Slide 1: Q4 2023 Earnings Presentation
February 20, 2024 Stuart Bradie, President and CEO Mark Sopp, Executive VP and CFO Jamie DuBray, VP of Investor Relations 1
Slide 2: Forward-Looking Statement
FORWARD-LOOKING STATEMENT The statements in this presentation that are not historical statements, including statements regarding our expectations for our future financial performance, effective tax rate, operating cash flows, contract revenues, award activity, program activity, our business strategy
Slide 3: Stuart Bradie, President and Chief Executive Officer
Stuart Bradie President and Chief Executive Officer 3
Slide 4: RECYCLE/
RECYCLE/ REUSE HEALTH, SAFETY & SECURITY EFFICIENT GY ENERGY ity GOVERNANCE SUSTAINABLE ffje Z E RO INCLUSION & TRAVEL 4 A R M DIVERSITY \ supply a 5 COMMUNITY PARTNERS US LY 6 ENGAGEMENT CLIMATE RISK CHANGE MANAGEMENT QUARTERLY £257 G KBR EARNINGS Delivering Solutions, Changing the World,
Slide 5: 2023 HSSE Highlights
2023 | HSSE Highlights 0.067 TOTAL RECORDABLE ZERO HARM INCIDENT RATE 2023 ACHIEVED IN 2023 (DOWN FROM 0.079 IN 2022) (UP FROM 91% IN 2022) Industry Leadin Industry Leading 1g ener MAINTENANCE TYVEK LINE 8 KBR & DESCON ALLIANCE PROGRAM LUXENBOURG ACHIEVED ACHIEVED 4™ YEAR OF ACHIEVED ACHIEVED 4 YEAR
Slide 6: 2023 KBR Business Health
2023 | KBR BUSINESS HEALTH PEOPLE ZERO HARM • Headcount increased double digits since 2022 • Recorded 93% Zero Harm Days & 0.067 TRIR1 • Certified as a Great Place to Work in 16 countries • 96% of employees say KBR is a Safe Place to Work • Multiple external recognitions and awards • Affordable and
Slide 7: Markets and Awards
MARKETS AND AWARDS SUSTAINABLE TECHNOLOGY SOLUTIONS GOVERNMENT SOLUTIONS ◦ Leveraging the energy trilemma: the challenge of meeting ◦ U.S. budget growth expected to fuel award activity including demands for security, sustainability and cost effectiveness increased spending towards emerging technolog
Slide 8: HomeSafe Update
HOMESAFE UPDATE • Progress and Timeline: Completed round 1 system testing in January with local test moves planned for Spring. Expected controlled volume ramp throughout 2024, significant ramping HomeSafe Alliance JV mission is to: into 2025, and international moves starting in 2026. • Enhance the r
Slide 9: Mark Sopp, Executive Vice President and Chief Financial Officer
Mark Sopp Executive Vice President and Chief Financial Officer 9
Slide 10: 4Q'23 KBR Delivers Continued Growth
4Q'23 | KBR DELIVERS CONTINUED GROWTH REVENUES ADJ. EBITDA1 +8% REVENUES Organic $1,608 $1,730 $157 Margin % $188 +20% ADJ. EBITDA1 9%9.8% 10.9% 9% +110 ADJ. EBITDA1 bps expansion ADJ. EPS1 ADJ. OCF1 $0.69 $0.69 +13% Capex Capex ADJ. FCF1 Free cash Free cash Year over year % change Amounts in $milli
Slide 11: 2023 KBR Delivers Continued Growth
2023 | KBR DELIVERS CONTINUED GROWTH REVENUES ADJ. EBITDA1 +11% REVENUES Margin % Organic, ex-OAW 1 $6,564 $6,956 $747 $668 $6,251 +12% ex-OAW1 ADJ. EBITDA1 10.2% 10.7% +7% ADJ. EPS1 ADJ. EPS1 ADJ. OCF1 $2.91 Capex $2.71 Capex +8% ADJ. FCF1 Free cash Free cash Year over year % change Amounts in $mil
Slide 12: STS Segment Results Demonstrate Mission Focus, Resilience and Agility
STS | SEGMENT RESULTS DEMONSTRATE MISSION FOCUS, RESILIENCE AND AGILITY QUARTERLY RESULTS FULL YEAR RESULTS REVENUES ADJ. EBITDA1 REVENUES ADJ. EBITDA1 Margin % Margin % 21% 18% 18.0% 21.0% 17.0% 21.1% ◦ STS organic revenue growth of 14% over 4Q'22 driven by ◦ STS organic revenue growth of 29% over
Slide 13: GS Segment Results Demonstrate Mission Focus, Resilience and Agility
GS | SEGMENT RESULTS DEMONSTRATE MISSION FOCUS, RESILIENCE AND AGILITY QUARTERLY RESULTS FULL YEAR RESULTS REVENUES ADJ. EBITDA1 REVENUES ADJ. EBITDA1 Margin % Margin % $5,007 5007 1 ex-OAW ex-OAW 9.4% 9.6% 10.4% 10.0% Shaded portion reflects Operation Allies Welcome (OAW) Revenue in FY22. ◦ GS orga
