UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549



Form 10-Q



Quarterly report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

For the quarterly period ended September 30, 2020

Transition report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

Commission File Number 1-7615



KIRBY CORPORATION
(Exact name of registrant as specified in its charter)



Nevada
 
74-1884980
(State or other jurisdiction of incorporation or organization)
 
(IRS Employer Identification No.)

55 Waugh Drive, Suite 1000
Houston, TX
 
77007
(Address of principal executive offices)
 
(Zip Code)

(713) 435-1000
(Registrant’s telephone number, including area code)

No Change
(Former name, former address and former fiscal year, if changed since last report)

Securities registered pursuant to Section 12(b) of the Exchange Act:

Title of each class
Trading Symbol(s)
Name of each exchange on which registered
Common Stock
KEX
New York Stock Exchange

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes  No

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulations S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes  No

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer
 
Accelerated filer
Non-accelerated filer
 
Smaller reporting company
     
Emerging growth company

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes No

As of November 6, 2020, 60,039,000 shares of the Registrant’s $0.10 par value per share common stock were outstanding.






 
PART I – FINANCIAL INFORMATION

Item 1.  Financial Statements

KIRBY CORPORATION AND CONSOLIDATED SUBSIDIARIES

CONDENSED BALANCE SHEETS
(Unaudited)

 
September 30,
2020
   
December 31,
2019
 
   
($ in thousands)
 
ASSETS
           
Current assets:
           
Cash and cash equivalents
 
$
119,586
   
$
24,737
 
Accounts receivable:
               
Trade – less allowance for doubtful accounts
   
304,021
     
379,174
 
Other
   
257,656
     
104,175
 
Inventories – net
   
321,433
     
351,401
 
Prepaid expenses and other current assets
   
58,023
     
58,092
 
Total current assets
   
1,060,719
     
917,579
 
                 
Property and equipment
   
5,629,361
     
5,324,090
 
Accumulated depreciation
   
(1,671,217
)
   
(1,546,980
)
Property and equipment – net
   
3,958,144
     
3,777,110
 
                 
Operating lease right-of-use assets
   
178,714
     
159,641
 
Goodwill
   
657,800
     
953,826
 
Other intangibles, net
   
71,313
     
210,682
 
Other assets
   
54,430
     
60,259
 
Total assets
 
$
5,981,120
   
$
6,079,097
 
                 
LIABILITIES AND STOCKHOLDERS’ EQUITY
               
Current liabilities:
               
Bank notes payable
 
$
155
   
$
16
 
Income taxes payable
   
459
     
665
 
Accounts payable
   
156,950
     
206,778
 
Accrued liabilities
   
228,764
     
236,350
 
Current portion of operating lease liabilities
   
32,545
     
27,324
 
Deferred revenues
   
31,192
     
42,982
 
Total current liabilities
   
450,065
     
514,115
 
                 
Long-term debt, net – less current portion
   
1,578,189
     
1,369,751
 
Deferred income taxes
   
591,346
     
588,204
 
Operating lease liabilities – less current portion
   
167,884
     
139,457
 
Other long-term liabilities
   
115,269
     
95,978
 
Total long-term liabilities
   
2,452,688
     
2,193,390
 
                 
Contingencies and commitments
   
     
 
                 
Equity:
               
Kirby stockholders’ equity:
               
Common stock, $0.10 par value per share. Authorized 120,000,000 shares, issued 65,472,000 shares
   
6,547
     
6,547
 
Additional paid-in capital
   
842,301
     
835,899
 
Accumulated other comprehensive income – net
   
(45,635
)
   
(37,799
)
Retained earnings
   
2,571,189
     
2,865,939
 
Treasury stock – at cost, 5,434,000 shares at September 30, 2020 and 5,513,000 at December 31, 2019
   
(299,139
)
   
(301,963
)
Total Kirby stockholders’ equity
   
3,075,263
     
3,368,623
 
Noncontrolling interests
   
3,104
     
2,969
 
Total equity
   
3,078,367
     
3,371,592
 
Total liabilities and equity
 
$
5,981,120
   
$
6,079,097
 

See accompanying notes to condensed financial statements.

