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: ESG priorities
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: Zero Harm is Achievable – Health, Safety & Security
ZERO HARM IS ACHIEVABLE – HEALTH, SAFETY & SECURITY 100% 0.118 80% TRIR rate Last 12 months 89% 87% 86% ✓ KBR's commitment to Health, 60% 79% 74% 75% Safety & Security has resulted in unprecedented safety 62% performance around the world. 40% 52% ✓ KBR’s journey to Zero Harm is driven by our employe
Slide 6: 2nd Quarter Highlights | Continued Strong Execution
2 ND QUARTER HIGHLIGHTS | CONTINUED STRONG EXECUTION ▪ Delivering robust revenue growth of 11% and Adj. EBITDA growth of 47% ▪ Excellent profitability driven by strong operational performance and favorable project resolution ▪ Stellar free cash generation; ~120% net income conversion (~100% YTD 2021
Slide 7: Market Outlook Government Solutions
MARKET OUTLOOK GOVERNMENT SOLUTIONS MARKET DRIVERS AND OUTLOOK RECENT TRENDS AND WINS The U.S. fiscal 2022 defense budget proposal prioritizes near- ▪ Won a new $51 million contract from the National Oceanic peer threats and investment in advanced, next-gen and and Atmospheric Administration to deve
Slide 8: Market Outlook Sustainable Technology Solutions
MARKET OUTLOOK SUSTAINABLE TECHNOLOGY SOLUTIONS MARKET DRIVERS AND OUTLOOK RECENT TRENDS AND WINS The growing number of countries and companies targeting a ▪ Won a contract to provide industry-leading, disruptive meaningful reduction in their carbon footprint is driving Hydro-PRT℠ plastics recycling
Slide 9: Robust Pipeline Underpins Growth Momentum
ROBUST PIPELINE UNDERPINS GROWTH MOMENTUM KBR Pursuit Pipeline $1.9B Q2 2021 AWARDS AND OPTIONS $50B Lead 95%+ GS RECOMPETE WIN RATE $42B Positioning & Pursuit $13B 150+ Proposal and Negotiation PURSUITS > $100 MILLION $105B 10+ TOTAL PURSUITS > $1 BILLION D E L I V E R I N G S OL U T I O N S , C H
Slide 10: 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. 10
Slide 11: Q2 Financial Snapshot
Q2 21 FINANCIAL SNAPSHOT Revenues Adj. EBITDA1 Adj. EBITDA Margin1 $1,536 11% 10% 25% $1,385 growth $156 47% growth growth 8% $106 2Q20 2Q21 2Q20 2Q21 2Q20 2Q21 Adj. EPS1 Adj. Op. Cash Flow1 Backlog (YTD) $0.58 49% $178 $165 $5B growth options Capex 25% 100% $3B growth $0.39 $149 Adj. free cash $174
Slide 12: Q2 2021 Segment Results
Q2 2021 SEGMENT RESULTS In millions GOVERNMENT SOLUTIONS SUSTAINABLE TECHNOLOGY SOLUTIONS CORPORATE Revenue Adj EBITDA1 Revenue Adj EBITDA1 Adj EBITDA1 10% 11% $432 20% $1,231 $126 $61 $953 $108 $305 $(31) $(20) 4% $18 2Q20 2Q21 2Q20 2Q21 2Q20 2Q21 2Q20 2Q21 2Q20 2Q21 ▪ 29% growth in GS revenue to $
Slide 13: Progress Toward Settlement with the Ichthys LNG Client
PROGRESS TOWARD SETTLEMENT WITH THE ICHTHYS LNG CLIENT PROVIDES INCREASED CERTAINTY AND FUTURE DEPLOYMENT FLEXIBILITY ▪ Based on meaningful progress during the quarter by our JKC joint venture toward ultimate settlement with the client on the legacy Ichthys LNG project, KBR recorded a non-cash charg
Slide 14: Capital Deployment & Liquidity
CAPITAL DEPLOYMENT & LIQUIDITY HEALTHY LIQUIDITY PROFILE Highlights in the Quarter CAPITAL NET ▪ S&P upgraded KBR to ‘BB’ with a stable outlook based on successful Centauri DEPLOYMENT LEVERAGE integration and favorable fundamentals PRIORITIES 2.1X ▪ Deployed $28 million for share repurchases AS OF J
Slide 15: FY 2021 Guidance
FY 2021 GUIDANCE FY 2021 Guidance ▪ Reaffirming guidance for consolidated revenue, adj. EBITDA Consolidated revenue $5.8B to $6.2B margin and effective tax rate. 4% growth from 2020 at the midpoint ▪ Increasing guidance for adj. operating cash flow to reflect strong cash outlook for the year. Adjust
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 ▪ Raising adj. operating cash flow guidance ▪ De-r
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 2Q20 2Q21 2020 YTD 2021 YTD 2021 Guidance Actual Actual Actual Actual EPS (Diluted) $(0.28) $(1.08) $(1.00) $(0.75) $(0.10) $0.10 Add Back: Amortization related to acquisitions 0.02 0.07 0.04 0.14 0.25 Ichthys interest and commercial dispute
Slide 20: Non-GAAP Reconciliation: Adj EBITDA
Non – GAAP Reconciliation: Adj EBITDA Adjusted EBITDA 1Q20 2Q20 3Q20 4Q20 1Q21 2Q21 TTM Net income (loss) attributable to KBR ($104) ($39) $52 $19 $47 ($152) ($34) Add Back: Interest Expense 23 19 18 23 22 23 86 Provision (benefit) for income taxes (1) 6 19 2 16 40 77 Other non-operating (income) ex
Slide 21: Non-GAAP Reconciliations: Segment Adj EBITDA
Non – GAAP Reconciliations: Segment Adj EBITDA Government Solutions Adjusted EBITDA 1Q20 2Q20 3Q20 4Q20 1Q21 2Q21 Net income (loss) attributable to GS $90 $93 $97 $71 $74 $90 Add Back: Interest Expense 0 0 0 1 1 1 Other non-operating (income) expense 0 1 0 1 0 (1) Depreciation & amortization 12 12 1
Slide 22: 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