Welcome to the Kirby Corporation 2013 Fourth Quarter Year End Conference Call. My name is Trish and I'll be your operator for today's call. (Operator Instructions) I would now like to turn the call over to Steve Holcomb. Mr. Holcomb, you may begin.

Thank you for joining us this morning. With me today are Joe Pyne, Kirby's Chairman and Chief Executive Officer; David Grzebinski, Kirby's President, Chief Operating Officer and Chief Financial Officer; Greg Binion, President of our Marine Transportation Group and Andy Smith, currently our Executive Vice President of Finance. During this conference call, we may refer to certain non-GAAP or adjusted financial measures. A reconciliation of the non-GAAP financial measures to the most directly comparable GAAP financial measures is available on our website at kirbycorp.com in the Investor Relations section under non-GAAP financial data. Statements contained in this conference call with respect to future are forward-looking statements. These statements reflect management's reasonable judgment with respect to future events. Forward-looking statements involve risk and uncertainties. Our actual results could differ materially from those anticipated as a result of various factors. A list of these risk factors can be found in Kirby's Form 10-K for the year ended December 31, 2012, filed with Securities and Exchange Commission. I will now turn the call over to Joe.

Thank you, Steve. Yesterday afternoon we announced record fourth quarter earnings of $1.13 per share, and near the upper end of our $1.15 per share guidance range. That compares to a $1.03 per share reported for the 2012 fourth quarter. A quarter which included a $0.09 per share credit reducing the contingent earn-out liability associated with our acquisition of United Holdings in April 2011. For the year, we again achieved $4.44 per share compared with $3.73 per share for the 2012 year. Our 2013 results included $0.20 per share and the 2012 results, a $0.05 per share credit to the earn-out liability associated with the acquisition of United. United continued liability earn-out was eliminated as of September 30, 2013. Our guidance range for last year was $4.37 to $4.47 per share. Now during the fourth quarter, our marine transportations inland and coastal tank barge fleets continue to experience healthy levels of demand across all market. High equipment utilization levels and favorable pricing trends. We continue to benefit from strong US petrochemical production levels, stable refinery production levels, the export refined products and fuel oils and the movement of crude oil and natural gas condensate from US shale formations. We did experience higher than anticipated delayed days in our inland operations during the quarter. Primarily, the result of high winds and fog along the Gulf Coast as well as some difficult weather in our coastal operations. Our land-based diesel engine service market remains challenged. We think this will improve in 2014. Our marine diesel and power generation markets were stable with results consistent to the prior quarters in 2013. As we announced in early January. David Grzebinski was named President and Chief Operating Officer. The first step in the succession plan that we announced in April of last year, with the goal of transitioning my Chief Executive Officer position to David, this year. I'm going to welcome Andy Smith to our management team. Andy, started in early January and his current title is Executive Vice President, Finance. Andy will replace David as Kirby's Chief Financial Officer in late February after the filing of Kirby's 10-K for 2013 and tend to step down as Kirby's CEO at our Annual Shareholder's Meeting in late April. I'll remain as Kirby's Executive Chairman and look forward to working with David and the Kirby Management team. I will now turn the call over to David, who will discuss in more detail our marine transportation and diesel engine service markets and give you a financial update. Following his remarks, I'll come back with some comments about our first quarter and year end guidance and outlook.

