KBR Announces Third Quarter Fiscal 2024 Financial Results
KBR reported strong Q3 2024 financial results with revenue reaching $1.9 billion, up 10% year-over-year. Net income was $100 million, with Adjusted EBITDA of $219 million, up 18%. The company secured $3.3 billion in new bookings with a 1.2x book-to-bill ratio. Notable achievements include the strategic acquisition of LinQuest and multiple contract wins in both Government Solutions and Sustainable Technology Solutions segments. Based on strong performance, KBR raised its 2024 guidance, projecting revenue of $7.5B-$7.7B and Adjusted EBITDA of $840M-$870M.
KBR ha riportato risultati finanziari solidi per il terzo trimestre del 2024, con ricavi che hanno raggiunto i 1,9 miliardi di dollari, un incremento del 10% rispetto all'anno precedente. L'utile netto è stato di 100 milioni di dollari, con un EBITDA rettificato di 219 milioni di dollari, in crescita del 18%. L'azienda ha ottenuto 3,3 miliardi di dollari in nuovi ordini con un rapporto book-to-bill di 1,2x. Tra i risultati notevoli si include l'acquisizione strategica di LinQuest e molteplici vittorie contrattuali nei segmenti delle Soluzioni Governative e delle Soluzioni Tecnologiche Sostenibili. Sulla base di queste performance solide, KBR ha alzato la sua previsione per il 2024, prevedendo ricavi tra 7,5 miliardi e 7,7 miliardi di dollari e un EBITDA rettificato tra 840 milioni e 870 milioni di dollari.
KBR reportó resultados financieros sólidos para el tercer trimestre de 2024, con ingresos que alcanzaron los 1,9 mil millones de dólares, un aumento del 10% interanual. La renta neta fue de 100 millones de dólares, con un EBITDA ajustado de 219 millones de dólares, un aumento del 18%. La compañía aseguró 3,3 mil millones de dólares en nuevos pedidos con una relación de facturación de 1,2x. Los logros notables incluyen la adquisición estratégica de LinQuest y múltiples ganancias de contratos en los segmentos de Soluciones Gubernamentales y Soluciones Tecnológicas Sostenibles. Basándose en un desempeño sólido, KBR elevó su pronóstico para 2024, proyectando ingresos de entre 7,5 mil millones y 7,7 mil millones de dólares y un EBITDA ajustado de entre 840 millones y 870 millones de dólares.
KBR는 2024년 3분기에 강력한 재무 결과를 보고했으며, 매출은 19억 달러에 이르고 전년 대비 10% 증가했습니다. 순이익은 1억 달러였으며, 조정된 EBITDA는 2억 1900만 달러로 18% 증가했습니다. 회사는 33억 달러의 신규 수주를 확보했으며, 청구 비율은 1.2배입니다. 주목할 만한 성과로는 LinQuest의 전략적 인수와 정부 솔루션 및 지속 가능한 기술 솔루션 부문에서의 여러 계약 수주가 포함됩니다. 강력한 성과를 기반으로 KBR은 2024년 전망을 상향 조정하며, 매출을 75억 달러에서 77억 달러, 조정된 EBITDA를 84억 달러에서 87억 달러로 예상하고 있습니다.
KBR a annoncé de solides résultats financiers pour le troisième trimestre de 2024, avec un chiffre d'affaires atteignant 1,9 milliard de dollars, en hausse de 10 % par rapport à l'année précédente. Le bénéfice net s'élevait à 100 millions de dollars, avec un EBITDA ajusté de 219 millions de dollars, en hausse de 18 %. L'entreprise a sécurisé 3,3 milliards de dollars de nouvelles commandes avec un ratio book-to-bill de 1,2x. Parmi les réalisations notables figurent l'acquisition stratégique de LinQuest et plusieurs contrats gagnés dans les segments des solutions gouvernementales et des solutions technologiques durables. Sur la base de cette solide performance, KBR a relevé ses prévisions pour 2024, projetant un chiffre d'affaires compris entre 7,5 milliards et 7,7 milliards de dollars et un EBITDA ajusté compris entre 840 millions et 870 millions de dollars.
