | 0.1 | 2.4 |
Variable lease cost | 0.2 | 0.1 |
Total lease cost | $ 20.3 | $ 19.2 |
LEASE - SALE AND LEASEBACK OF E
LEASE - SALE AND LEASEBACK OF EQUIPMENT (Details) $ in Millions | Mar. 25, 2020USD ($) | Mar. 31, 2019item |
Sale Leaseback Transaction [Line Items] | ||
Number of sale leaseback transactions | item | 0 | |
Multiple Tranches of Chassis and Container Equipment | ||
Sale Leaseback Transaction [Line Items] | ||
Net proceeds | $ | $ 14.3 | |
Base term | 5 years |
LEASE - OTHER INFORMATION (Deta
LEASE - OTHER INFORMATION (Details) - USD ($) $ in Millions | 3 Months Ended | ||
Mar. 31, 2020 | Mar. 31, 2019 | Dec. 31, 2019 | |
Lease Cost | |||
Cash paid for amounts included in operating lease liabilities | $ 20.5 | $ 16.7 | |
Right of use assets obtained in the exchange for new operating lease liabilities | $ 16.1 | $ 5.8 | |
Weighted-average remaining operating lease term | 7 years 4 months 24 days | 7 years 6 months | |
Weighted-average incremental borrowing rate | 4.10% | 4.20% |
LEASE - MATURITIES OF OPERATING
LEASE - MATURITIES OF OPERATING LEASE LIABILITIES (Details) - USD ($) $ in Millions | Mar. 31, 2020 | Dec. 31, 2019 |
Maturities of operating lease liabilities | ||
2020 | $ 58.7 | |
2021 | 58.4 | |
2022 | 46.7 | |
2023 | 41.2 | |
2024 | 26.2 | |
Thereafter | 79.8 | |
Total lease payments | 311 | |
Less: Interest | (48.3) | |
Present value of operating lease liabilities | 262.7 | |
Less: Short-term portion | (65.5) | $ (66.6) |
Long-term operating lease liabilities | $ 197.2 | $ 198 |
LEASES - RESIDUAL VALUE GUARANT
LEASES - RESIDUAL VALUE GUARANTEE (Details) - USD ($) $ in Millions | Nov. 26, 2018 | Mar. 31, 2020 | Mar. 31, 2019 |
Lessee, Lease, Description [Line Items] | |||
Cash paid for amounts included in operating lease liabilities | $ 20.5 | $ 16.7 | |
Bareboat Charter Agreement | |||
Lessee, Lease, Description [Line Items] | |||
Cash paid for amounts included in operating lease liabilities | $ 3 | ||
Base term | 5 years | ||
Lessee, Operating Lease, Term of Contract | 5 years | ||
Renewal term | 2 years | ||
Renewal option | true | ||
Residual value guarantee option | true | ||
Maximum residual value guarantee amount after 5 years | $ 50.9 | ||
Maximum residual value guarantee amount after extended term | $ 47.7 |
ACCUMULATED OTHER COMPREHENSI_3
ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS) (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Changes in accumulated other comprehensive loss by component, net of taxes | ||
Balance at the beginning of the period | $ 805.7 | $ 755.3 |
Amortization of prior service cost | (1.2) | (1.1) |
Amortization of net loss | 1.3 | 0.9 |
Other adjustments | (0.7) | |
Balance at the end of the period | 800.2 | 763 |
Pensions | ||
Changes in accumulated other comprehensive loss by component, net of taxes | ||
Balance at the beginning of the period | (51.9) | (55.8) |
Amortization of prior service cost | (0.5) | (0.4) |
Amortization of net loss | 1.1 | 0.7 |
Balance at the end of the period | (51.3) | (55.5) |
Post Retirement | ||
Changes in accumulated other comprehensive loss by component, net of taxes | ||
Balance at the beginning of the period | 16.3 | 21.7 |
Amortization of prior service cost | (0.6) | (0.7) |
Amortization of net loss | 0.1 | 0.2 |
Balance at the end of the period | 15.8 | 21.2 |
Non-Qualified Plans | ||
Changes in accumulated other comprehensive loss by component, net of taxes | ||
Balance at the beginning of the period | (0.4) | (0.1) |
Amortization of prior service cost | (0.1) | |
Amortization of net loss | 0.1 | |
Balance at the end of the period | (0.4) | (0.1) |
Other | ||
