KIRBY CORP 10-Q

Item 1. Financial Statements KIRBY CORPORATION AND CONSOLIDATED SUBSIDIARIES CONDENSED BALANCE SHEETS (Unaudited) June 30, 2025 December 31, 2024 ($ in thousands) ASSETS Current assets: Cash and cash equivalents $ 68,383 $ 74,444 Accounts receivable: Trade – less allowance for doubtful accounts 564,233 489,857 Other 62,221 46,888 Inventories – net 426,265 393,898 Prepaid expenses and other current assets 63,931 63,472 Total current assets 1,185,033 1,068,559 Property and equipment 6,327,529 6,123,208 Accumulated depreciation ( 2,192,479 ) ( 2,100,242 ) Property and equipment – net 4,135,050 4,022,966 Operating lease right-of-use assets 157,041 158,990 Goodwill 438,748 438,748 Other intangibles, net 33,123 34,406 Other assets 130,970 128,283 Total assets $ 6,079,965 $ 5,851,952 LIABILITIES AND STOCKHOLDERS’ EQUITY Current liabilities: Bank notes payable $ 6,433 $ 8,226 Income taxes payable 778 25,417 Accounts payable 250,055 251,354 Accrued liabilities 203,523 236,813 Current portion of operating lease liabilities 37,985 35,727 Deferred revenues 180,683 177,216 Total current liabilities 679,457 734,753 Long-term debt, net – less current portion 1,111,332 866,722 Deferred income taxes 747,060 739,472 Operating lease liabilities – less current portion 142,105 148,170 Other long-term liabilities 10,121 9,587 Total long-term liabilities 2,010,618 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 867,143 868,763 Accumulated other comprehensive income – net 65,612 71,192 Retained earnings 3,148,635 2,978,372 Treasury stock – at cost, 9.4 million shares at June 30, 2025 and 8.2 million at December 31, 2024 ( 699,867 ) ( 573,061 ) Total Kirby stockholders’ equity 3,388,070 3,351,813 Noncontrolling interests 1,820 1,435 Total equity 3,389,890 3,353,248 Total liabilities and equity $ 6,079,965 $ 5,851,952 See accompanying notes to condensed financial statements. 2 KIRBY CORPORATION AND CONSOLIDATED SUBSIDIARIES CONDENSED STATEMENTS OF EARNINGS (Unaudited) Three Months Ended June 30, Six Months Ended June 30, 2025 2024 2025 2024 ($ in thousands, except per share amounts) Revenues: Marine transportation $ 492,562 $ 484,808 $ 968,711 $ 960,220 Distribution and services 362,893 339,582 672,403 672,192 Total revenues 855,455 824,390 1,641,114 1,632,412 Costs and expenses: Costs of sales and operating expenses 563,238 554,232 1,075,574 1,104,913 Selling, general and administrative 85,846 80,383 181,133 170,589 Taxes, other than on income 10,542 10,310 19,372 18,354 Depreciation and amortization 65,670 59,482 129,400 117,124 Gain on disposition of assets ( 1,687 ) ( 515 ) ( 1,757 ) ( 589 ) Total costs and expenses 723,609 703,892 1,403,722 1,410,391 Operating income 131,846 120,498 237,392 222,021 Other income 4,812 3,088 10,146 6,357 Interest expense ( 12,730 ) ( 12,819 ) ( 23,267 ) ( 25,970 ) Earnings before taxes on income 123,928 110,767 224,271 202,408 Provision for taxes on income ( 29,550 ) ( 26,785 ) ( 53,623 ) ( 48,511 ) Net earnings 94,378 83,982 170,648 153,897 Net (earnings) loss attributable to noncontrolling interests ( 101 ) ( 128 ) ( 385 ) 25 Net earnings attributable to Kirby $ 94,277 $ 83,854 $ 170,263 $ 153,922 Net earnings per share attributable to Kirby common stockholders: Basic $ 1.68 $ 1.44 $ 3.01 $ 2.64 Diluted $ 1.67 $ 1.43 $ 2.99 $ 2.62 See accompanying notes to condensed financial statements. 