(11)	CONTINGENCIES

On March 22, 2014, a tank barge owned by Kirby Inland Marine, LP, a wholly owned subsidiary of the Company, was in tow of the M/V Miss Susan and was involved in a collision with the M/S Summer Wind at the confluence of the Houston Ship Channel and the Texas City Y in the Texas City, Texas area. The tank barge was damaged in the collision resulting in a discharge of intermediate fuel oil out of one of its cargo tanks. There was no damage to the M/V Miss Susan. The M/S Summer Wind incurred damage to the bow of the ship.

The Company received a letter from the United States Coast Guard (“USCG”) designating it as the owner of the source of the discharge, Kirby tank barge 27706, under the Oil Pollution Act of 1990 (“OPA”) which obligates the Company for removal costs and damages and imposes on the Company the obligation to advertise the claims process by which persons who have claims may submit claims to the Company. The Company has accepted the letter and has undertaken to advertise the claims process, as well as accepting its ongoing responsibility for cleanup as a result of the discharge from its tank barge consistent with its obligations under the OPA.

The USCG and the National Transportation Safety Board are investigating the cause of the incident. The Company and the Captain of the M/V Miss Susan, as well as the owners and pilot of the M/S Summer Wind, have been named as parties of interest in the investigation. Sea Galaxy Ltd is the owner of the M/S Summer Wind. The Company continues to work with the Coast Guard and other federal, state and local authorities, response contractors and its own personnel to mitigate the environmental impact of this incident.

The Company has been named as a defendant in class action lawsuits filed in the United States District Court for the Southern District Court-Galveston Division against it and Sea Galaxy Ltd/Summer Wind. The actions include allegation of business interruption, loss of profit, loss of use of natural resources and seek unspecified economic and compensatory damages. In addition, the Company has received claims from numerous parties claiming property damage and various economic damages. The Company has also been named as a defendant in a civil action by a crewmember of the M/V Miss Susan, alleging damages under the general maritime law and the Jones Act. The Company expects that additional lawsuits may be filed and claims submitted.

The Company maintains certificates of financial responsibility as required by the USCG’s regulations. The Company has various insurance policies covering liabilities including pollution, property, marine and general liability. The Company believes it has satisfactory insurance coverage for the cost of the cleanup operations, as well as other potential liabilities arising from the incident. As of March 31, 2014, the Company recorded an accrued liability of $100,425,000 and an insurance receivable of $99,425,000 which takes the Company's $1,000,000 deductible into consideration. However, the accruals represent current estimates since the cleanup, litigation and claims process are ongoing. The Company does not expect the outcome of the incident to have a material adverse effect on its consolidated financial statements; however, there can be no assurance as to the ultimate outcome of the incident.

The Company is also involved in various legal and other proceedings which are incidental to the conduct of its business, none of which in the opinion of management will have a material effect on the Company’s financial condition, results of operations or cash flows. Management believes that it has recorded adequate reserves and believes that it has adequate insurance coverage or has meritorious defenses for these other claims and contingencies.

The Company has issued guaranties or obtained standby letters of credit and performance bonds supporting performance by the Company and its subsidiaries of contractual or contingent legal obligations of the Company and its subsidiaries incurred in the ordinary course of business. The aggregate notional value of these instruments is $41,922,000 at March 31, 2014, including $8,280,000 in letters of credit and $33,642,000 in performance bonds. All of these instruments have an expiration date within four years. The Company does not believe demand for payment under these instruments is likely and expects no material cash outlays to occur in connection with these instruments.