Highlights

    2010 First Quarter Summary

• Marine Transportation:
  • Improved business levels in a majority of markets compared with most of 2009, the result of improved    petrochemical production, plant outages and exported petrochemicals
  • Utilization in the mid to high 80% range
  • Offsetting higher volumes was lower term contract and spot contract pricing
  • Higher diesel fuel prices impacted revenues and costs
  • 2010 and 2009 Q1 includes charge for early retirements and staff reductions of $2.7M and $2.6M,    respectively
  • Operating margin of 19.3% compared with 21.1% for 2009 Q1
    • Lower term contract and spot contract rates
    • More difficult operating conditions requiring additional horsepower
    • Higher diesel fuel costs
    • Partially offset by positive impact of ongoing cost reduction initiatives
    • Excluding 2010 and 2009 Q1 charge, operating margin was 20.5% and 22.%, respectively
• Diesel Engine Services:
  • Continued weak service levels and direct part sales across majority of marine markets, particularly
        Gulf Coast oil services market
  • Customers continue to defer major maintenance
  • Power generation market firm with modification projects
  • Operating margin of 10.4% compared with 8.7% for 2009 Q1
    • Lower service and direct parts demand and resulting lower labor utilization
    • 2009 Q1 included charge of $1.4M for early retirements and staff reductions
    • Partially offset by positive impact of 2009 cost reduction initiatives
    • Excluding 2009 Q1 charge, 2009 Q1 operating margin was 11.1%

    2010 Second Quarter and Year Outlook

• Marine Transportation Market
  • As U.S. economy improves, petrochemical and refinery volumes should improve
  • Excess industry-wide tank barge capacity places downward pressure on pricing
    • 192 tank barges delivered in 2009 and an estimated 140 retired
  • To achieve pricing power, barge capacity must be removed or volumes must improve
    • Time will tell if volume improvement in Q1 is sustainable
    • Age of industry fleet limits overcapacity risks
    • Approximately 500 barges over 35 years old, with 250 over 40 years old
    • Costly Coast Guard certification requirements should drive older barges into retirement
  • 2010 barge construction estimated at less than 100, of which 58 are Kirby's
    
    
• 2010 Q2 Earnings Guidance: $.52 to $.57 per share vs. $.63 for 2009 Q2
  • $.52 guidance - marine transportation volumes will remain steady at current pricing levels
  • $.57 guidance - marine transportation volumes will continue to improve with modest improvement in pricing
  • Diesel engine services results consistant with Q1
    


• 2010 Year Guidance: $2.00 to $2.20 per share vs. $2.34 for 2009
• $2.00 guidance - marine transportation volumes will remain steady for balance of 2010 with pricing at        current levels
• $2.20 guidance - marine transportation volumes will continue to improve, some reduction in industry capacity    and modest improvement in pricing
• Diesel engine service results consistant with Q1 for balance of 2010

* Net earnings attributable to Kirby and earnings per share attributable to Kirby common stockholders after adjustments are non-GAAP financial measures used by Kirby that exclude non-recurring adjustments in order to present a measure of net earnings that facilitates a comparison of results from one period to results from another period on a more consistent basis, since the non-recurring items are materially different in nature and amount from one period to another. The adjustments generally represent items that are outside normal business operations and are therefore difficult to predict for future periods.

** Kirby has historically evaluated its operating performance using numerous measures, one of which is EBITDA, a non-GAAP financial measure.  Kirby defines EBITDA as net earnings attributable to Kirby before interest expense, taxes on income, depreciation and amortization.  EBITDA is presented because of its wide acceptance as a financial indicator.  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.  EBITDA is not a calculation based on generally accepted accounting principles and should not be considered as an alternative to, but should only be considered in conjunction with, Kirby’s GAAP financial information.

Financial Highlights

Marine Transportation Revenues by Product Line

Approximate percent of marine transportation revenues for the year ended December 31, 2009.

12,000 miles of waterway linking America's heartland to the world.

Fleet

The U.S. inland waterway system is comprised mainly of the Mississippi River and its tributaries and the Gulf Intracoastal Waterway (see map above) and is one of the busiest, cost-efficient, productive and safest transportation systems in the world. The inland waterway system comprises 12,000 miles of navigable interconnected rivers, canals and intracoastal waterways serving the U.S. as water highways.