Matson(MATX) - 2025 Q2 - Quarterly Report

PART I. FINANCIAL INFORMATION ITEM 1. FINANCIAL STATEMENTS (UNAUDITED) This section presents the unaudited condensed consolidated financial statements, including statements of income, balance sheets, cash flows, and shareholders' equity, along with detailed notes explaining the company's business, accounting policies, segment performance, investments, and other financial disclosures for the periods ended June 30, 2025 and 2024 Condensed Consolidated Statements of Income and Comprehensive Income This statement details the company's revenues, operating income, net income, and earnings per share for the three and six months ended June 30, 2025 and 2024 Consolidated Income and Comprehensive Income (Unaudited) | Metric (in millions, except per share) | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :--------------------------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Total Operating Revenue | $830.5 | $847.4 | $1,612.5 | $1,569.5 | | Operating Income | $113.0 | $124.6 | $195.1 | $161.5 | | Net Income | $94.7 | $113.2 | $167.0 | $149.3 | | Basic Earnings Per Share | $2.95 | $3.34 | $5.14 | $4.38 | | Diluted Earnings Per Share | $2.92 | $3.31 | $5.09 | $4.33 | - For the three months ended June 30, 2025, total operating revenue decreased by 2.0% year-over-year, and net income decreased by 16.3%[9][95] - For the six months ended June 30, 2025, total operating revenue increased by 2.7% year-over-year, and net income increased by 11.9%[9][99] Condensed Consolidated Balance Sheets This statement provides a snapshot of the company's assets, liabilities, and shareholders' equity as of June 30, 2025, and December 31, 2024 Consolidated Balance Sheet (Unaudited) | Metric (in millions) | June 30, 2025 | December 31, 2024 | | :----------------------------- | :------------ | :---------------- | | Total Current Assets | $424.5 | $609.6 | | Total Long-term Assets | $4,057.6 | $3,985.8 | | Total Assets | $4,482.1 | $4,595.4 | | Total Current Liabilities | $546.9 | $560.4 | | Total Long-term Liabilities | $1,317.2 | $1,383.0 | | Total Liabilities | $1,864.1 | $1,943.4 | | Total Shareholders' Equity | $2,618.0 | $2,652.0 | - Cash and cash equivalents significantly decreased from $266.8 million at December 31, 2024, to $59.1 million at June 30, 2025[11] - Property and equipment, net, increased from $2,260.9 million to $2,359.7 million, driven by new vessel construction in progress[11][48] Condensed Consolidated Statements of Cash Flows This statement outlines the cash flows from operating, investing, and financing activities for the six months ended June 30, 2025 and 2024 Consolidated Cash Flows (Unaudited) - Six Months Ended June 30 | Activity (in millions) | 2025 | 2024 |\n| :------------------------------------- | :------- | :------- | | Net cash provided by operating activities | $194.6 | $344.5 | | Net cash used in investing activities | $(183.4) | $(131.1) | | Net cash used in financing activities | $(218.9) | $(179.1) | | Net (Decrease) Increase in Cash | $(207.7) | $34.3 | | Cash and Cash Equivalents, End of Period | $59.1 | $170.6 | - Net cash provided by operating activities decreased by $149.9 million year-over-year, primarily due to a federal income tax refund received in 2024 and changes in SSAT distributions[13][123] - Net cash used in investing activities increased by $52.3 million, mainly due to higher vessel construction expenditures ($104.1 million in 2025 vs. $38.2 million in 2024) and increased deposits into the Capital Construction Fund[13][124] - Net cash used in financing activities increased by $39.8 million, driven by higher share repurchases ($160.4 million in 2025 vs. $120.1 million in 2024)[13][125] Condensed Consolidated Statements of Shareholders' Equity This statement details changes in shareholders' equity, including net income, share repurchases, and dividends, for the six months ended June 30, 2025 and 2024 Shareholders' Equity Changes (Unaudited) - Six Months Ended June 30 | Metric (in millions, except shares) | June 30, 2025 | December 31, 2024 | | :-------------------------------- | :------------ | :---------------- | | Shares Outstanding | 31.8 | 33.0 | | Total Shareholders' Equity | $2,618.0 | $2,652.0 | Key Changes (Six Months Ended June 30, 2025) | Item | Amount (in millions) | | :------------------------ | :------------------- | | Net income | $167.0 | | Shares repurchased | $(160.4) | | Dividends paid | $(22.3) | - The company repurchased approximately 1.4 million shares for $162.9 million during the six months ended June 30, 2025, compared to 1.0 million shares