Kirby Corporation | 2017 Annual Report
Kirby Corporation | 2017 Annual Report
Financial Highlights
(In thousands, except per share amounts)
Revenues:
Marine transportation
Distribution and services
For the years ended December 31,
2017*
2016
2015
2014
2013
$ 1,324,106 $ 1,471,893 $ 1,663,090 $ 1,770,684 $ 1,713,167
890,312
298,780
484,442
795,634
529,028
$ 2,214,418 $ 1,770,673 $ 2,147,532 $ 2,566,318 $ 2,242,195
Net earnings attributable to Kirby
$ 313,187 $ 141,406 $ 226,684 $ 282,006 $ 253,061
Net earnings per share attributable to Kirby
common stockholders (diluted)
$ 5.62 $ 2.62 $ 4.11 $ 4.93 $ 4.44
EBITDA–Earnings before interest, taxes,
depreciation and amortization:**
Net earnings attributable to Kirby
$ 313,187 $ 141,406 $ 226,684 $ 282,006 $ 253,061
Interest expense
21,472
17,690
18,738
21,461
27,872
Provision (benefit) for taxes on income
(240,889)
84,942
133,742
169,782
152,379
Impairment of long-lived assets
105,712
—
—
—
—
Depreciation and amortization
202,881
200,917
192,240
169,312
164,437
EBITDA**
$ 402,363 $ 444,955 $ 571,404 $ 642,561 $ 597,749
Property and equipment, net
$ 2,959,265 $ 2,921,374 $ 2,778,980 $ 2,589,498 $ 2,370,803
Total assets
$ 5,127,427 $ 4,289,895 $ 4,140,558 $ 4,127,052 $ 3,666,402
Long-term debt, including current portion
$ 992,406 $ 722,802 $ 774,849 $ 712,405 $ 742,493
Total equity
$ 3,114,223 $ 2,412,867 $ 2,279,196 $ 2,264,913 $ 2,022,153
* The 2017 year included $269,472,000 after taxes, or $4.83 per share, of deferred tax revaluation benefit, the result of recent federal
tax reform legislation that resulted in the remeasurement of Kirby’s United States deferred tax assets and liabilities. This was partially
offset by $105,712,000 before taxes, $66,975,000 after taxes, or $1.20 per share, non-cash impairment of long-lived assets.
** EBITDA, defined as net earnings attributable to Kirby before interest expense, taxes on income, impairment of long-lived assets,
depreciation and amortization, is 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 (impairment of long-lived assets,
depreciation and amortization).
On the Cover: The M/V Escambia, a Kirby Inland Marine 1200 horsepower inland towboat,
works in Kirby’s Baton Rouge Fleet on the Mississippi River assembling a river linehaul tow
which will be taken to the Ohio Valley for delivery. Loaded barges are staged in the Baton Rouge
area from Gulf Coast refineries and petrochemical plants and are transported 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 northbound and southbound on the
rivers. The M/V Escambia is named after the Escambia River in Florida and Alabama.
To Our Shareholders
Kirby Corporation | 2017 Annual Report
A t Kirby Corporation, investing our shareholders’
capital wisely with the objective of superior
returns through the business cycle is one of
the critical tasks of the Kirby management
team. To achieve this objective, timing is
important. During 2017 and early 2018,
we capitalized on key investment opportunities as asset values
declined to levels where our capital objectives can be met when
business returns to normal levels. These strategic acquisitions
should reward our shareholders nicely in future years.
We invested a significant amount of capital in 2017, completing
five acquisitions totaling $850 million. The largest 2017
acquisition was Stewart & Stevenson LLC (“S&S”), which
significantly expanded the geographic footprint and capabilities
of our distribution and services segment. During 2017, we also
purchased from competitors a total of 18 inland tank barges and
four inland towboats, and we acquired a shipyard and a barge
fleeting and fueling operation on the Gulf Coast. In early 2018,
we purchased Higman Marine, Inc. and its affiliated companies
(“Higman”), significantly expanding our presence in and further
consolidating the inland marine transportation market.
