KIRBY CORP

Previous wording

The Company is the nation’s largest domestic tank barge operator, transporting bulk liquid products throughout the Mississippi River System, on the Gulf Intracoastal Waterway, and coastwise along all three United States coasts. The Company transports petrochemicals, black oil, refined petroleum products and agricultural chemicals by tank barge. Through KDS, the Company provides after-market service and parts for engines, transmissions, reduction gears and related equipment used in oilfield services, marine, power generation, on-highway, backup power and other industrial applications. The Company also rents equipment including generators, industrial compressors, high capacity lift trucks, and refrigeration trailers for use in a variety of industrial markets, and manufactures and remanufactures oilfield service equipment, including pressure pumping units, manufactures cementing and pumping equipment as well as coil tubing and well intervention equipment, electric power generation equipment, and specialized electrical distribution and control equipment.

Current wording

The Company is the nation’s largest domestic tank barge operator transporting bulk liquid products throughout the Mississippi River System, on the Gulf Intracoastal Waterway, and coastwise along all three United States coasts. The Company transports petrochemicals, black oil, refined petroleum products and agricultural chemicals by tank barge. In addition, the Company participates in the transportation of dry-bulk commodities in United States coastwise trade. Through KDS, the Company 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.

Previous wording

Cash provided by operating activities for the 2024 first nine months increased in comparison to the 2023 first nine months primarily due to higher business activity levels. For the 2024 first nine months, capital expenditures of $246.0 million included $182.6 million in KMT and $63.4 million in KDS and corporate, each more fully described under Cash Flow and Capital Expenditures below.

Current wording

Cash provided by operating activities for the 2025 first quarter decreased in comparison to the 2024 first quarter primarily due to unfavorable working capital changes. This was related to an increase in inventories in the first quarter of 2025 due to the impact of supply delays in KDS resulting in the buildup of inventory for projects, mainly due to power generation orders, that are scheduled to be delivered later in 2025, partially offset by increased net earnings. For the 2025 first quarter, capital expenditures of $78.7 million included $61.8 million in KMT and $16.9 million in KDS and corporate, each more fully described under Cash Flow and Capital Expenditures below.

Previous wording

The Company projects that capital expenditures for 2024 will be in the $325 million to $355 million range. Approximately $200 million to $240 million is associated with marine maintenance capital and improvements to existing inland and coastal marine equipment, and facility improvements. Approximately $115 million is associated with growth capital spending in both segments.

Current wording

The Company projects that capital expenditures for 2025 will be in the $280 million to $320 million range. Approximately $180 million to $220 million is associated with marine maintenance capital and improvements to existing inland and coastal marine equipment, and facility improvements. Approximately $100 million is associated with growth capital spending in both segments.

Previous wording

The Company’s debt-to-capitalization ratio decreased to 22.9% at September 30, 2024 compared to 24.2% at December 31, 2023. Total equity increased as of September 30, 2024 as compared to December 31, 2023 primarily from net earnings attributable to Kirby of $243.9 million, partially offset by treasury stock purchases of $141.3 million. The Company’s debt outstanding as of September 30, 2024 and December 31, 2023 is detailed in Long-Term Financing below.

Current wording

The Company’s debt-to-capitalization ratio increased to 24.8% at March 31, 2025 compared to 20.7% at December 31, 2024, primarily due to an increase in debt outstanding. Total equity at March 31, 2025 decreased as compared to December 31, 2024 primarily from treasury stock purchases of $101.5 million, partially offset by net earnings attributable to Kirby of $76.0 million. The Company’s debt outstanding as of March 31, 2025 and December 31, 2024 is detailed in Long-Term Financing below.

Previous wording

For the 2024 third quarter and first nine months, KMT generated 58% and 59%, respectively, of the Company’s revenues compared to 56% and 55%, respectively, for the 2023 third quarter and first nine months. The segment’s customers include many of the major petrochemical and refining companies that operate in the United States. Products transported include intermediate materials used to produce many of the end products used widely by businesses and consumers — plastics, fiber, paints, detergents, oil additives and paper, among others, as well as residual fuel oil, ship bunkers, asphalt, gasoline, diesel fuel, heating oil, crude oil, natural gas condensate, and agricultural chemicals. Consequently, KMT is directly affected by the volumes produced by the Company’s petroleum, petrochemical, and refining customer base.

