UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the quarterly period ended
OR
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the transition period from to
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Securities registered pursuant to Section 12(b) of the Act:
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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.
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Number of shares of common stock outstanding as of March 31, 2021:
MATSON, INC. AND SUBSIDIARIES
TABLE OF CONTENTS
| Page | ||
1 | |||
1 | |||
Condensed Consolidated Statements of Income and Comprehensive Income | 1 | ||
2 | |||
3 | |||
4 | |||
5 | |||
Management’s Discussion and Analysis of Financial Condition and Results of Operations | 14 | ||
19 | |||
19 | |||
20 | |||
20 | |||
20 | |||
20 | |||
20 | |||
20 | |||
20 | |||
21 | |||
22 |
PART I. FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
MATSON, INC. AND SUBSIDIARIES
Condensed Consolidated Statements of Income and Comprehensive Income
(Unaudited)
Three Months Ended |
| ||||||
March 31, | |||||||
(In millions, except per share amounts) |
| 2021 |
| 2020 |
| ||
Operating Revenue: | |||||||
Ocean Transportation | $ | | $ | | |||
Logistics |
| |
| | |||
Total Operating Revenue |
| |
| | |||
Costs and Expenses: | |||||||
Operating costs |
| ( |
| ( | |||
Income from SSAT |
| |
| | |||
Selling, general and administrative |
| ( |
| ( | |||
Total Costs and Expenses |
| ( |
| ( | |||
Operating Income |
| |
| | |||
Interest expense |
| ( |
| ( | |||
Other income (expense), net |
| |
| | |||
Income before Income Taxes |
| |
| | |||
Income taxes |
| ( |
| ( | |||
Net Income | $ | | $ | | |||
Other Comprehensive Income (Loss), Net of Income Taxes: | |||||||
Net Income | $ | | $ | | |||
Other Comprehensive Income (Loss): | |||||||
Amortization of prior service cost |
| ( |
| ( | |||
Amortization of net loss |
| |
| | |||
Other adjustments |
| ( |
| ( | |||
Total Other Comprehensive Income (Loss) |
| ( |
| ( | |||
Comprehensive Income | $ | | $ | | |||
Basic Earnings Per Share | $ | | $ | | |||
Diluted Earnings Per Share | $ | | $ | | |||
Weighted Average Number of Shares Outstanding: | |||||||
Basic |
| |
| | |||
Diluted |
| |
| |
See Notes to Condensed Consolidated Financial Statements.
1
MATSON, INC. AND SUBSIDIARIES
Condensed Consolidated Balance Sheets
(Unaudited)
March 31, | December 31, | ||||||
(In millions) |
| 2021 |
| 2020 |
| ||
ASSETS | |||||||
Current Assets: | |||||||
Cash and cash equivalents | $ | | $ | | |||
Accounts receivable, net of allowance for credit loss of $ |
| |
| | |||
Prepaid expenses and other assets |
| |
| | |||
Total current assets |
| |
| | |||
Long-term Assets: | |||||||
Investment in SSAT |
| |
| | |||
Property and equipment, net |
| |
| | |||
Operating lease right of use assets | | | |||||
Goodwill |
| |
| | |||
Intangible assets, net | | | |||||
Deferred dry-docking costs, net | | | |||||
Other long-term assets |
| |
| | |||
Total long-term assets | | | |||||
Total Assets | $ | | $ | | |||
LIABILITIES AND SHAREHOLDERS’ EQUITY | |||||||
Current Liabilities: | |||||||
Current portion of debt | $ | | $ | | |||
Accounts payable and accruals |
| |
| | |||
Operating lease liabilities | | | |||||
Other liabilities |
| |
| | |||
Total current liabilities |
| |
| | |||
Long-term Liabilities: | |||||||
Long-term debt, net of deferred loan fees |
| |
| | |||
Long-term operating lease liabilities | | | |||||
Deferred income taxes |
| |
| | |||
Other long-term liabilities | | | |||||
Total long-term liabilities |
| |
| | |||
Commitments and Contingencies | |||||||
Shareholders’ Equity: | |||||||
Common stock |
| |
| | |||
Additional paid in capital |
| |
| | |||
Accumulated other comprehensive loss, net |
| ( |
| ( | |||
Retained earnings |
| |
| | |||
Total shareholders’ equity |
| |
| | |||
Total Liabilities and Shareholders’ Equity | $ | | $ | |
See Notes to Condensed Consolidated Financial Statements.
