Slide 1: 2Q 2018 Financial Results
2Q 2018 Financial Results July 30, 2018 Stuart Bradie – President and Chief Executive Officer Mark Sopp – Executive Vice President and Chief Financial Officer Alison Vasquez – Vice President, Investor Relations
Slide 2: Forward-Looking Statements
Forward-Looking Statements This presentation contains forward-looking statements regarding our plans, objectives, goals, strategies, future events, future financial performance and backlog information and other information that is not historical. When used in this presentation, the words “estimates,
Slide 3: Stuart Bradie, Chief Executive Officer
Stuart Bradie Chief Executive Officer
Slide 4: Good Safety is Simply Good Business
Good Safety is Simply Good Business Total Recordable Incident Rate (TRIR) Performance: 2012 – Q2 2018 0.50 0.43 0.42 0.40 0.36 0.30 0.35 0.28 0.32 0.31 0.24 0.24 0.22 0.19 0.20 0.21 0.21 0.19 0.19 0.18 0.10 0.16 0.16 0.14 0.00 2012 2013 2014 2015 2016 2017 Q2 2018 KBR IOGP Top Q IOGP Average KBR is
Slide 5: 2Q18 Financial Snapshot
2Q18 Financial Snapshot Revenues Adjusted EPS1 § Top line revenue growth, underpinned by healthy organic $35 $0.18 growth, long-term stability from Aspire and strategic acquisition $0.39 of SGT in April 2018 $0.34 $1,267 $1,059 § Solid bookings in the quarter with two segments achieving 2Q17 2Q18 2Q
Slide 6: Segment Highlights and Outlook
Segment Highlights and Outlook • Highlights: 11% organic growth for the second consecutive quarter; Over $9B of bids in source selection Government • Market Outlook: Strong outlook with continued tailwinds in domestic and international government Services spending budgets across space and defense •
Slide 7: Ichthys LNG Status
Ichthys LNG Status Operations Temp. Power Butane Propane Complex Plant Tank Tank Combined Cycle Power Plant GTG GTG GTG GTG GTG 1 2 3 4 5 Offsites & Utilities August ‘18 STG STG STG • Structural & Mechanical substantially complete 1 2 3 • E&I and Commissioning remaining Q1 ‘19 LNG Train 2 LNG Tank R
Slide 8: Mark Sopp, Executive Vice President
Mark Sopp Executive Vice President
Slide 9: Consolidated Results
Consolidated Results Quarter Ending ($ in millions, except EPS) Jun 30, 2017 Jun 30, 2018 Revenues $ 1,094 $ 1,267 § Restored growth to KBR top line Gross Profit $ 108 $ 130 § GS revenue growth includes a mixture of Equity in Earnings $ 32 $ 10 organic, Aspire and SGT GP + EE* $ 140 $ 140 § Continue
Slide 10: Segment Results – Government Services (GS)
Segment Results – Government Services (GS) § Organic revenue growth driven by Logistics & Mission Support and Engineering Revenue GP + EE GP + EE Margin § Revenues reflect full quarter of Aspire and partial quarter of $868 $77 10.1% 8.9% SGT $543 $55 § GP+EE up due to organic 2Q17 2Q18 2Q17 2Q18 2Q1
Slide 11: Segment Results – Technology
Segment Results – Technology § Market conditions and KBR positioning are driving continued growth and high Revenue GP GP Margin profitability § Strong backlog growth of 20% $70 $72 $17 $22 24.3% 30.5% in the quarter with book to bill of 2.2x 2Q17 2Q18 2Q17 2Q18 2Q17 2Q18 § Major awards across our di
Slide 12: Segment Results – Hydrocarbons Services (HS)
Segment Results – Hydrocarbons Services (HS) Revenue GP + EE GP + EE Margin (net of NCI) § Steady revenue over the last (net of NCI) (net of NCI) three quarters $439 $34 7.8% 7.2% § Results in line with expectations $308 $22 § Strong backlog growth (34% in 1 1 1 2Q17 2Q18 2 2Q17 2Q18 2 2Q17 2Q18 2 t
Slide 13: Cash, Debt and Leverage Position
Cash, Debt and Leverage Position Quarter Ending Jun 30, 2017 Jun 30, 2018 Ending Cash Balance $ 491 $ 519 Gross Debt $ 470 $ 1,078 Net Debt $ (21) $ 559 TTM Adjusted EBITDA 1 $ 120 $ 319 Gross Debt/Adjusted EBITDA 1 3.9 3.4 Net Debt/Adjusted EBITDA 1 (0.2) 1.8 13 TTM Adjusted EBITDA reconciliations
Slide 14: 2018 Guidance
2018 Guidance 1 § Increasing full year Adjusted EPS guidance to $1.40 - $1.50 § Adjusted EPS excludes: ‒ legacy legal fees ‒ acquisition and integration related expenses ‒ new amortization associated with Aspire acquisition ‒ gain from consolidation of Aspire § Effective Tax Rate: 22% - 24% § Operat
Slide 15: Summary
Summary § Solid quarter, consistent & predictable results § 11% organic revenue growth in Government Services § Improving market fundamentals across Government, Technology & Hydrocarbons § Strong backlog performance in HS and Technology § > 90% of earnings secured for 2018 § Aspire and SGT integrati
Slide 16: Appendix
Appendix
Slide 17: 2018 Backlog – Significantly Lower Risk Profile
2018 Backlog – Significantly Lower Risk Profile Backlog by Contract Type § > 90% of earnings for 2018 secured in backlog § Majority of KBR backlog is currently either long-term, Fixed Price Contracts (GS, reimbursable, PFI or service contracts with a lower Cost Reimbursable, PFI & Services 93% Tech)
Slide 18: Non-GAAP Reconciliation: Adjusted EPS
Non-GAAP Reconciliation: Adjusted EPS Quarter Ending Jun 30, 2017 Jun 30, 2018 EPS (diluted) $ 0.54 $ 0.30 Add Back: Legacy legal fees $ 0.03 $ 0.02 Acquisition & integration related expenses $ 0.00 $ 0.00 Amortization related to aspire acquisition $ 0.00 $ 0.02 Aspire gain on consolidation $ 0.00 $
Slide 19: Non-GAAP Reconciliation: Consolidated, Adjusted and TTM Adjusted EBITDA
Non-GAAP Reconciliation: Consolidated, Adjusted and TTM Adjusted EBITDA Quarter Ending Quarter Ending Sep 30, 2017 Dec 31, 2017 Mar 31, 2018 Jun 30, 2018 TTM 2018 ($ in millions) Jun 30, 2017 Jun 30, 2018 EBITDA $ 82 $ 48 $ 193 $ 94 $ 417 add back Net Income Attributable To KBR $ 77 $ 42 Legacy Lega
Slide 20: Non-GAAP Reconciliation: Adjusted EPS Guidance
Non-GAAP Reconciliation: Adjusted EPS Guidance Guidance FY 2018 EPS (diluted) $1.88 - $1.98 Add Back: Legacy legal fees $ 0.07 Acquisition & integration related expenses $ 0.05 Amortization related to aspire acquisition $ 0.07 Aspire gain on consolidation ($0.67) Adjusted EPS $1.40 - $1.50 20