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What changed in Matson, Inc.'s 10-K — 2022 vs 2023

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Paragraph-level year-over-year comparison of Matson, Inc.'s 2022 and 2023 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2023 report.

+248 added−249 removedSource: 10-K (2024-02-23) vs 10-K (2023-02-24)

Top changes in Matson, Inc.'s 2023 10-K

248 paragraphs added · 249 removed · 209 edited across 8 sections

Item 1. Business

Business — how the company describes what it does

66 edited+4 added−13 removed61 unchanged
Biggest changeMatson also maintains vessels which may operate as dry-dock relief or for emergency activation purposes under an EPA approved ECA permit enabling the use of fuel oil with a maximum sulfur content of ≤0.5 percent within the North America ECA or at any time on IMO compliant fuels. ​ In June 2021, the IMO adopted new GHG emission requirements applicable to ships.
Biggest changeMatson also maintains vessels which may operate as dry-dock relief or for emergency activation purposes under an Environmental Protection Agency (“EPA”) approved ECA permit enabling the use of fuel oil with a maximum sulfur content of ≤0.5 percent within the North America ECA or at any time on IMO compliant fuels. ​ In June 2021, the IMO adopted regulations requiring that, beginning with a vessel’s first annual, intermediate or renewal survey for an International Air Pollution Prevention (“IAPP”) certificate on or after January 1, 2023, all containerships with more than 10,000 dead weight tons meet specified Energy Efficiency Existing Ship Index (“EEXI”) levels.
West Coast and Hawaii. ​ Westbound cargo carried by Matson to Hawaii includes dry containers of mixed commodities, refrigerated commodities, food and beverages, retail merchandise, building materials, automobiles and household goods. Matson’s eastbound cargo from Hawaii includes automobiles, household goods, dry containers of mixed commodities and livestock.
West Coast and Hawaii. ​ Westbound cargo carried by Matson to Hawaii includes dry containers of mixed commodities, refrigerated commodities, food, beverages, retail merchandise, building materials, automobiles and household goods. Matson’s eastbound cargo from Hawaii includes automobiles, household goods, dry containers of mixed commodities and livestock.
The majority of Matson’s owned vessels are U.S. flagged and Jones Act qualified vessels, and operate in the Hawaii, China, Guam, Japan, Micronesia and Alaska services.
The majority of Matson’s owned vessels are U.S. flagged and Jones Act qualified vessels, and operate in Matson’s Hawaii, China, Guam, Japan, Micronesia and Alaska services.
Matson’s service is further differentiated by best-in-class stevedoring services provided by SSAT, Matson dedicated terminal space, access to Shippers Transport Express off-dock container yards for faster truck turn times, Matson-dedicated equipment including chassis to speed cargo availability, one-stop intermodal connections, and world-class customer service. Matson also 7 Table of Contents provides intermodal services in coordination with Matson Logistics.
Matson’s service is further differentiated by best-in-class stevedoring services provided by SSAT, Matson dedicated terminal space, access to Shippers Transport Express off-dock container yards for faster truck turn times, Matson-dedicated equipment including chassis to speed cargo availability, one-stop intermodal connections, and world-class customer service. Matson also provides intermodal 7 Table of Contents services in coordination with Matson Logistics.
AVAILABLE INFORMATION ​ Matson makes available, free of charge on or through its Internet website, Matson’s annual reports on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K and amendments to those reports filed or furnished pursuant to Section 13(a) or 15(d) of the Securities Exchange Act of 1934 as soon as reasonably practicable after it electronically files such material with, or furnishes them to, the U.S.
AVAILABLE INFORMATION ​ Matson makes available, free of charge on or through its Internet website, Matson’s annual reports on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K and amendments to those reports filed or furnished pursuant to Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended, as soon as reasonably practicable after it electronically files such material with, or furnishes them to, the U.S.
This seasonality trend is amplified in the Alaska service primarily due to winter weather and the timing of southbound seafood trade. As a result, earnings have tended to follow a similar pattern, offset by periodic vessel dry-docking and other episodic cost factors, which can lead to earnings variability.
This seasonality is amplified in the Alaska service primarily due to winter weather and the timing of southbound seafood trade. As a result, earnings have tended to follow a similar pattern, offset by periodic vessel dry-docking and other episodic cost factors, which can lead to earnings variability.
While factors such as job, location and business unit ultimately determine which plans an employee may be eligible for participation, the Company’s total rewards offering includes market competitive base salaries, cash and equity incentives, recognition awards, health and welfare benefits, and employee and employer funded retirement plans.
While factors such as job, location and business unit ultimately determine which plans an employee may be eligible for, the Company’s total rewards offering includes market competitive base salaries, cash and equity incentives, recognition awards, health and welfare benefits, and employee and employer funded retirement plans.
Department of Transportation to provide vessel management services to manage and maintain three Ready Reserve Force vessels on behalf of the U.S. Department of Transportation Maritime Administration. ​ ​ 3 Table of Contents Vessel Information: ​ Vessels: ​ Matson’s fleet includes both owned and chartered vessels. Matson’s owned vessels represent an investment of approximately $2.3 billion.
Department of Transportation to provide vessel management services to manage and maintain three Ready Reserve Force vessels on behalf of the U.S. Department of Transportation Maritime Administration (“MARAD”). ​ ​ 3 Table of Contents Vessel Information: ​ Vessels: ​ Matson’s fleet includes both owned and chartered vessels. Matson’s owned vessels represent an investment of approximately $2.3 billion.
There are also two U.S. flagged Jones Act barge operators, Alaska Marine Lines, which mainly provides services from Seattle, Washington to the ports of Anchorage, Dutch Harbor, and other locations in Alaska, and Samson Tug & Barge, which mainly serves Western Alaska and other locations.
There are also two primary U.S. flagged Jones Act barge operators, Alaska Marine Lines, which mainly provides services from Seattle, Washington to the ports of Anchorage, Dutch Harbor, and other locations in Alaska, and Samson Tug & Barge, which mainly serves Western Alaska and other locations.
INOUYE (4) ​ 2018 1274136 3,220 408 ​ — 854’ 0” 23.5 51,000 — KAIMANA HILA (4) ​ 2019 ​ 1274135 ​ 3,220 ​ 408 ​ — ​ 854’ 0” ​ 23.5 54,000 — MANOA (4)(8) 1982 651627 2,824 408 — 860’ 2” 23.0 35,000 — MAHIMAHI (4)(8) 1982 653424 2,824 408 — 860’ 2” 23.0 35,000 — LURLINE (4) ​ 2019 ​ 1274143 ​ 2,750 ​ 432 ​ 500 ​ 869’ 5” ​ 23.0 ​ 51,000 ​ — MATSONIA (4) ​ 2020 ​ 1274123 ​ 2,750 ​ 432 ​ 500 ​ 869’ 5” ​ 23.0 ​ 51,000 ​ — MANULANI (4)(8) 2005 1168529 2,378 284 — 712’ 0” 22.5 38,000 — MAUNAWILI (4)(8) 2004 1153166 2,378 326 — 711’ 9” 22.5 37,000 — MANUKAI (4)(8) 2003 1141163 2,378 326 — 711’ 9” 22.5 38,000 — R.J.
INOUYE (4)(8) ​ 2018 1274136 3,160 408 ​ — 854’ 0” 23.5 51,000 — KAIMANA HILA (4) ​ 2019 ​ 1274135 ​ 3,220 ​ 408 ​ — ​ 854’ 0” ​ 23.5 54,000 — MANOA (4)(7) 1982 651627 2,824 408 — 860’ 2” 23.0 35,000 — MAHIMAHI (4)(7) 1982 653424 2,824 408 — 860’ 2” 23.0 35,000 — LURLINE (4) ​ 2019 ​ 1274143 ​ 2,750 ​ 432 ​ 500 ​ 869’ 5” ​ 23.0 ​ 51,000 ​ — MATSONIA (4) ​ 2020 ​ 1274123 ​ 2,750 ​ 432 ​ 500 ​ 869’ 5” ​ 23.0 ​ 51,000 ​ — MANULANI (4)(7) 2005 1168529 2,378 284 — 712’ 0” 22.5 38,000 — MAUNAWILI (4)(7) 2004 1153166 2,378 326 — 711’ 9” 22.5 37,000 — MANUKAI (4)(7) 2003 1141163 2,378 326 — 711’ 9” 22.5 38,000 — R.J.
Each new vessel is expected to provide 500 containers of additional capacity per voyage in the CLX service. ​ The contract cost of the new vessel program is approximately $1.0 billion in total, and milestone payments are expected to be financed with cash currently on deposit in the Company’s Capital Construction Fund, cash and cash equivalents on the consolidated balance sheet and through cash flows generated from future operations, borrowings available under the Company’s unsecured revolving credit facility or additional debt financings .
Each new vessel is expected to provide approximately 500 containers of additional capacity per voyage in the CLX service. ​ The contract cost of the new vessel program is approximately $1.0 billion in total, and milestone payments are expected to be financed with cash currently on deposit in the Company’s Capital Construction Fund, cash and cash equivalents on the Company’s Consolidated Balance Sheets and through cash flows generated from future operations, borrowings available under the Company’s unsecured revolving credit facility or additional debt financings .
For additional information on Ocean Transportation revenues for the years ended December 31, 2022, 2021 and 2020, see Note 2 to the Consolidated Financial Statements in Item 8 of Part II below. ​ Seasonality: ​ Historically, Matson’s Ocean Transportation services have typically experienced seasonality in volume, generally following a pattern of increasing volume starting in the second quarter of each year, culminating in a peak season throughout the third quarter, with subsequent decline in demand during the fourth and first quarters.
For additional information on Ocean Transportation revenues for the years ended December 31, 2023, 2022 and 2021, see Note 2 to the Consolidated Financial Statements in Item 8 of Part II below. ​ Seasonality: ​ Historically, Matson’s Ocean Transportation services have typically experienced seasonality in volume, generally following a pattern of increasing volume starting in the second quarter of each year, culminating in a peak season throughout the third quarter, with subsequent decline in demand during the fourth and first quarters.
Matson has also set a long-term goal to achieve net zero Scope 1 GHG emissions from our owned fleet by 2050. For more information on Matson’s environmental stewardship initiatives, including GHG reduction goals, see Matson’s Sustainability Report and other information available at https://www.matson.com/sustainability. ​ Vessel Emission Regulations: ​ Being a leader in environmental stewardship is one of Matson’s core values.
Matson has also set a long-term goal to achieve net zero Scope 1 GHG emissions from its owned fleet by 2050. For more information on Matson’s environmental stewardship initiatives, including GHG reduction goals, see Matson’s Sustainability Report and other information available at https://www.matson.com/sustainability. ​ Vessel Emission Regulations: ​ Being a leader in environmental stewardship is one of Matson’s core values.
Details of Matson’s active and reserve vessels as of December 31, 2022 are as follows: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Usable Cargo Capacity ​ ​ ​ Vessel ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Containers ​ Vehicles ​ ​ ​ Design ​ Approximate ​ Charter ​ Year Official ​ Reefer Speed Deadweight Expiration Name of Vessels ​ Built ​ Number ​ TEUs (1) ​ Slots ​ Autos ​ Length ​ (Knots) (2) ​ (Long Tons) ​ Date (3) Vessels-Owned: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ DANIEL K.
Details of Matson’s active and reserve vessels as of December 31, 2023 are as follows: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Usable Cargo Capacity ​ ​ ​ Vessel ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Containers ​ Vehicles ​ ​ ​ Design ​ Approximate ​ Charter ​ Year Official ​ Reefer Speed Deadweight Expiration Name of Vessels ​ Built ​ Number ​ TEUs (1) ​ Slots ​ Autos ​ Length ​ (Knots) (2) ​ (Long Tons) ​ Date (3) Vessels-Owned: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ DANIEL K.
Matson’s AAX service also offers customers a service from Kodiak and Dutch Harbor, Alaska to Ningbo and Shanghai, China, and Busan, South Korea, with transshipment services from those ports to other locations in Asia. ​ China Service: Major competitors to Matson’s China service include large international transpacific carriers such as CMA CGM, OOCL, ZIM, Evergreen and Maersk.
Matson’s AAX service also offers customers a service from Kodiak and Dutch Harbor, Alaska to Ningbo and Shanghai, China, and Busan, South Korea, with transshipment services from those ports to other locations in Asia. ​ China Service: Major competitors to Matson’s China service include large international transpacific carriers such as CMA CGM, OOCL, ZIM, Evergreen and Cosco.
These numbers include seagoing personnel who rotate through billets (as described below) and temporary employees, but do not include employees of SSAT or other non-employee affiliates such as agents and contractors. The composition of Matson’s workforce by geography is as follows: ​ ​ Matson’s fleet of active vessels requires 331 billets to operate.
These numbers include seagoing personnel who rotate through billets (as described below) and temporary employees, but do not include employees of SSAT or other non-employee affiliates such as agents and contractors. The composition of Matson’s workforce by geography is as follows: ​ ​ Matson’s fleet of active vessels requires 326 billets to operate.
Matson also provides a barge service between Dutch Harbor and Akutan in Alaska, and transportation services to other locations in Alaska including the Kenai Peninsula, Fairbanks and the North Slope. ​ Northbound cargo to Alaska consists mainly of dry containers of mixed commodities, refrigerated commodities, foods and beverages, retail merchandise, household goods and automobiles.
Matson also provides a barge service between Dutch Harbor and Akutan in Alaska, and transportation services to other locations in Alaska including the Kenai Peninsula, Fairbanks and the North Slope. ​ Northbound cargo to Alaska consists mainly of dry containers of mixed commodities, refrigerated commodities, food, beverages, retail merchandise, household goods and automobiles.
For additional information on Logistics revenues for the years ended December 31, 2022, 2021 and 2020, see Note 2 to the Consolidated Financial Statements in Item 8 of Part II below. ​ 10 Table of Contents Seasonality: ​ In general, Matson Logistics’ services are not significantly impacted by seasonality factors, with the exception of its freight forwarding service to Alaska which may be affected by winter weather and the seasonal nature of the tourism industry.
For additional information on Logistics revenues for the years ended December 31, 2023, 2022 and 2021, see Note 2 to the Consolidated Financial Statements in Item 8 of Part II below. ​ 10 Table of Contents Seasonality: ​ In general, Matson Logistics’ services are not significantly impacted by seasonality factors, with the exception of its freight forwarding service to Alaska which may be affected by winter weather and the seasonal nature of the tourism industry. ​ ​ C.
Southbound cargo from Alaska primarily consists of seafood, household goods and automobiles. 2 Table of Contents ​ Matson’s Alaska-Asia Express (“AAX”) service provides carriage of dry and frozen seafood from Kodiak and Dutch Harbor, Alaska to many locations in Asia via its transshipment ports of Ningbo and Shanghai, China, and Busan, South Korea.
Southbound cargo from Alaska primarily consists of seafood, household goods and automobiles. 2 Table of Contents ​ Matson’s Alaska-Asia Express (“AAX”) service provides carriage of seafood primarily from Kodiak and Dutch Harbor, Alaska to many locations in Asia via its transshipment ports of Ningbo and Shanghai, China, and Busan, South Korea.
Other competitors in the Hawaii service include proprietary operators and contract carriers of bulk cargo, and airfreight freight carriers. ​ Matson operates three strings of vessels to Hawaii. These strings provide customers an industry-leading five departures from ports on the U.S.
Other competitors in the Hawaii service include proprietary operators and contract carriers of bulk cargo, and air freight carriers. ​ Matson operates three strings of vessels to Hawaii. These strings provide customers an industry-leading five departures from ports on the U.S.
Matson Logistics creates award winning benefits and value for its customers through volume purchases of rail, motor carrier and ocean transportation services, augmented by services such as shipment tracking and tracing, accessibility to its private fleet of 53-foot intermodal containers and single-vendor invoicing. Matson Logistics operates customer service centers and has sales offices throughout North America.
Matson Logistics creates significant benefits and value for its customers through volume purchases of rail, motor carrier and ocean transportation services, augmented by services such as shipment tracking and tracing, accessibility to its private fleet of 53-foot intermodal containers and single-vendor invoicing. Matson Logistics operates customer service centers and has sales offices throughout North America.
Additional projects for the second phase relate to improvements to its existing backup power generators, installation of new above ground fuel storage tanks, a battery energy storage system, and other upgrades at the terminal, and are expected to be completed within the next three years. ​ The third phase represents a broader and long-term terminal expansion program at the Sand Island terminal facility.
Additional projects for the second phase relate to improvements to its existing backup power generators, installation of new above ground fuel storage tanks and other upgrades at the terminal, and are expected to be completed within the next three years. ​ The third phase represents a broader and long-term terminal expansion program at the Sand Island terminal facility.
The AAX service utilizes CLX+ vessels on their westbound trip to China. ​ South Pacific Service: Matson’s New Zealand Express (“NZX”) service provides carriage of general sustenance cargo between Auckland, New Zealand and select islands in the South Pacific, including Fiji (Suva and Lautoka), Samoa (Apia), American Samoa (Pago Pago), the Cook Islands (Rarotonga and Aitutaki), Tonga (Nukualofa and Vava’u), and Niue.
The AAX service utilizes CLX+ vessels on their westbound return voyages to China. ​ South Pacific Service: Matson’s New Zealand Express (“NZX”) service provides carriage of general sustenance cargo between Auckland, New Zealand and select islands in the South Pacific, including Fiji (Suva and Lautoka), Samoa (Apia), American Samoa (Pago Pago), the Cook Islands (Rarotonga and Aitutaki), Tonga (Nukualofa and Vava’u), and Niue.
In addition, since August 1, 2012, the California Air Resource Board has reduced the fuel oil maximum sulfur content to ≤0.1 percent within 24 miles of the California coastline. ​ All of Matson’s vessels are designed to operate in compliance with IMO and ECA regulations as applicable.
In addition, since August 1, 2012, the California Air Resources Board has reduced the fuel oil maximum sulfur content to ≤0.1 percent within 24 miles of the California coastline. ​ All of Matson’s vessels are designed to operate in compliance with current IMO and ECA regulations as applicable.
Effective January 1, 2020, the IMO imposed regulations that generally require all vessels to burn fuel oil with a maximum sulfur content of ≤0.5 percent. With respect to North America, all waters, with certain limited exceptions, within 200 nautical miles of U.S. and Canadian coastlines have been designated emission control areas (“ECAs”). Since January 1, 2015, U.S.
Effective January 1, 2020, the IMO imposed regulations that generally require all vessels to burn fuel oil with a maximum sulfur content of ≤0.5 percent. With respect to North America, all waters, 5 Table of Contents with certain limited exceptions, within 200 nautical miles of U.S. and Canadian coastlines have been designated emission control areas (“ECAs”).
Additionally, while Matson Logistics primarily provides surface transportation brokerage, it also competes to a lesser degree with other forms of transportation for the movement of cargo. ​ Matson Logistics’ freight forwarding services compete most directly with a variety of freight forwarding companies that operate within Alaska including Carlile, Lynden, American Fast Freight and Alaska Traffic Company. ​ Customer Concentration: ​ Matson Logistics serves customers in numerous industries and geographical locations.
Additionally, while Matson Logistics primarily provides surface transportation brokerage, it also competes to a lesser degree with other forms of transportation for the movement of cargo such as air freight. ​ Matson Logistics’ freight forwarding services compete most directly with a variety of freight forwarding companies that operate within Alaska including Carlile, Lynden and American Fast Freight. ​ Customer Concentration: ​ Matson Logistics serves customers in numerous industries and geographical locations.
West Coast to the port of Naha in Okinawa, Japan. ​ Matson offers customers a weekly service to the port of Naha in Okinawa, Japan as part of the CLX service from three ports on the U.S.
West Coast to the port of Naha in Okinawa, Japan. ​ Matson offers customers a fast and reliable weekly service to the port of Naha in Okinawa, Japan as part of the CLX service from three ports on the U.S.
Other competition includes air freight carriers and over-the-road trucking services. Matson’s AAX service has two major competitors, CMA CGM and Maersk Lines, which provide services between Dutch Harbor, Alaska and Asia. ​ Matson offers customers twice weekly scheduled service from Tacoma, Washington to Anchorage and Kodiak, Alaska, and a weekly service to Dutch Harbor, Alaska.
Other competitors include air freight carriers and over-the-road trucking services. Matson’s AAX service has two primary competitors, CMA CGM and Maersk Lines, which provide services between Dutch Harbor, Alaska and Asia. ​ Matson offers customers twice weekly scheduled service from Tacoma, Washington to Anchorage and Kodiak, Alaska, and a weekly service to Dutch Harbor, Alaska.
The Company also provided approximately 3,500 hours of employee training and professional development opportunities, and tuition reimbursement programs, while giving annual performance reviews to its non-union workforce. ​ For more information on Matson’s human capital programs, see our Sustainability Report which is available at www.matson.com/sustainability . ​ Bargaining Agreements: ​ Matson’s shoreside and seagoing employees are represented by a variety of unions.
The Company also provided approximately 2,200 hours of employee training and professional development opportunities, and tuition reimbursement programs, while giving annual performance reviews to its non-union workforce. ​ For more information on Matson’s human capital programs, see our Sustainability Report which is available at www.matson.com/sustainability . ​ 12 Table of Contents Bargaining Agreements: ​ Matson’s shoreside and seagoing employees are represented by a variety of unions.
Other competition includes air freight carriers. ​ Matson’s China service (CLX and CLX+) competes by offering fast and reliable service from the ports of Ningbo and Shanghai in China, and feeder services from other Asian ports of origin, to Long Beach and Oakland, California. Matson provides fixed day-of-the-week arrivals and industry leading cargo availability.
Other competitors include air freight carriers. ​ Matson’s China service (CLX and CLX+) competes by offering fast and reliable service from the ports of Ningbo and Shanghai in China, and feeder services from other Asian ports of origin, to Long Beach, California. Matson provides fixed day-of-the-week arrivals and industry leading cargo availability.
West Coast. ​ Micronesia and South Pacific Services: Matson’s Micronesia and South Pacific services have competition from a variety of local and international carriers that provide freight services to the area. ​ Customer Concentration: ​ Matson serves customers in numerous industries and carries a wide variety of cargo, mitigating its dependence upon any single customer or single type of cargo.
West Coast. ​ Micronesia and South Pacific Services: Matson’s Micronesia and South Pacific services compete with a variety of local and international carriers that provide freight services to the area. ​ Customer Concentration: ​ Matson serves customers in numerous industries and carries a wide variety of cargo, mitigating its dependence upon any single customer or single type of cargo.
Matson provides container transshipment services from many locations in Asia including Hong Kong and Xiamen, China to the United States via the ports of Ningbo and Shanghai, China. ​ Matson operates a second expedited service to the U.S. West Coast with the China-Long Beach Express Plus (“CLX+”) service.
Matson provides container transshipment services from many locations in Asia including Southern China, Hong Kong, Vietnam and Xiamen, China to the United States via Shanghai. ​ Matson operates a second expedited service to the U.S. West Coast with the China-Long Beach Express Plus (“CLX+”) service.
Accordingly, the Company’s total rewards program contains several pay-for-performance components tied to individual, business unit and company performance, as well as Matson stock price performance. ​ 12 Table of Contents Succession and Career Planning: ​ Matson’s workforce is characterized by uniquely skilled, long-tenured employees.
Accordingly, the Company’s total rewards program contains several pay-for-performance components tied to individual, business unit and Company performance, as well as Matson’s stock price performance. ​ Succession and Career Planning: ​ Matson’s workforce is characterized by uniquely skilled, long-tenured employees.
Matson also competes by offering one of the most comprehensive services to customers, including: the only container service to and from the three largest U.S. West Coast ports; the most efficient terminal network on the U.S.
Matson also competes by offering a comprehensive service network to customers, including: the only container service to and from the three largest U.S. West Coast ports; the most efficient terminal network on the U.S.
The Company utilizes both internal and external learning and development programs to encourage and promote career opportunities within our diverse employee groups.
The Company utilizes both internal and external learning and development programs to encourage and promote career opportunities and inclusivity for all within our diverse employee groups.
The Company’s 10 largest Ocean Transportation customers account for approximately 15 percent of the Company’s Ocean Transportation revenue.
