2015 Annual Report
Kirby Corporation
2015 Quarterly Review
(In thousands, except per share amounts) (Unaudited)
2015
2014
Change
Second Quarter
2015
2014
Change
First Quarter
Revenues
Net earnings*
$ 587,673 $ 589,246
$ 61,078 $ 62,246
Earnings per share*
$
1.09 $ 1.09
EBITDA
$ 148,585 $ 146,889
—%
(2)%
—%
1%
Revenues
Net earnings*
$ 543,156 $ 628,054
$ 58,075 $ 74,992
(14)%
(23)%
Earnings per share*
$
1.04 $ 1.31
(21)%
EBITDA
$ 144,355 $ 167,636
(14)%
Highlights
Highlights
Marine transportation inland and coastal demand stable with
utilization in 90% to 95% range with flat inland and favorable
coastal pricing
Marine transportation inland and coastal demand stable with
utilization in 90% to 95% range with inland pricing down
modestly and coastal pricing favorable
Decline in price of crude oil and resulting lower production
levels generated some industry-wide inland tank barge
overcapacity as barges shifted out of crude oil service
Diesel engine services land-based demand declined as
customers requested cancellations or delays for existing
orders of new pressure pumping units, resulting in 40%
reduction in manufacturing workforce
Marine and power generation demand stable with softness
in Gulf of Mexico oilfield service market
Industry-wide inland barges shifted out of crude oil service
leading to modest pressure on inland utilization and rates
Heavy coastal shipyard schedule negatively impacted results
Diesel engine services land-based market challenging
Marine and power generation demand stable with weakness
in Gulf of Mexico oilfield service market
Third Quarter
Revenues
Net earnings*
2015
2014
Change
Fourth Quarter
2015
2014
Change
$ 532,565 $ 680,721
$ 56,843 $ 76,717
(22)%
(26)%
Revenues
Net earnings*
$ 484,138 $ 668,297
$ 50,688 $ 68,051
(28)%
(26)%
Earnings per share*
$
1.04 $ 1.34
(22)%
Earnings per share*
$
0.94 $ 1.19
(21)%
EBITDA
Highlights
$ 144,563 $ 170,090
(15)%
EBITDA
$ 133,901 $ 157,946
(15)%
Highlights
Marine transportation inland and coastal demand stable with
utilization in 90% to 95% range with inland pricing down
modestly and coastal pricing favorable
Marine transportation inland and coastal demand stable with
utilization in high 80% to low 90% range with inland pricing
down modestly and coastal pricing flat
Industry-wide inland barges shifted out of crude oil service
leading to modest pressure on inland utilization and rates
Inland operating conditions challenging from flooding on
river systems
Heavy coastal shipyard schedule negatively impacted results
Diesel engine services land-based market challenging
Diesel engine services land-based market challenging
Marine and power generation demand stable with weakness
in Gulf of Mexico oilfield service market
Marine and power generation demand stable with weakness
in Gulf of Mexico oilfield service market
* Net earnings represent net earnings attributable to Kirby and earnings per share
represents diluted net earnings per share attributable to Kirby common stockholders.
Statements made in this Annual Report with respect to the future are forward-looking
statements. These statements reflect Management’s reasonable judgment with respect to
future events. Forward-looking statements involve risks and uncertainties. Actual results
could differ materially from those anticipated as a result of various factors. Forward-
looking statements are based on currently available information and Kirby assumes no
obligation to update any such statements. A list of these factors can be found in Kirby’s
Annual Report on Form 10-K for the year ended December 31, 2015, included in this
Annual Report and filed with the Securities and Exchange Commission.
FRONT COVER: The Kirby 185-01, a Kirby Offshore Marine 185,000 barrel
coastal tank barge, with the M/V Nancy Peterkin, a 10000 horsepower
tugboat, transits the Columbia River in Oregon in November 2015 on
its maiden voyage. This is the first of two new 185,000 barrel coastal
articulated tank barge and tugboat units, with the second unit anticipated to
be placed in service in mid-2016. Both units are under multi-year contracts.
Kirby Corporation 2015 Annual Report
Financial Highlights
(In thousands, except per share amounts)
Revenues:
Marine transportation
Diesel engine services
For the years ended December 31,
2015
2014
2013
2012
2011
$ 1,663,090 $ 1,770,684 $ 1,713,167 $ 1,408,893 $ 1,194,607
484,442
795,634
529,028
703,765
655,810
$ 2,147,532 $ 2,566,318 $ 2,242,195 $ 2,112,658 $ 1,850,417
Net earnings attributable to Kirby
$ 226,684 $ 282,006 $ 253,061 $ 209,438 $ 183,026
Net earnings per share attributable to Kirby
common stockholders (diluted)
$ 4.11 $ 4.93 $ 4.44 $ 3.73 $ 3.33
EBITDA–Earnings before interest, taxes,
depreciation and amortization:*
Net earnings attributable to Kirby
$ 226,684 $ 282,006 $ 253,061 $ 209,438 $ 183,026
Interest expense
Provision for taxes on income
Depreciation and amortization
18,738
133,742
192,240
21,461
169,782
169,312
27,872
24,385
152,379
127,907
164,437
145,147
17,902
109,255
126,029
EBITDA*
$ 571,404 $ 642,561 $ 597,749 $ 506,877 $ 436,212
Property and equipment, net
$ 2,778,980 $ 2,589,498 $ 2,370,803 $ 2,315,165 $ 1,822,173
Total assets
$ 4,156,266 $ 4,141,909 $ 3,682,517 $ 3,653,128 $ 2,960,411
Long-term debt, including current portion
$ 778,834 $ 716,700 $ 749,150 $ 1,135,110 $ 802,005
Total equity
$ 2,279,196 $ 2,264,913 $ 2,022,153 $ 1,707,054 $ 1,454,158
Revenues
(In millions)
Earnings Per Share
EBITDA*
(In millions)
$2,566
$2,242
$2,113
$2,148
$1,850
$4.93
$4.44
$4.11
$3.73
$3.33
$643
$598
$571
$507
$436
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14
15
11
12
13
14
15
11
12
13
14
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* EBITDA, defined as net earnings attributable to Kirby before interest expense, taxes on income, depreciation and amortization, is a non-GAAP financial measure
used by Kirby because of its wide acceptance as a measure of operating profitability before nonoperating expenses (interest and taxes) and noncash charges
(depreciation and amortization).
