matx_Current_Folio_10KA

 

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

FORM 10-K/A

(Amendment No. 1)

 

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

 

For the fiscal year ended December 31, 2018

 

OR

 

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

(I.R.S. Employer

incorporation or organization)

Identification No.)

 

1411 Sand Island Parkway

Honolulu, HI 96819

(Address of principal executive offices and zip code)

 

(808) 848-1211

(Registrant’s telephone number, including area code)

 

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

 

 

 

 

Title of each class

    

Name of each exchange
on which registered

Common Stock, without par value

 

New York Stock Exchange

 

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

None

 

Number of shares of Common Stock outstanding at February 20, 2019:

42,826,203

 

Aggregate market value of Common Stock held by non-affiliates at June 30, 2018:

$1,614,645,486

 

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act.  Yes ☒  No ☐

 

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act.  Yes ☐  No ☒

 

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 and posted on its corporate Web site, if any, every Interactive Data File  required to be submitted and posted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).  Yes ☒  No ☐

 

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K.  ☒

 

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

 

 

 

 

Large accelerated filer ☒

 

Accelerated filer ☐

 

 

 

Non-accelerated filer ☐
(Do not check if a smaller reporting company)

 

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

 

Documents Incorporated By Reference

 

The following document is incorporated by reference in Part III of the Annual Report on Form 10-K to the extent described therein: Proxy Statement for the annual meeting of shareholders of Matson, Inc. to be held April 25, 2019.

 

 

 

 


 

EXPLANATORY NOTE

Matson, Inc. (the “Company”) is filing this Amendment No. 1  on Form 10‑K/A (the “Amendment”) to its Annual Report on Form 10‑K for the fiscal year ended December 31, 2018 (the “Original 10‑K”) filed with the Securities and Exchange Commission (the “SEC”) on March 4, 2019 to include the financial statements and related notes of SSA Terminals, LLC (“SSAT”), an unconsolidated joint venture in which the Company holds a 35% equity ownership interest.   The Company accounts for its interest in SSAT using the equity method of accounting.

Rule 3‑09 of Regulation S-X under the Securities Exchange Act of 1934, as amended, provides that if a 50%-or-less-owned person accounted for by the equity method meets the first or third condition of the significant subsidiary tests set forth in Rule 1‑02(w) of Regulation S-X, substituting 20% for 10%, separate financial statements for such 50%-or-less-owned person shall be filed.   SSAT met one of the significant subsidiary tests as described above for the Company’s fiscal year ended December 31, 2018.  Pursuant to Rule 3‑09(b), the separate audited financial statements for SSAT were not included in the Original 10‑K  because SSAT’s fiscal year ended later than the Company’s fiscal year.

Item 15 of the Original 10‑K is being amended to include as an exhibit the required financial statements for SSAT’s fiscal years ended January 25,  2019, January 26, 2018 and January 27, 2017.   In addition, Item 15 of the Original 10‑K is being amended to include the consent of the independent auditor of SSAT and certifications by our Chief Executive Officer and Chief Financial Officer.

No other changes have been made to the Original 10‑K other than as described above.   This Amendment does not reflect subsequent events occurring after the original filing date of the Original 10‑K or modify or update in any way disclosures made in the Original 10‑K.   Among other things, forward-looking statements made in the Original 10‑K have not been revised to reflect events that occurred or facts that became known to us after the filing of the Original 10‑K, and such forward-looking statements should be read in their historical context.   Accordingly, this Amendment should be read in conjunction with the Original 10‑K and our filings with the SEC made subsequent to the filing of the Original 10‑K on March 4, 2019.

2


 

PART IV

ITEM 15.  EXHIBITS AND FINANCIAL STATEMENT SCHEDULES

C.Exhibits Required by Item 601 of Regulation S-K

Exhibits not filed herewith are incorporated by reference to the exhibit number and previous filing shown in parentheses.  All previous exhibits were filed with the Securities and Exchange Commission in Washington, D.C.

Exhibits filed pursuant to the Securities Exchange Act of 1934 were filed under file number 001‑34187.  Shareholders may obtain copies of exhibits for a copying and handling charge of $0.15 per page by writing to, Corporate Secretary, Matson, Inc., 555 12th Street, Oakland, California 94607.

 

 

2

Plan of acquisition, reorganization, arrangement, liquidation or succession.

 

 

2.1

Agreement and Plan of Merger, dated as of November 11, 2014, by and among Matson Navigation Company, Inc., Hogan Acquisition Inc. and Horizon Lines, Inc. (incorporated by reference to Exhibit 2.1 of Matson’s Form 8-K dated November 11, 2014).

 

 

2.2

Amendment No. 1 to Agreement and Plan of Merger, dated as of February 13, 2015, by and among Matson Navigation Company, Inc., Hogan Acquisition Inc. and Horizon Lines, Inc. (incorporated by reference to Exhibit 2.1 of Matson’s Form 8-K dated February 17, 2015).

 

 

2.3

Contribution, Assumption and Purchase Agreement, dated as of November 11, 2014, by and among The Pasha Group, SR Holding LLC, Horizon Lines, Inc. and Sunrise Operations LLC (incorporated by reference to Exhibit 2.2 of Horizon Lines, Inc.’s Form 8-K dated November 11, 2014).

 

 

2.4

Amendment No. 1 to the Contribution, Assumption and Purchase Agreement, dated as of May 29, 2015, by and among The Pasha Group, SR Holding LLC, Horizon Lines, Inc. and Sunrise Operations LLC (incorporated by reference to Exhibit 2.2 of Matson’s Form 10-Q for the quarter ended June 30, 2015).

 

 

2.5

Membership Interest Purchase Agreement, dated as of July 18, 2016, by and between Matson Logistics, Inc. and Span Holdings, LLC (incorporated by reference to Exhibit 2.1 of Matson’s Form 8‑K dated July 18, 2016).

 

 

3

Articles of incorporation and bylaws.

 

 

3.1

Amended and Restated Articles of Incorporation of Matson, Inc. (incorporated by reference to Exhibit 3.1 of Matson’s Form 10-Q for the quarter ended June 30, 2012).

 

 

3.2

Articles of Amendment to Change Corporate Name (incorporated by reference to Exhibit 4.2 of Matson’s Form S-8 dated October 26, 2012).

 

 

3.3

Amended and Restated Bylaws of Matson, Inc. (as amended as of November 6, 2013) (incorporated by reference to Exhibit 3.1 of Matson’s Form 10-Q for the quarter ended September 30, 2013).

 

 

10

Material contracts.

 

 

10.1

Amended and Restated Credit Agreement among Matson, Inc., Bank of America, N.A., as the Agent, and the lenders thereto, dated as of June 29, 2017 (incorporated by reference to Exhibit 10.1 of Matson’s Form 8-K dated June 29, 2017).

 

 

10.2

Amendment to Note Purchase Agreement among Matson, Inc. and the purchasers named therein, dated as of June 29, 2017 (incorporated by reference to Exhibit 10.2 of Matson’s Form 8-K dated June 29, 2017).

 

 

10.3

Amendment to Note Purchase Agreement among Matson, Inc. and the purchasers named therein, dated as of June 29, 2017 (incorporated by reference to Exhibit 10.3 of Matson’s Form 8-K dated June 29, 2017).

 

 

3


 

10.4

Amendment to Third Amended and Restated Note Purchase Agreement among Matson, Inc. and the purchasers named therein, dated as of June 29, 2017 (incorporated by reference to Exhibit 10.4 of Matson’s Form 8-K dated June 29, 2017).

 

 

10.5

Amendment to Note Purchase Agreement among Matson, Inc. and the purchasers named therein, dated as of June 29, 2017 (incorporated by reference to Exhibit 10.5 of Matson’s Form 8-K dated June 29, 2017).

 

 

10.6

Note Purchase Agreement among Matson, Inc. and the purchasers party thereto, dated as of December 21, 2016 (incorporated by reference to Exhibit 10.1 of Matson’s Form 8-K dated December 21, 2016).

 

 

10.7

Third Amended and Restated Note Purchase and Private Shelf Agreement among Matson, Inc. and the purchasers party thereto, dated as of September 14, 2016 (incorporated by reference to Exhibit 10.1 of Matson’s Form 8-K dated September 14, 2016).

 

 

10.8

Note Purchase Agreement among Matson, Inc. and the purchasers party thereto, dated as of July 30, 2015 (incorporated by reference to Exhibit 10.1 of Matson’s Form 8-K dated August 3, 2015).

 

 

10.9

Amendment to the Note Purchase Agreement among Matson, Inc. and the purchasers party thereto, dated as of July 30, 2015 (incorporated by reference to Exhibit 10.3 of Matson’s Form 8-K dated August 3, 2015).

 

 

10.10

First Amendment to Note Purchase Agreement amount Matson, Inc. and the purchasers party thereto, dated as of October 1, 2015 (incorporated by reference to Exhibit 10.1 of Matson’s Form 8-K dated October 2, 2015).

 

 

10.11

Note Purchase Agreement among Matson, Inc., and the purchasers party thereto, dated as of November 5, 2013 (incorporated by reference to Exhibit 10.1 of Matson’s Form 8-K dated January 29, 2014).

