KBR - Earnings call transcript Q3 2019

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Operator

Good day, and welcome to the KBR Incorporated Third Quarter 2019 Earnings Conference Call. This call is being recorded.

As a reminder, your lines will be in a listen-only mode for the duration of the call. There will be a question-and-answer session immediately following prepared remarks.

You will receive instructions at this time.

introductions, to now Miss and the to remarks over call Alison opening I like would turn For Vasquez. Please go ahead.

Alison Vasquez

Good KBR's third you for earnings thank morning, call. quarter and XXXX attending

are President and Financial Executive today Joining and Chief Bradie, Sopp, Vice Mark Officer. Chief us Executive Officer; Stuart and President

our Stuart and presentation call the of the Investors for Today's earnings highlights discuss available quarter, and on outlook, section open market Mark we at results. financial will will is the our After from kbr.com. our website these remarks, questions.

would like the potential on remind events views to may outlined include audience their discussion I about that forward-looking impact and KBR's as X. this on performance statements, reflecting Slide future

results that impact available our and matters from financial are to forward-looking risks statements. These These actual website. in our operations XX-K differ could recent involve our most risks significantly results uncertainties and discussed on our and cause

I'll to over Stuart. now the turn call

Stuart Bradie

you and for morning us. Good Alison. thank Thanks, joining

on start Slide will I X.

security on subcontractors we zero Another harm September. the the of of including excellent that's achieving quarter KBR We safety, across by company across month all health, manage. the and strongly environment. the every quarter in day on close And the

done outstanding recent people. by so we This is times. an The month committed and third achievement have delivered and XX,XXX driven in our passionate

X. I said, Slide us is good on quite HSSE nicely simply As to often takes good business which

were XX% the year-on-year. absolutely strong. bookings were I'll Execution contributed spare flow line, margins XXth and business growth. quarter, grew Each the segment new in in The and grew excellent, short, was In overall row. to a overall business cash thus

test we in over happy completed. of And includes likes be its to clear, power all the on Texas And report I'll more granularity project performance any with moment. station give And the this successfully to entirety. LNG also handed that the

funding retained. And the to are the and our That's The above project is small warranty now for support to has in are producing course, commercially. punchlist team at nameplate previous seeking typical with business. site de-risk LNG our trains demand complete on or The the and counterparties. focus exporting capacity recoveries been estimates. a The of shifts

also of Germany across which an project know of that U.K Aspire ago back a which the award XXXX, part under well. to to double is Garrison's. so building called doing modernizing soldiers years we Army structures recall You to Army the The bring may we hundreds important was number families’ XXXX the of British and in won mission and objective of

and cooperation am execution. MOD on report schedule. in I to pleased has of demonstration U.K. delivered the over with all a critical the the assets This focus really well were our on done program clear is summer

a was showing leaders backlog our culture. whether and a recent where off strong actually focus we've or combined to work On course customers underpinned and a sometimes. about was commitment. team promises at of and key performance talking slide delivering on on worth high-performing been X, Strategic winning we with We paying being discipline this thought examine execution things and by it right approach commercial and KBR the to

think speak numbers the understated. and somewhat themselves I for fact in

unexercised exercised. likely option more are term not you're as do units we which As aware longer the contracts submissions than include government on

backlog Xx track in delivering on our to beyond LNG quarters before our which for book-to-bill these with FID XXXX feel we of XXXX. – the especially perform. sustained growth this and business strong all May our book we X.X, year, developed this positive energy have reset important straight in growth continued underpin trailing for growth. XXXX to early Also XX-month we excluded each above about and our that Day, solutions alone at in as In said segments highlight, we remains our QX Investor numbers segments having in and But six into expected book-to-bill levels

sizeable This near-term government nicely solutions. in Attractive from offerings front slide all vehicles in is solution engineering and of continue with opportunity platforms the us. slide cycle, new sustain provide you government effects. to to good technical pipeline opportunities a Multiple business for about the hopefully aging LNG afford expansion gives Defense in build number cash synergy takes technology upper of of profit contract and benefit its modernize KBR defense to continuing looking and and as end feel has a to cyber X. expertise us opportunities onto This a segments and experts Department large to a KBR

future, as we well certainty uncertain. our admitting The progress well are as double-digit making the through graph towards the The targets aware you right CAGAR securing XXXX. only on shows today in is

was As believe KBR it delivered segments ago a some on we longer-term that imperative our position opportunities. volatile time in markets strategic attractive to differentiated less such,

account that XXXX, Our book this It of is for and duration short XX% excluded that success But it and continued the strategic revenue. [Indiscernible] more this LNG XX% unknown of our confidence of demonstration today you Also business of a until our not is about is also understated. gives of our through on is growth. in up and makes smaller and with policy, course typical of clear projects annual again, keeping does shift. insight

be before times a KBR. is As I've great of to said part many it time

take hand detail. you in a bit through now Mark. more to will will the over I He financials

