Press Release

Strong Q1 2024 Performance
Adjusted EBITDA2 Growth with Margin Expansion

HOUSTON, April 30, 2024 - KBR, Inc. (NYSE: KBR) today announced its first quarter fiscal 2024 financial results.

"KBR's extraordinary team has yet again surpassed expectations, delivering outstanding first-quarter results," said Stuart Bradie, KBR's President and CEO. "Our team's unwavering commitment to our customers has led to year-over-year increases across all key financial metrics, particularly in Adjusted EBITDA2 and operating cash flow. Bookings during the quarter were well-aligned with our end markets across energy security, national defense, human performance, and sustainability."

New Business Awards
Backlog and options as of March 29, 2024 totaled $20.8 billion. Delivered 1.1x trailing-twelve-months (TTM) book-to-bill1 as of March 29, 2024. Awarded $1.9 billion of bookings and options in the quarter.

Sustainable Technology Solutions (STS) delivered 0.9x TTM book-to-bill1 as of March 29, 2024, including awards and achievements in the quarter as follows:

• KBR's Purifier™ ammonia technology selected by Wuhuan Engineering Co. Ltd. for the expansion of El Nasr Company for Intermediate Chemicals' 1,200 metric tonnes per day ammonia plant in Egypt.
• Selected by First State Hydrogen, Inc. to provide engineering services to study the feasibility of developing a clean hydrogen production facility through electrolysis powered by renewable energy. The study is part of First State Hydrogen's vision to provide clean hydrogen for Delaware and the U.S. mid-Atlantic and help the region meet its sustainability goals.
• Signed an alliance agreement with GeoLith SAS to offer its advanced Direct Lithium Extraction technology, Li-Capt®. This technology enables zero-emission lithium extraction from untapped sources like geothermal and oil well brines.
• Awarded a project management contract by Sonangol for the design and construction oversight of a new 200,000 barrels per day refinery in Lobito, Angola - one of the most significant and sustainable energy infrastructure projects in the region.
• Secured a five-year asset condition monitoring program contract from Rabigh Refining & Petrochemical Company to deploy predictive maintenance services at its plant in Rabigh, Saudi Arabia.

Government Solutions (GS) delivered 1.2x TTM book-to-bill1 as of March 29, 2024, including awards and achievements in the quarter as follows:

• Awarded new contracts estimated at more than $450 million to provide systems engineering, acquisition support, phenomenology expertise and data science, as well as applied research, communications security   infrastructure, operations and maintenance support to the U.S. Government.
• Awarded a new subcontract with Bering Straits Information Technologies in support of the U.S. Air Force Air Combat Command to provide human performance optimization services at various military bases around the world. This contract expands upon KBR's more than 50 years of commitment to the wider health and human performance market within NASA and the Department of Defense.
• Won a new one-year task order with three one-year options on the Seaport NxG IDIQ contract to assist with project execution for the Naval Information Warfare Center Atlantic, supporting the  Defense Health Agency's cybersecurity services and risk management framework initiatives.
• Selected to provide specialized IT services that will equip the Royal Australian Navy with a more modern and cyber worthy Fleet Information Environment.
• Awarded a three-year contract, with a two year-option period, to deliver Heavy Equipment Transporter (HET) capability on behalf of the British Army. 
• Awarded option years for LOGCAP V to support activity in NORTHCOM and EUCOM.

Summarized First Quarter 2024 Financial Results

Financial Highlights for the Three Months Ended March 29, 2024

• Revenue of $1.8 billion, up 7% on a year-over-year-basis 
• Net income attributable to KBR of $93 million; Adjusted EBITDA2 of $207 million, up 14%  on a year-over-year basis (11.4% Adjusted EBITDA2 margin)
• Diluted EPS of $0.69; Adjusted EPS2 of $0.77,  up 15% on a year-over-year basis
• Operating cash flows of $91 million
• Bookings and options of $1.9 billion during the quarter with 1.1x TTM book-to-bill1 

Commentary on the Three Months Ended March 29, 2024
Revenues were $1.8 billion, up 7% compared to 1Q'23, primarily due to growth across Sustainable Technology Solutions; and within Government Solutions, new and on-contract growth across International, Defense & Intel, and Science and Space, partially offset by contraction in Readiness & Sustainment due to Ukraine funding delays.

