Good afternoon and welcome to the Matson Incorporated Q1 2013 Earnings Conference Call. All participants will be in listen-only mode. (Operator Instructions) After today’s presentation, there will be an opportunity to ask questions. (Operator Instructions) Please also note, today’s event is being recorded. At this time, I would now like to turn the conference call over to Mr. Matt Cox, President and CEO. Mr. Cox, please go ahead.

Thanks, operator. Aloha, welcome to our first quarter 2013 earnings conference call. I’m joined today by Joel Wine, Senior Vice President and Chief Financial Officer and new addition to our team, Jerome [Hollin]. Joe will be the key point person for Investor Relations going forward and this is Jerome’s very first day at Matson. Welcome to the board Jerome.

Thank you, Matt. Before we begin, I would note that slides from this presentation are available for download at our website www.matson.com under the Investor Relations tab. I will also take this opportunity 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 to differ materially from those in the forward-looking statements, in the press release and this conference call. These risk factors are described in our press release and are more fully detailed under the caption Risk Factors on pages 9 to 15 in our 2012 Form 10-K filed on March 1, 2013 and in our subsequent filings with the SEC. Please also note the date of this conference call is May 6, 2013, and any forward-looking statements we make today are based on assumptions as of this date. We undertake no obligation to update these forward-looking statements. Also, references made to certain non-GAAP numbers in this presentation, a reconciliation to GAAP numbers and description of calculation methodologies is provided in the addendum. With that, I will turn the call over to Matt and Joel, who will take us through the key highlights of the first quarter of 2013 and an updated outlook for the full year. Matt?

Thanks Jerome. And thank you to those on the call today. We had good first quarter driven by higher rates in our China Service and better than expected volume in our Hawaii trade. We also benefited from operating an optimal nine-ship fleet for most of the quarter, which led to reduced vessel expenses compared to the 10-ship fleet deployed for the first quarter last year. And as expected our Logistics segment and our terminal joint venture SSAT operated essentially at breakeven level for the quarter. As important is our earnings results, we reduced our debt by $18 million during the quarter and it paid down nearly $72 million in the three quarters since separation. The debt pay down reflects our ability to consistently generate high levels of cash from operation. Due to these solid first quarter results, we shifted our outlook slightly higher for the full-year more on that later from Joel. Turning to Slide 4, we presented first quarter EBITDA earnings per share and earnings per share from continuing operations. As you can see here, we have meaningful improvement across all three of these metrics as compared to last year. In the first quarter of 2013, EBITDA was $36 million, an $11.2 million increase from the first quarter of 2012. Earnings per share increased significantly from $0.09 last year to $0.21 this quarter even while the first quarter of 2012 included some gains on discontinued operation. Diluted earnings per share from continuing operation more than quadrupled on a year-over-year basis and net income rose substantially. As most of you know, the first quarter of the year is typically our slowest quarter in terms of volume and thus earnings impact. I feel like we’re off to a good start for the year. Turning now to our individual service lines; container…

Thank you, Matt. As shown on Slide 11, Matson’s consolidated operating income for the quarter was $18.7 million, as compared to $6.1 million for the first quarter of 2012. As Matt mentioned, the improvement in results was driven primarily by the increase in rates in the China trade, higher Hawaii volume and operating an optimum 9-ship fleet throughout the quarter. First quarter 2013, Ocean Transportation operating income was $18.5 million, an increase of $12.7 million over the prior year for the same reasons. The operating income gains were offset to some degree by higher terminal handling expense associated with higher auto volume and also to increases in general and administrative expenses. The SSAT joint-venture operated at essentially breakeven versus modest contributions in 2012. Likewise, logistics operated at near breakeven during the quarter and was flat on a year-over-year basis for the reasons Matt described. Looking at our consolidated income statement on Slide 12, total revenue increased by nearly 8% on a year-over-year basis while our operating cost increased by just 4%. One item of note was SG&A expenses which rose by $4.8 million. About half of the increase was attributable to the additional cost of operating as a standalone publicly traded company. The other half of the increase was related to our recent acquisition of the weak shipping assets and to IT initiatives and systems upgrades that we’re in the process of rolling out to improve efficiencies throughout our organization. Our effective tax rate during the quarter was 39.5% which is slightly higher than the 38.5% we expect on average moving forward. Our EBITDA for the quarter was $36 million and $180 million on an LTM basis. This steady strong cash flow generation is attributable to improving economic conditions and the relative stability of our core market. Turning to the…