1
To Our Shareholders
T he wind shifted in 2015, ending
our four-year run of consecutive
record revenues and earnings.
In 2015, our financial results
reflected $2.1 billion in revenues,
net earnings of $227 million, earnings per
share of $4.11 and EBITDA of $571 million.
Our free cash flow for 2015 after investing
$345 million in fleet improvements and new
equipment and facilities was $203 million.
The principal driver that affected our marine
transportation results was lower crude
oil and natural gas condensate volumes
transported by water. The shale oil expan-
sion that began in late 2010, encouraged
by new technology and higher crude oil
prices, resulted in new oil reserves and
created opportunities for marine transpor-
tation companies to move these increased
volumes. To accommodate the new crude
oil volumes, the inland tank barge industry
built additional capacity. When crude oil
began to be transported by water, Kirby
believed that much of this capacity would
ultimately be serviced by pipelines, but until
pipelines were built, marine transportation
was a viable option. Unfortunately, starting
in late 2014, additional pipeline capacity
began to come on-line at the same time
that crude oil prices collapsed. Much of the
industry-wide tank barge capacity built for
crude oil service was returned from crude
oil service during 2015, creating some
industry overcapacity and affecting tank
barge utilization and rates.
In our inland and coastal marine trans-
portation markets other than crude oil,
demand was stable for petrochemicals,
refined petroleum products and black oil.
The United States petrochemical industry
continued to benefit from a low-cost nat-
ural gas feedstock advantage, producing
strong volumes of intermediate products
for transportation between Gulf Coast
petrochemical plants and terminals for
export destinations. The refined petroleum
products market benefited from a signifi-
cant increase in vehicle miles driven in the
United States due to low gasoline prices,
as well as continued heavy exports of
diesel fuel and heavy fuel oils. Favorable
black oil demand also continued, driven
by heavy refinery output; however, the
transportation of crude oil and natural gas
condensate, both in the inland and in the
coastal markets, declined significantly as
the year progressed.
Despite the decline in crude oil volumes,
we were able to maintain utilization in both
our inland and coastal fleets in the 90%
to 95% range throughout most of 2015.
Because of some excess industry capacity
in the inland sector, as 2015 progressed,
there was pressure on both term and spot
contract pricing. Term contract pricing
for the inland fleet was down in the 1% to
5% range year over year. In our coastal
fleet, where industry supply and demand
remained fairly balanced, term contract
pricing was up 6% to 8% in the first quar-
ter, but the pace of pricing gains slowed as
the year progressed, with the fourth quarter
contract renewals becoming relatively flat.
While the negative trends on pricing have
been driven in large part by the decline in
the number of tank barges moving crude
oil and natural gas condensate, it has also
been driven by the uncertainty in the market
that global commodity price volatility has
had on our customers.
Throughout 2015, our land-based diesel
engine services market also remained
very challenging due to the lower price of
crude oil that led to a dramatic decline in
drilling in North American shale formations.
As a result, our oil service customers sig-
nificantly cut their 2015 capital spending
levels. Manufacturing and remanufacturing
of oilfield service equipment, including
pressure pumping units, declined sig-
nificantly as customers deferred new
equipment orders, requested price reduc-
tions or cancelled their orders. In addition,
service of land-based diesel engines, trans-
missions and pumps, and the sale of parts
also declined.
Our marine diesel engine services market
also experienced some weakness through-
out 2015 from its Gulf of Mexico oilfield
service customers, but saw continued
stable demand from inland and offshore
marine customers for overhaul projects,
service, direct parts sales and the sale of
engines. The power generation market
remained stable, with engine-generator set
upgrade projects and parts sales for both
domestic and international customers.
To meet the challenge, in all our busi-
nesses, of declining revenues, we have
refocused our efforts on reducing our cost
structure, operating safely and redoubling
our efforts with respect to customer ser-
vice. Throughout 2015 and into 2016, we
renewed efforts to improve equipment
reliability, improve our safety procedures
and increase both internal and customer
communication. We were able to reduce
our maintenance costs and improve service
reliability. We also streamlined back office
functions in traffic, sales and accounting,
and captured additional cost savings
through competitive bidding, supplier con-
solidation and transaction cost reductions.
In our land-based diesel engine services
business, we cut costs and streamlined
processes, including reducing headcount
by 57%, and consolidated our three man-
ufacturing facilities into a single location.
Also, in late 2015, we sold substantially
all of the assets of UE Compression LLC,
a manufacturer and packager of custom
compression systems. In our marine and
power generation markets, we have proac-
tively responded to the downturn in the Gulf
of Mexico offshore oil services market by
cutting costs and deploying technicians on
a rotational basis to regions of the country
with heightened service activity levels, par-
ticularly during seasonal peaks in demand
for marine diesel engine overhauls. We
also initiated construction of a new, state-
of-the-art service and distribution facility
in Houma, Louisiana, that will allow us to
consolidate our largest marine diesel engine
operations along the Gulf Coast.
During 2015, we continued to reinvest in
our marine inland and coastal fleets, spend-
ing $345 million on capital expenditures.
We spent $71 million on the construc-
tion of inland tank barges and towboats,
$117 million for progress payments on the
construction of coastal tank barges and
tugboats, and $157 million primarily for
upgrades to our existing inland and coastal
fleets. Our coastal tank barge and tugboat
construction, including anticipated deliv-
ery dates, is discussed in more detail on
page 9 of this annual report.
2
Kirby Corporation 2015 Annual Report
Over the course of 2015, we took deliv-
ery of 36 new inland tank barges. We
also acquired six pressure barges from a
competitor for $42 million. Net of inland
tank barge retirements, we added approx-
imately 165,000 barrels of inland tank
barge capacity during 2015. In the coastal
trade, we took delivery in late 2015 of one
of the new 185,000 barrel tank barge and
tugboat units.