 

 

10.12

Amended and Restated Limited Liability Company Agreement of SSA Terminals, LLC by and between SSA Ventures, Inc. and Matson Ventures, Inc., dated as of April 24, 2002 (certain portions of this exhibit have been omitted pursuant to a confidential treatment request submitted to the Commission) (incorporated by reference to Exhibit 10.1 of Matson’s Form 10-Q for the quarter ended June 30, 2012).

 

 

10.13

Parent Company Agreement, dated as of April 24, 2002, by and among SSA Pacific Terminals, Inc., formerly known as Stevedoring Services of America, Inc., SSA Ventures, Inc., Matson Navigation Company, Inc. and Matson Ventures, Inc. (incorporated by reference to Exhibit 10.2 of Matson’s Form 10-Q for the quarter ended June 30, 2012).

 

10.14

Security Agreement between Matson Navigation Company, Inc. and the United States of America, with respect to $55 million of Title XI ship financing bonds, dated July 29, 2004 (incorporated by reference to Exhibit 10.a.(xxvi) of Alexander & Baldwin, Inc.’s Form 10-Q for the quarter ended September 30, 2004).

 

 

10.15

Amendment No. 1 dated September 21, 2007, to Security Agreement between Matson Navigation Company, Inc. and the United States of America, with respect to $55 million of Title XI ship financing bonds, dated July 29, 2004 (incorporated by reference to Exhibit 10.a.(xxx) of Alexander & Baldwin, Inc.’s Form 10-Q for the quarter ended September 30, 2007).

 

 

10.16*

Matson, Inc. 2007 Incentive Compensation Plan, amended and restated, effective January 29, 2015 (incorporated by reference to Exhibit 10.13 of Matson’s Form 10-K for the year ended December 31, 2014).

 

 

10.17*

Form of Notice of Performance Share Award Grant (incorporated by reference to Exhibit 10.1 of Matson’s Form 8-K dated January 29, 2013).

 

 

10.18*

Form of Matson, Inc. Performance Share Award Agreement (incorporated by reference to Exhibit 10.2 of Matson’s Form 8-K dated January 29, 2013).

 

 

4


 

10.19*

Form of Notice of Stock Option Grant (incorporated by reference to Exhibit 99.2 to Matson’s Form S‑8 dated October 26, 2012).

 

 

10.20*

Form of Stock Option Agreement for Non-Executive Employees (incorporated by reference to Exhibit 99.3 of Matson’s Form S-8 dated October 26, 2012).

 

 

10.21*

Form of Stock Option Agreement for Executive Employees (incorporated by reference to Exhibit 99.4 of Matson’s Form S-8 dated October 26, 2012).

 

 

10.22*

Form of Notice of Time-Based Restricted Stock Unit Grant (incorporated by reference to Exhibit 99.5 of Matson’s Form S-8 dated October 26, 2012).

 

 

10.23*

Form of Time-Based Restricted Stock Unit Agreement for Non-Executive Employees (incorporated by reference to Exhibit 99.6 of Matson’s Form S-8 dated October 26, 2012).

 

 

10.24*

Form of Time-Based Restricted Stock Unit Agreement for Executive Employees (incorporated by reference to Exhibit 99.7 of Matson’s Form S-8 dated October 26, 2012).

 

 

10.25*

Form of Amended and Restated Restricted Stock Unit Award Agreement for Non-Employee Directors (No Deferral) (incorporated by reference to Exhibit 10.20 of Matson’s Form 10-K for the year ended December 31, 2013).

 

 

10.26*

Form of Amended and Restated Restricted Stock Unit Award Agreement for Non-Employee Directors (Deferral Election) (incorporated by reference to Exhibit 10.21 of Matson’s Form 10-K for the year ended December 31, 2013).

 

 

10.27*

Form of Anti-Dilution Adjustment Amendment to Restricted Stock Unit Award Agreements (incorporated by reference to Exhibit 99.10 of Matson’s Form S-8 dated October 26, 2012).

 

 

10.28*

Form of Anti-Dilution Adjustment Amendment to Stock Option Agreements (incorporated by reference to Exhibit 99.11 of Matson’s Form S-8 dated October 26, 2012).

 

 

10.29*

Form of Stock Option Assumption Agreement (incorporated by reference to Exhibit 99.4 of Post‑Effective Amendment No. 2 to Alexander & Baldwin, Inc.’s Form S-8 dated June 6, 2012).

 

 

10.30*

Special Form of Stock Option Assumption Agreement (incorporated by reference to Exhibit 99.6 of Post‑Effective Amendment No. 2 to Alexander & Baldwin, Inc.’s Form S-8 dated June 6, 2012).

 

 

10.31*

Matson, Inc. Deferred Compensation Plan for Outside Directors (incorporated by reference to Exhibit 10.34 of Matson’s Form 10-K for the year ended December 31, 2012).

 

 

10.32*

Matson, Inc. Excess Benefits Plan, amended and restated effective August 27, 2014 (incorporated by reference to Exhibit 10.1 of Matson’s Form 8-K dated August 28, 2014).

 

 

10.33*,**

Matson, Inc. Executive Survivor/Retirement Benefit Plan (formerly known as the Alexander & Baldwin, Inc. Executive Survivor/Retirement Benefit Plan), amended and restated effective June 29, 2012.

 

 

10.34*

Matson, Inc. 1985 Supplemental Executive Retirement Plan (formerly known as the Alexander & Baldwin, Inc. 1985 Supplemental Executive Retirement Plan), amended and restated effective as of January 1, 2008 (incorporated by reference to Exhibit 10.b.1.(lii) of Alexander & Baldwin, Inc.’s Form 10-K for the year ended December 31, 2011).

 

 

10.35*

Amendment No. 1 to the Matson, Inc. 1985 Supplemental Executive Retirement Plan (formerly known as the Alexander & Baldwin, Inc. 1985 Supplemental Executive Retirement Plan), effective as of December 31, 2011 (incorporated by reference to Exhibit 10.b.1.(liii) of Alexander & Baldwin, Inc.’s Form 10-K for the year ended December 31, 2011).

 

 

5


 

10.36*

Amendment No. 2 to the Matson, Inc. 1985 Supplemental Executive Retirement Plan (formerly known as the Alexander & Baldwin, Inc. 1985 Supplemental Executive Retirement Plan), effective as of January 1, 2012 (incorporated by reference to Exhibit 10.b.1.(liv) of Alexander &Baldwin, Inc.’s Form 10-K for the year ended December 31, 2011).

 

 

10.37*

Form of Letter Agreement entered into with certain executive officers (incorporated by reference to Exhibit 10.45 of Matson’s Form 10-K for the year ended December 31, 2012).

 

 

10.38*

Schedule identifying executive officers who have entered into Form of Letter Agreement (incorporated by reference to Exhibit 10.42 of Matson’s Form 10-K for the year ended December 31, 2014).

 

 

10.39*

Form of Letter Agreement entered into with executive officer (incorporated by reference to Exhibit 10.1 of Matson’s Form 8-K dated October 24, 2014).

 

 

10.40*

Letter Agreement Counter Party (incorporated by reference to Exhibit 10.2 of Matson’s Form 8‑K dated October 24, 2014).

 

 

10.41*

Form of Letter Agreement entered into with executive officer (incorporated by reference to Exhibit 10.1 of Matson’s Form 8-K dated April 6, 2015).

 

 

10.42*

Letter Agreement Counter Parties (incorporated by reference to Exhibit 10.2 of Matson’s Form 8-K dated April 6, 2015).

 

 

10.43*

Form of Letter Agreement entered into with an officer (incorporated by reference to Exhibit 10.1 of Matson’s Form 8-K dated May 1, 2018).

 

 

10.44*

Letter Agreement Counter Parties (incorporated by reference to Exhibit 10.2 of Matson’s Form 8-K dated May 1, 2018).

 

 

10.45*

Matson, Inc. Executive Severance Plan (incorporated by reference to Exhibit 10.47 of Matson’s Form 10-K for the year ended December 31, 2012).

 

 

10.46*

Matson, Inc. Cash Incentive Plan (incorporated by reference to Exhibit 10.49 of Matson’s Form 10-K for the year ended December 31, 2012).

 

 

10.47*

Matson, Inc. Deferred Compensation Plan (incorporated by reference to Exhibit 10.51 of Matson’s Form 10-K for the year ended December 31, 2012).

 

 

10.48

Shipbuilding Contract, by and between Aker Philadelphia Shipyard, Inc. and Matson Navigation Company, Inc., dated as of November 6, 2013 (certain portions of this exhibit have been omitted pursuant to a confidential treatment request submitted to the Commission) (incorporated by reference to Exhibit 10.56 of Matson’s Form 10-K for the year ended December 31, 2013).

 

 

10.49

Shipbuilding Contract, by and between Aker Philadelphia Shipyard, Inc. and Matson Navigation Company, Inc., dated as of November 6, 2013 (certain portions of this exhibit have been omitted pursuant to a confidential treatment request submitted to the Commission) (incorporated by reference to Exhibit 10.57 of Matson’s Form 10-K for the year ended December 31, 2013).

