Document and Entity Information - USD ($)	12 Months Ended
Document and Entity Information - USD ($)	Dec. 31, 2016	Feb. 21, 2017	Jun. 30, 2016
Document and Entity Information
Entity Registrant Name	Matson, Inc.
Entity Central Index Key	0000003453
Document Type	10-K
Document Period End Date	Dec. 31, 2016
Amendment Flag	false
Current Fiscal Year End Date	--12-31
Entity Well-known Seasoned Issuer	Yes
Entity Voluntary Filers	No
Entity Current Reporting Status	Yes
Entity Filer Category	Large Accelerated Filer
Entity Public Float			$ 1,368,198,911
Entity Common Stock, Shares Outstanding		43,119,933
Document Fiscal Year Focus	2016
Document Fiscal Period Focus	FY

Consolidated Statements of Income and Comprehensive Income - USD ($) shares in Millions, $ in Millions	12 Months Ended
	Dec. 31, 2016	Dec. 31, 2015	Dec. 31, 2014
Operating Revenue:
Ocean Transportation	$ 1,541.1	$ 1,498.0	$ 1,278.4
Logistics	400.5	386.9	435.8
Total Operating Revenue	1,941.6	1,884.9	1,714.2
Costs and Expenses:
Operating costs	1,619.1	1,510.1	1,433.5
Equity in income of related party Terminal Joint Venture	(15.8)	(16.5)	(6.6)
Selling, general and administrative	185.1	195.0	147.3
Total Costs and Expenses	1,788.4	1,688.6	1,574.2
Operating Income	153.2	196.3	140.0
Interest expense	(24.1)	(18.5)	(17.3)
Income before Income Taxes	129.1	177.8	122.7
Income tax expense	(48.6)	(74.8)	(51.9)
Net Income	80.5	103.0	70.8
Other Comprehensive Income (Loss), Net of Income Taxes:
Net Income	80.5	103.0	70.8
Other Comprehensive Income (Loss):
Net gain (loss) in prior service cost	0.7	5.1	(31.4)
Amortization of prior service cost included in net periodic pension cost	(1.3)	(1.3)	(1.3)
Amortization of net loss included in net periodic pension cost	1.2	1.8	2.5
Foreign currency translation and other adjustments	0.1	0.7	0.4
Other comprehensive income	0.1	0.1
Total Other Comprehensive Income (Loss)	0.8	6.4	(29.8)
Comprehensive Income	$ 81.3	$ 109.4	$ 41.0
Basic Earnings Per-Share: (in dollars per share)	$ 1.87	$ 2.37	$ 1.65
Diluted Earnings Per-Share: (in dollars per share)	$ 1.85	$ 2.34	$ 1.63
Weighted Average Number of Shares Outstanding:
Basic (in shares)	43.1	43.5	43.0
Diluted (in shares)	43.5	44.0	43.4

Consolidated Balance Sheets - USD ($) $ in Millions	Dec. 31, 2016	Dec. 31, 2015
Current Assets:
Cash and cash equivalents	$ 13.9	$ 25.5
Accounts receivable, net	189.5	192.8
Prepaid expenses and other assets	70.8	59.6
Total current assets	274.2	277.9
Long-term Assets:
Investment in related party Terminal Joint Venture	82.4	66.4
Property and equipment, net	949.2	860.3
Goodwill	323.7	241.6
Intangible assets, net	236.6	139.1
Capital Construction Fund - cash on deposit	31.2
Deferred dry-docking costs	89.1	57.6
Other long-term assets	29.1	26.9
Total assets	2,015.5	1,669.8
Current Liabilities:
Current portion of debt	31.8	22.0
Accounts payable	170.5	164.9
Accruals and other liabilities	76.9	110.7
Total current liabilities	279.2	297.6
Long-term Liabilities:
Long-term debt	707.1	407.9
Deferred income taxes	348.8	310.5
Employee benefit plans	108.5	109.3
Uninsured claims and related liabilities	40.3	37.7
Multi-employer withdrawal liabilities	60.1	56.2
Total long-term liabilities	1,264.8	921.6
Commitments and Contingencies (Note 14)
Shareholders' Equity:
Common stock — common stock without par value; authorized, 150.0 million shares ($0.75 stated value per share); outstanding, 42.9 million shares in 2016 and 43.5 million shares in 2015	32.1	32.6
Additional paid in capital	289.8	287.9
Accumulated other comprehensive loss, net	(46.1)	(46.9)
Retained earnings	195.7	177.0
Total shareholders' equity	471.5	450.6
Total liabilities and shareholders' equity	$ 2,015.5	$ 1,669.8

Consolidated Balance Sheets (Parenthetical) - $ / shares	Dec. 31, 2016	Dec. 31, 2015
Condensed Consolidated Balance Sheets
Common stock, shares authorized	150,000,000	150,000,000
Common stock, stated value (in dollars per share)	$ 0.75	$ 0.75
Common stock, shares outstanding	42,900,000	43,500,000