Mark Sopp

X. you, up on Thank will I slide and pick Stuart

indicated, investor quarter and Stuart growth foundation These and setback businesses a our coupled energy in discipline now in seeing are As bookings. to strong we flow delivered cash from has to really overall continue May growth. executing and technology in value report with we pleased contributes solutions continued grow significantly and business, ES to conference, and will government revenues our our with strategy. for together and Consistent growth expectations are successive focus earnings another the our

were basis. drivers are on good experiencing selectively to ES conditions QX all bring we are cost in new our where for within areas reimbursable focal bits ES profile. We business market risk in a our able growth

board Our business. targets. with our increase across long-term segments consistent in solid for three all from our execution primarily year-over-year margins variants with and operating margins income The energy the reflects comes solutions

write-ups, from project and execution closeout. Our last strong margins year benefited

in trend continued as We closeout driven highlighted and a [Indiscernible] quarter million. completing recording of non-strategic our project in by $X off business this projects new benefit the from all XXXX, successfully ground about coming a Stuart business. this getting QX, our parts

records new have are new at now incidentally services including in operations Rains] is Facility fighting growing human a ramp force. right couple Wallops government growth solutions, elite management contracts and Driving We ramping protect and Flight the our have providing war our of the white-coat continued families. and contract cyber in for NASA solutions, projects X of fastest XXX the project our our up GS, defense mission agency space with professionals fighters or risk new and which where providing [Rock contracts up about health performance now of their our to medical holistic of and part GS psychological services we coated the a for our including

Also reimbursable into as including new Texas refinery XXXX. and our methanol Louisiana, up all ramping in building Greenfield we expansion Permian all a in project expansion again a look momentum project the and ES, forward in projects midstream project in

as expected quarter. for the down taxes $X.XX all together the adjusted and EPS items Continuing of page were attributing to non-operating

we in an We're excellent that. that You'll see see quarter flow. really operating to cash had pleased

focused the across This reflects company. on million working $XXX about three just it's quarters. capital management the first more through Now

company enabled discipline our that working and portfolio operate to capital. Our continues negative the with

results You'll are later see so strong guidance up on based far. we bumping the we've seen

attractive management are as working Now producing board. All is capital performance onto organic growth. rates results targeted the effective at across trending by our three planned. and slide XX, segments segment. Margins are Segment more

mentioned, today seeing we ratio our in executing for and growth. Stuart we're we also of segments success As further demonstrating well QX building in-house exceeded are the of in on a have projects all book book-to-bill business one future that

fueled an early excellent with logistics in seeing completed in for solution all Tyndall areas. aggregate truly and government are in targets In and company QX slower months. segment long-term the Book-to-bill off-- summer we growth little by business in project line QX, but a the with ongoing the our X.Xx in result

serving to QX with good last their strong and the Force on commitment Air a and the we base and vital security and Tyndall restoring Base particularly X,XXX and projects people year about contract the plus talked settlement for across hats entire its on in over after since national dedication KBR incredible of like certainly Tyndall our interests. our to the our Government the role We here to rebuilding execution were team solution tip previous of hurricane to margins team government. favorable a claim EBITDA

over our can great deleveraging. year. also XX% you of which see QX grew Certainly, accelerating is a As result last EBITDA

mentioned I good were as which organic GS or flow to earlier. robust and technologies. five The posted softer rebound days our right XX% XX% outstanding particularly segment our about pace this the a bookings margins talked strong earlier to technology of ammonia of market ahead in this after Certainly improved quarter quarter segment contributed see cash of result targeted we DSOs its the The with year. nice target. on QX growth course another sales

solution are all offerings growth topline XX% In we both organic. in our segment, year-over-year projects over up energy seeing together our now and services

industrial design spanning business engineering primarily services the As segment which studies, the Middle impressive services. services, compounded U.K. offering growth and consulting two-thirds XX% U.S., has of with of the recorded the this and is in part XXXX, debottlenecking about management, driven the annual and East project

is expected ES global up On Margins driven both digits. activities Good they regions We’re some territories. their mentioned the leveraging SABIC mid our big-ticket opportunities EPC as and large on United partner investing with were being a and relationships for growth new of to expand near this by ramp horizon. diversify projects example Aramco States. and term the their single side, our earlier into clients reimbursable up project pumping as LNG with the in new in portfolios the is of

be our in of said we this in stages margins is the As this expect where cycle. early to conference, up May investor

all healthy by flow margins booking to progress propel good of business three excellent really future respect and summary, track, to In with performance. balanced cash growth, particularly on our the lines

in P&L the the covers That segments.