2
MATSON, INC. AND SUBSIDIARIES
Condensed Consolidated Statements of Cash Flows
(Unaudited)
Three Months Ended March 31, | |||||||
(In millions) |
| 2021 |
| 2020 |
| ||
Cash Flows From Operating Activities: | |||||||
Net income | $ | | $ | | |||
Reconciling adjustments: | |||||||
Depreciation and amortization |
| |
| | |||
Amortization of operating lease right of use assets | | | |||||
Deferred income taxes |
| |
| | |||
Share-based compensation expense |
| |
| | |||
Income from SSAT |
| ( |
| ( | |||
Distribution from SSAT | | | |||||
Other | ( | ( | |||||
Changes in assets and liabilities: | |||||||
Accounts receivable, net |
| ( |
| ( | |||
Deferred dry-docking payments |
| ( |
| ( | |||
Deferred dry-docking amortization |
| |
| | |||
Prepaid expenses and other assets |
| ( |
| ( | |||
Accounts payable, accruals and other liabilities |
| |
| | |||
Operating lease liabilities | ( | ( | |||||
Other long-term liabilities |
| ( |
| ( | |||
Net cash provided by operating activities |
| |
| | |||
Cash Flows From Investing Activities: | |||||||
Capitalized vessel construction expenditures | — | ( | |||||
Other capital expenditures |
| ( |
| ( | |||
Proceeds from disposal of property and equipment |
| |
| | |||
Cash deposits into Capital Construction Fund |
| — |
| ( | |||
Withdrawals from Capital Construction Fund | — | | |||||
Net cash used in investing activities |
| ( |
| ( | |||
Cash Flows From Financing Activities: | |||||||
Repayments of debt |
| ( |
| ( | |||
Proceeds from revolving credit facility | | | |||||
Repayments of revolving credit facility |
| ( |
| ( | |||
Payment of financing costs | ( | ( | |||||
Dividends paid | ( |
| ( | ||||
Tax withholding related to net share settlements of restricted stock units | ( | ( | |||||
Net cash used in financing activities |
| ( |
| ( | |||
Net Decrease in Cash, Cash Equivalents and Restricted Cash |
| ( |
| ( | |||
Cash, Cash Equivalents and Restricted Cash, Beginning of the Period |
| |
| | |||
Cash, Cash Equivalents and Restricted Cash, End of the Period | $ | | $ | | |||
Reconciliation of Cash, Cash Equivalents and Restricted Cash, End of the Period: | |||||||
Cash and Cash Equivalents | $ | | $ | | |||
Restricted Cash | | | |||||
Total Cash, Cash Equivalents and Restricted Cash, End of the Period | $ | | $ | | |||
Supplemental Cash Flow Information: | |||||||
Interest paid, net of capitalized interest | $ | | $ | | |||
Income tax (refunds) and payments, net | $ | ( | $ | ( | |||
Non-cash Information: | |||||||
Capital expenditures included in accounts payable, accruals and other liabilities | $ | | $ | |
See Notes to Condensed Consolidated Financial Statements.