Thanks, Joel. We continue to be optimistic about our current operations and prospects. As the construction cycle in Hawaii rebounds, we expect to see volume materialize. Our Logistics business and our joint venture terminal operations are well positioned for the eventual recovery in the U.S. economy. And while economic activity in Guam is muted, we are performing well there as the slow ocean carrier to and from the United States. The soundness of our businesses together generates strong earnings and cash flow, which has allowed us to reduce our debt level significantly. And finally, we are focused on continuing to operate the high-levels of performance while also capitalizing on the growth opportunities we see ahead. And with that, I will turn the call back to the operator and ask for questions.

(Audit Start 17:30)(Operator Instructions) And our first question comes from Jack Atkins from Stephens. Please go ahead with your question. Jack Atkins – Stephens: Good afternoon guys. Thanks for taking my questions and congratulations on strong first quarter results.

Thanks Jack. Jack Atkins – Stephens: So I guess to start-off, if we can – if we could maybe begin just kind of looking at sort of value for construction demand from Hawaii for the remainder of 2013, Matt, I know we talked about or you addressed in your opening remarks about some positive indicators out there in the market, but it doesn’t sound like you expect that to really have a follow through on demand until 2014. Could you maybe talk about sort of what’s delaying that impact to sort of your business, and what do you think will ultimately sort of get that over the hump if you will?

Sure. I can do that Jack. There were two or three factors, you will recall at our year-end call, we talked about this improving construction environment, and to us we believe that – and we continue to believe that the outlook remains very strongest. the numbers of projects are in various stages of planning, construction, permitting, financing, and actual construction. But for example, much of the activity is in – in multi-storey or high rise in Honolulu, lease the early phase of the cycle, and early phases of the construction of those projects typically are commodities is that we don’t carry, steel re-bar and construction are generally commodities we don’t carry, it’s a little bit later in these projects where we ship more of the activity. And so, that’s why we were a little bit more cautious in saying while we see good amount of momentum around that cycle, it is not going to materialize for us as cargo on our ships until 2014. We’re going to see a little bit of that at the very end of 2013, so for example on the first quarter, we saw maybe 1% or 2% growth in that segment, that is the constructiona nd building materials segment, so relatively small so far. Jack Atkins – Stephens: Okay. That’s really helpful Matt. Thank you for that color. And then when we look at the China CLX business, just sort of curious, given your outlook for rates there for the remainder of the year, has there been any thoughts of maybe moving more towards more contract versus spot, if I recall, it’s about a 50-50 mix historically. Just kind of wondering how you guys think about that internally when you sort of go through a bid cycle like we just had.

Yeah. I mean, you’re right Jack, we have historically tried to have a mix of our portfolio between annual contracted freight and spot rate, part of a reason for that is, the contracted freight comes in handy during the slack times of year, of course during the peak, you could fill your ship with spot cargo only, but then I think you would struggle during the weaker time to at least see more rate volatility, and so for us it’s all been around risk management and portfolio management of the vessel. So, I think our view is that that percentage around 50 will go up or down based on market conditions. And so, there really isn’t much more to say, the math, we don’t expect to hit the spot rates in the peak season that we saw in 2012 and 2013, and while as I said, it did take a small rate increase on our contract business. Obviously, we expect the spot rates to fall more than the contract rate increase we got. Jack Atkins – Stephens: Okay, great. And then last question from me, and then I’ll jump back in the queue. It is on the M&A environment, we’ve heard some other Jones Act properties that may be for sale right now. And I know from what we’re hearing, it may be a little bit out of your sweet spot, but just sort of curious how you guys think about M&A of other Jones Act property that may not be containership-type properties; just sort of curious how you think about that? Would you have any interest in maybe a non-containership Jones Act acquisition?

Yeah, Jack, it’s Joel. I’ll take that. From an M&A perspective, our core focus is on our core capabilities in ocean freight itself. So, you saw us do the transaction down the South Pacific, and as Jones Act opportunities came up in our core ocean business, those will be first priority. And while acquisitions are in the focus right now on our logistics business, we maintain a focus of acquisition awareness for logistics. So, those will be our core areas of emphasis. But to answer your question about other Jones Act categories, there is no question we watch that market closely, and we will be developing over time, we’ll have point of view on different Jones Act markets. And so, over the long haul, could you see Matson potentially invest in other Jones Act categories. Yes, you could potentially see that over time. But it’s not going to necessarily be our first priority, because we are not in those businesses today, but we do watch those markets very closely. Jack Atkins – Stephens: Okay, that’s great. Thanks again for the time and congrats on a good quarter.

