2016 Annual Report
Kirby Corporation
Kirby Corporation
Financial Highlights
(In thousands, except per share amounts)
Revenues:
Marine transportation
Diesel engine services
For the years ended December 31,
2016
2015
2014
2013
2012
$ 1,471,893 $ 1,663,090 $ 1,770,684 $ 1,713,167 $ 1,408,893
298,780
484,442
795,634
529,028
703,765
$ 1,770,673 $ 2,147,532 $ 2,566,318 $ 2,242,195 $ 2,112,658
Net earnings attributable to Kirby
$ 141,406 $ 226,684 $ 282,006 $ 253,061 $ 209,438
Net earnings per share attributable to Kirby
common stockholders (diluted)
$ 2.62 $ 4.11 $ 4.93 $ 4.44 $ 3.73
EBITDA–Earnings before interest, taxes,
depreciation and amortization:*
Net earnings attributable to Kirby
$ 141,406 $ 226,684 $ 282,006 $ 253,061 $ 209,438
Interest expense
Provision for taxes on income
Depreciation and amortization
17,690
18,738
84,942
133,742
200,917
192,240
21,461
169,782
169,312
27,872
24,385
152,379
127,907
164,437
145,147
EBITDA*
$ 444,955 $ 571,404 $ 642,561 $ 597,749 $ 506,877
Property and equipment, net
$ 2,921,374 $ 2,778,980 $ 2,589,498 $ 2,370,803 $ 2,315,165
Total assets
$ 4,303,499 $ 4,152,281 $ 4,137,614 $ 3,675,860 $ 3,645,060
Long-term debt, including current portion
$ 722,802 $ 774,849 $ 712,405 $ 742,493 $ 1,127,042
Total equity
$ 2,412,867 $ 2,279,196 $ 2,264,913 $ 2,022,153 $ 1,707,054
Revenues
(In millions)
Earnings Per Share
EBITDA*
(In millions)
$2,566
$2,242
$2,113
$2,148
$3.73
$1,771
$4.93
$4.44
$643
$598
$571
$4.11
$507
$445
$2.62
2012
2013
2014
2015
2016
2012
2013
2014
2015
2016
2012
2013
2014
2015
2016
On the Cover: The M/V Pass Christian, a Kirby
Inland Marine 1800 horsepower inland towboat,
transits the Houston Ship Channel with two
loaded 30,000 barrel tank barges. The M/V Pass
Christian is named after the town Pass Christian,
Mississippi.
* 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).
To Our Shareholders
2016 Annual Report
Our businesses were challenged in 2016; however, the year provided
Kirby ample opportunities to build a solid foundation for better
times. We enter 2017 in a strong financial position, with the lowest
debt-to-capitalization ratio that we’ve had in over two years due to our
robust free cash flow generation, in spite of continued market challenges.
Our inland marine transportation fleet is in great condition with one of
the lowest average fleet ages in our company’s history. The inland tank
barge market is poised for recovery, likely sometime in 2017, as we will
benefit from new petrochemical volume likely to come on stream late in
the year and continue for several more years beyond that. Our coastal
market appears to be near the front end of a difficult cycle, but we continue
to invest in the fleet with a build plan for new tugboats over the next two
years that will modernize the coastal fleet and provide significant value to
our customers. In our diesel engine services markets, numerous indicators
suggest we are in the early innings of a cyclical upturn for the energy sector
that will benefit our land-based business. It is essential that we look back
on 2016 and extract important lessons from a tough year, but also not lose
sight of how we exited the year, with exciting opportunities that are now
closer at hand.
Joe Pyne
Chairman of the Board
David Grzebinski
President and Chief Executive Officer
Our 2016 financial results reflected $1.8 billion in revenues, net earnings
of $141 million, earnings per share of $2.62 and EBITDA of $445 million.
While these results were down from 2015, our free cash flow for 2016 was
much more resilient, declining only modestly from 2015. Our 2016 free
cash flow excluding acquisitions, but after investing $231 million in new
equipment and fleet and facility improvements, was $183 million. We expect capital investments made in 2016, a year that saw
many of our businesses exposed to challenging industry dynamics, will garner high returns in better markets and contribute
significantly to our long-term earnings potential.
We faced a number of market challenges in 2016, driven by changes in industry dynamics. We responded to this tough
environment by streamlining our cost structure, strategically deploying capital for long-term benefit and reinvigorating our
commitment to safety and customer service. While many of the changes we made were unheralded and won’t be evident in
our financial performance until we see some market improvement, that doesn’t mean they weren’t significant. Some of these
efforts are worth highlighting:
• Streamlining our cost structure. During 2016, our marine transportation revenue was impacted by lower pricing, but we
maintained a steady gross margin from the prior year by aggressively managing our costs. Through efforts across the
organization, we significantly reduced the cost of horsepower, boat and barge supplies, vessel maintenance and facility
leases. We also streamlined back office functions in traffic, sales and accounting, and captured additional cost savings
through competitive bidding, supplier consolidation and transaction cost reductions.
• Strategically deploying capital for long-term benefit. Our acquisitions in 2016 included 27 inland tank barges, 14 inland
towboats, four coastal tugboats and one coastal tank barge. The acquisitions helped offset the retirement of older vessels
in our fleet and expanded our reach with well-regarded, globally recognized customers. We also acquired Valley Power
Systems’ EMD franchise in the fourth quarter of 2016, which expands our engine distribution network along the West
Coast with one of our most highly valued supplier relationships, a relationship that stretches back over 50 years.
