Kbr, Inc. · NYSE:KBR
Kbr — D.A. Davidson's Tenth Annual Engineering & Construction Conference (September 2011)
20 slides from Kbr's conference presentation, Sep 20, 2011
Slide 1: D.A. Davidson's Tenth Annual Engineering & Construction Conference
D.A. Davidson’s Tenth Annual Engineering & Construction Conference Bill Utt – Chairman, President and CEO Sue Carter - Executive Vice President and CFO September 20, 2011 Page 1 of 19
Slide 2: Forward Looking Statements
Forward Looking Statements This presentation contains “forward-looking statements.” All statements other than statements of historical fact are, or may be deemed to be, forward-looking statements. Forward-looking statements include statements about the benefits of the split-off, the discussions of K
Slide 3: KBR – A Leading Global E&C Provider
KBR – A Leading Global E&C Provider » Revenue: Full Year 2010 - $10.1 Billion; Fortune 500 Company #242 Full Year 2009 - $12.1 Billion; Fortune 500 Company #193 » Backlog: June 30, 2011 - $12.0 Billion (76% reimbursable / 24% fixed-price)* June 30, 2010 - $12.4 Billion (79% reimbursable / 21% fixed-
Slide 4: KBR's Global Footprint
KBR’s Global Footprint Gothenburg Edmonton Greenford Moscow Leatherhead Calgary Wilmington Frankfurt Atyrau Arlington Baku Raleigh / Charlotte Algiers Baghdad Houston Atlanta Beijing Kuwait City Birmingham Monterrey Dhahran Dubai New Delhi MMM Abu Dhabi Lagos Singapore Jakarta Angola Rio De Janeiro
Slide 5: Hydrocarbons
Hydrocarbons ¾Market-leading position on 6 major LNG projects ¾ Ichthys FID expected fourth quarter of 2011 ¾ Kitimat FEED expected completion end of 2011 with FID in first half 2012 ¾ Pluto Expansion pre-FID services continuing ¾ Browse expected FEED completion for mid- 2012 FID ¾ Gorgon 4 pre-FEED
Slide 6: Hydrocarbons
Hydrocarbons ¾Oil & Gas ¾ FEEDs being converted to detailed engineering, design, and implementation ¾ GOM: Big Foot; Jack & St. Malo ¾ North Sea: Quad 204 - West of Shetlands; South Arne ¾ West Africa: CLOV; ¾ Caspian: Chirag; Shah Deniz 2; Kashagan ¾ Western Australia: GDF SUEZ Bonaparte; ¾ Brazil:
Slide 7: Downstream
Downstream ¾Lobito 200,000 barrels-per-day refinery project ¾ FEED complete; working under EPCm bridging agreement ¾Saudi Arabia projects progressing well ¾ Yanbu Export Refinery project - KBR’s PMC team moving to site ¾ Ras Tanura Integrated project – FEED completion and FID expected later this yea
Slide 8: Technology
Technology KBR develops new technologies that reduce cost while improving efficiency and safety. This allows KBR to offer customers unsurpassed value through a suite of technologies, including: ¾ Ammonia: Purifier™; Purifierplus™; KAAP™; KAAPplus™ ¾ Refining: Veba Combi-Cracking (VCC); ROSE©; FCC ¾
Slide 9: North America Government & Defense
North America Government & Defense ¾ LogCAP Updates and Outlook ¾ Expected 2011 revenue between $1.6 to $1.8 billion ¾ Assuming current 50,000 troop levels until the back half of 2011, with substantial ramp down by end of 2011 ¾ LogCAP III modified to cost-plus-fixed-fee ¾ Expect final award fee und
Slide 10: Infrastructure, Government, and Power
Infrastructure, Government, and Power ¾ Power & Industrial ¾ $450 million KBR award for Palm Beach Solid Waste Authority new state- of-the-art waste to energy facility ¾ Ramp-up in North America capital investment: up 10-15% year-over-year ¾ Infrastructure & Minerals ¾ Middle East infrastructure act
Slide 11: Services
Services ¾U.S. construction markets ¾ Now seeing the beginnings of a return of larger construction projects ¾ Chevron’s Base Oil expansion project award ¾ Southern Company’s Plant Scherer project award ¾Increasing activity in Alberta oil sands region ¾Building Group benefitting from strong sales act
Slide 12: KBR Financials and Backlog
KBR Financials and Backlog Page 12 of 19
Slide 13: Second Quarter 2011 Earnings Summary
Second Quarter 2011 Earnings Summary ¾Revenue up 5% year-over-year excluding LogCAP revenue ¾Operating income of $169 million, up 17% compared to the first quarter of 2011 ¾Earnings per diluted share of $0.65 compared to $0.66 for second quarter of 2011 ¾Cash flows from operating activities of $223
Slide 14: Job Income Margin
Strengthening Backlog Contributing to Margins 13.0% 2011* 12.0% 2010 11.0% Job Income Margin 10.0% 2009 9.0% 2007 2008 8.0% 2006 7.0% 6.0% $8,000 $9,000 $10,000 $11,000 $12,000 $13,000 Revenue (in millions) *Note: Annualized based on First Six Months of 2011 Actual Reported financials from Form 10-Q
Slide 15: Operating Income Margin
Strengthening Backlog Contributing to Margins 7.0% 2011* 6.0% 2010 Operating Income Margin 5.0% 2008 2009 4.0% 2007 3.0% 2.0% 2006 1.0% $8,000 $9,000 $10,000 $11,000 $12,000 $13,000 Revenue (in millions) *Note: Annualized based on First Six Months of 2011 Actual Reported financials from Form 10-Q da
Slide 16: KBR's Backlog Methodology
KBR’s Backlog Methodology ¾For long-term contracts, the amount included in backlog is limited to five years ¾Only projects for actual awards where work scope is definitized are added to backlog ¾IDIQ / MATOC style contracts are only added to backlog when awarded or definitized ¾For projects where KB
Slide 17: Cash Generation & Cash Deployment
Cash Generation & Cash Deployment $549M $319M 2010 Business Cash Acquisitions $265M Generation & Licensing Arrangements $223M $164M 6 Months 2011 $941M Share Business $120M MWKL $786M$52M Repurchases Cash & Dividends Generation Acquisition Share $81M Repurchases CAPEX; $786M & Dividends* Other CAPEX
Slide 18: Working Capital Management
Working Capital Management ¾Focused on balance sheet ¾Cash neutral or greater on projects ¾Balanced receivables and payables ¾Process efficiencies ¾Collecting on past disputes (EPC 1) ¾Diligently working to resolve disputed withhold amounts Page 18 of 19
Slide 19: KBR Investment Thesis
KBR Investment Thesis • KBR is a catalyst driven growth company across a broad based and diverse series of businesses • Optimism for acceleration in new orders around growth opportunities across markets • Strong balance sheet with emphasis on cash management • Patience, prudence, and thoughtfulness
Slide 20: We Deliver
We Deliver
KBR — D.A. Davidson's Tenth Annual Engineering & Construction Conference (September 2011) on 6ix