The significant reduction in the price of
Kirby common stock throughout 2015
offered us an opportunity to repurchase
shares. Throughout 2015, as the price of
Kirby common stock declined, we repur-
chased approximately 3.3 million shares for
$241 million. During the 2016 first quarter
to date, we repurchased approximately
35,000 shares for $1.8 million. Our remain-
ing repurchase authorization is currently
1.4 million shares.
Our continued strong cash flow allowed us
to maintain our balance sheet strength and
our investment grade ratings by Standard
& Poor’s and Moody’s. In April 2015, we
entered into a $550 million unsecured
revolving credit facility with a maturity
date of 2020. The credit facility allows for
a $300 million increase in the form of a
revolver or term loan, subject to the con-
sent of each bank that elects to participate.
Our debt at year-end was $779 million,
consisting of $500 million of unsecured
senior notes, $150 million due in 2020 and
$350 million due in 2023, and $279 million
outstanding from the $550 million
unsecured revolving credit facility. This
compared with debt of $717 million at
December 31, 2014. Debt-to-capitalization
at year-end was 25.5% compared with
24.0% at December 31, 2014.
We expect 2016 will be a challenging year
for Kirby given the continuance of low
crude oil prices, its impact on all related
businesses, and the developing underlying
weakness in the United States and global
economies. The marine transportation
industry will need to absorb the excess
capacity it has created in the inland market
and, to a lesser extent, the coastal market.
Although the exuberance our industry had
for crude oil volumes is disappointing, it
is by no means fatal. Some crude oil will
Joe Pyne
Chairman of the Board
David Grzebinski
President and Chief Executive Officer
continue to be moved by water where there
is not enough volume to build a pipeline
or where shippers want the flexibility that
barging provides with respect to volumes
moved and distribution. The good news
from a supply and demand standpoint
is that both the industry-wide inland
and coastal fleets have old equipment,
approximately 650 inland tank barges and
approximately 45 coastal tank barges that
are over 30 years old, that will eventually be
retired. Also, marine transportation markets,
other than crude oil, are healthy and
expanding. All of this, plus a significantly
lower inland tank barge order book for
2016, will help balance future supply
and demand.
Kirby views economic headwinds and
industry challenges as opportunities. With
our investment-grade rated balance sheet,
we are very well positioned to take advan-
tage of acquisitions as they come along. In
this regard, in March 2016, we announced
the signing of an agreement to purchase
the inland tank barge fleet of Seacor
Holdings, Inc. and affiliates (“Seacor”) for
approximately $88 million in cash. The
asset purchase will consist of 27 inland
30,000 barrel tank barges and 13 inland
towboats, plus one 30,000 barrel tank
barge and one towboat currently under
construction. This acquisition is expected to
close in the 2016 second quarter.
We want to thank each and every Kirby
employee for their hard work and dedica-
tion in these challenging times, as well as
our Board of Directors and shareholders
for their continued direction and support.
Also, we want to thank our customers for
their confidence in Kirby and for working
so closely with us during 2015 dealing with
the numerous high water and lock closure
challenges.
We especially want to thank Bill Lamont, a
Kirby Board member since 1979, who will
retire from the Board at our Annual Meeting
in April. Bill served Kirby for 37 years, and his
expertise, guidance and support contributed
significantly to the growth of Kirby from pri-
marily an oil and gas company with assets of
$101 million in 1979 to the Kirby Corporation
of today with assets of $4.2 billion.
On a final note, we are pleased to welcome
a new director to our Board. Anne-Marie
Ainsworth, retired President and CEO of the
general partner of Oiltanking Partners, L.P.
and of Oiltanking Holding Americas, Inc.,
joined the Board in October 2015.
Anne-Marie brings a wealth of industry
expertise and knowledge to Kirby.
Respectfully submitted,
Joseph H. Pyne
Chairman of the Board
David W. Grzebinski
President and Chief Executive Officer
Houston, Texas, March 8, 2016
3
Marine Transportation
Kirby Corporation, through its wholly owned subsidiaries Kirby Inland Marine and Kirby Offshore Marine,
is the United States’ largest tank barge operator. All of Kirby’s tank barges and towing vessels operate
under the United States flag and are qualified for trade under the Jones Act. Kirby Inland Marine and
Kirby Offshore Marine have approximately 3,250 employees, of which approximately 2,475 are vessel
crew members.
Kirby Inland Marine transports petrochemicals, black oil, refined petroleum products and agricultural
chemicals by inland tank barges throughout the Mississippi River System, Gulf Intracoastal Waterway
and Houston Ship Channel.
Kirby Offshore Marine transports refined petroleum products, black oil and petrochemicals by coastal
tank barges in the 195,000 barrel or less category along all three United States coasts and in Alaska and
Hawaii, as well as dry-bulk cargoes along the Gulf Coast and East Coast.
Kirby Inland Marine and Kirby Offshore Marine customers are primarily large United States
petrochemical and refining companies. Kirby provides a vital link in the production of petrochemicals,
transporting raw materials into plants, products from one plant to another for further processing, and
finished products to manufacturing plants or distribution terminals for both domestic and foreign
destinations. Black oil, including crude oil and natural gas condensate, is transported to refineries and
distribution terminals, residual fuel to utilities and asphalt to distribution terminals. Kirby transports
gasoline blends, additives, diesel fuel, heating oil and aviation fuel from refineries to distribution
terminals for both domestic and foreign destinations. Agricultural chemicals are transported primarily
to distribution terminals in the Midwest.
A pilot’s view at midnight from inside the wheelhouse of the M/V Blanco, a 2000 horsepower Kirby Inland Marine towboat, with a loaded two-
barge black oil tow southbound on the lower Mississippi River south of Greenville, Mississippi. The picture reflects the instruments used for
navigation, including a VHF Radio, Bridge Pilot Monitoring System, Furuno Digital Compass, AID and GPS, dual Furuno Radars, Kirby ECS
Chartplotter, Dehart Swing Meter and a Furuno Depth Sounder. The picture was taken by James Bates, a Pilot for Kirby Inland Marine.
4
Kirby Corporation 2015 Annual Report
Results of Operations for 2015
Operating income of $375 million on
revenues of $1.7 billion compared
with operating income of $430 million
on revenues of $1.8 billion for 2014.
