Kbr, Inc. · NYSE:KBR

Kbr — Investor Day (May 2017)

100 slides from Kbr's investor day presentation, May 12, 2017

1. Slide 1: KBR 2017 Investor Day at NYSE

   KBR 2017 Investor Day at NYSE KBR Investor Day | 2017 | NYSE

2. Slide 2: Agenda

   AGENDA Time Agenda Speaker 9:00 am – 9:30 am Registration & Breakfast 9:30 am – 10: 50 am Welcome Nelson Rowe, SVP, Investor Relations Welcome Keynote Stuart Bradie, President & CEO Market & Strategy Overview Graham Hill, EVP, Global Business Development & Strategy People, Values & Culture Ian Macke

3. Slide 3: Disclaimer: Forward-looking statements

   DISCLAIMER 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, g

4. Slide 4: Welcome Keynote – Stuart Bradie

   Sangachal Terminal, Azerbaijan Stuart Bradie | President & Chief Executive Officer WELCOME KEYNOTE KBR Investor Day | 2017 | NYSE

5. Slide 5: Journey to Zero Harm – Day by Day

   ZERO HARM Journey to Zero Harm – Day by Day 100% 90% 80% 70% 73% 60% 70% 62% 50% Zero Harm Not 52% Achieved 40% 48% 46% 30% Zero Harm Achieved 20% 10% 0% 2012 2013 2014 2015 2016 2017 KBR Investor Day | 2017 | NYSE 5

6. Slide 6: Business Overview

   BUSINESS OVERVIEW  Our Vision  Journey thus far  KBR Today  Corporate Strategy  Long-term Financial Targets 6 6 KBR Investor Day | 2017 | NYSE

7. Slide 7: Vision

   BUSINESS OVERVIEW Vision A leading global provider of full life-cycle professional services, project delivery and technologies supporting the Government Services and Hydrocarbons markets, creating exceptional value for customers, employees and shareholders. 7 7 KBR Investor Day | 2017 | NYSE

8. Slide 8: Vision

   BUSINESS OVERVIEW Vision Breakout growth potential Attractive, consistent cash flows Stable, balanced & sustainable growth Differentiation Operational Excellence Customer Success Financial Strength Technology Selective Recognized dependable Two end markets at partner global scale Domain expertise Di

9. Slide 9: Journey thus far

   BUSINESS OVERVIEW Journey thus far 2014 Today Centralized operations; inconsistent Regionalized management with appropriate corporate global strategy; governance (KBR Way) and clear global strategy 16 business units; numerous end markets; Focus on two end markets through 3 segments; exited all non-

10. Slide 10: Accountability

    Accountability BUSINESS OVERVIEW  Challenges: − Power project − Downstream EPC − Ichthys LNG − Legacy legal/commercial disputes  Lessons learned  Restructured organization: regionalization, empowerment, appropriate level of corporate governance  Status: − Power project – done − Downstream EPC –

11. Slide 11: KBR Today

    BUSINESS OVERVIEW KBR Today Life-cycle Disciplined Project Technical Attractive Domestic Enduring Industry-leading Professional Services Delivery Differentiation and International Mix Customer Base Safety Record 60 % 75 % Recurring Non-Cyclical 40+ 34,000+ Revenues Countries People 11 KBR Investor D

12. Slide 12: KBR Today – Improved Risk Profile

    BUSINESS OVERVIEW KBR Today – Improved Risk Profile Backlog by Contract Type Cost Reimbursable, Fixed Price PFI & Services Contracts Contracts (GS, T&C) – Lower 87% 6% 7% Risk Fixed Price ~75% Contracts 2017 earnings (E&C) secured Total KBR Backlog At 03/31/17: $10.6B + $2.2B Options *Includes KBR s

13. Slide 13: Core Capabilities across Verticals

    BUSINESS OVERVIEW Core Capabilities across Verticals Government Services Hydrocarbons  Science & Space  Licensed technology portfolio Technology  Engineering  Proprietary equipment  Consultancy & Advisory  Consulting & Advisory  Major programs  Major programs Program Management e.g. Deployed

