Slide 1: 4th Quarter & Fiscal 2018 Financial Results
4th Quarter & Fiscal 2018 Financial Results February 26, 2019 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: Zero Harm | Good Safety is Good Business
Zero Harm | Good Safety is Good Business Total Recordable Incident Rate (TRIR) Performance: 2012 – 20181 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 0.16 0.16 0.10 0.14 0.00 2012 2013 2014 2015 2016 2017 2018 KBR is focused on an industry-leadi
Slide 5: Highlights | 4th Quarter 2018
Highlights | 4th Quarter 2018 $ in millions, except EPS Revenues Adjusted EBITDA1 Adjusted EBITDA1 Revenue, Adjusted EBITDA and Adjusted Margin EPS growth fueled by industry leading $1,330 $107 organic growth and acquisitions $937 8.0% 5.4% 42% top line Revenue growth $51 ‐ 78% growth in GS, 31%
Slide 6: Highlights | Fiscal 2018
Highlights | Fiscal 2018 $ in millions, except EPS Revenues Adjusted EBITDA1 Adjusted EBITDA1 Revenue, Adjusted EBITDA and Margin Adjusted EPS growth fueled by industry $4,913 $414 leading organic growth and acquisitions $4,171 $333 8.4% 8.0% 18% top line Revenue growth ‐ 58% growth in GS, 17% o
Slide 7: Market Outlook: Government Services
Market Outlook: Government Services Expanding and diverse portfolio of full life-cycle capabilities − Acquisitions delivering synergistic opportunities − Access to multiple funding streams, including international Excellent execution, contract performance and client relationships Healthy gover
Slide 8: Market Outlook: Technology
Market Outlook: Technology Strong market fundamentals and growing opportunity pipeline Proving commercialization of revolutionary technologies (e.g., K-SAAT™ - safer, cleaner, more efficient) Regulatory mandates are driving demand for our clean refining solutions (e.g., IMO 2020) Ammonia and
Slide 9: Market Outlook: Hydrocarbons
Market Outlook: Hydrocarbons Strong momentum across the services and global maintenance markets Under-investment in capital projects in recent years Significant LNG supply shortfall beginning in the early 2020’s Increased investment in higher margin chemicals and petrochemicals facilities
Slide 10: Mark Sopp, Chief Financial Officer
Mark Sopp Chief Financial Officer
Slide 11: Consolidated Results
Consolidated Results ($ in millions, except EPS) 4Q 2017 4Q 2018 FY 2018 Revenues $ 937 $ 1,330 $ 4,913 Gross Profit $ 65 $ 123 $ 456 Strong growth in Revenues and Adjusted EBITDA Equity in Earnings $8 $ 27 $ 81 GP + EE* $ 73 $ 150 $ 537 All segments met/exceeded GP + EE targets General & Admini
Slide 12: Segment Performance: Government Services
Segment Performance: Government Services $150 $1,000 Industry leading organic growth: 31% quarter Revenue & GP+EE, by Quarter over quarter; 17% annually $100 − New work (e.g., Tyndall AFB and MSOC) $500 − On-contract growth in our logistics business $50 1.6x book-to-bill3 in the 4th quarter; 1.2
Slide 13: Segment Performance: Technology
Segment Performance: Technology $60 $100 Revenue and GP+EE, by Quarter Strong organic growth: 12% quarter over quarter; 10% annually − Momentum in petrochemicals and refining $30 $50 − Increased contract value with bundling of licenses, services, equipment and catalysts $0 1Q17 2Q17 3Q17 4Q17 1Q18
Slide 14: Segment Performance: Hydrocarbons Services
Segment Performance: Hydrocarbons Services $150 $600 Revenue and GP+EE, by Quarter Sustainable, predictable results in growing markets $75 $300 Margins above expectations ‐ Favorable project close-outs ‐ Strong execution from joint ventures $0 $0 1Q17 2Q17 3Q17 4Q17 1Q18 2Q18 3Q18 4Q18 1.0x bo
Slide 15: Capital Allocation and Liquidity
Capital Allocation and Liquidity Quarter Ending Mar 31, 2018 Jun 30, 2018 Sep 30, 2018 Dec 31, 2018 Ending Cash Balance $ 486 $ 519 $ 581 $ 739 Gross Debt $ 540 $ 1,078 $ 1,169 $ 1,336 Net Debt $ 54 $ 559 $ 588 $ 597 TTM Adjusted EBITDA1 $ 340 $ 320 $ 358 $ 414 Gross Debt/Adjusted EBITDA1 1.6 3.4 3.
