K-Sea Transportation Partners LP
K-Sea Transportation Partners LP — Merger or Acquisition (May 2011)
49 slides from K-Sea Transportation Partners LP's merger presentation, May 20, 2011
Slide 1: Kirby Corporation: Putting America's Waterways to Work
KIRBY CORPORATION Putting America's Waterways to Work NYSE: KEX May 2011
Slide 2: Forward Looking Statements and Non-GAAP Financial Measures
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 uncertai
Slide 3: Important Information about the K-Sea Transportation Merger
Important Information about the K-Sea Transportation Merger and Additional Information This communication does not constitute an offer to sell or the solicitation of an offer to buy any securities or a solicitation of any vote or approval. The proposed merger transaction involving Kirby Corporation
Slide 4: Kirby Business Operations
Marine Transportation of 2010 Revenue $915.1 million Largest U.S. Inland Tank Barge Operator 4 Kirby...Business Operations 18% 82%
Slide 5: Kirby Public Market Facts
Kirby...Public Market Facts 5 NYSE: K E X Current Price (May 16, 2011) $53.48 Number of Shares O/S (May 3, 2011) 53.7M Market Capitalization $2,872M Debt (May 16, 2011) $310M Enterprise Value $3,182M Employees 3,350
Slide 6: Kirby Facts
Kirby Facts 6 Largest inland tank barge operator Operating 829 barges and 249 towing vessels Sustainable competitive advantages: Lowest cost due to economies of scale Best positioned for growth opportunities "One Stop Shop" for customers 75% of inland marine transportation revenues under term contra
Slide 7: Marine Transportation Acquisition History
7 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
Slide 8: Acquisitions in Diesel Engine Services
8 Acquisitions in Diesel Engine Services 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) 200
Slide 9: Revenue
Revenue... Business Operations 9 14.6% growth rate from 1988-2010
Slide 10: Earnings Per Share
10 Earnings 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 * Includes $.20 to $.25 per share from United, purchased April 15, 2011 * Expected positive earnings impact from K-S
Slide 11: Kirby Marine
11 KIRBY MARINE
Slide 12: U.S. Inland and Coastal Waterway Systems
12 U.S. Inland and Coastal Waterway Systems Sioux City Chicago Pittsburgh Charleston Tulsa Corpus Christi St. Louis Cincinnati Houston St. Marks St. Paul New Orleans Kirby is one of the few operators offering distribution throughout the Mississippi River System and Gulf Intracoastal Waterway 12,000
Slide 13: Barge Industry Facts
Barge Industry Facts The U.S. barge industry serves both the inland waterways, U.S. coastwise ports, Alaska and Hawaii The inland based business is comprised of approximately 18,000 dry cargo barges and 3,100 liquid tank barges The U.S. coastwise, Alaska and Hawaii business is comprised of approxima
Slide 14: Number of Inland Tank Barges
14 Number of Inland Tank Barges For the years 1993 through April 2011 121 single hull tank barges industry wide, 9 operated by Kirby Source: Informa Economics, Barge Fleet Profile, March 2011 - Adjusted
Slide 15: Inland Tank Barge Fleet
15 Inland Tank Barge Fleet Source: Informa Economics, Barge Fleet Profile, March 2011
Slide 16: Largest Inland Tank Barge Operator
Largest Inland Tank Barge Operator 16 Benzene Styrene Methanol Acrylonitrile Xylene Caustic soda Butadiene Propylene Residual fuel oil Coker feedstock Vacuum gas oil Asphalt Carbon black feedstock Crude oil Ship bunkers Black Oil Products - 20%* Anhydrous ammonia Nitrogen-based liquid fertilizer Ind
Slide 17: Inland Fleet Size and Flexibility
Inland Fleet Size and Flexibility... Towboat Fleet Operating an average of 230 towboats in 1st Qtr of 2011 vs. 224 in 1st Qtr of 2010 Chartered towboats used to balance horsepower with demand 17 Tank Barge Fleet Large fleet facilitates better asset utilization More backhaul opportunities Faster barg