3
MATSON, INC. AND SUBSIDIARIES
Condensed Consolidated Statements of Shareholders’ Equity
(Unaudited)
Accumulated | |||||||||||||||||
Common Stock | Additional | Other | |||||||||||||||
Stated | Paid In | Comprehensive | Retained | ||||||||||||||
(In millions, except per share amounts) |
| Shares |
| Value |
| Capital |
| Income (Loss) |
| Earnings |
| Total | |||||
Balance at December 31, 2020 |
| | $ | |
| $ | | $ | ( | $ | | $ | | ||||
Net income |
| — |
| — |
|
| — |
| — |
| |
| | ||||
Other comprehensive loss, net of tax |
| — |
| — |
|
| — |
| ( |
| — |
| ( | ||||
Share-based compensation |
| — |
| — |
|
| |
| — |
| — |
| | ||||
Shares issued, net of shares withheld for employee taxes |
| |
| |
|
| ( |
| — |
| — |
| ( | ||||
Dividends ($ |
| — |
| — |
|
| — |
| — |
| ( |
| ( | ||||
Balance at March 31, 2021 |
| | $ | |
| $ | | $ | ( | $ | | $ | |
Accumulated | |||||||||||||||||
Common Stock | Additional | Other | |||||||||||||||
Stated | Paid In | Comprehensive | Retained | ||||||||||||||
(In millions, except per share amounts) |
| Shares |
| Value |
| Capital |
| Income (Loss) |
| Earnings |
| Total | |||||
Balance at December 31, 2019 |
| | $ | |
| $ | | $ | ( | $ | | $ | | ||||
Net income |
| — |
| — |
|
| — |
| — |
| |
| | ||||
Other comprehensive loss, net of tax |
| — |
| — |
|
| — |
| ( |
| — |
| ( | ||||
Share-based compensation |
| — |
| — |
|
| |
| — |
| — |
| | ||||
Shares issued, net of shares withheld for employee taxes |
| |
| |
|
| ( |
| — |
| — |
| ( | ||||
Equity interest in SSAT | — |
| — | — | — | | | ||||||||||
Dividends ($ |
| — |
| — |
|
| — |
| — |
| ( |
| ( | ||||
Balance at March 31, 2020 |
| | $ | |
| $ | | $ | ( | $ | | $ | |
See Notes to Condensed Consolidated Financial Statements.
4
MATSON, INC. AND SUBSIDIARIES
NOTES TO THE CONDENSED CONSOLIDATED FINANICAL STATEMENTS
(Unaudited)
1. DESCRIPTION OF THE BUSINESS
Matson, Inc., a holding company incorporated in the State of Hawaii, and its subsidiaries (“Matson” or the “Company”), is a leading provider of ocean transportation and logistics services. The Company consists of
Ocean Transportation: Matson’s Ocean Transportation business is conducted through Matson Navigation Company, Inc. (“MatNav”), a wholly-owned subsidiary of Matson, Inc. Founded in 1882, MatNav provides a vital lifeline of ocean freight transportation services to the domestic non-contiguous economies of Hawaii, Alaska and Guam, and to other island economies in Micronesia. MatNav also operates two premium, expedited services from China to Long Beach, California, and provides services to Okinawa, Japan and various islands in the South Pacific, and operates an international export service from Dutch Harbor to Asia. In addition, subsidiaries of MatNav provide stevedoring, refrigerated cargo services, inland transportation and other terminal services for MatNav and other ocean carriers on the Hawaiian islands of Oahu, Hawaii, Maui and Kauai, and in the Alaska locations of Anchorage, Kodiak and Dutch Harbor.
Matson has a
Logistics: Matson’s Logistics business is conducted through Matson Logistics, Inc. (“Matson Logistics”), a wholly-owned subsidiary of MatNav. Established in 1987, Matson Logistics is an asset-light business that provides a variety of logistics services to its customers including: (i) multimodal transportation brokerage of domestic and international rail intermodal services, long-haul and regional highway trucking services, specialized hauling, flat-bed and project services, less-than-truckload services, and expedited freight services (collectively, “Transportation Brokerage” services); (ii) less-than-container load (“LCL”) consolidation and freight forwarding services (collectively, “Freight Forwarding” services); (iii) warehousing and distribution services; and (iv) supply chain management, non-vessel operating common carrier (“NVOCC”) freight forwarding and other services.
2. SIGNIFICANT ACCOUNTING POLICIES
Basis of Presentation: The Condensed Consolidated Financial Statements are unaudited, and include the accounts of Matson, Inc. and all wholly-owned subsidiaries, after elimination of intercompany amounts and transactions. Significant investments in businesses, partnerships, and limited liability companies in which the Company does not have a controlling financial interest, but has the ability to exercise significant influence, are accounted for under the equity method. The Company accounts for its investment in SSAT using the equity method of accounting.