14. Slide 14: Life-Cycle Strategy

    Life-Cycle Strategy BUSINESS OVERVIEW Visibility Operations Operations Early Project Longevity Early Project & & Advisory Advisory Contingency Maintenance Track Record Project Project Project Project Delivery Definition Delivery Definition Pull-through Customer Affinity Government Services Hydrocarb

15. Slide 15: Corporate Strategy

    BUSINESS OVERVIEW Corporate Strategy Grow Profits Strengthen Business Acumen Build High Performance Culture  Leverage full life-cycle  Be selective / manage risk  Lean cost structure offerings  KBR Way: schedule, cost,  Focus on bottom line and  Expand OPEX facing cash quality & safety – busin

16. Slide 16: Financial Targets: Revenues

    Financial Targets BUSINESS OVERVIEW Revenues Target Target Breakout Potential 3 – 5% Revenue CAGR 5 – 10% Revenue CAGR 10 – 25+% Revenue CAGR 7 – 10%1 NI CAGR 10 – 15% NI CAGR 15 – 35% NI CAGR 90 – 110% Cash Flow Conversion 90 – 110% Cash Flow Conversion 90 – 110% Cash Flow Conversion 2018 2019 thru

17. Slide 17: Market & Strategy Overview – Graham Hill

    Graham Hill | EVP, Global Business Development & Strategy MARKET & STRATEGY OVERVIEW Glen Lyon FPSO, North Sea KBR Investor Day | 2017 | NYSE

18. Slide 18: Market & Strategy Overview

    MARKET & STRATEGY OVERVIEW  Market Overview  Government Services & Hydrocarbons  Our Market Priorities  2017 Strategic Initiatives  Acquisition Strategy  Business Development Effectiveness  KBR Way 18 18 KBR Investor Day | 2017 | NYSE

19. Slide 19: Key Takeaways

    MARKET & STRATEGY OVERVIEW Key Takeaways Positive outlook in Government Services driven by strong US/Europe defense & security focus and international government outsourcing Positive outlook in Hydrocarbons driven by feedstock advantaged shale gas in the US, LNG supply-demand re-balance in the mid-t

20. Slide 20: Market Overview – Government Services

    MARKET & STRATEGY OVERVIEW Market Overview – Government Services Market / Funding Addressable Projected Streams Market Growth Rate Market Drivers  Large effort associated with new generation platforms and other RDT&E $14B 2 – 3% domain specific technologies Engineering & Program  On-going platform

21. Slide 21: Market Overview – Hydrocarbons

    MARKET & STRATEGY OVERVIEW Market Overview – Hydrocarbons Addressable Projected Market Market Growth Rate Market Drivers  Replacement of declining production to meet growing demand Upstream $33B 11%  Leading to life extension & brownfield – standardization and cost efficiency LNG  LNG continues t

22. Slide 22: Market Overview – Hydrocarbons: Oil and Gas Price Forecast

    MARKET & STRATEGY Market Overview – Hydrocarbons OVERVIEW Oil Price Forecast Expected 2020 Oil Demand, 100Mbpd 91 Mbpd 9 Mbpd Demand met by currently producing and Unsanctioned $50 – $60/bbl sanctioned projects oil prices –  Rebound in oil prices provides spur for global upstream spending +ve for K

23. Slide 23: KBR Priorities by Market

    MARKET & STRATEGY OVERVIEW KBR Priorities by Market US EMEA APAC Government Services  Defense  Defense & Security  Defense & Security • Logistics – Sustainment  Civil Governments • Engineering – Platform Support  Government Sponsored Entities • Platform Acquisition  Space • Platform Sustainmen

24. Slide 24: 2017 Strategic Initiatives… on target

    MARKET & STRATEGY 2017 Strategic Initiatives… on target OVERVIEW Grow Profits Strengthen Business Acumen Build High Performance Culture  Deliver organic growth and  Improve business discipline  Digitalization and Innovation realize synergies in in Hydrocarbons Government Services  Next-Gen techn

25. Slide 25: KBR M&A Philosophy

    MARKET & STRATEGY KBR M&A Philosophy OVERVIEW Technology Acquisitions Technologies Life-cycle capabilities Acquisition Wyle and HTSI Strategy Access to markets or Portfolio optimization geographies B&R IS Acquisitions  Differentiation Acquisition  Revenue synergies Characteristics  Attractive cas