3 KIRBY CORPORATION AND CONSOLIDATED SUBSIDIARIES CONDENSED STATEMENTS OF COMPREHENSIVE INCOME (Unaudited) Three Months Ended June 30, Six Months Ended June 30, 2025 2024 2025 2024 ($ in thousands) Net earnings $ 94,378 $ 83,982 $ 170,648 $ 153,897 Other comprehensive income (loss), net of taxes: Pension and postretirement benefits ( 4,199 ) 986 ( 6,066 ) 591 Foreign currency translation adjustments 178 ( 473 ) 486 ( 473 ) Total other comprehensive income (loss), net of taxes ( 4,021 ) 513 ( 5,580 ) 118 Total comprehensive income, net of taxes 90,357 84,495 165,068 154,015 Net (earnings) loss attributable to noncontrolling interests ( 101 ) ( 128 ) ( 385 ) 25 Comprehensive income attributable to Kirby $ 90,256 $ 84,367 $ 164,683 $ 154,040 See accompanying notes to condensed financial statements. 4 KIRBY CORPORATION AND CONSOLIDATED SUBSIDIARIES CONDENSED STATEMENTS OF CASH FLOWS (Unaudited) Six Months Ended June 30, 2025 2024 ($ in thousands) Cash flows from operating activities: Net earnings $ 170,648 $ 153,897 Adjustments to reconcile net earnings to net cash provided by operations: Depreciation and amortization 129,400 117,124 Provision for deferred income taxes 9,617 23,926 Amortization of share-based compensation 11,147 9,399 Amortization of major maintenance costs 14,635 16,755 Other 178 915 Decrease in cash flows resulting from changes in operating assets and liabilities, net ( 205,162 ) ( 19,409 ) Net cash provided by operating activities 130,463 302,607 Cash flows from investing activities: Capital expenditures ( 150,160 ) ( 169,607 ) Acquisitions of businesses and marine equipment ( 97,250 ) ( 65,232 ) Proceeds from disposition of assets 11,580 9,054 Other ( 3,000 ) — Net cash used in investing activities ( 238,830 ) ( 225,785 ) Cash flows from financing activities: Borrowings on bank credit facilities, net 243,207 30,902 Payment of debt issuance costs — ( 3 ) Proceeds from exercise of stock options 262 4,096 Payments related to tax withholding for share-based compensation ( 5,957 ) ( 5,339 ) Treasury stock purchases ( 132,673 ) ( 85,466 ) Other ( 2,533 ) ( 49 ) Net cash provided by (used in) financing activities 102,306 ( 55,859 ) Increase (decrease) in cash and cash equivalents ( 6,061 ) 20,963 Cash and cash equivalents, beginning of year 74,444 32,577 Cash and cash equivalents, end of period $ 68,383 $ 53,540 Supplemental disclosures of cash flow information: Cash paid during the period: Interest paid $ 22,917 $ 26,243 Income taxes paid, net $ 79,742 $ 14,391 Operating cash outflow from operating leases $ 24,541 $ 22,980 Non-cash investing activity: Capital expenditures included in accounts payable $ ( 410 ) $ ( 2,015 ) Right-of-use assets obtained in exchange for lease obligations $ 13,704 $ 21,045 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 March 31, 2025 65,472 $ 6,547 $ 865,007 $ 69,633 $ 3,054,358 ( 9,104 ) $ ( 669,510 ) $ 1,719 $ 3,327,754 Issuance of stock for equity awards, net of forfeitures — — ( 1,164 ) — — 16 1,164 — — Tax withholdings on equity award vesting — — — — — — ( 7 ) — ( 7 ) Amortization of share-based compensation — — 3,300 — — — — — 3,300 Treasury stock purchases — — — — — ( 332 ) ( 31,200 ) — ( 31,200 ) Excise taxes on treasury stock purchases — — — — — — ( 314 ) — ( 314 ) Total comprehensive income, net of taxes — — — ( 4,021 ) 