1


KIRBY CORPORATION AND CONSOLIDATED SUBSIDIARIES

CONDENSED STATEMENTS OF EARNINGS
(Unaudited)

 
Three months ended September 30,
   
Nine months ended September 30,
 
   
2020
   
2019
   
2020
   
2019
 
   
($ in thousands, except per share amounts)
 
Revenues:
                       
Marine transportation
 
$
320,602
   
$
412,665
   
$
1,104,846
   
$
1,185,072
 
Distribution and services
   
175,965
     
254,144
     
576,806
     
997,400
 
Total revenues
   
496,567
     
666,809
     
1,681,652
     
2,182,472
 
                                 
Costs and expenses:
                               
Costs of sales and operating expenses
   
340,764
     
458,514
     
1,167,871
     
1,558,664
 
Selling, general and administrative
   
61,720
     
64,656
     
199,412
     
206,602
 
Taxes, other than on income
   
9,077
     
10,909
     
33,548
     
31,486
 
Depreciation and amortization
   
54,779
     
54,455
     
165,067
     
164,771
 
Impairments and other charges
   
     
     
561,274
     
 
(Gain) loss on disposition of assets
   
316
     
374
     
13
     
(4,901
)
Total costs and expenses
   
466,656
     
588,908
     
2,127,185
     
1,956,622
 
                                 
Operating income (loss)
   
29,911
     
77,901
     
(445,533
)
   
225,850
 
Other income
   
1,172
     
864
     
6,185
     
2,677
 
Interest expense
   
(11,809
)
   
(14,310
)
   
(37,316
)
   
(43,026
)
                                 
Earnings (loss) before taxes on income
   
19,274
     
64,455
     
(476,664
)
   
185,501
 
(Provision) benefit for taxes on income
   
8,419
     
(16,305
)
   
182,657
     
(45,454
)
                                 
Net earnings (loss)
   
27,693
     
48,150
     
(294,007
)
   
140,047
 
Less: Net earnings attributable to noncontrolling interests
   
(204
)
   
(163
)
   
(743
)
   
(477
)
                                 
Net earnings (loss) attributable to Kirby
 
$
27,489
   
$
47,987
   
$
(294,750
)
 
$
139,570
 
                                 
Net earnings (loss) per share attributable to Kirby common stockholders:
                               
Basic
 
$
0.46
   
$
0.80
   
$
(4.92
)
 
$
2.33
 
Diluted
 
$
0.46
   
$
0.80
   
$
(4.92
)
 
$
2.32
 

See accompanying notes to condensed financial statements.

2


KIRBY CORPORATION AND CONSOLIDATED SUBSIDIARIES

CONDENSED STATEMENTS OF COMPREHENSIVE INCOME
(Unaudited)

 
Three months ended September 30,
   
Nine months ended September 30,
 
   
2020
   
2019
   
2020
   
2019
 
   
($ in thousands)
 
                   
Net earnings (loss)
 
$
27,693
   
$
48,150
   
$
(294,007
)
 
$
140,047
 
Other comprehensive income (loss), net of taxes:
                               
Pension and postretirement benefits
   
(4,279
)
   
172
     
(6,674
)
   
6,640
 
Foreign currency translation adjustments
   
(239
)
   
(618
)
   
(1,162
)
   
(542
)
Total other comprehensive income (loss), net of taxes
   
(4,518
)
   
(446
)
   
(7,836
)
   
6,098
 
                                 
Total comprehensive income (loss), net of taxes
   
23,175
     
47,704
     
(301,843
)
   
146,145
 
Net earnings attributable to noncontrolling interests
   
(204
)
   
(163
)
   
(743
)
   
(477
)
                                 
Comprehensive income (loss) attributable to Kirby
 
$
22,971
   
$
47,541
   
$
(302,586
)
 
$
145,668
 

See accompanying notes to condensed financial statements.

