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kbr CreditSuissePresentation
 

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    kbr CreditSuissePresentation kbr CreditSuissePresentation Presentation Transcript

    • Credit Suisse 2008 Engineering and Environmental Services Conference Bill Utt – Chairman, President, and CEO June 5, 2008
    • Forward-Looking Statements 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 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 26, 2008, final prospectus for its exchange offer dated March 27, 2007, 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 Engineering & Construction Provider FY 2007 Revenue: $8.7 Billion; EPS $1.79 (diluted) 89% International / 11% Domestic Downstream Backlog at 3/31/08: $13.4 Billion 76% cost-reimbursable / 24% fixed-price * Government & Infrastructure Headquarters in Houston, Texas 100+ years of operating history Services ~52,000 employees (~5,000 engineers) 45+ countries Technology Extensive service capabilities: Engineering, procurement, construction, Upstream commissioning and start-up (EPC-CS) to global oil, gas, petrochemical, and infrastructure customers Defense, logistics, and contingency support for Ventures defense services * 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. 1
    • Upstream Business Unit Key Projects Strategic Growth Opportunities Pearl GTL Maintain and expand gas monetization leadership Escravos GTL Yemen LNG Expand Onshore/Offshore oil and gas opportunities Tangguh LNG Skikda LNG Leverage consulting expertise Kashagan work North Rankin 2 Continue to enhance engineering and technical Pazflor FPSO Topsides capabilities to meet expected future market growth Pluto Production Platform $7.0 $6.0 + 65% Backlog ($ billions) $5.0 $4.0 $3.0 $2.0 $1.0 $- Q106 Q107 Q108 2
    • Government & Infrastructure Business Unit Key Projects Strategic Growth Opportunities LogCAP III Leverage capabilities and proven track record to capture more design and construction work for LogCAP IV (Awarded) federal, state, and local governments Allenby & Connaught CENTCOM Portfolio diversification among defense services CONLOG and non-defense branches of the U.S. Hope Downs DES Government Scottish Water International geographic diversification among defense services $6.0 - 14% $5.0 Backlog ($ billions) $4.0 + 181% $3.0 + 2% $2.0 + 122% $1.0 $- Q106 Q107 Q108 Other Governm ent & Infrastructure Middle East Operations 3
    • Services Business Unit Strategic Growth Opportunities Key Projects Grow domestic construction capability through organic Scotford Upgrader growth and acquisitions Expansion North West Upgrader Expand industrial services product offerings and projects geographic footprint Bassell chemical plants Texas Instruments Expand and capture Canadian Oil Sands opportunities Campuses project Air Products Hydrogen facility Leverage existing Canadian fabrication capabilities to broaden scope of work supplied on KBR projects MMM Vessels business $900 $800 Backlog ($ millions) $700 $600 + 208% $500 $400 $300 $200 $100 $- Q106 Q107 Q108 4
    • Downstream Business Unit Key Projects Strategic Growth Opportunities Ras Tanura Integrated Continue leadership in Program Management Project Consultancy (PMC) Yanbu Export Refinery Saudi Kayan Capitalize on growing end markets Ethylene/Olefins facility EBIC Ammonia plant Leverage in-house and third party technology for MAN Ferrostaal AC expanded opportunities Ammonia plant Emerging market focus $600 $500 Backlog ($ millions) $400 - 42% $300 $200 $100 $- Q106 Q107 Q108 5
