HOUSTON, Feb. 20, 2020 /PRNewswire/ -- KBR, Inc. (NYSE: KBR), a global provider of differentiated, professional services and technologies across the asset and program life cycle within the government services and hydrocarbons industries today announced fourth quarter and fiscal 2019 financial results.

Fiscal 2019 Highlights - Enduring portfolio generating earnings and cash growth throughout the year

  • 15% consolidated revenue growth, with each operating segment contributing double digit growth
  • Diluted EPS $1.41; Adjusted EPS $1.69, 10% growth; Adjusted EBITDA $471 million, 14% growth
  • Operating cash flow of $256 million, or 127% net income conversion
  • Winning quality work to secure the future; 95%+ recompete win rate

2020 Guidance Initiation - Attractive growth and cash conversion

  • EPS guidance of $1.46-$1.58; Adjusted EPS guidance of $1.80-$1.92; 70%+ work secured
  • Operating cash flow, adjusted for major advances, of $200-250 million; implied 90%-110% net income conversion
  • Raising quarterly dividend 25%
  • Replenishing share repurchase authorization to $350 million

"I am delighted to report an excellent year of growth, earnings, bookings and cash generation and another stellar year for safety," said Stuart Bradie, KBR President and CEO, as the company announced its fourth quarter and fiscal 2019 financial results. For the year ended December 31, 2019, KBR reported consolidated revenue of $5.6 billion, or 15% annual growth with all operating segments contributing double digit growth; operating cash flow of $256 million, or 127% net income conversion with all operating segments contributing at or above targeted levels; and consolidated book-to-bill of 1.3x, excluding the impact of privately financed initiatives or projects and foreign exchange, with all operating segments achieving book-to-bill of greater than 1.0x.  "Our portfolio of long-term, multi-year contracts and bookings momentum provide earnings and cash visibility, and we begin 2020 with over 70% of the year's work secured," Bradie continued. "I am also pleased to announce that our board has recently approved a 25% increase to our quarterly dividend and has restored the full capacity of our share repurchase authorization to $350 million." said Bradie. "The commitment, dedication and enthusiasm of our people, working together across the globe, is the foundation of our company, and I wish to thank them for their many contributions to another year of great results," said Bradie.

Fourth Quarter and Fiscal 2019 Financial Results 


Three Months Ended December 31,


Year Ended December 31,

Dollars in millions, except share data

2019


20181


2019


20181









Revenue

$

1,452



$

1,330



$

5,639



$

4,913


Operating income

$

88



$

90



$

362



$

468


Net income attributable to KBR

$

58



$

47



$

202



$

281


Adjusted EBITDA2

$

117



$

109



$

471



$

412


Diluted EPS

$

0.40



$

0.33



$

1.41



$

1.99


Adjusted EPS2

$

0.46



$

0.41



$

1.69



$

1.53


Operating cash flow





$

256



$

165


_________








1 Reflects immaterial, non-cash corrections related to recording the effects of foreign currency on our share of earnings of an unconsolidated joint venture; see our December 31, 2019 Form 10-K for further information.

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

Summary Results for Year Ended December 31, 2019

Revenue growth of 15%, Adjusted EBITDA growth of 14%, and Net Income reduction of (28)%  attributable to the following:

  • 14% growth in Government Solutions attributable to the commencement of new programs, including holistic human and psychological performance services for the U.S. Special Operations Forces under the Preservation of the Force and Family program; networking, communications and training services for the U.K. Ministry of Defence; and launch range operations services at NASA's Wallops Flight Facility. Further, we completed disaster recovery work at Tyndall Air Force Base generating approximately $150 million of revenue in 2019.
  • 26% growth in Technology Solutions attributable to strong execution across our chemical, petrochemical, refining and ammonia projects and expanded proprietary equipment and catalyst deliveries.
  • 16% growth in Energy Solutions primarily attributable to ramp up of cost-reimbursable projects, including a brownfield revamp refinery project in the U.S. Gulf Coast, a crude terminal expansion project in the Permian Basin, and a greenfield methanol project in Louisiana.
  • FY 2018 results were favorably impacted by the $108 million non-cash gain on consolidation of Aspire as well as recognition of variable consideration associated with the successful completion and performance testing of a major Energy Solutions project (recognized 100% within consolidated operating income, 30% in net income attributable to KBR).

