Kirby Corporation
Annual Report
FINANCIAL HIGHLIGHTS
(In thousands, except per share amounts)
Revenues:
Marine transportation
Distribution and services
For the years ended December 31,
2018
2017
2016
2015
2014
$ 1,483,143 $ 1,324,106 $ 1,471,893 $ 1,663,090 $ 1,770,684
795,634
$ 2,970,697 $ 2,214,418 $ 1,770,673 $ 2,147,532 $ 2,566,318
1,487,554
484,442
298,780
890,312
Net earnings attributable to Kirby
$ 78,452 $ 313,187 $ 141,406 $ 226,684 $ 282,006
Net earnings attributable to Kirby
excluding one-time items*
$ 171,408 $ 110,690 $ 141,406 $ 226,684 $ 282,006
1
2
Net earnings per share attributable to Kirby (diluted)
$ 1.31 $ 5.62 $ 2.62 $ 4.11 $ 4.93
Net earnings per share attributable to Kirby
excluding one-time items* (diluted)
EBITDA:**
Net earnings attributable to Kirby
Interest expense
Provision (benefit) for taxes on income
Impairment of long-lived assets
Impairment of goodwill
Depreciation and amortization
$ 2.86 $ 1.99 $ 2.62 $ 4.11 $ 4.93
1
2
$ 78,452 $ 313,187 $ 141,406 $ 226,684 $ 282,006
21,461
169,782
—
—
169,312
46,856
35,081
82,705
2,702
224,972
21,472
(240,889)
105,712
—
202,881
18,738
133,742
—
—
192,240
17,690
84,942
—
—
200,917
EBITDA**
$ 470,768 $ 402,363 $ 444,955 $ 571,404 $ 642,561
Property and equipment, net
Total assets
Long-term debt, including current portion
Total equity
$ 3,539,802 $ 2,959,265 $ 2,921,374 $ 2,778,980 $ 2,589,498
$ 5,871,594 $ 5,127,427 $ 4,289,895 $ 4,140,558 $ 4,127,052
$ 1,410,188 $ 992,406 $ 722,802 $ 774,849 $ 712,405
$ 3,216,301 $ 3,114,223 $ 2,412,867 $ 2,279,196 $ 2,264,913
REVENUES
(In millions)
$2,566
$2,148
$2,214
$1,771
EARNINGS PER SHARE
(Excluding one-time items*)
$2,971
$4.93
$4.11
EBITDA**
(In millions)
$643
$571
$2.862
$2.62
$1.991
$471
$445
$402
2014
2015
2016
2017
2018
2014
2015
2016
2017
2018
2014
2015
2016
2017
2018
* Net earnings attributable to Kirby, excluding one-time items, and net earnings per share attributable to Kirby, excluding one-time items,
are non-GAAP financial measures which exclude certain one-time items as defined in footnotes 1 and 2. Management believes that the
exclusion of certain one-time items from these financial measures enables it and investors to assess and understand operating perfor-
mance, especially when comparing those results with previous and subsequent periods or forecasting performance for future periods,
primarily because management views the excluded items to be outside of Kirby’s normal operating results.
** EBITDA, defined as net earnings attributable to Kirby before interest expense, taxes on income, depreciation and amortization, impairment
of long-lived assets, and impairment of goodwill 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 (impairment of long-lived assets,
impairment of goodwill, depreciation and amortization).
1 The 2018 year included the following one-time items (after tax): $67.2 million, or $1.12 per share, non-cash impairment of long-lived assets
and lease cancellation costs; $2.1 million, or $0.04 per share, non-cash impairment of goodwill; $18.1 million, or $0.30 per share, expenses
related to the retirement of Kirby’s Executive Chairman; $3.0 million, or $0.05 per share, of non-cash expenses related to an amendment to
the employee stock plan; and $2.5 million, or $0.04 per share, transaction costs associated with the Higman Marine acquisition.
2 The 2017 year included the following one-time items (after tax): $269.5 million, or $4.83 per share, deferred tax revaluation benefit,
the result of federal law reform legislation that resulted in the remeasurement of Kirby’s U.S. deferred tax assets and liabilities, and
$67.0 million, or $1.20 per share, non-cash impairment of long-lived assets.
