Slide 1: Q3 Financial Results
WE DELIVER Q3 Financial Results November 4, 2014 Stuart Bradie – President and Chief Executive Officer Brian Ferraioli – EVP and Chief Financial Officer Zachary Nagle – VP, Investor Relations
Slide 2: Forward-Looking Statements
Forward-Looking Statements This presentation contains “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. These forward-looking statements include statements regarding our plans, objectives, goals, strat
Slide 3: KBR Safety: Creating a Zero Harm Culture at KBR
KBR Safety: Creating a Zero Harm Culture at KBR 2014 – KBR TRIR* Driving to Zero Harm 0.45 Clear and consistent Health, Safety, 0.40 0.39 Security and Environment (HSSE) 0.36 messaging from Senior Management in 0.35 town halls and videos 0.34 0.32 0.30 Structured HSSE Campaign Strategy 0.25 deve
Slide 4: Q3 2014 Overview
Q3 2014 Overview Sequentially improved Fully Diluted EPS of $0.21 Operational performance of Gas Monetization remains strong; Hydrocarbons bookings and other execution strong, but had a welding issue on one contract (now resolved); Services performance stabilized and net position on Canadian pip
Slide 5: Consolidated Results – Q3 2014 vs Q3 2013
Consolidated Results – Q3 2014 vs Q3 2013 Commentary Quarter Ending Hydrocarbons bookings at ~$1B; ~$900M ($ in millions, except EPS) Sep 30, 2014 Sep 30, 2013 on reimbursable contracts Gas Monetization continues to perform well Bookings $ 1,348 $ 2,175 on two mega LNG projects Hydrocarbons pe
Slide 6: Segment Reporting – Q3 2014 vs Q3 2013
Segment Reporting – Q3 2014 vs Q3 2013 Revenue Quarter Ending Consolidated reflects Gas Mon projects largely completed in ($ in millions) Sep 30, 2014 Sep 30, 2013 2013 and lower volume on an LNG project that reached peak man-hours in 2013 Revenue Gas Monetization 343 537 Hydrocarbons reflects h
Slide 7: Segment Reporting – Q3 2014 vs Q2 2014
Segment Reporting – Q3 2014 vs Q2 2014 Quarter Ending Revenue ($ in millions) Sep 30, 2014 Jun 30, 2014 Consolidated revenue reflects higher Oil & Gas and Revenue Downstream services projects’ volume and LogCAP III Gas Monetization 343 362 settlements, offset by lower aggregate volume in other Hyd
Slide 8: Cash / Capital Allocation
Cash / Capital Allocation KBR Cash Balance Return of Cash to Shareholders YTD Since Q3 '14 Q3 '13 Q3 '14 $ in millions $ in millions Sep-14 Jan-07 Domestic $258 $221 Share Repurchases $6 $102 $727 International $710 $636 Dividends $11 $35 $227 JV $80 $102 Total $1,048 $959 Total Returned to SHs $17
Slide 9: Market Outlook: Gas Monetization
Market Outlook: Gas Monetization Work continues on two mega LNG projects – Gorgon and Ichthys Continue to work on Shell Global LNG Agreement Strong pipeline of pre-front end engineering design (pre-FEED), FEED, and EPC opportunities Major FEEDs in process or completed FEED completed and EP
Slide 10: Market Outlook: Hydrocarbons
Market Outlook: Hydrocarbons Strong Q3 bookings of ~$1 billion led by ~$900M in reimbursable projects in Downstream and Oil & Gas Koch Nitrogen EPC award for new grassroots urea plant INEOS and Sasol HDPE EPC award ENI Mozambique FLNG award; EPCIC submission expected summer 2015 Continued
Slide 11: Market Outlook: IGP
Market Outlook: IGP Strong operational performance continues for U.K. MoD Work - long term facilities maintenance. Confirmed preferred bidder for U.K. MoD Fixed Wing Training contract Multiple International Government service opportunities: U.K. Army return from Europe; expeditionary support ser
Slide 12: Market Outlook: Services
Market Outlook: Services Continued opportunities in North American Industrial Services and U.S. Construction, with the latter particularly as a differentiator in our EPC offerings Mexican offshore Industrial Services business – longer term contracts (i.e., 3 years) in place Well positioned for
Slide 13: Strategic Review - Update
Strategic Review - Update Process continues and on track with completion targeted as promised in Q4 Will discuss results at an analyst day at the NYSE on December 11th. Meeting will also be webcast Decisions taken could impact annual Goodwill and other intangible impairment analyses and may re
Slide 14: Summary
Summary 2014 is a transition year; the strategic review will be completed in Q4 Gas Monetization and Hydrocarbons continued their strong operational performance, Services stabilized, and IGP impacted by charges on a Power project Strong Hydrocarbons bookings on reimbursable Downstream and Oil
Slide 15: Appendix
WE DELIVER Appendix 15 WE DELIVER
Slide 16: Consolidated EBITDA Reconciliation Q3 2014
Consolidated EBITDA Reconciliation Q3 2014 Quarter Ending ($ in millions) Sep 30, 2014 Sep 30, 2013 Net Income Attributable to KBR $ 30 ($47) Add Back: Interest Income (Expense) $3 ($1) Provision for Tax $1 ($60) Depreciation & Amortization ($19) ($18) Consolidated EBITDA $ 45 $ 32 Note: EBITDA is d
Slide 17: IGP Results excluding LOGCAP III, IV and RIO contracts
IGP Results excluding: LOGCAP III, IV and RIO contracts Quarter Ending ($ in millions) Sep 30, 2014 Sep 30, 2013 LOGCAP III Revenue $ 38 $ 16 LOGCAP IV Revenue $5 $ 71 RIO Revenue $0 $1 Other Revenue $ 300 $ 286 IGP Revenue $ 342 $ 373 LOGCAP III Gross Profit and Equity in Earnings $ 26 $5 LOGCAP IV
Slide 18: KBR’s Four Business Groups
KBR’s Four Business Groups Gas Monetization Services • Liquefied Natural Gas • Module Construction and Fabrication • Turn-Around Services • Pipe Fabrication • Startup Services • Gas-to-Liquids • Construction • Industrial Services Hydrocarbons Infrastructure, Government & Power • Upstream • Proprieta