D.A. Davidson 12 th Annual Engineering & Construction Conference

Transcription

1 D.A. Davidson 12 th Annual Engineering & Construction Conference Sue Carter Executive Vice President and CFO Ivor Harrington Group President, Gas Monetization Zac Nagle Vice President, Investor Relations & Communications September 11, 2013

2 Forward Looking Statements 2 This 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 forwardlooking 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 20, 2013, 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. Note: All financial statements reflected in this presentation are as of KBR s 2Q13 earnings conference call on July 26, 2013

3 KBR A Leading Global E&C Provider Revenue: Full Year $7.9 Billion Backlog: June 30, $13.8 Billion Headquarters in Houston, Texas ~27,000 employees; 70+ countries KBR is a global engineering, construction, and services company supporting the energy, hydrocarbons, power, industrial, civil infrastructure, minerals, government services and commercial markets. 3

4 KBR s Global Footprint Edmonton Ontario Calgary Salt Lake City Charlotte Raleigh Birmingham Wilmington Arlington Atlanta Monterrey Houston Mobile MMM Gothenburg Greenford Leatherhead Frankfurt Algiers Baku Baghdad Dammam Dhahran Moscow Atyrau Kuwait City Doha Dubai Abu Dhabi New Delhi Beijing Lagos Luanda Singapore Jakarta Rio De Janeiro Buenos Aires Johannesburg Perth Brisbane Adelaide Sydney Canberra Melbourne 4

5 KBR s Four Business Groups Gas Monetization Gas Monetization LNG FLNG GTL Hydrocarbons Oil & Gas Offshore Onshore Pipelines FLNG Downstream Refining Petrochemicals Biofuels Fertilizers Technology Refining Petrochemicals Syngas Coal Gasification Infrastructure, Government & Power N.A. Government & Logistics U.S. Federal Government Department of Defense International Government, Defence & Support Services U.K. Ministry of Defence Middle East Asia Pacific (APAC) Infrastructure Transportation Water / Wastewater Facilities Minerals Coal, Iron Ore Base Metals Material Handling Power & Industrial Power Pulp & Paper Industrial Manufacturing Construction Refining Chemicals Oil & Gas Power Services Canada Operations Oil Sands Mining Gas Treating Building Group Life Sciences and Education Government Buildings Healthcare General Industrial & Aerospace Food & Beverage Industrial Services Refining & Chemicals Oil & Gas Power Pulp and Paper 5

6 Gas Monetization Current Gas Mon Projects Progressing Well Gorgon LNG Trains 1-3 Skikda LNG Escravos GTL Ichthys LNG Opportunity for GTL in the U.S. Active discussions with a customer and believe the project could reach FEED in 2013 Strong Pipeline of LNG Projects and Prospects Gorgon Train 4 Pre-FEED with expected FEED transition, then EPCm Kitimat FEED and EPC Tanzania pre-feed Recently awarded Petronas LNG FEED and EPC bid Bid preparation for Tangguh Train 3 FEED and EPC bid 6

7 Hydrocarbons 7 U.S. Shale Gas Opportunities Awarded an EPC contract for an ammonia plant in excess of $250 million to be constructed in North America Awarded ~$600 million Dyno Nobel ammonia EPC and technology project in Louisiana Awarded ~$100 million for EPC for two new ethylene furnaces using KBR s SCORE technology Awarded FEED for high-density polyethylene project for INEOS Working on FEED for fertilizer complex for Ohio Valley Resources Design, construction and technology for ethylene furnace for INEOS Middle East Remains Robust for Downstream KBR-AMCDE joint venture increasing work volumes Sadara Petrochemical Complex PMC Yanbu Export Refinery Jazan Refinery FEED for Gasifier unit Growth in Technology Continue to see strong bookings across portfolio of technologies, including ammonia, VCC, and ethylene 47% job income growth in 2Q13, year-over-year Doubled headcount in offices during 2011 in Beijing, China and Delhi, India Strong suite of technologies: Advanced Catalytic Olefins (ACO ) Veba Combi-Cracker (VCC) Transport Gasifier (TRIG ) Selective Cracking Optimum Recovery (SCORE ) Ammonia Technology (Purifier ) Expanding Share of Wallet for Oil & Gas Expansion opportunities at Shah Deniz 2 project in Caspian for EPCm for both onshore and offshore FLNG Opportunities FLNG Study for Hoegh LNG; GDF SUEZ Bonaparte

8 Services Canada Operations Strong across variety of markets: Turnarounds / maintenance Module fabrication Construction projects in Alberta Oil Sands Gas processing projects in Western Canada Client camp support Steam-assisted gravity drainage (SAGD) Booked approximately $1 billion in backlog in 2012 Recently awarded: 3-year turnaround services contract for Suncor Energy s refinery in Edmonton, AB, Canada Off-site modularization and pipe fabrication for Shell Canada s Quest Carbon Capture and Storage project Job income up 137% in 2Q13 versus year-ago period Industrial Services Steady and consistent performance Successful expansion into Saudi Arabia with SATORP to provide maintenance services at its Jubail refinery over the next seven years Building Group Challenging but stabilizing business environment Project awards grew 50% in 2012 compared to 2011 Stronger multi-family residential and industrial manufacturing markets U.S. Construction 3 Gulf Coast projects execution consistent with project provisions taken in fourth quarter 2012 Bidding only reimbursable work for construction only projects 8