On the cover: The M/V Cottle, a new
2600 horsepower Kirby Inland Marine
towboat, transits the San Jacinto River near
the Houston Ship Channel with two loaded
30,000 barrel tank barges. The M/V Cottle,
which is named after Cottle County, Texas,
and George Washington Cottle, who died
at the Battle of the Alamo in 1836, was
completed in early 2019 and is one of the
newest towboats in Kirby’s fleet.
Kirby Corporation | 2018 Annual Report
MARINE TRANSPORTATION
Kirby Inland Marine operates the nation’s largest fleet of inland tank barges and
towing vessels. Petrochemicals, such as styrene, benzene, and methanol; liquid
fertilizer, including anhydrous ammonia; refined products, including gasoline, diesel
and jet fuel; black oil, such as asphalt, No. 6 fuel oil, crude oil and coker fuel; and
pressurized products, such as butane, propane, and butadiene, are transported
efficiently and safely from producers to intermediaries to end users.
1,003
Inland Tank Barges
Fleet Breakdown
Petrochemicals/refined products
Black oil
Pressure
Anhydrous ammonia
789
131
73
10
13.4 YEARS
Average Age of Barge Fleet
285
Inland Towboats
Fleet Breakdown
800–1300 HP
1400–1900 HP
2000–2400 HP
2500–3200 HP
3300–4800 HP
5000 HP and greater
21.8 M
Total Barrel
Capacity
54
64
137
12
14
4
Kirby Offshore Marine is the largest barrel capacity United States operator of
coastal tank barges and towing vessels participating in the regional distribution
of refined petroleum products, black oil, and crude oil, as well as the distribution
of petrochemicals between Petroleum Administration and Defense Districts.*
53
Coastal Tank Barge Fleet
Fleet Breakdown
Refined products/petrochemicals
Black oil
37
16
4
Offshore Dry-Bulk Barge
and Tugboat Units
Deadweight tonnage
78,000
* <195,000 barrel market
Kirby Corporation | 2018 Annual Report
50
Coastal Tugboat Fleet
Fleet Breakdown
1000–1900 HP
2000–2900 HP
3000–3900 HP
4000–4900 HP
5000–6900 HP
Greater than 7000 HP
4
1
9
14
12
10
5.1 M
Total Barrel Capacity
2018 Revenue
76%
Inland
24%
Coastal
The Kirby 185-01, a Kirby Offshore Marine
185,000 barrel coastal tank barge, with the
M/V Nancy Peterkin, a 10000 horsepower
tugboat, transits near the Golden Gate
Bridge in San Francisco, California.
This articulated tank barge and tug boat
unit was placed into service in 2015 and
currently moves refined petroleum
products under a multi-year contract.
2018 Revenue
68%
Oil & Gas
32%
Commercial/
Industrial
DISTRIBUTION AND SERVICES
Kirby is a leading distributor and services provider to industrial markets,
offering customers a single source for after-market service and parts for engines,
transmissions, reduction gears, and related equipment used in oilfield services,
marine, power generation, on-highway, and other industrial applications. In marine
and power generation applications, Kirby provides after-market service for
medium-speed and high-speed engines, reduction gears, and ancillary products.
In the oilfield services and land-based pressure pumping markets, Kirby serves as
a distributor and service provider for high-speed diesel engines, transmissions,
and pumps, and manufactures and remanufactures oilfield service equipment,
including pressure pumping units. Kirby also rents equipment including generators,
forklifts and compressors for use in a variety of industrial markets.
63
Locations
200
Sales Professionals
224
Sub-dealer
Locations
70
Engineers
1,250
Qualified
Technicians
2.5 M
Square Feet of
Shop Capacity
Our Brands
A certified technician at the Stewart & Stevenson Dallas branch removes a
piston kit on a MTU 12V4000 during an engine rebuild. Aftermarket services
like equipment overhauls and refurbishments, maintenance, and warranty
help customers extend the life of their oilfield service equipment.
TO OUR SHAREHOLDERS
Joe Pyne
Chairman of the Board
David Grzebinski
President and
Chief Executive Officer
We are pleased to report that 2018 was a
year in which Kirby Corporation (“Kirby”
or the “Company”) made significant
progress with expanding the Company’s
earnings power. During the year, we
closed several excellent marine acquisi-
tions, continued to integrate Stewart & Stevenson LLC (“Stewart
& Stevenson”) into our distribution and services segment, and
experienced a recovery in all the markets that we serve.
Overall, we generated a record $2.97 billion in revenues, net
earnings of $78 million, and earnings per share of $1.31 in 2018.
