<SEC-DOCUMENT>0001104659-14-079866.txt : 20141112
<SEC-HEADER>0001104659-14-079866.hdr.sgml : 20141111
<ACCEPTANCE-DATETIME>20141112171945
ACCESSION NUMBER:		0001104659-14-079866
CONFORMED SUBMISSION TYPE:	DEFA14A
PUBLIC DOCUMENT COUNT:		2
FILED AS OF DATE:		20141112
DATE AS OF CHANGE:		20141112
EFFECTIVENESS DATE:		20141112

FILER:

	COMPANY DATA:	
		COMPANY CONFORMED NAME:			Matson, Inc.
		CENTRAL INDEX KEY:			0000003453
		STANDARD INDUSTRIAL CLASSIFICATION:	WATER TRANSPORTATION [4400]
		IRS NUMBER:				990032630
		STATE OF INCORPORATION:			HI
		FISCAL YEAR END:			1231

	FILING VALUES:
		FORM TYPE:		DEFA14A
		SEC ACT:		1934 Act
		SEC FILE NUMBER:	001-34187
		FILM NUMBER:		141215126

	BUSINESS ADDRESS:	
		STREET 1:		1411 SAND ISLAND PARKWAY
		CITY:			HONOLULU
		STATE:			HI
		ZIP:			96819
		BUSINESS PHONE:		808-848-1211

	MAIL ADDRESS:	
		STREET 1:		1411 SAND ISLAND PARKWAY
		CITY:			HONOLULU
		STATE:			HI
		ZIP:			96819

	FORMER COMPANY:	
		FORMER CONFORMED NAME:	ALEXANDER & BALDWIN INC
		DATE OF NAME CHANGE:	19920703
</SEC-HEADER>
<DOCUMENT>
<TYPE>DEFA14A
<SEQUENCE>1
<FILENAME>a14-24366_18k.htm
<DESCRIPTION>8-K
<TEXT>


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<p align="center" style="margin:0in 0in .0001pt;text-align:center;"><b><font size="5" face="Times New Roman" style="font-size:18.0pt;font-weight:bold;">UNITED STATES</font></b></p>
<p align="center" style="margin:0in 0in .0001pt;text-align:center;"><b><font size="5" face="Times New Roman" style="font-size:18.0pt;font-weight:bold;">SECURITIES AND EXCHANGE COMMISSION</font></b></p>
<p align="center" style="margin:0in 0in .0001pt;text-align:center;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">Washington, D.C. 20549</font></b></p>
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<p align="center" style="margin:0in 0in .0001pt;text-align:center;"><b><font size="5" face="Times New Roman" style="font-size:18.0pt;font-weight:bold;">FORM&nbsp;8-K</font></b></p>
<p align="center" style="margin:0in 0in .0001pt;text-align:center;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
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<p align="center" style="margin:0in 0in .0001pt;text-align:center;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
<p align="center" style="margin:0in 0in .0001pt;text-align:center;"><b><font size="3" face="Times New Roman" style="font-size:12.0pt;font-weight:bold;">CURRENT REPORT</font></b></p>
<p align="center" style="margin:0in 0in .0001pt;text-align:center;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">&nbsp;</font></b></p>
<p align="center" style="margin:0in 0in .0001pt;text-align:center;"><b><font size="3" face="Times New Roman" style="font-size:12.0pt;font-weight:bold;">Pursuant to Section&nbsp;13 or 15(d)&nbsp;of The Securities Exchange Act of 1934</font></b></p>
<p align="center" style="margin:0in 0in .0001pt;text-align:center;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
<p align="center" style="margin:0in 0in .0001pt;text-align:center;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Date of Report (Date of earliest event reported):<b> November&nbsp;11, 2014</b></font></p>
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<p align="center" style="margin:0in 0in .0001pt;text-align:center;"><b><font size="5" face="Times New Roman" style="font-size:18.0pt;font-weight:bold;">MATSON,&nbsp;INC.</font></b></p>
<p align="center" style="margin:0in 0in .0001pt;text-align:center;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">(Exact Name of Registrant as Specified in its Charter)</font></p>
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<p align="center" style="margin:0in 0in .0001pt;text-align:center;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">HAWAII</font></b></p>
<p align="center" style="margin:0in 0in .0001pt;text-align:center;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">(State or Other Jurisdiction of<br>   Incorporation)</font></p>    </td>
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<p align="center" style="margin:0in 0in .0001pt;text-align:center;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">001-34187</font></b></p>
<p align="center" style="margin:0in 0in .0001pt;text-align:center;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">(Commission File Number)</font></p>    </td>
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<p align="center" style="margin:0in 0in .0001pt;text-align:center;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">99-0032630</font></b></p>
<p align="center" style="margin:0in 0in .0001pt;text-align:center;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">(I.R.S. Employer Identification No.)</font></p>    </td>   </tr>  </table>
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<p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
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<p align="center" style="margin:0in 0in .0001pt;text-align:center;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">1411 Sand Island Parkway</font></b></p>
<p align="center" style="margin:0in 0in .0001pt;text-align:center;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">Honolulu, Hawaii</font></b></p>
<p align="center" style="margin:0in 0in .0001pt;text-align:center;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">(Address of Principal Executive Offices)</font></p>    </td>
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<p style="margin:0in 0in .0001pt;"><b><font size="2" face="Times New Roman" style="font-size:1.0pt;font-weight:bold;">&nbsp;</font></b></p>    </td>
<td width="48%" valign="bottom" style="padding:0in 0in 0in 0in;width:48.92%;">
<p align="center" style="margin:0in 0in .0001pt;text-align:center;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">96819</font></b></p>
<p align="center" style="margin:0in 0in .0001pt;text-align:center;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">(Zip Code)</font></p>    </td>   </tr>  </table>
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<p align="center" style="margin:0in 0in .0001pt;text-align:center;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
<p align="center" style="margin:0in 0in .0001pt;text-align:center;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Registrant&#146;s telephone number including area code: <b>(808) 848-1211</b></font></p>
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<p align="center" style="margin:0in 0in .0001pt;text-align:center;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
<p align="center" style="margin:0in 0in .0001pt;text-align:center;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">(Former Name or former address, if changed since last report)</font></p>
<p align="center" style="margin:0in 0in .0001pt;text-align:center;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
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<p align="center" style="margin:0in 0in .0001pt;text-align:center;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
<p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Check the appropriate box below if the Form&nbsp;8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:</font></p>
<p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
<p style="margin:0in 0in .0001pt;"><font size="2" face="Wingdings" style="font-size:10.0pt;">o</font><font size="2" style="font-size:10.0pt;"> Written communications pursuant to Rule&nbsp;425 under the Securities Act (17 CFR 230.425)</font></p>
<p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
<p style="margin:0in 0in .0001pt;"><font size="2" face="Wingdings" style="font-size:10.0pt;">x</font><font size="2" style="font-size:10.0pt;"> Soliciting material pursuant to Rule&nbsp;14a-12 under the Exchange Act (17 CFR 240.14a-12)</font></p>
<p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
<p style="margin:0in 0in .0001pt;"><font size="2" face="Wingdings" style="font-size:10.0pt;">o</font><font size="2" style="font-size:10.0pt;"> Pre-commencement communications pursuant to Rule&nbsp;14d-2(b)&nbsp;under the Exchange Act (17 CFR 240.14d-2(b))</font></p>
<p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
<p style="margin:0in 0in .0001pt;"><font size="2" face="Wingdings" style="font-size:10.0pt;">o</font><font size="2" style="font-size:10.0pt;"> Pre-commencement communications pursuant to Rule&nbsp;13e-4(c)&nbsp;under the Exchange Act (17 CFR 240.13e-4(c))</font></p>
<p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
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<p style="margin:0in 0in .0001pt;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">Item 8.01.</font></b><b><font size="1" style="font-size:3.0pt;font-weight:bold;">&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; </font></b><b><font size="2" style="font-size:10.0pt;font-weight:bold;">Other Events.</font></b></p>
<p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
<p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">On November&nbsp;11, 2014, Matson,&nbsp;Inc. (the &#147;Company&#148;) held a conference call with investors and analysts to provide supplemental information regarding the proposed transaction</font><font size="2" style="font-size:10.0pt;"> by and among Matson Navigation Company,&nbsp;Inc. (&#147;Matson Navigation&#148;), a wholly owned subsidiary of the Company, Hogan Acquisition Inc., a wholly owned subsidiary of Matson Navigation, and Horizon Lines,&nbsp;Inc.&#160; A copy of the transcript used for the audio webcast is attached hereto as Exhibit&nbsp;99.1 and is incorporated herein by reference.</font></p>
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<p align="center" style="margin:0in 0in .0001pt;text-align:center;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">2<a name="PB_2_022415_5335"></a></font></p>
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<p style="margin:0in 0in .0001pt;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">Item 9.01</font></b><b><font size="1" style="font-size:3.0pt;font-weight:bold;">&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; </font></b><b><font size="2" style="font-size:10.0pt;font-weight:bold;">Financial Statements And Exhibits.</font></b></p>
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<p style="margin:0in 0in .0001pt;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">(d)&nbsp;Exhibits</font></b></p>
<p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
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<p align="center" style="margin:0in 0in .0001pt;text-align:center;"><b><font size="1" face="Times New Roman" style="font-size:8.0pt;font-weight:bold;">Exhibit</font></b></p>    </td>   </tr>
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<p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">99.1</font></p>    </td>
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<p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Audio   Webcast Transcript, dated November&nbsp;11, 2014</font></p>    </td>   </tr>  </table>
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<p align="center" style="margin:0in 0in .0001pt;text-align:center;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">3<a name="PB_3_022457_5796"></a></font></p>
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<p align="center" style="margin:0in 0in .0001pt;text-align:center;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">SIGNATURE</font></b></p>
<p align="center" style="margin:0in 0in .0001pt;text-align:center;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
<p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.</font></p>
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<p style="margin:0in 0in .0001pt;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">MATSON,&nbsp;INC.</font></b></p>    </td>   </tr>
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<p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">/s/   Dale B. Hendler</font></p>    </td>   </tr>
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<p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Dale   B. Hendler</font></p>    </td>   </tr>
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<p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Vice   President and Controller</font></p>    </td>   </tr>
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<p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Dated:   November&nbsp;12, 2014</font></p>    </td>
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<p align="center" style="margin:0in 0in .0001pt;text-align:center;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">4<a name="PB_4_022512_2897"></a></font></p>
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<p align="center" style="margin:0in 0in .0001pt;text-align:center;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">Exhibit&nbsp;Index</font></b></p>
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<p align="center" style="margin:0in 0in .0001pt;text-align:center;"><b><font size="1" face="Times New Roman" style="font-size:8.0pt;font-weight:bold;">Exhibit</font></b></p>    </td>   </tr>
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<p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>    </td>
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<p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">99.1</font></p>    </td>
