SEC Filing | MATSON

View:

Download DOC

Download PDF

Download XLS

Download XBRL

Table of Contents

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-Q

☒

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

For the quarterly period ended September 30, 2023

☐

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

For the transition period from to

Commission file number 001-34187

Matson, Inc.

(Exact name of registrant as specified in its charter)


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

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

(808) 848-1211

(Registrant’s telephone number, including area code)

Not Applicable

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

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


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

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

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

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


Large accelerated filer ☒	Accelerated filer ☐

Non-accelerated filer ☐	Smaller reporting company ☐

	Emerging growth company ☐

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

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

Number of shares of common stock outstanding as of September 30, 2023: 34,934,880

Table of Contents

MATSON, INC. AND SUBSIDIARIES

TABLE OF CONTENTS

		Page
Part I—FINANCIAL INFORMATION		1

Item 1.	Financial Statements (Unaudited)	1
	Condensed Consolidated Statements of Income and Comprehensive Income	1
	Condensed Consolidated Balance Sheets	2
	Condensed Consolidated Statements of Cash Flows	3
	Condensed Consolidated Statements of Shareholders’ Equity	4
	Notes to the Condensed Consolidated Financial Statements	5
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	15
Item 3.	Quantitative and Qualitative Disclosures about Market Risk	23
Item 4.	Controls and Procedures	23

Part II—OTHER INFORMATION		24

Item 1.	Legal Proceedings	24
Item 1A.	Risk Factors	24
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	24
Item 3.	Defaults Upon Senior Securities	24
Item 4.	Mine Safety Disclosures	24
Item 5.	Other Information	25
Item 6.	Exhibits	26
	Signatures	27

Table of Contents

PART I. FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

MATSON, INC. AND SUBSIDIARIES

Condensed Consolidated Statements of Income and Comprehensive Income

(Unaudited)


	Three Months Ended				Nine Months Ended
	September 30,				September 30,
(In millions, except per share amounts)	2023		2022		2023		2022
Operating Revenue:
Ocean Transportation	$	669.4	$	918.5	$	1,837.3	$	2,911.6
Logistics		158.1		196.3		468.4		629.8
Total Operating Revenue		827.5		1,114.8		2,305.7		3,541.4

Costs and Expenses:
Operating costs		(624.1)		(738.4)		(1,826.3)		(2,170.5)
Income (Loss) from SSAT		1.3		23.4		(1.9)		82.1
Selling, general and administrative		(72.6)		(64.5)		(210.0)		(192.0)
Total Costs and Expenses		(695.4)		(779.5)		(2,038.2)		(2,280.4)

Operating Income		132.1		335.3		267.5		1,261.0
Interest income		9.3		1.3		26.2		1.3
Interest expense		(2.4)		(5.0)		(9.8)		(14.3)
Other income (expense), net		1.2		2.5		4.8		6.3
Income before Taxes		140.2		334.1		288.7		1,254.3
Income taxes		(20.3)		(68.1)		(54.0)		(268.4)
Net Income	$	119.9	$	266.0	$	234.7	$	985.9

Other Comprehensive Income (Loss), Net of Income Taxes:
Net Income	$	119.9	$	266.0	$	234.7	$	985.9
Other Comprehensive Income (Loss):
Net change in pension and post-retirement liabilities		(0.8)		(0.7)		(2.5)		0.3
Other adjustments		(0.6)		(1.9)		0.1		(3.5)
Total Other Comprehensive Income (Loss), Net of Income Taxes		(1.4)		(2.6)		(2.4)		(3.2)
Comprehensive Income	$	118.5	$	263.4	$	232.3	$	982.7

Basic Earnings Per Share	$	3.42	$	6.95	$	6.59	$	24.83
Diluted Earnings Per Share	$	3.40	$	6.89	$	6.56	$	24.65

Weighted Average Number of Shares Outstanding:
Basic		35.1		38.3		35.6		39.7
Diluted		35.3		38.6		35.8		40.0

See Notes to Condensed Consolidated Financial Statements.

Table of Contents

MATSON, INC. AND SUBSIDIARIES

Condensed Consolidated Balance Sheets

(Unaudited)


	September 30,		December 31,
(In millions)	2023		2022
ASSETS
Current Assets:
Cash and cash equivalents	$	156.5	$	249.8
Accounts receivable, net of allowance for credit losses of $11.4 million and $13.0 million, respectively		305.2		268.5
Prepaid expenses and other assets		174.1		241.3
Total current assets		635.8		759.6
Long-term Assets:
Investment in SSAT		81.4		81.2
Property and equipment, net		2,058.5		1,962.5
Operating lease right of use assets		306.2		396.9
Goodwill		327.8		327.8
Intangible assets, net		180.8		174.9
Capital Construction Fund		591.6		518.2
Deferred dry-docking costs, net		56.7		55.3
Other long-term assets		54.0		53.6
Total long-term assets		3,657.0		3,570.4
Total Assets	$	4,292.8	$	4,330.0