Current wording

For the 2025 first quarter, KMT generated 61% of the Company’s revenues compared to 59% for the 2024 first quarter. The segment’s customers include many of the major petrochemical and refining companies that operate in the United States. Products transported include intermediate materials used to produce many of the end products used widely by businesses and consumers — plastics, fiber, paints, detergents, oil additives and paper, among others, as well as residual fuel oil, ship bunkers, asphalt, gasoline, diesel fuel, heating oil, crude oil, natural gas condensate, and agricultural chemicals. Consequently, KMT is directly affected by the volumes produced by the Company’s petroleum, petrochemical, and refining customer base.

Previous wording

During the 2024 first nine months, the Company brought back into service four inland tank barges, purchased 13 inland tank barges, purchased five newly constructed inland tank barges, and retired three inland tank barges, increasing its capacity by approximately 0.5 million barrels.

Current wording

During the 2025 first quarter, the Company purchased 14 inland tank barges, chartered five inland tank barges, and retired two inland tank barges, increasing its capacity by approximately 0.4 million barrels.

Previous wording

KMT revenues for the 2024 third quarter and first nine months increased 13% and 14%, respectively, and operating income increased 57% and 62%, respectively, compared to the 2023 third quarter and first nine months. The increase in revenues for the 2024 third quarter and first nine months was primarily due to higher term and spot pricing in the inland and coastal markets. The 2024 second and third quarters were modestly impacted by weather and lock delays. The 2023 third quarter was impacted by lower tank barge utilization as a result of Illinois River lock closures and several refinery outages, as well as lower fuel rebills in the inland market. The 2024 and 2023 first quarters were impacted by poor operating conditions including seasonal wind and fog along the Gulf Coast and various lock closures. For both the 2024 third quarter and first nine months, the inland tank barge fleet contributed 81% and the coastal fleet contributed 19% of KMT revenues. For both the 2023 third quarter and first nine months, the inland tank barge fleet contributed 82% and the coastal fleet contributed 18% of KMT revenues.

Current wording

KMT revenues for the 2025 first quarter were flat and operating income increased 4% compared to the 2024 first quarter. Revenues were flat in the 2025 first quarter as compared to the 2024 first quarter as higher term and spot market pricing in the inland and coastal markets was offset by lower fuel rebills in both markets and increased shipyards in the coastal market as compared to the 2024 first quarter. The increase in operating income for the 2025 first quarter was primarily due to higher term and spot pricing in the inland and coastal markets, partially offset by higher levels of planned coastal shipyards and increased inland delay days in the 2025 first quarter. The 2025 and 2024 first quarters were impacted by poor operating conditions including seasonal wind and fog along the Gulf Coast and various lock closures. For the 2025 first quarter, the inland tank barge fleet contributed 82% and the coastal fleet contributed 18% of KMT revenues. For the 2024 first quarter, the inland tank barge fleet contributed 81% and the coastal fleet contributed 19% of KMT revenues.

Previous wording

Coastal tank barge utilization levels averaged in the mid to high 90% range during the 2024 first, second and third quarters. Coastal tank barge utilization levels averaged in the mid to high 90% range during both the 2023 first and second quarters, and the mid-90% range during the 2023 third quarter.

Current wording

Inland tank barge utilization levels averaged in the low to mid-90% range during both the 2025 and 2024 first quarters. The 2025 and 2024 first quarters were impacted by high winds and heavy fog along the Gulf Coast and lock delays. Coastal tank barge utilization levels averaged in the mid to high 90% range during both the 2025 and 2024 first quarters.

Previous wording

During both the 2024 third quarter and first nine months, approximately 65% of KMT inland revenues were under term contracts and 35% were spot contract revenues. During both the 2023 third quarter and first nine months, approximately 55% of KMT inland revenues were under term contracts and 45% were spot contract revenues. Inland time charters during the 2024 third quarter and first nine months represented approximately 62% and 61%, respectively, of inland revenues under term contracts compared with 66% and 63% in the 2023 third quarter and first nine months, respectively. During the 2024 third quarter and first nine months, approximately 99% and 98%, respectively, of KMT coastal revenues were under term contracts and 1% and 2%, respectively, were under spot contracts. During the 2023 third quarter and first nine months, approximately 90% and 85%, respectively, of KMT coastal revenues were under term contracts and 10% and 15%, respectively, were under spot contracts. Coastal time charters represented approximately 99% and 98% of coastal revenues under term contracts during the 2024 third quarter and first nine months, respectively, compared to 90% during both the 2023 third quarter and first nine months. Term contracts have contract terms of 12 months or longer, while spot contracts have contract terms of less than 12 months.

