KIRBY CORP

Previous wording

Statements contained in this Form 10-Q that are not historical facts, including, but not limited to, any projections contained herein, are forward-looking statements and involve a number of risks and uncertainties. Such statements involve risks and uncertainties. Such statements can be identified by the use of forward-looking terminology such as “may,” “will,” “expect,” “anticipate,” “estimate,” or “continue,” or the negative thereof or other variations thereon or comparable terminology. The actual results of the future events described in such forward-looking statements in this Form 10-Q could differ materially from those stated in such forward-looking statements. Among the factors that could cause actual results to differ materially are: adverse economic conditions, industry competition and other competitive factors, adverse weather conditions such as high water, low water, tropical storms, hurricanes, tsunamis, fog and ice, tornados, pandemics, marine accidents, lock delays or closures, fuel costs, interest rates, construction of new equipment by competitors, government and environmental laws and regulations, and the timing, magnitude and number of acquisitions made by the Company. For a more detailed discussion of factors that could cause actual results to differ from those presented in forward-looking statements, see Part II, Item 1A-Risk Factors of this Form 10-Q and the Form 10-Q for the quarter ended March 31, 2026, and Item 1A-Risk Factors found in the Company’s Annual Report on Form 10‑K for the year ended December 31, 2025. Forward-looking statements are based on currently available information and the Company assumes no obligation to update any such statements. For purposes of Management’s Discussion, all net earnings per share attributable to Kirby common stockholders are “diluted earnings per share.”

Current wording

Statements contained in this Form 10-Q that are not historical facts, including, but not limited to, any projections contained herein, are forward-looking statements and involve a number of risks and uncertainties. Such statements can be identified by the use of forward-looking terminology such as “may,” “will,” “expect,” “anticipate,” “estimate,” or “continue,” or the negative thereof or other variations thereon or comparable terminology. The actual results of the future events described in such forward-looking statements in this Form 10-Q could differ materially from those stated in such forward-looking statements. Among the factors that could cause actual results to differ materially are: adverse economic conditions, industry competition and other competitive factors, adverse weather conditions such as high water, low water, tropical storms, hurricanes, tsunamis, fog and ice, tornados, pandemics, marine accidents, lock delays or closures, fuel costs, interest rates, construction of new equipment by competitors, government and environmental laws and regulations, and the timing, magnitude and number of acquisitions made by the Company. For a more detailed discussion of factors that could cause actual results to differ from those presented in forward-looking statements, see Part II, Item 1A-Risk Factors of this Form 10-Q and the Form 10-Q for the quarters ended March 31 and June 30, 2026, and Item 1A-Risk Factors found in the Company’s Annual Report on Form 10‑K for the year ended December 31, 2025. Forward-looking statements are based on currently available information and the Company assumes no obligation to update any such statements. For purposes of Management’s Discussion, all net earnings per share attributable to Kirby common stockholders are “diluted earnings per share.”

Previous wording

Cash provided by operating activities for the 2026 first six months increased in comparison to the 2025 first six months primarily due to favorable working capital changes. The favorable working capital changes were driven by the timing of accounts payable and income tax payments, partially offset by the timing of accounts receivable collections. The 2025 first six months included $73.4 million of estimated federal income tax payments as compared to $35.0 million in the 2026 first six months. For the 2026 first six months, capital expenditures of $119.8 million included $80.6 million in KMT and $39.2 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 2026 first nine months decreased in comparison to the 2025 first nine months primarily due to the timing of accounts receivable collections, partially offset by the timing of accounts payable payments and increased customer deposits in 2026 as compared to 2025. For the 2026 first nine months, capital expenditures of $189.3 million included $140.2 million in KMT and $49.1 million in KDS and corporate, each more fully described under Cash Flow and Capital Expenditures below.

Previous wording

The Company’s debt-to-capitalization ratio increased to 23.1% at June 30, 2026 compared to 21.4% at December 31, 2025, primarily due to an increase in debt outstanding. Total equity at June 30, 2026 increased as compared to December 31, 2025 primarily from net earnings attributable to Kirby of $170.9 million, partially offset by treasury stock purchases of $112.4 million. The Company’s debt outstanding as of June 30, 2026 and December 31, 2025 is detailed in Long-Term Financing below.

Current wording

The Company’s debt-to-capitalization ratio increased to 23.7% at September 30, 2026 compared to 21.4% at December 31, 2025, primarily due to an increase in debt outstanding. Total equity at September 30, 2026 increased as compared to December 31, 2025 primarily from net earnings attributable to Kirby of $281.7 million, partially offset by treasury stock purchases of $224.2 million in the 2026 first nine months. The Company’s debt outstanding as of September 30, 2026 and December 31, 2025 is detailed in Long-Term Financing below.

Previous wording

For the 2026 and 2025 second quarter and first six months, KMT generated 58% and 59%, respectively, of the Company’s revenues. 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 both the 2026 third quarter and first nine months, KMT generated 58% of the Company’s revenues. For the 2025 third quarter and first nine months, KMT generated 56% and 58%, respectively, of the Company’s revenues. 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 2026 first six months, the Company purchased 28 inland tank barges, brought back into service six inland tank barges, and retired five inland tank barges, increasing its capacity by approximately 0.7 million barrels.