All right, thank you Joe and good morning to everyone. Let me start with our inland business. During the fourth quarter, our inland marine transportation sector continued its overall strong performance with equipment utilization in the 90% to 95% range in favorable term and spot contract pricing. We did as Joe mentioned experienced high delay days during the quarter, which was primarily the result of seasonal frontal system along the Gulf Coast and accompanied with some high winds and fog. Delayed days totaled 1,985 days which was 34% higher than the 1,479 delayed days reported in the fourth quarter of last year and 54% higher than the 1,289 delayed days reported in 2013 third quarter. For the fourth quarter, inland transportation revenues from our long-term contracts that is contracts over one year or longer or 75% of revenue with the remaining 25% spot of the term contracts, 57% were from time charters and the remaining 43% from contracts of the freight [indiscernible]. In the inland Marine Transportation Group term contracts renewed during the fourth quarter at a rate of mid-single digit kind of increases compared with the 2012 fourth quarter and which was consistent to prior quarters during 2013. Spot contract rates were up and they remained above term contract rates, which is also consistent with the 2013 prior quarters. Moving to inland tank barge constructions, during 2013 we took delivery of 70 new tank barges totaling approximately 1.4 million barrels of capacity, but we also retired 46 tank barges in return four leased tank barges removing approximately 800,000 barrels of capacity. For 2013 netting the two, we ended up adding 20 tank barges to our fleet and increasing our inland capacity by approximately 600,000 barrels. As of December, 31 we operated 861 tank barges with the capacity of 17.3…

Thank you, David. Our 2014 first quarter guidance is $1.05 to $1.15 per share. This compares with $1 per share earned in the last year's first quarter. A quarter that also included $0.05 per share credit from United's contingent earn-out liability. For the 2014 year, our guidance range is $4.75 to $4.95 per share compared to $4.44 in 2013. Remember that 2013 earnings included an accumulative $0.20 per share credit to the same earn-out liability. Our first quarter guidance assumes a modest improvement of 2013 fourth quarter pricing in our inland marine transportation markets. Markets that continue to operate at close to full utilization levels. Also assumes a continued strong coastal market with higher term and contract pricing. Our first quarter guidance includes some negative impact from unfavorable winter weather conditions, which we are experiencing certainly this month. On the inland side, we've experienced some extreme cold weather conditions on the Upper River System with below freezing temperatures, heavy ice on the Illinois, upper Mississippi and upper Ohio River's and with Wind Chill factors as low as 40 degrees below zero. We continue to operate on these rivers, despite the heavy ice conditions, but with additional horsepower or reduced tow sizes. The forecast for the area from St. Louis to Chicago is to remain below freezing for at least for the next 10 days. Now predicting weather is something that we are not good at, if weather continues to remain as miserable as it currently is, we may not have enough weather delays in our forecast. However, we are hopeful that we'll see the usual weather improvement we normally see beginning in late February and extending into March. For diesel engine service group, we do feel that we are at the bottom of the cycle for our land-based market and…

Thank you. We will now begin the question-and-answer session. (Operator Instructions). Our first question comes from Michael Webber from Wells Fargo. Please go ahead. Michael Webber – Wells Fargo Securities: Good morning, guys and welcome Andy.

Thank you. Michael Webber – Wells Fargo Securities: So I wanted to focus on the coastal market and you placed an order for your first ATB or your latest ATB a bit earlier, just curios maybe how much of an opportunity is there within that coastal market to place additional orders and stand and keep that growth rate and kind of in place and always talked about that for the last couple quarters, but maybe since you pulled the trigger on one. I guess, how much of opportunity you said is there or are you any closer to adding to that?

Michael, this is David. There is still quite a bit opportunity. There's not really been much new coastwise capacity added in the 200,000 barrel and less market. We see increasing demand for moves crude and condensate moves are a big part of that, but we're also seeing other volumes pick up as well. We are of course in discussion with other customers about their needs and it's quite possible we could rebuild additional units beyond just this 185. Michael Webber – Wells Fargo Securities: That's helpful. As my follow-up kind of along those lines. Earlier this year, a very late 2014 or 2013 rather we saw Kinder Morgan enter the coastal space by APT and their MR's. When you think about that new entrant, do you look at them as a potential competitor around the coastal space granted they're operating larger assets and you think, we'll see other large land-based player's start-end of the year, the June that space?

We of course operate smaller units. We are not going to directly compete with them. I see it, they're frankly is positive because to affirmation by a pretty sophisticated investor somebody that understand the supply chain of its customer base that, the marine vessel is an important component of the supply chain, so we welcome them in the space. We think that they're very good operator and glad to have them there.

To be clear Mike, we don't compete with the MR tankers. Most of our moves are regional in nature, we get into to some smaller docks that the big tankers can't get into them or what not. Michael Webber – Wells Fargo Securities: Sure. The question is more around moving into the space and doing more and then I think, that Joe kind of handled that. So thanks David and thanks, Joe. Thanks for the time.

Thank you, Mike.

Our next question comes from Greg Lewis from Credit Suisse. Please go ahead. Greg Lewis – Credit Suisse: Yes, thank you and good morning guys.

Good morning, Greg. Greg Lewis – Credit Suisse: David, you mentioned a little bit on the guidance about some of the weather delays wind, fog does that pertains to the coastal markets given that the weather dynamics of the coastal business are a little bit more harsher then what we seek from time-to-time in inland. How should we be thinking about that because I mean, clearly it seems like as we think about the first quarter that is going to be, could provide some dealt it to your earnings performance and I guess in the fourth quarter, it impacted it. Where should we be thinking about that having the most impact, is that more of a West Coast impact, is that in the Gulf of Mexico or is it on the US East Coast or is it a combination of all three?

It is probably closer to a combination. I mean certainly in the West Coast up in Alaska. The seasoning can extend in the fourth quarter or it can be shortened depending on how quickly the weather moves in and likewise, as you come out of the winter months, how quickly you can go back to work in the Alaskan market. On the East Coast, we'd ice in the Hudson River. I'm sure you're familiar with this that does flow down a little bit and in some cases. You've got to be careful how you move through ice.

It's mitigated by time charter.

Right. Greg Lewis – Credit Suisse: And then my just follow-up question. It's going to be more on inland. I mean, you guys are in a great spot here. I mean the markets been go in your favor for the last few years. As we think about the market and how customers are thinking about the market right now as we start in 2014. Have customers changed their mindset at all in terms of thinking, the outlook for this sector looks pretty tight, the supply-demand looks pretty tight? Have you seen customers may wanting or trying to have conversations with you and others about potentially building out the contract duration and extending charters? Are you seeing any of that or is it more just status quo in that market?

Yes, no more than usual. I think the customers are comfortable with the length of term with their operators. So we are not seeing a push for that much length. It depends on the customer push, but I would say that it's about where it was in 2013. Greg Lewis – Credit Suisse: Okay, guys. Thank you very much for the time.

Our next question comes from Jon Chappell from Evercore. Please go ahead. Jon Chappell – Evercore Partners: Thank you. Good morning, guys. Joe and David, my first question is on the land-based diesel engine services. Obviously a little bit of potential in light, in the end of the tunnel here. I'm just wondering, do you think about the potential for modest improvement in that business? What's the balance between kind of the OEM stuff which had been very successful in years passed and as gas price has moved up pretty significantly over the last three months versus the remanufacturing stuff that it seems that you'd been shifting your focus to, since you've taken on United.

Jon as you know, we think that the real sweet spot at United is going to be reman business, having said that if we had the capacity and we get order for new equipment of course, we are going to build it. We'd like to have a combination of both, but as you look at the kind of the ratio of new versus reman, we would like to wait it towards reman. We think the opportunity for margin improvements are better there. The service side of the business, it is more predictable. We think its steadier, but that doesn't mean that we are not going to pursue building in frac spreads and related components. Jon Chappell – Evercore Partners: Got it and then for my follow-on. A theme that, we talk about frequently is just the uses of cash. You obviously have still pretty decent size CapEx program and then the ATB built for your customer, but when you think about the amount of cash you're generating. You already paid down a lot of debt, I mean you can potentially be not debt free, but close to debt free with the exception of your senior notes. How do you weigh kind of the opportunities between new builds, building the suite, acquisition opportunities and maybe just an update there and then also any further thought to the implementation of a modest dividend, which may not have to be mutually exclusive with the expansion going forward.

