Slide 1: 3rd Quarter 2019 Financial Results
3rd Quarter 2019 Financial Results October 30, 2019 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. 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, Chief Executive Officer
Stuart Bradie Chief Executive Officer Proud history, bright future. ©2019 KBR Inc. All Rights Reserved.
Slide 4: Leading Health, Safety, Security & Environmental Excellence
Leading Health, Safety, Security & Environmental Excellence Total Recordable Incident Rate (TRIR) Performance: 100% 2014 – 3Q 191 0.50 0.42 80% 87% 3 0.40 79% 60% 70% 72% Incident-free 62% 0.28 months 0.30 0.24 40% 52% 0.22 Zero recordable injuries, 0.19 0.20 illnesses or environmental 0.13 incident
Slide 5: Highlights | 3rd Quarter 2019
Highlights | 3rd Quarter 2019 $ in millions, except EPS Revenues Adjusted EBITDA1 Adjusted EBITDA Growth fueled by contributions from all Margin segments $131 ‐ 12% top line revenue growth, all $1,425 $120 organic $1,278 9.4% 9.2% • 5% growth in GS • 19% growth in TS • 31% growth in ES ‐ Adjusted
Slide 6: Consistent Backlog Growth
Consistent Backlog Growth Trailing 12 months book-to-bill1 Four consecutive quarters of increasing TTM 1.5x book-to-bill 1.2x 1.2x 1.3x 1.1x 1.1x 0.9x 1.4x 1.0x 1.6x 0.9x 1.5x 2.1x 2.1x KBR book-to-bill1 during the quarter 0.8x Quarterly Book-to-Bill TTM Book-to-Bill ‐ Government Solutions 1.5x
Slide 7: Growth Outlook
Growth Outlook Our Pursuit Pipeline 2019 – 2022 Revenue Growth Profile LNG: ~10% $61B $113B New business: ~25% Our robust pursuit pipeline affords significant growth opportunities. $24 $30 $32 $43 Today’s book of business: ~65% Our recurring, long-term contracts provide stability and predictability
Slide 8: Mark Sopp, Chief Financial Officer
Mark Sopp Chief Financial Officer Proud history, bright future. ©2019 KBR Inc. All Rights Reserved.
Slide 9: Consolidated Results
Consolidated Results Quarter Ending September 30, 12% growth in revenues ($ in millions, except EPS) 2018 2019 − Ramp up of new projects, including refinery expansion, Revenues $ 1,278 $ 1,425 Permian midstream project, POTFF and UK networking Gross Profit $ 149 $ 169 contract Equity in Earnings $
Slide 10: KBR Segment Revenue and EBITDA
KBR Segment Revenue and EBITDA Revenues of $978 million, up $50 million or 5% from Q3 2018 Adjusted EBITDA1 of $106 million, up $16 million or 17% from Q3 2018 GS Seven straight quarters of strong organic revenue growth and execution 4Q17 1Q18 2Q18 3Q18 4Q18 1Q19 2Q19 3Q19 Excellent cash con
Slide 11: Capital Structure and Liquidity
Capital Structure and Liquidity Gross Leverage 3.3x 3.3x 3.1x 2.9x 2.8x Targeted Leverage: 2.75x Net Leverage 1.7x 1.5x 1.4x 1.5x 1.3x 3Q 2018 4Q 2018 1Q 2019 2Q 2019 3Q 2019 Cash $ 581 $ 739 $ 708 $ 611 $ 681 Gross debt 1,169 1,336 1,334 1,295 1,289 Net debt $588 $597 $626 $684 $608 TTM adjusted EB
Slide 12: Raising 2019 Full-Year Guidance
Raising 2019 Full-Year Guidance FY 2019 Guidance Previous Raised Guidance Guidance GAAP EPS $1.29 - $1.44 $1.36 - $1.46 Adjusted EPS1 $1.58 - $1.73 $1.64 - $1.74 Operating Cash Flow $175M - $205M $200M - $225M Raised EPS and Adjusted EPS guidance reflects favorable close-out activity on completed
Slide 13: KBR… Growth and Value
KBR… Growth and Value Strong Growth…revenue growth underpinned by growth across all segments Consistent Performance…11 consecutive quarters of meeting or exceeding expectations Risk Reduction… completed Ichthys LNG project within guided cash requirements Cash Focus…strong 2019 net income to
Slide 14: Appendices
APPENDICES Proud history, bright future. ©2019 KBR Inc. All Rights Reserved.
Slide 15: Non-GAAP Reconciliations: Adjusted EPS
Non-GAAP Reconciliations: Adjusted EPS Adjusted EPS Reconciliation Adjusted EPS Guidance Quarter Ending 3Q18 3Q19 2019 Guidance EPS (Diluted) $0.38 $0.39 EPS (Diluted) $1.36 $1.46 Add Back: Add Back: Legacy Legal Fees 0.01 0.01 Legacy Legal Fees 0.06 Non-cash imputed interest on conversion option 0.
Slide 16: Non-GAAP Reconciliation: Consolidated, Adjusted and TTM Adjusted EBITDA
Non-GAAP Reconciliation: Consolidated, Adjusted and TTM 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 Sep 30, 2017 Dec 31
Slide 17: 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 Sep-17 Dec-17 Mar-18 Jun-18 Sep-18 Dec-18 Mar-19 Jun-1