Thanks, Jack.

Our next question comes from Steve O’Hara from Sidoti & Company. Please go ahead with your question. Stephen O’Hara – Sidoti & Company, LLC: Hi, good afternoon. Can you just – going back to the eastbound expectations for that volume, your updated expectations, are you assuming that eastbound activity kind of falls off and goes back to let’s say normalized levels or are you expecting elevated levels going forward?

Yeah, I mean I think what we’re saying Steve is we’re just not sure. What we know is that just because one quarter appeared strong as it did in the first quarter, we’re not ready to make a call to say it’s an ongoing basis. So internally, we’re expecting it to revert to more historic levels, but again, it’s been a little difficult to forecast. But that’s our view now, we’re just putting some caution on volume growth sustaining at the first-quarter level. Stephen O’Hara – Sidoti & Company, LLC: Okay. And you mean was that why the autos picked up so much, was that rental car activity or something?

Yeah, that’s unrelated to the containerized eastbound shipments, but yes, and typically what will happen is, there tends to be peak periods when the rental car companies are renewing their fleets, that is they’re bringing new cars over westbound, and once those are in place, then they do a de-fleeting in Hawaii and return them to the U.S. to be sold in wholesale markets on the Mainland. So, we saw a lot of activity during the quarter for the auto volumes unrelated to the dry container eastbound cargo. Stephen O’Hara – Sidoti & Company, LLC: Okay. And then I guess if you could just talk about the Honolulu Rail, where that stands, what your expectations are for that? And then maybe I think you noted your utilization was about 95% on westbound. What is kind of the sweet spot for that, what’s high where you have to start bringing capacity on, and your thoughts there?

Okay. First on your question on Rail, the Rail project itself was delayed or put on hold while the project itself had to do excavations for burial remains, and those remain findings and survey work is now completed, and the project is re-mobilizing. And our view there is there had been quite a bit of cargo that was moved before the project was put on hold, and so there continues to be a fair bit of cargo or product there to resume construction. So, we don’t see it being a significant needle mover in 2013 volumes, again it’s more of a 2014 impact, but it is encouraging that the project is back on and gaining momentum again. As it relates to your second question about vessel utilization, and were at 95%, there isn’t a hard-end fixed line, but I would say you get up to the 97%, 98%, and you find it difficult to meet the cargo demand, and what you find is of course it doesn’t come in nice even streams that are aligned exactly for our sailing schedule, and we will spend some time and some money managing the freight to accommodate on our vessels. We don’t expect this year the need to break into a tenth ship, and if we did, it would be for only a very short time, let’s say a month or two, and then we will revert back to a nine-ship deployment, but at this point, our view is that based on these moderate gains and growth in Hawaii, we believe we should for the most part be able to accommodate it within our nine-ship fleet. Stephen O’Hara – Sidoti & Company, LLC: Okay. Thank you very much.

Sure Steve.

Our next question comes from Kevin Sterling from BB&T Capital Markets. Please go ahead with your question. William Horner – BB&T Capital Markets : Hey guys, thanks for taking my call. It’s actually William Horner on for Kevin.

Okay, hi William.(Audit End) William Horner – BB&T Capital Markets : If we could talk about your guidance outlook a little bit, I don’t know you have mentioned a word modest and moderate, kind of address you’re obviously in Q1 that profitability clip is pretty strong, it was about $12.7 million to $13 million year-over-year and so for the rest of the year, when we think a moderate to modest profitability or we could think in more couple of million bucks a quarter obviously it’s going to fluctuate like you said on this call you have a benefit of the nine-ship fleet and that’s going to end next quarter but just trying to get some more color around your outlook?