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<p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Audio   Webcast Transcript, dated November&nbsp;11, 2014</font></p>    </td>   </tr>  </table>
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<p align="center" style="margin:0in 0in .0001pt;text-align:center;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">5<a name="PB_5_022547_3020"></a></font></p>
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<p align="right" style="margin:0in 0in .0001pt;text-align:right;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">Exhibit 99.1</font></b></p>
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<p align="center" style="margin:0in 0in .0001pt;text-align:center;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">MATSON,&nbsp;INC.</font></b></p>
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<p align="center" style="margin:0in 0in .0001pt;text-align:center;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">NOVEMBER 11, 2014 INVESTOR CONFERENCE CALL TRANSCRIPT</font></b></p>
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<p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Operator:</font></p>    </td>
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<p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Good   day, ladies and gentlemen, and welcome to the Matson Conference Call to   announce its acquisition of Horizon&#146;s Alaskan operations.</font></p>    </td>   </tr>
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<p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">At   this time, all participants are in a listen-only mode. Later, we will conduct   a question and answer session and instructions will be given at that time. If   anyone should require assistance during the program, please press star then   zero on your touchtone telephone. As a reminder, today&#146;s program is being   recorded.</font></p>    </td>   </tr>
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<p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">I   would now like to introduce your host in today&#146;s program, Jerome Holland   Director of Investor Relations. Please go ahead.</font></p>    </td>   </tr>
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<p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>    </td>
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<p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Jerome   Holland:</font></p>    </td>
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<p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>    </td>
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<p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Thanks,   (Jonathan), and aloha. Matt Cox, President and Chief Executive Officer; and   Joel Wine, Senior Vice President and Chief Financial Officer, are joining the   call today. Slides from this presentation are available for download at our   website, www.matson.com under the investor relations tab.</font></p>    </td>   </tr>
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<p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>    </td>
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<p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>    </td>
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<p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>    </td>
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<p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>    </td>
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<p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Before   we begin,&nbsp;I would like to remind you that during the course of this   call, we will make forward looking statements within the meaning of the   federal securities laws regarding expectations, predictions, projections or   future events. We believe that our expectations and assumptions are   reasonable. We caution you to consider the risk factors that could cause   actual results may differ materially from those in the forward-looking   statements in the press release, the presentation slides and this conference   call. These risk factors are described in our press release and are more   fully detailed under the caption &#147;Risk Factors&#148; on Pages&nbsp;8-14 of our   2013 Form&nbsp;10-K filed on February&nbsp;28, 2014, and in our subsequent   filings with the SEC.</font></p>    </td>   </tr>
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<p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Please   also note that the date of this conference call is November&nbsp;11, 2014, and   any forward looking statements that we make today are based on assumptions as   of this date. We undertake no obligation to update these forward-looking   statements.</font></p>    </td>   </tr>  </table>
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<p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">With   that,&nbsp;I&#146;ll turn the call over to Matt.</font></p>    </td>   </tr>
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<p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>    </td>
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<p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Matt   Cox:</font></p>    </td>
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<p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Thanks,   Jerome, and thanks to everyone for joining our call today.</font></p>    </td>   </tr>
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<p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>    </td>
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<p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">As   you will have seen earlier today, we issued a press release announcing our   acquisition of Horizon which when closed will expand our platform to Alaska.   I&#146;m very excited to announce this transaction because it represents a rare   opportunity to grow our business in the U.S. domestic markets and strengthens   our position as a leading Jones Act carrier with over 130 years of experience.</font></p>    </td>   </tr>
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<p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Under   the terms of our agreement, Matson will acquire the stock of Horizon   following the sale of Horizon&#146;s Hawaii business to Pasha which was announced   a short while ago. Along with the sale of its Hawaii business, Horizon has   also separately announced that it intends to shut down its Puerto Rico   operations by the end of 2014.</font></p>    </td>   </tr>
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<p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">On   Slide 4, you can see why we believe this transaction makes so much sense and   will deliver significant value. The acquisition of Horizon represents a   natural geographic expansion of our platform, allowing us to grow and enhance   our revenue by approximately $330 million per year, further positioning us as   the leading Jones Act Ocean Carrier in the Pacific.</font></p>    </td>   </tr>
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<p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">We   expect to achieve synergies from multiple sources including corporate   overhead, SG&amp;A and in vessel and transportation management cost areas.   But most importantly, we believe this transaction creates compelling value   for our shareholders.</font></p>    </td>   </tr>
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<p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">We   expect the business to contribute approximately $70 million in annual run   rate EBITDA before the end of the second year post closing. Excluding   one-time items, we expect the transaction to be immediately accretive to   Matson&#146;s EPS providing low to mid-teens annual EPS accretion in years one and   two at approximately 35 cents to 45 cents per share annually thereafter.</font></p>    </td>   </tr>
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<p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">As   you know, we are focused on cash flow generation and in this transaction, we   expect very significant cash flow per share accretion of approximately $1   annually within two years.</font></p>    </td>   </tr>  </table>
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<p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Let   me take you quickly through the transaction highlights on Slide 5. The deal   price is 72 cents per share plus the repayment of debt at closing. This   transaction is conditioned on Horizon&#146;s sale of its Hawaii business to Pasha   for $141.5 million.</font></p>    </td>   </tr>
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<p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Separately,   Horizon also announced today that it plans to cease its Puerto Rico service   by the end of 2014, a decision Horizon made independent of our transaction   and one that they disclosed to us in our due diligence process. The boards of   directors of both companies have unanimously approved this transaction. The   transaction will require the approval of 50.1 percent of Horizon shareholders   voting at their meeting. And importantly, Horizon shareholders representing   55 percent of the fully diluted equity or 41 percent of the outstanding   voting stock have agreed to vote their shares in support of the transaction.</font></p>    </td>   </tr>
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<p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Matson   shareholders do not need to vote on the transaction because we&#146;re paying   cash. Matson will finance the transactions through cash on hand and   borrowings under our existing revolving credit facility. Subject to antitrust   clearance, Horizon shareholder approval and other customary closing   conditions, we expect this transaction to close in 2015.</font></p>    </td>   </tr>
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<p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Slide   6 represents an overview of the transaction from a graphical perspective just   to illustrate further the mechanics of the deal.</font></p>    </td>   </tr>
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<p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Turning   to Slide 7, we&#146;re very encouraged by this steady long-term prospects of the   Alaska trade, particularly given Horizon&#146;s position as a leading container   shipping operator currently serving the Alaska market, a position that it has   held for over 50 years. The Alaska market mirrors Hawaii in many ways despite   different underlying economic drivers.</font></p>    </td>   </tr>
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<p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Both   markets depend on reliable, superior, and timely container cargo service as   part of vital supply lifelines, hallmarks with the Matson brand. Also similar   to Hawaii, Alaska is a market with loyal customers that values premium   service. In fact, approximately 80 percent of the business overlaps with   Matson&#146;s Hawaii customers.</font></p>    </td>   </tr>  </table>
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<p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Overall,   the Alaska container freight market is characterized by well-balanced supply   and demand. The economy is solid showing long-term steady growth and   horizon&#146;s Alaska fleet operates at high utilization levels.</font></p>    </td>   </tr>
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<p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Approximately   3/4 of Horizon&#146;s volume in Alaska comes from this stead northbound head haul   lane which is driven by Alaska&#146;s general economy, energy and mineral resource   development and military cargo whereas Horizon&#146;s southbound volume is fairly   seasonal with fisheries in the seafood industry being the key drivers.   Overall, we view this to be a leading Jones Act franchise in an attractive   market.</font></p>    </td>   </tr>
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<p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">On   Slide 8, a cornerstone of this valuable franchise is a reliable operating   platform that is focused on the same principles at Matson, customer service   and on-time arrivals. Horizon deploys three diesel-powered vessels that   provide twice weekly service between Tacoma, anchorage and Kodiak and weekly   service to and from Dutch Harbor.</font></p>    </td>   </tr>
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<p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">The   three active vessels are well-maintained and well-sized for the market with a   remaining useful life of approximately 10 years. Horizon is the only Jones   Act carrier serving Kodiak and Dutch Harbor, providing a critical life line   to those communities. Horizon also has strong terminal operations that   contributes to profitability in Alaska, providing exclusive stevedoring and   slot charter service at Kodiak and Dutch Harbor to the international liners   Maersk and APL.</font></p>    </td>   </tr>