 

 

10.50

Guaranty Agreement by Aker Philadelphia Shipyard ASA, in favor of Matson Navigation Company, Inc., dated as of November 6, 2013 (incorporated by reference to Exhibit 10.58 of Matson’s Form 10‑K for the year ended December 31, 2013).

 

 

10.51

Contract for Construction of Two Vessels, dated as of August 25, 2016, by and between Matson Navigation Company, Inc. and National Steel and Shipbuilding Company (certain portions of this exhibit have been omitted pursuant to a confidential treatment request submitted to the Commission) (incorporated by reference to Exhibit 10.1 of Matson’s Form 10-Q for the quarter ended September 30, 2016).

6


 

 

 

10.52

Purchaser’s Corporate Guaranty Agreement, by Matson, Inc., dated as of August 25, 2016 (incorporated by reference to Exhibit 10.2 of Matson’s Form 10-Q for the quarter ended September 30, 2016).

 

 

10.53

Contractor’s Corporate Guaranty Agreement, by General Dynamics Corporation, dated as of August 25, 2016 (incorporated by reference to Exhibit 10.3 of Matson’s Form 10-Q for the quarter ended September 30, 2016).

 

 

10.54

Form of Capital Construction Fund Agreement with Matson Navigation Company, as amended by Addendums No. 2, No. 5, No. 18, No. 20 and No. 31, thereto (incorporated by reference to Exhibit 10.60 of Matson’s Form 10-K for the year ended December 31, 2013).

 

 

10.55

Form of Voting Agreement, dated as of November 11, 2014, among Matson Navigation Company, Inc. and certain holders of voting securities of Horizon Lines, Inc. (incorporated by reference to Exhibit 10.1 of Matson’s Form 8-K dated November 11, 2014).

 

 

10.56*

Matson, Inc. 2016 Incentive Compensation Plan, amended as of October 25, 2017 (incorporated by reference to Exhibit 10.56 of Matson’s Form 10-K for the year ended December 31, 2017).

 

 

10.57*

Amended and Restated Matson, Inc. Cash Incentive Plan, effective January 1, 2016 (incorporated by reference to Exhibit 10.63 of Matson’s Form 10-K for the year ended December 31, 2016).

 

 

10.58*

Form of 2016 Plan Restricted Stock Unit Award Agreement for Non-Employee Directors (No Deferral) (incorporated by reference to Exhibit 10.64 of Matson’s Form 10-K for the year ended December 31, 2016).

 

 

10.59*

Form of 2016 Plan Restricted Stock Unit Award Agreement for Non-Employee Directors (Deferral Election) (incorporated by reference to Exhibit 10.65 of Matson’s Form 10-K for the year ended December 31, 2016).

 

 

10.60*

Form of 2016 Plan Time-Based Restricted Stock Unit Agreement for Non-Executive Employees (incorporated by reference to Exhibit 10.60 of Matson’s Form 10-K for the year ended December 31, 2017).

 

 

10.61*

Form of 2016 Plan Time-Based Restricted Stock Unit Agreement for Executive Employees (incorporated by reference to Exhibit 10.61 of Matson’s Form 10-K for the year ended December 31, 2017).

 

 

10.62*

Form of 2016 Plan Performance Share Award Agreement for Non-Executive Employees (incorporated by reference to Exhibit 10.62 of Matson’s Form 10-K for the year ended December 31, 2017).

 

 

10.63*

Form of 2016 Plan Performance Share Award Agreement for Executive Employees (incorporated by reference to Exhibit 10.63 of Matson’s Form 10-K for the year ended December 31, 2017).

 

 

10.64*

Form of Notice of 2016 Plan Performance Share Award Grant for Non-Executive Employees (incorporated by reference to Exhibit 10.70 of Matson’s Form 10-K for the year ended December 31, 2016).

 

 

10.65*

Form of Notice of 2016 Plan Performance Share Award Grant for Executive Employees (incorporated by reference to Exhibit 10.71 of Matson’s Form 10-K for the year ended December 31, 2016).

 

 

10.66*

Form of Notice of 2016 Time-Based Restricted Stock Unit Award Grant for Non-Executive Employees (incorporated by reference to Exhibit 10.72 of Matson’s Form 10-K for the year ended December 31, 2016).

 

 

10.67*

Form of Notice of 2016 Time-Based Restricted Stock Unit Award Grant for Executive Employees (incorporated by reference to Exhibit 10.73 of Matson’s Form 10-K for the year ended December 31, 2016).

7


 

 

 

10.68*

Addendum to Award Agreements for Outstanding Equity Awards, effective as of October 25, 2017 (incorporated by reference to Exhibit 10.68 of Matson’s Form 10-K for the year ended December 31, 2017)

 

 

21**

Matson, Inc. Subsidiaries as of February 15, 2019.

 

 

23.1**

Consent of Deloitte & Touche LLP dated March 4, 2019.

 

 

23.2

Consent of Ernst & Young LLP dated April 5, 2019.

 

 

31.1**

Certification of Chief Executive Officer, as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

 

 

31.2**

Certification of Chief Financial Officer, as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

 

 

31.3

Certification of Chief Executive Officer, as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

 

 

31.4

Certification of Chief Financial Officer, as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

 

 

32**

Certification of Chief Executive Officer and Chief Financial Officer Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

 

 

32.2††

Certification of Chief Executive Officer and Chief Financial Officer Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

 

 

99.1

Audited Consolidated Financial Statements of SSAT for the years ended January 25, 2019, January 26, 2018 and January 27, 2017.

 

 

101.INS**

XBRL Instance Document

101.SCH**

XBRL Taxonomy Extension Schema Document

101.CAL**

XBRL Taxonomy Extension Calculation Linkbase Document

101.DEF**

XBRL Taxonomy Extension Definition Linkbase Document

101.LAB**

XBRL Taxonomy Extension Label Linkbase Document

101.PRE**

XBRL Taxonomy Extension Presentation Linkbase Document


*      Indicates management contract or compensatory plan or arrangement.

**    Previously filed or furnished, as applicable, with the Original 10‑K on March 4, 2019.

       Filed herewith.

††     Furnished herewith.

8


 

SIGNATURE

Pursuant to the requirements of Section 13 or 15(d) 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: April 8, 2019

/s/ Joel M. Wine

 

Joel M. Wine

 

Senior Vice President and Chief Financial Officer

 

 

 

9


matx_Ex23_2

EXHIBIT 23.2

 

Consent of Independent Auditors

 

We consent to the incorporation by reference in the following Registration Statements:

          

 

 

 

 

(1) 

Registration Statement (Form S-8 No. 333-212194) pertaining to the Matson, Inc. 2016 Incentive Compensation Plan,

 

 

(2)

Registration Statement (Form S-8 No. 333-184623) pertaining to the Matson, Inc. 2007 Incentive Compensation Plan (Conformed to reflect the June 29, 2012 separation of Alexander & Baldwin, Inc. from Matson, Inc. (formerly known as Alexander & Baldwin Holdings, Inc.)),

 

 

(3) 

Registration Statement (Form S-8 No. 333-121194) pertaining to the Alexander & Baldwin, Inc. 1998 Stock Option/Stock Incentive Plan and Alexander & Baldwin, Inc. 1998 Non-Employee Director Stock Option Plan, as amended by Post-Effective Amendment No.1 filed on April 26, 2007 and as further amended by Post-Effective Amendment No. 2 filed on June 7, 2012,

 

 

(4)

Registration Statement (Form S-8 No. 333-166539) pertaining to the Alexander & Baldwin, Inc. Amended and Restated 2007 Incentive Compensation Plan, as amended by Post-Effective Amendment No. 1 filed on June 7, 2012,

 

 

(5)

Registration Statement (Form S-8 No. 333-142384) pertaining to the Alexander & Baldwin, Inc. 2007 Incentive Compensation Plan, as amended by Post-Effective Amendment No. 1 filed on June 7, 2012, and

 

 

(6)

Registration Statement (Form S-8 No. 333-69197) pertaining to the Alexander & Baldwin, Inc. 1998 Stock Option/Stock Incentive Plan and Alexander & Baldwin, Inc. 1998 Non-Employee Director Stock Option Plan, as amended by Post-Effective Amendment No. 1 filed on June 7, 2012;

 

of our report dated April 5, 2019, with respect to the consolidated financial statements of SSA Terminals, LLC for the year ended January 25, 2019 included in the Annual Report (Form 10-K/A) of Matson, Inc. for the year ended December 31, 2018.