26. Slide 26: Wyle and HTSI – Philosophy in Action

    MARKET & STRATEGY Wyle and HTSI – Philosophy in Action OVERVIEW KBRwyle – Fully global integrated life-cycle professional government services business Legacy KBR Legacy HTSI Legacy Wyle  OCO funded  O&M funded  RDT&E and Fed Civ funded  Logistics & support  Pre-positioned stock  Professional &

27. Slide 27: Business Development Effectiveness

    MARKET & STRATEGY OVERVIEW Business Development Effectiveness  Robust pipeline  Right leadership  Early engagement Pipeline People  Trained sales personnel  Accountability  Deep market knowledge  Maintain 2-3 year visibility  Close to customers – regional Effective Business Development Polic

28. Slide 28: KBR Way

    MARKET & STRATEGY KBR Way OVERVIEW Right Deal Right Execution Business Project Execution Development Right leadership Client account management Cost & schedule control Sales process, tools & platforms Lessons learned implementation Selective opportunities Productivity & wage risks Sound estimating O

29. Slide 29: An interesting observation… KBR Stock vs Brent Crude

    MARKET & STRATEGY OVERVIEW An interesting observation… 120.0 35.0 Correlation: 85.3% 30.0 100.0 25.0 80.0 KBR Stock Price Brent Crude Oil KBR 20.0 60.0 15.0 40.0 10.0 20.0 Brent Crude 5.0 0.0 0.0 May-13 Nov-13 Jun-14 Dec-14 Jul-15 Jan-16 Aug-16 Mar-17 Sep-17 Brent Crude Oil KBR Stock 29 29 KBR Inves

30. Slide 30: Low oil prices have limited impact on KBR

    MARKET & STRATEGY Low oil prices have limited impact on KBR OVERVIEW Upstream Some exposure to low oil price Refining Low oil prices stimulates this sector 6% 6% 45% >40% Government Services 45% Non-oil facing3 Government Gas Facing4 Services 43% 1. Shown as a % of expected revenues in 2017 2. Inclu

31. Slide 31: People, Values & Culture – Ian Mackey

    Ian Mackey | EVP & Chief Corporate Officer PEOPLE, VALUES & CULTURE KBR Investor Day | 2017 | NYSE

32. Slide 32: Human Capital: People; Values & Culture

    HUMAN CAPITAL  People  Values & Culture 32 32 KBR Investor Day | 2017 | NYSE

33. Slide 33: Human Capital Strategy Aligned to Business Strategy

    HUMAN CAPITAL Human Capital Strategy Aligned to Business Strategy Attract Develop Retain  Focus on global/regional/local  Global talent review and  Structured job families and career succession management paths recruitment  Leadership development  Industry benchmarked  Expand in-house talent a

34. Slide 34: KBR - A Global Employer

    HUMAN CAPITAL KBR - A Global Employer  KBR focuses on leaving a lasting legacy everywhere we work, improving local employment, supply chains, and communities 21,000+ 11,000+ 2,000+  Setting succession strategies, Americas EMEA APAC including planning, assessment, training needs analysis, managemen

35. Slide 35: Building a High Performance Culture

    HUMAN CAPITAL Building a High Performance Culture Zero Harm Quality  Uncompromising commitment to  Passion to produce quality work health, safety and environment  Value our customer success  Courage to care Integrity Accountability  Honesty, trust, prudence and tenacity  Empower employees  Co

36. Slide 36: Government Services Overview – Byron Bright

    P‐8A | Naval Air Station Patuxent River Byron Bright | President, KBRwyle GOVERNMENT SERVICES OVERVIEW KBR Investor Day | 2017 | NYSE

37. Slide 37: GS Overview

    GS OVERVIEW  Key Takeaways  GS Vision & Strategy  Business Overview  Project Highlights  Business Development Priorities and Pipeline  Long-term Financial Targets  Breakout Growth Potential 37 37 KBR Investor Day | 2017 | NYSE

38. Slide 38: Key Takeaways

    Key Takeaways GS OVERVIEW Transformational Wyle and HTSI acquisitions create a global-scale provider of full life-cycle professional and technical services Dedicated delivery model, under one global brand – KBRwyle generating predictable and sustainable returns Expanded sales capacity and deep domai