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<p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">I   would now like to turn it over to Joel to run through the financial   highlights of the transaction. Joel?</font></p>    </td>   </tr>
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<p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Joel   Wine:</font></p>    </td>
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<p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>    </td>
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<p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Thanks,   Matt.</font></p>    </td>   </tr>
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<p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Let   me first cover our financial expectations for the transaction in a little   more detail. Historically, over the last several years, the Alaska business   has produced about 330 million in annual revenues and around the mid-80s in   terms of millions of dollars of EBITDA before any corporate overhead   allocations from the existing Horizon corporate structure.</font></p>    </td>   </tr>  </table>
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<p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Our   goal from an integration perspective will be to migrate the Alaska business   over to our existing Matson operating financial and IT platforms and we   expect to complete this process sometime within 12 to 24 months post closing.</font></p>    </td>   </tr>
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<p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">At   the end of that process, we think we will need to add about $15 million in   annually-recurring corporate cost to support the Alaska business on our   platforms. Thus, we expect approximately 70 million in annual run-rate EBITDA   from the business to be the result within 24 months.</font></p>    </td>   </tr>
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<p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Some   portion of the first 12-24 months post closing will also likely coincide with   some important capital projects for the Alaska vessels which I will elaborate   on in a minute. So as detailed on Slide 9, working down in an illustrative   income statement for this business, we expect approximately 30 million to 35   million in new depreciation and amortization. The final amount of which will   be determined shortly after closing and dictated by the finalization of GAAP   purchase price allocations.</font></p>    </td>   </tr>
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<p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Pro   forma incremental interest, expense and income taxes should total around $20   million in aggregate which yields approximately 35 to 45 cents per share of   EPS accretion. The same numbers after subtracting maintenance CapEx produce   approximately $1 of incremental cash flow per share of the company which we   think is very compelling for shareholder value. Note that both these tables   exclude one-time items which I will comment on in a moment.</font></p>    </td>   </tr>
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<p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Turning   to Slide 10, the current plan for the three main Alaska vessels is to install   main engine scrubbers beginning in the second half of 2015 and to be   completed by the end of 2016. The estimated capital cost will be about $6   million to $8 million per vessel or $18 to $24 million in aggregate.</font></p>    </td>   </tr>
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<p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">During   the scrubber installation period, we expect a higher cost reserve steamship   will need to be deployed as a relief vessel which will increase vessel   operation costs and modestly impact operating results. So during this period,   in the second half of 2015 and 2016, the EBITDA generation of the business   may be modestly lower than the $70 million run-rate which is one of</font></p>    </td>   </tr>  </table>
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<p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">the   main reasons why we are commenting that the EPS accretion will likely be a   little lower in that first 12 to 24-month period of time.</font></p>    </td>   </tr>
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<p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Overall,   the scrubber installation investment should position the vessels well to meet   the future environmental control area or ECA requirements regarding   low-sulfur fuel emission and for the long term, we view this to be a good   investment for the business.</font></p>    </td>   </tr>
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<p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">In   terms of regular annual maintenance CapEx needs for the business, we expect   approximately $5 million to $8 million to cover normal vessel and equipment   maintenance, crane maintenance and replenishment of containers and chassis in   this market.</font></p>    </td>   </tr>
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<p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Turning   to sources and uses on Slide 11, we have readily available funding sources to   consummate the transaction. And for our pro forma Matson balance sheet as   shown on the next slide, we believe that Matson will continue to maintain   strong investment-grade metrics with that EBITDA staying in the mid twos   range with plenty of headroom on our debt covenants.</font></p>    </td>   </tr>
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<p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">And   so, it is important to also note that we did not expect this transaction to   have any impact on our previously announced vessel newbuild program nor is   there any anticipated change through our dividend policy. We remain confident   in our core business cash flow generation to fund these important items.</font></p>    </td>   </tr>
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<p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">The   table on the following, Slide 13, shows the buildup of transaction value of   the transaction value of $456 million based upon Horizon&#146;s recorded balance   sheet, net debt and its most recent 10-Q filing. This implies an enterprise   value to EBITDA multiple of 6.5 times for this transaction based upon the $70   million of expected run-rate EBITDA, post integration and scrubber   installation.</font></p>    </td>   </tr>
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<p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">We   also expect to grow to $70 million of run-rate EBITDA overtime as you would   expect from both the underpinning of growth in the Alaska market as well as   successful operating execution within the business itself. There are also two   important points to make regarding the $456 million transaction value.</font></p>    </td>   </tr>  </table>
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<p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">The   first is at the Hawaii business sale is not expected to create any corporate   level of taxes payable due to horizon&#146;s existing NOLs which are expected to   fully shield any gain on the Hawaii business sale. Secondly, Horizon&#146;s net   debt number is obviously subject to change between the September&nbsp;21,   2014 date and the most recent 10-Q and the eventual closing of this   transaction.</font></p>    </td>   </tr>
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<p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">The   net debt at the time of the closing is likely to be higher than the amount   shown on this page&nbsp;and will be influenced primarily by Horizon&#146;s cash   flow from operations in the interim period between selling and closing and   also the pre-tax cash shutdown cost of the Puerto Rico operations which   Horizon commented today are expected to be in the range of $85 million to $95   million.</font></p>    </td>   </tr>
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<p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>    </td>
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<p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Separately,   in terms of one kind &#151; in terms of one-time items for this transaction, we   expect two buckets for Matson. The first is one-time transaction cost of   approximately $25 million to be incurred at or around the time of closing,   the largest components of which would include required Horizon debt repayment   breakage costs, financial advisory fees and legal fees.</font></p>    </td>   </tr>
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<p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">The   second bucket is integration cost of approximately $20 million to $25 million   to be incurred in the first 12 months post closing, the largest components of   which are tied to eliminating operating and overhead redundancies. Both of   these amounts are pre-tax figures.</font></p>    </td>   </tr>
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<p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>    </td>
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<p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">So   now, turning to Slide 14, let me comment on what we think this transaction   does to overall shareholder thesis over the next few years. With this   transaction, we see new and meaningful growth value creation catalysts coming   from the Alaska business including immediate EPS and cash flow accretion, the   successful integration of the business on to our operating platforms which   will lead to even greater accretion overtime and the Alaska market adding   additional long-term growth prospects to our platforms.</font></p>    </td>   </tr>
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<p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">In   addition, we expect our core business to continue growing through key drivers   such as the Hawaii container volumes, premium rates in our China services,   steady, incremental volume potential in Guam and improving performance of   both SSAT and logistics.</font></p>    </td>   </tr>  </table>
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<p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">The   most important of these drivers has historically tended to be Hawaii volumes   where we continue to believe we are in the early stages of the construction   demand cycle for our container volumes.</font></p>    </td>   </tr>
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<p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">And   finally, looking a little longer term, we remain very excited about the   economic benefit coming down the road from our two new aloha class ships to   be delivered in 2018. So as you add it all up, we see multiple potential   catalyst to produce greater shareholder value over the next several years.   With that, let me turn the call back over to the operator to take your   questions.</font></p>    </td>   </tr>
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<p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Operator:</font></p>    </td>
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<p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Certainly,   ladies and gentlemen, if you have a question at this time, please press star   then one on your touchtone telephone. If your question has been answered and   you&#146;d like to remove yourself from the queue, please press the pound key.</font></p>    </td>   </tr>
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<p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Our   first question comes from the line of Jack Atkins from Stephens. Your   question please?</font></p>    </td>   </tr>
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<p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>    </td>
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<p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Jack   Atkins:</font></p>    </td>
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<p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>    </td>
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<p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Good   afternoon guys and congratulations on this transaction.</font></p>    </td>   </tr>
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<p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>    </td>
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<p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Matt   Cox:</font></p>    </td>
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<p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Thanks,   Jack.</font></p>    </td>   </tr>