• Reinvigorating our commitment to customer service and safety. Our franchise value, our customer relationships and
our industry reputation rest wholly on our ability to deliver on an unwavering commitment to safe operations and good
customer service. Over the course of 2016, we tested our initial rollout of Atlas, a Kirby-developed, state-of-the-art,
satellite-linked billing and logistics system, on a test group of offshore tugboats. The capabilities of Atlas, we believe,
are unparalleled in the tank barge industry, and we expect to begin our fleet-wide deployment of the system in 2017.
Kirby’s history of dedication and prioritization of safety over all other concerns has never wavered, but there are always
opportunities to improve. Amongst numerous other efforts to go a step further in our focus on safety and to enhance
customer service, we commenced a comprehensive review of operational procedures, developed new assessment
and reporting teams, augmented our communication of priorities throughout the organization, consolidated reporting
structures and added new training programs. Our focus on safety during the year was reflected in the achievement of
Kirby’s lowest lost time injury rate in company history.
1
To Our Shareholders
In a difficult year, the dedication of our employees allowed us to achieve much, but many of our markets were under significant
industry-wide pressure. In our marine transportation markets, industry overcapacity that first manifested itself in 2015, from
the decline in crude oil and natural gas condensate volumes carried by tank barge, continued into 2016 and, by mid-year, led
to lower utilization levels and steep price declines in the inland tank barge markets. As tank barges were cleaned out of crude
service to compete in the refined petroleum products, black oil and petrochemical transportation markets, the industry was
forced to contend with an oversupply of available capacity. The trend of increasingly available supply from tank barges removed
from crude service appeared to abate by the middle of 2016. However, for the market to improve, industry supply must contract
and/or demand must improve. The age profile of both the inland and coastal tank barge markets, as well as the economics
associated with regulatory shipyard cycles, compels an acceleration of tank barge retirements in cyclical downturns and a
slowdown in the building of new equipment. This time is no different. We believe approximately 100 inland tank barges were
retired and 100 were built in 2016. New construction is down roughly 60% from the prior year with approximately 40 inland tank
barges ordered in 2016 for delivery in 2017. In the coastal market, we do not believe any new orders for coastal tank barges were
executed with shipyards after the middle of 2016 and that carriers began planning for further vessel retirements in 2017.
In our inland transportation markets, demand across the various products we carry varied through the year, which contributed
to added volatility. Petrochemical demand remained at stable or increasing levels. Some of this growth was associated with
new Gulf Coast petrochemical plants that came on-line during the year. Refined petroleum products demand was stable early
in the year, but declined significantly in early summer. A combination of factors likely contributed to the decline, but we believe
it was largely associated with unprecedented inventory levels across the nation’s storage facilities that led to an inventory
drawdown during the summer. Key macro indicators of U.S. refined petroleum product demand were constructive throughout
the year, including record levels of vehicle miles traveled, high refinery utilization levels and increasing U.S. refinery capacity.
Our black oil market, including products such as asphalt, heavy fuel oil and vacuum gas oil, was volatile during the year, as
refiners and traders responded to volatility in commodity prices. The crude and natural gas condensate markets suffered from
weak demand throughout the year, although we did experience a small pickup in natural gas condensate volume out of the
Utica shale basin in the fourth quarter.
Inland tank barge utilization reflected changing demand patterns during the year. Utilization was at the 90% level as we entered
the year and bottomed in the low 80% range in July, before gradually increasing and finishing the year in the high 80% range.
Term contract pricing for the inland fleet was down in the 5% to 9% range year over year, and spot pricing was below term
contract pricing. While market fundamentals weighed on our financial results, Kirby’s inland operating model proved resilient.
Our ability to manage costs and quickly align the towboat fleet with current tank barge demand, an operating model that has
served us well over the course of numerous industry cycles, helped to mitigate the financial impact of lower utilization.
In our coastal fleet, utilization declined steadily throughout the year. Demand in our petrochemical; black oil, excluding crude
and natural gas condensate; and refined petroleum products markets was generally stable. However, demand in the crude oil
and natural gas condensate markets was depressed, and we faced intense competition for product transportation in our other
markets from vessels that had been cleaned out of crude and condensate service. As a result, customers elected to allow term
contracts to expire, which put more equipment into the spot market. As coastal equipment moved off contract and traded in
the spot market, utilization fell and unreimbursed transit costs increased, a result of equipment being re-positioned to take
advantage of available spot moves. Additionally, spot contract pricing in the coastal market declined throughout the year. The
impact of these trends is likely to persist into 2017; however, the lower pricing and utilization across the coastal market are
influencing operators’ decisions to retire older vessels and have led to a halt in new construction orders. As a result of weak
utilization and a customer preference for younger vessels, as well as safety, reliability, cost and new regulatory requirements
for ballast water treatment systems, the influences to retire older vessels during regulatory shipyard periods is extremely
compelling. We expect supply in this market to rationalize during 2017 and 2018, which will gradually lead to better supply-
demand balance.