 

/s/ Ernst & Young LLP

Seattle, Washington

April 5, 2019

 


matx_Ex31_3

EXHIBIT 31.3

 

CERTIFICATION

 

I, Matthew J. Cox, certify that:

 

1.           I have reviewed this Amendment No. 1 to the Annual Report on Form 10-K/A of Matson, Inc.;

 

2.           Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

 

3.           Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

 

4.           The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

 

(a)       Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

 

(b)       Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

 

(c)       Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

 

(d)       Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

 

5.           The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

 

(a)       All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

 

(b)       Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

 

 

 

 

 

By

/s/ Matthew J. Cox

 

 

Matthew J. Cox, Chairman and

 

 

Chief Executive Officer

Date:  April 8, 2019

 


matx_Ex31_4

EXHIBIT 31.4

 

CERTIFICATION

 

I, Joel M. Wine, certify that:

 

1.           I have reviewed this Amendment No. 1 to the Annual Report on Form 10-K/A of Matson, Inc.;

 

2.           Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

 

3.           Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

 

4.           The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

 

(a)        Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

 

(b)        Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

 

(c)        Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

 

(d)        Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

 

5.           The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

 

(a)        All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

 

(b)        Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

 

 

 

 

 

By

/s/ Joel M. Wine

 

 

Joel M. Wine, Senior Vice President

 

 

and Chief Financial Officer

Date:  April 8, 2019


matx_Ex32_2

EXHIBIT 32.2

 

Certification of Chief Executive Officer and

Chief Financial Officer Pursuant to

18 U.S.C. Section 1350, As Adopted Pursuant to

Section 906 of the Sarbanes-Oxley Act of 2002

 

In connection with Amendment No. 1 to the Annual Report of Matson, Inc. (the “Company”) on Form 10-K/A for the fiscal year ended December 31, 2018 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), Matthew J. Cox, as Chairman and Chief Executive Officer of the Company, and Joel M. Wine, as Senior Vice President and Chief Financial Officer of the Company, hereby certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that to their knowledge:

 

(1) The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

 

(2) The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

 

 

 

 

 

/s/ Matthew J. Cox

 

Name:

Matthew J. Cox

 

Title:

Chairman and Chief Executive Officer

 

Date:

April 8, 2019

 

 

 

 

/s/ Joel M. Wine

 

Name:

Joel M. Wine

 

Title:

Senior Vice President and Chief Financial Officer

 

Date:

April 8, 2019

 

 

 


matx_Ex99_1

Table of Contents

Exhibit 99.1

CONSOLIDATED FINANCIAL STATEMENTS

SSA Terminals, LLC 
Fiscal Years Ended January 25, 2019, January 26, 2018,
and January 27, 2017

With Report of Independent Auditors

Ernst & Young LLP

Picture 6

 

 


 

Table of Contents

SSA Terminals, LLC

Consolidated Financial Statements

Fiscal Years Ended January 25, 2019, January 26, 2018, and January 27, 2017

Contents

 

 

 

 

Report of Independent Auditors 

1

 

 

Consolidated Financial Statements 

 

 

 

Consolidated Balance Sheets 

3

Consolidated Statements of Operations 

4

Consolidated Statements of Comprehensive Income 

5

Consolidated Statements of Changes in Members’ Equity 

6

Consolidated Statements of Cash Flows 

7

Notes to Consolidated Financial Statements 

9

 

 

 

 

 


 

Table of Contents

Picture 1

Ernst & Young LLP

Suite 3500

999 Third Avenue

Seattle, WA 98104-4086

Tel: +1 206 621 1800

Fax: +1 206 654 7799

ey.com

 

Report of Independent Auditors

The Members

SSA Terminals, LLC

We have audited the accompanying consolidated financial statements of SSA Terminals, LLC (the Company), which comprise the consolidated balance sheets as of January 25, 2019 and January 26, 2018, and the related consolidated statements of operations and comprehensive income, changes in members’ equity, and cash flows for each of the three years in the period ended January 25, 2019, and the related notes to the consolidated financial statements.

Management’s Responsibility for the Financial Statements

Management is responsible for the preparation and fair presentation of these financial statements in conformity with U.S. generally accepted accounting principles; this includes the design, implementation, and maintenance of internal control relevant to the preparation and fair presentation of financial statements that are free of material misstatement, whether due to fraud or error.

Auditor’s Responsibility

Our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits in accordance with auditing standards generally accepted in the United States. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor’s judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the entity’s preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity’s internal control. Accordingly, we express no such opinion. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of significant accounting estimates made by management, as well as evaluating the overall presentation of the financial statements.

 

1

A member firm of Ernst & Young Global Limited


 

Table of Contents

Picture 3

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.

Opinion

In our opinion, the financial statements referred to above present fairly, in all material respects, the consolidated financial position of SSA Terminals, LLC at January 25, 2019 and January 26, 2018, and the consolidated results of its operations and its cash flows for each of the three years in the period ended January 25, 2019, in conformity with U.S. generally accepted accounting principles.

Picture 5

April 5, 2019

 

 

 

2

A member firm of Ernst & Young Global Limited


 

Table of Contents

SSA Terminals, LLC

Consolidated Balance Sheets

(in thousands)

 

 

 

 

 

 

 

 

 

    

January 25,

    

January 26,

 

 

2019

 

2018

 

 

 

 

 

 

 

Assets

 

 

 

 

 

 

Current assets:

 

 

 

 

 

 

Cash, cash equivalents and restricted cash

 

$

78,699 

 

$

60,139 

Short-term investments

 

 

31,400 

 

 

— 

Receivables, net

 

 

178,466 

 

 

130,167 

Insurance recoveries receivable

 

 

500 

 

 

385 

Prepaid lease, net

 

 

18,941 

 

 

17,809 

Prepaid expenses and other assets

 

 

6,231 

 

 

7,801 

 

 

 

 

 

 

 

Total current assets

 

 

314,237 

 

 

216,301 

 

 

 

 

 

 

 

Property and equipment, net

 

 

138,923 

 

 

120,175 

Investment in joint venture

 

 

— 

 

 

2,500 

Other assets

 

 

14,617 

 

 

14,319 

 

 

 

 

 

 

 

Total assets

 

$

467,777 

 

$

353,295 

 

 

 

 

 

 

 

Liabilities and members’ equity

 

 

 

 

 

 

Current liabilities:

 

 

 

 

 

 

Accounts payable and accrued liabilities

 

$

60,036 

 

$

47,210 

Member loan

 

 

— 

 

 

4,380 

Due to SSA Marine, Inc.

 

 

3,365 

 

 

5,523 

Claims and other

 

 

2,080 

 

 

1,920 

Postretirement benefits

 

 

240 

 

 

230 

 

 

 

 

 

 

 

Total current liabilities

 

 

65,721 

 

 

59,263 

 

 

 

 

 

 

 

Claims and other

 

 

2,325 

 

 

955 

Postretirement benefits

 

 

10,719 

 

 

10,260 

Long-term debt

 

 

101,545 

 

 

— 

Other long-term liabilities

 

 

41,258 

 

 

18,787 

Derivative Instruments

 

 

1,157 

 

 

— 

Commitments and contingencies (Note 15)

 

 

 

 

 

 

Members’ equity:

 

 

 

 

 

 

Equity and retained earnings

 

 

251,152 

 

 

270,449 

Accumulated other comprehensive loss

 

 

(5,532)

 

 

(4,529)

Noncontrolling interests

 

 

(568)

 

 

(1,890)

 

 

 

 

 

 

 

Total members’ equity

 

 

245,052 

 

 

264,030 

 

 

 

 

 

 

 

Total liabilities and members’ equity

 

$

467,777 

 

$

353,295 

 

 

 

 

 

 

 

 

See accompanying notes.

3


 

Table of Contents

SSA Terminals, LLC

Consolidated Statements of Operations

(in thousands)

 

 

 

 

 

 

 

 

 

 

 

 

 

Years Ended

 

    

January 25,

    

January 26,

    

January 27,

 

 

2019

 

2018

 

2017

 

 

 

 

 

 

 

Revenues

 

$

1,084,901 

 

$

947,925 

 

$

755,593 

 

 

 

 

 

 

 

 

 

 

Cost of revenues

 

 

(738,946)

 

 

(644,768)

 

 

(543,039)

General and administrative expenses

 

 

(239,264)

 

 

(208,364)

 

 

(179,709)

 

 

 

 

 

 

 

 

 

 

Operating income

 

 

106,691 

 

 

94,793 

 

 

32,845 

 

 

 

 

 

 

 

 

 

 

Other income and expense:

 

 

 

 

 

 

 

 

 

Joint venture earnings (loss)

 

 

— 

 

 

2,099 

 

 

13,061 

Interest expense

 

 

(2,750)

 

 

(401)

 

 

(340)

Other income, net

 

 

1,390 

 

 

656 

 

 

108 

 

 

 

 

 

 

 

 

 

 

Net income

 

 

105,331 

 

 

97,147 

 

 

45,674 

 

 

 

 

 

 

 

 

 

 

Net income attributable to noncontrolling interests

 

 

(4,628)

 

 

(5,494)

 

 

(1,575)

 

 

 

 

 

 

 

 

 

 

Net income attributable to SSA Terminals, LLC

 

$

100,703 

 

$

91,653 

 

$

44,099 

 

 

 

 

 

 

 

 

 

 

 

See accompanying notes.