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<p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Joel   Wine:</font></p>    </td>
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<p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Thanks,   Jack.</font></p>    </td>   </tr>
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<p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Jack   Atkins:</font></p>    </td>
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<p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">So,&nbsp;I   guess, just this first-off, just a walk to the math one more time on the   purchase price, so it&#146;s $456 million and then with the shutdown cost of   Puerto Rico, would you expect that to be additive to what you&#146;re ultimately   going to pay for these assets at the time of closing just &#151; I just want to   make sure I&#146;m understanding sort of the total enterprise value at the time of   closing.</font></p>    </td>   </tr>
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<p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Joel   Wine:</font></p>    </td>
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<p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">So   by nature, that&#146;s going to be a projection or expectation. You know,   obviously, Jack. So the number &#151; important number here is the Horizon net   debt number on the table of 528.4, so that&#146;s the number as of the most recent   cue so where will that be at closing. So, first thing is in terms of timing,   how long will that be and we don&#146;t know. As Matt said in his comments, we   expect closing to be in 2015 &#133;</font></p>    </td>   </tr>  </table>
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<p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Jack   Atkins:</font></p>    </td>
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<p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Sure.</font></p>    </td>   </tr>
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<p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Joel   Wine:</font></p>    </td>
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<p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&#133;   could be first half, second half of the year, we don&#146;t know. But I would say,   Jack, for modeling purposes, you know, using a middle of the year type   number, you know, we&#146;re fine with that for modeling purposes.</font></p>    </td>   </tr>
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<p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">So   in that context, you know, at the end &#151; in the middle of the year, you&#146;ve got   &#151; what we say, what we&#146;re saying is there&#146;s two main things that would effect   this net debt number. The first is, you know, what&#146;s Horizon generally doing   in terms of normal cash flow generation in their business. And this year, you   know, year-to-date, in the nine months year-to-date, their net debt number is   up about $17 million so you might see a little bit of creep in this to their   normal ordinary course operations and their increase debt cost.</font></p>    </td>   </tr>
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<p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">But   what we&#146;re also saying is that the larger effect is likely to be the cash   effect of this Puerto Rico shutdown of operations items. So they announced   today that those items would be about $85 million to $95 million of cash   cost, Jack, and from Matson on an after-tax basis, you know, that&#146;s a number   around $70 million.</font></p>    </td>   </tr>
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<p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Jack   Atkins:</font></p>    </td>
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<p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">OK.   OK. So just to clarify, the fairway &#151; just to add all these up is to take the   after tax impact of the shutdown cost, small amount of likely continuing   negative cash flow from horizon over the &#151; until the closing plus the 456.</font></p>    </td>   </tr>
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<p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Joel   Wine:</font></p>    </td>
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<p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Yes.   I mean, you could &#151; that would be &#151; that would be a fair way to make   projected estimates going forward.</font></p>    </td>   </tr>
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<p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Jack   Atkins:</font></p>    </td>
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<p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">OK.   That&#146;s great. And then just for my follow-up, could you comment about, you   know, the utilization of Horizon&#146;s current Alaska fleet and, you know, where,   sort of, you know, is the volume level in relationship to prior cycles, you   know,&nbsp;I&#146;m just trying to understand, you know, as it relates to your   Hawaii business, you know, we&#146;re expecting, you know, increased volumes   overtime, you know, the same thing happening, you know, with Alaska, so just   trying to understand where we are in that particular state cycle.</font></p>    </td>   </tr>
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<p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Matt   Cox:</font></p>    </td>
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<p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Sure,   Jack. This is Matt. I can take a crack at it.</font></p>    </td>   </tr>  </table>
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<p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">In   our due diligence process, what we understood about the seasonality of that   trade is that it&#146;s more pronounced than some of Matson&#146;s other businesses   partly because of when the construction activity occurs in the summer or   better weather months and in some cases, just related to getting cargo   northbound into more remote areas.</font></p>    </td>   </tr>
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<p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">So   it&#146;s typically the case that during the summer months, the ship is   essentially full. If you&#146;re to look at it on a full-year basis, we understand   their northbound utilization to be something around 85 percent which   effectively means they&#146;re full on the summer months and they&#146;re, you know,   obviously less full in the winter months to get to that 85 percent and when   cargo volumes expand, they either &#151; it moves earlier or later in the fringes   of the spring or fall or they have purchased slots on a competitors service   as well and they&#146;ve done both of those as volumes have gone up and down   depending on market cycles.</font></p>    </td>   </tr>
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<p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Southbound,   we understand they&#146;re wide open and the volumes there are more dependent on   the seasonality, seafood and other kinds of things and, you know, some years   fish move in bigger quantities and other seasons and types of fish. So,   that&#146;s more seasonal on annual based on those flow. So that&#146;s the general way   that volume works in this trade.</font></p>    </td>   </tr>
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<p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Jack   Atkins:</font></p>    </td>
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<p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">OK,   Matt. Thanks so much for that color. And once again, guys, congratulations.</font></p>    </td>   </tr>
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<p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>    </td>
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<p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Joel   Wine:</font></p>    </td>
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<p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Thanks,   Jack.</font></p>    </td>   </tr>
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<p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>    </td>
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<p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Matt   Cox:</font></p>    </td>
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<p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Thanks,   Jack.</font></p>    </td>   </tr>
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<p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Operator:</font></p>    </td>
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<p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Thank   you. Our next question comes from the line of Kevin Sterling from BB&amp;T   Capital Market. Your question, please.</font></p>    </td>   </tr>
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<p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>    </td>
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<p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Kevin   Sterling:</font></p>    </td>
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<p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Thank   you. Aloha, gentlemen.</font></p>    </td>   </tr>
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<p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Joel   Wine:</font></p>    </td>
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<p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Hi,   Kevin.</font></p>    </td>   </tr>
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<p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Matt   Cox:</font></p>    </td>
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<p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Hi,   Kevin.</font></p>    </td>   </tr>  </table>
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<p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Kevin   Sterling:</font></p>    </td>
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<p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">I   would second what Jack said, congratulations on a great acquisition that you   &#151; I know you&#146;re excited to do this and been wanting this for a long time.</font></p>    </td>   </tr>
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<p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Matt   Cox:</font></p>    </td>
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<p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Thank   you.</font></p>    </td>   </tr>
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<p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Kevin   Sterling:</font></p>    </td>
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<p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Let   me start, you know, with Horizon shutting down Puerto Rico, if I&#146;m not   mistaken, they have a commitment to the multi-employer pension plan that they   pull out of Puerto Rico, there may be some &#151; there may be a liability that   they might have to pay. Would that fall on you guys? Could you maybe talk a   little bit about how that might work?</font></p>    </td>   </tr>
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<p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Joel   Wine:</font></p>    </td>
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<p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">So,   Kevin, generally, this is a &#151; this is a stock acquisition so we will take their   non-Hawaii business liabilities and it may include the ongoing liability of   what you just mentioned for the multi-employer withdrawal. And what I would   tell you from a sizing perspective is they announced that 85 million to 95   million cash number, rough order of magnitude approximately half of it is   coming from the multi-employer plan liability.</font></p>    </td>   </tr>
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<p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">And   that is something we would pick up. The thing on the timing of closing, it   happened before or after but that would be an ongoing obligation that we would   pick up.</font></p>    </td>   </tr>
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<p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Kevin   Sterling:</font></p>    </td>
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<p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">OK.   All right. Thank you for clarifying that.</font></p>    </td>   </tr>
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<p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">And   then with Pasha acquiring the Horizon Hawaii assets, as sooner they&#146;re   acquiring the vessels and the containers, do you know what will happen with   those vessels? Because,&nbsp;I guess, one would worry if too much capacity   coming to the trade lane but if I&#146;m not mistaken, those Hawaiian vessels of   Horizon are much older than what you&#146;re getting in the Alaska trade lane. Do   you know if would those vessels be scrapped? Do you have any idea what might   be the intentions with that additional kind of &#151; with that additional   capacity there?</font></p>    </td>   </tr>