Slide 18: Kirby Outpaces the Competition
18 Tank Barges Operated Dry Cargo Barges Operated Genesis Energy, L.P. 20 - Rhodia, Inc. 19 - TARGA 18 - John W. Stone Oil 17 - Lyondell Chemical Company 17 - Olin Corporation 15 - Highland Marine 11 - Merichem Company 10 - Progressive Barge Line 10 - AgriChemical Marine Transp 8 - Natures Way Marin
Slide 19: End Uses of Products
19 End Uses of Products... * For the first quarter ended March 31, 2011 Demand Drivers
Slide 20: Strong Emphasis on Safety
Committed to dedicating adequate resources to achieve safety objectives Extensive company-owned and operated training facility (Towboat Simulator) Industry leader First winner of Benkert Award, highest award given by Department of Transportation for safety and environmental protection 20 Committed t
Slide 21: Diesel Engine Services
21 DIESEL ENGINE SERVICES United Holdings Kirby Engine Systems
Slide 22: Markets
Markets ~ Inland Waterway Carriers ~ Dry and Liquid ~ Offshore Towing — Dry and Liquid — Offshore Drilling Rigs & Supply Boats = Harbor Towing Dredging Great Lakes Ore Carriers Oil & Gas=Fracturing Transportation Compression — Standby Power Generation — Pumping Stations Power Generation, ‘Nuclear, a
Slide 23: Diesel Engine Services: Engines and Transmissions/Reduction Gears
23 Diesel Engine Services Engines and Transmissions/Reduction Gears
Slide 24: United Holdings
24 United Holdings Distributes and services land based engines, pumps and transmissions Suppliers: Allison Transmissions, MTU Detroit Diesel, Daimler Trucks, Isuzu, Heil and Tymco Markets: Land based oilfield services, transportation, municipalities, construction, and power generation United Engines
Slide 25: United Holdings Acquisition
25 United Holdings 21 locations across 13 states Purchase price of approximately $270 million with up to a $50 million earnout payable in 2014 Entered a market with excellent opportunities for growth, as the recovery of shale gas is an energy "game changer" United, like Kirby, has an experienced man
Slide 26: North American Shale Gas Plays
North American Shale Gas Plays Source: EIA, Tudor Pickering Estimates Bakken 26
Slide 27: Hydraulic Fracturing Overview
Fracturing forces water, sand and chemical down a drilled well at extremely high pressure The force of the fluid creates cracks and fissures increasing porosity Fracturing is often done in stages to increase recovery rates Hydraulic Fracturing Overview Source: Chesapeake Energy 27
Slide 28: K-Sea Transportation Acquisition
K-Sea Transportation Acquisition 28
Slide 29: Pending Acquisition of K-Sea Transportation Partners L.P.
29 Pending Acquisition of K-Sea Transportation Partners L.P. Operator of tank barges and towing vessels participating in the coastwise transportation of primarily refined petroleum products Fleet consists of 58 tank barges with 3.8 million barrels of capacity (54 are double hull) and 63 tugboats, op
Slide 30: Kirby Business Operations After Acquisitions
2012F $1.8 - $2.0 Billion 2010A $1.1 Billion 30 Kirby...Business Operations After Acquisitions 82% Marine Transportation 18% Diesel Engine Services 35%* Diesel Engine Services 65%* Marine Transportation REVENUES * Approximate percentage that could vary significantly based on market and economic cond
Slide 31: Outlook
OUTLOOK 31
Slide 32: 2011 Second Quarter Guidance
32 2011 Second Quarter Guidance Guidance on April 28th for the 2nd quarter was $0.67 - $0.77 per share which included $0.02 to $0.07 per share for the high water event on the Mississippi River System The high water event may have a greater impact on the 2011 2nd quarter results than originally antic
Slide 33: 2011 Year Guidance
