[10-Q] Matsons, Inc. Quarterly Earnings Report

Q: How did MATX revenue perform in Q2-25?

Total operating revenue slipped 2.0% YoY to $830.5 million , with both Ocean Transportation and Logistics slightly lower.

Q: What was Matson’s Q2-25 diluted EPS?

Diluted earnings per share were $2.92 , down from $3.31 in Q2-24.

Q: How much cash does Matson have after six months of 2025?

Cash and cash equivalents stood at $59.1 million on 30 Jun 2025, vs $266.8 million at year-end 2024.

Q: What is the status of Matson’s share repurchase program?

The company bought back 1.4 million shares for $162.9 m YTD; ~2.5 million shares remain authorized.

Q: When will the increased $0.36 dividend be paid?

The cash dividend is scheduled for 4 September 2025 to shareholders of record on 7 August 2025.

Filing Impact

(Neutral)

Filing Sentiment

(Neutral)

Form Type

10-Q

Rhea-AI Filing Summary

Matson, Inc. (MATX) Q2-25 10-Q highlights

Revenue: Q2 fell 2.0% YoY to $830.5 m; Ocean Transportation −2.1%, Logistics −1.6%.
Profitability: Operating income declined 9.3% to $113.0 m; net income dropped 16.4% to $94.7 m; diluted EPS $2.92 vs $3.31.
YTD view: Six-month revenue grew 2.7% to $1.61 bn; net income up 11.9% to $167.0 m, lifting diluted EPS to $5.09 (+17.6%).
Segment mix: Q2 Ocean Transportation generated $98.6 m op income (−9.5%); Logistics $14.4 m (−7.7%). Equity income from 35%-owned SSAT rose to $7.3 m vs $1.2 m.
Cash & liquidity: Cash fell to $59.1 m from $266.8 at FY-24 end, reflecting $162.9 m share repurchase, $22.3 m dividends and $175.5 m capex (incl. new Jones Act vessels). Debt trimmed to $381.0 m; $643.9 m undrawn on revolver.
Capital moves: New five-year $550 m SOFR-based credit facility signed 23-Jul-25; existing term-loan covenants eased. Board raised quarterly dividend to $0.36, payable 4-Sep-25.
Cash flow: Operating cash inflow down 44% YoY to $194.6 m; free cash negative after heavy vessel spend.
Outlook items: Management sees limited tax impact from July 4 “One Big Beautiful Bill” Act; no impairment triggers identified.

Positive

YTD earnings rebound: Net income up 11.9% and diluted EPS up 17.6% versus prior-year six-month period.
Strong liquidity access: $643.9 m availability on new $550 m revolver plus Capital Construction Fund $656.7 m.
Dividend increase: Board raised quarterly payout to $0.36, maintaining shareholder return program alongside repurchases.

Negative

Quarterly earnings decline: Q2 net income down 16.4% YoY; operating income dropped 9.3%.
Cash depletion: Cash balance fell 78% since year-end driven by share buybacks and high vessel capex.
Operating cash flow contraction: H1 operating cash generated $194.6 m, down 43.5% YoY, squeezing free cash flow.

Insights

TL;DR: Solid YTD rebound but Q2 softness and cash drain temper near-term enthusiasm; valuation hinge on China-U.S. volume recovery.

Q2 results confirm Matson’s premium CLX service is normalising after pandemic-era peaks. Revenue slide was modest, yet operating leverage amplified the drop in EPS. Ocean yield pressure and slightly higher cost per box drove the 9% op-income contraction. Conversely, SSAT equity income and modest fuel costs cushioned margins.

Six-month data are healthier, signalling FY-25 could still beat FY-24 if peak season volumes hold. Vessel construction and share buybacks explain the $208 m cash burn; leverage remains conservative at 0.1× net-debt/EBITDA with $644 m liquidity, so balance-sheet risk is contained. New SOFR-linked revolver extends tenor and lowers covenant friction.

Stock reaction likely neutral: investors expected soft comps, while dividend hike and ongoing repurchases offer support. Key watch-points are spot Transpac rates, progress on three new Aloha-class vessels, and whether capex can taper in 2026.

TL;DR: Rising capex and shrinking cash heighten liquidity sensitivity if freight downturn deepens.

Matson’s $175 m H1 capex—mostly new Jones Act hulls—plus $163 m buybacks cut cash reserves 78% in six months. While untapped credit lines exist, higher SOFR exposes earnings to rate volatility. Q2 operating margin slid to 13.6% from 14.7%; further erosion could breach 10% in a weak peak season.

Lease liabilities remain sizable ($294 m PV), and forward charter and dry-dock commitments are not disclosed here. Though debt maturities are long-dated, cumulative vessel payments will keep free cash flow negative through delivery. Any delay or cost overrun on the three new ships would pressure the Capital Construction Fund and potentially covenant headroom. Overall risk skewed slightly negative.

08/01/2025 - 06:11 AM

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Table of Contents

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-Q

☒

QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended June 30, 2025

☐

TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from to

Commission file number 001-34187

Matson, Inc.

(Exact name of registrant as specified in its charter)


Hawaii	99-0032630
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)

1411 Sand Island Parkway Honolulu, HI (Address of principal executive offices)	96819 (Zip Code)

(808) 848-1211

(Registrant’s telephone number, including area code)

Not Applicable

(Former name, former address, and former fiscal year, if changed since last report)

Securities registered pursuant to Section 12(b) of the Act:


Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common Stock, without par value	MATX	New York Stock Exchange

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ⌧ No ◻

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ⌧ No ◻

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.


Large accelerated filer ☒	Accelerated filer ☐

Non-accelerated filer ☐	Smaller reporting company ☐

	Emerging growth company ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

Number of shares of common stock outstanding as of June 30, 2025: 31,789,018

Table of Contents

MATSON, INC. AND SUBSIDIARIES

TABLE OF CONTENTS

		Page
Part I—FINANCIAL INFORMATION‌		1

Item 1.	Financial Statements (Unaudited)‌	1
	Condensed Consolidated Statements of Income and Comprehensive Income‌	1
	Condensed Consolidated Balance Sheets‌	2
	Condensed Consolidated Statements of Cash Flows‌	3
	Condensed Consolidated Statements of Shareholders’ Equity‌	4
	Notes to the Condensed Consolidated Financial Statements‌	5
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations‌	18
Item 3.	Quantitative and Qualitative Disclosures about Market Risk‌	27
Item 4.	Controls and Procedures‌	27

Part II—OTHER INFORMATION‌		27

Item 1.	Legal Proceedings‌	27
Item 1A.	Risk Factors‌	28
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds‌	28
Item 3.	Defaults Upon Senior Securities‌	28
Item 4.	Mine Safety Disclosures‌	28
Item 5.	Other Information‌	28
Item 6.	Exhibits‌	29
	Signatures‌	31

Table of Contents

PART I. FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

MATSON, INC. AND SUBSIDIARIES

Condensed Consolidated Statements of Income and Comprehensive Income

(Unaudited)


	Three Months Ended				Six Months Ended
	June 30,				June 30,
(In millions, except per share amounts)	2025		2024		2025		2024
Operating Revenue:
Ocean Transportation	$	675.6	$	689.9	$	1,313.0	$	1,268.9
Logistics		154.9		157.5		299.5		300.6
Total Operating Revenue		830.5		847.4		1,612.5		1,569.5

Costs and Expenses:
Operating costs		(650.4)		(646.9)		(1,281.5)		(1,259.1)
Income from SSAT		7.3		1.2		13.9		1.6
General and administrative		(74.4)		(77.1)		(149.8)		(150.5)
Total Costs and Expenses		(717.5)		(722.8)		(1,417.4)		(1,408.0)

Operating Income		113.0		124.6		195.1		161.5
Interest income		8.0		18.8		17.4		27.6
Interest expense		(1.7)		(2.1)		(3.4)		(4.3)
Other income (expense), net		2.4		1.8		4.8		3.6
Income before Taxes		121.7		143.1		213.9		188.4
Income taxes		(27.0)		(29.9)		(46.9)		(39.1)
Net Income	$	94.7	$	113.2	$	167.0	$	149.3

Comprehensive Income (Loss), Net of Income Taxes:
Net Income	$	94.7	$	113.2	$	167.0	$	149.3
Other Comprehensive Income (Loss):
Net change in pension and post-retirement liabilities		(0.9)		(0.7)		(1.7)		(1.5)
Other adjustments		1.4		0.3		1.9		(0.5)
Total Other Comprehensive Income (Loss), Net of Income Taxes		0.5		(0.4)		0.2		(2.0)
Total Comprehensive Income	$	95.2	$	112.8	$	167.2	$	147.3

Basic Earnings Per Share	$	2.95	$	3.34	$	5.14	$	4.38
Diluted Earnings Per Share	$	2.92	$	3.31	$	5.09	$	4.33

Weighted Average Number of Shares Outstanding:
Basic		32.1		33.9		32.5		34.1
Diluted		32.4		34.2		32.8		34.5

See Notes to Condensed Consolidated Financial Statements.

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MATSON, INC. AND SUBSIDIARIES

Condensed Consolidated Balance Sheets

(Unaudited)


	June 30,		December 31,
(In millions)	2025		2024
ASSETS
Current Assets:
Cash and cash equivalents	$	59.1	$	266.8
Accounts receivable, net of allowance for credit losses of $9.0 million and $9.8 million, respectively		289.1		268.9
Prepaid expenses and other assets		76.3		73.9
Total current assets		424.5		609.6
Long-term Assets:
Investment in SSAT		98.3		84.1
Property and equipment, net		2,359.7		2,260.9
Operating lease right of use assets		294.2		357.7
Goodwill		327.8		327.8
Intangible assets, net		152.9		159.4
Capital Construction Fund		656.7		642.6
Deferred dry-docking costs, net		83.5		73.7
Other long-term assets		84.5		79.6
Total long-term assets		4,057.6		3,985.8
Total Assets	$	4,482.1	$	4,595.4

LIABILITIES AND SHAREHOLDERS’ EQUITY
Current Liabilities:
Current portion of debt	$	39.7	$	39.7
Accounts payable and accruals		282.4		268.5
Operating lease liabilities		109.1		129.0
Other liabilities		115.7		123.2
Total current liabilities		546.9		560.4
Long-term Liabilities:
Long-term debt, net of deferred loan fees		331.5		350.8
Long-term operating lease liabilities		185.0		229.5
Deferred income taxes		693.8		693.4
Other long-term liabilities		106.9		109.3
Total long-term liabilities		1,317.2		1,383.0
Commitments and Contingencies (see Note 15)
Shareholders’ Equity:
Common stock		23.8		24.7
Additional paid in capital		288.0		296.7
Accumulated other comprehensive loss, net		(6.3)		(6.5)
Retained earnings		2,312.5		2,337.1
Total shareholders’ equity		2,618.0		2,652.0
Total Liabilities and Shareholders’ Equity	$	4,482.1	$	4,595.4

See Notes to Condensed Consolidated Financial Statements.