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<p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Matt   Cox:</font></p>    </td>
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<p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Yes,   Kevin, let me answer that. First of all, we don&#146;t know. This process was very   carefully set up by Horizon line so that we would really have no visibility   to their process to make sure that, you know, we had no visibility or   influence or knowledge of what their plans are.</font></p>    </td>   </tr>  </table>
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<p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">So   as we &#151; as we are here today, we have no idea what&#146;s going to happen. But I   would say, generally, that if you look at the market, Horizon lines is purely   a container competitor and if you look at Pasha, Pasha operates one   roll-on/roll-off vessel today and as you know, they&#146;re going to be   introducing a second roll-on/roll-off vessel with some limited container   handling capability.</font></p>    </td>   </tr>
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<p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">And   so, you know, the way we see those is very different markets neither is in   the other market. So, you know, our expectations is that the competitive   landscape would remain relatively unchanged. That&#146;s our best guess.</font></p>    </td>   </tr>
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<p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Kevin   Sterling:</font></p>    </td>
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<p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">OK.   All right. Thank you. And one last question, if you don&#146;t mind, Horizon has   an older vessel in reserve in Alaska and they built 1973, it&#146;s steam powered,   what would you do with that vessel? I think you said you would run it, kind   of, you know, when you&#146;re retrofitting some of the other equipment but kind   of long term, what&#146;s your plan with that older vessel and how much capital   will be required if you were to reinvest in that vessel to kind of bring it   up to meet all the eco requirements?</font></p>    </td>   </tr>
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<p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Matt   Cox:</font></p>    </td>
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<p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Kevin,   we&#146;re not commenting on any of the specific vessel plans. What we did called   out in our slides were the three core active vessels that they used, the   diesel vessels that were built in 1987 which are the core vessels that operate   the Alaska business. In total, there&#146;s nine vessels that would come with us   in the transaction so there&#146;s six others that are steam and we&#146;re not   commenting on the specifics of any of those six other vessels.</font></p>    </td>   </tr>
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<p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Kevin   Sterling:</font></p>    </td>
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<p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">OK.   But since &#151; but you can still operate, even though there&#146;s steam, you can   still operate those for a couple more years until the sulfur requirement   kicks in. Is that right?</font></p>    </td>   </tr>
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<p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Matt   Cox:</font></p>    </td>
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<p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">That&#146;s   correct. This is Matt. Yes, so we have until 2021, the ECA phases out steam   vessels. So we have until that time to look at these surplus vessels and, as   you know, Matson has some steam vessels and we&#146;re going to be going through a   determination of what are the reserve requirements and dry dock rotations and   all that. That work will be done, you know, over the next few years.</font></p>    </td>   </tr>  </table>
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<p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">But,   Joel&#146;s right, we&#146;re not in the position to comment on that at this point.</font></p>    </td>   </tr>
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<p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Kevin   Sterling:</font></p>    </td>
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<p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Got   you. OK, gentlemen, thanks so much for your time. Congratulations on a great   deal.</font></p>    </td>   </tr>
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<p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Matt   Cox:</font></p>    </td>
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<p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Thank   you, Kevin.</font></p>    </td>   </tr>
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<p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>    </td>
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<p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Joel   Wine:</font></p>    </td>
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<p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Thanks,   Kevin.</font></p>    </td>   </tr>
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<p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>    </td>
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<p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Operator:</font></p>    </td>
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<p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Thank   you. Our next question comes from the line of Michael Webber from Wells Fargo</font></p>    </td>   </tr>
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<p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Michael   Webber:</font></p>    </td>
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<p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Good   afternoon, guys. How are you?</font></p>    </td>   </tr>
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<p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>    </td>
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<p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Matt   Cox:</font></p>    </td>
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<p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>    </td>
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<p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Hi,   Mike.</font></p>    </td>   </tr>
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<p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>    </td>
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<p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Joel   Wine:</font></p>    </td>
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<p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>    </td>
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<p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Hi,   Mike.</font></p>    </td>   </tr>
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<p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Michael   Webber:</font></p>    </td>
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<p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Joel,&nbsp;I   wanted to dig in to the run rate EBITDA you guys are using from the   transaction and you kind of touched on your prepared remarks a bit but I was   hoping to maybe dig in to,&nbsp;I guess, what kind of margins and,&nbsp;I   guess, spot utilization is kind of embedded in that &#151; in that $70 million   number and maybe if you can&#146;t get in the specifics, where do those fall   relative to what we&#146;re used to seeing out of your Hawaiian business and what   sort of room for improvement you think you could see there?</font></p>    </td>   </tr>
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<p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>    </td>
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<p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Joel   Wine:</font></p>    </td>
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<p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Well,&nbsp;I   would just make the first observation on margin, Michael, which is we&#146;re   saying 70 million of run rate off of &#151; and we said revenues are approximately   330 million so that quick math tells you 21 percent so that&#146;s higher than &#151;   that&#146;s higher than our current ocean transportation EBITDA margin, if not   dramatically higher.</font></p>    </td>   </tr>
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<p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">But   that&#146;s the result. Two things, one is good utilization in this market. We   commented that these vessels have good utilization, high utilization rates.   And the second piece is that this is really a bolt-on deal for us.</font></p>    </td>   </tr>  </table>
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<p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">So   it&#146;s a division within horizon today and we&#146;re going to bolt it on to our   platforms. We&#146;re going to &#151; we&#146;re going to have 15 million more incorporate   costs like we talked about but there&#146;s some efficiency there as well.</font></p>    </td>   </tr>
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<p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">So   the net results is that a little bit higher margin than you see today in our   ocean trans business. That make sense?</font></p>    </td>   </tr>
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<p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Michael   Webber:</font></p>    </td>
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<p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Yes.   That does.</font></p>    </td>   </tr>
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<p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Matt,&nbsp;I   wanted to touch on,&nbsp;I guess, the earlier question around Pasha. And I   guess maybe coming at that a different way with them kind of,&nbsp;I guess,   building a bit more of a presence there. In your experience around that   trade, if you can, on an aggregate basis, how close would they be to,&nbsp;I   guess, an inflection point, right, that they would need to go in and   really,&nbsp;I guess, kind of investigate up to, you know, a certain stream   that would make more sense if you kind of follow what I&#146;m saying, right, and   there are certain tonnage points that make more sense than others.</font></p>    </td>   </tr>
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<p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Is   this when you look at this, in experience, does this push them to a point   where you think they would become more active in that market or not?</font></p>    </td>   </tr>
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<p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Matt   Cox:</font></p>    </td>
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<p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Yes,&nbsp;I   don&#146;t know. It would be pure speculation. The only &#151; the best way to answer   that is the same way I answered the last one is that we don&#146;t expect to have   significant competitive change in landscape as a result of this.</font></p>    </td>   </tr>
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<p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Michael   Webber:</font></p>    </td>
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<p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">OK.   All right. Fair enough. Thanks for your time. Thanks for the time, guys.</font></p>    </td>   </tr>
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<p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Matt   Cox:</font></p>    </td>
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<p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>    </td>
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<p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">OK.</font></p>    </td>   </tr>
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<p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>    </td>
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<p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>    </td>
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<p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>    </td>   </tr>