for $121.1 million in the prior year period[29][134] - Dividends paid increased slightly to $22.3 million for the six months ended June 30, 2025, from $22.1 million in the prior year, due to an increase in dividends declared per share, offset by a reduction in common stock outstanding[14][125] Notes to the Condensed Consolidated Financial Statements This section provides detailed explanations of the company's business, accounting policies, segment performance, investments, debt, and other financial disclosures 1. Description of the Business Matson, Inc. operates as a leading provider of ocean transportation and logistics services through two primary segments: Ocean Transportation and Logistics. The Ocean Transportation segment offers ocean freight services to domestic non-contiguous economies and international routes, including a 35% ownership interest in SSA Terminals, LLC (SSAT). The Logistics segment provides asset-light logistics services across North America and Asia, encompassing transportation brokerage, freight forwarding, warehousing, and supply chain management - Matson operates two segments: Ocean Transportation (ocean freight, stevedoring, terminal services) and Logistics (multimodal transportation brokerage, freight forwarding, warehousing, supply chain management)[15][16][18] - The company holds a 35% ownership interest in SSA Terminals, LLC (SSAT), which provides terminal and stevedoring services on the U.S. West Coast[17] 2. General and Significant Accounting Policies This note outlines the basis of presentation for the unaudited condensed consolidated financial statements, emphasizing the use of estimates and the company's revenue recognition policies for its Ocean Transportation and Logistics segments. It also details policies on capitalized interest, dividends, share repurchases, and discusses the impact of new tax legislation (One Big Beautiful Bill Act) and upcoming accounting pronouncements (ASU 2024-03 and ASU 2023-09) - Revenue for Ocean Transportation services is recognized ratably over the voyage duration, while Logistics services revenue is recognized over delivery duration or as services are performed[24][30] Capitalized Interest for New Vessel Construction | Period | 2025 (in millions) | 2024 (in millions) | | :----------------------------------- | :----------------- | :----------------- | | Three Months Ended June 30 | $1.0 | $1.0 | | Six Months Ended June 30 | $2.1 | $1.8 | - The company repurchased 0.9 million shares for $93.7 million in Q2 2025 and 1.4 million shares for $162.9 million in H1 2025[29] - New legislation, the One Big Beautiful Bill Act, signed July 4, 2025, includes 100% bonus depreciation for qualified capital expenditures and amendments to FDII, but is not expected to materially impact consolidated financial statements[31][32] 3. Reportable Segments Matson reports financial information for its two segments, Ocean Transportation and Logistics, with performance assessed by operating income. The Ocean Transportation segment saw a decrease in revenue and operating income in Q2 2025 but an increase over six months, while the Logistics segment experienced slight declines in both revenue and operating income for both periods Segment Operating Revenue and Income (Unaudited) - Three Months Ended June 30 | Metric (in millions) | Ocean Transportation 2025 | Ocean Transportation 2024 | Logistics 2025 | Logistics 2024 | | :------------------- | :------------------------ | :------------------------ | :------------- | :------------- | | Operating Revenue | $675.6 | $689.9 | $154.9 | $157.5 | | Operating Income | $98.6 | $109.0 | $14.4 | $15.6 | Segment Operating Revenue and Income (Unaudited) - Six Months Ended June 30 | Metric (in millions) | Ocean Transportation 2025 | Ocean Transportation 2024 | Logistics 2025 | Logistics 2024 | | :------------------- | :------------------------ | :------------------------ | :------------- | :------------- | | Operating Revenue | $1,313.0 | $1,268.9 | $299.5 | $300.6 | | Operating Income | $172.2 | $136.6 | $22.9 | $24.9 | - Ocean Transportation operating income decreased by 9.5% in Q2 2025 but increased by 26.1% for the six months ended June 30, 2025, primarily due to higher freight rates in China and domestic tradelanes, and increased SSAT contribution[38][41][115] - Logistics operating income decreased by 7.7% in Q2 2025 and 8.0% for the six months ended June 30, 2025, mainly due to lower contributions from transportation brokerage and freight forwarding[38][41][119][121] 4. Investment in SSAT Matson's 35% equity investment in SSAT significantly increased its