of 24 /24
Bill Utt – Chairman, President, and CEO September 17, 2009 D.A. Davidson Eighth Annual E&C Conference

D.A. Davidson Eighth Annual E&C Conference · Health, Safety and Environment ... Gas Monetization – Gorgon LNG ¾Gorgon LNG Project Details ¾Kellogg Joint Venture Group (KJVG)

  • Author
    others

  • View
    2

  • Download
    0

Embed Size (px)

Text of D.A. Davidson Eighth Annual E&C Conference · Health, Safety and Environment ... Gas Monetization...

  • Bill Utt – Chairman, President, and CEO

    September 17, 2009

    D.A. Davidson Eighth Annual E&C Conference

  • Forward Looking StatementsThis presentation contains “forward-looking statements.” All statements other than statements of historical fact are, or may be deemed to be, forward-looking statements. Forward-looking statements include statements about the benefits of the split-off, the discussions of KBR’s business strategies and KBR’s expectations concerning future operations, profitability, liquidity and capital resources. You can generally identify forward-looking statements by terminology such as “anticipate,” “believe,” “continue,” “could,” “estimate,” “expect,”“forecast,” “goal,” “intend,” “may,” “objective,” “plan,” “potential,” “predict,” “projection,” “should” or other similar words. These statements relate to future events or future financial performance and involve known and unknown risks, uncertainties and other factors that may cause actual results, levels of activity, performance or achievements to differ materially from those in the future that are implied by these forward-looking statements. Many of these factors cannot be controlled or predicted. These risks and other factors include those described under “Risk Factors” in KBR’s Annual Report on Form 10-K dated February 25, 2009, Forms 10-Q, recent Current Reports on Forms 8-K, and other Securities and Exchange Commission filings. Those factors, among others, could cause KBR’s actual results and performance to differ materially from the results and performance projected in, or implied by, the forward-looking statements. As you read and consider this presentation, you should carefully understand that the forward-looking statements are not guarantees of performance or results. KBR cautions you that assumptions, beliefs, expectations, intentions and projections about future events may and often do vary materially from actual results. Therefore, KBR cannot assure you that actual results will not differ materially from those expressed or implied by forward-looking statements.

    The forward-looking statements included in this presentation are made only as of the date of this document. New risks and uncertainties arise from time to time, and KBR cannot predict those events or their impact. KBR assumes no obligation to update any forward-looking statements after the date of this presentation as a result of new information, future events or developments, except as required by the federal securities laws.

  • KBR – A Leading Global E&C Provider

    * For contracts that contain both fixed-price and cost-reimbursable components, KBR classifies the components as either fixed-price or cost-reimbursable according to the composition of the contract, except for smaller contracts that are characterized on the predominate component.

    » Revenue: Full Year 2008 - $11.6 Billion; 2008 Fortune 500 Company #234First Half 2009 - $6.3 Billion vs. First Half 2008 - $5.2 Billion

    » Backlog: 12/31/08 - $14.1 Billion (80% reimbursable / 20% fixed-price); June 30, 2009 - $12.3 Billion (79% reimbursable / 21% fixed-price)*

    » Headquarters in Houston, Texas

    » 100+ years of operating history

    » ~57,000 employees; 45+ countries

    » Extensive service capabilities:

    • Engineering, procurement, construction, commissioning, and start-up (EPC-CS) to global oil, gas, petrochemical, and infrastructure customers

    • Defense, logistics, and contingency support for defense services

    1

  • Our Aspiration: To be the world’s premier engineering, construction and services company

    To safely deliver any project, any time, in any environment for the benefit of our customers, shareholders, employees and the communities we serve.