Slide 14: Strategic, Accretive and Balanced Capital Deployment
STRATEGIC, ACCRETIVE AND BALANCED CAPITAL DEPLOYMENT Settled Refinanced CAPITAL DEPLOYMENT Capital Structure 11% Annual Convertible Notes Dividend Increase PRIORITIES & Warrants; in 2024 (extended maturity & in 2024 Fund Organic Growth No dilution restored revolver ($0.60 per share) (~$600M total) M
Slide 15: Initiating FY 2024 Guidance
INITIATING FY 2024 GUIDANCE Fiscal Year 2024 Assumptions KBR, Inc. FY 2024 Guidance • Guidance excludes capital deployment, except for repurchases to mitigate REVENUES $7.4B - $7.7B annual share count creep • Adjusted diluted share count: ~135M ADJ. EBITDA $810M - $850M • Depreciation & amortization
Slide 16: Key Takeaways
KEY TAKEAWAYS ◦ Strong finish to FY23 — Backlog and Options up 10% and Adj. EBITDA1 growth of 12% year over year ◦ Derisked 2024 and beyond with convert and warrant settlement, legacy legal resolution, and refinanced capital structure ◦ Defined path forward on HomeSafe through continued partnership
Slide 17: Save the Date
SAVE THE DATE KBR Sustainable Technology Solutions Primer Webcast March 12, 2024 10AM to 11AM EST } fe QUARTERLY Ey meverng Solutions, Changing the World. i EARNI ING S 7
Slide 18: QUARTERLY Ezy
QUARTERLY Ezy Delivering Solutions, Changing the Work d! : a EARNINGS
Slide 19: Appendices
Appendices F Wi Y Uf i, : || | | EARNINGS
Slide 20: Non-GAAP Reconciliations: Adjusted EPS
NON-GAAP RECONCILIATIONS Adjusted EPS 4Q'22 4Q'23 FY2022 FY2023 FY2024 Guidance Diluted EPS $0.62 $0.15 $1.26 $(1.96) $2.89 $3.09 Adjustments: Amortization related to acquisitions 0.04 0.04 0.19 0.17 0.15 Ichthys interest and commercial dispute costs (0.03) (0.03) 1.02 0.01 0.02 Acquisition, integra
Slide 21: Non-GAAP Reconciliations: Revenue ex-OAW
NON-GAAP RECONCILIATIONS Revenue ex-OAW 4Q'22 4Q'23 Growth FY2022 FY2023 Growth Revenue (as reported) $1,608 $1,730 8% $6,564 $6,956 6% Revenue attributable to OAW 4 — 313 — Revenue ex-OAW $1,604 $1,730 8% $6,251 $6,956 11% GS Revenue (as reported) $1,256 $1,328 6% $5,320 $5,353 1% Revenue attributa
Slide 22: Non-GAAP Reconciliations: Adjusted Operating and Free Cash Flow
NON-GAAP RECONCILIATIONS Adjusted Operating and Free Cash Flow 4Q'22 4Q'23 FY2022 FY2023 Cash flows provided by operating activities $60 $83 $396 $331 Adjustments: Adjust: CARES Act temporary tax repayment (relief) 28 — 28 — Legacy legal settlement (after tax) — — — 132 Adjusted cash flows provided
Slide 23: Non-GAAP Reconciliations: Adjusted EBITDA
NON-GAAP RECONCILIATIONS Adjusted EBITDA 1Q'22 2Q'22 3Q'22 4Q'22 1Q'23 2Q'23 3Q'23 4Q'23 TTM Net income (loss) attributable to KBR $(71) $94 $74 $93 $86 $(351) $(21) $21 $(265) Adjustments: Interest expense 20 21 23 23 26 29 30 30 115 Accretion of Convertible Notes debt discounts — — — — — 128 114 4
Slide 24: Non-GAAP Reconciliations: Adjusted EBITDA - Segment
NON-GAAP RECONCILIATIONS Adjusted EBITDA - Segment 1Q'22 2Q'22 3Q'22 4Q'22 1Q'23 2Q'23 3Q'23 4Q'23 TTM Pretax income attributable to GS $114 $124 $96 $106 $101 $(33) $106 $102 $276 Interest expense 1 — 2 1 2 4 2 3 11 Other non-operating (income) expense — 8 9 (18) (1) 1 — (2) (2) Depreciation and am
Slide 25: Reconciliation of Operating Income to Adj. EBITDA
NON-GAAP RECONCILIATIONS Reconciliation of Operating Income to Adj. EBITDA Twelve months ended December 29, 2023 GS STS Corporate KBR Operating income $285 $324 $(161) $448 Noncontrolling interest — (4) — (4) Depreciation and amortization 96 19 26 141 Loss on derivative bifurcation — — (104) (104) L
Slide 26: Supplemental Reconciliation
SUPPLEMENTAL RECONCILIATION Reconciliation of Adjusted EBITDA to Adjusted EPS Twelve months ended December 29, 2023 KBR Adjusted EBITDA $747 Interest expense (115) Other non-operating income (expense) (5) Provision for income taxes (95) Depreciation and amortization (141) EPS adjustments: Amortizati