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ý
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Annual Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
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¨
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Transition Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 for the transition period from to
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Delaware
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20-4536774
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(State or other jurisdiction of incorporation or organization)
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(I.R.S. Employer Identification No.)
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601 Jefferson Street Suite 3400
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77002
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Houston, Texas
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Zip Code
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(Address of principal executive offices)
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Telephone Number - Area code (713) 753-3011
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Title of each class
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Name of each Exchange on which registered
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Common Stock par value $0.001 per share
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New York Stock Exchange
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Large accelerated filer
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ý
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Accelerated filer
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¨
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Non-accelerated filer
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¨
(Do not check if a smaller reporting company)
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Smaller reporting company
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¨
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Page
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FINANCIAL STATEMENTS
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•
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The Gas Monetization business segment
continues to be a leader in gas monetization, having designed and constructed, alone or with joint venture partners, a number of the world's operating LNG production facilities over the past 30 years. The development of large gas fields and the increased use of high-volume horizontal hydraulic fracturing ("fracking") are forecast to help drive growth for the Gas Monetization business segment. We continue to target a strong pipeline of LNG prospects, while seeking new GTL opportunities.
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•
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The Hydrocarbons business segment
builds on our world-class strength and experience with hydrocarbon processing projects and seeks to expand our presence in both offshore and onshore oil and gas services. We continue to grow by utilizing our technology and execution expertise to provide high-value process facilities to our customers. We expect to continue to broaden our portfolio of differentiated process technologies and associated service, proprietary
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•
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The Infrastructure, Government & Power business segment
broadens our commercial, government operations, EPC logistics, construction and maintenance services internationally. We apply our design, project management and construction skills to infrastructure, industrial, mining, minerals and power markets utilizing the same global delivery platform already in place for Hydrocarbons.
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•
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The Services business segment
capitalizes on our brand reputation and core competencies to expand our direct-hire construction, general contracting and industrial services operations, both domestically and internationally, with a focus on safe operations and high-value outcomes. Demand for industrial construction services is increasing in North America, primarily due to shale gas and oil sands-related projects. Prospects continue to develop for maintenance services in North America and the Middle East, while the commercial building market shows signs of improvement and recovery.
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•
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customer relationships;
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•
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successful prior execution of large projects in difficult locations;
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•
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technical excellence and differentiation;
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•
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high value in delivered projects and services measured by performance, quality, operability and cost;
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•
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service delivery, including the ability to deliver personnel, processes, systems and technology on an "as needed, where needed and when needed" basis with the required local content and presence;
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•
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consistent superior service quality;
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•
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market-leading health, safety and environmental standards and sustainable practices;
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•
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financial strength through liquidity, capital capacity and the ability to support warranties;
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•
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breadth of proprietary technology and technical sophistication; and
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•
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robust risk awareness and management processes.
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Years ended December 31,
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|||||||
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2013
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2012
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2011
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|||
Revenue:
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|
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|
|
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|||
United States
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34
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%
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27
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%
|
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22
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%
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Asia Pacific (includes Australia)
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26
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%
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25
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%
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16
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%
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Canada
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10
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%
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6
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%
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3
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%
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Africa
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8
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%
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21
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%
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23
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%
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Middle East (excluding Iraq)
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8
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%
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7
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%
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8
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%
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Europe
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8
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%
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|
7
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%
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6
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%
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Iraq
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4
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%
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6
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%
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22
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%
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Other Countries
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2
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%
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|
1
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%
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|
—
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%
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Total
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100
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%
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100
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%
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100
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%
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•
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expropriation and nationalization of our assets in that country;
|
•
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political and economic instability;
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•
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civil unrest, acts of terrorism, force majeure, war or other armed conflict;
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•
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currency fluctuations, devaluations and conversion restrictions;
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•
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confiscatory taxation or other adverse tax policies; or
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•
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governmental activities or judicial actions that limit or disrupt markets, restrict payments, limit the movement of funds, result in the deprivation of contract rights or result in the inability for us to obtain or retain licenses required for operation.
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•
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worldwide or regional political, social or civil unrest, military action and economic conditions;
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•
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the level of demand for oil, natural gas, industrial services and power generation;
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•
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governmental regulations or policies, including the policies of governments regarding the use of energy and the exploration for and production and development of their oil and natural gas reserves;
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•
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a reduction in energy demand as a result of energy taxation or a change in consumer spending patterns;
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•
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global economic growth or decline;
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•
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the level of oil production by non-OPEC countries and the available excess production capacity from OPEC countries;
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•
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global weather conditions and natural disasters;
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•
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oil refining capacity;
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•
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shifts in end-customer preferences toward fuel efficiency and the use of natural gas;
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•
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potential acceleration of the development and expanded use of alternative fuels;
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•
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environmental regulation, including limitations on fossil fuel consumption based on concerns about its relationship to climate change; and
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•
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reduction in demand for the commodity-based markets in which we operate.
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•
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Valuation methodologies may not accurately capture the value proposition;
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•
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Future completed acquisitions may not be integrated within our operations with the efficiency and effectiveness initially expected, resulting in a potentially significant detriment to the associated product/service line financial results, and pose additional risks to our operations as a whole;
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•
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We may have difficulty managing our growth from acquisition activities;
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•
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Key personnel within an acquired organization may resign from their related positions resulting in a significant loss to our strategic and operational efficiency associated with the acquired company;
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•
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The effectiveness of our daily operations may be reduced by the redirection of employees and other resources to acquisition activities;
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•
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We may assume liabilities of an acquired business (e.g. litigation, tax liabilities, contingent liabilities, environmental issues), including liabilities that were unknown at the time of the acquisition, that pose future risks to our working capital needs, cash flows and the profitability of related operations;
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•
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We may assume unprofitable projects that pose future risks to our working capital needs, cash flows and the profitability of related operations;
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•
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Business acquisitions may include substantial transactional costs to complete the acquisition that exceed the estimated financial and operational benefits; or
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•
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Future acquisitions may require us to obtain additional equity or debt financing, which may not be available on attractive terms, if at all. Moreover, to the extent an acquisition transaction results in additional goodwill, it will reduce our tangible net worth, which might have an adverse effect on our credit capacity.
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•
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policy and/or spending changes implemented by the current administration, DoD or other government agencies;
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•
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changes, delays or cancellations of U.S. government programs or requirements;
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•
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adoption of new laws or regulations that affect companies providing services to the U.S. government;
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•
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curtailment of the U.S. governments’ outsourcing of services to private contractors; or
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•
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level of political instability due to war, conflict or natural disasters.
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Location
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Owned/Leased
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Description
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Business Segment
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Birmingham, Alabama
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Owned
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Office facility
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Hydrocarbons, IGP and Services
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Greenford, Middlesex
United Kingdom
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Owned
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Office facilities
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Gas Monetization and Hydrocarbons
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|
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Leatherhead, United Kingdom
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Owned
|
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Office facility
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Gas Monetization, Hydrocarbons and IGP
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North America:
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Arlington, Virginia
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Leased
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Office facilities
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IGP
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Edmonton, Alberta, Canada
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Leased
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Project facilities
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Services
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Houston, Texas
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Leased
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Office facilities
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All and corporate functions
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Monterrey, Nuevo Leon, Mexico
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Leased
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Office facilities
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Gas Monetization and Hydrocarbons
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Newark, Delaware
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Leased
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Office facilities
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Hydrocarbons
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|
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Australia:
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Perth, Australia
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|
Leased
|
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Office and project facilities
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Gas Monetization and IGP
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South Brisbane, Queensland, Australia
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Leased
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Office and project facilities
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|
Hydrocarbons and IGP
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Item 5.
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Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities
|
|
|
Common Stock Price Range
|
|
Dividends
Declared
Per Share
|
||||||||
|
|
High
|
|
Low
|
|
|||||||
Fiscal Year 2013
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|
|
|
|
|
|
||||||
First quarter ended March 31, 2013
|
|
$
|
32.65
|
|
|
$
|
28.24
|
|
|
$
|
—
|
|
Second quarter ended June 30, 2013
|
|
$
|
36.69
|
|
|
$
|
27.60
|
|
|
$
|
0.08
|
|
Third quarter ended September 30, 2013
|
|
$
|
34.01
|
|
|
$
|
29.42
|
|
|
$
|
0.08
|
|
Fourth quarter ended December 31, 2013
|
|
$
|
36.70
|
|
|
$
|
29.32
|
|
|
$
|
0.08
|
|
Fiscal Year 2012
|
|
|
|
|
|
|
||||||
First quarter ended March 31, 2012
|
|
$
|
38.00
|
|
|
$
|
27.68
|
|
|
$
|
0.05
|
|
Second quarter ended June 30, 2012
|
|
$
|
35.97
|
|
|
$
|
22.73
|
|
|
$
|
0.05
|
|
Third quarter ended September 30, 2012
|
|
$
|
32.10
|
|
|
$
|
22.09
|
|
|
$
|
0.05
|
|
Fourth quarter ended December 31, 2012
|
|
$
|
31.84
|
|
|
$
|
25.95
|
|
|
$
|
0.13
|
|
Purchase Period
|
Total Number
of Shares
Purchased (a)
|
|
Average
Price Paid
per Share
|
|
Total Number of
Shares Purchased
as Part of Publicly
Announced Plans
or Programs (a)
|
|
Maximum Number of
Shares that May Yet Be
Purchased Under the
Plans or Programs (b)
|
|||||
October 1 – 31, 2013
|
|
|
|
|
|
|
|
|||||
Repurchase program
|
—
|
|
|
$
|
—
|
|
|
—
|
|
|
7,584,764
|
|
Employee transactions
|
707
|
|
|
$
|
33.20
|
|
|
—
|
|
|
—
|
|
November 1 – 29, 2013
|
|
|
|
|
|
|
|
|||||
Repurchase program
|
—
|
|
|
$
|
—
|
|
|
—
|
|
|
7,584,764
|
|
Employee transactions
|
88
|
|
|
$
|
33.95
|
|
|
—
|
|
|
—
|
|
December 2 – 31, 2013
|
|
|
|
|
|
|
|
|||||
Repurchase program
|
—
|
|
|
$
|
—
|
|
|
—
|
|
|
7,584,764
|
|
Employee transactions
|
29
|
|
|
$
|
31.02
|
|
|
—
|
|
|
—
|
|
Total
|
|
|
|
|
|
|
|
|||||
Repurchase program
|
—
|
|
|
$
|
—
|
|
|
—
|
|
|
7,584,764
|
|
Employee transactions
|
824
|
|
|
$
|
33.20
|
|
|
—
|
|
|
—
|
|
(a)
|
The difference between total number of shares purchased and total number of shares purchased as part of publicly announced plans or programs pertains to repurchases under our share maintenance program.
|
(b)
|
Represents remaining common shares that may be repurchased pursuant to the share repurchase program authorized and announced on
August 26, 2011
.
|
|
12/31/2008
|
|
12/31/2009
|
|
12/31/2010
|
|
12/31/2011
|
|
12/30/2012
|
|
12/31/2013
|
||||||||||||
KBR
|
$
|
100.00
|
|
|
$
|
126.46
|
|
|
$
|
204.49
|
|
|
$
|
188.30
|
|
|
$
|
203.54
|
|
|
$
|
216.94
|
|
Dow Jones Heavy Construction
|
100.00
|
|
|
113.81
|
|
|
145.55
|
|
|
119.54
|
|
|
144.42
|
|
|
188.76
|
|
||||||
Russell 1000
|
100.00
|
|
|
125.47
|
|
|
142.87
|
|
|
142.15
|
|
|
161.94
|
|
|
211.24
|
|
|
|
Years Ended December 31,
|
||||||||||||||||||
|
|
2013
|
|
2012
|
|
2011
|
|
2010
|
|
2009
|
||||||||||
Millions of dollars, except per share amounts
|
|
|
||||||||||||||||||
Statement of Operations Data:
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Revenues
|
|
$
|
7,283
|
|
|
$
|
7,770
|
|
|
$
|
9,103
|
|
|
$
|
9,962
|
|
|
$
|
12,060
|
|
Gross profit
|
|
581
|
|
|
518
|
|
|
640
|
|
|
689
|
|
|
712
|
|
|||||
Equity in earnings of unconsolidated affiliates (a)
|
|
137
|
|
|
151
|
|
|
158
|
|
|
137
|
|
|
45
|
|
|||||
Impairment of goodwill and long-lived assets (b)
|
|
—
|
|
|
(180
|
)
|
|
—
|
|
|
(5
|
)
|
|
(6
|
)
|
|||||
Operating income
|
|
471
|
|
|
299
|
|
|
587
|
|
|
609
|
|
|
536
|
|
|||||
Income from continuing operations, net of tax
|
|
327
|
|
|
202
|
|
|
540
|
|
|
395
|
|
|
364
|
|
|||||
Net income attributable to noncontrolling interests
|
|
(98
|
)
|
|
(58
|
)
|
|
(60
|
)
|
|
(68
|
)
|
|
(74
|
)
|
|||||
Net income attributable to KBR
|
|
229
|
|
|
144
|
|
|
480
|
|
|
327
|
|
|
290
|
|
|||||
Basic net income attributable to KBR per share
|
|
$
|
1.55
|
|
|
$
|
0.97
|
|
|
$
|
3.18
|
|
|
$
|
2.08
|
|
|
$
|
1.80
|
|
Diluted net income attributable to KBR per share
|
|
$
|
1.54
|
|
|
$
|
0.97
|
|
|
$
|
3.16
|
|
|
$
|
2.07
|
|
|
$
|
1.79
|
|
Cash dividends declared per share (c)
|
|
$
|
0.24
|
|
|
$
|
0.28
|
|
|
$
|
0.20
|
|
|
$
|
0.15
|
|
|
$
|
0.20
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Balance Sheet Data (as of the end of period):
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Total assets
|
|
$
|
5,516
|
|
|
$
|
5,767
|
|
|
$
|
5,673
|
|
|
$
|
5,417
|
|
|
$
|
5,327
|
|
Long-term nonrecourse project-finance debt
|
|
78
|
|
|
84
|
|
|
88
|
|
|
92
|
|
|
—
|
|
|||||
Total shareholders’ equity
|
|
$
|
2,595
|
|
|
$
|
2,511
|
|
|
$
|
2,442
|
|
|
$
|
2,204
|
|
|
$
|
2,296
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Other Financial Data (as of the end of period):
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Backlog of unfulfilled orders
|
|
$
|
14,414
|
|
|
$
|
14,931
|
|
|
$
|
10,931
|
|
|
$
|
12,041
|
|
|
$
|
14,098
|
|
(a)
|
In 2013, we reclassified equity in earnings of unconsolidated affiliates from revenues to a separate component of operating income on our consolidated statement of income. We reclassified the prior year amounts to conform to our revised presentation as a component of operating income but not a component of revenues.
|
(b)
|
Included in 2012 is a goodwill impairment charge of
$178 million
in our IGP business segment. Included in 2009 is a goodwill impairment charge of
$6 million
in our Other business segment. Included in 2012 and 2010 are impairment of long-lived asset charges of
$2 million
and
$5 million
, respectively, primarily related to equipment, land and buildings.
|
(c)
|
In 2012, we declared five dividends totaling
$0.28
per share. In each quarter during 2012, we declared a dividend of
$0.05
per share. In the fourth quarter of 2012, we declared an additional dividend of
$0.08
per share on
December 18, 2012
. Consequently, in 2013 we declared only three dividends totaling
$0.24
per share.
|
Item 7.
