KIRBY CORP 10-Q

Item 1. Financial Statements KIRBY CORPORATION AND CONSOLIDATED SUBSIDIARIES CONDENSED BALANCE SHEETS (Unaudited) March 31, 2025 December 31, 2024 ($ in thousands) ASSETS Current assets: Cash and cash equivalents $ 51,078 $ 74,444 Accounts receivable: Trade – less allowance for doubtful accounts 505,617 489,857 Other 48,003 46,888 Inventories – net 434,706 393,898 Prepaid expenses and other current assets 62,876 63,472 Total current assets 1,102,280 1,068,559 Property and equipment 6,310,311 6,123,208 Accumulated depreciation ( 2,161,012 ) ( 2,100,242 ) Property and equipment – net 4,149,299 4,022,966 Operating lease right-of-use assets 157,903 158,990 Goodwill 438,748 438,748 Other intangibles, net 32,275 34,406 Other assets 134,096 128,283 Total assets $ 6,014,601 $ 5,851,952 LIABILITIES AND STOCKHOLDERS’ EQUITY Current liabilities: Bank notes payable $ 7,337 $ 8,226 Income taxes payable 21,927 25,417 Accounts payable 272,163 251,354 Accrued liabilities 190,412 236,813 Current portion of operating lease liabilities 35,417 35,727 Deferred revenues 171,327 177,216 Total current liabilities 698,583 734,753 Long-term debt, net – less current portion 1,091,032 866,722 Deferred income taxes 741,417 739,472 Operating lease liabilities – less current portion 146,250 148,170 Other long-term liabilities 9,565 9,587 Total long-term liabilities 1,988,264 1,763,951 Contingencies and commitments — — Equity: Kirby stockholders’ equity: Common stock, $ 0.10 par value per share. Authorized 120 million shares, issued 65.5 million shares 6,547 6,547 Additional paid-in capital 865,007 868,763 Accumulated other comprehensive income – net 69,633 71,192 Retained earnings 3,054,358 2,978,372 Treasury stock – at cost, 9.1 million shares at March 31, 2025 and 8.2 million at December 31, 2024 ( 669,510 ) ( 573,061 ) Total Kirby stockholders’ equity 3,326,035 3,351,813 Noncontrolling interests 1,719 1,435 Total equity 3,327,754 3,353,248 Total liabilities and equity $ 6,014,601 $ 5,851,952 See accompanying notes to condensed financial statements. 2 KIRBY CORPORATION AND CONSOLIDATED SUBSIDIARIES CONDENSED STATEMENTS OF EARNINGS (Unaudited) Three Months Ended March 31, 2025 2024 ($ in thousands, except per share amounts) Revenues: Marine transportation $ 476,149 $ 475,412 Distribution and services 309,510 332,610 Total revenues 785,659 808,022 Costs and expenses: Costs of sales and operating expenses 512,336 550,681 Selling, general and administrative 95,287 90,206 Taxes, other than on income 8,830 8,044 Depreciation and amortization 63,730 57,642 Gain on disposition of assets ( 70 ) ( 74 ) Total costs and expenses 680,113 706,499 Operating income 105,546 101,523 Other income 5,334 3,269 Interest expense ( 10,537 ) ( 13,151 ) Earnings before taxes on income 100,343 91,641 Provision for taxes on income ( 24,073 ) ( 21,726 ) Net earnings 76,270 69,915 Net (earnings) loss attributable to noncontrolling interests ( 284 ) 153 Net earnings attributable to Kirby $ 75,986 $ 70,068 Net earnings per share attributable to Kirby common stockholders: Basic $ 1.33 $ 1.20 Diluted $ 1.33 $ 1.19 See accompanying notes to condensed financial statements. 3 KIRBY CORPORATION AND CONSOLIDATED SUBSIDIARIES CONDENSED STATEMENTS OF COMPREHENSIVE INCOME (Unaudited) Three Months Ended March 31, 2025 2024 ($ in thousands) Net earnings $ 76,270 $ 69,915 Other comprehensive loss, net of taxes: Pension and postretirement benefits ( 1,867 ) ( 395 ) Foreign currency translation adjustments 308 — Total other comprehensive loss, net of taxes ( 1,559 ) ( 395 ) Total comprehensive income, net of taxes 74,711 69,520 Net (earnings) loss attributable to noncontrolling interests ( 284 ) 153 Comprehensive income attributable to Kirby $ 74,427 $ 69,673 See accompanying notes to condensed financial statements. 