In 2016, the United States underwent one of the most severe energy sector downturns in our nation’s history, with oil prices
per barrel reaching lows in the $20’s before recovering and stabilizing in the mid-$50 range in the middle of the year. This
had a significant impact on our land-based diesel engine services market. Drilling activity, as reflected in the rig count, fell
precipitously, as did well completion activity, the driver of our land-based diesel engine service customers’ performance.
As a result, our oil service customers significantly cut their 2016 capital spending levels. Manufacturing of oilfield service
equipment, including pressure pumping units, was negligible during the year. In addition, service of land-based diesel
engines, transmissions and pumps, and the sale of parts also declined. Counter to these trends were market realities in the
oilfield service space that are very positive for our business. Service intensity in the oilfield services market grew during the
year, with significant increases in average lateral lengths, stages per well and sand consumption per well. Increased service
intensity drives a shorter repair cycle for oilfield service equipment. Additionally, in order to keep pressure pumping equipment
in the field operating, completion providers retired older equipment and cannibalized both new and used equipment for
usable parts. This dynamic of heightened service intensity, coupled with the cannibalization of pressure pumping equipment,
2
Kirby Corporation
2016 Annual Report
caused the nation’s pressure pumping equipment to fall into a significant state of disrepair. With the modest recovery in the
rig count in the second half of 2016, completion activity improved slightly, and demand from our land-based diesel engine
customers began to increase. We ended 2016 with the highest level of pressure pumping equipment on the premises awaiting
remanufacturing in our history.
Our marine diesel engine services market experienced weakness throughout 2016 from its Gulf of Mexico oilfield service
customers. In addition, customers deferred major maintenance projects in many of our geographic markets largely due to
the weak barge market, including service demand for towboats serving in the dry cargo industry, and, to a lesser extent, the
general economy. The power generation market experienced steady demand for engine-generator set upgrade projects and
parts sales for both domestic and international customers.
During 2016, we continued to reinvest in our marine inland and coastal fleets, spending $231 million on capital expenditures.
We spent $11 million on the construction of inland tank barges and towboats, $106 million for progress payments on the
construction of coastal tank barges and tugboats, and $114 million primarily for upgrades to our existing inland and coastal
fleets. Included in this amount were final payments for three new coastal articulated tug-barge units (ATBs), including two
185,000 barrel ATBs and a single 155,000 barrel ATB, as well as a 35,000 barrel coastal petrochemical tank barge.
Over the course of 2016, we took delivery of five new inland tank barges. We also acquired 27 inland tank barges from
a competitor. Net of inland tank barge retirements, we reduced our inland tank barge capacity during the year by a
small amount.
Our continued strong cash flow allowed us to maintain our balance sheet strength and our investment grade ratings of BBB+
by Standard & Poor’s and Baa2 by Moody’s. Our debt at year-end was $723 million versus $775 million at December 31,
2015, and consisted of $500 million of unsecured senior notes, $150 million due in 2020 and $350 million due in 2023, and
$223 million outstanding under our $550 million unsecured revolving credit facility. Our debt-to-capitalization ratio at year-end
was 23.1% compared with 25.4% at December 31, 2015.
On a more somber note, it is with deep regret that we report the death of George A. Peterkin, Jr., on November 10, 2016,
at the age of 89. George served as a Kirby director from 1969 to 2014, Kirby’s President from 1973 to 1995, Chairman of the
Board from 1995 to 1999 and Chairman Emeritus from 1999 to 2014. During George’s 45-year tenure as a Kirby director, its
President, Chairman and Chairman Emeritus, he contributed significantly to the transition of Kirby from primarily an oil and
gas exploration company with a small barge line to the United States’ largest tank barge operator and diesel engine services
provider. George’s leadership, friendship and wise counsel will be remembered with gratitude.
As we look out to 2017, a number of factors should begin to lead to a better business environment and work in our favor. The
inland tank barge market, after two years of persistent pricing declines, is starting to show some signs of stabilization and an
improved supply-demand balance, which we think will lead to improving pricing at some point during the year. An improving
inland tank barge market would be a welcome change and would help counterbalance some of the challenges we will face
from a coastal tank barge market that is likely to remain challenged throughout the year. In our diesel engine services market,
an improving energy market will have widespread positive impacts on our business, and is likely to be an especially strong
tailwind for our land-based diesel engine services market. From a more general economic perspective, we are optimistic
about a potentially more pro-business political environment. We are eagerly awaiting consideration of tax reform, increased
infrastructure spending and a pro-growth regulatory environment. While it is still too early to know what legislation will
ultimately be enacted, some of the proposals under discussion would boost our profitability through lower taxes, incentivize
our customers to build and expand facilities, and likely lead to a better overall business climate.
In challenging times we are tested the most. Kirby has benefited from employees who rise to the challenge of difficult times.
In 2016, our employees, engaging with our customers who rank amongst the most highly regarded companies in the world,
admirably contended with a volatile commodity and market environment while working to keep our operations safe and
successful. To our employees and our Board of Directors, we extend our warmest thanks for your hard work and wise counsel
this past year. To our shareholders, we thank you for your support and look forward to a bright future.
Respectfully submitted,
Joseph H. Pyne
Chairman of the Board
Houston, Texas, March 8, 2017
Houston, Texas, March 8, 2017
David W. Grzebinski
President and Chief Executive Officer
3
Kirby Corporation
Marine Transportation
The United States possesses 12,500 miles of coastline providing numerous ports and harbors,
complemented by the inland waterway system consisting of 12,000 miles of commercially navigable
inland interconnected rivers, canals and intracoastal waterways that serve as “water highways.”