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MATSON, INC. AND SUBSIDIARIES

Condensed Consolidated Statements of Cash Flows

(Unaudited)


	Six Months Ended June 30,
(In millions)	2025		2024
Cash Flows From Operating Activities:
Net income	$	167.0	$	149.3
Reconciling adjustments:
Depreciation and amortization		81.8		75.5
Amortization of operating lease right of use assets		66.9		68.1
Deferred income taxes		0.3		7.5
Share-based compensation expense		11.7		12.0
Income from SSAT		(13.9)		(1.6)
Distributions from SSAT		—		14.0
Other		(4.7)		(5.6)
Changes in assets and liabilities:
Accounts receivable, net		(19.7)		(28.9)
Deferred dry-docking payments		(23.8)		(17.3)
Deferred dry-docking amortization		13.6		13.7
Prepaid expenses and other assets		(10.6)		114.6
Accounts payable, accruals and other liabilities		(3.0)		17.4
Operating lease assets and liabilities, net		(67.8)		(69.0)
Other long-term liabilities		(3.2)		(5.2)
Net cash provided by operating activities		194.6		344.5

Cash Flows From Investing Activities:
Vessel construction expenditures		(104.1)		(38.2)
Capital expenditures (excluding vessel construction expenditures)		(71.4)		(86.9)
Proceeds from disposal of property and equipment, net		0.5		3.2
Cash and interest deposited into the Capital Construction Fund		(109.1)		(45.0)
Withdrawals from Capital Construction Fund		100.7		35.8
Net cash used in investing activities		(183.4)		(131.1)

Cash Flows From Financing Activities:
Repayments of debt		(19.9)		(19.9)
Dividends paid		(22.3)		(22.1)
Repurchase of Matson common stock		(160.4)		(120.1)
Tax withholding related to net share settlements of restricted stock units		(16.3)		(17.0)
Net cash used in financing activities		(218.9)		(179.1)

Net (Decrease) Increase in Cash, Cash Equivalents and Restricted Cash		(207.7)		34.3
Cash and Cash Equivalents, and Restricted Cash, Beginning of the Period		266.8		136.3
Cash and Cash Equivalents, and Restricted Cash, End of the Period	$	59.1	$	170.6

Reconciliation of Cash, Cash Equivalents and Restricted Cash, End of the Period:
Cash and Cash Equivalents	$	59.1	$	168.2
Restricted Cash		—		2.4
Total Cash and Cash Equivalents, and Restricted Cash, End of the Period	$	59.1	$	170.6

Supplemental Cash Flow Information:
Interest paid, net of capitalized interest	$	2.7	$	3.5
Income tax payments (refunds), net	$	40.7	$	(114.3)

Non-cash Information:
Capital expenditures included in accounts payable, accruals and other liabilities	$	4.0	$	15.3
Accrued dividends	$	11.4	$	11.4

See Notes to Condensed Consolidated Financial Statements.

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MATSON, INC. AND SUBSIDIARIES

Condensed Consolidated Statements of Shareholders’ Equity

(Unaudited)


						Accumulated
	Common Stock			Additional		Other
		Stated		Paid In		Comprehensive		Retained
(In millions, except per share amounts)	Shares	Value		Capital		Income (Loss)		Earnings		Total
Balance at December 31, 2024	33.0	$	24.7	$	296.7	$	(6.5)	$	2,337.1	$	2,652.0
Net income	—		—		—		—		72.3		72.3
Other comprehensive income (loss), net of tax	—		—		—		(0.3)		—		(0.3)
Share-based compensation	—		—		5.8		—		—		5.8
Shares issued, net of shares withheld for employee taxes	0.1		0.1		(16.2)		—		—		(16.1)
Shares repurchased	(0.5)		(0.3)		(1.6)		—		(67.3)		(69.2)
Dividends ($0.34 per share)	—		—		—		—		(11.3)		(11.3)
Balance at March 31, 2025	32.6		24.5		284.7		(6.8)		2,330.8		2,633.2
Net income	—		—		—		—		94.7		94.7
Other comprehensive income (loss), net of tax	—		—		—		0.5		—		0.5
Share-based compensation	—		—		5.9		—		—		5.9
Shares issued, net of shares withheld for employee taxes	0.1		—		(0.2)		—		—		(0.2)
Shares repurchased	(0.9)		(0.7)		(2.4)		—		(90.6)		(93.7)
Dividends ($0.34 per share and $0.36 per share)	—		—		—		—		(22.4)		(22.4)
Balance at June 30, 2025	31.8	$	23.8	$	288.0	$	(6.3)	$	2,312.5	$	2,618.0


						Accumulated
	Common Stock			Additional		Other
		Stated		Paid In		Comprehensive		Retained
(In millions, except per share amounts)	Shares	Value		Capital		Income (Loss)		Earnings		Total
Balance at December 31, 2023	34.4	$	25.8	$	293.4	$	(8.2)	$	2,089.7	$	2,400.7
Net income	—		—		—		—		36.1		36.1
Other comprehensive income (loss), net of tax	—		—		—		(1.6)		—		(1.6)
Share-based compensation	—		—		5.7		—		—		5.7
Shares issued, net of shares withheld for employee taxes	0.2		0.1		(17.3)		—		—		(17.2)
Shares repurchased	(0.4)		(0.3)		(1.6)		—		(47.0)		(48.9)
Equity interest in SSAT (See Note 4)	—		—		—		—		10.1		10.1
Dividends ($0.32 per share)	—		—		—		—		(11.1)		(11.1)
Balance at March 31, 2024	34.2		25.6		280.2		(9.8)		2,077.8		2,373.8
Net income	—		—		—		—		113.2		113.2
Other comprehensive income (loss), net of tax	—		—		—		(0.4)		—		(0.4)
Share-based compensation	—		—		6.3		—		—		6.3
Shares issued, net of shares withheld for employee taxes	—		—		0.2		—		—		0.2
Shares repurchased	(0.6)		(0.4)		(2.0)		—		(69.8)		(72.2)
Dividends ($0.32 per share and $0.34 per share)	—		—		—		—		(22.4)		(22.4)
Balance at June 30, 2024	33.6	$	25.2	$	284.7	$	(10.2)	$	2,098.8	$	2,398.5

See Notes to Condensed Consolidated Financial Statements.

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MATSON, INC. AND SUBSIDIARIES

NOTES TO THE CONDENSED CONSOLIDATED FINANICAL STATEMENTS

(Unaudited)

1. DESCRIPTION OF THE BUSINESS

Matson, Inc., a holding company incorporated in the State of Hawaii, and its subsidiaries (“Matson” or the “Company”), is a leading provider of ocean transportation and logistics services. The Company consists of two segments, Ocean Transportation and Logistics.

Ocean Transportation: Matson’s Ocean Transportation business is conducted through Matson Navigation Company, Inc. (“MatNav”), a wholly-owned subsidiary of Matson, Inc. Founded in 1882, MatNav provides a vital lifeline of ocean freight transportation services to the domestic non-contiguous economies of Hawaii, Alaska and Guam, and to other island economies in Micronesia. MatNav also operates premium, expedited services from China to Long Beach, California, which includes transshipment of cargo from other Asia origins, provides services to Okinawa, Japan and various islands in the South Pacific, and operates an international export service from Alaska to Asia. In addition, subsidiaries of MatNav provide stevedoring, refrigerated cargo services, inland transportation and other terminal services for MatNav on the Hawaiian islands of Oahu, Hawaii, Maui and Kauai, and in Alaska.

Matson has a 35 percent ownership interest in SSA Terminals, LLC (“SSAT”), a joint venture between Matson Ventures, Inc., a wholly-owned subsidiary of MatNav, and SSA Ventures, Inc., a subsidiary of Carrix, Inc. SSAT currently provides terminal and stevedoring services to various carriers at eight terminal facilities on the U.S. West Coast, including three facilities dedicated for MatNav’s use. Matson records its share of income from SSAT in costs and expenses in the Condensed Consolidated Statements of Income and Comprehensive Income, and within the Ocean Transportation segment due to the nature of SSAT’s operations.

Logistics: Matson’s Logistics business is conducted through Matson Logistics, Inc. (“Matson Logistics”), a wholly-owned subsidiary of MatNav. Established in 1987, Matson Logistics extends the geographic reach of Matson’s transportation network throughout North America and Asia, and is an asset-light business that provides a variety of logistics services to its customers including: (i) multimodal transportation brokerage of domestic and international rail intermodal services, long-haul and regional highway trucking services, specialized hauling, flat-bed and project services, less-than-truckload services, and expedited freight services (collectively, “Transportation Brokerage” services); (ii) less-than-container load (“LCL”) consolidation and freight forwarding services (collectively, “Freight Forwarding” services); (iii) warehousing, trans-loading, value-added packaging and distribution services (collectively, “Warehousing” services); and (iv) purchase order management, booking services, and non-vessel operating common carrier (“NVOCC”) freight forwarding services (collectively, “Supply Chain Management” services).

2. GENERAL AND SIGNIFICANT ACCOUNTING POLICIES

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

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

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

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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: 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.

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 consisted of the following at June 30, 2025 and December 31, 2024:


	June 30,		December 31,
Prepaid Expenses and Other Assets (in millions)	2025		2024
Vessel fuel	$	31.7	$	31.2
Prepaid insurance and insurance related receivables		19.6		19.1
Prepaid operating expenses		11.8		8.8
Income tax receivables, net		—		2.0
Other		13.2		12.8
Total	$	76.3	$	73.9

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:


	Three Months Ended				Six Months Ended
	June 30,				June 30,
Ocean Transportation (in millions) (1)	2025		2024		2025		2024
Ocean Transportation services	$	671.0	$	674.2	$	1,303.9	$	1,240.0
Terminal and other related services		1.9		11.0		4.4		19.7
Fuel sales		2.7		3.1		4.7		6.0
Vessel management and related services		—		1.6		—		3.2
Total	$	675.6	$	689.9	$	1,313.0	$	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.

◾

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
	June 30,				June 30,
Logistics (in millions) (1)	2025		2024		2025		2024
Transportation Brokerage and Freight Forwarding services	$	137.2	$	139.2	$	264.5	$	266.6
Warehousing services		10.0		10.3		19.0		19.4
Supply Chain Management services		7.7		8.0		16.0		14.6
Total	$	154.9	$	157.5	$	299.5	$	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.

