Kirby Corporation · NYSE:KEX

Kirby — Non-Deal Roadshow (June 2018)

58 slides from Kirby's roadshow presentation, June 2018

1. Slide 1: Investor Presentation

   Investor Presentation NYSE: KEX June 2018

2. Slide 2: Forward Looking Statements; Non-GAAP Financial Measures

   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 uncertain

3. Slide 3: Company Overview

   Company Overview Marine Transportation Distribution and Services The largest inland and coastwise tank barge Nationwide service provider and distributor of fleets in the United States engines, transmissions, parts, industrial • 36 successful acquisitions equipment and oilfield service equipment • 1,

4. Slide 4: Public Market Information

   Public Market Information NYSE: KEX Share Price on June 1, 2018 $92.90 Shares Outstanding 59.8 MM (as of March 31, 2018) Market Capitalization $5,554 MM Net Debt $1,405 MM (as of June 1, 2018) Enterprise Value $6,959 MM 3

5. Slide 5: Marine Transportation Acquisitions

   Marine Transportation Acquisitions Tank Tank Date Barges Description Date Barges Description 1986 5 Alliance Marine 2003 64 SeaRiver Maritime (ExxonMobil) 2005 10 American Commercial Lines (black oil fleet) 1989 35 Alamo Inland Marine Co. 2006 * Capital Towing 1989 53 Brent Towing Company 2007 37 Co

6. Slide 6: Distribution and Services Expansions

   Distribution and 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 C

7. Slide 7: Historical Revenue Growth

   Historical Revenue Growth Marine Transportation and Distribution and Services Revenue from Continuing Operations 3,000 $2,566 2,500 10.6% compound $2,214 annual growth $2,242 2,000 1998-2017 $2,148 $1,850 $2,113 In Millions $1,771 1,500 $1,360 $1,173 $1,082 $984 $1,110 1,000 $796 $675 $567 $613 $513

8. Slide 8: Historical EPS Growth

   Historical EPS Growth Earnings Per Share From Continuing Operations Excluding Non-Recurring Items $6.00 $5.00 7.3% compound $4.93 annual growth $4.44 1998 - 2017 $4.11 $4.00 $3.73 $3.35 2 $2.91 $3.00 $3.00 $2.62 $2.29 $2.34 $2.15 1 2 $1.99 $2.50 $2.00 $1.79 $1.33 $0.94 $0.98 $1.00 $0.82 $0.82 $0.83

9. Slide 9: Marine Transportation

   Marine Transportation

10. Slide 10: Waterways are a Crucial Link between U.S & Global Trade

    Waterways are a Crucial Link between U.S & Global Trade Kirby operates on 12,000 miles of navigable US waterways Texas and Louisiana account for 80% of the total U.S. production of chemicals and petrochemicals 9

11. Slide 11: Industry Leader Well Positioned for Continued Growth

    Industry Leader Well Positioned for Continued Growth  The U.S. barge industry serves the inland waterways, U.S. coastal ports, Alaska and Hawaii  Kirby is principally in the liquid cargo transportation business - Inland share (barge count): 27% - Coastal share (capacity): 25%*  No competition fro

12. Slide 12: Marine Transportation Demand Drivers

    Marine Transportation Demand Drivers Inland & Offshore Drivers Revenue by Product1 4% 20% Petrochemicals and Chemicals Black Oil 21% 55% Refined Petroleum Products Agricultural Chemicals Markets and Products Moved Products Drivers 30% Benzene, Styrene, Methanol, Naphtha, Acrylonitrile, Consumer Dura

13. Slide 13: Strong Emphasis on Safety

    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 Pictured above is our towboat simulator where  Extensive company-owned and op

14. Slide 14: Inland Market / Inland Division

    Inland Market Inland Division 13

15. Slide 15: Number of Inland Tank Barges

    Number of Inland Tank Barges Estimated for the years 1998 through 2018 4100 3900 3,797 The inland tank barge market has 3700 grown at 1.4% over the last 20 years and 2.2% over the last 10 years 3500 3300 3100 121 single hull tank 2900 barges industry wide, 9 operated by 2700 Kirby 2500 2300 2100 Sou

16. Slide 16: Inland Tank Barge Fleet Age Profile

    Inland Tank Barge Fleet Age Profile1 Number of tank barges by age in years 1200 1146 1000 742 800 600 502 400 353 294 220 200 161 134 30 0 0 to 5 5 to 10 10 to 15 15 to 20 20 to 25 25 to 30 30 to 35 35 to 40 > 40 (1) The total of 3,683 barges in this chart is unadjusted from the Informa Economics, B

17. Slide 17: Flexible Fleet Size Keeps Utilization High

    Flexible Fleet Size Keeps Utilization High Better asset utilization through scale advantages 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