LIABILITIES AND SHAREHOLDERS’ EQUITY
Current Liabilities:
Current portion of debt	$	39.7	$	76.9
Accounts payable and accruals		293.8		255.6
Operating lease liabilities		127.7		143.6
Other liabilities		109.4		105.5
Total current liabilities		570.6		581.6
Long-term Liabilities:
Long-term debt, net of deferred loan fees		398.7		427.7
Long-term operating lease liabilities		186.1		262.5
Deferred income taxes		639.3		646.5
Other long-term liabilities		107.8		114.8
Total long-term liabilities		1,331.9		1,451.5
Commitments and Contingencies (see Note 13)
Shareholders’ Equity:
Common stock		26.2		27.2
Additional paid in capital		289.1		290.4
Accumulated other comprehensive loss, net		(9.3)		(6.9)
Retained earnings		2,084.3		1,986.2
Total shareholders’ equity		2,390.3		2,296.9
Total Liabilities and Shareholders’ Equity	$	4,292.8	$	4,330.0

See Notes to Condensed Consolidated Financial Statements.

Table of Contents

MATSON, INC. AND SUBSIDIARIES

Condensed Consolidated Statements of Cash Flows

(Unaudited)


	Nine Months Ended September 30,
(In millions)	2023		2022
Cash Flows From Operating Activities:
Net income	$	234.7	$	985.9
Reconciling adjustments:
Depreciation and amortization		108.1		105.6
Amortization of operating lease right of use assets		108.2		113.9
Deferred income taxes		(9.3)		146.3
Share-based compensation expense		17.6		15.5
Loss (income) from SSAT		1.9		(82.1)
Distributions from SSAT		—		40.3
Other		(1.7)		(0.2)
Changes in assets and liabilities:
Accounts receivable, net		(37.1)		13.9
Deferred dry-docking payments		(17.3)		(16.7)
Deferred dry-docking amortization		18.6		18.6
Prepaid expenses and other assets		65.8		(110.2)
Accounts payable, accruals and other liabilities		34.4		(5.0)
Operating lease liabilities		(109.9)		(113.8)
Other long-term liabilities		(14.9)		(9.5)
Net cash provided by operating activities		399.1		1,102.5

Cash Flows From Investing Activities:
Capitalized vessel construction expenditures		(52.1)		(11.9)
Other capital expenditures		(135.4)		(113.4)
Proceeds from disposal of property and equipment, net		0.1		0.4
Payment for intangible asset acquisition		(12.4)		(3.0)
Cash deposits and interest into the Capital Construction Fund		(120.8)		(579.7)
Withdrawals from Capital Construction Fund		49.9		14.7
Net cash used in investing activities		(270.7)		(692.9)

Cash Flows From Financing Activities:
Repayments of debt		(67.2)		(97.2)
Dividends paid		(33.8)		(36.9)
Repurchase of Matson common stock		(108.2)		(296.9)
Tax withholding related to net share settlements of restricted stock units		(12.5)		(19.6)
Net cash used in financing activities		(221.7)		(450.6)

Net Decrease in Cash, Cash Equivalents and Restricted Cash		(93.3)		(41.0)
Cash, Cash Equivalents and Restricted Cash, Beginning of the Period		253.7		287.7
Cash, Cash Equivalents and Restricted Cash, End of the Period	$	160.4	$	246.7

Reconciliation of Cash, Cash Equivalents and Restricted Cash, End of the Period:
Cash and Cash Equivalents	$	156.5	$	242.8
Restricted Cash		3.9		3.9
Total Cash, Cash Equivalents and Restricted Cash, End of the Period	$	160.4	$	246.7

Supplemental Cash Flow Information:
Interest paid, net of capitalized interest (including debt prepaid fees)	$	9.6	$	13.6
Income tax payments (refunds), net	$	(5.3)	$	212.4

Non-cash Information:
Capital expenditures included in accounts payable, accruals and other liabilities	$	7.8	$	3.9
Non-cash payment for intangible asset acquisition	$	4.1	$	2.2

See Notes to Condensed Consolidated Financial Statements.

