KBR, Inc.

Welcome, everyone. The KBR's First Butoh 2026 Earnings Call Conference will begin shortly. In the meantime, if you would like to pre-register to ask a question, please press star followed by one on your telephone keypad. If you change your mind, please press star followed by two. Please kindly limit yourself to one question and one follow-up. If you have any further questions, please return the queue. Once again, today's call is going to start shortly, Thank you for your patience Hello, everyone, and thank you for joining the KBR's First Footer 2026 earnings conference call. My name is Gabrielle, and I will be coordinating your call today. During the presentation, you can register a question by pressing star followed by one on your telephone keypad. If you change your mind, please press star followed by two. please kindly limit yourself to one question and one follow-up. If you have any further questions, please rejoin the queue. I will now hand over to your host, Rachel Goldwhite, Head of Investor Relations. Please go ahead.

Thank you, and good morning. Welcome to KBR's first quarter 2026 earnings call. Joining me today are Stuart Brady, President and CEO, and Chad Evans, Executive Vice President and CFO. Stuart and Chad will cover highlights from the quarter and then we'll open the line 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 materially 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. The 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, Rachel, and good morning, everyone. I'll pick up on slide four. Now, before we get into the results, I wanted to share a brief zero harm moment on staying connected, especially in challenging times. At KBR, zero harm starts with keeping our people informed and supported, even when they're hard to reach, whether they're on a remote site, a project location, or in an office. The focus on reaching the unreachable is what led to the launch of the KB Arc Pulse app. Pulse was not built in response to a crisis. It actually came out of a global employee hackathon where our teams identified a better way to stay connected across our diverse and distributed workforce. It is employee driven, built by our people for our people, and it provides easy access to news, safety updates, and company resources wherever work happens. When the conflict in the Middle East escalated, Pulse quickly became a critical channel for sharing timely updates and guidance. Most importantly, it helped us stay closely connected with our teams in the region and all of our people have remained safe, supported and informed. Pulse helps us reach employees who are not sitting at desks and reinforces our ability to act as one team even in the most challenging environments. It is a practical example of how listening to our people and then investing in the right digital tools strengthens our zero harm culture and supports resilience when it most matters. On to slide five. Today's call will cover these key topics. Firstly, I'm pleased to report that we started the year well, demonstrating disciplined execution and resilient operations. Secondly, we continue to see demand in our core markets with clear pipeline visibility. Third, we're advancing our planned spend transactions, more on that later, and thus sharpening our strategic focus. And finally, we are reaffirming our 2026 guidance and remain committed to execution, margin discipline, and strong cash generation. Moving to slide six, where I'll start by covering the STS business. Over the last few quarters, we've seen customer priorities move toward energy security, reliable supply, and resilient infrastructure. A more complex geopolitical environment is reinforcing these trends and shaping both capital spending and services demand across our end markets. With that context, I want to provide a bit of color on where we're winning work today and how those wins align to our strategy. and how that sets up the near-term pipeline on the next slide. For the third consecutive quarter, SDS delivered book-to-bill XLNG well above 1.0. Demand continues to be anchored in energy security, downstream reliability, and long-duration asset services, with a balanced mix of capital projects and recurring services work, supporting growth and improving backlog visibility. In energy security and transition, customers are prioritizing execution certainty across upstream, downstream, and gas infrastructure. This quarter, highlights include project management services for the Zalaf South Refinery in Libya, integrated fuel management services at the Majnoon oil field in Iraq, and a long-term general maintenance contract at Satorp in Saudi Arabia. These wins reflect continued investment in mission-critical assets where reliability really matters. In critical materials and circularity, we are winning lifecycle-oriented work that extends asset life and improves performance. During the quarter, we secured a long-term catalyst supply agreement supporting Indorama's ammonia operations alongside optimization work across chemicals, and materials assets. In infrastructure and transport, we continue to pursue selective programme and project management opportunities, including water infrastructure work in the Middle East and sustained activity in Australia across rail, water and defence adjacent infrastructure. Overall, our bookings reflect a capital linked engineering and project foundation with selective layering of recurring operations and maintenance services. This deepens our customer relationships and extends our role across the asset lifecycle and, of course, improves backlog visibility. We're also adding digital capabilities where they strengthen our role with the customers. Our partnership with Applied Computing supports data-driven and AI-enabled solutions that are expected to connect project execution to maintenance and operations while staying disciplined within our capital light model. To put this in context with some key metrics, STS first quarter book-to-bill XLNG was 1.2 times, with trailing 12-month book-to-bill of 1.2 times. Backlog ended the quarter at approximately $4.7 billion, and that is up 9% year over year. Year-time pipeline, again, excluding LNG, is more than $5 billion, which is roughly 80% from repeat customers. And work under contract today now covers approximately 67.67% of our 2026 revenue guidance, which is a good place to be at this time of the year. The momentum we are seeing in bookings is consistent with the pipeline outlook, which brings me to slide seven. This matrix shows where near-term pipeline activity is clustering by market and region. It's directional, not a forecast of timing, size, or conversion. Stepping back, the pattern reflects two core dynamics. First, we are seeing broader distribution of critical programs rather than reliance on single large awards. Second, customers are advancing work through early engineering and phased scopes reflecting discipline progression across project life cycles. From there, five themes explain how demand is showing up across regions. First, energy security and resilience in the Middle East. Customers continue to prioritize reliability, redundancy, and throughput expansion across critical infrastructure. Recent geopolitical conflict is reinforcing these priorities with increasing emphasis on resilience alongside restoration and rebuilding efforts where needed. Importantly, we have not seen any material change in capital spending priorities as customers continue to fund essential programs already underway. These tend to move as multi-year programs that award engineering work early, supporting a steady and visible near-term opportunity set. with a strong local footprint and established relationships, KBR remains well positioned to support customers across the region, particularly as they navigate evolving conditions. Second, resource security within critical minerals and circularity across the Middle East, Africa and parts of the Americas. Governments and producers remain focused on maintaining and expanding supply of essential inputs, particularly ammonia, This includes continued demand for licensed ammonia technology and proprietary solutions, with customers increasingly engaged early with engineering-led scopes, again supporting durable near-term booking opportunities. Thirdly, pragmatic transition activity in Europe. Near-term transition demand remains largely engineering-driven, including design, permitting, and modularization across key transition value chains. We are seeing particular demand in areas such as sustainable aviation fuel alongside policy-driven feasibility and pre-feed studies as customers assess options and navigate regulatory frameworks. Fourth, energy security and critical materials across the Americas. Customers are pursuing targeted programs that strengthen energy exports, improve reliability, and of course support domestic supply chains. particularly across LNG-adjacent infrastructure and processing and separation assets tied to critical materials. And finally, infrastructure and transport in Australia. Near-term opportunities remain concentrated in government-funded transport, defence and enabling infrastructure programmes with a strong emphasis on alliances, framework agreements and stage delivery models. Work is predominantly engineering, PMC and early works, rather than full greenfield execution, which supports recurring capital-like bookings and reflects customers' focus on resilience, capacity expansion, and program continuity. Overall, the matrix reinforces that STS bookings and near-term pipeline are diversified and concentrated in staged programmatic work aligned with resilience and resource security priorities. And this plays directly to our engineering-led capital light model and repeat customer relationships. Now onto slide eight for the mission tech business. As we've discussed over the last few quarters, awards are not flowing at historical levels. In this environment, our focus remains on what we can control, increasing both the volume and quality of our bid activity, expanding access to the IDIQ vehicles, and continuing to position the business for future awards. While several larger opportunities remain pending, and in some cases under protest, we continue to win work that aligns with our core capabilities and the government's most enduring priorities. Recent mission tech wins reflect a consistent set of strengths. We're applying digital engineering and analytics to help accelerate timelines, leverage AI and data-driven insights, to support higher confidence decisions and delivering trusted execution in mission critical environments. In space and national security, we won new work supporting the US Space Force, applying digital engineering and analytics to help accelerate the development and deployment of next generation space capabilities. We also secured a new role, providing joint data and analytical support to senior defense leaders focused on translating complex data into actionable insight for critical decisions. On the civilian side, we were awarded a re-compete with the Department of Transportation's Volpe Center, extending a longstanding partnership focused on using AI, analytics, and systems engineering to modernize transportation and improve safety. And lastly, we secured contract extension under the Army's LOGCAP program reinforcing KBR's role supporting the US military with mission critical logistics and sustainment in complex operating environments. Before moving on, I wanted to briefly address what we're seeing at NASA. KBR has supported NASA missions for more than 60 years, and recently the administrator has indicated an interest in insourcing certain core workforce competencies. If implemented, these changes would affect the mix of work across some programs, and that impact is reflected in our 26th Outlook, which Shad will discuss in more detail as he walks through the guidance. Importantly, KBI continues to support NASA in areas for deep mission experience, independent technical expertise, and operational continuity are essential. We're very proud of our team's contribution to the Artemis II mission and of our decades long service to the agency. As you'll hear