94,277 — — 101 90,357 Balance at June 30, 2025 65,472 $ 6,547 $ 867,143 $ 65,612 $ 3,148,635 ( 9,420 ) $ ( 699,867 ) $ 1,820 $ 3,389,890 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 March 31, 2024 65,472 $ 6,547 $ 859,150 $ 34,611 $ 2,761,733 ( 7,199 ) $ ( 446,393 ) $ 1,093 $ 3,216,741 Stock option exercises — — 1,115 — — 35 1,470 — 2,585 Issuance of stock for equity awards, net of forfeitures — — ( 998 ) — — 17 998 — — Tax withholdings on equity award vesting — — — — — ( 1 ) ( 55 ) — ( 55 ) Amortization of share-based compensation — — 2,991 — — — — — 2,991 Treasury stock purchases — — — — — ( 372 ) ( 43,679 ) — ( 43,679 ) Excise taxes on treasury stock purchases — — — — — — ( 400 ) — ( 400 ) Total comprehensive income, net of taxes — — — 513 83,854 — — 128 84,495 Balance at June 30, 2024 65,472 $ 6,547 $ 862,258 $ 35,124 $ 2,845,587 ( 7,520 ) $ ( 488,059 ) $ 1,221 $ 3,262,678 See accompanying notes to condensed financial statements. 6 KIRBY CORPORATION AND CONSOLIDATED SUBSIDIARIES CONDENSED STATEMENTS OF STOCKHOLDERS’ EQUITY (Unaudited) Additional Accumulated 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 — — ( 12,794 ) — — 181 12,794 — — Tax withholdings on equity award vesting — — — — — ( 55 ) ( 5,957 ) — ( 5,957 ) Amortization of share-based compensation — — 11,147 — — — — — 11,147 Treasury stock purchases — — — — — ( 1,335 ) ( 132,673 ) — ( 132,673 ) Excise taxes on treasury stock purchases — — — — — — ( 1,205 ) — ( 1,205 ) Total comprehensive income, net of taxes — — — ( 5,580 ) 170,263 — — 385 165,068 Balance at June 30, 2025 65,472 $ 6,547 $ 867,143 $ 65,612 $ 3,148,635 ( 9,420 ) $ ( 699,867 ) $ 1,820 $ 3,389,890 Additional Accumulated 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 — — 1,434 — — 54 2,662 — 4,096 Issuance of stock for equity awards, net of forfeitures — — ( 12,538 ) — — 207 12,538 — — Tax withholdings on equity award vesting — — — — — ( 67 ) ( 5,339 ) — ( 5,339 ) Amortization of share-based compensation — — 9,399 — — — — — 9,399 Treasury stock purchases — — — — — ( 871 ) ( 85,466 ) — ( 85,466 ) Excise taxes on treasury stock purchases — — — — — — ( 704 ) — ( 704 ) Total comprehensive income, net of taxes — — — 118 153,922 — — ( 25 ) 154,015 Balance at June 30, 2024 65,472 $ 6,547 $ 862,258 $ 35,124 $ 2,845,587 ( 7,520 ) $ ( 488,059 ) $ 1,221 $ 3,262,678 See accompanying notes to condensed financial statements. 7 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 June 30, Six Months Ended June 30, 2025 2024 2025 2024 Marine transportation segment: Inland transportation $ 397,141 $ 391,835 $ 789,640 $ 777,842 Coastal transportation 95,421 92,973 179,071 182,378 $ 492,562 $ 484,808 $ 968,711 $ 960,220 Distribution and services segment: Commercial and industrial $ 173,606 $ 165,658 $ 333,834 $ 308,282 Power generation 140,739 107,783 245,241 243,452 Oil and gas 48,548 66,141 93,328 120,458 $ 362,893 $ 339,582 $ 672,403 $ 672,192 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 six months ended June 30, 2025 and 2024 that were included in the opening contract liability balances were $ 94.7 million and $ 81.5 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 June 30, 2025 or December 31, 2024 . 