Press Release

Excellent Progress Toward 2025 Long-Term Targets; Delivers Accelerated Growth and Value Creation in 2021

FY 2021 Highlights

• Delivered revenue growth of $1.6 billion, or 27%, over 2020, and net income attributable to KBR growth of $90 million; adj. EBITDA1 growth of 31%
• Generated $278 million of operating cash flow; $319 million of adj. operating cash flow1
• Awarded $7.8 billion of bookings and options, providing greater visibility of long-term growth targets
• Closed highly strategic Frazer-Nash Consultancy acquisition, enhancing highly differentiated capabilities internationally

4th Quarter 2021 Highlights

• Revenue growth of $1 billion, or 70%; net income attributable to KBR growth of 258%; adj. EBITDA1 growth of 27%
• Delivered 1.2x book-to-bill

HOUSTON, TX - February 22, 2022 - KBR, Inc. (NYSE: KBR) today announced its fourth quarter and FY 2021 financial results and initiated attractive FY 2022 financial guidance.

“KBR had a stellar 2021 delivering significant progress toward its 2025 growth strategy," said Stuart Bradie, President and CEO of KBR. "Throughout the year, our Team of Teams posted outstanding performance across all key metrics – organic revenue growth, earnings expansion, cash generation, new program wins, and Zero Harm. We extended our high-end capabilities in attractive, growing end markets across international defense and renewable energy with the acquisition of Frazer-Nash Consultancy, and we formed important alliances to advance ground-breaking technology to close the circular plastics loop and make carbon-free energy a reality. Our business benefits from strong end market momentum in areas of global importance, such as defense modernization and climate change, and combined with our deep domain expertise and culture of innovation, KBR is well positioned for near-, mid- and long-term growth."

“We are proud to have achieved carbon neutrality for a second consecutive year on a path toward net zero carbon by 2030. At KBR, our commitment to sustainability goes beyond and includes leveraging our expertise to help others achieve their sustainability goals, thus creating value for all stakeholders. Our people-centered culture is at the heart of our strategic evolution into a forward-leaning, sustainability-driven, agile business focused on solving our clients’ most complex issues and challenges through our IP, deep domain expertise and innovative solutions. I would like to thank the people of KBR for their agility, perseverance and commitment to delivering solutions that matter.”

Summarized Fourth Quarter and FY 2021 Financial Results

¹ See additional information at the end of this release regarding non-GAAP financial measures

Financial highlights for the year ended December 31, 2021

• Revenue of $7.3 billion, a 27% increase compared to 2020, 18% organic, is primarily attributable to the following:
  • Government Solutions posted $6.1 billion of revenue, a 52% increase over 2020, 36% organic. The increase in revenue is attributable to organic growth delivered across each of our government businesses, including work supporting Operation Allies Welcome ("OAW") and the acquisition of Centauri in October 2020. In late 2021, KBR was awarded multiple task orders to support OAW, a historic humanitarian effort for the U.S. Department of Defense ("DOD") to facilitate the rapid development of vital, temporary infrastructure at military bases in the U.S. and abroad to accommodate thousands of displaced Afghans. We expect this non-recurring OAW work to be substantially completed in early 2022.
  • Sustainable Technology Solutions posted $1.2 billion of revenue in 2021, in line with our guided annual revenue expectations for this business following the company's 2020 exit from commoditized services.
• Gross profit, net income attributable to KBR, adj. EBITDA, and adj. EPS increased in line with the items described above as well as the following:
  • Excluding the impact of OAW, core Government Solutions and Sustainable Technology Solutions profit contributions and adj. EBITDA margins were in line with management's expectations for the year. Margins in Government Solutions continue to reflect strong project execution and strong CPAR performance and award fee scores in challenging technical areas that reflect high customer satisfaction. The Sustainable Technology Solutions segment performance reflected planned ramp down of legacy projects while producing growth in higher margin areas. OAW task orders are cost-reimbursable with lower than normative EBITDA margins that result in some margin dilution but with meaningful contributions to net income attributable to KBR, adj. EBITDA and adj. EPS.
  • In October 2021, we announced that our JKC joint venture entered into a binding settlement agreement that resolved outstanding claims and disputes between JKC and its client. The settlement agreement is an important de-risking event that reduces uncertainty, reduces future legal costs, frees up management time, and increases deployment optionality. In connection with this settlement, KBR recorded a non-cash charge of $193 million and a $10 million charge for warranty items. Consistent with the company's practice, these amounts have been excluded from adj. EBITDA and adj. EPS. This settlement does not impact pursuit of, or positions related to, subcontractor claims associated with the combined cycle power plant for which the company continues to expect a favorable cash award upon resolution.
  • In the 2nd quarter of 2021, the company benefited from the net favorable resolution of legacy matters in Sustainable Technology Solutions that resulted in a net benefit of $16 million with attendant favorable operating cash flow.
  • In 2020, net income attributable to KBR was impacted by non-cash restructuring and impairment charges of $214 million and goodwill impairment charges of $99 million that did not recur in 2021 in connection with the transformation of its operating model to narrow its strategic focus and reduce risk. These amounts have been excluded from adj. EBITDA and adj. EPS.
  • SG&A of $393 million increased 17% over 2020 primarily attributable to the acquisition of Centauri in late 2020, as well as an increase in corporate expenses associated with return to the office, increased travel, and other initiatives, all in line with management's expectations.
  • Adj. EPS increased 40% in line with the items described above, as well as favorable jurisdictional tax mix and increased utilization of foreign tax credits.

