Kirby Corp 8-K 11-8-2006

Analyst/Investor Meeting

Kirby Corporation

Houston, Texas

November 8, 2006

Analyst/Investor Meeting

8:15 - 8:45		Kirby Overview
8:45 - 9:45		Kirby Inland Marine
9:45 - 10:00		Tour Dispatch Operations
10:00 - 10:30		Kirby Engine Systems
10:30 - 11:00		Bus ride to Seamen’s Church Institute
11:00 - 11:45		Simulator Observation
11:45 - 12:15		Bus ride to Peterkin building
12:15 - 1:45		Lunch on M/V Observer and tour of fleets and Ship Channel
2:00 - 2:15		Tour of Training Center
2:15 - 2:45		CMAI presentation, Petrochemicals
2:45 - 3:15		Purvin & Gertz presentation, Refined Products
3:15 - 3:30		Closing remarks
3:30		Depart for airports and Waugh Drive

Kirby Corporation

November 8, 2006

Agenda

Presented by

Norman Nolen

CFO, Exec. Vice President

Kirby Corporation

•

Financial Highlights

For First Nine Months Ended September 30, 2006

Financial Highlights

EBITDA and Operating Margins

Marine Transportation

EBITDA and Operating Margins

Diesel Engine Services

Marine Transportation Margins

Thousands of Barrels

Barge Capacity Retirement

Schedule

Replacement Barges

New Construction Costs

Millions of Barrels

Barge Capacity

New Construction Costs

Capitalized Maintenance

Total Capital Expenditures

Cash Flows

* Capex excludes acquisitions

Debt to Capitalization

Kirby Corporation

Kirby Inland Marine

Presented by

Steve Valerius

President

Kirby Inland Marine, LP

•

U.S. Inland Boat and Barge Supply

•

Manning/Crewing Issues

•

Charter Boat Strategy

Total Tank Barges

2,850

Inland Tank Barge Industry

Source: Informa Economics, Barge Fleet Profile, March 2006

Inland Tank Barge Fleet

1,254	Double Skin 30K barges
1,320	Double Skin 10K barges
124	Double Skin < 10K barges
152	Single Skin barges
2,850	Total

Industry Fleet Hull Profile

BBL estimated from Informa Economics

	Barges	Barrels (MM)
2000	104	2.6
2001	92	2.3
2002	79	2.0
2003	117	2.8
2004	100	2.4
2005	104	2.5

Industry Retirement History

903 Active Tank Barges

Petrochemical

Refined
Products

High Capacitypumps –
Specialty coated
tanks

704

114

Pressure

Pressurized

tanks

Black Oil

Self-contained

heating systems

Anhydrous

Ammonia

Refrigeration

tanks

Specialty

Stainless steel

tanks

High Tech and Diverse Fleet

Shipper Owned Independent	Tank Barges Operated	Dry Cargo Barges Operated
Kirby Corporation	903	-
American Commercial Lines LLC	371	2,803
Marathon Ashland Petroleum	170	-
Canal Barge Company, Inc.	169	273
Ingram Barge Company	165	3,716
Florida Marine	91	-
Blessey Enterprises	86	-
American River Transportation Co	82	2,076
Higman Barge Lines, Inc.	80	-
Cenac Towing Company, Inc.	72	-
PPG Industries, Inc.	59	-
Southern Towing Company	53	-
Martin Midstream Partners	52	-
Settoon Towing, LLC	49	-
Magnolia Marine Transport Co	45	-
LeBeouf Brothers Towing Co	44	-
Olin Corporation	29	-
John W. Stone Oil	28	-
Buffalo Marine Service, Inc.	24	-
Rhodia, Inc.	20	-
ConocoPhillips Company	20	-
River City Towing Services	19	-
Houston Marine Services, Inc.	18	-
Lyondell Chemical Company	17	-