The Company’s 10 largest Ocean Transportation customers account for approximately 16 percent of the Company’s Ocean Transportation revenue.
Matson’s vessel management services also employed personnel in 32 billets to manage three U.S. government vessels. ​ Diversity, Equity and Inclusion (DE&I): ​ For many years, Matson has been committed to improving diversity, providing equal pay for equal work and creating an inclusive culture. According to the U.S.
Matson’s vessel management services also employed personnel in 32 billets to manage three U.S. government vessels. ​ Diversity, Equity and Inclusion (“DE&I”): ​ For many years, Matson has been committed to improving diversity, providing equal pay for equal work and creating an inclusive culture.
From 2023 to 2024, Matson will be performing surveying, planning and design work in preparation for this expansion. ​ Ocean Transportation Equipment: ​ As a complement to its fleet of vessels, Matson owns a variety of equipment including cranes, terminal equipment, containers and chassis, which represents an investment of approximately $0.8 billion as of December 31, 2022.
From 2024 to 2025, Matson expects to perform surveying, planning and design work in preparation for this expansion. ​ Ocean Transportation Equipment: ​ As a complement to its fleet of vessels, Matson owns a variety of equipment including cranes, terminal equipment, containers and chassis, which represents an investment of approximately $0.8 billion as of December 31, 2023.
The Company’s 10 largest logistics customers account for approximately 18 percent of the Company’s Logistics revenue.
The Company’s 10 largest logistics customers account for approximately 21 percent of the Company’s Logistics revenue.
West Coast, Hawaii and Alaska on foreign-built or foreign-documented vessels is prohibited. ​ During the years ended December 31, 2022, 2021 and 2020, approximately 39 percent, 41 percent and 62 percent, respectively, of Matson’s Ocean Transportation revenues came from the Hawaii and Alaska trades that were subject to the Jones Act.
West Coast, Hawaii and Alaska on foreign-built or foreign-documented vessels is prohibited. 8 Table of Contents ​ During the years ended December 31, 2023, 2022 and 2021, approximately 55 percent, 39 percent and 41 percent, respectively, of Matson’s Ocean Transportation revenues came from the Hawaii and Alaska trades that were subject to the Jones Act.
The new vessels will have dual-fuel engines and be equipped with tanks, piping and cryogenic equipment designed to operate on liquified natural gas (“LNG”) and conventional fuels. The new vessels are also being designed with state-of-the-art green technology features and fuel-efficient hulls.
The new vessels will have dual-fuel engines and be equipped with tanks, piping and cryogenic equipment designed to operate on LNG, conventional and alternative fuels. The new vessels are also being designed with state-of-the-art green technology features and fuel-efficient hulls.
EEXI is a one-time certification measuring a ship’s theoretical carbon dioxide (CO 2 ) emissions per transport work based on its design parameters. Beginning in 2023, containerships with over 5,000 gross tonnage (“GT”) will be required to meet annual Carbon Intensity Indicator (“CII”) requirements that become increasingly stringent towards 2030.
EEXI is a one-time certification measuring a ship’s theoretical carbon dioxide (“CO 2 ”) emissions per transport work based on its design parameters. Beginning in 2023, containerships with over 5,000 gross tonnage (“GT”) are also required to meet annual Carbon Intensity Indicator (“CII”) levels that become increasingly stringent towards 2030.
PFEIFFER (4)(8) 1992 979814 2,245 300 — 713’ 6” 23.0 28,000 — MOKIHANA (4) 1983 655397 1,994 354 1,323 860’ 2” 23.0 30,000 — MAUNALEI (4)(8) 2006 1181627 1,992 328 — 681’ 1” 22.1 33,000 — MATSON KODIAK (4)(8) 1987 910308 1,668 280 — 710’ 0” 20.0 20,000 — MATSON ANCHORAGE (4)(8) 1987 910306 1,668 280 — 710’ 0” 20.0 20,000 — MATSON TACOMA (4)(8) 1987 910307 1,668 280 — 710’ 0” 20.0 20,000 — KAMOKUIKI (5) 2000 9232979 707 100 — 433’ 9” 17.5 8,000 — OLOMANA (6) ​ 2004 ​ 9184225 ​ 645 ​ 120 ​ — ​ 388’ 7” ​ 14.0 ​ 8,000 ​ — IMUA (6) 2004 9184237 645 90 — 388’ 6” 15.0 8,000 — LILOA II (6) 2006 9184249 630 90 — 388’ 6” 15.0 ​ 8,000 ​ — PAPA MAU (6) 1999 9141704 521 68 — 381’ 5” 14.0 6,000 — Vessels-Chartered: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ MATSON HAWAII (6) ​ 2009 ​ 9386471 ​ 4,360 ​ 326 ​ — ​ 849’ 3” ​ 23.3 ​ 52,000 ​ July 2023 MATSON LANAI (6) ​ 2007 ​ 9334143 ​ 4,253 ​ 400 ​ — ​ 855’ 2” ​ 24.3 ​ 50,000 ​ June 2025 MATSON MAUI (6) ​ 2007 ​ 9340764 ​ 4,253 ​ 400 ​ — ​ 854’ 8” ​ 24.5 ​ 50,000 ​ March 2026 MATSON KAUAI (6) ​ 2008 ​ 9353278 ​ 4,218 ​ 350 ​ — ​ 841’ 4” ​ 24.8 ​ 52,000 ​ January 2025 MATSON MOLOKAI (6) ​ 2007 ​ 9338084 ​ 2,824 ​ 586 ​ — ​ 728’ 10” ​ 22.0 ​ 39,000 ​ May 2025 MATSON NIIHAU (6) ​ 2005 ​ 9294159 ​ 2,824 ​ 586 ​ — ​ 728’ 10” ​ 21.0 ​ 39,000 ​ March 2023 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Barges-Owned: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ MAUNA LOA (4) 2013 1247426 500 78 — 362’ 6” — 13,000 — HALEAKALA (4) 2022 1324310 620 72 — 362’ 6” — 15,000 — Barges-Chartered: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ILIULIUK BAY (4)(7) 2013 1249384 178 — — 250’ 0” — 4,000 December 2023 (1) Twenty-foot Equivalent Units (“TEU”) is a standard measure of cargo volume correlated to a standard 20-foot dry cargo container.
PFEIFFER (4)(7) 1992 979814 2,245 300 — 713’ 6” 23.0 28,000 — MOKIHANA (4) 1983 655397 1,994 354 1,323 860’ 2” 23.0 30,000 — MAUNALEI (4)(7) 2006 1181627 1,992 328 — 681’ 1” 22.1 33,000 — MATSON KODIAK (4)(7) 1987 910308 1,668 280 — 710’ 0” 20.0 20,000 — MATSON ANCHORAGE (4)(7) 1987 910306 1,668 280 — 710’ 0” 20.0 20,000 — MATSON TACOMA (4)(7) 1987 910307 1,668 280 — 710’ 0” 20.0 20,000 — KAMOKUIKI (5) 2000 9232979 707 100 — 433’ 9” 17.5 8,000 — OLOMANA (6) ​ 2004 ​ 9184225 ​ 645 ​ 120 ​ — ​ 388’ 7” ​ 14.0 ​ 8,000 ​ — IMUA (6) 2004 9184237 645 90 — 388’ 6” 15.0 8,000 — LILOA II (6) 2006 9184249 630 90 — 388’ 6” 15.0 ​ 8,000 ​ — PAPA MAU (6) 1999 9141704 521 60 — 381’ 5” 14.0 6,000 — Vessels-Chartered: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ MATSON WAIKIKI (6) ​ 2008 ​ 9349801 ​ 4,946 ​ 400 ​ — ​ 902’ 0” ​ 22.5 ​ 62,000 ​ September 2025 MATSON LANAI (6) ​ 2007 ​ 9334143 ​ 4,253 ​ 400 ​ — ​ 855’ 2” ​ 24.3 ​ 50,000 ​ June 2025 MATSON MAUI (6) ​ 2007 ​ 9340764 ​ 4,253 ​ 400 ​ — ​ 854’ 8” ​ 24.5 ​ 50,000 ​ March 2026 MATSON OAHU (6) ​ 2008 ​ 9352406 ​ 4,245 ​ 535 ​ — ​ 853’ 0” ​ 24.3 ​ 50,000 ​ October 2024 MATSON KAUAI (6) ​ 2008 ​ 9353278 ​ 4,218 ​ 350 ​ — ​ 881’ 11” ​ 24.8 ​ 52,000 ​ January 2025 MATSON MOLOKAI (6) ​ 2007 ​ 9338084 ​ 2,824 ​ 586 ​ — ​ 728’ 10” ​ 22.0 ​ 39,000 ​ May 2025 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Barges-Owned: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ MAUNA LOA (4) 2013 1247426 500 78 — 362’ 6” — 13,000 — HALEAKALA (4) 2022 1324310 620 72 — 362’ 6” — 15,000 — Barges-Chartered: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ILIULIUK BAY (4) 2013 1249384 178 — — 250’ 0” — 4,000 December 2024 (1) Twenty-foot Equivalent Units (“TEU”) is a standard measure of cargo volume correlated to a standard 20-foot dry cargo container.
The Company’s success depends in part on employing a diverse, talented and engaged workforce that reflects its local communities, supports an environment of high standards and performance, and thrives in the Company’s collaborative and respectful culture. ​ During 2022, Matson had 4,288 employees worldwide, of which 159 employees were based in international locations and 2,994 employees were covered by collective bargaining agreements with unions.
The Company’s success depends in part on employing a diverse, talented and engaged workforce that reflects its local communities, supports an environment of high standards and performance, and thrives in the Company’s collaborative and respectful culture. ​ During 2023, Matson had 4,315 employees worldwide, of which 158 employees were based in international locations and 3,012 employees were covered by collective bargaining agreements with unions.
U.S. flagged vessels are generally required to be maintained at higher standards than foreign-flagged vessels and are subject to rigorous supervision and inspections by, or on behalf of, the U.S. Coast Guard, which requires appropriate certifications and background checks of the crew members.
U.S. flagged vessels are generally required to be maintained at higher standards than foreign-flagged vessels and are subject to rigorous supervision and inspections by, or on behalf of, the U.S. Coast Guard, which requires appropriate certifications and background checks of the crew members. Under Section 27 of the Jones Act, the carriage of cargo between the U.S.
Matson expects to expand into Pier 51A and portions of Pier 51B after Pasha Hawaii (“Pasha”) relocates to the newly constructed Kapalama container terminal facility planned for 2024.
Matson expects to expand into Pier 51A and portions of Pier 51B after Pasha Hawaii (“Pasha”) relocates to the newly constructed Kapalama container terminal (“KCT”) facility in 2025.
Additionally, the Company plans to begin reengining Manukai to operate on LNG and conventional fuels during the second quarter of 2023 at a total cost of approximately $60 million. ​ The three new Aloha Class vessels and LNG installation projects are important steps towards achieving Matson’s medium-term greenhouse gas (“GHG”) emissions goal which is to reduce Scope 1 GHG emissions from our owned fleet by 40% by 2030, using 2016 as a baseline year.
Additionally, in the third quarter of 2023, the Company commenced the reengining of Manukai to operate on LNG, conventional and alternative fuels and the total cost is expected to be approximately $72 million. ​ The three new Aloha Class vessels and LNG installation projects are important steps towards achieving Matson’s medium-term greenhouse gas (“GHG”) emissions goal which is to reduce Scope 1 GHG emissions from its owned fleet by 40% by 2030, using 2016 as a baseline year.
(8) Vessel installed with exhaust gas cleaning systems (commonly referred to as “scrubbers”). ​ ​ ​ 4 Table of Contents Fleet Renewal Program: ​ Matson is constructing three new vessels with the following specifications and expected delivery dates: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Usable Cargo Capacity ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Containers ​ ​ ​ Maximum ​ Maximum ​ Type of Expected Reefer ​ ​ Speed Deadweight Class of Vessel ​ Vessel ​ Delivery Date ​ TEUs ​ Slots ​ Length ​ (Knots) ​ (Long Tons) Aloha Class Containership Q4 2026 ​ 3,620 400 ​ 853’ 2” 23.5 53,000 Aloha Class ​ Containership ​ Q2 2027 ​ 3,620 ​ 400 ​ 853’ 2” ​ 23.5 ​ 53,000 Aloha Class ​ Containership ​ Q4 2027 ​ 3,620 ​ 400 ​ 853’ 2” ​ 23.5 ​ 53,000 ​ Upon delivery, Matson expects to deploy the three new vessels in the CLX service and redeploy three existing CLX vessels into the Alaska service.
(8) Vessel can operate on liquified natural gas (“LNG”), conventional or alternative fuels. ​ ​ ​ 4 Table of Contents Fleet Renewal Program: ​ Matson is constructing three new vessels with the following specifications and expected delivery dates: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Usable Cargo Capacity ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Containers ​ ​ ​ Maximum ​ Maximum ​ Type of Expected Reefer ​ ​ Speed Deadweight Class of Vessel ​ Vessel ​ Delivery Date ​ TEUs ​ Slots ​ Length ​ (Knots) ​ (Long Tons) Aloha Class Containership Q4 2026 ​ 3,620 400 ​ 853’ 2” 23.5 53,000 Aloha Class ​ Containership ​ Q2 2027 ​ 3,620 ​ 400 ​ 853’ 2” ​ 23.5 ​ 53,000 Aloha Class ​ Containership ​ Q4 2027 ​ 3,620 ​ 400 ​ 853’ 2” ​ 23.5 ​ 53,000 ​ Matson expects to deploy the three new vessels in the CLX service and redeploy three existing vessels into the Alaska service.
The address of the SEC’s Internet website is www.sec.gov. ​ ​ 13 Table of Contents
The address of the SEC’s Internet website is www.sec.gov. ​ ​
Weakening economic conditions in the U.S., relatively high inflation and the impact of higher interest rates on household discretionary income may affect the demand for consumer goods in our markets, which could impact seasonal variability and demand for the Company’s Ocean Transportation services in 2023. ​ Maritime Laws and the Jones Act : ​ Maritime Laws: All interstate and intrastate marine commerce within the U.S. falls under the Merchant Marine Act of 1920 (commonly referred to as the Jones Act). ​ The Jones Act is a long-standing cornerstone of U.S. maritime policy.
Freight rates can be impacted by these seasonality trends as well as macro supply and demand variables. ​ Relatively high inflation and the impact of high interest rates on household discretionary income may affect the demand for consumer goods in our markets, which could impact seasonal variability and demand for the Company’s Ocean Transportation services in 2024. ​ Maritime Laws and the Jones Act : ​ Maritime Laws: All interstate and intrastate marine commerce within the U.S. falls under the Merchant Marine Act of 1920 (commonly referred to as the Jones Act). ​ The Jones Act is a long-standing cornerstone of U.S. maritime policy.
Actual and future annual vessel construction progress milestone payments based on signed agreements and change orders, excluding owners’ items and capitalized interest, are expected to be as follows: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Paid ​ Future Milestone Payments ​ ​ ​ Vessel Construction Obligations (in millions) 2022 2023 2024 2025 2026 2027 Thereafter Total Three Aloha Class Containerships ​ $ 50.0 ​ $ 50.0 ​ $ 71.0 ​ $ 351.0 ​ $ 307.0 ​ $ 157.0 ​ $ 13.0 ​ $ 999.0 ​ Matson is also installing tanks, piping and cryogenic equipment on existing Aloha Class vessels so that they can operate on LNG and conventional fuels.
Actual and future vessel construction progress milestone payments based on signed agreements and change orders, excluding vessel steel price adjustments, owners’ items and capitalized interest, are expected to be as follows: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Paid ​ Future Milestone Payments ​ ​ ​ Vessel Construction Obligations (in millions) As of December 31, 2023 2024 2025 2026 2027 2028 Thereafter Total Three Aloha Class Containerships ​ $ 99.9 ​ $ 71.0 ​ $ 367.1 ​ $ 323.0 ​ $ 132.0 ​ $ 6.0 ​ $ — ​ $ 999.0 ​ Matson is also installing tanks, piping and cryogenic equipment on existing Aloha Class vessels so that they can operate on LNG, conventional and alternative fuels.
Competition is differentiated by the depth, scale and scope of customer relationships; vendor relationships and rates; network capacity; real-time visibility into the movement of customers’ goods; and other technology solutions.
Matson Logistics competes by relying on the depth, scale and scope of its customer relationships; vendor relationships and rates; network capacity; real-time visibility into the movement of customers’ goods; and other technology solutions.
In 2022, 44 percent of open positions were filled through internal promotions.
In 2023, 41 percent of open positions were filled through internal promotions.
In 2022, approximately two-thirds of Matson promotions in management roles were women and/or minority individuals. ​ Matson is also focused on supporting a more diverse talent pool over the long-term by encouraging women and minorities to pursue careers in the maritime and logistics sectors.
In 2023, over half of Matson promotions in management roles were women and/or diverse individuals. ​ Matson is also focused on supporting a more inclusive talent pool over the long-term by encouraging historically underrepresented groups such as women and diverse individuals to pursue careers in the maritime and logistics sectors.
This service mainly carries general sustenance cargo in both dry and refrigerated containers and household goods supporting the U.S. military. ​ Micronesia Service: Matson’s Micronesia service provides carriage between the U.S.
West Coast and the port of Naha in Okinawa, Japan, as part of its CLX service. This service mainly carries general sustenance cargo in both dry and refrigerated containers and household goods supporting the U.S. military. ​ Micronesia Service: Matson’s Micronesia service provides carriage between the U.S.
In addition, in the China trade, volume is typically driven primarily by U.S. consumer demand for goods during key retail selling seasons.
In addition, in the China trade, volume demand is generally stronger in the second and third quarters primarily driven by U.S. consumer demand for goods ahead of key retail selling seasons.
The LNG installation project on Daniel K. Inouye has begun and work on Kaimana Hila is currently scheduled to begin during the second quarter of 2024. Each installation is expected to cost approximately $35 million.
The LNG installation project on Daniel K. Inouye was completed in the third quarter of 2023 at a total cost of approximately $47 million. LNG installation work on Kaimana Hila is currently scheduled to begin during the second quarter of 2024, and the total cost is expected to be approximately $47 million.
In 2022, the Company continued to advance many of its diversity, equity and inclusion efforts. This includes continuing its efforts to analyze pay among various employee groups to confirm pay equity across the Company. ​ 11 Table of Contents As part of its overall DE&I strategy, Matson continues to focus on developing and promoting diverse individuals into leadership positions.
This included continuing its efforts to analyze pay among various employee groups to confirm pay equity across the Company. ​ As part of its overall DE&I strategy, Matson continues to focus on developing and promoting equal employment opportunities, particularly for leadership positions.
The CLX+ service primarily uses chartered vessels and operates weekly from Ningbo and Shanghai, China where they are loaded with cargo to be discharged primarily at Long Beach, California, calling at an SSAT-operated terminal. ​ Eastbound cargo from China to Long Beach, California consists mainly of garments, e-commerce related goods, consumer electronics, footwear and other merchandise. ​ Guam Service: Matson’s Guam service provides weekly carriage between the U.S.
The CLX+ service primarily uses chartered vessels and operates weekly from Ningbo and Shanghai, China where they are loaded with cargo to be discharged primarily at Long Beach, California, calling at an SSAT-operated terminal.
These trainings were completed by more than 1,100 employees during the past year. ​ The composition of Matson’s domestic shoreside workforce by gender and race in 2022 is as follows (data for seagoing personnel is not available to the Company): ​ ​ The composition of management positions within Matson’s domestic shoreside workforce by gender and race in 2022 is as follows (data for seagoing personnel is not available to the Company): ​ ​ “Minority” in these graphs refers to any employee who self-identifies as such under the categories established by the Equal Employment Opportunity Commission. ​ ​ Total Rewards Programs: ​ Matson provides a highly competitive and balanced total rewards program designed to attract, retain and motivate its employees .
Specifically, the training focused on building awareness of types of bias, using objective criteria when assessing performance and increasing the number of performance feedback opportunities. ​ The composition of Matson’s domestic shoreside workforce by gender and diversity status in 2023 is as follows (data for seagoing personnel is not available to the Company): ​ ​ The composition of management positions within Matson’s domestic shoreside workforce by gender and diversity status in 2023 is as follows (data for seagoing personnel is not available to the Company): ​ ​ “Diverse” in these graphs refers to any employee who self-identifies as a minority under the categories established by the Equal Employment Opportunity Commission. ​ Total Rewards Programs: ​ Matson provides a highly competitive and balanced total rewards program designed to attract, retain and motivate its employees .
Environmental Protection Agency regulations have 5 Table of Contents reduced the fuel oil maximum sulfur content in designated ECAs.
Since January 1, 2015, U.S. Environmental Protection Agency regulations have reduced the fuel oil maximum sulfur content in designated ECAs.
Matson and SSAT are also members of the Pacific Maritime Association (“PMA”), which on behalf of its members negotiates collective bargaining agreements with the International Longshore and Warehouse Union (“ILWU”) on the U.S. West Coast. The PMA/ILWU collective bargaining agreements cover substantially all U.S. West Coast longshore labor.
As shown in the chart below, Matson’s shoreside and seagoing union employees comprise 70 percent of Matson’s global workforce. ​ ​ Matson and SSAT are also members of the Pacific Maritime Association (“PMA”), which on behalf of its members negotiates collective bargaining agreements with the International Longshore and Warehouse Union (“ILWU”) on the U.S. West Coast.
Cargo destined to Guam mainly includes dry containers of mixed commodities, refrigerated containers of food, beverages, retail merchandise, building materials, and household goods. ​ Japan Service: Matson’s Japan service provides carriage to the port of Naha in Okinawa, Japan, as part of its CLX service.
Matson also provides weekly connecting service from Guam to the Commonwealth of the Northern Mariana Islands. Cargo destined to Guam mainly includes dry containers of mixed commodities, refrigerated containers of food, beverages, retail merchandise, building materials, and household goods. ​ Japan Service: Matson’s Japan service provides weekly carriage between the U.S.
As shown in the chart below, union employees comprise 70 percent of Matson’s global workforce. ​ ​ Matson has collective bargaining agreements with these unions that expire at various dates in the future, including as early as 2023.
Matson has collective bargaining agreements with these unions that expire at various dates in the future.
For ships that achieve a D rating for three consecutive years or an E rating in a single year, a corrective action plan needs to be developed as part of the vessels’ Ship Energy Efficiency Management Plan (“SEEMP”) and approved.
CII measures how efficiently a ship transports goods, and uses actual CO 2 emissions to determine an annual rating. For ships that are not in compliance, a corrective action plan needs to be developed as part of the vessels’ Ship Energy Efficiency Management Plan (“SEEMP”) and approved. The Company believes that its vessels are currently in compliance with these regulations.
Bureau of Labor Statistics, traditionally the shipping industry’s workforce has been predominately represented by white males. While Matson’s workforce is representative of many of the communities where it operates, the Company has taken steps to do more to change the status quo within the Company and industry.
While Matson’s workforce is representative of many of the communities where it operates, the Company has taken steps intended to help improve diversity within the Company and industry and to promote inclusivity for all. In 2023, the Company continued to advance many of its diversity, equity and inclusion efforts.
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West Coast and Guam, as part of its CLX service. Matson also provides weekly connecting service from Guam to the Commonwealth of the Northern Mariana Islands.
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On February 18, 2024, the Company renamed the CLX+ service to Matson Asia Express (“MAX”). ​ Eastbound cargo from China to Long Beach, California consists mainly of garments, e-commerce related goods, consumer electronics, footwear and other merchandise. ​ Guam Service: Matson’s Guam service provides weekly carriage between the U.S. West Coast and Guam, as part of its CLX service.
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(6) Foreign-flagged vessel. (7) Lift-on/lift-off barge equipped with a crane.
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(6) Foreign-flagged vessel. (7) Vessel installed with exhaust gas cleaning systems (commonly referred to as “scrubbers”).
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Beginning with a company’s first annual, intermediate or renewal survey for an International Air Pollution Prevention (“IAPP”) certificate on or after January 1, 2023, all containerships with more than 10,000 dead weight tons will be required to meet specified Energy Efficiency Existing Ship Index (“EEXI”) levels.
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To this end, in 2023 the Company awarded seventeen scholarships to diverse, high-achieving students at higher education institutions and maritime academies. 11 Table of Contents ​ In support of the rollout of a new performance management program, Matson’s DE&I training efforts in 2023 emphasized recognizing and minimizing bias when reviewing employee performance, with over 260 managers participating in the program.
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CII measures how efficiently a ship transports goods, and uses actual CO 2 emissions to determine an annual rating from A to E.
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The PMA/ILWU collective bargaining agreements cover substantially all U.S. West Coast longshore labor. ILWU employees employed by SSAT are not included in the chart above. ​ Multi-employer Pension and Post-retirement Plans: ​ Matson contributes to several multi-employer pension and post-retirement plans.
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For a discussion on the Company’s planned future capital expenditures to comply with these regulations, see Part II, Item 7 of this Form 10-K.
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Freight rates are impacted mainly by macro supply and demand variables. ​ Matson’s typical seasonal trends have been impacted by the global pandemic which resulted in elevated levels of demand experienced in our Ocean Transportation services during the second half of 2020 throughout 2021 and in the first half of 2022.
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Under Section 27 of the Jones 8 Table of Contents Act, the carriage of cargo between the U.S.
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However, the weakening economic conditions in the U.S., relatively high inflation and the impact of higher interest rates on household discretionary income may affect the demand for consumer goods, which could impact Matson’s Logistics businesses in 2023. ​ ​ C.
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To this end, in 2022 the Company established and awarded sixteen scholarships to diverse, high-achieving students at higher education institutions and maritime academies. ​ Matson has also worked to enhance employees’ understanding and perspective on working with diverse groups of individuals.
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In 2022, the Company provided two DE&I trainings to deepen employees’ understanding and appreciation for ways to improve interactions with others and promote more inclusive relationships.