4 KIRBY CORPORATION AND CONSOLIDATED SUBSIDIARIES CONDENSED STATEMENTS OF CASH FLOWS (Unaudited) Three Months Ended March 31, 2025 2024 ($ in thousands) Cash flows from operating activities: Net earnings $ 76,270 $ 69,915 Adjustments to reconcile net earnings to net cash provided by operations: Depreciation and amortization 63,730 57,642 Provision for deferred income taxes 2,570 9,411 Amortization of share-based compensation 7,847 6,408 Amortization of major maintenance costs 7,185 8,345 Other 1,246 1,607 Decrease in cash flows resulting from changes in operating assets and liabilities, net ( 122,307 ) ( 30,040 ) Net cash provided by operating activities 36,541 123,288 Cash flows from investing activities: Capital expenditures ( 78,687 ) ( 81,047 ) Acquisitions of businesses and marine equipment ( 97,250 ) — Proceeds from disposition of assets 81 2,412 Net cash used in investing activities ( 175,856 ) ( 78,635 ) Cash flows from financing activities: Borrowings on bank credit facilities, net 224,110 43,575 Payment of debt issuance costs — ( 3 ) Proceeds from exercise of stock options 262 1,509 Payments related to tax withholding for share-based compensation ( 5,949 ) ( 5,284 ) Treasury stock purchases ( 101,473 ) ( 41,787 ) Other ( 1,001 ) ( 24 ) Net cash provided by (used in) financing activities 115,949 ( 2,014 ) Increase (decrease) in cash and cash equivalents ( 23,366 ) 42,639 Cash and cash equivalents, beginning of year 74,444 32,577 Cash and cash equivalents, end of period $ 51,078 $ 75,216 Supplemental disclosures of cash flow information: Cash paid during the period: Interest paid $ 17,711 $ 21,511 Income taxes paid, net $ 24,994 $ 1,062 Operating cash outflow from operating leases $ 11,749 $ 11,256 Non-cash investing activity: Capital expenditures included in accounts payable $ ( 12,011 ) $ 1,590 Right-of-use assets obtained in exchange for lease obligations $ 5,516 $ 5,088 See accompanying notes to condensed financial statements. 5 KIRBY CORPORATION AND CONSOLIDATED SUBSIDIARIES CONDENSED STATEMENTS OF STOCKHOLDERS’ EQUITY (Unaudited) Accumulated Additional Other Common Stock Paid-in- Comprehensive Retained Treasury Stock Noncontrolling Shares Amount Capital Income, Net Earnings Shares Amount Interests Total (in thousands) Balance at December 31, 2024 65,472 $ 6,547 $ 868,763 $ 71,192 $ 2,978,372 ( 8,215 ) $ ( 573,061 ) $ 1,435 $ 3,353,248 Stock option exercises — — 27 — — 4 235 — 262 Issuance of stock for equity awards, net of forfeitures — — ( 11,630 ) — — 165 11,630 — — Tax withholdings on equity award vesting — — — — — ( 55 ) ( 5,949 ) — ( 5,949 ) Amortization of share-based compensation — — 7,847 — — — — — 7,847 Treasury stock purchases — — — — — ( 1,003 ) ( 101,473 ) — ( 101,473 ) Excise taxes on treasury stock purchases — — — — — — ( 892 ) — ( 892 ) Total comprehensive income, net of taxes — — — ( 1,559 ) 75,986 — — 284 74,711 Balance at March 31, 2025 65,472 $ 6,547 $ 865,007 $ 69,633 $ 3,054,358 ( 9,104 ) $ ( 669,510 ) $ 1,719 $ 3,327,754 Accumulated Additional Other Common Stock Paid-in- Comprehensive Retained Treasury Stock Noncontrolling Shares Amount Capital Income, Net Earnings Shares Amount Interests Total (in thousands) Balance at December 31, 2023 65,472 $ 6,547 $ 863,963 $ 35,006 $ 2,691,665 ( 6,843 ) $ ( 411,750 ) $ 1,246 $ 3,186,677 Stock option exercises — — 319 — — 19 1,190 — 1,509 Issuance of stock for equity awards, net of forfeitures — — ( 11,540 ) — — 190 11,540 — — Tax withholdings on equity award vesting — — — — — ( 66 ) ( 5,284 ) — ( 5,284 ) Amortization of share-based compensation — — 6,408 — — — — — 6,408 Treasury stock purchases — — — — — ( 499 ) ( 41,787 ) — ( 41,787 ) Excise taxes on treasury stock purchases — — — — — — ( 302 ) — ( 302 ) Total comprehensive income, net of taxes — — — ( 395 ) 70,068 — — ( 153 ) 69,520 Balance at March 31, 2024 65,472 $ 6,547 $ 859,150 $ 34,611 $ 2,761,733 ( 7,199 ) $ ( 446,393 ) $ 1,093 $ 3,216,741 See accompanying notes to condensed financial statements. 6 KIRBY CORPORATION AND CONSOLIDATED SUBSIDIARIES NOTES TO CONDENSED FINANCIAL STATEMENTS (Unaudited) (1) Basis for Preparation of the Condensed Financial Statements The condensed financial statements included herein have been prepared by Kirby Corporation and its consolidated subsidiaries (“Kirby” or the “Company”), without audit, pursuant to the rules and regulations of the Securities and Exchange Commission. Although the Company believes that the disclosures are adequate to make the information presented not misleading, certain information and footnote disclosures, including significant accounting policies normally included in annual financial statements, have been condensed or omitted pursuant to such rules and regulations. It is suggested that these condensed financial statements be read in conjunction with the Company’s Annual Report on Form 10-K for the year ended December 31, 