Net income attributable to KBR was $93 million, up $7 million compared to 1Q'23, due to higher gross profit, equity in earnings of unconsolidated affiliates and gain on disposition of assets and investments, partially offset by higher interest expense and other non-operating expense.

Adjusted EBITDA2 was $207 million, up 14% compared to 1Q'23, with Adjusted EBITDA2 margins of 11.4%, up 70 bps year-over-year.

Diluted earnings per share was $0.69, up 23% compared to 1Q'23, due to the increase in Net income attributable to KBR noted above and the decrease in diluted weighted average common shares outstanding. Adjusted earnings per share2 was $0.77, up 15% compared to 1Q'23, due to the increase in Net income attributable to KBR noted above and the decrease in adjusted weighted average common shares outstanding.

Operating cash flows were $91 million, up 160% compared to 1Q'23, primarily due to strong collections across the business.

Capital returned to shareholders totaled $79 million during the quarter, consisting of $61 million in share repurchases, inclusive of $50 million of open market repurchases and $11 million of repurchases to satisfy requirements of equity compensation plans, and $18 million in regular dividends.

Reaffirms Fiscal 2024 Guidance
The table below summarizes FY24 guidance and represents our views as of April 30, 2024.

The company does not provide a reconciliation of Adjusted EBITDA to the most comparable GAAP financial measure on a forward-looking basis because the company is unable to predict with reasonable certainty the ultimate outcome of legal proceedings, unusual gains and losses, and acquisition-related expenses without unreasonable effort, which could be material to the company's results computed in accordance with GAAP.

Conference Call Details
The company will host a conference call to discuss its first quarter financial results on Tuesday, April 30, 2024, at 7:30 a.m. Central Time. The conference call will be webcast simultaneously through the Investor Relations section of KBR's website at investors.kbr.com. A replay of the webcast will be available shortly after the call on KBR's website or by telephone at +1.866.813.9403, passcode: 154682.

About KBR
We deliver science, technology and engineering solutions to governments and companies around the world. KBR employs approximately 35,000 people worldwide with customers in more than 80 countries and operations in over 30 countries. KBR is proud to work with its customers across the globe to provide technology, value-added services, and long-term operations and maintenance services to ensure consistent delivery with predictable results. At KBR, We Deliver.

Visit www.kbr.com

Forward-Looking Statements
The statements in this press release that are not historical statements, including statements regarding our expectations for our future financial performance, effective tax rate, operating cash flows, contract revenues, award activity and backlog, program activity, our business strategy, interest expense, and our plans for raising and deploying capital and paying dividends, are forward-looking statements within the meaning of the federal securities laws. These statements are subject to numerous risks and uncertainties, many of which are beyond the company's control that could cause actual results to differ materially from the results expressed or implied by the statements. These risks and uncertainties include, but are not limited to: uncertainty, delays or reductions in government funding, appropriations and payments, including as a result of continuing resolution funding mechanisms, government shutdowns or changing budget priorities; developments and changes in government laws, regulations and policies that may require us to pause, delay or abandon new and existing projects; the ongoing conflict between Russia and Ukraine and in the Middle East and the related impacts on our business; potential adverse economic and market conditions, such as interest rate and currency exchange rate fluctuations, the company's ability to manage its liquidity; the outcome of and the publicity surrounding audits and investigations by domestic and foreign government agencies and legislative bodies; potential adverse proceedings by such agencies and potential adverse results and consequences from such proceedings; changes in capital spending by the company's customers; the company's ability to obtain contracts from existing and new customers and perform under those contracts; structural changes in the industries in which the company operates; escalating costs associated with and the performance of fixed-fee projects and the company's ability to control its cost under its contracts; claims negotiations and contract disputes with the company's customers; changes in the demand for or price of oil and/or natural gas; protection of intellectual property rights; compliance with environmental laws; changes in government regulations and regulatory requirements; compliance with laws related to income taxes; unsettled political conditions, war and the effects of terrorism; foreign operations and foreign exchange rates and controls; the development and installation of financial systems; the possibility of cyber and malware attacks; increased competition for employees; the ability to successfully complete and integrate acquisitions; and operations of joint ventures, including joint ventures that are not controlled by the company.