◾

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.

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: 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: 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: 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: 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

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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: 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: 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.

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.

3. REPORTABLE SEGMENTS

Reportable segments are components of an enterprise that engage in business activities from which it may earn revenues and incur expenses, whose operating results are regularly reviewed by the chief operating decision maker (“CODM”) to make decisions about resources to be allocated to the segment and assess its performance, and for which discrete financial information is available. The Company’s CODM is its Chief Executive Officer.

The Company identified two reportable segments on the basis of internal information provided to the CODM: Ocean Transportation and Logistics which are described in Note 1. Each segment is managed separately based upon fundamental differences in the operations of each segment. The Company’s Ocean Transportation service primarily involves the transportation of customer cargo on Company owned and chartered vessels. The Company’s Logistics service provides customers with logistics solutions primarily using third-party purchased transportation. The Company’s CODM assesses the performance of each segment using operating income. The Company’s CODM reviews the performance of each segment using monthly internal reports which provide variance analysis of actual results by segment compared to budget, forecast and prior year. The Company’s CODM uses this information when making decisions about the allocation of operating and capital resources to each segment. Segment balance sheet information is not provided to the CODM as capital decisions are based upon the Company’s consolidated balance sheet.

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Reportable segment financial information for the three months ended June 30, 2025 and 2024 are as follows:


	Three Months Ended						Three Months Ended
	June 30, 2025						June 30, 2024
(In millions)	Ocean Transportation		Logistics		Total		Ocean Transportation		Logistics		Total
Operating Revenue (1)(2)	$	675.6	$	154.9	$	830.5	$	689.9	$	157.5	$	847.4

Operating Expenses:
Operating costs:
Direct cargo expense		249.7		—		249.7		245.0		—		245.0
Vessel operating expense		150.6		—		150.6		156.8		—		156.8
Operating overhead (3)		86.5		—		86.5		82.6		—		82.6
Direct operating costs		—		122.4		122.4		—		124.1		124.1
Depreciation and amortization		37.9		3.3		41.2		34.9		3.5		38.4
Total operating costs		524.7		125.7		650.4		519.3		127.6		646.9
Income from SSAT		(7.3)		—		(7.3)		(1.2)		—		(1.2)
General and administrative		59.6		14.8		74.4		62.8		14.3		77.1
Total Costs and Expenses		577.0		140.5		717.5		580.9		141.9		722.8

Operating Income:	$	98.6	$	14.4		113.0	$	109.0	$	15.6		124.6
Interest income						8.0						18.8
Interest expense						(1.7)						(2.1)
Other income (expense), net						2.4						1.8
Income before Taxes						121.7						143.1
Income taxes						(27.0)						(29.9)
Net Income					$	94.7					$	113.2

Capital Expenditures (4)	$	85.1	$	1.2	$	86.3	$	67.9	$	1.9	$	69.8

(1)	Ocean Transportation operating revenue excludes inter-segment revenue of $25.5 million and $22.8 million for the three months ended June 30, 2025 and 2024, respectively.

(2)	Logistics operating revenue excludes inter-segment revenue of $37.0 million and $39.0 million for the three months ended June 30, 2025 and 2024, respectively.

(3)	Ocean Transportation operating overhead includes dry-docking amortization of $7.0 million and $6.9 million for the three months ended June 30, 2025 and 2024, respectively.

(4)	Capital expenditures exclude accrued capital expenditures of $4.0 million and $15.3 million as of June 30, 2025 and 2024, respectively.

Reportable segment financial information for the six months ended June 30, 2025 and 2024 are as follows:


	Six Months Ended						Six Months Ended
	June 30, 2025						June 30, 2024
(In millions)	Ocean Transportation		Logistics		Total		Ocean Transportation		Logistics		Total
Operating Revenue (5)(6)	$	1,313.0	$	299.5	$	1,612.5	$	1,268.9	$	300.6	$	1,569.5

Operating Expenses:
Operating costs:
Direct cargo expense		487.9		—		487.9		473.8		—		473.8
Vessel operating expense		298.0		—		298.0		309.8		—		309.8
Operating overhead (7)		173.5		—		173.5		158.6		—		158.6
Direct operating costs		—		240.3		240.3		—		241.4		241.4
Depreciation and amortization		75.2		6.6		81.8		69.2		6.3		75.5
Total operating costs		1,034.6		246.9		1,281.5		1,011.4		247.7		1,259.1
Income from SSAT		(13.9)		—		(13.9)		(1.6)		—		(1.6)
General and administrative		120.1		29.7		149.8		122.5		28.0		150.5
Total Costs and Expenses		1,140.8		276.6		1,417.4		1,132.3		275.7		1,408.0

Operating Income:	$	172.2	$	22.9		195.1	$	136.6	$	24.9		161.5
Interest income						17.4						27.6
Interest expense						(3.4)						(4.3)
Other income (expense), net						4.8						3.6
Income before Taxes						213.9						188.4
Income taxes						(46.9)						(39.1)
Net Income					$	167.0					$	149.3

Capital Expenditures (8)	$	173.2	$	2.3	$	175.5	$	118.9	$	6.2	$	125.1

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(5)	Ocean Transportation operating revenue excludes inter-segment revenue of $46.9 million and $42.5 million for the six months ended June 30, 2025 and 2024, respectively.

(6)	Logistics operating revenue excludes inter-segment revenue of $69.6 million and $65.9 million for the six months ended June 30, 2025 and 2024, respectively.

(7)	Ocean Transportation operating overhead includes dry-docking amortization of $13.6 million and $13.7 million for the six months ended June 30, 2025 and 2024, respectively.

(8)	Capital expenditures exclude accrued capital expenditures of $4.0 million and $15.3 million as of June 30, 2025 and 2024, respectively.

Ocean Transportation’s operating expenses includes the following:

●	Operating costs includes:

Direct cargo expense includes terminal handling costs including labor and wharfage, outside purchased transportation and other related costs.

Vessel operating expense includes crew wages and related costs; fuel; pilots, tugs, lines and related costs; vessel charter expenses; and other vessel operating related expenses.

Operating overhead expense includes vessel repair and maintenance costs, inactive vessel costs, dry-docking amortization, equipment lease costs, equipment repair costs, vessel insurance, port engineers and other maintenance costs, other vessel and shoreside related overhead and other indirect costs.

Depreciation and amortization expense includes depreciation of property and equipment and amortization of intangible assets.

●	Income from SSAT includes the Company’s share of income from its equity investment in SSAT and has been aggregated into the Ocean Transportation segment due to the operations of SSAT being an integral part of the Company’s Ocean Transportation business (see Note 4).

●	General and administrative expense includes employee salaries, wages and other related costs, equipment maintenance, computer hardware and software, professional fees and other general and administrative expenses.

Logistics’ operating expenses includes the following:

●	Operating costs includes:

Direct operating expense includes transportation costs, transportation brokerage expenses, agency commissions, leases of warehouses, cross-dock and other facility operating costs, wages and other related costs, and other operating overhead.

Depreciation and amortization expense includes depreciation of property and equipment and amortization of intangible assets.

●	General and administrative expense includes employee salaries, wages and other related costs, computer hardware and software, professional fees and other general and administrative expenses.

The Company’s Ocean Transportation segment provides ocean transportation services to the Logistics segment, and the Logistics segment provides logistics services to the Ocean Transportation segment in certain transactions. Accordingly, inter-segment revenue of $62.5 million and $61.8 million for the three months ended June 30, 2025 and 2024, and $116.5 million and $108.4 million for the six months ended June 30, 2025 and 2024, respectively, have been eliminated from consolidated operating revenues. In arrangements where the customer purchases ocean transportation and logistics services, the revenues are allocated to each reportable segment based upon the contractual amounts for each type of service.

4. INVESTMENT IN SSAT

The Company’s investment in SSAT is described in Note 4 to the Consolidated Financial Statements included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2024. Condensed income statement information for SSAT for the three and six months ended June 30, 2025 and 2024 consisted of the following:


	Three Months Ended				Six Months Ended
	June 30,				June 30,
(In millions)	2025		2024		2025		2024
Operating revenue	$	307.7	$	273.9	$	619.2	$	544.2
Operating costs and expenses		(294.6)		(278.5)		(592.1)		(556.9)
Operating income (loss)		13.1		(4.6)		27.1		(12.7)
SSAT’s Net Income (Loss) (1)	$	18.7	$	2.1	$	36.4	$	(1.7)
Company’s Share of SSAT’s Net Income (Loss) (2)	$	7.3	$	1.2	$	13.9	$	1.6

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(1)	Includes earnings and losses from equity method investment held by SSAT less earnings and losses allocated to non-controlling interests.

(2)	The Company records its share of net income (loss) from SSAT in costs and expenses in the Condensed Consolidated Statement of Income and Comprehensive Income due to the nature of SSAT’s operations.

The Company’s investment in SSAT was $98.3 million and $84.1 million at June 30, 2025 and December 31, 2024, respectively.

On March 1, 2024, SSAT completed the sale of 25 percent of its equity interest in SSA Terminals (Seattle Terminals), LLC (“SSAT ST”) to a third-party company. After the completion of this transaction, SSAT retains a 50 percent controlling interest in SSAT ST, while the third-party company increased its non-controlling interest to 50 percent in SSAT ST. As a result of this transaction during the three months ended March 31, 2024, the Company recorded an increase in its investment in SSAT of approximately $13.2 million and increase in deferred income taxes of $3.1 million, and a corresponding increase in retained earnings of $10.1 million.

5. PROPERTY AND EQUIPMENT

Property and equipment as of June 30, 2025 and December 31, 2024 consisted of the following:


	June 30,		December 31,
(In millions)	2025		2024
Cost:
Vessels	$	2,487.0	$	2,475.2
Containers and equipment		910.8		883.8
Terminal equipment and other property		152.8		152.3
New vessel construction in progress		302.9		198.8
Other construction in progress		63.0		42.6
Total Property and Equipment		3,916.5		3,752.7
Less: Accumulated Depreciation		(1,556.8)		(1,491.8)
Total Property and Equipment, net	$	2,359.7	$	2,260.9

New vessel construction in progress at June 30, 2025 and December 31, 2024 includes milestone progress payments, capitalized interest and other costs related to the construction of three new Jones Act vessels.

