Slide 1: 4th Quarter & FY 2019 Financial Results and 2020 Guidance
4th Quarter & FY 2019 Financial Results and 2020 Guidance February 20, 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 ©2019 KBR Inc. Al
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
Stuart Bradie President & Chief Executive Officer Proud history, bright future. ©2019 KBR Inc. All Rights Reserved.
Slide 4: Doing the right thing for the planet, our people and our communities
D O I N G T H E R I G H T T H I N G F O R T H E P L A N E T, OUR PEOPLE AND OUR COMMUNITIES WHILE PURSUING BUSINESS GROWTH Proud history, bright future. ©2019 KBR Inc. All Rights Reserved.
Slide 5: KBR Sustainability Platform
KBR Sustainability Platform 5 Proud history, bright future. ©2019 KBR Inc. All Rights Reserved.
Slide 6: 2019 Scorecard
2019 Scorecard Meeting or exceeding 2019 targets Strong FY 2019 financial results Finish Ichthys De-lever Grow backlog Win LOGCAP V Win LNG – EPC Award; Pending FID Internal efficiency Costpoint ERP Workday HRIS Transformational agenda New brand New website GICS code chan
Slide 7: Highlights | FY 2019
Highlights | FY 2019 $ in millions, except EPS Revenues Adjusted EBITDA1 Adj. EBITDA Margin $5,639 $471 $4,913 15% 14% 8.4% 8.4% Aligned Growth $412 Growth with LT targets All segments contributing double digit growth 2018 2019 2018 2019 2018 2019 Adjusted EPS1 Operating Cash Flow Backlog $1.69 $256
Slide 8: Highlights | 4th Quarter 2019
Highlights | 4th Quarter 2019 $ in millions, except EPS Revenues Adjusted EBITDA1 Adj. EBITDA Margin $117 $1,452 $109 8.2% 8.1% $1,330 4Q18 4Q19 4Q18 4Q19 4Q18 4Q19 Adjusted EPS1 Operating Cash Flow Backlog Year-ended 2018 and 2019 $2,755 Options $256 $3,683 $0.46 $0.41 $165 $14,636 Reported Backlog
Slide 9: Government Market
Market Outlook Outlook KBR's Competitive Advantage FY 2020 defense budget prioritizes restoration of military Domain expertise across a diverse set of readiness & modernization, near peer threats, creation of mission-critical, long duration programs Government Market U.S. Space Force and innovatio
Slide 10: KBR Growth Outlook
KBR Growth Outlook $164 billion 10-14% KBR Pursuit Pipeline Revenue CAGR thru 2022 Government Energy New business: ~33% Our robust pursuit pipeline affords significant growth opportunities; LNG ~8% $57B $107B $24 $26 $24 $45 Today’s book of business: ~67% Our recurring, long-term contracts provide s
Slide 11: Bookings Momentum and Backlog Growth
Bookings Momentum and Backlog Growth Government 1.1x Solutions Technology Solutions 1.0x Energy 1.9x Solutions FY 2019 segment book-to-bill Backlog, by quarter $14.6 $14.6 $13.1 $13.4 $13.4 $13.5 $13.6 $13.8 1.6 2.1 1.9 1.9 2.3 2.6 3.4 3.1 ES $2.8 billion unexercised options not in backlog as 0.4
Slide 12: Mark Sopp
Mark Sopp EVP & Chief Financial Officer Proud history, bright future. ©2019 KBR Inc. All Rights Reserved.
Slide 13: FY 2019 Consolidated Results
FY 2019 Consolidated Results YTD ($ in millions, except EPS) FY 2018 FY 2019 Revenues $ 4,913 $ 5,639 15% revenue growth, 12% organic Gross Profit 584 653 14% Adjusted EBITDA growth Equity in Earnings 79 35 Selling, General & Administrative Expenses (294) (341) 10% Adjusted EPS growth impacted
Slide 14: Segment Performance: Government Solutions
Segment Performance: Government Solutions ($ in millions) FY 2018 FY 2019 Revenue $ 3,457 $ 3,925 14% revenue growth in 2019, 9% organic, led by new programs, on Gross Profit 350 430 contract growth, and completion of work at Tyndall AFB1 Equity Earnings 32 29 SG&A (109) (134) Acquisition & Integr
Slide 15: Segment Performance: Technology Solutions
Segment Performance: Technology Solutions ($ in millions) FY 2018 FY 2019 26% revenue growth driven primarily by increased proprietary Revenue $ 297 $ 374 equipment and catalyst deliveries Gross Profit 106 118 SG&A (24) (28) 26% Adjusted EBITDA margins in line with plan Operating Income $ 82 $ 9
Slide 16: Segment Performance: Energy Solutions
Segment Performance: Energy Solutions ($ in millions) FY 2018 FY 2019 Revenue $ 1,157 $ 1,339 16% revenue growth; double digit growth for 3 sequential Gross Profit 134 100 quarters Equity Earnings 50 19 SG&A (64) (63) Loss on Dispositions (2) - 2018 equity earnings favorably impacted by strong e
Slide 17: Capital Structure and Deployment
Capital Structure and Deployment FY 2019 Gross and Net Leverage of 2.7x and 1.2x, respectively Completed amendment of our credit agreement in February 2020 Capital Deployment Reflects growth and improved credit rating / profile Priorities Enables greater capital deployment flexibility 100
Slide 18: 2020 Full-Year Guidance
2020 Full-Year Guidance 2020 Guidance Diluted GAAP Earnings Per Share $1.46 - $1.58 Adjustments: Legacy Legal Fees 0.05 Non-Cash Interest and Conversion Hedge1 on Convertible bonds 0.06 Amortization related to Aspire Consolidation 0.07 Ichthys Interest and Commercial Dispute Costs 0.16 Adjus
Slide 19: KBR… Growth and Value
KBR… Growth and Value Differentiated Strategic Market Position… diversity of clients and longevity of Safety and contracts provides long-term resilience, stability and growth Sustainability Balanced Portfolio Contributions… all segments contributing growth, cash and bookings in 2019; favorable 2
Slide 20: Appendices
APPENDICES Proud history, bright future. ©2019 KBR Inc. All Rights Reserved.
Slide 21: Non-GAAP Reconciliations: Adjusted EPS & Adjusted Cash Flow Guidance
Non-GAAP Reconciliations: Adjusted EPS & Adjusted Cash Flow Guidance Adjusted EPS Reconciliation Quarter Ending Year Ending 4Q18 4Q19 2018 2019 EPS (Diluted) $0.33 $0.40 $1.99 $1.41 Add Back: Legacy Legal Fees 0.01 0.01 0.06 0.05 Non-cash imputed interest on conversion option 0.01 0.02 0.01 0.06 Acq
Slide 22: 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 Year Ending Quarter Ending Year End
Slide 23: 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 Mar-18 Jun-18 Sep-18 Dec-18 Mar-19 Jun-19 Sep-19 Dec-1