18. Slide 18: Kirby Inland Fleet by Barge Type

    Kirby Inland Fleet by Barge Type* * Includes 16 pressure barges acquired from Targa 17

19. Slide 19: Scale Allows Better Customer Service – The Kirby Advantage

    Scale Allows Better Customer Service – The Kirby Advantage Largest inland tank barge operator  1,009 inland tank barges and 302 towboats - 27% share  70% of inland revenues under term contracts, of which 58% are under time charters 1200 1009 1000 800 600 426 400 308 248 232 201 200 165 162 138 110

20. Slide 20: Growth through Counter Cyclical Acquisitions

    Growth through Counter Cyclical Acquisitions while Strategically Decreasing the Average Age of Equipment Number Kirby’s Inland Barge Fleet Over Time vs. Industry of Barges 4000 Kirby Count Independent 3875 3850 3825 3797 All Others Shipper Owned Fleet 3675 Kirby’s Fleet Average Age (Yrs.) 3475 3500

21. Slide 21: New Volume Coming to the Waterways

    New Volume Coming to the Waterways Black Oil Pressurized Petrochemicals Refined Products Agriculture Product List: Product List: Product List: Product List: Product List:  Crude Oil  LPG  Methanol  Kerosene/Jet Fuel  Ammonia  Asphalt  Propane  Ethanol  Gasoline  Ammonium  Fuel Oil  Butad

22. Slide 22: The Successful Integration of Higman

    The Successful Integration of Higman  $419 million purchase price – $10-$12 million in cost synergies (originally)  Equipment purchased: – 75 boats – 7.3 years (avg. age) – 163 barges – 8.0 years (avg. age)  Leveraging the best of both Kirby and Higman  Team dedicated to Higman integration  Pha

23. Slide 23: Targa Pressure Barges – Opportunistic and Accretive Acquisition

    Targa Pressure Barges – Opportunistic and Accretive Acquisition  Kirby purchased Targa’s inland barge business for $69.3 million – Announced May 3, 2018 – Closed May 10, 2018  16 pressure barges with 258,000 barrel capacity – Carrying products such as LPG and ethylene plant co-products like propyl

24. Slide 24: Kirby Inland Marine Differentiators

    Kirby Inland Marine Differentiators What makes Kirby stand out amongst competitors?  Safety culture  High quality customer portfolio  Heavily engrained in the supply chain of many blue chip companies – Acquired Lyondell, Dow, and SeaRiver’s captive fleets  Horsepower management  Largest tank ba

25. Slide 25: Coastal Market / Coastal Division

    Coastal Market Coastal Division 24

26. Slide 26: Kirby is Well Positioned in the U.S. Coastal Market

    Kirby is Well Positioned in the U.S. Coastal Market  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 55 tank barges with 5.2 million b

27. Slide 27: Kirby is the Largest Coastal Operator

    Kirby is the Largest Coastal Operator 30.0% 90 Share - Est. Barrel Capacity 24.5% 25.0% 75 Coastal Barge Count* 20.0% 60 15.0% 45 12.7% 11.4% 10.9% 9.5% 10.0% 8.6% 30 6.4% 4.1% 4.5% 5.0% 15 2.7% 2.7% 0.9% 0.9% 0.0% 0  See appendix for the detailed tank barge count and barrel capacity by owner * Tan

28. Slide 28: Coastal Tank Barge Age Profile

    Coastal Tank Barge Age Profile Coastal Barge Market Age Distribution* Number of barges by age 120 112 The average age of the nation’s 100 coastal tank barge fleet is ~13 years, but 20 barges are 30+ years old and candidates for retirement in the coming years 80 Number of Barges 61 60 41 40 34 19 18

29. Slide 29: Differentiators for Kirby's Coastal Business

    Differentiators for Kirby’s Coastal Business What makes Kirby stand out amongst competitors?  Inland company key relationships  Focus on transporting black oil and chemicals – Working for blue chip refiners  Kirby Ocean Transport  Younger, more efficient fleet – Long term coal contracts with 40

30. Slide 30: Distribution & Services

    Distribution & Services

31. Slide 31: Distribution & Services: Who we are

    Distribution & Services Who we are… 65 Seattle LOCATIONS ACROSS NORTH AND SOUTH AMERICA Albany Marlborough Casper Middletown Lodi Piscataway 224 Grand Junction Denver Paducah Chesapeake Tulsa Albuquerque Rocky Mount Phoenix Oklahoma City Stuttgart SUB-DEALER LOCATIONS Lubbock Wichita Falls Little Ro

32. Slide 32: Distribution & Services has diversified sources of revenue

    Distribution & Services has diversified sources of revenue across multiple industries Customer Industry Base Commercial & Industrial - Distribution, Oil & Gas - Distribution, services services and packaged equipment and manufactured equipment ~40% of D&S Segment Revenues ~60% of D&S Segment Revenues

