Putting America s Waterways to Work NYSE: KEX March 2018

Transcription

1 Putting America s Waterways to Work NYSE: KEX March 2018

2 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, 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

3 Business Segments Marine Transportation The largest inland and coastwise tank barge fleets in the United States 60% of 2017 Revenue Distribution and Services Nationwide service provider and distributor of engines, transmissions, parts, industrial equipment and oilfield service equipment 40% of 2017 Revenue 3

4 Public Market Information Share Price on February 26, 2018 $76.85 NYSE: KEX Shares Outstanding (as of February 26, 2018) Market Capitalization 59.7MM $4,586MM Net Debt $1,408MM Enterprise Value $5,994MM 4

5 Marine Transportation Company Overview Largest combined inland and coastal tank barge operator 998 inland tank barges and 302 towboats* 56 coastal tank barges and 53 tugboats* 75% of inland revenues under term contracts, of which approximately 51% are under time charters 80% of coastal revenues under term contracts, of which approximately 85% are under time charters Distribution and Services Nationwide distributor and service provider for engines, transmissions, reduction gears, and related equipment used in oilfield services, marine, power generation, on-highway, and other industrial applications Manufacturer, remanufacturer and service provider of oilfield service equipment Provider of rental equipment including generators, material-handling equipment, pumps, and compressors for use in a variety of industrial markets Return on Capital Driven Investment Decisions Proven Acquisition Strategy Successful integration of 34 marine and 19 distribution and services acquisitions * As of February 26,

6 Marine Transportation Acquisitions Date Tank Barges Description Date Tank Barges Description Alliance Marine Alamo Inland Marine Co Brent Towing Company International Barge Lines, Inc Sabine Towing & Transportation Co Ole Man River Towing, Inc Scott Chotin, Inc * South Texas Towing TPT, Division of Ashland 1993 * Guidry Enterprises Chotin Transportation Company Dow Chemical (transportation assets) Hollywood Marine, Inc. Stellman, Alamo Barge Lines, Ellis Towing, Arthur Smith, Koch Ellis, Mapco Cargo Carriers Coastal Towing, Inc. (barge management agreement for 54 barges) Dow/Union Carbide (transportation assets) SeaRiver Maritime (ExxonMobil) American Commercial Lines (black oil fleet) 2006 * Capital Towing Coastal Towing, Inc. (operated barges since 2002 under barge mgmt. agmt.) Midland Marine Corporation (operated as leased barges) OFS Marine One (operated as leased barges) 2011 * Kinder Morgan (Greens Bayou fleet) Enterprise Marine (ship bunkering) K-Sea Transportation (coastal operator) Seaboats, Inc. (coastal transportation assets) Lyondell Chemical Co. (transportation assets) Allied Transportation Co. (coastal transportation assets) Penn Maritime Inc. (coastal operator) Martin Midstream Partners (pressure barges) SEACOR Holdings Inc. (inland barge assets) Hollywood/Texas Olefins, Ltd. ( TPC ) (unowned 50% partnership interest in pressure barges) Undisclosed (9 pressure barges, 4 30,000 barrel clean barges) Higman Marine, Inc. Shipper Owned (Red) Independent (Green) * Towboats Only 6

7 Distribution and Services Expansions Acquisitions Internal Growth 1987 National Marine 1991 Ewing Diesel 1995 Percle Enterprises 1996 MKW Power Systems 1989 Midwest 1992 Seattle 2000 Cooper Nuclear 1997 Crowley (Power Assembly Shop) 2000 West Kentucky Machine Shop 2000 Powerway 2004 Walker Paducah Corp 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 United Holdings LLC 2012 Flag Services & Maintenance, Inc Valley Power Systems, Inc Stewart & Stevenson LLC 7

8 In Millions Historical Revenue Growth 2,600 2,400 2,200 2,000 1,800 1,600 1,400 1,200 1, $327 $366 Marine Transportation and Distribution and Services Revenue From Continuing Operations 10.6% compound annual growth $513 $567 $535 $613 $675 $796 $984 $1,173 $1,360 $1,082 $1,850 $2, $1,110 $2,242 $2,566 $2,148 $1,771 $2,214 8

