0000003453--12-312019FYfalse00000034532019-06-3000000034532020-02-2400000034532019-01-012019-12-31xbrli:sharesiso4217:USD

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, 2019

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

Trading Symbol(s)

Name of each exchange on which registered

Common Stock, without par value

MATX

New York Stock Exchange

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

None

Number of shares of Common Stock outstanding at February 24, 2020:

43,040,657

Aggregate market value of Common Stock held by non-affiliates at June 30, 2019:

$1,642,293,968

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

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

Large accelerated filer

Accelerated filer

Non-accelerated filer

Smaller reporting company

Emerging growth company

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

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

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 23, 2020.

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, 2019 (the “Original 10-K”) filed with the Securities and Exchange Commission (the “SEC”) on February 28, 2020 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 years ended December 31, 2018 and 2017. 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 31, 2020, January 25, 2019 and January 26, 2018. 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 February 28, 2020.

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 13, 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 19, 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).

4**

Description of Registered Securities.

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 30, 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 30, 2017).

3

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 30, 2017).

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 30, 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 30, 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 22, 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 among 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 Stock Option Grant (incorporated by reference to Exhibit 99.2 to Matson’s Form S-8 dated October 26, 2012).

4

10.18*

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).

10.19*

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).

10.20*

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).

10.21*

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).

10.22*

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).

10.23*

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).

10.24*

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).

10.25*

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).

10.26*

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).

10.27*

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).

10.28*

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).

10.29*

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).

10.30*,**

Letter Agreement Counter Party.

10.31*

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).

10.32*

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).

10.33

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).

10.34

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).

5

10.35

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).

10.36

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).

10.37

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).

10.38

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).

10.39

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).

10.40

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).

10.41*

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).

10.42*

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).

10.43*

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).

10.44*

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).

10.45*

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).

10.46*

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).

10.47*

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).

10.48*

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).

10.49*

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).

6

10.50*

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).

10.51*

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).

10.52*

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).

10.53*

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 19, 2020.

23.1**

Consent of Deloitte & Touche LLP dated February 28, 2020.

23.2

Consent of Ernst & Young LLP dated April 9, 2020.

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.

32.1**

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 31, 2020, January 25, 2019 and January 26, 2018.

101.INS**

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

101.SCH**

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

104**

Cover Page Interactive Data File – the cover page interactive data file does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document

*      Indicates management contract or compensatory plan or arrangement.

**    Previously filed or furnished, as applicable, with the Original 10-K on February 28, 2020.

       Filed herewith.

††      Furnished herewith.

7

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 9, 2020

/s/ Joel M. Wine

Joel M. Wine

Senior Vice President and Chief Financial Officer

8

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 6,  2020, with respect to the consolidated financial statements of SSA Terminals, LLC included in the Annual Report (Form 10-K/A) of Matson, Inc. for the year ended December 31, 2019.

 

/s/ Ernst & Young LLP

Seattle, Washington

April 9, 2020

 

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  9, 2020

 

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 9, 2020

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, 2019 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 9, 2020

 

 

 

 

/s/ Joel M. Wine

 

Name:

Joel M. Wine

 

Title:

Senior Vice President and Chief Financial Officer

 

Date:

April 9, 2020

 

 

 

matx_Ex99_1

Table of Contents

Exhibit 99.1

 

CONSOLIDATED FINANCIAL STATEMENTS

SSA Terminals, LLC 
Fiscal Years Ended January 31, 2020, January 25, 2019, and

January 26, 2018

With Report of Independent Auditors

 

 

 

 

Table of Contents

SSA Terminals, LLC

Consolidated Financial Statements

Fiscal Years Ended January 31, 2020, January 25, 2019, and January 26, 2018

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

 

 

 

 

 

 

 

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 31, 2020 and January 25, 2019, and the related consolidated statements of operations, comprehensive income, changes in members’ equity, and cash flows for each of the three years in the period ended January 31, 2020, 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.

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

 

 

1

 

Table of Contents

 

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 31, 2020 and January 25, 2019, and the consolidated results of its operations and its cash flows for each of the three years in the period ended January 31, 2020, in conformity with U.S. generally accepted accounting principles.