Consolidated Statements of Cash Flows - USD ($) $ in Millions	12 Months Ended
	Dec. 31, 2016	Dec. 31, 2015	Dec. 31, 2014
Cash Flows From Operating Activities:
Net income	$ 80.5	$ 103.0	$ 70.8
Reconciling adjustments:
Depreciation and amortization	97.1	83.4	69.7
Deferred income taxes	39.7	50.7	2.7
Loss (gain) on disposal of property	0.9	1.2	(1.5)
Post-retirement (income) expense	(1.4)	2.0	(5.9)
Share-based compensation expense	11.2	12.2	8.7
Equity in income of related party Terminal Joint Venture	(15.8)	(16.5)	(6.6)
Distributions from Terminal Joint Venture		14.0
Tax benefit from equity issuance	2.2	2.6	0.8
Excess tax benefit from stock-based compensation	(0.3)	(0.9)	(1.1)
Changes in assets and liabilities:
Accounts receivable, net	14.4	13.5	(15.3)
Deferred dry-docking payments	(59.2)	(25.7)	(14.1)
Deferred dry-docking amortization	38.9	23.1	21.1
Prepaid expenses and other assets	(13.6)	(13.2)	17.3
Accounts payable, accruals and other liabilities	0.5	(9.4)	13.5
Other long-term liabilities	(37.3)	5.3	5.6
Net cash provided by operating activities	157.8	245.3	165.7
Cash Flows From Investing Activities:
Capital expenditures	(84.9)	(46.5)	(27.5)
Capitalized vessel construction expenditures	(94.5)	(21.3)	(0.4)
Proceeds from disposal of property and equipment	2.5	5.5	4.9
Cash deposits into Capital Construction Fund	(123.4)	(77.9)	(31.9)
Withdrawals from Capital Construction Fund	92.2	105.4	4.4
Payments for membership interests in Span Alaska, net of cash acquired	(112.6)
Payments for Horizon’s common stock, net of cash acquired, and other acquisitions		(29.0)
Net cash used in investing activities	(320.7)	(63.8)	(50.5)
Cash Flows From Financing Activities:
Proceeds from issuance of debt	275.0	75.0	100.0
Payments of debt	(20.5)	(20.5)	(11.4)
Payment of capital leases	(1.7)	(1.5)	(1.1)
Proceeds from revolving credit facility	1,103.0	588.0
Repayments of revolving credit facility	(1,048.0)	(588.0)
Payment of financing costs		(0.9)
Proceeds from issuance of common stock	1.2	2.2	5.8
Dividends paid	(32.2)	(30.8)	(28.7)
Repurchased of common stock	(38.0)	(4.9)
Tax withholding related to net share settlements of restricted stock units	(5.9)	(2.9)	(2.0)
Excess tax benefit from stock-based compensation	0.3	0.9	1.1
Payments of Span Alaska debt	(81.9)
Payments of Horizon debt and redemption of warrants, net		(466.0)
Net cash provided by (used in) financing activities	151.3	(449.4)	63.7
Net (Decrease) Increase in Cash and Cash Equivalents	(11.6)	(267.9)	178.9
Cash and Cash Equivalents, Beginning of the Year	25.5	293.4	114.5
Cash and Cash Equivalents, End of the Year	13.9	25.5	293.4
Supplemental Cash Flow Information:
Interest paid, net of capitalized interest	19.8	17.7	15.2
Income tax paid	15.6	40.0	30.2
Non-cash Information:
Capital expenditures included in accounts payable and accrued liabilities	$ 4.1	13.5	$ 1.6
Capital lease obligations		$ 1.8

Consolidated Statements of Stockholders' Equity - USD ($) shares in Millions, $ in Millions	Common Stock	Additional Paid In Capital	Accumulated Other Comprehensive Income (Loss)	Retained Earnings	Total
Balance at the beginning of the period at Dec. 31, 2013	$ 32.1	$ 261.9	$ (23.5)	$ 67.7	$ 338.2
Balance (in shares) at Dec. 31, 2013	42.8
Increase (Decrease) in Stockholders' Equity
Net income				70.8	70.8
Other comprehensive income (loss), net of tax			(29.8)		(29.8)
Excess tax benefit and share withholding		0.8			0.8
Share-based compensation		8.7			8.7
Shares issued	$ 0.3	3.5			3.8
Shares issued (in shares)	0.4
Dividends ($0.74, $0.70, and $0.66 per share) for the years 2016, 2015 and 2014 respectively				(28.7)	(28.7)
Balance at the end of the period at Dec. 31, 2014	$ 32.4	274.9	(53.3)	109.8	363.8
Balance (in shares) at Dec. 31, 2014	43.2
Increase (Decrease) in Stockholders' Equity
Net income				103.0	103.0
Other comprehensive income (loss), net of tax			6.4		6.4
Excess tax benefit and share withholding		2.6			2.6
Share-based compensation		12.2			12.2
Shares issued	$ 0.3	(1.0)			(0.7)
Shares issued (in shares)	0.4
Shares repurchased	$ (0.1)	(0.8)		(5.0)	(5.9)
Shares repurchased (in shares)	(0.1)
Dividends ($0.74, $0.70, and $0.66 per share) for the years 2016, 2015 and 2014 respectively				(30.8)	(30.8)
Balance at the end of the period at Dec. 31, 2015	$ 32.6	287.9	(46.9)	177.0	$ 450.6
Balance (in shares) at Dec. 31, 2015	43.5				43.5
Increase (Decrease) in Stockholders' Equity
Net income				80.5	$ 80.5
Other comprehensive income (loss), net of tax			0.8		0.8
Excess tax benefit and share withholding		2.2			2.2
Share-based compensation		11.2			11.2
Shares issued	$ 0.2	(4.9)			(4.7)
Shares issued (in shares)	0.3
Shares repurchased	$ (0.7)	(6.6)		(29.6)	(36.9)
Shares repurchased (in shares)	(0.9)
Dividends ($0.74, $0.70, and $0.66 per share) for the years 2016, 2015 and 2014 respectively				(32.2)	(32.2)
Balance at the end of the period at Dec. 31, 2016	$ 32.1	$ 289.8	$ (46.1)	$ 195.7	$ 471.5
Balance (in shares) at Dec. 31, 2016	42.9				42.9