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Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

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Biggest changeActual or threatened public health crises may have a number of adverse impacts, including volatility in the global economy, impacts to the Company’s customers’ business operations, reduced tourism in the markets the Company serves, potential restrictions on employee travel, or significant disruptions in ocean-borne transportation of goods, logistics demand and supply chain activity, caused by a variety of factors such as quarantines, factory and office closures, port closures, or other government-imposed restrictions, any of which could adversely impact the Company’s business, financial condition, operating results and cash flows. ​ The Company’s significant operating agreements and leases could be replaced on less favorable terms or may not be replaced on acceptable terms. ​ The significant operating agreements and leases entered into by the Company in its businesses, including those related to terminals, chartered vessels and warehouses as well as those with SSAT, expire at various points in time and may not be replaced with comparable assets with the specifications necessary for the Company’s or SSAT’s businesses or could be replaced on less favorable terms, thereby adversely affecting the Company’s future financial position, results of operations and cash flows. ​ The Company may face unexpected dry-docking or repair costs for its vessels. ​ The Company routinely engage shipyards to dry-dock its vessels for regulatory compliance and to provide repair and maintenance.
Biggest changeActual or threatened public health crises may have a number of adverse impacts, including volatility in the global economy, impacts to the Company’s customers’ business operations, reduced tourism in the markets the Company serves, potential restrictions on employee travel, or significant disruptions in ocean-borne transportation of goods, logistics demand and supply chain activity, caused by a variety of factors such as quarantines, factory and office closures, port closures, or other government-imposed restrictions, any of which could adversely impact the Company’s business, financial condition, operating results and cash flows.
If the Jones Act were repealed, substantially amended or waived and, as a consequence, competitors were to enter the Hawaii or Alaska markets with lower operating costs by utilizing their ability to acquire and operate foreign-flagged and foreign-built vessels and/or being exempt from other U.S. regulations, the Company’s business would be adversely affected.
If the Jones Act were to be repealed, substantially amended or waived and, as a consequence, competitors were to enter the Hawaii or Alaska markets with lower operating costs by utilizing their ability to acquire and operate foreign-flagged and foreign-built vessels and/or being exempt from other U.S. regulations, the Company’s business would be adversely affected.
Within the U.S., a weakening of economic drivers in Hawaii, Alaska and Guam, which include tourism, military spending, construction, personal income growth and employment, the weakening of consumer confidence, market demand, and the economy in the U.S.
Within the U.S., a weakening of economic drivers in Hawaii, Alaska and Guam, which include tourism, military spending, construction, personal income growth and employment, the weakening of consumer confidence, market demand, the economy in the U.S.
The Company’s vessels and their cargoes are also subject to operating risks such as mechanical failure, collisions and human error. ​ The occurrence of any of these events may result in damage to or loss of terminals, port facilities and infrastructure, vessels, containers, cargo and other equipment, increased maintenance expense, loss of life or physical injury to its employees or people, pollution, or the slow down or suspension of operations.
The Company’s vessels and their cargoes, terminals and other facilities are also subject to operating risks such as mechanical failure, collisions and human error. ​ The occurrence of any of these events may result in damage to or loss of terminals, port facilities and infrastructure, vessels, containers, cargo and other equipment, increased maintenance expense, loss of life or physical injury to its employees or people, pollution, or the slow down or suspension of operations.
Any vessel-generated pollution from incidents in U.S. waters within three nautical miles, and in some cases, within the 200-mile exclusive economic zone, for example, could expose us to such fines or penalties. ​ The Company is subject to, and may in the future be subject to, disputes, legal or other proceedings, and government inquiries or investigations that could have an adverse effect on the Company. ​ The nature of the Company’s business exposes it to the potential for disputes, legal or other proceedings, and government inquiries or investigations relating to antitrust matters, labor and employment matters, personal injury and property damage, environmental, shore power and other matters, as discussed in the other risk factors disclosed in this section or in other Company filings with the SEC.
Any vessel-generated pollution from incidents in U.S. waters within three nautical miles, and in some cases, within the 200-mile exclusive economic zone, for example, could expose us to such fines or penalties. ​ The Company is subject to, and may in the future be subject to, disputes, legal or other proceedings, and government inquiries or investigations that could have an adverse effect on the Company. ​ The nature of the Company’s business exposes it to the potential for disputes, legal or other proceedings, and government inquiries or investigations relating to antitrust matters, labor and employment matters, personal injury, loss of life and property damage, environmental, shore power and other matters, as discussed in the other risk factors disclosed in this section or in other Company filings with the SEC.
If maritime cabotage services were included in the General Agreement on Trade in Services, the United States-Mexico-Canada Agreement, or other international trade agreements, or if the restrictions contained in the Jones Act were otherwise altered, the shipping of cargo between covered U.S. ports could be opened to foreign-flagged or foreign-built vessels and could have other adverse impacts to our business. ​ The Company’s business would be adversely affected if the Company were determined not to be a U.S. citizen under the Jones Act. ​ Certain provisions of the Company’s articles of incorporation protect the Company’s ability to maintain its status as a U.S. citizen under the Jones Act.
If maritime cabotage services were included in the General Agreement on Trade in Services, the United States-Mexico-Canada Agreement, or other international trade agreements, or if the restrictions contained in the Jones Act were otherwise altered, the shipping of cargo between covered U.S. ports could be opened to foreign-flagged or foreign-built vessels, which could have other adverse impacts to our business. ​ The Company’s business would be adversely affected if the Company were determined not to be a U.S. citizen under the Jones Act. ​ Certain provisions of the Company’s articles of incorporation protect the Company’s ability to maintain its status as a U.S. citizen under the Jones Act.
In the Company’s Ocean Transportation and Logistics services segments, the Company utilizes fuel-related surcharges, although increases in the fuel-related surcharge may adversely affect the Company’s competitive position and may not correspond exactly with the timing of increases in fuel expense.
In the Company’s Ocean Transportation and Logistics services segments, the Company utilizes fuel-related surcharges, although increases in the fuel-related surcharges may adversely affect the Company’s competitive position and may not correspond exactly with the timing of increases in fuel expense.
If the Company’s information technology and communications systems experience reliability issues, integration or compatibility concerns or if the Company’s third-party providers are unable to perform effectively or experience disruptions or failures, there could be an adverse impact on the availability and functioning of the Company’s information technology and communications systems, which could lead to business disruption or inefficiencies, reputational harm or loss of customers. ​ 21 Table of Contents The Company’s information technology systems have in the past and may in the future be exposed to cybersecurity risks and other disruptions that could impair the Company’s ability to operate and adversely affect its business. ​ The shipping industry is a more frequent target of cyber attacks than some other industries because of the essential nature of these services.
If the Company’s information technology and communications systems experience reliability issues, integration or compatibility concerns or if the Company’s third-party providers are unable to perform effectively or experience disruptions, cyber attacks or failures, there could be an adverse impact on the availability and functioning of the Company’s information technology and communications systems, which could lead to business disruption or inefficiencies, reputational harm or loss of customers. ​ The Company’s information technology systems have in the past and may in the future be exposed to cybersecurity risks and other disruptions that could impair the Company’s ability to operate and adversely affect its business. ​ The shipping industry is a more frequent target of cyber attacks than some other industries because of the essential nature of these services.
Acts of war or terrorism may also be directed at the Company’s shipping operations or may cause the U.S. government to take control of Matson’s vessels for military operation.
Acts of war or terrorism may also be directed at the Company’s shipping operations or may cause the U.S. government to take control of Matson’s vessels for military operations.
In addition, if any of the multi-employer plans to which the Company contributes fails to satisfy the minimum funding requirements, the Internal Revenue Service will impose certain penalties and taxes on the Company and other contributing employers. ​ Risks Related to Legal, Regulatory and Compliance Matters ​ As an ocean transportation and logistics services company, the Company is subject to numerous safety, environmental, and other laws and regulations that impact the Company’s operations, are costly to comply with and expose us to liability. ​ The Company, including its vessels and terminals, is subject to numerous federal, state and local laws and regulations, including those related to safety, cabotage, equipment standards and government rates.
In addition, if any of the multi-employer plans to which the Company contributes fails to satisfy the minimum funding requirements, the Internal Revenue Service will impose certain penalties and taxes on the Company and other contributing employers. ​ 23 Table of Contents Risks Related to Legal, Regulatory and Compliance Matters ​ As an ocean transportation and logistics services company, the Company is subject to numerous safety, environmental, and other laws and regulations that impact the Company’s operations, are costly to comply with and expose us to liability. ​ The Company, including its vessels and terminals, is subject to numerous federal, state and local laws and regulations, including those related to safety, cabotage, equipment standards and government rates.
Disruptions to the credit markets as a result of macroeconomic, geopolitical, or financial market developments could increase the Company’s cost of capital and limit the Company’s access to capital. ​ Failure to comply with certain restrictive financial covenants contained in the Company’s credit facilities could preclude the payment of dividends, impose restrictions on the Company’s business segments, capital resources or other activities or otherwise adversely affect the Company. ​ The Company’s credit facilities contain certain restrictive financial covenants, the most restrictive of which include a maximum ratio of debt to earnings before interest, taxes, depreciation and amortization (“EBITDA”), a minimum ratio of EBITDA to interest expense, certain prohibitions on additional priority debt and the maintenance of minimum shareholders’ equity.
Disruptions to the credit markets as a result of macroeconomic, geopolitical, or financial market developments could increase the Company’s cost of capital and limit the Company’s access to capital. ​ 22 Table of Contents Failure to comply with certain restrictive financial covenants contained in the Company’s credit facilities could preclude the payment of dividends, impose restrictions on the Company’s business segments, capital resources or other activities or otherwise adversely affect the Company. ​ The Company’s credit facilities contain certain restrictive financial covenants, the most restrictive of which include a maximum ratio of debt to earnings before interest, taxes, depreciation and amortization (“EBITDA”), a minimum ratio of EBITDA to interest expense, certain prohibitions on additional priority debt and the maintenance of minimum shareholders’ equity.
ITEM 1A. RISK FACTORS ​ The following material factors, events and uncertainties may make an investment in the Company speculative or risky and should be reviewed carefully.
ITEM 1A. RISK FACTORS ​ The following material risks, events and uncertainties may make an investment in the Company speculative or risky and should be reviewed carefully.
If these disputes develop into proceedings, these proceedings, individually or collectively, could involve or result in significant expenditures or losses by the Company, or result in significant changes to Matson’s tariffs, rates, rules and practices in dealing with its customers. ​ The Company may continue to be exposed to risks and unknown liabilities related to the Horizon acquisition. ​ The Company acquired Horizon subject to all of the liabilities and obligations of its non-Hawaii business, including any remaining liabilities and obligations associated with its Puerto Rico operations, which Horizon ceased during the first quarter of 2015.
If these disputes develop into proceedings, these proceedings, individually or collectively, could involve or result in significant expenditures or losses by the Company, or result in significant changes to Matson’s tariffs, rates, rules and practices in dealing with its customers. ​ 24 Table of Contents The Company may continue to be exposed to risks and unknown liabilities related to the Horizon acquisition. ​ The Company acquired Horizon subject to all of the liabilities and obligations of its non-Hawaii business, including any remaining liabilities and obligations associated with its Puerto Rico operations, which Horizon ceased during the first quarter of 2015.
As a result of these risks, the Company may not fully realize the benefits of these investments. ​ The Company’s vessel construction agreements with Philly Shipyard subject the Company to risks. ​ On November 1, 2022, MatNav and Philly Shipyard entered into vessel construction agreements pursuant to which Philly Shipyard will construct three new 3,600-TEU Aloha Class dual-fuel capable containerships, with expected delivery dates during the fourth quarter of 2026 and subsequent deliveries currently expected in the second and fourth quarters of 2027.
As a result of these risks, the Company may not fully realize the benefits of these investments. ​ 16 Table of Contents The Company’s vessel construction agreements with Philly Shipyard subject the Company to risks. ​ On November 1, 2022, MatNav and Philly Shipyard entered into vessel construction agreements pursuant to which Philly Shipyard will construct three new 3,600-TEU Aloha Class dual-fuel capable containerships, with expected delivery dates during the fourth quarter of 2026 and subsequent deliveries currently expected in the second and fourth quarters of 2027.
Federal Reserve’s interest rate increases in 2022, which could adversely affect the Company’s cash flow and results of operations.
Federal Reserve’s interest rate increases in 2022 and 2023, which could adversely affect the Company’s cash flow and results of operations.
The Company may pay a premium for an acquisition, resulting in goodwill that may later be determined to be impaired. ​ Risks Related to Employees ​ Work stoppages or other labor disruptions caused by the Company’s unionized workers and other workers or their unions in related industries could adversely affect the Company’s operations. ​ A significant portion of Matson’s employees are covered by collective bargaining agreements.
The Company may pay a premium for an acquisition, resulting in goodwill that may later be determined to be impaired. ​ 20 Table of Contents Risks Related to Employees ​ Work stoppages or other labor disruptions caused by the Company’s unionized workers and other workers or their unions in related industries could adversely affect the Company’s operations. ​ A significant portion of Matson’s employees are covered by collective bargaining agreements.
There is no guarantee that the Company will be able to secure LNG via bunker barges or other methods on the U.S. West Coast or in China in sufficient amounts to fuel its vessels or at a reasonable cost, as increased demand for LNG could decrease available supply of LNG and 16 Table of Contents increase prices.
There is no guarantee that the Company will be able to secure LNG via bunker barges or other methods on the U.S. West Coast or in China in sufficient amounts to fuel its vessels or at a reasonable cost, as increased demand for LNG could decrease available supply of LNG and increase prices.
The Company’s initiatives and goals may not be favored by certain stakeholders and could impact the attraction and retention of investors, customers and employees, as well as the Company’s willingness to do business with other companies or customers or their willingness to do business with us.
The Company’s initiatives and goals may not be favored by certain stakeholders and could impact the attraction and retention of investors, customers and employees, as well as the Company’s willingness to do business with other companies or customers or their willingness to do business with the Company.
The Company also operates a number of older active and reserve vessels that may require more frequent and extensive maintenance. The cost of repairs is difficult to predict with certainty and can be substantial.
The Company also operates a number of older active and reserve vessels that may require more frequent and extensive maintenance. The cost of repairs is difficult to predict and can be substantial.
The entry of a new competitor or the addition of new vessels or capacity by existing competition on any of the Company’s routes could result in a significant increase in available shipping capacity that could have an adverse effect on the Company’s volumes and rates. ​ The loss of or damage to key customer or agent relationships may adversely affect the Company’s business. ​ The Company’s businesses are dependent on their relationships with customers and agents, and derive a significant portion of their revenues from the Company’s largest customers.
The entry of a new competitor or the addition of new vessels or capacity by existing competitors on any of the Company’s routes could result in a significant increase in available shipping capacity that could have an adverse effect on the Company’s volumes and rates. ​ The loss of or damage to key customer relationships may adversely affect the Company’s business. ​ The Company’s businesses are dependent on their relationships with customers and derive a significant portion of their revenues from the Company’s largest customers.
Employees and Labor Relations of Part I of this Annual Report. ​ The Company has been adversely affected by actions taken by employees of the Company or other companies in related industries against efforts by management of the Company or other companies to control labor costs, restrain wage or benefit increases or modify work practices.
Employees and Labor Relations of this Annual Report. ​ Previously, the Company has been adversely affected by actions taken by employees of the Company or other companies in related industries against efforts by management of the Company or other companies to control labor costs, restrain wage or benefit increases or modify work practices.
The EPA also requires vessels to obtain coverage under a general permit and to comply with inspection, monitoring, discharge, recordkeeping and reporting requirements. ​ These laws and regulations provide for substantial fines, as well as criminal and civil penalties, in the event of any violations of, or non-compliance with, their requirements (including any waivers, permits or recordkeeping and other reporting requirements).
The EPA also requires vessels to obtain coverage under a general permit and to comply with inspection, monitoring, discharge, recordkeeping and reporting requirements. ​ These laws and regulations provide for substantial fines, sanctions, as well as criminal and civil penalties and significant environmental liabilities, in the event of any violations of, or non-compliance with, their requirements (including any waivers, permits or recordkeeping and other reporting requirements).
There is no assurance that the systems upgrades or new systems will meet the Company’s current or future business needs, or that they will operate as designed. ​ The Company’s information technology systems also rely on third-party service providers for access to the Internet, satellite-based communications systems, the electric grid, database storage facilities and telecommunications providers.
There is no assurance that the systems upgrades or new systems will meet the Company’s current or future business needs, or that they will operate as designed. 21 Table of Contents ​ The Company’s information technology systems also rely on third-party service providers for access to the Internet, satellite-based communications systems, the electric grid, database storage facilities and telecommunications providers.
The Company’s continued ability to borrow under its credit facilities is subject to compliance with these financial and other non-financial covenants. ​ 22 Table of Contents The Company’s effective income tax rate may vary. ​ Various internal and external factors may have favorable or unfavorable material or immaterial effects on the Company’s effective income tax rate and, therefore, impact the Company’s net income and earnings per share.
The Company’s continued ability to borrow under its credit facilities is subject to compliance with these financial and other non-financial covenants. ​ The Company’s effective income tax rate may vary. ​ Various internal and external factors may have favorable or unfavorable material or immaterial effects on the Company’s effective income tax rate and, therefore, impact the Company’s net income and earnings per share.
Finally, the Company retains all risk of loss that exceeds the limits of its insurance. ​ 17 Table of Contents The Company may be impacted by transitional and other risks arising from climate change. ​ The Company may be impacted by transitional and other risks arising from climate change and the global shift toward a low carbon future.
Finally, the Company retains all risk of loss that exceeds the limits of its insurance. ​ The Company may be impacted by transitional and other risks arising from climate change. ​ The Company may be impacted by transitional and other risks arising from climate change and the global shift toward a low carbon future.
Even if suitable candidates are identified, such transactions may result in difficulties in assimilating acquired assets or companies, and may result in the diversion of the Company’s capital and its management attention from other business issues and opportunities.
Even if suitable candidates are identified, such transactions may result in regulatory scrutiny, litigation and difficulties in assimilating acquired assets or companies, and may result in the diversion of the Company’s capital and its management attention from other business issues and opportunities.
Any changes in applicable laws and regulations, including their enforcement, interpretation or implementation that results in more stringent requirements 23 Table of Contents than currently anticipated, as well as any new laws and regulations that are adopted could impose significant additional costs and limitations on the Company’s ability to operate.
Any changes in applicable laws and regulations, including their enforcement, interpretation or implementation that results in more stringent requirements than currently anticipated, as well as any new laws and regulations that are adopted could impose significant additional costs and limitations on the Company’s ability to operate.
Furthermore, the Company relies on the services of third parties, including SSAT, which employ persons covered by collective bargaining agreements. For additional information on collective bargaining agreements with unions, see Item 1.C.
Furthermore, the Company relies on the services of third parties, including SSAT, which employ persons covered by collective bargaining agreements. For additional information on collective bargaining agreements with unions, see Part I, Item 1, Subheading C.
If the Company cannot secure sufficient transportation equipment, capacity or services from these third parties at reasonable prices or rates to meet its or its customers’ needs and schedules, customers may seek to have their 15 Table of Contents transportation and logistics needs met by others on a temporary or permanent basis.
If the Company cannot reliably secure sufficient transportation equipment, capacity or services from these third parties at reasonable prices or rates to meet its or its customers’ needs and schedules, customers may seek to have their transportation and logistics needs met by others on a temporary or permanent basis.
If these outcomes were to occur, the Company’s business, results of operations, cash flows and financial condition could be adversely affected. ​ The Company faces risks related to actual or threatened health epidemics, pandemics or other major health crises, such as the COVID-19 pandemic, which could significantly disrupt the Company’s business. ​ The Company’s business could be impacted adversely by the effects of public health epidemics, pandemics or other major heath crises (which the Company refers to collectively as public health crises).
If these outcomes were to occur, the Company’s business, results of operations, cash flows and financial condition could be adversely affected. ​ The Company faces risks related to actual or threatened health epidemics, outbreaks of disease, pandemics or other major health crises, which could significantly disrupt the Company’s business. ​ The Company’s business could be impacted adversely by outbreaks of disease, the effects of public health epidemics, pandemics or other major heath crises (which the Company refers to collectively as public health crises).
West Coast ports. ​ The Company is subject to risks associated with conducting business in foreign shipping markets. ​ Matson’s China, Alaska export, Micronesia, Japan and South Pacific services are subject to risks associated with conducting business in a foreign shipping market, which include: ​ ● Challenges associated with operating in foreign countries and developing relationships with foreign companies, business associates and governments, including as a result of cultural differences; ● Difficulties in staffing and managing foreign operations, including dynamic employment and immigration laws; ● The Company’s ability to comply with U.S. and foreign legal and regulatory restrictions, including anti-corruption laws such as the Foreign Corrupt Practices Act; ● Not having continued access to existing port facilities or feeder vessels; ● The Company’s ability to manage changes in the cost of goods or currency exchange rate fluctuations; ● Geopolitical and economic instability; ● Economic downturns or slower growth in the local markets or geographic areas in which we conduct business; and ● Dynamics involving U.S. trade relations with other countries, including the imposition of or uncertainty associated with the level of tariffs, non-tariff trade barriers or sanctions, including the use of export control restrictions and sanctions against certain countries and individual companies, or other governmental actions. ​ The Company’s terminals in Hawaii and Alaska require modernization. ​ The Company has completed the first phase of renovating and modernizing its Sand Island terminal in Honolulu Harbor.
West Coast ports. ​ The Company is subject to risks associated with conducting business in foreign shipping markets. ​ Matson’s China, Alaska export, Micronesia, Japan and South Pacific services are subject to risks associated with conducting business in a foreign shipping market, which include: ​ ● Challenges associated with operating in foreign countries and developing relationships with foreign companies, business associates and governments, including as a result of cultural differences; ● Difficulties in staffing and managing foreign operations, including dynamic employment and immigration laws; 19 Table of Contents ● The Company’s ability to comply with U.S. and foreign legal and regulatory restrictions, including anti-corruption laws such as the Foreign Corrupt Practices Act; ● Not having continued access to existing port facilities or feeder vessels; ● The Company’s ability to manage changes in the cost of goods or currency exchange rate fluctuations; ● Geopolitical and economic instability; ● Economic downturns or slower growth in the local markets or geographic areas in which we conduct business; ● Dynamics involving U.S. trade relations with other countries, including the imposition of or uncertainty associated with the level of tariffs, non-tariff trade barriers or sanctions, including the use of export control restrictions and sanctions against certain countries and individual companies, or other governmental actions, and responsive actions taken by the Company’s customers, including with respect to their supply chains; and ● Customer preferences to diversify supply chains away from, or otherwise limit sourcing from, certain countries. ​ The Company’s terminals in Hawaii and Alaska require modernization. ​ The Company has completed the first phase of renovating and modernizing its Sand Island terminal in Honolulu Harbor.
Once completed, operation of these vessels may be slowed to the extent they present new maintenance requirements or unforeseen complications. ​ Use of LNG fuel may not result in anticipated GHG emission reductions, and the Company’s investments in LNG-ready vessels, whether on their own or in addition to other Company initiatives, may be insufficient to meet the Company’s previously announced GHG emission reduction goals on a timely basis or at all.
Once completed, operation of these vessels may be slowed to the extent they present new maintenance requirements or unforeseen complications. ​ The Company’s investments in LNG-ready vessels, whether on their own or in addition to other Company initiatives, may be insufficient to meet the Company’s previously announced GHG emission reduction goals on a timely basis or at all.
These evolving expectations may impact the Company’s reputation, business and attractiveness as an investment, employer or business partner to the extent the Company – including its initiatives, goals and reporting – meets or is perceived to meet those expectations, including as a result of any third-party rating or assessment.
These evolving regulations and expectations may impact the Company’s reputation, business and attractiveness as an investment, employer or business partner to the extent the Company – including its initiatives, goals and reporting – fails to satisfy or is perceived to fail to satisfy those regulations and expectations, including as a result of any third-party rating or assessment.
In the past, some of the Company’s employees worked from home or remotely, increasing the Company’s dependence on its information technology systems and third-party providers during those times.
Some of the Company’s employees work from home or remotely, increasing the Company’s dependence on its information technology systems and third-party providers during those times.
The occurrence of these or the events and uncertainties described below may, in ways the Company may not be able to accurately predict, recognize or control, adversely affect the Company’s business, financial condition, operating results, cash flows, liquidity, demand, revenue, growth, prospects, reputation or stock price.
The occurrence of these or the risks and uncertainties described below may, in ways the Company may not be able to accurately predict, recognize or mitigate, adversely affect the Company’s business, competitive environment, strategy, financial condition, operating results, cash flows, liquidity, demand, revenue, growth, prospects, reputation or stock price.
These tensions have resulted in the implementation of tariffs, non-tariff trade barriers and sanctions, including the use of export control restrictions and sanctions against certain countries and individual companies, which have, and may continue to have, an adverse economic impact in the markets in which the Company operates. ​ These adverse economic conditions may also impact customers’ business levels and needs.
These tensions have resulted in the implementation of tariffs, non-tariff trade barriers and sanctions, including the use of export control restrictions and sanctions against certain countries and individual companies, which have, and may continue to have, an adverse economic impact in the markets in which the Company operates and could result in a reduced demand for the Company’s services. ​ These adverse economic conditions may also impact the Company’s customers’ business levels and needs.
In addition, the Company is subject to environmental laws and regulations, including those relating to air quality initiatives at port locations; air emissions; use of shore power at California ports; wastewater discharges; management of storm water; the transportation, handling and disposal of solid and hazardous materials, oil and oil related products, hazardous substances and wastes; the investigation and remediation of contamination; health, safety and the protection of the environment and natural resources; and climate change, including any regulations, mandates or restrictions related to GHG emissions, such as a “cap and trade” system of allowances and credits, and energy use.
