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KBR's CEO Discusses Q1 2012 Results - Earnings Call Transcript

This call will include forward-looking statements that involve risks and uncertainties that may cause KBR's results to differ materially from management's current expectations. We encourage you to review our Safe Harbor statement containing the earnings release published last night, as well as KBR's most recent SEC filings for more complete description.

Now I'll turn the call over to Bill. Bill?

William P. Utt

Thanks, Zach, and good morning, everyone. During today's call, I'd like to cover 3 main areas. First, I'll walk through the key takeaways relative to our first quarter performance. Second, I'll provide you with an update of our key prospects so you can track some of the major opportunities we're pursuing. And third, I'll discuss in detail, some of the significant market trends and dynamics we're seeing at the present time.

KBR delivered $0.61 in the quarter. This overall operating performance was consistent with our expectations and our guidance, and we continue to believe we'll deliver progressively stronger performance in Q2 through Q4. There were a number of areas of strength in the quarter. Excluding all GAAP, revenues was up 5% year-over-year reflecting the underlying growth in our other businesses. At the consolidated level, job income margins and business group margins were both improved with particular strength in Gas Monetization and International Government, Defense and Support Services. Our Technology business continue to deliver strong performance with double-digit job income growth in the quarter.

We are very pleased with the ramp up of our Saudi JV KBR-AMCDE. KBR-AMCDE provides in-kingdom technical engineering and production capabilities through local utilization of KBR's world-class engineering tools and work processes. While not a large contributor to the first quarter, KBR-AMCDE booked 400,000 man-hours in Q1 and is on a flightpath ahead of our initial expectations.

KBR's backlog also increased significantly with revenue backlog and job income backlog up 44% and 40% respectively, as the JKC joint venture Ichthys LNG project contract was booked in the backlog. For the quarter, KBR booked $5.6 billion for the Ichthys LNG project, about $100 million less than we indicated on our fourth quarter call, largely due to currency fluctuations.

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