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<p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Joel   Wine:</font></p>    </td>
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<p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>    </td>
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<p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">OK.   Thanks. Bye.</font></p>    </td>   </tr>
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<p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>    </td>
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<p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Operator:</font></p>    </td>
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<p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Thank   you. Our next question comes from the line of Ben Nolan from Stifel. Your   question, please?</font></p>    </td>   </tr>
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<p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Benjamin   Nolan:</font></p>    </td>
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<p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Hi,   guys. Congratulations. I&#146;ve been waiting a long time for this call.</font></p>    </td>   </tr>
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<p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>    </td>
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<p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Matt   Cox:</font></p>    </td>
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<p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>    </td>
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<p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Thanks,   Ben.</font></p>    </td>   </tr>  </table>
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<p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Benjamin   Nolan:</font></p>    </td>
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<p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Yes.   I had a couple of questions. My first one sort of relates to the Puerto Rico   business and you did, Joel, you did a good job, sort of, outlining where the   cost lie in addition to sort of what you&#146;re showing here.</font></p>    </td>   </tr>
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<p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">But   I was curious, you know, are those &#151; are those cost of that $85 million to   $90 million, is that net of some of the asset that you would adhere there?   And, you know, obviously there&#146;s the ships. I don&#146;t know if there would be   any remaining NOLs that you would be able to get? I mean, is there other &#151;   are there other things that we should include into that calculation on the   asset side rather than just the liability?</font></p>    </td>   </tr>
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<p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">No,   those are just the liabilities. Those are the cash cost of the liabilities   that they would incur to shut it down. So that does not include any, you   know, assets or future activity on those assets. So those are shutdown costs.</font></p>    </td>   </tr>
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<p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">OK.   So other than &#151; other than the ships themselves, what other assets should we   think about or part of that Puerto Rico that would be inherited by you guys?</font></p>    </td>   </tr>
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<p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Generally,   normal equipment. So, chassis, gensets, containers, those sorts of thing. So,   normal ocean carrier equipment.</font></p>    </td>   </tr>
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<p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">OK.   And you would not envision any issues incorporating those into your existing   platform,&nbsp;I would assume, right? That&#146;s pretty fungible type equipment?</font></p>    </td>   </tr>
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<p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Yes.   Those are, by definition, transportation highly removable assets. I mean,   Puerto Rico is a long way away.</font></p>    </td>   </tr>
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<p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Yes.</font></p>    </td>   </tr>
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<p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">But,   yes, those assets can be moved to anywhere, just a matter of cost and trying   to integrate them into your network.</font></p>    </td>   </tr>
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<p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">OK.   That&#146;s helpful. And then what about NOLs? Do you think &#151; I know you mentioned   that and I know that they did have some related for that business but do you   think that any of them will make the way all the way through the process?</font></p>    </td>   </tr>  </table>
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<p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Yes.   Good question, Ben. The answer is, yes, small amount and modest amount and   we&#146;ll receive some incremental benefit from that. The vast majority of which   will be consumed in the upfront Hawaii business sale.</font></p>    </td>   </tr>
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<p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">But   there&#146;s not enough post closing ongoing for Matson that where it&#146;s going to   make any kind of material change, we believe, to effective tax rate going   forward pro forma for the combined company.</font></p>    </td>   </tr>
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<p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Benjamin   Nolan:</font></p>    </td>
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<p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">OK.   Good. And then more broadly speaking. When you think of that integrating the   Alaska business into your existing West Coast operation, can you, maybe, walk   me through some of the things that you think using their low-hanging fruit,   where are areas where you&#146;re putting it in, bolting it on as you say, to what   you already have. Could you consolidate terminals? Could you,&nbsp;I don&#146;t   know, use fewer spares for the combined fleets? Any idea what &#151; how I should   think about the synergistic benefit?</font></p>    </td>   </tr>
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<p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Matt   Cox:</font></p>    </td>
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<p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Sure,   this is Matt. I&#146;ll take a crack at that.</font></p>    </td>   </tr>
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<p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">There   were, you know, three or four buckets and you&#146;ve outlined several of them   already. The first one is to leverage Matson&#146;s back office accounting   customer service infrastructure and what that would mean is we would &#151; when   we&#146;re ready and, you know, we&#146;re comfortable that the systems are going to   allow that would be to move all those transaction through system which would   allow us to eliminate a significant amount of G&amp;A and overhead and   infrastructure that Horizon has in place and put it on to our existing system   and that&#146;s part of the economics that Joel mentioned when he talked about his   $70 million run rate which is 85 million of gross EBITDA of the business and   15 million in overhead. So it&#146;s going to cost us small &#151; a smaller amount of   incremental G&amp;A to bolt that on to our existing back office platform.</font></p>    </td>   </tr>
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<p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">The   second area as you pointed out are in equipment, in maintenance and the use   of reserve vessels and the numbers of reserve vessels will need in class for   dry dock relief. There may be opportunities for some terminal consolidation.   There may be opportunities for some small amounts of logistics in inland</font></p>    </td>   </tr>  </table>
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<p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">transportation.   There&#146;s a whole basket of potentials synergy and those are &#151; most of those   are baked into the kinds of EBITDA run rate that Joel had mentioned.</font></p>    </td>   </tr>
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<p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">And   then overtime, we&#146;ll be looking for more. But I think the significant   ones,&nbsp;I think, are incorporated into our thinking at this point.</font></p>    </td>   </tr>
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<p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Benjamin   Nolan:</font></p>    </td>
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<p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">OK.   That&#146;s very helpful, Matt.</font></p>    </td>   </tr>
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<p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">And   then last one for me is do you think there is, and maybe my geography just   needs a little work, but do you think that there would be any potential to sort   of extend the expedited service including Alaska, you know, obviously the far   reaches of Alaska &#151; Dutch Harbor is not too far away from Japan, for instance   &#151; is that something that, you know, even make sense logistically that might   be a potential for some point on the line?</font></p>    </td>   </tr>
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<p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Matt   Cox:</font></p>    </td>
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<p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Yes.   The way I would answer that is to say that&#146;s certainly something to look at.   An important part of this Alaska, Horizon Alaska&#146;s revenue source is   servicing Maersk and APL at Dutch Harbor. They&#146;re carrying cargo from those   areas in Kodiak and Dutch to Asia, doing the (stevedoring) services for them   as they pass by. We don&#146;t envision to answer a part of a question you asked.   Any change to our existing CLX expedited service, it&#146;s too far out of the way   and we&#146;re chockablock full on our existing service in both directions.</font></p>    </td>   </tr>
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<p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Is   there an opportunity overtime to look at, you know, other potential ways to   link our services with Asia? Sure. We&#146;ll look at it but I certainly wouldn&#146;t   put any kind of near-term benefit in thinking about that. But it&#146;s certainly   something we might look at post closing.</font></p>    </td>   </tr>
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<p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Benjamin   Nolan:</font></p>    </td>
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<p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">OK.   Perfect. And again, guys, this is a real marquee event for you guys and I&#146;m   happy for you. So, congratulations.</font></p>    </td>   </tr>
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<p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Matt   Cox:</font></p>    </td>
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<p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Thanks   very much.</font></p>    </td>   </tr>
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<p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Joel   Wine:</font></p>    </td>
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<p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Thanks,   Ben.</font></p>    </td>   </tr>  </table>
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<p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Operator:</font></p>    </td>
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<p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Thank   you. Our next question comes from the line of John Mims from FBR Capital   Markets. Your question, please?</font></p>    </td>   </tr>
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<p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">John   Mims:</font></p>    </td>
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<p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Yes,   thanks. Good evening, guys. And, again, congratulations. Some of us thought   this might not happen for some time.</font></p>    </td>   </tr>