contribution to income for both the three and six months ended June 30, 2025, primarily due to higher lift volume. The investment value also increased from December 31, 2024 SSAT Net Income (Loss) (Unaudited) | Metric (in millions) | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :------------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | SSAT's Net Income (Loss) | $18.7 | $2.1 | $36.4 | $(1.7) | - Matson's share of income from SSAT was $7.3 million in Q2 2025 (up from $1.2 million in Q2 2024) and $13.9 million in H1 2025 (up from $1.6 million in H1 2024), driven by higher lift volume[9][109][116] - The company's investment in SSAT increased to $98.3 million at June 30, 2025, from $84.1 million at December 31, 2024[46] 5. Property and Equipment Property and equipment, net, increased to $2,359.7 million at June 30, 2025, from $2,260.9 million at December 31, 2024, primarily due to ongoing new vessel construction Property and Equipment (in millions) | Category | June 30, 2025 | December 31, 2024 | | :----------------------------- | :------------ | :---------------- | | Vessels | $2,487.0 | $2,475.2 | | New vessel construction in progress | $302.9 | $198.8 | | Total Property and Equipment, net | $2,359.7 | $2,260.9 | - New vessel construction in progress increased by $104.1 million, reflecting milestone payments and capitalized interest for three new Jones Act vessels[48] 6. Goodwill and Intangibles Goodwill remained stable at $327.8 million across the Ocean Transportation and Logistics segments. Intangible assets, primarily customer relationships and a Logistics trade name, decreased slightly due to amortization. The company concluded no impairment triggering event occurred during the period Goodwill by Segment (in millions) | Segment | Goodwill | | :------------------- | :------- | | Ocean Transportation | $222.6 | | Logistics | $105.2 | | Total | $327.8 | Intangible Assets, net (in millions) | Category | June 30, 2025 | December 31, 2024 | | :--------------------------- | :------------ | :---------------- | | Total Customer Relationships, net | $125.6 | $132.1 | | Trade name – Logistics | $27.3 | $27.3 | | Total Intangible Assets, net | $152.9 | $159.4 | - No impairment triggering event for goodwill or intangible assets was identified during the three and six months ended June 30, 2025[51] 7. Capital Construction Fund The Capital Construction Fund (CCF) balance increased to $656.7 million at June 30, 2025, from $642.6 million at December 31, 2024. The fund, comprising cash, cash equivalents, and U.S. Treasury investments, is designated to finance new Jones Act vessel construction Capital Construction Fund Balances (in millions) | Category | June 30, 2025 | December 31, 2024 | | :---------------------------------------- | :------------ | :---------------- | | CCF Cash and Cash Equivalents | $330.1 | $230.7 | | CCF Investments | $326.6 | $411.9 | | Total CCF cash and cash equivalents, and investments | $656.7 | $642.6 | - The company deposited $109.1 million into the CCF and made $100.7 million in qualifying withdrawals for vessel construction during the six months ended June 30, 2025[124] CCF Investments Maturities (as of June 30, 2025, in millions) | Year | Cost | Fair Value | | :-------------- | :----- | :--------- | | Remainder of 2025 | $103.7 | $103.7 | | 2026 | $170.5 | $171.0 | | 2027 | $52.4 | $52.7 | | Total | $326.6 | $327.4 | 8. Debt Total debt decreased by $19.9 million to $381.0 million at June 30, 2025, due to scheduled repayments. Post-quarter, the company amended its revolving credit facility, reducing commitments to $550 million and eliminating the minimum consolidated interest coverage ratio covenant, reflecting a nearly fully-funded vessel build program and lower future capital needs Debt Composition (in millions) | Category | June 30, 2025 | December 31, 2024 | | :------------------------------------- | :------------ | :---------------- | | Private Placement Term Loans | $121.8 | $134.7 | | Title XI Debt | $259.2 | $266.2 | | Total Debt (excluding deferred loan fees) | $381.0 | $400.9 | - On July 23, 2025, the company entered into a Third Amended and Restated Credit Agreement, reducing its revolving credit facility to $550 million (from $650 million) and eliminating the minimum consolidated interest coverage ratio financial covenant[59][130] Debt Maturities (as of June 30, 2025, in millions) | Year | Amount | | :-------------- | :----- | | Remainder of 2025 | $19.8 | | 2026 | $39.7 | | 2027 | $39.7 | | 2028 | $28.2 | | 2029 | $28.2 | | Thereafter | $225.4 | | Total Debt | $381.0 | 9. Leases Total lease costs, net