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Baird Government Services and Defense Conference
November 29, 2018
DISCLAIMER | Forward-looking Statements
2 | Investor Presentation
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, strategies, future events, future financial performance and backlog information and
other information that is not historical information. When used in this presentation, the words “estimates,” “expects,” “anticipates,” “projects,” “plans,” “intends,” “believes,”
“forecasts” or future or conditional verbs such as “will,” “should,” “could,” or “may,” and variations of such words or similar expressions are intended to identify forward-looking
statements. All forward-looking statements are based upon our current expectations and various assumptions. Our expectations, beliefs, and projections are expressed in good
faith, and we believe there is a reasonable basis for them. However, there can be no assurance that management’s expectations, beliefs, and projections will be achieved.
There are numerous risks and uncertainties, many of which are beyond our control, that could cause actual results to differ materially from the forward-looking statements
contained in this presentation. These risks and uncertainties include, but are not limited to: current or future economic conditions; our ability to obtain and perform under contracts
from existing and new customers, including the U.S. government; exposure to cost overruns, operating cost inflation and potential liability claims and contract disputes; access to
trained engineers and other skilled workers; risks relating to operating through joint ventures and partnerships; risks inherent in doing business internationally; potential tax
liabilities; maritime risks; changes in the demand for our services and increased competition; protection of intellectual property rights; risks associated with possible future
acquisitions; risks related to our information technology systems; impairment of goodwill and/or intangible assets; reduction or reversal of previously recorded revenues; risks
relating to audits and investigations, including by governments; compliance with laws and regulations, and changes thereto, including those relating to the environment, trade,
exports and bribery; our creditworthiness and ability to comply with the financial covenants in our credit agreement; and other risk factors discussed in our most recently filed Form
10-K, any subsequent Form 10-Qs and 8-Ks, and other Securities and Exchange Commission filings.
All forward-looking statements attributable to us, or persons acting on our behalf, apply only as of the date made and are expressly qualified in their entirety by the cautionary
statements in this presentation. Except as required by law, we undertake no obligation to revise or update forward-looking statements to reflect events or circumstances that arise
after the date made or to reflect the occurrence of unanticipated events.
Life-cycle
ServicesEnduring
Customer Base
Attractive Domestic
and International MixIndustry-leading
Safety Record
Technical
DifferentiationDisciplined Project
Delivery
KBR | Did You Know?
Delivering clean energy
solutions through the
design and construction of
a third of the world’s LNG
production.
Serving the UK MoD
through a comprehensive
construction and facilities
management program that
extends through 2041.
Providing solutions and
proprietary technologies that
cater to growing demand for
cleaner fuels and consumer
products.
Leading service provider to
the space community,
supporting mission control,
astronaut life science,
research and operations.
34,000+
People40+ Countries
3 | Investor Presentation
Buoyant end markets in both the government and hydrocarbons industries
Government
Services
▪ Healthy government spending budgets, both domestic and international
▪ Breadth of capabilities expands synergy pursuits across the GS landscape
▪ Increasing best value selection opportunities and bundling of procurements
Technology
▪ Growing demand for petrochemical, refining and agricultural technologies
▪ Low-priced, plentiful feedstock
▪ Regulatory mandates are driving demand
Hydrocarbons
Services
▪ Strong momentum across the maintenance market
▪ Recovering CapEx markets; increasing momentum for LNG and petrochem
▪ Proposal pipeline continues to build
GS, $13
HS, $12
Tech, $1
Proposals Submitted, $26 B1
GS, $2
HS, $9
Tech, $1
Proposals in Prep, $12 B
As of September 30, 2018
1. HS “Proposals Submitted” includes proposals formally submitted as well as EPC/EPCm projects awarded that have not achieved FID (e.g., Magnolia and Methanex). “FID” is not applicable for our GS and Technology prospects.