    Uncompromising commitment to Health, Safety and Environment An open relationship with our employees based on mutual trust, respect and success Transparency, Accountability and Discipline in our business Best in class Risk Awareness Integrity in all we do Financial Responsibility to our stakeholders

    Mission Values

    2

  • KBR Operates in 45 Countries

    Edmonton

    Calgary

    Houston

    Monterrey

    Arlington

    MMM

    GreenfordLeatherhead

    Moscow

    Atyrau

    Baku

    Dubai

    CairoAlgiers

    Angola

    Lagos

    Johannesburg

    BaghdadKuwait City China

    SingaporeJakarta

    Perth

    Brisbane

    SydneyAdelaide Canberra

    Melbourne

    Gothenburg

    Abu Dhabi

    3

    Dhahran

  • Hydrocarbons

    Gas Monetization

    Oil & Gas

    Downstream

    Technology

  • Gas Monetization – Solid Market

    KBR Current Portfolio

    EPCm – Gorgon LNG; Skikda LNG; Pearl GTL

    EPC – Tangguh LNG; Yemen LNG; Escravos GTL

    FEED – Inpex Ichthys LNG

    Solid Market and Opportunities

    Pluto Train 2

    Segas Train 2

    5

    Gas Monetization provides pre-feasibility, front-end engineering and design (FEED), and engineering, procurement, and construction (EPC) and construction management (EPCm) services for large, complex liquefied natural gas and gas-to-liquids projects.

  • Gas Monetization – Gorgon LNG

    Gorgon LNG Project Details

    Kellogg Joint Venture Group (KJVG) – KBR led with 30% JV interest

    AUD $2.7 billion EPCm services for KJVG (app. US $2.3 billion)

    Three 5 MTPA LNG trains (modular construction strategy)

    Gas processing and treatment facilities

    Product storage and offloading

    Complete off-sites, utilities, and accommodations

    KBR to perform approximately 50% of project services, engineering, procurement, construction management, fabrication oversight, etc.

    Reimbursable with incentives

    Utilizes several fabrication yards across South East Asia and Australia

    Implementation of “World Class” Quarantine plan for environmental sensitive area

    6

  • Oil and Gas – Growing Opportunities

    KBR Current Portfolio

    North Rankin 2 Platform

    BP Chirag Oil Project

    Chevron Jack/St. Malo

    Chevron Lianzi

    Pazflor FPSO Topsides

    BP Quad 204 / West of Shetlands

    Global Project Opportunities

    Caspian, Asia Pacific, GOM, West Africa, North Sea, offshore Brazil

    Granherne / GVA Consultancy 7

    Oil and Gas provides field development, feasibility, and detailed engineering and design services for onshore and offshore production facilities and pipelines.

  • Downstream – From Prospects to Projects

    KBR Current Portfolio and Prospects

    Ras Tanura Integrated Project

    Yanbu Export Refinery

    PetroSA Coega Refinery FEED

    Sonangol Lobito Refinery FEED

    8

    Downstream serves clients in the petrochemical, refining, coal gasification, and syngas markets, executing EPC projects and providing program management consultancy throughout the world.

  • Technology – A KBR Differentiator

    KBR Technology Business Segment offers highly efficient, proprietary, and differentiated process technologies, some of which are the most efficient, value-added solutions available in the market for the coal monetization, petrochemical, refining and syngas markets.

    9

    KBR Technology Portfolio

    KAAPplus™ - Ammonia

    SUPERFLEX™ - Olefins

    ROSE© - Refining

    SCORE™ - Ethylene

    TRIG™ - Coal Gasification

    Various Fluid Catalytic Cracking processes

  • Government, Defense & Infrastructure

    U.S. Government and Defense

    International Government and Defense

    Global Infrastructure

  • U.S. Government & Defense – Building on Experience

    LogCAP III & IV

    Current LogCAP III status

    LogCAP IV transition status

    Positive Trends On Litigation

    Building on Experience

    AFRICAP – logistics, engineering and life support services in Africa

    AFCAP – LogCAP type work in Kuwait for U.S. Air Force

    National Science Foundation – logistics support program in Antarctica 11

    U.S. Government & Defense delivers on-demand support services, life sustainment services, and defense support infrastructure across the full military mission cycle and project program cycle for a diverse client base.