Adoption of ASU No. 2016-02, Leases

As discussed in Note 2 to the consolidated financial statements, the Company changed its method of accounting for leases as a result of the adoption of the amendments to the FASB Accounting Standards Codification resulting from Accounting Standards Update No. 2016-02, Leases, effective January 26, 2019. Our opinion is not modified with respect to this matter.

 

/s/ Ernst & Young LLP

 

Seattle, Washington

April 6, 2020

 

 

 

2

 

Table of Contents

SSA Terminals, LLC

Consolidated Balance Sheets

(in thousands)

 

 

    

January 31,

    

January 25,

 

 

2020

 

2019

 

 

 

 

 

 

 

Assets

 

 

 

 

 

 

Current assets:

 

 

 

 

 

 

Cash, cash equivalents and restricted cash

 

$

85,662 

 

$

78,699 

Short-term investments

 

 

 

 

31,400 

Receivables, net

 

 

198,121 

 

 

178,466 

Insurance recoveries receivable

 

 

650 

 

 

500 

Prepaid lease, net

 

 

 

 

18,941 

Prepaid expenses and other assets

 

 

7,515 

 

 

6,231 

 

 

 

 

 

 

 

Total current assets

 

 

291,948 

 

 

314,237 

 

 

 

 

 

 

 

Property and equipment, net

 

 

160,563 

 

 

138,923 

Lease right-of-use assets

 

 

1,111,755 

 

 

Other assets

 

 

1,139 

 

 

14,617 

 

 

 

 

 

 

 

Total assets

 

$

1,565,405 

 

$

467,777 

 

 

 

 

 

 

 

Liabilities and members’ equity

 

 

 

 

 

 

Current liabilities:

 

 

 

 

 

 

Accounts payable and accrued liabilities

 

$

54,930 

 

$

60,036 

Current portion of lease obligations

 

 

134,446 

 

 

Current portion of long-term debt

 

 

4,380 

 

 

Due to SSA Marine, Inc.

 

 

2,871 

 

 

3,365 

Claims and other

 

 

1,680 

 

 

2,080 

Postretirement benefits

 

 

220 

 

 

240 

 

 

 

 

 

 

 

Total current liabilities

 

 

198,527 

 

 

65,721 

 

 

 

 

 

 

 

Claims and other

 

 

3,614 

 

 

2,325 

Postretirement benefits

 

 

11,910 

 

 

10,719 

Long-term debt

 

 

109,065 

 

 

101,545 

Lease obligations

 

 

1,031,656 

 

 

Other long-term liabilities

 

 

616 

 

 

41,258 

Derivative instruments

 

 

2,559 

 

 

1,157 

Commitments and contingencies (Note 13)

 

 

 

 

 

 

Members’ equity:

 

 

 

 

 

 

Equity and retained earnings

 

 

204,218 

 

 

251,152 

Accumulated other comprehensive loss

 

 

(8,013)

 

 

(5,532)

Noncontrolling interests

 

 

11,253 

 

 

(568)

 

 

 

 

 

 

 

Total members’ equity

 

 

207,458 

 

 

245,052 

 

 

 

 

 

 

 

Total liabilities and members’ equity

 

$

1,565,405 

 

$

467,777 

 

 

 

 

 

 

 

 

See accompanying notes.

3

Table of Contents

SSA Terminals, LLC

Consolidated Statements of Operations

(in thousands)

 

 

 

 

 

 

 

 

 

 

 

 

 

Years Ended

 

    

January 31,

    

January 25,

    

January 26,

 

 

2020

 

2019

 

2018

 

 

 

 

 

 

 

Stevedoring revenues

 

$

1,117,687 

 

$

1,084,901 

 

$

947,925 

 

 

 

 

 

 

 

 

 

 

Cost of revenues

 

 

(1,033,970)

 

 

(959,706)

 

 

(840,431)

General and administrative expenses

 

 

(20,801)

 

 

(18,504)

 

 

(12,701)

 

 

 

 

 

 

 

 

 

 

Operating income

 

 

62,916 

 

 

106,691 

 