33. Slide 33: Distribution platform provides stability, Manufacturing provides leverage

    Distribution platform provides stability, while Manufacturing provides leverage for growth Product and Service Line Manufacturing Distribution of OEM Products ~1/3 of D&S Revenues ~2/3 of D&S Revenues  Hydraulic fracturing  OEM Finished Product (e.g., equipment and other engines, transmission, etc

34. Slide 34: Kirby is a leader in industrial distribution

    Kirby is a leader in industrial distribution What we represent… Kirby D&S is the largest single distributor in the world for our Dealerships OEM partners provide rights to service customers Distributorships provide unique and exclusive OEM in specific markets representation rights in assigned areas

35. Slide 35: The Oil and Gas Market

    The Oil and Gas Market  Kirby is 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  Kirby is the leading provider of non-capti

36. Slide 36: Pressure Pumping Market Size

    Pressure Pumping Market Size Estimated North American Pressure Pumping Horsepower (millions) 2003-2018E Each pressure pumping unit is 25.0 ~2,250 HP and must be replaced 22.8 22.3 or remanufactured every 3-5 years 21.0 20.7 6 18.9 17.8 6 6 9 4 14.6 6 Out of Service 6 13 4 Idle/Repair 4 4 Working 9.9

37. Slide 37: Distribution & Services Market Matrix

    Distribution & Services Market Matrix Distribution ~2/3 of Revenues Appx % of Market Industry Vertical Industry growth factor Dist. Rev penetration Oil & Gas 40 % Medium Oil & Gas: U.S. drilling and completion activity Commercial marine 15 % High GDP, regulations, U.S. crop production, U.S. chemical

38. Slide 38: Financial Highlights

    Financial Highlights

39. Slide 39: 2018 Guidance

    2018 Guidance  2018 second quarter guidance of $0.60 to $0.80(1) per share versus $0.48 for the 2017 second quarter excluding one- time items  2018 full year guidance of $2.50 to $3.00(1) per share versus to $1.99(2) per share for 2017 excluding one-time items  Marine Transportation: - Inland uti

40. Slide 40: Financial Summary

    Financial Summary Change Income Statement 1Q 2018 1Q 2017 $ % Revenues Marine transportation $ 340.4 $ 343.6 $ (3.2) -1% Distribution and services 401.3 148.1 253.2 171% Total $ 741.7 $ 491.7 $ 250.0 51% Operating income (loss) Marine transportation $ 16.2 $ 35.8 $ (19.6) -55% Distribution and servi

41. Slide 41: Segment Operating Margins

    Segment Operating Margins 30% 24.3% 25% 23.6% 23.8% 22.4% 22.5% 21.9% 22.1% 21.1% 21.1% 20% 18.9% 19.0% 18.4% 17.4% 16.6% 15.7% 15.6% 17.5% 14.6% 14.9% 15.0% 15% 11.7% 10.5% 10.6% 10.4% 10.0% 10.1% 10.1% 9.7% 9.5% 9.4% 10.3% 10% 8.1% 7.5% 9.7% 5% 3.9% 1.1% 0% 2000 2001 2002 2003 2004 2005 2006 2007

42. Slide 42: EBITDA Per Share

    EBITDA Per Share $12.00 $11.23 $10.49 $10.38 8% compound $10.00 annual growth 1997 - 2017 $9.03 $8.32 $7.95 $8.00 $7.22 $6.66 $6.00 $5.60 $5.73 $5.46 $4.39 $4.00 $3.52 $2.95 $2.65 $2.81 $2.53 $2.73 $2.00 $2.00 $1.70 $1.47 $1.59 $1.26 $0.00 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006

43. Slide 43: Cash Flow Generation

    Cash Flow Generation Kirby consistently generates free cash flow In $ Millions $700 Operating cash flow $601 Capital expenditures $600 (ex-acquisitions) $524 $500 $439 $416 $400 $355 $345 $353 $326 $312 $312 $300 $245 $253 $226 $231 $200-$225 $200 $177 $137 $100 $0 2010 2011 2012 2013 2014 2015 2016

44. Slide 44: Capital Structure

    Capital Structure 2010 – 2018 Debt-to-Total Capital 39.9% Targa 40% Allied 16 Barges Transp. $69MM 36.0% 10 units Penn $109MM 6 Pressure Maritime Seacor Barges 18 units 27 Barges $41MM $301MM $89MM 31.2% 32.5% 30% 26.9% 26.4% Higman 25.4% 161 Barges $419MM Stewart & K-Sea Stevenson $603MM $757MM 24.

45. Slide 45: Financial Strength

    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 maturi

46. Slide 46: Why Invest in Kirby?

    Why Invest in Kirby?  Long-term record of success  Two strong franchises – Marine Transportation – Distribution and Services  Experienced management teams in both core businesses  Strong outlook in both core businesses – Pricing momentum in key areas – Robust demand outlook in the near future 

47. Slide 47: Appendix

    Appendix 46

48. Slide 48: Reconciliation of GAAP to Non-GAAP Financial Measure

    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.

