Slide 1: Q2 Financial Results
WE DELIVER Q2 Financial Results July 31, 2014 Stuart Bradie – President and Chief Executive Officer Brian Ferraioli – EVP and Chief Financial Officer Zachary Nagle – VP, Investor Relations
Slide 2: Forward-Looking Statements
Forward-Looking Statements This presentation contains “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. These forward-looking statements include statements regarding our plans, objectives, goals, strat
Slide 3: Q2 2014 Overview
Q2 2014 Overview EPS loss of $0.06 improved sequentially, but clearly remains below expectations Operational performance of Gas Monetization and Hydrocarbons remains strong; IGP continues to lag, albeit backlog increase is encouraging. Services negatively impacted by losses in our Canadian pipe
Slide 4: Canadian Pipe Fabrication and Module Assembly
Canadian Pipe Fabrication and Module Assembly Seven pipe fabrication/module assembly contracts, unique to our Canada business, that were signed in 2012 – 2013. Four projects largely completed Represented significant sales growth but modules were larger and more complex than historic projects. Co
Slide 5: Consolidated Results – Q2 2014 vs Q2 2013
Consolidated Results – Q2 2014 vs Q2 2013 Commentary Quarter Ending Solid bookings in Hydrocarbons and IGP. ($ in millions, except EPS) Jun 30, 2014 Jun 30, 2013 Additional North American Hydrocarbons bookings expected later this year Bookings $ 1,186 $ 1,586 Gas Monetization continues to perfor
Slide 6: Segment Reporting – Q2 2014 vs Q2 2013
Segment Reporting – Q2 2014 vs Q2 2013 Revenue Quarter Ending Consolidated decrease primarily due to reduced revenues ($ in millions) Jun 30, 2014 Jun 30, 2013 on Gas-to-Liquids and LNG projects largely completed in Revenue 2013 Gas Monetization 362 593 Hydrocarbons reflects ramp in EPC ammonia,
Slide 7: Segment Reporting – Q2 2014 vs Q1 2014
Segment Reporting – Q2 2014 vs Q1 2014 Revenue Quarter Ending Consolidated increase primarily due to continued ($ in millions) Jun 30, 2014 Mar 31, 2014 ramp up of Hydrocarbons EPC ammonia, urea and Revenue ethylene projects in the U.S. Gas Monetization 362 400 Hydrocarbons 533 452 IGP 315 337 Ser
Slide 8: Cash / Capital Allocation
Cash / Capital Allocation KBR Cash Balance Return of Cash to Shareholders YTD Since Q2 '14 Q2 '13 Q2 '14 $ in millions $ in millions Jun-14 Jan-07 Domestic $272 $201 Share Repurchases $40 $96 $721 International $622 $458 Dividends $12 $24 $216 JV $75 $141 Total $969 $800 Total Returned to SHs $52 $1
Slide 9: Market Outlook: Gas Monetization
Market Outlook: Gas Monetization Work continues on two mega LNG projects Initial work commenced on Shell Global LNG Agreement Continued strong pipeline of pre-front end engineering design, FEED, and EPC opportunities Recently awarded & working on Gulf LNG FERC FEED in U.S. Recently awarded
Slide 10: Market Outlook: Hydrocarbons
Market Outlook: Hydrocarbons Solid Q2 bookings led by: Maersk Culzean Offshore FEED Additional scope of services on existing downstream projects in Saudi Arabia Good start for Q3 bookings with recent award for Al-Nasr Executing three EPC ammonia / urea EPC projects in N. America with KBR T
Slide 11: Market Outlook: IGP
Market Outlook: IGP Strong operational performance continues for U.K. MoD Work - construction and long-term facilities maintenance; recently awarded Australian Defence Force Landing Helicopter Dock ships contract Continue to work on three EPC Power projects in N. America – a waste-to-energy proj
Slide 12: Market Outlook: Services
Market Outlook: Services Continued opportunities in North American Industrial Services and U.S. Construction as economy improves Mexican offshore Industrial Services business – longer term contracts (i.e., 3 years) in place Well positioned for Industrial Services market in Saudi Arabia Canad
Slide 13: Summary
Summary 2014 remains a transition year and we have kicked off the Strategic Review Gas Monetization and Hydrocarbons continued strong performance, IGP improving and Services impacted by Canada Pursuing a number of large opportunities through pre-FEEDs, FEEDs and EPC bids. Strong ongoing projec
Slide 14: Appendix
WE DELIVER Appendix 14 WE DELIVER
Slide 15: Consolidated EBITDA Reconciliation Q2 2014
Consolidated EBITDA Reconciliation Q2 2014 Quarter Ending ($ in millions) Jun 30, 2014 Jun 30, 2013 Net Income (Loss) Attributable to KBR ($8) $ 90 Add Back: Interest Income (Expense) ($2) ($1) Provision for Tax ($10) ($15) Depreciation & Amortization ($18) ($16) Consolidated EBITDA $ 22 $ 122 Note:
Slide 16: IGP Results excluding LOGCAP III and RIO completed contracts
IGP Results excluding: LOGCAP III and RIO completed contracts Quarter Ending ($ in millions) Jun 30, 2014 Jun 30, 2013 LOGCAP III / RIO Contracts Revenue $0 $ 21 Other Revenue $ 315 $ 354 IGP Revenue $ 315 $ 375 LOGCAP III / RIO Gross Profit and Equity in Earnings ($6) ($0) Other IGP Gross Profit an
Slide 17: KBR’s Four Business Groups
KBR’s Four Business Groups Gas Monetization Services • Liquefied Natural Gas • Module Construction and Fabrication • Turn-Around Services • Pipe Fabrication • Startup Services • Gas-to-Liquids • Construction • Industrial Services Hydrocarbons Infrastructure, Government & Power • Upstream • Proprieta