Matson, Inc. Leases Disclosure
9. | LEASES |
Description of Operating Leases: The Company has different types of operating leases, the specific terms and conditions of which vary from lease to lease. Certain operating lease agreements include terms such as: (i) renewal and early termination options; (ii) early buy-out and purchase options; and (iii) rent escalation clauses. The lease agreements also include provisions for the maintenance of the leased asset and payment of lease related costs. The Company reviews the specific terms and conditions of each lease and, as appropriate, notifies the lessor of any intent to exercise any option in accordance with the terms of the lease. In the normal course of business, the Company expects to be able to renew or replace most of its operating leases with other similar leases as they expire. The Company’s leases do not contain any residual value guarantees.
The Company did not have any finance leases during the years ended December 31, 2025 and 2024. Certain of the Company’s lease agreements include rental payments that may be adjusted in the future based on economic conditions and others include rental payments adjusted periodically for inflation. Variable lease expense is disclosed for the adjusted portion of such payments.
The lease type by underlying asset class and maximum terms of the Company’s operating leases are as follows:
Lease Type: | | Term |
Real estate and terminal leases |
| 50 years |
Vessel and barge charter leases |
| 4 years |
Operations equipment and other leases |
| 14 years |
Incremental Borrowing Rate: As most of the Company’s operating leases do not provide an implicit rate of interest associated with the lease, the Company uses an estimated incremental borrowing rate based on information available at the date of adoption and subsequent lease commencement dates in calculating the present value of its operating lease liabilities. The incremental borrowing rate is determined using the U.S. Treasury rate adjusted to account for the Company’s credit rating and the collateralized nature of operating leases.
Components of Lease Cost: Components of lease cost recorded in the Company’s Consolidated Statement of Income and Comprehensive Income consists of the following for the years ended December 31, 2025, 2024 and 2023:
Years Ended | |||||||||
December 31, | |||||||||
(In millions) | | 2025 | 2024 | 2023 | |||||
Operating lease cost | $ | 147.9 | $ | 143.4 | $ | 151.0 | |||
Short-term lease cost |
| 6.8 |
| 10.4 |
| 7.7 | |||
Variable lease cost |
| 0.3 |
| 0.6 |
| 0.6 | |||
Total | 155.0 | 154.4 | 159.3 | ||||||
Sublease income | (6.9) | (1.1) | (8.6) | ||||||
Total lease cost, net | $ | 148.1 | $ | 153.3 | $ | 150.7 | |||
Other Lease Information: Other information related to the Company’s operating leases consists of the following for the years ended December 31, 2025, 2024 and 2023:
Years Ended | |||||||||
December 31, | |||||||||
(In millions) | | 2025 | 2024 | 2023 | |||||
Cash paid for amounts included in operating lease liabilities | $ | 148.2 | $ | 148.7 | $ | 154.3 | |||
Right-of-use assets obtained in the exchange for new operating lease liabilities | $ | 145.4 | $ | 205.8 | $ | 40.0 | |||
As of December 31, | |||||||||
2025 | | 2024 | | 2023 | |||||
Weighted average remaining operating lease term | 5.3 years | 5.3 years | 4.8 years | ||||||
Weighted average incremental borrowing rate | 4.6% | 4.3% | 3.1% | ||||||
Future minimum lease payments of operating lease liabilities that have non-cancelable lease terms in excess of one year consist of the following at December 31, 2025:
| As of | ||
Year (in millions) | | December 31, 2025 | |
2026 | $ | 139.5 | |
2027 |
| 106.2 | |
2028 |
| 55.8 | |
2029 |
| 33.4 | |
2030 |
| 22.8 | |
Thereafter |
| 73.2 | |
Total lease payments | 430.9 | ||
Less: Interest | (55.6) | ||
Present value of operating lease liabilities | 375.3 | ||
(128.5) | |||
Long-term operating lease liabilities | $ | 246.8 | |
Historical Timeline
| Fiscal Year | Filed | |
|---|---|---|
| 2025 | Feb 27, 2026 | Showing above |
| 2024 | Feb 28, 2025 | |
| 2023 | Feb 23, 2024 | |
| 2022 | Feb 24, 2023 | |
| 2021 | Feb 25, 2022 | |
| 2020 | Feb 26, 2021 | |
| 2019 | Feb 28, 2020 | |
| 2018 | Mar 4, 2019 | |
| 2017 | Feb 23, 2018 | |
| 2016 | Feb 24, 2017 | |
| 2015 | Feb 26, 2016 | |
About Leases Disclosures
Lease disclosures under ASC 842 provide a comprehensive view of a company's leased asset portfolio, including the split between operating and finance leases, discount rates used to present-value future payments, and the maturity schedule of lease obligations. This section reveals a significant source of off-balance-sheet commitments that were largely hidden before the current standard.
Key signals: the weighted-average discount rate affects the size of recorded lease liabilities — a higher rate reduces the reported obligation, so compare the chosen rate against the company's incremental borrowing rate. The operating versus finance lease mix affects both EBITDA and operating income presentation. Watch the maturity table for concentration risk: large payment cliffs in specific years may create cash flow pressure. Variable lease payments excluded from the liability measurement represent real obligations that do not appear on the balance sheet. Compare total lease costs against prior-year operating lease expense to assess the true economic burden.