2007 1st Quarter Earnings Conference Call st Quarter Earnings Conference Call April 30, 2007

Transcription

1 st Quarter Earnings Conference Call

2 Disclosure 2 Statements in this call that set forth expectations or predictions are based on facts and situations that are known to us as of today,. Actual results may differ materially, due to risks and uncertainties, such as those described on pages of the Form 10-K in our 2006 annual report and our other subsequent filings with the SEC. Statements in this call are not guarantees of future performance.

3 Call Agenda 3 Earnings Summary and Highlights New Ways and New Places Operating Performance and Outlook Financial Matters Economic and Market Outlook Summary

4 Recent Highlights 4 Matson completes first year of China service Matson/MIL new services: Asia guarantees, JB Hunt partnership Matson Global Real estate developments continue apace: construction and sales progressing Income portfolio enhancements: $25 MM in Arizona, $14 MM in Texas Commitment to dividend growth: 16% increase, up 29% in two years

5 1Q07 Operating Profit (in $millions) Q06 1Q07 Ocean Transportation Logistics Services Real Estate Leasing Real Estate Sales Food Products

6 Earnings Per Share Fully Diluted* $ $ $ $.84 $ * Includes discontinued operations '06 '07

7 Call Agenda 7 Earnings Summary and Highlights New Ways and New Places Operating Performance and Outlook Financial Matters Economic and Market Outlook Summary

8 An Evolving Value Proposition 8 Seattle Ningbo/Shanghai Oakland Long Beach Guam Honolulu Matson Hawaii Service Matson China Long Beach Express

9 China-Long Beach Service 9 12K container volume ships close to capacity Contract season underway Gradual shift to higher-margin goods such as garments and electronics Container repositioning

10 Transportation & Logistics Services Premium Service Guarantees 10 Premium guarantees are industry first Enhances market presence Incremental steps in growth strategy

11 From Ningbo to New York Extending Our Reach 11 Seattle New York Ningbo/Shanghai Oakland Chicago Kansas City Guam Honolulu Long Beach Houston Atlanta Hawaii Service China Long Beach Express MIL

12 Matson Global Distribution Services Building a Full-Service 3PL 12 Warehousing Global Distribution Services Distribution Freight-forwarding

13 An Emerging Presence Income Properties Portfolio by square feet 13 By Asset Class By Location Pacific Northwest Industrial Northern California Mountain Office Southern California Retail Arizona Hawaii Texas

14 The Third California 14 Development properties Income properties The Third California

15 Call Agenda 15 Earnings Summary and Highlights New Ways and New Places Operating Performance and Outlook Financial Matters Economic and Market Outlook Summary

16 Ocean Transportation 1Q07 Operating Profit (Dollars in millions) China Service: - Volume robust - Service levels high Hawaii containers: - Volume down 3% - Mix favorable Hawaii autos: - Volume down 28% - Profit impact modest 0 1Q06 1Q07

17 Ocean Transportation 2007 Outlook 17 Operating Profit (in $millions) Q1 Q2 Q3 Q4 China value proposition increasing - Vessels virtually full - Focused on yield mgmt Flat container volume in Hawaii trade - Managing costs Moderate earnings growth 1Q06 1Q07

18 Logistics Services 1Q07 Operating Profit (Dollars in millions) Volumes down but margin strength continues Q06 1Q07

19 Logistics Services 2007 Outlook 19 Operating Profit (in $millions) Leveraging Opportunities: - Matson China service - JB Hunt relationship - 3PL product extensions Expect strong Y-O-Y growth 1 0 Q1 Q2 Q3 Q4 1Q06 1Q07

20 Real Estate Leasing 1Q07 Operating Profit* (Dollars in millions) Higher lease rents and continued high occupancies $1.7 million Y-O-Y benefit from nonrecurring items Q06 1Q07 * Includes discontinued operations

21 Real Estate Leasing 2007 Outlook 21 Operating Profit* (in $millions) Continued market strength expected to benefit rents and maintain occupancies Y-O-Y growth favorable Cannot extrapolate 1Q 0 Q1 Q2 Q3 Q4 1Q06 * Includes discontinued operations 1Q07

22 Real Estate Sales 1Q07 Operating Profit (Dollars in millions) Hokua 2006 Earnings Drivers: - 16 closings at Kai Malu - Kauai parcel sale Favorable development progress: sales and construction 0 1Q06 1Q07

23 A Robust Pipeline Sustained, Longer-Term Projects 23 Status Structure Asset Class Acreage Total Units Kai Malu at Wailea J.V. MF Homes Wailea MF-11 A&B Comm/ Res. 11 1/ 12 Wailea MF-19 A&B SF Lots 7 9 MAUI Wailea MF-7 Additional Wailea A&B TBD MF Homes TBD TBD Kane Street A&B Condominium Kahului Town Center A&B Mixed Use / 200K s.f. Maui Business Park II A&B Commercial 180 TBD KAUAI Kukui'ula Port Allen J.V. A&B Mixed Use SF Homes 1, , Brydeswood A&B SF Lots OAHU Keola La'i Waiawa A&B J.V. Condominium Master Community 3 1, ,000 BI Ka Milo J.V. SF/ MF Homes Entitled Under construction Sales Commenced

