Kbr, Inc. · NYSE:KBR
Kbr — Credit Suisse 2012 Engineering and Construction Conference
28 slides from Kbr's conference presentation, Jun 7, 2012
Slide 1: Credit Suisse 2012 Engineering and Construction Conference
Credit Suisse 2012 Engineering and Construction Conference Bill Utt - Chairman, President and CEO June 7, 2012 Sue Carter - Executive Vice President and CFO
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 2011 - $9.3 Billion Backlog: March 31, 2012 - $15.8 Billion Headquarters in Houston, Texas ~27,000 employees; 70+ countries KBR is a global engineering, construction, and services company supporting the energy, hydrocarbons, government
Slide 4: KBR’s Global Footprint
KBR’s Global Footprint Gothenburg Moscow Edmonton Greenford Ontario Leatherhead Atyrau Frankfurt Calgary Chicago Baku Salt Lake City Charlotte Raleigh Birmingham Wilmington Algiers Baghdad Arlington Atlanta Kuwait City Houston Dammam Beijing Monterrey Doha Dhahran Dubai MMM Abu Dhabi New Delhi Lagos
Slide 5: KBR’s Three Business Groups
KBR’s Three Business Groups Infrastructure, Hydrocarbons Services Government & Power Gas Monetization N.A. Government & Logistics (NAGL) Construction LNG U.S. Federal Government Refining FLNG Department of Defense Chemicals GTL International Government, Defence Oil & Gas Oil & Gas &
Slide 6: Global Industry Drivers
Global Industry Drivers mmcf/d World Gas Demand by Region 450,000 400,000 350,000 300,000 250,000 200,000 150,000 100,000 50,000 0 1995 2000 2005 2010 2015 2020 2025 North America South America EU / Eurasia Middle East Africa Asia Pacific Source: PFC Energy 6
Slide 7: Global Industry Drivers
Global Industry Drivers mmb/d Global Oil Demand: Two Paths 100 90 80 70 Non - OECD 60 50 40 30 20 OECD 10 0 00 01 02 03 04 05 06 07 08 09 10 11 12 13 20 20 20 20 20 20 20 20 20 20 20 20 20 20 Source: PFC Energy 7
Slide 8: Global Industry Drivers
Global Industry Drivers Real GDP Growth % change from prior year 12% 10% 8% China India 6% World 4% US 2% Germany 0% 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 Source: PFC Energy 8
Slide 9: Australia
Australia LNG Remains Robust Mining Resources Abundant Gorgon Trains 1-3 EPCM KBR’s global Minerals Business Unit Ichthys LNG EPC headquarters located in Australia Gorgon Train 4 Pre-FEED with Rio Tinto’s Hope Downs 4 EPCM expected FEED transition Browse EPC bidding phase Pluto Expansi
Slide 10: China, India and Japan
China, India and Japan KBR’s Technology Business Strong Suite of Technologies Unit Continues Making Strong Advanced Catalytic Olefins (ACO™) Inroads Veba Combi-Cracker (VCC) Doubled headcount in Beijing, China Transport Gasifier (TRIG™) office during 2011 Selective Cracking Optimum Doubl
Slide 11: Middle East
Middle East Seeing Significantly Stronger Iraq Downstream and Infrastructure Activity Compared to Last Decline in LogCAP as work Two Years transitions from military focus to Department of State Anticipate establishing hydrocarbons KBR-AMCDE joint venture related Baghdad office in 2012 Sadara
Slide 12: Africa
Africa LNG Refining Skikda LNG EPC Lobito Refinery Mozambique LNG FEED tendering East Africa could provide lower cost options for LNG development Algiers Seeing a Reawakening with Customers Discussing Large Lagos Projects Luanda Johannesburg 12
Slide 13: Europe / Former Soviet Union
Europe / Former Soviet Union United Kingdom Russia Leatherhead office Sales office Greenford office Veba Combi-Cracker (VCC) Allenby & Connaught project International Paper maintenance and small capital construction projects Greenford Caspian Gothenburg Moscow Poland Frankfurt Atyrau I
Slide 14: South America