on on XX. slide move Now, we'll structure to capital

ongoing deleveraging we continued debt of our have leverage this quarter now our with see gross targeted ratio and and X.XX. growth EBITDA you'll effectively reduction modest story As levels has reached

that use of have achieve cash and flow to we able quarter continual this mentioned, meet the completed Stuart delivery [indiscernible] commitment. we free been As deleveraging while substantial to

this in think be seen Also generation completes disciplined to upgraded from our cash ongoing conference. earnings, ago unchanged week our credit the BB- cash communicated what you will to by you priorities May and now I was we for growth SMT other deployments about available a our risk have flow with reflecting and rating might free investor back management. in

to $X.XX three the the year. million on results Back $XXX That's up guidance to the And through flow million bumping full also building EPS the the strong $XXX $X.XX our and XX our are financial slide finally, adjusted to to on we first summary. Stuart. guidance increasing with XXXX cash now operating quarters for

Stuart Bradie

Mark. you, Thank

now of of complete Now now on three targets KBR years new onto will our contributing, excluding and cash the quantum negotiations. De-risking and claims, unpredictability Growth arbitration year-on-year etc. set rulings, so the XX today's of a But is presentation. excess for all It's our absolutely is done performance forward matters. terrific. we almost and going true within are to value our excess with Consistent forecast. timing and slide those given story. hopefully close all segments delivering. with three XX% now, KBR growth

cash this all paying both positive in on cash importantly there opens our and earlier. and EPS opportunities leverage focused as focus as been and tomorrow. deployment off clear today Mark raised momentum KBR has cash on on Our we've is the presented and on such aperture reached Guidance is targeted

now the will out operator the to back thank So question. I hand and open the who call will you

Operator

Thank Fisher you. take [Operator from Instructions] Please We question our go first will UBS. from now ahead. Steven

is open. line Your

Steven Fisher

happening be the good are latest here a the give subcontractors? Can of starting off exists. expectations what customer may us and morning. Clearly with Thanks things potential what and your on good you just just lots from I resolution

Stuart Bradie

in going the is that's the power to think course. never still station still expectation a Yes. as know just on recent XXXX. planned There's I ruling I the And February confirm arbitration that the you holding. Steve ahead with date and is mean

we'd XXXX typically main As the progressively that many mostly themselves -- as unknown XXXX. resolution year. go for next I The said resolve timing in customer these of some not forward will of we but that of but in rulings is arbitration the expect

opportunity in the door. Not process fully facilities is assuming they're the I court the precedes of mean always of there preparing a nameplate phase relationship. about now capacity. in different under We're

trying the with opportunity spend XXXX time So avoid I to into now and think, early there's to a of money. customers paying just move lots great lawyers

Steven Fisher

in QX. sense the operating cash up strong in then cash About million That follow the flow, XXX flow and million makes just XX to versus on QX.

can just in that headwinds related talk or as QX about on guidance So both need and and flow of just are would kind takes puts forward of payments, we done any revenues etc. on picking that exist going cash that without and flow now drag of some grow? you upfront cash and really on up the particular what XXXX capital getting tailwind into start working to CapEx your are

Stuart Bradie

delivering the working the as all growing that is team but are I is done an think cash would and is best a on are as and and growing that they know let and rates like actually capital I Mark but your where what that know sustaining mean you're business and that on KBR probably market KBR amazing to this consumes you Mark particular one capital businesses has detail growing the working follow I we've answer. I'll people is hats and challenge to the out focus from double point year-to-date conversion well and KBR achievement and and I thing cash at off all done strong on digits

Mark Sopp

Hi Yes. Steve.

does Just to not to that metric we an just flow. really The clarify it operating cash guides. impact have

will of an stop now -- the which operating are to So activity clarify investing this just activity funding they that. was

of completion cash reported flow impact doesn't the and expected. as on really So operating as an have that

guidance up so that. We are are with pleased bumping we

but a business also growing we the consume some making mentioned are progress capital. which does as we're Stuart So

one-to-one much our any net fourth we the that convert wanted everyone's ahead conversion expectations are reflecting but our think quarter So to conferences cash the some improvement efforts time around with be cautious still and company pretty in over to term income quarters May we basis investor show consistent said one hard we longer on what in expect I tough.