|
Management’s Discussion and Analysis of Financial Condition and Results of Operations
|
|
|
Year Ending December 31, 2013
|
||||||||||
Millions of dollars
|
Business
Segment Revenue |
|
Services
Revenue
|
|
Total
Revenue by
Market
Sectors
|
||||||
Gas Monetization
|
$
|
2,155
|
|
|
$
|
—
|
|
|
$
|
2,155
|
|
Hydrocarbons
|
1,482
|
|
|
801
|
|
|
2,283
|
|
|||
Infrastructure, Government and Power
|
1,535
|
|
|
1,250
|
|
|
2,785
|
|
|||
Services
|
2,051
|
|
|
(2,051
|
)
|
|
—
|
|
|||
Other
|
60
|
|
|
—
|
|
|
60
|
|
|||
Total KBR Revenue
|
$
|
7,283
|
|
|
$
|
—
|
|
|
$
|
7,283
|
|
|
Year Ending December 31, 2012
|
||||||||||
Millions of dollars
|
Business
Segment Revenue |
|
Services
Revenue
|
|
Total
Revenue by
Market
Sectors
|
||||||
Gas Monetization
|
$
|
3,006
|
|
|
$
|
—
|
|
|
$
|
3,006
|
|
Hydrocarbons
|
1,260
|
|
|
739
|
|
|
1,999
|
|
|||
Infrastructure, Government and Power
|
1,848
|
|
|
861
|
|
|
2,709
|
|
|||
Services
|
1,600
|
|
|
(1,600
|
)
|
|
—
|
|
|||
Other
|
56
|
|
|
—
|
|
|
56
|
|
|||
Total KBR Revenue
|
$
|
7,770
|
|
|
$
|
—
|
|
|
$
|
7,770
|
|
|
Year Ending December 31, 2011
|
||||||||||
Millions of dollars
|
Business
Segment Revenue |
|
Services
Revenue
|
|
Total
Revenue by
Market
Sectors
|
||||||
Gas Monetization
|
$
|
3,017
|
|
|
$
|
—
|
|
|
$
|
3,017
|
|
Hydrocarbons
|
1,210
|
|
|
652
|
|
|
1,862
|
|
|||
Infrastructure, Government and Power
|
3,261
|
|
|
912
|
|
|
4,173
|
|
|||
Services
|
1,564
|
|
|
(1,564
|
)
|
|
—
|
|
|||
Other
|
51
|
|
|
—
|
|
|
51
|
|
|||
Total KBR Revenue
|
$
|
9,103
|
|
|
$
|
—
|
|
|
$
|
9,103
|
|
|
December 31,
|
||||||
Millions of dollars
|
2013
|
|
2012
|
||||
Gas Monetization
|
$
|
6,158
|
|
|
$
|
7,745
|
|
Hydrocarbons
|
2,619
|
|
|
1,354
|
|
||
Infrastructure, Government and Power
|
2,097
|
|
|
2,824
|
|
||
Services
|
2,544
|
|
|
2,025
|
|
||
Other
|
996
|
|
|
983
|
|
||
Total backlog
|
$
|
14,414
|
|
|
$
|
14,931
|
|
Cash flows activities summary
|
|
|
|
|
|
|
||||||
|
|
December 31,
|
||||||||||
Millions of dollars
|
|
2013
|
|
2012
|
|
2011
|
||||||
Cash flows provided by operating activities
|
|
$
|
290
|
|
|
$
|
142
|
|
|
$
|
650
|
|
Cash flows provided by (used in) investing activities
|
|
(62
|
)
|
|
52
|
|
|
(88
|
)
|
|||
Cash flows used in financing activities
|
|
(148
|
)
|
|
(116
|
)
|
|
(377
|
)
|
|||
Effect of exchange rate changes on cash
|
|
(34
|
)
|
|
9
|
|
|
(5
|
)
|
|||
Increase in cash and equivalents
|
|
$
|
46
|
|
|
$
|
87
|
|
|
$
|
180
|
|
|
Payments Due
|
||||||||||||||||||||||||||
Millions of dollars
|
2014
|
|
2015
|
|
2016
|
|
2017
|
|
2018
|
|
Thereafter
|
|
Total
|
||||||||||||||
Operating leases
|
$
|
100
|
|
|
$
|
88
|
|
|
$
|
80
|
|
|
$
|
62
|
|
|
$
|
55
|
|
|
$
|
399
|
|
|
$
|
784
|
|
Purchase obligations (a)
|
18
|
|
|
4
|
|
|
1
|
|
|
1
|
|
|
1
|
|
|
3
|
|
|
28
|
|
|||||||
Pension funding obligation (b)
|
46
|
|
|
46
|
|
|
46
|
|
|
46
|
|
|
46
|
|
|
234
|
|
|
464
|
|
|||||||
Nonrecourse project finance debt
|
10
|
|
|
10
|
|
|
11
|
|
|
12
|
|
|
12
|
|
|
33
|
|
|
88
|
|
|||||||
Total (c)
|
$
|
174
|
|
|
$
|
148
|
|
|
$
|
138
|
|
|
$
|
121
|
|
|
$
|
114
|
|
|
$
|
669
|
|
|
$
|
1,364
|
|
|
(a)
|
In the ordinary course of business, we enter into commitments for the purchase or lease of software, materials, supplies and similar items. The purchase obligations can span several years depending on the duration of the projects. In general, the costs associated with those purchase obligations are expensed to correspond with the revenue earned on the related projects. The purchase obligations disclosed above do not include purchase obligations that we enter into with vendors in the normal course of business that support existing contracting arrangements with our customers.
|
(b)
|
Included in our pension obligations are payments related to our agreement with the trustees of our international plan. The agreement calls for minimum contributions of £28 million in 2014 through 2023. The foreign funding obligations were converted to U.S. dollars using the conversion rate as of
December 31, 2013
. KBR, Inc. has provided a guarantee for up to £125 million in support of Kellogg Brown & Root (U.K.) Limited's obligation to make payments to the plan in respect of its liability under the Pensions Act 1995.
|
(c)
|
Not included in the total are uncertain tax positions recorded pursuant to ASC 740 - Income Taxes, which totaled
$69 million
as of
December 31, 2013
. The ultimate timing of when these obligations will be settled cannot be determined with reasonable assurance and have been excluded from the table above. See Note
12
for further discussion on income taxes.
|
|
|
|
|
|
Page No.
|
|
||
|
||
|
||
|
||
|
||
|
||
|
|
Years ended December 31,
|
||||||||||
|
2013
|
|
2012
|
|
2011
|
||||||
Revenues
|
$
|
7,283
|
|
|
$
|
7,770
|
|
|
$
|
9,103
|
|
Cost of revenues
|
(6,702
|
)
|
|
(7,252
|
)
|
|
(8,463
|
)
|
|||
Gross profit
|
581
|
|
|
518
|
|
|
640
|
|
|||
Equity in earnings of unconsolidated affiliates
|
137
|
|
|
151
|
|
|
158
|
|
|||
General and administrative expenses
|
(249
|
)
|
|
(222
|
)
|
|
(214
|
)
|
|||
Impairment of goodwill and long-lived assets
|
—
|
|
|
(180
|
)
|
|
—
|
|
|||
Gain on disposition of assets
|
2
|
|
|
32
|
|
|
3
|
|
|||
Operating income
|
471
|
|
|
299
|
|
|
587
|
|
|||
Interest expense, net of interest income
|
(5
|
)
|
|
(7
|
)
|
|
(18
|
)
|
|||
Foreign currency gains (losses)
|
—
|
|
|
(2
|
)
|
|
3
|
|
|||
Other non-operating expenses
|
(3
|
)
|
|
(2
|
)
|
|
—
|
|
|||
Income before income taxes and noncontrolling interests
|
463
|
|
|
288
|
|
|
572
|
|
|||
Provision for income taxes
|
(136
|
)
|
|
(86
|
)
|
|
(32
|
)
|
|||
Net income
|
327
|
|
|
202
|
|
|
540
|
|
|||
Net income attributable to noncontrolling interests
|
(98
|
)
|
|
(58
|
)
|
|
(60
|
)
|
|||
Net income attributable to KBR
|
$
|
229
|
|
|
$
|
144
|
|
|
$
|
480
|
|
Net income attributable to KBR per share:
|
|
|
|
|
|
||||||
Basic
|
$
|
1.55
|
|
|
$
|
0.97
|
|
|
$
|
3.18
|
|
Diluted
|
$
|
1.54
|
|
|
$
|
0.97
|
|
|
$
|
3.16
|
|
Basic weighted average common shares outstanding
|
148
|
|
|
148
|
|
|
150
|
|
|||
Diluted weighted average common shares outstanding
|
149
|
|
|
149
|
|
|
151
|
|
|||
Cash dividends declared per share
|
$
|
0.24
|
|
|
$
|
0.28
|
|
|
$
|
0.20
|
|
|
Years ended December 31,
|
||||||||||
|
2013
|
|
2012
|
|
2011
|
||||||
Net income
|
$
|
327
|
|
|
$
|
202
|
|
|
$
|
540
|
|
Other comprehensive income (loss), net of tax:
|
|
|
|
|
|
||||||
Cumulative translation adjustments (“CTA”):
|
|
|
|
|
|
||||||
Cumulative translation adjustments, net of tax
|
(36
|
)
|
|
(11
|
)
|
|
(17
|
)
|
|||
Reclassification adjustment for CTA included in net income
|
1
|
|
|
(7
|
)
|
|
(2
|
)
|
|||
Net cumulative translation adjustment, net of tax of $(27), $8 and $1
|
(35
|
)
|
|
(18
|
)
|
|
(19
|
)
|
|||
Pension liability adjustments, net of tax:
|
|
|
|
|
|
||||||
Pension liability adjustments, net of tax
|
(122
|
)
|
|
(77
|
)
|
|
(110
|
)
|
|||
Reclassification adjustment for pension liability losses included in net income
|
35
|
|
|
27
|
|
|
21
|
|
|||
Net pension liability adjustments, net of taxes of $(18), $(14) and $(32)
|
(87
|
)
|
|
(50
|
)
|
|
(89
|
)
|
|||
Unrealized gains (losses) on derivatives:
|
|
|
|
|
|
||||||
Unrealized holding gains (losses) on derivatives, net of tax
|
1
|
|
|
2
|
|
|
(5
|
)
|
|||
Reclassification adjustments for losses included in net income
|
(1
|
)
|
|
4
|
|
|
2
|
|
|||
Net unrealized gain (loss) on derivatives, net of taxes of $0, $(1) and $1
|
—
|
|
|
6
|
|
|
(3
|
)
|
|||
Other comprehensive (loss), net of tax
|
(122
|
)
|
|
(62
|
)
|
|
(111
|
)
|
|||
Comprehensive income, net of tax
|
205
|
|
|
140
|
|
|
429
|
|
|||
Less: Comprehensive income attributable to noncontrolling interests
|
(106
|
)
|
|
(58
|
)
|
|
(59
|
)
|
|||
Comprehensive income attributable to KBR
|
$
|
99
|
|
|
$
|
82
|
|
|
$
|
370
|
|
|
December 31,
|
||||||
|
2013
|
|
2012
|
||||
Assets
|
|
|
|
||||
Current assets:
|
|
|
|
||||
Cash and equivalents
|
$
|
1,099
|
|
|
$
|
1,053
|
|
Accounts receivable, net of allowance for doubtful accounts of $18 and $15
|
1,063
|
|
|
1,087
|
|
||
Costs and estimated earnings in excess of billings on uncompleted contracts ("CIE")
|
458
|
|
|
589
|
|
||
Deferred income taxes
|
194
|
|
|
251
|
|
||
Other current assets
|
196
|
|
|
464
|
|
||
Total current assets
|
3,010
|
|
|
3,444
|
|
||
Property, plant, and equipment, net of accumulated depreciation of $397 and $356 (including net PPE of $67 and $72 owned by a variable interest entity)
|
415
|
|
|
390
|
|
||
Goodwill
|
772
|
|
|
779
|
|
||
Intangible assets, net of amortization
|
85
|
|
|
99
|
|
||
Equity in and advances to unconsolidated affiliates
|
156
|
|
|
217
|
|
||
Deferred income taxes
|
337
|
|
|
203
|
|
||
Claims and accounts receivable
|
628
|
|
|
518
|
|
||
Other assets
|
113
|
|
|
117
|
|
||
Total assets
|
$
|
5,516
|
|
|
$
|
5,767
|
|
Liabilities and Shareholders’ Equity
|
|
|
|
||||
Current liabilities:
|
|
|
|
||||
Accounts payable
|
$
|
747
|
|
|
$
|
756
|
|
Payable to former parent
|
105
|
|
|
49
|
|
||
Billings in excess of costs and estimated earnings on uncompleted contracts ("BIE")
|
392
|
|
|
439
|
|
||
Accrued salaries, wages and benefits
|
239
|
|
|
242
|
|
||
Other current liabilities
|
345
|
|
|
698
|
|
||
Total current liabilities
|
1,828
|
|
|
2,184
|
|
||
Pension obligations
|
477
|
|
|
391
|
|
||
Employee compensation and benefits
|
114
|
|
|
120
|
|
||
Income tax payable
|
70
|
|
|
90
|
|
||
Deferred income taxes
|
87
|
|
|
77
|
|
||
Other liabilities
|
345
|
|
|
394
|
|
||
Total liabilities
|
2,921
|
|
|
3,256
|
|
||
KBR shareholders’ equity:
|
|
|
|
||||
Preferred stock, $0.001 par value, 50,000,000 shares authorized, 0 shares issued and outstanding
|
—
|
|
|
—
|
|
||
Common stock, $0.001 par value, 300,000,000 shares authorized, 173,924,509 and 173,218,898 shares issued, and 148,195,208 and 147,584,764 shares outstanding
|
—
|
|
|
—
|
|
||
Paid-in capital in excess of par ("PIC")
|
2,065
|
|
|
2,049
|
|
||
Accumulated other comprehensive loss ("AOCL")
|
(740
|
)
|
|
(610
|
)
|
||
Retained earnings
|
1,902
|
|
|
1,709
|
|
||
Treasury stock, 25,729,301 shares and 25,634,134 shares, at cost
|
(610
|
)
|
|
(606
|
)
|
||
Total KBR shareholders’ equity
|
2,617
|
|
|
2,542
|
|
||
Noncontrolling interests ("NCI")
|
(22
|
)
|
|
(31
|
)
|
||
Total shareholders’ equity
|
2,595
|
|
|
2,511
|
|
||
Total liabilities and shareholders’ equity
|
$
|
5,516
|
|
|
$
|
5,767
|
|
|
December 31,
|
||||||||||
|
2013
|
|
2012
|
|
2011
|
||||||
Balance at January 1,
|
$
|
2,511
|
|
|
$
|
2,442
|
|
|
$
|
2,204
|
|
Deferred tax and foreign currency adjustments to PIC
|
—
|
|
|
17
|
|
|
—
|
|
|||
Share-based compensation
|
16
|
|
|
16
|
|
|
19
|
|
|||
Common stock issued upon exercise of stock options
|
6
|
|
|
7
|
|
|
7
|
|
|||
Post-closing adjustment related to acquisition of former NCI partner
|
—
|
|
|
—
|
|
|
(5
|
)
|
|||
Tax benefit increase related to share-based plans
|
—
|
|
|
4
|
|
|
3
|
|
|||
Dividends declared to shareholders
|
(36
|
)
|
|
(42
|
)
|
|
(30
|
)
|
|||
Adjustments pursuant to Accounting Referee's report on tax sharing agreement
|
(7
|
)
|
|
—
|
|
|
—
|
|
|||
Repurchases of common stock
|
(7
|
)
|
|
(40
|
)
|
|
(118
|
)
|
|||
Issuance of employee stock purchase plan ("ESPP") shares
|
4
|
|
|
3
|
|
|
3
|
|
|||
Distributions to noncontrolling interests
|
(108
|
)
|
|
(36
|
)
|
|
(63
|
)
|
|||
Investments from noncontrolling interests
|
9
|
|
|
—
|
|
|
—
|
|
|||
Change in NCI due to consolidation of previously unconsolidated JV
|
2
|
|
|
—
|
|
|
—
|
|
|||
Other noncontrolling interests activity
|
—
|
|
|
—
|
|
|
(7
|
)
|
|||
Comprehensive income
|
205
|
|
|
140
|
|
|
429
|
|
|||
Balance at December 31,
|
$
|
2,595
|
|
|
$
|
2,511
|
|
|
$
|
2,442
|
|
KBR, Inc.
Consolidated Statements of Cash Flows
(In millions)
|
|||||||||||
|
Years ended December 31,
|
||||||||||
|
2013
|
|
2012
|
|
2011
|
||||||
Cash flows from operating activities:
|
|
|
|
|
|
||||||
Net income
|
$
|
327
|
|
|
$
|
202
|
|
|
$
|
540
|
|
Adjustments to reconcile net income to net cash provided by operating activities:
|
|
|
|
|
|
||||||
Depreciation and amortization
|
68
|
|
|
65
|
|
|
71
|
|
|||
Equity in earnings of unconsolidated affiliates
|
(137
|
)
|
|
(151
|
)
|
|
(158
|
)
|
|||
Deferred income tax (benefit) expense
|
24
|
|
|
18
|
|
|
(173
|
)
|
|||
Gain on disposition of assets
|
(2
|
)
|
|
(32
|
)
|
|
(3
|
)
|
|||
Impairment of goodwill and long-lived assets
|
—
|
|
|
180
|
|
|
—
|
|
|||
Other
|
21
|
|
|
35
|
|
|
17
|
|
|||
Changes in operating assets and liabilities:
|
|
|
|
|
|
||||||
Accounts receivable
|
(7
|
)
|
|
(9
|
)
|
|
265
|
|
|||
Costs and estimated earnings in excess of billings on uncompleted contracts
|
80
|
|
|
(239
|
)
|
|
(32
|
)
|
|||
Accounts payable
|
49
|
|
|
(14
|
)
|
|
(110
|
)
|
|||
Billings in excess of costs and estimated earnings on uncompleted contracts
|
(29
|
)
|
|
(93
|
)
|
|
61
|
|
|||
Accrued salary, wages and benefits
|
(10
|
)
|
|
(8
|
)
|
|
31
|
|
|||
Reserve for loss on uncompleted contracts
|
(44
|
)
|
|
34
|
|
|
(4
|
)
|
|||
Collection (repayment) of advances from (to) unconsolidated affiliates, net
|
14
|
|
|
(6
|
)
|
|
14
|
|
|||
Distributions of earnings received from unconsolidated affiliates
|
180
|
|
|
108
|
|
|
182
|
|
|||
Payment on performance bonds for the EPC 1 project in Mexico
|
(108
|
)
|
|
—
|
|
|
—
|
|
|||
Income taxes payable
|
(22
|
)
|
|
(62
|
)
|
|
12
|
|
|||
Pension funding
|
(54
|
)
|
|
(30
|
)
|
|
(74
|
)
|
|||
Retainage payable
|
(35
|
)
|
|
(70
|
)
|
|
(28
|
)
|
|||
Subcontractor advances
|
20
|
|
|
131
|
|
|
36
|
|
|||
Other assets and liabilities
|
(45
|
)
|
|
83
|
|
|
3
|
|
|||
Total cash flows provided by operating activities
|
290
|
|
|
142
|
|
|
650
|
|
|||
Cash flows from investing activities:
|
|
|
|
|
|
||||||
Acquisition or disposition of businesses
|
10
|
|
|
(3
|
)
|
|
—
|
|
|||
Purchases of property, plant and equipment
|
(78
|
)
|
|
(75
|
)
|
|
(83
|
)
|
|||
Proceeds from sale of assets and investments
|
6
|
|
|
127
|
|
|
6
|
|
|||
(Investment in)/return of capital from equity method joint ventures
|
—
|
|
|
3
|
|
|
(11
|
)
|
|||
Total cash flows provided by (used in) investing activities
|
$
|
(62
|
)
|
|
$
|
52
|
|
|
$
|
(88
|
)
|
KBR, Inc.