Due to the nature of the Company’s operations, the results for interim periods are not necessarily indicative of results to be expected for the year. These Condensed Consolidated Financial Statements reflect all normal recurring adjustments that are, in the opinion of management, necessary for fair presentation of the results of the interim periods, and do not include all of the information and footnotes required by U.S. generally accepted accounting principles for complete consolidated financial statements.
The Condensed Consolidated Financial Statements should be read in conjunction with the Consolidated Financial Statements and notes thereto included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2020, filed with the Securities and Exchange Commission (“SEC”) on February 26, 2021.
Fiscal Period: The period end for Matson covered by this report is March 31, 2021. The period end for MatNav and its subsidiaries covered by this report occurred on the last Friday in March, or March 26, 2021.
5
Significant Accounting Policies: The Company’s significant accounting policies are described in Note 2 to the Consolidated Financial Statements included in Part II, Item 8 of the Company’s Annual Report on Form 10-K for the year ended December 31, 2020.
Use of Estimates: The preparation of the interim condensed consolidated financial statements in conformity with accounting principles generally accepted in the U.S. requires management to make estimates and assumptions that affect the amounts reported. Estimates and assumptions are used for, but not limited to: impairment of investments; impairment of long-lived assets, intangible assets and goodwill; capitalized interest; allowance for doubtful accounts; legal contingencies; insurance reserves and other related liabilities; accrual estimates; pension and post-retirement estimates; multi-employer withdrawal liabilities; operating lease assets and liabilities; and income taxes. Future results could be materially affected if actual results differ from these estimates and assumptions.
Recognition of Revenues and Expenses: Revenue in the Company’s Condensed Consolidated Financial Statements is presented net of elimination of intercompany transactions. The following is a description of the Company’s principal revenue generating activities by segment, and the Company’s revenue recognition policy for each activity for the periods presented:
March 31, | ||||||
Ocean Transportation (in millions) (1) | 2021 |
| 2020 | |||
Ocean Transportation services | $ | | $ | | ||
Terminal and other related services | | | ||||
Fuel sales | | | ||||
Vessel management and related services | | | ||||
Total | $ | | $ | |
(1) | Ocean Transportation revenue transactions are primarily denominated in U.S. dollars except for less than |
◾ | Ocean Transportation services revenue is recognized ratably over the duration of a voyage based on the relative transit time completed in each reporting period. Vessel operating costs and other ocean transportation operating costs, such as terminal operating overhead and selling, general and administrative expenses, are charged to operating costs as incurred. |
◾ | Terminal and other related services revenue is recognized as the services are performed. Related costs are recognized as incurred. |
◾ | Fuel sales revenue and related costs are recognized when the Company has completed delivery of the product to the customer in accordance with the terms and conditions of the contract. |
◾ | Vessel management and related services revenue is recognized in proportion to the services completed. Related costs are recognized as incurred. |
March 31, | ||||||
Logistics (in millions) (1) | 2021 | 2020 | ||||
Transportation Brokerage and Freight Forwarding services | $ | | $ | | ||
Warehouse and distribution services | | | ||||
Supply chain management and other services |
| |
| | ||
Total | $ | | $ | |
(1) | Logistics revenue transactions are primarily denominated in U.S. dollars except for less than |
◾ | Transportation Brokerage and Freight Forwarding services revenue consists of amounts billed to customers for services provided. The primary costs include third-party purchased transportation services, agent commissions, labor and equipment. Revenue and the related purchased third-party transportation costs are recognized over the duration of a delivery based upon the relative transit time completed in each reporting period. Labor, agent commissions, and other operating costs are expensed as incurred. The Company reports revenue on a gross basis as the Company serves as the principal in these transactions because it is responsible for fulfilling the contractual arrangements with the customer and has latitude in establishing prices. |
◾ | Warehousing and distribution services revenue consist of amounts billed to customers for storage, handling, and value-added packaging of customer merchandise. Storage revenue is recognized in the month the service is |
6
provided to the customer. Storage related costs are recognized as incurred. Other warehousing and distribution services revenue and related costs are recognized in proportion to the services performed. |
◾ | Supply chain management and other services revenue, and related costs are recognized in proportion to the services performed. |
The Company generally invoices its customers at the commencement of the voyage or the transportation service being provided, or as other services are being performed. Revenue is deferred when services are invoiced in advance to the customer. The Company’s receivables are classified as short-term as collection terms are for periods of less than one year. The Company expenses sales commissions and contract acquisition costs as incurred because the amounts are generally immaterial. These expenses are included in selling, general and administration expenses in the Condensed Consolidated Statements of Income and Comprehensive Income.