Current wording

During the 2025 first quarter, approximately 70% of KMT inland revenues were under term contracts and 30% were spot contract revenues. During the 2024 first quarter, approximately 65% of KMT inland revenues were under term contracts and 35% were spot contract revenues. Inland time charters during the 2025 first quarter represented approximately 61% of inland revenues under term contracts compared with 62% in the 2024 first quarter. During the 2025 first quarter, approximately 100% of KMT coastal revenues were under term contracts and none were under spot contracts. During the 2024 first quarter, approximately 96% of KMT coastal revenues were under term contracts and 4% were under spot contracts. Coastal time charters represented approximately 100% of coastal revenues under term contracts during the 2025 first quarter compared to 98% during the 2024 first quarter. Term contracts have contract terms of 12 months or longer, while spot contracts have contract terms of less than 12 months.

Previous wording

Effective January 1, 2024, annual escalators for labor and the producer price index on a number of inland multi-year contracts resulted in rate increases on those contracts of approximately 9.5%, excluding fuel.

Current wording

Effective January 1, 2025, annual escalators for labor and the producer price index on a number of inland multi-year contracts resulted in rate increases on those contracts in the 3% to 5% range, excluding fuel.

Previous wording

KDS sells genuine replacement parts, provides service mechanics to overhaul and repair engines, transmissions, reduction gears and related oilfield services equipment, rebuilds component parts or entire diesel engines, transmissions and reduction gears, and related equipment used in oilfield services, marine, power generation, on-highway, backup power and other industrial applications. The Company also rents equipment including generators, industrial compressors, high capacity lift trucks, and refrigeration trailers for use in a variety of industrial markets, manufactures and remanufactures oilfield service equipment, including pressure pumping units, and manufactures cementing and pumping equipment as well as coil tubing and well intervention equipment, electric power generation equipment, and specialized electric distribution and control equipment.

Current wording

The Company, through 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.

Previous wording

For the 2024 third quarter and first nine months, KDS generated 42% and 41%, respectively, of the Company’s revenues, of which 85% and 80%, respectively, were generated from service and parts and 15% and 20%, respectively, from manufacturing. The results of KDS are largely influenced by the economic cycles of the oil and gas, marine, power generation, on-highway, and other related industrial markets.

Current wording

For the 2025 first quarter, KDS generated 39% of the Company’s revenues, of which 88% were generated from service and parts and 12% from manufacturing. The results of KDS are largely influenced by the economic cycles of the oil and gas, marine, power generation, on-highway, and other related industrial markets.

Previous wording

KDS revenues for the 2024 third quarter and first nine months increased 3% and decreased 1%, respectively, and operating income decreased 8% and 5%, respectively, compared with the 2023 third quarter and first nine months. In the commercial and industrial market, revenues and operating income increased compared to the 2023 third quarter and first nine months, as higher business levels in marine repair were partially offset by lower on-highway activity. For the 2024 third quarter and first nine months, the commercial and industrial market contributed 47% and 46%, respectively, of KDS revenues.

Current wording

KDS revenues for the 2025 first quarter decreased 7% and operating income increased 3% compared with the 2024 first quarter. In the commercial and industrial market, revenues and operating income increased compared to the 2024 first quarter as higher business levels in marine repair were partially offset by lower on-highway activity. For the 2025 first quarter, the commercial and industrial market contributed 52% of KDS revenues.

Previous wording

In the oil and gas market, revenues increased and operating income declined compared to the 2023 third quarter as deliveries of electric fracturing equipment were partially offset by lower levels of conventional oilfield activity which resulted in decreased demand for new transmissions and parts. Revenues and operating income in the oil and gas market decreased compared to the 2023 first nine months due to lower levels of conventional oilfield activity, partially offset by deliveries of electric fracturing equipment. For the 2024 third quarter and first nine months, the oil and gas market contributed 21% and 19%, respectively, of KDS revenues.

Current wording

In the oil and gas market, revenues decreased and operating income increased compared to the 2024 first quarter with revenues impacted by lower levels of conventional oilfield activity which resulted in decreased demand for new transmissions and parts, partially offset by deliveries of electric fracturing equipment. Operating income increased in the 2025 first quarter as compared to the 2024 first quarter due to product mix and ongoing cost management initiatives. For the 2025 first quarter, the oil and gas market contributed 14% of KDS revenues.

Previous wording

Overall, the Company expects to deliver improved financial results in 2024. In KMT, barge utilization and customer demand remain strong, and rates continue to increase. In KDS, demand for products and services remains steady, and the Company continues to receive new orders in manufacturing. The Company remains mindful of the ever-changing economic landscape related to the impact of continued high interest rates, and possible recessionary headwinds as it moves through 2024 and into 2025.

Current wording

Overall, the Company expects to deliver improved financial results in 2025. In KMT, barge utilization and customer demand remain favorable and rates continue to increase. In KDS, growth in the power generation market is expected to mostly offset softness in oil and gas markets, and the on-highway service and repair business due to the ongoing trucking recession. The Company remains mindful of the ever-changing economic landscape related to the possible impact of high interest rates, tariffs and possible recessionary headwinds as it moves through 2025.

Previous wording

In the distribution and services segment, the Company anticipates the 2024 fourth quarter will see near-term variability in equipment deliveries due to uncertainty from supply issues, some customer maintenance deferrals, and lower overall levels of activity in oil and gas. In oil and gas, activity levels are lower but have been stabilizing at these lower levels. In commercial and industrial, the demand outlook in marine repair remains steady while on-highway service and repair is somewhat weak in the current environment. In power generation, the Company anticipates continued strong growth in orders as data center demand and the need for backup power is very strong. The Company does anticipate extended lead times for certain OEM products to continue contributing to a volatile delivery schedule of new products in the fourth quarter and into 2025.

Current wording

The Company expects mixed results in KDS in 2025 as near-term volatility from supply issues, customers deferring maintenance, and lower overall levels of activity in the oil and gas market are partially offset by increased orders in the power generation market. In commercial and industrial, the demand outlook in marine repair remains steady while on-highway service and repair remains soft. In power generation, the Company anticipates continued strong growth in orders as data center demand and the need for backup power continues to be strong. In oil and gas, the Company expects revenues to be down as the transition from conventional diesel hydraulic fracturing to electric hydraulic fracturing continues to take place. The Company anticipates extended lead times and supply delays for certain original equipment manufacturer products to continue throughout 2025.

Previous wording

On July 14, 2023, the Company purchased 23 inland tank barges with a total capacity of 265,000 barrels from an undisclosed seller for $37 million in cash. The 23 tank barges transport petrochemicals and refined products on the Mississippi River System and the Gulf Intracoastal Waterway. The average age of the 23 barges was 14 years. Financing of the equipment acquisition was through borrowings under the Company’s revolving credit facility.

Current wording

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.

Previous wording

The Company purchased four inland tank barges from a leasing company for $0.5 million in cash during the 2023 third quarter. The Company had been leasing the barges prior to the purchase. Financing of the equipment acquisition was through borrowings under the Company’s revolving credit facility.

Current wording

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.

Previous wording

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. Financing of the equipment acquisition was through borrowings under the Company’s revolving credit facility.

Current wording

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.

Previous wording

KMT revenues for the 2024 third quarter and first nine months increased 13% and 14%, respectively, and operating income increased 57% and 62%, respectively, compared to the 2023 third quarter and first nine months. The increase in revenues was primarily due to higher term and spot pricing in the inland and coastal markets. The 2024 second and third quarters were modestly impacted by weather and lock delays. The 2023 third quarter was impacted by lower tank barge utilization as a result of Illinois River lock closures and several refinery outages, as well as lower fuel rebills in the inland market. The 2024 and 2023 first quarters were impacted by poor operating conditions including seasonal wind and fog along the Gulf Coast and various lock closures. For both the 2024 third quarter and first nine months, the inland tank barge fleet contributed 81% and the coastal fleet contributed 19% of KMT revenues. For both the 2023 third quarter and first nine months, the inland tank barge fleet contributed 82% and the coastal fleet contributed 18% of KMT revenues.

Current wording

KMT revenues for the 2025 first quarter were flat and operating income increased 4% compared to the 2024 first quarter. Revenues were flat in the 2025 first quarter as compared to the 2024 first quarter as higher term and spot market pricing in the inland and coastal markets was offset by lower fuel rebills in both markets and increased shipyards in the coastal market as compared to the 2024 first quarter. The increase in operating income for the 2025 first quarter was primarily due to higher term and spot pricing in the inland and coastal markets, partially offset by higher levels of planned coastal shipyards and increased inland delay days in the 2025 first quarter. The 2025 and 2024 first quarters were impacted by poor operating conditions including seasonal wind and fog along the Gulf Coast and various lock closures. For the 2025 first quarter, the inland tank barge fleet contributed 82% and the coastal fleet contributed 18% of KMT revenues. For the 2024 first quarter, the inland tank barge fleet contributed 81% and the coastal fleet contributed 19% of KMT revenues.

Previous wording

Coastal tank barge utilization levels averaged in the mid to high 90% range during the 2024 first, second and third quarters. Coastal tank barge utilization levels averaged in the mid to high 90% range during both the 2023 first and second quarters, and the mid-90% range during the 2023 third quarter.

Current wording

Inland tank barge utilization levels averaged in the low to mid-90% range during both the 2025 and 2024 first quarters. The 2025 and 2024 first quarters were impacted by high winds and heavy fog along the Gulf Coast and lock delays. Coastal tank barge utilization levels averaged in the mid to high 90% range during both the 2025 and 2024 first quarters.

Previous wording

The petrochemical market, which is the Company’s largest market, contributed 52% and 51% of KMT revenues for the 2024 third quarter and first nine months, respectively, reflecting increased rates, volumes and utilization from Gulf Coast petrochemical plants as a result of improved economic conditions and a reduced supply of barges across the industry due to a heavier than normal maintenance cycle as compared to the 2023 third quarter and first nine months.

Current wording

The petrochemical market, which is the Company’s largest market, contributed 50% of KMT revenues for the 2025 first quarter reflecting steady rates, volumes and utilization from Gulf Coast petrochemical plants as compared to the 2024 first quarter.

Previous wording

The black oil market, which contributed 25% of KMT revenues for both the 2024 third quarter and first nine months reflected stable demand as refinery utilization and production levels of refined petroleum products and fuel oils increased. During the 2024 first nine months, the Company transported crude oil and natural gas condensate produced from major U.S. shale basins along the Gulf Intracoastal Waterway with inland vessels and in the Gulf of Mexico with coastal equipment. Additionally, the Company transported volumes of Utica natural gas condensate downriver from the Mid-Atlantic to the Gulf Coast.

Current wording

The black oil market, which contributed 25% of KMT revenues for the 2025 first quarter reflected stable demand as refinery utilization and production levels of refined petroleum products and fuel oils increased. During the 2025 first quarter, the Company transported crude oil and natural gas condensate produced from major U.S. shale basins along the Gulf Intracoastal Waterway with inland vessels and in the Gulf of America with coastal equipment. Additionally, the Company transported volumes of Utica natural gas condensate downriver from the Mid-Atlantic to the Gulf Coast.

Previous wording

The refined petroleum products market, which contributed 21% of KMT revenues for both the 2024 third quarter and first nine months, reflected stable volumes in the inland market with steady refinery utilization and product levels as compared to the 2023 third quarter and first nine months.

Current wording

The refined petroleum products market, which contributed 22% of KMT revenues for the 2025 first quarter, reflected stable volumes in the inland market with steady refinery utilization and product levels as compared to the 2024 first quarter.

Previous wording

The agricultural chemical market, which contributed 2% and 3% of KMT revenues for the 2024 third quarter and first nine months, respectively, reflected stable demand for transportation of both domestically produced and imported products as compared to the 2023 third quarter and first nine months.

Current wording

The agricultural chemical market, which contributed 3% of KMT revenues for the 2025 first quarter reflected stable demand for transportation of both domestically produced and imported products as compared to the 2024 first quarter.

Previous wording

For the 2024 third quarter, inland operations incurred 2,061 delay days, 33% more than the 1,548 delay days that occurred during the 2023 third quarter. For the 2024 first nine months, inland operations incurred 8,902 delay days, 11% more than the 7,990 delay days that occurred during the 2023 first nine months. Delay days measure the lost time incurred by a tow (towboat and one or more tank barges) during transit when the tow is stopped due to weather, lock conditions, or other navigational factors. Delay days reflected the modest impact of weather and lock delays during the 2024 second and third quarters, Illinois River lock closures during the 2023 third quarter, and poor operating conditions due to heavy wind and fog along the Gulf Coast and lock delays during the 2024 and 2023 first quarters.

Current wording

For the 2025 first quarter, inland operations incurred 4,029 delay days, 15% more than the 3,507 delay days that occurred during the 2024 first quarter. Delay days measure the lost time incurred by a tow (towboat and one or more tank barges) during transit when the tow is stopped due to weather, lock conditions, or other navigational factors. Delay days reflected poor operating conditions due to heavy wind and fog along the Gulf Coast and lock delays during the 2025 and 2024 first quarters.

Previous wording

During both the 2024 third quarter and first nine months, approximately 65% of KMT inland revenues were under term contracts and 35% were spot contract revenues. During both the 2023 third quarter and first nine months, approximately 55% of KMT inland revenues were under term contracts and 45% were spot contract revenues. Inland time charters during the 2024 third quarter and first nine months represented approximately 62% and 61%, respectively, of inland revenues under term contracts compared with 66% and 63% in the 2023 third quarter and first nine months, respectively. During the 2024 third quarter and first nine months, approximately 99% and 98%, respectively, of KMT coastal revenues were under term contracts and 1% and 2%, respectively, were under spot contracts. During the 2023 third quarter and first nine months, approximately 90% and 85%, respectively, of KMT coastal revenues were under term contracts and 10% and 15%, respectively, were under spot contracts. Coastal time charters represented approximately 99% and 98% of coastal revenues under term contracts during the 2024 third quarter and first nine months, respectively, compared to 90% during both the 2023 third quarter and first nine months. Term contracts have contract terms of 12 months or longer, while spot contracts have contract terms of less than 12 months.

Current wording

During the 2025 first quarter, approximately 70% of KMT inland revenues were under term contracts and 30% were spot contract revenues. During the 2024 first quarter, approximately 65% of KMT inland revenues were under term contracts and 35% were spot contract revenues. Inland time charters during the 2025 first quarter represented approximately 61% of inland revenues under term contracts compared with 62% in the 2024 first quarter. During the 2025 first quarter, approximately 100% of KMT coastal revenues were under term contracts and none were under spot contracts. During the 2024 first quarter, approximately 96% of KMT coastal revenues were under term contracts and 4% were under spot contracts. Coastal time charters represented approximately 100% of coastal revenues under term contracts during the 2025 first quarter compared to 98% during the 2024 first quarter. Term contracts have contract terms of 12 months or longer, while spot contracts have contract terms of less than 12 months.

Previous wording

Effective January 1, 2024, annual escalators for labor and the producer price index on a number of inland multi-year contracts resulted in rate increases on those contracts of approximately 9.5%, excluding fuel.

Current wording

Effective January 1, 2025, annual escalators for labor and the producer price index on a number of inland multi-year contracts resulted in rate increases on those contracts in the 3% to 5% range, excluding fuel.

Previous wording

Costs and expenses for both the 2024 third quarter and first nine months increased 6% compared to the 2023 third quarter and first nine months. Costs of sales and operating expenses for the 2024 third quarter and first nine months increased 6% and 7%, respectively, compared with the 2023 third quarter and first nine months. The increase during the 2024 third quarter and first nine months was driven by higher levels of business activity and continued inflationary cost pressures, partially offset by lower fuel costs.

Current wording

Costs and expenses for both the 2025 first quarter decreased 1% compared to the 2024 first quarter. Costs of sales and operating expenses for the 2025 first quarter decreased 3% compared with the 2024 first quarter. The decrease during the 2025 first quarter was driven by lower fuel costs, partially offset by inflationary cost pressures including wage increases that went into effect in 2024.

Previous wording

The inland marine transportation fleet operated an average of 287 towboats during the 2024 third quarter, of which an average of 71 were chartered, compared to 274 during the 2023 third quarter, of which an average of 55 were chartered. The Company charters in or releases chartered towboats in an effort to balance horsepower needs with current requirements, taking into account variability in demand or anticipated demand, addition or removal of tank barges from the fleet, chartered towboat availability, and weather or water conditions. The Company has historically used chartered towboats for approximately one-fourth of its horsepower requirements.

Current wording

The inland marine transportation fleet operated an average of 291 towboats during the 2025 first quarter, of which an average of 76 were chartered, compared to 286 during the 2024 first quarter, of which an average of 72 were chartered. The Company charters in or releases chartered towboats in an effort to balance horsepower needs with current requirements, taking into account variability in demand or anticipated demand, addition or removal of tank barges from the fleet, chartered towboat availability, and weather or water conditions. The Company has historically used chartered towboats for approximately one-fourth of its horsepower requirements.

Previous wording

During the 2024 third quarter, inland operations consumed 11.3 million gallons of diesel fuel compared to 11.6 million gallons consumed during the 2023 third quarter. The average price per gallon of diesel fuel consumed during the 2024 third quarter was $2.65 per gallon compared with $2.71 per gallon for the 2023 third quarter. During the 2024 first nine months, inland operations consumed 35.3 million gallons of diesel fuel compared to 35.9 million gallons consumed during the 2023 first nine months. The average price per gallon of diesel fuel consumed during the 2024 first nine months was $2.77 per gallon compared with $2.97 per gallon for the 2023 first nine months. Fuel escalation and de-escalation clauses are typically included in term contracts and are designed to rebate fuel costs when prices decline and recover additional fuel costs when fuel prices rise; however, there is generally a 30 to 120 day delay before contracts are adjusted. Spot contracts do not have escalators for fuel.

Current wording

During the 2025 first quarter, inland operations consumed 11.7 million gallons of diesel fuel compared to 11.9 million gallons consumed during the 2024 first quarter. The average price per gallon of diesel fuel consumed during the 2025 first quarter was $2.57 per gallon compared with $2.82 per gallon for the 2024 first quarter. Fuel escalation and de-escalation clauses are typically included in term contracts and are designed to rebate fuel costs when prices decline and recover additional fuel costs when fuel prices rise; however, there is generally a 30 to 120 day delay before contracts are adjusted. Spot contracts do not have escalators for fuel.

Previous wording

Selling, general and administrative expenses for the 2024 third quarter and first nine months increased 3% and 2%, respectively, compared to the 2023 third quarter and first nine months. The increase in selling, general and administrative expenses for the 2024 third quarter and first nine months as compared to the 2023 third quarter and first nine months was primarily due to higher business activity levels and continued inflationary cost pressures, which was partially offset by lower legal costs. Both the 2024 third quarter and first nine months were also impacted by salary and wage increases that went into effect July 1, 2024.

Current wording

Selling, general and administrative expenses for the 2025 first quarter increased 9% compared to the 2024 first quarter. The increase in selling, general and administrative expenses for the 2025 first quarter as compared to the 2024 first quarter was primarily due to salary and wage increases that went into effect on July 1, 2024, continued inflationary cost pressures, and an increase in the provision for credit losses related to a certain customer.

Previous wording

KMT operating income for the 2024 third quarter and first nine months increased 57% and 62%, respectively, compared with the 2023 third quarter and first nine months. The 2024 third quarter operating margin was 20.5% compared with 14.8% for the 2023 third quarter. The 2024 first nine months operating margin was 19.2% compared with 13.5% for the 2023 first nine months. The increases in operating income and operating margin were primarily due to higher term and spot contract pricing in the inland and coastal markets as a result of improving business activity levels, high utilization and a reduced supply of barges across the industry due to a heavier than normal maintenance cycle.

Current wording

KMT operating income for the 2025 first quarter increased 4% compared with the 2024 first quarter. The 2025 first quarter operating margin was 18.2% compared with 17.5% for the 2024 first quarter. The increases in operating income and operating margin were primarily due to higher term and spot contract pricing in the inland and coastal markets, partially offset by higher levels of planned coastal shipyards and increased inland delay days in the 2025 first quarter.

Previous wording

KDS revenues for the 2024 third quarter and first nine months increased 3% and decreased 1%, respectively, compared to the 2023 third quarter and first nine months. In the commercial and industrial market, revenues increased compared to the 2023 third quarter and first nine months, as higher business levels in marine repair were partially offset by lower on-highway activity. Operating income in the commercial and industrial market was up compared to the 2023 third quarter and first nine months mainly due to sales mix. In the power generation market, revenues and operating income decreased compared to the 2023 third quarter as delays in power generation equipment for oil and gas impacted 2024 third quarter results. Revenues and operating income in the power generation market increased compared to the 2023 first nine months with several large project awards from data center customers as well as other backup power industrial customers. In the oil and gas market, revenues increased and operating income declined compared to the 2023 third quarter as deliveries of electric fracturing equipment were offset by lower levels of conventional oilfield activity which resulted in decreased demand for new transmissions and parts. Revenues and operating income in the oil and gas market decreased compared to the 2023 first nine months due to lower levels of conventional oilfield activity, partially offset by deliveries of electric fracturing equipment.

Current wording

KDS revenues for the 2025 first quarter decreased 7% compared to the 2024 first quarter. In the commercial and industrial market, revenues and operating income increased compared to the 2024 first quarter as higher business levels in marine repair were partially offset by lower on-highway activity. In the power generation market, revenues and operating income decreased compared to the 2024 first quarter as deferred deliveries of equipment due to supply delays impacted 2025 first quarter results. In the oil and gas market, revenues decreased compared to the 2024 first quarter due to lower levels of conventional oilfield activity which resulted in decreased demand for new transmissions and parts, partially offset by deliveries of electric fracturing equipment. Oil and gas operating income increased compared to the 2024 first quarter due to product mix and ongoing cost management initiatives.

Previous wording

Costs and expenses for the 2024 third quarter and first nine months increased 4% and were flat, respectively, compared with the 2023 third quarter and first nine months. Costs of sales and operating expenses for the 2024 third quarter and first nine months increased 2% and decreased 3%, respectively, compared with the 2023 third quarter and first nine months, reflecting deliveries of electric fracturing equipment and lower on-highway and conventional oilfield activity.

Current wording

Costs and expenses for the 2025 first quarter decreased 8% compared with the 2024 first quarter. Costs of sales and operating expenses for the 2025 first quarter decreased 11% compared with the 2024 first quarter, reflecting lower on-highway and conventional oilfield activity as well as deferred power generation equipment shipments due to supply delays.

Previous wording

Selling, general and administrative expenses for the 2024 third quarter and first nine months increased 9% and 5%, respectively, compared to the 2023 third quarter and first nine months, primarily due to continued inflationary cost pressures and salary and wage increases that went into effect July 1, 2024.

Current wording

Selling, general and administrative expenses for the 2025 first quarter increased 1% compared to the 2024 first quarter, reflecting salary and wage increases that went into effect July 1, 2024, partially offset by ongoing cost management initiatives.

Previous wording

Depreciation and amortization for the 2024 third quarter and first nine months increased 78% and 86%, respectively, compared to the 2023 third quarter and first nine months. The increase was primarily due to capital additions during the 2023 second half and 2024 first nine months including additions to the equipment rental fleet.

Current wording

Depreciation and amortization for the 2025 first quarter increased 32% compared to the 2024 first quarter. The increase was primarily due to capital additions during 2024 and the first quarter of 2025 including additions to the equipment rental fleet.

Previous wording

KDS operating income for the 2024 third quarter and first nine months decreased 8% and 5%, respectively, compared with the 2023 third quarter and first nine months. The 2024 third quarter operating margin was 8.8% compared to 9.9% for the 2023 third quarter. The 2024 first nine months operating margin was 8.0% compared to 8.4% for the 2023 first nine months. The results reflect lower on-highway and conventional oilfield activity partially offset by increased power generation in industrial end markets and marine repair activity.

Current wording

KDS operating income for the 2025 first quarter increased 3% compared with the 2024 first quarter. The 2025 first quarter operating margin was 7.3% compared to 6.6% for the 2024 first quarter. The results reflect increased marine repair activity and deliveries of electric fracturing equipment, partially offset by lower on-highway and conventional oilfield activity.

Previous wording

The Company reported a net gain on disposition of assets of $1.6 million for the 2024 third quarter and $1.5 million for the 2023 third quarter. The Company reported a net gain on disposition of assets of $2.2 million for the 2024 first nine months and $4.2 million for the 2023 first nine months. The net gains were primarily from sales of marine transportation equipment.

Current wording

The Company reported a net gain on disposition of assets of $0.1 million for both the 2025 and 2024 first quarters. The net gains were primarily from sales of marine transportation equipment.

Previous wording

Other income for the 2024 and 2023 third quarters includes income of $2.6 million and $1.2 million, respectively, and the 2024 and 2023 first nine months includes income of $7.7 million and $3.6 million, respectively, for all components of net benefit costs except the service cost component related to the Company’s defined benefit plans. The 2023 first nine months also includes interest income associated with an Internal Revenue Service refund.

Current wording

Other income for the 2025 and 2024 first quarters includes income of $4.8 million and $2.4 million, respectively, for all components of net benefit costs except the service cost component related to the Company’s defined benefit plans.