Tank Barge Owners By Number of Tank Barges

Informa Economics, Barge Fleet Profile, March 2006-Adjusted

Shipper Owned Independent	Tank Barges Operated	Dry Cargo Barges Operated
Dynegy Midstream Services	16	-
Dupont	16	-
Waxler Towing Company, Inc.	15	-
Horizon Maritime	15	-
Highland Towing	13	-
Devall Towing	12	-
Chem Carriers, Inc.	12	-
Plaquemine Towing Corp.	11	-
Golding Barge Lines, Inc.	9	-
Grifco	8	-
Westlake/GA&O Corporation	8	-
Merichem Company	7	-
Apex Towing	7	-
Republic of Texas	6	-
Hines Barge Line	6
American Milling	5	11
Mon River Towing, Inc.	4	142
Reilly Industries	4	-
Memphis Barge Lines	4	-
Barge Management, Inc.	3	-
Cytec Industries	2	-
Jantran, Inc.	1	-
Other dry cargo carriers	-	8,768
TOTAL	2,850	17,789

Fleet Size and Diversity

2006

2007

2008

2 10K Clean

30K Clean

25 Total

6 10K Clean

20 30K Clean

26 Total

20 10K Clean

12 30K Clean

32 Total

Kirby New Construction Plan

2006

2007

111

2.9 MM BBL

133

3.3 MM BBL

Total Industry

2008

1.1 MM BBL

New Construction on Order

10,000 bbl - Clean	$1.25M*
30,000 bbl - Clean	$2.30M
30,000 bbl - Heated Black Oil	$3.50M

*Specialty

New Construction Prices

Construction labor	38%
Steel, steel products	37%
Components	17%
Engineering	8%
	100%

New Construction Cost

Components

Mill Price + Scrap Surcharge

Source: American Metal Market/CRU Monitor

Steel Sheet Prices

New Construction

Number of Barges

Barrel Capacity (mm)

Kirby Fleet Status

Kirby Towboat Construction

2006/07

4 – 2100 HP – 90’x34’x10’

Oct 30, Jan 17, March 29, May 11

2007

4 – 1800 HP – 76’x35’x10’

June 10, July 25, Sept 5, Oct 17

2008

4 – 1800 HP – 76’x35’x10’

March, April, May, June

Robert G. Stone, Jr.

Towboat Fleet

157	Kirby-owned boats
90	Full-time charter boats
5	Short-term use boats
252	Total Operated Boats

•

27 different charter boat service providers

•

Average tenure with Kirby is 12 years

Kirby operates 94 chartered towboats

•

No capital cost

•

Variable cost vs. fixed cost

Charter Boat Strategy

Charter Boats

Marine Workforce

Captains / Pilots

Tankermen

Deckhands/Tankermen Trainees

Engineers

1,323 Marine Employees

495

394

341

Vessel Personnel Profile

Average Years of Service

Captains

Tankermen

Engineers

Vessel Personnel Profile

•

Recruit

–

Develop a large diverse applicant pool

–

Promote career path/competitive pay

–

Conduct comprehensive screening

•

Training and Development

–

Company-owned and operated TrainingCenter providing US Coast Guard Approved Programs

–

Safety and job skill training

–

Classroom, simulation and hands-onlearning

–

Nine USCG-certified courses

•

Include Tankermen DL, Radar andMate (Pilot) courses

Recruit, Train and Retain

•

Career Path is Critical to Retention

–

Training Path culminates with industry’s onlyUSCG Approved Mate (Pilot) Program – (Steersmen)

–

Retention rate of 90% for employees completingthe program

Recruit, Train and Retain

Deckhand

Tankerman

Steersman

Pilot

Relief Captain

Captain

Starting salary

$30,500

As soon as 6 mos.