DESCRIPTION OF THE BUSINESS	12 Months Ended
DESCRIPTION OF THE BUSINESS	Dec. 31, 2016
DESCRIPTION OF THE BUSINESS
DESCRIPTION OF THE BUSINESS	1.DESCRIPTION OF THE BUSINESS Matson, Inc., a holding company incorporated in January 2012 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. For financial information by segment for the three years ended December 31, 2016, see Note 15. Ocean Transportation: Matson’s Ocean Transportation business is conducted through Matson Navigation Company, Inc. (“MatNav”), a wholly-owned subsidiary of Matson, Inc. Founded in 1882, MatNav provides a vital lifeline of ocean freight transportation services to the domestic non-contiguous economies of Hawaii, Alaska and Guam, and to other island economies in Micronesia. MatNav also operates a premium, expedited service from China to Long Beach, California, and provides services to various islands in the South Pacific. In addition, subsidiaries of MatNav provide container stevedoring, container equipment maintenance and other terminal services for MatNav and other ocean carriers on the Hawaiian islands of Oahu, Hawaii, Maui and Kauai, and in the Alaska locations of Anchorage, Kodiak and Dutch Harbor. Matson’s fleet of 22 owned vessels and five chartered vessels includes containerships, combination container and roll-on/roll-off ships and custom-designed barges. 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. (“SSA”), a subsidiary of Carrix, Inc. SSAT provides terminal and stevedoring services to various carriers at six terminal facilities on the U.S. West Coast, including to MatNav at three of those facilities (“Terminal Joint Venture”). Matson records its share of income in the Terminal Joint Venture in operating costs in the Consolidated Statements of Income and Comprehensive Income, and within the Ocean Transportation segment due to the nature of SSAT’s operations. Logistics: Matson’s Logistics business is conducted through Matson Logistics, Inc. (“Matson Logistics”), a wholly-owned subsidiary of MatNav. Established in 1987, Matson Logistics is an asset-light business that provides a variety of logistic 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 consolidation (“LCL”) and freight forwarding services (collectively “Freight Forwarding Services”); (iii) warehousing and distribution services; and (iv) supply chain management and other services. Recent Acquisitions: On August 4, 2016, Matson Logistics completed its acquisition of Span Intermediate, LLC (“Span Alaska”), a market leading provider of LCL consolidation and freight forwarding services to Alaska (the “Span Alaska Acquisition”). On May 29, 2015, Matson completed its acquisition of Horizon Lines, Inc. (“Horizon”). As a result, Matson acquired Horizon’s Alaska operations and assumed all of Horizon’s non-Hawaii assets and liabilities (the “Horizon Acquisition”) (see Note 3).

SIGNIFICANT ACCOUNTING POLICIES

12 Months Ended

Dec. 31, 2016

SIGNIFICANT ACCOUNTING POLICIES

SIGNIFICANT ACCOUNTING POLICIES

2.SIGNIFICANT ACCOUNTING POLICIES

Principles of Consolidation: The Consolidated Financial Statements include the accounts of Matson, Inc. and all wholly-owned subsidiaries, after elimination of significant 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. A controlling financial interest is one in which the Company has a majority voting interest or one in which the Company is the primary beneficiary of a variable interest entity. The Company accounts for its investment in the Terminal Joint Venture using the equity method of accounting (see Note 4). The Consolidated Financial Statements include the accounts and activities of Horizon from acquisition date on May 29, 2015, and Span Alaska from acquisition date on August 4, 2016 (see Note 3).

Fiscal Year: The period end for Matson, Inc. is December 31. The period end for MatNav occurred on the last Friday in December, except for Matson Logistics Warehousing, Inc. whose period closed on December 31. Included in these Consolidated Financial Statements are 53 weeks in the 2016 fiscal year, and 52 weeks in the 2015 and 2014 fiscal years for MatNav.

Foreign Currency Transactions: The United States (U.S.) dollar is the functional currency for substantially all of the financial statements of the Company’s foreign subsidiaries. Foreign currency denominated assets and liabilities of the Company’s foreign subsidiaries are translated into U.S. dollars at exchange rates existing at the respective balance sheet dates. Translation adjustments resulting from fluctuations in exchange rates are recorded as a component of Accumulated Other Comprehensive Loss within shareholders’ equity. The Company translates the result of operations of its foreign subsidiaries at the average exchange rate during the respective periods. Gains and losses resulting from foreign currency transactions are included in selling, general and administrative costs in the Consolidated Statements of Income and Comprehensive Income.

Use of Estimates: The preparation of the 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, long-lived vessel and equipment impairment, capitalized interest, allowance for doubtful accounts, goodwill and other finite-lived intangible assets impairment, legal contingencies, uninsured liabilities, accrual estimates, pension and post-retirement estimates, multi-employer withdrawal liabilities, and income taxes. Future results could be materially affected if actual results differ from these estimates and assumptions.

Reclassification: Other receivables of $21.5 million have been reclassified from net accounts receivable to prepaid expenses and other assets in the Company’s Consolidated Balance Sheet at December 31, 2015 to conform to the current year presentation.

Cash and Cash Equivalents: Cash equivalents consist of highly liquid investments with an original maturity of three months or less at the date of purchase. The Company carries these investments at cost, which approximates fair value. Outstanding checks in excess of funds on deposit totaled $21.3 million and $13.8 million at December 31, 2016 and 2015, respectively, and are reflected as current liabilities in the consolidated balance sheets.

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 Level 2 inputs for its accounts receivable, capital construction fund – cash on deposit, and variable and fixed rate debt. The fair values of cash and cash equivalents, accounts receivable and variable rate debt approximate their carrying values due to the nature of the instruments. The fair value of fixed rate debt is calculated based upon interest rates available for debt with terms and maturities similar to the Company’s existing debt arrangements. The carrying value and fair value of the Company’s financial instruments as of December 31, 2016 and 2015 are as follows (in millions).