Liquidity and Capital Structure

Highlights from the year include the following:

  • Annual operating cash flow of $256 million, or 127% net income conversion.
  • Gross and net debt leverage of 2.7x and 1.2x, respectively, as of December 31, 2019; continued gross debt de-leveraging attributable to Adjusted EBITDA growth and annual debt pay down of $70 million.
  • An increase of KBR's credit rating by S&P to BB- and Moody's to Ba3, each with stable outlook.

On February 7, 2020, we successfully completed the amendment of our credit agreement.  This amendment is an important element in our capital structure and allocation strategy, as it enables greater capital deployment flexibility, provides attractively priced capacity to fuel growth (100 bps reduction in interest rate spread across term loan A and B facilities) and extends maturity by two years.  In connection with this transaction, we repaid $137 million of borrowings under the credit agreement. Consistent project execution, strong EBITDA growth, predictable cash generation and improved credit ratings allowed us to quickly tap the debt markets to achieve a very positive outcome for the company. Gross and net leverage upon completion of this refinancing were 2.4x and 1.2x, respectively.

In February 2020, our board approved an increase to our quarterly dividend of 25% to $0.10 per share and approved the restoration of our share repurchase authorization to an aggregate $350 million.

Notable New Business Awards/Developments:

Highlights from the year include the following:

  • Consolidated FY 2019 book-to-bill was 1.3x, excluding the impact of our private finance initiatives and foreign exchange, with each business segment achieving book-to-bill of greater than 1.0x for the year.
  • Expanded footprint through many new project program wins, including the U.S. DoD Preservation of the Force & Family program, the NASA Launch Range Operations Contract for Wallops Flight Facility, several cost-reimbursable EPC projects in our Energy Solutions business, and the EPC award of Freeport LNG, Train 4, awaiting FID.
  • Continued innovation bringing new technologies to market, highlighted by the successful commissioning of the first commercial-scale K-SAATTM facility during the year as well as winning our first commercial contract for our innovative and environmentally friendly K-PROTM Propane Dehydrogenation Technology, first introduced to market in January 2019.
  • Posted a recompete win rate above 95% in our U.S. Government Solutions business that included the 8-year Marine Corps preposition stock program, the 5-year NAVAIR Aircrew Services Contract, and three highly strategic and critical areas under the 10-year LOGCAP V program, currently under protest.

2020 Guidance

The company initiates 2020 GAAP EPS guidance with a range of $1.46 to $1.58 and adjusted EPS guidance with a range of $1.80 to $1.92 per share.  The company initiates 2020 operating cash flows guidance with a range of $200 million to $250 million, as adjusted for the impact of major project advances and workoff.  A reconciliation of adjusted EPS and adjusted operating cash flow guidance is included at the end of this release.  Our effective tax rate for 2020 is estimated to range from 25% to 27%.

Reporting Changes and Reclassifications

Changes in reporting, effective January 1, 2019:

  • We changed the name of our Government Services segment to "Government Solutions", our Technology segment to "Technology Solutions", and our Hydrocarbons Services segment to "Energy Solutions".
  • We elected to classify certain indirect costs incurred as overhead (included in "Cost of revenues") or general administrative expenses for U.S. GAAP reporting purposes in the same manner as such costs are defined in our disclosure statements under U.S. Government Cost Accounting Standards. We reclassified $34 million and $128 million from "Cost of revenues" to "Selling, general and administrative expenses" for the year ended December 31, 2019, respectively. There was no impact on consolidated or segment operating income or net income as previously reported.

About KBR, Inc.