Sure. Sure William. If you look at – we’re speaking to the operating income for ocean transportation, when we use those words and so for instance, if you look at Q2, Q3, Q4 last year on a quarterly basis were around $31 million, $32 million, $33 million on Q2, Q3, and then $26.7 million in Q4. So we say up modestly, up moderately we are talking about maybe $1 million or $2 million-ish type numbers per quarter. It may fluctuate, because there is different comparisons on a year-over-year basis, so it may fluctuate a little bit on average that's the order of magnitude we’re talking about. William Horner – BB&T Capital Markets : Okay, great. Joel, that’s great color. I appreciate that. And going back to segment Hawaii for a second; autos were pretty strong this quarter, the job catch of rental placement cycle, what was going on with Hawaii autos?

I'll take that one. William, this is Matt. Basically what happens each year is that because the major holidays fall around the quarter, you can’t see significant volatility on a quarter-over-quarter basis. We do over an annual period though see a lot less volatility. Well, it seems that depending on a number of factors for rental car companies are re-fleeting – de-fleeting takes slightly different time each year. We don’t expect those numbers to be sustained at that level moving forward. William Horner – BB&T Capital Markets : Okay. Thanks Matt. One more and then I’ll turn it back over. The China and transpacific trade, the trade rag is recently I talked about our cascading effect of tonnage been dump another transpacific with the lot of new builds coming on, and I know what’s your rate outlook for this year? You expect a little erosion and some competitive pressures, but in terms of your market share in your niche offering, I would assume that you are still pretty well positioned and customers are still focusing on that quick service that you are offering?

That’s right. We continue to expect for the year essentially for our vessel to remain full between now and the end of the year. And it’s clear that we provide a very unique service offering and we will- and again that’s our expectation from a volume standpoint. From a rate standpoint, it continues to be choppy as you point out because of the cascading of these very large vessels into Asia/Europe that are taking the vessels that are currently deployed in Asia/Europe and put them in the transpacific and other trades. And so I think the overall environment will be over tonnage and have a suppressing effect on rates for the balance of the year. William Horner – BB&T Capital Markets : Okay, thanks Matt. That’s good color. I appreciate your time.

Okay, Bill.

(Operator Instructions) And our next question comes from Michael Webber from Wells Fargo. Please go ahead with your question. Michael Webber – Wells Fargo Securities: Hi, good morning guys. How are you?

Good morning, Mike.

Hi, Mike. Michael Webber – Wells Fargo Securities: Hey, first of all, congrats to Guam and congrats to you guys for adding a pretty well known asset in the shipping fleet [syndrome]?

Yeah, first (inaudible) Mike. Michael Webber – Wells Fargo Securities: No problem. I just wanted to kind of zero on some of the volumes you guys talked about earlier and Matt you kind of addressed this is in an earlier question but I want to make sure I get it right. So that bump in auto is catching kind of the rental cycle that makes sense, the eastbound volumes are not related, that’s container – can you talk to kind of what goods drove that and what kind of drove that bump?

Sure, yeah, I can. So the big moving eastbound commodities out of Hawaii back to the U.S. main letter household goods, there are some bulk commodities of fish, sugar product, there is some waste materials, waste metals and waste paper and other kinds of things. And so I would say the continuous mover was probably household goods that drove that change and again, they happened for reasons that are hard to accumulate or aggregate. Michael Webber – Wells Fargo Securities: That’s it - it makes sense and then quickly around the Guam volumes, I think you guys added Reef and you reclass some other volumes to kind of form the Guam category to get a 5,800. I mean you mentioned some – the modest pressure there I guess going forward but I assume you also need your competitor and outline them 2013, I mean, I guess how much we would add to kind of what we think it’s kind of steady state there considering Reef and then the reclass volumes?

Well as it relates to – look backwards as it relates to Reef, we’re going to acquire Reef or we started operating Reef in the middle of the January. So that will be sustained at a higher level, the re-class which you can see from your previous year of those categories from Rail are there for you to see those, I would say are relatively steady, we don’t see any significant fundamental changes in those volumes there. Michael Webber – Wells Fargo Securities: Okay. I guess kind of moving to bigger picture and you kind of already addressed where you need to be to kind of move to vessel and kind of this point. But just really show how you guess some capacity coming online, 14, 15 from a competitor. I’m just curious as how that impacts that decision longer-term and then as you guys are obviously out in the market looking for to replenish your fleet eventually. I’m just curious at to where you think kind of breakeven levels are for newer capacity and what sort of kind of margin advantage that newer capacity may have when it does hit?

