KBR Provides Update to Fiscal Year 2012 Guidance; Announces Fiscal Year 2013 Guidance

  KBR Provides Update to Fiscal Year 2012 Guidance; Announces Fiscal Year 2013

Business Wire

HOUSTON -- January 10, 2013

KBR Inc. (NYSE:KBR) announced today that the company now expects fiscal year
2012 earnings per diluted share between $1.95 to $2.10 excluding the third
quarter 2012 goodwill impairment charge. This is below the company’s
previously communicated guidance range of between $2.60 and $2.80 excluding
the third quarter 2012 goodwill impairment charge. The company indicated the
reduction in the guidance range for 2012 is the result of significant project
charges the company expects to take in the company’s Minerals and U.S.
Construction businesses, both in the fourth quarter of 2012 as well as higher
than expected labor cost absorption expenses.

Also, KBR expects fiscal year 2013 earnings per diluted share between $2.45 to
$2.90, which includes the following:

  *Capital expenditures guidance between $80 million to $100 million,
    including approximately $50 million to $60 million associated with the
    company’s ERP implementation
  *General and administrative expense guidance between $230 million and $250
    million, including approximately $30 million to $40 million associated
    with the company’s ERP implementation
  *Overall effective tax rate range of approximately 26% to 28%
  *Share count of approximately 148 million shares outstanding

“We are clearly disappointed with our outlook for the 2012 fourth quarter and
have taken steps to resolve the issues giving rise to these charges,” said
Bill Utt, Chairman, President and Chief Executive Officer. “As we look forward
to 2013, as a result of the delays in late 2012 awards, we expect the first
half of 2013 to be in the range of $0.90 to $1.10 with the second half
progressively stronger as existing projects continue to ramp-up, other
projects close out and new awards pick-up during the first half of 2013.
Overall, the guidance does not include any material 2013 earnings
contributions from major new Hydrocarbons awards.”

KBR plans to host a conference call on Friday, January 11, 2013, at 8:00 AM
Central Time (9:00 AM Eastern Time) to discuss the updated fiscal year 2012
and initiated fiscal year 2013 guidance.The call is being webcast by Thomson
Reuters and can be accessed through the KBR website at www.kbr.com, under the
Investor Relations section. The webcast is also being distributed through the
Thomson Reuters StreetEvents network. Individual investors can listen to the
call at www.earnings.com, the Thomson Reuters individual investor portal,
powered by StreetEvents. Institutional investors can access the call via
StreetEvents (www.streetevents.com), a password-protected event management

A replay of the conference call will be available on the website for seven
days following the call. Also, a replay may be accessed by telephone at (888)
203-1112, passcode 6171484.

KBR is a global engineering, construction and services company supporting the
energy, hydrocarbon, government services, minerals, civil infrastructure,
power, industrial, and commercial markets. For more information, visit

NOTE: The statements in this press release that are not historical statements,
including statements regarding future financial performance and backlog
information, 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 Halliburton Company; 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

KBR’s Annual Report on Form 10-K dated February 22, 2012, recent Current
Reports on Forms 8-K, and other 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. KBR
undertakes no obligation to revise or update publicly any forward-looking
statements for any reason.


KBR Inc.
Zac Nagle, 713-753-5082
Vice President, Investor Relations and Communications
Rob Kukla, Jr., 713-753-5082
Director, Investor Relations
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