					Quoted Prices in		Significant		Significant
	Total				Active Markets		Observable		Unobservable
	Carrying Value		Total		(Level 1)		Inputs (Level 2)		Inputs (Level 3)
	December 31, 2016		Fair Value Measurements at December 31, 2016
Cash and cash equivalents	$	13.9	$	13.9	$	13.9	$	—	$	—
Accounts receivable, net		189.5		189.5		—		189.5		—
Capital Construction Fund - cash on deposit		31.2		31.2		—		31.2		—
Variable rate debt		55.0		55.0		—		55.0		—
Fixed rate debt		683.9		685.2		—		685.2		—


	December 31, 2015		Fair Value Measurements at December 31, 2015
Cash and cash equivalents	$	25.5	$	25.5	$	25.5	$	—	$	—
Accounts receivable, net		192.8		192.8		—		192.8		—
Fixed rate debt		429.9		443.8		—		443.8		—

Accounts Receivable, net: Accounts receivable represents amounts due from trade customers arising in the normal course of business. Accounts receivable are shown net of allowance for doubtful accounts receivable in the Consolidated Balance Sheets. At December 31, 2016, and 2015, the Company had assigned $174.7 million and $176.6 million of eligible accounts receivable, respectively, to the Capital Construction Fund (see Note 7).

Allowance for Doubtful Accounts: Allowances for doubtful accounts receivable are established by management based on estimates of collectability. Estimates of collectability are principally based on an evaluation of the current financial condition of the Company’s customers and potential risks to collection, payment history and other factors which are regularly monitored by the Company. The changes in the allowance for doubtful accounts receivable for the three years ended December 31, 2016 were as follows (in millions):


	Balance at		Expense		Write-offs		Balance at
Year	Beginning of Year		(Recovery)		and Other		End of Year
2016 (1)	$	6.6	$	(0.3)	$	(2.1)	$	4.2
2015	$	5.0	$	2.0	$	(0.4)	$	6.6
2014	$	4.1	$	1.8	$	(0.9)	$	5.0

(1)

2016 expense includes amounts recovered from previously reserved doubtful accounts.

Prepaid Expenses and Other Assets: Prepaid expenses and other assets consist of the following at December 31, 2016 and 2015 (in millions):


	As of December 31,
Prepaid Expenses and Other Assets	2016		2015
Income tax receivables	$	23.4	$	15.1
Insurance related receivables		17.6		18.3
Prepaid fuel		11.5		9.3
Other		18.3		16.9
Total	$	70.8	$	59.6

Impairment of Terminal Joint Venture Investment: The Company’s investment in its Terminal Joint Venture, a related party, is reviewed for impairment annually, or whenever there is evidence that fair value may be below carrying cost. An investment is written down to fair value if fair value is below carrying cost and the impairment is other-than-temporary. In evaluating the fair value of an investment and whether any identified impairment is other-than-temporary, significant estimates and considerable judgments are involved. These estimates and judgments are based, in part, on the Company’s current and future evaluation of economic conditions in general, as well as the Terminal Joint Venture’s current and future plans. These fair value calculations are highly subjective because they require management to make assumptions and apply judgments to estimates regarding the timing and amount of future cash flows, probabilities related to various cash flow scenarios, and appropriate discount rates based on the perceived risks, among others. In evaluating whether an impairment is other-than-temporary, the Company considers all available information, including the length of time and extent of the impairment, the financial condition and near-term prospects of the Terminal Joint Venture, the Company’s ability and intent to hold the investment for a period of time sufficient to allow for any anticipated recovery in market value, and projected industry and economic trends, among others. Changes in these and other assumptions could affect the projected operational results and fair value of the Terminal Joint Venture, and accordingly, may require valuation adjustments to the Company’s investment that may materially impact the Company’s financial condition or its future operating results.

The Company has evaluated its investment in its related party Terminal Joint Venture for impairment and no impairment charges were recorded for the years ended December 31, 2016, 2015, and 2014.

Property and Equipment: Property and equipment are stated at cost. Certain costs incurred in the development of internal-use software are capitalized. Property and equipment is depreciated using the straight-line method over the estimated useful lives of the assets. The estimated useful lives of property and equipment range up to the following maximum life:


Classification		Life
Vessels		40 years
Machinery and equipment		20 years
Terminal facilities		35 years

Capitalized Interest: The Company entered into agreements with shipyards for the construction of four new vessels to be utilized within the Company’s operations (see Note 5). The Company is funding the construction of these vessels through borrowings and cash flows generated by the Company. The Company determined that the construction of these vessels are considered qualifying assets for the purposes of capitalizing interest on these assets.

The Company’s policy is to capitalize interest costs during the period the qualified assets are being readied for their intended use. The amount of capitalized interest is calculated based on the amount of payments 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 Consolidated Balance Sheet (see Note 5). During the three years ended December 31, 2016, 2015 and 2014, the Company capitalized $2.1 million, $0.4 million and $0.4 million of interest related to the construction of new vessels.

Deferred Dry-docking Costs: The Company’s U.S. flagged vessels must meet specified seaworthiness standards established by U.S. Coast Guard rules and classification society requirements. These standards require that the Company’s vessels undergo two dry-docking inspections within a five-year period. However, the majority of the Company’s U.S. flagged vessels are enrolled in the U.S. Coast Guard’s Underwater Survey in Lieu of Dry-docking (“UWILD”) program. The UWILD program allows eligible vessels to have their intermediate dry-docking requirement met with far less costly underwater inspection.

The Company operates six non-U.S. flag vessels (one owned; one under a bareboat charter arrangement; and the remaining on time charter) in the Pacific Islands. The Company is responsible for ensuring that the owned and bareboat chartered vessels meet international standards for seaworthiness, which among other requirements generally mandate that the Company perform two dry‑docking inspections every five years. The dry-dockings of the Company’s time chartered vessels are the responsibility of the vessels’ owners.

As costs associated with dry-docking inspections provide future economic benefits to the Company through continued operation of the vessels, the costs are deferred and amortized until the next regulatory scheduled dry-docking, which is usually over a two to five-year period. Routine vessel maintenance and repairs that do not improve or extend asset lives are charged to expense as incurred. Deferred dry-docking amortization amounts are charged to operating expenses of the Ocean Transportation segment in the Consolidated Statements of Income and Comprehensive Income.

Goodwill and Intangible Assets: Goodwill and intangible assets arise as a result of acquisitions made by the Company (see Notes 3 and 6). Intangible assets consisted of customer relationships which are being amortized using the straight-line method over the expected useful lives ranging from 3 to 21 years, and a trade name that has an indefinite life.