better a that sometimes not Sometimes but over expectation. of remains we'd the course be better our full year

Operator

Thank you.

take question next will Capital We Markets. now Sean KeyBanc ahead. go our from Eastman from Please

open. is line Your

Sean Eastman

well job this done on Congrats quarter.

to year. capital for First target good that up outlook we against me in just plans into in the a cash as to adding third time the dig be question and next where like capacity? the to in acquisition just maybe are at appetite acquisitions this pipeline is, better look point the XXXX leverage in quarter you guys relate that for back looking the of just Could you allocation speak versus here bumping on how given buybacks is focused on terms

Stuart Bradie

and and successful as and Shawn this lot mean and frogs times I to I we've the precedent we've our over we've think thanks. we and with where done value about we very that a very but has been time do of on many that considered way talked we kissed pursuits continue so. I said integrating strategically

I and to go said the clear have XXXX. for but passionate opportunity it buybacks we aperture want very that or and can acquisitive -- would a cast about acquisitive but don't all in very something is that we been and prove appointment of be us that's and ultimately and focused much highly technology any acquisition government. is potential like talked we're course about culture arena fit in considered overseas in obviously to as We've rules difficult is important and into now terms and we areas options of talked Strong So very the very two no to it submitting as in very-very we we and about look so compelling opportunities things can three [Indiscernible] with that's way kilter open unless find at we've an that are that clear doing us. or cultural been

Sean Eastman

bit in just on here government if I elements than type anything I'm some and actually we was was wondering in third forecasting a margins Great the came third quarter? quite the the the better whether of there or quarter. infer one-time hitting future can

Stuart Bradie

we a We've and remarks really prepared mentioned the Also prepared that Germany We third did the on very done has sector degree. us. our be the up in in delivery was performance strong quarter. really a mentioned the return Army's from also it for settlement to seen for Shawn, program in well of to that structures ready successful bumped the third quarter Aspire. favorable in I As remarks in that have that of lot very some

I very would occasionally and some think expect the targets upper what is think is to we like QX as have way we about the adjustments favorable we've norm so the digits government margins single helped where set longer-term and which and down upper focused us piece margins together is the forward basis. single domestic sustaining continues but our international it should going to of the again blend be be to a by on mix favorable you digits

Operator

you. Thank

will is our question We next Jamie ahead take Please your now line Credit Suisse. go open. from from Cooke

Jamie Cook

a the a Hi on would in whether a be assets portfolio you looking have shareholder broader that on by dynamics at some being view good some industry, valuations you value think people One guess now government quarter. morning. pretty your the interested of, on back I sale acquiring sort nice makes Congratulations the of couple that on questions. given in business unlock nice could the happened portfolio. store a just of technology further your I

an of my competition energy again competitive cost-plus can to we more whether left change second pricing have conditions not in lot a you environment a back terms power. you the dynamics there's and so how the question move view given solution of just your a guess space I limited and towards guys sort in on

to contributed that And you then close we government quantify on and Mark, did know last guidance. Thanks. out to so sorry, the the of question the my quarter how just

Stuart Bradie

Okay.

happy today. at could to Jamie think stands it as your it we look portfolio and question, tell you our I we're on with So, first

growth the the we said to as going at solutions and in Investor the at particularly forward vehicle look you quarter in energy Day If and side.

in are all a in and is this synergy and in we're particularly commercial world government world and commercial the lot digital so other contributing us government great space. think NASA to the from and sort the just balance I into seeing But the now and that allows that the we've we're operate businesses and and of of the There's a side like robotics things culture got.

that have on more think I progress on market a we'll why and bit compelling. it bit said not on of probably So, give a the Investor Day. that's our But to the we little

happy the on with the Mark business commented So, balance but have we're and portfolio pretty we the in and that.