 

4


 

Table of Contents

SSA Terminals, LLC

Consolidated Statements of Comprehensive Income

(in thousands)

 

 

 

 

 

 

 

 

 

 

 

 

 

Years Ended

 

    

January 25,

    

January 26,

    

January 27,

 

 

2019

 

2018

 

2017

 

 

 

 

 

 

 

Net income attributable to SSA Terminals, LLC

 

$

100,703

 

$

91,653

 

$

44,099

Other comprehensive income (loss):

 

 

 

 

 

 

 

 

 

Change in unrecognized portion of postretirement obligations, net

 

 

220

 

 

(2,602)

 

 

254

Change in fair value of cash flow hedges, net

 

 

(1,223)

 

 

— 

 

 

— 

 

 

 

 

 

 

 

 

 

 

Total comprehensive income

 

$

99,700

 

$

89,051

 

$

44,353

 

 

 

 

 

 

 

 

 

 

 

See accompanying notes.

 

 

 

5


 

Table of Contents

SSA Terminals, LLC

Consolidated Statements of Changes in Members’ Equity

(in thousands)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Controlling Members’ Equity

 

 

 

 

 

 

 

 

 

 

Accumulated

 

 

 

 

 

 

 

 

 

 

 

 

Other

 

Equity and

 

Controlling

 

Equity by Member

 

 

 

 

 

 

Comprehensive

 

Retained

 

Members’

   

SSA

   

Matson 

   

Noncontrolling

   

Total

 

   

Loss

   

Earnings

   

Equity

 

Ventures, Inc.

 

Ventures, Inc.

 

Interests

 

Equity

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Members’ equity at January 29, 2016

 

$

(2,181)

 

$

184,697

 

$

182,516

 

$

114,165

 

$

68,351

 

$

(8,959)

 

$

173,557

Net income attributable to noncontrolling interests

 

 

— 

 

 

— 

 

 

— 

 

 

— 

 

 

— 

 

 

1,575

 

 

1,575

Comprehensive income:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net income attributable to SSA Terminals, LLC

 

 

— 

 

 

44,099

 

 

44,099

 

 

28,664

 

 

15,435

 

 

— 

 

 

44,099

Unrecognized portion of pension and other retirement obligations

 

 

254

 

 

— 

 

 

254

 

 

165

 

 

89

 

 

— 

 

 

254

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Members’ equity at January 27, 2017

 

 

(1,927)

 

 

228,796

 

 

226,869

 

 

142,994

 

 

83,875

 

 

(7,384)

 

 

219,485

Net income attributable to noncontrolling interests

 

 

— 

 

 

— 

 

 

— 

 

 

— 

 

 

— 

 

 

5,494

 

 

5,494

Comprehensive income:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net income attributable to SSA Terminals, LLC

 

 

— 

 

 

91,653

 

 

91,653

 

 

59,574

 

 

32,079

 

 

— 

 

 

91,653

Unrecognized portion of pension and other retirement obligations

 

 

(2,602)

 

 

— 

 

 

(2,602)

 

 

(1,691)

 

 

(911)

 

 

— 

 

 

(2,602)

Members’ distributions

 

 

— 

 

 

(50,000)

 

 

(50,000)

 

 

(32,500)

 

 

(17,500)

 

 

— 

 

 

(50,000)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Members’ equity at January 26, 2018

 

 

(4,529)

 

 

270,449

 

 

265,920

 

 

168,377

 

 

97,543

 

 

(1,890)

 

 

264,030

Net income attributable to noncontrolling interests

 

 

— 

 

 

— 

 

 

— 

 

 

— 

 

 

— 

 

 

4,628

 

 

4,628

Comprehensive income:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net income attributable to SSA Terminals, LLC

 

 

— 

 

 

100,703

 

 

100,703

 

 

65,457

 

 

35,246

 

 

— 

 

 

100,703

Unrecognized portion of pension and other retirement obligations

 

 

220

 

 

— 

 

 

220

 

 

143

 

 

77

 

 

— 

 

 

220

Fair value of cash flow hedges

 

 

(1,223)

 

 

— 

 

 

(1,223)

 

 

(795)

 

 

(428)

 

 

(306)

 

 

(1,529)

Members’ distributions

 

 

— 

 

 

(120,000)

 

 

(120,000)

 

 

(78,000)

 

 

(42,000)

 

 

(3,000)

 

 

(123,000)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Members’ equity at January 25, 2019

 

$

(5,532)

 

$

251,152

 

$

245,620

 

$

155,182

 

$

90,438

 

$

(568)

 

$

245,052

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

See accompanying notes.

 

 

6


 

Table of Contents

SSA Terminals, LLC

Consolidated Statements of Cash Flows

(in thousands)

 

 

 

 

 

 

 

 

 

 

 

 

 

Years Ended

 

    

January 25,

    

January 26,

    

January 27,

 

 

2019

 

2018

 

2017

 

 

 

 

 

 

 

Operating activities

 

 

 

 

 

 

Net income

 

$

105,331 

 

$

97,147 

 

$

45,674 

 

 

 

 

 

 

 

 

 

 

Reconciliation of net income to net cash provided by operating activities:

 

 

 

 

 

 

 

 

 

Depreciation and amortization

 

 

26,417 

 

 

22,196 

 

 

15,778 

Amortization of debt issuance fees

 

 

272 

 

 

— 

 

 

— 

Provision for doubtful accounts

 

 

— 

 

 

(1,501)

 

 

5,513 

Lease levelization, net

 

 

20,465 

 

 

423 

 

 

1,565 

Joint venture (earnings) loss

 

 

— 

 

 

(2,099)

 

 

(13,061)

Distributions from joint venture

 

 

— 

 

 

— 

 

 

7,500 

(Gain) loss on disposal of property and equipment

 

 

— 

 

 

(99)

 

 

(320)

Changes in operating assets and liabilities:

 

 

 

 

 

 

 

 

 

Receivables

 

 

(48,298)

 

 

(22,807)

 

 

(37,212)

Insurance recoveries receivable

 

 

(117)

 

 

2,365 

 

 

(15)

Prepaid expenses and other assets

 

 

1,570 

 

 

(2,244)

 

 

45 

Other assets

 

 

— 

 

 

(238)

 

 

(746)

Accounts payable and accrued liabilities

 

 

12,009 

 

 

747 

 

 

6,019 

Claims and other

 

 

1,530 

 

 

(1,539)

 

 

(485)

Postretirement benefits

 

 

689 

 

 

368 

 

 

(755)

Derivative instrument

 

 

1,157 

 

 

— 

 

 

— 

Other liabilities

 

 

(785)

 

 

89 

 

 

(391)

 

 

 

 

 

 

 

 

 

 

Net cash provided by operating activities

 

 

120,240 

 

 

92,808 

 

 

29,109 

 

 

 

 

 

 

 

 

 

 

Investing activities

 

 

 

 

 

 

 

 

 

Purchases of short-term investments

 

 

(31,400)

 

 

— 

 

 

— 

Purchases of property and equipment

 

 

(43,981)

 

 

(28,959)

 

 

(25,416)

Proceeds from disposal of property and equipment

 

 

— 

 

 

497 

 

 

344 

Proceeds from sale of investment in joint venture

 

 

2,500 

 

 

— 

 

 

— 

 

 

 

 

 

 

 

 

 

 

Net cash used in investing activities

 

 

(72,881)

 

 

(28,462)

 

 

(25,072)

 

 

 

 

 

 

 

 

 

 

 

 

7


 

Table of Contents

SSA Terminals, LLC

Consolidated Statements of Cash Flows (continued)

(in thousands)

 

 

 

 

 

 

 

 

 

 

 

 

 

Years Ended

 

    

January 25,
2019

    

January 26,
2018

    

January 27,
2017

 

 

 

 

 

 

 

Financing activities

 

 

 

 

 

 

 

 

 

Advance from (to) SSA Marine, Inc., net

 

 

(2,195)

 

 

5,546

 

 

(431)

Proceeds from long-term debt

 

 

100,000

 

 

— 

 

 

— 

Payments of debt issuance fees

 

 

(3,106)

 

 

— 

 

 

— 

Payments on other financing

 

 

(498)

 

 

(500)

 

 

(459)

Members’ distributions

 

 

(120,000)

 

 

(50,000)

 

 

— 

Distributions to noncontrolling interests

 

 

(3,000)

 

 

— 

 

 

— 

 

 

 

 

 

 

 

 

 

 

Net cash used in financing activities

 

 

(28,799)

 

 

(44,954)

 

 

(890)

 

 

 

 

 

 

 

 

 

 

Net increase in cash, cash equivalents and restricted cash

 

 

18,560

 

 

19,392

 

 

3,147

Cash, cash equivalents and restricted cash, beginning of year

 

 

60,139

 

 

40,747

 

 

37,600

 

 

 

 

 

 

 

 

 

 

Cash, cash equivalents and restricted cash, end of year

 

$

78,699

 

$

60,139

 

$

40,747

 

 

 

 

 

 

 

 

 

 

Supplemental disclosure of cash flow information

 

 

 

 

 

 

 

 

 

Interest paid

 

$

1,881

 

$

310

 

$

251

 

 

 

 

 

 

 

 

 

 

Noncash investing activities and operating activities

 

 

 

 

 

 

 

 

 

Net change in property and equipment purchases in accounts payable and accrued liabilities

 

$

(498)

 

$

1,454

 

$

1,188

Non-cash distributions from joint ventures

(Note 5)

 

$

— 

 

$

33,582

 

$

— 

 

 

 

 

 

 

 

 

 

 

 

See accompanying notes.