Changes in accumulated other comprehensive loss by component, net of taxes | ||
Balance at the beginning of the period | (0.9) | (0.3) |
Foreign currency exchange | (0.5) | |
Other adjustments | (0.2) | |
Balance at the end of the period | (1.6) | (0.3) |
Accumulated Other Comprehensive Income (Loss) | ||
Changes in accumulated other comprehensive loss by component, net of taxes | ||
Balance at the beginning of the period | (36.9) | (34.5) |
Amortization of prior service cost | (1.2) | (1.1) |
Amortization of net loss | 1.3 | 0.9 |
Foreign currency exchange | (0.5) | |
Other adjustments | (0.2) | |
Balance at the end of the period | $ (37.5) | $ (34.7) |
FAIR VALUE OF FINANCIAL INSTR_3
FAIR VALUE OF FINANCIAL INSTRUMENTS (Details) - USD ($) $ in Millions | Mar. 31, 2020 | Dec. 31, 2019 | Mar. 31, 2019 |
Fair value of financial instruments | |||
Restricted Cash | $ 5.8 | $ 8.9 | |
Carrying value | |||
Fair value of financial instruments | |||
Cash and cash equivalents | 19.9 | $ 21.2 | |
Restricted Cash | 5.8 | 7.2 | |
Variable rate debt | 357 | 379.1 | |
Fixed rate debt | 567.9 | 579.3 | |
Fair Value Measurement | |||
Fair value of financial instruments | |||
Cash and cash equivalents | 19.9 | 21.2 | |
Restricted Cash | 5.8 | 7.2 | |
Variable rate debt | 357 | 379.1 | |
Fixed rate debt | 558.7 | 585.9 | |
Fair Value Measurement | Quoted Prices in Active Markets (Level 1) | |||
Fair value of financial instruments | |||
Cash and cash equivalents | 19.9 | 21.2 | |
Restricted Cash | 5.8 | 7.2 | |
Fair Value Measurement | Significant Observable Inputs (Level 2) | |||
Fair value of financial instruments | |||
Variable rate debt | 357 | 379.1 | |
Fixed rate debt | $ 558.7 | $ 585.9 |
EARNINGS PER-SHARE (Details)
EARNINGS PER-SHARE (Details) - USD ($) $ / shares in Units, shares in Millions, $ in Millions | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Net Income | ||
Net Income, Basic | $ 3.8 | $ 12.5 |
Net Income, Diluted | $ 3.8 | $ 12.5 |
Weighted Average Common Shares | ||
Basic (in shares) | 43 | 42.8 |
Effect of Dilutive Securities (in shares) | 0.3 | 0.3 |
Diluted (in shares) | 43.3 | 43.1 |
Per Common Share Amount | ||
Net income, Basic (in dollars per share) | $ 0.09 | $ 0.29 |
Net income, Diluted (in dollars per share) | $ 0.09 | $ 0.29 |
SHARE-BASED COMPENSATION (Detai
SHARE-BASED COMPENSATION (Details) - Time-based and performance-based shares - USD ($) $ / shares in Units, $ in Millions | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Share-based compensation | ||
Shares granted | 316,200 | |
Weighted-average grant date fair value (in dollars per share) | $ 39.43 | |
Total unrecognized compensation cost | $ 20.1 | |
Unrecognized compensation cost over weighted-average period to be recognized | 2 years 2 months 12 days | |
Selling, general and administrative expenses | ||
Share-based compensation | ||
Total stock-based compensation cost | $ 3.1 | $ 3.2 |
PENSION AND POST-RETIREMENT P_3
PENSION AND POST-RETIREMENT PLANS - COMPONENTS OF NET PERIODIC BENEFIT COST (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Pension Benefits | ||
Components of Net Periodic Benefit Cost (Benefit): | ||
Service cost | $ 1.2 | $ 1.1 |
Interest cost | 1.9 | 2.3 |
Expected return on plan assets | (3.2) | (3.1) |
Amortization of net loss | 1.5 | 0.9 |
Amortization of prior service credit | (0.6) | (0.6) |
Net periodic benefit cost (benefit) | 0.8 | 0.6 |
Post-retirement Benefits | ||
Components of Net Periodic Benefit Cost (Benefit): | ||
Service cost | 0.1 | 0.1 |
Interest cost | 0.2 | 0.3 |
Amortization of net loss | 0.2 | 0.2 |
Amortization of prior service credit | (0.9) | (0.9) |
Net periodic benefit cost (benefit) | $ (0.4) | $ (0.3) |