2024 . Certain reclassifications have been made to reflect the current presentation of financial information. (2) Acquisitions On March 27, 2025, the Company purchased 14 inland tank barges with a total capacity of 364,000 barrels, including four specialty barges, and four high horsepower towboats from an undisclosed seller for $ 97.3 million in cash. The 14 tank barges, including four specialty barges, transport petrochemicals and refined products on the Mississippi River System and Gulf Intracoastal Waterway. The average age of the 14 barges was 16 years. On December 31, 2024, the Company purchased an inland tank barge from a leasing company for $ 2.7 million in cash. The Company had been leasing the barge prior to purchase . On December 30, 2024, the Company purchased three inland tank barges from an undisclosed seller for $ 9.9 million in cash. On May 15, 2024, the Company completed the purchase of 13 inland tank barges, with a total capacity of 347,000 barrels, and two high horsepower towboats from an undisclosed seller for $ 65.2 million in cash. The 13 tank barges, including three specialty barges, transport petrochemicals and refined products on the Mississippi River System and Gulf Intracoastal Waterway. The average age of the 13 barges was 15 years. (3) Revenues The following table sets forth the Company’s revenues by major source (in thousands): Three Months Ended March 31, 2025 2024 Marine transportation segment: Inland transportation $ 392,499 $ 386,007 Coastal transportation 83,650 89,405 $ 476,149 $ 475,412 Distribution and services segment: Commercial and industrial $ 160,228 $ 142,624 Power generation 104,502 135,669 Oil and gas 44,780 54,317 $ 309,510 $ 332,610 Contract liabilities represent advance consideration received from customers, and are recognized as revenue over time or at a point in time as the related performance obligation is satisfied. Revenues recognized during the three months ended March 31, 2025 and 2024 that were included in the opening contract liability balances were $ 60.2 million and $ 54.4 million , respectively. The Company presents all contract liabilities within the deferred revenues financial statement caption on the balance sheets. The Company did no t have any contract assets as of March 31, 2025 or December 31, 2024 . 7 (4) Segment Data The Company’s operations are aggregated into two reportable business segments as follows: Marine Transportation Segment (“KMT”) — Provides marine transportation by United States flagged vessels principally of liquid cargoes throughout the United States inland waterway system, along all three United States coasts, and to a lesser extent, in United States coastal transportation of dry-bulk cargoes. The principal products transported include petrochemicals, black oil, refined petroleum products and agricultural chemicals. Distribution and Services Segment (“KDS”) — Provides after-market services and genuine replacement parts for engines, transmissions, reduction gears, electric motors, drives, and controls, specialized electrical distribution and control systems, and related equipment used in oilfield services, marine, power generation, on-highway, and other industrial applications. The Company also rents equipment including generators, industrial compressors, high-capacity lift trucks, construction equipment and refrigeration trailers for use in a variety of industrial markets. The Company also manufactures and remanufactures specialized equipment, including pressure pumping units, electric power generation equipment, and specialized electrical distribution and control equipment for oilfield service, railroad and other industrial customers. The Company’s two reportable business segments are managed separately by the Company’s chief operating decision maker (“CODM” ) , its Chief Executive Officer , based on fundamental differences in their operations. The Company’s accounting policies for the business segments are the same as those described in Note 1, Summary of Significant Accounting Policies of the Notes to Consolidated Financial Statements in the Company’s 2024 Annual Report on Form 10-K. The CODM evaluates the performance of the Company’s segments based on the contributions to operating income of the respective segments, and before income taxes, interest, gains or losses on disposition of assets, other