 

94,793 

 

 

 

 

 

 

 

 

 

 

Other income and expense:

 

 

 

 

 

 

 

 

 

Joint venture earnings

 

 

— 

 

 

 

 

 

2,099 

Interest expense

 

 

(7,758)

 

 

(2,750)

 

 

(401)

Other income, net

 

 

3,634 

 

 

1,390 

 

 

656 

 

 

 

 

 

 

 

 

 

 

Net income

 

 

58,792 

 

 

105,331 

 

 

97,147 

 

 

 

 

 

 

 

 

 

 

Net income attributable to noncontrolling interests

 

 

(1,808)

 

 

(4,628)

 

 

(5,494)

 

 

 

 

 

 

 

 

 

 

Net income attributable to SSA Terminals, LLC

 

$

56,984 

 

$

100,703 

 

$

91,653 

 

 

 

 

 

 

 

 

 

 

 

See accompanying notes.

 

4

Table of Contents

SSA Terminals, LLC

Consolidated Statements of Comprehensive Income

(in thousands)

 

 

 

 

 

 

 

 

 

 

 

 

 

Years Ended

 

    

January 31,

    

January 25,

    

January 26,

 

 

2020

 

2019

 

2018

 

 

 

 

 

 

 

Net income attributable to SSA Terminals, LLC

 

$

56,984 

 

$

100,703 

 

$

91,653 

Other comprehensive income (loss):

 

 

 

 

 

 

 

 

 

Change in unrecognized portion of postretirement obligations, net

 

 

(632)

 

 

220 

 

 

(2,602)

Change in fair value of cash flow hedges, net

 

 

(1,849)

 

 

(1,223)

 

 

— 

 

 

 

 

 

 

 

 

 

 

Total comprehensive income attributable to SSA Terminals, LLC

 

$

54,503 

 

$

99,700 

 

$

89,051 

 

 

 

 

 

 

 

 

 

 

 

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 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 

Change in other comprehensive income

 

 

(1,003)

 

 

— 

 

 

(1,003)

 

 

(652)

 

 

(351)

 

 

(306)

 

 

(1,309)

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 

Net income attributable to noncontrolling interests

 

 

— 

 

 

— 

 

 

— 

 

 

— 

 

 

— 

 

 

1,808 

 

 

1,808 

Comprehensive income:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net income attributable to SSA Terminals, LLC

 

 

— 

 

 

56,984 

 

 

56,984 

 

 

37,040 

 

 

19,944 

 

 

— 

 

 

56,984 

Change in other comprehensive income

 

 

(2,481)

 

 

— 

 

 

(2,481)

 

 

(1,613)

 

 

(868)

 

 

(462)

 

 

(2,943)

Adoption effect of Accounting Standards Update No. 2016-02 (Note 2)

 

 

— 

 

 

(15,798)

 

 

(15,798)

 

 

(10,268)

 

 

(5,530)

 

 

(2,065)

 

 

(17,863)

Members’ contributions

 

 

— 

 

 

— 

 

 

— 

 

 

— 

 

 

— 

 

 

25,000 

 

 

25,000 

Retained interest in subsidiary formation

 

 

— 

 

 

6,300 

 

 

6,300 

 

 

4,095 

 

 

2,205 

 

 

(6,300)

 

 

— 

Members’ distributions

 

 

— 

 

 

(94,420)

 

 

(94,420)

 

 

(61,373)

 

 

(33,047)

 

 

(6,160)

 

 

(100,580)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Members’ equity at January 31, 2020

 

$

(8,013)

 

$

204,218 

 

$

196,205 

 

$

123,063 

 

$

73,142 

 

$

11,253 

 

$

207,458 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

See accompanying notes.