6. GOODWILL AND INTANGIBLES

Goodwill by segment as of June 30, 2025 and December 31, 2024 consisted of the following:


	Ocean
(In millions)	Transportation		Logistics		Total
Goodwill	$	222.6	$	105.2	$	327.8

Intangible assets as of June 30, 2025 and December 31, 2024 consisted of the following:


	June 30,		December 31,
(In millions)	2025		2024
Customer Relationships:
Ocean Transportation	$	140.6	$	140.6
Logistics		106.7		106.2
Total		247.3		246.8
Less: Accumulated Amortization		(121.7)		(114.7)
Total Customer Relationships, net		125.6		132.1
Trade name – Logistics		27.3		27.3
Total Intangible Assets, net	$	152.9	$	159.4

The Company evaluates its goodwill and intangible assets for possible impairment in the fourth quarter, or whenever events or changes in circumstances indicate that it is more likely than not that the fair value is less than its carrying

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amount. The Company has reporting units within the Ocean Transportation and Logistics reportable segments. The Company considered the general economic and market conditions and its impact on the performance of each of the Company’s reporting units. Based on the Company’s assessment of its market capitalization, future forecasts and the amount of excess of fair value over the carrying value of the reporting units in the 2024 annual impairment tests, the Company concluded that an impairment triggering event did not occur during the three and six months ended June 30, 2025.

The Company continues to monitor events and changes in circumstances that could negatively impact the key assumptions used in determining the fair value, including the amount and timing of estimated future cash flows generated by the reporting units, long-term growth and discount rates, comparable company market valuations, and industry and economic trends, including the impact of tariffs. It is possible that future changes in such circumstances, including future changes in the assumptions and estimates used in assessing the fair value of the reporting unit, could require the Company to record a non-cash impairment charge.

7. CAPITAL CONSTRUCTION FUND

The Capital Construction Fund (“CCF”) is described in Note 7 to the Consolidated Financial Statements included in Part II, Item 8 of the Company’s Annual Report on Form 10-K for the year ended December 31, 2024. A summary of the activities within the CCF cash and cash equivalents, and investments account for the six months ended June 30, 2025 and 2024 consisted of the following:


	Six Months Ended
	June 30,
(In millions)	2025		2024
CCF Cash and Cash Equivalents:
CCF cash and cash equivalents balance at beginning of period	$	230.7	$	599.4
Cash withdrawal for the purchase of U.S. Treasury debt securities and accrued interest		—		(449.8)
Proceeds from U.S. Treasury debt securities at maturity		91.1		—
Interest income on cash and cash equivalents, and CCF investments		8.3		11.0
Repurchase of assigned accounts receivable		100.7		35.8
Qualifying withdrawal payments for vessel construction expenditures		(100.7)		(35.8)
Total CCF cash and cash equivalents balance at end of period		330.1		160.6

CCF Investments:
CCF investments balance at beginning of period		411.9		—
Purchase of U.S. Treasury debt securities		—		448.1
Sale of U.S. Treasury debt securities at maturity		(91.1)		—
Accretion of investments		5.8		5.2
Total CCF investments balance at end of period		326.6		453.3
Total CCF cash and cash equivalents, and investments balance at end of period	$	656.7	$	613.9

CCF Cash and Cash Equivalents: Cash on deposit in the CCF account is invested in a short-term U.S. Treasury obligations fund with daily liquidity. At June 30, 2025, these short-term securities had a weighted average life of 99 days.

CCF Investments: In February 2024, the Company purchased approximately $448.1 million of fixed-rate U.S. Treasuries with accrued interest of $1.7 million using CCF cash. The fixed-rate debt securities were purchased at a discount and have various maturity dates of less than 2 years. The cost of these investments accretes to face value on a straight-line basis until maturity. Such accretion is included in interest income in the Condensed Consolidated Statements of Income and Comprehensive Income.

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As of June 30, 2025, CCF investments maturities are as follows:


	As of
	June 30, 2025
Year (in millions)	Cost		Fair Value
Remainder of 2025	$	103.7	$	103.7
2026		170.5		171.0
2027		52.4		52.7
Total CCF investments	$	326.6	$	327.4

CCF cash and cash equivalents, and investments are classified as a long-term asset on the Company’s Condensed Consolidated Balance Sheets as the Company intends to use withdrawals to fund qualified milestone progress payments for the construction of three new Jones Act vessels.

CCF Assigned Accounts Receivable: As of June 30, 2025 and December 31, 2024, eligible accounts receivable of $80.2 million and $178.1 million were assigned to the CCF, respectively. Due to the nature of the assignment of eligible accounts receivable into the CCF, such assigned amounts are classified as part of accounts receivable in the Condensed Consolidated Balance Sheets.

8. DEBT

As of June 30, 2025 and December 31, 2024, the Company’s debt consisted of the following:


	June 30,		December 31,
(In millions)	2025		2024
Private Placement Term Loans:
3.37 %, payable through 2027	$	28.8	$	34.6
3.14 %, payable through 2031		93.0		100.1
Title XI Debt:
1.22 %, payable through 2043		146.4		150.3
1.35 %, payable through 2044		112.8		115.9
Total Debt		381.0		400.9
Less: Current portion		(39.7)		(39.7)
Total Long-term Debt		341.3		361.2
Less: Deferred loan fees		(9.8)		(10.4)
Total Long-term Debt, net of deferred loan fees	$	331.5	$	350.8

Except as described below, the Company’s debt is described in Note 8 to the Consolidated Financial Statements included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2024.

Private Placement Term Loans: In September 2016, the Company issued $200.0 million of 15-year senior unsecured notes (the “Series D Notes”) at an interest rate of 3.14 percent, payable semi-annually. In December 2016, the Company issued $75 million of 11-year senior unsecured notes at an interest rate of 3.37 percent, payable semi-annually.

Revolving Credit Facility: On July 23, 2025, the Company entered into a Third Amended and Restated Credit Agreement (the “Credit Agreement”), which provides for a five-year revolving credit facility, and $550 million in loan commitments, with an uncommitted $300 million increase option. The Credit Agreement amended certain covenants and other terms including (i) amending the pricing grid to provide for pricing ranging from, at the Company’s election, Secured Overnight Financing Rate (“SOFR”) plus a margin between 1.125 percent and 1.75 percent depending on the Company’s consolidated net leverage ratio, or base rate plus a margin between 0.125 percent and 0.75 percent depending on the Company’s consolidated net leverage ratio; and (ii) eliminating the minimum consolidated interest coverage ratio financial covenant. The Company may prepay any amount outstanding under the Credit Agreement without premium or penalty, in accordance with the terms of the Credit Agreement. The Credit Agreement contains affirmative, negative and financial covenants customary for financings of this type, including, among other things, limitations on certain other indebtedness, loans and investments, liens, mergers, asset sales, and transactions with affiliates. The Credit Agreement also contains customary events of default. The Company paid fees of approximately $1.7 million in connection with the closing of the Credit Agreement.

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As of June 30, 2025, the Company had $643.9 million of remaining borrowing availability under the $650 million revolving credit facility then in effect. The Company used $6.1 million of the revolving credit facility for letters of credit outstanding as of June 30, 2025. Borrowings under the revolving credit facility are classified as long-term debt in the Company’s Consolidated Balance Sheets, as principal payments are not required until the maturity date.

Amendments to Existing Private Placement Term Loan Facilities and New Shelf Facilities (“Private Loan Facilities”): On July 23, 2025, the Company and the holders of the Private Loan Facilities entered into amendments (collectively, the “2025 Note Amendments”) to each of (i) the Third Amended and Restated Note Purchase Agreement and Private Shelf Agreement dated as of September 14, 2016, among the Company and the holders of the notes issued thereunder, as amended; and (ii) the Note Purchase Agreement dated December 21, 2016, in each case as amended prior to such date. The 2025 Note Amendments provide for amendments to certain covenants and other terms, including eliminating the minimum consolidated interest coverage ratio financial covenant.

Debt Maturities: As of June 30, 2025, debt maturities are as follows:


	As of
Year (in millions)	June 30, 2025
Remainder of 2025	$	19.8
2026		39.7
2027		39.7
2028		28.2
2029		28.2
Thereafter		225.4
Total Debt	$	381.0

9. LEASES

The Company’s leases are described in Note 9 to the Consolidated Financial Statements included in Part II, Item 8 of the Company’s Annual Report on Form 10-K for the year ended December 31, 2024.

Components of Lease Cost: Components of lease cost recorded in the Company’s Condensed Consolidated Statement of Income and Comprehensive Income for the three and six months ended June 30, 2025 and 2024 consisted of the following:


	Three Months Ended				Six Months Ended
	June 30,				June 30,
(In millions)	2025		2024		2025		2024
Operating lease cost	$	35.8	$	36.3	$	74.0	$	72.2
Short-term lease cost		3.3		5.4		4.9		7.4
Variable lease cost		0.1		0.2		0.2		0.4
Total		39.2		41.9		79.1		80.0
Sublease income		(3.1)		(0.2)		(6.7)		(0.3)
Total lease cost, net	$	36.1	$	41.7	$	72.4	$	79.7

Future minimum lease payments of operating lease liabilities that have non-cancelable lease terms in excess of one year at June 30, 2025 are as follows:


	As of
Year (in millions)	June 30, 2025
Remainder of 2025	$	59.5
2026		99.2
2027		72.3
2028		22.0
2029		10.3
Thereafter		79.8
Total lease payments		343.1
Less: Interest		(49.0)
Present value of operating lease liabilities		294.1
Less: Short-term portion		(109.1)
Long-term operating lease liabilities	$	185.0

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10. ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS)

Changes in accumulated other comprehensive income (loss) by component, net of tax, for the six months ended June 30, 2025 consisted of the following:


									Accumulated
			Post-		Non-				Other
	Pension		Retirement		Qualified				Comprehensive
(In millions)	Benefits		Benefits		Plans		Other		Income (Loss)
Balance at December 31, 2024	$	(14.0)	$	8.1	$	(0.4)	$	(0.2)	$	(6.5)
Amortization of prior service credit		—		(0.7)		—		—		(0.7)
Amortization of net actuarial loss		—		(0.1)		—		—		(0.1)
Foreign currency exchange		—		—		—		0.3		0.3
Other adjustments		—		—		—		0.2		0.2
Balance at March 31, 2025		(14.0)		7.3		(0.4)		0.3		(6.8)
Amortization of prior service credit		—		(0.7)		—		—		(0.7)
Amortization of net actuarial loss		—		(0.2)		—		—		(0.2)
Foreign currency exchange		—		—		—		1.4		1.4
Balance at June 30, 2025	$	(14.0)	$	6.4	$	(0.4)	$	1.7	$	(6.3)

Changes in accumulated other comprehensive income (loss) by component, net of tax, for the six months ended June 30, 2024 consisted of the following:


									Accumulated
			Post-		Non-				Other
	Pension		Retirement		Qualified				Comprehensive
(In millions)	Benefits		Benefits		Plans		Other		Income (Loss)
Balance at December 31, 2023	$	(20.3)	$	11.0	$	(0.2)	$	1.3	$	(8.2)
Amortization of prior service credit		—		(0.7)		—		—		(0.7)
Amortization of net actuarial gain (loss)		0.1		(0.2)		—		—		(0.1)
Foreign currency exchange		—		—		—		(0.9)		(0.9)
Other adjustments		—		—		—		0.1		0.1
Balance at March 31, 2024		(20.2)		10.1		(0.2)		0.5		(9.8)
Amortization of prior service cost		—		(0.7)		—		—		(0.7)
Amortization of net actuarial gain (loss)		0.1		(0.1)		—		—		—
Foreign currency exchange		—		—		—		0.3		0.3
Balance at June 30, 2024	$	(20.1)	$	9.3	$	(0.2)	$	0.8	$	(10.2)

11. FAIR VALUE OF FINANCIAL INSTRUMENTS

The Company values its financial instruments based on the fair value hierarchy of valuation techniques for fair value measurements. Level 1 inputs are unadjusted quoted prices in active markets for identical assets or liabilities at the measurement date. Level 2 inputs include quoted prices for similar assets and liabilities in active markets and inputs other than quoted prices observable for the asset or liability. Level 3 inputs are unobservable inputs for the asset or liability. If the technique used to measure fair value includes inputs from multiple levels of the fair value hierarchy, the lowest level of significant input determines the placement of the entire fair value measurement in the hierarchy.