Excluding one-time items, net earnings were $171 million with
earnings per share of $2.86. Earnings per share excluding
one-time items increased 44% year-on-year, reflecting market
improvement and growth in our inland marine business,
a full year contribution from Stewart & Stevenson, and improved
market fundamentals in our oil and gas and commercial marine
businesses in the distribution and services segment.
In 2018, we put our strong balance sheet to work, continuing
our strategy of investing counter-cyclically. Our recent marine
transportation acquisitions were timely and occurred as we
emerged from the bottom of the cycle and markets improved
following a three-year prolonged industry downturn. As we
integrated these acquisitions, we benefited from increased tank
barge utilization rates, improved pricing, and higher activity in all
facets of our marine businesses.
The recent acquisitions within our inland marine transportation
business totaled $534 million. In February 2018, we completed
the purchase of Higman Marine, Inc. and its affiliated companies
(“Higman”) for $419 million in cash, significantly expanding our
presence in the inland marine transportation market. Higman’s
active fleet of 161 inland tank barges with 4.8 million barrels of
capacity and 75 inland towboats was 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. In May, we purchased
Targa Resources Corp.’s (“Targa”) fleet of 16 pressure barges
for $69 million, and in December, we purchased 27 inland
barges from CGBM 100, LLC for $29 million. We also completed
a few smaller acquisitions totaling five inland tank barges and
one inland towboat. In total, 2018 was a watershed year for inland
marine, and we acquired 209 barges totaling 5.4 million barrels
of capacity and 76 towboats.
In our coastal business, in June, we acquired a new state-of-the-
art 155,000 barrel articulated barge unit (“ATB”) which was under
construction by a competitor. We took delivery of this new unit in
December, and have put in place a new multi-year contract with
a major petrochemical customer along the Gulf Coast effective in
the 2019 first quarter. At the same time, we retired a less
efficient and aging ATB currently operating in our fleet.
Our investments were not only in acquisitions but also in keeping
our fleet in great shape. During 2018, we spent $301.9 million
on capital expenditures, including the construction cost of
$71.7 million for the 155,000 barrel coastal ATB. We also
continued to reinvest in our marine transportation fleets,
including $26.1 million for new inland towboat construction in
conjunction with a replacement program that we started at the
end of 2017. In total, we will construct 15 new modern and
efficient 2600 horsepower inland towboats for delivery in 2019
and 2020. In our coastal fleet, we spent $41.7 million, including
progress payments on the construction of six 5000 horsepower
ATB tugboats which will better align the age of our horsepower
with that of our coastal tank barges, thereby improving our
reliability and efficiency. We took delivery of three of these
tugboats in 2018, and the remaining three will be placed into
service in 2019. The balance of $162.4 million in capital
expenditures was used primarily for upgrades to our existing
inland and coastal fleets and improvements to our marine
transportation and distribution and services facilities.
In distribution and services, a key focus during 2018 was to
further the integration of Stewart & Stevenson, which was
acquired in September 2017. We are pleased to report this
integration has been very successful to date, and we have
more than realized the $25 million of cost savings target. This
acquisition transformed this segment and contributed signifi-
cantly to year-on-year growth in revenue of 67% and operating
income of 50%. Today, this segment has enhanced capabilities,
a larger geographic footprint, and reduced volatility with a
diversified portfolio across many markets.
In summary, we had a successful year in 2018, and remain
intensely focused on capital allocation and taking advantage
Kirby Corporation | 2018 Annual Report | 1
TO OUR SHAREHOLDERS continued
of cyclical downturns. Additionally, in January 2019, Kirby
announced an agreement to acquire Cenac Marine Services
LLC’s (“Cenac”) marine transportation fleet for $244 million in
cash. We expect this acquisition to close in March 2019. Cenac’s
fleet is an ideal complement to Kirby’s inland fleet, with 63 well-
maintained 30,000 barrel barges with an average age of four
years and 34 modern towboats with an average age of six years.
The acquisition of Cenac, as well as those completed in 2018,
are expected to generate returns above our cost of capital. They
were all purchased at sizeable discounts to replacement cost
and will allow the Company to avoid significant capital outlays for
new tank barges and towboats in the future. To put it in perspec-
tive, our 2018 inland acquisitions and the pending purchase of
Cenac’s fleet will increase our number of inland barges by 27%
with a corresponding 37% increase in barrel capacity compared
to the end of 2017, and the average age of our inland fleet will
decline to a historical low of 12.8 years. As the inland market
continues its recovery, Kirby will be more efficient and better
able to service our customers, and have significantly increased
earnings power to drive improved returns for our shareholders
for years to come.