Current wording

During the 2026 first nine months, the Company purchased 28 inland tank barges, chartered 14 inland tank barges, brought back into service eight inland tank barges, and retired seven inland tank barges, increasing its capacity by approximately 1.2 million barrels.

Previous wording

KMT revenues for the 2026 second quarter and first six months increased 9% and 7%, respectively, compared to the 2025 second quarter and first six months, primarily due to higher term pricing in the inland market and increased fuel rebills in the inland and coastal markets, partially offset by lower spot pricing in the inland market as compared to the 2025 second quarter and first six months. KMT operating income for the 2026 second quarter and first six months decreased 11% and 4%, respectively, compared to the 2025 second quarter and first six months, primarily due to higher fuel costs as a result of the Iran conflict. During the second quarter of 2026, rapidly rising fuel prices temporarily compressed operating income and operating margins in the inland market due to the inherent lag in the Company's contractual fuel escalation mechanisms. Because fuel-related pricing adjustments under term contracts generally become effective 30 to 120 days after fuel cost increases are incurred, the Company was unable to fully recover the impact of higher fuel costs during the quarter. The Company expects these costs to be substantially recovered in subsequent quarters as contractual fuel escalation provisions take effect. The 2026 and 2025 first quarters were impacted by poor operating conditions including seasonal wind and fog along the Gulf Coast, ice on the Illinois and Upper Mississippi Rivers and various lock closures. For both the 2026 second quarter and first six months, the inland tank barge fleet contributed 80% and the coastal fleet contributed 20% of KMT revenues. For the 2025 second quarter and first six months, the inland tank barge fleet contributed 81% and 82%, respectively, and the coastal fleet contributed 19% and 18%, respectively, of KMT revenues.

Current wording

KMT revenues for the 2026 third quarter and first nine months increased 17% and 10%, respectively, compared to the 2025 third quarter and first nine months, primarily due to higher term and spot pricing in the inland market and increased fuel rebills in the inland and coastal markets as compared to the 2025 third quarter and first nine months. KMT operating income for the 2026 third quarter and first nine months increased 26% and 6%, respectively, compared to the 2025 third quarter and first nine months, primarily due to higher term and spot pricing in the inland market, partially offset by higher fuel costs. During the second quarter of 2026, rapidly rising fuel prices temporarily compressed operating income and operating margins in the inland market due to the inherent lag in the Company's contractual fuel escalation mechanisms. Depending on contract terms, fuel related pricing adjustments under term contracts generally become effective 30 to 120 days after fuel cost increases occur. Due to this, the Company experienced a lag in the second quarter in recovering the impact of higher fuel costs. Rising fuel costs continued in the 2026 third quarter as higher costs were only partially offset by cost escalators and rate recovery mechanisms. The Company expects these costs to be substantially recovered in subsequent quarters as contractual fuel escalation provisions take effect. The 2026 and 2025 first quarters were impacted by poor operating conditions including seasonal wind and fog along the Gulf Coast, ice on the Illinois and Upper Mississippi Rivers and various lock closures. For the 2026 third quarter and first nine months, the inland tank barge fleet contributed 81% and 80%, respectively, and the coastal fleet contributed 19% and 20%, respectively, of KMT revenues. For the 2025 third quarter and first nine months, the inland tank barge fleet contributed 78% and 80%, respectively, and the coastal fleet contributed 22% and 20%, respectively, of KMT revenues.

Previous wording

Inland tank barge utilization levels averaged in the low-90% range during both the 2026 first and second quarters and the low-to-mid-90% range during both the 2025 first and second quarters. The 2026 and 2025 first quarters were impacted by high winds and heavy fog along the Gulf Coast, ice on the Illinois and Upper Mississippi Rivers and various lock delays. Coastal tank barge utilization levels averaged in the mid-to-high-90% range during the 2026 first quarter and the high-90% range during the 2026 second quarter. Coastal tank barge utilization levels averaged in the mid-to-high-90% range during both the 2025 first and second quarters.

Current wording

Inland tank barge utilization levels averaged in the low-90% range during the 2026 first, second, and third quarters, the low-to-mid-90% range during both the 2025 first and second quarters, and the mid-80% range during the 2025 third quarter. The 2025 third quarter experienced seasonally favorable weather and improved navigational conditions. In addition, the 2025 third quarter was also impacted by a lighter feedstock mix for refinery and chemical customers and fewer barges undergoing maintenance across the industry. The 2026 and 2025 first quarters were impacted by high winds and heavy fog along the Gulf Coast, ice on the Illinois and Upper Mississippi Rivers and various lock delays. Coastal tank barge utilization levels averaged in the mid-to-high-90% range during the 2026 first quarter and the high-90% range during both the 2026 second and third quarters. Coastal tank barge utilization levels averaged in the mid-to-high-90% range during the 2025 first, second, and third quarters.

Previous wording

During both the 2026 second quarter and first six months, approximately 65% of KMT inland revenues were under term contracts and 35% were spot contract revenues. During both the 2025 second quarter and first six months, approximately 70% of KMT inland revenues were under term contracts and 30% were spot contract revenues. Inland time charters during both the 2026 second quarter and first six months represented approximately 57% of inland revenues under term contracts compared with 60% in the 2025 second quarter and first six months. During the 2026 second quarter and first six months, approximately 93% and 92%, respectively, of KMT coastal revenues were under term contracts and 7% and 8%, respectively, were under spot contracts. During both the 2025 second quarter and first six months, approximately 100% of KMT coastal revenues were under term contracts and none were under spot contracts. Coastal time charters represented approximately 100% of coastal revenues under term contracts during both the 2026 and 2025 second quarter and first six 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 both the 2026 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 2025 third quarter and first nine months, approximately 70% of KMT inland revenues were under term contracts and 30% were spot contract revenues. Inland time charters during both the 2026 third quarter and first nine months represented approximately 56% of inland revenues under term contracts compared with approximately 57% and 59% in the 2025 third quarter and first nine months, respectively. During the 2026 third quarter and first nine months, approximately 95% and 93%, respectively, of KMT coastal revenues were under term contracts and 5% and 7%, respectively, were under spot contracts. During both the 2025 third quarter and first nine months, approximately 100% of KMT coastal revenues were under term contracts and none were under spot contracts. Coastal time charters represented approximately 100% of coastal revenues under term contracts during both the 2026 and 2025 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.

Previous wording

KMT operating margin was 16.4% and 17.2% for the 2026 second quarter and first six months, respectively, compared to 20.1% and 19.2% for the 2025 second quarter and first six months, respectively.

Current wording

KMT operating margin was 19.7% and 18.1% for the 2026 third quarter and first nine months, respectively, compared to 18.3% and 18.9% for the 2025 third quarter and first nine months, respectively.

Previous wording

For the 2026 second quarter and first six months, KDS generated 42% and 41%, respectively, of the Company’s revenues. The results of KDS are largely influenced by cycles of the power generation, marine, on-highway, oilfield service industry and oil and gas operator and producer markets, and other industrial markets.

Current wording

For both the 2026 third quarter and first nine months, KDS generated 42% of the Company’s revenues. For the 2025 third quarter and first nine months, KDS generated 44% and 42%, respectively, of the Company’s revenues. The results of KDS are largely influenced by cycles of the power generation, marine, on-highway, oilfield service industry and oil and gas operator and producer markets, and other industrial markets.

Previous wording

KDS revenues for the 2026 second quarter and first six months increased 6% and 9%, respectively, compared with the 2025 second quarter and first six months. KDS operating income for the 2026 second quarter and first six months increased 8% and 6%, respectively, compared with the 2025 second quarter and first six months. In the commercial and industrial market, revenues and operating income increased compared to the 2025 second quarter and first six months due to higher business levels in marine repair. For the 2026 second quarter and first six months, the commercial and industrial market contributed 50% and 49%, respectively, of KDS revenues.

Current wording

KDS revenues for the 2026 third quarter and first nine months increased 6% and 8%, respectively, compared with the 2025 third quarter and first nine months. KDS operating income for the 2026 third quarter and first nine months increased 13% and 9%, respectively, compared with the 2025 third quarter and first nine months. In the commercial and industrial market, revenues and operating income increased compared to the 2025 third quarter and first nine months due to higher business levels in marine repair. For the 2026 third quarter and first nine months, the commercial and industrial market contributed 44% and 47%, respectively, of KDS revenues.

Previous wording

In the power generation market, revenues and operating income increased compared to the 2025 second quarter and first six months due to increased demand for backup, prime power and critical power applications. For the 2026 second quarter and first six months, the power generation market contributed 40% and 41%, respectively, of KDS revenues.

Current wording

In the power generation market, revenues and operating income increased compared to the 2025 third quarter and first nine months due to increased demand for backup, prime power and critical power applications. For the 2026 third quarter and first nine months, the power generation market contributed 46% and 43%, respectively, of KDS revenues.

Previous wording

In the oil and gas market, revenues and operating income decreased compared to the 2025 second quarter and first six months, 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. For both the 2026 second quarter and first six months, the oil and gas market contributed 10% of KDS revenues.

Current wording

In the oil and gas market, revenues and operating income decreased compared to the 2025 third quarter and first nine months, 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. For both the 2026 third quarter and first nine months, the oil and gas market contributed 10% of KDS revenues.

Previous wording

KDS operating margin was 9.9% and 8.4% for the 2026 second quarter and first six months, respectively, compared to 9.8% and 8.6% for the 2025 second quarter and first six months, respectively.

Current wording

KDS operating margin was 11.9% and 9.6% for the 2026 third quarter and first nine months, respectively, compared to 11.0% and 9.5% for the 2025 third quarter and first nine months, respectively.