In addition, the Company is subject to environmental laws and regulations, including those relating to air quality initiatives at port locations; air emissions; use of shore power at California ports; wastewater discharges; management of storm water; the storage, transportation, handling, emission and disposal of solid and hazardous materials, oil and oil related products, hazardous substances and wastes; the investigation and remediation of contamination and liability for damages to the environment; health, safety and the protection of the environment and natural resources; and climate change, including any regulations, mandates or restrictions related to GHG emissions, such as a potential carbon tax, and energy use.
Efforts to achieve the Company’s initiatives and goals face numerous risks and may be unsuccessful, result in additional costs or experience delays, and as a result may have an adverse impact on the Company, including its brand, reputation and stock price. ​ The Company may not be timely or successful in completing its fleet upgrade initiatives, which may result in significant costs and adversely impact the Company’s ability to meet its climate goals. ​ The Company’s four new Aloha and Kanaloa class vessels include dual fuel capable engines that can run on low sulfur fuel oil or LNG.
Efforts to achieve or accurately track the Company’s initiatives and goals face numerous risks and may be untimely, be unsuccessful, result in additional costs or experience delays, and as a result may have an adverse impact on the Company, including its brand, reputation, financial performance and growth and stock price, and may expose the Company to increased scrutiny from the investment community as well as enforcement authorities. ​ The Company may not be timely or successful in completing its fleet upgrade initiatives, which may result in significant costs and adversely impact the Company’s ability to meet its climate goals. ​ The Company’s four new Aloha and Kanaloa class vessels include dual fuel capable engines that can run on low sulfur fuel oil or LNG.
In some cases, however, Horizon, as the original contracting party, may remain primarily responsible for such assumed Hawaii liabilities and obligations. The Company may incur losses related to such assumed Hawaii liabilities and obligations. ​ ​
In some cases, however, Horizon, as the original contracting party, may remain primarily responsible for such assumed Hawaii liabilities and obligations. The Company may incur losses related to such assumed Hawaii liabilities and obligations. ​ ​ ITEM 1B. UNRESOLVED STAFF COMMENTS ​ None. ​ ​
In addition, the terminal modernization programs may not result in improved operational productivity or generate expected returns. ​ 19 Table of Contents Heightened security measures, war, actual or threatened terrorist attacks, efforts to combat terrorism and other acts of violence may adversely impact the Company’s operations and profitability. ​ War, including the war in Ukraine, terrorist attacks and other acts of violence may cause consumer confidence and spending to decrease, or may affect the ability or willingness of tourists to travel to Hawaii, Guam or Alaska, thereby adversely affecting those economies and the Company.
In addition, the terminal modernization programs may not result in improved operational productivity or improved resiliency to severe weather events, extreme seismic events or other natural disasters or generate expected returns. ​ Heightened security measures, war, actual or threatened terrorist attacks, efforts to combat terrorism and other acts of violence may adversely impact the Company’s operations and profitability. ​ War, terrorist attacks and other acts of violence may cause consumer confidence and spending to decrease, or may affect the ability or willingness of tourists to travel to Hawaii, Guam or Alaska, thereby adversely affecting those economies and the Company.
All forward-looking statements made by the Company or on the Company’s behalf are qualified by the risks described below. ​ Risks Related to the Jones Act ​ Repeal, substantial amendment, or waiver of the Jones Act or its application would have an adverse effect on the Company’s business. ​ The Merchant Marine Act of 1920 (commonly referred to as the Jones Act) regulates all interstate and intrastate marine commerce within the U.S.
All forward-looking statements made in this Form 10-K are qualified by the risks and uncertainties described below. ​ 13 Table of Contents Risks Related to the Jones Act ​ Repeal, substantial amendment, or waiver of the Jones Act or changes in its application would have an adverse effect on the Company’s business. ​ The Merchant Marine Act of 1920 (commonly referred to as the Jones Act) regulates all interstate and intrastate marine commerce within the U.S.
Organizational, industrial and governmental shifts in operations as well as legal and regulatory requirements to reduce or eliminate emissions and/or increase efficiency may require the Company to increase expenditures, make changes to existing infrastructure, vessels and equipment and shift its business model.
Organizational, industrial and governmental shifts in operations as well as legal and regulatory requirements to reduce or eliminate emissions and/or increase efficiency may require the Company to increase expenditures, make changes to existing infrastructure, vessels and equipment, limit the speed at which the Company’s vessels are permitted to travel, and make other changes to its business model.
Significant delays in the delivery of the new vessels could limit our ability to replace aging vessels in the Alaska service without substantial modifications, which could also have an adverse impact on our business plans, financial condition and results of operations. ​ The Company’s operations are susceptible to weather, natural disasters, maritime accidents, spill events and other physical and operating risks, including those arising from climate change. ​ As a maritime transportation company, the Company’s operations are vulnerable to disruption as a result of weather, natural disasters and other climate-driven events, such as rising temperatures, sea levels and storm severity, bad weather at sea, hurricanes, typhoons, tsunamis, floods and earthquakes, as well as a maritime accident, oil or other spill, or other environmental mishap.
Significant delays in the delivery of the new vessels could limit our ability to replace aging vessels in the Alaska service without substantial modifications and delay the Company’s ability to upsize the CLX service, which could also have an adverse impact on our business plans, financial condition and results of operations. ​ The Company’s operations are susceptible to weather, natural disasters, maritime accidents, spill events and other physical and operating risks, including those arising from climate change. ​ As a maritime transportation company, the Company’s operations are vulnerable to delay, disruptions and loss of life and property as a result of weather, natural disasters and other climate-driven events, such as rising temperatures and heat waves, rising sea levels, bad weather at sea (including increased storm severity), lightning strikes, wildfires, lava flows, hurricanes, typhoons, tsunamis, droughts, windstorms, floods and earthquakes.
These collective bargaining agreements are being negotiated, but if such agreements are not renewed, Matson and SSAT could be subject to future slow-downs, strikes, lock-outs or other disruptions that may adversely impact Matson’s or SSAT’s operations. ​ In addition, any slow-downs, strikes, lock-outs or other disruptions, including limits on the availability of labor through trade union hiring halls, have had and in the future, particularly in years when collective bargaining agreements are being negotiated, could have an adverse impact on Matson’s or SSAT’s operations. ​ 20 Table of Contents Loss of the Company’s key personnel or failure to adequately manage human capital could adversely affect its business. ​ The Company’s future success will depend, in significant part, upon the continued services of its key personnel and skilled employees, including its senior management, as well as key personnel at its joint venture partners.
In the past, strikes, slow-downs and disruptions have occurred as a result of the failure of Matson or other companies in its industry to negotiate collective bargaining agreements with such unions successfully. ​ In addition, any slow-downs, strikes, lock-outs or other disruptions, including limits on the availability of labor through trade union hiring halls, have had and in the future, particularly in years when collective bargaining agreements are being negotiated, could have an adverse impact on Matson’s or SSAT’s operations. ​ Loss of the Company’s key personnel or failure to adequately manage human capital could adversely affect its business. ​ The Company’s future success depends, in significant part, upon the continued services of its key personnel and skilled employees, including its senior management, as well as key personnel at its joint venture partners.
In addition, overcapacity in the global or transpacific ocean transportation markets, a change in the cost of goods or currency exchange rates, pressure from U.S. or foreign governments, imposition of tariffs 14 Table of Contents and uncertainties regarding tariff rates or a change in international trade policies could adversely affect freight volumes and rates in the Company’s CLX and CLX+ services. ​ Fluctuations in the price of oil could further impact the Alaskan economy, which in turn could impact the Company’s business.
In addition, overcapacity in the global or transpacific ocean transportation markets, a change in the cost of goods or currency exchange rates, pressure from U.S. or foreign governments, imposition of tariffs and uncertainties regarding tariff rates or a change in international trade policies could adversely affect freight volumes and rates in the Company’s China services.
The Company’s business faces the material risks set forth below; however, these risk factors do not identify all risks the Company faces, and additional risks or uncertainties that are currently unknown or are not currently believed to be material may occur or become material.
The Company faces the material risks set forth below; however, the description below does not purport to include all risks the Company faces, and additional risks or uncertainties that are currently unknown or are not currently believed to be material may occur or become material.
Such an event could result in the Company’s ineligibility to engage in coastwise trade and the imposition of substantial penalties against it, including seizure or forfeiture of its vessels. ​ Risks Related to the Company’s Operations ​ Changes in macroeconomic conditions, geopolitical developments, or governmental policies, including from the COVID-19 pandemic, have affected and could in the future affect the Company. ​ The transportation industry in which the Company operates has been impacted by fluctuations, volatility, downturns, inflation, recessions and other economic shifts or market instabilities, as well as the development of and changes in governmental policies and relations and geopolitical developments, across the jurisdictions in which it operates.
Such an event could result in the Company’s ineligibility to engage in coastwise trade and the imposition of substantial penalties against the Company, including seizure or forfeiture of its vessels. ​ Risks Related to the Company’s Operations ​ Changes in macroeconomic conditions, geopolitical developments, or governmental policies, including due to outbreaks of disease, have affected and could in the future affect the Company. ​ The transportation industry in which the Company operates has been and could in the future be impacted by macroeconomic fluctuations, volatility, downturns, inflation, recessions, rising interest rates and other economic shifts or market instabilities, including due to outbreaks of disease and instability in financial institutions, as well as the development of and changes in governmental policies, relations, priorities and budgeting constraints, and uncertainties resulting from the U.S. political environment, including increased political polarization and the potential for political gridlock (such as the prospect of a shutdown of the U.S. federal government), and geopolitical developments across the jurisdictions in which it operates.
Mainland, inflation, rising interest rates, recessionary fears and the effect of a change in the strength of the U.S. dollar against other foreign currencies may reduce the demand for goods, adversely affecting inland and ocean transportation volumes or rates.
Mainland, inflation, rising interest rates, recessionary fears, increased political polarization and the potential for political gridlock (such as the prospect of a shutdown of the U.S. federal government), and the effect of a change in the strength of the U.S. dollar against other foreign currencies has reduced and could in the future reduce the demand for goods, adversely affecting inland and ocean transportation volumes or rates.
These initiatives may be hindered by substantial delays and long lead times for necessary equipment, including as a result of ongoing supply chain congestion, other residual impacts from the COVID-19 pandemic, increased demand across the industry for LNG installations and conversions, and new ship-building.
The Company anticipates making significant capital expenditures in connection with these fleet initiatives. These initiatives may be hindered by substantial delays and long lead times for necessary equipment, including as a result of ongoing supply chain congestion, increased demand across the industry for LNG installations and conversions, and new ship-building.
If this were to occur, the Company’s business, results of operations and financial condition could be adversely affected. ​ An increase in fuel prices, changes in the Company’s ability to collect fuel-related surcharges, and/or the cost or limited availability of required fuels on the U.S.
If this were to occur, the Company’s business, results of operations and financial condition could be adversely affected. ​ An increase in fuel prices, changes in the Company’s ability to collect fuel-related surcharges, and/or the cost or limited availability of required fuels may adversely affect the Company’s profits. ​ Fuel, including LNG fuels and biofuels, is a significant operating expense for the Company’s Ocean Transportation business.
The shipping industry is competitive with limited barriers to entry, especially in international tradelanes. Ocean carriers can shift vessels in and out of tradelanes or charter vessels to manage capacity and meet customer demands.
The shipping industry is competitive with limited barriers to entry, especially in international tradelanes. Ocean carriers can shift vessels in and out of tradelanes or charter vessels to manage capacity and meet customer demands. The Company also competes with air freight carriers some of which are able to offer more attractive schedules and services, or to increase capacity.
In addition, the time when a vessel is out of service for maintenance is determined by a number of factors, including regulatory deadlines, market conditions, shipyard availability and customer requirements, and accordingly, the length of time that a vessel may be out of service may be longer than anticipated, which could adversely affect the Company’s business, financial condition, results of operations and cash flows. ​ 18 Table of Contents The Company is involved in a joint venture and is subject to risks associated with joint venture relationships. ​ The Company is involved in a terminal joint venture with SSAT (and through SSAT, other joint ventures at various U.S.
In addition, the time when a vessel is out of service for maintenance is determined by a number of factors, including regulatory deadlines, market conditions, shipyard availability, shipyard location, availability of employees and repairmen, and customer requirements, and accordingly, the length of time that a vessel may be out of service may be longer than anticipated, which could adversely affect the Company’s business, financial condition, results of operations and cash flows.
Despite the Company’s continuous efforts to make investments in the Company’s information technology systems and system-wide data security program, the implementation of security measures to protect the Company’s data and infrastructure against breaches and other cyber threats, and the Company’s use of internal processes and controls designed to protect the security and availability of the Company’s systems, the Company has in the past experienced and may in the future experience cybersecurity incidents, such as computer viruses, hacking, malware, denial of service attacks, cyber terrorism, ransomware, circumvention of security systems, malfeasance, breaches due to employee error, natural disasters, telecommunications failure, or other catastrophic events at the Company’s facilities, aboard its vessels or at third-party locations. ​ Any failure, breach or unauthorized access to the Company’s systems or those of third parties on which the Company relies could result in the loss of confidential, sensitive or proprietary information, interruptions in its service or production or otherwise impact the Company’s ability to conduct business operations, and could result in potential reductions in revenue and profits, damage to its reputation or liability. ​ Risks Related to Financial Matters ​ A deterioration of the Company’s credit profile, disruptions of the credit markets or higher interest rates could restrict its ability to access the debt capital markets or increase the cost of debt. ​ Deterioration in the Company’s credit profile may have an adverse effect on the Company’s ability to access the private or public debt markets and also may increase its borrowing costs.
The Company’s practices, policies and other efforts, including as described in Part I, Item 1C of this Annual Report on Form 10-K, may not be sufficient to prevent, detect or remediate all cybersecurity risks or other disruptions, and the Company and its service providers have in the past experienced and may in the future experience cybersecurity incidents, disruptions, threats and vulnerabilities such as malware (including computer viruses and ransomware), software bugs, denial-of-service (“DoS”) attacks, phishing, spoofing, identity-based attacks, code injection attacks, cyber terrorism, sabotage, circumvention of security systems (whether physical or virtual), malfeasance, breaches due to employee error, natural disasters, accidents, power disruptions or loss, telecommunications failure, unauthorized access or other catastrophic events or failures at the Company’s facilities, aboard its vessels or at third-party locations. ​ Any failure, breach or unauthorized access to the Company’s systems or those of third parties on which the Company relies could result in the loss of confidential, sensitive or proprietary information, interruptions in its service or production or otherwise impact the Company’s ability to conduct business operations, and could result in potential reductions in revenue and profits, damage to its reputation or liability. ​ Risks Related to Financial Matters ​ A deterioration of the Company’s credit profile, disruptions of the credit markets or higher interest rates could restrict its ability to access the debt capital markets or increase the cost of debt. ​ Deterioration in the Company’s credit profile may have an adverse effect on the Company’s ability to access the private or public debt markets and also may increase its borrowing costs.
West Coast may adversely affect the Company’s profits. ​ Fuel is a significant operating expense for the Company’s Ocean Transportation business. The price and supply of fuel are unpredictable and fluctuate based on events beyond the Company’s control, including impacts from global macroeconomic conditions and geopolitical events.
The price and supply of fuel are unpredictable and fluctuate based on events beyond the Company’s control, including impacts from global macroeconomic conditions and geopolitical events. Increases in the price of fuel may adversely affect the Company’s results of operations.
Increases in the price of fuel may adversely affect the Company’s results of operations. Increases in fuel costs also can lead to increases in other expenses, such as energy costs and costs to purchase outside transportation services.
Any such increases also can lead to increases in other expenses, such as energy costs and costs to purchase outside transportation services.
These disclosures are aspirational and based on standards and frameworks for presenting and measuring progress that are not harmonized and are still developing, assumptions that may change, and disclosure controls and procedures that continue to evolve.
These disclosures are aspirational and based on standards and frameworks for presenting and measuring progress that are not harmonized and are still developing, assumptions that may change, disclosure controls and procedures that continue to evolve, and with respect to our GHG emissions targets, dependent in part on the industry’s successful and timely development of alternative fuels and technologies.
The Company has announced plans to install tanks, piping and cryogenic equipment on Daniel K. Inouye and Kaimana Hila , and re-engine Manukai to operate on LNG. In addition, the Company has announced plans to construct three new LNG-ready Aloha Class vessels. The Company anticipates making significant capital expenditures in connection with these fleet initiatives.
The Company has completed the installation of tanks, piping and cryogenic equipment on Daniel K. Inouye to operate on LNG; begun re-engining Manukai ; and announced plans for LNG installations on Kaimana Hila in 2024. In addition, the Company has announced plans to construct three new LNG-ready Aloha Class vessels.
The adoption and expansion of ESG-related legislation and regulation have also resulted and may again result in increased capital expenditures and compliance, operational and other costs to the Company. ​ The Company’s public disclosures on its climate, sustainability, human capital and other ESG initiatives include its goals or expectations with respect to those matters, including GHG emission reduction targets.
Compliance with such rules could require significant effort and resources and result in changes to the Company’s current GHG emission reduction goals. ​ The Company’s public disclosures on its climate, sustainability, human capital and other initiatives include its goals or expectations with respect to those matters, including GHG emission reduction targets.
Significant additional upgrades and projects remain. The Company is also continuing discussions with state and local authorities regarding a port modernization program for the Port of Alaska. Significant upgrades to the terminal and port facilities are needed to improve operational safety and efficiency, accommodate modern shipping operations, and improve resiliency.
However, significant upgrades remain, including projects to improve resiliency, including to risks due to severe weather events, natural disasters, sea level rise and climate- change related risks. The Company is continuing discussions with state and local authorities regarding a port modernization program for the Port of Alaska.
These events can expose the Company to reputational harm and liability for resulting damages and possible penalties that, pursuant to typical maritime industry policies, it must pay and then seek reimbursement from its insurer. Affected vessels may also be removed from service and thus would be unavailable for income-generating activity.
Further, the Company may be unable to find space at a suitable dry-docking facility, the vessels may be forced to wait for space or be towed to a different facility, all of which could result in additional expenses and delays, and may adversely affect the Company’s business. ​ These events can also expose the Company to reputational harm and liability for resulting damages, including for loss of life and property, and possible penalties that, pursuant to typical maritime industry policies, it must pay and then seek reimbursement from its insurer.
In addition, compliance with new climate change requirements or regulations such as the IMO’s requirements related to EEXI and CII may create schedule disruptions and could require Matson’s fleet to slow down if efficiency improvements or transitions to alternative fuels together are not enough to reduce GHG emissions sufficiently, thus impacting Matson’s expedited business model and competitive advantage.
The likelihood of these risks is compounded by uncertainties regarding the reliability of renewable energy sources as well as any increased frequency of extreme weather events that may disrupt the generation or transmission of electricity. ​ In addition, compliance with new climate change requirements or regulations such as the IMO’s requirements related to EEXI and CII, may create schedule disruptions and could require Matson’s fleet to slow down if efficiency improvements or transitions to alternative fuels together are not enough to reduce GHG emissions sufficiently, thus impacting Matson’s expedited business model and competitive advantage. ​ New environmental requirements for vessel performance and operation could also require the Company to accelerate the building of new vessels, increase the construction costs for new vessels and equipment to accommodate even newer technology as it emerges while today’s technology becomes obsolete, initiate unexpected retrofit projects for existing vessels, retire older vessels earlier than expected, or render reserve vessels unusable.
Climate change has increased and may continue to increase the frequency, severity and uncertainty of such events. Such events interfere with the Company’s ability to provide on-time scheduled service, resulting in increased expenses and potential loss of business associated with such events.
Changing macroeconomic and geopolitical conditions, including geopolitical conflict, may also result increased attacks on vessels, piracy or terrorism. ​ Such events could interfere with the Company’s ability to provide on-time scheduled service, require evacuation of personnel or stoppage of services or impact the Company’s customer’s operations, resulting in increased expenses and potential loss of business associated with such events.
This, in turn, could adversely affect transportation volumes or rates in Alaska and adversely impact the Company’s Ocean Transportation business and Span Alaska’s freight forwarding business, particularly given the Alaskan economy’s dependence on this port for ocean cargo. ​ The Company’s casualty and liability insurance policies are generally subject to large retentions and deductibles and may not cover all losses the Company may incur.
This, in turn, could adversely affect transportation volumes or rates in Alaska and adversely impact the Company’s Ocean Transportation business and Span Alaska’s freight forwarding business, particularly given the Alaskan economy’s dependence on this port for ocean cargo. ​ There is no assurance that our efforts to mitigate the impact of these risks, including from severe weather or other climate-driven events on our operations, will be effective.
Changes in the Company’s ability to collect fuel-related surcharges, including recovery of all or most fuel-related expenses, also may adversely affect its results of operations. ​ Evolving stakeholder expectations related to environmental, social and governance (“ESG”) matters exposes the Company to heightened scrutiny, additional costs, operational challenges and a number of risks. ​ Investors, advisory firms, employees, customers, suppliers, governments and other stakeholders are increasingly focused on, and establishing expectations for, ESG matters and related corporate practices, disclosures and initiatives.
In addition, advances in fuel technology could require Matson to incur significant capital costs to utilize any such technologies (including, for example, efforts to accelerate building of new vessels, retrofit existing vessels, retire 15 Table of Contents vessels early or make reserve vessels unusable) and Matson may be unable to equip its vessels with these technologies on a timely basis, if at all. ​ Evolving regulations and stakeholder expectations related to sustainability matters exposes the Company to heightened scrutiny, additional costs, operational challenges and a number of risks. ​ The SEC and other regulators, investors, advisory firms, employees, customers, suppliers, governments and other stakeholders are increasingly focused on and have established regulations and expectations related to sustainability matters and related corporate practices, disclosures and initiatives.
For example, the Company cannot terminate leases early for chartered vessels in the CLX+ service absent a breach by vessel owners. ​ The Company’s operations may be further impacted if its employees, including mariners aboard our vessels, are otherwise restricted from or unable to perform their duties, the Company’s or SSAT’s terminals are temporarily closed, or there are outbreaks aboard the Company’s vessels that cause the Company to miss port calls, due to a COVID-19 outbreak.
For instance, during the height of the COVID-19 pandemic, the Company’s operations faced risks from employees potentially being restricted from or unable to perform their duties, the Company’s or SSAT’s terminals potentially being temporarily closed, or potential outbreaks aboard the Company’s vessels that could cause the Company to miss port calls.
Additional or unforeseen effects from COVID-19, including resurgences or mutations of the virus and the actions taken in response to the virus, may give rise to additional risks or instigate or amplify the other risks described throughout these Risk Factors. ​ The shipping industry is competitive, and the Company has been impacted by new or increased competition. ​ The Company may face new competition by established or start-up shipping operators that enter the Company’s markets.
Additionally, fluctuations in the price of oil could further impact the Alaskan economy, which in turn could impact the Company’s business. ​ 14 Table of Contents The shipping industry is competitive, and the Company has been and may continue to be impacted by new or increased competition. ​ The Company has faced and may continue to face new competition by established or start-up shipping operators that enter into the Company’s markets.
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In addition, the global macroeconomic effects of the pandemic and related impacts on the Company’s customers’ business operations, including financial difficulties or bankruptcies, may persist for an indefinite period, even as the pandemic subsides. ​ As the COVID-19 pandemic subsides, supply and demand trends normalize, and supply chain congestion eases, the high volumes and rates the Company previously experienced in its China service have declined, but the Company cannot predict the size and duration of such decline.
Added
Changes in the Company’s ability to collect fuel-related surcharges, including recovery of all or most fuel-related expenses, also may adversely affect its results of operations. ​ The development of alternative fuels (such as low- or carbon-neutral fuels), including the necessary infrastructure and technology to utilize such fuels, is still in early experimental stages.
Removed
These declines have reduced and are expected to continue to reduce revenues, but certain fixed costs remain.
Added
There is significant uncertainty as to when, if at all, these alternative fuels will become commercially available or viable, and whether Matson will be able to utilize or have access to these alternative fuels (or any such alternative fuels developed in the future) in a timely and cost- effective manner.
Removed
Some vessel dry-dockings could also be delayed or become more expensive if shipyards are unable to accommodate demand or obtain parts in a timely manner or if necessary personnel are not allowed to travel to the shipyards. ​ As the COVID-19 pandemic reaches endemic stages, the future impact on the Company’s business, financial condition, operating results or cash flows remains difficult to predict at this time.
Added
The adoption and expansion of related legislation and regulations have also resulted and may again result in increased capital expenditures and compliance, operational and other costs to the Company. For example, the state of California has adopted new climate change disclosure requirements.
Removed
The likelihood of these risks is compounded by uncertainties regarding the reliability of renewable energy sources as well as any increased frequency of extreme weather events that may disrupt the generation or transmission of electricity.
Added
The Company’s use of disclosure frameworks and standards, and the interpretation or application of those frameworks and standards, may change from time to time or differ from those of others. This may result in a lack of consistent or meaningful comparative data from period to period or between the Company and other companies in the same industry.
Removed
New environmental requirements for vessel performance and operation could also require the Company to accelerate the building of new vessels, increase the construction costs for new vessels and equipment to accommodate even newer technology as it emerges while today’s technology becomes obsolete, initiate unexpected retrofit projects for existing vessels, retire older vessels earlier than expected, or render reserve vessels unusable.
Added
Climate change has increased and may continue to increase the frequency, severity and uncertainty of such events. For example, sea level rise could potentially impact coastal and other low-lying areas, cause erosion of shorelines, higher water tables and increased flooding, which could damage the Company’s vessels, terminals or facilities.
Removed
In the past, strikes, slow-downs and disruptions have occurred as a result of the failure of Matson or other companies in its industry to negotiate collective bargaining agreements with such unions successfully. ​ Matson and SSAT are members of the PMA, which on behalf of its members negotiates collective bargaining agreements with the ILWU on the U.S. West Coast.
Added
In addition, the Company’s customers and the island communities it serves throughout the Pacific are particularly vulnerable to rising sea levels and severe storms, which may drive inhabitants away from these regions and reduce demand for the Company’s services in the affected areas and adversely impact our business. ​ The Company’s operations are also vulnerable to risks related to the operation of ocean- going vessels, including risks of potential marine accidents, or disasters, including grounding, fires, explosions, collisions, mechanical failures, human error, maintenance issues, latent defects, oil or other spill or environmental accidents, whale strikes, war, terrorism and piracy, lost or damaged cargo, delays, injury and loss of life.
Removed
The PMA/ILWU collective bargaining agreements that cover substantially all U.S. West Coast longshore labor expired on July 1, 2022.
Added
These risks could be exacerbated by severe weather or other climate-driven events.

