INVESTMENT IN SSAT

12 Months Ended

Dec. 31, 2019

INVESTMENT IN SSAT

INVESTMENT IN SSAT

4. INVESTMENT IN SSAT

The Company accounts for its 35 percent ownership interest in SSAT using the equity method of accounting. The Company records its share of income from SSAT in costs and expenses within the Ocean Transportation segment due to operations of SSAT being an integral part of the Company’s Ocean Transportation business. The Company’s investment in SSAT was $76.2 million and $87.0 million at December 31, 2019 and 2018, respectively.

The Company’s share of income recorded in the Consolidated Statements of Income and Comprehensive Income and dividends received by the Company during the years ended December 31, 2019, 2018 and 2017 are as follows:

	Years Ended December 31,
(In millions)	2019		2018		2017
Company's share of net income	$	20.8	$	36.8	$	28.2
Distributions received	$	25.2	$	42.0	$	17.5

SSAT adopted the new lease accounting standard ASC 842 during the year ended December 31, 2019. As part of the adoption, the Company recorded a net adjustment that reduced retained earnings by $5.6 million representing its portion of SSAT’s total impact of adopting the new lease accounting standard.

The Company’s Ocean Transportation segment operating costs include $218.7 million, $213.4 million and $181.3 million for the years ended December 31, 2019, 2018 and 2017, respectively, for terminal services provided by SSAT. Accounts payable and accrued liabilities in the Consolidated Balance Sheets include $63.6 million and $59.2 million for terminal services payable to SSAT at December 31, 2019 and 2018, respectively.

A summary of the condensed balance sheets of SSAT at December 31, 2019 and 2018 is as follows:

	As of December 31,
Condensed Balance Sheets (in millions)	2019		2018
Current assets	$	300.8	$	310.4
Non-current assets (1)		1,283.0		152.1
Total Assets	$	1,583.8	$	462.5
Current liabilities (1)	$	201.9	$	71.0
Non-current liabilities (1)		1,179.2		156.2
Equity		202.7		235.3
Total Liabilities and Equity	$	1,583.8	$	462.5

(1) Non-current assets, current liabilities and non-current liabilities include $1,117.0 million, $135.7 million and $1,033.1 million at December 31, 2019, respectively, related to operating lease right of use assets and operating lease liabilities recorded as a result of the adoption of the new lease accounting standard during the year ended December 31, 2019.

A summary of the condensed statements of operating income and net income of SSAT for years ended December 31, 2019, 2018 and 2017 are as follows:

	Years Ended December 31,
Condensed Statements of Operating Income and Net Income (in millions)	2019		2018		2017
Operating revenue	$	1,098.3	$	1,074.2	$	933.5
Operating costs and expenses		1,035.3		963.7		850.2
Operating income		63.0		110.5		83.3
Net Income (1)	$	57.2	$	104.9	$	80.9

(1) Includes earnings from equity method investments held by SSAT less earnings allocated to non-controlling interests.