In September 2017, we purchased S&S for a total value of
$758 million. The purchase was well-timed as prospects for
the oil and gas industry steadily improved during 2017 following
a prolonged downturn that began at the end of 2014. The
acquisition of S&S creates one of the largest distribution and
service networks of diesel engines, parts and power generation
equipment in the United States with the engineering and
technological capacity to successfully address the complex
requirements of a large customer base in a competitive national
and global environment. The addition of S&S, combined with
our existing business, enhances all parts of our distribution and
services business by expanding the geographic footprint and
product offerings in the oil and gas, marine, on-highway and
power generation markets. It also expands our reach to new
commercial and industrial markets such as construction, mining
and agriculture, while also providing some international exposure
in the mining and oil and gas markets. We are well on our way
to realizing our targeted $25 million of synergies. Coordinated
sales efforts between United Holdings and S&S have already
shown favorable results by helping secure orders for the manu-
facture of new pressure pumping equipment that both standalone
companies would have struggled to deliver on-time to the
customer. As we look to the future, we see a business segment
that provides best-in-class service and products to a broad oil
and gas and commercial and industrial customer base, and has a
cost structure that allows it to better weather commodity cycles.
Joe Pyne
Chairman of the Board
David Grzebinski
President and Chief Executive Officer
In February 2018, we completed the acquisition of Higman
for $419 million in cash. The Higman fleet of 157 inland tank
barges with 4.8 million of capacity and 75 inland towboats is one
of the youngest fleets in the industry, with an average age of
seven years for the tank barges and eight years for the towboats.
As the inland market begins its recovery, the timing of the
Higman acquisition is ideal as it upgrades our tank barge fleet,
allows us to avoid significant future capital outlays for new tank
barges and towboats, and ultimately will enable Kirby to emerge
from the downturn larger, more efficient and better able to serve
our customers.
During 2017, we also continued to reinvest in our marine
transportation fleets, with total capital expenditures of
$177.2 million, including $17.9 million for new inland tank barge
and towboat construction. We spent $53.1 million on our
coastal fleet, including progress payments on the construction
of one new ATB, two 4900 horsepower tugboats and six
5000 horsepower ATB tugboats, better aligning the age
of our horsepower with that of our coastal tank barges,
thereby improving our reliability and efficiency. The remaining
$106.2 million was used primarily for upgrades to our existing
inland and coastal fleets, as well as for upgrades and improve-
ments to our marine transportation and distribution and services
facilities. In summary, we were very successful with our capital
allocation activities in 2017, investing your capital in the long-term
health and growth of the Company.
Our 2017 financial results included revenues of $2.2 billion,
net earnings of $313 million, earnings per share of $5.62 and
EBITDA of $402 million. Net earnings included a one-time
deferred tax remeasurement benefit of $4.83 per share as a
result of recent federal tax reform legislation. This was partially
offset by a $1.20 per share non-cash impairment of long-lived
assets primarily consisting of coastal vessels which we are
retiring. These results, after excluding the one-time deferred
tax benefit and impairment charge, were 24% lower than 2016
as increased activity in our oil and gas distribution and services
business only partially offset the impact from the decline in
1
Kirby Corporation | 2017 Annual Report
To Our Shareholders continued
marine transportation tank barge utilization and pricing. However,
our 2017 free cash flow excluding acquisitions, but after investing
$177 million in new vessels and fleet and facility improvements,
was $176 million, which is only 5% lower than 2016. This is a
testament to our cost reduction initiatives implemented during the
downturn and our commitment to generating strong free cash
flow through the cycle.
Marine Transportation
For the third consecutive year, the marine transportation industry
continued to feel the effects of an industry-wide oversupply of
inland and coastal tank barges. Starting in late 2014 and continuing
in 2015, additional pipeline capacity came on-line as crude oil
pricing collapsed. As a result, much of the industry’s new inland
and coastal tank barge capacity, which was specifically built for
crude oil and natural gas condensate service, was redirected into
the petrochemical, black oil and refined petroleum products
markets, creating an oversupply of tank barges. Due to the
oversupply, we continued to experience pricing pressure for
inland term contracts renewed during 2017, and spot market
pricing remained generally below term contracts. For the coastal
market, many term contracts failed to renew during 2017 as
customers elected to source their needs in the spot market.
Coastal spot contracts remained meaningfully below term
contracts throughout most of 2017.