of sublease income, decreased to $36.1 million for the three months ended June 30, 2025, and $72.4 million for the six months ended June 30, 2025, compared to the prior year periods. The present value of operating lease liabilities was $294.1 million at June 30, 2025 Components of Lease Cost, net (in millions) | Metric | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :----------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Total lease cost, net | $36.1 | $41.7 | $72.4 | $79.7 | Future Minimum Lease Payments (as of June 30, 2025, in millions) | Year | Amount | | :-------------- | :----- | | Remainder of 2025 | $59.5 | | 2026 | $99.2 | | 2027 | $72.3 | | 2028 | $22.0 | | 2029 | $10.3 | | Thereafter | $79.8 | | Total lease payments | $343.1 | | Present value of operating lease liabilities | $294.1 | 10. Accumulated Other Comprehensive Income (Loss) Accumulated other comprehensive loss improved to $(6.3) million at June 30, 2025, from $(6.5) million at December 31, 2024. This change was primarily influenced by foreign currency exchange adjustments and amortization of prior service credit and net actuarial loss related to pension and post-retirement benefits Changes in Accumulated Other Comprehensive Income (Loss) (in millions) - Six Months Ended June 30, 2025 | Component | Balance at Dec 31, 2024 | Net Change | Balance at June 30, 2025 | | :-------------------------------------- | :---------------------- | :--------- | :----------------------- | | Pension Benefits | $(14.0) | $0.0 | $(14.0) | | Post-retirement Benefits | $8.1 | $(1.7) | $6.4 | | Non-Qualified Plans | $(0.4) | $0.0 | $(0.4) | | Other (primarily foreign currency exchange) | $(0.2) | $1.9 | $1.7 | | Total Accumulated Other Comprehensive Income (Loss) | $(6.5) | $0.2 | $(6.3) | 11. Fair Value of Financial Instruments The company values its financial instruments using a fair value hierarchy. Cash and cash equivalents, and CCF cash and cash equivalents and investments, are valued using Level 1 inputs (quoted prices in active markets). Fixed rate debt is valued using Level 2 inputs (observable interest rates for similar debt) Fair Value of Financial Instruments (in millions) - June 30, 2025 | Instrument | Carrying Value | Fair Value | Level 1 | Level 2 | | :------------------------ | :------------- | :--------- | :------ | :------ | | Cash and cash equivalents | $59.1 | $59.1 | $59.1 | $— | | CCF - Cash and cash equivalent | $330.1 | $330.1 | $330.1 | $— | | CCF - Investments | $326.6 | $327.4 | $327.4 | $— | | Fixed rate debt | $381.0 | $308.4 | $— | $308.4 | Fair Value of Financial Instruments (in millions) - December 31, 2024 | Instrument | Carrying Value | Fair Value | Level 1 | Level 2 | | :------------------------ | :------------- | :--------- | :------ | :------ | | Cash and cash equivalents | $266.8 | $266.8 | $266.8 | $— | | CCF - Cash and cash equivalent | $230.7 | $230.7 | $230.7 | $— | | CCF - Investments | $411.9 | $412.5 | $412.5 | $— | | Fixed rate debt | $400.9 | $317.7 | $— | $317.7 | 12. Earnings Per Share Basic and diluted earnings per share calculations are provided, showing a decrease in EPS for the three months ended June 30, 2025, but an increase for the six months ended June 30, 2025, compared to the prior year periods Basic and Diluted Earnings Per Share (Unaudited) | Metric (in millions, except per share) | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :--------------------------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Basic Earnings Per Share | $2.95 | $3.34 | $5.14 | $4.38 | | Diluted Earnings Per Share | $2.92 | $3.31 | $5.09 | $4.33 | | Weighted Average Basic Shares | 32.1 | 33.9 | 32.5 | 34.1 | | Weighted Average Diluted Shares | 32.4 | 34.2 | 32.8 | 34.5 | 13. Share-Based Compensation The company recognized $5.9 million in share-based compensation cost for the three months ended June 30, 2025, and $11.7 million for the six months ended June 30, 2025. Unrecognized compensation cost totaled $32.7 million at June 30, 2025, expected to be recognized over approximately 1.8 years Share-Based Compensation Cost (in millions) | Period | 2025 | 2024 | | :------------------------------- | :---- | :---- | | Three Months Ended June 30 | $5.9 | $6.3 | | Six Months Ended June 30 | $11.7 | $12.0 | - Approximately 98,000 shares (Q2 2025) and 231,200 shares (H1 2025) were granted as time-based restricted stock units and performance-based shares[72] - Total unrecognized compensation cost was $32.7 million at June 30, 2025, with a weighted average recognition period of 1.8 years[73][74] 14. Pension and Post-Retirement Plans The company