Impairment of Long-Lived Assets, Intangible Assets and Goodwill: The Company evaluates its long-lived assets, including intangible assets and goodwill for possible impairment in the fourth quarter, or whenever events or changes in circumstances indicate that it is more likely than not that the fair value is less than its carrying amount. The Company has reporting units with the Ocean Transportation and Logistics reportable segments. Long-lived assets and finite-lived intangible assets are group at the lowest level reporting unit for which identifiable cash flows are available.

Long-lived Assets and Finite-lived Intangible Assets: In evaluating impairment, the estimated future undiscounted cash flows generated by each of these asset groups is compared with the amount recorded for each asset group to determine if its carrying value is not recoverable. If this review determines that the amount recorded will not be recovered, the amount recorded for the asset group is reduced to its estimated fair value. These asset impairment analyses are highly subjective because they require management to make assumptions and apply considerable judgments to, among other things, estimates of the timing and amount of future cash flows, expected useful lives of the assets, uncertainty about future events, including changes in economic conditions, changes in operating performance, changes in the use of the assets, and ongoing costs of maintenance and improvements of the assets, and thus, the accounting estimates may change from period to period. If management uses different assumptions or if different conditions occur in future periods, the Company’s financial condition or its future operating results could be materially impacted.

No impairment charges of long-lived assets were recorded for the years ended December 31, 2016, and 2014. During the year ended December 31, 2015, the Company recorded an impairment charge of $2.1 million related to the write-down of inactive vessels from its recorded net book value to its estimated fair value of zero. The impairment expense is included in Ocean Transportation operating costs on the Consolidated Statements of Income and Comprehensive Income. No impairment charges of finite-lived intangible assets was recorded for the years ended December 31, 2016, 2015 and 2014.

Indefinite-life Intangible Assets and Goodwill: In estimating the fair value of a reporting unit, the Company uses a combination of a discounted cash flow model and fair value based on market multiples of earnings before interest, taxes, depreciation and amortization (“EBITDA”). The discounted cash flow approach requires the Company to use a number of assumptions, including market factors specific to the business, the amount and timing of estimated future cash flows to be generated by the business over an extended period of time, long-term growth rates for the business, and a discount rate that considers the risks related to the amount and timing of the cash flows. Although the assumptions used by the Company in its discounted cash flow model are consistent with the assumptions the Company used to generate its internal strategic plans and forecasts, significant judgment is required to estimate the amount and timing of future cash flows from the reporting unit and the risk of achieving those cash flows. When using market multiples of EBITDA, the Company must make judgments about the comparability of those multiples in closed and proposed transactions. Accordingly, changes in assumptions and estimates, including, but not limited to, changes driven by external factors, such as industry and economic trends, and those driven by internal factors, such as changes in the Company’s business strategy and its internal forecasts, could have a material effect on the Company’s financial condition or its future operating results.

The Company has evaluated its indefinite-life intangible assets and goodwill for impairment and determined that the fair value of each reporting unit substantially exceeds book value. No impairment charges were recorded for the years ended December 31, 2016, 2015 and 2014, respectively.

Accruals and other liabilities: Accruals and other liabilities consist of the following at December 31, 2016 and 2015 (in millions):


	As of December 31,
Accruals and Other Liabilities	2016		2015
Payroll and vacation benefits	$	23.3	$	23.1
Uninsured claims and related liabilities - short term		18.4		27.1
Incentives and other benefits		9.6		20.7
Molasses tank farm removal accrual		3.1		7.4
Restructuring and severance accruals related to Horizon		—		5.0
Interest on debt		5.8		3.9
Multi-employer withdrawal liability - short-term (see Note 12)		4.1		4.1
Other liabilities		12.6		19.4
Total	$	76.9	$	110.7

Pension and Post-Retirement Plans: Certain Ocean Transportation subsidiaries are members of the Pacific Maritime Association (“PMA”) and the Hawaii Stevedoring Industry Committee, which negotiate multi-employer pension plans covering certain shoreside bargaining unit personnel. The subsidiaries directly negotiate multi-employer pension plans covering other bargaining unit personnel. Pension costs are accrued in accordance with contribution rates established by the PMA, the parties to a plan or the trustees of a plan. Several trusteed, non-contributory, single-employer defined benefit plans and defined contribution plans cover substantially all other employees.

The estimation of the Company’s pension and post-retirement benefit expenses and liabilities requires that the Company make various assumptions. These assumptions include factors such as discount rates, expected long-term rate of return on pension plan assets, salary growth, health care cost trend rates, inflation, retirement rates, mortality rates, and expected contributions. Actual results that differ from the assumptions made could materially affect the Company’s financial condition or its future operating results. The effects of changing assumptions are included in unamortized net gains and losses, which directly affect accumulated other comprehensive income (loss). Additionally, these unamortized gains and losses are amortized and reclassified to income (loss) over future periods. Additional information about the Company’s pension and post-retirement plans is included in Note 11.

Uninsured Claims and Related Liabilities: The Company is uninsured for certain claims including, but not limited to, employee health, workers’ compensation, general liability, real and personal property. Where feasible, the Company obtains third-party excess insurance coverage to limit its exposure to these claims. When estimating its uninsured claims and related liabilities, the Company considers a number of factors, including historical claims experience, demographic factors, current trends, and analyses provided by indepeCan yndent third-parties. Periodically, management reviews its assumptions and the analyses provided by independent third-parties to determine the adequacy of the Company’s uninsured claims and related liabilities. The Company’s uninsured claims and related liabilities contain uncertainties because management is required to apply judgment and make long-term assumptions to estimate the ultimate cost to settle reported claims, and of claims incurred but not reported, as of the balance sheet date. If management uses different assumptions or if different conditions occur in future periods, the Company’s financial condition or its future operating results could be materially impacted.