The United States coastline and inland waterway system are one of the most vibrant and efficient
transportation systems in the world, linking the nation’s heartland and coastal states to each other and
to the world. The majority of the United States refineries and petrochemical plants are located in ports
and harbors along these coastlines and along the navigable inland waterways. These water highways play
a vital role in the regional distribution of petrochemicals, refined petroleum products, black oil, including
crude oil and natural gas condensate, agricultural chemicals and dry-bulk products.
Marine transportation is the most energy-efficient means of transporting bulk commodities compared
with railroads and trucks. A lower Mississippi River liquid products tow of 15 tank barges has the carrying
capacity of approximately 216 railroad tank cars plus six locomotives, or approximately 1,050 tractor-
trailer tank trucks. Marine transportation is safer than other modes of transportation, generally involving
less urban exposure and operating on a system with few crossing junctures and in areas relatively remote
from population centers.
The inland marine transportation markets are served by wholly owned subsidiary Kirby Inland Marine,
the United States’ largest inland tank barge operator, transporting 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.
The coastal marine transportation markets are served by wholly owned subsidiary Kirby Offshore Marine,
the United States’ largest coastal tank barge operator in the 195,000 barrel or less category, transporting
refined petroleum products, black oil and petrochemicals by coastal tank barges along all three United
States coasts and in Alaska and Hawaii, as well as dry-bulk products along the Gulf Coast and East Coast.
The M/V Niceville, a Kirby Inland Marine 1800 horsepower inland towboat, departs Ole River Fleeting
adjacent to the Houston Ship Channel with a loaded 30,000 barrel tank barge.
4
2016 Annual Report
Results of Operations for 2016
Operating income of $257 million on revenues of $1.5 billion
compared with operating income of $375 million on revenues
of $1.7 billion for 2015.
Operating margin of 17.5% compared with 22.5% for 2015.
Coastal marine transportation utilization also declined
throughout 2016, from the high 80% to low 90% range in
the 2016 first quarter to the low 80% level in the fourth
quarter, compared to the 90% to 95% range throughout the
majority of 2015.
Inland operations were 67% of revenues and offshore
operations 33%.
Petrochemicals represented 49% of transportation revenues,
black oil 25%, refined petroleum products 23% and
agricultural chemicals 3%.
Inland marine transportation markets reflected stable
demand for the movement of petrochemicals and
agricultural chemicals. Refined petroleum products
demand increased as a result of the SEACOR Holdings Inc.
acquisition in April 2016. Black oil demand was weak
throughout the year.
Reduced crude oil and natural gas condensate volumes to
be moved by tank barge due to additional pipeline and
industry-wide tank barge construction during 2013 through
2016, many of which were tank barges for crude oil and
natural gas condensate movements, resulted in excess
industry-wide tank barge capacity, lower utilization and
corresponding lower term contract renewals and spot
contract pricing in both the inland and coastal markets.
Inland marine transportation utilization declined to the high
80% level at the end of 2016, occasionally declining to the
low to mid-80% range during the year, from the 90% to 95%
range at the beginning of 2016 and throughout 2015.
Coastal marine transportation markets reflected stable
demand for the movement of black oil, petrochemicals
and dry products. Demand for the transportation of refined
petroleum products declined, primarily as a result of
weak heating oil and gasoline demand in the Northeast.
As demand for the coastal transportation of crude oil
and natural gas condensate declined, increased industry-
wide coastal capacity resulted in some reluctance among
certain customers to extend term contracts, which led to
an increase in the number of coastal vessels operating
in the spot market, leading to increased idle time and
voyage costs.
5
Marine Transportation
Kirby Inland Marine
Kirby Inland Marine is the leading United States transporter of bulk
liquid cargoes by inland tank barge, offering distribution services
throughout the Mississippi River System, the Gulf Intracoastal
Waterway and the Houston Ship Channel. The nation’s inland tank
barge fleet is composed of approximately 3,850 barges, owned and
operated by approximately 45 operators, a diverse and independent
mixture of large integrated transportation companies and small
operators, as well as captive fleets owned by United States refining
and petrochemical companies. Kirby Inland Marine transports
petrochemicals, black oil, including crude oil and natural gas
condensate, refined petroleum products and agricultural chemicals for
a customer base consisting of the United States’ largest petrochemical
and refining companies. During 2016, Kirby Inland Marine moved over
45 million tons of liquid cargo on the United States inland waterway
system. Kirby Inland Marine provides a critical link in customers’
supply chain, transporting and transferring bulk liquid products that
keep plants and refineries operating efficiently.
Inland Tank Barge Fleet
Petrochemicals/Refined products
Black oil
Pressure
Anhydrous ammonia
Specialty
687
120
54
10
5
Total
Total Barrel Capacity
876
17.9 MM
Inland Towboat Fleet
800–1300 HP
1400–1900 HP
2000–2400 HP
2500–3200 HP
3300–4800 HP
5000 HP and greater
Spot charters
Total
71
72
56
18
10
1
2
230
The M/V City of Redwood, a Kirby Inland Marine
3800 horsepower inland towboat, pushes
nine loaded inland tank barges on the Ohio River.