reported net periodic benefit credits for both pension and post-retirement plans for the three and six months ended June 30, 2025 and 2024, reflecting the impact of service cost, interest cost, expected return on plan assets, and amortization of actuarial gains/losses and prior service credits Net Periodic Benefit Cost (Credit) (in millions) - Three Months Ended June 30 | Component | Pension Benefits 2025 | Pension Benefits 2024 | Post-retirement Benefits 2025 | Post-retirement Benefits 2024 | | :------------------------- | :-------------------- | :-------------------- | :---------------------------- | :---------------------------- | | Net periodic benefit credit | $(0.7) | $(0.4) | $(0.8) | $(0.8) | Net Periodic Benefit Cost (Credit) (in millions) - Six Months Ended June 30 | Component | Pension Benefits 2025 | Pension Benefits 2024 | Post-retirement Benefits 2025 | Post-retirement Benefits 2024 | | :------------------------- | :-------------------- | :-------------------- | :---------------------------- | :---------------------------- | | Net periodic benefit credit | $(1.4) | $(0.8) | $(1.6) | $(1.5) | 15. Commitments and Contingencies The company believes it is in material compliance with environmental laws and regulations and does not expect other legal actions arising in the normal course of business to have a material effect on its financial condition, results of operations, or cash flows - The company is in material compliance with applicable environmental laws and regulations[76] - Other legal actions are not expected to have a material effect on the company's financial condition, results of operations, or cash flows[77] ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS This section provides management's perspective on the company's financial condition, results of operations, and liquidity, offering a detailed discussion of performance for the second quarter and first half of 2025, along with an outlook for the full year. It covers segment-specific trends, consolidated financial results, and capital management strategies Forward-Looking Statements This section highlights the inherent uncertainties and risks associated with forward-looking statements within the report - The report contains forward-looking statements, which are subject to risks and uncertainties that could cause actual results to differ materially from projections[79] - The company undertakes no obligation to revise or update forward-looking statements, except as required by law[79] Overview This section provides management's insights into the company's financial condition, operational results, and liquidity - Management's Discussion and Analysis (MD&A) provides insights into the company's financial condition, results of operations, liquidity, and factors affecting future results[80] Second Quarter 2025 Discussion and Outlook for 2025 The company's second quarter 2025 performance saw mixed results across its Ocean Transportation services, with Hawaii and Alaska volumes up, but China and Guam volumes down. The SSAT joint venture contributed significantly more. Logistics operating income decreased. For the full year 2025, the company anticipates moderately lower consolidated operating income compared to 2024, with specific guidance on depreciation, interest, and capital expenditures Ocean Transportation Volume Changes (Q2 2025 YoY) | Service | Volume Change | | :-------- | :------------ | | Hawaii | +2.6% | | Alaska | +0.9% | | China | -14.6% | | Guam | -2.2% | - SSAT joint venture contribution increased to $7.3 million in Q2 2025, up from $1.2 million in Q2 2024, primarily due to higher lift volume[86] - Logistics operating income decreased by $1.2 million in Q2 2025 compared to Q2 2024, mainly due to lower transportation brokerage contribution[88] - Full year 2025 consolidated operating income is expected to be moderately lower than 2024, with depreciation and amortization around $200 million, interest income around $31 million, and interest expense around $7 million[89][90][91][92] - Expected full year 2025 capital expenditures include $100-$120 million for other capital, $305 million for new vessel construction, and $40 million for dry-docking payments[94] Consolidated Results of Operations Consolidated results for Q2 2025 showed a decrease in operating revenue and net income year-over-year, primarily due to lower China volume and reduced interest income from a prior-year tax refund. For the first half of 2025, operating revenue and net income increased, driven by higher freight rates and SSAT contribution, despite lower interest income Consolidated Financial