39. Slide 39: GS Vision & Strategy

    GS OVERVIEW GS Vision & Strategy Grow Profits Strengthen Business Acumen Build High Performance Culture  Integrate Wyle and HTSI  Rigorous BD and capture  Bring strategic and cultural under single global brand system – improve sales alignment across integrated effectiveness GS Segment  Take mark

40. Slide 40: Business Overview

    Business Overview GS OVERVIEW  Global scale through over 60 domestic and over 40 international locations 2017 Revenues  Highly technical and professional services from Wyle and HTSI heritage  Mission support and logistics from the KBR heritage and HTSI heritage EMEA &  Critical differentiators:

41. Slide 41: GS Today – Greater Balance

    GS OVERVIEW GS Today – Greater Balance Revenue by Funding Streams Backlog by Contract Type Fixed Price Contracts International OCO 5% 22% 26% 11% O&M DoD 18% NASA & 23% 95% Other US Cost Reimbursable RDT&E & PFI Contracts 1. Expected 2017 revenues; includes KBR share of JVs Highly technical and prof

42. Slide 42: GS Capabilities

    GS Capabilities GS OVERVIEW  Recognized leader in mission operations and logistics for the world’s most challenging environments  Leading maintenance provider of prepositioned stock for U.S. Army and U.S. Marine Corps GLOBAL LOGISTICS &  20+ years as a leading provider of expeditionary support se

43. Slide 43: Life-Cycle Strategy

    Life-Cycle Strategy GS OVERVIEW  Base Operating Support Services  Space health and human sciences (BOSS)  Advisory & Consulting  Contingency operations & surge  Research & Development capability  Solutions development  Logistics  Inventory / depot management  Maintenance  Prepositioned sto

44. Slide 44: Project Highlights

    Project Highlights GS OVERVIEW Human Health & Performance NAVAIR: F/A-18 Project Allenby Connaught LOGCAP IV NASA; $1.4B; PoP through 2025 Naval Air Systems Command; UK MoD; $ 11.2B; PoP thru 2041 US Army Sustainment Command; $65m; PoP thru 2020 $3.1B; PoP thru 2018  Management and integration of N

45. Slide 45: Business Development Priorities and Pipeline

    Business Development Priorities and Pipeline GS OVERVIEW Re-compete focus for the base business $64B Value Total GS Pipeline as of April 2017 $13B Pursuit Leverage the combined capabilities and track record to increase win rates $20B Capture Capture large contracts as a prime contractor $24B Bid Pre

46. Slide 46: Capture Revenue Synergies

    Capture Revenue Synergies GS OVERVIEW US EMEA APAC  Leverage SETA expertise  Take FMI and large scale  Exploit KBRwyle System into system life cycle Program Management Engineering principals to sustainment Expertise into ME prove domain knowledge in  Expand facility and government services varie

47. Slide 47: Segment Financial Targets

    GS OVERVIEW Segment Financial Targets 2018 thru 2021 Revenue CAGR 5 – 8% GP+EE Margins Upper single digits % Segment Operating Income Upper single digits % Margins Segment Operating Cash Flow 90 – 110% of Net Income Conversion Revenue Synergies $300M+ annual run rate by 2020 Target reflects stable a

48. Slide 48: Breakout Growth Potential: Revenues

    GS OVERVIEW Breakout Growth Potential Opportunities for Breakout Scenarios 8 – 20+% CAGR  Increased global deployment Breakout tempo driving OCO spend Revenues  Humanitarian or disaster relief support needs Target 5 – 8% 5 – 8% CAGR 2018 2019 thru 2021 Breakout potential can increase exponentially

49. Slide 49: GS Overview

    GS OVERVIEW 49 49 KBR Investor Day | 2017 | NYSE

50. Slide 50: Engineering & Construction Overview – Jay Ibrahim

    Ichthys LNG | Darwin Australia Jay Ibrahim | President, EMEA ENGINEERING & CONSTRUCTION OVERVIEW KBR Investor Day | 2017 | NYSE

51. Slide 51: E&C Overview

    E&C OVERVIEW  Key Takeaways  E&C Vision & Strategy  Business Overview  Project Highlights  Business Development Priorities and Pipeline  Long-term Financial Targets  Breakout Growth Potential 51 51 KBR Investor Day | 2017 | NYSE