KBR hat starke Finanzzahlen für das dritte Quartal 2024 gemeldet, mit einem Umsatz von 1,9 Milliarden Dollar, was einem Anstieg von 10 % im Vergleich zum Vorjahr entspricht. Der Nettogewinn betrug 100 Millionen Dollar, mit einem bereinigten EBITDA von 219 Millionen Dollar, was einem Anstieg von 18 % entspricht. Das Unternehmen sicherte sich 3,3 Milliarden Dollar an neuen Bestellungen mit einem Book-to-Bill-Verhältnis von 1,2x. Zu den bemerkenswerten Erfolgen gehören die strategische Übernahme von LinQuest und mehrere Vertragsgewinne in den Bereichen Regierungs- und nachhaltige Technologielösungen. Basierend auf der starken Leistung hob KBR seine Prognose für 2024 an und erwartet einen Umsatz von 7,5 Milliarden bis 7,7 Milliarden Dollar und ein bereinigtes EBITDA von 840 Millionen bis 870 Millionen Dollar.
- Revenue increased 10% YoY to $1.9 billion in Q3 2024
- Adjusted EBITDA grew 18% YoY to $219 million with 11.2% margin
- Secured $3.3 billion in new bookings with 1.2x book-to-bill ratio
- Operating cash flows improved to $161 million from -$40 million in Q3 2023
- Raised full-year 2024 guidance for Revenue and Adjusted EBITDA
- Higher selling, general and administrative expenses
- Increased interest expense
- Higher provision for income taxes
Insights
KBR delivered an impressive Q3 2024 with notable financial improvements across key metrics. Revenue grew 10% YoY to
The acquisition of LinQuest strengthens KBR's position in defense and space sectors, contributing to the raised full-year guidance. The company now expects revenue of
KBR's Government Solutions segment shows remarkable momentum with a 1.3x quarterly book-to-bill ratio. Key contract wins totaling over
The diverse contract portfolio spanning naval operations, air force systems and space research indicates growing demand for KBR's technical expertise in defense modernization and space capabilities.
Outstanding 3Q Performance
Strong Bookings Momentum
Raising Guidance on Revenue, Adj. EBITDA2 & Adj. EPS2
"KBR's exceptional team has once again exceeded expectations with outstanding third-quarter results," stated Stuart Bradie, KBR's President and CEO. "Our team's dedication to our customers has resulted in year-over-year growth across all financial metrics, including Revenues, Adjusted EBITDA2, Adjusted EPS2, and notably, Operating Cash Flows. The bookings and awards this quarter align well with our focus areas of energy security and transition, national defense, and sustainability, and bolster our confidence for the rest of 2024 and heading into 2025."
"During the quarter, we strategically shaped our portfolio and allocated capital in a thoughtful, balanced way," Bradie continued. "Our acquisition of LinQuest, a leader in advanced engineering, data analytics, and digital integration, enhances our capabilities in space, air dominance, and connected battle space missions and introduces KBR to new
New Business Awards
Backlog and options as of September 27, 2024 totaled
Sustainable Technology Solutions (STS) delivered 1.0x QTD and 1.1x TTM book-to-bill1 as of September 27, 2024, including awards and achievements in the quarter as follows:
- Announced that KTJV, a KBR and Technip Energies joint venture, has been selected by Lake Charles LNG Export Company, a subsidiary of Energy Transfer LP, for its Lake Charles LNG transformation project that includes the delivery of three liquefaction trains and modifications to existing storage and dock facilities designed to enable the export of 16.45 metric tons per annum of LNG. Under the terms of the agreement, KTJV will provide high-end engineering, procurement, construction management, construction, commissioning, startup and other related services, subject to Lake Charles LNG's decision to issue a notice to proceed for the project.