 

 

 

8


 

Table of Contents

SSA Terminals, LLC

Notes to Consolidated Financial Statements

Fiscal Years Ended January 25, 2019, January 26, 2018, and January 27, 2017

(in thousands)

 

1.      Operations

SSA Terminals, LLC and its subsidiaries (collectively, the Company) is a limited liability company owned by SSA Ventures, Inc. (SVI), a wholly owned subsidiary of SSA Marine, Inc. (SSA), and Matson Ventures, Inc. (MVI), a wholly owned subsidiary of Matson Navigation Company, Inc. (Matson).

The Company provides container stevedoring and terminal services in the states of California and Washington. Substantially all of the Company’s direct labor is subject to collective bargaining agreements.

The Company’s operations are governed by a limited liability company agreement (the Agreement), which provides for, among other matters, ownership percentages, and allocation of profits, losses, and distributions among the members. SVI’s and MVI’s ownership interests in the Company are 65% and 35%, respectively. Earnings and distributions are allocated between the members based on their respective ownership percentages. Under the terms of the Agreement, the members are not liable for obligations of the Company and have no obligation to make contributions to the Company in excess of their respective commitment.

The Company has an administrative service agreement and a vessel planning agreement (the Admin and Vessel Planning Agreements, respectively) with a wholly owned subsidiary of SSA for administrative, computer, and vessel planning services, which are charged to the Company based on the number of containers loaded and unloaded from vessels. Due to the significance of the agreements described above, the Company’s reported consolidated financial position, results of operations, and cash flows may be different than if it operated on a stand-alone basis.

Effective August 28, 2007, the Company signed a limited liability company agreement with COSCO Shipping Terminals (USA) LLC (CST) to create SSA Terminals (Seattle), LLC (SSATS) and operate a terminal in Seattle, Washington. The Company has a two-thirds ownership interest in SSATS with the remaining one-third owned by CST.

Effective January 30, 2009, the Company signed a limited liability company agreement with NYK Terminal (Oakland), Inc. (NYK) to create SSA Terminals (Oakland), LLC (SSATO) and operate a terminal in Oakland, California. The Company has an 80% ownership interest in SSATO with the remaining 20% owned by NYK.

9


 

Table of Contents

SSA Terminals, LLC

Notes to Consolidated Financial Statements (continued)

(in thousands)

 

2.      Summary of Significant Accounting Policies

Basis of Reporting and Use of Estimates

The consolidated financial statements include the accounts of the Company, and its majority-owned subsidiaries, SSATO and SSATS. All significant intercompany transactions and balances have been eliminated in consolidation.

The Company prepares its consolidated financial statements in conformity with accounting principles generally accepted in the United States (GAAP). The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.

Profits and losses of subsidiaries are allocated to the Company based on its ownership percentage in the underlying subsidiary. The Company records noncontrolling interests in its consolidated financial statements to recognize the earnings and losses of the consolidated subsidiaries allocated to minority members in the Company’s consolidated entities.

Financial Reporting Period

The Company’s fiscal year ends on the last Friday in January. Fiscal years 2019, 2018, and 2017 included 52 weeks.

Cash, Cash Equivalents and Restricted Cash

Cash and cash equivalents consist of demand deposit bank accounts and money market funds with original maturities of three months or less. Certain balances may exceed federally insured limits or may not be federally insured.

Restricted cash equivalents consist of debt service reserve account (DSRA) deposits of $2,614, which represent the next six months of payments as required by the SSATO Credit Agreement (Note 13).

The following table provides a reconciliation of cash, cash equivalents, and restricted cash equivalents that sums to the total of the same such amounts shown in the consolidated statements of cash flows.

 

 

 

 

 

 

 

 

    

January 25,
2019

    

January 26,
2018

 

 

 

 

 

Cash and cash equivalents

 

$

76,085

 

$

60,139

Restricted cash equivalents

 

 

2,614

 

 

— 

 

 

 

 

 

 

 

 

 

$

78,699

 

$

60,139

 

10


 

Table of Contents

SSA Terminals, LLC

Notes to Consolidated Financial Statements (continued)

(in thousands)

 

2.         Summary of Significant Accounting Policies (continued)

Short-term Investments

Short-term investments consist of time deposits with remaining maturities of less than one year.

Receivables and Allowance for Doubtful Accounts

Accounts receivable are recorded at invoiced amount. An allowance for doubtful accounts is estimated based on factors such as credit quality of customers, historical loss experience, and current economic conditions. Account balances are charged off against the allowance for doubtful accounts after all means of collection have been exhausted and the potential for recovery is considered remote.

Property and Equipment

Property and equipment are stated at cost. Depreciation is recognized using the straight-line method over the estimated useful lives of the assets. Estimated useful lives of property and equipment are as follows:

 

Classification

  

Range of Life

 

 

 

Cranes

 

lesser of 15 years or remaining life of the crane

Buildings and leasehold improvements

 

lesser of 30 years or remaining life of the lease

Top picks / side picks

 

5 to 7 years

Equipment and other

 

3 to 12 years

 

Investment in Joint Venture

The Company accounted for its 50% investment in SSA Terminals (Long Beach), LLC (SSATLB) under the equity method, as it had the ability to exercise significant influence. Under this method, the investment was initially recorded at cost and was adjusted to recognize the Company’s post-acquisition share of earnings or losses, less distributions.

During fiscal year 2018, the members of SSATLB approved the dissolution of the joint venture, as further described in Note 5.

Derivative Instruments

The Company uses interest rate swap agreements to manage the variability of cash flows of certain borrowing obligations due to exposure to fluctuations in interest rates. These derivative instruments have been designated as cash flow hedges to qualify for hedge accounting. The Company documents its risk management strategy and hedge effectiveness at the inception of, and during the term of, each hedge.  When it is determined that a derivative ceases to be highly effective, the Company discontinues hedge accounting.

11


 

Table of Contents

SSA Terminals, LLC

Notes to Consolidated Financial Statements (continued)

(in thousands)

 

2.         Summary of Significant Accounting Policies (continued)

In addition, the Company is exposed to credit loss in the event of nonperformance by the counterparty to the derivative financial instruments. The Company attempts to limit this exposure by entering into agreements directly with major financial institutions that meet the Company’s credit standards and that are expected to fully satisfy their obligations under the contracts, and by monitoring the Company’s credit exposure to each counterparty in light of its current credit quality.

Each of the agreements permits the net settlement of amounts owed in the event of default and certain termination events. The Company has elected to not offset derivative asset and liability positions in the balance sheet with the same counterparty under the same agreement.  Derivatives are recorded at fair value on the consolidated balance sheet. For cash flow hedges, the effective portion of the gain or loss on the derivative is reported as a component of other comprehensive income, and is subsequently reclassified into earnings in the period which the hedged transaction affects earnings. The earnings impact is reported in interest expense to match the underlying transaction.  To the extent the change in fair value of the hedge does not perfectly offset the change in fair value of the hedged item, the ineffective portion of the hedge is recognized in interest expense. There are no ineffective portions of these hedges recognized in current period earnings.

Other Assets

Other assets includes deferred charges, deposits, deferred rent relating to leases, and insurance receivables. The deferred charges consists of payments of $6,125 made to a customer during fiscal year 2014, which were recorded at cost and are amortized as a reduction to revenue on a straight-line basis over the life of the customer contract. During each of fiscal years 2019, 2018, and 2017, $687 was recognized as a reduction to revenue. As of January 25, 2019, and January 26, 2018, respectively, $2,347 and $3,034 remains unamortized, of which $687 is current in each year. Other assets also includes refundable security deposits, deferred rent, and other of $12,957 and $11,972 as of January 25, 2019, and January 26, 2018, respectively.

Impairment of Long-Lived Assets

The Company evaluates its long-lived assets, such as property and equipment and finite-lived intangible assets, for impairment if events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable when compared to the estimated undiscounted future cash flows associated with the asset. An impairment loss is recognized for the amount by which the carrying amount of an asset exceeds its fair value. No impairment has been recognized during fiscal years 2019, 2018, or 2017.

12


 

Table of Contents

SSA Terminals, LLC

Notes to Consolidated Financial Statements (continued)

(in thousands)

 

2.         Summary of Significant Accounting Policies (continued)

Property Damage and General Liability

Claim reserves for property damage and general liability represent management’s best estimate of the ultimate liability, including estimable legal fees that have not been incurred, for all asserted and unasserted losses incurred through year end. The property damage and general liability reserves are estimated using individual case-basis valuations. Although variability is inherent in such estimates, management believes that the reserves for property damage and general liability are adequate. The estimates are continually reviewed and adjusted as claims develop or new information becomes known; such adjustments are included in current operations. Anticipated recoveries from insurance coverage are classified in the accompanying consolidated balance sheets as insurance recoveries receivable.

Debt Issuance Fees

Certain debt issuance fees are capitalized in connection with the issuance of new debt instruments or the amendment of existing debt instruments. Capitalized debt issuance fees are recorded as a reduction to the carrying value of the debt and are recognized over the life of the related debt instrument using the effective interest method of amortization.