nonoperating income, noncontrolling interests, accounting changes, and nonrecurring items. The CODM uses segment operating income to allocate resources for each segment during the annual budget and forecasting process. The CODM considers budget-to-actual variances on a monthly basis for segment operating income when making decisions about allocating capital and personnel to the segments. The CODM also uses segment operating income to assess the performance for each segment by comparing the results and return on invested capital of each segment. Intersegment revenues, based on market-based pricing, of KDS from KMT of $ 11.1 million for the three months ended March 31, 2025 and $ 6.6 million for the three months ended March 31, 2024, as well as the related intersegment profit of $ 1.1 million for the three months ended March 31, 2025 and $ 0.7 million for the three months ended March 31, 2024, have been eliminated from the tables below. The following tables set forth the Company’s revenues, depreciation and amortization, and income or loss by reportable segment and total assets (in thousands): Three Months Ended March 31, 2025 2024 KMT KDS Total KMT KDS Total Revenue from external customers $ 476,149 $ 309,510 $ 785,659 $ 475,412 $ 332,610 $ 808,022 Less: Costs of sales and operating expenses 290,987 222,228 513,215 301,262 249,403 550,665 Administrative payroll expense 21,230 24,936 46,166 21,533 23,653 45,186 Taxes, other than on income 6,452 2,353 8,805 6,197 1,828 8,025 Depreciation and amortization 51,672 10,319 61,991 47,849 7,844 55,693 Other segment items (a) 19,224 27,083 46,307 15,588 27,868 43,456 Segment operating income $ 86,584 $ 22,591 $ 109,175 $ 82,983 $ 22,014 $ 104,997 Reconciliation of segment operating income Unallocated amounts: General corporate expenses ( 3,699 ) ( 3,548 ) Gain on disposition of assets 70 74 Operating income $ 105,546 $ 101,523 Other income 5,334 3,269 Interest expense ( 10,537 ) ( 13,151 ) Earnings before taxes on income $ 100,343 $ 91,641 (a) Other segment items for each reportable segment includes: KMT – selling expense, professional service expense, occupancy expense, and certain overhead expenses. KDS – inventory-related expense, warranty expense, selling expense, professional service expense, occupancy expense, and certain overhead expenses. 8 March 31, 2025 December 31, 2024 Total assets: Marine transportation $ 4,705,549 $ 4,578,616 Distribution and services 1,171,285 1,115,781 Other 137,767 157,555 $ 6,014,601 $ 5,851,952 The following table presents the details of “Other” total assets (in thousands): March 31, 2025 December 31, 2024 General corporate assets $ 134,566 $ 154,655 Investment in affiliates 3,201 2,900 $ 137,767 $ 157,555 (5) Long-Term Debt The following table presents the carrying value and fair value (determined using inputs characteristic of a Level 2 fair value measurement) of debt outstanding (in thousands): March 31, 2025 December 31, 2024 Carrying Value Fair Value Carrying Value Fair Value Revolving Credit Facility due July 29, 2027 (a) $ 225,000 $ 225,000 $ — $ — Term Loan due July 29, 2027 (a) 70,000 70,000 70,000 70,000 4.2 % senior notes due March 1, 2028 500,000 492,833 500,000 491,923 3.46 % senior notes due January 19, 2033 60,000 53,409 60,000 52,956 3.51 % senior notes due January 19, 2033 240,000 214,417 240,000 212,650 Credit line due June 30, 2026 — — — — Bank notes payable 7,337 7,337 8,226 8,226 1,102,337 1,062,996 878,226 835,755 Unamortized debt discounts and issuance costs ( 3,968 ) — ( 3,278 ) — $ 1,098,369 $ 1,062,996 $ 874,948 $ 835,755 (a) Variable interest rate o f 5.6 % at March 31, 2025 and December 31, 2024 . On July 29, 2022, the Company entered into a credit agreement (the “2027 Credit Agreement”) with a group of commercial banks, with JPMorgan Chase Bank, N.A. as the administrative agent bank that allows for a $ 500 million unsecured revolving credit facility (the “2027 Revolving Credit Facility”) and a $ 250 million unsecured term loan (the “2027 Term Loan”) with a maturity date of July 29, 2027 . In the fourth quarter of 2022, the Company repaid $ 80 million under the 2027 Term Loan prior to scheduled maturities. In the fourth quarter of 2024, the Company repaid $ 100 million under the 2027 Term Loan prior to scheduled maturities. As a result, no repayments are required until March 31, 