52. Slide 52: Key Takeaways

    Key Takeaways E&C OVERVIEW E&C has a balanced risk profile with growing proportion of revenues and earnings from services, in cost-reimbursable and long-term contracts through full life-cycle offerings E&C focuses strategically on gas and downstream projects together with brownfields and OPEX facing

53. Slide 53: E&C Vision & Strategy

    E&C Vision & Strategy E&C OVERVIEW Grow Profits Strengthen Business Acumen Build High Performance Culture  Grow core markets: LNG,  Pursue differentiated EPC  Strengthen leadership and Fertilizers, Petrochem & IS projects with lower risk profile supervision  Capture under-penetrated  Revitalize

54. Slide 54: Business Overview

    Business Overview E&C OVERVIEW Chart by Revenues Title Market  One of the world’s largest and comprehensive Other Upstream providers of professional services and projects to 5% 11% the Hydrocarbons industry  Premier project management and major project LNG delivery contractor 30% 54%  Complete ma

55. Slide 55: E&C Today – more services, more predictable

    E&C Today – more services, more predictable E&C OVERVIEW Revenue Distribution by Contract Size Backlog by Contract Type Lump Sum EPC 6% 46% 68% Services 54% 32% Major Projects 94% 2014 2017 Services, Maintenance and Reimbursable EPC Contracts 1. Expected 2017 revenues; includes KBR share of JVs Grow

56. Slide 56: E&C Capabilities

    E&C OVERVIEW E&C Capabilities UPSTREAM LNG DOWNSTREAM INDUSTRIAL SERVICES Fixed Platforms Liquefaction Refining Maintenance Floating Platforms Regasification Petrochemicals Modifications Hulls, Moorings & Risers FLNG Chemicals & Specialty Chemicals Asset Integrity SURF FSRU Ammonia & Fertilizers Spe

57. Slide 57: Life-Cycle Strategy

    Life-Cycle Strategy E&C OVERVIEW  Industrial services  Leverage Technology  Maintenance including predictive  Pull-through from T&C  Turnarounds & shutdowns  Early engagement  Specialty welding  Project advisory  Scaffolding  Specialty Consulting  Modifications & small cap projects  EPC/

58. Slide 58: Operational Excellence Model

    Operational Excellence Model E&C OVERVIEW  Strong leadership  Lessons learned  Effective team design Plan  Focus on project set-up  Continuous improvement mindset  Training  Efficient processes & tools  Rigorous selection of partners, vendors & subcontractors Operational  Estimating knowled

59. Slide 59: Project Highlights

    Project Highlights E&C OVERVIEW BP Tortue SADARA Chemical Project  BP  JV between Saudi Aramco and Dow Chemical  Gas Monetization Project  Al-Jubail, KSA  Offshore Mauritania  Pre-FEED + FEED + Program Management  Field Development Planning + Conceptual (including C&SU Support) Engineering 

60. Slide 60: Project Highlights

    Project Highlights E&C OVERVIEW Magnolia LNG Sumatra Oilfield Services  Lake Charles Louisiana  Chevron Indonesia  FEED and EPC of Greenfield  Minas, Duri and Dumai fields, Sumatra  4 Train x 2.0 Mt/a facility  Just awarded  has all required FERC and DoE permits and approvals  5 year enginee

61. Slide 61: Business Development Priorities and Pipeline

    E&C OVERVIEW Business Development Priorities and Pipeline Global & regional account focus $81B Value Total E&C Pipeline as of April 2017 Cross selling between T&C, E&C and Industrial $38B Pursuit Services; capture government services expertise $23B Capture Prospect selectivity & bid scrutiny $15B Bi

62. Slide 62: Segment Financial Targets

    E&C OVERVIEW Segment Financial Targets 2018 2019 thru 2021 Flat to low Revenue CAGR 10 – 15% single digits GP + EE Margins Upper single digits % Segment Operating Income Mid to upper single digits % Margins Segment Operating Cash Flow 80 – 110% of Net Income Conversion Growing base business, breakou