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Item 2. Properties

Properties — owned and leased real estate

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Biggest changeMaterial terminal facilities used by the Company’s Ocean Transportation segment include the following locations: ​ ​ ​ ​ ​ Terminal Location Acreage Honolulu, Hawaii 105 Anchorage, Alaska 38 Dutch Harbor, Alaska 18 Kodiak, Alaska 6 Tacoma, Washington ​ 15 ​ Polaris Point, Guam ​ 30 ​ The Company’s other primary terminal facilities located at the ports of Oakland and Long Beach, California, and Tacoma, Washington are leased by SSAT. ​ Other material facilities used by both of the Company’s segments include the following: ​ ​ ​ ​ ​ ​ ​ Other Material Facilities Description of Facility Square Footage Pooler, Georgia Warehouse 710,844 ​ Oakland, California Warehouse 406,463 ​ Pooler, Georgia Warehouse 324,832 ​ Oakland, California Warehouse 132,000 ​ Anchorage, Alaska ​ Office / Cross-dock ​ 54,000 ​ Auburn, Washington Office / Cross-dock 51,250 ​ ​ ​
Biggest changeMaterial terminal facilities used by the Company’s Ocean Transportation segment include the following: ​ ​ ​ ​ ​ Terminal Location Acreage Honolulu, Hawaii 105 Anchorage, Alaska 38 Dutch Harbor, Alaska 18 Kodiak, Alaska 6 Tacoma, Washington ​ 15 ​ Polaris Point, Guam ​ 30 ​ The Company’s other primary terminal facilities located at the ports of Oakland and Long Beach, California, and Tacoma, Washington are leased by SSAT. ​ Other material facilities used by the Company’s Logistics segment include the following: ​ ​ ​ ​ ​ ​ ​ Other Material Facilities Description of Facility Square Footage Leased facilities: ​ ​ ​ ​ ​ Pooler, Georgia Warehouse 710,844 ​ Oakland, California Warehouse 406,463 ​ Pooler, Georgia Warehouse 324,832 ​ Oakland, California Warehouse 132,000 ​ Auburn, Washington Office / Cross-dock 51,250 ​ Owned facilities: ​ ​ ​ ​ ​ Anchorage, Alaska ​ Office / Cross-dock ​ 54,000 ​ Fairbanks, Alaska ​ Office / Cross-dock ​ 25,350 ​ ​ ​ ​

Item 3. Legal Proceedings

Legal Proceedings — active lawsuits and investigations

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Biggest changeAlthough potential penalties for 2020, 2021 and 2022 violations could, in the aggregate, reasonably be expected to exceed $1 million, they are not expected to be material to the Company’s financial condition, results of operations, or cash flows. ​ 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. ​ ​ ITEM 4.
Biggest changeThe Company believes that such threshold is reasonably designed to result in disclosure of environmental proceedings that are material to its business or financial condition. ​ 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. ​ ​ ​ ITEM 4.
Except as described below, the Company believes that based on all information available to it, the Company is currently in compliance, in all material respects, with applicable environmental laws and regulations. ​ In accordance with SEC rules, with respect to administrative or judicial proceedings involving the environment, the Company has determined that it will disclose any such proceeding if it reasonably believes such proceeding will result in monetary sanctions, exclusive of interest and costs, at or in excess of $1 million.
The Company believes that based on all information currently available to it, the Company is currently in compliance, in all material respects, with applicable environmental laws and regulations. ​ In accordance with SEC rules, with respect to administrative or judicial proceedings involving the environment, the Company has determined that it will disclose any such proceeding if it reasonably believes such proceeding will result in monetary sanctions, exclusive of interest and costs, at or in excess of $1 million.
MINE SAFETY DISCLOSURES ​ Not Applicable. ​ 25 Table of Contents PART II ​
MINE SAFETY DISCLOSURES ​ Not applicable. ​ 27 Table of Contents PART II ​
ITEM 3. LEGAL PROCEEDINGS ​ Environmental Matters: The Company’s Ocean Transportation segment has certain risks that could result in expenditures for environmental remediation.
ITEM 3. LEGAL PROCEEDINGS ​ Environmental Matters: The Company faces certain risks that could result in material expenditures related to environmental remediation.
Removed
The Company believes that such threshold is reasonably designed to result in disclosure of environmental proceedings that are material to its business or financial condition. ​ On November 10, 2021, the California Air Resources Board (“CARB”) issued a Notice of Violation (the “NOV”) to Matson for alleged violations of the Airborne Toxic Control Measure for Auxiliary Diesel Engines Operated on Ocean-Going Vessels At-Berth in a California Port pursuant to California Code of Regulations, title 17, section 93118.3.
Removed
CARB regulations require that a company’s fleet plug into shore power for at least 80 percent of visits at California ports and reduce auxiliary engine power generation by at least 80 percent. The NOV alleges that Matson’s fleet did not meet the 80 percent thresholds during visits to the Port of Long Beach in 2020.
Removed
The violations were alleged to have been incurred by chartered vessels in the CLX+ service. These chartered vessels were not outfitted with alternative maritime power (“AMP”) capability which would have allowed them to plug into the shore power grid and shut down the vessel diesel generators when at dock.
Removed
The Company has presented mitigating factors for consideration in settlement discussions with CARB as well as plans to achieve compliance.

Item 4. Mine Safety Disclosures

Mine Safety Disclosures — required of mining issuers

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Biggest changeItem 4. ​ Mine Safety Disclosures 25 ​ ​ ​ ​ ​ ​ PART II ​ ​ ​ ​ ​ Item 5. ​ Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities 26 Item 6. ​ Removed and Reserved 27 Item 7. ​ Management’s Discussion and Analysis of Financial Condition and Results of Operations 28 Item 7A. ​ Quantitative and Qualitative Disclosures About Market Risk 38 Item 8. ​ Financial Statements and Supplementary Data 40
Biggest changeItem 4. ​ Mine Safety Disclosures 27 ​ ​ ​ ​ ​ ​ PART II ​ ​ ​ ​ ​ Item 5. ​ Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities 28 Item 6. ​ Removed and Reserved 29 Item 7. ​ Management’s Discussion and Analysis of Financial Condition and Results of Operations 30 Item 7A. ​ Quantitative and Qualitative Disclosures About Market Risk 41 Item 8. ​ Financial Statements and Supplementary Data 42

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

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Biggest changeThe graph is a historical representation of past performance only and is not necessarily indicative of future performance. ​ * $100 invested on December 31, 2017 in stock or index, including reinvestment of dividends. ​ ​ Trading volume averaged 431,336 shares a day in 2022, compared with 291,899 shares a day in 2021 and 234,930 shares a day in 2020, as reported by the New York Stock Exchange. ​ ​ 26 Table of Contents Dividends: Dividends declared per share of common stock by the Company for each fiscal quarter during 2022, 2021 and 2020 were as follows: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Dividends Declared ​ 2022 ​ 2021 ​ 2020 First Quarter ​ $ 0.30 $ 0.23 $ 0.22 ​ Second Quarter ​ $ 0.30 $ 0.23 $ 0.22 ​ Third Quarter ​ $ 0.31 $ 0.30 ​ $ 0.23 ​ Fourth Quarter ​ $ 0.31 $ 0.30 ​ $ 0.23 ​ Total ​ $ 1.22 $ 1.06 ​ $ 0.90 ​ ​ Matson’s Board of Directors also declared a cash dividend of $0.31 per share for the first quarter 2023, payable on March 2, 2023 to shareholders of record on February 9, 2023.
Biggest changeThe graph is a historical representation of past performance only and is not necessarily indicative of future performance. ​ The graph above represents $100 invested on December 31, 2018 in the Company’s stock or the indicated index, including reinvestment of dividends. ​ Trading volume averaged 274,339 shares a day in 2023, compared with 431,336 shares a day in 2022 and 291,899 shares a day in 2021, as reported by the New York Stock Exchange. ​ 28 Table of Contents ​ Dividends: Dividends per share of common stock declared by the Company for each fiscal quarter during 2023, 2022 and 2021 were as follows: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Dividends Declared ​ 2023 ​ 2022 ​ 2021 First Quarter ​ $ 0.31 $ 0.30 $ 0.23 ​ Second Quarter ​ $ 0.31 $ 0.30 $ 0.23 ​ Third Quarter ​ $ 0.32 $ 0.31 ​ $ 0.30 ​ Fourth Quarter ​ $ 0.32 $ 0.31 ​ $ 0.30 ​ Total ​ $ 1.26 $ 1.22 ​ $ 1.06 ​ ​ Matson’s Board of Directors also declared a cash dividend of $0.32 per share for the first quarter 2024, payable on March 7, 2024 to shareholders of record on February 8, 2024.
As of February 17, 2023, there were 2,021 shareholders of record of Matson common stock. ​ Stockholder Return Performance Graph and Trading Information: The following information in this Item 5 shall not be deemed filed for purposes of Section 18 of the Securities Exchange Act of 1934, nor shall it be deemed incorporated by reference in any filing under the Securities Act of 1933. ​ The cumulative total return listed below assumed an initial investment of $100 and reinvestment of dividends at each fiscal end and measures the performance of this investment as of the last trading day in the month of December for each of the five years ended December 31, 2022.
As of February 16, 2024, there were 1,904 shareholders of record of Matson common stock. ​ Stockholder Return Performance Graph and Trading Information: The following information in this Item 5 shall not be deemed filed for purposes of Section 18 of the Securities Exchange Act of 1934, nor shall it be deemed incorporated by reference in any filing under the Securities Act of 1933. ​ The cumulative total return listed below assumed an initial investment of $100 and reinvestment of dividends at each fiscal end and measures the performance of this investment as of the last trading day in the month of December for each of the five years ended December 31, 2023.
Shares will be repurchased in the open market from time to time, and may be made pursuant to a trading plan in accordance with Rule 10b5-1 of the Security Exchange Act of 1934. ​ ​ ​
Shares may be repurchased in the open market from time to time, and may be repurchased pursuant to a trading plan in accordance with Rule 10b5-1 of the Securities Exchange Act of 1934. ​ ​
Although Matson expects to continue paying quarterly cash dividends on its common stock, the declaration and payment of dividends are subject to the discretion of the Board of Directors and will depend upon Matson’s financial condition, results of operations, cash requirements and other factors deemed relevant by the Board of Directors. ​ Share Repurchases: The following is a summary of Matson common stock repurchased by the Company during the three months ended December 31, 2022: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Total Number of Maximum Number ​ ​ ​ ​ ​ ​ ​ Shares Purchased ​ of Shares that May ​ ​ Total Number of ​ ​ ​ ​ as Part of Publicly ​ Be Purchased ​ ​ Shares ​ Average Price ​ Announced Plans or ​ Under the Plans or Period ​ Purchased ​ Paid Per Share ​ Programs (1) ​ Programs October 1 – 31, 2022 768,161 $ 68.80 ​ 768,161 ​ 2,291,571 ​ November 1 – 30, 2022 406,200 ​ $ 66.85 406,200 ​ 1,885,371 ​ December 1 – 31, 2022 352,000 ​ $ 62.05 352,000 ​ 1,533,371 ​ Total 1,526,361 ​ $ 66.72 1,526,361 ​ ​ ​ (1) On June 24, 2021, the Company announced that Matson’s Board of Directors had approved a share repurchase program of up to 3.0 million shares of common stock from August 3, 2021 through August 2, 2024.
Although Matson expects to continue paying quarterly cash dividends on its common stock, the declaration and payment of dividends are subject to the discretion of the Board of Directors and depends upon Matson’s financial condition, results of operations, cash requirements and other factors deemed relevant by the Board of Directors. ​ Share Repurchases: The following is a summary of common stock repurchased by the Company during the three months ended December 31, 2023: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Total Number of Maximum Number ​ ​ ​ ​ ​ ​ ​ Shares Purchased ​ of Shares that May ​ ​ Total Number of ​ ​ ​ ​ as Part of Publicly ​ Yet Be Purchased ​ ​ Shares ​ Average Price ​ Announced Plans or ​ Under the Plans or Period ​ Purchased ​ Paid Per Share ​ Programs (1) ​ Programs October 1 – 31, 2023 131,744 $ 89.55 ​ 131,744 ​ 2,829,883 ​ November 1 – 30, 2023 216,664 ​ $ 93.19 216,664 ​ 2,613,219 ​ December 1 – 31, 2023 151,031 ​ $ 103.04 151,031 ​ 2,462,188 ​ Total 499,439 ​ $ 95.21 499,439 ​ ​ ​ (1) On June 24, 2021, the Company announced that its Board of Directors had approved a share repurchase program of up to 3.0 million shares of common stock from August 3, 2021 through August 2, 2024.
Added
On April 27, 2023, the Company’s Board of Directors approved an addition of 3.0 million shares to the Company’s existing share repurchase program, for a total of 12.0 million shares of common stock approved under the program since it was established, and extended the program to December 31, 2025.

