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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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FORM 11-K
ANNUAL REPORT PURSUANT TO SECTION 15(D) OF THE
SECURITIES EXCHANGE ACT OF 1934
[X] ANNUAL REPORT PURSUANT TO SECTION 15(D)
OF THE SECURITIES EXCHANGE ACT OF 1934
FOR THE FISCAL YEAR ENDED DECEMBER 31, 2003
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 15(D)
OF THE SECURITIES EXCHANGE ACT OF 1934
FOR THE TRANSITION PERIOD FROM ______ TO ______
COMMISSION FILE NUMBER 1-7615
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KIRBY 401(K) PLAN
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Kirby Corporation
55 Waugh Drive, Suite 1000
Houston, Texas 77007
KIRBY 401(K) PLAN
INDEX TO FINANCIAL STATEMENTS AND SUPPLEMENTAL SCHEDULE
PAGE
Report of Independent Registered Public Accounting Firm 1
Statements of Net Assets Available for Plan Benefits (Modified Cash Basis) - December 31, 2003 and 2002 2
Statements of Changes in Net Assets Available for Plan Benefits (Modified Cash Basis) - Years ended
December 31, 2003 and 2002 3
Notes to Financial Statements (Modified Cash Basis) 4
SUPPLEMENTAL SCHEDULE
Schedule H, Line 4i - Schedule of Assets (Held at End of Year) (Modified Cash Basis) - as of December
31, 2003 9
Schedules, other than those listed above, are omitted because of the absence of
the conditions under which they are required.
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
Plan Administrator
Kirby 401(k) Plan:
We have audited the accompanying statements of net assets available for plan
benefits (modified cash basis) of the Kirby 401(k) Plan (the Plan) as of
December 31, 2003 and 2002 and the related statements of changes in net assets
available for plan benefits (modified cash basis) for the years ended December
31, 2003 and 2002. These financial statements are the responsibility of the
Plan's management. Our responsibility is to express an opinion on these
financial statements based on our audits.
We conducted our audits in accordance with the standards of the Public Company
Accounting Oversight Board (United States). Those standards require that we plan
and perform the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audits provide a
reasonable basis for our opinion.
As described in note 2, these financial statements and supplemental schedule
were prepared on a modified cash basis of accounting, which is a comprehensive
basis of accounting other than U.S. generally accepted accounting principles.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the net assets available for plan benefits of the Plan as
of December 31, 2003 and 2002 and the changes in net assets available for plan
benefits for the years ended December 31, 2003 and 2002 on the basis of
accounting described in note 2.
Our audits were made for the purpose of forming an opinion on the basic
financial statements taken as a whole. The supplemental schedule H, line 4i -
schedule of assets (held at end of year) (modified cash basis) as of December
31, 2003 is presented for the purpose of additional analysis and is not a
required part of the basic financial statements but is supplementary information
required by the Department of Labor's Rules and Regulations for Reporting and
Disclosure under the Employee Retirement Income Security Act of 1974. The
supplemental schedule is the responsibility of the Plan's management. The
supplemental schedule has been subjected to the auditing procedures applied in
the audits of the basic financial statements and, in our opinion, is fairly
stated, in all material respects, in relation to the basic financial statements
taken as a whole.
Houston, Texas
June 23, 2004
KIRBY 401(K) PLAN
Statements of Net Assets Available for Plan Benefits
(Modified Cash Basis)
December 31, 2003 and 2002
2003 2002
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Assets:
Investments at fair value $55,207,973 44,817,740
Cash, non-interest bearing 3,000 --
Accrued income 4,457 190
Due from broker for securities sold 24,073 4,818
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Total assets 55,239,503 44,822,748
Liabilities:
Due to broker for securities purchased 58,377 42,678
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Net assets available for plan benefits $55,181,126 44,780,070
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See accompanying notes to financial statements.
2
KIRBY 401(K) PLAN
Statements of Changes in Net Assets Available for Plan Benefits
(Modified Cash Basis)
Years ended December 31, 2003 and 2002
2003 2002
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Additions to net assets attributed to:
Contributions from participants $ 5,015,081 5,084,308
Contributions from employer 1,986,622 1,977,665
Rollover contributions 524,054 441,729
Interest and dividend income 602,198 664,400
Net appreciation in fair value of investments 7,272,448 --
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Total additions 15,400,403 8,168,102
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Deductions from net assets attributed to:
Benefits paid to participants 4,999,347 3,828,409
Net depreciation in fair value of investments -- 5,012,954
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Total deductions 4,999,347 8,841,363
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Net increase (decrease) 10,401,056 (673,261)
Net assets available for plan benefits, beginning of year 44,780,070 45,453,331
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Net assets available for plan benefits, end of year $55,181,126 44,780,070
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See accompanying notes to financial statements.
