Slide 1: 2Q 2017 Financial Results
2Q 2017 Financial Results August 2, 2017 Stuart Bradie – President and Chief Executive Officer Mark Sopp – Executive Vice President and Chief Financial Officer Nelson Rowe – Senior 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: Safety: Moving Towards Zero Harm
SAFETY Safety: Moving Towards Zero Harm Total Recordable Incident Rate (TRIR) Performance: 2011- Q2 2017 0.50 0.43 0.38 0.40 0.36 0.42 0.31 0.35 0.35 0.28 0.30 0.32 0.17 KBR is focused on an 0.20 0.24 0.24 0.23 0.21 industry-leading 0.19 0.18 0.16 commitment to employee 0.10 safety 0.00 2011 2012 20
Slide 4: 2Q17: Highlights
2Q17 HIGHLIGHTS 2Q17: Highlights § Strong results, solid project execution, raising guidance § Continued progress resolving legacy and legal matters § Settled legal claim against PEMEX. Received $435M and dismissal of all pending litigation § Received summary judgment for recovery of claims in the P
Slide 5: Consolidated Results: 2Q17 vs 2Q16
RESULTS Consolidated Results: 2Q17 vs 2Q16 Quarter Ending ($ in millions, except EPS) Jun 30, 2017 Jun 30, 2016 Bookings $ 855 $ 55 Backlog of Unfilled Orders $ 10,324 $ 11,032 § 2Q17 revenues reflect the impact of the two GS acquisitions and organic growth in U.S gov’t Revenues $ 1,094 $ 1,009 cont
Slide 6: Segment Results: 2Q17 vs 2Q16
SEGMENT Segment Results: 2Q17 vs 2Q16 RESULTS Quarter Ending ($ in millions) Jun 30, 2017 Jun 30, 2016 Revenues § Government Services Government Services 543 229 ‒ Increases in revenue and gross profit & equity in Technology & Consulting 82 98 earnings are driven by acquisitions and organic Engineer
Slide 7: Cash Flow, Cash Position and Capital Allocation
CASH/ CAPTIAL DEPLOYMENT Cash Flow, Cash Position and Capital Allocation Quarter Ending Operating and Free Cash Flow Jun 30, 2017 § Strong cash flow Operating Cash Flow $ 325 ‒ PEMEX receipt of $344M, net of tax ‒ Good cash receipts Capital Expenditures ($3) Free Cash Flow $ 322 § Maximizing Shareho
Slide 8: 2017 Earnings Guidance
2017 2017 Earnings Guidance GUIDANCE Prior FY Updated FY Guidance Guidance Adjusted EPS , excluding legacy legal fees $1.10 - $1.40 $1.25 - $1.45 (above mid-point) • Includes PEMEX settlement recorded in 2Q17 • Includes $22M or $0.15 EPS in amortization • Estimated legacy legal fees is $9M or $0.07
Slide 9: 2nd Half Expectations
2nd Half Expectations MARKET OUTLOOK § Performance Expectations: ‒ Revenue o Growth in Government Services continues as planned o T&C growth expected to continue fueled by ammonia, petro-chem and refining markets o E&C expected to decline, impacted by capex projects worked off partially offset by op
Slide 10: 2Q17 Summary
CONCLUSION 2Q17 Summary § Improved, consistent and more predictable earnings momentum leading to raised guidance § Delivering growth in Government Services, capturing high technical and professional services wins § Strong margins in T&C, growth expected in 2nd half § Solid execution and repositioned
Slide 11: Appendix
APPENDIX
Slide 12: Significantly Lower Risk Profile
2Q17 BACKLOG Significantly Lower Risk Profile Backlog by Contract Type § >80% of earnings for 2017 secured in backlog Fixed Price § Majority of KBR backlog is currently either Cost Contracts (GS, Reimbursable, long-term, reimbursable, PFI or service contracts T&C) – Low PFI & Services Risk with a lo
Slide 13: Consolidated EBITDA Reconciliation
NON-GAAP RECONCILIATION Consolidated EBITDA Reconciliation Quarter Ending ($ in millions) Jun 30, 2017 Jun 30, 2016 Net Income Attributable To KBR $ 77 $ 47 Add Back: Interest Expense (Income) $5 $0 Provision for Income Taxes $ 22 $ 23 Depreciation & Amortization $ 13 $ 10 Consolidated EBITDA $ 117
Slide 14: Adjusted EPS Reconciliation
NON-GAAP RECONCILIATION Adjusted EPS Reconciliation Quarter Ending Jun 30, 2017 Jun 30, 2016 EPS (diluted) $ 0.54 $ 0.32 Add Back: Legacy Legal Fees $ 0.03 $ 0.03 Adjusted EPS $ 0.57 $ 0.35