Turning to the markets we serve, in inland marine, increased
volumes of petrochemical movements, driven by a favorable
pricing environment for our customers’ products and new
petrochemical plants along the Gulf Coast, as well as higher
demand for the transportation of crude oil and natural gas
condensate by barge led to favorable demand across the industry.
These factors, combined with modest retirements of industry
barge capacity, near record low new tank barge construction,
and extensive lock closures across the inland waterway network
resulted in improved pricing and barge utilization rates during
the year. Overall, spot market rates increased approximately
25% during the year, and term contracts generally renewed
higher in the low to mid-single digits during the second quarter
through the end of the year. Inland tank barge utilization rates
were in the low to mid-90% range for the majority of 2018. In
2018, we rapidly integrated 207 acquired inland tank barges,
took delivery of three new inland tank barges, including two
under construction by Higman, and retired 48 aging inland tank
barges. We ended 2018 with an inland fleet of 1,003 tank barges,
representing 21.8 million barrels of capacity, and 285 towboats.
In coastal, market fundamentals also started to show initial signs
of improvement during 2018. In the first three quarters, spot
market rates stabilized, and in the fourth quarter, we experienced
modest increases in spot and term contract pricing. Utilization in
our coastal business began the year in the high-70% range and
increased modestly to the 80% range during the remainder of
the year. This improvement was driven in part by the widening
of the Brent / WTI crude spread, resulting in more shipments of
crude oil from the Gulf Coast to the East Coast by medium range
tankers that were participating in markets typically serviced by
coastal ATBs. Additionally, limited new construction and a
growing amount of aging and idle capacity resulted in a number
of barge retirements during the year. In total, we estimate that
approximately two million barrels of coastal ATB capacity was
scrapped by the industry during 2018, including four Kirby ATBs
with a total capacity of 0.5 million barrels. At the end of 2018,
we had a fleet of 53 coastal tank barges, representing 5.1 million
barrels of capacity, and 50 tugboats.
To put it in perspective, our 2018 inland
acquisitions and the pending purchase of
Cenac’s fleet will increase our number of
inland barges by 27% with a corresponding
37% increase in barrel capacity compared to
the end of 2017, and the average age of our
inland fleet will decline to a historical low
of 12.8 years.
In late 2018, we completed a financial assessment on the
viability of installing ballast water treatment systems on all
vessels in our fleet that use ballast water. Our analysis concluded
that the we could not earn a sufficient return on the incremental
investment on four aging coastal ATBs and one leased barge.
Therefore, we impaired these units during the fourth quarter,
taking a one-time charge of $85 million. We intend to retire each
of the ATBs on their next major shipyard, which range in date
from 2020 to 2023. While adversely affecting the year’s results,
our decision underscores our commitment to capital discipline
and to invest only where it makes financial sense.
In distribution and services, we experienced a strong oil and gas
market with orders for both new and remanufactured pressure
pumping units and equipment, and increased demand for the
sale of new and overhauled transmissions during the first half of
2018. With demand levels increasing, we opened a new pressure
pumping remanufacturing facility in the Permian Basin during the
second quarter. This facility immediately experienced high
customer demand for remanufacturing and service, and has been
a successful expansion of our capacity to date. In the second half
of 2018, however, pipeline take-away capacity constraints in the
Permian resulted in reduced well completions and weaker market
conditions for our products and services. As a result, we saw
reduced demand for new and overhauled transmissions, and
experienced some modest softening of orders for new pressure
pumping equipment. In the fourth quarter, however, we received
many new orders for new and remanufactured equipment that
will provide for stable activity levels in our manufacturing
businesses through the first half of 2019.
2 | Kirby Corporation | 2018 Annual Report
The commercial and industrial market improved in 2018 as the
inland and coastal marine transportation markets started to
recover. As a result, many of our marine repair centers experi-
enced higher service levels during the year, and they sold
increased volumes of new diesel engines and parts to customers.
In the power generation sector, the Company benefited from a
full year of Stewart & Stevenson’s stand-by power equipment
rental business, and the segment experienced increasing
demand for back-up power systems. Activity remained stable in
the nuclear back-up power generation business.