Legal Contingencies: The Company’s results of operations could be affected by significant litigation adverse to the Company, including, but not limited to, liability claims, antitrust claims, claims related to coastwise trading matters, lawsuits involving private plaintiffs or government agencies, and environmental related matters. The Company records accruals for legal matters when the information available indicates that it is probable that a liability has been incurred and the amount of the loss can be reasonably estimated. Management makes adjustments to these accruals to reflect the impact and status of negotiations, settlements, rulings, advice of outside legal counsel and other information and events that may pertain to a particular matter. Predicting the outcome of claims and lawsuits and estimating related costs and exposure involves substantial uncertainties that could cause actual costs to vary materially from those estimates. In making determinations of likely outcomes of litigation matters, the Company considers many factors. These factors include, but are not limited to, the nature of specific claims including un-asserted claims, the Company’s experience with similar types of claims, the jurisdiction in which the matter is filed, input from outside legal counsel, the likelihood of resolving the matter through alternative dispute resolution mechanisms and the matter’s current status.

Recognition of Revenues and Expenses: 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 are recognized as incurred. Other ocean transportation operating costs such as terminal operating overhead and general and administrative expenses are charged to operating costs as incurred. Revenues and costs from terminal and other related services are recognized upon completion of the services. Revenues and costs from ship management services are recognized in proportion to the services performed.

Hawaii, Alaska, Guam and certain Pacific island service freight rates are provided in tariffs filed with the Surface Transportation Board of the U.S. Department of Transportation; for other Pacific island services, the rates are filed with the Federal Maritime Commission. The Alaska and China service rates are predominately established by individual contracts with customers.

Logistics transportation brokerage services revenue consists of amounts billed to customers for transportation brokerage services provided. The primary costs include third-party purchased transportation services. 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. The Company reports revenue on a gross basis as the Company serves as principal in transactions because it is responsible for the contractual relationship with the customer, has latitude in establishing prices, has discretion in supplier selection, and retains credit risk.

Logistics warehousing and distribution services revenue consist of amounts billed to customers for storage, handling, and value-added packaging of customer merchandise. For customer dedicated warehouses, storage revenue is recognized as earned over the life of the contract. Storage revenue generated by the public warehouses is recognized in the month the service is provided according to the terms of the contract. Storage expenses are recognized as incurred. Handling and value-added packaging revenue and expense are recognized in proportion to the services completed. Logistics supply chain management and other services, and related costs are recognized in proportion to the services performed.

Dividends: The Company recognizes dividends as a liability when approved by the Board of Directors.

Share-Based Compensation: The Company records compensation expense for all share-based payment awards made to employees and directors. The Company’s various equity plans are more fully described in Note 13.

Income Taxes: Deferred income taxes are provided for the tax effect of temporary differences between the tax basis of assets and liabilities and their reported amounts in the Consolidated Financial Statements. Deferred tax assets and deferred tax liabilities are adjusted to the extent necessary to reflect tax rates expected to be in effect when the temporary differences reverse. Adjustments may be required to deferred tax assets and deferred tax liabilities due to changes in tax laws and audit adjustments by tax authorities. To the extent adjustments are required in any given period, the adjustments would be included within the tax provision in the Consolidated Statements of Income and Comprehensive Income and/or Consolidated Balance Sheets.

The Company makes certain estimates and judgments in determining income tax expense for Consolidated Financial Statement purposes. These estimates and judgments are applied in the calculation of tax credits, tax benefits and deductions, and in the calculation of certain deferred tax assets and liabilities, which arise from differences in the timing of recognition of revenue and expense for tax and Consolidated Financial Statement purposes. In addition, judgment is required in determining if, based on the weight of available evidence, management believes that it is more likely than not that some portion or all of a recorded deferred tax asset would not be realized in future periods. A valuation allowance would be established if, based on the weight of available evidence, management believes that it is more likely than not that some portion or all of a recorded deferred tax asset would not be realized in future periods (see Note 10). Significant changes to these estimates may result in an increase or decrease to the Company’s tax provision in a subsequent period.

In addition, the calculation of tax liabilities involves significant judgment in estimating the impact of uncertain tax positions taken or expected to be taken with respect to the application of complex tax laws. Resolution of these uncertainties in a manner inconsistent with management’s expectations could materially affect the Company’s financial condition or its future operating results.

Comprehensive Income (Loss): Comprehensive income (loss) includes all changes in Shareholders’ Equity, except those resulting from common stock transactions. Other comprehensive income (loss) in the Consolidated Statements of Income and Comprehensive Income are shown net of tax benefit (expense) of $0.7 million, $(5.0) million and $19.4 million for the years ended December 2016, 2015, and 2014, respectively. Changes in accumulated other comprehensive income (loss) by component, net of tax, are as follows (in millions):


					Non-								Accumulated
					Qualified		Foreign						Other
			Post		Pension		Currency		Interest				Comprehensive
	Pensions		Retirement		Plans		Translation		Hedge		Other		Income (Loss)
Balance at December 31, 2014	$	(45.0)	$	(7.2)	$	(0.5)	$	0.3	$	(0.7)	$	(0.2)	$	(53.3)
Net gain (loss) in prior service costs		3.7		1.4		0.5		—		—		(0.5)		5.1
Amortization of prior service cost		(1.3)		0.1		(0.1)		—		—		—		(1.3)
Amortization of net loss (gain)		0.9		1.0		(0.1)		—		—		—		1.8
Foreign currency translation adjustment		—		—		—		0.7		—		—		0.7
Other		—		—		—		—		0.1		—		0.1
Balance at December 31, 2015		(41.7)		(4.7)		(0.2)		1.0		(0.6)		(0.7)		(46.9)
Net gain (loss) in prior service costs		—		0.7		(0.1)		—		—		0.1		0.7
Amortization of prior service cost		(1.4)		—		(0.1)		—		—		0.2		(1.3)
Amortization of net loss (gain)		1.7		(0.4)		—		—		—		(0.1)		1.2
Foreign currency translation adjustment		—		—		—		0.1		—		—		0.1
Other		—		—		—		—		0.1		—		0.1
Balance at December 31, 2016	$	(41.4)	$	(4.4)	$	(0.4)	$	1.1	$	(0.5)	$	(0.5)	$	(46.1)

Basic and Diluted Earnings per Share (“EPS”) of Common Stock: Basic earnings per share are determined by dividing net income by the weighted-average common shares outstanding during the year. The calculation of diluted earnings per share includes the dilutive effect of unexercised non-qualified stock options and non-vested stock units. The computation of weighted average dilutive shares outstanding excluded a nominal amount of anti-dilutive non-qualified stock options for each of the years 2016, 2015, and 2014.