$32,000 to $53,500

In 2-3 years

$53,500

In 3-5 years

$80,375

In 5-10 years

$87,250

In 10 years

$94,625 Up to

$107,000 plus
bonus

Kirby Offers Excellent Benefits

• Highly competitive wages	• 401(k)
• Insurance	• Disability coverage
• Pension plan	• Annual incentive bonus
• Free training	• Longevity pay
• Paid salary while training	• Holiday pay

Provide Advancement

Opportunity

Presented by

Jim Farley

Exec. Vice President, Operations

Kirby Inland Marine, LP

•

Shipyards

•

River Conditions

•

Regulatory Issues

Jeffboat

Trinity – Ashland City

Trinity – Madisonville

Southwest

West Gulf

West Gulf - Palacios

Tank Barge New Construction

Shipyards

Jeffboat

Tell City

Trinity – Port Allen

Trinity – Caruthersville

Dry Cargo New Construction

Shipyards

Inland Tank Barge Repair Yards

Illinois

River

Upper

Mississippi
River

Ohio

River

Lower

Mississippi
River

Intracoastal

Waterway

Canal and River Constraints

Navigation Delays

•

TWIC

•

Inspected Towing Vessel

Regulatory Issues

Presented by

Bill Ivey

Exec. Vice President, Sales

Kirby Inland Marine, LP

•

Pricing and Contracts

Term vs. Spot

•

70% Contract

–

12 months or longer

–

Formula driven escalators

•

Renewable

–

25% long term

–

35% annually

–

10% every two-three years

•

30% Spot

–

Market driven rates

Contract Escalators

•

Fuel

–

Quarterly

–

Monthly

•

Labor

–

Semi-annually

–

Annually

•

Inflation

–

Semi-annually

–

Annually

Pricing

•

Third Quarter Spot Pricing 25% higheryear over year

•

Currently Spot Pricing 10-15% aboveContract Pricing

•

Strong volumes expected to continue

•

Pricing environment favorable for 2007

Kirby Engine Systems

The Diesel Engine

Services Market

Kirby Engine Systems

Agenda

•

Diesel Engine Market – Overview

•

KES Operations

•

High Speed Market

•

High Speed Acquisition Synergies

Acquisition of Global Power HoldingCompany, Inc.

•

Growth Opportunities

Kirby Engine Systems

	Engine Speed	Horsepower Range	Applications	Manufacturers
Slow Speed	Less than 400 RPM	7,000 - 108,000 hp	• Large ocean going vessels • Power generation	• Man B&W • Sulzer • Wartsila
Medium Speed	400 - 1,000 RPM	800 - 32,000 hp	• Inland vessels • Offshore vessels • Fishing • Oil services • Power generation • Locomotives	• EMD • Caterpillar/MAK
High Speed	Over 1,000 RPM	50 - 8,375 hp	• Inland towing • Oil services • Offshore vessels • Power generation	• Caterpillar • Detroit Diesel • Cummins • John Deere

Basic Diesel Engine Types

Kirby Engine Systems

Slow Speed Diesel Engine

Kirby Engine Systems

Medium Speed Diesel Engine

Kirby Engine Systems

High Speed Diesel Engine

Kirby Engine Systems

25%

35%

13%

24%

US Marine Propulsion Engines

Kirby Engine Systems

KES Services

Replacement Parts

•

OEM new parts

•

OEM remanufactured parts

•

Kirby remanufactured parts

Engine and Gear Repair

•

Overhauls

•

Bearing and element replacement

•

Remanufacture engines

•

Machining and Welding

•

Troubleshooting

•

Alignment

Kirby Engine Systems

Manufacturer Affiliations

Kirby Engine Systems

Seattle

Galveston

Paducah

Chesapeake

Rocky Mount

Tampa

Miami

High Speed

Medium Speed

KES Locations

Kirby Engine Systems

Revenue Growth

Kirby Engine Systems

Operating Income

Kirby Engine Systems

High Speed Market

•

Overview

–

Engine population

•

High speed engines provide main propulsion power for over 73% of U.S. flagged commercial vessels

–

Markets:

•

Oil Services

•

Inland Waterways

•

Offshore Towing

–

Consolidation

Kirby Engine Systems

High Speed Acquisition

Synergies

•

Synergies

–

Opportunity to provide multiple products and services to individual customers

–

Diversifies customer base

Kirby Engine Systems

Global Acquisition

•

Global Business Overview

–

Premier high speed diesel engine service provider on the Gulf Coast

–

296 employees; 175 service technicians

–

Projected revenue of $68 - $70 million in 2006

–

Six operating locations

–

Gulf Coast authorized marine dealer:

•

Caterpillar

•

Cummins

•

Detroit Diesel

•

John Deere

Kirby Engine Systems

KES Opportunities

•

High Speed Market Expansion Opportunities

–

Engine rebuild capacity

–

Inland waterway business

–

Land drilling

•

Market Consolidation

–

Consolidation in customer base

•

Acquisitions

Presented by

Joe Pyne

CEO, President

Kirby Corporation

•

Closing Remarks

17% growth

rate from
1988-2005

Revenue – Business Operations

1994-2001 adjusted to exclude goodwill amortization expense

2002 adjusted to exclude impairment charges of $12.5 million, net of taxes, or $.51 per share

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

14.2% growth

rate from

1994 - 2005

Earnings Per Share From Continuing Operations Before Adjustments

Guidance

Earnings Per Share

After Tax Return on Capital*

*(Net income + after-tax interest)/(debt + equity)

Kirby Corporation

* Towboats Only

Date	No. of Tank Barges	Description
1986	5	Alliance Marine
1989	35	Alamo Inland Marine Co.
1989	53	Brent Towing Company
1991	3	International Barge Lines, Inc.
1992	38	Sabine Towing & Transportation Co.
1992	26	Ole Man River Towing, Inc.
1992	29	Scott Chotin, Inc.
1992	*	South Texas Towing
1993	72	TPT, Division of Ashland
1993	*	Guidry Enterprises
1993	53	Chotin Transportation Company
1994	96	Dow Chemical (transportation assets)

Date	No. of Tank Barges	Description
1999	270	Hollywood Marine, Inc. -Stellman -Alamo Barge Lines -Ellis Towing -Arthur Smith -Koch Ellis -Mapco
2002	15	Cargo Carriers
2002	64	Coastal Towing, Inc. (barge management agreement for 54 barges)
2002	94	Dow/Union Carbide (transportation assets)
2003	64	SeaRiver Maritime (ExxonMobil)
2005	10	American Commercial Lines (black oil fleet)
2006	*	Capital Towing

Date	No. of Tank Barges	Description
1999	270	Hollywood Marine, Inc. -Stellman -Alamo Barge Lines -Ellis Towing -Arthur Smith -Koch Ellis -Mapco
2002	15	Cargo Carriers
2002	64	Coastal Towing, Inc. (barge management agreement for 54 barges)
2002	94	Dow/Union Carbide (transportation assets)
2003	64	SeaRiver Maritime (ExxonMobil)
2005	10	American Commercial Lines (black oil fleet)
2006	*	Capital Towing

Shipper Owned(Blue)

Independent (Red)

Marine Transportation -

Acquisitions

Marine Transportation -

Acquisitions

Marine Transportation -

Acquisitions

Acquisitions
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.
2005	TECO (Diesel Services Division)
2006	Global Power Holding Company
2006	Marine Engine Specialists

Diesel Services – Acquisitions

•

Investment grade public debt

–

Standard & Poor’s – BBB+

–

Moody’s – Baa3

•

8-year unsecured Private Placement due 2013

–

$200 million outstanding

–

Floating rate of LIBOR +0.5%

–

No required principal payments until maturity

•

$250 Million Revolving Credit Facility

–

Accordion feature allows maximum amount to increase to $325 million without amendment

–

$216 million available, including $75 accordion

Financial Strength

Tank Barge Supply and Demand