Our debt at year-end was $1.4 billion, which compared to
$992 million at the end of 2017. Our debt-to-capitalization ratio
at year-end was 31% compared with 24% at December 31, 2017.
Looking into 2019, our financial policies remain unchanged
and consistent with our history, we will prioritize the use of
our free cash flow towards repayment of debt as we progress
through 2019.
We are positioned well for the coming years
as the petrochemical complex continues to
grow and U.S. shale production rises, and
our shareholders should be rewarded nicely
in the coming years.
Our outlook for 2019 is favorable, and we expect additional
growth in revenue and earnings per share as compared to 2018.
In the inland marine transportation market, we anticipate
favorable market conditions to continue, driven by modest
increases in general economic activity helping demand, approxi-
mately 15 new petrochemical projects coming online, and new
Permian crude pipelines which will bring additional volumes to the
Gulf Coast. These factors are expected to contribute to higher
demand and stable barge utilization during 2019. With the full
year contribution from 2018 barge acquisitions and the pending
closure of Cenac in 2019, we expect inland revenues and
operating income to meaningfully grow during the year. In the
coastal market, we anticipate stable to slightly higher volumes
during the year and modest improvement in barge utilization.
Together with anticipated industry barge retirements as a result
of ballast water treatment regulations, we expect a more
balanced market which should yield improved profitability for
2019 and beyond.
In the distribution and services segment, oil price volatility in late
2018 has created some near-term uncertainty for our oil and gas
businesses, with many oilfield companies anticipating that their
capital spending levels will be at or below cash flow levels for
2019. As a result, some industry experts believe that activity
could be soft in the first half of the year, but increase as new
Permian pipelines come on-line in the second half of 2019.
To that end, we anticipate modestly reduced year-on-year
activity in our oil and gas distribution business. In contrast,
however, the strength of our manufacturing backlog at the end
of 2018 is expected to provide for sustained levels of activity
through the first half of 2019, and we anticipate that demand for
more efficient and environmentally friendly pressure pumping
equipment, international projects, and pressure pumping
remanufacturing will provide stability for the remainder of the
year. In the commercial and industrial markets, we expect higher
demand for back-up power systems and specialty equipment
rentals. Activity levels for the commercial marine and nuclear
back-up power generation businesses are expected to be stable.
In summary, 2018 was a good year for Kirby. The performance
of our operations was strong, and we completed several
meaningful marine acquisitions which we worked to quickly
integrate into our fleet. In distribution and services, we made
considerable progress with the integration of Stewart &
Stevenson, diversifying our portfolio and lending stability to this
segment. We are well positioned as the petrochemical complex
continues to grow and U.S. shale production rises, and our
shareholders should be rewarded nicely in the coming years.
Before we close, we’d like to thank all Kirby employees for the
contributions they have made in 2018. We had a successful,
but challenging year with numerous acquisitions in marine
transportation and shifting market conditions in distribution
and services. Despite these challenges, everyone rose to the
occasion, setting up Kirby for continued success in 2019.
To our Board of Directors, each of you bring a wealth of experi-
ence to Kirby, and we want to extend our warmest thanks for
your hard work and wise counsel during 2018. To our customers,
thank you for your trust in Kirby and your confidence in us to
deliver your products safely and efficiently every day. And to our
shareholders, we thank you for your support and look forward to
a bright future ahead.
Respectfully submitted,
Joseph H. Pyne
Chairman of the Board
David W. Grzebinski
President and Chief Executive Officer
Kirby Corporation | 2018 Annual Report | 3
MARINE TRANSPORTATION
Kirby Corporation, through its wholly owned subsidiaries Kirby Inland Marine and Kirby Offshore
Marine, is the United States’ largest tank barge operator, with operations extending to all corners
of the United States, including Alaska and Hawaii.
The United States possesses 12,500 miles of coastline which
is complemented by an extensive 12,000 mile inland waterway
system of commercially navigable and interconnected rivers,
canals, and intracoastal waterways that serve as “water high-
ways.” These water highways play a vital role in the regional dis-
tribution of petrochemicals, refined petroleum products, black oil,
agricultural chemicals, and dry-bulk products. The majority of the
United States’ refineries and petrochemical plants are located in
ports and harbors along the coasts and inland waterways.