Okay, good yeah, good question, let me address them in turn. The first question as it relates to the new capacity coming online, one of the three competitors in the Hawaii Trade (inaudible) which operates a vessel every two weeks going to be introducing a second vessel. We think sometime in the first quarter of 2014, that’s our current best guess. And part of the question about, first of all, what the deployment is going to be? It’s – where is they’re going to call? What is its actual container capacity versus overall capacity, and most importantly how fast the market is otherwise going to grow? All going to be factors that are going to way into when and how we need to break into of 10-ship from our 9-ship deployment. Matson as we’ve said at the year end call is hoping to finalize our vessel replacement plans around taking two – acquiring two new additional vessels that will replace some of our oldest fleet units. The benefits that and we will have more to say about this as we get closer to making the decision, but some of the benefits around the new vessel are clearly it will be bigger, it will operate on a per slot basis with much more fuel efficiency. Like other vessels that have been introduced recently in the Jones Act trades, we are taking a close look at LNG, which does provide potential savings as well and then of course with all the other things about manning savings, about lower maintenance and operating costs. So there is a whole series of benefits that will go into our decision around vessel replacement. So that’s – we will have more to say about that as we get closer to making that decision. Michael Webber – Wells Fargo Securities: Excellent. Okay, I guess one more bigger picture question and you touched on a bit already with the captivating effect, but the free rates on a global year is on a pressure particularly around Europe, basically Trans-Pac has been certainly more stable. But if you look at your international counterparts, they are under a fair amount of pressure from a pricing perspective. Just curious as to how inflated you think that Trans-Pac market really is. I mean certainly the guidance you guys put out there and where we seen in rates is not necessarily indicative of what we are seeing elsewhere in the world. I am just curious, may be a bit more color in terms of how you see that play off as the year, and then is that market really is more insulated if we see 2013 and you can’t really kind of speak beyond that. What’s really driving there?

Yeah, I mean, so, I can comment on my views of the general trade and then Matt place within it. I do think from an overall macro trade prospective, the market continues to be over tonnage. There is a, the question about how much new ordering of even larger vessels is going to take place, and of course, the macro questions about, how quickly Europe is going to recover and helpful to the U.S. economy is going to recover to presume some other demand, but we continue to believe, because side demand equation is going to be under pressure certainly for the remainder of this year, and we’re not going to make a call on 2014, but it certainly looks like it could be a couple of years where this capacity overhang may have an impact on rates. But I think, what’s important to note here from Matson is, at today’s freight rates, at which carriers are struggling to breakeven or even loosing money, and that one is doing very well, because of the dual head-haul structure of our service where we leave the West Coast cargo, full of cargo for Hawaii and Guam, and then we’re able to sale just a few days from Guam to our three ports at Central China and fill up with, which is essentially for us backhaul cargo, so even in today’s moving size where its relatively negative international environment, for us, it works very well. And so of course, we would welcome an improvement in the international trades and so we’ll look up to see when that will happen, but in the mean time I think we’re doing just fine in our service there. Michael Webber – Wells Fargo Securities: Gotcha. And again, this is not necessarily you evaluate, but we just kind of think about the freight rate weakness and aside from what’s been driven by over capacity, and it certainly seems like some of the Chinese lines are become a lot more aggressive on price throughout there, European competitors. Is that – I guess pricing aggression outside of this overcapacity issues, are you noticing any of that bleed into the trend back or is it been relatively stable or rationale?

Yeah, I mean over the years given my background in the trade, it seems like different carriers at different times are the aggressors.

Yeah. Michael Webber – Wells Fargo Securities: Yes.

And so I would say some of the aggressors in the market now that will remain nameless are not the Chinese carriers, there are other people. So it’s really interesting in bringing others that the whole business that’s the carriers will understand the carriers’ financial situation there in and attempt to add rationally. We hope that happens, but that’s why we’re signaling some caution here in case they don’t. Michael Webber – Wells Fargo Securities: Interesting, great. I’ll follow-up you to on that off-line. Thank you guys. I appreciate of that.

Okay.

Thanks Mike.

(Operator Instructions) And I’m showing no additional questions at this time. I’d like to turn the conference call back over to Mr. Cox for closing remarks.

Okay, operator, thank you and thank you to all of you for listening in today. We appreciate your interest and support and we’ll look forward to speaking with you all on the second quarter conference call. Thank you.

Ladies and gentlemen that concludes today’s conference call. We would thank you for attending. You may now disconnect your telephone lines.