- Awarded an engineering and procurement services contract for the Beachfield Manatee upgrade, the onshore portion of Shell's Manatee gas field project located in the East Coast Marine Area of
Trinidad and Tobago . The Manatee gas field supports global energy security and natural gas production, providing gas for the country's Atlantic LNG facility. - PureSAF℠ technology, which is exclusively licensed by KBR worldwide, was selected by Avina Clean Hydrogen Inc. for its project in the
U.S. Under the terms of the contract, KBR will provide technology licensing, proprietary engineering design, and front-end engineering design for Avina's facility to produce 120 million gallons of sustainable aviation fuel per year. - Awarded a conceptual study contract for floating blue ammonia production from Samsung Heavy Industries (SHI), one of the world's largest shipbuilders in
South Korea . The study will utilize KBR's innovative blue ammonia technology, suitable for offshore production, and leverage SHI's expertise in the design of mega floating vessels. - Awarded engineering contracts by Seatrium Group to develop topsides facilities for two new high-production, energy-efficient floating production storage and offloading units. The units are being designed for Petrobras' Atapu and Sepia fields in the Santos Basin,
Brazil . - KBR's ROSE® supercritical Solvent De-Asphalting (SDA) technology was selected by Zhejiang Petroleum & Chemical Co. Ltd., the operator of
China's largest refinery. KBR is a global leader in SDA technology with the largest installed base and has been involved in the licensing, design, engineering, and commissioning of 72 ROSE units worldwide with a combined licensed capacity of nearly 1.66 million barrels per day. - Awarded an advisory consulting contract by Kuwait Oil Company for the development of a country wide masterplan for the production of 17GW of renewables and 25GW of green hydrogen by 2050.
- KBR's blue ammonia technology selected by Shell for its Blue Horizons low-carbon hydrogen and ammonia project in Duqm,
Oman . The facility will utilize KBR's leading ammonia synthesis loop technology to deliver cost-competitive and low-carbon intensity ammonia.
Government Solutions (GS) delivered 1.3x QTD and 1.1x TTM book-to-bill1 as of September 27, 2024, including awards and achievements in the quarter as follows:
- Awarded an estimated
cost-plus-fixed-fee contract supporting the Naval Information Warfare Center Pacific Program Executive Office Digital and Enterprise Services Technical Director's Office. KBR was awarded this contract under the Department of Defense Information Analysis Center's multiple-award contract vehicle.$199 million - Awarded the follow-on Space Science Instruments and Experimental Payloads (SSIEP) 3 contract by the
U.S. Navy for continued development of space science instrument systems at the Naval Research Lab (NRL) inWashington, D.C. This award maintains KBR's presence at NRL where it has supported SSIEP 1 and 2 since 2015. - Awarded an estimated
cost-plus-fixed-fee recompete contract to support Naval Test Wings Atlantic and Pacific Aircrew Services over a five-year period. This strategic win builds on KBR's 45 years of aircrew services and flight test support for the$153 million U.S. Navy. - Awarded a 60-month cost-plus-fixed-fee recompete IAC MAC task order with an estimated value of
to provide operational safety, suitability, and effectiveness engineering tasks supporting the Air Force Life Cycle Management Center. As the$140 million U.S. Air Force's trusted partner, KBR will continue to perform research and analyses at Hill Air Force Base inClearfield, Utah , and otherU.S. Air Force locations. - Awarded an estimated
cost-plus-fixed-fee recompete IAC MAC contract by the$230 million U.S. Air Force's 774th Enterprise Sourcing Squadron to develop and create new knowledge for the enhancement of the DTIC repository and the R&D and S&T community. The work will be primarily performed at Naval Air StationPatuxent River, Maryland andHuntsville, Alabama over a period of five years. - Awarded an estimated
IAC MAC task order to perform aeronautical systems research, development, test and evaluation for the Air Force Life Cycle Management Center Mobility Directorate at Wright-Patterson Air Force Base,$113 million Ohio over a period of five years. - Awarded a contract to continue to deliver technical design services at HMAS Stirling by the Security and Estate Group and the Australian Submarine Agency. This work will support the sovereign nuclear-powered submarines facilities and infrastructure program, enabling the Submarine Rotational Force – West, and accelerating
Australia's ability to safely own, operate, maintain and sustain its own future nuclear powered submarine fleet. - In the month since the acquisition closed, LinQuest secured over
of new orders under a unique contract vehicle that KBR does not currently utilize — SBIR Phase III, which allows for the commercialization of technologies designed by small businesses.$60 million - Selected as NASA's Agency-Level Large Business Prime Contractor of the Year. This win underscores KBR's ongoing commitment to critical programs at Goddard Space Flight Center, where it holds three prime contracts, including Ground Systems and Missions Operations III, as well as multiple subcontracts and joint ventures.