The Company uses Level 1 inputs for the fair values of its cash and cash equivalents, and CCF cash and cash equivalents and investments, and Level 2 inputs for fixed rate debt. The fair values of cash and cash equivalents, and cash and cash equivalents in the CCF approximate their carrying values due to the nature of the instruments. The fair value of investments in the CCF is calculated based upon quoted prices available in active markets. The fair value of fixed rate debt is calculated based upon interest rates available for debt with terms and maturities similar to the Company’s existing debt arrangements.

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The carrying value and fair value of the Company’s financial instruments as of June 30, 2025 and December 31, 2024 are as follows:


					Quoted Prices in		Significant		Significant
	Total				Active Markets		Observable		Unobservable
	Carrying Value		Total		(Level 1)		Inputs (Level 2)		Inputs (Level 3)

(In millions)	June 30, 2025		Fair Value Measurements at June 30, 2025
Cash and cash equivalents	$	59.1	$	59.1	$	59.1	$	—	$	—
CCF - Cash and cash equivalent	$	330.1	$	330.1	$	330.1	$	—	$	—
CCF - Investments	$	326.6	$	327.4	$	327.4	$	—	$	—
Fixed rate debt	$	381.0	$	308.4	$	—	$	308.4	$	—

(In millions)	December 31, 2024		Fair Value Measurements at December 31, 2024
Cash and cash equivalents	$	266.8	$	266.8	$	266.8	$	—	$	—
CCF - Cash and cash equivalent	$	230.7	$	230.7	$	230.7	$	—	$	—
CCF - Investments	$	411.9	$	412.5	$	412.5	$	—	$	—
Fixed rate debt	$	400.9	$	317.7	$	—	$	317.7	$	—

12. EARNINGS PER SHARE

Basic earnings per share is determined by dividing net income by the weighted average common shares outstanding during the period. The calculation of diluted earnings per share includes the dilutive effect of non-vested restricted stock units. The computation of weighted average common shares outstanding excluded a nominal amount of anti-dilutive restricted stock units for each period ended June 30, 2025 and 2024.

The computations for basic and diluted earnings per share for the three and six months ended June 30, 2025 and 2024 are as follows:


	Three Months Ended June 30, 2025					Six Months Ended June 30, 2025
			Weighted	Per				Weighted	Per
			Average	Common				Average	Common
	Net		Common	Share		Net		Common	Share
(In millions, except per share amounts)	Income		Shares	Amount		Income		Shares	Amount
Basic	$	94.7	32.1	$	2.95	$	167.0	32.5	$	5.14
Effect of Dilutive Securities			0.3		(0.03)			0.3		(0.05)
Diluted	$	94.7	32.4	$	2.92	$	167.0	32.8	$	5.09


	Three Months Ended June 30, 2024					Six Months Ended June 30, 2024
			Weighted	Per				Weighted	Per
			Average	Common				Average	Common
	Net		Common	Share		Net		Common	Share
(In millions, except per share amounts)	Income		Shares	Amount		Income		Shares	Amount
Basic	$	113.2	33.9	$	3.34	$	149.3	34.1	$	4.38
Effect of Dilutive Securities			0.3		(0.03)			0.4		(0.05)
Diluted	$	113.2	34.2	$	3.31	$	149.3	34.5	$	4.33

13. SHARE-BASED COMPENSATION

During the three and six months ended June 30, 2025, the Company granted time-based restricted stock units and performance-based shares to certain of its employees totaling approximately 98,000 and 231,200 shares, respectively, with a combined weighted average grant date fair value of $112.55 and $130.46 per share, respectively.

Total share-based compensation cost recognized in the Condensed Consolidated Statements of Income and Comprehensive Income as a component of general and administrative expenses was $5.9 million and $6.3 million for the three months ended June 30, 2025 and 2024 and $11.7 million and $12.0 million for the six months ended June 30, 2025 and 2024, respectively. Total unrecognized compensation cost related to unvested share-based compensation arrangements was $32.7 million at June 30, 2025, and is expected to be recognized over a weighted average period of approximately 1.8 years. Total unrecognized compensation cost may be adjusted for any unearned performance shares or forfeited shares.

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14. PENSION AND POST-RETIREMENT PLANS

The Company’s pension and post-retirement plans are described in Note 11 to the Consolidated Financial Statements included in Part II, Item 8 of the Company’s Annual Report on Form 10-K for the year ended December 31, 2024. Components of net periodic benefit cost and other amounts recognized in Other Comprehensive Income (Loss) for the qualified pension plans and the post-retirement benefit plans for the three and six months ended June 30, 2025 and 2024 consisted of the following:


	Pension Benefits				Post-retirement Benefits
	Three Months Ended June 30,				Three Months Ended June 30,
(In millions)	2025		2024		2025		2024
Components of net periodic benefit cost (credit):
Service cost	$	1.1	$	0.8	$	0.1	$	0.1
Interest cost		2.6		2.5		0.2		0.2
Expected return on plan assets		(4.4)		(3.8)		—		—
Amortization of net actuarial loss (gain)		—		0.1		(0.1)		(0.2)
Amortization of prior service credit		—		—		(1.0)		(0.9)
Net periodic benefit credit	$	(0.7)	$	(0.4)	$	(0.8)	$	(0.8)


	Pension Benefits				Post-retirement Benefits
	Six Months Ended June 30,				Six Months Ended June 30,
(In millions)	2025		2024		2025		2024
Components of net periodic benefit cost (credit):
Service cost	$	2.2	$	1.7	$	0.1	$	0.2
Interest cost		5.2		4.9		0.5		0.5
Expected return on plan assets		(8.8)		(7.6)		—		—
Amortization of net loss (gain)		—		0.2		(0.3)		(0.4)
Amortization of prior service credit		—		—		(1.9)		(1.8)
Net periodic benefit credit	$	(1.4)	$	(0.8)	$	(1.6)	$	(1.5)

15. COMMITMENTS AND CONTINGENCIES

Environmental Matters: The Company’s Ocean Transportation business has certain risks that could result in expenditures for environmental remediation. 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.

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.

******

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ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The following discussion and analysis should be read in conjunction with the Condensed Consolidated Financial Statements and related notes, and other financial information appearing elsewhere in this Quarterly Report on Form 10-Q.

FORWARD-LOOKING STATEMENTS

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. These statements are considered “forward-looking” statements as that term is defined in the Private Securities Litigation Reform Act of 1995. 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. Except for historical information contained in these written or oral communications, all other statements are forward-looking statements. These include, for example, all references to 2025 or future years, including such references included under “Second Quarter 2025 Discussion and Outlook for 2025,” as well as statements generally identified through the inclusion of words such as “anticipate,” “believe,” “can,” “commit,” “estimate,” “expect,” “goal,” “intend,” “may,” “plan,” “seek,” “should,” “target,” and “will,” or similar statements or variations of such terms and other similar expressions. 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. 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 II, Item 1A under the caption “Risk Factors” of the Company’s Form 10-Q for the quarter ended March 31, 2025. 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 discussion that follows is intended to provide information that will assist in understanding the changes in the Company’s Condensed Consolidated Financial Statements from period to period, the primary factors that accounted for those changes, and how certain accounting principles, policies and estimates affected the Company’s Condensed Consolidated Financial Statements. The MD&A is provided as a supplement to the Condensed Consolidated Financial Statements and notes herein, and should be read in conjunction with the Company’s Annual Report on Form 10-K for the year ended December 31, 2024, the Company’s reports on Forms 10-Q and 8-K, and other publicly available information.

SECOND QUARTER 2025 DISCUSSION AND OUTLOOK FOR 2025

Ocean Transportation: The Company’s container volume in the Hawaii service in the second quarter 2025 was 2.6 percent higher year-over-year. The increase was primarily due to higher general demand. The Hawaii economy remains stable supported by strong construction activity, but faces potential headwinds from slowing tourism, increasing unemployment, and high inflation and interest rates. The Company expects volume in 2025 to be modestly higher than the level achieved in 2024, reflecting modest economic growth in Hawaii and stable market share.

In China, the Company’s container volume in the second quarter 2025 decreased 14.6 percent year-over-year primarily due to the challenges of market uncertainty and volatility from tariffs and global trade. Freight rates in the second quarter 2025 were modestly higher than the levels achieved in the same period last year. At the onset of tariffs in April, the Company experienced significantly lower year-over-year freight demand, but starting in mid-May saw a rebound in

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demand after the U.S. and China agreed to a temporary reduced level of tariffs. During the second quarter, the Company also moved with its customers as they shifted production throughout Asia in response to the tariffs, which resulted in higher container volume levels outside of China than the levels achieved in the first quarter. For the third quarter 2025, the Company expects lower year-over-year freight rates and volume compared to the elevated demand levels achieved in the third quarter last year and the Company’s expectation of a muted peak season this year. Assuming tariffs and global trade, regulatory measures, the trajectory of the U.S. economy and other geopolitical factors do not materially change from current conditions, the Company expects, for full year 2025, average freight rates and volume to be lower year-over-year.

