KIRBY CORP 10-Q

Item 1. Financial Statements KIRBY CORPORATION AND CONSOLIDATED SUBSIDIARIES CONDENSED BALANCE SHEETS (Unaudited) September 30, 2025 December 31, 2024 ($ in thousands) ASSETS Current assets: Cash and cash equivalents $ 47,025 $ 74,444 Accounts receivable: Trade – less allowance for doubtful accounts 524,072 489,857 Other 95,895 46,888 Inventories – net 423,976 393,898 Prepaid expenses and other current assets 68,863 63,472 Total current assets 1,159,831 1,068,559 Property and equipment 6,360,383 6,123,208 Accumulated depreciation ( 2,238,318 ) ( 2,100,242 ) Property and equipment – net 4,122,065 4,022,966 Operating lease right-of-use assets 181,407 158,990 Goodwill 438,748 438,748 Other intangibles, net 30,956 34,406 Other assets 130,552 128,283 Total assets $ 6,063,559 $ 5,851,952 LIABILITIES AND STOCKHOLDERS’ EQUITY Current liabilities: Bank notes payable $ 7,283 $ 8,226 Income taxes payable 587 25,417 Accounts payable 222,688 251,354 Accrued liabilities 219,581 236,813 Current portion of operating lease liabilities 44,322 35,727 Deferred revenues 189,309 177,216 Total current liabilities 683,770 734,753 Long-term debt, net – less current portion 1,041,632 866,722 Deferred income taxes 805,006 739,472 Operating lease liabilities – less current portion 159,261 148,170 Other long-term liabilities 10,649 9,587 Total long-term liabilities 2,016,548 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 870,520 868,763 Accumulated other comprehensive income – net 63,988 71,192 Retained earnings 3,241,131 2,978,372 Treasury stock – at cost, 10.7 million shares at September 30, 2025 and 8.2 million at December 31, 2024 ( 821,007 ) ( 573,061 ) Total Kirby stockholders’ equity 3,361,179 3,351,813 Noncontrolling interests 2,062 1,435 Total equity 3,363,241 3,353,248 Total liabilities and equity $ 6,063,559 $ 5,851,952 See accompanying notes to condensed financial statements. 2 KIRBY CORPORATION AND CONSOLIDATED SUBSIDIARIES CONDENSED STATEMENTS OF EARNINGS (Unaudited) Three Months Ended September 30, Nine Months Ended September 30, 2025 2024 2025 2024 ($ in thousands, except per share amounts) Revenues: Marine transportation $ 484,941 $ 486,054 $ 1,453,652 $ 1,446,274 Distribution and services 386,220 345,095 1,058,623 1,017,287 Total revenues 871,161 831,149 2,512,275 2,463,561 Costs and expenses: Costs of sales and operating expenses 580,491 552,091 1,656,065 1,657,004 Selling, general and administrative 87,812 84,119 268,945 254,708 Taxes, other than on income 9,768 8,973 29,140 27,327 Depreciation and amortization 66,873 60,653 196,273 177,777 Gain on disposition of assets ( 3,002 ) ( 1,617 ) ( 4,759 ) ( 2,206 ) Total costs and expenses 741,942 704,219 2,145,664 2,114,610 Operating income 129,219 126,930 366,611 348,951 Other income 5,557 2,949 15,703 9,306 Interest expense ( 11,838 ) ( 12,498 ) ( 35,105 ) ( 38,468 ) Earnings before taxes on income 122,938 117,381 347,209 319,789 Provision for taxes on income ( 30,200 ) ( 27,350 ) ( 83,823 ) ( 75,861 ) Net earnings 92,738 90,031 263,386 243,928 Net earnings attributable to noncontrolling interests ( 242 ) ( 63 ) ( 627 ) ( 38 ) Net earnings attributable to Kirby $ 92,496 $ 89,968 $ 262,759 $ 243,890 Net earnings per share attributable to Kirby common stockholders: Basic $ 1.66 $ 1.56 $ 4.67 $ 4.20 Diluted $ 1.65 $ 1.55 $ 4.64 $ 4.17 See accompanying notes to condensed financial statements. 3 KIRBY CORPORATION AND CONSOLIDATED SUBSIDIARIES CONDENSED STATEMENTS OF COMPREHENSIVE INCOME (Unaudited) Three Months Ended September 30, Nine Months Ended September 30, 2025 2024 2025 2024 ($ in thousands) Net earnings $ 92,738 $ 90,031 $ 263,386 $ 243,928 Other comprehensive loss, net of taxes: Pension and postretirement benefits ( 1,732 ) ( 484 ) ( 7,798 ) 107 Foreign currency translation adjustments 108 ( 22 ) 594 ( 495 ) Total other comprehensive loss, net of taxes ( 1,624 ) ( 506 ) ( 7,204 ) ( 388 ) Total comprehensive income, net of taxes 91,114 89,525 256,182 243,540 Net earnings attributable to noncontrolling interests ( 242 ) ( 63 ) ( 627 ) ( 38 ) Comprehensive income attributable to Kirby $ 90,872 $ 89,462 $ 255,555 $ 243,502 See accompanying notes to condensed financial statements. 4 KIRBY CORPORATION AND CONSOLIDATED SUBSIDIARIES CONDENSED STATEMENTS OF CASH FLOWS (Unaudited) Nine Months Ended September 30, 2025 2024 ($ in thousands) Cash flows from operating activities: Net earnings $ 263,386 $ 243,928 Adjustments to reconcile net earnings to net cash provided by operations: Depreciation and amortization 196,273 177,777 Provision for deferred income taxes 68,142 38,698 Amortization of share-based compensation 14,567 12,837 Amortization of major maintenance costs 22,354 24,965 Other ( 3,454 ) ( 126 ) Increase (decrease) in cash flows resulting from changes in operating assets and liabilities, net ( 203,274 ) 11,031 Net cash provided by operating activities 357,994 509,110 Cash flows from investing activities: Capital expenditures ( 217,440 ) ( 245,990 ) Acquisitions of businesses and marine equipment ( 106,450 ) ( 65,232 ) Proceeds from disposition of assets 28,334 13,832 Other ( 3,000 ) — Net cash used in investing activities ( 298,556 ) ( 297,390 ) Cash flows from financing activities: Borrowings (payments) on bank credit facilities, net 174,057 ( 38,893 ) Payment of debt issuance costs — ( 3 ) Proceeds from exercise of stock options 262 8,375 Payments related to tax withholding for share-based compensation ( 5,977 ) ( 5,356 ) Treasury stock purchases ( 252,638 ) ( 141,272 ) Other ( 2,561 ) ( 75 ) Net cash used in financing activities ( 86,857 ) ( 177,224 ) Increase (decrease) in cash and cash equivalents ( 27,419 ) 34,496 Cash and cash equivalents, beginning of year 74,444 32,577 Cash and cash equivalents, end of period $ 47,025 $ 67,073 Supplemental disclosures of cash flow information: Cash paid during the period: Interest paid $ 42,787 $ 46,600 Income taxes paid, net $ 80,966 $ 15,476 Operating cash outflow from operating leases $ 38,175 $ 34,898 Non-cash investing activity: Capital expenditures included in accounts payable $ 10,564 $ 1,729 Right-of-use assets obtained in exchange for lease obligations $ 50,811 $ 38,730 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 June 30, 2025 65,472 $ 6,547 $ 867,143 $ 65,612 $ 3,148,635 ( 9,420 ) $ ( 699,867 ) $ 1,820 $ 3,389,890 Issuance of stock for equity awards, net of forfeitures — — ( 43 ) — — — 43 — — Tax withholdings on equity award vesting — — — — — — ( 20 ) — ( 20 ) Amortization of share-based compensation — — 3,420 — — — — — 3,420 Treasury stock purchases — — — — — ( 1,314 ) ( 119,965 ) — ( 119,965 ) Excise taxes on treasury stock purchases — — — — — — ( 1,198 ) — ( 1,198 ) Total comprehensive income, net of taxes — — — ( 1,624 ) 92,496 — — 242 91,114 Balance at September 30, 2025 65,472 $ 6,547 $ 870,520 $ 63,988 $ 3,241,131 ( 10,734 ) $ ( 821,007 ) $ 2,062 $ 3,363,241 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 June 30, 2024 65,472 $ 6,547 $ 862,258 $ 35,124 $ 2,845,587 ( 7,520 ) $ ( 488,059 ) $ 1,221 $ 3,262,678 Stock option exercises — — 316 — — 59 3,964 — 4,280 Issuance of stock for equity awards, net of forfeitures — — ( 39 ) — — 1 39 — — Tax withholdings on equity award vesting — — — — — ( 1 ) ( 17 ) — ( 17 ) Amortization of share-based compensation — — 3,438 — — — — — 3,438 Treasury stock purchases — — — — — ( 483 ) ( 55,806 ) — ( 55,806 ) Excise taxes on treasury stock purchases — — — — — — ( 488 ) — ( 488 ) Total comprehensive income, net of taxes — — — ( 506 ) 89,968 — — 63 89,525 Balance at September 30, 2024 65,472 $ 6,547 $ 865,973 $ 34,618 $ 2,935,555 ( 7,944 ) $ ( 540,367 ) $ 1,284 $ 3,303,610 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 — — ( 12,837 ) — — 181 12,837 — — Tax withholdings on equity award vesting — — — — — ( 55 ) ( 5,977 ) — ( 5,977 ) Amortization of share-based compensation — — 14,567 — — — — — 14,567 Treasury stock purchases — — — — — ( 2,649 ) ( 252,638 ) — ( 252,638 ) Excise taxes on treasury stock purchases — — — — — — ( 2,403 ) — ( 2,403 ) Total comprehensive income, net of taxes — — — ( 7,204 ) 262,759 — — 627 256,182 Balance at September 30, 2025 65,472 $ 6,547 $ 870,520 $ 63,988 $ 3,241,131 ( 10,734 ) $ ( 821,007 ) $ 2,062 $ 3,363,241 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 — — 1,750 — — 113 6,625 — 8,375 Issuance of stock for equity awards, net of forfeitures — — ( 12,577 ) — — 208 12,577 — — Tax withholdings on equity award vesting — — — — — ( 68 ) ( 5,356 ) — ( 5,356 ) Amortization of share-based compensation — — 12,837 — — — — — 12,837 Treasury stock purchases — — — — — ( 1,354 ) ( 141,272 ) — ( 141,272 ) Excise taxes on treasury stock purchases — — — — — — ( 1,191 ) — ( 1,191 ) Total comprehensive income, net of taxes — — — ( 388 ) 243,890 — — 38 243,540 Balance at September 30, 2024 65,472 $ 6,547 $ 865,973 $ 34,618 $ 2,935,555 ( 7,944 ) $ ( 540,367 ) $ 1,284 $ 3,303,610 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 August 7, 2025, the Company purchased two inland tank barges and one towboat from an undisclosed seller for $ 9.2 million in cash. 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 September 30, Nine Months Ended September 30, 2025 2024 2025 2024 Marine transportation segment: Inland transportation $ 379,329 $ 392,617 $ 1,168,969 $ 1,170,459 Coastal transportation 105,612 93,437 284,683 275,815 $ 484,941 $ 486,054 $ 1,453,652 $ 1,446,274 Distribution and services segment: Commercial and industrial $ 168,079 $ 162,285 $ 501,913 $ 470,567 Power generation 173,916 111,573 419,157 355,025 Oil and gas 44,225 71,237 137,553 191,695 $ 386,220 $ 345,095 $ 1,058,623 $ 1,017,287 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 nine months ended September 30, 2025 and 2024 that were included in the opening contract liability balances were $ 112.8 million and $ 101.8 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 September 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 $ 5.6 million and $ 28.1 million for the three months and nine months ended September 30, 2025, respectively, and $ 5.0 million and $ 19.1 million for the three months and nine months ended September 30, 2024, respectively, as well as the related intersegment profit of $ 0.6 million and $ 2.8 million for the three months and nine months ended September 30, 2025, respectively, and $ 0.5 million and $ 1.9 million for the three months and nine months ended September 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 September 30, 2025 2024 KMT KDS Total KMT KDS Total Revenue from external customers $ 484,941 $ 386,220 $ 871,161 $ 486,054 $ 345,095 $ 831,149 Less: Costs of sales and operating expenses 300,021 280,049 580,070 296,114 255,835 551,949 Administrative payroll expense 19,141 23,617 42,758 18,502 21,734 40,236 Taxes, other than on income 7,266 2,472 9,738 6,524 2,414 8,938 Depreciation and amortization 54,100 10,949 65,049 49,876 8,921 58,797 Other segment items (a) 15,844 26,464 42,308 15,562 25,813 41,375 Segment operating income $ 88,569 $ 42,669 $ 131,238 $ 99,476 $ 30,378 $ 129,854 Reconciliation of segment operating income Unallocated amounts: General corporate expenses ( 5,021 ) ( 4,541 ) Gain on disposition of assets 3,002 1,617 Operating income $ 129,219 $ 126,930 Other income 5,557 2,949 Interest expense ( 11,838 ) ( 12,498 ) Earnings before taxes on income $ 122,938 $ 117,381 9 Nine Months Ended September 30, 2025 2024 KMT KDS Total KMT KDS Total Revenue from external customers $ 1,453,652 $ 1,058,623 $ 2,512,275 $ 1,446,274 $ 1,017,287 $ 2,463,561 Less: Costs of sales and operating expenses 889,797 766,608 1,656,405 897,351 758,980 1,656,331 Administrative payroll expense 58,749 71,759 130,508 57,778 66,841 124,619 Taxes, other than on income 21,842 7,216 29,058 21,104 6,142 27,246 Depreciation and amortization 158,954 31,950 190,904 146,772 25,350 172,122 Other segment items (a) 50,105 80,395 130,500 45,934 78,146 124,080 Segment operating income $ 274,205 $ 100,695 $ 374,900 $ 277,335 $ 81,828 $ 359,163 Reconciliation of segment operating income Unallocated amounts: General corporate expenses ( 13,048 ) ( 12,418 ) Gain on disposition of assets 4,759 2,206 Operating income $ 366,611 $ 348,951 Other income 15,703 9,306 Interest expense ( 35,105 ) ( 38,468 ) Earnings before taxes on income $ 347,209 $ 319,789 (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. September 30, 2025 December 31, 2024 Total assets: Marine transportation $ 4,707,146 $ 4,578,616 Distribution and services 1,182,524 1,115,781 Other 173,889 157,555 $ 6,063,559 $ 5,851,952 The following table presents the details of “Other” total assets (in thousands): September 30, 2025 December 31, 2024 General corporate assets $ 171,050 $ 154,655 Investment in affiliates 2,839 2,900 $ 173,889 $ 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): September 30, 2025 December 31, 2024 Carrying Value Fair Value Carrying Value Fair Value Revolving Credit Facility due July 29, 2027 (a) $ 175,000 $ 175,000 $ — $ — Term Loan due July 29, 2027 (a) 70,000 70,000 70,000 70,000 4.2 % senior notes due March 1, 2028 500,000 500,140 500,000 491,923 3.46 % senior notes due January 19, 2033 60,000 54,374 60,000 52,956 3.51 % senior notes due January 19, 2033 240,000 218,241 240,000 212,650 Credit line due June 30, 2026 — — — — Bank notes payable 7,283 7,283 8,226 8,226 1,052,283 1,025,038 878,226 835,755 Unamortized debt discounts and issuance costs ( 3,368 ) — ( 3,278 ) — $ 1,048,915 $ 1,025,038 $ 874,948 $ 835,755 (a) Variable interest rate o f 5.3 % at September 30, 2025 and 5.6 % at 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 $ 325.0 million as of September 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 September 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): September 30, 2025 December 31, 2024 2025 $ 13,201 $ 42,202 2026 50,935 38,115 2027 40,984 30,263 2028 30,062 22,860 2029 15,709 12,483 Thereafter 94,925 76,621 Total lease payments 245,816 222,544 Less: imputed interest ( 42,233 ) ( 38,647 ) Operating lease liabilities $ 203,583 $ 183,897 The following table summarizes lease costs (in thousands): Three Months Ended September 30, Nine Months Ended September 30, 2025 2024 2025 2024 Operating lease cost $ 13,093 $ 11,728 $ 37,036 $ 34,608 Variable lease cost 68 371 ( 256 ) 1,442 Short-term lease cost 10,098 9,515 31,786 28,503 Sublease income ( 949 ) ( 836 ) ( 2,820 ) ( 2,520 ) $ 22,310 $ 20,778 $ 65,746 $ 62,033 The following table summarizes other supplemental information about the Company’s operating leases: September 30, 2025 December 31, 2024 Weighted average discount rate 4.7 % 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 September 30, Nine Months Ended September 30, 2025 2024 2025 2024 Compensation cost $ 3,420 $ 3,438 $ 14,567 $ 12,837 Income tax benefit $ 847 $ 786 $ 3,511 $ 3,042 During the nine months ended September 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 September 30, Nine Months Ended September 30, 2025 2024 2025 2024 Earnings (loss) before taxes on income: United States $ 122,673 $ 117,520 $ 347,634 $ 320,265 Foreign 265 ( 139 ) ( 425 ) ( 476 ) $ 122,938 $ 117,381 $ 347,209 $ 319,789 Provision (benefit) for taxes on income: Federal: Current $ ( 28,579 ) $ 10,031 $ 9,229 $ 29,987 Deferred 54,486 13,547 62,970 35,825 State and local: Current 230 2,546 6,428 7,103 Deferred 4,039 1,225 5,172 2,873 Foreign - current 24 1 24 73 $ 30,200 $ 27,350 $ 83,823 $ 75,861 On July 4, 2025, the One Big Beautiful Bill Act (“OBBBA”) was signed into law. The legislation included several significant U.S. income tax provisions that will help reduce the Company’s U.S. federal cash tax payments for the remainder of 2025 and future years. These provisions include 100% bonus tax depreciation and domestic research and development cost expensing. The Company incorporated these provisions effective during the quarter, and they had no material impact on the operational results for the three and nine months ended September 30, 2025. At September 30, 2025, the Company had a federal income tax receivable of $ 39.7 million included in Accounts receivable – other on the balance sheet. 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 September 30, Nine Months Ended September 30, 2025 2024 2025 2024 Net earnings attributable to Kirby $ 92,496 $ 89,968 $ 262,759 $ 243,890 Undistributed earnings allocated to restricted shares ( 26 ) ( 24 ) ( 40 ) ( 36 ) Earnings available to Kirby common stockholders – basic 92,470 89,944 262,719 243,854 Undistributed earnings allocated to restricted shares 26 24 40 36 Undistributed earnings reallocated to restricted shares ( 26 ) ( 23 ) ( 40 ) ( 35 ) Earnings available to Kirby common stockholders – diluted $ 92,470 $ 89,945 $ 262,719 $ 243,855 Shares outstanding: Weighted average common stock issued and outstanding 55,641 57,767 56,221 58,138 Weighted average unvested restricted stock ( 15 ) ( 14 ) ( 9 ) ( 9 ) Weighted average common stock outstanding – basic 55,626 57,753 56,212 58,129 Dilutive effect of stock options and restricted stock units 344 433 348 397 Weighted average common stock outstanding – diluted 55,970 58,186 56,560 58,526 Net earnings per share attributable to Kirby common stockholders: Basic $ 1.66 $ 1.56 $ 4.67 $ 4.20 Diluted $ 1.65 $ 1.55 $ 4.64 $ 4.17 There were no antidilutive stock options as of September 30, 2025 and 2024 . There were no antidilutive RSUs as of September 30, 2025 and 2024 . (10) Inventories The following table presents the details of inventories – net (in thousands): September 30, 2025 December 31, 2024 Finished goods $ 340,415 $ 328,540 Work in process 83,561 65,358 $ 423,976 $ 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 $ 1.0 million to the Higman pension plan during the nine months ended September 30, 2025 . The Company expects to make additional contributions of $ 0.2 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 September 30, Three Months Ended September 30, 2025 2024 2025 2024 Components of net periodic benefit cost: Service cost $ 742 $ 850 $ — $ — Interest cost 4,547 4,294 10 10 Expected return on plan assets ( 6,811 ) ( 6,221 ) — — Amortization of actuarial (gain) loss ( 2,250 ) ( 584 ) 7 8 Net periodic benefit cost $ ( 3,772 ) $ ( 1,661 ) $ 17 $ 18 Pension Benefits Pension Plans SERP Nine Months Ended September 30, Nine Months Ended September 30, 2025 2024 2025 2024 Components of net periodic benefit cost: Service cost $ 2,225 $ 2,547 $ — $ — Interest cost 13,642 12,884 30 29 Expected return on plan assets ( 20,432 ) ( 18,663 ) — — Amortization of actuarial (gain) loss ( 6,751 ) ( 1,748 ) 21 24 Net periodic benefit cost $ ( 11,316 ) $ ( 4,980 ) $ 51 $ 53 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 September 30, Nine Months Ended September 30, 2025 2024 2025 2024 Components of net periodic benefit cost: Interest cost $ 5 $ 5 $ 16 $ 15 Amortization of actuarial gain ( 67 ) ( 70 ) ( 198 ) ( 210 ) Net periodic benefit cost $ ( 62 ) $ ( 65 ) $ ( 182 ) $ ( 195 ) (12) Other Comprehensive Income The Company’s changes in other comprehensive loss were as follows (in thousands): Three Months Ended September 30, 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 $ ( 2,310 ) $ 578 $ ( 1,732 ) $ ( 646 ) $ 162 $ ( 484 ) Foreign currency translation 108 — 108 ( 22 ) — ( 22 ) Total $ ( 2,202 ) $ 578 $ ( 1,624 ) $ ( 668 ) $ 162 $ ( 506 ) 14 Nine Months Ended September 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 $ ( 6,928 ) $ 1,736 $ ( 5,192 ) $ ( 1,934 ) $ 491 $ ( 1,443 ) Actuarial gains (losses) ( 3,477 ) 871 ( 2,606 ) 2,069 ( 519 ) 1,550 Foreign currency translation 594 — 594 ( 495 ) — ( 495 ) Total $ ( 9,811 ) $ 2,607 $ ( 7,204 ) $ ( 360 ) $ ( 28 ) $ ( 388 ) (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 $ 30.5 million at September 30, 2025, including $ 11.6 million in letters of credit and $ 18.9 million in performance bonds. All of these instruments have an expiration date within approximately 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