Slide 1: 1st Quarter 2020 Financial Results
1st Quarter 2020 Financial Results April 29, 2020 The future, designed and delivered. Stuart Bradie – President and Chief Executive Officer Mark Sopp – Executive Vice President and Chief Financial Officer Alison Vasquez – Vice President, Investor Relations ©2020 KBR Inc. All Rights Reserved.
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: Stuart Bradie, President & Chief Executive Officer
Stuart Bradie President & Chief Executive Officer
Slide 4: KBR Sustainability Platform
KBR Sustainability Platform Proud history, bright future. 4 ©2020 KBR Inc. All Rights Reserved.
Slide 5: Reimagining How We Deliver
Reimagining How We Deliver Reimagining our culture Reimagining our work practices Reimagining our workplaces
Slide 6: The Benefits of Reimagining How We Deliver
The Benefits of Reimagining How We Deliver
Slide 7: Key Takeaways Up Front
Key Takeaways Up Front • Transitioned under COVID-19 safely & delivering • Resilient business model • Strong balance sheet, liquidity and cash generation • New KBR's exposure to energy at its lowest level • Forward leaning, conservative approach to energy disruption; reset Energy Solutions • Confide
Slide 8: Laser-focused on operations
Laser-focused on operations Our People remain laser focused on safely delivering business as usual in unusual times Consistently delivering for customers; cash flow results strong >90% OFFICE 1.3X GOVERNMENT Government Contractors deemed ‘essential’; PERSONNEL SOLUTIONS TELE- BTB maximum telewor
Slide 9: Mark Sopp, EVP & Chief Financial Officer
Mark Sopp EVP & Chief Financial Officer
Slide 10: Highlights | 1Q 2020
Highlights | 1Q 2020 REVENUE ADJUSTED EBITDA1 ADJUSTED EBITDA MARGIN $112 15% ALIGNED $106 $1,340 $1,537 GROWTH 6% 7.9% 7.3% WITH LONG-TERM GROWTH TARGETS 1Q19 1Q20 1Q19 1Q20 1Q19 1Q20 ADJUSTED EPS1 ADJ. OPERATING CASH FLOW1 BACKLOG $65 $3.3B $2.7B OPTIONS $0.39 $0.36 8% $48 35% $13.3B $13.9B BACKLO
Slide 11: Consolidated Results
FY 2019 Consolidated Results ($ in millions, except EPS) 1Q19 1Q20 Revenues $ 1,340 $ 1,537 Core operational results in line with expectations; Gross Profit $ 153 $ 186 Equity in Earnings - 1 consolidated margins on track SG&A (78) (97) Acquisition & Integration (1) - Simplifying and restructuri
Slide 12: KBR Segment Revenue and Adjusted EBITDA
KBR Segment Revenue and Adjusted EBITDA Revenues of $955 million, down $20 million or 2% from Q1 2019; excluding Tyndall completed in 2019, revenue is up 5% Adjusted EBITDA1 of $106 million, up $17 million or 19% from Q1 2019 GS Strong execution on Aspire capital program; favorable project clo
Slide 13: Capital Structure and Deployment
Capital Structure and Deployment HEALTHY LIQUIDITY PROFILE CAPITAL DEPLOYMENT Amended Credit Agreement PRIORITIES 2.4x Enables greater capital deployment GROSS flexibility 100 bps reduction in borrowing cost LEVERAGE Extends maturities Fund Organic Growth Reduced borrowings by $137 million M
Slide 14: Market Outlook
Market Outlook GOVERNMENT OUTLOOK TECHNOLOGY OUTLOOK ENERGY OUTLOOK U.S., U.K. and AUS governments highly Ammonia / fertilizer outlook stabilizing Significant global energy disruption supportive amidst COVID-19 pandemic Petrochem markets continued softness Sharp decline in capex; project
Slide 15: Positioning for the Future: Resetting the ES Platform
Resetting the ES Platform Positioning for the Future Streamlined and reset for the future – quick to act Cost reduction actions taken; predominantly non-cash / non- recurring charge Cost base set and ability to flex up or down with the market While expected to be profitable in 2020, updated
Slide 16: FY 2020 Revised Guidance
FY 2020 Revised Guidance FY 2020 Guidance (updated) GAAP EPS $0.12 - $0.42 Adjustments to GAAP EPS Restructuring and impairment charges (new) $1.08 Ichthys interest and commercial dispute costs 0.15 Amortization related to Aspire amortization 0.08 Non-cash interest and conversion hedge on convertibl
Slide 17: Resilience
Resilience STABILITY • Strong business continuity • Operational focus • Performance culture – OneKBR HEALTHY LIQUIDITY PROFILE • Attractive, flexible financial platform • Excellent free cash flow • Maintaining increased dividend POSITIVE OUTLOOK • Resilient business model underpins confidence in gui
Slide 18: Government Solutions in Focus: Save the Date
Save the Date Government Solutions in Focus A KBR Investor Event Tuesday, June 16, 2020 A VIRTUAL EVENT More details to come. Proud history, bright future. ©2019 KBR Inc. All Rights Reserved.
Slide 19: Appendices
Appendices Appendices DOING THE RIGHT THING FOR THE PLANET, OUR PEOPLE AND OUR COMMUNITIES WHILE PURSUING BUSINESS GROWTH
Slide 20: Non-GAAP Reconciliations: Adjusted EPS & Adjusted Cash Flow
Non-GAAP Reconciliations: Adjusted EPS & Adjusted Cash Flow Adjusted EPS Reconciliation Adjusted EPS Guidance Quarter Ending 1Q19 1Q20 2020 Guidance EPS (Diluted) $0.28 $(0.73) EPS (Diluted) $0.12 $0.42 Add Back: Add Back: Restructuring and impairment charges 0.00 1.08 Restructuring and impairment c
Slide 21: Non-GAAP Reconciliation: Consolidated & Adjusted EBITDA
Non-GAAP Reconciliation: Consolidated & Adjusted EBITDA EBITDA is defined as earnings before interest income / expense, income taxes, other non-operating income / expense (including FX) and depreciation & amortization. Adjusted EBITDA Reconciliation Quarter Ending Jun 30, 2018 Sep 30, 2018 Dec 31, 2
Slide 22: Non-GAAP Reconciliation: Segment EBITDA and Segment Adjusted EBITDA
Non-GAAP Reconciliation: Segment EBITDA and Segment Adjusted EBITDA EBITDA is defined as earnings before interest income / expense, income taxes, other non-operating income / expense (including FX) and depreciation & amortization. Quarter Ending Jun-18 Sep-18 Dec-18 Mar-19 Jun-19 Sep-19 Dec-19 Mar-2