Petrochemical movements grew throughout 2017, benefiting
from a favorable pricing environment for our customers’ products
and new petrochemical capacity coming on-line during the
second half of 2017. Demand for the movement of refined
petroleum products was lower than 2016. Black oil demand
was higher in our inland market, but lower in our coastal market,
and remained volatile as a result of the seasonality of customer
facility turnarounds and the inconsistent nature of trader
participation in the market. Movements of crude and natural
gas condensate by inland tank barge improved in the latter half
of the year as the Brent/WTI spread widened.
Prior to the impact from Hurricane Harvey, utilization of our inland
fleet followed normal seasonal patterns through most of 2017, in
the mid-80% to low 90% range. Hurricane Harvey, which struck
the Texas Gulf Coast in late August, significantly disrupted
normal supply and distribution routes in our inland market,
closing ports and inland waterways. The hurricane also disrupted
over 50% of the United States’ petrochemical capacity and over
25% of its refinery capacity. After the ports and inland water-
ways opened, utilization for the balance of the third quarter
improved to the high 80% to mid-90% range due to pent-up
demand for liquid barge movements as Gulf Coast petrochemical
and refinery complexes returned to normal operations. Utilization
for the fourth quarter was in the low to mid-90% range, reflecting
a favorable pricing environment for our customers’ products and
the addition of new petrochemical industry capacity coming
on-line. We retired a total of 53 inland tank barges in 2017, and
took delivery of five new 30,000 barrel inland tank barges. We
ended 2017 with an inland fleet of 841 tank barges, representing
17.3 million barrels of capacity, and 227 towboats.
The coastal marine transportation market fundamentals remained
challenging throughout 2017, as new barrel capacity was placed
in service by Kirby and our competitors, further adding to the
overcapacity in the coastal tank barge market. This resulted in
lower utilization and pricing, as well as increased spot market and
idle-time exposure as term contracts failed to renew. Utilization
in our coastal business began the year in the mid-70% to low
80% range, but declined over the second and third quarters to
settle in the low to mid-60% range, where it remained through
year-end. This utilization was substantially lower than the prior
trough of the low 70% range witnessed when we entered the
coastal tank barge market in 2011. In response, we made the
difficult decision to temporarily take equipment out of service
and reduce headcount in order to manage our costs. Further, in
late 2017, with additional coastal industry capacity still under
construction, and utilization rates in the low to mid-60%, we
took proactive measures to impair and early retire idled coastal
equipment. The impaired equipment included 12 tank barges,
some of which would require expensive ballast water treatment
systems installations in the next few years, and 21 tugboats.
These vessels are either being scrapped or sold into international
or non-competing markets. We ended 2017 with an active
coastal fleet of 56 tank barges, representing 5.4 million barrels of
capacity, and 53 tugboats. As we look to 2018 and beyond, our
coastal fleet will be smaller, younger, more reliable and therefore
more competitive in the current coastal market. However, we
anticipate a challenging 2018 unless the industry accelerates
scrappage of older capacity.
Distribution and Services
Kirby entered the diesel engine services business in 1982 to
provide a reliable repair service operation for our vessels. Since
1982, through the acquisition of 18 distribution and services
businesses, culminating with the September 2017 acquisition of
S&S, we have grown our distribution and services segment into
one of the largest nationwide service providers and distributors
of diesel engines, transmissions, parts and equipment to the oil
and gas industry, as well as commercial and industrial companies.
Today, Kirby is a leading manufacturer and remanufacturer of
pressure pumping units and other oilfield equipment primarily
in the domestic market, but now with modest international
exposure through S&S.
The green shoots of a recovery in the North American oil and gas
market began to appear in the second half of 2016 as crude oil
prices increased. By late 2016 and continuing into 2017, customers
began reactivating neglected pressure pumping equipment for
deployment in the lower-cost shale basins. The demand for the
remanufacture of existing pressure pumping equipment and
transmission overhauls remained steady throughout the year,
and was complemented by occasional orders for new pressure
pumping equipment and transmissions. At our manufacturing
facility in Oklahoma City, we remanufactured and manufactured
over 800,000 horsepower of pressure pumping equipment in
2017, more than twice our output in 2016. We successfully met
this demand while simultaneously nearing prior peak operating
margins, a testament to our employees ability to prudently ramp
2
Kirby Corporation | 2017 Annual Report
up production and to the efficiencies we gained by consolidating
three Oklahoma City manufacturing operations under one roof.