KBR recently published its 2023 Sustainability Report and received the following awards and achievements in the quarter:
- Received an AAA designation in MSCI's 2024 ESG (environmental, social and governance) Ratings. The AAA rating is MSCI's highest and is given to companies that are leading their industries in managing the most significant ESG risks and opportunities. This is KBR's second consecutive year receiving this designation.
- Earned a Gold Rating from EcoVadis, one of the world's largest and most trusted providers of business sustainability ratings for global supply chains. The Gold Rating places KBR in the top
5% of assessed companies. - Recognized by
USA Today as one of America's Climate Leaders for 2023. This data-driven recognition ranksU.S. -based companies that have cut their carbon footprint in recent years. - Achieved an industry leading
93% Zero Harm days in 2023 and delivered37% of KBR's 2023 revenues from sustainability focused projects.
Summarized Third Quarter 2024 Financial Results
Three Months Ended | Nine Months Ended | ||||||
September 27, | September 29, | September 27, | September 29, | ||||
Dollars in millions, except share data | 2024 | 2023 | 2024 | 2023 | |||
Revenues | 1,947 | 1,770 | $ 5,620 | $ 5,226 | |||
Operating income | 173 | 147 | 520 | 301 | |||
Net income (loss) attributable to KBR | 100 | (21) | 299 | (286) | |||
Adjusted EBITDA2 | 219 | 186 | 642 | 559 | |||
Operating income margin % | 8.9 % | 8.3 % | 9.3 % | 5.8 % | |||
Adjusted EBITDA2 margin % | 11.2 % | 10.5 % | 11.4 % | 10.7 % | |||
Earnings per share: | |||||||
Diluted earnings per share | $ 0.75 | $ (0.16) | $ 2.22 | $ (2.10) | |||
Adjusted earnings per share2 | $ 0.84 | $ 0.75 | $ 2.44 | $ 2.18 | |||
Cash flows: | |||||||
Operating cash flows | 161 | (40) | 422 | 248 | |||
Adjusted operating cash flows2 | 161 | 92 | 422 | 380 | |||
Adjusted free cash flows2 | 142 | 70 | 368 | 320 |
Financial Highlights for the Three Months Ended September 27, 2024
- Revenue of
, up$1.9 billion 10% on a year-over-year-basis - Net income attributable to KBR of
; Adjusted EBITDA2 of$100 million , up$219 million 18% on a year-over-year basis (11.2% Adjusted EBITDA2 margin) - Diluted EPS of
; Adjusted EPS2 of$0.75 , up$0.84 12% on a year-over-year basis - Operating cash flows of
$161 million - Bookings and options1 of
during the quarter with 1.2x QTD book-to-bill1$3.3 billion
Financial Highlights for the Nine Months Ended September 27, 2024
- Revenue of
, up$5.6 billion 8% on a year-over-year-basis - Net income attributable to KBR of
; Adjusted EBITDA2 of$299 million , up$642 million 15% on a year-over-year basis (11.4% Adjusted EBITDA2 margin) - Diluted EPS of
; Adjusted EPS2 of$2.22 , up$2.44 12% on a year-over-year basis - Operating cash flows of
$422 million - Bookings and options1 of
during the year to date period with 1.1x TTM book-to-bill1$6.7 billion
Commentary on the Three Months Ended September 27, 2024
Revenues were
Net income attributable to KBR was
Adjusted EBITDA2 was
Diluted earnings per share was
Operating cash flows were
Capital returned to shareholders totaled
Commentary on the Nine Months Ended September 27, 2024
Revenues were
Net income attributable to KBR was
Adjusted EBITDA2 was
Diluted earnings per share was
Operating cash flows were
Capital returned to shareholders totaled
Updated Fiscal 2024 Guidance
The table below summarizes updated Fiscal 2024 guidance and represents our views as of October 23, 2024. Updated guidance reflects KBR's strong operational performance and the acquisition of LinQuest.