KBR is a global provider of differentiated professional services and technologies across the asset and program life cycle within the Government Services and Hydrocarbons sectors. KBR employs approximately 38,000 people worldwide (including our joint ventures), with customers in more than 80 countries, and operations in 40 countries, across three synergistic global businesses:

  • Government Solutions, serving government customers globally, including capabilities that cover the full life-cycle of defense, space, aviation and other government programs and missions from research and development, through systems engineering, test and evaluation, program management, to operations, maintenance, and field logistics;
  • Technology Solutions, featuring proprietary technology, equipment, catalysts, digital solutions and related technical services for the monetization of hydrocarbons, including refining, petrochemicals, ammonia and specialty chemicals, as well as inorganics; and
  • Energy Solutions, including onshore oil and gas; LNG (liquefaction and regasification)/GTL; oil refining; petrochemicals; chemicals; fertilizers; differentiated EPC; maintenance services (Brown & Root Industrial Services); offshore oil and gas (shallow-water, deep-water, subsea); floating solutions (FPU, FPSO, FLNG & FSRU); program management and consulting services.

KBR is proud to work with its customers across the globe to provide technology, value-added services, integrated EPC delivery and long-term operations and maintenance services to ensure consistent delivery with predictable results. At KBR, We Deliver.

Visit www.kbr.com

Forward Looking Statement

The statements in this press release that are not historical statements, including statements regarding future financial performance, 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: the outcome of and the publicity surrounding audits and investigations by domestic and foreign government agencies and legislative bodies; potential adverse proceedings by such agencies and potential adverse results and consequences from such proceedings; the scope and enforceability of the company's indemnities from its former parent; changes in capital spending by the company's customers; the company's ability to obtain contracts from existing and new customers and perform under those contracts; structural changes in the industries in which the company operates; escalating costs associated with and the performance of fixed-fee projects and the company's ability to control its cost under its contracts; claims negotiations and contract disputes with the company's customers; changes in the demand for or price of oil and/or natural gas; protection of intellectual property rights; compliance with environmental laws; changes in government regulations and regulatory requirements; compliance with laws related to income taxes; unsettled political conditions, war and the effects of terrorism; foreign operations and foreign exchange rates and controls; the development and installation of financial systems; increased competition for employees; the ability to successfully complete and integrate acquisitions; and operations of joint ventures, including joint ventures that are not controlled by the company.

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

KBR, Inc.: Consolidated Statements of Operations

(In millions, except for per share data)

(Unaudited)



Three Months Ended December 31,


Year Ended December 31,


2019


20181


2019


20181









Revenues:








Government Solutions

$

939



$

984



$

3,925



$

3,457


Technology Solutions

93



82



374



297


Energy Solutions

420



263



1,339



1,157


Non-strategic Business



1



1



2


Total revenues

1,452



1,330



5,639



4,913


Gross profit (loss):








Government Solutions

118



97



430



350


Technology Solutions

35



29



118



106


Energy Solutions

20



32



100



134


Non-strategic Business

(2)



(1)



5



(6)


Total gross profit

171



157



653



584


Equity in earnings of unconsolidated affiliates:








Government Solutions

8



10



29



32


Energy Solutions

3



18



19



50


  Non-strategic Business



1



(13)



(3)


Total equity in earnings of unconsolidated affiliates

11



29



35



79


Selling, general and administrative expenses








Government Solutions

(41)



(30)



(134)



(109)


Technology Solutions

(7)



(6)



(28)



(24)


Energy Solutions

(16)



(14)



(63)



(64)


Corporate

(36)



(37)



(116)



(97)


Total selling, general and administrative expense

(100)



(87)



(341)



(294)


Acquisition and integration related costs



(2)



(2)



(7)


Gain (loss) on disposition of assets

6



(2)



17



(2)


Gain (loss) on consolidation of Aspire



(5)





108


Operating income

88



90



362



468


Interest expense

(23)



(23)



(99)



(66)


Other non-operating income (loss)

(5)



(2)



5



(6)


Income before income taxes and noncontrolling interests

60



65



268



396


Provision for income taxes

(1)



(12)



(59)



(86)


Net income

59



53



209



310


Net income attributable to noncontrolling interests

(1)



(6)



(7)



(29)


Net income attributable to KBR

$

58



$

47



$

202



$

281


Adjusted EBITDA2

$

117



$

109



$

471



$

412


Diluted EPS

$

0.40



$

0.33



$

1.41



$

1.99


Adjusted EPS2

$

0.46



$

0.41



$

1.69



$

1.53


1 Reflects immaterial, non-cash corrections related to recording the effects of foreign currency on our share of earnings of an unconsolidated joint venture; see our December 31, 2019 Form 10-K for further information.