The denominator used to compute basic and diluted earnings per share for the three years ended December 31, 2016, were as follows (in millions):


	Year Ended December 31, 2016					Year Ended December 31, 2015					Year Ended December 31, 2014
			Weighted	Per				Weighted	Per				Weighted	Per
			Average	Common				Average	Common				Average	Common
	Net		Common	Share		Net		Common	Share		Net		Common	Share
	Income		Shares	Amount		Income		Shares	Amount		Income		Shares	Amount
Basic:	$	80.5	43.1	$	1.87	$	103.0	43.5	$	2.37	$	70.8	43.0	$	1.65
Effect of Dilutive Securities:			0.4		(0.02)			0.5		(0.03)			0.4		(0.02)
Diluted:	$	80.5	43.5	$	1.85	$	103.0	44.0	$	2.34	$	70.8	43.4	$	1.63

Rounding: Amounts in the Consolidated Financial Statements and Notes to the Consolidated Financial Statements are rounded to millions, except for per-share calculations and percentages which were determined based on amounts before rounding. Accordingly, a recalculation of some per-share amounts and percentages, if based on the reported data, may be slightly different.

New Accounting Pronouncements: Revenue from Contracts with Customers: In May 2014, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) ASU 2014-09, “Revenue from Contracts with Customers (Topic 606)” (“ASU 2014-09”). The guidance establishes principles regarding the nature, timing, and uncertainty of revenue from contracts with customers. It removes inconsistencies in existing revenue requirements, provides a more robust framework for addressing revenue issues and improves comparability of revenue recognition practices across entities, industries, jurisdictions and capital markets. The new standard will be effective for interim and annual reporting periods beginning after December 15, 2016.

The Company is in the process of evaluating the impact of adopting ASU 2014-19 on its Consolidated Financial Statements. The Company is currently reviewing customer contracts in each of its operating segments for all services provided, assessing the impact of applying ASU 2014-19, and comparing this to the Company’s historical revenue recognition criteria. Based upon the preliminary review of customer contracts, the Company believes that the Company’s revenue recognition policies are consistent with the requirements of ASU 2014-19. While the Company continues to assess all potential impacts of adopting ASU 2014-19, based upon information available to date, the Company does not expect the adoption of ASU 2014-19 to have a significant impact either on the timing or recognition of Ocean Transportation and Logistics revenues.

Leases: In February 2016, the FASB issued ASU No. 2016-02, “Leases (Topic 842)” (“ASU 2016-02”), which requires lessees to record most leases in their balance sheets but recognize the expenses on their income statements in a manner similar to current practice. ASU 2016-02 states that a lessee would recognize a lease liability for the obligation to make lease payments, and a right-of-use asset for the underlying leased asset for the period of the lease term. The new standard is effective for interim and annual periods beginning after December 15, 2018 and early adoption is permitted. The Company is in the process of evaluating this guidance.

Share-Based Awards: In March 2016, the FASB issued ASU 2016-09, “Compensation - Stock Compensation (Topic 718): Improvements to Employee Share-Based Payment Accounting” (“ASU 2016-19”). The amendments are effective for interim and annual reporting periods beginning after December 15, 2016. Several aspects of the accounting for share-based payment award transactions are simplified, including: (a) income tax consequences; (b) classification of awards as either equity or liabilities; and (c) classification on the statement of cash flows. The Company believes the adoption of ASU 2016-09 will not have a material impact on the Company’s Consolidated Financial Statements.

BUSINESS COMBINATION

12 Months Ended

Dec. 31, 2016

BUSINESS COMBINATION

BUSINESS COMBINATION

3.BUSINESS COMBINATION

Span Alaska Acquisition: On August 4, 2016 (the “Effective Date”), Matson Logistics completed the purchase of 100 percent of the membership interests of Span Alaska pursuant to the terms of the Membership Interest Purchase Agreement, dated July 18, 2016. At the Effective Date, Span Alaska became a wholly-owned subsidiary of Matson Logistics. Span Alaska is an asset-light logistics company providing freight forwarding services primarily to the Alaska market. Span Alaska consolidates freight in Auburn, Washington, for shipment to Alaska and distribution through a network of terminals in Anchorage, Fairbanks, Wasilla, Kenai, Juneau and Kodiak. Span Alaska’s operations are recorded within the Logistics segment of the Company.

Total consideration paid by the Company on the Effective Date for the membership interests in Span Alaska including the repayment of Span Alaska’s debt and accrued interest, is as follows (in millions):


Span Alaska Consideration	Total
Membership interests	$	117.0
Span Alaska’s debt		81.9
Total	$	198.9

The Span Alaska Acquisition was accounted for as a business combination in accordance with ASC 805, Business Combinations (“ASU 805”). The assets acquired and liabilities assumed in the Span Alaska Acquisition were recorded based on fair value estimates as of the Effective Date, with the remaining unallocated purchase price recorded as goodwill. Such fair value estimates require significant judgment, and include estimates used in the valuation of property and equipment, and intangible assets. As of December 31, 2016, the Company has finalized the purchase accounting for the Span Alaska Acquisition.