Updated Fiscal 2024 | Prior Fiscal 2024 | |
Revenue | ||
Adjusted EBITDA | ||
Diluted EPS* | ||
Adjusted EPS* | ||
Operating cash flows |
* | Fiscal 2024 Diluted and Adjusted EPS guidance is calculated using a share count of approximately 135 million. |
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 third quarter financial results on Wednesday, October 23, 2024, at 6:30 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: 158025.
About KBR
We deliver science, technology and engineering solutions to governments and companies around the world. KBR employs approximately 37,000 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, business opportunities, interest expense, 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
The company's most recently filed Annual Report on Form 10-K, any subsequent Form 10-Qs and 8-Ks, and other
1 | As used throughout this release, book-to-bill excludes long-term |
2 | As used throughout this earnings release, Adjusted EBITDA, Adjusted EBITDA margin, Adjusted earnings per share, Adjusted operating cash flows, and Adjusted free cash flows are non-GAAP financial measures. See additional information at the end of this release regarding non-GAAP financial information, including reconciliations to the nearest GAAP measures. |
KBR, Inc. | |||||||
Three Months Ended | Nine Months Ended | ||||||
September 27, | September 29, | September 27, | September 29, | ||||
2024 | 2023 | 2024 | 2023 | ||||
Revenues: | |||||||
Government Solutions | $ 1,490 | $ 1,345 | $ 4,273 | $ 4,025 | |||
Sustainable Technology Solutions | 457 | 425 | 1,347 | 1,201 | |||
Total revenues | 1,947 | 1,770 | 5,620 | 5,226 | |||
Gross profit | 291 | 244 | 810 | 740 | |||
Equity in earnings of unconsolidated affiliates | 27 | 32 | 97 | 78 | |||
Selling, general and administrative expenses | (140) | (127) | (390) | (370) | |||
Legal settlement of legacy matter | — | — | — | (144) | |||
Other | (5) | (2) | 3 | (3) | |||
Operating income: | |||||||
Government Solutions | 123 | 108 | 362 | 182 | |||
Sustainable Technology Solutions | 95 | 84 | 277 | 243 | |||
Other | (45) | (45) | (119) | (124) | |||
Total operating income | 173 | 147 | 520 | 301 | |||
Interest expense | (37) | (30) | (100) | (85) | |||
Charges associated with Convertible Notes | — | (114) | — | (428) | |||
Other non-operating income (expense) | (2) | 2 | (10) | (1) | |||
Income (loss) before income taxes | 134 | 5 | 410 | (213) | |||
Provision for income taxes | (32) | (23) | (107) | (69) | |||
Net income (loss) | 102 | (18) | 303 | (282) | |||
Less: Net income attributable to noncontrolling interests | 2 | 3 | 4 | 4 | |||
Net income (loss) attributable to KBR | $ 100 | $ (21) | $ 299 | $ (286) | |||
Adjusted EBITDA1 | $ 219 | $ 186 | $ 642 | $ 559 | |||
Diluted EPS | $ 0.75 | $ (0.16) | $ 2.22 | $ (2.10) | |||
Adjusted EPS1 | $ 0.84 | $ 0.75 | $ 2.44 | $ 2.18 | |||
Diluted weighted average common shares outstanding | 133 | 135 | 134 | 136 | |||
Adjusted weighted average common shares outstanding | 133 | 139 | 134 | 139 |
1 | See additional information at the end of this release regarding non-GAAP financial information, including a reconciliation to the nearest GAAP measure |
KBR, Inc. | ||||
September 27, | December 29, | |||
2024 | 2023 | |||
(Unaudited) | ||||
Assets | ||||
Current assets: | ||||
Cash and cash equivalents | $ 462 | $ 304 | ||
Accounts receivable, net of allowance for credit losses of | 1,095 | 981 | ||
Contract assets | 214 | 177 | ||
Other current assets | 190 | 189 | ||
Total current assets | 1,961 | 1,651 | ||
Property, plant, and equipment, net of accumulated depreciation of | 277 | 239 | ||