49. Slide 49: Reconciliation of GAAP Net Earnings to Non-GAAP EBITDA - Annually

    Reconciliation of GAAP Net Earnings to Non-GAAP EBITDA - Annually KIRBY CORPORATION Reconciliation of GAAP Net Earnings Attributable to Kirby to Non-GAAP EBITDA 2017 2016 2015 2014 2013 2012 2011 2010 2009 2008 ($ in millions) Net earnings attributable to Kirby $ 313.2 $ 141.4 $ 226.7 $ 282.0 $ 253.

50. Slide 50: Reconciliation of GAAP Net Earnings to Non-GAAP EBITDA - Quarterly

    Reconciliation of GAAP Net Earnings to Non-GAAP EBITDA - Quarterly KIRBY CORPORATION Reconciliation of GAAP Net Earnings Attributable to Kirby to Non-GAAP EBITDA Three Months Ended Three Months Ended Three Months Ended Three Months Ended Three Months Ended Year Ended March 31, March 31, June 30, Sep

51. Slide 51: Marine Transportation Performance Measures

    Marine Transportation Performance Measures KIRBY CORPORATION MARINE TRANSPORTATION PERFORMANCE MEASUREMENTS 2010 2011 2012 2013 2014 2015 2016 2017 2018 Year Year Year Year Year Year Year 1Q 2Q 3Q 4Q Year 1Q YTD Inland Performance Measurements: (1) Ton miles (in millions) 12,957 13,414 12,224 11,754

52. Slide 52: Inland Barge Fleet by Operator

    Inland Barge Fleet by Operator Tank Dry Cargo Tank Dry Cargo Shipper Owned Independent Barges Barges Shipper Owned Independent Barges Barges Operated Operated Operated Operated Kirby Corporation* 1,009 - Settoon Towing, LLC 48 - American Commercial Lines LLC 426 3,219 Chem Carriers, Inc. 43 - Canal

53. Slide 53: Coastal Tank Barge Fleet by Operator

    Coastal Tank Barge Fleet by Operator Coastal Tank Estimated Barrel Capacity* Barges Operated * (MM) Vane Brothers 79 2.9 Kirby is Well- Kirby Corporation 55 5.2 Positioned in U.S. Coastal Markets Harley Marine 42 1.9 Reinauer Transportation 25 2.1 Bouchard Transportation1 23 2.4 Crowley Marine2 15 2

54. Slide 54: $135+ Billion of U.S. Petrochemical Investments

    $135+ Billion of U.S. Petrochemical Investments* Pacific Northwest Cost ($MM) Ohio NW IW - WA 2020 New methanol 3,600 Cost ($MM) NW IW - OR TBD New methanol PTT /Daelin JV 2021 New ethylene 10,000 PBF 2015 Aromatics exp unk Tesoro 2019 New xylene 400 Monaca, PA Iowa Cost ($MM) Cost ($MM) Orascom (OC

55. Slide 55: U.S. Ethylene Feedslate Forecast

    U.S. Ethylene Feedslate Forecast Ethylene Feedstock Volume Thousands of Barrels per Day 2,500 Product, 2017-2022 Growth and CAGR: 2,000 Ethane Growth 43% 5-Year CAGR 7% 1,500 Naptha & ~70% of current Gasoil ethylene Growth -7% production 5-Year CAGR -1% 1,000 is from ethane Butane Growth 8% 5-Year C

56. Slide 56: Petrochemical Buildout – Projected Production

    Petrochemical Buildout – Projected Production Select products that can be transported by barge U.S. Petrochemicals Production (in million lbs./day) 150 Products Toluene +9.2% Xylenes & Heavy Aromatics Benzene 100 Propylene Butadiene & Other C4 2014 Baseline 50 Methanol 0 2012 2013 2014 2015 2016 201

57. Slide 57: Near-Term U.S. Ethylene and Derivative Capacity Additions

    Near-Term U.S. Ethylene and Derivative Capacity Additions U.S. ethylene derivative capacity is ~40% of new derivatives are products expected to expand ~30% over the that are moved by water next 5 years Vinyl Acetate Monomer 1% 4,500 Ethylbenzene 0% Alpha Olefins 15% 4,000 Ethylene Dichloride 4% 3,50

58. Slide 58: Kirby Distribution and Services Locations

    Kirby Distribution and Services Locations Locations / Branches United Holdings Kirby Engine Systems Stewart & Stevenson Seattle Allison / MTU / DTNA Territories United Holdings Stewart & Stevenson EMD Territories Kirby Engine Systems Stewart & Stevenson Albany Marlborough Casper NYC Middletown Pisca

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