The marine sector of the distribution and services segment
was down slightly in 2017 as customers continued to defer
maintenance due to the weak fundamentals in the inland and
coastal marine transportation and the Gulf of Mexico oilfield
services markets. Early signs of a recovery in the Gulf of Mexico
offshore oil and gas market and improving inland marine funda-
mentals point to more favorable markets in 2018. Our power
generation sector remained a strong performer in 2017, and
we anticipate demand in that sector will be steady in 2018.
Strong Balance Sheet
Our continued strong cash flow allowed us to maintain our
balance sheet strength and our investment grade ratings at
Standard & Poor’s and Moody’s. In June 2017, the Company
entered into an amendment of its Revolving Credit Facility that
increased the borrowing limit from $550 million to $850 million
and extended the maturity date to June 2022. The increase in
the Revolving Credit Facility borrowing limit was associated
with the acquisition of S&S. Due to our strong cash flow
generation, we use our Revolving Credit Facility extensively so
that we can delever quickly without incurring break and make-
whole charges.
Our long-term debt at year-end was $992 million versus
$723 million at December 31, 2016, and consisted primarily of
$500 million of unsecured senior notes, $150 million due in
2020 and $350 million due in 2023, and $496 million outstanding
under its Revolving Credit Facility. The debt-to-capitalization
ratio at year-end was 24.2% compared with 23.1% at
December 31, 2016. In anticipation of the Higman acquisition
in February 2018, we issued $500 million of 4.2% senior
unsecured notes due March 1, 2028. We used $419 million
of the proceeds for the acquisition of Higman, increasing the
debt-to-capitalization ratio to the 32% range. Our financial
policies remain unchanged, and consistent with our history,
we expect to rapidly delever our debt with our free cash flow
as we progress through 2018.
Outlook
Our outlook for 2018 is favorable, driven by continued strong
oil and gas activity in our distribution and services segment
and an improving inland marine market. The acquisition of S&S
last fall and its integration with our existing distribution and
services sectors was well-timed, enhanced our capabilities
and scale, significantly expanded our geographic footprint, and
stabilized the volatility of the segment. We believe we are in
the early stages of an oil and gas cycle that should be more
ratable than prior cycles. Experts predict oil prices will be in the
$60 to $70 per barrel range, and land rig counts and drilled-but-
not-completed well inventories in North America are expected to
contribute to oilfield activity growth in excess of 10%. In addition,
experts are predicting that an additional two to four million of new
pressure pumping horsepower will be required to meet current
demand, a 15% to 25% addition to the current fleet. As a result,
we anticipate that the demand for existing pressure pumping
remanufacturing and the manufacturing of new pressure
pumping units and ancillary oilfield service support equipment
will remain strong throughout 2018. Furthermore, additional 2018
S&S integration synergies with our existing operations will
further enhance the earnings potential of this segment.
For the marine transportation market, the integration of Higman
with our inland tank barge sector will be a high priority during
2018. We maintain a positive view on the inland tank barge
market and expect improvement during the year. Key inland
market drivers, including GDP growth of 3% or more, favorable
commodity prices and approximately 30 new petrochemical
projects coming online in 2018, are all expected to contribute
to higher demand, improved utilization and higher pricing across
the industry. While our coastal market is expected to remain
challenging during 2018, we have rationalized our fleet and
expect to improve our profitability going forward.
In early 2018, we welcomed Bill Harvey to Kirby as our
Executive Vice President and Chief Financial Officer. Bill has
more than 14 years of experience as a public company CFO,
primarily in the energy and paper industries. He is a chartered
financial analyst with an MBA from the University of Toronto
and a BS in mechanical engineering from Queens University.
We look forward to working with Bill.
Our success in providing long-term value for our shareholders
relies upon the productivity and passion of our employees, the
partnerships we have with our customers, and the thoughtful
guidance and support of our board of directors. We sincerely
thank our employees, customers and our Board of Directors for
their contribution in strengthening and growing the foundation
of Kirby Corporation during 2017.