Fair Value of Financial Instruments

Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The following hierarchy prioritizes the inputs to valuation methodologies used to measure fair value:

Level 1 inputs are quoted prices (unadjusted) in active markets for identical assets or liabilities.

Level 2 inputs are quoted prices for similar assets and liabilities in active markets or inputs that are observable for the asset or liability, either directly or indirectly through market corroboration, for substantially the full term of the financial instrument.

Level 3 inputs are unobservable inputs based on the Company’s own assumptions used to measure assets and liabilities at fair value.

A financial asset or liability’s classification within the hierarchy is determined based on the lowest level input that is significant to the fair value measurement.

The Company has money market funds that are included in cash equivalents and are classified within Level 1 of the fair value hierarchy.

The carrying amounts reported in the consolidated balance sheets for cash and cash equivalents, restricted cash equivalents, short-term investments, receivables, accounts payable and accrued liabilities, and related-party receivables and payables approximate their fair values due to the short-term nature of those amounts.

13


 

Table of Contents

SSA Terminals, LLC

Notes to Consolidated Financial Statements (continued)

(in thousands)

 

2.         Summary of Significant Accounting Policies (continued)

Derivative instruments are classified within Level 2 or Level 3 of the fair value hierarchy. The Company determines the fair value of its derivative contracts using quoted market prices to calculate the forward values and discounts such forward values to the present value. The discount rates used are based on quoted bank deposit or swap interest rates, resulting in classification within Level 2 of the fair value hierarchy. If a derivative contract is in a net liability position, the Company adjusts these discount rates, if required, by an estimate of the credit spread that would be applied by market participants purchasing these contracts from the Company’s counterparties. To estimate this credit spread, the Company uses significant assumptions and factors other than quoted market rates, which would result in the classification of its derivative liabilities within Level 3 of the fair value hierarchy. At year end, there were no derivative contracts that were classified within Level 3 of the fair value hierarchy. In addition, there were no transfers in or out of Level 3 of the fair value hierarchy during the current year.

Revenue Recognition

The Company earns revenue from services provided to shipping lines and beneficial cargo owners. Services include loading and unloading containers from ocean-going vessels and movement and storage of containers. Customers are granted credit and payment is required in U.S. dollars.

Revenue is recognized and earned upon job completion when all of the following criteria are satisfied with regard to a specific transaction: persuasive evidence of a sales arrangement exists, the price is fixed or determinable, cash collection is reasonably assured, and delivery has occurred or services have been rendered. The Company also earned revenue from providing labor and services to SSATLB through the effective date of the dissolution, as more fully described in Notes 5 and 8. The Company presents revenue earned from the sale of goods or services to SSATLB on a gross basis. 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.

Taxes

The Company is not a tax-paying entity for federal income tax purposes. Therefore, no federal income tax expense has been recorded in the consolidated financial statements. The Company’s results of operations are reportable by the members in their respective federal income tax returns.

Income and losses for income tax purposes may differ from the financial statement amounts and may be allocated to the members on a different basis for tax purposes than for financial reporting. Members’ equity in the financial statements does not necessarily represent the tax basis of the members’ interest.

14


 

Table of Contents

SSA Terminals, LLC

Notes to Consolidated Financial Statements (continued)

(in thousands)

 

2.         Summary of Significant Accounting Policies (continued)

Comprehensive Income and Accumulated Other Comprehensive Loss

Comprehensive income consists of net income and other gains and losses affecting members’ equity that, under GAAP, are excluded from net income. Accumulated other comprehensive loss consists of  the changes in the unrecognized portion of pensions and other postretirement obligations and fluctuation in the fair value of cash flow hedges held by the Company that hedge interest rate risk, net of related tax effects. The components of accumulated other comprehensive loss at January 25, 2019, and January 26, 2018, net of noncontrolling interests, are as follows:

 

 

 

 

 

 

 

 

 

 

 

 

    

Balance at
January 25,
2019

    

Net Activity

    

Balance at
January 26,
2018

 

 

 

 

 

 

 

Unrecognized portion of pensions and other postretirement obligations

 

$

(4,309)

 

 

220

 

$

(4,529)

Fair value of cash flow hedges

 

 

(1,223)

 

 

(1,223)

 

 

— 

 

 

 

 

 

 

 

 

 

 

 

 

$

(5,532)

 

$

(1,003)

 

$

(4,529)

 

Accumulated other comprehensive loss includes $306 of amounts attributable to noncontrolling interests. The unrecognized portion of pensions and other postretirement obligations includes prior service costs and net losses of $162 and $4,147, respectively. The estimated prior service cost and net loss that will be amortized from the unrecognized portion of pensions and other postretirement obligations into net periodic benefit cost over the next fiscal year are and $27 and $198, respectively.

Subsequent Events

The Company has evaluated subsequent event transactions for potential recognition or disclosure in the consolidated financial statements through April 5, 2019, the day the consolidated financial statements were available to be issued.

15


 

Table of Contents

SSA Terminals, LLC

Notes to Consolidated Financial Statements (continued)

(in thousands)

 

2.         Summary of Significant Accounting Policies (continued)

New Accounting Pronouncements

In December 2016, the Financial Accounting Standards Board (FASB) issued ASU No. 2016-18, Statement of Cash Flows (Topic 230): Restricted Cash (ASU 2016-18). ASU 2016-18 requires that a statement of cash flows explain the change during the period in the total cash, cash equivalents, and amounts generally described as restricted cash or restricted cash equivalents. The Company early adopted ASU 2016-18 during the current year using the retrospective transition method. The Company included restricted cash equivalents in the ending balance reflected in the consolidated statement of cash flows. A reconciliation of cash, cash equivalents, and restricted cash equivalents is included within Note 2.

In February 2016, the FASB issued ASU No. 2016-02, Leases (Topic 842) (ASU 2016-02). ASU 2016-02 affects any lessee (for capital and operating leases) and lessor (for sales-type, direct financing, and operating leases). Under ASU 2016-02, lessees will be required to recognize a lease liability and a right of use asset for leases at the commencement date. ASU 2016-02 will be effective for fiscal year 2021, with early adoption permitted. The FASB also issued several additional ASUs which provide further clarification of ASU 2016-02. The Company evaluated the impact of adoption of ASU 2016-02 and other related ASUs and determined that recognition of the lease liability and right of use asset for terminal facility leases will have a significant impact to the consolidated balance sheets. Adoption is not expected to have a significant impact to the consolidated statements of operations. The Company plans to adopt the standard effective January 26, 2019, using the modified retrospective transition method.

In January 2016, the FASB issued ASU No. 2016-01, Financial Instruments-Overall (Subtopic 825-10): Recognition and Measurement of Financial Assets and Financial Liabilities (ASU 2016-01). ASU 2016-01 requires equity investments (except those accounted for under the equity method of accounting, or those that result in consolidation of the investee) to be measured at fair value, and separate presentation of financial assets and financial liabilities by measurement category and form of financial asset. ASU 2016-01 will be effective for fiscal year 2020, with early adoption permitted. The Company is currently evaluating the impact adoption of ASU 2016-01 will have on its consolidated financial statements and disclosures.

16


 

Table of Contents

SSA Terminals, LLC

Notes to Consolidated Financial Statements (continued)

(in thousands)

 

2.         Summary of Significant Accounting Policies (continued)

In May 2014, the FASB issued ASU No. 2014-09, Revenue from Contracts with Customers (ASU 2014-09). ASU 2014-09 affects any entity that either enters into contracts with customers to transfer goods or services or enters into contracts for the transfer of nonfinancial assets. Under ASU 2014-09, an entity will recognize revenue when it transfers promised goods or services to customers in an amount that reflects what it expects in exchange for the goods or services. ASU No. 2015-14, Revenue from Contracts with Customers (Topic 606): Deferral of the Effective Date issued in August 2015 deferred the effective date to fiscal year 2020, with early adoption permitted beginning fiscal year 2018. The FASB also issued several additional ASUs during subsequent years which provide further clarification of ASU 2014-09. The Company evaluated the impact the adoption of ASU 2014-09 and other related ASUs will have on its consolidated financial statements and disclosures by analyzing its contracts and revenue streams. This process included identification of the nature and timing of transfer of control of goods and services and its relation to the timing of invoicing. Because of the analysis, the Company determined that the standard will not have a material effect on operations or the Company’s consolidated balance sheet. The Company will adopt the new standard effective January 26, 2019, using the modified retrospective transition method.

There were no new accounting standards adopted by the Company during the current year that had a material impact on the Company’s financial condition, results of operations, or cash flows.

3.      Receivables, Net

Receivables, net, includes:

 

 

 

 

 

 

 

 

 

    

January 25,
2019

    

January 26,
2018

 

 

 

 

 

Trade receivables – billed

 

$

105,670 

 

$

95,619 

Trade receivables – unbilled

 

 

9,060 

 

 

9,259 

Receivables from related parties (Note 8)

 

 

61,667 

 

 

29,074 

Other

 

 

2,723 

 

 

332 

 

 

 

 

 

 

 

 

 

 

179,120 

 

 

134,284 

Allowance for doubtful accounts

 

 

(654)

 

 

(4,117)

 

 

 

 

 

 

 

 

 

$

178,466 

 

$

130,167 

 

The Company’s revenue from the three largest customers for fiscal years 2019 and 2018 and three largest customers for fiscal year 2017 accounted for 45%, 35%, and 62% of total revenues, respectively. The Company’s receivables from the three largest customers accounted for 54% and 48% of total receivables at January 25, 2019, and January 26, 2018, respectively.