In Guam, the Company’s container volume in the second quarter 2025 decreased 2.2 percent year-over-year. In the near term, the Company expects Guam’s economy to remain stable with a slow recovery in tourism, a low unemployment rate, and some increase in construction activity. For 2025, the Company expects volume to be modestly lower than the level achieved last year.

In Alaska, the Company’s container volume for the second quarter 2025 increased 0.9 percent year-over-year. The increase was primarily due to higher AAX volume, partially offset by two fewer northbound sailings compared to the year ago period. In the near term, the Company expects continued economic growth in Alaska supported by a low unemployment rate, jobs growth and continued oil and gas exploration and production activity. For 2025, the Company expects volume to be modestly higher than the level achieved last year.

The contribution in the second quarter 2025 from the Company’s SSAT joint venture investment was $7.3 million, or $6.1 million higher than second quarter 2024. The increase was primarily due to higher lift volume. For 2025, the Company expects the contribution from SSAT to be modestly higher than the $17.4 million achieved last year without taking into account the $18.4 million impairment charge at SSAT during the fourth quarter 2024.

In addition to the outlook trends noted above, the Company expects uncertainty regarding tariffs and global trade, regulatory measures, the trajectory of the U.S. economy and other geopolitical factors to continue. Assuming these factors do not materially change from current conditions, the Company expects Ocean Transportation operating income for the full year to be higher than the guidance provided in early May, but moderately lower than the level achieved in the prior year. For the third quarter 2025, the Company expects Ocean Transportation operating income to be meaningfully lower than the level achieved in the same period last year primarily due to lower year-over-year freight rates and volume in the China service compared to the elevated demand levels achieved in the third quarter last year and the Company’s expectation of a muted peak season this year.

Logistics: In the second quarter 2025, operating income for the Company’s Logistics segment was $14.4 million, or $1.2 million lower compared to the level achieved in the second quarter 2024. The decrease was primarily due to a lower contribution from transportation brokerage. For the third quarter 2025, the Company expects Logistics operating income to be comparable to the $15.4 million achieved in the third quarter 2024. For full year 2025, the Company expects Logistics operating income to be comparable to the level achieved in the prior year.

Consolidated Operating Income: For the third quarter 2025, the Company expects consolidated operating income to be meaningfully lower than the $242.3 million achieved in the third quarter 2024. For full year 2025, the Company expects consolidated operating income to be higher than the guidance provided in early May, but moderately lower than the $551.3 million achieved in 2024.

Depreciation and Amortization: For full year 2025, the Company expects depreciation and amortization expense to be approximately $200 million, inclusive of dry-docking amortization of approximately $26 million.

Interest Income: The Company expects interest income for the full year 2025 to be approximately $31 million. In the second quarter 2024, the Company’s interest income of $18.8 million included $10.2 million in interest income earned on the federal tax refund related to the Company’s 2021 federal tax return.

Interest Expense: The Company expects interest expense for the full year 2025 to be approximately $7 million.

Other Income (Expense): The Company expects full year 2025 other income (expense) to be approximately $9 million in income, which is attributable to the amortization of certain components of net periodic benefit costs or gains related to the Company’s pension and post-retirement plans.

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Income Taxes: In the second quarter 2025, the Company’s effective tax rate was 22.2 percent. For the full year 2025, the Company expects its effective tax rate to be approximately 22.0 percent.

Capital and Vessel Dry-docking Expenditures: For the second quarter 2025, the Company made capital expenditure payments excluding new vessel construction expenditures of $48.9 million, new vessel construction expenditures (including capitalized interest and owner’s items) of $37.4 million, and dry-docking payments of $13.4 million. For the full year 2025, the Company expects to make other capital expenditure payments, including maintenance capital expenditures, of approximately $100 to $120 million, new vessel construction expenditures (including capitalized interest and owner’s items) of approximately $305 million, and dry-docking payments of approximately $40 million.

CONSOLIDATED RESULTS OF OPERATIONS

Consolidated Results – Three months ended June 30, 2025 compared with 2024:


	Three Months Ended June 30,
(Dollars in millions, except per share amounts)	2025		2024		Change
Operating revenue	$	830.5	$	847.4	$	(16.9)	(2.0)	%
Operating costs and expenses		(717.5)		(722.8)		5.3	(0.7)	%
Operating income		113.0		124.6		(11.6)	(9.3)	%
Interest income		8.0		18.8		(10.8)	(57.4)	%
Interest expense		(1.7)		(2.1)		0.4	(19.0)	%
Other income (expense), net		2.4		1.8		0.6	33.3	%
Income before taxes		121.7		143.1		(21.4)	(15.0)	%
Income taxes		(27.0)		(29.9)		2.9	(9.7)	%
Net income	$	94.7	$	113.2	$	(18.5)	(16.3)	%
Basic earnings per share	$	2.95	$	3.34	$	(0.39)	(11.7)	%
Diluted earnings per share	$	2.92	$	3.31	$	(0.39)	(11.8)	%

Changes in operating revenue, and operating costs and expenses are further described below in the Analysis of Operating Revenue and Income by Segment.

The decrease in interest income for the three months ended June 30, 2025, compared to the three months ended June 30, 2024, was due to interest of $10.2 million related to a federal income tax refund received during the three months ended June 30, 2024, and lower amounts of cash and cash equivalent, and CCF funds that were invested in interest bearing accounts during the three months ended June 30, 2025.

The decrease in interest expense for the three months ended June 30, 2025, compared to the three months ended June 30, 2024, was due to lower outstanding debt during the period.

Other income (expense) relates to the amortization of certain components of net periodic benefit costs or gains related to the Company’s pension and post-retirement plans.

Income tax expense was $27.0 million, or 22.2 percent of income before taxes, for the three months ended June 30, 2025, compared to $29.9 million, or 20.9 percent of income before taxes, for the three months ended June 30, 2024. The effective tax rate for the three months ended June 30, 2024 benefited from certain discrete tax adjustments that lowered the effective tax rate for that period.

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Consolidated Results – Six months ended June 30, 2025 compared with 2024:


	Six Months Ended June 30,
(Dollars in millions, except per share amounts)	2025		2024		Change
Operating revenue	$	1,612.5	$	1,569.5	$	43.0	2.7	%
Operating costs and expenses		(1,417.4)		(1,408.0)		(9.4)	0.7	%
Operating income		195.1		161.5		33.6	20.8	%
Interest income		17.4		27.6		(10.2)	(37.0)	%
Interest expense		(3.4)		(4.3)		0.9	(20.9)	%
Other income (expense), net		4.8		3.6		1.2	33.3	%
Income before taxes		213.9		188.4		25.5	13.5	%
Income taxes		(46.9)		(39.1)		(7.8)	19.9	%
Net income	$	167.0	$	149.3	$	17.7	11.9	%
Basic earnings per share	$	5.14	$	4.38	$	0.76	17.4	%
Diluted earnings per share	$	5.09	$	4.33	$	0.76	17.6	%

Changes in operating revenue, and operating costs and expenses are further described below in the Analysis of Operating Revenue and Income by Segment.

The decrease in interest income for the six months ended June 30, 2025, compared to the six months ended June 30, 2024, was due to interest of $10.2 million related to a federal income tax refund received during the six months ended June 30, 2024.

The decrease in interest expense for the six months ended June 30, 2025, compared to the six months ended June 30, 2024, was due to lower outstanding debt during the period, and a higher offset of capitalized interest related to the construction of new vessels.

Other income (expense) relates to the amortization of certain components of net periodic benefit costs or gains related to the Company’s pension and post-retirement plans.

Income tax expense was $46.9 million, or 21.9 percent of income before taxes, for the six months ended June 30, 2025, compared to $39.1 million, or 20.8 percent of income before taxes, for the six months ended June 30, 2024. The effective tax rate for the six months ended June 30, 2024 benefited from certain discrete tax adjustments that lowered the effective tax rate for that period.

ANALYSIS OF OPERATING REVENUE AND INCOME BY SEGMENT

Ocean Transportation Operating Results – Three months ended June 30, 2025 compared with 2024:


	Three Months Ended June 30,
(Dollars in millions)	2025			2024			Change
Ocean Transportation revenue	$	675.6		$	689.9		$	(14.3)	(2.1)	%
Operating costs and expenses		(577.0)			(580.9)			3.9	(0.7)	%
Operating income	$	98.6		$	109.0		$	(10.4)	(9.5)	%
Operating income margin		14.6	%		15.8	%

Volume (Forty-foot equivalent units (FEU)) (1)
Hawaii containers		36,000			35,100			900	2.6	%
Alaska containers		21,700			21,500			200	0.9	%
China containers (2)		32,300			37,800			(5,500)	(14.6)	%
Guam containers		4,500			4,600			(100)	(2.2)	%
Other containers (3)		4,400			4,400			—	—	%

(1)	Approximate volume 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.

(2)	Includes containers transshipped from other Asia origins.

(3)	Includes containers from services in various islands in Micronesia and the South Pacific, and Okinawa, Japan.

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Ocean Transportation revenue decreased $14.3 million, or 2.1 percent, during the three months ended June 30, 2025, compared with the three months ended June 30, 2024. The decrease was primarily due to lower volume in China, partially offset by higher freight rates in China.

On a year-over-year FEU basis, Hawaii container volume increased 2.6 percent primarily due to higher general demand; Alaska volume increased 0.9 percent primarily due to higher AAX volume, partially offset by two fewer northbound sailings compared to the year ago period; China volume was 14.6 percent lower primarily due to the challenges of market uncertainty and volatility from tariffs and global trade; Guam volume decreased 2.2 percent; and Other containers volume was flat.

Ocean Transportation operating income decreased $10.4 million, or 9.5 percent, during the three months ended June 30, 2025, compared with the three months ended June 30, 2024. The decrease was primarily due to lower volume in China, partially offset by higher freight rates in China and the timing of fuel-related surcharge collections.

The Company’s SSAT terminal joint venture investment contributed $7.3 million during the three months ended June 30, 2025, compared to a contribution of $1.2 million during the three months ended June 30, 2024. The increase was primarily driven by higher lift volume.

Ocean Transportation Operating Results – Six months ended June 30, 2025 compared with 2024:


	Six Months Ended June 30,
(Dollars in millions)	2025			2024			Change
Ocean Transportation revenue	$	1,313.0		$	1,268.9		$	44.1	3.5	%
Operating costs and expenses		(1,140.8)			(1,132.3)			(8.5)	0.8	%
Operating income	$	172.2		$	136.6		$	35.6	26.1	%
Operating income margin		13.1	%		10.8	%

Volume (Forty-foot equivalent units (FEU)) (1)
Hawaii containers		71,700			69,700			2,000	2.9	%
Alaska containers		41,400			40,300			1,100	2.7	%
China containers (2)		60,800			66,700			(5,900)	(8.8)	%
Guam containers		8,700			9,500			(800)	(8.4)	%
Other containers (3)		7,800			8,000			(200)	(2.5)	%

(1)	Approximate volume 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.

