Slide 1: KBR Q3 2022 Earnings Presentation
October 26, 2022 Stuart Bradie, President and CEO Mark Sopp, Executive VP and CFO Jamie DuBray, VP of Investor Relations 1
Slide 2: Forward-Looking Statement
FORWARD‐LOOKING STATEMENT The statements in this presentation that are not historical statements, including statements regarding future financial performance, are forward‐looking statements within the meaning of the federal securities laws. These statements are subject to numerous risks and uncertai
Slide 3: Stuart Bradie, President and CEO
Stuart Bradie President and Chief Executive Officer 3
Slide 4: Delivering Solutions, Changing the World
RECYCLE/ REUSE HEALTH, SAFETY & SECURITY EFFICIENT ENERGY CoN r ays GOVERNANCE EAR) = SUSTAINABLE TRAVEL ~ Waeourace To CAR SUPPLY a = COMMUNITY PARTNERS 5) ENGAGEMENT \ CLIMATE RISK CHANGE MANAGEMENT QUARTERLY £227 EARNINGS : Delivering Solutions, Changing the World 7
Slide 5: Sharing a Purpose, Changing the World
SHARING A PURPOSE, CHANGING THE WORLD 5 5
Slide 6: Strong 3rd Quarter Results; Continued Momentum Toward 2025 Targets
STRONG 3rd QUARTER RESULTS; CONTINUED MOMENTUM TOWARD 2025 TARGETS ▪ Delivered strong margins and earnings momentum in Q3’22 ▪ Strong operating cash flow and free cash conversion ▪ Awarded $2.7B of bookings and options in highly strategic areas underscoring strength in accelerating end markets ▪ Bal
Slide 7: Market Outlook: Sustainable Technology Solutions
MARKET OUTLOOK SUSTAINABLE TECHNOLOGY SOLUTIONS MARKET DRIVERS & OUTLOOK TRENDS, WINS & MOMENTUM ◦ Global supply demand reconfiguration stemming from Ukraine/Russia War expected to drive near‐ and mid‐term 92% 2022 Work Under Contract $4.0B 3Q22 Backlog investments to enable energy, chemical, and fo
Slide 8: Market Outlook: Government Solutions
MARKET OUTLOOK GOVERNMENT SOLUTIONS MARKET DRIVERS & OUTLOOK TRENDS, WINS & MOMENTUM ◦ Continued prioritization by the U.S., U.K., Australian and 99% 2022 Work Under Contract $15.8B 3Q22 Backlog & allied governments of national security, cyber, and military space superiority; Ukraine conflict elevat
Slide 9: Mark Sopp, Executive VP and CFO
Mark Sopp Executive Vice President and Chief Financial Officer 9
Slide 10: 3rd Quarter 2022 Results: KBR Delivers Continued Growth
3rd QUARTER 2022 RESULTS | KBR DELIVERS CONTINUED GROWTH REVENUES ADJ. EBITDA1 +11% REVENUES ex OAW $1,843 $1,626 Margin % $162 $171 $1,457 11% +173 ADJ. EBITDA1 bps expansion ex OAW 9% 9% 9% +12% ADJ. EPS1 ex OAW ADJ. EPS1 ADJ. OCF1 YTD Capex $0.64 $0.65 Capex $547 +17% ADJ. OCF1 3Q’22 YTD Deployab
Slide 11: Segment Results Demonstrate Mission Focus, Resilience and Agility
SEGMENT RESULTS DEMONSTRATE MISSION FOCUS, RESILIENCE AND AGILITY SUSTAINABLE TECHNOLOGY SOLUTIONS GOVERNMENT SOLUTIONS REVENUES ADJ. EBITDA1 REVENUES ADJ. EBITDA1 Margin % Margin % 1,169 ex OAW 20% 10% 14% 9% Shaded portion reflects Operation Allies Welcome (OAW) revenue and adj. EBITDA in 3Q’21. ◦