2027. Future repayments under the 2027 Term Loan are excluded from short term liabilities because the Company intends to use availability under the 2027 Revolving Credit Facility to repay these amounts upon maturity. Outstanding letters of credit under the 2027 Revolving Credit Facility were $ 6,000 and available borrowing capacity was $ 275.0 million as of March 31, 2025. On February 3, 2022, the Company entered into a note purchase agreement for the issuance of $ 300 million of unsecured senior notes with a group of institutional investors, consisting of $ 60 million of 3.46 % series A notes (“Series A Notes”) and $ 240 million of 3.51 % series B notes (“Series B Notes ”), each due January 19, 2033 (collectively, the “2033 Notes”). The Series A Notes were issued on October 20, 2022, and the Series B Notes were issued on January 19, 2023. No principal payments will be required until maturity. The Company has a $ 15 million line of credit (“Credit Line”) with Bank of America, N.A. (“Bank of America”) for short-term liquidity needs and letters of credit, with a maturity date of June 30, 2026 . Outstanding letters of credit under the Credit Line were $ 6.8 million and available borrowing capacity was $ 8.2 million as of March 31, 2025 . 9 (6) Leases The Company currently leases various facilities and equipment under cancelable and noncancelable operating leases. The accounting for the Company’s leases may require judgments, which include determining whether a contract contains a lease, allocating the consideration between lease and non-lease components, and determining the incremental borrowing rates. Leases with an initial noncancelable term of 12 months or less are not recorded on the balance sheet and related lease expense is recognized on a straight-line basis over the lease term. The Company has also elected to combine lease and non-lease components on all classes of leased assets, except for leased towing vessels, for which the Company estimates approximately 70 % of the costs relate to service costs and other non-lease components. Variable lease costs relate primarily to real estate executory costs (i.e. taxes, insurance and maintenance). Future minimum lease payments under operating leases that have initial noncancelable lease terms in excess of one year were as follows (in thousands): March 31, 2025 December 31, 2024 2025 $ 32,360 $ 42,202 2026 39,140 38,115 2027 31,246 30,263 2028 23,865 22,860 2029 13,482 12,483 Thereafter 78,772 76,621 Total lease payments 218,865 222,544 Less: imputed interest ( 37,198 ) ( 38,647 ) Operating lease liabilities $ 181,667 $ 183,897 The following table summarizes lease costs (in thousands): Three Months Ended March 31, 2025 2024 Operating lease cost $ 11,985 $ 11,599 Variable lease cost ( 15 ) 578 Short-term lease cost 10,675 8,809 Sublease income ( 860 ) ( 830 ) $ 21,785 $ 20,156 The following table summarizes other supplemental information about the Company’s operating leases: March 31, 2025 December 31, 2024 Weighted average discount rate 4.6 % 4.6 % Weighted average remaining lease term 8 years 8 years (7) Stock Award Plans The compensation cost that has been charged against earnings for the Company’s stock award plans and the income tax benefit recognized in the statement of earnings for stock awards were as follows (in thousands): Three Months Ended March 31, 2025 2024 Compensation cost $ 7,847 $ 6,408 Income tax benefit $ 1,883 $ 1,519 During the three months ended March 31, 2025, the Company grant ed 131,170 restricted stock units (“RSUs”) to selected officers and other key employees under the employee stock award plan that vest ratably over five years . During May 2025, the Company granted 15,384 shares of restricted stock to nonemployee directors of the Company under the director stock plan which vest six months after the date of grant. 