Special thanks to Bill Ivey, our President of Marine Transportation,
who will be retiring this month after 39 years of service with
Kirby. Bill joined Kirby with the acquisition of Alamo Inland
Marine Co. and has been a key part of our marine transportation
business from that day forward. Bill’s wise counsel, leadership
and friendship have been invaluable to Kirby.
Kirby is well positioned for the future. We have made some
difficult decisions with respect to our inland and coastal marine
transportation fleets to improve their age and reliability, and we
have made strategic acquisitions in both our marine transportation
and distribution and services segments which should significantly
enhance each of our core businesses and thereby improve future
shareholder returns.
Respectfully submitted,
Joseph H. Pyne
Chairman of the Board
Houston, Texas, March 9, 2018
David W. Grzebinski
President and Chief Executive Officer
3
Kirby Corporation | 2017 Annual Report
Marine Transportation
Kirby Corporation, through its wholly owned subsidiaries
Kirby Inland Marine and Kirby Offshore Marine, is the United
States’ largest tank barge operator, providing a critical service
in the production and distribution of petrochemicals, black oil,
refined petroleum products and agricultural chemicals. Kirby
Inland Marine serves the inland tank barge market and Kirby
Offshore Marine the coastal tank barge market. The inland
market contributed 72% and the coastal market 28% of marine
transportation revenues for 2017.
Kirby’s tank barge fleet transports raw material feedstocks into petrochemical plants,
transports products from one petrochemical plant to another for further processing,
and transports more finished products to manufacturing companies located along the
inland and coastal waterways, and to waterfront terminals for both domestic and foreign
destinations. Black oil, including crude oil and natural gas condensate, is transported to
refineries and storage terminals, residual fuel from refineries to power plants and asphalt
to waterfront terminals. Refined petroleum products, including gasoline blendstocks,
gasoline additives, heating oil, diesel fuel and aviation fuel are transported from inland
and coastal refineries, storage facilities and pipeline terminals to waterfront terminals
for both domestic and international destinations. Agricultural chemicals are transported
primarily to waterfront terminals in the Midwest and South Texas.
The Kirby 185-02, a Kirby Offshore Marine
185,000 barrel coastal tank barge and the
M/V Tina Pyne, a 10000 horsepower tugboat
named after the wife of Joe Pyne, Kirby’s
Chairman of the Board, offloads product at
Port Manatee, Florida. These vessels were
placed into service as a coastal articulated
tank barge unit in 2016. This photo was
taken by Virginia Zimmermann.
The M/V Mobile, an 1800 horsepower inland
marine towboat, works to build a tow of inland
tank barges at Kirby’s fleet facility on the
Houston Ship Channel. This vessel primarily
operates unit tows of two 30,000 barrel inland
tank barges on the Gulf Intracoastal Waterway.
The M/V Mobile is named after the Mobile River
in Alabama.
4
Kirby Corporation | 2017 Annual Report
The United States inland waterway system is composed of
12,000 miles of commercially navigable inland interconnected
rivers, canals and intracoastal waterways connecting 38 states
and approximately 635 shallow draft harbors. Kirby Inland
Marine operates throughout the Mississippi River System,
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. The Houston Ship Channel is one of
the busiest waterways in the United States and the home of
Kirby’s inland and coastal shoreside facilities. The United States
possesses 12,500 miles of coastline with numerous ports and
harbors along the Atlantic, Gulf and Pacific Coasts, as well as in
Alaska and Hawaii. The United States inland waterway system
and coastal ports and harbors are one of the most vibrant and
efficient transportation systems in the world, linking the United
States heartland and coastal states to each other and to the
world. The large majority of the United States petrochemical
plants and refineries are located along the navigable inland
waterways and in ports and harbors along the coastlines.
The inland tank barge market is composed of a diverse and
independent mixture of approximately 40 large integrated
transportation companies and small operators, as well as
captive fleets owned by United States refining and petrochemical
customers. Kirby Inland Marine’s fleet consists of 998 inland
tank barges with 22.0 million barrels of capacity and 302 inland
towboats transporting petrochemicals, black oil, refined petroleum
products and agricultural chemicals. On February 14, 2018, Kirby
purchased Higman Marine, Inc. and affiliated companies for
$419 million in cash, subject to certain post-closing adjustments,
further enhancing Kirby’s leadership position in the inland tank
barge market. Higman’s fleet consisted of 157 inland tank barges
and two stainless steel specialty inland tank barges (currently
under construction for delivery in 2018) with 4.8 million barrels
of capacity and 75 inland towboats. Higman’s fleet of tank barges
and towboats is one of the youngest inland fleets in the industry,
with the tank barges averaging seven years and the towboats
averaging eight years in age.