The company's most recently filed Annual Report on Form 10-K, any subsequent Form 10-Qs and 8-Ks, and other U.S. Securities and Exchange Commission filings discuss some of the important risk factors that the company has identified that may affect its business, results of operations and financial condition. Except as required by law, the company undertakes no obligation to revise or update publicly any forward-looking statements for any reason.

Total backlog and options at March 29, 2024 totaled $20.8 billion, down 4% compared to December 29, 2023. Government Solutions backlog and options at March 29, 2024 totaled $16.5 billion, down $0.7 billion compared to December 29, 2023. Sustainable Technology Solutions backlog at March 29, 2024 totaled $4.4 billion, down $0.2 billion compared to December 29, 2023.

Non-GAAP Financial Information
The following information provides reconciliations of certain non-GAAP financial measures presented in the press release to which this reconciliation is attached to the most directly comparable financial measures calculated and presented in accordance with generally accepted accounting principles (GAAP). The company has provided the non-GAAP financial information presented in the press release as information supplemental and in addition to the financial measures presented in the press release that are calculated and presented in accordance with GAAP. Such non-GAAP financial measures should not be considered superior to, as a substitute for or alternative to, and should be considered in conjunction with, the GAAP financial measures presented in the press release. The non-GAAP financial measures in the press release may differ from similar measures used by other companies.

EBITDA and Adjusted EBITDA
We evaluate performance based on EBITDA, Adjusted EBITDA, and Adjusted EBITDA margin. EBITDA is defined as Net income attributable to KBR, plus Interest expense; Other non-operating expense; Provision for income taxes; and Depreciation and amortization. Adjusted EBITDA excludes certain amounts included in EBITDA. Adjusted EBITDA margin is calculated as Adjusted EBITDA divided by Revenues. EBITDA, Adjusted EBITDA, and Adjusted EBITDA margin for each of the three month periods ended March 29, 2024 and March 31, 2023 are considered non-GAAP financial measures under SEC rules because EBITDA and Adjusted EBITDA exclude certain amounts included in the calculation of net income (loss) attributable to KBR in accordance with GAAP for such periods. Management believes EBITDA, Adjusted EBITDA, and Adjusted EBITDA margin afford investors a view of what management considers KBR's core performance for each of the three month periods ended March 29, 2024 and March 31, 2023 and also affords investors the ability to make a more informed assessment of such core performance for the comparable periods.

Adjusted EPS 
Adjusted earnings per share (Adjusted EPS) for each of the three month periods ended March 29, 2024 and March 31, 2023 is considered a non-GAAP financial measure under SEC rules because Adjusted EPS excludes certain amounts included in the Diluted EPS calculated in accordance with GAAP for such periods. The most directly comparable financial measure calculated in accordance with GAAP is Diluted EPS for the same periods. Management believes that Adjusted EPS affords investors a view of what management considers KBR's core earnings performance for each of the three month periods ended March 29, 2024 and March 31, 2023 and also affords investors the ability to make a more informed assessment of such core earnings performance for the comparable periods.

We have calculated Adjusted EPS for each of the three month periods ended March 29, 2024 and March 31, 2023 by adjusting Diluted EPS for the items included in the table below.

We have calculated the 2024 guidance for Adjusted EPS by adjusting Diluted EPS for the items included in the table below.

Adjusted Cash Flows Provided by Operating Activities and Adjusted Free Cash Flows
Adjusted operating cash flows and Adjusted free cash flows are considered non-GAAP financial measures under SEC rules.  Adjusted operating cash flows exclude certain amounts included in the cash flows provided by operating activities calculated in accordance with GAAP. Adjusted free cash flows exclude capital expenditures from Adjusted operating cash flows. The most directly comparable financial measure calculated in accordance with GAAP is cash flows provided by operating activities. Management believes that Adjusted operating cash flows and Adjusted free cash flows afford investors a view of what management considers KBR's core operating cash flow performance and also afford investors the ability to make a more informed assessment of such core operating cash generation performance.

We have calculated Adjusted operating cash flows and Adjusted free cash flows for each of the three month periods ended March 29, 2024 and March 31, 2023 by adjusting operating cash flow provided by operating activities for items included in the table below.