The M/V City of Redwood works in Kirby’s
linehaul service. Loaded tank barges are staged
in the Baton Rouge area from Gulf Coast
refineries and petrochemical plants, and are
transported from Baton Rouge to waterfront
terminals and plants on the Mississippi, Illinois
and Ohio Rivers on regularly scheduled linehaul
tows. Tank barges are dropped off and picked
up going up and down the rivers.
6
Kirby Corporation
2016 Annual Report
K irby’s significant presence on the
Mississippi River System, the
Gulf Intracoastal Waterway and the
Houston Ship Channel gives Kirby the
ability to service its customers’ needs
throughout the inland waterway
system. Kirby transports raw material
feedstocks to petrochemical plants,
petrochemical products from one
plant to another plant for further
processing, and more finished
products to manufacturing companies
and to waterfront terminals for both
domestic and foreign destinations.
Kirby transports finished gasoline
blends and additives, aviation fuel,
heating oil, diesel fuel and ethanol
from refineries to waterfront terminals
for both domestic and foreign
destinations. Black oil, including crude
oil and natural gas condensate, is
transported to waterfront terminals
and residual fuel to utilities.
Agricultural chemicals are transported
primarily to waterfront terminals in
the Midwest and South Texas.
Kirby’s inland fleet consists of
876 tank barges, comprising
17.9 million barrels of cargo capacity
and representing approximately 23%
of the total number of industry inland
tank barges. At the end of 2016, the
average age of Kirby‘s inland tank
barge fleet was 14.9 years, a
significant reduction from 23.9 years
in 2008 (see table). Kirby operated
230 towboats at the end of 2016,
crewed by highly trained vessel
personnel and supported by
experienced shoreside staff and
state-of-the-art communication and
training systems and facilities.
Acquisition
In April 2016, Kirby acquired the inland
tank barge fleet of SEACOR Holdings
Inc., which consisted of 27 inland
30,000 barrel tank barges and 14 inland
towboats. The average age of the
27 tank barges was ten years.
Products Transported and
Demand Drivers
Petrochemicals: Products transported
include benzene, styrene, methanol,
acrylonitrile, xylene, caustic soda,
naphtha, butadiene, propylene,
butane and propane. Drivers are
the manufacture of consumer
nondurable goods (70%) and
consumer durable goods (30%).
Black Oil: Products transported
include residual fuel, fuel oils,
vacuum gas oil, asphalt, carbon
black feedstock, crude oil, natural
gas condensate and ship bunkers.
Drivers are fuel for power plants
and ships, feedstock for refineries,
certain durable goods and road
construction.
Refined Petroleum Products:
Products transported include
finished gasoline, gasoline
blendstock, aviation fuel, heating
oil, diesel fuel and ethanol. Drivers
are vehicle usage, air travel, weather
conditions and refinery utilization.
Agricultural Chemicals: Products
transported include anhydrous
ammonia, nitrogen-based liquid
fertilizer and industrial ammonia.
Drivers are corn, cotton and
wheat production, and chemical
feedstock usage.
Inland Tank Barge Fleet
Average Age by Year
Year
Barges
Barrel
Capacity
Average
Age
2016
2015
2014
2013
2012
2011
2010
2009
2008
876
898
884
861
841
819
825
863
914
17.9
17.9
17.8
17.3
16.7
16.2
15.9
16.7
17.5
14.9
15.2
15.3
16.2
17.7
18.9
20.3
22.2
23.9
7
Marine Transportation
Kirby Offshore Marine
Kirby Offshore Marine is an integral part of the United States coastal tank barge industry, composed of
approximately 15 large integrated marine transportation companies and small operators. The nation’s
coastal tank barge fleet in the 195,000 barrel or less category consists of approximately 295 barges. The
industry distributes refined petroleum products from regional refineries, storage facilities and pipeline
terminals to regional distribution terminals along the East, Gulf and West Coasts and in Alaska and Hawaii.
Black oil, including crude oil and natural gas condensate, is distributed regionally from terminals to coastal
refineries and other terminals, and residual fuel to utilities on the East, Gulf and West Coasts. More finished
petrochemicals are primarily distributed from Gulf Coast petrochemical plants to manufacturing customers
along the Gulf and East Coasts.
Kirby’s coastal fleet consists
of 69 coastal tank barges,
comprising 6.2 million barrels of
cargo capacity and representing
approximately 23% of the total
number of industry coastal tank
barges in the 195,000 barrels or less
category, and 75 tugboats. Kirby’s
coastal tank barge fleet has the
flexibility to access ports inaccessible
to larger vessels, while still delivering
large volumes of product.
Kirby Offshore Marine has a large
array of tank barge capabilities and
capacities, as well as a broad
geographic presence with its Atlantic
and Pacific fleets, providing a single
source of transportation services to
its petrochemical, black oil and
refining customers’ supply chain.
The Atlantic fleet operates along
the eastern seaboard of the United
States and along the Gulf Coast,
basically from Texas to Maine. The
Pacific fleet operates along the Pacific
Coast from Southern California to
Washington State, throughout Alaska,
and from California to Hawaii and the
Hawaiian Islands.
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 waterfront terminals in
Louisiana across the Gulf of Mexico to
a Florida power generation facility.