South America Strong Technology Presence Establishing Regional Office for KBR in Rio De Janeiro for Industrial and Engineering Offerings Successful Completion of 8 FPSO Hull Designs for Petrobras in 2011 Rio De Janeiro Buenos Aires 14
Slide 15: Canada
Canada Stronger Levels of Investment LNG and Seeing Projects Moving More Quickly; KBR Had Kitimat LNG open book tendering Approximately $2 Billion in process Tenders Outstanding at End Two additional LNG prospects in of April, 2012, including: Western Canada Turnarounds Module fabrication KB
Slide 16: United States
United States Favorable Natural Gas Increase in Export LNG Forward Price Curves and GTL Opportunities Providing Opportunities in KBR currently bidding FEED for LNG Downstream and Technology project Gulf Coast area Businesses Anticipate pursuing one or more FEEDs for GTL projects New ethylene a
Slide 17: KBR Financials and Backlog
KBR Financials and Backlog 17
Slide 18: KBR 2012 Guidance
KBR 2012 Guidance* Full year 2012 earnings per dilute share guidance in $2.45 to $2.80 range: Full year G&A expense between $240 million and $250 million of which an estimated $20 million to $25 million is related to ERP Full year CAPEX of approximately $100 million of which an estimated $60 mil
Slide 19: Cash Generation and Deployment
Cash Generation and Deployment $1.2B $497M Cash Deployment Options Capital Expenditures Acquisitions 2010 and Share repurchases 2011 Acquisitions $413M Dividends Operating & Licensing Cash Arrangements Generation Share $265M Repurchases & Dividends CAPEX; $941M Other $966M Investing & Financ
Slide 20: Performance Index
Backlog 220 210 200 190 Performance Index 180 170 160 150 140 130 120 110 100 90 80 2006 2007 2008 2009 2010 2011 3/31/2012 Revenue Backlog Job Income Backlog Continued focus on job income backlog: Up 40% from December 31, 2011 Up 113% since December 31, 2006 20
Slide 21: Tax Percentage
Tax 80% 70% 60% Tax Percentage 50% 40% 30% 20% 10% 0% 2006 2007 2008 2009 2010 2011 1Q12 Effective Tax Rate Effective Tax Rate Excluding Discrete Items 21
Slide 22: 1Q12 Earnings Summary - KBR
1Q12 Earnings Summary - KBR Revenue, excluding LogCAP, up 5% year-over-year Operating income of $112 million compared to $144 million year-over-year Effective tax rate of 9% compared to 16% year-over-year Earnings per diluted share of $0.61 compared to $0.69 year-over-year Cash and equival
Slide 23: 1Q12 Earnings Summary - Hydrocarbons
1Q12 Earnings Summary - Hydrocarbons ($ in millions) Three Months Ended March 31, March 31, December 31, 2012 2011 $ Change % Change 2011 $ Change % Change Revenue: $ 1,116 $ 1,047 69 7% $ 989 127 13% Job Income: 136 125 11 9% 129 7 5% Job Income (JI) up $11 million compared to first quarter 2011; r
Slide 24: 1Q12 Earnings Summary - IGP
1Q12 Earnings Summary - IGP ($ in millions) Three Months Ended March 31, March 31, December 31, 2012 2011 $ Change % Change 2011 $ Change % Change Revenue: $ 518 $ 855 (337) -39% $ 707 (189) -27% Job Income: 75 107 (32) -30% 94 (19) -20% Job Income (JI) down $32 million compared to first quarter 201
Slide 25: 1Q12 Earnings Summary – Services
1Q12 Earnings Summary – Services ($ in millions) Three Months Ended March 31, March 31, December 31, 2012 2011 $ Change % Change 2011 $ Change % Change Revenue: $ 348 $ 397 (49) -12% $ 378 (30) -8% Job Income: 28 32 (4) -13% 30 (2) -7% Job Income (JI) down $4 million compared to first quarter 2011;
Slide 26: Why KBR?
Why KBR? 26
Slide 27: Investment Thesis
Investment Thesis Fundamentally strong, global growth company with diverse portfolio of businesses Multiple platforms for acceleration of new orders across global end markets Strong balance sheet with emphasis on cash management Patience, prudence and discipline in managing KBR’s businesses
Slide 28: Proud History
Proud History
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