Operating lease right-of-use assets | 212 | 138 | ||
Goodwill | 2,553 | 2,109 | ||
Intangible assets, net of accumulated amortization of | 885 | 618 | ||
Equity in and advances to unconsolidated affiliates | 188 | 206 | ||
Deferred income taxes | 200 | 239 | ||
Other assets | 505 | 365 | ||
Total assets | $ 6,781 | $ 5,565 | ||
Liabilities and Shareholders' Equity | ||||
Current liabilities: | ||||
Accounts payable | $ 737 | $ 593 | ||
Contract liabilities | 381 | 359 | ||
Accrued salaries, wages and benefits | 397 | 340 | ||
Current maturities of long-term debt | 46 | 31 | ||
Other current liabilities | 266 | 249 | ||
Total current liabilities | 1,827 | 1,572 | ||
Employee compensation and benefits | 128 | 120 | ||
Income tax payable | 111 | 106 | ||
Deferred income taxes | 84 | 106 | ||
Long-term debt | 2,560 | 1,801 | ||
Operating lease liabilities | 236 | 176 | ||
Other liabilities | 321 | 290 | ||
Total liabilities | 5,267 | 4,171 | ||
Commitments and Contingencies | ||||
KBR shareholders' equity: | ||||
Preferred stock, | — | — | ||
Common stock, | — | — | ||
Paid-in capital in excess of par ("PIC") | 2,520 | 2,505 | ||
Retained earnings | 1,311 | 1,072 | ||
Treasury stock, 49,161,048 shares and 46,646,024 shares, at cost, respectively | (1,443) | (1,279) | ||
Accumulated other comprehensive loss ("AOCL") | (885) | (915) | ||
Total KBR shareholders' equity | 1,503 | 1,383 | ||
Noncontrolling interests | 11 | 11 | ||
Total shareholders' equity | 1,514 | 1,394 | ||
Total liabilities and shareholders' equity | $ 6,781 | $ 5,565 |
KBR, Inc. | |||
Nine Months Ended | |||
September 27, | September 29, | ||
2024 | 2023 | ||
Cash flows from operating activities: | |||
Net income (loss) | $ 303 | $ (282) | |
Adjustments to reconcile net income (loss) to net cash provided by operating activities: | |||
Charges associated with Convertible Notes | — | 428 | |
Depreciation and amortization | 112 | 104 | |
Equity in earnings of unconsolidated affiliates | (97) | (78) | |
Deferred income tax | 23 | 24 | |
Other | 24 | 31 | |
Changes in operating assets and liabilities: | |||
Accounts receivable, net of allowance for credit losses | (3) | (74) | |
Contract assets | (32) | 43 | |
Accounts payable | 94 | 46 | |
Contract liabilities | 10 | 67 | |
Accrued salaries, wages and benefits | 32 | (8) | |
Payments on operating lease obligation | (52) | (50) | |
Payments from unconsolidated affiliates, net | 5 | 13 | |
Distributions of earnings from unconsolidated affiliates | 123 | 58 | |
Pension funding | (30) | (9) | |
Other assets and liabilities | (90) | (65) | |
Total cash flows provided by operating activities | $ 422 | $ 248 | |
Cash flows from investing activities: | |||
Purchases of property, plant and equipment | $ (54) | $ (60) | |
Proceeds from sale of assets or investments | 6 | — | |
Return of (investments in) equity method joint ventures, net | 36 | 61 | |
Acquisition of business, net of cash acquired | (739) | — | |
Funding in other investment | (5) | (39) | |
Other | 5 | (5) | |
Total cash flows used in investing activities | $ (751) | $ (43) | |
Cash flows from financing activities: | |||
Borrowings on long-term debt | 574 | — | |
Borrowings on Revolver | 343 | 430 | |
Payments on short-term and long-term debt | (81) | (12) | |
Payments on Revolver | (63) | (270) | |
Payments on settlement of warrants | (33) | (101) | |
Proceeds from the settlement of note hedge | — | 150 | |
Payments to settle Convertible Notes | — | (250) | |
Debt issuance costs | (18) | (1) | |
Payments of dividends to shareholders | (59) | (53) | |