 

 

6

Table of Contents

SSA Terminals, LLC

Consolidated Statements of Cash Flows

(in thousands)

 

 

 

 

 

 

 

 

 

 

 

 

 

Years Ended

 

    

January 31,

    

January 25,

    

January 26,

 

 

2020

 

2019

 

2018

 

 

 

 

 

 

 

Operating activities

 

 

 

 

 

 

Net income

 

$

58,792 

 

$

105,331 

 

$

97,147 

 

 

 

 

 

 

 

 

 

 

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

 

 

 

 

 

 

 

 

 

Depreciation and amortization

 

 

27,734 

 

 

26,417 

 

 

22,196 

Amortization of debt issuance fees

 

 

666 

 

 

272 

 

 

— 

Provision for doubtful accounts

 

 

194 

 

 

— 

 

 

(1,501)

Noncash lease expense

 

 

13,072 

 

 

2,611 

 

 

423 

Amortization of construction obligations

 

 

(1,535)

 

 

— 

 

 

— 

Joint venture earnings

 

 

— 

 

 

— 

 

 

(2,099)

Gain on disposal of property and equipment

 

 

(290)

 

 

— 

 

 

(99)

Changes in operating assets and liabilities:

 

 

 

 

 

 

 

 

 

Receivables

 

 

(19,849)

 

 

(48,298)

 

 

(22,807)

Insurance recoveries receivable

 

 

(313)

 

 

(117)

 

 

2,365 

Prepaid expenses and other assets

 

 

(1,399)

 

 

1,570 

 

 

(2,244)

Other assets

 

 

11,974 

 

 

— 

 

 

(238)

Accounts payable and accrued liabilities

 

 

(5,292)

 

 

12,009 

 

 

747 

Claims and other

 

 

889 

 

 

1,530 

 

 

(1,539)

Postretirement benefits

 

 

539 

 

 

689 

 

 

368 

Derivative instrument

 

 

1,401 

 

 

1,157 

 

 

— 

Other liabilities

 

 

(1,317)

 

 

(785)

 

 

89 

 

 

 

 

 

 

 

 

 

 

Net cash provided by operating activities

 

 

85,266 

 

 

102,386 

 

 

92,808 

 

 

 

 

 

 

 

 

 

 

Investing activities

 

 

 

 

 

 

 

 

 

Sales (purchases) of short-term investments

 

 

31,400 

 

 

(31,400)

 

 

— 

Purchases of property and equipment

 

 

(50,055)

 

 

(43,981)

 

 

(28,959)

Proceeds from disposal of property and equipment

 

 

582 

 

 

— 

 

 

497 

Proceeds from sale of investment in joint venture

 

 

 

 

2,500 

 

 

— 

 

 

 

 

 

 

 

 

 

 

Net cash used in investing activities

 

 

(18,073)

 

 

(72,881)

 

 

(28,462)

 

 

 

 

 

 

 

 

 

 

 

 

7

Table of Contents

SSA Terminals, LLC

Consolidated Statements of Cash Flows (continued)

(in thousands)

 

 

 

 

 

 

 

 

 

 

 

 

 

Years Ended

 

    

January 31,
2020

    

January 25,
2019

    

January 26,
2018

 

 

 

 

 

 

 

Financing activities

 

 

 

 

 

 

 

 

 

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

 

 

(494)

 

 

(2,195)

 

 

5,546 

Proceeds from long-term debt

 

 

— 

 

 

100,000 

 

 

— 

Payments of debt issuance fees

 

 

(1,266)

 

 

(3,106)

 

 

— 

Construction obligation receipts

 

 

4,610 

 

 

17,854 

 

 

— 

Proceeds from revolving credit facility

 

 

12,500 

 

 

— 

 

 

— 

Payments on other financing

 

 

— 

 

 

(498)

 

 

(500)

Contributions by noncontrolling interests

 

 

25,000 

 

 

— 

 

 

— 

Members’ distributions

 

 

(94,420)

 

 

(120,000)

 

 

(50,000)

Distributions to noncontrolling interests

 

 

(6,160)

 

 

(3,000)

 

 

— 

 

 

 

 

 

 

 

 

 

 

Net cash used in financing activities

 

 

(60,230)

 

 

(10,945)

 

 

(44,954)

 

 

 

 

 

 

 

 

 

 

Net increase in cash, cash equivalents and restricted cash

 

 

6,963 

 

 

18,560 

 

 

19,392 

Cash, cash equivalents and restricted cash, beginning of year

 

 

78,699 

 

 

60,139 

 