Previous wording

Overall, the Company expects to deliver improved financial results in 2026. In KMT, barge utilization and customer demand remain favorable. In KDS, growth in the power generation market is expected to offset softness in oil and gas markets, and the continuing trucking recession impacting the on-highway service and repair business. The Company remains mindful of the ever-changing economic landscape related to the possible impact of high interest rates, tariffs, geopolitical tensions and possible recessionary headwinds as it moves through 2026.

Current wording

Overall, the Company expects to deliver improved financial results in 2026. In KMT, barge utilization and customer demand remain favorable. In KDS, growth in the power generation market and strength in marine repair is expected to offset softness in oil and gas markets. The Company remains mindful of the ever-changing economic landscape related to the possible impact of high interest rates, tariffs, geopolitical tensions and possible recessionary headwinds as it moves through 2026 and into 2027.

Previous wording

In 2026, the inland marine transportation market is expected to experience positive market dynamics due to limited new barge construction. The Company expects barge utilization rates to remain steady for the year with continued improvement in pricing as the year progresses. The Company also continues to see inflationary pressures and there remains an acute mariner shortage in the industry which continues to drive up labor costs. These pressures, along with the increasing cost of equipment, should continue to put upward pressure on spot and term contract prices. The coastal marine transportation market is also expected to see favorable market conditions in 2026. The coastal marine transportation market should experience steady customer demand, keeping barge utilization at high levels with improving rates as the availability of equipment remains limited across the industry. There are no coastal barges currently under construction. The Company does expect more shipyard days in the coastal marine transportation market as compared to 2025.

Current wording

In 2026, the inland marine transportation market is expected to experience positive market dynamics due to limited new barge construction. The Company expects barge utilization rates to remain steady for the year with continued improvement in pricing as the year progresses. The Company also continues to see inflationary pressures and there remains a mariner shortage in the industry which continues to drive up labor costs. These pressures, along with the increasing cost of equipment, should continue to put upward pressure on spot and term contract prices. The coastal marine transportation market is also expected to see favorable market conditions in 2026. The coastal marine transportation market should experience steady customer demand, keeping barge utilization at high levels with improving rates as the availability of equipment remains limited across the industry. There are no coastal barges currently under construction. The Company does expect more shipyard days in the coastal marine transportation market as compared to 2025.

Previous wording

The Company did experience some near-term cost headwinds in its inland marine transportation operations during the 2026 second quarter from rising fuel costs. Term and affreightment contracts contain fuel escalation clauses or provides for the customer to pay for fuel. Cost escalators and rate recovery mechanisms in the Company’s term contracts, while effective over time in allowing the Company to recover changes in fuel costs, create a delay that will lag near-term fuel cost increases. As a result, periods of rapidly rising fuel prices may temporarily compress margins and operating income until escalation adjustments are fully realized. The Company did experience that lag during the 2026 second quarter but this should be ultimately realized in subsequent quarters as there is generally a 30 to 120 day delay before term contracts are adjusted for fuel costs. Fuel escalation clauses in term contracts and their effectiveness are discussed in more detail in Liquidity below and Item 1A – Risk Factors found in the Company’s Annual Report on Form 10-K for the year ended December 31, 2025.

Current wording

The Company did experience some near-term cost headwinds in its inland marine transportation operations during the 2026 second and third quarters from rising fuel costs. Term and affreightment contracts contain fuel escalation clauses or provides for the customer to pay for fuel. Cost escalators and rate recovery mechanisms in the Company’s term contracts, while effective over time in allowing the Company to recover changes in fuel costs, create a delay that will lag near-term fuel cost increases. As a result, periods of rapidly rising fuel prices may temporarily compress margins and operating income until escalation adjustments are fully realized. The Company did experience that lag during the 2026 second quarter. Rising fuel costs continued in the 2026 third quarter as higher costs were only partially offset by cost escalators and rate recovery mechanisms. The Company expects these costs to be ultimately recovered in subsequent quarters as there is generally a 30 to 120 day delay before term contracts are adjusted for fuel costs. Fuel escalation clauses in term contracts and their effectiveness are discussed in more detail in Liquidity below and Item 1A – Risk Factors found in the Company’s Annual Report on Form 10-K for the year ended December 31, 2025.

Previous wording

The Company expects stable growth in KDS in 2026 as near-term volatility from supply issues, customers deferring maintenance, and lower overall levels of activity in the oil and gas market are 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 but has shown some recent modest improvement. In power generation, the Company anticipates continued strong growth in orders as data center demand and the increasing need for prime behind the meter and 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 (“OEM”) products, especially in the power generation market, to continue throughout 2026. The Company was impacted in the 2026 second quarter by delayed OEM engine deliveries as certain impacted projects shifted from the 2026 second quarter into the 2026 second half.

Current wording

The Company expects stable growth in KDS in 2026 as near-term volatility from supply issues, customers deferring maintenance, and lower overall levels of activity in the oil and gas market are offset by increased orders in the power generation market. In commercial and industrial, the demand outlook in marine repair remains strong while on-highway service and repair remains soft but has shown some recent modest improvement. In power generation, the Company anticipates continued strong growth in orders as data center demand and the increasing need for prime behind the meter and 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 (“OEM”) products, especially in the power generation market, to continue in the 2026 fourth quarter and into 2027.

Previous wording

KMT revenues for the 2026 second quarter and first six months increased 9% and 7%, respectively, compared to the 2025 second quarter and first six months, primarily due to higher term pricing in the inland market and increased fuel rebills in the inland and coastal markets, partially offset by lower spot pricing in the inland market as compared to the 2025 second quarter and first six months. KMT operating income for the 2026 second quarter and first six months decreased 11% and 4%, respectively, compared to the 2025 second quarter and first six months, primarily due to higher fuel costs as a result of the Iran conflict. During the second quarter of 2026, rapidly rising fuel prices temporarily compressed operating income and operating margins in the inland market due to the inherent lag in the Company's contractual fuel escalation mechanisms. Because fuel-related pricing adjustments under term contracts generally become effective 30 to 120 days after fuel cost increases are incurred, the Company was unable to fully recover the impact of higher fuel costs during the quarter. The Company expects these costs to be substantially recovered in subsequent quarters as contractual fuel escalation provisions take effect. The 2026 and 2025 first quarters were impacted by poor operating conditions including seasonal wind and fog along the Gulf Coast, ice on the Illinois and Upper Mississippi Rivers and various lock closures. For both the 2026 second quarter and first six months, the inland tank barge fleet contributed 80% and the coastal fleet contributed 20% of KMT revenues. For the 2025 second quarter and first six months, the inland tank barge fleet contributed 81% and 82%, respectively, and the coastal fleet contributed 19% and 18%, respectively, of KMT revenues.

Current wording

KMT revenues for the 2026 third quarter and first nine months increased 17% and 10%, respectively, compared to the 2025 third quarter and first nine months, primarily due to higher term and spot pricing in the inland market and increased fuel rebills in the inland and coastal markets as compared to the 2025 third quarter and first nine months. KMT operating income for the 2026 third quarter and first nine months increased 26% and 6%, respectively, compared to the 2025 third quarter and first nine months, primarily due to higher term and spot pricing in the inland market, partially offset by higher fuel costs. During the second quarter of 2026, rapidly rising fuel prices temporarily compressed operating income and operating margins in the inland market due to the inherent lag in the Company's contractual fuel escalation mechanisms. Because fuel-related pricing adjustments under term contracts generally become effective 30 to 120 days after fuel cost increases are incurred, the Company was unable to fully recover the impact of higher fuel costs during the second quarter. Rising fuel costs continued in the 2026 third quarter as higher costs were mitigated but not fully offset by cost escalators and rate recovery mechanisms. The Company expects these costs to be substantially recovered in subsequent quarters as contractual fuel escalation provisions take effect. The 2026 and 2025 first quarters were impacted by poor operating conditions including seasonal wind and fog along the Gulf Coast, ice on the Illinois and Upper Mississippi Rivers and various lock closures. For the 2026 third quarter and first nine months, the inland tank barge fleet contributed 81% and 80%, respectively, and the coastal fleet contributed 19% and 20%, respectively, of KMT revenues. For the 2025 third quarter and first nine months, the inland tank barge fleet contributed 78% and 80%, respectively, and the coastal fleet contributed 22% and 20%, respectively, of KMT revenues.

Previous wording

Inland tank barge utilization levels averaged in the low-90% range during both the 2026 first and second quarters and the low-to-mid-90% range during both the 2025 first and second quarters. The 2026 and 2025 first quarters were impacted by high winds and heavy fog along the Gulf Coast, ice on the Illinois and Upper Mississippi Rivers and various lock delays. Coastal tank barge utilization levels averaged in the mid-to-high-90% range during the 2026 first quarter and the high-90% range during the 2026 second quarter. Coastal tank barge utilization levels averaged in the mid-to-high-90% range during both the 2025 first and second quarters.

Current wording

Inland tank barge utilization levels averaged in the low-90% range during the 2026 first, second, and third quarters, the low-to-mid-90% range during both the 2025 first and second quarters, and the mid-80% range during the 2025 third quarter. The 2025 third quarter experienced seasonally favorable weather and improved navigational conditions. In addition, the 2025 third quarter was also impacted by a lighter feedstock mix for refinery and chemical customers and fewer barges undergoing maintenance across the industry. The 2026 and 2025 first quarters were impacted by high winds and heavy fog along the Gulf Coast, ice on the Illinois and Upper Mississippi Rivers and various lock delays. Coastal tank barge utilization levels averaged in the mid-to-high-90% range during the 2026 first quarter and the high-90% range during both the 2026 second and third quarters. Coastal tank barge utilization levels averaged in the mid-to-high-90% range during the 2025 first, second, and third quarters.

Previous wording

The petrochemical market, which is the Company’s largest market, contributed 49% and 48% of KMT revenues for the 2026 second quarter and first six months, respectively, reflecting steady rates, volumes and utilization from Gulf Coast petrochemical plants as compared to the 2025 second quarter and first six months.

Current wording

The petrochemical market, which is the Company’s largest market, contributed 49% and 48% of KMT revenues for the 2026 third quarter and first nine months, respectively, reflecting steady rates, volumes and utilization from Gulf Coast petrochemical plants as compared to the 2025 third quarter and first nine months.

Previous wording

The black oil market, which contributed 27% of KMT revenues for both the 2026 second quarter and first six months reflected stable demand as refinery utilization and production levels of refined petroleum products and fuel oils increased. During the 2026 first six 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 America 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 27% of KMT revenues for both the 2026 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 2026 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 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% and 22% of KMT revenues for the 2026 second quarter and first six months, respectively, reflected stable volumes in the inland market with steady refinery utilization and product levels as compared to the 2025 second quarter and first six months.

Current wording

The refined petroleum products market, which contributed 21% and 22% of KMT revenues for the 2026 third quarter and first nine months, respectively, reflected stable volumes in the inland market with steady refinery utilization and product levels as compared to the 2025 third quarter and first nine months.

Previous wording

The agricultural chemical market, which contributed 3% of KMT revenues for both the 2026 second quarter and first six months reflected stable demand for transportation of both domestically produced and imported products as compared to the 2025 second quarter and first six months.

Current wording

The agricultural chemical market, which contributed 3% of KMT revenues for both the 2026 third quarter and first nine months reflected stable demand for transportation of both domestically produced and imported products as compared to the 2025 third quarter and first nine months.

Previous wording

For the 2026 second quarter, inland operations incurred 2,567 delay days, 23% fewer than the 3,320 delay days that occurred during the 2025 second quarter. For the 2026 first six months, inland operations incurred 5,831 delay days, 21% fewer than the 7,349 delay days that occurred during the 2025 first six 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 poor operating conditions due to heavy wind and fog along the Gulf Coast and lock delays during the 2026 and 2025 first quarters.

Current wording

For the 2026 third quarter, inland operations incurred 1,809 delay days, 25% more than the 1,442 delay days that occurred during the 2025 third quarter. For the 2026 first nine months, inland operations incurred 7,640 delay days, 13% fewer than the 8,791 delay days that occurred during the 2025 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 poor operating conditions due to heavy wind and fog along the Gulf Coast and lock delays during the 2026 and 2025 first quarters.

Previous wording

During both the 2026 second quarter and first six months, approximately 65% of KMT inland revenues were under term contracts and 35% were spot contract revenues. During both the 2025 second quarter and first six months, approximately 70% of KMT inland revenues were under term contracts and 30% were spot contract revenues. Inland time charters during both the 2026 second quarter and first six months represented approximately 57% of inland revenues under term contracts compared with 60% in the 2025 second quarter and first six months. During the 2026 second quarter and first six months, approximately 93% and 92%, respectively, of KMT coastal revenues were under term contracts and 7% and 8%, respectively, were under spot contracts. During both the 2025 second quarter and first six months, approximately 100% of KMT coastal revenues were under term contracts and none were under spot contracts. Coastal time charters represented approximately 100% of coastal revenues under term contracts during both the 2026 and 2025 second quarter and first six 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 both the 2026 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 2025 third quarter and first nine months, approximately 70% of KMT inland revenues were under term contracts and 30% were spot contract revenues. Inland time charters during both the 2026 third quarter and first nine months represented approximately 56% of inland revenues under term contracts compared with approximately 57% and 59% in the 2025 third quarter and first nine months, respectively. During the 2026 third quarter and first nine months, approximately 95% and 93%, respectively, of KMT coastal revenues were under term contracts and 5% and 7%, respectively, were under spot contracts. During both the 2025 third quarter and first nine months, approximately 100% of KMT coastal revenues were under term contracts and none were under spot contracts. Coastal time charters represented approximately 100% of coastal revenues under term contracts during both the 2026 and 2025 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.

Previous wording

Costs and expenses for the 2026 second quarter and first six months increased 14% and 9%, respectively, compared to the 2025 second quarter and first six months. Costs of sales and operating expenses for the 2026 second quarter and first six months increased 17% and 10%, respectively, compared with the 2025 second quarter and first six months. The results for the 2026 second quarter and first six months were driven by higher fuel costs and inflationary cost pressures including wage increases that went into effect on July 1, 2025.

Current wording

Costs and expenses for the 2026 third quarter and first nine months increased 15% and 11%, respectively, compared to the 2025 third quarter and first nine months. Costs of sales and operating expenses for the 2026 third quarter and first nine months increased 18% and 13%, respectively, compared with the 2025 third quarter and first nine months. The increase for the 2026 third quarter and first nine months was driven by higher fuel costs and inflationary cost pressures including wage increases that went into effect on July 1, 2026.

Previous wording

The inland marine transportation fleet operated an average of 291 towboats during the 2026 second quarter, of which an average of 86 were chartered, compared to 290 during the 2025 second quarter, of which an average of 75 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 294 towboats during the 2026 third quarter, of which an average of 86 were chartered, compared to 270 during the 2025 third quarter, of which an average of 61 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 2026 second quarter, inland operations consumed 13.0 million gallons of diesel fuel compared to 12.8 million gallons consumed during the 2025 second quarter. The average price per gallon of diesel fuel consumed during the 2026 second quarter was $4.23 per gallon compared with $2.35 per gallon for the 2025 second quarter. During the 2026 first six months, inland operations consumed 25.5 million gallons of diesel fuel compared to 24.5 million gallons consumed during the 2025 first six months. The average price per gallon of diesel fuel consumed during the 2026 first six months was $3.26 per gallon compared with $2.45 per gallon for the 2025 first six 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 2026 third quarter, inland operations consumed 13.8 million gallons of diesel fuel compared to 12.5 million gallons consumed during the 2025 third quarter. The average price per gallon of diesel fuel consumed during the 2026 third quarter was $3.91 per gallon compared with $2.46 per gallon for the 2025 third quarter. During the 2026 first nine months, inland operations consumed 39.3 million gallons of diesel fuel compared to 37.0 million gallons consumed during the 2025 first nine months. The average price per gallon of diesel fuel consumed during the 2026 first nine months was $3.49 per gallon compared with $2.46 per gallon for the 2025 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.

Previous wording

Selling, general and administrative expenses for the 2026 second quarter and first six months increased 6% and 7%, respectively, compared to the 2025 second quarter and first six months. The increase in selling, general and administrative expenses for the 2026 second quarter and first six months as compared to the 2025 second quarter and first six months was primarily due to continued inflationary cost pressures, including salary and wage increases that went into effect on July 1, 2025.

Current wording

Selling, general and administrative expenses for the 2026 third quarter and first nine months increased 5% and 6%, respectively, compared to the 2025 third quarter and first nine months. The increase in selling, general and administrative expenses for the 2026 third quarter and first nine months as compared to the 2025 third quarter and first nine months was primarily due to continued inflationary cost pressures, including higher medical costs, and salary and wage increases that went into effect on July 1, 2026.

Previous wording

Depreciation and amortization for the 2026 second quarter and first six months increased 8% compared to the 2025 second quarter and first six months. The increase was primarily due to capital additions during 2025 and the first six months of 2026, as well as equipment acquisitions.

Current wording

Depreciation and amortization for both the 2026 third quarter and first nine months increased 8% compared to the 2025 third quarter and first nine months. The increase was primarily due to capital additions during 2025 and the first nine months of 2026, as well as equipment acquisitions.

Previous wording

KMT operating income for the 2026 second quarter and first six months decreased 11% and 4%, respectively, compared with the 2025 second quarter and first six months. The 2026 second quarter operating margin was 16.4% compared with 20.1% for the 2025 second quarter. The 2026 first six months operating margin was 17.2% compared with 19.2% for the 2025 first six months. The decrease in operating income as compared to the 2025 second quarter and first six months was primarily due to higher fuel costs due to the Iran conflict. During the second quarter of 2026, rapidly rising fuel prices temporarily compressed operating income and operating margins in the inland market due to the inherent lag in the Company's contractual fuel escalation mechanisms. Because fuel-related pricing adjustments under term contracts generally become effective 30 to 120 days after fuel cost increases are incurred, the Company was unable to fully recover the impact of higher fuel costs during the quarter. The Company expects these costs to be substantially recovered in subsequent quarters as contractual fuel escalation provisions take effect.

Current wording

KMT operating income for the 2026 third quarter and first nine months increased 26% and 6%, respectively, compared with the 2025 third quarter and first nine months. The 2026 third quarter operating margin was 19.7% compared with 18.3% for the 2025 third quarter. The 2026 first nine months operating margin was 18.1% compared with 18.9% for the 2025 first nine months. The increase in operating income as compared to the 2025 third quarter and first nine months was primarily due to higher spot and term pricing in the inland market, partially offset by higher fuel costs. During the second quarter of 2026, rapidly rising fuel prices temporarily compressed operating income and operating margins in the inland market due to the inherent lag in the Company's contractual fuel escalation mechanisms. Because fuel-related pricing adjustments under term contracts generally become effective 30 to 120 days after fuel cost increases are incurred, the Company was unable to fully recover the impact of higher fuel costs during the second quarter. Rising fuel costs continued in the 2026 third quarter as higher costs were mitigated but not fully offset by cost escalators and rate recovery mechanisms. The Company expects these costs to be substantially recovered in subsequent quarters as contractual fuel escalation provisions take effect.

Previous wording

KDS revenues for the 2026 second quarter and first six months increased 6% and 9%, respectively, compared with the 2025 second quarter and first six months. KDS operating income for the 2026 second quarter and first six months increased 8% and 6%, respectively, compared with the 2025 second quarter and first six months.

Current wording

KDS revenues for the 2026 third quarter and first nine months increased 6% and 8%, respectively, compared with the 2025 third quarter and first nine months. KDS operating income for the 2026 third quarter and first nine months increased 13% and 9%, respectively, compared with the 2025 third quarter and first nine months.