3
KIRBY 401(K) PLAN
Notes to Financial Statements
(Modified Cash Basis)
December 31, 2003 and 2002
(1) DESCRIPTION OF THE PLAN
(A) GENERAL
The Kirby 401(k) Plan (the Plan) is a defined contribution
401(k) plan for the benefit of employees of Kirby Corporation
(the Company) and certain subsidiaries. Each employee is
eligible to join the Plan as of the first pay period following
completion of one year of service and the attainment of age
18. Employees covered by collective bargaining agreements, the
terms of which do not provide for participation in the Plan,
are not eligible. The Plan is subject to the provisions of the
Employee Retirement Income Security Act of 1974, as amended
(ERISA). Further information relating to the Plan's provisions
is available in the Plan Document.
The Hollywood Marine, Inc. (HMI) 401(k) Plan (HMI Plan) was
merged into the Plan, and all HMI balances were transferred to
the Plan effective December 31, 1999. Commencing January 1,
2000, former HMI Plan participants are subject to the same
plan provisions as the Plan participants. In connection with
the plan merger, the Plan was amended on December 31, 1999 to
include HMI employees.
(B) PLAN ADMINISTRATION
The general administration of the Plan is the responsibility
of the Company (the plan administrator). The plan
administrator has broad powers regarding the operation and
administration of the Plan and receives no compensation for
service to the Plan. All administrative expenses, unless paid
by the Company at its discretion, are paid by the Plan. During
2003 and 2002, all expenses were paid by the Company. Wells
Fargo Bank (Wells) is the trustee of the Plan.
(C) CONTRIBUTIONS
The Plan provides for basic employee pretax contributions to
the Plan of up to 3% of covered compensation as defined, and
for additional employee pretax contributions to the Plan of up
to 14% of covered compensation subject to the provisions of
the Internal Revenue Code of 1986, as amended (the Code).
Participants age 50 or older during the Plan year may also
elect to make a "catch-up" contribution, subject to certain
Internal Revenue Service (IRS) limits ($2,000 in 2003 and
$1,000 in 2002). The Company contributes matching employer
contributions equal to 100% of basic employee pretax
contributions. The Company does not match the additional
employee pretax or catch-up contributions. Matching employer
contributions are used to purchase Company common stock.
Employees may transfer the matching employer contributions to
other funds upon receipt.
In addition, participants may contribute amounts representing
rollovers from other qualified plans.
(D) BENEFITS PAYMENTS AND LOANS
Benefits payments are made to participants upon retirement or
termination of employment (or to the beneficiary in the event
of death) and are in the form of lump sum distributions or
installment payments. A participant may request a loan for up
to the lesser of 50% of the participant's vested interest or
$50,000, less the participant's highest outstanding loan
balance during the preceding 12 months. Loans are typically
repaid over a five-year period. Loans outstanding upon a
participant's
4 (Continued)
KIRBY 401(K) PLAN
Notes to Financial Statements
(Modified Cash Basis)
December 31, 2003 and 2002
termination of employment are considered deemed distributions
if not repaid and are deducted from the participant's account
balance prior to distribution. These amounts are taxed to the
participant in the year of the participant's termination.
Former participants of the HMI plan are eligible to receive in
service withdrawals from their vested HMI account balance
after attaining 59 -1/2 years of age.
(E) VESTING
Participants are 100% vested in their participant
contributions and rollovers, if any. Participants in the Plan
have an immediate and fully vested interest in the portion of
the account relating to employer contributions and may, upon
resignation from or discharge by the employer, withdraw their
entire account balance.
Employer contributions made to the prior HMI Plan are subject
to a five-year vesting schedule based on the participant's HMI
service date. Forfeitures of nonvested participants are
credited to the accounts of former HMI Plan participants
employed at year-end based on a formula that considers the
total compensation, as defined, of all former HMI Plan
participants for that plan year. Forfeitures in the amount of
$9,060 and $62,955 as of December 31, 2003 and 2002,
respectively, were available for allocation to former HMI Plan
participants.
(F) PLAN TERMINATION
Although it has not expressed any intent to do so, the Company
has the right under the Plan to terminate the Plan subject to
the provisions of ERISA. In the event of termination, the
amounts credited to the accounts of participants shall vest
immediately and will be distributed to the participants after
payment of expenses for distribution and liquidation.
(G) VALUATION OF PARTICIPANT ACCOUNTS
Under the Plan, each participant's account is credited with
the participant's contribution, the Company's matching
contribution and an allocation of investment income (loss),
net of administrative expenses. Investment income (loss) is
allocated daily to participants. The benefit to which a
participant is entitled is the benefit that can be provided
from the participant's vested account.
(2) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
(A) BASIS OF PRESENTATION
The accompanying financial statements have been prepared on
the modified cash basis, which is a comprehensive basis of
accounting other than U.S. generally accepted accounting
principles, and is an acceptable method of reporting under
Department of Labor regulations. The modified cash basis of
accounting utilizes the cash basis of accounting while
carrying investments at fair value and recording investment
income on the accrual basis. Consequently, contributions are
recognized when received rather than when earned, and expenses
are recognized when paid rather than when the obligation is
incurred. As of December 31, 2003, $89,451 of employee
contributions and $41,685 of employer contributions for the
2003 Plan year had not been remitted to the trust. As of
December 31, 2002, $174,340 of employee contributions and
$73,549 of employer contributions for the 2002 Plan
5 (Continued)
KIRBY 401(K) PLAN
Notes to Financial Statements
(Modified Cash Basis)
December 31, 2003 and 2002
year had not been remitted to the trust. As of December 31,
2003, $82,689 of excess deferrals were held by the trust and
distributed to participants during 2004. As of December 31,
2002, no excess deferrals were held by the trust. Under U.S.
generally accepted accounting principles, these amounts would
have been reflected as accounts receivable and payable.
(B) USE OF ESTIMATES
The preparation of financial statements requires Plan
management to make estimates and assumptions that affect the
reported amounts of assets, liabilities, and disclosure of
contingent assets and liabilities, and changes therein. Actual
results could differ from those estimates.
(C) INVESTMENT VALUATION
Investments in mutual funds and Company common stock are
stated at fair value based on quoted market prices.
Investments in common trust funds are stated at fair market
value based upon quoted market prices of the underlying
assets. Purchases and sales of investments are recorded on a
trade date basis. Net appreciation (depreciation) in fair
value of investments includes realized gains and losses on
investments sold during the year as well as net appreciation
(depreciation) of the investments held at the end of the year.
Participant loans are stated at cost, which approximates their
fair value. Interest and dividend income is accrued in the
period earned.
(D) PAYMENT OF BENEFITS
Payments to participants are recorded as the benefits are
paid.
(3) INVESTMENTS
Each participant has the right to direct his or her contributions and
the Company's matching contributions, between the investment funds
offered by the Plan. Descriptions of the Plan's investment fund options
are included in the summary plan description provided to all eligible
employees.
Participants may direct their investment contributions to the following
investment funds: Wells Fargo Outlook 2010 Fund, Wells Fargo Outlook
2020 Fund, Wells Fargo Outlook 2030 Fund, Wells Fargo Outlook 2040
Fund, Wells Fargo Treasury Plus Institutional Money Market Fund,
Dreyfus Intermediate Term Income Fund, Wells Fargo Asset Allocation
Fund, MFS Value Fund, Goldman Sachs Capital Growth Fund, Wells Fargo
S&P 500 Index Fund, MFS Massachusetts Investors Growth Stock Fund, MFS
Mid-Cap Growth Fund, AIM Aggressive Growth Fund, Janus Advisor
International Fund and Kirby Common Stock Fund. The Franklin US
Government Securities and Templeton Foreign Fund were added during
2003. Effective January 7, 2004, all funds in the Janus Advisor
International Fund were transferred to the Templeton Foreign Fund.
6 (Continued)
KIRBY 401(K) PLAN
Notes to Financial Statements
(Modified Cash Basis)
December 31, 2003 and 2002
The following presents investments that represent 5% or more of the
Plan's net assets as of December 31:
2003:
Wells Fargo Treasury Plus Institutional
Money Market Fund $ 9,529,377
Wells Fargo Asset Allocation Fund 5,827,979
Dreyfus Intermediate Term Income Fund 4,325,904
Goldman Sachs Capital Growth Fund 4,809,701
AIM Aggressive Growth Fund 4,052,308
Company common stock 10,917,579
Participant loans 4,933,368
2002:
Wells Fargo Treasury Plus Institutional
Money Market Fund $ 9,880,671
Wells Fargo Asset Allocation Fund 4,474,236
Dreyfus Intermediate Term Income Fund 4,231,800
Goldman Sachs Capital Growth Fund 3,733,132
AIM Aggressive Growth Fund 3,094,464
Company common stock 8,019,381
Participant loans 4,421,960
The Plan's investments (including realized gains and losses on
investments bought and sold, as well as unrealized gains and losses on
investments held during the year) appreciated (depreciated) in value as
follows:
2003 2002
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Common trust funds $1,450,694 (1,008,323)
Mutual funds 3,368,067 (4,115,830)
Common stock 2,453,687 111,199
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$7,272,448 (5,012,954)
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(4) VOTING RIGHTS
Each shareholder is entitled to exercise voting rights attributable to
the shares of Company common stock allocated to his or her account and
is notified by the trustee prior to the time that such rights are to be
exercised. The trustee is not permitted to vote any shares for which
instructions have not been given by the participant. During 2003 and
2002, the Plan purchased all shares of Company common stock in the open
market.
7 (Continued)
KIRBY 401(K) PLAN
Notes to Financial Statements
(Modified Cash Basis)
December 31, 2003 and 2002
(5) RISK AND UNCERTAINTIES
The Plan may invest in common trust funds, mutual funds and Company
common stock. Investment securities are exposed to various risks, such
as interest rate, market, and credit risks. Due to the level of risk
associated with certain investment securities, it is probable that
changes in the value of investment securities will occur in the near
term.
(6) RELATED PARTY TRANSACTIONS
Certain Plan investment options include shares of Company common stock
and common trust funds and mutual funds managed by Wells. The Company
is the plan sponsor, and Wells is the trustee as defined by the Plan.
Therefore, these transactions qualify as party-in-interest
transactions. These transactions are covered by an exemption from the
"prohibited transaction" provisions of ERISA and the Code.
The Plan has participant loans outstanding, which are secured solely by
a portion of the participant's vested account balance, in accordance
with the Plan Document.
(7) FEDERAL INCOME TAXES
Management considers the Plan to be in compliance with Section 401(a)
of the Code and, accordingly, to be entitled to an exemption from
federal income taxes under the provisions of Section 501(a). A letter
dated August 30, 2001 has been received by Wells stating that the form
of the prototype plan is acceptable under the Code Section 401 for use
by employers for the benefit of their employees. The letter, in effect,
states that an employer who adopts the Plan will be considered to be
qualified under the Code Section 401(a) provided all terms of the Plan
are met and the Plan does not discriminate in favor of key or highly
compensated employees. Therefore, the plan administrator believes the
Plan was qualified and the related trust was tax exempt as of December
31, 2003 and 2002.
8 (Continued)
KIRBY 401(K) PLAN
Schedule H, Line 4i - Schedule of Assets ( Held at End of Year)
(Modified Cash Basis)
December 31, 2003
IDENTITY OF ISSUE,
BORROWER, LESSOR, OR CURRENT
SIMILAR PARTY DESCRIPTION OF ASSET VALUE
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Common trust funds:
*Wells Fargo Bank Wells Fargo Treasury Plus Institutional
Money Market Fund $ 9,529,377
*Wells Fargo Bank Wells Fargo Short-Term Investment
Money Market Fund 182,741
*Wells Fargo Bank Wells Fargo Asset Allocation Fund 5,827,979
*Wells Fargo Bank Wells Fargo S&P 500 Index Fund 2,156,738
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Total common trust funds 17,696,835
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Mutual funds:
*Wells Fargo Bank Wells Fargo Outlook 2010 Fund 403,257
*Wells Fargo Bank Wells Fargo Outlook 2020 Fund 737,521
*Wells Fargo Bank Wells Fargo Outlook 2030 Fund 231,792
*Wells Fargo Bank Wells Fargo Outlook 2040 Fund 287,507
Dreyfus Dreyfus Intermediate Term Income Fund 4,325,904
The Goldman Sachs Group Goldman Sachs Capital Growth Fund 4,809,701
MFS Investment Management MFS Value Fund 1,042,526
MFS Investment Management MFS Massachusetts Investors Growth Stock Fund 2,604,126
MFS Investment Management MFS Mid-Cap Growth Fund 1,133,615
AIM Investments AIM Aggressive Growth Fund 4,052,308
Franklin Templeton Franklin US Government Securities 116,530
Franklin Templeton Templeton Foreign Fund 28,337
Janus Janus Advisor International Fund 1,887,067
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Total mutual funds 21,660,191
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Common stock:
*Kirby Corporation Common stock 10,917,579
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*Participant loans Interest rates ranging from 5.25% to 10.5% 4,933,368
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Total assets (held at end of year) $55,207,973
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*Parties in interest to the Plan.
See accompanying report of independent registered public accounting firm.
9
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the plan administrator, which administers the Plan, has duly caused this annual
report to be signed on its behalf by the undersigned hereunto duly authorized.
DATE: June 23, 2004 KIRBY 401(k) PLAN
KIRBY CORPORATION
PLAN ADMINISTRATOR
BY: /s/ Jack M. Sims
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Jack M. Sims
Vice President
Human Resources
of Kirby Corporation
INDEX TO EXHIBIT
EXHIBIT NUMBER DESCRIPTION
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23.1 Consent of Independent Registered Public Accounting Firm