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

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Biggest changeThe information should be read in conjunction with Item 8, “Financial Statements and Supplementary Data.” All fiscal years include 52 weeks, except for the year ended December 31, 2021 which includes 53 weeks (a description of the Company’s fiscal year is included in Note 2 to the Consolidated Financial Statements in Item 8 of Part II below): ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ (In millions, except per share amounts) 2022 2021 2020 2019 2018 Operating Revenue: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Ocean Transportation ​ $ 3,544.6 ​ $ 3,132.8 ​ $ 1,853.9 ​ $ 1,666.6 ​ $ 1,641.3 ​ Logistics ​ 798.4 ​ 792.5 ​ 529.4 ​ 536.5 ​ 581.5 ​ Total Operating Revenue ​ $ 4,343.0 ​ $ 3,925.3 ​ $ 2,383.3 ​ $ 2,203.1 ​ $ 2,222.8 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Operating and Net Income: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Ocean Transportation (1) ​ $ 1,281.2 ​ $ 1,137.7 ​ $ 244.8 ​ $ 90.8 ​ $ 131.1 ​ Logistics ​ 72.4 ​ 49.8 ​ 35.5 ​ 38.3 ​ 32.7 ​ Total Operating Income ​ 1,353.6 ​ 1,187.5 ​ 280.3 ​ 129.1 ​ 163.8 ​ Interest income ​ ​ 8.2 ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ Interest expense ​ (18.0) ​ (22.6) ​ (27.4) ​ (22.5) ​ (18.7) ​ Other income (expense), net ​ 8.5 ​ 6.4 ​ 6.1 ​ 1.2 ​ 2.6 ​ Income before Taxes ​ 1,352.3 ​ 1,171.3 ​ 259.0 ​ 107.8 ​ 147.7 ​ Income taxes (2) ​ (288.4) ​ (243.9) ​ (65.9) ​ (25.1) ​ (38.7) ​ Net Income ​ $ 1,063.9 ​ $ 927.4 ​ $ 193.1 ​ $ 82.7 ​ $ 109.0 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Capital Expenditures: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Ocean Transportation ​ $ 190.9 ​ $ 322.4 ​ $ 190.0 ​ $ 294.5 ​ $ 385.4 ​ Logistics ​ 18.4 ​ 2.9 ​ 2.3 ​ 15.8 ​ 15.8 ​ Total Capital Expenditures ​ $ 209.3 ​ $ 325.3 ​ $ 192.3 ​ $ 310.3 ​ $ 401.2 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Depreciation and Amortization: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Ocean Transportation ​ $ 133.2 ​ $ 128.6 ​ $ 107.4 ​ $ 93.6 ​ $ 87.0 ​ Logistics ​ 8.1 ​ 7.3 ​ 7.5 ​ 6.8 ​ 7.4 ​ ​ ​ ​ 141.3 ​ ​ 135.9 ​ ​ 114.9 ​ ​ 100.4 ​ ​ 94.4 ​ Deferred Dry-docking Amortization — Ocean Transportation ​ ​ 24.9 ​ ​ 24.3 ​ ​ 25.1 ​ ​ 34.3 ​ ​ 37.4 ​ Total Depreciation and Amortization ​ $ 166.2 ​ $ 160.2 ​ $ 140.0 ​ $ 134.7 ​ $ 131.8 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Earnings Per Share in Net Income: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Basic ​ $ 27.28 ​ $ 21.67 ​ $ 4.48 ​ $ 1.93 ​ $ 2.55 ​ Diluted ​ $ 27.07 ​ $ 21.47 ​ $ 4.44 ​ $ 1.91 ​ $ 2.53 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Cash dividends per share declared ​ $ 1.22 ​ $ 1.06 ​ $ 0.90 ​ $ 0.86 ​ $ 0.82 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ As of December 31: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Cash and cash equivalents ​ $ 249.8 ​ $ 282.4 ​ $ 14.4 ​ $ 21.2 ​ $ 19.6 ​ Capital Construction Fund (3) ​ $ 518.2 ​ $ — ​ $ — ​ $ — ​ $ — ​ Total Debt (before deferred loan fees deduction) (4) ​ $ 517.5 ​ $ 629.0 ​ $ 760.1 ​ $ 958.4 ​ $ 856.4 ​ Total Shareholders' equity ​ $ 2,296.9 ​ $ 1,667.4 ​ $ 961.2 ​ $ 805.7 ​ $ 755.3 ​ Shares outstanding ​ 36.3 ​ 41.0 ​ 43.2 ​ 42.9 ​ 42.7 ​ (1) The Ocean Transportation segment includes $83.1 million, $56.3 million, $26.3 million, $20.8 million and $36.8 million of equity in income from the Company’s investment in SSAT for 2022, 2021, 2020, 2019 and 2018, respectively.
Biggest changeThe information should be read in conjunction with Item 8, “Financial Statements and Supplementary Data.” All fiscal years include 52 weeks, except for the year ended December 31, 2021 which includes 53 weeks (a description of the Company’s fiscal year is included in Note 2 to the Consolidated Financial Statements in Item 8 of Part II below): ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ (In millions, except per share amounts) 2023 2022 2021 2020 2019 Operating Revenue: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Ocean Transportation ​ $ 2,477.0 ​ $ 3,544.6 ​ $ 3,132.8 ​ $ 1,853.9 ​ $ 1,666.6 ​ Logistics ​ 617.6 ​ 798.4 ​ 792.5 ​ 529.4 ​ 536.5 ​ Total Operating Revenue ​ $ 3,094.6 ​ $ 4,343.0 ​ $ 3,925.3 ​ $ 2,383.3 ​ $ 2,203.1 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Operating and Net Income: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Ocean Transportation (1) ​ $ 294.8 ​ $ 1,281.2 ​ $ 1,137.7 ​ $ 244.8 ​ $ 90.8 ​ Logistics ​ 48.0 ​ 72.4 ​ 49.8 ​ 35.5 ​ 38.3 ​ Total Operating Income ​ 342.8 ​ 1,353.6 ​ 1,187.5 ​ 280.3 ​ 129.1 ​ Interest income ​ ​ 36.0 ​ ​ 8.2 ​ ​ — ​ ​ — ​ ​ — ​ Interest expense ​ (12.2) ​ (18.0) ​ (22.6) ​ (27.4) ​ (22.5) ​ Other income (expense), net ​ 6.4 ​ 8.5 ​ 6.4 ​ 6.1 ​ 1.2 ​ Income before Taxes ​ 373.0 ​ 1,352.3 ​ 1,171.3 ​ 259.0 ​ 107.8 ​ Income taxes (2) ​ (75.9) ​ (288.4) ​ (243.9) ​ (65.9) ​ (25.1) ​ Net Income ​ $ 297.1 ​ $ 1,063.9 ​ $ 927.4 ​ $ 193.1 ​ $ 82.7 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Capital Expenditures: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Ocean Transportation ​ $ 240.2 ​ $ 190.9 ​ $ 322.4 ​ $ 190.0 ​ $ 294.5 ​ Logistics ​ 8.2 ​ 18.4 ​ 2.9 ​ 2.3 ​ 15.8 ​ Total Capital Expenditures ​ $ 248.4 ​ $ 209.3 ​ $ 325.3 ​ $ 192.3 ​ $ 310.3 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Depreciation and Amortization: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Ocean Transportation ​ $ 132.8 ​ $ 133.2 ​ $ 128.6 ​ $ 107.4 ​ $ 93.6 ​ Logistics ​ 11.6 ​ 8.1 ​ 7.3 ​ 7.5 ​ 6.8 ​ ​ ​ ​ 144.4 ​ ​ 141.3 ​ ​ 135.9 ​ ​ 114.9 ​ ​ 100.4 ​ Deferred Dry-docking Amortization — Ocean Transportation ​ ​ 25.3 ​ ​ 24.9 ​ ​ 24.3 ​ ​ 25.1 ​ ​ 34.3 ​ Total Depreciation and Amortization ​ $ 169.7 ​ $ 166.2 ​ $ 160.2 ​ $ 140.0 ​ $ 134.7 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Earnings Per Share in Net Income: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Basic ​ $ 8.42 ​ $ 27.28 ​ $ 21.67 ​ $ 4.48 ​ $ 1.93 ​ Diluted ​ $ 8.32 ​ $ 27.07 ​ $ 21.47 ​ $ 4.44 ​ $ 1.91 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Cash dividends per share declared ​ $ 1.26 ​ $ 1.22 ​ $ 1.06 ​ $ 0.90 ​ $ 0.86 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ As of December 31: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Cash and cash equivalents ​ $ 134.0 ​ $ 249.8 ​ $ 282.4 ​ $ 14.4 ​ $ 21.2 ​ Capital Construction Fund (“CCF”) (3) ​ $ 599.4 ​ $ 518.2 ​ $ — ​ $ — ​ $ — ​ Total Debt (before deferred loan fees deduction) (4) ​ $ 440.6 ​ $ 517.5 ​ $ 629.0 ​ $ 760.1 ​ $ 958.4 ​ Total Shareholders’ equity ​ $ 2,400.7 ​ $ 2,296.9 ​ $ 1,667.4 ​ $ 961.2 ​ $ 805.7 ​ Shares outstanding ​ 34.4 ​ 36.3 ​ 41.0 ​ 43.2 ​ 42.9 ​ (1) The Ocean Transportation segment includes $2.2 million, $83.1 million, $56.3 million, $26.3 million and $20.8 million of equity in income from the Company’s investment in SSAT for 2023, 2022, 2021, 2020 and 2019, respectively.
The preparation of Consolidated Financial Statements in conformity with accounting principles generally accepted in the United States of America, upon which the Company’s Management Discussion and Analysis of Financial Condition and Results of Operations is based, requires that management exercise judgment when making accounting estimates about future events that may affect the amounts reported in the Consolidated Financial Statements and accompanying notes.
The preparation of Consolidated Financial Statements in conformity with accounting principles generally accepted in the United States of America, upon which the Company’s Management Discussion and Analysis of Financial Condition and Results of Operations is based, requires that management exercise judgment in making accounting estimates about future events that may affect the amounts reported in the Consolidated Financial Statements and accompanying notes.
Such forward-looking statements may be contained in, among other things, SEC filings such as Forms 10-K, 10-Q and 8-K, the Annual Report to Shareholders, press releases made by the Company, the Company’s Internet websites (including websites of its subsidiaries), and oral statements made by the officers of the Company.
Such forward-looking statements may be contained in, among other things, SEC filings such as Forms 10-K, 10-Q and 8-K, the Company’s Annual Report to Shareholders, the Company’s Sustainability Report, press releases made by the Company, the Company’s Internet websites (including websites of its subsidiaries), and oral statements made by officers of the Company.
Treasury Obligation Funds and classified as a long-term asset in the Company’s Consolidated Balance Sheets, as the Company intends to use qualified cash withdrawals from the CCF to fund long-term investments in the construction of new vessels.
Treasury Obligation Funds and is classified as a long-term asset in the Company’s Consolidated Balance Sheets, as the Company intends to use qualified cash withdrawals from the CCF to fund long-term investments in the construction of new vessels.
The decrease in interest expense was due to lower outstanding debt during the year ended December 31, 2022, compared to the prior year. ​ Other Income (Expense), net was $8.5 million for the year ended December 31, 2022, compared to $6.4 million in the prior year, and relates to the amortization of certain components of net periodic benefit costs or gains related to the Company’s pension and post-retirement plans.
The decrease in interest expense was due to lower outstanding debt during the year ended December 31, 2023, compared to the prior year. ​ Other Income (Expense), net was $6.4 million for the year ended December 31, 2023, compared to $8.5 million in the prior year, and relates to the amortization of certain components of net periodic benefit costs or gains related to the Company’s pension and post-retirement plans.
ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS ​ FORWARD-LOOKING STATEMENTS AND RISK FACTORS ​ The Company, from time to time, may make or may have made certain forward-looking statements, whether orally or in writing, such as forecasts and projections of the Company’s future performance or statements of management’s plans and objectives.
ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS ​ FORWARD-LOOKING STATEMENTS AND RISK FACTORS ​ The Company, from time to time, may make or may have made certain forward-looking statements, whether orally or in writing, such as, among others, forecasts or projections of the Company’s future performance or statements of management’s plans and objectives.
MD&A is provided as a supplement to the Consolidated Financial Statements and the accompanying notes to the Consolidated Financial Statements in Item 8 of Part II below, and should be read in conjunction with the Company’s Annual Reports on Form 10-K and other reports on Forms 10-Q and 8-K, and other publicly available information.
The MD&A is provided as a supplement to the Consolidated Financial Statements and the accompanying notes to the Consolidated Financial Statements in Item 8 of Part II below, and should be read in conjunction with the entirety of the Company’s Annual Report on Form 10-K and other reports on Forms 10-Q and 8-K, and other publicly available information.
These statements are “forward-looking” statements as that term is defined in the Private Securities Litigation Reform Act of 1995.
These statements are considered “forward-looking” statements as that term is defined in the Private Securities Litigation Reform Act of 1995.
The Company’s estimate of insurance related liabilities could change if management uses different assumptions or if 37 Table of Contents different conditions occur in future periods, however the Company does not expect any such change would have a material impact on the Company’s financial condition and results of operations. ​ Pension and Post-Retirement Plans: The estimation of the Company’s pension and post-retirement benefit expenses and liabilities requires the Company to make various assumptions.
The Company’s estimate of insurance related liabilities could change if management uses different assumptions or if different conditions occur in future periods, however the Company does not expect any such change would have a material impact on the Company’s financial condition and results of operations. ​ Pension and Post-Retirement Plans: The estimation of the Company’s pension and post-retirement benefit expenses and liabilities requires the Company to make various assumptions.
These estimates and judgments are applied in the calculation of taxable income, tax credits, tax benefits and deductions, and in the calculation of certain deferred tax assets and liabilities, which arise from differences in the timing of recognition of revenue, costs and expenses for tax purposes.
These estimates and judgments are applied in the calculation of taxable income, tax credits, tax benefits, CCF and other tax deductions, and in the calculation of certain deferred tax assets and liabilities, which arise from differences in the timing of recognition of revenue, costs and expenses for tax purposes.
Working capital is primarily impacted by the amount of net cash provided by operating activities, the amount of capital expenditures, the amount and timing of collections associated with accounts receivable, prepaid expenses and other assets, and by the amount and timing of payments associated with accounts payable, accruals, income taxes, debt and other liabilities.
Working capital is primarily impacted by the amount 37 Table of Contents of net cash provided by operating activities, the amount of capital expenditures, the amount and timing of collections associated with accounts receivable, prepaid expenses and other assets, and the amount and timing of payments associated with accounts payable, accruals, income taxes, debt and other liabilities.
The Company has evaluated its long-lived assets and finite-lived intangible assets for impairment and determined that there was no impairment for the years ended December 31, 2022, 2021 and 2020. ​ Indefinite-life Intangible Assets and Goodwill: The Company’s intangible assets include goodwill, customer relationships and a trade name, and are grouped at the lowest level reporting unit for which identifiable cash flows are available.
The Company has evaluated its long-lived assets and finite-lived intangible assets for impairment and determined that there was no impairment for the years ended December 31, 2023, 2022, and 2021. ​ Indefinite-life Intangible Assets and Goodwill: The Company’s intangible assets include goodwill and a trade name, and are grouped at the lowest level reporting unit for which identifiable cash flows are available.
These differences could be material. ​ The Company considers an accounting estimate to be critical if (i)(a) the accounting estimate requires the Company to make assumptions that are difficult or subjective about matters that were highly uncertain at the time that the accounting estimate was made, (b) changes in the estimate are reasonably likely to occur in periods after the period in which the estimate was made, or (c) use of different estimates by the Company could have been used; and (ii) changes in those accounting estimates would have had a material impact on the financial condition or results of operations of the 36 Table of Contents Company.
These differences could be material. ​ The Company considers an accounting estimate to be critical if (i)(a) the accounting estimate requires the Company to make assumptions that are difficult or subjective about matters that were highly uncertain at the time that the accounting estimate was made, (b) changes in the estimate are reasonably likely to occur in periods after the period in which the estimate was made, or (c) the Company could have used different estimates; and (ii) changes in those accounting estimates would have had a material impact on the financial condition or results of operations of the Company.
Accordingly, forward-looking statements cannot be relied upon as a guarantee of future results and involve a number of risks and uncertainties that could cause actual results to differ materially from those projected in the statements, including but not limited to the factors that are described in Part I, Item 1A under the caption of “Risk Factors” of this Form 10-K, which section is incorporated herein by reference.
Accordingly, forward-looking statements cannot be relied upon as a guarantee of future results or outcomes and involve a number of risks and uncertainties that could cause actual results or outcomes to differ materially from those projected in the statements, including but not limited to the factors that are described in Part I, Item 1A under the caption “Risk Factors” of this Annual Report on Form 10-K, which section is incorporated herein by reference, and elsewhere in this report.
The Company is not required, and undertakes no obligation, to revise or update forward-looking statements or any factors that may affect actual results, whether as a result of new information, future events, or circumstances occurring after the date of this report. ​ OVERVIEW ​ Management’s Discussion and Analysis of Financial Condition and Results of Operations (“MD&A”) is designed to provide a discussion of the Company’s financial condition, results of operations, liquidity and certain other factors that may affect its future results from the perspective of management.
Except as required by law, the Company undertakes no obligation to revise or update publicly forward-looking statements or any factors that may affect actual results, whether as a result of new information, future events, circumstances occurring after the date of this report, or otherwise. ​ OVERVIEW ​ Management’s Discussion and Analysis of Financial Condition and Results of Operations (“MD&A”) is designed to provide a discussion of the Company’s financial condition, results of operations, liquidity and certain other factors that may affect its future results from the perspective of management.
The critical accounting policies and estimates inherent in the preparation of the Company’s Consolidated Financial Statements are described below.
The critical accounting policies and estimates considered in the preparation of the Company’s Consolidated Financial Statements are described below.
During the years ended December 31, 2022 and 2021, the Company made withdrawals of $64.6 million and $31.2 million out of the CCF, respectively, which were used to make milestone payments for the construction of new vessels. Cash on deposit in the CCF is held in short term U.S.
During the years ended December 31, 2023 and 2022, the Company made withdrawals of $49.9 million and $64.6 million out of the CCF, respectively, which were used to make milestone payments for the construction of new vessels. Cash on deposit in the CCF is held in short term U.S.
The Company’s retained risks and other related liabilities contain uncertainties because management is required to apply judgment and make long-term assumptions to estimate the ultimate cost to settle reported claims, and of claims incurred but not reported, as of the balance sheet date. Insurance related liabilities were $45.4 million and $35.9 million at December 31, 2022 and 2021, respectively.
The Company’s retained risks and other related liabilities contain uncertainties because management is required to apply judgment and make long-term assumptions to estimate the ultimate cost to settle reported claims, and of claims incurred but not reported, as of the balance sheet date. Insurance related liabilities were $41.3 million and $45.4 million at December 31, 2023 and 2022, respectively.
During the year ended December 31, 2021, the Company paid $71.8 million, net to fully repay the Company’s revolving credit facility. There were no borrowings under the revolving credit facility during the year ended December 31, 2022. ​ 34 Table of Contents Capital Construction Fund: The Company utilizes its CCF to fund milestone payments for the construction of new vessels.
During the year ended December 31, 2021, the Company paid $71.8 million, net, to fully repay the Company’s revolving credit facility. There were no borrowings under the revolving credit facility during the years ended December 31, 2023 and 2022. ​ Capital Construction Fund: The Company utilizes its CCF to fund milestone payments for the construction of new vessels.
The maximum remaining number of shares that may be repurchased under the Company’s stock repurchase program was 1,533,371 shares at December 31, 2022. ​ ​ COMMITMENTS, CONTINGENCIES AND OFF-BALANCE SHEET ARRANGEMENTS ​ Commitments and Contingencies: A description of other commitments and contingencies is set forth in Note 9, Note 11 and Note 17 to the Consolidated Financial Statements in Item 8 of Part II below, and is incorporated herein by reference. ​ Off-balance sheet Arrangements: The Company is not party to any off-balance sheet arrangements that have, or are reasonably likely to have, a current or future material effect on the Company’s financial condition, results of operations or cash flows. ​ ​ CRITICAL ACCOUNTING ESTIMATES ​ The Company’s significant accounting policies are described in Note 2 to the Consolidated Financial Statements in Item 8 of Part II below.
The remaining number of shares that may be repurchased under the Company’s stock repurchase program was 2,462,188 shares at December 31, 2023. ​ ​ COMMITMENTS, CONTINGENCIES AND OFF-BALANCE SHEET ARRANGEMENTS ​ Commitments and Contingencies: A description of other commitments and contingencies is set forth in Note 9, Note 11 and Note 17 to the Consolidated Financial Statements in Item 8 of Part II below, and is incorporated herein by reference. ​ Off-balance Sheet Arrangements: The Company is not currently party to any off-balance sheet arrangements that have, or are reasonably likely to have, a current or future material effect on the Company’s financial condition, results of operations or cash flows. ​ ​ 38 Table of Contents CRITICAL ACCOUNTING ESTIMATES ​ The Company’s significant accounting policies are described in Note 2 to the Consolidated Financial Statements in Item 8 of Part II below.
The discussion that follows is intended to provide information that will assist in understanding the changes in the Company’s Consolidated Financial Statements from year to year, the primary factors that accounted for those changes, and how certain accounting principles, policies and estimates affect the Company’s Consolidated Financial Statements.
The discussion that follows is intended to provide information that assists in understanding the changes in the Company’s Consolidated Financial Statements from year to year, the primary factors that accounted for those changes, and how certain accounting principles, policies and estimates affected the Company’s Consolidated Financial Statements.
Such insurance includes, but is not limited to, employee health, workers’ compensation, marine liability, cybersecurity, auto liability and physical damage to property and equipment. For certain risks, the Company elects to not purchase insurance because of the excessive cost of such insurance or the perceived remoteness of the risk.
Such insurance includes, but is not limited to, employee health, workers’ compensation, marine liability, cybersecurity, auto liability and physical damage to property and equipment. For certain 39 Table of Contents risks, the Company elects to not purchase insurance because of the excessive cost of such insurance, the perceived remoteness of the risk or insurance coverage is not commercially available.
Significant changes to these estimates may result in an increase or decrease to the Company’s income taxes in a subsequent period. ​ The Company records a valuation allowance if, based on the weight of available evidence, management believes that it is more likely than not that some portion or all of a recorded deferred tax asset would not be realized in future periods. ​ Additional information about the Company’s income taxes is included in Note 10 to the Consolidated Financial Statements in Item 8 of Part II below. ​ ​
Significant changes to these estimates may result in an increase or decrease to the Company’s income taxes in a subsequent period. ​ The Company records a valuation allowance if, based on the weight of available evidence, management believes that it is more likely than not that some portion or all of a recorded deferred tax asset would not be realized in future periods. ​ Additional information about the Company’s income taxes is included in Note 10 to the Consolidated Financial Statements in Item 8 of Part II below. ​ ​ OTHER MATTERS ​ New Accounting Pronouncements: See Note 2 to the Consolidated Financial Statements in Item 8 of Part II below for additional information on new accounting pronouncements. ​ ​ 40 Table of Contents
The Company did not issue any new fixed interest debt during the years ended December 31, 2022 and 2021. The Company paid $111.5 million of prepaid and scheduled fixed interest debt principal payments, compared to $59.3 million of scheduled principal payments paid during the prior year.
The Company did not issue any new fixed interest debt during the years ended December 31, 2023 and 2022. The Company paid $76.9 million of prepaid and scheduled fixed interest debt principal payments, compared to $111.5 million of prepaid scheduled principal payments during the prior year.
Discussion and analysis of the financial condition and results of operations of Matson for the years ended December 31, 2021 and 2020 can be found in Part II, Item 7 of the Company’s Annual Report on Form 10-K for the year ended December 31, 2021 , filed with the SEC on February 25, 2022. ​ MD&A is presented in the following sections: ​ ◾ Historical Financial Information ◾ Fourth Quarter 2022 Discussion and Update on Business Conditions ◾ Consolidated Results of Operations ◾ Analysis of Operating Revenue and Income by Segment ◾ Liquidity and Capital Resources ◾ Commitments, Contingencies and Off-Balance Sheet Arrangements ◾ Critical Accounting Estimates ​ ​ ​ 28 Table of Contents HISTORICAL FINANCIAL INFORMATION ​ The comparative selected financial information of the Company is presented for each of the five years in the period ended December 31, 2022.
Discussion and analysis of the financial condition and results of operations of Matson for the year ended December 31, 2022 compared with the year ended December 31, 2021 can be found in Part II, Item 7 of the Company’s Annual Report on Form 10-K for the year ended December 31, 2022 , filed with the SEC on February 24, 2023. ​ The MD&A is presented in the following sections: ​ ◾ Historical Financial Information ◾ Fourth Quarter 2023 Discussion and Outlook for 2024 ◾ Consolidated Results of Operations ◾ Analysis of Operating Revenue and Income by Segment ◾ Liquidity and Capital Resources ◾ Commitments, Contingencies and Off-Balance Sheet Arrangements ◾ Critical Accounting Estimates ◾ Other Matters ​ ​ ​ 30 Table of Contents HISTORICAL FINANCIAL INFORMATION ​ The comparative selected financial information of the Company is presented for each of the past five years ended December 31, 2023.
(2) Income taxes for the years ended December 31, 2019 and 2018 include a non-cash income tax (expense)/benefit of $2.9 million and $(2.9) million, respectively, related to the remeasurement of the Company’s deferred assets and liabilities and other discrete adjustments as a result of applying the Tax Cut and Jobs Act of 2017.
(2) Income tax for the year ended December 31, 2019 includes a non-cash income tax benefit of $2.9 million related to the remeasurement of the Company’s deferred assets and liabilities and other discrete adjustments as a result of applying the Tax Cut and Jobs Act of 2017.
The increase in Other income (expense) was due to favorable adjustments reflected in the Company’s pension and post-retirement plan liabilities during the year ended December 31, 2021. ​ Income Taxes for the year ended December 31, 2022 were $288.4 million, or 21.3 percent of income before income taxes, compared to $243.9 million, or 20.8 percent of income before income taxes in the prior year.
The decrease in Other income (expense) was due to unfavorable adjustments reflected in the Company’s pension and post-retirement plan liabilities during the year ended December 31, 2023. ​ Income Taxes for the year ended December 31, 2023 were $75.9 million, or 20.3 percent of income before income taxes, compared to $288.4 million, or 21.3 percent of income before income taxes in the prior year.
The decrease in fixed interest debt was due to the prepayment of $50.4 million of outstanding principal of private placement term loans and scheduled debt repayments of private placement term loans and Title XI debt made during the year ended December 31, 2022. ​ As of December 31, 2022, the Company had $642.1 million of unused capacity under the revolving credit facility, with a maturity date of March 31, 2026.
The decrease in fixed interest debt was due to the $26.4 million prepayments of Title XI debt, and scheduled debt repayments of private placement term loans and Title XI debt made during the year ended December 31, 2023. ​ As of December 31, 2023, the Company had $644.2 million of unused capacity under the revolving credit facility, with a maturity date of March 31, 2026.
Cash on deposit in the CCF and assigned accounts receivable as of December 31, 2022 and 2021 is as follows: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ As of December 31, (In millions) ​ 2022 2021 Capital Construction Fund: ​ ​ ​ ​ ​ ​ Cash on deposit ​ $ 518.2 ​ $ — Assigned accounts receivables ​ $ 9.9 ​ $ 9.8 ​ During the years ended December 31, 2022 and 2021, the Company deposited $582.8 million and $31.2 million into the CCF, respectively.
Cash on deposit in the CCF and assigned accounts receivable as of December 31, 2023 and 2022 were as follows: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ As of December 31, (In millions) ​ 2023 2022 Capital Construction Fund: ​ ​ ​ ​ ​ ​ Cash on deposit ​ $ 599.4 ​ $ 518.2 Assigned accounts receivables ​ $ 218.1 ​ $ 9.9 ​ During the years ended December 31, 2023 and 2022, the Company deposited $128.5 million and $582.8 million into the CCF, respectively.
For additional information on the CCF, see Note 7 to the Consolidated Financial Statements. ​ Changes in the Company’s cash, cash equivalents and restricted cash for the years ended December 31, 2022, 2021 and 2020 were as follows: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ As of December 31, ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Change (In millions) 2022 2021 2020 2022-2021 2021-2020 Net cash provided by operating activities (1) ​ $ 1,271.9 ​ $ 984.1 ​ $ 429.8 ​ $ 287.8 ​ $ 554.3 Net cash used in investing activities (2) ​ (729.3) ​ (323.4) ​ (177.0) ​ (405.9) ​ (146.4) Net cash used in financing activities (3) ​ (576.6) ​ (392.7) ​ (261.5) ​ (183.9) ​ (131.2) Net (decrease) increase in cash, cash equivalents and restricted cash ​ (34.0) ​ 268.0 ​ (8.7) ​ (302.0) ​ 276.7 Cash, cash equivalents and restricted cash, beginning of the period ​ 287.7 ​ 19.7 ​ 28.4 ​ 268.0 ​ (8.7) Cash, cash equivalents and restricted cash, end of the period ​ $ 253.7 ​ $ 287.7 ​ $ 19.7 ​ $ (34.0) ​ $ 268.0 ​ (1) Changes in Net Cash Provided by Operating Activities: Changes in net cash provided by operating activities for the years ended December 31, 2022, 2021 and 2020 were as follows: ​ ​ ​ ​ ​ ​ ​ ​ Change (In millions) 2022-2021 2021-2020 Net income ​ $ 136.5 ​ $ 734.3 Non-cash depreciation and amortization ​ ​ 5.4 ​ ​ 21.0 Deferred income taxes ​ ​ 57.0 ​ ​ (18.9) Other non-cash related changes, net ​ ​ (1.7) ​ ​ (3.1) Income and distributions from SSAT, net ​ ​ (26.4) ​ ​ (38.5) Accounts receivable, net ​ 164.9 ​ (42.3) Prepaid expenses and other assets ​ 2.9 ​ (70.0) Accounts payable, accruals and other liabilities ​ (71.3) ​ (5.2) Operating lease liabilities ​ (54.4) ​ ​ (23.8) Non-cash amortization of operating lease right of use assets ​ ​ 49.7 ​ ​ 28.5 Deferred dry-docking payments ​ 10.6 ​ (19.5) Non-cash deferred dry-docking amortization ​ ​ 0.6 ​ ​ (0.8) Other long-term liabilities ​ 14.0 ​ (7.4) Total ​ $ 287.8 ​ $ 554.3 ​ Income from SSAT was $83.1 million for the year ended December 31, 2022, compared to $56.3 million in the prior year.
For additional information on the CCF, see Note 7 to the Consolidated Financial Statements. ​ Changes in the Company’s cash, cash equivalents and restricted cash for the years ended December 31, 2023, 2022 and 2021 were as follows: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ As of December 31, ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Change (In millions) 2023 2022 2021 2023-2022 2022-2021 Net cash provided by operating activities (1) ​ $ 510.5 ​ $ 1,271.9 ​ $ 984.1 ​ $ (761.4) ​ $ 287.8 Net cash used in investing activities (2) ​ (338.2) ​ (729.3) ​ (323.4) ​ 391.1 ​ (405.9) Net cash used in financing activities (3) ​ (289.7) ​ (576.6) ​ (392.7) ​ 286.9 ​ (183.9) Net (decrease) increase in cash, cash equivalents and restricted cash ​ (117.4) ​ (34.0) ​ 268.0 ​ (83.4) ​ (302.0) Cash, cash equivalents and restricted cash, beginning of the period ​ 253.7 ​ 287.7 ​ 19.7 ​ (34.0) ​ 268.0 Cash, cash equivalents and restricted cash, end of the period ​ $ 136.3 ​ $ 253.7 ​ $ 287.7 ​ $ (117.4) ​ $ (34.0) ​ 35 Table of Contents (1) Changes in Net Cash Provided by Operating Activities: Changes in net cash provided by operating activities for the years ended December 31, 2023, 2022 and 2021 were as follows: ​ ​ ​ ​ ​ ​ ​ ​ Change (In millions) 2023-2022 2022-2021 Net income ​ $ (766.8) ​ $ 136.5 Non-cash depreciation and amortization ​ ​ 3.1 ​ ​ 5.4 Deferred income taxes ​ ​ (70.6) ​ ​ 57.0 Other non-cash related changes, net ​ ​ 4.9 ​ ​ (1.7) Income and distribution from SSAT, net ​ ​ 33.6 ​ ​ (26.4) Accounts receivable, net ​ (85.5) ​ 164.9 Prepaid expenses and other assets ​ 78.7 ​ 2.9 Accounts payable, accruals and other liabilities ​ 42.6 ​ (71.3) Operating lease liabilities ​ 9.3 ​ ​ (54.4) Non-cash amortization of operating lease right of use assets ​ ​ (11.0) ​ ​ 49.7 Deferred dry-docking payments ​ 1.6 ​ 10.6 Non-cash deferred dry-docking amortization ​ ​ 0.4 ​ ​ 0.6 Other long-term liabilities ​ (1.7) ​ 14.0 Total ​ $ (761.4) ​ $ 287.8 ​ Income from SSAT was $2.2 million for the year ended December 31, 2023, compared to $83.1 million in the prior year.
The decrease in deferred dry-docking payments was due to a decrease in vessel dry-dock related activities during the year ended December 31, 2022, compared to the prior year. ​ (2) Changes in Net Cash Used in Investing Activities: Changes in net cash used in investing activities for the years ended December 31, 2022, 2021 and 2020 were as follows: ​ ​ ​ ​ ​ ​ ​ ​ ​ Change (In millions) 2022-2021 2021-2020 Cash deposits into CCF ​ $ (551.6) ​ $ 101.2 Withdrawals from CCF ​ ​ 33.4 ​ ​ (101.2) Capitalized vessel construction expenditures ​ ​ (47.5) ​ ​ 72.9 Other capital expenditures ​ ​ 163.5 ​ ​ (205.9) Proceeds from disposal of property and equipment, net, and other ​ (3.7) ​ ​ (13.4) Total ​ $ (405.9) ​ $ (146.4) ​ Capitalized vessel construction expenditures was $62.4 million for the year ended December 31, 2022, compared to $14.9 million in the prior year.
The decrease in deferred dry-docking payments was due to a decrease in vessel dry-dock related activities during the year ended December 31, 2023, compared to the prior year. ​ (2) Changes in Net Cash Used in Investing Activities: Changes in net cash used in investing activities for the years ended December 31, 2023, 2022 and 2021 were as follows: ​ ​ ​ ​ ​ ​ ​ ​ ​ Change (In millions) 2023-2022 2022-2021 Cash deposits and interest into the CCF ​ $ 454.3 ​ $ (551.6) Withdrawals from CCF ​ ​ (14.7) ​ ​ 33.4 Capitalized vessel construction expenditures ​ ​ 9.5 ​ ​ (47.5) Capital expenditures (excluding vessel construction expenditures) ​ ​ (48.6) ​ ​ 163.5 Proceeds from disposal of property and equipment, net, and other ​ (9.4) ​ ​ (3.7) Total ​ $ 391.1 ​ $ (405.9) ​ During the year ended December 31, 2023, cash deposits and interest earned in the CCF were $100.0 million and $28.5 million, respectively, compared to $579.7 million and $3.1 million in the prior year, respectively.
New risk factors emerge from time to time and it is not possible for the Company to predict all such risk factors, nor can it assess the impact of all such risk factors on the Company’s business or the extent to which any factor, or combination of factors, may cause actual results to differ materially from those contained in any forward-looking statements.
New risks or uncertainties may emerge from time to time, risks that the Company currently does not consider to be material could become material, and it is not possible for the Company to predict all such risks, nor can it assess the impact of all such risks on the Company’s business or the extent to which any factor, or combination of factors, may cause actual results or outcomes, or the timing of results or outcomes, to differ materially from those contained in any forward-looking statements.