from Shad, these mission tech dynamics are being offset by strength in sustainable tech. So the impact is primarily mixed as we reaffirm our full year guidance. Stepping back and looking across the portfolio, recent wins reinforce where MTS is differentiated. We operate in mission-critical environments that demand speed, technical depth, and trusted execution, with digital and data capabilities playing an increasingly central role in mission success. So to put this in context with some key metrics, MTS's first quarter book to bill was 1.0, with trailing 12 months book to bill of 1.0. Backlog and options ended the quarter at $18.5 billion, with 39% of that funded, excluding the PFIs. Bids awaiting award totaled $16 billion. And work under contract now covers approximately 91% of our 26 revenue guidance. And we continue to make progress towards a bid volume goal of $25 billion in 2026, with significant submissions expected in the next two quarters. With that, I'll turn to slide nine and our near-term pipeline opportunities. This slide provides a directional view of where we see the MTS near-term pipeline forming across markets and customer sets. It is not intended to indicate precise timing, size, or conversion, but rather to highlight where demand is clustering based on our current visibility. We see two core dynamics shaping the pipeline. First, customers are prioritizing a more selective set of enduring mission-critical programs with long-term relevance and funding durability, a trend evident across US and allied defense markets, including Australia. Second, they are increasingly valued partners who can integrate across domains and translate software and data-driven architectures into operational capability at speed. Those dynamics translate into several clear demand themes across the portfolio. First, national security space and space mission operations, where programs award technical debt and integrated delivery from digital engineering through operations. This includes longstanding work supporting the US Space Force's military satellite communications mission and related space architecture. Second, integrated air and missile defense, including counter UAS and directed energy. Here, customers are prioritizing layered, scalable solutions that reduce cost per engagement. Our role centers on integrating new capabilities into existing architectures so customers can field solutions faster and, of course, more affordably. Third, connected battle space and decision advantage. As customers invest to compress decision cycles by linking sensors to decisions at the edge, we are supporting architecture and integration efforts aligned with JADC2 objectives, including work related to the Air Force Battle Network. Finally, we continue to see durable demand in readiness, sustainment, and deployed mission support, including allied lifecycle programs. These missions place a premium on reliability, scale, and end-to-end accountability. And we're increasingly applying AI-enabled tools, including through our partnership with TagUp AI, to help improve sustainment workflows and readiness outcomes. Across these areas, the common thread is customers prioritizing speed, integration, and measurable mission outcomes, areas where MTS is positioned to deliver. On to slide 10 and an update on the spin. Next, I'll provide an update on the tax-free spin of MTS, which remains central to our strategy and to sharpen focus and, of course, create long-term shareholder value. The strategic rationale for the separation remains unchanged. The spin reflects the culmination of a decade long portfolio transformation and will result into independent pure play companies with clear strategic focus, distinct investment profiles and dedicated leadership aligned to their end markets. As part of this process, we evaluated all strategic alternatives. and concluded that a spin is the right path to unlock value and position both businesses for long-term success. We are executing on this path while ensuring the separation is completed in a way that protects continuity, minimizes risk, and positions both companies for success from day one. We continue to believe a quarter-end spin is the most practical approach both operationally and financially. And given the scope and complexity of separation, a fourth quarter timeline provides additional runway to address these complexities. As a result, we are working toward an effective spin date of January the 4th, 2027. So the first business day of fiscal 27. On the regulatory front, we have confidentially resubmitted our Form 10 including the fiscal 2025 audited carve-out financials. We expect continued confidential refinement through the SEC review process before transitioning to a public filing, which we currently anticipate in September. In parallel, we're advancing the IRS private letter ruling process to support a tax-free transaction. From a leadership standpoint, we are now well advanced on talent migration. The MTS CEO set is in its final stages with board interviews planned for later this month, and the CFO process is expected to follow shortly thereafter. At the same time, additional leadership and functional appointments are beginning to be announced across both organizations, helping to build clarity and momentum. Operational separation continues to progress. We have completed the IT stand-up project plan and are now executing against it, supporting coordinated separation across systems, processes and controls. And in parallel, teams are advancing real estate and legal entity rationalization to position both companies to operate independently at close. Looking ahead, we plan to host two investor days in the second week of November. These events will outline the standalone strategy, operating models, and long-term priorities for both the STS and MTS businesses ahead of the transaction close. Overall, the dedicated SPIN transaction team remains fully engaged across all work streams, and coordination across the organization continues to build, reinforcing our confidence in execution. With that, I'll turn it over to Shad.