63. Slide 63: Breakout Growth Potential: Revenues

    E&C OVERVIEW Breakout Growth Potential Breakout Growth Drivers  Second North American downstream 15 – 30+% CAGR Breakout wave (embryonic)  Feedstock advantage driving LNG export in North America (ongoing)  National government requirements for Revenues Target program management for complex project

64. Slide 64: Technology & Consulting Overview – Graham Hill

    BP/INEOS Olefins and Polymers | Alvin, Texas Graham Hill | EVP, Global Business Development & Strategy TECHNOLOGY & CONSULTING OVERVIEW KBR Investor Day | 2017 | NYSE

65. Slide 65: T&C Overview

    T&C OVERVIEW  Key Takeaways  Business Overview  Project Highlights  T&C Vision & Strategy  Long-term Financial Targets 65 65 KBR Investor Day | 2017 | NYSE

66. Slide 66: Key Takeaways

    Key Takeaways T&C OVERVIEW T&C is a higher growth, high margin business with low risk profile providing key Technologies & Consulting services in the Hydrocarbons sector T&C’s differentiated technologies and early customer engagement provide selective pull-through opportunities for Engineering & Con

67. Slide 67: Business Overview

    Business Overview T&C OVERVIEW Broad Range of Technologies and Solutions from Wellhead to Specialty Chemicals Upstream Downstream Proprietary Semi-submersible hull design Olefins (SCORE™, K-COT™) Technologies Monohull vessels Ammonia (KRES™, Purifier™) Chemicals (Phenol, BPA, PC, Acetic Acid, PVC, N

68. Slide 68: Business Track Record & Key Differentiators

    Business Track Record & Key Differentiators T&C OVERVIEW Business Track Record Key Differentiators Revenues Operating Margins 450 60% T&C capability mix fits well with the needs of 400 emerging markets 50% 350 300 40% In $M 250 30% Dynamic and dedicated global sales team & 200 platform – pull-throug

69. Slide 69: T&C Vision & Strategy

    T&C OVERVIEW T&C Vision & Strategy Grow Profits: Expand Grow Profits: Increase Grow Profits: Expand Technology Portfolio Scope of Offerings geographically  Alkylation  Brownfields & revamps  Prioritize sales efforts in growth markets (Russia, China, Middle  Isomerization  PEQ, catalysts and sol

70. Slide 70: Life-Cycle Strategy

    Life-Cycle Strategy T&C OVERVIEW  Catalysts  Field development planning  Asset integrity management  Feasibility studies  Remote operations monitoring  KBR Consulting  Real-time advisory  Technology selection  Specialized consulting & advisory  Automation/digitalization  Proprietary equip

71. Slide 71: Technology Portfolio Growth Model

    T&C OVERVIEW Technology Portfolio Growth Model PEQ Market/Customer feedback 4. Enhance 1. Identify Catalysts Strategic portfolio review Technical services Technology chain gaps Technology portfolio growth Licensing model In-house Advanced chemical engineering Alliance 3. Commercialize 2. Develop Sal

72. Slide 72: Project Highlights

    T&C OVERVIEW Project Highlights Lotte Chemical Titan Haike Ruilin K-SAAT™ Dyno Nobel Ammonia K-COT™  License + BED + PEQ +  License + BED + EPC+  License + BED + PEQ + Catalyst Remote Operations Monitoring Proprietary Catalyst  First reference for KBR’s solid  One of the first ammonia plants 

73. Slide 73: Project Highlights

    T&C OVERVIEW Project Highlights Maersk Culzean Hyundai Oilbank ROSE® Eurochem Ammonia Plant  Concept + FEED + DED for  License + BED+ Equipment +  License + BED + PEQ + topsides facilities + support at  Largest supercritical SDA Catalyst + Automation the Singapore shipyard during designed – in F

74. Slide 74: Segment Financial Targets

    Segment Financial Targets T&C OVERVIEW 2018 thru 2021 Revenue CAGR 7 – 10% GP+EE Margins Low 20s Segment Operating Income High teens Margins Segment Operating Cash Flow 90 – 110% of Net Income Conversion Pull-through Potential $500M / year T&C delivers growth and balance in earnings at relatively lo

75. Slide 75: Business Discipline / Risk Management – Eileen Akerson

    Eileen Akerson | EVP & General Counsel BUSINESS DISCIPLINE / RISK MANAGEMENT KBR Investor Day | 2017 | NYSE