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

 

KBR, Inc.

Consolidated Balance Sheets

(In millions, except share data)




December 31,


December 31,



2019


2018



(Unaudited)



Assets





Current assets:





Cash and equivalents


$

712



$

739


Accounts receivable, net of allowance for doubtful accounts of $14 and $9


938



927


Contract assets


215



185


Other current assets


146



108


Total current assets


2,011



1,959


Claims and accounts receivable


59



98


Property, plant, and equipment, net


130



121


Operating lease assets


175




Goodwill


1,265



1,265


Intangible assets, net of accumulated amortization of $184 and $151


495



516


Equity in and advances to unconsolidated affiliates


850



724


Deferred income taxes


236



222


Other assets


143



147


Total assets


$

5,364



$

5,052







Liabilities and Shareholders' Equity





Current liabilities:





Accounts payable


$

572



$

546


Contract liabilities


484



463


Accrued salaries, wages and benefits


209



221


Nonrecourse project debt


11



10


Operating lease liabilities


39




Other current liabilities


186



179


Total current liabilities


1,501



1,419


Pension obligations


277



250


Employee compensation and benefits


115



109


Income tax payable


92



84


Deferred income taxes


16



27


Nonrecourse project debt


7



17


Long-term debt


1,183



1,226


Operating lease liabilities


192




Other liabilities


124



202


Total liabilities


3,507



3,334


KBR shareholders' equity:





Paid-in capital in excess of par


2,206



2,190


Accumulated other comprehensive loss


(987)



(910)


Retained earnings


1,441



1,235


Treasury stock


(817)



(817)


Total KBR shareholders' equity


1,843



1,698


Noncontrolling interests


14



20


Total shareholders' equity


1,857



1,718


Total liabilities and shareholders' equity


$

5,364



$

5,052


 

KBR, Inc.: Consolidated Statements of Cash Flows

(In millions)

(Unaudited)



Year Ended December 31,


2019


2018





Cash flows from operating activities:




Net income

$

209



$

310


Adjustments to reconcile net income to net cash provided by (used in) operating activities:




Depreciation and amortization

104



63


Equity in earnings of unconsolidated affiliates

(35)



(79)


Deferred income tax (benefit) expense

(14)



26


(Gain) loss on disposition of assets

(17)



2


Gain on consolidation of Aspire subcontracting entities



(108)


Other

34



24


Changes in operating assets and liabilities




Accounts receivable, net of allowance for doubtful accounts

(16)



(203)


Contract assets

(31)



25


Accounts payable

23



112


Contract liabilities

19



(60)


Accrued salaries, wages and benefits

(9)



11


Payments from unconsolidated affiliates, net

10



12


Distributions of earnings from unconsolidated affiliates

69



75


Pension funding

(45)



(41)


Other assets and liabilities

(45)



(4)


Total cash flows provided by operating activities

256



165


Cash flows from investing activities:




Purchases of property, plant and equipment

(20)



(17)


Investments in equity method joint ventures

(146)



(344)


Proceeds from sale of assets and investments

9



25


Acquisition of businesses, net of cash acquired



(354)


Adjustments to cash due to consolidation of Aspire entities



197


Other

(1)



2


Total cash flows used in investing activities

(158)



(491)


Cash flows from financing activities:




Payments to reacquire common stock

(4)



(3)


Acquisition of remaining ownership interest in joint ventures



(56)


Investments from noncontrolling interest

1




Distributions to noncontrolling interests

(14)



(3)


Payments of dividends to shareholders

(46)



(44)


Proceeds from sale of warrants



22


Purchase of note hedges



(62)


Issuance of convertible notes



350


Net proceeds from issuance of common stock

5



2


Excess tax benefits from share-based compensation



1


Borrowings on revolving credit agreements



250


Borrowings on long-term debt



1,075


Debt issuance costs



(57)


Payments on revolving credit agreements



(720)


Payments on short-term and long-term borrowings

(70)



(100)


Other

(5)



(1)


