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Analyst Day – Kbr, Inc.

Kbr, Inc. · Dec 11, 2014 · 65 slides

Investor presentation from the Shale Experts oil & gas presentation and slide database. Every page is imaged and its text indexed for search across operators, plays, basins and time.

Slides

  1. Analyst Day – Kbr, Inc. – slide 1
    KBR Analyst Day December 11th 2014
  2. Analyst Day – Kbr, Inc. – slide 2
    Safety 2014 KBR TRIR* Driving to Zero Harm 0.45 Clear and consistent Health, Safety, Security and Environment (HSSE) messaging from 0.40 0.39 Senior Management in town halls and 0.36 videos 0.35 0.34 0.32 Structured HSSE Campaign…
  3. Analyst Day – Kbr, Inc. – slide 3
    What You Will Hear Today KBR has a solid base business (good bones), but Going forward, focus will be on differentiated offerings in core markets / clients with emphasis on global sales, commercial rigor and consistent delivery We…
  4. Analyst Day – Kbr, Inc. – slide 4
    Strategic Priorities Priority Markets Early project involvement Global Hydrocarbons & via specialized International Government consultancy services Services (Granherne/GVA) 1 2 Re-focus Growth Strategy 3 4 Pursue Fixed…
  5. Analyst Day – Kbr, Inc. – slide 5
    Framework to Support Core Focus Exit non-strategic businesses: - Stand-alone Fixed Price EPC Power Businesses still under review: - Fixed Price U.S. Infrastructure & - Considering options for U.S. military U.S. Minerals support…
  6. Analyst Day – Kbr, Inc. – slide 6
    Structure Streamlined / Focused Current operating segment structure (16 business units) KBR Infrastructure, Gas Hydrocarbons Government & Services Operations Monetization Power New streamlined operating segment structure (5…
  7. Analyst Day – Kbr, Inc. – slide 7
    Strategic Overview Old KBR New KBR Targeted Industries: Focus on Core Industries: Hydrocarbons Hydrocarbons Government EPC Power International Government Fixed Price U.S. Infrastructure U.S. Minerals Building Group Fixed Price…
  8. Analyst Day – Kbr, Inc. – slide 8
    Business Leaders Here Today Stuart Bradie President and CEO E&C Group President 27 Years of Industry Experience Brian Ferraioli JohnEngineering Derbyshire & Construction Andrew Pringle& Construction Engineering CFO Technology &…
  9. Analyst Day – Kbr, Inc. – slide 9
    KBR Global Operations Moscow Gothenburg Atyrau Edmonton London Beijing Seoul Baku Kabul Wilmington Tokyo Baghdad Delhi Houston Arlington Birmingham Bahrain Shanghai Monterrey Kuala Lumpur Caracas Saudi Arabia Mexico City…
  10. Analyst Day – Kbr, Inc. – slide 10
    Global KBR Markets Graham Hill
  11. Analyst Day – Kbr, Inc. – slide 11
    Oil Market Global Oil Supply Economics 2015 continued oil price volatility due to over-supply (U.S. Shale Oil and Libya), and higher dollar Brent 74 Longer term support for closing Fri higher oil prices 5th Dec 57 62 Short term…
  12. Analyst Day – Kbr, Inc. – slide 12
    Oil Market (Contd) Global Oil Supply & Demand Million bbl/d Oversupply to 2016, but demand growth requires new developments. Such developments are underway in 2015 for 2017- 2018 production Investment critical to meet growing…
  13. Analyst Day – Kbr, Inc. – slide 13
    LNG Market LNG Economics 2025 LNG demand expected to grow 111/bbl 4.7%/yr demand growth is Brent Crude Price Asia for LNG Indexing centered in Asia, but Europe is expected to rebound 77/bbl 2015 2025 15% of announced…
  14. Analyst Day – Kbr, Inc. – slide 14
    Downstream: Oil Refining Refined Products Demand 120 Million bd Gasoline Diesel Jet/Kero Naphtha Rapid consumption growth in non-OECD, Residual Fuel Oil Other mainly Asia and Middle East 100 Diesel is growing the fastest while…
