v3.25.2
GENERAL AND SIGNIFICANT ACCOUNTING POLICIES (Policies)
 6 Months Ended
Jun. 30, 2025
GENERAL AND SIGNIFICANT ACCOUNTING POLICIES  
Basis of Presentation

Basis of Presentation: The Condensed Consolidated Financial Statements are unaudited, and include the accounts of Matson, Inc. and all wholly-owned subsidiaries, after elimination of intercompany amounts and transactions. Significant investments in businesses, partnerships, and limited liability companies in which the Company does not have a controlling financial interest, but has the ability to exercise significant influence, are accounted for under the equity method. The Company accounts for its investment in SSAT using the equity method of accounting.

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Due to the nature of the Company’s operations, the results for interim periods are not necessarily indicative of results to be expected for the year. These Condensed Consolidated Financial Statements reflect all normal recurring adjustments that are, in the opinion of management, necessary for fair presentation of the results of the interim periods, and do not include all of the information and footnotes required by U.S. generally accepted accounting principles for complete consolidated financial statements.

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The Condensed Consolidated Financial Statements should be read in conjunction with the Consolidated Financial Statements and notes thereto included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2024, filed with the Securities and Exchange Commission (“SEC”) on February 28, 2025.
Fiscal Period

Fiscal Period: The period end for Matson covered by this report is June 30, 2025. The period end for MatNav and its subsidiaries covered by this report is June 27, 2025.
Significant Accounting Policies

Significant Accounting Policies: The Company’s significant accounting policies are described in Note 2 to the Consolidated Financial Statements included in Part II, Item 8 of the Company’s Annual Report on Form 10-K for the year ended December 31, 2024.

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Use of Estimates

Use of Estimates: The preparation of the interim Condensed Consolidated Financial Statements in conformity with accounting principles generally accepted in the U.S. requires management to make estimates and assumptions that affect the amounts reported. Estimates and assumptions are used for but not limited to: impairment of investments; impairment of long-lived assets, intangible assets and goodwill; capitalized interest; allowance for doubtful accounts and other receivables; legal contingencies; insurance reserves and other related liabilities; accrual estimates; pension and post-retirement estimates; multi-employer withdrawal liabilities; operating lease assets and liabilities; income (loss) from SSAT including estimates for impairment charges; and income taxes. Future results could be materially affected if actual results differ from these estimates and assumptions.
Prepaid Expenses and Other Assets

Prepaid Expenses and Other Assets: Prepaid expenses and other assets consisted of the following at June 30, 2025 and December 31, 2024:

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June 30, 

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December 31, 

Prepaid Expenses and Other Assets (in millions)

    

2025

    

2024

Vessel fuel

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$

31.7

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$

31.2

Prepaid insurance and insurance related receivables

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19.6

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19.1

Prepaid operating expenses

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11.8

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8.8

Income tax receivables, net

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—

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2.0

Other

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13.2

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12.8

Total

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$

76.3

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$

73.9
Recognition of Revenues and Expenses

Recognition of Revenues and Expenses: Revenue in the Company’s Condensed Consolidated Financial Statements is presented net of elimination of intercompany transactions. The following is a description of the Company’s principal revenue generating activities by segment, and the Company’s revenue recognition policy for each activity for the periods presented:

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Three Months Ended

 

Six Months Ended

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June 30, 

 

June 30, 

Ocean Transportation (in millions) (1)

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2025

    

2024

 

2025

    

2024

Ocean Transportation services

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$

671.0

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$

674.2

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$

1,303.9

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$

1,240.0

Terminal and other related services

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1.9

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11.0

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4.4

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19.7

Fuel sales

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2.7

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3.1

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4.7

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6.0

Vessel management and related services

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—

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1.6

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—

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3.2

Total

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$

675.6

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$

689.9

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$

1,313.0

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$

1,268.9

(1)Ocean Transportation revenue transactions are primarily denominated in U.S. dollars except for less than 3 percent of Ocean Transportation services revenue and fuel sales revenue categories which are denominated in foreign currencies.

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◾Ocean Transportation services revenue is recognized ratably over the duration of a voyage based on the relative transit time completed in each reporting period. Vessel operating costs and other ocean transportation operating costs, such as terminal operating overhead and general and administrative expenses, are charged to operating costs as incurred.
◾Terminal and other related services revenue is recognized as the services are performed. Related costs are recognized as incurred.
◾Fuel sales revenue and related costs are recognized when the Company has completed delivery of the product to the customer in accordance with the terms and conditions of the contract.
◾Vessel management and related services revenue is recognized in proportion to the services completed. Related costs are recognized as incurred. In July 2024, the Company discontinued its vessel management and related services.

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Three Months Ended

 

Six Months Ended

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June 30, 

 

June 30, 

Logistics (in millions) (1)

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2025

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2024

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2025

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2024

Transportation Brokerage and Freight Forwarding services

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$

137.2

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$

139.2

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$

264.5

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$

266.6

Warehousing services

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10.0

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10.3

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19.0

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19.4

Supply Chain Management services

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7.7

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8.0

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16.0

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14.6

Total

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$

154.9

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$

157.5

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$

299.5

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$

300.6

(1)Logistics revenue transactions are primarily denominated in U.S. dollars except for less than 3 percent of Transportation Brokerage and Freight Forwarding services revenue, and Supply Chain Management services revenue categories which are denominated in foreign currencies.