76. Slide 76: Business Discipline

    BUSINESS DISCIPLINE  Business Discipline  Global Ethics Compliance Program  Project Execution Risk Management 76 76 KBR Investor Day | 2017 | NYSE

77. Slide 77: Global Ethics Compliance Program

    BUSINESS DISCIPLINE Global Ethics Compliance Program Common Set of Ethics and Legal Legal and Ethical Compliance  In compliance with all applicable laws Principles  KBR does not condone any illegal or unethical  Applicable to all employees, supervisors, directors actions and all third parties act

78. Slide 78: Project Execution Risk Management

    BUSINESS DISCIPLINE Project Execution Risk Management  Leveraging lessons learned to improve commercial performance of projects  Adhering to enhanced governance processes in the areas of transaction approval and project oversight to ensure informed risk-based decision making.  Consistent and rigo

79. Slide 79: Reference Project – Ichthys LNG

    Reference Project – Ichthys LNG BUSINESS DISCIPLINE Project status: First train start-up targeted end of 2017 JKC Joint Venture = JGC, Chiyoda, & KBR (30%) Re-Measurable Lump-Sum Reimbursable 12% of Project 43% of Project 45% of Project 1. Power plant (89% complete): JKC now managing directly with n

80. Slide 80: Key Takeaways

    BUSINESS DISCIPLINE Key Takeaways Robust corporate risk management framework utilizing enhanced, fit-for- purpose policies, processes, tools, training Global corporate compliance program to prevent, identify and respond to risks Improved commercial performance via accountability and informed decisio

81. Slide 81: Finance Strategy, Targets and Capital Allocation – Mark Sopp

    Mark Sopp | Chief Financial Officer FINANCE STRATEGY, TARGETS AND CAPITAL ALLOCATION KBR Investor Day | 2017 | NYSE

82. Slide 82: Financial Overview

    FINANCIAL OVERVIEW  Key Takeaways  Overview  Financial Strategy  Long-term Financial Targets  Capital Allocation Strategy 82 82 KBR Investor Day | 2017 | NYSE

83. Slide 83: Key Takeaways

    FINANCIAL OVERVIEW Key Takeaways Professional services and technology oriented – low risk, low capital intensity business generates predictable and attractive cash flows Net Income growth targeted to outpace revenue growth through scale, selectivity, differentiation, lean cost structure & low capita

84. Slide 84: KBR Today

    FINANCIAL OVERVIEW KBR Today Strategic actions have reduced our risk profile while enhancing our position for breakout opportunities Cost-reimbursable Operations & Fixed Price GS, T&C, E&C Early Project E&P services incl. Maintenance/ – Lower risk Advisory maintenance Contingency EMEA & APAC 7% 33%

85. Slide 85: Financial Strategy

    Financial Strategy FINANCIAL OVERVIEW Strengthen Business Emphasize Financial Grow Profits Acumen Discipline  Promote growth/scale  ‘Cash is King’ mindset  Invest in growth markets  Lean back office/heavy BD  Maintain low cap intensity  Attractive regular dividend  Evolve to higher margin  C

86. Slide 86: Financial Targets – Drivers and Assumptions

    Financial Targets – Drivers and Assumptions FINANCIAL OVERVIEW  Market outlook: • Moderate growth in government spending in US and UK markets  Above market growth in GS contingency operations support • Stable to improving hydrocarbons commodity conditions  Modest CAPEX spending recovery in 2018/2

87. Slide 87: Reaffirming Guidance

    FINANCIAL OVERVIEW Reaffirming Guidance  EPS, excluding legacy legal fees, now expected above mid-point of $1.10 – $1.40 range – Reflects gain on Pemex settlement to be recorded in 2Q17 – Reflects organic growth for GS, T&C and OpEx projects in E&C, contraction in CapEx projects in E&C, and target

88. Slide 88: Adjusted Baseline for 2017

    Adjusted Baseline for 2017 FINANCIAL OVERVIEW Net Income Range In $Millions Low Consensus High 2017 Street Consensus $189 KBR 2017 Guidance/Implied $179 $200 Pemex Gain 2017 ($26) ($26) ($26) Adj. Baseline for 2017 $153 $163 $174 88 88 KBR Investor Day | 2017 | NYSE