The coastal tank barge industry is composed of approximately
15 large integrated transportation companies and small operators
in the 195,000 barrel or less category. Tank barges in the 195,000
or less category have the flexibility to access ports inaccessible to
larger vessels, while still delivering large volumes of products.
Kirby Offshore Marine’s fleet consists of 56 coastal tank barges
with 5.4 million barrels of capacity and 53 coastal tugboats
offering regional distribution of refined petroleum products, black
oil and petrochemicals along the Atlantic, Pacific and Gulf Coasts
and in Alaska and Hawaii. Kirby Offshore Marine’s fleet also
includes two offshore dry-bulk barge and tugboat units transporting
raw sugar and other products from the Gulf Coast and Florida to
East Coast ports. In addition, Kirby Ocean Transport transports
coal across the Gulf of Mexico to a power generation facility in
Florida with three offshore dry-bulk barge and tugboat units.
5
Kirby Corporation | 2017 Annual Report
Distribution and Services
Kirby Corporation, through its wholly owned subsidiary Kirby
Distribution & Services, Inc. and its wholly owned subsidiaries
Kirby Engine Systems LLC, United Holdings LLC and Stewart &
Stevenson LLC, serves two distinct markets, oil and gas and
commercial and industrial. In September 2017, Kirby acquired
Stewart & Stevenson, significantly expanding its presence in
the distribution and services market. The oil and gas market
contributed 69% and the commercial and industrial market
contributed 31% of distribution and services revenues for 2017.
Through the oil and gas market, Kirby is engaged in the distribution and service of
diesel engines, pumps and transmissions used in the oilfield service industry, and
the manufacture and remanufacture of oilfield service equipment. The oil and gas
operation sells OEM replacement parts, sells and services diesel engines, pumps and
transmissions, and offers in-house and in-field service capabilities. Kirby remanufactures
existing pressure pumping units and manufactures pressure pumping units, nitrogen
pumping units, cementers, hydration equipment, mud pumps and blenders, coil tubing,
well intervention equipment and gas compression equipment, all fully tested and field
ready. Distributorships include Allison Transmission through which Kirby serves as the
largest United States off-highway distributor, as well as MTU, where Kirby is the largest
distributor in North America, with exclusive distributorships in multiple key oil and gas
states. Kirby’s major oil and gas customers are large and mid-cap North American and
international oilfield service companies, and oil and gas operators and producers with
which Kirby has long-standing relationships.
6
A series of new pressure pumping units
manufactured at Stewart & Stevenson’s
Houston facility. Kirby Distribution and Services
manufactures oilfield service equipment,
including pressure pumping units, hydration,
blenders, cementers, mud pumps, nitrogen,
coil tubing and seismic units. Kirby also
manufactures new Rail King railcar movers
used in railcar switching operations.
A Stewart & Stevenson technician works
on a new pressure pumping unit being
manufactured for delivery into international
markets. In addition to a broad customer base
in North America, Kirby’s portfolio extends into
Central and South America, Europe, the Middle
East and Russia.
Kirby Corporation | 2017 Annual Report
For the commercial and industrial market, Kirby provides an
essential service to support the day-to-day operations of its
domestic and international customers, engaging in the distribution
and service of medium-speed and high-speed diesel engines
and ancillary equipment used in marine, on- and off-highway,
power generation, mining and other commercial and industrial
applications. The market also includes the sale and rental of
power generation systems and railcar movers, and the rental
of fork lifts, pumps and air compressors.