  15. Analyst Day – Kbr, Inc. – slide 15
    Downstream: Petrochem/Chemicals Ethylene Demand and Capacity Demand for plastics and advanced materials (PE, PP etc.) driven by GDP Low cost feedstock / production driving petrochemical investments Resource rich countries…
  16. Analyst Day – Kbr, Inc. – slide 16
    Downstream: Fertilizers Urea Demand and Capacity Demand growth strong in developing world, largely driven by population growth Capacity addition driven by either low feedstock costs or urea import reduction Urea capacity…
  17. Analyst Day – Kbr, Inc. – slide 17
    Market Summary: Impact on KBR Key markets for KBR: Upstream: oil & gas in GoM, North Sea, W. Africa, Brazil, Middle East, & Caspian Midstream: LNG in U.S. Gulf Coast, Canada BC, East Africa, SE Asia Downstream: mainly N. America and…
  18. Analyst Day – Kbr, Inc. – slide 18
    Technology & Consulting John Derbyshire
  19. Analyst Day – Kbr, Inc. – slide 19
    Technology and Consulting Business Broad Range of Technologies and Solutions from Wellhead to Specialty Chemicals Upstream Downstream Proprietary Semi-submersible hull design Refining (VCC, ROSE, FCC, Hydroprocessing, Distillation)…
  20. Analyst Day – Kbr, Inc. – slide 20
    Business Model Superior Margins License Basic Engineering Proprietary Equipment Catalyst Services Low Risk Smaller Project Size Home Office Only Engineering Multiple Markets/Geographies Limited Liability 21
  21. Analyst Day – Kbr, Inc. – slide 21
    Portfolio Offerings Consulting Upstream Consulting Field Development Planning Technology Selection Risk Management Capital Spending Optimization Offshore Integrity Management Recurring Business About 1,000 Production Platforms…
  22. Analyst Day – Kbr, Inc. – slide 22
    Portfolio Offerings Upstream Technology Semi-Submersible Design and Proprietary Technology Proven Semi-Submersible Designs for 12,000 to 40,000 tons topside Drilling, Production, and Accommodation Units Monohull Vessel Design…
  23. Analyst Day – Kbr, Inc. – slide 23
    Portfolio Offerings Downstream & Syngas Technologies Veba Combi Cracking (VCC) Convert Heavy Hydrocarbon Streams to Fuels Produces On-Spec Fuels with 95%+ Once-Through Conversion KBR Catalytic Olefins Technology (K-COT) Highest…
  24. Analyst Day – Kbr, Inc. – slide 24
    Recent Wins Hebron Statoil Cat D Captain Enhanced Oil KPIC Ethylene Revamp of Lummus Plant ExxonMobil (Offshore Dyno Nobel Ammonia Plant Statoil (North Sea) Recovery (EOR) Phase 2 Korea Petrochemical Ind. Co., Ltd (Onsan, Newfoundland,…
  25. Analyst Day – Kbr, Inc. – slide 25
    Technology & Consulting Growth Strategy Organizational Extending Acquisitions and Effectiveness Geographic Scope Coverage Expansions Expansion of Additional Sales Continue to Broaden Existing HVEC Coverage in T&C Consulting…
  26. Analyst Day – Kbr, Inc. – slide 26
    Early Customer Engagement Trusted Advisor Status Early Project Involvement Feasibility Studies Continuity Field Development Planning for EPC Consulting Business Revamp and Capacity Studies Technology Selection 27
  27. Analyst Day – Kbr, Inc. – slide 27
    Engineering & Construction Stuart Bradie Roy Oelking Farhan Mujib Ivor Harrington Jan Egil Braendeland David Zelinski
  28. Analyst Day – Kbr, Inc. – slide 28
    E&C Group Organization Stuart Bradie President and CEO E&C Group President 27 Years of Industry Experience Roy Oelking Jan Egil Braendeland Ivor Harrington E&C Americas E&C EMEA E&C APAC 40 Years of Industry 22 Years of…
  29. Analyst Day – Kbr, Inc. – slide 29
    E&C Core Sectors Full Service Offering OFFSHORE LNG / GTL ONSHORE ASSET SERVICES Oil & Gas Fixed Platforms Liquefaction Refining Maintenance Floating Facilities Regasification Petrochemicals Modifications Hulls, Moorings & Risers…
