Slide 1: Q2 2023 Earnings Presentation
July 27, 2023 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 press release 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, our business strategy, interest expens
Slide 3: Stuart Bradie, President and CEO
Stuart Bradie President and Chief Executive Officer 3
Slide 4: Delivering Solutions, Changing the World
RECYCLE/ REUSE HEALTH, SAFETY & SECURITY [oN EFFICIENT aie GOVERNANCE ENERGY SUSTAINABLE . ZERO nawssse TRAVEL ml a u AR M ia DIVERSITY SUPPLY ~. a ¥ COMMUNITY PARTNERS LT ENGAGEMENT - CLIMATE RISK CHANGE MANAGEMENT QUARTERLY LET EARNINGS : Delivering Solutions, Changing the World
Slide 5: Zero Harm, Sustainability and Governance
ZERO HARM COURAGE TO CARE One Team One Vision ZERO HARM DAYS ZERO HARM 91.23% ZERO HARM TOTAL RECORDABLE ACHIEVED IN 2022 INCIDENT RATE (333 DAYS) ACROSS THE GLOBE * * * HSS INCIDENT RATE CARBON NEUTRALITY 0.079 CONSECUTIVE YEARS OF CARBON NEUTRALITY KBR’S REVENUE POINTED AT NET ZERO SUSTAINABILITY
Slide 6: 2Q23 KBR Business Health
2Q23 | KBR BUSINESS HEALTH PEOPLE ZERO HARM • Headcount increased 18% since 2Q22 • Recorded 92% Zero Harm Days & 0.064 TRIR1 • KBR sources future talent through partnerships with over • Commitment to ESG permeates everything we do at 150 universities across the globe KBR - both internally and for ou
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: Mark Sopp, EVP and CFO
Mark Sopp Executive Vice President and Chief Financial Officer 8
Slide 9: 2Q23 Results | KBR Delivers Continued Growth
2Q23 RESULTS | KBR DELIVERS CONTINUED GROWTH REVENUES ADJ. EBITDA +8% Margin % REVENUES $1,616 $1,753 $186 $191 $22 $1,580 $164 +16% ex-OAW1 ADJ. EBITDA 10% 11% ex-Gains1 9% ex-Gains1 9% +16% ADJ. EPS ex-Gains1 ADJ. EPS ADJ. OCF YTD $0.76 $0.74 $214 $288 +35% ADJ. OCF YTD $0.12 $0.64 ex-Gains1 Capex
Slide 10: Segment Results Demonstrate Mission Focus, Resilience and Agility
SEGMENT RESULTS DEMONSTRATE MISSION FOCUS, RESILIENCE AND AGILITY SUSTAINABLE TECHNOLOGY SOLUTIONS GOVERNMENT SOLUTIONS REVENUES ADJ. EBITDA REVENUES ADJ. EBITDA Margin % Margin % $159 $143 $22 $1,276 $137 20% ex-OAW 18% 10% 11% ex-Gains ◦ GS Revenue growth ex-OAW1 of 6% over 2Q22 driven by 45% 6% ◦
Slide 11: Strategic, Accretive and Balanced Capital Deployment
STRATEGIC, ACCRETIVE AND BALANCED CAPITAL DEPLOYMENT CAPITAL DEPLOYMENT PRIORITIES 2Q23 Settle Convertible Notes in 2023; Avoid Dilution $100M Settled in cash Fund Organic Growth without an early termination Maintain Attractive Dividend CONVERTIBLE NOTES premium EARLY SETTLED Maintain Responsible Le
Slide 12: Raising 2023 Adj. EBITDA Guidance
RAISING 2023 ADJ. EBITDA GUIDANCE KBR, Inc. FY 2023 Guidance REVENUE $6.9B - $7.1B 90%+ FY 2023 ADJ. EBITDA $730M - $750M v. $715M - $745M ADJ. EPS $2.76 - $2.96 WORK UNDER CONTRACT EFFECTIVE TAX RATE 24% - 25% ADJ. OPERATING CASH FLOW $425M - $460M The company does not provide reconciliations of Ad
Slide 13: Key Takeaways
KEY TAKEAWAYS ◦ Outstanding 1H23 and raising FY23 Adj. EBITDA guidance - better 2022 business mix and margin performance offset increased interest SUSTAINABILITY REPORT ◦ TTM BTB of 1.1x - reinforces end market buoyancy and KBR’s resiliency - with strong Q3 bookings outlook ◦ 90%+ WUC as of 1H23 - s
Slide 14: Quarterly Earnings
QUARTERLY LEY EARNINGS «
Slide 15: Appendices
Appendices r UY VY ). EARNINGS:
Slide 16: Non-GAAP Reconciliations
NON-GAAP RECONCILIATIONS Adjusted EPS Revenue ex-OAW; Adj. EBITDA & Adj. EPS ex-Gains 2Q22 2Q23 FY2023 Guidance 2Q22 2Q23 Growth Diluted EPS $0.61 $(2.60) $(1.85) $(1.65) Revenue (as reported) 1,616 1,753 Revenue attributable to OAW 36 — Adjustments: Revenue ex-OAW $1,580 $1,753 11% Amortization rel
Slide 17: Non-GAAP Reconciliations: Adjusted Operating and Free Cash Flow
NON-GAAP RECONCILIATIONS Adjusted Operating and Free Cash Flow 2Q22 2Q23 2022 YTD 2023 YTD FY2023 Guidance Cash flows provided by operating activities $125 $253 $214 $288 $293 $328 Adjustments: Add: Legacy legal settlement 132 Adjusted cash flows provided by operating activities $125 $253 $214 $288
Slide 18: Non-GAAP Reconciliations: Adjusted EBITDA
NON-GAAP RECONCILIATIONS Adjusted EBITDA 1Q22 2Q22 3Q22 4Q22 1Q23 2Q23 TTM Net income (loss) attributable to KBR $(71) $94 $74 $93 $86 $(351) $(98) Adjustments: Interest expense 20 21 23 23 26 29 101 Charges associated with Convertible Notes — 0 0 0 — 314 314 Other non-operating (income) expense — (
Slide 19: Non-GAAP Reconciliations: Adjusted EBITDA - Segment
NON-GAAP RECONCILIATIONS Adjusted EBITDA - Segment 1Q22 2Q22 3Q22 4Q22 1Q23 2Q23 TTM Pretax income attributable to GS $114 $124 $96 $106 $101 $(33) $270 Interest expense 1 — 2 1 2 4 9 Other non-operating (income) expense — 8 9 (18) (1) 1 (9) Depreciation and amortization 24 23 23 25 25 23 96 EBITDA
Slide 20: Reconciliation of Operating Income to Adj. EBITDA
NON-GAAP RECONCILIATIONS Reconciliation of Operating Income to Adj. EBITDA Three Months Ended June 30, 2023 GS STS Corporate KBR Operating income $(28) $77 $(39) $10 Noncontrolling interest — (1) — (1) Depreciation and amortization 23 6 5 34 EBITDA $(5) $82 $(34) $43 Adjustment: Acquisition, integra