Acquisition of noncontrolling interest | (10) | — | |
Payments to reacquire common stock | (167) | (137) | |
Other | (11) | (6) | |
Total cash flows provided by (used in) financing activities | $ 475 | $ (250) | |
Effect of exchange rate changes on cash | 12 | 4 | |
Increase (decrease) in cash and cash equivalents | 158 | (41) | |
Cash and cash equivalents at beginning of period | 304 | 389 | |
Cash and cash equivalents at end of period | $ 462 | $ 348 | |
Supplemental disclosure of cash flows information: | |||
Noncash financing activities | |||
Dividends declared | $ 20 | $ 19 |
KBR, Inc. | |||
September 27, | December 29, | ||
2024 | 2023 | ||
Government Solutions | $ 14,150 | $ 12,790 | |
Sustainable Technology Solutions | 3,750 | 4,545 | |
Total backlog | $ 17,900 | $ 17,335 | |
Award options | 4,215 | 4,397 | |
Total backlog and options | $ 22,115 | $ 21,732 |
Total backlog and options at September 27, 2024 totaled
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 (loss) attributable to KBR, plus Interest expense; Accretion of Convertible Notes debt discounts; 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- and nine-month periods ended September 27, 2024 and September 29, 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- and nine-month periods ended September 27, 2024 and September 29, 2023 and also affords investors the ability to make a more informed assessment of such core performance for the comparable periods.
Three Months Ended | Nine Months Ended | ||||||
September 27, | September 29, | September 27, | September 29, | ||||
Dollars in millions | 2024 | 2023 | 2024 | 2023 | |||
Net income (loss) attributable to KBR | $ 100 | $ (21) | $ 299 | $ (286) | |||
Adjustments | |||||||
• Interest expense | 37 | 30 | 100 | 85 | |||
• Accretion of Convertible Notes debt discounts | — | 114 | — | 242 | |||
• Other non-operating expense | 2 | (2) | 10 | 1 | |||
• Provision for income taxes | 32 | 23 | 107 | 69 | |||
• Depreciation and amortization | 41 | 34 | 112 | 104 | |||
EBITDA | $ 212 | $ 178 | $ 628 | $ 215 | |||
Adjustments | |||||||
• Acquisition, integration and restructuring | 9 | 3 | 15 | 6 | |||
• Ichthys commercial resolution | (2) | 4 | 1 | 6 | |||
• Legacy legal fees and settlements | — | 1 | (2) | 154 | |||
• Benefits related to exit from Russian commercial projects | — | — | — | (8) | |||
• Loss on derivative bifurcation | — | — | — | 104 | |||
• Loss on debt extinguishment | — | — | — | 70 | |||
• Loss on settlement of warrants | — | — | — | 12 | |||
Adjusted EBITDA | $ 219 | $ 186 | $ 642 | $ 559 |
Three Months Ended | Nine Months Ended | ||||||
September 27, | September 29, | September 27, | September 29, | ||||
Dollars in millions | 2024 | 2023 | 2024 | 2023 | |||
Operating income | $ 173 | $ 147 | $ 520 | $ 301 | |||
Adjustments | |||||||
• Net income attributable to noncontrolling interests | (2) | (3) | (4) | (4) | |||
• Depreciation and amortization | 41 | 34 | 112 | 104 | |||
• Loss on derivative bifurcation | — | — | — | (104) | |||
• Loss on debt extinguishment | — | — | — | (70) | |||
• Loss on settlement of warrants | — | — | — | (12) | |||
EBITDA | $ 212 | $ 178 | $ 628 | $ 215 |
Adjusted EPS
Adjusted earnings per share (Adjusted EPS) for each of the three- and nine-month periods ended September 27, 2024 and September 29, 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- and nine-month periods ended September 27, 2024 and September 29, 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- and nine-month periods ended September 27, 2024 and September 29, 2023 by adjusting Diluted EPS for the items included in the table below.
Three Months Ended | Nine Months Ended | ||||||
September 27, | September 29, | September 27, | September 29, | ||||
2024 | 2023 | 2024 | 2023 | ||||
Diluted EPS | $ 0.75 | $ (0.16) | $ 2.22 | $ (2.10) | |||
Adjustments | |||||||
• Amortization related to acquisitions | 0.06 | 0.04 | 0.14 | 0.12 | |||
• Ichthys commercial dispute costs | (0.01) | 0.03 | 0.01 | 0.04 | |||
• Acquisition, integration and restructuring | 0.04 | 0.01 | 0.08 | 0.03 | |||
• Impact of convert accounting and Diluted EPS share count1 | — | — | — | 0.05 | |||
• Legacy legal fees and settlements | — | 0.01 | (0.01) | 1.01 | |||
• Benefits related to exit from Russian commercial projects | — | — | — | (0.05) | |||
• Charges associated with Convertible Notes | — | 0.82 | — | 3.08 | |||
Adjusted EPS | $ 0.84 | $ 0.75 | $ 2.44 | $ 2.18 | |||
Diluted weighted average common shares outstanding | 133 | 135 | 134 | 136 | |||
Adjusted weighted average common shares outstanding | 133 | 139 | 134 | 139 |
1 | For the Nine Months Ended September 29, 2023, adjusted share count includes anti-dilutive shares for warrants excluded from Diluted EPS share count. |
We have calculated the updated 2024 guidance for Adjusted EPS by adjusting Diluted EPS for the items included in the table below.
Fiscal 2024 Guidance | |||
Diluted EPS1 guidance | |||
Adjustments | |||
• Amortization related to acquisitions | 0.21 | ||
• Ichthys commercial dispute costs | 0.01 | ||
• Acquisition, integration and restructuring | 0.09 | ||
• Legacy legal fees | (0.02) | ||
Adjusted EPS1 guidance |
1 | Diluted and Adjusted Fiscal 2024 EPS guidance are calculated using a share count of approximately 135 million. |
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- and nine-month periods ended September 27, 2024 and September 29, 2023 by adjusting operating cash flow provided by operating activities for items included in the table below.
Three Months Ended | Nine Months Ended | ||||||
September 27, | September 29, | September 27, | September 29, | ||||
Dollars in millions | 2024 | 2023 | 2024 | 2023 | |||
Cash flows provided by operating activities | $ 161 | $ (40) | $ 422 | $ 248 | |||
Add: Legacy legal settlement (after tax) | — | 132 | — | 132 | |||
Adjust: CARES Act temporary tax repayment | — | — | — | — | |||
Adjusted operating cash flows | $ 161 | $ 92 | $ 422 | $ 380 | |||
Less: Capital expenditures | (19) | (22) | (54) | (60) | |||
Adjusted free cash flows | $ 142 | $ 70 | $ 368 | $ 320 |
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SOURCE KBR, Inc.
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