Consolidated Statements of Cash Flows
(In millions)
|
|||||||||||
|
Years ended December 31,
|
||||||||||
|
2013
|
|
2012
|
|
2011
|
||||||
Cash flows from financing activities:
|
|
|
|
|
|
||||||
Acquisition of noncontrolling interest
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
(178
|
)
|
Purchases of treasury stock
|
(7
|
)
|
|
(40
|
)
|
|
(118
|
)
|
|||
Distributions to noncontrolling interests
|
(108
|
)
|
|
(36
|
)
|
|
(63
|
)
|
|||
Investments from noncontrolling interests
|
9
|
|
|
—
|
|
|
—
|
|
|||
Payments of dividends to shareholders
|
(36
|
)
|
|
(37
|
)
|
|
(30
|
)
|
|||
Net proceeds from issuance of common stock
|
6
|
|
|
7
|
|
|
7
|
|
|||
Excess tax benefits from share-based compensation
|
—
|
|
|
4
|
|
|
3
|
|
|||
Payments on short-term and long-term borrowings
|
(14
|
)
|
|
(14
|
)
|
|
(15
|
)
|
|||
Return of cash collateral on letters of credit, net
|
—
|
|
|
—
|
|
|
17
|
|
|||
Other
|
2
|
|
|
—
|
|
|
—
|
|
|||
Total cash flows used in financing activities
|
(148
|
)
|
|
(116
|
)
|
|
(377
|
)
|
|||
Effect of exchange rate changes on cash
|
(34
|
)
|
|
9
|
|
|
(5
|
)
|
|||
Increase in cash and equivalents
|
46
|
|
|
87
|
|
|
180
|
|
|||
Cash and equivalents at beginning of period
|
1,053
|
|
|
966
|
|
|
786
|
|
|||
Cash and equivalents at end of period
|
$
|
1,099
|
|
|
$
|
1,053
|
|
|
$
|
966
|
|
Supplemental disclosure of cash flows information:
|
|
|
|
|
|
||||||
Cash paid for interest
|
$
|
12
|
|
|
$
|
15
|
|
|
$
|
22
|
|
Cash paid for income taxes (net of refunds)
|
$
|
127
|
|
|
$
|
81
|
|
|
$
|
201
|
|
Noncash operating activities
|
|
|
|
|
|
||||||
Other assets change for Barracuda arbitration and FCPA matters (Note 15)
|
$
|
(219
|
)
|
|
$
|
22
|
|
|
$
|
185
|
|
Other liabilities change for Barracuda arbitration and FCPA matters (Note 15)
|
$
|
219
|
|
|
$
|
(22
|
)
|
|
$
|
(185
|
)
|
Noncash financing activities
|
|
|
|
|
|
||||||
Dividends declared
|
$
|
12
|
|
|
$
|
12
|
|
|
$
|
7
|
|
•
|
Cost-plus and Time and Material contracts - These are contracts under which we are reimbursed for allowable or otherwise defined costs incurred plus a fee or mark-up. The contracts may also include incentives for various performance criteria, including quality, timeliness, ingenuity, safety and cost-effectiveness. In addition, our costs are generally subject to review by our clients and regulatory audit agencies, and such reviews could result in costs being disputed as non-reimbursable under the terms of the contract.
|
•
|
Target-price contracts - These are contracts under which we are reimbursed for costs plus a fee consisting of two parts: (1) a fixed amount, which does not vary with performance, but may be at risk when a target price is exceeded; and (2) an award amount based on the performance and cost-effectiveness of the project. As a result, we are generally able to recover cost overruns on these contracts from actual damages for late delivery or the failure to meet certain performance criteria. Target-price contracts also generally provide for sharing of costs in excess of or savings for costs less than the target. In some contracts, we may agree to share cost overruns in excess of our fee, which could result in a loss on the project.
|
|
December 31,
|
||||||
Millions of dollars
|
2013
|
|
2012
|
||||
Barracuda arbitration and FCPA matters (Note 15)
|
$
|
—
|
|
|
$
|
219
|
|
Prepaid expenses
|
72
|
|
|
64
|
|
||
VAT
|
24
|
|
|
16
|
|
||
Refundable income taxes
|
64
|
|
|
98
|
|
||
Other miscellaneous assets
|
36
|
|
|
67
|
|
||
Total other current assets
|
$
|
196
|
|
|
$
|
464
|
|
|
December 31,
|
||||||
Millions of dollars
|
2013
|
|
2012
|
||||
Barracuda arbitration and FCPA matters (Note 15)
|
$
|
—
|
|
|
$
|
219
|
|
Retainage payable
|
102
|
|
|
136
|
|
||
Income taxes payable
|
60
|
|
|
116
|
|
||
Deferred tax liability
|
55
|
|
|
44
|
|
||
Other miscellaneous liabilities
|
128
|
|
|
183
|
|
||
Total other current liabilities
|
$
|
345
|
|
|
$
|
698
|
|
|
Years ended December 31,
|
||||||||||
Millions of dollars
|
2013
|
|
2012
|
|
2011
|
||||||
Revenue:
|
|
|
|
|
|
||||||
Gas Monetization
|
$
|
2,155
|
|
|
$
|
3,006
|
|
|
$
|
3,017
|
|
Hydrocarbons
|
1,482
|
|
|
1,260
|
|
|
1,210
|
|
|||
Infrastructure, Government and Power
|
1,535
|
|
|
1,848
|
|
|
3,261
|
|
|||
Services
|
2,051
|
|
|
1,600
|
|
|
1,564
|
|
|||
Other
|
60
|
|
|
56
|
|
|
51
|
|
|||
Total
|
$
|
7,283
|
|
|
$
|
7,770
|
|
|
$
|
9,103
|
|
Gross profit (loss):
|
|
|
|
|
|
||||||
Gas Monetization
|
$
|
324
|
|
|
$
|
381
|
|
|
$
|
213
|
|
Hydrocarbons
|
177
|
|
|
185
|
|
|
161
|
|
|||
Infrastructure, Government and Power
|
65
|
|
|
20
|
|
|
201
|
|
|||
Services
|
57
|
|
|
(49
|
)
|
|
31
|
|
|||
Other
|
15
|
|
|
16
|
|
|
16
|
|
|||
Labor cost absorption not allocated to the business segments
|
(57
|
)
|
|
(35
|
)
|
|
18
|
|
|||
Total
|
$
|
581
|
|
|
$
|
518
|
|
|
$
|
640
|
|
Equity in earnings of unconsolidated affiliates:
|
|
|
|
|
|
||||||
Gas Monetization
|
$
|
55
|
|
|
$
|
33
|
|
|
$
|
27
|
|
Hydrocarbons
|
—
|
|
|
1
|
|
|
5
|
|
|||
Infrastructure, Government and Power
|
47
|
|
|
56
|
|
|
67
|
|
|||
Services
|
13
|
|
|
33
|
|
|
26
|
|
|||
Other
|
22
|
|
|
28
|
|
|
33
|
|
|||
Total
|
$
|
137
|
|
|
$
|
151
|
|
|
$
|
158
|
|
Segment operating income
|
|
|
|
|
|
||||||
Gas Monetization
|
$
|
379
|
|
|
$
|
414
|
|
|
$
|
240
|
|
Hydrocarbons
|
177
|
|
|
186
|
|
|
167
|
|
|||
Infrastructure, Government and Power
|
112
|
|
|
(103
|
)
|
|
267
|
|
|||
Services
|
70
|
|
|
(16
|
)
|
|
58
|
|
|||
Other
|
39
|
|
|
75
|
|
|
51
|
|
|||
Labor cost absorption not allocated to the business segments
|
(57
|
)
|
|
(35
|
)
|
|
18
|
|
|||
Corporate general and administrative expense not allocated to the business segments
|
(249
|
)
|
|
(222
|
)
|
|
(214
|
)
|
|||
Total operating income
|
$
|
471
|
|
|
$
|
299
|
|
|
$
|
587
|
|
Capital expenditures:
|
|
|
|
|
|
||||||
Gas Monetization
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Hydrocarbons
|
—
|
|
|
1
|
|
|
—
|
|
|||
Infrastructure, Government and Power
|
2
|
|
|
1
|
|
|
3
|
|
|||
Services
|
7
|
|
|
5
|
|
|
3
|
|
|||
Other (a)
|
69
|
|
|
68
|
|
|
77
|
|
|||
Total
|
$
|
78
|
|
|
$
|
75
|
|
|
$
|
83
|
|
Depreciation and amortization:
|
|
|
|
|
|
||||||
Gas Monetization
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Hydrocarbons
|
1
|
|
|
1
|
|
|
2
|
|
|||
Infrastructure, Government and Power
|
11
|
|
|
13
|
|
|
14
|
|
|||
Services
|
8
|
|
|
8
|
|
|
9
|
|
|||
Other
|
48
|
|
|
43
|
|
|
46
|
|
|||
Total
|
$
|
68
|
|
|
$
|
65
|
|
|
$
|
71
|
|
|
(a)
|
Other includes corporate capital expenditures for ERP of
$53 million
,
$55 million
, and
$20 million
for the years ended December 2013, 2012, and 2011, respectively.
|
|
December 31,
|
||||||
Millions of dollars
|
2013
|
|
2012
|
||||
Total assets:
|
|
|
|
||||
Gas Monetization
|
$
|
2,267
|
|
|
$
|
2,150
|
|
Hydrocarbons
|
1,253
|
|
|
1,161
|
|
||
Infrastructure, Government and Power
|
2,506
|
|
|
2,551
|
|
||
Services
|
1,030
|
|
|
1,020
|
|
||
Other (a)
|
(1,540
|
)
|
|
(1,115
|
)
|
||
Total
|
$
|
5,516
|
|
|
$
|
5,767
|
|
Goodwill:
|
|
|
|
||||
Gas Monetization
|
$
|
85
|
|
|
$
|
85
|
|
Hydrocarbons
|
170
|
|
|
170
|
|
||
Infrastructure, Government and Power
|
222
|
|
|
225
|
|
||
Services
|
286
|
|
|
287
|
|
||
Other
|
9
|
|
|
12
|
|
||
Total
|
$
|
772
|
|
|
$
|
779
|
|
Equity in and advances to related companies:
|
|
|
|
||||
Gas Monetization
|
$
|
6
|
|
|
$
|
37
|
|
Hydrocarbons
|
—
|
|
|
2
|
|
||
Infrastructure, Government and Power (b)
|
(85
|
)
|
|
(76
|
)
|
||
Services
|
49
|
|
|
54
|
|
||
Other (b)
|
186
|
|
|
200
|
|
||
Total
|
$
|
156
|
|
|
$
|
217
|
|
|
(a)
|
Includes intercompany obligations.
|
(b)
|
The credit balance in the IGP business segment is related to activity on the same project performed by a joint venture within the "Other" business segment, resulting in a net equity in and advances to related companies position of
$19 million
and
$24 million
as of December 31, 2013 and 2012, respectively.
|
|
Years ended December 31,
|
||||||||||
Millions of dollars
|
2013
|
|
2012
|
|
2011
|
||||||
Revenue:
|
|
|
|
|
|
||||||
United States
|
$
|
2,470
|
|
|
$
|
2,118
|
|
|
$
|
1,979
|
|
Asia Pacific (includes Australia)
|
1,913
|
|
|
1,910
|
|
|
1,424
|
|
|||
Africa
|
593
|
|
|
1,610
|
|
|
2,079
|
|
|||
Europe
|
575
|
|
|
582
|
|
|
519
|
|
|||
Middle East (excluding Iraq)
|
590
|
|
|
568
|
|
|
701
|
|
|||
Iraq
|
322
|
|
|
445
|
|
|
1,969
|
|
|||
Canada
|
747
|
|
|
431
|
|
|
299
|
|
|||
Other Countries
|
73
|
|
|
106
|
|
|
133
|
|
|||
Total
|
$
|
7,283
|
|
|
$
|
7,770
|
|
|
$
|
9,103
|
|
|
December 31,
|
||||||
Millions of dollars
|
2013
|
|
2012
|
||||
Property, Plant & Equipment, Net:
|
|
|
|
||||
United States
|
$
|
272
|
|
|
$
|
238
|
|
United Kingdom
|
83
|
|
|
92
|
|
||
Other Countries
|
60
|
|
|
60
|
|
||
Total
|
$
|
415
|
|
|
$
|
390
|
|
|
December 31, 2013
|
||||||||||
Millions of dollars
|
International (a)
|
|
Domestic (b)
|
|
Total
|
||||||
Operating cash
|
$
|
197
|
|
|
$
|
215
|
|
|
$
|
412
|
|
Time deposits
|
478
|
|
|
140
|
|
|
618
|
|
|||
Cash held in joint ventures
|
60
|
|
|
9
|
|
|
69
|
|
|||
Total
|
$
|
735
|
|
|
$
|
364
|
|
|
$
|
1,099
|
|
|
December 31, 2012
|
||||||||||
Millions of dollars
|
International (a)
|
|
Domestic (b)
|
|
Total
|
||||||
Operating cash
|
$
|
169
|
|
|
$
|
233
|
|
|
$
|
402
|
|
Time deposits
|
441
|
|
|
9
|
|
|
450
|
|
|||
Cash held in joint ventures
|
65
|
|
|
136
|
|
|
201
|
|
|||
Total
|
$
|
675
|
|
|
$
|
378
|
|
|
$
|
1,053
|
|
(a)
|
Includes deposits held in non-U.S. operating accounts considered to be permanently reinvested outside the U.S. and for which no incremental U.S. tax has been provisioned or paid
|
(b)
|
Includes U.S. dollar and foreign currency deposits held in operating accounts that constitute onshore cash for tax purposes but may reside either in the U.S. or in a foreign country
|
|
December 31, 2013
|
||||||||||
Millions of dollars
|
Trade
|
|
Retainage
|
|
Total
|
||||||
Gas Monetization
|
$
|
262
|
|
|
$
|
—
|
|
|
$
|
262
|
|
Hydrocarbons
|
284
|
|
|
31
|
|
|
315
|
|
|||
Infrastructure, Government and Power
|
137
|
|
|
15
|
|
|
152
|
|
|||
Services
|
278
|
|
|
54
|
|
|
332
|
|
|||
Other
|
2
|
|
|
—
|
|
|
2
|
|
|||
Total
|
$
|
963
|
|
|
$
|
100
|
|
|
$
|
1,063
|
|
|
December 31, 2012
|
||||||||||
Millions of dollars
|
Trade
|
|
Retainage
|
|
Total
|
||||||
Gas Monetization
|
$
|
261
|
|
|
$
|
—
|
|
|
$
|
261
|
|
Hydrocarbons
|
225
|
|
|
15
|
|
|
240
|
|
|||
Infrastructure, Government and Power
|
242
|
|
|
12
|
|
|
254
|
|
|||
Services
|
270
|
|
|
56
|
|
|
326
|
|
|||
Other
|
6
|
|
|
—
|
|
|
6
|
|
|||
Total
|
$
|
1,004
|
|
|
$
|
83
|
|
|
$
|
1,087
|
|
|
December 31,
|
||||||
Millions of dollars
|
2013
|
|
2012
|
||||
Gas Monetization
|
$
|
44
|
|
|
$
|
165
|
|
Hydrocarbons
|
146
|
|
|
131
|
|
||
Infrastructure, Government and Power
|
131
|
|
|
171
|
|
||
Services
|
132
|
|
|
117
|
|
||
Other
|
5
|
|
|
5
|
|
||
Total
|
$
|
458
|
|
|
$
|
589
|
|
|
December 31,
|
||||||
Millions of dollars
|
2013
|
|
2012
|
||||
Gas Monetization
|
$
|
30
|
|
|
$
|
121
|
|
Hydrocarbons
|
139
|
|
|
101
|
|
||
Infrastructure, Government and Power
|
200
|
|
|
174
|
|
||
Services
|
23
|
|
|
43
|
|
||
Other
|
—
|
|
|
—
|
|
||
Total
|
$
|
392
|
|
|
$
|
439
|
|
|
December 31,
|
||||||
Millions of dollars
|
2013
|
|
2012
|
||||
Amounts included in project estimates-at-completion at January 1
|
$
|
167
|
|
|
$
|
19
|
|
Changes in estimates-at-completion
|
109
|
|
|
150
|
|
||
Approved
|
(161
|
)
|
|
(2
|
)
|
||
Amounts included in project estimates-at-completion at December 31, for unapproved change orders and claims
|
$
|
115
|
|
|
$
|
167
|
|
|
|
|
|
||||
Amounts recorded in revenues on a percentage-of-completion basis at December 31
|
$
|
93
|
|
|
$
|
140
|
|
|
December 31,
|
||||||
Millions of dollars
|
2013
|
|
2012
|
||||
Hydrocarbons
|
$
|
401
|
|
|
$
|
293
|
|
Infrastructure, Government and Power
|
226
|
|
|
224
|
|
||
Other
|
1
|
|
|
1
|
|
||
Total
|
$
|
628
|
|
|
$
|
518
|
|
|
Estimated
Useful
Lives in Years
|
|
December 31,
|
||||||
Millions of dollars
|
|
2013
|
|
2012
|
|||||
Land
|
N/A
|
|
$
|
19
|
|
|
$
|
19
|
|
Buildings and property improvements
|
5-40
|
|
213
|
|
|
210
|
|
||
Equipment and other
|
3-25
|
|
580
|
|
|
517
|
|
||
Total
|
|
|
812
|
|
|
746
|
|
||
Less accumulated depreciation
|
|
|
(397
|
)
|
|
(356
|
)
|
||
Net property, plant and equipment
|
|
|
$
|
415
|
|
|
$
|
390
|
|
Millions of dollars
|
Gas Monetization
|
|
Hydrocarbons
|
|
IGP
|
|
Services
|
|
Other
|
|
Total
|
||||||||||||
Balance at December 31, 2011
|
$
|
85
|
|
|
$
|
164
|
|
|
$
|
403
|
|
|
$
|
287
|
|
|
$
|
12
|
|
|
$
|
951
|
|
Other changes
|
—
|
|
|
6
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
6
|
|
||||||
Impairment of goodwill
|
—
|
|
|
—
|
|
|
(178
|
)
|
|
—
|
|
|
—
|
|
|
(178
|
)
|
||||||
Balance at December 31, 2012
|
85
|
|
|
170
|
|
|
225
|
|
|
287
|
|
|
12
|
|
|
779
|
|
||||||
Other changes
|
—
|
|
|
—
|
|
|
(3
|
)
|
|
(1
|
)
|
|
(3
|
)
|
|
(7
|
)
|
||||||
Balance at December 31, 2013
|
$
|
85
|
|
|
$
|