Slide 12: Strategic, Accretive and Balanced Capital Deployment
STRATEGIC, ACCRETIVE AND BALANCED CAPITAL DEPLOYMENT CAPITAL DEPLOYMENT PRIORITIES Fund Organic Growth 1.9x Net Leverage as of $75M Acquisition of U.K.‐based Maintain Attractive Dividend Maintain Responsible Leverage September 30, 2022 VIMA Group Strategic M&A Share Repurchases $67M $500M Capital re
Slide 13: Raising FY 2022 Guidance to Reflect Market and Business Momentum
RAISING FY 2022 GUIDANCE TO REFLECT MARKET AND BUSINESS MOMENTUM KBR, Inc. FY 2022 Guidance REVENUE (Narrowed) $6.5B ‐ $6.7B v. $6.4B ‐ $6.8B RAISING FY 2022 ADJ. EBITDA1 MARGIN ~10% GUIDANCE $2.60 ‐ $2.65 (EARNINGS AND CASH) ADJ. EPS1 (Raised midpoint) v. $2.53 ‐ $2.65 EFFECTIVE TAX RATE (Lowered)
Slide 14: In Summary
IN SUMMARY ◦ Thematic long‐term trends favor KBR capabilities and technology ◦ Accelerating end‐market momentum in areas of global importance; growing opportunities pipeline ◦ Generating value through strategic, balanced capital deployment ◦ Significant multi‐year visibility in backlog enabling stro
Slide 15: Delivering Solutions, Changing the World
725 |2022 f Delivering Solutions, Changing the i EARNIN G Ss is
Slide 16: Appendices
Appendices ~" EARNINGS «:
Slide 17: Non-GAAP Reconciliations
NON‐GAAP RECONCILIATIONS Adjusted EPS Revenue and Adjusted EPS ex OAW 3Q211 3Q22 FY2022 Guidance 3Q211 3Q22 Growth Diluted EPS $0.38 $0.49 $1.11 $1.16 Revenue (as reported) $1,843 $1,626 Revenue attributable to OAW 386 4 Adjustments: Revenue ex OAW $1,457 $1,622 11% Amortization related to acquisiti
Slide 18: Non-GAAP Reconciliations
NON‐GAAP RECONCILIATIONS Adjusted Operating, Free Cash, and Deployable Free Cash Flow 3Q211 3Q22 2021 YTD 2022 YTD FY2022 Guidance Cash flows provided by operating activities $122 $122 $276 $336 $345 $370 Adjustments: Add back: Major project advance work‐off — — 11 — — Adjust: CARES Act temporary ta
Slide 19: Non-GAAP Reconciliations
NON‐GAAP RECONCILIATIONS Adjusted EBITDA 1Q211 2Q211 3Q211 4Q211 1Q22 2Q22 3Q22 Net income (loss) attributable to KBR $49 $(149) $57 $70 $(71) $94 $74 Adjustments: Interest expense 19 20 20 21 20 21 23 Provision (benefit) for income taxes 17 40 20 34 19 33 27 Other non‐operating (income) expense 3 (
Slide 20: Non-GAAP Reconciliations
NON‐GAAP RECONCILIATIONS Adjusted EBITDA ‐ Segment FY201 1Q211 2Q211 3Q211 4Q211 1Q22 2Q22 3Q22 Pretax income attributable to GS $351 $74 $90 $112 $133 $114 $124 $96 Interest expense 1 1 1 1 (1) 1 — 2 Other non‐operating (income) expense 2 — (1) 1 3 — 8 9 Depreciation and amortization 60 25 32 29 22
Slide 21: Non-GAAP Reconciliations
NON‐GAAP RECONCILIATIONS Reconciliation of Operating Income to Adj. EBITDA Quarter ended September 30, 2022 GS STS Corporate KBR Operating income $105 $56 $(36) $125 Noncontrolling interest 2 (1) — 1 Depreciation and amortization 23 4 6 33 EBITDA $130 $59 $(30) $159 Adjustment: Acquisition, integrat