Putting America’s Waterways to Work NYSE: KEX May 2015
Forward Looking Statements Non-GAAP Financial Measures Statements contained in this presentation with respect to the future are forward- looking statements. These statements reflect management’s reasonable judgment with respect to future events. Forward-looking statements involve risks and uncertainties. Actual results could differ materially from those anticipated as a result of various factors, including cyclical or other downturns in demand, significant pricing competition, unanticipated additions to industry capacity, changes in the Jones Act or in U.S. maritime policy and practice, fuel costs, interest rates, weather conditions and the timing, magnitude and the number of acquisitions made by Kirby. Forward-looking statements are based on currently available information and Kirby assumes no obligation to update such statements. A list of additional risk factors can be found in Kirby’s annual report on Form 10-K for the year ended December 31, 2014 filed with the Securities and Exchange Commission. Kirby reports its financial results in accordance with generally accepted accounting principles (GAAP). However, Kirby believes that a certain Non-GAAP financial measure is useful in managing Kirby’s businesses and evaluating Kirby’s performance. This presentation contains a Non-GAAP financial measure, EBITDA. Please see the Appendix for a reconciliation of GAAP to the Non-GAAP financial measure, EBITDA. 2
Business Segments Marine Transportation Diesel Engine Services 69% 31% of 2014 of 2014 Revenue Revenue Largest U.S. Tank Barge Operator Nationwide Diesel Engine Services 3
Public Market Information NYSE: KEX Current Price (May 11, 2015) $ 82.21 Number of Shares O/S (May 6, 2015) 55.8M Market Capitalization $4,586M Debt (March 31, 2015) $819M Enterprise Value $5,405M Employees 4,500 4
Company Overview Marine Transportation • Largest inland and coastal tank barge operator – 905 inland tank barges and 249 towboats – 69 coastal tank barges and 73 tugboats – 80% of inland revenues under term contracts, of which approximately 56% are under time charters – 85% of coastal revenues under term contracts, of which approximately 90% are under time charters Diesel Engine Services • Nationwide diesel engine services and parts provider for medium-speed and high- speed diesel engines • Manufacturer, remanufacturer, and service provider of oilfield service equipment and manufacturer of compression equipment Return on Capital Driven Investment Decisions Industry Consolidator Successful integration of 32 marine and 17 diesel acquisitions 5
Marine Transportation Acquisitions No./Tank No./Tank Date Barges Description Date Barges Description SeaRiver Maritime (ExxonMobil) 2003 64 1986 5 Alliance Marine American Commercial Lines ( black oil fleet ) 2005 10 1989 35 Alamo Inland Marine Co. 2006 * Capital Towing 1989 53 Brent Towing Company Coastal Towing, Inc. (operated barges since 2002 under 2007 37 1991 3 International Barge Lines, Inc. barge management agreement) 1992 38 Sabine Towing & Transportation Co. Cypress Barge Leasing, LLC (operated as leased 2007 21 barges since 1994) 1992 26 Ole Man River Towing, Inc. Midland Marine Corporation (operated as leased 2007 11 1992 29 Scott Chotin, Inc. barges) 1992 * South Texas Towing Siemens Financial (operated as leased barges) 2007 9 1993 72 TPT, Division of Ashland OFS Marine One (operated as leased barges) 2008 6 1993 * Guidry Enterprises Kinder Morgan (Greens Bayou fleet) 2011 * 1993 53 Chotin Transportation Company Enterprise Marine (ship bunkering) 2011 21 Dow Chemical (transportation assets) 1994 96 K-Sea Transportation (coastal operator) 2011 54 Hollywood Marine, Inc. – Stellman, Alamo 1999 270 Seaboats, Inc. ( coastal transportation assets ) 2011 3 Barge Lines, Ellis Towing, Arthur Smith, Lyondell Chemical Co. ( transportation assets) 2012 17 Koch Ellis, Mapco Allied Transportation Co. (coastal transportation assets) 2012 10 2002 15 Cargo Carriers Coastal Towing, Inc. (barge management 2002 64 Penn Maritime Inc. ( coastal operator) agreement for 54 barges) 2012 18 West Coast Barge Leasing (operated as leased barges) 2014 3 Dow/Union Carbide (transportation assets) 2002 94 Martin Midstream Partners (pressure barges) 2015 6 Shipper Owned (Red) Independent (Green ) * Towboats Only 6
Diesel Engine Services Expansions Acquisitions Internal Growth 1987 National Marine 1989 Midwest 1991 Ewing Diesel 1992 Seattle 1995 Percle Enterprises 2000 Cooper Nuclear 1996 MKW Power Systems 1997 Crowley (Power Assembly Shop) 2000 West Kentucky Machine Shop 2000 Powerway 2004 Walker Paducah Corp. 2005 TECO (Diesel Services Division) 2006 Global Power Holding Company 2006 Marine Engine Specialists 2007 NAK Engineering (Nordberg Engines) 2007 P&S Diesel Service 2007 Saunders Engine & Equipment Company 2008 Lake Charles Diesel, Inc. 2011 United Holdings LLC 2012 Flag Services & Maintenance, Inc. 7
Historical Revenue Growth Marine Transportation and Diesel Engine Services Revenue From Continuing Operations $2,566 2600 2400 $2,242 11.3% compound 2200 $2,113 annual growth 2000 1994-2014 $1,850 1800 In Millions 1600 $1,360 1400 $1,173 1200 $984 $1,110 1000 $1,082 $796 800 $675 $613 $567 $535 $513 600 $366 $301 $335 $318 $320 $327 400 200 0 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 8
Historical EPS Growth Earnings Per Share From Continuing Operations Excluding Non-Recurring Items $6.00 $4.93 15.0% compound $5.00 $4.40 1 $4.44 annual growth $4.10 1 1994 - 2014 $4.00 $3.73 $3.33 $2.91 $3.00 $2.34 $2.15 $2.29 $1.79 $2.00 $1.33 $0.31 $0.37 $0.42 $0.48 $0.52 $0.63 $0.82 $0.94 $0.82 $0.83 $0.98 $1.00 $0.00 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 Last Published Guidance See Appendix for reconciliation of GAAP to Non-GAAP earnings per share Earnings per share have been revised to reflect 2-for-1 stock split effective May 31, 2006 (1) Kirby most recently published earnings guidance in the April 29, 2015 press release announcing earnings for the 2015 first quarter. That guidance is shown for convenience only and does not constitute confirming or updating the guidance, which will only be done by public disclosure. 9
MARINE TRANSPORTATION 10
U.S. Inland and Coastal Waterway Systems Kirby is one of the few operators offering distribution throughout the St. Paul Mississippi River System, Gulf Intracoastal Waterway, Sioux Pittsburgh along U.S. coasts, plus City Chicago Alaska and Hawaii Cincinnati 12,000 miles of navigable Charleston St. Louis waterways link America’s Tulsa heartland to the world St. Marks Houston Corpus New Orleans Christi Texas and Louisiana account for 80% of the total U.S. production of chemicals and petrochemicals 11
Barge Industry Facts The U.S. barge industry serves the inland waterways, U.S. coastal ports, Alaska and Hawaii – The inland tank barge fleet is comprised of approximately 18,000 dry cargo barges and 3,700 liquid tank barges – The coastal market, including Alaska and Hawaii, encompasses approximately 260 tank barges that are 195,000 barrels or smaller Kirby is principally in the liquid cargo transportation business No competition from foreign companies due to a U.S. law known as the Jones Act Equipment not subject to economic obsolescence because draft, lock and port restrictions limit the size of barges Barges are mobile, carry wide range of cargoes and service different geographic markets Water transportation plays a vital role in the U.S. economy U.S. waterway systems are an environmentally friendly mode of transportation 12
Marine Transportation Demand Drivers Revenue Markets and Distribution * Products Moved Products Drivers 46% Petrochemicals and Benzene, Styrene, Methanol, Acrylonitrile, Consumer non-durables – 70% Chemicals Xylene, Caustic Soda, Butadiene, Propylene Consumer durables – 30% 33% Black Oil Residual Fuel Oil, Coker Feedstock, Vacuum Fuel for Power Plants and Ships, Gas Oil, Asphalt, Carbon Black Feedstock, Feedstock for Refineries and Road Crude Oil, Ship Bunkers Construction 18% Refined Petroleum Gasoline, No. 2 Oil, Jet Fuel, Heating Oil, Vehicle Usage, Air Travel, Weather, Products Diesel Fuel, Naphtha, Ethanol Refinery Utilization 3% Agricultural Chemicals Anhydrous Ammonia, Nitrogen-based Liquid Corn, Cotton, Wheat Production, Fertilizer, Industrial Ammonia Chemical Feedstock Usage * For the three months ended March 31, 2015 13
Shale Liquids Production Creates New Transport Needs Puget Sound Vancouver Bakken Albany New York Utica Harbor Marcellus Niobrara Wellsville Delaware Bay San Francisco Bay Weirton Kenova / Natrium Los Angeles Cushing Permian Haynesville New Crude Barge Baton Rouge Originations St. James Pt. Arthur New Orleans Houston New crude-by-rail unit train routes LOOP Freeport Eagle Ford Corpus Christi 14 Sources: American Petroleum Institute, Company announcements, Kirby Corp.
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