9 $6.00 Historical EPS Growth Earnings Per Share From Continuing Operations Excluding Non-Recurring Items $5.00 $4.00 $3.00 $2.00 $ % compound annual growth $1.33 $0.52 $0.63 $0.82 $0.94 $0.82 $0.83 $0.98 $1.79 $2.29 $2.91 $2.34 $2.15 $3.73 $3.35 $4.44 $4.93 $4.11 $2.62 $ $1.99 $ $ Earnings per share have been revised to reflect 2-for-1 stock split effective May 31, 2006 (1) 2017 earnings per share exclude a one-time deferred tax revaluation benefit of $4.83 per share, and non-recurring after-tax charges including impairments of marine vessels of $1.20 per share. (2) Based on Kirby's most recently published earnings guidance in the January 31, 2018 press release announcing Q earnings. 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

10 Higman Marine Acquisition Overview Purchase Price $419 million in total consideration 6.5x 7.5x multiple of 5-yr prior EBITDA average with synergies Value Created EPS neutral in FY 2018 Accretive in 2019 as inland barge market improves Anticipated cost synergies of $10-12 million over one year Financing All cash purchase To be financed through additional borrowings Timing Signed purchase and sale agreement on February 4, 2018 Closed on February 14,

11 Overview of Higman Marine Founded in 1917, Higman Marine is headquartered in Houston, Texas and is a leading provider of inland marine tank barge and logistics solutions The company transports refined petroleum products, crude oil, condensates, black oil products, chemicals and petrochemicals Fleet comprised of approximately 159 barges and 75 towboats all of which are U.S. flagged Average age of barge fleet is 7.3 years Average age of towboat fleet is 8.0 years Customer base includes a diverse, blue-chip set of companies Barge Size & Type Qty 30,000 Bbl Clean ,000 Bbl Black Oil 31 Specialty Chemical 2 Total 159 Towboat H.P. Size Qty 2,000 horsepower 72 3,600 horsepower 3 Total 75 11

12 Rationale for Higman Acquisition Adding scale in core business Young, high-quality and well-maintained fleet Expands business and relationships with existing customers New capacity and flexibility to better serve customers Ability to retain high-quality Higman personnel Attractive time in cycle to acquire assets Opportunities for cost synergies Accretive to earnings as market recovers although first year will likely be neutral 12

13 MARINE TRANSPORTATION 13

14 U.S. Inland and Coastal Waterway Systems 12,000 miles of navigable waterways link America s heartland to the world Texas and Louisiana account for 80% of the total U.S. production of chemicals and petrochemicals 14

15 Barge Industry Facts The U.S. barge industry serves the inland waterways, U.S. coastal ports, Alaska and Hawaii The inland barge fleet is comprised of approximately 18,000 dry cargo barges and 3,800 liquid tank barges The coastal market, including Alaska and Hawaii, encompasses approximately 290 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 15

16 Marine Transportation Demand Drivers Revenue by Product 1 4% 17% 23% 56% Petrochemicals and Chemicals Black Oil Refined Petroleum Products Agricultural Chemicals Markets and Products Moved Products Drivers Petrochemicals and Chemicals Benzene, Styrene, Methanol, Naphtha, Acrylonitrile, Xylene, Caustic Soda, Butadiene, Propylene 70% 30% Consumer Durables Consumer Non-Durables Black Oil Refined Petroleum Products Agricultural Chemicals Residual Fuel Oil, Coker Feedstock, Vacuum Gas Oil, Asphalt, Carbon Black Feedstock, Crude Oil, Natural Gas Condensate, Ship Bunkers Gasoline, No. 2 Oil, Jet Fuel, Heating Oil, Diesel Fuel, Ethanol Anhydrous Ammonia, Nitrogen-based Liquid Fertilizer, Industrial Ammonia Fuel for Power Plants and Ships, Feedstock for Refineries, Road Construction Vehicle Usage, Air Travel, Weather, Refinery Utilization Corn, Cotton, Wheat Production, Chemical Feedstock Usage 1 YTD as of December 31,

17 Strong Emphasis on Safety Safety is the first and foremost concern in everything we do Our customers place a high value on safety Safe operations are good for morale and benefit financial performance in the long run Extensive company-owned and operated training facility (towboat simulator) Pictured above is our towboat simulator where wheelhouse crew can gain repetitive practice navigating in extreme conditions and high-risk scenarios 17

18 Inland Tank Barge Markets 18

19 Number of Inland Tank Barges Estimated for the years 1998 through The inland tank barge market has grown at 1.4% over the last 20 years and 3.0% over the last 10 years 3, single hull tank barges industry wide, 9 operated by Kirby Source: Informa Economics, Barge Fleet Profile, March 2017 Adjusted Adjusted for Kirby through December

20 Inland Tank Barge Fleet Age Profile Inland Tank Barge Age Distribution 1 (Number of barges by age in years) to 5 5 to to to to to to to 40 > 40 (1) The total of 3,683 barges in this chart is unadjusted from the Informa Economics, Barge Fleet Profile Source: Informa Economics, Barge Fleet Profile, March

21 Inland Fleet Size and Flexibility Better Asset Utilization Tank Barge Fleet Large fleet facilitates better asset utilization More backhaul opportunities Faster barge turnarounds Diversity of barge products and spot opportunities Less cleaning Towboat Fleet Operated an average of 227 towboats during the 2017 fourth quarter of which 67 were chartered Chartered towboats used to balance horsepower with demand 21

22 Kirby Inland Fleet by Barge Type * * As of February 26, 2018 including barges from Higman acquisition 22

23 Inland Barge Fleet by Operator Shipper Owned Independent Tank Barges Operated Dry Cargo Barges Operated Kirby Corporation* American Commercial Lines LLC 445 3,346 Canal Barge Company, Inc Ingram Barge Company 223 4,333 Florida Marine MPLX ( Hardin St. Marine ) Blessey Marine Services Enterprise Products Partners Magnolia Marine Transport Co. 88 American River Transportation Co. 82 1,781 LeBeouf Brothers Towing Co 81 - Genesis Energy, L.P. 74 Southern Towing Company 69 - Savage Inland Marine 63 - PPG Industries, Inc Golding Barge Lines, Inc Devall Barge Line 53 - Cenac Towing 52 - Settoon Towing, LLC 51 - Westlake Vinyl 44 Chem Carriers, Inc. 42 * Kirby as of February 26, 2018 including barges from Higman acquisition Shipper Owned Independent Tank Barges Operated Dry Cargo Barges Operated John W. Stone Oil 37 - Martin Midstream Partners 37 - Buffalo Marine Service, Inc Accu Trans Marine 30 - Targa 20 - River City Towing Services 18 - NGL Energy Partners 18 - Rhodia, Inc Harley Marine Gulf 14 - Progressive Barge Line 10 - Apex Towing Company 9 - Olin Corporation (Blue Cube) 9 - Merichem Company 6 - TW LaQuay Marine, LLC 4 - Highland Marine 4 - AgriChem Marine 2 Parker Towing Company Oakley Barge Line 2 - Campbell Transportation Other 12 7,825 TOTAL 3,807 18,897 Informa Economics, Barge Fleet Profile, March 2017 Adjusted 23

24 Coastal Tank Barge Markets 24

25 Coastal Tank Barge Markets Largest operator of coastal tank barges and towing vessels participating in the regional distribution of refined petroleum products, black oil, and distribution of petrochemicals between PADDs Fleet consists of 56 tank barges with 5.4 million barrels of capacity and 53 tugboats Operates along the U.S. East, West and Gulf Coasts, and in Alaska and Hawaii 195,000 barrel and smaller tank barges, which represent all of Kirby s coastal fleet, have the flexibility to access ports inaccessible to larger vessels, while still delivering large volumes of product Improving fleet reliability, with the following under construction: Six 5000 horsepower tugboats with deliveries expected between mid-2018 and mid-2019 During 2017 we early retired 11 barges and 21 tugboats, incurring a $1.12 per share aftertax charge in fourth quarter earnings 25

26 Number of Barges Coastal Tank Barge Age Profile Coastal Barge Market Age Distribution* Number of barges by age 112 The average age of the nation s coastal tank barge fleet is ~13 years Years 5-10 Years Years Years Years Years Years 35+ Years 6 2 * Tank barges with 195,000 barrels capacity or less as of December 31,

27 Coastal Tank Barge Owners Kirby is Well- Positioned in U.S. Coastal Markets (1) Excludes five vessels over 250,000 barrels (2) Excludes the 750 class, three ATBs with capacity of 327,000 barrels/ea. (3) Excludes nine ATBs with capacity of 200,000 barrels or greater * Tank barges with 195,000 barrels capacity or less as of December 31, 2017 Coastal Tank Barges Operated * Estimated Barrel Capacity* (MM) Vane Brothers Kirby Corporation Harley Marine Reinauer Transportation Bouchard Transportation Crowley Marine Moran Towing Genesis Energy, L.P Saltchuk Resources (Foss Maritime) Sause Brothers U.S. Shipping Corporation Poling & Cutler Martin Gas Marine Overseas Shipholding Group Seacor Wawa, Inc Occidental Chemical Corporation Hyak Maritime

28 Kirby Engine Systems United Holdings Stewart & Stevenson DISTRIBUTION AND SERVICES 28

29 Distribution and Services Revenue Distribution * Markets Services Offered Customers and Market Drivers 69% Oil and Gas Distributes and services high-speed diesel engines and transmissions, and manufactures, remanufactures and services oilfield service equipment, including hydraulic fracturing equipment. 31% Commercial and Industrial Overhaul, repair and replacement parts provider for medium-speed and high-speed diesel engines, reduction gears, transmissions, starters, governors and clutches. Provides diesel engine-generator set upgrades. Rents generators, material-handling equipment, pumps, and compressors for use in a variety of industrial markets. Oilfield Services Oil & Gas Operators and Producers Marine: Inland, Coastal and Harbor Waterways Carriers Dry and Liquid Offshore Oil & Gas Services Offshore Towing Harbor Towing Dredging Great Lakes Ore Carriers Pleasure Craft On-Highway / Transportation Power Generation Standby Power Generation Pumping Stations Mining * For the year ended December 31,

30 Distribution and Services Engines, Transmissions and Reduction Gears Medium-Speed Electro-Motive Diesel (EMD) Cooper-Bessemer Nordberg High-Speed Transmissions/ Reduction Gears Caterpillar Cummins MTU Detroit Diesel John Deere Isuzu Deutz Volvo Penta Allison Falk Twin Disc 30

31 Oil and Gas Market One of the largest distribution and services providers to the land-based oil services market Hydraulic fracturing technology has significantly expanded and reduced the cost of producing U.S. natural gas and oil reserves Manufacturer and remanufacturer of oilfield equipment used in the hydraulic fracturing of shale formations Approximate installed base of 13 million horsepower of frac equipment; most require some form of major service every three to five years Heavy duty cycle associated with fracturing drives need for service and parts 31

32 Kirby Distribution and Services Locations Seattle Locations / Branches United Holdings Kirby Engine Systems Stewart & Stevenson Allison / MTU / DTNA Territories United Holdings Stewart & Stevenson EMD Territories Kirby Engine Systems Stewart & Stevenson Albany Marlborough Casper Thorofare NYC Middletown Piscataway Grand Junction Denver Great Bend Chesapeake Phoenix Albuquerque Cotulla Laredo Liberal Tulsa Oklahoma City Pharr Houston Corpus Christi Houma Paducah Stuttgart Lubbock Wichita Falls Little Rock El Paso Dallas Longview Shreveport Odessa Mobile Baton Rouge Panama City Austin Lafayette / San Antonio New Iberia Belle Chasse/Harvey Tampa Fort Myers Rocky Mount Jacksonville Ocala Orlando Fort Pierce West Palm Beach Fort Lauderdale Miami 32

33 Pressure Pumping Market Size Estimated North American Pressure Pumping Horsepower (millions) E Each pressure pumping unit is ~2,250 HP and must be replaced or remanufactured every 3-5 years E Out of Service Idle/Repair Working Sources: Spears & Associates (with permission) 33

34 OUTLOOK 34

35 2018 Guidance Published 2018 first quarter guidance of $0.45 to $0.65 (1) per share versus $0.51 for the 2017 first quarter - Includes $0.08 to $0.12 per share benefit from tax reform Published 2018 full year guidance of $2.50 to $3.00 (1) per share versus to $1.99 (2) per share for 2017 excluding onetime items in the fourth quarter - Includes $0.40 to $0.50 per share benefit from tax reform Marine Transportation: - Inland utilization in the low-90% to mid-90% range - Coastal utilization in the low-80% to mid-80% range - Continued pricing pressure on inland and coastal tank barge term contract renewals - Potential pricing inflection in inland markets in H Distribution and Services: For the land-based market, expect continued demand for pressure pumping remanufacturing and transmission overhauls, as well as new equipment sales In the marine market, expect results to improve as customers can no longer afford critical engine overhauls previously deferred Power generation is expected to be similar to 2017 (1) Based on Kirby's most recently published earnings guidance in the January 31, 2018 press release announcing Q earnings. That guidance is shown for convenience only and does not constitute confirming or updating the guidance, which will only be done by public disclosure. (2) 2017 earnings per share exclude a one-time deferred tax revaluation benefit of $4.83 per share, and non-recurring after-tax charges including impairments of marine vessels of $1.20 per share. 35

36 FINANCIAL HIGHLIGHTS 36

37 Financial Summary Change Income Statement FY 2017 FY 2016 $ % Revenues: Marine transportation $ 1,324.1 $ 1,471.9 $ (147.8) -10% Distribution and services % Total $ 2,214.4 $ 1,770.7 $ % Operating income (loss): Marine transportation $ $ $ (121.1) -47% Distribution and services % Corporate expenses (18.2) (15.0) (3.2) 21% Total $ $ $ (40.8) -17% Net earnings: Net earnings (GAAP) $ $ $ % US tax reform and deferred tax liability remeasurement (269.4) - (269.4) Impairment of long-lived assets Adjusted net earnings (Non-GAAP) 1 $ $ $ (30.7) -22% GAAP earnings per share $ 5.62 $ 2.62 $ % Adjusted earnings per share (Non-GAAP) 1 $ 1.99 $ 2.62 $ (0.63) -24% (1) 2017 earnings per share exclude a one-time deferred tax revaluation benefit and non-recurring after-tax charges including impairments of marine vessels. 37

38 Operating Margins 30% 25% 21.1% 22.4% 23.6% 21.1% 21.9% 22.1% 23.8% 24.3% 22.5% 20% 15% 18.9% 18.4% 16.6% 14.6% 15.7% 17.4% 19.0% 14.9% 15.6% 15.0% 17.5% 11.7% 10% 10.0% 10.1% 10.1% 9.5% 9.7% 10.5% 10.6% 10.4% 9.4% 8.1% 7.5% 10.3% 9.7% 5% 3.9% 1.1% 0% Marine Transportation Distribution and Services 38

39 EBITDA Per Share Growth $12.00 $ % compound annual growth $11.23 $10.49 $10.38 $9.03 $8.00 $6.66 $7.95 $8.32 $7.22 $6.00 $5.60 $5.73 $5.46 $4.39 $4.00 $2.00 $1.26 $1.47 $1.59 $1.70 $2.00 $2.65 $2.81 $2.53 $2.73 $2.95 $3.52 $ See Appendix for reconciliation of GAAP net earnings to Non-GAAP EBITDA 39

40 In Millions Cash Flows $700 $600 $500 $400 $300 $200 $100 $83 $97 $48 $59 $73 Expansion Barges Operating cash flow Capital expenditures (ex-acquisitions) $48 $112 $72 $142 $150 $127 $139 $122 $94 $236 $246 $164 $173 $319 $193 $245 $137 $312 $226 $326 $312 $601 $30 $253 $439 $355 $524 $345 $416 $231 $353 $177 $215 1 $195 1 $0 * Unaudited E (1) Based on Kirby's most recently published earnings guidance in the January 31, 2018 press release announcing Q earnings. That guidance is shown for convenience only and does not constitute confirming or updating the guidance, which will only be done by public disclosure. Last Published Guidance 40

41 Capital Structure 60% 50% 50.4% Debt-to-Total Capital Debt-to-Capital Ratio of 31.5% post Higman Acquisition 40% 30% 24.2% 20% 10% 0% Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q

42 Financial Strength Investment grade rating Standard & Poor s: BBB, stable (following Higman acquisition) Moody s: Baa2, negative outlook (following Higman acquisition) $500 million unsecured Private Placement $150 million 7-year maturity at 2.72% due 2/27/2020 $350 million 10-year maturity at 3.29% due 2/27/2023 $850 million Bank Revolving Credit Facility Maturity date of June 26, 2022 ~$408MM outstanding as of February 2018 $500 million 4.200% Senior Notes Maturity date of March 1, 2028 Used to fund Higman Marine acquisition 42

43 WHY INVEST IN KIRBY? 43

44 Why Invest in Kirby? Long-term record of success Experienced management teams in both core businesses Marine Transportation U.S. feedstock position puts our refinery, chemical, and integrated major customers in a globally competitive position and is driving volume growth 75% of inland revenue under term contracts, of which approximately 51% are under time charters 80% of coastal revenue under term contracts, of which approximately 85% are under time charters Approximately 70% of petrochemicals moved produce consumer nondurable goods Distribution and Services Provides essential service to marine, land-based, power generation, and other industrial sectors Largest geographic footprint of any U.S. distribution and service provider Strong financial discipline and cash flow 44

45 Kirby Corporation Putting America s Waterways to Work Thank You For Listening to Our Story

46 KIRBY CORPORATION Reconciliation of GAAP to Non-GAAP Financial Measure Kirby reports its financial results in accordance with generally accepted accounting principles (GAAP). However, Kirby believes that the non-gaap financial measure EBITDA is useful in managing Kirby s businesses and evaluating Kirby s performance. EBITDA, which Kirby defines as net earnings attributable to Kirby before interest expense, taxes on income, depreciation and amortization, and impairment of long-lived assets, is used because of its wide acceptance as a measure of operating profitability before non-operating expenses (interest and taxes) and noncash charges (depreciation and amortization and impairment of long-lived assets). EBITDA is one of the performance measures used in Kirby s incentive bonus plan. EBITDA is also used by rating agencies in determining Kirby s credit rating and by analysts publishing research reports on Kirby, as well as by investors and investment bankers generally in valuing companies. This non-gaap financial measure is not a substitute for GAAP financial results and should only be considered in conjunction with Kirby s financial information that is presented in accordance with GAAP. Quantitative reconciliations of GAAP net earnings attributable to Kirby to Non-GAAP EBITDA are provided in the following tables. 46

47 KIRBY CORPORATION Reconciliation of GAAP Net Earnings Attributable to Kirby to Non-GAAP EBITDA KIRBY CORPORATION Reconciliation of GAAP Net Earnings Attributable to Kirby to Non-GAAP EBITDA ($ in millions) Net earnings attributable to Kirby $ $ $ $ $ $ $ $ $ $ Interest expense Provision (benefit) for taxes on income (240.9) Impairment of long-lived assets Depreciation and amortization EBITDA, Non-GAAP $ $ $ $ $ $ $ $ $ $

48 KIRBY CORPORATION Reconciliation of GAAP Net Earnings Attributable to Kirby to Non-GAAP EBITDA KIRBY CORPORATION Reconciliation of GAAP Net Earnings Attributable to Kirby to Non-GAAP EBITDA Three Months Ended March 31, Three Months Ended June 30, Three Months Ended September 30, Three Months Ended December 31, Year Ended December 31, ($ in millions) Net earnings attributable to Kirby $ 27.5 $ 38.1 $ 25.8 $ 38.9 $ 28.6 $ 32.1 $ $ 32.3 $ $ Interest expense Provision (benefit) for taxes on income (290.3) 19.6 (240.8) 85.0 Impairment of long-lived assets Depreciation and amortization EBITDA, Non-GAAP $ 93.5 $ $ 95.5 $ $ $ $ $ $ $