17


 

Table of Contents

SSA Terminals, LLC

Notes to Consolidated Financial Statements (continued)

(in thousands)

 

4.      Property and equipment, net

Property and equipment, net, includes:

 

 

 

 

 

 

 

 

 

    

January 25,
2019

    

January 26,
2018

 

 

 

 

 

Cranes

 

$

119,221 

 

$

108,105 

Buildings and leasehold improvements

 

 

45,710 

 

 

33,852 

Top picks / side picks

 

 

64,376 

 

 

52,701 

Equipment and other

 

 

93,705 

 

 

87,172 

Construction-in-progress

 

 

11,882 

 

 

10,257 

 

 

 

 

 

 

 

 

 

 

334,894 

 

 

292,087 

Less: accumulated depreciation

 

 

(195,971)

 

 

(171,912)

 

 

 

 

 

 

 

 

 

$

138,923 

 

$

120,175 

 

Depreciation and amortization expense recognized on property and equipment amounted to $25,730, $21,509, and $14,949 for fiscal years 2019, 2018, and 2017, respectively.

5.      Investment in Joint Venture

During fiscal year 2018, the members of SSATLB unanimously approved a plan of dissolution for SSATLB with an effective date of April 28, 2017.  Under the plan of dissolution, the members of SSATLB delegated authority to the Company to satisfy the liabilities of SSATLB, distribute its remaining assets, and dissolve the corporate entity. The final distributions occurred during fiscal year 2019. Net amounts related to the distributions received are as follows:

 

 

 

 

 

 

 

 

 

 

Years ended

 

    

January 25,
2019

    

January 26,
2018

 

 

 

 

 

Cash

 

$

2,500 

 

$

— 

Prepaid expenses and other assets

 

 

— 

 

 

5,641 

Property and equipment

 

 

— 

 

 

19,228 

Accounts receivable, net

 

 

— 

 

 

19,230 

Accounts payable and accrued liabilities

 

 

— 

 

 

(4,418)

Due to affiliates and other related parties

 

 

— 

 

 

(6,099)

 

 

 

 

 

 

 

Net distributions

 

$

2,500 

 

$

33,582 

 

18


 

Table of Contents

SSA Terminals, LLC

Notes to Consolidated Financial Statements (continued)

(in thousands)

 

5.      Investment in Joint Venture (continued)

Summarized financial information from the financial statements of SSATLB through April 28, 2017, is as follows:

 

 

 

 

 

 

    

April 28,
2017

 

 

 

Current assets

 

$

57,354 

Current liabilities

 

 

(4,418)

 

 

 

 

Working capital

 

 

52,936 

Noncurrent assets

 

 

19,228 

 

 

 

 

Members’ equity

 

$

72,164 

 

 

 

 

 

 

    

Years ended

 

 

April 28,
2017

 

 

 

Revenue

 

$

60,753 

Operating income

 

 

6,715 

Net income

 

 

6,729 

 

 

6.      Accounts Payable and Accrued Liabilities

Accounts payable and accrued liabilities includes:

 

 

 

 

 

 

 

 

 

    

January 25,
2019

    

January 26,
2018

 

 

 

 

 

Accounts payable

 

$

26,460 

 

$

19,621 

Accrued compensation and benefits

 

 

25,029 

 

 

21,313 

Accounts payable to related parties

 

 

7,095 

 

 

4,670 

Other accrued liabilities

 

 

1,452 

 

 

1,606 

 

 

 

 

 

 

 

 

 

$

60,036 

 

$

47,210 

 

 

7.      Due To/From SSA

The Company has a noninterest-bearing balance with SSA for services rendered under the Admin and Vessel Planning Agreements and other reimbursable costs paid by each entity on the other’s behalf.

Fees from services rendered by SSA under the Admin and Vessel Planning agreements and included in general and administrative expenses were $28,182, $23,704, and $16,494 for fiscal years 2019, 2018, and 2017, respectively.

19


 

Table of Contents

SSA Terminals, LLC

Notes to Consolidated Financial Statements (continued)

(in thousands)

 

8.      Related-Party Transactions

The Company provides labor and services, as well as equipment, parts, and other reimbursable costs to related parties. Additionally, the Company is a member of PierPass LLC, a company that collects a traffic mitigation fee at the Los Angeles County terminals. The fee is earned based on revenue units moved by members, and the Company recognizes amounts collected as revenue when earned.

The Company’s revenue earned from the following related parties is as follows:

 

 

 

 

 

 

 

 

 

 

 

 

 

Years Ended

 

    

January 25,
2019

    

January 26,
2018

    

January 27,
2017

 

 

 

 

 

 

 

Member affiliates

 

$

218,990 

 

$

185,470 

 

$

166,961 

Affiliates of joint venture partners

 

 

160,982 

 

 

86,158 

 

 

58,920 

Related joint ventures

 

 

13,661 

 

 

36,024 

 

 

113,338 

 

The Company’s receivables from the following related parties are:

 

 

 

 

 

 

 

 

 

    

January 25,
2019

    

January 26,
2018

 

 

 

 

 

Member affiliates

 

$

45,008 

 

$

20,316 

Affiliates of joint venture partners

 

 

15,383 

 

 

7,660 

Related joint ventures

 

 

1,276 

 

 

1,098 

 

The Company purchased equipment from and sold equipment to related parties as follows:

 

 

 

 

 

 

 

 

 

 

 

 

 

Years Ended

 

    

January 25,
2019

    

January 26,
2018

    

January 27,
2017

 

 

 

 

 

 

 

Sales to member affiliates

 

$

— 

 

$

139

 

$

327

Purchases from member affiliates

 

 

14,236

 

 

11,326

 

 

5,081

Gains (losses) from asset sales to member affiliates

 

 

— 

 

 

76

 

 

321

 

20


 

Table of Contents

SSA Terminals, LLC

Notes to Consolidated Financial Statements (continued)

(in thousands)

 

8.         Related-Party Transactions (continued)

Related parties provided other services that are included in general and administrative expenses as follows:

 

 

 

 

 

 

 

 

 

 

 

 

 

Years Ended

 

    

January 25,
2019

    

January 26,
2018

    

January 27,
2017

 

 

 

 

 

 

 

Member affiliates

 

$

42,364 

 

$

32,550 

 

$

20,372 

Affiliates of joint venture partners

 

 

2,645 

 

 

2,718 

 

 

2,607 

Related joint ventures

 

 

283 

 

 

455 

 

 

732 

 

 

9.      Workers' Compensation Insurance

The Company’s United States Longshore and Harbor Workers’ Compensation Act insurance has been provided by a licensed and authorized insurance company, which is majority owned by two trusts and minority owned by a limited partnership. The two trusts have common beneficiaries as the ultimate parent of SVI. The minority ownership in the insurance company also owns a minority interest in the ultimate parent of SVI. Included in the cost of revenues are premium expenses of $27,180, $24,168, and $21,750 for fiscal years 2019, 2018, and 2017, respectively. Premiums payable included in accounts payable and accrued liabilities were $2,102 and $1,909 at January 25, 2019, and January 26, 2018, respectively.

10.    Claims and Other

Claims and other includes the following:

 

 

 

 

 

 

 

 

 

    

January 25,
2019

    

January 26,
2018

 

 

 

 

 

Personal property, property damage, and bodily injury

 

$

3,705 

 

$

2,355 

Legal and other reserves

 

 

700 

 

 

520 

 

 

 

4,405 

 

 

2,875 

Less: current portion

 

 

(2,080)

 

 

(1,920)

 

 

 

 

 

 

 

 

 

$

2,325 

 

$

955 

 

The Company maintains insurance coverage for all third-party bodily injury claims, third-party property damage, and personal property claims. For each claim recorded in excess of the respective deductible, a corresponding receivable is recorded for the portion that will be reimbursed through insurance coverage.

21


 

Table of Contents

SSA Terminals, LLC

Notes to Consolidated Financial Statements (continued)

(in thousands)

 

11.       Postretirement Benefits

 

Postretirement benefits include pension and other postretirement benefits as follows:

 

 

 

 

 

 

 

 

 

    

January 25,
2019

    

January 26,
2018

 

 

 

 

 

Oakland defined benefit plan

 

$

1,525 

 

$

1,450 

The Program

 

 

5,847 

 

 

5,926 

Medigap

 

 

3,140 

 

 

2,810 

Other

 

 

447 

 

 

304 

 

 

 

 

 

 

 

 

 

 

10,959 

 

 

10,490 

Current portion

 

 

(240)

 

 

(230)

 

 

 

 

 

 

 

 

 

$

10,719 

 

$

10,260 

 

Pension Plans

Pension expense for all plans the Company contributes to is as follows: