MATX 10-K & 10-Q changes, risk factors and insider trading

The following material risks, events and uncertainties may make an investment in the Company speculative or risky and should be reviewed carefully. The Company faces the material risks set forth below; however, the description below does not purport to include all risks the Company faces, and additional risks or uncertainties that are currently unknown or are not currently believed to be material may occur or become material. Moreover, some of the factors, events and contingencies discussed below may have occurred in the past, but the disclosures below are not representations as to whether or not the factors, events or contingencies have occurred in the past, and instead reflect our beliefs and opinions as to the factors, events, or contingencies that could materially and adversely affect us in the future. The occurrence of these or the risks and uncertainties described below may, in ways the Company may not be able to accurately predict, recognize or mitigate, adversely affect the Company’s business, competitive environment, strategy, financial condition, operatingresults results,of operations, cash flows,flow, liquidity, demand, revenue, growth, prospects, reputation or stock price. All forward-looking statements made in this Form 10-K are qualified by the risks and uncertainties described below.

Repeal, invalidation, substantial amendment, or waiver of the Jones Act or changes in its application would have an adverse effect on the Company’s business.

The Merchant Marine Act of 1920 (commonly referred to as the Jones Act) regulates all interstate and intrastate marine commerce within the U.S. From time to time, various interests have sought to repeal, amend or waive the Jones Act. For example, in February 2025, a lawsuit was filed in the U.S. District Court for the District of Columbia challenging the Jones Act, arguing that it violates the Port Preference Clause of the U.S. Constitution; the Company has intervened in this lawsuit and believes this lawsuit is without merit. If the Jones Act were to be repealed, invalidated, substantially amended or waived and, as a consequence, competitors were to enter the Hawaii or Alaska markets with lower operating costs by utilizing their ability to acquire and operate foreign-flagged and foreign-built vessels and/or being exempt from other U.S. regulations, the Company’s business would be adversely affected. In addition, the Company’s position as a U.S. citizen operator of Jones Act vessels would be negatively impacted if periodic efforts and attempts by foreign interests, including recent campaigns by foreign governments, to circumvent or repeal certain aspects of the Jones Act were successful. If maritime cabotage services were included in the General Agreement on Trade in Services, the United States-Mexico-Canada Agreement, or other international trade agreements, or if the restrictions contained in the Jones Act were otherwise altered, the shipping of cargo between covered U.S. ports could be opened to foreign-flagged or foreign-built vessels, which could have other adverse impacts to our business.

Changes in macroeconomic conditions, geopolitical developments, or governmental policies, including due to outbreaks of disease,policies have affected and could in the future affect the Company.

The transportation industry in which the Company operates has been and could in the future be impacted by macroeconomic fluctuations, volatility, downturns, inflation, recessions, interest rates and other economic shifts or market instabilities, including due to outbreaks of disease and instability in financial institutions, as well as the development of and changes in governmental policies, relations, priorities and budgeting constraints, and uncertainties resulting from the U.S. political environment, including increased political polarization and the potential for political gridlock (such as the prospect of a shutdown of the U.S. federal government), and geopolitical developments across the jurisdictions in which it operates. For example, there have been increases in geopolitical and trade tensions among a number of the world’s major economies.economies, including the United States’ imposition of tariffs and the imposition by other countries of new or increased tariffs. These tensions have resulted in themeasures risingby threat,governments, implementationincluding or increase ofreciprocal tariffs, port entry fees, non-tariff trade barriersbarriers, and sanctions, including the use of export control restrictions and sanctions against certain countries and individual companies,companies. whichIn the past, the U.S. Trade Representative has imposed entry fees on certain Chinese-owned, -operated, or -built vessels entering U.S. ports and additional duties on cranes, certain chassis and spare parts. China has also imposed port entry fees on certain U.S.-owned or operated, or U.S.-flagged vessels entering Chinese ports. These actions and uncertainty regarding domestic and foreign tariff policy, including uncertainty associated with the scope, level, magnitude, duration and product range of tariffs, have, and may continue to have, an adverse economic impact in the markets in which the Company operates and could result in a reduced demand for the Company’s services.

These adverse economic conditions maycan also impact the Company’s customers’ business levels and needs. Within the U.S., a weakening of economic drivers in Hawaii, Alaska or Guam, which include tourism, military spending, construction, personal income growth and employment, the weakening of consumer confidence, market demand, the economy in the U.S. Mainland, inflation, interest rates, recession, increased political polarization and the potential for political gridlock (such as the prospect of a shutdown of the U.S. federal government),gridlock, and the effect of a change in the strength of the U.S. dollar against other foreign currencies has reduced and could in the future reduce the demand for goods, adversely affecting inland and ocean transportation volumesvolume or rates. In addition, overcapacity in the global or transpacific ocean transportation markets, a change in the cost of goods or currency exchange rates, pressure from U.S. or foreign governments, impositionand of or increaseschanges in tariffs and uncertainties regarding tariff policies or other changes in international trade policies and related uncertainties could adversely affect freight volumesvolume and rates in the Company’s China services. Additionally, fluctuations in the price of oil could further impact the Alaskan economy, which in turn could impact the Company’s business.

The Company has faced and may continue to face new competition by established or start-up shipping operators that enter into the Company’s markets. The shipping industry is competitive with limited barriers to entry. Ocean carriers can shift vessels in and out of tradelanes or charter vessels to manage capacity and meet customer demands. The Company also competes with air freight carrierscarriers, some of which are able to offer more attractive schedules and services, or to increase capacity. The entry of a new competitor or the addition of new vessels or capacity by existing competitors on any of the Company’s existing routes could result in a significant increase in available shipping capacity that could have an adverse effect on the Company’s volumesvolume and rates.

The Company’s businesses are dependent upon key vendors who provide terminal, rail, truck, agent and ocean transportation services. Service structures and relationships with these parties are important in the Company’s intermodal business, as well as in the China, Guam, Micronesia, Japan, Alaska export and South Pacific services. If the Company cannot reliably secure sufficient transportation equipment, capacity or services from these third parties at reasonable prices or rates to meet its or its customers’ needs and schedules, or if there are changes to the costs of such services, customers may seek to have their transportation and logistics needs met by others on a temporary or permanent basis. If this were to occur, the Company’s business, financial condition, results of operations and financialcash conditionflow could be adversely affected. The loss of or damage to any of these key relationships may also adversely affect the Company’s business and revenue.

Fuel, including LNG fuels and biofuels, is a significant operating expense for the Company’s Ocean Transportation business. The price and supply of fuel are difficult to predict and fluctuate based on events beyond the Company’s control, including impacts from global macroeconomic conditionsconditions, geopolitical events and geopoliticalgovernmental events.policies. Increases in the price of fuel may adversely affect the Company’s results of operations. Any such increases also can lead to increases in other expenses, such as energy costs and costs to purchase outside transportation services. In the Company’s Ocean Transportation and Logistics services segments, the Company utilizes fuel-related surcharges, although increases in the fuel-related surcharges may adversely affect the Company’s competitive position and may not correspond exactly with the timing of increases in fuel expense. Changes in the Company’s ability to collect fuel-related surcharges, including recovery of all or most fuel-related expenses, also may adversely affect its results of operations.

The SEC, the state of California, and otherCertain regulators, investors, advisory firms, employees, customers, suppliers, governments and certain other stakeholders arehave increasinglyincreased focusedtheir onfocus and havescrutiny established regulations and expectations related toon sustainability matters and related corporate practices, disclosures and initiatives. These evolvingEvolving regulations in certain of the jurisdictions in which the Company operates and stakeholder expectations may impact the Company’s reputation, business and attractiveness as an investment, employer or business partner to the extent the Company – including its initiatives, goals and reporting – fails to satisfy or is perceived to fail to satisfy those regulations and expectations, including as a result of any third-party rating or assessment. The adoption and expansion of related legislation and regulations have also resulted and may again result in increased capital expenditures and compliance, operational and other costs to the Company. For example, the state of California has adopted greenhouse gas and climate change disclosure requirements. Compliance with suchthese rules and regulations could require significant effort and resources and result in changes to the Company’s current GHG emission reduction goals.

The Company’s public disclosures on its climate, sustainability, human capitalsustainability and otherrelated initiatives include its goals or expectations with respect to those matters, including GHG emission reduction targets. These disclosures are aspirational and based on standards and frameworks for presenting and measuring progress that are not harmonized and are still developing, assumptions that may change, disclosure controls and procedures that continue to evolve, and withtechnological, respectpolicy and other progress and changes outside of our control (particularly those relating to our GHG emissions targets, dependent in part on the industry’s successful and timely development of alternative fuels and technologies.). The Company’s useuse, interpretation or application of disclosure frameworks and standards, and the interpretation or application of those frameworks and standards,standards may change from time to time or differ from those of others. This may result in a lack of consistent or meaningful comparative data from period to period or between the Company and other companies in the same industry. The Company’s sustainability initiatives and goalsgoals, including human capital practices, may not besatisfy favored by certainall stakeholders and could impact the attraction and retention of investors, customers and employees, legal enforcement or reputation risk, as well as the Company’s willingness to do business with other companies or customers or their willingness to do business with the Company. Efforts to achieve or accurately track the Company’s initiatives and goals face numerous risks and may be untimely, be unsuccessful, result in additional costs or experience delays, and as a result may have an adverse impact on the Company, including its brand, reputation, financial performance and growth and stock price, and may expose the Company to increased scrutiny from the investment community as well as enforcement authorities.

The Company may not be timely or successful in completing its fleet upgrade initiatives, which may result in significant costs and adversely impact the Company’s ability to meet its climateemission reduction goals.

The Company’s four commissioned Aloha and Kanaloa class vessels include dual fuel capable engines that can run on low sulfur fuel oil or LNG. The Company has completed the installation of tanks, piping and cryogenic equipment on its two Aloha class vessels, Daniel K. Inouye and Kaimana HilaHila, and re-engined Manukai to operate on LNG. In addition, construction has begun on three new LNG-ready Aloha Class vessels. The Company has made and anticipates making significant capital expenditures in connection with these fleet initiatives. AdditionalThe Company may incur additional operating costs may be incurred to the extent use of LNG presents new maintenance requirements or unforeseen complications.

On November 1, 2022, MatNav and Philly Shipyard entered into vessel construction agreements pursuant to which Philly Shipyard will construct three new 3,600-TEU3,400-TEU Aloha Class dual-fuel capable containerships, with expected delivery dates during the first quarter 2027, the third quarter 2027 and the second quarter 2028. Failure of any party to the vessel construction agreements to fulfill its obligations under the agreements could have an adverse effect on the Company’s financial positioncondition and results of operations. Such a failure could happen for a variety of reasons, including but not limited to (i) delivery delays, (ii) delivery of vessels that fail to meet any of the required operating specifications (for example, capacity, fuel efficiency or speed), (iii) events in South Korea that prevent one or more significant subcontractors to Philly Shipyard from performing, (iv) loss of key personnel at either Philly Shipyard or any of its subcontractors, (v) work stoppages or other labor disruptions that may occur as a result of the failure of Philly Shipyard to negotiate collective bargaining agreements with its unions, (vi) the insolvency of, or the refusal or inability to perform for any reason, by Philly Shipyard or any of its subcontractors, (vii) the ability of Hanwha Ocean and Hanwha Systems (collectively, “Hanwha”) to integrate Philly Shipyard successfully into their global operations following Hanwha’s acquisition of Philly Shipyard,operations, or (viii) delays in the construction of vessels scheduled to be completed before the Company’s vessels. Significant delays in the delivery of the new vessels could limit our ability to replace aging vessels in the Alaska service without substantial modifications and delay the Company’s ability to upsize the CLX service, which could also have an adverse impact on ourthe businessCompany’s plans,business, financial condition andcondition, results of operations.operations and cash flow.

The Company’s operations are susceptible to weather, natural disasters, risks arising from climate change, maritime accidents, spill events and other physical and operating risks.

As a maritime transportation company, the Company’s operations are vulnerable to delay, disruptions and loss of life and property as a result of weather, natural disasters, bad weather at sea (including increased storm severity), lightning strikes, wildfires, heat waves, lava flows, hurricanes, typhoons, tsunamis, droughts, windstorms, floods and earthquakes. The Company’s operations are also vulnerable to risks related to the operation of ocean-going vessels, including risks of potential marine accidents, or disasters, including grounding, fires, explosions, collisions, mechanical failures, human error, maintenance issues, latent defects, oil or other spill or environmental accidents, whale strikes, war, terrorism and piracy, lost or damaged cargo, delays, injury and loss of life. These risks could be exacerbated by severe weather or other climate-driven events. Changing macroeconomic and geopolitical conditions, including geopolitical conflict, may also result in increased attacks on vessels, piracy or terrorism.

Such events could interfere with the Company’s ability to provide on-time scheduled service, require evacuation of personnel or stoppage of services, or impact the Company’s customer’s operations, resulting in increased expenses and potential loss of business associated with such events. In addition, severe weather and natural disasters can result in interference with the Company’s or its partners’ terminal operations. These impacts could be particularly acute in Hawaii and Alaska given the local economies’ dependence on these ports for ocean cargo, and in ports such as Dutch Harbor and Kodiak, Alaska where the Company is dependent on a single crane. The occurrence of any of these events may result in damage to or loss of terminals, port facilities and infrastructure, cranes, vessels, containers, cargo and other equipment, increased maintenance expense, loss of life or physical injury to its employees or people, pollution, or the slow down or suspension of operations. For example, damage to the Company’s vessels could require repair at a dry-docking facility. The costs of repairs may be substantial which may adversely affect the Company’s businessbusiness, financial condition, results of operation and financialcash condition.flow. Further, the Company may be unable to find space at a suitable dry-docking facility, the vessels may be forced to wait for space or be towed to a different facility, all of which could result in additional expenses and delays, and may adversely affect the Company’s business. These events can also expose the Company to reputational harm and liability for resulting damages, including for loss of life and property, and possible penalties that, pursuant to typical maritime industry policies, it must pay and then seek reimbursement from its insurer. Affected vessels may also be removed from service and thus would be unavailable for income-generating activity.

There is no assurance that our efforts to mitigate the impact of these risks, including from severe weather or other climate-driven events on our operations, will be effective. Although we take measures that we believe are reasonable to mitigate these risks, it is not practicable to eliminate such risks altogether. The Company’s casualty and liability insurance policies are generally subject to large retentions and deductibles and may not cover all losses the Company may incur. Some types of losses, such as losses resulting from a port blockage, generally are not insured. In some cases, the Company retains the entire risk of loss because it is not economically prudent to purchase insurance coverage or because of the perceived remoteness of the risk. Other risks are uninsured because insurance coverage may not be commercially available. Finally, the Company retains all risk of loss that exceeds the limits of its insurance.

In addition, compliance with climate change requirements or regulations such as the IMO’s CII requirements, or any amendments, modifications or changes in the interpretation, application or enforcement of any such requirements or regulations, may create schedule disruptions and could require Matson’s fleet to slow down if efficiency improvements or transitions to alternative fuels together are not enough to reduce GHG emissions sufficiently, thus impacting Matson’s expedited business model and competitive advantage.

New environmental requirements for vessel performance and operation could also require the Company to accelerate the building of new vessels, increase the construction costs for new vessels and equipment to accommodate even newer technology as it emerges while today’s technology becomes obsolete, initiate unexpected retrofit projects for existing vessels, retire older vessels earlier than expected, or render reserve vessels unusable. If these outcomes were to occur, the Company’s business, financial condition, results of operations,operations and cash flows and financial conditionflow could be adversely affected.

The Company’s business has in the past, and could in the future, be impacted adversely by outbreaks of disease, the effects of public health epidemics, pandemics or other major heath crises (which the Company refers to collectively as public health crises), such as the COVID-19 pandemic. Actual or threatened public health crises can have a number of adverse impacts, including volatility in the global economy, impacts to the Company’s customers’ business operations, reduced tourism in the markets the Company serves, potential restrictions on employee travel, or significant disruptions in ocean-borne transportation of goods, logistics demand and supply chain activity, caused by a variety of factors such as quarantines, factory and office closures, port closures, or other government-imposed restrictions, any of which can adversely impact the Company’s business, financial condition, operatingresults resultsof operation and cash flows.flow.

The significant operating agreements and leases entered into by the Company in the course of its operations, including those related to terminals, chartered vessels, bonded and unbonded container yards, cross-dock facilities, warehouses and offices as well as those entered into with SSAT, expire at various points in time and may not be renewed/replaced with comparable assets with the specifications necessary for the Company’s or SSAT’s businesses or could be renewed/replaced on less favorable terms, if at all, thereby adversely affecting the Company’s futurebusiness, financial position,condition, results of operations and cash flows.flow.

The Company routinely engages shipyards to dry-dockdrydock its vessels for regulatory compliance and to provide repair and maintenance, and capital enhancements. Vessels may also have to be dry-dockeddrydocked or repaired at sea in the event of accidents or other unforeseen damage. Unexpected dry-dockings or repairs could require the Company to activate a reserve vessel, purchase additional fuel and operate a less-efficient, smaller vessel for a period of time. The Company also operates a number of older active and reserve vessels that may require more frequent and extensive maintenance. The cost of repairs is difficult to predict and can be substantial. In addition, the time when a vessel is out of service for maintenance is determined by a number of factors, including regulatory deadlines, market conditions, shipyard availability, shipyard location, availability of employees and repairmen, and customer requirements, and accordingly, the length of time that a vessel may be out of service may be longer than anticipated, which could adversely affect the Company’s business, financial condition, results of operations and cash flows.flow. The timing and expense required for repairs could be exacerbated by compliance with MARADthe U.S. Department of Transportation Maritime Administration and Jones Act requirements.

In addition, the Company relies on SSAT for its stevedoring services at the ports of Long Beach and Oakland, California and Tacoma, Washington on the U.S. West Coast. The Company could be adversely affected by any changes in the services provided or to the costs of such services provided by SSAT. Furthermore, the Company’s results of operations have been and may continue to be impacted by lower share of income from SSAT, including as a result of declines in lift volumesvolume due to reduced carrier volumesvolume into U.S. West Coast ports.ports or increases in SSAT’s operating costs.

The Company has completed the first phase of renovating and modernizing its Sand Island terminal in Honolulu Harbor. However, significant upgrades remain, including the long-term expansion program at the Sand Island terminal and projects to improve resiliency to risks from events such as severe weather,weather and natural disasters,disasters. seaWhile level rise and other climate-change related risks. The Company is continuing discussions with state and local authorities regarding a port modernization program for the Portreconstruction of Alaska. Significant upgrades to the terminal and port facilities at the Port of Alaska has begun, significant upgrades are needed to improve operational safety and efficiency, accommodate modern shipping operations, and improve resiliency, including to risks due to severe weather events,events and natural disasters and climate-change related risks.disasters. For example, the aging cranes and dock facilities of the port are increasingly exposed to the risk of failure due to corrosion, deterioration, and the loss of load-bearing capacity particularly in the event of extreme seismic events or other natural disasters. The Company has purchased three used utility-powered cranes for the new terminal to replace the aging cranes. Regulatory, construction or other delays or cost overruns related to the expansion and modernization of the terminals as well as delays or cost overruns related to the refurbishing, delivery and commissioning of the cranes, could have an adverse impact on the Company’s business plans, financial condition andcondition, results of operations.operations and cash flow. In addition, the terminal modernization programs may not result in improved operational productivity or improved resiliency to severe weather events, extreme seismic events or other natural disasters or generate expected returns.

The Company’s growth strategy includes expansion through acquisitions, including,but for example, the Company’s acquisitions of Horizon Lines, Inc. (“Horizon”) in 2015 and Span Alaska in 2016. Therethere is no assurance that the Company will be successful in identifying, negotiating or consummating any future acquisitions. Even if suitable candidates are identified, such transactions may result in regulatory scrutiny, litigation or difficulties assimilating acquired assets or companies, and may result in the diversion of the Company’s capital and its management attention from other business issues and opportunities. The Company may not be able to integrate companies that it acquires successfully, including their personnel, financial systems, distribution, operations and general operating procedures. The Company may also encounter challenges in achieving appropriate internal control over financial reporting in connection with the integration of an acquired company. The Company may pay a premium for an acquisition, resulting in goodwill that may later be determined to be impaired.

The Company’s investments in and efforts to manage its human capital and maintain a desirable workplace culture, including to create a safe and healthy work environment, and foster a rewarding workplace for employee development and advancement, may not be successful in identifying, attracting, developing, motivating, retaining, competing for or replacing qualified personnel. These efforts and the Company’s reputation may also be impacted by any failure or perceived failure to meet or timely progress on publicly disclosed human capital-related goals and initiatives, or to compare favorably with the progress or goals of its industry or peers.peers, and stakeholders may have differing views on these goals and initiatives.

The Company is highly dependent on the proper functioning of its information technology systems to enable operations and compete effectively. The Company regularly updates its information technology systems or implements new systems, which could cause substantial business interruption. There is no assurance that the systems upgrades or new systems will meet the Company’s current or future business needs, or that they will operate as designed. In addition, adoption of new and rapid changes in technology, such as the rise in artificial intelligence (“AI”) applications, may impact the transportation and logistics industry. If Matson does not appropriately adapt its operations to these new technologies as quickly or effectively as its competitors, the Company’s business could be adversely affected.

The shipping industry is a more frequent target of cyber attacks than some other industries because of the essential nature of these services. The Company relies extensively on its information technology systems and third-party service providers in many aspects of its business, including cloud services for accounting, billing, disbursement, cargo booking and tracking, vessel scheduling and stowage, equipment tracking, customer service, banking, payroll and employee communication systems. The Company also collects, stores and transmits sensitive data, including its proprietary business information and that of its customers, and personally identifiable information of its customers and employees. The Company’s practices, policies and other efforts, including as described in Part I, Item 1C of this Annual Report on Form 10-K,Report, may not be sufficient to prevent, detect or remediate all cybersecurity risks or other disruptions, and the Company and its service providers have in the past experienced and may in the future experience cybersecurity incidents, disruptions, threats and vulnerabilities such as malware (including computer viruses and ransomware), software bugs, denial-of-service (“DoS”) attacks, phishing, spoofing, deep fakes, identity-based attacks, code injection attacks, cyber terrorism, sabotage, circumvention of security systems (whether physical or virtual), malfeasance, breaches due to employee error, natural disasters, accidents, power disruptions or loss, telecommunications failure, unauthorized access or other catastrophic events or failures at the Company’s facilities, aboard its vessels or at third-party locations. In addition, as AI capabilities improve and are increasingly adopted, cybersecurity attacks perpetrated through the use of AI may proliferate, leading to an increase in the frequency, speed, scale and automation of such attacks.

Deterioration in the Company’s credit profile may have an adverse effect on the Company’s ability to access the private or public debt markets and also may increase its borrowing costs. If the Company’s credit profile deteriorates significantly, its access to the debt capital markets or its ability to renew its revolving credit facility and other committed lines of credit may become restricted, or the Company may not be able to refinance debt at the same levels or on the same terms. Because the Company relies on its ability to draw on its revolving credit facility to support its operations when required, any volatility or disruption in the credit and financial markets or other development that prevents the Company from accessing funds (for example, a lender that does not fulfill its lending obligation) or renewing its revolving credit facility could have an adverse effect on the Company’s financial conditioncondition, results of operation and cash flows.flow. Additionally, the Company’s credit agreements generally include an increase in borrowing rates if the Company’s credit profile deteriorates. Furthermore, the Company incurs interest under its revolving credit facility based on floating rates. Floating rate debt creates higher debt service requirements as market interest rates increase, as was the case in connection with the U.S. Federal Reserve’s interest rate increases in 2022 and 2023, and high interest rates can adversely affect the Company’s cash flow and results of operations. Disruptions to the credit markets as a result of macroeconomic, geopolitical, or financial market developments could increase the Company’s cost of capital and limit the Company’s access to capital.

The Company’s credit facilities contain certain restrictive financial covenants, the most restrictive of which include a maximum ratio of debt to earnings before interest, taxes, depreciation and amortization (“EBITDA”), a minimum ratio of EBITDA to interest expense,and certain prohibitionslimitations on additional priority debt and the maintenance of minimum shareholders’ equity.debt. If the Company does not maintain these and other required covenants, and a breach of such covenants is not cured timely or waived by the lenders, resulting in a default, the Company’s access to credit may be limited or terminated, dividends may be suspended, and the lenders could declare any outstanding amounts due and payable. The Company’s continued ability to borrow under its credit facilities is subject to compliance with these financial and other non-financial covenants.

Various internal and external factors may have favorable or unfavorable material or immaterial effects on the Company’s effective income tax rate and, therefore, impact the Company’s net income and earnings per share. These factors include, but are not limited to changes in tax rates; changes in tax laws, regulations, and rulings; changes in interpretations of existing tax laws, regulations and rulings; changes in the evaluation of the Company’s ability to realize deferred tax assets, and changes in uncertain tax positions; changes in accounting principles; changes in current pre-tax income as well as changes in forecasted pre-tax income; changes in the level of Capital Construction Fund (“CCF”) deductions, non-deductible expenses, and expenses eligible for tax credits; changes in the mix of earnings among countries with varying tax rates; changes to the allowable amounts of foreignforeign-derived deriveddeduction intangibleeligible income deductions; and acquisitions and changes in the Company’s corporate structure.structure, including potential acquisitions. These factors may result in periodic revisions to the Company’s effective income tax rate, which could affect the Company’s cashfinancial flow andcondition, results of operations.operations and cash flow.

The amount of the Company’s employee pension and post-retirement benefit costs and obligations is calculated on assumptions used in the relevant actuarial calculations. Adverse changes in any of these assumptions due to economic or other factors, changes in discount rates, higher health care costs, or lower actual or expected returns on plan assets, may adversely affect the Company’s operatingfinancial results,condition, results of operations and cash flows, and financial condition.flow. In addition, a change in federal law, including changes to the Employee Retirement Income Security Act or Pension Benefit Guaranty Corporation premiums, may adversely affect the Company’s single-employer and multi-employer pension plans and plan funding. These factors, as well as a decline in the fair value of pension plan assets, may put upward pressure on the cost of providing pension and medical benefits and may increase future pension expense and required funding contributions. There can be no assurance that the Company will be successful in limiting future cost and expense increases, and continued upward pressure in costs and expenses could further reduce the profitability of the Company’s businesses.

The Company contributes to various multi-employer pension plans. In the event of a partial or complete withdrawal by the Company from any plan that is underfunded, the Company would be liable for a proportionate share of such plan’s unfunded vested benefits (see Note 11 to the Consolidated Financial Statements in Item 8 of Part II of this Annual Report). Based on the limited information available from plan administrators, which the Company cannot independently validate, the Company believes that its portion of the contingent liability in the case of a full withdrawal or termination may be material to its financial position andcondition, results of operations.operations and cash flow. If any other contributing employer withdraws from any plan that is underfunded, and such employer (or any member of its controlled group) cannot satisfy its obligations under the plan at the time of withdrawal, then the Company, along with the other remaining contributing employers, would be liable for its proportionate share of such plan’s unfunded vested benefits. In addition, if any of the multi-employer plans to which the Company contributes fails to satisfy the minimum funding requirements, the Internal Revenue Service will impose certain penalties and taxes on the Company and other contributing employers.

The Company, including its vessels and terminals, is subject to numerous federal, state and local laws and regulations, including those related to safety, cabotage, equipment standards and government rates. In addition, the Company is subject to environmental laws and regulations, including those relating to air quality initiatives at port locations; air emissions; use of shore power at California ports; wastewater discharges; management of storm water; the storage, transportation, handling, emission and disposal of solid and hazardous materials, oil and oil related products, hazardous substances and wastes; the investigation and remediation of contamination and liability for damages to the environment; health, safety and the protection of the environment and natural resources; and climate change, including any regulations, mandates or restrictions related to GHG emissions, such as a potential carbon tax, and energy use. Any changes in applicable laws and regulations, including their enforcement, interpretation or implementation that resultsresult in more stringent requirements than currently anticipated, as well as any new laws and regulations that are adopted could impose significant additional costs and limitations on the Company’s ability to operate. Mitigation strategies or contingency plans to remain in compliance with applicable laws and regulations may be unsuccessful, result in additional costs or experience delays. Such costs may not be recoverable through increased payments from customers. For a discussion of specific laws and regulations, see Part I, Item 1 of this Annual Report.

Federal, state and local laws and regulations require us to obtain certificates of financial responsibility and to adopt procedures for oil and hazardous substance spill prevention, response and clean up, among other requirements impacting the Company’s business. In complying with applicable laws and regulations, the Company has incurred expenses and may incur material future costs and expenses related to vessel and equipment modifications, new equipment, higher-priced fuel, changes in operating practices and procedures, tracking emissions, changing routes, adopting or modifying energy sources and undergoing additional oversight inspections, all of which could adversely affect the Company’s businessfinancial condition, results of operations and financialcash condition.flow. For example, Matson’s vessels operate within emissions control areas, and the Company’s U.S. flagged vessels generally must be maintained “in class” and are subject to periodic inspections by the American Bureau of Shipping or similar classification societies. They also must be periodically inspected by, or on behalf of, the United States Coast Guard. The Company’s vessels’ operating certificates and licenses are renewed periodically during the required annual surveys of the vessels, but there is no assurance that the Company’s programs and policies will be sufficient to have such certificates and licenses renewed. The EPA also requires vessels to obtain coverage under a general permit and to comply with inspection, monitoring, discharge, recordkeeping and reporting requirements.

The Company, from time to time, may make or may have made certain forward-looking statements, whether orally or in writing, such as, among others, forecasts or projections of the Company’s future performance or statements of management’s plans and objectives. These statements are considered “forward-looking” statements as that term is defined in the Private Securities Litigation Reform Act of 1995. Such forward-looking statements may be contained in, among other things, SEC filings such as Forms 10-K, 10-Q and 8-K, the Company’s Annual Report to Shareholders, the Company’s Sustainability Report, press releases made by the Company, the Company’s Internet websites (including websites of its subsidiaries), and oral statements made by officers of the Company. Except for historical information contained in these written or oral communications, all other statements are forward-looking statements. These include, for example, all references to 20252026 or future years, including such references included under “Fourth Quarter 20242025 Discussion and Outlook for 2025,2026,” as well as statements generally identified through the inclusion of words such as “anticipate,” “believe,” “can,” “commit,” “estimate,” “expect,” “focus,” “goal,” “hope,” “intend,” “may,” “plan,” “seek,” “should,” “target,” and “will,” or similar statements or variations of such terms and other similar expressions. New risks or uncertainties may emerge from time to time, risks that the Company currently does not consider to be material could become material, and it is not possible for the Company to predict all such risks, nor can it assess the impact of all such risks on the Company’s business or the extent to which any factor, or combination of factors, may cause actual results or outcomes, or the timing of results or outcomes, to differ materially from those contained in any forward-looking statements. Accordingly, forward-looking statements cannot be relied upon as a guarantee of future results or outcomes and involve a number of risks and uncertainties that could cause actual results or outcomes to differ materially from those projected in the statements, including but not limited to the factors that are described in Part I, Item 1A under the caption “Risk Factors” of this Annual Report on Form 10-K, which section is incorporated herein by reference, and elsewhere in this report. Except as required by law, the Company undertakes no obligation to revise or update publicly forward-looking statements or any factors that may affect actual results, whether as a result of new information, future events, circumstances occurring after the date of this report, or otherwise.

Ocean Transportation: The Company’s container volume in the Hawaii service in the fourth quarter 20242025 was 1.70.6 percent lowerhigher year-over-year. The decrease wasyear-over-year primarily due to lowerhigher general demand. Hawaii’s economy isremains expectedsluggish toas continuesofter totourism growand slowlyongoing supportedinflationary bypressures, modestincluding gainselevated interest rates, more than offset strength in tourism, a low unemployment rate, and increased construction activity, but partially restrained by continued challenges in population growth and lower discretionary income as a result of high inflation and interest rates.activity. The Company expects volume in 2025full year 2026 to be comparable to the level achieved in 2024,2025, reflecting modestsimilar economic growth in Hawaiiconditions and stable market share.

In Guam, the Company’s container volume in the fourth quarter 20242025 decreasedincreased 10.04.4 percent year-over-year. The decrease wasyear-over-year primarily due to lowerhigher demandgeneral from retail and food and beverage segments.demand. In the near term, the Company expects Guam’s economy to growmoderate modestly supported byreflecting a lowchallenging unemploymenttourism rate and an increase in construction activity.environment. For the full year 2025,2026, the Company expects volume to be modestlycomparable higher thanto the level achieved last year.

In Alaska, the Company’s container volume for the fourth quarter 20242025 increaseddecreased 1.13.3 percent year-over-year. The increasedecrease was primarily due to higherone less northbound volume,sailing compared to the year ago period, partially offset by anhigher additionalexport sailingseafood involume theon year ago period.AAX. In the near term, the Company expects continued economic growth in Alaska supported by a low unemployment rate, jobs growth and continued oil and gas exploration and production activity. For the full year 2025,2026, the Company expects volume to approximatebe comparable to the level achieved last year.

The losscontribution in the fourth quarter 20242025 from the Company’s SSAT joint venture investment was $9.5$9.3 million, or $13.6$18.8 million lowerhigher than the income of $4.1 million in fourth quarter 2023.2024. The decreaseincrease was primarily due to a $18.4 millionan impairment charge related to the write-down of a terminal operating lease asset,asset partiallyat offsetSSAT by higher year-over-year lift volume. On an after-tax basis, the impairment chargewhich impacted fourth quarter 2024 operating income, net income and diluted EPSearnings per share by $18.4 million, $14.0 million and $0.42 per share, respectively. For 2025,full year 2026, the Company expects the contribution from SSAT to approximatebe comparable to the level$32.5 million achieved in 2024,full withoutyear taking into account the $18.4 million impairment charge in the fourth quarter 2024.2025.

Logistics: In the fourth quarter 2024,2025, operating income for the Company’s Logistics segment was $10.1$7.7 million, or $1.2$2.4 million higherlower compared to the level achieved in the fourth quarter 2023.2024. The increasedecrease was primarily due to a higherlower contribution from supply chain management. For 2025, the Company expects challenging business conditions for transportation brokerage for most of the year and a lower contribution from supply chain management, which the Company expects to lead to modestly lower operating income compared to the level achieved in 2024. For the first quarter 2025,2026, the Company expects Logistics operating income to be modestly lower than the $9.3$8.5 million achieved in the first quarter 2024.2025. For full year 2026, the Company expects Logistics operating income to approach the $44.2 million achieved in full year 2025.

Income Taxes: In the fourth quarter 2024,2025, the Company’s effective tax rate was 19.15.2 percent and benefited from a one-time tax adjustment of $18.5 million, or $0.59 per share, related to the Company’s deferred tax assets and liabilities. For the full year 2025, the Company’s effective tax rate was 16.7 percent. For the full year 2025,2026, the Company expects its effective tax rate to be approximately 22.021.0 percent.

Consolidated Operating Revenue for the year ended December 31, 20242025 increaseddecreased $327.2$77.3 million, or 10.62.3 percent, compared to the prior year. The increasedecrease was due to ana increasedecrease in Ocean Transportation revenue of $332.7$74.2 million which was partially offset byand a decrease in Logistics revenue of $5.5$3.1 million.

Operating Costs and Expenses for the year ended December 31, 20242025 increaseddecreased $118.7$25.8 million, or 4.30.9 percent, compared to the prior year. The increasedecrease was due to ana increasedecrease in Ocean Transportation operating costs and expenses of $126.6$28.9 million which was partially offset by aan decreaseincrease in Logistics operating costs and expenses of $7.9$3.1 million.

Operating Income for the year ended December 31, 20242025 increaseddecreased $208.5$51.5 million, or 60.89.3 percent, compared to the prior year. The increasedecrease was due to ana increasedecrease in Ocean Transportation operating income of $206.1$45.3 million and ana increasedecrease in Logistics operating income of $2.4$6.2 million.

Interest Income was $48.3$31.7 million for the year ended December 31, 2024,2025, compared to $36.0$48.3 million in the prior year. The increase in interest income wasfor duethe toyear ended December 31, 2024 included interest of $10.2 million earned on a federal income tax refundrefund. receivedExcluding duringthat amount, the year ended December 31, 2024. The increasedecrease in interest income was also due to increaseda amountsdecreased amount of cash and cash equivalent accounts, and cash on deposit and investments within the Capital Construction FundCCF that were invested in interest bearing accounts during the year ended December 31, 2024,2025, compared to the prior year.

Interest Expense was $7.5$6.8 million for the year ended December 31, 2024,2025, compared to $12.2$7.5 million in the prior year. The decrease in interest expense was due to lower outstanding debt and a higherdebt, offset ofby capitalized interest related to the construction of new vessels during the year ended December 31, 2024,2025, compared to the prior year.

Other Income (Expense), net was $7.3$9.1 million for the year ended December 31, 2024,2025, compared to $6.4$7.3 million in the prior year, and relates to the amortization of certain components of net periodic benefit costs or gains related to the Company’s pension and post-retirement plans. The increase in other income (expense) was due to an increase in the amortization of favorable adjustments reflected in the Company’s pension and post-retirement plan liabilities during the year ended December 31, 2024, compared to the prior year.liabilities.

Income Taxes for the year ended December 31, 20242025 were $123.0$89.0 million, or 20.516.7 percent of income before income taxes, compared to $75.9$123.0 million, or 20.320.5 percent of income before income taxes in the prior year. The 2023 incomeeffective tax rate for the year ended December 31, 2025 benefited from certaina discreteone-time adjustment of $18.5 million or 3.5 percent related to the Company’s deferred tax adjustmentsassets thatand loweredliabilities. Excluding this adjustment, the effective tax rate infor the prioryear year.ended December 31, 2025 would have been 20.1 percent.

Net Income during the year ended December 31, 20242025 increaseddecreased $179.3$31.6 million, or 60.46.6 percent, to $476.4$444.8 million, compared to the prior year.

LogisticsOcean operatingTransportation incomerevenue increaseddecreased $2.4$74.2 million, or 5.02.6 percent, during the year ended December 31, 2024,2025, compared with the year ended December 31, 2023.2024. The increasedecrease was primarily due to alower highervolume contributionin from supply chain management.China.

LossIncome from SSAT was $1.0$32.5 million for the year ended December 31, 2024,2025, compared to incomea loss from SSAT of $2.2$1.0 million in the prior year.year, Excludingwhich included the Company’s portion of an impairment charge of $18.4 million that was included in the loss from SSAT during the year ended December 31, 2024 related to the write-down of a terminal operating lease asset,asset. Excluding this impairment charge, the increase in income from SSAT was due to higher operating profits generated by SSAT during the year ended December 31, 20242025 due to increased lift volume. No impairment charge was recorded by SSAT during the year ended December 31, 2023.2025. Cash dividends received from SSAT was $14.0$21.0 million for the year ended December 31, 2024,2025, compared to no$14.0 cash distributions receivedmillion in the prior year. Cash distributions from SSAT are dependent on the level of cash available for distribution after consideration of SSAT’s operational and capital needs. Changes in accounts receivable were primarily due to the timing of collections associated with those receivables. Changes in prepaid expenses and other assets were primarily due to a decrease in prepaid income tax receivables at December 31, 2024 due to a refund of $118.6 million related to the Company’s 2021 federal tax return that was received during the year ended December 31, 2024, offset by higher prepaid fuel.2024. Changes in accounts payable, accruals and other liabilities were primarily due to the timing of payments associated with those liabilities. Changes in operating lease liabilitiesassets and liabilities, net, were primarily due to new operating leases entered into during the year ended December 31, 2024,2025, offset by lease payments and operating leases that expired during the yearsame ended December 31, 2024.year. Deferred dry-docking payments were $30.2$49.4 million for the year ended December 31, 2024,2025, compared to $24.1$30.2 million in the prior year. The increase in deferred dry-docking payments was due to an increase in vessel dry-dockdrydock related activities during the year ended December 31, 2024.2025. Changes in other long-term liabilities primarily related to payments of pension and post-retirement liabilities, and multi-employer liabilities.

During the year ended December 31, 2024,2025, cash and interest depositeddeposits into the CCF wereincluded $100.7 million from the repurchase of assigned accounts receivables and $17.9 million of interest income, compared to $50.0 million andof $18.8cash million,deposits, compared to $100.0$53.8 million from the repurchase of assigned accounts receivable and $31.1$16.9 million of interest income in the prior year, respectively. During the year ended December 31, 2024,2025, cash withdrawals from the CCF for the payment of vessel construction milestone payments were $89.6$237.3 million, compared to $49.9$89.6 million in the prior year, related to vessel construction milestone payments. During the year ended December 31, 2024, the Company repurchased $53.8 million of assigned accounts receivable. No assigned accounts receivable were repurchased during the year ended December 31, 2023.year. Capitalized vessel construction expenditures were $95.6$244.3 million for the year ended December 31, 2024,2025, compared to $52.9$95.6 million in the prior year. The increase in capitalized vessel construction expenditures was due to the timing of milestone payments related to the Company’s fleet renewal program. Capital expenditures (excluding vessel construction expenditures) were $214.5$149.1 million for the year ended December 31, 2024,2025, compared to $195.5$214.5 million for the prior year. Capital expenditures for the year ended December 31, 2024 included costs associated with LNG installations and the reengining of an existing vessel, which were completed during that year. No comparable costs were incurred during the year ended December 31, 2025. Capital expenditures (excluding vessel construction expenditures) during the year ended December 31, 20242025 included costs associated with LNG installations, the reengining of an existing vessel, and the purchase of additional containers, chassis and other terminal equipment to support the Company’s operating activities. During the year ended December 31, 2024, the Company paid $0.8 million related to asset acquisitions, compared to $12.4 million in the prior year.

The Company paid $199.1$303.3 million to repurchase common stock during the year ended December 31, 2024,2025, compared to $155.2$199.1 million in the prior year. The Company did not issue any new fixed interest debt during the years ended December 31, 20242025 and 2023.2024. The Company paid $39.7 million of scheduled fixed interest debt principal payments duringin each of the yearyears ended December 31, 2024, compared to $76.9 million of prepaid2025 and scheduled fixed interest debt principal payments during the prior year.2024. The value of shares withheld by the Company for taxes related to the settlement of restricted stock units was $17.6$16.4 million for the year ended December 31, 2024,2025, compared to $12.6$17.6 million in the prior year.

Capital Construction Fund: The Company utilizes its CCF to fund milestone payments for the construction of new vessels. The Company’s CCF is described in Note 7 to the Consolidated Financial Statements. Cash on deposit and investments in the CCF and assigned accounts receivable as of December 31, 20242025 and 20232024 were as follows:

Debt: The Company utilizes a mix of fixed and variable debt for liquidity and to fund the Company’s operations. The Company’s debt is described in Note 8 to the Consolidated Financial Statements in Item 8 of Part II. Total debt as of December 31, 20242025 and 20232024 is as follows:

Total debt decreased by $39.7 million during the year ended December 31, 20242025 compared to the prior year. The decrease in fixed interest debt was due to the scheduled debt repayments made during the year ended December 31, 2024.2025. As of December 31, 2025, the Company had $544.3 million of unused capacity under the revolving credit facility, with a maturity date of July 23, 2030.

Working Capital: The Company had a working capital deficit of $55.5 million at December 31, 2025, compared to a working capital surplus of $49.2 million at December 31, 2024, compared to a working capital surplus of $40.0 million at December 31, 2023.2024. Working capital is primarily impacted by the amount of net cash provided by operating activities, the amount of capital expenditures, the amount and timing of collections associated with accounts receivable, prepaid expenses and other assets, and the amount and timing of payments associated with accounts payable, accruals, income taxes, debt and other liabilities. The increasedecrease in the Company’s working capital surplus during the year ended December 31, 20242025 was due to thea increasedecrease in cash provided by operating activities offset byand higher capital expenditures during the year.

New vessel construction milestone payments and related costs (including owner’s items and change orders) are for the Company’s construction of three new Aloha class vessels at a cost of approximately $1.0 billion (excluding owners’ items and change orders) with expected delivery dates during the first quarter 2027, the third quarter 2027 and the second quarter 2028. Future construction milestone payments are expected to be financed with cash currently on deposit in the Company’s CCF, cash and cash equivalents on the Consolidated Balance Sheets, cash flows generated from future operations, borrowings available under the Company’s unsecured revolving credit facility or additional debt financings.

Maintenance and other capital expenditures include amounts that the Company expects to spend on various capital projects, including capital expenditures related to the second and third phase of its program to modernize and renovate its terminal facility at Sand Island, Honolulu, Hawaii, repurchases of leased equipment, vessel capital maintenance and annual equipment purchases to support the Company’s operations. The Company expects to fund these capital expenditures with cash and cash equivalents on the Consolidated Balance Sheets and through cash flows generated from future operating activities.

Repurchase of Shares: During the year ended December 31, 2024,2025, the Company repurchased approximately 1.62.7 million shares for a total cost of $201.0$307.4 million. The remaining number of shares that may be repurchased under the Company’s stock repurchase program was 830,527approximately 1.1 million shares at December 31, 2024. On February 27, 2025, the Company’s Board approved an additional 3.0 million shares of common stock to be added to the Company’s existing share repurchase program and extended the program’s expiration date to December 31, 2027.2025.

The Company considers an accounting estimate to be critical if (i)(a) the accounting estimate requires the Company to make assumptions that are difficult or subjective about matters that were highly uncertain at the time that the accounting estimate was made, (b) changes in the estimate are reasonably likely to occur in periods after the period in which the estimate was made, or (c) the Company could have used different estimates; and (ii) changes in those accounting estimates would have had a material impact on the financial condition or results of operations of the Company. The critical accounting policies and estimates considered in the preparation of the Company’s Consolidated Financial Statements are described below. Management has discussed the development and selection of these critical accounting estimates with the Audit Committee of our Board.

Indefinite-life Intangible Assets and Goodwill: The Company’s indefinite-life intangible assets include goodwill and a trade name, and are grouped at the lowest level reporting unit for which identifiable cash flows are available. In estimating the fair value of a reporting unit, the Company uses a combination of a discounted cash flow model and fair value based on market multiples of earnings before interest, income taxes, depreciation and amortization (“EBITDA”).EBITDA. The discounted cash flow approach requires the Company to use a number of assumptions, including market factors specific to the business, the amount and timing of estimated future cash flows generated by the business over an extended period of time, long-term growth rates for the business, and a discount rate that considers the risks related to the amount and timing of the cash flows. Although the assumptions used by the Company in its discounted cash flow model are consistent with the assumptions the Company used to generate its internal strategic plans and forecasts, significant judgment is required to estimate the amount and timing of future cash flows from the reporting unit and the risk of achieving those cash flows. When using market multiples of EBITDA, the Company makes judgments about the comparability of multiples in closed and proposed transactions. Accordingly, changes in assumptions and estimates, including, but not limited to, changes driven by external factors, such as industry and economic trends, and those driven by internal factors, such as changes in the Company’s business strategy and its internal forecasts, could have a material effect on the Company’s financial condition or its future operating results. The Company has evaluated its indefinite-life intangible assets and goodwill for impairment and determined that there was no impairment for the years ended December 31, 2025, 2024, 2023, and 2022.2023.

When estimating its reserves for retained risks and related liabilities, the Company considers a number of factors, including historical claims experience, demographic factors, current trends, and analyses provided by independent third parties. Periodically, management reviews its assumptions and estimates used to determine the adequacy of the Company’s reserves for retained risks and other related liabilities. The Company’s retained risks and other related liabilities contain uncertainties because management is required to apply judgment and make long-term assumptions to estimate the ultimate cost to settle reported claims, and of claims incurred but not reported, as of the balance sheet date. Insurance related liabilities were $52.8$43.1 million and $41.3$52.8 million at December 31, 20242025 and 2023,2024, respectively. The Company’s estimate of insurance related liabilities could change if management uses different assumptions or if different conditions occur in future periods, however the Company does not expect any such change would have a material impact on the Company’s financial condition andcondition, results of operations.operations or cash flows.

Income Taxes: The Company’s income tax expense requires the Company to make various estimatesjudgments and judgments.estimates. These estimatesjudgments and judgmentsestimates are applied in the calculation of taxable income, tax credits, tax benefits, CCF related tax deductions, foreign-derived intangiblededuction eligible income and other tax deductions, and in the calculation of certain deferred tax assets and liabilities, which arise from differences in the timing of recognition of revenue, costs and expenses for tax purposes. The calculation of deferred tax assets and liabilities may be impacted by various factors including but not limited to changes in tax rates; changes in tax laws, regulations, rulings and interpretations of existing tax laws; and changes in the evaluation of the Company’s ability to realize deferred tax assets including operating loss and tax credit carryforwards.carryforwards in future years. Significant changes to these judgments and estimates may result in an increase or decrease to the Company’s income taxes in a subsequent period.

The Company, from time to time, may make or may have made certain forward-looking statements, whether orally or in writing, such as, among others, forecasts or projections of the Company’s future performance or statements of management’s plans and objectives. These statements are considered “forward-looking” statements as that term is defined in the Private Securities Litigation Reform Act of 1995. Such forward-looking statements may be contained in, among other things, Securities and Exchange Commission (“SEC”) filings such as Forms 10-K, 10-Q and 8-K, the Company’s Annual Report to Shareholders, the Company’s Sustainability Report, press releases made by the Company, the Company’s Internet websites (including websites of its subsidiaries), and oral statements made by officers of the Company. Except for historical information contained in these written or oral communications, all other statements are forward-looking statements. These include, for example, all references to 2026 or future years, including such references included under “FirstSecond Quarter 2026 Discussion and Outlook for 2026,” as well as statements generally identified through the inclusion of words such as “anticipate,” “believe,” “can,” “commit,” “estimate,” “expect,” “focus,” “goal,” “hope,” “intend,” “may,” “plan,” “seek,” “should,” “target,” and “will,” or similar statements or variations of such terms and other similar expressions. New risks or uncertainties may emerge from time to time, risks that the Company currently does not consider to be material could become material, and it is not possible for the Company to predict all such risks, nor can it assess the impact of all such risks on the Company’s business or the extent to which any factor, or combination of factors, may cause actual results or outcomes, or the timing of results or outcomes, to differ materially from those contained in any forward-looking statements. Accordingly, forward-looking statements cannot be relied upon as a guarantee of future results or outcomes and involve a number of risks and uncertainties that could cause actual results or outcomes to differ materially from those projected in the statements, including but not limited to the factors that are described in Part II, Item 1A under the caption “Risk Factors” of the Company’s Form 10-K for the year ended December 31, 2025. Except as required by law, the Company undertakes no obligation to revise or update publicly forward-looking statements or any factors that may affect actual results, whether as a result of new information, future events, circumstances occurring after the date of this report, or otherwise.

FIRSTSECOND QUARTER 2026 DISCUSSION AND OUTLOOK FOR 2026

Ocean Transportation: The Company’s container volume in the Hawaii service in the firstsecond quarter 2026 was 5.61.1 percent lower year-over-year primarily due to lower general demand and the dry-docking of a competitor’s vessel in the year ago period.demand. Hawaii’s economy isremains expectedstable, tosupported experienceby strong construction activity and modest growth supportedin bytourist constructionarrivals, activity,but whilecontinues tourismto remainsface softheadwinds andfrom inflationaryhigher pressuresenergy-related persist.inflation. The Company expects volume in full year 2026 to be comparable toapproach the level achieved in 2025, reflectingbased on the Company’s expectation of similar economic conditions and stable market share.

In the Guam service, the Company’s container volume in the firstsecond quarter 2026 wasincreased flat4.4 percent year-over-year. In the near term, the Company expects Guam’s economy to remain stable. For full year 2026, the Company expects volume to be comparable to the level achieved last year.

In the Alaska service, the Company’s container volume in the firstsecond quarter 2026 decreased 2.02.3 percent year-over-year. The decrease wasyear-over-year primarily due to lower generalexport demand,seafood volume on AAX, partially offset by anone additional northbound sailing and an additional AAX sailing compared to the year ago period.sailing. In the near term, the Company expects continuedAlaska’s economiceconomy growthto inremain Alaskastable supported by a low unemployment rate, jobssteady growthjob market and continued oil and gas exploration and production activity. For full year 2026, the Company expects volume to be comparable toapproach the level achieved last year.

The contribution from the Company’s SSAT joint venture investment was $5.0$4.8 million in the firstsecond quarter 2026, or $1.6$2.5 million lower than firstsecond quarter 2025. The decrease was primarily due to lower lift volume.volume and higher operating expenses. For full year 2026, the Company expects the contribution from SSAT to be lower than the $32.5 million achieved in full year 2025.

Based on the outlook trends noted above, the Company expects Ocean Transportation operating income in the secondthird quarter 2026 to be approximately $2045 millionpercent higher than the $98.6$147.4 million achieved in the secondthird quarter 2025. The Company also expects Ocean Transportation operating income in the fourth quarter 2026 to be modestly lower than the $136.0 million achieved in the fourth quarter 2025. For full year 2026, the Company expects Ocean Transportation operating income to modestlybe exceedhigher than the level$455.6 million achieved in full year 2025.

Logistics: Operating income for the Company’s Logistics segment was $6.8$14.9 million in the firstsecond quarter 2026, or $1.7$0.5 million lowerhigher compared to the level achieved in the firstsecond quarter 2025. The decreaseincrease was primarily due to higher contributions from freight forwarding and transportation brokerage, partially offset by a lower contribution from supply chain management.warehousing. For the secondthird quarterand fourth quarters 2026, the Company expects Logistics operating income to approachbe modestly higher than the $14.4$13.6 million and $7.7 million achieved in the secondthird quarterand 2025.fourth quarters 2025, respectively. For full year 2026, the Company expects Logistics operating income to approachbe higher than the $44.2 million achieved in full year 2025.

Consolidated Operating Income: To date, the Iran conflict has not impacted the Company’s operating performance or service levels; however, it has impacted fuel prices in all of the Company’s markets. While theThe Company has effective mechanismscontinues to expect to fully recover thefuel cost of fuelcosts by the end of the year, for the second quarter the Company expects a negative impact from the lag in the recovery of fuel costs.year. For the secondthird quarter 2026, the Company expects consolidated operating income to be approximately $2045 millionpercent higher than the $113.0 millionlevel achieved in the secondthird quarter 2025. For full year 2026, the Company expects consolidated operating income to modestlybe exceedhigher than the level achieved in full year 2025 based on the Company’s expectations of China demand strength in the second quarter continuing through peak season, continued solid U.S. consumer demand and a stable trading environment in the Transpacific Tradelane. For 2026 compared to 2025, the Company continues to expect a more normal operating seasonality pattern with consolidated operating income in the second and third quarters being the strongest relative to the first and fourth quarters.tradelane.

Interest Expense, Net: The Company expects interest expenseexpense, net for the full year 2026 to be approximately $6 million.

Other Income (Expense), Net: The Company expects full year 2026 other income (expense), net to be approximately $7 million in income, which is attributable to the amortization of certain components of net periodic benefit costs or gains related to the Company’s pension and post-retirement plans.

Income Taxes: InFor the firstsecond quarter 2026, the Company’s effective tax rate was 16.621.0 percent. For the full year 2026, the Company expects its effective tax rate to be approximately 21.0 percent.

Capital and Vessel Dry-docking Expenditures: For the firstsecond quarter 2026, the Company made capital expenditure payments excluding new vessel construction expenditures of $30.3$25.4 million, new vessel construction expenditures (including capitalized interest and owner’s items) of $18.0$181.8 million, and dry-docking payments of $11.9$12.7 million. For the full year 2026, the Company expects to make other capital expenditure payments, including maintenance capital expenditures, of approximately $150 to $170 million, new vessel construction expenditures (including capitalized interest and owner’s items) of approximately $400 million, and dry-docking payments of approximately $45 million.

Consolidated Results – Three months ended MarchJune 31,30, 2026 compared with 2025:

Consolidated Operating Revenues for the three months ended MarchJune 31,30, 2026 decreasedincreased by $24.2$138.9 million, or 3.116.7 percent, compared to the three months ended MarchJune 31,30, 2025. The decreaseincrease was due to aan decreaseincrease in Ocean Transportation revenue of $30.9$91.8 million,million offset byand an increase in Logistics revenue of $6.7$47.1 million.

Operating Costs and Expenses for the three months ended MarchJune 31,30, 2026 decreasedincreased by $3.5$93.0 million, or 0.513.0 percent, compared to the three months ended MarchJune 31,30, 2025. The decreaseincrease was due to aan decreaseincrease in Ocean Transportation operating costs and expenses of $11.9$46.4 million,million offset byand an increase in Logistics operating costs and expenses of $8.4$46.6 million.

Operating Income for the three months ended MarchJune 31,30, 2026 decreasedincreased by $20.7$45.9 million, or 25.240.6 percent, compared to the three months ended MarchJune 31,30, 2025. The decreaseincrease was due to aan decreaseincrease in Ocean Transportation operating income of $19.0$45.4 million,million and aan decreaseincrease in Logistics operating income of $1.7$0.5 million.

Interest Income was $6.1$5.0 million for the three months ended MarchJune 31,30, 2026, compared to $9.4$8.0 million for the three months ended MarchJune 31,30, 2025. The decrease in interest income for the three months ended MarchJune 31,30, 2026, compared to the three months ended MarchJune 31,30, 2025, was due to lower amounts of cash and cash equivalent,equivalents, and CCF funds that were invested in interest bearing accounts during the three months ended MarchJune 31,30, 2026.

Interest Expense, netNet was $1.6 million for the three months ended MarchJune 31,30, 2026, compared to $1.7 million for the three months ended MarchJune 31,30, 2025. Interest expenseexpense, net incurred during the quarter ended MarchJune 31,30, 2026 was lower due to a reduction in outstanding debt during the period, which was offset by a reduction in capitalized interest related to the construction of three new vessels for the three months ended MarchJune 31,30, 2026, compared to the three months ended MarchJune 31,30, 2025.

Other Income (Expense), netNet was $2.0$1.6 million for the three months ended MarchJune 31,30, 2026, compared to $2.4 million for the three months ended MarchJune 31,30, 2025. Other income (expense), net relates to the amortization of certain components of net periodic benefit costs or gains related to the Company’s pension and post-retirement plans. The decrease in other income (expense), net,net was due to a decrease in the amortization of favorable adjustments related to the Company’s pension and post-retirement plan liabilities.

Income Taxes were $11.3$34.5 million, or 16.621.0 percent of income before taxes, for the three months ended MarchJune 31,30, 2026, compared to $19.9$27.0 million, or 21.622.2 percent of income before taxes, for the three months ended MarchJune 31,30, 2025. The effective tax rate for the three months ended MarchJune 31,30, 2026 benefited from higher discrete tax adjustments that lowered the effective tax rate for that period, compared to the same prior year period.

Ocean Transportation Operating Results – Three months ended MarchJune 31,30, 2026 compared with 2025:

Ocean Transportation revenue decreasedincreased $30.9$91.8 million, or 4.813.6 percent, during the three months ended MarchJune 31,30, 2026, compared with the three months ended MarchJune 31,30, 2025. The decreaseincrease was primarily due to lowerhigher volume and freight rates in the China service.

On a year-over-year FEU basis, Hawaii service container volume decreased 5.61.1 percent primarily due to lower general demand and the dry docking of a competitor’s vessel in the year ago period; Alaska service volume decreased 2.02.3 percent primarily due to lower generalexport demand,seafood volume on AAX, partially offset by anone additional northbound sailing and an additional AAX sailing compared to the year ago period; China service volume wasincreased 9.515.2 percent lower primarily due to lowersignificantly generalhigher demand fromcompared to the prior year period, which included a moremarket traditionaldecline Lunarin NewTranspacific Yeardemand freightdue cycleto the tariffs imposed in April 2025; Guam service volume wasincreased flat4.4 percent; and Other containers volume decreased 2.911.4 percent.

Ocean Transportation operating income decreasedincreased $19.0$45.4 million, or 25.846.0 percent, during the three months ended MarchJune 31,30, 2026, compared with the three months ended MarchJune 31,30, 2025. The decreaseincrease was primarily due to a lowerhigher contribution from the China service.service, partially offset by higher vessel operating expense primarily due to higher fuel-related costs.

The Company’s SSAT terminal joint venture investment contributed $5.0$4.8 million during the three months ended MarchJune 31,30, 2026, compared to $6.6$7.3 million during the three months ended MarchJune 31,30, 2025. The decrease was primarily due to lower lift volume.volume and higher operating expenses.

LogisticsOcean Transportation Operating Results – ThreeSix months ended MarchJune 31,30, 2026 compared with 2025:

LogisticsOcean Transportation revenue increased $6.7$60.9 million, or 4.6 percent, during the threesix months ended MarchJune 31,30, 2026, compared with the threesix months ended MarchJune 31,30, 2025. The increase was primarily due to higher revenuefreight rates and volume in transportationthe brokerage.China service.

LogisticsOcean Transportation operating income decreasedincreased $1.7$26.4 million, or 20.015.3 percent, during the threesix months ended MarchJune 31,30, 2026, compared with the threesix months ended MarchJune 31,30, 2025. The decreaseincrease was primarily due to a lowerhigher contribution from supplythe chainChina management.service, partially offset by higher vessel operating expense primarily due to higher fuel-related costs.

The Company’s primary sources of liquidity are its cash flows generated from operating activities and its debt. Sources of liquidity available to the Company as of MarchJune 31,30, 2026 compared to December 31, 2025 were as follows:

Cash and Cash Equivalents, Accounts Receivable and CCF: Cash and cash equivalents, accounts receivable and CCF as of MarchJune 31,30, 2026 compared to December 31, 2025 were as follows:

Changes in the Company’s cash and cash equivalents for the threesix months ended MarchJune 31,30, 2026, compared to the threesix months ended MarchJune 31,30, 2025, are as follows:

Changes in net cash provided by operating activities for the threesix months ended MarchJune 31,30, 2026, compared to the threesix months ended MarchJune 31,30, 2025, were due to the following:

Net income was $186.0 million for the six months ended June 30, 2026, compared to $167.0 million for the six months ended June 30, 2025. Income from SSAT was $9.8 million for the six months ended June 30, 2026, compared to $13.9 million for the six months ended June 30, 2025. The decrease in income from SSAT was primarily due to lower lift volume and higher operating expenses during the six months ended June 30, 2026, compared to the same prior year period. There were no distributions received from SSAT during the six months ended June 30, 2026 and 2025. Changes in accounts receivable, net were primarily due to an increase in revenue and the timing of collections associated with those receivables. Changes in accounts payable, accruals and other liabilities were due to higher liability balances resulting from higher operating costs and the timing of payments associated with those liabilities. Changes in operating lease assets and liabilitiesliabilities, net were primarily due to new operating lease additions and renewals, offset by operating lease payments and terminations. Deferred dry-docking payments for the threesix months ended MarchJune 31,30, 2026 were $11.9$24.6 million, compared to $10.4$23.8 million for the threesix months ended MarchJune 31,30, 2025. Changes in deferred dry-docking are primarily due to the timing of vessel dry-dock related activities and the payments associated with those activities.

Changes in net cash used in investing activities for the threesix months ended MarchJune 31,30, 2026, compared to the threesix months ended MarchJune 31,30, 2025, were due to the following:

During the threesix months ended MarchJune 31,30, 2026, cash deposits into the CCF included $4.6$7.9 million of interest income and $1.2$1.6 million from the repurchase of assigned accounts receivable, compared to $4.7$8.4 million of interest income and $100.7 million from the repurchase of assigned accounts receivable for the same prior year period. During the threesix months ended MarchJune 31,30, 2026, cash withdrawals from the CCF for the payment of vessel construction milestone payments were $17.4$197.7 million, compared to $65.0$100.7 million for the same prior year period. The decreaseincrease in vessel construction milestone payments was due to theprogress timingmade of milestone payments related to the Company’s fleet renewal program. Qualifying withdrawal payments relate to milestone payments forin the construction of three new Alohavessels Classand vessels.the timing of related milestone payments. Capital expenditures (excluding vessel construction expenditures) were $30.3$55.7 million for the threesix months ended MarchJune 31,30, 2026, compared to $22.5$71.4 million for the threesix months ended MarchJune 31,30, 2025. Capital expenditures (excluding vessel construction expenditures) primarily relate to vessel maintenance related expenditures, the acquisition of containers, chassis and other equipment, and expenditures on other capital related projects. The increasedecrease in capital expenditures for the threesix months ended MarchJune 31,30, 2026, compared to the same prior year period primarily related to the timing of when vessel maintenance activities are performed and when expenditures on other capital related projects are incurred.

Changes in net cash used in financing activities for the threesix months ended MarchJune 31,30, 2026, compared to the threesix months ended MarchJune 31,30, 2025, were due to the following:

During the threesix months ended MarchJune 31,30, 2026, the Company paid $52.8$119.8 million to repurchase Matson common stock, compared to $66.9$160.4 million during the threesix months ended MarchJune 31,30, 2025. During the threesix months ended MarchJune 31,30, 2026, the Company paid $10.1$19.9 million in scheduled fixed interest debt payments, compared to $10.1$19.9 million during the threesix months ended MarchJune 31,30, 2025. During the threesix months ended MarchJune 31,30, 2026, the Company paid $25.1 million in withholding taxes related to vested restricted stock units, compared to $16.1$16.3 million during the threesix months ended MarchJune 31,30, 2025. During the threesix months ended MarchJune 31,30, 2026, the Company paid $11.0$22.0 million in dividends, compared to $11.3$22.3 million during the threesix months ended MarchJune 31,30, 2025. The decrease in dividend payments was due to a reduction in common stock outstanding, partially offset by an increase in dividends declared per share of common stock by the Company.

Working Capital: The Company had a working capital deficit of $93.5$67.8 million at MarchJune 31,30, 2026, compared to a working capital deficit of $55.5 million at December 31, 2025. Working capital is primarily impacted by the amount of net cash provided by operating activities, the amount of capital expenditures, the timing of collections associated with accounts receivable, prepaid expenses and other assets, and by the amount and timing of payments associated with accounts payable, accruals, income taxes and other liabilities. The decrease in the Company’s working capital at MarchJune 31,30, 2026, compared to December 31, 2025 is primarily due to lowera decrease in cash and cash equivalents as described above.

Capital Construction Fund: The Company’s CCF is described in Note 7 of Part I, Item 1 above. The Company utilizes its CCF to fund milestone payments for the construction of three new vessels. Cash on deposit and CCF investments as of MarchJune 31,30, 2026 and December 31, 2025 are as follows: