Putting America s Waterways to Work NYSE: KEX June 2016

Transcription

1 Putting America s Waterways to Work NYSE: KEX June 2016

2 Forward Looking Statements Non-GAAP Financial Measures Statements contained in this presentation with respect to the future are forwardlooking 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, 2015 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

3 Business Segments Marine Transportation The largest inland and coastwise tank barge fleets in the United States 82% of 1Q16 Revenue Diesel Engine Services Nationwide service provider and distributor of diesel engines, transmissions, parts, and oilfield service equipment 18% of 1Q16 Revenue 3

4 Public Market Information Share Price on June 3, 2016 $69.31 NYSE: KEX Shares Outstanding (as of May 4, 2016) Market Capitalization Net Debt (as of April 28, 2016) Enterprise Value 53.9MM $3,733MM $783MM $4,516MM 4

5 Marine Transportation Company Overview Largest inland and coastal tank barge operator 912 inland tank barges and 253 towboats 70 coastal tank barges and 75 tugboats 80% of inland revenues under term contracts, of which approximately 55% are under time charters 78% 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 highspeed diesel engines Manufacturer, remanufacturer and service provider of oilfield service equipment Return on Capital Driven Investment Decisions Proven Acquisition Strategy Successful integration of 33 marine and 17 diesel acquisitions 5

6 Shipper Owned (Red) Independent (Green) * Towboats Only Date Marine Transportation Acquisitions 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 Date Tank Barges Description SeaRiver Maritime (ExxonMobil) American Commercial Lines (black oil fleet) 2006 * Capital Towing Coastal Towing, Inc. (operated barges since 2002 under barge management agreement) Cypress Barge Leasing, LLC (operated as leased barges since 1994) Midland Marine Corporation (operated as leased barges) Siemens Financial (operated as leased barges) OFS Marine One (operated as leased barges) 2011 * Kinder Morgan (Greens Bayou fleet) 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) 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) West Coast Barge Leasing (operated as leased barges) Martin Midstream Partners (pressure barges) SEACOR Holdings Inc. (inland barge assets) 6

7 Diesel Engine Services Expansions Acquisitions Internal Growth 1987 National Marine 1991 Ewing Diesel 1995 Percle Enterprises 1996 MKW Power Systems 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 Midwest 1992 Seattle 2000 Cooper Nuclear 7

8 In Millions Historical Revenue Growth Marine Transportation and Diesel Engine Services Revenue From Continuing Operations 10% compound annual growth $318 $320 $335 $327 $366 $513 $567 $535 $613 $675 $796 $984 $1,173 $1,360 $1,082 $1,110 $2,242 $2, $1,850 $2,566 $2,148 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 $1.00 $ % compound annual growth $1.33 $0.82 $0.94 $0.98 $0.82 $0.83 $0.37 $0.42 $0.48 $0.52 $0.63 $1.79 $2.29 $2.91 $2.34 $2.15 $3.33 $ $3.73 $4.93 $4.11 $ $ 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) Based on Kirby's most recently published earnings guidance in the April 27, 2016 press release announcing earnings for the 2016 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

10 MARINE TRANSPORTATION 10

11 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 11

12 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 3,900 liquid tank barges The coastal market, including Alaska and Hawaii, encompasses approximately 280 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

13 Marine Transportation Demand Drivers Revenue by Product * 3% 22% 49% 27% 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, 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 * For the three months ended March 31,

14 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 14

15 Inland Tank Barge Markets 15

16 Number of Inland Tank Barges Estimated for the years 1995 through March 31, ,100 3,900 3,700 3,500 The inland tank barge market has grown at 1.4% over the last 20 years and 3.1% over the last 10 years 3,900 3,300 3,100 2,900 2, single hull tank barges industry wide, 9 operated by Kirby 2,500 2,300 2,100 Source: Informa Economics, Barge Fleet Profile, March Adjusted 16

17 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 3,637 barges in this chart is unadjusted from the Informa Economics, Barge Fleet Profile Source: Informa Economics, Barge Fleet Profile, March

18 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 240 towboats during the 2016 first quarter of which 79 were chartered Chartered towboats used to balance horsepower with demand 18

19 Kirby Inland Fleet by Barge Type * * As of April 27,

20 Inland Barge Fleet by Operator Shipper Owned Independent Tank Barges Operated Dry Cargo Barges Operated Kirby Corporation American Commercial Lines LLC 432 3,823 Canal Barge Company, Inc Ingram Barge Company 219 4,252 MPLX ( Hardin St. Marine ) Florida Marine Higman Barge Lines, Inc Blessey Marine Services Settoon Towing, LLC Enterprise Products Partners American River Transportation Co ,772 LeBeouf Brothers Towing Co 84 - Magnolia Marine Transport Co. 75 Southern Towing Company 69 - Genesis Energy, L.P Cenac Towing 65 - PPG Industries, Inc Devall Barge Line 55 - Golding Barge Lines, Inc Martin Midstream Partners 47 - John W. Stone Oil 41 Westlake Vinyl 37 - Chem Carriers, Inc. 36 Tank Barges Operated Buffalo Marine Service, Inc. 34 Dry Cargo Barges Operated Accu Trans Marine 33 - Harley Marine Gulf 23 - Rhodia, Inc Targa 20 - NGL Energy Partners 19 - River City Towing Services 17 - Olin Corporation (Blue Cube) 15 - Progressive Barge Line 10 - AgriChem Marine 8 - Apex Towing Company 7 - Merichem Company 6 - Natures Way Marine 5 - Mon River Towing, Inc. 4 - Highland Marine 4 - TW LaQuay Marine, LLC 4 - Parker Towing Company 3 Campbell Transportation Plaquemine Towing 3 - Oakley Barge Line 2 Other dry cargo carriers - 7,264 TOTAL 3,926 18,341 Informa Economics, Barge Fleet Profile, March Adjusted 20

21 Coastal Tank Barge Markets 21

22 Coastal Tank Barge Markets Largest operator of coastal tank barges and towing vessels participating in the regional distribution of refined petroleum products, black oil products, and distribution of petrochemicals between PADDs Fleet consists of 70 tank barges with 6.0 million barrels of capacity and 75 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 products Adding to fleet capacity, with the following under construction: One 185,000 barrel, horsepower articulated tug barge ( ATB ) for $75 to $80 million. One delivered in late-2015 and one expected in mid-2016 Two 155,000 barrel, 6000 horsepower ATBs for approximately $65 million each. Deliveries expected in 2016 second half and 2017 first half One 35,000 barrel petrochemical tank barge with delivery expected in early-2017 Two 4900 horsepower tugboats with delivery expected in

23 Number of Barges Coastal Tank Barge Age Profile 120 Coastal Barge Market Age Profile Number of barges by age The average age of the nation s coastal tank barge fleet is ~16 years Years 5-10 Years Years Years Years Years Years 35+ Years

24 Coastal Tank Barge Owners Kirby is Well- Positioned in U.S. Coastal Markets Coastal Tank Barges Operated * Kirby Corporation 70 Vane Brothers 63 (1) Excludes three 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 Harley Marine 33 Reinauer Transportation 26 Bouchard Transportation 1 23 Crowley Marine 2 14 Moran Towing 12 Saltchuk Resources (Foss Maritime) 10 Genesis Energy L.P. 9 Sause Brothers 8 U.S. Shipping Corporation 4 Martin Gas Marine 3 Poling & Cutler 2 Overseas Shipholding Group * Tank barges with 195,000 barrels capacity or less 24

25 Kirby Engine Systems United Holdings DIESEL ENGINE SERVICES 25

26 Diesel Engine Services Revenue Distribution * Markets Services Offered Customers and Market Drivers 39% Land-Based Distributes and services high-speed diesel engines and transmissions, and manufactures, remanufactures and services oilfield service equipment, including hydraulic fracturing equipment 43% Marine Overhaul, repair and replacement parts provider for medium-speed and high-speed diesel engines, reduction gears, transmissions, starters, governors and marine clutches 18% Power Generation, Nuclear and Industrial * For the three months ended March 31, 2016 Overhaul, repair and replacement parts provider for medium-speed diesel engines and provides diesel engine-generator set upgrades Oilfield Services Oil & Gas Operators and Producers Power Generation Transportation Inland, Coastal and Harbor Waterways Carriers Dry and Liquid Offshore Oil & Gas Services Offshore Towing Dry and Liquid Harbor Towing Dredging Great Lakes Ore Carriers Standby Power Generation Pumping Stations Industrial Reduction Gears 26

27 Diesel Engine 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 Allison Falk Twin Disc 27

28 Land-Based Oil Services Market One of the largest diesel engine service 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 15 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 28

29 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 Stacked Repaired Working Sources: Spears & Associates (with permission) 29

30 OUTLOOK 30

31 2016 Guidance Published 2016 second quarter guidance of $0.65 to $0.75 per share, versus $1.04 for the 2015 second quarter (1) Published 2016 full year guidance of $2.80 to $3.20 per share, versus $4.11 for 2015 (1) Marine Transportation: Petrochemicals, black oil and refined petroleum products volumes remain stable Inland utilization in the high-80% to low-90% range Coastal utilization in the mid-80% to low-90% range Continued modest pricing pressure on inland and coastal tank barge term contract renewals Modest full year accretion from the acquisition of the SEACOR inland tank barge fleet Diesel Engine Services: Continued challenging market conditions, particularly in the land-based markets and Gulf of Mexico oilfield services marine market Stable marine and power generation markets with possibility of further major marine project deferrals (1) Based on Kirby's most recently published earnings guidance in the April 27, 2016 press release announcing earnings for the 2016 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. 31

32 FINANCIAL HIGHLIGHTS 32

33 Three Months Ended March 31, 2016 Change from 2015 Income Statement $ % Revenues: Marine Transportation $ 378M $ 420M $ (42)M (10)% Diesel Engine Services (87) ( 52) Total $ 459M $ 588M $ (129)M (22)% Operating Income: Marine Transportation $ 70M $ 96M $ (26)M (27)% Diesel Engine Services (1) 9 (10) (111) Corporate Expenses (4) (2) (36) (37) Other Income (2) - Interest Expense (4) (5) 1 (20) Pre-Tax Earnings (37) (38) Taxes (23) (37) 14 (38) Net Earnings $ 38M $ 61M $ (23)M (38)% Earnings Per Share $ 0.71 $ 1.09 $ (0.38) (35)% 33

34 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% 10% 10.0% 10.1% 10.1% 9.5% 9.7% 11.7% 10.5% 10.6% 10.4% 9.4% 8.1% 7.5% 5% 3.9% 0% Marine Transportation Diesel Engine Services 34

35 EBITDA Per Share Growth $12.00 $ % compound annual growth $9.03 $9.03 $11.23 $10.38 $8.00 $7.95 $6.66 $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 35

36 In Millions Cash Flows $700 $600 Cash Expansion from Operations Barges Capital Expenditures $601 $521 $500 $439 $400 $300 $200 $100 $83 $97 $48 $59 $73 $48 $112 $72 $127 $94 $236 $246 $164 $173 $142 $150 $139 $122 $319 $193 $245 $137 $30 $326 $312 $312 $226 $253 $355 $345 $250 $230 $0 * Unaudited Last Published Guidance 36

37 70% 60% 55.8% Capital Structure Debt-to-Total Capital First Quarter 50% 40% 30% 20% 23.5% 10% 0% Q4 Q Q4 Q Q4 Q Q4 Q Q4 Q Q4 Q Q4 Q Q4 Q Q4 Q2 Q Q2 Q Q Q4 Q Q4 Q Q4 Q2 Q4 Q2 Q4 Q2 Q

38 Financial Strength Investment grade rating Standard & Poor s: BBB+, stable outlook Moody s: Baa2, stable outlook $500 million unsecured Private Placement $150 million 7-year maturity at 2.72% $350 million 10-year maturity at 3.29% Proceeds used for Penn Maritime acquisition and to replace $200 million Private Placement in February 2013 $550 million Bank Revolving Credit Facility Signed April 30, 2015, replacing $325 million revolver and term loans with $100 million outstanding $212MM outstanding as of March 31, 2016 Maturity date of April 30, and 2016 first quarter share repurchases totaled approximately 3.4 million shares, or roughly 5.0% of shares outstanding at the beginning of the year, at a $72.72 average price 38

39 WHY INVEST IN KIRBY? 39

40 Why Invest in Kirby? Consistent 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 80% of inland revenue under term contracts, of which approximately 55% are under time charters 78% of coastal revenue under term contracts, of which approximately 90% are under time charters Approximately 70% of petrochemicals moved produce consumer nondurable goods Diesel Engine Services Provides essential service to marine, land-based, and power generation industries Largest geographic footprint of any U.S. diesel service provider Strong financial discipline and cash flow 40

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

42 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, 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). 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. 42

43 KIRBY CORPORATION Reconciliation of GAAP Net Earnings Attributable to Kirby to Non-GAAP EBITDA Net earnings attributable to Kirby, GAAP $ $ $ $ $ $ $ $ $ $ 95.5 $ 68.8 Interest expense Provision for taxes on income Depreciation and amortization EBITDA, Non-GAAP $571.4 $642.6 $ $ $ $ $ $ $ $ $

44 KIRBY CORPORATION Reconciliation of GAAP Net Earnings Attributable to Kirby to Non-GAAP EBITDA 44

45 KIRBY CORPORATION MARINE TRANSPORTATION PERFORMANCE MEASUREMENTS (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: 1 st quarter 2016 inland marine revenues of $245,328,000 divided by 2,748,000,000 ton miles = 8.9 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. 45

46 US $ cts/lb US Global Ethylene Margin Advantage Global Ethylene Production Margin $32.06 $28.97 $27.14 $24.89 $24.72 $24.39 $21.53 $19.35 $20.25 $18.29 $19.67 $17.91 $13.76 $16.90 $16.24 $16.43 $13.42 $13.12 $11.90 $10.83 $9.71 $6.71 $4.59 $4.04 $1.65 1Q15 2Q15 3Q15 4Q15 4Q16E U.S. Ethane U.S. Propane U.S. Naphtha W. Europe Naphtha Asia Naphtha Source: Macquarie Capital Inc. (with permission) February 29,

47 $100+ Billion of Planned U.S. Petrochemical Investments* Pacific Northwest Cost ($MM) NW Innovation 2018 New methanol unk Tesoro 2017 New xylene 400 Houston Ship Channel and surrounding TX Cost ($MM) Ascend 2015 New propane PDH 1,200 Celanese-Mitsui online New methanol 800 Celanese 2016 Methanol expansion unk Celanese 2018 New methanol unk CP Chemical 2017 New ethylene 5,000 Chevron Phillips 2016 PAO expansion unk Enterprise 2016 New PDH unk Exxon Mobil 2017 New ethylene 3,000 Exxon Mobil 2017 New polyethylene Formosa 2018 New ethylene 3,000 Formosa 2017 New propylene 2,000 Ineos/Sasol JV 4Q16 New polyethylene unk Ineos 2017 Ethylene debottleneck unk Ineos 2017 New Polyalphaolephin unk LyondellBasell 2016 Tri-ethylene glycol exp. unk LyondellBasell 2020 Propylene oxide/tba 4,000 LyondellBasell 2017 Ethylene expansion 170 Flint Hills /Koch TBD New PDH unk Fund Connell 2018 Methanol expansion unk Oxy 2018 Ethylene expansion unk Freeport Old Ocean, TX Cost ($MM) BASF-Yara New ammonia 600 Dow 2017 New ethylene unk Dow online New PDH unk Dow/MEGlobal JV 2019 Monoethylene Glycol 1,100 Dow 2018 New propylene unk Dow 2017 Gas to liquids unk CP Chemical 2017 Ethylene expansion 923 CP Chemical 2017 New polyethylene 6,000 Iowa Cost ($MM) Orascom (OCI) 2017 New fertilizer 1,900 Iowa fertilizer 2016 New ammonia 1,800 CF Industries 2016 Ammonia expansion 1,900 Kentucky Cost ($MM) Westlake 2017 Ethylene exp. unk Oklahoma Cost ($MM) Koch 2016 Urea expansion 1,300 LSB Ind New ammonia 275 Beaumont/Orange, TX Cost ($MM) Flint Hills/Koch 2016 Ethylene expansion unk Huntsman 2017 Ethylene oxide exp. 125 LANXNESS 2016 Butadiene rubber unk Natgasoline 2016 New methanol 1,000 Orascom Construction (OCI) 2016 New methanol unk *Notes: Date reflects anticipated year in-service, red font reflects construction in progress, unk=unknown Indiana Cost ($MM) Midwest Fert New ammonia 2,400 Ohio Cost ($MM) PTT Global Chem 2021 New ethylene 5,700 PBF 2015 Aromatics exp unk Monaca, PA Cost ($MM) Shell 2020 New ethylene unk Mobile, AL Cost ($MM) Huntsman Chemical online Epoxy expansion 65 Baton Rouge New Orleans Corridor, LA Cost ($MM) Axiall/Lotte 2018 Ethylene expansion 3,000 BASF Castleton Butanediol exp. New Methanol Unk 1,200 CF Industries 2015 Ammonia expansion 1,900 Dyno Nobel 2016 New ammonia 1,000 Eurochem 2017 New ammonia 1,500 Formosa 2022 New ethylene 9,400 Leucadia (LCCE) 2017 Methanol expansion unk Methanex online Methanol migration 850 Methanex 2016 Methanol migration 550 Methanex 2018 Methanol expansion unk Shell 2018 New alpha olefins 717 Shintech 2018 New ethylene 1,400 S. LA Methanol 2016 New methanol 1,200 S. LA Methanol 2017 Methanol expansion unk Shell 2017 Ethylene expansion Unk Yuhuang Chem New methanol 1,850 Lake Charles, LA Corpus Christi/Point Comfort, TX Cost ($MM) Cost ($MM) Axiall/Lotte JV 2019 New ethylene/meg 3,000 LyondellBasell 2016 Ethylene expansion 350 Dow 2015 Ethylene expansion 1,060 Formosa 2017 Ethylene dichloride 2,000 Indorama 2017 Ethylene restart 175 Formosa 2016 New PDH unk G2X 2017 Methanol-to-gasoline 1,300 Formosa 2016 New propylene 2,000 LyondellBasell Late 2015 Ethylene expansion 430 M&G Group 2016 New PET unk Sasol Late-2018 New ethylene M&G Group 2016 New PTA unk Sasol 2016 New polyethylene 11,000 Oxy/Mexichem JV 2017 New ethylene (2 units) 1,000 Westlake 2016 Ethylene expansion 350 Sources: ICIS, Company announcements, Kirby Corp. 47

48 Additional Capacity, 000s tons/year Timing of Announced US Ethylene Expansion Source: ICIS 48