8
Kirby Corporation
2016 Annual Report
Coastal Tank Barge Fleet
Refined products/petrochemicals
Black oil
Total
48
21
69
Total Barrel Capacity
6.2 MM
Coastal Tugboat Fleet
1000–1900 HP
2000–2900 HP
3000–3900 HP
4000–4900 HP
5000–6900 HP
Greater than 7000 HP
Total
8
6
17
19
13
12
75
Offshore Dry-Bulk Cargo Fleet
Dry-bulk barge and tugboat units
Deadweight tonnage
6
111,000
Products Transported and
Demand Drivers
Refined Petroleum Products:
Products transported include
finished gasoline, gasoline
blendstock, aviation fuel, heating oil,
diesel fuel and ethanol. Drivers are
vehicle usage, air travel, weather
conditions and refinery utilization.
Black Oil: Products transported
include residual fuel, fuel oils,
vacuum gas oil, asphalt, carbon
black feedstock, crude oil, natural
gas condensate and ship bunkers.
Drivers are fuel for power plants
and ships, feedstock for refineries,
certain durable goods and road
construction.
Petrochemicals: Products
transported include cumene,
phenol, acetone, cyclohexane,
caustic soda and naphtha. Drivers
are the manufacture of consumer
nondurable goods (70%) and
consumer durable goods (30%).
Dry Products: Products transported
include raw sugar, coal, limestone
rock and fertilizer. Drivers are sugar,
cotton and wheat production,
the coal mining industry and the
construction industry.
New Construction
The first of two new coastal
185,000 barrel articulated tank barge
and 10000 horsepower tugboat
units (ATBs) was placed in service
in late 2015 and the second ATB
in June 2016. The first of two new
155,000 barrel and 6000 horsepower
ATBs was placed in service in
December 2016, and the second is
scheduled for the summer of 2017.
A new 35,000 barrel coastal tank
barge for the petrochemical trade was
placed in service in December 2016.
Kirby is also building coastal tugboats:
two 4900 horsepower tugboats are
anticipated to be placed in service in
2017 and six 5000 horsepower ATB
tugboats are scheduled to be placed
in service in 2017 and 2018. The eight
coastal tugboats are replacements for
older coastal tugboats to be removed
from service.
The Kirby 155-01, a Kirby Offshore Marine
155,000 barrel coastal tank barge, with the
M/V Heath Wood, a 6000 horsepower
tugboat, prior to their maiden voyage in
late 2016. This is the first of two new
155,000 barrel coastal articulated tank
barge and tugboat units, with the second
unit anticipated to be placed in service in
the summer of 2017.
9
Kirby Corporation
Diesel Engine Services
Within the diesel engine industry, engines are categorized by their rotational speeds into three
groups: high-speed engines (over 1,000 RPM), medium-speed engines (300–1,000 RPM) and slow-
speed engines (under 300 RPM). Kirby Corporation’s diesel engine services operations focus on high-
speed and medium-speed diesel engines and ancillary products. Medium-speed diesel engines provide
the main propulsion for large marine vessels and provide emergency standby, peak and base load
power generation. High-speed diesel engines provide the main propulsion for marine towboats, power
generation on marine vessels, tank barge pumps, engines on all types of oilfield service equipment
and commercial trucks.
The high-speed diesel engine population in the United States is considerably larger than the medium-
speed population, as approximately 75% of the commercial vessels operating in the United States
have high-speed propulsion engines. The best example of the use of medium-speed and high-speed
diesel engines is Kirby’s marine transportation fleet. Kirby operates approximately 230 medium-speed
propulsion engines on its larger Mississippi River towboats, and coastal and offshore tugboats. Kirby
operates over 2,100 high-speed diesel engines used as propulsion engines on its smaller towboats
and as power supply for electrical generators and pumps on all of its boats and tank barges.
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.
A Marine Systems, Inc. technician is installing an air cleaner on a Cummings K38 diesel engine.
Principal diesel engines serviced are EMD, Caterpillar, Cummings, MTU Detroit Diesel and John Deere.
10
2016 Annual Report
Results of Operations for 2016
Operating income of $3.2 million on revenues of
$299 million compared with operating income of
$18.9 million on revenues of $484 million for 2015.
Operating margin of 1.1% compared with 3.9% for 2015.
Land-based operations represented 48% of diesel engine
services revenues, marine 36% and power generation 16%.
The marine diesel engine services market remained at
depressed levels during 2016, primarily due to continued
weakness in the Gulf of Mexico oilfield services market. In
addition, customers continued to defer major maintenance
projects in many regions of the marine diesel engine
services market largely due to the weaker marine market
and, to a lesser extent, the general economy. The power
generation market was stable, benefiting from major
generator set upgrades and parts sales for both domestic
and international power generation customers.
The land-based market challenges continued during 2016,
primarily due to the lack of demand for the manufacture of
pressure pumping units and other oilfield service
equipment, and for the sale and distribution of engines,
transmissions and parts due to the impact from the low
price of crude oil during 2015 and the first half of 2016 with
a resulting decline in drilling in North American shale
formations. During the second half of 2016, with the
increase in the price of crude oil and resulting increase in
drilling activity in the shale formations, the land-based
market saw an increase in activity for the remanufacturing
and servicing of pressure pumping units.