Operating margin of 22.5%
compared with 24.3% for 2014.
Inland operations were 68% and
offshore operations 32% of
revenues.
Petrochemicals represented 47% of
transportation revenues, black oil
30%, refined petroleum products
20% and agricultural chemicals 3%.
Inland and coastal transportation
markets reflected stable petro-
chemical, black oil and refined
products volumes throughout 2015.
Tank barge utilization for both the
inland and the coastal fleets was in
the 90% to 95% range for the 2015
first nine months, declining to the
high 80% to low 90% range during
the fourth quarter.
Inland transportation demand for the
movement of crude oil and natural
gas condensate declined as 2015
progressed. The low price of crude
oil during 2015 resulted in lower
United States crude oil and natural
gas condensate production.
Additional crude oil pipeline capacity
coming on-stream in 2015, along
with the industry-wide transfer of
inland crude oil barges into other
markets, resulted in some excess
industry-wide inland tank barge
capacity and corresponding lower
term contract renewals and spot
contract pricing as 2015 progressed.
Coastal transportation demand
remained relatively consistent for the
entire year with favorable term and
spot market pricing. Results were
impacted by a significant number of
vessels in the shipyard for regulatory
drydock maintenance during 2015,
as well as higher depreciation and
amortization of major maintenance
costs from the reduction in the useful
lives of certain vessels prior to their
scheduled 2016 shipyards.
5
Revenues
(In millions)
Operating Income
(In millions)
Operating Margin
$1,771
$1,713
$1,663
$430
$408
$375
21.9% 22.1%
23.8% 24.3%
22.5%
$1,409
$1,195
$312
$262
11
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15
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14
15
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15
Kirby Inland Marine
Kirby Inland Marine is a key part of the United States inland tank barge industry. The industry is a
combination of large integrated transportation companies, small operators and captive fleets owned by
United States refining and petrochemical companies. The nation’s inland tank barge fleet consists of
approximately 3,850 liquid tank barges. Kirby Inland Marine is the nation’s largest operator with
898 inland tank barges, or approximately 23% of the nation’s inland fleet.
The United States inland waterway system is composed of 12,000 miles of commercially navigable
waterways linking 38 states and 635 shallow draft harbors to coastal ports and the world. Kirby Inland
Marine operates on the Mississippi River System, the Gulf Intracoastal Waterway and the Houston Ship
Channel. The Mississippi River System includes the Mississippi, Arkansas, Illinois, Missouri, Ohio, Red,
Tennessee, Yazoo, Ouachita and Black Warrior Rivers and the Tennessee-Tombigbee Waterway. The
Gulf Intracoastal Waterway runs from Brownsville, Texas, to Port St. Joe, Florida. These “water highways”
provide the most efficient, economic and environmentally safe modes of transportation for bulk liquid
cargoes available today. Kirby Inland Marine serves customers along these waterways through its Canal,
River and Linehaul fleets.
The M/V Daytona, a Kirby Inland Marine 4600 horsepower inland towboat, pushes loaded
tank barges on the Mississippi River near Baton Rouge, Louisiana. The M/V Daytona
operates in Kirby’s Linehaul system, transporting petrochemical feedstocks, processed
chemicals, lube oils and agricultural chemicals to multiple waterfront terminals and plants
along the Mississippi, Illinois and Ohio Rivers on a regular schedule.
Inland Tank Barge Fleet
Average Age by Year
Year Barges
Barrel
Capacity
Average
Age
2015
2014
2013
2012
2011
2010
2009
2008
898
884
861
841
819
825
863
914
17.9
17.8
17.3
16.7
16.2
15.9
16.7
17.5
15.2
15.3
16.2
17.7
18.9
20.3
22.2
23.9
Inland Tank Barge Fleet
Petrochemicals/Refined products
Black oil
Pressure
Anhydrous ammonia
Specialty
Total
704
120
59
10
5
898
Total Barrel Capacity
17.9 MM
Inland Towboat Fleet
800–1300 HP
1400–1900 HP
2000–2400 HP
2500–3200 HP
3300–4900 HP
5000 HP and greater
Spot charters
Total
80
79
53
17
11
2
1
243
6
Kirby Corporation 2015 Annual Report
Inland Fleets
In the inland tank barge business, a
“tow” describes the combination of
an 800 to 5000 or greater horsepower
towboat and one or more 10,000 to
30,000 barrel tank barges.
eight tank barges. A unit tow is gener-
ally a dedicated tow in the service
of a single customer with the same
towboat and barges operating on
consecutive voyages between loading
and discharge points.
Canal: A Canal tow transports petro-
chemical feedstocks, processed
chemicals, pressurized products,
black oil and refined petroleum
products along the Gulf Intracoastal
Waterway, the Mississippi River below
Baton Rouge and the Houston Ship
Channel. A Canal tow consists of an
800 to 2200 horsepower towboat
pushing one to six tank barges.
River: A River tow transports the
same types of products as a Canal
tow with the addition of agricultural
chemicals. River tows primarily oper-
ate on the Mississippi River above
Baton Rouge, on the Illinois, Ohio
and Tennessee Rivers, and on the
Tennessee-Tombigbee Waterway.
The River fleet operates “unit tows”
consisting of a 3000 to 6000 horse-
power towboat pushing four to
Linehaul: A Linehaul tow also trans-
ports the same type of products as
the Canal and River tows. Linehaul
tows primarily operate along the
Gulf Intracoastal Waterway and the
Mississippi, Illinois and Ohio Rivers.
Linehaul River tows utilize 3000 to
6000 horsepower towboats pushing
10 to 25 tank barges. Linehaul Canal
tows utilize 1400 to 2200 horsepower
towboats pushing three to six barges.
A typical Linehaul operation picks
up loaded barges from petrochemi-
cal plants and refineries on the Gulf
Intracoastal Waterway, tows the
barges to staging points near Baton
Rouge, then transports the barges
upriver to customers along the
Mississippi, Illinois and Ohio Rivers,
dropping off barges along the way and
picking up barges on the return trip to
Baton Rouge.