10 (8) Taxes on Income Earnings (loss) before taxes on income and details of the provision for taxes on income were as follows (in thousands): Three Months Ended March 31, 2025 2024 Earnings (loss) before taxes on income: United States $ 100,574 $ 91,654 Foreign ( 231 ) ( 13 ) $ 100,343 $ 91,641 Provision for taxes on income: Federal: Current $ 18,166 $ 10,619 Deferred 1,545 8,082 State and local: Current 3,337 1,622 Deferred 1,025 1,329 Foreign - current — 74 $ 24,073 $ 21,726 (9) Earnings Per Share The following table presents the components of basic and diluted earnings per share (in thousands, except per share amounts): Three Months Ended March 31, 2025 2024 Net earnings attributable to Kirby $ 75,986 $ 70,068 Undistributed earnings allocated to restricted shares — ( 1 ) Earnings available to Kirby common stockholders – basic 75,986 70,067 Undistributed earnings allocated to restricted shares — 1 Undistributed earnings reallocated to restricted shares — ( 1 ) Earnings available to Kirby common stockholders – diluted $ 75,986 $ 70,067 Shares outstanding: Weighted average common stock issued and outstanding 56,949 58,473 Weighted average unvested restricted stock — ( 1 ) Weighted average common stock outstanding – basic 56,949 58,472 Dilutive effect of stock options and restricted stock units 367 347 Weighted average common stock outstanding – diluted 57,316 58,819 Net earnings per share attributable to Kirby common stockholders: Basic $ 1.33 $ 1.20 Diluted $ 1.33 $ 1.19 Certain outstanding options to purchase approximately 23,000 shares of common stock were excluded in the computation of diluted earnings per share as of March 31, 2024 , as such stock options would have been antidilutive. There were no antidilutive stock options as of March 31, 2025 . There were no antidilutive RSUs as of March 31, 2025 and 2024 . (10) Inventories The following table presents the details of inventories – net (in thousands): March 31, 2025 December 31, 2024 Finished goods $ 353,415 $ 328,540 Work in process 81,291 65,358 $ 434,706 $ 393,898 11 (11) Retirement Plans The Company sponsors a defined benefit plan for certain of its inland vessel personnel and shore based tankermen. The plan benefits are based on an employee’s years of service and compensation. The plan assets consist primarily of equity and fixed income securities. On April 12, 2017, the Company amended its pension plan to cease all benefit accruals for periods after May 31, 2017 for certain participants. Participants grandfathered and not impacted were those, as of the close of business on May 31, 2017, who either (a) had completed 15 years of pension service or (b) had attained age 50 and completed 10 years of pension service. Participants non-grandfathered are eligible to receive discretionary 401(k) plan contributions. The Company’s pension plan funding strategy is to make annual contributions in amounts equal to or greater than amounts necessary to meet minimum government funding requirements. The plan’s benefit obligations are based on a variety of demographic and economic assumptions, and the pension plan assets’ returns are subject to various risks, including market and interest rate risk, making an accurate prediction of the pension plan contribution difficult. Based on current pension plan assets and market conditions, the Company does not expect to make a contribution to the Kirby pension plan during 2025. On February 14, 2018, with the acquisition of Higman Marine, Inc. and its affiliated companies (“Higman”), the Company assumed Higman’s pension plan for its inland vessel personnel and office staff. On March 27, 2018, the Company amended the Higman pension plan to close it to all new entrants and cease all benefit accruals for periods after May 15, 2018 for all participants. The Company made contributions of $ 0.3 million to the Higman pension plan during the three months ended March 31, 2025 . The Company expects to make additional contributions of $ 0.9 million during the remainder of 2025. The Company sponsors an unfunded defined benefit health care plan that provides limited postretirement medical benefits to employees who meet minimum age and service requirements, and to eligible dependents. The plan is contributory, with retiree contributions adjusted annually. The plan eliminated coverage for future retirees as of December 31, 2011. The Company also has an unfunded defined benefit supplemental executive retirement plan (“SERP”) that was assumed in an acquisition in 1999. That plan ceased to accrue additional benefits effective January 1, 2000. The components of net periodic benefit cost for the Company’s defined benefit plans were as follows (in thousands): Pension Benefits Pension Plans SERP Three Months Ended March 31, Three Months Ended March 31, 2025 2024 2025 2024 Components of net periodic benefit cost: Service