Slide 1: Delivering Solutions, Changing the World
Stuart Bradie, President and CEO DELIVERING SOLUTIONS, CHANGING THE WORLD. Mark Sopp, Executive VP and CFO Alison Vasquez, VP of Investor Relations
Slide 2: Forward-Looking Statement
FORWARD-LOOKING STATEMENT 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, President and Chief Executive Officer
// Stuart Bradie President and Chief Executive Officer D E L I V E R I N G S OL U T I O N S , C H A N G I N G T H E W O R L D . D E L I V E R I N G S O L U T I O N S , C H A N G I N G T H E WO R LD. 3
Slide 4: Sustainability focus areas
RECYCLE/ HEALTH SAFETY REUSE & SECURITY EFFICIENT GOVERNANCE ENERGY SUSTAINABLE INCLUSION & TRAVEL DIVERSITY SUPPLY COMMUNITY PARTNERS ENGAGEMENT CLIMATE RISK CHANGE MANAGEMENT D E L I V E R I N G S OL U T I O N S , C H A N G I N G T H E W O R L D . 4
Slide 5: Highlights from our 2020 Sustainability Report
Highlights from our 2020 Sustainability Report D E L I V E R I N G S OL U T I O N S , C H A N G I N G T H E W O R L D . 5
Slide 6: 3rd Quarter Highlights | Continued Strong Execution
3 RD QUARTER HIGHLIGHTS | CONTINUED STRONG EXECUTION ▪ Delivering robust revenue growth of 34%; Adj. EBITDA 30%; Adj. EPS 45% ▪ Excellent profitability driven by strong operational performance ▪ Stellar free cash generation; 110% FCF conversion year-to-date (128% in the 3rd quarter) ▪ Attractive boo
Slide 7: Market Outlook: Government Solutions
MARKET OUTLOOK GOVERNMENT SOLUTIONS MARKET DRIVERS AND OUTLOOK RECENT TRENDS AND WINS The U.S. defense budget proposal prioritizes investments ▪ Won a $127 million recompete contract from the U.S. to address near-peer threats, JAD C2 alignment, and Department of Transportation Volpe Center to modern
Slide 8: Market Outlook: Sustainable Technology Solutions
MARKET OUTLOOK SUSTAINABLE TECHNOLOGY SOLUTIONS MARKET DRIVERS AND OUTLOOK RECENT TRENDS AND WINS ▪ Awarded a contract to provide our leading ammonia Accelerating demand for technology and solutions to enable technology for an innovative green ammonia project. KBR energy transition, including levera
Slide 9: Robust Pipeline Underpins Growth Momentum
ROBUST PIPELINE UNDERPINS GROWTH MOMENTUM KBR Pursuit Pipeline $1.6B Q3 2021 AWARDS AND OPTIONS $48B Lead Over 60% BACKLOG, OPTIONS AND RECOMPETES1 TO DELIVER $41B REVENUE THROUGH 2025 Positioning & Pursuit $11B Proposal and Negotiation 150+ PURSUITS > $100 MILLION $100B TOTAL 10+ PURSUITS > $1 BILL
Slide 10: Frazer-Nash | Near- and Long-Term Value Accretive
FRAZER-NASH | NEAR- AND LONG-TERM VALUE ACCRETIVE Accelerates growth Attractive returns High cash in strategic vectors and earnings efficiency ❑ Expands KBR “upmarket” into ❑ Adjusted 2022 EPS accretion ❑ 90% - 110% conversion of adj. new, adjacent vectors with ~$0.10; IRR >15% net income to free ca
Slide 11: Mark Sopp, Executive Vice President & Chief Financial Officer
// Mark Sopp Executive Vice President & Chief Financial Officer D E L I V E R I N G S O L U T I O N S , C H A N G I N G T H E WO R LD. 11
Slide 12: Q3 Financial Snapshot
Q3 21 FINANCIAL SNAPSHOT Revenues Adj. EBITDA1 Adj. EBITDA Margin1 $1,843 34% growth 9% 9% $1,379 $162 30% $125 growth 3Q20 3Q21 3Q20 3Q21 3Q20 3Q21 Adj. EPS1 Adj. Op. Cash Flow1 Backlog $287 $268 Capex $5B options 25% $0.64 110% $3B growth 45% growth Adj. free cash $0.44 $260 $265 Conversion Free c