  • KBR Current Portfolio

    Allenby & Connaught

    Australian Defence construction projects

    CONLOG and TDA

    Market Opportunities

    U.K. MoD Afghanistan infrastructure projects

    U.K. MoD integrated fuel supplies management program

    Australian Defence Force program and construction management

    Outsourced military support and training in friendly Gulf region

    International Government & Defense

    12

    International Government & Defense provides support and life sustainment services, and defense support infrastructure for Non-U.S. clients across the globe.

  • KBR Current Portfolio

    Qatar-Bahrain Causeway

    Palm Island

    Yas Island

    Water projects

    Australian infrastructure

    Global road projects

    Global Infrastructure – Design/Build Expertise

    13

    Global Infrastructure serves diverse civil infrastructure markets, including recreational and commercial developments, transportation, waste and water treatment, and minerals throughout the world.

  • Power, Industrial and Commercial

  • Power

    Increased bidding activity

    Progress Energy Carolinas, Inc.

    Solid Waste Authority of Palm Beach

    Other projects in Georgia and Texas

    Industrial and Commercial

    Red River Activated Carbon plant

    Facility operations and maintenance

    Education and healthcare reasonably stable

    Canadian Operations

    Power, Industrial and Commercial

    15

  • KBR Corporate

  • 2007 2008 2009

    KBR – Strong Revenue Growth

    Most business units reported improved revenue in first six months of 2009 compared to 2008:

    Services up 388%

    Downstream up 18%

    Upstream up 17%

    Technology up 2%

    G&I down 3%

    BE&K acquisition was the main contributor within the Services business unit

    2007 2008 2009Six Months Ended June 30,

    $4.2B

    $5.2B

    $6.3B

    + 24%

    + 22%

    17

  • 2007 2008 2009

    KBR – Improving Job Income and Margins

    18

    2007 2008 2009Six Months Ended June 30,

    $348M

    $457M

    $539M

    + 31%

    + 18%

    8% 9% 9%

    * Note – Percentages represent job income margins

    First quarter 2008 included $51 million gain on a favorable arbitration award

    Job income growing with revenue

    Margin improvement

    Benefits from better profitable projects under new management

    Zero or lower margin legacy projects completed or nearing completion

    Enhanced focus on risk management and execution

  • KBR – Quality of Earnings

    19

    8% 9% 9%

    Potential disallowed costs for U.S. contracts for Middle East work

    Charges on Skopje Embassy in Macedonia in (multiple quarters)

    Impairment charges on BRC joint venture in Algeria

    Gain on sale of BRC joint venture in Algeria

    Lease restructuring

    U.K. Road project settlement

    Charges on Skopje Embassy in Macedonia (multiple quarters)

    PEMEX arbitration awards

    Unfavorable jury verdict from ASCO litigation (partially reversed)

    LNG reduction in profits on timing of change orders (later resolved)

    FCPA charges

    Increased costs on EBIC project due to equipment failure

    Unfavorable arbitration decision related to the In Amenas project

    FY 2007

    FY 2008

    First Half 2009

  • 2007 2008 20092007 2008 2009Quarter Ended June 30,

    $9.6B

    $12.6B$12.3B

    + 31%

    - 2%

    No material project cancellations;

    Second quarter 2009 impacted by LogCAP III task order extension timing and usual project work-off

    Improved portfolio mix* (cost reimbursable to fix priced)

    Q209 – 79% / 21%; respectively

    Q208 – 76% / 24%; respectively

    Q207 – 71% / 29%; respectively

    Solid Backlog & Portfolio Risk Profile

    20

  • Prudent Financial Management & Focus

    Returning Cash to Shareholders

    Share repurchase program - $217 million since August 2008

    Quarterly dividend – approximately $32 million per year

    Balance Sheet Strength for Growth

    Strong cash position - $1.1 billion as of June 2009

    Debt free

    Bonding capacity capabilities

    Continued Focus on Cost Saving Initiatives

    Scaling back costs through out organization

    Lowered FY 2009 G&A – currently expect approximately $230 million for FY09

    21

  • We Deliver