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◾Transportation Brokerage and Freight Forwarding services revenue consists of amounts billed to customers for services provided. The primary costs include third-party purchased transportation services, agent commissions, labor and equipment. Revenue and the related purchased third-party transportation costs are recognized over the duration of a delivery based upon the relative transit time completed in each reporting period. Labor, agent commissions, and other operating costs are expensed as incurred. The Company reports revenue on a gross basis as the Company serves as the principal in these transactions because it is responsible for fulfilling the contractual arrangements with the customer and has latitude in establishing prices.
◾Warehousing services revenue consist of amounts billed to customers for storage, handling, and value-added packaging of customer merchandise. Storage revenue is recognized in the month the service is provided to the customer. Storage related costs are recognized as incurred. Other Warehousing services revenue and related costs are recognized in proportion to the services performed.
◾Supply Chain Management and other services revenue, and related costs are recognized in proportion to the services performed.

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The Company generally invoices its customers at the commencement of the voyage or the transportation service being provided, or as other services are being performed. Revenue is deferred when services are invoiced in advance to the customer. The Company’s receivables are classified as short-term as collection terms are for periods of less than one year. The Company expenses sales commissions and contract acquisition costs as incurred because the amounts are generally immaterial. These expenses are included in general and administrative expenses in the Condensed Consolidated Statements of Income and Comprehensive Income.

Capitalized Interest

Capitalized Interest: The Company capitalizes interest costs during the period as the qualified assets are being readied for their intended use. The Company determined that vessel construction costs are considered qualifying assets for the purposes of capitalizing interest on these assets. The amount of capitalized interest is calculated based on the amount of expenditures incurred related to the construction of these vessels using a weighted average interest rate. The weighted average interest rate is determined using the Company’s average borrowings outstanding during the period. Capitalized interest is included in vessel construction in progress in property and equipment in the Company’s Condensed Consolidated Balance Sheets (see Note 5). The Company capitalized $1.0 million and $1.0 million of interest related to the construction of new vessels for the three months ended June 30, 2025 and 2024, and $2.1 million and $1.8 million for the six months ended June 30, 2025 and 2024, respectively.
Dividends

Dividends: The Company’s second quarter 2025 cash dividend of $0.34 per share was paid on June 5, 2025. On June 26, 2025, the Company’s Board of Directors declared a cash dividend of $0.36 per share payable on September 4, 2025 to shareholders of record on August 7, 2025.
Repurchase of Shares

Repurchase of Shares: During the three and six months ended June 30, 2025, the Company repurchased approximately 0.9 million and 1.4 million shares for a total cost of $93.7 million and $162.9 million, respectively. During the three and six months ended June 30, 2024, the Company repurchased approximately 0.6 million and 1.0 million shares for a total cost of $72.2 million and $121.1 million, respectively. As of June 30, 2025, the maximum number of remaining shares that may be repurchased under the Company’s share repurchase program was approximately 2.5 million shares.
Income taxes Income taxes: On July 4, 2025, new legislation commonly referred to as the One Big Beautiful Bill Act (the “Act”) was signed into law. Among other things, the Act provides for numerous changes to existing tax law including extending or making permanent certain tax provisions of the Tax Cuts and Jobs Act of 2017 that were set to expire. Certain provisions of the Act are expected to impact the Company’s income taxes, including 100 percent bonus depreciation for qualified capital expenditures acquired and placed in service after January 19, 2025 and amendments to the foreign-derived intangible income (“FDII”) regime. Under Accounting Standards Codification (“ASC”) 740, Income Taxes, the effects of the new legislation are recognized in the period of enactment, which is the date when the legislation was signed into law. The Company is currently evaluating the effects of the Act on the Company’s income taxes, but does not expect that it will have a material impact on the Company’s consolidated financial statements.
Reclassification

Reclassification: The Company reclassified amortization of deferred loan fees of $0.9 million from Depreciation and amortization to Other within cash flows from operating activities in the Consolidated Statements of Cash Flows for the six months ended June 30, 2024, to conform to current year cash flow presentation. There were no changes in Net cash provided by operating activities as a result of this reclassification for the six months ended June 30, 2024.
New Accounting Pronouncements

New Accounting Pronouncements: In November 2024, the Financial Accounting Standards Board (“FASB”) issued ASU 2024-03, Income Statement - Reporting Comprehensive Income - Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses (“ASU 2024-03”). ASU 2024-03 requires disclosure of certain expenses in the financial statements including employee compensation and depreciation and amortization of intangible assets on an annual and interim basis. ASU 2024-03 is effective for fiscal years beginning after December 15, 2026 and interim periods within fiscal years beginning after December 15, 2027. ASU 2024-03 can be adopted either: (i) prospectively to the financial statements issued for reporting periods after the effective date of the ASU or (ii) retrospectively to any or all prior periods presented in the financial statements. The Company is currently evaluating the effects of adopting ASU 2024-03 but does not expect it will have a material impact on the Company’s consolidated financial statements.

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In December 2023, the FASB issued ASU 2023-09, Improvements to Income Tax Disclosures (“ASU 2023-09”). ASU 2023-09 requires disaggregated information about a reporting entity’s effective tax rate reconciliation as well as information on income taxes paid. ASU 2023-09 is effective for annual periods beginning after December 15, 2024, and interim periods within fiscal years beginning after December 15, 2025. The Company is currently evaluating the effects of adopting ASU 2023-09 but does not expect it to have a material impact on the Company’s consolidated financial statements.