Table of Contents

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, 2022	36.3	$	27.2	$	290.4	$	(6.9)	$	1,986.2	$	2,296.9
Net income	—		—		—		—		34.0		34.0
Other comprehensive income (loss), net of tax	—		—		—		0.6		—		0.6
Share-based compensation	—		—		4.6		—		—		4.6
Shares issued, net of shares withheld for employee taxes	0.3		0.2		(12.6)		—		—		(12.4)
Shares repurchased	(0.7)		(0.5)		(2.7)		—		(38.9)		(42.1)
Dividends ($0.31 per share)	—		—		—		—		(11.3)		(11.3)
Balance at March 31, 2023	35.9		26.9		279.7		(6.3)		1,970.0		2,270.3
Net income	—		—		—		—		80.8		80.8
Other comprehensive income (loss), net of tax	—		—		—		(1.6)		—		(1.6)
Share-based compensation	—		—		5.2		—		—		5.2
Shares issued, net of shares withheld for employee taxes	—		—		0.1		—		—		0.1
Shares repurchased	(0.6)		(0.6)		(2.3)		—		(39.5)		(42.4)
Dividends ($0.31 per share and $0.32 per share)	—		—		—		—		(22.4)		(22.4)
Balance at June 30, 2023	35.3		26.3		282.7		(7.9)		1,988.9		2,290.0
Net income	—		—		—		—		119.9		119.9
Other comprehensive income (loss), net of tax	—		—		—		(1.4)		—		(1.4)
Share-based compensation	—		—		7.8		—		—		7.8
Shares issued, net of shares withheld for employee taxes	—		—		(0.2)		—		—		(0.2)
Shares repurchased	(0.4)		(0.1)		(1.2)		—		(24.5)		(25.8)
Balance at September 30, 2023	34.9	$	26.2	$	289.1	$	(9.3)	$	2,084.3	$	2,390.3


						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, 2021	41.0	$	30.7	$	314.1	$	(30.9)	$	1,353.5	$	1,667.4
Net income	—		—		—		—		339.2		339.2
Other comprehensive income (loss), net of tax	—		—		—		0.2		—		0.2
Share-based compensation	—		—		4.7		—		—		4.7
Shares issued, net of shares withheld for employee taxes	0.2		0.2		(19.5)		—		—		(19.3)
Shares repurchased	(0.7)		(0.5)		(3.1)		—		(65.0)		(68.6)
Dividends ($0.30 per share)	—		—		—		—		(12.9)		(12.9)
Balance at March 31, 2022	40.5		30.4		296.2		(30.7)		1,614.8		1,910.7
Net income	—		—		—		—		380.7		380.7
Other comprehensive income (loss), net of tax	—		—		—		(0.8)		—		(0.8)
Share-based compensation	—		—		5.7		—		—		5.7
Shares issued, net of shares withheld for employee taxes	0.1		—		(0.2)		—		—		(0.2)
Shares repurchased	(1.6)		(1.2)		(7.0)		—		(129.9)		(138.1)
Dividends ($0.30 per share and $0.31 per share)	—		—		—		—		(24.4)		(24.4)
Balance at June 30, 2022	39.0		29.2		294.7		(31.5)		1,841.2		2,133.6
Net income	—		—		—		—		266.0		266.0
Other comprehensive income (loss), net of tax	—		—		—		(2.6)		—		(2.6)
Share-based compensation	—		—		5.1		—		—		5.1
Equity interest in SSAT	—		—		—		—		(15.5)		(15.5)
Shares repurchased	(1.2)		(0.9)		(9.4)		—		(77.7)		(88.0)
Balance at September 30, 2022	37.8	$	28.3	$	290.4	$	(34.1)	$	2,014.0	$	2,298.6

See Notes to Condensed Consolidated Financial Statements.

Table of Contents

MATSON, INC. AND SUBSIDIARIES

NOTES TO THE CONDENSED CONSOLIDATED FINANICAL STATEMENTS

(Unaudited)

1. DESCRIPTION OF THE BUSINESS

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

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

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

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

2. GENERAL AND SIGNIFICANT ACCOUNTING POLICIES

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

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

The Condensed Consolidated Financial Statements should be read in conjunction with the Consolidated Financial Statements and notes thereto included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2022, filed with the Securities and Exchange Commission (“SEC”) on February 24, 2023.

Table of Contents

Fiscal Period: The period end for Matson covered by this report is September 30, 2023. The period end for MatNav and its subsidiaries covered by this report is September 29, 2023.

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, 2022.

Use of Estimates: The preparation of the interim Condensed Consolidated Financial Statements in conformity with accounting principles generally accepted in the U.S. requires management to make estimates and assumptions that affect the amounts reported. Estimates and assumptions are used for, but not limited to: impairment of investments; impairment of long-lived assets, intangible assets and goodwill; capitalized interest; allowance for doubtful accounts and other receivables; legal contingencies; insurance reserves and other related liabilities; accrual estimates; pension and post-retirement estimates; multi-employer withdrawal liabilities; operating lease assets and liabilities; income (loss) from SSAT; and income taxes. Future results could be materially affected if actual results differ from these estimates and assumptions.