3


KIRBY CORPORATION AND CONSOLIDATED SUBSIDIARIES

CONDENSED STATEMENTS OF CASH FLOWS
(Unaudited)

 
Nine months ended September 30,
 
   
2020
   
2019
 
   
($ in thousands)
 
Cash flows from operating activities:
           
Net earnings (loss)
 
$
(294,007
)
 
$
140,047
 
Adjustments to reconcile net earnings (loss) to net cash provided by operations:
               
Depreciation and amortization
   
165,067
     
164,771
 
Provision for deferred income taxes
   
5,382
     
40,502
 
Impairments and other charges
   
561,274
     
 
Amortization of unearned share-based compensation
   
12,066
     
11,079
 
Amortization of major maintenance costs
   
21,857
     
17,295
 
Other
   
3,523
     
(5,073
)
Increase (decrease) in cash flows resulting from changes in operating assets and liabilities, net
   
(115,399
)
   
18,978
 
Net cash provided by operating activities
   
359,763
     
387,599
 
                 
Cash flows from investing activities:
               
Capital expenditures
   
(129,371
)
   
(184,068
)
Acquisitions of businesses and marine equipment
   
(348,772
)
   
(257,540
)
Proceeds from disposition of assets
   
6,538
     
34,490
 
Net cash used in investing activities
   
(471,605
)
   
(407,118
)
                 
Cash flows from financing activities:
               
Borrowings (payments) on bank credit facilities, net
   
360,139
     
(417,377
)
Borrowings on long-term debt
   
     
500,000
 
Payments on long-term debt
   
(150,000
)
   
(60,000
)
Payments of debt issue costs
   
     
(2,397
)
Proceeds from exercise of stock options
   
353
     
3,563
 
Payments related to tax withholding for share-based compensation
   
(3,193
)
   
(2,031
)
Other
   
(608
)
   
(614
)
Net cash provided by financing activities
   
206,691
     
21,144
 
Increase in cash and cash equivalents
   
94,849
     
1,625
 
                 
Cash and cash equivalents, beginning of year
   
24,737
     
7,800
 
Cash and cash equivalents, end of period
 
$
119,586
   
$
9,425
 
                 
Supplemental disclosures of cash flow information:
               
Cash paid (received) during the period:
               
Interest paid
 
$
45,776
   
$
52,436
 
Income taxes paid (refunded)
 
$
(36,499
)
 
$
3,155
 
Operating cash outflow from operating leases
 
$
32,507
   
$
29,424
 
Non-cash investing activity:
               
Capital expenditures included in accounts payable
 
$
11,441
   
$
6,410
 
Right-of-use assets obtained in exchange for lease obligations
 
$
42,470
   
$
9,736
 

See accompanying notes to condensed financial statements.

4


KIRBY CORPORATION AND CONSOLIDATED SUBSIDIARIES

CONDENSED STATEMENTS OF STOCKHOLDERS’ EQUITY
(Unaudited)

 
Common Stock
   
Additional
Paid-in-
   
Accumulated
Other
Comprehensive
   
Retained
   
Treasury Stock
   
Noncontrolling
       
   
Shares
   
Amount
   
Capital
   
Income
   
Earnings
   
Shares
   
Amount
   
Interests
   
Total
 
   
(in thousands)
 
Balance at June 30, 2020
   
65,472
   
$
6,547
   
$
838,874
   
$
(41,117
)
 
$
2,543,700
     
(5,434
)
 
$
(299,124
)
 
$
3,104
   
$
3,051,984
 
Issuance of stock for equity awards, net of forfeitures
   
     
     
13
     
     
     
     
(13
)
   
     
 
Tax withholdings on equity award vesting
   
     
     
     
     
     
     
(2
)
   
     
(2
)
Amortization of unearned share-based compensation
   
     
     
3,414
     
     
     
     
     
     
3,414
 
Total comprehensive income, net of taxes
   
     
     
     
(4,518
)
   
27,489
     
     
     
204
     
23,175
 
Return of investment to noncontrolling interests
   
     
     
     
     
     
     
     
(204
)
   
(204
)
Balance at September 30, 2020
   
65,472
   
$
6,547
   
$
842,301
   
$
(45,635
)
 