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<p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Let&#146;s   see, most of my questions have been answered. It&#146;s been picked apart pretty   well by the guys before me but let me ask on, you know, the Horizon fort   facilities in Hawaii. If I recall, those are owned by you but leased to them,   right? So is there any, you know, opportunity to reprice that contract or any   sort of, you know, kind of movement there as it moves from Horizon into   Pasha&#146;s hands?</font></p>    </td>   </tr>
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<p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Matt   Cox:</font></p>    </td>
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<p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">John,   the marine terminal arrangements for Horizon in Hawaii are completely   separate. They maintain their own terminal, marine terminal and their   stevedore are using their own stevedores and so they&#146;re quite separate. They   have their own lease with the State of Hawaii Department of Transportation.   So we don&#146;t see any change. We&#146;re not a party to their current deal and   wouldn&#146;t envision any change to those arrangements.</font></p>    </td>   </tr>
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<p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">John   Mims:</font></p>    </td>
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<p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">OK.   For some reason,&nbsp;I thought there was some overlap there but so it is.</font></p>    </td>   </tr>
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<p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">And   then what&#146;s, you know, and you may have said this before but the then organ &#151;   another thought of seasonality there but the organic growth rate in Alaska   for the last couple of years and, you know, as far as growth and just the   container trade there, you know, in Hawaii, there&#146;s the, you know, GDP plus   container &#151; or you know, plus the construction growth. Is there a similar   type of catalyst that can drive above GDP growth in Alaska?</font></p>    </td>   </tr>
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<p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Joel   Wine:</font></p>    </td>
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<p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Yes.   I would say, John, from a trend perspective, it&#146;s tentative, had similar   trends although different ups and downs and cycle to it, but very similar   behaving over the long term, is Hawaii. But Hawaii moves to, you know,   tourism and things like that. Alaska is more sensitive to, you know, energy   investment.</font></p>    </td>   </tr>
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<p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">So   that&#146;s an important &#151; just like tourism is an important long-term driver to   always watch in Hawaii, energy investing is an important long-term driver to</font></p>    </td>   </tr>  </table>
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<p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">watch   in Alaska. So, you know, if you have a bullish view on that, you&#146;re going &#151;   and it actually happens, you&#146;re going to see containerized demand grow more   rapidly and it can work the other way. So that&#146;s an important driver.</font></p>    </td>   </tr>
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<p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">The   other &#151; another important driver that&#146;s very similar is military and there&#146;s   large military presence. There&#146;s a percentage of GDP in Alaska, similar to   Hawaii. So those would be two pieces of GDP to keep an eye on to, you know,   look at over trend or under trend type of performance.</font></p>    </td>   </tr>
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<p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">John   Mims:</font></p>    </td>
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<p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Right.   And Horizon never in their, you know, reporting, they never really broke out   each market but did you see, you know, as the shale revolution and on the   domestic U.S. has picked up and some of that&#146;s been to the detriment of the   Alaskan north slope production, have you seen some weakness on the   energy-related front there or has volumes, you know, stayed pretty steady   over the last year or so as you were doing your work there?</font></p>    </td>   </tr>
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<p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Joel   Wine:</font></p>    </td>
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<p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Yes,   it&#146;s been steady. But,&nbsp;I&#146;d say the bigger &#151; if you talk to Alaskans, if   you will know &#151; the bigger trend over the, you know, really is even on the   tax side, there&#146;s been changing tax law under Governor Palin that   incrementally disadvantaged energy investment relative to where it was before   and that tax law just was reversed in the last year. And so that&#146;s going &#151;   that&#146;s going to, on the margin, help energy investment, so that&#146;s an   important thing to be aware of as well. But in general, it&#146;s been &#151; it&#146;s been   steady performance and as we diligence the business, we&#146;re comfortable that   the overall volume demand is in a good place right now and we&#146;re optimistic   about the future demand.</font></p>    </td>   </tr>
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<p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">John   Mims:</font></p>    </td>
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<p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">OK.   Well, all right. Well, that&#146;s all I&#146;ve got right now. But, again,   congratulations. Glad to see this one get done.</font></p>    </td>   </tr>
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<p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Matt   Cox:</font></p>    </td>
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<p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Great.   Thanks, John.</font></p>    </td>   </tr>
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<p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Joel   Wine:</font></p>    </td>
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<p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Thanks,   John,</font></p>    </td>   </tr>
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<p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Operator:</font></p>    </td>
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<p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Thank   you. Our next question comes from the line of Steve O&#146;Hara from   Sidoti&nbsp;&amp; Company. Your question, please?</font></p>    </td>   </tr>  </table>
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<p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Stephen   O&#146;Hara:</font></p>    </td>
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<p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Yes.   Hi, good afternoon.</font></p>    </td>   </tr>
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<p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Matt   Cox:</font></p>    </td>
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<p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Hi,   Steve,</font></p>    </td>   </tr>
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<p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Joel   Wine:</font></p>    </td>
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<p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Hi,   Steve.</font></p>    </td>   </tr>
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<p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Stephen   O&#146;Hara:</font></p>    </td>
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<p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">I&#146;m   just curious, in terms of the number of ships that Horizon has and I know   steam ships have to be out of the Jones Act fleet by 2020, it sounds like you   need three ships to service trade lane and does that mean you have to replace   a steam ship with a, you know, a new build by 2020?</font></p>    </td>   </tr>
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<p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Matt   Cox:</font></p>    </td>
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<p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Yes,   Steve. As Joel pointed out in his presentation, of course, the three vessels   that serve Alaska are diesel ships so we&#146;re in good shape there. So our   coverage there is anticipated to be during dry dock relief. And so, what we   want to be &#151; what we want to &#151; we need to be in a position to do is post 2020   to have a dry dock relief vessel that&#146;s available to serve those markets and,   you know, we have two aloha class vessels that will give us surplus diesel   vessels that are core life fleet that may allow us to deploy a reserve   vessel.</font></p>    </td>   </tr>
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<p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">We&#146;re   also evaluating whether or not it&#146;s appropriate for us to convert one of our   &#151; one of the best surplus vessels, reengine it or make another ones available   for dry dock relief. We&#146;re not in a position to specifically comment on that   and that&#146;s work we&#146;re going to be doing between now and 2020 to ready   ourselves for that.</font></p>    </td>   </tr>
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<p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Stephen   O&#146;Hara:</font></p>    </td>
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<p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">OK.   And then in terms of Horizon&#146;s market share,&nbsp;I mean, what is the market   share today? And can you just talk about how the market, you know, how   fracture the market is recent?</font></p>    </td>   </tr>
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<p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Joel   Wine:</font></p>    </td>
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<p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Yes.   There&#146;s two pieces of primary market share in terms of vessels that go over   the ocean barge and container and the large piece is on the container side   and there, there&#146;s one primary competitor, Steve, it&#146;s a company called Total   Motion Express and the split between Total Motion Express and Horizon is   roughly 50/50 on the ocean container side.</font></p>    </td>   </tr>
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<p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Stephen   O&#146;Hara:</font></p>    </td>
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<p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">OK.   And then I guess just quickly, in terms of the, you know,&nbsp;I think you&#146;d   maybe touched on it but I mean,&nbsp;I think, there was 85 percent overlap   with</font></p>    </td>   </tr>  </table>
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<p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">customers   and I mean, would this be a big benefit to the logistics business that you   have or is that kind of already baked in? I thought you said there was   already baked in to that 70 million but I was just kind of curious maybe   that&#146;s &#151; I mean, that would seem to be a little bit, you know, not as   aggressive as may be it should be?</font></p>    </td>   </tr>
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<p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Matt   Cox:</font></p>    </td>
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<p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Yes.   I would say the Alaska trade has grown up around the Tacoma area. So much of   the sourcing for the Alaska business is in and around distribution centers in   the Tacoma area. So there is a significant amount of, you know, cross country   movement to support the Alaska trade, although there will be, just like we   see in Hawaii, there will be items that will be moving from inland Midwest,   other manufacturing points for specialty manufacturing items and we&#146;ll be   looking t those kinds of opportunities to bolt on.</font></p>    </td>   </tr>
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<p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">But   we see them as small, you know, certainly beneficial but not huge needle   movers in terms of the opportunity there. But certainly, we&#146;ll be going after   them.</font></p>    </td>   </tr>
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<p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Stephen   O&#146;Hara:</font></p>    </td>