Prepaid Expenses and Other Assets: Prepaid expenses and other assets consisted of the following at September 30, 2023 and December 31, 2022:


	September 30,		December 31,
Prepaid Expenses and Other Assets (in millions)	2023		2022
Income tax receivables, net	$	105.2	$	170.8
Prepaid fuel		26.7		26.3
Prepaid insurance and insurance related receivables		16.9		17.4
Prepaid operating expenses		8.3		9.0
Prepaid leases		5.4		4.8
Restricted cash - vessel construction obligations		3.9		3.9
Other		7.7		9.1
Total	$	174.1	$	241.3

Income tax receivables include an expected federal income tax refund related to the Company’s 2021 federal tax return and other income tax receivables, offset by current federal income tax payables.

Recognition of Revenues and Expenses: Revenue in the Company’s Condensed Consolidated Financial Statements is presented net of elimination of intercompany transactions. The following is a description of the Company’s principal revenue generating activities by segment, and the Company’s revenue recognition policy for each activity for the periods presented:


	Three Months Ended				Nine Months Ended
	September 30,				September 30,
Ocean Transportation (in millions) (1)	2023		2022		2023		2022
Ocean Transportation services	$	654.3	$	908.4	$	1,799.6	$	2,885.3
Terminal and other related services		10.8		5.4		24.3		13.8
Fuel sales		2.7		3.2		8.4		7.9
Vessel management and related services		1.6		1.5		5.0		4.6
Total	$	669.4	$	918.5	$	1,837.3	$	2,911.6

(1)	Ocean Transportation revenue transactions are primarily denominated in U.S. dollars except for less than 3 percent of Ocean Transportation revenues which are denominated in foreign currencies.

◾

Ocean Transportation services revenue is recognized ratably over the duration of a voyage based on the relative transit time completed in each reporting period. Vessel operating costs and other ocean transportation operating costs, such as terminal operating overhead and 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.

Table of Contents


	Three Months Ended				Nine Months Ended
	September 30,				September 30,
Logistics (in millions) (1)	2023		2022		2023		2022
Transportation Brokerage and Freight Forwarding services	$	138.6	$	169.2	$	415.8	$	548.5
Warehousing and distribution services		11.9		15.5		31.5		41.4
Supply chain management and other services		7.6		11.6		21.1		39.9
Total	$	158.1	$	196.3	$	468.4	$	629.8

(1)	Logistics revenue transactions are primarily denominated in U.S. dollars except for less than 3 percent of Logistics revenues which are denominated in foreign currencies.

◾

Transportation Brokerage and Freight Forwarding services revenue consists of amounts billed to customers for services provided. The primary costs include third-party purchased transportation services, agent commissions, labor and equipment. Revenue and the related purchased third-party transportation costs are recognized over the duration of a delivery based upon the relative transit time completed in each reporting period. Labor, agent commissions, and other operating costs are expensed as incurred. The Company reports revenue on a gross basis as the Company serves as the principal in these transactions because it is responsible for fulfilling the contractual arrangements with the customer and has latitude in establishing prices.

◾

Warehousing 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 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 administrative 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, 2022. A summary of the CCF cash account for the nine months ended September 30, 2023 and 2022 consisted of the following:


	Nine Months Ended
	September 30,
(In millions)	2023		2022
CCF balance at beginning of period	$	518.2	$	—
Cash deposits into CCF		100.0		579.7
Interest earned on deposits		23.3		—
Qualifying withdrawal payments		(49.9)		(14.7)
CCF balance at end of period	$	591.6	$	565.0

The Company had $591.6 million and $518.2 million on deposit in the CCF as of September 30, 2023, and December 31, 2022, respectively. Cash on deposit in the CCF is invested in a U.S. Treasury obligations fund with daily liquidity. At September 30, 2023, securities held within this fund had a weighted average life of 44 days. Cash on deposit in the CCF is classified as a long-term asset on the Company’s Condensed Consolidated Balance Sheets, as the Company intends to use withdrawals to fund qualified milestone progress payments for the construction of three new Jones Act vessels.

During the nine months ended September 30, 2023, the Company pledged $200.0 million of accounts receivable into the CCF. There were no pledged amounts during the nine months ended September 30, 2022. As of September 30, 2023 and December 31, 2022, $213.2 million and $9.9 million of eligible accounts receivable were assigned to the CCF, respectively. Due to the nature of the assignment of eligible accounts receivable into the CCF, such assigned amounts are classified as part of accounts receivable in the Condensed Consolidated Balance Sheets.

Table of Contents

Investment in SSAT: Condensed income statement information for SSAT for the three and nine months ended September 30, 2023 and 2022 consisted of the following:


	Three Months Ended				Nine Months Ended
	September 30,				September 30,
(In millions)	2023		2022		2023		2022
Operating revenue	$	268.4	$	369.8	$	742.1	$	1,191.3
Operating costs and expenses		(269.4)		(286.9)		(754.2)		(894.3)
Operating (loss) income		(1.0)