Performance (Unaudited) - Three Months Ended June 30 | Metric (in millions, except per share) | 2025 | 2024 | Change ($) | Change (%) | | :--------------------------------- | :------ | :------ | :--------- | :--------- | | Operating revenue | $830.5 | $847.4 | $(16.9) | (2.0)% | | Operating income | $113.0 | $124.6 | $(11.6) | (9.3)% | | Net income | $94.7 | $113.2 | $(18.5) | (16.3)% | | Basic earnings per share | $2.95 | $3.34 | $(0.39) | (11.7)% | Consolidated Financial Performance (Unaudited) - Six Months Ended June 30 | Metric (in millions, except per share) | 2025 | 2024 | Change ($) | Change (%) | | :--------------------------------- | :-------- | :-------- | :--------- | :--------- | | Operating revenue | $1,612.5 | $1,569.5 | $43.0 | 2.7% | | Operating income | $195.1 | $161.5 | $33.6 | 20.8% | | Net income | $167.0 | $149.3 | $17.7 | 11.9% | | Basic earnings per share | $5.14 | $4.38 | $0.76 | 17.4% | - Interest income decreased by $10.8 million in Q2 2025 and $10.2 million in H1 2025, primarily due to a $10.2 million federal income tax refund interest received in Q2 2024 and lower invested cash balances[96][101] - The effective tax rate for Q2 2025 was 22.2%, compared to 20.9% in Q2 2024, which benefited from discrete tax adjustments[98][103] Analysis of Operating Revenue and Income by Segment Ocean Transportation revenue decreased in Q2 2025 due to lower China volume but increased over six months due to higher freight rates. Operating income for this segment decreased in Q2 but significantly increased in H1, boosted by SSAT contributions. Logistics revenue and operating income saw slight declines in both periods, mainly from reduced transportation brokerage activity Ocean Transportation Operating Results (Unaudited) - Three Months Ended June 30 | Metric (in millions) | 2025 | 2024 | Change ($) | Change (%) | | :------------------- | :------ | :------ | :--------- | :--------- | | Revenue | $675.6 | $689.9 | $(14.3) | (2.1)% | | Operating income | $98.6 | $109.0 | $(10.4) | (9.5)% | | Hawaii containers (FEU) | 36,000 | 35,100 | 900 | 2.6% | | China containers (FEU) | 32,300 | 37,800 | (5,500) | (14.6)% | Ocean Transportation Operating Results (Unaudited) - Six Months Ended June 30 | Metric (in millions) | 2025 | 2024 | Change ($) | Change (%) | | :------------------- | :-------- | :-------- | :--------- | :--------- | | Revenue | $1,313.0 | $1,268.9 | $44.1 | 3.5% | | Operating income | $172.2 | $136.6 | $35.6 | 26.1% | | Hawaii containers (FEU) | 71,700 | 69,700 | 2,000 | 2.9% | | China containers (FEU) | 60,800 | 66,700 | (5,900) | (8.8)% | Logistics Operating Results (Unaudited) - Three Months Ended June 30 | Metric (in millions) | 2025 | 2024 | Change ($) | Change (%) | | :------------------- | :----- | :----- | :--------- | :--------- | | Revenue | $154.9 | $157.5 | $(2.6) | (1.7)% | | Operating income | $14.4 | $15.6 | $(1.2) | (7.7)% | Logistics Operating Results (Unaudited) - Six Months Ended June 30 | Metric (in millions) | 2025 | 2024 | Change ($) | Change (%) | | :------------------- | :----- | :----- | :--------- | :--------- | | Revenue | $299.5 | $300.6 | $(1.1) | (0.4)% | | Operating income | $22.9 | $24.9 | $(2.0) | (8.0)% | Liquidity and Capital Resources The company's liquidity decreased significantly, with cash and cash equivalents falling to $59.1 million at June 30, 2025. This was driven by lower operating cash flows, increased investing activities (vessel construction, CCF deposits), and higher share repurchases. Working capital shifted to a deficit. Debt decreased due to scheduled repayments, and the revolving credit facility was reduced to align with future capital needs Key Liquidity Metrics (in millions) | Metric | June 30, 2025 | December 31, 2024 | Change ($) | | :-------------------------------------- | :------------ | :---------------- | :--------- | | Cash and cash equivalents | $59.1 | $266.8 | $(207.7) | | Accounts receivable, net | $289.1 | $268.9 | $20.2 | | CCF - cash and cash equivalents, and investments | $656.7 | $642.6 | $14.1 | - Working capital shifted from a surplus of $49.2 million at December 31, 2024, to a deficit of $122.4 million at June 30, 2025, primarily due to cash withdrawals from the CCF[126] - Total debt decreased by $19.9 million to $381.0 million due to scheduled fixed interest debt repayments[129] Future Milestone Payments for Vessel Construction (as of June 30, 2025, in millions) | Year | Amount | | :-------------- | :----- | | Remainder of 2025 | $189.7 | | 2026 | $313.6 | | 2027 | $185.0 | | 2028 | $22.2 | | 2029 | $2.9 | | Total | $713.4 | | (Paid as of June 30, 