Recent Developments and New Business

In the year ended December 31, 2021, the company won $7.8 billion of awards and options, including the following:

• Over $800 million of task orders under IAC-MAC to provide cutting edge R&D and defense modernization support;
• Historic humanitarian support contracts to facilitate the rapid development of vital infrastructure at military bases in the U.S. and abroad being used to accommodate thousands of displaced Afghans for the U.S. DOD;
• Contracts to provide our leading ammonia technology for greenfield traditional, blue, and green ammonia projects;
• Multiple licensing awards to provide industry-leading, disruptive Hydro-PRT℠ plastics recycling technology, as well as numerous ongoing studies; and
• Numerous contracts to provide KBR INSITE® virtual/remote monitoring and advisory services to help clients digitally diagnose operational problems, determine probable root causes, and recommend corrective actions to meet operational objectives and minimize environmental impact.

Capital Deployment

KBR continues to employ a balanced approach to capital allocation, which includes investments that facilitate sustainable, long-term growth, and prudent return of capital to shareholders. During the year, KBR completed the strategic acquisition of Frazer-Nash Consultancy, repurchased $82 million of its common shares, and paid $61 million in shareholder dividends.

KBR is pleased to announce an increase to its quarterly dividend beginning in 2022 to $0.12 per share, a 9% increase over 2021 levels and a 50% increase since 2019.

FY 2022 Guidance

KBR combines deep mission understanding, market-leading expertise and technology, and unwavering operational focus to deliver solutions to solve our clients’ most complex issues. In 2021, KBR continued to shift toward agile, solutions-oriented delivery in differentiated areas that we believe will provide attractive growth, profit, and cash conversion. Our 2022 financial guidance is underpinned by favorable market tailwinds, excellent bookings momentum, and work under contract of over 70% to deliver 2022 results. Our FY 2022 guidance is in line with or ahead of pace with our 2025 long-term targets.

KBR guides 2022 financial results as follows:

• Consolidated revenue: $6.3 billion to $6.8 billion
• Adjusted EBITDA margin1: ~10%
• Effective tax rate: 24% to 25%
• Earnings per share (EPS): $2.04 to $2.19
• Adjusted EPS1: $2.45 to $2.60
• Operating Cash Flow (OCF): $320 million to $370 million
• Adjusted OCF1: $350 million to $400 million

Conference Call Details

The company will host a conference call to discuss its fourth quarter and FY 2021 financial results on Tuesday, February 22, 2022, 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 +1.719.457.0820, passcode: 2243106.

About KBR

We deliver science, technology and engineering solutions to governments and companies around the world. KBR employs approximately 28,000 people worldwide with customers in more than 80 countries and operations in 34 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

This press release and related comments by KBR management contain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Some examples include statements regarding our plans, objectives, goals, strategies, future events, future financial performance and backlog information and other information that is not historical. When used in this press release, the words “estimates,” “expects,” “predicts,” “continues,” “looking ahead,” “well-positioned,” “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. Such statements are based upon our current expectations and various assumptions, which are made in good faith, and we believe there is a reasonable basis for them. However, because forward-looking statements relate to the future, they are subject to inherent risks, uncertainties and other factors that are difficult to predict and which could cause actual results to differ materially from the forward-looking statements contained in this press release.

Additional information about potential risk factors that could affect our business and financial results is included in our latest Form 10-K and any subsequent Forms 10-Q and 8-K. We caution you not to place undue reliance on the forward-looking statements included in this press release, which speak only as of the date hereof. We disclaim any intent or obligation, except as required by law, to revise or update this information to reflect new information or future events or circumstances. We also disclaim any duty to comment on or correct information that may be contained in reports published by investment analysts or others.

For further information, please contact:

Investors
Alison Vasquez
Vice President, Investor Relations
713-753-5082
Investors@kbr.com

Media
Philip Ivy
Vice President, Global Communications
713-753-3800
Mediarelations@kbr.com