170
|
|
|
$
|
222
|
|
|
$
|
286
|
|
|
$
|
9
|
|
|
$
|
772
|
|
|
December 31,
|
||||||
Millions of dollars
|
2013
|
|
2012
|
||||
Intangibles not subject to amortization
|
$
|
11
|
|
|
$
|
11
|
|
Intangibles subject to amortization
|
186
|
|
|
192
|
|
||
Total intangibles
|
197
|
|
|
203
|
|
||
Accumulated amortization of intangibles
|
(112
|
)
|
|
(104
|
)
|
||
Net intangibles
|
$
|
85
|
|
|
$
|
99
|
|
|
Years ended December 31,
|
||||||||||
Millions of dollars
|
2013
|
|
2012
|
|
2011
|
||||||
Intangibles amortization expense
|
$
|
14
|
|
|
$
|
15
|
|
|
$
|
16
|
|
Millions of dollars
|
Expected future
intangibles
amortization expense
|
||
2014
|
$
|
11
|
|
2015
|
$
|
10
|
|
2016
|
$
|
10
|
|
2017
|
$
|
10
|
|
2018
|
$
|
9
|
|
Millions of dollars
|
2013
|
|
2012
|
||||
Balance at January 1,
|
$
|
217
|
|
|
$
|
190
|
|
Investments
|
—
|
|
|
(21
|
)
|
||
Equity in earnings of unconsolidated affiliates
|
137
|
|
|
151
|
|
||
Dividends
|
(180
|
)
|
|
(108
|
)
|
||
Advances
|
(14
|
)
|
|
6
|
|
||
Cumulative translation adjustment
|
(5
|
)
|
|
2
|
|
||
Other
|
1
|
|
|
(3
|
)
|
||
Balance at December 31,
|
$
|
156
|
|
|
$
|
217
|
|
|
December 31,
|
||||||
Millions of dollars
|
2013
|
|
2012
|
||||
Accounts Receivable, net of allowance for doubtful accounts
|
$
|
6
|
|
|
$
|
28
|
|
Costs and estimated earnings in excess of billings on uncompleted contracts
|
$
|
2
|
|
|
$
|
3
|
|
Billings in excess of costs and estimated earnings on uncompleted contracts
|
$
|
24
|
|
|
$
|
6
|
|
|
December 31,
|
||||||
Millions of dollars
|
2013
|
|
2012
|
||||
Current assets
|
$
|
4,114
|
|
|
$
|
3,129
|
|
Noncurrent assets
|
4,222
|
|
|
4,159
|
|
||
Total assets
|
$
|
8,336
|
|
|
$
|
7,288
|
|
Current liabilities
|
$
|
3,679
|
|
|
$
|
2,460
|
|
Noncurrent liabilities
|
4,400
|
|
|
4,424
|
|
||
Total KBR-partner equity
|
145
|
|
|
286
|
|
||
Noncontrolling interests
|
112
|
|
|
118
|
|
||
Total partners' equity
|
257
|
|
|
404
|
|
||
Total liabilities and partners' equity
|
$
|
8,336
|
|
|
$
|
7,288
|
|
|
Years ended December 31,
|
||||||||||
Millions of dollars
|
2013
|
|
2012
|
|
2011
|
||||||
Revenue
|
$
|
4,800
|
|
|
$
|
3,442
|
|
|
$
|
2,638
|
|
Operating income
|
$
|
660
|
|
|
$
|
777
|
|
|
$
|
666
|
|
Net income
|
$
|
355
|
|
|
$
|
363
|
|
|
$
|
314
|
|
|
Year ended December 31, 2013
|
||||||||||
Millions of dollars
|
VIE Total assets
|
|
VIE Total liabilities
|
|
Maximum
exposure to
loss
|
||||||
Aspire Defence project
|
$
|
2,985
|
|
|
$
|
2,920
|
|
|
$
|
20
|
|
Ichthys LNG project
|
$
|
2,737
|
|
|
$
|
2,731
|
|
|
$
|
1
|
|
U.K. Road projects
|
$
|
1,314
|
|
|
$
|
1,479
|
|
|
$
|
34
|
|
EBIC Ammonia project
|
$
|
529
|
|
|
$
|
293
|
|
|
$
|
29
|
|
Fermoy Road project
|
$
|
228
|
|
|
$
|
248
|
|
|
$
|
3
|
|
Millions of dollars
|
Year ended December 31, 2012
|
||||||
VIE Total assets
|
|
VIE Total liabilities
|
|||||
Aspire Defence project
|
$
|
2,981
|
|
|
$
|
2,926
|
|
Ichthys LNG project
|
$
|
1,417
|
|
|
$
|
1,324
|
|
U.K. Road projects
|
$
|
1,387
|
|
|
$
|
1,539
|
|
EBIC Ammonia project
|
$
|
675
|
|
|
$
|
379
|
|
Fermoy Road project
|
$
|
255
|
|
|
$
|
253
|
|
Consolidated VIEs
Millions of dollars
|
Year ended December 31, 2013
|
||||||
VIE Total assets
|
|
VIE Total liabilities
|
|||||
Gorgon LNG project
|
$
|
448
|
|
|
$
|
476
|
|
Escravos Gas-to-Liquids project
|
$
|
43
|
|
|
$
|
72
|
|
Fasttrax Limited project
|
$
|
96
|
|
|
$
|
98
|
|
Consolidated VIEs
Millions of dollars
|
Year ended December 31, 2012
|
||||||
VIE Total assets
|
|
VIE Total liabilities
|
|||||
Gorgon LNG project
|
$
|
580
|
|
|
$
|
620
|
|
Escravos Gas-to-Liquids project
|
$
|
267
|
|
|
$
|
320
|
|
Fasttrax Limited project
|
$
|
101
|
|
|
$
|
105
|
|
•
|
Our defined contribution plans provide retirement benefits in return for services rendered. These plans provide an individual account for each participant and have terms that specify how contributions to the participant’s account are to be determined rather than the amount of pension benefits the participant is to receive. Contributions to these plans are based on pretax income and/or discretionary amounts determined on an annual basis. Our expense for the defined contribution plans totaled
$78 million
in 2013,
$81 million
in 2012 and
$71 million
in 2011.
|
•
|
Our defined benefit plans are funded pension plans, which define an amount of pension benefit to be provided, usually as a function of age, years of service or compensation.
|
•
|
recognize on its balance sheet the funded status (measured as the difference between the fair value of plan assets and the benefit obligation) of the pension plan;
|
•
|
recognize, through comprehensive income, certain changes in the funded status of a defined benefit plan in the year in which the changes occur;
|
•
|
measure plan assets and benefit obligations as of the end of the employer’s fiscal year; and
|
•
|
disclose additional information.
|
|
Pension Benefits
|
||||||||||||||
Benefit obligation
|
United States
|
|
Int’l
|
|
United States
|
|
Int’l
|
||||||||
Millions of dollars
|
2013
|
|
2012
|
||||||||||||
Change in projected benefit obligations
|
|
|
|
|
|
|
|
||||||||
Projected benefit obligations at beginning of period
|
$
|
91
|
|
|
$
|
1,862
|
|
|
$
|
88
|
|
|
$
|
1,660
|
|
Service cost
|
—
|
|
|
2
|
|
|
—
|
|
|
2
|
|
||||
Interest cost
|
3
|
|
|
79
|
|
|
3
|
|
|
81
|
|
||||
Foreign currency exchange rate changes
|
—
|
|
|
37
|
|
|
—
|
|
|
63
|
|
||||
Actuarial (gain) loss
|
(5
|
)
|
|
129
|
|
|
5
|
|
|
115
|
|
||||
Other
|
—
|
|
|
(2
|
)
|
|
—
|
|
|
(2
|
)
|
||||
Benefits paid
|
(10
|
)
|
|
(59
|
)
|
|
(5
|
)
|
|
(57
|
)
|
||||
Projected benefit obligations at end of period
|
$
|
79
|
|
|
$
|
2,048
|
|
|
$
|
91
|
|
|
$
|
1,862
|
|
Accumulated benefit obligations at end of period
|
$
|
79
|
|
|
$
|
2,048
|
|
|
$
|
91
|
|
|
$
|
1,862
|
|
|
Pension Benefits
|
||||||||||||||
Plan assets
|
United States
|
|
Int’l
|
|
United States
|
|
Int’l
|
||||||||
Millions of dollars
|
2013
|
|
2012
|
||||||||||||
Change in plan assets
|
|
|
|
|
|
|
|
||||||||
Fair value of plan assets at beginning of period
|
$
|
71
|
|
|
$
|
1,491
|
|
|
$
|
64
|
|
|
$
|
1,354
|
|
Actual return on plan assets
|
8
|
|
|
65
|
|
|
9
|
|
|
117
|
|
||||
Employer contributions
|
1
|
|
|
53
|
|
|
3
|
|
|
27
|
|
||||
Foreign currency exchange rate changes
|
—
|
|
|
33
|
|
|
—
|
|
|
52
|
|
||||
Benefits paid
|
(10
|
)
|
|
(59
|
)
|
|
(5
|
)
|
|
(57
|
)
|
||||
Other
|
—
|
|
|
(3
|
)
|
|
—
|
|
|
(2
|
)
|
||||
Fair value of plan assets at end of period
|
$
|
70
|
|
|
$
|
1,580
|
|
|
$
|
71
|
|
|
$
|
1,491
|
|
Funded status
|
$
|
(9
|
)
|
|
$
|
(468
|
)
|
|
$
|
(20
|
)
|
|
$
|
(371
|
)
|
Pension obligations
|
United States
|
|
Int’l
|
|
United States
|
|
Int’l
|
||||||||
Millions of dollars
|
2013
|
|
2012
|
||||||||||||
Amounts recognized on the consolidated balance sheet
|
|
|
|
|
|
|
|
||||||||
Pension obligations
|
$
|
(9
|
)
|
|
$
|
(468
|
)
|
|
$
|
(20
|
)
|
|
$
|
(371
|
)
|
|
Pension Benefits
|
||||||||||||||||||||||
|
United States
|
|
Int’l
|
|
United States
|
|
Int’l
|
|
United States
|
|
Int’l
|
||||||||||||
Millions of dollars
|
2013
|
|
2012
|
|
2011
|
||||||||||||||||||
Components of net periodic benefit cost
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Service cost
|
$
|
—
|
|
|
$
|
2
|
|
|
$
|
—
|
|
|
$
|
2
|
|
|
$
|
—
|
|
|
$
|
1
|
|
Interest cost
|
3
|
|
|
79
|
|
|
3
|
|
|
81
|
|
|
4
|
|
|
86
|
|
||||||
Expected return on plan assets
|
(5
|
)
|
|
(86
|
)
|
|
(4
|
)
|
|
(93
|
)
|
|
(4
|
)
|
|
(98
|
)
|
||||||
Settlements/curtailments
|
2
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Recognized actuarial loss
|
2
|
|
|
33
|
|
|
2
|
|
|
25
|
|
|
1
|
|
|
20
|
|
||||||
Net periodic benefit cost
|
$
|
2
|
|
|
$
|
28
|
|
|
$
|
1
|
|
|
$
|
15
|
|
|
$
|
1
|
|
|
$
|
9
|
|
|
Pension Benefits
|
||||||
Millions of dollars
|
United States
|
|
Int’l
|
||||
Net actuarial loss, net of tax of $10 and $210, respectively
|
$
|
18
|
|
|
$
|
590
|
|
Total in accumulated other comprehensive loss
|
$
|
18
|
|
|
$
|
590
|
|
|
Pension Benefits
|
||||||
Millions of dollars
|
United States
|
|
International
|
||||
Actuarial loss
|
$
|
2
|
|
|
$
|
31
|
|
Total
|
$
|
2
|
|
|
$
|
31
|
|
Weighted-average assumptions used to determine
net periodic benefit cost
|
Pension Benefits
|
||||||||||||||||
|
United States
|
|
Int’l
|
|
United States
|
|
Int’l
|
|
United States
|
|
Int’l
|
||||||
|
2013
|
|
2012
|
|
2011
|
||||||||||||
Discount rate
|
3.09
|
%
|
|
4.50
|
%
|
|
3.74
|
%
|
|
4.90
|
%
|
|
4.84
|
%
|
|
5.45
|
%
|
Expected return on plan assets
|
7.00
|
%
|
|
6.15
|
%
|
|
7.00
|
%
|
|
6.60
|
%
|
|
7.00
|
%
|
|
7.00
|
%
|
Weighted-average assumptions used to determine benefit obligations at measurement date
|
Pension Benefits
|
||||||||||
|
United States
|
|
Int’l
|
|
United States
|
|
Int’l
|
||||
|
2013
|
|
2012
|
||||||||
Discount rate
|
3.38
|
%
|
|
4.45
|
%
|
|
3.09
|
%
|
|
4.50
|
%
|
Target Allocation - Asset Class
|
2014 Targeted
|
||||
|
Asset Allocation
|
||||
|
United States
|
|
Int'l
|
||
Cash and cash equivalents
|
25
|
%
|
|
—
|
%
|
Equity funds and securities
|
30
|
%
|
|
19
|
%
|
Fixed income funds and securities
|
45
|
%
|
|
56
|
%
|
Hedge funds
|
—
|
%
|
|
8
|
%
|
Real estate funds
|
—
|
%
|
|
5
|
%
|
Other
|
—
|
%
|
|
12
|
%
|
Total
|
100
|
%
|
|
100
|
%
|
International Plans
|
2014 Targeted
|
|
2013 Targeted
|
||||||||
|
Percentage Range
|
|
Percentage Range
|
||||||||
|
Minimum
|
|
Maximum
|
|
Minimum
|
|
Maximum
|
||||
Equity funds and securities
|
—
|
%
|
|
51
|
%
|
|
—
|
%
|
|
51
|
%
|
Fixed income funds and securities
|
—
|
%
|
|
100
|
%
|
|
—
|
%
|
|
100
|
%
|
Hedge funds
|
—
|
%
|
|
20
|
%
|
|
—
|
%
|
|
20
|
%
|
Real estate funds
|
—
|
%
|
|
10
|
%
|
|
—
|
%
|
|
10
|
%
|
Other
|
—
|
%
|
|
35
|
%
|
|
—
|
%
|
|
35
|
%
|
Domestic Plans
|
2014 Targeted
|
|
2013 Targeted
|
||||||||
|
Percentage Range
|
|
Percentage Range
|
||||||||
|
Minimum
|
|
Maximum
|
|
Minimum
|
|
Maximum
|
||||
Cash and cash equivalents
|
25
|
%
|
|
25
|
%
|
|
—
|
%
|
|
—
|
%
|
Equity funds, securities and other
|
39
|
%
|
|
51
|
%
|
|
56
|
%
|
|
71
|
%
|
Fixed income funds and securities
|
24
|
%
|
|
36
|
%
|
|
29
|
%
|
|
44
|
%
|
|
Fair Value Measurements at Reporting Date
|
||||||||||||||
Millions of dollars
|
Total
|
|
Level 1
|
|
Level 2
|
|
Level 3
|
||||||||
Asset Category at December 31, 2013
|
|
|
|
|
|
|
|
||||||||
United States plan assets
|
|
|
|
|
|
|
|
||||||||
Equity funds
|
$
|
15
|
|
|
$
|
10
|
|
|
$
|
5
|
|
|
$
|
—
|
|
Equity securities
|
17
|
|
|
16
|
|
|
1
|
|
|
—
|
|
||||
Fixed income funds
|
8
|
|
|
8
|
|
|
—
|
|
|
—
|
|
||||
Government bonds
|
4
|
|
|
—
|
|
|
4
|
|
|
—
|
|
||||
Corporate bonds
|
8
|
|
|
—
|
|
|
8
|
|
|
—
|
|
||||
Cash and cash equivalents
|
18
|
|
|
—
|
|
|
18
|
|
|
—
|
|
||||
Total United States plan assets
|
$
|
70
|
|
|
$
|
34
|
|
|
$
|
36
|
|
|
$
|
—
|
|
International plan assets
|
|
|
|
|
|
|
|
||||||||
Equity funds
|
$
|
378
|
|
|
$
|
116
|
|
|
$
|
261
|
|
|
$
|
1
|
|
Equity securities
|
51
|
|
|
50
|
|
|
1
|
|
|
—
|
|
||||
Fixed income funds
|
768
|
|
|
400
|
|
|
335
|
|
|
33
|
|
||||
Hedge funds
|
130
|
|
|
—
|
|
|
25
|
|
|
105
|
|
||||
Real estate funds
|
69
|
|
|
—
|
|
|
36
|
|
|
33
|
|
||||
Other funds
|
120
|
|
|
—
|
|
|
69
|
|
|
51
|
|
||||
Cash and cash equivalents
|
50
|
|
|
50
|
|
|
—
|
|
|
—
|
|
||||
Other
|
14
|
|
|
7
|
|
|
—
|
|
|
7
|
|
||||
Total international plan assets
|
$
|
1,580
|
|
|
$
|
623
|
|
|
$
|
727
|
|
|
$
|
230
|
|
Total plan assets at December 31, 2013
|
$
|
1,650
|
|
|
$
|
657
|
|
|
$
|
763
|
|
|
$
|
230
|
|
|
Fair Value Measurements at Reporting Date
|
||||||||||||||
Millions of dollars
|
Total
|
|
Level 1
|
|
Level 2
|
|
Level 3
|
||||||||
Asset Category at December 31, 2012
|
|
|
|
|
|
|
|
||||||||
United States plan assets
|
|
|
|
|
|
|
|
||||||||
Equity funds
|
$
|
25
|
|
|
$
|
19
|
|
|
$
|
6
|
|
|
$
|
—
|
|
Equity securities
|
22
|
|
|
22
|
|
|
—
|
|
|
—
|
|
||||
Fixed income funds
|
10
|
|
|
10
|
|
|
—
|
|
|
—
|
|
||||
Government bonds
|
4
|
|
|
—
|
|
|
4
|
|
|
—
|
|
||||
Corporate bonds
|
9
|
|
|
—
|
|
|
9
|
|
|
—
|
|
||||
Cash and cash equivalents
|
1
|
|
|
—
|
|
|
1
|
|
|
—
|
|
||||
Total United States plan assets
|
$
|
71
|
|
|
$
|
51
|
|
|
$
|
20
|
|
|
$
|
—
|
|
International plan assets
|
|
|
|
|
|
|
|
||||||||
Equity funds
|
$
|
357
|
|
|
$
|
94
|
|
|
$
|
263
|
|
|
$
|
—
|
|
Equity securities
|
40
|
|
|
39
|
|
|
1
|
|
|
—
|
|
||||
Fixed income funds
|
784
|
|
|
410
|
|
|
330
|
|
|
44
|
|
||||
Hedge funds
|
115
|
|
|
—
|
|
|
27
|
|
|
88
|
|
||||
Real estate funds
|
62
|
|
|
—
|
|
|
35
|
|
|
27
|
|
||||
Other funds
|
110
|
|
|
—
|
|
|
57
|
|
|
53
|
|
||||
Cash and cash equivalents
|
13
|
|
|
11
|
|
|
2
|
|
|
—
|
|
||||
Other
|
10
|
|
|
3
|
|
|
—
|
|
|
7
|
|
||||
Total international plan assets
|
$
|
1,491
|
|
|
$
|
557
|
|
|
$
|
715
|
|
|
$
|
219
|
|
Total plan assets at December 31, 2012
|
$
|
1,562
|
|
|
$
|
608
|
|
|
$
|
735
|
|
|
$
|
219
|
|
Millions of dollars
|
Total
|
|
Equity Funds
|
|
Fixed Income Funds
|
|
Hedge Funds
|
|
Real Estate Funds
|