49 KIRBY CORPORATION MARINE TRANSPORTATION PERFORMANCE MEASUREMENTS Inland Performance Measurements: Year Year Year Year Year Year Year 1 st Q 2 nd Q 3 rd Q 4 th Q Year 1 st Q 2 nd Q 3 rd Q 4 th Q Year Ton miles (in millions) (1) 11,977 12,957 13,414 12,224 11,754 13,088 12,502 2,748 2,792 2,648 2,973 11,161 2,977 2,818 2,753 2,971 11,519 Revenues/Ton mile (cents/tm) (2) Towboats operated (3) Delay days (4) 5,201 5,772 6,777 6,358 7,843 7,804 7,924 2,236 2, ,078 7,278 2,267 1,367 1,965 1,978 7,577 (1) Ton miles indicate fleet productivity by measuring the distance (in miles) a loaded inland tank barge is moved. Example: A typical 30,000 barrel inland tank barge loaded with 3,300 tons of liquid cargo is moved 100 miles, thus generating 330,000 ton miles. (2) Inland marine transportation revenues divided by ton miles. Example: 4 th quarter 2017 inland marine revenues of $241,951,000 divided by 2,971,000,000 ton miles = 8.1 cents. (3) Towboats operated, is the average number of owned and chartered inland towboats operated during the period. (4) Delay days measures the lost time incurred by an inland tow (inland towboat and one or more inland tank barges) during transit. The measure includes transit delays caused by weather, lock congestion and other navigational factors. 49

50 $135+ Billion of U.S. Petrochemical Investments* Pacific Northwest Cost ($MM) NW Innovation 2020 New methanol 3,600 Tesoro New xylene 400 Houston Ship Channel and surrounding TX Cost ($MM) Celanese-Mitsui 2015 New methanol 800 Celanese-Mitsui TBD New methanol unk Celanese 2018 Acetic /VAM expansion unk Celanese 2018 New methanol unk CP Chemical 2018 New ethylene (80% done) 5,000 CP Chemical 2017 PAO expansion unk Enterprise 2017 New PDH unk Enterprise 2019 New isobutylene 3,000 Exxon Mobil Exxon Mobil New ethylene New polyethylene 3,000 unk Flint Hills /Koch TBD New PDH unk Fund Connell 2019 Methanol expansion 4,500 Ineos/Sasol JV 2018 New polyethylene unk Ineos 2017 Ethylene debottleneck unk Ineos 2019 New Polyalphaolephin unk LyondellBasell 2016 Tri-ethylene glycol exp. unk LyondellBasell 2015 Propylene debottleneck 20 LyondellBasell 2021 Propylene oxide/tba 2,400 LyondellBasell TBD Polypropylene/PDH 2,000 LyondellBasell 2019 New HDPE 700 LyondellBasell 2017 Ethylene expansion 170 TOTAL/Nova/ Borealis JV 2020 New polyethylene unk Corpus Christi/Point Comfort, TX Cost ($MM) Celanese-Mitsui 2020 New methanol 800 Exxon-SABIC JV 2020 New ethylene/derivatives 9,300 Formosa 2018 New polyethylene / MEG 5,000 Formosa 2018 New ethylene 1,700 Formosa 2018 New LD polyethylene Formosa New PDH LyondellBasell 2017 Ethylene expansion 350 M&G Group 2018 New PET/PTA 1,000 Oxy/Mexichem J 2017 New ethylene (2 units) 1,500 Iowa Cost ($MM) Orascom (OCI) 2017 New fertilizer 3,000 CF Industries 2016 Ammonia expansion 1,900 Indiana Cost ($MM) Midwest Fert New ammonia 2,800 Kentucky Cost ($MM) Westlake 2017 Ethylene exp. unk Oklahoma Cost ($MM) Koch Early Urea expansion 1,300 LSB Ind New ammonia 275 Beaumont/Orange, TX Cost ($MM) Exxon Mobil 2019 Polyethylene exp. unk Flint Hills/Koch 2016 Ethylene expansion unk Huntsman 2016 Ethylene oxide exp. 125 LANXESS 2016 Butadiene rubber unk Natgasoline (OCI- Early-2018 New methanol 1,000 G2X JV) TOTAL/Nova/ Borealis JV 2020 Ethylene expansion 1,700 Freeport Old Ocean, TX Cost ($MM) BASF-Yara 2018 New ammonia 600 CP Chemical 2018 New polyethylene 6,000 Dow 2016 New PDH 6,000 Dow 2017 New ethylene Dow 2017 Polyethylene exp. Dow/MEGlobal JV 2019 Monoethylene Glycol 1,100 Ohio Cost ($MM) PTT Global Chem 2021 New ethylene 5,700 PBF 2015 Aromatics exp unk Monaca, PA Cost ($MM) Shell 2020 New ethylene 6,000 Charleston, WV Cost ($MM) US Methanol 2018 New methanol unk US Methanol TBD New methanol unk Mobile, AL Cost ($MM) Huntsman Chem Epoxy expansion 65 Baton Rouge New Orleans Corridor, LA Cost ($MM) BASF Castleton Butanediol exp. New methanol Unk 1,200 CF Industries 2016 Ammonia expansion 1,900 CF Industries 2016 New UAN 1,900 Dow 2017 New polyolefin (2) 2,000 Dyno Nobel 2016 New ammonia 1,000 Eurochem New ammonia 1,500 Formosa 2021 New ethylene 9,400 IGP Methanol 2021 New methanol 4,600 Methanex 2015 Methanol migration 850 Methanex 2015 Methanol migration 550 Shell 2018 New alpha olefins 717 Shintech New EDC/ethylene 1,400 S. LA Methanol New methanol 1,300 Syngas Energy 2020 New methanol 360 Yuhuang Chem 2018 New methanol 1,850 Lake Charles, LA Cost ($MM) WLK/Lotte JV 2019 New ethylene/meg 3,000 Dow 2015 Ethylene expansion 1,060 LCM 2021 New methanol 3,800 Indorama 2018 Ethylene restart 175 G2X 2018 Methanol-to-gasoline 1,600 Sasol 2019 New ethylene Sasol 2019 New polyethylene 11,000 Westlake 2016 Ethylene expansion 330 *Notes: Date reflects anticipated year in-service, red font reflects construction in progress, green online, unk=unknown Sources: ICIS, Company announcements, Kirby Corp. 50

51 U.S. Ethylene Feedslate Forecast 2,500 Ethylene Feedstock Volume Thousands of Barrels per Day Product, Growth and CAGR: 2,000 Ethane Growth 43% 5-Year CAGR 7% 1,500 1, ~70% of current ethylene production is from ethane Naptha & Gasoil Growth -7% 5-Year CAGR -1% Butane Growth 8% 5-Year CAGR 1% Propane Growth 4% 5-Year CAGR 1% Source: Petral Consulting Company, Long Term Forecast to 2022, December

52 U.S. Ethylene Plant Coproduct Output Ethylene Plant Coproduct Output Millions of Pounds per Day All of these Ethylene Plant Coproducts are Moved by Tank Barge Product, Growth and CAGR: Propylene Growth 10% 5-Year CAGR 2% Butadiene & Other C4 Growth 19% 5-Year CAGR 4% Benzene Growth 13% 5-Year CAGR 3% Toluene Growth 7% 5-Year CAGR 1% Xylenes & Heavy Aromatics Growth 11% 5-Year CAGR 2% Source: Petral Consulting Company, Long Term Forecast to 2022, December

53 million tons annually Near-Term U.S. Ethylene and Derivative Capacity Additions 4,500 4,000 3,500 3,000 U.S. ethylene derivative capacity is expected to expand ~30% over the next 5 years ~40% of new derivatives are products that are moved by water Ethylbenzene 0% Ethylene Dichloride 4% Alpha Olefins 15% Vinyl Acetate Monomer 1% 2,500 2,000 1,500 Ethylene Oxide 19% Polyethylene 61% 1, Ethylene Capacity Derivative Capacity Source: Bernstein Research (with permission) August 30, 2016 Notes: Ethylbenzene 99% used to make styrene; ethylene dichloride a key feedstock in the production of PVC; ethylene oxide is a gas used as a raw material for innumerous applications, including cosmetics, fibers, lubricants, paint thinners and plasticizers and, while not carried by barge, the derivatives, such as ethylene glycol are; alpha olefins are building block chemicals; vinyl acetate monomer is used as a feedstock chemical for glues, fabrics, gels, insulation, paints, safety glass and certain plastics 53