 

40,747 

 

 

 

 

 

 

 

 

 

 

Cash, cash equivalents and restricted cash, end of year

 

$

85,662 

 

$

78,699 

 

$

60,139 

 

 

 

 

 

 

 

 

 

 

Supplemental disclosure of cash flow information

 

 

 

 

 

 

 

 

 

Interest paid

 

$

7,051 

 

$

1,881 

 

$

310 

 

 

 

 

 

 

 

 

 

 

Noncash investing activities and operating activities

 

 

 

 

 

 

 

 

 

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

 

$

1,077 

 

$

(498)

 

$

1,454 

Non-cash distributions from joint ventures (Note 2)

 

$

— 

 

$

— 

 

$

33,582 

 

 

 

 

 

 

 

 

 

 

 

See accompanying notes.

 

 

 

8

Table of Contents

SSA Terminals, LLC

Notes to Consolidated Financial Statements

Fiscal Years Ended January 31, 2020, January 25, 2019, and January 26, 2018

(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 based on ownership percentages. SVI’s and MVI’s ownership interests in the Company are 65% and 35%, respectively. 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.

Effective April 1, 2019, the Company signed a limited liability company agreement with Terminal Investment Limited Sarl (TIL) to create SSA Terminals (Seattle Terminals), LLC (SSATST) and operate a terminal in Seattle, Washington. The Company has an 75% ownership interest in SSATST with the remaining 25% owned by TIL.

 

9

Table of Contents

SSA Terminals, LLC

Notes to Consolidated Financial Statements (continued)

(in thousands)

 

2.      Summary of Significant Accounting Policies

Basis of Presentation and Use of Estimates

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

The preparation of consolidated financial statements in conformity with accounting principles generally accepted in the United States 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.

The Company reclassified $220,760 and $195,663 from General and administrative expenses into Cost of revenues on the consolidated statements of operations for the fiscal years ended 2019 and 2018, respectively, to conform with current year presentation. The Company also reclassified $17,854 from Noncash lease expense to Construction obligation receipts for the fiscal year ended 2019 on the consolidated statements of cash flows to conform with current year presentation.

Financial Reporting Period

The Company’s fiscal year ends on the last Friday in January. Fiscal year 2020 included 53 weeks and fiscal years 2019 and 2018 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 which represent the next six months of payments as required by the SSATO Credit Agreement (Note 11).

Cash, cash equivalents, and restricted cash equivalents are as follows:

 

 

 

 

 

 

 

 

    

January 31,
2020

    

January 25,
2019

 

 

 

 

 

Cash and cash equivalents

 

$

82,992 

 

$

76,085 

Restricted cash equivalents

 

 

2,670 

 

 

2,614 

 

 

 

 

 

 

 

 

 

$

85,662 

 

$

78,699 

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 the invoiced amount. An allowance for doubtful accounts is estimated based on factors such as the 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 are 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 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 of $2,500 occurred during fiscal year 2019.

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.

Other Assets

Other assets includes deferred charges which consist 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 2020, 2019, and 2018, $687 was recognized as a reduction to revenue. As of January 31, 2020 and January 25, 2019, respectively, $1,660 and $2,347 remains unamortized, of which $687 is current in each year. Other assets also includes refundable security deposits and insurance recoveries receivables of $166 as of January 31, 2020, and includes refundable security deposits, deferred rent, and insurance recoveries receivables of $12,957 as of January 25, 2019.

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 was recognized during fiscal years 2020, 2019, or 2018.

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

12

Table of Contents

SSA Terminals, LLC

Notes to Consolidated Financial Statements (continued)

(in thousands)

 

2.      Summary of Significant Accounting Policies (continued)

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 included in cash equivalents and 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, and accounts payable and accrued liabilities approximate their fair values due to the short-term nature of those amounts.

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, no derivative contracts were classified within Level 3 of the fair value hierarchy. In

13

Table of Contents

SSA Terminals, LLC

Notes to Consolidated Financial Statements (continued)

(in thousands)

 

2.      Summary of Significant Accounting Policies (continued)

addition, there were no transfers in or out of Level 3 of the fair value hierarchy during the current year.