11
Diesel Engines Services
Kirby Engine Systems
Kirby Engine Systems, through two wholly owned operating subsidiaries, Marine Systems, Inc. and
Engine Systems, Inc., is a nationwide marine and power generation diesel engine service remanufacturer
and OEM replacement parts provider for medium-speed and high-speed diesel engines. Kirby Engine
Systems sells new engines and services ancillary products, including reduction gears, transmissions,
starters, governors, marine clutches, safety related products and heat exchangers/separators. Through
long-standing customer relationships and key distributorships, dealerships and contract service center
relationships, Kirby Engine Systems provides an essential service to support the day-to-day operations
of its marine and power generation domestic and international customers, providing them with one
source of support and service for all of their requirements.
12
Kirby Corporation
2016 Annual Report
Based in Houma, Louisiana, Kirby
Engine Systems provides factory-
trained and authorized project
engineers, mechanics and machinists
through 12 strategically located
service and parts facilities along
the Gulf Coast, East Coast and West
Coast, and in the Midwest. In-field
service is provided throughout
the United States as well as at
destinations worldwide. During 2016,
project engineers and mechanics
serviced marine vessels, and power
generation and nuclear facilities
in numerous foreign countries,
including Slovenia, Spain and Taiwan.
Principal medium-speed diesel
engines serviced are manufactured
by EMD Power Products (EMD), with
which Kirby Engine Systems has a
51-year relationship, serving as both
an EMD distributor and a contract
service center for select markets
and locations, providing service and
parts. Kirby Engine Systems serves
as an EMD authorized distributor
for 17 eastern states and nine
western states for marine and power
generation applications, and as the
exclusive worldwide distributor of
EMD products to the nuclear industry.
Principal high-speed diesel engines
serviced are manufactured by
Caterpillar, Cummins, MTU Detroit
Diesel and John Deere. Kirby Engine
Systems currently serves as a
factory-authorized marine dealer
or has a dealership in certain states
for these high-speed diesel engine
manufacturers. Kirby Engine Systems
also has dealerships with reduction
gear manufacturers.
Acquisition
In October 2016, Marine Systems
purchased certain assets of Valley
Power Systems, Inc. and Valley
Power Systems Northwest, Inc. The
assets purchased are mainly related
to the EMD diesel engine supply
and service business and includes
an EMD distributor agreement to
sell EMD diesel engines in nine
western states.
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
commercial fishing vessels,
Great Lakes ore vessels, dredging
vessels, coastal ferries and United
States government vessels. Market
drivers are the activity levels of the
industries served and the 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.
A Marine Systems, Inc. technician is
installing a cylinder head on a Caterpillar
3500 series diesel engine, providing an
essential service to support the day-to-day
operations of its marine customers,
providing them with one source of support
and service for all of their requirements.
Manufacturer Relationships
Medium-Speed Diesel Engines
EMD Power Products
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)
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
13
Diesel Engines Services
United Holdings
United Holdings is engaged in the distribution and service of high-speed diesel engines, pumps and
transmissions, and the manufacture and remanufacture of oilfield service equipment. United sells OEM
parts and services diesel engines and transmissions for on- and off-highway use and provides in-house
and in-field service capabilities. United offers a full line of custom fabricated oilfield service equipment,
including pressure pumping units, fully tested and field ready. United has long-standing customer
relationships with large and mid-cap oilfield service providers, oil and gas operators and producers,
construction companies and public utilities.
U nited provides factory-trained
and authorized mechanics to
overhaul, service and repair high-
speed diesel engines, transmissions
and pumps. Based in Oklahoma City,
Oklahoma, United has 13 locations
across four states in key oil and
gas producing regions and major
transportation corridors. Oilfield
service equipment is transported
by tractor-trailer truck. Most major
North American shale oil and natural
gas producing regions are within a
one-day drive of United’s principal
Oklahoma manufacturing and
remanufacturing facility.
United is the largest off-highway
distributor for Allison transmissions,
a major distributor for MTU diesel
engines in North America, a distributor
for Isuzu diesel engines, and the
exclusive distributor of Daimler Trucks
for engines and related equipment in
Oklahoma, Arkansas and Louisiana.
During 2015 and the majority of
2016, with low crude oil pricing
and the resulting decline in North
American oil and gas drilling activity
in shale formations, the demand
for United’s service, distribution
and manufacturing capabilities has
remained depressed.
14
Kirby Corporation
2016 Annual Report
In early 2015, an estimated
19.5 million horsepower of pressure
pumping units was working in North
America. By late 2016, the working
horsepower in North America had
declined to an estimated 9.0 million,
with an estimated 4.5 million of the
19.5 million horsepower scrapped,
an estimated 2.0 million horsepower
available for work and an estimated
4.0 million horsepower stacked, the
large majority of which would require
major service before being placed
back in service.
During 2016, inbound orders
for the manufacture of pressure
pumping units and other oilfield
service equipment were essentially
nonexistent. However, during the
third and fourth quarters of 2016, with
the increase in the price of crude oil,
United saw an increase in activity for
the remanufacturing and servicing
of pressure pumping units, but the
distribution portion of the market,
including engine, transmission
and OEM parts sales and service,
remained at weak levels.
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,
transmissions, 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.
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
Cotulla, TX
Corpus Christi, TX
Houston, TX
Laredo, TX
Odessa, TX
Pharr, TX
San Antonio, TX
United Holdings technicians work on
a new pressure pumping unit with a
proprietary sound abatement enclosure
at its Oklahoma City, Oklahoma, facility.