For the marine sector, Kirby is a nationwide service and OEM
replacement parts provider for diesel engines, with in-house
and worldwide in-field service capabilities. Kirby also sells new
engines and services ancillary products, including reduction
gears, transmissions, ballast water equipment and safety related
products. Distributorships include EMD Power Products (EMD)
for medium-speed diesel engines throughout the United States,
and factory-authorized marine dealerships for Caterpillar in
multiple key states. Kirby also has marine distributorships/
dealerships in certain states for Cummins, Detroit Diesel,
John Deere, MTU and Volvo Penta diesel engines, as well as
Falk, Lufkin and Twin Disc marine reduction gears. Major marine
customers include inland and offshore barge operators, oil
service companies, offshore fishing companies, harbor
docking operators, commercial and municipal ferry operators,
government vessels and large pleasure crafts.
Kirby distributes, sells parts and services diesel engines and
transmissions for on- and off-highway applications, and provides
in-house and in-field service capabilities. Kirby serves as the
largest distributor for Allison Transmission and Detroit/Daimler
Truck North America providing parts, service and warranty on
engines, transmissions and related equipment in numerous key
states and the country of Colombia. Off-highway applications
include surface and underground mining equipment and other
oil and gas applications. Kirby also has distributorships with
Deutz and Isuzu diesel engines. Customers in this business
include long-haul and short-haul trucking companies, commercial
and industrial companies with truck fleets, municipality and
commercial buses, and mining operators.
For the power generation sector, Kirby serves as the exclusive
worldwide distributor for EMD, Nordberg, Woodward, Inc., and
Baker Hughes, a GE Company, to the nuclear industry, as well as
serving as a distributor for numerous other companies that serve
the nuclear industry. Kirby sells pre-packaged and fabricated
power generation systems for emergency, standby and auxiliary
power for commercial and industrial applications, as well as
rents generator systems. Power generation customers include
domestic utilities, the worldwide nuclear power industry,
municipalities, universities, medical facilities, data centers,
petrochemical plants, manufacturing facilities, shopping malls,
office complexes and other industrial users.
7
Kirby Corporation | 2017 Annual Report
Board of Directors
Officers
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
Executive Chairman of EnLink
Midstream GP, LLC and
EnLink Midstream Manager, LLC
Director since 2015
C. Sean Day 2, 3
Chairman Emeritus 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
8
Kirby Corporation
Joseph H. Pyne
Chairman of the Board
David W. Grzebinski
President and
Chief Executive Officer
William G. Harvey
Executive Vice President
and Chief Financial Officer
Christian G. O’Neil
President —
Marine Transportation
Marine Transportation
Kirby Inland Marine, LP
Christian G. O’Neil
President
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
Todd M. Behlke
Vice President — Operations
Stephen C. Butts
Vice President — Sales
Craig T. Foret
Vice President — Logistics
Management
Patrick C. Kelly
Vice President — Sales
Distribution and Services
Kirby Distribution
& Services, Inc.
Joseph H. Reniers
President
Mia C. Cradeur
Vice President and Controller
Ronnie E. Stover
Senior Vice President — Sales
Kirby Engine Systems LLC
Dorman Lynn Strahan
President
Engine Systems, Inc.
P. Scott Mangan
Vice President — East Coast
Marine Systems, Inc.
Thomas W. Bottoms
Vice President — Midwest
Troy A. Bourgeois
Vice President — Sales
Joseph H. Reniers
President — Kirby Distribution
& Services, Inc.
Amy D. Husted
Vice President and
General Counsel
Kim B. Clarke
Vice President and
Chief Human Resources Officer
David R. Mosley
Vice President and
Chief Information Officer
Ronald A. Dragg
Vice President and Controller
Eric S. Holcomb
Vice President —
Investor Relations
Lyle D. Marshall
Vice President — Sales
Richard C. Northcutt
Vice President — Sales and
Horsepower Management
Cliff R. Stanich
Vice President — Sales
Thomas H. Whitehead
Vice President — Sales
Carl R. Whitlatch
Vice President and Controller
Kirby Offshore Marine, LLC
Christian G. O’Neil
President
James C. Guidry
Executive Vice President —
Vessel Operations
John W. Sansing, Jr.