|
Other Funds
|
|
Other
|
||||||||||||||
International plan assets
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Balance at December 31, 2011
|
$
|
10
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
10
|
|
Return on assets held at end of year
|
6
|
|
|
—
|
|
|
2
|
|
|
3
|
|
|
1
|
|
|
—
|
|
|
—
|
|
|||||||
Purchases, sales and settlements
|
198
|
|
|
—
|
|
|
41
|
|
|
83
|
|
|
25
|
|
|
52
|
|
|
(3
|
)
|
|||||||
Foreign exchange impact
|
5
|
|
|
—
|
|
|
1
|
|
|
2
|
|
|
1
|
|
|
1
|
|
|
—
|
|
|||||||
Balance at December 31, 2012
|
$
|
219
|
|
|
$
|
—
|
|
|
$
|
44
|
|
|
$
|
88
|
|
|
$
|
27
|
|
|
$
|
53
|
|
|
$
|
7
|
|
Return on assets held at end of year
|
20
|
|
|
—
|
|
|
(1
|
)
|
|
15
|
|
|
3
|
|
|
3
|
|
|
—
|
|
|||||||
Return on assets sold during the year
|
3
|
|
|
—
|
|
|
3
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||||
Purchases, sales and settlements, net
|
(15
|
)
|
|
1
|
|
|
(12
|
)
|
|
—
|
|
|
2
|
|
|
(6
|
)
|
|
—
|
|
|||||||
Foreign exchange impact
|
3
|
|
|
—
|
|
|
(1
|
)
|
|
2
|
|
|
1
|
|
|
1
|
|
|
—
|
|
|||||||
Balance at December 31, 2013
|
$
|
230
|
|
|
$
|
1
|
|
|
$
|
33
|
|
|
$
|
105
|
|
|
$
|
33
|
|
|
$
|
51
|
|
|
$
|
7
|
|
|
Pension Benefits
|
||||||
Millions of dollars
|
United States
|
|
Int’l
|
||||
2014
|
$
|
3
|
|
|
$
|
64
|
|
2015
|
$
|
24
|
|
|
$
|
66
|
|
2016
|
$
|
4
|
|
|
$
|
68
|
|
2017
|
$
|
4
|
|
|
$
|
71
|
|
2018
|
$
|
4
|
|
|
$
|
73
|
|
Years 2019 – 2023
|
$
|
21
|
|
|
$
|
405
|
|
Millions of dollars
|
December 31,
|
||||||
|
2013
|
|
2012
|
||||
Deferred compensation plans obligations
|
$
|
66
|
|
|
$
|
58
|
|
Millions of dollars
|
December 31, 2013
|
||
Current nonrecourse project-finance debt of a VIE consolidated by KBR
|
$
|
10
|
|
Noncurrent nonrecourse project-finance debt of a VIE consolidated by KBR
|
$
|
78
|
|
Total nonrecourse project-finance debt of a VIE consolidated by KBR
|
$
|
88
|
|
|
Years ended December 31,
|
||||||||||
Millions of dollars
|
2013
|
|
2012
|
|
2011
|
||||||
Current income taxes:
|
|
|
|
|
|
||||||
Federal
|
$
|
(7
|
)
|
|
$
|
61
|
|
|
$
|
(19
|
)
|
Foreign
|
(109
|
)
|
|
(130
|
)
|
|
(183
|
)
|
|||
State
|
4
|
|
|
1
|
|
|
(3
|
)
|
|||
Total current
|
(112
|
)
|
|
(68
|
)
|
|
(205
|
)
|
|||
Deferred income taxes:
|
|
|
|
|
|
||||||
Federal
|
13
|
|
|
12
|
|
|
110
|
|
|||
Foreign
|
(44
|
)
|
|
(42
|
)
|
|
62
|
|
|||
State
|
7
|
|
|
12
|
|
|
1
|
|
|||
Total deferred
|
(24
|
)
|
|
(18
|
)
|
|
173
|
|
|||
Provision for income taxes
|
$
|
(136
|
)
|
|
$
|
(86
|
)
|
|
$
|
(32
|
)
|
|
Years ended December 31,
|
||||||||||
Millions of dollars
|
2013
|
|
2012
|
|
2011
|
||||||
United States
|
$
|
(142
|
)
|
|
$
|
(366
|
)
|
|
$
|
12
|
|
Foreign
|
605
|
|
|
654
|
|
|
560
|
|
|||
Total
|
$
|
463
|
|
|
$
|
288
|
|
|
$
|
572
|
|
|
Years ended December 31,
|
|||||||
|
2013
|
|
2012
|
|
2011
|
|||
U.S. statutory federal rate
|
35.0
|
%
|
|
35.0
|
%
|
|
35.0
|
%
|
Rate differentials on foreign earnings
|
(3.1
|
)
|
|
(7.9
|
)
|
|
(3.8
|
)
|
Non-deductible goodwill impairment
|
—
|
|
|
21.6
|
|
|
—
|
|
State and local income taxes
|
(0.6
|
)
|
|
0.2
|
|
|
0.4
|
|
Foreign, federal and state tax adjustments
|
(0.6
|
)
|
|
(2.9
|
)
|
|
(5.4
|
)
|
Halliburton tax sharing agreement arbitration
|
8.1
|
|
|
—
|
|
|
—
|
|
Barracuda arbitration award indemnification
|
—
|
|
|
(2.8
|
)
|
|
(12.1
|
)
|
Tax benefit from Australian joint venture losses
|
—
|
|
|
(3.2
|
)
|
|
(5.6
|
)
|
U.S. taxes provided on 50% of Australian earnings
|
1.2
|
|
|
3.9
|
|
|
—
|
|
Valuation allowance
|
1.3
|
|
|
3.4
|
|
|
(1.4
|
)
|
Uncertain tax position changes
|
(3.9
|
)
|
|
(9.9
|
)
|
|
(1.8
|
)
|
Taxes on unconsolidated affiliates
|
(3.4
|
)
|
|
(3.2
|
)
|
|
—
|
|
Taxes on unincorporated joint ventures
|
(6.0
|
)
|
|
(5.0
|
)
|
|
(1.8
|
)
|
U.K. tax rate change
|
2.8
|
|
|
3.5
|
|
|
1.2
|
|
Other permanent items, net
|
(1.4
|
)
|
|
(2.8
|
)
|
|
0.9
|
|
Total effective tax rate on pretax earnings
|
29.4
|
%
|
|
29.9
|
%
|
|
5.6
|
%
|
|
Years ended December 31,
|
||||||
Millions of dollars
|
2013
|
|
2012
|
||||
Deferred tax assets:
|
|
|
|
||||
Employee compensation and benefits
|
$
|
176
|
|
|
$
|
185
|
|
Foreign tax credit carryforwards
|
179
|
|
|
24
|
|
||
Accrued foreign tax credit carryforwards
|
81
|
|
|
—
|
|
||
Loss carryforwards
|
123
|
|
|
74
|
|
||
Insurance accruals
|
25
|
|
|
29
|
|
||
Allowance for bad debt
|
8
|
|
|
9
|
|
||
Accrued liabilities
|
50
|
|
|
69
|
|
||
Barracuda arbitration award indemnification
|
—
|
|
|
79
|
|
||
Total
|
642
|
|
|
469
|
|
||
Valuation allowances
|
(44
|
)
|
|
(36
|
)
|
||
Net deferred tax asset
|
598
|
|
|
433
|
|
||
Deferred tax liabilities:
|
|
|
|
||||
Construction contract accounting
|
$
|
(87
|
)
|
|
$
|
(15
|
)
|
Intangibles
|
(49
|
)
|
|
(47
|
)
|
||
Depreciation and amortization
|
(43
|
)
|
|
(25
|
)
|
||
Other
|
(29
|
)
|
|
(13
|
)
|
||
Total
|
(208
|
)
|
|
(100
|
)
|
||
Deferred income tax asset, net
|
$
|
390
|
|
|
$
|
333
|
|
Millions of dollars
|
2013
|
|
2012
|
|
2011
|
||||||
Balance at January 1
|
$
|
95
|
|
|
$
|
120
|
|
|
$
|
95
|
|
Increases in tax positions for current year
|
4
|
|
|
6
|
|
|
37
|
|
|||
Increases in tax positions for prior years
|
15
|
|
|
13
|
|
|
11
|
|
|||
Decreases in tax positions for prior years
|
(36
|
)
|
|
(25
|
)
|
|
(5
|
)
|
|||
Reductions in tax positions for audit settlements
|
—
|
|
|
(11
|
)
|
|
(7
|
)
|
|||
Reductions in tax positions for lapse of statute of limitations
|
(2
|
)
|
|
(9
|
)
|
|
(11
|
)
|
|||
Other, primarily due to exchange rate fluctuations affecting non-U.S. tax positions
|
(7
|
)
|
|
1
|
|
|
—
|
|
|||
Balance at December 31
|
$
|
69
|
|
|
$
|
95
|
|
|
$
|
120
|
|
Millions of dollars
|
Future rental
payments
|
||
2014
|
$
|
100
|
|
2015
|
$
|
88
|
|
2016
|
$
|
80
|
|
2017
|
$
|
62
|
|
2018
|
$
|
55
|
|
Beyond 2018
|
$
|
399
|
|
Millions of dollars
|
Total
|
|
PIC
|
|
Retained
Earnings
|
|
Treasury
Stock
|
|
AOCL
|
|
NCI
|
||||||||||||
Balance at December 31, 2010
|
$
|
2,204
|
|
|
$
|
1,981
|
|
|
$
|
1,157
|
|
|
(454
|
)
|
|
$
|
(438
|
)
|
|
$
|
(42
|
)
|
|
Share-based compensation
|
19
|
|
|
19
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Common stock issued upon exercise of stock options
|
7
|
|
|
7
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Post-closing adjustment related to acquisition of former NCI partner
|
(5
|
)
|
|
(5
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Tax benefit increase related to share-based plans
|
3
|
|
|
3
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Dividends declared to shareholders
|
(30
|
)
|
|
—
|
|
|
(30
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Repurchases of common stock
|
(118
|
)
|
|
—
|
|
|
—
|
|
|
(118
|
)
|
|
—
|
|
|
—
|
|
||||||
Issuance of ESPP shares
|
3
|
|
|
—
|
|
|
—
|
|
|
3
|
|
|
—
|
|
|
—
|
|
||||||
Distributions to noncontrolling interests
|
(63
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(63
|
)
|
||||||
Other noncontrolling interests activity
|
(7
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(7
|
)
|
||||||
Net income
|
540
|
|
|
—
|
|
|
480
|
|
|
—
|
|
|
—
|
|
|
60
|
|
||||||
Other comprehensive (loss), net of tax
|
(111
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(110
|
)
|
|
(1
|
)
|
||||||
Balance at December 31, 2011
|
$
|
2,442
|
|
|
$
|
2,005
|
|
|
$
|
1,607
|
|
|
$
|
(569
|
)
|
|
$
|
(548
|
)
|
|
$
|
(53
|
)
|
Deferred tax and foreign currency adjustments (a)
|
17
|
|
|
17
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Share-based compensation
|
16
|
|
|
16
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Common stock issued upon exercise of stock options
|
7
|
|
|
7
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Tax benefit increase related to share-based plans
|
4
|
|
|
4
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Dividends declared to shareholders
|
(42
|
)
|
|
—
|
|
|
(42
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Repurchases of common stock
|
(40
|
)
|
|
—
|
|
|
—
|
|
|
(40
|
)
|
|
—
|
|
|
—
|
|
||||||
Issuance of ESPP shares
|
3
|
|
|
—
|
|
|
—
|
|
|
3
|
|
|
—
|
|
|
—
|
|
||||||
Distributions to noncontrolling interests
|
(36
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(36
|
)
|
||||||
Net income
|
202
|
|
|
—
|
|
|
144
|
|
|
—
|
|
|
—
|
|
|
58
|
|
||||||
Other comprehensive (loss), net of tax
|
(62
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(62
|
)
|
|
—
|
|
||||||
Balance at December 31, 2012
|
$
|
2,511
|
|
|
$
|
2,049
|
|
|
$
|
1,709
|
|
|
$
|
(606
|
)
|
|
$
|
(610
|
)
|
|
$
|
(31
|
)
|
Adjustment pursuant to Accounting Referee's report on tax sharing agreement
|
(7
|
)
|
|
(7
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Share-based compensation
|
16
|
|
|
16
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Common stock issued upon exercise of stock options
|
6
|
|
|
6
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Dividends declared to shareholders
|
(36
|
)
|
|
—
|
|
|
(36
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Repurchases of common stock
|
(7
|
)
|
|
—
|
|
|
—
|
|
|
(7
|
)
|
|
—
|
|
|
—
|
|
||||||
Issuance of ESPP shares
|
4
|
|
|
1
|
|
|
—
|
|
|
3
|
|
|
—
|
|
|
—
|
|
||||||
Investments by noncontrolling interests
|
9
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
9
|
|
||||||
Change in NCI due to consolidation of previously unconsolidated JV and other transactions
|
2
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
2
|
|
||||||
Distributions to noncontrolling interests
|
(108
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(108
|
)
|
||||||
Net income
|
327
|
|
|
—
|
|
|
229
|
|
|
—
|
|
|
—
|
|
|
98
|
|
||||||
Other comprehensive income (loss), net of tax
|
(122
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(130
|
)
|
|
8
|
|
||||||
Balance at December 31, 2013
|
$
|
2,595
|
|
|
$
|
2,065
|
|
|
$
|
1,902
|
|
|
$
|
(610
|
)
|
|
$
|
(740
|
)
|
|
$
|
(22
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
December 31,
|
||||||||||
Millions of dollars
|
2013
|
|
2012
|
|
2011
|
||||||
Accumulated CTA, net of tax of $0, $27 and $19
|
$
|
(131
|
)
|
|
$
|
(88
|
)
|
|
$
|
(70
|
)
|
Accumulated pension liability adjustments, net of tax of $(221), $(203) and $(189)
|
(608
|
)
|
|
(521
|
)
|
|
(471
|
)
|
|||
Accumulated unrealized losses on derivatives, net of tax of $0, $0 and $1
|
(1
|
)
|
|
(1
|
)
|
|
(7
|
)
|
|||
Total accumulated other comprehensive loss
|
$
|
(740
|
)
|
|
$
|
(610
|
)
|
|
$
|
(548
|
)
|
Millions of dollars
|
Accumulated CTA
|
|
Accumulated pension liability adjustments
|
|
Accumulated unrealized losses on derivatives
|
|
Total
|
||||||||
Balance at December 31, 2012
|
$
|
(88
|
)
|
|
$
|
(521
|
)
|
|
$
|
(1
|
)
|
|
$
|
(610
|
)
|
Other comprehensive income adjustments before reclassifications
|
(44
|
)
|
|
(122
|
)
|
|
1
|
|
|
(165
|
)
|
||||
Amounts reclassified from accumulated other comprehensive income
|
1
|
|
|
35
|
|
|
(1
|
)
|
|
35
|
|
||||
Balance at December 31, 2013
|
$
|
(131
|
)
|
|
$
|
(608
|
)
|
|
$
|
(1
|
)
|
|
$
|
(740
|
)
|
Millions of dollars
|
December 31, 2013
|
|
Affected line item in the Condensed Consolidated Statements of Income
|
||
Accumulated CTA
|
|
|
|
||
Realized CTA
|
$
|
(1
|
)
|
|
Loss (gain) on disposition of assets, net
|
Tax expense
|
—
|
|
|
Provision for income taxes
|
|
Net CTA realized
|
$
|
(1
|
)
|
|
Net of tax
|
|
|
|
|
||
Accumulated pension liability adjustments
|
|
|
|
||
Amortization of actuarial loss (b)
|
$
|
(53
|
)
|
|
See (b) below
|
Tax benefit
|
18
|
|
|
Provision for income taxes
|
|
Net pension liability adjustment realized
|
$
|
(35
|
)
|
|
Net of tax
|
|
|
|
|
||
Accumulated unrealized losses on derivatives
|
|
|
|
||
Realized losses on derivatives
|
$
|
1
|
|
|
Cost of revenues
|
Tax benefit
|
—
|
|
|
Provision for income taxes
|
|
Net realized loss on derivatives
|
$
|
1
|
|
|
Net of tax
|
|
Millions of shares
|
Shares
|
|
Balance at December 31, 2011
|
172.3
|
|
Common stock issued
|
0.9
|
|
Balance at December 31, 2012
|
173.2
|
|
Common stock issued
|
0.7
|
|
Balance at December 31, 2013
|
173.9
|
|
Millions of shares and dollars
|
Shares
|
|
Amount
|
|||
Balance at December 31, 2011
|
24.2
|
|
|
$
|
569
|
|
Treasury stock acquired, net of ESPP shares issued
|
1.4
|
|
|
37
|
|
|
Balance at December 31, 2012
|
25.6
|
|
|
606
|
|
|
Treasury stock acquired, net of ESPP shares issued
|
0.1
|
|
|
4
|
|
|
Balance at December 31, 2013
|
25.7
|
|
|
$
|
610
|
|
Number of shares
|
2013
|
|
2012
|
|
2011
|
|||
Number of shares authorized
|
7,584,764
|
|
|
7,975,906
|
|
|
10,000,000
|
|
Number of shares repurchased under the authorization
|
—
|
|
|
391,142
|
|
|
2,024,094
|
|
Number of authorized shares available for repurchase as of December 31,
|
7,584,764
|
|
|
7,584,764
|
|
|
7,975,906
|
|
•
|
stock options, including incentive stock options and nonqualified stock options;
|
•
|
stock appreciation rights, in tandem with stock options or freestanding;
|
•
|
restricted stock;
|
•
|
restricted stock units;
|
•
|
cash performance awards; and
|
•
|
stock value equivalent awards.