But that we the continually happy pretty but options look brings value we're that at today. on

In terms of time. If congratulating where KBR interesting everyone very it market, a I the on a energy went back, nice we are quarter. is is on

to quarters great nice actually very we've we've and at not and that improved profile. been the going certainly eleven on work our about and disciplined more work market shipping is taken others. gives fits I'm is for it opportunity filling on of think It's comment terms that risk the in that's up way the But I the reason us

number the the in LNG U.S. that's think and why upbeat particularly I so, projects of tomorrow. about on registering And players very we're

that's I are strong very think momentum a that's that seen continuing about on. why talking we is

lead pretty and the we again competitor feeling pretty can government restricts profile then against Mark about good or our about good actually good that the as numbers? to So, win what being feeling position Mark backdrop will earlier on pretty the feeling tomorrow, and risk

Mark Sopp

Yes real quick, Jamie.

the where to million was First $XX range our around expect right and in margins your X%. The were million would them favorable adjustment remarks. $X excluding you for that thanks

Operator

you. Thank

Khanna your go from is question We will ahead, from Cowen Gautam our now open. next Please line Co. & take

Unidentified Analyst

Good this Gautam. guys, morning. for Hey Dan is on

Stuart Bradie

Dan. morning, Good

Mark Sopp

Hi, Dan.

Unidentified Analyst

on on the What's that timing resolution? So, just protest one LOGCAP. expected

Stuart Bradie

good Yes, question.

and that to certainly of the it out to been date commitment of that the that been know protest of no traditional has absolute there's you As and core moved and the The arena. courts. early set by date for in reeling sort into the sort December army quite stick

quite one back in clear yet to to book is to as but that resolution of looks that December not it you And in we're December. QX it if So, December timeframe. like expected proceed certainly expecting is log in whether or

Unidentified Analyst

thanks. it, Got

Operator

you. Thank

now Please Vertical We Michael line your our question ahead, next take from Dudas open. will from Research. go is

Michael Dudas

Good gentlemen and Alison.

Alison Vasquez

Good Mike. morning,

Stuart Bradie

only mentions for because laughing Like was to I us, Alison I who the pointing so that. you're one thank you was

Michael Dudas

That's chaps. Yes. great,

mentioned there. profile Risk changing you first So, the your for government services. I or remarks you getting question, and in what and think opportunities on it's better

Maybe bit or with a customers risk like better just on or or could that. and And generate better from growth to you more you DoD for you asking better fees a better do terms elaborate just it’s more? is margin NASA, to can in OCR

just little going on you're a when So, XXXX. into thought that

Stuart Bradie

the Yes, we're of It And really mentioned terms I think where of was I the of context opportunity the don’t in areas in Mike. progress we've had think to GS, we're seeing in the house. in we've the maybe a particularly focused side but risk energy certainly set government.

bundling, we we've right, pipeline multiple in as got a a some we've over quite You're the prepared XXX those million got of remarks. in our laid continued significant opportunities out

the space fastest that was and So, is yes, growing of our business. part exciting

And you last which as well quarter great shows a it because engineered. was balance was see

good seeing the terrific. a lines lot the I think is synergy we're in balance out the in between which business playing and business is So, of

Michael Dudas

or up continuing for issue, you term any guys Any And pick thoughts resolution what's visibility parts. on near in to all? expect other a at

Stuart Bradie

Here right? we again, are

Mark Sopp

many getting we're arm to used of for this the so years. Yes, and

cycle. good that what's firms election so, And years the congressional even for spending of should their how through the the much be consensus couple is next

and paper risk now start business. and the happen. CR to impact have October. And in dealt and They there's a the fiscal the really with got just it hopefully activity government really measurable seeing we the of like here that year will past had we're shutdowns, on things normal we've Though those as in

allow through we it's that mission that so, those sustain be helpful to are work period. in the to And areas critical that

we've particularly really worried, So, been through here you not know it. before we've navigate

growth defense in from. the articulated in that and back to And hopefully again, the May spring, happen the better strong way to budget send we that consensus news the will congressional pave is have summer

Stuart Bradie

across the and right. think said which Mark we went through I you I this And just, as last year. And impact that's Mike KBR really. know the mean was minimal

on I will happen. mission activities is not everyone strategic and the expectation -- and think focus what out again that critical that if the played from

But areas are you just given as minimal I focused. we the think the KBR where government impact know But be is in unpredictable. would

Michael Dudas

And I you enquiries the my the strong is licensees we appreciate the better to final question focused the for are that. front. are some on. on technology When about guys opportunities still opportunities are see, or or or there of share paced areas that you

You're for you real getting ahead there types about and reflect their roads type despite that of still interest. investments maybe is to this still with the There's of global on front? concerns on And and can economic future these appetite CapEx prices. go

Stuart Bradie

Yes, technology. of pipeline We're seeing in slowdown the opportunities we not any in did.