Sources of liquidity available to the Company as of December 31, 2022 compared to December 31, 2021, were as follows: ​ Cash and Cash Equivalents, Restricted Cash and Accounts Receivable : Cash and cash equivalents, restricted cash and accounts receivable, net, as of December 31, 2022 and 2021 were as follows: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ As of December 31, (In millions) 2022 2021 Change Cash and cash equivalents ​ $ 249.8 ​ $ 282.4 ​ $ (32.6) ​ Restricted cash ​ $ 3.9 ​ $ 5.3 ​ $ (1.4) ​ Accounts receivable, net (1) ​ $ 268.5 ​ $ 343.7 ​ $ (75.2) ​ (1) Eligible accounts receivable of $9.9 million and $9.8 million at December 31, 2022 and 2021, respectively, were assigned to the CCF.
Sources of liquidity available to the Company as of December 31, 2023 compared to December 31, 2022, were as follows: ​ Cash and Cash Equivalents, Restricted Cash and Accounts Receivable : Cash and cash equivalents, restricted cash and accounts receivable, net as of December 31, 2023 and 2022 were as follows: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ As of December 31, (In millions) 2023 2022 Change Cash and cash equivalents ​ $ 134.0 ​ $ 249.8 ​ $ (115.8) ​ Restricted cash ​ $ 2.3 ​ $ 3.9 ​ $ (1.6) ​ Accounts receivable, net (1) ​ $ 279.4 ​ $ 268.5 ​ $ 10.9 ​ (1) Eligible accounts receivable of $218.1 million and $9.9 million at December 31, 2023 and 2022, respectively, were assigned to the CCF.
(2) Includes containers from services in various islands in Micronesia and the South Pacific, and Okinawa, Japan. ​ Ocean Transportation revenue increased $411.8 million, or 13.1 percent, during the year ended December 31, 2022, compared with the year ended December 31, 2021.
(2) Includes containers from services in various islands in Micronesia and the South Pacific, and Okinawa, Japan. ​ Ocean Transportation revenue decreased $1,067.6 million, or 30.1 percent, during the year ended December 31, 2023, compared with the year ended December 31, 2022.
Total debt as of December 31, 2022 and 2021 is as follows: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ As of December 31, ​ (In millions) ​ 2022 2021 Change ​ Fixed interest debt ​ $ 517.5 ​ $ 629.0 ​ $ (111.5) ​ Total Debt ​ $ 517.5 ​ $ 629.0 ​ $ (111.5) ​ ​ Total debt decreased by $111.5 million during the year ended December 31, 2022 compared to the prior year.
Total debt as of December 31, 2023 and 2022 is as follows: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ As of December 31, ​ (In millions) ​ 2023 2022 Change ​ Fixed interest debt ​ $ 440.6 ​ $ 517.5 ​ $ (76.9) ​ Total Debt ​ $ 440.6 ​ $ 517.5 ​ $ (76.9) ​ ​ Total debt decreased by $76.9 million during the year ended December 31, 2023 compared to the prior year.
The increase in the Company’s working capital surplus during the year ended December 31, 2022 was due to the increase in cash provided by operating activities. ​ 35 Table of Contents Capital Expenditures: The Company expects to make the following capital expenditures during the years ending December 31, 2023, 2024 and 2025: ​ ​ ​ ​ ​ ​ ​ ​ ​ Expected Capital Expenditures (in millions) 2023 2024 2025 ​ New vessel construction milestone payments and related costs ​ $55 ​ $75 ​ $360 ​ LNG installations and reengining on existing vessels ​ $60 - $65 ​ $50 - $55 ​ - ​ Maintenance and other capital expenditures ​ $80 - $90 ​ $80 - $90 ​ $80 - $90 ​ Total Estimated Capital Expenditures ​ $195 - $210 ​ $205 - $220 ​ $440 - $450 ​ ​ New vessel construction milestone payments and related costs are for the Company’s new vessel program for the construction of three new vessels at a cost of approximately $1.0 billion with expected delivery dates during the fourth quarter of 2026, the second quarter of 2027 and the fourth quarter of 2027.
The decrease in the Company’s working capital surplus during the year ended December 31, 2023 was due to the decrease in cash provided by operating activities and higher capital expenditures during the year. ​ Capital Expenditures: The Company expects to make the following capital expenditures during the years ending December 31, 2024, 2025 and 2026: ​ ​ ​ ​ ​ ​ ​ ​ ​ (In millions) 2024 2025 2026 ​ New vessel construction milestone payments and related costs ​ $75 ​ $380 ​ $360 ​ LNG installations and reengining on existing vessels ​ $70 - $80 ​ $10 - $15 ​ - ​ Maintenance and other capital expenditures ​ $110 - $120 ​ $100 - $110 ​ $80 - $90 ​ Total Estimated Capital Expenditures ​ $255 - $275 ​ $490 - $505 ​ $440 - $450 ​ ​ New vessel construction milestone payments and related costs are for the Company’s new vessel program for the construction of three new vessels at a cost of approximately $1.0 billion with expected delivery dates during the fourth quarter of 2026, the second quarter of 2027 and the fourth quarter of 2027.
The 2021 income tax rate benefited from certain discrete tax adjustments that lowered the effective tax rate in the prior year. ​ Net Income during the year ended December 31, 2022 increased $136.5 million, or 14.7 percent, to $1,063.9 million for the year ended December 31, 2022, compared to the prior year. 31 Table of Contents ​ ANALYSIS OF OPERATING REVENUE AND INCOME BY SEGMENT ​ The following analysis of operating revenue and income by segment for the years ended December 31, 2022 and 2021 should be read in conjunction with the Company’s reportable segments information included in Note 3 to the Consolidated Financial Statements in Item 8 of Part II. ​ Ocean Transportation: 2022 compared with 2021: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Years Ended December 31, (Dollars in millions) 2022 2021 Change Ocean Transportation revenue ​ $ 3,544.6 ​ $ 3,132.8 ​ $ 411.8 13.1 % Operating costs and expenses ​ (2,263.4) ​ (1,995.1) ​ (268.3) ​ 13.4 % Operating income ​ $ 1,281.2 ​ $ 1,137.7 ​ $ 143.5 ​ 12.6 % Operating income margin ​ 36.1 % 36.3 % ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Volume (Forty-foot equivalent units (FEU), except for automobiles) (1) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Hawaii containers ​ 148,500 ​ 157,600 ​ (9,100) ​ (5.8) % Hawaii automobiles ​ 41,300 ​ 46,600 ​ (5,300) ​ (11.4) % Alaska containers ​ 84,900 ​ 78,200 ​ 6,700 ​ 8.6 % China containers ​ 163,100 ​ 184,800 ​ (21,700) ​ (11.7) % Guam containers ​ 21,100 ​ 21,900 ​ (800) ​ (3.7) % Other containers (2) ​ 22,500 ​ 20,200 ​ 2,300 ​ 11.4 % (1) Approximate volumes included for the period are based on the voyage departure date, but revenue and operating income are adjusted to reflect the percentage of revenue and operating income earned during the reporting period for voyages in transit at the end of each reporting period.
The 2023 income tax rate benefited from certain discrete tax adjustments that lowered the effective tax rate in the current year. ​ Net Income during the year ended December 31, 2023 decreased $766.8 million, or 72.1 percent, to $297.1 million for the year ended December 31, 2023, compared to the prior year. ​ ANALYSIS OF OPERATING REVENUE AND INCOME BY SEGMENT ​ The following analysis of operating revenue and income by segment for the years ended December 31, 2023 and 2022 should be read in conjunction with the Company’s reportable segments information included in Note 3 to the Consolidated Financial Statements in Item 8 of Part II. ​ Ocean Transportation: 2023 compared with 2022: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Years Ended December 31, (Dollars in millions) 2023 2022 Change Ocean Transportation revenue ​ $ 2,477.0 ​ $ 3,544.6 ​ $ (1,067.6) (30.1) % Operating costs and expenses ​ (2,182.2) ​ (2,263.4) ​ 81.2 ​ (3.6) % Operating income ​ $ 294.8 ​ $ 1,281.2 ​ $ (986.4) ​ (77.0) % Operating income margin ​ 11.9 % 36.1 % ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Volume (Forty-foot equivalent units (FEU), except for automobiles) (1) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Hawaii containers ​ 144,000 ​ 148,500 ​ (4,500) ​ (3.0) % Hawaii automobiles ​ 39,400 ​ 41,300 ​ (1,900) ​ (4.6) % Alaska containers ​ 80,000 ​ 84,900 ​ (4,900) ​ (5.8) % China containers ​ 140,700 ​ 163,100 ​ (22,400) ​ (13.7) % Guam containers ​ 20,100 ​ 21,100 ​ (1,000) ​ (4.7) % Other containers (2) ​ 17,500 ​ 22,500 ​ (5,000) ​ (22.2) % (1) Approximate volumes included for the period are based on the voyage departure date, but revenue and operating income are adjusted to reflect the percentage of revenue and operating income earned during the reporting period for voyages in transit at the end of each reporting period.
The increase was primarily due to higher contributions from transportation brokerage and freight forwarding. ​ LIQUIDITY AND CAPITAL RESOURCES ​ The Company’s primary sources of liquidity are its cash flows generated from operating activities and its debt.
The decrease was primarily due to lower contributions from transportation brokerage and supply chain management. ​ LIQUIDITY AND CAPITAL RESOURCES ​ The Company’s primary sources of liquidity are its cash flows generated from operating activities and its debt.
Other capital expenditures during the year ended December 31, 2021 included the purchase of additional containers, chassis and other terminal equipment to support the increase in the Company’s operational activities, and the repurchase of Maunalei vessel for $95.8 million. ​ (3) Changes in Net Cash Used in Financing Activities: Changes in net cash used in financing activities for the years ended December 31, 2022, 2021 and 2020 were as follows: ​ ​ ​ ​ ​ ​ ​ ​ ​ Change (In millions) 2022-2021 2021-2020 Repurchase of Matson common stock ​ $ (198.7) ​ $ (198.3) Proceeds received from issuance of fixed interest debt ​ ​ — ​ ​ (325.5) Repayments of fixed interest debt ​ ​ (52.2) ​ ​ 157.2 Repayments and borrowings under revolving credit facility, net ​ ​ 71.8 ​ ​ 235.5 Withholding tax related to net share settlements of restricted stock units ​ ​ (5.7) ​ ​ (8.8) Payment of financing costs ​ ​ 3.0 ​ ​ 15.5 Dividends paid ​ ​ (2.1) ​ ​ (6.7) Change in other payments, net ​ ​ — ​ ​ (0.1) Total ​ $ (183.9) ​ $ (131.2) ​ The Company paid $397.0 million to repurchase common stock during the year ended December 31, 2022, compared to $198.3 million in the prior year.
Capital expenditures (excluding vessel construction expenditures) during the year ended December 31, 2023 included costs associated with LNG installations and the reengining of an existing vessel, and the purchase of additional containers, chassis and other terminal equipment to support the Company’s operational activities. ​ 36 Table of Contents (3) Changes in Net Cash Used in Financing Activities: Changes in net cash used in financing activities for the years ended December 31, 2023, 2022 and 2021 were as follows: ​ ​ ​ ​ ​ ​ ​ ​ ​ Change (In millions) 2023-2022 2022-2021 Repurchase of Matson common stock ​ $ 241.8 ​ $ (198.7) Repayments of fixed interest debt ​ ​ 34.6 ​ ​ (52.2) Repayments and borrowings under revolving credit facility, net ​ ​ — ​ ​ 71.8 Withholding tax related to net share settlements of restricted stock units ​ ​ 7.5 ​ ​ (5.7) Dividends paid ​ ​ 3.0 ​ ​ (2.1) Payment of financing costs ​ ​ — ​ ​ 3.0 Total ​ $ 286.9 ​ $ (183.9) ​ The Company paid $155.2 million to repurchase common stock during the year ended December 31, 2023, compared to $397.0 million in the prior year.
In addition, the Company retains all risk of loss that exceeds the limits of the Company’s insurance policies, or for other risks where insurance is not commercially available. ​ When estimating its reserves for retained risks and related liabilities, the Company considers a number of factors, including historical claims experience, demographic factors, current trends, and analyses provided by independent third parties.
The Company retains the risk of loss for insurance deductibles and self-insured retentions, for amounts that exceed the limits of the Company’s insurance policies, and for other risks not covered by insurance. ​ When estimating its reserves for retained risks and related liabilities, the Company considers a number of factors, including historical claims experience, demographic factors, current trends, and analyses provided by independent third parties.
The increase was primarily due to higher freight rates in China and a higher contribution from SSAT, partially offset by lower volume in China, higher operating costs and expenses (including fuel-related expenses) primarily due to the CLX+ service and higher terminal handling costs. ​ The Company’s SSAT terminal joint venture investment contributed $83.1 million during the year ended December 31, 2022, compared to a contribution of $56.3 million during the year ended December 31, 2021.
The decrease was primarily due to lower freight rates and volume in China and a lower contribution from SSAT, partially offset by lower operating costs and expenses including fuel-related expenses primarily related to the discontinuation of the CCX service and lower fuel costs and the timing of fuel-related surcharge collections. ​ 34 Table of Contents The Company’s SSAT terminal joint venture investment contributed $2.2 million during the year ended December 31, 2023, compared to a contribution of $83.1 million during the year ended December 31, 2022.
The Company’s Title XI Bonds are described in Note 8 to the Consolidated Financial Statements in Item 8 of Part II below. ​ Working Capital: The Company had a working capital surplus of $178.0 million at December 31, 2022, compared to a working capital surplus of $92.1 million at December 31, 2021.
The Company’s debt is described in Note 8 to the Consolidated Financial Statements in Item 8 of Part II. ​ Working Capital: The Company had a working capital surplus of $40.0 million at December 31, 2023, compared to a working capital surplus of $178.0 million at December 31, 2022.
(4) The Company’s debt is described in Note 8 to the Consolidated Financial Statements in Item 8 of Part II. 29 Table of Contents ​ FOURTH QUARTER 2022 DISCUSSION AND UPDATE ON BUSINESS CONDITIONS ​ Ocean Transportation: The Company’s container volume in the Hawaii service in the fourth quarter 2022 was 13.0 percent lower year-over-year.
(4) The Company’s debt is described in Note 8 to the Consolidated Financial Statements in Item 8 of Part II. ​ ​ 31 Table of Contents FOURTH QUARTER 2023 DISCUSSION AND OUTLOOK FOR 2024 ​ Ocean Transportation: The Company’s container volume in the Hawaii service in the fourth quarter 2023 was 1.9 percent lower year-over-year.
The Company has evaluated its indefinite-life intangible assets and goodwill for impairment and determined that there was no impairment for the years ended December 31, 2022, 2021 and 2020. ​ Insurance Related Liabilities: The Company is uninsured for certain risks but when feasible, many of these risks are mitigated by insurance. The Company purchases insurance with deductibles or self-insured retentions.
The Company has evaluated its indefinite-life intangible assets and goodwill for impairment and determined that there was no impairment for the years ended December 31, 2023, 2022, and 2021. ​ Insurance Related Liabilities: The Company purchases insurance with deductibles or self-insured retentions to mitigate significant risks that it is exposed to.
Additionally, the Company plans to begin reengining Manukai to operate on LNG and conventional fuels during the second quarter of 2023 at a total cost of approximately $60 million. ​ Maintenance and other capital expenditures include amounts that the Company expects to spend on various capital projects including capital expenditures related to the second and third phase of its program to modernize and renovate its terminal facility at Sand Island, Honolulu, Hawaii, repurchases of leased equipment, vessel maintenance and annual equipment purchases to support the Company’s operations. ​ Repurchase of Shares: During the year ended December 31, 2022, the Company repurchased approximately 5.0 million shares for a total cost of $397.0 million.
Additionally, the reengining of Manukai to operate on LNG and conventional fuels is in progress with an expected remaining cost of approximately $72 million. ​ Maintenance and other capital expenditures include amounts that the Company expects to spend on various capital projects, including capital expenditures related to the second and third phase of its program to modernize and renovate its terminal facility at Sand Island, Honolulu, Hawaii, repurchases of leased equipment, vessel capital maintenance and annual equipment purchases to support the Company’s operations.
The increase in income from SSAT was primarily due to higher operating profits generated by SSAT during the year ended December 31, 2022, compared to the prior year. Cash distributions from SSAT were $47.3 million for the 33 Table of Contents year ended December 31, 2022, compared to $46.9 million in the prior year.
The decrease in income from SSAT was primarily due to lower operating profits generated by SSAT during the year ended December 31, 2023, compared to the prior year. No cash distributions were received from SSAT during the year ended December 31, 2023, compared to $47.3 million of dividends received in the prior year.
The increase was due to an increase in Ocean Transportation revenue of $411.8 million and an increase in Logistics revenue of $5.9 million. ​ Operating Costs and Expenses for the year ended December 31, 2022 increased $251.6 million, or 9.2 percent, compared to the prior year.
The decrease was due to decrease in Ocean Transportation revenue of $1,067.6 million and a decrease in Logistics revenue of $180.8 million. ​ Operating Costs and Expenses for the year ended December 31, 2023 decreased $237.6 million, or 7.9 percent, compared to the prior year.
The LNG installation project on Daniel K. Inouye has begun and work on Kaimana Hila is currently scheduled to begin during the second quarter of 2024. Each installation is expected to cost approximately $35 million.
The LNG installation project on Kaimana Hila is currently scheduled to begin during the second quarter of 2024 at a cost of approximately $47 million.
The increase was primarily driven by higher other terminal revenue. ​ Logistics: 2022 compared with 2021: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Years Ended December 31, (Dollars in millions) 2022 2021 Change Logistics revenue ​ $ 798.4 ​ $ 792.5 $ 5.9 0.7 % Operating costs and expenses ​ (726.0) ​ (742.7) 16.7 ​ (2.2) % Operating income ​ $ 72.4 ​ $ 49.8 $ 22.6 ​ 45.4 % Operating income margin ​ 9.1 % 6.3 % ​ ​ ​ ​ ​ ​ 32 Table of Contents Logistics revenue increased $5.9 million, or 0.7 percent, during the year ended December 31, 2022, compared with the year ended December 31, 2021.
The decrease was primarily driven by lower demurrage revenue. ​ Logistics: 2023 compared with 2022: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Years Ended December 31, (Dollars in millions) 2023 2022 Change Logistics revenue ​ $ 617.6 ​ $ 798.4 $ (180.8) (22.6) % Operating costs and expenses ​ (569.6) ​ (726.0) 156.4 ​ (21.5) % Operating income ​ $ 48.0 ​ $ 72.4 $ (24.4) ​ (33.7) % Operating income margin ​ 7.8 % 9.1 % ​ ​ ​ ​ ​ ​ Logistics revenue decreased $180.8 million, or 22.6 percent, during the year ended December 31, 2023, compared with the year ended December 31, 2022.
Except for historical information contained in these written or oral communications, such communications contain forward-looking statements. These include, for example, all references to 2023 or future years.
Except for historical information contained in these written or oral communications, all other statements are forward-looking statements.
Cash distributions from SSAT are dependent on the level of cash available for distribution after SSAT’s operational and capital needs.
Cash distributions from SSAT are dependent on the level of cash available for distribution after SSAT’s operational and capital needs. Changes in accounts receivable were primarily due to the timing of collections associated with those receivables.
The increase was due to an increase in Ocean Transportation operating costs and expenses of $268.3 million, partially offset by a decrease in Logistics operating costs and expenses of $16.7 million. ​ Operating Income for the year ended December 31, 2022 increased $166.1 million, or 14.0 percent, compared to the prior year.
The decrease was due to a decrease in Ocean Transportation operating costs and expenses of $81.2 million and a decrease in Logistics operating costs and expenses of $156.4 million. ​ Operating Income for the year ended December 31, 2023 decreased $1,010.8 million, or 74.7 percent, compared to the prior year.
Changes in accounts receivable were primarily due to lower accounts receivables outstanding at the end of December 31, 2022, due to lower revenue at the end of the year as compared to prior year, and the timing of collections associated with those receivables.
Changes in prepaid expenses and other assets were primarily due to a decrease in prepaid income taxes at the end of December 31, 2023 as compared to the prior year. Changes in accounts payable, accruals and other liabilities were primarily due to the timing of payments associated with those liabilities.
The increase was primarily due to higher revenue in freight forwarding, supply chain management and warehousing, partially offset by lower transportation brokerage revenue. ​ Logistics operating income increased $22.6 million, or 45.4 percent, during the year ended December 31, 2022, compared with the year ended December 31, 2021.
The decrease was primarily due to lower revenue in transportation brokerage. ​ Logistics operating income decreased $24.4 million, or 33.7 percent, during the year ended December 31, 2023, compared with the year ended December 31, 2022.
The increase was due to an increase in Ocean Transportation operating income of $143.5 million and an increase in Logistics operating income of $22.6 million. ​ The reasons for changes in operating revenue, operating costs and expenses, and operating income are described below, by business segment, in “Analysis of Operating Revenue and Income by Segment.” ​ Interest Income was $8.2 million for the year ended December 31, 2022 and was due to amounts on deposit in cash and cash equivalent accounts, and cash on deposit within the Capital Construction Fund that were invested in interest bearing accounts during the year ended December 31, 2022.
The decrease was due to a decrease in Ocean Transportation operating income of $986.4 million and a decrease in Logistics operating income of $24.4 million. ​ The reasons for changes in operating revenue, operating costs and expenses, and operating income are described below, by business segment, in “Analysis of Operating Revenue and Income by Segment.” ​ Interest Income was $36.0 million for the year ended December 31, 2023, compared to $8.2 million in the prior year.
Capitalized vessel construction expenditures incurred in 2022 related to milestone payments on the construction of three new vessels and the construction of a new flat-deck barge. Other capital expenditures (excluding capitalized vessel construction expenditures) was $146.9 million for the year ended December 31, 2022, compared to $310.4 million for the prior year.
The decrease in capitalized vessel construction expenditures was due to the timing of milestone payments related to the Company’s new fleet renewal program. Capital expenditures (excluding vessel construction expenditures) were $195.5 million for the year ended December 31, 2023, compared to $146.9 million for the prior year.
The increase was primarily due to higher average freight rates in China, higher fuel-related surcharge revenue and higher volume in Alaska, partially offset by lower volume in China and Hawaii. ​ On a year-over-year FEU basis, Hawaii container volume decreased 5.8 percent primarily due to lower retail-related demand and one less week; Alaska volume increased 8.6 percent due to (i) higher export seafood volume from AAX, (ii) higher northbound volume primarily due to higher retail-related demand and volume related to a competitor’s dry-docking, partially offset by one less week and (iii) higher southbound volume primarily due to higher domestic seafood volume; China volume was 11.7 percent lower primarily due to (a) lower demand for the CLX and CLX+ services and (b) one less week, partially offset by incremental volume on the CCX service; Guam volume decreased 3.7 percent primarily due to lower retail-related volume; and Other containers volume increased 11.4 percent. ​ Ocean Transportation operating income increased $143.5 million during the year ended December 31, 2022, compared with the year ended December 31, 2021.
The decrease was primarily due to lower average freight rates and volume in China. ​ On a year-over-year FEU basis, Hawaii container volume decreased 3.0 percent primarily due to lower general westbound demand and lower eastbound volume; Alaska volume decreased 5.8 percent due to lower export seafood volume from the AAX; China volume was 13.7 percent lower primarily due to CCX volume in the first nine months of 2022 (the CCX service was discontinued in the third quarter 2022); Guam volume was 4.7 percent lower primarily due to lower general demand; and Other containers volume decreased 22.2 percent. ​ Ocean Transportation operating income decreased $986.4 million during the year ended December 31, 2023, compared with the year ended December 31, 2022.
The decrease was primarily due to a lower contribution from supply chain management consistent with lower demand in the Transpacific tradelane. 30 Table of Contents ​ CONSOLIDATED RESULTS OF OPERATIONS ​ The following analysis of the financial results of operations of Matson for the years ended December 31, 2022 and 2021 should be read in conjunction with the Consolidated Financial Statements in Item 8 of Part II below. ​ Consolidated Results: 2022 compared with 2021: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Years Ended December 31, (Dollars in millions, except per share amounts) ​ 2022 ​ 2021 ​ Change Operating revenue $ 4,343.0 $ 3,925.3 $ 417.7 10.6 % Operating costs and expenses ​ (2,989.4) ​ (2,737.8) ​ (251.6) 9.2 % Operating income ​ 1,353.6 ​ 1,187.5 ​ 166.1 14.0 % Interest income ​ ​ 8.2 ​ ​ — ​ ​ 8.2 100.0 % Interest expense ​ (18.0) ​ (22.6) ​ 4.6 (20.4) % Other income (expense), net ​ 8.5 ​ 6.4 ​ 2.1 32.8 % Income before taxes ​ 1,352.3 ​ 1,171.3 ​ 181.0 15.5 % Income taxes ​ (288.4) ​ (243.9) ​ (44.5) 18.2 % Net income ​ $ 1,063.9 ​ $ 927.4 ​ $ 136.5 14.7 % Basic earnings per share ​ $ 27.28 ​ $ 21.67 ​ $ 5.61 25.9 % Diluted earnings per share ​ $ 27.07 ​ $ 21.47 ​ $ 5.60 26.1 % ​ Fiscal Year: Fiscal years ended December 31, 2022 and 2021 include 52 and 53 weeks, respectively. ​ Consolidated Operating Revenue for the year ended December 31, 2022 increased $417.7 million, or 10.6 percent, compared to the prior year.
For the full year 2024, the Company expects to make other capital expenditure payments, including maintenance capital expenditures, of approximately $180 to $200 million, new vessel construction expenditures (including capitalized interest and owner’s items) of approximately $75 million, and dry-docking payments of approximately $35 million. ​ ​ CONSOLIDATED RESULTS OF OPERATIONS ​ The following analysis of the financial results of operations of Matson for the years ended December 31, 2023 and 2022 should be read in conjunction with the Consolidated Financial Statements in Item 8 of Part II below. ​ Consolidated Results: 2023 compared with 2022: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Years Ended December 31, (Dollars in millions, except per share amounts) ​ 2023 ​ 2022 ​ Change Operating revenue $ 3,094.6 $ 4,343.0 $ (1,248.4) (28.7) % Operating costs and expenses ​ (2,751.8) ​ (2,989.4) ​ 237.6 (7.9) % Operating income ​ 342.8 ​ 1,353.6 ​ (1,010.8) (74.7) % Interest income ​ ​ 36.0 ​ ​ 8.2 ​ ​ 27.8 339.0 % Interest expense ​ (12.2) ​ (18.0) ​ 5.8 (32.2) % Other income (expense), net ​ 6.4 ​ 8.5 ​ (2.1) (24.7) % Income before taxes ​ 373.0 ​ 1,352.3 ​ (979.3) (72.4) % Income taxes ​ (75.9) ​ (288.4) ​ 212.5 (73.7) % Net income ​ $ 297.1 ​ $ 1,063.9 ​ $ (766.8) (72.1) % Basic earnings per share ​ $ 8.42 ​ $ 27.28 ​ $ (18.86) (69.1) % Diluted earnings per share ​ $ 8.32 ​ $ 27.07 ​ $ (18.75) (69.3) % ​ Fiscal Year: Fiscal years ended December 31, 2023 and 2022 include 52 weeks. ​ Consolidated Operating Revenue for the year ended December 31, 2023 decreased $1,248.4 million, or 28.7 percent, compared to the prior year.
Deferred dry-docking payments were $25.7 million for the year ended December 31, 2022, compared to $36.3 million in the prior year.
Changes in operating lease liabilities were primarily due to operating leases that expired during the year ended December 31, 2023, partially offset by new operating leases entered into during the year ended December 31, 2023. Deferred dry-docking payments were $24.1 million for the year ended December 31, 2023, compared to $25.7 million in the prior year.
The decrease was primarily driven by lower other terminal revenue, lower lift volume and higher operating costs. ​ Logistics: In the fourth quarter 2022, operating income for the Company’s Logistics segment was $12.8 million, or $2.0 million lower compared to the level achieved in the fourth quarter 2021.
In the first quarter 2024, the Company expects Ocean Transportation operating income to be lower than the $27.8 million achieved in the first quarter 2023. ​ Logistics: In the fourth quarter 2023, operating income for the Company’s Logistics segment was $8.9 million, or $3.9 million lower compared to the level achieved in the fourth quarter 2022.
Assigned accounts receivable in the CCF are classified as part of accounts receivable in the Consolidated Balance Sheets due to the nature of the assignment. ​ On February 17, 2023, the Company pledged an additional $200.0 million of eligible accounts receivables to the CCF, and deposited an additional $100.0 million of cash into the CCF. ​ ​ Debt: The Company utilizes a mix of fixed and variable debt for liquidity and to fund the Company’s operations.
Assigned accounts receivable in the CCF are classified as part of accounts receivable in the Consolidated Balance Sheets due to the nature of the assignment. ​ In February 2024, the Company purchased approximately $450 million of fixed-rate U.S. Treasuries with CCF cash deposits.
In the near-term, the Company expects continued improvement in the Guam economy with increasing tourism and a low unemployment rate, but there are negative trends as a result of higher inflation, higher interest rates and the end of the pandemic-era stimulus helping personal income that creates uncertainty in the economic growth trajectory. ​ In Alaska, the Company’s container volume for the fourth quarter 2022 decreased 7.7 percent year-over-year due to (i) lower northbound volume primarily due to one less sailing and one less week and (ii) lower southbound volume primarily due to lower domestic seafood volume and one less week, partially offset by higher export seafood volume from Alaska-Asia Express (“AAX”).
For 2024, the Company expects volume to approximate the level achieved last year. ​ In Alaska, the Company’s container volume for the fourth quarter 2023 decreased 0.6 percent year-over-year due to lower export seafood volume from the Alaska-Asia Express service (“AAX”), partially offset by higher northbound volume due to an additional sailing and higher southbound volume due to higher domestic seafood volume.
Interest income for the year ended December 31, 2021 was nominal. ​ Interest Expense was $18.0 million for the year ended December 31, 2022, compared to $22.6 million in the prior year.
The increase in interest income was due to amounts on deposit in cash and cash equivalent accounts, and cash on deposit within the Capital Construction Fund that were invested in interest bearing accounts during the year ended December 31, 2023. ​ 33 Table of Contents Interest Expense was $12.2 million for the year ended December 31, 2023, compared to $18.0 million in the prior year.
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The decrease was primarily due to (i) lower retail- and hospitality-related demand compared to elevated pandemic levels in the year ago period and (ii) one less week .
Added
These include, for example, all references to 2024 or future years, including such references included under “Fourth Quarter 2023 Discussion and Update on Business Conditions,” as well as statements generally identified through the inclusion of words such as “anticipate,” “believe,” “can,” “commit,” “estimate,” “expect,” “goal,” “intend,” “may,” “plan,” “target,” “should,” “seek,” and “will,” or similar statements or variations of such terms and other similar expressions.
Removed
During the quarter, the Company saw retail customers continue to manage inventories to weaker consumer demand levels despite continued improvement in the Hawaii economy supported by a low unemployment rate and relatively strong tourist arrivals, including a modest improvement in international tourist trends.
Added
The decrease was primarily due to lower general demand. According to UHERO’s most recent forecast report, the Hawaii economy is projected to grow modestly despite challenged growth in visitor arrivals primarily due to reduced tourism to Maui as a result of the wildfires last year and sluggish recovery of international tourism.
Removed
In the near-term, Matson expects economic growth in Hawaii supported by continued strength in tourism and a low unemployment rate, but there are negative trends as a result of higher inflation, higher interest rates and the end of the pandemic-era stimulus helping personal income that creates uncertainty in the economic growth trajectory. ​ In China, the Company’s container volume in the fourth quarter 2022 decreased 47.2 percent year-over-year.
Added
The Company expects volume in 2024 to be comparable to the level in 2023, reflecting modest economic growth in Hawaii and stable market share. ​ In China, the Company’s container volume in the fourth quarter 2023 increased 23.3 percent year-over-year.
Removed
The decrease was primarily due to (i) lower demand for the CLX and CLX+ services, (ii) the discontinuation of the CCX service in the third quarter 2022 and (iii) one less week.
Added
The increase was primarily due to higher demand for the China service resulting in higher volumes for both CLX and CLX+. The Company achieved lower freight rates in the fourth quarter 2023 as compared to the prior year period.
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Matson continued to realize a significant rate premium over the Shanghai Containerized Freight Index (“SCFI”) in the fourth quarter 2022 but achieved average freight rates that were lower than in the year ago period. Currently in the Transpacific marketplace, business conditions remain challenging as retailers continue to right-size inventories amid weakening consumer demand, increasing interest rates and economic uncertainty.
Added
Currently in the Transpacific marketplace, the Company continues to see steady U.S. consumer demand, which the Company expects to lead to similar demand for Matson’s CLX and CLX+ services in 2024 as in 2023 .
Removed
As such, the Company expects its CLX and CLX+ services in the first quarter and first half of the year to reflect freight demand levels below normalized conditions with lower year-over-year volumes and a lower rate environment.
Added
The Company also expects average freight rates in 2024 to be modestly higher than the levels achieved in 2023. ​ In Guam, the Company’s container volume in the fourth quarter 2023 increased 2.0 percent year-over-year primarily due to higher general demand.
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Absent an economic “hard landing” in the U.S., Matson expects improved trade dynamics in the second half of 2023 as the Transpacific marketplace transitions to a more normalized level of demand.
Added
In the near-term, the Company expects continued improvement in the Guam economy with a low unemployment rate and a modest increase in tourism.
Removed
Regardless of the economic environment, Matson operates the two fastest and most reliable ocean services and, as a result, the Company expects to continue to earn a significant rate premium to the SCFI . ​ In Guam, the Company’s container volume in the fourth quarter 2022 decreased 14.0 percent year-over-year primarily due to lower retail-related demand.
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In the near-term, the Company expects continued economic growth in Alaska supported by a low unemployment rate, jobs growth and lower levels of inflation.
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In the near-term, the Company expects the Alaska economy to benefit from low unemployment and increased energy-related exploration and production activity as a result of elevated oil prices, but there are negative trends as a result of higher inflation, higher interest rates and the end of the pandemic-era stimulus helping personal income that creates uncertainty in the economic growth trajectory. ​ The contribution in the fourth quarter 2022 from the Company’s SSAT joint venture investment was $1.0 million, or $20.3 million lower than the fourth quarter 2021.