Products Transported by Markets
Petrochemicals: benzene, styrene,
methanol, acrylonitrile, xylene,
caustic soda, naphtha, butadiene,
propylene, butane, propane
Black Oil: residual fuel, fuel oils,
vacuum gas oil, asphalt, carbon
black feedstock, crude oil, natural
gas condensate, ship bunkers
Refined Petroleum Products:
finished gasoline, gasoline blend-
stock, aviation fuel, heating oil,
diesel fuel, ethanol
Agricultural Chemicals: anhydrous
ammonia, nitrogen-based liquid
fertilizer, industrial ammonia
New Construction
During 2015, Kirby continued to rein-
vest in its inland tank barge fleet with
the delivery of 36 new tank barges,
adding 489,000 barrels of capacity
at a cost of approximately $71 million.
In early 2015, Kirby acquired six
inland pressure tank barges with a
total capacity of 97,000 barrels for
$41.3 million. Since 2008, through
Kirby’s inland tank barge construc-
tion program, the average age of
Kirby’s inland fleet has declined from
23.9 years in 2008 to 15.2 years today
(see table on page 6).
7
Kirby Offshore Marine
Kirby Offshore Marine is a major component of the United States offshore tank barge industry. The
industry consists mainly of large integrated marine transportation companies and small operators.
The nation’s coastal tank barge fleet in the 195,000 barrels or less category consists of approximately
270 barges. Kirby Offshore Marine is the nation’s largest tank barge operator, with 70 coastal tank barges,
or approximately 26% of the nation’s coastal fleet.
The United States coastal system is made up of ports along the Atlantic, Gulf and Pacific Coasts, as well
as ports in Alaska, Hawaii and on the Great Lakes. Like the inland waterway systems, the coastal trade
is vital to the regional distribution of refined petroleum products, crude oil, natural gas condensate and
petrochemicals from refineries, petrochemical plants and storage facilities to distribution terminals,
manufacturers, other refineries, power plants and ships. Kirby Offshore Marine has the broadest
geographic presence in the coastal tank barge industry, offering single-source capabilities throughout
the United States coastal system. Coastal tank barges in the 195,000 barrels or less category have the
flexibility to access coastal ports inaccessible to larger vessels, while still delivering large volumes of
products. Kirby Offshore Marine services customers through its Atlantic and Pacific divisions.
The Kirby 185-01 is launched at Gunderson Marine’s Portland, Oregon, shipyard on May 30,
2015. The 185,000 barrel coastal tank barge has the latest cargo systems, including a crude
oil washing system and cargo heating system that allows the barge to transport crude oil,
natural gas condensate, petrochemicals and refined petroleum products.
8
Kirby Corporation 2015 Annual Report
Coastal Operations
Atlantic: The Atlantic division oper-
ates along the eastern seaboard of
the United States and along the Gulf
Coast, from Maine to Texas, region-
ally transporting refined petroleum
products, gasoline blending stocks,
heating oil and aviation fuel from refin-
eries and storage terminals to end
user distribution terminals. Crude oil
and natural gas condensate are trans-
ported from regional storage terminals
to refineries. Petrochemicals are pri-
marily transported from Gulf Coast
petrochemical plants to end users
along the Gulf and Atlantic Coasts.
Pacific: The Pacific division operates
along the Pacific Coast, regionally
transporting refined petroleum prod-
ucts from refineries and storage
terminals to distribution terminals from
Southern California to Washington
State, throughout Alaska and from
California to Hawaii, including ethanol
from California to Hawaii. Crude oil
and natural gas condensate are
primarily transported from storage
terminals in Oregon and Washington
State to regional refineries and
refineries in California.
The Pacific division also operates in
Hawaii, transporting refined petroleum
products from a Hawaii refinery to
Hawaiian Islands distribution terminals,
black oil to power generation custom-
ers and bunker fuel to ships. The divi-
sion also provides ship docking service,
standby tug assistance and line han-
dling to vessels using the Single Point
Mooring installation at Barbers Point,
Oahu, a facility where large tankers
safely load and discharge their cargos
through an offshore buoy system.
Dry Products: Kirby Offshore Marine
also transports raw sugar and other
products from the Gulf Coast to East
Coast ports. Kirby Ocean Transport
Company transports coal from Louisiana
across the Gulf of Mexico to a power
generation facility in Florida and lime-
stone rock from Florida to Alabama.
Products Transported
Refined Petroleum Products:
finished gasoline, gasoline blend-
stock, aviation fuel, heating oil,
diesel fuel, ethanol
Black Oil: residual fuel, fuel oils,
vacuum gas oil, asphalt, carbon
black feedstock, crude oil, natural
gas condensate, ship bunkers
Petrochemicals: cumene, phenol,
acetone, cyclohexane, caustic soda,
naphtha
Dry Products: raw sugar, coal,
limestone rock, fertilizer
New Construction
During 2014, Kirby announced
contracts for the construction of four
coastal articulated tank barge and
tugboat units (ATBs). The coastal
tank barges have the capacity of
transporting crude oil, natural gas
condensate, refined petroleum
products and petrochemicals.
The first of the four ATBs, a
185,000 barrel tank barge and a
10000 horsepower tugboat, was
placed in service in late 2015. The
second ATB, also a 185,000 barrel
tank barge and 10000 horsepower
tugboat, is scheduled to be placed
in service in mid-2016. Both of these
ATBs have contracted with major
shippers for multiple-year charters
with customer option provisions.
The third and fourth ATBs are
155,000 barrel tank barges with
6000 horsepower tugboats. One is
scheduled to be placed in service in
mid-2016 and the last in mid-2017.
Kirby also contracted for the construc-
tion of a new 35,000 barrel coastal
tank barge for the petrochemical trade
and two 4900 horsepower coastal
tugboats. The coastal tank barge and
coastal tugboats are anticipated to be
placed in service in 2017.
