Slide 1: 4Q 2016 & Fiscal Year 2016 Financial Results
4Q 2016 & Fiscal Year 2016 Financial Results February 24, 2017 Stuart Bradie – President and Chief Executive Officer Brian Ferraioli – Chief Financial Officer (Retiring) Mark Sopp – Executive Vice President (Incoming CFO) Lynn Nazareth – 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: Safety: Moving Towards Zero Harm
SAFETY Safety: Moving Towards Zero Harm On February 23, 2017, KBR employees from across the globe came together to celebrate Zero Harm Day which represents an opportunity for each project site and office to recognize the improvements in our safety performance, acknowledge employees and reemphasize t
Slide 5: FY 2016: Transformation of KBR
FY 2016 HIGHLIGHTS FY 2016: Transformation of KBR § Completed strategic acquisitions in key focus areas: ‒ Differentiated Government Services, Technology, E&C Industrial Services (O&M) § Continued expansion of heritage Government Services business in the U.S. § Significant wins in the U.K. GS busine
Slide 6: FY 2016: Reducing Portfolio Risk
FY 2016 FY 2016: Reducing Portfolio Risk HIGHLIGHTS § Working off loss projects: no other major domestic contracts remaining with significant lump sum EPC risk § Strengthened risk management and bidding processes in place to safeguard brand, profitability and strategy § Advanced discussions to settl
Slide 7: Government Services Outlook: Strong Growth
Government Services Outlook: Strong Growth GOVERNMENT SERVICES Outlook: Strong Growth § Growth expected in U.S. defense spending, strong expansion opportunities for the U.K. MoD and through continued privatization / outsourcing in the U.K., and growing opportunity pipeline leveraging KBRwyle capabil
Slide 8: Technology & Consulting Outlook: Steady to Growing
Government Services Outlook: Strong Growth TECHNOLOGY & CONSULTING Outlook: Steady to Growing § Large and growing installed base of ammonia, petrochemical and refining facilities globally – continue to provide increasing revamp opportunities § Expanding portfolio of proprietary technologies as well
Slide 9: Engineering & Construction Outlook
Government Services Outlook: Strong Growth ENGINEERING & CONSTRUCTION Outlook: Growth in OpEx & Positioned for CapEx Recovery § Continued focus on and expansion expected in global industrial services market – O&M, small cap projects, turnarounds and revamping particularly in Middle East, North Ameri
Slide 10: Brian Ferraioli | Chief Financial Officer
Brian Ferraioli | Chief Financial Officer
Slide 11: Consolidated Results: 4Q16 & FY16
RESULTS Consolidated Results: 4Q16 & FY16 § 4Q16 revenues reflect a full quarter’s impact ($ in millions, except EPS) 4Q 2016 FY 2016 of the two GS acquisitions and the expansion Bookings $ 1,216 $ 2,964 of heritage U.S government contracts. Backlog of Unfilled Orders $ 10,938 $ 10,938 § Gross profi
Slide 12: Mark Sopp | Executive Vice President
Mark Sopp | Executive Vice President
Slide 13: 2017 Forward Expectations
2017 PRIORITIES 2017 Forward Expectations § Foundation for 2017 Performance Expectations: ‒ Revenue o FY 2016 reflected stronger Government Services growth, both organic and through acquisitions, and steady T&C revenue offsetting challenging E&C market conditions o Improving market fundamentals in b
Slide 14: 2017 Guidance
2017 GUIDANCE § EPS range $1.10 - $1.40, excluding legacy legal fees – Reflects organic growth for GS, T&C and OpEx projects in E&C, contraction in CapEx projects in E&C, and target margins for all segments – Includes $22M, or $0.15 EPS, in amortization – Estimate for legacy legal fees is $9M or $0.
Slide 15: Year-End Backlog
YEAR-END BACKLOG Significantly Lower Risk Profile Backlog by Business Segment Backlog by Contract Type T&C Govt Cost Lump Sum Services Reimbursable, Contracts E&C, PFI & Services (GS, T&C) – Other Contracts Low Risk Lump Sum Contracts, 65% of E&C Backlog E&C is Cost Reimbursable Contracts Total KBR
Slide 16: Economic Value of Backlog Growth: YE 2015 v YE 2016
Economic Value of Backlog Growth: YE 2015 v YE 2016 BACKLOG § GS backlog particularly for the U.S. government contracts does not include option years or expected / historical volumes under task orders, and thus work ultimately realized may significantly exceed the booked amount – currently estimated
Slide 17: 2016 Was a Pivotal Year
CONCLUSION 2016 Was a Pivotal Year § Working towards completing the transition to: global provider of high- end, differentiated, professional services and technologies § Well positioned for growth in both Government Services & Hydrocarbons sectors through long-term services contracts § Significantly
Slide 18: Join Us For Investor Day
Join Us For Investor Day Friday, May 12 at the New York Stock Exchange www.kbr.com | We Deliver © Copyright KBR February 24, 2017
Slide 19: Appendix
APPENDIX
Slide 20: Consolidated EBITDA Reconciliation
NON-GAAP RECONCILIATION Consolidated EBITDA Reconciliation ($ in millions) 4Q 2016 FY 2016 Net Income Attributable To KBR ($87) ($61) Add Back: Interest Expense (Income) $6 $7 Provision for Income Taxes $ 57 $ 84 Depreciation & Amortization $ 14 $ 45 Consolidated EBITDA ($10) $ 75 Note: EBITDA is de