Leases

The Company adopted the requirements of Accounting Standards Update (ASU) No. 2016-02, Leases. The Company has elected the package of optional practical expedients permitted under the transition guidance within the new standard. By adopting these practical expedients, the Company is not required to reassess the following lease characteristics: (1) whether an expired or existing contract contains a lease; (2) the lease classification for expired or existing leases; or (3) any initial direct costs for existing leases that were initially capitalized. Additionally, the Company elected the practical expedient to use hindsight in determining the lease term and in assessing impairment of right-of-use assets. The Company elected to use the modified retrospective method of transition for all leases that exist at the date of application, resulting in the addition of right-of-use (ROU) asset and liabilities, the reclassification of deferred rent to the ROU asset, and the removal of certain other lease assets to retained earnings as follows:

 

 

    

Increase
(Decrease)

 

 

 

Prepaid lease, net

 

$

(18,941)

Lease right-of-use assets

 

 

1,094,345 

Lease obligations

 

 

1,112,335 

Other long-term liabilities

 

 

(20,050)

Retained earnings

 

 

(17,863)

 

The Company determines whether an arrangement is a lease at the inception of the arrangement based upon the terms and conditions in the contract. A contract is determined to contain a lease if there is an identified asset and the Company determines that it has the right to control the asset. When the right to use an underlying asset is identified the Company recognizes an operating or finance ROU asset and lease liability in the consolidated balance sheets based upon the evaluation of terms. Leases with initial terms of 12 months or less are not recognized in the consolidated balance sheets, and the associated costs are recognized straight-line over the lease term. The Company currently does not have any leasing arrangements that are classified as finance-type leases.

The ROU assets and lease liabilities represent the present value of the Company’s right to use the underlying asset and lease obligation in the contract, respectively. The present value of the ROU assets and lease liabilities are calculated using the rate implicit in the lease, if readily determinable, or the Company’s incremental borrowing rate.

Lease expense for lease payments are recognized straight-line for operating leases over the lease terms. Lease payments based on asset performance or market rates greater than guaranteed minimums are expensed as incurred. The Company accounts for lease and non-lease components separately.

14

Table of Contents

SSA Terminals, LLC

Notes to Consolidated Financial Statements (continued)

(in thousands)

 

2.      Summary of Significant Accounting Policies (continued)

Revenue From Contracts with Customers

The Company adopted the requirements of ASU No. 2014-09, Revenue from Contracts with Customers (Topic 606) using the modified retrospective method. The new revenue standard establishes principles for recognizing revenue based on the nature, amount, timing and uncertainty of revenue and cash flows arising from contracts with customers, including significant judgments. This adoption did not require a cumulative effect adjustment or have a significant impact on the Company’s consolidated financial statements.

The Company’s agreements identify each party’s rights regarding the goods and services to be transferred and payment terms. The Company accounts for these contracts with customers when both parties understand and have agreed to the terms of service, and the Company has determined that the contract has commercial substance and will collect substantially all the consideration to which it is owed. Customers are granted credit and payment is required in U.S. dollars usually thirty days after the date of invoice.

The Company provides stevedoring services to shipping lines and beneficial cargo owners. Stevedoring services include loading and unloading containers from ocean-going vessels and movement and storage of containers. The Company faces the risk that a customer could redirect vessels to another terminal depending on capacity and pricing.

These services are performance obligations as defined in Topic 606. The Company identifies a performance obligation as a distinct good or service, or series of distinct goods or services, that a customer can benefit from and is separately identifiable from other promises in a contract. Each distinct service is listed in the contract rate sheet for each customer, and the transaction price is allocated to these services based on the price in the rate sheet, which represents the cost of providing the service plus a reasonable margin.

The Company’s services are performed primarily in port terminals leased from local governments. For some services the transaction prices are determined by those local governments in the form of tariff rates. The Company considers itself a principal in these transactions as the Company controls the services before they are transferred to customers and is primarily responsible for fulfilling the promise to provide the service.