Coastal Tank Barge Fleet
Refined products/Petrochemicals
Black oil
Total
46
24
70
Total Barrel Capacity
6.0 MM
Coastal Tugboat Fleet
1000–1900 HP
2000–2900 HP
3000–3900 HP
4000–4900 HP
5000–6900 HP
Greater than 7000 HP
Total
7
5
15
24
11
11
73
Offshore Dry-Bulk Cargo Fleet
Dry-bulk barge and tugboat units
Deadweight tonnage
6
113,000
The M/V Nancy Peterkin and the
Kirby 185-01 were placed in service as an
articulated coastal tank barge and tugboat
unit in November 2015 under a long-term
contract. Its initial cargo was refined
petroleum products.
9
Diesel Engine Services
Kirby Corporation, through its wholly owned subsidiaries Kirby Engine Systems and
United Holdings, provides a service that is essential to the day-to-day operations of marine
companies, power generation facilities, and the oil and gas industry. Kirby provides
aftermarket in-house and worldwide in-field service, offering its long-standing customers
a single source for the service and distribution of diesel engines and ancillary products,
and the manufacture and remanufacture of oilfield service equipment.
Kirby Engine Systems provides aftermarket service and OEM replacement parts for
medium-speed and high-speed diesel engines, and ancillary products, as well as the sale
of new engines for the marine and power generation industries.
United Holdings provides aftermarket service, OEM replacement parts and distribution
of high-speed diesel engines, transmissions and pumps, and the manufacture and
remanufacture of customized oilfield service equipment, including pressure pumping units,
for the land-based oil and gas industry.
Steve Adams services a Caterpillar C18 diesel engine at Kirby Engine Systems’ Houma, Louisiana, facility. Kirby Engine
Systems’ in-house service is provided through 13 service and parts facilities along the Gulf Coast, East Coast and West
Coast and in the Midwest. Kirby has the largest service area of any United States marine and power generation diesel
engine service provider.
10
Kirby Corporation 2015 Annual Report
Results of Operations for 2015
Operating income of $18.9 million on
revenues of $484 million compared
with operating income of $60.1 million
on revenues of $796 million for 2014.
Operating margin of 3.9% compared
with 7.5% for 2014.
61% of diesel engine services reve-
nues from land-based operations
and 39% from marine and power
generation operations.
The marine market experienced
stable demand for service and parts
sales to inland and offshore marine
customers throughout 2015.
However, the decline in the price of
crude oil negatively impacted the
Gulf of Mexico and international oil-
field service business that services
supply vessels and offshore drilling
rigs. The power generation market
saw consistent generator set
upgrades and parts sales throughout
2015 for both domestic and interna-
tional customers.
The land-based market was chal-
lenging throughout 2015. With the
decline in the price of crude oil in late
2014 and resulting decline in drilling
in North American shale formations,
many customers requested orders
for the manufacture and remanufac-
ture of pressure pumping units and
other oilfield service equipment be
either delayed or cancelled. In the
later part of 2015, there were few
inbound orders for new pressure
pumping units or for remanufacturing
services. In addition, sales and
service of land-based diesel engines,
transmissions and parts also
declined throughout the year. As a
result of the reduced activity, United
completed a reduction in force,
reducing approximately 67% of its
manufacturing workforce. In addition,
in late 2015 United completed its
transition from three manufacturing
and remanufacturing facilities into
an expanded single location in
Oklahoma City, thereby further
reducing overhead and streamlining
processes.
11
Revenues
(In millions)
Operating Income
(In millions)
Operating Margin
$796
$68
$66
$60
10.4%
9.4%
$704
$656
8.1%
7.5%
$529
$484
$43
$19
3.9%
11
12
13
14
15
11
12
13
14
15
11
12
13
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15
Kirby Engine Systems
Kirby Engine Systems is the leading United States service remanufacturer and OEM replacement parts
provider for medium-speed and high-speed diesel engines servicing two distinct markets, marine and
power generation. Kirby services ancillary products, including reduction gears, transmissions, starters,
governors, marine clutches, safety-related products and heat exchangers/separators, and sells new
engines. Customers are offered a single source for all of their engines, parts and ancillary products, and
are provided both in-house and in-field service through two operating subsidiaries, Marine Systems, Inc.
and Engine Systems, Inc.
Kirby has long-term distributorships,
dealerships and contract service
centers relationships with the man-
ufacturers of medium-speed and
high-speed diesel engines and ancil-
lary products. In addition, Kirby offers
service agreements to operators of
diesel-powered marine equipment,
providing them with one source of
support and service for all of their
requirements.
Principal medium-speed diesel
engines serviced are manufactured
by Electro-Motive Diesel, Inc. (EMD),
with which Kirby has a 50-year
relation ship. Principal high-speed
diesel engines serviced are manufac-
tured by Caterpillar, Cummins,
MTU Detroit Diesel and John Deere.
Kirby employs over 200 factory-
trained and authorized project
engineers, mechanics and
machinists. In-house service is
provided through 13 service and parts
facilities along the Gulf Coast, East
Coast and West Coast, and in the
Midwest. In-field service is provided
by project engineers and mechanics,
responding to customers’ needs
throughout the United States as well
as destinations worldwide.
Markets
Marine: Medium-speed and high-
speed diesel engines, OEM
replacement parts and ancillary
products on inland, coastal and
offshore towboats and tugboats,
harbor docking tugboats, offshore
oilfield service vessels, offshore oil
and gas drilling rigs, offshore com-
mercial fishing vessels, Great Lakes
ore vessels, dredging vessels,
coastal ferries and United States
government vessels. Market drivers
are the activity levels of the indus-
tries served and economic cycles of
such industries.
Power Generation: Medium-speed
diesel engines, ancillary products,
safety-related products used in
standby, peak and base-load power
generation, and generator set and
pump upgrades for domestic and
international utilities, domestic
municipalities and the worldwide
nuclear power industry.
Joe Cumeo assembles an EMD oil pump at Kirby Engine Systems’ Houma, Louisiana, facility.
Kirby Engine Systems has a 50-year relationship with EMD, the largest manufacturer of medium-
speed diesel engines. Kirby Engine Systems serves as both an EMD distributor and contracted
service center for select markets, with locations for both service and parts.