(2)	Includes containers transshipped from other Asia origins.

(3)	Includes containers from services in various islands in Micronesia and the South Pacific, and Okinawa, Japan.

Ocean Transportation revenue increased $44.1 million, or 3.5 percent, during the six months ended June 30, 2025, compared with the six months ended June 30, 2024. The increase was primarily due to higher freight rates in China and Hawaii, partially offset by lower volume in China.

On a year-over-year FEU basis, Hawaii container volume increased 2.9 percent primarily due to the dry-docking of a competitor’s vessel in the first half of 2025; Alaska volume increased 2.7 percent due to higher AAX volume and retail-related demand, partially offset by three fewer northbound sailings compared to the year ago period; China volume decreased 8.8 percent due to the challenges of market uncertainty and volatility from tariffs and global trade; Guam volume decreased 8.4 percent primarily due to lower demand from retail and food and beverage segments; and Other containers volume decreased 2.5 percent.

Ocean Transportation operating income increased $35.6 million, or 26.1 percent, during the six months ended June 30, 2025, compared with the six months ended June 30, 2024. The increase was primarily due to higher freight rates in China and the domestic tradelanes, the timing of fuel-related surcharge collections, and a higher contribution from SSAT, primarily offset by lower volume in China and higher operating overhead costs and direct cargo expense.

The Company’s SSAT terminal joint venture investment contributed $13.9 million during the six months ended June 30, 2025, compared to a contribution of $1.6 million during the six months ended June 30, 2024. The increase was primarily driven by higher lift volume.

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Logistics Operating Results – Three months ended June 30, 2025 compared with 2024:


	Three Months Ended June 30,
(Dollars in millions)	2025			2024			Change
Logistics revenue	$	154.9		$	157.5		$	(2.6)	(1.7)	%
Operating costs and expenses		(140.5)			(141.9)			1.4	(1.0)	%
Operating income	$	14.4		$	15.6		$	(1.2)	(7.7)	%
Operating income margin		9.3	%		9.9	%

Logistics revenue decreased $2.6 million, or 1.7 percent, during the three months ended June 30, 2025, compared with the three months ended June 30, 2024. The decrease was primarily due to lower revenue in transportation brokerage.

Logistics operating income decreased $1.2 million, or 7.7 percent, during the three months ended June 30, 2025, compared with the three months ended June 30, 2024. The decrease was primarily due to a lower contribution from transportation brokerage.

Logistics Operating Results – Six months ended June 30, 2025 compared with 2024:


	Six Months Ended June 30,
(Dollars in millions)	2025			2024			Change
Logistics revenue	$	299.5		$	300.6		$	(1.1)	(0.4)	%
Operating costs and expenses		(276.6)			(275.7)			(0.9)	0.3	%
Operating income	$	22.9		$	24.9		$	(2.0)	(8.0)	%
Operating income margin		7.6	%		8.3	%

Logistics revenue decreased $1.1 million, or 0.4 percent, during the six months ended June 30, 2025, compared with the six months ended June 30, 2024. The decrease was primarily due to lower revenue in transportation brokerage.

Logistics operating income decreased $2.0 million, or 8.0 percent, during the six months ended June 30, 2025, compared with the six months ended June 30, 2024. The decrease was primarily due to a lower contribution from transportation brokerage and freight forwarding.

LIQUIDITY AND CAPITAL RESOURCES

Sources of liquidity available to the Company as of June 30, 2025 compared to December 31, 2024 were as follows:

Cash and Cash Equivalents, Accounts Receivable and CCF: Cash and cash equivalents, accounts receivable and CCF as of June 30, 2025 compared to December 31, 2024 were as follows:


	June 30,		December 31,
(In millions)	2025		2024		Change
Cash and cash equivalents	$	59.1	$	266.8	$	(207.7)
Accounts receivable, net (1)	$	289.1	$	268.9	$	20.2
CCF - cash and cash equivalents, and investments account	$	656.7	$	642.6	$	14.1

(1)	As of June 30, 2025 and December 31, 2024, $80.2 million and $178.1 million of eligible accounts receivable were assigned to the CCF, respectively.

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Changes in the Company’s cash and cash equivalents for the six months ended June 30, 2025, compared to the six months ended June 30, 2024, were as follows:


	Six Months Ended June 30,
(In millions)	2025		2024		Change
Net cash provided by operating activities (1)	$	194.6	$	344.5	$	(149.9)
Net cash used in investing activities (2)		(183.4)		(131.1)		(52.3)
Net cash used in financing activities (3)		(218.9)		(179.1)		(39.8)
Net (decrease) increase in cash, cash equivalents and restricted cash		(207.7)		34.3		(242.0)
Cash and cash equivalents, and restricted cash, beginning of the period		266.8		136.3		130.5
Cash and cash equivalents, and restricted cash, end of the period	$	59.1	$	170.6	$	(111.5)

(1) Changes in net cash provided by operating activities:

Changes in net cash provided by operating activities for the six months ended June 30, 2025, compared to the six months ended June 30, 2024, were due to the following:


(In millions)	Change
Net income	$	17.7
Non-cash depreciation and amortization		6.3
Deferred income taxes		(7.2)
Other non-cash related changes, net		0.5
Income and distribution from SSAT, net		(26.3)
Accounts receivable, net		9.2
Prepaid expenses and other assets		(125.2)
Accounts payable, accruals and other liabilities		(20.4)
Operating lease assets and liabilities, net		1.2
Non-cash amortization of operating lease right of use assets		(1.2)
Deferred dry-docking payments		(6.5)
Other long-term liabilities		2.0
Total	$	(149.9)

Net income was $167.0 million for the six months ended June 30, 2025, compared to $149.3 million for the six months ended June 30, 2024. Income from SSAT was $13.9 million for the six months ended June 30, 2025, compared to $1.6 million for the six months ended June 30, 2024. The increase in income from SSAT was primarily due to higher lift volume during the six months ended June 30, 2025, compared to the same prior year period. The Company received $14.0 million of cash distributions from SSAT during the six months ended June 30, 2024. No cash distributions were received from SSAT during the six months ended June 30, 2025. 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. Changes in prepaid expenses and other assets were primarily due to a 2021 federal income tax refund of $118.6 million that was received by the Company during the six months ended June 30, 2024. Changes in accounts payable, accruals and other liabilities were due to the timing of payments associated with those liabilities. Changes in operating lease assets and liabilities were primarily due to new operating lease additions and renewals, offset by operating lease payments and terminations. Deferred dry-docking payments for the six months ended June 30, 2025 were $23.8 million, compared to $17.3 million for the six months ended June 30, 2024. Changes in deferred dry-docking are primarily due to the timing of vessel dry-dock related activities and the payments associated with those activities.

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(2) Changes in net cash used in investing activities:

Changes in net cash used in investing activities for the six months ended June 30, 2025, compared to the six months ended June 30, 2024, were due to the following:



(In millions)	Change
Cash deposits and interest into the CCF	$	(64.1)
Withdrawals from CCF		64.9
Vessel construction expenditures		(65.9)
Capital expenditures (excluding vessel construction expenditures)		15.5
Proceeds from disposal of property and equipment, net, and other		(2.7)
Total	$	(52.3)

The Company deposited $109.1 million of cash and interest into the CCF and made $100.7 million of qualifying withdrawal payments out of the CCF during the six months ended June 30, 2025. The Company deposited $45.0 million into the CCF and made $35.8 million of qualifying withdrawal payments out of the CCF during the six months ended June 30, 2024. Qualifying withdrawal payments relate to milestone payments for the construction of three new Aloha Class vessels. Capital expenditures (excluding vessel construction expenditures) were $71.4 million for the six months ended June 30, 2025, compared to $86.9 million for the six months ended June 30, 2024. Capital expenditures (excluding vessel construction expenditures) primarily relate to vessel related expenditures, the acquisition of containers, chassis and other equipment, and expenditures on other capital related projects. The decrease in capital expenditure for the six months ended June 30, 2025, compared to the same prior year period primarily related to the timing of when vessel maintenance activities are performed and when other capital related projects are incurred.

(3) Changes in net cash used in financing activities:

Changes in net cash used in financing activities for the six months ended June 30, 2025, compared to the six months ended June 30, 2024, were due to the following:


(In millions)	Change
Repurchase of Matson common stock	$	(40.3)
Shares withheld for taxes related to settlement of restricted stock units		0.7
Dividends paid		(0.2)
Total	$	(39.8)

During the six months ended June 30, 2025, the Company paid $160.4 million to repurchase Matson common stock, compared to $120.1 million during the six months ended June 30, 2024. During the six months ended June 30, 2025, the Company paid $19.9 million in scheduled fixed interest debt payments, compared to $19.9 million during the six months ended June 30, 2024. During the six months ended June 30, 2025, the Company paid $16.3 million in withholding taxes related to vested restricted stock units, compared to $17.0 million during the six months ended June 30, 2024. During the six months ended June 30, 2025, the Company paid $22.3 million in dividends, compared to $22.1 million during the six months ended June 30, 2024. The increase in dividend payments was due to an increase in dividends declared per share of common stock by the Company, offset by a reduction in common stock outstanding.

Working Capital: The Company had a working capital deficit of $122.4 million at June 30, 2025, compared to a working capital surplus of $49.2 million at December 31, 2024. Working capital is primarily impacted by the amount of net cash provided by operating activities, the amount of capital expenditures, the 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 and other liabilities. The decrease in the Company’s working capital at June 30, 2025, compared to December 31, 2024 is primarily due to $100.7 million of cash withdrawn from cash and cash equivalent and deposited into the CCF during the six months ended June 30, 2025, compared to $35.8 million for the six months ended June 30, 2024.

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Capital Construction Fund: The Company’s CCF is described in Note 7 of Part I, Item 1 above. CCF cash and cash equivalents, and CCF investments as of June 30, 2025 and December 31, 2024 are as follows:


	June 30,		December 31,
(In millions)	2025		2024
CCF Cash and cash equivalents	$	330.1	$	230.7
CCF Investments		326.6		411.9
Total	$	656.7	$	642.6

CCF cash and cash equivalents, and CCF investments are intended to fund milestone payments for the construction of three new Aloha Class vessels.