Business Overview | Outlook
4 | Investor Presentation
High Impact, Mission Critical Services
Government Services | A Deeper Look
1 Pro forma 2017 includes Aspire and SGT in the International and NASA buckets, respectively; Includes KBR portion of unconsolidated joint ventures revenues
15%
14%
15%22%
34%
▪ Industry leading 11% organic growth in the first three quarters of 2018
▪ Top-tier space services provider
▪ Blue chip logistics and mission support
▪ Highly technical and professional services across many platforms
▪ Deep domain expertise
▪ Mission critical services
▪ Large scale & complex environments
▪ Dedicated client delivery model
Critical Differentiators
▪ US Department of Defense
▪ UK Ministry of Defence
▪ Australian Department of Defence
▪ NASA / space community
▪ Other government entities
Diverse Customer Base
▪ International
▪ RDT&E
▪ O&M
▪ OCO
▪ NASA
Diverse Funding Streams
International
NASA & Other
US
DoD
OCO
O&M
RDT&E
Revenue by Funding Streams1
Government Services | Profile
6 | Investor Presentation
Delivering Full Life Cycle, Mission-Critical Solutions
Providing integrated services across platforms and programs
▪ Logistics
▪ Facilities Management & Security
▪ Supply Chain & Asset Management
▪ Platform Maintenance &
Sustainment
▪ Training
▪ Test & Evaluation
▪ Mission Planning & Execution
▪ Program/Project Management
▪ Computer Network Defense
▪ Research & Development
▪ Advisory & Consulting
▪ Scientific Monitoring & Reporting
▪ Network & Systems Assessments
▪ Systems Engineering & Integration
(SE&I)
▪ Independent Verification &
Validation (IV&V)
▪ Software Development
▪ Top Contracts: DTIC, LTPO, C-RAM, Integrated Cyber Ops, AMCOM, OASIS
▪ Top Customers: Navy, Army, AFRL, Air Force, SPAWAR
▪ Attributes: Domain Expertise, Platform Knowledge, System Engineering, Cybersecurity
▪ Top Contracts: LogCAP IV, Aspire Defence, Affinity MFTS, Djibouti, Army & Marine Prepo
▪ Top Customers: U.S. Army, U.K. Ministry of Defence, U.S. Navy, Commercial Aerospace
▪ Attributes: International Expertise, Contingency Ops, Asset Mgmt, Supply Chain
Systems Engineering
Space & Mission Solutions
Logistics Services
▪ Top Contracts: JSC Mission Control, Astronaut Health, Goddard, Ames, DOT Volpe
▪ Top Customers: NASA, Dept of Transportation, USGS, NOAA, Air Force
▪ Attributes: Life Sciences, Human Performance, Satellite & Ground System Ops
Government Services | Major Lines of Business
8 | Investor Presentation
8.3%
9.7%
3Q17 3Q18
Adjusted EBITDA1
Margin
$10,342
$13,481$2,154
$3,748
3Q17 3Q18
Backlog
Reported Backlog
Priced, unexercised options
1. Adjusted EBITDA and Adjusted EPS reconciliations provided in the Appendix
Financial Snapshot | 3rd Quarter Highlights
$1,034
$1,278
3Q17 3Q18
Revenues
$0.35
$0.46
3Q17 3Q18
Adjusted EPS1
$28
$72
3Q17 3Q18
Operating Cash Flow
$86
$124
3Q17 3Q18
Adjusted EBITDA1▪ Revenue, Adjusted EBITDA and
Adjusted EPS growth fueled by industry
leading organic growth and strategic
acquisitions
‐ 59% growth in GS, 12% organic
‐ 35% growth in Technology, all
organic
▪ Strong margins and operating cash flow
▪ Long-term backlog with quality growth
opportunities
▪ Book-to-bill of 1.1x KBR overall
‐ 1.3x GS
‐ 1.4x Technology
$ in millions, except EPS; results for the quarter ended September 30, 2018
9 | Investor Presentation
10 | Investor
Presentation
1Q ‘17 AEPS $0.28
• Annual Guidance $1.10 to $1.40
2Q ‘17 AEPS $0.57
• Raised Guidance $1.25 to $1.45
3Q ‘17 AEPS $0.35
• Raised Guidance $1.35 to $1.50
4Q ‘17 AEPS $0.28
• Achieved AnnualResults - $1.48
1Q ‘18 AEPS $0.34
• Annual Guidance $1.35 to $1.45
2Q ‘18 AEPS $0.34
• Raised Guidance $1.40 to $1.50
3Q ‘18 AEPS $0.46
• Raised Guidance $1.45 to $1.55
Financial Snapshot | Seven Quarters of Consistent ResultsAdjusted Earnings Per Share Guidance and Results
Investor Presentation | KBR11
APPENDIX | Non-GAAP Reconciliations
12 | Investor Presentation
Full Year 2018$1.93 - $2.03
$ 0.06 $ 0.05 $ 0.07
($0.66)
$1.45 - $1.55
Quarter Ending
($ in millions, except EPS) Sep 30, 2017 Sep 30, 2018
Net Income Attributable To KBR $ 45 $ 58
Add Back:Interest expense $ 6 $ 20 Provision for income taxes $ 16 $ 22 Other non-operating (income) expense $ 4 $ 1 Depreciation & amortization $ 11 $ 17
Consolidated EBITDA $ 82 $ 118
Add Back:Legacy legal fees $ 4 $ 3 Acquisition & integration related expenses $ 0 $ 1 Aspire (gain) loss on consolidation $ 0 $ 2
Adjusted EBITDA $ 86 $ 124
EPS (diluted) $ 0.32 $ 0.41
Add Back:Legacy legal fees $ 0.03 $ 0.01 Acquisition & integration related expenses $ 0.00 $ 0.01 Amortization related to Aspire acquisition $ 0.00 $ 0.02 Aspire (gain) loss on consolidation $ 0.00 $ 0.01
Adjusted EPS $ 0.35 $ 0.46