Credit Suisse 6th Annual Industrials Conference...8.3% 9.7% 3Q173Q18 Adjusted EBITDA1 Margin $10,342...

Credit Suisse 6th

Annual Industrials Conference

November 28, 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


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



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


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


3Q ‘18 AEPS $0.46


Business Overview | Seven Quarters of Consistent ResultsAdjusted Earnings Per Share Guidance and Results

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


Segment GP+EE margin

Government

Services9%

Heavy mix of internationally funded contracts; well-balanced U.S. portfolio

Top-tier space services provider; blue chip logistics and mission support

Technology 28% Expansion of contract values through increased breadth of offerings

Attractive operating cash flows with negative working capital

Hydrocarbons

Services12%

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

Consistent execution and project delivery

Financial Overview | 2018 Results to Date

1. Gross Profit and Equity Earnings (GP+EE) proportion percentages exclude results of KBR’s Non-strategic Business segment

GS57%Tech

16%

HS27%

GS69%

Tech6%

HS25%

$3.6 B $387 M 10.8%

Revenue GP+EE 1

Healthy 11% year-over-year revenue growth

‐ 51% growth in GS; industry-leading 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

Ending Stock Price $21.00 $23.00 $25.51 $30.00 $32.00 $35.00 $40.02 $43.00 $45.00 $50.00 $55.00 $60.00

Premium to Current 5% 15% 27% 50% 60% 75% 100% 115% 125% 150% 175% 200%

Total Shares Issued (1) 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.95 1.52 2.74 3.74 4.57

% of Shares Outstanding (1) 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.7% 1.1% 1.9% 2.7% 3.2%

0.00 0.00 0.00 0.00 0.00 0.00 0.00

0.95

1.52

2.74

3.74

4.57

0.00

1.00

2.00

3.00

4.00

5.00

Net

Sh

ares

Issu

ed (m

ms)

Net Shares Issued Upon Conversion

____________________1. Assumes ~140.9M shares outstanding. See reconciliation of GAAP and non-GAAP Total Shares Issued in the Appendix.

New Convertible + Call Spread

Transaction Details Proactively Managing Dilution

2 Methods of Dilution Protection

Call Spread Overlay:

– KBR entered into a bond hedge and warrants transaction to mitigate dilution until the stock price increases above 100% of the current price

Net Share Settlement

– KBR intends to settle conversions in cash for the par amount of bonds outstanding and any additional value in net shares

Gross / Net Proceeds & Tax Benefit: $350M / $316M

Stock Price at Issue: $20.01

Conversion Premium / Price: 27.5% / $25.51

Upper Strike / Price: 100.0% / $40.02

5-Year Maturity: 2023

Coupon / Pre-Tax Equivalent Yield: 2.5% / 4.74%

1

2

Conversion Price

Upper Strike100% above Stock

Price at Issue

Restores availability and LC capacity

for growth

Actively mitigates potential dilution

with bond hedge and warrant

transactions (100% premium)

Reduces cash interest rate to <5%

Increases fixed-to-float debt

Improves secured to unsecured mix

Intent to settle the principal in cash

Closed November 15, 2018

Economic Share Issuance Upon Conversion


Financial Overview | Convertible Senior Notes Due November 2023

Strong execution delivering solid earnings

Healthy backlog and BTB

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

Strong balance sheet and liquidity to enable growth

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

Final Thoughts


Investor Presentation | KBR10

APPENDIX | Non-GAAP Reconciliations


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

Ending Stock Price $21.00 $23.00 $25.51 $30.00 $32.00 $35.00 $40.02 $43.00 $45.00 $50.00 $55.00 $60.00

GAAP Convertible Shares 0.00 0.00 0.00 2.05 2.78 3.72 4.97 5.58 5.94 6.72 7.35 7.89

GAAP Warrant Shares 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.95 1.52 2.74 3.74 4.57

Total GAAP Diluted Shares 0.00 0.00 0.00 2.05 2.78 3.72 4.97 6.53 7.46 9.46 11.09 12.45

Less: Impact of Bond Hedge - - - -2.05 -2.78 -3.72 -4.97 -5.58 -5.94 -6.72 -7.35 -7.88

Economic Shares Issued 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.95 1.52 2.74 3.74 4.57

Appendix | Non-GAAP Reconciliations


Reconciliation of GAAP Diluted Share to Economic Share Issuance Upon Conversion

Credit Suisse 6th Annual Industrials Conference...8.3% 9.7% 3Q173Q18 Adjusted EBITDA1 Margin $10,342...

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