Tank barge transportation is the most energy-efficient means of
transporting bulk liquid cargoes in the United States compared
with railroads and trucks. A Mississippi River linehaul tow
consisting 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. Similarly, a Gulf
Intracoastal Waterway unit tow consisting of two 30,000-barrel
tank barges has the carrying capacity of 92 rail cars and 288
tractor trailer tank trucks. Marine transportation is also safer than
these 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.
Kirby Inland Marine serves the inland tank barge market with
a fleet consisting 1,003 inland tank barges with 21.8 million
barrels of capacity, representing approximately 26% of the total
4 | Kirby Corporation | 2018 Annual Report
number of industry inland tank barges, and 285 inland towboats.
Kirby Inland Marine transports petrochemicals, black oil, refined
petroleum products, and agricultural chemicals throughout the
Mississippi River System, Gulf Intracoastal Waterway, and
Houston Ship Channel.
Kirby Offshore Marine serves the coastal tank barge market
with a fleet consisting of 53 coastal tank barges with 5.1 million
barrels of capacity, representing approximately 24% of the total
industry capacity in the 195,000 barrels or less category, and
50 coastal tugboats. Kirby Offshore Marine transports refined
petroleum products, black oil, and petrochemicals primarily 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 which transport raw sugar from Florida
to the East Coast. Additionally, Kirby Ocean Transport carries
coal across the Gulf of Mexico to a power generation facility in
Florida with two offshore dry-bulk barge and tugboat units.
Kirby Inland Marine and Kirby Offshore Marine have approx-
imately 3,050 employees, of which approximately 2,350 are
vessel crew members.
The M/V Sweeney, a 2000 horsepower Kirby Inland Marine
towboat, transits the Mississippi River near Baton Rouge,
Louisiana with two loaded 30,000 barrel tank barges. The
M/V Sweeney was acquired with the Higman purchase in 2018,
and currently moves refined products between Baton Rouge
and Houston for a major oil and gas customer.
2018 RESULTS OF OPERATIONS
76% of marine transportation rev-
enues from the inland market and
24% from the coastal market.
56% of revenues from transporta-
tion of petrochemicals, 21% black
oil, 19% refined products, and 4%
agricultural chemicals.
Total revenues of $1.48 billion
compared to $1.32 billion in 2017.
Operating income of $147.4 million
compared to $135.5 million in 2017.
Operating margin of 9.9%
compared to 10.2% in 2017.
Operating income and operating
margin include $8.2 million of
one-time charges in the 2018
first quarter including Higman
transaction fees and expenses, an
amendment to the employee stock
plan, and severance.
Higher revenues and operating
income reflected improvements
in the inland market which were
partially offset by reductions in
the coastal market.
Improvements in the inland
market were driven by increasing
volumes and demand, higher tank
barge utilization levels in the high
80% to mid-90% range, improving
spot and term contract pricing,
and the addition of Higman’s
fleet in February 2018 and the
Targa pressure barge fleet in May
2018.
Reductions in the coastal market
were primarily due to tank barge
utilization levels in the high 70%
to low 80% range, lower term and
spot market pricing, and fewer
volumes transported as a result
of the impairment and early
retirement of 12 coastal tank
barges at the end of 2017.
Inland marine ton miles (in millions)
increased to 14,501 in 2018
compared to 11,519 in 2017, or
an increase of 26%.
Kirby Corporation | 2018 Annual Report | 5
DISTRIBUTION AND SERVICES
Kirby Corporation, through its wholly owned subsidiary Kirby Distribution & Services, Inc. and
its wholly owned subsidiaries Kirby Engine Systems, United Holdings, and Stewart & Stevenson,
serves two distinct markets: oil and gas and commercial and industrial.
In the oil and gas market, Kirby is engaged in the distribution
and service of diesel engines, pumps, and transmissions, as
well as the sale of OEM replacement parts to large and mid-cap
oilfield service companies, operators, and producers. Kirby’s
manufacturing group is an industry leader in the construction
of new oilfield equipment, including pressure pumping units,
cementers, blenders, and other equipment, both for North
American and international markets. Kirby also specializes in
the remanufacture and service of existing pressure pumping
equipment. Kirby’s key distributorships in the oil and gas market
include Allison Transmission, MTU, and DEUTZ.
In the commercial and industrial market, Kirby supports the day-
to-day operations of its domestic and international customers
through the distribution and service of medium-speed and high-
speed diesel engines and ancillary equipment used in marine,
on- and off-highway, and power generation applications. In this
market, Kirby also sells and rents power generation systems and
railcar movers, and rents forklifts and air compressors.