Slide 16: 2019 Full Year Guidance
2019 Full Year Guidance 2019 Guidance Diluted Earnings Per Share $1.29 - $1.44 Adjustments: Legacy Legal Fees 0.06 Non-Cash Imputed Interest on Conversion Option 0.06 Acquisition & Integration related Expenses 0.02 Amortization related to Aspire Consolidation 0.06 Incremental Interest on I
Slide 17: 2019 KBR Investor Conference
2019 KBR Investor Conference Friday, May 3 New York Stock Exchange 17
Slide 18: Final Thoughts
Final Thoughts Excellent year – strong growth, execution, cash collection and bookings High cash conversion on target and projected to continue into 2019 Growing confidence in the restoration of LNG and downstream capital investment cycles Healthy overall BTB supporting our growth outlook an
Slide 19: Appendices
APPENDICES 19 Investor Presentation | KBR
Slide 20: Appendix: Ichthys LNG Project Status
Appendix: Ichthys LNG Project Status Operations Temporary Complex Power Plant All of the components of the LNG facility, except for CCPP, are complete and turned over to the client Combined Cycle Power Plant Butane GTG GTG GTG GTG GTG Tank CCPP is on track to export combined cycle power in 1 2 3
Slide 21: Financial Snapshot | Eight Quarters of Consistent Results
Financial Snapshot | Eight Quarters of Consistent Results Adjusted Earnings Per Share Guidance and Results Annual Guidance Achieved Annual AEPS $1.58 to $1.73 Results $1.53 Raised Guidance FY 2019 $1.45 to $1.55 Raised Guidance 4Q ‘18 $1.40 to $1.50 AEPS $0.39 Annual Guidance 3Q ‘18 $1.35 to $1.45 A
Slide 22: Appendix: Backlog Trend
Appendix: Backlog Trend $ in millions $13,495 $13,481 $13,497 $13,157 Majority of KBR backlog is currently $1,601 $2,144 $1,898 $1,898 Hydrocarbons Services associated with long-term, reimbursable, PFI $10,595 $10,324 $10,342 $10,570 $423 $544 $594 Technology and/or service contracts with a lower
Slide 23: Non-GAAP Reconciliation: Adjusted EPS
Non-GAAP Reconciliation: Adjusted EPS Quarter Ending Quarter Ending Mar 31, 2017 Jun 30, 2017 Sep 30, 2017 Dec 31, 2017 FY17 Mar 31, 2018 Jun 30, 2018 Sep 30, 2018 Dec 31, 2018 FY18 EPS (Diluted) $0.26 $0.54 $0.32 $1.94 $3.06 $0.97 $0.30 $0.41 $0.31 $1.99 Add Back: Legacy Legal Fees $0.02 $0.03 $0.0
Slide 24: Non-GAAP Reconciliation: Consolidated, Adjusted and TTM Adjusted EBITDA
Non-GAAP Reconciliation: Consolidated, Adjusted and TTM Adjusted EBITDA EBITDA is defined as earnings before interest income / expense, income taxes, other non- operating income / expense (including FX), depreciation and amortization Jun 30, 2017 Sep 30, 2017 Dec 31, 2017 Mar 31, 2018 Jun 30, 2018 S