24 Real Estate Sales 2007 Outlook 24 Operating Profit (in $millions) Kai Malu & property sales to drive results Developments on track Binding contracts in place 3 0 Q1 Q2 Q3 Q4 1Q06 1Q07

25 Agribusiness 1Q07 Operating Profit (Dollars in millions) Improved sugar production Sold more sugar at negative margin Increased cost of power sales 10 Dam repairs continue 0 1Q06 1Q07

26 Agribusiness 2007 Outlook 26 Operating Profit (in $millions) (1) (3) (5) Q1 Q2 Q3 Q4 Modest profitability forecast for remainder of year Production levels are a key profit driver Specialty sugar moving forward 1Q06 1Q07

27 Call Agenda 27 Earnings Summary and Highlights New Ways and New Places Operating Performance and Outlook Financial Matters Economic and Market Outlook Summary

28 Financial Disclosures 28 Businesses evolving Growth of commercial portfolio Emergence of Matson Integrated Logistics Growing number of JVs Expanded disclosures JVs: K Income portfolio and MIL: 8-K filed today Evaluating additional real estate disclosures

29 Consolidated Cash Flows 29 Three months ending: Operating Cash Flows Capital Expenditures CCF Withdrawals, Net Debt, Net Dividends All Other, Net Change in Cash 3/31/07 $ 26 (14) (2) 1 (11) 4 $ 4 3/31/06 $ 40 (47) (18) (2) (10) 62 $ 25

30 Capital Expenditures 30 Transportation Real Estate Food Products Other Total Cap. Expenditures Q107 $ $ E $ $ 315 CapEx for RE Held For Sale CapEx As Investment, Acquisition 1031 Exchanges CapEx, per CF Statement (25) (5) (12) $ 14

31 Capital Structure 31 Debt-to-Capital = 30% Several investments under evaluation Confidence in balance sheets, earnings outlook led to dividend increase Repurchases at right time, right price

32 Call Agenda 32 Earnings Summary and Highlights New Ways and New Places Operating Performance and Outlook Financial Matters Economic and Market Outlook Summary

33 Hawaii Economy 33 Local economy stable positive signals 2007 forecast data* Visitor arrival growth 0.8% Payroll job growth 1.6% Real personal income growth 1.8% Unemployment rate 2.6% Data source: * University of Hawaii Economic Research Organization

34 Real Estate Outlook Hawaii Income Properties 34 Vacancy rates remain at/near historic lows: Industrial: 2.3% Retail: 2.0% Office: 6.0% Rental rates continue to improve Rent/expense increases forecast Outlook No weaknesses evident Strong fundamentals Data sources: Colliers Monroe Friedlander

35 Real Estate Outlook Hawaii Residential Market 35 Pricing: Plateau reached Volume: 4.3% Drop YOY in SFH Outlook for balance of % drop in SFH sales projected Prices projected to remain within 5% band Data sources: Colliers Monroe Friedlander

36 Hawaii Real Estate Residential Market Single Family Homes 36 Single Family Median Sales Prices (Quarterly) $850,000 $750,000 $650,000 $550,000 $450,000 $350,000 $250, Oahu- SF Homes Maui- SF Homes Kauai- SF Homes

37 Hawaii Real Estate Residential Market Condominiums 37 5-Year Median Sales Prices (Quarterly) $600,000 $500,000 $400,000 $300,000 $200,000 $100, Oahu- Condo Maui- Condo Kauai- Condo

38 Call Agenda 38 Earnings Summary and Highlights New Ways and New Places Operating Performance and Outlook Financial Matters Economic and Market Outlook Summary

39 Business Outlook Full Year Forecast Growth Range (in % YOY) Real Estate Agribusiness Forecast Growth Range % Real Estate: Transportation: 5-8 Agribusiness 0 3 Transportation

40 Questions & Answers 40 Q&A

41 Appendix 41 Supplemental Information Operating Metrics

42 Ocean Transportation Hawaii Volume Metrics 42 Containers (in thousands) Automobiles (in thousands) Q1 Q2 Q3 Q4 0 Q1 Q2 Q3 Q4 1Q06 1Q07 1Q06 1Q07

43 Ocean Transportation Operating Margin (%) Q1 Q2 Q3 Q4 1Q06 1Q07

44 Ocean Transportation Hawaii Yield Metrics 44 Westbound Containers ($/container) Westbound Automobiles ($/automobile) 5, , , , , Q1 Q2 Q3 Q4 200 Q1 Q2 Q3 Q4 1Q06 1Q07 1Q06 1Q07

45 Ocean Transportation Fuel Cost ($/barrel)* 45 * Direct fuel costs Q1 Q2 Q3 Q4 1Q06 1Q07

46 Ocean Transportation On-time Performers 46 Carrier Percentage of On-time Vessels On-time Vessel Reliability Ranking MATSON Maersk Line APL NYK Cosco 87% 58% 55% 44% 42% Source: Drewry Shipping Consultants

47 Logistics Services Operating Metrics Revenue (in $millions) 6.0 Margin (in %) Q1 Q2 Q3 Q4 0.0 Q1 Q2 Q3 Q4

48 Real Estate Leasing Operating Metrics - Occupancy 48 Mainland Hawaii Q1 Q2 Q3 Q4 80 Q1 Q2 Q3 Q4 1Q06 1Q07 1Q06 1Q07