Baird 2018 Global Industrial Conference · 8.3% 9.7% 3Q17 3Q18 Adjusted EBITDA 1 Margin $10,342 $13,481 $2,154 $3,748 3Q17 3Q18 Backlog Reported Backlog Priced, unexercised options

Baird 2018 Global Industrial Conference

November 8, 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 Services

Enduring Customer Base

Attractive Domestic and International Mix

Industry-leading Safety Record

Technical Differentiation

Disciplined 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+ People

40+ Countries


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

Business Overview | QTD 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


Government Services

Serving government customers globally with capabilities that cover the full lifecycle of defense, space, aviation and other government programs and missions

Technology Proprietary technology and solutions primarily focused on the monetization of gas in ethylene and petrochemicals; ammonia, nitric acid and fertilizers; and refining

Hydrocarbons Services

Serving blue chip oil and gas clients globally with full lifecycle solutions across onshore oil and gas, LNG/GTL, oil refining, petrochemicals, chemicals and fertilizers

Business Overview | YTD Results

1. Revenue and GP+EE proportion percentages exclude results of KBR’s Non-strategic Business segment

GS

57% Tech

16%

HS

27%

GS

69%

Tech

6%

HS

25%

$3.6 B $387 M 10.8%

Revenue GP+EE 1

Strong YTD performance in 2018

Healthy year-over-year revenue growth

‐ 51% growth in GS, 11% organic

‐ 10% growth in Technology, all organic

30 bps improvement in YTD GP+EE margin driven by strong execution, favorable project close-out and quality equity earnings


Year to date results through September 30, 2018

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 opportunities with best value selections Bundling of procurements favors scale and broad capability

Technology Growing demand for petrochemical, refining and agricultural technologies Low-priced, plentiful feedstock Regulatory mandates are driving demand


Strong momentum across the maintenance market Recovering CapEx markets Increasing momentum for LNG and petrochemical projects 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 | Market Outlook


GS Overview | Growing Business, Balanced Portfolio

1. Revenue includes KBR share of unconsolidated JVs; 2017 pro forma revenues, includes Aspire and SGT in the International and NASA buckets, respectively.

Industry leading 11% organic growth in 2018

Heavy mix of international profit and cash flow contribution

Well-balanced U.S. government services portfolio

Top tier space services provider

Blue chip logistics and mission support

15%

14%

15%22%

34%

International

NASA & Other

US

2018 Government Services Revenue Profile 1

DoD

OCO

O&M

RDT&E

$3.7B 2018 forecast revenue1

Upper single % GP+EE margin

Highly technical and professional services across multiple customers; diverse and recurring funding streams, primarily through long-term reimbursable contracts that span the procurement lifecycle


Technology Overview | Strong Business, Strong Margins

Technology delivers growth and balance in earnings at relatively low risk with potential for selective HS pull-through

Healthy 10% organic growth in 2018

Attractive operating cash flows and negative working capital

Expansion of contract values through increased breadth of offerings across license, engineering services, proprietary equipment and catalyst

Strong demand for petrochemical technologies in feedstock advantaged territories (e.g., North America, Russia and Middle East) and in high growth consumer markets (e.g., China and India)

Increasing demand for refining technologies driven by changing regulatory mandates (e.g., IMO 2020)

64% 27%

9%

License &

Engineering Proprietary

Equipment

Catalyst

2018 Technology Revenue Profile

$0.3B 2018 forecast revenue

Mid 20s % GP margin


10%

34%

42%

14%

HS Overview | Well Positioned for CapEx Recovery

Healthy, growing maintenance and industrial services, both domestic and international

Robust pipeline of opportunities driven by LNG supply / demand rebalance, demand for petrochemicals and abundant supply of competitively priced feedstock

Consistent execution and project delivery

Diverse Tier 1 customer base

Upstream

LNG

Downstream

Other

Growing base business, breakout growth opportunities represent significant upside potential

2018 Hydrocarbons Services Revenue Profile 1

1. 2018 forecast revenues; includes KBR share of unconsolidated JVs.

$2.3B 2018 forecast revenue1

Mid to upper single % GP+EE margin


Financial Overview | 2018 Earnings Guidance

Full Year Guidance

Adjusted EPS1

Excludes • Estimated Legacy Legal fees • Acquisition & Integration related expense • Amortization related to Aspire acquisition • Aspire gain on consolidation

$1.45 - $1.55

Effective Tax Rate 23% - 25%

Operating Cash Flow $125M - $175M

1. See Appendix for reconciliation from GAAP

Increased EPS and Adjusted EPS guidance in 2Q 2018 and again in 3Q 2018

Good market fundamentals across the government and hydrocarbons industries


Strong execution delivering solid earnings

Healthy backlog and BTB

Favorable tailwinds across Government Services, Technology and Hydrocarbons Services

Growing confidence in the restoration of LNG and downstream capital investment cycles, especially in the US and Middle East where KBR is well positioned

Pipeline of near-term pursuits in each segment affords significant growth opportunities and a disciplined risk approach

It’s a great time to be part of the “new” KBR!

Final Thoughts


Investor Presentation | KBR 12

Appendix | KBR Backlog

Note: Includes KBR share of unconsolidated JVs

Healthy, growing pipeline of near-term pursuits

Quality backlog allows selectivity in EPC bidding

Backlog excludes priced, unexercised options

‒ Current estimate of $3.7B in potential value as of September 30, 2018


Technology

Government Services

$7.7 $7.9 $8.2 $8.4

$11.1 $10.8 $11.0

$0.3 $0.3 $0.2

$0.4

$0.4 $0.6 $0.6

$2.6 $2.1 $1.9 $1.8

$1.7 $2.1 $1.9

1Q17 2Q17 3Q17 4Q17 1Q18 2Q18 3Q18

KBR Backlog Trend, by Segment

$10.6 $10.3 $10.3 $10.6

$13.2 $13.5 $13.5


APPENDIX | Non-GAAP Reconciliations

Sep 30, 2017 Sep 30, 2018

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

Quarter Ending

Guidance FY 2018

EPS (diluted) $1.93 - $2.03

Add Back:

Legacy legal fees $ 0.06

Acquisition & integration related expenses $ 0.05

Amortization related to aspire acquisition $ 0.07

Aspire gain on consolidation ($0.66)

Adjusted EPS $1.45 - $1.55


Documents

Baird 2018 Global Industrial Conference · 8.3% 9.7% 3Q17 3Q18 Adjusted EBITDA 1 Margin $10,342 $13,481 $2,154 $3,748 3Q17 3Q18 Backlog Reported Backlog Priced, unexercised options