d.a. davidson’s tenth annual engineering & construction...

Bill Utt – Chairman, President and CEO

Sue Carter - Executive Vice President and CFO

September 20, 2011

D.A. Davidson’s Tenth AnnualEngineering & Construction Conference

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Forward Looking StatementsThis 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 24, 2011, 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.

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KBR – A Leading Global E&C Provider

* 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.

» Revenue: Full Year 2010 - $10.1 Billion; Fortune 500 Company #242Full Year 2009 - $12.1 Billion; Fortune 500 Company #193

» Backlog: June 30, 2011 - $12.0 Billion (76% reimbursable / 24% fixed-price)*June 30, 2010 - $12.4 Billion (79% reimbursable / 21% fixed-price)*

» Headquarters in Houston, Texas

» 100+ years of operating history

» ~35,000 employees; 65+ countries

» Extensive service capabilities:

KBR is a global engineering, construction, and services company

supporting the energy, hydrocarbons, government services, minerals,

civil infrastructure, power, industrial, and commercial markets.

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KBR’s Global Footprint

Edmonton

Calgary

Houston

Monterrey

Arlington

MMM

GreenfordLeatherhead

Moscow

Atyrau

Baku

Dubai

Rio De Janeiro

Algiers

Angola

Lagos

Johannesburg

BaghdadKuwait City Beijing

SingaporeJakarta

Perth

Brisbane

SydneyAdelaide Canberra

Melbourne

Gothenburg

Abu Dhabi

DhahranNew Delhi

BirminghamAtlanta

Wilmington

Raleigh / Charlotte

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Frankfurt

Buenos Aires

Hydrocarbons

Market-leading position on 6 major LNG projects

Ichthys FID expected fourth quarter of 2011

Kitimat FEED expected completion end of 2011 with FID in first half 2012

Pluto Expansion pre-FID services continuing

Browse expected FEED completion for mid-2012 FID

Gorgon 4 pre-FEED finalized

Anadarko Mozambique LNG pre-FEED awarded

Current large projects portfolio

Skikda LNG approximately 80% complete

Gorgon LNG execution is strong of 19

Hydrocarbons

Oil & Gas

FEEDs being converted to detailed engineering, design, and implementation

GOM: Big Foot; Jack & St. Malo

North Sea: Quad 204 - West of Shetlands; South Arne

West Africa: CLOV;

Caspian: Chirag; Shah Deniz 2; Kashagan

Western Australia: GDF SUEZ Bonaparte;

Brazil: 8 Petrobras FPSOs;

Strong level of global offshore activity Caspian and West Africa over next 18 months; Opened new offices in Kazakhstan and Angola

Seeking to expand service offerings from engineering to project execution of 19

Downstream

Lobito 200,000 barrels-per-day refinery project

FEED complete; working under EPCm bridging agreement

Saudi Arabia projects progressing well

Yanbu Export Refinery project - KBR’s PMC team moving to site

Ras Tanura Integrated project – FEED completion and FID expected later this year

Jazan Refinery FEED and PMC underway

Aramco GES Plus awarded – first work in 3Q11

North America

BP/Husky Toledo refinery EPCm services 60% complete

KiOR Inc. Biomass-to-Renewable crude facility awarded

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Technology

Ammonia: Purifier™; Purifierplus™; KAAP™; KAAPplus™

Refining: Veba Combi-Cracking (VCC); ROSE©; FCC

Coal Gasification: Transport Gasifier (TRIG™)

Olefins: SCORE™; SUPERFLEX™; ACO™

Synthesis Gas: SMR; KRES™

Organic Chemicals: Aniline; KBR-Phenol; NExOCTANE™

Carbon Capture and Storage: Pre and Post-Combustion Capture; CO2Compression & Sequestration of 19

KBR develops new technologies that reduce cost while improving efficiency and safety. This allows KBR to offer customers unsurpassed value through a suite of technologies, including:

North America Government & DefenseLogCAP Updates and Outlook

Expected 2011 revenue between $1.6 to $1.8 billion

Assuming current 50,000 troop levels until the back half of 2011, with substantial ramp down by end of 2011

LogCAP III modified to cost-plus-fixed-fee

Expect final award fee under LogCAP contract during third quarter of 2011

Awarded LogCAP IV contract for base life-support activities in Iraq for U.S. Department of State