Senior Vice President —
Maintenance
William M. Withers
Senior Vice President — Sales
United Holdings LLC
David L. Tonne
Vice President — Aftermarket
United Engines
Gregory L. Culp
Vice President —
Engineered Products
UE Manufacturing
Thermo King of Houston, LP
Jason K. Robison
Vice President
Stewart & Stevenson LLC
Joshua C. Weed
Executive Vice President of
Strategy & Administration
Jack L. Pieper
Vice President & Controller
William Matthew Woodruff
Vice President — Public and
Governmental Affairs
Renato A. Castro
Treasurer
Thomas G. Adler
Secretary
John T. Hallmark
Vice President — Sales and
Strategic Planning
Christopher T. Palo
Vice President — Engineering
Craig N. Tornga
Vice President — Operations
Carl R. Whitlatch
Vice President and Controller
Kirby Ocean Transport Company
Christian G. O’Neil
President
William M. Withers
Vice President
Osprey Line, L.L.C.
John T. Hallmark
President
Charles J. Duet
Vice President
Stewart & Stevenson
Power Products LLC
John H. Merrifield
President
Peter M. Cataford
President — ADDA
Donald F. Mann
President — FDDA
Stewart & Stevenson
Manufacturing
Technologies LLC
E. Max Hengst
President
Stewart & Stevenson
de las Americas Colombia Ltda.
Rafael Garcia
Vice President — Latin America
Shareholder Information
Kirby Corporation | 2017 Annual Report
Annual Meeting
Website
Common Stock Market Price
The 2018 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 24, 2018.
For more investor information, as well
as information about Kirby, visit Kirby’s
website at www.kirbycorp.com.
Independent Registered Accountants
Corporate Headquarters
Executive Office:
55 Waugh Drive, Suite 1000
Houston, Texas 77007
Telephone: (713) 435-1000
Fax: (713) 435-1010
Website: 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
communications concerning address
changes, lost certificates and stock
transfers to:
Proxy Services
C/O Computershare Investor Services
P.O. Box 505008
Louisville, KY 40233-9814
Toll-Free Telephone: (877) 373-6374
Website: 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 Eric Holcomb, VP – Investor Relations,
at Kirby’s corporate headquarters.
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, 2018, there were
59,674,000 common shares outstanding
held by approximately 620 registered
shareholders. The number of registered
shareholders does not reflect the number
of beneficial owners of common stock.
2018
First Quarter
(through March 1, 2018)
2017
First Quarter
Second Quarter
Third Quarter
Fourth Quarter
2016
First Quarter
Second Quarter
Third Quarter
Fourth Quarter
Sales Price
High
Low
$ 80.90 $ 66.80
$ 73.40 $ 61.65
$ 74.50 $ 62.55
$ 68.60 $ 59.25
$ 72.95 $ 61.80
$ 63.03 $ 44.63
$ 73.25 $ 57.92
$ 64.85 $ 50.80
$ 70.90 $ 55.11
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
Eric Holcomb, VP – Investor Relations,
at Kirby’s corporate headquarters, e-mail
Eric.Holcomb@kirbycorp.com or visit
Kirby’s website at www.kirbycorp.com.
Comparison of 5-Year Cumulative Total Return
The graph below matches Kirby Corporation’s cumulative 5-Year total shareholder return
on common stock with the cumulative total returns of the Russell 2000 index and the
Dow Jones US Marine Transportation index. The graph tracks the performance of a
$100 investment in Kirby common stock and in each index (with the reinvestment of all
dividends) from 12/31/2012 to 12/31/2017.
$200
$150
$100
$50
0
12
13
14
15
16
17
12/12
12/13
12/14
12/15
12/16
12/17
Kirby Corporation
100.00
160.37
130.46
85.02
107.45
107.93
Russell 2000
100.00
138.82
145.62
139.19
168.85
193.58
Dow Jones
US Marine
Transportation
100.00
148.78
118.06
76.94
97.24
96.68
(cid:81) Kirby Corporation (cid:81)(cid:3)Russell 2000 (cid:81)(cid:3)Dow Jones US Marine Transportation
The stock price performance included in this graph is not necessarily indicative of
future stock price performance.
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
A new pressure pumping blender
manufactured at United Holding’s
Oklahoma City facility. Blenders
are computer-controlled units
that support hydraulic fracturing
operations by mixing proppant
(sand) and water slurries prior to
high pressure injection into the
well. Kirby Distribution & Services
manufactures and remanufactures
a wide variety of oilfield service
equipment, including pressure
pumping, hydration, blenders,
cementers, mud pumps, nitrogen,
coil tubing and seismic units.