Slide 13: Q3 2021 Segment Results
Q3 2021 SEGMENT RESULTS In millions GOVERNMENT SOLUTIONS SUSTAINABLE TECHNOLOGY SOLUTIONS CORPORATE Revenue Adj EBITDA1 Revenue Adj EBITDA1 Adj EBITDA1 $1,555 9% 11% 14% $147 $366 9% $41 $1,013 $109 $288 $34 $(26) $(18) 3Q20 3Q21 3Q20 3Q21 3Q20 3Q21 3Q20 3Q21 3Q20 3Q21 ▪ 54% growth in GS revenue to
Slide 14: Capital Deployment & Liquidity
CAPITAL DEPLOYMENT & LIQUIDITY HEALTHY LIQUIDITY PROFILE Highlights in the Quarter CAPITAL NET ▪ Moody's upgraded KBR’s corporate family DEPLOYMENT LEVERAGE rating to Ba2 from Ba3 ▪ Completed $25 million of share buybacks PRIORITIES 1.9x AS OF SEPTEMBER 30, 2021 Near-Term Deployable Capital ` ▪ Heal
Slide 15: Raising FY 2021 Guidance
RAISING FY 2021 GUIDANCE FY 2021 Guidance ▪ Raising guidance for the following: $7.2B to $7.5B Consolidated revenue From $5.8B to $6.2B ▪ Humanitarian work supporting Operation Allies Welcome (OAW), adding ~$1.4 billion of revenue ~8% at low-single digit adj. EBITDA margins; and Adjusted EBITDA1 mar
Slide 16: In Summary: Doing What We Said We Would Do
IN SUMMARY D O I N G W H AT W E S A I D W E WO U L D D O ▪ Executing on long-range growth strategy aligned with accelerating market dynamics ▪ Winning attractive new work to deliver the future ▪ Delivering strong growth, profit and financial results ▪ Balanced capital deployment ▪ De-risking the out
Slide 17: Q&A
Q&A D E L I V E R I N G S OL U T I O N S , C H A N G I N G T H E W O R L D . Assumes 3x net leverage
Slide 18: Appendices
APPENDICES D E L I V E R I N G S O L U T I O N S , C H A N G I N G T H E WO R LD.
Slide 19: Non-GAAP Reconciliations: Adj EPS and Adj OCF
Non-GAAP Reconciliations: Adj EPS and Adj OCF Adjusted EPS 3Q20 3Q21 2020 YTD 2021 YTD 2021 Guidance Actual Actual Actual Actual EPS (Diluted) $0.36 $0.38 $(0.64) $(0.36) $0.05 $0.15 Add Back: Amortization related to acquisitions 0.02 0.07 0.05 0.22 0.26 Ichthys interest and commercial dispute cost
Slide 20: Non-GAAP Reconciliation: Adj EBITDA
Non – GAAP Reconciliation: Adj EBITDA Adjusted EBITDA 1Q20 2Q20 3Q20 4Q20 1Q21 2Q21 3Q21 TTM Net income (loss) attributable to KBR ($104) ($39) $52 $19 $47 ($152) $55 ($31) Add Back: Interest Expense 23 19 18 23 22 23 23 91 Provision (benefit) for income taxes (1) 6 19 2 16 40 19 77 Other non-operat
Slide 21: Non-GAAP Reconciliations: Segment Adj EBITDA
Non – GAAP Reconciliations: Segment Adj EBITDA Government Solutions Adjusted EBITDA 1Q20 2Q20 3Q20 4Q20 1Q21 2Q21 3Q21 Net income (loss) attributable to GS $90 $93 $97 $71 $74 $90 $112 Add Back: Interest Expense 0 0 0 1 1 1 1 Other non-operating (income) expense 0 1 0 1 0 (1) 1 Depreciation & amorti
Slide 22: Non-GAAP Reconciliations: Segment Adj EBITDA
Non – GAAP Reconciliations: Segment Adj EBITDA Reconciliation of Operating Income to Adj. EBITDA Nine months ended September 30, 2021 Sustainable Government Technology Corporate Total KBR Solutions Solutions Operating Income $277 ($70) ($105) $102 Noncontrolling interest 1 (8) 0 (7) Depreciation & a
Slide 23: Selected Recast 2020 Income Statement Information
Selected Recast 2020 Income Statement Information Unaudited 1Q20 2Q20 3Q20 4Q20 FY20 Revenues: The following 2020 quarterly and Government Solutions $ 982 $ 953 $ 1,013 $ 1,107 $ 4,055 annual unaudited, condensed Sustainable Technology Solutions 555 432 366 359 1,712 income statement information Tot