Other NAG&D Prospects

Awarded by U.S. Central Commands for design-build and construction projects for a $3.8 billion Multiple Award Task Order Contract (MATOC)

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Maintenance support and construction activities at U.S. military installations

Short-listed on the $2.5 billion National Sciences Foundation Antarctica project

Infrastructure, Government, and PowerPower & Industrial

$450 million KBR award for Palm Beach Solid Waste Authority new state-of-the-art waste to energy facility

Ramp-up in North America capital investment: up 10-15% year-over-year

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Infrastructure & MineralsMiddle East infrastructure activity improving based on stabilized oil price; Doha Express Way award

Minerals markets strengthening; Hope Downs 4 EPCm award and Roberts & Schaefer opportunities

KBR awarded numerous Australian infrastructure projects in 2011

International Government & DefenseContinued support for U.K. Ministry of Defence and NATO in Afghanistan; newly acquired NATO contract ramped up

U.K.’s Foreign and Commonwealth Office award

Building on U.K. based logistics and life support and consultancy and training capabilities in Australia to expand services within the Asia-Pacific region

ServicesU.S. construction markets

Now seeing the beginnings of a return of larger construction projects

Chevron’s Base Oil expansion project award

Southern Company’s Plant Scherer project award

Increasing activity in Alberta oil sands region

Building Group benefitting from strong sales activity in 2010; seven on-going major hospital projects

Industrial ServicesLarge DuPont construction, maintenance and services project has grown to 21 projects across three separate service product lines

Increased turnaround work in Canada of 19

KBR Financials and Backlog

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Second Quarter 2011 Earnings SummaryRevenue up 5% year-over-year excluding LogCAP revenue

Operating income of $169 million, up 17% compared to the first quarter of 2011

Earnings per diluted share of $0.65 compared to $0.66 for secondquarter of 2011

Cash flows from operating activities of $223 million for first six months of 2011; Cash and equivalents of $712 million on June 30, 2011

$2.4 billion of new work added to backlog during second quarter of 2011

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6.0%

7.0%

8.0%

9.0%

10.0%

11.0%

12.0%

13.0%

$8,000 $9,000 $10,000 $11,000 $12,000 $13,000

Revenue (in millions)

Job

Inco

me

Mar

gin

Strengthening Backlog Contributing to Margins

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2006

20072008

2009

2010

2011*

*Note: Annualized based on First Six Months of 2011 Actual Reported financials from Form 10-Q dated July 27, 2011

1.0%

2.0%

3.0%

4.0%

5.0%

6.0%

7.0%

$8,000 $9,000 $10,000 $11,000 $12,000 $13,000Revenue (in millions)

Ope

ratin

g In

com

e M

argi

nStrengthening Backlog Contributing to Margins

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2006

2007

2008 2009

2010

2011*

*Note: Annualized based on First Six Months of 2011 Actual Reported financials from Form 10-Q dated July 27, 2011

KBR’s Backlog MethodologyFor long-term contracts, the amount included in backlog is limited to five years

Only projects for actual awards where work scope is definitized are added to backlog

IDIQ / MATOC style contracts are only added to backlog when awarded or definitized

For projects where KBR acts solely in a project management capacity, only the PMC revenue is placed in backlog

No owner-provided equipment and/or materials in KBR backlog

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$941M$786M

$319M$549M

$265M

$120M

12/31/09 12/31/10

Acquisitions & Licensing

Arrangements

Share Repurchases & Dividends

$81M$52M

$786M

$164M

2010 Business

Cash Generation

MWKL Acquisition

Cash Generation & Cash Deployment

$223M6 Months

2011 Business

Cash Generation

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CAPEX; Other

Investing & Financing Activities

$712M

Share Repurchases & Dividends*

06/30/11

CAPEX; Other

Investing & Financing Activities

*Note: Share repurchase does not include the 10 million share repurchase announced on August 8, 2010

Working Capital Management

Focused on balance sheet

Cash neutral or greater on projects

Balanced receivables and payables

Process efficiencies

Collecting on past disputes (EPC 1)

Diligently working to resolve disputed withhold amounts

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KBR Investment Thesis

• KBR is a catalyst driven growth company across a broad based and diverse series of businesses

• Optimism for acceleration in new orders around growth opportunities across markets

• Strong balance sheet with emphasis on cash management

• Patience, prudence, and thoughtfulness in managing KBR’s cash balances

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