12
Kirby Corporation 2015 Annual Report
Service Locations
Medium-Speed Diesel Engines
Houma, LA
Paducah, KY
Rocky Mount, NC
Chesapeake, VA
Seattle, WA
Tampa, FL
High-Speed Diesel Engines
Houma, LA
Baton Rouge, LA
Belle Chasse, LA
New Iberia, LA
Mobile, AL
Thorofare, NJ
Houston, TX
Manufacturer Relationships
Medium-Speed Diesel Engines
Electro-Motive Diesel, Inc. (EMD)
Cooper-Bessemer & Enterprise Engines
Nordberg
High-Speed Diesel Engines
Caterpillar
MTU Detroit Diesel
Cummins
John Deere
Ancillary Products
Alfa Laval (heat exchangers/separators)
Allison Transmission (transmissions)
Falk Corporation (reduction gears)
GE Oil & Gas (compression systems)
Hannon (generators)
Ingersoll-Rand (starters)
Lufkin (gears)
Norlake (transformers)
Oil States Industries (marine clutches)
Weschler Instruments (metering products)
Woodward (governors)
13
United Holdings
United Holdings is a major United States service remanufacturer and distributor of high-speed diesel
engines, transmissions, pumps and OEM replacement parts for the land-based oil and gas industry.
United also remanufactures and manufactures customized oilfield service equipment, including
pressure pumping units, for hydraulic fracturing of North American shale formations. United has long-
standing customer relationships with large and mid-cap oilfield service providers, oil and gas operators
and producers, and public utilities, providing both in-house and in-field service capabilities.
United Holdings technicians finalize a substantially complete pressure pumping unit at
its Oklahoma City, Oklahoma, facility. In addition to pressure pumping units, United
manufactures nitrogen pumping units, cementers, hydration equipment and blenders.
14
Kirby Corporation 2015 Annual Report
Manufacturer Relationships
MTU Detroit Diesel
Allison Transmission
Daimler Trucks NA
Detroit Diesel
Isuzu
Heil
Tymco
Waukesha
Thermo King
Locations
Manufacturing
Oklahoma City, OK
Distribution and Service
Oklahoma City, OK
Tulsa, OK
Little Rock, AR
Shreveport, LA
Austin, TX
Houston, TX
Laredo, TX
Pharr, TX
San Antonio, TX
Through in-house facilities and
in-field capabilities, United provides
factory-trained and authorized
mechanics to overhaul, service and
repair high-speed diesel engines,
transmissions and pumps.
In October 2015, United opened
its new manufacturing facility in
Oklahoma City, consolidating
production work from three other
Oklahoma City facilities, thereby
improving efficiency while adding
significant capacity for future growth.
United has long-standing regional
distributorships with high-speed diesel
engine manufacturers, including MTU
Detroit Diesel and Isuzu, and is the
largest off-highway distributor for
Allison Transmission.
During this period of very challenging
low oil prices, the demand for
United’s service, distribution
and manufacturing has declined
significantly. In early 2015, an
estimated 19.5 million horsepower
of pressure pumping units, or
approximately 9,000 units, were in
operation in North America. Today,
the North America drilling rig count is
down by approximately 60%, resulting
in an estimated 50% of the nation’s
pressure pumping units being idle.
As a result, many operators have
significantly reduced maintenance
or cannibalized for parts a portion
of their idle units. It is estimated that
four to six million horsepower of idle
units will not return to service. During
this same period, United aggressively
reduced costs, streamlined processes
and consolidated its manufacturing
facilities in preparation for a future
improved market.
Markets
Service and Distribution:
High-speed diesel engines,
transmissions, pumps and OEM
replacement parts for oilfield
service companies, independent
drillers, oil and gas exploration
and production companies, public
utilities, transportation companies,
agricultural and construction
companies, and municipalities.
Drivers are the engines, trans-
missions, pumps and existing
oilfield service equipment used
in the exploration and production
of the United States oil and
gas industry.
Manufacturing: Manufacture of
custom fabricated oilfield service
equipment, including pressure
pumping units, nitrogen pumping
units, cementers, hydration
equipment and blenders for oilfield
service companies, independent
drillers, and oil and gas exploration
and production companies.
15
Board of Directors
1 Audit Committee
2 Compensation Committee
3 Governance Committee
C. Sean Day 2, 3
Chairman of Teekay Corporation
Director since 1996
Joseph H. Pyne
Chairman of the Board of Kirby
Director since 1988
David W. Grzebinski
President and Chief Executive Officer of
Kirby
Director since 2014
Richard R. Stewart 1
Retired President and CEO of GE Aero
Energy
Director since 2008
William M. Lamont, Jr. 2
Private Investor
Director since 1979
Monte J. Miller 2, 3
Retired Executive Vice President,
Chemicals, of Flint Hills Resources, LP
Director since 2006
William M. Waterman 3
Retired President and CEO of
Penn Maritime Inc.
Director since 2012
Anne-Marie N. Ainsworth 1
Retired President and CEO of
the general partner of
Oiltanking Partners, L.P. and of
Oiltanking Holding Americas, Inc.
Director since 2015
Richard J. Alario 1, 3
Retired CEO of
Key Energy Services, Inc.
Director since 2011
Barry E. Davis 1, 2
President and CEO of
EnLink Midstream GP, LLC and
EnLink Midstream Manager, LLC
Director since 2015
Officers
Kirby Corporation
Marine Transportation Group
Diesel Engine Services Group
Kirby Engine
Systems, Inc.
Dorman Lynn Strahan
President
United Holdings LLC
Derek C. Coffie
Vice President—
Finance and Controller
Mia C. Cradeur
Vice President and Controller
Ronnie E. Stover
Vice President—Sales
Engine Systems, Inc.
United Engines
P. Scott Mangan
Vice President—East Coast
David L. Tonne
Vice President—Aftermarket
Marine Systems, Inc.