Capital Construction Fund: The Company’s Capital Construction Fund (“CCF”) is described in Note 7 to the Consolidated Financial Statements included in Part II, Item 8 of the Company’s Annual Report on Form 10-K for the year ended December 31, 2020. As of March 31, 2021 and December 31, 2020, $
Investment in SSAT: Condensed income statement information for SSAT for the three months ended March 31, 2021 and 2020 consisted of the following:
Three Months Ended |
| ||||||
March 31, |
| ||||||
(In millions) | 2021 |
| 2020 |
| |||
Operating revenue | $ | | $ | | |||
Operating costs and expenses | ( | ( | |||||
Operating income | | | |||||
Net Income (1) | $ | | $ | | |||
Company Share of SSAT’s Net Income (2) | $ | | $ | |
(1) | Includes earnings from equity method investments held by SSAT less earnings allocated to non-controlling interests. |
(2) | The Company records its share of net income from SSAT in costs and expenses in the Condensed Consolidated Statement of Income and Comprehensive Income due to the nature of SSAT’s operations. |
The Company’s investment in SSAT was $
Contingencies: Environmental Matters: The Company’s Ocean Transportation business has certain risks that could result in expenditures for environmental remediation. The Company believes that based on all information available to it, the Company is currently in compliance, in all material respects, with applicable environmental laws and regulations.
Other Matters: The Company and its subsidiaries are parties to, or may be contingently liable in connection with other legal actions arising in the normal course of their businesses, the outcomes of which, in the opinion of management after consultation with counsel, would not have a material effect on the Company’s financial condition, results of operations, or cash flows.
Dividends: The Company’s first quarter 2021 cash dividend of $
7
3. REPORTABLE SEGMENTS
Reportable segments are components of an enterprise that engage in business activities from which it may earn revenues and incur expenses, whose operating results are regularly reviewed by the chief operating decision maker to make decisions about resources to be allocated to the segment and assess its performance, and for which discrete financial information is available. The Company’s chief operating decision maker is its Chief Executive Officer.
The Company consists of
The Company’s Ocean Transportation segment provides ocean transportation services to the Logistics segment, and the Logistics segment provides logistics services to the Ocean Transportation segment in certain transactions. Accordingly, inter-segment revenue of $
Reportable segment financial information for the three months ended March 31, 2021 and 2020 are as follows:
Three Months Ended | |||||||
March 31, | |||||||
(In millions) |
| 2021 |
| 2020 |
| ||
Operating Revenue: | |||||||
Ocean Transportation (1) | $ | | $ | | |||
Logistics (2) |
| |
| | |||
Total Operating Revenue | $ | | $ | | |||
Operating Income: | |||||||
Ocean Transportation (3) | $ | | $ | | |||
Logistics |
| |
| | |||
Total Operating Income |
| |
| | |||
Interest expense, net |
| ( |
| ( | |||
Other income (expense), net |
| |
| | |||
Income before Income Taxes |
| |
| | |||
Income taxes |
| ( |
| ( | |||
Net Income | $ | | $ | |
(1) | Ocean Transportation operating revenue excludes inter-segment revenue of $ |
(2) | Logistics operating revenue excludes inter-segment revenue of $ |
(3) | Ocean Transportation segment information includes $ |
4. PROPERTY AND EQUIPMENT
Property and equipment as of March 31, 2021 and December 31, 2020 consisted of the following:
March 31, | December 31, | ||||||
(In millions) |
| 2021 |
| 2020 | |||
Cost: | |||||||
Vessels | $ | | $ | | |||
Containers and equipment | | | |||||
Terminal facilities and other property | | | |||||
Construction in progress | | | |||||
Total Property and Equipment | | | |||||
Less: Accumulated Depreciation | ( | ( | |||||
Total Property and Equipment, net | $ | | $ | |
8
5. GOODWILL AND INTANGIBLES
Goodwill by segment as of March 31, 2021 and December 31, 2020 consisted of the following:
Ocean |
| |||||||||