|
|
Years ended December 31,
|
||||||
KBR stock options assumptions summary
|
2013
|
|
2012
|
||||
Granted stock options (millions of shares)
|
0.9
|
|
|
0.8
|
|
||
Weighted average expected term (in years)
|
6.5
|
|
|
6.3
|
|
||
Weighted average grant-date fair value per share
|
$
|
11.40
|
|
|
$
|
14.93
|
|
|
Years ended December 31,
|
||||||||||
KBR stock options range assumptions summary
|
2013
|
|
2012
|
||||||||
|
Range
|
|
Range
|
||||||||
|
Start
|
|
End
|
|
Start
|
|
End
|
||||
Expected volatility range
|
39.98
|
%
|
|
41.89
|
%
|
|
41.41
|
%
|
|
53.10
|
%
|
Expected dividend yield range
|
0.89
|
%
|
|
1.11
|
%
|
|
0.57
|
%
|
|
0.80
|
%
|
Risk-free interest rate range
|
0.98
|
%
|
|
2.09
|
%
|
|
0.86
|
%
|
|
1.48
|
%
|
KBR stock options activity summary
|
Number of Shares
|
|
Weighted
Average
Exercise Price
per Share
|
|
Weighted
Average
Remaining
Contractual
Term (years)
|
|
Aggregate
Intrinsic Value
(in millions)
|
|||||
Outstanding at December 31, 2012
|
3,013,518
|
|
|
$
|
24.00
|
|
|
6.86
|
|
$
|
24.76
|
|
Granted
|
912,031
|
|
|
30.25
|
|
|
|
|
|
|||
Exercised
|
(410,931
|
)
|
|
15.03
|
|
|
|
|
|
|||
Forfeited
|
(170,909
|
)
|
|
32.44
|
|
|
|
|
|
|||
Expired
|
(69,086
|
)
|
|
31.36
|
|
|
|
|
|
|||
Outstanding at December 31, 2013
|
3,274,623
|
|
|
$
|
26.27
|
|
|
6.93
|
|
$
|
22.49
|
|
Exercisable at December 31, 2013
|
1,860,125
|
|
|
$
|
21.86
|
|
|
5.57
|
|
$
|
20.73
|
|
Restricted stock activity summary
|
Number of
Shares
|
|
Weighted
Average
Grant-Date
Fair Value per
Share
|
|||
Nonvested shares at December 31, 2012
|
665,030
|
|
|
$
|
27.83
|
|
Granted
|
383,284
|
|
|
30.64
|
|
|
Vested
|
(274,504
|
)
|
|
26.44
|
|
|
Forfeited
|
(105,044
|
)
|
|
30.23
|
|
|
Nonvested shares at December 31, 2013
|
668,766
|
|
|
$
|
29.64
|
|
Share-based compensation summary table
|
Years ended December 31
|
||||||||||
Millions of dollars
|
2013
|
|
2012
|
|
2011
|
||||||
Share-based compensation
|
$
|
16
|
|
|
$
|
16
|
|
|
$
|
19
|
|
Total income tax benefit recognized in net income for share-based compensation arrangements
|
$
|
6
|
|
|
$
|
6
|
|
|
$
|
6
|
|
Incremental compensation cost
|
$
|
1
|
|
|
$
|
1
|
|
|
$
|
1
|
|
Tax benefit increase (decrease) related to share-based plans
|
$
|
—
|
|
|
$
|
4
|
|
|
$
|
3
|
|
|
Years ended December 31,
|
|||||||
Millions of shares
|
2013
|
|
2012
|
|
2011
|
|||
Basic weighted average common shares outstanding
|
148
|
|
|
148
|
|
|
150
|
|
Stock options and restricted shares
|
1
|
|
|
1
|
|
|
1
|
|
Diluted weighted average common shares outstanding
|
149
|
|
|
149
|
|
|
151
|
|
(in millions, except per share amounts)
|
First
|
|
Second
|
|
Third
|
|
Fourth
|
|
Year
|
||||||||||
2013
|
|
|
|
|
|
|
|
|
|
||||||||||
Total revenue
|
$
|
1,829
|
|
|
$
|
1,950
|
|
|
$
|
1,780
|
|
|
$
|
1,724
|
|
|
$
|
7,283
|
|
Gross profit (a)
|
156
|
|
|
140
|
|
|
201
|
|
|
84
|
|
|
581
|
|
|||||
Equity in earnings of unconsolidated affiliates
|
30
|
|
|
46
|
|
|
31
|
|
|
30
|
|
|
137
|
|
|||||
Operating income
|
133
|
|
|
123
|
|
|
166
|
|
|
49
|
|
|
471
|
|
|||||
Net income (a)
|
97
|
|
|
111
|
|
|
87
|
|
|
32
|
|
|
327
|
|
|||||
Net income attributable to noncontrolling interests
|
(9
|
)
|
|
(21
|
)
|
|
(63
|
)
|
|
(5
|
)
|
|
(98
|
)
|
|||||
Net income attributable to KBR
|
88
|
|
|
90
|
|
|
24
|
|
|
27
|
|
|
229
|
|
|||||
Net income attributable to KBR per share:
|
|
|
|
|
|
|
|
|
|
||||||||||
Net income attributable to KBR per share—Basic
|
$
|
0.59
|
|
|
$
|
0.61
|
|
|
$
|
0.16
|
|
|
$
|
0.19
|
|
|
$
|
1.55
|
|
Net income attributable to KBR per share—Diluted
|
$
|
0.59
|
|
|
$
|
0.61
|
|
|
$
|
0.16
|
|
|
$
|
0.18
|
|
|
$
|
1.54
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
2012
|
|
|
|
|
|
|
|
|
|
||||||||||
Total revenue
|
$
|
1,964
|
|
|
$
|
2,029
|
|
|
$
|
1,949
|
|
|
$
|
1,828
|
|
|
$
|
7,770
|
|
Gross Profit
|
126
|
|
|
150
|
|
|
182
|
|
|
60
|
|
|
518
|
|
|||||
Equity in earnings of unconsolidated affiliates
|
37
|
|
|
33
|
|
|
43
|
|
|
38
|
|
|
151
|
|
|||||
Operating income (b)
|
112
|
|
|
129
|
|
|
(11
|
)
|
|
69
|
|
|
299
|
|
|||||
Net income (loss)
|
98
|
|
|
112
|
|
|
(60
|
)
|
|
52
|
|
|
202
|
|
|||||
Net income attributable to noncontrolling interests
|
(7
|
)
|
|
(8
|
)
|
|
(21
|
)
|
|
(22
|
)
|
|
(58
|
)
|
|||||
Net income (loss) attributable to KBR
|
91
|
|
|
104
|
|
|
(81
|
)
|
|
30
|
|
|
144
|
|
|||||
Net income attributable to KBR per share:
|
|
|
|
|
|
|
|
|
|
||||||||||
Net income (loss) attributable to KBR per share—Basic
|
$
|
0.61
|
|
|
$
|
0.70
|
|
|
$
|
(0.55
|
)
|
|
$
|
0.20
|
|
|
$
|
0.97
|
|
Net income (loss) attributable to KBR per share—Diluted
|
$
|
0.61
|
|
|
$
|
0.70
|
|
|
$
|
(0.55
|
)
|
|
$
|
0.20
|
|
|
$
|
0.97
|
|
(a)
|
As discussed in Note 1, we corrected an error, originating in periods prior to 2013. The correction of this error resulted in a net unfavorable impact to gross profit of
$25 million
in our Gas Monetization business segment for the year ended December 31, 2013, including
$22 million
in the fourth quarter. The correction of this error resulted in an after tax unfavorable impact to net income of
$17 million
for the year ended December 31, 2013, including
$14 million
in the fourth quarter.
|
(b)
|
Included in 2012 is a goodwill impairment charge of
$178 million
in our IGP business segment, as well as an impairment of long-lived asset charge of
$2 million
related to equipment, land and buildings.
|
•
|
Implement a control to include the actual and estimated foreign currency effects in the estimates of revenues, costs and profit at completion on projects with multiple currencies by enhancing the design of our project status templates and our procedures for completion of our project status templates.
|
•
|
Enhance the design of our monitoring controls over the completeness and accuracy of estimated revenues, costs and profit at completion for long-term construction projects with multiple currencies to specifically include a process for the person(s) responsible for the monitoring to perform inquiry or review of our controls over the review of the project status reports.
|
•
|
Provide training to our personnel involved in the estimation of estimates at completion of projects with multiple currencies.
|
1
|
|
Financial Statements:
|
|
|
|
(a)
|
|
||
2
|
|
Financial Statement Schedules:
|
Page No.
|
|
|
|
|
|
|
|
(a)
|
KPMG LLP Report on supplemental schedule
|
||
|
(b)
|
Schedule II—Valuation and qualifying accounts for the three years ended December 31, 2013
|
||
|
Note: All schedules not filed with this report required by Regulations S-X have been omitted as not applicable or not required, or the information required has been included in the notes to financial statements.
|
|
||
3.
|
|
Exhibits:
|
|
|
Exhibit
Number |
|
Description
|
|
|
|
2.1
|
|
Agreement and Plan of Merger dated as of May 6, 2008, by and among KBR, Inc., BE&K, Inc., and Whitehawk Sub, Inc., (incorporated by reference to Exhibit 2.1 to KBR’s Current Report on Form 8-K; File No. 001-33416)
|
|
|
|
3.1
|
|
KBR Amended and Restated Certificate of Incorporation (incorporated by reference to Exhibit 3.1 to KBR’s current report on Form 8-K filed June 7, 2012; Registration No. 333-133302)
|
|
|
|
3.2*
|
|
Amended and Restated Bylaws of KBR, Inc.
|
|
|
|
4.1
|
|
Form of specimen KBR common stock certificate (incorporated by reference to Exhibit 4.1 to KBR’s registration statement on Form S-1; Registration No. 333-133302)
|
|
|
|
10.1
|
|
Master Separation Agreement between Halliburton Company and KBR, Inc. dated as of November 20, 2006 (incorporated by reference to Exhibit 10.1 to KBR’s current report on Form 8-K dated November 20, 2006; File No. 001-33146)
|
|
|
|
10.2
|
|
Tax Sharing Agreement, dated as of January 1, 2006, by and between Halliburton Company, KBR Holdings, LLC and KBR, Inc., as amended effective February 26, 2007 (incorporated by reference to Exhibit 10.2 to KBR’s Annual Report on Form 10-K for the year ended December 31, 2006; File No. 001-33146)
|
|
|
|
10.3
|
|
Transition Services Agreement dated as of November 20, 2006, by and between Halliburton Energy Services, Inc. and KBR, Inc. (KBR as service provider) (incorporated by reference to Exhibit 10.4 to KBR’s current report on Form 8-K dated November 20, 2006; File No. 001-33146)
|
|
|
|
10.4
|
|
Transition Services Agreement dated as of November 20, 2006, by and between Halliburton Energy Services, Inc. and KBR, Inc. (Halliburton as service provider) (incorporated by reference to Exhibit 10.5 to KBR’s current report on Form 8-K dated November 20, 2006; File No. 001-33146)
|
|
|
|
10.5
|
|
Employee Matters Agreement dated as of November 20, 2006, by and between Halliburton Company and KBR, Inc. (incorporated by reference to Exhibit 10.6 to KBR’s current report on Form 8-K dated November 20, 2006; File No. 001-33146)
|
|
|
|
10.6
|
|
Intellectual Property Matters Agreement dated as of November 20, 2006, by and between Halliburton Company and KBR, Inc. (incorporated by reference to Exhibit 10.7 to KBR’s current report on Form 8-K dated November 20, 2006; File No. 001-33146)
|
|
|
|
10.7*
|
|
Form of Indemnification Agreement between KBR, Inc. and its directors and executive officers
|
|
|
|
10.8
|
|
Five Year Revolving Credit Agreement dated as of December 2, 2011 among KBR, Inc., the Banks party thereto, The Royal Bank of Scotland PLC, as Syndication Agent, ING Bank, N.V. and The Bank of Nova Scotia, as Co-Documentation Agents, Citigroup Global Markets Inc., RBS Securities Inc. ING Bank, N.V., and The Bank of Nova Scotia as Joint Lead Arrangers and Bookrunners, and Citibank, N.A., as Administrative Agent. (incorporated by reference to Exhibit 10.1 to KBR’s current report on Form 8-K dated December 7, 2011; File No. 1-33146)
|
|
|
|
10.9+
|
|
KBR, Inc. 2006 Stock and Incentive Plan (As Amended and Restated March 7, 2012) (incorporated by reference to KBR's definitive Proxy Statement dated April 5, 2012; File No. 1-33146)
|
|
|
|
10.10*
|
|
KBR, Inc. Senior Executive Performance Pay Plan
|
|
|
|
10.11*
|
|
KBR, Inc. Management Performance Pay Plan
|
|
|
|
10.12+
|
|
KBR, Inc. Transitional Stock Adjustment Plan (incorporated by reference to Exhibit 10.23 to KBR’s Form 10-K for the fiscal year ended December 31, 2006; File No. 1-33146)
|
|
|
|
10.13+
|
|
KBR Dresser Deferred Compensation Plan (incorporated by reference to Exhibit 4.5 to KBR’s Registration Statement on Form S-8 filed on April 13, 2007)
|
|
|
|
10.14+
|
|
KBR Supplemental Executive Retirement Plan (incorporated by reference to Exhibit 10.3 to KBR’s current report on Form 8-K dated April 9, 2007; File No. 1-33146)
|
|
|
|
10.15+
|
|
KBR Benefit Restoration Plan (incorporated by reference to Exhibit 10.4 to KBR’s current report on Form 8-K dated April 9, 2007; File No. 1-33146)
|
|
|
|
Exhibit
Number |
|
Description
|
10.16+
|
|
KBR Elective Deferral Plan (incorporated by reference to Exhibit 10.5 to KBR’s current report on Form 8-K dated April 9, 2007; File No. 1-33146)
|
|
|
|
10.17+
|
|
KBR Non-Employee Directors Elective Deferral Plan (incorporated by reference to exhibit 10.1 to KBR's current report on Form 8-K dated December 11, 2013; File No. 1-33146)
|
|
|
|
10.18+
|
|
Form of Stock Option Agreement pursuant to KBR, Inc. 2006 Stock and Incentive Plan (incorporated by reference to Exhibit 10.3 to KBR’s Form 10-Q for the quarter ended June 30, 2007; File No. 1-33146)
|
|
|
|
10.19+
|
|
Form of KBR Restricted Stock Agreement pursuant to KBR, Inc. 2006 Stock and Incentive Plan (incorporated by reference to Exhibit 10.4 to KBR’s Form 10-Q for the quarter ended June 30, 2007; File No. 1-33146)
|
|
|
|
10.20+
|
|