    • Technology Business Unit Key Projects Strategic Growth Opportunities SUPERFLEX™ - Sasol SA Leverage intellectual property assets KAAP™ - MAN Ferrostaal Ammonia plant Increase pull-through opportunities based on SCORE™ - Lanzhou China technology plant Ningbo Wanhua Capitalize on licensing opportunities Polyurethanes Company aniline plant Continue to invest in research and development $120 $100 Backlog ($ millions) + 9% $80 $60 $40 $20 $- Q106 Q107 Q108 6
    • Ventures Business Unit Strategic Growth Opportunities Key Projects Invest capital and development expertise for pull- Aspire Defence – Allenby & through service opportunities Connaught investment EBIC Ammonia project investment Make/manage equity investments on a stand-alone basis Alice Springs-Darwin railway project investment Various road projects Investment accountability independent of services investments provided Reduce portfolio merchant risk profile $800 $700 + 17% Backlog ($ millions) $600 $500 $400 $300 $200 $100 $- Q106 Q107 Q108 7
    • KBR Investment Thesis “Go To” Contractor “Best-in-Class” Risk Awareness Improving Financial Performance Focus on Safety Strategic Uses of Cash 8
    • “Go To” Contractor Skikda LNG; Tangguh LNG; Yemen LNG; EBIC Ammonia Project EPC / EPCm Yanbu Export Refinery; LogCAP III & IV; Pearl GTL; Ras Tanura; Lo D CONCAP; CONLOG; Multiple LNG Projects; E gis FE AFCAP; CENTCOM; ti cs EXECUTION ns n / in g Co esig ult PM North Rankin 2; D C Pluto Offshore Platform; Ras Tanura; Pearl GTL; Pazflor FPSO Topsides; Kashagan Trans Caspian Oil & Gas Study Technology ROSE™; SUPERFLEX™; SCORE™; KAAP™; TRIG™ 9
    • “Best-in-Class” Risk Awareness Identification Commercial Risk Analysis Measurement Technical Risk Pricing Legal Risk Management Reporting 10
    • Improving Financial Performance Recurring Business Unit Income* KBR Total Backlog $13.4B $168M $10.7B + 25% $129M + 30% $117M $8.0B + 34% + 10% 6.7% 6.4% 5.7% Q106 Q107 Q108 Q106 Q107 Q108 Recurring Business Unit Incom e* KBR Backlog Percentages in boxes represent Recurring Business Unit Income Margins * See Appendix for GAAP reconciliation 11
    • Focus on Safety 1.00 0.90 Construction Industry Institute Rates 0.83 2006 CII Recordable Rate 0.56 0.80 2006 CII Lost Time Rate 0.22 0.70 Incident Rate 0.60 0.53 0.50 0.41 0.40 0.30 0.24 0.19 0.20 0.15 0.10 0.00 2006 2007 YTD 2008 Total Recordable Incident Rate Total Lost Time Incident Rate Recordable Incident Rate LogCAP III Portion)Time Incident Rate Lost (Shaded Areas Represent 12
    • Balance Sheet Supports Growth Opportunities Strategic Uses of Cash Opportunistic Equity Investments in Acquisitions Projects Technology Investments / Return Capital to Acquisitions Shareholders KBR Cash at 3/31/08 ($ in millions) Total Cash & Equivalents 1,927 Cash Associated with JVs 358 Advanced Payment on a KBR Project* 231 LogCAP III Working Capital Requirements ~300 Operating Cash Requirements ~100 Discretionary Cash 938 Announced Acquisition of BE&K, Inc. ~550 * Advanced payments associated with a contract being executed by a wholly-owned subsidiary of KBR. 13
    • Investment Highlights Global Compelling Market Growth Leader Opportunities Best-in-Class Stringent Risk Technical Management Expertise Improving Blue-Chip Financial Client Base Profile Strong Balanced Project Management Portfolio Team 14
    • Appendix - GAAP Reconciliation Q106 Q107 Q108 Total Business Unit Revenue $ 2,056 $ 2,027 $ 2,519 Total Recurring Business Unit Income $ 117 $ 129 $ 168 Items included in Business Unit Income Government & Infrastructure Barracuda Additional Charge (15) - - Skopje Embassy Provision - (1) (12) Upstream Brown&Root-Condor SPA Impairment - (20) - Pemex Arbitration Gain - - 51 Ventures ASD Impairment (26) - - Total Items included in Business Unit Income (41) (21) 39 Total Business Unit Income (GAAP) $ 76 $ 108 $ 207