$
2,571,189
     
(5,434
)
 
$
(299,139
)
 
$
3,104
   
$
3,078,367
 

 
Common Stock
   
Additional
Paid-in-
   
Accumulated
Other
Comprehensive
   
Retained
   
Treasury Stock
   
Noncontrolling
       
   
Shares
   
Amount
   
Capital
   
Income
   
Earnings
   
Shares
   
Amount
   
Interests
   
Total
 
   
(in thousands)
 
Balance at June 30, 2019
   
65,472
   
$
6,547
   
$
829,460
   
$
(26,967
)
 
$
2,815,175
     
(5,570
)
 
$
(305,061
)
 
$
3,018
   
$
3,322,172
 
Stock option exercises
   
     
     
237
     
     
     
26
     
1,425
     
     
1,662
 
Issuance of stock for equity awards, net of forfeitures
   
     
     
23
     
     
     
     
(23
)
   
     
 
Tax withholdings on equity award vesting
   
     
     
     
     
     
     
(8
)
   
     
(8
)
Amortization of unearned share-based compensation
   
     
     
3,172
     
     
     
     
     
     
3,172
 
Total comprehensive income, net of taxes
   
     
     
     
(446
)
   
47,987
     
     
     
163
     
47,704
 
Return of investment to noncontrolling interests
   
     
     
     
     
     
     
     
(204
)
   
(204
)
Balance at September 30, 2019
   
65,472
   
$
6,547
   
$
832,892
   
$
(27,413
)
 
$
2,863,162
     
(5,544
)
 
$
(303,667
)
 
$
2,977
   
$
3,374,498
 

See accompanying notes to condensed financial statements.

5

KIRBY CORPORATION AND CONSOLIDATED SUBSIDIARIES

CONDENSED STATEMENTS OF STOCKHOLDERS’ EQUITY
(Unaudited)

 
Common Stock
   
Additional
Paid-in-
   
Accumulated
Other
Comprehensive
   
Retained
   
Treasury Stock
   
Noncontrolling
       
   
Shares
   
Amount
   
Capital
   
Income
   
Earnings
   
Shares
   
Amount
   
Interests
   
Total
 
   
(in thousands)
 
Balance at December 31, 2019
   
65,472
   
$
6,547
   
$
835,899
   
$
(37,799
)
 
$
2,865,939
     
(5,513
)
 
$
(301,963
)
 
$
2,969
   
$
3,371,592
 
Stock option exercises
   
     
     
26
     
     
     
15
     
327
     
     
353
 
Issuance of stock for equity awards, net of forfeitures
   
     
     
(5,690
)
   
     
     
103
     
5,690
     
     
 
Tax withholdings on equity award vesting
   
     
     
     
     
     
(39
)
   
(3,193
)
   
     
(3,193
)
Amortization of unearned share-based compensation
   
     
     
12,066
     
     
     
     
     
     
12,066
 
Total comprehensive loss, net of taxes
   
     
     
     
(7,836
)
   
(294,750
)
   
     
     
743
     
(301,843
)
Return of investment to noncontrolling interests
   
     
     
     
     
     
     
     
(608
)
   
(608
)
Balance at September 30, 2020
   
65,472
   
$
6,547
   
$
842,301
   
$
(45,635
)
 
$
2,571,189
     
(5,434
)
 
$
(299,139
)
 
$
3,104
   
$
3,078,367
 

 
Common Stock
   
Additional
Paid-in-
   
Accumulated
Other
Comprehensive
   
Retained
   
Treasury Stock
   
Noncontrolling
       
   
Shares
   
Amount
   
Capital
   
Income
   
Earnings
   
Shares
   
Amount
   
Interests
   
Total
 
   
(in thousands)
 
Balance at December 31, 2018
   
65,472
   
$
6,547
   
$
823,347
   
$
(33,511
)
 
$
2,723,592
     
(5,608
)
 
$
(306,788
)
 
$
3,114
   
$
3,216,301
 
Stock option exercises
   
     
     
355
     
     
     
60
     
3,263
     
     
3,618
 
Issuance of stock for equity awards, net of forfeitures
   
     
     
(1,889
)
   
     
     
34
     
1,889
     
     
 
Tax withholdings on equity award vesting
   
     
     
     
     
     
(30
)
   
(2,031
)
   
     
(2,031
)
Amortization of unearned share-based compensation
   
     
     
11,079
     
     
     
     
     
     
11,079
 
Total comprehensive income, net of taxes
   
     
     
     
6,098
     
139,570
     
     
     
477
     
146,145
 
Return of investment to noncontrolling interests
   
     
     
     
     
     
     
     
(614
)
   
(614
)
Balance at September 30, 2019
   
65,472
   
$
6,547
   
$
832,892
   
$
(27,413
)
 
$
2,863,162
     
(5,544
)
 
$
(303,667
)
 
$
2,977
   
$
3,374,498
 

See accompanying notes to condensed financial statements.

6


KIRBY CORPORATION AND CONSOLIDATED SUBSIDIARIES

NOTES TO CONDENSED FINANCIAL STATEMENTS
(Unaudited)

(1)
Basis for Preparation of the Condensed Financial Statements


The condensed financial statements included herein have been prepared by Kirby Corporation and its consolidated subsidiaries (the “Company”), without audit, pursuant to the rules and regulations of the Securities and Exchange Commission. Although the Company believes that the disclosures are adequate to make the information presented not misleading, certain information and footnote disclosures, including significant accounting policies normally included in annual financial statements, have been condensed or omitted pursuant to such rules and regulations. It is suggested that these condensed financial statements be read in conjunction with the Company’s Annual Report on Form 10-K for the year ended December 31, 2019. Certain reclassifications have been made to reflect the current presentation of financial information. Such reclassifications have no impact on previously reported net earnings (loss), stockholders’ equity, or cash flows. 

(2)
Accounting Standards Adoptions


In December 2019, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2019-12, “Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes” which simplifies the accounting for income taxes by removing certain exceptions to the general principles in Topic 740, Income Taxes. The guidance is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2020. Early adoption is permitted. The Company is currently evaluating this guidance to determine the impact on its consolidated financial statements.


In August 2018, the FASB issued ASU 2018-14, “Compensation – Retirement Benefits - Defined Benefit Plans – General (Subtopic 715-20): Disclosure Framework – Changes to the Disclosure Requirements for Defined Benefit Plans” which amends the annual disclosure requirements for employers that sponsor defined benefit pension or other postretirement plans by removing certain requirements, providing clarification on existing requirements and adding new requirements including adding an explanation of the reasons for significant gains and losses related to changes in the benefit obligation for the period. The guidance is effective for fiscal years ending after December 15, 2020. Early adoption is permitted. The amendments in this update are required to be applied on a retrospective basis to all periods presented. The Company is currently evaluating this guidance to determine the impact on its disclosures.


In January 2017, the FASB issued ASU 2017-04, “Intangibles – Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment” (“ASU 2017-04”) which simplifies the subsequent measurement of goodwill by eliminating Step 2 in the goodwill impairment test that required an entity to perform procedures to determine the fair value of its assets and liabilities at the testing date. An entity instead shall perform its annual, or interim, goodwill impairment test by comparing the fair value of a reporting unit with its carrying value and record an impairment charge based on the excess of a reporting unit’s carrying amount over its fair value, incorporating all tax impacts caused by the recognition of the impairment loss. An entity still has the option to perform the qualitative assessment for a reporting unit to determine if the quantitative impairment test is necessary. The Company adopted ASU 2017-04 on January 1, 2020 on a prospective basis.  See Note 8, Impairments and Other Charges for further details.

(3)
Acquisitions


During the nine months ended September 30, 2020, the Company purchased five newly constructed inland pressure barges for $33,150,000 in cash.


On April 1, 2020, the Company completed the acquisition of the inland tank barge fleet of Savage Inland Marine, LLC (“Savage”) for $278,999,000 in cash.  Savage’s tank barge fleet consisted of 92 inland tank barges with approximately 2.5 million barrels of capacity and 45 inland towboats. The Savage assets that were acquired primarily move petrochemicals, refined products, and crude oil on the Mississippi River, its tributaries, and the Gulf Intracoastal Waterway.  The Company also acquired Savage’s ship bunkering business and barge fleeting business along the Gulf Coast. The Company considers Savage to be a natural extension of the current marine transportation segment, expanding the capabilities of the Company’s inland based marine transportation business and lowers the average age of its fleet.

7


On January 3, 2020, the Company completed the acquisition of substantially all the assets of Convoy Servicing Company and Agility Fleet Services, LLC (collectively “Convoy”) for $37,180,000 in cash.  Convoy is an authorized dealer for Thermo King refrigeration systems for trucks, railroad cars and other land transportation markets for North and East Texas and Colorado.


The fair values of the assets acquired and liabilities assumed from the Savage and Convoy acquisitions recorded at the respective acquisition dates were as follows (in thousands):

   
Savage
   
Convoy
 
Assets:
           
Accounts receivable
 
$
   
$
5,677
 
Inventories
   
     
11,771
 
Prepaid expenses
   
1,067
     
177
 
Property and equipment
   
210,065
     
415
 
Operating lease right-of-use assets
   
27,085
     
3,713
 
Goodwill
   
81,635
     
10,309
 
Other intangibles
   
2,300
     
17,170
 
Total assets
 
$
322,152
   
$
49,232
 
Liabilities:
               
Accounts payable and accrued liabilities
 
$
68
   
$
8,339
 
Operating lease liabilities, including current portion
   
43,085
     
3,713
 
Total liabilities
 
$
43,153
   
$
12,052
 
Net assets acquired
 
$
278,999
   
$
37,180
 


The Company acquired customer relationships with an estimated value of $2,300,000 from Savage with an amortization period of 10 years. The fair values of the Savage acquisition have not been finalized and are provisional, pending completion of the tangible and intangible valuation studies.  Acquisition related costs of $376,000, consisting primarily of legal and other professional fees, were expensed as incurred to selling, general and administrative expense. All goodwill recorded for the Savage acquisition will be deductible for tax purposes.


The Company acquired intangible assets from Convoy with a weighted average amortization period of 11 years, consisting of $9,000,000 for customer relationships with an amortization period of 10 years, $8,000,000 for distributorships with an amortization period of 12 years and $170,000 for non-compete agreements with an amortization period of three years. All goodwill recorded for the Convoy acquisition will be deductible for tax purposes.


Pro forma results of the acquisitions made in the 2020 first nine months have not been presented as the pro forma revenues and net earnings attributable to Kirby would not be materially different from the Company’s actual results.


8

(4)
Revenues


The following table sets forth the Company’s revenues by major source (in thousands):

 
Three months ended September 30,
   
Nine months ended September 30,
 
   
2020
   
2019
   
2020
   
2019
 
Marine transportation segment:
                       
Inland transportation
 
$
247,647
   
$
316,000
   
$
869,224
   
$
909,247
 
Coastal transportation
   
72,955
     
96,665
     
235,622
     
275,825
 
   
$
320,602
   
$
412,665
   
$
1,104,846
   
$
1,185,072
 
Distribution and services segment:
                               
Oil and gas
 
$
48,741
   
$
118,096
   
$
158,043
   
$
540,061
 
Commercial and industrial
   
127,224
     
136,048
     
418,763
     
457,339
 
   
$
175,965
   
$
254,144
   
$
576,806
   
$
997,400
 


Contract Assets and Liabilities. Contract liabilities represent advance consideration received from customers, and are recognized as revenue over time as the related performance obligation is satisfied. Revenues recognized in the 2020 and 2019 first nine months that were included in the opening contract liability balances were $37,153,000 and $75,105,000, respectively. The Company presents all contract liabilities within the deferred revenues financial statement caption on the balance sheets.  The Company did not have any contract assets at September 30, 2020  or December 31, 2019.


The Company applies the practical expedient that allows non-disclosure of information about remaining performance obligations that have original expected durations of one year or less.