Form of KBR, Inc. Transitional Stock Adjustment Plan Stock Option Award (incorporated by reference to Exhibit 10.5 to KBR’s Form 10-Q for the quarter ended June 30, 2007; File No. 1-33146)
|
|
|
|
10.21+
|
|
Form of Restricted Stock Agreement between KBR, Inc. and William P. Utt pursuant to KBR, Inc. 2006 Stock and Incentive Plan (incorporated by reference to Exhibit 10.1 to KBR’s Form 10-Q for the quarter ended September 30, 2007; File No. 1-33146)
|
|
|
|
10.22+
|
|
Form of revised KBR Performance Award Agreement pursuant to KBR, Inc. 2006 Stock and Incentive Plan (incorporated by reference to Exhibit 10.25 to KBR’s Form 10-K for the year ended December 31, 2010; File No. 1-33146)
|
|
|
|
10.23+
|
|
Form of revised KBR Performance Award Agreement pursuant to KBR, Inc. 2006 Stock and Incentive Plan (incorporated by reference to Exhibit 10.25 to KBR’s annual report on Form 10-K for the year ended December 31, 2012; File No. 1-33146)
|
|
|
|
10.24+
|
|
Form of revised Nonstatutory Stock Option Agreement for US and Non-US Employees pursuant to KBR, Inc. 2006 Stock and Incentive Plan (incorporated by reference to Exhibit 10.1 to KBR’s quarterly report on Form 10-Q for the period ended March 31, 2013; File No. 1-33146)
|
|
|
|
10.25+
|
|
Form of revised Restricted Stock Unit Agreement (U.S. Employee) pursuant to KBR, Inc. 2006 Stock and Incentive Plan (incorporated by reference to Exhibit 10.2 to KBR’s quarterly report on Form 10-Q for the period ended March 31, 2013; File No. 1-33146)
|
|
|
|
10.26+
|
|
Form of revised Restricted Stock Unit Agreement (International Employee) pursuant to KBR, Inc. 2006 Stock and Incentive Plan (incorporated by reference to Exhibit 10.5 to KBR’s quarterly report on Form 10-Q for the period ended March 31, 2013; File No. 1-33146)
|
|
|
|
10.27+
|
|
Form of revised Restricted Stock Unit Agreement (Director) pursuant to KBR, Inc. 2006 Stock and Incentive Plan (incorporated by reference to Exhibit 10.3 to KBR’s quarterly report on Form 10-Q for the period ended March 31, 2013; File No. 1-33146)
|
|
|
|
10.28+
|
|
Form of revised Performance Award Agreement pursuant to KBR, Inc. 2006 Stock and Incentive Plan (incorporated by reference to Exhibit 10.4 to KBR’s quarterly report on Form 10-Q for the period ended March 31, 2013; File No. 1-33146)
|
|
|
|
10.29+*
|
|
Form of Restricted Stock Unit Agreement (Three-Year Cliff Vesting) pursuant to KBR, Inc. 2006 Stock and Incentive Plan
|
|
|
|
10.30+
|
|
Form of Severance and Change in Control Agreement (incorporated by reference to Exhibit 10.1 to KBR’s Form 10-Q for the quarter ended September 30, 2008; File No. 1-33146)
|
|
|
|
10.31+
|
|
Severance and Change of Control Agreement effective as of October 21, 2009, between KBR Technical Services, Inc., a Delaware corporation, KBR, Inc., and Susan K. Carter (incorporated by reference to Exhibit 10.1 to KBR’s current report on Form 8-K dated October 26, 2009; File No. 1-33146)
|
|
|
|
10.32+
|
|
Severance and Change of Control Agreement effective as of January 18, 2010, between KBR Technical Services, Inc., a Delaware corporation, KBR, Inc., and Mark S. Williams (incorporated by reference to Exhibit 10.1 to KBR’s current report on Form 8-K dated January 18, 2010; File No. 1-33416)
|
|
|
|
Exhibit
Number |
|
Description
|
10.33+
|
|
Severance and Change of Control Agreement effective as of August 16, 2010, between KBR Technical Services, Inc., a Delaware corporation, KBR, Inc., and Dennis S. Baldwin (incorporated by reference to Exhibit 10.1 to KBR’s current report on Form 8-K dated August 16, 2010; File No. 1-33146)
|
|
|
|
10.34+
|
|
Severance and Change of Control Agreement effective as of December 31, 2008, by and between KBR Technical Services, Inc., a Delaware corporation, KBR, Inc., and William P. Utt (incorporated by reference to Exhibit 10.33 to KBR's annual report on Form 10-K for the year ended December 31, 2011; File No. 1-33146)
|
|
|
|
10.35+
|
|
Severance and Change of Control Agreement effective as of August 26, 2008, by and between KBR Technical Services, Inc., a Delaware corporation, KBR, Inc., and John L. Rose (incorporated by reference to Exhibit 10.33 to KBR’s annual report on Form 10-K for the year ended December 31, 2011; File No. 1-33146)
|
|
|
|
10.36+
|
|
Severance and Change of Control Agreement effective as of August 26, 2008, by and between KBR Technical Services, Inc., a Delaware corporation, KBR, Inc., and Andrew D. Farley (incorporated by reference to Exhibit 10.34 to KBR’s annual report on Form 10-K for the year ended December 31, 2011; File No. 1-33146)
|
|
|
|
10.37+
|
|
Severance and Change of Control Agreement effective as of August 26, 2008, by and between KBR Technical Services, Inc., a Delaware corporation, KBR, Inc., and David L. Zimmerman (incorporated by reference to Exhibit 10.35 to KBR’s annual report on Form 10-K for the year ended December 31, 2011; File No. 1-33146)
|
|
|
|
10.38+
|
|
Amendment to the 2008 Severance and Change in Control Agreements effective as of December 31, 2008 (incorporated by reference to Exhibit 10.36 to KBR’s annual report on Form 10-K for the year ended December 31, 2011; File No. 1-33146)
|
|
|
|
10.39+
|
|
Amendment to the Severance and Change in Control Agreement with Susan K. Carter effective as of January 15, 2010 (incorporated by reference to Exhibit 10.37 to KBR’s annual report on Form 10-K for the year ended December 31, 2011; File No. 1-33146)
|
|
|
|
10.40+
|
|
Severance and Change of Control Agreement effective as of July 9, 2012, by and between KBR Technical Services, Inc., a Delaware corporation, KBR, Inc., and Ivor Harrington (incorporated by reference to Exhibit 10.1 to KBR's current report on Form 8-K dated July 9, 2012; File No. 1-33146)
|
|
|
|
10.41+
|
|
Severance and Change of Control Agreement effective as of December 11, 2011, by and between KBR Technical Services, Inc., a Delaware corporation, KBR, Inc., and Roy Oelking (incorporated by reference to Exhibit 10.38 to KBR’s annual report on Form 10-K for the year ended December 31, 2012; File No. 1-33146)
|
|
|
|
10.42+
|
|
Severance and Change of Control Agreement effective as of April 8, 2013, by and between KBR Technical Services, Inc., a Delaware corporation, KBR, Inc., and Andrew Summers (incorporated by reference to Exhibit 10.1 to KBR’s current report on Form 8-K dated March 6, 2013; File No. 1-33146)
|
|
|
|
10.43+
|
|
Severance and Change of Control Agreement effective as of December 14, 2011, by and between KBR Technical Services, Inc., a Delaware corporation, KBR, Inc., and Mitch Dauzat (incorporated by reference to Exhibit 10.1 to KBR’s quarterly report on Form 10-Q for the period ended September 30, 2013; File No. 1-33146)
|
|
|
|
10.44+
|
|
Severance and Change of Control Agreement effective as of October 28, 2013, by and between KBR Technical Services, Inc., a Delaware corporation, KBR, Inc., and Brian Ferraioli (incorporated by reference to Exhibit 10.1 to KBR’s current report on Form 8-K dated October 28, 2013; File No. 1-33146)
|
|
|
|
10.45+
|
|
Transition Agreement dated December 13, 2013 among KBR, Inc., KBR Technical Services, Inc., a Delaware corporation, and William P. Utt (incorporated by reference to Exhibit 10.1 to KBR’s current report on Form 8-K dated December 11, 2013; File No. 1-33146)
|
|
|
|
*21.1
|
|
List of subsidiaries
|
|
|
|
*23.1
|
|
Consent of KPMG LLP—Houston, Texas
|
|
|
|
*31.1
|
|
Certification of the Chief Executive Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
|
Exhibit
Number |
|
Description
|
|
|
|
*31.2
|
|
Certification of the Chief Financial Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
|
|
|
|
**32.1
|
|
Certification Furnished Pursuant to 18 U.S.C. Section 1350 as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
|
|
|
|
**32.2
|
|
Certification Furnished Pursuant to 18 U.S.C. Section 1350 as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
|
|
|
|
***101.INS
|
|
XBRL Instance Document
|
|
|
|
***101.SCH
|
|
XBRL Taxonomy Extension Schema Document
|
|
|
|
***101.CAL
|
|
XBRL Taxonomy Extension Calculation Linkbase Document
|
+
|
Management contracts or compensatory plans or arrangements
|
/s/ KPMG LLP
|
Houston, Texas
|
February 27, 2014
|
|
|
|
Additions
|
|
|
|
|
||||||||||||
Descriptions
|
Balance at
Beginning
Period
|
|
Charged to
Costs and
Expenses
|
|
Charged to
Other
Accounts
|
|
Deductions
|
|
Balance at
End of Period
|
||||||||||
Year ended December 31, 2013:
|
|
|
|
|
|
|
|
|
|
||||||||||
Deducted from accounts and notes receivable:
|
|
|
|
|
|
|
|
|
|
||||||||||
Allowance for doubtful accounts
|
$
|
15
|
|
|
$
|
5
|
|
|
$
|
—
|
|
|
$
|
(2
|
)(a)
|
|
$
|
18
|
|
Reserve for losses on uncompleted contracts
|
$
|
56
|
|
|
$
|
9
|
|
|
$
|
—
|
|
|
$
|
(53
|
)
|
|
$
|
12
|
|
Reserve for potentially disallowable costs incurred under government contracts
|
$
|
122
|
|
|
$
|
—
|
|
|
$
|
2
|
(b)
|
|
$
|
(32
|
)
|
|
$
|
92
|
|
Year ended December 31, 2012:
|
|
|
|
|
|
|
|
|
|
||||||||||
Deducted from accounts and notes receivable:
|
|
|
|
|
|
|
|
|
|
||||||||||
Allowance for doubtful accounts
|
$
|
24
|
|
|
$
|
6
|
|
|
$
|
—
|
|
|
$
|
(15
|
)(a)
|
|
$
|
15
|
|
Reserve for losses on uncompleted contracts
|
$
|
22
|
|
|
$
|
53
|
|
|
$
|
—
|
|
|
$
|
(19
|
)
|
|
$
|
56
|
|
Reserve for potentially disallowable costs incurred under government contracts
|
$
|
127
|
|
|
$
|
—
|
|
|
$
|
5
|
(b)
|
|
$
|
(10
|
)
|
|
$
|
122
|
|
Year ended December 31, 2011:
|
|
|
|
|
|
|
|
|
|
||||||||||
Deducted from accounts and notes receivable:
|
|
|
|
|
|
|
|
|
|
||||||||||
Allowance for doubtful accounts
|
$
|
27
|
|
|
$
|
(2
|
)
|
|
$
|
—
|
|
|
$
|
(1
|
)(a)
|
|
$
|
24
|
|
Reserve for losses on uncompleted contracts
|
$
|
26
|
|
|
$
|
13
|
|
|
$
|
—
|
|
|
$
|
(17
|
)
|
|
$
|
22
|
|
Reserve for potentially disallowable costs incurred under government contracts
|
$
|
141
|
|
|
$
|
—
|
|
|
$
|
22
|
(b)
|
|
$
|
(36
|
)
|
|
$
|
127
|
|
|
(a)
|
Receivable write-offs, net of recoveries, and reclassifications.
|
(b)
|
Reserves have been recorded as reductions of revenue, net of reserves no longer required.
|
KBR, INC.
|
||
|
|
|
By:
|
|
/s/ William P. Utt
|
|
|
William P. Utt
|
|
|
President and Chief Executive Officer
|
Signature
|
|
Title
|
|
|
|
/s/ William P. Utt
|
|
President, Chief Executive Officer and Director
|
William P. Utt
|
|
(Principal Executive Officer)
|
|
|
|
/s/ Brian K. Ferraioli
|
|
Executive Vice President and Chief Financial Officer
|
Brian K. Ferraioli
|
|
(Principal Financial Officer)
|
|
|
|
/s/ Dennis Baldwin
|
|
Senior Vice President and Chief Accounting Officer
|
Dennis Baldwin
|
|
(Principal Accounting Officer)
|
|
|
|
/s/ W. Frank Blount
|
|
Director
|
W. Frank Blount
|
|
|
|
|
|
/s/ Loren K. Carroll
|
|
Director
|
Loren K. Carroll
|
|
|
|
|
|
/s/ Linda Z. Cook
|
|
Director
|
Linda Z. Cook
|
|
|
|
|
|
/s/ Jeffrey E. Curtiss
|
|
Director
|
Jeffrey E. Curtiss
|
|
|
|
|
|
/s/ John R. Huff
|
|
Director
|
John R. Huff
|
|
|
|
|
|
/s/ Lester L. Lyles
|
|
Director
|
Lester L. Lyles
|
|
|
|
|
|
/s/ Richard J. Slater
|
|
Director
|
Richard J. Slater
|
|
|
|
|
|
/s/ Jack B. Moore
|
|
Director
|
Jack B. Moore
|
|
|
Exhibit
Number
|
|
Description
|
|
|
|
2.1
|
|
Agreement and Plan of Merger dated as of May 6, 2008, by and among KBR, Inc., BE&K, Inc., and Whitehawk Sub, Inc., (incorporated by reference to Exhibit 2.1 to KBR’s Current Report on Form 8-K; File No. 001-33416)
|
|
|
|
3.1
|
|
KBR Amended and Restated Certificate of Incorporation (incorporated by reference to Exhibit 3.1 to KBR’s current report on Form 8-K filed June 7, 2012; Registration No. 333-133302)
|
|
|
|
3.2*
|
|
Amended and Restated Bylaws of KBR, Inc.