Total cash flows (used in) provided by financing activities

(133)



654


Effect of exchange rate changes on cash

8



(28)


(Decrease) increase in cash and equivalents

(27)



300


Cash and equivalents at beginning of period

739



439


Cash and equivalents at end of period

$

712



$

739


 

KBR, Inc.: Backlog Information (a)

(In millions)

(Unaudited)



December 31,


December 31,


2019


2018

Government Solutions

$

10,960



$

11,005


Technology Solutions

579



594


Energy Solutions

3,097



1,896


  Subtotal

14,636



13,495


Non-strategic Business



2


Total backlog

$

14,636



$

13,497




(a)

Backlog generally represents the dollar amount of revenues we expect to realize in the future as a result of performing work on contracts and our pro-rata share of work to be performed by unconsolidated joint ventures. We generally include total expected revenues in backlog when a contract is awarded under a legally binding agreement. In many instances, arrangements included in backlog are complex, nonrepetitive and may fluctuate due to the release of contracted work in phases by the customer. Additionally, nearly all contracts allow customers to terminate the agreement at any time for convenience. Where contract duration is indefinite and clients can terminate for convenience without having to compensate us for periods beyond the date of termination, projects included in backlog are limited to the estimated amount of expected revenues within the following twelve months. Certain contracts provide maximum dollar limits, with actual authorization to perform work under the contract agreed upon on a periodic basis with the customer. In these arrangements, only the amounts authorized are included in backlog. For projects where we act solely in a project management capacity, we only include the value of our services on each project in backlog.




We define backlog, as it relates to U.S. government contracts, as our estimate of the remaining future revenue from existing signed contracts over the remaining base contract performance period (including customer approved option periods) for which work scope and price have been agreed with the customer. We define funded backlog as the portion of backlog for which funding currently is appropriated, less the amount of revenue we have previously recognized. We define unfunded backlog as the total backlog less the funded backlog. Our GS backlog does not include any estimate of future potential delivery orders that might be awarded under our government-wide acquisition contracts, agency-specific indefinite delivery/indefinite quantity contracts, or other multiple-award contract vehicles nor does it include option periods that have not been exercised by the customer.




Within our GS business segment, we calculate estimated backlog for long-term contracts associated with the U.K. government's PFIs based on the aggregate amount that our client would contractually be obligated to pay us over the life of the project. We update our estimates of the future work to be executed under these contracts on a quarterly basis and adjust backlog if necessary.




We have included in the table above our proportionate share of unconsolidated joint ventures' estimated revenues. Since these projects are accounted for under the equity method, only our share of future earnings from these projects will be recorded in our results of operations. Our proportionate share of backlog for projects related to unconsolidated joint ventures totaled $2.6 billion at December 31, 2019 and $3.0 billion at December 31, 2018. Our backlog included in the table above for projects related to consolidated joint ventures includes 100% of the backlog associated with those joint ventures and totaled $5.3 billion at December 31, 2019 and $5.3 billion at December 31, 2018.




We estimate that as of December 31, 2019, 31% of our backlog will be executed within one year. Of this amount, 88% will be recognized in revenues on our condensed consolidated statement of operations and 12% will be recorded by our unconsolidated joint ventures. As of December 31, 2019, $68 million of our backlog relates to active contracts that are in a loss position.




As of December 31, 2019, 11% of our backlog was attributable to fixed-price contracts, 50% was attributable to PFIs and 39% of our backlog was attributable to cost-reimbursable contracts. For contracts that contain both fixed-price and cost-reimbursable components, we classify the individual components as either fixed-price or cost-reimbursable according to the composition of the contract; however, for smaller contracts, we characterize the entire contract based on the predominant component. As of December 31, 2019, $9.2 billion of our GS backlog was currently funded by our customers. As of December 31, 2019, we had approximately $2.8 billion of priced option periods for U.S. government contracts that are not included in the backlog amounts presented above.

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 and Adjusted EBITDA. EBITDA is defined as Net income attributable to KBR, plus interest expense, net; provision for income taxes; other non-operating expense (income); and depreciation and amortization. Adjusted EBITDA excludes certain amounts included in EBITDA. EBITDA and Adjusted EBITDA for each of the fourth quarters and fiscal years ended December 31, 2019 and 2018 is considered a non-GAAP financial measure under SEC rules because EBITDA and Adjusted EBITDA for each such period exclude certain amounts included in the calculation of net income attributable to KBR in accordance with GAAP for such periods. Management believes EBITDA and Adjusted EBITDA afford investors a view of what management considers KBR's core performance for each of the fourth quarters and fiscal years ended December 31, 2019 and 2018 and also affords investors the ability to make a more informed assessment of such core performance for the comparable periods.


Three Months Ended December 31,


Year Ended December 31,

Dollars in millions

2019


2018


2019


2018









Net Income Attributable to KBR

$

58



$

47



$

202



$

281










Add Back:








Interest expense

23



23



99



66


Provision for income taxes

1



12



59



86


Other non-operating (income) loss

5



2



(5)



6


Depreciation and amortization

28



16



104



63










Consolidated EBITDA

$

115



$

100



$

459



$

502


Add back:








Legacy legal fees

2



2



10



11


Acquisition and integration related costs



2



2



7


Gain on consolidation of Aspire subcontracting entities



5





(108)










Adjusted EBITDA

$

117



$

109



$

471



$

412


Adjusted EPS

Adjusted diluted earnings per share from net income attributable to KBR (Adjusted EPS) for each of the fourth quarters and fiscal years ended December 31, 2019 and 2018 is considered a non-GAAP financial measure under SEC rules because the Adjusted EPS for each such period excludes certain amounts included in the diluted earnings per share from net income attributable to KBR calculated in accordance with GAAP (EPS) 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 fourth quarters and fiscal years ended December 31, 2019 and 2018 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 fourth quarters and fiscal years ended December 31, 2019 and 2018 by adjusting EPS for the items included in the table below.


Three Months Ended December 31,


Year Ended December 31,


2019


2018


2019


2018









Diluted EPS

$

0.40



$

0.33



$

1.41



$

1.99










     Adjustments:








         Legacy legal fees

$

0.01



$

0.01



$

0.05



$

0.06


         Non-cash imputed interest on conversion option

$

0.02



$

0.01



$

0.06



$

0.01


         Acquisition and integration related expenses

$



$

0.01



$

0.02



$

0.04


         Amortization related to Aspire acquisition

$

0.01



$

0.02



$

0.08



$

0.06


         Incremental interest on Ichthys

$

0.02



$



$

0.07



$


         Gain on consolidation of Aspire

$



$

0.03



$



$

(0.63)










Adjusted EPS

$

0.46



$

0.41



$

1.69



$

1.53


We have calculated the Adjusted EPS for the 2020 guidance by adjusting EPS for the items included in the table below.


Low


High





Diluted earnings per share:

$

1.46



$

1.58


Adjustments:




Legacy legal fees

$0.05

Non-cash interest and conversion hedge on convertible bonds

$0.06

Amortization related to Aspire acquisition

$0.07

Ichthys interest and commercial dispute costs

$0.16





Adjusted EPS Guidance

$

1.80



$

1.92


Adjusted Cash Flows Provided by Operating Activities

Adjusted cash flows provided by operating activities for 2020 guidance is considered a non-GAAP financial measure under SEC rules because the Adjusted cash flows provided by operating activities excludes certain amounts included in the cash flows provided by operating activities calculated in accordance with GAAP. The most directly comparable financial measure calculated in accordance with GAAP is cash flows provided by operating activities. Management believes that Adjusted cash flows provided by operating activities affords investors a view of what management considers KBR's core operating cash flow performance for 2020 guidance and also affords investors the ability to make a more informed assessment of such core operating cash generation performance.

We have calculated the Adjusted cash flows provided by operating activities for the 2020 guidance by adjusting cash flows provided by operating activities for the item included in the table below.

Dollars in millions

Low


High





Cash flows provided by operating activities

$

125



$

175


Adjustment: Add back impact of major project advance workoff

$75

Adjusted Cash Flow Provided by Operating Activities Guidance

$

200



$

250


 

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SOURCE KBR, Inc.


Source: KBR, Inc.