UE Manufacturing
Lynn A. Ahlemeyer
Vice President—Gulf Coast
and West Coast
Gregory L. Culp
Vice President—
Engineered Products
Thomas W. Bottoms
Vice President—Midwest
Troy A. Bourgeois
Vice President—Sales
Thermo King
of Houston
Jason K. Robison
Vice President
Joseph H. Pyne
Chairman of the Board
David W. Grzebinski
President and
Chief Executive Officer
C. Andrew Smith
Executive Vice President and
Chief Financial Officer
William G. Ivey
President—
Marine Transportation Group
Joseph H. Reniers
Senior Vice President—
Diesel Engine Services and
Marine Facility Operations
Ronald A. Dragg
Vice President and Controller
James F. Farley
Vice President—
Industry Relations
Amy D. Husted
Vice President—Legal
David R. Mosley
Vice President and
Chief Information Officer
Renato A. Castro
Treasurer
Thomas G. Adler
Secretary
Kirby Inland
Marine, LP
William G. Ivey
President
James C. Guidry
Executive Vice President—
Vessel Operations
Christian G. O’Neil
Executive Vice President—
Commercial Operations
Mel R. Jodeit
Executive Vice President—
Marketing
Kirby Offshore
Marine, LLC
William G. Ivey
President
James C. Guidry
Executive Vice President—
Vessel Operations
Christian G. O’Neil
Executive Vice President—
Commercial Operations
John W. Sansing, Jr.
Senior Vice President—
Maintenance
John E. Russell
Senior Vice President—Sales
William M. Withers
Senior Vice President—Sales
John W. Sansing, Jr.
Senior Vice President—
Maintenance
William M. Withers
Senior Vice President—Sales
Stephen C. Butts
Vice President—Sales
Patrick C. Kelly
Vice President—Sales
Richard C. Northcutt
Vice President—Sales and
Horsepower Management
Lester A. Parker
Vice President—River Vessel
Operations
Cliff R. Stanich
Vice President—Sales
Thomas H. Whitehead
Vice President—Sales
Carl R. Whitlatch
Vice President and Controller
Charles R. Ferrer, Jr.
Vice President—Sales
John T. Hallmark
Vice President—Sales
William L. Oppenheimer
Vice President—Maintenance
Christopher T. Palo
Vice President—Engineering
Carl R. Whitlatch
Vice President and Controller
Kirby Ocean
Transport Company
Joseph H. Pyne
President
William M. Withers
Vice President
Osprey Line, L.L.C.
John T. Hallmark
President
Charles J. Duet
Vice President
16
Kirby Corporation 2015 Annual Report
Shareholder Information
Annual Meeting
The 2016 Annual Meeting of Stockholders
will be held at Kirby’s Houston office,
55 Waugh Drive, 9th Floor, Houston, Texas
77007, at 10:00 a.m. (CDT), Tuesday,
April 26, 2016.
Corporate Headquarters
Executive Office:
55 Waugh Drive, Suite 1000
Houston, Texas 77007
Telephone: (713) 435-1000
Fax: (713) 435-1010
Web site: www.kirbycorp.com
Mailing Address:
P.O. Box 1745
Houston, Texas 77251-1745
Inquiries Regarding
Stock Holdings
Registered shareholders (shares held in
owner’s name) should address communica-
tions concerning address changes, lost
certificates and stock transfers to:
Computershare Trust Company, N.A.
P.O. Box 43078
Providence, Rhode Island 02940-3078
Telephone: (781) 575-2879
Web site: http://computershare.com
Beneficial shareholders (shares held in
the name of banks or brokers) should
address communications to their banks
or stockbrokers.
All other inquiries should be addressed
to Mary E. Tucker, Assistant Controller,
at Kirby’s corporate headquarters.
Web Site
For more investor information, as well
as information about Kirby, visit Kirby’s
web site at www.kirbycorp.com.
Independent Registered
Accountants
KPMG LLP
BG Group Place
811 Main Street, Suite 4500
Houston, Texas 77002
Common Stock Information
Stock trading symbol—KEX
The New York Stock Exchange is the
principal market for Kirby’s common
stock. As of March 4, 2016, there were
53,805,000 common shares outstanding
held by approximately 750 registered
shareholders. The number of registered
shareholders does not reflect the number
of beneficial owners of common stock.
Common Stock Market Price
Sales Price
High
Low
2016
First Quarter
(through March 4, 2016)
2015
First Quarter
Second Quarter
Third Quarter
Fourth Quarter
2014
First Quarter
Second Quarter
Third Quarter
Fourth Quarter
$ 62.25 $ 44.63
$ 82.91 $ 70.89
$ 84.24 $ 73.31
$ 78.72 $ 59.54
$ 69.05 $ 50.42
$106.93 $ 92.86
$117.18 $ 96.00
$124.12 $114.11
$117.78 $ 78.84
Financial and Investor Relations
Copies of Kirby’s Form 10-K (which is
incorporated in this Annual Report) are
available free of charge. Either contact
Mary E. Tucker, Assistant Controller,
at Kirby’s corporate headquarters, e-mail
Mary.Tucker@kirbycorp.com, or visit
Kirby’s web site at www.kirbycorp.com.
Comparison of 5 Year Cumulative Total Return
Return on $100 invested on December 31, 2010, in stock or index, including reinvestment of dividends.
Fiscal year ended December 31.
$300
$200
$100
0
12/10
12/11
12/12
12/13
12/14
12/15
Kirby Corporation
100.00 149.47 140.50 225.31
183.29 119.46
Russell 2000
100.00
95.82 111.49 154.78
162.35 155.18
Dow Jones
US Marine
Transportation
100.00 104.32 114.97 171.06
135.74
88.46
10
11
12
13
14
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(cid:81) Kirby Corporation (cid:81)(cid:3)Russell 2000 (cid:81)(cid:3)Dow Jones US Marine Transportation
Kirby Corporation
Corporate Headquarters:
55 Waugh Drive, Suite 1000
Houston, Texas 77007
Mailing Address:
P. O. Box 1745
Houston, Texas 77251-1745
(713) 435-1000
Fax: (713) 435-1010
www.kirbycorp.com
The M/V Nancy Peterkin, Kirby Offshore
Marine’s new 10000 horsepower tugboat.
The M/V Nancy Peterkin is named after
the wife of George A. Peterkin, Jr., who
served as Kirby Corporation’s President
and Director from 1973 to 1995, Chairman
of the Board of Directors from 1995 to
1999 and Chairman Emeritus of the Board
of Directors from 1999 to 2014.