Previous wording

In the commercial and industrial market, revenues and operating income increased compared to the 2025 second quarter and first six months due to higher business levels in marine repair. In the power generation market, revenues and operating income increased compared to the 2025 second quarter and first six months due to increased demand for backup, prime power and critical power applications. In the oil and gas market, revenues and operating income decreased compared to the 2025 second quarter and first six months, 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.

Current wording

In the commercial and industrial market, revenues and operating income increased compared to the 2025 third quarter and first nine months due to higher business levels in marine repair. In the power generation market, revenues and operating income increased compared to the 2025 third quarter and first nine months due to increased demand for backup, prime power and critical power applications. In the oil and gas market, revenues and operating income decreased compared to the 2025 third quarter and first nine months, 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.

Previous wording

Costs and expenses for the 2026 second quarter and first six months increased 6% and 9%, respectively, compared with the 2025 second quarter and first six months. Costs of sales and operating expenses for the 2026 second quarter and first six months increased 7% and 11%, respectively, compared with the 2025 second quarter and first six months. The increase for the 2026 second quarter and first six months reflected higher deliveries of power generation equipment, partially offset by lower on-highway and conventional oilfield activity.

Current wording

Costs and expenses for the 2026 third quarter and first nine months increased 5% and 8%, respectively, compared with the 2025 third quarter and first nine months. Costs of sales and operating expenses for the 2026 third quarter and first nine months increased 6% and 9%, respectively, compared with the 2025 third quarter and first nine months. The increase for the 2026 third quarter and first nine months reflected higher deliveries of power generation equipment, partially offset by lower on-highway and conventional oilfield activity.

Previous wording

Selling, general and administrative expenses for the 2026 second quarter and first six months increased 3% and 2%, respectively, compared to the 2025 second quarter and first six months, reflecting higher business activity levels and inflationary cost pressures, including salary and wage increases that went into effect July 1, 2025.

Current wording

Selling, general and administrative expenses for the 2026 third quarter and first nine months was flat and up 2%, respectively, compared to the 2025 third quarter and first nine months. The first nine months increase reflects higher business activity levels and inflationary cost pressures.

Previous wording

KDS operating income for the 2026 second quarter and first six months increased 8% and 6%, respectively, compared with the 2025 second quarter and first six months. The 2026 second quarter operating margin was 9.9% compared to 9.8% for the 2025 second quarter. The 2026 first six months operating margin was 8.4% compared to 8.6% for the 2025 first six months. The results reflect increased demand in power generation from data centers and prime power customers and higher marine repair activity and deliveries of electric fracturing equipment, partially offset by lower conventional oilfield activity.

Current wording

KDS operating income for the 2026 third quarter and first nine months increased 13% and 9%, respectively, compared with the 2025 third quarter and first nine months. The 2026 third quarter operating margin was 11.9% compared to 11.0% for the 2025 third quarter. The 2026 first nine months operating margin was 9.6% compared to 9.5% for the 2025 first nine months. The results reflect increased demand in power generation from data centers and prime power customers and higher marine repair activity and deliveries of electric fracturing equipment, partially offset by lower conventional oilfield activity.

Previous wording

General corporate expenses for the 2026 first six months increased compared to the 2025 first six months, driven primarily by increases in insurance costs, professional fees, and incentive compensation.

Current wording

General corporate expenses for the 2026 third quarter and first nine months increased compared to the 2025 third quarter and first nine months, driven primarily by increases in professional fees and incentive compensation. The 2026 first nine months was also impacted by higher insurance costs.

Previous wording

The Company reported a net gain on disposition of assets of $0.7 million and $1.7 million for the 2026 and 2025 second quarter, respectively. The Company reported a net gain on disposition of assets of $2.2 million and $1.8 million for the 2026 and 2025 first six months, respectively. The net gains were primarily from sales of marine transportation equipment and the sale of a KDS facility in the 2026 first quarter.

Current wording

The Company reported a net loss on disposition of assets of $0.8 million and a net gain of $3.0 million for the 2026 and 2025 third quarters, respectively. The Company reported a net gain on disposition of assets of $1.3 million and $4.8 million for the 2026 and 2025 first nine months, respectively. The dispositions were primarily from sales of marine transportation equipment and the sale of a KDS facility in the 2026 first quarter.

Previous wording

Other income for the 2026 and 2025 second quarters includes income of $6.0 million and $4.3 million, respectively, for all components of net benefit costs except the service cost component related to the Company’s defined benefit plans. Other income for the 2026 and 2025 first six months includes income of $12.2 million and $9.1 million, respectively, for all components of net benefit costs except the service cost component related to the Company’s defined benefit plans.

Current wording

Other income for the 2026 and 2025 third quarters includes income of $6.1 million and $4.6 million, respectively, for all components of net benefit costs except the service cost component related to the Company’s defined benefit plans. Other income for the 2026 and 2025 first nine months includes income of $18.3 million and $13.7 million, respectively, for all components of net benefit costs except the service cost component related to the Company’s defined benefit plans.