33 2011 Year Guidance $2.70 to $2.90 per share vs. $2.15 per share for 2010 High end guidance assumes strong petrochemical and black oil products markets with equipment utilization in the low 90% range and continued modest rate increases Low end guidance assumes deterioration in petrochemical and bl
Slide 34: Planned Capital Expenditures
34 Planned Capital Expenditures 2011 construction program, taking advantage of attractive construction prices Capital expenditure guidance for 2011 of $220 to $230 million $100 million for equipment delivered throughout 2011 38 new 30,000 barrel inland tank bares and two pressure barges 3 new 1800 h
Slide 35: Financial Highlights
FINANCIAL HIGHLIGHTS 35
Slide 36: For First Quarter Ended March 31, 2011
36 For First Quarter Ended March 31, 2011
Slide 37: Operating Margins
Operating Margins Operating Margins 37
Slide 38: EBITDA Per Share Growth
EBITDA Per Share Growth EBITDA Per Share Growth 38 See Appendix for reconciliation of GAAP net earnings to Non-GAAP EBITDA 11.1% growth rate from 1994 - 2010
Slide 39: Cash Flows
Cash Flows Cash Flows 39 Expansion Barges $30 * Unaudited $193 $220*
Slide 40: Debt/Capitalization
Debt/Capitalization 40 14.3% 57.3%
Slide 41: Financial Strength
Financial Strength 41 Investment grade debt, after K-Sea Transportation announcement Standard & Poor's: A- Moody's: Baa3 Fitch: BBB $250 million bank revolving credit $____ million presently outstanding as of May ____, 2011 Renewed in November 2010, 5 year renewal 8-year unsecured Private Placement
Slide 42: Why Invest in Kirby?
‘ssililiamedaiees. eCia WHY INVEST IN KIRBY? =
Slide 43: Why Invest in Kirby?
Why Invest in Kirby? 43 Consistent long-term record of success Experienced Management teams in both core businesses Marine Transportation 75% of business under term contracts, of which approximately 50% are under time charters Approximately 70% of petrochemicals moved produce consumer nondurable goo
Slide 44: Thank You For Listening to Our Story
Thank You For Listening to Our Story Kirby Corporation Putting America's Waterways to Work
Slide 45: Non-GAAP Financial Measures Definitions
Kirby reports its financial results in accordance with generally accepted accounting principles (GAAP). However, Kirby believes that certain non-GAAP financial measures are useful in managing Kirby's businesses and evaluating Kirby's performance. Two such non-GAAP financial measures are adjusted net
Slide 46: Reconciliation of GAAP Net Earnings to Non-GAAP Adjusted Earnings
ea coe Sere + “KIRBY CORPORATION Reconciliation of GAAP Net Earnings Attributable to Kirby and Eamings Per Share Attributable to Kirby Common Stockholders to Non-GAAP Adjusted. Net Earnings Attributable to Kirby and Adjusted Earnings Per Share Attributable to Kirby Common Stockholders (Sinmliers) No
Slide 47: Reconciliation of GAAP Net Earnings to Non-GAAP EBITDA
ne = ie BBs cs ee KIRBY CORPORATION Reconciliation of GAAP Net Eamings Attributable to Kirby to Non-GAAP EBITDA. mo rosa 00H NS O20 mz (Sinmters) NeteamingsatuubotoKiby, CMAP $1162 $1259 $1572 $ 1253 $955 $688 $495 $409 $274 $395 $341 lore xpere nom) 1 3 tessa ts Pron oa econ m3 0k 8ST SUA} HOS HT D
Slide 48: Reconciliation of GAAP Net Earnings to Non-GAAP EBITDA
reg cae Sere * KIRBY CORPORATION Reconciliation of GAAP Net Eamings Attributable to Kirby to Non-GAAP EBITDA "Net earnings attributable fo Kirby sae SUT Interest expense 28 27 Provision for taxes on income 20 184 Depreciation and amorization 252 4 EBITDA, Non GAAP $004 $082
Slide 49: Marine Transportation Performance Measurement
waa weeds ss ee RBY CORPORATION MARINE TRANSPORTATION PERFORMANCE MEASUREMEN “Tonnies amon)” 13g77 ASS 16282 16M 15609 16716 QeT MAST gH 63206387987 RevenwevToamile(enwiny® 4386S gw gw Dates days S94 Gin 432 9m 7469 IST 8267 S20 aH 16S STL © Ton miles indate Nest productivity by measuring the distan
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