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REPORTABLE SEGMENTS
 12 Months Ended
Dec. 31, 2012
REPORTABLE SEGMENTS  
REPORTABLE SEGMENTS

13.          REPORTABLE SEGMENTS

 

Reporting segments are components of an enterprise that engage in business activities from which it may earn revenues and incur expenses, whose operating results are regularly reviewed by the chief operating decision maker to make decisions about resources to be allocated to the segment and assess its performance, and for which discrete financial information is available. The Company’s chief operating decision maker is its Chief Executive Officer.

 

Matson consists of two segments:

 

Ocean Transportation: The ocean transportation segment of Matson’s business, which is conducted through MatNav, is an asset-based business that generates revenue primarily through the carriage of containerized freight between various U.S. Pacific Coast, Hawaii, Guam, Micronesia, China and other Pacific island ports.  MatNav also records its share of income in the terminal joint venture in operating expenses within the ocean transportation segment, due to operations of the joint venture being an integral part of the Company’s business.

 

Logistics: The logistics segment of Matson’s business, which is conducted through Matson Logistics, is an asset-light based business that is a provider of domestic and international rail intermodal service (“Intermodal”), long-haul and regional highway brokerage, specialized hauling, flat-bed and project work, less-than-truckload services, expedited freight services, and warehousing and distribution services (collectively “Highway”).  Warehousing, packaging and distribution services are provided by Matson Logistics Warehousing, a wholly-owned subsidiary of Matson Logistics.

 

The accounting policies of the operating segments are described in the summary of significant accounting policies. Reportable segments are measured based on operating profit, exclusive of interest expense, general corporate expenses, and income taxes. Transactions between reportable segments are accounted for on the same basis as transactions with unrelated third parties.

 

Reportable segment information for 2012, 2011, and 2010 is summarized below (in millions):

 

 

 

For the Year Ended December 31,

 

 

 

2012

 

2011(1)

 

2010(1)

 

Revenue:

 

 

 

 

 

 

 

Ocean transportation

 

$

1,189.8

 

$

1,076.2

 

$

1,015.0

 

Logistics services

 

370.2

 

386.4

 

355.6

 

Total revenue

 

$

1,560.0

 

$

1,462.6

 

$

1,370.6

 

Operating Income:

 

 

 

 

 

 

 

Ocean transportation(2)

 

$

96.6

 

$

73.7

 

$

118.3

 

Logistics services

 

0.1

 

4.9

 

7.1

 

Total operating income

 

96.7

 

78.6

 

125.4

 

Interest expense, net

 

(11.7

)

(7.7

)

(8.2

)

Income from continuing operations before income taxes

 

85.0

 

70.9

 

117.2

 

Income taxes

 

33.0

 

25.1

 

46.7

 

Income from continuing operations

 

52.0

 

45.8

 

70.5

 

Discontinued operations

 

(6.1

)

(11.6

)

21.6

 

Net income

 

$

45.9

 

$

34.2

 

$

92.1

 

 

(1)         Prior year amounts restated for amounts treated as discontinued operations.

 

(2)         The ocean transportation segment includes approximately $3.2 million, $8.6 million, and $12.8 million of equity in earnings from its investment in SSAT for 2012, 2011, and 2010, respectively.

 

 

 

As of December 31,

 

As of December 31:

 

2012

 

2011

 

2010

 

Identifiable Assets:

 

 

 

 

 

 

 

Ocean transportation(3)

 

$

1,097.2

 

$

1,083.9

 

$

1,084.7

 

Logistics(4)

 

77.1

 

76.4

 

73.8

 

Other(5)

 

—

 

1,384.0

 

1,336.1

 

Total assets

 

$

1,174.3

 

$

2,544.3

 

$

2,494.6

 

Capital Expenditures:

 

 

 

 

 

 

 

Ocean transportation

 

$

37.0

 

$

44.2

 

$

69.4

 

Logistics(6)

 

1.1

 

3.0

 

1.8

 

Total capital expenditures

 

$

38.1

 

$

47.2

 

$

71.2

 

Depreciation and Amortization from Continuing Operations:

 

 

 

 

 

 

 

Ocean transportation

 

$

69.1

 

$

68.4

 

$

67.6

 

Logistics

 

3.4

 

3.2

 

3.2

 

Total depreciation and amortization

 

$

72.5

 

$

71.6

 

$

70.8

 

 

(3)         The ocean transportation segment includes approximately $59.6 million, $56.5 million, and $52.9 million related to its investment in SSAT as of December 31, 2012, 2011, and 2010, respectively.

 

(4)   Include goodwill of $27.0 million as of December 31, 2012, 2011, and 2010.

 

(5)         Includes assets related to discontinued operations from A&B and CLX2 of $1.4 billion and $1.3 billion as of December 31, 2011 and 2010, respectively.

 

(6)         Excludes expenditures related to Logistics’ acquisitions, which are classified as acquisition of businesses in Cash Flows from Investing Activities within the Consolidated Statements of Cash Flows.