that bit think detail. in our that have aboard. I center a Actually business and just examining I'm of so we technology last beauty really more week the in India you India where looking at technology

a going over it, Day the last a Technology and And played you to years. very we K-SAAT and bit out and really like And portfolio stable has at talked double disrupter. we've few technologies we're know the think are Alkylation Investor found our I is little of like well it

the performing really and catalyst. a the commercial safety we for terrific of terms the And anyway rights is that and get starting traction And own proprietary scale running sort is a first and plant of from up to well. that's perspective, lot of in

and up weeks past is As little. pricing and coming few in Mark a ammonia last the where back the that certainly has said, backed market the

know and food we're that driven So, that's seeing of that. by and and sort like not production GDP things you

opportunity. globally. We're any huge in we of portfolio. KBR of of a at so of that and large not that better cycle disruptive fantastic got So, we're much technologies into slowdown seeing pipelines because seeing we're some not mercy We've more about the ammonia feel

to and will business So, we certainly -- certainly over backlog XX% we that that think is years, see that today, that has and do continue. continuing that feeling I it's we the got KBR back XX has conclude I think

Operator

Thank you.

next Brent Please Davidson. comes open. Our line from question your D.A. go from Thielman ahead, is

Brent Thielman

there the technology. this just a The think into some business energy Is ammonia solutions you've established about Great, year. I thank capabilities revamp there? you. slower being Hey on talked in you Stuart, follow-up good that pick-up got any where

Stuart Bradie

lumpsum we Well, But doing revamp turnkey assigning perspective did and from in going forward you be focusing the that we've we been very I arena. clear arena proprietary are we in mean people and lot I the is that too think like a know and things will that. licensing equipment lumpsum on catalyst not

of clear focus area and everything We've Ammonia supporting build provision doors key lumpsum been happens. on that focused in we'd certainly so be others new EPC want there very extent again But on is the our typically LNG. some LNG to focus the technology. build lumpsum that who and to is

its. money, And you that at quite frankly the our make we but if value, look shareholder good back historically that's where at KBR that's when

Brent Thielman

Okay. high again there. of talked all seen energy you profile have on I guys I sort the about competitive of and of that think kind the visible environment on out evolution solutions, And guess then, we've projects the

standpoint? that big piece in still Can a of up of backlog a you talk about smaller what a competitive from it the made just projects terms make you're seeing

Stuart Bradie

Yes. license from market a to you sort work. you compete it know if is competitors know it a for plus what you four [indiscernible] a know I in called varies license some is as GS mean of market-to-market. you them there. like the like you example There is will And have need and you if to

the the because main the joint where as of joint probably the are and with venture We SOCAR there. stay of

it think depends. I really So,

an emphasis technical I frontend think from the put lot smaller on designing's for customers. the a incredible that's and There the commercial suspects. is of usual solutions

sort really looking lot what around thinking of a of So, that. are pre-feed we're for next stages. doing That's there concept they smart and

crews people and that know Needs it's Tech etcetera the adjusted So, and usual being the [ph] Wally's [ph] you [ph] there.

in really environment. competitive not change larger that shifts. significant And I it's in we're there the much that think So, projects that that seeing

Operator

Thank you.

Our from Tobey Please is line go open. SunTrust. Sommer from your comes ahead, next question

Tobey Sommer

train LNG of some LOGCAP on elaborate kind you forwards the of Could opportunity your you. of V in in not Freeport for the Thank and backlog? sort

Stuart Bradie

mean spend the in Afghanistan the Tobey what in indication I on that together gives we're U.S. a out that of think the really some the and kind we Command historical Day in uptick there. and see you doing to Europe on put LOGCAP Investor I what way V then laid sort of of and

I most it XXX got million think [indiscernible]. of

no probably course comes through. quite a uptick guarantee was reasonable but there's that It if of

have to you and So, and we'd to the engage award back that [indiscernible]. get a why look officially is I at try think go we bit we'll start when and LOGCAP more

best reference be presented one EPC contract really seem and that I I signed to in is comes May. we we've risk terms the financing think on know the got in the don’t there then takes there's tier of with down going X well But negotiations the pretty much to the Freeport LNG, have off we And well. too uptick is advanced. discussions and

we the of And to disclosed putting do policy that we EPC number in been then. consequence that our that yet. through the expect not really into we'll contract keepings So, doing on have with that a QX we've that. in until But by and that's as come are be backlog that

are benchmarks of lots there. there's But

the of we've train pushing three know the on gotten by signed I and we the CB&I of $X.X probably that's number too, think you the CB&I look given and can we And probably up That's billion. before said to at that sort this in some well. and that. zip value difficulties then you we're that get can and of code that disclosed that say

which Command European rate, you for in our if really want are if I imply then assume Europe, up in -- specifically But give forward clarify you you all say about in the go there, cap, fighting. Probably everything pace our the in run did like what that as the can example, could previous previous if is specifics to million and $XXX Eastern that's and it assumption. same positions to assuming same times just add exactly contractors the incumbent I more until a such So, Mark were I we would and at XXXX just is a bump don’t risky correct. contractors on Afghanistan NORTHCOM

was but go they honest we why so and up activities we we them Iraq those the our to data provided have and go Afghanistan temple, that's than points down really be only up bigger So uptick and go position. been suggest. responsibility nonetheless our we and targets than expect than more numbers an by. our cautious to targets, that did that because bigger in We've But is our longer-term previous area those have XXXX conservative

Tobey Sommer

That's or what of big you. kind government and Thank grow organic see could a you we're years helpful in even if the you and the of ask you business So budget that do something agreement for you two-year kind organically? CR given quarters growth visibility on though that out of have context? think can going many how you're to kind think and in I

Stuart Bradie

Yes.

in growth to of what to the in XX% over that long somewhere level which term is remarks graph double-digit there we government is chunk and growth forward supports relate represented of organic X% the going I secured we've laid arena of government would we between a terms think big period. back the that in course a and the and out prepared in the the itself that of

sustainable and that's think I we number to work would willing to seeing We're actually deliver certainly that. and a So on probably.

Operator

you. Thank

next We go Please from America. our now Bank of Michael will Feniger take ahead. question from

open. is line Your

Michael Feniger

company such my of ES? suggesting does seeing momentum solutions, based disciplined certainly energy growth the pulling questions. competitors. in missteps include the wondering for offering, taking backlog service Thanks the the the what it growth just Yes. strategy has risk/reward you're avoid opportunities even make in LNG helped LNG on pulling, I'm you the back on framework observed on should the -- by some KBR

Stuart Bradie

I very think being considered. mean, we're I

that's think feel portfolio negotiated do two then that best describe of with on We've won't horse against a race it. good that the are customers which in silly. to competitors a got either all feel we now will way anything and of probably we properly opportunities I behave then

won our think so we basis set, and I between one the FID. pretty long opportunity are I that And assuming we've terms mean feel in and targets one of I range from good LNG's zero

of profile pretty we strange that we've that. that know and we that and So a into shares but like opportunities deliver terms make actually that. in them risk going money on feel over that and with I might profile And we're a and the this sound can going to margin good we're concept got about promise above thinking a things

I favor times first I that today and second good So I correct. as but hopefully to our competitive out or that's not do interesting one think the in the win win be to many and it's it's said an to sometimes okay proves market it's one think later one down

Michael Feniger

can about specific customer discuss you're XXXX highlight a there seeing opportunities you on talking basis? on a just and just multi-year -- really that into Thanks. know but sensitive And I the just and a its

Stuart Bradie

towards obviously Sabich. a quite significant mean, IPO. moving I They've portion of they're acquired Yes.

chemicals So about if been you in that of context. there the it have think also

between of at a U.S., them in course be to and the opportunities -- U.S. good looking the very so the continues pretty ethylene as a etc. strategic and So investments the that well two they're as there. complex golf of making ventures, on large the ongoing in number work

more in supporting a We country Saudi places. bit of Arabia places them as itself. to out and help ongoing also other in for we for developments they branch And looking were work like the China quite of do and investments both start seeing more in kinds

course got deploy that that budget over of think I So they've looking to capital they're the large five very years. the next a

What that they a towards moving today doing IPO. is are of bit probably prioritization they're little

think is sensible seeing would a I that. that thing be think I we're

delivery those years the that for four opportunity the job probably along do end the good think go record the do pace day business but three, and doing at I not, past over the think at these opportunities. helping the our is can I is frankly that the you certainly a So of us projects and be positioned relationships best development same

Operator

Thank you.

comes Deutsche open. Dillard Our line ahead Bank. from Please next question from Chad go is your

Chad Dillard

Hi. guys. Good morning

Stuart Bradie

morning Good Chad.

Chad Dillard

ramping grow about Can pleasantly talk by whether the for you is mentioned surprised get are you was baseline you peak this project. what rate the pretty the up we I midstream just sense So of methanol, in the facility want from and from and the to firing far and the how revenues. big expect the run that? ES projects XQ hit when a some you away to to expect I

Stuart Bradie

we're I your take beginning. Chad, Yes, just question think

if run We really feeling that projects we other well of pretty you're into is XX% the those do growth into set in So peak Freeport sort things that even the and on the the uptick the the and future that optimistic XX% I profile and next say within and think said and the are late certainly rate would business year way that well best that during and layering LNGs period. year the through achievable of like that's say we're after about will targets probably to risk we that to out. come

I and So a work our and the some awards doing lot are that getting employing of discipline because execution. quite interest again repeat we're an think the we in of we're

be think I all it well So going for as forward. and XXXX

think I So see growth. you'll continued

I and that around think may excitement you'll sector see for continued us continue.

Chad Dillard

it you're then think you competitor I Stuart side. seeing Got and on the LNG that smaller mentioned based a

LNG you're as Or could pricing what you any a opportunities? bit up are XX? market dynamics. just you're better Just beyond just to we that's talk you actually incremental curious in actually little terms maybe Are seeing go you it Freeport just into seeing seeing of opportunities terms whether broadly about make

Stuart Bradie

we certainly mean we well. very I is and thought for the market market in the little the gulf while that prime U.S. about Yes. next the know us course that

for the struggling understanding and some extent that to up that the consequence and do of the would of knowledge or certainly see and either that's our filling base Coast as some reduced to and significantly. appetite a way the set of has do we work in arena management Gulf competitor it us execution think from risk I a perspective. a competitors obviously So from really an We good

comes to two that least at I think all conclusions. So down

which that arena companies is first terms left to not will competing in that are and conditions. up that of sign The the stupid

And and out and the the it first will transfer the nicer up -- as of balance as transfer laws go forward I'm thing second competitor be and I should the that's competition balance margins be then think so thing it's will of is and risk so little competitive where just and and end to world the risk but that the of start economics also. of is a we'll that bit sure about if thinking that's reduces

So market there's us about wind I think think to on much fair those very are the you need a helping it think there and I dynamics again, terms.

to construction our I'm out they risky and be, we are itself will because over jobs but opportunity in sure get recognizing reiterate coffins However, the up end set I’ll again, that that skis going manifest not to getting you will phase. we're big

margins are and contingency to end for the Mark into can things single-digit said, as jobs of as some while and we get little release and back liability we profit. So our sort by and the next provision against sticking some those potential hopefully

how how story So manage I growth of our the of numbers. lot in think that prudent these upside will LNG we come be it we of but through and EPS is a we very a proceed projects

Operator

you. Thank

comes Kaplowitz ahead. next please from go Our question Citi, from Andrew

open. Your is line

Unidentified Analyst

on Andrew for Andree guys. This is Hi Kaplowitz.

I give that congrats you a re-compete question XX project little solid you the run bit overall think quick do the have rate, So about to XXXX? and just on in and results. how just the a quarter going of the quarter, of on can on one your quarters Thanks. color

Stuart Bradie

absolutely today but re-compete are I our stands it rate as I typically and win think well. is is mean, around it's think I our so -- seeing mean far, you XX be win I –re-compete doing in rate XX% we would

think really, I I in very mean strong we're I'm not really on focused it.

bring. relationship your customer it well got to got So, down delivery you've and continuing again have value the be to performing with the to but very understands comes you've you be

re-competes year. that and no does are in area think coming the of to very and in the I end while team I next coming the little and well quite So the biggies really through

behind we ones successfully. that the big Jacksonville So us [indiscernible] think I this year had in

about So we good pretty that. feel

Mark Sopp

in And is the government our that often think which new is when ask all within re-compete. and business people rate about piece win them well overall including across above you above all businesses XX%

you've why So that's growth but really couple on been has re-compete the development seen of performance the business across for the whole all and quite strong pleased teams of business also sectors. company new the we're with market the

Operator

you. Thank

the no for have this like hand over back time. any to additional closing We further remarks. phone Stuart the Mr. would I call or questions at over to

Stuart Bradie

get think it's, been at lots terrific and of not continue. you. a the thank interest. KBR. forward to that time usual lots up efficient for perfect. to and we're but the got your company do to Just, very still very, have do I is the Thank opportunity to It's more and exciting We're move for set you we momentum We've

Obviously, for your talk again So interest. thank next little of the of the while. we'll you course you to over many one-on-one you

Operator

Thank you all your for participation.

now disconnect. may You

KBR (KBR) 30 Oct 192019 Q3 Earnings call transcript