(In millions) |
| Transportation |
| Logistics |
| Total |
| |||
Goodwill | $ | | $ | | $ | |
Intangible assets as of March 31, 2021 and December 31, 2020 consisted of the following:
March 31, | December 31, | ||||||
(In millions) |
| 2021 |
| 2020 | |||
Customer Relationships: | |||||||
Ocean Transportation | $ | | $ | | |||
Logistics | | | |||||
Total | | | |||||
Less: Accumulated Amortization | ( | ( | |||||
Total Customer Relationships, net | | | |||||
Trade name – Logistics | | | |||||
Total Intangible Assets, net | $ | | $ | |
The Company evaluates its goodwill and intangible assets for possible impairment in the fourth quarter, or whenever events or changes in circumstances indicate that it is more likely than not that the fair value is less than its carrying amount. The Company has reporting units within the Ocean Transportation and Logistics reportable segments. The Company considered the general economic and market conditions due to the COVID-19 pandemic and its impact on the performance of each of the Company’s reporting units. Based on the Company’s assessment of its market capitalization, future forecasts and the amount of excess of fair value over the carrying value of the reporting units in the 2020 annual impairment tests, the Company concluded that an impairment triggering event did not occur during the quarter ended March 31, 2021.
The Company will monitor events and changes in circumstances that could negatively impact the key assumptions used in determining the fair value, including the amount and timing of estimated future cash flows generated by the reporting units, long-term growth and discount rates, comparable company market valuations, and industry and economic trends. It is possible that future changes in such circumstances, including a more prolonged and/or severe COVID-19 pandemic, or future changes in the assumptions and estimates used in assessing the fair value of the reporting unit, could require the Company to record a non-cash impairment charge.
9
6. DEBT
As of March 31, 2021 and December 31, 2020, the Company’s debt consisted of the following:
March 31, | December 31, | ||||||
(In millions) |
| 2021 |
| 2020 |
| ||
Private Placement Term Loans: | |||||||
$ | $ | ||||||
|
| ||||||
|
| ||||||
Title XI Debt: | |||||||
|
| ||||||
|
| ||||||
Revolving credit facility, maturity date of March 31, 2026 |
|
| |||||
Total Debt |
| |
| | |||
Less: Current portion |
| ( |
| ( | |||
Total Long-term Debt | | | |||||
Less: Deferred loan fees | ( |
| ( | ||||
Total Long-term Debt, net of deferred loan fees | $ | | $ | |
Except as described below, the Company’s debt is described in Note 8 to the Consolidated Financial Statements included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2020.
Revolving Credit Facility Amendment: On March 31, 2021, the Company entered into the Second Amended and Restated Credit Agreement (the “Credit Agreement”). The Credit Agreement extends the maturity date to March 31, 2026, and retains the existing committed aggregate borrowings of up to $
As of March 31, 2021, the Company had $
Private Placement Term Loans Amendments: On March 31, 2021, the Company and the holders of the private placement term loans entered into amendments (collectively, the “2021 Note Amendments”) to each of (i) the Third Amended and Restated Note Purchase Agreement and Private Shelf Agreement dated as of September 14, 2016, among the Company and the holders of the notes issued thereunder, as amended; and (ii) the Note Purchase Agreement dated December 21, 2016 among the Company and the holders of the notes issued thereunder, in each case as amended prior to such date.
10
The 2021 Note Amendments amended certain covenants and other terms, including (i) eliminating the Leverage Relief Period and associated quarterly interest enhancement payments; (ii) removing certain other fees and increases to interest rate; (iii) reducing the maximum permitted consolidated leverage ratio to
Debt Security and Guarantees: All of the debt of the Company and MatNav, including related guarantees, as of March 31, 2021 was unsecured, except for the Title XI debt.
