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72 Maritime Reporter & Engineering News ? SEPTEMBER 2013 the environment. How would you best describe your management philosophy? It?s hard to succinctly describe a philosophy. What I tell people: ?When in doubt, do the right thing.? I think what?s made Kirby successful is that we?re very disciplined in the way we invest; we?re trying to get a 12% return on capital over the business cycle; when you make a capital mistake it lives with you forever; we?re patient investors; we think that the market and your balance sheet will tell you what you need to do. There will be times when it makes sense to buy, like the last 24 months in the offshore space, where we went from essentially a zero market share to a 30% market shareThere are times when it says that these assets are too expensive you don?t want to buy them, you want to add capacity, and we?re probably entering in that peri-od now. You?ll probably see us add some capacity offshore, and we?ve already added a little inland already. There are times that you look at your balance sheet and it?s a little over leveraged and you want to focus on paying down debt; as a public company there are times when it is apparent that your stock is underval-ued and you want to buy that stock back.I?ve never thought of Kirby as being just an owner of marine assets, I?ve thought of Kirby as a service company that uses marine assets to provide a service that our customer pays us for. Our ego really isn?t tied up in the number of assets that we own or the size of them, it?s about servicing the customer. What we?re looking for is a long term relationship that can go on for many years, that can be codiÞ ed in a contract that continues to get renewed. At the end of the day, you want to be a part of that supply chain. Another thing we say is that we make decisions in this company as if we are managing it into perpetuity. So that drives the development of talent, that drives succession, it drives invest-ment in ß eet, people, training and sup- port. It really isn?t about how big is the biggest barge; it?s about how you use the equipment and the people to give your customer something they need.The Maritime business is a hard cycli-cal business ? Well I like cycles! But can you put in perspective for me the recent economic crisis and fall out, and how it has fundamentally changed Kirby. Remember that when I started to run Dixie Carriers, business was a lot worse than it ever was in 2008. The busi-ness collapsed. With challenge comes opportunity. Cycles create wonderful buying opportunities, and for a company that has grown through acquisition, we see those as opportunities. We didn?t see the Þ nancial col- lapse, but we did see that the path we were on was unsustainable, so we started to prepare for the end of this run; we had contingency plans in place that would take costs out of the business and scrap vessels. So when it happened in 2008, we were prepared. For the Þ rst time in my business career I had a consultant come in to challenge us, to make sure we were considering all of the right things. They did a really good job of that; we probably would have gotten two-thirds or three-quarters, but they got us all the way there.So what was the strategy? In 2008 and 2009 we took about 20% of our G&A out, and while our rev-enue went down, our margins went up. Part of that is due to how quickly we took some costs out of the business; part of that is we extended some contracts, and shufß ed our spot to contract mix from about 70% contract to 80% contract. The result: coming out, we had a clean bal-ance sheet ? we didn?t have any debt; we had cash on our balance sheet, and The Workboat Edition ? Kirby(Photo: Kirby)?I?ve always been somewhat of a contrarian .. ... when business gets really good I get nervous and when it gets really bad I get excited.? MR #9 (66-73).indd 72MR #9 (66-73).indd 728/30/2013 10:21:31 AM8/30/2013 10:21:31 AM