In marine, Kirby is a major service and OEM replacement parts
provider for diesel engines and ancillary products, such as reduc-
tion gears and transmissions, with service centers across the
United States. Kirby also sells new diesel engines. Kirby’s marine
engine businesses participate in many sectors of the marine
vessel industry, including inland and offshore vessels, oilfield
6 | Kirby Corporation | 2018 Annual Report
supply vessels, fishing vessels, harbor docking equipment,
ferries, and luxury yachts. Marine distributorships include EMD
throughout the United States, as well as MTU, Volvo Penta, and
Alfa Laval in various geographies. Kirby also operates factory-
authorized dealerships for Caterpillar, Cummins, and John Deere
commercial marine diesel engines.
In power generation, Kirby sells pre-packaged and fabricated
back-up power systems for emergency, standby and auxiliary
power for nuclear, commercial, and industrial applications, as
well as rents generator systems. Kirby serves as the exclusive
worldwide distributor for EMD, Nordberg, Woodward, and
Baker Hughes to the nuclear industry. It is also a distributor for
MTU in commercial back-up power applications. Power gener-
ation customers include the worldwide nuclear power industry,
domestic utilities, municipalities, universities, medical facilities,
data centers, petrochemical plants, manufacturing facilities, retail
stores, and office complexes.
In on- and off-highway, Kirby distributes, sells parts, and ser-
vices diesel engines and transmissions for trucking companies,
commercial truck fleets, municipalities, and oil and gas operators
in the United States, as well as mining companies in Colombia.
Kirby’s distributorships include Allison Transmission, and diesel
engines and parts for MTU, Detroit Diesel, Volvo Penta, Isuzu,
and DEUTZ. Additionally, Kirby is the distributor for Thermo-King
refrigeration systems for several key markets in Texas.
Kirby Distribution and Services has approximately 2,500 employees.
2018 RESULTS OF OPERATIONS
68% of distribution and services
revenues from the oil and gas
market and 32% from the com-
mercial and industrial market.
71% of revenues from
distribution and service
and 29% manufacturing
Total revenues of $1.49 billion
compared to $0.89 billion in 2017.
Operating income of $129.3 million
compared to $86.5 million in 2017.
Operating margin of 8.7%
compared to 9.7% in 2017.
Higher revenue and operating
income are primarily due to the
full year contribution from
Stewart & Stevenson, which was
acquired in September 2017, as
well as improvements in both the
oil and gas market and the com-
mercial and industrial market.
Oil and gas results improved
due to increased deliveries of
new pressure pumping units
and higher demand for new and
overhauled transmissions and
related parts.
Commercial and industrial
results improved due to higher
demand for marine diesel engine
service work on inland towboats
and offshore vessels, as well as
increased orders for new marine
diesel engines.
A new Liberty Oilfield Services Quiet FleetTM pressure pumping unit
manufactured at United Engine Manufacturing’s facility in Oklahoma
City, Oklahoma. These pressure pumping units, which generally have
2500 HHP diesel engines, are enclosed and reduce noise levels by
14 dBA at 100 feet. When operating, noise levels at a distance of
25 feet are reduced below the OSHA hearing protection threshold,
making them more environmentally friendly to operate in populated areas.
Kirby Corporation | 2018 Annual Report | 7
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
Kirby Inland Marine, LP continued
United Engines LLC
KIRBY CORPORATION
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
Joseph H. Reniers
President – Kirby Distribution
and Services, Inc.
Kim B. Clarke
Vice President and Chief Human
Resources Officer
Keith L. Clay
Vice President – Supply Chain
Ronald A. Dragg
Vice President and Controller
Cliff R. Stanich
Vice President – Sales
Cecil K. Wattigney
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 T. Hallmark
Executive Vice President –
Sales and Strategy
Eric S. Holcomb
Vice President – Investor Relations
Craig N. Tornga
Senior Vice President – Operations
Amy D. Husted
Vice President and General
Counsel
William Matthew Woodruff
Vice President – Public and
Governmental Affairs
Renato A. Castro
Treasurer
Thomas G. Adler
Secretary
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
Gordon A. Keenan
Vice President – Training
Patrick C. Kelly
Vice President – Sales
Lyle D. Marshall
Vice President – Sales
Richard C. Northcutt
Vice President – Sales
and Horsepower Management
William M. Withers
Senior Vice President – Sales
Carl R. Whitlatch
Vice President and Controller
Kirby Ocean Transport Company
Christian G. O’Neil
President
John T. Hallmark
Executive Vice President
William M. Withers
Vice President
Osprey Line, L.L.C.