  30. Analyst Day – Kbr, Inc. – slide 30
    Project Delivery E&C Addresses a Broad Range of Industries / Types of Projects: Scope of Industry Commercial Services Offshore Engineering Reimbursable Onshore EPC Hybrid LNG / GTL Asset Services Fixed Price 31
  31. Analyst Day – Kbr, Inc. – slide 31
    Project Delivery What Does Everyone Want Certainty of Consistency Predictability Outcome All Executed in a Safe Manner 32
  32. Analyst Day – Kbr, Inc. – slide 32
    Project Delivery Common Fundamentals of ALL PROJECTS Safety is the Complete Front End First Priority Engineering Design (FEED) Accurate Estimate Good Execution Plan w / Appropriate Contingency Risk Identification / Funding /…
  33. Analyst Day – Kbr, Inc. – slide 33
    Project Delivery People On a consistent basis, every time, Corporate GOAL throughout the Capability to Execute world KBR Way We Deliver Tools Processes 34
  34. Analyst Day – Kbr, Inc. – slide 34
    Project Delivery The Single Biggest Difference Going Forward ORGANIZATION STRUCTURE Global Project Support Organization Capability Embedded in Business vs. Oversight Streamlined Structure Drives Consistency Management Discipline…
  35. Analyst Day – Kbr, Inc. – slide 35
    KBR Portfolio E&C Projects 36
  36. Analyst Day – Kbr, Inc. – slide 36
    Commercial & Risk Management Right Deal Execution Balanced Risk Profile Right Leadership Change Management Self Perform or JV Cost & Schedule Control Sound Estimate Productivity & Wage Risks Realistic Schedule Claim Management…
  37. Analyst Day – Kbr, Inc. – slide 37
    KBRs History in LNG SEGAS LNG Gorgon LNG Yemen LNG Egypt Australia Yemen 2000 2005 2005 We Deliver Nigeria Trains 4, 5 Angola LNG Olokola LNG Ichthys LNG Mozambique Nigeria Angola Nigeria Australia FLNG 2001 2005 2006 2009 2014…
  38. Analyst Day – Kbr, Inc. – slide 38
    Gorgon LNG 3 Trains 15.6 mtpa LNG Barrow Island, Australia Project Execution in Progress Delivery of LNG Train 2 Modules LNG Tank Farm LNG Loading Wharf 39
  39. Analyst Day – Kbr, Inc. – slide 39
    Ichthys LNG 2 Trains 8.4 mtpa LNG Darwin, Australia First Module Delivery Construction Workers Village Central Piperack Module Loadout Blaydin Point Site 40
  40. Analyst Day – Kbr, Inc. – slide 40
    Major Sales Prospects Pacific Northwest LNG Client: Petronas Confidential Scope: EPC LNG Facility Award: 2Q 2015 Expansion Scope: FEED Award: 1Q 2015 Tangguh LNG Train 3 Lake Charles LNG Client: BP Client: BG Group Scope: FEED…
  41. Analyst Day – Kbr, Inc. – slide 41
    Break
  42. Analyst Day – Kbr, Inc. – slide 42
    Oil & Gas Offshore Project Experience 43
  43. Analyst Day – Kbr, Inc. – slide 43
    Oil & Gas Existing Major Projects BP Shah Deniz Phase II Maersk Culzean ADMA OPCO NASR Phase II Chevron Big Foot 44
  44. Analyst Day – Kbr, Inc. – slide 44
    FPSO in Fabrication Yard 45
  45. Analyst Day – Kbr, Inc. – slide 45
    Oil & Gas Major Sales Prospects Statoil Johan Sverdrup EPC BP Mad Dog Phase II BP Rumaila Offsites EPC Chevron UBON 46
  46. Analyst Day – Kbr, Inc. – slide 46
    Confidential Client Global Strategic Alliance Scope of work will span the venture stages and project types Create Appraise Select Define Execute Operate Capability 1 Support 2 Services 3 PMTs Surf Floater / FPSO Jacket…
  47. Analyst Day – Kbr, Inc. – slide 47
    Onshore Rich Experience and Capability Major Projects Completed DuPont MSA for EPCm Pequiven Moron Ammonia Project DuPont Blackhawk PetroSA Refinery UGCC Ethylene Cracker Equistar LDPE FEED Esso Chad Cameroon Project Sonaref Refinery…
  48. Analyst Day – Kbr, Inc. – slide 48
    Onshore Existing Major Projects o Koch Enid Expansion o Crude Oil Flexibility Project o Omsk Refinery Revamp Client: Koch Nitrogen Co. Client: Lima Refining Co. Client: Gazpromneft Scope: EPC Services Scope: EPCm Scope: PMC o…