While the services the Company provides are distinct, customers typically bundle these services together when the Company performs a vessel call. Vessel calls involve the loading and unloading of a customer’s vessel of cargo, along with any additional port services. The Company considers a vessel call to be a series of services representing a single performance obligation satisfied over time. Vessel call revenue is recognized in the amount the Company has the right to invoice in accordance with Topic 606’s practical expedient for output methods. Due to the short-term nature of the Company’s contracts, the costs to obtain and fulfill the contracts occurs within a year and is therefore expensed rather than capitalized.

15

Table of Contents

SSA Terminals, LLC

Notes to Consolidated Financial Statements (continued)

(in thousands)

 

2.      Summary of Significant Accounting Policies (continued)

Taxes

The Company is not a tax-paying entity for federal income tax purposes. Therefore, no federal income tax expense was 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.

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 31, 2020, and January 25, 2019, net of noncontrolling interests, are as follows:

 

 

 

 

 

 

 

 

 

 

 

    

Balance at
January 31,
2020

    

Net Activity

    

Balance at
January 25,
2019

 

 

 

 

 

 

 

Unrecognized portion of pensions and other postretirement obligations

 

$

(4,941)

 

$

(632)

 

$

(4,309)

Fair value of cash flow hedges

 

 

(3,072)

 

 

(1,849)

 

 

(1,223)

 

 

 

 

 

 

 

 

 

 

 

 

$

(8,013)

 

$

(2,481)

 

$

(5,532)

 

Accumulated other comprehensive loss includes $768 and $306 at January 31, 2020, and January 25, 2019, respectively, of amounts attributable to noncontrolling interests related to the change in fair value of cash flow hedges. Losses attributable to noncontrolling interests related to the change in fair value of cash flow hedges of $462 and $306 are included as components of comprehensive income for fiscal years 2020 and 2019, respectively. The unrecognized portion of pensions and other postretirement obligations includes prior service costs and net losses of $349 and $4,592, 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 $27 and $236, respectively.

Subsequent Events

The Company has evaluated subsequent event transactions for potential recognition or disclosure in the consolidated financial statements through April 6, 2020, the day the consolidated financial statements were available to be issued.

16

Table of Contents

SSA Terminals, LLC

Notes to Consolidated Financial Statements (continued)

(in thousands)

 

2.      Summary of Significant Accounting Policies (continued)

New Accounting Pronouncements

There were no additional 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 31,
2020

    

January 25,
2019

 

 

 

 

 

Trade receivables – billed

 

$

95,500 

 

$

105,670 

Trade receivables – unbilled

 

 

6,161 

 

 

9,060 

Receivables from related parties (Note 7)

 

 

97,248 

 

 

61,667 

Other

 

 

53 

 

 

2,723 

 

 

 

 

 

 

 

 

 

 

198,962 

 

 

179,120 

Allowance for doubtful accounts

 

 

(841)

 

 

(654)

 

 

 

 

 

 

 

 

 

$

198,121 

 

$

178,466 

 

The Company’s four largest customers for fiscal year 2020 and three largest customers for fiscal years 2019 and 2018 accounted for 55%, 45%, and 35% of total revenues, respectively. The Company’s three largest customers accounted for 53% and 54% of total receivables at January 31, 2020, and January 25, 2019, respectively.

4.      Property and Equipment, Net

Property and equipment, net, includes:

 

 

    

January 31,
2020

    

January 25,
2019

 

 

 

 

 

Cranes

 

$

119,395 

 

$

119,221 

Buildings and leasehold improvements

 

 

48,892 

 

 

45,710 

Top picks / side picks

 

 

65,437 

 

 

64,376 

Equipment and other

 

 

98,002 

 

 

93,705 

Construction-in-progress

 

 

44,474 

 

 

11,882 

 

 

 

 

 

 

 

 

 

 

376,200 

 

 

334,894 

Less: accumulated depreciation

 

 

(215,637)

 

 

(195,971)

 

 

 

 

 

 

 

 

 

$

160,563 

 

$

138,923 

 

Depreciation and amortization expense recognized on property and equipment amounted to $27,047, $25,730, and $21,509 for fiscal years 2020, 2019, and 2018, respectively.