United Holdings manufactures and
remanufactures a wide variety of oilfield
service equipment, including pressure
pumping units, hydration units, blenders,
cementers, mud pumps and nitrogen units.
15
Kirby Corporation
Board of Directors
C. Sean Day 2, 3
Chairman of Teekay Corporation
Director since 1996
David W. Grzebinski
President and Chief Executive Officer
of Kirby
Director since 2014
Monte J. Miller 2, 3
Retired Executive Vice President,
Chemicals, of Flint Hills Resources, LP
Director since 2006
Joseph H. Pyne
Chairman of the Board of Kirby
Director since 1988
Richard R. Stewart 1
Retired President and CEO of
GE Aero Energy
Director since 2008
William M. Waterman 3
Retired President and CEO of
Penn Maritime Inc.
Director since 2012
1 Audit Committee
2 Compensation Committee
3 Governance Committee
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
CEO of EnLink Midstream GP, LLC and
EnLink Midstream Manager, LLC
Director since 2015
Officers
Kirby Corporation
Marine Transportation Group
Diesel Engine Services Group
Joseph H. Reniers
Executive Vice President—
Diesel Engine Services and
Supply Chain
Mia C. Cradeur
Vice President and Controller
United Holdings LLC
Sterling V. Adlakha
Chief Financial Officer
Ronnie E. Stover
Vice President—Sales
United Engines
David L. Tonne
Vice President—Aftermarket
UE Manufacturing
Gregory L. Culp
Vice President—
Engineered Products
Thermo King
of Houston
Jason K. Robison
Vice President
Kirby Engine
Systems, Inc.
Dorman Lynn Strahan
President
Engine Systems, Inc.
P. Scott Mangan
Vice President—East Coast
Marine Systems, Inc.
Lynn A. Ahlemeyer
Vice President—Gulf Coast
and West Coast
Thomas W. Bottoms
Vice President—Midwest
Troy A. Bourgeois
Vice President—Sales
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
Executive Vice President—
Diesel Engine Services and
Supply Chain
Kim B. Clarke
Vice President—
Human Resources
Ronald A. Dragg
Vice President and Controller
James F. Farley
Vice President—
Industry Relations
Amy D. Husted
Vice President and
General Counsel
David R. Mosley
Vice President and
Chief Information Officer
Renato A. Castro
Treasurer
Thomas G. Adler
Secretary
16
Kirby Inland
Marine, LP
William G. Ivey
President
Kirby Offshore
Marine, LLC
William G. Ivey
President
Christian G. O’Neil
Executive Vice President and
Chief Operating Officer
Christian G. O’Neil
Executive Vice President and
Chief Operating Officer
James C. Guidry
Executive Vice President—
Vessel Operations
Mel R. Jodeit
Executive Vice President—
Marketing
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
Lyle D. Marshall
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
James C. Guidry
Executive Vice President—
Vessel Operations
John W. Sansing, Jr.
Senior Vice President—
Maintenance
William M. Withers
Senior Vice President—Sales
Charles R. Ferrer, Jr.
Vice President—Sales
John T. Hallmark
Vice President—Sales
and Strategic Planning
William L. Oppenheimer
Vice President—Maintenance
Christopher T. Palo
Vice President—Engineering
Carl R. Whitlatch
Vice President and Controller
Kirby Ocean
Transport Company
William G. Ivey
President
William M. Withers
Vice President
Osprey Line, L.L.C.
John T. Hallmark
President
Charles J. Duet
Vice President
Kirby Corporation
2016 Annual Report
Shareholder Information
Annual Meeting
The 2017 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 25, 2017.
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 communi-
cations 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: www.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 1, 2017, there were
53,957,000 common shares outstanding
held by approximately 740 registered
shareholders. The number of registered
shareholders does not reflect the number
of beneficial owners of common stock.
Common Stock Market Price
2017
First Quarter
(through March 1, 2017)
2016
First Quarter
Second Quarter
Third Quarter
Fourth Quarter
2015
First Quarter
Second Quarter
Third Quarter
Fourth Quarter
Sales Price
High
Low
$ 73.40 $ 61.65
$ 63.03 $ 44.63
$ 73.25 $ 57.92
$ 64.85 $ 50.80
$ 70.90 $ 55.11
$ 82.91 $ 70.89
$ 84.24 $ 73.31
$ 78.72 $ 59.54
$ 69.05 $ 50.42
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, 2011, in stock or index, including reinvestment of dividends.
Fiscal year ended December 31.
$200
$150
$100
$50
0
12/11
12/12
12/13
12/14
12/15
12/16
Kirby Corporation
100.00
94.00
150.74
122.63
79.92
101.00
Russell 2000
100.00
116.35
161.52
169.43
161.95
196.45
Dow Jones
US Marine
Transportation
100.00
110.21
163.97
130.12
84.80
107.17
11
12
13
14
15
16
(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 Tina Pyne, Kirby Offshore
Marine’s new 10000 horsepower tugboat,
is named after the wife of Joe Pyne, Kirby’s
Chairman of the Board. The M/V Tina Pyne
and the Kirby 185-02, an 185,000 barrel
coastal tank barge, were placed in service
as an articulated coastal tank barge and
tugboat unit in 2016 under a long-term
contract.