Capital One Southcoast 4th Annual Energy Conference

Transcription

1 Capital One Southcoast 4th Annual Energy Conference Sue Carter Senior Vice President and CFO John Rose, President Hydrocarbons Group December 9, 2009

2 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 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 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.

3 KBR Organizational Structure in 2006 Chief Executive Officer Corporate Energy & Chemicals Government & Infrastructure Finance Administration Legal 1

4 KBR Proposed Organizational Structure in 2010 Chief Executive Officer Corporate Hydrocarbons Services Government, Defense, & Infrastructure; Power & Industrial Finance Gas Monetization Buildings Group N. America G&D Administration Legal Operations Oil & Gas Canada Operations International G&D Downstream Construction Infrastructure & Minerals Technology O&M Power & Industrial Commercial Ventures 2 Fabrication

5 LogCAP Strategically Replacing Income Incremental Revenues to Replace LogCAP Volumes LogCAP* Today Hydrocarbon, Services, or Other G&I Future** Revenue ~ $5B Margin ~ 2.4% Income ~ $120M Revenue Range ~ $1B - $2B Margin Range ~ 6-12% Income ~ $120M Focus on Prospective Income Drivers * LogCAP margins and income figures represent task orders excluding overhead recoveries ** Revenue, margins, and job income figures are for illustrative purposes and do not necessarily reflect future results 3

6 Growing KBR s Prospects to Projects Gas Monetization Expansion trains at existing or ongoing projects EPC/EPCm after FEED work Australian LNG opportunities Gorgon LNG EPCm Skikda LNG EPC Tangguh LNG EPC Inpex Ichthys LNG FEED Pluto 2/3 LNG FEED Oil & Gas Expanded work from FEEDs PMC opportunities Geographical expansion Expand capabilities to procurement services and construction management 4 Big Foot Offshore FEED West of Shetlands FEED Jack/St. Malo Pre-FEED Chirag Platform FEED Various FPSO projects

7 Growing KBR s Prospects to Projects Downstream PMC growth at existing projects PMC/EPC/EPCm after FEED work Leverage technology for expanded opportunities Services Grow BE&K acquired capabilities (domestically & internationally) Strengthen & build power business Broaden Canada services G&I Build on LogCAP expertise UK, Australian, and other defense opportunities PMC / Global infrastructure 5 Ras Tanura Integrated Project Yanbu Export Refinery African Refinery FEEDs NA Construction & Buildings Power & Industrial / O&M Canada / Fabrication Wabi acquisition LogCAP III & IV Allenby & Connaught Qatar / Bahrain Causeway

8 Job Income Growth Excluding LogCAP $546M +15% $627M +44% $379M $193M $193M $183M Nine Months Ended September 30, ME Operations Job Income 6 KBR excluding ME Operations Job Income

9 KBR Corporate

10 Strong Balance Supports Functional Options 9/30/09 ($ in millions) Available Cash $ 1,020 Cash Associated with JVs & Projects 205 Discretionary Cash $ 815 Acquisitions Share Repurchases Dividends Reinvest in Existing Business 8

11 Working Capital Management Focused on reducing general business accounts receivable Managing accounts payable Resolution of unbilled receivables on uncompleted contracts Collecting on past disputes (EPC 1) Government Business As LogCAP work declines, less working capital requirements Diligently working to resolve disputed withhold amounts 9

12 Best in Class Risk Management & Awareness Business Development Oversight Identification Measurement Analysis Pricing Management Reporting Risk Management & Reporting Commercial Legal Technical Financial Execution 10

13 Prudent Financial Management & Focus Growth* KBR Revenue 44% SG&A Comparison Peer Average SG&A*** 6.4% KBR SG&A** 4.8% KBR SG&A** 14% * Compares growth from first nine months ended 2007 compared to first nine months ended 2009 ** KBR SG&A represents corporate general and administrative expenses and all Business Unit overheads; *** Peer group consists of JEC, FWLT, MDR, CBI, and SHAW, as these firms report SG&A and not G&A only 11

14 Presentation Summary Greater transparency into the KBR organization for stakeholders Strategically replacing declining LogCAP work with other business opportunities Strong balance sheet with emphasis on cash management Prudent management focus on risk management and controlling overhead costs 12

15 We Deliver