Debt Maturities: As of March 31, 2021, debt maturities during the next five years and thereafter are as follows:
As of | |||
Year (in millions) |
| March 31, 2021 | |
Remainder of 2021 | $ | | |
2022 |
| | |
2023 |
| | |
2024 |
| | |
2025 |
| | |
Thereafter |
| | |
Total Debt | $ | |
7. LEASES
The Company’s leases are described in Note 9 to the Consolidated Financial Statements included in Part II, Item 8 of the Company’s Annual Report on Form 10-K for the year ended December 31, 2020.
Components of Lease Cost: Components of lease cost recorded in the Company’s Condensed Consolidated Statement of Income and Comprehensive Income for the three months ended March 31, 2021 and 2020 consisted of the following:
Three Months Ended | ||||||
March 31, | ||||||
(In millions) |
| 2021 | 2020 | |||
Operating lease cost | $ | | $ | | ||
Short-term lease cost |
| |
| | ||
Variable lease cost |
| |
| | ||
Total lease cost | $ | | $ | |
Sale and Leaseback of Equipment: There were
11
8. ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS)
Changes in accumulated other comprehensive income (loss) by component, net of tax, for the three months ended March 31, 2021 are as follows:
Accumulated | ||||||||||||||||
Post- | Non- | Other | ||||||||||||||
Pension | Retirement | Qualified | Comprehensive | |||||||||||||
(In millions) |
| Benefits |
| Benefits |
| Plans |
| Other |
| Income (Loss) |
| |||||
Balance at December 31, 2020 | $ | ( | $ | | $ | ( | $ | ( | $ | ( | ||||||
Amortization of prior service cost | ( | ( | — | — | ( | |||||||||||
Amortization of net loss | | | | — | | |||||||||||
Foreign currency exchange | — | — | — | ( | ( | |||||||||||
Balance at March 31, 2021 | $ | ( | $ | | $ | ( | $ | ( | $ | ( |
Changes in accumulated other comprehensive income (loss) by component, net of tax, for the three months ended March 31, 2020 consisted of the following:
Accumulated | ||||||||||||||||
Post- | Non- | Other | ||||||||||||||
Pension | Retirement | Qualified | Comprehensive | |||||||||||||
(In millions) |
| Benefits |
| Benefits |
| Plans |
| Other |
| Income (Loss) |
| |||||
Balance at December 31, 2019 | $ | ( | $ | | $ | ( | $ | ( | $ | ( | ||||||
Amortization of prior service cost | ( | ( | ( | — | ( | |||||||||||
Amortization of net loss | | | | — | | |||||||||||
Foreign currency exchange | — | — | — | ( | ( | |||||||||||
Other adjustments | — | — | — | ( | ( | |||||||||||
Balance at March 31, 2020 | $ | ( | $ | | $ | ( | $ | ( | $ | ( |
9. FAIR VALUE OF FINANCIAL INSTRUMENTS
The Company values its financial instruments based on the fair value hierarchy of valuation techniques for fair value measurements. Level 1 inputs are unadjusted quoted prices in active markets for identical assets or liabilities at the measurement date. Level 2 inputs include quoted prices for similar assets and liabilities in active markets and inputs other than quoted prices observable for the asset or liability. Level 3 inputs are unobservable inputs for the asset or liability. If the technique used to measure fair value includes inputs from multiple levels of the fair value hierarchy, the lowest level of significant input determines the placement of the entire fair value measurement in the hierarchy.
The Company uses Level 1 inputs for the fair values of its cash, cash equivalents and restricted cash, and Level 2 inputs for its variable and fixed rate debt. The fair values of cash, cash equivalents and restricted cash, and variable rate debt approximate their carrying values due to the nature of the instruments. The fair value of fixed rate debt is calculated based upon interest rates available for debt with terms and maturities similar to the Company’s existing debt arrangements.
The carrying value and fair value of the Company’s financial instruments as of March 31, 2021 and December 31, 2020 are as follows: