KIRBY CORP 10-Q

Item 1. Financial Statements KIRBY CORPORATION AND CONSOLIDATED SUBSIDIARIES CONDENSED BALANCE SHEETS (Unaudited) June 30, 2026 December 31, 2025 ($ in thousands) ASSETS Current assets: Cash and cash equivalents $ 38,955 $ 78,775 Accounts receivable: Trade – less allowance for doubtful accounts 641,608 473,497 Other 82,690 69,622 Inventories – net 415,941 398,026 Prepaid expenses and other current assets 60,399 57,935 Total current assets 1,239,593 1,077,855 Property and equipment 6,595,273 6,392,985 Accumulated depreciation ( 2,417,817 ) ( 2,294,927 ) Property and equipment – net 4,177,456 4,098,058 Operating lease right-of-use assets 168,927 193,276 Goodwill 438,748 438,748 Other intangibles, net 26,342 30,165 Other assets 169,201 169,943 Total assets $ 6,220,267 $ 6,008,045 LIABILITIES AND STOCKHOLDERS’ EQUITY Current liabilities: Bank notes payable $ 5,950 $ 7,357 Accounts payable 249,745 218,614 Accrued liabilities 212,121 232,623 Current portion of operating lease liabilities 38,606 45,766 Deferred revenues 229,631 202,164 Total current liabilities 736,053 706,524 Long-term debt, net – less current portion 1,031,398 911,924 Deferred income taxes 842,577 826,373 Operating lease liabilities – less current portion 151,073 169,854 Other long-term liabilities 14,172 10,577 Total long-term liabilities 2,039,220 1,918,728 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 871,657 873,249 Accumulated other comprehensive income – net 80,674 86,342 Retained earnings 3,503,867 3,332,941 Treasury stock – at cost, 12.4 million shares at June 30, 2026 and 11.7 million at December 31, 2025 ( 1,020,230 ) ( 918,567 ) Total Kirby stockholders’ equity 3,442,515 3,380,512 Noncontrolling interests 2,479 2,281 Total equity 3,444,994 3,382,793 Total liabilities and equity $ 6,220,267 $ 6,008,045 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, 2026 2025 2026 2025 ($ in thousands, except per share amounts) Revenues: Marine transportation $ 536,974 $ 492,562 $ 1,034,157 $ 968,711 Distribution and services 385,425 362,893 732,341 672,403 Total revenues 922,399 855,455 1,766,498 1,641,114 Costs and expenses: Costs of sales and operating expenses 631,599 563,238 1,190,128 1,075,574 Selling, general and administrative 88,709 85,846 189,969 181,133 Taxes, other than on income 10,081 10,542 19,933 19,372 Depreciation and amortization 70,361 65,670 138,599 129,400 Gain on disposition of assets ( 708 ) ( 1,687 ) ( 2,161 ) ( 1,757 ) Total costs and expenses 800,042 723,609 1,536,468 1,403,722 Operating income 122,357 131,846 230,030 237,392 Other income 7,027 4,812 14,308 10,146 Interest expense ( 10,977 ) ( 12,730 ) ( 21,227 ) ( 23,267 ) Earnings before taxes on income 118,407 123,928 223,111 224,271 Provision for taxes on income ( 28,609 ) ( 29,550 ) ( 51,987 ) ( 53,623 ) Net earnings 89,798 94,378 171,124 170,648 Net earnings attributable to noncontrolling interests ( 69 ) ( 101 ) ( 198 ) ( 385 ) Net earnings attributable to Kirby $ 89,729 $ 94,277 $ 170,926 $ 170,263 Net earnings per share attributable to Kirby common stockholders: Basic $ 1.68 $ 1.68 $ 3.19 $ 3.01 Diluted $ 1.67 $ 1.67 $ 3.17 $ 2.99 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, 2026 2025 2026 2025 ($ in thousands) Net earnings $ 89,798 $ 94,378 $ 171,124 $ 170,648 Other comprehensive loss, net of taxes: Pension and postretirement benefits ( 3,870 ) ( 4,199 ) ( 6,230 ) ( 6,066 ) Foreign currency translation adjustments 423 178 562 486 Total other comprehensive loss, net of taxes ( 3,447 ) ( 4,021 ) ( 5,668 ) ( 5,580 ) Total comprehensive income, net of taxes 86,351 90,357 165,456 165,068 Net earnings attributable to noncontrolling interests ( 69 ) ( 101 ) ( 198 ) ( 385 ) Comprehensive income attributable to Kirby $ 86,282 $ 90,256 $ 165,258 $ 164,683 See accompanying notes to condensed financial statements. 4 KIRBY CORPORATION AND CONSOLIDATED SUBSIDIARIES CONDENSED STATEMENTS OF CASH FLOWS (Unaudited) Six Months Ended June 30, 2026 2025 ($ in thousands) Cash flows from operating activities: Net earnings $ 171,124 $ 170,648 Adjustments to reconcile net earnings to net cash provided by operations: Depreciation and amortization 138,599 129,400 Provision for deferred income taxes 18,290 9,617 Amortization of share-based compensation 12,434 11,147 Amortization of major maintenance costs 12,360 14,635 Other 1,920 178 Decrease in cash flows resulting from changes in operating assets and liabilities, net ( 184,811 ) ( 205,162 ) Net cash provided by operating activities 169,916 130,463 Cash flows from investing activities: Capital expenditures ( 119,764 ) ( 150,160 ) Acquisitions of businesses and marine equipment ( 95,800 ) ( 97,250 ) Proceeds from disposition of assets 6,681 11,580 Other — ( 3,000 ) Net cash used in investing activities ( 208,883 ) ( 238,830 ) Cash flows from financing activities: Borrowings on bank credit facilities, net 188,593 243,207 Payments on long-term debt ( 70,000 ) — Payment of debt issuance costs ( 1,277 ) — Proceeds from exercise of stock options 4,308 262 Payments related to tax withholding for share-based compensation ( 6,681 ) ( 5,957 ) Treasury stock purchases ( 112,390 ) ( 132,673 ) Other ( 3,406 ) ( 2,533 ) Net cash provided by (used in) financing activities ( 853 ) 102,306 Decrease in cash and cash equivalents ( 39,820 ) ( 6,061 ) Cash and cash equivalents, beginning of year 78,775 74,444 Cash and cash equivalents, end of period $ 38,955 $ 68,383 Supplemental disclosures of cash flow information: Cash paid during the period: Interest paid $ 20,632 $ 22,917 Income taxes paid, net $ 39,709 $ 79,742 Operating cash outflow from operating leases $ 26,661 $ 24,541 Non-cash investing activity: Capital expenditures included in accounts payable $ ( 3,587 ) $ ( 410 ) Right-of-use assets obtained in exchange for lease obligations $ 5,042 $ 13,704 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, 2026 65,472 $ 6,547 $ 870,284 $ 84,121 $ 3,414,138 ( 11,962 ) $ ( 960,825 ) $ 2,410 $ 3,416,675 Issuance of stock for equity awards, net of forfeitures — — ( 918 ) — — 12 918 — — Tax withholdings on equity award vesting — — — — — — ( 10 ) — ( 10 ) Amortization of share-based compensation — — 2,291 — — — — — 2,291 Treasury stock purchases — — — — — ( 419 ) ( 59,715 ) — ( 59,715 ) Excise taxes on treasury stock purchases — — — — — — ( 598 ) — ( 598 ) Total comprehensive income, net of taxes — — — ( 3,447 ) 89,729 — — 69 86,351 Balance at June 30, 2026 65,472 $ 6,547 $ 871,657 $ 80,674 $ 3,503,867 ( 12,369 ) $ ( 1,020,230 ) $ 2,479 $ 3,444,994 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 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, 2025 65,472 $ 6,547 $ 873,249 $ 86,342 $ 3,332,941 ( 11,701 ) $ ( 918,567 ) $ 2,281 $ 3,382,793 Stock option exercises — — ( 329 ) — — 59 4,637 — 4,308 Issuance of stock for equity awards, net of forfeitures — — ( 13,697 ) — — 174 13,697 — — Tax withholdings on equity award vesting — — — — — ( 54 ) ( 6,681 ) — ( 6,681 ) Amortization of share-based compensation — — 12,434 — — — — — 12,434 Treasury stock purchases — — — — — ( 847 ) ( 112,390 ) — ( 112,390 ) Excise taxes on treasury stock purchases — — — — — — ( 926 ) — ( 926 ) Total comprehensive income, net of taxes — — — ( 5,668 ) 170,926 — — 198 165,456 Balance at June 30, 2026 65,472 $ 6,547 $ 871,657 $ 80,674 $ 3,503,867 ( 12,369 ) $ ( 1,020,230 ) $ 2,479 $ 3,444,994 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 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, 2025 . Certain reclassifications have been made to reflect the current presentation of financial information. (2) Acquisitions On March 17, 2026, the Company purchased 23 inland tank barges with a total capacity of 653,000 barrels, including five specialty barges, and three high horsepower towboats from an undisclosed seller for $ 95.8 million. The Company paid $ 81.4 million in cash in March 2026 with the remaining $ 14.4 million paid in the 2026 second quarter upon delivery of remaining vessels. The 23 tank barges, including five specialty barges, transport petrochemicals and refined products on the Mississippi River System and Gulf Intracoastal Waterway. The average age of the 23 barges was 19 years. On October 14, 2025, the Company purchased certain assets from an undisclosed seller in support of the KDS segment for $ 9.3 million in cash. The assets consisted of inventory and an authorized distributorship for EMD Power Products (“EMD”) for certain geographic regions including Mexico, Central America, the northern part of South America and the Caribbean islands. 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. (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, 2026 2025 2026 2025 Marine transportation segment: Inland transportation $ 431,894 $ 397,141 $ 826,019 $ 789,640 Coastal transportation 105,080 95,421 208,138 179,071 $ 536,974 $ 492,562 $ 1,034,157 $ 968,711 Distribution and services segment: Commercial and industrial $ 193,886 $ 173,606 $ 355,532 $ 333,834 Power generation 151,317 140,739 303,071 245,241 Oil and gas 40,222 48,548 73,738 93,328 $ 385,425 $ 362,893 $ 732,341 $ 672,403 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, 2026 and 2025 that were included in the opening contract liability balances were $ 89.6 million and $ 94.7 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, 2026 or December 31, 2025 . 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 equipment, after-market parts and services for power generation systems in applications that include behind the meter power systems and emergency backup systems, after-market and genuine replacement parts and services for engines, transmissions, reduction gears, electric motors, drives, and controls, specialized electrical distribution and controls systems, and related equipment used in power generation, marine, on-highway, oilfield services, 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 and electric fracturing systems, electric power generation equipment, and specialized electrical distribution and control equipment for data centers, 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 2025 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 $ 9.6 million and $ 17.4 million for the three months and six months ended June 30, 2026, respectively, and $ 11.3 million and $ 22.5 million for the three months and six months ended June 30, 2025, respectively, as well as the related intersegment profit of $ 1.0 million and $ 1.7 million for the three months and six months ended June 30, 2026, respectively, and $ 1.1 million and $ 2.2 million for the three months and six months ended June 30, 2025, 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, 2026 2025 KMT KDS Total KMT KDS Total Revenue from external customers $ 536,974 $ 385,425 $ 922,399 $ 492,562 $ 362,893 $ 855,455 Less: Costs of sales and operating expenses 348,465 282,714 631,179 298,789 264,331 563,120 Administrative payroll expense 19,788 23,191 42,979 18,378 23,206 41,584 Taxes, other than on income 7,652 2,406 10,058 8,124 2,391 10,515 Depreciation and amortization 57,592 10,723 68,315 53,182 10,682 63,864 Other segment items (a) 15,675 28,240 43,915 15,037 26,848 41,885 Segment operating income $ 87,802 $ 38,151 $ 125,953 $ 99,052 $ 35,435 $ 134,487 Reconciliation of segment operating income Unallocated amounts: General corporate expenses ( 4,304 ) ( 4,328 ) Gain on disposition of assets 708 1,687 Operating income $ 122,357 $ 131,846 Other income 7,027 4,812 Interest expense ( 10,977 ) ( 12,730 ) Earnings before taxes on income $ 118,407 $ 123,928 9 Six Months Ended June 30, 2026 2025 KMT KDS Total KMT KDS Total Revenue from external customers $ 1,034,157 $ 732,341 $ 1,766,498 $ 968,711 $ 672,403 $ 1,641,114 Less: Costs of sales and operating expenses 649,289 539,998 1,189,287 589,776 486,559 1,076,335 Administrative payroll expense 42,176 48,677 90,853 39,608 48,142 87,750 Taxes, other than on income 15,219 4,667 19,886 14,576 4,744 19,320 Depreciation and amortization 112,928 21,677 134,605 104,854 21,001 125,855 Other segment items (a) 37,088 55,825 92,913 34,261 53,931 88,192 Segment operating income $ 177,457 $ 61,497 $ 238,954 $ 185,636 $ 58,026 $ 243,662 Reconciliation of segment operating income Unallocated amounts: General corporate expenses ( 11,085 ) ( 8,027 ) Gain on disposition of assets 2,161 1,757 Operating income $ 230,030 $ 237,392 Other income 14,308 10,146 Interest expense ( 21,227 ) ( 23,267 ) Earnings before taxes on income $ 223,111 $ 224,271 (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, 2026 December 31, 2025 Total assets: Marine transportation $ 4,823,614 $ 4,705,692 Distribution and services 1,224,676 1,111,549 Other 171,977 190,804 $ 6,220,267 $ 6,008,045 The following table presents the details of “Other” total assets (in thousands): June 30, 2026 December 31, 2025 General corporate assets $ 169,442 $ 187,616 Investment in affiliates 2,535 3,188 $ 171,977 $ 190,804 (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, 2026 December 31, 2025 Carrying Value Fair Value Carrying Value Fair Value Revolving Credit Facility due March 26, 2031 (a) $ 235,000 $ 235,000 $ 45,000 $ 45,000 Term Loan due July 29, 2027 (b) — — 70,000 70,000 4.2 % senior notes due March 1, 2028 500,000 502,011 500,000 506,089 3.46 % senior notes due January 19, 2033 60,000 54,387 60,000 55,093 3.51 % senior notes due January 19, 2033 240,000 218,255 240,000 221,128 Credit line due June 30, 2028 — — — — Bank notes payable 5,950 5,950 7,357 7,357 1,040,950 1,015,603 922,357 904,667 Unamortized debt discounts and issuance costs ( 3,602 ) — ( 3,076 ) — $ 1,037,348 $ 1,015,603 $ 919,281 $ 904,667 10 (a) Variable interest rate o f 4.6 % at June 30, 2026 and 5.0 % at December 31, 2025 . (b) Variable interest rate o f 5.0 % at December 31, 2025. On March 26, 2026, the Company entered into an amended and restated credit agreement (the “2031 Credit Agreement”) with JPMorgan Chase Bank, N.A. (“JPMorgan”), as administrative agent, and certain lenders and issuing banks party thereto. The 2031 Credit Agreement amends and restates in its entirety the Company’s existing credit agreement, dated as of July 29, 2022 (the “2027 Credit Agreement”), extending the term of the facility to March 26, 2031 (the “Maturity Date”), increasing the revolving credit facility commitments to $ 750 million, and removing the term loan credit facility. Under the 2031 Credit Agreement, the Company has the option, subject to customary conditions and consent of the participating lenders, to increase the size of the revolving credit facility commitments and to add term loan commitments up to an aggregate additional $ 500 million. Borrowings under the 2031 Credit Agreement bear interest at a rate per annum equal to, at the Company’s option, either a Secured Overnight Financing Rate (“SOFR”) or a base rate, plus an interest rate margin which ranges from 87.5 to 150 basis points for SOFR loans and 0 to 50 basis points for base rate loans based on the Company’s credit rating. The commitment fee on the unused available credit ranges from 7 to 20 basis points based on the Company’s credit rating. The Maturity Date may be extended for up to two additional one-year periods with the consent of the Company and lenders holding at least 50 percent of the commitments under the 2031 Credit Agreement. The 2031 Credit Agreement contains customary provisions regarding permitted uses, events of default, and covenants substantively similar to those in the 2027 Credit Agreement, including the maintenance of an interest coverage ratio of no less than 2.5 to 1.0 and a debt to capitalization of no more than or equal to 60 percent (with all calculations based on definitions contained in the 2031 Credit Agreement). Outstanding letters of credit under the 2031 Revolving Credit Facility were $ 6,000 and available borrowing capacity was $ 515.0 million as of June 30, 2026. The Company has a $ 20 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, 2028 . Outstanding letters of credit under the Credit Line were $ 8.0 million and available borrowing capacity was $ 12.0 million as of June 30, 2026 . (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 sheets 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, 2026 December 31, 2025 2026 $ 24,687 $ 54,278 2027 41,159 44,246 2028 31,821 33,245 2029 19,590 18,855 2030 15,281 14,522 Thereafter 99,908 97,566 Total lease payments 232,446 262,712 Less: imputed interest ( 42,767 ) ( 47,092 ) Operating lease liabilities $ 189,679 $ 215,620 The following table summarizes lease costs (in thousands): Three Months Ended June 30, Six Months Ended June 30, 2026 2025 2026 2025 Operating lease cost $ 12,673 $ 11,958 $ 25,914 $ 23,943 Variable lease cost 512 ( 309 ) ( 139 ) ( 324 ) Short-term lease cost 10,393 11,013 18,946 21,688 Sublease income ( 1,244 ) ( 1,011 ) ( 2,149 ) ( 1,871 ) $ 22,334 $ 21,651 $ 42,572 $ 43,436 11 The following table summarizes other supplemental information about the Company’s operating leases: June 30, 2026 December 31, 2025 Weighted average discount rate 4.7 % 4.7 % Weighted average remaining lease term 9 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 June 30, Six Months Ended June 30, 2026 2025 2026 2025 Compensation cost $ 2,291 $ 3,300 $ 12,434 $ 11,147 Income tax benefit $ 635 $ 781 $ 2,897 $ 2,664 During the six months ended June 30, 2026, the Company grant ed 131,971 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 2026, the Company granted 11,136 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, 2026 2025 2026 2025 Earnings (loss) before taxes on income: United States $ 118,303 $ 124,387 $ 223,049 $ 224,961 Foreign 104 ( 459 ) 62 ( 690 ) $ 118,407 $ 123,928 $ 223,111 $ 224,271 Provision (benefit) for taxes on income: Federal: Current $ 18,528 $ 19,642 $ 30,803 $ 37,808 Deferred 6,440 6,939 14,380 8,484 State and local: Current 1,612 2,861 2,705 6,198 Deferred 2,037 108 3,910 1,133 Foreign - current ( 8 ) — 189 — $ 28,609 $ 29,550 $ 51,987 $ 53,623 The Company is currently under examination by the Internal Revenue Service ("IRS") for the 2024 tax year. In addition, the Company's federal income tax returns for the 2022 through 2023 tax years remain open to examination under the applicable statutes of limitations. The Company believes its tax positions are more likely than not to be sustained upon examination and has recorded liabilities for uncertain tax positions when appropriate. However, the ultimate resolution of tax examinations and related matters could differ from amounts currently recorded and may affect the Company's effective tax rate, results of operations, and cash flows in future periods. The Company is also subject to examination by various state and local taxing authorities. 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, 2026 2025 2026 2025 Net earnings attributable to Kirby $ 89,729 $ 94,277 $ 170,926 $ 170,263 Undistributed earnings allocated to restricted shares ( 13 ) ( 17 ) ( 12 ) ( 15 ) Earnings available to Kirby common stockholders – basic 89,716 94,260 170,914 170,248 Undistributed earnings allocated to restricted shares 13 17 12 15 Undistributed earnings reallocated to restricted shares ( 13 ) ( 17 ) ( 12 ) ( 15 ) Earnings available to Kirby common stockholders – diluted $ 89,716 $ 94,260 $ 170,914 $ 170,248 Shares outstanding: Weighted average common stock issued and outstanding 53,382 56,115 53,521 56,525 Weighted average unvested restricted stock ( 7 ) ( 10 ) ( 3 ) ( 5 ) Weighted average common stock outstanding – basic 53,375 56,105 53,518 56,520 Dilutive effect of stock options and restricted stock units 321 332 336 349 Weighted average common stock outstanding – diluted 53,696 56,437 53,854 56,869 Net earnings per share attributable to Kirby common stockholders: Basic $ 1.68 $ 1.68 $ 3.19 $ 3.01 Diluted $ 1.67 $ 1.67 $ 3.17 $ 2.99 There were no antidilutive RSUs or stock options as of June 30, 2026 and 2025 . (10) Inventories The following table presents the details of inventories – net (in thousands): June 30, 2026 December 31, 2025 Finished goods $ 359,756 $ 340,740 Work in process 56,185 57,286 $ 415,941 $ 398,026 (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 2026. 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, 2026 . The Company does no t expect to make additional contributions during the remainder of 2026. 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, 2026 2025 2026 2025 Components of net periodic benefit cost: Service cost $ 741 $ 878 $ — $ — Interest cost 4,617 4,608 9 10 Expected return on plan assets ( 7,649 ) ( 6,812 ) — — Amortization of actuarial (gain) loss ( 2,931 ) ( 2,067 ) 8 7 Net periodic benefit cost $ ( 5,222 ) $ ( 3,393 ) $ 17 $ 17 Pension Benefits Pension Plans SERP Six Months Ended June 30, Six Months Ended June 30, 2026 2025 2026 2025 Components of net periodic benefit cost: Service cost $ 1,350 $ 1,483 $ — $ — Interest cost 9,161 9,095 18 20 Expected return on plan assets ( 15,280 ) ( 13,621 ) — — Amortization of actuarial (gain) loss ( 6,030 ) ( 4,501 ) 16 14 Net periodic benefit cost $ ( 10,799 ) $ ( 7,544 ) $ 34 $ 34 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, 2026 2025 2026 2025 Components of net periodic benefit cost: Interest cost $ 4 $ 6 $ 9 $ 11 Amortization of actuarial gain ( 58 ) ( 66 ) ( 115 ) ( 131 ) Net periodic benefit cost $ ( 54 ) $ ( 60 ) $ ( 106 ) $ ( 120 ) (12) Other Comprehensive Income The Company’s changes in other comprehensive loss were as follows (in thousands): Three Months Ended June 30, 2026 2025 Gross Amount Income Tax Benefit Net Amount Gross Amount Income Tax Benefit Net Amount Pension and postretirement benefits (a): Amortization of net actuarial gain $ ( 2,981 ) $ 747 $ ( 2,234 ) $ ( 2,126 ) $ 533 $ ( 1,593 ) Actuarial losses ( 2,185 ) 549 ( 1,636 ) ( 3,477 ) 871 ( 2,606 ) Foreign currency translation 423 — 423 178 — 178 Total $ ( 4,743 ) $ 1,296 $ ( 3,447 ) $ ( 5,425 ) $ 1,404 $ ( 4,021 ) 14 Six Months Ended June 30, 2026 2025 Gross Amount Income Tax Benefit Net Amount Gross Amount Income Tax Benefit Net Amount Pension and postretirement benefits (a): Amortization of net actuarial gain $ ( 6,129 ) $ 1,535 $ ( 4,594 ) $ ( 4,618 ) $ 1,158 $ ( 3,460 ) Actuarial losses ( 2,185 ) 549 ( 1,636 ) ( 3,477 ) 871 ( 2,606 ) Foreign currency translation 562 — 562 486 — 486 Total $ ( 7,752 ) $ 2,084 $ ( 5,668 ) $ ( 7,609 ) $ 2,029 $ ( 5,580 ) (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. During the second quarter of 2026, the Company entered into a settlement agreement with the Heiltsuk First Nation that resolves the claims asserted by the Heiltsuk First Nation against the Company and its affiliates arising from the incident, subject to implementation of certain settlement terms and related court approvals and orders. Proceedings in the Federal Court of Canada remain pending to effectuate certain aspects of the settlement. The Company maintains various insurance policies covering liabilities, including pollution, property, marine and general liability. The Company believes its reserves and insurance recoveries related to the incident are adequate and does not expect any remaining matters associated with the incident to have a material adverse effect on its business, financial condition, or results of operations. 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 $ 31.1 million at June 30, 2026, including $ 12.6 million in letters of credit and $ 18.5 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