8 (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 $ 11.3 million and $ 22.5 million for the three months and six months ended June 30, 2025, respectively, and $ 7.5 million and $ 14.1 million for the three months and six months ended June 30, 2024, respectively, as well as the related intersegment profit of $ 1.1 million and $ 2.2 million for the three months and six months ended June 30, 2025, respectively, and $ 0.7 million and $ 1.4 million for the three months and six months ended June 30, 2024, respectively, 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 June 30, 2025 2024 KMT KDS Total KMT KDS Total Revenue from external customers $ 492,562 $ 362,893 $ 855,455 $ 484,808 $ 339,582 $ 824,390 Less: Costs of sales and operating expenses 298,789 264,331 563,120 299,975 253,742 553,717 Administrative payroll expense 18,378 23,206 41,584 17,743 21,454 39,197 Taxes, other than on income 8,124 2,391 10,515 8,383 1,900 10,283 Depreciation and amortization 53,182 10,682 63,864 49,047 8,585 57,632 Other segment items (a) 15,037 26,848 41,885 14,784 24,465 39,249 Segment operating income $ 99,052 $ 35,435 $ 134,487 $ 94,876 $ 29,436 $ 124,312 Reconciliation of segment operating income Unallocated amounts: General corporate expenses ( 4,328 ) ( 4,329 ) Gain on disposition of assets 1,687 515 Operating income $ 131,846 $ 120,498 Other income 4,812 3,088 Interest expense ( 12,730 ) ( 12,819 ) Earnings before taxes on income $ 123,928 $ 110,767 9 Six Months Ended June 30, 2025 2024 KMT KDS Total KMT KDS Total Revenue from external customers $ 968,711 $ 672,403 $ 1,641,114 $ 960,220 $ 672,192 $ 1,632,412 Less: Costs of sales and operating expenses 589,776 486,559 1,076,335 601,237 503,145 1,104,382 Administrative payroll expense 39,608 48,142 87,750 39,276 45,107 84,383 Taxes, other than on income 14,576 4,744 19,320 14,580 3,728 18,308 Depreciation and amortization 104,854 21,001 125,855 96,896 16,429 113,325 Other segment items (a) 34,261 53,931 88,192 30,372 52,333 82,705 Segment operating income $ 185,636 $ 58,026 $ 243,662 $ 177,859 $ 51,450 $ 229,309 Reconciliation of segment operating income Unallocated amounts: General corporate expenses ( 8,027 ) ( 7,877 ) Gain on disposition of assets 1,757 589 Operating income $ 237,392 $ 222,021 Other income 10,146 6,357 Interest expense ( 23,267 ) ( 25,970 ) Earnings before taxes on income $ 224,271 $ 202,408 (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. June 30, 2025 December 31, 2024 Total assets: Marine transportation $ 4,703,152 $ 4,578,616 Distribution and services 1,212,371 1,115,781 Other 164,442 157,555 $ 6,079,965 $ 5,851,952 The following table presents the details of “Other” total assets (in thousands): June 30, 2025 December 31, 2024 General corporate assets $ 161,505 $ 154,655 Investment in affiliates 2,937 2,900 $ 164,442 $ 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): June 30, 2025 December 31, 2024 Carrying Value Fair Value Carrying Value Fair Value Revolving Credit Facility due July 29, 2027 (a) $ 245,000 $ 245,000 $ — $ — Term Loan due July 29, 2027 (a) 70,000 70,000 70,000 70,000 4.2 % senior notes due March 1, 2028 500,000 502,539 500,000 491,923 3.46 % senior notes due January 19, 2033 60,000 54,459 60,000 52,956 3.51 % senior notes due January 19, 2033 240,000 218,629 240,000 212,650 Credit line due June 30, 2026 — — — — Bank notes payable 6,433 6,433 8,226 8,226 1,121,433 1,097,060 878,226 835,755 Unamortized debt discounts and issuance costs ( 3,668 ) — ( 3,278 ) — $ 1,117,765 $ 1,097,060 $ 874,948 $ 835,755 (a) Variable interest rate o f 5.6 % at June 30, 2025 and December 31, 2024 . 10 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 $ 255.0 million as of June 30, 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 June 30, 2025 . (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): June 30, 2025 December 31, 2024 2025 $ 23,184 $ 42,202 2026 41,987 38,115 2027 32,511 30,263 2028 24,561 22,860 2029 14,200 12,483 Thereafter 79,452 76,621 Total lease payments 215,895 222,544 Less: imputed interest ( 35,805 ) ( 38,647 ) Operating lease liabilities $ 180,090 $ 183,897 The following table summarizes lease costs (in thousands): Three Months Ended June 30, Six Months Ended June 30, 2025 2024 2025 2024 Operating lease cost $ 11,958 $ 11,599 $ 23,943 $ 22,880 Variable lease cost ( 309 ) 578 ( 324 ) 1,071 Short-term lease cost 11,013 8,809 21,688 18,988 Sublease income ( 1,011 ) ( 830 ) ( 1,871 ) ( 1,684 ) $ 21,651 $ 20,156 $ 43,436 $ 41,255 The following table summarizes other supplemental information about the Company’s operating leases: June 30, 2025 December 31, 2024 Weighted average discount rate 4.6 % 4.6 % Weighted average remaining lease term 8 years 8 years 11 (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 June 30, Six Months Ended June 30, 2025 2024 2025 2024 Compensation cost $ 3,300 $ 2,991 $ 11,147 $ 9,399 Income tax benefit $ 781 $ 737 $ 2,664 $ 2,256 During the six months ended June 30, 2025, the Company grant ed 131,190 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. (8) Taxes on Income Earnings (loss) before taxes on income and details of the provision (benefit) for taxes on income were as follows (in thousands): Three Months Ended June 30, Six Months Ended June 30, 2025 2024 2025 2024 Earnings (loss) before taxes on income: United States $ 124,387 $ 111,091 $ 224,961 $ 202,745 Foreign ( 459 ) ( 324 ) ( 690 ) ( 337 ) $ 123,928 $ 110,767 $ 224,271 $ 202,408 Provision (benefit) for taxes on income: Federal: Current $ 19,642 $ 9,337 $ 37,808 $ 19,956 Deferred 6,939 14,196 8,484 22,278 State and local: Current 2,861 2,935 6,198 4,557 Deferred 108 319 1,133 1,648 Foreign - current — ( 2 ) — 72 $ 29,550 $ 26,785 $ 53,623 $ 48,511 On July 4, 2025, the One Big Beautiful Bill Act (“OBBBA”) was signed into law. This legislation includes changes to U.S. federal tax law, which may be subject to further clarification and the issuance of interpretive guidance. The Company is assessing the legislation and its effect on its consolidated financial statements, which it expects to begin reflecting in the three months ended September 30, 2025. 12 (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 June 30, Six Months Ended June 30, 2025 2024 2025 2024 Net earnings attributable to Kirby $ 94,277 $ 83,854 $ 170,263 $ 153,922 Undistributed earnings allocated to restricted shares ( 17 ) ( 13 ) ( 15 ) ( 13 ) Earnings available to Kirby common stockholders – basic 94,260 83,841 170,248 153,909 Undistributed earnings allocated to restricted shares 17 13 15 13 Undistributed earnings reallocated to restricted shares ( 17 ) ( 13 ) ( 15 ) ( 13 ) Earnings available to Kirby common stockholders – diluted $ 94,260 $ 83,841 $ 170,248 $ 153,909 Shares outstanding: Weighted average common stock issued and outstanding 56,115 58,190 56,525 58,329 Weighted average unvested restricted stock ( 10 ) ( 9 ) ( 5 ) ( 5 ) Weighted average common stock outstanding – basic 56,105 58,181 56,520 58,324 Dilutive effect of stock options and restricted stock units 332 411 349 379 Weighted average common stock outstanding – diluted 56,437 58,592 56,869 58,703 Net earnings per share attributable to Kirby common stockholders: Basic $ 1.68 $ 1.44 $ 3.01 $ 2.64 Diluted $ 1.67 $ 1.43 $ 2.99 $ 2.62 There were no antidilutive stock options as of June 30, 2025 and 2024 . There were no antidilutive RSUs as of June 30, 2025 and 2024 . (10) Inventories The following table presents the details of inventories – net (in thousands): June 30, 2025 December 31, 2024 Finished goods $ 334,196 $ 328,540 Work in process 92,069 65,358 $ 426,265 $ 393,898 (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. 13 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 $ 0.5 million to the Higman pension plan during the six months ended June 30, 2025 . The Company expects to make additional contributions of $ 0.7 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 June 30, Three Months Ended June 30, 2025 2024 2025 2024 Components of net periodic benefit cost: Service cost $ 878 $ 823 $ — $ — Interest cost 4,608 4,267 10 9 Expected return on plan assets ( 6,812 ) ( 6,224 ) — — Amortization of actuarial (gain) loss ( 2,067 ) ( 692 ) 7 8 Net periodic benefit cost $ ( 3,393 ) $ ( 1,826 ) $ 17 $ 17 Pension Benefits Pension Plans SERP Six Months Ended June 30, Six Months Ended June 30, 2025 2024 2025 2024 Components of net periodic benefit cost: Service cost $ 1,483 $ 1,697 $ — $ — Interest cost 9,095 8,590 20 19 Expected return on plan assets ( 13,621 ) ( 12,442 ) — — Amortization of actuarial (gain) loss ( 4,501 ) ( 1,165 ) 14 16 Net periodic benefit cost $ ( 7,544 ) $ ( 3,320 ) $ 34 $ 35 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 June 30, Six Months Ended June 30, 2025 2024 2025 2024 Components of net periodic benefit cost: Interest cost $ 6 $ 5 $ 11 $ 10 Amortization of actuarial gain ( 66 ) ( 70 ) ( 131 ) ( 140 ) Net periodic benefit cost $ ( 60 ) $ ( 65 ) $ ( 120 ) $ ( 130 ) 14 (12) Other Comprehensive Income The Company’s changes in other comprehensive income (loss) were as follows (in thousands): Three Months Ended June 30, 2025 2024 Gross Amount Income Tax Benefit Net Amount Gross Amount Income Tax (Provision) Benefit Net Amount Pension and postretirement benefits (a): Amortization of net actuarial gain $ ( 2,126 ) $ 533 $ ( 1,593 ) $ ( 754 ) $ 189 $ ( 565 ) Actuarial gains (losses) ( 3,477 ) 871 ( 2,606 ) 2,069 ( 518 ) 1,551 Foreign currency translation 178 — 178 ( 473 ) — ( 473 ) Total $ ( 5,425 ) $ 1,404 $ ( 4,021 ) $ 842 $ ( 329 ) $ 513 Six Months Ended June 30, 2025 2024 Gross Amount Income Tax Benefit Net Amount Gross Amount Income Tax (Provision) Benefit Net Amount Pension and postretirement benefits (a): Amortization of net actuarial gain $ ( 4,618 ) $ 1,158 $ ( 3,460 ) $ ( 1,289 ) $ 329 $ ( 960 ) Actuarial gains (losses) ( 3,477 ) 871 ( 2,606 ) 2,069 ( 518 ) 1,551 Foreign currency translation 486 — 486 ( 473 ) — ( 473 ) Total $ ( 7,609 ) $ 2,029 $ ( 5,580 ) $ 307 $ ( 189 ) $ 118 (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 $ 27.4 million at June 30, 2025, including $ 11.6 million in letters of credit and $ 15.8 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. 15