  49. Analyst Day – Kbr, Inc. – slide 49
    Onshore Major Prospects Onshore Pipeline of Prospects Major Prospects 2015 70+ Prospects totaling 6 Billion 50+ Prospects to be Awarded in 2015 Spans industries covered with significant opportunities in Petrochemicals &…
  50. Analyst Day – Kbr, Inc. – slide 50
    Onshore Reference Project Burrup 2200 MTPD Ammonia Plant 51
  51. Analyst Day – Kbr, Inc. – slide 51
    Government Services Andrew Pringle
  52. Analyst Day – Kbr, Inc. – slide 52
    Government - Principal Execution Offices / Key Clients EMEA (UK) APAC Americas 53
  53. Analyst Day – Kbr, Inc. – slide 53
    Government Core Services EMEA APAC AMERICAS Home Base Operational Support Asset Management International Base Operations Support Overseas Operational Support Systems Engineering Remote Life Support Services Programme Management…
  54. Analyst Day – Kbr, Inc. – slide 54
    Government Key Market Opportunities EMEA Ebola Treatment Centres Military Flying Training System Army 2020 Rebasing Communications Integrator Facilities Management Integrator APAC Deployable Health Capability Maritime Acquisition…
  55. Analyst Day – Kbr, Inc. – slide 55
    Financial Overview & Summary Brian Ferraioli Stuart Bradie
  56. Analyst Day – Kbr, Inc. – slide 56
    Pro-forma Historical Financial Results Continuing Businesses Millions 2012 2013 2014 3Q YTD Technology & Consulting 296 331 285 Engineering & Construction 5,539 4,946 3,542 Government Services 1,095 928 522 Revenues 6,930…
  57. Analyst Day – Kbr, Inc. – slide 57
    Cost Reduction / Streamline Activities Goal: Reduce annual operating expenses by 200 Million by 2016 Goal: By 2016, Gross Profit and Equity in Earnings % by group: Technology & Consulting Low 20s % Engineering & Construction…
  58. Analyst Day – Kbr, Inc. – slide 58
    Potential Pre-Tax Financial Impacts from Restructuring Item Millions Cash Impact Goodwill / Intangibles Impairment 275 - 325 Non-Cash 35M Potential Future Cash, ERP & Other Impairments 165 - 200 Balance Non-Cash Foreign Tax…
  59. Analyst Day – Kbr, Inc. – slide 59
    Capital Allocation Balanced Capital Allocation Strategy Continue Continue with an to pay a opportunistic dividend with Selective M&A share (priority on Focus on core competitive buyback yield hydrocarbons businesses program…
  60. Analyst Day – Kbr, Inc. – slide 60
    Major Commercial Disputes Disputes: LogCap III Tort Cases: Pemex long-term receivable Burn Pits Filed petition with U.S. Supreme 401M Court. Awaiting Solicitor General In litigation until 2016 Brief and Supreme Court decision…
  61. Analyst Day – Kbr, Inc. – slide 61
    Summary KBR has a solid base business Strategic focus will be on core markets and quality of earnings Clear objective and positive changes towards greater predictability of Project Delivery Will significantly reduce costs and…
  62. Analyst Day – Kbr, Inc. – slide 62
    Q&A BP Atlantis EBIC Ammonia Navajo Refinery ROSE Unit SEGAS 63
  63. Analyst Day – Kbr, Inc. – slide 63
    Appendix
  64. Analyst Day – Kbr, Inc. – slide 64
    Pro-forma Historical Financial Results Non-Strategic Businesses to Exit Millions 2012 2013 2014 3Q YTD Revenues 840 1,009 600 Gross Profit and Equity in earnings of unconsolidated affiliates (70) -8% 3 0% (81) -14% Note:…
  65. Analyst Day – Kbr, Inc. – slide 65
    Reconciliations Pro-forma EBITDA Reconciliation Continuing Businesses: Millions 2012 2013 2014 3Q YTD Gross Profit + Equity in Earnings (Continuing Businesses) 814 683 384 General and administrative expenses (222) (248) (178)…

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