17

Table of Contents

SSA Terminals, LLC

Notes to Consolidated Financial Statements (continued)

(in thousands)

 

5.      Accounts Payable and Accrued Liabilities

Accounts payable and accrued liabilities includes:

 

 

    

January 31,
2020

    

January 25,
2019

 

 

 

 

 

Accounts payable

 

$

21,615 

 

$

26,460 

Accrued compensation and benefits

 

 

24,965 

 

 

25,029 

Accounts payable to related parties

 

 

6,963 

 

 

7,095 

Other accrued liabilities

 

 

1,387 

 

 

1,452 

 

 

 

 

 

 

 

 

 

$

54,930 

 

$

60,036 

 

 

6.      Due To 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 cost of revenues were $29,635, $28,182, and $23,704 for fiscal years 2020, 2019, and 2018, respectively.

7.      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 31,
2020

    

January 25,
2019

    

January 26,
2018

 

 

 

 

 

 

 

Member affiliates

 

$

227,065 

 

$

218,990 

 

$

185,470 

Affiliates of joint venture partners

 

 

209,813 

 

 

160,982 

 

 

86,158 

Related joint ventures

 

 

18,445 

 

 

13,661 

 

 

36,024 

 

18

Table of Contents

SSA Terminals, LLC

Notes to Consolidated Financial Statements (continued)

(in thousands)

 

7.      Related-Party Transactions (continued)

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

 

 

 

 

 

 

 

 

 

    

January 31,
2020

    

January 25,
2019

 

 

 

 

 

Member affiliates

 

$

59,285 

 

$

45,008 

Affiliates of joint venture partners

 

 

36,767 

 

 

15,383 

Related joint ventures

 

 

1,196 

 

 

1,276 

 

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

 

 

 

 

 

 

 

 

 

 

Years Ended

 

    

January 31,
2020

    

January 25,
2019

    

January 26,
2018

 

 

 

 

 

 

 

Purchases from member affiliates

 

$

5,654 

 

$

14,236 

 

$

11,326 

 

Related parties provided other services that are included in either cost of revenue or general and administrative expenses as follows:

 

 

 

 

 

 

 

 

 

 

 

 

 

Years Ended

 

    

January 31,
2020

    

January 25,
2019

    

January 26,
2018

 

 

 

 

 

 

 

Member affiliates

 

$

44,141 

 

$

42,364 

 

$

32,550 

Affiliates of joint venture partners

 

 

2,456 

 

 

2,645 

 

 

2,718 

Related joint ventures

 

 

256 

 

 

283 

 

 

455 

 

 

 

8.      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 two other shareholders. The two trusts have common beneficiaries as the ultimate parent of SVI. The minority interests in the insurance company are held by the same entities who own minority interests in the ultimate parent of SVI. Included in the cost of revenues are premium expenses of $28,099, $27,180, and $24,168 for fiscal years 2020, 2019, and 2018, respectively. Premiums payable included in accounts payable and accrued liabilities were $2,592 and $2,102 at January 31, 2020, and January 25, 2019, respectively.

19

Table of Contents

SSA Terminals, LLC

Notes to Consolidated Financial Statements (continued)

(in thousands)

 

9.      Claims and Other

Claims and other includes the following:

 

 

    

January 31,
2020

    

January 25,
2019

 

 

 

 

 

Personal property, property damage, and bodily injury

 

$

4,794 

 

$

3,705 

Legal and other reserves

 

 

500 

 

 

700 

 

 

 

5,294 

 

 

4,405 

Less: current portion

 

 

(1,680)

 

 

(2,080)

 

 

 

 

 

 

 

 

 

$

3,614 

 

$

2,325 

 

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.

10.      Postretirement Benefits

 

Postretirement benefits include pension and other postretirement benefits as follows:

 

 

    

January 31,
2020

    

January 25,
2019

 

 

 

 

 

Oakland defined benefit plan

 

$

1,751 

 

$

1,525 

The Program

 

 

6,550 

 

 

5,847 

Medigap

 

 

3,420 

 

 

3,140 

Other

 

 

409 

 

 

447 

 

 

 

 

 

 

 

 

 

 

12,130