The following table summarizes the fair values assigned to Span Alaska’s assets acquired and liabilities assumed at the Effective Date:


Purchase Price Allocation (in millions)	Total
Cash and cash equivalents	$	4.4
Accounts receivable		11.1
Prepaid and other current assets		0.9
Property and equipment		8.1
Intangibles – Customer relationships		79.3
Intangibles – Trade name		27.3
Other long-term assets		0.1
Accounts payable		(3.3)
Accruals and other current liabilities		(6.4)
Capital lease obligations		(1.2)
Span Alaska’s debt		(81.9)
Total identifiable assets less liabilities		38.4
Total consideration for membership interests		(117.0)
Goodwill	$	78.6

The amounts above include $0.4 million of purchase price adjustments recorded to the preliminary purchase price allocation initially recorded in the Company’s interim Condensed Consolidated Financial Statements for the three and nine-months ended September 30, 2016.

Property and equipment: Property and equipment of $8.1 million includes the fair value of terminal and transportation equipment (trucks, forklifts, trailers and containers) and other warehouse equipment, leasehold improvements and other office equipment.

Intangibles - The customer relationships and trade name intangible assets were recorded using information obtained from valuation specialists engaged by the Company to assist management with estimating the fair value of these intangible assets.

Customer relationships: Intangibles of $79.3 million related to customer relationships, and are being amortized using the straight-line method over 20 years. In determining the amortization period, the Company considered the historical trends of Span Alaska’s customers and related attrition rates. The Company also considered potential future attrition risks, existing competition, the costs associated with establishing a freight forwarding business including the need to develop a broad base of customer relationships over a period of time. Furthermore, the Company considered existing relationships with ocean transportation service providers in Alaska, and the potential impact of competition. As a result, the Company believes that Span Alaska’s customers are considered less vulnerable to attrition.

Trade name: Intangibles of $27.3 million related to the Span Alaska trade name, which was determined to have an indefinite life. Span Alaska has operated for a period in excess of 38 years, and its trade name is widely known in Alaska for high quality and reliable freight forwarding services. The Span Alaska operations will continue to be operated under the Span Alaska trade name, independent of Matson’s ocean transportation operation in Alaska.

Span Alaska’s debt: The Company repaid all of Span Alaska’s debt including accrued interest of $81.9 million, as of the Effective Date.

Goodwill: The Company recorded goodwill of $78.6 million from the Span Alaska Acquisition, which represents the excess of the fair value of consideration paid by the Company over the fair value of the underlying identifiable assets acquired and liabilities assumed. In accordance with ASC 805, goodwill will not be amortized, but instead will be tested for impairment at least annually, or whenever events or circumstances have occurred that may indicate a possible impairment.

Goodwill arises as a result of several factors including: (i) the Span Alaska Acquisition significantly expands Matson’s Logistics’ platform and Matson’s long-term commitment in the Alaska market; (ii) Span Alaska is a leading freight forwarding business and continues to be led by an experienced management team and assembled workforce with knowledge of the Alaska industry and of its customers; and (iii) the additional growth potential of Span Alaska.

The Company's Consolidated Statements of Income and Comprehensive Income for the year ended December 31, 2016 include operating revenue of $22.8 million (after elimination of intercompany revenue), and operating income of $3.5 million, respectively, from Span Alaska’s operations, and in the Logistics segment. One-time acquisition related costs of approximately $3.0 million incurred as a result of the Span Alaska Acquisition, is included in selling, general and administrative costs in the Consolidated Statements of Income and Comprehensive Income.

Horizon Acquisition: On May 29, 2015, Matson completed its acquisition of Horizon whereby MatNav acquired Horizon’s Alaska operations and assumed all of Horizon’s non-Hawaii assets and liabilities (the “Horizon Acquisition”). Immediately before the completion of the Horizon Acquisition, Horizon sold certain of its subsidiaries to the Pasha Group (the “Pasha Transaction”) that: (i) conducted Horizon’s Hawaii operations (including owning the assets used to conduct such Hawaii operations and being responsible for the liabilities related thereto), and (ii) employed the Horizon employees who conducted its Hawaii operations. Horizon also completed the termination of its Puerto Rico operations during the first quarter of 2015. The Alaska operations are recorded within the Ocean Transportation segment of the Company.

Total consideration for the Horizon Acquisition was $495.4 million based on the fair value of common shares of $29.4 million, warrants of $37.1 million, and Horizon’s debt including accrued interest and breakage fees of $428.9 million. Immediately following the close of the Horizon Acquisition, the Company repaid the assumed debt and redeemed all of Horizon’s outstanding warrants.

The Horizon Acquisition was accounted for as a business combination in accordance with ASC 805. Assets acquired and liabilities assumed were recorded at estimated fair value at May 29, 2015, with the remaining unallocated purchase price of $217.7 million recorded as goodwill. The Company finalized its purchase accounting for the Horizon Acquisition as of June 30, 2016. The following table summarizes the fair values assigned to Horizon's assets acquired and liabilities assumed that were recognized as of the acquisition date, with purchase price allocation adjustments since the preliminary purchase price allocation previously disclosed as of December 31, 2015:


Purchase Price Allocation (in millions)	Preliminary Estimates		Adjustments		Final
Cash and cash equivalents	$	0.8	$	—	$	0.8
Accounts receivable		31.7		—		31.7
Other current assets		7.2		—		7.2
Deferred tax assets, net		45.6		0.7		46.3
Property and equipment		170.4		—		170.4
Intangibles - Customer relationships		140.0		—		140.0
Other long-term assets		4.1		—		4.1
Accounts payable		(22.8)		—		(22.8)
Accruals and other current liabilities		(32.1)		0.7		(31.4)
Multi-employer withdrawal liability		(60.6)		(4.9)		(65.5)
Capital lease obligations		(1.6)		—		(1.6)
Horizon's debt and warrants		(467.5)		—		(467.5)
Total identifiable assets less liabilities		(184.8)		(3.5)