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<p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">OK.   And I&#146;m sorry, just &#151; maybe if you could just clarify this thing about the   pension cost, did you say that the pension exposure was included in that 85   million to 95 million?</font></p>    </td>   </tr>
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<p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Joel   Wine:</font></p>    </td>
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<p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Yes.</font></p>    </td>   </tr>
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<p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Stephen   O&#146;Hara:</font></p>    </td>
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<p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">OK.   Thank you.</font></p>    </td>   </tr>
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<p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Thanks,   Steve.</font></p>    </td>   </tr>
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<p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Operator:</font></p>    </td>
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<p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Thank   you. Our next question comes from the line as a follow-up from Kevin Sterling   from BB&amp;T Capital Markets. Your question, please?</font></p>    </td>   </tr>
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<p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Kevin   Sterling:</font></p>    </td>
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<p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Thank   you. Thanks, Matt and Joel, for letting me follow-up.</font></p>    </td>   </tr>
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<p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">I&#146;m   going to dig in to my memory bank a little bit here but at one time, Horizon   had a logistics division. Are you guys picking up anything in logistics or   are they already sold off that division? I can&#146;t remember.</font></p>    </td>   </tr>  </table>
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<p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Joel   Wine:</font></p>    </td>
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<p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Yes,   Kevin, that business unit was discontinued. And so, it&#146;s not part of the   sale.</font></p>    </td>   </tr>
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<p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Kevin   Sterling:</font></p>    </td>
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<p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">OK.   And, you know, in Alaska, you talked about the overlap of existing customers,   what percent of your Hawaii customers traffic in Alaska now?</font></p>    </td>   </tr>
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<p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Joel   Wine:</font></p>    </td>
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<p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">We&#146;d   have to get back to you on that. We don&#146;t have a reverse number.</font></p>    </td>   </tr>
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<p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Matt   Cox:</font></p>    </td>
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<p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Yes,   we don&#146;t.</font></p>    </td>   </tr>
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<p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Kevin   Sterling:</font></p>    </td>
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<p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">OK.   And lastly, you know, there&#146;s been a lot of talk about with the union and   congestion issues in the West Coast ports and I know Tacoma felt some congestion   issues, is Horizon Alaska&#146;s service that comes in and out of Tacoma, are they   seeing any impact from the slowdown and congestion? Are they &#151; and   ultimately, is Horizon covering the same union contract?</font></p>    </td>   </tr>
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<p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Matt   Cox:</font></p>    </td>
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<p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Yes.   Second &#151; to answer the second question, yes, they are a party to the   multi-employer agreement as is Matson as our, you know, all the other   companies that employee labor with the (LW) on the West Coast. So they&#146;re   subject to the same agreement.</font></p>    </td>   </tr>
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<p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Everyone   in the PNW has been moderately impacted but, you know, but it hasn&#146;t come up   as a significant due diligence item although, you know, we&#146;re hoping that   this matter will get resolved in the very near future and that would be a   long term drag on the earnings or somehow fundamentally lower to prospects   that we&#146;re buying.</font></p>    </td>   </tr>
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<p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Kevin   Sterling:</font></p>    </td>
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<p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">OK.   All right. Thanks again for letting me hop back in queue. I appreciate it.</font></p>    </td>   </tr>
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<p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">OK,   Kevin.</font></p>    </td>   </tr>
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<p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Thanks,   Kevin.</font></p>    </td>   </tr>
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<p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Operator:</font></p>    </td>
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<p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Thank   you. Our next question is a follow-up from the line of Michael Webber from   Wells Fargo. Your question, please?</font></p>    </td>   </tr>
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<p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Michael   Webber:</font></p>    </td>
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<p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Hi,   you guys, thanks for letting me follow-up. I kind of left off valuation   question get asked. But just curious of how you guys arrive at the offer. If   I</font></p>    </td>   </tr>  </table>
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<p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">tack   on the one-time free tax items which I imagine would be included in   EV,&nbsp;I guess, it puts them at about 7-2 and you guys are creating about   6.9 times,&nbsp;I guess, one of your consensus 2015 EBITDA.</font></p>    </td>   </tr>
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<p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">I&#146;m   just &#151; I&#146;m curious of the, A, whether there&#146;s something off there and you   guys are obviously excluding as a one-time item here but just how you kind of   arrive at the purchase price and how that kind of escalated since the &#151; I   mean, you guys have been looking at this for a while.</font></p>    </td>   </tr>
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<p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Joel   Wine:</font></p>    </td>
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<p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Yes,   Michael, it&#146;s Joel. I&#146;ll take that.</font></p>    </td>   </tr>
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<p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">You   know,&nbsp;I think you know us quite well. We&#146;re very focused on cash flow.   You know, long-term cash flow, in particular, but short-term cash flow   matters too. So we look for investments that are going to enhance our cash   flow accretion and also will be long term valuable and additive to DCF type   values.</font></p>    </td>   </tr>
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<p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">So   that&#146;s how we come up with the overall valuation here and we believe this is   going to be shareholder value enhancing, you know, at the level that we&#146;re   paying right here. I mean, this core business that we&#146;re buying is a very   steady business, a very strong franchise. It&#146;s one of the best franchises out   there in the Jones Act business and it droves off a lot of cash flow. So it   really fits all the financial criteria that we like to see and then, of   course, it&#146;s our bread and butter core shipping business.</font></p>    </td>   </tr>
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<p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">So   we also think it&#146;s in that regard, it&#146;s not, you know, it&#146;s risk that we   understand. So you&#146;re looking at very strong cash flow generation and risk   that we understand,&nbsp;I think, we can operate under. So those are the   parameters that we used to value business.</font></p>    </td>   </tr>
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<p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Michael   Webber:</font></p>    </td>
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<p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Got   you. But that (7-2x),&nbsp;I guess, inclusive of the &#151; of the transaction and   restructuring charges, is that about what we should be using?</font></p>    </td>   </tr>
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<p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>    </td>
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<p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>    </td>
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<p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Joel   Wine:</font></p>    </td>
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<p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Well,&nbsp;I   don&#146;t want to tell you what to use. I mean, you have to decide what   adjustments to make. So we have our own one-time cost, you know, the   transaction cost and integration cost which we mentioned and then we&#146;re   calling out these additional costs that Horizon has announced that they&#146;re</font></p>    </td>   </tr>  </table>
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<p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">likely   to have on their Puerto Rico business. So it&#146;s up to you how you, you know,   which of those you pick and choose that do calculations off of but we just   wanted to get all those &#151; all that information out to you, so you can make   that decision.</font></p>    </td>   </tr>
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<p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Michael   Webber:</font></p>    </td>
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<p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">OK.   Great. Thanks, guys.</font></p>    </td>   </tr>
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<p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Joel   Wine:</font></p>    </td>
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<p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">OK.</font></p>    </td>   </tr>
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<p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Operator:</font></p>    </td>
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<p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Thank   you. This does conclude the question and answer session of today&#146;s program.   I&#146;d like to hand the program to Matt Cox for any further remarks.</font></p>    </td>   </tr>
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<p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Matt   Cox:</font></p>    </td>
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<p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">OK.   Well, thanks, everybody, for your attention to this matter and we look   forward to catching up with every in the near future. Aloha.</font></p>    </td>   </tr>
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<p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Operator:</font></p>    </td>
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<p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Thank   you, ladies and gentlemen, for your participation in today&#146;s conference. This   does conclude the program. You may now disconnect. Good day.</font></p>    </td>   </tr>  </table>
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<p align="center" style="margin:0in 0in .0001pt;text-align:center;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">END</font></p>
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