cost $ 605 $ 874 $ — $ — Interest cost 4,487 4,320 10 10 Expected return on plan assets ( 6,809 ) ( 6,219 ) — — Amortization of actuarial (gain) loss ( 2,434 ) ( 473 ) 7 8 Net periodic benefit cost $ ( 4,151 ) $ ( 1,498 ) $ 17 $ 18 The components of net periodic benefit cost for the Company’s postretirement benefit plan were as follows (in thousands): Other Postretirement Benefits Postretirement Welfare Plan Three Months Ended March 31, 2025 2024 Components of net periodic benefit cost: Interest cost $ 5 $ 5 Amortization of actuarial gain ( 65 ) ( 70 ) Net periodic benefit cost $ ( 60 ) $ ( 65 ) 12 (12) Other Comprehensive Income The Company’s changes in other comprehensive loss were as follows (in thousands): Three Months Ended March 31, 2025 2024 Gross Amount Income Tax Benefit Net Amount Gross Amount Income Tax Benefit Net Amount Pension and postretirement benefits (a): Amortization of net actuarial gain $ ( 2,492 ) $ 625 $ ( 1,867 ) $ ( 535 ) $ 140 $ ( 395 ) Foreign currency translation 308 — 308 — — — Total $ ( 2,184 ) $ 625 $ ( 1,559 ) $ ( 535 ) $ 140 $ ( 395 ) (a) Actuarial gains (losses) are amortized into other income (expense). ( See Note 11, Retirement Plans) (13) Contingencies and Commitments On October 13, 2016, the tug Nathan E. Stewart and barge DBL 55, an articulated tank barge and tugboat unit (“ATB”) owned and operated by Kirby Offshore Marine, LLC, a wholly owned subsidiary of the Company, ran aground at the entrance to Seaforth Channel on Atholone Island, British Columbia. The grounding resulted in a breach of a portion of the Nathan E. Stewart’s fuel tanks causing a discharge of diesel fuel into the water. The United States Coast Guard and the National Transportation Safety Board designated the Company as a party of interest in their investigation as to the cause of the incident. The Canadian authorities including Transport Canada and the Canadian Transportation Safety Board investigated the cause of the incident. On October 10, 2018, the Heiltsuk First Nation filed a civil action in the British Columbia Supreme Court against a subsidiary of the Company, the master and pilot of the tug, the vessels and the Canadian government seeking unquantified damages as a result of the incident. On May 1, 2019, the Company filed a limitation action in the Federal Court of Canada seeking limitation of liability relating to the incident as provided under admiralty law. The Heiltsuk First Nation’s civil claim has been consolidated into the Federal Court limitation action as of July 26, 2019 and it is expected that the Federal Court of Canada will decide all claims against the Company. The Company is unable to estimate the potential exposure in the civil proceeding. The Company has various insurance policies covering liabilities including pollution, property, marine and general liability and believes that it has satisfactory insurance coverage for the cost of cleanup and salvage operations as well as other potential liabilities arising from the incident. The Company believes its accrual of such estimated liability is adequate for the incident and does not expect the incident to have a material adverse effect on its business or financial condition. In addition, the Company is involved in various legal and other proceedings which are incidental to the conduct of its business, none of which in the opinion of management will have a material effect on the Company’s financial condition, results of operations, or cash flows. Management believes its accrual of such estimated liability is adequate and believes that it has adequate insurance coverage or has meritorious defenses for these other claims and contingencies. The Company has issued guaranties or obtained standby letters of credit and performance bonds supporting performance by the Company and its subsidiaries of contractual or contingent legal obligations of the Company and its subsidiaries incurred in the ordinary course of business. The aggregate notional value of these instruments is $ 32.8 million at March 31, 2025, including $ 11.6 million in letters of credit and $ 21.1 million in performance bonds. All of these instruments have an expiration date within two years . The Company does not believe demand for payment under these instruments is likely and expects no material cash outlays to occur regarding these instruments. 13