89. Slide 89: Long-term Targets

    FINANCIAL OVERVIEW Long-term Targets 2018 2019 thru 2021 Revenue1 Growth Rate 5 – 10% 3 – 5% CAGR 7 – 10%3 10 – 15% Net Income Growth Rate2 CAGR Operating Cash Flow 90 – 110% 90 – 110% Conversion ratio4 1. GAAP revenues 2. Legal legacy costs excluded 3. Growth over 2017 after adjusting for PEMEX gai

90. Slide 90: Breakout Potential

    FINANCIAL OVERVIEW Breakout Potential 2018 2019 thru 2021 Revenue1 Growth Rate 10 – 25+% 3 – 5% CAGR 7 – 10%3 15 – 35% Net Income Growth Rate2 CAGR Operating Cash Flow 90 – 110% 90 – 110% Conversion ratio4 1. GAAP revenues 2. Legal legacy costs excluded 3. Growth over 2017 after adjusting for PEMEX

91. Slide 91: Targeted Operating Cash Flow (OCF)

    Targeted Operating Cash Flow (OCF) FINANCIAL OVERVIEW 350 300 Annual 250 200 $100 – 200M / year growing to In $M 150 100 $200 – 300M / year 50 -- 2017 2018 2019 2020 2021 Target Range 1,400 Cumulative 1,200 1,000 800 ~$800M to 1B+ Deployable In $M 600 Operating Cash Flow 400 200 -- $50 – 100M of CAP

92. Slide 92: Actual Capital Deployed, 2014 – 2016

    FINANCIAL OVERVIEW Actual Capital Deployed, 2014 – 2016 Capex 6% Dividends Back to 11% shareholders Total % Total 25% Capex $ 74 6% Buybacks Dividends $140 11% 14% Buybacks $172 14% M&A and M&A and Divestitures $859 69% Divestitures 69% Total $1,245 100% 92 92 KBR Investor Day | 2017 | NYSE

93. Slide 93: Capital Allocation Strategy

    FINANCIAL OVERVIEW Capital Allocation Strategy  Capex for profitable organic pursuits/projects First Order  Maintain attractive dividend  Maintain gross debt leverage <2.75x EBITDA Strategic &  Accretive and synergistic M&A Opportunistic  Buybacks with excess cash $800M+ Targeted cumulative dep

94. Slide 94: Closing Remarks – Stuart Bradie

    North West Shelf LNG | Karratha, Burrup Peninsula, WA, Australia Stuart Bradie | President & Chief Executive Officer CLOSING REMARKS KBR Investor Day | 2017 | NYSE

95. Slide 95: Vision

    Vision CLOSING REMARKS Breakout growth potential Attractive, consistent cash flows Stable, balanced & sustainable growth 95 95 KBR Investor Day | 2017 | NYSE

96. Slide 96: What you can expect

    What you can expect CLOSING REMARKS Leverage our full life-cycle professional services, project delivery and technologies to grow profitably Drive high performance culture through business discipline, operational & delivery excellence and accountability Capture profitable breakout opportunities by l

97. Slide 97: This is the team that is accountable to deliver

    CLOSING REMARKS This is the team that is accountable to deliver Stuart Bradie Mark Sopp Graham Hill Eileen Akerson Ian Mackey Byron Bright President & CEO EVP & CFO EVP, Global BD & EVP & Chief Counsel EVP & Chief Corporate President, KBRwyle Strategy Officer John Derbyshire Farhan Mujib Jay Ibrahim

98. Slide 98: Questions?

    KBR Investor Day | 2017 | NYSE QUESTIONS?

99. Slide 99: Appendix

    APPENDIX KBR Investor Day | 2017 | NYSE

100. Slide 100: Glossary of Acronyms

     APPENDIX Glossary of Acronyms AN – Ammonium Nitrate FSRU – Floating Storage Regasification Unit OEM – Original Equipment Manufacturer APAC – Asia Pacific GAAP – Generally Accepted Accounting Principles OPEX – Operating Expenses bbl – Barrel of Oil GDP – Gross Domestic Product PC - Polycarbonate BD –

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