|
|
|
|
4.1
|
|
Form of specimen KBR common stock certificate (incorporated by reference to Exhibit 4.1 to KBR’s registration statement on Form S-1; Registration No. 333-133302)
|
|
|
|
10.1
|
|
Master Separation Agreement between Halliburton Company and KBR, Inc. dated as of November 20, 2006 (incorporated by reference to Exhibit 10.1 to KBR’s current report on Form 8-K dated November 20, 2006; File No. 001-33146)
|
|
|
|
10.2
|
|
Tax Sharing Agreement, dated as of January 1, 2006, by and between Halliburton Company, KBR Holdings, LLC and KBR, Inc., as amended effective February 26, 2007 (incorporated by reference to Exhibit 10.2 to KBR’s Annual Report on Form 10-K for the year ended December 31, 2006; File No. 001-33146)
|
|
|
|
10.3
|
|
Transition Services Agreement dated as of November 20, 2006, by and between Halliburton Energy Services, Inc. and KBR, Inc. (KBR as service provider) (incorporated by reference to Exhibit 10.4 to KBR’s current report on Form 8-K dated November 20, 2006; File No. 001-33146)
|
|
|
|
10.4
|
|
Transition Services Agreement dated as of November 20, 2006, by and between Halliburton Energy Services, Inc. and KBR, Inc. (Halliburton as service provider) (incorporated by reference to Exhibit 10.5 to KBR’s current report on Form 8-K dated November 20, 2006; File No. 001-33146)
|
|
|
|
10.5
|
|
Employee Matters Agreement dated as of November 20, 2006, by and between Halliburton Company and KBR, Inc. (incorporated by reference to Exhibit 10.6 to KBR’s current report on Form 8-K dated November 20, 2006; File No. 001-33146)
|
|
|
|
10.6
|
|
Intellectual Property Matters Agreement dated as of November 20, 2006, by and between Halliburton Company and KBR, Inc. (incorporated by reference to Exhibit 10.7 to KBR’s current report on Form 8-K dated November 20, 2006; File No. 001-33146)
|
|
|
|
10.7*
|
|
Form of Indemnification Agreement between KBR, Inc. and its directors and executive officers
|
|
|
|
10.8
|
|
Five Year Revolving Credit Agreement dated as of December 2, 2011 among KBR, Inc., the Banks party thereto, The Royal Bank of Scotland PLC, as Syndication Agent, ING Bank, N.V. and The Bank of Nova Scotia, as Co-Documentation Agents, Citigroup Global Markets Inc., RBS Securities Inc. ING Bank, N.V., and The Bank of Nova Scotia as Joint Lead Arrangers and Bookrunners, and Citibank, N.A., as Administrative Agent. (incorporated by reference to Exhibit 10.1 to KBR’s current report on Form 8-K dated December 7, 2011; File No. 1-33146)
|
|
|
|
10.9+
|
|
KBR, Inc. 2006 Stock and Incentive Plan (As Amended and Restated March 7, 2012) (incorporated by reference to KBR's definitive Proxy Statement dated April 5, 2012; File No. 1-33146)
|
|
|
|
10.10*
|
|
KBR, Inc. Senior Executive Performance Pay Plan
|
|
|
|
10.11*
|
|
KBR, Inc. Management Performance Pay Plan
|
|
|
|
10.12+
|
|
KBR, Inc. Transitional Stock Adjustment Plan (incorporated by reference to Exhibit 10.23 to KBR’s Form 10-K for the fiscal year ended December 31, 2006; File No. 1-33146)
|
|
|
|
10.13+
|
|
KBR Dresser Deferred Compensation Plan (incorporated by reference to Exhibit 4.5 to KBR’s Registration Statement on Form S-8 filed on April 13, 2007)
|
|
|
|
10.14+
|
|
KBR Supplemental Executive Retirement Plan (incorporated by reference to Exhibit 10.3 to KBR’s current report on Form 8-K dated April 9, 2007; File No. 1-33146)
|
|
|
|
10.15+
|
|
KBR Benefit Restoration Plan (incorporated by reference to Exhibit 10.4 to KBR’s current report on Form 8-K dated April 9, 2007; File No. 1-33146)
|
|
|
|
Exhibit
Number
|
|
Description
|
10.16+
|
|
KBR Elective Deferral Plan (incorporated by reference to Exhibit 10.5 to KBR’s current report on Form 8-K dated April 9, 2007; File No. 1-33146)
|
|
|
|
10.17+
|
|
KBR Non-Employee Directors Elective Deferral Plan (incorporated by reference to exhibit 10.1 to KBR's current report on Form 8-K dated December 11, 2013; File No. 1-33146)
|
|
|
|
10.18+
|
|
Form of Stock Option Agreement pursuant to KBR, Inc. 2006 Stock and Incentive Plan (incorporated by reference to Exhibit 10.3 to KBR’s Form 10-Q for the quarter ended June 30, 2007; File No. 1-33146)
|
|
|
|
10.19+
|
|
Form of KBR Restricted Stock Agreement pursuant to KBR, Inc. 2006 Stock and Incentive Plan (incorporated by reference to Exhibit 10.4 to KBR’s Form 10-Q for the quarter ended June 30, 2007; File No. 1-33146)
|
|
|
|
10.20+
|
|
Form of KBR, Inc. Transitional Stock Adjustment Plan Stock Option Award (incorporated by reference to Exhibit 10.5 to KBR’s Form 10-Q for the quarter ended June 30, 2007; File No. 1-33146)
|
|
|
|
10.21+
|
|
Form of Restricted Stock Agreement between KBR, Inc. and William P. Utt pursuant to KBR, Inc. 2006 Stock and Incentive Plan (incorporated by reference to Exhibit 10.1 to KBR’s Form 10-Q for the quarter ended September 30, 2007; File No. 1-33146)
|
|
|
|
10.22+
|
|
Form of revised KBR Performance Award Agreement pursuant to KBR, Inc. 2006 Stock and Incentive Plan (incorporated by reference to Exhibit 10.25 to KBR’s Form 10-K for the year ended December 31, 2010; File No. 1-33146)
|
|
|
|
10.23+
|
|
Form of revised KBR Performance Award Agreement pursuant to KBR, Inc. 2006 Stock and Incentive Plan (incorporated by reference to Exhibit 10.25 to KBR’s annual report on Form 10-K for the year ended December 31, 2012; File No. 1-33146)
|
|
|
|
10.24+
|
|
Form of revised Nonstatutory Stock Option Agreement for US and Non-US Employees pursuant to KBR, Inc. 2006 Stock and Incentive Plan (incorporated by reference to Exhibit 10.1 to KBR’s quarterly report on Form 10-Q for the period ended March 31, 2013; File No. 1-33146)
|
|
|
|
10.25+
|
|
Form of revised Restricted Stock Unit Agreement (U.S. Employee) pursuant to KBR, Inc. 2006 Stock and Incentive Plan (incorporated by reference to Exhibit 10.2 to KBR’s quarterly report on Form 10-Q for the period ended March 31, 2013; File No. 1-33146)
|
|
|
|
10.26+
|
|
Form of revised Restricted Stock Unit Agreement (International Employee) pursuant to KBR, Inc. 2006 Stock and Incentive Plan (incorporated by reference to Exhibit 10.5 to KBR’s quarterly report on Form 10-Q for the period ended March 31, 2013; File No. 1-33146)
|
|
|
|
10.27+
|
|
Form of revised Restricted Stock Unit Agreement (Director) pursuant to KBR, Inc. 2006 Stock and Incentive Plan (incorporated by reference to Exhibit 10.3 to KBR’s quarterly report on Form 10-Q for the period ended March 31, 2013; File No. 1-33146)
|
|
|
|
10.28+
|
|
Form of revised Performance Award Agreement pursuant to KBR, Inc. 2006 Stock and Incentive Plan (incorporated by reference to Exhibit 10.4 to KBR’s quarterly report on Form 10-Q for the period ended March 31, 2013; File No. 1-33146)
|
|
|
|
10.29+*
|
|
Form of Restricted Stock Unit Agreement (Three-Year Cliff Vesting) pursuant to KBR, Inc. 2006 Stock and Incentive Plan
|
|
|
|
10.30+
|
|
Form of Severance and Change in Control Agreement (incorporated by reference to Exhibit 10.1 to KBR’s Form 10-Q for the quarter ended September 30, 2008; File No. 1-33146)
|
|
|
|
10.31+
|
|
Severance and Change of Control Agreement effective as of October 21, 2009, between KBR Technical Services, Inc., a Delaware corporation, KBR, Inc., and Susan K. Carter (incorporated by reference to Exhibit 10.1 to KBR’s current report on Form 8-K dated October 26, 2009; File No. 1-33146)
|
|
|
|
10.32+
|
|
Severance and Change of Control Agreement effective as of January 18, 2010, between KBR Technical Services, Inc., a Delaware corporation, KBR, Inc., and Mark S. Williams (incorporated by reference to Exhibit 10.1 to KBR’s current report on Form 8-K dated January 18, 2010; File No. 1-33416)
|
|
|
|
Exhibit
Number
|
|
Description
|
10.33+
|
|
Severance and Change of Control Agreement effective as of August 16, 2010, between KBR Technical Services, Inc., a Delaware corporation, KBR, Inc., and Dennis S. Baldwin (incorporated by reference to Exhibit 10.1 to KBR’s current report on Form 8-K dated August 16, 2010; File No. 1-33146)
|
|
|
|
10.34+
|
|
Severance and Change of Control Agreement effective as of December 31, 2008, by and between KBR Technical Services, Inc., a Delaware corporation, KBR, Inc., and William P. Utt (incorporated by reference to Exhibit 10.33 to KBR's annual report on Form 10-K for the year ended December 31, 2011; File No. 1-33146)
|
|
|
|
10.35+
|
|
Severance and Change of Control Agreement effective as of August 26, 2008, by and between KBR Technical Services, Inc., a Delaware corporation, KBR, Inc., and John L. Rose (incorporated by reference to Exhibit 10.33 to KBR’s annual report on Form 10-K for the year ended December 31, 2011; File No. 1-33146)
|
|
|
|
10.36+
|
|
Severance and Change of Control Agreement effective as of August 26, 2008, by and between KBR Technical Services, Inc., a Delaware corporation, KBR, Inc., and Andrew D. Farley (incorporated by reference to Exhibit 10.34 to KBR’s annual report on Form 10-K for the year ended December 31, 2011; File No. 1-33146)
|
|
|
|
10.37+
|
|
Severance and Change of Control Agreement effective as of August 26, 2008, by and between KBR Technical Services, Inc., a Delaware corporation, KBR, Inc., and David L. Zimmerman (incorporated by reference to Exhibit 10.35 to KBR’s annual report on Form 10-K for the year ended December 31, 2011; File No. 1-33146)
|
|
|
|
10.38+
|
|
Amendment to the 2008 Severance and Change in Control Agreements effective as of December 31, 2008 (incorporated by reference to Exhibit 10.36 to KBR’s annual report on Form 10-K for the year ended December 31, 2011; File No. 1-33146)
|
|
|
|
10.39+
|
|
Amendment to the Severance and Change in Control Agreement with Susan K. Carter effective as of January 15, 2010 (incorporated by reference to Exhibit 10.37 to KBR’s annual report on Form 10-K for the year ended December 31, 2011; File No. 1-33146)
|
|
|
|
10.40+
|
|
Severance and Change of Control Agreement effective as of July 9, 2012, by and between KBR Technical Services, Inc., a Delaware corporation, KBR, Inc., and Ivor Harrington (incorporated by reference to Exhibit 10.1 to KBR's current report on Form 8-K dated July 9, 2012; File No. 1-33146)
|
|
|
|
10.41+
|
|
Severance and Change of Control Agreement effective as of December 11, 2011, by and between KBR Technical Services, Inc., a Delaware corporation, KBR, Inc., and Roy Oelking (incorporated by reference to Exhibit 10.38 to KBR’s annual report on Form 10-K for the year ended December 31, 2012; File No. 1-33146)
|
|
|
|
10.42+
|
|
Severance and Change of Control Agreement effective as of April 8, 2013, by and between KBR Technical Services, Inc., a Delaware corporation, KBR, Inc., and Andrew Summers (incorporated by reference to Exhibit 10.1 to KBR’s current report on Form 8-K dated March 6, 2013; File No. 1-33146)
|
|
|
|
10.43+
|
|
Severance and Change of Control Agreement effective as of December 14, 2011, by and between KBR Technical Services, Inc., a Delaware corporation, KBR, Inc., and Mitch Dauzat (incorporated by reference to Exhibit 10.1 to KBR’s quarterly report on Form 10-Q for the period ended September 30, 2013; File No. 1-33146)
|
|
|
|
10.44+
|
|
Severance and Change of Control Agreement effective as of October 28, 2013, by and between KBR Technical Services, Inc., a Delaware corporation, KBR, Inc., and Brian Ferraioli (incorporated by reference to Exhibit 10.1 to KBR’s current report on Form 8-K dated October 28, 2013; File No. 1-33146)
|
|
|
|
10.45+
|
|
Transition Agreement dated December 13, 2013 among KBR, Inc., KBR Technical Services, Inc., a Delaware corporation, and William P. Utt (incorporated by reference to Exhibit 10.1 to KBR’s current report on Form 8-K dated December 11, 2013; File No. 1-33146)
|
|
|
|
*21.1
|
|
List of subsidiaries
|
|
|
|
*23.1
|
|
Consent of KPMG LLP—Houston, Texas
|
|
|
|
*31.1
|
|
Certification of the Chief Executive Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
|
+
|
Management contracts or compensatory plans or arrangements
|
ARTICLE I
|
1
|
|
PURPOSE
|
1
|
|
|
|
|
ARTICLE II
|
1
|
|
DEFINITIONS
|
1
|
|
2.1
Definitions
|
1
|
|
2.2
Number
|
4
|
|
2.3
Headings
|
4
|
|
|
|
|
ARTICLE III
|
4
|
|
PARTICIPATION
|
4
|
|
3.1
Participants
|
4
|
|
3.2
Partial Plan Year Participation
|
4
|
|
3.3
No Right to Participate
|
5
|
|
3.4
Plan Exclusive
|
5
|
|
3.5
Consent to Dispute Resolution
|
5
|
|
|
|
|
ARTICLE IV
|
5
|
|
ADMINISTRATION
|
5
|
|
|
|
|
ARTICLE V
|
5
|
|
REWARD DETERMINATIONS
|
5
|
|
5.1
Performance Measures
|
5
|
|
5.2
Performance Requirements
|
5
|
|
5.3
Reward Determinations
|
6
|
|
5.4
Reward Opportunities
|
6
|
|
5.5
Discretionary Adjustments
|
6
|
|
|
|
|
ARTICLE VI
|
7
|
|
DISTRIBUTION OF REWARDS
|
7
|
|
6.1
Form and Timing of Payment
|
7
|
|
6.2
Elective Deferral
|
7
|
|
6.3
Tax Withholding
|
7
|
|
|
|
|
ARTICLE VII
|
7
|
|
TERMINATION OF EMPLOYMENT
|
7
|
|
7.1
Termination of Service During Plan Year
|
7
|
|
7.2
Termination of Service After End of Plan Year But Prior to the Payment Date
|
7
|
|
|
|
|
|
|
ARTICLE VIII
|
8
|
|
RIGHTS OF PARTICIPANTS AND BENEFICIARIES
|
8
|
|
8.1
Status as a Participant or Beneficiary
|
8
|
|
8.2
Employment
|
8
|
|
8.3
Nontransferability
|
8
|
|
8.4
Nature of Plan
|
8
|
|
|
|
|
ARTICLE IX
|
9
|
|
CORPORATE CHANGE
|
9
|
|
|
|
|
ARTICLE X
|
9
|
|
AMENDMENT AND TERMINATION
|
9
|
|
|
|
|
ARTICLE XI
|
9
|
|
MISCELLANEOUS
|
9
|
|
11.1
Governing Law
|
9
|
|
11.2
Severability
|
9
|
|
11.3
Successor
|
9
|
|
11.4
Other Agreements
|
9
|
|
11.5
Effective Date
|
10
|
|
ARTICLE I
|
|
|
PURPOSE
|
1
|
|
|
|
|
ARTICLE II DEFINITIONS
|
1
|
|
2.1 Definitions
|
1
|
|
2.2 Number
|
3
|
|
2.3 Headings
|
3
|
|
|
|
|
ARTICLE III
|
|
|
PARTICIPATION
|
4
|
|
3.1 Participants
|
4
|
|
3.2 Partial Plan Year Participation
|
4
|
|
3.3 No Right to Participate
|
4
|
|
3.4 Plan Exclusive
|
4
|
|
3.5 Consent to Dispute Resolution
|
4
|
|
|
|
|
ARTICLE IV
|
|
|
ADMINISTRATION
|
5
|
|
|
|
|
ARTICLE V REWARD DETERMINATIONS
|
5
|
|
5.1 Performance Measures
|
5
|
|
5.2 Performance Requirements
|
5
|
|
5.3 Reward Determinations
|
5
|
|
5.4 Reward Opportunities
|
5
|
|
5.5 Discretionary Adjustments
|
5
|
|
|
|
|
ARTICLE VI DISTRIBUTION OF REWARDS
|
6
|
|
6.1 Form and Timing of Payment
|
6
|
|
6.2 Elective Deferral
|
6
|
|
6.3 Tax Withholding
|
6
|
|
|
|
|
ARTICLE VII TERMINATION OF EMPLOYMENT
|
6
|
|
7.1 Termination of Service During Plan Year
|
6
|
|
7.2 Termination of Service After End of Plan Year But Prior to the Payment Date
|
7
|
|
|
|
|
ARTICLE VIII RIGHTS OF PARTICIPANTS AND BENEFICIARIES
|
7
|
|
8.1 Status as a Participant or Beneficiary
|
7
|
|
8.2 Employment
|
7
|
|
8.3 Nontransferability
|
7
|
|
8.4 Nature of Plan
|
7
|
|
|
|
|
ARTICLE IX CORPORATE CHANGE
|
8
|
|
|
|
|
ARTICLE X AMENDMENT AND TERMINATION
|
8
|
|
|
|
|
ARTICLE XI MISCELLANEOUS
|
8
|
|
11.1 Governing Law
|
8
|
|
11.2 Severability
|
8
|
|
11.3 Successor
|
8
|
|
11.4 Other Agreements
|
9
|
|
11.5 Effective Date
|
9
|
|
Vesting Date
|
Vested Percentage of Total Number
of Restricted Stock Units
|
3rd Anniversary of Grant Date
|
100%
|
KBR, INC.
|
|
By:
|
|
|
|
Employee
|
|
|
|
NAME OF COMPANY
|
|
STATE OR COUNTRY OF INCORPORATION
|
|
|
|
BE&K International, Inc.
|
|
Delaware
|
|
|
|
BE&K Properties, Inc.
|
|
Alabama
|
|
|
|
BE&K, Inc.
|
|
Delaware
|
|
|
|
Corporacion Mexicana de Mantenimiento Integral S. de R.L. de C.V.
|
|
Mexico
|
|
|
|
KBR (U.K.) Investments Limited
|
|
United Kingdom, England & Wales
|
|
|
|
KBR Australia Pty Ltd.
|
|
Australia
|
|
|
|
KBR Building Group, LLC
|
|
Delaware
|
|
|
|
KBR Canada Ltd.
|
|
Canada
|
|
|
|
KBR Construction Company, LLC
|
|
Delaware
|
|
|
|
KBR E&C Australia Pty Ltd.
|
|
Australia
|
|
|
|
KBR Group Holdings, LLC
|
|
Delaware
|
|
|
|
KBR Holdings, LLC
|
|
Delaware
|
|
|
|
KBR Holdings Pty Ltd.
|
|
Australia
|
|
|
|
KBR I Cayman, Ltd.
|
|
Cayman Islands
|
|
|
|
KBR II Cayman, Ltd.
|
|
Cayman Islands
|
|
|
|
KBR Indonesia Holdings
|
|
Delaware
|
|
|
|
KBR Industrial Canada Co.
|
|
Canada
|
|
|
|
KBR Plant Services, Inc.
|
|
Delaware
|
|
|
|
KBR USA LLC
|
|
Delaware
|
|
|
|
KBR WABI LTD.
|
|
Canada
|
|
|
|
KBRDC Egypt Cayman Ltd.
|
|
Cayman Islands
|
|
|
|
Kellogg Brown & Root (Greenford) Limited
|
|
United Kingdom, England & Wales
|
|
|
|
Kellogg Brown & Root (Services) Limited
|
|
United Kingdom, England & Wales
|
|
|
|
Kellogg Brown & Root (U.K.) Limited
|
|
United Kingdom, England & Wales
|
|
|
|
Kellogg Brown & Root DH Limited
|
|
United Kingdom, England & Wales
|
|
|
|
Kellogg Brown & Root Holding B.V.
|
|
The Netherlands
|
|
|
|
Kellogg Brown & Root Holdings (U.K.) Limited
|
|
United Kingdom, England & Wales
|
|
|
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Kellogg Brown & Root Holdings Limited
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United Kingdom, England & Wales
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Kellogg Brown & Root International, Inc.
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Delaware
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Kellogg Brown & Root International Group Holdings LLP
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United Kingdom, England & Wales
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Kellogg Brown & Root Group Limited
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United Kingdom, England & Wales
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Kellogg Brown & Root Limited
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United Kingdom, England & Wales
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Kellogg Brown & Root LLC
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Delaware
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Kellogg Brown & Root London Holdings Limited
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United Kingdom, England & Wales
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Kellogg Brown & Root London Limited
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United Kingdom, England & Wales
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Kellogg Brown & Root Netherlands B.V.
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The Netherlands
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Kellogg Brown & Root Overseas Operations Limited
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United Kingdom, England & Wales
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Kellogg Brown & Root Overseas Projects Limited
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United Kingdom, England & Wales
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Kellogg Brown & Root Pty Ltd
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Australia
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Kellogg Brown & Root Services, Inc.
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Delaware
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HBR NL Holdings, LLC
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Delaware
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Laurel Financial Services B.V.
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The Netherlands
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MMM-SS Holdings, LLC
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Delaware
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PT KBR Indonesia
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Indonesia
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/s/ William P. Utt
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William P. Utt
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Chief Executive Officer
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/s/ Brian K. Ferraioli
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Brian K. Ferraioli
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Chief Financial Officer
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a)
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the Form 10-K of the Company for the period ended
December 31, 2013
, filed on the date hereof with the Securities and Exchange Commission (the “Report”) fully complies with the requirements of Section l3(a) or 15(d) of the Securities Exchange Act of 1934; and
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b)
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the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
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/s/ William P. Utt
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William P. Utt
Chief Executive Officer
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a)
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the Form 10-K of the Company for the period ended
December 31, 2013
, filed on the date hereof with the Securities and Exchange Commission (the “Report”) fully complies with the requirements of Section l3(a) or 15(d) of the Securities Exchange Act of 1934; and
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b)
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the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
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/s/ Brian K. Ferraioli
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Brian K. Ferraioli
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Chief Financial Officer
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