9 Infrastructure, Government & Power 9 North American Government & Logistics Slower award environment due to government budget uncertainties and sequestration Awarded $134 million contract for land-based missile defense facilities in Romania Awarded $127 million contract for Djibouti Base Operations Services Diverse portfolio of pursuits (U.S. Army, Navy, and Air Force, Army Corps of Engineers, Department of State) International Government, Defence & Support Services Recently awarded contract by the London Mayor s Office for Policing and Crime to provide facilities management integrator services Additional opportunities to expand services to other Metro London and U.K. policing departments Diversification strategy from contingency operations Training (military and non-military) Expeditionary life support services Back office services Equipment facilitation Power & Industrial Air quality & combined cycle opportunities still strong Awarded EPC for $460 million Ghent Baghouse project for Kentucky Utilities Currently have several multi-$100 million projects out for bid or anticipate bidding in 2013 Infrastructure Expanded opportunities in Middle East market (Qatar, Saudi Arabia, Oman, UAE and Iraq) Slower spending for government-sponsored projects in Australia and the United States Minerals Challenged environment relative to new opportunities Several early-stage studies in progress

10 Well Positioned for North America LNG and GTL Opportunities British Columbia, Canada Kitimat FEED and EPC Recently awarded Petronas LNG FEED and EPC bid In discussions on another potential LNG project United States Active discussions on GTL projects; advanced discussion with one customer on a proposed GTL facility that could reach FEED in 2013 KBR s experience on 2 of the 3 world-class GTL facilities positions KBR well (Pearl GTL and Escravos GTL) Advanced discussions on one pending LNG EPC Maintaining dialogues with other LNG developers Technology Awards & Opportunities 3 ammonia Purifier technology awards over the past year Tracking approximately 10 ammonia/urea prospects Tracking approximately 5 ethylene prospects Downstream Awards & Opportunities Awarded an EPC contract for an ammonia plant in excess of $250 million to be constructed in North America Awarded ~$600 million Dyno Nobel ammonia EPC and technology project in Louisiana Working on FEED for fertilizer complex for Ohio Valley Resources Awarded ~$100 million EPC contract for two new ethylene furnaces using KBR s SCORE technology Design, construction and technology for ethylene furnace for INEOS in Texas Four ammonia-related EPC and three ethylene-related EPC prospects potentially in 2013 Several refining and biofuel prospects in 2013 Power Awards & Opportunities Awarded EPC for $460 million Ghent Baghouse project for Kentucky Utilities Currently have several multi-$100 million projects out for bid or anticipate bidding in

11 21 KBR Financials and Backlog

12 2Q13 Earnings Review - KBR Revenue at $2.0 billion, down 3%,year-over-year Job income margins of 14.7% compared to 13.1%, year-over-year Business Group income of $203 million, up 9%, year-over-year Operating income of $123 million, down 5%, year-over-year Corporate G&A of $63 million compared to $52 million, year-over-year Earnings per diluted share of $0.61 compared to $0.70, year-over-year Cash and equivalents of $800 million compared to $824 million, year-over-year Backlog of $13.8 billion compared to $15.2 billion, year-over-year Backlog book-to-bill of 1.1x in 2Q13 (excluding $611 million negative FX impact) FY13 earnings per diluted share guidance revised to $2.55 to $2.90 (from $2.45 to $2.90) 12

13 Backlog Performance Index /30/2013 Revenue Backlog Continued focus on job income backlog: Job Income Backlog Down 11% from December 31, 2012 Up 87% since December 31,

14 Job Income Margins Improving 15.0% 12.2% 12.8% First Six Months 2011 First Six Months 2012 First Six Months

15 Strong Corporate G&A Cost Control $250 $240 $230 Corporate G&A $ in Millions $220 $210 $200 $190 $180 $170 $160 $ Guidance* *Note: For illustrative purposes, 2013 Guidance reflects mid-point of corporate G&A guidance of $230 million to $240 million, which includes $40 million expected ERP spend (per 2Q13 guidance update to ERP spend expected at top end ERP Spend of guidance range of $30 million to $40 million ) 15

16 Investment Thesis Fundamentally strong, global growth company with diverse portfolio of businesses Well positioned for growing opportunities in North America Multiple platforms for acceleration of new orders across global end markets; strategically placing bets on a number of large opportunities through 15 active pre-feeds and FEEDs Driving higher job income and job income margins in the P&L and backlog Strong focus on corporate G&A cost control and tax planning Patience, prudence and discipline in managing KBR s businesses 16

17 Proud History