2025) | $290.2 | - The company repurchased $162.9 million of common stock during the six months ended June 30, 2025, with approximately 2.5 million shares remaining under the repurchase program[134][135] Critical Accounting Policies and Estimates This section confirms no material changes to the company's critical accounting policies and estimates during the quarter - There were no material changes to the company's critical accounting policies and estimates during the quarter ended June 30, 2025[136] Other Matters This section covers recent dividend declarations and references new accounting pronouncements - The company paid a Q2 2025 cash dividend of $0.34 per share and declared a Q3 2025 cash dividend of $0.36 per share[137] - Information on new accounting pronouncements is provided in Note 2[137] ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK There have been no material changes to the company's market risk position as previously disclosed in its Annual Report on Form 10-K - No material changes to the company's market risk position were reported[138] ITEM 4. CONTROLS AND PROCEDURES Management, including the CEO and CFO, concluded that the company's disclosure controls and procedures were effective as of June 30, 2025. No material changes in internal control over financial reporting occurred during the quarter - Disclosure controls and procedures were deemed effective as of June 30, 2025[139] - No material changes in internal control over financial reporting occurred during the three months ended June 30, 2025[140] PART II. OTHER INFORMATION ITEM 1. LEGAL PROCEEDINGS The company's Ocean Transportation business faces environmental risks, but management believes it is in material compliance with regulations. Other legal actions are not expected to materially affect the company's financial condition or results - The company is in material compliance with applicable environmental laws and regulations[142] - Other legal actions are not expected to have a material effect on the company's financial condition, results of operations, or cash flows[146] ITEM 1A. RISK FACTORS There were no material changes to the company's risk factors previously disclosed in its Form 10-Q for the quarter ended March 31, 2025 - No material changes to the company's risk factors were reported[147] ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS The company repurchased 860,000 shares of common stock for a total of $93.7 million during the three months ended June 30, 2025, under its ongoing share repurchase program. Approximately 2.47 million shares remained available for repurchase as of June 30, 2025 Summary of Share Repurchases (Three Months Ended June 30, 2025) | Period | Total Number of Shares Purchased | Average Price Paid Per Share | | :--------------- | :------------------------------- | :--------------------------- | | April 1 – 30, 2025 | 410,000 | $105.85 | | May 1 – 31, 2025 | 260,000 | $107.88 | | June 1 – 30, 2025 | 190,000 | $112.06 | | Total | 860,000 | $107.83 | - As of June 30, 2025, the maximum number of remaining shares that may be repurchased under the program was approximately 2,470,956 shares[148] - The share repurchase program, with an aggregate total of 15.0 million shares, expires on December 31, 2027[148] ITEM 3. DEFAULTS UPON SENIOR SECURITIES This section confirms no defaults occurred on senior securities during the reporting period - No defaults upon senior securities were reported[150] ITEM 4. MINE SAFETY DISCLOSURES This section confirms no mine safety disclosures were required for the reporting period - No mine safety disclosures were reported[151] ITEM 5. OTHER INFORMATION This section details an amended Rule 10b5-1 trading plan by the Chairman and CEO - Matthew J. Cox, Chairman and CEO, amended a Rule 10b5-1 trading plan on May 8, 2025, to sell up to 29,856 shares of Matson common stock through December 8, 2025[153] ITEM 6. EXHIBITS This section lists all exhibits filed with the Form 10-Q, including various agreements, certifications, and XBRL-related documents - Key exhibits include the Third Amended and Restated Credit Agreement, amendments to Private Shelf Agreements, and various forms of 2025 Incentive Compensation Plan award agreements[154] - Certifications from the Chief Executive Officer and Chief Financial Officer are included, along with Inline XBRL documents[154][155][157] SIGNATURES This section provides the official signatures of the company's key financial officers, certifying the report's accuracy - The report was signed by Joel M. Wine (EVP & CFO) and Kevin L. Stuck (VP & Controller) on August 1, 2025[160]