Debt: The Company’s debt is described in Note 8 of Part I, Item 1 above. The Company utilizes a mix of fixed and variable debt for liquidity and to fund the Company’s operations. Total Debt as of June 30, 2025 and December 31, 2024 is as follows:


	June 30,		December 31,
(In millions)	2025		2024		Change
Variable interest debt - Revolving credit facility	$	—	$	—	$	—
Fixed interest debt - Title XI debt and private placement term loans		381.0		400.9		(19.9)
Total Debt (excluding deferred loan fees)	$	381.0	$	400.9	$	(19.9)

Total Debt decreased by $19.9 million during the six months ended June 30, 2025, compared to December 31, 2024, due to scheduled fixed interest debt repayments.

As described in Note 8 of Part 1, Item 1 above, on July 23, 2025, the Company entered into a Third Amended and Restated Credit Agreement which provides for a five-year revolving credit facility and $550 million in loan commitments, with an uncommitted $300 million increase option. The Company reduced the size of its credit facility from $650 million to $550 million due to: (i) the nearly fully-funded status of the new Aloha Class vessel build program; and (ii) the Company’s expected lower level of capital needs for the remainder of the decade due in part to its next Jones Act build cycle which is not anticipated until the mid-2030s.

As of June 30, 2025, the Company had $643.9 million of remaining borrowing availability under the revolving credit facility.

Capital Expenditures: Except as described below, during the six months ended June 30, 2025, there were no material changes to the Company’s expected capital expenditures for the years ending December 31, 2025 and 2026 that are described in Part II, Item 7 of the Company’s Annual Report on Form 10-K for the year ended December 31, 2024.

During the six months ended June 30, 2025, the Company paid $100.7 million in milestone payments under the vessel construction agreements, compared to $35.8 million for the six months ended June 30, 2024. The following represents the estimated timing of future milestone payments under the vessel construction agreements as of June 30, 2025:


	Paid		Future Milestone Payments
Vessel Construction Obligations (in millions)	As of June 30, 2025		Remainder of 2025		2026		2027		2028		Thereafter		Total
Three Aloha Class Containerships	$	290.2	$	189.7	$	313.6	$	185.0	$	22.2	$	2.9	$	1,003.6

The Company intends to use the CCF cash and cash equivalents, and CCF investments to fund future milestone progress payments for the construction of three new Aloha Class vessels.

For the full year 2025, the Company expects to make other capital expenditure payments, including maintenance capital expenditures, of approximately $100 to $120 million, and dry-docking payments of approximately $40 million.

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. The amount of shares repurchased by the Company during any period is dependent on the amount of available cash and cash equivalents, the Company’s stock price and other factors.

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The maximum number of remaining shares that may be repurchased under the Company’s share repurchase program was approximately 2.5 million shares at June 30, 2025.

Other Material Cash Requirements: There were no other material changes during the quarter ended June 30, 2025 to the Company’s other cash requirements that are described in Part II, Item 7 of the Company’s Annual Report on Form 10-K for the year ended December 31, 2024.

CRITICAL ACCOUNTING POLICIES AND ESTIMATES

There have been no changes during this quarter to the Company’s critical accounting policies and estimates as discussed in Part II, Item 7 of the Company’s Annual Report on Form 10-K for the year ended December 31, 2024.

OTHER MATTERS

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.

New Accounting Pronouncements: See Note 2 of Part I, Item 1 above for information on new accounting pronouncements.

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

There have been no material changes to the Company’s market risk position from the information provided under Part II, Item 7A, “Quantitative and Qualitative Disclosures About Market Risk,” of its Annual Report on Form 10-K for the year ended December 31, 2024.

ITEM 4. CONTROLS AND PROCEDURES

Evaluation of Disclosure Controls and Procedures: The Company’s management, with the participation of the Company’s Chief Executive Officer and Chief Financial Officer, has evaluated the effectiveness of the Company’s disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended (the “Exchange Act”)) as of the end of the period covered by this report. Based on such evaluation, the Company’s Chief Executive Officer and Chief Financial Officer have concluded that, as of June 30, 2025, the Company’s disclosure controls and procedures are effective.

Changes in Internal Control Over Financial Reporting: There were no changes in the Company’s internal control over financial reporting (as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) that occurred during the three months ended June 30, 2025, that have materially affected, or are reasonably likely to materially affect, the Company’s internal control over financial reporting.

PART II. OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS

Environmental Matters: The Company’s Ocean Transportation business has certain risks that could result in expenditures for environmental remediation. 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 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 such

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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 1A. RISK FACTORS

There were no material changes to the Company’s risk factors previously described in Part II, Item 1A, “Risk Factors” of the Company’s Form 10-Q for the quarter ended March 31, 2025.

ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

(c) Purchases of Equity Securities by the Issuer and Affiliated Purchases: The following is the summary of Matson shares that were repurchased under the Company’s share repurchase program during the three months ended June 30, 2025:


				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) (2)	Programs
April 1 – 30, 2025	410,000	$	105.85	410,000	2,920,956
May 1 – 31, 2025	260,000		107.88	260,000	2,660,956
June 1 – 30, 2025	190,000		112.06	190,000	2,470,956
Total	860,000	$	107.83	860,000

(1)

On June 24, 2021, Matson’s Board of Directors approved a share repurchase program of up to 3.0 million shares of common stock, with subsequent approvals for the addition of 3.0 million shares on each of January 27, 2022, August 23, 2022, April 27, 2023 and February 27, 2025, for an aggregate total of 15.0 million shares of common stock. The share repurchase program expires on December 31, 2027. 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 Securities Exchange Act of 1934.

(2)	Amounts exclude shares withheld for employee taxes upon vesting of stock-based awards.

ITEM 3. DEFAULTS UPON SENIOR SECURITIES

None.

ITEM 4. MINE SAFETY DISCLOSURES

None.

ITEM 5. OTHER INFORMATION

(c) Trading Plans: During the quarter ended June 30, 2025, no director or Section 16 officer adopted or terminated any Rule 10b5-1 trading arrangements or non-Rule 10b5-1 trading arrangements except as described below.

On May 8, 2025, Matthew J. Cox, Chairman and Chief Executive Officer, amended a trading plan intended to satisfy the affirmative defense conditions of Rule 10b5-1(c) (previously adopted on February 28, 2025) to sell up to 29,856 shares of Matson common stock through December 8, 2025, subject to certain pricing and other conditions.

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ITEM 6. EXHIBITS

10.1^,*	Letter Agreement Counter Parties

10.2^,*	Consulting Agreement with R. Rolfe

10.3^**	Third Amended and Restated Credit Agreement among Matson, Inc., Bank of America, N.A. as the Agent, and the lenders thereto, dated as of July 23, 2025

10.4^**	Amendment to Third Amended and Restated Note Purchase Agreement and Private Shelf Agreement, dated as of July 23, 2025

10.5^**	Amendment to Note Purchase Agreement dated December 21, 2016, dated as of July 23, 2025

10.6^*	Matson, Inc. 2025 Incentive Compensation Plan (incorporated by reference to Exhibit 10.1 of Matson’s Form 8-K dated April 28, 2025).

10.7^,*	Form of 2025 Plan Performance Share Award Agreement (ROIC metric) for Executive Employees

10.8^,*	Form of 2025 Plan Performance Share Award Agreement (TSR metric) for Executive Employees

10.9^,*	Form of 2025 Plan Performance Share Award Agreement for Non-Executive Employees

10.10^,*	Form of 2025 Plan Time-Based Restricted Stock Unit Award Agreement for Executive Employees

10.11^,*	Form of 2025 Plan Time-Based Restricted Stock Unit Award Agreement for Non-Executive Employees

10.12^,*	Form of 2025 Plan Restricted Stock Unit Award Agreement for Non-Employee Directors (Deferral Election)

10.13^,*	Form of 2025 Plan Restricted Stock Unit Award Agreement for Non-Employee Directors (No Deferral)

31.1^**	Certification of Chief Executive Officer pursuant to Rule 13a-14(a) or 15d-14(a) of the Securities Exchange Act of 1934.

31.2^**	Certification of Chief Financial Officer pursuant to Rule 13a-14(a) or 15d-14(a) of the Securities Exchange Act of 1934.

32^***	Certification of Chief Executive Officer and Chief Financial Officer pursuant to 18 U.S.C. Section 1350.

101.INS^**	Inline XBRL Instance Document – the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document.

101.SCH^**	Inline XBRL Taxonomy Extension Schema Document

101.CAL^**	Inline XBRL Taxonomy Extension Calculation Linkbase Document

101.DEF^**	Inline XBRL Taxonomy Extension Definition Linkbase Document

101.LAB^**	Inline XBRL Taxonomy Extension Label Linkbase Document

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101.PRE^**	Inline XBRL Taxonomy Extension Presentation Linkbase Document

104^**	Cover Page Interactive Data File (formatted in Inline XBRL and included as Exhibit 101).

* Indicates management contract or compensatory plan or arrangement.

** Filed herewith.

*** Furnished herewith.

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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.


	MATSON, INC.
	(Registrant)


Date: August 1, 2025	/s/ Joel M. Wine
	Joel M. Wine
	Executive Vice President and
	Chief Financial Officer
	(principal financial officer)

Date: August 1, 2025	/s/ Kevin L. Stuck
	Kevin L. Stuck
	Vice President and Controller
	(principal accounting officer)

Source: View Original Filing on SEC EDGAR

FAQ

How did MATX revenue perform in Q2-25?

Total operating revenue slipped 2.0% YoY to $830.5 million, with both Ocean Transportation and Logistics slightly lower.

What was Matson’s Q2-25 diluted EPS?

Diluted earnings per share were $2.92, down from $3.31 in Q2-24.

How much cash does Matson have after six months of 2025?

Cash and cash equivalents stood at $59.1 million on 30 Jun 2025, vs $266.8 million at year-end 2024.

What is the status of Matson’s share repurchase program?

The company bought back 1.4 million shares for $162.9 m YTD; ~2.5 million shares remain authorized.

When will the increased $0.36 dividend be paid?

The cash dividend is scheduled for 4 September 2025 to shareholders of record on 7 August 2025.

[10-Q] Matsons, Inc. Quarterly Earnings Report

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FAQ

How did MATX revenue perform in Q2-25?

What was Matson’s Q2-25 diluted EPS?

How much cash does Matson have after six months of 2025?

What is the status of Matson’s share repurchase program?

When will the increased $0.36 dividend be paid?

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[10-Q] Matsons, Inc. Quarterly Earnings Report

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Equity Research Analyst neutral

Maritime Industry Risk Analyst negative

FAQ

How did MATX revenue perform in Q2-25?

What was Matson’s Q2-25 diluted EPS?

How much cash does Matson have after six months of 2025?

What is the status of Matson’s share repurchase program?

When will the increased $0.36 dividend be paid?

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