Yes, Jon I think it can be a very fairly consistent with our prior answers. We are going to maintain our fleet and look it. Well maybe adding some additional coastal equipment as you see is due with this 185, they're quite expensive $75 million to $80 million if we had, some more of that could use some cash. Clearly, we will maintain our fleet and keep that in top notch condition. We'll be looking for acquisitions as well, is to and very hard to predict that would be our first choice for use of cash, consolidating acquisitions as you know there is still 40 plus inland players out there and a dozen or so coastwise players, hard to predict acquisitions but that would be our preferred use of cash. Absent, being able to get one done with probably be leverage to more but clearly we are looking at, if we continue this way, we will have to return some cash to the shareholders and we will look for either share repurchase opportunities or dividend, but again we hope to be able to use it to add some equipment coastwise as well as do some acquisitions.

And just to follow up on David's comment. I think we believe, that we continue to use our free cash flow, reinvesting in the business. If we conclude that's not possible, then we will consider other things, but we think the prospects of continued investment still are strong. Jon Chappell – Evercore Partners: Understood. Thank Joe and David.

Thanks, Jon.

Our next question comes Ken Hoexter from Bank of America Merrill Lynch. Go ahead. Ken Hoexter – Bank of America Merrill Lynch: Great, good morning Joe, congrats on your next [option] and thanks for the legacy of the solid management team you leave behind, but maybe David you can talk a bit about. Now that to following Jon's question on CapEx. Your thoughts on the market overall in terms of pace of growth that you see on the market on the let's go with the inland barge side first.

There is some building going on surely, it's probably around the same level as it was last year retirements are around the same level. We anticipate, we don't for sure, but right now all that capacity is being absorbed every day. We are searching for barges to satisfy customer's needs, so things are pretty good now. Can we overbuild, will we overbuild? You know we will as an industry, we always do but it seems like with the volumes that we are seeing now going to continue for a while. And we've got this chemical renaissance is happening with the chemical plant expansions indeed even Greenfield plants. They're going to take years to play out as you know it takes a while for permit and build these big ethylene plants in large chemical [complexes]. So we will see where that goes, but so far so good, but again I'm not trying to sugarcoat it as an industry we will overbuild just doesn't seem like we are there, any time in the near term. On the coastwise business, it's I think we've got only a pretty long runway. It takes as you know 18 months to two years to add capacity not a lot of capacity being built right now and then when you look at the fleet, at least the fleet of 200,000 barrels and less. There is 270 or so in that fleet, good 40 of them are 25 years or older. So I think we've got a longer runway on coastwise, it looks pretty good.

And let me just add some color to overbuilding. I think what David referring to is he, inevitability of capital intensive businesses not standing good times. I think with respect to this particular business cycle. We are providing the lines are consistent. I think the industry is going to recognize, when it can't absorb the equipment and I'm reasonably optimistic that we will tear down the building. Even as you look at shipyard slots and availability for 2014. There are slots available and I think the industry is mindful that there is only so much capacity that can be absorbed. So borrowing a volume event, I'm not particularly worried about it. Ken Hoexter – Bank of America Merrill Lynch: And Joe, I appreciate that insight, thank you. Just the new barges, is this solely for crude is it, for petroleum, I'm sorry chemical what is the goal with the news ads? I meant the ATB, I guess.

Is this our ad, you meant the ATB? Ken Hoexter – Bank of America Merrill Lynch: Yes, I'm sorry the ATB. Yes.

No, that she'll be capable of moving crude or petrochemicals, I think the initial thought is probably crude but you know the customer can change direction because the barge is very capable.

And Ken just coming back to your original question. I think what you were looking for, what you think our view is, if our growth rates going forward. Ken Hoexter – Bank of America Merrill Lynch: I think David on it, initially just on the thoughts on the runway for the whole market, right just to understand and he got to the point right there overbuild or you see [indiscernible] for not overbuild at some point, but it really was kind of the industry growth and relative to what the industry is adding in terms of capacity?

Okay, got you. Ken Hoexter – Bank of America Merrill Lynch: So my last one is just back to the thoughts on rates. When you think about the coastal marine, if I look at the inland barging? Once that hit that utilization over that 90%, 95% range. It seemed like you had maybe two years of very, very robust rate growth and then kind of long runway of mid-teens growth. Any reason why we shouldn't think about that in terms of rates as you get back to that reinvestibility level on the coastal business?

Meaning that? Ken Hoexter – Bank of America Merrill Lynch: That we see some supersized rate increases to get you to that point of reinvestibility on coastal side and then proper returns I guess for the investment.

Well, I think initially you're going to see it two-tier market. You're going to see higher rates for newer equipment, than you get for existing equipment and then that gap is going to narrow. How quickly it narrows that's uncertain but to get reinvestment in the business particularly with respect to replacements investment. You need to get rates of that justifies you spending the money that replace the equipment. So it will happen, it happened on the inland side of the business. You may not get all rates up to replacement, that maybe a blended rate but rate should continue to rise until you approach the kinds of returns that you need to invest a capital to build the vessels. Ken Hoexter – Bank of America Merrill Lynch: Wonderful, truly appreciate the time and insights. Thanks, guys.

Our next question comes Jack Atkins from Stephens. Please go ahead. Jack Atkins – Stephens Inc: Good morning, guys. Thanks for taking my questions. Just to go back to Ken's I guess first question about the expansion that we are seeing and we are hearing about on the domestic chemical side. You guys it was quite a number of projects in the back of your investor deck. I guess, when you all are sort of modeling the industry out internally and looking out over the next two, three, five years. What sort of growth rate do you think that the domestic chemical barging industry will be seeing here over the next several years because it seems like there's a fairly a long runway of growth ahead of us.

Jack, it's really hard to predict in terms of percent. I wish we could, wish we were smart enough to pencil it out and stay it's going to be 4.5% annual growth but or some number like that. it is really hard to say because as you look at these projects depends on certain projects may have quite a lot more barge moves than others. For example, our methanol project could have a lot, on ammonia project for example. Whereas if it's just a light hydrocracker, just ethylene that's converted into polyethylene not a lot but if it's a flexi-cracker it may have coke products and what not so. It's complicated we really don't know, but given just thinking about it holistically if all that chemical capacity gets built, a good portion or not a good portion but a significant meaningful amount will end up on a water.

It's going to be positive pretty sure and Joe it depends on where it's going to go, remember got a little longer. The longer the trip, the more barges it takes. I don't think there's a computer model big enough to figure all that out, but it's clearly positive. Jack Atkins – Stephens Inc: That's understandable and then for my follow-up on the diesel engine side. I guess we've been through anticipating a recovery in that market now for in a better part of it, a year and certainly I think all indications. We may see that, in the second-half of '14. At what point, would you all begin to look at the business and maybe say, we are carrying some extra cost here and if we don't see that recovery take place, maybe it's time to sort of repair back and get that business profitable just based on the current level of demand.

Yes, great question. This year. Jack Atkins – Stephens Inc: You know Joe, is there a way to quantify the extra cost that you think, you're carrying though?

I don't, I'm not prepared to do that, right now. We certainly looked at that, we believe that business is going to recover you can take cost out of it now but with little pretty foolish, if the business is doing well towards the end of the year and you're not prepared to accommodate it. We think that, there's not only a lot of reman, that needs to happen but there is also some additional equipment that's going to be built and we want to position ourselves to do that. We've already incurred most of the paying and truthfully, we've said this before we predicted the slowdown in 2013. We also predicted a ramp up in 2011 and 2012, what we got wrong was the magnitude of both of them and when you even them out and you bring the earn-out back, it actually is been an okay investment for us. We think that, 2014 is going to be the year where we get that contract and we are very well positioned we think to capture that reman business which long-term should be steadier, better margins, a nice kind of service business that has similar characteristics to what we do on the marine side. Anything add to that? Jack Atkins – Stephens Inc: Guys, thanks for the time.

Our next question comes from Kevin Sterling from BB&T Capital Markets. Please go ahead. William Horner – BB&T Capital Markets: Good morning, gentlemen. It's actually William Horner on for Kevin. Sticking with diesel for a second and the signs that the improvement you all saw late in the quarter. Are you certain to provide more color on a region behind these? Do you think it was indicative of maybe customers firming up their 2014 capital plans maybe, despite the natural gas prices we saw or do you think, it was just more general greenchutes of the cycle starting to turn.

Yes, it's probably more. Well we're hopeful that it's greenchutes. There could be some year-end capital spending true up that you occasionally see, but it feels pretty positive William. I'd call it greenchutes that resets, that's our hope. It certainly feels that way, when you talk to the customer they're lot more constructive this year. I think they're being prudent and cautious. They don't want to over commit but they're certainly a lot more constructive and we are quoting a lot more potential activity both on reman and new equipment. William Horner – BB&T Capital Markets: Okay, great David that's helpful. Thank you. As going back to the marine business during the quarter, is there any way to, we can quantify the weather impacts either from a path line or earnings perspective?

That really difficult. Yes it's just so difficult because there is so many different moving parts. William it's just too difficult to quantify.

That would be easier at the end of this quarter. William Horner – BB&T Capital Markets: Okay. Fair enough. One more then I'll turn it over. Have you seen or you anticipate any impact to the inland crude space, now that the Southern, more like the Keystone Pipeline that's opened up.

We are certainly not seeing it. There's still plenty of demand. Remember that we're describing the use of barges to transport crude oil. In the inland space, is Eagle Ford crude oil condensate to kind of Houston, Port Arthur area and crude oil and condensate stranded in the Midwest that needs to come south to be refined and is not doesn't have pipeline availability and then some Canadian crude still but we are really not seeing that leg have an effect on the routes that we service. William Horner – BB&T Capital Markets: Okay. Joe that's helpful. Appreciate your time.

Our next question comes from Chaz Jones from Wunderlich. Please go ahead. Chaz Jones – Wunderlich Securities: Good morning, guys. My first question was just thinking about the real tank car standards that have been talked about a lot recently with accidents. If the government moves to raise the standards for rail/ tank cars, if that would have, any implications whether positive or negative for Kirby's marine business. Obviously understanding that your equipment is already double-hulled.

Well, we are not only double-hulled. We are inspected, taken out of the water, walked around gaged and we welcome, the same criteria's is imposed on other modes of transportation. It's kind of raise your cost and that we're kind of already there, but it may improve the cost advantage that barges have, barging already endures cost advantage to rail. So we are just going to expand it, if it does anything. Chaz Jones – Wunderlich Securities: Got it and then. Maybe just looking for a little bit of clarification on the guidance particularly the land-based side of the business. Obviously you plan to perhaps not a lot of improvement in Q1, but maybe some progresses as to the year goes on. Are we kind of thinking about returning to sort of low-mid-single digits type of operating margins there or we thinking about that round.

Yes, as we think particularly about United in diesel engine land-based business. We've kind of built into our guidance a little bit of recovery in the back half of the year. I don't have the margin off top on my head, yes probably mid-single digits moving up from where it is now, is what we are anticipating as we move through the year. Chaz Jones – Wunderlich Securities: Okay, great. Thanks guys, thanks for taking the questions.

Our next question comes from John Barnes from RBC Capital Markets. John Barnes – RBC Capital Markets: Good morning, guys. Thanks for your time. Joe and your comments about pipeline capacity in some of the crude coming out of the Midwest, there may be dozen pipeline availability. I guess right now, you've got a couple pipelines are actually down for maintenance. I think [indiscernible] are being the big one. Are you seeing any impact on volumes of crude oil coming out of the Midwest as a result of that pipeline outage?

We don't think so, but I mean truthfully John I'm not sure, we know. The [indiscernible] coming out of the Midwest that we handle is pretty consistent, not really change to the flow there and we are not hearing anything within the business, but I'm not sure we know. John Barnes – RBC Capital Markets: Okay. All right. My second question is kind of two part. One year term, one longer term and that is in 2014 are you aware of any maintenance work to be done on the Rivers that would have some more kind of implications as you experience last year with the lock outage in Algiers and that kind of thing and then the longer term, portion of that question is. I guess with the Transportation Bill being proposed right now that kind of thing. Do you believe that there is going to be better funding for some of these projects and we should see more of these projects that maybe improve the efficiency of the River system over the next several years.

Yes, I think assuming water gets through and every indication is that, it will. It may be later this year, before it's passed or some concern about getting through some of the primaries it gets back to Congress for a vote, but it did, it went out of the House almost unanimous. So I think it's going to get through that certainly going to help, but I think more important the marginal efficiency improvements is that. We are committed to making the investments in the infrastructure that it's going to make it more reliable. You referred to Algiers Lock, well Algiers lock was a unplanned outage and some of the other problems last year were plant outages. With respect to looking to 2014, I don't think there is anything that's unusual that's occurring from a plant perspective. I think that most every year, you're doing something. So it I don't think there is anything that is a typical to the maintenance cycle, hasn't been kind of there for the last several years. John Barnes – RBC Capital Markets: Okay. All right, thanks for your time and congrats on your new role.

Thank you, John.

Our next question comes from John Larkin from Stifel. Please go ahead. John Larkin – Stifel Nicolaus: Thank you, gentlemen for taking my questions, this morning. Had a question around the notion of the utilization. You mentioned that the utilization, the inland barge fleet has stayed constant at about 90% to 95% later on, mentioning that was very close to full utilization and then the coastal utilization has stayed at about 90% and then there was a comment in your prepared remarks suggesting that perhaps that can be pushed up. What is the maximum utilization rate that is sort of operationally possible, I guess given the real world and is there anything different between the inland operation and the coastal operation that makes those maximum levels different?

I think, 95% is probably essentially maxed capacity. It's hard to get over 95% with doing some crazy things. So we are essentially at full capacity on the inland side. Coastwise, you get some movement regionally. You know Alaska has some seasonality, so you do have some equipment that doesn’t get use to year around. Likewise, you can have some other things that for example, New York Harbor when it's very cold, we can be very busy in New York Harbor. So there is some seasonality that factors into your overall utilization. More so on the coastwise business than the inland business. Inland like I said, is full capacity running 90% to 95% coastwise is in the 90%, but we have periods where we are up close to that 95% range. I don't know if that answered your question, John? John Larkin – Stifel Nicolaus: Yes, I think it does. It sounds like you're awfully close. I was really trying to think about just one of the incremental margins that might be available, if you could push coastal up from say 90% to 95%. I would guess there is incremental margins that rather attractive. They're very kind of pushing up against the reasonable utilization levels already.

Yes, I think that's right. There is some room left though. There is some room left to be sure. John Larkin – Stifel Nicolaus: Okay and then as the market has improved, how have the shipyards behave in terms of pricing tank barge construction, have you seen those prices rise or you a big enough player sort of through thick and thin that you're able to sort of mitigate some of that pricing pressure.

Yes, it's always a tug of war, John. I think that we do have a lot of leverage because we have more units than anybody else in the country and we try to use as leverage. I would say that shipyard pricing is modestly up. John Larkin – Stifel Nicolaus: Okay, I take that to be in say single digits.

Yes, low-single digits. John Larkin – Stifel Nicolaus: Got it. Thank you very much.

Our next question comes from John Mims from FBR Capital Markets.

Hi guys, this is Chris [Jerian] for John. Just kind of broadly speaking. I'm not sure, you're willing to take a stab at this one but, there's been obviously a lot of talk in the market about net backs for crude oil versus and pipes versus rails. I was wondering where barge fits into pricing standpoint. If its say $10 a little bit more to take a barrel, per barrel to move from Bakken to the Gulf. I wonder, how much that price change if you were to switch to barge and say Chicago or St. Louis then going down to the Gulf? Just trying to get an idea for the differentiation of the value proposition there.

That's a good question. Look at it this way. The customer has noted some of these guys are very sophisticated are working hard on every day basis to get the cheapest, reliable feedstock to the refinery and that's very dynamic because you can have differential in different crudes West Texas, Louisiana and [Brent], Saudi. They're going to be priced at given times differently you have transportation options that change that get disrupted. So it's a very dynamic process and over the long run. You're going to have a system that deliver the objective kind of that low cost feedstock that is reliable. It's got to be reliable because if you don't have it, you shut the facility down. When you're looking at barge versus rail. You're going to have to look at it in the context of pricing, reliability. Pricing of the product, reliability of that source. It's going to move around a lot, it's going to be a very dynamic process.

Right just to that point and my sense is that, there is been more talk around crude by rail, perhaps a bit of regulation coming in to be determined of course, but I wonder if you guys are getting anymore interest from producers looking to maybe shift their shipping methods in order to kind of head start that maybe little bit regulatory risk and I don't know if you're seeing that, but any color would be really helpful?

Most of the supply is not on the river. So it either has to go by pipeline, rail or truck to get there. So look at rail as a way of delivering product to the river where it can then be levered on barge use. The reason that rail is popular and the pipelines have not taken that volume is that, the rail is not demanding long-term agreements. Its flexible with respect to moving crude oil from different sources, but in the total kind of feedstock cost dynamics. It's going to be a combination of rail, pipeline and marine vessels that meet particularly shippers, pipeline for instance. It's going to move around and it's going to move around based on a number of factors. But as you look at kind of our business, we think that we are going to continue to be a significant transportation mode moving it. At least for what we see today, it's going to continue to grow. The demand is going continue to grow as more crude oil, more gas condensate comes online.

Right. Thanks for that. That's really helpful. I guess, it's my follow-up question and it's right along that same point. I was just wondering, if you guys had any color on pricing differentials between railing crude to California refineries. Obviously but again, a lot of regulatory hurdles there versus railing crude to the Pacific Northwest and then barging it down in coastal barges, whether it's via Vancouver-Washington or any other port, wondering how you guys are kind of thinking about that opportunity on the West Coast.

We think that, the marine component is going to be a important logistical part of supplying crude to those refineries. Now some of it's going to be railed in, but a lot of it's going to be moved by water and the differentials, I'm not sure anybody really knows what they're yet, but there is a lot of challenges for kind of getting a lot of crude oil delivered by rail in California. There is a lot of moving parts in that.

Hi, Chris this is David. You might call Steve Holcomb after there is a newsletter out there that talks about some of these rates that they estimate some of the rates, then he can share that with you.

Okay, thanks David that's really helpful. Okay, well that's it. Really appreciate you guys. Thanks.

Operator, we will take one more call please.

Sure. Your last question comes from Matt Young from Morningstar. Matt Young – Morningstar Equity Research: Good morning, guys. Thanks for letting me in. most of my questions have been answered, but I just wanted to follow-up on the previous question. In the coastal business, in terms of the [shale] oil movements that you talked about, what would you say that most of the longer term growth is likely to come from on a regional basis. Would you think that would be on the West Coast perhaps from Columbia River area and so forth around the Easter, maybe even cross Gulf.

Yes, I think it's all of the above. We are seeing it pretty much everywhere. Across Gulf we are moving a lot cross Gulf from Corpus Christi to Houston Port Arthur, New Orleans area. West Coast they're still trying to get the unit trains out to the West Coast and get that permitted but they're starting to pickup and it looks like it's going to grow fairly healthily. I mean, of course and there is a lot of unit trains going into Albany making from Albany will be taking crude in [Thomasville] way down to the Hudson to the refineries on the East Coast. So I think, Matthew it's more all of the above, then anything else. Matt Young – Morningstar Equity Research: And do the refineries, are they continuing to adjust and shift some of the lighter crude is that kind of where most of this is coming from?

Yes, the East Coast refineries are set up to run light. They've been running Brent the lighter one, the Gulf Coast where refineries are really designed more for heavier crude and they've been putting in some [pre-flash] units and some other equipment to help maximize the potential of the lighter feedstock. Matt Young – Morningstar Equity Research: All right, great. That's all I have, thanks.

We certainly appreciate your interest in Kirby and for participating in our call. If you have any additional question or comments. Please give me a call, my direct dial number is 713-435-1135. We wish you a good day.

Thank you, ladies and gentlemen. This concludes today's conference. Thank you for participating. You may now disconnect.