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Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Market Risk — interest-rate, FX, commodity exposure

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Biggest changeThese money market funds and deposits maintain a weighted average maturity of less than 90 days, and 38 Table of Contents accordingly, a one percent change in interest rates is not expected to have a material impact on the fair value of these investments or on interest income. ​ The Company may invest funds on deposit in the CCF in money market funds, U.S.
Biggest changeA one percent change in interest rates is not expected to have a material impact on the fair value of these investments or on the Company’s results of operations. ​ The Company may invest funds on deposit in the CCF in money market funds, U.S. Treasury Obligation Funds or other eligible credit-based investments for maturities of up to three years.
However, a one percent change in the New Zealand dollar exchange rate is not expected to have a material effect on the Company’s results of operations. ​ ​ 39 Table of Contents
A one percent change in the New Zealand dollar exchange rate is not expected to have a material effect on the Company’s results of operations. ​ ​ 41 Table of Contents
The Company believes that the transition to SOFR will not have a material impact on the Company’s financial condition and results of operations. ​ Additional information about the Company’s debt is included in Note 8 to the Consolidated Financial Statements in Item 8 of Part II below. ​ Investment Risks: The Company invests excess cash in short-term money market funds that purchase government securities or corporate debt securities, or in other deposit products allowed under the Company’s Cash Investment Policy.
For fixed rate debt, changes in market interest rates would not affect the Company’s financial condition or results of operations. ​ Additional information about the Company’s debt is included in Note 8 to the Consolidated Financial Statements in Item 8 of Part II below. ​ Investment Risks: The Company invests excess cash in short-term money market funds that purchase government securities or corporate debt securities, or in other deposit products.
Treasury Obligation Funds or other eligible investments. ​ Foreign Currency Risks: The Company has no material exposure to foreign currency risks, although it is indirectly affected by changes in currency rates to the extent that changes in rates affect tourism in Hawaii, Guam, Alaska and other locations.
A one percent change in interest rates is not expected to have a material impact on the fair value of these investments or on the Company’s results of operations. ​ Foreign Currency Risks: The Company has no material exposure to foreign currency risks, although it is indirectly affected by changes in currency rates to the extent that changes in rates affect tourism in Hawaii, Guam, Alaska and other locations.
Removed
For fixed rate debt, changes in market interest rates would not affect the Company’s financial condition or results of operations. ​ Interest on certain borrowings under the Company’s revolving credit facility is calculated using the London Interbank Offered Rate (“LIBOR”). LIBOR will be discontinued as a benchmark interest rate by mid-2023.
Added
These money market funds and deposits maintain a weighted average maturity of less than 90 days.
Removed
The discontinuation of LIBOR will require the Company and its lenders to transition from LIBOR to a new benchmark interest rate, the Secured Overnight Financing Rate (“SOFR”).

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