KBR, Inc.

good morning everyone and welcome to the kbr inc first quarter 2024 earnings conference call my name is drew and i'll be the operator on today's call after today's formal presentation we will begin the q a to register a question please press start followed by one on your telephone keypad to withdraw your question please press start followed by two please limit yourselves to one question and one follow-up at this time i would like to turn the conference over to jamie duvet Dubre, Vice President of Investor Relations. Please go ahead.

Thank you. Good morning and welcome to KBR's first quarter fiscal 2024 earnings call. Joining me are Stuart Brady, President and Chief Executive Officer, as well as Mark Sopp, Executive Vice President and Chief Financial Officer. Stuart and Mark will provide highlights from the quarter and then open the call for your questions. Today's earnings presentation is available on the investor section of our website at kbr.com. This discussion includes forward-looking statements reflecting KBR's views about future events and their potential impact on performance as outlined on slide two. These matters involve risks and uncertainties that could cause actual results to differ significantly from these forward-looking statements as discussed in our most recent Form 10-K available on our website. This discussion also includes non-GAAP financial measures that the company believes to be useful metrics for investors. A reconciliation of these non-GAAP measures to the nearest GAAP measure is included at the end of our earnings presentation. I will now turn the call over to Stuart.

Thank you, Jamie. I will start on slide five on developing our people. Today, I wanted to take just a few moments to talk about our people because our people, as you all know, are key to success. They're the ones who deliver value to our customers. They solve the complex challenges. and they drive innovation at KBR. And they are the ones who make KBR an absolutely great place to work. And that's why we are dedicated to creating a culture of learning and growth for all our employees. We want to empower them to reach their full potential and, of course, have fulfilling careers. In recent years, our Chief People Officer, Jenny Miles, has greatly expanded our talent development programs, spanning all parts of the globe, And from new hires to senior leadership, there are development opportunities for every level. And I'm pleased to say that this has actually been recognized recently by MSCI, where we've received a four-star rating, their top rating actually, in human capital development this year, an exceptional milestone and recognition. I won't spend too much time on the slide, but as you can see, we've highlighted a few examples of these global programs, from mentoring to internal career mobility, and importantly, communities of interest and development around skills of the future. This, in particular, is an area that we have recognized is really important and we're positioning to get in front of. Nurturing key talent for the future is a challenge that almost all businesses across the world are facing today. And we've talked often, and for quite a while actually, about our people focus at KBR to help mitigate this risk, but it will be an ongoing part of our future, no doubt. So to conclude, as you've heard me say before, KBR is a values-driven organization with our people at the heart of all that we do. Our unwavering commitment to hiring the best and the brightest, rewarding and recognizing our people at all levels, and developing talent and skills for the future are all key enablers and, frankly, the true driver of shareholder value short, medium, and longer term. So now on to slide six, and I'll cover our consolidated performance. Today, our presentation will actually be quite short. It's been a great start to the year with a very clean first quarter. From a safety perspective, we started the year well, which is always pleasing, as reinvigorating the organization post the holidays is a task we take very seriously. Now looking at financial performance, we started the year well and ahead of pace. especially in SDS and GS International. All businesses delivered at or above expectation, which was absolutely great, and the expected slowness in UCOM in our readiness and sustainment business continued, reflecting funding delays in Congress. Consolidated revenues was $1.8 billion, up 7% year on year. and was actually an all-time high since a transformation in 2020 when you exclude the peaks of OEW in 2021. Adjusted EBITDA outpaced expectations with a 14.14% year-on-year increase, with margins bumping up 70 bps, so very pleasing. Cash was also a bit above expectation at $91 million, and given Q1 is typically the slowest quarter, we're very pleased with this result. The strong performance across all key metrics certainly de-risks the following quarters and positions us very well to deliver our 24 guidance. As of Q1, we have circa 84% work under contract to deliver that guide. Now on to slide seven and some key awards. For STS, activity levels remain high. opposite the energy trilemma, as we covered in the STS Primer webinar recently. And we've highlighted a couple of key wins and milestones that happened in Q1. Now, these have been announced during the quarter, so I won't read them all again. But collectively, you can see that ammonia, decarbonization, energy security, and energy transition remain the key drivers. As everyone is aware, the one key change from last quarter in the government side was the government defense budget was approved, which should increase the award activity in the U.S. going forward. We also expanded our human health and performance franchise to include U.S. Air Force Combat Command, in addition to our ongoing work with NASA and the special forces that you're aware of. Another nice one of note in the quarter was effectively a four-year IDIQ award to provide cybersecurity services and risk management to the Defense Health Agency. GSI, as I said earlier, had an excellent quarter, growing year on year in the mid-teens, and securing the post-PFI award for the heavy equipment transport contract being the standout. This is a multi-year contract with margins aligned with expectations for GSI, so a great outcome. I'm also very pleased to announce that we have successfully completed our first moves under the Home Safe Alliance. This is a significant milestone. As planned, these were all in-state moves, and the volume will slowly ramp up in the coming months. Bookings in both segments were actually very, very similar at 1.2 times on a trailing 12-month basis, when you exclude the large burn on the LNG project in SDS. As you'll see on the slide, SDS trailing 12-month book-to-bill was 0.9 times due to that large burn, but the rest of SDS's performance continues to be strong delivering a 1.1 book to bill in the quarter. Historically, Q1 is a slow bookings quarter, and we are pleased with the result, especially with the strength of the pipeline. So in short, a great start to the year with positive momentum. Outside of the normal course of business, this quarter was very quiet, which is very pleasing. And now I'll hand on to Mark, who will take you through the numbers in a bit more detail.