John T. Hallmark
President
DISTRIBUTION & SERVICES
Kirby Distribution
& Services, Inc.
Joseph H. Reniers
President
Mia C. Cradeur
Vice President and Controller
Kimberly A. Richard
Vice President – Marketing
and Strategy
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
Ronnie E. Stover
Executive Vice President – Sales
Joshua C. Weed
Executive Vice President –
Distribution Operations
Troy A. Bourgeois
Vice President – Oil and Gas Sales
Paul A. Martin
Vice President – Parts Operations
David L. Tonne
Vice President –
Service Operations
UE Manufacturing LLC
Ronnie E. Stover
Executive Vice President – Sales
Gregory L. Culp
Vice President –
Engineered Products
Thermo King of Houston, LP
Jason K. Robison
Vice President
Stewart & Stevenson LLC
Jack L. Pieper
Vice President and Controller
Stewart & Stevenson
Power Products LLC
John H. Merrifield
President
Donald F. Mann
President – ADDA and FDDA
Joshua C. Weed
Executive Vice President –
Distribution Operations
Andrew W. Hudson
Senior Vice President –
Rental Operations
Troy A. Bourgeois
Vice President –
Oil and Gas Sales
Paul A. Martin
Vice President – Parts Operations
David L. Tonne
Vice President –
Service Operations
Stewart & Stevenson
Manufacturing
Technologies LLC
E. Max Hengst, Jr.
President
Ronnie E. Stover
Executive Vice President – Sales
Chad T. Joost
Senior Vice President – Sales
and Marketing
Stewart & Stevenson
de las Americas Colombia,
Ltda
Rafael H. Garcia
President
8 | Kirby Corporation | 2018 Annual Report
SHAREHOLDER INFORMATION
ANNUAL MEETING
WEBSITE
COMMON STOCK MARKET PRICE
The 2019 Annual Meeting of Stockholders
will be held at the Four Seasons Hotel,
1300 Lamar, Houston, Texas 77010 at
10:00 a.m. (CDT), Tuesday, April 30, 2019.
For more investor information, as well
as information about Kirby, visit Kirby’s
website at www.kirbycorp.com.
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
INDEPENDENT REGISTERED ACCOUNTANTS
KPMG LLP
BG Group Place
811 Main Street, Suite 4500
Houston, Texas 77002
2019
First Quarter
(through March 1, 2019)
2018
First Quarter
Second Quarter
Third Quarter
Fourth Quarter
2017
First Quarter
Second Quarter
Third Quarter
Fourth Quarter
Sales Price
High
Low
$ 79.02 $ 65.24
$ 80.90 $ 66.08
$ 94.05 $ 76.20
$ 88.80 $ 75.70
$ 86.12 $ 60.63
$ 73.40 $ 61.65
$ 74.50 $ 62.55
$ 68.60 $ 59.25
$ 72.95 $ 61.80
INQUIRIES REGARDING STOCK HOLDINGS
COMMON STOCK INFORMATION
FINANCIAL AND INVESTOR RELATIONS
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.
Stock trading symbol—KEX
The New York Stock Exchange is the
principal market for Kirby’s common
stock. As of March 1, 2019, there were
59,875,000 common shares outstanding
held by approximately 580 registered
shareholders. The number of registered
shareholders does not reflect the number
of beneficial owners of common stock.
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
investor.relations@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 12/31/2013 to 12/31/2018.
$150
$100
$50
0
13
14
15
16
17
18
12/13
12/14
12/15
12/16
12/17
12/18
Kirby Corporation
100.00
81.35
53.02
67.00
67.30
67.87
Russell 2000
100.00
104.89
100.26
121.63
139.44
124.09
Dow Jones
US Marine
Transportation
100.00
79.35
51.72
65.36
65.65
66.20
(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 | 2018 Annual Report
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 Kirby Inland Marine
towboat flies a NO HARM
flag. At Kirby, safety is at
the core of everything that
we do and is deeply rooted
into our business strategy
and day-to-day operations.
All towboats, tugboats,
and operating facilities that
have zero incidents with
NO HARM to People, to
the Environment, and
to Equipment for a period
of one year or more proudly
fly a NO HARM flag.