(5)
Segment Data


The Company’s operations are aggregated into two reportable business segments as follows:


Marine Transportation — Provides marine transportation principally by United States flag vessels of liquid cargoes throughout the United States inland waterway system, along all three United States coasts, in Alaska and Hawaii and, to a lesser extent, in United States coastal transportation of dry-bulk cargoes. The principal products transported include petrochemicals, black oil, refined petroleum products and agricultural chemicals.


Distribution and Services — Provides after-market services and parts for engines, transmissions, reduction gears and related equipment used in oilfield service, marine, power generation, on-highway, and other industrial applications. The Company also rents equipment including generators, industrial compressors, railcar movers, and high capacity lift trucks for use in a variety of industrial markets, and manufactures and remanufactures oilfield service equipment, including pressure pumping units, for land-based oilfield service customers.


The Company’s two reportable business segments are managed separately based on fundamental differences in their operations. The Company evaluates the performance of its segments based on the contributions to operating income of the respective segments, before income taxes, interest, gains or losses on disposition of assets, other nonoperating income, noncontrolling interests, accounting changes, and nonrecurring items. Intersegment revenues, based on market-based pricing, of the distribution and services segment from the marine transportation segment of $6,768,000 and $23,115,000 for the three months and nine months ended September 30, 2020, respectively, and $7,201,000 and $22,182,000 for the three months and nine months ended September 30, 2019, respectively, have been eliminated from the tables below. The related intersegment profit of $676,000 and $2,311,000 for the three months and nine months ending September 30, 2020, respectively, and $720,000 and $2,218,000 for the three months and nine months ended September 30, 2019, respectively, have also been eliminated from the tables below.

9


The following tables set forth the Company’s revenues and profit or loss by reportable segment and total assets (in thousands):

 
Three months ended September 30,
   
Nine months ended September 30,
 
   
2020
   
2019
   
2020
   
2019
 
Revenues:
                       
Marine transportation
 
$
320,602
   
$
412,665
   
$
1,104,846
   
$
1,185,072
 
Distribution and services
   
175,965
     
254,144
     
576,806
     
997,400
 
   
$
496,567
   
$
666,809
   
$
1,681,652
   
$
2,182,472
 
Segment profit (loss):
                               
Marine transportation
 
$
32,391
   
$
72,697
   
$
134,482
   
$
161,364
 
Distribution and services
   
1,104
     
9,132
     
(9,325
)
   
69,869
 
Other
   
(14,221
)
   
(17,374
)
   
(601,821
)
   
(45,732
)
   
$
19,274
   
$
64,455
   
$
(476,664
)
 
$
185,501
 

 
September 30,
2020
   
December 31,
2019
 
Total assets:
           
Marine transportation
 
$
4,795,002
   
$
4,536,368
 
Distribution and services
   
814,550
     
1,422,394
 
Other
   
371,568
     
120,335
 
   
$
5,981,120
   
$
6,079,097
 


The following table presents the details of “Other” segment loss (in thousands):

 
Three months ended September 30,
   
Nine months ended September 30,
 
   
2020
   
2019
   
2020
   
2019
 
General corporate expenses
 
$
(3,268
)
 
$
(3,554
)
 
$
(9,403
)
 
$
(10,284
)
Gain (loss) on disposition of assets
   
(316
)
   
(374
)
   
(13
)
   
4,901
 
Impairments and other charges
   
     
     
(561,274
)
   
 
Interest expense
   
(11,809
)
   
(14,310
)
   
(37,316
)
   
(43,026
)
Other income
   
1,172
     
864
     
6,185
     
2,677
 
   
$
(14,221
)
 
$
(17,374
)
 
$
(601,821
)
 
$
(45,732
)


The following table presents the details of “Other” total assets (in thousands):

 
September 30,
2020
   
December 31,
2019
 
General corporate assets
 
$
369,084
   
$
118,310
 
Investment in affiliates
   
2,484
     
2,025
 
   
$
371,568
   
$
120,335
 

(6)
Long-Term Debt


The Company has an amended and restated credit agreement (the “Credit Agreement”) with a group of commercial banks, with JPMorgan Chase Bank, N.A. as the administrative agent bank, allowing for an $850,000,000 unsecured revolving credit facility (“Revolving Credit Facility”) and an unsecured term loan (“Term Loan”) with a maturity date of March 27, 2024. The Term Loan is repayable in quarterly installments currently scheduled to commence September 30, 2023, with $343,750,000 due on March 27, 2024.  The Term Loan is prepayable, in whole or in part, without penalty.  As of September 30, 2020, the Company had availability of $484,637,000 under the Revolving Credit Facility.


On February 27, 2020, upon maturity, the Company repaid in full $150,000,000 of 2.72% unsecured senior notes.

10


The following table presents the carrying value and fair value of debt outstanding (in thousands):

 
September 30, 2020
   
December 31, 2019
 
   
Carrying Value
   
Fair Value
   
Carrying Value
   
Fair Value
 
Revolving Credit Facility (a)
 
$
360,000
   
$
360,000
   
$
   
$
 
Term Loan (a)
   
375,000
     
375,000
     
375,000
     
375,000
 
2.72% senior notes due February 27, 2020
   
     
     
150,000
     
151,547
 
3.29% senior notes due February 27, 2023
   
350,000
     
362,820
     
350,000
     
353,216
 
4.2% senior notes due March 1, 2028
   
500,000
     
585,096
     
500,000
     
541,546
 
Bank notes payable
   
155
     
155
     
16
     
16
 
Unamortized debt discounts and issuance costs (b)
   
(6,811
)
   
     
(5,249
)
   
 
   
$
1,578,344
   
$
1,683,071
   
$
1,369,767
   
$
1,421,325
 

(a)          Variable interest rates of 1.5% and 2.9% at September 30, 2020 and December 31, 2019, respectively.
(b)          Excludes $2,650,000 attributable to the Revolving Credit Facility included in other assets at December 31, 2019.


The fair value of debt outstanding was determined using inputs characteristic of a Level 2 fair value measurement.


The following table presents borrowings and payments under the bank credit facilities (in thousands):

   
Nine months ended September 30,
 
 
2020
   
2019
 
Borrowings on bank credit facilities
 
$
582,212
   
$
1,294,647
 
Payments on bank credit facilities
   
(222,073
)
   
(1,712,024
)
   
$
360,139
   
$
(417,377
)


(7)
Leases


The Company currently leases various facilities and equipment under cancelable and noncancelable operating leases. The accounting for the Company’s leases may require judgments, which include determining whether a contract contains a lease, allocating the consideration between lease and non-lease components, and determining the incremental borrowing rates. Leases with an initial noncancelable term of 12 months or less are not recorded on the balance sheet and related lease expense is recognized on a straight-line basis over the lease term.  The Company has also elected to combine lease and non-lease components on all classes of leased assets, except for leased towing vessels for which the Company estimates approximately 75% of the costs relate to service costs and other non-lease components. Variable lease costs relate primarily to real estate executory costs (i.e. taxes, insurance and maintenance).


Future minimum lease payments under operating leases that have initial noncancelable lease terms in excess of one year were as follows (in thousands):

   
September 30, 2020
   
December 31, 2019
 
2020
 
$
10,643
   
$
33,374
 
2021
   
38,059
     
25,911
 
2022
   
33,014
     
23,098
 
2023
   
27,500
     
19,162
 
2024
   
23,063
     
15,330
 
Thereafter
   
117,351
     
92,991
 
Total lease payments
   
249,630
     
209,866
 
Less: imputed interest
   
(49,201
)
   
(43,085
)
Operating lease liabilities
 
$
200,429
   
$
166,781
 


11


The following table sets forth lease costs (in thousands):

   
Three months ended September 30,
   
Nine months ended September 30,
 
 
2020
   
2019
   
2020
   
2019
 
Operating lease cost
 
$
11,553
   
$
9,490
   
$
32,467
   
$
29,461
 
Variable lease cost
   
485
     
386
     
1,081
     
1,417
 
Short-term lease cost
   
4,645
     
7,727
     
17,998
     
24,582
 
Sublease income
   
(418