KBR Announces Fourth Quarter and Fiscal 2019 Financial Results and Guidance for Fiscal 2020
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 2018(1) 2019 2018(1)
---
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
EBITDA(2) $
117 $
109 $
471 $
412
Diluted EPS $
0.40 $
0.33 $
1.41 $
1.99
Adjusted
EPS(2) $
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-SAAT(TM)
facility during the year as well as winning our first commercial
contract for our innovative and environmentally friendly K-PRO(TM)
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 2018(1) 2019 2018(1)
---
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 EBITDA(2) $
117 $
109 $
471 $
412
Diluted EPS $
0.40 $
0.33 $
1.41 $
1.99
Adjusted EPS(2) $
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.
